Document:

<PAGE>

                                                                    EXHIBIT 10.9

                       THIRD AMENDMENT TO SUBLEASE BETWEEN
                              REGEN BIOLOGICS, INC.
                            AND GENITOPE CORPORATION

         THIS THIRD AMENDMENT TO SUBLEASE (this "THIRD AMENDMENT") is made and
entered into as of the 16th day of May, 2003, by and between REGEN BIOLOGICS,
INC., a Delaware corporation ("REGEN"), and GENITOPE CORPORATION, a Delaware
corporation ("SUBTENANT").

                                    RECITALS

         This Third Amendment is made and entered into with reference to the
following recitals:

         A.       Regen and Subtenant entered into a Sublease dated August 3,
1999, which was amended by a Second Amendment to Sublease Agreement dated
October 1, 2000, which amendment was styled as a "second amendment" because
Subtenant and Regen previously agreed to extend the term of the Sublease and
such extension was treated as a "first amendment", as further amended by a
Second Amendment to Sublease dated February 25, 2002 (collectively, as amended,
the "SUBLEASE"), for the sublease of approximately 7,655 square feet of rentable
area and 603 square feet of rentable common area (i.e. Subtenant's share of
common area between Regen and Subtenant that is rentable area under the Master
Lease) (the "SUBLEASED PREMISES") in the building commonly known as "Building
12" of Seaport Center, and located at 545 Penobscot Drive, Redwood City,
California 94063.

         B.       Regen and Subtenant wish to execute this Third Amendment to
provide for an extension of the term of the Sublease and to modify the base
rent, operating expense and other related provisions of the Sublease.

         NOW, THEREFORE, in consideration of the foregoing, the sum of Ten
Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Regen and Subtenant agree as
follows:

         1.       DEFINED TERMS. All defined terms herein shall have the meaning
given to such term in the Sublease or the Master Lease, as applicable, unless
specifically defined herein.

         2.       INCORPORATION OF RECITALS. The foregoing recitals are
incorporated by reference into this Section 2 as if set forth in this Paragraph
2 in full.

         3.       TERM. The term of the Sublease is extended and will expire on
May 31, 2006, unless sooner terminated in accordance with the terms of the
Sublease. In no event will the term of the Sublease extend beyond the term of
the Master Lease.

         4.       RENT. Notwithstanding anything to the contrary in the
Sublease, commencing on June 1, 2003 (the "MODIFIED RENT COMMENCEMENT DATE"),
and continuing through the term of the Sublease (as extended by the terms of
this Third Amendment), Subtenant shall pay base monthly rent ("RENT") in advance
on the first day of each calendar month to Regen in the amounts specified below:

                                       1.

<PAGE>

<TABLE>
<CAPTION>
                             Monthly Rate Per Rentable
      Period                       Square Foot               Base Monthly Rent
-------------------          -------------------------       -----------------
<S>                          <C>                             <C>
06/01/03 - 05/31/04                   $1.90                      $15,690.20
06/01/04 - 05/31/05                   $1.96                      $16,185.68
06/01/05 - 05/31/06                   $2.02                      $16,681.16
</TABLE>

         If the Modified Rent Commencement Date and/or the last day of the
Sublease term do not fall on the first day of a month or the last day of a
month, as applicable, the rent payable hereunder will be pro-rated on a per day
basis based on the actual number of days in such month. Commencing on the
Modified Rent Commencement Date, the foregoing rent payable by Subtenant under
the terms of the Sublease (as modified by the terms of this Third Amendment)
shall be payable on a triple-net basis and will not include any costs for real
property taxes, Operating Expenses (as defined in the Master Lease), janitorial
services, utilities, garbage removal and the like, which costs will be paid by
Subtenant in accordance with the terms of Section 5 below.

         5.       EXPENSES. As of the Modified Rent Commencement Date, the
pro-rata share of Operating Expenses payable by Subtenant to Regen (the
"EXPENSE") shall be calculated pursuant to Section 5(a) of this Third Amendment,
wherein Subtenant's prorata share is based on the ratio of: (i) the total square
feet subleased by Subtenant pursuant to the Sublease to (ii) the total square
feet leased by Regen pursuant to the Master Lease.

                  (a)      EXPENSE CALCULATION. The expense shall be calculated
by Regen, and Subtenant's pro rata share shall be invoiced to Subtenant on a
monthly basis. Subject to the abatement described in Subsection (b) immediately
below, Subtenant shall owe and pay to Regen its pro-rata share of the Expense,
such Expense to be calculated as follows: actual monthly Operating Expenses
billed to Regen by the Master Landlord, plus actual monthly operating expenses
incurred by Regen (including, without limitation, all Operating Expenses
actually incurred by Regen), but not billed by the Master Landlord, in relation
to the Master Premises rented by Regen pursuant to the Master Lease.
Notwithstanding anything to the contrary contained in this Third Amendment,
Subtenant shall not be obligated to pay any monthly operating expenses or
Operating Expense not applicable to the Subleased Premises. The monthly expenses
referred to herein will include estimates of expenses reasonably anticipated to
be incurred by Regen but not billed by Master Lessor and Operating Expenses for
such period, which will be adjusted at the end of each year according to the
Master Lease. Once the adjustments are received from the Master Landlord, Regen
shall provide a revised statement to Subtenant showing such adjustments,
together with, as appropriate, (i) an invoice for the remaining amount due from
Subtenant to Regen or (ii) a check for the refund amount due from Regen to
Subtenant. All such monthly invoices will be paid by Subtenant, together with
the next monthly Rent payment, and in no event later than thirty (30) days after
receipt by Subtenant of such invoices.

                  (b)      Regen shall abate the first amounts due and payable
by Subtenant during the Term under this Section 5 for the Expense up to an
amount equal to Twenty-Seven Thousand Seven Hundred One and 46/100 Dollars
($27,701.46) (the "EXPENSE ABATEMENT"). From time to time as amounts are first
due and payable by Subtenant to Regen for its pro-rata share of the

                                       2.

<PAGE>

Expense in accordance with the terms of this Section 5, Regen shall abate such
amounts up to the amount of the Expense Abatement.

                  (c)      Notwithstanding anything to the contrary contained in
the Sublease, this Third Amendment or the Master Lease, within ninety (90) days
after receipt by Subtenant of Regen's statement of the Expense for any prior
calendar year during the Term, Subtenant shall have the right, at Subtenant's
sole cost and expense, upon ten (10) business days prior written notice, to
inspect the applicable books of Regen during the business hours of Regen at
Regen's office in the Building, or, at Regen's option, such other location as
Regen reasonably may specify, for the purpose of verifying the information
contained in the statement, provided that the party inspecting such books is an
employee of a reputable accounting firm that provides a full range of accounting
services that is hired on a per-hour basis (and not on a contingency basis), and
Subtenant uses reasonable efforts to maintain the confidentiality of such audit
and the results thereof. Unless Subtenant asserts specific errors within ninety
(90) days after receipt of the statement, the statement shall be deemed correct
as between Regen and Subtenant.

         6.       NO ALLOWANCE. Regen and Subtenant agree that Regen will not be
obligated to provide any tenant improvement allowances whatsoever, or perform
any work in the Premises, in connection with the execution of this Third
Amendment.

         7.       APPROVALS; EFFECTIVENESS. Regen and Subtenant acknowledge that
Regen is negotiating the terms of an amendment to the Master Lease with Master
Landlord to extend the term of the Lease until May 31, 2006 (the "PRIME LEASE
AMENDMENT"). Regen and Subtenant agree that the effectiveness of this Third
Amendment is expressly conditioned on (i) Regen and Master Landlord executing
and delivering the Prime Lease Amendment and (ii) Regen's receipt of Master
Landlord's written consent to the terms of this Third Amendment (collectively
(i) and (ii) are the "APPROVALS"). Regen shall use good faith reasonable efforts
to obtain the Approvals by May 31, 2003. If the Approvals are not obtained by
Regen on or before May 31, 2003 this Third Amendment will automatically
terminate and be of no further force and effect. If the Prime Lease Amendment is
executed by Regen and Master Landlord, the following provisions of the Prime
Lease Amendment shall not be incorporated into the Sublease, as amended by this
Third Amendment: Section 3, 7, and 9.

         8.       RECAPTURE. Commencing on May 31, 2005, Regen will have the
ongoing right to terminate the Sublease with respect to all or any portion of
the Subleased Premises, provided that Regen has delivered written notice to
Subtenant (the "RECAPTURE NOTICE") of such termination at least six (6) months
prior to the date of such termination. The Recapture Notice shall specify the
date of termination (the "RECAPTURE TERMINATION DATE") and the applicable
portion (or all) of the Subleased Premises being recaptured by Regen and
terminated under the Sublease (the "RECAPTURED PREMISES"). If the Recaptured
Premises does not constitute the entire Subleased Premises and Regen elects to
terminate the Sublease with respect to the Recaptured Premises then (a)
Subtenant shall vacate and tender the Recaptured Premises to Regen on the
Recapture Termination Date as if the Recapture Termination Date had been
originally set forth in the Sublease as the expiration date of the term of the
Sublease with respect to the Recaptured Premises, and (b) as to all portions of
the Subleased Premises other than the Recaptured Premises, this Sublease shall
remain in full force and effect except that the Rent, additional rent and the
Expense payable pursuant to Section 5 of this Third Amendment shall be reduced

                                       3.

<PAGE>

proportionately. If the Recaptured Premises does not constitute the entire
Subleased Premises, Regen shall pay all expenses of construction reasonably
required to permit the operation of the Recaptured Premises separate from the
balance of the Subleased Premises. If the Recaptured Premises constitutes the
entire Subleased Premises and Regen elects to terminate the Sublease, then (1)
Subtenant shall vacate and tender the entire Subleased Premises to Regen on the
Recapture Termination Date, and (2) the term of the Sublease shall terminate on
the Recapture Termination Date as if the Recapture Termination Date had been
originally set forth in the Sublease as the expiration date of the term of the
Sublease.

         9.       MASTER LANDLORD'S OBLIGATIONS. Notwithstanding anything to the
contrary contained in the Sublease (as amended by this Third Amendment), the
following provisions of the Master Lease hereby are incorporated into the
Sublease, except that (i) references to "Landlord" shall mean only Master
Landlord, and (ii) "Landlord's" obligations thereunder shall remain "Master
Landlord Obligations" as defined in Section 20(a) of the Sublease: Paragraphs
3(c), 3(d), 3(e), 3(f) and 3(g): Paragraph 6(a); Paragraph 13; and Paragraph 14.
In the event of a conflict between the provisions of the Master Lease (as
amended by the Prime Lease Amendment), to the extent incorporated into the
Sublease and this Third Amendment, and the provisions of the Sublease as
modified by this Third Amendment, the provisions of the Sublease as modified by
this Third Amendment shall control.

         10.      HAZARDOUS MATERIALS. Attached hereto as Exhibit A is a current
list of Subtenant's Permitted Hazardous Materials and Hazardous Materials Plans.
From time to time after the date of this Third Amendment, but in no event more
than two (2) times during each calendar year, Subtenant may submit a proposed
list of Subtenant's Permitted Hazardous Materials to Regen. Regen shall use
commercially reasonable efforts to promptly approve or disapprove such proposed
list, such approval not to be unreasonably withheld by Regen. In addition, Regen
shall promptly submit such proposed list to Master Landlord and request Master
Landlord's approval of same. Subtenant shall promptly reimburse Regen for all
costs and expenses incurred by Regen as a result of Regen submitting such
proposed list to Master Landlord for review. If Regen and Master Landlord
consent to the proposed list, then provided that Subtenant complies with the
terms of the Master Lease (as incorporated by the Sublease) related to such
Permitted Hazardous Materials, Subtenant shall have the right to bring such
listed materials onto the Subleased Premises. However, until Regen and Master
Landlord approve such proposed list in accordance with the terms of this Third
Amendment, Subtenant shall not have any right to bring any Hazardous Materials
onto the Subleased Premises. Regen shall not be liable or responsible for Master
Landlord's failure to review and/or approve any proposed list of Subtenant's
Permitted Hazardous Materials from Subtenant and if Master Landlord fails to
review or approve such list, the Sublease will continue in full force and effect
without offset or abatement of any sums payable by Subtenant. Notwithstanding
anything to the contrary contained in the Sublease, the Master Lease or this
Third Amendment, Regen shall protect, indemnify, defend upon demand with counsel
reasonably acceptable to Subtenant, and hold harmless Subtenant and its
officers, directors, employees and agents from and against any and all
liabilities, losses, claims, actual out-of-pocket damages (excluding punitive or
consequential damages (i.e., lost profits, lost business opportunity), interest,
penalties, fines, monetary sanctions, attorneys' fees, experts' fees, court
costs, remediation costs, investigation costs, and other expenses arising from
and after the commencement date of the Sublease to the extent

                                       4.

<PAGE>

caused solely by the use, storage, treatment, transportation, release or
disposal of Hazardous Materials on or about the Premises by Regen or Regen's
agents, employees or contractors.

         11.      SECURITY DEPOSIT. Regen and Subtenant acknowledge that as of
the date of this Third Amendment, Regen is holding Subtenant's security deposit
in the amount of $41,290.00. Provided that, as of June 1, 2003, no default on
the part of Subtenant under this Sublease shall then be in existence beyond
applicable notice and cure periods nor shall any default beyond any applicable
notice and cure periods have theretofore occurred, and further provided that,
within the immediately preceding thirty (30) days, Regen shall have reviewed
and, in Regen's reasonable discretion, approved Subtenant's then-most recent
audited financial statements (Subtenant hereby agreeing to deliver audited
financial statements for Subtenant, prepared within sixty (60) days of such
delivery, to Regen with Subtenant's request for Regen's review and approval of
same), Subtenant shall have the right to reduce the amount of the Security
Deposit to the sum of Fifteen Thousand Six Hundred Ninety and 20/100 Dollars
($15,690.20) upon written request to Regen. If all of the aforesaid conditions
are met, Regen shall so reduce the Security Deposit and shall return the excess
funds equal to the difference between the current security deposit and the
reduced security deposit or $25,599.80, to Subtenant within three business of
the date the aforesaid conditions have been met.

         12.      NO OTHER AMENDMENT. Except to the extent expressly set forth
in this Third Amendment, the Sublease remains in full force and effect, without
amendment, in accordance with its terms.

         13.      BROKERS. Each party hereto represents and warrants that it has
dealt with no broker in connection with this Third Amendment and the
transactions contemplated herein between Regen and Subtenant. 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.

         14.      AUTHORIZATION. The undersigned warrant that they have been
authorized and directed to execute this Third Amendment on behalf of their
respective entities.

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

         16.      TITLES. The titles of the sections and subsections of this
Third Amendment are for convenience of reference only and are not to be
considered in construing this Third Agreement.

                            (Signature Page Follows)

                                       5.

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Third
Amendment as of the day and year above written.

                                              REGEN

                                              REGEN BIOLOGICS, INC.,
                                              a Delaware corporation

                                              By: /s/ Brian D. Varidi
                                                  ------------------------------

                                              Name: Brian D. Varidi

                                              Title: SVP and CFO

                                              SUBTENANT

                                              GENITOPE CORPORATION,
                                              a Delaware corporation

                                              By: /s/ Dan W. Denney, Jr.
                                                  ------------------------------

                                              Name: Dan W. Denney, Jr.

                                              Title: CEO

                                       6.

<PAGE>

                                    EXHIBIT A

                         CHEMICAL INVENTORY MAY 12, 2003

Exhibit A

Chemical Inventory May 12, 2003

<TABLE>
<CAPTION>
            REAGENT                                                 MANUFACTURER
----------------------------------------------------------------------------------------
<S>                                                               <C>
"Big Dye"                                                         Applied Biosystems
----------------------------------------------------------------------------------------
0.5 M MgSO4                                                       Genitope
----------------------------------------------------------------------------------------
0.5M EDTA                                                         Genitope
----------------------------------------------------------------------------------------
0.8% LE/TAE/EtBr gel                                              Genitope
----------------------------------------------------------------------------------------
1 M Imidazol                                                      Genitope
----------------------------------------------------------------------------------------
1.2% LE/TAE/EtBr gel                                              Genitope
----------------------------------------------------------------------------------------
1.8% LE/TAE/EtBr gel                                              Genitope
----------------------------------------------------------------------------------------
10 mM Tris Cl                                                     Genitope
----------------------------------------------------------------------------------------
10% Bleach                                                        Genitope
----------------------------------------------------------------------------------------
100 base pair ladder                                              Gibco
----------------------------------------------------------------------------------------
100% Ethanol                                                      Gold Shield
----------------------------------------------------------------------------------------
100% IPA                                                          JT Baker
----------------------------------------------------------------------------------------
1000 base pair ladder                                             Gibco
----------------------------------------------------------------------------------------
100mM CoCl2                                                       Genitope
----------------------------------------------------------------------------------------
10mM GeneAmp dNTP blend                                           Perkin Elmer
----------------------------------------------------------------------------------------
10mM Tris CI                                                      Genitope
----------------------------------------------------------------------------------------
10x Carbonate Buffer                                              Genitope
----------------------------------------------------------------------------------------
10X PCR buffer for Tag                                            Roche
----------------------------------------------------------------------------------------
10X PCR buffer II with MgCI2                                      Perkin Elmer
----------------------------------------------------------------------------------------
10X Sodium Citrate                                                Genitope
----------------------------------------------------------------------------------------
1M CaCI2                                                          Genitope
----------------------------------------------------------------------------------------
1M KCI                                                            Genitope
----------------------------------------------------------------------------------------
1M MgCI2                                                          Genitope
----------------------------------------------------------------------------------------
1M MOPS                                                           Genitope
----------------------------------------------------------------------------------------
1M Na2CO3                                                         Genitope
----------------------------------------------------------------------------------------
1M Na-cacodylic acid in Tris-CI                                   Genitope
----------------------------------------------------------------------------------------
1M NaHCO3                                                         Genitope
----------------------------------------------------------------------------------------
1M TRIS CI ph7.8                                                  Genitope
----------------------------------------------------------------------------------------
1M TRIS CI ph8.0                                                  Genitope
----------------------------------------------------------------------------------------
1M TRIS CI ph8.5                                                  Genitope
----------------------------------------------------------------------------------------
1M NaCI                                                           Mallinckrodt
----------------------------------------------------------------------------------------
1X Trypsin-EDTA Solution                                          Cellgro
----------------------------------------------------------------------------------------
2% BSA/DPBS                                                       Genitope
----------------------------------------------------------------------------------------
2%BSA/PBS                                                         Genitope
----------------------------------------------------------------------------------------
2.2% LE/TAE/EtBr gel                                              Genitope
----------------------------------------------------------------------------------------
2.5% MetaPhore/TBE gel                                            Genitope
----------------------------------------------------------------------------------------
20X MOPS Running Buffer                                           Genitope
----------------------------------------------------------------------------------------
25mM Mg(OAc)2 solution                                            Applied Biosystems
----------------------------------------------------------------------------------------
2-Mercaptaethanol                                                 Sigma
----------------------------------------------------------------------------------------
25mM Dgtp-Na in H2O                                               Genitope
----------------------------------------------------------------------------------------
2 propanol                                                        JT Baker
----------------------------------------------------------------------------------------
3 M NaOAc
----------------------------------------------------------------------------------------
</TABLE>

Exhibit A Sublease 525 Penobscot

                                       1

<PAGE>

Exhibit A

Chemical Inventory May 12, 2003

<TABLE>
<CAPTION>
                REAGENT                                              MANUFACTURER
----------------------------------------------------------------------------------------
<S>                                                               <C>
3 M Sodium Acetate                                                Genitope
----------------------------------------------------------------------------------------
3M Tris                                                           Genitope
----------------------------------------------------------------------------------------
4X SAF                                                            Genitope
----------------------------------------------------------------------------------------
5% Nonfat Milk/DPBS                                               Genitope
----------------------------------------------------------------------------------------
50 base pair ladder                                               Gibco
----------------------------------------------------------------------------------------
50X TAE                                                           Genitope
----------------------------------------------------------------------------------------
5mM CoCl2                                                         Genitope
----------------------------------------------------------------------------------------
5X TBE                                                            Genitope
----------------------------------------------------------------------------------------
5X XL Chelating Buffer                                            Genitope
----------------------------------------------------------------------------------------
5X XL RT buffer for RT-PCR
----------------------------------------------------------------------------------------
70% Ethanol                                                       Genitope
----------------------------------------------------------------------------------------
95% Ethanol                                                       Genitope
----------------------------------------------------------------------------------------
ABTS                                                              Boehringer Mannheim
----------------------------------------------------------------------------------------
ABTS                                                              Bio-Rad
----------------------------------------------------------------------------------------
Acetic Acid, glacial                                              JT Baker
----------------------------------------------------------------------------------------
Acetone                                                           JT Baker
----------------------------------------------------------------------------------------
Acetone                                                           Sigma
----------------------------------------------------------------------------------------
Agar Strips Hycon TC                                              Biotest
----------------------------------------------------------------------------------------
Alcare                                                            Steris
----------------------------------------------------------------------------------------
Algicide                                                          VWR
----------------------------------------------------------------------------------------
Ammonium Acetate                                                  Mallinckrodt
----------------------------------------------------------------------------------------
Ammonium Bifluoride, flake                                        JT Baker
----------------------------------------------------------------------------------------
Ammonium Hydroxide                                                JT Baker
----------------------------------------------------------------------------------------
AmpliTaq with MgCl2 and 10X rxn buffer II                         Perkin Elmer
----------------------------------------------------------------------------------------
Anti-Rat lgG Heavy and Light                                      Calbiochem
----------------------------------------------------------------------------------------
ATCC Mycoplasma Detection Kit
----------------------------------------------------------------------------------------
Azaserine                                                         Sigma
----------------------------------------------------------------------------------------
Bacto Agar                                                        Difco Labs
----------------------------------------------------------------------------------------
Bacto EC Medium                                                   Difco Labs
----------------------------------------------------------------------------------------
Bacto Nzcym broth                                                 Difco Labs
----------------------------------------------------------------------------------------
Bacto Sabouraud Dextrose Agar                                     Difco Labs
----------------------------------------------------------------------------------------
BCA Kit                                                           Pierce
----------------------------------------------------------------------------------------
BCA Protein Assay Kit                                             Pierce
----------------------------------------------------------------------------------------
Bio-Rad Ready Gels                                                Bio-Rad
----------------------------------------------------------------------------------------
BIS TRIS                                                          Sigma
----------------------------------------------------------------------------------------
Bis-Tris                                                          Sigma
----------------------------------------------------------------------------------------
Bleach                                                            Clorox
----------------------------------------------------------------------------------------
Boric Acid Granular                                               JT Baker
----------------------------------------------------------------------------------------
Brilliant Blue R                                                  Sigma
----------------------------------------------------------------------------------------
Brilliant Blue R 250                                              Sigma
----------------------------------------------------------------------------------------
Bromophenol Blue                                                  Sigma
----------------------------------------------------------------------------------------
BSA                                                               Mallinckrodt
----------------------------------------------------------------------------------------
BSA                                                               Hyclone
----------------------------------------------------------------------------------------
Buffer (Biphthalate) pH 4                                         JT Baker
----------------------------------------------------------------------------------------
Buffer (Borate) pH 7                                              JT Baker
----------------------------------------------------------------------------------------
Buffer (Phosphate) pH 10                                          JT Baker
----------------------------------------------------------------------------------------
Buffer C1                                                         Qiagen
----------------------------------------------------------------------------------------
Buffer P1                                                         Qiagen
----------------------------------------------------------------------------------------
</TABLE>

Exhibit A Sublease 525 Penobscot

                                       2

<PAGE>

Exhibit A

Chemical Inventory May 12, 2003

<TABLE>
<CAPTION>
                REAGENT                                             MANUFACTURER
----------------------------------------------------------------------------------------
<S>                                                               <C>
Buffer P3                                                         Qiagen
----------------------------------------------------------------------------------------
Cacodylic Acid                                                    Sigma
----------------------------------------------------------------------------------------
Calcium Chloride Dihydrate                                        EM Science
----------------------------------------------------------------------------------------
CCM-I                                                             Hyclone
----------------------------------------------------------------------------------------
Cell Culture Media                                                Hyclone
----------------------------------------------------------------------------------------
Cellgro-FREE Media                                                Mediatech
----------------------------------------------------------------------------------------
Chloroform                                                        JT Baker
----------------------------------------------------------------------------------------
CiDecon                                                           Decon Labs, Inc.
----------------------------------------------------------------------------------------
Clear Bath Algicide                                               VWR
----------------------------------------------------------------------------------------
Cloned pfu DNA polymerase                                         Stratagene
----------------------------------------------------------------------------------------
Cloned pfu DNA Polymerase rxn buffer                              Stratagene
----------------------------------------------------------------------------------------
Cobalt Chloride                                                   Sigma
----------------------------------------------------------------------------------------
Cobalt Chloride rxn buffer                                        Sigma
----------------------------------------------------------------------------------------
Coomasie Blue Staining Solution                                   Genitope
----------------------------------------------------------------------------------------
Coomassie Plus Protein Assay Reagent                              Pierce
----------------------------------------------------------------------------------------
CyQuant                                                           Molecular Probes
----------------------------------------------------------------------------------------
DEPC                                                              Sigma
----------------------------------------------------------------------------------------
Destaining Solution                                               Genitope
----------------------------------------------------------------------------------------
Dextrose Anhydrous, Powder                                        JT Baker
----------------------------------------------------------------------------------------
dGTP, Na-salt, PCR grade rxn buffer
----------------------------------------------------------------------------------------
Diethyl Pyrocarbonate                                             Sigma
----------------------------------------------------------------------------------------
Dimethy Sulfoxide                                                 Fisher
----------------------------------------------------------------------------------------
DMEM                                                              Cellgro
----------------------------------------------------------------------------------------
DMSO                                                              Gaylord Chemical
----------------------------------------------------------------------------------------
DMSO                                                              Amresco
----------------------------------------------------------------------------------------
DNA H2O                                                           Genitope
----------------------------------------------------------------------------------------
dNTP mix 10mM                                                     Perkin Elmer
----------------------------------------------------------------------------------------
dPBS                                                              Gibco/Cellgro
----------------------------------------------------------------------------------------
Dulbecco's PBS                                                    Cellgro
----------------------------------------------------------------------------------------
EDTA, Disodium Salt, Dehydrate, Crystal                           JT Baker
----------------------------------------------------------------------------------------
EGTA                                                              Sigma
----------------------------------------------------------------------------------------
ELISA Wash Buffer 10X                                             Genitope
----------------------------------------------------------------------------------------
Ethanol (200 proof)                                               Gold Shield
----------------------------------------------------------------------------------------
Ethidium Bromide                                                  Genitope
----------------------------------------------------------------------------------------
Ethylene Glycol                                                   Mallinckrodt
----------------------------------------------------------------------------------------
EZ-Link Sulfo-NHS-LC-Biotin                                       Pierce
----------------------------------------------------------------------------------------
Fetal Bovine Serum (FBS), characterized                           Hyclone
----------------------------------------------------------------------------------------
Fetal Bovine Serum (FBS), dialyzed                                Hyclone
----------------------------------------------------------------------------------------
Ferric Citrate                                                    Sigma
----------------------------------------------------------------------------------------
Ferric Nitrate                                                    Sigma
----------------------------------------------------------------------------------------
Ferrous Sulfate                                                   Sigma
----------------------------------------------------------------------------------------
Ficoll 400                                                        Amersham Pharmacia
----------------------------------------------------------------------------------------
Ficoll-Paque                                                      Amersham Pharmacia
----------------------------------------------------------------------------------------
Fluorescien isothyocyanate                                        Sigma
----------------------------------------------------------------------------------------
Formaldehyde (37%)                                                JT Baker
----------------------------------------------------------------------------------------
FuGENE                                                            Roche
----------------------------------------------------------------------------------------
Fyrite 7% CO2                                                     Bacharach
----------------------------------------------------------------------------------------
Fyrite CO2 indicator refill                                       Bacharach
----------------------------------------------------------------------------------------
</TABLE>

Exhibit A Sublease 525 Penobscot

                                       3

<PAGE>

Exhibit A

Chemical Inventory May 12, 2003

<TABLE>
<CAPTION>
                  REAGENT                                            MANUFACTURER
----------------------------------------------------------------------------------------
<S>                                                               <C>
Gel Drying Solution                                               Invitrogen
----------------------------------------------------------------------------------------
Gel Extraction Kit (buffer EB,QG,PE)                              Qiagen
----------------------------------------------------------------------------------------
Gelatin                                                           Sigma
----------------------------------------------------------------------------------------
GeneAmp 25mM Mn(OAc)2                                             Roche
----------------------------------------------------------------------------------------
Gentamicin                                                        Gibco
----------------------------------------------------------------------------------------
Glucosamine                                                       Sigma
----------------------------------------------------------------------------------------
Glutaraldehyde                                                    Sigma
----------------------------------------------------------------------------------------
Glutaraldehyde (25%)                                              Sigma/JT Baker
----------------------------------------------------------------------------------------
Glycerol                                                          JT Baker
----------------------------------------------------------------------------------------
Glycine                                                           JT Baker
----------------------------------------------------------------------------------------
Goat Anti-Human lgG                                               Biosource
----------------------------------------------------------------------------------------
Goat anti-human lgG gamma chain                                   Biosource
----------------------------------------------------------------------------------------
Goat F(ab')2 anti-human kappa light chain                         Biosource
----------------------------------------------------------------------------------------
Goat F(ab')2 anti-human lambda light antibody                     Biosource
----------------------------------------------------------------------------------------
Growth check, microbial suspensions                               Becton Dickinson?
----------------------------------------------------------------------------------------
Guanidine                                                         Sigma
----------------------------------------------------------------------------------------
Guanidium Isothyocyanate                                          JT Baker
----------------------------------------------------------------------------------------
Hand Soap                                                         SoftCide
----------------------------------------------------------------------------------------
HEPES Free Acid                                                   JT Baker
----------------------------------------------------------------------------------------
Hi Trap Lectin Test Kit                                           Sigma?
----------------------------------------------------------------------------------------
High Pure Plasmid isolation Kit                                   Boehringer Mannheim
----------------------------------------------------------------------------------------
Hightrap G Protein                                                Amersham Pharmacia
----------------------------------------------------------------------------------------
Hightrap SP                                                       Pharmacia Biotech
----------------------------------------------------------------------------------------
Horseradish Peroxidase Avidin D                                   Vector Labs
----------------------------------------------------------------------------------------
Horseradish Peroxidase Substrate Kit                              Bio-Rad
----------------------------------------------------------------------------------------
Human lgC Kappa                                                   Sigma
----------------------------------------------------------------------------------------
Human lgC Lambda                                                  Sigma
----------------------------------------------------------------------------------------
Hybridoma SFM                                                     Invitrogen
----------------------------------------------------------------------------------------
Hydrochloric Acid                                                 JT Baker
----------------------------------------------------------------------------------------
Hydrocyanic Acid                                                  JT Baker
----------------------------------------------------------------------------------------
Hydrogen Peroxide 30%                                             JT Baker
----------------------------------------------------------------------------------------
Hypoxanthine                                                      Sigma
----------------------------------------------------------------------------------------
IEF Anode (lower) buffer                                          Invitrogen
----------------------------------------------------------------------------------------
IEF Cathode Buffer pH 3-10                                        Invitrogen
----------------------------------------------------------------------------------------
IEF Sample Buffer pH 3-10                                         Invitrogen
----------------------------------------------------------------------------------------
Imidazole                                                         Sigma
----------------------------------------------------------------------------------------
Imject Mariculture KLH in PBS                                     Pierce
----------------------------------------------------------------------------------------
IPA                                                               JT Baker
----------------------------------------------------------------------------------------
IPA (100%)                                                        JT Baker
----------------------------------------------------------------------------------------
Isoamyl Alcohols
----------------------------------------------------------------------------------------
Isocetyl Alcohol
----------------------------------------------------------------------------------------
Isopropyl Alcohol (70%)                                           BDG Inc.
----------------------------------------------------------------------------------------
ISP Medium 2                                                      Difco Labs
----------------------------------------------------------------------------------------
Kanamycin                                                         Sigma
----------------------------------------------------------------------------------------
Kappa Control, characterized in-house lgG3 kappa conju            Genitope
----------------------------------------------------------------------------------------
Kappa Standard                                                    Sigma
----------------------------------------------------------------------------------------
Kappa Standard Antibody, characterized in-house purifi            Genitope
----------------------------------------------------------------------------------------
Keyhole Limpet Hemocyanin (KLH)                                   Biosyn
----------------------------------------------------------------------------------------
</TABLE>

Exhibit A Sublease 525 Penobscot

                                       4

<PAGE>

Exhibit A

Chemical Inventory May 12, 2003

<TABLE>
<CAPTION>
                     REAGENT                                          MANUFACTURER
----------------------------------------------------------------------------------------
<S>                                                               <C>
Kinetic Endotoxin Detection LAL Kinetic QCL                       BioWhittaker/Cambrex
----------------------------------------------------------------------------------------
Lactose, monohydrate                                              Sigma
----------------------------------------------------------------------------------------
Laemmli Sample Buffer                                             Biorad
----------------------------------------------------------------------------------------
Lambda Control, Characterized in-house IgG3 lambda co             Genitope
----------------------------------------------------------------------------------------
Lambda Standard                                                   Sigma
----------------------------------------------------------------------------------------
Lambda Standard Antibody, characterized in-house puri             Genitope
----------------------------------------------------------------------------------------
LB Media                                                          Genitope
----------------------------------------------------------------------------------------
L-Glutamine                                                       Cellgro
----------------------------------------------------------------------------------------
Liquid Nitrogen                                                   Liquid Carbonic Indust
----------------------------------------------------------------------------------------
Lithium Chloride, Granular                                        JT Baker
----------------------------------------------------------------------------------------
Loading Dye                                                       Genitope
----------------------------------------------------------------------------------------
LopHene                                                           Fisher
----------------------------------------------------------------------------------------
macro-Prep High Q Support                                         Bio-Rad
----------------------------------------------------------------------------------------
Magnesium Acetate                                                 Sigma
----------------------------------------------------------------------------------------
Magnesium Chloride, 6-Hydrate, Crystal                            JT Baker/Mallinckrodt
----------------------------------------------------------------------------------------
Magnesium Sulfate                                                 JT Baker
----------------------------------------------------------------------------------------
Maltose                                                           Sigma
----------------------------------------------------------------------------------------
Manganese Chloride AR                                             Mallinckrodt
----------------------------------------------------------------------------------------
Mannopyranoside                                                   Sigma
----------------------------------------------------------------------------------------
MEM Amino Adds                                                    Cellgro
----------------------------------------------------------------------------------------
Mercaptoethanol                                                   Sigma
----------------------------------------------------------------------------------------
MetaPhor Agarose                                                  FMC Bioproducts
----------------------------------------------------------------------------------------
Methanol                                                          JT Baker
----------------------------------------------------------------------------------------
Methotrexate                                                      in house
----------------------------------------------------------------------------------------
Methvl Mannopyranoside                                            Sigma
----------------------------------------------------------------------------------------
MilliQH20                                                         Genitope
----------------------------------------------------------------------------------------
Molecular weight Standard                                         BioRad
----------------------------------------------------------------------------------------
Monoethanolamine                                                  JT Baker
----------------------------------------------------------------------------------------
MOPS                                                              Sigma
----------------------------------------------------------------------------------------
Mycoplasma Kit                                                    ATCC
----------------------------------------------------------------------------------------
NaCl, 0.9%                                                        Abbott
----------------------------------------------------------------------------------------
NanoOrange Protein Kit                                            Molecular Probes
----------------------------------------------------------------------------------------
NaOH (0.1, 1, 10 N)                                               JT Baker
----------------------------------------------------------------------------------------
Nickel Sulfate                                                    Sigma
----------------------------------------------------------------------------------------
Ni-NTA Agarose                                                    Qiagen
----------------------------------------------------------------------------------------
Ni-NTA Resin                                                      Qiagen
----------------------------------------------------------------------------------------
NiSieve GTG Agarose                                               FMC Bioproducts
----------------------------------------------------------------------------------------
Nonfat Dry Milk                                                   Nestle
----------------------------------------------------------------------------------------
NuPAGE Bis-Tris gels 4-12%                                        Invitrogen
----------------------------------------------------------------------------------------
NuPAGE Bis-Tris Gels, 4-12%                                       Novex
----------------------------------------------------------------------------------------
NuPAGE MES SDS Running Buffer                                     Invitrogen
----------------------------------------------------------------------------------------
NuPAGE MOPS SDS Running Buffer                                    Invitrogen
----------------------------------------------------------------------------------------
NuPAGE Sample Reducing Agent                                      Novex
----------------------------------------------------------------------------------------
NuPAGE Transfer Buffer                                            Invitrogen
----------------------------------------------------------------------------------------
NuPAGE Tris-Acetate Gels, 3.8%                                    Novex
----------------------------------------------------------------------------------------
NuSieve GTG agarose                                               FMC Bioproducts
----------------------------------------------------------------------------------------
O-Syl                                                             National Lab
----------------------------------------------------------------------------------------
PBS                                                               Cellgro
----------------------------------------------------------------------------------------
</TABLE>

Exhibit A Sublease 525 Penobscot

                                       5

<PAGE>

Exhibit A

Chemical Inventory May 12, 2003

<TABLE>
<CAPTION>
                      REAGENT                                         MANUFACTURER
----------------------------------------------------------------------------------------
<S>                                                               <C>
PCR Purification Kit (buffer EB,PB,PE)                            Qiagen
----------------------------------------------------------------------------------------
Pepsin                                                            Mallinckrodt
----------------------------------------------------------------------------------------
Phenol, equilibrated                                              Sigma
----------------------------------------------------------------------------------------
Phosphate Buffered Saline (PBS)                                   Cellgro
----------------------------------------------------------------------------------------
Phosphoric Acid                                                   JT Baker
----------------------------------------------------------------------------------------
Pluronic L 121                                                    BASF
----------------------------------------------------------------------------------------
Polyoxyethylenesorbital Monolaurate                               Sigma
----------------------------------------------------------------------------------------
Polysorbate 80                                                    Mallinckrodt
----------------------------------------------------------------------------------------
Potassium Acetate, granular                                       JT Baker
----------------------------------------------------------------------------------------
Potassium Chloride, Crystal                                       JT Baker
----------------------------------------------------------------------------------------
Potassium Hydroxide, Pellets                                      JT Baker
----------------------------------------------------------------------------------------
Potassium Phosphate                                               Mallinckrodt
----------------------------------------------------------------------------------------
Precast Polyacrilamide Gel (Mini)                                 Invitrogen
----------------------------------------------------------------------------------------
Pre-diluted Protein Assay (BGG)                                   Pierce
----------------------------------------------------------------------------------------
Protein A Elution Buffer                                          Genitope
----------------------------------------------------------------------------------------
Protein A Wash Buffer                                             Genitope
----------------------------------------------------------------------------------------
Protein G Column                                                  Amersham Pharmacia
----------------------------------------------------------------------------------------
Protein G Sepharose for Fast Flow                                 Amersham Pharmacia
----------------------------------------------------------------------------------------
Pyrosperse                                                        BioWhittaker
----------------------------------------------------------------------------------------
Qiagen Protease                                                   Qiagen
----------------------------------------------------------------------------------------
QlAquick PCR Purification Kit                                     Qiagen
----------------------------------------------------------------------------------------
Quanti-cult                                                       Chrisope Technologies
----------------------------------------------------------------------------------------
RNA H2O                                                           Genitope
----------------------------------------------------------------------------------------
RNAzol B                                                          Tel-test, Inc.
----------------------------------------------------------------------------------------
RNeasy Maxi Kit                                                   Qiagen
----------------------------------------------------------------------------------------
RNeasy Midi Kit                                                   Qiagen
----------------------------------------------------------------------------------------
RNeasy Mini Kit                                                   Qiagen
----------------------------------------------------------------------------------------
Robane                                                            VWR
----------------------------------------------------------------------------------------
RO Water                                                          Genitope
----------------------------------------------------------------------------------------
RPMI 1640                                                         Cellgro
----------------------------------------------------------------------------------------
rTth DNA polymerase with buffer pack                              Perkin Elmer
----------------------------------------------------------------------------------------
rTth XL DNA polymerase with buffer pack                           Perkin Elmer
----------------------------------------------------------------------------------------
Sabouraud Dextrose Agar w/ Lecithin and Polysorbate 8             Becton Dickinson
----------------------------------------------------------------------------------------
Saline (0.9%)                                                     Abbott
----------------------------------------------------------------------------------------
Sargramostim Leukine                                              Immunex
----------------------------------------------------------------------------------------
SeaKem LE Agarose                                                 BioWhittaker
----------------------------------------------------------------------------------------
SeaPlaque GTG Agarose                                             FMC Bioproducts
----------------------------------------------------------------------------------------
SeaPlaque GTG Agarose                                             FMC Bioproducts
----------------------------------------------------------------------------------------
SFX-MAB                                                           Hyclone
----------------------------------------------------------------------------------------
Silver Nitrate                                                    Invritrogen
----------------------------------------------------------------------------------------
Silver Xpress Silver Staining Kit                                 Invritrogen
----------------------------------------------------------------------------------------
Sodium Acetate, Trihydrate, Crystal                               JT Baker
----------------------------------------------------------------------------------------
Sodium Azide                                                      JT Baker
----------------------------------------------------------------------------------------
Sodium Bicarbonate, Powder                                        JT Baker
----------------------------------------------------------------------------------------
Sodium Carbonate, Anyhdrous, Granular                             JT Baker
----------------------------------------------------------------------------------------
Sodium Carbonate, Monohydrate, Crystal                            JT Baker
----------------------------------------------------------------------------------------
Sodium Chloride, Crystals                                         EM Science
----------------------------------------------------------------------------------------
Sodium Citrate, Dihydrate, Granular                               JT Baker
----------------------------------------------------------------------------------------
</TABLE>

Exhibit A Sublease 525 Penobscot

                                       6

<PAGE>

Exhibit A

Chemical Inventory May 12, 2003

<TABLE>
<CAPTION>
                     REAGENT                                         MANUFACTURER
----------------------------------------------------------------------------------------
<S>                                                               <C>
Sodium Dodecyl Sulfate                                            JT Baker/Bio-Rad
----------------------------------------------------------------------------------------
Sodium Hydroxide                                                  JT Baker
----------------------------------------------------------------------------------------
Sodium Nitroprusside                                              Sigma
----------------------------------------------------------------------------------------
Sodium Phosphate, Dibasic, 7-Hydrate, Crystal                     JT Baker
----------------------------------------------------------------------------------------
Sodium Phosphate, Monobasic, Monohydrate, Crystal                 JT Baker
----------------------------------------------------------------------------------------
Sodium Pyruvate                                                   Cellgro
----------------------------------------------------------------------------------------
Superblock Blocking Buffer in PBS                                 Pierce
----------------------------------------------------------------------------------------
TE Buffer                                                         Genitope
----------------------------------------------------------------------------------------
Terminal Transferase                                              Boehringer Mannheim
----------------------------------------------------------------------------------------
TFBI                                                              Genitope
----------------------------------------------------------------------------------------
TFBII                                                             Genitope
----------------------------------------------------------------------------------------
Thymidine                                                         Sigma
----------------------------------------------------------------------------------------
TMB Microwell Peroxidase substrate                                Kirkegaard and Perry L
----------------------------------------------------------------------------------------
Trace Klean                                                       Beckman
----------------------------------------------------------------------------------------
Tricine                                                           Sigma
----------------------------------------------------------------------------------------
Tris Base                                                         EM Science or JT Baker
----------------------------------------------------------------------------------------
TRIS Hydrochloride                                                JT Baker/EM Science
----------------------------------------------------------------------------------------
Tris-Base                                                         Genitope
----------------------------------------------------------------------------------------
Triton X-100                                                      JT Baker
----------------------------------------------------------------------------------------
Trypan blue                                                       Sigma
----------------------------------------------------------------------------------------
Trypsin                                                           Cellgro
----------------------------------------------------------------------------------------
Tryptic Soy Broth                                                 Difco Labs
----------------------------------------------------------------------------------------
Trypticase Soy Agar                                               Becton Dickinson
----------------------------------------------------------------------------------------
Trypticase Soy Agar Plates                                        Becton Dickinson
----------------------------------------------------------------------------------------
Trypticase Soy Agar Slants                                        Becton Dickinson
----------------------------------------------------------------------------------------
Tryptone Peptone                                                  Difco Labs
----------------------------------------------------------------------------------------
Uridine                                                           Sigma
----------------------------------------------------------------------------------------
WFI                                                               Abbott?
----------------------------------------------------------------------------------------
Yeast Extract                                                     Difco Labs
----------------------------------------------------------------------------------------
Zero Blunt TOPO PCR Cloning Kit                                   Invitrogen
----------------------------------------------------------------------------------------
</TABLE>

Exhibit A Sublease 525 Penobscot

                                       7<PAGE>

                                                                   EXHIBIT 10.10

                                      LEASE

                       METROPOLITAN LIFE INSURANCE COMPANY
                             A New York corporation

                                   As Landlord

                                       and

                                 REGEN BIOLOGICS
                             A Delaware corporation

                                    As Tenant

                                 SEAPORT CENTRE
                            REDWOOD CITY, CALIFORNIA

<PAGE>

                                      LEASE

                  THIS LEASE is made as of April 10, 1996 by and between
METROPOLITAN LIFE INSURANCE COMPANY, a New York corporation ("Landlord"), and
REGEN BIOLOGICS, a Delaware corporation ("Tenant").

                             BASIC LEASE PROVISIONS

         1. PREMISES LOCATION: Building 12; Suite 545; Phase II of Seaport
Centre; Penobscot Drive, Redwood City, California 94063.

         2. [Intentionally deleted because not incorporated into Sublease.]

         3. [Intentionally deleted because not incorporated into Sublease.]

         4. [Intentionally deleted because not incorporated into Sublease.]

         5. [Intentionally deleted because not incorporated into Sublease.]

         6. [Intentionally deleted because not incorporated into Sublease.]

         7. [Intentionally deleted because not incorporated into Sublease.]

         8. [Intentionally deleted because not incorporated into Sublease.]

         9. [Intentionally deleted because not incorporated into Sublease.]

         10. [Intentionally deleted because not incorporated into Sublease.]

         11. [Intentionally deleted because not incorporated into Sublease.]

         12. [Intentionally deleted because not incorporated into Sublease.]

         13.      SOLE PERMITTED USE: General office, research and development,
laboratory use, storage, light manufacturing and

<PAGE>
assembly; however, in no event in violation of any provision of any rules and
regulations for the Project.

         14. [Intentionally deleted because not incorporated into Sublease.]

                  IN WITNESS WHEREOF, the parties hereto have executed this
Lease, consisting of the foregoing Basic Lease Provisions and Paragraphs I
through 47 which follow, together with the attached Addendum to Office Lease,
Construction Addendum and Exhibits A through C inclusive, incorporated herein by
this reference, as of the date first above written. The foregoing Basic Lease
Provisions are an integral part of this Lease; however, in the event of any
conflict between any Basic Lease Provision and the balance of this Lease, the
latter shall control.

LANDLORD:

METROPOLITAN LIFE INSURANCE COMPANY,
a New York corporation

By: /s/ Assistant General Counsel
    -----------------------------
Its: Assistant General Counsel

TENANT:

REGEN BIOLOGICS,

A Delaware corporation

By: /s/ James T. McKinley
    ----------------------------
Its: President and CEO

<PAGE>

                             LEASE OF PREMISES; TERM

PARAGRAPH 1

         (a) [Intentionally deleted because not incorporated into Sublease.]

         (b) [Intentionally deleted because not incorporated into Sublease.]

         (c) [Intentionally deleted because not incorporated into Sublease.]

                BASIC ANNUAL RENT AND RENT-ADJUSTMENTS

PARAGRAPH 2

         (a) [Intentionally deleted because not incorporated into Sublease.]

         (b) [Intentionally deleted because not incorporated into Sublease.]

         (c) [Intentionally deleted because not incorporated into Sublease.]

                            ADDITIONAL RENT

PARAGRAPH 3

         (a) [Intentionally deleted because not incorporated into Sublease.]

         (b) [Intentionally deleted because not incorporated into Sublease.]

         (c) [Intentionally deleted because not incorporated into Sublease.]

         (d) [Intentionally deleted because not incorporated into Sublease.]

         (e) [Intentionally deleted because not incorporated into Sublease.]

         (f) [Intentionally deleted because not incorporated into Sublease.]

                                  1.
<PAGE>

         (g) [Intentionally deleted because not incorporated into Sublease.]

         (h) [Intentionally deleted because not incorporated into Sublease.]

                                SECURITY DEPOSIT

PARAGRAPH 4

         [Intentionally deleted because not incorporated into Sublease..]

                              SUBSTITUTED PREMISES

PARAGRAPH 5 - Intentionally Omitted.

                                     REPAIRS

PARAGRAPH 6

         (a)      [Intentionally deleted because not incorporated into
Sublease.]

         (b)      Tenant's Repairs. Tenant shall, at Tenant's sole cost and
expense, make all repairs to the Premises and fixtures therein which Landlord is
not required to make pursuant to Paragraph 6(a) above, including, without
limitation, repairs to the interior walls, ceilings and windows of the Premises,
the interior doors, Tenant's signage, and the electrical, life-safety, plumbing
and heating, ventilation and air conditioning systems located within or serving
the Premises and shall maintain the Premises, the fixtures and utilities systems
therein, and the area immediately surrounding the Premises (including all
garbage enclosures), in a good, clean and safe condition. Tenant shall deliver
to Landlord a copy of any maintenance contract entered into by Tenant with
respect to the Premises. Tenant shall also, at Tenant's expense, keep any
nonstandard heating, ventilating and air conditioning equipment and other
non-standard equipment in the Building in good condition and repair, using
contractors approved in advance, in writing, by Landlord. Notwithstanding
Paragraph 6(a) above, Tenant will pay for any repairs to the Building or the
Project which are caused by any negligence or carelessness of Tenant or its
assignees, subtenants or employees, or of the respective agents of any of the
foregoing persons, or of any other persons permitted in the Building or
elsewhere in the Project by Tenant

                                       2.
<PAGE>

or any of them. Tenant will maintain the Premises, and will leave the Premises
upon termination of this Lease, in a safe, clean, neat and sanitary condition.

                          IMPROVEMENTS AND ALTERATIONS

PARAGRAPH 7

         (a)      [Intentionally deleted because not incorporated into
Sublease.]

         (b)      Alterations.

                  (1)      Tenant shall not make any alterations, additions, or
improvements of or to the Premises (collectively "Alterations") without the
prior written consent of Landlord, which consent shall not be unreasonably
withheld. At the time such consent is requested, Tenant shall furnish to
Landlord for Landlord's written approval (which shall not be unreasonably
withheld) the names of Tenant's architect, Tenant's contractor(s) and all
subcontractors who will be supplying materials or performing work in connection
with such Alterations, a copy of all plans for the proposed work, an estimate of
the cost thereof and such other information as shall be requested by Landlord
substantiating Tenant's ability to pay for such work. No less than ten (10) days
prior to the commencement of any Alterations, Tenant shall deliver to Landlord
certificates of insurance from the carrier(s) providing insurance to Tenant's
architect and Tenant's contractor(s) evidencing the following types of coverage
in such amounts as are reasonably determined by Landlord to be necessary: (i)
professional liability insurance; (ii) commercial general liability insurance;
(iii) business automobile liability insurance; (iv) workers' compensation
insurance; and (v) umbrella liability insurance. The insurance specified in (i),
(ii), (iii) and (v) above shall name Landlord as an additional insured, and all
such policies shall provide that thirty (30) days' written notice must be given
to Landlord prior to termination or cancellation. Landlord, at its sole option,
may require as a condition to the granting of such consent to any work costing
in excess of $20,000 that Tenant provide to Landlord, at Tenant's sole cost and
expense, a lien and completion bond in an amount equal to one and one-half
(1-1/2) times any and all estimated costs of the proposed work, to insure
Landlord against any liability for mechanics' and materialmen's liens and to
insure completion of the work. Landlord may also require as a condition to
Landlord's consent

                                       3.
<PAGE>

to any Alterations pursuant to this Paragraph 7(b) that, following completion of
any such Alterations, Tenant shall provide Landlord with unconditional waivers
of lien in statutory form from all parties performing labor and/or supplying
equipment and/or materials in connection with such Alterations, including
Tenant's architect(s). Before commencing any work, Tenant shall give Landlord at
least ten (10) days written notice of the proposed commencement of such work in
order to give Landlord an opportunity to prepare, post and record such notice as
may be permitted by law to protect Landlord's interest in the Premises and the
Building from mechanics' and materialmen's liens. Within a reasonable period
following completion of any work, Tenant shall furnish to Landlord, at Tenant's
cost, "as built" plans showing the changes made to the Premises including one
(1) complete set of reproducible drawings for the entire Premises (including,
but not limited to, a floor plan, HVAC, plumbing, electrical and reflected
ceiling), including such Alterations. Notwithstanding anything in the foregoing
to the contrary, Tenant may perform certain Tenant's Alterations that do not
affect the structural integrity of the Building and which do not cost greater
than Twenty Thousand Dollars ($20,000) in the aggregate in any twelve (12) month
period without the requirement of obtaining Landlord's prior consent; provided
that the right to perform such Alterations is personal to Regen Biologics, a
Delaware corporation, and any Permitted Transferee (as defined in Paragraph 15
(i) hereof), and may not be exercised by, and shall not be transferable or
assignable (voluntarily or involuntarily) to, any person or entity; and further
provided that Tenant shall give Landlord notice prior to the commencement of
such Alterations. Landlord reserves the right to deny any Contractor or
Subcontractor entry to the Building but Landlord's failure to exercise this
right shall not be deemed an approval of either the financial stability or
quality of workmanship of any such Contractor or Subcontractor.

                  (2)      All such Alterations shall be made at Tenant's sole
expense (including, without limitation, the reasonable cost of any review of
Tenant's plans by Landlord's architect and/or Landlord's engineer) and in
conformity with plans therefor approved by Landlord in writing prior to the
commencement of such work, and such work shall be performed by a contractor(s)
approved by Landlord. All work performed by Tenant shall comply with the laws,
rules, orders, directions, regulations and requirements of all governmental
entities having jurisdiction over such work and shall comply with the rules,
orders, directions, regulations and requirements of any nationally recognized
board of insurance underwriters. Tenant shall use

                                       4.
<PAGE>

all commercially reasonable efforts (including, without limitation, scheduling
overtime and weekend work) not to interfere with other tenants in the Building
and the Project when performing any Alterations. All such alterations,
additions' or improvements (except movable furniture, furnishings and trade
fixtures) shall, at Landlord's option, become the property of Landlord and shall
be surrendered with the Premises, as a part thereof, at the expiration or
earlier termination of the Term. Upon any termination of this Lease, Tenant
shall, upon demand by Landlord and at Tenant's sole expense, immediately remove
any Alterations installed at the Premises and Tenant shall repair and restore
the Premises to their original condition, reasonable wear and tear excepted. Any
personal, property left on the Premises at the expiration or other termination
of this Lease may, at the option of Landlord, either be deemed abandoned or be
placed in storage at a public warehouse in the name of and for the account of
and at the expense and risk of Tenant or otherwise disposed of by Landlord in
the manner provided by law; or, alternatively, in the event that Tenant leaves
personal property on the Premises following the expiration or other termination
of this Lease, Landlord may, in Landlord's sole and absolute discretion, deem
Tenant to be holding over pursuant to the terms of Paragraph 26 below. Tenant
expressly releases Landlord of and from any and all claims and liability for
damage to or destruction or loss of property left by Tenant upon the Premises at
the expiration or other termination of this Lease and, to the extent permitted
by then applicable law, Tenant shall protect, indemnify, defend and hold
Landlord harmless from and against any and all claims and liability with respect
thereto.

                  (3)      Removal of Alterations. At the time that Landlord
gives Tenant Landlord's consent to any proposed Alterations, or if Landlord's
consent is not required, at the time that Tenant notifies Landlord in writing of
Tenant's intention to commence Alterations, Landlord shall notify Tenant in
writing whether Landlord will require Tenant to remove such Alterations
("Tenant's Alterations") or whether Landlord will require that such Alterations
remain at the Premises ("Landlord's Alterations"). Landlord shall have a
reasonable time to decide whether any particular Alteration shall be a
Landlord's Alteration or a Tenant's Alteration. In the event that, due to a
failure of either Landlord or Tenant to comply with the provisions hereof,
Landlord does not indicate in writing whether any particular Alteration shall be
a Landlord's Alteration or a Tenant's Alteration, such Alteration shall be
deemed to be a Tenant's Alteration. All Tenant's Alterations

                                       5.
<PAGE>

shall be removed by Tenant upon the expiration or early termination of this
Lease, and Tenant shall repair and restore the Premises to the condition
existing immediately before such removal, reasonable wear and tear excepted. If,
upon the request of Landlord, Tenant does not remove all Alterations and
property of Tenant (excluding Landlord's Alterations), Landlord may remove them
and Tenant shall pay the expense of such removal to Landlord upon demand. All
Landlord's Alterations shall become the property of Landlord and shall remain
upon the Premises at the expiration or early termination of this Lease without
compensation, allowance or credit to Tenant. [Last sentence intentionally
deleted because not incorporated into Sublease.]

                                      LIENS

PARAGRAPH 8

         Tenant shall keep the Premises free from any liens arising out of any
work performed, materials furnished or obligations incurred by or for Tenant,
its assignees or sublessees. In the event that Tenant shall not, within ten (10)
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 such lien to be released by such means as Landlord shall
deem proper, including payment of or defense against the claim giving rise to
such lien. All sums paid by Landlord and all expenses incurred by it in
connection therewith shall create automatically an obligation of Tenant to pay
an equivalent amount to Landlord as rent on Landlord's demand therefor, together
with interest at the maximum rate per annum then permitted by law until paid to
Landlord. Nothing herein shall imply any consent by Landlord to subject
Landlord's estate to liability under any mechanics, or other lien law.

         Tenant shall give Landlord adequate opportunity, and Landlord shall
have the right at all times, to post such notices of nonresponsibility as are
provided for in the mechanics, lien laws of California.

                                 USE OR PREMISES

PARAGRAPH 9

                                       6.
<PAGE>

         (a)      Compliance with Law. Tenant shall use the Premises only as set
forth in Item 13 of the Basic Lease Provisions and shall not use or permit the
Premises to be used for any other purpose. Tenant shall not use or occupy the
Premises in violation of any law or of the certificate of occupancy issued for
the Building and shall, upon five (5) days' written notice from Landlord,
discontinue any use of the Premises which is declared by any governmental
authority having jurisdiction to be a violation of law or of such certificate of
occupancy. Tenant shall comply with any direction of any governmental authority
having jurisdiction which shall, by reason of the nature of Tenant's use or
occupancy of the Premises, impose any duty upon Tenant or Landlord with respect
to the Premises or with respect to the use or occupancy thereof (collectively
"Legal Requirements"). Tenant shall comply with all covenants, conditions and
restrictions affecting the Project, as such may be amended, from time to time,
and all articles, bylaws and rules of the Seaport Centre Owners' Association.
Tenant shall be responsible for obtaining all necessary governmental approvals
in connection with Tenant's use of the Premises. Tenant shall not do or permit
to be done anything which will invalidate, or increase the cost of, any fire,
extended coverage or other insurance policy covering any part of the Project or
any property located thereon. Notwithstanding the provisions of Paragraph 3
above, Tenant shall, within ten (10) days following Landlord's demand, reimburse
Landlord for the full amount of any additional premium charged for any such
policy by reason of Tenant's failure to comply with the provisions of this
Paragraph 9(a), it being understood that such demand for reimbursement shall not
be Landlord's exclusive remedy. Tenant shall not in any way obstruct or
interfere with the rights of other tenants or occupants of the Building or the
Project, or injure or annoy them, or use or allow the Premises to be used for
any improper, immoral, unlawful or objectionable purpose; nor shall Tenant
cause, maintain or permit any nuisance in, on or about the Premises or commit or
suffer to be committed any waste in or upon the Premises. Notwithstanding
anything to the contrary contained herein, Tenant shall not be required to (a)
make any alterations or structural changes to the Premises, including but not
limited to the electrical, mechanical., or plumbing systems of the Building
unless such work is required as a result of Tenant's specific use of the
Premises, Tenant's acts or improvements made by Tenant, and is not generally
applicable to the Building or Project, other tenants in the Building and
Project, or office tenants in general, and (b) undertake any work necessitated
by defects in the construction of the Building. Landlord shall comply in a
timely fashion with all

                                       7.
<PAGE>

Legal Requirements that are not Tenant's responsibility under this paragraph to
the extent noncompliance would adversely affect Tenant's use and occupancy of
the Premises.

         (b)      Hazardous Materials. Tenant shall not use, generate,
manufacture, produce, store, release, discharge, or dispose of, on, under or
about the Premises or any part of the Project, or transport to or from the
Premises or any part of the Project, any Hazardous Material (as defined below)
or allow its employees, agents, contractors, licensees, invitees or any other
person or entity to do so.

                  (1)      Notwithstanding the foregoing, Tenant or any
Permitted Transferee with a net worth equal to or better than Tenant's as of the
Commencement Date, as defined in Paragraph 15(i) below, or alternatively
provides Landlord with a lease guaranty from a guarantor acceptable to Landlord
in Landlord's good faith discretion, shall be permitted to use and store in, and
transport to and from, the Premises the Hazardous Materials identified on
Exhibit D hereto and by this reference incorporated herein ("Permitted Hazardous
Materials") so long as: (a) each of the Permitted Hazardous Materials is used or
stored in, or transported to and from, the Premises only to the extent necessary
for Tenant's operation of its business at the Premises; (b) at no time shall any
Permitted Hazardous Material be on, under or about the Premises in excess of the
quantity specified therefor in Exhibit D; and (c) the conditions set forth in
this Paragraph 9(b) are strictly complied with. The right to use and store in,
and transport to and from, the Premises the Permitted Hazardous Materials is
personal to Regen Biologics and may not be assigned or otherwise transferred by
Regen Biologics without the prior written consent of Landlord, which consent may
be withheld in Landlord's sole discretion. Any consent by Landlord pursuant to
Paragraph 15 of this Lease to an assignment, transfer, subletting, mortgage,
pledge, hypothecation or encumbrance of this Lease, and any interest therein or
right or privilege appurtenant thereto, shall not constitute consent by Landlord
to the use or storage in, or transportation to, the Premises of any Hazardous
Material (including a Permitted Hazardous Material) by any such assignee,
sublessee or transferee unless Landlord expressly agrees otherwise in writing.
Any consent by Landlord to the use or storage in, or transportation to or from
the Premises, of any Hazardous Material (including a Permitted Hazardous
Material) by an assignee, sublessee or transferee of Tenant shall not constitute
a waiver of Landlord's right to refuse such consent as to any subsequent
assignee or transferee.

                                       8.
<PAGE>

                  (2)      Tenant shall comply with and shall cause Tenant's
employees, agents, contractors, licensees and invitees (collectively, "Tenant's
Agents") to comply with, and shall keep and maintain the Premises and cause
Tenant's Agents to keep and maintain the Premises, in compliance with all
Environmental Laws (as defined below). Neither Tenant nor Tenant's Agents shall
violate, or cause or permit the Premises to be in violation of, any
Environmental Laws.

                           Tenant shall, at its own expense prior to Tenant's
use and occupancy, procure, maintain in effect and comply with all conditions of
any and all permits, licenses and other governmental and regulatory approvals
required for Tenant's use of the Premises. Tenant shall cause any and all
Hazardous Materials removed from the Premises to be removed and transported
solely by duly licensed handlers to duly licensed facilities for final disposal
of such materials and wastes. Tenant acknowledges that the sewer piping at the
Project is made of ABS plastic. Accordingly, without Landlord's prior written
consent, which may be given or withheld in Landlord's sole discretion, only
ordinary domestic sewage is permitted to be put into the drains at the Premises.
UNDER NO CIRCUMSTANCES SHALL TENANT EVER DEPOSIT ANY ESTERS OR KETONES (USUALLY
FOUND IN SOLVENTS TO CLEAN UP PETROLEUM PRODUCTS) IN THE DRAINS AT THE PREMISES.
If Tenant desires to put any substances other than ordinary domestic sewage into
the drains, it shall first submit to Landlord a complete description of each
such substance, including its chemical composition, and a sample of such
substance suitable for laboratory testing. Landlord shall promptly determine
whether or not the substance can be deposited into the drains and its
determination shall be absolutely binding on Tenant. Upon demand, Tenant shall
reimburse Landlord for expenses incurred by Landlord in making such
determination. If any substances not so approved hereunder are deposited in the
drains in Tenant's Premises, Tenant shall be liable to Landlord for all damages
resulting therefrom, including, but not limited to, all costs and expenses
incurred by Landlord in repairing or replacing the piping so damaged.

                           Tenant agrees to provide Landlord with: (a) a copy of
any hazardous material management plan or similar document required by any
federal, state or local governmental or regulatory authority to be submitted by
Tenant; (b) copies of all permits, licenses and other governmental and
regulatory approvals with respect to the use of Hazardous Materials; (c) copies
of hazardous waste manifests reflecting the legal and proper disposal of all
Hazardous Materials removed from the

                                       9.
<PAGE>

Premises; and (d) copies of all reports, studies and written results of tests or
inspections concerning the Premises or any part of the Project with respect to
Hazardous Materials, including, without limitation, the "Plans" hereinafter
defined (collectively "Documents"). Tenant shall deliver all Documents to
Landlord promptly following the earlier of (i) Tenant's submission of such
Documents to the requesting governmental agency, or (ii) Tenant's receipt of
such Documents (Tenant hereby agreeing that it shall exercise diligent efforts
to expeditiously obtain copies of any such Documents known by Tenant to exist).
Landlord shall keep the Documents confidential to Landlord unless disclosure is
required by any Federal or State law, or any local ordinance; provided, however,
Landlord may share relevant information with Landlord's architect, environmental
consultant or any third party deemed by Landlord, in its sole discretion,
essential to receive such information. Landlord will comply with all applicable
laws regarding disclosure of environmental contamination.

                  (3)      Upon commencing any activity involving Hazardous
Materials on the Premises, and continuing thereafter throughout the term of this
Lease, Tenant shall initiate and maintain the systems set forth in the following
(collectively, "Plans") in order to ensure the routine monitoring of the levels
of Hazardous Materials which may be present on, under or about the Premises or
any part of the Project or properties adjoining or in the vicinity of the
Project as the result of the activities of Tenant or Tenants Agents and to
ensure continued compliance with the procedures and regulations concerning the
handling, storage, use and disposal of Hazardous Materials: (a) each permit,
license or other governmental or regulatory approval with respect to the use of
Hazardous Materials, (b) each Hazardous Materials management plan or similar
document required by any federal, state, or local governmental or regulatory
entity, (c) each plan for handling and disposing of Hazardous Materials
necessary to comply with Environmental Laws prepared by or on behalf of Tenant
or Tenant's Agents (whether or not required to be submitted to a governmental
agency). Copies of the foregoing described Plans are listed on Exhibit E.

                  (4)      Not less often than once every twelve (12) months
during the term of this Lease, Tenant shall provide Landlord with a written
report which shall set forth the results of the monitoring of Hazardous
Materials during the previous calendar quarter. Landlord may elect (but shall
not be obligated) to retain an independent consultant experienced in the use and
management of Hazardous Materials for the purpose of reviewing

                                       10.
<PAGE>

any information received by Landlord in connection with Hazardous Materials.
Pursuant to such review, and to the extent there is a violation of law and/or a
permit violation, Landlord's consultant may make recommendations in connection
with Tenant's control of Hazardous Materials on the Premises, and Tenant shall
implement, at Tenant's sole cost, the reasonable recommendations of Landlord's
consultant to the extent such action is desirable or necessary to comply with
Environmental Laws designed to prevent a release of environmental materials.
Landlord's failure to appoint any consultant shall not relieve Tenant of any of
Tenant's obligations under this Lease relating to Hazardous Materials nor
constitute a waiver of Landlord's rights under this Lease.

                  (5)      Landlord may install permanent or other testing wells
or devices at or about the Premises or any part of the Project, and may cause
the ground water to be tested to detect the presence of Hazardous Materials it
least once every twelve (12) months during the term of this Lease by the use of
such wells or devices as are then customarily used for such purposes. If Tenant
so requests in writing, Landlord shall supply Tenant with a copy of any such
test results. The costs of any such tests, and the installation, maintenance,
repair, removal, closure and replacement of such wells or devices shall be an
operating Expense pursuant to Paragraph 3 of this Lease; provided, however, such
costs shall be borne solely by Tenant if the same are incurred by Landlord based
upon Landlord's reasonable belief, at the time such testing is initiated, that
Tenant is in breach of its obligations under this Paragraph 9(b) or if,
following the initiation of such testing, the presence of Hazardous Materials is
detected and Tenant or Tenant's Agents are responsible therefor. Tenant's
obligations under this Paragraph 9(b)(5) shall survive the expiration or earlier
termination of this Lease.

                  (6)      Landlord and its representative shall have the right,
at the following times, to enter the Premises and to: (i) conduct any testing,
monitoring and analysis for Hazardous Materials; (ii) review any documents,
materials, inventory, financial data or notices or correspondence to or from
private parties or governmental or regulatory authorities in connection
therewith; and (iii) review all storage, use, transportation and disposal
facilities and procedures associated with the storage, use, transportation and
disposal of Hazardous Materials (collectively, "Inspection"):

                           a.       Once every three months for the first twelve
(12) months after the later of the date Tenant introduces

                                       11.
<PAGE>

Hazardous Materials to the Premises pursuant to this Paragraph 9(b) or notifies
Landlord of such use, and once every twelve (12) months thereafter throughout
the term of this Lease. Tenant agrees to notify Landlord at least three (3) days
prior to the use or storage in, or transportation to, the Premises of Hazardous
Materials; and

                           b.       At any time during the term of this Lease
if, in Landlord's reasonable judgment, Tenant is breaching its obligation under
this Paragraph 9(b) or is not in compliance with any other provision of this
Lease.

                  All costs and expenses incurred by Landlord in connection with
any Inspection pursuant to this Paragraph 9(b)(6) shall, subject to Paragraph
9(b)(15) below, become due and payable by Tenant as Additional Rent, within
sixty (60) days after presentation by Landlord of an invoice therefor.

                  (7)      Landlord shall comply with all Environmental Laws
applicable to Landlord including notification requirements under this Lease.
Tenant shall give prompt notice to Landlord of:

                           a.       any proceeding or inquiry by, notice from,
or order of any governmental authority (including, without limitation, the
California State Department of Health Services) with respect to the presence of
any Hazardous Material on, under or about the Premises or any part of the
Project or the migration thereof from or to other property;

                           b.       all claims made or threatened by any third
party against Tenant, the Premises or any part of the Project relating to any
loss or injury resulting from any Hazardous Materials; and

                           c.       any spill, release, discharge or nonroutine
disposal of Hazardous Materials that occurs with respect to the Premises or
operations at the Premises by Tenant or Tenant's Agents;

                           d.       all matters of which Tenant is required to
give notice pursuant to Sections 25249.5 et seq. and 25359.7 of the California
Health and Safety Code; and

                           e.       Tenant's discovery of any occurrence or
condition on, under or about the Premises or any part of the Project or any real
property adjoining or in the vicinity of the Premises or the Project that could
cause the Premises or any part of the Project to be subject to any restrictions
on the

                                       12.
<PAGE>

ownership, occupancy, transferability or use of the Premises or any part of the
Project under any Environmental Law, including without limitation, Tenant's
discovery of any occurrence or condition an any real property adjoining or in
the vicinity of the Premises or the Project that could cause the Premises or any
part of the Project to be classified as "border zone property" under the
provisions of California Health and Safety Code Sections 25220 et seq. or any
regulation adopted in accordance therewith, or to be otherwise subject to any
restrictions on the ownership, occupancy, transferability or use of the Premises
or any part of the Project under any Environmental Law.

                  (8)      Landlord shall have the right to join and participate
in, as a party if it so elects, any legal proceedings or actions affecting the
Premises or any part of the Project initiated in connection with any
Environmental Law and have its attorneys' fees in connection therewith paid. by
Tenant. In addition, Tenant shall not take any remedial action in response to
the presence of any Hazardous Materials in under, or about the Premises or the
Project (except in the case where loss of life or substantial property damage is
imminent or immediate action is required by any governmental entity, in which
event Tenant shall take immediate remedial action), nor enter into any
settlement agreement, consent decree or other compromise in respect to any
claims relating to any Hazardous Materials in any way connected with the
Premises or the Project, 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.

                  (9)      As of the Commencement Date, to the fullest extent
permitted by law, Tenant shall protect, defend, indemnify and hold harmless
Landlord, its directors, officers, partners, employees, agents, successors and
assigns from and against any and all claims, fines, judgments, penalties,
losses, damages, costs, expenses or liability (including reasonable attorneys'
fees and costs) directly or indirectly arising out of or attributable to
Tenant's use, generation, manufacture, production, storage, release, threatened
release, discharge, disposal, transportation to or from, or presence of any
Hazardous Material on, under or about the Premises or any part of the Project
caused by Tenant, or Tenant's Agents (collectively a "Release") including,
without limitation: (a) all foreseeable consequential damages, including,
without limitation, loss of rental income and diminution in property value; (b)
the costs of any investigation, monitoring, removal,

                                       13.
<PAGE>

restoration, abatement, repair, cleanup, detoxification or other ameliorative
work of any kind or nature (collectively "Remedial Work") and the preparation
and implementation* of any closure, remedial or other required plans; (c). any
injury to or death of persons or damage to or destruction of property; and (d)
any failure of Tenant or Tenant's Agents to observe the foregoing covenants. For
purposes of this Paragraph 9 (b) (9), any acts or omissions of Tenant or Tenant
Is Agents (whether or not they are negligent, intentional, willful or unlawful)
shall be strictly attributable to Tenant. Tenant's obligations under this
Paragraph 9(b)(9) shall survive the expiration or earlier termination of this
Lease.

                  To the fullest extent permitted by law, in no event shall
Landlord be responsible to Tenant for the presence of Hazardous Materials in, on
or about the Premises or the Project to the extent caused or contributed to by
any third party which is not an agent or contractor of Landlord.

                  (10)     Within forty-five (45) days following the end of
Tenant's fiscal year, Tenant shall provide Land with financial statements
prepared in accordance with generally accepted accounting principles
consistently applied and certified as true and correct by Tenant's independent
certified public accountant setting forth Tenant's performance for the
applicable fiscal year. As of the execution of this Lease, Tenant's fiscal year
ends 12/31. Tenant shall provide Landlord with prompt written notice of any
change in Tenant's fiscal year. If at any time it reasonably appears to Landlord
that Tenant is not maintaining sufficient insurance or is not otherwise
financially capable of fulfilling its obligations under this Paragraph 9(b),
whether or not such obligations have accrued, become liquidated, conditional or
contingent, Tenant shall procure and thereafter maintain in full force and
effect such insurance or other form of financial assurance, with or from
companies or persons and in forms reasonably acceptable to Landlord, as Landlord
may from time to time request.

                  (11)     Upon any Release to the extent caused by Tenant or
Tenant Is Agents, Tenant shall, subject to Paragraph 9(b)(8), promptly notify
Landlord of the Release and shall, at its sole expense and immediately after
demand by Landlord, commence to perform and thereafter diligently prosecute to
completion such Remedial work as is necessary to restore the Premises, Project
or any other property affected by the Release to the condition existing prior to
the use of any Hazardous Materials. All such Remedial Work shall be performed:
(a) in conformance with the requirements of all applicable Environmental Laws;
(b) by one or

                                       14.
<PAGE>

more contractors, approved in advance in writing by Landlord; and (c) under the
supervision of a consulting engineer approved in advance in writing by Landlord.
All costs and expenses of such Remedial Work shall be paid by Tenant including,
without limitation, the charges of such contractor(s) and/or the consulting
engineer and Landlord's reasonable attorneys' fees and costs incurred in
connection with the monitoring or review of such Remedial Work. In the event
Tenant shall fail to timely commence, or cause to be commenced, or fail to
diligently prosecute to completion, such Remedial Work, Landlord may, but shall
not be required to, upon Landlord's prior written notice to Tenant, cause such
Remedial Work to be performed and all costs and expenses thereof, or incurred in
connection therewith, shall become due and payable by Tenant within thirty (30)
days of Tenant's receipt of Landlord's invoice therefor. Tenant's obligations
under this Paragraph 9(b)(11) shall survive the expiration or sooner termination
of this Lease. Tenant shall not be held responsible for any Remedial Work
resulting from 6 Release to the extent such Release is not directly caused by
Tenant or Tenant's Agents.

                  (12)     "Hazardous Materials" shall include, without
limitation, (i) those substances included within the definitions of "hazardous
substances," "hazardous materials," "toxic substances" or "solid waste" under
all present and future federal, state and local laws (whether under common law,
statute, rule, regulation or otherwise) relating to the protection of human
health or the environment, including, without limitation, California Senate Bill
245 (Statutes of 1987, Chapter 1302), the Safe Drinking Water and Toxic
Enforcement Act of 1986 (commonly known as Proposition 65) and the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601 et seq., the Resource Conservation and Recovery Act of 1976,
42 U.S.C. Section 6901 et seq., and the Hazardous Materials Transportation Act,
49 U.S.C. Sections 1801, et seq., all as heretofore and hereafter amended, or in
any regulations promulgated pursuant to said laws; (ii) those substances defined
as "hazardous wastes" in Section 25117 of the California Health & Safety Code or
as "hazardous substances" in Section 25316 of the California Health & Safety
Code, or in any regulations promulgated pursuant to said laws; (iii) those
substances listed in the United States Department of Transportation Table (49
CFR 172.101 and amendments thereto) or designated by the Environmental
Protection Agency (or any successor agency) as hazardous substances (see, e.g.,
40 CFR Part 302 and amendments thereto); (iv) such other substances, materials
and wastes which

                                       15.
<PAGE>

are or become regulated under applicable local, state or federal law or by the
United States government or which are or become classified as hazardous or toxic
under federal, state or local laws or regulations, including, without
limitation, California Health & Safety code, Division 20, and Title 26 of the
California Code of Regulations; and (v) any material, waste or substance which
contains petroleum, asbestos or polychlorinated biphenyls, is designated as a
"hazardous substance" pursuant to Section 311 of the Clean Water Act of 1977, 33
U.S.C. Sections 1251, et seq. (33 U.S.C. Section 1321) or listed pursuant to
Section 307 of the Clean Water Act of 1977 (33 U.S.C. Section 1317) or contains
any flammable, explosive or radioactive material.

                  (13)     "Environmental Laws" shall mean any federal, state or
local law, statute, ordinance, or regulation now in effect or hereafter enacted
pertaining to health, industrial hygiene, or the environmental conditions on,
under or about the Premises or any part of the Project, including without
limitation, the comprehensive Environmental Response, Compensation, and
Liability Act of 1980 ("CERCLA") as amended, 42 U.S.C. section 9601 et seq., and
the Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. sections
6901 et seq.

                  (14)     In addition to Tenant's obligations pursuant to
Paragraph 27(b) of this Lease, Tenant shall, on the expiration or sooner
termination of this Lease, surrender the Premises to Landlord free of any
Hazardous Materials brought onto the Premises and the Project by either Tenant
or Tenant's Agents. If Tenant fails to so surrender the Premises and the
Project, the provisions of Paragraph 9(b)(9) shall apply. Landlord shall have
the right, but not the obligation, to appoint a consultant, at Tenant's expense,
to conduct an investigation to determine whether any Hazardous Materials are
located in or about the Premises or the Project, and to determine the corrective
measures required to remove such Hazardous Materials. Tenant, at its expense,
shall comply with all reasonable recommendations of the consultant. A failure by
Landlord to appoint such a consultant shall in no way relieve Tenant of any of
Tenant's obligations set forth in this Lease relating to Hazardous Materials,
nor constitute a waiver of Landlord's rights under this Lease. Tenant's
obligations under this Paragraph 9(b)(14) shall survive the expiration or
earlier termination of this Lease.

                  (15)     Except as otherwise provided in Paragraphs 9(b)(4)
(concerning the implementation of consultant recommendations) and 9(b)(11)
(concerning the monitoring and

                                       16.
<PAGE>

review of Remedial Work), all costs incurred by Landlord in retaining a
consultant for any purpose contained in this Paragraph 9(b) shall be an
operating Expense under Paragraph 3 of this Lease unless Landlord retains a
consultant pursuant to this Paragraph 9(b), and such consultant reasonably
determines after appropriate review of information and/or inspection that Tenant
is breaching its obligations under this Lease to comply with this Paragraph
9(b), in which event all costs and expenses incurred by Landlord in connection
with any such review, inspection, and/or implementation of recommendations
pursuant to this Paragraph 9(b) shall become due and payable by Tenant as
Additional Rent, upon presentation by Landlord of an invoice therefor.

                  (16)     Upon any violation of any of the foregoing covenants,
Landlord shall be entitled to exercise all remedies available to a landlord
against a defaulting tenant, including but not limited to those set forth in
Paragraph 25(b) of this Lease. Without limiting the generality of the foregoing,
Tenant expressly agrees that upon any such violation Landlord may, at its option
(i) immediately terminate this Lease, or (ii) continue this Lease in effect
until compliance by Tenant with its clean-up and removal covenant
(notwithstanding the expiration of the Term). No action by Landlord hereunder
shall impair the obligations of Tenant pursuant to this Paragraph 9(b).

         (c)      ADA. Tenant acknowledges that the Americans with Disabilities
Act of 1990 (as amended and as supplemented by further laws from time to time,
the "ADA") imposes certain requirements upon the owners, lessees and operators
of commercial facilities and places of public accommodation, including, without
limitation, prohibitions on discrimination against any individual on the basis
of disability. Accordingly, but without limiting the generality of and in
addition to all other requirements under this Lease, Tenant agrees to take all
proper and necessary action to cause the Premises to be maintained, used and
occupied in compliance with the ADA throughout the Term of this Lease and,
further, to otherwise assume all responsibility to ensure the Premises'
continued compliance with all provisions of the ADA throughout the Term of this
Lease.

                             UTILITIES AND SERVICES

PARAGRAPH 10

                                       17.
<PAGE>

         (a)      Payment by Tenant. Tenant shall be responsible for and shall
pay promptly all charges for gas, electricity, sewer, heat, light, power,
telephone, refuse pickup (to be performed on a regularly scheduled basis so that
accumulated refuse does not exceed the capacity of Tenant's refuse bins),
janitorial service and all other utilities, materials and services furnished
directly to or used by Tenant in, on or about the Premises, together with all
taxes thereon. Tenant shall contract directly with the providing companies for
such utilities and services.

         (b)      No Abatement of Rent. Landlord shall not be liable for, and
Tenant shall not be entitled to, any abatement or reduction of rent by reason of
any failure or interruption of any utility or other service furnished to the
Premises or the Project. No such failure, stoppage, or interruption of any such
utility or service shall constitute an eviction of Tenant or relieve Tenant of
the obligation to perform any covenant or agreement of this Lease to be
performed by Tenant. In the event of any such failure, stoppage or interruption
of the utilities or services to be supplied by Landlord, Landlord shall use good
faith efforts to have service promptly resumed. Where the cause of any such
failure, stoppage or interruption of such utilities or services is within the
control of a public utility or other public or quasi-public entity outside
Landlord's control, notification to such utility or entity of such failure,
stoppage or interruption and request to remedy the same shall constitute "good
faith efforts" by Landlord to have service promptly resumed.

                              RULES AND REGULATIONS

PARAGRAPH 11

         Tenant agrees to abide by all rules and regulations for use of the
Premises, the Building, the Phase and the Project imposed by Landlord, as the
same may be revised from time to time, including, without limitation, the
following: (a) Tenant shall comply with all of the requirements of Landlord's
emergency response plan, as the same may be amended from time to time; and (b)
Tenant shall not place any furniture, furnishings, fixtures or equipment in the
Premises in a manner so as to obstruct the windows of the Premises to cause the
Building, in Landlord's good faith determination, to appear unsightly from the
exterior. Such rules and regulations are and shall be imposed for the
cleanliness, good appearance, proper maintenance, good order and reasonable use
of the Premises, the Building, the Phase and the Project and as may be necessary
for the enjoyment of the

                                       18.
<PAGE>

Building and the Project by all tenants and their clients, customers, and
employees. Landlord shall not be liable for the failure of any tenant or of the
agents or employees of any tenant to conform to such rules and regulations.

                           TAXES ON TENANT'S PROPERTY

PARAGRAPH 12

         Tenant shall be liable for, and shall pay, at least ten (10) days
before delinquency, all taxes, levies and assessments levied against any
personal property or trade fixtures placed by Tenant in or about the Premises or
against the cost or value of any leasehold improvements made in or to the
Premises by or for Tenant regardless of whether title to such improvements shall
be in Tenant or Landlord. If any such tax, levy or assessment on Tenant's
personal property, trade fixtures or leasehold improvements is levied against
Landlord or Landlord's property, or if the assessed value of the Building or the
Project is increased by the inclusion therein of a value placed upon such
personal property, trade fixtures or leasehold improvements of Tenant and if
Landlord pays such taxes, levies or assessment based upon such increased
assessment (which Landlord shall have the right to do regardless of the validity
thereof), Tenant shall upon demand repay to Landlord the amount of such taxes,
levies or assessments so levied against Landlord, or the proportion of any
taxes, levies or assessments resulting from such increase in assessment. Tenant
shall also be liable for and shall upon demand repay to Landlord the amount of
any rental, excise, sales, transaction privilege or other tax or levy, however
denominated, imposed upon or measured by the rent reserved hereunder or on
Landlords business of leasing the Premises, excepting only net income taxes,
franchise taxes and estate, inheritance or gift taxes.

                                FIRE OR CASUALTY

PARAGRAPH 13

         (a) [Intentionally deleted because not incorporated into Sublease.]

         (b) [Intentionally deleted because not incorporated into Sublease.]

         (c) [Intentionally deleted because not incorporated into Sublease.]

                                       19.
<PAGE>

         (d) [Intentionally deleted because not incorporated into Sublease.]

                            EMINENT DOMAIN

PARAGRAPH 14

         (a) [Intentionally deleted because not incorporated into Sublease.]

         (b) [Intentionally deleted because not incorporated into Sublease.]

         (c) [Intentionally deleted because not incorporated into Sublease.]

                            ASSIGNMENT AND SUBLETTING

PARAGRAPH 15

         (a)      Landlord's Consent. Tenant shall not voluntarily or
involuntarily assign, sublet, mortgage or otherwise transfer or encumber all or
any portion of its interest in this Lease or in the Premises or permit the use
of the Premises by any party other than Tenant without obtaining the prior
written consent of Landlord, which consent shall not be unreasonably withheld.
Any such attempted assignment, subletting, mortgaging, transfer or other
encumbering without such consent shall be null and void and of no effect.
Without limiting the generality of the foregoing, it shall be reasonable for
Landlord to deny any proposed assignment or sublease if (1) the use to be made
of the Premises by the proposed assignee or subtenant is not generally
consistent with the character and nature of all other tenancies in the Project,
or (2) the proposed assignee or subtenant uses Hazardous Materials, or (3) the
character, reputation or financial responsibility of the proposed assignee or
subtenant is not satisfactory to Landlord, as reasonably determined by Landlord,
or in any event is not at least equal to that which was possessed by Tenant as
of the date of execution of this Lease, or (4) the proposed assignee or
subtenant is an existing tenant in the Project or is negotiating with Landlord
or Landlord's representative, or the owner (or the owner's representative) of
any other Phase of the Project, to lease space at the Project, or (5) Tenant is
in default hereunder and said default continues following notice and the
expiration of any applicable cure period.

                                       20.
<PAGE>

         (b)      No Relief. No permitted assignment, subletting, mortgaging or
other encumbering of Tenant's interest in this Lease shall relieve Tenant of its
obligation to pay the rent and to perform all of the other obligations to be
performed by Tenant hereunder. The acceptance of rent by Landlord from any
person other than Tenant shall not be deemed to be a waiver by Landlord of any
provision of this Lease or to be a consent to any subletting, assignment,
mortgaging or other encumbering of the Premises. Consent to an assignment,
sublease, mortgage or other encumbrance shall not be deemed to constitute
consent to any subsequent attempted assignment, sublease, mortgage or other
encumbrance.

         (c)      Notice to Landlord. If Tenant desires at any time to assign
this Lease or to sublet the Premises or any portion thereof, it shall first
notify Landlord of its desire to do so and shall submit in writing to Landlord
(1) the name of the proposed subtenant or assignee, (2) the nature of the
proposed subtenant's or assignee's business to be carried on in the Premises,
(3) copies of all applicable documentation in connection with the proposed
sublease or assignment, and (4) such financial and other information as Landlord
may reasonably request concerning the proposed subtenant or assignee.

         (d)      Condition to Consent. As a condition to Landlords consent to
such assignment or subletting, if the net aggregate rental paid or given by any
sublessee or assignee exceeds, on a square foot basis, the amount per square
foot payable by Tenant to Landlord for the Premises, then Tenant shall pay to
Landlord as additional rental hereunder, monthly as received, fifty percent
(50%) of such excess rental. Net aggregate rental as used herein shall mean
gross rental and additional consideration of any kind or type received by Tenant
with respect to the subleased or assigned premises, less the following actual
and documented out-of-pocket costs incurred by Tenant: Tenant's actual costs of
any commercially reasonable commission paid by Tenant to a broker independent of
Tenant in connection with such sublease or assignment, reasonable legal fees in
processing such assignment or subletting, reasonable advertising costs and
commercially reasonable costs to remodel or renovate the area subject to such
subletting or assignment and taking into account the value of any utilities and
services provided to such transferee if the rental paid by any assignee or
sublessee is for fully serviced premises. "Sublet" and "sublease" shall include
a sublease as to which Tenant is sublessor and any sub-sublease or other
sub-subtenancy, irrespective of the number of tenancies and tenancy levels
between the ultimate occupant and

                                       21.
<PAGE>

Landlord, as to which Tenant receives any consideration. Tenant shall require on
any sublease which it executes that Tenant receive all profit from all
sub-subtenancies, irrespective of the number of levels thereof. Any rent or
other consideration which is to be passed through to Landlord by Tenant pursuant
to this Paragraph 15(d) shall be paid to Landlord promptly upon receipt by
Tenant and shall be paid in cash, irrespective of the form in which received by
Tenant from any subtenant or assignee. In the event that any rent or other
consideration received by Tenant from a subtenant or assignee is in a form other
than cash, Tenant shall pay to Landlord in cash the fair value of such
consideration.

         (e)      Landlord's Election. At any time within fifteen (15) days
after Landlord's receipt of the information specified in Paragraph 15(c) above,
Landlord may by written notice to Tenant elect to (1) consent to the proposed
sublease or assignment; or (2) reasonably withhold its consent to the proposed
sublease or assignment.

         (f)      No Merger. The voluntary or other surrender of this Lease by
Tenant or a mutual cancellation hereof shall not work a merger but shall, at the
option of Landlord, either terminate all or any existing subleases or
subtenancies or operate as an assignment to Landlord of such subleases or
subtenancies. if Tenant is a corporation which under the then current guidelines
published by the Commissioner of corporations of the State of California, is not
deemed to be a public corporation or is an unincorporated association or
partnership, then the transfer, assignment or hypothecation of any stock or
interest in such corporation, association or partnership in the aggregate in
excess of twenty-five percent (25%) shall be deemed to be an assignment within
the meaning and provisions of this Paragraph 15.

         (g)      Assignment of Rent. Tenant immediately and irrevocably assigns
to Landlord, as security for Tenant's obligations under this Lease, all rent
from any subletting of all or a part of the Premises as permitted by this Lease,
and Landlord, as assignee and attorney-in-fact for Tenant, or a receiver for
Tenant appointed on Landlord's application, may immediately following the
applicable notice and/or cure period, if any, collect such rent and apply it
toward Tenant's obligation under this Lease; except that, until the occurrence
of an act of default by Tenant, Tenant shall have the right to collect such
rent.

                                       22.
<PAGE>

         (h)      Landlord's Costs. Tenant agrees to reimburse Landlord for
Landlord's costs and attorneys' fees incurred in conjunction with the processing
and documentation of any requested assignment, subletting, transfer, change of
ownership or hypothecation of this Lease or Tenant's interest in and to the
Premises which is submitted for approval to Landlord, whether or not Landlord
approves the same.

         (i)      Permitted Transfer. Notwithstanding Paragraph 15(a) to the
contrary, Tenant shall have the right, without Landlord's consent, to assign or
transfer all or any portion of the Premises to an entity which controls, is
controlled by, or is under common control with Tenant; or to any entity which
results from a merger, reincorporation or consolidation with Tenant, or to any
entity which acquires substantially all of the stock or assets of Tenant, as a
going concern, with respect to the business that is being conducted in the
Premises (hereinafter each a "Permitted Transferee"), provided however that the
net worth of such Permitted Transferee is equal to or better than the net worth
of Tenant as of the Commencement Date of this Lease; and further provided that
the other provisions of this Paragraph 15 shall apply to such assignment. If the
net worth of any Permitted Transferee does not equal or exceed the net worth of
Tenant as provided herein, landlord shall not withhold its consent to any
assignment or subletting to such transferee provided that Landlord is furnished
with a reasonably satisfactory lease guaranty respecting such transferee's
leasehold obligations from a guarantor who satisfies the foregoing net worth
requirements.

                                     ACCESS

PARAGRAPH 16

         Landlord reserves and shall at all times have the right to enter the
Premises upon twenty-four (24) hours notice (except in case of emergency, when
no notice shall be required) to inspect the same, to supply any service to be
provided by Landlord to Tenant hereunder, to submit the Premises to prospective
purchasers or tenants (but as to prospective tenants. only during the last six
months of the Term), to post notices of nonresponsibility, to use and maintain
pipes and conduits in and through the Premises and to alter, improve or repair
the Premises or any other portion of the Building, all without being deemed
guilty of an eviction of Tenant and without abatement of rent. Landlord may, for
the purpose of altering, improving or repairing the Premises or any other
portion of the Building,

                                       23.
<PAGE>

erect scaffolding and other necessary structures where reasonably required by
the character of the work to be performed. Landlord shall use commercially
reasonable efforts where practicable to conduct such entries and activities in a
workmanlike manner so as to reasonably minimize interference with Tenant's
ability to conduct its business at the Premises and Tenant hereby waives any
claim for damages for any injury or inconvenience to or interference with
Tenant's business, any loss of occupancy or quiet enjoyment of the Premises and
any other loss occasioned thereby or arising therefrom. Landlord shall have the
right at all times to have and retain a key with which to unlock all of the
doors in, upon and about the Premises, excluding Tenant's vaults and safes, if
any, Landlord shall have the right to use any and all means which Landlord may
deem proper to open such doors in an emergency in order to obtain entry to the
Premises and any such entry shall not under any circumstances be construed or
deemed to be a forcible or unlawful entry into, or a detainer of, the Premises
or an eviction of Tenant from the Premises or any portion thereof. No provision
of this Paragraph 16 shall be construed as obligating Landlord to perform any
repairs, alterations or decoration not otherwise expressly required of Landlord
under this Lease.

                SUBORDINATION; ATTORNMENT; ESTOPPEL CERTIFICATES

PARAGRAPH 17

         (a)      Subordination. Subject to the last sentence of this Paragraph
17 (a), this Lease is junior, subject and subordinate to all declarations of
restrictions and all mortgages, deeds of trust and other security instruments of
any kind now covering the Premises, the Project, or any portion of thereof.
Landlord reserves the right to place liens or encumbrances on the Premises, the
Project, or any part of or interest in any of the foregoing, and, subject to the
last sentence of this Paragraph 17(a), this Lease shall be subject and
subordinate to any such liens or encumbrances now or hereafter imposed by
Landlord without the necessity of the execution and delivery of any further
instruments on the part of Tenant to effectuate such subordination.
Notwithstanding the foregoing, Tenant covenants and agrees to execute and
deliver upon demand such further instruments evidencing any such subordination
of this Lease as may be requested by Landlord. In the event Tenant fails to so
execute any such further instrument within ten (10) business days after demand
therefor. In the event of the foreclosure of any such lien or encumbrance,
Tenant shall attorn to the then owner who owns or acquires title to the Premises
or the Project

                                       24.
<PAGE>

and will recognize such owner as Landlord under this Lease. Tenant hereby waives
any right to terminate this Lease because of any such foreclosure.
Notwithstanding the foregoing, Tenant agrees that if any holder of a mortgage,
deed of trust or other security instrument covering the Premises or the Project
desires this Lease to be senior to the lien of such mortgage, deed of trust or
security instrument, upon written notice from Landlord or such holder to Tenant
indicating such desire, this Lease shall automatically become senior to such
mortgage, deed of trust or security instrument and Tenant agrees to execute,
promptly upon Landlord's or such holder's demand therefor, such instruments as
Landlord or such holder shall reasonably require confirming the priority of this
Lease, but Tenant's failure to execute such instrument shall not affect such
holder's election to cause this Lease to be superior to such holder's lien.
Landlord shall use reasonable efforts to obtain a subordination, non-disturbance
and attornment agreement from the holder of any mortgage hereinafter encumbering
the Project in the form attached hereto as Exhibit F, or the standard form of
such mortgagee.

         (b)      Estoppel Certificates. Tenant shall at any time and from time
to time, upon not less than three (3) business days, prior notice from Landlord,
execute, acknowledge and deliver to Landlord a statement in writing certifying
that this Lease is unmodified and in full force and effect (or if there have
been modifications, that this Lease is in full force and effect as modified and
describing the same), the dates through which the Basic Annual Rent, Additional
Rent and all other charges have been paid in advance, if any, and stating
whether or not, to the best knowledge of Tenant, Landlord is in default in the
performance of any covenant, agreement or condition contained in this Lease and,
if so, specifying each such default. Any such statement delivered pursuant to
this Paragraph 17(b) may be relied upon by any prospective purchaser or
encumbrancer (and all successors thereof) of any interest of Landlord in or to
Tenant's Phase or the Project and Tenant shall be liable for all loss, cost or
expense resulting from the failure of any sale or funding of any loan caused by
any material misstatement contained in any such statement or other estoppel
certificate supplied to Landlord by Tenant. Tenant's failure to timely deliver
any such statement shall be conclusive upon Tenant that (1) this Lease is in
full force and effect, without modification except as may be represented by
Landlord, (2) there are no uncured defaults in Landlord's performance, and (3)
not more than one month's Basic Annual Rent has been paid in advance.

                                       25.
<PAGE>

                                SALE BY LANDLORD

PARAGRAPH 18

         [Intentionally deleted because not incorporated into Sublease.]

            NON-LIABILITY AND INDEMNIFICATION OF LANDLORD: INSURANCE

PARAGRAPH 19

         (a)      Landlord's Non-liability. Except to the extent caused solely
by the active negligence or intentional misconduct of Landlord, Landlord shall
not be liable for any injury or damage which may be sustained by any person or
any goods, wares, merchandise or other property of Tenant, of Tenant's
employees, invitees or customers or of any other person in or about the Premises
resulting from any cause whatsoever (including, without limitation, fire, steam,
electricity, gas, water, rain or dampness which may occur, leak or flow from or
into any part of the Premises or any other place, any breakage, leakage,
obstruction or other defect in the pipes, sprinklers, wires, appliances,
plumbing, air conditioning or lighting fixtures of the Premises, theft,
explosion or falling plaster) In no event shall Landlord be liable for any
damage arising from any act or neglect of any other tenant of the Project or any
of their officers, employees, agents, representatives, customers, visitors or
invitees, for any damage to Tenant's property entrusted to employees of Landlord
or its agents, for any interference with light or other incorporeal
hereditaments or for any damage arising from any latent defect in the Pre the
Project.

         (b)      Indemnification. To the fullest extent permitted by then
applicable law, Tenant shall protect, indemnify and hold Landlord harmless from,
and defend Landlord against any and all claims, losses, costs, damages,
expenses, or liabilities, including, without limitation, attorneys' fees and
costs of defense, for any injury or damage to any person or property whatsoever
caused in part or in whole by the act, neglect, fault or omission of Tenant or
its assignees, subtenants or agents, of the respective servants, employees or
invitees of any of the foregoing persons or of any other persons permitted in
the Building or elsewhere in the Project by Tenant or any of such persons;
excluding, however, such damage to the extent caused solely by the negligence or
intentional misconduct of Landlord. This indemnity shall not require payment by
Landlord as a

                                       26.
<PAGE>

condition precedent to 'recovery from Tenant. In addition, if any person not a
party to this Lease shall institute any other type of action against Tenant in
which Landlord, involuntarily and without cause shall be made a party defendant,
Tenant shall indemnify Landlord, hold Landlord harmless from, and defend
Landlord against any and all claims, losses, costs, damages, expenses or
liabilities by reason thereof, unless such claims, losses, costs, damages,
expenses or liabilities result directly from Landlord's active negligence or
intentional misconduct.

         (c)      Tenant's Insurance. Tenant hereby agrees to maintain in full
force and effect at all times during the Term and any other period of its
occupancy or possession of the Premises, at its own expense, for the protection
of Tenant and Landlord, as their interests may appear, policies of insurance
which afford the following coverages: (1) Worker's Compensation and Employer's
Liability Insurance to the extent required by then applicable law, (2)
Commercial General Liability Insurance with a Broad Form Liability Endorsement
(including protective liability coverage on operations of independent
contractors engaged in construction, coverage of Tenant's indemnity obligations
under this Lease and blanket contractual liability insurance) on an
"occurrence', basis against claims for "personal injury" liability, including,
without limitation, bodily injury, death and property damage liability, with a
limit of not less than Three Million Dollars ($3,000,000) in the event of
"personal injury" to any number of persons or of damages to property arising out
of any single "occurrence," (3) insurance against loss or damage by fire and
such other risks and hazards as are insurable under then applicable standard
forms of "all risk" fire and extended coverage insurance policies to all of the
Tenant Improvements and the personal property, furniture, furnishings and
fixtures belonging to Tenant used or located in the Premises for not less than
one hundred percent (100%) of the actual replacement value thereof (the proceeds
of which insurance, so long as this Lease remains in effect, shall be used to
repair or replace such personal property, furnishings and fixtures in the
Premises; provided, however, that upon any termination of this Lease pursuant to
Paragraph 13 above, all such proceeds shall be the property of Landlord), and
(4) business interruption or loss of income insurance in an amount equal to the
Basic Annual Rent for a period of at least nine (9) months commencing with the
date of loss (the proceeds of which insurance shall be paid to Landlord to the
extent of any abatement of rent under the Lease).

                                       27.
<PAGE>

         (d)      Deductibles. Tenant may, with the prior written consent of
Landlord, elect to have reasonable deductibles in connection with the policies
of insurance required to be maintained by Tenant under Paragraph 19(c)(3) above.

         (e)      Certificates of Insurance. Tenant shall deliver to Landlord at
least thirty (30) days prior to the time such insurance is first required to be
carried by Tenant, and thereafter at least thirty (30) days prior to expiration
of each such policy, certificates of insurance from the carrier providing such
insurance the above coverages with limits not less than those specified above.
Such certificates, with the exception of worker's compensation, shall designate
Landlord, each of its partners, subsidiaries, affiliates, directors, agents and
employees, as additional insureds and shall expressly provide that the interest
of such persons therein shall not be affected by any breach by Tenant of any
policy provision for which such certificates evidence coverage. Further, each
such certificate shall expressly provide that no less than thirty (30) days'
prior written notice shall be given to Landlord in the event of a material
alteration to or cancellation of the coverages evidenced by such certificate.
The insurance which Tenant is required to maintain in' force and effect under
this Paragraph 19 shall be primary insurance as respects Landlord (and any other
additional insureds designated by Landlord) and not excess over or contributory
with any other available insurance. Certificates of insurance evidencing the
liability insurance coverage required under Paragraph 19(c)(2) above shall
contain an endorsement providing, in substance, that such insurance as is
afforded thereby for the benefit of Landlord (and any other additional insureds
designated by Landlord) shall be primary and any insurance carried by Landlord
(and any other such additional insureds) shall be excess and not contributory.

         (f)      Increase in Coverage. Upon demand, Tenant shall provide
Landlord, at Tenant's expense, with such increased amounts of existing insurance
and such other coverages and insurance as Landlord may reasonably require.

         (g)      No Co-Insurance. If on account of the failure of Tenant to
comply with the provisions of this Paragraph 19, Landlord or any other person is
adjudged a co-insurer by its insurance carrier, then any loss or damage which
Landlord or such other person shall sustain by reason thereof shall be borne by
Tenant and shall be immediately paid by Tenant upon receipt of a bill therefor
and evidence of such loss.

                                       28.
<PAGE>

         (h)      Insurance Limits. Landlord makes no representation that the
limits of liability specified to be carried by Tenant under this Lease are
adequate to protect Tenant against Tenant's undertaking under this Lease. In the
event Tenant believes that any such required coverage is insufficient, Tenant
shall provide, at its own expense, such additional insurance as Tenant deems
adequate. In no event shall the limits of any coverage maintained by Tenant
pursuant to this Paragraph 19 be considered as limiting Tenant's liability under
this Lease.

         (i)      Consequential Damages. In no event shall Landlord be liable to
Tenant for any damage by reason of loss of profits, business interruption or
other consequential damage.

         (j)      General Requirements. All insurance required to be carried by
Tenant hereunder shall be with companies reasonably acceptable to Landlord. All
policies and certificates delivered by Tenant pursuant to this Paragraph shall
contain liability limits not less than those set forth herein, shall list all
additional insureds and shall specify all endorsements and special coverages
required by this Paragraph. Any insurance required to be maintained by Tenant
may be maintained pursuant to so-called "blanket" policies of insurance so long
as the Premises are specifically identified therein (by endorsement or
otherwise) as included in the coverage provided and such policies otherwise
comply with the provisions of this Lease.

                              WAIVER OF SUBROGATION

PARAGRAPH 20

         (a)      Without affecting any other rights or remedies hereunder, at
law or in equity, Landlord and Tenant each hereby waives all rights of recovery
against the other, any other tenant or occupant in the Building or the Project
and all officers, employees, agents, representatives, customers and business
visitors of such persons for loss of or damage to property at the Project
arising from any cause insured against under any policy of all-risk insurance
either required to be carried by such waiving party pursuant to the provisions
of this Lease or actually carried by such waiving party. The foregoing waiver
shall be effective whether or not such waiving party shall actually obtain and
maintain the "all risk" insurance required pursuant to this Lease. Tenant shall,
upon obtaining the policies of insurance which it is required to maintain under
this Lease, give notice to its insurance carriers that the foregoing waiver of
subrogation is contained in this Lease.

                                       29.
<PAGE>

         (b)      In the event either Landlord or Tenant notifies the other that
an insurer under any policy described in Paragraph 20 (a) above has refused to
consent to or permit the waiver of subrogation thereunder in any fashion or has
conditioned the same upon the payment of an additional premium, then such waiver
shall be of no force or effect with respect to loss or damage covered by such
policy during the period commencing five (5) business days after such other
party's receipt of such notice and continuing until such insurer reinstates such
consent; provided, however, that if such other party elects to reimburse the
notifying party for any required additional premium, the notifying party shall
obtain such insurer's consent.

                                 ATTORNEYS, FEES

PARAGRAPH 21

         In the event any party to this Lease brings any suit or other
proceeding with respect to the subject matter or enforcement of this Lease
(including all addenda and exhibits hereto), the prevailing party (as determined
by the court, agency or other authority before which such suit or proceeding is
commenced) shall, in addition to such other relief as may be awarded, be
entitled to recover attorneys' fees, expenses and costs of investigation as
actually incurred (including, without limitation, attorneys' fees, expenses and
costs of investigation incurred in appellate proceedings or in connection with
the enforcement or collection of any judgment obtained in any suit or other
proceeding with respect to the subject matter or enforcement of this Lease,
costs incurred in establishing any right to indemnification, or in any action or
participation, or in connection with, any case or proceeding under Chapters 7,
11 or 13 of the Bankruptcy Code, 11 United States Code Section 101 et seq., or
any successor statutes). The parties hereto expressly agree that (i) any
attorneys' fees incurred in connection with the enforcement or collection of any
judgment obtained in any suit or other proceeding with respect to the subject
matter or enforcement of this Lease shall be recoverable as a separate item,
(ii) the provisions of this Paragraph 21 shall survive the entry of any judgment
with respect to the subject matter or enforcement of this Lease, and (iii) the
provisions of this Paragraph 21 will not merge, or be deemed to have merged,
into any such judgment.

                                       30.
<PAGE>

                                     WAIVER

PARAGRAPH 22

         No waiver by Landlord of any provision of this Lease or of any breach
by Tenant hereunder shall be deemed to be a waiver of any other provision hereof
or of any subsequent breach by Tenant of the same or any other provision.
Landlord's consent to or approval of any act by Tenant requiring Landlord's
consent or approval shall not be deemed to render unnecessary the obtaining of
Landlord's consent to or approval of any subsequent act of Tenant. No act or
thing done by Landlord or Landlord's agents during the Term, including, without
limitation, Tenant's delivery of the keys to the Premises to any employee or
agent of Landlord, shall operate as or be deemed to be a termination of this
Lease, a surrender of the Premises or an acceptance of a surrender of the
Premises unless expressly stated in. a writing signed by Landlord. The
acceptance of any rent by Landlord following a breach of this Lease by Tenant
shall not constitute a waiver by Landlord of such breach or any other breach
unless such waiver is expressly stated in a writing signed by Landlord. The
acceptance of any payment from a debtor-in-possession, a trustee, a receiver or
any other person acting on behalf of Tenant or Tenant's estate shall not
constitute a waiver of or cure a default under Paragraphs 15 or 24 hereof.

                                     NOTICES

PARAGRAPH 23

         (a)      Any notice required by law to be given by Landlord to Tenant
as a condition to the filing of an action alleging an unlawful detainer of the
Premises, including, without limitation, any three (3) days, notice under
Section 1161(2) or (3) of the California Code of Civil Procedure, and any
service of process made by Landlord in connection with any action arising out of
or related to this Lease or the Premises shall be effective only if in writing
and either sent by registered or certified mail, return receipt requested, or
delivered personally to Tenant at the Premises.

         (b)      Except as otherwise expressly provided in this Lease, any
notice, demand, request or other communication not described in (a) above given
or required to be given by Landlord hereunder shall be effective only if in
writing and either sent by registered or certified mail, return receipt
requested, or by

                                       31.
<PAGE>

recognized overnight courier or delivered personally to the following:

                           Regen Biologics
                           545 Penobscot Drive
                           Redwood City, CA 94063
                           Attention: Jim McKinley

         (c)      Except as otherwise expressly provided in this Lease, any
notice, demand, request or other communication given or required to be given by
Tenant hereunder shall be effective only if in writing and either sent by
registered or certified mail, return receipt requested, or by recognized
overnight courier or delivered personally to each of the following:

                  (1)      METROPOLITAN LIFE INSURANCE COMPANY
                           101 Lincoln Centre Drive, Sixth Floor
                           Foster City, California 94404
                           Attention: Assistant Vice President

                  (2)      METROPOLITAN LIFE INSURANCE COMPANY
                           101 Lincoln Centre Drive, Sixth Floor
                           Foster City, California 94404
                           Attention: Associate General Counsel

                  (3)      LINCOLN PROPERTY COMPANY N.C., INC.
                           101 Lincoln Centre Drive, Fourth Floor
                           Foster City, California 94404
                           Attention: Director of Property Management,
                                      Seaport Centre

         (d)      Tenant and Landlord may designate new addresses, for notice
for the purposes of (b) or (c) above (however, in no event may any party have
more than four (4) separate designations at any one time) by notice given to the
other in accordance with the provisions of this Paragraph 23.

         (e)      Any notice hereunder shall be deemed effectively given upon
its delivery or the addressee's refusal to accept delivery as indicated by the
person attempting such personal delivery, by the applicable return receipt, if
sent by registered or certified mail, or by similar advice from the recognized
courier company, as the case may be.

                                       32.
<PAGE>

                            INSOLVENCY OR BANKRUPTCY

PARAGRAPH 24

         (a)      Prior to Term. If at any time prior to the date herein fixed
as the commencement of the Term there shall be filed by or against Tenant in any
court pursuant to any statute either of the United States or of any State a
petition in bankruptcy or insolvency or for reorganization or for the
appointment of a receiver or trustee or conservator of all or a portion of
Tenant's property, or if Tenant makes an assignment for the benefit of creditors
(collectively, an "Insolvency Event"), this Lease shall ipso facto be canceled
and terminated and in such event neither Tenant nor any person claiming through
or under Tenant or by virtue of any statute or by an order of any court shall be
entitled to possession of the Premises and Landlord, in addition to the other
rights and remedies given by Paragraph 25(b) hereof or by virtue of any other
provision in this Lease contained or by virtue of any statute or rule of law,
may retain as damages any rent, security, deposit or moneys received by it from
Tenant or others on behalf of Tenant.

         (b)      No Assignment. In no event shall this Lease be assigned or
assignable by operation of law and in no event shall this Lease be an asset of
Tenant in any receivership, bankruptcy, insolvency or reorganization proceeding.

                                     DEFAULT

PARAGRAPH 25

         (a)      Default by Tenant. The occurrence of any of the following
shall constitute a material default and breach of this Lease by Tenant:

                  (1)      Any failure by Tenant to pay rent or to make any
other payment required to be made by Tenant hereunder at the time specified for
payment.

                  (2)      Any abandonment of the Premises by Tenant.

                  (3)      Any warranty, representation or written statement
made or furnished by Tenant to Landlord at any time in connection with this
Lease or any other agreement to which Tenant and Landlord are parties is
determined to have been false or misleading in any material respect when made or
furnished.

                                       33.
<PAGE>

                  (4)      Any attempted assignment, sublease, mortgage or
encumbrance in violation of Paragraph 15 above.

                  (5)      The occurrence of any Insolvency Event filed against
Tenant by a third party other than Landlord which is not dismissed within thirty
(30) days after such occurrence or the occurrence of any other Insolvency Event.

                  (6)      Any failure by Tenant to observe and perform any
other provision of this Lease (or of the addenda attached hereto) to be observed
or performed by Tenant, where such failure continues for fifteen (15) days
(except where a different period is specified in this Lease or in the addenda)
after written notice thereof by Landlord to Tenant; provided, however, that any
such notice shall be in lieu of, and not in addition to, any notice required
under Section 1161 et seq. of the California Code of Civil Procedure, and
provided, further, that if the nature of such default is such that the same
cannot reasonably be cured within such fifteen (15) day period, Tenant shall not
be deemed to be default if Tenant shall within such period commence such cure
and thereafter diligently prosecute the same to completion; but in no event
shall any such cure period exceed one hundred twenty (120) days in the
aggregate.

         (b)      Remedies. In the event of any such default by Tenant, then in
addition to all other remedies available to Landlord at law or in equity:

                  (1)      Landlord shall have the immediate option to terminate
this Lease and all rights of Tenant hereunder by giving Tenant written notice of
such intention to terminate, in which event Landlord may recover from Tenant all
of the following: (i) the worth at the time of award of any unpaid rent which
had been earned at the time of such termination; plus (ii) the worth at the time
of award of the amount by which the unpaid rent which would have been earned
after termination until the time of award exceeds the amount of such rental loss
Tenant proves reasonably could have been avoided; plus (iii) the worth at the
time of award of the amount by which the unpaid rent for the balance of the term
after the time of award exceeds the amount of such rental loss that Tenant
proves reasonably could be avoided; plus (iv) any other amount necessary to
compensate Landlord for all the detriment proximately caused by Tenant's failure
to perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom; plus (v) at Landlord's election,
such other amounts in addition to or in lieu of the foregoing as may be
permitted from time to time by applicable California law. As used in (i)

                                       34.
<PAGE>

and (ii) above, the "worth at the time of award" shall be computed by allowing
interest at the rate specified in Paragraph 36(a) below and as used in (iii)
above, the "worth at the time of award" shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent (1%).

                  (2)      Landlord shall also have the right, with or without
terminating this Lease, to re-enter the Premises and remove all persons and
property from the Premises. Such property may be removed and stored in a public
warehouse or elsewhere at the cost of and for the account of Tenant.

                  (3)      In the event Landlord elects to re-enter the Premises
under (2) above or takes possession of the Premises pursuant to any proceeding
or notice provided by law or Tenant vacates or abandons the Premises, but
Landlord does not elect to terminate this Lease as provided in this Paragraph
25, Landlord may from time to time without terminating this Lease either recover
from Tenant all rent as it becomes due or relet the Premises or any part thereof
upon such terms and conditions as Landlord in its sole discretion may deem
advisable, with the right of Landlord to make alterations and repairs to the
Premises. In the event of any such reletting, rental and other charges received
by Landlord therefrom shall be applied in the following order: (i) to the
payment of any indebtedness other than rent due hereunder from Tenant to
Landlord, (ii) to the payment of all costs of such reletting, (iii) to the
payment of the cost of any alterations and repairs to the Premises, and (iv) to
the payment of rent and other charges due and unpaid hereunder. The residue, if
any, shall be held by Landlord and applied in payment of future rent and other
charges due hereunder, as the same may become due. In the event the rental and
other charges received by Landlord from such reletting are at any time less than
the then aggregate of (i) through (iv) above, Tenant shall pay such deficiency
to Landlord immediately upon demand therefor, but not more often than monthly.

                  (4)      No re-entry or taking possession, of the Premises by
Landlord pursuant to this Paragraph 25 shall be construed as an election to
terminate this Lease unless a written notice of such intention shall be given to
Tenant or unless such termination shall be decreed by a court of competent
jurisdiction. Notwithstanding any reletting without termination by Landlord
because of any default by Tenant, Landlord may at any time after such reletting
elect to terminate this Lease for any such default.

                                       35.
<PAGE>

                  (5)      In any action f or unlawful detainer commenced by
Landlord against Tenant by reason of any default hereunder, the reasonable
rental value of the Premises for the period of the unlawful detainer shall be
the amount of rent reserved in this Lease for such period, unless Landlord or
Tenant shall prove to the contrary by competent evidence. The rights and
remedies reserved to Landlord herein, including those not specifically
described, shall be cumulative and, except as otherwise provided by then
applicable California law, Landlord may pursue any or all of such rights and
remedies at the same time or otherwise.

                  (6)      Provided that Landlord serves notice in accordance
with the provisions of this Paragraph 25 and Paragraph 23 above, Tenant hereby
waives any notice required by Section 1161 of the California Code of Civil
Procedure.

         (c)      Default by Landlord. Landlord shall not be in default or
breach of this Lease unless Landlord fails to observe or perform an obligation
required under this Lease to be observed or performed by Landlord and such
failure continues for thirty (30) days (except where a different period is
specified in this Lease) after written notice thereof by Tenant to Landlord;
provided, however, that if the nature of such default is such that the same
cannot reasonably be cured within such thirty (30) day period, Landlord shall
not be deemed to be default if Landlord shall within such period commence such
cure and thereafter diligently prosecute the same to completion.

                                  HOLDING OVER

PARAGRAPH 26

         If Tenant holds over after the expiration or earlier termination of the
Term without the express written consent of Landlord, Tenant shall become a
tenant at sufferance only at one hundred fifty percent (150%) of the Basic
Annual Rental, in each case in effect upon the date of such expiration or
earlier termination (subject to such adjustments as may be provided for in
Paragraph 2 above and prorated on a daily basis) and otherwise upon the terms,
covenants and conditions herein specified, so far as applicable. Acceptance by
Landlord of rent after such expiration or earlier termination shall not
constitute a consent to a holdover hereunder or result in a renewal of this
Lease. The foregoing provisions of this Paragraph are in addition to and do not
affect Landlord's right of re-entry or any other rights of Landlord hereunder or
as otherwise provided by law, including without limitation

                                       36.
<PAGE>

Landlord's right to receive damages, consequential and direct, sustained by
reason of Tenant's retention of possession.

                              CONDITION OF PREMISES

PARAGRAPH 27

         (a)      Possession of Premises. Tenant acknowledges that except as may
be expressly specifically provided herein, if at all, neither Landlord nor any
agent of Landlord has made any representation or warranty with respect to the
Premises, the Building or the Project or with respect to the suitability of any
part of the same for the conduct of Tenant's business. The taking of possession
of the Premises by Tenant shall conclusively establish that the Premises and the
Building were at such time in a good and sanitary order, condition and repair
acceptable to Tenant.

         (b)      Surrender of Premises. Upon the expiration or early
termination of this Lease, Tenant shall surrender the Premises to Landlord in
the same condition as existing at the time of the Commencement Date (except for
ordinary wear and tear associated with normal office use and casualty and
condemnation) and free of Hazardous Materials brought onto the Premises by
Tenant or Tenant's Agents. Tenant shall remove all of its personal property as
of the expiration date or termination date, as the case may be. In addition, at
Landlord's option, Landlord may require Tenant to remove all alterations
installed by Tenant or for Tenant's benefit at the Premises. If Tenant shall
remove or restore any such property or alterations, Tenant shall repair any
damage arising from such removal. The terms of this Paragraph 27(b) shall
survive the expiration or earlier termination of this Lease.

                                QUIET POSSESSION

PARAGRAPH 28

         Upon Tenant's paying the rent reserved hereunder and observing and
performing all of the covenants, conditions and provisions On Tenant's part to
be observed and performed hereunder, Tenant shall have quiet possession of the
Premises for the entire Term, subject to all the provisions of this Lease.

                                       37.
<PAGE>

                                NOTICE OF DAMAGE

PARAGRAPH 29

         Tenant shall give prompt notice to Landlord in case of fire or
accidents in the Premises or at the Project or of any defects discovered therein
or in their fixtures or equipment.

                                  GOVERNING LAW

PARAGRAPH 30

         This Lease shall be governed by, and construed in accordance with the
laws of the State of California.

                           COMMON FACILITIES: PARKING

PARAGRAPH 31

         (a)      Right to Use Common Facilities. Tenant shall have the
non-exclusive right, in common with others, to the use of any common entrances,
ramps, drives and similar access and serviceways and other common facilities in
the Project. The rights of Tenant hereunder in and to the common facilities
shall at all times be subject to the rights of Landlord and other tenants and
owners in the Project who use the same in common with Tenant, and it shall be
the duty of Tenant to keep all the common facilities free and clear of any
obstructions created or permitted by Tenant or resulting from Tenant's
operations. Tenant shall not use the common areas of the Building or the
Project, including, without limitation, the Building's electrical room, parking
lot or trash enclosures, for storage purposes. Nothing herein shall affect the
right of Landlord at any time to remove any persons not authorized to use the
common facilities from such facilities or to prevent the use of such facilities
by unauthorized persons.

         (b)      [Intentionally deleted because not incorporated into
Sublease.]

         (c)      Parking. [First sentence intentionally deleted because not
incorporated into Sublease.] The parking spaces shall be used for parking only
by vehicles no larger than full-sized passenger automobiles or pick-up trucks,
and Tenant shall park no vehicles at the Project overnight. Landlord shall have
the right to impose rules and regulations on parking at the Project. Landlord
shall also have the right, in addition to all

                                       38.
<PAGE>

other rights and remedies that it may have under this Lease, to remove or tow
away a vehicle which is in violation of Landlord's rules, without prior notice
to Te ant, and Tenant shall pay the cost thereof to Landlord within ten (10)
days after notice from Landlord to Tenant. Upon any sale by Landlord of any
building located at the Project, Landlord shall have the right to alter the
parking area.

                                     SIGNAGE

PARAGRAPH 32

         Tenant shall not install any signage within the Project, the Building
or the Premises without obtaining the prior written approval of Landlord, and
Tenant shall be responsible for the maintenance of any such signage installed by
Tenant. Any such signage shall comply with Landlord's current Project signage
criteria and all applicable governmental requirements.

                             SUCCESSORS AND ASSIGNS

PARAGRAPH 33

         Except as otherwise provided in this Lease, and subject to the terms of
Paragraph 15 above, all of the covenants, conditions, and provisions of this
Lease shall be binding upon and shall inure to the benefit of the parties hereto
and their respective heirs, personal representatives, successors, and assigns.

                                     BROKERS

PARAGRAPH 34

         [Intentionally deleted because not incorporated into Sublease.]

                                      NAME

PARAGRAPH 35

         Tenant shall not, without the prior written consent of Landlord, use
the name of the Building or the Project for any purpose other than as the
address of the business to be conducted by Tenant in the Premises and in no
event shall Tenant acquire any rights in or to such names.

                                       39.
<PAGE>

                              EXAMINATION OF LEASE

PARAGRAPH 36

         Submission of this Lease for examination or signature by Tenant does
not constitute a reservation of or option for lease, and it is not effective as
a lease or otherwise until execution by and delivery to both Landlord and
Tenant.

                  INTEREST ON TENANT'S OBLIGATIONS; LATE CHARGE

PARAGRAPH 37

         (a)      Any amount due from Tenant to Landlord which is not paid when
due shall bear interest at the lesser of eighteen percent (18%) per annum or the
maximum rate then permitted by law in this context from the date such payment is
due until paid. The rate so determined shall continue in effect following any
default by Tenant pursuant to this Lease. Payment of such interest shall not
excuse or cure any default by Tenant under this Lease.

         (b)      In the event Landlord does not receive any installment of rent
due under this Lease on the date such installment is due, Tenant shall pay
Landlord a late charge equal to five percent (5%) the delinquent installment of
rent. The parties agree that the amount of such late charge represents a
reasonable estimate of the cost and expense that will be incurred by Landlord in
processing each delinquent payment of rent by Tenant and that such late charge
shall be paid to Landlord as liquidated damages for each delinquent payment
pursuant to Section 1671 of the California Civil Code. The parties further agree
that the payment of late charges and the payment of interest provided for in
Paragraph 36(a) above are distinct and separate from one another in that the
payment of interest is to compensate Landlord for its inability to use the money
improperly withheld by Tenant, while the payment of late charges is to
compensate Landlord for its additional administrative expenses in handling and
processing delinquent payments.

                                      TIME

PARAGRAPH 38

         Time is and shall be of the essence of this Lease and each and all of
its provisions.

                                       40.
<PAGE>

                       DEFINED TERMS AND MARGINAL HEADINGS

PARAGRAPH 39

         The words "Landlord" and "Tenant" as used herein shall include the
plural as well as the singular. If more than one person is named as Tenant under
this Lease, the obligations of such persons shall be joint and several. Whenever
under the provisions of this Lease Landlord is required or agrees to take
certain action, Landlord's obligation to do so shall be deemed fulfilled if
Landlord causes such action to be taken by any other person. The marginal
headings and titles to the Paragraphs and other divisions of this Lease are not
a part of this Lease and shall have no effect upon the construction or
interpretation of any part hereof.

                         PRIOR AGREEMENTS: SEVERABILITY

PARAGRAPH 40

         This Lease, including all of the Addenda and Exhibits attached hereto,
contains all of the agreements of the parties hereto with respect to any matter
covered or mentioned in this Lease, and no prior agreement, understanding or
representation pertaining to any such matter shall be effective for any purpose.
No provision of this Lease may be amended or added to except by an agreement in
writing signed by the parties hereto or their respective successors in interest.
If any tern or provision of this Lease the deletion of which would not adversely
affect the receipt of any material benefit by either party hereunder shall be
held invalid or unenforceable to any extent, the remainder of this Lease shall
not be affected thereby and each term and provision of this Lease shall be valid
and enforceable to the fullest extent permitted by law.

                               CORPORATE AUTHORITY

PARAGRAPH 41

         Each individual executing this Lease on behalf of Landlord and Tenant
represents and warrants that (a) such individual has full power and authority to
execute this Lease on behalf of its party, and (b) the execution and delivery of
this Lease have been duly authorized by such party. If Tenant is a corporation
Tenant shall, within ten (10) days after execution of this Lease, deliver to
Landlord a certified copy of a resolution of

                                       41.
<PAGE>

the Board of Directors of Tenant authorizing or ratifying the execution of this
Lease.

                         NO LIGHT, AIR OR VIEW EASEMENTS

PARAGRAPH 42

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

                              LANDLORD'S APPROVALS

PARAGRAPH 43

         In no event shall the review, approval, inspection or examination by
Landlord of any item to be reviewed, approved, inspected or examined by Landlord
under the terms of this Lease be deemed to be an approval of or representation
or warranty as to the adequacy, accuracy, sufficiency or soundness of any such
item or the quality or suitability of such item for its intended use. Any such
review, approval, inspection or examination by Landlord shall be for the sole
purpose of protecting Landlord's interests in the Building and the Project and
under this Lease and no third parties shall have any rights pursuant thereto.

                                EXERCISE FACILITY

PARAGRAPH 44

         Tenant agrees to inform all employees of Tenant of the following: (i)
the exercise facility is available for the use of the employees of tenants of
the Project only and for no other person; (ii) use of the facility is at the
risk of Tenant or Tenant's employees, and all users must sign a release; (iii)
the facility is unsupervised; and (iv) users of the facility must report any
needed equipment maintenance or any unsafe conditions to the Landlord
immediately. Landlord may discontinue providing such facility at Landlord's sole
option at any time without incurring any liability. As a condition to the use of
the exercise facility, Tenant and each of Tenant's employees that uses the
exercise facility shall first sign a written release in form and substance
acceptable to Landlord. Landlord may change the rules and/or hours of the
exercise facility at any time, and Landlord reserves the right to deny access to
the exercise facility to anyone due to misuse of the facility or

                                       42.
<PAGE>

noncompliance with rules and regulations of the facility. Tenant will indemnify,
defend and hold harmless Landlord from any claims, liabilities or damages
resulting from use of the exercise facility in the Project by Tenant, Tenant's
employees or invitees.

                                  MISCELLANEOUS

PARAGRAPH 45

         (a)      At the expiration or earlier termination of this Lease, Tenant
shall execute, acknowledge and deliver to Landlord, within five (5) days after
written demand from Landlord to Tenant, any quitclaim deed or other document as
may be reasonably requested by any title insurance company to remove this Lease
as a matter affecting title to the Premises.

         (b)      [Intentionally deleted because not incorporated into
Sublease.]

WAIVER OF JURY TRIAL

PARAGRAPH 46

         [Intentionally deleted because not incorporated into Sublease.]

                                OPTION TO EXTEND

PARAGRAPH 47

         (a)      [Intentionally deleted because not incorporated into
Sublease.]

                                       43.
<PAGE>

                              CONSTRUCTION ADDENDUM

[Intentionally deleted because not incorporated into Sublease.]

                                       1.
<PAGE>

                                    EXHIBIT A

                                 Plan of project

                                       1.
<PAGE>

                                    EXHIBIT B

[Intentionally deleted because not incorporated into Sublease.]

                                       1.
<PAGE>

                                    EXHIBIT C

[Intentionally deleted because not incorporated into Sublease.]

                               Exhibit C - Page 1.
<PAGE>

                                    EXHIBIT D

[Intentionally deleted because not incorporated into Sublease.]

                               Exhibit D - Page 1.

<PAGE>

                                    EXHIBIT E

[Intentionally deleted because not incorporated into Sublease.]

                                Exhibit E (Page 1

<PAGE>

                                    EXHIBIT F

[Intentionally deleted because not incorporated into Sublease.]

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