<PAGE>
                                                                  EXHIBIT 10.10


                                      LEASE

                                 BY AND BETWEEN

                         1245 TERRA BELLA PARTNERS, LLC
                     A CALIFORNIA LIMITED LIABILITY COMPANY

                                   AS LANDLORD

                                       AND

                       INTRABIOTICS PHARMACEUTICALS, INC.
                             A DELAWARE CORPORATION

                                    AS TENANT

                                 APRIL 30, 1997


                                       1.
<PAGE>

                                      LEASE


     THIS LEASE, dated April 30, 1997, for references purposes only, is made
by and between 1245 TERRA BELLA PARTNERS, LLC, a California limited liability
company ("Landlord") and INTRABIOTICS PHARMACEUTICALS, Inc. a Delaware
corporation ("Tenant"), to be effective and binding upon the parties as of the
date the last designated signatories to this Lease shall have executed this
Lease (the "Effective Date of this Lease").

                                    ARTICLE 1

                                    REFERENCE

     1.1    REFERENCES. All references in this Lease (subject to any further
clarifications contained in this Lease) to the following terms shall have the
following meaning or refer to the respective address, person, date, time period,
amount, percentage, calendar year or fiscal year as below set forth:

     TENANT'S ADDRESS FOR NOTICE:             Intrabiotics Pharmaceuticals, Inc.
     AFTER COMMENCEMENT DATE:                 1245 Terra Bella Avenue
                                              Mountain View, California  94043
                                              Attn:  Ken Kelley, President

     PRIOR TO COMMENCEMENT DATE:              816 Kifer Road
                                              Sunnyvale, California  94086
                                              Attn:  Ken Kelley, President

     LANDLORD'S ADDRESS FOR NOTICES:          c/o Menlo Equities LLC
                                              2180 San Hill Road
                                              Suite 100
                                              Menlo Park, California  94025

     LANDLORD'S REPRESENTATIVE:               Henry Bullock/Richard Holmstrom
     PHONE NUMBER:                            (415) 854-4421

     COMMENCEMENT DATE:                       July 15, 1997

     TERM:                                    Eighty-four months

     LEASE EXPIRATION DATE:                   Eighty-four (84) months from the
                                              Commencement Date, unless earlier
                                              terminated by Landlord in
                                              accordance with the terms of this
                                              Lease.

     OPTIONS TO RENEW:                        N/A

     FIRST MONTH'S PREPAID RENT:              $26,605, plus the sum of $2,504 as
                                              estimated triple net expenses.


                                       1.
<PAGE>

     TENANT'S SECURITY DEPOSIT:               $175,000 in cash or Letter of
                                              Credit (See Section 3.7)

     LATE CHARGE AMOUNT:                      Five Percent (5%) of the
                                              Delinquent Amount.

     TENANT'S REQUIRED LIABILITY:             $2,000,000 Combined Single Limit

     LANDLORD'S BROKER(S):                    Industrial Property Associates

     TENANT'S BROKER:                         Ernst & Young, LLP & CB Madison

     PROPERTY:                                That certain real property
                                              situated in the City of Mountain
                                              View, Count of Santa Clara, State
                                              of California, as presently
                                              improved with one (1) building(s)
                                              (collectively, the "Building"),
                                              which real property is shown on
                                              the Site Plan attached hereto as
                                              EXHIBIT "A" and is commonly known
                                              as or otherwise described as
                                              follows: approximately 15,650
                                              square foot building located at
                                              1245 Terra Bella Avenue, Mountain
                                              View, California.

     BUILDING:                                That certain Building within the
                                              Property in which the Leased
                                              Premises are located, which
                                              Building is shown outlined on
                                              EXHIBIT "A" hereto.

     OUTSIDE AREAS:                           The "Outside Areas" shall mean
                                              all areas within the Property
                                              which are located outside the
                                              Building, such as pedestrian
                                              walkways, parking areas,
                                              landscaped areas, open areas
                                              and enclosed trash disposal
                                              areas.

     LEASED PREMISES:                         All the interior space within the
                                              Building and Outside Areas as
                                              shown on EXHIBIT "A".

     BASE MONTHLY RENT:                       The term "Base Monthly Rent" shall
                                              mean the following:

                                                     MONTH                  RENT
                                                     01-12               $26,605
                                                     13-24               $27,669
                                                     25-36               $28,776
                                                     37-48               $29,927
                                                     49-60               $31,124


                                       2.
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                                                     MONTH                  RENT
                                                     61-72               $32,369
                                                     73-84               $33,664

     USE:                                     Office and Research and
                                              Development

     EXHIBITS:                                The term "Exhibits" shall mean the
                                              Exhibits of this Lease which are
                                              described as follows:

                                              EXHIBIT "A"  -  Site Plan showing
                                                              the Property and
                                                              delineating the
                                                              Building in which
                                                              the Leased
                                                              Premises are
                                                              located.

                                              EXHIBIT "B"  -  Work Letter

                                              EXHIBIT "C"  -  Confidentiality
                                                              Agreement

                                              EXHIBIT "D"  -  Form of Letter
                                                              of Credit

                                              EXHIBIT "E"  -  Form of Landlord's
                                                              Waiver

                                              EXHIBIT "F"  -  Hazardous
                                                              materials
                                                              Management Plan

                                   ARTICLE 2

                      LEASED PREMISES, TERM AND POSSESSION

     2.1    DEMISE OF LEASED PREMISES. Landlord hereby leases to Tenant and
Tenant hereby leases from Landlord for Tenant's own use in the conduct of
Tenant's business and not for purposes of speculating in real estate, for the
Lease Term and upon the terms and subject to the conditions of this Lease, as
the Leased Premises, reserving and excepting to Landlord the right to fifty
percent (50%) of all assignment consideration and excess rentals as provided in
Article 7 below. Tenant's lease of the Leased Premises, together with the
appurtenant right to use the Outside Areas as described in Paragraph 2.2 below,
shall be conditioned upon and be subject to the continuing compliance by Tenant
with (i) all the terms and conditions of this Lease, (ii) all Laws governing the
use of the Leased Premises and the Property, (iii) all Private Restrictions,
easements and other matters now of public record respecting the use of the
Leased Premises and Property, and (iv) all reasonable rules and regulations from
time to time established by Landlord. Tenant acknowledges that the area
comprising the Leased Premises is as specified in Article 1 hereof and that such
area shall not be reduced irrespectively of any subsequent recalculation of the
area comprising the Leased Premises.


                                       3.
<PAGE>

     2.2    RIGHT TO USE OUTSIDE AREAS. As an appurtenant right to Tenant's
right to use and occupancy of the Leased Premises, Tenant shall have the right
to use the Outside Areas in conjunction with its use of the Leased Premises
solely for the purposes for which they were designated and intended and for no
other purposes whatsoever. Tenant's right to so use the Outside Areas shall be
subject to the limitations on such use as set forth in Article 1 and shall
terminate concurrently with any termination of this Lease.

     2.3    LEASE COMMENCEMENT DATE AND LEASE TERM. The term of this Lease shall
begin on the Commencement Date, as set forth in Article 1 (the "Lease
Commencement Date"). The term of this Lease shall in all events end on the Lease
Expiration Date (as set forth in Article 1). The Lease Term shall be that period
of time commencing on the Lease Commencement Date and ending on the Lease
Expiration Date (the "Lease Term").

     2.4    DELIVERY OF POSSESSION. Landlord shall deliver to Tenant possession
of the Leased Premises at such time as the improvement Work (as defined in
Paragraph 2.5 below) is substantially completed pursuant to the Work Letter,
provided that Tenant shall have the right to occupy the office portion only upon
completion of those improvements, but Tenant shall not in any way occupy the lab
area until its completion. If Landlord is unable to so deliver possession of the
Leased Premises to Tenant in the agreed condition on or before the Commencement
Date, Landlord shall not be in default under this Lease, nor shall this Lease be
void, voidable or cancelable by Tenant until the lapse of one hundred twenty
(120) days after the Commencement Date (the "delivery grace period"). The
delivery grace period above set forth shall be extended for such number of days
as Landlord may be delayed in delivery possession of the Leased Premises to
Tenant by reason of FORCE MAJEURE (as defined in Section 13.9 hereof) or the
action or inaction of Tenant. If Landlord is unable to deliver possession of the
Leased Premises in the agreed condition to Tenant within the described delivery
grace period (including any extension thereof by reason of FORCE MAJEURE or the
actions or inactions of Tenant), then Tenant's sole remedy shall be to terminate
this Lease, and in no event shall Landlord be liable in damages to Tenant for
such delay. Tenant may not terminate this Lease at any time after the date
Landlord notifies Tenant that the Leased Premises have been put into the agreed
condition and re available for delivery to Tenant, unless Landlord's notice is
not given in good faith. If Landlord has not substantially completed the
Improvement Work and delivered possession of the Premises to Tenant prior to the
expiration of ninety (90) days from the Commencement Date (including any
extension thereof by reason of FORCE MAJEURE or the actions or inactions of
Tenant), then in addition to Tenant's right to terminate this Lease upon
expiration of the delivery grace period, as set forth hereinabove, Tenant shall
be entitled to one free day of Base Rent for each day past such date that the
Premises are so delivered to Tenant; unless tenant has terminated this Lease
upon expiration of the delivery grace period.

     2.5    PERFORMANCE OF IMPROVEMENT WORK; ACCEPTANCE OF POSSESSION. Landlord
shall, pursuant to the work letter attached to and made a part of this Lease as
EXHIBIT "B" (the "Work Letter"), perform the work and make the installations in
the Leased Premises substantially as set forth in the Work Letter (such work and
installations hereinafter referred to as the "Improvement Work"). All
Improvement Work shall be constructed in accordance with all applicable
government laws, rules, regulations and codes. Without limiting the foregoing,
Landlord agrees to deliver in good working order the roof surface (which shall
be replaced by Landlord) and all existing plumbing, lighting, heating,
ventilating and air conditioning systems


                                       4.
<PAGE>

within the Leased Premises. Landlord shall (i) construct a new facade on the
exterior surface of the Building with new windows and a new entry in accordance
with the plans and specifications approved pursuant to the Work Letter, (ii)
install new landscaping at the front of and at the eastern side of the Building,
(iii) resurface and restripe the parking lot, and (iv) repaint the exterior of
the Building. If any dispute arises as to whether the Leased Premises are
substantially completed and ready for Tenant's occupancy, a certificate
furnished by the Construction manager (as defined in the Work Letter) certifying
the date of substantial completion shall be conclusive of that fact and date and
binding upon Landlord and Tenant. It is agreed that by occupying the Leased
Premises, Tenant formally accepts same and acknowledges that the Leased Premises
are in the condition called for hereunder, subject to normal punchlist items
specified by Tenant to Landlord in writing within thirty (30) days of such
occupancy and subject to the limited warranty of Landlord set forth in the Work
Letter. Tenant shall have the right to retain, at Tenant's sole cost, and
independent inspector, subject to Landlord's approval which will not be
unreasonably withheld, for purposes of preparation of the punchlist.

     2.6    SURRENDER OF POSSESSION. Immediately prior to the expiration or upon
the sooner termination of this Lease, Tenant shall remove all of Tenant's signs
from the exterior of the Building and shall remove all of Tenant's equipment,
trade fixtures, furniture, supplies, wall decorations and other person property
from within the Leased Premises, the Building and the Outside Areas, and shall
vacate and surrender the Leased Premises, the Building, the Outside Areas and
the Property to Landlord in the same condition, broom clean, as existed at the
Lease Commencement Date, reasonable wear and tear excepted. Tenant shall repair
all damage to the Leased Premises, the exterior of the Building and the Outside
Areas caused by Tenant's removal of Tenant's property. Tenant shall patch and
refinish, to Landlord's reasonable satisfaction, all penetrations made by Tenant
or its employees to the floor, walls or ceiling of the Leased Premises, whether
such penetrations were made with Landlord's approval or not. Tenant shall repair
or replace all stained or damaged ceiling tiles, wall coverings and floor
coverings to the reasonable satisfaction of Landlord. Tenant shall repair all
damage caused by Tenant to the exterior surface of the Building and the paved
surfaces of the Outside Areas and, where necessary, replace or resurface same.
Tenant shall not be required to remove the initial Improvement Work to the
extent such Improvement Work relates to non-specialized improvements or
alterations installed on Tenant's behalf, such improvements shall remain on the
Leased Premises upon expiration or prior termination of this Lease unless
Landlord elects to require that Tenant at its sole cost remove such
improvements, in which event Tenant shall remove such improvements and shall
repair all damage caused by such removal. Landlord agrees upon specific written
request by Tenant at the time Tenant shall submit its final improvement drawings
for approval by Landlord to notify Tenant in writing which such Improvement Work
Landlord will require Tenant to remove from the Premises upon expiration of the
Lease Term pursuant to the foregoing. Notwithstanding anything to the contrary
hereinabove, Tenant shall have the right to remove any trade fixtures and other
personal property belonging to Tenant that do not constitute permanently
installed fixtures, as well as the lab benches and items set forth in
Section 6.2 attached hereto. If the Leased Premises, the Building, the Outside
Areas and the Property are not surrendered to Landlord in the condition required
by this paragraph at the expiration or sooner termination of this Lease,
Landlord may, at Tenant's expense, so remove Tenant's signs, property and/or
improvements not so removed and make such repairs and replacements not so made
or hire, at Tenant's expense, independent contractors to perform such work.
Tenant shall be liable to Landlord for all costs incurred by Landlord in


                                       5.
<PAGE>

returning the Leased Premises, the Building and the Outside Areas to the
required condition, together with interest on all costs so incurred from the
date paid by landlord at the then maximum rate of interest not prohibited or
made usurious by law until paid. Tenant shall pay to Landlord the amount of
all costs so incurred plus such interest thereon, within ten (10) days of
Landlord's billing Tenant for same. Tenant shall indemnify Landlord against
loss or liability resulting from delay by Tenant in surrendering the Leased
Premises, including, without limitation, any actual claims made by any
succeeding Tenant or any losses to Landlord with respect to lost
opportunities to lease to succeeding tenants.

                                   ARTICLE 3

                    RENT, LATE CHARGES AND SECURITY DEPOSITS

     3.1  BASE MONTHLY RENT. Commencing on the Lease Commencement Date (as
determined pursuant to Paragraph 2.3 above) and continuing throughout the
Lease Term, Tenant shall pay to Landlord, without prior demand, deduction or
offset, in advance on the first day of each calendar month, the amount set
forth as "Base Monthly Rent" in Article 1 (the "Base Monthly Rent"). Subject
to the provisions of Section 2.4, Base Monthly Rent shall commence on the
Lease Commencement Date regardless of whether Landlord has completed the
Improvement Work by such date.

     3.2  ADDITIONAL RENT. Commencing on the Lease Commencement Date (as
determined pursuant to Paragraph 2.3 above) and continuing throughout the
Lease Term, in addition to the Base Monthly Rent and to the extent not
required by Landlord to be contracted for and paid directly by Tenant, Tenant
shall pay to Landlord as additional rent (the "Additional Rent") the
following amounts:

          (a) An amount equal to all Property Operating Expenses (as defined
in Article 13) incurred by Landlord. Payment shall be made by whichever of
the following methods (or combination of methods) is (are) from time to time
designated by Landlord:

               (i) Landlord may forward invoices or bills for such expenses
to Tenant, and Tenant shall, no later than ten (10) days prior to the due
date, pay such invoices or bills and deliver satisfactory evidence of such
payment to Landlord, and/or

               (ii) Landlord may bill to Tenant, on a periodic basis not more
frequently than monthly, the amount of such expenses (or group of expenses)
as paid or incurred by Landlord, and Tenant shall pay to Landlord the amount
of such expenses within ten (10) days after receipt of a written bill
therefor from Landlord, and/or

               (iii) Landlord may deliver to Tenant Landlord's reasonable
estimate of any given expense (such as Landlord's Insurance Costs or Real
Property Taxes), or group of expenses, which it anticipates will be paid or
incurred from the ensuring calendar or fiscal year, as Landlord may
determine, and Tenant shall pay to Landlord an amount equal to the estimated
amount of such expenses for such year in equal monthly installments during
such year with the installments of Base Monthly Rent.

                                       6.

<PAGE>

Landlord reserves the right to change from time to time the methods of
billing Tenant for any given expense or group of expenses or the periodic
basis on which such expenses are billed.

          (b) Landlord's share of the consideration received by Tenant upon
certain assignments and sublettings as required by Article 7.

          (c) Any legal fees and costs that Tenant is obligated to pay or
reimburse to Landlord pursuant to Article 13; and

          (d) Any other charges or reimbursements due Landlord from Tenant
pursuant to the terms of this Lease.

Notwithstanding the foregoing, Landlord may elect by written notice to Tenant
to have Tenant pay Real Property Taxes or any portion thereof directly to the
applicable taxing authority, in which case Tenant shall make such payments
and deliver satisfactory evidence of payment to Landlord no later than ten
(10) days before such Real Property Taxes become delinquent.

     3.3 YEAR-END ADJUSTMENTS. If Landlord shall have elected to bill Tenant
for the Property Operation Expenses (or any group of such expenses) on an
estimated basis in accordance with the provisions of Paragraph 3.2(a)(iii)
above, Landlord shall furnish to Tenant within three months following the end
of the applicable calendar or fiscal year, as the case may be, a statement
setting forth (i) the amount of such expenses paid or incurred during the
just ended calendar or fiscal year, as appropriate, and (ii) the amount that
Tenant has paid to Landlord for credit against such expenses for such period.
If Tenant shall have paid more than its obligation for such expenses for the
stated period, Landlord shall, at its election, either (i) credit the amount
of such overpayment toward the next ensuing payment or payments of Additional
Rent that would otherwise be due or (ii) refund in cash to Tenant the amount
of such overpayment. If such year-end statement shall how that Tenant did not
pay its obligation for such expenses in full, then Tenant shall pay to
Landlord the amount of such underpayment within ten days from Landlord's
billing of same to Tenant. The provisions of this Paragraph shall survive the
expiration or sooner termination of this Lease.

     3.4 LATE CHARGE, AND INTEREST ON RENT IN DEFAULT. Tenant acknowledges
that the late payment by Tenant of any monthly installment of Base Monthly
Rent or any Additional Rent will cause Landlord to incur certain costs and
expenses not contemplated under this Lease, the exact amounts of which are
extremely difficult or impractical to fix. Such costs and expenses will
include without limitation, administration and collection costs and
processing and accounting expenses. Therefor, except as hereinafter provided,
if any installment of Base Monthly Rent is not received by landlord from
Tenant within ten (10) calendar days after the same becomes due, Tenant shall
immediately pay to Landlord a late charge in an amount equal to the amount
set forth in Article 1 as the "Late Charge Amount," and if any Additional
Rent is not received by Landlord within ten (10) calendar days after same
becomes due, Tenant shall immediately pay to Landlord a late charge in an
amount equal to 5% of the Additional Rent not so paid. Notwithstanding the
foregoing, Landlord agrees to provide Tenant with a one time written notice
of any default in the payment of Base Monthly Rent or Additional Rent and if
Tenant shall cure such default within five (5) days of delivery of such
written notice, no late charge shall be payable hereunder. Landlord shall not
thereafter be obligated to deliver any

                                       7.

<PAGE>

written notice to Tenant hereunder before a late charge shall become due.
Landlord and Tenant agree that this late charge represents a reasonable
estimate of such costs and expenses and is fair compensation to Landlord for
the anticipated loss Landlord would suffer by reason of Tenant's failure to
make timely payment. In no event shall this provision for a late charge be
deemed to grant to Tenant a grace period or extension of time within which to
pay any rental installment or prevent Landlord from exercising any right or
remedy available to Landlord upon Tenant's failure to pay each rental
installment due under this Lease when due, including the right to terminate
this Lease. If any rent remains delinquent for a period in excess of ten (10)
calendar days, then, subject to the one-time notice right set forth
hereinabove and in addition to such late charge, Tenant shall pay to Landlord
interest on any rent that is not so paid from said tenth (10th) day (or upon
expiration of five (5) days from the one-time written notice provided by
Landlord pursuant to the foregoing) at the then maximum rate of interest not
prohibited or made usurious by Law until paid.

          3.5 PAYMENT OF RENT. Except as specifically provided otherwise in
this Lease, all rent shall be paid in lawful money of the United States,
without any abatement, reduction or offset for any reason whatsoever, to
Landlord at such address as Landlord may designate from time to time.
Tenant's obligation to pay Base Monthly Rent and all Additional Rent shall be
appropriately prorated at the commencement and expiration of the Lease Term.
The failure by Tenant to pay any Additional Rent as required pursuant to this
Lease when due shall be treated the same as a failure by Tenant to pay Base
Monthly Rent when due, and Landlord shall have the same rights and remedies
against Tenant as Landlord would have had Tenant failed to pay the Base
Monthly Rent when due.

     3.6 PREPAID RENT Tenant shall, upon execution of this Lease, pay to
Landlord the amount set forth in Article 1 as "First Month's Prepaid Rent" as
prepayment of rent for credit against the first payment of Base Monthly Rent
due hereunder.

     3.7      SECURITY DEPOSIT; LETTER OF CREDIT.

          (a) Upon execution hereof, Tenant shall deposit with Landlord an
irrevocable letter of credit in form acceptable to Landlord and issued by an
institutional lender acceptable to Landlord, in the amount set forth in
Article 1 as the "Security Deposit," as security for the prompt and complete
performance by Tenant of the obligations and terms of this Lease to be
performed by Tenant, and not as prepayment of rent (the "Letter of Credit").
The Letter of Credit shall (i) show Landlord as the account party, (ii) have
a term of not less than twelve (12) months, (iii) be renewed from time to
time during the period that the Letter or Credit must be maintained pursuant
to this Section 5.2 (such renewals to be fore a period of not less than
twelve (12) months and in the amounts required hereby), and (iv) be in the
form attached hereto as EXHIBIT "D." The term "Letter of Credit" shall, for
the purposes of this Lease, include any replacement or renewal Letter of
Credit.

          (b) Landlord may upon demand draw upon the Letter of Credit and
Landlord may apply such portion or portions of the Security Deposit as are
reasonably necessary for the following purposes: (i) to remedy any default by
Tenant in the payment of Base Monthly Rent or Additional Rent or a late
charge or interest on defaulted rent, or any other monetary payment
obligation of Tenant under this Lease; (ii) to repair damage to the Leased
Premises, the Building

                                       8.

<PAGE>

or the Outside Areas caused or permitted to occur by Tenant, except to the
extent covered by any insurance proceeds received by Landlord under its
casualty insurance policy; (iii) to clean and restore and repair the Leased
Premises, the Building or the Outside Areas following their surrender to
Landlord if not surrendered in the condition required pursuant to the
provisions of Article 2, except for items which Landlord would be obligated
to repair under Section 5.1(b) upon expiration of the Lease term unless any
such damage is caused by Tenant, and (iv) to remedy any other default of
Tenant to the extent permitted by Law including, without limitation, paying
in full on Tenant's behalf any sums claimed by materialmen or contractors of
Tenant to be owing to them by Tenant for work done or improvements made at
Tenant's request to the Leased Premises. In this regard, Tenant hereby waives
any restriction on the uses to which the Security Deposit may be applied as
contained in Section 1950.7(c) of the California Civil Code and/or any
successor statute. In the event the Security Deposit or any portion thereof
is so used, Tenant shall pay to Landlord, promptly upon demand, an amount in
cash sufficient to restore the Security Deposit to the full original sum. If
Tenant fails to promptly restore the Security Deposit and if Tenant shall
have paid to Landlord any sums as "Last Month's Prepaid Rent," Landlord may,
in addition to any other remedy Landlord may have under this Lease, reduce
the amount of Tenant's Last Month's Prepaid Rent by transferring all or
portions of such Last Month's Prepaid Rent to Tenant's Security Deposit until
such Security Deposit is restored to the amount set forth in Article 1.
Landlord shall not be deemed a trustee of the Security Deposit. Landlord may
use the Security Deposit in Landlord's ordinary business and shall not be
required to segregate it from Landlord's general accounts. Tenant shall not
be entitled to any interest on the Security Deposit. If Landlord transfers
the Building or the Property during the Lease Term, Landlord may pay the
Security Deposit to any subsequent owner in conformity with the provisions of
Section 1950.7 of the California Civil Code and/or any successor statute, in
which event the transferring landlord shall be released from all liability
for the return of the Security Deposit. Tenant specifically grants to
Landlord (and Tenant hereby waives the provisions of California Civil Code
Section 1950.7 to the contrary) a period of ninety (90) days following a
surrender of the Leased Premises by Tenant to Landlord within which to
inspect the Leased Premises, make required restorations and repairs, receive
and verify workmen's billings therefor, and prepare a final accounting with
respect to the Security Deposit. In no event shall the Security Deposit or
any portion thereof, be considered prepaid rent.

                                   ARTICLE 4

                     USE OF LEASED PREMISES AND OUTSIDE AREA

     4.1 PERMITTED USE. Tenant shall be entitled to use the Leased Premises
solely for the "Permitted Use" as set forth in Article 1 and for no other
purpose whatsoever. Tenant shall continuously and without interruption use
the Leased Premises for such purpose for the entire Lease Term. Any
discontinuance of such use for a period of sixty (60) consecutive calendar
days shall be, at Landlord's election, a default by Tenant under the terms of
this Lease. Landlord may elect upon request by Tenant to extend the period of
any vacation of the Premises by Tenant, in Landlord's sole and absolute
discretion ,and in such event may require Tenant to provide reasonable
security for the Premises. Tenant shall have the right to use the Outside
Areas in conjunction with its Permitted Use of the Leased Premises solely for
the purposes for which they were designed and intended and for no other
purposes whatsoever.

                                       9.

<PAGE>

     4.2 GENERAL LIMITATIONS ON USE. Tenant shall not do or permit anything
to be done in or about the Leased Premises, the Building, the Outside Areas
or the Property which does or could (i)jeopardize the structural integrity of
the Building or (ii) cause damage to any part of the Leased Premises, the
Building, the Outside Areas or the Property. Tenant shall not operate any
equipment within the Leased Premises which does or could (i) injure, vibrate
or shake the leased Premises or the Building, (ii) damage, overload or impair
the efficient operation of any electrical, plumbing, heating, ventilating or
air conditioning systems within or servicing the Leased Premises or Building,
or (iii) damage or impair the efficient operation of the sprinkler system (if
any) within or servicing the Leased Premises or the Building. Tenant shall
not install any equipment or antennas on or make any penetrations of the
exterior walls or roof of the building, and Tenant shall not affix any
equipment to or make any penetrations or cuts in the floor, ceiling, walls or
roof of the Leased Premises. Notwithstanding the preceding sentence, Tenant
may make penetrations of the roof and exterior walls and place equipment upon
the roof to the extent such penetrations and equipment are reasonably
required in connection with Tenant's installation of hoods and equipment
required for Tenant's laboratory operations and further provided that (i)
Tenant delivers written notice to Landlord not less than five (5) business
days prior to making any such penetrations or installations specifying the
scope of work to be completed and the reasons for making any exterior
penetrations, (ii) Tenant fully repairs any damage resulting from any
penetration and restores the Building (including the roof and roof membrane)
to a good and watertight condition, (iii) Tenant pays all costs incurred in
connection with such work, (iv) such work and the improvements installed
comply with all Laws and Private Restrictions (as defined herein), (v) any
such equipment, antennae and other installations are not visible from the
exterior of the Building, and (vi) no such penetration or installation
adversely affects the structural integrity of the Building. Tenant shall not
place any loads upon the floors, walls, ceiling or roof systems which could
endanger the structural integrity of the Building or damage its floors,
foundations or supporting structural components. Tenant shall not place any
explosive, flammable or harmful fluids or other waste materials in the
drainage systems of the Leased Premises, the Building, the Outside Areas or
the Property. Tenant shall not drain or discharge any fluids in the
landscaped areas or across the paved areas of the Property. Except for
equipment located on a separate pad located outside the Building to be
constructed at Tenant's sole cost (and shown on plans and specifications
approved by Landlord as provided in the Work Letter), Tenant shall not use
any of the Outside Areas for the storage of its materials, supplies,
inventory or equipment and all such materials, supplies, inventory or
equipment shall at all times be stored within the Leased Premises. Tenant
shall not commit nor permit to be committed and waste in or about the Leased
Premises, the Building, the Outside Areas or the Property.

     4.3 NOISE AND EMISSIONS. All noise generated by Tenant in its use of the
Leased Premises shall be confined or muffled so that it does not interfere
with the businesses of or annoy the occupants and/or users of adjacent
properties. All dust, fumes, odors and other emissions generated by Tenant's
use of the leased Premises shall be sufficiently dissipated in accordance
with sound environmental practice and exhausted from the Leased Premises in
such a manner so as not to interfere with the businesses of or annoy the
occupants and/or users of adjacent properties, or cause any damage to the
Leased Premises, the Building, the Outside Areas or the Property or any
component part thereof or the property of adjacent property owners.

     4.4 TRASH DISPOSAL. Tenant shall provide trash bins or other adequate
garbage disposal facilities within the trash enclosure areas provided or
permitted by Landlord outside the

                                       10.

<PAGE>

Leased Premises sufficient for the interim disposal of all of its trash,
garbage and waste. All such trash, garbage and waste temporarily stored in
such areas shall be stored in such a manner so that it is not visible from
outside of such areas, and Tenant shall cause such trash, garbage and waste
to be regularly removed from the Property in a clean, safe and neat condition
free and clear of all trash, garbage, waste and/or boxes, pallets and
containers containing same at all times.

     4.5 PARKING. Tenant shall not, at any time, park or permit to be parked
any recreational vehicles, inoperative vehicles or equipment in the Outside
Areas or on any portion of the Property. Tenant agrees to assume
responsibility for compliance by its employees and invitees with the parking
provisions contained herein. If Tenant or its employees park any vehicle
within the Property in violation of these provisions, then Landlord may, upon
prior written notice to Tenant giving Tenant one (1) day (or any applicable
statutory notice period, if longer than one (1) day) to remove such
vehicle(s), in addition to any other remedies Landlord may have under this
Lease, charge Tenant , as Additional Rent, and Tenant agrees to pay, as
Additional Rent, the cost of towing such vehicle.

     4.6 SIGNS. Tenant shall not place or install on or within any portion of
the Leased Premises, the exterior of the Building, the Outside Areas or the
Property any sign, advertisement, banner, placard, or picture which is
visible from the exterior of the Leased Premises, except in accordance with
the rules, ordinances and regulations of the City of Mountain View. Tenant
shall not place or install on or within any portion of the Leased Premises,
the exterior of the Building, the Outside Areas or the Property any business
identification sign which is visible from the exterior or the Leased Premises
until Landlord shall have approved in writing and in its sole discretion the
location, size, content, design, method of attachment and material to be used
in the making of such sign; PROVIDED, HOWEVER, that so long as such signs are
normal and customary business directional or identification signs within the
Building, Tenant shall not be required to obtain Landlord's approval. Any
sign, once approved by Landlord, shall be installed at Tenant's sole cost and
expense and only in strict compliance with Landlord's approval, using a
person approved by Landlord to install same. Landlord may remove any signs
(which have not been approved in writing by Landlord), advertisements,
banners, placards or pictures so placed by Tenant on or within the Leased
Premises, the exterior of the Building, the Outside Areas or the Property and
charge to Tenant the cost of such removal, together with any costs incurred
by Landlord to repair any damage caused thereby, including any cost incurred
to restore the surface (upon which such sign was so affixed) to its original
condition. Tenant shall remove all of Tenant's signs, repair any damaged
caused thereby, and restore the surface upon which the sign was affixed to
its original condition, all to Landlord's reasonable satisfaction, upon the
termination of this Lease.

     4.7 COMPLIANCE WITH LAWS AND PRIVATE RESTRICTIONS. Subject to the
limitations on Tenant's responsibility for Hazardous Materials as set forth
in Section 4.11 and Tenant's obligations under Section 6.3, Tenant shall
abide by and shall promptly observe and comply with, at its sole cost and
expense, all Laws and Private Restrictions respecting the use and occupancy
of the Leased Premises, the Building, the Outside Areas or the Property, and
shall defend with competent counsel, indemnify and hold Landlord harmless
from any claims, damages or liability resulting from Tenant's failure to so
abide, observe, or comply. The indemnity provision of this paragraph shall
survive the expiration or sooner termination of this Lease.

                                       11.

<PAGE>

     4.8 COMPLIANCE WITH INSURANCE REQUIREMENTS. With respect to any
insurance policies required to permitted to be carried by landlord in
accordance with the provision of this Lease, copies of which have been or
will, upon Tenant's written request therefor, be provide to Tenant, Tenant
shall not conduct nor permit any other person to conduct any activities nor
keep, store or use (or allow any other person to keep, store or use) any item
or thing within the Leased Premises, the Building, the Outside Areas or the
Property which (i) is prohibited under the terms of any such policies, (ii)
could result in the termination of the coverage afforded under any of such
policies, (iii) could give to the insurance carrier the right to cancel any
of such policies, or (iv) could cause an increase in the rates (over standard
rates) charged for the coverage afforded under any of such policies. Tenant
shall comply with all requirements of any insurance company, insurance
underwriter, or Board of Fire Underwriters which are necessary to maintain,
at standard rates, the insurance coverages carried by either Landlord or
Tenant pursuant to this Lease.

     4.9 LANDLORD'S RIGHT TO ENTER. Landlord and its agents shall have the
right to enter the Leased Premises during normal business hours after giving
Tenant reasonable notice and subject to Tenant's reasonable security and
environmental health, safety measures and requirements (including execution
of Tenant's Confidentiality Agreement, a copy of which is attached hereto as
Exhibit C) for the purpose of (i) inspecting the same; (ii) showing the
Leased Premises to prospective purchasers, mortgagees or tenants; (iii)
making necessary alterations, additions or repairs; and (iv) performing any
of Tenant's obligations when Tenant has failed to do so. Landlord shall have
the right to enter the Leased Premises during normal business hours (or as
otherwise agreed), subject to Tenant's reasonable security measures
(including execution of Tenant's Confidentiality Agreement, a copy of which
is attached hereto as Exhibit C), for purposes of supplying any maintenance
or services agreed to be supplied by Landlord. Landlord shall have the right
to enter the Outside Areas during normal business hours for purposes of (i)
inspecting the exterior of the Building and Outside Areas; (ii) posting
notices of nonresponsibility (and for such purposes Tenant shall provide
Landlord at least thirty days' prior written notice of any work to be
performed on the Leased Premises); and (iii) supplying any services to be
provided by Landlord. Any entry into the Leased Premises or the Outside Areas
obtained by Landlord in accordance with this paragraph shall not under any
circumstances be construed or deemed to be a forcible or unlawful entry into,
or a detainer of, the Leased Premises, or an eviction, actual or constructive
of Tenant from the Leased Premises or any portion thereof.

     4.10 USE OF OUTSIDE AREAS. Tenant, in its use of the Outside Areas,
shall at all times keep the Outside Areas in a safe condition free and clear
of all materials, equipment, debris, trash (except within existing enclosed
trash areas) inoperable vehicles, and other items which are not specifically
permitted by Landlord to be stored or located thereon by Tenant. If, in the
opinion of Landlord, unauthorized persons are using any of the Outside Areas
by reason of, or under claim of, the express or implied authority or consent
of Tenant, then Tenant, upon demand of Landlord, shall restrain, to the
fullest extent then allowed by law, such unauthorized use, and shall initiate
such appropriate proceedings as may be required to so restrain such use.

     4.11     HAZARDOUS MATERIALS; ENVIRONMENTAL PROTECTION.

                                       12.

<PAGE>

     (a) As used herein, the term "Hazardous Materials" shall mean any toxic
or hazardous substance, material or waste or any pollutant or infectious or
radioactive material, including but not limited to those substances,
materials or wastes regulated now or in the future under any of the following
statutes or regulations and any and all of those substances included within
the definitions of "hazardous substances," "hazardous materials," "hazardous
waste," "hazardous chemical substance or mixture," "imminently hazardous
chemical substance or mixture," "toxic substances," "hazardous air
pollutant," "toxic pollutant," or "solid waste" in the (a) Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA" or
"Superfund"), as amended by the Superfund Amendments and Reauthorization Act
of 1986 ("SARA"), 42 U.S.C. Section 9601 ET SEQ., (b) Resource Conservation
and Recovery Act of 1976 ("RCRA"), 42 U.S.C. Section 6901 ET SEQ., (c)
Federal Water Pollution Control ("FWPCA"), 33 U.S.C. Section 1251 ET SEQ.,
(d) Clean Air Act ("CAA"), 42 U.S.C. Section 7401 ET SEQ., (e) Toxic
Substances Control Act ("TSCA"), 14 U.S.C. Section 2601 ET SEQ., (f)
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, ET SEQ., (g)
Carpenter-Presley-Tanner Hazardous Substance Account Act ("California
Superfund"), Cal. Health & Safety Code Section 25300 ET SEQ., (h) California
Hazardous Waste Control Act, Cal. health & Safety Code Section 25100 ET SEQ.,
(i) Porter-Cologne Water Quality Control Act ("Porter-Cologne Act"), Cal.
Water Code Section 13000 ET SEQ., (j) Hazardous Waste Disposal Land Use Law,
Cal. Health & Safety Code Section 25220 ET SEQ., (k) Safe Drinking Water and
Toxic Enforcement Act of 1986 ("Proposition 65"), Cal. Health & Safety Code
Section 25249.5 ET SEQ., (l) Hazardous Substances Underground Storage Tank
Law, Cal. Health & Safety Code Section 25280 ET SEQ., (m) Air Resources Law,
Cal. Health & Safety Code Section 39000 ET SEQ., and (n) regulations
promulgated pursuant to said laws or any replacement thereof, or as similar
terms are defined in the federal, state and local laws, statutes,
regulations, orders or rules. Hazardous Materials shall also mean any and all
other biohazardous wastes and substances, materials and wastes which are, or
in the future become, regulated under applicable Laws for the protection of
health or the environment, or which are classified as hazardous or toxic
substances, materials or wastes, pollutants or contaminants, as defined,
listed or regulated by any federal, state or local law, regulation or order
or by common law decision, including, without limitation, (i)
trichloroethylene, tetrachloroethylene, perchloroethylene and other
chlorinated solvents, (ii) any petroleum products or factions thereof, (iii)
asbestos, (iv) polychlorinted biphenyls, (v) flammable expolsives, (vi) urea
formaldehyde, (vii) radioactive materials and waste, and (viii) materials and
wastes that are harmful to or may threaten human health, ecology or the
environment.

     (b) Notwithstanding anything to the contrary in this Lease, Tenant, at
its sole cost, shall comply with all Laws relating to the storage, use and
disposal of Hazardous Materials; PROVIDED, HOWEVER, that Tenant shall not be
responsible for contamination of the Leased Premises by Hazardous Materials
existing as of the date the Leased Premises are delivered to Tenant (whether
before or after the Scheduled Delivery Date) unless caused by Tenant. Tenant
shall not store, use or dispose of any Hazardous Materials except for those
hazardous materials listed in a Hazardous Materials management plan ("HMMP")
which Tenant shall deliver to Landlord upon execution of this Lease and
update at least annually with Landlord ("Permitted Materials") which may be
used, stored and disposed of provided (i) such Permitted Materials are used,
stored, transported, and disposed of in strict compliance with applicable
Laws, (ii) such Permitted Materials shall be limited to the materials listed
on and may be used only in the quantities specified in the HMMP, and (iii)
Tenant shall provide Landlord with copies of all material safety data sheets
and other documentation required under applicable Laws in

                                       13.

<PAGE>

connection with Tenant's use of Permitted Materials as and when such
documentation is provided to any regulatory authority having jurisdiction. In
no event shall Tenant cause or permit to be discharged into the plumbing or
sewage system of the Building or onto the land underlying or adjacent to the
Building any Hazardous Materials. Tenant shall be solely responsible for and
shall defend, indemnify, and hold Landlord and its agents harmless from and
against all claims, costs and liabilities, including attorneys' fees and
costs, arising out of or in connection with Tenant's storage, use and/or
disposal of Hazardous Materials. If the presence of Hazardous Materials on
the Leased Premises caused or permitted by Tenant results in contamination or
deterioration of water or soil, then Tenant shall promptly take any and all
action necessary to clean up such contamination, but the foregoing shall in
no event be deemed to constitute permission by Landlord to allow the presence
of such Hazardous Materials. At any time prior to the expiration of the Lease
Term if Tenant has a reasonable basis to suspect that there has been any
release or the presence of Hazardous Materials in the ground or groundwater
on the Premises which did not exist upon commencement of the Lease Term,
Tenant shall have the right to conduct appropriate tests of water and soil
and to deliver to Landlord the results of such tests to demonstrate that no
contamination in excess of permitted levels has occurred as a result of
Tenant's use of the Leased Premises. Tenant shall further be solely
responsible for, and shall defend, indemnify, and hold Landlord and its
agents harmless from and against all claims, costs and liabilities, including
attorneys' fees and costs, arising out of or in connection with any removal,
cleanup and restoration work and materials required hereunder to return the
Leased Premises any other property of whatever nature to their condition
existing prior to the appearance of the Hazardous Materials. Tenant's
obligation hereunder shall survive the termination of the Lease.

          (c) Upon termination or expiration of the Lease, Tenant at its sole
expense shall cause all Hazardous Materials placed in or about the Leased
Premises, the Building and/or the Property by Tenant, its agents,
contractors, or invitees, and all installations (whether interior or
exterior) made by or on behalf of Tenant relating to the storage, use,
disposal or transportation of Hazardous Materials to be removed from the
Property and transported for use, storage or disposal in accordance and
compliance with all Laws and other requirements respecting Hazardous
Materials used or permitted to be used by Tenant. Tenant shall apply for and
shall obtain from all appropriate regulatory authorities (including any
applicable fire department or regional water quality control board) all
permits, approvals and clearances necessary for the closure of the Property
and shall take all other action as may be required to complete the closure of
the Building and the Property. In addition, prior to vacating the Premises,
Tenant shall undertake and submit to Landlord an environmental site
assessment from an environmental consulting company reasonably acceptable to
Landlord which site assessment shall evidence Tenant's compliance with this
Paragraph 4.11.

          (d) At any time prior to expiration of the Lease Term, subject to
reasonable prior notice (not less than forty-eight (48) hours) and Tenant's
reasonable security requirements and provided such activities do not
unreasonably interfere with the conduct of Tenant's business at the Leased
Premises, Landlord shall have the right to enter in and upon the Property,
Building and Leased Premises in order to conduct appropriate tests of water
and soil to determine whether levels of any Hazardous Materials in excess of
legally permissible levels has occurred as a result of Tenant's use thereof.
Landlord shall furnish copies of all such test results and report to Tenant
and, at Tenant's option and cost, shall permit split sampling for testing and
analysis by Tenant.

                                       14.

<PAGE>

Such testing shall be at Tenant's expense if landlord has a reasonable basis
for suspecting and confirms the presence of Hazardous Materials in the soil
or surface or groundwater in, on, under, or about the Property, the Building
or the Leased Premises, which has been caused by or resulted from the
activities of Tenant, its agents, contractors, or invitees.

          (e) Landlord may voluntarily cooperate in a reasonable manner with
the efforts of all governmental agencies in reducing actual or potential
environmental damage. Tenant shall not be entitled to terminate this Lease or
to any reduction in or abatement of rent by reason of such compliance or
cooperation. Tenant agrees at all times to cooperate fully with the
requirements and recommendations of governmental agencies regulating, or
otherwise involved in, the protection of the environment.

     4.12 RULES AND REGULATIONS. In the event IntraBiotics Pharmaceuticals,
Inc. is no longer the sole tenant of the Leased Premises, Landlord shall have
the right from time to time to establish reasonable rules and regulations
and/or amendments or additions thereto respecting the use of the Leased
Premises and the Outside Areas for the care and orderly management of the
Property. Upon delivery to Tenant of a copy of such rules and regulations or
any amendments or additions thereto, Tenant shall comply with such rules and
regulations. A violation by Tenant of any of such rules and regulations shall
constitute a default by Tenant under this Lease. If there is a conflict
between the rules and regulations and any of the provisions of this Lease,
the provisions of this Lease shall prevail. Landlord shall not be responsible
or liable to Tenant for the violation of such rules and regulations by any
other tenant of the Property. Tenant with any reports of studies in
Landlord's possession relating to Hazardous Materials on the Property,
provided that Tenant shall keep all such reports and studies strictly
confidential.

                                   ARTICLE 5

                  REPAIRS, MAINTENANCE, SERVICES AND UTILITIES

     5.1 REPAIR AND MAINTENANCE. Except in the case of damage to or
destruction of the Leased Premises, the Building, the Outside Areas or the
Property caused by an act of God or other peril, in which case the provisions
of Article 10 shall control, the parties shall have the following obligations
and responsibilities with respect to the repair and maintenance of the Leased
Premises, the Building, the Outside Areas, and the Property.

          (a) TENANT'S OBLIGATIONS. Except for Landlord's obligations under
Section 5.1(b), Tenant shall, at all times during the Lease Term and at its
sole cost and expense, regularly clean and continuously keep and maintain in
good order, condition and repair, and replace when necessary, every part of
the Leased Premises, including, without limiting the generality of the
foregoing, (i) all windows (including glazing), plate glass doors and
skylights, (ii) all electrical wiring, conduits, connectors and fixtures,
(iii) all plumbing, automatic fire extinguishers and sewage systems serving
the Building and the Outside Areas, including all pipes, sprinklers, sinks,
toilets, faucets and drains, (iv) all lighting fixtures, bulbs and lamps, (v)
all parts of the heating, ventilation and air-conditioning system the "HVAC
System") serving the Building, including all ducts, pipes, vents,
compressors, fans, air handlers, thermostats, time clocks, boilers, heaters
and supply and return gills serving the Building, (vi) all operating systems,
elevators, appliances and equipment serving the Building, (vii) all fixtures,
interior

                                       15.

<PAGE>

walls, wall coverings, partitioning, ceilings and ceiling tiles, and exterior
surface of the exterior walls, (viii) the roof membrane, including flashing
and caulking, and (ix) all landscaping and parking areas, including
maintenance, patching, resealing, repairing and restriping of the parking
areas. Tenant, if requested to do so by Landlord, shall hire, at Tenant's
sole cost and expense, a licensed heating, ventilating and air conditioning
contractor to regularly and periodically (not less frequently than every
three months) inspect and perform required maintenance on the HVAC System
serving the Leased Premises, or alternatively, Landlord may, at its election,
contract in its name with Tenant jointly for such regular and periodic
inspections of and maintenance on such heating, ventilating and air
conditioning equipment and systems and charge to Tenant, as Additional Rent,
the cost thereof, Tenant, if requested to do so by Landlord, shall hire, at
Tenant's sole cost and expense, a licensed roofing contractor to regularly
and periodically (not less frequently than every six months) inspect and
perform required maintenance on the roof of the Leased Premises, or
alternatively, Landlord may, at its election, contract in its own name for
such regular and periodic inspections of and maintenance on the roof and
charge to Tenant, as Additional Rent, the cost thereof. Tenant shall, at all
times during the Lease Term, keep the outside Areas in a clean and safe
condition. Tenant shall regularly and periodically sweep and clean the
driveways and parking areas. Tenant shall, at its sole cost and expense,
repair all damaged to the leased Premises, the Building, the Outside Areas or
the Property caused by the activities of Tenant, its employees, invitees or
contractors promptly following written notice from Landlord to so repair such
damages, except to the extent covered by any insurance proceeds received by
landlord under its casualty insurance policy. If Tenant shall fail to perform
the required maintenance or fail to make repairs required of it pursuant to
this paragraph within a reasonable period or time following notice from
Landlord to do so, then Landlord may, at its election and without waiving any
other remedy it may otherwise have under this Lease or at law, perform such
maintenance or make such repairs and charge to Tenant, as Additional Rent,
the costs so incurred by Landlord for same. All glass within or a part of the
Leased Premises, both interior and exterior, is at the sole risk of Tenant
and any broken glass shall promptly be replaced by Tenant at Tenant's expense
with glass of the same kind, size and quality.

          (B) LANDLORD'S OBLIGATION. Landlord shall, at all times during the
Lease Term, maintain in good condition and repair the foundation, roof
structure, the structural portion of load-bearing and exterior walls of the
Building. Landlord shall have the right, in its sole discretion, upon written
notice to Tenant to assume the obligation to maintain the Outside Areas and
exterior surface of the exterior walls of the Building. The provisions of
this subparagraph (b) shall in no way limit the right of Landlord to charge
to Tenant, as Additional Rent pursuant to Article 3 (to the extent permitted
pursuant to Article 3), the costs incurred by Landlord in performing such
maintenance and/or making such repairs.

     5.2 UTILITIES. Tenant shall arrange at its sole cost and expense and in
its own name, for the supply of gas and electricity to the Leased Premises.
In the event that such services are not separately metered, Tenant shall, at
its sole expense, cause such meters to be installed. Landlord shall maintain
the water meter(s) in its own name; PROVIDED, HOWEVER, that if at any time
during the Lease Term Landlord shall require Tenant to put the water service
in Tenant's name, Tenant shall do so at Tenant's sole cost. Tenant shall be
responsible for determining if the local supplier of water, gas and
electricity can supply the needs of Tenant and whether or not the existing
water, gas and electrical distribution systems within the Building and the
Leased Premises are adequate for Tenant's needs. Tenant shall be responsible
for determining if the

                                       16.

<PAGE>

existing sanitary and storm sewer systems now servicing the Leased Premises
and the Property are adequate for Tenant's needs. Tenant shall pay all
charges for water, gas, electricity and storm and sanitary sewer services as
so supplied to the Leased Premises, irrespective of whether or not the
services are maintained in Landlord's or Tenant's name.

     5.3 SECURITY. Tenant acknowledges that Landlord has not undertaken any
duty whatsoever to provide security for the Leased Premises, the Building,
the Outside Areas or the Property and, accordingly, Landlord is not
responsible for the security of same or the protection of Tenant's property
or Tenant's employees, invitees or contractors. To the extent Tenant
determines that such security or protection services are advisable or
necessary, Tenant shall arrange for and pay the costs of providing same.

     5.4 ENERGY AND RESOURCE CONSUMPTION. Landlord may voluntarily cooperate
in a reasonable manner with the efforts of governmental agencies and/or
utility suppliers in reducing energy or other resource consumption within the
Property. Tenant shall not be entitled to terminate this Lease or to any
reduction in or abatement of rent by reason of such compliance or
cooperation. Tenant agrees at all times to cooperate fully with landlord and
to abide by all reasonable rules established by Landlord (i) in order to
maximize the efficient operation of the electrical, heating, ventilating and
air conditioning systems and all other energy or other resource consumption
systems with the Property provided Landlord does not interfere with the
conduct of Tenant's laboratory activities conducted from the Premises, and/or
(ii) in order to comply with the requirements and recommendations of utility
suppliers and governmental agencies regulating the consumption of energy
and/or other resources.

     5.5 LIMITATION OF LANDLORD'S LIABILITY.  Landlord shall not be liable to
Tenant for injury to Tenant, its employees, agents, invitees or contractors,
damage to Tenant's property or loss of Tenant's business or profits, nor
shall Tenant be entitled to terminate this Lease or to any reduction in or
abatement of rent by reason of (i) Landlord's failure to provide security
services or systems within the Property for the protection of the Leased
Premises, the Building or the Outside Areas, or the protection of Tenant's
property or Tenant's employees, invitees, agents or contractors, or (ii)
Landlord's failure to perform any maintenance or repairs to the Leased
Premises, the Building, the Outside Areas or the Property until Tenants shall
have first notified Landlord, in writing, of the need for such maintenance or
repairs, and then only after Landlord shall have had a reasonable period of
time following its receipt of such notice within which to perform such
maintenance or repairs, or (iii) any failure, interruption, rationing or
other curtailment in the supply of water, electric current, gas or other
utility service to the Leased Premises, the Building, the Outside Areas or
the Property from whatever cause (other than Landlord's sole active
negligence or willful misconduct), or (iv) the unauthorized intrusion or
entry into the Leased Premises by third parties (other than Landlord).

                                   ARTICLE 6

                          ALTERATIONS AND IMPROVEMENTS

     6.1 BY TENANT. Tenant shall not make any alterations to or modifications
of the Leased Premises or construct any improvements within the Leased
Premises until Landlord shall have first approved, in writing, the plans and
specifications therefor, which approval shall not be

                                       17.

<PAGE>

unreasonably withheld. All such modifications, alterations or improvements,
once so approved, shall be made, constructed or installed by Tenant at
tenant's expense (including all permit fees and governmental charges related
thereto), using a licensed contractor first approved by Landlord, in
substantial compliance with the Landlord-approved plans and specifications
therefor. All work undertaken by Tenant shall be done in accordance with all
Laws and in a good and workmanlike manner using new materials of good
quality. Tenant shall not commence the making of any such modifications or
alterations or the construction of any such improvements until (i) all
required governmental approvals and permits shall have been obtained, (ii)
all requirements regarding insurance imposed by this Lease have been
satisfied, (iii) Tenant shall have given Landlord at least five business days
prior written notice of its intention to commence such work so that Landlord
may post and file notices of non-responsibility, and (iv) if requested by
landlord, Tenant shall have obtained contingent liability and broad form
builder's risk insurance in an amount satisfactory to Landlord in its
reasonable discretion to cover any perils relating to the proposed work not
covered by insurance carried by Tenant pursuant to Article 9. In no event
shall Tenant make any modification, alterations or improvements whatsoever to
the Outside Areas or the exterior or structural components of the Building
including, without limitation, any cuts or penetrations in the floor, roof or
exterior walls of the leased Premises. As used in this Article, the term
"modifications, alterations and/or improvements" shall include, without
limitation, the installation of additional electrical outlets, overhead
lighting fixtures, drains, sinks, partitions, doorways, or the like.
Notwithstanding the foregoing, Tenant, without Landlord's prior written
consent, shall be permitted to make non-structural alterations to the
Building, PROVIDED THAT: (a) such alterations do not exceed $10,000
individually or $50,000 in the aggregate, (b) Tenant shall timely provide
Landlord the notice required pursuant to Paragraph 4.9 above, and (c) Tenant
shall notify Landlord in writing within thirty (30) days of completion of the
alteration and deliver to Landlord a set of the plans and specifications
therefor, either "as built" or marked to show construction changes made.
Tenant shall, upon Landlord's request, remove all alterations at the
termination of the Lease and restore the Leased Premises to their condition
prior to such alteration; PROVIDED, HOWEVER, that Tenant may request by
written notice to Landlord prior to making any alteration whether Landlord
shall require Tenant to remove such alteration upon termination of the Lease.
In such event, Landlord shall be deemed to have approved Tenant's surrender
within thirty (30) days of such written request by Tenant indicating that
Landlord will require removal of such alteration upon termination of the
Lease.

     6.2 OWNERSHIP OF IMPROVEMENTS. All modifications, alterations and
improvements made or added to the Leased Premises by Tenant (other than
Tenant's inventory, equipment, movable furniture, wall decorations, trade
fixtures, lab benches and those items listed on SCHEDULE 6.2 hereof, which
Tenant shall have the right from time to time to update and revise upon
written notice to Landlord) shall be deemed real property and a part of the
Leased Premises, but shall remain the property of Tenant during the Lease.
Any such modifications, alterations or improvements, once completed, shall
not be altered or removed from the Leased Premises during the Lease Term
without Landlord's written approval first obtained in accordance with the
provisions of Paragraph 6.1 above. At the expiration or sooner termination of
this Lease, all such modifications, alterations and improvements other than
Tenant's inventory, equipment, movable furniture, wall decorations and trade
fixtures, shall automatically become the property of Landlord and shall be
surrendered to Landlord as part of the Leased Premises as required pursuant
to Article 2, unless Landlord shall require Tenant to remove any of

                                       18.

<PAGE>

such modifications, alterations or improvements in accordance with the
provisions of Article 2, in which case Tenant shall so remove same. Landlord
shall have no obligations to reimburse Tenant for all or any portion of the
cost or value of any such modifications, alterations or improvements so
surrendered to Landlord. All modifications, alterations or improvements which
are installed or constructed on or attached to the Leased Premises by
landlord and/or at Landlord's expense shall be deemed real property and a
part of the Leased Premises and shall be property of Landlord. All lighting,
plumbing, electrical, heating, ventilating and air conditioning fixtures,
partitioning, window coverings, wall coverings and floor coverings installed
by Tenant shall be deemed improvements to the Leased Premises and not trade
fixtures of Tenant.

     6.3 ALTERATIONS REQUIRED BY LAW. Tenant shall make all modifications,
alterations and improvements to the Leased Premises, at its sole cost, that
are required by any Law because of (i) Tenant's use or occupancy of the
Leased Premises, the Building, the Outside Areas or the Property, (ii)
Tenant's application for any permit or governmental approval, or (iii)
Tenant's making of any modifications, alterations or improvements to or
within the Leased Premises. If Landlord shall, at any time during the Lease
Term, be required by any governmental authority to make any modifications,
alterations or improvements to the Building or the Property, the cost
incurred by landlord in making such modifications, alterations or
improvements, including interest at a rate equal to the greater of (a) 12%,
or (b) the sum of that rate quoted by Wells Fargo Bank, N.T. & S.A. from time
to time as its prime rate, plus two percent (2%) ("Wells Prime Plus Two"),
shall be amortized by Landlord over the useful life of such modifications,
alterations or improvements, as determined in accordance with generally
accepted accounting principles, and the monthly amortized cost of such
modifications, alterations and improvements as so amortized shall be
considered a Property Maintenance Cost.

     6.4 LIENS. Tenant shall keep the Property and every part thereof free
from any lien, and shall pay when due all bills arising out of any work
performed, materials furnished, or obligations incurred by Tenant, its
agents, employees or contractors relating to the Property. If any such claim
of lien is recorded against Tenant's interest in this Lease, the Property or
any part thereof, Tenant shall bond against, discharge or otherwise cause
such lien to be entirely released within ten days after the same has been
recorded. Tenant's failure to do so shall be conclusively deemed a material
default under the terms of this Lease. Notwithstanding the foregoing, Tenant
shall be allowed to create consensual security interests in equipment
purchased or leased by Tenant and installed in the Leased Premises ("Financed
Equipment"), and Landlord shall waive any statutory or other lien rights that
it may have in such Financed Equipment in favor of the lender or lessor
("Equipment Financier") providing financing for the acquisition of the
Financed Equipment, subject to satisfaction of each of the following: (i)
such waiver shall be evidenced in a written waiver in form and substance
satisfactory to Landlord, (ii) Tenant and the Equipment Financier each shall
agree that it shall repair any damage and restore the Leased Premises to
their prior condition upon the removal from the Leased Premises of any
Financed Equipment and, if required by Landlord, shall post bonds or other
security to secure such obligation, (iii) the Equipment Financier shall
deliver written notice to Landlord not less than five (5) business days prior
to any entry upon the Leased Premises by such Equipment Financier or its
employees, agents or contractors, and (iv) no auction or sale of the Financed
Equipment shall be conducted from the Leased Premises. Landlord hereby
approves the form of waiver of Tenant rights attached hereto as Exhibit E.

                                       19.

<PAGE>


                                   ARTICLE 7

                       ASSIGNMENT AND SUBLETTING BY TENANT

     7.1  BY TENANT. Tenant shall not sublet the Leased Premises or any
portion thereof or assign its interest in this Lease, whether voluntarily or
by operation of law, without Landlord's prior written consent which shall not
be unreasonably withheld. Any attempted subletting or assignment without
Landlord's prior written consent, at landlord's election, shall constitute a
default by Tenant under the terms of this Lease. The acceptance of rent by
Landlord from any person or entity other than Tenant, or the acceptance of
rent by landlord from Tenant with knowledge of a violation of the provisions
of this paragraph, shall not be deemed to be a waiver by Landlord of any
provisions of this Article or this Lease or to be a consent to any subletting
by Tenant or any assignment of Tenant's interest in this Lease. Without
limiting the circumstances in which it may be reasonable for Landlord to
withhold its consent to an assignment or subletting, Landlord and Tenant
acknowledge that it shall be reasonable for Landlord to withhold its consent
in the following instances:

          (a)  the proposed assignee or sublessee is a governmental agency;

          (b)  in Landlord's reasonable judgment, the use of the Premises by
the proposed assignee or sublessee would involve occupancy by other than
primarily general office or software engineering personnel, would entail any
alterations which would lessen the value of the leasehold improvements in the
Premises, or would require increased services by Landlord;

          (c)  in Landlord's reasonable judgment, the financial worth of the
proposed assignee does not meet the credit standards applied by Landlord;

          (d)  the proposed assignee or sublessee (or any of its affiliates)
has been in material default under a lease, has been in litigation with a
previous landlord, or in the ten years prior to the assignment or sublease
has filed for bankruptcy protection, has been the subject of an involuntary
bankruptcy, or has been adjudged insolvent;

          (e)  Landlord has experienced a previous default by or is in
litigation with the proposed assignee or sublessee;

          (f)  in Landlord's reasonable judgment, the Premises, or the
relevant part thereof, will be used in a manner that will violate any
negative covenant as to use contained in this Lease;

          (g)  the use of the Premises by the proposed assignee or sublessee
will violate any applicable law, ordinance or regulation;

          (h)  the proposed assignee or sublessee is, as of the date of this
Lease, a tenant in the Building;

          (i)  the proposed assignment or sublease fails to include all of
the terms and provisions required to be included therein pursuant to this
Article 7;

                                       20.

<PAGE>

          (j)  Tenant is in default of any obligation of Tenant under this
Lease, or Tenant has defaulted under this Lease on three or more occasions
during the 12 months preceding the date that Tenant shall request consent; or

          (k)  in the case of a subletting of less than the entire Premises,
if the subletting would result in the division of the Premises into more than
two subparcels or would require improvements to be made outside of the
Premises.

     7.2  MERGER OR REORGANIZATION.  If Tenant is a corporation, any
dissolution, merger, consolidation or other reorganization of Tenant, or the
sale or other transfer in the aggregate over the Lease Term of a controlling
percentage of the capital stock of Tenant, shall be deemed a voluntary
assignment of Tenant's interest in this Lease. The phrase "controlling
percentage" means the ownership of and the right to vote stock possessing
more than fifty percent of the total combined voting power of all classes of
Tenant's capital stock issued, outstanding and entitled to vote for the
election of directors. If Tenant is a partnership, a withdrawal or change,
voluntary, involuntary or by operation of Law, of any general partner, or the
dissolution of the partnership, shall be deemed a voluntary assignment of
Tenant's interest in this Lease. Notwithstanding the foregoing, the
provisions of this Section 7.2 shall not apply to Tenant if (a) it is a
corporation the stock of which is listed on a national securities exchange
(as this market, or (b) Tenant merges with or into another corporation so
long as (i) Tenant gives written notice to Landlord prior to the effective
date of such merger, (ii) the surviving corporation has (and Tenant provides
Landlord prior to the effective date of such merger, (ii) the surviving
corporation and (and Tenant provides Landlord with financial statements
confirming that the surviving corporation has) a net worth of not less than
the greater of (A) the net worth of Tenant as of the date of this Lease, or
(B) the net worth of Tenant immediately prior to the effective date of such
merger, and (iii) the surviving entity executes an assumption of lease or
other documentation acceptable to Landlord confirming that the surviving
entity has assumed and agrees to perform its obligations under and is bound
by the terms of this Lease.

     7.3  LANDLORD'S ELECTION.  If Tenant shall desire to assign its interest
under the Lease or to sublet the Leased Premises, Tenant must first notify
Landlord, in writing, of its intent to so assign or sublet, at least thirty
(30) days in advance of the date it intends to so assign its interest in this
Lease or sublet the Leased Premises but not sooner than one hundred eighty
days in advance of such date, specifying in detail the terms of such proposed
assignment or subletting, including the name of the proposed assignee or
sublessee, the property assignee's or sublessee's intended use of the Leased
Premises, current financial statements (including a balance sheet, income
statement and statement of cash flow, all prepared in accordance with
generally accepted accounting principles) of such proposed assignee or
sublessee, the form of documents to be used in effectuating such assignment
or subletting and such other information as Landlord may reasonably request.
Landlord shall have a period of ten (10) business days following receipt of
such notice and the required information within which to do one of the
following (i) consent to such requested assignment or subletting subject to
Tenant's compliance with the conditions set forth in Paragraph 7.4 below, or
(ii) refuse to so consent to such requested assignment or subletting,
provided that such consent shall not be unreasonably refused, or (iii)
terminate this Lease as to the portion (including all) of the Leased Premises
that is the subject of the proposed assignment or subletting. During such ten
(10) business day period, Tenant covenants and agrees to supply to Landlord,
upon request, all necessary relevant information which Landlord may

                                       21.

<PAGE>

reasonably request respecting such proposed assignment or subletting and/or
the proposed assignee or sublessee. If Landlord shall elect to terminate this
Lease pursuant to the foregoing Tenant shall have ten (10) business days
after receipt of Landlord's written notice hereunder to notify Landlord in
writing that Tenant elects not to sublease or assign its interest under this
lease and therefore to reinstate the lease.

     7.4  CONDITIONS TO LANDLORD'S CONSENT.  If Landlord elects to consent,
or shall have been ordered to so consent by a court of competent
jurisdiction, to such requested assignment or subletting, such consent shall
be expressly conditioned upon the occurrence of each of the conditions below
set forth, and any purported assignment or subletting made or ordered prior
to the full and complete satisfaction of each of the following conditions
shall be void and, at the election of Landlord, which election may be
exercised at any time following such a purported assignment or subletting but
prior to the satisfaction of each of the stated conditions, shall constitute
a material default by Tenant under this Lease until cured by satisfying in
full each such condition by the assignee or sublessee. The conditions are as
follows:

          (a)  Landlord having approved in form and substance the assignment
or sublease agreement and any ancillary documents, which approval shall not
be unreasonably withheld by Landlord if the requirements of this Article 7
are otherwise complied with.

          (b)  Each such sublessee or assignee having agreed, in writing
satisfactory to landlord and its counsel and for the benefit of Landlord, to
assume, to be bound by, and to perform the obligations of this Lease to be
performed by Tenant which relate to space being subleased.

          (c)  Tenant shall not be under any existing event of default under
the terms of this Lease.

          (d)  Tenant having reimbursed to Landlord all reasonable costs and
reasonable attorneys' fees incurred by Landlord (provided such attorneys fees
shall not exceed One Thousand Dollars ($1,000)) in conjunction with the
processing and documentation of any such requested subletting or assignment.

          (e)  Tenant having delivered to Landlord a complete and
fully-executed duplicate original of such sublease agreement or assignment
agreement (as applicable) and all related agreements.

          (f)  Tenant having paid, or having agreed in writing to pay as to
future payments, to Landlord fifty percent (50%) of all assignment
consideration or excess rentals to be paid to Tenant or to any other on
Tenant's behalf or for Tenant's benefit for such assignment or subletting as
follows:

                 (i)     If Tenant assigns it interest under this Lease and
if all or a portion of the consideration for such assignment is to be paid by
the assignee at the time of the assignment, that Tenant shall have paid to
Landlord and Landlord shall have received an amount equal to fifty percent
(50%) of the assignment consideration so paid or to be paid (whichever is the
greater) at the time of the assignment by the assignee; or

                                       22.

<PAGE>

                (ii)     If Tenant assigns it interest under this Lease and
if Tenant is to receive all or a portion of the consideration for such
assignment in future installments, that Tenant and Tenant's assignee shall
have entered into a written agreement with and for the benefit of landlord
satisfactory to Landlord and its counsel whereby Tenant and Tenant's assignee
jointly agree to pay to Landlord an amount equal to fifty percent (50%) of
all such future assignment consideration installments to be paid by such
assignee as and when such assignment consideration is so paid.

               (iii)     If Tenant subleases the Leased Premises, that Tenant
and Tenant's sublessee shall have entered into a written agreement with and
for the benefit of Landlord satisfactory to Landlord and its counsel whereby
Tenant and Tenant's sublessee jointly agree to pay to Landlord fifty percent
(50%) of all excess rentals to be paid by such sublessee as and when such
excess rentals are so paid.

     7.5  ASSIGNMENT CONSIDERATION AND EXCESS RENTALS DEFINED.  For purposes
of this Article, including any amendment to this Article by way of addendum
or other writing, the term "assignment consideration" shall mean all
consideration to be paid by the assignee to Tenant or to any other party on
Tenant's behalf or for Tenant's benefit as consideration for such assignment,
without deduction for any commissions paid by Tenant or any other costs or
expenses (including, without limitation, tenant improvements, capital
improvements, building upgrades, permit fees, attorneys' fees, and other
consultants' fees) incurred by Tenant in connection with such assignment, and
the term "excess rentals" shall mean all consideration to be paid by the
sublessee to Tenant or to any other party on Tenant's behalf or for Tenant's
benefit for the sublease of the Leased Premises in excess of the rent due to
Landlord under the terms of this Lease for the same period, without deduction
for any commissions paid by Tenant or any other costs or expenses (including,
without limitation, tenant improvements, capital improvements, building
upgrades, permit fees, attorneys' fees, and other consultants' fees) incurred
by Tenant in connection with such sublease. Tenant agrees that the portion of
any assignment consideration and/or excess rentals arising from any
assignment or subletting by Tenant which is to be paid to Landlord pursuant
to this Article now is and shall then be the property of landlord and not the
property of Tenant.

     7.6  PAYMENTS.  All payments required by this Article to be made to
Landlord shall be made in cash in full as and when they become due. At the
time Tenant, Tenant's assignee or sublessee makes each such payment to
Landlord, Tenant or Tenant's assignee or sublessee, as the case may be, shall
deliver to Landlord an itemized statement in reasonable detail showing the
method by which the amount due Landlord was calculated and certified by the
party making such payment as true and correct.

     7.7  GOOD FAITH.  The rights granted to Tenant by this Article are
granted in consideration of Tenant's express covenant that all pertinent
allocations which are made by Tenant between the rental value of the Leased
Premises and the value of any of Tenant's personal property which may be
conveyed or leased generally concurrently with and which may reasonably be
considered a part of the same transaction as the permitted assignment or
subletting shall be made fairly, honestly and in good faith. If Tenant shall
breach this covenant, Landlord may immediately declare Tenant to be in
default under the terms of this Lease and terminate this

                                       23.

<PAGE>

Lease and/or exercise any other rights and remedies Landlord would have under
the terms of this Lease in the case of a material default by Tenant under
this Lease.

     7.8  EFFECT OF LANDLORD'S CONSENT.  No subletting or assignment, even
with the consent of Landlord, shall relieve Tenant of its personal and
primary obligation to pay rent and to perform all of the other obligations to
be performed by Tenant hereunder. Consent by Landlord to one or more
assignments of Tenant's interest in this Lease or to one or more sublettings
of the Leased Premises shall not be deemed to be a consent to any subsequent
assignment or subletting. If Landlord shall have been ordered by a court of
competent jurisdiction to consent to a requested assignment or subletting, or
such and assignment or subletting shall have been ordered by a court of
competent jurisdiction over the objections of Landlord, such assignment or
subletting shall not be binding between the assignee (or sublessee) and
Landlord until such time as all conditions set forth in Paragraph 7.4 above
have been fully satisfied (to the extent not then satisfied) by the assignee
or sublessee, including, without limitation, the payment to Landlord of all
agreed assignment considerations and/or excess rentals then due Landlord.

                                  ARTICLE 8

              LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY

     8.1  LIMITATION ON LANDLORD'S LIABILITY AND RELEASE.  Landlord shall not
be liable to Tenant for, and Tenant hereby releases Landlord and its
partners, principals, members, officers, agents, employees, lenders,
attorneys, and consultants from, any and all liability whether in contract,
tort or on any other basis, for any injury to or any damage sustained by
Tenant., Tenant's agents, employees, contractors or invitees, any damage to
Tenant's property, or any loss to Tenant's business, loss of Tenant's profits
or other financial loss of Tenant resulting from or attributable to the
condition of, the management of, the repair or maintenance of, the protection
or, the supply of services or utilities to, the damage in or destruction of
the Leased Premises, the Building, the Property or the Outside Areas,
including without limitation (i) the failure, interruption, rationing or
other curtailment or cessation in the supply of electricity, water, gas or
other utility service to the Property, the Building or the Leased Premises;
(ii) the vandalism or forcible entry into the Building or the Leased
Premises; (iii) the penetration of water into or onto any portion of the
Leased Premises; (iv) the failure to provide security and/or adequate
lighting in or about the Property, the Building or the Leased Premises; (v)
the existence of any design or construction defects within the Property, the
Building or the Leased Premises; (vi) the failure of any mechanical systems
to function properly (such as the HVAC systems); (vii) the blockage of access
to any portion of the Property, the Building or the Leased Premises, except
that Tenant does not so release Landlord from such liability to the extent
such damage was promixately caused by Landlord's active negligence, willful
misconduct, or Landlord's failure to perform an obligation expressly
undertaken pursuant to this Lease after a reasonable period of time shall
have lapsed following receipt of written notice from Tenant to so perform
such obligation. In this regard, Tenant acknowledges that it is fully
apprised of the provisions of Law relating to releases, and particularly to
those provisions contained in Section 1542 of the California Civil Code which
reads as follows:

                                       24.

<PAGE>

         "A general release does not extend to claims which the creditor does
         not know or suspect to exist in his favor at the time of executing the
         release, which if known by him must have materially affected his
         settlement with the debtor."

Notwithstanding such statutory provision, and for the purpose of implementing a
full and complete release and discharge, Tenant hereby (i) waives the benefit of
such statutory provision and (ii) acknowledges that, subject to the exceptions
specifically set forth herein, the release and discharge set forth in this
paragraph is a full and complete settlement and release and discharge of all
claims and is intend to include in its effect, without limitation, all claims
which Tenant, as of the date hereof, does not know of or suspect to exist in its
favor.

     8.2  TENANT'S INDEMNIFICATION OF LANDLORD.  Tenant shall defend with
competent counsel reasonably satisfactory to Landlord any claims made or
legal actions filed or threatened against Landlord with respect to the
violation of any law, or the death, bodily injury, personal injury, property
damage, or interference with contractual or property rights suffered by any
third party occurring within the Leased Premises or resulting from Tenant's
use or occupancy of the Leased Premises, the Building or the Outside Areas,
or resulting from Tenant's activities in or about the Leased Premises, the
Building, the Outside Areas or the Property, and Tenant shall indemnify and
hold Landlord, Landlord's partners, principals, members, employees, agents
and contractors harmless from any loss liability, penalties, or expense
whatsoever (including any loss attributable to vacant space which otherwise
would have been leased, but for such activities) resulting therefrom, except
to the extent proximately caused by the active negligence or willful
misconduct of Landlord. This indemnity agreement shall survive until the
latter to occur of (i) the date of expiration, or sooner termination, of this
Lease, or (ii) the date Tenant actually vacates the Leased Premises.

                                   ARTICLE 9

                                   INSURANCE

     9.1  TENANT'S INSURANCE.  Tenant shall maintain insurance complying with
all of the following:

          (a)  Tenant shall procure, pay for and keep in full force and
effect, at all times during the Lease Term, the following:

                 (i)     Commercial general liability on claims made from
insuring Tenant against liability for personal injury, bodily injury, death
and damage to property occurring within the Leased Premises, or resulting
from Tenant's use or occupancy of the Leased Premises, the Building, the
Outside Areas or the Property, or resulting from Tenant's activities in or
about the Leased Premises or the Property, with coverage in an amount equal
to Tenant's Required Liability Coverage (as set forth in Article 1), which
insurance shall contain a "broad form liability" endorsement insuring
Tenant's performance of Tenant's obligations to indemnify Landlord as
contained in this lease. Tenant shall provide tail coverage on the commercial
general liability policy and provide proof of such coverage for the period of
all statute of limitations with respect to any possible claims under such
policy. This obligation shall survive the termination or expiration of the
Lease Term. If Tenant does not provide such coverage upon

                                       25.

<PAGE>

termination of the Lease or expiration of the Lease Term, Landlord may use
the Security Deposit to provide such coverage.

                (ii)     Fire and property damage insurance in so-called
"fire and extended coverage" form insuring Tenant against loss from physical
damage to Tenant's personal property, inventory, trade fixtures and
improvements within the Leased Premises with coverage for the full actual
replacement cost thereof;

               (iii)     Pressure vessel insurance, if applicable;

                (iv)     Product liability insurance (including, without
limitation, if food and/or beverages are distributed, sold and/or consumed
within the Leased Premises, to the extent obtainable, coverage for liability
arising out of the distribution, sale, use or consumption of food and/or
beverages (including alcoholic beverages, if applicable) at the Leased
Premises for not less than Tenant's Required Liability Coverage (as set forth
in Article 1);

                 (v)     Workers' compensation insurance and any other
employee benefit insurance sufficient to comply wit hall laws; and

                (vi)     With respect to making of alterations or the
construction of improvements or the like undertaken by Tenant, contingent
liability and builder's risk insurance, in an amount and with coverage
reasonably satisfactory to Landlord.

          (b)  Each polity of liability insurance required to be carried by
Tenant pursuant to this paragraph or actually carried by Tenant with respect
to the Leased Premises or the Property; (i) shall, except with respect to
insurance required by subparagraph (a)(vi) above, name Landlord, and such
others as are designated by Landlord, as additional insureds; (ii) shall be
primary insurance providing that the insurer shall be liable for the full
amount of the loss, up to and including the total amount of liability set
forth in the declaration of coverage, without the right of contribution from
or prior payment by any other insurance coverage of Landlord; (iii) shall be
in a form satisfactory to Landlord; (iv) shall be carried with companies
reasonably acceptable to landlord with Best's ratings of at least A and XI;
(v) shall provide that such policy shall not be subject to cancellation,
lapse, reduction in scope, amount of coverage or quality except after at
least thirty (30) days prior written notice to Landlord, and (vi) shall
contain a so-called "severability" or "cross liability" endorsement. Each
policy of property insurance maintained by Tenant with respect to the Leased
Premises or the Property or any property therein (i) shall provide that such
policy shall not be subject to cancellation, lapse or change except after at
least thirty day prior written notice to Landlord and (ii) shall contain a
waiver and/or a permission to waive by the insurer of any right of
subrogation against Landlord, its partners, principals, members, officers,
employees, agents and contractors, which might arise by reason of any payment
under such policy or by reason of any act or omission of Landlord, its
partners, principals, members, officers, employees, agents and contractors.

          (c)  Prior to the time Tenant or any of its contractors enters the
Leased Premises, Tenant shall deliver to Landlord, with respect to each
policy of insurance required to be carried by Tenant pursuant to this
Article, a copy of such policy (appropriately authenticated by the insurer as
having been issued, premium paid) or a certificate of the insurer certifying
in

                                       26.

<PAGE>

form satisfactory to landlord that a policy has been issued, premium paid,
providing the coverage required by this Paragraph and containing the
provisions specified herein. With respect to each renewal or replacement of
any such insurance, the requirements of this Paragraph must be complied with
prior to the expiration or cancellation of the policies being renewed or
replaced. Landlord may, at any time and from time to time, inspect and/or
copy any and all insurance policies required to be carried by Tenant pursuant
to this Article. If Landlord's Lender, insurance broker, and advisor or
counsel reasonably determines at any time that the amount of coverage set
forth in Paragraph 9.1(a) for any policy of insurance Tenant is required to
carry pursuant to this Article is not adequate, then Tenant shall increase
the amount of coverage for such insurance to such greater amount as
Landlord's Lender, insurance broker, advisor or counsel reasonably deems
adequate.

     9.2  LANDLORD'S INSURANCE.  With respect to insurance maintained by
Landlord:

          (a)  Landlord shall maintain, as the minimum coverage required of
it by this lease, fire and property damage insurance in so-called "fire and
extended coverage" form insuring Landlord (and such others as Landlord may
designate) against loss from physical damage to the Building with coverage of
not less than one hundred percent (100%) of the full actual replacement cost
hereof and against loss of rents for a period of not less than 12 months.
Such fire and property damage insurance, at Landlord's election but without
any requirements on landlord's behalf to do so, (i) may be written in
so-called "all-risk" form, excluding only those perils commonly excluded from
such coverage by Landlord's then property damage insurer; (ii) may provide
coverage for physical damage to the improvements so insured for up to the
entire full actual replacement cost thereof; (iii) may be endorsed to cover
loss or damage caused by any additional perils against which Landlord may
elect to insure, including earthquake and/or flood; and /or (iv) may provide
coverage for loss of rents for a period of up to twelve months. Landlord
shall not be required to cause such insurance to cover any of Tenant's
personal property, inventory, and trade fixtures, or any modifications,
alterations or improvements made or constructed by Tenant to or within the
Leased Premises. Landlord shall use commercially reasonable efforts to obtain
such insurance at competitive rates.

          (b)  Landlord shall maintain commercial general liability insurance
insuring Landlord (and such others as are designated by Landlord) against
liability for personal injury, bodily injury, death, and damage to property
occurring in, on or about, or resulting from the use or occupancy of the
Property, or any portion thereof, with combined single limit coverage of at
least Three Million dollars ($3,000,000). Landlord may carry such greater
coverage as Landlord or Landlord's Lender, insurance broker, advisor or
counsel may from time to time determine is reasonably necessary for the
adequate protection of Landlord and the Property.

          (c)  Landlord may maintain any other insurance which in the opinion
of its insurance broker, advisor or legal counsel is prudent to carry under
the given circumstances, provided such insurance is commonly carried by
owners of property similarly situated and operating under similar
circumstances.

     9.3  MUTUAL WAIVER OF SUBROGATION.  Landlord hereby releases Tenant, and
Tenant hereby releases Landlord and its respective partners, principals,
members, officers, agents, employees and servants, from any and all liability
for loss, damage or injury to the property of

                                       27.

<PAGE>

the other in or about the Leased Premises or the Property which is caused by
or results from a peril or event or happening which is covered by insurance
actually carried and in force at the time of the loss by the party sustaining
such loss; PROVIDED, HOWEVER, that such waiver shall be effective only to the
extent permitted by the insurance covering such loss and to the extent such
insurance is not prejudiced thereby.

                                   ARTICLE 10

                           DAMAGE TO LEASED PREMISES

     10.1  LANDLORD'S DUTY TO RESTORE.  If the Leased Premises, the Building
or the Outside Area are damaged by any peril after the Effective Date of this
Lease, Landlord shall restore the same, as and when required by this
paragraph, unless this Lease is terminated by Landlord pursuant to Paragraph
10.3 or by Tenant pursuant to Paragraph 10.4. If this Lease is not so
terminated, then upon the issuance of all necessary governmental permits,
Landlord shall commence and diligently prosecute to completion the
restoration of the Leased Premises, the Building or the Outside Area, as the
case may be, to the extent then allowed by law to substantially the same
condition in which it existed as of the Lease Commencement Date. Landlord's
obligation to restore shall be limited to actual receipt of insurance
proceeds and to the improvements constructed by Landlord. Landlord shall have
no obligation to restore any improvements made by Tenant to the Leased
Premises or any of Tenant's personal property, inventory or trade fixtures.
Upon completion of the restoration by Landlord, Tenant shall forthwith
replace or fully repair all of Tenant's personal property, inventory, trade
fixtures and other improvements constructed by Tenant to like or similar
conditions as existed at the time immediately prior to such damage or
destruction, subject to delays resulting from disbursement of insurance
proceeds by Tenant's insurer. So long as the damage is not the result of the
act or omission of Tenant and Tenant has maintained in full force and effect
all policies of insurance required to be maintained by Tenant pursuant to
this Lease, Tenant shall not be required to expend funds to restore its
personal property, inventory, trade fixtures and other non-permanent
improvements constructed by Tenant to the extent the cost of restoration
exceeds the insurance proceeds paid to Tenant (plus any deductible or
self-insured retention by Tenant).

    10.2  INSURANCE PROCEEDS.  All insurance proceeds available from the fire
and property damage insurance carried by Landlord shall be paid to and become
the property of Landlord. If this Lease is terminated pursuant to either
Paragraph 10.3 or 10.4, all insurance proceeds available from insurance
carried by Tenant which cover loss of property that is Landlord's property or
would become Landlord's property on termination of this Lease shall be paid
to and become the property of Landlord, and the remainder of such proceeds
shall be paid to and become the property of Tenant. If this Lease is not
terminated pursuant to either Paragraph 10.3 or 10.4, all insurance proceeds
available from insurance carried by Tenant which cover loss to property that
is Landlord's property shall be paid to and become the property of landlord,
and all proceeds available from such insurance which cover loss to property
which would only become the property of Landlord upon termination of this
lease shall be paid and remain the property of Tenant. The determination of
Landlord's property and Tenant's property shall be made pursuant to Paragraph
6.2.

                                       28.

<PAGE>

    10.3  LANDLORD'S RIGHT TO TERMINATE.  Landlord shall have the option to
terminate this Lease in the event any of the following occurs, which option
may be exercised only by delivery to Tenant of a written notice of election
to terminate within thirty (30) days after the date of such damage or
destruction:

          (a)  The Building is damaged by any peril covered by valid and
collectible insurance actually carried by Landlord and in force at the time
of such damage or destruction (an "insured peril") to such any extent that
the estimated cost to restore the Building exceeds the lesser of (i) the
insurance proceeds available from insurance required to be carried by
Landlord, or (ii) fifty percent (50%) of the then actual replacement cost
thereof;

          (b)  The Building is damaged by an uninsured peril, which peril
Landlord was not required to insure against pursuant to the provisions of
Article 9 of this Lease.

          (c)  The Building is damaged by any peril and, because of the laws
then in force, the Building (i) cannot be restored at reasonable cost or (ii)
if restored, cannot be used for the same use being made thereof before such
damage.

     10.4  TENANT'S RIGHT TO TERMINATE.  If the Leased Premises, the Building
or the Outside Area are damaged by any peril and Landlord does not elect to
terminate this Lease or is not entitled to terminate this Lease pursuant to
this Article, then as soon as reasonably practicable, Landlord shall furnish
Tenant with the written opinion of Landlord's architect or construction
consultant as to when the restoration work required of landlord may be
complete. Tenant shall have the option to terminate this Lease in the event
any of the following occurs, which option may be exercised only by delivery
to Landlord of a written notice of election to terminate within thirty (30)
days after Tenant receives from Landlord the estimate of the time needed to
complete such restoration:

          (a)  If the time estimated to substantially complete the
restoration exceeds six months from and after the date the architect's or
construction consultant's written opinion is delivered; or

          (b)  If the damage occurred within twelve months of the last day of
the Lease Term and the time estimated to substantially complete the
restoration exceeds one hundred eight days from and after the date such
restoration is commenced.

    10.5  TENANT'S WAIVER.  Landlord and Tenant agree that the provisions of
Paragraph 10.4 above, captioned "Tenant's Right To Terminate", are intended
to supersede and replace the provisions contained in California Civil Code,
Section 1932, Subdivision 2, and California Civil Code, Section 1934, and
accordingly, Tenant hereby waives the provisions of such Civil Code Sections
and the provisions of any successor Civil Code Sections or similar laws
hereinafter enacted.

    10.6  ABATEMENT OF RENT.  In the event of damage to the Leased Premises
which does not result in the termination of this Lease, the Base Monthly Rent
(and any Additional Rent) shall be temporarily abated during the period of
restoration in proportion in the degree to which Tenant's use of the Leased
Premises is impaired by such damage.

                                       29.

<PAGE>

                                   ARTICLE 11

                                  CONDEMNATION

     11.1 TENANT'S RIGHT TO TERMINATE. Except as otherwise provided in
Paragraph 11.4 below regarding temporary takings, Tenant shall have the
option to terminate this lease if, as a result of any taking, (i) all of the
Leased Premises is taken, or (ii) twenty-five percent (25%) or more of the
Leased Premises is taken and the part of the Leased Premises that remains
cannot, within a reasonable period of time, be made reasonably suitable for
the continued operation of Tenant's business. Tenant must exercise such
option within a reasonable period to time, to be effective on the later to
occur of (i) the date that possession of that portion of the Leased Premises
that is condemned is taken by the condemnor or (ii) the date Tenant vacated
the Leased Premises.

     11.2 LANDLORD'S RIGHT TO TERMINATE. Except as otherwise provided in
Paragraph 11.4 below regarding temporary takings, Landlord shall have the
option to terminate this Lease if, as a result of any taking, (i) all of the
Leased Premises is taken, (ii) twenty-five percent (25%) or more of the
Leased Premises is taken and the part of the Leased Premises that remains
cannot, within a reasonable period of time, be made reasonably suitable for
the continued operation of Tenant's business, or (iii) because of the laws
then in force, the Leased Premises may not be used for the same use being
made before such taking, whether or not restored as required by Paragraph
11.3 below. Any such option to terminate by Landlord must be exercised within
a reasonable period of time, to be effective as of the date possession is
taken by the condemnor.

     11.3 RESTORATION. If any part of the Leased Premises or the Building is
taken and this Lease is not terminated, then Landlord shall, to the extent
not prohibited by laws then in force, repair any damage occasioned thereby to
the remainder thereof to a condition reasonably suitable for Tenant's
continued operations and otherwise, to the extent practicable, in the manner
and to the extent provided in Paragraph 10.1.

     11.4 TEMPORARY TAKING If a portion of the Leased Premises is temporarily
taken for a period of one year or less and such period does not extend beyond
the Lease Expiration Date, this Lease shall remain in effect. If any portion
of the Leased Premises is temporarily taken for a period which exceeds one
year of which extends beyond the Lease Expiration Date, then the rights of
landlord and Tenant shall be determined in accordance with Paragraphs 11.1
and 11.2 above.

     11.5 DIVISION OF CONDEMNATION AWARD. Any award made for any taking of
the Property, the Building, or the Leased Premises, or any portion thereof,
shall belong to and be paid to Landlord, and Tenant hereby assigns to
Landlord all of its rights, title and interest in any such award; PROVIDED,
HOWEVER, that Tenant shall be entitled to receive any portion of the award
that is made specifically (i) for the taking of personal property, inventory
or trade fixtures belonging to Tenant, (ii) for the interruption of Tenant's
business or its moving costs, or (iii) for the value of any leasehold
improvements installed and paid for by Tenant. The rights of Landlord and
Tenant regarding any condemnation shall be determined as provided in this
Article, and each party hereby waives the provisions of Section 1265.130 of
the California Code of Civil Procedure, and the provisions of any similar law
hereinafter enacted, allowing either

                                       30.

<PAGE>

party to petition the Supreme Court to terminate this Lease and/or otherwise
allocate condemnation awards between Landlord and Tenant in the event of a
taking of the Leased Premises.

     11.6 ABATEMENT OF RENT. In the event of a taking of the Leased Premises
which does not result in a termination of this Lease (other than a temporary
taking), then, as of the date possession is taken by the condemning
authority, the Base Monthly Rent shall be reduced in the same proportion that
the area of that part of the Leased Premises so taken (less any addition to
the area of the Leased Premises by reason of any reconstruction) bears to the
area of the Leased Premises immediately prior to such taking.

     11.7 TAKING DEFINED. The term "taking" or "taken" as used in this
Article 11 shall mean any transfer or conveyance of all or any portion of the
Property to a public or quasi-public agency or other entity having the power
of eminent domain pursuant to or as a result of the exercise of such power by
such an agency, including any inverse condemnation and/or any sale or
transfer by Landlord of all or any portion of the Property to such an agency
under threat of condemnation or the exercise of such power.

                                   ARTICLE 12

                              DEFAULT AND REMEDIES

     12.1 EVENTS OF TENANT'S DEFAULT. Tenant shall be in default of its
obligations under this Lease if any of the following events occur:

          (a) Tenant shall have failed to pay Base Monthly Rent or any
Additional Rent when due, provided that Tenant shall not be deemed in default
with respect to the first such failure only until Landlord has provided
Tenant with written notice thereof and Tenant has failed to make the required
payment within five (5) days of delivery of such written notice; or

          (b) Tenant shall have failed to perform any term, covenant or
condition of this Lease (except those requiring the payment of Base Monthly
Rent or Additional Rent, which failures shall be governed by subparagraph (a)
above) or shall have done or permitted to be done any act, use or thing in
its use, occupancy or possession of the Leased Premises or the Building or
the Outside Areas which is prohibited by the terms of this Lease and then
shall have failed to cure the matter within thirty (30) days after written
notice from Landlord to Tenant specifying the nature of such failure and
requesting Tenant to perform same; or

          (c) Tenant shall have sublet the Leased Premises or assigned
encumbered its interest in this lease in violation of the provisions
contained in Article 7, whether voluntarily or by operation of law/ or

          (d) Tenant shall have abandoned the Leased Premises; or

          (e) Tenant or any Guarantor of this Lease shall have permitted or
suffered the sequestration or attachment of, or execution on, or the
appointment of a custodian or receiver with respect to, all or any
substantial part of the property or assets of Tenants (or such Guarantor) or
any property to asset essential to the conduct of Tenant's (or such
Guarantor's) business, and

                                       31.

<PAGE>

Tenant (or such Guarantor) shall have failed to obtain a return or release of
the same within ninety (90) days thereafter, or prior to sale pursuant to
such sequestration, attachment or levy, whichever is earlier; or

          (f) Tenant or any Guarantor of this Lease shall have made a general
assignment of all or a substantial part of its assets for the benefit of its
creditors; or

          (g) Tenant or any Guarantor of this Lease shall have allowed (or
sought) to have entered against it a decree or order which: (i) grants or
constitutes an order for relief, appointment of a trustee, or condemnation or
a reorganization plan under the bankruptcy laws of the United States; (ii)
approves as properly filed a petition seeking liquidation or reorganization
under said bankruptcy laws or any other debtor's relief law or similar
statute of the United States or any state thereof; or (iii) otherwise directs
the winding up or liquidation of Tenant; PROVIDED, HOWEVER, if any decree or
order was entered without Tenant's consent or over Tenant's objection,
Landlord may not terminate this Lease pursuant to this Subparagraph if such
decree or order is rescinded or reversed within ninety (90) days after its
original entry; or

          (h) Tenant shall have failed to renew the Letter of Credit within
thirty (30) days prior to its expiration date, or the financial institution
which has issued the Letter of Credit shall have failed to honor the Letter
of Credit or shall have withdrawn or terminated the Letter of Credit; or

          (i) Tenant or any Guarantor of this Lease shall have availed itself
of the protection of any debtor's relief law, moratorium law or other similar
law which does not required the prior entry of a decree or order.

     12.2 LANDLORD'S REMEDIES. In the event of any default by Tenant, and
without limiting Landlord's right to indemnification as provided in Article
8.2, Landlord shall have the following remedies, in addition to all other
rights and remedies provided by law otherwise provided in this Lease, to
which Landlord may resort cumulatively, or in the alternative:

          (a) Landlord may, at Landlord's election, keep this Lease in effect
and enforce, by an action at law or in equity, all of its rights and remedies
under this Lease including, without limitation, (i) the right to recover the
rent and other sums as they become due by appropriate legal action, (ii) the
right to make payments required by Tenant, or perform Tenant's obligations
and be reimbursed by Tenant for the cost thereof with interest at the then
maximum rate of interest not prohibited by law form the date the sum is paid
by Landlord until Landlord is reimbursed by Tenant, and (iii) the remedies of
injunctive relief and specific performance to prevent Tenant from violating
the terms of this Lease and/or to compel Tenant to perform its obligations
under this Lease, as the case may be.

          (b) Landlord may, at Landlord's election, terminate this Lease by
giving Tenant written notice of termination, in which event this Lease shall
terminate on the date set forth for termination in such notice. Any
termination under this subparagraph shall not relieve Tenant from its
obligation to pay to Landlord all Base Monthly Rent and Additional Rent then
or thereafter due, or any other sums due or thereafter accruing to Landlord,
or from any claim against Tenant for damages previously accrued or then
thereafter accruing. In no event shall any

                                       32.

<PAGE>

one or more of the following actions by Landlord, in the absence of a written
election by Landlord to terminate this Lease constitute a termination of this
Lease:

               (i)  Appointment of a receiver or keeper in order to protect
Landlord's interest hereunder;

               (ii) Consent to any subletting of the Leased Premises or
assignment of this Lease by Tenant, whether pursuant to the provisions hereof
or otherwise; or

               (iii) Any action taken by Landlord or its partners,
principals, members, officers, agents, employees, or servants, which is
intended to mitigate the adverse effects of any breach of this Lease by
Tenant, including, without limitation, any action taken to maintain and
preserve the leased Premises on any action taken to relet the Leased Premises
or any portion thereof for the account at Tenant and in the name of Tenant.

          (c) In the event Tenant breaches this Lease and abandons the Leased
Premises, Landlord may terminate this Lease, but this Lease shall not
terminate unless Landlord gives Tenant written notice of termination. If
Landlord does not terminate this Lease by giving written notice of
termination, Landlord may enforce all its rights and remedies under this
Lease, including the right and remedies provided by California Civil Code
Section 1951.4 ("lessor may continue lease in effect after lessee's breach
and abandonment and recover rent as it become sue, if lessee has right to
sublet or assign, subject only to reasonable limitations"), as in effect on
the Effective Date of this Lease.

          (d) In the event Landlord terminates this lease, Landlord shall be
entitled, at Landlord's election, to the rights and remedies provide in
California Civil Code Section 1951.2, as in effect on the Effective Date of
this Lease. For purposes of computing damages pursuant to Section 1951.2, an
interest rate equal to the maximum rate of interest then not prohibited by
law shall be used where permitted. Such damages shall include, without
limitation:

               (i) The worth at the time of award of the amount by which the
unpaid rent for the balance of the term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided,
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; and

               (ii) Any other amount necessary to compensate Landlord for all
detriment proximately caused by Tenant's failure to perform Tenant's
obligations under this Lease, or which in the ordinary course of things would
be likely to result therefrom, including without limitation, the following:
(i) expenses for cleaning, repairing or restoring the Leased Premises, (ii)
expenses for altering, remodeling or otherwise improving the Leased Premises
for the purpose of reletting, including removal of existing leasehold
improvements and/or installation of additional leasehold improvements
(regardless of how same is funded, including reduction of rent, a direct
payment or allowance to anew tenant, or otherwise), (iii) broker's fees
allocable to the remainder of the term of this Lease, advertising costs and
other expenses of reletting the Leased Premises; (iv) costs of carrying and
maintaining the Leased Premises, such as taxes, insurance premiums, utility
charges and security precautions, (v) expenses incurred in

                                       33.

<PAGE>

removing, disposing of and/or storing any of Tenant's personal property,
inventory or trade fixtures remaining therein; (vi) reasonable attorneys'
fees, expert witness fees, court costs and other reasonable expenses incurred
by Landlord (but not limited to taxable costs) in retaking possession of the
Leased Premises, establishing damages hereunder, and releasing the Leased
Premises; and (vii) any other expenses, costs or damages otherwise incurred
or suffered as a result of Tenant's default.

     12.3 LANDLORD'S DEFAULT AND TENANT'S REMEDIES. In the event Landlord
fails to perform its obligations under this Lease, Landlord shall
nevertheless not be in default under the terms of this Lease until such time
as Tenant shall have first given Landlord written notice specifying the
nature of such failure to perform its obligations, and then only after
Landlord shall have had thirty (30) days following its receipt of such notice
within which to perform such obligations; PROVIDED, THAT, if longer than
thirty (30) days is reasonably required in order to perform such obligations,
Landlord shall have such longer period. In the event of Landlord's default as
above set forth, then, and only then, Tenant may then proceed in equity or at
law to compel Landlord to perform its obligations and/or to recover damages
proximately caused by such failure to perform (except as and to the extent
Tenant has waived its right to damages as provided in this Lease).

     12.4 LIMITATION OF TENANT'S RECOURSE. Tenant's recourse shall be limited
to Landlord's interest in the Property. In addition, if Landlord is a
corporation, trust, parntership, joint venture, limited liability company,
unincorporated association, or other form of business entity, Tenant agrees
that (i) the obligations of Landlord under this Lease shall not constitute
personal obligations of the officers, directors, trustees, partners, joint
venturers, members, owners, stockholders, or other principals of such
business entity, and (ii) Tenant shall have no recourse to the assets of such
offices, directors, trustees, partners, joint venturers, members, owners,
stockholders or principals. Additionally, if Landlord is a partnership or
limited liability company, then Tenant covenants and agrees:

          (a) No partner or member of Landlord shall be sued or named as a
party in any suit or action brought by Tenant with respect to any alleged
breach of this Lease (except to the extent necessary to secure jurisdiction
over the partnership and then only for that sole purpose);

          (b) No service of process shall be made against any partner or
member of Landlord except for the sole purpose of securing jurisdiction over
the partnership; and

          (c) No writ of execution will ever be levied against the assets of
any partner or member of Landlord other than to the extent of his or her
interest in the assets of the partnership or limited liability company
constituting Landlord.

Tenant further agrees that each of the foregoing covenants and agreements
shall be enforceable by Landlord and by any partner or member of Landlord and
shall be applicable to any actual or alleged misrepresentation or
nondisclosure made regarding this Lease or the Leased Premises or any actual
or alleged failure, default or reach of any covenant or agreement either
expressly or implicitly contained in this Lease or imposed by statute or at
common law.

                                       34.

<PAGE>

     12.5 TENANT'S WAIVER. Landlord and Tenant agree that the provisions of
Paragraph 12.3 above are intended to supersede and replace the provisions of
California Civil Code Sections 1932(1), 1941 and 1942, and accordingly,
Tenant hereby waives the provisions of California Civil Code Sections
1932(1), 1941 and 1942 and/or any similar or successor law regarding Tenant's
right to terminate this Lease or to make repairs and deduct the expenses of
such repairs from the rent due under this Lease.

                                   ARTICLE 13

                               GENERAL PROVISIONS

     13.1 TAXES ON TENANT'S PROPERTY. Tenant shall pay before delinquency any
and all taxes, assessments, license fees, use fees, permit fees and public
charges of whatever nature or description levied, assessed or imposed against
Tenant or Landlord by a governmental agency arising out of, caused by reason
of or based upon Tenant's estate in this Lease, Tenant's ownership of
property, improvements made by Tenant to the Leased Premises or the Outside
Areas, improvements made by Landlord for Tenant's use within the Leased
Premises or the Outside Areas, Tenant's use (or estimated use) of public
facilities or services or Tenant's consumption (or estimated consumption) or
public utilities, energy, water or other resources (collectively, "Tenant's
Interest"). Upon demand by Landlord, Tenant shall furnish Landlord with
satisfactory evidence of these payments. If any such taxes, assessments, fees
or public charges are levied against Landlord, Landlord's property, the
Building or the Property, or if the assessed value of the Building or the
Property is increased by the inclusion therein of a value placed upon
Tenant's interest, regardless of the validity thereof, Landlord shall have
the right to require Tenant to pay such taxes, and if not paid and
satisfactory evidence of payment delivered to Landlord at least ten days
prior to delinquency, then Landlord shall have the right to pay such taxes on
Tenant's behalf and to invoice Tenant for the same. Tenant shall, within the
earlier to occur of (a) thirty (30) days of the date it receives an invoice
from Landlord setting forth the amount of such taxes, assessments, fees, or
public charge so levied, or (b) the due date of such invoice, pay to the
Landlord, as Additional Rent, the amount set forth in such invoice. Failure
by Tenant to pay the amount so invoiced within such time period shall be
conclusively deemed a default by Tenant under this Lease. Tenant shall have
the right to bring suit in any court of competent jurisdiction to recover
from the taxing authority the amount of any such taxes, assessments, fees or
public charges so paid.

     13.2 HOLDING OVER. this Lease shall terminate without further notice on
the Lease Expiration Date (as set forth in Article 1). Any holding over by
Tenant after expiration of the Lease Term shall neither constitute a renewal
nor extension of this Lease nor give Tenant any rights in or to the Leased
Premises except as expressly provided in this Paragraph. Any such holding
over to which Landlord has consented shall be construed to be a tenancy from
month to month, on the same terms and conditions herein specified insofar as
applicable, except that the Base Monthly Rent shall be increased to an amount
equal to one hundred fifty percent (150%) of the Base Monthly Rent payable
during the last full month immediately preceding such holding over.

     13.3 SUBORDINATION TO MORTGAGES. This Lease is subject to and
subordinate to all ground leases, mortgages and deeds of trust which affect
the Building or the Property and which

                                       35.

<PAGE>

are of public record as of the Effective Date of this Lease, and to all
renewals, modifications, consolidations, replacements and extensions thereof.
However, if the lessor under any such ground lease or any lender holding any
such mortgage or deed of trust shall advise Landlord that it desires or
requires this Lease to be made prior and superior thereto, then, upon written
request of Landlord to Tenant, Tenant shall promptly execute, acknowledge and
deliver any and all customary or reasonable documents or instruments which
Landlord and such lessor or lender deems necessary or desirable to make this
Lease prior thereto. Tenant hereby consents to Landlord's ground leasing the
land underlying the Building or the Property and/or encumbering the Building
or the Property as security for future loans on such terms as Landlord shall
desire, all of which future ground leases, mortgages or deeds of trust shall
be subject to and subordinate to this Lease. However, if any lessor under any
such future ground lease or any lender holding such future mortgage or deed
of trust shall desire or require that this Lease be made subject to and
subordinate to such future ground lease, mortgage or deed of trust, then
Tenant agrees, within ten days after Landlord's written request therefor, to
exclude, acknowledge and deliver to Landlord any and all documents or
instruments requested by Landlord or by such lessor or lender as may be
necessary or proper to assure the subordination of this Lease to such future
ground lease, mortgage or deed of trust, but only if such lessor or lender
agrees to recognize Tenant's rights under this lease and agrees not to
disturb Tenant's quite possession of the Leased Premises so long as Tenant is
not in default under this lease. If Landlord assigns the Lease as security
for a loan, Tenant agrees to execute such documents as are reasonably
requested by the lender and to provide reasonable provisions in the Lease
protecting such lender's security interest which are customarily required by
institutional lenders making loans secured by a deed of trust.

     13.4 TENANT'S ATTORNMENT UPON FORECLOSURE. Tenant shall, upon request,
attorn (i) to any purchaser of the Building or the Property at any
foreclosure sale or private sale conducted pursuant to any security
instruments encumbering the Building or the Property, (ii) to any guarantee
or transferee designated in any deed given in lieu of foreclosure of any
security interest encumbering the Building or the Property, or (iii) to the
lessor under any underlying ground lease of the land underlying the Building
or the Property, should ground lease be terminated; provided that such
purchaser, grantee or lessor recognizes Tenant's rights under this Lease.

                                       36.

<PAGE>

13.5  MORTGAGEE PROTECTION.  In the event of any default on the part of
Landlord, Tenant will give notice by registered mail to any Lender or lessor
under any underlying ground lease who shall have requested, in writing, to
Tenant that it be provided with such notice, and Tenant shall offer such
Lender or lessor a reasonable opportunity to cure the default, including time
to obtain possession of the Leased Premises by power of sale or judicial
foreclosure or other appropriate legal proceedings if reasonably necessary to
effect a cure.

13.6  ESTOPPEL CERTIFICATE.  Tenant will, following any request by Landlord,
promptly execute and deliver to Landlord an estoppel certificate (i)
certifying that this Lease is unmodified and in full force and effect, or, if
modified, stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect, (ii) stating the date to
which the rent and other charges are paid in advance, if any, (iii)
acknowledging that there are not, to Tenant's knowledge, any uncured defaults
on the part of Landlord hereunder, or specifying such defaults if any are
claimed, and (iv) certifying such other information about this Lease as may
be reasonably requested by Landlord, its Lender or prospective lenders,
investors or purchasers of the Building or the Property.  Tenant's failure to
execute and deliver such estoppel certificate within ten days after
Landlord's request therefor shall be a material default by Tenant under this
Lease, and Landlord shall have all of the rights and remedies available to
Landlord as Landlord would otherwise have in the case of any other material
default by Tenant, including the right to terminate this Lease and sue for
damages proximately caused thereby, it being agreed and understood by Tenant
that Tenant's failure to so deliver such estoppel certificate in a timely
manner could result in Landlord being unable to perform committed obligations
to other third parties which were made by Landlord in reliance upon this
covenant or Tenant.  Landlord and Tenant intend that any statement delivered
pursuant to this paragraph may be relied upon by any Lender or purchaser or
prospective Lender or purchaser of the Building, the Property, or any
interest in them.

13.7  TENANT'S FINANCIAL INFORMATION.  Tenant shall, within ten (10) business
days after Landlord's request therefor, deliver to Landlord a copy of
Tenant's (and any guarantor's) current financial statements (including a
balance sheet, income statement and statement of cash flow, all prepared in
accordance with generally accepted accounting principles or such other
accounting methodology recommended by Tenant's accounting firm and generally
accepted) and any such other information reasonably requested by Landlord
regarding Tenant's financial condition.  If Tenant is a public corporation,
however Landlord shall not disclose any non-public financial information.
Landlord shall be entitled to disclose such financial statements or other
information to its Lender, to any present or prospective principal of or
investor in Landlord, or to any prospective Lender or purchaser of the
Building, the Property, or any portion thereof or interest therein.  Any such
financial statement or other information which is marked "confidential" or
"company secrets" (or is otherwise similarly marked by Tenant) shall be
confidential and shall not be disclosed by Landlord to any third party except
as specifically provided in this paragraph, unless the same becomes a part of
the public domain without the fault of Landlord.

13.8  TRANSFER BY LANDLORD.  Landlord and its successors in interest shall
have the right to transfer their interest in the Building, the Property, or
any portion thereof at any time and to any person or entity in the event of
any such transfer, the Landlord originally named herein (and in the case of
any subsequent transfer, the transferor), from the date of such transfer, (i)
shall be automatically relieved, without any further act by any person or
entity, or all liability for the performance of the obligations of the
Landlord hereunder which may accrue after the date of such transfer and (ii)
shall be relieved of all liability for the performance of the obligations of
the Landlord hereunder which have accrued before the date of transfer of its
transferee agrees to assume and perform all such prior obligations of the
Landlord hereunder, Tenant shall attorn to any such transferee.  After the
date of any such transfer, the term "Landlord" as used herein shall mean the
transferee of such interest in the Building or the Property.

13.9  FORCE MAJEURE.  The obligations of each of the parties under this Lease
(other than the obligations to pay money) shall be temporarily excused if
such party is prevented or delayed in performing such obligations by reason
of any strikes, lockouts or labor disputes; government restrictions,
regulations, controls, action or inaction; civil commotion; or extraordinary
weather, fire or other acts of God (collectively, "FORCE MAJEURE").

13.10 NOTICES.  Any notice required or desired to be given by a party
regarding this Lease shall be in writing and shall be personally served, or
in lieu of personal service may be given by reputable overnight courier
service, postage prepaid, addressed to the other party as follows:


                                       23.
<PAGE>

     If to Landlord:     1245 TERRA BELLA PARTNERS, LLC
                         c/o Menlo Equities
                         2180 Sand Hill Road
                         Suite 100
                         Menlo Park, California 94025
                         Attention: Henry Bullock/Richard Holmstrom

     with a copy to:     GRAY CARY WARE & FREIDENRICH
                         400 Hamilton Avenue
                         Palo Alto, California 94301
                         Attention: Jeffrey A. Trant

     If to Tenant:       INTRABIOTICS PHARMACEUTICALS, INC.
                         1245 Terra Bella Avenue
                         Mountain View, California 94043
                         Attention: Ken Kelly, President

     with a copy to:     COOLEY GODWARD CASTRO HUDDLESON & TATUM
                         Five Palo Alto Square
                         3000 El Camino Real
                         Palo Alto, California 94306
                         Attention: Tony Wise

Any notice given in accordance with the foregoing shall be deemed received
upon actual receipt or refusal to accept delivery.

13.11  ATTORNEYS' FEES.  In the event any party shall bring any action,
arbitration proceeding or legal proceeding alleging a breach of any provision
of this Lease, to recover rent, to terminate this Lease, or to enforce,
protect, determine or establish any term or covenant of this Lease or rights
or quotes hereunder of either party, the prevailing party shall be entitled to
recover from the non-prevailing party as a part of such action or proceeding,
or in a separate action for that purpose brought within one year from the
determination of such proceeding, reasonable attorneys' fees, expert witness
fees, court costs and other reasonable expenses incurred by the prevailing
party.

13.12  DEFINITIONS.  Any term that is given a special meaning by any
provision in this Lease shall, unless otherwise specifically stated, have
such meaning wherever used in this Lease or in any Addenda or amendment
hereto. In addition to the terms defined in Article 1, the following terms
shall have the following meanings:

     (a)  REAL PROPERTY TAXES.  The term "Real Property Tax" or "Real
Property Taxes" shall each mean (i) all taxes, assessments, levies and other
charges of any kind or nature whatsoever, general and special, foreseen and
unforeseen (including all instruments of principal and interest required to
pay any general or special assessments for public improvements and any
increases resulting from reassessments caused by any change in ownership or
new construction), now or hereafter imposed by any governmental or
quasi-governmental authority or special district having the direct or
indirect power to tax or levy assessments, which are levied or assessed for
whatever reason against the Property or any portion thereof, or Landlord's
interest herein, or the fixtures, equipment and other property of Landlord
that is an integral part of the Property and located thereon, or Landlord's
business of owning, leasing or managing the Property or the gross receipts,
income or rentals from the Property, (ii) all charges, levies or fees imposed
by any governmental authority against Landlord by reason of or based upon the
use of or number of parking spaces within the Property, the amount of public
services or public utilities used or consumed (E.G. water, gas, electricity,
sewage or waste water disposal) at the Property, the number of person
employed by tenants of the Property, the size (whether measured in area,
volume, number of tenants or whatever) or the value of the Property, or the
type of use or uses conducted within the Property, and all costs and fees
(including attorneys' fees) reasonably incurred by Landlord in contesting any
Real Property Tax and in negotiating with public authorities as to any Real
Property Tax. If, at any time during the Lease Term, the taxation or
assessment of the Property prevailing as of the Effective Date of this Lease
shall be altered so that in lieu of or in addition to any the Real Property
Tax described above there shall be levied, awarded or imposed (whether by
reason of a change in the method of taxation or assessment, creation of a new
tax or charge, or any other cause) an alternate, substitute, or additional
use or charge (i) on the value, size, use or occupancy of the Property or
Landlord's interest therein or (ii) on or measured by the gross receipts,
income or rentals from the Property, or on Landlord's business of owning,
leasing or managing the Property or (iii) computed in any manner with respect
to the operation of the Property, then any such tax or charge, however
designated, shall be included within the meaning of the terms "Real Property
Tax" or "Real Property Taxes" for purposes of this Lease. If any Real
Property Tax is partly based upon property or rents unrelated to the
Property, then only that part of such Real Property Tax that is fairly
allocable to the Property shall be included within the meaning of the terms
"Real Property Tax" or "Real Property Taxes." Notwithstanding the foregoing,
the terms "Real Property Tax" or "Real Property Taxes" shall not include
estate, inheritance, transfer, gifts or franchise taxes of Landlord or the
federal or state income tax imposed on Landlord's income from all sources.

                                      24.

<PAGE>

     (b)  LANDLORD'S INSURANCE COSTS.  The term "Landlord's Insurance Costs"
shall mean the costs to Landlord to carry and maintain the policies of fire
and property damage insurance for the Building and the Property and general
liability and any other insurance required  or permitted to be carried by
Landlord pursuant to Article 9, together with any deductible amounts paid by
Landlord upon the occurrence of any insured casualty or loss; provided,
however, that in the event of an earthquake casualty the deductible for any
repairs or restoration of the Leased Premises or the Building shall be deemed
a capital item and shall be amortized over the useful life of such repair or
restoration, and Tenant shall be responsible for the amortized share thereof
that corresponds to the remaining Lease Term (and any extensions thereof).

     (c)  PROPERTY MAINTENANCE COSTS.  The term "Property Maintenance Costs"
shall mean all costs and expenses (except Landlord's insurance Costs and Real
Property Taxes) paid or incurred by Landlord in protecting, operating,
maintaining, repairing and preserving the Property and all parts thereof,
including without limitation, (i) market rate professional management fees
(not to exceed two percent (2% of gross Rent), (ii) the amortizing portion of
any costs incurred by Landlord in the making of any modifications, alterations
or improvements required by any governmental authority as set forth in
Article 6, which are so amortized during the Lease Term, and (iii) such other
costs as may be paid or incurred with respect to operating, maintaining, and
preserving the Property, such as repairing and resurfacing the exterior
surfaces of the Building (including roofs), repairing and resurfacing paved
areas, repairing and replacing structural parts of the Building, and repairing
and replacing, when necessary, electrical, plumbing, heating, ventilating
and air conditioning systems serving the Building; PROVIDED, HOWEVER, that
with respect to items referred to in clause (iii) above that are treated as
capital items under generally accepted accounting principles, the cost of
such capital items (together with interest thereon at the rate Landlord is
or would be required to pay in order to borrow funds to finance the
replacement of any such capital item) shall be amortized over their useful
life in accordance with generally accepted accounting principals, and Tenant
shall be responsible only for such amortized portion thereof that corresponds
to the remaining Lease Term (including any extensions thereof).

     (d)  PROPERTY OPERATING EXPENSES.  The term "Property Operating Expenses"
shall mean and include all Real Property Taxes, plus all Landlord's Insurance
Costs, plus all Property Maintenance Costs.

     (e)  LAW.  The term "Law" shall mean any judicial decisions and any
statute, constitution, ordinance, resolution, regulation, rule, administrative
order, or other requirements of any municipal, county, state, federal, or
other governmental agency or authority having jurisdiction over the parties
to this Lease, the Leased Premises, the Building or the Property, or any of
them, in effect either at the Effective Date of this Lease or at any time
during the Lease Term, including, without limitation, any regulation, order,
or policy of any quasi-official entity or body (e.g. a board of fire examiners
or a public utility or special district).

     (f)  LENDER.  The term "Lender" shall mean the holder of any promissory
note or other evidence or indebtedness secured by the Property or any portion
thereof.

     (g)  PRIVATE RESTRICTIONS.  The term "Private Restrictions" shall mean
(as they may exist from time to time) any and all covenants, conditions and
restrictions, private agreements, easements, and any other recorded documents
or instruments affecting the use of the Property, the Building, the Leased
Premises, or the Outside Areas.

     (h)  RENT.  The term "Rent" shall mean collectively Base Monthly Rent and
all Additional Rent.

13.13  GENERAL WAIVERS.  One party's consent to or approval of any act by the
other party requiring the first party's consent or approval shall not be
deemed to waive or render unnecessary the first party's consent to or
approval of any subsequent similar act by the other party. No waiver of any
provision hereof, or any waiver of any breach of any provision hereof, shall
be effective unless in writing and signed by the waiving party.  The receipt
by Landlord of any rent or payment with or without knowledge of the breach of
any other provision hereof shall not be deemed a waiver of any such breach.
No waiver or any provision of this Lease shall be deemed a continuing waiver
unless such waiver specifically states so in writing and is signed by both
Landlord and Tenant. No delay or omission in the exercise of any right or
remedy accruing to either party upon any breach by the other party under this
Lease shall impair such right or remedy or be construed as a waiver of any
such breach theretofore or thereafter occurring. The waiver by either party
of any breach of any provision of this Lease shall not be deemed to be a
waiver of any subsequent breach of the same or any other provisions herein
contained.

13.14  MISCELLANEOUS.  Should any provisions of this Lease prove to be invalid
or illegal, such invalidity or illegality shall in no way affect, impair or
invalidate any other provisions hereof, and such remaining provisions shall
remain in full force and effect. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is
a factor. Any copy of this Lease which is executed by the parties shall be
deemed an original for all purposes. This Lease shall, subject to the
provisions regarding assignment, apply to and bind the respective heirs,
successors, executors, administrators and assigns of Landlord and Tenant. The
term "party" shall mean Landlord or Tenant

                                       25.

<PAGE>

as the context implies.  If Tenant consists of more than one person or
entity, then all members of Tenant shall be jointly and severally liable
hereunder.  This Lease shall be construed and enforced in accordance with the
Laws of the State in which the Leased Premises are located.  The captions in
this Lease are for convenience only and shall not be construed in the
construction or interpretation of any provision hereof.  When the context of
this Lease requires, the neuter gender includes the masculine, the feminine,
a partnership, corporation, limited liability company, joint venture, or
other form of business entity, and the singular includes the plural.  The
terms "must," "shall," "will," and "agree" are mandatory.  The term "may" is
permissive.  When a party is required to do something by this Lease, it shall
do so at its sole cost and expense without right or reimbursement from the
other party unless specific provision is made therefor.  Where Landlord's
consent is required hereunder, the consent of any Lender may also be
required. Landlord and Tenant shall both be deemed to have drafted this
Lease, and the rule of construction that a document is to be construed
against the drafting party shall not be employed in the construction or
interpretation of this Lease.  Where Tenant is obligated not to perform any
act or is not permitted to perform any act, Tenant is also obligated to
restrain any others reasonably within its control, including agents,
invitees, contractors, subcontractors and employees, from performing such
act.  Landlord shall not become or be deemed a partner or a joint venturer
with Tenant by reason of any of the provisions of this Lease.

                                   ARTICLE 14.
                CORPORATE AUTHORITY, BROKERS AND ENTIRE AGREEMENT

14.1  CORPORATE AUTHORITY.  If Tenant is a corporation, each individual
executing this Lease on behalf of such corporation represents and warrants
that Tenant is validly formed and duly authorized and existing, that Tenant
is qualified to do business in the State in which the Leased Premises are
located, that Tenant has the full right and legal authority to enter into
this Lease, and that he or she is duly authorized to execute and deliver this
Lease on behalf of Tenant in accordance with its terms.  Tenant shall, within
thirty days after execution of this Lease, deliver to Landlord a certified
copy of the resolution of its board of directors authorizing or ratifying the
execution of this Lease and if Tenant fails to do so, Landlord at its sole
election may elect to terminate this Lease.

14.2  BROKERAGE COMMISSIONS.  Landlord and Tenant acknowledge that Landlord
has engaged Landlord's Broker (as defined in Article 1 hereof) and that
Tenant has engaged Tenant's Brokers (as defined in Article 1 hereof) in
connection with the transactions contemplated by this Lease, that Landlord
shall pay all leasing commissions owing to Landlord's Broker, and that
Landlord's Broker shall share such commissions with Tenant's Broker pursuant
to a separate agreement between Landlord's Broker and Tenant's Brokers.
Subject to the immediately preceding sentence, Tenant represents, warrants
and agrees that it has not had any dealings with any real estate broker(s),
leasing agent(s), finder(s) or salesmen (collectively "Brokers"), other than
the Tenant's Brokers with respect to the lease by Tenant of the Leased
Premises pursuant to this Lease, and that Tenant will assume all obligations
and responsibility with respect to the payment of any such Brokers (other
than Tenant's Brokers and Landlord's Broker), and that Tenant will indemnify,
defend with competent counsel, and hold Landlord harmless from any liability
for the payment of any real estate brokerage commissions, leasing commissions
or finder's fees claimed by any other Brokers to be earned or due and payable
by reason of Tenant's agreement or promise (implied or otherwise) to pay (or
to have Landlord pay) such a commission or finder's fee by reason of its
leasing and the Leased Premises pursuant to this Lease.

14.3  ENTIRE AGREEMENT.  This Lease and the Exhibits (as described in
Article 1), which Exhibits are by this reference incorporated herein,
constitute the entire agreement between the parties, and there are no other
agreements, understandings or representations between the parties relating to
the lease by Landlord of the Leased Premises to Tenant, except as expressed
herein.  No subsequent changes, modifications or additions to this Lease
shall be binding upon the parties unless in writing and signed by both
Landlord and Tenant.

14.4  LANDLORD'S REPRESENTATIONS.  Tenant acknowledges that neither Landlord
nor any of its agents made any representations or warranties respecting the
Property, the Building or the Leased Premises, upon which Tenant relied in
entering into the Lease, which are not expressly set forth in this Lease.
Tenant further acknowledges that neither Landlord nor any of its agents made
any representations as to (i) whether the leased Premises may be used for
Tenant's intended use under existing Law, or (ii) the suitability of the
Leased Premises for the conduct of Tenant's business, or (iii) the exact
square footage of the Leased Premises, and that Tenant relies solely upon its
own investigations with respect to such matters.  Tenant expressly waives any
and all claims for damage by reason of any statement, representation,
warranty, promise or other agreement of Landlord or Landlord's agent(s), if
any, not contained in this Lease or in any Exhibit attached hereto.


                                   ARTICLE 15.
                                TELEPHONE SERVICE

      Notwithstanding any other provision of this Lease to the contrary.

      (a)    So long as the entirety of the Leased Premises is leased to Tenant:



                                      26.
<PAGE>

           (i)      Landlord shall have no responsibility for providing to
Tenant any telephone equipment, including wiring, within the Leased Premises
or for providing telephone service or connections from the utility to the
Leased Premises; and

          (ii)      Landlord makes no warranty as to the quality, continuity
or availability of the telecommunications services in the Building, and
Tenant hereby waives any claim against Landlord for any actual or
consequential damages (including damages for loss of business) in the event
Tenant's telecommunications services in any way are interrupted, damaged or
rendered less effective, except to the extent caused by the grossly negligent
or willful act or omission by Landlord, its agents or employees. Tenant
accepts the telephone equipment (including, without limitation, the INC, as
defined below) in its "AS-IS" condition, and Tenant shall be solely
responsible for contracting with a reliable third party vendor to assume
responsibility for the maintenance and repair thereof (which contract shall
contain provisions requiring such vendor to inspect the INC periodically (the
frequency of such inspections to be determined by such vendor based on its
experience and professional judgment), and requiring such vendor to meet
local and federal requirements for telecommunications material and
workmanship). Landlord shall not be liable to Tenant and Tenant waives all
claims against Landlord whatsoever, whether for personal injury, property
damage, loss of use of the Leased Premises, or otherwise, due to the
interruption or failure of telephone services to the Leased Premises. Tenant
hereby holds Landlord harmless and agrees to indemnify, protect and defend
Landlord from and against any liability for any damage, loss or expense due
to any failure or interruption of telephone service to the Leased Premises
for any reason. Tenant agrees to obtain loss of rental insurance adequate to
cover any damage, loss or expense occasioned by the interruption of
telephone service.

     (b)  At such time as the entirety of the Leased Premise is no longer
leased to Tenant, Landlord shall in its sole discretion have the right, by
written notice to Tenant, to elect to assume limited responsibility for INC,
as provided below, and upon such assumption of responsibility by Landlord,
this subparagraph (b) shall apply prospectively.

            (i)     Landlord shall provide Tenant access to such quantity of
pairs in the Building intra-building network cable ("INC") as is determined to
be available by Landlord in its reasonable discretion. Tenant's access to the
INC shall be solely by arrangements made by Tenant, as Tenant may elect,
directly with Pacific Bell or Landlord (or such vendor as Landlord may
designate), and Tenant shall pay all reasonable charges as may be imposed in
connection therewith. Pacific Bell's charges shall be deemed to be
reasonable. Subject to the foregoing, Landlord shall have no responsibility
for providing to Tenant any telephone equipment, including wiring, within the
Leased Premises or for providing telephone service or connections from the
utility to the Leased Premises, except as required by law.

           (ii)    Tenant shall not alter, modify, add to or disturb any
telephone wiring in the Leased Premises or elsewhere in the Building without
the Landlord's prior written consent. Tenant shall be liable to Landlord for
any damage to the telephone wiring in the Building due to the act, negligent
or otherwise, of Tenant or any employee, contractor or other agent of Tenant.
Tenant shall have no access to the telephone closets within the Building,
except in the manner and under procedures established by Landlord. Tenant
shall promptly notify Landlord of any actual or suspected failure of
telephone service to the Leased Premises.

          (iii)     All costs incurred by Landlord for the installation,
maintenance, repair and replacement of telephone wiring in the Building shall
be a Property Maintenance Cost.

           (iv)     Landlord makes no warranty as to the quality, continuity
or availability of the telecommunications services in the Building, and
Tenant hereby waives any claim against Landlord for any actual or
consequential damages (including damages for loss of business) in the event
Tenant's telecommunications services in any way are interrupted, damaged
or rendered less effective, except to the extent caused by the grossly
negligent or willful act or omission by Landlord, its agents or employees.
Tenant acknowledges that Landlord meets its duty of care to Tenant with
respect to the Building INC by contracting with a reliable third party vendor
to assume responsibility for the maintenance and repair thereof (which
contract shall contain provisions requiring such vendor to inspect the INC
periodically (the frequency of such inspections to be determined by such
vendor based on its experience and professional judgment), and requiring
such vendor to meet local and federal requirements for telecommunications
material and workmanship). Subject to the foregoing, Landlord shall not be
liable to Tenant and Tenant waives all claims against Landlord whatsoever,
whether for personal injury, property damage, loss of use of the Leased
Premises, or otherwise, due to the interruption or failure of telephone
services to the Leased Premises. Tenant hereby holds Landlord harmless and
agrees to indemnify, protect and defend Landlord from and against any
liability for any damage, loss or expense due to any failure or interruption
of telephone service to the Leased Premises for any reason. Tenant agrees to
obtain loss of rental insurance adequate to cover any damage, loss or expense
occasioned by the interruption of telephone service.

                                       27.
<PAGE>

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the respective dates below set forth with the intent to be legally bound
thereby as of the Effective Date of this Lease first above set forth.

                                     LANDLORD:

                                     1245 TERRA BELLA PARTNERS, LLC. a
                                     a California limited liability company

                                     By:   Menlo Equities LLC, a
                                           California limited liability company,
                                           its Managing Member

Dated:     4/30/97                   By: /s/   [ILLEGIBLE]                Member
      ----------------                  ---------------------------------

                                     TENANT:

                                     INTRABIOTICS PHARMACEUTICALS, INC.,
                                     a Delaware corporation


Dated: April 30, 1999                By: /s/ Kenneth J. Kelley
      ----------------                  ----------------------------------------

                                     Title: President and CEO
                                           -------------------------------------

Dated:                               By:
                                        ----------------------------------------

                                     Title:
                                           -------------------------------------

<PAGE>

ARTICLE 6.
ALTERATIONS AND IMPROVEMENTS


6.2 OWNERSHIP OF IMPROVEMENTS

SCHEDULE 6.2: Items belonging to tenant not deemed real property including
              but not limited to.

      -   water deionization/purification system and distribution
      -   house vacuum system and distribution
      -   house compressed dry air system and distribution
      -   telecommunications systems
      -   computer network system
      -   waste neutralization system
      -   trash compactor system
      -   satellite signal receivers
      -   compressed gas distribution system
      -   audio-visual equipment
      -   electronic security and monitoring systems
      -   back-up and emergency electrical power equipment


Initials:  /s/  K.K.
         ------------------------------------
          INTRABIOTICS PHARMACEUTICALS, INC.

Initials:  /s/ Kenneth Kelley
         ------------------------------------
          1245 TERRA BELLA PARTNERS, LLC