<PAGE>

                                      LEASE

                                     BETWEEN

                     2929 SEVENTH STREET, L.L.C. (LANDLORD)

                                       AND

                    DYNAVAX TECHNOLOGIES CORPORATION (TENANT)

                               2929 SEVENTH STREET
                              BERKELEY, CALIFORNIA

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<TABLE>
<S>                                                                                                                  <C>
ARTICLE 1             BASIC LEASE PROVISIONS....................................................................      1

         1.1      BASIC LEASE PROVISIONS........................................................................      1

         1.2      ENUMERATION OF EXHIBITS, RIDER AND ADDENDUM...................................................      3

         1.3      DEFINITIONS...................................................................................      3

ARTICLE 2             PREMISES, TERM, FAILURE TO GIVE POSSESSION, AND PARKING...................................      8

         2.1      LEASE OF PREMISES.............................................................................      8

         2.2      TERM..........................................................................................      8

         2.3      FAILURE TO GIVE POSSESSION....................................................................      9

         2.4      CONDITION OF PREMISES.........................................................................      9

         2.5      PARKING.......................................................................................     10

ARTICLE 3             RENT......................................................................................     10

ARTICLE 4             RENT ADJUSTMENTS AND PAYMENTS.............................................................     11

         4.1      RENT ADJUSTMENTS..............................................................................     11

         4.2      STATEMENT OF LANDLORD.........................................................................     11

         4.3      BOOKS AND RECORDS.............................................................................     12

         4.4      TENANT OR LEASE SPECIFIC TAXES................................................................     12

ARTICLE 5             SECURITY DEPOSIT..........................................................................     13

ARTICLE 6             SERVICES..................................................................................     14

         6.1      LANDLORD'S GENERAL SERVICES...................................................................     14

         6.2      UTILITY SERVICES..............................................................................     15

         6.3      ADDITIONAL SERVICES...........................................................................     15

         6.4      TELEPHONE SERVICES............................................................................     15

         6.5      DELAYS IN FURNISHING SERVICES.................................................................     16

         6.6      CHOICE OF SERVICE PROVIDER....................................................................     17

         6.7      SIGNAGE.......................................................................................     17

ARTICLE 7             POSSESSION, USE AND CONDITION OF PREMISES.................................................     18

         7.1      POSSESSION AND USE OF PREMISES................................................................     18

         7.2      LANDLORD ACCESS TO PREMISES; APPROVALS........................................................     20

         7.3      QUIET ENJOYMENT...............................................................................     21

ARTICLE 8             MAINTENANCE...............................................................................     21

         8.1      LANDLORD'S MAINTENANCE........................................................................     21

         8.2      TENANT'S MAINTENANCE..........................................................................     22
</TABLE>

                                       i

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<TABLE>
<S>                                                                                                                  <C>
ARTICLE 9             ALTERATIONS AND IMPROVEMENTS..............................................................     22

         9.1      TENANT ALTERATIONS............................................................................     22

         9.2      LIENS.........................................................................................     24

ARTICLE 10            ASSIGNMENT AND SUBLETTING.................................................................     24

        10.1      ASSIGNMENT AND SUBLETTING.....................................................................     24

        10.2      RECAPTURE.....................................................................................     26

        10.3      EXCESS RENT...................................................................................     27

        10.4      TENANT LIABILITY..............................................................................     27

        10.5      ASSUMPTION AND ATTORNMENT.....................................................................     27

ARTICLE 11            DEFAULT AND REMEDIES......................................................................     28

        11.1      EVENTS OF DEFAULT.............................................................................     28

        11.2      LANDLORD'S REMEDIES...........................................................................     29

        11.3      ATTORNEY'S FEES...............................................................................     31

        11.4      BANKRUPTCY....................................................................................     32

        11.5      LANDLORD'S DEFAULT............................................................................     33

ARTICLE 12            SURRENDER OF PREMISES.....................................................................     33

        12.1      IN GENERAL....................................................................................     33

        12.2      LANDLORD'S RIGHTS.............................................................................     34

ARTICLE 13            HOLDING OVER..............................................................................     34

ARTICLE 14            DAMAGE BY FIRE OR OTHER CASUALTY..........................................................     34

        14.1      SUBSTANTIAL UNTENANTABILITY...................................................................     34

        14.2      INSUBSTANTIAL UNTENANTABILITY.................................................................     35

        14.3      RENT ABATEMENT................................................................................     36

        14.4      WAIVER OF STATUTORY REMEDIES..................................................................     36

ARTICLE 15            EMINENT DOMAIN............................................................................     36

        15.1      TAKING OF WHOLE OR SUBSTANTIAL PART...........................................................     36

        15.2      TAKING OF PART................................................................................     36

        15.3      COMPENSATION..................................................................................     37

ARTICLE 16            INSURANCE.................................................................................     37

        16.1      TENANT'S INSURANCE............................................................................     37

        16.2      FORM OF POLICIES..............................................................................     38

        16.3      LANDLORD'S INSURANCE..........................................................................     38

        16.4      WAIVER OF SUBROGATION.........................................................................     38
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                                                                  <C>
        16.5      NOTICE OF CASUALTY............................................................................     40

ARTICLE 17            WAIVER OF CLAIMS AND INDEMNITY............................................................     40

        17.1      WAIVER OF CLAIMS..............................................................................     40

        17.2      INDEMNITY BY TENANT...........................................................................     40

        17.3      INDEMNITY BY Landlord.........................................................................     41

ARTICLE 18            RULES AND REGULATIONS.....................................................................     41

        18.1      RULES.........................................................................................     41

        18.2      ENFORCEMENT...................................................................................     41

ARTICLE 19            LANDLORD'S RESERVED RIGHTS................................................................     41

ARTICLE 20            ESTOPPEL CERTIFICATE......................................................................     42

        20.1      IN GENERAL....................................................................................     42

        20.2      ENFORCEMENT...................................................................................     42

ARTICLE 21            RELOCATION OF TENANT......................................................................     43

ARTICLE 22            REAL ESTATE BROKERS.......................................................................     43

ARTICLE 23            MORTGAGEE PROTECTION......................................................................     43

        23.1      SUBORDINATION AND ATTORNMENT..................................................................     43

        23.2      MORTGAGEE PROTECTION..........................................................................     44

ARTICLE 24            NOTICES...................................................................................     44

ARTICLE 25            MISCELLANEOUS.............................................................................     45

        25.1      LATE CHARGES..................................................................................     45

        25.2      NO JURY TRIAL; VENUE; JURISDICTION............................................................     46

        25.3      OPTION........................................................................................     46

        25.4      AUTHORITY.....................................................................................     46

        25.5      ENTIRE AGREEMENT..............................................................................     46

        25.6      MODIFICATION OF LEASE FOR BENEFIT OF MORTGAGEE................................................     47

        25.7      EXCULPATION...................................................................................     47

        25.8      ACCORD AND SATISFACTION.......................................................................     47

        25.9      LANDLORD'S OBLIGATIONS ON SALE OF BUILDING....................................................     47

       25.10      BINDING EFFECT................................................................................     48

       25.11      CAPTIONS......................................................................................     48

       25.12      TIME; APPLICABLE LAW; CONSTRUCTION............................................................     48

       25.13      ABANDONMENT...................................................................................     48

       25.14      LANDLORD'S RIGHT TO PERFORM TENANT'S DUTIES...................................................     48
</TABLE>

                                      iii

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<TABLE>
<S>                                                                                                                  <C>
       25.15      SECURITY SYSTEM...............................................................................     49

       25.16      NO LIGHT, AIR OR VIEW EASEMENTS...............................................................     49

       25.17      CONSENTS......................................................................................     49

       25.18      RECORDATION...................................................................................     49

       25.19      SURVIVAL......................................................................................     49

       25.20      RIDERS........................................................................................     49
</TABLE>

                                       iv

<PAGE>

                                     LEASE

                                   ARTICLE 1

                             BASIC LEASE PROVISIONS

1.1      BASIC LEASE PROVISIONS

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

         (1)      BUILDING ADDRESS:

                  2929 Seventh Street
                  Berkeley, California  94710

         (2)      LANDLORD AND ADDRESS:

                  2929 Seventh Street, L.L.C.
                  1120 Nye Street, Suite 400
                  San Rafael, California 94901

                  Notices to Landlord shall be addressed:

                  2929 Seventh Street, L.L.C.
                  c/o Wareham Property Group
                  1120 Nye Street, Suite 400
                  San Rafael, California 94901

         (3)      TENANT AND CURRENT ADDRESS:

                  (a)  Name:                    Dynavax Technologies Corporation

                  (b)  State of incorporation:  Delaware

                  Notices to Tenant shall be addressed:

                  The Premises
                  Attn: Chief Financial Officer

         (4)      DATE OF LEASE: as of January 7, 2004

         (5)      LEASE TERM: 10 years

         (6)      PROJECTED COMMENCEMENT DATE: April 1, 2004

         (7)      PROJECTED EXPIRATION DATE: March 31, 2014

                                       1

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         (8)      MONTHLY BASE RENT:

<TABLE>
<CAPTION>
PERIOD FROM/TO                                MONTHLY
--------------                                -------
<S>                                        <C>
Months 1 -12                               $25,651.25

Months 13 - 24                             $26,420.79

Months 25 - 36                             $27,213.41

Months 37 - 48                             $28,029.81

Months 49 - 60                             $28,870.70

Months 61 - 72                             $29,736.82

Months 73 - 84                             $30,628.92

Months 85 - 96                             $31,547.79

Months 97 - 108                            $32,494.22

Months 109 - 120                           $33,469.05
</TABLE>

         (9)      RENTABLE AREA OF THE PREMISES: 20,521 square feet

         (10)     SECURITY DEPOSIT: $76,953.75; provided, however, if the sum of
Tenant's cash and cash equivalents falls below $20 million at for a period of 30
consecutive days or more during the Term, the amount of the Security Deposit
shall increase to $200,814.30. Thereafter, Tenant may reduce the amount of the
Security Deposit to $76,953.75 if: (a) the projected sum of Tenant's cash and
cash equivalents will remain above $20 million for the remainder of the Term, or
(b) the sum of Tenant's cash and cash equivalents actually remains above $20
million for a period of 12 consecutive months. Tenant may request the reduction
of the Security Deposit upon written notice to Landlord providing evidence of
the existence of either condition (a) or (b) above.

         (11)     SUITE NUMBERS OF PREMISES:  130 and 200

         (12)     TENANT'S USE OF PREMISES: General office administration, and
general research and development laboratories with associated administration,
including by not limited to research and administration of DNA-based vaccines to
develop treatments for allergic, infectious and oncologic diseases.

         (13)     PARKING:    Up to 61 unreserved parking spaces on surface lot
                              at the rate of $0.00 per month, per space, during
                              the Term
                              (The total number of parking spaces shall not
                              exceed 3 cars per 1,000 square feet of rentable
                              square feet)

         (14)     BROKERS: NONE

                                       2

<PAGE>

1.2      ENUMERATION OF EXHIBITS, RIDER AND ADDENDUM

         The Exhibits, Rider and Addendum set forth below and attached to this
Lease are incorporated in this Lease by this reference:

         EXHIBIT A         Plan of Premises

         EXHIBIT B         Workletter Agreement

         EXHIBIT C         Rules and Regulations

         EXHIBIT D         Letter of Credit

         RIDER 1           Commencement Date Agreement

         ADDENDUM TO LEASE

1.3      DEFINITIONS

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

         AFFILIATE: Any corporation or other business entity that is currently
owned or controlled by, owns or controls, or is under common ownership or
control with Tenant.

         BUILDING: The office building located at the address specified
in Section 1.1.

         COMMENCEMENT DATE: The date specified in Section 1.1 as the Projected
Commencement Date, unless changed by operation of Article Two.

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

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

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

         ENVIRONMENTAL LAWS: All Laws governing the use, storage, disposal or
generation of any Hazardous Material, including, without limitation, the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as
amended, and the Resource Conservation and Recovery Act of 1976, as amended.

         EXPIRATION DATE: The date specified in Section 1.1 as the Projected
Expiration Date, unless changed by operation of Article Two.

                                       3

<PAGE>

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

         HAZARDOUS MATERIAL: Such substances, material and wastes which are or
become regulated under any Environmental Law; or which are classified as
hazardous or toxic under any Environmental Law; and explosives and firearms,
radioactive material, asbestos, polychlorinated biphenyls, and petroleum
products. The restrictions on use of Hazardous Material are set forth in Section
7.1(c).

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

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

         LANDLORD WORK: The construction or installation of improvements to the
Premises to be furnished by Landlord, if any, as specifically described in the
Workletter or exhibits attached hereto.

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

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

         LEASE YEAR: The twelve month period beginning on the Commencement Date
and each subsequent twelve month, or shorter, period until the Expiration Date.

         MONTHLY BASE RENT: The monthly base rent specified in Section 1.1.

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

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

         OPERATING EXPENSES: All costs, expenses and disbursements of every kind
and nature which Landlord shall pay or become obligated to pay in connection
with the ownership, management, operation, maintenance, replacement and repair
of the Building and the Property (including, without limitation, property
management fees, costs and expenses, and the amortized portion of any capital
expenditure or improvement, together with interest thereon, and the costs of
changing utility service providers). Operating Expenses shall not include, (i)
Leasing

                                       4

<PAGE>

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 Building, (ii) capital costs for
the Property (except for amortized portion of capital for the purpose of
reducing or controlling Operating Expenses or complying with applicable Laws),
(iii) depreciation charges; (iv) 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 payable due under any ground or underlying lease, or
any lease for any equipment ordinarily considered to be of a capital nature
(except janitorial equipment which is not affixed to the Building and except for
loans for capital improvements which Landlord is allowed to include in Operating
Expenses as provided above); (v) ground rental payments; (vi) advertising and
marketing expenses; (vii) costs of Landlord reimbursed by insurance proceeds;
(viii) Landlord's general corporate overhead; (ix) 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 escalations payable under the lease with that tenant; (x) the
cost or expense of any services or benefits provided generally to other tenants
in the Building and not provided or available to Tenant; (xi) any compensation
paid to clerks, attendants, or other persons in commercial concessions operated
by Landlord; (xii) any costs, fines, or penalties incurred due to violations by
Landlord of any governmental rule or authority, this Lease or any other lease in
the Property, or due to Landlord's negligence or willful misconduct; (xiii)
management fees in excess of 4 1/2% of gross receipts for the Property; (xiv)
costs for sculpture, paintings, or other objects of art in excess of $2,500.00
for any one piece (nor 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 containing,
removing, or otherwise remediating any contamination of the Property by any
Hazardous Materials where such contamination existed prior to the Commencement
Date or was caused by another tenant of the Property; (xvii) costs incurred due
to Landlord's violation of any terms or conditions of this Lease or any other
lease relating to the Building or Property; (xviii) overhead profit increments
paid to Landlord's subsidiaries or affiliates for services (other than
management services, which services are capped pursuant to item xiii above) on
or to the Building 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; and (xix) the cost of correcting any building
code or other violations of which Landlord received written notification prior
to the Commencement Date.. If Landlord pays the deductible portion on any
insurance claim applicable to a capital expenditure or improvement, that
deductible portion shall be amortized over the life of the capital expenditure
or improvement. If any Operating Expense, though paid in one year, relates to
more than one calendar year, at the option of Landlord such expense may be
proportionately allocated among such related calendar years.

         PREMISES: The space located in the Building at the Suite Number listed
in Section 1.1 and depicted on Exhibit A attached hereto.

         PROPERTY: The Property consists of the Building, associated surface and
garage parking as designated by Landlord from time to time, landscaping and
improvements, together with the Land, any associated interests in real property,
and the personal property, fixtures,

                                       5

<PAGE>

machinery, equipment, systems and apparatus located in or used in conjunction
with any of the foregoing.

         REAL PROPERTY: The Property excluding any personal property.

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

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

         RENT ADJUSTMENT DEPOSIT: An amount equal to Landlord's estimate of the
Rent Adjustment attributable to each month of the applicable Lease Year. On or
before the beginning of each Lease Year or with Landlord's Statement (defined in
Article Four), Landlord may estimate and notify Tenant in writing of its
estimate of the Operating Expenses and Taxes for such Lease Year. Prior to the
first determination by Landlord of the amount of Operating Expenses and Taxes
for the first Lease Year, Landlord may estimate such amounts in the foregoing
calculation. The last estimate by Landlord shall remain in effect as the
applicable Rent Adjustment Deposit unless and until Landlord notifies Tenant in
writing of a change, which notice may be given by Landlord from time to time
during a Lease Year.

         RENTABLE AREA OF THE PREMISES: The amount of square footage set forth
in Section 1.1.

         RENTABLE AREA OF THE BUILDING: The amount of square footage which
represents the sum of the rentable area of all space intended for office
occupancy in the Property, as determined by Landlord from time to time; and
Landlord shall notify Tenant of any adjustments in such rentable area and any
corresponding change in Tenant's Share.

         SECURITY DEPOSIT: The funds specified in Section 1.1 deposited by
Tenant with Landlord as security for Tenant's performance of its obligations
under this Lease.

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

         TAXES: All federal, state and local governmental taxes, assessments and
charges of every kind or nature, whether general, special, ordinary or
extraordinary, which Landlord shall pay or become obligated to pay because of or
in connection with the ownership, leasing, management, control or operation of
the Property or any of its components (including any personal property used in
connection therewith), which may also include any rental or similar taxes levied
in lieu of or in addition to general real and/or personal property taxes. For
purposes hereof, Taxes for any year shall be Taxes which are assessed for any
period of such year, whether or not such Taxes are billed and payable in a
subsequent calendar year. There shall be included in Taxes for any year the
amount of all fees, costs and expenses (including reasonable attorneys' fees)
paid by Landlord during such year in seeking or obtaining any refund or

                                       6

<PAGE>

reduction of Taxes. Taxes for any year shall be reduced by the net amount of any
tax refund received by Landlord attributable to such year. If a special
assessment payable in installments is levied against any part of the Property,
Taxes for any year shall include only the installment of such assessment and any
interest payable or paid during such year. Taxes shall not include any federal
or state inheritance, general income, gift or estate taxes, except that if a
change occurs in the method of taxation resulting in whole or in part in the
substitution of any such taxes, or any other assessment, for any Taxes as above
defined, such substituted taxes or assessments shall be included in the Taxes.
Notwithstanding anything herein to the contrary, Taxes shall include only 50% of
any increases that result from a reassessment of value due to "new construction"
on or a "change of ownership" of the Property (as such terms are defined in part
0.5 of division 1 of the California Revenue and Taxation Code or any amendments
or successor statutes thereto). For the purposes of the Rent Adjustment, Taxes
shall be calculated based upon the longest period available for payment.

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

         TENANT ALTERATIONS: Any alterations, improvements, additions,
installations or construction in or to the Premises or any Building systems
serving the Premises (excluding Landlord Work or Tenant Work).

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

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

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

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

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

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

         TENANT WORK: All work installed or furnished to the Premises by Tenant,
if any, pursuant to the Workletter.

         TENANT'S SHARE: The percentage that represents the ratio of the
Rentable Area of the Premises to the Rentable Area of the Building, as
determined by Landlord from time to time;

                                       7

<PAGE>

provided, however, the same formula shall be used for the calculation of the
Rentable Area of the Building and the Rentable Area of the Premises.

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

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

         WORKLETTER: The Agreement regarding the manner of completion of
Landlord Work and Tenant Work set forth on Exhibit B attached hereto.

                                   ARTICLE 2

             PREMISES, TERM, FAILURE TO GIVE POSSESSION, AND PARKING

2.1      LEASE OF PREMISES

         Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
the Premises for the Term and upon the terms, covenants and conditions provided
in this Lease. In the event Landlord delivers possession of the Premises to
Tenant prior to the Commencement Date, Tenant shall be subject to all of the
terms, covenants and conditions of this Lease (except with respect to the
payment of Rent) as of the date of such possession.

2.2      TERM

         (a)      The Commencement Date shall be the date determined as follows:

                  (i)      If the Landlord Work is Substantially Complete on or
                           before the Projected Commencement Date, then on the
                           date which is the earlier to occur of:

                           (1)      the Projected Commencement Date, or

                           (2)      the date Tenant first occupies all or part
                                    of the Premises for the conduct of business;
                                    or

                  (ii)     If the Landlord Work is not Substantially Complete by
                           the Projected Commencement Date, then on the date on
                           which the Landlord Work is Substantially Complete.

         (b)      Within thirty (30) days following the occurrence of the
                  Commencement Date, Landlord and Tenant shall enter into an
                  agreement (the form of which is attached hereto as Rider 1)
                  confirming the Commencement Date and the Expiration Date. If
                  Tenant fails to enter into such agreement, then the
                  Commencement Date and the Expiration Date shall be the dates
                  designated by Landlord in such agreement. If the Expiration
                  Date does not fall on the last day of a calendar month,
                  Landlord may elect to adjust the Expiration Date to the last
                  day of the calendar month in

                                       8

<PAGE>

                  which Expiration Date occurs through the agreement referenced
                  above, which shall set forth such adjusted date.

2.3      FAILURE TO GIVE POSSESSION

         If Landlord shall be unable to give possession of the Premises on the
Projected Commencement Date by reason of the following: (i) the Building has not
been sufficiently completed to make the Premises ready for occupancy, (ii) the
Landlord Work, if any, is not Substantially Complete, (iii) the holding over or
retention of possession of any tenant, tenants or occupants, or (iv) for any
other reason, then Landlord shall not be subject to any liability for the
failure to give possession on said date. Under such circumstances, the
Commencement Date shall be the date the Premises are made available to Tenant by
Landlord, and no such failure to give possession on the Projected Commencement
Date shall affect the validity of this Lease or the obligations of the Tenant
hereunder. At the option of Landlord to be exercised within thirty (30) days of
the delayed delivery of possession to Tenant, the Lease shall be amended so that
the Term shall be extended by the period of time possession is delayed. The said
Premises shall be deemed to be ready for Tenant's occupancy in the event
Landlord's Work, if any, is Substantially Complete, or if the delay in the
availability of the Premises for occupancy shall be due to any Tenant Delay
and/or default on the part of Tenant and/or its subtenant or subtenants. In the
event of any dispute as to whether the Landlord Work is Substantially Complete,
the decision of Landlord's architect shall be final and binding on the parties.

         Notwithstanding the foregoing to the contrary, if the Commencement Date
has not occurred on or before April 1, 2004 (the "Outside Commencement Date"),
Tenant shall be entitled to a rent abatement following the Commencement Date of
$855.04 for every day in the period beginning on the Outside Commencement Date
and ending on the Commencement Date.. Landlord and Tenant acknowledge and agree
that the determination of the Commencement Date shall take into consideration
the effect of any Tenant Delays by Tenant.

         Notwithstanding the foregoing to the contrary, if the Commencement Date
has not occurred on or before June 1, 2004 (the "Required Commencement Date"),
then, in addition to the remedy set forth above, Tenant may terminate this Lease
whereupon any monies previously paid by Tenant to Landlord shall be promptly
reimbursed to Tenant and Tenant shall have no further obligation under this
Lease. The Required Commencement Date shall be delayed by one day each for each
day of Tenant Delay.

2.4      CONDITION OF PREMISES

         Tenant shall notify Landlord in writing within thirty (30) days after
the later of Substantial Completion of the Landlord Work or when Tenant takes
possession of the Premises of any defects in the Premises claimed by Tenant or
in the materials or workmanship furnished by Landlord in completing the Landlord
Work. Except for defects stated in such notice, Tenant shall be conclusively
deemed to have accepted the Premises "AS IS" in the condition existing on the
date Tenant first takes possession, and to have waived all claims relating to
the condition of the Premises. Landlord shall proceed diligently to correct the
defects stated in such notice unless Landlord disputes the existence of any such
defects. In the event of any dispute as to the existence of any such defects,
the decision of Landlord's architect shall be final and binding on

                                       9

<PAGE>

the parties. No agreement of Landlord to alter, remodel, decorate, clean or
improve the Premises or the Real Property and no representation regarding the
condition of the Premises or the Real Property has been made by or on behalf of
Landlord to Tenant, except as may be specifically stated in this Lease or in the
Workletter. Notwithstanding anything in this Section 2.4 to the contrary,
Landlord shall deliver the Premises to Tenant in "broom clean" condition with
all Building systems, doors and windows in operational condition. Tenant shall
notify Landlord in writing within thirty (30) days of any portion of the
Premises not being in compliance with the foregoing sentence, and Landlord shall
promptly repair same at Landlord's sole cost and expense (i.e., not as part of
Operating Expenses).

2.5      PARKING

         During the Term, Tenant may use the number of spaces specified in
Section 1.1. The locations and type of parking shall be designated by Landlord
or Landlord's parking operator from time to time. Tenant acknowledges and agrees
that the parking spaces serving the Property may include tandem parking and a
mixture of spaces for compact vehicles as well as full-size passenger
automobiles, and that Tenant shall not use parking spaces for vehicles larger
than the striped size of the parking spaces. All vehicles utilizing Tenant's
parking privileges shall prominently display identification stickers or other
markers, and/or have passes or keycards for ingress and egress, as may be
required and provided by Landlord or its parking operator from time to time.
Tenant shall comply with any and all parking rules and regulations from time to
time established by Landlord or Landlord's parking operator, including a
requirement that Tenant pay to Landlord or Landlord's parking operator a charge
for loss and replacement of passes, keycards, identification stickers or
markers, and for any and all loss or other damage caused by persons or vehicles
related to use of Tenant's parking privileges. Tenant shall not allow any
vehicles using Tenant's parking privileges to be parked, loaded or unloaded
except in accordance with this Section, including in the areas and in the manner
designated by Landlord or its parking operator for such activities. If any
vehicle is using the parking or loading areas contrary to any provision of this
Section, Landlord or its parking operator shall have the right, in addition to
all other rights and remedies of Landlord under this Lease, to remove or tow
away the vehicle without prior notice to Tenant, and the cost thereof shall be
paid to Landlord within ten (10) days after notice from Landlord to Tenant.

                                   ARTICLE 3

                                      RENT

         Tenant agrees to pay to Landlord at the first office specified in
Section 1.1, or to such other persons, or at such other places designated by
Landlord, without any prior demand therefor in immediately available funds and
without any deduction or offset whatsoever, Rent, including Monthly Base Rent
and Rent Adjustments in accordance with Article Four, during the Term. Monthly
Base Rent shall be paid monthly in advance on the first day of each month of the
Term, except that the first installment of Monthly Base Rent shall be paid by
Tenant to Landlord concurrently with execution of this Lease. Monthly Base Rent
shall be prorated for partial months within the Term. Unpaid Rent shall bear
interest at the Default Rate from the date due until paid. Tenant's covenant to
pay Rent shall be independent of every other covenant in this Lease.

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<PAGE>

                                   ARTICLE 4

                          RENT ADJUSTMENTS AND PAYMENTS

4.1      RENT ADJUSTMENTS

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

         (a)      The Rent Adjustment Deposit representing Tenant's Share of
                  Operating Expenses for the applicable calendar year, monthly
                  during the Term with the payment of Monthly Base Rent; and

         (b)      The Rent Adjustment Deposit representing Tenant's Share of
                  Taxes for the applicable calendar year, monthly during the
                  Term with the payment of Monthly Base Rent; and

         (c)      Any Rent Adjustments due in excess of the Rent Adjustment
                  Deposits in accordance with Section 4.2. Rent Adjustments due
                  from Tenant to Landlord for any calendar year shall be
                  Tenant's Share of Operating Expenses for such year and
                  Tenant's Share of Taxes for such year.

4.2      STATEMENT OF LANDLORD

         As soon as feasible after the expiration of each calendar year during
the Term, Landlord will furnish Tenant a statement ("Landlord's Statement")
showing the following:

         (a)      Operating Expenses and Taxes for the calendar year;

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

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

         Tenant shall pay to Landlord within ten (10) business days after
receipt of such statement any amounts for Rent Adjustments then due in
accordance with Landlord's Statement. Any amounts due from Landlord to Tenant
pursuant to this Section shall be credited to the Rent Adjustment Deposit next
coming due, or refunded to Tenant if the Term has already expired provided
Tenant is not in default hereunder. No interest or penalties shall accrue on any
amounts that Landlord is obligated to credit or refund to Tenant by reason of
this Section 4.2. Landlord's failure to deliver Landlord's Statement or to
compute the amount of the Rent Adjustments shall not constitute a waiver by
Landlord of its right to deliver such items nor constitute a waiver or release
of Tenant's obligations to pay such amounts. The Rent Adjustment Deposit shall
be credited against Rent Adjustments due for the applicable calendar year.
During the last complete calendar year or during any partial calendar year in
which the Lease terminates, Landlord may include in the Rent Adjustment Deposit
its estimate of Rent Adjustments which may not be

                                       11

<PAGE>

finally determined until after the termination of this Lease. Tenant's
obligation to pay Rent Adjustments survives the expiration or termination of the
Lease. Notwithstanding the foregoing, in no event shall the sum of Monthly Base
Rent and the Rent Adjustments be less than the Monthly Base Rent payable.

4.3      BOOKS AND RECORDS

         Landlord shall maintain books and records showing Operating Expenses
and Taxes in accordance with industry standard accounting and management
practices, consistently applied. Tenant or its representative (which
representative shall be a certified public accountant licensed to do business in
the state in which the Property is located and whose primary business is
certified public accounting and who shall not be paid on a contingency basis)
shall have the right, for a period of sixty (60) days following the date upon
which Landlord's Statement is delivered to Tenant, to examine the Landlord's
books and records with respect to the items in the foregoing statement of
Operating Expenses and Taxes during normal business hours, upon written notice,
delivered at least three (3) business days in advance. If Tenant does not object
in writing to Landlord's Statement within sixty (60) days of Tenant's receipt
thereof, specifying the nature of the item in dispute and the reasons therefor,
then Landlord's Statement shall be considered final and accepted by Tenant. If
Tenant does dispute any Landlord's Statement, Tenant shall deliver a copy of any
such audit to Landlord at the time of notification of the dispute. If Tenant
does not provide such notice of dispute and a copy of such audit to Landlord
within such sixty (60) day period, it shall be deemed to have waived such right
to dispute Landlord's Statement. Any amount due to the Landlord as shown on
Landlord's Statement, whether or not disputed by Tenant as provided herein shall
be paid by Tenant when due as provided above, without prejudice to any such
written exception. In no event shall Tenant be permitted to examine Landlord's
records or to dispute any statement of Expenses unless Tenant has paid and
continues to pay all Rent when due. Tenant shall be solely responsible for all
costs, expenses and fees incurred for the audit. However, notwithstanding the
foregoing, if Landlord and Tenant determine that Operating Expenses for the
Building for the year in question were less than stated by more than 5%,
Landlord, within 30 days after its receipt of paid invoices therefor from
Tenant, shall reimburse Tenant for the reasonable amounts paid by Tenant to
third parties in connection with such review by Tenant up to a maximum of
$3,500.00. Upon resolution of any dispute with respect to Operating Expenses and
Taxes, Tenant shall either pay Landlord any shortfall or Landlord shall credit
Tenant with respect to any overages paid by Tenant. The records obtained by
Tenant shall be treated as confidential and neither Tenant nor any of its
representatives or agents shall disclose or discuss the information set forth in
the audit to or with any other person or entity ("Confidentiality Requirement").
Tenant shall indemnify and hold Landlord harmless for any losses or damages
arising out of the breach of the Confidentiality Requirement. In no event shall
Tenant be permitted to examine Landlord's records or to dispute any statement of
Expenses unless Tenant has paid and continues to pay all Rent when due.

4.4      TENANT OR LEASE SPECIFIC TAXES

         In addition to Monthly Base Rent, Rent Adjustments, Rent Adjustment
Deposits and other charges to be paid by Tenant, Tenant shall pay to Landlord,
upon demand, any and all taxes payable by Landlord (other than federal or state
inheritance, general income, franchise, gift or estate taxes) whether or not now
customary or within the contemplation of the parties hereto: (a)

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<PAGE>

upon, allocable to, or measured by the Rent payable hereunder, including any
gross receipts tax or excise tax levied by any governmental or taxing body with
respect to the receipt of such rent; or (b) upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises or any portion thereof; or (c) upon the
measured value of Tenant's personal property located in the Premises or in any
storeroom or any other place in the Premises or the Property, or the areas used
in connection with the operation of the Property, it being the intention of
Landlord and Tenant that, to the extent possible, such personal property taxes
shall be billed to and paid directly by Tenant; (d) resulting from Landlord
Work, Tenant Work or Tenant Alterations to the Premises, whether title thereto
is in Landlord or Tenant; or (e) upon this transaction. Taxes paid by Tenant
pursuant to this Section 4.5 shall not be included in any computation of Taxes
payable pursuant to Sections 4.1 and 4.2.

                                   ARTICLE 5

                                SECURITY DEPOSIT

         Tenant concurrently with the execution of this Lease shall pay to
Landlord in immediately available funds the Security Deposit. The Security
Deposit may be applied by Landlord to cure, in whole or part, any default of
Tenant under this Lease, and upon notice by Landlord of such application, Tenant
shall replenish the Security Deposit in full by paying to Landlord within ten
(10) days of demand the amount so applied. Landlord's application of the
Security Deposit shall not constitute a waiver of Tenant's default to the extent
that the Security Deposit does not fully compensate Landlord for all losses,
damages, costs and expenses incurred by Landlord in connection with such default
and shall not prejudice any other rights or remedies available to Landlord under
this Lease or by Law. Landlord shall not pay any interest on the Security
Deposit. Landlord shall not be required to keep the Security Deposit separate
from its general accounts. The Security Deposit shall not be deemed an advance
payment of Rent or a measure of damages for any default by Tenant under this
Lease, nor shall it be a bar or defense of any action that Landlord may at any
time commence against Tenant. In the absence of evidence satisfactory to
Landlord of an assignment of the right to receive the Security Deposit or the
remaining balance thereof, Landlord may return the Security Deposit to the
original Tenant, regardless of one or more assignments of this Lease. Upon the
transfer of Landlord's interest under this Lease, Landlord's obligation to
Tenant with respect to the Security Deposit shall terminate upon transfer to the
transferee of the Security Deposit, or any balance thereof. If Tenant shall
fully and faithfully comply with all the terms, provisions, covenants, and
conditions of this Lease, the Security Deposit, or any balance thereof, shall be
returned to Tenant within thirty (30) days after Landlord recovers possession of
the Premises or such longer time as may be permissible under Law. Tenant hereby
waives any and all rights of Tenant under the provisions of Section 1950.7 of
the California Civil Code or other Law regarding security deposits. Tenant shall
provide Landlord with annual financial statements verifying its cash and cash
equivalents. In addition, Tenant shall notify Landlord immediately if Tenant's
cash and cash equivalents fall below the amount specified in Section 1.1(10)
above for a period in excess of 30 consecutive days.

         All or part of the Security Deposit may be in the form of an
irrevocable letter of credit (the "Letter of Credit"), which Letter of Credit:
(a) , when added to any cash Security Deposit

                                       13

<PAGE>

paid by Tenant, shall be in the amount specified in Section 1.1(10); and (b)
shall be issued in substantially the form attached hereto as Exhibit D. The
Letter of Credit (and any renewals or replacements thereof) shall be for a term
of not less than 1 year. Tenant agrees that it shall from time to time, as
necessary, whether as a result of a draw on the Letter of Credit by Landlord
pursuant to the terms hereof or as a result of the expiration of the Letter of
Credit then in effect, renew or replace the original and any subsequent Letter
of Credit so that a Letter of Credit, in the amount required hereunder, is in
effect until the end of the Term. If Tenant fails to furnish such renewal or
replacement at least 60 days prior to the stated expiration date of the Letter
of Credit then held by Landlord, Landlord may draw upon such Letter of Credit
and hold the proceeds thereof (and such proceeds need not be segregated) as a
Security Deposit pursuant to the terms of this Section 4.5. Any renewal or
replacement of the original or any subsequent Letter of Credit shall meet the
requirements for the original Letter of Credit as set forth above, except that
such replacement or renewal shall be issued by a national bank satisfactory to
Landlord at the time of the issuance thereof.

         If Landlord draws on the Letter of Credit as permitted in this Lease
and the Letter of Credit, then, upon demand of Landlord, Tenant shall restore
the amount available under the Letter of Credit to its original amount by
providing Landlord with an amendment to the Letter of Credit evidencing that the
amount available under the Letter of Credit has been restored to its original
amount. In the alternative, Tenant may provide Landlord with cash, to be held by
Landlord in accordance with this Article, equal to the restoration amount
required under the Letter of Credit.

                                   ARTICLE 6

                                    SERVICES

6.1      LANDLORD'S GENERAL SERVICES

         (a)      So long as the Lease is in full force and effect and Tenant
                  has paid all Rent then due, Landlord shall furnish the
                  following services, the cost of which services shall be
                  included in Operating Expenses or paid directly by Tenant to
                  the utility or service provider (as indicated):

                  (i)      heat, ventilation and air-conditioning ("HVAC") in
                           the Premises and the Common Areas;

                  (ii)     tempered and cold water for use in lavatories in
                           common with other tenants from the regular supply of
                           the Building;

                  (iii)    customary cleaning and janitorial services in the
                           Common Areas five (5) days per week, excluding
                           National Holidays;

                  (iv)     washing of the outside windows in the Premises
                           weather permitting at intervals determined by
                           Landlord; and

                  (v)      automatic passenger and swing/freight elevator
                           service in common with other tenants of the Building.
                           Freight elevator service will be subject to

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<PAGE>

                           reasonable scheduling by Landlord and payment of
                           Landlord's standard charges.

         (b)      If Tenant uses heat generating machines or equipment in the
                  Premises to an extent which adversely affects the temperature
                  otherwise maintained in the Common Areas by the air-cooling
                  system or whenever the occupancy or electrical load adversely
                  affects the temperature otherwise maintained by the
                  air-cooling system, Landlord reserves the right to install or
                  to require Tenant to install supplementary air-conditioning
                  units in the Premises following notice to Tenant advising
                  Tenant of the adverse effect and giving Tenant 30 days to
                  reverse such effect. Tenant shall bear all costs and expenses
                  related to the installation, maintenance and operation of any
                  units installed by Landlord should Tenant fail to act within
                  the 30 day period.

6.2      UTILITY SERVICES

         Landlord shall furnish to the Premises, as a service which is paid
directly by Tenant to the utility provider, electric current and natural gas
service for general office and laboratory use, including normal lighting and
normal business office and laboratory machines. Notwithstanding any provision of
the Lease to the contrary, without, in each instance, the prior written approval
of Landlord, in Landlord's prudent business judgment, Tenant shall not make any
alterations or additions to the electric equipment or systems. Tenant's use of
electric current shall at no time exceed the capacity of the wiring, feeders and
risers providing electric current to the Premises or the Building. The consent
of Landlord to the installation of electric equipment shall not relieve Tenant
from the obligation to limit usage of electricity to no more than such capacity.

6.3      ADDITIONAL SERVICES

         At Tenant's written request, Landlord shall furnish additional
quantities of any of the services specified in Section 6.1, if Landlord can
reasonably do so, on the terms set forth herein. For services requested by
Tenant and furnished by Landlord, Tenant shall pay to Landlord as a charge
therefor Landlord's prevailing rates charged from time to time for such
services, which rates shall be based upon Landlord's actual cost plus a 15%
administrative fee. If Tenant shall fail to make any such payment, Landlord may,
upon notice to Tenant and in addition to Landlord's other remedies under this
Lease, discontinue any or all of such additional services.

6.4      TELEPHONE SERVICES

         All telegraph, telephone, and communication connections which Tenant
may desire shall be subject to Landlord's prior written approval, in Landlord's
reasonable discretion, and the location of all wires and the work in connection
therewith shall be performed by contractors approved by Landlord and shall be
subject to the direction of Landlord, except that such approval is not required
as to Tenant's telephone equipment (including cabling) within the Premises and
from the Premises in a route designated by Landlord to any telephone cabinet or
panel provided (as existing or as installed as part of Landlord's Work, if any)
on Tenant's floor for Tenant's connection to the telephone cable serving the
Building so long as Tenant's equipment does not require connections different
than or additional to those to the telephone cabinet or panel

                                       15

<PAGE>

provided. Except to the extent of such cabling within the Premises or from the
Premises to such telephone cabinet or panel, Landlord reserves the right to
designate and control the entity or entities providing telephone or other
communication cable installation, removal, repair and maintenance in the
Building and to restrict and control access to telephone cabinets or panels. In
the event Landlord designates a particular vendor or vendors to provide such
cable installation, removal, repair and maintenance for the Building, Tenant
agrees to abide by and participate in such program. Tenant shall be responsible
for and shall pay all costs incurred in connection with the installation of
telephone cables and communication wiring in the Premises, including any
hook-up, access and maintenance fees related to the installation of such wires
and cables in the Premises and the commencement of service therein, and the
maintenance thereafter of such wire and cables; and there shall be included in
Operating Expenses for the Building all installation, removal, hook-up or
maintenance costs incurred by Landlord in connection with telephone cables and
communication wiring serving the Building which are not allocable to any
individual users of such service but are allocable to the Building generally. If
Tenant fails to maintain all telephone cables and communication wiring in the
Premises and such failure affects or interferes with the operation or
maintenance of any other telephone cables or communication wiring serving the
Building, Landlord or any vendor hired by Landlord may enter into and upon the
Premises forthwith and perform such repairs, restorations or alterations as
Landlord deems necessary in order to eliminate any such interference (and
Landlord may recover from Tenant all of Landlord's costs in connection
therewith). If required by Landlord, no later than the Termination Date Tenant
shall remove all telephone cables and communication wiring installed by Tenant
for and during Tenant's occupancy. Tenant agrees that neither Landlord nor any
of its agents or employees shall be liable to Tenant, or any of Tenant's
employees, agents, customers or invitees or anyone claiming through, by or under
Tenant, for any damages, injuries, losses, expenses, claims or causes of action
because of any interruption, diminution, delay or discontinuance at any time for
any reason in the furnishing of any telephone or other communication service to
the Premises and the Building.

6.5      DELAYS IN FURNISHING SERVICES

         Tenant agrees that Landlord shall not be in breach of this Lease nor be
liable to Tenant for damages or otherwise, for any failure to furnish, or a
delay in furnishing, or a change in the quantity or character of any service
when such failure, delay or change is occasioned, in whole or in part, by
repairs, improvements or mechanical breakdowns by the act or default of Tenant
or other parties or by an event of Force Majeure. No such failure, delay or
change shall be deemed to be an eviction or disturbance of Tenant's use and
possession of the Premises, or relieve Tenant from paying Rent or from
performing any other obligations of Tenant under this Lease, without any
deduction or offset. Failure to any extent to make available, or any slowdown,
stoppage, or interruption of, the specified utility services resulting from any
cause, including changes in service provider or Landlord's compliance with any
voluntary or similar governmental or business guidelines now or hereafter
published or any requirements now or hereafter established by any governmental
agency, board, or bureau having jurisdiction over the operation of the Property
shall not render Landlord liable in any respect for damages to either persons,
property, or business, nor be construed as an eviction of Tenant or work an
abatement of Rent, nor relieve Tenant of Tenant's obligations for fulfillment of
any covenant or agreement hereof. Should any equipment or machinery furnished by
Landlord break down or for any cause cease to function properly, Landlord shall
use reasonable diligence to repair same promptly, but Tenant shall have

                                       16

<PAGE>

no claim for abatement of Rent or damages on account of any interruption of
service occasioned thereby or resulting therefrom. Notwithstanding anything in
this Section 6.5 to the contrary, if the Premises, or a material portion of the
Premises, are made untenantable for a period in excess of 3 consecutive business
days as a result of a failure, delay or change in any service due to Landlord's
negligence or willful misconduct, and Tenant has given Landlord notice of such
failure, delay or change, then Tenant, as its sole remedy, shall be entitled to
receive an abatement of Rent payable hereunder during the period beginning on
the 4th consecutive business day after such notice and ending on the day the
service has been restored. If the entire Premises have not been rendered
untenantable by such failure, delay or change , the amount of abatement shall be
equitably prorated.

6.6      CHOICE OF SERVICE PROVIDER

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

6.7      SIGNAGE

         Initial Building standard signage will be installed by Landlord in the
directory in the main lobby of the Building, in the listing of tenants in the
elevator lobby for the floor on which the Premises is located and at Tenant's
main entry door to the Premises at Tenant's sole cost and expense except to the
extent that funds are available out of any Tenant Improvement Allowance, if any,
provided pursuant to the Workletter. Any change in such initial signage shall be
only with Landlord's prior written consent, shall conform to Building standard
signage and shall be at Tenant's sole cost and expense. Tenant shall not place
on the exterior of the Premises or the door, window or roof, within any display
window space or within five (5) feet behind the entry to the Premises, any sign,
decoration, lettering, advertising matter or descriptive material without
Landlord's prior written approval. Tenant shall submit to Landlord reasonably
detailed drawings of its proposed signs for review and approval by Landlord
prior to utilizing same. All signs, awnings, canopies, decorations, lettering,
advertising matter or other items used by Tenant shall conform to the standards
of design, motif, and decor, from time to time, established by Landlord for the
Building and shall be insured and maintained at all times by Tenant in good
condition, operating order and repair. Flashing signs and credit card or other
signs, advertisements and hand lettered signs visible from outside the Building
or the Common Areas are prohibited. Landlord shall have the right, without
notice to Tenant and without any liability for damage to the Premises reasonably
caused thereby, to remove any items displayed or affixed in or to the

                                       17

<PAGE>

Premises which Landlord determines to be in violation of the provisions of this
Section. If any damage is done to Tenant's signs, Tenant shall commence to
repair same within five (5) days after such damage occurs, and upon Tenant's
failure to commence the repair work within said five (5) day period and to
diligently prosecute the same to completion, Landlord may, after notice to
Tenant, repair such damage and Tenant shall pay Landlord, upon demand,
Landlord's costs and expenses in connection therewith.

         Notwithstanding anything in this Section 6.7 to the contrary, Tenant
shall have the right to install one (1) sign on the exterior of the Building and
one (1) monument sign on the Property (collectively, the "Sign"), if Tenant is
not in default (beyond applicable notice and cure periods) under any term or
condition of the Lease on the date Tenant elects to install the Sign. Tenant, at
its sole cost and expense, shall obtain all necessary building permits and
zoning and regulatory approval in connection with the Sign. All costs in
connection with the Sign, including any costs for the design, installation,
supervision of installation, wiring, maintenance, repair and removal of the
Sign, will be at Tenant's expense. Tenant shall submit to Landlord reasonably
detailed drawings of the proposed Sign, including without limitation, the size,
material, shape and lettering for review and approval by Landlord. The Sign
shall conform to the standards of design and motif established by Landlord for
the exterior of the Building and the Property. Tenant shall reimburse Landlord
for any costs associated with Landlord's review and supervision as hereinbefore
provided including, but not limited to, engineers and other professional
consultants. Tenant will be responsible for the repair of any damage that the
installation of the Sign may cause to the Building or Property. Tenant agrees
upon the expiration date or sooner termination of this Lease, upon Landlord's
request, to remove the Sign and to repair and restore any damage to the Building
and Property at Tenant's expense.

                                   ARTICLE 7

                    POSSESSION, USE AND CONDITION OF PREMISES

7.1      POSSESSION AND USE OF PREMISES

         (a)      Tenant shall be entitled to possession of the Premises when
                  the Landlord Work is Substantially Complete. Tenant shall
                  occupy and use the Premises only for the uses specified in
                  Section 1.1 to conduct Tenant's business. Tenant shall not
                  occupy or use the Premises (or permit the use or occupancy of
                  the Premises) for any purpose or in any manner which: (1) is
                  unlawful or in violation of any Law or Environmental Law; (2)
                  may be dangerous to persons or property or which may increase
                  the cost of, or invalidate, any policy of insurance carried on
                  the Building or covering its operations; (3) is contrary to or
                  prohibited by the terms and conditions of this Lease or the
                  rules of the Building set forth in Article Eighteen; or (4)
                  would tend to create or continue a nuisance.

         (b)      Tenant shall comply with all Environmental Laws pertaining to
                  Tenant's occupancy and use of the Premises and concerning the
                  proper storage, handling and disposal of any Hazardous
                  Material introduced to the Premises, the Building or the
                  Property by Tenant or other occupants of the Premises, or
                  their employees, servants, agents, contractors, customers or
                  invitees during the Term. Landlord

                                       18

<PAGE>

                  shall comply with all Environmental Laws applicable to the
                  Property other than those to be complied with by Tenant
                  pursuant to the preceding sentence. Tenant shall not generate,
                  store, handle or dispose of any Hazardous Material in, on, or
                  about the Property without the prior written consent of
                  Landlord, which may be withheld in Landlord's sole discretion,
                  except that such consent shall not be required to the extent
                  of Hazardous Material packaged and contained in office
                  products for consumer use in general business offices or
                  laboratories in quantities for ordinary day-to-day use
                  provided such use does not give rise to, or pose a risk of,
                  exposure to or release of Hazardous Material. Landlord
                  consents to the use by Tenant of necessary quantities of
                  Hazardous Material in connection with the operations of its
                  laboratory facilities provided that: (i) materials are stored
                  in original containers, (ii) Tenant provides Landlord with a
                  list of all such Hazardous Materials and the quantities at the
                  Premises from time to time within ten (10) days after request
                  by Landlord, (iii) such use is in compliance with applicable
                  Environmental Law and (iv) such use does not give rise to, or
                  pose a risk of, exposure to or release of Hazardous Materials.
                  Upon request, and from time to time, Tenant shall provide
                  Landlord with a list of all such Hazardous Materials and the
                  quantity of such Hazardous Materials used at the Premises. In
                  the event that Tenant is notified of any investigation or
                  violation of any Environmental Law arising from Tenant's
                  activities at the Premises, Tenant shall immediately deliver
                  to Landlord a copy of such notice. In such event or in the
                  event Landlord reasonably believes that a violation of
                  Environmental Law exists, Landlord may conduct such tests and
                  studies relating to compliance by Tenant with Environmental
                  Laws or the alleged presence of Hazardous Materials upon the
                  Premises as Landlord deems desirable, all of which shall be
                  completed at Tenant's expense. Landlord's inspection and
                  testing rights are for Landlord's own protection only, and
                  Landlord has not, and shall not be deemed to have assumed any
                  responsibility to Tenant or any other party for compliance
                  with Environmental Laws, as a result of the exercise, or
                  non-exercise of such rights. Tenant hereby indemnifies, and
                  agrees to defend, protect and hold harmless, the Indemnitees
                  from any and all loss, claim, demand, action, expense,
                  liability and cost (including attorneys' fees and expenses)
                  arising out of or in any way related to the presence of any
                  Hazardous Material introduced to the Premises during the Term
                  by any party other than Landlord or Landlord's Indemnitees,
                  agents or contractors. In case of any action or proceeding
                  brought against the Indemnitees by reason of any such claim,
                  upon notice from Landlord, Tenant covenants to defend such
                  action or proceeding by counsel chosen by Landlord, in
                  Landlord's sole discretion. Landlord reserves the right to
                  settle, compromise or dispose of any and all actions, claims
                  and demands related to the foregoing indemnity. If any
                  Hazardous Material is released, discharged or disposed of on
                  or about the Property and such release, discharge or disposal
                  is not caused by Tenant or other occupants of the Premises, or
                  their employees, servants, agents, contractors, customers or
                  invitees, such release, discharge or disposal shall be deemed
                  casualty damage under Article Fourteen to the extent that the
                  Premises are affected thereby; in such case, Landlord and
                  Tenant shall have the obligations and rights respecting such
                  casualty damage provided under such Article.

                                       19

<PAGE>

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

7.2      LANDLORD ACCESS TO PREMISES; APPROVALS

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

         (b)      If Tenant shall not be personally present to permit an entry
                  into the Premises when for any reason an entry therein shall
                  be necessary or permissible, Landlord (or Landlord's agents),
                  after attempting to notify Tenant (unless Landlord believes an
                  emergency situation exists), may enter the Premises without
                  rendering

                                       20
<PAGE>

                  Landlord or its agents liable therefor, and without relieving
                  Tenant of any obligations under this Lease.

         (c)      Landlord may enter the Premises for the purpose of conducting
                  such inspections, tests and studies as Landlord may deem
                  desirable or necessary to confirm Tenant's compliance with all
                  Laws and Environmental Laws or for other purposes necessary in
                  Landlord's reasonable judgment to ensure the sound condition
                  of the Property and the systems serving the Property.
                  Landlord's rights under this Section 7.2(c) are for Landlord's
                  own protection only, and Landlord has not, and shall not be
                  deemed to have assumed, any responsibility to Tenant or any
                  other party as a result of the exercise or non-exercise of
                  such rights, for compliance with Laws or Environmental Laws or
                  for the accuracy or sufficiency of any item or the quality or
                  suitability of any item for its intended use.

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

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

7.3      QUIET ENJOYMENT

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

                                    ARTICLE 8

                                   MAINTENANCE

8.1      LANDLORD'S MAINTENANCE

         Subject to the provisions of Articles Four (as to reimbursement of
Operating Expenses) and Fourteen, Landlord shall maintain in good order,
condition and repair the foundations, roofs, exterior walls, and the structural
elements of the Building, plus the electrical, plumbing, heating, ventilating,
air-conditioning, mechanical and the fire and life safety systems of the
Building (including the Premises), except that: (a) Landlord shall not be
responsible for the maintenance or repair of any floor or wall coverings in the
Premises; (b) the cost of performing any of said maintenance or repairs to the
Premises shall be paid directly by Tenant as Additional Rent and

                                       21
<PAGE>

not included in Operating Expenses, and (c) the cost of performing any of said
maintenance or repairs to the Building caused by the negligence of Tenant, its
employees, agents, servants, licensees, subtenants, contractors or invitees,
shall be paid directly by Tenant as Additional Rent and not included in
Operating Expenses, subject to the waivers set forth in Section 16.4. Landlord
shall not be liable to Tenant for any expense, injury, loss or damage resulting
from work done in or upon, or in connection with the use of, any adjacent or
nearby building, land, street or alley. Landlord shall maintain the Building in
compliance with all Environmental Laws to the extent Landlord has received
written notice of violation of such Laws.

8.2      TENANT'S MAINTENANCE

         Subject to the provisions of Section 8.1 above and Article Fourteen,
Tenant, at its expense, shall keep and maintain the Premises and all Tenant
Additions in good order, condition and repair and in accordance with all Laws
and Environmental Laws (except to the extent Landlord is responsible for
compliance with Laws and Environmental Laws in the Premises under the terms of
this Lease). Tenant shall provide regular janitorial services to the Premises,
at Tenant's sole cost and expense. Tenant shall not permit waste and shall
promptly and adequately repair all damages to the Premises and replace or repair
all damaged or broken glass in the interior of the Premises, fixtures or
appurtenances. Any repairs or maintenance shall be completed with materials of
similar quality to the original materials, all such work to be completed under
the supervision of Landlord. Any such repairs or maintenance shall be performed
only by contractors or mechanics approved by Landlord, which approval shall not
be unreasonably withheld, and whose work will not cause or threaten to cause
disharmony or interference with Landlord or other tenants in the Building and
their respective agents and contractors performing work in or about the
Building. If Tenant fails to perform any of its obligations set forth in this
Section 8.2, Landlord may, in its sole discretion and upon 24 hours prior notice
to Tenant (except without notice in the case of emergencies), perform the same,
and Tenant shall pay to Landlord any costs or expenses incurred by Landlord upon
demand.

                                    ARTICLE 9

                          ALTERATIONS AND IMPROVEMENTS

9.1      TENANT ALTERATIONS

         (a)      Except for completion of Tenant Work undertaken by Tenant
                  pursuant to the Workletter, the following provisions shall
                  apply to the completion of any Tenant Alterations:

                  (i)      Tenant shall not, except as provided herein, without
                           the prior written consent of Landlord, which consent
                           shall not be unreasonably withheld, make or cause to
                           be made any Tenant Alterations in or to the Premises
                           or any Property systems serving the Premises. Prior
                           to making any Tenant Alterations, Tenant shall give
                           Landlord ten (10) days prior written notice (or such
                           earlier notice as would be necessary pursuant to
                           applicable Law) to permit Landlord sufficient time to
                           post appropriate notices of non-responsibility.
                           Subject to all other requirements of this Article
                           Nine,

                                       22
<PAGE>

                           Tenant may undertake Decoration work without
                           Landlord's prior written consent. Tenant shall
                           furnish Landlord with the names and addresses of all
                           contractors and subcontractors and copies of all
                           contracts. All Tenant Alterations shall be completed
                           at such time and in such manner as Landlord may from
                           time to time designate, and only by contractors or
                           mechanics approved by Landlord, which approval shall
                           not be unreasonably withheld, provided, however, that
                           Landlord may, in its sole discretion, specify the
                           engineers and contractors to perform all work
                           relating to the Building's systems (including the
                           mechanical, heating, plumbing, security, ventilating,
                           air-conditioning, electrical, communication and the
                           fire and life safety systems in the Building). The
                           contractors, mechanics and engineers who may be used
                           are further limited to those whose work will not
                           cause or threaten to cause disharmony or interference
                           with Landlord or other tenants in the Building and
                           their respective agents and contractors performing
                           work in or about the Building. Landlord may further
                           condition its consent upon Tenant furnishing to
                           Landlord and Landlord approving prior to the
                           commencement of any work or delivery of materials to
                           the Premises related to the Tenant Alterations such
                           of the following as specified by Landlord:
                           architectural plans and specifications, opinions from
                           Landlord's engineers stating that the Tenant
                           Alterations will not in any way adversely affect the
                           Building's systems, necessary permits and licenses,
                           certificates of insurance, and such other documents
                           in such form reasonably requested by Landlord.
                           Landlord may, in the exercise of reasonable judgment,
                           request that Tenant provide Landlord with appropriate
                           evidence of Tenant's ability to complete and pay for
                           the completion of the Tenant Alterations such as a
                           performance bond or letter of credit. Upon completion
                           of the Tenant Alterations, Tenant shall deliver to
                           Landlord an as-built mylar and digitized (if
                           available) set of plans and specifications for the
                           Tenant Alterations.

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

                  (iii)    Tenant agrees to complete all Tenant Alterations (i)
                           in accordance with all Laws, Environmental Laws, all
                           requirements of applicable insurance companies and in
                           accordance with Landlord's standard construction
                           rules and regulations, and (ii) in a good and
                           workmanlike manner with the use of good grades of
                           materials. Tenant shall notify Landlord immediately
                           if Tenant receives any notice of violation of any Law
                           in connection with completion of any Tenant
                           Alterations and shall immediately take such steps as
                           are necessary to remedy such violation. In no event
                           shall such

                                       23
<PAGE>

                           supervision or right to supervise by Landlord nor
                           shall any approvals given by Landlord under this
                           Lease constitute any warranty by Landlord to Tenant
                           of the adequacy of the design, workmanship or quality
                           of such work or materials for Tenant's intended use
                           or of compliance with the requirements of Section
                           9.1(a)(3)(i) and (ii) above or impose any liability
                           upon Landlord in connection with the performance of
                           such work.

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

9.2      LIENS

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

                                   ARTICLE 10

                            ASSIGNMENT AND SUBLETTING

10.1     ASSIGNMENT AND SUBLETTING

         (a)      Without the prior written consent of Landlord, which may be
                  withheld in Landlord's sole discretion, Tenant may not
                  sublease, assign, mortgage, pledge, hypothecate or otherwise
                  transfer or permit the transfer of this Lease or the
                  encumbering of Tenant's interest therein in whole or in part,
                  by operation of Law or otherwise or permit the use or
                  occupancy of the Premises, or any part thereof, by anyone
                  other than Tenant, provided, however, if Landlord chooses not
                  to recapture the space proposed to be subleased or assigned as
                  provided in Section 10.2, Landlord shall not unreasonably
                  withhold its consent to a subletting or assignment under this
                  Section 10.1. Tenant agrees that the provisions governing
                  sublease and assignment set forth in this Article Ten shall be
                  deemed to be reasonable. If Tenant desires to enter into any
                  sublease of the Premises or assignment of this Lease, Tenant
                  shall deliver written notice thereof to Landlord

                                       24
<PAGE>

                  ("Tenant's Notice"), together with the identity of the
                  proposed subtenant or assignee and the proposed principal
                  terms thereof and financial and other information sufficient
                  for Landlord to make an informed judgment with respect to such
                  proposed subtenant or assignee at least fifteen (15) days
                  prior to the commencement date of the term of the proposed
                  sublease or assignment. If Tenant proposes to sublease less
                  than all of the Rentable Area of the Premises, the space
                  proposed to be sublet and the space retained by Tenant must
                  each be a marketable unit as reasonably determined by Landlord
                  and otherwise in compliance with all Laws. Landlord shall
                  notify Tenant in writing of its approval or disapproval of the
                  proposed sublease or assignment or its decision to exercise
                  its rights under Section 10.2 within thirty (30) days after
                  receipt of Tenant's Notice (and all required information).
                  Tenant shall submit for Landlord's approval (which approval
                  shall not be unreasonably withheld) any advertising which
                  Tenant or its agents intend to use with respect to the space
                  proposed to be sublet.

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

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

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

                           (3)      any proposed assignee's or sublessee's use
                                    of the Premises would be different from the
                                    Use of the Premises set forth in Section 1.1
                                    or would violate Section 7.1 of the Lease or
                                    would violate the provisions of any other
                                    leases of tenants in the Property; or

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

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

         (c)      Any sublease or assignment shall be expressly subject to the
                  terms and conditions of this Lease. Any subtenant or assignee
                  shall execute such documents as Landlord may reasonably
                  require to evidence such subtenant's sublease of all or a
                  portion of the Premises or assignee's assumption of the
                  obligations and liabilities of Tenant under this Lease. Tenant
                  shall deliver to Landlord a copy of all

                                       25
<PAGE>

                  agreements executed by Tenant and the proposed subtenant and
                  assignee with respect to the Premises. Landlord's approval of
                  a sublease, assignment, hypothecation, transfer or third party
                  use or occupancy shall not constitute a waiver of Tenant's
                  obligation to obtain Landlord's consent to further assignments
                  or subleases, hypothecations, transfers or third party use or
                  occupancy.

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

         (e)      Notwithstanding anything in this Article Ten to the contrary,
                  occupancy of all or part of the Premises by (i) any related
                  entity, parent company, subsidiary, or Affiliate of Tenant, or
                  (ii) any entity which owns or is owned by an Affiliate of
                  Tenant, or (iii) any company in which Tenant has a controlling
                  interest, or (iv) any successor corporation to Tenant, whether
                  by merger, consolidation, or otherwise, or any person or
                  entity who purchases all or substantially all of Tenant's
                  business or assets, shall not be deemed an assignment or
                  subletting requiring Landlord's prior written consent,
                  provided that such related entity, parent company, subsidiary,
                  Affiliate, controlled company, or successor corporation was
                  not formed as a subterfuge to avoid the obligations of this
                  Article Ten. In such transactions, the provisions of
                  subsections (a) and (b), above, shall not apply, and Tenant
                  may assign the Lease at any time, or sublease all or part of
                  the Premise at any time, without receipt of Landlord's
                  consent, to any such entity so long as such transaction was
                  not entered into as a subterfuge to avoid the obligations and
                  restrictions of this Lease and Landlord receives written
                  notice of such assignment or sublease within 30 days of such
                  transaction. In addition, the provisions of Sections 10.2 and
                  10.3 below shall not apply to such transactions, and any
                  options or rights that Tenant may have under this Lease shall
                  transfer to such entity.

10.2     RECAPTURE

         Landlord shall have the option to exclude from the Premises covered by
this Lease ("recapture"): (a) in the event of an assignment, the space subject
to the assignment, and (b) if Tenant exercises its Expansion Option (as defined
in the Addendum), as to the Expansion Space only, that portion of the Expansion
Space proposed to be sublet, but only if the sublease is for more than
seventy-five percent (75%) of the Expansion Space and for more than seventy-five
percent (75%) of the then remaining Term. The recapture shall be effective as of
the proposed commencement date of such sublease or assignment. If Landlord
elects to recapture, Tenant shall surrender possession of the space proposed to
be subleased or subject to the assignment to Landlord on the effective date of
recapture of such space from the Premises, such date being the Termination Date
for such space. Effective as of the date of recapture of any portion of the
Premises pursuant to this section, the Monthly Base Rent, Rentable Area of the
Premises and Tenant's Share shall be adjusted accordingly.

                                       26
<PAGE>

10.3     EXCESS RENT

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

10.4     TENANT LIABILITY

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

10.5     ASSUMPTION AND ATTORNMENT

         If Tenant shall assign this Lease as permitted herein, the assignee
shall expressly assume all of the obligations of Tenant hereunder in a written
instrument satisfactory to Landlord and furnished to Landlord not later than
fifteen (15) days prior to the effective date of the assignment. If Tenant shall
sublease the Premises as permitted herein, Tenant shall, at Landlord's option,
within fifteen (15) days following any request by Landlord, obtain and furnish
to Landlord the written agreement of such subtenant to the effect that, upon
termination of the Lease, the subtenant will attorn to Landlord and will pay all
subrent directly to Landlord; provided, however, Landlord agrees to mitigate any
damages to which Landlord would otherwise be entitled under California Civil
Code Section 1951.2 by the amount of subrent Landlord receives.

                                       27
<PAGE>

                                   ARTICLE 11

                              DEFAULT AND REMEDIES

11.1     EVENTS OF DEFAULT

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

         (a)      Tenant fails to pay any installment or other payment of Rent
                  including Rent Adjustment Deposits or Rent Adjustments within
                  five (5) days after written notice;

         (b)      Tenant fails to observe or perform any of the other covenants,
                  conditions or provisions of this Lease or the Workletter and
                  fails to cure such default within thirty (30) days after
                  written notice thereof to Tenant (or such additional time as
                  may be required, up to a maximum of ninety (90) days, subject
                  to extension due to Force Majeure events), unless the default
                  involves a hazardous condition, which shall be cured forthwith
                  or unless the failure to perform is a Default for which this
                  Lease specifies there is no cure or grace period;

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

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

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

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

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

         (h)      upon the dissolution of Tenant; or

         (i)      upon the third occurrence within any calendar year during the
                  Term that Tenant fails to pay Rent when due and incurred late
                  fees or has breached a particular covenant of this Lease
                  (whether or not such failure or breach is thereafter cured
                  within any stated cure or grace period or statutory period);
                  provided, this provision shall not apply unless Landlord has
                  provided Tenant with written notice of its applicability
                  following the second such occurrence.

                                       28
<PAGE>

11.2     LANDLORD'S REMEDIES

         (a)      A Default shall constitute a breach of the Lease for which
                  Landlord shall have the rights and remedies set forth in this
                  Section 11.2 and all other rights and remedies set forth in
                  this Lease or now or hereafter allowed by Law, whether legal
                  or equitable, and all rights and remedies of Landlord shall be
                  cumulative and none shall exclude any other right or remedy.

         (b)      With respect to a Default, at any time Landlord may terminate
                  Tenant's right to possession by written notice to Tenant
                  stating such election. Any written notice required pursuant to
                  Section 11.1 shall constitute notice of unlawful detainer
                  pursuant to California Code of Civil Procedure Section 1161
                  if, at Landlord's sole discretion, it states Landlord's
                  election that Tenant's right to possession is terminated after
                  expiration of any period required by Law or any longer period
                  required by Section 11.1. Upon the expiration of the period
                  stated in Landlord's written notice of termination (and unless
                  such notice provides an option to cure within such period and
                  Tenant cures the Default within such period), Tenant's right
                  to possession shall terminate and this Lease shall terminate,
                  and Tenant shall remain liable as hereinafter provided. Upon
                  such termination in writing of Tenant's right to possession,
                  Landlord shall have the right, subject to applicable Law, to
                  re-enter the Premises and dispossess Tenant and the legal
                  representatives of Tenant and all other occupants of the
                  Premises by unlawful detainer or other summary proceedings, or
                  otherwise as permitted by Law, regain possession of the
                  Premises and remove their property (including their trade
                  fixtures, personal property and those Tenant Additions which
                  Tenant is required or permitted to remove under Article
                  Twelve), but Landlord shall not be obligated to effect such
                  removal, and such property may, at Landlord's option, be
                  stored elsewhere, sold or otherwise dealt with as permitted by
                  Law, at the risk of, expense of and for the account of Tenant,
                  and the proceeds of any sale shall be applied pursuant to Law.
                  Landlord shall in no event be responsible for the value,
                  preservation or safekeeping of any such property. Tenant
                  hereby waives all claims for damages that may be caused by
                  Landlord's removing or storing Tenant's personal property
                  pursuant to this Section or Section 12.1, and Tenant hereby
                  indemnifies, and agrees to defend, protect and hold harmless,
                  the Indemnitees from any and all loss, claims, demands,
                  actions, expenses, liability and cost (including attorneys'
                  fees and expenses) arising out of or in any way related to
                  such removal or storage. Upon such written termination of
                  Tenant's right to possession and this Lease, Landlord shall
                  have the right to recover damages for Tenant's Default as
                  provided herein or by Law, including the following damages
                  provided by California Civil Code Section 1951.2:

                  (i)      the worth at the time of award of the unpaid 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 which would have been earned after
                           termination until the time of award

                                       29
<PAGE>

                           exceeds the amount of such Rent loss that Tenant
                           proves could reasonably have been avoided;

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

                  (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, without
                           limitation, Landlord's unamortized costs of tenant
                           improvements, leasing commissions and legal fees
                           incurred in connection with entering into this Lease.
                           The word "rent" as used in this Section 11.2 shall
                           have the same meaning as the defined term Rent in
                           this Lease. The "worth at the time of award" of the
                           amount referred to in clauses (1) and (2) above is
                           computed by allowing interest at the Default Rate.
                           The worth at the time of award of the amount referred
                           to in clause (3) above is computed by discounting
                           such amount at the discount rate of the Federal
                           Reserve Bank of San Francisco at the time of award
                           plus one percent (1%). For the purpose of determining
                           unpaid Rent under clause (3) above, the monthly Rent
                           reserved in this Lease shall be deemed to be the sum
                           of the Monthly Base Rent, monthly storage space rent,
                           if any, and the amounts last payable by Tenant as
                           Rent Adjustments for the calendar year in which
                           Landlord terminated this Lease as provided
                           hereinabove.

         (c)      Even if Tenant is in Default and/or has abandoned the
                  Premises, this Lease shall continue in effect for so long as
                  Landlord does not terminate Tenant's right to possession by
                  written notice as provided in Section 11.2(b) above, and
                  Landlord may enforce all its rights and remedies under this
                  Lease, including the right to recover Rent as it becomes due
                  under this Lease. In such event, Landlord shall have all of
                  the rights and remedies of a landlord under California Civil
                  Code Section 1951.4 (Landlord may continue Lease in effect
                  after Tenant's Default and abandonment and recover Rent as it
                  becomes due, if Tenant has the right to sublet or assign,
                  subject only to reasonable limitations), or any successor
                  statute. During such time as Tenant is in Default, if Landlord
                  has not terminated this Lease by written notice and if Tenant
                  requests Landlord's consent to an assignment of this Lease or
                  a sublease of the Premises, subject to Landlord's option to
                  recapture pursuant to Section 10.2, Landlord shall not
                  unreasonably withhold its consent to such assignment or
                  sublease. Tenant acknowledges and agrees that the provisions
                  of Article Ten shall be deemed to constitute reasonable
                  limitations of Tenant's right to assign or sublet. Tenant
                  acknowledges and agrees that in the absence of written notice
                  pursuant to Section 11.2(b) above terminating Tenant's right
                  to possession, no other act of Landlord shall constitute a
                  termination of Tenant's right to possession or an acceptance
                  of Tenant's surrender of the Premises, including acts of
                  maintenance or preservation or efforts to relet the Premises
                  or the appointment of a receiver upon initiative of Landlord
                  to protect Landlord's

                                       30
<PAGE>

                  interest under this Lease or the withholding of consent to a
                  subletting or assignment, or terminating a subletting or
                  assignment, if in accordance with other provisions of this
                  Lease.

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

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

         (f)      Notwithstanding any other provision of this Lease, a notice to
                  Tenant given under this Article and Article Twenty-four of
                  this Lease or given pursuant to California Code of Civil
                  Procedure Section 1161, and any notice served by mail shall be
                  deemed served, and the requisite waiting period deemed to
                  begin under said Code of Civil Procedure Section upon mailing,
                  without any additional waiting requirement under Code of Civil
                  Procedure Section 1011 et seq. or by other Law. For purposes
                  of Code of Civil Procedure Section 1162, Tenant's "place of
                  residence", "usual place of business", "the property" and "the
                  place where the property is situated" shall mean and be the
                  Premises, whether or not Tenant has vacated same at the time
                  of service.

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

         (h)      No delay or omission in the exercise of any right or remedy of
                  Landlord upon any default by Tenant, and no exercise by
                  Landlord of its rights pursuant to Section 25.15 to perform
                  any duty which Tenant fails timely to perform, shall impair
                  any right or remedy or be construed as a waiver. No provision
                  of this Lease shall be deemed waived by Landlord unless such
                  waiver is in writing signed by Landlord. The waiver by
                  Landlord of any breach of any provision of this Lease shall
                  not be deemed a waiver of any subsequent breach of the same or
                  any other provision of this Lease.

11.3     ATTORNEY'S FEES

         In the event any party brings any suit or other proceeding with respect
to the subject matter or enforcement of this Lease, the prevailing party (as
determined by the court, agency or other authority before which such suit or
proceeding is commenced) shall, in addition to such other relief as may be
awarded, be entitled to recover attorneys' fees, expenses and costs of
investigation as actually incurred, including court costs, expert witness fees,
costs and expenses

                                       31
<PAGE>

of investigation, and all attorneys' fees, costs and expenses in any such suit
or proceeding (including in any action or participation in or in connection with
any case or proceeding under the Bankruptcy Code, 11 United States Code Sections
101 et seq., or any successor statutes, in establishing or enforcing the right
to indemnification, in appellate proceedings, or in connection with the
enforcement or collection of any judgment obtained in any such suit or
proceeding).

11.4     BANKRUPTCY

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

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

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

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

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

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

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

                           (2)      Landlord has obtained consents or waivers
                                    from any third parties that may be required
                                    under a lease, mortgage, financing

                                       32
<PAGE>

                                    arrangement, or other agreement by which
                                    Landlord is bound, to enable Landlord to
                                    permit such assignment.

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

11.5     LANDLORD'S DEFAULT

         Landlord shall be in default hereunder in the event Landlord has not
begun and pursued with reasonable diligence the cure of any failure of Landlord
to meet its obligations hereunder within thirty (30) days after the receipt by
Landlord of written notice from Tenant of the alleged failure to perform. In no
event shall Tenant have the right to terminate or rescind this Lease as a result
of Landlord's default as to any covenant or agreement contained in this Lease.
Tenant hereby waives such remedies of termination and rescission and hereby
agrees that Tenant's remedies for default hereunder and for breach of any
promise or inducement shall be limited to a suit for damages and/or injunction.
In addition, Tenant hereby covenants that, prior to the exercise of any such
remedies, it will give the Mortgagee notice and a reasonable time to cure any
default by Landlord.

                                   ARTICLE 12

                              SURRENDER OF PREMISES

12.1     IN GENERAL

         Upon the Termination Date, Tenant shall surrender and vacate the
Premises immediately and deliver possession thereof to Landlord in a clean, good
and tenantable condition, excepting ordinary wear and tear, and damage caused by
Landlord. Tenant shall deliver to Landlord all keys to the Premises. Tenant
shall remove from the Premises all movable personal property of Tenant and
Tenant's trade fixtures, including, subject to Section 6.4, cabling for any of
the foregoing. Tenant shall be entitled to remove such Tenant Alterations, which
at the time of their installation Landlord and Tenant agreed may be removed by
Tenant. Tenant shall also remove such other Tenant Alterations as required by
Landlord, including any Tenant Alterations containing Hazardous Materials.
Tenant shall pay any costs Landlord incurs to: (a) repair damage resulting from
removal of any of Tenant's property, furnishings or Tenant Alterations; (b)
close floor, ceiling and roof openings caused by such removal; and (c) restore
the Premises to a tenantable condition as reasonably determined by Landlord. If
any of the Tenant Alterations which were installed by Tenant involved the
lowering of ceilings, raising of floors or the installation of specialized wall
or floor coverings or lights, then Tenant shall also be liable for the cost to
return such surfaces to their condition prior to the commencement of this Lease.
In the event possession of the Premises is not delivered to Landlord when
required hereunder, or if Tenant shall fail to remove those items described
above, Landlord may (but shall not be obligated to), at Tenant's expense, remove
any of such property and store, sell or otherwise deal

                                       33
<PAGE>

with such property as provided in Section 11.2(b), including the waiver and
indemnity obligations provided in that Section.

12.2     LANDLORD'S RIGHTS

         All property which may be removed from the Premises by Landlord shall
be conclusively presumed to have been abandoned by Tenant and Landlord may deal
with such property as provided in Section 11.2(b), including the waiver and
indemnity obligations provided in that Section. Tenant shall also reimburse
Landlord for all costs and expenses incurred by Landlord in removing any of
Tenant Alterations and in restoring the Premises to the condition required by
this Lease at the Termination Date.

                                   ARTICLE 13

                                  HOLDING OVER

         In the event that Tenant holds over in possession of the Premises after
the Termination Date, Tenant shall pay Landlord 125% of the monthly Rent payable
for the month immediately preceding the holding over (including increases for
Rent Adjustments which Landlord may reasonably estimate. Tenant shall also pay
all damages sustained by Landlord by reason of such retention of possession. The
provisions of this Article shall not constitute a waiver by Landlord of any
re-entry rights of Landlord, and Tenant's continued occupancy of the Premises
shall be as a tenancy in sufferance.

                                   ARTICLE 14

                        DAMAGE BY FIRE OR OTHER CASUALTY

14.1     SUBSTANTIAL UNTENANTABILITY

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

         (b)      Unless this Lease is terminated as provided in the preceding
                  subparagraph, Landlord shall proceed with reasonable
                  promptness to repair and restore the Premises to its condition
                  as existed prior to such casualty, subject to reasonable

                                       34
<PAGE>

                  delays for insurance adjustments and Force Majeure delays, and
                  also subject to zoning Laws and building codes then in effect.
                  Landlord shall have no liability to Tenant, and Tenant shall
                  not be entitled to terminate this Lease if such repairs and
                  restoration are not in fact completed within the time period
                  estimated by Landlord so long as Landlord shall proceed with
                  reasonable diligence to complete such repairs and restoration.
                  Notwithstanding the foregoing to the contrary, if the repair
                  and restoration is not completed within two hundred seventy
                  (270) days from the date such damage occurred, then Tenant
                  shall have the right to terminate this Lease as of the two
                  hundred seventy- first (271st) day after the date such damage
                  occurred by providing twenty (20) days prior written notice to
                  Landlord.

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

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

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

14.2     INSUBSTANTIAL UNTENANTABILITY

         If the Premises or the Building is damaged by a casualty but neither is
rendered substantially untenantable for the Permitted Use and Landlord's Notice
indicates that the time to substantially complete the repair or restoration will
not exceed one hundred eighty (180) days from the date such damage occurred,
then Landlord shall proceed to repair and restore the Premises or the Building
other than Tenant Additions, with reasonable promptness; provided, however, if
such damage is to the Premises and occurs during the last twelve (12) months of
the Term and the estimated time to complete repairs exceeds thirty-three and
one-third percent

                                       35
<PAGE>

(33 1/3%) of the then remaining Term, or occurs during the last six (6) months
of the Term (regardless of the estimated repair time), then either Tenant or
Landlord shall have the right to terminate this Lease as of the date of such
casualty by giving written notice thereof to the other within twenty (20) days
after the date of such casualty. Notwithstanding the aforesaid, Landlord's
obligation to repair shall be limited in accordance with the provisions of
Section 14.1 above.

14.3     RENT ABATEMENT

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

14.4     WAIVER OF STATUTORY REMEDIES

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

                                   ARTICLE 15

                                 EMINENT DOMAIN

15.1     TAKING OF WHOLE OR SUBSTANTIAL PART

         In the event the whole or any substantial part of the Building or of
the Premises is taken or condemned by any competent authority for any public use
or purpose (including a deed given in lieu of condemnation) and is thereby
rendered untenantable, this Lease shall terminate as of the date title vests in
such authority, and Monthly Base Rent and Rent Adjustments shall be apportioned
as of the Termination Date. Notwithstanding anything to the contrary herein set
forth, in the event the taking is temporary (for less than the remaining Term of
the Lease), Landlord may elect either (i) to terminate this Lease or (ii) permit
Tenant to receive the entire award attributable to the Premises in which case
Tenant shall continue to pay Rent and this Lease shall not terminate.

15.2     TAKING OF PART

         In the event a part of the Building or the Premises is taken or
condemned by any competent authority (or a deed is delivered in lieu of
condemnation) and this Lease is not terminated, the Lease shall be amended to
reduce or increase, as the case may be, the Monthly

                                       36
<PAGE>

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

15.3     COMPENSATION

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

                                   ARTICLE 16

                                    INSURANCE

16.1     TENANT'S INSURANCE

         Tenant, at Tenant's expense, agrees to maintain in force, with a
company or companies acceptable to Landlord, during the Term: (a) Commercial
General Liability Insurance on a primary basis and without any right of
contribution from any insurance carried by Landlord covering the Premises on a
claims-made basis against all claims for personal injury, bodily injury, death
and property damage, including broad form contractual liability coverage, and
such insurance shall be for such limits that are reasonably required by Landlord
from time to time but not less than a combined single limit of One Million and
No/100 Dollars ($1,000,000.00), plus an umbrella policy of not less than Four
Million and No/100 Dollars ($4,000,000.00), have a retroactive date that is the
same as the Commencement Date and be written with an insurance company having an
A.M. Best Rating of "A-VII" or greater; (b) Workers' Compensation and Employers'
Liability Insurance to the extent required by and in accordance with the Laws of
the State of California; (c) "Special Perils" property insurance in an amount
adequate to cover the full replacement cost of all Tenant Additions, equipment,
installations, fixtures and contents of the Premises in the event of loss; (d)
in the event a motor vehicle is to be used by Tenant in connection with its
business operation from the Premises, Comprehensive Automobile Liability
Insurance coverage with limits of not less than One Million and No/100 Dollars
($1,000,000.00) combined single limit coverage against bodily injury liability
and property damage liability arising out of the use by or on behalf of Tenant,
its agents and employees in connection with this Lease, of any owned, non-owned
or hired motor vehicles; and (e) such other insurance or coverages as Landlord
reasonably requires provided such other insurance or coverages are

                                       37
<PAGE>

consistent with the requirements of landlords of buildings similar to the
Building in the San Francisco Bay Area.

16.2     FORM OF POLICIES

         The Commercial General Liability Insurance and umbrella policies
referred to in 16.1 shall satisfy the following requirements. Each policy shall
(i) name Landlord and the Indemnitees as additional insureds (except Workers'
Compensation and Employers' Liability Insurance), (ii) be issued by one or more
responsible insurance companies licensed to do business in the State of
California reasonably satisfactory to Landlord, (iii) where applicable, provide
for deductible amounts satisfactory to Landlord and not permit co-insurance,
(iv) shall provide that such insurance may not be canceled without thirty (30)
days' prior written notice to the Landlord, and (v) each policy of "Special
Perils" property insurance shall provide that the policy shall not be
invalidated should the insured waive in writing prior to a loss, any or all
rights of recovery against any other party for losses covered by such policies.
Tenant shall deliver to Landlord, certificates of insurance and at Landlord's
request, copies of all policies and renewals thereof to be maintained by Tenant
hereunder, not less than ten (10) days prior to the Commencement Date and not
less than ten (10) days prior to the expiration date of each policy.

16.3     LANDLORD'S INSURANCE

         Landlord agrees to purchase and keep in full force and effect during
the Term hereof, including any extensions or renewals thereof, insurance under
policies issued by insurers of recognized responsibility, qualified to do
business in the State of California on the Building in amounts not less than the
greater of eighty (80%) percent of the then full replacement cost (without
depreciation) of the Building (above foundations and excluding Tenant Additions)
or an amount sufficient to prevent Landlord from becoming a co-insurer under the
terms of the applicable policies, against fire and such other risks as may be
included in standard forms of all risk coverage insurance reasonably available
from time to time. Landlord agrees to maintain in force during the Term,
Commercial General Liability Insurance covering the Building on an occurrence
basis against all claims for personal injury, bodily injury, death, and property
damage. Such insurance shall be for a combined single limit of not less than
Three Million and No/100 Dollars ($3,000,000.00). Neither Landlord's obligation
to carry such insurance nor the carrying of such insurance shall be deemed to be
an indemnity by Landlord with respect to any claim, liability, loss, cost or
expense due, in whole or in part, to Tenant's negligent acts or omissions or
willful misconduct. Without obligation to do so, Landlord may, in its sole
discretion from time to time, carry insurance in amounts greater and/or for
coverage additional to the coverage and amounts set forth above.

16.4     WAIVER OF SUBROGATION

         (a)      Landlord agrees that, if obtainable at no, or minimal,
                  additional cost, and so long as the same is permitted under
                  the laws of the State of California, it will include in its
                  "Special Perils" policies appropriate clauses pursuant to
                  which the insurance companies (i) waive all right of
                  subrogation against Tenant with respect to losses payable
                  under such policies and/or (ii) agree that such policies shall
                  not be

                                       38
<PAGE>

                  invalidated should the insured waive in writing prior to a
                  loss any or all right of recovery against any party for losses
                  covered by such policies.

         (b)      Tenant agrees to include, if obtainable at no, or minimal,
                  additional cost, and so long as the same is permitted under
                  the laws of the State of California, in its "Special Perils"
                  insurance policy or policies on Tenant Additions, whether or
                  not removable, and on Tenant's furniture, furnishings,
                  fixtures and other property removable by Tenant under the
                  provisions of this Lease appropriate clauses pursuant to which
                  the insurance company or companies (i) waive the right of
                  subrogation against Landlord and/or any tenant of space in the
                  Building with respect to losses payable under such policy or
                  policies and/or (ii) agree that such policy or policies shall
                  not be invalidated should the insured waive in writing prior
                  to a loss any or all right of recovery against any party for
                  losses covered by such policy or policies. If Landlord shall
                  be named as an additional insured in accordance with the
                  foregoing, Landlord agrees to endorse promptly to the order of
                  Tenant, without recourse, any check, draft, or order for the
                  payment of money representing the proceeds of any such policy
                  or representing any other payment growing out of or connected
                  with said policies, and Landlord does hereby irrevocably waive
                  any and all rights in and to such proceeds and payments.

         (c)      Provided that Landlord's right of full recovery under its
                  policy or policies aforesaid is not adversely affected or
                  prejudiced thereby, Landlord hereby waives any and all right
                  of recovery which it might otherwise have against Tenant, its
                  servants, agents and employees, for loss or damage occurring
                  to the Real Property and the fixtures, appurtenances and
                  equipment therein, to the extent the same is covered by
                  Landlord's insurance, notwithstanding that such loss or damage
                  may result from the negligence or fault of Tenant, its
                  servants, agents or employees. Provided that Tenant's right of
                  full recovery under its aforesaid policy or policies is not
                  adversely affected or prejudiced thereby, Tenant hereby waives
                  any and all right of recovery which it might otherwise have
                  against Landlord, its servants, and employees and against
                  every other tenant of the Real Property who shall have
                  executed a similar waiver as set forth in this Section 16.4
                  (c) for loss or damage to Tenant Additions, whether or not
                  removable, and to Tenant's furniture, furnishings, fixtures
                  and other property removable by Tenant under the provisions
                  hereof to the extent the same is coverable by Tenant's
                  insurance required under this Lease, notwithstanding that such
                  loss or damage may result from the negligence or fault of
                  Landlord, its servants, agents or employees, or such other
                  tenant and the servants, agents or employees thereof.

         (d)      Landlord and Tenant hereby agree to advise the other promptly
                  if the clauses to be included in their respective insurance
                  policies pursuant to subparagraphs (a) and (b) above cannot be
                  obtained on the terms hereinbefore provided and thereafter to
                  furnish the other with a certificate of insurance or copy of
                  such policies showing the naming of the other as an additional
                  insured, as aforesaid. Landlord and Tenant hereby also agree
                  to notify the other promptly of any cancellation or change of
                  the terms of any such policy that would affect such clauses or
                  naming.

                                       39
<PAGE>

16.5     NOTICE OF CASUALTY

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

                                   ARTICLE 17

                         WAIVER OF CLAIMS AND INDEMNITY

17.1     WAIVER OF CLAIMS

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

17.2     INDEMNITY BY TENANT

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

                                       40
<PAGE>

indemnity is subject to and shall not diminish any waivers in effect in
accordance with Section 16.4 by Landlord or its insurers to the extent of
amounts, if any, paid to Landlord under its "Special Perils" property insurance.

17.3     INDEMNITY BY LANDLORD

         To the extent permitted by Law, Landlord hereby indemnifies, and agrees
to protect, defend and hold Tenant harmless from and against any and all
liability, loss, suits, claims, actions, costs and expense, including without
limitation, any attorney's fees, arising from any contamination of the Premises
or the Property (including the underlying land and groundwater) by any Hazardous
Materials, where such contamination was not caused by Tenant. The provision of
this Section 17.3 shall survive the expiration or earlier termination of the
Term. Nothing in this Section 17.3 shall be deemed to modify Tenant's
obligations under Section 4.1 of the Lease.

                                   ARTICLE 18

                              RULES AND REGULATIONS

18.1     RULES

         Tenant agrees for itself and for its subtenants, employees, agents, and
invitees to comply with the rules and regulations listed on Exhibit C attached
hereto and with all reasonable modifications and additions thereto which
Landlord may make from time to time.

18.2     ENFORCEMENT

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

                                   ARTICLE 19

                           LANDLORD'S RESERVED RIGHTS

         Landlord shall have the following rights exercisable without notice to
Tenant and without liability to Tenant for damage or injury to persons, property
or business and without being deemed an eviction or disturbance of Tenant's use
or possession of the Premises or giving rise to any claim for offset or
abatement of Rent: (1) to change the Building's name or street address upon
thirty (30) days' prior written notice to Tenant; (2) to install, affix and
maintain all signs on the exterior and/or interior of the Building; (3) to
designate and/or approve prior to installation, all types of signs, window
shades, blinds, drapes, awnings or other similar items, and all internal
lighting that may be visible from the exterior of the Premises; (4) upon
reasonable notice to Tenant, to display the Premises to prospective purchasers
and lenders at reasonable hours at any time during the Term and to prospective
tenants at reasonable hours during the last twelve (12)

                                       41
<PAGE>

months of the Term; (5) to grant to any party the exclusive right to conduct any
business or render any service in or to the Building, provided such exclusive
right shall not operate to prohibit Tenant from using the Premises for the
purpose permitted hereunder; (6) to change the arrangement and/or location of
entrances or passageways, doors and doorways, corridors, elevators, stairs,
washrooms or public portions of the Building, and to close entrances, doors,
corridors, elevators or other facilities, provided that such action shall not
materially and adversely interfere with Tenant's access to the Premises or the
Building; (7) to have access for Landlord and other tenants of the Building to
any mail chutes and boxes located in or on the Premises as required by any
applicable rules of the United States Post Office; and (8) to close the Building
after Standard Operating Hours, except that Tenant and its employees and
invitees shall be entitled to admission at all times, under such regulations as
Landlord prescribes for security purposes.

                                   ARTICLE 20

                              ESTOPPEL CERTIFICATE

20.1     IN GENERAL

         Within ten (10) days after request therefor by Landlord, Tenant,
Mortgagee or any prospective mortgagee or owner, Tenant or Landlord agrees as
directed in such request to execute an Estoppel Certificate in recordable form,
binding upon Tenant or Landlord , certifying (i) that this Lease is unmodified
and in full force and effect (or if there have been modifications, a description
of such modifications and that this Lease as modified is in full force and
effect); (ii) the dates to which Rent has been paid; (iii) that Tenant is in the
possession of the Premises if that is the case; (iv) that to the knowledge of
the party completing the Estoppel Certificate, Landlord or Tenant (as
applicable) is not in default under this Lease, or, if a default has occurred,
the nature thereof in detail; (v) (if Tenant is completing Estoppel Certificate)
that Tenant , to its knowledge, has no offsets or defenses to the performance of
its obligations under this Lease (or if Tenant believes there are any offsets or
defenses, a full and complete explanation thereof); (vi) that the Premises have
been completed in accordance with the terms and provisions hereof or the
Workletter, that Tenant has accepted the Premises and the condition thereof and
of all improvements thereto and has no claims against Landlord or any other
party with respect thereto; (vii) (if Tenant is completing Estoppel Certificate)
that if an assignment of rents or leases has been served upon the Tenant by a
Mortgagee, Tenant will acknowledge receipt thereof and agree to be bound by the
reasonable provisions thereof; (viii) (if Tenant is completing Estoppel
Certificate) that Tenant will give to the Mortgagee copies of all notices
required or permitted to be given by Tenant to Landlord; and (ix) to any other
information reasonably requested. Landlord or Tenant shall pay all reasonable
attorneys' fees and expenses incurred by the requesting party with respect to
executing the Estoppel Certificate.

20.2     ENFORCEMENT

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

                                       42
<PAGE>

                                   ARTICLE 21

                              RELOCATION OF TENANT

         [INTENTIONALLY OMITTED]

                                   ARTICLE 22

                               REAL ESTATE BROKERS

         Tenant represents that Tenant has not dealt with any real estate
broker, sales person, or finder in connection with this Lease, and no such
person initiated or participated in the negotiation of this Lease, or showed the
Premises to Tenant. Tenant hereby agrees to indemnify, protect, defend and hold
Landlord and the Indemnitees, harmless from and against any and all liabilities
and claims for commissions and fees arising out of a breach of the foregoing
representation. Landlord agrees to pay any commission to which the brokers
listed in Section 1.1 are entitled in connection with this Lease pursuant to
Landlord's written agreement with such broker.

                                   ARTICLE 23

                              MORTGAGEE PROTECTION

23.1     SUBORDINATION AND ATTORNMENT

         This Lease is and shall be expressly subject and subordinate at all
times to (i) any ground or underlying lease of the Real Property, now or
hereafter existing, and all amendments, extensions, renewals and modifications
to any such lease, and (ii) the lien of any mortgage or trust deed now or
hereafter encumbering fee title to the Real Property and/or the leasehold estate
under any such lease, and all amendments, extensions, renewals, replacements and
modifications of such mortgage or trust deed and/or the obligation secured
thereby, unless such ground lease or ground lessor, or mortgage, trust deed or
Mortgagee, expressly provides or elects that the Lease shall be superior to such
lease or mortgage or trust deed. If any such mortgage or trust deed is
foreclosed (including any sale of the Real Property pursuant to a power of
sale), or if any such lease is terminated, upon request of the Mortgagee or
ground lessor, as the case may be, Tenant shall attorn to the purchaser at the
foreclosure sale or to the ground lessor under such lease, as the case may be,
provided, however, that such purchaser or ground lessor shall not be (i) bound
by any payment of Rent for more than one month in advance except payments in the
nature of security for the performance by Tenant of its obligations under this
Lease; (ii) subject to any offset, defense or damages arising out of a default
of any obligations of any preceding Landlord; or (iii) bound by any amendment or
modification of this Lease made without the written consent of the Mortgagee or
ground lessor subsequent to the date of such Mortgagee's or ground lessor's
security interest; or (iv) liable for any security deposits not actually
received in cash by such purchaser or ground lessor. This subordination shall be
self-operative and no further certificate or instrument of subordination need be
required by any such Mortgagee or ground lessor. In confirmation of such
subordination, however, Tenant shall execute promptly any reasonable certificate
or instrument that Landlord, Mortgagee or ground lessor may request. Tenant
hereby

                                       43
<PAGE>

constitutes Landlord as Tenant's attorney-in-fact to execute such certificate or
instrument for and on behalf of Tenant upon Tenant's failure to do so within
fifteen (15) days of a request to do so. Upon request by such successor in
interest, Tenant shall execute and deliver reasonable instruments confirming the
attornment provided for herein.

         Notwithstanding the foregoing, upon written request by Tenant, Landlord
will use reasonable efforts to obtain a non-disturbance, subordination and
attornment agreement from Landlord's then current Mortgagee on such Mortgagee's
then current standard form of agreement. "Reasonable efforts" of Landlord shall
not require Landlord to incur any cost, expense or liability to obtain such
agreement, it being agreed that Tenant shall be responsible for any fee or
review costs charged by the Mortgagee. Upon request of Landlord, Tenant will
execute the Mortgagee's form of non-disturbance, subordination and attornment
agreement and return the same to Landlord for execution by the Mortgagee.
Landlord's failure to obtain a non-disturbance, subordination and attornment
agreement for Tenant shall have no effect on the rights, obligations and
liabilities of Landlord and Tenant or be considered to be a default by Landlord
hereunder.

23.2     MORTGAGEE PROTECTION

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

                                   ARTICLE 24

                                     NOTICES

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

                                       44
<PAGE>

pursuant to this Lease shall be deemed to have been properly given or served by
delivering or sending the same in accordance with this Section, addressed to the
parties hereto at their respective addresses listed in Sections 1.1. Notices,
demands or requests sent by mail or overnight courier service as described above
shall be effective upon deposit in the mail or with such courier service.
However, the time period in which a response to any such notice, demand or
request must be given shall commence to run from (i) in the case of delivery by
mail, the date of receipt on the return receipt of the notice, demand or request
by the addressee thereof, or (ii) in the case of delivery by Federal Express or
other overnight courier service, the date of acceptance of delivery by an
employee, officer, director or partner of Landlord or Tenant. Rejection or other
refusal to accept or the inability to deliver because of changed address of
which no notice was given, as indicated by advice from Federal Express or other
overnight courier service or by mail return receipt, shall be deemed to be
receipt of notice, demand or request sent. Notices may also be served by
personal service upon any officer, director or partner of Landlord or Tenant,
and shall be effective upon such service. By giving to the other party at least
thirty (30) days written notice thereof, either party shall have the right from
time to time during the term of this Lease to change their respective addresses
for notices, statements, demands and requests, provided such new address shall
be within the United States of America.

                                   ARTICLE 25

                                  MISCELLANEOUS

25.1     LATE CHARGES

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

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

                                       45
<PAGE>

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

25.2     NO JURY TRIAL; VENUE; JURISDICTION

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

25.3     OPTION

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

25.4     AUTHORITY

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

25.5     ENTIRE AGREEMENT

         This Lease, plus the Exhibits, the Rider (if any) and the Addendum (if
any), attached hereto contain the entire agreement between Landlord and Tenant
concerning the Premises and there are no other agreements, either oral or
written, and no other representations or statements,

                                       46
<PAGE>

either oral or written, on which Tenant has relied. This Lease shall not be
modified except by a writing executed by Landlord and Tenant.

25.6     MODIFICATION OF LEASE FOR BENEFIT OF MORTGAGEE

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

25.7     EXCULPATION

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

25.8     ACCORD AND SATISFACTION

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

25.9     LANDLORD'S OBLIGATIONS ON SALE OF BUILDING

         In the event of any sale or other transfer of the Building, Landlord
shall be entirely freed and relieved of all agreements and obligations of
Landlord hereunder accruing or to be performed after the date of such sale or
transfer, provided such transferee has expressly assumed such obligations of
Landlord. Landlord agrees to transfer any Security Deposit held hereunder;
provided, however, Landlord shall have no liability or obligation to Tenant if
such buyer or transferee breaches its obligation to credit Tenant for such
transferred Security Deposit. Landlord shall have the right to assign this Lease
to an entity comprised of the principals of Landlord or affiliates of such
entities. Upon such assignment and assumption of the obligations of Landlord
hereunder, Landlord shall be entirely freed and relieved of all obligations
hereunder after the date of transfer.

                                       47
<PAGE>

25.10    BINDING EFFECT

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

25.11    CAPTIONS

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

25.12    TIME; APPLICABLE LAW; CONSTRUCTION

         Time is of the essence of this Lease and each and all of its
provisions. This Lease shall be construed in accordance with the Laws of the
State of California. If more than one person signs this Lease as Tenant, the
obligations hereunder imposed shall be joint and several. If any term, covenant
or condition of this Lease or the application thereof to any person or
circumstance shall, to any extent, be invalid or unenforceable, the remainder of
this Lease, or the application of such term, covenant or condition to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each item, covenant or condition of this Lease
shall be valid and be enforced to the fullest extent permitted by Law. Wherever
the term "including" or "includes" is used in this Lease, it shall have the same
meaning as if followed by the phrase "but not limited to". The language in all
parts of this Lease shall be construed according to its normal and usual meaning
and not strictly for or against either Landlord or Tenant.

25.13    ABANDONMENT

         In the event Tenant abandons the Premises but is otherwise in
compliance with all the terms, covenants and conditions of this Lease, Landlord
shall (i) have the right to enter into the Premises in order to show the space
to prospective tenants, (ii) have the right to reduce the services provided to
Tenant pursuant to the terms of this Lease to such levels as Landlord reasonably
determines to be adequate services for an unoccupied premises and (iii) during
the last six (6) months of the Term, have the right to prepare the Premises for
occupancy by another tenant upon the end of the Term. Tenant expressly
acknowledges that in the absence of written notice pursuant to Section 11.2(b)
or pursuant to California Civil Code Section 1951.3 terminating Tenant's right
to possession, none of the foregoing acts of Landlord or any other act of
Landlord shall constitute a termination of Tenant's right to possession or an
acceptance of Tenant's surrender of the Premises, and the Lease shall continue
in effect.

25.14    LANDLORD'S RIGHT TO PERFORM TENANT'S DUTIES

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

                                       48
<PAGE>

25.15    SECURITY SYSTEM

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

25.16    NO LIGHT, AIR OR VIEW EASEMENTS

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

25.17    CONSENTS

         Wherever the consent, approval, judgment or determination of Landlord
or Tenant is required or permitted under this Lease, such consent, approval,
judgment or determination shall not be unreasonably withheld, conditioned or
delayed, unless the Lease specifically otherwise specifies the standards under
which Landlord or Tenant may withhold its consent.

25.18    RECORDATION

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

25.19    SURVIVAL

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

25.20    RIDERS

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




                                       49
<PAGE>

         IN WITNESS WHEREOF, this Lease has been executed as of the date set
forth in Section 1.1 hereof.

TENANT:                                   LANDLORD:

DYNAVAX TECHNOLOGIES CORPORATION,         2929 SEVENTH STREET, L.L.C.,
a Delaware corporation                    a California limited liability company


By: /s/ Dino Dina                         By:  /s/ Richard K. Robbins
   ____________________________________       __________________________________
   Dino Dina, M.D.                               Richard K. Robbins
   President and Chief Executive Officer         Managing Member

                                       50
<PAGE>

                                    EXHIBIT A

                                PLAN OF PREMISES

                                       A-1
<PAGE>

                                    EXHIBIT B

                              WORKLETTER AGREEMENT

         This Workletter Agreement ("Workletter") is attached to and a part of a
certain Lease herewith by 2929 Seventh Street, L.L.C., a California limited
liability company, as Landlord, and Dynavax Technologies Corporation, a Delaware
corporation, as Tenant, for the Premises as described therein (the "Lease").

         1.       Capitalized terms used in this Work Letter shall have the same
meanings set forth in the Lease except as otherwise specified herein and except
for terms capitalized in the ordinary course of punctuation.

         2.       Landlord shall perform improvements to the Premises in
accordance with the following work list (the "Worklist") using Building standard
methods, materials and finishes (except as otherwise specified). The
improvements to be performed in accordance with the Worklist are hereinafter
referred to as the "Landlord Work" and shall be performed at Landlord's sole
cost and expense. Landlord shall enter into direct contracts for the Landlord
Work with subcontractors selected by Landlord.

                                    WORK LIST

          A.      Replace the chain link fence at the top of the west stairs
                  between the 2 suites comprising the Premises (the "West
                  Stairs") with a sheetrock wall of appropriate height to meet
                  the requirements of the Uniform Building Code.

          B.      Replace the wooden handrail on the West Stairs with a more
                  substantial handrail of a design and material that is
                  reasonably acceptable to both Landlord and Tenant.

         3.        All other work and upgrades, subject to Landlord's approval,
shall be at Tenant's sole cost and expense (subject to the terms of Section 9.1
of the Lease), plus any applicable state sales or use tax thereon. Tenant shall
be responsible for any Tenant Delay in completion of the Premises resulting from
any such other work and upgrades requested or performed by Tenant.

         4.       Other than as specified above, Landlord's supervision or
performance of any work for or on behalf of Tenant shall not be deemed to be a
representation by Landlord that such work complies with applicable insurance
requirements, building codes, ordinances, laws or regulations or that the
improvements constructed will be adequate for Tenant's use.

                                       B-1
<PAGE>

                                    EXHIBIT C

                              RULES AND REGULATIONS

         1.       No sidewalks, entrance, passages, courts, elevators,
vestibules, stairways, corridors or halls shall be obstructed or encumbered by
Tenant or used for any purpose other than ingress and egress to and from the
Premises and if the Premises are situated on the ground floor of the Property,
Tenant shall further, at Tenant's own expense, keep the sidewalks and curb
directly in front of the Premises clean and free from rubbish.

         2.       No awning or other Projection shall be attached to the outside
walls or windows of the Property without the prior written consent of Landlord.
No curtains, blinds, shades, drapes or screens shall be attached to or hung in,
or used in connection with any window or door of the Premises, without the prior
written consent of Landlord. Such awnings, Projections, curtains, blinds,
shades, drapes, screens and other fixtures must be of a quality, type, design,
color, material and general appearance approved by Landlord, and shall be
attached in the manner approved by Landlord. All lighting fixtures hung in
offices or spaces along the perimeter of the Premises must be of a quality,
type, design, bulb color, size and general appearance approved by Landlord.

         3.       No sign, advertisement, notice, lettering, decoration or other
thing shall be exhibited, inscribed, painted or affixed by Tenant on any part of
the outside or inside of the Premises or of the Property, without the prior
written consent of Landlord. In the event of the violation of the foregoing by
Tenant, Landlord may remove same without any liability, and may charge the
expense incurred by such removal to Tenant.

         4.       The sashes, sash doors, skylights, windows and doors that
reflect or admit light or air into the halls, passageways or other public places
in the Property shall not be covered or obstructed by Tenant, nor shall any
bottles, parcels or other articles be placed on the window sills or in the
public portions of the Property.

         5.       No showcases or other articles shall be put in front of or
affixed to any part of the exterior of the Property, nor placed in public
portions thereof without the prior written consent of Landlord.

         6.       The water and wash closets and other plumbing fixtures shall
not be used for any purposes other than those for which they were constructed,
and no sweepings, rubbish, rags or other substances shall be thrown therein. All
damages resulting from any misuse of the fixtures shall be borne by Tenant to
the extent that Tenant or Tenant's agents, servants, employees, contractors,
visitors or licensees shall have caused the same.

         7.       Tenant shall not mark, paint, drill into or in any way deface
any part of the Premises or the Property. No boring, cutting or stringing of
wires shall be permitted, except with the prior written consent of Landlord, and
as Landlord may direct.

         8.       No animal or bird of any kind shall be brought into or kept in
or about the Premises or the Property, except seeing-eye dogs, other seeing-eye
animals or animals used in connection with Tenant's laboratory use of the
Premises.

                                       C-1
<PAGE>

         9.       Prior to leaving the Premises for the day, Tenant shall draw
or lower window coverings and extinguish all lights.

         10.      Tenant shall not make, or permit to be made, any unseemly or
disturbing noises or disturb or interfere with occupants of the Property, or
neighboring buildings or premises, or those having business with them. Tenant
shall not throw anything out of the doors, windows or skylights or down the
passageways.

         11.      Neither Tenant nor any of Tenant's agents, servants,
employees, contractors, visitors or licensees shall at any time bring or keep
upon the Premises any flammable, combustible or explosive fluid, chemical or
substance.

         12.      No additional locks, bolts or mail slots of any kind shall be
placed upon any of the doors or windows by Tenant, nor shall any change be made
in existing locks or the mechanism thereof. Tenant must, upon the termination of
the tenancy, restore to Landlord all keys of stores, offices and toilet rooms,
either furnished to, or otherwise procured by Tenant, and in the event of the
loss of any keys so furnished, Tenant shall pay to Landlord the cost thereof.

         13.      All removals, or the carrying in or out of any safes, freight,
furniture, construction material, bulky matter or heavy equipment of any
description must take place during the hours which Landlord or its agent may
determine from time to time. Landlord reserves the right to prescribe the weight
and position of all safes, which must be placed upon two-inch thick plank strips
to distribute the weight. The moving of safes, freight, furniture, fixtures,
bulky matter or heavy equipment of any kind must be made upon previous notice to
the Building Manager and in a manner and at times prescribed by him, and the
persons employed by Tenant for such work are subject to Landlord's prior
approval. Landlord reserves the right to inspect all safes, freight or other
bulky articles to be brought into the Property and to exclude from the Property
all safes, freight or other bulky articles which violate any of these Rules and
Regulations or the Lease of which these Rules and Regulations are a part.

         14.      Tenant shall not purchase spring water, towels, janitorial or
maintenance or other like service from any company or persons not approved by
Landlord. Landlord shall approve a sufficient number of sources of such services
to provide Tenant with a reasonable selection, but only in such instances and to
such extent as Landlord in its judgment shall consider consistent with security
and proper operation of the Property.

         15.      Landlord shall have the right to prohibit any advertising or
business conducted by Tenant referring to the Property which, in Landlord's
opinion, tends to impair the reputation of the Property or its desirability as a
first class building for offices and/or commercial services and upon notice from
Landlord, Tenant shall refrain from or discontinue such advertising.

         16.      Tenant's contractors shall, while in the Premises or elsewhere
in the Property, be subject to and under the control and direction of the
Building Manager (but not as agent or servant of said Building Manager or of
Landlord).

         17.      If the Premises is or becomes infested with vermin as a result
of the use or any misuse or neglect of the Premises by Tenant, its agents,
servants, employees, contractors, visitors or licensees, Tenant shall forthwith
at Tenant's expense cause the same to be exterminated from

                                       C-2
<PAGE>

time to time to the satisfaction of Landlord and shall employ such licensed
exterminators as shall be approved in writing in advance by Landlord.

         18.      The requirements of Tenant will be attended to only upon
application at the office of the Property. Property personnel shall not perform
any work or do anything outside of their regular duties unless under special
instructions from the office of the Landlord.

         19.      Canvassing, soliciting and peddling in the Property are
prohibited and Tenant shall cooperate to prevent the same.

         20.      No water cooler, air conditioning unit or system or other
apparatus shall be installed or used by Tenant without the written consent of
Landlord.

         21.      There shall not be used in any premises, or in the public
halls, plaza areas, lobbies, or elsewhere in the Property, either by Tenant or
by Tenant's contractors or others, in the delivery or receipt of merchandise,
any hand trucks or dollies, except those equipped with rubber tires and
sideguards.

         22.      Tenant, Tenant's agents, servants, employees, contractors,
licensees, or visitors shall not park any vehicles in any driveways, service
entrances, or areas posted "No Parking" and shall comply with any other parking
restrictions imposed by Landlord from time to time.

         23.      Tenant shall install and maintain, at Tenant's sole cost and
expense, an adequate visibly marked (at all times properly operational) fire
extinguisher next to any duplicating or photocopying machine or similar heat
producing equipment, which may or may not contain combustible material, in the
Premises.

         24.      Tenant shall not use the name of the Property for any purpose
other than as the address of the business to be conducted by Tenant in the
Premises, nor shall Tenant use any picture of the Property in its advertising,
stationery or in any other manner without the prior written permission of
Landlord. Landlord expressly reserves the right at any time to change said name
without in any manner being liable to Tenant therefor.

         25.      Tenant shall not prepare any food nor do any cooking, operate
or conduct any restaurant, luncheonette or cafeteria for the sale or service of
food or beverages to its employees or to others, except that food and beverage
preparation by Tenant's employees using microwave ovens or coffee makers shall
be permitted provided no odors of cooking or other processes emanate from the
Premises without the prior approval of Landlord. Tenant shall not install or
permit the installation or use of any vending machine or permit the delivery of
any food or beverage to the Premises except by such persons and in such manner
as are approved in advance in writing by Landlord.

         26.      The Premises shall not be used as an employment agency, a
public stenographer or typist, a labor union office, a physician's or dentist's
office, a dance or music studio, a school, a beauty salon, or barber shop, the
business of photographic, multilith or multigraph reproductions or offset
printing (not precluding using any part of the Premises for photographic,
multilith or multigraph reproductions solely in connection with Tenant's own
business and/or activities), a restaurant or bar, an establishment for the sale
of confectionery, soda, beverages,

                                       C-3
<PAGE>

sandwiches, ice cream or baked goods, an establishment for preparing, dispensing
or consumption of food or beverages of any kind in any manner whatsoever, or
news or cigar stand, or a radio, television or recording studio, theatre or
exhibition hall, or manufacturing, or the storage or sale of merchandise, goods,
services or property of any kind at wholesale, retail or auction, or for
lodging, sleeping or for any immoral purposes.

         27.      Business machines and mechanical equipment shall be placed and
maintained by Tenant at Tenant's expense in settings sufficient in Landlord's
judgment to absorb and prevent vibration, noise and annoyance. Tenant shall not
install any machine or equipment which causes noise, heat, cold or vibration to
be transmitted to the structure of the building in which the Premises are
located without Landlord's prior written consent, which consent may be
conditioned on such terms as Landlord may require. Tenant shall not place a load
upon any floor of the Premises exceeding the floor load per square foot that
such floor was designed to carry and which is allowed by Law.

         28.      Tenant shall not bring any Hazardous Materials onto the
Premises except for those that are in general commercial and laboratory use and
are incidental to Tenant's business operations and only in quantities suitable
for immediate use.

         29.      Tenant shall not store any vehicle within the parking area.
Tenant's parking rights are limited to the use of parking spaces for short-term
parking, of up to twenty-four (24) hours, of vehicles utilized in the normal and
regular daily travel to and from the Property. Tenants who wish to park a
vehicle for longer than a 24-hour period shall notify the Building Manager for
the Property and consent to such long-term parking may be granted for periods up
to two (2) weeks. Any motor vehicles parked without the prior written consent of
the Building Manager for the Property for longer than a 24-hour period shall be
deemed stored in violation of this rule and regulation and shall be towed away
and stored at the owner's expense or disposed of as provided by Law.

         30.      Smoking is prohibited in the Premises, the Building and all
enclosed Common Areas of the Property, including all lobbies, all hallways, all
elevators and all lavatories.

         31.      In the event of any conflict between these Rules and
Regulations and any other Lease provision, such other Lease provision shall
control.

                                       C-4
<PAGE>

                                    EXHIBIT D

                                LETTER OF CREDIT

              IRREVOCABLE STANDBY LETTER OF CREDIT NO. SVBSF______

                                                        DATED: ___________, 20__

BENEFICIARY:
2929 SEVENTH STREET, L.L.C.
C/O WAREHAM PROPERTY GROUP
1120 NYE STREET, SUITE 400
SAN RAFAEL, CALIFORNIA 94901

AS "LANDLORD"

APPLICANT:
DYNAVAX TECHNOLOGIES CORPORATION
2929 SEVENTH STREET
BERKELEY, CALIFORNIA 94710

ATTENTION: MR. WILLIAM J. DAWSON

AS "TENANT"

AMOUNT:  US$76,953.75 (SEVENTY-SIX THOUSAND NINE HUNDRED FIFTY-THREE AND 75/100
         U.S. DOLLARS)

EXPIRATION DATE:  __________ ___, _____ [THIS IS THE INITIAL EXPIRATION DATE.
                                        CLIENT MUST PROVIDE US THIS DATE PRIOR
                                        TO ISSUANCE OF THE LC]

LOCATION:         SANTA CLARA, CALIFORNIA

LADIES AND GENTLEMEN:

WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. SVBSF_____ IN
YOUR FAVOR. THIS LETTER OF CREDIT IS AVAILABLE BY SIGHT PAYMENT WITH OURSELVES
ONLY AGAINST PRESENTATION AT THIS OFFICE OF THE FOLLOWING DOCUMENTS:

    1.   THE ORIGINAL OF THIS LETTER OF CREDIT AND ALL AMENDMENT (S), IF ANY.

    2.   YOUR SIGHT DRAFT DRAWN ON US IN THE FORM ATTACHED HERETO AS EXHIBIT
         "A".

    3.   A DATED CERTIFICATION PURPORTEDLY SIGNED BY AN AUTHORIZED OFFICER OR
         REPRESENTATIVE OF THE BENEFICIARY, FOLLOWED BY HIS/HER PRINTED NAME AND
         DESIGNATED TITLE, STATING EITHER OF THE FOLLOWING, WITH INSTRUCTIONS IN
         BRACKETS THEREIN COMPLIED WITH:

              (A.)"AN EVENT OF DEFAULT (AS DEFINED IN THE LEASE) HAS OCCURRED BY
                  [INSERT NAME] AS TENANT UNDER THAT CERTAIN LEASE AGREEMENT BY
                  AND BETWEEN TENANT, AND BENEFICIARY, AS LANDLORD AND THE TERMS
                  AND CONDITIONS OF THE LEASE AUTHORIZE LANDLORD TO NOW DRAW
                  DOWN ON THE LETTER OF CREDIT."

                                       OR

                                       D-1
<PAGE>

              (B.)"WITHIN THIRTY (30) DAYS PRIOR TO THE EXPIRY DATE OF THIS
                  LETTER OF CREDIT BENEFICIARY HAS NOT RECEIVED AN EXTENSION AT
                  LEAST FOR ONE YEAR TO THE EXISTING LETTER OF CREDIT OR A
                  REPLACEMENT LETTER OF CREDIT SATISFACTORY TO THE BENEFICIARY."

WE AGREE THAT WE SHALL HAVE NO DUTY OR RIGHT TO INQUIRE AS TO THE BASIS UPON
WHICH LANDLORD HAS DETERMINED THAT THE AMOUNT IS DUE AND OWING OR HAS DETERMINED
TO PRESENT TO US ANY DRAFT UNDER THIS LETTER OF CREDIT, AND THE PRESENTATION OF
SUCH DRAFT PRESENTED IN STRICT COMPLIANCE WITH THE TERMS AND CONDITIONS OF THIS
LETTER OF CREDIT, SHALL AUTOMATICALLY RESULT IN PAYMENT TO LANDLORD.

PARTIAL DRAWS ARE ALLOWED.

THIS LETTER OF CREDIT MUST ACCOMPANY ANY DRAWINGS HEREUNDER FOR ENDORSEMENT OF
THE DRAWING AMOUNT AND WILL BE RETURNED TO THE BENEFICIARY UNLESS IT IS FULLY
UTILIZED.

THIS LETTER OF CREDIT SHALL BE AUTOMATICALLY EXTENDED FOR AN ADDITIONAL PERIOD
OF ONE YEAR, WITHOUT AMENDMENT, FROM THE PRESENT OR EACH FUTURE EXPIRATION DATE
UNLESS AT LEAST THIRTY (30) DAYS PRIOR TO THE THEN CURRENT EXPIRATION DATE WE
NOTIFY YOU BY REGISTERED MAIL/OVERNIGHT COURIER SERVICE AT THE ABOVE ADDRESS
THAT THIS LETTER OF CREDIT WILL NOT BE EXTENDED BEYOND THE CURRENT EXPIRATION
DATE.

THIS LETTER OF CREDIT MAY ONLY BE TRANSFERRED IN ITS ENTIRETY BY THE ISSUING
BANK UPON OUR RECEIPT OF THE ATTACHED EXHIBIT "B" DULY COMPLETED AND EXECUTED BY
THE BENEFICIARY AND ACCOMPANIED BY THE ORIGINAL LETTER OF CREDIT AND ALL
AMENDMENT(S), IF ANY. APPLICANT SHALL PAY OUR TRANSFER FEE OF -1/4 OF 1% OF THE
TRANSFER AMOUNT (MINIMUM US$250.00) UNDER THIS LETTER OF CREDIT. ANY REQUEST FOR
TRANSFER WILL BE EFFECTED BY US SUBJECT TO THE ABOVE CONDITIONS. HOWEVER, ANY
REQUEST FOR TRANSFER IS NOT CONTINGENT UPON APPLICANT'S ABILITY TO PAY OUR
TRANSFER FEE.

ANY TRANSFER OF THIS LETTER OF CREDIT MAY NOT CHANGE THE PLACE OR DATE OF
EXPIRATION OF THE LETTER OF CREDIT FROM OUR ABOVE SPECIFIED OFFICE. EACH
TRANSFER SHALL BE EVIDENCED BY OUR ENDORSEMENT ON THE REVERSE OF THE LETTER OF
CREDIT AND WE SHALL FORWARD THE ORIGINAL OF THE LETTER OF CREDIT SO ENDORSED TO
THE TRANSFEREE.

DRAFT(S) AND DOCUMENTS MUST INDICATE THE NUMBER AND DATE OF THIS LETTER OF
CREDIT.

DOCUMENTS MUST BE DELIVERED TO US DURING REGULAR BUSINESS HOURS ON A BUSINESS
DAY OR FORWARDED TO US BY OVERNIGHT DELIVERY SERVICE TO: SILICON VALLEY BANK,
3003 TASMAN DRIVE, 2ND FLOOR, MAIL SORT HF210, SANTA CLARA, CALIFORNIA 95054,
ATTENTION: INTERNATIONAL DIVISION - STANDBY LETTER OF CREDIT NEGOTIATION
DEPARTMENT (THE "BANK'S OFFICE).

AS USED HEREIN, THE TERM "BUSINESS DAY" MEANS A DAY ON WHICH WE ARE OPEN AT OUR
ABOVE ADDRESS IN SANTA CLARA, CALIFORNIA TO CONDUCT OUR LETTER OF CREDIT
BUSINESS. NOTWITHSTANDING ANY PROVISION TO THE CONTRARY IN THE UCP (AS
HEREINAFTER DEFINED), IF THE EXPIRATION DATE OR THE FINAL EXPIRATION DATE IS NOT
A BUSINESS DAY THEN SUCH DATE SHALL BE AUTOMATICALLY EXTENDED TO THE NEXT
SUCCEEDING DATE WHICH IS A BUSINESS DAY.

WE HEREBY ENGAGE WITH YOU THAT DRAFT(S) DRAWN AND/OR DOCUMENTS PRESENTED UNDER
AND IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS LETTER OF CREDIT

                                       D-2
<PAGE>

SHALL BE DULY HONORED UPON PRESENTATION TO SILICON VALLEY BANK, IF PRESENTED ON
OR BEFORE THE EXPIRATION DATE OF THIS CREDIT.

THIS LETTER OF CREDIT IS SUBJECT TO THE UNIFORM CUSTOMS AND PRACTICE FOR
DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF COMMERCE,
PUBLICATION NO. 500 (THE "UCP").

SILICON VALLEY BANK,

____________________                        ____________________
AUTHORIZED SIGNATURE                        AUTHORIZED SIGNATURE

                                      D-3
<PAGE>

                                   EXHIBIT "A"

                          SIGHT DRAFT/BILL OF EXCHANGE

     DATE: _______________                     REF. NO. ___________________

     AT SIGHT OF THIS BILL OF EXCHANGE

     PAY TO THE ORDER OF __________________________________ US$_________________
     US DOLLARS ________________________________________________________________

     "DRAWN UNDER SILICON VALLEY BANK, SANTA CLARA, CALIFORNIA, IRREVOCABLE
     STANDBY LETTER OF CREDIT NUMBER NO. SVBSF______ DATED _________ __, 2003"

     TO:      SILICON VALLEY BANK                _______________________________
              3003 TASMAN DRIVE                   [INSERT NAME OF BENEFICIARY]
              SANTA CLARA, CA 95054
                                                 _______________________________
                                                       AUTHORIZED SIGNATURE

GUIDELINES TO PREPARE THE SIGHT DRAFT OR BILL OF EXCHANGE:

1.  DATE     INSERT ISSUANCE DATE OF DRAFT OR BILL OF EXCHANGE.

2.  REF. NO. INSERT YOUR REFERENCE NUMBER IF ANY.

3.  PAY TO THE ORDER OF:    INSERT NAME OF BENEFICIARY

4.  US$      INSERT AMOUNT OF DRAWING IN NUMERALS/FIGURES.

5.  USDOLLARS     INSERT AMOUNT OF DRAWING IN WORDS.

6.  LETTER OF CREDIT NUMBER     INSERT THE LAST DIGITS OF OUR STANDBY L/C NUMBER
    THAT PERTAINS TO THE DRAWING.

7.  DATED    INSERT THE ISSUANCE DATE OF OUR STANDBY L/C.

NOTE: BENEFICIARY SHOULD ENDORSE THE BACK OF THE SIGHT DRAFT OR BILL OF EXCHANGE
      AS YOU WOULD A CHECK.

IF YOU NEED FURTHER ASSISTANCE IN COMPLETING THIS SIGHT DRAFT OR BILL OF
EXCHANGE, PLEASE CALL OUR L/C PAYMENT SECTION AND ASK FOR: ALICE DALUZ AT (408)
654-7120 OR EFRAIN TUVILLA AT (408) 654-6349.

                                      D-4
<PAGE>

                                   EXHIBIT "B"

DATE:

TO:   SILICON VALLEY BANK
      3003 TASMAN DRIVE
      SANTA CLARA, CA 95054

      ATTENTION: INTERNATIONAL DIVISION

RE:   SILICON VALLEY BANK, SANTA CLARA, CALIFORNIA
      IRREVOCABLE STANDBY LETTER OF CREDIT NO. SVBSF_____
      DATED __________ ___, 2003 AMOUNT: US$_______________.

GENTLEMEN:

FOR VALUE RECEIVED, THE UNDERSIGNED BEING A DULY AUTHORIZED REPRESENTATIVE OR
OFFICER OF THE BENEFICIARY ("BENEFICIARY") HEREBY IRREVOCABLY TRANSFERS TO:

     _______________________________________________________________________
                              (NAME OF TRANSFEREE)

     _______________________________________________________________________
                                    (ADDRESS)

("TRANSFEREE") ALL RIGHTS OF THE BENEFICIARY TO DRAW UNDER THE ABOVE LETTER OF
CREDIT UP TO ITS AVAILABLE AMOUNT AS SHOWN ABOVE AS OF THE DATE OF THIS
TRANSFER.

BY THIS TRANSFER, ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY IN SUCH LETTER OF
CREDIT ARE TRANSFERRED TO THE TRANSFEREE. TRANSFEREE SHALL HAVE THE SOLE RIGHTS
AS BENEFICIARY THEREOF, INCLUDING SOLE RIGHTS RELATING TO ANY AMENDMENTS,
WHETHER INCREASES OR EXTENSIONS OR OTHER AMENDMENTS, AND WHETHER NOW EXISTING OR
HEREAFTER MADE. ALL AMENDMENTS ARE TO BE ADVISED DIRECTLY TO THE TRANSFEREE
WITHOUT NECESSITY OF ANY CONSENT OF OR NOTICE TO THE UNDERSIGNED BENEFICIARY.

THE ORIGINAL OF SUCH LETTER OF CREDIT IS RETURNED HEREWITH, AND WE ASK YOU TO
ENDORSE THE TRANSFER ON THE REVERSE THEREOF, AND FORWARD IT DIRECTLY TO THE
TRANSFEREE WITH YOUR CUSTOMARY NOTICE OF TRANSFER.

SINCERELY,

[INSERT NAME OF TRANSFEROR BENEFICIARY]

______________________
(AUTHORIZED SIGNATURE)

SIGNATURE AUTHENTICATION:(1)
THE ABOVE SIGNATURE WITH TITLE
CONFORMS WITH THAT ON FILE WITH US.

_______________________________________
(NAME OF BANK OF TRANSFEROR BENEFICIARY)

_____________________
(AUTHORIZED SIGNATURE)

--------
(1) SIGNATURE CAN BE AUTHENTICATED EITHER BY BENEFICIARY'S BANK OR NOTARIZED BY
    A NOTARY PUBLIC.

                                      D-5
<PAGE>

                                     RIDER 1

                           COMMENCEMENT DATE AGREEMENT

         2929 Seventh Street, L.L.C., a California limited liability company
("Landlord"), and Dynavax Technologies Corporation, a Delaware corporation
("Tenant"), have entered into a certain Lease dated as of____, 20__ (the
"Lease").

         WHEREAS, Landlord and Tenant wish to confirm and memorialize the
Commencement Date, Expiration Date and potential Accelerated Expiration Dates of
the Lease as provided for in Section 2.2(b) of the Lease, and Sections 1.b.iv.
and 2.a. of the Addendum to Lease;

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

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

         2.       The Commencement Date (as defined in the Lease) of the Lease
is ___________.

         3.       The Expiration Date (as defined in the Lease) of the Lease is
________________.

         4.       The delivery dates for the Acceleration Notice are
________________ (i.e., 12 months before the first day of the 60th month of the
Term) or ________________ (i.e., 12 months before the first day of the 90th
month of the Term), and the Accelerated Expiration Dates of the Lease are
______________ (i.e., the first day of the 60th month of the Term) or
_________________ (i.e., the first day of the 90th month of the Term).

         5.       Tenant hereby confirms the following:

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

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

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

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

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

                                     RIDER-1
<PAGE>

TENANT:                                  LANDLORD:

DYNAVAX TECHNOLOGIES CORPORATION,        2929 SEVENTH STREET, L.L.C.,
a Delaware corporation                   a California limited liability company

By:___________________________________   By:____________________________________
Print Name:___________________________        Richard K. Robbins
Its:__________________________________        Managing Member

                                     RIDER-2
<PAGE>

                                ADDENDUM TO LEASE
                                     BETWEEN
       2929 SEVENTH STREET, L.L.C., A CALIFORNIA LIMITED LIABILITY COMPANY
                                       AND
              DYNAVAX TECHNOLOGIES COMPANY, A DELAWARE CORPORATION

         This Addendum to Lease is attached to and forms a part of that certain
Lease by and between 2929 Seventh Street, L.L.C., a California limited liability
company ("Landlord"), and Dynavax Technologies Corporation, a Delaware
corporation ("Tenant"), for premises located in the building located at 2929
Seventh Street, Berkeley, California. Words and terms that are defined in the
Lease shall have the same meaning in this Addendum as the meaning provided in
the Lease. In the event of any inconsistency between the terms of this Addendum
and the Lease, the terms of this Addendum shall control.

         1.       EXPANSION OPTION.

                  a.       Grant of Option; Conditions. Tenant shall have the
option (the "Expansion Option") to lease Suite 100 on the 1st floor of the
Building containing approximately 47,000 square feet of rentable area, as shown
on Addendum Exhibit 1 hereto (the "Expansion Space") if:

                           i.       Landlord receives written notice (the
"Expansion Notice") from Tenant of the exercise of its Expansion Option on or
before May 31, 2004; and

                           ii.      Tenant is not in default under the Lease
beyond any applicable cure periods at the time that Landlord receives the
Expansion Notice; and

                           iii.     The Lease has not been assigned prior to the
date that Landlord receives the Expansion Notice; and

                           iv.      The Expansion Space is intended for the
exclusive use of only Tenant during the Term; and

                           v.       Tenant has not vacated or abandoned the
Premises at the time Landlord receives the Expansion Notice.

                  b.       Terms for Expansion Space.

                           i.       During the Expansion Space Term (as defined
in subsection b.iv. below), the Monthly Base Rent for the Expansion Space shall
be as follows:

<TABLE>
<CAPTION>
PERIOD FROM/TO                               MONTHLY
--------------                               -------
<S>                                         <C>
Months 1 - 12                               $110,450.00

Months 13 - 24                              $113,763.50
</TABLE>

                                        1
<PAGE>

<TABLE>
<S>                                         <C>
Months 25 - 36                              $117,176.41

Months 37 - 48                              $120,691.70

Months 49 - 60                              $124,312.45

Months 61 - 72                              $128,041.82

Months 73 - 84                              $131,883.07

Months 85 - 96                              $135,839.56

Months 97 - 108                             $139,914.75

Months 109 - 120                            $144,112.19
</TABLE>

                           Monthly Base Rent attributable to the Expansion Space
shall be payable in monthly installments in accordance with the terms and
conditions of Article 3 of the Lease.

                           ii.      Tenant shall pay Rent Adjustment Deposits
and Rent Adjustments for the Expansion Space on the same terms and conditions
set forth in Article 4 of the Lease, provided that Tenant's Share shall increase
appropriately to account for the addition of the Expansion Space.

                           iii.     Subject to the terms of Section B.4. below
and Landlord's delivery and repair duties under Section 2.4 of the Lease, the
Expansion Space (including improvements and personalty, if any) shall be
accepted by Tenant in its "as-built" condition and configuration existing on the
earlier of the date Tenant takes possession of the Expansion Space or as of the
date the term for the Expansion Space commences.

                           iv.      The term for the Expansion Space shall
commence on the date Landlord has shampooed the carpeting and touched up the
paint (the "Initial Expansion Space Work") throughout the Expansion Space (which
date Landlord and Tenant anticipate will be June 1, 2004) (the "Expansion Space
Commencement Date"), and shall end, unless sooner terminated pursuant to the
terms of the Lease, 10 years after the Expansion Space Commencement Date (the
"Expansion Space Expiration Date"); provided, however, if the Expansion Space
Expiration Date does not fall on the last day of a calendar month, Landlord may
elect to adjust the Expansion Space Expiration Date to the last day of the
calendar month in which Expansion Space Expiration Date occurs. Subsequent to
the Expansion Space Commencement Date, the term "Commencement Date" as used in
the Lease shall mean the Expansion Space Commencement Date, the term "Expiration
Date" shall mean the Expansion Space Expiration Date, and the term "Term" shall
mean the period commencing with the Expansion Space Expiration Date and ending
with the Expansion Space Termination Date (the "Expansion Space Term"), it being
the intention of the parties hereto that the term for the Expansion Space and
the Term for the initial Premises shall be coterminous. If Landlord is delayed
delivering possession of the Expansion Space due to the holdover or unlawful
possession of such space by any party, Landlord shall use reasonable efforts to
obtain possession of the space, and the commencement of the term for the
Expansion Space shall be postponed

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<PAGE>

until the date Landlord delivers possession of the Expansion Space to Tenant
free from occupancy by any party with the Initial Expansion Space Work
completed. Within thirty (30) days following the occurrence of the Expansion
Space Commencement Date, Landlord and Tenant shall enter into an agreement in
substantially the form of attached hereto as Rider 1 confirming the Expansion
Space Commencement Date and the Expansion Space Expiration Date. If Tenant fails
to enter into such agreement, then the Expansion Space Commencement Date and the
Expansion Space Expiration Date shall be the dates designated by Landlord in
such agreement.

                           v.       Subsequent to the Expansion Effective Date,
Landlord will construct a conference room and up to three (3) offices within the
Expansion Space at Landlord's sole cost and expense (the "Subsequent Expansion
Space Work"). Landlord and Tenant agree to cooperate with each other in order to
enable the Subsequent Expansion Space Work to be performed in a timely manner
and with as little inconvenience to the operation of Tenant's business as is
reasonably possible.

                           vi.      The Expansion Space shall be considered
Premises, subject to all the terms and conditions of the Lease (including the
Termination Option, as specified below), except that no allowances, credits,
abatements or other concessions (if any) set forth in the Lease for the initial
Premises shall apply to the Expansion Space, except as may be specifically
provided otherwise in this Expansion Option provision. Tenant shall have the
right to modify the HVAC supply and internal finishes within the areas of the
Expansion Space designated on Addendum Exhibit 2 hereto, provided that (a)
Tenant shall provide plans for such modifications to Landlord for Landlord's
prior written approval (which approval shall not be unreasonably withheld,
conditioned or delayed), (b) such modifications shall be performed in accordance
with Section 9.1 of the Lease, and (c) Landlord shall not require Tenant to
remove such modifications upon the expiration or earlier termination of the
Term. In addition, Tenant shall have the right to place an additional sign on
the Building near the Expansion Space pursuant to the terms of Section 6.7 of
the Lease.

                           vii.     Notwithstanding the foregoing to the
contrary, if the Expansion Space Commencement Date has not occurred on or before
June 1, 2004 (the "Outside Expansion Space Commencement Date"), Tenant shall be
entitled to a rent abatement following the Expansion Space Commencement Date of
$3,186.67 for every day in the period beginning on the Outside Expansion Space
Commencement Date and ending on the Expansion Space Commencement Date.. Landlord
and Tenant acknowledge and agree that the determination of the Expansion Space
Commencement Date shall take into consideration the effect of any Tenant Delays
by Tenant.

                           viii.    Notwithstanding the foregoing to the
contrary, if the Expansion Space Commencement Date has not occurred on or before
June 1, 2004 (the "Required Expansion Space Commencement Date"), then, in
addition to the remedy set forth above, Tenant may terminate this Lease in
accordance with Section 2 below; provided, however, the Acceleration Notice (as
defined in Section 2.a.ii.) must be delivered within 30 days after the Required
Commencement Date and the Accelerated Expiration Date shall be the date
specified in the Acceleration Notice, which date may be no sooner than July 1,
2004. The Required Commencement Date shall be delayed by one day each for each
day of Tenant Delay.

                                        3
<PAGE>

                  c.       Early Delivery of Expansion Notice. Although Tenant
is not required to deliver the Expansion Notice prior to the date specified in
Section 1.a. above, Tenant shall either deliver the Expansion Notice to Landlord
or inform Landlord that it does not intent to exercise the Expansion Option as
soon as Tenant has sufficient information to make its decision.

                  d.       Expansion Amendment. If Tenant is entitled to and
properly exercises the Expansion Option, Landlord shall prepare an amendment
(the "Expansion Amendment") to reflect the commencement date of the term for the
Expansion Space and the changes in Monthly Base Rent, Rentable Area of the
Premises, Tenant's Share, Parking (at the rate of 3 spaces per 1,000 rentable
square feet) and other appropriate terms. A copy of the Expansion Amendment
shall be sent to Tenant within a reasonable time after Landlord's receipt of the
Expansion Notice, and Tenant shall execute and return the Expansion Amendment to
Landlord within 15 days thereafter, but an otherwise valid exercise of the
Expansion Option shall be fully effective whether or not the Expansion Amendment
is executed.

                  e.       Subleasing of Original Premises. If, upon Tenant's
occupancy of the Expansion Space, Tenant notifies Landlord that the original
Premises are excess, Landlord shall reasonably cooperate with Tenant's efforts
to sublease the original Premises.

         2.       OPTION TO TERMINATE.

                  a.       Tenant shall have the option to terminate the Lease
("Termination Option") as of either the first day of the 60th month of the Term
(as may be redefined pursuant to Section 1.b.iv. above) or as of the first day
of the 90th month of the Term (as may be redefined pursuant to Section 1.b.iv.
above) (the date selected being the "Accelerated Expiration Date"), if:

                           i.       Tenant is not in default under the Lease at
the Tenant provides Landlord with an Acceleration Notice (hereinafter defined);
and

                           ii.      Landlord receives notice of acceleration
("Acceleration Notice") not less than 12 full calendar prior to the selected
 Accelerated Expiration Date.

                  b.       Tenant shall remain liable for all Monthly Base Rent,
Additional Rent and other sums due under the Lease up to and including the
Accelerated Expiration Date even though billings for such may occur subsequent
to the Accelerated Expiration Date.

                  c.       Notwithstanding anything to the contrary herein, the
Termination Option shall automatically terminate without notice and shall be of
no further force and effect, whether or not Tenant has timely exercised such
option, if Tenant is in default under the Lease (beyond applicable cure periods)
on the Accelerated Expiration Date.

                  d.       As of the date Tenant provides Landlord with an
Acceleration Notice, any unexercised rights or options of Tenant to renew the
Term of the Lease or to expand the Premises (whether expansion options, rights
of first or second refusal, rights of first or second offer, or other similar
rights), shall immediately be deemed terminated and no longer available or of
any further force or effect.

                                        4
<PAGE>

         3.       USE OF EXISTING FURNITURE. Tenant may use the office furniture
in the Premises that Landlord purchases from the existing tenant, Sygen (the
"Furniture"). Tenant shall accept the Furniture in its "AS IS" and "WHERE IS"
condition as of the Commencement Date. Tenant shall insure the furniture under
its "Special Perils" property insurance. At the end of the Term, Tenant shall
surrender the Furniture to Landlord in the same condition as when Tenant
received it, reasonable wear and tear excepted.

                                        5
<PAGE>

                               ADDENDUM EXHIBIT 1

                             PLAN OF EXPANSION SPACE

                                        6
<PAGE>

                               ADDENDUM EXHIBIT 2

                     LOCATION OF EXPANSION SPACE ALTERATIONS

                                        7