<PAGE>

                                                                   EXHIBIT 10.27

                   AMENDMENT AND ASSIGNMENT OF LEASE, RELEASE,
                            AND ASSUMPTION AGREEMENT

         This Amendment and Assignment of Lease, Release, and Assumption
Agreement (the "Assignment"), which is dated for reference purposes only on
December 20, 2002 (the "Reference Date"), between and among INTRABIOTICS
PHARMACEUTICALS, INC., a Delaware corporation ("Assignor"), POLYFUEL, INC., a
__________________ ("Assignee"), and 1245 TERRA BELLA PARTNERS, LLC, a
California limited liability company ("Landlord"), who agree as follows:

                                    RECITALS

         A.       Landlord, as landlord, and Assignor, as tenant, are parties to
that certain LEASE, dated April 30, 1997 (the "Lease"). A copy of the Lease is
attached hereto as Exhibit "A." All capitalized terms not otherwise defined in
this Assignment Agreement shall have the meanings set forth in the Lease.

         B.       Under the terms of the Lease, Assignor has leased from
Landlord that certain real property situated in the City of Mountain View,
County of Santa Clara, State of California, as presently improved with one (1)
building(s) containing approximately fifteen thousand six hundred fifty (15,650)
square feet, commonly known as 1245 Terra Bella Avenue, and more particularly
described in the Lease (the "Premises").

         C.       , Assignor desires to assign to Assignee all of Assignor's
right, title, and interest in and to the Lease and the Premises, and Assignee
desires to accept such assignment and to assume all of Assignor's duties and
obligations under the Lease, on the terms and conditions set forth in this
Assignment Agreement.

         D.       In connection with Assignor's contemplated surrender of
possession of the Real Premises, Assignor applied to the City of Mountain View,
California for letter certifying site closure on the Premises consistent with
applicable law (the "Site Closure").

         E.       In addition to assignment of the Lease, Assignor has agreed to
sell, and Assignee has agreed to purchase, personal property owned by Assignor
that is located in, on, or about the Property consisting of that equipment
(excluding IT equipment), furniture, laboratory improvements, fixtures and
utility systems described in Exhibit. "B", which is attached hereto, and
incorporated herein by reference (collectively the "Personal Property").

<PAGE>

                                    AGREEMENT

         1.       The Closing Date; Conditions Precedent.

                  1.1      Closing Date. Subject to satisfaction of all of the
Conditions Precedent (defined below), the transactions contemplated in this
Assignment Agreement shall close within one business day of the last to occur of
the following dates (the "Closing Date"): (i) the date of issuance of the Site
Closure; (ii) the date that Assignor formally tenders possession of the Premises
to Assignee; provided, however, that, if the Closing Date shall not have
occurred on or before February 15, 2003 (the "Outside Delivery Date"), then
Assignee, in Assignee's sole election, may terminate this Assignment Agreement
by providing written notice thereof to Assignor and Landlord within three (3)
business days of the Outside Delivery Date; or (iii) December 31, 2002 with rent
from Assignee starting no sooner than January 1, 2003. If this Assignment
Agreement shall be terminated by Assignee in accordance with this paragraph,
then any rent or other consideration, together with any Security Deposit,
previously delivered by any party to this Assignment Agreement to another in
accordance with the terms of this Assignment Agreement shall be promptly
refunded (or returned) to the delivering party.

                  1.2      Conditions Precedent. The Closing shall be
conditioned on satisfaction of each of the following conditions ("Conditions
Precedent"):

                           1.2.1    The Closing Date shall have occurred;

                           1.2.2    Assignor shall have received the Site
Closure;

                           1.2.3    Assignor shall have paid the Landlord
Consideration (defined below);

                           1.2.4    Assignor shall have issued the Warrant
(defined below);

                           1.2.5    Assignee shall have paid the Personal
Property Consideration (defined below);

                           1.2.6    Assignee shall have delivered the New
Security Deposit (defined below);

                           1.2.7    Landlord shall have returned the Old
Security Deposit (defined below); and

                           1.2.8    Assignee shall be satisfied, in the exercise
of its reasonable discretion, that the building systems within the Premises are
in good operating condition and repair

         2.       Purchase of Personal Property. On the Closing Date and subject
to satisfaction of the Conditions Precedent, Assignee shall pay to Assignor,
cash, or equivalent, in the amount of four hundred and ten thousand dollars and
no cents ($410,000.00), in full payment for all of the Personal Property (the
"Personal Property Consideration"). Simultaneous with delivery by Assignee of
the Personal Property Consideration, Assignor shall deliver to Assignee a fully

                                      -2-

<PAGE>

executed Bill of Sale for the Personal Property in substantially the form
attached hereto as Exhibit "C" (the "Bill of Sale"). Assignee shall be
responsible for, and shall indemnify and hold harmless Assignor against, all
California sales taxes (if any) due as the result of the sale of the Personal
Property. Assignor agrees to assist Assignee in claiming any applicable
exemption for occasional sales under California Revenue and Taxation Code
Section 6006.5(a).

         3.       Payment of Landlord Consideration and Warrant. For and in
consideration of Landlord entering into this Agreement and consenting to the
amendment of the Lease contained herein, on the Closing Date and subject to
satisfaction of the Conditions Precedent:

                  3.1      Assignor shall pay Landlord cash in the amount of
fifty-five thousand dollars ($55,000) (the "Landlord Consideration"); and

                  3.2      Assignor shall issue to Landlord a warrant (the
"Warrant") for 50,000 shares of common stock of Assignor in the form of "D"
attached hereto.

         4.       Amendment of Lease. Subject to satisfaction of the Conditions
Precedent, Landlord, Assignor, and Assignee hereby agree that effective on the
Closing Date, the Lease shall be, and hereby is, amended as follows:

                  4.1      References. Paragraph 1.1 of the Lease (References),
is amended as follows

                           4.1.1    That portion of Paragraph 1.1 captioned
"Tenant's Address for Notice: After Commencement Date:" is amended to state, in
its entirety, as follows:

                  "TENANT'S ADDRESS FOR NOTICE:   POLYFUEL, INC.
                  AFTER COMMENCEMENT DATE:        1245 Terra Bella Avenue
                                                  Mountain View, CA  94043
                                                  Attn: Dan Saccani"

                           4.1.2    That portion of Paragraph 1.1 captioned
"Term" is amended to state, in its entirety, as follows:

                  "TERM:                          "Approx. 101 1/2 months"

                           4.1.3    That portion of Paragraph 1.1 captioned
"Lease Expiration Date" is amended to state, in its entirety, as follows:

                  "LEASE EXPIRATION DATE:         December 31, 2005, unless
                                                  earlier terminated by
                                                  Landlord in accordance with
                                                  the terms of this Lease."

                           4.1.4    That portion of Paragraph 1.1 captioned
"Tenant's Security Deposit" is amended to state, in its entirety, as follows:

                                      -3-

<PAGE>

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

                           4.1.5    That portion of Paragraph 1.1 captioned
"Base Monthly Rent" is amended to state, in its entirety, as follows:

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

<TABLE>
<CAPTION>
MONTH                  RENT
-----                  ----
<S>               <C>
01-12             $  26,605.00
13-24             $  27,669.00
25-36             $  28,776.00
37-48             $  29,927.00
49-60             $  31,124.00
61-72             $  32,369.00
73-84             $  33,664.00
85-96             $  39,125.00
97-101 1/2        $  40,298.75
</TABLE>

                           4.1.6    That portion of Paragraph 1.1 captioned
"Use" is amended to state, in its entirety, as follows:

                  "USE:                           Office and Research and
                                                  Development, including,
                                                  without limitation,
                                                  biotechnology /
                                                  pharmaceutical and chemical
                                                  research & development,
                                                  manufacturing, warehousing,
                                                  and other related legal uses"

                  4.2      Surrender of Possession. Paragraph 2.6 of the Lease
(Surrender of Possession) is amended as follows:

                           4.2.1    Lines 5 through 7 of Paragraph 2.6 are
amended as follows:

                  "in the same condition, broom clean, as existed at the Lease
                  Commencement Date, reasonable wear and tear excepted."

                  shall be replaced with the following:

                  "in the same condition, broom clean, as existed on the Closing
                  Date [as defined in this Assignment Agreement], reasonable
                  wear and tear excepted."

                                      -4-

<PAGE>

                           4.2.2    Lines 15 through 24 of Paragraph 2.6 are
amended to delete the following:

                  "to the extent such Improvement Work relates to
                  non-specialized improvements or alterations shown on the plans
                  and specifications approved by Landlord and having general
                  utility to other users. However, to the extent the Improvement
                  Work relates to specialized improvements installed on Tenant's
                  behalf, such improvements shall remain on the Leased Premises
                  upon expiration or prior termination of this Lease unless
                  Landlord elects to require that Tenant at its sole cost remove
                  such improvements, in which event Tenant shall remove such
                  improvements and shall repair all damage caused by such
                  removal. Landlord agrees upon specific written request by
                  Tenant at the time Tenant shall submit its final improvement
                  drawings for approval by Landlord to notify Tenant in writing
                  which such Improvement Work Landlord will require Tenant to
                  remove from the Premises upon expiration of the Lease Term
                  pursuant to the foregoing"

                  4.3      Additional Rent. Paragraph 3.2 of the Lease
(Additional Rent) is amended as follows:

                           4.3.1    Subparagraph 3.2(a)(i) of the Lease is
amended to state, in its entirety, as follows:

                  "(i)     Landlord may forward invoices or bills for such
                  expenses to Tenant, and Tenant shall, not later than the last
                  to occur of the following dates: (i) thirty (30) days
                  following receipt by Tenant of the invoice; or (ii) ten (10)
                  days prior to the due date for such invoice, pay such invoices
                  or bills and deliver satisfactory evidence of such payment to
                  Landlord, and/or"

                           4.3.2    Subparagraph 3.2(a)(ii) of the Lease is
amended to state, in its entirety, as follows:

                  "(ii)    Landlord may bill to Tenant, on a periodic basis not
                  more frequently than monthly, the amount of such expenses (or
                  group of expenses) as paid or incurred by Landlord, and Tenant
                  shall pay to Landlord the amount of such expenses by the last
                  to occur of the following dates: (i) thirty (30) days
                  following receipt by Tenant of the bill; or (ii) ten (10) days
                  prior to the due date for payment by Landlord of the
                  underlying invoice, and/or"

This thirty (30) days applies only to invoices and not to Base Monthly Rent or
Additional Rent due the first of each month.

                  4.4      Permitted Use. Lines 2 through 7 of Paragraph 4.1 of
the Lease (Permitted Use) are amended as follows:

                                      -5-

<PAGE>

                  "Tenant shall continuously and without interruption use the
                  Leased Premises for such purpose for the entire Lease Term.
                  Any discontinuance of such use for a period of sixty (60)
                  consecutive calendar days shall be, at Landlord's election, a
                  default by Tenant under the terms of this Lease. Landlord may
                  elect upon request by Tenant to extend the period of any
                  vacation of the Premises by Tenant, in Landlord's sole and
                  absolute discretion, and in such event may require Tenant to
                  provide reasonable security for the Premises."

                  shall be replaced with the following:

                  "Tenant shall use the Leased Premises for such purpose for the
                  entire Lease Term. If, during the term of the Lease, Tenant
                  shall vacate the Premises for a period in excess of sixty (60)
                  consecutive calendar days, Landlord may require Tenant to
                  provide reasonable security for the Premises."

                  4.5      Compliance with Laws and Private Restrictions. Line 4
of Paragraph 4.7 of the Lease (Compliance with Laws and Private Restrictions) is
amended as follows:

                  "all Laws and Private Restrictions respecting the use and
                  occupancy of the Leased Premises,"

                  shall be replaced with the following:

                  "all Laws and Private Restrictions respecting Tenant's
                  particular use of the Leased Premises (as opposed to use and
                  occupancy of the Leased Premises in general),"

                  4.6      Hazardous Materials; Environmental Protection. Lines
1 through 5 of Paragraph 4.11(b) of the Lease (Hazardous Materials;
Environmental Protection) are amended as follows:

                  "(b)     Notwithstanding anything to the contrary in this
                  Lease, Tenant, at its sole cost, shall comply with all Laws
                  relating to the storage, use and disposal of Hazardous
                  Materials; provided, however, that Tenant shall not be
                  responsible for contamination of the Leased Premises by
                  Hazardous Materials existing as of the date the Leased
                  Premises are delivered to Tenant (whether before or after the
                  Scheduled Delivery Date) unless caused by Tenant."

                  shall be replaced with the following:

                  "(b)     Notwithstanding anything to the contrary in this
                  Lease [as modified by this Assignment Agreement], Tenant, at
                  its sole cost, shall comply with all Laws relating to the
                  storage, use and disposal of Hazardous Materials; provided,
                  however, that Tenant shall not

                                      -6-

<PAGE>

                  be responsible for contamination of the Leased Premises by any
                  Hazardous Materials existing in, on, or about, the Leased
                  Premises, the Building, and/or the Property on the Closing
                  Date [as defined in this Assignment Agreement]."

                  4.7      Ownership of Improvements. Schedule 6.2, as
referenced in Paragraph 6.2 of the Lease (Ownership of Improvements) is amended
to include all of the Personal Property [as defined in this Assignment
Agreement].

                  4.8      Alterations Required by Law. Paragraph 6.3 of the
Lease (Alterations Required by Law) is amended as follows:

                           4.8.1    Lines 2 and 3 of Paragraph 6.3 are amended
as follows:

                  "(i)     Tenant's use or occupancy of the Leased Premises, the
                  Building, the Outside Areas or the Property"

                  shall be replaced with the following:

                  "Tenant's particular use of the Leased Premises, the Building,
                  the Outside Areas or the Property (as opposed to the general
                  use or occupancy thereof)"

                           4.8.2    Lines 8 through 10 of Paragraph 6.3 are
amended as follows:

                  "including interest at a rate equal to the greater of (a) 12%,
                  or"

                  shall be replaced with the following:

                  "including interest at a rate equal to the lesser of (a) the
                  maximum rate that may be charged by a non-exempt lender for a
                  loan or forbearance of money, or"

                  4.9      Article 7 of the Lease (Assignment and Subletting by
Tenant) is amended as follows:

                           4.9.1    Paragraph 7.1(b) is amended to state, in its
entirety, as follows:

                  "(b)     in Landlord's reasonable judgment, the use of the
                  Premises by the proposed assignee or sublessee would be for a
                  purpose other than that permitted under this Lease, would
                  entail any alterations which would lessen the value of the
                  leasehold improvements in the Premises, or would require
                  increased services by Landlord;"

                           4.9.2    A new Paragraph 7.9 shall be inserted as
follows:

                  "7.9     TRANSFER TO AFFILIATE. Notwithstanding anything to
                  the contrary in this Lease [as amended by this Assignment

                                      -7-

<PAGE>

                  Agreement]: (i) Tenant shall not be obligated to pay to
                  Landlord any assignment consideration, excess rentals, or
                  other consideration received by Tenant; (ii) Landlord shall
                  have no right to recapture or retake possession of the
                  Premises; (iii) no "option" or other right of Tenant hereunder
                  shall terminate or otherwise be affected, and (iv) the consent
                  of Landlord shall not be required, with respect to any
                  proposed assignment or sublease of all or any portion of the
                  Premises or this Lease to: (i) any corporation, limited
                  liability company, partnership, or other legal entity which,
                  directly or indirectly, owns or controls Tenant, is owned or
                  controlled by Tenant, or is under common ownership or control
                  with Tenant; (ii) any successor of Tenant by purchase, merger,
                  consolidation or reorganization; (iii) any investor or lender
                  or pays money or other consideration to Tenant in exchange for
                  such party's ownership interest in the company (whether or not
                  such investment would otherwise constitute a change of control
                  as defined herein); or (iv) any vendor or contractor of Tenant
                  for the purpose of completing work required by Tenant in the
                  conduct and operation of Tenant's business (hereinafter,
                  collectively, referred to as "Permitted Transfers"), provided:
                  (a) Tenant is not in default under this Lease beyond
                  applicable cure periods; (b) if such proposed transferee is a
                  successor to Tenant by purchase, merger, consolidation or
                  reorganization, the continuing or surviving entity shall own
                  all or substantially all of the assets of Tenant and shall
                  have a net worth which is at least equal to the greater of
                  Tenant's net worth at the date of this Lease or Tenant's net
                  worth at the date of the Transfer; (c) such proposed
                  transferee operates the business in the Premises for the use
                  described in this Lease and no other purpose; and (d) in no
                  event shall any Transfer release or relieve Tenant from any of
                  its obligations under this Lease. Tenant shall give Landlord
                  written notice of any such Permitted Transfer."

         5.       Assignment of Lease and Premises. Subject to satisfaction of
the Conditions Precedent, effective as of the Closing Date, Assignor hereby
assigns to Assignee all of Assignor's right, title and interest, in and to the
Lease and the Premises, including, without limitation, the Assignor's right to
the quiet use and enjoyment of the Premises; and Assignee accepts such
assignment.

         6.       Assumption of Lease. In connection with the foregoing
assignment, subject to satisfaction of the Conditions Precedent, effective on
the Closing Date, Assignee hereby assumes and agrees to perform, all of the
duties, debts, and obligations of Assignor arising under the Lease after the
Closing Date, including, without limitation, the following: (i) all obligations
to pay Rent, and (ii) all non-monetary obligations; and (iii) all restrictions
upon the use of the Premises.

                                      -8-

<PAGE>

         7.       Indemnification. In connection with the foregoing assignment
and assumption, subject to satisfaction of the Conditions Precedent, effective
on the Closing Date:

                  7.1      Assignor agrees to indemnify, defend, protect and
hold Assignee harmless from and against all actions, claims, demands, costs,
liabilities, losses, attorneys' fees, damages, penalties and expenses
(collectively, "Claims") which may be brought or made against Assignee or which
Assignee may pay or incur to the extent relating to any period prior to the
Closing Date or any Hazardous Materials or radio active contamination existing
at, on or under the Premises as of the Closing Date which was caused by Assignor
or its agents or contractors (other than Claims relating to any use or occupancy
of the Premises by Assignee prior to the Closing Date); and

                  7.2      Assignee agrees to indemnify, defend, protect and
hold Assignee harmless from and against all Claims which may be brought or made
against Assignor or which Assignor may pay or incur to the extent relating to
any period on or after the Closing Date.

         8.       Security Deposit. On the Closing Date, Landlord shall return
the original letter of credit issued as the Security Deposit under the Lease
(the "Old Security Deposit"). On the Closing Date, Assignee shall pay to
Landlord a Security Deposit in connection with the Lease in the amount of
$175,000 (the "New Security Deposit").

         9.       Representation of Assignor. Assignor represents and warrants
to Assignee and Landlord that Assignor has not previously assigned any interest
in the Lease or the Premises and that, on the Closing Date, neither Assignor
nor, to Assignor knowledge, Landlord, will be in default of any obligation
arising under the Lease.

         10.      Representation of Landlord. Landlord represents and warrants
to Assignor and Assignee that, on the Closing Date, neither Assignor nor
Landlord will be in default of any obligation arising under the Lease.

         11.      Condition At Closing Date. Assignee will make its own
determination of the condition of the Premises and its systems. Accordingly,
Assignor makes no warranty as to the condition of the Premises, , including,
without limitation, roof, and roof membrane, H.V.A.C., plumbing, and electrical
systems. Assignee is taking the Premises "as is" without representation or
warranty of any kind from Assignor, but subject to the condition precedent that
Assignee, having conducted its own investigation, be satisfied with the building
systems of the Premises on the Closing Date be in good operating condition and
repair..

         12.      Novation and Substitution of Parties. Effective on the Closing
Date, and subject to satisfaction of the Conditions Precedent, Assignor and
Landlord agree to substitute Assignee in the place and stead of Assignor with
respect to the rights and obligations of Assignor pertaining to the Premises and
the Lease. The parties acknowledge and agree that this is a complete assignment
of Assignor's rights and obligations under the Lease with respect to the
Premises and not merely a sublease thereof, and that, effective as of the
Closing Date, Assignor shall have no remaining right, duty, obligation, or
interest in the Premises or in the Lease.

         13.      Acceptance of Substitution. Effective as of the Closing Date,
and subject to satisfaction of the Conditions Precedent, Assignee assumes,
promises, and agrees to perform all

                                      -9-

<PAGE>

of the duties and obligations of Assignor under the Lease after the Closing Date
of this Assignment Agreement.

         14.      Finality of Substitution. The substitution made by this
Assignment shall be final, except as otherwise provided by law.

         15.      Early Access. From and after the Reference Date herein,
Assignee shall have access to the Premises in order to plan its move into the
Premises, so long as it does not interfere with the Site Closure work, but shall
not be entitled to commence any construction or assume possession of the
Premises until the Closing Date.

         16.      Possession of the Premises. Assignor shall use its
commercially reasonable efforts to obtain the Site Closure as expeditiously as
possible. Possession of the Leased Premises shall be delivered to Assignee on
the Closing Date, subject to all terms and conditions of the Lease, as amended
by this Assignment Agreement.

         17.      Consent of Landlord and Release of Assignor. Subject to
satisfaction of the Conditions Precedent, effective as of the Closing Date:

                  17.1     Landlord hereby consents to the herein described
assignment, and to the assumption by Assignee of all of Assignor's rights and
obligations under the Lease, and Landlord does hereby release and discharge
Assignor from any and all duties and obligations under the Lease;

                  17.2     Landlord hereby agrees to look solely to Assignee for
all claims and obligations which may arise after the Closing Date in connection
with the Premises; and

                  17.3     Landlord and Assignor, both for an on behalf of their
respective hereby releases and discharges the other, and its respective
employees, officers, directors, agents, predecessors, successors, parents,
subsidiaries, affiliates, and all others from any and all claims and demands of
every kind and nature, known and unknown, suspected and unsuspected, disclosed
and undisclosed, for any damages or other remedy whatsoever, arising out of or
in any way related to the Lease. Each such party acknowledges and agrees that
the release it gives to the other party upon executing this Agreement applies to
all claims for injuries, damages, or losses to his own person and property, real
or personal (whether those injuries, damages, or losses are known or unknown,
foreseen or unforeseen, patent or latent) which it may have against the other
party. Each party waives application of California Civil Code Section 1542.

         Each such party certifies that it has read the following provisions of
California Civil Code Sections 1542:

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

         and indicates that fact by signing here:

                                      -10-

<PAGE>

                                                        /s/ EB [initials].
                                                        -------
                                                        ______ [initials]

         18.      Gregg Domanico of BT Commercial (Assignor's Broker) has
represented Assignor in connection with the negotiation of this Assignment
Agreement. Roger Fields and David Hiebert of Cornish & Carey Commercial
(Assignee's Broker) has represented Assignee in connection with the negotiation
of this Assignment Agreement. Larry Blickman of BT Commercial (Landlord's
Broker) has represented Landlord in connection with the negotiation of this
Assignment Agreement. Each Party represents and warrants to the other that such
party has not dealt with any agent or broker in this transaction other than
Assignor's Broker, Assignee's Broker or Landlord's Broker. Upon Closing,
Assignor shall pay Assignee's Broker (Cornish & Carey Commercial) a leasing
commission in the amount of thirty-six thousand eight hundred sixty two and
00/100 dollars ($36,862.00). Upon full execution of this Assignment Agreement,
Landlord shall pay Assignee's Broker (Cornish & Carey Commercial) a leasing
commission in an amount equal to thirty-nine thousand two hundred fifty-two and
15/100 Dollars ($39,252.15). Assignor shall pay a leasing commission to
Assignor's Broker the amount of eighteen thousand four hundred thirty and 00/100
dollars ($18,430.00). Landlord shall pay a leasing commission to Landlord's
Broker per separate agreement.

         Each party shall indemnify the other and hold the other harmless from
any claim for commission, finder's fee, or advisory fee claimed by any party
other than Assignor's Broker, Assignee's Broker, or Landlord's Broker arising
out of the actions of such party in this transaction.

         19.      If any legal action, including submission to arbitration by
agreement of the parties or in compliance with statute, is instituted by any
party hereto for damages or to interpret or enforce any of the terms or
provisions of this Assignment Agreement, the prevailing party shall be entitled
to recover reasonable attorneys' fees in addition to such other recoverable
costs and damages as may be awarded.

         Executed to be effective as of the date first above written.

ASSIGNOR:                                    ASSIGNEE:

INTRABIOTICS PHARMACEUTICALS,                POLYFUEL, INC.,
INC., a Delaware corporation                 a Delaware Corp

    /s/ Eric Bjerkholt                           /s/ Daniel R. Saccani
----------------------------                 -------------------------
By: ________________________                 By: Daniel R. Saccani
Its: _______________________                 Its: CFO

LANDLORD:

S.STEPHEN NAKASHIMA

                                      -11-

<PAGE>

    /s/ S. Stephen Nakashima
----------------------------
By: ________________________
Its: _______________________

                                   EXHIBIT "A"
                                    THE LEASE

                                      -12-

<PAGE>

                                   EXHIBIT "B"
                              THE PERSONAL PROPERTY

                                       2

<PAGE>

                                   EXHIBIT "C
                                THE BILL OF SALE

         By this Bill of Sale dated ____________, 2002, pursuant to that
certain Amendment and Assignment of Lease, Release, and Assumption Agreement
with reference date of December 20, 2002 (the "Assignment Agreement"), in effect
between and among INTRABIOTICS PHARMACEUTICALS, INC., a Delaware corporation
("Assignor"), POLYFUEL, INC., a __________________ ("Assignee"), and 1245 TERRA
BELLA PARTNERS, LLC, a California limited liability company, concerning the
lease of that certain real property, and the improvements thereon, commonly
known as 1245 Terra Bella Avenue, Mountain View, California (the "Premises"),
Assignor does hereby absolutely and unconditionally assign, convey, transfer,
set over, and deliver to Assignee all right, title and interest in the
furniture, furnishings, equipment, and other personal property owned by Assignor
and currently situated, in, on, or about the Premises described in Schedule "1"
attached hereto and incorporated herein by reference (collectively referred to
herein as the (Personal Property").

         In connection with the foregoing, Assignor represents and warrants for
the benefit of Assignee that Assignor owns the Personal Property free and clear
of all liens and encumbrances of any nature and has the right to transfer good
and marketable title to said Personal Property without obtaining the consent of
any other party. This Bill of Sale is shall be binding upon and inure to the
benefit of all successors and assigns of both Assignor and Assignee.

         ASSIGNOR IS SELLING THE PERSONAL PROPERTY ON AN "AS IS, WHERE IS" BASIS
AND, EXCEPT AS SET FORTH IN THE PRIOR PARAGRAPH, ASSIGNOR DISCLAIMS ALL
WARRANTIES, REPRESENTATIONS AND GUARANTIES OF ANY NATURE WHETHER EXPRESS OR
IMPLIED. ASSIGNOR MAKES NO REPRESENTATION OR WARRANTY AS TO CONDITION OF THE
PERSONAL PROPERTY, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE AND NO
IMPLIED WARRANTIES WHATSOEVER

                                            ASSIGNOR:

                                            INTRABIOTICS PHARMACEUTICALS, INC.,
                                            a Delaware corporation

                                                /s/ Eric Bjerkholt
                                            ---------------------------------
                                            By: _____________________________
                                            Its: ____________________________

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                                  SCHEDULE "1"
                        ITEMIZATION OF PERSONAL PROPERTY

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                                   EXHIBIT "D"
                                     WARRANT

                                                                      NO. CW - 5

         THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF
ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT
AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.

                        WARRANT TO PURCHASE 50,000 SHARES
                               OF COMMON STOCK OF
                       INTRABIOTICS PHARMACEUTICALS, INC.
                         (VOID AFTER DECEMBER 31, 2007)

         This certifies that J.D. MOLEX LLC, a California limited liability
company, or its permitted assigns (the "Holder"), for value received, is
entitled to purchase from INTRABIOTICS PHARMACEUTICALS, INC., a Delaware
corporation (the "Company"), having a place of business at 1245 Terra Bella
Avenue, Mountain View, California 94043, a maximum of Fifty Thousand (50,000)
fully paid and nonassessable shares of the Company's Common Stock ("Common
Stock") of the same class that currently is traded on the National Association
of Securities Dealers Automated Quotation System ("Nasdaq") National Market for
cash at a price equal to $0.29 per share (the "Stock Purchase Price") at any
time or from time to time up to and including 5:00 p.m. (Pacific time) on
December 31, 2007 (the "Expiration Date") upon surrender to the Company at its
principal office (or at such other location as the Company may advise the Holder
in writing) of this Warrant properly endorsed with the Form of Subscription
attached hereto duly filled in and signed and upon payment in cash or wire
transfer of the aggregate Stock Purchase Price for the number of shares for
which this Warrant is being exercised determined in accordance with the
provisions hereof. The Stock Purchase Price and the number of shares purchasable
hereunder are subject to adjustment as provided in Section 3 of this Warrant.

         This Warrant is subject to the following terms and conditions:

         1.       EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.

         1.1 GENERAL. This Warrant is exercisable at the option of the Holder of
record hereof, at any time or from time to time, up to the Expiration Date for
all or any part of the shares of Common Stock (but not for a fraction of a
share) which may be purchased hereunder. The Company agrees that the shares of
Common Stock purchased under this Warrant shall be and are

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deemed to be issued to the Holder hereof as the record owner of such shares as
of the close of business on the date on which this Warrant shall have been
surrendered, properly endorsed, the completed, executed Form of Subscription
delivered and payment made for such shares. Certificates for the shares of
Common Stock so purchased, together with any other securities or property to
which the Holder hereof is entitled upon such exercise, shall be delivered to
the Holder hereof by the Company at the Company's expense within a reasonable
time after the rights represented by this Warrant have been so exercised. In
case of a purchase of less than all the shares which may be purchased under this
Warrant, the Company shall cancel this Warrant and execute and deliver a new
Warrant or Warrants of like tenor for the balance of the shares purchasable
under the Warrant surrendered upon such purchase to the Holder hereof within a
reasonable time. Each stock certificate so delivered shall be in such
denominations of Common Stock as may be requested by the Holder hereof and shall
be registered in the name of such Holder or in the name of Holder's affiliate
and/or subsidiary as may be requested by the Holder.

         1.2 NET ISSUE EXERCISE. Notwithstanding any provisions herein to the
contrary, if the fair market value of one share of the Company's Common Stock is
greater than the Stock Purchase Price (at the date of calculation as set forth
below), in lieu of exercising this Warrant for cash, the Holder may elect to
receive shares equal to the value (as determined below) of this Warrant (or the
portion thereof being canceled) by surrender of this Warrant at the principal
office of the Company together with the properly endorsed Form of Subscription
with notice of such election in which event the Company shall issue to the
Holder a number of shares of Common Stock computed using the following formula:

                  X = Y (A-B)
                      -------
                         A

         Where X = the number of shares of Common Stock to be issued to the
Holder

                           Y =      the number of shares of Common Stock
                           purchasable under the Warrant or, if only a portion
                           of the Warrant is being exercised, the portion of the
                           Warrant being canceled (at the date of such
                           calculation)

                           A =      the fair market value of one share of the
                           Company's Common Stock (at the date of such
                           calculation)

                           B =      Stock Purchase Price (as adjusted to the
                           date of such calculation)

         For purposes of the above calculation, if the Common Stock is traded on
any established stock exchange or traded on the Nasdaq National Market or the
Nasdaq SmallCap Market, then the fair market value of one share of Common Stock
shall be the closing sales price for such stock (or the closing bid, if no sales
were reported) as quoted on such exchange or market (or the exchange or market
with the greatest volume of trading in the Common Stock) on the last market
trading day prior to the day of determination, as reported in The Wall Street
Journal or, if not reported in The Wall Street Journal, then such other source
as the Company's Board of Directors reasonably deems reliable. In the absence of
such markets for Common Stock, the fair market

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<PAGE>

value of one share of Common Stock shall be determined by the Company's Board of
Directors and the Holder in good faith.

         2.       SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company
covenants and agrees that all shares of Common Stock which may be issued upon
the exercise of the rights represented by this Warrant will, upon issuance, be
duly authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any stockholder and free of all taxes, liens and charges
with respect to the issue thereof. The Company further covenants and agrees
that, during the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized and reserved, for
the purpose of issue or transfer upon exercise of the subscription rights
evidenced by this Warrant, a sufficient number of shares of authorized but
unissued Common Stock, or other securities and property, when and as required to
provide for the exercise of the rights represented by this Warrant. The Company
will take all such action as may be necessary to assure that such shares of
Common Stock may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any securities exchange
upon which the Common Stock may be listed; provided, however, that the Company
shall not be required to effect a registration under federal or state securities
laws solely because of such exercise. The Company will not take any action which
would result in any adjustment of the Stock Purchase Price (as set forth in
Section 3 hereof) if the total number of shares of Common Stock issuable after
such action upon exercise of all outstanding warrants, together with all shares
of Common Stock then outstanding and all shares of Common Stock then issuable
upon exercise of all options and upon the conversion of all convertible
securities then outstanding, would exceed the total number of shares of Common
Stock then authorized by the Company's Certificate of Incorporation.

         3.       ADJUSTMENT OF STOCK PURCHASE PRICE AND NUMBER OF SHARES. The
Stock Purchase Price and the number of shares purchasable upon the exercise of
this Warrant shall be subject to adjustment from time to time upon the
occurrence of certain events described in this Section 3. Upon each adjustment
of the Stock Purchase Price, the Holder of this Warrant shall thereafter be
entitled to purchase, at the Stock Purchase Price resulting from such
adjustment, the number of shares obtained by multiplying the Stock Purchase
Price in effect immediately prior to such adjustment by the number of shares
purchasable pursuant hereto immediately prior to such adjustment, and dividing
the product thereof by the Stock Purchase Price resulting from such adjustment.

         3.1 SUBDIVISION OR COMBINATION OF STOCK. In case the Company shall at
any time subdivide its outstanding shares of Common Stock into a greater number
of shares, the Stock Purchase Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the Stock Purchase Price in effect immediately prior
to such combination shall be proportionately increased.

         3.2 DIVIDENDS IN COMMON STOCK, OTHER STOCK, PROPERTY, RECLASSIFICATION.
If at any time or from time to time the holders of Common Stock (or any shares
of stock or other securities at the time receivable upon the exercise of this
Warrant) shall have received or become entitled to receive, without payment
therefor,

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         (a) Common Stock or any shares of stock or other securities which are
at any time directly or indirectly convertible into or exchangeable for Common
Stock, or any rights or options to subscribe for, purchase or otherwise acquire
any of the foregoing by way of dividend or other distribution,

         (b) any cash paid or payable otherwise than as a cash dividend, or

         (c) Common Stock or additional stock or other securities or property
(including cash) by way of spinoff, split-up, reclassification, combination of
shares or similar corporate rearrangement, (other than shares of Common Stock
issued as a stock split or adjustments in respect of which shall be covered by
the terms of Section 3.1 above),

                           then and in each such case, the Holder hereof shall,
upon the exercise of this Warrant, be entitled to receive, in addition to the
number of shares of Common Stock receivable thereupon, and without payment of
any additional consideration therefor, the amount of stock and other securities
and property (including cash in the cases referred to in clauses (b) and (c)
above) which such Holder would hold on the date of such exercise had he been the
holder of record of such Common Stock as of the date on which holders of Common
Stock received or became entitled to receive such shares or all other additional
stock and other securities and property.

         3.3 REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE. If
any recapitalization, reclassification or reorganization of the capital stock of
the Company, or any consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets or other
transaction shall be effected in such a way that holders of Common Stock shall
be entitled to receive stock, securities, or other assets or property (an
"Organic Change"), then, as a condition of such Organic Change, lawful and
adequate provisions shall be made by the Company whereby the Holder hereof shall
thereafter have the right to purchase and receive (in lieu of the shares of the
Common Stock of the Company immediately theretofore purchasable and receivable
upon the exercise of the rights represented hereby) such shares of stock,
securities or other assets or property as may be issued or payable with respect
to or in exchange for a number of outstanding shares of such Common Stock equal
to the number of shares of such stock immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby. In the event of
any Organic Change, appropriate provision shall be made by the Company with
respect to the rights and interests of the Holder of this Warrant to the end
that the provisions hereof (including, without limitation, provisions for
adjustments of the Stock Purchase Price and of the number of shares purchasable
and receivable upon the exercise of this Warrant) shall thereafter be
applicable, in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise hereof. The Company will not effect any such
consolidation, merger or sale unless, prior to the consummation thereof, the
successor corporation (if other than the Company) resulting from such
consolidation or the corporation purchasing such assets shall assume by written
instrument the obligation to deliver to such Holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
Holder may be entitled to purchase.

         3.4 CERTAIN EVENTS. If any change in the outstanding Common Stock of
the Company or any other event occurs as to which the other provisions of this
Section 3 are not strictly

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<PAGE>

applicable or if strictly applicable would not fairly protect the purchase
rights of the Holder of the Warrant in accordance with such provisions, then the
Board of Directors of the Company shall make an adjustment in the number and
class of shares available under the Warrant, the Stock Purchase Price or the
application of such provisions, so as to protect such purchase rights as
aforesaid. The adjustment shall be such as will give the Holder of the Warrant
upon exercise for the same aggregate Stock Purchase Price the total number,
class and kind of shares as such Holder would have owned had the Warrant been
exercised prior to the event and had such Holder continued to hold such shares
until after the event requiring adjustment.

         3.5 NOTICES OF CHANGE.

         (a) Immediately upon any adjustment in the number or class of shares
subject to this Warrant and of the Stock Purchase Price, the Company shall give
written notice thereof to the Holder, setting forth in reasonable detail and
certifying the calculation of such adjustment.

         (b) The Company shall give written notice to the Holder at least 10
calendar days prior to the date on which the Company closes its books or takes a
record for determining rights to receive any dividends or distributions or any
right to subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right.

         (c) The Company shall give written notice to the Holder at least 10
calendar days prior to the date on which an Organic Change shall take place,
including in such notice the date as of which the Organic Change is expected to
become effective and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their shares of Common Stock for
securities or other property, if any, deliverable upon such Organic Change.

         (d) The Company shall initiate the delivery of written notice to the
Holder of any voluntary or involuntary dissolution, liquidation or winding-up of
the Company (the "Dissolution") on the date such Dissolution is publicly
announced, including in such notice the date as of which the Dissolution is
expected to become effective and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property, if any.

         4.       LISTING. The Company shall file any forms and do any acts as
shall be required from time to time to secure the listing or quotation of the
Common Stock issuable upon exercise of the Warrant with each national securities
exchange or automated quotation system, if any, upon which shares of such
securities are then listed or traded and shall maintain, so long as any other
shares of such securities shall be so listed or traded, such listing or
quotation of all securities issued or issuable upon the exercise of this
Warrant.

         5.       ISSUE TAX. The issuance of certificates for shares of Common
Stock upon the exercise of the Warrant shall be made without charge to the
Holder of the Warrant for any issue tax (other than any applicable income taxes)
in respect thereof; provided, however, that the Company shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the then
Holder of the Warrant being exercised.

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<PAGE>

         6.       CLOSING OF BOOKS. The Company will at no time close its
transfer books against the transfer of any warrant or of any shares of Common
Stock issued or issuable upon the exercise of any warrant in any manner which
interferes with the timely exercise of this Warrant.

         7.       NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a stockholder of
the Company or any other matters or any rights whatsoever as a stockholder of
the Company. No dividends or interest shall be payable or accrued in respect of
this Warrant or the interest represented hereby or the shares purchasable
hereunder until, and only to the extent that, this Warrant shall have been
exercised. No provisions hereof, in the absence of affirmative action by the
Holder to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the Holder hereof, shall give rise to any liability of
such Holder for the Stock Purchase Price or as a stockholder of the Company,
whether such liability is asserted by the Company or by its creditors.

         8.       REPRESENTATIONS OF HOLDER. Holder represents that it has all
necessary power and authority to execute and deliver this Warrant. Holder
further represents that it understands that neither this Warrant nor the shares
of Common Stock issuable upon the exercise thereof have been registered under
the Act, and are being offered pursuant to an exemption form registration
contained in the Act based in part upon Holder's representations contained in
this Section 8. Holder represents that by reason of its own, or of its
management's, knowledge and experience in financial and business matters, Holder
is capable of evaluating the merits and risks of its investment in the Company
and has the capacity to protect its own interests in connection with the
issuance of this Warrant and the shares of Common Stock issuable upon the
exercise thereof, and is able to bear risk, including a complete loss, of the
investment. Holder represents that it is an "accredited investor" within the
meaning set forth in Regulation D under the Act. Holder represents that it is
acquiring such securities for its own account for investment only, and not with
a view towards their distribution.

         9.       WARRANTS TRANSFERABLE. This Warrant is not transferable except
to an affiliate of Holder; provided that Holder provides prior written notice of
such transfer to the Company, such transferee agrees to be bound by the
obligations hereunder, and the Company may treat such transferee as the absolute
owner hereof for any purpose and as the person entitled to exercise the rights
represented by this Warrant.

         10.      RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANT. The rights
and obligations of the Company, of the Holder of this Warrant and of the holder
of shares of Common Stock issued upon exercise of this Warrant, shall survive
the exercise of this Warrant.

         11.      MODIFICATION AND WAIVER. This Warrant and any provision hereof
may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of the same is sought.

         12.      NOTICES. Any notice, request or other document required or
permitted to be given or delivered to the Holder hereof or the Company shall be
in writing, shall refer specifically to this Warrant and shall be personally
delivered or shall be sent by certified mail or internationally recognized
overnight courier, postage prepaid, to Holder at its address as shown

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on the signature page hereto or to the Company at the address indicated therefor
in the first paragraph of this Warrant or such other address as either may from
time to time provide to the other in writing. Any delivery, notice, request or
other document given in conformity with this Section 12 shall be deemed to be
effective when received by the addressee.

         13.      BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding
upon any corporation succeeding the Company by merger, consolidation or
acquisition of all or substantially all of the Company's assets. All of the
covenants and agreements of the Company shall inure to the benefit of the
successors and assigns of the Holder hereof.

         14.      DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description
headings of the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. This Warrant
shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the laws of the State of California.

         15.      LOST WARRANTS. The Company represents and warrants to the
Holder hereof that upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction, or mutilation of this Warrant and, in
the case of any such loss, theft or destruction, upon receipt of an indemnity
reasonably satisfactory to the Company, or in the case of any such mutilation
upon surrender and cancellation of such Warrant, the Company, at its expense,
will make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.

         16.      FRACTIONAL SHARES. No fractional shares shall be issued upon
exercise of this Warrant. The Company shall, in lieu of issuing any fractional
share, pay the Holder entitled to such fraction a sum in cash equal to such
fraction multiplied by the then effective Stock Purchase Price.

                      [THIS SPACE INTENTIONALLY LEFT BLANK]

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         IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officers, thereunto duly authorized this ___ day of December,
2002.

                                            INTRABIOTICS PHARMACEUTICALS, INC.

                                            By: /s/ Eric Bjerkholt
                                                -------------------------------
                                                Eric H. Bjerkholt
                                                Sr. Vice President and CFO

HOLDER:

J.D. MOLEX LLC

By: /s/ J.D. Molex LLC
    ------------------

Address: 1484 Saratoga Ave., Saratoga, CA 95070

<PAGE>

                                SUBSCRIPTION FORM

                                      Date: _________________, 200_

IntraBiotics Pharmaceuticals, Inc.
1245 Terra Bella Avenue
Mountain View, CA  94043
Attn: Chief Financial Officer

Ladies and Gentlemen:

[ ]      The undersigned hereby elects to exercise the warrant issued to it by
         IntraBiotics Pharmaceuticals, Inc. (the "Company") and dated December
         31, 2002 Warrant No. CW-5 (the "Warrant") and to purchase thereunder
         __________________________________ shares of the Common Stock of the
         Company (the "Shares") at a purchase price of $____ per Share or an
         aggregate purchase price of ________________ Dollars ($__________) (the
         "Purchase Price").

[ ]      The undersigned hereby elects to convert ______________________ percent
         (___%) of the value of the Warrant pursuant to the provisions of
         Section 1.2 of the Warrant.

         Pursuant to the terms of the Warrant the undersigned has delivered the
Purchase Price herewith in full in cash or wire transfer.

                                   Very truly yours,

                                   _____________________________________________
                                           Print Entity Name, if applicable

                                   By: _________________________________________

                                   Print Name: _________________________________

                                   Title: ______________________________________