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                                                                   EXHIBIT 10.45

                                                               CUSTOMER NO. 1118
                             MASTER LEASE AGREEMENT


Lessor:        TRANSAMERICA BUSINESS CREDIT CORPORATION
               RIVERWAY II
               WEST OFFICE TOWER
               WEST HIGGINS
               ROSEMONT, ILLINOIS  60018


Lessee:        PROGENITOR, INC.
               4040 CAMPBELL AVENUE
               MENLO PARK, CALIFORNIA  94025


The lessor pursuant to this Master Lease Agreement ("Agreement") dated as of May
1, 1998, is Transamerica Business Credit Corporation ("Lessor"). All equipment,
together with all present and future additions, parts, accessories, attachments,
substitutions, repairs, improvements, and replacements thereof or thereto, which
are the subject of a Lease (as defined in the next sentence) shall be referred
to as "Equipment." Simultaneous with the execution and delivery of this
Agreement, the parties are entering into one or more Lease Schedules (each, a
"Schedule") which refer to and incorporate by reference this Agreement, each of
which constitutes a lease (each, a "Lease") for the Equipment specified therein.
Additional details pertaining to each Lease are specified in the applicable
Schedule. Each Schedule that the parties hereafter enter into shall constitute a
Lease. Except as set forth in the Commitment Letter executed by Lessor and
Lessee, dated as of March 17, 1998 as modified or amended to the date hereof and
attached hereto as Exhibit A (the "Commitment Letter"), Lessor has no obligation
to enter into any additional leases with, or extend any future financing to,
Lessee.


               1. LEASE. Subject to and upon all of the terms and conditions of
this Agreement and each Schedule, Lessor hereby agrees to lease to Lessee and
Lessee hereby agrees to lease from Lessor the Equipment for the Term (as defined
in Paragraph 2 below) thereof. The timing and financial scope of Lessor's
obligation to enter into Leases hereunder are limited as set forth in the
Commitment Letter.

               2. TERM. Each Lease shall be effective and the term of each Lease
("Term") shall commence on the commencement date specified in the applicable
Schedule and, unless sooner terminated (as hereinafter provided), shall expire
at the end of the term specified in such Schedule; provided, however, that
obligations due to be performed by Lessee during the Term shall continue until
they have been performed in full. Continuing indemnification obligations
hereunder shall not result in an extension of the Term of any Lease. Schedules
will only be executed after the delivery of the Equipment to Lessee or upon
completion of deliveries of items of such Equipment with aggregate cost of not
less than $50,000.

               3. RENT. Lessee shall pay as rent to Lessor, for use of the
Equipment during the Term or Renewal Term (as defined in Paragraph 8), rental
payments equal to the sum of all rental payments including, without limitation,
security deposits, advance rents, and interim rents payable in the amounts and
on the dates specified in the applicable Schedule ("Rent"). If any Rent or other
amount payable by Lessee is not paid within five days after the day on which it
becomes payable, Lessee will pay on demand, as a late charge, an amount equal to
5% of such unpaid Rent or other amount but only to the extent permitted by
applicable law. All payments provided for herein shall be payable to Lessor at
its address specified above, or at any other place designated by Lessor.

               4. LEASE NOT CANCELABLE; LESSEE'S OBLIGATIONS ABSOLUTE. No Lease
may be canceled or terminated except as expressly provided herein. Lessee's
obligation to pay all Rent due or to become due hereunder shall be absolute and
unconditional and shall not be subject to any delay, reduction, set-off,
defense, counterclaim, or recoupment for any reason whatsoever, including any
failure of the Equipment or any 


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representations by the manufacturer or the vendor thereof. If the Equipment is
unsatisfactory for any reason, Lessee shall make any claim solely against the
manufacturer or the vendor thereof and shall, nevertheless, pay Lessor all Rent
payable hereunder. Notwithstanding anything to the contrary contained herein,
Lessee reserves the right to seek damages against the appropriate party
resulting from any material breach by Lessor (or any assignee or secured party
under Paragraph 20) of any provision hereof.

               5. SELECTION AND USE OF EQUIPMENT. Lessee agrees that it shall be
responsible for the selection and use of, and results obtained from, the
Equipment and any other associated equipment or services.

               6. WARRANTIES. LESSOR MAKES NO REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION,
THE DESIGN OR CONDITION OF THE EQUIPMENT OR ITS MERCHANTABILITY, SUITABILITY,
QUALITY, OR FITNESS FOR A PARTICULAR PURPOSE, AND HEREBY DISCLAIMS ANY SUCH
WARRANTY. EXCEPT AS TO THE ABSENCE OF LESSOR LIENS (AS DEFINED IN PARAGRAPH 20
BELOW), LESSEE SPECIFICALLY WAIVES ALL RIGHTS TO MAKE A CLAIM AGAINST LESSOR FOR
BREACH OF ANY WARRANTY WHATSOEVER. LESSEE LEASES THE EQUIPMENT "AS IS." IN NO
EVENT SHALL LESSOR HAVE ANY LIABILITY, NOR SHALL LESSEE HAVE ANY REMEDY AGAINST
LESSOR, FOR ANY LIABILITY, CLAIM, LOSS, DAMAGE, OR EXPENSE CAUSED DIRECTLY OR
INDIRECTLY BY THE EQUIPMENT OR ANY DEFICIENCY OR DEFECT THEREOF OR THE
OPERATION, MAINTENANCE, OR REPAIR THEREOF OR ANY CONSEQUENTIAL DAMAGES AS THAT
TERM IS USED IN SECTION 2-719(3) OF THE MODEL UNIFORM COMMERCIAL CODE, AS
AMENDED FROM TIME TO TIME ("UCC"). Lessor grants to Lessee, for the sole purpose
of prosecuting a claim, the benefits of any and all warranties made available by
the manufacturer or the vendor of the Equipment to the extent assignable.

               7. DELIVERY. Lessor hereby appoints Lessee as Lessor's agent for
the sole and limited purpose of accepting delivery of the Equipment from each
vendor thereof. Lessor shall not be liable to Lessee for any delay in, or
failure of, delivery of the Equipment.

               8. RENEWAL. So long as no Event of Default or event which, with
the giving of notice, the passage of time, or both, would constitute an Event of
Default, shall have occurred and be continuing, or the Lessee shall not have
exercised its purchase option under Paragraph 9 hereof, each Lease will
automatically renew for a term specified in the applicable Schedule (the
"Renewal Term") on the terms and conditions of this Agreement or as set forth in
such Schedule; provided, however, that Obligations due to be performed by the
Lessee during the Renewal Term shall continue until they have been performed in
full. Continuing indemnification obligations hereunder shall not result in an
extension of the Term or Renewal Term of any Lease.

               9. PURCHASE OPTION. So long as no Event of Default or event
which, with the giving of notice, the passage of time, or both, would constitute
an Event of Default, shall have occurred and be continuing, Lessee may, upon
written notice to Lessor received at least ninety days before the expiration of
a Term, purchase all, but not less than all, the Equipment covered by the
applicable Lease on the date specified therefor in the applicable Schedule
("Purchase Date"). The purchase price for such Equipment shall be its Fair
Market Value as defined in the applicable Schedule determined on an "In-place,
In-use" basis, as mutually agreed by Lessor and Lessee, or, if they cannot
agree, as determined by an independent appraiser selected by Lessor and approved
by Lessee, which approval will not be unreasonably delayed or withheld. Lessee
shall pay the cost of any such appraisal. So long as no Event of Default or
event which, with the giving of notice, the passage of time, or both, would
constitute an Event of Default shall have occurred and be continuing, Lessee
may, upon written notice to Lessor received at least ninety days prior to the
expiration of the Renewal Term, purchase all, but not less than all, the
Equipment covered by the applicable Schedule by the last date of the Renewal
Term (the "Alternative Purchase Date") at a purchase price equal to its then
fair market value on an "In-place, In-use" basis. On the Purchase Date or the
Alternative Purchase Date, as the case may be, for any Equipment, Lessee shall
pay to Lessor the purchase price, together with all sales and other taxes
applicable to the transfer of the Equipment and any other amount payable and
arising hereunder, in immediately available funds, whereupon Lessor shall
transfer to Lessee, without recourse or warranty of any kind (except as to the
absence of Lessor Liens), express or implied, all of Lessor's right, title, and


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interest in and to such Equipment on an "As Is, Where Is" basis.

               10. OWNERSHIP; INSPECTION; MARKING; FINANCING STATEMENTS. Lessee
shall affix to the Equipment any labels supplied by Lessor indicating ownership
of such Equipment. The Equipment is and shall be the sole property of Lessor.
Lessee shall have no right, title, or interest therein, except as lessee under a
Lease. Except as to items of Equipment which are tenant improvements, the
Equipment is and shall at all times be and remain personal property and shall
not become a fixture. Lessee shall obtain and record such instruments and take
such steps as may be necessary to prevent any person from acquiring any rights
in the Equipment by reason of the Equipment being claimed or deemed to be real
property. Upon request by Lessor, Lessee shall obtain and deliver to Lessor
valid and effective waivers, in recordable form, by the owners, landlords, and
mortgagees of the real property upon which the Equipment is located or
certificates of Lessee that it is the owner of such real property or that such
real property is neither leased nor mortgaged. Lessee shall make the Equipment
and its maintenance records available for inspection by Lessor at reasonable
times and upon reasonable notice. Lessee shall execute and deliver to Lessor for
filing any UCC financing statements or similar documents Lessor may reasonably
request.

               11. EQUIPMENT USE. Lessee agrees that the Equipment will be
operated by competent, qualified personnel in connection with Lessee's business
for the purpose for which the Equipment was designed and in accordance with
applicable operating instructions, laws, and government regulations, and that
Lessee shall use all reasonable precautions to prevent loss or damage to the
Equipment from fire and other hazards. Lessee shall procure and maintain in
effect all orders, licenses, certificates, permits, approvals, and consents
required by federal, state, or local laws or by any governmental body, agency,
or authority in connection with the delivery, installation, use, and operation
of the Equipment.

               12. MAINTENANCE. Lessee, at its sole cost and expense, shall keep
the Equipment in a suitable environment as specified by the manufacturer's
guidelines or the equivalent, shall meet all recertification requirements, if
any, and shall maintain the Equipment in its original condition and working
order, ordinary wear and tear excepted. At the reasonable request of Lessor,
Lessee shall furnish all proof of maintenance.

               13. ALTERATION; MODIFICATIONS; PARTS. Except with respect to
alterations or modifications which enhance the value of the Equipment, Lessee
may alter or modify the Equipment only with the prior written consent of Lessor.
Except with respect to alterations or modifications which enhance the value of
the Equipment, any alteration shall be removed and the Equipment restored to its
normal, unaltered condition at Lessee's expense (without damaging the
Equipment's originally intended function or its value) prior to its return to
Lessor. Any part installed in connection with warranty or maintenance service or
which cannot be removed in accordance with the preceding sentence shall be the
property of Lessor.

               14. RETURN OF EQUIPMENT. Except for Equipment that has suffered a
Casualty Loss (as defined in Paragraph 15 below) and is not required to be
repaired pursuant to Paragraph 15 below or Equipment purchased by Lessee
pursuant to Paragraph 9 above, upon the expiration of the Renewal Term of a
Lease, or upon demand by Lessor pursuant to Paragraph 22 below, Lessee shall
contact Lessor for shipping instructions and, at Lessee's own risk, immediately
return the Equipment, freight prepaid, to a location in the continental United
States specified by Lessor. At the time of such return to Lessor, the Equipment
shall (i) be in the operating order, repair, and condition as required by or
specified in the original specifications and warranties of each manufacturer and
vendor thereof, ordinary wear and tear excepted, (ii) meet all recertification
requirements, and (iii) be capable of being promptly assembled and operated by a
third party purchaser or third party lessee without further repair, replacement,
alterations, or improvements, and in accordance and compliance with any and all
statutes, laws, ordinances, rules, and regulations of any governmental authority
or any political subdivision thereof applicable to the use and operation of the
Equipment. Except as otherwise provided under Paragraph 9 hereof, at least one
hundred twenty days before the expiration of the Renewal Term, Lessee shall give
Lessor notice of its intent to return the Equipment at the end of such Renewal
Term. During the one hundred twenty-day period prior to the end of a Term or the
Renewal Term, Lessor and its prospective purchasers or lessees shall have, upon
not less than two business days' prior notice to Lessee and during normal
business hours, or at any time and without prior notice upon the occurrence and
continuance of an Event of Default, the right of access to the premises on which
the Equipment 


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is located to inspect the Equipment, and Lessee shall cooperate in all other
respects with Lessor's remarketing of the Equipment. The provisions of this
Paragraph 14 are of the essence of the Lease, and upon application to any court
of equity having jurisdiction in the premises, Lessor shall be entitled to a
decree against Lessee requiring specific performance of the covenants of Lessee
set forth in this Paragraph 14. If Lessee fails to return the Equipment when
required, the terms and conditions of the Lease shall continue to be applicable
and Lessee shall continue to pay Rent until the Equipment is received by Lessor.

               15. CASUALTY INSURANCE; LOSS OR DAMAGE. Lessee will maintain, at
its own expense, liability and property damage insurance relating to the
Equipment, insuring against such risks as are customarily insured against on the
type of equipment leased hereunder by businesses in which Lessee is engaged in
such amounts, in such form, and with insurers satisfactory to Lessor; provided,
however, that the amount of insurance against damage or loss shall not be less
than the greater of (a) the replacement value of the Equipment and (b) the
stipulated loss value of the Equipment specified in the applicable Schedule
("Stipulated Loss Value"). Each liability insurance policy shall provide
coverage (including, without limitation, personal injury coverage) of not less
than $1,000,000 for each occurrence, and shall name Lessor as an additional
insured; and each property damage policy shall name Lessor as sole loss payee
and all policies shall contain a clause requiring the insurer to give Lessor at
least thirty days' prior written notice of any alteration in the terms or
cancellation of the policy. Lessee shall furnish to Lessor a copy of each
insurance policy (with endorsements) or other evidence satisfactory to Lessor
that the required insurance coverage is in effect; provided, however, Lessor
shall have no duty to ascertain the existence of or to examine the insurance
policies to advise Lessee if the insurance coverage does not comply with the
requirements of this Paragraph. If Lessee fails to insure the Equipment as
required, Lessor shall have the right but not the obligation to obtain such
insurance, and the cost of the insurance shall be for the account of Lessee due
as part of the next due Rent. Lessee consents to Lessor's release, upon its
failure to obtain appropriate insurance coverage, of any and all information
necessary to obtain insurance with respect to the Equipment or Lessor's interest
therein.

               Until the Equipment is returned to and received by Lessor as
provided in Paragraph 14 above, Lessee shall bear the entire risk of theft or
destruction of, or damage to, the Equipment including, without limitation, any
condemnation, seizure, or requisition of title or use ("Casualty Loss"). No
Casualty Loss shall relieve Lessee from its obligations to pay Rent except as
provided in clause (b) below. When any Casualty Loss occurs, Lessee shall
immediately notify Lessor and, at the option of Lessor, shall promptly (a) place
such Equipment in good repair and working order; or (b) pay Lessor an amount
equal to the Stipulated Loss Value of such Equipment and all other amounts
(excluding Rent) payable by Lessee hereunder, together with a late charge on
such amounts at a rate per annum equal to the rate imputed in the Rent payments
hereunder (as reasonably determined by Lessor) from the date of the Casualty
Loss through the date of payment of such amounts, whereupon Lessor shall
transfer to Lessee, without recourse or warranty (express or implied) (except as
to the absence of Lessor Liens), all of Lessor's interest, if any, in and to
such Equipment on an "AS IS, WHERE IS" basis. The proceeds of any insurance
payable with respect to the Equipment shall be applied, at the option of Lessor,
either towards (i) repair of the Equipment or (ii) payment of any of Lessee's
obligations hereunder. Lessee hereby appoints Lessor as Lessee's
attorney-in-fact during continuance of an Event of Default to make claim for,
receive payment of, and execute and endorse all documents, checks or drafts
issued with respect to any Casualty Loss under any insurance policy relating to
the Equipment.

               16. TAXES. Lessee shall pay when due, and indemnify and hold
Lessor harmless from, all sales, use, excise, and other taxes, charges, and fees
(including, without limitation, income, franchise, business and occupation,
gross receipts, licensing, registration, titling, personal property, stamp and
interest equalization taxes, levies, imposts, duties, charges, or withholdings
of any nature), other than taxes that are being diligently contested in good
faith by the Lessee by appropriate proceedings promptly instituted and for which
an adequate reserve is being maintained by the Lessee in accordance with
Generally Accepted Accounting Principles, and any fines, penalties, or interest
thereon, imposed or levied by any governmental body, agency, or tax authority
upon or in connection with the Equipment, its purchase, ownership, delivery,
leasing, possession, use, or relocation of the Equipment or otherwise in
connection with the transactions contemplated by each Lease or the Rent
thereunder, excluding taxes on or measured by the net income of Lessor and taxes
resulting from any voluntary transfer by Lessor of any interest in the Equipment
or any part thereof or any interest under the Lease, or from any involuntary


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transfer by Lessor of any of the foregoing interests in connection with any
bankruptcy or other proceeding for the relief of debtors in which Lessor is the
debtor or any foreclosure by a creditor of Lessor (unless such foreclosure is
the result of an Event of Default hereunder). Upon request, Lessee will provide
proof of payment. Unless Lessor elects otherwise, Lessee will pay all property
taxes on the Equipment. Lessee shall timely prepare and file all reports and
returns which are required to be made with respect to any obligation of Lessee
under this Paragraph 16. Lessee shall, to the extent permitted by law, cause all
billings of such fees, taxes, levies, imposts, duties, withholdings, and
governmental charges to be made to Lessor in care of Lessee. Upon request,
Lessee will provide Lessor with copies of all such billings.

               17. LESSOR'S PAYMENT. If Lessee fails to perform its obligations
under Paragraph 15 or 16 above, or Paragraph 23 below, within fifteen (15) days
after Lessor's request to Lessee to do so, Lessor shall have the right to
substitute performance, in which case Lessee shall immediately reimburse Lessor
therefor.

               18. GENERAL INDEMNITY. Each Lease is a net lease. Therefore,
Lessee shall indemnify Lessor and its successors and assigns against, and hold
Lessor and its successors and assigns harmless from, any and all claims,
actions, damages, obligations, liabilities, and all costs and expenses,
including, without limitation, legal fees incurred by Lessor or its successors
and assigns arising out of each Lease including, without limitation, the
purchase, ownership, delivery, lease, possession, maintenance, condition, use,
or return of the Equipment, or arising by operation of law, except that Lessee
shall not be liable for any claims, actions, damages, obligations, and costs and
expenses determined by a non-appealable, final order of a court of competent
jurisdiction to have occurred as a result of the gross negligence or willful
misconduct of Lessor or its successors and assigns. Lessee agrees that upon
written notice by Lessor of the assertion of any claim, action, damage,
obligation, liability, or lien, Lessee shall assume full responsibility for the
defense thereof, provided that Lessor's failure to give such notice shall not
limit or otherwise affect its rights hereunder. Any payment pursuant to this
Paragraph (except for any payment of Rent) shall be of such amount as shall be
necessary so that, after payment of any taxes required to be paid thereon by
Lessor, the balance will equal the amount due hereunder. The provisions of this
Paragraph with regard to matters arising during a Lease shall survive the
expiration or termination of such Lease.

               19. ASSIGNMENT BY LESSEE. Lessee shall not, without the prior
written consent of Lessor, (a) assign, transfer, pledge, or otherwise dispose of
any Lease or Equipment, or any interest therein; (b) sublease or lend any
Equipment or permit it to be used by anyone other than Lessee and its employees;
or (c) move any Equipment from the location specified for it in the applicable
Schedule, except that Lessee may move Equipment to another location within the
United States provided that Lessee has delivered to Lessor (A) prior written
notice thereof and (B) duly executed financing statements and other agreements
and instruments (all in form and substance satisfactory to Lessor) necessary or,
in the opinion of the Lessor, desirable to protect Lessor's interest in such
Equipment. Notwithstanding anything to the contrary in the immediately preceding
sentence, Lessee may keep any Equipment consisting of motor vehicles or rolling
stock at any location in the United States.

               20. ASSIGNMENT BY LESSOR; LESSOR LIENS. Lessor may assign its
interest or grant a security interest in any Lease and the Equipment
individually or together, in whole or in part. If Lessee is given written notice
of any such assignment, it shall immediately make all payments of Rent and other
amounts hereunder directly to such assignee. Each such assignee shall have all
of the rights of Lessor under each Lease assigned to it. Lessee shall not assert
against any such assignee any set-off, defense, or counterclaim that Lessee may
have against Lessor or any other person. The term "Lessor Liens" shall mean (a)
liens resulting from (i) an affirmative act of Lessor to create such Liens and
(ii) that are not Permitted Liens, or consented to by Lessee, and (b) liens
resulting from claims against Lessor not related to the transactions
contemplated hereby (other than such liens which are either not delinquent or
which are being contested in good faith by appropriate proceedings that suspend
the collection of any amounts due or which have been adequately bonded or with
respect to which a stay of execution has been obtained pending an appeal or
proceeding for review).

               21. DEFAULT; NO WAIVER. Lessee or any guarantor of any or all of
the obligations of Lessee hereunder (together with Lessee, the "Lease Parties")
shall be in default under each Lease upon the occurrence of any of the following
events (each, an "Event of Default"): (a) Lessee fails to pay within five days
of when due any amount required to be paid by Lessee under or in connection with
any Lease; (b) any of the Lease 


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Parties fails in any material respect to perform any other provision under or in
connection with a Lease or violates in any material respect any of the covenants
or agreements of such Lease Party under or in connection with a Lease, and such
failure or violation continues for 10 Business Days after the sooner of receipt
of notice from Lessor or Lessee's actual knowledge of such failure or violation;
(c) any representation made or financial information delivered or furnished by
any of the Lease Parties under or in connection with a Lease shall prove to have
been inaccurate in any material respect when made; (d) any of the Lease Parties
makes an assignment for the benefit of creditors, whether voluntary or
involuntary, or consents to the appointment of a trustee or receiver, or if
either shall be appointed for any of the Lease Parties or for a substantial part
of its property without its consent and, in the case of any such involuntary
proceeding, such proceeding remains undismissed or unstayed for forty-five days
following the commencement thereof; (e) any petition or proceeding is filed by
or against any of the Lease Parties under any Federal or State bankruptcy or
insolvency code or similar law and, in the case of any such involuntary petition
or proceeding, such petition or proceeding remains undismissed or unstayed for
forty-five days following the filing or commencement thereof, or any of the
Lease Parties takes any action authorizing any such petition or proceeding; (f)
any of the Lease Parties fails to pay when due any indebtedness for borrowed
money or under conditional sales or installment sales contracts or similar
agreements, leases, or obligations evidenced by bonds, debentures, notes, or
other similar agreements or instruments to any creditor (including Lessor under
any other agreement, including but not limited to a certain Security Agreement
and Promissory Note, each of even date herewith) for an amount in excess of
$25,000 after any and all applicable cure periods therefor shall have elapsed;
(g) any judgment shall be rendered against any of the Lease Parties which shall
remain unpaid or unstayed for a period of sixty days; (h) any of the Lease
Parties shall dissolve, liquidate, wind up or cease its business, sell or
otherwise dispose of all or substantially all of its assets, or make any
material change in its lines of business; (i) any of the Lease Parties shall
amend or modify its name, unless such Lease Party delivers to Lessor, thirty
days prior to any such proposed amendment or modification, written notice of
such amendment or modification and within ten days before such amendment or
modification delivers executed financing statements (in form and substance
satisfactory to the Lessor); (j) any of the Lease Parties shall merge or
consolidate with any other entity or make any material change in its capital
structure, in each case without Lessor's prior written consent, which shall not
be unreasonably withheld; (k) any of the Lease Parties shall suffer any loss or
suspension of any material license, permit, or other right or asset necessary to
the conduct of its business, fail generally to pay its debts as they mature, or
call a meeting for purposes of compromising its debts; (l) any of the Lease
Parties shall deny or disaffirm its obligations hereunder or under any of the
documents delivered in connection herewith; or (m) there is a change, which
change results from a single transaction or series of related transactions, but
not from the sale of newly issued securities to investors, in more than 40% of
the ownership of any equity interests of any of the Lease Parties on the date
hereof or more than 40% of such interests become subject to any contractual,
judicial or statutory lien, charge, security interest, or encumbrance

               22. REMEDIES. Upon the occurrence and continuation of an Event of
Default, Lessor shall have the right, in its sole discretion, to exercise any
one or more of the following remedies: (a) terminate each Lease; (b) declare any
and all Rent and other amounts then due and any and all Rent and other amounts
to become due under each Lease (collectively, the "Lease Obligations")
immediately due and payable; (c) take possession of any or all items of
Equipment, wherever located, without demand, notice, court order, or other
process of law, and without liability for entry to Lessee's premises, for damage
to Lessee's property, or otherwise; (d) demand that Lessee immediately return
any or all Equipment to Lessor in accordance with Paragraph 14 above, and, for
each day that Lessee shall fail to return any item of Equipment, Lessor may
demand an amount equal to the Rent payable for such Equipment in accordance with
Paragraph 14 above; (e) lease, sell, or otherwise dispose of the Equipment in a
commercially reasonable manner, with or without notice and on public or private
bid; (f) recover the following amounts from the Lessee (as damages, including
reimbursement of costs and expenses, liquidated for all purposes and not as a
penalty): (i) all costs and expenses of Lessor reimbursable to it hereunder,
including, without limitation, expenses of disposition of the Equipment, legal
fees, and all other amounts specified in Paragraph 23 below; (ii) an amount
equal to the sum of (A) any accrued and unpaid Rent through the later of (1) the
date of the applicable default, (2) the date that Lessor has obtained possession
of the Equipment, or (3) such other date as Lessee has made an effective tender
of possession of the Equipment to Lessor (the "Default Date") and (B) if Lessor
resells or re-lets the Equipment, Rent at the periodic rate provided for in each
Lease for the additional period that it takes Lessor to resell or re-let all of
the Equipment; (iii) the present value of all future Rent reserved in the Leases
and contracted to be paid over the unexpired Term of the Leases discounted at
five percent compound interest; 


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<PAGE>   7
(iv) the reversionary value of the Equipment as of the expiration of the Term of
the applicable Lease as set forth on the applicable Schedule; and (v) any
indebtedness for Lessee's indemnity under Paragraph 18 above, plus a late charge
at the rate specified in Paragraph 3 above, less the amount received by Lessor,
if any, upon sale or re-let of the Equipment; and (g) exercise any other right
or remedy to recover damages or enforce the terms of the Leases. Upon the
occurrence and continuance of an Event of Default or an event which with the
giving of notice or the passage of time, or both, would result in an Event of
Default, Lessor shall have the right, whether or not Lessor has made any demand
or the obligations of Lessee hereunder have matured, to appropriate and apply to
the payment of the obligations of Lessee hereunder all security deposits and
other deposits (general or special, time or demand, provisional or final) now or
hereafter held by and other indebtedness or property now or hereafter owing by
Lessor to Lessee. Lessor may pursue any other rights or remedies available at
law or in equity, including, without limitation, rights or remedies seeking
damages, specific performance, and injunctive relief. Any failure of Lessor to
require strict performance by Lessee, or any waiver by Lessor of any provision
hereunder or under any Schedule, shall not be construed as a consent or waiver
of any other breach of the same or of any other provision. Any amendment or
waiver of any provision hereof or under any Schedule or consent to any departure
by Lessee herefrom or therefrom shall be in writing and signed by Lessor.

               No right or remedy is exclusive of any other provided herein or
permitted by law or equity. All such rights and remedies shall be cumulative and
may be enforced concurrently or individually from time to time.

               23. LESSOR'S EXPENSE. Lessee shall pay Lessor on demand all costs
and expenses (including reasonable legal fees and expenses) incurred in
connection with the preparation, execution and delivery of this Agreement and
any other agreements and transactions contemplated hereby and all costs and
expenses in protecting and enforcing Lessor's rights and interests in each Lease
and the equipment, including, without limitation, legal, collection, and
remarketing fees and expenses incured by Lessor in enforcing the terms,
conditions, or provisions of each Lease or upon the occurrence and continuation
of an Event of Default.

               24. LESSEE'S WAIVERS. To the extent permitted by applicable law,
Lessee hereby waives any and all rights and remedies conferred upon a lessee by
Sections 2A-508 through 2A-522 of the UCC. To the extent permitted by applicable
law, Lessee also hereby waives any rights now or hereafter conferred by statute
or otherwise which may require Lessor to sell, lease, or otherwise use any
Equipment in mitigation of Lessor's damages as set forth in Paragraph 22 above
or which may otherwise limit or modify any of Lessor's rights or remedies under
Paragraph 22. Any action by Lessee against Lessor for any default by Lessor
under any Lease shall be commenced within one year after any such cause of
action accrues.

               25. NOTICES; ADMINISTRATION. Except as otherwise provided herein,
all notices, approvals, consents, correspondence, or other communications
required or desired to be given hereunder shall be given in writing and shall be
delivered by overnight courier, hand delivery, or certified or registered mail,
postage prepaid, if to Lessor, then to Transamerica Technology Finance Division,
76 Batterson Park Road, Farmington, Connecticut 06032, Attention: Assistant Vice
President, Lease Administration, with a copy to Lessor at Riverway II, West
Office Tower, 9399 West Higgins Road, Rosemont, Illinois 60018, Attention: Legal
Department, if to Lessee, then to Progenitor, Inc., 4040 Campbell Avenue, ,
Menlo Park, California 94025, Attention: Chief Financial Officer or such other
address as shall be designated by Lessee or Lessor to the other party. All such
notices and correspondence shall be effective when received.

               26. REPRESENTATIONS. Lessee represents and warrants to Lessor
that (a) Lessee is duly organized, validly existing, and in good standing under
the laws of the State of its incorporation; (b) the execution, delivery, and
performance by Lessee of this Agreement are within Lessee's powers, have been
duly authorized by all necessary action, and do not and will not contravene (i)
Lessee's organizational documents or (ii) any law, regulation, rule, or
contractual restriction binding on or affecting Lessee; (c) no authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution, delivery, and
performance by Lessee of this Agreement; (d) each Lease constitutes the legal,
valid, and binding obligations of Lessee enforceable against Lessee in
accordance with its terms; (e) the cost of each item of Equipment does not
exceed the fair and usual price for such type of equipment purchased in like
quantity and reflects all discounts, rebates, and allowances for the Equipment
(including, without limitation, discounts for 


                                       7


<PAGE>   8
advertising, prompt payment, testing, or other services) given to the Lessee by
the manufacturer, supplier, or any other person; and (f) all information
supplied by Lessee to Lessor in connection herewith is correct and does not omit
any material statement necessary to insure that the information supplied is not
misleading.

               27. FURTHER ASSURANCES. Lessee, upon the request of Lessor, will
execute, acknowledge, record, or file, as the case may be, such further
documents and do such further acts as may be reasonably necessary, desirable, or
proper to carry out more effectively the purposes of this Agreement as Lessor
directs. Lessee hereby appoints Lessor as its attorney-in-fact to execute on
behalf of Lessee and authorizes Lessor to file without Lessee's signature any
UCC financing statements and amendments Lessor deems advisable.

               28. FINANCIAL STATEMENTS. Lessee shall deliver to Lessor: (a) as
soon as available, but not later than 120 days after the end of each fiscal year
of Lessee and its consolidated subsidiaries, the consolidated balance sheet,
income statement, and statements of cash flows and shareholders equity for
Lessee and its consolidated subsidiaries (the "Financial Statements") for such
year, reported on by independent certified public accountants without an adverse
qualification; and (b) as soon as available, but not later than 60 days after
the end of each of the first three fiscal quarters in any fiscal year of Lessee
and its consolidated subsidiaries, the Financial Statements for such fiscal
quarter, together with a certification duly executed by a responsible officer of
Lessee that such Financial Statements have been prepared in accordance with
generally accepted accounting principles and are fairly stated in all material
respects (subject to normal year-end audit adjustments). Lessee shall also
deliver to Lessor as soon as available copies of all press releases and other
similar communications issued by Lessee.

               29. CONSENT TO JURISDICTION. Lessee irrevocably submits to the
jurisdiction of any Illinois state or federal court sitting in Illinois for any
action or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby, and Lessee irrevocably agrees that all claims
in respect of any such action or proceeding may be heard and determined in such
Illinois state or federal court.

               30. WAIVER OF JURY TRIAL. LESSEE AND LESSOR IRREVOCABLY WAIVE ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

               31. FINANCE LEASE. Lessee and Lessor agree that each Lease is a
"Finance Lease" as defined by Section 2A-103(g) of the UCC. Lessee acknowledges
that Lessee has reviewed and approved each written Supply Contract (as defined
by UCC 2A-103(y)) covering Equipment purchased from each "Supplier" (as defined
by UCC 2A-103(x)) thereof.

               32. NO AGENCY. Lessee acknowledges and agrees that neither the
manufacturer or supplier, nor any salesman, representative, or other agent of
the manufacturer or supplier, is an agent of Lessor. No salesman,
representative, or agent of the manufacturer or supplier is authorized to waive
or alter any term or condition of this Agreement or any Schedule and no
representation as to the Equipment or any other matter by the manufacturer or
supplier shall in any way affect Lessee's duty to pay Rent and perform its other
obligations as set forth in this Agreement or any Schedule.

               33. GOVERNING LAW; SEVERABILITY. EACH LEASE SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF. IF ANY PROVISION SHALL BE HELD TO BE INVALID OR
UNENFORCEABLE, THE VALIDITY AND ENFORCEABILITY OF THE REMAINING PROVISIONS SHALL
NOT IN ANY WAY BE AFFECTED OR IMPAIRED.

LESSEE ACKNOWLEDGES THAT LESSEE HAS READ THIS AGREEMENT AND THE SCHEDULE HERETO,
UNDERSTANDS THEM, AND AGREES TO BE BOUND BY THEIR TERMS AND CONDITIONS. FURTHER,
LESSEE AND LESSOR AGREE THAT THIS AGREEMENT, THE SCHEDULES DELIVERED IN
CONNECTION HEREWITH FROM TIME TO TIME, AND THE COMMITMENT LETTER ARE THE
COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE PARTIES,
SUPERSEDING ALL PROPOSALS OR PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER


                                       8


<PAGE>   9
COMMUNICATIONS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF. SHOULD
THERE EXIST ANY INCONSISTENCY BETWEEN THE TERMS OF THE COMMITMENT LETTER AND
THIS AGREEMENT, THE TERMS OF THIS AGREEMENT SHALL PREVAIL.

               IN WITNESS WHEREOF, the parties hereto have executed or caused
this Agreement to be duly executed by their duly authorized officers as of the
date first written above.



                               PROGENITOR, INC.


                               By:  /s/ Mark Bagnall
                                    -------------------------------
                                    Name: Mark Bagnall
                                    Title:     Vice President & Chief
                                    Financial Officer
                                    Federal Tax ID:

                               TRANSAMERICA BUSINESS CREDIT CORPORATION



                               By: /s/ Gary P. Moro
                                    -------------------------------
                                    Name: Gary P. Moro
                                    Title: Vice President


Form 1


                                       9


<PAGE>   10
                       SCHEDULE TO MASTER LEASE AGREEMENT

                             Dated as of May 6, 1998

                                 Schedule No. 1

LESSOR NAME & MAILING ADDRESS                 LESSEE NAME & MAILING ADDRESS
Transamerica Business Credit Corporation      Progenitor, Inc.
Riverway II                                   4040 Campbell Avenue
West Office Tower                             Menlo Park, California  94025
9399 West Higgins Road
Rosemont, Illinois  60018

Equipment Location (if different than Lessee's address above):

This Schedule covers the following described equipment ("Equipment"):

             See Exhibit II attached hereto and made a part hereof.

The Equipment is hereby leased pursuant to the provisions of the Master Lease
Agreement between the undersigned Lessee and Lessor dated May 1, 1998 (the
"Master Lease"), the terms of which are incorporated herein by reference
thereto, plus the following additional terms, provisions, and modifications. The
Lessor reserves the right to adjust the monthly payments in accordance with the
Commitment Letter dated March 17, 1998, if the Lessor has not received this
Schedule and an Acceptance and Delivery Certificate executed by the Lessee
within five business days from the date first set forth above.


<TABLE>
<S>                                                         <C>                 <C>            
1.     Term (Number of Months)                                                  48 months

2.     Equipment Cost                                                           $889,987.77

3.     Commencement Date                                                        May 13, 1998

4.     Rate Factor                                                              2.47937% of Equipment Cost

5.     Total Rents                                          $ 1,059,172.80
       Total sales/use tax                                  $     39,197.76     $  1,098,370.56

6.     Advance Rents (first and last)                       $     44,132.20
       Sales/use tax for advance rent                       $       1,633.24    $     45,765.44

7.     Monthly rental payments                              $     22,066.10
       Monthly sales/use tax                                $         816.62    $     22,882.72

       and the second such rental payment
       will be due on                                                           July 1, 1998
       and subsequent rental payments will
        be due on the same day of each month thereafter

8.     Security Deposit                                                         N/A

9.     In addition to the monthly rental
       payments provided for herein, Lessee shall
       pay to Lessor, as interim rent, payable on
       the commencement date specified above, an
       amount equal to 1/30th of the monthly rental
       payment (including monthly sales/use tax)
       multiplied by the number of days from and
       including the commencement date through the
       end of the same calendar month.                                          $    14,492.39
</TABLE>


                                       10


<PAGE>   11

<TABLE>
<CAPTION>
                                                                                   TOTAL                           INTERIM
EQUIPMENT                        EQUIPMENT        MONTHLY          SALES          MONTHLY         INTERIM           RENT +
TYPE                                COST           RENTAL          TAX 8.25%      PAYMENT           RENT          SALES TAX
                               ------------    ------------     ------------    ------------    ------------     ------------
<S>                            <C>             <C>              <C>             <C>             <C>              <C>
Computer Equipment (E)         $ 287,485.64    $   7,127.84                     $   7,127.84    $   4,514.30     $   4,514.30
Computer Equipment (T)         $ 289,669.70    $   7,181.99     $     592.51    $   7,774.50    $   4,548.59     $   4,923.85
Laboratory Equipment (E)       $  24,339.56    $     603.47                     $     603.47    $     382.20     $     382.20
Laboratory Equipment (T)       $  91,676.03    $   2,272.99     $     187.52    $   2,460.51    $   1,439.56     $   1,558.32
Leasehold Improvements (E)     $ 178,928.47    $   4,436.30                     $   4,436.30    $   2,809.66
Office Furniture (T)           $  17,888.37    $     443.51     $      36.59    $     480.10    $     280.89     $     304.06
                               ------------    ------------     ------------    ------------    ------------     ------------
        TOTAL                  $ 889,987.77    $  22,066.10     $     816.62    $  22,882.72    $  13,975.20     $  14,492.39
                               ============    ============     ============    ============    ============     ============
</TABLE>


Renewal terms:

In the event the Lease does not exercise the Purchase Option described below,
the Lease shall automatically renew for a term of 12 months with Monthly Rental
equal to 1.5% of the original Equipment Cost payable in monthly in advance. At
the expiration of the renewal period, the Lessee shall have the option to
purchase all (but not less than all) the Equipment for its then current fair
market value, plus applicable and other taxes. Fair market value will not
include any non-severable modifications to the Equipment made by Lessee.

Lessee hereby irrevocably authorizes Lessor to insert in this Schedule the
Commencement Date and the due date of the first rental payment.

Except as expressly provided or modified hereby, all the terms and provisions of
the Master Lease Agreement shall remain in full force and effect.

The Lessee shall have the option to purchase all (but not less than all) the
Equipment at the expiration of the term of the lease for the then Fair Market
Value of the Equipment, plus applicable sales and other taxes. It is agreed that
the Fair Market Value will be not less than 10% nor more than 20% of the
Equipment Cost. Fair Market Value will not include any non-severable
modifications to the Equipment made by Lessee. The Purchase Date shall be May
31, 2002.

The Stipulated Loss Value of any items of Equipment shall be an amount equal to
the present value of all future Rent discounted at a rate of 5% per annum plus
the Reversionary Value.

The Reversionary Value of any item of Equipment shall be 20% of Equipment Cost.


TRANSAMERICA BUSINESS CREDIT              PROGENITOR, INC.
 CORPORATION                              (Lessee)
(Lessor)

By: /s/ Gary P. Moro                      By: /s/ Mark Bagnall
  -------------------------------            -------------------------------
Title: Vice President                     Title: VP & CFO



Form 2


                                       11