<PAGE>

                                                                    Exhibit 10.3

                                      LEASE
                                      -----

Landlord:      Britannia Pointe Grand Limited Partnership

Tenant:        COR Therapeutics, Inc.

Date:          July 1, 2001

<TABLE>
<CAPTION>
                                TABLE OF CONTENTS
                                -----------------
<S>                                                                           <C>
1.       PROPERTY ...........................................................  1
         1.1   Lease of Premises and Phase I Property; Existing Lease........  1
         1.2   Landlord's Reserved Rights....................................  1
         1.3   First Refusal Right ..........................................  2

2.       TERM ...............................................................  3
         2.1   Term..........................................................  3
         2.2   [Omitted.]....................................................  3
         2.3   Condition of Premises; Tenant Improvements....................  3
               (a)  "As Is" Condition........................................  3
               (b)  New Mezzanine Area ......................................  4
               (c)  New Lobby Area...........................................  4
         2.4   [Omitted.]....................................................  5
         2.5   Holding Over..................................................  5
         2.6   Option To Extend Term.........................................  5

3.       RENTAL .............................................................  6
         3.1   Minimum Rental................................................  6
               (a)  Rental Amounts ..........................................  6
               (b)  Rental Adjustment Due to Change in Square Footage .......  6
               (c)  Rental Amounts During First Extended Term ...............  7
               (d)  Rental Amounts During Second Extended Term ..............  7
         3.2   Late Charge...................................................  8

4.       [Omitted.]..........................................................  8

5.       [Omitted.]..........................................................  8

6.       TAXES ..............................................................  8
         6.1   Personal Property.............................................  8
         6.2   Real Property.................................................  8

7.       OPERATING EXPENSES .................................................  9
         7.1   Payment of Operating Expenses.................................  9
         7.2   Definition Of Operating Expenses.............................. 10
         7.3   Determination Of Operating Expenses .......................... 12
         7.4   Final Accounting For Lease Year .............................. 12
         7.5   Proration..................................................... 13

8.       UTILITIES .......................................................... 13
         8.1   Payment....................................................... 13
         8.2   Interruption.................................................. 13

9.       ALTERATIONS; SIGNS.................................................. 13
         9.1   Right To Make Alterations..................................... 13
</TABLE>


<PAGE>

<TABLE>
<S>                                                                                <C>
     9.2     Title To Alterations................................................. 14
             (a)   Landlord's Property............................................ 14
             (b)   Tenant's Property ............................................. 14
             (c)   Removal of Tenant's Property at End of Term.................... 14
             (d)   Items Located in Premises Outside the Phase I Property ........ 15
             (e)   Tenant's Rights to Modify, Etc. and Remove Tenant's Property... 15
             (f)   Tenant's Right to Encumber Tenant's Property................... 15
             (g)   Landlord's Purchase Option..................................... 15
     9.3     Tenant Fixtures...................................................... 15
     9.4     No Liens............................................................. 16
     9.5     Signs................................................................ 16

10.  MAINTENANCE AND REPAIRS...................................................... 16
     10.1    Landlord's Work...................................................... 16
     10.2    Tenant's Obligation For Maintenance.................................. 17
             (a)   Good Order, Condition And Repair............................... 17
             (b)   Landlord's Remedy.............................................. 17
             (c)   Condition Upon Surrender....................................... 17

11.  USE OF PREMISES.............................................................. 18
     11.1    Permitted Use........................................................ 18
     11.2    [Omitted.]........................................................... 18
     11.3    No Nuisance.......................................................... 18
     11.4    Compliance With Laws................................................. 18
     11.5    Liquidation Sales.................................................... 18
     11.6    Environmental Matters................................................ 19

12.  INSURANCE AND INDEMNITY...................................................... 22
     12.1    Insurance............................................................ 22
     12.2    Quality Of Policies And Certificates................................. 23
     12.3    Workers' Compensation................................................ 24
     12.4    Waiver Of Subrogation................................................ 24
     12.5    Increase In Premiums................................................. 24
     12.6    Indemnification...................................................... 24
     12.7    Blanket Policy....................................................... 25

13.  SUBLEASE AND ASSIGNMENT ..................................................... 25
     13.1    Assignment of Lease and Sublease of Premises......................... 25
     13.2    Rights Of Landlord................................................... 26

14.  RIGHT OF ENTRY AND QUIET ENJOYMENT........................................... 26
     14.1    Right Of Entry....................................................... 26
     14.2    Quiet Enjoyment...................................................... 27

15.  CASUALTY AND TAKING.......................................................... 27
     15.1    Damage or Destruction................................................ 27
     15.2    Condemnation......................................................... 28
     15.3    Reservation Of Compensation.......................................... 29
     15.4    Restoration Of Improvements.......................................... 30

16.  DEFAULT...................................................................... 30
     16.1    Events Of Default.................................................... 30
             (a)   [Omitted.]..................................................... 30
             (b)   Nonpayment..................................................... 30
             (c)   Other Obligations.............................................. 30
             (d)   General Assignment............................................. 30
             (e)   Bankruptcy..................................................... 30
             (f)   Receivership................................................... 31
             (g)   Attachment..................................................... 31
             (h)   Insolvency..................................................... 31
</TABLE>

                                      -ii-

<PAGE>

<TABLE>
<S>                                                                           <C>
     16.2     Remedies Upon Tenant's Default ................................ 31
     16.3     Remedies Cumulative ........................................... 32

17.  SUBORDINATION, ATTORNMENT AND SALE ..................................... 32
     17.1     Subordination To Mortgage ..................................... 32
     17.2     Sale Of Landlord's Interest ................................... 33
     17.3     Estoppel Certificates ......................................... 33
     17.4     Subordination to CC&R's ....................................... 33
     17.5     Mortgagee Protection .......................................... 33

18.  SECURITY ............................................................... 34
     18.1     Deposit ....................................................... 34

19.  MISCELLANEOUS .......................................................... 34
     19.1     Notices ....................................................... 34
     19.2     Successors And Assigns ........................................ 35
     19.3     No Waiver ..................................................... 35
     19.4     Severability .................................................. 35
     19.5     Litigation Between Parties .................................... 35
     19.6     Surrender ..................................................... 35
     19.7     Interpretation ................................................ 36
     19.8     Entire Agreement .............................................. 36
     19.9     Governing Law ................................................. 36
     19.10    No Partnership ................................................ 36
     19.11    Financial Information ......................................... 36
     19.12    Costs ......................................................... 37
     19.13    Time .......................................................... 37
     19.14    Rules And Regulations ......................................... 37
     19.15    Brokers. ...................................................... 37
     19.16    Memorandum Of Lease ........................................... 37
     19.17    Corporate Authority ........................................... 37
     19.18    Execution and Delivery ........................................ 37
     19.19    Survival ...................................................... 37
     19.20    Parking ....................................................... 37
</TABLE>

                                     -iii-

<PAGE>


                                    EXHIBITS
                                    --------

                  EXHIBIT A             Real Property Description

                  EXHIBIT A-1           Phase I Property (Plan)

                  EXHIBIT B             Site Plan

                  EXHIBIT C             Future Entrance Lobby

                                      -iv-




<PAGE>

                                      LEASE
                                      -----

         THIS LEASE ("Lease") is made and entered into as of July 1, 2001, by
                      -----
and between BRITANNIA POINTE GRAND LIMITED PARTNERSHIP, a Delaware limited
partnership ("Landlord"), and COR THERAPEUTICS, INC., a Delaware corporation
              --------
("Tenant").
  ------

                          THE PARTIES AGREE AS FOLLOWS:


                                   1. PROPERTY
                                      --------

         1.1   Lease of Premises and Phase I Property; Existing Lease.
               ------------------------------------------------------

               (a)  Landlord leases to Tenant and Tenant hires and leases from
Landlord, on the terms, covenants and conditions hereinafter set forth, the
following office and laboratory premises (hereinafter collectively called the
"Premises") which consist of approximately 136,242 square feet and are located
 --------
on the real property described as the "Phase I Property" in Exhibit A attached
                                                            ---------
hereto and depicted as such in Exhibit A-1 attached hereto (the "Phase I
                               -----------                       -------
Property") in South San Francisco, California: (i) the one-story building
--------
commonly known as 256 East Grand Avenue; (ii) the two-story building commonly
known as 260 East Grand Avenue; (iii) Suites 20, 26, 35, 45, 50 and 70 in the
one-story building commonly known as 250 East Grand Avenue; and (iv) the
westerly portion of the two-story building commonly known as 270 East Grand
Avenue. The Phase I Property is part of the office and research and development
center commonly known as Britannia Pointe Grand Business Park located at East
Grand Avenue and Harbor Way in the City of South San Francisco, County of San
Mateo, State of California on the real property which is more particularly
described as the "Center" in Exhibit A attached hereto (the "Center"). The
                             ---------                       ------
location of the Premises in the Center is depicted on the site plan attached
hereto as Exhibit B (the "Site Plan"). The Premises and other improvements
          ---------       ---------
presently existing on the Phase I Property are sometimes referred to
collectively herein as the "Phase I Improvements." The parking areas, driveways,
                            --------------------
sidewalks, landscaped areas and other portions of the Center that lie outside
the exterior walls of the buildings now or hereafter existing from time to time
in the Center, as depicted in Exhibit A-1 and in the Site Plan and as hereafter
                              -----------
modified by Landlord from time to time in accordance with the provisions of this
Lease, are sometimes referred to herein as the "Common Areas." Tenant already
                                                ------------
occupies the entire Premises pursuant to a Standard Form Industrial Net Lease
dated as of September 23, 1988 between NC Land Associates Limited Partnership, a
Delaware limited partnership, and COR Therapeutics, Inc., a California
corporation, as amended from time to time (the "Existing Lease"). Effective July
                                                --------------
1, 2001, this Lease supersedes the Existing Lease for all purposes, Tenant's
continuing occupancy of the Premises shall be governed solely by the provisions
of this Lease, and the Existing Lease shall be of no further force or effect,
except that the rights and obligations of Landlord and Tenant with respect to
the Premises for periods prior to July 1, 2001 shall continue to be governed by
the Existing Lease.

               (b)  As an appurtenance to Tenant's leasing of the Premises
pursuant to Section 1.1(a), Landlord hereby grants to Tenant, for the benefit of
Tenant and its employees, suppliers, shippers, customers and invitees, during
the term of this Lease, the non-exclusive right to use, in common with others
entitled to such use, (i) those portions of the Common Areas improved from time
to time for use as parking areas, driveways, sidewalks, landscaped areas, or for
other common purposes, and (ii) all access easements and similar rights and
privileges relating to or appurtenant to the Center and created or existing from
time to time under any access easement agreements, declarations of covenants,
conditions and restrictions, or other written agreements now or hereafter of
record with respect to the Center, subject however to any limitations applicable
to such rights and privileges under applicable law, under this Lease and/or
under the written agreements creating such rights and privileges.

         1.2   Landlord's Reserved Rights. To the extent reasonably necessary to
               --------------------------
permit Landlord to exercise any rights of Landlord and discharge any obligations
of Landlord under this Lease, Landlord shall have, in addition to the right of
entry set forth in Section 16.1 hereof, the following rights: (i) to make
changes to the Common Areas, including, without limitation, changes in the
location, size or shape of any portion of the Common Areas, and to relocate

<PAGE>

parking spaces in the Center and in the Common Areas, provided that except on a
                                                      --------
temporary basis to the extent permitted under clause (ii) of this sentence, (A)
Landlord shall not materially decrease the number of such parking spaces in
areas of the Phase I Property generally adjacent to the Premises as shown on
Exhibit A-1 and on the Site Plan, and (B) Landlord shall not permit the ratio of
-----------
parking spaces in the Center to fall below 3.0 spaces for each 1,000 square feet
of space in the various buildings existing from time to time in the Center
(except to the extent, if any, that such ratio may fall below 3.0 spaces per
1,000 square feet by an amount solely reflecting the creation of additional
square footage in the Center, without additional parking and subject to receipt
of any required governmental variances or approvals, by reason of the
construction of the mezzanine area contemplated in Section 2.3(b) and/or the new
lobby area contemplated in Section 2.3(c)); (ii) to close temporarily any of the
Common Areas for maintenance or other reasonable purposes, provided that
                                                           --------
reasonable parking and reasonable access to the Premises remain available; (iii)
to construct, alter or add to other buildings and Common Area improvements in
the Center (including, but not limited to, construction of site improvements,
buildings and Common Area improvements on portions of the Center and/or on
adjacent properties owned by Landlord from time to time); (iv) to build in areas
adjacent to the Center and to add such areas to the Center or operate such
areas, for maintenance, access, parking and other purposes, on an integrated
basis with the Phase I Property and/or the Center; (v) to use the Common Areas
while engaged in making additional improvements, repairs or alterations to the
Center or any portion thereof or to any adjacent properties owned by Landlord
from time to time; and (vi) to do and perform such other acts with respect to
the Common Areas and the Center as may be necessary or appropriate; provided,
                                                                    --------
however, that notwithstanding anything to the contrary in this Section 1.2,
Landlord's exercise of its rights hereunder shall not cause any material
diminution of Tenant's rights, nor any material increase of Tenant's
obligations, under this Lease or with respect to the Phase I Improvements.

     1.3    First Refusal Right.
            -------------------

            (a) For purposes of this Section 1.3, the term "First Refusal Space"
                                                            -------------------
shall mean, as the context may require, any one or more of the following four
spaces individually or all four of such spaces collectively: (i) the space of
approximately 10,462 square feet commonly known as 250 East Grand Avenue, Suite
65 and presently occupied by Farmers Insurance; (ii) the space of approximately
6,489 square feet commonly known as 250 East Grand Avenue, Suite 90 and
presently occupied by Gryphon Sciences; (iii) the space of approximately 24,725
presently occupied by ViroLogic, Inc. on the easterly end of the building
commonly known as 270 East Grand Avenue; and (iv) the building commonly known as
280 East Grand Avenue, presently occupied by Cytokinetics, Inc., and containing
approximately 50,195 square feet (the "280 East Grand Building"). The four
                                       -----------------------
spaces constituting the First Refusal Space are designated as such on the Site
Plan.

            (b) Landlord shall not lease all or any portion of the First Refusal
Space at any time during the term of this Lease (including any duly elected
extension terms) except in compliance with the procedure set forth in Section
1.3(c) hereof; provided, however, that the foregoing restriction shall not apply
               --------
during any period in which Tenant is in default (beyond any applicable cure
periods) under this Lease; provided further, that the foregoing restriction
                           ----------------
shall not apply to any renewal or extension options duly elected by the
applicable tenant or any successor tenant pursuant to a contractual renewal or
extension option set forth in the lease documents governing the respective
portions of the First Refusal Space on the date of this Lease, but such
restriction shall apply to any future lease amendments or grants of renewal or
extension rights with respect to any portion of the First Refusal Space that
would have the effect of either extending the term of any existing occupancy of
any portion of the First Refusal Space beyond the term presently specified in
the lease documents governing such portion, or granting renewal or extension
rights beyond those presently set forth in the applicable lease documents with
respect to any portion of the First Refusal Space; and provided further, that
                                                       ----------------
the foregoing restriction shall not apply to any leasing, subleasing or other
occupancy by Raven Pharmaceuticals, Inc. of all or any portion of the space
described in clause (iii) of Section 1.3(a), whether pursuant to the sublease
presently in effect between ViroLogic, Inc. and Raven Pharmaceuticals, Inc. or
otherwise, provided that such leasing, subleasing or other occupancy by Raven
Pharmaceuticals, Inc. shall not in any event be authorized to extend beyond June
30, 2003.

                                       -2-

<PAGE>

            (c) If Landlord intends during the term of this Lease (including any
duly elected extension terms) to lease all or any portion of the First Refusal
Space, and if Tenant is not then in default (beyond any applicable cure periods)
under this Lease, then Landlord shall give to Tenant written notice of such
intention (the "Offer Notice"), specifying the material terms on which Landlord
                ------------
proposes to lease the First Refusal Space or applicable portion thereof (the
"Offered Space") and offering to Tenant the opportunity to lease the Offered
 -------------
Space on the terms specified in the Offer Notice. The time period within which
Tenant is entitled to accept such offer by written notice to Landlord (the
"Offer Period"), measured from the date of Tenant's receipt of the Offer Notice,
 ------------
shall be ten (10) business days, except that if the Offered Space is all or
                                 ------
substantially all of the 280 East Grand Building, then the Offer Period shall be
thirty (30) days unless Tenant has previously received and failed to accept an
                 ------
Offer Notice with respect to such Offered Space in the 280 East Grand Building
and Landlord is thereafter, within one hundred eighty (180) days after
expiration of the Offer Period for such prior Offer Notice, coming back to
Tenant with a further Offer Notice reflecting terms more favorable to the lessee
than the terms offered in the prior Offer Notice, in which event the Offer
Period for such further Offer Notice shall be ten (10) business days. Upon
timely acceptance of an Offer Notice by Tenant, the Offered Space shall be
leased to Tenant on the terms set forth in the Offer Notice and on the
additional terms and provisions set forth herein (except to the extent
inconsistent with the terms set forth in the Offer Notice) and the parties shall
promptly execute an amendment to this Lease adding the Offered Space to the
Premises and making any appropriate amendments to provisions of this Lease to
reflect different rent and other obligations applicable to the Offered Space
under the terms of the Offer Notice. If Tenant does not accept Landlord's offer
within the allotted time, Landlord shall thereafter have the right to lease the
Offered Space to a third party at any time within one hundred eighty (180) days
after the expiration of the Offer Period, at a minimum rental and on other terms
and conditions not more favorable to the lessee than the minimum rental and
other terms offered to Tenant in the Offer Notice. If Landlord does not
thereafter lease the Offered Space to a third party within one hundred eighty
(180) days as contemplated in the preceding sentence, or if Landlord does lease
                                                                     ----
the Offered Space to a third party within such 180-day period but the Offered
Space thereafter again becomes available during the term of this Lease
(including any duly elected extension terms), then in either such event Landlord
shall be required to comply again with the provisions of this Section 1.3 prior
to any further leasing of the Offered Space.

                                     2. TERM
                                        ----

     2.1    Term. The term of this Lease shall commence on July 1, 2001 (the
            ----
"Commencement Date") and shall end, unless sooner terminated or extended as
 -----------------
hereinafter provided, on June 30, 2011 (the "Termination Date").
                                             ----------------

     2.2    [Omitted.]

     2.3    Condition of Premises; Tenant Improvements.
            ------------------------------------------

            (a)  "As Is" Condition. Tenant, being the present occupant of the
                  ----------------
Premises pursuant to the Existing Lease, acknowledges that it is familiar with
the physical condition of the Premises, that it will accept and occupy the
Premises under this Lease in "AS IS" condition as the Premises exist on the date
of this Lease, and that Landlord shall have no obligation to improve, repair or
prepare the Premises, prior to the Commencement Date or, except as otherwise
expressly set forth in this Lease, after the Commencement Date, for occupancy by
Tenant under this Lease. TENANT ACKNOWLEDGES THAT EXCEPT AS EXPRESSLY SET FORTH
IN THIS LEASE, NEITHER LANDLORD NOR ANY AGENT OF LANDLORD HAS MADE ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE PRESENT OR FUTURE
SUITABILITY OF THE PREMISES OR THE PHASE I IMPROVEMENTS FOR THE CONDUCT OF
TENANT'S BUSINESS OR PROPOSED BUSINESS THEREON.

            (b)  New Mezzanine Area. Tenant has requested Landlord's permission
                 ------------------
to construct, in Tenant's discretion, a mezzanine area of approximately 8,000
square feet in the

                                       -3-

<PAGE>

portion of the Premises commonly known as 260 East Grand Avenue, approximately
in the location designated as "Future Mezzanine Premises" on the Site Plan.

            (i)   Landlord hereby approves and consents to such construction, in
concept, subject to (A) completion of such improvements by Tenant at Tenant's
sole expense (except as otherwise provided in subparagraph (b)(ii) hereof) and
in compliance with all the requirements of Article 9 hereof, including (but not
limited to) submission of all plans and specifications for Landlord's review and
approval, which approval shall not be unreasonably withheld or delayed, and (B)
Landlord's receipt of a variance from the City of South San Francisco or other
applicable governmental authorities with respect to the Center's compliance with
applicable parking requirements following construction of such mezzanine area.
Landlord hereby agrees to use, at Tenant's request, reasonable efforts to obtain
such a variance if and when Tenant advises Landlord that Tenant wishes to
proceed with construction of such mezzanine area, and Landlord shall bear the
expense of all fees and costs incurred by Landlord in connection with Landlord's
application for such a variance.

            (ii)  Landlord agrees to pay to Tenant, within thirty (30) days
after issuance to Tenant of a certificate of occupancy (or its equivalent) for
such mezzanine area and delivery by Tenant to Landlord of lien waivers
reasonably satisfactory to Landlord from the contractor(s) performing such
construction, the sum of Two Hundred Thousand Dollars ($200,000) as a
construction allowance towards Tenant's costs for construction of the shell and
structural components of such mezzanine area.

            (iii) From and after the date Tenant first occupies the
substantially completed mezzanine area, the mezzanine area shall be deemed to be
part of the Premises and the square footage of the mezzanine area (as determined
by Landlord's architect, measuring to the exterior faces of the walls defining
or enclosing such mezzanine area) shall be added to the square footage of the
Premises for purposes of adjusting Tenant's minimum rent obligation under
Section 3.1(b) and Tenant's Operating Expense Share under Section 7.1(b).

       (c)  New Lobby Area. Tenant has requested Landlord's consent to and/or
            --------------
participation in the construction, in Tenant's discretion, of a new, enclosed
lobby area of approximately 2,500 square feet on the northerly side of the
building commonly known as 250 East Grand Avenue, approximately in the location
designated as "Future Entrance Lobby -- Premises" on Exhibit C attached hereto
                                                     ---------
and incorporated herein by this reference.

            (i)   Landlord hereby approves and consents to such construction, in
concept, subject to Landlord's receipt of a variance from the City of South San
Francisco or other applicable governmental authorities with respect to the
Center's compliance with applicable parking requirements following construction
of such lobby area. Landlord hereby agrees to use, at Tenant's request and at
Landlord's expense, reasonable efforts to obtain such a variance if and when
Tenant notifies Landlord that Tenant wishes to proceed with construction of such
lobby area.

            (ii)  If and when Tenant notifies Landlord of Tenant's desire to
proceed with the construction of the enclosed lobby area and Landlord obtains
the necessary parking variance as described above, (A) Landlord (or, if Landlord
and Tenant mutually agree, Tenant) shall diligently construct, at Landlord's
sole expense, in accordance with plans and specifications prepared by Landlord's
architect and approved by Landlord and Tenant (which approval shall not be
unreasonably withheld or delayed by either party), the cold shell enclosing the
new lobby area (i.e., exterior walls, slab, roof, windows and entrance doors),
any necessary site preparation work and any exterior paving, landscaping or
other sitework, and (B) Tenant shall construct, at Tenant's sole expense, in
compliance with all the requirements of Article 9 hereof, including (but not
limited to) submission of all plans and specifications for Landlord's review and
approval, all interior finishes and nonstructural portions of such lobby area,
other than the portion of the work for which Landlord is responsible under
clause (A) of this sentence. If Landlord and Tenant mutually agree that Tenant
shall construct some or all of the shell work described in clause (A) of the
preceding sentence at Landlord's expense, then Landlord shall prepare the
applicable plans and specifications as described in such clause (A), the
contractor selected by Tenant shall be subject to Landlord's prior written
approval (not to be unreasonably withheld), the construction

                                       -4-

<PAGE>

budget and economic terms of Tenant's contract with such approved contractor
shall be subject to Landlord's prior written approval (not to be unreasonably
withheld), and during the course of construction Landlord shall pay to Tenant or
to Tenant's contractor, as Tenant may direct, within twenty (20) days after
receipt of a written payment request and reasonable supporting documentation
(including, but not limited to, lien waivers reasonably satisfactory to Landlord
from the contractor(s) performing the applicable work) from Tenant from time to
time at reasonable intervals as mutually agreed by Landlord and Tenant, the
amount of all costs and expenses reasonably incurred by Tenant in connection
with the construction of such shell work.

            (iii) From and after the date the enclosed lobby area is
substantially completed and is first placed in use, the lobby area shall be
deemed to be part of the Premises and the square footage of the lobby area (as
determined by Landlord's architect, measuring to the exterior faces of exterior
walls and to the dripline of any exterior overhangs) shall be added to the
square footage of the Premises for purposes of adjusting Tenant's minimum rent
obligation under Section 3.1(b) and Tenant's Operating Expense Share under
Section 7.1(b).

      2.4   [Omitted.]

      2.5   Holding Over. If Tenant holds possession of the Premises or any
            ------------
portion thereof after the term of this Lease with Landlord's written consent,
                                             ----
then except as otherwise specified in such consent, Tenant shall become a tenant
from month to month at one hundred ten percent (110%) of the rental and
otherwise upon the terms herein specified for the period immediately prior to
such holding over and shall continue in such status until the tenancy is
terminated by either party upon not less than thirty (30) days prior written
notice. If Tenant holds possession of the Premises or any portion thereof after
the term of this Lease without Landlord's written consent, then Landlord in its
                       -------
sole discretion may elect (by written notice to Tenant) to have Tenant become a
tenant either from month to month or at will, at one hundred fifty percent
(150%) of the rental (prorated on a daily basis for an at-will tenancy, if
applicable) and otherwise upon the terms herein specified for the period
immediately prior to such holding over, or may elect to pursue any and all legal
remedies available to Landlord under applicable law with respect to such
unconsented holding over by Tenant. Tenant shall indemnify and hold Landlord
harmless from any loss, damage, claim, liability, cost or expense (including
reasonable attorneys' fees) resulting from any delay by Tenant in surrendering
the Premises or any portion thereof (except to the extent such delay is with
Landlord's prior written consent), including but not limited to any claims made
by a succeeding tenant by reason of such delay. Acceptance of rent by Landlord
following expiration or termination of this Lease shall not constitute a renewal
of this Lease.

      2.6   Option To Extend Term. Tenant shall have the option to extend the
            ---------------------
term of this Lease, at the minimum rental set forth in Section 3.1(c) and (d)
and otherwise upon all the terms and provisions set forth herein with respect to
the initial term of this Lease, for up to two (2) additional periods of five (5)
years each, the first commencing upon the expiration of the initial term hereof
and the second commencing upon the expiration of the first extended term, if
any. Exercise of such option with respect to the first such extended term shall
be by written notice to Landlord at least nine (9) months and not more than
twelve (12) months prior to the expiration of the initial term hereof; exercise
of such option with respect to the second extended term, if the first extension
option has been duly exercised, shall be by like written notice to Landlord at
least nine (9) months and not more than twelve (12) months prior to the
expiration of the first extended term hereof. If Tenant is in default hereunder,
beyond any applicable notice and cure periods, on the date of such notice or on
the date any extended term is to commence, then the exercise of the option shall
be of no force or effect, the extended term shall not commence and this Lease
shall expire at the end of the then current term hereof (or at such earlier time
as Landlord may elect pursuant to the default provisions of this Lease). If
Tenant properly exercises one or more extension options under this Section, then
all references in this Lease (other than in this Section 2.6) to the "term" of
this Lease shall be construed to include the extension term(s) thus elected by
Tenant. Except as expressly set forth in this Section 2.6, Tenant shall have no
right to extend the term of this Lease beyond its prescribed term.

                                       -5-

<PAGE>

                                    3. RENTAL
                                       ------
         3.1      Minimum Rental.
                  --------------

                  (a) Rental Amounts. Tenant shall pay to Landlord as minimum
                      --------------
rental for the Premises, in advance, without deduction, offset, notice or
demand, on or before the Commencement Date and on or before the first day of
each subsequent calendar month of the initial term of this Lease, the following
amounts per month:

                      Months                   Monthly Minimum Rental
                      ------                   ----------------------

                      7/01 - 12/01              $212,537.52  ($1.560/sq ft)
                      1/02 - 12/02               261,584.64  ($1.920/sq ft)
                      1/03 - 12/03               271,121.58  ($1.990/sq ft)
                      1/04 - 12/04               283,383.36  ($2.080/sq ft)
                      1/05 - 12/05               479,571.84  ($3.520/sq ft)
                      1/06 - 12/06               498,781.96  ($3.661/sq ft)
                      1/07 - 12/07               518,673.29  ($3.807/sq ft)
                      1/08 - 12/08               539,518.32  ($3.960/sq ft)
                      1/09 - 12/09               561,044.56  ($4.118/sq ft)
                      1/10 - 12/10               583,524.49  ($4.283/sq ft)
                      1/11 -  6/11               606,821.87  ($4.454/sq ft)

If the obligation to pay minimum rental hereunder commences on other than the
first day of a calendar month or if the term of this Lease terminates on other
than the last day of a calendar month, the minimum rental for such first or last
month of the term of this Lease, as the case may be, shall be prorated based on
the number of days the term of this Lease is in effect during such month. If an
increase in minimum rental becomes effective on a day other than the first day
of a calendar month, the minimum rental for that month shall be the sum of the
two applicable rates, each prorated for the portion of the month during which
such rate is in effect.

                  (b) Rental Adjustment Due to Change in Square Footage. The
                      -------------------------------------------------
minimum rental amounts specified in this Section 3.1 are based upon an agreed
area of 136,242 square feet for the Premises as they exist on the Commencement
Date. If the area of the Premises increases during the initial term of this
Lease as a result of the construction of the new mezzanine area as contemplated
in Section 2.3(b) and/or the construction of the new lobby area as contemplated
in Section 2.3(c), then beginning on the date the applicable construction is
substantially completed and the applicable new area becomes available for use or
is actually used by Tenant in the ordinary course of its business, the minimum
monthly rent for the remainder of the initial term of this Lease shall be
increased, for each month, by an amount equal to the square footage of the newly
constructed area (measured in accordance with Section 2.3(b)(iii) or
2.3(c)(iii), as applicable) multiplied by the applicable rental rate per square
foot as set forth in Section 3.1(a) above. In the event of any such increase in
the area of the Premises during any extended term of this Lease, the minimum
monthly rent during such extended term (as otherwise determined pursuant to
Section 3.1(c) or 3.1(d), as applicable) shall be increased on a similar basis
in strict proportion to the increase in the size of the Premises as a result of
the newly constructed area being added to the Premises. Any rental increases due
to a change in the square footage of the Premises as a result of Tenant's
exercise of a first refusal right under Section 1.3 hereof with respect to any
of the First Refusal Space shall be determined and implemented in accordance
with the provisions of Section 1.3 and the applicable Offer Notice thereunder.

                  (c) Rental Amounts During First Extended Term. If Tenant
                      -----------------------------------------
properly exercises its right to extend the term of this Lease pursuant to
Section 2.6 hereof, the minimum rental during the first year of the first
extended term shall be equal to the fair market rental value of the Premises (as
defined below), including any cost-of-living adjustments or other rental
increase provisions then customary in the City of South San Francisco for
comparable commercial leases, determined as of the commencement of such extended
term in accordance with this paragraph. Upon Landlord's receipt of a proper
notice of Tenant's exercise of its option to extend the term of this Lease, the
parties shall have sixty (60) days in which to agree on the initial fair market
rental (including any applicable rental increase provisions) for the Premises at

                                      - 6 -

<PAGE>

the commencement of the first extended term for the uses permitted hereunder. If
the parties agree on such initial fair market rental and rental increase
provisions (if any), they shall execute an amendment to this Lease stating the
amount of the applicable minimum monthly rental and any applicable rental
increase provisions. If the parties are unable to agree on such rental
(including any applicable rental increase provisions) within such sixty (60) day
period, then within fifteen (15) days after the expiration of such period each
party, at its cost and by giving notice to the other party, shall appoint a real
estate appraiser with at least five (5) years experience appraising similar
commercial properties in northeastern San Mateo County to appraise and set the
initial fair market rental and any applicable rental increase provisions for the
Premises at the commencement of the first extended term in accordance with the
provisions of this Section 3.1(c). If either party fails to appoint an appraiser
within the allotted time, the single appraiser appointed by the other party
shall be the sole appraiser. If an appraiser is appointed by each party and the
two appraisers so appointed are unable to agree upon an initial fair market
rental (and any appropriate rental increase provisions) within thirty (30) days
after the appointment of the second, the two appraisers shall appoint a third
similarly qualified appraiser within ten (10) days after expiration of such
30-day period; if they are unable to agree upon a third appraiser, then either
party may, upon not less than five (5) days notice to the other party, apply to
the Presiding Judge of the San Mateo County Superior Court for the appointment
of a third qualified appraiser. Each party shall bear its own legal fees in
connection with appointment of the third appraiser and shall bear one-half of
any other costs of appointment of the third appraiser and of such third
appraiser's fee. The third appraiser, however selected, shall be a person who
has not previously acted for either party in any capacity. Within thirty (30)
days after the appointment of the third appraiser, a majority of the three
appraisers shall set the initial fair market rental and any applicable rental
increase provisions for the first extended term and shall so notify the parties.
If a majority are unable to agree within the allotted time, then (i) the three
appraised initial fair market rentals shall be added together and divided by
three and the resulting quotient shall be the initial fair market rental for the
first extended term, and (ii) the applicable rental increase provision shall be
equal to the mathematical average (or the nearest reasonable approximation
thereto) of the two rental increase provisions that are most closely comparable,
which determinations shall be binding on the parties and shall be enforceable in
any further proceedings relating to this Lease. For purposes of this Section
3.1(c), the "fair market rental" of the Premises shall be determined with
reference to the then prevailing market rental rates for properties in the City
of South San Francisco with shell and office, laboratory and research and
development improvements and site (common area) improvements comparable to those
then existing in the Premises and in the Center, taking into account for such
determination all tenant improvements then existing in the Premises (including,
but not limited to, all fixtures, equipment and laboratory improvements in place
in the Premises on the Commencement Date) other than alterations, improvements
or equipment which were constructed or installed by Tenant at its sole expense
and which Tenant has a right or obligation to remove from the Premises at the
expiration of this Lease pursuant to the provisions of Article 9 hereof.

                  (d) Rental Amounts During Second Extended Term. If Tenant
                      ------------------------------------------
properly exercises its right to a second extended term of this Lease pursuant to
Section 2.6 hereof, the minimum rental and any applicable rental increase
provisions during such second extended term shall be determined in the same
manner provided in the preceding paragraph for the first extended term, except
that the determination shall be made as of the commencement of the second
extended term.

            3.2   Late Charge. If Tenant fails to pay rental or other amounts
                  -----------
due Landlord hereunder on or before the fifth (5/th/) day after such rental or
other amount is due, such unpaid amounts shall bear interest for the benefit of
Landlord at a rate equal to the lesser of fifteen percent (15%) per annum or the
maximum rate permitted by law, from the date due to the date of payment. In
addition to such interest, Tenant shall pay to Landlord a late charge in an
amount equal to six percent (6%) of any installment of minimum rental and any
other amounts due Landlord if not paid in full on or before the fifth (5/th/)
day after such rental or other amount is due. Tenant acknowledges that late
payment by Tenant to Landlord of rental or other amounts due hereunder will
cause Landlord to incur costs not contemplated by this Lease, including, without
limitation, processing and accounting charges and late charges which may be
imposed on Landlord by the terms of any loan relating to the Center or any
portion thereof. Tenant further acknowledges that it is extremely difficult and
impractical to fix the exact amount of such costs

                                      - 7 -

<PAGE>

and that the late charge set forth in this Section 3.2 represents a fair and
reasonable estimate thereof. Acceptance of any late charge by Landlord shall not
constitute a waiver of Tenant's default with respect to overdue rental or other
amounts, nor shall such acceptance prevent Landlord from exercising any other
rights and remedies available to it. Acceptance of rent or other payments by
Landlord shall not constitute a waiver of late charges or interest accrued with
respect to such rent or other payments or any prior installments thereof, nor of
any other defaults by Tenant, whether monetary or non-monetary in nature,
remaining uncured at the time of such acceptance of rent or other payments.

                                  4. [Omitted.]

                                  5. [Omitted.]

                                    6. TAXES
                                       -----

         6.1 Personal Property. Tenant shall be responsible for and shall pay
             -----------------
prior to delinquency all taxes and assessments levied against or by reason of
(a) any and all alterations, additions and items installed or placed on or in
the Premises and taxed as personal property rather than as real property, and/or
(b) all personal property, trade fixtures and other property placed by Tenant on
or about the Premises. Upon request by Landlord, Tenant shall furnish Landlord
with satisfactory evidence of Tenant's payment thereof. If at any time during
the term of this Lease any of said alterations, additions or personal property,
whether or not belonging to Tenant, shall be taxed or assessed as part of the
Center, then such tax or assessment shall be paid by Tenant to Landlord within
fifteen (15) days after presentation by Landlord of copies of the tax bills in
which such taxes and assessments are included and shall, for the purposes of
this Lease, be deemed to be personal property taxes or assessments under this
Section 6.1.

         6.2 Real Property. To the extent any real property taxes and
             -------------
assessments on any portions of the Center (including, but not limited to, the
Improvements or any portion thereof) leased or occupied solely by Tenant are
assessed directly to Tenant, Tenant shall be responsible for and shall pay prior
to delinquency all such taxes and assessments levied against the applicable
portions of the Center. Upon request by Landlord, Tenant shall furnish Landlord
with satisfactory evidence of Tenant's payment thereof. To the extent the Center
and/or Improvements are taxed or assessed to Landlord following the Commencement
Date, such real property taxes and assessments shall constitute Operating
Expenses (as that term is defined in Section 7.2 of this Lease) and shall be
paid in accordance with the provisions of Article 7 of this Lease.

                                      - 8 -

<PAGE>

                              7. OPERATING EXPENSES
                                 ------------------

         7.1      Payment of Operating Expenses.
                  -----------------------------

                  (a) Tenant shall pay to Landlord, at the time and in the
manner hereinafter set forth, as additional rental, an amount equal to
twenty-four and twenty-one hundredths percent (24.21%) ("Tenant's Operating Cost
                                                         -----------------------
Share") of the Operating Expenses defined in Section 7.2; provided, however,
-----                                                     --------
that the Tenant's Operating Cost Share set forth in the preceding portion of
this sentence shall apply only to expenses that are determined and allocated by
Landlord on a Center-wide basis, subject to any adjustments required under any
other applicable provisions of this Section 7.1, and that Tenant's Operating
Cost Share shall be seventy-six and fifty-seven hundredths percent (76.57%) with
respect to any Operating Expenses defined in Section 7.2 that are reasonably
allocable solely to the Phase I Property. As of the date of this Lease, Landlord
represents that the four buildings in which the Premises are located are the
only buildings located on the Phase I Property and that Landlord's current
practice is to determine and allocate all Operating Expenses (including, but not
limited to, real and personal property taxes and assessments, insurance,
building maintenance, property management, landscape maintenance and irrigation,
and parking area maintenance and lighting) on a stand-alone basis to the Phase I
Property.

                  (b) Tenant's Operating Cost Share as specified in paragraph
(a) of this Section with respect to Operating Expenses which are determined and
allocated on a Center-wide basis is based upon an area of 136,242 square feet
for the Premises and upon an aggregate area of 562,859 square feet for the
existing buildings owned by Landlord in the Center as depicted in the Site Plan.
Tenant's Operating Cost Share as specified in paragraph (a) of this Section with
respect to Operating Expenses which are determined and allocated solely to the
Phase I Property is based upon an area of 136,242 square feet for the Premises
and upon an aggregate area of 177,938 square feet for the existing buildings on
the Phase I Property. If the actual area of the buildings on the Phase I
Property from time to time or of the buildings owned from time to time by
Landlord in the Center and consolidated with the buildings in which the Premises
are located for operation, maintenance, common area and Operating Expense
purposes, as applicable, as such area is determined in good faith by Landlord's
architect on the same basis of measurement under which the Premises have been
determined to contain 136,242 square feet (from the exterior faces of exterior
walls and from the dripline of any overhangs, except that in the case of any
two-story recesses or overhangs, the area to the dripline of the overhang is
counted as part of the area of the first story but not as part of the area of
the second story), differs from the assumed figures set forth above (including,
but not limited to, any such difference arising from the construction of
additional buildings in the Center as contemplated in Section 7.1(c) hereof), or
if the area of the Premises changes from time to time pursuant to the
construction of additional areas of the Premises pursuant to Section 2.3(b)
and/or 2.3(c) and/or pursuant to Tenant's exercise of a first refusal right
pursuant to Section 1.3 hereof, then Tenant's Operating Cost Share as it applies
to Operating Expenses that are determined and allocated on a Center-wide basis
or that are determined and allocated solely with respect to the Phase I
Property, as applicable, shall be adjusted to reflect the actual areas so
determined as they exist from time to time; provided, however, that in the event
                                            --------
Tenant exercises a first refusal right with respect to the 280 East Grand
Building, Landlord hereby advises Tenant that it is presently Landlord's
practice to account for all Operating Expenses attributable or allocable to the
separate legal parcel on which the 280 East Grand Building is located on a
stand-alone basis and to allocate such Operating Expenses one hundred percent
(100%) to the tenant(s) of the 280 East Grand Building.

                  (c) If Landlord at any time constructs additional buildings in
the Center or on any adjacent property owned by Landlord and operated, for
common area purposes, on an integrated basis with the Center, then Tenant's
Operating Cost Share as it applies to Operating Expenses that are determined and
allocated on a Center-wide basis shall be adjusted to be equal to the percentage
determined by dividing the gross square footage of the Premises as they exist
from time to time by the gross square footage of all buildings located in the
Center or on any applicable adjacent property owned by Landlord as described
above. In determining such percentage, a building shall be taken into account
from and after the date on which a tenant first enters into possession of the
building or a portion thereof, and the good faith determination of the

                                      - 9 -

<PAGE>

gross square footage of any such building by Landlord's architects shall be
final and binding upon the parties.

         7.2      Definition Of Operating Expenses.
                  --------------------------------

                  (a) Subject to the exclusions and provisions hereinafter
contained, the term "Operating Expenses" shall mean the total costs and expenses
                     ------------------
incurred by or allocable to Landlord for management, operation and maintenance
of the Improvements, the Center, the buildings in the Center, and the real
property on which the Center is located (or, in the case of items that are
determined and allocated on a stand-alone basis as described in Section 7.1,
that portion of the Center that consists of the separate legal parcel or parcels
containing the buildings in which the Premises are located), including, without
limitation, costs and expenses of (i) insurance (including earthquake and
environmental insurance), property management, landscaping, and the operation,
repair and maintenance of buildings and Common Areas; (ii) all utilities and
services; (iii) real and personal property taxes and assessments or substitutes
therefor levied or assessed against the Center or any part thereof, including
(but not limited to) any possessory interest, use, business, license or other
taxes or fees, any taxes imposed directly on rents or services, any assessments
or charges for police or fire protection, housing, transit, open space, street
or sidewalk construction or maintenance or other similar services from time to
time by any governmental or quasi-governmental entity, and any other new taxes
on landlords in addition to taxes now in effect; (iv) supplies, equipment,
utilities and tools used in management, operation and maintenance of the Center;
(v) expenditures for capital improvements to the Center, the Improvements or the
buildings in the Center, amortized over a reasonable period determined in
accordance with generally accepted accounting principles applied on a consistent
basis, (aa) which reduce or will cause future reduction of other items of
Operating Expenses for which Tenant is otherwise required to contribute or (bb)
which are required by law, ordinance, regulation or order of any governmental
authority or (cc) of which Tenant has use or which benefit Tenant; and (vi) any
other costs (including, but not limited to, any parking or utilities fees or
surcharges) allocable to or paid by Landlord, as owner of the Center, the
buildings therein or the Improvements, pursuant to any applicable laws,
ordinances, regulations or orders of any governmental or quasi-governmental
authority or pursuant to the terms of any declarations of covenants, conditions
and restrictions now or hereafter affecting the Center or any other property
over which Tenant has non-exclusive use rights as contemplated in Section 1.1(b)
hereof. Operating Expenses shall not include any costs attributable to
Landlord's Work, nor any costs attributable to the initial construction of the
buildings in the Center or of Common Area improvements in the Center. The
distinction between items of ordinary operating maintenance and repair and items
of a capital nature shall be made in accordance with generally accepted
accounting principles applied on a consistent basis or in accordance with tax
accounting principles, as determined in good faith by Landlord's accountants.

                  (b) Notwithstanding anything to the contrary contained in this
Lease, the following shall not be included within Operating Expenses:

                      (i)   Costs of maintenance or repair of the roof membrane
for any building, except during periods (if any) in which costs of maintenance
or repair of the roof membrane for the buildings in which the Premises are
located are likewise included as an Operating Expense (rather than being
incurred directly by Tenant or passed through directly to Tenant);

                      (ii)  Leasing commissions, attorneys' fees, costs,
disbursements, and other expenses incurred in connection with negotiations or
disputes with tenants, or in connection with leasing, renovating or improving
space for tenants or other occupants or prospective tenants or other occupants
of the Center or of any other property owned by Landlord;

                      (iii) The cost of any service sold to any tenant
(including Tenant) or other occupant for which Landlord is entitled to be
reimbursed as an additional charge or rental over and above the basic rent and
operating expenses payable under the lease with that tenant;

                      (iv)  Any depreciation on the buildings in which the
Premises are located or on any other improvements in the Center or on any other
property owned by Landlord;

                                     - 10 -

<PAGE>

               (v)     Expenses in connection with services or other benefits of
a type that are not offered or made available to Tenant but that are provided to
another tenant of the Center or of any other property owned by Landlord;

               (vi)    Costs incurred due to Landlord's violation of any terms
or conditions of this Lease or of any other lease relating to the buildings in
which the Premises are located or to any other portion of the Center or of any
other property owned by Landlord;

               (vii)   Overhead profit increments paid to any subsidiary or
affiliate of Landlord for management or other services on or to the Center or
any portion thereof or any other property owned by Landlord, or for supplies or
other materials to the extent that the cost of the services, supplies or
materials exceeds the cost that would have been paid had the services, supplies
or materials been provided by unaffiliated parties on a competitive basis;

               (viii)  All interest, loan fees and other carrying costs related
to any mortgage or deed of trust or related to any capital item, and all rental
and other amounts payable under any ground or underlying lease, or under any
lease for any equipment ordinarily considered to be of a capital nature (except
(A) janitorial equipment which is not affixed to the applicable buildings and/or
(B) equipment the cost of which, if purchased, would be considered an
amortizable Operating Expense under the provisions of this Section 7.2,
notwithstanding the capital nature of such equipment);

               (ix)    Any compensation paid to clerks, attendants or other
persons in commercial concessions operated by Landlord;

               (x)     Advertising and promotional expenditures;

               (xi)    Costs of repairs and other work occasioned by fire,
windstorm or other casualty of an insurable nature, except to the extent of any
applicable deductible amounts under insurance actually carried by Landlord;

               (xii)   Any costs, fines or penalties incurred due to violations
by Landlord of any governmental rule or authority or of this Lease or any other
lease of any portion of the Center or any other property owned by Landlord, or
due to Landlord's negligence or willful misconduct;

               (xiii)  Management fees allocable to the Phase I Property to the
extent they exceed the following percentages of the gross income (rent and
Operating Expenses) received by Landlord with respect to the Phase I Property
during the applicable period: (A) from the Commencement Date through December
31, 2004, two and one half percent (2.5%); and (B) from January 1, 2005 through
the remaining term of this Lease (including any extension term(s)), one and one
half percent (1.5%);

               (xiv)   Costs for sculpture, paintings or other objects of art,
and for any insurance thereon or extraordinary security in connection therewith;

               (xv)    Wages, salaries or other compensation paid to any
executive employees above the grade of building manager;

               (xvi)   The cost of correcting any building code or other
violations which were violations prior to the Commencement Date;

               (xvii)  The cost of containing, removing or otherwise remediating
any contamination of the Center (including the underlying land and groundwater)
by any toxic or hazardous materials (including, without limitation, asbestos and
PCBs); and

               (xviii) During any period when the Center is owned by a person or
entity which is not a person or entity controlling, controlled by or under
common control with either Landlord or Slough Estates USA Inc., earthquake
and/or environmental insurance premiums in excess of rates that are commercially
reasonable under then existing market conditions.

                                      -11-

<PAGE>

     7.3  Determination Of Operating Expenses. Tenant is already paying
          -----------------------------------
estimated Operating Expenses, pursuant to the Existing Lease, for calendar year
2001 based on estimates previously furnished by Landlord to Tenant. During the
last month of each calendar year of the term of this Lease ("Lease Year"), or as
                                                             ----------
soon thereafter as practical, Landlord shall provide Tenant notice of Landlord's
estimate of the Operating Expenses for the ensuing Lease Year or applicable
portion thereof. On or before the first day of each month during each Lease Year
or applicable portion thereof, beginning on the Commencement Date, Tenant shall
pay to Landlord Tenant's Operating Cost Share of the portion of such estimated
Operating Expenses allocable (on a prorata basis) to such month; provided,
                                                                 --------
however, that if such notice is not given in the last month of a Lease Year,
Tenant shall continue to pay on the basis of the prior year's estimate, if any,
until the month after such notice is given. If at any time or times it appears
to Landlord that the actual Operating Expenses will vary from Landlord's
estimate by more than five percent (5%), Landlord may, by notice to Tenant,
revise its estimate for such year and subsequent payments by Tenant for such
year shall be based upon such revised estimate.

     7.4  Final Accounting For Lease Year.
          -------------------------------

          (a)  Within ninety (90) days after the close of each Lease Year, or as
soon after such 90-day period as practicable, Landlord shall deliver to Tenant a
statement of Tenant's Operating Cost Share of the Operating Expenses for such
Lease Year prepared by Landlord from Landlord's books and records, which
statement shall be final and binding on Landlord and Tenant (except as provided
in Section 7.4(b)). If on the basis of such statement Tenant owes an amount that
is more or less than the estimated payments for such Lease Year previously made
by Tenant, Tenant or Landlord, as the case may be, shall pay the deficiency to
the other party within thirty (30) days after delivery of the statement. Failure
or inability of Landlord to deliver the annual statement within such ninety (90)
day period shall not impair or constitute a waiver of Tenant's obligation to pay
Operating Expenses, or cause Landlord to incur any liability for damages.

          (b) At any time within three (3) months after receipt of Landlord's
annual statement of Operating Expenses as contemplated in Section 7.4(a), Tenant
shall be entitled, upon reasonable written notice to Landlord and during normal
business hours at Landlord's office or such other places as Landlord shall
designate, to inspect and examine those books and records of Landlord relating
to the determination of Operating Expenses for the immediately preceding Lease
Year covered by such annual statement or, if Tenant so elects by written notice
to Landlord, to request an independent audit of such books and records. The
independent audit of the books and records shall be conducted by a certified
public accountant acceptable to both Landlord and Tenant or, if the parties are
unable to agree, by a certified public accountant appointed by the Presiding
Judge of the San Mateo County Superior Court upon the application of either
Landlord or Tenant (with notice to the other party). In either event, such
certified public accountant shall be one who is not then employed in any
capacity by Landlord or Tenant or by any of their respective affiliates. The
audit shall be limited to the determination of the amount of Operating Expenses
for the subject Lease Year, and shall be based on generally accepted accounting
principles and tax accounting principles, consistently applied. If it is
determined, by mutual agreement of Landlord and Tenant or by independent audit,
that the amount of Operating Expenses billed to or paid by Tenant for the
applicable Lease Year was incorrect, then the appropriate party shall pay to the
other party the deficiency or overpayment, as applicable, within thirty (30)
days after the final determination of such deficiency or overpayment. All costs
and expenses of the audit shall be paid by Tenant unless the audit shows that
Landlord overstated Operating Expenses for the subject Lease Year by more than
five percent (5%), in which case Landlord shall pay all costs and expenses of
the audit. Each party agrees to maintain the confidentiality of the findings of
any audit in accordance with the provisions of this Section 7.4.


     7.5  Proration. If the Commencement Date falls on a day other than the
          ---------
first day of a Lease Year or if this Lease terminates on a day other than the
last day of a Lease Year, then the amount of Operating Expenses payable by
Tenant with respect to such first or last partial Lease Year shall be prorated
on the basis which the number of days during such Lease Year in which this Lease
is in effect bears to 365. The termination of this Lease shall not affect the
obligations of Landlord and Tenant pursuant to Section 7.4 to be performed after
such termination.

                                      -12-

<PAGE>

                                  8. UTILITIES
                                     ---------

     8.1  Payment. Commencing with the Commencement Date and thereafter
          -------
throughout the term of this Lease, Tenant shall pay, before delinquency, all
charges for water, gas, heat, light, electricity, power, sewer, telephone, alarm
system, janitorial and other services or utilities supplied to or consumed in or
with respect to the Premises (other than any separately metered costs for water,
electricity or other services or utilities furnished with respect to the Common
Areas, which costs, to the extent paid by Landlord, shall constitute Operating
Expenses under Section 7.2 hereof), including any taxes on such services and
utilities. It is the intention of the parties that all such services shall be
separately metered to the Premises. In the event that any of such services
supplied to the Premises are not separately metered, then the amount thereof
shall be an item of Operating Expenses and shall be paid as provided in Article
7.

     8.2  Interruption. There shall be no abatement of rent or other charges
          ------------
required to be paid hereunder and Landlord shall not be liable in damages or
otherwise for interruption or failure of any service or utility furnished to or
used with respect to the Premises or the Center because of accident, making of
repairs, alterations or improvements, severe weather, difficulty or inability in
obtaining services or supplies, labor difficulties or any other cause.
Notwithstanding the foregoing provisions of this Section 8.2, however, in the
event of any interruption or failure of any service or utility to the Premises
that (i) is caused in whole or in material part by the active negligence or
willful misconduct of Landlord or its agents or employees and (ii) continues for
more than three (3) business days and (iii) materially impairs Tenant's ability
to use the Premises for their intended purposes hereunder, then following such
three (3) business day period, Tenant's obligations for payment of rent and
other charges under this Lease shall be abated in proportion to the degree of
impairment of Tenant's use of the Premises or applicable portion thereof, and
such abatement shall continue until Tenant's use of the Premises is no longer
materially impaired thereby.

                              9. ALTERATIONS; SIGNS
                                 ------------------

     9.1  Right To Make Alterations. Tenant shall make no alterations, additions
          -------------------------
or improvements to the Premises, the buildings in which the Premises are located
or the Center, other than (i) alterations, additions or improvements to Tenant's
Property (as defined in, and subject to the provisions of, Section 9.2 below),
and/or (ii) other interior non-structural alterations costing less than Fifty
Thousand Dollars ($50,000.00) in the aggregate during any twelve (12) month
period, without the prior written consent of Landlord, which consent shall not
be unreasonably withheld or delayed. All such alterations, additions and
improvements shall be completed with due diligence in a first-class workmanlike
manner, in compliance with plans and specifications approved in writing by
Landlord and in compliance with all applicable laws, ordinances, rules and
regulations, and to the extent Landlord's consent is not otherwise required
hereunder for such alterations, additions or improvements, Tenant shall give
prompt written notice thereof to Landlord. Tenant shall cause any contractors
engaged by Tenant for work in the Premises or on the Property to maintain public
liability and property damage insurance, and other customary insurance, with
such terms and in such amounts as Landlord may reasonably require, naming as
additional insureds Landlord and any of its partners, shareholders, property
managers and lenders designated by Landlord for this purpose, and shall furnish
Landlord with certificates of insurance or other evidence that such coverage is
in effect. Notwithstanding any other provisions of this Section 9.1, under no
circumstances shall Tenant make any structural alterations or improvements, or
any substantial changes to the roof or substantial equipment installations on
the roof, or any substantial changes or alterations to the building systems,
without Landlord's prior written consent (which consent shall not be
unreasonably withheld or delayed). If Tenant so requests in seeking Landlord's
consent to any alterations, additions or improvements, Landlord shall specify in
granting such consent whether Landlord intends to require that Tenant remove
such alterations, additions or improvements (or any specified portions thereof)
upon expiration or termination of this Lease. Landlord shall receive no fee for
supervision, profit, overhead or general conditions in connection with any
alterations, additions or improvements constructed or installed by Tenant under
this Lease.

                                      -13-

<PAGE>

          9.2  Title To Alterations. All alterations, additions and improvements
               --------------------
existing in the Premises on the Commencement Date or thereafter installed in, on
or about the Premises or the Center (except as otherwise expressly provided in
this Section 9.2) shall become part of the Center and the real property on which
it is located and shall become the property of Landlord, unless Landlord elects,
in the case of any alterations, additions or improvements installed after the
Commencement Date, to require Tenant to remove the same upon the termination of
this Lease (subject to the provisions of Section 9.2(c) below).

               (a)  Landlord's Property. The parties specifically agree that the
                    -------------------
alterations, additions and improvements which are or shall be part of the Center
and are or shall be the property of Landlord shall include (but not be limited
to) (i) built-in coldrooms, (ii) air lines, plumbing, electrical wiring and
other similar systems associated with any of Tenant's (A) built-in coldrooms,
(B) laboratory casework, (C) vacuum pumps, (D) compressors, and/or (E) water
purification and deionized water systems, (iii) plumbing, electrical wiring and
other similar systems associated with Tenant's animal water system and located
within walls, ceilings or floors, and (iv) wiring and jacks associated with
Tenant's telephone systems, computer network systems and security systems, but
shall not include Tenant's Property (as defined in Section 9.2(b) below) except
to the extent purchased by Landlord pursuant to Section 9.2(g), if applicable.

               (b)  Tenant's Property. With respect to any portions of the
                    -----------------
Premises as they exist from time to time that are located on the Phase I
Property, the term "Tenant's Property" shall mean all of the following items:
                    -----------------
(i) movable personal property, office furniture and/or modular office furniture
systems, movable equipment and trade fixtures; (ii) lab benches, built-in fume
hoods, plumbing fixtures and other laboratory casework (collectively, the
"Option Property"), but excluding air lines, plumbing, electrical wiring and
 ---------------
other similar systems associated with any of such laboratory casework and/or
built-in fume hoods; (iii) compressors, excluding air lines, plumbing,
electrical wiring and other similar systems associated with any of such
compressors; (iv) vacuum pumps, excluding plumbing, electrical wiring and other
similar systems associated with any of such vacuum pumps; (v) water purification
systems and/or deionized water systems, excluding plumbing, electrical wiring
and other similar systems associated with any of such water purification or
deionized water systems; (vi) auxiliary generators and transfer switches; (vii)
telephone systems and desk sets, excluding wiring and jacks; (viii) computer
network systems, excluding wiring and jacks; (ix) security system, excluding
wiring and jacks; (x) cage and rack washers; (xi) glassware washers; (xii)
autoclaves; (xiii) Edstram animal water system, excluding plumbing, electrical
wiring and other similar systems associated with such animal water system; (xiv)
freestanding coldrooms; and (xv) movable fume hoods.

               (c)  Removal of Tenant's Property at End of Term. Notwithstanding
                    -------------------------------------------
anything to the contrary contained in the foregoing provisions, the parties
specifically agree that the Option Property shall not become the property of
                                                  ---
Landlord unless, and then only to the extent that, Landlord exercises its
purchase option in accordance with Section 9.2(g) below. Tenant shall have the
right to remove at the termination or expiration of this Lease, subject to any
specific limitations set forth in this Article 9, any or all of Tenant's
Property. Tenant shall promptly repair any damage caused by its removal of any
of Tenant's Property during or at the expiration of the term of this Lease.
Notwithstanding any other provisions of this Article 9, however, if Tenant
requests Landlord's written consent to any alterations, additions or
improvements under Section 9.1 hereof after the Commencement Date and, in
requesting such consent, asks that Landlord specify whether Landlord will
require removal of such alterations, additions or improvements upon termination
or expiration of this Lease, then Landlord shall not be entitled to require such
removal unless Landlord specified its intention to do so at the time of granting
of Landlord's consent to the requested alterations, additions or improvements.

               (d)  Items Located in Premises Outside the Phase I Property. With
                    ------------------------------------------------------
respect to any portions of the Premises as they exist from time to time that are
located outside the Phase I Property (such as, for example, the 280 East Grand
Building if hereafter added to the Premises pursuant to Section 1.3 hereof), the
term "Tenant's Property" shall not include any lab benches, built-in fume hoods,
      -----------------
plumbing fixtures and other laboratory casework (which items shall instead be
deemed upon installation, or upon commencement of Tenant's leasing of such
additional

                                      -14-

<PAGE>

Premises to the extent such items were installed by Landlord or a predecessor
tenant prior to such commencement, to be Landlord's property and to be part of
the Center and of the real property on which it is located) and shall include
items described in any of the other clauses of Section 9.2(b) only to the extent
such items are installed by Tenant in such additional Premises at Tenant's sole
expense.

          (e)  Tenant's Rights to Modify, Etc. and Remove Tenant's Property. As
               ------------------------------------------------------------
provided in Sections 9.1 and 9.2, but subject to any limitations expressly set
forth in this Article 9, Tenant shall generally have the right throughout the
term of this Lease to install, alter, modify, improve, replace and remove
Tenant's Property without Landlord's consent and shall generally have the right
at the termination or expiration of this Lease to remove Tenant's Property,
provided that Tenant shall, at all times prior to the lapse (if any),
--------
unexercised, of Landlord's purchase option under Section 9.2(g) with respect to
the Option Property, maintain in the Premises a quality and quantity of
laboratory casework, lab benches and built-in fume hoods that is not materially
less than the quality and quantity of such items located in the Premises on the
Commencement Date (subject to the effects of ordinary wear and tear and to the
effects of damage, destruction or other casualty, the latter of which shall be
governed by the provisions of Article 15 hereof).

          (f)  Tenant's Right to Encumber Tenant's Property. Tenant shall also
               --------------------------------------------
have the right, notwithstanding any other provisions of this Article 9
(including, but not limited to, Landlord's purchase option for the Option
Property pursuant to Section 9.2(g) below), to use Tenant's Property as security
for third-party financing during the term of this Lease, and Landlord agrees to
cooperate in all reasonable respects with any such third-party financing sought
by Tenant against the security of Tenant's Property, including recognition by
Landlord of the lender's right, subject to reasonable conditions, to foreclose
upon and remove Tenant's Property upon a default by Tenant under such financing.

          (g)  Landlord's Purchase Option. Landlord shall have the option,
               --------------------------
exercisable by written notice to Tenant no less than ninety (90) days before the
expiration of the term of this Lease (or concurrently with any earlier
termination of this Lease by Landlord pursuant to a default by Tenant, if
applicable), to purchase from Tenant (and thereby require Tenant to leave behind
in the Premises upon such expiration or termination, notwithstanding any other
provisions of this Section 9.2) all then existing Option Property for a purchase
price of Six Hundred Fifty Thousand Dollars ($650,000.00) payable to Tenant in
cash concurrently with and in exchange for Tenant's delivery to Landlord of a
bill of sale, in form and substance reasonably satisfactory to Landlord,
conveying to Landlord all such Option Property in its then existing condition,
as is, but free and clear of any liens or encumbrances created by or through
Tenant. If Landlord does not timely exercise such purchase option, then Tenant
shall have the same right to remove the Option Property from the Premises prior
to or upon termination or expiration of this Lease as Tenant has with respect to
the rest of Tenant's Property, subject to any express conditions or restrictions
set forth in this Article 9 with respect to such removal.

          9.3  Tenant Fixtures. Subject to Sections 9.2 and 9.5, Tenant may
               ---------------
install, remove and reinstall Tenant's Property and other trade fixtures without
Landlord's prior written consent, except that installation and removal of any
fixtures which affect the exterior or structural portions of the buildings in
which the Premises are located or the building systems therein shall require
Landlord's written approval, which approval shall not be unreasonably withheld
or delayed. Subject to the provisions of Section 9.5, the foregoing shall apply
to Tenant's signs, logos and insignia, all of which Tenant shall have the right
to place and remove and replace (a) only with Landlord's prior written consent
as to location, size and composition, which consent shall not be unreasonably
withheld or delayed, and (b) only in compliance with all restrictions and
requirements of applicable law and of any covenants, conditions and restrictions
or other written agreements now or hereafter applicable to the Center. Tenant
shall immediately repair any damage caused by installation and removal of
fixtures under this Section 9.3.

          9.4  No Liens. Tenant shall at all times keep the Premises, the
               --------
buildings in which the Premises are located and the Center free from all liens
and claims of any contractors, subcontractors, materialmen, suppliers or any
other parties employed either directly or indirectly by Tenant in construction
work on the Premises or in the Center. Notwithstanding the preceding

                                      -15-

<PAGE>

sentence, Tenant may contest any claim of lien, but only if, prior to such
contest, Tenant either (i) posts security in the amount of the claim, plus
estimated costs and interest, or (ii) records a bond of a responsible corporate
surety in such amount as may be required to release the lien from the applicable
buildings or improvements and the Center. Tenant shall indemnify, defend and
hold Landlord harmless against any and all liability, loss, damage, cost and
other expenses, including, without limitation, reasonable attorneys' fees,
arising out of claims of any lien for work performed or materials or supplies
furnished at the request of Tenant or persons claiming under Tenant.

     9.5  Signs. Without limiting the generality of the provisions of Section
          -----
9.3 hereof, Tenant shall have the right to display its corporate name and logo
on the buildings in which the Premises are located and in front of the principal
entrances to the Premises, subject to Landlord's prior approval as to location,
size, design and composition (which approval shall not be unreasonably withheld
or delayed), subject to the established sign criteria for the Britannia Pointe
Grand Business Park and subject to all restrictions and requirements of
applicable law and of any covenants, conditions and restrictions or other
written agreements now or hereafter applicable to the Center. Landlord hereby
expressly confirms that it has already approved all of Tenant's signage existing
on and about the Premises as of the Commencement Date, and that in the event a
new lobby is constructed as contemplated in Section 2.3(c) above, Landlord will
approve, at Tenant's request, any new exterior signage that is substantially
similar to or reasonably comparable to the signage then maintained, with
Landlord's consent, by other major tenants in the Center.

                           10. MAINTENANCE AND REPAIRS
                               -----------------------

     10.1 Landlord's Work.
          ---------------

          (a) Landlord shall repair and maintain or cause to be repaired and
maintained the driveways, parking areas, landscaping and other Common Areas of
the Center and the structural roof, roof membrane, exterior walls, foundation
and other structural portions of the buildings in which the Premises are
located. The cost of all work performed by Landlord under this Section 10.1
shall be an Operating Expense hereunder, except to the extent such work (i) is
required due to the negligence of Landlord, (ii) is a capital expenditure not
includible as an Operating Expense under Section 7.2 hereof, (iii) is required
due to the negligence or willful misconduct of Tenant or its agents, employees
or invitees (in which event Tenant shall bear the full cost of such work
pursuant to the indemnification provided in Section 12.6 hereof, subject to the
release set forth in Section 12.4 hereof), or (iv) involves repair or
maintenance of the roof membrane on any of the applicable buildings (in which
event there shall be charged back directly to Tenant, as additional rent and not
as an Operating Expense, but subject to the same limitations set forth for
Operating Expenses in Section 7.2 for purposes of determining what are capital
items and what portion, if any, of capital items can properly be allocated to a
particular year or other applicable period, a prorata share of the cost of such
repair or maintenance calculated on the basis of the percentage of the
applicable building that is occupied by Tenant). Tenant knowingly and
voluntarily waives the right to make repairs at Landlord's expense, except to
the extent permitted by Section 10.1(b) below, or to offset the cost thereof
against rent, under any law, statute, regulation or ordinance now or hereafter
in effect.

          (b) If Landlord fails to perform any repairs or maintenance required
to be performed by Landlord on the buildings in which the Premises are located
under Section 10.1(a) and such failure continues for thirty (30) days or more
after Tenant gives Landlord written notice of such failure (or, if such repairs
or maintenance cannot reasonably be performed within such 30-day period, then if
Landlord fails to commence performance within such 30-day period and thereafter
to pursue such performance diligently to completion), then Tenant shall have the
right to perform such repairs or maintenance and Landlord shall reimburse Tenant
for the reasonable cost thereof within fifteen (15) days after written notice
from Tenant of the completion and cost of such work, accompanied by copies of
invoices or other reasonable supporting documentation. Under no circumstances,
however, shall Tenant have any right to offset the cost of any such work against
rent or other charges falling due from time to time under this Lease.

                                     - 16 -

<PAGE>

         10.2     Tenant's Obligation For Maintenance.
                  -----------------------------------

                  (a) Good Order, Condition And Repair. Except as provided in
                      --------------------------------
Section 10.1 hereof, and except for damage caused by Landlord or its agents,
employees or contractors (which shall be the sole responsibility of Landlord,
subject to the release set forth in Section 12.4 hereof) or by an event of
casualty or condemnation (which shall be governed by Article 15 hereof), Tenant
at its sole cost and expense shall keep and maintain in good and sanitary order,
condition and repair the Premises and every part thereof, wherever located,
including but not limited to the signs, interior, ceiling, electrical system,
plumbing system, telephone and communications systems of the buildings in which
the Premises are located, the HVAC equipment and related mechanical systems
serving the Premises (for which equipment and systems Tenant shall enter into a
service contract with a person or entity designated or approved by Landlord),
all doors, door checks, windows, plate glass, door fronts, exposed plumbing and
sewage and other utility facilities, fixtures, lighting, wall surfaces, floor
surfaces and ceiling surfaces of the Premises and all other interior repairs,
foreseen and unforeseen, with respect to the Premises, as required.

                  (b) Landlord's Remedy. If Tenant, after notice from Landlord,
                      -----------------
fails to make or perform promptly any repairs or maintenance which are the
obligation of Tenant hereunder, Landlord shall have the right, but shall not be
required, to enter the Premises and make the repairs or perform the maintenance
necessary to restore the Premises to good and sanitary order, condition and
repair. Immediately on demand from Landlord, the cost of such repairs shall be
due and payable by Tenant to Landlord.

                  (c) Condition Upon Surrender. At the expiration or sooner
                      ------------------------
termination of this Lease, Tenant shall surrender the Premises and the
Improvements, including any additions, alterations and improvements thereto,
broom clean, in good and sanitary order, condition and repair, ordinary wear and
tear excepted, first, however, removing all goods and effects of Tenant and all
and fixtures and items required to be removed or specified to be removed at
Landlord's election pursuant to this Lease (including, but not limited to, any
such removal required as a result of an election duly made by Landlord to
require such removal as contemplated in Section 9.2), and repairing any damage
caused by such removal. Tenant shall not have the right to remove fixtures or
equipment if Tenant is in default hereunder, beyond any applicable cure period,
unless Landlord specifically waives this provision in writing. Tenant expressly
waives any and all interest in any personal property and trade fixtures not
removed from the Premises by Tenant at the expiration or termination of this
Lease, agrees that any such personal property and trade fixtures may, at
Landlord's election, be deemed to have been abandoned by Tenant, and authorizes
Landlord (at its election and without prejudice to any other remedies under this
Lease or under applicable law) to remove and either retain, store or dispose of
such property at Tenant's cost and expense, and Tenant waives all claims against
Landlord for any damages resulting from any such removal, storage, retention or
disposal.

                               11. USE OF PREMISES
                                   ---------------

         11.1     Permitted Use. Subject to Sections 11.3, 11.4 and 11.6 hereof,
                  -------------
Tenant shall use the Premises solely for a laboratory research and development
facility, including (but not limited to) wet chemistry and biology labs, clean
rooms, light manufacturing, storage and use of toxic and radioactive materials
(subject to the provisions of Section 11.6 hereof), storage and use of
laboratory animals, administrative offices, and other lawful purposes reasonably
related to or incidental to such specified uses (subject in each case to receipt
of all necessary approvals from the City of South San Francisco and other
governmental agencies having jurisdiction over the Premises), and for no other
purpose.

         11.2     [Omitted.]

         11.3     No Nuisance. Tenant shall not use the Premises or the Center
                  -----------
for or carry on or permit within the Center or any part thereof any offensive,
noisy or dangerous trade, business, manufacture, occupation, odor or fumes, or
any nuisance or anything against public policy, nor interfere with the rights or
business of Landlord in the Premises or the Center, nor commit or allow to be
committed any waste in, on or about the Center. Tenant shall not do or permit

                                     - 17 -

<PAGE>

anything to be done in or about the Center, nor bring nor keep anything therein,
which will in any way cause the Center to be uninsurable with respect to the
insurance required by this Lease or with respect to standard fire and extended
coverage insurance with vandalism, malicious mischief and riot endorsements.

         11.4 Compliance With Laws. Tenant shall not use the Premises or the
              --------------------
Center or permit the Premises or the Center to be used in whole or in part for
any purpose or use that is in violation of any applicable laws, ordinances,
regulations or rules of any governmental agency or public authority. Tenant
shall keep the Premises and Improvements therein equipped with all safety
appliances required by law, ordinance or insurance on the Center, or any order
or regulation of any public authority, because of Tenant's particular use of the
Premises and the Center. Tenant shall procure all licenses and permits required
for Tenant's use of the Premises and the Center. Tenant shall use the Premises
and the Center in strict accordance with all applicable ordinances, rules, laws
and regulations and shall comply with all requirements of all governmental
authorities now in force or which may hereafter be in force pertaining to the
use of the Premises and the Center by Tenant, including, without limitation,
regulations applicable to noise, water, soil and air pollution, and making such
nonstructural alterations and additions thereto in the Premises or the Center as
may be required from time to time by such laws, ordinances, rules, regulations
and requirements of governmental authorities or insurers of the Center
(collectively, "Requirements") because of Tenant's construction of improvements
                ------------
in or other particular use of the Premises or the Center. Any structural
alterations or additions required from time to time by applicable Requirements
because of Tenant's construction of improvements in the Premises or other
particular use of the Premises or the Center shall, at Landlord's election,
either (i) be made by Tenant, at Tenant's sole cost and expense, in accordance
with the procedures and standards set forth in Section 9.1 for alterations by
Tenant, or (ii) be made by Landlord at Tenant's sole cost and expense, in which
event Tenant shall pay to Landlord as additional rent, within ten (10) days
after demand by Landlord, an amount equal to all reasonable costs incurred by
Landlord in connection with such alterations or additions. The judgment of any
court, or the admission by Tenant in any proceeding against Tenant, that Tenant
has violated any law, statute, ordinance or governmental rule, regulation or
requirement shall be conclusive of such violation as between Landlord and
Tenant.

         11.5 Liquidation Sales. Tenant shall not conduct or permit to be
              -----------------
conducted any auction, bankruptcy sale, liquidation sale, or going out of
business sale, in, upon or about the Premises or the Center, whether said
auction or sale be voluntary, involuntary or pursuant to any assignment for the
benefit of creditors, or pursuant to any bankruptcy or other insolvency
proceeding.

         11.6 Environmental Matters.
              ---------------------

              (a) For purposes of this Section, "hazardous substance" shall mean
                                                 -------------------
the substances included within the definitions of the term "hazardous substance"
under (i) the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, 42 U.S.C. (S)(S)(S)(S) 9601 et seq., and the
                                                     -- ---
regulations promulgated thereunder, as amended, (ii) the California
Carpenter-Presley-Tanner Hazardous Substance Account Act, California Health &
Safety Code (S)(S)(S)(S) 25300 et seq., and regulations promulgated
                               -- ---
thereunder, as amended, (iii) the Hazardous Materials Release Response Plans and
Inventory Act, California Heath & Safety Code (S)(S) 25500 et seq., and
                                                           -- ---
regulations promulgated thereunder, as amended, and (iv) petroleum; "hazardous
waste" shall mean (i) any waste listed as or meeting the identified
characteristics of a "hazardous waste" under the Resource Conservation and
                      ---------------
Recovery Act of 1976, 42 U.S.C. (S)(S) 6901 et seq., and regulations
                                            -- ---
promulgated pursuant thereto, as amended (collectively, "RCRA"), (ii) any waste
                                                         ----
meeting the identified characteristics of "hazardous waste," "extremely
hazardous waste" or "restricted hazardous waste" under the California Hazardous
Waste Control Law, California Health & Safety Code (S)(S) 25100 et seq.,
                                                                -- ---
and regulations promulgated pursuant thereto, as amended (collectively, the
"CHWCL"), and/or (iii) any waste meeting the identified characteristics of
 -----
"medical waste" under California Health & Safety Code (S)(S) 25015-25027.8, and
regulations promulgated thereunder, as amended; and "hazardous waste facility"
                                                     ------------------------
shall mean a hazardous waste facility as defined under the CHWCL.

                                     - 18 -

<PAGE>

                 (b) Without limiting the generality of the obligations set
forth in Section 11.4 of this Lease:

                     (i)   Tenant shall not cause or permit any hazardous
substance or hazardous waste to be brought upon, kept, stored or used in or
about the Premises or the Center without the prior written consent of Landlord,
which consent shall not be unreasonably withheld, except that Tenant, in
connection with its permitted use of the Premises as provided in Section 11.1,
may keep, store and use materials that constitute hazardous substances which are
customary for such permitted use, provided such hazardous substances are kept,
stored and used in quantities which are customary for such permitted use and are
kept, stored and used in full compliance with clauses (ii) and (iii) immediately
below.

                     (ii)  Tenant shall comply with all applicable laws, rules,
regulations, orders, permits, licenses and operating plans of any governmental
authority with respect to the receipt, use, handling, generation,
transportation, storage, treatment and/or disposal of hazardous substances or
wastes by Tenant or its agents or employees, and Tenant will provide Landlord
with copies of all permits, licenses, registrations and other similar documents
that authorize Tenant to conduct any such activities in connection with its
authorized use of the Premises and the Center from time to time.

                     (iii) Tenant shall not (A) operate on or about the Premises
or the Center any facility required to be permitted or licensed as a hazardous
waste facility or for which interim status as such is required, nor (B) store
any hazardous wastes on or about the Premises or the Center for ninety (90) days
or more, nor (C) conduct any other activities on or about the Premises or the
Center that could result in the Premises or the Center being deemed to be a
"hazardous waste facility" (including, but not limited to, any storage or
treatment of hazardous substances or hazardous wastes which could have such a
result).

                     (iv)  Tenant shall comply with all applicable laws, rules,
regulations, orders and permits relating to underground storage tanks installed
by Tenant or its agents or employees or at the request of Tenant (including any
installation, monitoring, maintenance, closure and/or removal of such tanks) as
such tanks are defined in California Health & Safety Code (S) 25281(x),
including, without limitation, complying with California Health & Safety Code
(S)(S)(S)(S) 25280-25299.7 and the regulations promulgated thereunder, as
amended. Tenant shall furnish to Landlord copies of all registrations and
permits issued to or held by Tenant from time to time for any and all
underground storage tanks located on or under the Premises or the Center.

                     (v)   If applicable, Tenant shall provide Landlord in
writing the following information and/or documentation within thirty (30) days
after the Commencement Date, and shall update such information at least
annually, on or before each anniversary of the Commencement Date, to reflect any
change in or addition to the required information and/or documentation
(provided, however, that in the case of the materials described in subparagraphs
 --------
(B), (C) and (E) below, Tenant shall not be required to deliver copies of such
materials to Landlord but shall maintain copies of such materials to such extent
and for such periods as may be required by applicable law and shall permit
Landlord or its representatives to inspect and copy such materials during normal
business hours at any time and from time to time upon reasonable notice to
Tenant):

                           (A) A list of all hazardous substances and/or wastes
that Tenant receives, uses, handles, generates, transports, stores, treats or
disposes of from time to time in connection with its operations on the Premises
and in the Center.

                           (B) All Material Safety Data Sheets ("MSDS's"), if
                                                                 ------
any, required to be completed with respect to operations of Tenant at the
Premises and in the Center from time to time in accordance with Title 26,
California Code of Regulations (S). 8-5194 or 42 U.S.C. (S) 11021, or any
amendments thereto, and any Hazardous Materials Inventory Sheets that detail the
MSDS's.

                                     - 19 -

<PAGE>

         (C) All hazardous waste manifests (as defined in Title 26, California
Code of Regulations (S) 22-66481), if any, that Tenant is required to complete
from time to time in connection with its operations at the Premises and in the
Center.

         (D) A copy of any Hazardous Materials Management Plan required from

time to time with respect to Tenant's operations at the Premises and in the
Center, pursuant to California Health & Safety Codess (S)(S) 25500 et seq., and
                                                                   -- ---
any regulations promulgated thereunder, as amended.

         (E) Any Contingency Plans and Emergency Procedures required of Tenant
from time to time due to its operations in accordance with Title 26, California
Code of Regulations (S)(S) 22-67140 et seq., and any amendments thereto, and
                                    -- ---
any Training Programs and Records required under Title 26, California Code of
Regulations, (S) 22-67105, and any amendments thereto.

         (F) Copies of any biennial reports to be furnished to the California
Department of Health Services from time to time relating to hazardous substances
or wastes, pursuant to Title 26, California Code of Regulations, (S) 22-66493,
and any amendments thereto.

         (G) Copies of all industrial wastewater discharge permits issued to or
held by Tenant from time to time in connection with its operations on the
Premises and in the Center.

         (H) Copies of any other lists or inventories of hazardous substances
and/or wastes on or about the Premises and/or the Center that Tenant is
otherwise required to prepare and file from time to time with any governmental
or regulatory authority.

   (vi)  Tenant shall secure Landlord's prior written approval for any proposed
receipt, storage, possession, use, transfer or disposal of "radioactive
materials" or "radiation," as such materials are defined in Title 26, California
Code of Regulations (S) 17-30100, and/or any other materials possessing the
characteristics of the materials so defined, which approval Landlord may
withhold in its sole and absolute discretion; provided, that such approval shall
                                              --------
not be required for any radioactive materials for which Tenant has secured prior
written approval of the Nuclear Regulatory Commission and delivered to Landlord
a copy of such approval. Tenant, in connection with any such authorized receipt,
storage, possession, use, transfer or disposal of radioactive materials or
radiation, shall:

         (A) Comply with all federal, state and local laws, rules, regulations,
orders, licenses and permits issued to or applicable to Tenant with respect to
its business operations on the Premises and in the Center;

         (B) Maintain, to such extent and for such periods as may be required by
applicable law, and permit Landlord and its representatives to inspect during
normal business hours at any time and from time to time upon reasonable notice
to Tenant, a list of all radioactive materials or radiation received, stored,
possessed, used, transferred or disposed of by Tenant or in connection with the
operation of Tenant's business on the Premises and in the Center from time to
time, to the extent not already disclosed through delivery of a copy of a
Nuclear Regulatory Commission approval with respect thereto as contemplated
above; and

         (C) Maintain, to such extent and for such periods as may be required by
applicable law, and permit Landlord or its representatives to inspect during
normal business hours at any time and from time to time upon reasonable notice
to Tenant, all licenses, registration materials, inspection reports,
governmental orders and permits in connection with the receipt, storage,
possession, use, transfer or disposal of radioactive materials or radiation by
Tenant or in connection with the operation of Tenant's business on the Premises
and in the Center from time to time.

   (vii) Tenant shall comply with any and all applicable laws, rules,
regulations and orders of any governmental authority with respect to the release
into the environment of any hazardous wastes or substances or radiation or
radioactive materials by

                                     - 20 -

<PAGE>

Tenant or its agents or employees. Tenant shall give Landlord immediate verbal
notice of any unauthorized release of any such hazardous wastes or substances or
radiation or radioactive materials into the environment, and shall follow such
verbal notice with written notice to Landlord of such release within ten (10)
business days after the date Tenant became aware of such release.

                    (viii) Tenant shall indemnify, defend and hold Landlord
harmless from and against any and all claims, losses (including, but not limited
to, loss of rental income), damages, liabilities, costs, legal fees and expenses
of any sort arising out of or relating to (A) any failure by Tenant to comply
with any provisions of this paragraph 11.6(b), or (B) any receipt, use handling,
generation, transportation, storage, treatment, release and/or disposal of any
hazardous substance or waste or any radioactive material or radiation on or
about the Premises or the Center as a proximate result of Tenant's use of the
Premises or the Center or as a result of any intentional or negligent acts or
omissions of Tenant or of any agent, employee or invitee of Tenant.

                    (ix)   Tenant shall cooperate with Landlord in furnishing
Landlord with complete information regarding Tenant's receipt, handling, use,
storage, transportation, generation, treatment and/or disposal of any hazardous
substances or wastes or radiation or radioactive materials. Upon request, Tenant
shall grant Landlord reasonable access at reasonable times to the Premises to
inspect Tenant's receipt, handling, use, storage, transportation, generation,
treatment and/or disposal of hazardous substances or wastes or radiation or
radioactive materials, provided that Landlord uses reasonable efforts to avoid
any unreasonable interference with Tenant's business operations in exercising
such access and inspection rights, without thereby being deemed guilty of any
disturbance of Tenant's use or possession and without being liable to Tenant in
any manner.

                    (x)    Notwithstanding Landlord's rights of inspection and
review under this paragraph 11.6(b), Landlord shall have no obligation or duty
to so inspect or review, and no third party shall be entitled to rely on
Landlord to conduct any sort of inspection or review by reason of the provisions
of this paragraph 11.6(b).

                    (xi)   If Tenant receives, handles, uses, stores,
transports, generates, treats and/or disposes of any hazardous substances or
wastes or radiation or radioactive materials on or about the Premises or the
Center at any time during the term of this Lease, then within thirty (30) days
after the termination or expiration of this Lease, Tenant at its sole cost and
expense shall obtain and deliver to Landlord an environmental study, performed
by an expert reasonably satisfactory to Landlord, evaluating the presence or
absence of hazardous substances and wastes, radiation and radioactive materials
on and about the Premises and the Center. Such study shall be based on a
reasonable and prudent level of tests and investigations of the Premises and
surrounding areas (if appropriate), which tests shall be conducted no earlier
than the date of termination or expiration of this Lease. Liability for any
remedial actions required or recommended on the basis of such study shall be
allocated in accordance with Sections 11.4, 11.6, 12.6 and other applicable
provisions of this Lease.

               (c)  Landlord shall indemnify, defend and hold Tenant harmless
from and against any and all claims, losses, damages, liabilities, costs, legal
fees and expenses of any sort arising out of or relating to (i) the presence on
the Premises or in the Center of any hazardous substances or wastes or radiation
or radioactive materials as of the Commencement Date (other than as a result of
any intentional or negligent acts or omissions of Tenant or of any agent,
employee or invitee of Tenant, or as a result of or in connection with Tenant's
prior business operations on the Premises and in the Center), and/or (ii) any
unauthorized release into the environment (including, but not limited to, the
Premises and/or the Center) of any hazardous substances or wastes or radiation
or radioactive materials to the extent such release results from the negligence
of or willful misconduct or omission by Landlord or its agents or employees.

               (d)  The provisions of this Section 11.6 shall survive the
termination of this Lease.

                                      -21-

<PAGE>


                           12. INSURANCE AND INDEMNITY
                               -----------------------

         12.1     Insurance.
                  ---------

                  (a) Tenant shall procure and maintain in full force and effect
at all times during the term of this Lease, at Tenant's cost and expense,
commercial general liability insurance to protect against liability to the
public, or to any invitee of Tenant or Landlord, arising out of or related to
the use of or resulting from any accident occurring in, upon or about the
Premises, with limits of liability of not less than (i) Two Million Dollars
($2,000,000.00) for injury to or death of one person, (ii) Five Million Dollars
($5,000,000.00) for personal injury or death, per occurrence, and (iii) One
Million Dollars ($1,000,000.00) for property damage, or combined single limit of
liability of not less than Five Million Dollars ($5,000,000.00). Such insurance
shall name Landlord, its general partners, its Managing Agent and any lender
holding a deed of trust on the Center or any portion thereof from time to time
(as designated in writing by Landlord to Tenant from time to time) as additional
insureds thereunder. The amount of such insurance shall not be construed to
limit any liability or obligation of Tenant under this Lease. Tenant shall also
procure and maintain in full force and effect at all times during the term of
this Lease, at Tenant's cost and expense, products/completed operations coverage
in an amount of not less than Five Million Dollars ($5,000,000.00) and on other
terms customary in Tenant's industry for companies engaged in the marketing of
products on a scale comparable to that in which Tenant is engaged from time to
time.

                  (b) Landlord shall procure and maintain in full force and
effect at all times during the term of this Lease, at Landlord's cost and
expense (but reimbursable as an Operating Expense under Section 7.2 hereof),
commercial general liability insurance to protect against liability arising out
of or related to the use of or resulting from any accident occurring in, upon or
about the Center, with combined single limit of liability of not less than Five
Million Dollars ($5,000,000.00) per occurrence for bodily injury and property
damage.


                  (c) Landlord shall procure and maintain in full force and
effect at all times during the term of this Lease, at Landlord's cost and
expense (but reimbursable as an Operating Expense under Section 7.2 hereof),
policies of property insurance providing protection against "all risk of direct
physical loss" (as defined by and detailed in the Insurance Service Office's
Commercial Property Program "Cause of Loss--Special Form [CP1030]" or its
equivalent) for the shell of the buildings in which the Premises are located and
for the improvements in the Common Areas of the Center, on a full replacement
cost basis (with no co-insurance or, if coverage without co-insurance is not
reasonably available, then on an "agreed amount" basis). Such insurance shall
include earthquake and environmental coverage and shall have such commercially
reasonable deductibles and other terms as Landlord in its reasonable discretion
determines to be appropriate. Landlord shall have no obligation to carry
property damage insurance for Tenant's Property, for Tenant's personal property
or, except as expressly set forth in paragraph (d) below, for any alterations,
additions or improvements installed by Tenant or by any predecessor tenant in
the buildings in which the Premises are located or on or about the Center.

                  (d) Landlord shall procure and maintain in full force and
effect at all times during the term of this Lease, at Tenant's cost and expense
(chargeable, in Landlord's discretion, either as an Operating Expense allocable
100% to Tenant or as a direct pass-through to Tenant), policies of property
insurance providing protection against "all risk of direct physical loss" (as
defined by and detailed in the Insurance Service Office's Commercial Property
Program "Cause of Loss-Special Form [CP1030]" or its equivalent) for the tenant
improvements existing in the Premises on the Commencement Date (other than
Tenant's Property, which it shall be Tenant's responsibility to insure pursuant
to paragraph (e) below), on a full replacement cost basis (with no co-insurance
or, if coverage without co-insurance is not reasonably available, then on an
"agreed amount" basis). Such insurance may have such commercially reasonable
deductibles and other terms as Landlord in its reasonable discretion determines
to be appropriate, and shall name both Tenant and Landlord as insureds as their
interests may appear. The coverage required to be maintained under this
paragraph (d) may, in Landlord's discretion, be added to or combined with
Landlord's master policy carried under paragraph (c) above (but, if not actually
carried as part of Landlord's master policy under paragraph (c) above, shall not
carry a premium materially

                                      -22-

<PAGE>

higher than would apply if such coverage were being carried as part of
Landlord's master policy under paragraph (c) above), in which event Tenant shall
be named as an insured only with respect to the portion of the policy that
covers tenant improvements as described in this paragraph (d). Tenant shall
provide to Landlord from time to time, upon request by Landlord annually or at
other reasonable intervals, an updated schedule of values for such existing
tenant improvements, and Landlord shall have no obligation or liability with
respect to any underinsurance of tenant improvements that results from Tenant's
failure to keep Landlord informed from time to time, on a current basis, of the
insurable value of such tenant improvements.

               (e)  Tenant shall procure and maintain in full force and effect
at all times during the term of this Lease, at Tenant's cost and expense,
policies of property insurance providing protection against "all risk of direct
physical loss" (as defined by and detailed in the Insurance Service Office's
Commercial Property Program "Cause of Loss-Special Form [CP1030]" or its
equivalent) for Tenant's Property as it exists in the Premises on the
Commencement Date and for all other alterations, additions and improvements
installed by Tenant from time to time in or about the Premises after the
Commencement Date (except as Landlord and Tenant may otherwise mutually agree in
writing from time to time), on a full replacement cost basis (with no
co-insurance or, if coverage without co-insurance is not reasonably available,
then on an "agreed amount" basis). Such insurance may have such commercially
reasonable deductibles and other terms as Tenant in its reasonable discretion
determines to be appropriate, and shall name both Tenant and Landlord as
insureds as their interests may appear.

          12.2 Quality Of Policies And Certificates. All policies of insurance
               ------------------------------------
required hereunder shall be issued by responsible insurers and, in the case of
policies carried or required to be carried by Tenant, shall be written as
primary policies not contributing with and not in excess of any coverage that
Landlord may carry. Tenant shall deliver to Landlord copies of policies or
certificates of insurance showing that said policies are in effect. The coverage
provided by such policies shall include the clause or endorsement referred to in
Section 12.4. If Tenant fails to acquire, maintain or renew any insurance
required to be maintained by it under this Article 12 or to pay the premium
therefor, then Landlord, at its option and in addition to its other remedies,
but without obligation so to do, may procure such insurance, and any sums
expended by it to procure any such insurance on behalf of or in place of Tenant
shall be repaid upon demand, with interest as provided in Section 3.2 hereof.
Tenant shall obtain written undertakings from each insurer under policies
required to be maintained by it to notify all insureds thereunder at least
thirty (30) days prior to cancellation of coverage.

          12.3 Workers' Compensation. Tenant shall maintain in full force and
               ---------------------
effect during the term of this Lease workers' compensation insurance in at least
the minimum amounts required by law, covering all of Tenant's employees working
on the Premises or in the Center.

          12.4 Waiver Of Subrogation. To the extent permitted by law and without
               ---------------------
affecting the coverage provided by insurance required to be maintained
hereunder, Landlord and Tenant each waive any right to recover against the other
with respect to (i) damage to property, (ii) damage to the Premises or the
Center or any part thereof, or (iii) claims arising by reason of any of the
foregoing, but only to the extent that any of the foregoing damages and claims
under clauses (i)-(iii) hereof are covered, and only to the extent of such
coverage, by casualty insurance actually carried or required to be carried
hereunder by either Landlord or Tenant. This provision is intended to waive
fully, and for the benefit of each party, any rights and claims which might give
rise to a right of subrogation in any insurance carrier. Each party shall
procure a clause or endorsement on any casualty insurance policy denying to the
insurer rights of subrogation against the other party to the extent rights have
been waived by the insured prior to the occurrence of injury or loss. Coverage
provided by insurance maintained by Tenant shall not be limited, reduced or
diminished by virtue of the subrogation waiver herein contained.

          12.5 Increase In Premiums. Tenant shall do all acts and pay all
               --------------------
expenses necessary to insure that the Premises are not used for purposes
prohibited by any applicable fire insurance, and that Tenant's use of the
Premises and the Center complies with all requirements necessary to obtain any
such insurance. If Tenant uses or permits the Premises to be used in a manner
which increases the existing rate of any insurance carried by Landlord on the
Center and such use

                                      -23-

<PAGE>

continues for longer than a reasonable period specified in any written notice
from Landlord to Tenant identifying the rate increase and the factors causing
the same, then Tenant shall pay the amount of the increase in premium caused
thereby, and Landlord's costs of obtaining other replacement insurance policies,
including any increase in premium, within ten (10) days after demand therefor by
Landlord.

          12.6    Indemnification.
                  ---------------

                  (a)  Tenant shall indemnify, defend and hold Landlord and its
partners, shareholders, officers, directors, agents and employees harmless from
any and all liability for injury to or death of any person, or loss of or damage
to the property of any person, and all actions, claims, demands, costs
(including, without limitation, reasonable attorneys' fees), damages or expenses
of any kind arising therefrom which may be brought or made against Landlord or
which Landlord may pay or incur by reason of the use, occupancy and enjoyment of
the Premises and the Center by Tenant or any invitees, sublessees, licensees,
assignees, employees, agents or contractors of Tenant or holding under Tenant
from any cause whatsoever other than negligence or willful misconduct or
omission by Landlord, its agents or employees. Landlord and its partners,
shareholders, officers, directors, agents and employees shall not be liable for,
and Tenant hereby waives all claims against such persons for, damages to goods,
wares and merchandise in or upon the Premises or the Center, or for injuries to
Tenant, its agents or third persons in or upon the Premises or the Center, from
any cause whatsoever other than negligence or willful misconduct or omission by
Landlord, its agents or employees. Tenant shall give prompt notice to Landlord
of any casualty or accident in, on or about the Premises or the Center.

                  (b)  Landlord shall indemnify, defend and hold Tenant and its
partners, shareholders, officers, directors, agents and employees harmless from
any and all liability for injury to or death of any person, or loss of or damage
to the property of any person, and all actions, claims, demands, costs
(including, without limitation, reasonable attorneys' fees), damages or expenses
of any kind arising therefrom which may be brought or made against Tenant or
which Tenant may pay or incur, to the extent such liabilities or other matters
arise in, on or about the Premises or the Center by reason of any negligence or
willful misconduct or omission by Landlord, its agents or employees.

          12.7    Blanket Policy. Any policy required to be maintained hereunder
                  --------------
may be maintained under a so-called "blanket policy" insuring other parties and
other locations so long as the amount of insurance required to be provided
hereunder is not thereby diminished.

                                      -24-

<PAGE>

                           13. SUBLEASE AND ASSIGNMENT
                               -----------------------

         13.1  Assignment of Lease and Sublease of Premises. Except in the case
               --------------------------------------------
of a Permitted Transfer, Tenant shall not have the right or power to assign its
interest in this Lease, or make any sublease of the Premises or any portion
thereof, nor shall any interest of Tenant under this Lease be assignable
involuntarily or by operation of law, without on each occasion obtaining the
prior written consent of Landlord, which consent shall not be unreasonably
withheld or delayed. Any purported sublease or assignment of Tenant's interest
in this Lease requiring but not having received Landlord's consent thereto (to
the extent such consent is required hereunder) shall be void. Without limiting
the generality of the foregoing, Landlord may withhold consent to any proposed
subletting or assignment for which consent is requested solely on the ground, if
applicable, that the use by the proposed subtenant or assignee is reasonably
likely to be incompatible with Landlord's use of any adjacent property owned or
operated by Landlord, unless the proposed use is within the permitted uses
specified in Section 11.1, in which event it shall not be reasonable for
Landlord to object to the proposed use. Except in the case of a Permitted
Transfer, any dissolution, consolidation, merger or other reorganization of
Tenant, or any sale or transfer of substantially all of the stock or assets of
Tenant in a single transaction or series of related transactions, shall be
deemed to be an assignment hereunder and shall be void without the prior written
consent of Landlord as required above. Notwithstanding the foregoing, (i) any
public offering of the common stock of Tenant shall not be deemed to be an
assignment hereunder; (ii) any transfer of Tenant's stock during any period in
which Tenant has a class of stock listed on any recognized securities exchange
or traded in the NASDAQ over-the-counter market shall not be deemed to be an
assignment hereunder; (iii) any transfer of Tenant's stock in connection with a
bona fide financing, capitalization or recapitalization of Tenant shall not be
deemed to be an assignment hereunder, provided that such financing,
capitalization or recapitalization does not result in a material reduction in
Tenant's net worth or materially change the nature of Tenant's ongoing business
as a going concern; and (iv) Tenant shall have the right to assign this Lease or
sublet the Premises or any portion thereof, without Landlord's consent (but with
prior or concurrent written notice by Tenant to Landlord, except to the extent
Tenant is advised by its counsel that such prior or concurrent notice would be
in violation of applicable law, in which event Tenant shall give such written
notice as soon as reasonably possible after the giving of such notice is no
longer in violation of applicable law), to any Affiliate of Tenant, or to any
entity which results from a merger or consolidation with Tenant, or to any
entity which acquires substantially all of the stock or assets of Tenant as a
going concern (hereinafter each a "Permitted Transfer"). For purposes of the
                                   ------------------
preceding sentence, an "Affiliate" of Tenant shall mean any entity in which
                        ---------
Tenant owns at least a fifty percent (50%) equity interest, any entity which
owns at least a fifty percent (50%) equity interest in Tenant, and/or any entity
which is related to Tenant by a chain of ownership interests involving at least
a fifty percent (50%) equity interest at each level in the chain. Landlord shall
have no right to terminate this Lease in connection with, and shall have no
right to any sums or other economic consideration resulting from, any Permitted
Transfer. Except as expressly set forth in this Section 13.1, however, the
provisions of Section 13.2 shall remain applicable to any Permitted Transfer and
the transferee under such Permitted Transfer shall be and remain subject to all
of the terms and provisions of this Lease.

                                      -25-

<PAGE>

         13.2     Rights Of Landlord.
                  ------------------

                  (a) Consent by Landlord to one or more assignments of this
Lease, or to one or more sublettings of the Premises or any portion thereof, or
collection of rent by Landlord from any assignee or sublessee, shall not operate
to exhaust Landlord's rights under this Article 13, nor constitute consent to
any subsequent assignment or subletting. No assignment of Tenant's interest in
this Lease and no sublease shall relieve Tenant of its obligations hereunder,
notwithstanding any waiver or extension of time granted by Landlord to any
assignee or sublessee, or the failure of Landlord to assert its rights against
any assignee or sublessee, and regardless of whether Landlord's consent thereto
is given or required to be given hereunder. In the event of a default by any
assignee, sublessee or other successor of Tenant in the performance of any of
the terms or obligations of Tenant under this Lease, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against any
such assignee, sublessee or other successor. In addition, Tenant immediately and
irrevocably assigns to Landlord, as security for Tenant's obligations under this
Lease, all rent from any subletting of all or a part of the Premises as
permitted under this Lease, and Landlord, as Tenant's assignee and as
attorney-in-fact for Tenant, or any receiver for Tenant appointed on Landlord's
application, may collect such rent and apply it toward Tenant's obligations
under this Lease; except that, until the occurrence of an act of default by
Tenant, Tenant shall have the right to collect such rent and to retain all
sublease profits (subject to the provisions of Section 13.2(c), below).

                  (b) Upon any assignment of Tenant's interest in this Lease for
which Landlord's consent is required under Section 13.1 hereof, Tenant shall pay
to Landlord, within ten (10) days after receipt thereof by Tenant from time to
time, one-half (1/2) of all cash sums and other economic considerations received
by Tenant in connection with or as a result of such assignment, after first
deducting therefrom (i) any costs incurred by Tenant for leasehold improvements
(including, but not limited to, third-party architectural and space planning
costs) in the Premises in connection with such assignment, (ii) any real estate
commissions and/or reasonable attorneys' fees incurred by Tenant in connection
with such assignment, and (iii) any economic consideration received by Tenant as
bona fide, reasonable compensation for personal property sold or leased by
Tenant to the assignee.

                  (c) Upon any sublease of all or any portion of the Premises
for which Landlord's consent is required under Section 13.1 hereof, Tenant shall
pay to Landlord, within ten (10) days after receipt thereof by Tenant from time
to time, one-half (1/2) of all cash sums and other economic considerations
received by Tenant in connection with or as a result of such sublease, after
first deducting therefrom (i) the rental due hereunder for the corresponding
period, prorated (on the basis of the per-square-foot cost paid by Tenant for
the entire Premises for the applicable period under this Lease) to reflect the
size of the subleased portion of the Premises, (ii) any costs incurred by Tenant
for leasehold improvements in the subleased portion of the Premises (including,
but not limited to, third-party architectural and space planning costs) for the
specific benefit of the sublessee in connection with such sublease, amortized
over the term of the sublease, (iii) any real estate commissions and/or
reasonable attorneys' fees incurred by Tenant in connection with such sublease,
amortized over the term of such sublease, and (iv) any economic consideration
received by Tenant as bona fide, reasonable compensation for personal property
sold or leased by Tenant to the sublessee.

                     14. RIGHT OF ENTRY AND QUIET ENJOYMENT
                         ----------------------------------

                                     - 26 -

<PAGE>

         14.1 Right Of Entry. Landlord and its authorized representatives shall
              --------------
have the right to enter the Premises at any time during the term of this Lease
during normal business hours and upon not less than twenty-four (24) hours prior
notice, except in the case of emergency (in which event no notice shall be
required and entry may be made at any time), for the purpose of inspecting and
determining the condition of the Premises or for any other proper purpose
including, without limitation, to make repairs, replacements or improvements
which Landlord may deem necessary, to show the Premises to prospective
purchasers, to show the Premises to prospective tenants (but only during the
final year of the term of this Lease), and to post notices of nonresponsibility.
Landlord shall not be liable for inconvenience, annoyance, disturbance, loss of
business, quiet enjoyment or other damage or loss to Tenant by reason of making
any repairs or performing any work upon the Premises or the Center or by reason
of erecting or maintaining any protective barricades in connection with any such
work, and the obligations of Tenant under this Lease shall not thereby be
affected in any manner whatsoever, provided, however, Landlord shall use
                                   --------
reasonable efforts to minimize the inconvenience to Tenant's normal business
operations caused thereby.

         14.2 Quiet Enjoyment. Landlord covenants that Tenant, upon paying the
              ---------------
rent and performing its obligations hereunder and subject to all the terms and
conditions of this Lease, shall peacefully and quietly have, hold and enjoy the
Premises and the Common Areas of the Center throughout the term of this Lease,
or until this Lease is terminated as provided by this Lease.

                             15. CASUALTY AND TAKING
                                 -------------------

         15.1 Damage or Destruction.
              ---------------------

              (a) If the Premises, or the Common Areas of the Center necessary
for Tenant's use and occupancy of the Premises, are damaged or destroyed in
whole or in part under circumstances in which (i) repair and restoration is
permitted under applicable governmental laws, regulations and building codes
then in effect and (ii) repair and restoration reasonably can be completed
within a period of one (1) year (or, in the case of an occurrence during the
last year of the term of this Lease, within a period of sixty (60) days)
following the date of the occurrence, then Landlord, as to the Common Areas of
the Center and the cold shell of the buildings in which the Premises are
located, and Tenant, as to all other improvements existing in or about the
Prmeises immediately prior to such occurrence, shall commence and complete, with
all due diligence and as promptly as is reasonably practicable under the
conditions then existing, all such repair and restoration as may be required to
return the affected portions of the Premises and the Center to a condition
comparable to that existing immediately prior to the occurrence. In the event of
damage or destruction the repair of which is not permitted under applicable
governmental laws, regulations and building codes then in effect, if such damage
or destruction (despite being corrected to the extent then permitted under
applicable governmental laws, regulations and building codes) would still
materially impair Tenant's ability to conduct its business in the Premises, then
either party may terminate this Lease as of the date of the occurrence by giving
written notice to the other within thirty (30) days after the date of the
occurrence; if neither party timely elects such termination, or if such damage
or destruction does not materially impair Tenant's ability to conduct its
business in the Premises, then this Lease shall continue in full force and
effect, except that there shall be an equitable adjustment in monthly minimum
rental and of Tenant's Operating Cost Share of Operating Expenses, based upon
the extent to which Tenant's ability to conduct its business in the Premises is
impaired, and Landlord and Tenant respectively shall restore the Common Areas
and the cold shell of the applicable buildings and the other improvements in and
about such buildings to a complete architectural whole and to a functional
condition. In the event of damage or destruction which cannot reasonably be
repaired within one (1) year (or, in the case of an occurrence during the last
year of the term of this Lease, within a period of sixty (60) days) following
the date of the occurrence, then either Landlord or Tenant, at its election, may
terminate this Lease as of the date of the occurrence by giving written notice
to the other within thirty (30) days after the date of the occurrence; if
neither party timely elects such termination, then this Lease shall continue in
full force and effect and Landlord and Tenant shall each repair and restore
applicable portions of the Premises and the Center in accordance with the first
sentence of this Section 15.1.

                                     - 27 -

<PAGE>

              (b) The respective obligations of Landlord and Tenant pursuant to
Section 15.1(a) are subject to the following limitations:

                  (i)  If the occurrence results from a peril which is required
to be insured pursuant to Sections 12.1(c), (d) and (e) above, then Landlord and
Tenant shall use their respective best efforts and cooperate diligently,
reasonably and in good faith to recover any available proceeds from the
respective insurance which they are required to maintain pursuant to Sections
12.1(c), (d) and/or (e), as applicable, and to divide or allocate such proceeds
between themselves in accordance with their respective rebuilding obligations
under Section 15.1(a), and the obligations of each party shall not exceed its
respective share of the amount of insurance proceeds received from insurers (or,
in the case of any failure to maintain required insurance, proceeds that
reasonably would have been available if the required insurance had been
maintained) by reason of such occurrence, plus the amount of any deductible
under the applicable insurance, and, if such proceeds (including, in the case of
a failure to maintain required insurance, any proceeds that reasonably would
have been available) are insufficient, either party may terminate the Lease
unless the other party promptly elects and agrees, in writing, to contribute the
amount of the shortfall; and

                  (ii) If the occurrence results from a peril which is not
required to be insured pursuant to Sections 12.1(c), (d) and (e) above and is
not actually insured, Landlord shall be required to repair and restore the cold
shells of the applicable buildings and the Common Areas to the extent necessary
for Tenant's continued use and occupancy of the Premises, and Tenant shall be
required to repair and restore the other improvements in and about the Premises
to the extent necessary for Tenant's continued use and occupancy of the
Premises, provided that each party's obligation to repair and restore shall not
          --------
exceed an amount equal to five percent (5%) of the replacement cost of the cold
shells of the applicable buildings and the Common Area improvements, as to
Landlord, or five percent (5%) of the replacement cost of the other improvements
in and about the Premises, as to Tenant; if the replacement cost as to either
party exceeds such amount, then the party whose limit has been exceeded may
terminate this Lease unless the other party promptly elects and agrees, in
writing, to contribute the amount of the shortfall.

              (c) If this Lease is terminated pursuant to the foregoing
provisions of this Section 15.1 following an occurrence which is a peril
actually insured or required to be insured against pursuant to Sections 12.1(c),
(d) and (e), Landlord and Tenant agree (and any Lender shall be asked to agree)
that such insurance proceeds shall be allocated between Landlord and Tenant in a
manner which fairly and reasonably reflects their respective ownership rights
under this Lease, as of the termination or expiration of the term of this Lease,
with respect to the improvements, fixtures, equipment and other items to which
such insurance proceeds are attributable.

              (d) From and after the date of an occurrence resulting in damage
to or destruction of the Premises or of the Common Areas necessary for Tenant's
use and occupancy of the Premises, and continuing until repair and restoration
thereof are completed, there shall be an equitable abatement of minimum rental
and of Tenant's Operating Cost Share of Operating Expenses based upon the degree
to which Tenant's ability to conduct its business in the Premises is impaired.

        15.2  Condemnation.
              ------------

                                     - 28 -

<PAGE>

              (a) If during the term of this Lease the Premises or the Common
Areas of the Center, or any substantial part of either, is taken by eminent
domain or by reason of any public improvement or condemnation proceeding, or in
any manner by exercise of the right of eminent domain (including any transfer in
avoidance of an exercise of the power of eminent domain), or receives
irreparable damage by reason of anything lawfully done under color of public or
other authority, then (i) this Lease shall terminate as to the entire Premises
at Landlord's election by written notice given to Tenant within sixty (60) days
after the taking has occurred, and (ii) this Lease shall terminate as to the
entire Premises at Tenant's election, by written notice given to Landlord within
thirty (30) days after the nature and extent of the taking have been finally
determined, if the portion of the Premises taken is of such extent and nature as
substantially to handicap, impede or permanently impair Tenant's use of the
balance of the Premises. If Tenant elects to terminate this Lease, Tenant shall
also notify Landlord of the date of termination, which date shall not be earlier
than thirty (30) days nor later than ninety (90) days after Tenant has notified
Landlord of Tenant's election to terminate, except that this Lease shall
terminate on the date of taking if such date falls on any date before the date
of termination designated by Tenant. If neither party elects to terminate this
Lease as hereinabove provided, this Lease shall continue in full force and
effect (except that there shall be an equitable abatement of minimum rental and
of Tenant's Operating Cost Share of Operating Expenses based upon the degree to
which Tenant's ability to conduct its business in the Premises is impaired),
Landlord shall restore the shell of the buildings in which the Premises are
located and Common Area improvements to a complete architectural whole and a
functional condition and as nearly as reasonably possible to the condition
existing before the taking, and Tenant shall restore the other improvements in
the Premises and Tenant's other alterations, additions and improvements to a
complete architectural whole and a functional condition and as nearly as
reasonably possible to the condition existing before the taking. In connection
with any such restoration, each party shall use its respective best efforts
(including, without limitation, any necessary negotiation or intercession with
its respective lender, if any) to ensure that any severance damages or other
condemnation awards intended to provide compensation for rebuilding or
restoration costs are promptly collected and made available to Landlord and
Tenant in portions reasonably corresponding to the cost and scope of their
respective restoration obligations, subject only to such payment controls as
either party or its lender may reasonably require in order to ensure the proper
application of such proceeds toward the restoration of the Improvements. Each
party waives the provisions of Code of Civil Procedure Section 1265.130,
allowing either party to petition the Superior Court to terminate this Lease in
the event of a partial condemnation of the Premises or the Center.

              (b) The respective obligations of Landlord and Tenant pursuant to
Section 15.2(a) are subject to the following limitations:

                  (i)  Each party's obligation to repair and restore shall not
exceed, net of any condemnation awards or other proceeds available for and
allocable to such restoration as contemplated in Section 15.2(a), an amount
equal to five percent (5%) of the replacement cost of the shell of the buildings
in which the Premises are located and the Common Area improvements, as to
Landlord, or five percent (5%) of the replacement cost of the other improvements
in the Premises as to Tenant; if the replacement cost as to either party exceeds
such amount, then the party whose limit has been exceeded may terminate this
Lease unless the other party promptly elects and agrees, in writing, to
contribute the amount of the shortfall; and

                  (ii) If this Lease is terminated pursuant to the foregoing
provisions of this Section 15.2, or if this Lease remains in effect but any
condemnation awards or other proceeds become available as compensation for the
loss or destruction of any of the Improvements, then Landlord and Tenant agree
(and any Lender shall be asked to agree) that such proceeds shall be allocated
between Landlord and Tenant, respectively, in the respective proportions in
which Landlord and Tenant would have shared, under Section 15.1(c), the proceeds
of any insurance proceeds following loss or destruction of the applicable
Improvements by an insured casualty.

        15.3  Reservation Of Compensation. Landlord reserves, and Tenant waives
              ---------------------------
and assigns to Landlord, all rights to any award or compensation for
damage to the Premises, the Improvements, the Center and the leasehold estate
created hereby, accruing by reason of any taking in any public improvement,
condemnation or eminent domain proceeding or in any other

                                     - 29 -

<PAGE>

manner by exercise of the right of eminent domain or of anything lawfully done
by public authority, except that (a) Tenant shall be entitled to any and all
compensation or damages paid for or on account of Tenant's moving expenses,
trade fixtures and equipment and any leasehold improvements installed by Tenant
in the Premises at its own sole expense, but only to the extent Tenant would
have been entitled to remove such items at the expiration of the term of this
Lease and then only to the extent such compensation or damages are expressly and
specifically allocated by the condemning authority, in response to a direct
claim by Tenant, to Tenant's moving expenses, trade fixtures, equipment and/or
removable leasehold improvements as set forth in this clause (a), and (b) any
condemnation awards or proceeds described in Section 15.2(b)(ii) shall be
allocated and disbursed in accordance with the provisions of Section
15.2(b)(ii), notwithstanding any contrary provisions of this Section 15.3.

         15.4 Restoration Of Improvements. In connection with any repair or
              ---------------------------
restoration of the Premises or other Improvements by either party following a
casualty or taking as hereinabove set forth, the party responsible for such
repair or restoration shall, to the extent possible, return such Improvements to
a condition substantially equal to that which existed immediately prior to the
casualty or taking. To the extent such party wishes to make material
modifications to the Premises or to such Improvements, such modifications shall
be subject to the prior written approval of the other party (not to be
unreasonably withheld or delayed), except that no such approval shall be
required for modifications that are required by applicable governmental
authorities as a condition of the repair or restoration, unless such required
modifications would impair or impede Tenant's conduct of its business in the
Premises (in which case any such modifications in Landlord's work shall require
Tenant's consent, not unreasonably withheld or delayed) or would materially and
adversely affect the exterior appearance, the structural integrity or the
mechanical or other operating systems of the buildings in which the Premises are
located (in which case any such modifications in Tenant's work shall require
Landlord's consent, not unreasonably withheld or delayed).

                                   16. DEFAULT
                                       -------
         16.1 Events Of Default.  The occurrence of any of the following shall
              -----------------
constitute an event of default on the part of Tenant:

              (a) [Omitted.]

              (b) Nonpayment. Failure to pay, when due, any amount payable to
                  ----------
Landlord hereunder, such failure continuing for a period of five (5) business
days after written notice of such failure; provided, however, that any such
                                           --------
notice shall be in lieu of, and not in addition to, any notice required under
California Code of Civil Procedure Section 1161 et seq., as amended from time to
                                                ------
time;

              (c) Other Obligations.  Failure to perform any obligation,
                  -----------------
agreement or covenant under this Lease other than those matters specified in
subsection (b) hereof, such failure continuing for thirty (30) days after
written notice of such failure; provided, however, that if such failure is
                                --------
curable in nature but cannot reasonably be cured within such 30-day period, then
Tenant shall not be in default if, and so long as, Tenant promptly (and in all
events within such 30-day period) commences such cure and thereafter diligently
pursues such cure to completion; and provided further, however, that any such
                                     ----------------
notice shall be in lieu of, and not in addition to, any notice required under
California Code of Civil Procedure Section 1161 et seq., as amended from time to
                                                ------
time;

              (d) General Assignment.  A general assignment by Tenant for the
                  ------------------
 benefit of creditors;

              (e) Bankruptcy. The filing of any voluntary petition in bankruptcy
                  ----------
by Tenant, or the filing of an involuntary petition by Tenant's creditors, which
involuntary petition remains undischarged for a period of thirty (30) days. In
the event that under applicable law the trustee in bankruptcy or Tenant has the
right to affirm this Lease and continue to perform the obligations of Tenant
hereunder, such trustee or Tenant shall, in such time period as may be permitted
by the bankruptcy court having jurisdiction, cure all defaults of Tenant
hereunder outstanding as of the

                                     - 30 -

<PAGE>

date of the affirmance of this Lease and provide to Landlord such adequate
assurances as may be necessary to ensure Landlord of the continued performance
of Tenant's obligations under this Lease. Specifically, but without limiting the
generality of the foregoing, such adequate assurances must include assurances
that the Premises continue to be operated only for the use permitted hereunder.
The provisions hereof are to assure that the basic understandings between
Landlord and Tenant with respect to Tenant's use of the Premises and the Common
Areas and the benefits to Landlord therefrom are preserved, consistent with the
purpose and intent of applicable bankruptcy laws;

          (f)  Receivership.  The employment of a receiver appointed by court
               ------------
order to take possession of substantially all of Tenant's assets or the
Premises, if such receivership remains undissolved for a period of thirty (30)
days;

          (g)  Attachment.  The attachment, execution or other judicial seizure
               ----------
of all or substantially all of Tenant's assets or the Premises, if such
attachment or other seizure remains undismissed or undischarged for a period of
thirty (30) days after the levy thereof; or

          (h)  Insolvency. The admission by Tenant in writing of its inability
               ----------
to pay its debts as they become due, the filing by Tenant of a petition seeking
any reorganization or arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, the filing by Tenant of an answer admitting or failing timely to
contest a material allegation of a petition filed against Tenant in any such
proceeding or, if within thirty (30) days after the commencement of any
proceeding against Tenant seeking any reorganization or arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, such proceeding shall not have
been dismissed.

   16.2   Remedies Upon Tenant's Default.
          ------------------------------

          (a)  Upon the occurrence of any event of default described in Section
16.1 hereof, Landlord, in addition to and without prejudice to any other rights
or remedies it may have, shall have the immediate right to re-enter the Premises
or any part thereof and repossess the same, expelling and removing therefrom all
persons and property (which property may be stored in a public warehouse or
elsewhere at the cost and risk of and for the account of Tenant), using such
force as may be necessary to do so (as to which Tenant hereby waives any claim
for loss or damage that may thereby occur). In addition to or in lieu of such
re-entry, and without prejudice to any other rights or remedies it may have,
Landlord shall have the right either (i) to terminate this Lease and recover
from Tenant all damages incurred by Landlord as a result of Tenant's default, as
hereinafter provided, or (ii) to continue this Lease in effect and recover rent
and other charges and amounts as they become due.

          (b)  Even if Tenant has breached this Lease and abandoned the
Premises, this Lease shall continue in effect for so long as Landlord does not
terminate Tenant's right to possession under subsection (a) hereof and Landlord
may enforce all of its rights and remedies under this Lease, including the right
to recover rent as it becomes due, and Landlord, without terminating this Lease,
may exercise all of the rights and remedies of a lessor under California Civil
Code Section 1951.4 (lessor may continue lease in effect after lessee's breach
and abandonment and recover rent as it becomes due, if lessee has right to
sublet or assign, subject only to reasonable limitations), or any successor Code
section. Acts of maintenance, preservation or efforts to relet the Premises or
the appointment of a receiver upon application of Landlord to protect Landlord's
interests under this Lease shall not constitute a termination of Tenant's right
to possession.

          (c)  If Landlord terminates this Lease pursuant to this Section 16.2,
Landlord shall have all of the rights and remedies of a landlord provided by
Section 1951.2 of the Civil Code of the State of California, or any successor
Code section, which remedies include Landlord's right to recover from Tenant (i)
the worth at the time of award of the unpaid rent and additional rent which had
been earned at the time of termination, (ii) the worth at the time of award of
the amount by which the unpaid rent and additional rent which would have been
earned after termination until the time of award exceeds the amount of such
rental loss that Tenant

                                     - 31 -

<PAGE>

proves could have been reasonably avoided, (iii) the worth at the time of award
of the amount by which the unpaid rent and additional 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, and (iv) any other amount necessary
to compensate Landlord for all the detriment proximately caused by Tenant's
failure to perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom, including, but not limited
to, the cost of recovering possession of the Premises, expenses of reletting,
including necessary repair, renovation and alteration of the Premises,
reasonable attorneys' fees, and other reasonable costs. The "worth at the time
                                                             -----------------
of award" of the amounts referred to in clauses (i) and (ii) above shall be
--------
computed by allowing interest at ten percent (10%) per annum from the date such
amounts accrued to Landlord. The "worth at the time of award" of the amounts
                                  --------------------------
referred to in clause (iii) above shall be computed by discounting such amount
at one percentage point above the discount rate of the Federal Reserve Bank of
San Francisco at the time of award.

     16.3   Remedies Cumulative.  All rights, privileges and elections or
            -------------------
remedies of Landlord contained in this Article 16 are cumulative and not
alternative to the extent permitted by law and except as otherwise provided
herein.

               17.  SUBORDINATION, ATTORNMENT AND SALE
                    ----------------------------------

                                     - 32 -

<PAGE>

     17.1  Subordination To Mortgage. This Lease, and any sublease entered into
           -------------------------
by Tenant under the provisions of this Lease, shall be subject and subordinate
to any ground lease, mortgage, deed of trust, sale/leaseback transaction or any
other hypothecation for security now or hereafter placed upon any portion(s) of
the Center on which the Premise are located, and to the rights of any assignee
of Landlord or of any ground lessor, mortgagee, trustee, beneficiary or
leaseback lessor under any of the foregoing, and to any and all advances made on
the security thereof and to all renewals, modifications, consolidations,
replacements and extensions thereof; provided, however, that such subordination
                                     --------
in the case of any future ground lease, mortgage, deed of trust, sale/leaseback
transaction or any other hypothecation for security placed upon any portion(s)
of the Center on which the Premises are located shall be conditioned on Tenant's
receipt from the ground lessor, mortgagee, trustee, beneficiary or leaseback
lessor of a Non-Disturbance Agreement in a form reasonably acceptable to Tenant
(i) confirming that so long as Tenant is not in material default hereunder
beyond any applicable cure period (for which purpose the occurrence of any event
of default under Section 16.1 hereof shall be deemed to be "material"), Tenant's
rights hereunder shall not be disturbed by such person or entity and (ii)
agreeing that the benefit of such Non-Disturbance Agreement shall be
transferable to any transferee under a Permitted Transfer and to any other
assignee or subtenant that is acceptable to the ground lessor, mortgagee,
trustee, beneficiary or leaseback lessor at the time of transfer. Moreover,
Tenant's obligations under this Lease shall be conditioned on Tenant's receipt,
within sixty (60) days after the date hereof (provided that Landlord shall have
                                              --------
the right to extend such period for up to an additional thirty (30) days in
order to continue pursuing receipt of the agreement required hereunder if not
received within such initial 60-day period), from The Northwestern Mutual Life
Insurance Company, the beneficiary under an existing deed of trust on the Phase
I Property, of a Non-Disturbance Agreement in a form reasonably acceptable to
Tenant acknowledging and approving this Lease and confirming (i) that so long as
Tenant is not in material default hereunder beyond any applicable cure period
(for which purpose the occurrence of any event of default under Section 16.1
hereof shall be deemed to be "material"), Tenant's rights hereunder shall not be
disturbed by such person or entity and (ii) agreeing that the benefit of such
Non-Disturbance Agreement shall be transferable to any transferee under a
Permitted Transfer and to any other assignee or subtenant that is acceptable to
the ground lessor, mortgagee, trustee, beneficiary or leaseback lessor at the
time of transfer. If any mortgagee, trustee, beneficiary, ground lessor,
sale/leaseback lessor or assignee elects to have this Lease be an encumbrance
prior to the lien of its mortgage, deed of trust, ground lease or leaseback
lease or other security arrangement upon any portion(s) of the Center on which
the Premises are located and gives notice thereof to Tenant, this Lease shall be
deemed prior thereto, whether this Lease is dated prior or subsequent to the
date thereof or the date of recording thereof. Tenant, and any sublessee, shall
execute such documents as may reasonably be requested by any mortgagee, trustee,
beneficiary, ground lessor, sale/leaseback lessor or assignee to evidence the
subordination herein set forth, subject to the conditions set forth above, or to
make this Lease prior to the lien of any mortgage, deed of trust, ground lease,
leaseback lease or other security arrangement, as the case may be. Upon any
default by Landlord in the performance of its obligations under any mortgage,
deed of trust, ground lease, leaseback lease or assignment, Tenant (and any
sublessee) shall, notwithstanding any subordination hereunder, attorn to the
mortgagee, trustee, beneficiary, ground lessor, leaseback lessor or assignee
thereunder upon demand and become the tenant of the successor in interest to
Landlord, at the option of such successor in interest, and shall execute and
deliver any instrument or instruments confirming the attornment herein provided
for.

     17.2  Sale Of Landlord's Interest. Upon sale, transfer or assignment of
           ---------------------------
Landlord's entire interest in the portion(s) of the Center on which the Premises
are located, Landlord shall be relieved of its obligations hereunder with
respect to liabilities accruing from and after the date of such sale, transfer
or assignment.

     17.3  Estoppel Certificates. Tenant or Landlord (the "responding party"),
           ---------------------                           ----------------
as applicable, shall at any time and from time to time, within ten (10) days
after written request by the other party (the "requesting party"), execute,
                                               ----------------
acknowledge and deliver to the requesting party a certificate in writing
stating: (i) that this Lease is unmodified and in full force and effect, or if
there have been any modifications, that this Lease is in full force and effect
as modified and stating the date and the nature of each modification; (ii) the
date to which rental and all other sums payable hereunder have been paid; (iii)
that the requesting party is not in default in the

                                     - 33 -

<PAGE>

performance of any of its obligations under this Lease, that the certifying
party has given no notice of default to the requesting party and that no event
has occurred which, but for the expiration of the applicable time period, would
constitute an event of default hereunder, or if the responding party alleges
that any such default, notice or event has occurred, specifying the same in
reasonable detail; and (iv) such other matters as may reasonably be requested by
the requesting party or by any institutional lender, mortgagee, trustee,
beneficiary, ground lessor, sale/leaseback lessor or prospective purchaser of
any portion(s) of the Center on which the Premises are located, or any
prospective sublessee or assignee of this Lease. Any such certificate provided
under this Section 17.3 may be relied upon by any lender, mortgagee, trustee,
beneficiary, assignee or successor in interest to the requesting party, by any
prospective purchaser, by any purchaser on foreclosure or sale, by any grantee
under a deed in lieu of foreclosure of any mortgage or deed of trust on the
Center (or any portion thereof), by any subtenant or assignee, or by any other
third party. Failure to execute and return within the required time any estoppel
certificate requested hereunder, if such failure continues for five (5) days
after a second written request by the requesting party for such estoppel
certificate, shall be deemed to be an admission of the truth of the matters set
forth in the form of certificate submitted to the responding party for
execution.

     17.4  Subordination to CC&R's. This Lease, and any permitted sublease
           -----------------------
entered into by Tenant under the provisions of this Lease, and the interests in
real property conveyed hereby and thereby shall be subject and subordinate to
any declarations of covenants, conditions and restrictions affecting the Center
(or any portion thereof) from time to time, provided that the terms of such
                                            --------
declarations are reasonable, do not materially impair Tenant's ability to
conduct the uses permitted hereunder on the Premises and in the Center, and do
not discriminate against Tenant relative to other similarly situated tenants
occupying the portion(s) of the Center covered by such declaration(s). Moreover,
this Lease, and any permitted sublease entered into by Tenant under the
provisions of this Lease, and the interests in real property conveyed hereby and
thereby shall also be subject and subordinate (a) to the Declaration of
Covenants, Conditions and Restrictions for Pointe Grand Business Park dated
November 4, 1991 and recorded on February 25, 1992 as Instrument No. 92025214,
Official Records of San Mateo County, as amended from time to time (the "Master
                                                                         ------
Declaration"), the provisions of which Master Declaration are an integral part
-----------
of this Lease to the extent this sentence is applicable, (b) to the Declaration
of Covenants, Conditions and Restrictions dated November 23, 1987 and recorded
on November 24, 1987 as Instrument No. 87177987, Official Records of San Mateo
County, which declaration imposes certain covenants, conditions and restrictions
on the Pointe Grand Business Park, and (c) to the Environmental Restriction and
Covenant (Pointe Grand) dated as of April 16, 1997 and recorded on April 16,
1997 as Instrument No. 97-043682, Official Records of San Mateo County, which
declaration imposes certain covenants, conditions and restrictions on the Pointe
Grand Business Park. Tenant agrees to execute, upon request by Landlord, any
documents reasonably required from time to time to evidence such subordination.

     17.5  Mortgagee Protection. If, following a default by Landlord under any
           --------------------
mortgage, deed of trust, ground lease, leaseback lease or other security
arrangement covering any portion(s) of the Center on which the Premises are
located, any such portion(s) of the Center are acquired by the mortgagee,
beneficiary, master lessor or other secured party, or by any other successor
owner, pursuant to a foreclosure, trustee's sale, sheriff's sale, lease
termination or other similar procedure (or deed in lieu thereof), then any such
person or entity so acquiring any portion(s) of the Center on which the Premises
are located shall not be:

           (a) liable for any act or omission of a prior landlord or owner of
such portion(s) of the Center (including, but not limited to, Landlord);

           (b) subject to any offsets or defenses that Tenant may have against
any prior landlord or owner of such portion(s) of the Center (including, but not
limited to, Landlord);

           (c) bound by any rent or additional rent that Tenant may have paid in
advance to any prior landlord or owner of such portion(s) of the Center
(including, but not limited to, Landlord) for a period in excess of one month,
or by any security deposit, cleaning deposit or other prepaid charge that Tenant
may have paid in advance to any prior landlord or owner (including, but not
limited to, Landlord), except to the extent such deposit or prepaid amount has

                                     - 34 -

<PAGE>

been expressly turned over to or credited to the successor owner thus acquiring
such portion(s) of the Center;

           (d) liable for any warranties or representations of any nature
whatsoever, whether pursuant to this Lease or otherwise, by any prior landlord
or owner of such portion(s) of the Center (including, but not limited to,
Landlord) with respect to the use, construction, zoning, compliance with laws,
title, habitability, fitness for purpose or possession, or physical condition
(including, without limitation, environmental matters) of the Center or any
portion thereof; or

           (e) liable to Tenant in any amount beyond the interest of such
mortgagee, beneficiary, master lessor or other secured party or successor owner
in such portion(s) of the Center, it being the intent of this provision that
Tenant shall look solely to the interest of any such mortgagee, beneficiary,
master lessor or other secured party or successor owner in such portion(s) of
the Center for the payment and discharge of the landlord's obligations under
this Lease and that such mortgagee, beneficiary, master lessor or other secured
party or successor owner shall have no separate personal liability for any such
obligations.

                         18.  SECURITY
                              --------

     18.1  Deposit.  Tenant is not required to provide any security deposit to
           -------
Landlord pursuant to this Lease.

                         19.  MISCELLANEOUS
                              -------------

     19.1  Notices. All notices, consents, waivers and other communications
           -------
which this Lease requires or permits either party to give to the other shall be
in writing and shall be deemed given when delivered personally (including
delivery by private courier or express delivery service) or four (4) days after
deposit in the United States mail, registered or certified mail, postage
prepaid, addressed to the parties at their respective addresses as follows:

     To Tenant:          COR Therapeutics, Inc.
                         256 East Grand Avenue
                         South San Francisco, CA 94080
                         Attn: Charles A. Alaimo

     with copy to:       Cooley Godward LLP
                         One Maritime Plaza, 20/th/ Floor
                         San Francisco, CA 94111-3580
                         Attn: Anna B. Pope, Esq.

     To Landlord:        Britannia Pointe Grand Limited Partnership
                         1939 Harrison Street, Suite 715
                         Park Plaza Building
                         Oakland, CA 94612
                         Attn: T. J. Bristow

     with copy to:       Folger Levin & Kahn LLP
                         Embarcadero Center West
                         275 Battery Street, 23rd Floor
                         San Francisco, CA 94111
                         Attn: Donald E. Kelley, Jr.

     and copy to:        Slough Estates USA Inc.
                         33 West Monroe Street, Suite 2000
                         Chicago, IL 60603
                         Attn: Randy Rohner

or to such other address as may be contained in a notice at least fifteen (15)
days prior to the address change from either party to the other given pursuant
to this Section. Rental payments

                                     - 35 -

<PAGE>

and other sums required by this Lease to be paid by Tenant shall be delivered to
Landlord at Landlord's address provided in this Section, or to such other
address as Landlord may from time to time specify in writing to Tenant, and
shall be deemed to be paid only upon actual receipt.

          19.2  Successors And Assigns. The obligations of this Lease shall run
                ----------------------
with the land, and this Lease shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, except that the
original Landlord named herein and each successive Landlord under this Lease
shall be liable only for obligations accruing during the period of its ownership
of the portion(s) of the Center on which the Premises are located, and any
liability for obligations accruing after termination of such ownership shall
terminate as of the date of such termination of ownership and shall pass to the
successor lessor.

          19.3  No Waiver. The failure of Landlord to seek redress for
                ---------
violation, or to insist upon the strict performance, of any covenant or
condition of this Lease shall not be deemed a waiver of such violation, or
prevent a subsequent act which would originally have constituted a violation
from having all the force and effect of an original violation.

          19.4  Severability. If any provision of this Lease or the application
                ------------
thereof is held to be invalid or unenforceable, the remainder of this Lease or
the application of such provision to persons or circumstances other than those
as to which it is invalid or unenforceable shall not be affected thereby, and
each of the provisions of this Lease shall be valid and enforceable, unless
enforcement of this Lease as so invalidated would be unreasonable or grossly
inequitable under all the circumstances or would materially frustrate the
purposes of this Lease.

          19.5  Litigation Between Parties. In the event of any litigation or
                --------------------------
other dispute resolution proceedings between the parties hereto arising out of
or in connection with this Lease, the prevailing party shall be reimbursed for
all reasonable costs, including, but not limited to, reasonable accountants'
fees and attorneys' fees, incurred in connection with such proceedings
(including, but not limited to, any appellate proceedings relating thereto) or
in connection with the enforcement of any judgment or award rendered in such
proceedings. "Prevailing party" within the meaning of this Section shall
              ----------------
include, without limitation, a party who dismisses an action for recovery
hereunder in exchange for payment of the sums allegedly due, performance of
covenants allegedly breached or consideration substantially equal to the relief
sought in the action.

          19.6  Surrender. A voluntary or other surrender of this Lease by
                ---------
Tenant, or a mutual termination thereof between Landlord and Tenant, shall not
result in a merger but shall, at the option of Landlord, operate either as an
assignment to Landlord of any and all existing subleases and subtenancies, or a
termination of all or any existing subleases and subtenancies. This provision
shall be contained in any and all assignments or subleases made pursuant to this
Lease.

          19.7  Interpretation. The provisions of this Lease shall be construed
                --------------
as a whole, according to their common meaning, and not strictly for or against
Landlord or Tenant. The captions preceding the text of each Section and
subsection hereof are included only for convenience of reference and shall be
disregarded in the construction or interpretation of this Lease.

          19.8  Entire Agreement. This written Lease, together with the exhibits
                ----------------
hereto, contains all the representations and the entire understanding between
the parties hereto with respect to the subject matter hereof. Any prior
correspondence, memoranda or agreements are replaced in total by this Lease and
the exhibits hereto. This Lease may be modified only by an agreement in writing
signed by each of the parties.

          19.9  Governing Law. This Lease and all exhibits hereto shall be
                -------------
construed and interpreted in accordance with and be governed by all the
provisions of the laws of the State of California.

          19.10 No Partnership. The relationship between Landlord and Tenant is
                --------------
solely that of a lessor and lessee. Nothing contained in this Lease shall be
construed as creating any type or manner of partnership, joint venture or joint
enterprise with or between Landlord and Tenant.

                                     - 36 -

<PAGE>

          19.11  Financial Information. From time to time Tenant shall promptly
                 ---------------------
provide directly to prospective lenders and purchasers of the portion(s) of the
Center on which the Premises are located, as designated by Landlord from time to
time, such financial information pertaining to the financial status of Tenant as
Landlord may reasonably request; provided, Tenant shall be permitted to provide
                                 --------
such financial information in a manner which Tenant deems reasonably necessary
to protect the confidentiality of such information. In addition, from time to
time, Tenant shall provide Landlord with such financial information pertaining
to the financial status of Tenant as Landlord may reasonably request. Landlord
agrees that all financial information supplied to Landlord by Tenant shall be
treated as confidential material, and shall not be disseminated to any party or
entity (including any entity affiliated with Landlord) without Tenant's prior
written consent, except that Landlord shall be entitled to provide such
information, subject to reasonable precautions to protect the confidential
nature thereof, (i) to Landlord's partners and professional advisors, solely to
use in connection with Landlord's execution and enforcement of this Lease, and
(ii) to prospective lenders and/or purchasers of the portion(s) of the Center on
which the Premises are located, solely for use in connection with their bona
fide consideration of a proposed financing or purchase of the portion(s) of the
Center on which the Premises are located, provided that such prospective lenders
                                          --------
and/or purchasers are not then engaged in businesses directly competitive with
the business then being conducted by Tenant. For purposes of this Section,
without limiting the generality of the obligations provided herein, it shall be
deemed reasonable for Landlord to request copies of Tenant's most recent audited
annual financial statements, or, if audited statements have not been prepared,
unaudited financial statements for Tenant's most recent fiscal year, accompanied
by a certificate of Tenant's chief financial officer that such financial
statements fairly present Tenant's financial condition as of the date(s)
indicated. Notwithstanding any other provisions of this Section 19.11, during
any period in which Tenant has outstanding a class of publicly traded securities
and is filing with the Securities and Exchange Commission, on a regular basis,
Forms 10Q and 10K and any other periodic filings required under the Securities
Exchange Act of 1934, as amended, it shall constitute sufficient compliance
under this Section 19.11 for Tenant to furnish Landlord with copies of such
periodic filings upon Landlord's written request.

                 Landlord and Tenant recognize the need of Tenant to maintain
the confidentiality of information regarding its financial status and the need
of of Landlord to be informed of, and to provide to prospective lenders and
purchasers of the portion(s) of the Center on which the Premises are located,
financial information pertaining to, Tenant's financial status. Landlord and
Tenant agree to cooperate with each other in achieving these needs within the
context of the obligations set forth in this Section.

          19.12  Costs. If Tenant requests the consent of Landlord under any
                 -----
provision of this Lease for any act that Tenant proposes to do hereunder,
including, without limitation, assignment of this Lease or subletting of the
Premises or any portion thereof, Tenant shall, as a condition to doing any such
act and the receipt of such consent, reimburse Landlord promptly for any and all
reasonable costs and expenses incurred by Landlord in connection therewith,
including, without limitation, reasonable attorneys' fees, up to a maximum of
$2,500.00 per request.

          19.13  Time. Time is of the essence of this Lease, and of every term
                 ----
and condition hereof.

          19.14  Rules And Regulations. Tenant shall observe, comply with and
                 ---------------------
obey, and shall cause its employees, agents and, to the best of Tenant's
ability, invitees to observe, comply with and obey such rules and regulations as
Landlord may reasonably promulgate from time to time for the safety, care,
cleanliness, order and use of the Improvements, the Premises and the Center.

          19.15  Brokers. Landlord agrees to pay a fee of $300,000 to Tenant's
                 -------
consultant, CB Richard Ellis (attn: Chris Jacobs), in connection with the
consummation of this Lease in accordance with a separate agreement. Such fee
shall be due and payable in full on or before September 15, 2001. Each party
represents and warrants that no other broker participated in the consummation of
this Lease and agrees to indemnify, defend and hold the other party harmless
against any liability, cost or expense, including, without limitation,
reasonable attorneys' fees, arising out of any claims for brokerage commissions
or other similar compensation in connection

                                     - 37 -

<PAGE>

with any conversations, prior negotiations or other dealings by the indemnifying
party with any other broker.

          19.16 Memorandum Of Lease. At any time during the term of this Lease,
                -------------------
either party, at its sole expense, shall be entitled to record a memorandum of
this Lease and, if either party so elects, both parties agree to cooperate in
the preparation, execution, acknowledgement and recordation of such document in
reasonable form.

          19.17 Corporate Authority. Each of the persons signing this Lease on
                -------------------
behalf of Tenant warrants that he or she is fully authorized to do so and, by
jointly so signing, to bind Tenant.

          19.18 Execution and Delivery. This Lease may be executed in one or
                ----------------------
more counterparts and by separate parties on separate counterparts, but each
such counterpart shall constitute an original and all such counterparts together
shall constitute one and the same instrument.

          19.19 Survival. Without limiting survival provisions which would
                --------
otherwise be implied or construed under applicable law, the provisions of
Sections 2.5, 7.4, 9.2, 9.3, 9.4, 11.6, 12.6 and 19.5 hereof shall survive the
termination of this Lease with respect to matters occurring prior to the
expiration of this Lease.

          19.20 Parking. Landlord and Tenant agree that the Common Areas, taken
                -------
as a whole, shall include parking in amounts sufficient to satisfy the minimum
parking requirements of the City of South San Francisco applicable to the Center
from time to time.

                     [rest of page intentionally left blank]




                                     - 38 -

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
day and year first set forth above.

           "Landlord"

BRITANNIA POINTE GRAND LIMITED
PARTNERSHIP, a Delaware limited
partnership

By:  BRITANNIA POINTE GRAND, LLC,
     a California limited liability
     company, General Partner


     By: /s/ T.J. Bristow
         ------------------------------
         T. J. Bristow
         Its Manager, President and
         Chief Financial Officer

            "Tenant"

COR THERAPEUTICS, INC., a Delaware
corporation


By:      /s/ Peter S. Roddy
         ------------------------------
Its:     Senior Vice President, Finance
         ------------------------------
         and Chief Financial Officer
         ------------------------------

By:      /s/ Vaughn M. Kailian
         ------------------------------
Its:     President and Chief Executive
         ------------------------------
         Officer
         ------------------------------


                                     - 39 -

<PAGE>

                                    EXHIBITS
                                    --------

           EXHIBIT A           Real Property Description

           EXHIBIT A-1         Phase I Property (Plan)

           EXHIBIT B           Site Plan

           EXHIBIT C           Future Entrance Lobby



<PAGE>

                                   EXHIBIT A
                                   ---------

                           REAL PROPERTY DESCRIPTION
                           -------------------------

The Phase I Property:
--------------------

All that certain real property in the City of South San Francisco, County of San
Mateo, State of California, more particularly described as follows:

Lot 3 as shown on Parcel Map No. 91-284, "Being a resubdivision of the parcels
described in the deeds to Metal and Thermit Corporation, recorded in Book 293,
at Page 394 of Deeds; in Book 49, at Page 490, Official Records; in Book 77, at
Page 415, Official Records; and, except that parcel described in Book 1352, at
Page 373, Official Records," filed on February 25, 1992, in Book 65 of Parcel
Maps, in the Office of the Recorder of the County of San Mateo, California.

The Center:
----------

All that certain real property in the City of South San Francisco, County of San
Mateo, State of California, more particularly described as follows:

Lots 1, 2, 3 and 4, inclusive, as shown on Parcel Map No. 91-284, "Being a
resubdivision of the parcels described in the deeds to Metal and Thermit
Corporation, recorded in Book 293, at Page 394 of Deeds; in Book 49, at Page
490, Official Records; in Book 77, at Page 415, Official Records; and, except
that parcel described in Book 1352, at Page 373, Official Records," filed on
February 25, 1992, in Book 65 of Parcel Maps, in the Office of the Recorder of
the County of San Mateo, California.

Together with all adjacent or substantially adjacent areas owned by Landlord and
depicted on the Site Plan (Exhibit B to this Lease) as being part of the Center.
                           ---------


                                   EXHIBIT A-1
                                   -----------

                             PHASE I PROPERTY (PLAN)

                                    [GRAPHIC]


                                    EXHIBIT B
                                    ---------

                                    SITE PLAN
                                    ---------

                                    [GRAPHIC]


                                    EXHIBIT C
                                    ---------

                              FUTURE ENTRANCE LOBBY
                              ---------------------

                                    [GRAPHIC]