Exhibit 10.4

                                     LEASE

                                    BETWEEN

                METROPOLITAN LIFE INSURANCE COMPANY (LANDLORD)

                                      AND

                            MAXYGEN, INC. (TENANT)

                                SEAPORT CENTRE

                           Redwood City, California


                               TABLE OF CONTENTS



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ARTICLE ONE BASIC LEASE PROVISIONS.....................................................................    1

     1.01   BASIC LEASE PROVISIONS.....................................................................    1
     1.02   ENUMERATION OF EXHIBITS & RIDER(S).........................................................    3
     1.03   DEFINITIONS................................................................................    4

ARTICLE TWO PREMISES, TERM, FAILURE TO GIVE POSSESSION, COMMON AREAS AND PARKING.......................   11

     2.01   LEASE OF PREMISES..........................................................................   11
     2.02   TERM.......................................................................................   11
     2.03   FAILURE TO GIVE POSSESSION.................................................................   11
     2.04   AREA OF PREMISES...........................................................................   11
     2.05   CONDITION OF PREMISES......................................................................   11
     2.06   COMMON AREAS & PARKING.....................................................................   11

ARTICLE THREE RENT.....................................................................................   12

ARTICLE FOUR OPERATING EXPENSES, RENT ADJUSTMENTS AND PAYMENTS.........................................   13

     4.01   TENANT'S SHARE OF OPERATING EXPENSES.......................................................   13
     4.02   RENT ADJUSTMENTS...........................................................................   14
     4.03   STATEMENT OF LANDLORD......................................................................   14
     4.04   BOOKS AND RECORDS..........................................................................   15
     4.05   TENANT OR LEASE SPECIFIC TAXES.............................................................   16

ARTICLE FIVE SECURITY DEPOSIT..........................................................................   16

ARTICLE SIX UTILITIES & SERVICES.......................................................................   17

     6.01   LANDLORD'S GENERAL SERVICES................................................................   17
     6.02   TENANT TO OBTAIN & PAY DIRECTLY............................................................   18
     6.03   TELEPHONE SERVICES.........................................................................   18
     6.04   FAILURE OR INTERRUPTION OF UTILITY OR SERVICE..............................................   19
     6.05   CHOICE OF SERVICE PROVIDER.................................................................   20
     6.06   SIGNAGE....................................................................................   20


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                               TABLE OF CONTENTS



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ARTICLE SEVEN POSSESSION, USE AND CONDITION OF PREMISES.................................................  20

     7.01   POSSESSION AND USE OF PREMISES..............................................................  20
     7.02   HAZARDOUS MATERIAL..........................................................................  21
     7.03   LANDLORD ACCESS TO PREMISES; APPROVALS......................................................  29
     7.04   QUIET ENJOYMENT.............................................................................  30

ARTICLE EIGHT MAINTENANCE...............................................................................  30

     8.01   LANDLORD'S MAINTENANCE......................................................................  30
     8.02   TENANT'S MAINTENANCE........................................................................  31

ARTICLE NINE ALTERATIONS AND IMPROVEMENTS...............................................................  31

     9.01   TENANT ALTERATIONS..........................................................................  31
     9.02   LIENS.......................................................................................  33

ARTICLE TEN ASSIGNMENT AND SUBLETTING...................................................................  33

     10.01  ASSIGNMENT AND SUBLETTING...................................................................  33
     10.02  [INTENTIONALLY DELETED].....................................................................  35
     10.03  EXCESS RENT.................................................................................  35
     10.04  TENANT LIABILITY............................................................................  35
     10.05  ASSUMPTION AND ATTORNMENT...................................................................  36
     10.06  TRANSFER TO TENANT AFFILIATE................................................................  36

ARTICLE ELEVEN DEFAULT AND REMEDIES.....................................................................  36

     11.01  EVENTS OF DEFAULT...........................................................................  36
     11.02  LANDLORD'S REMEDIES.........................................................................  37
     11.03  ATTORNEY'S FEES.............................................................................  40
     11.04  BANKRUPTCY..................................................................................  40
     11.05  LANDLORD'S DEFAULT..........................................................................  41

ARTICLE TWELVE SURRENDER OF PREMISES....................................................................  42

     12.01  IN GENERAL..................................................................................  42
     12.02  LANDLORD'S RIGHTS...........................................................................  43

ARTICLE THIRTEEN HOLDING OVER...........................................................................  43


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                               TABLE OF CONTENTS



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ARTICLE FOURTEEN DAMAGE BY FIRE OR OTHER CASUALTY......................................................................        43

     14.01     SUBSTANTIAL UNTENANTABILITY.............................................................................        43
     14.02     INSUBSTANTIAL UNTENANTABILITY...........................................................................        45
     14.03     RENT ABATEMENT..........................................................................................        45
     14.04     WAIVER OF STATUTORY REMEDIES............................................................................        45

ARTICLE FIFTEEN EMINENT DOMAIN.........................................................................................        45

     15.01     TAKING OF WHOLE OR SUBSTANTIAL PART.....................................................................        45
     15.02     TAKING OF PART..........................................................................................        46
     15.03     COMPENSATION............................................................................................        46

ARTICLE SIXTEEN INSURANCE..............................................................................................        47

     16.01     TENANT'S INSURANCE......................................................................................        47
     16.02     FORM OF POLICIES........................................................................................        47
     16.03     LANDLORD'S INSURANCE....................................................................................        48
     16.04     WAIVER OF SUBROGATION...................................................................................        48
     16.05     NOTICE OF CASUALTY......................................................................................        49

ARTICLE SEVENTEEN WAIVER OF CLAIMS AND INDEMNITY.......................................................................        50

     17.01     WAIVER OF CLAIMS........................................................................................        50
     17.02     INDEMNITY BY TENANT.....................................................................................        50

ARTICLE EIGHTEEN RULES AND REGULATIONS.................................................................................        51

     18.01     RULES...................................................................................................        51
     18.02     ENFORCEMENT.............................................................................................        51

ARTICLE NINETEEN LANDLORD'S RESERVED RIGHTS............................................................................        51


ARTICLE TWENTY ESTOPPEL CERTIFICATE....................................................................................        52

     20.01     IN GENERAL..............................................................................................        52
     20.02     ENFORCEMENT.............................................................................................        53

ARTICLE TWENTY-ONE RELOCATION OF TENANT................................................................................        53


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                              TABLE OF CONTENTS


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ARTICLE TWENTY-TWO REAL ESTATE BROKERS.....................................................................................      53


ARTICLE TWENTY-THREE MORTGAGEE PROTECTION..................................................................................      53

     23.01     SUBORDINATION AND ATTORNMENT................................................................................      53
     23.02     MORTGAGEE PROTECTION........................................................................................      54

ARTICLE TWENTY-FOUR NOTICES................................................................................................      55


ARTICLE TWENTY-FIVE EXERCISE FACILITY......................................................................................      56


ARTICLE TWENTY-SIX MISCELLANEOUS...........................................................................................      56

     26.01     LATE CHARGES................................................................................................      56
     26.02     NO JURY TRIAL; VENUE; JURISDICTION..........................................................................      57
     26.03     DEFAULT UNDER OTHER LEASE...................................................................................      58
     26.04     OPTION......................................................................................................      58
     26.05     TENANT AUTHORITY............................................................................................      58
     26.06     ENTIRE AGREEMENT............................................................................................      58
     26.07     MODIFICATION OF LEASE FOR BENEFIT OF MORTGAGEE..............................................................      58
     26.08     EXCULPATION.................................................................................................      58
     26.09     ACCORD AND SATISFACTION.....................................................................................      59
     26.10     LANDLORD'S OBLIGATIONS ON SALE OF BUILDING..................................................................      59
     26.11     BINDING EFFECT..............................................................................................      59
     26.12     CAPTIONS....................................................................................................      59
     26.13     TIME; APPLICABLE LAW, CONSTRUCTION..........................................................................      59
     26.14     ABANDONMENT.................................................................................................      60
     26.15     LANDLORD'S RIGHT TO PERFORM TENANT'S DUTIES.................................................................      60
     26.16     SECURITY SYSTEM.............................................................................................      60
     26.17     NO LIGHT, AIR OR VIEW EASEMENTS.............................................................................      60
     26.18     RECORDATION.................................................................................................      61
     26.19     SURVIVAL....................................................................................................      61
     26.20     RIDERS......................................................................................................      61


                                      iv


                                     LEASE

                                  ARTICLE ONE
                            BASIC LEASE PROVISIONS

1.01 BASIC LEASE PROVISIONS

     In the event of any conflict between these Basic Lease Provisions and any
other Lease provision, such other Lease provision shall control.

(1)  BUILDING AND ADDRESS:

     515 Galveston Drive
     Redwood City, California 94063

     Building Number 7, located in Phase I ("Tenants Phase") of Seaport Centre

(2)  LANDLORD AND ADDRESS:

     Metropolitan Life Insurance Company, a New York corporation

     Notices to Landlord shall be addressed:

     Metropolitan Life Insurance Company
     c/o Seaport Centre Manager
     701 Chesapeake Drive
     Redwood City, CA 94063

     with copies to the following:

     Metropolitan Life Insurance Company
     101 Lincoln Centre Drive, Suite 600
     Foster City, CA 94404
     Attention: Assistant Vice President

(3)  TENANT AND CURRENT ADDRESS:

     (a)  Name: Maxygen, Inc.

     (b)  State of incorporation: Delaware


            Notices to Tenant shall be addressed:

                Prior to the Commencement Date:

                Maxygen, Inc.
                3410 Central Expressway
                Santa Clara, CA 95051
                Attention: Russell Howard, CEO

                On & After the Commencement Date:

                Maxygen, Inc.
                515 Galveston Drive
                Redwood City, California 94063

     (4)    DATE OF LEASE:  as of October 21, 1998

     (5)    LEASE TERM:  seventy-three months

     (6)    PROJECTED COMMENCEMENT DATE:  December 1, 1998, subject to Rider 2

     (7)    PROJECTED EXPIRATION DATE: seventy-three months after the
            Commencement Date

     (8)    MONTHLY BASE RENT (initial monthly installment due upon Tenant's
            execution):



            Period from/to               Monthly                Monthly Rate/SF of Rentable Area
            ------------------------     -------------------    -------------------------------------
            Month 01                     zero (allowing 1 month free of Monthly Base Rent for construction)
                                                          
            Month 02 - Month 13                $74,798.40                      $2.40
            Month 14 - Month 25                $76,980.02                      $2.47
            Month 26 - Month 37                $79,473.30                      $2.55
            Month 38 - Month 49                $81,654.92                      $2.62
            Month 50 - Month 61                $84,148.20                      $2.70
            Month 62 - Month 73                $86,641.48                      $2.78


     (9)    RENT ADJUSTMENT DEPOSIT (initial monthly rate, until further
            notice): $13,713.00 (initial monthly installment due upon Tenants
            execution)

     (10)   RENTABLE AREA OF THE PREMISES:    31,166 square feet

                                       2


     (11)   RENTABLE AREA OF THE BUILDING     31,166 square feet

     (12)   RENTABLE AREA OF THE PHASE:       235,620 square feet

     (13)   RENTABLE AREA OF THE PROJECT:     537,444 square feet

     (14)   SECURITY DEPOSIT: Three Hundred and Fifty Thousand ($350,000.00) due
            upon Tenant's execution, subject to the terms of Article Five

     (15)   SUITE NUMBER &/OR ADDRESS OF PREMISES:

            515 Galveston Drive
            Redwood City, California 94063

     (16)   TENANTS SHARE:

            Tenants Building Share:        100.00%
            Tenant's Phase Share:           10.33%
            Tenants Project Share:           5.80%

     (17)   TENANTS USE OF PREMISES: General office use, research and
            development, and warehousing.

     (18)   PARKING SPACES:       one hundred three (103)

     (19)   BROKERS:

            Landlord's Broker:    Cornish & Carey

            Tenant's Broker:      CB Richard Ellis

1.02 ENUMERATION OF EXHIBITS & RIDER(S)

The Exhibits and Rider(s) set forth below and attached to this Lease are
incorporated in this Lease by this reference:

     EXHIBIT A  Plan of Premises
     ---------
     EXHIBIT B  Workletter Agreement (intentionally omitted)
     ---------
     EXHIBIT C  Site Plan of Project
     ---------
     EXHIBIT D  Permitted Hazardous Materials
     ---------
     EXHIBIT E  Hazardous Materials Plans
     ---------

     RIDER 1  Commencement Date Agreement
     -------
     RIDER 2  Additional Provisions
     -------

                                       3


1.03 DEFINITIONS

     For purposes hereof, the following terms shall have the following meanings:

ADJUSTMENT YEAR:  The applicable calendar year or any portion thereof after the
Commencement Date of this Lease for which a Rent Adjustment computation is being
made.

AFFILIATE:  Any Person (as defined below) which is currently owned or controlled
by, owns or controls, or is under common ownership or control with Tenant.  For
purposes of this definition, the word "control," as used above means, with
respect to a Person that is a corporation, the right to exercise, directly or
indirectly, more than sixty percent (60%) of the voting rights attributable to
the shares of the controlled corporation and, with respect to a Person that is
not a corporation, the possession, directly or indirectly, of the power at all
times to direct or cause the direction of the management and policies of the
controlled Person.  The word Person means an individual, partnership, trust,
corporation, firm or other entity.

BUILDING:  The building in which the Premises is located, at the address and
Building number specified in Section 1.01(1).

BUILDING OPERATING EXPENSES:  Those Operating Expenses described in Section
4.01.

COMMENCEMENT DATE: The date specified in Section 1.01(6) as the Projected
Commencement Date, unless changed by operation of Article Two or Rider 2.

COMMON AREAS: All areas of the Project made available by Landlord from time to
time for the general common use or benefit of the tenants of the Building or
Project, and their employees and invitees, or the public, as such areas
currently exist and as they may be changed from time to time.

DECORATION: Tenant Alterations which do not require a building permit and which
do not affect the facade or roof of the Building, or involve any of the
structural elements of the Building, or involve any of the Building's systems,
including its electrical, mechanical, plumbing, security, heating, ventilating,
air conditioning, communication, and fire and life safety systems.

DEFAULT RATE: Two (2) percentage points above the rate then most recently
announced by Bank of America N.T.& S.A. at its San Francisco main office as its
corporate base lending rate, from time to time announced, but in no event higher
than the maximum rate permitted by Law.

ENVIRONMENTAL LAWS: All Laws governing the use, storage, disposal or generation
of any Hazardous Material or pertaining to environmental conditions on,

                                       4


under or about the Premises or any part of the Project, including the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended (42 U.S.C. Section 9601 et seq.), and the Resource Conservation and
                                -- ---
Recovery Act of 1976, as amended (42 U.S.C. Section 6901 et seq.)
                                                         -- ---

EXPIRATION DATE: The date specified in Section 1.01(7) unless changed by
operation of Article Two.

FORCE MAJEURE: Any accident, casualty, act of God, war or civil commotion,
strike or labor troubles, or any cause whatsoever beyond the reasonable control
of Landlord, including water shortages, energy shortages or governmental
preemption in connection with an act of God, a national emergency, or by reason
of Law, or by reason of the conditions of supply and demand which have been or
are affected by act of God, war or other emergency.

HAZARDOUS MATERIAL: Such substances, material and wastes which are or become
regulated under any Environmental Law; or which are classified as hazardous or
toxic or medical waste or biohazardous waste under any Environmental Law; and
explosives, firearms and ammunition, flammable material, radioactive material,
asbestos, polychlorinated biphenyls and petroleum and its byproducts.

INDEMNITEES: Collectively, Landlord, any Mortgagee or ground lessor of the
Property, the property manager and the leasing manager for the Property and
their respective directors, officers, agents and employees.

LAND: The parcel(s) of real estate on which the Building and Project are
located.

LANDLORD WORK: The construction or installation of improvements to be furnished
by Landlord, if any, specifically described in Rider 2 attached hereto.

LAWS OR LAW: All laws, ordinances, rules, regulations, other requirements,
orders, rulings or decisions adopted or made by any governmental body, agency,
department or judicial authority having jurisdiction over the Property, the
Premises or Tenants activities at the Premises and any covenants, conditions or
restrictions of record which affect the Property.

LEASE: This instrument and all exhibits and riders attached hereto, as may be
amended from time to time.

LEASE YEAR: The twelve month period beginning on the first day of the first
month following the Commencement Date (unless the Commencement Date is the first
day of a calendar month in which case beginning on the Commencement Date), and
each subsequent twelve month, or shorter, period until the Expiration Date.

MONTHLY BASE RENT: The monthly rent specified in Section 1.01(8).

                                       5


MORTGAGEE: Any holder of a mortgage, deed of trust or other security instrument
encumbering the Property.

NATIONAL HOLIDAYS: New Year's Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day and other holidays recognized by the Landlord
and the janitorial and other unions servicing the Building in accordance with
their contracts.

OPERATING EXPENSES: All Taxes, costs, expenses and disbursements of every kind
and nature which Landlord shall pay or become obligated to pay in connection
with the ownership, management, operation, maintenance, replacement and repair
of the Property (including the amortized portion of any capital expenditure or
improvement, together with interest thereon, expenses of changing utility
service providers, and any dues, assessments and other expenses pursuant to any
covenants, conditions and restrictions, or any reciprocal easements, or any
owner's association now or hereafter affecting the Project). Operating Expenses
shall be allocated among the categories of Project Operating Expenses, Building
Operating Expenses or Phase Operating Expenses as provided in Article Four. If
any Operating Expense, though paid in one year, relates to more than one
calendar year, at the option of Landlord such expense may be proportionately
allocated among such related calendar years. Operating Expenses shall include
the following, by way of illustration only and not limitation: (1) all Taxes;
(2) all insurance premiums and other costs (including deductibles), including
the cost of rental insurance; (3) all license, permit and inspection fees; (4)
all costs of utilities, fuels and related services, including water, sewer,
light, telephone, power and steam connection, service and related charges; (5)
all costs to repair, maintain and operate heating, ventilating and air
conditioning systems, including preventive maintenance; (6) all janitorial,
landscaping and security services; (7) all wages, salaries, payroll taxes,
fringe benefits and other labor costs, including the cost of workers'
compensation and disability insurance; (8) all costs of operation, maintenance
and repair of all parking facilities and other common areas; (9) all supplies,
materials, equipment and tools; (10) dues, assessments and other expenses
pursuant to any covenants, conditions and restrictions, or any reciprocal
easements, or any owner's association now or hereafter affecting the Project;
(11) modifications to the Building or the Project occasioned by Laws now or
hereafter in effect; (12) the total charges of any independent contractors
employed in the care, operation, maintenance, repair, leasing and cleaning of
the Project, including landscaping, roof maintenance, and repair, maintenance
and monitoring of life-safety systems, plumbing systems, electrical wiring and
Project signage; (13) the cost of accounting services necessary to compute the
rents and charges payable by tenants at the Project; (14) exterior window and
exterior wall cleaning and painting; (15) managerial and administrative
expenses; (16) all costs in connection with the exercise facility at the
Project; (17) all costs and expenses related to Landlord's retention of
consultants in connection with the routine review, inspection, testing,
monitoring, analysis and control of Hazardous Materials, and retention of
consultants in connection with the clean-up of

                                       6


Hazardous Materials (to the extent not recoverable from a particular tenant of
the Project), and all costs and expenses related to the implementation of
recommendations made by such consultants concerning the use, generation,
storage, manufacture, production, storage, release, discharge, disposal or
clean-up of Hazardous Materials on, under or about the Premises or the Project
(to the extent not recoverable from a particular tenant of the Project); but
Operating Costs shall not include the costs and expenses, including those of
retention of consultants and implementation of such consultant's
recommendations, to the extent incurred specifically to clean-up or remove
Hazardous Materials present on, under or about the Premises or the Project prior
to delivery to Tenant of possession of the Premises; (18) all capital
improvements made for the purpose of reducing or controlling other Operating
Expenses, and all other capital expenditures, but only as amortized over the
useful life of the applicable item(s), together with interest thereon; (19) all
property management costs and fees, including all costs in connection with the
Project property management office; and (20) all fees or other charges incurred
in conjunction with voluntary or involuntary membership in any energy
conservation, air quality, environmental, traffic management or similar
organizations. Operating Expenses shall not include: (a) costs of alterations of
space to be occupied by new or existing tenants of the Project; (b) depreciation
charges; (c) interest and principal payments on loans (except for loans for
capital improvements which Landlord is allowed to include in Operating Expenses
as provided above); (d) ground rental payments; (e) real estate brokerage and
leasing commissions; (f) advertising and marketing expenses; (g) costs of
Landlord reimbursed by insurance proceeds; (h) expenses incurred in negotiating
leases of other tenants in the Project or enforcing lease obligations of other
tenants in the Project; and (i) Landlord's or Landlord's property managers
corporate general overhead or corporate general administrative expenses.

PHASE: Phase means any individual Phase of the Project, as more particularly
described in the definition of Project.

PHASE OPERATING EXPENSES: Those Operating Expenses described in Section 4.01.

PREMISES: The space located in the Building at the Suite Number listed in
Section 1.01(15) and depicted on Exhibit A attached hereto.
                                 ---------

PROJECT or PROPERTY: As of the date hereof, the Project is known as Seaport
Centre and consists of those buildings (including the Building) whose general
location is shown on the Site Plan of the Project attached as Exhibit C, located
                                                              ---------
in Redwood City, California, associated vehicular and parking areas, landscaping
and improvements, together with the Land, any associated interests in real
property, and the personal property, fixtures, machinery, equipment, systems and
apparatus located in or used in conjunction with any of the foregoing. The
Project may also be referred to as the Property. As of the date hereof, the
Project is divided into Phase I and Phase II, which are generally designated on
Exhibit C, each of which may individually be referred to as a
- ---------

                                       7


Phase. Landlord reserves the right from time to time to add or remove buildings,
areas and improvements to or from a Phase or the Project, or to add or remove a
Phase to or from the Project. In the event of any such addition or removal which
affects Rentable Area of the Project or a Phase, Landlord shall make a
corresponding recalculation and adjustment of any affected Rentable Area and
Tenant's Share.

PROJECT OPERATING EXPENSES:  Those Operating Expenses described in Section 4.01.

REAL PROPERTY:  The Property excluding any personal property.

RENT:  Collectively, Monthly Base Rent, Rent Adjustments and Rent Adjustment
Deposits, and all other charges, payments, late fees or other amounts required
to be paid by Tenant under this Lease.

RENT ADJUSTMENT:  Any amounts owed by Tenant for payment of Operating Expenses.
The Rent Adjustments shall be determined and paid as provided in Article Four.

RENT ADJUSTMENT DEPOSIT:  An amount equal to Landlord's estimate of the Rent
Adjustment attributable to each month of the applicable Adjustment Year.  On or
before the Commencement Date and the beginning of each subsequent Adjustment
Year or with Landlord's Statement (defined in Article Four), Landlord may
estimate and notify Tenant in writing of its estimate of Operating Expenses,
including Project Operating Expenses, Building Operating Expenses and Phase
Operating Expenses, and Tenant's Share of each, for the applicable Adjustment
Year.  The Rent Adjustment Deposit applicable for the calendar year in which the
Commencement Date occurs shall be the amount, if any, specified in Section
1.01(9).  Nothing contained herein shall be construed to limit the right of
Landlord from time to time during any calendar year to revise its estimates of
Operating Expenses and to notify Tenant in writing thereof and of revision by
prospective adjustments in Tenants Rent Adjustment Deposit payable over the
remainder of such year.  The last estimate by Landlord shall remain in effect as
the applicable Rent Adjustment Deposit unless and until Landlord notifies Tenant
in writing of a change.

RENTABLE AREA OF THE BUILDING:  The amount of square footage set forth in
Section 1.01(11)

RENTABLE AREA OF THE PHASE:  The amount of square footage set forth in Section
1.01(12)

RENTABLE AREA OF THE PREMISES:  The amount of square footage set forth in
Section 1.01(10).

                                       8


RENTABLE AREA OF THE PROJECT:  The amount of square footage set forth in Section
1.01(13), which represents the sum of the rentable area of all space intended
for occupancy in the Project.

SECURITY DEPOSIT:  The funds specified in Section 1.01(14), if any, deposited by
Tenant with Landlord as security for Tenants performance of its obligations
under this Lease.

SUBSTANTIALLY COMPLETE:  The completion of the Landlord Work or Tenant Work, as
the case may be, except for minor insubstantial details of construction,
decoration or mechanical adjustments which remain to be done.

TAXES:  All federal, state and local governmental taxes, assessments (including
assessment bonds) and charges of every kind or nature, whether general, special,
ordinary or extraordinary, which Landlord shall pay or become obligated to pay
because of or in connection with the ownership, leasing, management, control or
operation of the Property or any of its components (including any personal
property used in connection therewith), which may also include any rental or
similar taxes levied in lieu of or in addition to general real and/or personal
property taxes.  For purposes hereof, Taxes for any year shall be Taxes which
are assessed for any period of such year, whether or not such Taxes are billed
and payable in a subsequent calendar year.  There shall be included in Taxes for
any year the amount of all fees, costs and expenses (including reasonable
attorneys' fees) paid by Landlord during such year in seeking or obtaining any
refund or reduction of Taxes.  Taxes for any year shall be reduced by the net
amount of any tax refund received by Landlord attributable to such year.  If a
special assessment payable in installments is levied against any part of the
Property, Taxes for any year shall include only the installment of such
assessment and any interest payable or paid during such year.  Taxes shall not
include any federal or state inheritance, general income, gift or estate taxes,
except that if a change occurs in the method of taxation resulting in whole or
in part in the substitution of any such taxes, or any other assessment, for any
Taxes as above defined, such substituted taxes or assessments shall be included
in the Taxes.

TENANT ADDITIONS:  Collectively, Landlord Work, Tenant Work and Tenant
Alterations.

TENANT ALTERATIONS:  Any alterations, improvements, additions, installations or
construction in or to the Premises or any Real Property systems serving the
Premises done or caused to be done by Tenant after the date hereof, whether
prior to or after the Commencement Date (including Tenant Work, but excluding
Landlord Work).

TENANT DELAY:  Any event or occurrence which delays the completion of the
Landlord Work which is caused by or is described as follows:

                                       9


          (i)    special work, changes, alterations or additions requested or
made by Tenant in the design or finish in any part of the Premises after
approval of the plans and specifications (as described in the Rider 2);

          (ii)   Tenant's delay in submitting plans, supplying information,
approving plans, specifications or estimates, giving authorizations or
otherwise;

          (iii)  failure to approve and pay for such work as Landlord undertakes
to complete at Tenant's expense;

          (iv)   the performance or completion by Tenant or any person engaged
by Tenant of any work in or about the Premises; or

          (v)     failure to perform or comply with any obligation or condition
binding upon Tenant pursuant to Rider 2, including the failure to approve and
pay for such Landlord Work or other items if and to the extent Rider 2 provides
they are to be approved or paid by Tenant.

TENANT WORK:  All work installed or furnished to the Premises by Tenant in
connection with Tenant's initial occupancy pursuant to Rider 2.

TENANT'S BUILDING SHARE: The share as specified in Section 1.01(16) and Section
4.01.

TENANT'S PHASE: The Phase in which the Premises is located, as indicated in
Section 1.01(1).

TENANT'S PHASE SHARE: The share as specified in Section 1.01(16) and Section
4.01.

TENANT'S PROJECT SHARE: The share as specified in Section 1.01(16) and Section
4.01.

TENANT'S SHARE: Shall mean collectively, Tenant's respective shares of the
respective categories of Operating Expenses, as provided in Section 1.01(16) and
Section 4.01.

TERM: The term of this Lease commencing on the Commencement Date and expiring on
the Expiration Date.

TERMINATION DATE: The Expiration Date or such earlier date as this Lease
terminates or Tenant's right to possession of the Premises terminates.

WORKLETTER: (intentionally omitted)

                                       10


                                  ARTICLE TWO
                  PREMISES, TERM, FAILURE TO GIVE POSSESSION,
                           COMMON AREAS AND PARKING

2.01 LEASE OF PREMISES

     Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the
Premises for the Term and upon the terms, covenants and conditions provided in
this Lease.

2.02 TERM

     The Commencement Date shall be the date determined pursuant to Rider 2.

2.03 FAILURE TO GIVE POSSESSION

     (intentionally omitted; see Rider 2)

2.04 AREA OF PREMISES

     Landlord and Tenant agree that for all purposes of this Lease the Rentable
Area of the Premises, the Rentable Area of the Building, the Rentable Area of
the Phase and the Rentable Area of the Project as set forth in Article One are
controlling, and are not subject to revision after the date of this Lease,
except as otherwise provided herein.

2.05 CONDITION OF PREMISES

     (intentionally omitted; see Rider 2)

2.06 COMMON AREAS & PARKING

     (a) Right to Use Common Areas. Tenant shall have the non-exclusive right,
         -------------------------
in common with others, to the use of any common entrances, ramps, drives and
similar access and serviceways and other Common Areas in the Project. The rights
of Tenant hereunder in and to the Common Areas shall at all times be subject to
the rights of Landlord and other tenants and owners in the Project who use the
same in common with Tenant, and it shall be the duty of Tenant to keep all the
Common Areas free and clear of any obstructions created or permitted by Tenant
or resulting from Tenant's operations. Tenant shall not use the Common Areas or
common facilities of the Building or the Project, including the Building's
electrical room, parking lot or trash enclosures, for storage purposes. Nothing
herein shall affect the right of Landlord at any time to remove any persons not
authorized to use the Common Areas or common facilities from such areas or
facilities or to prevent their use by unauthorized persons.

                                       11


     (b) Changes in Common Areas.  Landlord reserves the right, at any time and
         -----------------------
from time to time to (i) make alterations in or additions to the Common Areas or
common facilities of the Project, including constructing new buildings or
changing the location, size, shape or number of the driveways, entrances,
parking spaces, parking areas, loading and unloading areas, landscape areas and
walkways, (ii) designate property to be included in or eliminate property from
the Common Areas or common facilities of the Project, (iii) close temporarily
any of the Common Areas or common facilities of the Project for maintenance
purposes, and (4) use the Common Areas and common facilities of the Project
while engaged in making alterations in or additions and repairs to the Project;
provided, however, that reasonable access to the Premises and parking at or near
the Project remains available.

     (c) Parking. During the Term, Tenant shall have the right to use the number
         -------
of Parking Spaces specified in Section 1.01(18) for parking on an unassigned
basis on that portion of the Project designated by Landlord from time to time
for parking. Tenant acknowledges and agrees that the parking spaces in the
Project's parking facility may include a mixture of spaces for compact vehicles
as well as full-size passenger automobiles, and that Tenant shall not use
parking spaces for vehicles larger than the striped size of the parking spaces.
Tenant shall not park any vehicles at the Project overnight. Tenant shall comply
with any and all parking rules and regulations if and as from time to time
established by Landlord. Tenant shall not allow any vehicles using Tenant's
parking privileges to be parked, loaded or unloaded except in accordance with
this Section, including in the areas and in the manner designated by Landlord
for such activities. If any vehicle is using the parking or loading areas
contrary to any provision of this Section, Landlord shall have the right, in
addition to all other rights and remedies of Landlord under this Lease, to
remove or tow away the vehicle without prior notice to Tenant, and the cost
thereof shall be paid to Landlord within ten (10) days after notice from
Landlord to Tenant.

                                 ARTICLE THREE
                                     RENT

     Tenant agrees to pay to Landlord at the first office specified in Section
1.01(2), or to such other persons, or at such other places designated by
Landlord, without any prior demand therefor in immediately available funds and
without any deduction or offset whatsoever, Rent, including Monthly Base Rent
and Rent Adjustments in accordance with Article Four, during the Term.  Monthly
Base Rent shall be paid monthly in advance on the first day of each month of the
Term, except that the first installment of Monthly Base Rent shall be paid by
Tenant to Landlord concurrently with execution of this Lease.  Monthly Base Rent
shall be prorated for partial months within the Term.  Unpaid Rent shall bear
interest at the Default Rate from the date due until paid, Tenant's covenant to
pay Rent shall be independent of every other covenant in this Lease.

                                       12


                                 ARTICLE FOUR
               OPERATING EXPENSES, RENT ADJUSTMENTS AND PAYMENTS

4.01 TENANT'S SHARE OF OPERATING EXPENSES

     Tenant shall pay Tenant's Share of Operating Expenses in the respective
shares of the respective categories of Operating Expenses as set forth below.

     (a) Tenant's Project Share of Project Operating Expenses, which is the
percentage obtained by dividing the rentable square footage of the Premises for
the building(s) in which the Premises is located by the rentable square footage
of the Project and as of the date hereof equals the percentage set forth in
Section 1.01(16);

     (b) Tenant's Building Share of Building Operating Expenses, which is the
percentage obtained by dividing the rentable square footage of the Premises
respectively for each building in which the Premises is located by the total
rentable square footage of such building and as of the date hereof equals the
percentage set forth in Section 1.01(16);

     (c) Tenant's Phase Share of Phase Operating Expenses, which is the
percentage obtained by dividing the aggregate rentable square footage of the
Premises located in Tenants Phase by the total rentable square footage of
Tenant's Phase and as of the date hereof equals the percentage set forth in
Section 1.01(16);

     (d) Project Operating Expenses shall mean all Operating Expenses that are
not included as Phase Operating Expenses (defined below) and that are not either
Building Operating Expenses or operating expenses directly and separately
identifiable to the operation, maintenance or repair of any other building
located in the Project, but Project Operating Expenses includes operating
expenses allocable to any areas of the Building or any other building during
such time as such areas are made available by Landlord for the general common
use or benefit of all tenants of the Project, and their employees and invitees,
or the public, as such areas currently exist and as they may be changed from
time to time;

     (e) Building Operating Expenses shall mean Operating Expenses that are
directly and separately identifiable to each building and only such building(s)
in which the Premises or part thereof is located.  Building(s) in which the
Premises or any part thereof are not located shall not be included in
determining Building Operating Expenses;

     (f) Phase Operating Expenses shall mean Operating Expenses that Landlord
may allocate to a Phase as directly and separately identifiable to all buildings
located in the Phase (including but not limited to the Building) and may include
Project Operating Expenses that are separately identifiable to a Phase;

                                       13


     (g) Landlord shall have the right to allocate a particular item or portion
of Operating Expenses as any one of Project Operating Expenses, Building
Operating Expenses or Phase Operating Expenses; however, in no event shall any
portion of Building Operating Expenses, Project Operating Expenses or Phase
Operating Expenses be assessed or counted against Tenant more than once; and.

     (h) Notwithstanding anything to the contrary contained in this Section
4.01, as to each specific category of Operating Expense which one or more
tenants of the Building either pays directly to third parties or specifically
reimburses to Landlord (for example, separately contracted janitorial services
or property taxes directly reimbursed to Landlord), then, on a category by
category basis, the amount of Operating Expenses for the affected period shall
be adjusted as follows: (1) all such tenant payments with respect to such
category of expense and all of Landlord's costs reimbursed thereby shall be
excluded from Operating Expenses and Tenant's Building Share, Tenant's Phase
Share or Tenant's Project Share, as the case may be, for such category of
Operating Expense shall be adjusted by excluding the square footage of all such
tenants, and (2) if Tenant pays or directly reimburses Landlord for such
category of Operating Expense, such category of Operating Expense shall be
excluded from the determination of Operating Expenses for the purposes of this
Lease.

4.02 RENT ADJUSTMENTS

     Tenant shall pay to Landlord Rent Adjustments with respect to each
Adjustment Year as follows:

     (a) The Rent Adjustment Deposit representing Tenant's Share of Landlord's
estimate of Operating Expenses, as described in Section 4.01, for the applicable
Adjustment Year (or portion thereof) monthly during the Term with the payment of
Monthly Base Rent, except the first installment which shall be paid by Tenant to
Landlord concurrently with execution of this Lease; and

     (b) Any Rent Adjustments due in excess of the Rent Adjustment Deposits in
accordance with Section 4.02.

4.03 STATEMENT OF LANDLORD

     Within one hundred twenty (120) days after the end of each calendar year or
as soon thereafter as reasonably possible, Landlord will furnish Tenant a
statement ("Landlord's Statement") showing the following:

     (a) Operating Expenses for the last Adjustment Year showing in reasonable
detail the actual Operating Expenses categorized among Project Operating
Expenses, Building Operating Expenses and Phase Operating Expenses for such
period and Tenant's Share of each as described in Section 4.01 above;

                                       14


     (b) The amount of Rent Adjustments due Landlord for the last Adjustment
Year, less credit for Rent Adjustment Deposits paid, if any; and

     (c) Any change in the Rent Adjustment Deposit due monthly in the current
Adjustment Year, including the amount or revised amount due for months preceding
any such change pursuant to Landlord's Statement.

     Tenant shall pay to Landlord within thirty (30) days after receipt of such
statement any amounts for Rent Adjustments then due in accordance with
Landlord's Statement.  Any amounts due from Landlord to Tenant pursuant to this
Section shall be credited to the Rent Adjustment Deposit next coming due, or
refunded to Tenant if the Term has already expired provided Tenant is not in
default hereunder.  No interest or penalties shall accrue on any amounts which
Landlord is obligated to credit or refund to Tenant by reason of this Section
4.02.  Landlord's failure to deliver Landlord's Statement or to compute the
amount of the Rent Adjustments shall not constitute a waiver by Landlord of its
right to deliver such items nor constitute a waiver or release of Tenants
obligations to pay such amounts.  The Rent Adjustment Deposit shall be credited
against Rent Adjustments due for the applicable Adjustment Year.  During the
last complete calendar year or during any partial calendar year in which the
Lease terminates, Landlord may include in the Rent Adjustment Deposit its
estimate of Rent Adjustments which may not be finally determined until after the
termination of this Lease.  Tenant's obligation to pay Rent Adjustments survives
the expiration or termination of the Lease.  Notwithstanding the foregoing, in
no event shall the sum of Monthly Base Rent and the Rent Adjustments be less
than the Monthly Base Rent payable.

4.04 BOOKS AND RECORDS

     Landlord shall maintain books and records showing Operating Expenses and
Taxes in accordance with sound accounting and management practices, consistently
applied. The Tenant or its representative shall have the right, for a period of
ninety (90) days following the date upon which Landlord's Statement is delivered
to Tenant, to examine the Landlord's books and records with respect to the items
in the foregoing statement of Operating Expenses and Taxes during normal
business hours, upon written notice, delivered at least three (3) business days
in advance. If Tenant does not object in writing to Landlord's Statement within
ninety (90) days of Tenant's receipt thereof, specifying the nature of the item
in dispute and the reasons therefor, then Landlord's Statement shall be
considered final and accepted by Tenant. Any amount due to the Landlord as shown
on Landlord's Statement, whether or not disputed by Tenant as provided herein
shall be paid by Tenant when due as provided above, without prejudice to any
such written exception.

                                       15


4.05 TENANT OR LEASE SPECIFIC TAXES

     In addition to Monthly Base Rent, Rent Adjustments, Rent Adjustment
Deposits and other charges to be paid by Tenant, Tenant shall pay to Landlord,
upon demand, any and all taxes payable by Landlord (other than federal or state
inheritance, general income, gift or estate taxes) whether or not now customary
or within the contemplation of the parties hereto: (a) upon, allocable to, or
measured by the Rent payable hereunder, including any gross receipts tax or
excise tax levied by any governmental or taxing body with respect to the receipt
of such rent; or (b) upon or with respect to the possession, leasing, operation,
management, maintenance, alteration, repair, use or occupancy by Tenant of the
Premises or any portion thereof, or (c) upon the measured value of Tenant's
personal property or trade fixtures located in the Premises or in any storeroom
or any other place in the Premises or the Property, or the areas used in
connection with the operation of the Property, it being the intention of
Landlord and Tenant that, to the extent possible, Tenant shall cause such taxes
on personal property or trade fixtures to be billed to and paid directly by
Tenant; (d) resulting from Landlord Work, Tenant Work or Tenant Alterations to
the Premises, whether title thereto is in Landlord or Tenant; or (e) upon this
transaction. Taxes paid by Tenant pursuant to this Section 4.05 shall not be
included in any computation of Taxes as part of Operating Expenses.

                                 ARTICLE FIVE
                               SECURITY DEPOSIT

     Tenant concurrently with the execution of this Lease shall pay to Landlord
in immediately available funds the Security Deposit. The Security Deposit may be
applied by Landlord to cure, in whole or part, any default of Tenant under this
Lease, and upon notice by Landlord of such application, Tenant shall replenish
the Security Deposit in full by paying to Landlord within ten (10) days of
demand the amount so applied. Landlord's application of the Security Deposit
shall not constitute a waiver of Tenant's default to the extent that the
Security Deposit does not fully compensate Landlord for all losses, damages,
costs and expenses incurred by Landlord in connection with such default and
shall not prejudice any other rights or remedies available to Landlord under
this Lease or by Law. Landlord shall not pay any interest on the Security
Deposit. Landlord shall not be required to keep the Security Deposit separate
from its general accounts. The Security Deposit shall not be deemed an advance
payment of Rent, nor a measure of damages for any default by Tenant under this
Lease, nor shall it be a bar or defense of any action which Landlord may at any
time commence against Tenant. In the absence of evidence satisfactory to
Landlord of an assignment of the right to receive the Security Deposit or the
remaining balance thereof, Landlord may return the Security Deposit to the
original Tenant, regardless of one or more assignments of this Lease. Upon the
transfer of Landlord's interest under this Lease, Landlord's obligation to
Tenant with respect to the Security Deposit shall terminate upon transfer to the
transferee of the Security Deposit, or any balance thereof and the assumption by
the transferee of

                                       16


Landlord's obligations with respect thereto. If Tenant shall fully and
faithfully comply with all the terms, provisions, covenants, and conditions of
this Lease, the Security Deposit, or any balance thereof, shall be returned to
Tenant within thirty (30) days after Landlord recovers possession of the
Premises. Tenant hereby waives any and all rights of Tenant under the provisions
of Section 1950.7 of the California Civil Code or other Law regarding security
deposits. Notwithstanding anything to the contrary contained in the foregoing,
the following provisions shall apply to the Security Deposit: At any time
following the last day of the twenty fourth (24th) month of the Term, landlord
shall, upon Tenant's request, return to Tenant the sum of $100,000 of the
Security Deposit ("First Return"), provided that both at the time Tenant
requests such First Return, and the time of such First Return (i) Tenant shall
not be in monetary default under the Lease, nor shall a state of facts exist
that would be a monetary default with the passage of time or the giving of
notice, and (ii) Tenant shall present evidence satisfactory to Landlord that
Tenant has cash or cash equivalents (i.e. certificates of deposits, U.S.
treasury bills or bonds), of at least $10,000,000.00. The First Return shall be
paid to Tenant by cash or check within thirty (30) notice by Tenant to Landlord
that Tenant has met requirement (ii) of the preceding sentence and provided
further that Tenant has in fact met the requirements described in (i) and (ii)
of the preceding sentence. At any time following the last day of the thirty
sixth (36/th/) month of the Term, landlord shall, upon Tenant's request, return
to Tenant the sum of $100,000 of the Security Deposit ("Second Return"),
provided that both at the time Tenant requests such Second Return, and the time
of such Second Return (i) Tenant shall not be in monetary default under the
Lease, nor shall a state of facts exist that would be a monetary default with
the passage of time or the giving of notice, and (ii) Tenant shall present
evidence satisfactory to Landlord that Tenant has cash or cash equivalents (i.e.
certificates of deposits, U.S. treasury bills or bonds), of at least
$10,000,000.00. The Second Return shall be paid to Tenant by cash or check
within thirty (30) notice by Tenant to Landlord that Tenant has met requirement
(ii) of the preceding sentence and provided further that Tenant has in fact met
the requirements described in (i) and (ii) of the preceding sentence. If anytime
following the last day of the twenty-fifth month of the Term, Tenant completes a
public or private offering of stock ("IPO") which actually raises a minimum of
$20,000,000 of cash received by Tenant, then Landlord shall return all portions
of the First Return and Second Return not then previously distributed to Tenant,
within thirty (30) days notice to Landlord of such IPO and presentation by
Tenant of evidence satisfactory to Landlord that the requirements of this
sentence with respect to the IPO have been met.

                                  ARTICLE SIX
                             UTILITIES & SERVICES

6.01 LANDLORD'S GENERAL SERVICES

     Landlord shall provide maintenance and services as provided in Article
Eight.

                                       17


6.02 TENANT TO OBTAIN & PAY DIRECTLY

     (a) Tenant shall be responsible for and shall pay promptly all charges for
gas, electricity, sewer, heat, light, power, telephone, refuse pickup (to be
performed on a regularly scheduled basis so that accumulated refuse does not
exceed the capacity of Tenant's refuse bins), janitorial service and all other
utilities, materials and services furnished directly to or used by Tenant in, on
or about the Premises, together with all taxes thereon.  Tenant shall contract
directly with the providing companies for such utilities and services.

     (b) Notwithstanding any provision of the Lease to the contrary, without, in
each instance, the prior written consent of Landlord which response for such
consent shall not be unreasonably delayed, as more particularly provided in
Article Nine, Tenant shall not: (i) make any alterations or additions to the
electric or gas equipment or systems or other Building systems.  If Landlord
does not consent to such request, Landlord shall indicate the reasons therefor.
Tenant's use of electric current shall at no time exceed the capacity of the
wiring, feeders and risers providing electric current to the Premises or the
Building.  The consent of Landlord to the installation of electric equipment
shall not relieve Tenant from the obligation to limit usage of electricity to no
more than such capacity.

6.03 TELEPHONE SERVICES

     All telegraph, telephone, and communication connections which Tenant may
desire outside the Premises shall be subject to Landlord's prior written
approval, in Landlord's sole discretion, and the location of all wires and the
work in connection therewith shall be performed by contractors approved by
Landlord and shall be subject to the direction of Landlord, except that such
approval is not required as to Tenant's cabling from the Premises in a route
designated by Landlord to any telephone cabinet or panel provided for Tenant's
connection to the telephone cable serving the Building, so long as Tenant's
equipment does not require connections different than or additional to those to
the telephone cabinet or panel provided. As to any such connections or work
outside the Premises requiring Landlord's approval, Landlord reserves the right
to designate and control the entity or entities providing telephone or other
communication cable installation, removal, repair and maintenance outside the
Premises and to restrict and control access to telephone cabinets or panels. In
the event Landlord designates a particular vendor or vendors to provide such
cable installation, removal, repair and maintenance for the Building, Tenant
agrees to abide by and participate in such program. Tenant shall be responsible
for and shall pay all costs incurred in connection with the installation of
telephone cables and communication wiring in the Premises, including any hook-
up, access and maintenance fees related to the installation of such wires and
cables in the Premises and the commencement of service therein, and the
maintenance thereafter of such wire and cables; and there shall be included in
Operating Expenses for the Building all installation, removal, hook-up or
maintenance costs incurred by Landlord in

                                       18


connection with telephone cables and communication wiring serving the Building
which are not allocable to any individual users of such service but are
allocable to the Building generally. If Tenant fails to maintain all telephone
cables and communication wiring in the Premises and such failure affects or
interferes with the operation or maintenance of any other telephone cables or
communication wiring serving the Building, Landlord or any vendor hired by
Landlord may enter into and upon the Premises forthwith and perform such
repairs, restorations or alterations as Landlord deems necessary in order to
eliminate any such interference (and Landlord may recover from Tenant all of
Landlord's costs in connection therewith). No later than the Termination Date,
Tenant agrees to remove all telephone cables and communication wiring installed
by Tenant for and during Tenant's occupancy, which Landlord shall request Tenant
to remove. Tenant agrees that neither Landlord nor any of its agents or
employees shall be liable to Tenant, or any of Tenant's employees, agents,
customers or invitees or anyone claiming through, by or under Tenant, for any
damages, injuries, losses, expenses, claims or causes of action because of any
interruption, diminution, delay or discontinuance at any time for any reason in
the furnishing of any telephone or other communication service to the Premises
and the Building.

6.04 FAILURE OR INTERRUPTION OF UTILITY OR SERVICE

     To the extent that any equipment or machinery furnished or maintained by
Landlord outside the Premises is used in the delivery of utilities directly
obtained by Tenant pursuant to Section 6.02 and breaks down or ceases to
function properly, Landlord shall use reasonable diligence to repair same
promptly.  In the event of any failure, stoppage or interruption of, or change
in, any utilities or services supplied by Landlord which are not directly
obtained by Tenant, Landlord shall use reasonable diligence to have service
promptly resumed.  In either event covered by the preceding two sentences, if
the cause of any such failure, stoppage or interruption of, or change in,
utilities or services is within the control of a public utility, other public or
quasi-public entity, or utility provider outside Landlord's control,
notification to such utility or entity of such failure, stoppage or interruption
and request to remedy the same shall constitute "reasonable diligence" by
Landlord to have service promptly resumed.  Notwithstanding any other provision
of this Section to the contrary, in the event of any failure, stoppage or
interruption of, or change in, any utility or other service furnished to the
Premises or the Project resulting from any cause, including changes in service
provider or Landlord's compliance with any voluntary or similar governmental or
business guidelines now or hereafter published or any requirements now or
hereafter established by any governmental agency, board or bureau having
jurisdiction over the operation of the Property: (a) Landlord shall not be
liable for, and Tenant shall not be entitled to, any abatement or reduction of
Rent; (b) no such failure, stoppage, or interruption of any such utility or
service shall constitute an eviction of Tenant or relieve Tenant of the
obligation to perform any covenant or agreement of this Lease to be performed by
Tenant; (c)

                                       19


Landlord shall not be in breach of this Lease nor be liable to Tenant for
damages or otherwise.

6.05 CHOICE OF SERVICE PROVIDER

     Tenant acknowledges that Landlord may, at Landlord's sole option, to the
extent permitted by applicable law, elect to change, from time to time, the
company or companies which provide services (including electrical service, gas
service, water, telephone and technical services) to the Property, the Premises
and/or its occupants. Notwithstanding anything to the contrary set forth in this
Lease, Tenant acknowledges that Landlord has not and does not make any
representations or warranties concerning the identity or identities of the
company or companies which provide services to the Property and the Premises or
its occupants and Tenant acknowledges that the choice of service providers and
matters concerning the engagement and termination thereof shall be solely that
of Landlord. The foregoing provision is not intended to modify, amend, change or
otherwise derogate any provision of this Lease concerning the nature or type of
service to be provided or any specific information concerning the amount thereof
to be provided. Tenant agrees to cooperate with Landlord and each of its service
providers in connection with any change in service or provider.

6.06 SIGNAGE

     Tenant shall not install any signage within the Project, the Building or
the Premises without obtaining the prior written approval of Landlord, and
Tenant shall be responsible for the installation and maintenance of any such
signage installed by Tenant. Any such signage shall comply with Landlord's
current Project signage criteria and all Laws.

                                 ARTICLE SEVEN
                   POSSESSION, USE AND CONDITION OF PREMISES

7.01 POSSESSION AND USE OF PREMISES

     (a)  Tenant shall occupy and use the Premises only for the uses specified
in Section 1.01(17) to conduct Tenant's business. Tenant shall not occupy or use
the Premises (or permit the use or occupancy of the Premises) for any purpose or
in any manner which: (1) is unlawful or in violation of any Law or Environmental
Law; (2) may be dangerous to persons or property or which may increase the cost
of, or invalidate, any policy of insurance carried on the Building or covering
its operations; (3) is contrary to or prohibited by the terms and conditions of
this Lease or the rules and regulations as provided in Article Eighteen; (4)
contrary to or prohibited by the articles, bylaws or rules of any owners
association affecting the Project; (5) is improper, immoral, or objectionable;
(6) would obstruct or interfere with the rights of other tenants or occupants

                                       20


of the Building or the Project, or injure or annoy them, or would tend to create
or continue a nuisance; or (7) would constitute any waste in or upon the
Premises or Project.

     (b)  Landlord and Tenant acknowledge that the Americans With Disabilities
Act of 1990 (42 U.S.C. (S)12101 et seq.) and regulations and guidelines
promulgated thereunder, as all of the same may be amended and supplemented from
time to time (collectively referred to herein as the "ADA") establish
requirements for business operations, accessibility and barrier removal, and
that such requirements may or may not apply to the Premises, the Building and
the Project depending on, among other things: (1) whether Tenant's business is
deemed a "public accommodation" or "commercial facility", (2) whether such
requirements are "readily achievable", and (3) whether a given alteration
affects a "primary function area" or triggers "path of travel" requirements. The
parties hereby agree that: (a) Landlord shall be responsible for ADA Title III
compliance in the Common Areas, except as provided below, (b) Tenant shall be
responsible for ADA Title III compliance in the Premises, including any
leasehold improvements or other work to be performed in the Premises under or in
connection with this Lease, (c) Landlord may perform, or require that Tenant
perform, and Tenant shall be responsible for the cost of, ADA Title III "path of
travel" requirements triggered by Tenant Additions in the Premises, and (d)
Landlord may perform, or require Tenant to perform, and Tenant shall be
responsible for the cost of, ADA Title III compliance in the Common Areas
necessitated by the Building being deemed to be a "public accommodation" instead
of a "commercial facility" as a result of Tenant's use of the Premises. Tenant
shall be solely responsible for requirements under Title I of the ADA relating
to Tenant's employees.

     (c)  Landlord and Tenant agree to cooperate and use commercially reasonable
efforts to participate in traffic management programs generally applicable to
businesses located in or about the area and Tenant shall encourage and support
van and car pooling by, and staggered and flexible working hours for, its office
workers and service employees to the extent reasonably permitted by the
requirements of Tenant's business. Neither this Section or any other provision
of this Lease is intended to or shall create any rights or benefits in any other
person, firm, company, governmental entity or the public.

     (d)  Tenant agrees to cooperate with Landlord and to comply with any and
all guidelines or controls concerning energy management imposed upon Landlord by
federal or state governmental organizations or by any energy conservation
association to which Landlord is a party or which is applicable to the Building.

7.02 HAZARDOUS MATERIAL

     (a)  Tenant shall not use, generate, manufacture, produce, store, release,
discharge, or dispose of, on, under or about the Premises or any part of the
Project, or transport to or from the Premises or any part of the Project, any
Hazardous Material or allow its employees, agents, contractors, licensees,
invitees or any other person or entity

                                       21


to do so. Notwithstanding the foregoing, Tenant shall be permitted to use and
store in, and transport to and from, the Premises the Hazardous Material
identified on Exhibit D hereto and by this reference incorporated herein
              ---------
("Permitted Hazardous Material") so long as: (a) each item of the Permitted
Hazardous Material is used or stored in, or transported to and from, the
Premises only to the extent necessary for Tenant's operation of its business at
the Premises; (b) at no time shall any Permitted Hazardous Material be in use or
storage at the Premises in excess of the quantity specified therefor in
Exhibit D; and (c) the conditions set forth in this Section 7.02 are strictly
- ---------
complied with. The right to use and store in, and transport to and from, the
Premises the Permitted Hazardous Material is personal to Maxygen, Inc. and may
not be assigned or otherwise transferred by Maxygen, Inc., without the prior
written consent of Landlord, which consent may be withheld in Landlord's sole
discretion. Any consent by Landlord pursuant to Article Ten of this Lease to an
assignment, transfer, subletting, mortgage, pledge, hypothecation or encumbrance
of this Lease, and any interest therein or right or privilege appurtenant
thereto, shall not constitute consent by Landlord to the use or storage at, or
transportation to, the Premises of any Hazardous Material (including a Permitted
Hazardous Material) by any such assignee, sublessee or transferee unless
Landlord expressly agrees otherwise in writing. Any consent by Landlord to the
use or storage at, or transportation to or from the Premises, of any Hazardous
Material (including a Permitted Hazardous Material) by an assignee, sublessee or
transferee of Tenant shall not constitute a waiver of Landlord's right to refuse
such consent as to any subsequent assignee or transferee.

     (b)  Tenant shall comply with and shall cause Tenant's employees, agents,
contractors, licensees, invitees or any other person or entity for whom Tenant
is responsible (collectively, "Tenant's Agents") to comply with, and shall keep
and maintain the Premises and cause Tenant's Agents to keep and maintain the
Premises, in compliance with all Environmental Laws. Neither Tenant nor Tenant's
Agents shall violate, or cause or permit the Premises to be in violation of, any
Environmental Laws.

          Tenant shall, at its own expense prior to Tenant's use and occupancy,
     procure, maintain in effect and comply with all conditions of any and all
     permits, licenses and other governmental and regulatory approvals required
     for Tenant's use of the Premises. Tenant shall cause any and all Hazardous
     Material removed from the Premises to be removed and transported solely by
     duly licensed handlers to duly licensed facilities for final disposal of
     such materials and wastes. Tenant acknowledges that the sewer piping at the
     Project is made of ABS plastic. Accordingly, without Landlord's prior
     written consent, which may be given or withheld in Landlord's sole
     discretion, only ordinary domestic sewage is permitted to be put into the
     drains at the Premises. UNDER NO CIRCUMSTANCES SHALL TENANT EVER DEPOSIT
     ANY ESTERS OR KETONES (USUALLY FOUND IN SOLVENTS TO CLEAN UP PETROLEUM
     PRODUCTS) IN THE DRAINS AT THE PREMISES. If Tenant desires to put any
     substances other than ordinary domestic sewage into the drains, it shall
     first submit to Landlord a

                                       22


     complete description of each such substance, including its chemical
     composition, and a sample of such substance suitable for laboratory
     testing. Landlord shall promptly determine whether or not the substance can
     be deposited into the drains and its determination shall be absolutely
     binding on Tenant. Upon demand, Tenant shall reimburse Landlord for
     expenses incurred by Landlord in making such determination. If any
     substances not so approved hereunder are deposited in the drains in
     Tenant's Premises, Tenant shall be liable to Landlord for all damages
     resulting therefrom, including, but not limited to, all costs and expenses
     incurred by Landlord in repairing or replacing the piping so damaged.

          Tenant agrees to provide Landlord with: (1) a copy of any hazardous
     material management plan or similar document required by any federal, state
     or local governmental or regulatory authority to be submitted by Tenant;
     (2) copies of all permits, licenses and other governmental and regulatory
     approvals with respect to the use of Hazardous Material; (3) copies of
     hazardous waste manifests reflecting the legal and proper disposal of all
     Hazardous Material removed from the Premises; and (4) copies of all
     reports, studies and written results of tests or inspections concerning the
     Premises or any part of the Project with respect to Hazardous Material,
     including the "Plans" hereinafter defined (collectively "Documents").
     Tenant shall deliver all Documents to Landlord promptly following the
     earlier of (i) Tenant's submission of such Documents to the requesting
     governmental agency, or (ii) Tenant's receipt of such Documents (Tenant
     hereby agreeing that it shall exercise diligent efforts to expeditiously
     obtain copies of any such Documents known by Tenant to exist).

     (c)  Upon commencing any activity involving Hazardous Material on the
Premises, and continuing thereafter throughout the term of this Lease, Tenant
shall initiate and maintain the systems set forth in the following
(collectively, "Plans") in order to ensure the routine monitoring of the levels
of Hazardous Material which may be present on, under or about the Premises or
any part of the Project or properties adjoining or in the vicinity of the
Project as the result of the activities of Tenant or Tenant's Agents and to
ensure continued compliance with the procedures and regulations concerning the
handling, storage, use and disposal of Hazardous Material: (1) each permit,
license or other governmental or regulatory approval with respect to the use of
Hazardous Material, (2) each Hazardous Material management plan or similar
document required by any federal, state, or local governmental or regulatory
entity, (3) each plan for handling and disposing of Hazardous Material necessary
to comply with Environmental Laws prepared by or on behalf of Tenant or Tenant's
Agents (whether or not required to be submitted to a governmental agency).
Copies of the foregoing described Plans are listed on Exhibit E hereto and
                                                      ---------
attached to this Lease as Exhibits E-1 through E- .
                                   ---         --

     (d)  Not less often than once each calendar year during the term of this
Lease, Tenant shall provide Landlord with a written report which shall set forth
the results of the

                                       23


monitoring of Hazardous Material during the previous calendar year. Landlord may
elect (but shall not be obligated) to retain an independent consultant
experienced in the use and management of Hazardous Material for the purpose of
reviewing any information received by Landlord in connection with Hazardous
Material. Pursuant to such review, Landlord's consultant may make
recommendations in connection with Tenant's control of Hazardous Material on the
Premises, and Tenant shall implement, at Tenant's sole cost, the recommendations
of Landlord's consultant. Landlord's failure to appoint any consultant shall not
relieve Tenant of any of Tenant's obligations under this Lease relating to
Hazardous Material nor constitute a waiver of Landlord's rights under this
Lease. In the event that Landlord's consultant discovers that Tenant's
procedures constitute or will result in a non- violation of the provisions of
this Section, Tenant shall promptly cure such violation and, as necessary,
modify its procedures, at its sole cost and expense, to the reasonable
satisfaction of Landlord's consultant.

     (e)  Landlord may install permanent or other testing wells or devices at or
about the Premises or any part of the Project, and may cause the ground water to
be tested to detect the presence of Hazardous Material at least once every
twelve (12) months during the term of this Lease by the use of such wells or
devices as are then customarily used for such purposes. If Tenant so requests in
writing, Landlord shall supply Tenant with a copy of any such test results. The
costs of any such tests, and the installation, maintenance, repair, removal,
closure and replacement of such wells or devices shall be included in Operating
Expenses pursuant to this Lease; provided, however, such costs shall be borne
solely by Tenant if the same are incurred by Landlord based upon Landlord's
reasonable belief, at the time such testing is initiated, that Tenant is in
breach of its obligations under this Section 7.02 or if, following the
initiation of such testing, the presence of Hazardous Material is detected and
Tenant or Tenant's Agents are responsible therefor. Tenant's obligations under
this Section 7.02(e) shall survive the expiration or earlier termination of this
Lease.

     (f)  Landlord and its representative shall have the right, at the following
times, to enter the Premises and to: (i) conduct any testing, monitoring and
analysis for Hazardous Material; (ii) review any documents, materials,
inventory, financial data or notices or correspondence to or from private
parties or governmental or regulatory authorities in connection therewith; and
(iii) review all storage, use, transportation and disposal facilities and
procedures associated with the storage, use, transportation and disposal of
Hazardous Material (collectively, "Inspection"):

          (1)  Once every six (6) months for the first twelve (12) months after
the later of the date Tenant introduces Hazardous Material to the Premises
pursuant to this Section 7.02 or notifies Landlord of such use, and once every
twelve (12) months thereafter throughout the term of this Lease. Tenant agrees
to notify Landlord at least five (5) business days prior to the use or storage
in, or transportation to, the Premises of Hazardous Material; and

                                       24


          (2)  At any time during the term of this Lease if, in Landlord's
reasonable judgment, Tenant is breaching its obligation under this Section 7.02
or is not in compliance with any other provision of this Lease.

               All costs and expenses incurred by Landlord in connection with
any Inspection pursuant to this Section 7.02(f) shall, subject to Section
7.02(n) below, become due and payable by Tenant as additional Rent, upon
presentation by Landlord of an invoice therefor.

     (g)  Tenant shall give prompt written notice to Landlord of:

          (1)  any proceeding or inquiry by, notice from, or order of any
governmental authority (including the California State Department of Health
Services) with respect to the presence of any Hazardous Material on, under or
about the Premises or any part of the Project or the migration thereof from or
to other property;

          (2)  all claims made or threatened by any third party against Tenant,
the Premises or any part of the Project relating to any loss or injury resulting
from any Hazardous Material; and

          (3)  any spill, release, discharge or nonroutine disposal of Hazardous
Material that occurs with respect to the Premises or operations at the Premises
by Tenant or Tenant's Agents;

          (4)  all matters of which Tenant is required to give notice pursuant
to Sections 25249.5 et seq. and 25359.7 of the California Health and Safety
Code; and

          (5)  Tenant's discovery of any occurrence or condition on, under or
about the Premises or any part of the Project or any real property adjoining or
in the vicinity of the Premises or the Project that could cause the Premises or
any part of the Project to be subject to any restrictions on the ownership,
occupancy, transferability or use of the Premises or any part of the Project
under any Environmental Laws, including without limitation, Tenant's discovery
of any occurrence or condition on any real property adjoining or in the vicinity
of the Premises or the Project that could cause the Premises or any part of the
Project to be classified as "border zone property" under the provisions of
California Health and Safety Code Sections 25220 et seq. or any regulation
adopted in accordance therewith, or to be otherwise subject to any restrictions
on the ownership, occupancy, transferability or use of the Premises or any part
of the Project under any Environmental Laws.

     (h)  Landlord shall have the right to join and participate in, as a party
if it so elects, any legal proceedings or actions affecting the Premises or any
part of the Project initiated in connection with any Environmental Laws and have
its attorneys' fees in connection therewith paid by Tenant. In addition, Tenant
shall not take any remedial

                                       25


action in response to the presence of any Hazardous Material in, under, or about
the Premises or the Project (except in the case where loss of life or
substantial property damage is imminent or immediate action is required by any
governmental entity, in which event Tenant shall take immediate remedial
action), nor enter into any settlement agreement, consent decree or other
compromise in respect to any claims relating to any Hazardous Material in any
way connected with the Premises or the Project, without first notifying Landlord
of Tenant's intention to do so and affording Landlord ample opportunity to
appear, intervene or otherwise appropriately assert and protect Landlord's
interest with respect thereto.

     (i)  To the extent permitted by law, Tenant hereby indemnifies and agrees
to protect, defend and hold the Indemnitees harmless against any actions,
claims, demands, liability, costs and expenses, including attorneys' fees and
costs, arising from the use, generation, manufacture, production, storage,
release, threatened release, discharge, disposal, transportation to or from, or
presence of any Hazardous Material on, under or about the Premises or any part
of the Project caused by Tenant or by Tenant's Agents (collectively a "Release")
including, without limitation: (1) all foreseeable consequential damages,
including loss of rental income and diminution in property value; (2) the costs
of any investigation, monitoring, removal, restoration, abatement, repair,
cleanup, detoxification or other ameliorative work of any kind or nature
(collectively "Remedial Work") and the preparation and implementation of any
closure, remedial or other required plans; (3) any injury to or death of persons
or damage to or destruction of property; and (4) any failure of Tenant or
Tenant's Agents to observe the covenants of this Section 7.02. For purposes of
this Section 7.02(i), any acts or omissions of Tenant's Agents (whether or not
they are negligent, intentional, willful or unlawful) shall be strictly
attributable to Tenant. In case of any action of proceeding brought against the
Indemnitees by reason of any such claim, upon notice from Landlord, Tenant
covenants to defend such action or proceeding by counsel chosen by Landlord, in
Landlord's sole discretion. Landlord reserves the right to settle, compromise or
dispose of any and all actions, claims and demands related to the foregoing
indemnity. Tenant's obligations under this Section 7.02(i) shall survive the
expiration or earlier termination of this Lease. The foregoing indemnity shall
not operate to relieve Landlord of any liability Landlord has under
Environmental Laws to the extent Hazardous Materials are present on, under or
about the Premises or the Project prior to delivery to Tenant of possession of
the Premises.

          In no event shall Landlord be responsible to Tenant for the presence
of Hazardous Material in, on or about the Premises or the Project to the extent
caused or contributed to by any third party.

     (j)  Within forty-five (45) days following the end of Tenant's fiscal year,
Tenant shall provide Landlord with financial statements prepared in accordance
with generally accepted accounting principles consistently applied and certified
as true and

                                       26


correct by Tenant's independent certified public accountant setting forth
Tenant's performance for the applicable fiscal year. So long as Tenant is not a
publicly traded company, the preceding sentence shall not apply, but Tenant
shall make available to Landlord, at mutually convenient times, at Landlord's
request, from time to time, financial statements prepared in accordance with
generally accepted accounting principles consistently applied and certified as
true and correct by Tenant's independent certified public accountant setting
forth Tenant's performance for the applicable fiscal year, for inspection and
review by Landlord at the Premises. As of the execution of this Lease, Tenant's
fiscal year ends December 31. Tenant shall provide Landlord with prompt written
notice of any change in Tenant's fiscal year. If at any time it reasonably
appears to Landlord that Tenant is. not maintaining sufficient insurance or is
not otherwise financially capable of fulfilling its obligations under this
Section 7.02, whether or not such obligations have accrued, become liquidated,
conditional or contingent, Tenant shall procure and thereafter maintain in full
force and effect such insurance or other form of financial assurance, with or
from companies or persons and in forms reasonably acceptable to Landlord, as
Landlord may from time to time request.

     (k)  Upon any Release, Tenant shall, subject to Section 7.02(h), promptly
notify Landlord of the Release and shall, at its sole expense and immediately
after demand by Landlord, commence to perform and thereafter diligently
prosecute to completion such Remedial Work as is necessary to restore the
Premises, Project or any other property affected by the Release to the condition
existing prior to the use of any Hazardous Material by Tenant and/or Tenant's
Agents. All such Remedial Work shall be performed: (1) in conformance with the
requirements of all applicable Environmental Laws; (2) by one or more
contractors, approved in advance in writing by Landlord; and (3) under the
supervision of a consulting engineer approved in advance in writing by Landlord.
All costs and expenses of such Remedial Work shall be paid by Tenant including
the charges of such contractor(s) and/or the consulting engineer and Landlord's
reasonable attorneys' fees and costs incurred in connection with the monitoring
or review of such Remedial Work. In the event Tenant shall fail to timely
commence, or cause to be commenced, or fail to diligently prosecute to
completion, such Remedial Work, Landlord may, but shall not be required to,
cause such Remedial Work to be performed and all costs and expenses thereof, or
incurred in connection therewith, shall become immediately due and payable by
Tenant. Tenant's obligations under this Section 7.02(k) shall survive the
expiration or sooner termination of this Lease.

     (l)  Hazardous Material shall include by way of illustration, and without
limiting the generality of the definition of Hazardous Material in Section 1.03,
the following: (i) those substances included within the definitions of
"hazardous substances" "hazardous materials," "toxic substances" or "solid
waste" under all present and future federal, state and local laws (whether under
common law, statute, rule, regulation or otherwise) relating to the protection
of human health or the environment, including California Senate Bill 245
(Statutes of 1987, Chapter 1302), the Safe Drinking Water and

                                       27


Toxic Enforcement Act of 1986 (commonly known as Proposition 65) and the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. Section 9601 et seq., the Resource Conservation and Recovery
                                -- ---
Act of 1976, 42 U.S.C. Section 6901 et seq., and the Hazardous Materials
                                    -- ---
Transportation Act, 49 U.S.C. Sections 1801, et seq., all as heretofore and
                                             -- ---
hereafter amended, or in any regulations promulgated pursuant to said laws; (ii)
those substances defined as "hazardous wastes" in Section 25117 of the
California Health & Safety Code or as "hazardous substances" in Section 25316 of
the California Health & Safety Code, or in any regulations promulgated pursuant
to said laws; (iii) those substances listed in the United States Department of
Transportation Table (49 CFR 172.101 and amendments thereto) or designated by
the Environmental Protection Agency (or any successor agency) as hazardous
substances (see, e.g., 40 CFR Part 302 and amendments thereto); (iv) such other
            ---  ---
substances, materials and wastes which are or become regulated under applicable
local, state or federal law or by the United States government or which are or
become classified as hazardous or toxic under federal, state or local laws or
regulations, including California Health & Safety Code, Division 20, and Title
26 of the California Code of Regulations; and (v) any material, waste or
substance which contains petroleum, asbestos or polychlorinated biphenyls, is
designated as a "hazardous substance" pursuant to Section 311 of the Clean Water
Act of 1977, 33 U.S.C. Sections 1251, et seq. (33 U.S.C. (S) 1321), is listed
                                      -- ---
pursuant to Section 307 of the Clean Water Act of 1977 (33 U.S.C. (S) 1317), or
contains any flammable, explosive or radioactive material.

     (m)  In addition to Tenant's obligations pursuant to Article Twelve of this
Lease, Tenant shall, on the expiration or sooner termination of this Lease,
surrender the Premises to Landlord free of Hazardous Material for which Tenant
is responsible hereunder. If Tenant fails to so surrender the Premises and the
Project, the provisions of Section 7.02(i) shall apply. Landlord shall have the
right, but not the obligation, to appoint a consultant, at Tenant's expense, to
conduct an investigation to determine whether any Hazardous Material are located
in or about the Premises or the Project, and to determine the corrective
measures required to remove such Hazardous Material. Tenant, at its expense,
shall comply with all recommendations of the consultant. A failure by Landlord
to appoint such a consultant shall in no way relieve Tenant of any of Tenant's
obligations set forth in this Lease relating to Hazardous Material, nor
constitute a waiver of Landlord's rights under this Lease. Tenant's obligations
under this Section 7.02(m) shall survive the expiration or earlier termination
of this Lease.

     (n)  Except as otherwise provided in Section 7.02(d) (concerning the
implementation of consultant recommendations) and Section 7.02(k) (concerning
the monitoring and review of Remedial Work), all costs incurred by Landlord in
retaining a consultant for any purpose contained in this Section 7.02 shall be
included in Operating Expenses under this Lease unless Landlord retains a
consultant pursuant to this Section 7.02, and such consultant reasonably
determines after appropriate review of information and/or inspection that Tenant
is breaching its obligations under this Lease to comply with

                                       28


this Section 7.02, in which event all costs and expenses incurred by Landlord in
connection with any such review, inspection, and/or implementation of
recommendations pursuant to this Section 7.02 shall become due and payable by
Tenant as additional Rent, upon presentation by Landlord of an invoice therefor.

     (o)  Upon any violation of any of the foregoing covenants, Landlord shall
be entitled to exercise all remedies available to a landlord against a
defaulting tenant, including but not limited to those set forth in Article
Eleven of this Lease. No action by Landlord hereunder shall impair the
obligations of Tenant pursuant to Section 7.02.


7.03 LANDLORD ACCESS TO PREMISES; APPROVALS

     (a)  Tenant shall permit Landlord to erect, use and maintain pipes, ducts,
wiring and conduits in and through the Premises, so long as Tenant's use, layout
or design of the Premises is not materially affected or altered. Landlord or
Landlord's agents shall have the right to enter upon the Premises in the event
of an emergency, or, upon twenty-four (24) hours prior notice to Tenant, to
inspect the Premises, to perform janitorial and other services (if any), to
conduct safety and other testing in the Premises and to make such repairs,
alterations, improvements or additions to the Premises or the Building or other
parts of the Property as Landlord may deem necessary or desirable (including all
alterations, improvements and additions in connection with a change in service
provider or providers). Janitorial and cleaning services (if any) shall be
performed after normal business hours. Any entry or work by Landlord may be
during normal business hours and Landlord may use reasonable efforts to ensure
that any entry or work shall not materially interfere with Tenant's occupancy of
the Premises.

     (b)  If Tenant shall not be personally present to permit an entry into the
Premises when for any reason an entry therein shall be necessary or permissible,
Landlord (or Landlord's agents), after attempting to notify Tenant (unless
Landlord believes an emergency situation exists), may enter the Premises without
rendering Landlord or its agents liable therefor, and without relieving Tenant
of any obligations under this Lease.

     (c)  Upon twenty-four (24) hours notice to Tenant (or such shorter notice
as may be reasonable in an emergency), Landlord may enter the Premises for the
purpose of conducting such inspections, tests and studies as Landlord may deem
desirable or necessary to confirm Tenant's compliance with all Laws and
Environmental Laws or for other purposes necessary in Landlord's reasonable
judgment to ensure the sound condition of the Property and the systems serving
the Property. Landlord's rights under this Section 7.02(c) are for Landlord's
own protection only, and Landlord has not, and shall not be deemed to have
assumed, any responsibility to Tenant or any other party as a result of the
exercise or non-exercise of such rights, for compliance with Laws or
Environmental Laws or for the accuracy or sufficiency of any item or the quality
or suitability of any item for its intended use.

                                       29


     (d) Landlord may do any of the foregoing, or undertake any of the
inspection or work described in the preceding paragraphs without such action
constituting an actual or constructive eviction of Tenant, in whole or in part,
or giving rise to an abatement of Rent by reason of loss or interruption of
business of the Tenant, or otherwise.

     (e) The review, approval or consent of Landlord with respect to any item
required or permitted under this Lease is for Landlord's own protection only,
and Landlord has not, and shall not be deemed to have assumed, any
responsibility to Tenant or any other party, as a result of the exercise or non-
exercise of such rights, for compliance with Laws or Environmental Laws or for
the accuracy or sufficiency of any item or the quality or suitability of any
item for its intended use.

7.04 QUIET ENJOYMENT

     Landlord covenants, in lieu of any implied covenant of quiet possession or
quiet enjoyment, that so long as Tenant is in compliance with the covenants and
conditions set forth in this Lease, Tenant shall have the right to quiet
enjoyment of the Premises without hindrance or interference from Landlord or
those claiming through Landlord, and subject to the covenants and conditions set
forth in the Lease and to the rights of any Mortgagee or ground lessor.


                                 ARTICLE EIGHT
                                  MAINTENANCE

8.01 LANDLORD'S MAINTENANCE

     Subject to Article Fourteen and Section 8.02, Landlord shall maintain the
structural portions of the Building, the roof, exterior walls and exterior
doors, foundation, and underslab standard sewer system of the Building in good,
clean and safe condition, and shall use reasonable efforts, through Landlord's
program of regularly scheduled preventive maintenance, to keep the Building's
standard heating, ventilation and air conditioning ("HVAC") equipment in
reasonably good order and condition.  Notwithstanding the foregoing, Landlord
shall have no responsibility to repair the Building's standard heating,
ventilation and air conditioning equipment, and all such repairs shall be
performed by Tenant pursuant to the terms of Section 8.02.  Landlord shall also
(a) maintain the landscaping, parking facilities and other Common Areas of the
Project, and (b) wash the outside of exterior windows at intervals reasonably
determined by Landlord.  Except as provided in Article Fourteen and Article
Fifteen, there shall be no abatement of rent, no allowance to Tenant for
diminution of rental value and no liability of Landlord by reason of
inconvenience, annoyance or any injury to or interference with Tenant's business
arising from the making of or the failure to make any repairs, alterations or
improvements in or to any portion of the Project or in or to any fixtures,
appurtenances or equipment therein.  Tenant waives the right to make repairs at
Landlord's expense under any law, statute or ordinance now or hereafter in
effect.

                                       30


8.02 TENANT'S MAINTENANCE

     Subject to the provisions of Article Fourteen, Tenant shall, at Tenant's
sole cost and expense, make all repairs to the Premises and fixtures therein
which Landlord is not required to make pursuant to Section 8.01, including
repairs to the interior walls, ceilings and windows of the Premises, the
interior doors, Tenant's signage, and the electrical, life-safety, plumbing and
heating, ventilation and air conditioning systems located within or serving the
Premises and shall maintain the Premises, the fixtures and utilities systems
therein, and the area immediately surrounding the Premises (including all
garbage enclosures), in a good, clean and safe condition. Tenant shall deliver
to Landlord a copy of any maintenance contract entered into by Tenant with
respect to the Premises. Tenant shall also, at Tenant's expense, keep any non-
standard heating, ventilating and air conditioning equipment and other non-
standard equipment in the Building in good condition and repair, using
contractors approved in advance, in writing, by Landlord. Notwithstanding
Section 8.01 above, but subject to the waivers set forth in Section 16.04,
Tenant will pay for any repairs to the Building or the Project which are caused
by any negligence or carelessness, or by any willful and wrongful act, of Tenant
or its assignees, subtenants or employees, or of the respective agents of any of
the foregoing persons, or of any other persons permitted in the Building or
elsewhere in the Project by Tenant or any of them. Tenant will maintain the
Premises, and will leave the Premises upon termination of this Lease, in a safe,
clean, neat and sanitary condition.


                                  ARTICLE NINE
                          ALTERATIONS AND IMPROVEMENTS

9.01 TENANT ALTERATIONS

     (a)  The following provisions shall apply to the completion of any Tenant
Alterations:

          (1) Tenant shall not, except as provided herein, without the prior
written consent of Landlord, which consent shall not be unreasonably withheld,
make or cause to be made any Tenant Alterations in or to the Premises or any
Property systems serving the Premises. Prior to making any Tenant Alterations,
Tenant shall give Landlord ten (10) days prior written notice (or such earlier
notice as would be necessary pursuant to applicable Law) to permit Landlord
sufficient time to post appropriate notices of non-responsibility. Subject to
all other requirements of this Article Nine, Tenant may undertake Decoration
work without Landlord's prior written consent. Tenant shall furnish Landlord
with the names and addresses of all contractors and subcontractors and copies of
all contracts. All Tenant Alterations shall be completed at such time and in
such manner as Landlord may from time to time designate, and only by contractors
or mechanics approved by Landlord, which approval shall not be unreasonably
withheld, provided, however, that Landlord may, in its sole discretion, specify
the engineers and contractors to perform all work relating to the Building's
systems (including the

                                       31


mechanical, heating, plumbing, security, ventilating, air-conditioning,
electrical, communication and the fire and life safety systems in the Building).
The contractors, mechanics and engineers who may be used are further limited to
those whose work will not cause or threaten to cause disharmony or interference
with Landlord or other tenants in the Building and their respective agents and
contractors performing work in or about the Building. Landlord may further
condition its consent upon Tenant furnishing to Landlord and Landlord approving
prior to the commencement of any work or delivery of materials to the Premises
related to the Tenant Alterations such of the following as specified by
Landlord: architectural plans and specifications, opinions from Landlord's
engineers stating that the Tenant Alterations will not in any way adversely
affect the Building's systems, necessary permits and licenses, certificates of
insurance, and such other documents in such form reasonably requested by
Landlord. Upon completion of the Tenant Alterations, Tenant shall deliver to
Landlord two (2) sets of as-built mylar and digitized plans and specifications
for the Tenant Alterations.

          (2) Tenant shall pay the cost of all Tenant Alterations and the cost
of decorating the Premises and any work to the Property occasioned thereby. In
connection with completion of any Tenant Alterations, Tenant shall pay Landlord
hoisting charges at Landlord's then standard rate. Upon completion of Tenant
Alterations, Tenant shall furnish Landlord with contractors' affidavits and full
and final waivers of lien and receipted bills covering all labor and materials
expended and used in connection therewith and such other documentation
reasonably requested by Landlord or Mortgagee.

          (3) Tenant agrees to complete all Tenant Alterations (i) in accordance
with all Laws, Environmental Laws, all requirements of applicable insurance
companies and in accordance with Landlord's standard construction rules and
regulations, and (ii) in a good and workmanlike manner with the use of good
grades of materials. Tenant shall notify Landlord immediately if Tenant receives
any notice of violation of any Law in connection with completion of any Tenant
Alterations and shall immediately take such steps as are necessary to remedy
such violation. In no event shall such supervision or right to supervise by
Landlord nor shall any approvals given by Landlord under this Lease constitute
any warranty by Landlord to Tenant of the adequacy of the design, workmanship or
quality of such work or materials for Tenant's intended use or of compliance
with the requirements of Section 9.01(a)(3)(i) and (ii) above or impose any
liability upon Landlord in connection with the performance of such work.

          (b) All Tenant Additions to the Premises whether installed by Landlord
or Tenant, shall without compensation or credit to Tenant, become part of the
Premises and the property of Landlord at the time of their installation and
shall remain in the Premises, unless pursuant to Article Twelve, Tenant may
remove them or is required to remove them at Landlord's request.

                                       32


9.02 LIENS

     Tenant shall not permit any lien or claim for lien of any mechanic, laborer
or supplier or any other lien to be filed against the Building, the Land, the
Premises, or any other part of the Property arising out of work performed, or
alleged to have been performed by, or at the direction of, or on behalf of
Tenant. If any such lien or claim for lien is filed, Tenant shall within ten
(10) days of receiving notice of such lien or claim (a) have such lien or claim
for lien released of record or (b) deliver to Landlord a bond in form, content,
amount, and issued by surety, satisfactory to Landlord, indemnifying,
protecting, defending and holding harmless the Indemnitees against all costs and
liabilities resulting from such lien or claim for lien and the foreclosure or
attempted foreclosure thereof. If Tenant fails to take any of the above actions,
Landlord, in addition to its rights and remedies under Article Eleven, without
investigating the validity of such lien or claim for lien, may pay or discharge
the same and Tenant shall, as payment of additional Rent hereunder, reimburse
Landlord upon demand for the amount so paid by Landlord, including Landlord's
expenses and attorneys' fees.


                                  ARTICLE TEN
                           ASSIGNMENT AND SUBLETTING

10.01  ASSIGNMENT AND SUBLETTING

       (a) Without the prior written consent of Landlord, which may be withheld
in Landlord's sole discretion, Tenant may not sublease, assign, mortgage,
pledge, hypothecate or otherwise transfer or permit the transfer of this Lease
or the encumbering of Tenant's interest therein in whole or in part, by
operation of Law or otherwise or permit the use or occupancy of the Premises, or
any part thereof, by anyone other than Tenant, provided, however, if Landlord
chooses not to recapture the space proposed to be subleased or assigned as
provided in Section 10.02, Landlord shall not unreasonably withhold its consent
to a subletting or assignment under this Section 10.01. Tenant agrees that the
provisions governing sublease and assignment set forth in this Article Ten shall
be deemed to be reasonable. If Tenant desires to enter into any sublease of the
Premises or assignment of this Lease, Tenant shall deliver written notice
thereof to Landlord ("Tenant's Notice"), together with the identity of the
proposed subtenant or assignee and the proposed principal terms thereof and
financial and other information sufficient for Landlord to make an informed
judgment with respect to such proposed subtenant or assignee at least thirty
(30) days prior to the commencement date of the term of the proposed sublease or
assignment. If Tenant proposes to sublease less than all of the Rentable Area of
the Premises, the space proposed to be sublet and the space retained by Tenant
must each be a marketable unit as reasonably determined by Landlord and
otherwise in compliance with all Laws. Landlord shall notify Tenant in writing
of its approval or disapproval of the proposed sublease or assignment or its
decision to exercise its rights under Section 10.02 within fifteen (15) days
after receipt of Tenant's Notice (and all required information). In no event may
Tenant sublease any portion of the

                                       33


Premises or assign the Lease to any other tenant of the Project. Tenant shall
submit for Landlord's approval (which approval shall not be unreasonably
withheld) any advertising which Tenant or its agents intend to use with respect
to the space proposed to be sublet.

     (b) With respect to Landlord's consent to an assignment or sublease,
Landlord may take into consideration any factors which Landlord may deem
relevant, and the reasons for which Landlord's denial shall be deemed to be
reasonable shall include, without limitation, the following:

          (i)    the business reputation or creditworthiness of any proposed
subtenant or assignee is not acceptable to Landlord; or

          (ii)   in Landlord's reasonable judgment the proposed assignee or
subtenant would diminish the value or reputation of the Building or Landlord; or

          (iii)  any proposed assignee's or subtenant's use of the Premises
would violate Section 7.01 of the Lease or would violate the provisions of any
other leases of tenants in the Project;

          (iv)   the proposed assignee or subtenant is either a governmental
agency, a school or similar operation, or a medical related practice; or

          (v)    the proposed subtenant or assignee is a bona fide
prospective tenant of Landlord in the Project as demonstrated by a written
proposal dated within ninety (90) days prior to the date of Tenant's request; or

          (vi)   the proposed subtenant or assignee would materially increase
the estimated pedestrian and vehicular traffic to and from the Premises and the
Building.

       In no event shall Landlord be obligated to consider a consent to any
proposed assignment of the Lease which would assign less than the entire
Premises. In the event Landlord wrongfully withholds its consent to any proposed
sublease of the Premises or assignment of the Lease, Tenant's sole and exclusive
remedy therefor shall be to seek specific performance of Landlord's obligations
to consent to such sublease or assignment.

     (c) Any sublease or assignment shall be expressly subject to the terms
and conditions of this Lease. Any subtenant or assignee shall execute such
documents as Landlord may reasonably require to evidence such subtenant or
assignee's assumption of the obligations and liabilities of Tenant under this
Lease. Tenant shall deliver to Landlord a copy of all agreements executed by
Tenant and the proposed subtenant and assignee with respect to the Premises.
Landlord's approval of a sublease, assignment, hypothecation, transfer or third
party use or occupancy shall not constitute a waiver of Tenant's obligation to
obtain Landlord's consent to further assignments or subleases, hypothecations,
transfers or third party use or occupancy.

                                       34


       (d) For purposes of this Article Ten, an assignment shall be deemed to
include a change in the majority control of Tenant, resulting from any transfer,
sale or assignment of shares of stock of Tenant occurring by operation of Law or
otherwise if Tenant is a corporation whose shares of stock are not traded
publicly.  If Tenant is a partnership, any change in the partners of Tenant
shall be deemed to be an assignment.

10.02  [INTENTIONALLY DELETED]

10.03  EXCESS RENT

       Tenant shall pay Landlord on the first day of each month during the term
of the sublease or assignment, fifty percent (50%) of the amount by which the
sum of all rent and other consideration (direct or indirect) due from the
subtenant or assignee for such month exceeds: (i) that portion of the Monthly
Base Rent and Rent Adjustments due under this Lease for said month which is
allocable to the space sublet or assigned; and (ii) the following costs and
expenses for the subletting or assignment of such space: (1) brokerage
commissions and attorneys' fees and expenses, (2) the actual costs paid in
making any improvements or substitutions in the Premises required by any
sublease or assignment; and (3) "free rent" periods, costs of any inducements or
concessions given to subtenant or assignee, moving costs, and other amounts in
respect of such subtenant's or assignee's other leases or occupancy
arrangements. All such costs and expenses shall be amortized over the term of
the sublease or assignment pursuant to sound accounting principles.

10.04  TENANT LIABILITY

       In the event of any sublease or assignment, whether or not with
Landlord's consent, Tenant shall not be released or discharged from any
liability, whether past, present or future, under this Lease, including any
liability arising from the exercise of any renewal or expansion option, to the
extent such exercise is expressly permitted by Landlord. Tenant's liability
shall remain primary, and in the event of default by any subtenant, assignee or
successor of Tenant in performance or observance of any of the covenants or
conditions of this Lease, Landlord may proceed directly against Tenant without
the necessity of exhausting remedies against said subtenant, assignee or
successor, After any assignment, Landlord may consent to subsequent assignments
or subletting of this Lease, or amendments or modifications of this Lease with
assignees of Tenant, without notifying Tenant, or any successor of Tenant, and
without obtaining its or their consent thereto, and such action shall not
relieve Tenant or any successor of Tenant of liability under this Lease. If
Landlord grants consent to such sublease or assignment, Tenant shall pay all
reasonable attorneys' fees and expenses incurred by Landlord with respect to
such assignment or sublease. In addition, if Tenant has any options to extend
the term of this Lease or to add other space to the Premises, such options shall
not be available to any subtenant or assignee, directly or indirectly without
Landlord's express written consent, which may be withheld in Landlord's sole
discretion.

                                       35


10.05  ASSUMPTION AND ATTORNMENT

       If Tenant shall assign this Lease as permitted herein, the assignee shall
expressly assume all of the obligations of Tenant hereunder in a written
instrument satisfactory to Landlord and furnished to Landlord not later than
fifteen (15) days prior to the effective date of the assignment.  If Tenant
shall sublease the Premises as permitted herein, Tenant shall, at Landlord's
option, within fifteen (15) days following any request by Landlord, obtain and
furnish to Landlord the written agreement of such subtenant to the effect that
the subtenant will attorn to Landlord and will pay all subrent directly to
Landlord.

10.06  TRANSFER TO TENANT AFFILIATE

       Anything in this Section to the contrary notwithstanding, Tenant may
assign this Lease or sublet all or a portion of the Premises to any entity which
controls, is controlled by or is under common control with Maxygen, Inc. (each a
"Tenant Affiliate"), without the prior consent of Landlord, and Landlord shall
have no right to recapture the Premises subject to such sublease or assignment;
provided, however, that in order for any such assignment or sublease to be
effective, Landlord shall be given prior written notice of same and any such
assignment or sublease shall comply with the requirements set forth in Section
10.05, and shall be in effect only so long as such entity controls, is
controlled by or is under common control with Maxygen, Inc. In addition, no such
assignment or sublease shall relieve Tenant of any obligation to be performed by
Tenant under this Lease, whether occurring before or after any such assignment
or sublease. For purposes of this Section, the term "control" means (i) the
beneficial ownership, directly or indirectly, of not less than fifty-one percent
(51%) of the voting common stock or equity interests of the controlled entity
and (ii) the controlling entity manages, directly or indirectly, the controlled
entity.


                                 ARTICLE ELEVEN
                              DEFAULT AND REMEDIES

11.01  EVENTS OF DEFAULT

       The occurrence or existence of any one or more of the following shall
constitute a "Default" by Tenant under this Lease:

          (i)    Tenant fails to pay any installment or other payment of Rent
including Rent Adjustment Deposits or Rent Adjustments within three (3) days
after the date when due;

          (ii)   Tenant fails to observe or perform any of the other covenants,
conditions or provisions of this Lease or the Workletter and fails to cure such
default within fifteen (15) days after written notice thereof to Tenant, unless
the default involves

                                       36


a hazardous condition, which shall be cured forthwith or unless the failure to
perform is a Default for which this Lease specifies there is no cure or grace
period;

          (iii)  the interest of Tenant in this Lease is levied upon under
execution or other legal process;

          (iv)   a petition is filed by or against Tenant to declare Tenant
bankrupt or seeking a plan of reorganization or arrangement under any Chapter of
the Bankruptcy Act, or any amendment, replacement or substitution therefor, or
to delay payment of, reduce or modify Tenant's debts, which in the case of an
involuntary action is not discharged within thirty (30) days;

          (v)    Tenant is declared insolvent by Law or any assignment of
Tenant's property is made for the benefit of creditors;

          (vi)   a receiver is appointed for Tenant or Tenant's property, which
appointment is not discharged within thirty (30) days;

          (vii)  any action taken by or against Tenant to reorganize or modify
Tenant's capital structure in a materially adverse way which in the case of an
involuntary action is not discharged within thirty (30) days;

          (viii) upon the dissolution of Tenant; or

          (ix)   upon the third occurrence within any Lease Year that Tenant
fails to pay Rent when due or has breached a particular covenant of this Lease
(whether or not such failure or breach is thereafter cured within any stated
cure or grace period or statutory period).

11.02  LANDLORD'S REMEDIES

       (a) A Default shall constitute a breach of the Lease for which Landlord
shall have the rights and remedies set forth in this Section 11.02 and all other
rights and remedies set forth in this Lease or now or hereafter allowed by Law,
whether legal or equitable, and all rights and remedies of Landlord shall be
cumulative and none shall exclude any other right or remedy.

       (b) With respect to a Default, at any time Landlord may terminate
Tenant's right to possession by written notice to Tenant stating such election.
Any written notice required pursuant to Section 11.01 shall constitute notice of
unlawful detainer pursuant to California Code of Civil Procedure Section 1161
if, at Landlord's sole discretion, it states Landlord's election that Tenants
right to possession is terminated after expiration of any period required by Law
or any longer period required by Section 11.01. Upon the expiration of the
period stated in Landlord's written notice of termination (and unless such
notice provides an option to cure within such period and Tenant cures the
Default

                                       37


within such period), Tenant's right to possession shall terminate and this Lease
shall terminate, and Tenant shall remain liable as hereinafter provided. Upon
such termination in writing of Tenant's right to possession, Landlord shall have
the right, subject to applicable Law, to re-enter the Premises and dispossess
Tenant and the legal representatives of Tenant and all other occupants of the
Premises by unlawful detainer or other summary proceedings, or otherwise as
permitted by Law, regain possession of the Premises and remove their property
(including their trade fixtures, personal property and those Tenant Additions
which Tenant is required or permitted to remove under Article Twelve), but
Landlord shall not be obligated to effect such removal, and such property may,
at Landlord's option, be stored elsewhere, sold or otherwise dealt with as
permitted by Law, at the risk of, expense of and for the account of Tenant, and
the proceeds of any sale shall be applied pursuant to Law. Landlord shall in no
event be responsible for the value, preservation or safekeeping of any such
property. Tenant hereby waives all claims for damages that may be caused by
Landlord's removing or storing Tenant's personal property pursuant to this
Section or Section 12.01, and Tenant hereby indemnifies, and agrees to defend,
protect and hold harmless, the Indemnitees from any and all loss, claims,
demands, actions, expenses, liability and cost (including attorneys' fees and
expenses) arising out of or in any way related to such removal or storage. Upon
such written termination of Tenant's right to possession and this Lease,
Landlord shall have the right to recover damages for Tenants Default as provided
herein or by Law, including the following damages provided by California Civil
Code Section 1951.2:

          (1)  the worth at the time of award of the unpaid Rent which had been
earned at the time of termination;

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

          (3) the worth at the time of award of the amount by which the unpaid
Rent for the balance of the term of this Lease after the time of award exceeds
the amount of such Rent loss that Tenant proves could be reasonably avoided; and

          (4)  any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenants failure to perform its obligations under
this Lease or which in the ordinary course of things would be likely to result
therefrom. The word "rent" as used in this Section 11.02 shall have the same
meaning as the defined term Rent in this Lease. The "worth at the time of award"
of the amount referred to in clauses (1) and (2) above is computed by allowing
interest at the Default Rate. The worth at the time of award of the amount
referred to in clause (3) above is computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of award
plus one percent (1%). For the purpose of determining unpaid Rent under clause
(3) above, the monthly Rent reserved in this Lease shall be deemed to be the sum
of the Monthly Base Rent, and monthly Storage Space Rent, if any, and the
amounts last

                                       38


payable by Tenant as Rent Adjustments for the calendar year in which Landlord
terminated this Lease as provided hereinabove.

       (c) Even if Tenant is in Default and/or has abandoned the Premises, this
Lease shall continue in effect for so long as Landlord does not terminate
Tenant's right to possession by written notice as provided in Section 11.02(b)
above, and Landlord may enforce all its rights and remedies under this Lease,
including the right to recover Rent as it becomes due under this Lease.  In such
event, Landlord shall have all of the rights and remedies of a landlord under
California Civil Code Section 1951.4 (lessor may continue Lease in effect after
Tenant's Default and abandonment and recover Rent as it becomes due, if Tenant
has the right to sublet or assign, subject only to reasonable limitations), or
any successor statute.  During such time as Tenant is in Default, if Landlord
has not terminated this Lease by written notice and if Tenant requests
Landlord's consent to an assignment of this Lease or a sublease of the Premises,
subject to Landlord's option to recapture pursuant to Section 10.02, Landlord
shall not unreasonably withhold its consent to such assignment or sublease.
Tenant acknowledges and agrees that the provisions of Article Ten shall be
deemed to constitute reasonable limitations of Tenant's right to assign or
sublet.  Tenant acknowledges and agrees that in the absence of written notice
pursuant to Section 11.02(b) above terminating Tenant's right to possession, no
other act of Landlord shall constitute a termination of Tenant's right to
possession or an acceptance of Tenant's surrender of the Premises, including
acts of maintenance or preservation or efforts to relet the Premises or the
appointment of a receiver upon initiative of Landlord to protect Landlord's
interest under this Lease or the withholding of consent to a subletting or
assignment, or terminating a subletting or assignment, if in accordance with
other provisions of this Lease.

       (d) In the event that Landlord seeks an injunction with respect to a
breach or threatened breach by Tenant of any of the covenants, conditions or
provisions of this Lease, Tenant agrees to pay the premium for any bond required
in connection with such injunction.

       (e) Tenant hereby waives any and all rights to relief from forfeiture,
redemption or reinstatement granted by Law (including California Civil Code of
Procedure Sections 1174 and 1179) in the event of Tenant being evicted or
dispossessed for any cause or in the event of Landlord obtaining possession of
the Premises by reason of Tenants Default or otherwise;

       (f) Notwithstanding any other provision of this Lease, a notice to Tenant
given under this Article and Article Twenty-four of this Lease or given pursuant
to California Code of Civil Procedure Section 1161, and any notice served by
mail shall be deemed served, and the requisite waiting period deemed to begin
under said Code of Civil Procedure Section upon mailing, without any additional
waiting requirement under Code of Civil Procedure Section 1011 et seq. or by
other Law.  For purposes of Code of Civil Procedure Section 1162, Tenant's
"place of residence", "usual place of business", "the

                                       39


property" and "the place where the property is situated" shall mean and be the
Premises, whether or not Tenant has vacated same at the time of service.

       (g) The voluntary or other surrender or termination of this Lease, or a
mutual termination or cancellation thereof, shall not work a merger and shall
terminate all or any existing assignments, subleases, subtenancies or
occupancies permitted by Tenant, except if and as otherwise specified in writing
by Landlord.

       (h) No delay or omission in the exercise of any right or remedy Landlord
upon any default by Tenant, and no exercise by Landlord of its rights pursuant
to Section 26.15 to perform any duty which Tenant fails timely to perform, shall
impair any right or remedy or be construed as a waiver. No provision of this
Lease shall be deemed waived by Landlord unless such waiver is in a writing
signed by Landlord. The waiver by Landlord of any breach of any provision of
this Lease shall not be deemed a waiver of any subsequent breach of the same or
any other provision of this Lease.

11.03  ATTORNEY'S FEES

       In the event any party brings any suit or other proceeding with respect
to the subject matter or enforcement of this Lease, the prevailing party (as
determined by the court, agency or other authority before which such suit or
proceeding is commenced) shall, in addition to such other relief as may be
awarded, be entitled to recover attorneys' fees, expenses and costs of
investigation as actually incurred, including court costs, expert witness fees,
costs and expenses of investigation, and all attorneys' fees, costs and expenses
in any such suit or proceeding (including in any action or participation in or
in connection with any case or proceeding under the Bankruptcy Code, 11 United
States Code Sections 101 et seq., or any successor statutes, in establishing or
                         -- ---
enforcing the right to indemnification, in appellate proceedings, or in
connection with the enforcement or collection of any judgment obtained in any
such suit or proceeding).

11.04  BANKRUPTCY

       The following provisions shall apply in the event of the bankruptcy or
insolvency of Tenant:

       (a) In connection with any proceeding under Chapter 7 of the Bankruptcy
Code where the trustee of Tenant elects to assume this Lease for the purposes of
assigning it, such election or assignment, may only be made upon compliance with
the provisions of (b) and (c) below, which conditions Landlord and Tenant
acknowledge to be commercially reasonable. In the event the trustee elects to
reject this Lease then Landlord shall immediately be entitled to possession of
the Premises without further obligation to Tenant or the trustee.

                                       40


       (b) Any election to assume this Lease under Chapter 11 or 13 of the
Bankruptcy Code by Tenant as debtor-in-possession or by Tenants trustee (the
"Electing Party") must provide for:

           The Electing Party to cure or provide to Landlord adequate
           assurance that it will cure all monetary defaults under
           this Lease within fifteen (15) days from the date of
           assumption and it will cure all nonmonetary defaults under
           this Lease within thirty (30) days from the date of
           assumption. Landlord and Tenant acknowledge such condition
           to be commercially reasonable.

       (c) If the Electing Party has assumed this Lease or elects to assign
Tenant's interest under this Lease to any other person, such interest may be
assigned only if the intended assignee has provided adequate assurance of future
performance (as herein defined), of all of the obligations imposed on Tenant
under this Lease.

           For the purposes hereof, "adequate assurance of future
           performance" means that Landlord has ascertained that each
           of the following conditions has been satisfied:

               (i) The assignee has submitted a current financial statement,
           certified by its chief financial officer, which shows a net worth and
           working capital in amounts sufficient to assure the future
           performance by the assignee of Tenants obligations under this Lease;
           and

               (ii) Landlord has obtained consents or waivers from any third
           parties which may be required under a lease, mortgage, financing
           arrangement, or other agreement by which Landlord is bound, to enable
           Landlord to permit such assignment.

       (d) Landlord's acceptance of rent or any other payment from any trustee,
receiver, assignee, person, or other entity will not be deemed to have waived,
or waive, the requirement of Landlord's consent, Landlord's right to terminate
this Lease for any transfer of Tenant's interest under this Lease without such
consent, or Landlord's claim for any amount of Rent due from Tenant.

11.05  LANDLORD'S DEFAULT

       Landlord shall be in default hereunder in the event Landlord has not
begun and pursued with reasonable diligence the cure of any failure of Landlord
to meet its obligations hereunder within thirty (30) days after the receipt by
Landlord of written notice from Tenant of the alleged failure to perform. In no
event shall Tenant have the right to terminate or rescind this Lease as a result
of Landlord's default as to any covenant or agreement contained in this Lease.
Tenant hereby waives such remedies of

                                       41


termination and rescission and hereby agrees that Tenant's remedies for default
hereunder and for breach of any promise or inducement shall be limited to a suit
for damages and/or injunction. In addition, Tenant hereby covenants that, prior
to the exercise of any such remedies, it will give Mortgagee notice and a
reasonable time to cure any default by Landlord.

                                ARTICLE TWELVE
                             SURRENDER OF PREMISES

12.1.  IN GENERAL

     Upon the Termination Date, Tenant shall surrender and vacate the Premises
immediately and deliver possession thereof to Landlord in (i) a clean, good and
tenantable condition, ordinary wear and tear, and damage caused by casualty
(subject to the terms of Article 14) or by Landlord excepted, and (ii) full
compliance with law, including without limitation, Tenant's having delivered to
Landlord a Business Closure Report issued by the County of San Mateo Department
of Environmental Health, and a Radioactive Material License Termination issued
by the appropriate governmental authority. Tenant shall deliver to Landlord all
keys to the Premises. Tenant shall remove from the Premises all movable personal
property of Tenant and Tenant's trade fixtures (including without limitation,
any autoclaves, hoods, animal facility, cold rooms, and generators, the costs of
which were not paid for by any portion of Landlord's Maximum Contribution),
including, subject to Section 6.04, cabling for any of the foregoing. Tenant
shall be entitled to remove such Tenant Additions which at the time of their
installation Landlord and Tenant agreed may be removed by Tenant. Tenant shall
also remove such other Tenant Additions as required by Landlord, including any
Tenant Additions containing Hazardous Materials. Tenant immediately shall repair
all damage resulting from removal of any of Tenant's property, furnishings or
Tenant Additions, shall close all floor, ceiling and roof openings and shall
restore the Premises to a tenantable condition as reasonably determined by
Landlord. If any of the Tenant Additions which were installed by Tenant involved
the lowering of ceilings, raising of floors or the installation of specialized
wall or floor coverings or lights, then Tenant shall also be obligated to return
such surfaces to their condition prior to the commencement of this Lease. In the
event possession of the Premises is not delivered to Landlord when required
hereunder, or if Tenant shall fail to remove those items described above,
Landlord may (but shall not be obligated to), at Tenant's expense, remove any of
such property and store, sell or otherwise deal with such property as provided
in Section 11.02(b), including the waiver and indemnity obligations provided in
that Section, and undertake, at Tenant's expense, such restoration work as
Landlord deems necessary or advisable.

                                       42


12.02  LANDLORD'S RIGHTS

     All property which may be removed from the Premises by Landlord shall be
conclusively presumed to have been abandoned by Tenant and Landlord may deal
with such property as provided in Section 11.02(b), including the waiver and
indemnity obligations provided in that Section. Tenant shall also reimburse
Landlord for all costs and expenses incurred by Landlord in removing any of
Tenant Additions which Tenant was required to remove and in restoring the
Premises to the condition required by this Lease at the Termination Date.

                               ARTICLE THIRTEEN
                                 HOLDING OVER

     Tenant shall pay Landlord the greater of (i) double the monthly Rent
payable for the month immediately preceding the holding over (including
increases for Rent Adjustments which Landlord may reasonably estimate) or, (ii)
double the fair market rental value of the Premises as reasonably determined by
Landlord for each month or portion thereof that Tenant retains possession of the
Premises, or any portion thereof, after the Termination Date (without reduction
for any partial month that Tenant retains possession). Tenant shall also pay all
damages sustained by Landlord by reason of such retention of possession. The
provisions of this Article shall not constitute a waiver by Landlord of any re-
entry rights of Landlord and Tenant's continued occupancy of the Premises shall
be as a tenancy in sufferance.

                               ARTICLE FOURTEEN
                       DAMAGE BY FIRE OR OTHER CASUALTY

14.01  SUBSTANTIAL UNTENANTABILITY

     (a)  If any fire or other casualty (whether insured or uninsured) renders
all or a substantial portion of the Premises or the Building untenantable,
Landlord shall, with reasonable promptness after the occurrence of such damage,
estimate the length of time that will be required to substantially complete the
repair and restoration and shall by notice advise Tenant of such estimate
("Landlord's Notice"). If Landlord estimates that the amount of time required to
substantially complete such repair and restoration will exceed one hundred
eighty (180) days from the date such damage occurred, then Landlord, or Tenant
if all or a substantial portion of the Premises is rendered untenantable, shall
have the right to terminate this Lease as of the date of such damage upon giving
written notice to the other at any time within twenty (20) days after delivery
of Landlord's Notice, provided that if Landlord so chooses, Landlord's Notice
may also constitute such notice of termination.

     (b)  In the event that the Building is damaged or destroyed to the extent
of more than twenty-five percent (25%) of its replacement cost or to any extent
if no insurance

                                       43


proceeds or insufficient insurance proceeds are receivable by Landlord, or if
the buildings at the Project shall be damaged to the extent of fifty percent
(50%) or more of the replacement value or to any extent if no insurance proceeds
or insufficient insurance proceeds are receivable by Landlord, and regardless of
whether or not the Premises be damaged, Landlord may elect by written notice to
Tenant given within thirty (30) days after the occurrence of the casualty to
terminate this Lease in lieu of so restoring the Premises, in which event this
Lease shall terminate as of the date specified in Landlord's notice, which date
shall be no later than sixty (60) days following the date of Landlord's notice.

     (c)  Unless this Lease is terminated as provided in the preceding
Subsections 14.01 (a) and (b), Landlord shall proceed with reasonable promptness
to repair and restore the Premises to its condition as existed prior to such
casualty, subject to reasonable delays for insurance adjustments and Force
Majeure delays, and also subject to zoning Laws and building codes then in
effect. Landlord shall have no liability to Tenant, and Tenant shall not be
entitled to terminate this Lease if such repairs and restoration are not in fact
completed within the time period estimated by Landlord so long as Landlord shall
proceed with reasonable diligence to complete such repairs and restoration.

     (d)  Tenant acknowledges that Landlord shall be entitled to the full
proceeds of any insurance coverage, whether carried by Landlord or Tenant, for
damages to the Premises, except for those proceeds of Tenant's insurance of its
own personal property and equipment which would be removable by Tenant at the
Termination Date. All such insurance proceeds shall be payable to Landlord
whether or not the Premises are to be repaired and restored, provided, however,
if this Lease is not terminated and the parties proceed to repair and restore
Tenant Additions at Tenant's cost, to the extent Landlord received proceeds of
Tenant' s insurance covering Tenant Additions, such proceeds shall be applied to
reimburse Tenant for its cost of repairing and restoring Tenant Additions.

     (e)  Notwithstanding anything in this Article Fourteen to the contrary: (i)
Landlord shall have no duty pursuant to this Section to repair or restore any
portion of any Tenant Additions or to expend for any repair or restoration of
the Premises or Building amounts in excess of insurance proceeds paid to
Landlord and available for repair or restoration; and (ii) Tenant shall not have
the right to terminate this Lease pursuant to this Section if any damage or
destruction was caused by the act or neglect of Tenant, its agent or employees.
Whether or not the Lease is terminated pursuant to this Article Fourteen, in no
event shall Tenant be entitled to any compensation or damages for loss of the
use of the whole or any part of the Premises or for any inconvenience or
annoyance occasioned by any such damage, destruction, rebuilding or restoration
of the Premises or the Building or access thereto.

     (f)  Any repair or restoration of the Premises performed by Tenant shall be
in accordance with the provisions of Article Nine hereof.

                                       44


14.02  INSUBSTANTIAL UNTENANTABILITY

     Unless this Lease is terminated as provided in the preceding Subsections
14.01 (a) and (b), then Landlord shall proceed to repair and restore the
Building or the Premises other than Tenant Additions, with reasonable
promptness, unless such damage is to the Premises and occurs during the last six
(6) months of the Term, in which event either Tenant or Landlord shall have the
right to terminate this Lease as of the date of such casualty by giving written
notice thereof to the other within twenty (20) days after the date of such
casualty. Notwithstanding the foregoing, Landlord's obligation to repair shall
be limited in accordance with the provisions of Section 14.01 above.

14.03  RENT ABATEMENT

     Except for the negligence or willful act of Tenant or its agents,
employees, contractors or invitees, if all or any part of the Premises are
rendered untenantable by fire or other casualty and this Lease is not
terminated, Monthly Base Rent and Rent Adjustments shall abate for that part of
the Premises which is untenantable on a per diem basis from the date of the
casualty until Landlord has Substantially Completed the repair and restoration
work in the Premises which it is required to perform, provided, that as a result
of such casualty, Tenant does not occupy the portion of the Premises which is
untenantable during such period.

14.04  WAIVER OF STATUTORY REMEDIES

     The provisions of this Lease, including this Article Fourteen, constitute
an express agreement between Landlord and Tenant with respect to any and all
damage to, or destruction of, the Premises or the Property or any part of
either, and any Law, including Sections 1932(2) 1933(4), 1941 and 1942 of the
California Civil Code, with respect to any rights or obligations concerning
damage or destruction shall have no application to this Lease or to any damage
to or destruction of all or any part of the Premises or the Property or any part
of either, and are hereby waived.

                                ARTICLE FIFTEEN
                                EMINENT DOMAIN

15.01  TAKING OF WHOLE OR SUBSTANTIAL PART

     In the event the whole or any substantial part of the Building or of the
Premises is taken or condemned by any competent authority for any public use or
purpose (including a deed given in lieu of condemnation) and is thereby rendered
untenantable, this Lease shall terminate as of the date title vests in such
authority or any earlier date on which possession is required to be surrendered
to such authority, and Monthly Base Rent and Rent Adjustments shall be
apportioned as of the Termination Date. Further, if at least twenty-five percent
(25%) of the rentable area of the Project is taken or condemned by

                                       45


any competent authority for any public use or purpose (including a deed given in
lieu of condemnation), and regardless of whether or not the Premises be so taken
or condemned, Landlord may elect by written notice to Tenant to terminate this
Lease as of the date title vests in such authority or any earlier date on which
possession is required to be surrendered to such authority, and Monthly Base
Rent and Rent Adjustments shall be apportioned as of the Termination Date.
Landlord may, without any obligation to Tenant, agree to sell or convey to the
taking authority the Premises, the Building, Tenant's Phase, the Project or any
portion thereof sought by the taking authority, free from this Lease and the
right of Tenant hereunder, without first requiring that any action or proceeding
be instituted or, if instituted, pursued to a judgment. Notwithstanding anything
to the contrary herein set forth, in the event the taking of the Building or
Premises is temporary (for less than the remaining term of the Lease), Landlord
may elect either (i) to terminate this Lease or (ii) permit Tenant to receive
the entire award attributable to the Premises in which case Tenant shall
continue to pay Rent and this Lease shall not terminate.

15.02  TAKING OF PART

     In the event a part of the Building or the Premises is taken or condemned
by any competent authority (or a deed is delivered in lieu of condemnation) and
this Lease is not terminated, the Lease shall be amended to reduce or increase,
as the case may be, the Monthly Base Rent and Tenant's Share to reflect the
Rentable Area of the Premises or Building, as the case may be, remaining after
any such taking or condemnation. Landlord, upon receipt and to the extent of the
award in condemnation (or proceeds of sale) shall make necessary repairs and
restorations to the Premises (exclusive of Tenant Additions) and to the Building
to the extent necessary to constitute the portion of the Building not so taken
or condemned as a complete architectural and economically efficient unit.
Notwithstanding the foregoing, if as a result of any taking, or a governmental
order that the grade of any street or alley adjacent to the Building is to be
changed and such taking or change of grade makes it necessary or desirable to
substantially remodel or restore the Building or prevents the economical
operation of the Building, Landlord shall have the right to terminate this Lease
upon ninety (90) days prior written notice to Tenant.

15.03  COMPENSATION

     Landlord shall be entitled to receive the entire award (or sale proceeds)
from any such taking, condemnation or sale without any payment to Tenant, and
Tenant hereby assigns to Landlord Tenant's interest, if any, in such award;
provided, however, Tenant shall have the right separately to pursue against the
condemning authority a separate award in respect of the loss, if any, to Tenant
Additions paid for by Tenant without any credit or allowance from Landlord, for
fixtures or personal property of Tenant, or for relocation or business
interruption expenses, so long as there is no diminution of Landlord's award as
a result.

                                       46


                                ARTICLE SIXTEEN
                                   INSURANCE

16.01  TENANT'S INSURANCE

     Tenant, at Tenant's expense, agrees to maintain in force, with a company or
companies acceptable to Landlord, during the Term: (a) Commercial General
Liability Insurance on a primary basis and without any right of contribution
from any insurance carried by Landlord covering the Premises on an occurrence
basis against all claims for personal injury, bodily injury, death and property
damage, including contractual liability covering the indemnification provisions
in this Lease. Such insurance shall be for such limits that are reasonably
required by Landlord from time to time but not less than a combined single limit
of Five Million and No/100 Dollars ($5,000,000.00); (b) Workers' Compensation
and Employers' Liability Insurance to the extent required by and in accordance
with the Laws of the State of California; (c) "All Risks" property insurance in
an amount adequate to cover the full replacement cost of all Tenant Additions to
the Premises, equipment, installations, fixtures and contents of the Premises in
the event of loss; (d) In the event a motor vehicle is to be used by Tenant in
connection with its business operation from the Premises, Comprehensive
Automobile Liability Insurance coverage with limits of not less than Three
Million and No/100 Dollars ($3,000,000.00) combined single limit coverage
against bodily injury liability and property damage liability arising out of the
use by or on behalf of Tenant, its agents and employees in connection with this
Lease, of any owned, non-owned or hired motor vehicles; and (e) such other
insurance or coverages as Landlord reasonably requires.

16.02  FORM OF POLICIES

     Each policy referred to in 16.01 shall satisfy the following requirements.
Each policy shall (i) name Landlord and the Indemnitees as additional insureds
(except Workers' Compensation and Employers' Liability Insurance), (ii) be
issued by one or more responsible insurance companies licensed to do business in
the State of California reasonably satisfactory to Landlord, (iii) where
applicable, provide for deductible amounts satisfactory to Landlord and not
permit co-insurance, (iv) shall provide that such insurance may not be canceled
or amended without thirty (30) days' prior written notice to the Landlord, and
(v) each policy of "All Risks" property insurance shall provide that the policy
shall not be invalidated should the insured waive in writing prior to a loss,
any or all rights of recovery against any other party for losses covered by such
policies. Tenant shall deliver to Landlord, certificates of insurance and at
Landlord's request, copies of all policies and renewals thereof to be maintained
by Tenant hereunder, not less than ten (10) days prior to the Commencement Date
and not less than ten (10) days prior to the expiration date of each policy.

                                       47


16.03  LANDLORD'S INSURANCE

     Landlord agrees to purchase and keep in full force and effect during the
Term hereof, including any extensions or renewals thereof, insurance under
policies issued by insurers of recognized responsibility, qualified to do
business in the State of California on the Building in amounts not less than the
greater of eighty (80%) percent of the then full replacement cost (without
depreciation) of the Building (above foundations and excluding Tenant Additions
to the Premises) or an amount sufficient to prevent Landlord from becoming a
co-insurer under the terms of the applicable policies, against fire and such
other risks as may be included in standard forms of all risk coverage insurance
reasonably available from time to time. Landlord agrees to maintain in force
during the Term, Commercial General Liability Insurance covering the Building on
an occurrence basis against all claims for personal injury, bodily injury, death
and property damage. Such insurance shall be for a combined single limit of Five
Million and No/100 Dollars ($5,000,000.00). Neither Landlord's obligation to
carry such insurance nor the carrying of such insurance shall be deemed to be an
indemnity by Landlord with respect to any claim, liability, loss, cost or
expense due, in whole or in part, to Tenant's negligent acts or omissions or
willful misconduct. Without obligation to do so, Landlord may, in its sole
discretion from time to time, carry insurance in amounts greater and/or for
coverage additional to the coverage and amounts set forth above.

16.04  WAIVER OF SUBROGATION

     (a)  Landlord agrees that, if obtainable at no, or minimal, additional
cost, and so long as the same is permitted under the laws of the State of
California, it will include in its "All Risks" policies appropriate clauses
pursuant to which the insurance companies (i) waive all right of subrogation
against Tenant with respect to losses payable under such policies and/or (ii)
agree that such policies shall not be invalidated should the insured waive in
writing prior to a loss any or all right of recovery against any party for
losses covered by such policies.

     (b)  Tenant agrees to include, if obtainable at no, or minimal, additional
cost, and so long as the same is permitted under the laws of the State of
California, in its "All Risks" insurance policy or policies on Tenant Additions
to the Premises, whether or not removable, and on Tenant's furniture,
furnishings, fixtures and other property removable by Tenant under the
provisions of this Lease appropriate clauses pursuant to which the insurance
company or companies (i) waive the right of subrogation against Landlord and/or
any tenant of space in the Building with respect to losses payable under such
policy or policies and/or (ii) agree that such policy or policies shall not be
invalidated should the insured waive in writing prior to a loss any or all right
of recovery against any party for losses covered by such policy or policies. If
Tenant is unable to obtain in such policy or policies either of the clauses
described in the preceding sentence, Tenant shall, if legally possible and
without necessitating a change in insurance carriers, have Landlord named in
such policy or policies as an additional insured. If Landlord shall be named as

                                       48


an additional insured in accordance with the foregoing, Landlord agrees to
endorse promptly to the order of Tenant, without recourse, any check, draft, or
order for the payment of money representing the proceeds of any such policy or
representing any other payment growing out of or connected with said policies,
and Landlord does hereby irrevocably waive any and all rights in and to such
proceeds and payments.

     (c)  Provided that Landlord's right of full recovery under its policy or
policies aforesaid is not adversely affected or prejudiced thereby, Landlord
hereby waives any and all right of recovery which it might otherwise have
against Tenant, its servants, agents and employees, for loss or damage occurring
to the Real Property and the fixtures, appurtenances and equipment therein, to
the extent the same is covered by Landlord's insurance, notwithstanding that
such loss or damage may result from the negligence or fault of Tenant, its
servants, agents or employees. Provided that Tenant's right of full recovery
under its aforesaid policy or policies is not adversely affected or prejudiced
thereby, Tenant hereby waives any and all right of recovery which it might
otherwise have against Landlord, its servants, and employees and against every
other tenant in the Real Property who shall have executed a similar waiver as
set forth in this Section 16.04 (c) for loss or damage to Tenant Additions,
whether or not removable, and to Tenant's furniture, furnishings, fixtures and
other property removable by Tenant under the provisions hereof to the extent the
same is covered or coverable by Tenant's insurance required under this Lease,
notwithstanding that such loss or damage may result from the negligence or fault
of Landlord, its servants, agents or employees, or such other tenant and the
servants, agents or employees thereof.

     (d)  Landlord and Tenant hereby agree to advise the other promptly if the
clauses to be included in their respective insurance policies pursuant to
subparagraphs (a) and (b) above cannot be obtained on the terms hereinbefore
provided and thereafter to furnish the other with a certificate of insurance or
copy of such policies showing the naming of the other as an additional insured,
as aforesaid. Landlord and Tenant hereby also agree to notify the other promptly
of any cancellation or change of the terms of any such policy which would affect
such clauses or naming. All such policies which name both Landlord and Tenant as
additional insureds shall, to the extent obtainable, contain agreements by the
insurers to the effect that no act or omission of any additional insured will
invalidate the policy as to the other additional insureds.

16.05  NOTICE OF CASUALTY

     Tenant shall give Landlord notice in case of a fire or accident in the
Premises promptly after Tenant is aware of such event.

                                       49


                               ARTICLE SEVENTEEN
                        WAIVER OF CLAIMS AND INDEMNITY

17.01  WAIVER OF CLAIMS

     To the extent permitted by Law, Tenant releases the Indemnitees from, and
waives all claims for, damage to person or property sustained by the Tenant or
any occupant of the Premises or the Property resulting directly or indirectly
from any existing or future condition, defect, matter or thing in and about the
Premises or the Property or any part of either or any equipment or appurtenance
therein, or resulting from any accident in or about the Premises or the
Property, or resulting directly or indirectly from any act or neglect of any
tenant or occupant of the Property or of any other person, including Landlord's
agents and servants, except to the extent caused by the willful and wrongful act
of any of the Indemnitees. To the extent permitted by Law, Tenant hereby waives
any consequential damages or claims for inconvenience or loss of business,
rents, or profits as a result of such injury or damage, whether or not caused by
the willful and wrongful act of any of the Indemnitees. If any such damage,
whether to the Premises or the Property or any part of either, or whether to
Landlord or to other tenants in the Property, results from any act or neglect of
Tenant, its employees, servants, agents, contractors, invitees or customers,
Tenant shall be liable therefor and Landlord may, at Landlord's option, repair
such damage and Tenant shall, upon demand by Landlord, as payment of additional
Rent hereunder, reimburse Landlord within ten (10) days of demand for the total
cost of such repairs, in excess of amounts, if any, paid to Landlord under
insurance covering such damages. Tenant shall not be liable for any such damage
caused by its acts or neglect if Landlord or a tenant has recovered the full
amount of the damage from proceeds of insurance policies and the insurance
company has waived its right of subrogation against Tenant.

17.02  INDEMNITY BY TENANT

     To the extent permitted by Law, Tenant hereby indemnifies, and agrees to
protect, defend and hold the Indemnitees harmless, against any and all actions,
claims, demands, liability, costs and expenses, including attorneys' fees and
expenses for the defense thereof, arising from Tenant' s occupancy of the
Premises, from the undertaking of any Tenant Additions or repairs to the
Premises, from the conduct of Tenant's business on the Premises, or from any
breach or default on the part of Tenant in the performance of any covenant or
agreement on the part of Tenant to be performed pursuant to the terms of this
Lease, or from any willful act or negligence of Tenant, its agents, contractors,
servants, employees, customers or invitees, in or about the Premises or the
Property or any part of either. In case of any action or proceeding brought
against the Indemnitees by reason of any such claim, upon notice from Landlord,
Tenant covenants to defend such action or proceeding by counsel chosen by
Landlord, in Landlord's sole discretion. Landlord reserves the right to settle,
compromise or dispose of any and all actions, claims and demands related to the
foregoing indemnity. The foregoing indemnity shall not operate

                                       50


to relieve Indemnitees of liability to the extent such liability is caused by
the active negligence, and willful and wrongful act of Indemnitees. Further, the
foregoing indemnity is subject to and shall not diminish any waivers in effect
in accordance with Section 16.04 by Landlord or its insurers to the extent of
amounts, if any, paid to Landlord under its "All-Risks" property insurance.

                               ARTICLE EIGHTEEN
                             RULES AND REGULATIONS

18.01  RULES

     Tenant agrees for itself and for its subtenants, employees, agents, and
invitees to comply with all rules and regulations for use of the Premises, the
Building, the Phase and the Project imposed by Landlord, as the same may be
revised from time to time, including the following: (a) Tenant shall comply with
all of the requirements of Landlord's emergency response plan, as the same may
be amended from time to time; and (b) Tenant shall not place any furniture,
furnishings, fixtures or equipment in the Premises in a manner so as to obstruct
the windows of the Premises to cause the Building, in Landlord's good faith
determination, to appear unsightly from the exterior. Such rules and regulations
are and shall be imposed for the cleanliness, good appearance, proper
maintenance, good order and reasonable use of the Premises, the Building, the
Phase and the Project and as may be necessary for the enjoyment of the Building
and the Project by all tenants and their clients, customers, and employees.

18.02  ENFORCEMENT

     Nothing in this Lease shall be construed to impose upon the Landlord any
duty or obligation to enforce the rules and regulations as set forth above or as
hereafter adopted, or the terms, covenants or conditions of any other lease as
against any other tenant, and the Landlord shall not be liable to the Tenant for
violation of the same by any other tenant, its servants, employees, agents,
visitors or licensees. Landlord shall use reasonable efforts to enforce the
rules and regulations of the Building in a uniform and non-discriminatory
manner.

                               ARTICLE NINETEEN
                          LANDLORD'S RESERVED RIGHTS

     Landlord shall have the following rights exercisable without notice to
Tenant and without liability to Tenant for damage or injury to persons, property
or business and without being deemed an eviction or disturbance of Tenant's use
or possession of the Premises or giving rise to any claim for offset or
abatement of Rent: (1) to change the Building's name or street address upon
thirty (30) days' prior written notice to Tenant; (2) to install, affix and
maintain all signs on the exterior and/or interior of the Building; (3) to
designate and/or approve prior to installation, all types of signs, window
shades,

                                       51


blinds, drapes, awnings or other similar items, and all internal lighting that
may be visible from the exterior of the Premises; (4) upon twenty-four (24)
hours notice to Tenant, to display the Premises to prospective purchasers at
reasonable hours at any time during the Term and to prospective tenants at
reasonable hours during the last twelve (12) months of the Term; (5) to grant to
any party the exclusive right to conduct any business or render any service in
or to the Building, provided such exclusive right shall not operate to prohibit
Tenant from using the Premises for the purpose permitted hereunder; (6) to
change the arrangement and/or location of entrances or passageways, doors and
doorways, corridors, elevators, stairs, washrooms or public portions of the
Building, and to close entrances, doors, corridors, elevators or other
facilities, provided that such action shall not materially and adversely
interfere with Tenant's access to the Premises or the Building; (7) to have
access for Landlord and other tenants of the Building to any mail chutes and
boxes located in or on the Premises as required by any applicable rules of the
United States Post Office; and (8) to close the Building after Standard
Operating Hours, except that Tenant and its employees and invitees shall be
entitled to admission at all times, under such regulations as Landlord
prescribes for security purposes.

                                ARTICLE TWENTY
                             ESTOPPEL CERTIFICATE

20.01  IN GENERAL

       Within fifteen (15) days after request therefor by Landlord, Mortgagee or
any prospective mortgagee or owner, Tenant agrees as directed in such request to
execute an Estoppel Certificate in recordable form, binding upon Tenant,
certifying (i) that this Lease is unmodified and in full force and effect (or if
there have been modifications, a description of such modifications and that this
Lease as modified is in full force and effect); (ii) the dates to which Rent has
been paid; (iii) that Tenant is in the possession of the Premises if that is the
case; (iv) that Landlord is not in default under this Lease, or, if Tenant
believes Landlord is in default, the nature thereof in detail; (v) that Tenant
has no offsets or defenses to the performance of its obligations under this
Lease (or if Tenant believes there are any offsets or defenses, a full and
complete explanation thereof); (vi) that the Premises have been completed in
accordance with the terms and provisions hereof, that Tenant has accepted the
Premises and the condition thereof and of all improvements thereto and has no
claims against Landlord or any other party with respect thereto; (vii) that if
an assignment of rents or leases has been served upon the Tenant by a Mortgagee,
Tenant will acknowledge receipt thereof and agree to be bound by the provisions
thereof; (viii) that Tenant will give to the Mortgagee copies of all notices
required or permitted to be given by Tenant to Landlord; and (ix) to any other
information reasonably requested.

                                       52



20.02  ENFORCEMENT

       In the event that Tenant fails to deliver an Estoppel Certificate, then
such failure shall be a Default for which there shall be no cure or grace
period. In addition to any other remedy available to Landlord, Landlord may
impose a charge equal to $500.00 for each day that Tenant fails to deliver an
Estoppel Certificate.

                              ARTICLE TWENTY-ONE
                             RELOCATION OF TENANT

                             Intentionally Deleted


                              ARTICLE TWENTY-TWO
                              REAL ESTATE BROKERS

       Tenant represents that, except for the broker(s) listed in Section 1.01
(19), Tenant has not dealt with any real estate broker, sales person, or finder
in connection with this Lease, and no such person initiated or participated in
the negotiation of this Lease, or showed the Premises to Tenant. Tenant hereby
agrees to indemnify, protect, defend and hold Landlord and the Indemnitees,
harmless from and against any and all liabilities and claims for commissions and
fees arising out of a breach of the foregoing representation. Landlord agrees to
pay any commission to which Landlord's Broker listed in Section 1.01(19) is
entitled in connection with this Lease pursuant to Landlord's written agreement
with such broker. Landlord and Tenant agree that any commission payable to
Tenant's Broker shall be paid by Tenant except to the extent Tenant's Broker and
Landlord's Broker have entered into a separate agreement between themselves to
share the commission paid to Landlord's Broker by Landlord.

                             ARTICLE TWENTY-THREE
                             MORTGAGEE PROTECTION

23.01  SUBORDINATION AND ATTORNMENT

       (a) This Lease is and shall be expressly subject and subordinate at all
times to (i) any ground or underlying lease of the Real Property, now or
hereafter existing, and all amendments, extensions, renewals and modifications
to any such lease, and (ii) the lien of any mortgage or trust deed now or
hereafter encumbering fee title to the Real Property and/or the leasehold estate
under any such lease, and all amendments, extensions, renewals, replacements and
modifications of such mortgage or trust deed and/or the obligation secured
thereby, unless such ground lease or ground lessor, or mortgage, trust deed or
Mortgagee, expressly provides or elects that the Lease shall be superior to such
lease or mortgage or trust deed. If any such mortgage or trust deed is
foreclosed (including any sale of the Real Property pursuant to a power of
sale), or if any such lease

                                       53


is terminated, upon request of the Mortgagee or ground lessor, as the case may
be, Tenant shall attorn to the purchaser at the foreclosure sale or to the
ground lessor under such lease, as the case may be, provided, however, that such
purchaser or ground lessor shall not be (i) bound by any payment of Rent for
more than one month in advance except payments in the nature of security for the
performance by Tenant of its obligations under this Lease; (ii) subject to any
offset, defense or damages arising out of a default of any obligations of any
preceding Landlord; or (iii) bound by any amendment or modification of this
Lease made without the written consent of the Mortgagee or ground lessor; or
(iv) liable for any security deposits not actually received in cash by such
purchaser or ground lessor. This subordination shall be self-operative and no
further certificate or instrument of subordination need be required by any such
Mortgagee or ground lessor. In confirmation of such subordination, however,
Tenant shall execute promptly any reasonable certificate or instrument that
Landlord, Mortgagee or ground lessor may request. Upon request by such successor
in interest, Tenant shall execute and deliver reasonable instruments confirming
the attornment provided for herein.

       (b) Notwithstanding any provision of the Lease to the contrary, provided
that: (i) Tenant has executed and delivered a subordination, non-disturbance and
attornment agreement substantially in the form of Exhibit F hereto, with such
changes thereto as any mortgagee, trustee, beneficiary or holder of other
security interest ("Mortgagee") may reasonably require ("Non-disturbance
Agreement") and complies with the provisions thereof, and (ii) Tenant is not in
default under this Lease, no foreclosure, sale pursuant to power of sale or
conveyance by deed in lieu of foreclosure shall affect Tenant's rights under
this Lease, except to the extent provided by such Non-Disturbance Agreement.  If
Tenant fails to execute and deliver any Non-disturbance Agreement within fifteen
(15) days of a request therefor from Landlord, Tenant hereby constitutes
Landlord as Tenant's attorney-in-fact to execute and deliver such instrument.
Landlord's inability to obtain the signature of any Mortgagee on any such Non-
disturbance Agreement shall not constitute a default by Landlord under this
Lease, but so long as default by Tenant under this Lease is not the reason for
Landlord's inability to obtain such signature, any such lessor or Mortgagee
shall be deemed to have elected that this Lease be superior to the lease,
mortgage or deed of trust in question, and Tenant shall, at the request of such
lessor, mortgagee or beneficiary (or purchaser at any sale pursuant to the
mortgage or deed of trust), attorn to any such party or enter into a new lease
with such party (as Landlord) for the balance of the Term then remaining
hereunder upon the same terms and conditions as those herein.

23.02  MORTGAGEE PROTECTION

       Tenant agrees to give any Mortgagee or ground lessor, by registered or
certified mail, a copy of any notice of default served upon the Landlord by
Tenant, provided that prior to such notice Tenant has received notice (by way of
service on Tenant of a copy of an assignment of rents and leases, or otherwise)
of the address of such Mortgagee or

                                       54


ground lessor. Tenant further agrees that if Landlord shall have failed to cure
such default within the time provided for in this Lease, then, the Mortgagee or
ground lessor shall have an additional thirty (30) days after receipt of notice
thereof within which to cure such default or if such default cannot be cured
within that time, then such additional notice time as may be necessary, if,
within such thirty (30) days, any Mortgagee or ground lessor has commenced and
is diligently pursuing the remedies necessary to cure such default (including
commencement of foreclosure proceedings or other proceedings to acquire
possession of the Real Property, if necessary to effect such cure). Such period
of time shall be extended by any period within which such Mortgagee or ground
lessor is prevented from commencing or pursuing such foreclosure proceedings or
other proceedings to acquire possession of the Real Property by reason of
Landlord's bankruptcy. Until the time allowed as aforesaid for Mortgagee or
ground lessor to cure such defaults has expired without cure, Tenant shall have
no right to, and shall not, terminate this Lease on account of default. This
Lease may not be modified or amended so as to reduce the Rent or shorten the
Term, or so as to adversely affect in any other respect to any material extent
the rights of the Landlord, nor shall this Lease be canceled or surrendered,
without the prior written consent, in each instance, of the ground lessor or the
Mortgagee.

                              ARTICLE TWENTY-FOUR
                                    NOTICES

       (a) All notices, demands or requests provided for or permitted to be
given pursuant to this Lease must be in writing and shall be personally
delivered, sent by Federal Express or other reputable overnight courier service,
or mailed by first class, registered or certified United States mail, return
receipt requested, postage prepaid.

       (b) All notices, demands or requests to be sent pursuant to this Lease
shall be deemed to have been properly given or served by delivering or sending
the same in accordance with this Section, addressed to the parties hereto at
their respective addresses listed in Sections 1.01 (2) and (3).

       (c) Notices, demands or requests sent by mail or overnight courier
service as described above shall be effective upon deposit in the mail or with
such courier service. However, the time period in which a response to any such
notice, demand or request must be given shall commence to run from (i) in the
case of delivery by mail, the date of receipt on the return receipt of the
notice, demand or request by the addressee thereof, or (ii) in the case of
delivery by Federal Express or other overnight courier service, the date of
acceptance of delivery by an employee, officer, director or partner of Landlord
or Tenant. Rejection or other refusal to accept or the inability to deliver
because of changed address of which no notice was given, as indicated by advice
from Federal Express or other overnight courier service or by mail return
receipt, shall be deemed to be receipt of notice, demand or request sent.
Notices may also be served by personal service upon any

                                       55


officer, director or partner of Landlord or Tenant, and shall be effective upon
such service.

       (d) By giving to the other party at least thirty (30) days written notice
thereof, either party shall have the right from time to time during the term of
this Lease to change their respective addresses for notices, statements, demands
and requests, provided such new address shall be within the United States of
America.

                              ARTICLE TWENTY-FIVE
                               EXERCISE FACILITY

       Tenant agrees to inform all employees of Tenant of the following: (i) the
exercise facility is available for the use of the employees of tenants of the
Project only and for no other person; (ii) use of the facility is at the risk of
Tenant or Tenant's employees, and all users must sign a release; (iii) the
facility is unsupervised; and (iv) users of the facility must report any needed
equipment maintenance or any unsafe conditions to the Landlord immediately.
Landlord may discontinue providing such facility at Landlord's sole option at
any time without incurring any liability.  As a condition to the use of the
exercise facility, Tenant and each of Tenant's employees that uses the exercise
facility shall first sign a written release in form and substance acceptable to
Landlord.  Landlord may change the rules and/or hours of the exercise facility
at any time, and Landlord reserves the right to deny access to the exercise
facility to anyone due to misuse of the facility or noncompliance with rules and
regulations of the facility.  To the extent permitted by Law, Tenant hereby
indemnifies, and agrees to protect, defend and hold the Indemnitees harmless,
against any and all actions, claims, demands, liability, costs and expenses,
including attorneys' fees and expenses for the defense thereof, arising from use
of the exercise facility in the Project by Tenant, Tenant's employees or
invitees.  In case of any action or proceeding brought against the Indemnitees
by reason of any such claim, upon notice from Landlord, Tenant covenants to
defend such action or proceeding by counsel chosen by Landlord, in Landlord's
sole discretion.  Landlord reserves the right to settle, compromise or dispose
of any and all actions, claims and demands related to the foregoing indemnity.

                              ARTICLE TWENTY-SIX
                                 MISCELLANEOUS

26.01  LATE CHARGES

       (a) All payments required hereunder (other than the Monthly Base Rent,
Rent Adjustments, and Rent Adjustment Deposits, which shall be due as
hereinbefore provided) to Landlord shall be paid within ten (10) days after
Landlord's demand therefor. All such amounts (including Monthly Base Rent, Rent
Adjustments, and Rent Adjustment Deposits) not paid when due shall bear interest
from the date due until the date paid at the Default Rate in effect on the date
such payment was due.

                                       56


       (b) In the event Tenant is more than five (5) days late in paying any
installment of Rent due under this Lease, Tenant shall pay Landlord a late
charge equal to five percent (5%) of the delinquent installment of Rent.  The
parties agree that (i) such delinquency will cause Landlord to incur costs and
expenses not contemplated herein, the exact amount of which will be difficult to
calculate, including the cost and expense that will be incurred by Landlord in
processing each delinquent payment of rent by Tenant, and (ii) the amount of
such late charge represents a reasonable estimate of such costs and expenses and
that such late charge shall be paid to Landlord for each delinquent payment in
addition to all Rent otherwise due hereunder.  The parties further agree that
the payment of late charges and the payment of interest provided for in
subparagraph (a) above are distinct and separate from one another in that the
payment of interest is to compensate Landlord for its inability to use the money
improperly withheld by Tenant, while the payment of late charges is to
compensate Landlord for its additional administrative expenses in handling and
processing delinquent payments.

       (c) Payment of interest at the Default Rate and/or of late charges shall
not excuse or cure any default by Tenant under this Lease, nor shall the
foregoing provisions of this Article or any such payments prevent Landlord from
exercising any right or remedy available to Landlord upon Tenant's failure to
pay Rent when due, including the right to terminate this Lease.

26.02  NO JURY TRIAL; VENUE; JURISDICTION

       Each party hereto (which includes any assignee, successor, heir or
personal representative of a party) shall not seek a jury trial, hereby waives
trial by jury, and hereby further waives any objection to venue in the County in
which the Project is located, and agrees and consents to personal jurisdiction
of the courts of the State of California, in any action or proceeding or
counterclaim brought by any party hereto against the other on any matter
whatsoever arising out of or in any way connected with this Lease, the
relationship of Landlord and Tenant, Tenant's use or occupancy of the Premises,
or any claim of injury or damage, or the enforcement of any remedy under any
statute, emergency or otherwise, whether any of the foregoing is based on this
Lease or on tort law. No party will seek to consolidate any such action in which
a jury has been waived with any other action in which a jury trial cannot or has
not been waived. It is the intention of the parties that these provisions shall
be subject to no exceptions. By execution of this Lease the parties agree that
this provision may be filed by any party hereto with the clerk or judge before
whom any action is instituted, which filing shall constitute the written consent
to a waiver of jury trial pursuant to and in accordance with Section 631 of the
California Code of Civil Procedure. No party has in any way agreed with or
represented to any other party that the provisions of this Section will not be
fully enforced in all instances. The provisions of this Section shall survive
the expiration or earlier termination of this Lease.

                                       57


26.03  DEFAULT UNDER OTHER LEASE

       It shall be a Default under this Lease if Tenant or any Affiliate holding
any other lease with Landlord for premises in the Building defaults under such
lease and as a result thereof such lease is terminated or terminable.

26.04  OPTION

       This Lease shall not become effective as a lease or otherwise until
executed and delivered by both Landlord and Tenant. The submission of the Lease
to Tenant does not constitute a reservation of or option for the Premises, but
when executed by Tenant and delivered to Landlord, the Lease shall constitute an
irrevocable offer by Tenant in effect for fifteen (15) days to lease the
Premises on the terms and conditions herein contained.

26.05  TENANT AUTHORITY

       Tenant represents and warrants to Landlord that it has full authority and
power to enter into and perform its obligations under this Lease, that the
person executing this Lease is fully empowered to do so, and that no consent or
authorization is necessary from any third party. Landlord may request that
Tenant provide Landlord evidence of Tenant's authority.

26.06  ENTIRE AGREEMENT

       This Lease, the Exhibits and Rider 2 attached hereto contain the entire
agreement between Landlord and Tenant concerning the Premises and there are no
other agreements, either oral or written, and no other representations or
statements, either oral or written, on which Tenant has relied.  This Lease
shall not be modified except by a writing executed by Landlord and Tenant.

26.07  MODIFICATION OF LEASE FOR BENEFIT OF MORTGAGEE

       If Mortgagee of Landlord requires a modification of this Lease which
shall not result in any increased cost or expense to Tenant or in any other
substantial and adverse change in the rights and obligations of Tenant
hereunder, then Tenant agrees that the Lease may be so modified.

26.08  EXCULPATION

       Tenant agrees, on its behalf and on behalf of its successors and assigns,
that any liability or obligation under this Lease shall only be enforced against
Landlord's equity interest in the Property up to a maximum of Five Million
Dollars ($5,000,000.00) and in no event against any other assets of the
Landlord, or Landlord's officers or directors or partners, and that any
liability of Landlord with respect to this Lease shall be so limited and Tenant
shall not be entitled to any judgment in excess of such amount.

                                       58


26.09  ACCORD AND SATISFACTION

       No payment by Tenant or receipt by Landlord of a lesser amount than any
installment or payment of Rent due shall be deemed to be other than on account
of the amount due, and no endorsement or statement on any check or any letter
accompanying any check or payment of Rent shall be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such installment or payment of Rent
or pursue any other remedies available to Landlord.  No receipt of money by
Landlord from Tenant after the termination of this Lease or Tenant's right of
possession of the Premises shall reinstate, continue or extend the Term.
Receipt or acceptance of payment from anyone other than Tenant, including an
assignee of Tenant, is not a waiver of any breach of Article Ten, and Landlord
may accept such payment on account of the amount due without prejudice to
Landlord's right to pursue any remedies available to Landlord.

26.10  LANDLORD'S OBLIGATIONS ON SALE OF BUILDING

       In the event of any sale or other transfer of the Building, Landlord
shall be entirely freed and relieved of all agreements and obligations of
Landlord hereunder accruing or to be performed after the date of such sale or
transfer, and any remaining liability of Landlord with respect to this Lease
shall be limited to the dollar amount specified in Section 26.08 and Tenant
shall not be entitled to any judgment in excess of such amount.

26.11  BINDING EFFECT

       Subject to the provisions of Article Ten, this Lease shall be binding
upon and inure to the benefit of Landlord and Tenant and their respective heirs,
legal representatives, successors and permitted assigns.

26.12  CAPTIONS

       The Article and Section captions in this Lease are inserted only as a
matter of convenience and in no way define, limit, construe, or describe the
scope or intent of such Articles and Sections.

26.13  TIME; APPLICABLE LAW, CONSTRUCTION

       Time is of the essence of this Lease and each and all of its provisions.
This Lease shall be construed in accordance with the Laws of the State of
California. If more than one person signs this Lease as Tenant, the obligations
hereunder imposed shall be joint and several. If any term, covenant or condition
of this Lease or the application thereof to any person or circumstance shall, to
any extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such term, covenant or condition to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each item, covenant or condition of this Lease shall be
valid and

                                       59


be enforced to the fullest extent permitted by Law. Wherever the term
"including" or "includes" is used in this Lease, it shall have the same meaning
as if followed by the phrase "but not limited to". The language in all parts of
this Lease shall be construed according to its normal and usual meaning and not
strictly for or against either Landlord or Tenant.

26.14  ABANDONMENT

       In the event Tenant vacates or abandons the Premises but is otherwise in
compliance with all the terms, covenants and conditions of this Lease, Landlord
shall (i) have the right to enter into the Premises in order to show the space
to prospective tenants, (ii) have the right to reduce the services provided to
Tenant pursuant to the terms of this Lease to such levels as Landlord reasonably
determines to be adequate services for an unoccupied premises and (iii) during
the last six (6) months of the Term, have the right to prepare the Premises for
occupancy by another tenant upon the end of the Term.  Tenant expressly
acknowledges that in the absence of written notice pursuant to Section 11.02(b)
or pursuant to California Civil Code Section 1951.3 terminating Tenant's right
to possession, none of the foregoing acts of Landlord or any other act of
Landlord shall constitute a termination of Tenant's right to possession or an
acceptance of Tenant's surrender of the Premises, and the Lease shall continue
in effect.

26.15  LANDLORD'S RIGHT TO PERFORM TENANT'S DUTIES

       If Tenant fails timely to perform any of its duties under this Lease,
Landlord shall have the right (but not the obligation), to perform such duty on
behalf and at the expense of Tenant without prior notice to Tenant, and all sums
expended or expenses incurred by Landlord in performing such duty shall be
deemed to be additional Rent under this Lease and shall be due and payable upon
demand by Landlord.

26.16  SECURITY SYSTEM

       Landlord shall not be obligated to provide or maintain any security
patrol or security system. Landlord shall not be responsible for the quality of
any such patrol or system which may be provided hereunder or for damage or
injury to Tenant, its employees, invitees or others due to the failure, action
or inaction of such patrol or system.

26.17  NO LIGHT, AIR OR VIEW EASEMENTS

       Any diminution or shutting off of light, air or view by any structure
which may be erected on lands of or adjacent to the Project shall in no way
affect this Lease or impose any liability on Landlord.

                                       60


26.18  RECORDATION

       Neither this Lease, nor any notice nor memorandum regarding the terms
hereof, shall be recorded by Tenant. Any such unauthorized recording shall be a
Default for which there shall be no cure or grace period. Tenant agrees to
execute and acknowledge, at the request of Landlord, a memorandum of this Lease,
in recordable form.

26.19  SURVIVAL

       The waivers of the right of jury trial, the other waivers of claims or
rights, the releases and the obligations of Tenant under this Lease to
indemnify, protect, defend and hold harmless Landlord and/or Indemnitees shall
survive the expiration or termination of this Lease, and so shall all other
obligations or agreements which by their terms survive expiration or termination
of the Lease.

26.20  RIDERS

       All Riders attached hereto and executed both by Landlord and Tenant shall
be deemed to be a part hereof and hereby incorporated herein.

       IN WITNESS WHEREOF, this Lease has been executed as of the date set forth
in Section 1.01(4) hereof.

TENANT:                                  LANDLORD:
Maxygen, Inc.                            Metropolitan Life Insurance Company, a
a Delaware corporation                   New York corporation

By: /s/ Russell Howard                   By: /s/ Edward J. Hayes
    ---------------------------------        -----------------------------------

_____________________________________    _______________________________________

Its: President & CEO                     Its: Assistant Vice President
     --------------------------------         ----------------------------------
(Chairman of Board, President or Vice
 President)

By:__________________________________

_____________________________________
             Print Name

Its:_________________________________
(Secretary, Assistant Secretary, CFO
 or Assistant Treasurer)

                                       61

                                   RIDER 1
                          COMMENCEMENT DATE AGREEMENT

Metropolitan Life Insurance Company, a New York corporation ("Landlord"), and
Maxygen, Inc., a Delaware corporation ("Tenant"), have entered into a certain
Lease dated as of October 21, 1998 (the "Lease").

WHEREAS, Landlord and Tenant wish to confirm and memorialize the Commencement
Date and Expiration Date of the Lease as provided for in Rider 2 of the Lease;

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein and in the Lease, Landlord and Tenant agree as follows:

     1.   Unless otherwise defined herein, all capitalized terms shall have the
same meaning ascribed to them in the Lease.

     2.   The Commencement Date (as defined in the Lease) of the Lease is
January 25, 1999.

     3.   The Expiration Date (as defined in the Lease) of the Lease is February
24, 2005.

     4.   Tenant hereby confirms the following:

          (a)  That it has accepted possession of the premises pursuant to the
               terms of the Lease;

          (b)  That the Landlord Work, if any, is Substantially Complete; and

          (c)  That the Lease is in full force and effect.

     5.   Except as expressly modified hereby, all terms and provisions of the
Lease are hereby ratified and confirmed and shall remain in full force and
effect and binding on the parties hereto.

     6.   The Lease and this Commencement Date Agreement contain all of the
terms, covenants, conditions and agreements between the Landlord and the Tenant
relating to the subject matter herein. No prior other agreements or
understandings pertaining to such matters are valid or of any force and effect.

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Commencement
Date Agreement and such execution and delivery have been duly authorized.



TENANT:                                           LANDLORD:
- ------                                            --------
                                               
Maxygen, Inc.,                                    Metropolitan Life Insurance Company,
a Delaware corporation                            a New York corporation

By /s/ Russell Howard                             By  /s/ Edward J. Hayes
   -----------------------------                      ------------------------------
   Russell Howard                                     Edward J. Hayes
   -----------------------------                      ------------------------------
            Print Name                                         Print Name
Its President & CEO                               Its Assistant Vice President
    ----------------------------                      -----------------------------
(Chairman of Board, President or Vice President)


By /s/ B.S. Gill
   -----------------------------

   Balkrishan Gill
   -----------------------------
             Print Name

Its CFO
   -----------------------------
(Secretary, Assistant Secretary, CFO or Assistant Treasurer)



                                    RIDER 2
                             ADDITIONAL PROVISIONS

This Rider 2 ("Rider") is attached to and a part of a certain Lease dated as of
October 21, 1998 executed concurrently herewith by Metropolitan Life Insurance
Company, a New York corporation, as

Landlord, and Maxygen, Inc., a Delaware corporation (for purposes of this Rider,
"Maxygen" or "Tenant"), as Tenant, for the Premises as described therein (the
"Lease").

SECTION 1. DEFINED TERMS; FORCE AND EFFECT

Capitalized terms used in this Rider shall have the same meanings set forth in
the Lease except as otherwise specified herein and except for terms capitalized
in the ordinary course of punctuation. This Rider forms a part of the Lease.
Without limiting the generality of the foregoing, any default by any party
hereunder shall have the same force and effect as a default under the Lease.
Should any inconsistency arise between this Rider and any other provision of the
Lease as to the specific matters which are the subject of this Rider, the terms
and conditions of this Rider shall control.

SECTION 2. PREMISES LEASED "AS-IS"; DELIVERY; COMMENCEMENT DATE; AND
CONSTRUCTION

     2.1  AS-IS; Delivery; Commencement Date. Notwithstanding any provision of
          ----------------------------------
the Lease to the contrary:

     (a)  AS-IS. Tenant acknowledges and agrees that (i) Tenant has been
          -----
afforded ample opportunity to inspect the Premises, the Building and the
Project, and has investigated their condition to the extent Tenant desires to do
so; (ii) Tenant hereby agrees that this Lease is of the Premises in its "AS IS"
condition; (iii) no representation regarding the condition of the Premises or
the Building or the Project has been made by or on behalf of Landlord; (iv)
Landlord has no obligation to remodel or to make any repairs, alterations or
improvements to the Premises, Building or the Project in connection with
Tenant's initial occupancy or provide Tenant any allowance for any work by
Tenant, except for the Landlord Maximum Contribution as provided below; and (v)
there is no Workletter for this Lease.

     (b)  Delivery & Commencement Date. Possession will be adequately tendered
          ----------------------------
to Tenant by Landlord either delivering the keys (or other means of access) to
Tenant or Tenant's Broker, or by Landlord giving written notice that the keys
(or other means of access) to the Premises are available for Tenant or its
representative to pick up at the office of Landlord or of the Seaport Centre
Property Manager. In the event Landlord determines that Landlord may be able to
tender possession of the Premises to Tenant


prior to the Projected Commencement Date, Landlord may, but shall not be
obligated to, offer to tender possession to Tenant prior to the Projected
Commencement Date, If such early tender is offered by Landlord, Tenant shall
have the option to accept the early tender (and Tenant shall notify Landlord in
writing of Tenant's exercise of such option no later than two (2) business days
after Landlord offers such early tender), and in such event shall take
possession of the Premises no later than two (2) weeks after such tender is
offered and in no event later than the Projected Commencement Date. The
Commencement Date shall be the later of (i) the date which is two weeks after
Landlord notifies Tenant it shall tender possession of the Premises to Tenant
and possession is actually tendered within or at the end of such two week period
or (ii) the date all requirements have been met to permit the County of San
Mateo Department of Environmental Health to issue a Business Closure Report, and
to permit the issuance of a Radioactive Material License Termination by the
issuing governmental authority (collectively "Sign Off"), unless Tenant takes
possession and occupies the Premises prior to such time, in which event the
Commencement Date shall be such earlier date, and thereupon Tenant's possession
of the space shall be subject to all of the terms, covenants and conditions of
this Lease, including the payment of Rent (including Monthly Base Rent and all
other rent payable under the Lease).

     (c)  Delay in Delivery. If Landlord does not obtain and tender possession
          -----------------
of the Premises by the Projected Commencement Date by reason of the following:
(i) the holding over or retention of possession of any tenant, tenants or
occupants, including, without limitation, the failure of Sugen, Inc. to vacate
and relinquish possession of the Premises by November 30, 1998, or (ii) failure
of Landlord or Tenant to receive the Sign Off or (iii) for any other reason,
then Landlord shall not be subject to any liability for the failure to give
possession on said date. Under such circumstances the Commencement Date shall be
delayed by a number of days equal to the days of delay in Landlord's delivery of
possession to Tenant. No such failure to give possession shall affect the
validity of this lease or the obligations of the Tenant hereunder. Within thirty
(30) days following the occurrence of the Commencement Date, Landlord and Tenant
shall enter into an agreement (which is attached to this lease as Rider 1)
confirming the Commencement Date and the Expiration Date. If Tenant fails to
enter into such agreement, then the Commencement Date and the Expiration Date
shall be the dates designated by landlord in such agreement.

     2.2  Tenant Work Generally. Landlord and Tenant acknowledge and agree that
          ---------------------
notwithstanding any provisions of the Lease to the contrary: (a) Tenant may
desire to do certain remodeling, repair, improvement or alteration in connection
with its initial occupancy, which for purposes of this Lease is referred to as
the Tenant Work; (b) all Tenant Work, if any, shall be done as Tenant
Alterations within the meaning of Article Nine -of the Lease, subject to and in
compliance with all conditions and provisions of the Lease applicable to Tenant
Alterations, except as otherwise expressly provided in this Rider; (c) without
limiting the generality of any provisions of Article Nine, Tenant's


selection of Tenant's space planner and/or architect and Tenant's selection of
contractor(s) shall be subject to Landlord's prior written approval, which shall
not unreasonably be withheld; (d) if the Tenant Work does not exceed the amount
of Landlord's Maximum Contribution, Tenant shall not be required to obtain 6
completion and lien indemnity bond for it; (e) such work, including all design,
plan review, obtaining all approvals and permits, and construction shall be at
Tenant's sole cost and expense, including delivery to Landlord of plans and
specifications of such Tenant Work (including 3 sets of as-built plans and
specifications upon completion) to the extent such work is more than recarpeting
and/or repainting, and (f) Tenant shall pay Landlord a fee for monitoring such
design, construction and work by Tenant which shall not exceed two percent of
all "hard costs" of the Tenant Work.

     2.3. Design & Construction Responsibility for any Tenant Work. Tenant shall
          --------------------------------------------------------
be responsible for the suitability for the Tenant's needs and business of the
design and function of all Tenant Work and for its construction in compliance
with all Law as applicable and as interpreted at the time of construction of the
Tenant Work, including all building codes and the ADA (as defined in the Lease).
Tenant, through its architects and/or space planners ("Tenant's Architect"),
shall prepare all architectural plans and specifications, and engineering plans
and specifications, for the real property improvements to be constructed by
Tenant in the Premises in sufficient detail to be submitted for approval by
Landlord to the extent required pursuant to Article Nine of the Lease and to be
submitted by Tenant for governmental approvals and building permits and to serve
as the detailed construction drawings and specifications for the contractor, and
shall include, among other things, all partitions, doors, heating, ventilating
and air conditioning installation and distribution, ceiling systems, light
fixtures, plumbing installations, electrical installations and outlets,
telephone installations and outlets, any other installations required by Tenant,
fire and life-safety systems, wall finishes and floor coverings, whether to be
newly installed or requiring changes from the as-is condition of the Premises as
of the date of execution of the Lease. Tenant shall be responsible for the
oversight, supervision and construction of all Tenant Work in compliance with
this Lease, including compliance with all Law as applicable and as interpreted
at the time of construction, including all building codes and the ADA.

     2.4. Landlord's Maximum Contribution: Amount; Reimbursable Costs & Payment.
          ---------------------------------------------------------------------
Landlord's Maximum Contribution means an amount up to a maximum of Ninety-three
Thousand Four Hundred and Ninety-eight Dollars ($93,498.00) to reimburse Tenant
for the actual costs of design, plan review, obtaining all approvals and
permits, and construction of Tenant Work in the Premises, and shall be payable
as provided below. In no event shall the Landlord's Maximum Contribution be used
to reimburse any costs of designing, procuring or installing in the Premises any
trade fixtures, movable equipment, furniture, furnishings, telephone equipment,
cabling for any of the foregoing, or other personal property (collectively
"Personal Property" for purposes of this Rider), and the cost of such Personal
Property shall be paid by Tenant.


Landlord's Maximum Contribution shall be paid to Tenant within 30 days after the
later of final completion of the Tenant Work and Landlord's receipt of (i) a
certificate of occupancy (if applicable), (ii) final as-built plans and
specifications, (iii) full, final, unconditional lien releases, and (iv)
reasonable substantiation of costs incurred by Tenant with respect to the Tenant
Work. Tenant must prior to expiration of six months after the Commencement Date
submit written application with the items required above for disbursement or
reimbursement for any reimbursable costs out of the Landlord's Maximum
Contribution, and to the extent of any funds for which application has not been
made prior to that date or if and to the extent that the reimbursable costs of
the Tenant Work are less than the amount of Landlord's Maximum Contribution,
then Landlord shall retain the unapplied or unused balance of the Landlord's
Maximum Contribution and shall have no obligation or liability to Tenant with
respect to such excess.

SECTION 3. OPTION TO EXTEND

     (a)  Landlord hereby grants Tenant a single option to extend the initial
Term of the Lease for an additional period of three (3) years (such period may
be referred to as the "Option Term"), as to the entire Premises as it may then
exist, upon and subject to the terms and conditions of this Section (the "Option
To Extend"), and provided that at the time of exercise of such right: (i) Tenant
must be in occupancy of the entire Premises; and (ii) there has been no material
adverse change in Tenant's financial position from such position as of the date
of execution of the Lease, as certified by Tenants independent certified public
accountants, and as supported by Tenant's certified financial statements, copies
of which shall be delivered to Landlord with Tenant's written notice exercising
its right hereunder.

     (b)  Tenant's election (the "Election Notice") to exercise the Option to
Extend must be given to Landlord in writing no earlier than the date which is
twelve months (12) months before the Expiration Date and no later than the date
which is nine (9) months before the Expiration Date. If Tenant either fails or
elects not to exercise its Option to Extend by not timely giving its election
Notice, then the Option to Extend shall be null and void.

     (c)  The Option Term shall commence immediately after the expiration of the
initial Term of the Lease. Tenant's leasing of the Premises during the Option
Term shall be upon and subject to the same terms and conditions contained in the
Lease except that (i) the Monthly Base Rent, plus payment of Tenant's Share of
Operating Expenses pursuant to the Lease (in addition to all expenses paid
directly by Tenant to the utility or service provider, which direct payments
shall continue to be Tenant's obligation) shall be amended to equal the "Option
Term Rent", defined and determined in the manner set forth in the immediately
following Subsection; (ii) the Security Deposit, if any, shall be increased
within fifteen (15) days after the Prevailing Market Rent has been determined to
equal one hundred percent (100%) of the highest monthly installment of Monthly
Base


Rent thereunder, but in no event shall the. Security Deposit be decreased; (iii)
Tenant shall accept the Premises in its "AS-IS" condition without any obligation
of Landlord to repaint, remodel, repair, improve or alter the Premises or to
provide Tenant any allowance therefor; and (iv) there shall be no further option
or right to extend the term of the Lease. If Tenant timely and properly
exercises the Option To Extend, references in the Lease to the Term shall be
deemed to mean the initial Term as extended by the Option Term unless the
context clearly requires otherwise.

     (d)  The Option Term Rent shall mean the greater of (i) the Monthly Base
Rent payable by Tenant under this Lease calculated at the rate applicable for
the last full month of the initial Term, plus payment of Tenant's Share of
Operating Expenses pursuant to the Lease (in addition to all expenses paid
directly by Tenant to the utility or service provider, which direct payments
shall continue to be Tenant's obligation) (collectively, "Preceding Rent") or
(ii) the "Prevailing Market Rent". As used in this Rider Prevailing Market Rent
shall mean the rent and all other monetary payments, escalations and triple net
payables by Tenant, including consumer price increases, that Landlord could
obtain from a third party desiring to lease the Premises for a term equal to the
Option Term and commencing when the Option Term is to commence under market
leasing conditions, and taking into account the following: the size, location
and floor levels of the Premises; the type and quality of tenant improvements;
age and location of the Project; quality of construction of the Project;
services to be provided by Landlord or by tenant; the rent, all other monetary
payments and escalations obtainable for new leases of space comparable to the
Premises in the Project and in comparable buildings in the mid-Peninsula area,
and other factors that would be relevant to such a third party in determining
what such party would be willing to pay therefor, provided, however, that
Prevailing Market Rent shall be determined without reduction or adjustment for
"Tenant Concessions" (as defined below), if any, being offered to prospective
new tenants of comparable space. For purposes of the preceding sentence, the
term "Tenant Concessions" shall include, without limitation, so-called free
rent, tenant improvement allowances and work, moving allowances, and lease
takeovers. The determination of Prevailing Market Rent based upon the foregoing
criteria shall be made by Landlord, in the good faith exercise of Landlord's
business judgment. Within thirty (30) days after Tenant's exercise of the Option
To Extend, Landlord shall notify Tenant of Landlord's determination of Option
Term Rent for the Premises. If Landlord's determination of Prevailing Market
Rent is greater than the Preceding Rent, and if Tenant, in Tenant's sole
discretion, disagrees with the amount of Prevailing Market Rent determined by
Landlord, Tenant may elect to revoke and rescind the exercise of the option by
giving written notice thereof to Landlord within thirty (30) days after notice
of Landlord's determination of Prevailing Market Rent.

     (e)  This Option to Extend is personal to Maxygen, Inc. and may not be used
by, and shall not be transferable or assignable (voluntarily or involuntarily)
to any person or entity except for a Tenant Affiliate.


     (f)  Upon the occurrence of any of the following events, Landlord shall
have the option, exercisable at any time prior to commencement of the Option
Term, to terminate all of the provisions of this Section with respect to the
Option to Extend, with the effect of canceling and voiding any prior or
subsequent exercise so this Option to Extend is of no force or effect:

               (i)   Tenant's failure to timely exercise the Option to Extend in
accordance with the provisions of this Section.

               (ii)  The existence at the time Tenant exercises the Option to
Extend or at the commencement of the Option Term of any default on the part of
Tenant under the Lease or of any state of facts which with the passage of time
or the giving of notice, or both, would constitute such a default.

               (iii) Tenants third default under the Lease prior to the
commencement of the Option Term, notwithstanding that all such defaults may
subsequently be cured.

In the event of Landlord's termination of the Option to Extend pursuant to this
Section, Tenant shall reimburse Landlord for all costs and expenses Landlord
incurs in connection with Tenant's exercise of the Option to Extend including,
without limitation, costs and expenses with respect to any brokerage

     (g)  Without limiting the generality of any provision of the Lease, time
shall be of the essence with respect to all of the provisions of this Section.


IN WITNESS WHEREOF, the parties hereto have executed this Rider 2 as of the date
first set forth in the Lease.

TENANT:                             LANDLORD:
Maxygen, Inc.,                      Metropolitan Life Insurance Company,
a Delaware corporation              a New York corporation
By /s/ Russell Howard               By /s/ Edward J. Hayes
Print name Russell Howard           Print name Edward J. Hayes
Its President & Ceo                 Its Assistant Vice President
(Chairman of Board,
President or Vice President)

By
Print name
Its
(Secretary, Assistant Secretary,
CFO or Assistant Treasurer)