<PAGE>

                                                                   EXHIBIT 10.16

                              CONSENT TO SUBLEASE

This Consent to Sublease (this "CONSENT") is made as of May 17, 2001, by
ARETECHNOLOGY CENTER SSF, LLC, a Delaware limited liability company, having an
address of 135 North Los Robles Avenue, Suite 250, Pasadena, California 91101
("LANDLORD"), VIROLOGIC, INC., a Delaware corporation, having an address of 270
East Grand Avenue, South San Francisco, California 94080 ("TENANT"), and
DIADEXUS, INC., a Delaware corporation, having an address of the Premises
(defined below) ("SUBLESSEE") with reference to the following Recitals.

                                    RECITALS

     A.   Trammell Crow Northern California Development, Inc., Landlord's
predecessor-in-interest, and Tenant entered into that certain Lease dated as of
November 23, 1999 (the "ORIGINAL LEASE"), as amended by that certain First
Amendment to Lease Agreement dated as of February __, 2000 (the "FIRST
AMENDMENT"), by and between Tenant and Landlord, with respect to certain
premises described in the Original Lease as being located at 335 Oyster Point
Boulevard, South San Francisco, California (the "PREMISES"), and more
particularly described in the Original Lease. Notwithstanding the description
in the Original Lease of the street address of the Premises as being 335 Oyster
Point Boulevard, South San Francisco, California, the actual street address of
the Premises is 343 Oyster Point Boulevard, South San Francisco, California. As
used herein, "LEASE" shall mean the Original Lease, as amended by the First
Amendment.

     B.   Tenant desires to sublease to Sublessee a portion of the Premises
consisting of approximately 40,350 rentable square feet (the "SUBLEASED
PREMISES") more particularly described in and pursuant to the provisions of that
certain Sublease dated May 17, 2001 (the "SUBLEASE"), a copy of which is
attached hereto as Exhibit A.

     C.   Tenant desires to obtain Landlord's consent to the Sublease.

     NOW, THEREFORE, in consideration of the foregoing and the agreements
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Landlord hereby consents to
the sublease of the Subleased Premises to Sublessee, such consent being subject
to and upon the following terms and conditions to which Tenant and Sublessee
hereby agree:

     1.   All initially capitalized terms not otherwise defined in this Consent
shall have the meanings set forth in the Lease unless the context clearly
indicates otherwise.

     2.   This Consent shall not be effective and the Sublease shall not be
valid unless and until Landlord shall have received: (a) a fully executed
original copy of the Sublease, (b) a fully executed original counterpart of
this Consent, and (c) reimbursement from Tenant in the amount


                                       1
<PAGE>
of $2,500 to be applied towards Landlord's costs and expenses in preparing and
negotiating this Consent and the documents described herein.

     3.   Landlord's consent set forth herein is subject to the following
additional conditions:

          (a)  All proposed alterations, additions or improvements to be made
     in connection with Sublessee's occupancy of the Subleased Premises shall
     be deemed to be part of Tenant's Work and shall be subject to the
     provisions set forth in Exhibit B-1 regarding Tenant's Work;

          (b)  During the term of the sublease of the Subleased Premises to
     Sublessee, in addition to all other payments which Tenant is required to
     make to Landlord, Tenant shall pay to Landlord in advance, without demand,
     abatement, deduction or set-off, monthly installments in the amount of
     $16,140 ("SUBLEASE RENT") on or before the first day of each calendar
     month, which amount, subject to Sections 3(c) and (d) below, shall be in
     full satisfaction for this Sublease only of any sums owing from Tenant to
     Landlord pursuant to Paragraph 21.B of the Lease. Payments of Sublease
     Rent for any fractional calendar month shall be prorated; and

          (c)  If, in accordance with the terms and conditions of the Lease,
     Landlord consents to any subletting of the Subleased Premises by
     Sublessee to a third party and the rent due and payable by such third
     party (or a combination of the rental payable under such sublease plus any
     bonus or other consideration therefor or incident thereto) exceeds the sum
     of $4.72 per square foot per month for the portion of the Subleased
     Premises being subject to such third party and the actual and reasonable
     brokerage fees, legal costs and any design or construction fees directly
     related to and required pursuant to the terms of any such sublease
     (collectively, the "SUBLETTING COSTS"), then Sublessee shall be bound and
     obligated to pay Landlord as additional rent, within 10 days following
     receipt thereof by Sublessee, 40% of (i) such monthly rent per square foot
     in excess of (A) $4.72 plus (B) the Subletting Costs divided by the
     product of (x) the square footage so subleased and (y) the term of such
     sublease expressed in months, and (ii) such other consideration not paid
     on a square footage basis.

          (d)  If Tenant subleases any additional space at the Premises to
     Sublessee during the term of the Sublease, (i) such additional space shall
     be considered part of the Subleased Premises, (ii) the Sublease Rent shall
     be increased by 40 cents ($0.40) per rentable square foot per month for
     the additional space being subleased to Sublessee, and (iii) the
     provisions set forth in Section 3(c) above for the payment of additional
     rent to Landlord by Sublessee shall also apply to any approved subletting
     of such additional space by Sublessee.

     4.   Landlord neither approves nor disapproves the terms, conditions and
agreements contained in the Sublease, all of which shall be subordinate and at
all times subject to: (a) all of the covenants, agreements, terms, provisions
and conditions contained in the Lease, (b) superior


                                       2



<PAGE>
ground leases, mortgages, deeds of trust, or any other hypothecation or security
now existing or hereafter placed upon the real property of which the Premises
are a part and to any and all advances secured thereby and to all renewals,
modifications, consolidations, replacements and extensions thereof, and (c) all
matters of record affecting the Premises and all laws, ordinances and
regulations now or hereafter affecting the Premises.

     5.   Nothing contained herein or in the Sublease shall be construed to:

          (a)  modify, waive, impair, or affect any of the terms, covenants or
     conditions contained in the Lease (including Tenant's obligations to obtain
     any required consents for any other or future sublettings), or to waive any
     breach thereof, or any rights or remedies of Landlord under the Lease
     against any person, firm, association or corporation liable for the
     performance thereof, or to enlarge or increase Landlord's obligations or
     liabilities under the Lease (including, without limitation, any liability
     to Sublessee for any portion of the security deposit held by Tenant under
     the Sublease), and all terms, covenants and conditions of the Lease are
     hereby declared by each of Landlord and Tenant to be in full force and
     effect; or

          (b)  except as set forth herein in Section 8, require Landlord to
     accept any payments from Sublessee on behalf of Tenant.

Tenant shall remain liable and responsible for the due keeping, performance and
observance of all the terms, covenants and conditions set forth in the Lease on
the part of the Tenant to be kept, performed and observed and for the payment of
the annual rent, additional rent, Sublease Rent and all other sums now and
hereafter becoming payable thereunder for all of the Premises, including,
without limitation, the Subleased Premises.

     6.   Notwithstanding anything in the Sublease to the contrary:

          (a)  Sublessee does hereby expressly assume and agree to be bound by
     and to perform and comply with, for the benefit of Landlord, each and every
     obligation of Tenant under the Lease to the extent applicable to the
     Subleased Premises. Landlord and Sublessee each hereby release the other,
     and waive their respective rights of recovery against the other for direct
     or consequential loss or damage arising out of or incident to the perils
     covered by property insurance carried by such party to the extent of such
     insurance and waive any right of subrogation which might otherwise exist in
     or accrue to any person on account thereof.

          (b)  Tenant and Sublessee agree to each of the terms and conditions of
     this Consent, and upon any conflict between the terms of the Sublease and
     this Consent, the terms of this Consent shall control.

          (c)  The Sublease shall be deemed and agreed to be a sublease only and
     not an assignment and there shall be no further subletting or assignment of
     all or any portion of the Premises demised under the Lease (including the
     Subleased Premises demised by the Sublease) except in accordance with the
     terms and conditions of the Lease.



                                       3

<PAGE>
     (d)  If Landlord terminates the Lease as a result of a default by Tenant
thereunder or the Lease terminates for any other reason, then, so long as
Sublessee is not in default under the terms of the Sublease, Sublessee's use,
possession and enjoyment of the Subleased Premises shall not be interfered with
or disturbed by Landlord, Sublessee shall attorn to Landlord and recognize
Landlord as Sublessee's lessor under the Sublease and the Sublease shall become
and be deemed to be a direct lease between Landlord and Sublessee, and Landlord
shall not disturb Sublessee in its occupancy of the Subleased Premises so long
as Sublessee is not in default thereunder. If the Sublease becomes a direct
Lease between Landlord and Sublessee, Landlord shall undertake the obligations
of Tenant under the Sublease from the date of termination of the Lease
("TERMINATION DATE") through the expiration or earlier termination of the
Sublease, but Landlord, in undertaking such obligations of Tenant, shall not (a)
be liable for any rent or any security deposit paid by Sublessee (except to the
extent actually delivered to Landlord), (b) be liable for any prior act or
omission of Tenant under the Lease or the Sublease prior to the Termination Date
or for any other defaults of Tenant under the Sublease or the Lease prior to the
Termination Date, (c) be subject to any defenses or offsets previously accrued
which Sublessee may have against Tenant for any period prior to the Termination
Date, (d) be bound by any changes or modifications made to the Sublease without
the prior written consent of Landlord, (e) be liable for Tenant's Work
including, without limitation, completing Tenant's Work if Tenant fails to do
so, or (f) any matters provided for in Sections 17 and 18 of the Sublease.
Notwithstanding the termination of the Lease, Landlord shall, during the term of
the Sublease, continue to perform the obligations of Landlord set forth in
Paragraphs 8, 10, 24 and 28 of the Lease.

     (e)  Tenant and Sublessee acknowledge and agree that if Tenant or Landlord
elects to terminate the Lease pursuant to the terms thereof, Landlord shall
have no responsibility, liability or obligation to Sublessee, and the Sublease
shall terminate except as expressly provided in Section 6(d) above.

     (f)  Under no circumstances may the term of the Sublease for the Subleased
Premises be extended by Tenant beyond the last day of the 24th month following
the Commencement Date (as defined in the Sublease) unless all of the following
conditions are satisfied in connection with such extension:

          (i)   the extension term(s) are for an aggregate of 12 months or less;

          (ii)  upon the commencement of any such extension term: (A) Tenant is
     the tenant under the Lease and Tenant is not in Default under the Lease;
     and (B) Sublessee or any successor of Sublessee approved by Landlord
     pursuant to the terms of the Lease is the subtenant under the Sublease and
     such subtenant (the "APPROVED SUBTENANT") is not in default thereunder and,
     in either case, such Approved Subtenant is of sound financial condition, as
     determined by Landlord after receipt of such Approved Subtenant's financial
     statements in form satisfactory to Landlord;

                                       4
<PAGE>

               (iii) the amount of the Base Rent (as defined in the Sublease)
          to be paid under the Sublease during such extension term shall be the
          fair market rent for the Subleased Premises. Upon any agreement to
          extend the term of the Sublease, Tenant shall give Landlord notice
          not less than 45 days prior to the commencement of any such extension
          term, setting forth the Base Rent proposed for such extension term.
          Landlord shall have 10 business days in which to approve or
          disapprove such proposed Base Rent. If Landlord fails to approve such
          Base Rent within such 10 business day period, such Base Rent shall be
          determined using the arbitration procedure set forth in Section 19(d)
          of the Sublease. Tenant shall be obligated to pay to Landlord the
          percentage of any such rent (or a combination of the rental payable
          under the Sublease plus any bonus or other consideration therefor or
          incident thereto) in excess of the Base Rent as is required pursuant
          to Paragraph 21.B of the Lease; provided, however, that any funds
          expended by Approved Subtenant shall not be included as part of
          Tenant's expenditure for purposes of determining under Paragraph 21.B
          of the Lease whether Tenant has expended $70 per rentable square
          foot. In no event shall the monthly Base Rent under the Sublease
          during such extension term be less than the amount paid by Approved
          Subtenant for the last full month prior to such extension term; and

               (iv) the provisions of Paragraph 21.B of the Lease shall apply
          during the extension term to any rent or other consideration realized
          by Tenant in excess of the Base Rent under the Lease for all space
          subleased to Approved Subtenant (including any expansion space).

If the Lease has terminated and the Sublease has become a direct lease between
Landlord and Approved Subtenant, under no circumstances shall Landlord extend
the term of the Sublease for the Subleased Premises beyond the last day of the
24th month following the Commencement Date (as defined in the Sublease) unless
all of the conditions set forth in Section 6(f)(i), (ii)(B) and (iii) above are
satisfied.

     7.   Landlord hereby grants the Approved Subtenant the following renewal
rights:

          (a)  If the Lease has been terminated, the Sublease has become a
     direct lease between Landlord and the Approved Subtenant and the term of
     the Sublease has been extended as provided in Section 6(f) above (the
     "APPROVED EXTENSION TERM"), then, subject to the terms and conditions set
     forth in this Section 7, the Approved Subtenant shall have the right, but
     not the obligation, to lease the entire Premises for the balance of the
     Lease Term (the "EXTENSION RIGHT") upon the expiration of the Approved
     Extension Term. During the Approved Extension Term, Landlord shall, at
     such time as Landlord shall elect so long as Approved Subtenant's rights
     hereunder are preserved, deliver to Approved Subtenant written notice (the
     "EXTENSION NOTICE") setting forth the terms and conditions on which
     Landlord is prepared to enter into a new lease with Approved Subtenant for
     the entire Premises for the balance of the Lease Term. Approved Subtenant
     shall have 10 business days following delivery of the Extension Notice to


                                       5
<PAGE>
     deliver to Landlord written notification of Approved Subtenant's
     exercise of the Extension Right (the "ACCEPTANCE NOTICE").

          (b) If: (i) Approved Subtenant fails to deliver notice accepting the
     terms of the Extension Notice within such 10 business day period, or (ii)
     no lease agreement acceptable to Landlord and Approved Subtenant in their
     respective sole discretion, has been executed between Landlord and Approved
     Subtenant within 20 business days from the date of delivery of the
     Acceptance Notice to Landlord, the Extension Right shall terminate and be
     of no further force or effect and Landlord shall be free to lease the
     Premises to such persons and on such terms as Landlord shall, in its sole
     discretion, elect.

          (c) Notwithstanding the above, the Extension Right shall not be in
     effect and may not be exercised by Approved Subtenant during any period
     that Approved Subtenant is in default under any provision of the Sublease,
     or if Approved Subtenant has been in default (after the lapse of any
     applicable notice and cure periods) under any provision of the Sublease 3
     or more times during the term of the Sublease, whether or not the defaults
     are cured. The first 2 times during the term of the Sublease that Approved
     Subtenant fails to pay any installment of rent (or any other payments due
     under the Sublease) when due shall not be deemed to be a default under
     Section 7(c) and (d) hereof unless such failure shall continue for more
     than 3 business days after notice from Landlord.

          (d) The Extension Right shall terminate and be of no further force or
     effect even after Approved Subtenant's due and timely exercise of the
     Extension Right, if, after such exercise, but prior to the commencement
     date of the lease for the entire Premises, (i) Approved Subtenant fails to
     timely cure any default by Approved Subtenant under the Sublease, or (ii)
     Approved Subtenant has defaulted 3 or more times (after the lapse of any
     applicable notice and cure periods) during the term of the Sublease,
     whether or not such defaults are cured.

          (e) The Extension Right is personal to the entity approved by Landlord
     as an Approved Subtenant and is not assignable without Landlord's consent,
     which may be granted or withheld in Landlord's sole discretion. The period
     of time within which the Extension Right may be exercised shall not be
     extended or enlarged by reason of Approved Subtenant's inability to
     exercise the Extension Right by reason of the application of Sections 7(c)
     or 7(d) hereof.

     8. Any act or omission of Sublessee or anyone claiming under or through
Sublessee that violates any of the provisions of the Lease shall be deemed a
violation of the Lease by Tenant.

     9. Upon a default by Tenant under the Lease, Landlord may proceed directly
against Tenant, any guarantors or anyone else liable under the Lease without
first exhausting Landlord's remedies against any other person or entity liable
thereon to Landlord. If Landlord gives Sublessee notice that Tenant is in
default under the Lease, Sublessee shall thereafter make directly to Landlord
all payments otherwise due Tenant, which payments will be received by


                                        6.
<PAGE>
Landlord without any liability to Landlord except to credit such payments
against amounts due under the Lease and Sublease. The mention in this Consent
of any particular remedy shall not preclude Landlord from any other remedy in
law or in equity.

     10.  Tenant shall pay any broker commissions or fees that may be payable
as a result of the Sublease and Tenant hereby indemnifies and agrees to hold
Landlord harmless from and against any loss or liability arising therefrom or
from any other commissions or fees payable in connection with the Sublease
which result from the actions of Tenant. Sublessee hereby indemnifies and
agrees to hold Landlord harmless from and against any loss or liability arising
from any commissions or fees payable in connection with the Sublease which
result from the actions of Sublessee.

     11.  Tenant and Sublessee agree that the Sublease will not be modified or
amended in any way without the prior written consent of Landlord, which consent
shall not be unreasonably withheld or delayed. Tenant and Sublessee hereby
agree that it shall be reasonable for Landlord to withhold its consent to any
modification or amendment of the Sublease which would change the permitted use
of the Subleased Premises or which would affect Landlord's status as a real
estate investment trust. Any modification or amendment of the Sublease without
Landlord's prior written consent shall be void and of no force or effect.

     12.  This Consent may not be changed orally, but only by an agreement in
writing signed by Landlord and the party against whom enforcement of any change
is sought.

     13.  This Consent may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which when taken together shall
constitute but one and the same instrument.

     14.  This Consent and the legal relations between the parties hereto shall
be governed by and construed and enforced in accordance with the internal laws
of the State in which the Premises is located, without regard to its principles
of conflicts of law.

                            [SIGNATURES ON NET PAGE]


                                       7
<PAGE>
     IN WITNESS WHEREOF, Landlord, Tenant and Sublessee have caused their duly
authorized representatives to execute this Consent as of the date first above
written.


LANDLORD:                          ARE-TECHNOLOGY CENTER SSF, LLC,
                                   a Delaware limited liability company

                                   By: Alexandria Real Estate Equities, L.P.,
                                       a Delaware limited partnership
                                       its managing member

                                       By: ARE-QRS CORP.,
                                           a Maryland corporation,
                                           its general partner

                                           By:  /s/ MICHAEL C. KELEY
                                                --------------------------------
                                                Michael C. Keley

                                           Its: Senior Vice President
                                                --------------------------------
                                                Real Estate Legal Affairs


TENANT:                            VIROLOGIC, INC.,
                                   A Delaware corporation


                                   By:  W. D. YOUNG
                                        ----------------------------------------

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


SUBLESSEE:                         DIADEXUS, INC.,
                                   a Delaware corporation


                                   By:  MOHAN S. IYER
                                        ----------------------------------------

                                   Its: V.P., BUSINESS DEVELOPMENT
                                        ----------------------------------------



                                      S-1
<PAGE>


                                   EXHIBIT A


                                   SUBLEASE

                                   Attached




                                     A-1

<PAGE>
                                    SUBLEASE

THIS SUBLEASE ("Sublease"), dated May 17, 2001, is entered into by and between
VIROLOGIC, INC., a Delaware corporation ("Sublandlord"), and DIADEXUS, INC., a
Delaware corporation ("Subtenant").


                                    RECITALS

     A.   Sublandlord leases certain premises (the "Premises") consisting of
approximately 53,980 square feet in a building, located at 343 Oyster Point
Boulevard, South San Francisco, California, pursuant to that certain Lease
dated November 23, 1999, between ARE-Technology Center SSF, LLC, a Delaware
limited liability company, successor-in-interest to Trammell Crow Northern
California Development, Inc., as landlord (the "Master Landlord"), and
Sublandlord, as tenant, as amended by that certain First Amendment to Lease
Agreement dated February, 2000 (collectively, the "Master Lease"). The Premises
is more particularly described in the Master Lease, a copy of which is attached
hereto as Exhibit A. Capitalized terms used but not defined herein have the
same meanings as they have in the Master Lease.

     B.   Sublandlord desires to sublease to Subtenant a portion of the
Premises comprising approximately 40,350 square feet and depicted on Exhibit B
attached hereto (the "Sublease Premises"), and Subtenant desires to sublease the
Sublease Premises from Sublandlord on the terms and provisions hereof.

     NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, Sublandlord and Subtenant covenant and agree as follows:


                                   AGREEMENT

     1.   SUBLEASE PREMISES. On and subject to the terms and conditions below,
Sublandlord hereby leases to Subtenant, and Subtenant hereby leases from
Sublandlord, the Sublease Premises.

     2.   TERM. This Sublease shall commence upon substantial completion of
Tenant's Work (as defined in the Master Lease) as set forth in the Work Letter
attached hereto as Exhibit C (the "Commencement Date"), provided Sublandlord
has theretofore obtained the Consent to Sublease signed by the Master Landlord
in the form of Exhibit D attached hereto, and shall expire on the last day of
the twenty-fourth (24th) month following the Commencement Date, unless sooner
terminated pursuant to any provision hereof. Subtenant shall have the right to
terminate this Sublease effective on any date on or after the first day of the
nineteenth (19th) month following the Commencement Date by providing no less
than ninety (90) days prior written notice to Sublandlord.

     3.   POSSESSION/EARLY ACCESS.

          (a)  The parties currently anticipate that the Commencement Date
will occur on or before August 1, 2001. If for any reason Sublandlord cannot
deliver possession of the Sublease Premises to Subtenant on or before such
date, Sublandlord shall not be subject to any



                                       1.




<PAGE>
liability therefor, except as set forth in this Section 3, nor shall such
failure affect the validity of this Sublease or the obligations of Subtenant
hereunder or extend the term hereof, provided that no Rent shall be due
hereunder until possession of the Sublease Premises has been delivered to
Subtenant. If Sublandlord is unable to deliver possession of the Sublease
Premises to Subtenant on or before November 1, 2001, for any reason other than
Master Landlord's delays in completing Landlord's Work (as defined in Exhibit
B-1 to the Master Lease) or Subtenant Delays (as defined in the Work Letter),
then Subtenant may terminate this Sublease by written notice to Sublandlord
given on or before November 10, 2001, whereupon any monies previously paid by
Subtenant to Sublandlord, including, without limitation, all or any portion of
Subtenant's Contribution, paid in accordance with the Work Letter, shall be
reimbursed to Subtenant by Sublandlord within ten (10) business days  of such
termination and, following such reimbursement, the parties shall have no
further obligation to one another with respect to this Sublease. Sublandlord
shall deliver a notice to Subtenant describing any delays which Sublandlord
anticipates will result from Master Landlord's delays in completing Landlord's
Work.

          (b)  Subtenant shall have the right to enter the Sublease Premises
prior to the Commencement Date for the purpose of installing cable, computer
equipment, AV equipment, PBX equipment, workstations, furniture and lab
equipment. Subtenant shall coordinate all such entries with Sublandlord so as
not to interfere with the completion of Tenant's Work. Such early entry shall
be subject to all of the terms and conditions of this Sublease, except that
Subtenant shall not be required to pay Rent on account thereof.

     4.   RENT.

          (a)  Commencing on the Commencement Date and continuing throughout
the term of this Sublease, Subtenant shall pay monthly rent ("Rent") to
Sublandlord in the following amounts:

               (i)  Base Rent. Subtenant shall pay to Sublandlord monthly base
rent ("Base Rent") as follows:

               Months 1-12:        $80,700.00          ($2.00/square foot)
               Months 13-24:       $82,718.00          ($2.05/square foot)

If pursuant to Section 19 below, the term of this Sublease is extended for a
period beyond twenty-four (24) months, Base Rent during such extended term
shall be Fair Market Rent as determined by the parties in accordance with
Section 19.

               (ii) Additional Rent. In addition to Base Rent, Subtenant also
shall pay to Sublandlord, (a) Subtenant's proportionate share of Tenant's
Proportionate Share of Basic Operating Costs (as such terms are defined in the
Basic Lease Information and in Section 7 of the Master Lease), (b) all other
costs payable by Sublandlord with respect to the Sublease Premises under the
Master Lease, except penalties, interest and other costs and fees arising from
a default by Sublandlord under the Master Lease, and (c) any costs and expenses
applicable to the Sublease Premises which are paid directly by Sublandlord, if
any, including, but not limited to, utilities, personal property taxes and real
property taxes (collectively, "Additional Rent"). Subtenant shall pay
Subtenant's share of Basic Operating Costs and any Rent Increase as and


                                       2.
<PAGE>
when such payments are due from Sublandlord pursuant to the Master Lease, but
at least five (5) business days prior to the date Sublandlord must pay such
amounts to Master Landlord. Within ten (10) days of receipt by Sublandlord from
Master Landlord, Sublandlord shall provide to Subtenant copies of all notices
relating to Estimated Basic Operating Costs and Basic Operating Cost Adjustments
applicable to the Sublease Premises. Subtenant shall pay items of Additional
Rent other than Basic Operating costs within ten (10) days after receipt of
written demand from Sublandlord, which demand shall be accompanied by any
invoice or statement that Sublandlord received from Master Landlord relating
thereto. Promptly upon receipt from Master Landlord, Sublandlord shall provide
Subtenant with an estimate of Additional Rent for the year 2001, together with
any notices received by Sublandlord from Master Landlord with respect thereto.

               (iii) Payment of Rent. If the Commencement Date does not fall on
the first day of a calendar month, Rent for the first month shall be prorated on
a daily basis based upon a calendar month. Rent shall be payable to Sublandlord
in lawful money of the United States, in advance, without prior notice, demand,
or offset, at least five (5) business days prior to the first day of each
calendar month during the term hereof. All Rent shall be paid to Sublandlord at
the address specified for notices to Sublandlord in Section 13 below.

          (b)  Upon receipt of the Consent to Sublease executed by Sublandlord
and Master Landlord, Subtenant shall deliver to Sublandlord the sum of Eighty
Thousand Seven Hundred and No/100 Dollars ($80,700), representing the first
month's Base Rent.

          (c)  In the event of any casualty or condemnation affecting the
Sublease Premises, Rent payable by Subtenant shall be abated hereunder, but only
to the extent that rent under the Master Lease is abated, and Subtenant waives
any right to terminate this Sublease in connection with such casualty or
condemnation except to the extent the Master Lease is also terminated as to the
Sublease Premises or any portion thereof.

          (d)  Base Rent and Additional Rent may be referred to herein
collectively as "Rent."

     5.   SECURITY DEPOSIT. Upon execution of this Sublease, Subtenant shall
deliver to Sublandlord the sum of One Hundred Sixty-One Thousand Four Hundred
and No/100 Dollars ($161,400.00) as security for the performance of Subtenant's
obligations under this Sublease ("Security Deposit"). If Subtenant fails to pay
Rent or other charges when due under this Sublease, or fails to perform any of
its other obligations hereunder, Sublandlord may use or apply the portion of the
Security Deposit required for the payment of any Rent or other amount then due
hereunder and unpaid, for the payment of any other sum for which Sublandlord may
become obligated by reason of Subtenant's default or breach, or for any loss or
damage sustained by Sublandlord as a result of Subtenant's default or breach. If
Sublandlord so uses any portion of the Security Deposit, Subtenant shall restore
the Security Deposit to the full amount originally deposited within ten (10)
days after receipt of Sublandlord's written demand therefor. Sublandlord shall
not be required to keep the Security Deposit separate from its general accounts,
and shall have no obligation or liability for payment of interest on the
Security Deposit. The Security Deposit, or so much thereof as had not
theretofore been applied by Sublandlord, shall be returned to Subtenant within
thirty (30) days of the expiration or earlier termination of this Sublease,
provided Subtenant has vacated the Sublease Premises in accordance with the
terms of this Sublease.


                                       3.
<PAGE>
     In lieu of a cash Security Deposit, Subtenant may provide to Sublandlord
an unconditional, irrevocable letter of credit ("Letter of Credit") in the
amount set forth in this Section 5 in favor of Sublandlord and issued by a bank
located in the Bay Area and reasonably acceptable to Sublandlord ("Issuer").
The Letter of Credit shall be in form reasonably acceptable to Sublandlord. The
Letter of Credit shall provide that draws, including partial draws, at
Sublandlord's election, will be honored upon the delivery to the Issuer of
notice signed by Sublandlord, or its authorized agent, that an event of default
has occurred under the Sublease. Any draw or partial draw of the Letter of
Credit shall not constitute a waiver by Sublandlord of its right to enforce its
other remedies hereunder, at law or in equity. If any portion of the Letter of
Credit is drawn upon, Subtenant shall, within ten (10) days after delivery of
written demand from Sublandlord, restore said Letter of Credit to its original
amount. The Letter of Credit shall be for the term of one year and
automatically shall be renewed each year for the term of sixty (60) days beyond
the termination or earlier expiration of the Sublease. The Letter of Credit
will automatically renew each year during the Sublease term unless the
beneficiary under the Letter of Credit is given at least thirty (30) days prior
notice of a non-renewal by the issuing bank, and Sublandlord shall be able to
draw on the Letter of Credit in the event of such notice.

     6.   ASSIGNMENT AND SUBLETTING. Subtenant may not assign, sublet,
transfer, pledge, hypothecate or otherwise encumber the Sublease Premises, in
whole or in part, or permit the use or occupancy of the Sublease Premises by
anyone other than Subtenant, unless Subtenant has obtained Sublandlord's
consent thereto, which consent shall not be unreasonably withheld, and the
consent of Master Landlord in accordance with the terms of the Master Lease;
provided, however, that no such consent shall be required upon Subtenant's
assignment or subletting of the Sublease Premises to a Permitted Assignee (as
such term is defined in Section 21 of the Master Lease). Regardless of
Sublandlord's consent, no subletting or assignment shall release Subtenant of
its obligation hereunder. Any rent or other consideration payable to Subtenant
pursuant to any sublease or assignment permitted by this paragraph which is in
excess of the Rent payable by Subtenant to Sublandlord pursuant hereto ("Bonus
Rent") shall be paid to Sublandlord. In calculating Bonus Rent, Subtenant may
first deduct from the rent or other consideration received (a) the amortization
of a reasonable brokerage commission, (b) the cost of tenant improvements, if
any, paid for by Subtenant in connection with the assignment or subletting and
(c) that portion of Subtenant's Contribution proportionally attributable to (i)
the square footage of the Sublease Premises assigned or sublet and (ii) the
duration of such sublease or assignment.

     7.   CONDITION OF SUBLEASE PREMISES/SUBLANDLORD'S WORK.

          (a)  Subtenant has used due diligence in inspecting the Sublease
Premises and is satisfied with the condition of the Sublease Premises and the
property, including the environmental condition thereof. Subtenant agrees to
accept the Sublease Premises in "as-is" condition and with all faults without
any representation or warranty of any kind or nature whatsoever, or, except as
expressly set forth in Exhibit C, without any obligation on the part of
Sublandlord to modify, improve or otherwise prepare the Sublease Premises for
Subtenant's occupancy. Subtenant shall bear no responsibility for Hazardous
Materials (as defined in Section 4 of the Master Lease) existing in, on or
about the Sublease Premises at the date of this Sublease.

          (b)  Sublandlord shall perform the work and make the installations in
the Sublease Premises substantially as set forth in the Work Letter attached
hereto as Exhibit C. Subtenant acknowledges that Master Landlord has not
completed Landlord's Work and that



                                       4.

<PAGE>
Sublandlord shall have no obligation to complete Landlord's Work nor any
liability arising from Master Landlord's failure to complete such work.

     8.   USE. Subtenant may use the Sublease Premises only for the purposes
allowed in the Master Lease and for no other purpose. Subtenant shall promptly
comply with all applicable statutes, ordinances, rules, regulations, orders,
and restrictions of record in effect during the term of this Sublease
governing, affecting and regulating the Sublease Premises, including but not
limited to the use thereof. Subtenant shall not use or permit the use of the
Sublease Premises in a manner that will create waste or a nuisance, interfere
with or disturb other tenants in the Building or violate the provisions of the
Master Lease.

     9.   PARKING. Subtenant shall have proportional interest in such parking
rights as Sublandlord has in connection with the Sublease Premises pursuant to
the Master Lease.

     10.  INCORPORATION OF SUBLEASE.

          (a)  All of the terms and provisions of the Master Lease, except as
provided in subsection (b) below, are incorporated into and made a part of this
Sublease and the rights and obligations of the parties under the Master Lease
are hereby imposed upon the parties hereto with respect to the Sublease
Premises, Sublandlord being substituted for the "Landlord" in the Master Lease,
and Subtenant being substituted for the "Tenant" in the Master Lease. It is
further understood that where reference is made in the Master Lease to the
"Premises," the same shall mean the Sublease Premises as defined herein; where
reference is made to the "Term Commencement Date," the same shall mean the
Commencement Date as defined herein; and where reference is made to the
"Lease," the same shall mean this Sublease. Notwithstanding the foregoing, the
term "Landlord" in the following sections of the Master Lease (i) shall mean
Master Landlord, not Sublandlord: 8.A., 10, 24, 28, 36.J, 37.F and (ii) shall
mean both Master Landlord and Sublandlord: 18.

          (b)  The following paragraphs of the Master Lease are not incorporated
herein: Basic Lease Information (except definitions that are applicable to and
appropriate in the context of this Sublease), 1, 2, 3, 6, 19, 20, 21.B., 31, 35,
37.C, D, E, G and H, Exhibit A-2, Exhibit B-1 (except to the extent referred to
in the Work Letter), Exhibit B-3, Exhibit C, Exhibit F, and Exhibit G.

          (c)  Subtenant hereby assumes and agrees to perform for Sublandlord's
benefit, during the term of this Sublease, all of Sublandlord's obligations
with respect to the Sublease Premises under the Master Lease, except as
otherwise provided herein. Subtenant shall not commit or permit to be committed
any act or omission which violates any term or condition of the Master Lease.
Except as otherwise provided herein, this Sublease shall be subject and
subordinate to all of the terms of the Master Lease.

          (d)  Except as expressly set forth herein, Sublandlord hereby grants
to Subtenant all of the rights, privileges and benefits granted to or conferred
upon Sublandlord as tenant under the Master Lease, provided that Subtenant's
exercise of such rights, privileges and benefits do not result in or cause
Sublandlord to default under the Master Lease.


                                       5.
<PAGE>
     11. INSURANCE.  Subtenant shall be responsible for compliance with the
insurance provisions of the Master Lease. Such insurance shall insure the
performance by Subtenant of its indemnification obligations hereunder and shall
name Master Landlord and Sublandlord as additional insureds. All insurance
required under this Sublease shall contain an endorsement requiring thirty (30)
days written notice from the insurance company to Subtenant and Sublandlord
before cancellation or change in the coverage, insureds or amount of any
policy. Subtenant shall provide Sublandlord with certificates of insurance
evidencing such coverage prior to the commencement of this Sublease.

     12. DEFAULT.  In addition to defaults contained in the Master Lease,
failure of Subtenant to make any payment of Rent when due hereunder shall
constitute an event of default hereunder. If Subtenant's default causes
Sublandlord to default under the Master Lease, Subtenant shall defend,
indemnify and hold Sublandlord harmless from all damages, costs (including
reasonable attorneys' fees), liability, expenses or claims relating to such
default.

     13. NOTICES. The addresses specified in the Master Lease for receipt of
notices to each of the parties are deleted and replaced with the following:

          TO SUBLANDLORD AT:       VIROLOGIC, INC.
                                   270 East Grand Avenue
                                   South San Francisco, CA 94080
                                   Attn: Karen Wilson/Kathy Hibbs

          TO SUBTENANT AT:         the Sublease Premises

All notices hereunder shall be in writing and shall be sent by (a) messenger or
hand delivery; (b) reputable overnight air courier service; or (c) certified or
registered U.S. Mail, postage prepaid, return receipt requested. Notice shall be
deemed given on the earlier of the date delivered or refusal of a party to
accept delivery thereof. Each party immediately shall provide the other with a
copy of any notice of default given to or received from Master Landlord with
respect to this Sublease or the Sublease Premises.

     14. SUBLANDLORD'S OBLIGATIONS.

         (a) To the extent that the provision of any services or the
performance of any maintenance or any other act respecting the Sublease
Premises or the building in which the Sublease Premises is located (the
"Building"), including, without limitation, the performance and completion of
Landlord's Work (as defined in the Master Lease), is the responsibility of
Master Landlord (collectively "Master Landlord Obligations"), upon Subtenant's
written request, Sublandlord shall make reasonable efforts to cause Master
Landlord to perform such Master Landlord Obligations, including the
commencement of appropriate legal proceedings; provided, however, that, except
to the extent resulting from Sublandlord's breach of or default under the
Master Lease which is not the result of Subtenant's breach or default
hereunder, in no event shall Sublandlord be liable to Subtenant for any
liability, loss or damage whatsoever in the event that Master Landlord should
fail to perform the same, nor shall Subtenant be entitled to withhold the
payment of Rent or to terminate this Sublease, except to the extent Sublandlord
has such a termination right under the Master Lease. If Sublandlord is
unsuccessful in obtaining the


                                       6.
<PAGE>
performance by Master Landlord of the Master Landlord Obligations in accordance
with the immediately preceding sentence, then Subtenant shall have the right,
upon prior written notice to Sublandlord, to exercise in its own name all of
the rights available to Sublandlord under the Master Lease to enforce
performance on the part of Master Landlord. It is expressly understood that the
services and repairs which are incorporated herein by reference, including but
not limited to the maintenance of exterior walls, structural portions of the
roof, foundations, walls and floors, will in fact be furnished by Master
Landlord and not by Sublandlord, except to the extent otherwise provided in the
Master Lease. In addition, Sublandlord shall not be liable for any maintenance,
restoration (following casualty or destruction) or repairs in or to the
Building or Sublease Premises, other than its obligation hereunder to use
reasonable efforts to cause Master Landlord to perform its obligations under
the Master Lease. With respect to any maintenance or repair to be performed by
Master Landlord respecting the Sublease Premises, the parties expressly agree
that Subtenant shall have the right to contact Master Landlord directly to
cause it to so perform.

          (b)  So long as Subtenant complies with its obligations under this
Sublease: (i) Sublandlord shall not agree to any amendment of the Master
Lease which materially affects Subtenant's rights under this Sublease;
(ii) Sublandlord shall not, without Subtenant's written consent, exercise any
right to terminate the Master Lease with respect to any period during the
Sublease term, other than on account of a default by Master Landlord under the
Master Lease, casualty or condemnation; and (iii) Sublandlord shall perform all
of its obligations under the Master Lease not assumed by Subtenant hereunder,
including, without limitation, the prompt payment to Master Landlord of all
sums paid by Subtenant to Sublandlord hereunder.

          (c)  Sublandlord represents to Subtenant that (i) the Master Lease is
in full force and effect, (ii) Sublandlord is not in default under the Master
Lease and, to Sublandlord's knowledge, Master Landlord is not in default
thereunder, (iii) the Master Lease attached hereto is a full and complete copy
of the Master Lease, and (iv) as of the date of this Sublease, the
Sublandlord's leasehold estate is not encumbered by any deed of trust or
mortgage financing.

          (d)  Except as otherwise provided herein, Sublandlord shall have no
other obligations to Subtenant with respect to the Sublease Premises or the
performance of the Master Landlord Obligations.

     15.  EARLY TERMINATION OF SUBLEASE. If, without the fault of Sublandlord,
the Master Lease should terminate prior to the expiration of this Sublease,
Sublandlord shall have no liability to Subtenant on account of such
termination. Subject to Section 14(b) above, to the extent that the Master
Lease grants Sublandlord any discretionary right to terminate the Master Lease,
whether due to casualty, condemnation, or otherwise, Sublandlord shall be
entitled to exercise or not exercise such right in its complete and absolute
discretion.

     16.  CONSENT OF MASTER LANDLORD AND SUBLANDLORD. If Subtenant desires to
take any action which requires the consent or approval of Sublandlord pursuant
to the terms of this Sublease, prior to taking such action, including, without
limitation, making any alterations, then, notwithstanding anything to the
contrary herein, (a) Sublandlord shall have the same rights of approval or
disapproval as Master Landlord has under the Master Lease, and (b) Subtenant
shall not take any action until it obtains the consent of Sublandlord and
Master Landlord, as may be required under this Sublease or the Master Lease.
This Sublease shall not be effective unless


                                       7.
<PAGE>
and until the Consent to Sublease shall have been obtained. Each of Sublandlord
and Subtenant represents and warrants to the other that it has obtained all
necessary corporate approvals for the execution and delivery of this Sublease.

     17.  INDEMNITY. Subtenant shall indemnify, defend, protect, and hold
Sublandlord and Master Landlord harmless from and against all actions, claims,
demands, costs, liabilities, losses, reasonable attorneys' fees, damages,
penalties, and expenses (collectively "Claims") which may be brought or made
against Sublandlord or which Sublandlord may pay or incur to the extent caused
by (i) a breach of this Sublease by Subtenant, (ii) any violation of law by
Subtenant or its employees, agents, contractors or invitees (collectively,
"Agents") relating to the use or occupancy of the Sublease Premises, (iii) any
act or omission by Subtenant or its Agents resulting in contamination of any
part or all of the Sublease Premises or the Building by Hazardous Materials or
(iv) the negligence or willful misconduct of Subtenant or its Agents.
Sublandlord shall indemnify and hold Subtenant harmless from and against any and
all loss, liability or expense, including reasonable attorneys' fees incurred or
suffered by Subtenant on account of (i) the Sublandlord's material breach of
this Sublease, (ii) a default by Sublandlord under the Master Lease to the
extent not caused by Subtenant or (iii) Sublandlord's gross negligence of
willful misconduct with respect to the Sublease Premises or this Sublease.

     18.  BROKERS. Each party hereto represents and warrants that it has dealt
with no brokers in connection with this Sublease and the transactions
contemplated herein, except Mark Pearson of CRESA Partners ("Broker"). All
broker fees and commissions shall be paid by Sublandlord in accordance with the
terms of a separate agreement between Sublandlord and Broker. Each party shall
indemnify, protect, defend and hold the other party harmless from all costs and
expenses (including reasonable attorneys' fees) arising from or relating to a
breach of the foregoing representation and warranty.

     19.  RIGHT OF FIRST OFFER.

          (a)  So long as diaDexus, Inc. (or a Permitted Assignee) is the
Subtenant hereunder and occupies the entirety of the Sublease Premises, and
subject to the conditions set forth in this Section 19, prior to entering into a
sublease proposal with a third party for all or any portion of the Premises (the
"Offered Space"), Sublandlord shall deliver to Subtenant a written notice (the
"ROF Notice") informing Subtenant of Sublandlord's intent to sublease the
Offered Space to a third party at the expiration of the 24th month of the
Sublease term. Sublandlord shall deliver the ROF Notice to Subtenant not later
than the first day of the 22nd month of the Sublease term.

          (b)  Within ten (10) days of receipt of the ROF Notice, Subtenant
shall notify Sublandlord in writing of Subtenant's election to sublease the
Offered Space (the "Acceptance Notice"). Failure of Subtenant to timely deliver
the Acceptance Notice shall be deemed an election by Subtenant not to sublease
the Offered Space, and Subtenant shall have no further rights to sublease any
portion of the Offered Space thereafter. Subtenant's right of first offer set
forth in this Section 19 is a one-time right.

          (c)  Immediately following receipt of the Acceptance Notice,
Sublandlord and Subtenant shall negotiate in good faith the terms of the
sublease applicable to the Offered Space. The parties shall use best efforts to
finalize and execute such sublease within forty-five (45) days


                                       8.
<PAGE>
of Sublandlord's receipt of the Acceptance Notice. Such sublease shall be
subject to the following conditions:

               (i)   The term of the sublease shall be for a period not less
than six (6) months and not more than twelve (12) months.

               (ii)  Base Rent during the entire sublease term shall be the
"Fair Market Rent" for the Offered Space as agreed to by the parties. If the
parties are unable to agree on Fair Market Rent within thirty (30) days of
Sublandlord's receipt of the Acceptance Notice, then Fair Market Rent shall be
determined in accordance with subsection (d) below. In no event, however, shall
Base Rent for the Offered Space be less than the Base Rent for the Sublease
Premises for the last month of the initial Sublease term.

               (iii) Anything herein to the contrary notwithstanding, if
Subtenant is in default under any of the terms, covenants or conditions of this
Sublease, either at the time Subtenant exercises the right of first offer or on
the commencement date of sublease applicable to the Offered Space, Sublandlord
shall have, in addition to all of Sublandlord's other rights and remedies
provided in this Sublease, the right to terminate such right of first offer upon
notice to Subtenant.

          (d)  If Sublandlord and Subtenant are unable to agree on Fair Market
Rent pursuant to subsection 19(c)(ii) above, then the parties shall submit the
matter to arbitration. The arbitration shall be concluded within ninety (90)
days after the date of Subtenant's Acceptance Notice. To the extent that
arbitration has not been completed prior to the expiration of the original
Sublease term, Subtenant shall pay Base Rent at the rate applicable during the
last month of the original Sublease term, with an adjustment to be made once
Fair Market Rent is ultimately determined by arbitration. Within ten (10) days
of the expiration of the 30-day period described in subsection 19(c)(ii) above,
each party shall choose an Appraiser and shall send written notice to the other
party specifying therein the identity of the Appraiser. For purposes hereof,
"Appraiser" means a real estate broker or MAI designated appraiser, in either
case with not less than five (5) years of full time commercial appraisal or
brokerage experience  in the sub-market area in which the Offered Space is
located and with no prior business dealings with the party appointing such
Appraiser. If either party fails to timely appoint an Appraiser, the sole
Appraiser appointed shall determine the Base Rent to be charged during the new
sublease term, based on the criteria described above. If two Appraisers are
appointed, they shall immediately meet and attempt to agree upon such Base Rent.
If they are unable to do so within fifteen (15) days after their first meeting,
they shall jointly appoint a third Appraiser and the third Appraiser shall
determine Fair Market Rent for the applicable extension period within ten (10)
days of his/her appointment. If the two Appraisers are unable to agree upon such
third Appraiser, either party may petition the Presiding Judge of the Superior
Court of the City and County where the Sublease Premises are located to appoint
such third appraisers. The determination of Base Rent as provided herein shall
be binding upon the parties hereto. Promptly upon such determination, the
parties shall execute a sublease specifying the Base Rent payable during the
sublease term.

     20.  RIGHT TO EXPAND SUBLEASE PREMISES.

          (a)  Prior to entering into a sublease proposal with a third party for
all or any portion of the Premises, excluding the Sublease Premises (the
"Expansion Premises"),



                                       9.


<PAGE>
Sublandlord shall deliver a written notice to Subtenant setting forth the terms
upon which Sublandlord is willing to sublease such space to Subtenant (the
"Expansion Notice"). Subtenant shall notify Sublandlord in writing within ten
(10) days after receipt of the Expansion Notice of Subtenant's election to
sublease the Expansion Premises on the terms set forth in the Expansion Notice
("Subtenant's Election Notice"). Failure of Subtenant to timely deliver
Subtenant's Election Notice shall be deemed an election by Subtenant to not
sublease the Expansion Premises, and Subtenant shall have no further rights to
sublease any portion of the Expansion Premises thereafter. Subtenant's right
under this Section 20 is a one-time right. Failure of Subtenant to deliver
Subtenant's Election Notice within the required time period shall cause this
right of first offer to terminate and be of no further force or effect.

          (b)  In the event Subtenant timely delivers Subtenant's Election
Notice, Landlord and Tenant shall enter into an amendment to this Sublease or a
separate lease within ten (10) business days after Sublandlord's receipt of
Subtenant's Election Notice, which amendment or separate lease shall (i) add to
the Sublease Premises the Expansion Premises, (ii) set forth the Base Rent and
other economic terms applicable to the Expansion Premises, which terms shall be
as set forth in the Notice, and (iii) provide that the term of the Expansion
Premises is coterminous with the Sublease Premises.

     21.  SURRENDER OF SUBLEASE PREMISES. Upon the expiration or earlier
termination of this Sublease, Subtenant shall surrender the Sublease Premises in
the same condition as they were in on the Commencement Date, ordinary wear and
tear excepted.

     22.  NO THIRD PARTY RIGHTS. The benefit of the provisions of this Sublease
is expressly limited to Sublandlord and Subtenant and their respective permitted
successors and assigns. Under no circumstances will any third party be construed
to have any rights as a third party beneficiary with respect to any of said
provisions.

     23.  QUIET ENJOYMENT. Subject to Section 14(b)(ii) above, so long as
Subtenant timely pays Rent and performs its obligations under this Sublease,
Sublandlord shall take no action, or fail to take any action, which would
interfere with the right of Subtenant to peaceably have, hold and enjoy the
Sublease Premises during the Sublease term.

     24.  COUNTERPARTS. This Sublease may be signed in two or more counterparts,
each of which shall be deemed an original and all of which shall constitute one
agreement.


                                      10.
<PAGE>

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


SUBLANDLORD: VIROLOGIC, INC.,                SUBTENANT: DIADEXUS, INC.
a Delaware corporation                       a Delaware corporation



By:  /s/ W. D. YOUNG                         By:  /s/ MOHAN S. IYER
   --------------------------                   -----------------------------
Print Name:  W. D. Young                     Print Name:  MOHAN S. IYER
           ------------------                           ---------------------
Its:  CEO                                    Its:  V.P., BUSINESS DEVELOPMENT
    -------------------------                    ----------------------------



                                      11.
<PAGE>

                                   EXHIBIT C

                                  WORK LETTER

     1.   Sublandlord shall complete the Tenant's Work (as defined in Exhibit
B-1 to the Master Lease) in accordance with the Master Lease, including, without
limitation, Exhibit B-1 thereto. Subtenant acknowledges and agrees that
Sublandlord will complete Tenant's Work in accordance with plans and
specifications dated January 30, 2001, prepared by WHL Architects ("Architect")
and approved in advance by Master Landlord (the "Plans and Specifications"). Any
and all changes to the Plans and Specifications desired by Subtenant shall be
subject to Sublandlord's approval, which approval shall not be unreasonably
withheld, and to Master Landlord's approval in accordance with the terms of the
Master Lease. Sublandlord shall not be liable to Subtenant for delays in
completion of Tenant's Work triggered by changes to the Plans and Specifications
requested by Subtenant or otherwise caused by Subtenant ("Subtenant Delays") and
any such delays shall not toll commencement of this Sublease or Subtenant's
payment of Rent hereunder, provided that Sublandlord delivers a notice to
Subtenant describing the delays which Sublandlord anticipates will result from
changes to the Plans and Specifications requested by Subtenant, promptly upon
receipt of the request for the changes from Subtenant.

     2.   Subtenant shall contribute to the cost of Tenant's Work an amount not
to exceed Two Million Six Hundred Thousand and No/100 Dollars ($2,600,000.00)
("Subtenant's Contribution"). Following contribution by Sublandlord toward the
cost of Tenant's Work an amount equal to the sum of One Million One Hundred
Sixty-Five Thousand and No/100 Dollars ($1,165,000.00), which sum shall be
evidenced by copies of checks, invoices marked paid or other evidence reasonably
acceptable to Subtenant, Sublandlord may submit to Subtenant, not more
frequently than monthly, copies of all documents and invoices submitted to
Master Landlord in accordance with paragraph 2.1 of Exhibit B-1 of the Master
Lease. Within fifteen (15) days of receipt of such documents and invoices,
Subtenant shall deliver to Sublandlord the amount shown in the request as
expenditures and costs of Tenant's Work, up to the maximum of the Subtenant's
Contribution. In no event shall Subtenant be required to contribute more to
Tenant's Work than Subtenant's Contribution.

     3.   As used in this Work Letter and in the Sublease, "substantial
completion" shall mean completion of Tenant's Work as certified in writing by
the Architect. Completion and/or correction of items set forth on a punch-list
shall not be required for certification of substantial completion by the
Architect.


                                      14.