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                                                                   EXHIBIT 10.35


                       THIRD AMENDMENT TO LEASE AGREEMENT

This Third Amendment to Lease Agreement (the "Amendment") is made and entered
into as of May 7, 1999, by and between AMB Property, L.P., a Delaware limited
partnership ("Landlord"), and PharmChem Laboratories, Inc., a California
corporation ("Tenant"), with reference to the following facts.

                                    RECITALS

A.      Lincoln Menlo Associates Limited, a California limited partnership and
        Tenant have entered into that certain Lease Agreement dated as of June
        28, 1993 as subsequently amended on December 28, 1993 (First Amendment)
        and December 20, 1995 (Second Amendment), hereinafter collectively the
        "Lease") for the leasing of certain premises consisting of approximately
        11,925 rentable square feet located at 1275 Hamilton Court, Menlo Park,
        California (the "Premises") as such Premises are more fully described in
        the Lease.

B.      Lincoln has assigned its interest to Landlord.

C.      Landlord and Tenant now wish to amend the Lease to provide for, among
        other things, the extension of the Term of the Lease, all upon and
        subject to each of the terms, conditions, and provisions set forth
        herein.

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant agree as follows:

        1.      Recitals: Landlord and Tenant agree that the above recitals are
                true and correct and are hereby incorporated herein as though
                set forth in full.

        2.      Term: The Term of the Lease shall be extended from July 1, 1999
                to June 30, 2006 (the "Extended Term").

        3.      Base Rent: The Basic Lease Information and Section 3 of the
                Lease are hereby modified to provide that during the Extended
                Term of the Lease the monthly Base Rent payable by Tenant to
                Landlord, in accordance with the provisions of Section 3 of the
                Lease shall be in accordance with the following schedule:

<TABLE>
<CAPTION>
                      Period                       Monthly Base Rent
                      ------                       -----------------
<S>                                                <C>
                      07/01/99 - 06/30/01          $7,155.00
                      07/01/01 - 02/28/03          $7,751.00
                      03/01/03 - 10/31/04          $8,109.00
                      11/01/04 - 06/03/06          $8,467.00
</TABLE>

        4.      Condition of Premises: Tenant acknowledges and agrees that its
                possession of the Premises after July 1, 1999 is a continuation
                of Tenant's possession of the Premises under the Lease. Tenant
                is familiar with the condition of the Premises, and agrees to
                accept the Premises in their existing condition "AS IS", without
                any obligation of Landlord to remodel, improve or alter the
                Premises, to perform any other construction or work of
                improvement upon the Premises, or to provide Tenant with any
                construction or refurbishing allowance. As of the date of this
                Amendment, Tenant represents and warrants to Landlord that
                Tenant is not aware of any dangerous conditions or other defects
                existing in or about the Premises or the Building, and that
                unless Tenant provides Landlord with written notice to the
                contrary prior to June 30, 1999 such representation and warranty
                shall be true as if the same were made on such date.

        5.      Brokers: Tenant warrants that it has had no dealing with any
                real estate broker or agent in connection with the negotiation
                of this Amendment whose commission shall be payable by Landlord.
                If Tenant has dealt with any person, real estate broker or agent
                with respect to this Amendment, Tenant shall be solely
                responsible for the payment of any fee due to said person or
                firm, and Tenant shall hold Landlord free and harmless against
                any liability with respect thereto, including attorneys' fees
                and costs.



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        6.      Right to Terminate: Subject to the limitations and conditions
                set forth herein, Tenant shall have a right to terminate the
                Lease ("Termination Option") effective as of May 31, 2001
                ("Termination Date"). If Landlord does not receive written
                notice from Tenant of its exercise of this Termination Option
                prior to August 31, 2000 all rights under this Termination
                Option shall automatically terminate and shall be of no further
                force or effect. Tenant's exercise of the Termination Option
                shall be subject to the following terms and conditions
                (collectively the "Termination Conditions"): (1) Tenant shall
                provide to Landlord a termination fee of thirty-eight thousand
                three hundred fifty and 00/100 ($38,350.00) along with Tenant's
                timely written notice of exercise of the Termination Option; (2)
                Tenant shall be liable for performance of all obligations
                required to be performed by Tenant under the Lease, as and when
                such obligations are required to be performed under the Lease
                through the Termination Date; and (3) Tenant shall vacate and
                surrender the Premises as of the Termination Date in accordance
                with the provisions of the Lease.

                If Tenant exercises the Termination Option, upon termination of
                the Lease, the vacation and surrender of the Premises by Tenant,
                and satisfaction of the Termination Conditions (above) of this
                Agreement, Landlord and Tenant shall have no further rights,
                obligations or claims with respect to each other arising from
                this Agreement or the Lease, except for those obligations of
                Tenant under the Lease which are expressly required to survive
                and continue after the termination or expiration of the Lease.
                Tenant and Landlord hereby acknowledge and agree that certain
                obligations of Tenant survive the termination or expiration of
                the Lease, pursuant to the terms and provisions of the Lease,
                and the parties further agree that it is the intention of Tenant
                and Landlord that this Agreement not affect such ongoing
                obligations of Tenant.

        7.      Effect of Amendment: Except as modified herein, the terms and
                conditions of the Lease shall remain unmodified and continue in
                full force and effect. In the event of any conflict between the
                terms and conditions of the lease and this Amendment, the terms
                and conditions of this Amendment shall prevail.

        8.      Definitions: Unless otherwise defined in this Amendment, all
                terms not defined in this Amendment shall have the meaning set
                forth in the Lease.

        9.      Authority: Subject to the provisions of the Lease, this
                Amendment shall be binding upon and inure to the benefit of the
                parties hereto, their respective heirs, legal representatives,
                successors and assigns. Each party hereto and the persons
                signing below warrant that the person signing below on such
                party's behalf is authorized to do so and to bind such party to
                the terms of this Amendment.

        10.     The terms and provisions of the Lease are hereby incorporated in
                this Amendment.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and
year first above written.

TENANT:

PharmChem Laboratories, Inc.,
a California corporation

By: /S/ JOE HALLIGAN
   -------------------------------

Its: CEO
   -------------------------------

Date: 6/3/1999
     -----------------------------

LANDLORD:

AMB Property L.P.,
a Delaware limited partnership
By AMB Property Corporation, its General Partner

By: /S/ GAYLE STARR
   -------------------------------
   Vice President

Date: 6/12/99
   -------------------------------



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