Document:

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                                                                    EXHIBIT 10.1

                                  MAXYGEN, INC.

                           CHANGE OF CONTROL AGREEMENT

         This CHANGE OF CONTROL AGREEMENT (the "Agreement"), dated __________,
is made by and between MAXYGEN, INC., a Delaware corporation (the "Company"),
and ___________ (the "Executive").

         WHEREAS, the Company considers it essential to the best interests of
its stockholders to foster the continuous employment of key management
personnel;

         WHEREAS, the Board of Directors of the Company recognizes that, as is
the case with many publicly-held corporations, the possibility of a Change of
Control (as defined herein) exists and that such possibility, and the
uncertainty and questions that it may raise among management, may result in the
departure or distraction of management personnel to the detriment of the Company
and its stockholders; and

         WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
members of the Company's management, including the Executive, to their assigned
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a Change of Control.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Executive agree as follows:

1.  Introduction; Purposes.
    ----------------------

         (a) The purpose of this Agreement is to provide the Executive with
protection of certain benefits in case of a termination of his or her employment
with the Company in connection with a Change of Control of the Company.

         (b) The Company, by means of the Agreement, seeks to (i) secure and/or
retain the services of the Executive and (ii) provide incentives for the
Executive to exert maximum efforts for the success of the Company even in the
face of a potential Change of Control of the Company.

2.  Definitions.
    -----------

         (a)  "Accountants" has the meaning given thereto in Section 4.

         (b)  "ADEA" has the meaning given thereto in Section 5(c).

         (c)  "Agreement" means this Change of Control Agreement.

         (d)  "Board" means the Board of Directors of the Company.

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         (e) "Cause" means the Executive's: (i) willful and continued failure to
substantially perform the Executive's duties with the Company (other than as a
result of physical or mental disability) after a written demand for substantial
performance is deliver to the Executive by the Company, which demand
specifically identifies the manner in which the Company believes that the
Executive has not substantially performed the Executive's duties and that has
not been cured within fifteen (15) days following receipt by the Executive of
the written demand; (ii) commission of a felony (other than a traffic-related
offense) that in the written determination of the Company is likely to cause or
has caused material injury to the Company's business; (iii) dishonesty with
respect to a significant matter relating to the Company's business; or (iv)
material breach of any agreement by and between the Executive and the Company,
which material breach has not been cured within fifteen (15) days following
receipt by the Executive of written notice from the Company identifying such
material breach.

         (f) "Change of Control" means: (i) a dissolution or liquidation of the
Company; (ii) a sale of all or substantially all the assets of the Company;
(iii) a merger or consolidation in which the Company is not the surviving
corporation and in which beneficial ownership of securities of the Company
representing at least fifty percent (50%) of the combined voting power entitled
to vote in the election of directors has changed; (iv) a reverse merger in which
the Company is the surviving corporation but the shares of the common stock of
the Company outstanding immediately before the merger are converted by virtue of
the merger into other property, whether in the form of securities, cash or
otherwise, and in which beneficial ownership of securities of the Company
representing at least fifty percent (50%) of the combined voting power entitled
to vote in the election of directors has changed; (v) an acquisition by any
person, entity or group within the meaning of Section 13(d) or 14(d) of the
Exchange Act, or any comparable successor provisions (excluding any employee
benefit plan, or related trust, sponsored or maintained by the Company or
subsidiary of the Company or other entity controlled by the Company) of the
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act, or comparable successor rule) of securities of the Company
representing at least fifty percent (50%) of the combined voting power entitled
to vote in the election of directors; or, (vi) in the event that the individuals
who are members of the Incumbent Board cease for any reason to constitute at
least fifty percent (50%) of the Board.

         (g)  "Code" means the Internal Revenue Code of 1986, as amended.

         (h)  "Committee" means the Finance Committee of the Board or such other
committee as appointed by the Board to administer this Agreement.

         (i)  "Company" means Maxygen, Inc., a Delaware corporation.

         (j)  "Company-Paid Coverage" has the meaning given thereto in
Section 3(a).

         (k) "Confidential Information, Secrecy and Invention Agreement" has the
meaning given thereto in Section 5(b).

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          (l) "Disability" means the Executive's physical or mental disability
that prevents the Executive from satisfactorily performing the normal duties and
responsibilities of the Executive's office in the good faith determination of
the Committee for a period of more than one hundred twenty (120) consecutive
days.

          (m)  "Effective Date" means the date first above written.

          (n)  "Employee Agreement and Release" has the meaning given thereto in
Section 5(c).

          (o)  "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

          (p)  "Excise Tax" has the meaning given thereto in Section 4.

          (q)  "Executive" means the person identified in the introductory
paragraph of this Agreement.

          (r) "Good Reason" means: (i) any material reduction of the Executive's
duties, authority or responsibilities relative to the Executive's duties,
authority, or responsibilities as in effect immediately before such reduction,
except if agreed to in writing by the Executive; (ii) a reduction by the Company
in the base salary of the Executive, or of twenty-five percent (25%) or more in
the Target Bonus opportunity of such Executive, as in effect immediately before
such reduction, except if agreed to in writing by the Executive; (iii) the
relocation of the Executive to a facility or a location more than thirty (30)
miles from the Executive's then present business location, except if agreed to
in writing by the Executive; (iv) a material breach by the Company of any
provision of this Agreement or (v) any failure of the Company to obtain the
assumption of this Agreement by any successor or assign of the Company.

         (s) "Incumbent Board" means the individuals who, as of the Effective
Date, are members of the Board. If the election, or nomination for election by
the Company's stockholders, of any new director is approved by a vote of at
least fifty percent (50%) of the Incumbent Board, such new director shall be
considered as a member of the Incumbent Board.

         (t) "Section 16 Officer" means an "officer" of the Company, as defined
in Rule 16a-1(f) promulgated under the Exchange Act, designated as such by
action of the Board.

         (u) "Target Bonus" means the Executive's target bonus for the then
current fiscal year, as set by the Board or the appropriate committee thereof.

3.  Severance Benefits in the Event of a Change of Control.
    ------------------------------------------------------

         (a) If within eighteen (18) months following the date of a Change of
Control of the Company either (i) the Company terminates the Executive's
employment other than for Cause, death or Disability or (ii) the Executive
terminates his or her employment with

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the Company voluntarily with Good Reason, then in each case, subject to Section
4 and Section 5: (i) the Executive shall be entitled to receive a lump sum
payment equal to two times the Executive's yearly base salary in effect on the
date of termination (without giving effect to any reduction in base salary
subsequent to a Change of Control that constitutes Good Reason), (ii) each of
the Executive's outstanding stock options, all stock subject to repurchase,
restricted stock awards and restricted stock purchases, and any options, stock
subject to repurchase, awards or purchases held in the name of an estate
planning vehicle for the benefit of the Executive or his or her immediate
family, shall have their vesting and exercisability schedule accelerate in full
(or, as applicable, the corresponding repurchase right shall lapse in full) as
of the date of termination; (iii) if on the date of termination the Executive is
covered by any Company-paid health, disability, accident and/or life insurance
plans or programs, the Company shall provide to the Executive benefits
substantially similar to those that the Executive was receiving immediately
prior to the date of termination (the "Company-Paid Coverage"). If such coverage
included the Executive's spouse and/or dependents immediately prior to the date
of termination, such spouse and/or dependents shall also be covered at Company
expense. Company-Paid Coverage shall continue until the earlier of (x) two (2)
years from the date of termination, or (y) the date that the Executive and his
or her spouse and/or dependents become covered under another employer's health,
disability, accident and/or life insurance plans or programs that provides the
Executive and his or her spouse and/or dependents with comparable benefits and
levels of coverage.

         (b) If within eighteen (18) months following the date of a Change of
Control of the Company the Executive's employment with the Company is terminated
as a result of death or Disability, then in each case, subject to Section 4 and
Section 5: (i) each of the Executive's outstanding stock options, all stock
subject to repurchase, restricted stock awards and restricted stock purchases,
and any options, stock subject to repurchase, awards or purchases held in the
name of an estate planning vehicle for the benefit of the Executive or his or
her immediate family, shall have their vesting and exercisability schedule
accelerated such that vesting (or, as applicable, the corresponding repurchase
right lapsing) shall occur as if the vesting (or lapsing) had occurred on a
monthly basis from the last date of vesting (or lapse) to the date of
termination; and (ii) the Company will provide the Executive with health,
disability, accident and/or life insurance benefits as described in Section
3(a)(iii).

         (c) In no event shall the Executive be obligated to seek other
employment or take any other action to mitigate the amounts payable to the
Executive under this Agreement.

         (d) The Executive's employment shall be deemed to have been terminated
following a Change of Control by the Company without Cause or by the Executive
with Good Reason if the Executive's employment is terminated prior to a Change
of Control without Cause at the direction of a person who has entered into an
agreement with the Company the consummation of which will constitute a Change of
Control or if the Executive terminates his or her employment with Good Reason
prior to a Change of Control if the circumstances or event that constitutes Good
Reason occurs at the direction of such person.

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4.  Parachute Payments; Excise Tax.
    ------------------------------

            In the event that the severance, acceleration of stock options and
other benefits payable to the Executive as a result of a Change of Control of
the Company (i) constitute "parachute payments" within the meaning of Section
280G (as it may be amended or replaced) of the Code and (ii) but for this
Section 4, would be subject to the excise tax imposed by Section 4999 (as it may
be amended or replaced) of the Code (the "Excise Tax"), then the Executive's
benefits payable in connection therewith shall be either

         (a) delivered in full, or

         (b) delivered as to such lesser extent that would result in no portion
of such benefits being subject to the Excise Tax,

whichever of the foregoing amounts, taking into account the applicable federal,
state and local income taxes and the Excise Tax, results in the receipt by the
Executive on an after-tax basis, of the greatest amount of benefits,
notwithstanding that all or some portion of such benefits may be taxable under
the Excise Tax. Unless the Company and the Executive otherwise agree in writing,
any determination required under this Section 4 shall be made in writing in good
faith by the outside accounting firm responsible for auditing the Company's
financial records (the "Accountants"). In the event of a reduction in benefits
hereunder, the Executive shall be given the choice of which benefits to reduce.
For purposes of making the calculations required by this Section 4, the
Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of the Code.

         The Company and the Executive shall furnish to the Accountants such
information and documents as the Accountants may reasonably request in order to
make a determination under this Section 4. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations
contemplated by this Section 4.

5.  Limitations and Conditions on Benefits.
    --------------------------------------

            The benefits and payments provided under this Agreement shall be
subject to the following terms and limitations:

         (a)    Withholding Taxes.  The Company shall withhold required federal,
                -----------------
state and local income and employment taxes from any payments hereunder.

         (b) Confidential Information, Secrecy and Invention Agreement Prior to
             ------------------------------------------------------------------
Receipt of Benefits. The Executive shall have executed and delivered to the
-------------------
Company a standard form of the Company's confidential information, secrecy and
invention agreement, a copy of the current form of which is attached as Exhibit
A (the "Confidential Information, Secrecy and Invention Agreement"), prior to
the receipt or provision of any benefits (including the acceleration benefits)
under this Agreement. Additionally, the Executive agrees that all documents,
records, apparatus, equipment and other physical property that is furnished to
or obtained by the Executive in the course of his or her

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employment with the Company shall be and shall remain the sole property of the
Company. The Executive agrees not to make or retain copies, reproductions or
summaries of any such property, except as otherwise necessary while acting in
the normal course of business. In the event of any material breach by the
Executive of the Confidential Information, Secrecy and Invention Agreement that
is not cured within thirty (30) days of notice of such breach to the Executive,
all benefits payable under Section 4 of this Agreement shall immediately
terminate.

         (c) Employee Agreement and Release Prior to Receipt of Benefits. If the
             -----------------------------------------------------------
Executive's employment with the Company terminates involuntarily other than for
Cause, death or Disability, or the Executive terminates his or her employment
with the Company voluntarily with Good Reason, then prior to, and as a condition
of the receipt of any benefits (including the acceleration benefits) under this
Agreement on account of such termination, the Executive shall, as of the date of
such termination, execute an employee agreement and release in the form attached
as Exhibit B (the "Employee Agreement and Release") prior to receipt of
benefits. Such Employee Agreement and Release shall specifically relate to all
the Executive's rights and claims in existence at the time of such execution and
shall confirm the Executive's obligations under the Company's standard form of
Confidential Information, Secrecy and Invention Agreement. If and only if the
Executive is covered by the federal Age Discrimination in Employment Act of
1967, as amended ("ADEA") (currently all those 40 years of age or over on the
date of termination), the Executive has twenty-one (21) days to consider whether
to execute such Employee Agreement and Release and the Executive may revoke such
Employee Agreement and Release within seven (7) days after execution of such
Employee Agreement and Release. In the event the Executive is covered by ADEA
and does not execute such Employee Agreement and Release within the twenty-one
(21) days specified above, or if the Executive revokes such Employee Agreement
and Release within the seven (7) day period specified above, no benefits
(including the acceleration benefits) under Section 3 of this Agreement shall be
payable or made available to the Executive on account of a termination.

         6. Termination. Prior to a Change of Control of the Company, this
            -----------
Agreement shall automatically terminate on the date the Executive ceases to be a
Section 16 Officer, as evidenced by action of the Board removing the Executive
as a Section 16 Officer or otherwise; provided, however, that if the Executive
ceases to be a Section 16 Officer prior to a Change of Control at the direction
of a person who has entered into an agreement with the Company the consummation
of which will constitute a Change of Control, this Agreement shall not terminate
due to the change in status of the Executive.

         7. At-Will Employment. The Company and the Executive acknowledge that
            ------------------
the Executive's employment is and shall continue to be at-will, as defined under
applicable law. This Agreement shall not be construed as creating an express or
implied contract of employment between the Executive and the Company. The
Executive shall not have any right to be retained in the employment of the
Company.

         8.  Notices.  Any notice provided under this Agreement shall be in
             -------
writing and shall be deemed to have been effectively given (i) upon receipt when
delivered

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personally, (ii) one day after sending when sent by express mail service (such
as Federal Express), or (iii) five (5) days after sending when sent by regular
mail to the following address:

                           In the case of the Company:

                                    Maxygen, Inc.
                                    515 Galveston Drive
                                    Redwood City, CA 94063
                                    Attn: General Counsel

                           In the case of the Executive:

                                    -------------------------
                                    -------------------------
                                    -------------------------
                                    -------------------------

or to such other address as the Company or the Executive hereafter designates by
written notice in accordance with this Section 8.

         9. Litigation/Arbitration Expenses. Reasonable litigation and/or
            -------------------------------
arbitration costs and expenses shall be paid by the Company, win or lose, in
connection with any dispute between the Company (and its successors) and the
Executive concerning this Agreement; provided, however, that if the litigation
or arbitration is found to have been commenced in bad faith by the Executive,
the Executive shall bear all of his or her own costs and expenses in connection
with such litigation or arbitration.

         10. Successors and Assigns. This Agreement is intended to bind and
             ----------------------
inure to the benefit of and be enforceable by the Executive, and the Company,
and any surviving entity resulting from a Change of Control and upon any other
person who is a successor by merger, acquisition, consolidation or otherwise to
the business formerly carried on by the Company, and their respective
successors, assigns, heirs, executors and administrators, without regard to
whether or not such person actively assumes any rights or duties hereunder;
provided, however, that the Executive may not assign any duties hereunder
without the prior written consent of the Company.

         11.  Miscellaneous.
              -------------

         (a) No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
by each of the parties.

         (b) No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party that are not expressly set forth in this Agreement.

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         (c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

         12.  Governing Law.  This Agreement shall be governed by, and construed
              -------------
in accordance with, the laws of the State of California, regardless of the law
that might be applied under applicable principles of conflicts of law.

                                             MAXYGEN, INC.

                                             By:
                                                 ---------------------
                                                 Name:
                                                 Title:

                                             THE EXECUTIVE

                                             -------------------------
                                             Name:

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                                                                       Exhibit A
                                                  to Change of Control Agreement

                                  MAXYGEN, INC.

           CONFIDENTIAL INFORMATION, SECRECY, AND INVENTION AGREEMENT

         This Agreement is entered into on __________, 200__ between Maxygen
("Maxygen" or "the Company"), a Delaware corporation, and ___________________
("Employee").

         In consideration of Employee's employment by Maxygen and the
compensation paid to Employee, this Agreement being a condition of that
employment, Employee and Maxygen agree as follows:

1.       DEFINITIONS
         -----------

         For purposes of this Agreement, the following terms have the following
definitions:

         (a) Confidential Information means proprietary techniques and
confidential information that Maxygen develops, compiles or owns, or that
Maxygen receives under conditions of confidentiality from the entities with
which it has business relationships. Confidential Information may be disclosed
to or developed, learned or acquired by Employee in the course of Employee's
employment with Maxygen, whether or not related to Employee's duties.
Confidential Information is broadly defined, and includes (i) all information
that has or could have commercial value or other utility in the businesses in
which Maxygen is engaged or in which it contemplates engaging, and (ii) all
information that, if disclosed without authorization, could be detrimental to
the interests of Maxygen or the entities with which it has business
relationships, whether or not this information is identified as Confidential
Information. By example, and without limitation, Confidential Information
includes but is not limited to Maxygen's research programs, product development,
biological materials, research methods, related products, technology,
inventions, patent applications, trade secrets or other products and any other
information of value relating to the business affairs and/or fields of interest
of Maxygen, whether communicated orally or in writing, including without
limitation, concepts, techniques, processes, designs, biological materials,
methods for developing or identifying novel products, cost data, and other
technical know-how, financial, research, marketing and personnel information,
and other business information including information with respect to which
Maxygen is under an obligation of confidentiality with any third party.
Confidential Information does not include information: (i) generally known in
the relevant trade or industry; or (ii) known to and freely usable by Employee
before Employee's employment by Maxygen; and Confidential Information shall not
be deemed to be generally known (x) merely because it is embraced by more
general

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information subject to the above, or (y) merely because it is published in
general terms without description of the specific Confidential Information
subject to this section.

         (b) Invention(s) means any and all inventions, discoveries, original
works of authorship, developments, improvements, formulas, techniques, concepts,
data and ideas (whether or not patentable or registrable under copyright or
similar statute) made, conceived, reduced to practice, or learned by Employee,
either alone or jointly with others, that (i) result from work performed by
Employee for Maxygen, (ii) utilize the equipment, supplies, facilities, or
Confidential Information of Maxygen or are made, conceived or completed during
hours in which Employee is employed by Maxygen, or (iii) are related to the
business or the actual or demonstrably anticipated research or development of
Maxygen.

         (c) Trade Secret(s) means all information, know-how, concepts, data,
ideas and materials, however embodied, relating to the business of Maxygen or to
entities with which Maxygen has business relationships, which have not been
released publicly by an authorized representative of Maxygen or have not
otherwise lawfully entered the public domain.

         (d) Effective Date means the date on which this Agreement will become
effective. The Effective Date is the earlier of (i) the beginning of Employee's
employment with Maxygen, or (ii) the date and time at which any Confidential
Information was, or is, first disclosed to Employee.

2.       EMPLOYEE'S PRIOR KNOWLEDGE AND RELATIONSHIPS
         --------------------------------------------

         (a) Prior Knowledge. Except as is disclosed on Exhibit B to this
             ---------------                            ---------
Agreement, Employee does not know anything about the Company's Confidential
Information, other than information learned from Maxygen.

         (b) Prior Relationships. Employee has no other agreements,
             -------------------
relationships, or commitments to any other person or entity that conflict with
Employee's obligations to Maxygen under this Agreement. Employee will not use or
disclose to Maxygen, or induce Maxygen to use or disclose, any confidential
information, trade secret, or proprietary information or material belonging to
any third party. Employee represents and acknowledges that Employee's employment
with Maxygen will not require Employee to violate any obligation to or
confidence with another. Employee represents and warrants that Employee has
returned all property and confidential information belonging to all prior
employers. In the event Employee is sued for breach of any obligation or
agreement to which Employee is a party or is bound, Employee agrees to indemnify
Maxygen fully for all liabilities, costs, verdicts, judgments, settlements,
attorneys' fees and other losses incurred by Maxygen.

3.       PROTECTION OF CONFIDENTIAL INFORMATION
         --------------------------------------

         (a) Employee acknowledges and agrees that Confidential Information
constitutes a valuable asset of Maxygen, and is the sole property of Maxygen.

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     (b) At all times during and after Employee's employment with Maxygen,
Employee will hold in trust, keep confidential and not disclose to any third
party, or make any use of, the Confidential Information of Maxygen or of the
entities with which Maxygen has business relationships, except as may be
necessary in the course of Employee's employment, without the prior written
consent of the Chief Executive Officer of Maxygen. Employee agrees to abide by
policies established by Maxygen for the protection of Confidential Information,
and to take reasonable security precautions to safeguard Confidential
Information, including without limitation, the protection of documents from
theft, unauthorized duplication and discovery of contents, and restrictions on
access by other persons. Employee further agrees not to cause the transmission,
removal, or transport of any Confidential Information from Maxygen's principal
place of business, or any other place of business as specified by the Chief
Executive Officer of Maxygen, except as required in the course of Employee's
employment, without the prior written approval of the Chief Executive Officer of
Maxygen.

     (c) Employee acknowledges that unauthorized use or disclosure of
Confidential Information may be highly prejudicial to the interests of Maxygen
or the entities with which Maxygen has business relationships, an invasion of
privacy, or a misappropriation or improper disclosure of trade secrets.

     (d) Employee acknowledges that all documents including, but not limited to,
software, computer programs, tapes, printouts, records, databases, manuals,
letters, notebooks, reports, blueprints, drawings, sketches, photographs,
customer lists, and other evidence of Confidential Information and other
information concerning the business, operations, or plans of Maxygen or the
entities with which Maxygen has strategic relationships, including copies,
whether produced by Employee or others, are at all times the property of Maxygen
or the entities with which Maxygen has strategic relationships, and will be
treated as Confidential Information.

     (e) Employee acknowledges that Maxygen has received and in the future may
receive confidential or proprietary information from third parties, subject to a
duty on Maxygen's part to maintain the confidentiality of the information and to
use it only for certain limited purposes. Employee agrees to hold all such
confidential or proprietary information in the strictest confidence in
compliance with the terms of any agreement Maxygen may have with such third
parties, and not to disclose it to any person, firm or corporation or to use it
except as necessary in carrying out Employee's duties for Maxygen, consistent
with the terms of any agreement Maxygen may have with such third parties.

     (f) Employee acknowledges that any unauthorized use or disclosure to third
parties of Confidential Information of Maxygen or the entities with which
Maxygen has strategic relationships during employment will lead to disciplinary
action, up to and including immediate termination, and any unauthorized use or
disclosure during or after employment can lead to legal action by Maxygen.

4.   EMPLOYEE'S OBLIGATIONS ON TERMINATION OF EMPLOYMENT
     ---------------------------------------------------

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     (a) Return of Company Property. Upon separation from employment with
         --------------------------
Maxygen for any reason, Employee will promptly deliver to Maxygen all Company
documents and materials pertaining to (i) Employee's employment, (ii) the
Confidential Information of Maxygen or the other entities with which Maxygen has
strategic relationships, and (iii) Inventions of Maxygen (as defined above),
whether prepared by Employee or otherwise coming into Employee's possession or
control, except that Employee may retain personal copies of records relating to
Employee's compensation and this Agreement. Company "documents" include, but are
not limited to, drawings, sketches, photographs, charts, graphs, notebooks,
customer lists, computer disks, tapes or printouts, sound recordings and other
printed, type-written or handwritten documents. Company "materials" include, but
are not limited to, biological materials, including cell lines, plasmids,
vectors and DNA. Employee also agrees to return to Maxygen all equipment, files,
software programs and other personal property belonging to Maxygen on separation
from employment. Employee will not retain any written or other tangible
materials (in hard copy or electronic form) that evidence, contain or reflect
Confidential Information or Inventions of Maxygen.

     (b) Termination  Certificate.  Employee agrees to sign the Termination
         ------------------------
Certificate,  a copy of which is contained in Exhibit A to this Agreement on
                                              ---------
separation from employment.

     (c) Protection of Maxygen's Confidential Information and Inventions. If
         ---------------------------------------------------------------
Employee's employment with Maxygen is terminated for any reason, Employee will
protect the value of Maxygen's Confidential Information and Inventions and will
prevent their theft or disclosure. Employee will not use or disclose
Confidential Information or Inventions for Employee's benefit (or for the
benefit of any third party) or to the detriment of Maxygen, at any time after
separation from employment.

     (d) Non-Interference with Maxygen Employees. Employee agrees that, both
         ---------------------------------------
during employment and for a period of twelve (12) months following separation
from employment for any reason, Employee will not disrupt, damage, impair or
interfere with Maxygen's business by recruiting, soliciting or otherwise
inducing any Maxygen employee or exclusive consultant to enter into employment
or an exclusive consulting relationship with any other business entity that
competes with Maxygen.

     (e) Non-Interference with Maxygen Customers. Employee also agrees that,
         ---------------------------------------
both during employment and for a period of twelve (12) months following
separation from employment for any reason, Employee will not (i) call on,
solicit, or take away (directly or indirectly), or (ii) attempt to call on,
solicit or take away any Maxygen customer or potential customer whom the Company
has identified during the term of Employee's employment with Maxygen, either for
Employee's own benefit or for the benefit of another person or entity, nor will
Employee solicit or induce any customer or potential customer to terminate a
business relationship with Maxygen.

     (f) Legal Sanctions. Employee understands that the unauthorized taking of
         ---------------
any of Maxygen's trade secrets could result in civil liability under the
California Uniform

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Trade Secrets Act (Civil Code ss.ss. 3436-3426.11) and other laws, and that
willful misappropriation may result in an award against Employee for triple the
amount of Maxygen's damages and attorneys' fees in collecting these damages.

5.   INVENTIONS
     ----------

     (a) Disclosure.  Employee will promptly disclose all Inventions to Maxygen
         ----------
in writing.

     (b) Assignment. All Inventions are the sole property of Maxygen or
         ----------
Maxygen's designee. Employee hereby assigns to Maxygen, without royalty or
further consideration to Employee, all right, title, and interest Employee may
have, or may acquire, in and to all Inventions, including but not limited to,
patents and copyrights. Employee agrees that Maxygen or its designee will be the
sole owner of all domestic and foreign patents, patent rights, copyrights, and
other rights pertaining to all these Inventions. Employee further agrees that
all copyrightable materials that Employee prepares, individually or in
cooperation with others, that is specifically requested by Maxygen or
commissioned for use as a contribution to a collective work, or as a
supplementary work, a compilation, or an instructional text, as these terms are
defined by 17 U.S.C. ss.101, will be considered a "work made for hire," as that
term is defined by 17 U.S.C. ss.101.

     (c) Execution of Documents. Whenever requested by Maxygen, Employee will
         ----------------------
promptly sign and deliver to Maxygen, both during and after employment, any and
all applications, assignments and other documents that Maxygen considers
necessary or desirable in order to apply for, obtain, and maintain letters
patent of the United States and to foreign countries for these Inventions, and
to assign and convey to Maxygen or its designee the sole and exclusive right,
title, and interest in and to Inventions or any applications or patents thereon,
or provide any other evidence of the assignment of all rights of Employee, if
any, in any Inventions, and Maxygen's ownership of these Inventions, without
royalty or any other further consideration to Employee.

     (d) Assistance to Maxygen. Whenever requested by Maxygen, both during and
         ---------------------
after employment, Employee will assist Maxygen, at Maxygen's expense, in
obtaining, maintaining, defending, registering and from time to time enforcing,
in any and all countries, Maxygen's right to the Inventions and related
intellectual property rights. This assistance may include, without limitation,
testifying in a suit or other proceeding, executing all documents deemed by
Maxygen to be necessary or convenient for use in applying for, obtaining, and
enforcing patents, copyrights, or other rights, and executing all necessary
assignments to Maxygen or its designee. If Maxygen requires assistance from
Employee after termination of Employee's employment, Employee will be
compensated for time actually spent in providing assistance at an hourly rate
equivalent to Employee's salary or wages upon termination of employment.

     (e) Power of Attorney. If Maxygen cannot obtain Employee's signature on any
         -----------------
document necessary to apply for, prosecute, obtain or enforce any patent,
copyright or other right or protection relating to any Invention, whether due to
Employee's mental

                                       13

<PAGE>

or physical incapacity, or any other reason, Employee hereby irrevocably
designates and appoints Maxygen and each of its duly authorized officers and
agents as Employee's agent and attorney-in-fact, to act for, and on Employee's
behalf, to execute and file any such document and to do all other lawfully
permitted acts to further the prosecution, issuance, and enforcement of patents,
copyrights, or other rights or protections, with the same force and effect as if
executed and delivered by Employee.

     (f) Evidence. Employee agrees, whenever requested to do so by Maxygen, both
         --------
during and after employment, to deliver to Maxygen any evidence required for
legal proceedings and to testify in any such proceedings, and otherwise to
cooperate as reasonably requested by Maxygen in connection therewith.

     (g) Records of Inventions. Employee agrees to keep adequate and current
         ---------------------
written records of all Inventions, in the form of notes, sketches, drawings
and/or reports, which records are, and will remain, the property of Maxygen and
will be available to Maxygen at all times.

     (h) California Labor Code ss. 2870. This Paragraph does not apply to an
         ------------------------------
Invention that is subject to the provisions of Section 2870 of the California
Labor Code, which is reprinted in its entirety in Exhibit B to this Agreement.

6.   EXCLUDED INVENTIONS
     -------------------

     Employee represents that any inventions, original works of authorship,
discoveries, concepts or ideas, if any ("Excluded Inventions"), to which
Employee presently has any right, title or interest, and which were previously
conceived either wholly or in part by Employee, and that Employee desires to
exclude from the operation of this Agreement are identified on Exhibit C of this
Agreement. Employee represents that the list contained in Exhibit C is complete
to the best of Employee's knowledge, and that the exclusion of any Inventions
from the list will not materially affect Employee's ability to perform all
obligations under this Agreement. The Company agrees to receive and hold all
disclosures in confidence.

7.   INJUNCTIVE RELIEF
     -----------------

     Employee acknowledges that it would be difficult for Maxygen to measure
actual damages resulting from any breach by Employee of Paragraphs 2 through 5
of this Agreement, and that money damages alone would be an inadequate remedy
for any such breach. Accordingly, Employee agrees that if Employee breaches any
provision of Paragraphs 2 through 5, Maxygen will be entitled, in addition to
any other remedies it may have, to specific performance, injunctions, or other
appropriate orders to correct or restrain any such breach by Employee, without
showing or proving any actual damage sustained by Maxygen or posting any bond or
other security.

8.   ATTORNEY FEES
     -------------

                                       14

<PAGE>

     If any action is necessary to enforce this Agreement, including any
action under Paragraph 7, the prevailing party will be entitled to recover its
reasonable costs and attorney fees, including reasonable expert witness fees.

9.   NON-COMPETITION
     ---------------

     (a) Employee agrees that, during the term of employment with Maxygen,
Employee will not establish or act, directly or indirectly, by way of ownership,
management or otherwise, whether or not for compensation, as a consultant,
employer, employee, agent, principal, partner, stockholder (other than ownership
of less than 5% of the outstanding capital stock of a publicly-traded
corporation), officer, director or in any other representative or individual
capacity for any business that (i) is similar to, or (ii) is directly
competitive with, or (iii) provides goods or services to any aspect of the
business in which Maxygen is engaged or contemplates engaging.

     (b) Employee agrees not to enter into any agreement that contains any term
that may conflict, either actually or potentially, with the terms of this
Agreement.

     (c) Employee agrees that during the employment term, Employee will not take
for Employee's own use, and will promptly notify Maxygen of, any and all
business opportunities of which Employee becomes aware that relate, directly or
indirectly, to the current or reasonably anticipated future business of Maxygen.

10.  NON-DISPARAGEMENT
     -----------------

     Employee agrees that, during employment with Maxygen and thereafter,
Employee will not make comments, whether oral or in writing, that tend to
disparage or injure Maxygen, its officers, directors, agents, employees,
products and services. Nothing in this Agreement will be construed to preclude
Employee from complying with the terms of a validly issued subpoena.

11.  NOTIFICATION TO NEW EMPLOYER
     ----------------------------

     In the event that Employee's employment with Maxygen terminates for any
reason, Employee hereby grants consent to Maxygen to notify Employee's new
employer about Employee's rights and obligations under this Agreement.

12.  AT-WILL EMPLOYMENT
     ------------------

     This Agreement expressly defines certain obligations of Employee that
will apply during and after Employee's employment with Maxygen. This Agreement
is not a contract of employment and does not alter the employment relationship
between Employee and Maxygen, which at all times remains at will. At will
employment means that Employee's employment and compensation can be terminated
by either party, with or without cause and with or without advance notice.

13.  GENERAL TERMS
     -------------

                                       15

<PAGE>

     (a) Employee agrees that upon the request of Maxygen, Employee will meet
with representatives of Maxygen to review the terms of this Agreement and
Employee's obligations under it.

     (b) Employee will keep Maxygen advised of Employee's home and business
address for a period of three years after termination of Employment, so that
Maxygen can contact Employee regarding the continuing obligations imposed by
this Agreement.

     (c) To the extent any provision of this Agreement, or any portion thereof,
is found to be illegal or unenforceable for any reason, the provision or portion
will be modified or deleted in such manner so as to make the Agreement as
modified legal and enforceable under the applicable laws, and the balance of the
Agreement will be construed as severable and independent.

     (d) This Agreement will be binding upon Employee and Employee's heirs,
executors, assigns, and administrators, and will inure to the benefit of
Maxygen, its successors, designees, and assigns.

     (e) This Agreement will be governed by the laws of the State of California
and will in all respects be interpreted and enforced under the laws of
California, without reference to principles of conflicts of laws.

     (f) Employee and Maxygen specifically agree that any legal action relating
to this Agreement will be instituted and prosecuted in the courts in San Mateo
County, California. Each party hereby waives the right to change venue, and
consents to personal jurisdiction for purposes of any action arising under this
Agreement.

     (g) The language of all parts of this Agreement will in all cases be
construed as a whole, according to its fair meaning and not strictly for or
against either of the parties.

     (h) This Agreement may be signed in two counterparts, each of which shall
be deemed an original.

     (i) The use of the singular in this Agreement includes the plural, as
appropriate.

     (j) This Agreement sets forth the entire Agreement between Employee and
Maxygen with respect to its subject matter, and it fully supersedes any and all
previous oral or written communications, correspondences, representations,
promises, or agreements between the parties relating to this subject. No party
has been induced to enter into this Agreement by, nor is any party relying on,
any representation or warranty outside of those expressly set forth in this
Agreement.

     (k) This Agreement may not be supplemented, changed or otherwise modified
except by an instrument in writing signed by both Employee and an authorized
representative of Maxygen.

                                       16

<PAGE>

     (l) Waiver by Maxygen of a breach of any provision of this Agreement or of
another employee's agreement will not waive any other or subsequent breach by
Employee.

     (m) The following exhibits constitute part of this Agreement and are
incorporated by reference:

     Exhibit A - Termination Certificate
     ---------
     Exhibit B - Written Notification to Employee of California Labor
     ---------   Codess.2870
     Exhibit C - Employee Statement
     ---------

14.  SURVIVAL OF AGREEMENT
     ---------------------

     The rights and obligations of the parties to this Agreement will
survive termination of employment of Employee with Maxygen.

                                       17

<PAGE>

     Employee has carefully read this Agreement, and understands its terms.
Employee has completely filled out Exhibit B, and has received a copy of Exhibit
A, Written Notification to Employee of California Labor Code ss. 2870. Employee
signs this Agreement freely and voluntarily.

EMPLOYEE

Name: _______________________________ Date: _________________________

Signature: __________________________

MAXYGEN, INC.

Name: _______________________________ Date: __________________________

Signature: __________________________

                                       18

<PAGE>

                                    EXHIBIT A
                                    ---------

                            TERMINATION CERTIFICATION
                            -------------------------

     This is to certify that I do not have in my possession, nor have I failed
to return, any devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings, sketches, materials, equipment, other
documents or property or any reproductions of any of these items belonging to
Maxygen, its subsidiaries, affiliates, successors or assigns (collectively "the
Company").

     I further certify that I have complied with, and will continue to comply
with, all the terms of the Maxygen Confidential Information, Secrecy and
Invention Agreement that I signed, including the reporting of any inventions or
original works of authorship, as defined in that Agreement, conceived or made by
me (jointly or with others) that are covered by that Agreement.

     I agree that, in compliance with the Confidential Information, Secrecy and
Invention Agreement, I will preserve as confidential, and not use, any or all
Confidential Information, Inventions, or other information that has or could
have commercial value or other utility in the business in which Maxygen is
engaged or in which it contemplates engaging. I will not use or participate in
the unauthorized disclosure of information that could be detrimental to the
interests of Maxygen, whether or not such information is identified as
Confidential Information.

     I further agree that for a period of twelve (12) months immediately
following the termination of my relationship with the Company for any reason, I
will not either directly or indirectly:

     (a) disrupt, damage, impair or interfere with Maxygen's business by
recruiting, soliciting or otherwise inducing any Maxygen employee or exclusive
consultant to enter into employment or an exclusive consulting relationship with
any other business entity that competes with Maxygen; or

     (b) (i) call on, solicit, or take away (directly or indirectly), or (ii)
attempt to call on, solicit or take away any Maxygen customer or potential
customer whom the Company has identified during the term of Employee's
employment with Maxygen, either for my own benefit or for the benefit of another
person or entity, nor solicit or induce any customer or potential customer to
terminate a business relationship with Maxygen.

                                       19

<PAGE>

     Upon the termination of my employment with Maxygen, I will be employed
by ______________________________ and will be working in connection with the
following projects:

Dated:
      ----------------                      ------------------------------------
                                            [Employee Signature]

                                            ------------------------------------
                                            [Employee Name Printed]

                 Address for Notifications:
                                            ------------------------------------

                                            ------------------------------------

                                            ------------------------------------

                                       20

<PAGE>

                                    EXHIBIT B
                                    ---------

                      WRITTEN NOTIFICATION TO EMPLOYEE OF
                      -----------------------------------
                         CALIFORNIA LABOR CODE ss. 2870
                         ------------------------------

         In accordance with California Labor Code section 2870, you are hereby
notified that your Confidential Information, Secrecy and Invention Agreement
does not require you to assign to Maxygen any invention for which no equipment,
supplies, facility, or trade secret information of Maxygen was used, that was
developed entirely on your own time, and that does not relate to the business of
Maxygen or to Maxygen's actual or demonstrably anticipated research or
development, or does not result from any work performed by you for Maxygen.

         The text of California Labor Code section 2870 is set forth below.

                         CALIFORNIA LABOR CODE ss. 2870
               INVENTION ON OWN TIME -- EXEMPTION FROM AGREEMENT.

         (a) Any provision in an employment agreement which provides that an
         employee shall assign, or offer to assign, any of his or her rights in
         an invention to his or her employer shall not apply to an invention
         that the employee developed entirely on his or her own time without
         using the employer's equipment, supplies, facilities, or trade secret
         information except for those inventions that either:

              (1) Relate at the time of conception or reduction to practice of
         the invention to the employer's business, or actual or demonstrably
         anticipated research or development of the employer; or

              (2) Result from any work performed by the employee for the
         employer.

         (b) To the extent a provision in an employment agreement purports to
         require an employee to assign an invention otherwise excluded from
         being required to be assigned under subdivision (a), the provision is
         against the public policy of this state and is unenforceable.

         I hereby acknowledge receipt of this written notification.

Dated:
      -----------------             ------------------------------------------
                                            [Employee Signature]

                                    ------------------------------------------
                                            [Employee Name Printed]

                                       21

<PAGE>

                                    EXHIBIT C
                                    ---------

                               EMPLOYEE STATEMENT
                               ------------------

     1.       Confidential  Information.  Except as set forth below, I
              -------------------------
acknowledge at this time that I know nothing about the Confidential Information
of Maxygen, except information that has been disclosed to me by Maxygen. If I
know of no such information, I will so state.

     2.       Prior  Inventions.  Except as set forth below, I acknowledge
              -----------------
at this time that I have not made or reduced to practice (alone or jointly with
others) any inventions relevant to the subject matter of my employment with
Maxygen. If there are no such inventions, I will so state.

Dated:
      -----------------             ------------------------------------------
                                    [Employee Signature]

                                    ------------------------------------------
                                    [Employee Name Printed]

                                       22

<PAGE>

                                                                       Exhibit B
                                                  to Change of Control Agreement

                                  MAXYGEN, INC.

                              AGREEMENT AND RELEASE

     I hereby confirm my obligations under the Confidential Information, Secrecy
and Invention Agreement that I have previously entered into with the Company.

     I acknowledge that I have read and understand Section 1542 of the
California Civil Code that reads as follows:

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

I hereby expressly waive and relinquish all rights and benefits under that
section and any law of any jurisdiction of similar effect with respect to my
release of any claims I may have against the Company.

     Except as otherwise set forth in this Agreement and Release (the "Release")
and except for obligation of the Company set forth in the Change of Control
Agreement entered into between the Company and me, I hereby release, acquit and
forever discharge the Company, its parents and subsidiaries, and their officers,
directors, agents, servants, employees, shareholders, successors, assigns and
affiliates, of and from any and all claims, liabilities, demands, causes of
action, costs, expenses, attorneys fees, damages, indemnities and obligations of
every kind and nature, in law, equity, or otherwise, known and unknown,
suspected and unsuspected, disclosed and undisclosed (other than any claim for
indemnification I may have as a result of any third party action against me
based on my employment with the Company), arising out of or in any way related
to agreements, events, acts or conduct at any time prior to and including the
Effective Date of this Release (as defined below), including but not limited to:
all such claims and demands directly or indirectly arising out of or in any way
connected with my employment with the Company or the termination of that
employment, including but not limited to, claims of intentional and negligent
infliction of emotional distress, any and all tort claims for personal injury,
claims or demands related to salary, bonuses, commissions, stock, stock options,
or any other ownership interests in the Company, vacation pay, fringe benefits,
expense reimbursements, severance pay, or any other form of compensation; claims
pursuant to any federal, state or local law or cause of action including, but
not limited to, the federal Civil Rights Act of 1964, as amended; the federal
Age Discrimination in Employment Act of 1967, as amended ("ADEA"); the federal
Americans with Disabilities Act of 1990; the California Fair Employment and
Housing Act, as amended; tort law; contract law; wrongful discharge;
discrimination;

                                       23

<PAGE>

fraud; defamation; emotional distress; and breach of the implied covenant of
good faith and fair dealing; provided, however, that nothing in this paragraph
shall be construed in any way to release the Company from its obligation to (i)
indemnify me pursuant to any applicable indemnification agreement and to provide
me with continued coverage under the Company's directors and officers liability
insurance policy to the same extent that it has provided such coverage to
previously departed officers and directors of the Company or (ii) provide the
benefits to me set forth in the Change of Control Agreement entered into between
the Company and me.

     I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under ADEA. I also acknowledge that the consideration given
for the waiver and release in the preceding paragraph hereof is in addition to
anything of value to which I was already entitled. If and only if I am covered
by ADEA, I further acknowledge that I have been advised by this writing, as
required by the ADEA, that: (A) my waiver and release do not apply to any rights
or claims that may arise after the Effective Date of this Release; (B) I have
the right to consult with an attorney prior to executing this Release; (c) I
have twenty-one (21) days to consider this Release (although I may choose to
voluntarily execute this Release earlier); (D) I have seven (7) days following
the execution of this Release to revoke the Release; and (E) this Release shall
not be effective until the date upon which the revocation period has expired,
which shall be the eighth day after this Release is executed by me (the
"Effective Date"). If I am not covered by ADEA, I acknowledge that this
Agreement shall be effective as of the date upon which this Release has been
executed by me (the "Effective Date").

                  By:
                      -----------------------------------------
                               THE EXECUTIVE

                  Date:
                        ---------------------------------------

                                       24<PAGE>

                                                                    Exhibit 10.2

                                    SUBLEASE
                                    --------

     THIS SUBLEASE (this "Sublease") is dated for reference purposes as of March
30, 2001, and is made by and between CYGNUS, INC., a Delaware corporation
("Sublandlord"), and MAXYGEN, INC., a Delaware corporation ("Subtenant").
Sublandlord and Subtenant hereby agree as follows:

     1. Recitals: This Sublease is made with reference to the fact that Seaport
        --------
Center Venture Phase I, a California General Partnership, as landlord, and
Sublandlord, as tenant, are parties to that certain Lease dated September 27,
1988 ("Original Lease"), and all Schedules, Riders (including Rider No. 1 to
Seaport Center Standard Lease) and Exhibits thereto, as such Lease has been
amended by amendments dated May 15, 1992 ("First Amendment"), August 8, 1992
("Second Amendment") and June 9, 1998 ("Third Amendment") (herein collectively
referred to as the "Master Lease"), with respect to those certain "Premises"
leased by Sublandlord as described in the Master Lease (herein referred to as
the "Premises"), which Premises constitute 32,038 square feet of space
consisting of two (2) buildings commonly known as 701 Galveston Street and 501
Chesapeake Drive, Redwood City, California, as more particularly described in
the Master Lease (collectively referred to as the "Buildings" and individually
referred to as a "Building"). Metropolitan Life Insurance Company, a New York
corporation ("Master Landlord"), is a successor-in-interest to Seaport Venture
Phase I and is currently the landlord under the Master Lease. A copy of the
Master Lease is attached hereto as Exhibit "A" and Subtenant acknowledges
                                   -----------
receipt thereof. Capitalized terms used and not defined herein shall have the
meaning ascribed to them in the Master Lease, whether or not such term is
expressly incorporated herein pursuant to Section 18(a) of this Sublease.

     2. Subleased Premises: Subject to the terms and conditions of this
        ------------------
Sublease, Sublandlord hereby subleases to Subtenant, and Subtenant hereby
subleases from Sublandlord, a portion of the Premises agreed by the parties to
be approximately 11,158 rentable square feet in the Building (the "501
Building") commonly known as 501 Chesapeake Drive, Redwood City, California
(whether or not actually 11,158 rentable square feet) as more particularly
described on Exhibit "B" attached hereto and incorporated herein by reference
             -----------
(the "Subleased Premises").

     3.  Term:
         ----

         (a) Term; Early Access: The term (the "Term") of this Sublease shall be
             ------------------
for the period commencing on the later of (a) May 1, 2001 or (b) the date of
Master Landlord's written consent to this Sublease (the "Sublease Commencement
Date") and ending December 10, 2003, unless this Sublease is sooner terminated
pursuant to its terms or the Master Lease is sooner terminated for any reason
(the "Expiration Date"). Subtenant shall have the right of access to the
Subleased Premises during business hours, subject to all of the provisions of
this Sublease other than payment of Rent (as defined in Paragraph 4(a) below),
at any time between the date of Master Landlord's written consent to this
Sublease and the Sublease Commencement Date solely for the purposes of
performing measurements and space planning, but not for any construction of
alterations, provided that Subtenant shall give Sublandlord reasonable notice in
advance of accessing the Subleased Premises and shall not interfere with the
activities of

                                        1

<PAGE>

Sublandlord within the Subleased Premises or the activities of any tenant or
other occupant of the 501 Building.

         (b) Delay in Delivery and Acceptance; Termination: This Sublease shall
             ---------------------------------------------
not be void or voidable nor shall Sublandlord be liable to Subtenant for any
loss or damage by reason of delay in the Sublease Commencement Date or delay in
Sublandlord delivering possession of the Subleased Premises to Subtenant for any
reason whatsoever; provided, however, that Rent shall abate until Sublandlord
delivers possession of the Subleased Premises to Subtenant and Subtenant shall
have the right to terminate this Sublease by written notice to Sublandlord if
Sublandlord does not deliver possession of the Subleased Premises within five
(5) days after the Sublease Commencement Date. If Subtenant delivers such
written notice of termination to Sublandlord within ten (10) days after the
expiration of said five (5) day period, neither Sublandlord nor Subtenant shall
have any further liability or obligation to the other under or by reason of this
Sublease except that Sublandlord shall return to Subtenant any prepaid Base Rent
and Security Deposit received by Sublandlord. Subtenant has fully inspected the
Subleased Premises and is satisfied with the condition thereof. Subtenant's
taking possession of the Subleased Premises shall be conclusive evidence that
the Subleased Premises were in good order and satisfactory condition when
Subtenant took possession.

     4.  Rent:
         ----

         (a) Base Rent: Commencing on the Sublease Commencement Date and
             ---------
continuing on the first (1st) day of each calendar month throughout the Term,
Subtenant shall pay to Sublandlord base rent for the Subleased Premises in
monthly installments of Thirty Six Thousand Eight Hundred Twenty One Dollars and
40/100ths Dollars ($36,821.40) ("Base Rent"); provided, however, that Subtenant
shall not be required to pay the installment of Base Rent due for the first full
calendar month of the Term. Base Rent, Additional Rent (as defined in Section
4(b) below) and any other charge or sum payable by Subtenant pursuant to this
Sublease are collectively hereinafter referred to as "Rent". Base Rent shall be
paid in advance on the Sublease Commencement Date and thereafter on or before
the first (1st) day of each month during the Term. Rent for any period during
the Term which is for less than one (1) full calendar month shall be a pro rata
portion of the monthly installment based on a thirty (30) day month. Rent shall
be payable without notice or demand and without any deduction, offset,
counterclaim, or abatement, in lawful money of the United States of America.
Rent shall be paid directly to Sublandlord at Cygnus, Inc., 400 Penobscot Drive,
Redwood City, California 94063, Attn: Finance Department, or such other address
as may be designated in writing by Sublandlord.

         (b) Additional Rent: Commencing on the Sublease Commencement Date and
             ---------------
continuing throughout the Term, Subtenant shall pay to Sublandlord as additional
rent ("Additional Rent"):

             (1) The following percentages ("Subtenant's Share") of the
Operating Expenses (as defined below) payable by Sublandlord pursuant to the
Master Lease:

                                        2

<PAGE>

         Type of Expense                                      Subtenant's Share
         ---------------                                      -----------------
         Building Operating Expenses for 501 Building             100%
         Project Operating Expenses                               34.8%
         Phase Operating Expenses                                 34.8%

             (2) Thirty four and eight-tenths percent (34.8%) of all Utilities
(as defined below) payable by Sublandlord with respect to the Project and Phase
I, plus one hundred percent (100%) of the Utilities, if any, payable by
Sublandlord with respect to the 501 Building.

         (c) Definition of Operating Expenses and Utilities: As used in this
             ----------------------------------------------
Sublease, Operating Expenses shall mean those "operating expenses" (including,
without limitation, "Building Operating Expenses", "Project Operating Expenses",
and "Phase Operating Expenses") as defined and described in Paragraph 7 of the
Original Lease and Section 6 of the Third Amendment; provided, however, that
Operating Expenses shall not include any Building Operating Expenses (as defined
in Section 6(v) of the Third Amendment) attributable to any specific Building
other than the 501 Building (unless they constitute Phase Operating Expenses).
As used in this Sublease, Utilities shall mean the "utilities" as defined and
described in Paragraph 8 of the Original Lease, Section 6(c) of the Second
Amendment and Section 7 of the Third Amendment; provided, however, that
Utilities shall not include any utilities separately metered to the Subleased
Premises or any utilities attributable to any specific Building other than the
501 Building (unless they constitute Phase Operating Expenses).

         (d) Operating Expenses Based on Master Landlord Statements:
             ------------------------------------------------------
Notwithstanding Sections 4(b) or (c) above, the parties acknowledge that Master
Landlord currently bills Sublandlord for Operating Expenses on a lump sum basis
(i.e., without itemizing the Operating Expenses). Notwithstanding anything to
the contrary in Sections 4(b) or (c) above, the parties agree that so long as
the Master Landlord bills Sublandlord on a lump sum basis, Subtenant shall pay
to Sublandlord as Additional Rent thirty four and eight-tenths percent (34.8%)
of the amount for Operating Expenses shown on the billing statement received by
Sublandlord from Master Landlord, subject to annual adjustments necessitated by
the annual reconciliation of operating expenses by Master Landlord pursuant to
the Master Lease. Sublandlord and Subtenant agree that should Master Landlord at
any time during Term of this Sublease provide Sublandlord with a breakdown of
the Operating Expenses that specifically allocates such expenses to Building
Operating Expenses, Project Operating Expenses or Phase Operating Expenses or a
breakdown of the Utilities that specifically allocates such Utilities to
Building Utilities, Project Utilities, or Phase Utilities, then Subtenant shall
pay Subtenant's Share of such Operating Expenses or Utilities as provided in
Sections 4(b) and 4(c) above and, to the extent that such breakdown covers
Operating Expenses or Utilities previously paid by Subtenant to Sublandlord, the
parties shall credit or debit Subtenant for any over- or underpayment of
Subtenant's Share. Subtenant shall promptly pay to Sublandlord any sums so
debited to Subtenant.

         (e) Payment of Additional Rent: Subtenant shall pay Sublandlord all
             --------------------------
items of Additional Rent not later than the later to occur of (a) five (5) days
before the date the analogous item of Additional Rent is due under the Master
Lease or (b) five (5) days after Sublandlord's delivery of written demand
therefor to Subtenant. Notwithstanding anything to the contrary in

                                        3

<PAGE>

this Sublease, Subtenant shall not be required to pay (i) any Additional Rent
that is fairly allocable to any period of time prior to the Sublease
Commencement Date or (ii) late charges or penalties payable to Master Landlord
as a result of a default by Sublandlord of any of its obligations under the
Master Lease (except to the extent such default is the result of a default by
Subtenant of any of its obligations under this Sublease).

     5. Security Deposit: Upon execution hereof, Subtenant shall deposit with
        ----------------
Sublandlord the sum of Thirty Six Thousand Eight Hundred Twenty One and
40/100ths Dollars ($36,821.40) (the "Security Deposit"), in cash, as security
for the performance by Subtenant of the terms and conditions of this Sublease.
If Subtenant fails to pay Rent or other charges due under this Sublease or
otherwise defaults beyond applicable notice and cure periods with respect to any
provision of this Sublease, then Sublandlord may draw upon, use, apply or retain
all or any portion of the Security Deposit for the payment of any Rent or other
charge or obligation in default, for the payment of any other sum which
Sublandlord has become obligated to pay by reason of Subtenant's default, or to
compensate Sublandlord for any loss or damage which Sublandlord has suffered by
reason of Subtenant's default (including, without limitation, damage to the
Subleased Premises). If Sublandlord so uses or applies all or any portion of the
Security Deposit, then Subtenant, within ten (10) days after demand by
Sublandlord therefor, shall deposit cash with Sublandlord in the amount required
to restore the Security Deposit to the full amount stated above. Sublandlord may
commingle the Security Deposit with its own funds and Subtenant shall not be
entitled to interest on the Security Deposit. Upon the expiration or earlier
termination of this Sublease and Subtenant's vacation of the Subleased Premises,
Sublandlord shall return to Subtenant so much of the Security Deposit as has not
been applied by Sublandlord pursuant to this paragraph or which is not otherwise
required to cure Subtenant's defaults.

     6. Holdover: Subtenant acknowledges that it is critical that Subtenant
        --------
surrender the Subleased Premises on or before the Expiration Date in accordance
with the terms of this Sublease. Accordingly, Subtenant shall indemnify, defend
and hold harmless Sublandlord from and against any and all losses, costs,
claims, liabilities and damages resulting from Subtenant's failure to surrender
the Subleased Premises on the Expiration Date in the condition required under
the terms of this Sublease (including, without limitation, any and all liability
or damages sustained by Sublandlord as a result of a holdover of the Subleased
Premises by Sublandlord occasioned by the holdover of the Subleased Premises by
Subtenant). The foregoing indemnity shall survive the expiration or sooner
termination of this Sublease. Subtenant has no right to retain possession of the
Subleased Premises or any part thereof beyond the Expiration Date or sooner
termination of this Sublease. If Subtenant remains in possession of the
Subleased Premises or any part thereof after the Expiration Date or sooner
termination of this Sublease, such occupancy shall be a tenancy-at-sufferance at
the Base Rent in effect during the month immediately preceding the expiration or
termination, together with all other sums comprising Rent hereunder, and
otherwise subject to all the provisions of this Sublease. Nothing contained
herein shall be construed as consent by Sublandlord to any holding over by
Subtenant or as a limitation of Subtenant's rights and remedies should Subtenant
hold over.

     7. "AS-IS"; Repairs: Subtenant acknowledges and agrees that Subtenant is
        ----------------
subleasing the Subleased Premises on an "AS-IS" basis in its current "AS-IS"
condition (except that the Premises shall be delivered broom clean) inclusive of
all faults and defects. Subtenant further acknowledges and agrees that except as
expressly provided below, Sublandlord has made

                                        4

<PAGE>

no representations or warranties, express or implied, whatsoever, with respect
to the Subleased Premises (including, without limitation, any representation or
warranty as to fitness, habitability, or suitability for Subtenant's intended
use or purposes). Sublandlord represents that it (a) has not received written
notice of any building code violations applicable to the Subleased Premises, and
(b) the Subleased Premises and Sublandlord's leased premises at 701 Galveston
are separately metered to Pacific Gas & Electric. Sublandlord shall have no
obligation whatsoever to make or pay the cost of any alterations, improvements
or repairs to the Subleased Premises including, without limitation, any
improvement or repair required to comply with any law, regulation, building code
or ordinance (including the Americans with Disabilities Act of 1990, as
amended). In addition, Sublandlord shall have no obligation to make or perform
any repairs, maintenance, replacements or other obligations required to be
performed by Master Landlord under the terms of the Master Lease or otherwise
under the law. Sublandlord shall, however, after receipt of Subtenant's written
request, promptly notify Master Landlord of any nonperformance of Master
Landlord's obligations under the Master Lease that is claimed in Subtenant's
written notice, and request that Master Landlord perform the same, and shall use
Sublandlord's commercially reasonable efforts (not including the payment of
money, the incurring of any liabilities, or the institution of legal
proceedings) to obtain Master Landlord's performance (collectively,
"Sublandlord's Master Lease Enforcement Obligations"). Subtenant hereby waives
the provisions of Section 1932, subsection 1, and Sections 1941 and 1942 of the
Civil Code of California, including any rights as may exist under Section 1942
to make repairs at the expense of Sublandlord.

     If by reason of casualty damage to or destruction or condemnation of the
Subleased Premises during the Term Sublandlord has the right to terminate the
Master Lease pursuant to Paragraphs 24 or 25 of the Master Lease and elects not
to terminate the Master Lease pursuant to said Paragraphs, Subtenant shall have
the right to terminate this Sublease on the same terms and conditions (and
within the same time frame) that Sublandlord has to terminate the Master Lease
pursuant to said Paragraphs 24 or 25 with respect to the Subleased Premises.
Sublandlord shall promptly provide Subtenant with a copy of any notice of
casualty damage submitted by Sublandlord to Master Landlord pursuant to
Paragraph 24 of the Master Lease and with a copy of any notice received from
Master Landlord pursuant to such Paragraph 24 regarding Master Landlord's
architect's determinations with regard to such casualty damage. If the rent
payable by Sublandlord under the Master Lease with respect to the Subleased
Premises is abated by reason of Paragraphs 24 or 25 of the Master Lease, the
Rent payable by Subtenant hereunder for the period of such abatement shall be
abated on a proportionate basis. Subtenant shall not be entitled to any
compensation or damages from Sublandlord or Master Landlord for loss of use of
the whole or any part of the Subleased Premises or any improvements, fixtures or
personal property of Subtenant, or for any inconvenience or annoyance occasioned
by condemnation, fire or other casualty damage to the Subleased Premises or the
501 Building or any repair, reconstruction or restoration performed in
connection therewith. Sublandlord and Subtenant agree that the terms of this
Sublease shall govern the effect of any damage to or destruction or condemnation
of the Subleased Premises or the 501 Building with respect to the termination of
this Sublease and Subtenant hereby waives the provisions of any present or
future statute or rule of law to the extent it is inconsistent herewith.

     8. Assignment and Subletting: In addition to the provisions of Paragraph 15
        -------------------------
of the Master Lease as incorporated herein (requiring, among other things,
Sublandlord's consent to

                                        5

<PAGE>

any proposed assignment or subletting, which consent shall not be unreasonably
withheld, subject to the provisions of said Paragraph 15), Subtenant shall not
assign, pledge, encumber or otherwise transfer any interest in this Sublease,
sublet all or any part of the Subleased Premises, transfer any interest of
Subtenant therein or permit any use of the Subleased Premises by another party
(collectively, "Transfer"), without the prior written consent of Master
Landlord. Subtenant shall not be relieved from any of its obligations under this
Sublease by reason of any Transfer.

     9. Use: Subtenant shall use the Subleased Premises as a bio-processing
        ---
scale-up facility and such other purposes as are permitted under the Master
Lease and for no other purposes whatsoever. Subtenant shall observe and comply
with, and cause all of its agents, employees, contractors, visitors, licensees,
subtenants, invitees, and assignees (collectively "Subtenant Parties") to comply
with, all Rules promulgated by Master Landlord pursuant to the Master Lease.
Neither Master Landlord nor Sublandlord shall be liable for failure of any
person to obey such Rules. Nor shall Master Landlord be obligated to enforce
such Rules against any person. Attachment 1 to Rider No. 1 to the Original Lease
is hereby replaced and superceded in its entirety by Exhibit "C" to this
                                                     ----------
Sublease. Subtenant covenants and warrants that it shall not use or permit any
Subtenant Party to use any Hazardous Materials (as defined in Paragraph 9 of the
Original Lease and Rider No. 1 thereto) on the Subleased Premises, the 501
Building or the Project, except for the use of Permitted Hazardous Materials (as
defined in Rider No. 1 to the Original Lease as modified by this Sublease) in
accordance with the terms of this Sublease (including, without limitation, Rider
No. 1 to the Original Lease as modified by this Sublease).

     10. Effect of Conveyance: As used in this Sublease, the term "Sublandlord"
         --------------------
means the holder of the Lessee's interest under the Master Lease. Sublandlord
may transfer and deliver (by cash or credit) any security of Subtenant to the
transferee of the Lessee's interest under the Master Lease, and thereupon
Sublandlord shall be discharged from any further liability with respect thereto.

     11. Alterations: In addition to the requirements of Paragraph 11 of the
         -----------
Master Lease as incorporated herein (requiring, among other things,
Sublandlord's consent, which shall not be unreasonably withheld, subject to the
provisions of said Paragraph 11), Subtenant shall not make any additions,
alterations, improvements or other modifications to the Subleased Premises or
any part thereof except in accordance with the terms of the Master Lease and
with the prior written consent of Master Landlord. Without limiting the
foregoing, Subtenant shall be responsible, at its sole expense, for the
installation, maintenance and repair of Subtenant's network connection to the
existing network room at the Subleased Premises. Subtenant shall, at its sole
cost, make all modifications, alterations and improvements to the Subleased
Premises and the 501 Building that are required by any applicable local, state
or federal rule, law, regulation or order because of: (i) Subtenant's particular
use of the Subleased Premises or 501 Building; (ii) Subtenant's application for
any building permit or other governmental approval; or (iii) Subtenant's making
of any alteration or improvement to or within the Subleased Premises.

     12. Insurance; Exemption of Sublandlord from Liability.
         --------------------------------------------------

         (a) Subtenant's Liability Insurance. Subtenant, at its sole expense,
             -------------------------------
shall obtain and keep in full force and effect during the Term such insurance,
in such amounts, as are required to be obtained and kept by Lessee under
Paragraph 20 of the Master Lease. Without

                                        6

<PAGE>

limiting the foregoing, Subtenant shall, at its sole expense, cause Sublandlord
and Master Landlord to be named as additional insureds under the liability
policy(ies) required to be maintained by Subtenant. Subtenant and Sublandlord
shall each obtain from their respective property insurers a waiver of all rights
of subrogation as set forth in Paragraph 19 of the Master Lease. The other
waivers contained in Paragraph 19 of the Master Lease shall apply as between
Subtenant and Sublandlord.

         (b) Exemption of Sublandlord from Liability. Sublandlord shall not be
             ---------------------------------------
liable to Subtenant or anyone else for any harm, injury (including illness and
emotional distress), death or damage to (i) the person or goods, wares,
merchandise or other property of Subtenant, any Subtenant Party, or any other
person on or traveling to or from the Subleased Premises, or (ii) Subtenant or
its business, whether such damage or injury is caused by or results from fire,
steam, electricity, gas, water or rain, or from the breakage, leakage,
obstruction or other defects or pipes, fire sprinklers, wires, appliances,
plumbing, HVAC or lighting fixtures, or from any variation or interruption of
utility (including telecommunications) services, or from any other cause,
including where the said injury or damage results from Sublandlord's or its
employees', agents', or contractors' acts or omissions or from any other sources
or places, but not to the extent the said injury or damage results from the
gross negligence or willful misconduct of Sublandlord or its employees, agents
or contractors. Sublandlord shall not be liable for any damages arising from any
act or neglect of any other tenant or subtenant of the Project. Notwithstanding
Sublandlord's negligence or breach of this Sublease, Sublandlord shall under no
circumstances be liable for injury to Subtenant's business or for any loss of
income or profit therefrom or for any other consequential damages suffered by
Subtenant.

     13. No Liability for Master Landlord Defaults. Sublandlord shall not be
         -----------------------------------------
liable to Subtenant for any defaults by Master Landlord under the Master Lease,
nor shall Subtenant be entitled to terminate this Sublease or to abate Rent
(except as provided in Section 7 above) for any reason including, without
limitation, (a) the failure, curtailment, stoppage, suspension or interruption
of any utility or service furnished to the Subleased Premises or the 501
Building, whether by Master Landlord or anyone else, or (b) the failure of
Master Landlord to keep, maintain, repair or replace the Subleased Premises as
may be required under the Master Lease; provided, however, if an express
provision of the Master Lease gives Sublandlord the right to terminate the
Master Lease upon the occurrence of any event described in (a) or (b) and
Sublandlord elects not to terminate the Master Lease pursuant to such provision,
Subtenant shall have the right to terminate this Sublease on the same terms and
conditions (and within the same time frame) that Sublandlord has to terminate
the Master Lease pursuant to such provision).

     14. Self-Help: If Subtenant fails to perform any affirmative duty or
         ---------
obligation of Subtenant under this Sublease, within ten (10) days after written
notice to Subtenant, Sublandlord may, at its option (but without obligation to
do so), perform such duty or obligation on Subtenant's behalf. The actual and
reasonably expended costs and expenses of any such performance by Sublandlord
shall be due and payable by Subtenant to Sublandlord within five (5) business
days after Subtenant's receipt of Sublandlord's invoice therefor.

     15. Surrender: On or before the Expiration Date or the earlier termination
         ---------
of this Sublease, Subtenant shall remove all of its trade fixtures, furnishings,
equipment and other personal property and all alterations constructed or
installed by Subtenant in the Subleased

                                        7

<PAGE>

Premises which Sublandlord designated for removal at the time Sublandlord
approved the construction or installation of such alterations in the Subleased
Premises, and shall surrender the Subleased Premises to Sublandlord in (a) good
condition, order and repair, reasonable wear and tear and casualty damage or
destruction covered by Paragraph 24 of the Master Lease excepted, and (b) free
of any Hazardous Materials used, stored, handled, manufactured, transported,
released, discharged, introduced, emitted or disposed of by Subtenant or any
Subtenant Party. Subtenant shall repair any damage to the Subleased Premises,
the 501 Building or any other part of the Project resulting from the removal of
Subtenant's trade fixtures, furnishings, equipment, personal property and
alterations, and, at Sublandlord's sole election, Subtenant shall restore the
Premises to a condition equivalent in all material respects to the condition
that existed as of the Sublease Commencement Date (which may require Subtenant
to reconstruct improvements that were in existence on the Sublease Commencement
Date but that were subsequently removed by Subtenant); provided, however, that
Subtenant shall not be required to reconstruct or remove any improvements
unless, at the time Sublandlord approved the alteration of the Subleased
Premises, Sublandlord conditioned its approval on such subsequent reconstruction
or removal. Sublandlord may require the removal at any time of any or all
alterations to the Subleased Premises made by or on behalf of Subtenant without
the prior written consent of Sublandlord and Master Landlord. If the Subleased
Premises are not surrendered as required by this Section 15, then, in addition
to all other rights and remedies of Sublandlord, Subtenant shall be liable to
Sublandlord for the actual and reasonably expended costs incurred by Sublandlord
in returning the Subleased Premises to the required condition, plus interest
thereon until paid at the prime interest rate plus four percent (4%) or, if
lower, at the highest, non-usurious rate permitted by law. The provisions of
this Section 15 shall survive the expiration or earlier termination of this
Sublease.

     16. Brokers. The parties acknowledge that Tory Corporate Real Estate
         -------
Advisors, Inc. (doing business as The Staubach Company) ("Sublandlord's Agent")
has represented Sublandlord in this transaction and that Cresa Partners
("Subtenant's Agent") has represented Subtenant in this transaction. Sublandlord
and Subtenant each represent and warrant to the other that, except for the
aforementioned brokers, neither has hired or engaged a real estate broker,
salesman, agent or finder who is or will be entitled to a commission, fee or
other compensation by reason of the transaction contemplated under this
Sublease. Sublandlord shall pay Sublandlord's Agent a real estate commission
pursuant to a separate contractual agreement and not pursuant to the terms of
this Sublease. Sublandlord shall have no obligation to pay Subtenant's Agent any
commission or other compensation. Subtenant and Sublandlord each agree to
indemnify and hold the other harmless from and against any and all claims for
brokerage commissions, finder's fees or other compensation made against the
indemnified party by any agent, broker, salesman or finder as a consequence of
the indemnifying party's actions or dealings with such agent, broker, salesman,
or finder. The provisions of this Section 16 shall survive the expiration or
earlier termination of this Sublease.

     17. Notices: Unless at least five (5) business days' prior written notice
         -------
is given in the manner set forth in this paragraph, the address of each party
for all purposes connected with this Sublease shall be that address set forth
below their signatures at the end of this Sublease. All notices, demands or
communications in connection with this Sublease shall be properly addressed and
delivered as follows: (a) personally delivered; or (b) submitted to a nationally
recognized overnight courier service, charges prepaid; or (c) deposited in the
mail (certified,

                                        8

<PAGE>

return-receipt requested, and postage prepaid). Notices shall be deemed
delivered upon receipt (which shall include receipt by the front desk, mail or
delivery room or other package or mail repository located at the address for
delivery). All notices given to Master Landlord under the Master Lease shall be
considered received only when delivered in accordance with the Master Lease.

     18. Other Sublease Terms:
         --------------------

         (a) Incorporation by Reference: Except as otherwise provided below in
             --------------------------
this Section 18(a), the terms and conditions of this Sublease shall include all
of the terms and conditions of the Master Lease, and except as otherwise
expressly provided to the contrary in this Sublease, such terms and conditions
are incorporated into this Sublease as if fully set forth herein, except that:
(i) each reference in such incorporated terms and conditions to "Lease" shall be
deemed a reference to this "Sublease", each reference therein to "monthly base
rent" shall be deemed a reference to the "Base Rent" payable under this
Sublease, each reference therein to "rent" shall be deemed a reference to the
"Rent" payable under this Sublease, and each reference to "term commencement
date" or "commencement date" shall be deemed a reference to the "Sublease
Commencement Date"; (ii) each reference in such incorporated terms and
conditions to the "premises" or "Premises" shall be deemed a reference to the
"Subleased Premises", each reference to the "term" of the Master Lease shall be
deemed a reference to the "Term" of this Sublease, and each reference to the
"building" shall be deemed a reference to the 501 Building (except where such
reference is intended to refer to a building in the Project other than the 501
Building); (iii) each reference in such incorporated terms and conditions to
"Lessor" and "Lessee" shall be deemed a reference to "Sublandlord" and
"Subtenant", respectively; (iv) with respect to damage caused by Master Landlord
and work, services, utilities, electricity, repairs, restoration, insurance,
indemnities, reimbursements, representations or warranties provided or to be
provided by Master Landlord, or the performance of any other obligation of
Master Landlord under the Master Lease, Sublandlord shall not be required to
perform such obligation(s) of Master Landlord, but Sublandlord shall perform
Sublandlord's Master Lease Enforcement Obligations; (v) with respect to any
obligation of Subtenant to be performed under this Sublease, wherever the Master
Lease expressly grants to Sublandlord (as "Lessee") a specified number of days
to perform its obligations under the Master Lease, except as otherwise provided
herein, Subtenant shall have five (5) fewer days to perform the obligation
including, without limitation, curing any defaults; (vi) with respect to any
approval required to be obtained from the Master Landlord (as "Lessor") in
connection with the Master Lease, such approval must be obtained from both
Master Landlord and Sublandlord, and Sublandlord's withholding of approval shall
in all events be deemed reasonable if after making commercially reasonable
efforts (which shall not include the payment of money, the incurring of any
liabilities, or the institution of legal proceedings) to obtain Master
Landlord's approval, Sublandlord is unable to obtain Master Landlord's approval;
(vii) in any case under the Master Lease where the Master Landlord (as "Lessor")
reserves or is granted the right to manage, supervise, control, repair, alter,
regulate the use of, enter, access or use the Subleased Premises or any areas
beneath, above or adjacent thereto, such reservation or grant shall be deemed to
be for the benefit of both Master Landlord and Sublandlord; (viii) in any case
under the Master Lease where Sublandlord (as "Lessee") indemnifies, releases or
waives claims against Master Landlord (as "Lessor") or agrees that Master
Landlord shall not be liable, such indemnity, release, waiver or agreement (but
only with respect to the Subleased Premises and Subtenant's use thereof) shall
be deemed to run from

                                        9

<PAGE>

Subtenant in favor of both Master Landlord and Sublandlord; (ix) in any case
under the Master Lease where Sublandlord (as "Lessee") is to execute and deliver
certain documents or notices to Master Landlord (as "Lessor"), such obligation
shall be deemed to run from Subtenant to both Master Landlord and Sublandlord;
and (x) the following modifications shall be made to the Master Lease as
incorporated herein:

          (1) The following provisions of the Master Lease are expressly not
incorporated herein: Paragraphs 1, 2, 3, 4, 5, 6 and 7 of the Original Lease;
the second sentence of Paragraph 8 of the Original Lease; the last grammatical
paragraph of Paragraph 15 of the Original Lease; Paragraph 16 of the Original
Lease; the last sentence of Paragraph 17 of the Original Lease; Paragraph 18 of
the Original Lease; Paragraph 24 of the Original Lease, excluding the first and
second grammatical paragraphs thereof; Paragraph 26(g) of the Original Lease;
Paragraph 28 of the Original Lease; Paragraph 30 of the Original Lease;
Paragraph 32 of the Original Lease; the words "subject to subparagraph (b)
below," appearing in Paragraph 33(a) of the Original Lease; the words "and any
Options", "and such Options", "or such Options", "or any Options" appearing in
Paragraph 33(a) of the Original Lease; Paragraph 33(b) of the Original Lease;
Paragraph 34(b) of the Original Lease; Paragraphs 35, 36 and 37 of the Original
Lease; Paragraphs 38, 39, 40 and 41 of the Original Lease; Paragraphs 42(x),
(xvi) and (xviii) of the Original Lease; and Exhibits A1, B, and C to the
Original Lease; the First Amendment in its entirety; Paragraphs 1 and 2, the
first two (2) grammatical paragraphs of Paragraph 3, and Paragraphs 4, 5, 6, 7,
9, 10 and 11 of the Second Amendment; and the entirety of the Third Amendment.

          (2) References to "Lessor" in the following provisions of the Master
Lease shall not be deemed a reference to Sublandlord but shall mean Master
Landlord only: Paragraph 12(b) of the Original Lease; the first and second
grammatical paragraphs of Paragraph 24 of the Original Lease; excluding the
eighth sentence of such first grammatical paragraph; Paragraph 25 of the
Original Lease; the fourth sentence of the second grammatical paragraph of
Paragraph 9 of the Original Lease; and Section 1.4.2 of Rider No. 1 to the
Original Lease. Without limiting Sublandlord's Master Lease Enforcement
Obligations, Sublandlord provides no assurance that Master Landlord will perform
any of the above provisions.

          (3) References to "Lease" in the following provisions of the Master
Lease shall not be deemed a reference to this Sublease but shall mean the Master
Lease only: the first and second grammatical paragraphs of Paragraph 24 of the
Original Lease; Paragraph 25 of the Original Lease; the fourth sentence of the
second grammatical paragraph of Paragraph 9 of the Original Lease; Section 1.4.2
of Rider No. 1 to the Original Lease; and Section 8 of the Second Amendment.

          (4) References to "Lessee" in the following provisions of the Master
Lease shall not be deemed a reference to Subtenant but shall mean Sublandlord
only: the first grammatical paragraph of Paragraph 24 of the Original Lease,
excluding the eighth and twelfth sentences of such first grammatical paragraph;
Paragraph 25 of the Original Lease.

          (5) Any right to abate Rent provided to Subtenant through
incorporation of the provisions of the Master Lease shall not exceed the rent
actually abated under the Master Lease with respect to the Subleased Premises.

                                       10

<PAGE>

          (6) References to "Lessor" in the following provisions of the Master
Lease incorporated herein shall be not be deemed a reference to Sublandlord only
but shall be deemed references to both Master Landlord and Sublandlord: the
eighth and eleventh sentences of the first grammatical paragraph of Paragraph 24
of the Original Lease; the second appearance of "Lessor" in the twelfth sentence
of the first grammatical paragraph of Paragraph 24 of the Original Lease; the
second grammatical paragraph of Paragraph 24 of the Original Lease; Paragraph
15(a) of the Original Lease; the first sentence of Paragraph 17; the seventh
grammatical paragraph of Paragraph 15; and Sections 1.6 and 1.7 of Rider No. 1.

          (7) The word "grossly" shall be inserted between the words "the" and
"negligent" in the 18th line of the first grammatical paragraph of Paragraph 23
of the Master Lease as incorporated herein. The word "property" shall be
inserted between the words "current" and "insurance" in the second line of the
second grammatical paragraph of Paragraph 19 of the Original Lease. The words
"or Master Landlord" shall be inserted between the words "Lessor" and "or" in
the seventh line of Paragraph 42(xvii) of the Original Lease. The words "or the
Original Lease (to the extent . . . of the Original Lease)" in Paragraph 26(c)
of the Original Lease are hereby deleted. The reference to "Cygnus Research
Corporation, a California corporation ("Cygnus")" contained in Section 1.2 of
Rider No. 1 shall be deleted and replaced with "Maxygen, Inc. a Delaware
corporation ("Maxygen") and each reference to "Cygnus" thereafter appearing in
Rider No.1 shall be deleted and replaced with "Maxygen". The following new
clause (vii) shall be added to Section 1.10.1(e) of Rider No. 1 immediately
after existing clause (vi): "or (vii) any toxicological agent.". Each reference
to "Paragraph 9 of the Lease" contained in Rider No. 1 shall be deemed to refer
to Paragraph 9 of the Original Lease as incorporated in this Sublease. Each
reference to "Paragraph 15 of the Lease" or "Paragraph 23 of the Lease" shall be
deemed to refer to Paragraph 15 of the Original Lease or Paragraph 23 of the
Original Lease (as applicable) as incorporated in this Sublease. Each reference
to "Paragraph 28 of the Lease" contained in Rider No. 1 shall be deemed a
reference to Section 15 of this Sublease. The reference to "paragraph 7 of the
Lease" contained in Rider No. 1 shall be deemed a reference to Section 4(b) of
this Sublease.

         (b) Sublease Subordinate to Master Lease; Performance: This Sublease
             -------------------------------------------------
and the rights of Subtenant hereunder are, and at all times shall be, subject
and subordinate to the Master Lease and the rights of Master Landlord
thereunder, and Subtenant shall at no time use or permit the use of the
Subleased Premises so as to cause a breach, default or violation of the Master
Lease. Subtenant hereby agrees to perform the "Lessee's" obligations under the
Master Lease, except as expressly modified or deleted as provided in this
Sublease. Subtenant agrees to be bound by all of the terms and conditions of the
Master Lease. In the event of any conflict between the provisions of the Master
Lease and the provisions of this Sublease, the provisions of this Sublease shall
control. Termination of the Master Lease shall terminate this Sublease at Master
Landlord's discretion, and such termination shall be without any liability
whatsoever to Sublandlord provided that the termination is not the result of
Sublandlord's material breach of the Master Lease.

     19. Parking: During the Term, Subtenant shall have the non-exclusive right
         -------
to use with Sublandlord and other tenants and occupants of the 501 Building and
the balance of the Project a pro rata share of undesignated parking spaces in
the common parking areas of the Project available to Sublandlord for its use
under the Master Lease and subject to the provisions

                                       11

<PAGE>

concerning parking set forth in the Master Lease. Subtenant's pro rata share
shall be 36 undesignated spaces, which is equal to 3.3 spaces per 1,000 rentable
square feet of the Subleased Premises. Subtenant agrees that Subtenant,
Subtenant's employees, agents and representatives shall not use parking spaces
in excess of said pro rata share of undesignated parking spaces available to
Subtenant hereunder. Subtenant acknowledges that the parking spaces being made
available to Subtenant hereunder are not reserved and are subject to use, on a
first come first serve basis, by Sublandlord and other tenants and authorized
users of the Project.

     20. Signage: Subtenant shall have the right, at Subtenant's sole cost and
         -------
expense, to have building standard signage placed at the entry door to the
Subleased Premises and in various other locations in the Subleased Premises,
subject to obtaining in each instance the prior written consent thereto of
Sublandlord and Master Landlord. Sublandlord agrees not to unreasonably withhold
its consent to any such signage. Subtenant shall not otherwise place any signs
on any part of the Subleased Premises, the 501 Building or Project.

     21. Condition Precedent: Notwithstanding anything to the contrary in this
         -------------------
Sublease, this Sublease and the parties' obligations hereunder are conditioned
upon Sublandlord's receipt of the written consent of Master Landlord to this
Sublease in form and substance satisfactory to both Sublandlord and Subtenant.
If Sublandlord does not receive and provide Subtenant with a copy of the Master
Landlord's consent as described above within forty (40) days after execution of
this Sublease by Sublandlord, then either Sublandlord or Subtenant may terminate
this Sublease by giving the other written notice thereof, and upon such
termination neither party shall have any further liability or obligation to the
other under or by reason of this Sublease except that Sublandlord shall return
the Security Deposit to Subtenant.

     22. Amendment: This Sublease may not be amended or otherwise modified
         ---------
except by the written agreement of Subtenant and Sublandlord.

     23. Counterparts: This Sublease may be executed in one (1) or more
         ------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one (1) and the same instrument. Signature copies may
be detached from the counterparts and attached to a single copy of this Sublease
physically to form one (1) document.

     24. No Drafting Presumption: The parties acknowledge that this Sublease has
         -----------------------
been agreed to by both the parties, that both Sublandlord and Subtenant have
consulted with their independent attorneys with respect to the terms of this
Sublease, and that no presumption shall be created against Sublandlord because
Sublandlord caused this Sublease to be drafted.

     25. Successors and Assigns: Subject to the limitations described in Section
         ----------------------
8 of this Sublease, this Sublease shall inure to the benefit of, and shall be
binding upon, the parties' respective heirs, estates, successors and assigns.

                                       12

<PAGE>

         IN WITNESS WHEREOF, Sublandlord and Subtenant have executed this
Sublease as of the day and year first above written.

SUBLANDLORD:                               SUBTENANT:

CYGNUS, INC., a Delaware corporation       MAXYGEN, INC., a Delaware corporation

By:      /s/ Neil R. Ackerman              By:      /s/ Howard Simon
   -------------------------------------      ----------------------------------
Print:   Neil R. Ackerman                  Print:   Howard Simon
      ----------------------------------         -------------------------------
Title:   Sr. V.P.                          Title:   VP HR & Administration
      ----------------------------------         -------------------------------
Address: 400 Penobscot Drive               Address: 515 Galveston Drive

Redwood City, California 94063             Redwood City, California 94063

Attn: President and CEO                    Attn: General Counsel

Date:    March 30, 2001                    Date:    March 30, 2001
     -----------------------------------        --------------------------------

                                       13

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