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                                                                   Exhibit 10.5


                           TRIPLE NET LABORATORY LEASE

         This Lease is made and entered into as of January 30, 1998 between
Fifth & Potter Street Associates, LLC ("Landlord") and Dynavax Technologies
Corporation ("Tenant").

     1. BASIC LEASE TERMS.

         1.1. COMMENCEMENT OF LEASE. The term of this Lease shall commence the
date Landlord notifies Tenant in writing that the construction to be performed
by Landlord pursuant to Paragraph 2.2 hereof has been substantially completed or
April 1, 1998 whichever is earlier. Completion shall have occurred when the
Premises are in such condition as to permit Landlord to file a Notice of
Completion with respect to its work, and all permits and approvals for occupancy
and use by Tenant have been issued by the City of Berkeley.

         1.2. LEASE TERM. This Lease shall continue in force for a term of five
years.

         1.3. BASE MONTHLY RENT.

     Months 1 thru 30        -    $2.25/rentable sq. ft. (N,N,N)
     Months 31 thru 60       -    $2.35/rentable sq. ft. (N,N,N)

         1.4. TENANT'S PRO RATA SHARE. All references in this Lease to Tenant's
pro rata share of any expense shall mean the total expense of any such item
multiplied by a fraction, the numerator of which shall be the total floor area
of the Premises (as adjusted pursuant to paragraph 2.1 of this Lease) and the
denominator of which shall be the total floor area of the property. The "floor
area" of the Premises shall be measured from the exterior surface of all
exterior walls and from the center of all walls separating the Premises from
adjacent Premises and/or common areas. The total floor area of the property
shall be measured from the exterior surface of all exterior walls and shall
include all common and core areas within the property. Tenant's pro rata share
shall be adjusted as necessary if the actual square footage of the Premises is
other than as set forth in paragraph 2.1 or the square footage of the property
changes. As used in this Lease, the term PREMISES refers to that portion of the
building leased to Tenant for Tenant's exclusive use. The term PROPERTY refers
to the building in which the Premises are located.

         1.5. ESTIMATED PAYMENTS.

     Estimated monthly taxes                 $0.146 per square foot
     Estimated monthly insurance             $0.023 per square foot
     Estimated monthly maintenance           $0.056 per square foot
     Estimated monthly management            5% base monthly rent
     Estimated monthly security and service  $0.052 per square foot

         1.6. SECURITY DEPOSIT. The Tenant shall deposit with Landlord $17,919
as a security deposit for the faithful performance of this Lease.

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         1.7. USE. The leased Premises will be used exclusively for GENERAL
RESEARCH AND DEVELOPMENT LABORATORIES WITH ASSOCIATED ADMINISTRATION, INCLUDING
BUT NOT LIMITED TO RESEARCH AND ADMINISTRATION OF DNA-BASED VACCINES TO DEVELOP
TREATMENTS FOR ALLERGIC, INFECTIOUS AND ONCOLOGIC DISEASES, and for no other
purpose whatsoever, without Landlord's consent which shall not be unreasonably
withheld.

     2. PREMISES.

         2.1. DESCRIPTION. Landlord hereby leases to Tenant for its exclusive
use and occupancy subject to the provisions of this Lease approximately 7,240
usable square feet, as more particularly identified in Exhibit A annexed (the
"Premises"), which constitutes a portion of a larger building owned by Landlord,
commonly known as 717 Potter Street, Berkeley, California 94710 (the
"property"). In addition to the square footage described above, Tenant shall be
deemed to occupy an additional undivided 10% of such square footage for purposes
of the calculation of base monthly rental and pro rata expense payments. Said
10% represents Tenant's share of the rental charges for the common area. For all
calculations required under the terms of this Lease respecting proration of
expenses, costs or charges, Tenant's Premises shall be deemed to consist of the
square footage of the Premises augmented by the portion of the common area
attributable to Tenant pursuant to this paragraph. As to such common areas
(those outside of the Premises, but allocated to Tenant pursuant to this
paragraph), Tenant shall have an undivided interest for nonexclusive use in
conjunction with all other tenants of the building.

         2.2. WORK OF IMPROVEMENT. The respective obligations of Landlord and
Tenant to perform the work and supply material and labor to prepare the Premises
for occupancy are set forth in EXHIBIT B annexed to and incorporated in this
Lease. Landlord and Tenant shall expend all funds and do all acts required of
them respectively in EXHIBIT B and shall have the work performed promptly and
diligently in a first class, workmanlike manner. Tenant shall not commence any
construction of improvements to be undertaken by Tenant until Landlord has
approved in writing the final drawings for said improvements.

         2.3. POSSESSION. Landlord shall deliver occupancy of the Premises to
Tenant on the commencement date as set forth in Paragraph 1.1 of this Lease.
Notwithstanding herein to the contrary, Tenant shall have the right to enter the
Premises prior to the commencement of the term to take reasonable preparatory
measures for its occupancy of the Premises, including, without limitation, the
installation of its trade fixtures, furnishings, and telephone and computer
equipment. Such entry shall be subject to all of the terms and conditions of
this Lease, except that Tenant shall not be required to pay any Base Rent or
Additional Rent during such early occupancy period.

         2.4. OPTION TO EXPAND. See addendum.

     3. TERM.

         3.1. TERM. The Lease shall commence on the date specified in Paragraph
1.1 (the "commencement date") and shall continue thereafter for the term
specified in Paragraph 1.2 (the "term"), unless sooner terminated or extended
pursuant to the provisions of this Lease.

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         3.2. DELAY IN COMMENCEMENT. If, for any reason, Landlord cannot deliver
possession of the Premises to Tenant on the commencement date, such failure
shall not affect the validity of this Lease nor shall it extend the term or
render Landlord liable to Tenant for any loss or damage resulting therefrom;
except that if possession is not delivered to Tenant on the commencement date,
Tenant shall not be obligated to pay rent until Landlord tenders possession of
the Premises to Tenant in compliance with Paragraph 1.1. After 60 days following
the projected commencement date have elapsed, if Landlord still cannot deliver
possession to Tenant, Tenant or Landlord shall have the right to terminate this
Lease upon written notice delivered to Landlord, whereupon Landlord shall
promptly refund any sums deposited by Tenant with Landlord. In such event,
Tenant shall have no further recourse against Landlord with respect to the Lease
or Landlord's inability to deliver the Premises to Tenant and Landlord shall
have no further recourse against Tenant with respect to the Lease.
Notwithstanding any other provision of this Lease, Landlord shall have no
obligation to pay any damages or adjustment to Tenant as a result of delays
caused by matters outside of Landlord's control, including, without limitation,
Tenant's conduct, acts of God, acts of war, inclement weather and/or labor
strikes (including strikes affecting the supply of labor and/or materials).

         3.3. OPTION TO EXTEND TERM. See addendum.

     4. RENT.

         4.1. BASE MONTHLY RENT. Beginning on the commencement date, Tenant
shall pay to Landlord as rent for the Premises in advance on the first day of
each calendar month of the term, without deduction, offset, prior notice or
demand, except as provided herein, in lawful money of the United States of
America, the per square foot rental rate set forth in paragraph 1.3 multiplied
by the square footage of the Premises as adjusted pursuant to paragraph 2.1. If
the actual square footage of the Premises is determined to be other than the
unadjusted amount set forth in Paragraph 2.1, the monthly base rent shall be
increased or decreased based upon the actual floor area and the adjustment
thereto set forth in Paragraph 2.1. If Tenant makes any alterations or additions
that increase the square footage of the Premises, the monthly rent shall be
increased in proportion to the resulting increase in floor area. If the date
that the obligation to pay monthly rent commences is not the first day of a
calendar month, such installment shall be applied on a per diem basis against
payment of the rent from the date rent commences until the first day of the next
succeeding calendar month. Any unused portion of said amount shall be applied
against payment of the rent for the following calendar month, and the balance of
the rent for that month shall be due on the first day thereof.

         4.2. BASE RENT ADJUSTMENT. See Paragraph 1.3.

         4.3. MODE OF PAYMENT. Tenant shall pay all rent due Landlord at
Landlord's address set forth on the signature page hereof, or any such other
place or places as Landlord may designate from time to time in writing.

         4.4. ADDITIONAL RENT. Landlord shall receive the rent set forth herein
free and clear of any and all other impositions, taxes, charges, assessments or
expenses of any nature whatsoever associated with the operation, maintenance,
and management of the Premises, the property and the land on which it is
situated, including, without limitation, charges levied by any

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assessment district now in existence or hereafter created which affects the
property, except as provided herein. The foregoing expenses and charges may
hereinafter be referred to singly and/or collectively as "Operating Expenses"
(Operating Expenses are defined as maintenance, taxes, insurance, management,
security and services as delineated in Section 1.5). tenant's pro rata portion
of all such charges, costs and expenses, together with all other sums payable
under this Lease, shall be additional rental hereunder, and Tenant's failure to
pay any such charge, cost, expense or sum shall entitle Landlord to exercise the
rights and remedies as provided in this Lease for failure of Tenant to pay rent.
Notwithstanding anything herein to the contrary, Tenant shall not have any
obligation to pay Operating Expenses during the initial year of the Lease term
which exceed $38,227/year (40 cents per square foot/month), and for each
successive year, Tenant's pro-rata share of Operating Expenses shall not
increase by more than five percent per year. Tenant shall in no event be
entitled to any abatement or reduction of rent or other monetary sums payable
hereunder, except as expressly provided herein, notwithstanding any present or
future law to the contrary. Tenant expressly waives the provisions of any such
law.

         4.5. ESTIMATED PAYMENTS. Estimated payments for taxes, insurance,
maintenance of common areas, management of the property and common area
utilities and services are set forth in Paragraph 1.5. Tenant shall pay the
estimated payments together with the monthly rent in advance on the first day of
each calendar month of the term, without deduction, offset, prior notice or
demand, except as provided herein. Landlord may increase or decrease the
estimated payments upon 30 days' written notice to Tenant based upon statements
received or charges incurred by Landlord, information available to Landlord as
to the probable cost of expected charges and expenses, or Landlord's reasonable
estimate of the probable amount of expected charges or expenses. In the event
that any taxes payable in respect of the property are levied or assessed against
the property and other property, or in the event that any property insurance
carried by Landlord is carried under a policy or policies covering the property
and other properties, the amounts payable by Tenant hereunder in respect of such
taxes or such insurance shall be determined by reference to allocations or any
such taxes and any such insurance to the property reasonably made by Landlord.
Landlord shall be entitled to retain the monies received from such payments in a
fund pending payment of all such costs and charges. No more frequently than once
each calendar quarter, Landlord shall determine the actual costs of operation
and maintenance of the property. Tenant shall remit to Landlord on demand its
unpaid pro rata share of the actual expense. In the event Tenant paid more than
its pro rata share of the actual expenses for such period of time, Landlord
shall apply such overpayment towards the next estimated payments owing by
Tenant. At the termination of this Lease, an accounting for such charges and
expenses shall be made to the nearest practical accounting period, and Tenant
shall pay to Landlord any balance due or shall be entitled to a prompt refund of
any excess amount paid. Landlord shall furnish to Tenant, within sixty (60) days
after the end of each calendar year, a statement in reasonable detail, including
supportive documentation, setting forth (a) Landlord's actual costs of operation
and maintenance with respect to the property (including taxes and insurance) for
that year by category and amount; (b) the amount of Tenant's additional rent for
that year; and (c) the sum of Tenant's monthly estimated rent payments made
during that year.

Tenant shall have the right to audit Landlord's records respecting for each
calendar year during the term of this Lease by notifying Landlord within 120
days following the end of each such calendar year. If an audit (performed by a
certified public accountant on behalf of Tenant) reveals that Landlord has
overcharged Tenant for Operating Expenses, Landlord shall refund the

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amount overcharged within ten days after such determination has been made. If
Landlord has overcharged Tenant by more than 5%, Landlord shall refund the
overcharge amount and, in addition, shall pay the reasonable costs of Tenant's
audit.

         4.6. SECURITY DEPOSIT.

         4.7. LATE CHARGES. Tenant hereby acknowledges that late payment by
Tenant to Landlord of rent or other sums due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which is
extremely difficult to ascertain. Such costs include, without limitation,
processing, accounting charges and late charges which may be imposed on Landlord
by the terms of any mortgage or trust deed covering the Property. Accordingly,
if any installment of Base Monthly Rent or any other sum due from Tenant shall
not be received by Landlord within five business Days after the amount is due,
Tenant shall pay to Landlord a late charge equal to 5% of the overdue amount.
The parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs Landlord will incur by reason of Tenant's late payment.
Landlord's acceptance of a late charge shall not constitute a waiver of Tenant's
default respecting the overdue amount or prevent Landlord from exercising any of
the remedies available hereunder.

     5. TAXES.

         5.1. TAXES ON THE PREMISES AND THE PROPERTY. Tenant agrees to pay to
Landlord in addition to the rent and other charges herein, its pro rata share of
all taxes pursuant to Paragraph 4.4. As used herein TAXES shall include, without
limitation, the following: (a) all real estate and personal property taxes,
assessments, rates and charges, general and special, ordinary and extraordinary,
unforeseen as well as foreseen, of any kind and nature whatsoever, including,
but not limited to, assessment for public improvements or benefits, which relate
to any period falling in whole or in part within the term and which are
assessed, levied, confirmed, imposed or become a lien upon or payable in respect
to the Premises or the property or any building or other improvements thereon
and any taxes on personal property owned by Landlord and used in conjunction
with the operation of the property, and (b) any tax or excise on rents or other
tax howsoever described, unforeseen as well as foreseen, at any time imposed
under the laws of any governmental authority which relates to any period failing
in whole or in part within the term and which is levied or assessed directly or
indirectly against Landlord or on the rental and charges payable under leases
for portions of the property or on any arrangement relating thereto, wholly or
partly in the place of, or in lieu of an increase in, or in addition to, taxes
assessed or imposed by such authority on land and improvements, including,
without limiting the generality of the foregoing, any gross receipts tax to the
extent imposed upon a landlord by reason of the receipt of rental, charges or
other income from the Premises or the property. Tenant's share of taxes shall be
equitably prorated to cover only the period of time within the fiscal tax year
during which this Lease is in effect. With respect to any assessments which may
be levied against or upon the Premises, and which may be paid in annual
installments, only the amount of such annual installments (with appropriate
proration for any partial year) and interest due thereon shall be included
within the computation of the annual taxes.

Notwithstanding anything herein to the contrary,

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     (a) Landlord shall be solely responsible for any increases in "taxes"
and/or assessments that result from "new construction" or a "change of ownership
of the Building or the property (and for purposes hereof, "new construction" or
a "change of ownership" shall have the same meaning as in part 0.5 of division 1
of the California Revenue and Taxation Code or any amendments or successor
statutes to those sections);

     (b) Tenant's obligation to pay any assessments included within "taxes"
shall be calculated on the basis of the amount due if Landlord had allowed
assessment to go to bond and the same were to be paid over the longest period
available; and

     (c) Tenant shall be required to pay any tax based on (1) gross or net
rents, (2) the square footage of the Premises or the property, (3) this
transaction (or any document relating thereto), (4) the occupancy of Tenant, or
(5) any other tax, fee, or excise, however described, including, without
limitation, a so called "value added tax" as a direct substitution in whole or
part for, or in addition to, any real property tax, only to the extent that any
such tax is in substitution of any real property tax it would otherwise be
obligated to pay.

         5.2. TAXES ON TENANT'S PROPERTY. Tenant shall pay before delinquency
all taxes levied or assessed on Tenant's fixtures, improvements, furnishings,
merchandise, equipment and personal property in and on the Premises, whether or
not affixed to the real property. If at any time after any tax or assessment has
become due or payable, Tenant or its legal representative neglects to pay such
tax or assessment, and is not contesting such tax or assessment, Landlord shall
be entitled, but not obligated, to pay the same at any time thereafter and such
amount so paid by Landlord shall be repaid by Tenant to Landlord with Tenant's
next rent installment. Tenant shall timely pay all taxes imposed by local,
state, and federal law upon Tenant. Notwithstanding the foregoing, Tenant shall
have the right to contest personal property taxes assessed against Tenant.

     6. INSURANCE.

         6.1. PROPERTY/RENTAL INSURANCE -- PROPERTY AND PREMISES. During the
term Landlord shall keep the property insured against loss or damage by fire and
those risks normally included in the term "special perils" including (a) flood
coverage, (b) earthquake coverage at the election of Landlord if available at
commercially reasonable rates, (c) coverage for loss of rents including
Operating Expenses and (d) boiler and machinery coverage if Landlord deems
necessary. All such insurance shall be solely for Landlord's benefit and Tenant
shall have no rights respecting any such policy or sums paid pursuant to the
terms of such policies. The amount of such insurance shall be not less than 100%
of the replacement value of the property. Any recovery received from said
insurance policy shall be paid to Landlord. Tenant, in addition to the rent and
other charges provided herein, agrees to pay to Landlord its pro rata share of
the premiums for all such insurance pursuant to Paragraph 4.4 of this Lease.
Tenant shall pay to Landlord Tenant's pro rata share of any deductible within 15
days after Landlord sends Tenant an invoice for the amount owing.

6.2. PROPERTY INSURANCE -- FIXTURES AND INVENTORY. During the term, Tenant
shall, at its sole expense, maintain insurance with "special perils" coverage on
any and all fixtures, leasehold improvements installed hereafter, furnishings,
merchandise, equipment or

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personal property in or on the Premises, whether in place as of the date hereof
or installed hereafter, for the full replacement value thereof, and Tenant shall
also have sole responsibility and cost for maintaining any other types of
insurance deemed necessary, appropriate or desirable by Tenant. Any and all
deductibles shall be paid by Tenant.

         6.3. LANDLORD'S LIABILITY INSURANCE. During the term, as an expense of
the property, Landlord shall maintain a policy or policies of commercial general
liability insurance insuring Landlord and naming Tenant as additional insured
(and such others as designated by Landlord) against liability for bodily injury,
death and property damage on or about the property, with combined single limit
coverage of not less than $10 million.

Tenant shall pay its pro rata share of the premium for such insurance pursuant
to Paragraph 4.4.

         6.4. TENANT'S LIABILITY INSURANCE. Tenant shall, at its sole expense,
maintain for the mutual benefit of Landlord and Tenant, commercial general
liability and property damage insurance against claims for bodily injury, death
or property damage occurring in or about the Premises or arising out of the use
or occupancy of the Premises, with combined single limit coverage of not less
than $2 million. Such insurance shall include, so-called host liquor liability
coverage from liability arising from the consumption of alcoholic beverages
consumed at the Premises. Tenant shall furnish to landlord prior to the
Commencement Date, and at least 30 days prior to the expiration date of any
policy, certificates indicating that the liability insurance required of Tenant
is in full force and effect, that Landlord has been named as an additional
insured, and that no such policy will be canceled unless 30 days' prior written
notice of cancellation has been given to Landlord. Said policies shall provide
that Landlord, as an additional insured, may recover for any covered loss
suffered by Landlord by reason of Tenant's negligence, and shall include a broad
form liability endorsement. All insurance policies obtained by Tenant pursuant
to the requirement of this Lease shall be in a form and from a company
reasonably satisfactory to Landlord.

         6.5. WAIVER OF SUBROGATION. Landlord hereby releases Tenant and its
officers, agents, employees, and servants, and Tenant hereby releases Landlord
and its officers, agents, employees and servants, from any and all claims or
demands of damages, loss, expense or injury to the Premises, or to the
furnishings and fixtures and equipment or inventory or other property of either
Landlord or Tenant in, about or upon the Premises, which is caused by, or
results from, or is incident to any perils, events or happenings which are the
subject of insurance which is carried or is required to be carried by the
respective parties and in force at the time of any such loss, whether due to the
negligence of Landlord or Tenant or their agents, employees, contractors or
invitees. Each party shall cause each insurance policy obtained by it to provide
that the insurance company waives all right of recovery by way of subrogation
against either party in connection with any damage covered by any policy.

         6.6. INDEMNIFICATION. Except in the case of intentional misconduct by
Landlord or Landlord's reckless disregard of its duties or the negligence of
Landlord, its employees, agents or contractors, Tenant will indemnify Landlord
and save it harmless from and against any and all claims, actions, damages,
liability and expense in connection with loss of life, personal injury and/or
damage to property arising from or out of any occurrence in, upon or at the
Premises, or the occupancy or use by Tenant of the Premises or the property or
any part

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thereof, or occasioned wholly or in part by any acts or omissions of Tenant, its
agents, contractors, employees, servants, licensees or concessionaires in or
about the Premises or by anyone permitted to be on the Premises by Tenant. In
case Landlord shall be made a party to any such litigation commenced by or
against Tenant, then Tenant shall protect and hold Landlord harmless from all
claims, liabilities, costs and expenses, and shall pay all costs, expenses and
reasonable legal fees incurred by Landlord in connection with such litigation.

         6.7. PLATE GLASS REPLACEMENT. If any glass in and about the Premises is
damaged or broken by or as a result of the acts of Tenant and its agents,
contractors and employees, Tenant shall pay Landlord's cost of replacement,
provided that such amount shall not exceed the deductible then in effect on
Landlord's insurance policy, if any, covering the damaged glass. Nothing herein
shall be construed to require Landlord or Tenant to carry plate glass insurance.

         6.8. WORKER'S COMPENSATION INSURANCE. Tenant shall, at its sole
expense, maintain and keep in force during the term a policy or policies of
workman's compensation insurance and any other employee benefit insurance
sufficient to comply with all applicable laws, statutes, ordinances and
governmental rules, regulations or requirements.

     7. PREMISES & PROPERTY MAINTENANCE & REPAIR.

         7.1. PREMISES. Throughout the term, Tenant agrees to keep and maintain
all improvements and appurtenances upon the Premises, including all plumbing,
heating and cooling appliances, wiring and glass, in good order and repair
including the replacement of such improvement and appurtenances when necessary
provided that Tenant's obligation respecting plumbing, electrical and HVAC
systems shall only require Tenant to keep and maintain the exposed portions of
such equipment and systems. Landlord shall keep and maintain the unexposed
portions of such systems, except to the extent such repair or maintenance arises
from Tenant's negligence or willful misconduct. Tenant hereby expressly waives
the provisions of any law permitting repairs by a tenant at the expense of a
landlord, including, without limitation, all rights of Tenant under California
Civil Code Sections 1941 through 1946, inclusive. Tenant agrees to keep the
Premises clean and in sanitary condition. Tenant further agrees to keep the
interior of the Premises, including, without limitation, the windows, floors,
walls, doors, showcases and fixtures clean and neat in appearance and to remove
all trash and debris which may be found in or around the Premises. If Landlord
reasonably deems any repairs and/or maintenance to be made by Tenant necessary
and Tenant refuses or neglects to commence such repairs and/or maintenance and
complete the same with reasonable dispatch upon demand, Landlord and its agents
may enter the Premises and cause such repairs and/or maintenance to be made and
shall not be responsible to Tenant for any loss or damage occasioned thereby.
Tenant agrees that, upon demand, it shall pay to Landlord the cost of any such
repairs, together with accrued interest from the date of Landlord's payment at
the highest rate allowable by law. Notwithstanding anything to the contrary
above, Landlord may elect to enter into commercially reasonable maintenance
contracts for the provision of all or a part of Tenant's maintenance obligations
as set forth in this paragraph. Upon such election, Tenant shall be relieved
from its obligations to perform only those maintenance obligations covered by
the maintenance contract and only for the duration of the maintenance contract,
Tenant shall bear the cost of such

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maintenance contract (allocate able to the tenant), in accordance with paragraph
4.4 above, which shall be paid in advance on a monthly basis with Tenant's
monthly rent payments.

         7.2. COMMON AREAS. Subject to Tenant's obligations in paragraph 7.1,
Landlord shall keep and maintain the common areas of the property (which shall
include, without limitation, the foundation, roof, parking, landscaping, HVAC,
electrical, plumbing, exterior walls and structural components of the
improvements on the property) in reasonably good order and condition, except
that damage occasioned by the negligent acts of Tenant (inclusive of Tenant's
employees, agents, guests and invitees) shall be repaired by Landlord at
Tenant's sole expense. Tenant shall have the obligation to notify Landlord, in
writing, of any repairs or maintenance to the common areas which may be
necessary, and Landlord shall make necessary repairs within a reasonable time.
The manner and method of maintenance and repair of the common areas shall be at
Landlord's sole and absolute discretion. Except in the event that replacement of
HVAC components, structural components or the roof is due to the negligent acts
of Tenant (inclusive of Tenant's employees, agents, guests and invitees), Tenant
shall not be obligated to pay a pro rata portion of the cost of replacement of
any of said components and Tenant's obligation for reimbursement shall be
limited to maintenance expenses associated with such components in place in the
property. Tenant, in addition to the rent and other charges provided herein,
agrees to pay to Landlord its pro rata share of costs of maintaining the common
areas pursuant to Paragraph 4.4.

         7.3. ALTERATIONS, CHANGES AND ADDITIONS BY TENANT. Tenant shall make no
changes, alteration, or additions ("Alterations") to any portion of the Property
without Landlord's prior written consent which shall not be unreasonably
withheld. As a condition to consent, Landlord may require that each Alteration
be under the supervision of a competent architect or competent licensed
structural engineer and made in accordance with plans and specifications
furnished to and approved by Landlord prior to the commencement of work, that
Tenant remove such Alterations at the expiration of the Term and restore the
Premises and Property to their condition prior to the Alteration. As a further
condition to consent, Landlord may require Tenant to provide Landlord, at
Tenant's sole expense, with a lien and completion bond in an amount equal to
125% of the estimated cost of the Alteration to insure Landlord against any
liability for mechanic's and materialman's liens and to ensure completion of the
Alteration. In the event that any Alteration increases the floor area of the
Premises, the Base Monthly Rent and Tenant's Pro Rata Share shall be
proportionately increased. Tenant shall provide 14 days' written notice to
Landlord of the date on which construction of each Alteration will commence in
order to permit Landlord to post a notice of nonresponsibility if appropriate,
given the nature and scope of the Alteration. Each Alteration shall be
constructed in a good and workmanlike manner in accordance with all Regulations
relating to such construction. Every Alteration shall remain for the benefit of
and become the property of Landlord, unless Landlord requires its removal by
giving Tenant written notice at least 30 Days before the date Tenant is to
vacate the Premises, in which case, Tenant shall remove the Alteration(s) and
restore the Premises to their pre-Alteration condition. Notwithstanding the
above contents of paragraph 7.3, Tenant shall not be obligated to obtain
Landlord's consent to any Alterations the cost of which is less than $25,000 in
each instance, provided such Alteration does not affect the structural integrity
of the Building, or the functional integrity of the utility systems, and is not
visible from the exterior of the Premises.

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         7.4. USE OF PLUMBING, ELECTRICAL AND HVAC SYSTEMS. Tenant shall not use
the plumbing facilities for any purpose other than the use specified in
paragraph 1.7. The expense of repair of any breakage, stoppage or other damage
relating to the plumbing and resulting from the introduction by Tenant, its
agents, employees or invitees of foreign substances into the plumbing facilities
shall be borne by Tenant. Tenant shall not use the electrical or heating and
air-conditioning ("HVAC") systems for any purpose other than the use specified
in paragraph 1.7. The expense of repair of any breakage or other damage
resulting to the electrical and/or HVAC systems resulting from the use by
Tenant, its agents, employees or invitees of those systems for any purpose other
than that for which the uses specified in Section 1.7 shall be borne by Tenant.

         7.5. LIENS. Tenant shall keep the Premises and the property free from
any liens arising out of work performed, materials furnished or obligations
incurred by Tenant and shall indemnify, hold harmless and defend Landlord from
any liens and encumbrances arising out of any work performed or materials
furnished by or at the direction of Tenant. In the event that Tenant shall not,
within 20 days following the imposition of any such lien, cause such lien to be
released of record by payment or posting of a proper bond, Landlord shall have,
in addition to all other remedies provided herein and by law, the right, but not
the obligation, to cause the same to be released by such means as it shall deem
proper, including payment of the claim giving rise to such lien. All such sums
paid by Landlord and all expenses by Landlord in connection therewith, including
attorney's fees and costs, shall be payable to Landlord by Tenant on demand with
interest from the date paid by Landlord to the date of Tenant's reimbursement to
Landlord at the highest rate allowable by law. Landlord shall have the right at
all times to post and keep posted on the Premises any notices permitted or
required by law, or which Landlord shall deem proper, for the protection of
Landlord and the property and any other party having an interest therein, from
mechanic's and materialmen's liens, and Tenant shall give to Landlord at least
14 days prior written notice of the expected date of commencement of any work
relating to alterations or additions to the Premises.

     8. MANAGEMENT. Tenant, as part of the Operating Expenses, will pay no more
than 5% of its Base Rent as the management fee. Tenant understands that the
Wareham Property Group, Inc., an affiliate of Landlord, or another affiliated or
unaffiliated third party will be responsible for the management of the property.

     9. UTILITIES AND SERVICES.

         9.1. PREMISES. Landlord shall make water, sewer, telephone and utility
service available to the property. Tenant shall pay prior to delinquency
throughout the term the cost of water, gas, heating, cooling, sewer, telephone,
electricity, garbage, air-conditioning and ventilating, janitorial services,
landscaping and all other materials and utilities supplied directly to the
Premises. If any such services are not separately metered to Tenant, Tenant
shall pay a reasonable proportion of all charges which are jointly metered, the
determination to be made by Landlord in good faith, and payment to be made by
Tenant within 30 days of receipt of the statement for such charges.

         9.2. COMMON AREAS. Landlord shall provide utilities, first class
landscaping, janitorial, lighting for the common areas and, if Landlord deems it
necessary or appropriate,

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<PAGE>

security services for the common areas of the property. Tenant shall bear its
pro rata share of the costs to Landlord in providing such services pursuant to
Paragraph 4.4. Security services may, in the Landlord's discretion, include
hiring of guards during hours determined by Landlord or requested by Tenant at
Tenant's expense. Tenant shall have the right of access to such portions of the
property outside the Premises as are necessary to enable Tenant to exercise its
rights under this Lease.

         9.3. LIMITATION OF LIABILITY. Landlord shall not be in default under
the provisions of this Lease or be liable for any damages directly or indirectly
resulting from the following conditions: (1) the interruption of use of any
equipment in connection with the furnishing of any of the foregoing services;
(2) failure to furnish or delay in furnishing any such services where such
failure or delay is caused by accident or any condition or event beyond
Landlord's reasonable control; (3) the limitation, curtailment or rationing of,
or restrictions on, use of water, electricity, gas or any other form of energy
serving the Premises, to the extent such interruption or failure or limitation
is beyond Landlord's reasonable control. Landlord shall not be liable under any
circumstances for a loss of or injury to property or business, however
occurring, through or in connection with or incidental to failure to furnish any
such services, except as to any matters arising out of Landlord's negligence or
willful misconduct, or that of its employees, agents, contractors, or invitees.
Tenant shall not connect any apparatus with electric current except through
existing electrical outlets in the Premises.

     10. USE OF PREMISES.

         10.1. USE. The Premises shall be used and occupied by Tenant for only
the purpose specified in Paragraph 1.7 and for no other purposes whatsoever
without Landlord's consent which shall not be unreasonably withheld.

         10.2. SUITABILITY. This Lease shall be subject to all applicable zoning
ordinances and to all municipal, county and state laws and regulations governing
and regulating the use of the Premises. Tenant has not entered into this Lease
in reliance upon any representation or warranty of Landlord or any of its agents
or employees as to the suitability of the Premises for the conduct of Tenant's
business. Tenant has made its own analysis respecting the suitability of the
Premises for Tenant's intended use.

         10.3. USES PROHIBITED.

               10.3.1. RATE OF INSURANCE. Tenant shall not do or permit anything
to be done in or about the Premises which will cause the existing rate of
insurance upon the Premises to increase or cause the cancellation of any
insurance policy covering said Premises or any building of which the Premises
may be a part, nor shall Tenant sell or permit to be kept, used or sold in or
about such Premises any articles which may be prohibited by a standard form
policy of fire insurance. Tenant shall pay to Landlord as additional rent
hereunder the full amount of any increased premium resulting from Tenant's use
of the Premises.

               10.3.2. INTERFERENCE WITH OTHER TENANTS. Tenant shall not do or
permit anything to be done in or about the Premises which will in any way
materially obstruct or unreasonably interfere with the rights of other tenants
or occupants of the property or injure or

                                       11
<PAGE>


unreasonably annoy them, neither shall Tenant use or allow the Premises to be
used for any unlawful or objectionable purpose, nor shall Tenant cause, maintain
or permit any nuisance in or about the Premises. Tenant shall not commit or
suffer to be committed any illegal waste in or upon the Premises.

               10.3.3. APPLICABLE LAWS. Tenant shall not use the Premises or
permit anything to be done in or about the Premises which will in any way
violate or conflict with any law, statute, zoning restriction, ordinance,
governmental rule, regulation or requirement of duly constituted public
authorities whether now in force or which may hereafter be enacted or
promulgated. Tenant shall, at its sole cost and expense, properly comply with
all laws, statutes, ordinances and governmental rules, regulations or
requirements now in force or which may hereafter be in force and with the
requirements of any board of fire underwriters or other similar body now or
hereafter constituted relating to Tenant's use or occupancy of the Premises. The
judgment of any court of competent jurisdiction or the admission of Tenant in
any action against Tenant, whether Landlord be a party thereto or not, that
Tenant has violated any law, statute, ordinance or governmental rule, regulation
or requirement, shall be conclusive of that fact as between Landlord and Tenant.
Landlord warrants to Tenant that on the commencement of the term hereof, the
Premises and any improvements to be constructed by Landlord (a) shall be free
from material structural defects, (b) shall comply with all applicable covenants
and restrictions of records, statutes, ordinances, codes, rules, regulations,
orders, and requirements, including but not limited to the Americans with
Disabilities Act, and (c) the Building's elevators, doors, roof, plumbing,
electrical and HVAC systems are in good order and condition and operating
properly. In the event of a breach of the foregoing warranties, Landlord shall
promptly rectify such breach at its sole cost and expense.

(Landlord also shall protect, indemnify, defend, and hold harmless from and
against any and all liability, loss, suits, claims, actions, costs, and expense
(including, without limitation, reasonable attorney's fees) arising from any
breach of the foregoing warranties. The provisions of this paragraph shall
survive the termination of this Lease.)

               10.3.4. SIGNS. Without Landlord's consent which shall not be
unreasonably withheld, Tenant shall not place any sign upon the Premises or the
property. Landlord shall, to the extent allowed by applicable law and
regulations, as an expense of the property, install and maintain directory and
entry door signs identifying Tenant and Tenant's space. The directory signs
shall be constructed to Landlord's specifications and shall comply with
applicable regulations. Landlord agrees to install a monument sign at the Potter
Street entrance to the Property which will include Tenant's name and logo.

               10.3.5. AUCTIONS. Tenant shall not conduct or allow any auction
or similar sale upon the Premises.

     11. DEFAULTS AND REMEDIES.

         11.1. DEFAULT OF TENANT. The occurrence of any one or more of the
following events shall constitute a default and breach of this Lease by Tenant:
(a) Tenant's failure to pay any rent or charges required to be paid by Tenant
under this Lease, except as otherwise provided herein, where such failure
continues for five (5) business days after notice from Landlord; (b)

                                       12
<PAGE>

Tenant's abandonment of the demised Premises; (c) Tenant's failure to promptly
and fully perform any other covenant, condition or agreement contained in this
Lease where such failure continues for 30 days after written notice from
Landlord to Tenant of such default provided that if the nature of the default is
such that more than 30 days are reasonably required to cure such default, Tenant
shall not be deemed to be in default if within such 30 day period it commences
to cure and diligently prosecutes such cure to completion; (d) the levy of a
writ of attachment or execution on this Lease or on any of Tenant's property
located in the Premises; (e) the making by Tenant of a general assignment for
the benefit of its creditors or of an arrangement, composition, extension or
adjustment with its creditors, the filing by or against Tenant of a petition for
relief or other proceeding under the federal bankruptcy laws or state or other
insolvency laws, or the assumption by any court or administrative agency, or by
a receiver, trustee or custodian appointed by either, of jurisdiction, custody
or control of the Premises or of Tenant or any substantial part of its assets or
property; or (f) if the interest of Tenant under this Lease is held by a
partnership or by more than one person or entity, the occurrence of any act or
event described in part (e) above in respect of any partner of the partnership
or any person or entity holding an interest in Tenant of 25% or more. In the
event a nonmonetary default occurs which cannot reasonably be cured within the
time period specified above and Tenant commences corrective action within said
time period, Tenant shall not be subject to penalty under this Lease so long as
Tenant prosecutes such corrective action diligently and continuously to
completion.

         11.2. REMEDIES OF LANDLORD. In the event of Tenant's default hereunder,
then in addition to any other rights or remedies Landlord may have under this
Lease or under law, Landlord may elect either of the remedies set forth in
Paragraphs 11.2.1 and 11.2.2. Notwithstanding any other provision of this lease,
the Lessor has the remedy described in California Civil Code Section 1951.4
(lessor (Landlord) may continue lease in effect after lessee's (Tenant's) breach
and abandonment and recover rent as it becomes due, if lessee (Tenant) has the
right to sublet or assign, subject only to reasonable limitations). For purposes
of this Paragraph 11 (inclusive of all sub parts of said paragraph), the "worth
at the time of award" of the amounts referred to in parts 11.2.1(i) and
11.2.2(ii) shall be computed by allowing interest at the highest rate allowable
by law, and the "worth at time of award" of the amount referred to in part
11.2.1(iii) shall be computed by discounting such amount at the rate specified
in California Civil Code Section 1951.2(b) or any successor statute. In such
computations, the rent due hereunder shall include monthly rent plus the
aggregate amount of all other rentals, charges and other amounts payable by
Tenant hereunder.

               11.2.1. To immediately terminate this Lease and Tenant's right to
possession of the Premises by giving written notice to Tenant and to recover
from Tenant an award of damages equal to the sum of (i) the "worth at the time
of award" of the unpaid rental which had been earned at the time of termination,
(ii) the worth at the time of award of the amount by which the unpaid rental
which would have been earned after termination until the time of award exceeds
the amount of such rental loss that Tenant proves could have been reasonably
avoided, (iii) the "worth at the time of award" of the amount by which the
unpaid rental for the balance of the term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided, (iv)
any other amount necessary to compensate Landlord for all the detriment either
proximately caused by Tenant's failure to perform Tenant's obligations under
this Lease or which in the ordinary course of things would be likely to result

                                       13
<PAGE>

therefrom, and (v) all such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time under applicable law; or

               11.2.2. To have this Lease continue in effect up to its ending
under Paragraph 1.2 for so long as Landlord does not terminate this Lease and
Tenant's right to possession of the Premises, in which event Landlord shall have
the right to enforce all of the rights and remedies provided by this Lease and
by law, including the right to recover the rental and other charges payable by
Tenant under this Lease as they become due.

         11.3. DEFAULT BY LANDLORD. Landlord will be in default if Landlord
fails to perform any obligation required of Landlord within 30 days after
written notice by Tenant, specifying wherein Landlord has failed to perform such
obligation; provided that if the nature of Landlord's obligation is such that
more than 30 days are required for performance, then Landlord shall not be in
default if Landlord commences performance within such 30 day period and
thereafter diligently prosecutes the same to completion. Tenant agrees that any
judgment against Landlord resulting from any default or other claim arising
under this Lease shall be satisfied only out of the rents, issues, profits and
other income actually received on account of Landlord's right, title and
interest in the property, and no other real, personal or mixed property of
Landlord or any partner of Landlord, wherever situated, shall be subject to levy
to satisfy such judgment. Tenant shall not have any right whatsoever to
terminate this Lease or to withhold, reduce or offset any amount against any
payments of rents or charges due and payable under this Lease, except as
provided herein.

     12. EXPIRATION OR TERMINATION.

         12.1. SURRENDER OF POSSESSION. Tenant agrees to deliver up and
surrender to Landlord possession of the Premises and all improvements thereon,
subject to the terms of Paragraph 7.3 above, in as good order and condition as
when possession was taken by Tenant excepting only ordinary wear and tear and
damage due to casualty or condemnation. Upon termination of this Lease, Landlord
may reenter the Premises and remove all persons and property therefrom. If
Tenant fails to remove any effects that it is required or entitled to remove
from the Premises upon the termination of this Lease, for any cause whatsoever,
Landlord, at its option, may remove the same and store or dispose of them.
Tenant agrees to pay to Landlord on demand any and all expenses incurred in such
removal and in making the Premises free from all dirt, litter, debris and
obstruction, including all storage and insurance charges. If the Premises are
not surrendered at the end of the term, Tenant shall indemnify Landlord against
loss or liability of resulting from delay by Tenant in so surrendering the
Premises, including, without limitation, any claims made by any succeeding
lessee founded upon such delay.

         12.2. HOLDING OVER. If Tenant, with Landlord's consent, remains in
possession of the Premises after expiration of the term and if Landlord and
Tenant have not executed an express written agreement as to such holding over,
then such occupancy shall be a tenancy from month to month at a base monthly
rental equivalent to 110% of the monthly rental in effect immediately prior to
such expiration, such payment to be made as herein provided. In the event of
such holding over, all of the terms of this Lease including the obligation for
payment of all charges owing hereunder shall remain in force and effect on said
month to month basis.

                                       14
<PAGE>

         12.3. VOLUNTARY SURRENDER. The voluntary or other surrender of this
Lease by Tenant if accepted by Landlord, or a mutual cancellation thereof, shall
not work a merger, but shall, at the option of Landlord, terminate all or any
existing subleases or subtenancies, or operate as an assignment to Landlord of
any or all such subleases or subtenancies.

     13. CONDEMNATION OF PREMISES.

         13.1. TOTAL CONDEMNATION. If the entire Premises, whether by exercise
of governmental power or the sale or transfer by Landlord to any condemnor under
threat of condemnation or while proceedings for condemnation are pending, at any
time during the term, shall be taken by condemnation such that there does not
remain a portion suitable for occupation, this Lease shall then terminate as of
the date transfer of possession is required. Upon such condemnation, all rent
shall be paid up to the date transfer of possession is required, and Tenant
shall have no claim against Landlord for the value of the unexpired term of this
Lease.

         13.2. PARTIAL CONDEMNATION. If any portion of the Premises is taken by
condemnation during the term, whether by exercise of governmental power or the
sale or transfer by Landlord to any condemnor under threat of condemnation or
while proceedings for condemnation are pending, this Lease shall remain in full
force and effect; except that in the event a partial taking leaves the Premises
unsuitable for occupation, then Tenant shall have the right to terminate this
Lease effective upon the date transfer of possession is required unless Landlord
makes other comparable arrangements for Tenant's space. Landlord shall have the
right to terminate this Lease effective on the date transfer of possession is
required if more than 33% of the total square footage of the Premises allocated
to Tenant is taken by condemnation. Tenant and Landlord may elect to exercise
their respective rights to terminate this Lease pursuant to this paragraph by
serving written notice to the other within 30 calendar days of their receipt of
notice of condemnation, except that Tenant's notice shall be ineffective if
Landlord serves notice upon Tenant of Landlord's election to provide alternate
space equivalent to that condemned within ten calendar days of Tenant's delivery
of notice to Landlord pursuant to this paragraph. All rent and other obligations
of Tenant under this Lease shall be paid up to the date of termination, and
Tenant shall have no claim against Landlord for the value of any unexpired term
of this Lease. If this Lease shall not be canceled, the rent after such partial
taking shall be that percentage of the adjusted base rent provided for by this
Lease, equal to the percentage which the square footage of the untaken part of
the Premises immediately after the taking plus such replacement square footage
as Landlord may make available to Tenant bears to the square footage of the
entire Premises immediately before the taking. Any sums owing hereunder which
are calculated on the basis of Tenant's pro rata share (as set forth in
paragraph 1.4) shall also be adjusted to reflect any decrease in square footage
of the Premises due to the condemnation. If Tenant's continued use of the
Premises requires alterations and repairs by reason of a partial taking, all
such alterations and repairs shall be made by Tenant at Tenant's expense.

         13.3. AWARD TO TENANT. In the event of any condemnation, whether total
or partial, Tenant shall have the right to claim and recover from the condemning
authority such compensation as may be separately awarded or recoverable by
Tenant for loss of business, fixtures or equipment belonging to Tenant
immediately prior to the condemnation. The balance of any condemnation award
shall belong to Landlord, and Tenant shall have no further right to

                                       15
<PAGE>


recover from Landlord or the condemning authority for any additional claims
arising out of such taking.

         13.4. WAIVER OF PARTIAL TERMINATION RIGHTS. Tenant hereby waives the
provisions of California Code of Civil Procedure Section 1265.130.

     14. ENTRY BY LANDLORD. Tenant shall permit Landlord and its agents to enter
the Premises at all reasonable times for any of the following purposes: to
inspect the Premises; to maintain the property; to make such repairs to the
Premises as Landlord is obligated or may elect to make; to make repairs,
alterations or additions to any other portion of the property; to show the
Premises and post "To Lease" signs for the purposes of reletting during the last
120 days of the term or any optional extension term; to show the Premises as
part of a prospective sale by Landlord and/or to post notices of
nonresponsibility. Landlord shall have such right of entry without any rebate of
rent to Tenant for any loss of occupancy or quiet enjoyment of the Premises
thereby occasioned. Notwithstanding the foregoing, Landlord shall provide 24
hours advance notice to Tenant of such intended entry except in the event of
circumstances which Landlord deems to constitute an emergency. When entering or
performing any repair or other work on the Premises, Landlord, its agents,
employees and/or contractors (a) shall identify themselves to Tenant's personnel
immediately upon entering the Premises, and (b) shall not, in any way,
materially or unreasonably affect, interrupt or interfere with Tenant's use,
business or operations on the Premises or obstruct the visibility of or access
to the Premises.

     15. LIABILITY LIMITATION AND INDEMNIFICATION.
     The provisions of this section 15 supersede every other provision of
this Lease to the extent that they are inconsistent with such other provisions.

         15.1. LIMITATION OF LANDLORD'S LIABILITY. TENANT SHALL NOT HOLD
LANDLORD LIABLE FOR ANY AMOUNT IN EXCESS OF INSURANCE COVERAGE MAINTAINED BY
LANDLORD PURSUANT TO PARAGRAPH 6.3 OF THIS LEASE ("EXISTING COVERAGE") WITH
RESPECT TO ANY INJURY OR DAMAGE, EITHER PROXIMATE OR REMOTE, OCCURRING THROUGH
OR CAUSED BY ANY REPAIRS OR ALTERATIONS TO THE PROPERTY, UNLESS SUCH INJURY OR
DAMAGE ARISES FROM LANDLORD'S NEGLIGENCE, WILLFUL MISCONDUCT, RECKLESS DISREGARD
OF LANDLORD'S DUTIES OR BREACH OF THIS LEASE. LANDLORD SHALL NOT BE LIABLE IN
EXCESS OF EXISTING COVERAGE FOR ANY INJURY OR DAMAGE OCCASIONED BY DEFECTIVE
ELECTRIC WIRING, OR THE BREAKING, BURSTING, STOPPAGE OR LEAKING OF ANY PART OF
THE PLUMBING, AIR-CONDITIONING, HEATING, FIRE CONTROL SPRINKLER SYSTEMS OR GAS,
SEWER OR STEAM PIPES, UNLESS SUCH INJURY OR DAMAGE ARISES FROM LANDLORD'S
NEGLIGENCE, WILLFUL MISCONDUCT OR RECKLESS DISREGARD OF LANDLORD'S DUTIES OR
BREACH OF THIS LEASE.

         15.2. LIMITATION ON ENFORCEMENT OF JUDGMENTS. NOTWITHSTANDING ANY OTHER
PROVISION OF THIS LEASE, TENANT AND ITS AGENTS SHALL, UNDER ALL CIRCUMSTANCES,
BE ABSOLUTELY LIMITED TO LANDLORD'S ESTATE IN THE PROPERTY FOR SATISFACTION OF
TENANT AND ITS AGENTS' REMEDIES, AND/OR FOR THE COLLECTION OF A JUDGMENT, COURT
ORDER OR ARBITRATION AWARD REQUIRING THE PAYMENT OF MONEY BY LANDLORD AS THE
RESULT OF ANY AND ALL JUDGMENTS, ORDERS AND AWARDS RELATING TO OR ARISING OUT OF
TENANT AND ITS AGENTS' OCCUPANCY AND USE OF THE PROPERTY AND/OR IN THE EVENT OF
ANY DEFAULT BY LANDLORD HEREUNDER. NO OTHER PROPERTY OR ASSETS OF LANDLORD OR
ITS PARTNERS OR PRINCIPALS, DISCLOSED OR UNDISCLOSED, SHALL BE SUBJECT TO LEVY,
EXECUTION OR OTHER ENFORCEMENT PROCEDURE FOR THE SATISFACTION OF TENANT AND ITS

                                       16
<PAGE>

AGENTS' REMEDIES UNDER OR WITH RESPECT TO THIS LEASE, THE RELATIONSHIP OF
LANDLORD AND TENANT HEREUNDER, OR THE USE AND OCCUPANCY OF THE PROPERTY AND THE
PREMISES BY TENANT AND ITS AGENTS. TENANT, ON BEHALF OF ITSELF AND ITS AGENTS,
EXPRESSLY WAIVES ANY AND ALL RIGHT TO COLLECT OR ENFORCE ANY AND ALL ORDERS,
AWARDS AND/OR JUDGMENTS AGAINST LANDLORD IN EXCESS OF THE LIMITATIONS IMPOSED BY
THIS PARAGRAPH. TENANT SHALL REQUIRE THAT EACH SUBTENANT OF TENANT AND EACH
ASSIGNEE OF TENANT AGREE TO BE BOUND BY THE WAIVER SET FORTH IN THIS PARAGRAPH.
THE LANDLORD'S MAXIMUM EXPOSURE AS SET FORTH IN THIS PARAGRAPH IS CUMULATIVE (AS
TO JUDGMENTS, AWARDS AND ORDERS AGAINST LANDLORD IN CONNECTION WITH THIS LEASE,
THE RELATIONSHIP OF LANDLORD AND TENANT HEREUNDER, OR THE USE AND OCCUPANCY OF
THE PROPERTY BY TENANT AND ITS AGENTS). THE LIMITS IMPOSED BY THIS PARAGRAPH
ALSO APPLY TO ANY AND ALL DUTIES OF INDEMNITY (EXPRESS AND/OR IMPLIED) OWED BY
LANDLORD TO TENANT. AS USED IN THIS PARAGRAPH, REFERENCES TO "LANDLORD" INCLUDE
ALL PERSONS AND ENTITIES WHO NOW OR HEREAFTER OWN OR MAY OWN AN INTEREST IN
LANDLORD.

     16. ASSIGNMENT AND SUBLETTING.

         16.1. GENERALLY. Tenant shall not directly or indirectly assign this
Lease in whole or in part, or sublet the Premises or any part thereof, or
license the use of all or any portion of the Premises or business conducted
thereon, or encumber or hypothecate this Lease, without first obtaining
Landlord's written consent, which consent Landlord will not unreasonably
withhold. The sale or other transfer of shares of stock, partnership interests
or other ownership interests in Tenant resulting in a change in the effective
control of Tenant, or any merger, consolidation or other reorganization of
Tenant shall be regarded as an indirect assignment of Tenant's interest in this
Lease. Tenant's request for consent to any assignment, sublease or other
transfer shall be in writing and shall include the following: (a) the name and
legal composition of the proposed transferee; (b) the nature of the proposed
transferee's business to be carried on in the Premises; (c) the terms and
provisions of the proposed assignment or sublease; and (d) such financial and
other reasonable information as Landlord may request concerning the proposed
transferee or concerning the proposed assignment or sublease and any transaction
contemplated to occur in connection therewith. Any assignment, subletting,
licensing, encumbering or hypothecating of this Lease without Landlord's prior
written consent shall constitute a breach of this Lease entitling Landlord to
exercise all its rights and remedies herein provided. Landlord's consent to any
assignment or sublease shall not constitute a waiver of the necessity for such
consent to any subsequent assignment or sublease. The prohibition against
assignment and subletting contained in this paragraph shall be construed to
include a prohibition against assignment or subletting by operation of law.
Notwithstanding any assignment or subletting with Landlord's consent, unless
agreed to in writing, Tenant shall remain fully liable on this Lease and shall
not be released from its obligations hereunder. Without limiting other reasons
or circumstances, Landlord and Tenant agree that it is reasonable for Landlord
to withhold consent to an assignment or sublease, if (i) the financial strength
of the proposed assignee is not, in Landlord's reasonable judgment, commensurate
with the obligations of the Lease; (ii) the proposed assignee's use would, in
Landlord's reasonable judgment, be incompatible with the then current tenants,
or use of the rest of the property.

Notwithstanding anything in the above Paragraph 16.1, Tenant may, without
Landlord's prior written consent sublet the Premises or assign the Lease to (i)
a subsidiary, affiliate, division or corporation or entity controlling,
controlled by or under common control with Tenant; (ii) a

                                       17
<PAGE>

successor corporation or entity resulting from or related to Tenant by merger,
consolidation, nonbankruptcy reorganization, or government action; or (iii) a
purchaser of substantially all of Tenant's assets or stock located in the
Premises. A sale or transfer of Tenant's capital stock shall not be deemed an
assignment, subletting or any other transfer of the Lease or the Premises.

         16.2. TENANT'S PAYMENTS. In the event Landlord shall consent to a
sublease or assignment under this paragraph 16, Tenant shall pay Landlord's
reasonable attorney's fees incurred in connection with giving such consent.
Tenant shall also pay to Landlord an amount equal to 50% of all excess rent
received by Tenant directly or indirectly in respect of an assignment of this
Lease or sublease of the Premises. For this purpose, "excess rent" shall mean,
in the case of an assignment, all monies so received and, in the case of a
sublease, all monies so received in excess of the rents and charges reserved
under this Lease, provided however, that Tenant shall first be entitled to
deduct therefrom all reasonable costs associated with effecting the assignment
or sublease, including without limitation, brokerage fees, tenant improvements
and rent concessions. The assignee or sublessee shall, upon assuming the
obligations of Tenant under this Lease, become jointly and severally liable to
Landlord for the payment of Landlord's share of excess rent.

     17. DAMAGE OR DESTRUCTION.

         17.1. RIGHT TO TERMINATE ON DESTRUCTION OF PREMISES. Landlord and
Tenant shall each have the right to terminate this Lease if, during the term,
the Premises or the improvements on the property are damaged to an extent
exceeding 33% of the then reconstruction cost of the Premises as a whole, or
such improvements as a whole, as the case may be. Landlord or Tenant shall also
have the right to terminate this Lease if 33% of the Premises are damaged by an
uninsured peril. In either case, Landlord or Tenant may elect to terminate by
written notice delivered within 30 calendar days of the happening of such
damage. Such notice shall provide Tenant with a minimum of 60 days to vacate the
Premises unless they are unsafe for occupancy, in which case, Tenant shall
immediately vacate the Premises.

         17.2. REPAIRS BY LANDLORD. If Landlord shall not elect to terminate
this Lease pursuant to paragraph 17.1, Landlord shall immediately upon receipt
of insurance proceeds paid in connection with such casualty, but in no event
later than 180 calendar days after such damage has occurred, proceed to repair
or rebuild the Premises, on the same plan and design and of equal quality and
condition as existed immediately before such damage or destruction occurred,
subject to such delays as may be reasonably attributable to governmental
restrictions or failure to obtain materials or labor, or other causes beyond the
control of Landlord. Tenant shall be liable for the repair and replacement of
all fixtures, leasehold improvements installed hereafter, furnishings,
merchandise, equipment and personal property not covered by the property
insurance obtained pursuant to the provisions of this Lease.

         17.3. REDUCTION OF RENT AND OPERATING EXPENSES DURING REPAIRS. Except
with respect to damage caused in whole or in part by Tenant, its agents,
servants, employees, invitees and guests, in the event Tenant is able to
continue to conduct its business during the making of repairs, the rent then
prevailing will be equitably reduced in the proportion that the unusable part of
the Premises bears to the whole thereof for the period that repairs are being
made. No rent or Operating Expenses shall be payable while the Premises are
wholly unusable

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<PAGE>


due to casualty damage except for casualty damage caused in whole or in part by
Tenant, its employees, agents, servants, invitees and guests, in which event
Tenant shall remain liable for rental payments.

         17.4. WAIVER. Tenant hereby waives the provisions of Sections 1932,
subdivision 2, and 1933, subdivision 4, of the Civil Code of California.

     18. HAZARDOUS MATERIALS.

         18.1. TENANT'S WARRANTIES. Tenant hereby represents, warrants and
covenants that Tenant will comply with each of the following requirements:

               18.1.1. RESTRICTIONS ON BRINGING HAZARDOUS MATERIALS ONTO THE
PROPERTY. Except for normal quantities of office supplies and cleaning products
and those hazardous materials and quantities noted in the Tenant's Hazardous
Material Management Plan filed with the city of Berkeley, for which no prior
consent shall be required, during the term of this Lease, Tenant shall not cause
or permit any Hazardous Material (as defined below) to be brought upon, used,
kept or stored in, on, about or under the Property by Tenant, its agents,
representatives, employees, contractors, invitees or subtenants, without the
prior written consent of Landlord (which Landlord shall not unreasonably
withhold). Tenant's use of any Hazardous Materials shall comply with all
Environmental Health and Safety Requirements {as defined below} regulating such
Hazardous Material and with the highest standards prevailing in the Tenant's
industry for the use, keeping and storage of such Hazardous Material).

               18.1.2. COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS. If any
Hazardous Material is brought upon, used, kept or stored in, on, about or under
the Property by Tenant, its agents, representatives, employees, contractors,
invitees or subtenants, then Tenant shall bear all financial and other
responsibility for ensuring that such material shall be used, kept and stored in
a manner which complies with all Environmental, Health and Safety Requirements
regulating such Hazardous Material and with the highest standards prevailing in
the Tenant's industry for the use, keeping and storage of such Hazardous
Material. Without limiting any of the other obligations of Tenant set forth in
this Lease, Tenant shall, at its own cost and expense, procure, maintain in
effect and comply with all conditions and requirements of any and all permits,
licenses and other governmental and regulatory approvals or authorizations
required under any Environmental, Health or Safety Requirement in connection
with the use, keeping and storage of such Hazardous Material in, on, about or
under the Property. Tenant shall submit to Landlord copies of all such permits,
licenses, or other governmental or regulatory approvals or authorizations within
five business days of its receipt thereof.

               18.1.3. TENANT'S OBLIGATION TO EFFECT RESTORATION. If, as a
result of actions caused or permitted by Tenant (and/or Tenant's agents,
representatives, employees, contractors, invitees or subtenants), the presence
of any Hazardous Material in, on, about or under the Property or any adjoining
property, existing during the term of this Lease results in any contamination of
the Property or the surrounding environment, Tenant shall promptly take all
actions at its sole cost and expense as are necessary to return the Property
and/or the surrounding environment to the condition required by Environmental
Health and Safety requirements and governmental authorities ("Restoration");
provided, however, that Tenant shall not undertake any

                                       19
<PAGE>

Restoration without first providing Landlord with written notice thereof and
obtaining Landlord's approval therefor, which approval shall be granted or
denied in Landlord's sole and absolute discretion. Tenant shall carry out any
approved Restoration in a manner which complies with all Environmental, Health
and Safety Requirements. Further, Tenant shall not undertake any Restoration,
nor enter into any settlement agreement, consent decree or other compromise with
respect to any claims, relating to any Hazardous Material in any way connected
with the Property without first notifying Landlord of Tenant's intention to do
so and affording Landlord ample opportunity to appear, intervene or otherwise
appropriately assert and protect Landlord's interest with respect thereto.

               18.1.4. REMOVAL FROM PROPERTY. Upon the expiration or early
termination of the term of this Lease, Tenant shall cause to be removed from the
Property all Hazardous Materials existing in, on, about or under the Property
brought upon, used kept or stored by Tenant (and/or Tenant's agents,
representatives, employees, contractors, invitees or subtenants) as well as all
receptacles or containers therefor, and shall cause such Hazardous Materials and
such receptacles or containers to be stored, treated, transported and/or
disposed of in compliance with all applicable Environmental, Health and Safety
Requirements. Any Hazardous Materials, or receptacles or containers therefor,
which Tenant causes to be removed from the Property shall be removed solely by
duly licensed haulers and transported to and disposed of at duly licensed
facilities for the final disposal of such Hazardous Materials and receptacles or
containers therefor. Tenant shall deliver to Landlord copies of any and all
manifests and other documentation relating to the removal, storage, treatment,
transportation and/or disposal of any Hazardous Materials, or receptacles or
containers therefor, reflecting the legal and proper removal, storage,
treatment, transportation and/or disposal thereof. Tenant shall, at its sole
cost and expense, repair any damage to the Property resulting from Tenant's
removal of such Hazardous Materials and receptacles or containers therefor.
Tenant's obligation to pay rent shall continue until Tenant completes such
removal and effects such repairs.

               18.1.5. TENANT'S WRITTEN CONFIRMATION. Tenant shall, from time to
time throughout the term of this Lease, execute such affidavits, certificates or
other documents as may be reasonably requested by Landlord concerning Tenant's
best knowledge and belief regarding the presence of Hazardous Materials in, on,
about or under the Property.

               18.1.6. TENANT'S DUTY TO NOTIFY LANDLORD. Tenant shall notify
Landlord in writing immediately upon becoming aware of: (1) any enforcement,
cleanup, remediation or other action threatened, instituted or completed by any
governmental or regulatory agency or private person with respect to the Property
or any adjoining property relating to Hazardous Materials; (2) any claim
threatened or made by any person against Tenant, the Landlord, the Property or
any adjoining landowner, tenant or property for personal injury, compensation or
any other matter relating to Hazardous Materials; and (3) any reports made by or
to any governmental or regulatory agency with respect to the Property or any
adjoining property relating to Hazardous Materials, including without
limitation, any complaints, notices or asserted violations in connection
therewith. Further, Tenant shall also supply to Landlord as promptly as
possible, and in any event within five business days after Tenant first receives
or sends the same, copies of all claims, reports, complaints, notices, warnings,
asserted violations or other documents relating in any way to the foregoing.

                                       20
<PAGE>

         18.2. LANDLORD'S RIGHTS. Landlord and its agents and representatives
shall have the right to communicate, verbally or in writing, with any
governmental or regulatory agency or any environmental consultant on any matter
with respect to the Property relating to Hazardous Materials. Landlord shall be
entitled to copies of any and all notices, inspection reports or other documents
issued by or to any such governmental or regulatory agency or consultant with
respect to the Property relating to Hazardous Materials, excluding information
and data that is proprietary or business confidential to Tenant.

         18.3. TENANT'S DUTY TO INDEMNIFY. If the presence of Hazardous
Materials on the Property is caused by the Tenant, then Tenant shall indemnify,
defend and hold Landlord any partner or other affiliate of Landlord, and any
director, officer, shareholder, employee, agent, attorney or partner of any of
the foregoing, harmless from and against any and all claims, damages, penalties,
fines, costs, liabilities and losses (including, without limitation, diminution
in value of the Property, damages for the loss or restriction on use of rental
or useable space or of any other amenity of the Property, damages arising from
any adverse impact on marketing of space in the Property, other consequential
damages and sums paid in settlement of claims, attorneys' fees, consultants'
fees and experts' fees) which arise during or after the term of this Lease as a
result of such contamination. This indemnification of Landlord by Tenant
includes, without limitation, costs incurred in connection with removal or
restoration work required by any governmental or regulatory agency or pursuant
to any settlement agreement or judgement because of the presence of Hazardous
Materials in the soil or groundwater in, on, about or under the Property or any
adjoining property caused by Tenant and any and all legal fees and expenses
incurred by Landlord with respect to such claims, demands, investigation and
response.

Landlord shall defend, indemnify, and hold 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 property (including the underlying land and ground water) by any Hazardous
Materials, where such contamination was not caused by Tenant. The provisions of
this paragraph shall survive the termination or expiration of this Lease.

         18.4. LANDLORD'S RIGHT OF ENTRY. If contamination of the Property by
Hazardous Materials occurs or if any lender or governmental agency requires an
investigation to determine whether there has been any contamination of the
Property or any adjoining property, then Landlord and its agents and
representatives shall have the right, at any reasonable time and from time to
time during the term of this Lease, with reasonable notice to enter upon the
Property to perform monitoring, testing or other analyses (provided Landlord
shall promptly restore the Premises), and to review any and all applicable
documents, notices, correspondence or other materials. All costs and expenses
reasonably incurred by Landlord in connection therewith shall become due and
payable by Tenant if such investigation conclusively determines that Tenant has
caused such contamination.

         18.5. DEFINITIONS. As used herein, the following terms shall have the
following meanings:

               18.5.1. "HAZARDOUS MATERIAL": shall mean, without limitation, (1)
petroleum or petroleum products; (2) hydrocarbon substances of any kind (3)
asbestos in any form; (4) formaldehyde; (5) radioactive substances; (6)
industrial solvents; (7) flammables; (8)

                                       21
<PAGE>


explosives; (9) leakage from underground storage tanks; (10) substances defined
as "hazardous substances", "hazardous materials", or "toxic substances" in (A)
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Act of 1986 or
as otherwise amended, 42 U.S.C. Section 9601, ET SEQ., (B) Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 ET SEQ. and any amendments thereto,
or (C) the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, ET
SEQ. and any amendments thereto; (11) those substances defined as "hazardous
wastes", "extremely hazardous wastes" or "restricted hazardous wastes" in
Sections 25115, 25117, and 25122.7 or listed pursuant to Section 25140 of the
California Health & Safety Code and any amendments thereto; (12) those
substances defined as "hazardous substances" in Section 25316 of the California
Health & Safety Code and any amendments thereto; (13) those substances defined
as "hazardous materials", "hazardous wastes" or "hazardous substances" in
Sections 25501 and 25501.1 of the California Health & Safety Code and any
amendments thereto; (14) those substances defined as "hazardous substances"
under Section 25281 of the California Health & Safety Code and any amendments
thereto; (15) those substances causing "pollution" or "contamination" or
constituting "hazardous substances" within the meaning of (A) the Clean Water
Act, 33 U.S.C. 1251 ET SEQ. and any amendments thereto, (B) the Porter-Cologne
Water Quality Control Act, Section 13050 of the California Water Code and any
amendments thereto, and (C) the Safe Drinking Water Act, 42 U.S.C. Section 300f
ET SEQ.; (16) such chemicals as are identified on the list published from time
to time as provided in Chapter 6.6 of the California Health and Safety Code, as
amended, as causing cancer or reproductive toxicity; (17) polychlorinated
biphenyls (PCBs) set forth in the Federal Toxic Substance Control Act, as
amended, 15 U.S.C. Section 2601 ET SEQ.; (18) "toxic air contaminant" as defined
in California Health and Safety Code Section 39655; and (19) the wastes,
substances, materials, contaminants and pollutants identified pursuant to or set
forth in the regulations adopted or judicial or administrative orders, decisions
or decrees promulgated pursuant to any of the foregoing laws. The foregoing list
of definitions and statutes is intended to be illustrative and not exhaustive
and such list shall be deemed to include all definitions, rules, regulations and
laws applicable to the subject matter of this paragraph as such rules, laws,
regulations and definitions may be amended, modified, or changes from time to
time.

               18.5.2. "ENVIRONMENTAL HEALTH AND SAFETY REQUIREMENT" shall mean
any law, statute, ordinance, rule, regulation, order, judgment or decree
promulgated by any local, regional, state or federal governmental agency, court,
judicial or quasi-judicial body or legislative or quasi-legislative body which
relates to matters of the environment, health, industrial hygiene or safety.

         18.6. ALLOCATION OF RESPONSIBILITIES. ANY AND ALL LIABILITIES ARISING
FROM THE MANUFACTURING, GENERATION, HANDLING, USE STORAGE, TREATMENT,
TRANSPORTATION, DISPOSAL OR EXISTENCE OF HAZARDOUS MATERIALS IN, ON, UNDER OR
ABOUT THE PROPERTY OR ANY ADJOINING PROPERTY DURING THE TERM OF THIS LEASE BY
TENANT (INCLUSIVE OF ALL SUBTENANTS, ASSIGNEES, AGENTS, EMPLOYEES, INVITEES,
GUESTS, LICENSEES AND AFFILIATES OF TENANT), SHALL AT ALL TIMES REMAIN THE SOLE
RESPONSIBILITY OF TENANT AND TENANT SHALL RETAIN ANY AND ALL LIABILITIES ARISING
THEREFROM. NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS

                                       22
<PAGE>


SECTION 18, ANY ACT BY LANDLORD OR ITS AGENTS OR REPRESENTATIVES HEREUNDER SHALL
NOT CONSTITUTE AN ASSUMPTION BY LANDLORD OF ANY OBLIGATIONS, DUTIES,
RESPONSIBILITIES OR LIABILITIES PERTAINING TO TENANT'S COMPLIANCE WITH ANY
ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENT, WHICH TENANT SHALL RETAIN UNDER ALL
CIRCUMSTANCES AND SHALL INDEMNIFY, DEFEND AND HOLD LANDLORD HARMLESS AS PROVIDED
HEREIN. FURTHER, NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS
SECTION 18 EVEN THOUGH HAZARDOUS MATERIALS REMOVED, TRANSPORTED AND DISPOSED OF
BY TENANT MAY ORIGINATE FROM THE PROPERTY, TENANT SHALL REMAIN FULLY LIABLE FOR
THEIR REMOVAL, TRANSPORTATION AND DISPOSAL AND SHALL INDEMNIFY, DEFEND AND HOLD
LANDLORD HARMLESS WITH RESPECT TO SUCH HAZARDOUS MATERIALS AS PROVIDED HEREIN.

         18.7. INSPECTIONS. Tenant warrants that all governmental inspections of
the Property as required under the laws referenced above will be permitted.
Tenant shall provide to Landlord a copy of the reports for each such inspection
within 15 days of Tenant's receipt of such reports. Except in instances when
governmental report of such inspection has been made within the last 12 month
period, but no more frequently than every 12 months, at Landlord's request,
Tenant shall obtain and deliver to Landlord an inspection by a private
engineering firm, resulting in a written report specifying Tenant's compliance,
or enumerating the reasons for Tenant's lack of compliance with such laws and
regulations. If Tenant is in violation as demonstrated by the report tenant
shall pay for the cost of the inspection and report. If Tenant is not in
violation as demonstrated by the report, Landlord will pay for the cost of the
inspection and report. Landlord may, from time to time, waive the requirements
of an inspection by a private engineering firm if Tenant's use of the Property
is limited solely to offices and administrative uses.

         18.8. COOPERATION. Tenant shall comply with any reasonable procedures
or regulations promulgated by Landlord from time to time in connection with the
matters covered by such laws and regulations provided that such procedures and
regulations shall not unduly interfere with Tenant's business, and provided that
Landlord shall have no duty to establish any procedures or regulations or to
supervise in any way Tenant's activities on the Property.

         18.9. SURVIVAL. The covenants, agreements and indemnities of Landlord
and Tenant set forth in this Section 18 shall survive the expiration or earlier
termination of this Lease and shall not be affected by any investigation, or
information obtained as a result of any investigation, by or on behalf of
Landlord or any prospective Tenant.

         18.10. STORAGE TANKS. Tenant further covenants and agrees that it shall
not install any storage tank (that being one requiring any agency's permit),
whether above or below the ground) on the Property without obtaining the prior
written consent of the Landlord, which consent may be conditioned upon further
requirements imposed by Landlord with respect to, among other things, compliance
by Tenant with any applicable laws, rules, regulations or ordinances and safety
measures or financial responsibility requirements.

                                       23
<PAGE>

         18.11. LIMITATION ON TENANT'S LIABILITY FOR HAZARDOUS MATERIALS.
Notwithstanding anything as may exist to the contrary in this paragraph 18 or
elsewhere in this Lease, Tenant shall not be liable or otherwise responsible
for: (i) investigating, removing, remediating, cleaning up or otherwise
responding to any Hazardous Material or associated contamination (a) which was
present in, on, above, under or about the Premises, property or surrounding
environment prior to Tenant's occupancy of the Premises, or (b) which was not
brought onto the Premises, the property or surrounding environment by Tenant or
its agents, employees, representatives, contractors, invitees or subtenants; or
(ii) any claims, damages, penalties, fines, costs, liabilities, or losses
arising from any Hazardous Material or associated contamination (a) which was
present in, on, above, under or about the Premises, property or surrounding
environment prior to Tenant's occupancy of the Premises, or (b) which was not
brought onto the Premises, property or surrounding environment by Tenant or its
agents, employees, representatives, contractors, invitees or subtenants.

     19. MISCELLANEOUS PROVISIONS.

         19.1. WAIVER. No waiver of any breach of any covenants or conditions of
this Lease shall be construed to be a waiver of any other breach or to be a
consent to any further or succeeding breach of the same or other covenant or
condition. The acceptance of rent hereunder by Landlord after Tenant's breach
shall not be deemed to be a waiver of any preceding breach by Tenant of any
term, covenant or condition of this Lease, other than the failure of Tenant to
pay the particular rent so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such rent.

         19.2. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
provisions hereof shall be binding upon and shall inure to the benefit of the
heirs, personal representatives, successors and assigns of the parties.

         19.3. NOTICES. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and either
personally delivered, sent by commercial delivery service that provides
confirmation of delivery, or sent by certified mail, return receipt requested,
postage prepaid, properly addressed to the other party at the address set forth
next to its signature below, or at such other address or addresses as may, from
time to time, be designated in like manner by one party to the other. Any such
notice shall be deemed given when personally delivered or on the date indicated
on the post office's certified mail receipt of delivery.

         19.4. PARTIAL INVALIDITY. If, for any reason, any provision of this
Lease shall be determined to be invalid or inoperative, the validity and effect
of the other provisions of this Lease shall not be affected.

         19.5. NUMBER AND GENDER. All terms of this Lease shall be construed to
mean either the singular or the plural, masculine, feminine or neuter, as the
situation may demand.

         19.6. DESCRIPTIVE HEADINGS. The headings used herein and in any of the
documents annexed hereto as schedules, lists or exhibits are descriptive only
and for the

                                       24
<PAGE>

convenience of identifying provisions, and are not determinative of the meaning
or effect of any such provision.

         19.7. TIME. In all matters, time is of the essence in the performance
of all obligations under this Lease.

         19.8. ENTIRE AGREEMENT. This Lease and the documents annexed hereto as
schedules, lists or exhibits, constitute the entire agreement and understanding
between the parties with respect to the subject matters addressed by this Lease
and the said attachment, and supersede and replace any prior agreements and
understandings, whether oral or written, between and among them with respect to
the lease of the Premises, rental therefor, use thereof and all other such
matters. The provisions of this Lease may be waived, altered, amended or
repealed in whole or in part only upon the written consent of Landlord and
Tenant.

         19.9. MEMORANDUM OF LEASE. Landlord and Tenant mutually agree that they
will not file or record a copy of this Lease, but that in the event either party
requests a recording, Landlord and Tenant shall execute and acknowledge a
memorandum of this Lease in a form approved by the parties setting forth in said
memorandum the description of the Premises, the date of the Lease, the
commencement date and the date of termination. Said memorandum of lease may be
recorded in the recorder's office of the county in which the Premises are
located.

         19.10. APPLICABLE LAW. This Lease shall be construed and interpreted in
accordance with the laws of the State of California.

         19.11. AUTHORITY. Each individual executing this Lease on behalf of a
corporation represents and warrants that he is duly authorized to execute and
deliver this Lease on behalf of the corporation in accordance with a duly
adopted resolution of the Board of Directors of the corporation, and that this
Lease is binding upon said corporation in accordance with its terms. Each
individual executing this Lease on behalf of a partnership represents and
warrants that he is duly authorized to execute and deliver this Lease on behalf
of the partnership and that this Lease is binding upon said partnership in
accordance with its terms.

         19.12. LITIGATION EXPENSE. If any party shall bring an action or
arbitration proceeding against any other party hereto by reason of the breach of
any covenant, warranty, representation or condition hereof, or otherwise arising
out of this Lease or any schedule, list or exhibit hereto, whether for
declaratory or other relief, the prevailing party in such suit shall be entitled
to such party's costs of suit and attorneys' fees, which shall be payable
whether or not such action is prosecuted to judgment.

         19.13. SUBORDINATION OF LEASEHOLD. This Lease is and shall be at all
times, subject and subordinate to the lien of any mortgage or other encumbrances
which Landlord may create against the Property, including all renewals,
replacements and extensions. Tenant shall execute all written instruments which
may be required by Landlord to subordinate Tenant's rights to the lien of such
mortgage which obligation by Tenant is conditioned upon the holder of such lien
providing to Tenant a written subordination, non disturbance, and attornment
agreement, in a form reasonably acceptable to Tenant, providing, in essence,
that as long as Tenant is not in default under the provisions of this Lease
(after notice and the expiration of any

                                       25
<PAGE>

grace period provided for in the Lease), the lender will, in the event of a
foreclosure, recognize the interest of Tenant to remain in possession of the
Premises under the Lease for the duration of the unexpired Term (and any
extensions provided for in this Lease). Landlord shall use its best efforts to
have all lenders currently secured by the Property to provide Tenant with a non
disturbance agreement within 30 days of the date this Lease is executed by
Landlord and Tenant.

         19.14. TENANT'S CERTIFICATE. Within 15 days following Landlord's
request, Tenant shall complete, execute and deliver to Landlord a Tenant's
certificate or estoppel certificate, setting forth any information reasonably
requested by Landlord, including, but not limited to, (a) certification that
this Lease is unmodified and in full force and effect (or if modified, stating
the nature of such modification and certifying that this Lease as so modified is
in full force and effect) and the date to which the rental and other charges are
paid in advance, if any, (b) acknowledgment that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder, or specifying
such defaults, if any are claimed, and (c) setting forth the date of
commencement and expiration of the term. Tenant's failure to deliver such
certificate within said 15 days shall be deemed, for all purposes, to be an
acknowledgement that Landlord is not in default under the Lease, and that the
terms of the Lease have not been modified or supplemented in any way. It is
intended that such certificate may be relied upon by any prospective purchaser,
lender or assignee of any lender of the Premises.

         19.15. ATTORNMENT. In the event of any sale of the Premises or if
proceedings are brought for the foreclosure of, or in the event of exercise of
the power of sale under, any mortgage, installment land contract or deed of
trust made by Landlord covering the Premises, Tenant shall attorn to the
mortgage or the purchaser upon any such foreclosure or sale and recognize such
mortgagee or purchaser as Landlord under this Lease provided such party has
assumed in writing Landlord's obligations hereunder.

         19.16. LANDLORD'S ESTATE. Tenant shall look only to Landlord's estate
in the property of which the Premises are a part and the land on which it is
located for the satisfaction of Tenant's remedies, or for the collection of a
judgment (or other judicial process) requiring the payment of money by Landlord
in the event of any default by Landlord hereunder, and no other property or
assets of Landlord or its partners or principals, disclosed or undisclosed,
shall be subject to levy, execution or other enforcement procedure for the
satisfaction of Tenant's remedies under or with respect to this Lease, the
relationship of Landlord and Tenant hereunder, or Tenant's use or occupancy of
the Premises.

         19.17. COMPLIANCE WITH LENDER'S REQUESTS. Tenant agrees to consent to
reasonable amendments to this Lease from time to time as may be requested by any
current or future mortgagee or holder of other encumbrance which Landlord may
create against the Premises from time to time, provided that such amendments do
not materially affect Tenant's financial obligations or its occupancy and use
under this Lease or Landlord's obligations hereunder. Tenant agrees to timely
supply financial information as reasonably requested by Landlord for lender's
analysis of Tenant's financial condition as a condition of any encumbrance of
the property. Tenant shall not be obligated to deliver financial statements of
Tenant pursuant to Paragraph 19.17 more frequently than once every 12 months
during the term hereof.

         19.18. RESERVED.

                                       26
<PAGE>

         19.19. LANDLORD'S LIEN. Notwithstanding anything to the contrary,
Landlord waives any and all rights, title and interest Landlord now has, or
hereafter may have, whether statutory or otherwise, to Tenant's inventory,
equipment, furnishings, trade fixtures, books and records, and personal property
paid for by Tenant located at the Premises (singly and/or collectively, the
"Collateral"). Landlord acknowledges that Landlord has no lien, right, claim,
interest or title in or to the Collateral. Landlord further agrees that Tenant
shall have the right, at its discretion, to mortgage, pledge, hypothecate or
grant a security interest in the Collateral as security for its obligations
under any equipment lease or other financing arrangement related to the conduct
of Tenant's business at the Premises. Landlord further agrees to execute and
deliver within three (3) business days any UCC filing statement or other
documentation required to be executed by Landlord in connection with any such
lease or financing arrangement.

Notwithstanding the foregoing, all trade fixtures, signs, equipment, furniture,
or other personal property of whatever kind and nature kept or installed on the
Premises by Tenant shall not become the property of Landlord or a part of the
realty no matter how affixed to the Premises and may be removed by Tenant at any
time and from time to time during the entire term of this Lease. Upon request of
Tenant or its assignees or any subtenant, Landlord shall execute and deliver any
real estate consent or waiver forms submitted by any vendors, equipment lessors,
chattel mortgagees, or holders or owners of any trade fixtures, signs,
equipment, furniture, or other personal property of any kind and description
kept or installed on the Premises setting forth that Landlord waives, in favor
of the vendor, equipment lessor, chattel mortgagee, or any holder or owner, any
superior lien, claim, interest or other right therein. Landlord shall further
acknowledge that property covered by the consent or waiver forms is personal
property and is not to become a part of the realty no matter how affixed
thereto, and that such property may be removed from the Premises by the vendor,
equipment lessor, chattel mortgagee, owner, or holder at any time upon default
in the terms of such chattel mortgage or other similar documents, free and clear
of any claim or lien of Landlord. Tenant shall promptly repair any damage and
restore the portion of the Premises caused by the removal of such property,
whether effected by Tenant or Tenant's vendors, chattel mortgagees, or equipment
lessors.

         19.20. SUBMISSION OF LEASE. Submission of this instrument for
examination or signature by Tenant does not constitute a reservation of or an
option for lease, and it is not effective as a lease nor does it create any
obligation on Landlord's part until execution and delivery by both Landlord and
Tenant.

         19.21. ARBITRATION OF DISPUTES. IF ANY CONTROVERSY OR CLAIM BETWEEN THE
PARTIES HERETO ARISES OUT OF THIS AGREEMENT, SUCH CONTROVERSY OR CLAIM SHALL BE
SUBMITTED TO BINDING ARBITRATION. SUCH ARBITRATION SHALL BE CONDUCTED IN
ACCORDANCE WITH THE RULES OF THE AMERICAN ARBITRATION ASSOCIATION, AND JUDGMENT
UPON THE AWARD ENTERED BY THE ARBITRATOR(S) MAY BE ENTERED IN ANY COURT HAVING
JURISDICTION THEREOF. THE PROVISIONS OF CALIFORNIA CODE OF CIVIL PROCEDURE
SECTION 1283.05 SHALL APPLY TO SUCH ARBITRATION. PUNITIVE DAMAGES SHALL NOT BE
CLAIMED, CONSIDERED OR AWARDED.

                                       27
<PAGE>

         NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY
DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES"
PROVISIONS DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU
ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A
COURT OF JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR
JUDICIAL RIGHTS TO DISCOVERY AND APPEAL UNLESS THOSE RIGHTS ARE SPECIFICALLY
INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO
ARBITRATION AFTER AGREEING TO THIS PROVISION YOU MAY BE COMPELLED TO ARBITRATE
UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO
THIS ARBITRATION PROVISION IS VOLUNTARY.

WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING
OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION TO
NEUTRAL ARBITRATION.

               /S/ Fifth & Potter Street Associates, LLC                  /S/ MB
             -----------------------------------------------             -------
                                 Initial                                 Initial

         19.22. VENUE. Any action or arbitration brought to enforce or interpret
the provisions of this Agreement shall be venued in Alameda County, California.

         19.23. BROKERAGE. Tenant and Landlord represent that both sides have
been represented by CB Commercial, whose commission shall be paid by Landlord.

         19.24. PARKING. Tenant shall have nonexclusive rights to the use of
three (3) parking spaces per thousand useable square feet of Tenant's Premises
(defined as that portion of the Premises allocated to Tenant's exclusive use and
exclusive of any common area allocated to tenant), at no additional charge.

         19.25. USE OF AMENITIES. Tenant shall have the right to an undivided
use of, and access to, all common area amenities associated with the property on
the same basis as provided to all tenants of the property.

         19.26. DAYS. All references in this Lease to DAYS shall refer to
calendar days.

         19.27. STRUCTURAL AND ADA COMPLIANCE. As of the commencement date, the
construction to be performed by Landlord pursuant to paragraph 2.2 hereof and
all structural parts of the Premises and the property including, without
limitation, the foundation, roof, exterior walls, plumbing, electrical and other
mechanical systems (a) will meet and comply with all federal, state, and local
laws, ordinances and regulations and all handicapped accessibility standards,
including, without limitation, those promulgated under the Americans With
Disabilities Act, and (b) will be in good, workable and sanitary order,
condition, and repair.

         IN WITNESS WHEREOF, the parties have executed this Lease on the date
and year first above written.

                                       28
<PAGE>

         LANDLORD:                                               TENANT:

By:/s/ Fifth & Potter Street Associates,LLC       By:    /s/ M P Becket
   ----------------------------------------          ---------------------------
            Authorized Officer                         Authorized Officer - CFO

                                                        Michael P. Becket
   ----------------------------------------          ---------------------------
                                                        Print Name

ADDRESS FOR NOTICES:                                    ADDRESS FOR NOTICES:

1120 Nye Street, Suite 400                              10835 Altman Row #500
San Rafael, CA  94901                                   San Diego, CA  92121

Date                                                    Date             1/30/98
    ---------------------------------------                  -------------------



                                       29
<PAGE>




                                ADDENDUM TO LEASE
                             DATED JANUARY 30, 1998
                                     BETWEEN
                      FIFTH & POTTER STREET ASSOCIATES LLC
                                       AND
                        DYNAVAX TECHNOLOGIES CORPORATION
                             FOR PREMISES LOCATED AT
                     717 POTTER STREET, BERKELEY, CALIFORNIA

          This Addendum to lease is attached to and forms a part of that certain
Triple Net Laboratory Lease dated January 30, 1998 ("Lease"), by and between
Fifth & Potter Street Associates LLC ("Landlord") and Dynavax Technologies
Corporation ("Tenant") for premises on the first floor of the building located
at 717 Potter 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.

Section 1.  OPTION TO TERM

         (a) Landlord hereby grants Tenant an option (the "Extension Option") to
extend the term of the Lease for one additional period of five (5) years,
commencing immediately after the expiration of the initial term, upon the same
terms and conditions contained in the Lease, except that (i) the base monthly
rent for the Premises shall be equal to ninety-five percent (95%) of the fair
market rent for the Premises determined in the manner set forth in subparagraph
(b) below, (ii) Tenant shall accept the Premises in an "as is" condition without
any obligation of landlord to repaint, remodel, repair, improve or alter the
Premises, and (iii) there shall be no further options to extend the term of the
Lease. The Extension Option shall be exercised, if at all, by notice from Tenant
to Landlord in writing given no less than twelve (12) months prior to expiration
for the initial term of the Lease. If Tenant properly exercises the Extension
Option, references in the Lease to the term shall be deemed to include the
option term unless the context clearly provides otherwise. Notwithstanding
anything to the contrary contained herein, if Tenant is in default under any of
the material terms, covenants or conditions of the lease, at the time Tenant
exercises the Extension Option, Landlord shall have, in addition to all of
Landlord's other rights and remedies provided in the Lease, the right to
terminate the Extension Option upon notice to Tenant, in which event the
expiration date of the Lease shall be and remain the expiration date of the
initial term.

         (b) If Tenant properly exercises the Extension Option, the base monthly
rent during the option term shall be determined in the following manner. The
base monthly rent shall be increased to an amount equal to ninety-give percent
(95%) of the fair market rent for the Premises as of the commencement of the
option term for a term equal to the option term, as specified by Landlord by
notice to Tenant not less than ninety (90) days prior to commencement of the
option term, subject to Tenant's right of arbitration as set forth below. If
Tenant believes that the fair market rent specified by Landlord exceeds the
actual fair market rent for the Premises as of commencement of the option term,
then Tenant shall so notify Landlord within thirty (30) days following receipt
of Landlord's notice. If Tenant fails to so notify Landlord

<PAGE>

within said thirty (30) day period, Landlord's determination of the fair market
rent for the premises shall be final and binding upon the parties. If the
parties are unable to agree upon the fair market rent for the premises within
thirty (30) days after Landlord's receipt of notice of Tenant's objection, the
amount of base monthly rent as of commencement of the option term shall be
determined as follows:

                  (1) Within thirty (30) days after receipt of the Landlord's
notice specifying fair market rent, Tenant, at its sole expense, shall obtain
and deliver in writing to Landlord a determination of the fair market basic rent
for the Premises for a term equal to the option term from a broker ("Tenant's
broker") licensed in the State of California and currently active in the market
for research laboratory space in the Berkeley/Emeryville area. If Landlord
accepts such determination, the base monthly rent for the option term shall be
increased to an amount equal to ninety-five percent (95%) of the amount
determined by Tenant's broker.

                  (2) If Landlord does not accept such determination, within ten
(10) days after receipt of the determination of Tenant's broker, Landlord shall
designate a broker ("Landlord's broker") licensed in the State of California and
currently active in the market for research laboratory space in the
Berkeley/Emeryville area. Landlord's broker and Tenant's broker shall name a
third broker, similarly qualified, within five (5) days after the appointment of
Landlord's broker. Each of said three brokers shall determine the fair market
rent for the Premises as of the commencement of the option term for a term equal
to the option term within twenty (20) days after the appointment of the third
broker. The base rent payable by Tenant effective as of the commencement of the
option term shall be increased to an amount equal to ninety-five percent of the
arithmetic average of such three determinations; provided, however, that if any
such broker's determination deviates more than 10% from the median of such
determinations, the base monthly rent payable shall be an amount equal to
ninety-five percent (95%) of the average of the two closest determinations.

                  (3) Landlord shall pay the costs and fees of Landlord's broker
in connection with any determination hereunder, and Tenant shall pay the costs
and fees of Tenant's broker in connection with such determination. The costs and
fees of any third broker shall be paid one-half by landlord and one-half by
Tenant.

         (c) If the amount of the fair market rent is not known as of the
commencement of the option term, then Tenant shall continue to pay the base
monthly rent in effect at the expiration of the initial term until the amount of
the fair market basic rent is determined. When such determination is made,
Tenant shall pay any deficiency to Landlord upon demand.

Section 2.  OPTION TO EXPAND

         (a) Subject to Tenant's payment of the Expansion Space Holding Cost as
provided for hereinbelow, Landlord hereby grants to Tenant an option (the
"Expansion Option") to lease the expansion area containing approximately 3,036
rentable square feet (which includes the adjustment provided for in Paragraph
2.1 of the Lease) as shown on Exhibit A to the Lease (the "Expansion Space").
The expansion Option shall be exercised, if at all, by notice from Tenant to
Landlord in writing within six (6) months of the commencement date of the term
of the Lease; provided, however, that if Tenant is in default under any of the
material terms, conditions or

<PAGE>

covenants of the Lease, either at the time Tenant exercises, the Expansion
Option or when Landlord delivers the Expansion Space, Landlord shall have, in
addition to the rights and remedies provided in the Lease, the right to
terminate the Expansion Option.

         (b) If Tenant elects to exercise the Expansion Option, Landlord shall
provide Tenant with an improvement allowance equal to $70.00 per useable square
foot of space in the Expansion Space, and the Expansion Space shall be built out
by landlord in accordance with the terms of Exhibit B to the Lease (with
appropriate changes to reflect build-out of the Expansion Space, as opposed to
the initial Premises). Landlord shall deliver possession of the Expansion Space
to Tenant for occupancy upon completion of the build-out of the Expansion Space;
but in no event later than 2 Months from Tenant's exercise of the Expansion
Option and, upon such delivery, the Expansion Space shall be deemed to be a part
of the Premises and shall be leased upon and subject to all of the terms,
covenants and conditions of, and at the base monthly rental rate provided for
in, the Lease; and the square footage of the Premises (which includes the
adjustment provided for in Paragraph 2.1 of the Lease) and Tenant's Pro Rata
Share shall be appropriately adjusted.

         (c) Landlord's grant of the Expansion Option is subject to and
conditioned upon Tenant's payment to Landlord of a monthly amount to hold the
Expansion Space off the market, said monthly amount being equal to $.83 per
rentable square foot of the Expansion Space (which includes the adjustment
provided for in Paragraph 2.1 of the Lease) plus Tenant's Pro Rata Share
attributable to the Expansion Space (collectively, the "Expansion Space Holding
Costs"), for the period from the commencement date of the Lease to the date
Tenant exercises its option for the Expansion Space or the date Tenant notifies
Landlord that Tenant elects to terminate the Expansion Option. Expansion Space
Holding Costs shall be payable monthly, in advance, in accordance with the terms
of, and as additional rent owing under, the Lease.

Section 3.  TEMPORARY OFFICE SPACE

          From February 1, 1998, through the commencement date of the Lease (the
"Pre-Occupancy Period"), Landlord (or an affiliate of Landlord) shall provide
Tenant with approximately 300 square feet of space on the first floor of the
building located at 800 Heinz Street, Berkeley, California, for use by three (3)
employees of Tenant (the "Temporary Space"). Tenant shall take the Temporary
Space on an "As-Is" basis. Monthly rent for the Temporary Space shall be $275
per month fully serviced from lease execution through occupancy of the finished
spaces, payable on the first day of each month during the Pre-Occupancy Period.
Tenant's occupancy of the Temporary Space shall be on all of the terms and
conditions as specified in the Lease for Tenant's Occupancy of the Premises; and
prior to Tenant's occupancy of the Temporary Space, Tenant shall deliver to
Landlord certificates of Tenant's liability insurance coverage for the Temporary
space showing Landlord (and the owner of the building, if other than Landlord)
as an additional insured thereunder.

Section 4.  ACCOMMODATION OF TENANT'S ADDITIONAL SPACE REQUIREMENT

          In the event that Tenant exercises the Expansion Option and occupies
the Expansion Space as provided in Section 2 above, Tenant shall thereafter have
the following additional expansion right:

<PAGE>

         (a) On or before the second anniversary of the commencement date of the
Lease, Tenant may notify Landlord in writing (the "Additional Expansion Notice")
that Tenant desires to lease additional space for its business operations.
Tenant shall specify in said Additional Expansion Notice the amount of
additional space that Tenant needs (the "Additional Space Requirement");
provided, however, that Tenant must specify an Additional Space Requirement of
not less than 5,000 square feet.

         (b) If Tenant delivers the Additional Expansion Notice to Landlord,
during the six (6) month period from the 25th month to the 30th month of the
term of the Lease, Landlord shall attempt to make available to Tenant sufficient
space to satisfy the Additional Space Requirement either within the Building or
within another generally comparable building in the Emeryville/Berkeley area
that is owned or operated by Wareham Property Group, Inc. or an affiliate
thereof (collectively, "Wareham").

         (c) If the Additional Space Requirement can be satisfied within said
six (6) month period, Landlord or Wareham, as the case may be, shall offer such
space for lease to Tenant on such terms and conditions as are then currently
being quoted by Landlord or Wareham for such space, including, without
limitation, rental rates, term and tenant improvement allowance. Tenant shall
accept or reject any such offer within five (5) business days after receipt
thereof.

         (d) If such an offer for the Additional Space Requirement is made to
Tenant within said six (6) month period and Tenant does not accept such offer,
Tenant's rights under this Section 4 shall terminate, Tenant shall have no
further right with respect to the Additional Space Requirement, and the Lease
shall remain in full force and effect.

         (e) If such an offer for the Additional Space Requirement is not made
to Tenant within said six (6) month period, Tenant shall have the right to
terminate this Lease upon the following conditions:

                  (i) Tenant must notify Landlord of such termination within
ninety (90) days after the expiration of such six (6) month period.

                  (ii) In the event Tenant so notifies Landlord of such
termination, the Lease shall terminate within ninety (90) days after Landlord's
receipt of such notice.

                  (iii) In the event Tenant fails to so notify Landlord of such
termination, Tenant's right to terminate the Lease shall expire and the Lease
shall remain in full force and effect.

         (f) Notwithstanding anything set forth hereinabove, if Tenant is in
default of any of the material terms, conditions or covenants of the Lease at
the time Tenant delivers the Additional Expansion Notice, Landlord shall have,
in addition to the rights and remedies provided in the Lease, the right to
terminate all of Tenants rights under this Section 4 with respect to the
Additional Space Requirement, including, without limitation, any right to
terminate the lease pursuant to subparagraph (e) above.

<PAGE>

          IN WITNESS WHEREOF, Landlord and Tenant have executed this Addendum to
Lease as of the date set forth above.

TENANT:                              LANDLORD:

Dynavax Technologies Corporation,    Fifth & Potter Street Associates LLC,
a California corporation             a California Limited Liability Company

By:   /s/ M P Becket                 By:/s/ Fifth & Potter Street Associates,LLC
   ------------------------------    -------------------------------------------

Its:   CFO                                              Its:
   ------------------------------    -------------------------------------------

<PAGE>





                                    EXHIBIT A


<PAGE>




                                    EXHIBIT B

                                   Work Letter
                         Initial Improvement of Premises

1.       TENANT IMPROVEMENTS

         Prior to the Commencement Date, at its sole cost and expense, Landlord,
through its General Contractor, shall furnish and install within the Premises
those items of general construction (the "Tenant Improvements") shown on the
plans and specifications finally approved by Landlord and Tenant in writing
pursuant to Paragraph 5 below. Such construction shall be performed in a good
and workmanlike manner and in compliance with all applicable codes and
regulations ("Code Requirements").

2.       COST OF THE IMPROVEMENTS

         (a) Based upon a Tenant Improvement build out that is approximately 50%
OFFICE and 50% LABORATORY, and substantially the same in function and finish as
the Bayer Laboratories build-out on the second floor of the Building, Landlord
will construct the Tenant Improvements on a turnkey basis.

         (b) If there is a material change to the functions or finish of the
Tenant Improvements to be constructed in the Premises from that described in
subparagraph (a), based upon the Final Plans and Specifications approved by
Tenant, or if Tenant requests any changes after approval of the Final Plans and
Specifications, the cost thereof shall be the responsibility of Tenant to the
extent the cost exceeds the cost of the initial plans and specs.

3.       PLANS AND SPECIFICATIONS

         (a) Landlord, at its cost, through its architects, shall furnish all
architectural and engineering plans and specifications (the "Plans and
Specifications") required for the construction of the Tenant Improvements.
Tenant shall provide instruction to Landlord's architects sufficient to enable
Landlord's architects to complete Plans and Specifications in accordance with
Paragraph 5 below. All Plans and Specifications are subject to Landlord's
approval, which Landlord agrees shall not be unreasonably withheld. Tenant
reserves the right to review and approve final plans.

         (b) Any architectural or engineering services for Tenant's Work
referred to in Paragraph 4 below or interior design services in excess of
Building standards, such as selection for colors, furnishings or floor coverings
shall be at Tenant's sole cost.

4.       TENANT'S WORK

         Any items or work not shown in the Final Plans and Specifications
approved as provided in Paragraph 5, including, for example, telephone or
telecommunications service or furnishings, for which Tenant contracts separately
(hereinafter) "Tenant Work"), shall be subject to Landlord's reasonable policies
and schedules and shall be conducted in such a way as not to hinder, cause any
disharmony with or unreasonable or substantial delay work of improvement in

<PAGE>

the Building. Tenant's major suppliers, contractors, workmen and mechanics shall
be subject to approval by Landlord not to be unreasonably withheld prior to the
commencement of their work and shall be subject to Landlord's administrative
control while performing their work. Tenant shall cause its suppliers and
contractors to engage only labor that is harmonious and compatible with other
labor working in the Building. In the event of any labor disturbance caused by
persons employed by Tenant or Tenant's contractor, Tenant shall immediately take
all actions necessary to eliminate such disturbance. At any time any supplier,
contractor, workmen or mechanic performing Tenant's work hinders or delays any
other work of improvement in the Building or performs any work which may or does
substantially impair the quality, integrity or performance or any portion of the
Building, Tenant shall cause such supplier, contractor, workman or mechanic to
leave the Building and remove all his tools, equipment and materials immediately
upon written notice delivered to Tenant and Tenant shall reimburse Landlord for
any repairs or corrections of the Tenant Improvements or Tenant's work or of any
portion of the Building caused by or resulting from the work of any supplier,
contractor, workman or mechanic with whom Tenant contracts.

5.       APPROVAL OF PLANS AND SPECIFICATIONS

         Landlord's architect, in consultation with Tenant, shall prepare a
space plan for the build-out of the Premises consistent with the standard of
improvement described in Paragraph 2 (a) above. Such space plan must be
finalized and approved by Landlord and Tenant no later than January 30, 1998.
Tenant will have at least five (5) business days to approve plans and any
subsequent revision. Thereafter, Landlord's architect will prepare working
drawings for the Tenant Improvements based upon the approved space plan, and the
same shall be submitted to Tenant. Tenant shall approve such Plans and
Specifications within five (5) business days of receipt or designate by written
notice to Landlord the specific changes required to be made to the Plans and
Specifications, which changes, if approved by Landlord, shall be made by
Landlord as soon as REASONABLY POSSIBLE. This procedure shall be repeated until
the Plans and Specifications are finally approved by Tenant (the "Final Plans
and Specifications");

6.       COMPLETION AND COMMENCEMENT DATE

         The term of the Lease and Tenant's obligation for the payment of rent
under the Lease shall commence in accordance with Paragraph 1.1 of the Lease.
The parties acknowledge and agree that the anticipated commencement date is
March 30, 1998. If Landlord shall be delayed in substantially completing the
Tenant Improvements as a result of:

          (a) Tenant's failure to timely furnish complete instructions or
approvals in accordance with the procedures set forth in Paragraph 5, or

          (b) Tenant's changes to Final Plans and Specifications after final
approval thereof, or

          (c) Tenant's request for materials, finishes, or installations other
than as described in Paragraph 2(a) above, or

          (d) Hindrance or disruption of work of Landlord's contractor resulting
from Tenant's Work.

<PAGE>

then the commencement date of the Lease and Tenant's obligation for the payment
of rent shall be advanced by the number of days of such delay offset by the
number of days attributable to Landlord Delays.

7.       PAYMENT

         Tenant shall pay to landlord as additional rent all amounts due under
the terms of this Exhibit B within twenty (20) days following delivery of
Landlord's invoice, therefore, which invoices shall be rendered monthly or at
such other intervals as Landlord shall determine.

8.       TENANT'S REPRESENTATIVE

         Mike Becket shall act as Tenant's representative in all matters to be
covered by this Work Letter. Such representative shall act on behalf of Tenant
in connection with the issuance of any approvals or disapprovals to be made or
given by Tenant under the terms of this Work Letter and the making of any other
communications required or permitted under the terms of this Work Letter.
Landlord shall be entitled to rely upon any approval or disapproval issued, or
other communication made, by Tenant's representative.


<PAGE>

                       FIRST AMENDMENT TO LEASE AGREEMENT

This agreement, dated July 1, 1999, refers to a Fifth and Potter Street
Associates, LLC lease made and entered into on January 30, 1998, between Fifth
and Potter Street Associates, LLC (Lessor) and Dynavax Technologies Corporation
(Tenant) for the premises at 717 Potter Street, Berkeley, California, and
modifies the terms and conditions of such Lease as follows:

         Addition to Paragraph 4.4. Additional Rent -

         If Tenant exercises the Expansion Option referred to in the Addendum to
         this Lease, the Tenant's obligation to pay Operating Expense will
         increase by 10 cents per rentable square foot per month. This increase
         will be effective on the date that the Expansion Space is substantially
         complete.

All other terms and conditions of the existing Fifth and Potter Street
Associates, LLC Lease referred to herein shall remain in full force and effect
except as specifically modified herein.

A fully executed copy of this First Amendment to Lease Agreement shall be
attached to the original Fifth and Potter Street Associates, LLC Lease dated
January 30, 1998.

   FIFTH AND POTTER STREET                             DYNAVAX TECHNOLOGIES
       ASSOCIATES, LLC                                     CORPORATION

By:/s/Fifth And Potter Street Associates, LLC   By: /S/         Dino Dina
   ------------------------------------------       ----------------------------
                                                            Dino Dina, M.D.
                                                            President & CEO

Date:              7/7/99                       Date:         JULY 6, 1999
     ----------------------------------------        ---------------------------