Document:

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                                                                   Exhibit 10.28

                             LEASE BY AND BETWEEN

                      THE REALTY ASSOCIATES FUND IV, L.P.

                                      and

                                  NOOSH, INC.

                                      of

                             THE HILLSITE BUILDING
                               75 SECOND AVENUE
                         NEEDHAM, MASSACHUSETTS 02192

                                    DATED:

                             October _______, 1999
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                             STANDARD OFFICE LEASE

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<S>                                                  <C>
1.   Basic Lease Provisions.

     1.1   Date:                                   October ______, 1999
     1.2   Landlord:                               The Realty Associates Fund IV, L.P.
     1.3   Tenant:                                 Noosh, Inc., a California corporation
     1.4   Building Address:                       The building known as and numbered The Hillsite Building, 75 Second Avenue,
                                                   Needham, Massachusetts.
     1.5   Suite Number(s):                        Suite 230
     1.6   Rentable Area of Premises:              Approximately 4,230 rentable square feet on the second floor of the Building.
     1.7   Use:                                    General office use, subject to the requirements and limitations contained in
                                                   Section 6.
     1.8   Term:                                   Three (3) years
     1.9   Commencement Date:                      November 1, 1999
     1.10  Monthly Base Rent and Tenant
           Electricity Cost:                       Base Rent: $10,222.50 per month ($122,670.00 annually [($29.00 x 4,230])

                                                   Initial Tenant Electricity Cost: $4,653.00 per year / $387.75 per month ($1.10
                                                   x 4,230). See Section 4.1.

                                                   Initial Tenant Electricity Rate: $1.10 per rentable square foot. See Section
                                                   4.1.

     1.11  Base Rent Paid Upon Execution:          $10,222.50
                 Applied To:                       November 1, 1999
     1.12  Security Deposit:                       $62,000.00
     1.13  Tenant's Percentage Share:              4.0%
     1.14  Base Years:                             a) Tax Base Year: Actual Fiscal Tax Year 2000
                                                   (July 1, 1990 - June 30, 2000).

                                                   b) Operating Cost Base Year: Actual Calendar Year 1999.

     1.15  Number of Parking Spaces:
                 Unreserved:                       Tenant shall have the right to use the unreserved spaces in the parking areas
                                                   serving the building (including the adjacent parking garage) on a non-
                                                   exclusive, "as available" basis, provided, however, that Tenant shall not have
                                                   the right to use more than twelve (12) spaces in the parking garage.

     1.16  Intentionally Deleted; Initial Monthly
           Parking Rates.

     1.17  Real Estate Broker:
                  Landlord:                        Insignia/ESG
                                                   One Financial Center
                                                   Boston, Massachusetts 02111
                                                   Attention:  Andrew Majewski or Patrick Cavanagh

                  Tenant:                          Merideth & Grew
                                                   160 Federal Street
                                                   Boston, Massachusetts 02110
                                                   Attention: James Elcock
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<TABLE>
<S>                                                <C>
     1.18  Exhibits Attached to Lease:             Exhibit A - "Premises"; Exhibit B -"Verification Letter"; Exhibit C -"Rules and
                                                   Regulations"; Exhibit D - "Letter of Credit"

     1.19  Addresses for Notices:
                  Landlord:                        THE REALTY ASSOCIATES FUND IV, L.P.
                                                   c/o TA ASSOCIATES REALTY
                                                   28 State Street, 10th Floor
                                                   Boston, Massachusetts 02109
                                                   Attention: Ms. Janene P. Behler

                  With a Copy to:                  FINARD & COMPANY, INC.
                                                   3 Burlington Woods Drive
                                                   Burlington, Massachusetts 01803
                                                   Attention:  Ms. Laura Vosburgh Marshall

                  Tenant:                          NOOSH, INC.
                                                   3401 Hillview Avenue, Building B
                                                   Palo Alto, California 94304
                                                   Attention: Ann Marie Cady
</TABLE>

     1.20 Interpretation.  The Basic Lease Provisions shall be interpreted in
conjunction with all of the other terms and conditions of this Lease.  Other
terms and conditions of this Lease modify and expand on the Basic Lease
Provisions.  If there is a conflict between the Basic Lease Provisions and the
other terms and conditions of this Lease, the other terms and conditions shall
control.

2.   Premises.

     2.1  Lease of Premises and Definition of Project.  The "Premises" shall
mean the area shown on Exhibit "A" to this Lease.  Landlord hereby leases to
Tenant, and Tenant hereby leases from Landlord, upon all of the conditions set
forth herein the Premises, together with certain rights to the Common Areas as
hereinafter specified.  The Premises shall not include an easement for light,
air or view.  The building of which the Premises is a part (the "Building"), the
Common Areas (as defined below), the land upon which the same are located, along
with all other buildings and improvements thereon or thereunder, including all
parking facilities and the additional parking area covered by the ground lease
dated September 21, 1987 from HRC Tower Corp. to Gerald W. Blakey, Jr. and
Robert C. Linnell, Trustees of Hillsite Office Trust (a predecessor-in-interest
to the Landlord) during the term of said ground lease and any extensions or
amendments thereto, are herein collectively referred to as the "Project."  The
additional parking area covered by the foregoing ground lease was, to the best
of Landlord's knowledge and belief, not necessary to comply with any applicable
ordinances or regulations at the time the Project was constructed.

     2.2  Calculation of Size of Building and Premises.  The number of rentable
square feet included within the Building has been calculated in accordance with
the methods of measuring rentable square feet, as that method is described in
the American National Institute Publication ANSI Z65.1-1996, as promulgated by
the Building Owners and Managers Association (the "BOMA Standard").  The number
of rentable square feet in the Premises has been calculated by measuring the
number of usable square feet within the Premises calculated in accordance with
the BOMA Standard and increasing the number of usable square feet by nineteen
percent (19%).  If the rentable square feet in the Premises changes after this
Lease is executed by Landlord and Tenant, the Base Rent and any advance rent
shall be adjusted by multiplying the new number of rentable square feet in the
Premises by the per square foot rental obtained by dividing the Base Rent
initially set forth in section 1.10 by the number of rentable square feet
initially set forth in section 1.6.  If the number of rentable square feet in
the Premises is changed, Tenant's Share shall be adjusted as provided in section
4.2(a).

     2.3  Common Areas-Defined. The term "Common Areas" is defined as all areas
and facilities outside the Premises and within the exterior boundary line of the
Project that are designated by Landlord from time to time for the general non-
exclusive use of Landlord, Tenant and the other tenants of the Project and their
respective employees,

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suppliers, customers and invitees, including, but not limited to, common
entrances, lobbies, corridors, stairwells, public restrooms, elevators, parking
areas, loading and unloading areas, roadways and sidewalks. Landlord may also
designate other land and improvements outside the boundaries of the Project to
be a part of the Common Areas, provided that such other land and improvements
have a reasonable and functional relationship to the Project.

3.   Term.

     3.1  Term and Commencement Date. The term and Commencement Date of this
Lease are as specified in sections 1.8 and 1.9.  The Commencement Date set forth
in section 1.9 is an estimated Commencement Date.  Subject to the limitations
contained in this section 3, the actual Commencement Date shall be the date
possession of the Premises is tendered to Tenant in accordance with section 3.4
below; provided, however, that the term of this Lease shall be computed from the
first day of the calendar month following the Commencement Date.  When the
actual Commencement Date is established by Landlord, Tenant shall, within
fifteen (15) days after Landlord's request, complete and execute the letter
attached hereto as Exhibit "B" and deliver it to Landlord.  Tenant's failure to
execute the letter attached hereto as Exhibit "B" within said fifteen (15) day
period shall be a material default hereunder and shall constitute Tenant's
acknowledgment of the truth of the facts contained in the letter delivered by
Landlord to Tenant.

     3.2  Delay in Possession. Notwithstanding the estimated Commencement Date
specified in section 1.9, if for any reason Landlord cannot deliver possession
of the Premises to Tenant on said date, Landlord shall not be subject to any
liability therefor, nor shall such failure affect the validity of this Lease or
the obligations of Tenant hereunder; provided, however, in such a case, Tenant
shall not be obligated to pay rent or perform any other obligation of Tenant
under this Lease, except as may be otherwise provided in this Lease, until
possession of the Premises is tendered to Tenant, as defined in section 3.4.  If
Landlord shall not have tendered possession of the Premises to Tenant within
sixty (60) days following the estimated Commencement Date specified in section
1.9, as the same may be adjusted in accordance with section 3.3 or in accordance
with the terms of any work letter agreement entered into by Landlord and Tenant,
Tenant may, at Tenant's option, by notice in writing to Landlord within ten (10)
days after the expiration of the sixty (60) day period, terminate this Lease.
If Tenant terminates this Lease as provided in the preceding sentence, the
parties shall be discharged from all obligations hereunder, except that Landlord
shall return any money previously deposited with Landlord by Tenant.  If
Landlord is unable to deliver possession of the Premises to Tenant on the
Commencement Date due to a "Force Majeure Event," the Commencement Date shall be
extended by the period of the delay caused by the Force Majeure Event.  A Force
Majeure Event shall mean fire, earthquake, weather delays or other acts of God,
strikes, boycotts, war, riot, insurrection, embargoes, shortages of equipment,
labor or materials, delays in issuance of governmental permits or approvals, or
any other cause beyond the reasonable control of Landlord.

     3.3  Landlord's Work; Tenant Delays.  (i) Landlord's Work.  Promptly
following the approval of the Plans and Specifications (as defined below),
Landlord shall, subject to Subsection (ii) below, substantially complete the
work shown thereon in accordance therewith ("Landlord's Work").  Landlord shall
perform and complete Landlord's Work in a good and workmanlike manner.
Landlord's Work shall be "substantially complete" when Landlord obtains a
certificate of occupancy for the Premises (which may be a temporary certificate
subject to completion of punch-list items or other reasonable evidence of
substantial completion as may be provided by the applicable municipal authority)
and all of Landlord's Work has been completed except for so-called "punch-list
items" which shall consist only of minor work or installations, the completion
of which will not materially interfere with Tenant's use and occupancy of the
Premises for the Permitted Uses.  Landlord shall complete such punch-list items
as soon as practical.  If the substantial completion of Landlord's Work shall be
delayed due to Tenant Delays (as hereinafter defined), the Lease Commencement
Date shall be deemed to have occurred on the date substantial completion would
have occurred but for such Tenant Delays.  For the purposes hereof, "Tenant
Delays" shall mean any delay to Landlord's Work caused by Tenant or any of its
agents, employees or contractors, including without limitation, (A) failure to
promptly approve or comment on the Plans and Specifications, (B) delays caused
by changes, alterations or additions to the Plans and Specifications requested
by Tenant after its approval thereof or other change orders or modification
requested by Tenant during the progress of Landlord's Work, and (C) delays
caused by Tenant's interference with Landlord's Work.  There shall be no
abatement of rent, and the sixty (60) day period specified in section 3.2 shall
be deemed extended, to the extent of any Tenant Delays.  Landlord shall not be
liable to Tenant if the substantial completion of Landlord's Work is delayed as
a result of any Tenant Delays.  Tenant shall pay to Landlord an amount equal to
one thirtieth (1/30th) of the Base Rent due for the first full calendar month of
the Lease term for each day of Tenant Delay.  For purposes of the foregoing
calculation, the Base Rent payable for the first full calendar month of the term
of this Lease shall not be reduced by any abated rent, conditionally waived
rent, free rent or similar rental concessions, if any.  Landlord and Tenant
agree that the foregoing payment constitutes a fair and reasonable estimate of
the damages Landlord will incur as the result of a Tenant Delay.

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Within thirty (30) days after Landlord tenders possession of the Premises to
Tenant, Landlord shall notify Tenant of Landlord's reasonable estimate of the
date Landlord could have delivered possession of the Premises to Tenant but for
the Tenant Delays. After delivery of said notice, Tenant shall immediately pay
to Landlord the amount described above for the period of Tenant Delay.

          (ii)   Payment Of Construction And Other Costs. Landlord shall pay the
costs and expenses incurred by Landlord in connection with the performance and
completion of Landlord's Work up to but not more than $50,760.00 [$12.00 x
4,230] (the "Improvement Allowance") which amount is included in the Base Rent
set forth in Section 1.10. Tenant shall be responsible for and shall pay
directly or reimburse Landlord for, as appropriate, and indemnify Landlord from
and against, any such costs in excess of the Improvement Allowance.

          (iii)  Space Planning.  Landlord shall promptly deliver to Tenant for
Tenant's review and approval, all plans, designs and working drawings for the
completion of the Landlord's Work (the "Plans and Specifications").  Tenant
shall promptly review and either approve or comment on the Plans and
Specifications within three (3) business days following Tenant's receipt
thereof.  Tenant's failure to approve or comment on the Plans and Specifications
shall be deemed an approval thereof.  After Tenant's final approval of the Plans
and Specifications, Tenant shall not make any changes or revisions to the Plans
and Specifications without obtaining Landlord's prior written consent.

     3.4  Tender of Possession. Possession of the Premises shall be deemed
tendered to Tenant when Landlord's architect or agent has determined that (a)
Landlord's Work is substantially completed, and, if necessary, have been
approved by the appropriate governmental entity, (b) the Project utilities are
ready for use in the Premises, and (c) Tenant has reasonable access to the
Premises.

     3.5  Early Possession. If Tenant occupies the Premises prior to the
Commencement Date for the purpose of conducting business therein, such occupancy
shall be subject to all provisions of this Lease, such occupancy shall not
change the termination date, and Tenant shall pay Base Rent and all other
charges provided for in this Lease during the period of such occupancy.  Tenant
shall be liable for any damages or delays caused by Tenant's activities at the
Premises.  Prior to entering the Premises Tenant shall obtain all insurance it
is required to obtain by the Lease and shall provide certificates of said
insurance to Landlord.  Tenant shall coordinate such entry with Landlord's
building manager, and such entry shall be made in compliance with all terms and
conditions of this Lease and the Rules and Regulations attached hereto.

     3.6  Option To Extend.  Tenant shall have the option to extend the Lease
(the "Extension Option") term for one (1) additional period of two (2) years
(the "Extension Period") upon the terms and conditions set forth in this Lease,
except that the Base Rent and other charges during such Extension Period shall
be equal to the Fair Market Rent.  For the purposes of this Lease, "Fair Market
Rent" shall mean the rental and all other monetary payments that Landlord could
obtain from a third party desiring to lease the Premises as of the first day of
the Extension Period, taking into account all relevant factors.  Such Fair
Market Rent may include annual adjustments and in no event shall the Fair Market
Rent be less than the Base Rent and charges payable for the final year of the
Lease Term.  Tenant shall exercise the Extension Option, if at all, by giving
written notice to Landlord no later than nine (9) months prior to the first day
of the purported Extension Period (time being of the essence) and such exercise
shall be irrevocable.  Landlord shall initially designate Fair Market Rent by
written notice to Tenant at least thirty (30) days prior to the commencement of
the Extension Period (the "Designation").  If Tenant disagrees with the
Designation, Tenant shall proceed with the Extension Option but advise Landlord
in writing of its disagreement with Landlord's Designation within ten (10) days.
If Tenant does not unequivocally advise Landlord of its disagreement with
Landlord's Designation within said ten (10) day period, Tenant shall
conclusively be deemed to have agreed to the Designation.  If the parties shall
not have agreed in writing (or to be deemed to have agreed pursuant to the
immediately preceding sentence) as to the Fair Market Rent, within twenty (20)
days after Landlord's receipt of Tenant's notice of disagreement with the
Designation, each party shall, within thirty (30) days thereafter appoint an
appraiser who shall be instructed to determine independently the Fair Market
Rent.  If the difference between the amounts so determined by such appraisers
shall not exceed ten percent (10%) of the lesser of such amounts, then the Fair
Market Rent shall be an amount equal to fifty percent (50%) of the total of the
amounts so determined.  If the difference between the amounts so determined
shall exceed ten percent (10%) of the lesser of such amounts, then such two (2)
appraisers shall have ten (10) days thereafter to appoint a third appraiser, but
if such appraisers fail to do so within such ten (10) day period, then either
Landlord or Tenant may request the Greater Boston Real Estate Board or any
successor organization thereto to appoint an appraiser within ten (10) days of
such request, and both Landlord and Tenant shall be bound by any appointment so
made within such ten (10) day period. If no such

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appraiser shall have been appointed within such ten (10) days either Landlord or
Tenant may apply to any court having jurisdiction to have such appointment made
by such court. Any appraiser appointed by the original appraisers, by the
Greater Boston Real Estate Board or by such court shall be instructed to
determine the Fair Market Rent in accordance with the definition of such term
contained herein and within twenty (20) days after its appointment. If the third
appraisal shall exceed the higher of the first two appraisals, the Fair Market
Rent shall be the higher of the first two appraisals; if the third appraisal is
less than the lower of the first two appraisals, the Fair Market Rent shall be
the lower of the first two appraisals. In all other cases, the Fair Market Rent
shall be equal to the third appraisal. All such determinations of the Fair
Market Rent shall be final and binding upon Landlord and Tenant as the Fair
Market Rent as of the first day of the Extension Option. Notwithstanding the
foregoing, if either party shall fail to appoint its appraiser within the 30 day
period specified above (such party being referred to herein as the "failing
party"), the other party may serve notice on the failing party requiring the
failing party to appoint its appraiser within ten (10) days of the giving of
such notice. If the failing party shall not respond by appointment of its
appraiser within said ten day period, then the appraiser appointed by the other
party shall be the sole appraiser whose determination of the Fair Market Rent
shall be binding and conclusive upon Tenant and Landlord. This provision for
determination by appraisal shall be specifically enforceable to the extent such
remedy is available under applicable law, and any determination hereunder shall
be final and binding upon the parties except as otherwise provided by applicable
law. Each party shall pay for the fees and expenses of the appraiser appointed
by it, but the fees and expenses of the third appraiser shall be shared equally
by the parties. All appraisers appointed hereunder shall be MAI appraisers, so-
called. In the event that a determination of Fair Market Rent is not completed
prior to the beginning of the Extension Period, then, if Landlord shall have
made a Designation of Fair Market Rent, such Designation (notwithstanding
Tenant's disagreement therewith) shall be deemed the Fair Market Rent until the
Fair Market Rent is otherwise determined pursuant to applicable provisions
hereof. On determination of the Fair Market Rent, if such determination would be
the basis on which Basic Annual Rent is to be paid, retroactive adjustment shall
be made in order to give it effect to the determination of Fair Market Rent.

4.   Rent.

     4.1  Base Rent. Subject to adjustment as hereinafter provided in section
4.3, Tenant shall pay to Landlord the Base Rent for the Premises set forth in
section 1.10 plus the Tenant Electricity Cost (at the rate specified in Section
1.10 but subject to adjustment as set forth herein), without offset or deduction
on the first day of each calendar month.  At the time Tenant executes this Lease
it shall pay to Landlord the advance Base Rent described in section 1.11.  Base
Rent for any period during the term hereof which is for less than one month
shall be prorated based upon the actual number of days of the calendar month
involved.  Base Rent and all other amounts payable to Landlord hereunder shall
be payable to Landlord in lawful money of the United States, and Tenant shall be
responsible for delivering said amounts to Landlord at the address stated herein
or to such other persons or to such other places as Landlord may designate in
writing.  The Tenant Electricity Cost and Tenant Electricity Rate specified in
Section 1.10 are estimates and shall be reviewed and adjusted annually by
Landlord in a commercially reasonable manner.

     4.2  Operating Expense Increases. Tenant shall pay to Landlord during the
term hereof, in addition to the Base Rent, Tenant's Share of the amount by which
all Operating Expenses for each Comparison Year exceeds the amount of all
Operating Expenses for the Base Year.  If less than 95% of the rentable square
feet in the Project is occupied by tenants or Landlord is not supplying services
to 95% of the rentable square feet of the Project at any time during any
calendar year (including the Base Year), Operating Expenses for such calendar
year shall be an amount equal to the Operating Expenses which would normally be
expected to be incurred had 95% of the Project's rentable square feet been
occupied and had Landlord been supplying services to 95% of the Project's
rentable square feet throughout such calendar year (hereinafter the "Grossed Up
Operating Expenses").  Landlord's good faith estimate of Grossed Up Operating
Expenses shall not be subject to challenge or recalculation by Tenant.  Tenant's
Share of Operating Expense increases shall be determined in accordance with the
following provisions:

          (a)  "Tenant's Share" is defined as the percentage set forth in
section 1.13, which percentage has been determined by dividing the number of
rentable square feet in the Premises by ninety-five percent (95%) of the total
number of rentable square feet in the Project and multiplying the resulting
quotient by one hundred (100). In the event that the number of rentable square
feet in the Project or the Premises changes, Tenant's Share shall be adjusted in
the year the change occurs, and Tenant's Share for such year shall be determined
on the basis of the days during such year that each Tenant's Share was in
effect.

          (b)  "Comparison Year" is defined as each calendar year during the
term of this Lease after the Base Year. Tenant's Share of the Operating Expense
increases for the last Comparison Year of the Lease Term shall be

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prorated according to that portion of such Comparison Year as to which Tenant is
responsible for a share of such increase.

          (c)  "Operating Expenses" shall include all costs, expenses and fees
incurred by Landlord in connection with or attributable to the Project,
including but not limited to, the following items: (i) all costs, expenses and
fees associated with or attributable to the ownership, management, operation,
repair, maintenance, improvement, alteration and replacement of the Project, or
any part thereof, including but not limited to, the following: (A) all surfaces,
coverings, decorative items, carpets, drapes, window coverings, parking areas,
loading and unloading areas, trash areas, roadways, sidewalks, stairways, walls,
structural elements, landscaped areas, striping, bumpers, irrigation systems,
lighting facilities, building exteriors and roofs, fences and gates; (B) all
heating, ventilating and air conditioning equipment ("HVAC") (including, but not
limited to, the cost of replacing or retrofitting HVAC equipment to comply with
laws regulating or prohibiting the use or release of chlorofluorocarbons or
hydrochlorofluorocarbons), plumbing, mechanical, electrical systems, life safety
systems and equipment, telecommunication equipment, elevators, escalators,
tenant directories, fire detection systems including sprinkler system
maintenance and repair; (ii) the cost of trash disposal, janitorial services and
security services and systems; (iii) the cost of all insurance purchased by
Landlord and enumerated in section 8 of this Lease, including any deductibles;
(iv) the cost of water, sewer, gas, electricity, and other utilities available
at the Project and paid by Landlord; (v) the cost of labor, salaries and
applicable fringe benefits incurred by Landlord; (vi) the cost of materials,
supplies and tools used in managing, maintaining and/or cleaning the Project;
(vii) the cost of accounting fees, management fees, legal fees and consulting
fees attributable to the ownership, operation, management, maintenance and
repair of the Project plus the cost of any space occupied by the property
manager and leasing agent (if Landlord is the property manager, Landlord shall
be entitled to receive a fair market management fee); (viii) the cost of
operating, replacing, modifying and/or adding improvements or equipment mandated
by any law, statute, regulation or directive of any governmental agency and any
repairs or removals necessitated thereby (including, but not limited to, the
cost of complying with the Americans With Disabilities Act and regulations of
the Occupational Safety and Health Administration); (ix) payments made by
Landlord under any easement, license, operating agreement, declaration,
restrictive covenant, or instrument pertaining to the payment or sharing of
costs among property owners; (x) any business property taxes or personal
property taxes imposed upon the fixtures, machinery, equipment, furniture and
personal property used in connection with the operation of the Project; (xi) the
cost of all business licenses, any gross receipt taxes based on rental income or
other payments received by Landlord, commercial rental taxes or any similar
taxes or fees; (xii) transportation taxes, fees or assessments, including but
not limited to, mass transportation fees, metrorail fees, trip fees, regional
and transportation district fees, (xiii) all costs and expenses associated with
or related to the implementation by Landlord of any transportation demand
management program or similar program; (xiv) fees assessed by any air quality
management district or other governmental or quasi-governmental entity
regulating pollution; (xv) the cost of installing intrabuilding network cabling
("INC") and maintaining, repairing, securing and replacing existing INC; and
(xvi) ground rent payments and other charges, if any, due pursuant to the ground
lease described in Section 2.1; and (xvii) the cost of any other service
provided by Landlord or any cost that is elsewhere stated in this Lease to be an
"Operating Expense."  Real Property Taxes shall be paid in accordance with
section 10 below and shall not be included in Operating Expenses.  Landlord
shall have the right but not the obligation, from time to time, to equitably
allocate some or all of the Operating Expenses among different tenants of the
Project or among the different buildings which comprise the Project (the "Cost
Pools").  Such Cost Pools may include, but shall not be limited to, the office
space tenants of the Project and the retail space tenants of the Project.

          (d)  Operating Expenses shall not include: (i) leasing commissions,
attorneys' fees, costs, disbursements, and other expenses incurred in connection
with negotiations or disputes with tenants, or in connection with leasing,
renovating or improving space for tenants or other occupants or prospective
tenants or other occupants of the Building;

               (ii)   the cost of any service sold to any tenant (including
          Tenant) or other occupant for which Landlord is entitled to be
          reimbursed as an additional charge or rental over and above the basic
          rent and escalations payable under the lease with that tenant;

               (iii)  any depreciation on the Building or Property;

               (iv)   costs of a capital nature, except as provided in section
          4.2(e);

               (v)    expenses in connection with services or other benefits of
          a type that are not provided to Tenant but which are provided another
          tenant or occupant of the Building or Property;

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               (vi)   wages, salaries, or other compensation paid to any
          executive employees above the grade of building manager;

               (vii)  the cost of correcting any building code or other
          violations which were violations prior to the Commencement Date;

               (viii) any expenses reimbursed by insurance proceeds.

          (e)  If the cost incurred in making an improvement or replacing any
equipment is not fully deductible as an expense in the year incurred in
accordance with generally accepted accounting principles, the cost shall be
amortized over the useful life of the improvement or equipment, as reasonably
determined by Landlord, together with an interest factor on the unamortized cost
of such item equal to the lesser of (i) twelve percent (12%) per annum or (ii)
the maximum rate of interest permitted by applicable law.

          (f)  Tenant's Share of Operating Expense increases shall be payable by
Tenant within ten (10) days after a reasonably detailed statement of actual
expenses is presented to Tenant by Landlord.  At Landlord's option, however,
Landlord may, from time to time, estimate what Tenant's Share of Operating
Expense increases will be, and the same shall be payable by Tenant monthly
during each Comparison Year of the Lease term, on the same day as the Base Rent
is due hereunder.  In the event that Tenant pays Landlord's estimate of Tenant's
Share of Operating Expense increases, Landlord shall use its best efforts to
deliver to Tenant within one hundred eighty (180) days after the expiration of
each Comparison Year a reasonably detailed statement (the "Statement") showing
Tenant's Share of the actual Operating Expense increases incurred during such
year.  Landlord's failure to deliver the Statement to Tenant within said period
shall not constitute Landlord's waiver of its right to collect said amounts or
otherwise prejudice Landlord's rights hereunder.  If Tenant's payments under
this section 4.2(f) during said Comparison Year exceed Tenant's Share as
indicated on the Statement, Tenant shall be entitled to credit the amount of
such overpayment against Tenant's Share of Operating Expense increases next
falling due.  If Tenant's payments under this section 4.2(f) during said
Comparison Year were less than Tenant's Share as indicated on the Statement,
Tenant shall pay to Landlord the amount of the deficiency within thirty (30)
days after delivery by Landlord to Tenant of the Statement.  Landlord and Tenant
shall forthwith adjust between them by cash payment any balance determined to
exist with respect to that portion of the last Comparison Year for which Tenant
is responsible for Operating Expense increases, notwithstanding that the Lease
term may have terminated before the end of such Comparison Year; and this
provision shall survive the expiration or earlier termination of the Lease.

          (g)  The computation of Tenant's Share of Operating Expense increases
is intended to provide a formula for the sharing of costs by Landlord and Tenant
and will not necessarily result in the reimbursement to Landlord of the exact
costs it has incurred.

          (h)  If Tenant disputes the amount set forth in the Statement, Tenant
shall have the right, at Tenant's sole expense, not later than sixty (60) days
following receipt of such Statement, to cause Landlord's books and records with
respect to the calendar year which is the subject of the Statement to be audited
by a certified public accountant mutually acceptable to Landlord and Tenant.
The audit shall take place at the offices of Landlord where its books and
records are located at a mutually convenient time during Landlord's regular
business hours.  Tenant's Share of Operating Expenses shall be appropriately
adjusted based upon the results of such audit, and the results of such audit
shall be final and binding upon Landlord and Tenant.  Tenant shall have no right
to conduct an audit or to give Landlord notice that it desires to conduct an
audit at any time Tenant is in default under the Lease.  The accountant
conducting the audit shall be compensated on an hourly basis and shall not be
compensated based upon a percentage of overcharges it discovers.  No subtenant
shall have any right to conduct an audit, and no assignee shall conduct an audit
for any period during which such assignee was not in possession of the Premises.
Tenant's right to undertake an audit with respect to any calendar year shall
expire sixty (60) days after Tenant's receipt of the Statement for such calendar
year, and such Statement shall be final and binding upon Tenant and shall, as
between the parties, be conclusively deemed correct, at the end of such sixty
(60) day period, unless prior thereto Tenant shall have given Landlord written
notice of its intention to audit Operating Expenses for the calendar year which
is the subject of the Statement.  If Tenant gives Landlord notice of its
intention to audit Operating Expenses, it must commence such audit within sixty
(60) days after such notice is delivered to Landlord, and the audit must be
completed within one hundred twenty (120) days after such notice is delivered to
Landlord.  If Tenant does not commence and complete the audit within such
periods, the Statement which Tenant elected to audit shall be deemed final and
binding upon Tenant and shall, as between the parties, be conclusively

                                       8
<PAGE>

deemed correct. Tenant agrees that the results of any Operating Expense audit
shall be kept strictly confidential by Tenant and shall not be disclosed to any
other person or entity.

     4.3  Intentionally Deleted.

5.   Security Deposit.  Tenant shall, at its sole cost, deliver to Landlord at
the time it executes this Lease an irrevocable letter of credit ("LOC") in the
amount set forth as the security deposit in Section 1.12 as security for
Tenant's faithful performance of Tenant's obligations hereunder. The LOC shall
name Landlord (and its successors and assigns) as the beneficiary, and be drawn
on a financial institution reasonably acceptable to Landlord in the form
attached hereto as Exhibit E.  Tenant shall maintain the required LOC in full
force and effect throughout the Term of this Lease, renewing the LOC as often as
is necessary with the same bank or financial institution (or a similar bank or
financial institution acceptable to Landlord) and upon the same terms and
conditions, not less than thirty (30) days prior to the purported expiration
date of the LOC.  In the event that Tenant fails to timely renew the LOC as
aforesaid, Landlord shall be entitled to draw against the entire amount of the
LOC.  The LOC shall be assignable by Landlord to any party holding the lessor
interest in this Lease, and upon such assignment, Landlord shall be relieved
from all liability to Tenant therefor.  If Tenant fails to pay Base Rent or
other charges due hereunder, or otherwise defaults with respect to any provision
of this Lease, Landlord shall have the right to draw the entire amount of the
LOC or to draw upon so much of the LOC as equals the defaulted payment(s), plus
any interest or other charges due thereon in accordance with this Lease, for the
payment of any Base Rent or other charge due hereunder, to pay any other sum to
which Landlord may become obligated by reason of Tenant's default, or to
compensate Landlord for any loss or damage which Landlord may suffer thereby.
If Landlord elects to make a partial draw upon the LOC, Tenant shall promptly
restore the LOC to its original amount.  Landlord's election to make a partial
draw upon the LOC shall in no event prejudice or waive Landlord's right to
terminate this Lease if permitted under applicable provisions of this Lease, nor
shall such election prejudice or waive any other remedy of Landlord reserved
under the terms of this Lease, including the right to draw the entire amount of
the LOC.  The LOC shall be available for payment against the presentation of a
sight draft by the Landlord together with a certificate from Landlord that
Tenant is in default of its obligations hereunder and that Landlord is entitled,
by the terms of this Lease, to draw upon the LOC.  If Tenant performs all of
Tenant's obligations hereunder, the LOC, or so much thereof as has not
heretofore been drawn or applied by Landlord, shall be returned, without payment
of interest or other amount for its use, to Tenant (or, at Landlord's option, to
the last assignee, if any, of Tenant's interest hereunder) at the expiration of
the Term hereof, and after Tenant has vacated the Premises.  No trust
relationship is created herein between Landlord and Tenant with respect to said
LOC.  Tenant acknowledges that the  LOC is not an advance payment of any kind or
a measure of Landlord's damages in the event of Tenant's default.  Tenant hereby
waives the provision of any law which is inconsistent with this Section 5.  In
the event that (i) Tenant has a financing event that raises an amount in excess
of $20,000,000, and (ii) Tenant has faithfully performed all of its obligations
pursuant to this Lease without default for eighteen (18) months, Landlord will
reduce the amount of the security deposit to an amount equal to four (4) months
Base Rent or accept in lieu of the LOC an irrevocable letter of credit in such
amount but otherwise in conformity with this section 5.

6.   Use.

     6.1  Use. The Premises shall be used and occupied only for the purpose set
forth in section 1.7 and for no other purpose.  If section 1.7 gives Tenant the
right to use the Premises for general office use, by way of example and not
limitation, general office use shall not include medical office use or any
similar use, laboratory use, classroom use, an executive suite or similar use,
any use not characterized by applicable zoning and land use restrictions as
general office use, any use which would require Landlord or Tenant to obtain a
conditional use permit or variance from any federal, state or local authority,
or any other use not compatible, in Landlord's sole judgment, with a first class
office building.  Notwithstanding any permitted use inserted in section 1.7,
Tenant shall not use the Premises for any purpose which would violate the
Project's certificate of occupancy, any conditional use permit or variance
applicable to the Project or violate any covenants, conditions or other
restrictions applicable to the Project.  No exclusive use has been granted to
Tenant hereunder.

     6.2  Compliance with Law.

          (a)  Landlord warrants to Tenant that, to the best of Landlord's
knowledge, the Premises, as of the Commencement Date, but without regard to
alterations or improvements to be made by Tenant, does not and shall not
materially  violate any laws, covenants or restrictions of record, or any
applicable building code, regulation or ordinance in effect on such date.

                                       9
<PAGE>

          (b)  Tenant shall, at Tenant's sole expense, promptly comply with all
applicable laws, ordinances, rules, regulations, orders, certificates of
occupancy, conditional use or other permits, variances, covenants and
restrictions of record, the reasonable recommendations of Landlord's engineers
or other consultants, and requirements of any fire insurance underwriters,
rating bureaus or government agencies, now in effect or which may hereafter come
into effect, whether or not they reflect a change in policy from that now
existing, during the term or any part of the term hereof, relating in any manner
to the Premises or the occupation and use by Tenant of the Premises.  Tenant
shall, at Tenant's sole expense, comply with all requirements of the Americans
With Disabilities Act that relate to Tenant's specific use of the Premises, and
all federal, state and local laws and regulations governing occupational safety
and health.  Tenant shall conduct its business and use the Premises in a lawful
manner and shall not use or permit the use of the Premises or the Common Areas
in any manner that will tend to create waste or a nuisance or shall tend to
disturb other occupants of the Project.  Tenant shall obtain, at its sole
expense, any permit or other governmental authorization required to operate its
business from the Premises.  Landlord shall not be liable for the failure of any
other tenant or person to abide by the requirements of this section or to
otherwise comply with applicable laws and regulations, and Tenant shall not be
excused from the performance of its obligations under this Lease due to such a
failure.

     6.3  Condition of Premises.  Except as otherwise provided in this Lease,
Tenant hereby accepts the Premises and the Project in their condition existing
as of the date this Lease is executed by Landlord and Tenant, subject to all
applicable federal, state and local laws, ordinances, regulations and permits
governing the use of the Premises, the Project's certificate of occupancy, any
applicable conditional use permits or variances, and any easements, covenants or
restrictions affecting the use of the Premises or the Project.  Tenant
acknowledges that it has satisfied itself by its own independent investigation
that the Premises and the Project are suitable for its intended use, and that
neither Landlord nor Landlord's agents has made any representation or warranty
as to the present or future suitability of the Premises, or the Project for the
conduct of Tenant's business.

7.   Maintenance, Repairs and Alterations.

     7.1  Landlord's Obligations. Landlord shall keep the Project (excluding the
interior of the Premises and space leased to other occupants of the Project) in
good condition and repair.  If plumbing pipes, electrical wiring, HVAC ducts or
vents within the Premises are in need of repair, Tenant shall immediately notify
Landlord, and Landlord shall cause the repairs to be completed within a
reasonable time, and Tenant shall immediately pay the entire cost of the repairs
to Landlord.  Except as provided in section 9.3, there shall be no abatement of
rent or liability to Tenant on account of any injury or interference with
Tenant's business with respect to any improvements, alterations or repairs made
by Landlord to the Project or any part thereof.  Tenant expressly waives the
benefits of any statute now or hereafter in effect which would otherwise afford
Tenant the right to make repairs at Landlord's expense or to terminate this
Lease because of Landlord's failure to keep the Project in good order, condition
and repair.

     7.2  Tenant's Obligations.

          (a)  Subject to the requirements of section 7.3, Tenant shall be
responsible for keeping the Premises in good condition and repair, at Tenant's
sole expense.  By way of example, and not limitation, Tenant shall be
responsible, at Tenant's sole expense, for repairing and/or replacing, carpet,
marble, tile or other flooring, paint, wall coverings, corridor and interior
doors and door hardware, telephone and computer equipment, interior glass,
window treatments, ceiling tiles, shelving, cabinets, millwork and other tenant
improvements.  In addition, Tenant shall be responsible for the installation,
maintenance and repair of all telephone, computer and related cabling from the
telephone terminal room on the floor on which the Premises is located to and
throughout the Premises, and Tenant shall be responsible for any loss, cost,
damage, liability and expense (including attorneys' fees) arising out of or
related to the installation, maintenance, repair and replacement of such
cabling.  If Tenant fails to keep the Premises in good condition and repair,
Landlord may, but shall not be obligated to, make any necessary repairs.  If
Landlord makes such repairs, Landlord may bill Tenant for the cost of the
repairs as additional rent, and said additional rent shall be payable by Tenant
within ten (10) days.

          (b)  On the last day of the term hereof, or on any sooner termination,
Tenant shall surrender the Premises to Landlord in the same condition as
received, ordinary wear and tear and casualty damage excepted, clean and free of
debris and Tenant's personal property.  Tenant shall repair any damage to the
Premises occasioned by the installation or removal of Tenant's trade fixtures,
furnishings and equipment.  Tenant shall leave the electrical distribution
systems, plumbing systems, lighting fixtures, HVAC ducts and vents, window
treatments, wall coverings, carpets and

                                       10
<PAGE>

other floor coverings, doors and door hardware, millwork, ceilings and other
tenant improvements at the Premises and in good condition, ordinary wear and
tear excepted.

     7.3  Alterations and Additions.

          (a)  Tenant shall not, without Landlord's prior written consent, which
may be given or withheld in Landlord's sole discretion, make any alterations,
improvements, additions, utility installations or repairs (hereinafter
collectively referred to as "Alterations") in, on or about the Premises or the
Project.  Notwithstanding the foregoing, Landlord's consent shall not be
unreasonably withheld to any Alterations which do not affect the structure or
exterior portions of the Building or which adversely affect the mechanical,
plumbing, electrical, HVAC or fire alarm systems of the Building.   Alterations
shall include, but shall not be limited to, the installation or alteration of
security or fire protection systems, communication systems, millwork, shelving,
file retrieval or storage systems, carpeting or other floor covering, window and
wall coverings, electrical distribution systems, lighting fixtures, telephone or
computer system wiring, HVAC and plumbing.  At the expiration of the term,
Landlord may require the removal of any Alterations installed by Tenant and the
restoration of the Premises and the Project to their prior condition, at
Tenant's expense.  If a work letter agreement is entered into by Landlord and
Tenant, Tenant shall not be obligated to remove the tenant improvements
constructed in accordance with the work letter agreement.  If, as a result of
any Alteration made by Tenant, Landlord is obligated to comply with the
Americans With Disabilities Act or any other law or regulation and such
compliance requires Landlord to make any improvement or Alteration to any
portion of the Project, as a condition to Landlord's consent, Landlord shall
have the right to require Tenant to pay to Landlord prior to the construction of
any Alteration by Tenant, the entire cost of any improvement or alteration
Landlord is obligated to complete by such law or regulation.  Should Landlord
permit Tenant to make its own Alterations, Tenant shall use only such contractor
as has been expressly approved by Landlord, and Landlord may require Tenant to
provide to Landlord, at Tenant's sole cost and expense, a lien and completion
bond in an amount equal to one and one-half times the estimated cost of such
Alterations, to insure Landlord against any liability for mechanic's and
materialmen's liens and to insure completion of the work.  In addition, Tenant
shall pay to Landlord a fee equal to six percent (6%) of the cost of the
Alterations to compensate Landlord for the overhead and other costs it incurs in
reviewing the plans for the Alterations and in monitoring the construction of
the Alterations.  Should Tenant make any Alterations without the prior approval
of Landlord, or use a contractor not expressly approved by Landlord, Landlord
may, at any time during the term of this Lease, require that Tenant remove all
or part of the Alterations and return the Premises to the condition it was in
prior to the making of the Alternations.  In the event Tenant makes any
Alterations, Tenant agrees to obtain or cause its contractor to obtain, prior to
the commencement of any work, "builders all risk" insurance in an amount
approved by Landlord and workers compensation insurance.

          (b)  Any Alterations in or about the Premises that Tenant shall desire
to make shall be presented to Landlord in written form, with plans and
specifications which are sufficiently detailed to obtain a building permit.  If
Landlord consents to an Alteration, the consent shall be deemed conditioned upon
Tenant acquiring a building permit from the applicable governmental agencies,
furnishing a copy thereof to Landlord prior to the commencement of the work, and
compliance by Tenant with all conditions of said permit in a prompt and
expeditious manner.  Tenant shall provide Landlord with as-built plans and
specifications for any Alterations made to the Premises.

          (c)  Tenant shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Tenant at or for use in
the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises or the Project, or any interest therein.
If Tenant shall, in good faith, contest the validity of any such lien, Tenant
shall furnish to Landlord a surety bond satisfactory to Landlord in an amount
equal to not less than one and one half times the amount of such contested lien
claim indemnifying Landlord against liability arising out of such lien or claim.
Such bond shall be sufficient in form and amount to free the Project from the
effect of such lien.  In addition, Landlord may require Tenant to pay Landlord's
reasonable attorneys' fees and costs in participating in such action.

          (d)  Tenant shall give Landlord not less than ten (10) days' advance
written notice prior to the commencement of any work in the Premises by Tenant,
and Landlord shall have the right to post notices of non-responsibility in or on
the Premises or the Project.

          (e)  All Alterations (whether or not such Alterations constitute trade
fixtures of Tenant) which may be made to the Premises by Tenant shall be paid
for by Tenant, at Tenant's sole expense, and shall be made and done in a good
and workmanlike manner and with new materials satisfactory to Landlord, and such
Alteration shall be the

                                       11
<PAGE>

property of Landlord and remain upon and be surrendered with the Premises at the
expiration of the Lease term, unless Landlord requires their removal pursuant to
section 7.3(a). Tenant's personal property and equipment, other than that which
is affixed to the Premises so that it cannot be removed without material damage
to the Premises or the Project, shall remain the property of Tenant and may be
removed by Tenant subject to the provisions of section 7.2(b).

     7.4  Failure of Tenant to Remove Property.  If this Lease is terminated due
to the expiration of its term or otherwise, and Tenant fails to remove its
property as required by section 7.2(b), in addition to any other remedies
available to Landlord under this Lease, and subject to any other right or remedy
Landlord may have under applicable law, Landlord may remove any property of
Tenant from the Premises and store the same elsewhere at the expense and risk of
Tenant.

8.   Insurance.

     8.1  Insurance-Tenant.

          (a)  Tenant shall obtain and keep in force during the term of this
Lease a commercial general liability policy of insurance with coverages
reasonably acceptable to Landlord, which, by way of example and not limitation,
protects Tenant and Landlord (as an additional insured) against claims for
bodily injury, personal injury and property damage based upon, involving or
arising out of the ownership, use, occupancy or maintenance of the Premises and
all areas appurtenant thereto.  Such insurance shall be on an occurrence basis
providing single limit coverage in an amount not less than $2,000,000 per
occurrence with an "Additional Insured-Managers and Landlords of Premises
Endorsement" and contain the "Amendment of the Pollution Exclusion" for damage
caused by heat, smoke or fumes from a hostile fire.  The policy shall not
contain any intra-insured exclusions as between insured persons or
organizations, but shall include coverage for liability assumed under this Lease
as an "insured contract" for the performance of Tenant's indemnity obligations
under this Lease.

          (b)  Tenant shall obtain and keep in force during the term of this
Lease "all risk" extended coverage property insurance with coverages reasonably
acceptable to Landlord.  Said insurance shall be written on a one hundred
percent (100%) replacement cost basis on Tenant's personal property, all tenant
improvements installed at the Premises by Landlord or Tenant, Tenant's trade
fixtures and other property.  By way of example, and not limitation, such
policies shall provide protection against any peril included within the
classification "fire and extended coverage," against vandalism and malicious
mischief, theft, sprinkler leakage, earthquake damage and flood damage.  If this
Lease is terminated as the result of a casualty in accordance with section 9,
the proceeds of said insurance attributable to the replacement of all tenant
improvements at the Premises shall be paid to Landlord.  If insurance proceeds
are available to repair the tenant improvements, at Landlord's option, all
insurance proceeds Tenant is entitled to receive to repair the tenant
improvements shall be paid by the insurance company directly  to Landlord,
Landlord shall select the contractor to repair and/or replace the tenant
improvements, and Landlord shall cause the tenant improvements to be repaired
and/or replaced to the extent insurance proceeds are available.

          (c)  Tenant shall, at all times during the term hereof, maintain in
effect workers' compensation insurance as required by applicable law and
business interruption and extra expense insurance reasonably satisfactory to
Landlord.

     8.2  Insurance-Landlord.

          (a)  Landlord shall obtain and keep in force a policy of general
liability insurance with coverage against such risks and in such amounts as
Landlord deems advisable insuring Landlord against liability arising out of the
ownership, operation and management of the Project.

          (b)  Landlord shall also obtain and keep in force during the term of
this Lease a policy or policies of insurance covering loss or damage to the
Project in the amount of not less than eighty percent (80%) of the full
replacement cost thereof, as determined by Landlord from time to time.  The
terms and conditions of said policies and the perils and risks covered thereby
shall be determined by Landlord, from time to time, in Landlord's sole
discretion.  In addition, at Landlord's option, Landlord shall obtain and keep
in force, during the term of this Lease, a policy of rental interruption
insurance, with loss payable to Landlord, which insurance shall, at Landlord's
option, also cover all Operating Expenses.  At Landlord's option, Landlord may
obtain insurance coverages and/or bonds related to the operation of the parking
areas.  At Landlord's option, Landlord may obtain coverage for flood and
earthquake damages.

                                       12
<PAGE>

In addition, Landlord shall have the right to obtain such additional insurance
as is customarily carried by owners or operators of other comparable office
buildings in the geographical area of the Project. Tenant will not be named as
an additional insured in any insurance policies carried by Landlord and shall
have no right to any proceeds therefrom. The policies purchased by Landlord
shall contain such deductibles as Landlord may determine. In addition to amounts
payable by Tenant in accordance with section 4.2, Tenant shall pay any increase
in the property insurance premiums for the Project over what was payable
immediately prior to the increase to the extent the increase is specified by
Landlord's insurance carrier as being caused by the nature of Tenant's occupancy
or any act or omission of Tenant.

     8.3  Insurance Policies.  Tenant shall deliver to Landlord copies of the
insurance policies required under section 8.1 within fifteen (15) days prior to
the Commencement Date of this Lease, and Landlord shall have the right to
reasonably approve the terms and conditions of said policies.  Tenant's
insurance policies shall not be cancelable or subject to reduction of coverage
or other material  modification except after thirty (30) days prior written
notice to Landlord.  Tenant shall, at least thirty (30) days prior to the
expiration of such policies, furnish Landlord with renewals thereof.  Tenant's
insurance policies shall be issued by insurance companies authorized to do
business in the state in which the Project is located, and said companies shall
maintain during the policy term a "General Policyholder's Rating" of at least A
and a financial rating of at least "Class X" (or such other rating as may be
required by any lender having a lien on the Project) as set forth in the most
recent edition of "Best Insurance Reports."  All insurance obtained by Tenant
shall be primary to and not contributory with any similar insurance carried by
Landlord, whose insurance shall be considered excess insurance only.  Landlord,
and at Landlord's option, the holder of any mortgage or deed of trust
encumbering the Project and any person or entity managing the Project on behalf
of Landlord, shall be named as an additional insured on all insurance policies
Tenant is obligated to obtain by section 8.1 above.  Tenant's insurance policies
shall not include deductibles in excess of Five Thousand Dollars ($5,000).

     8.4  Waiver of Subrogation.  Landlord waives any and all rights of recovery
against Tenant for or arising out of damage to, or destruction of, the Project
to the extent that Landlord's insurance policies then in force insure against
such damage or destruction and permit such waiver, and only to the extent of the
insurance proceeds actually received by Landlord for such damage or destruction.
Landlord's waiver shall not relieve Tenant from liability under section 21 below
except to the extent Landlord's insurance company actually satisfies Tenant's
obligations under section 21 in accordance with the requirements of section 21.
Tenant waives any and all rights of recovery against Landlord, Landlord's
employees, agents and contractors for liability or damages if such liability or
damage is covered by Tenant's insurance policies then in force or the insurance
policies Tenant is required to obtain by section 8.1 (whether or not the
insurance Tenant is required to obtain by section 8.1 is then in force and
effect), whichever is broader.  Tenant's waiver shall not be limited by the
amount of insurance then carried by Tenant or the deductibles applicable
thereto.  Tenant shall cause the insurance policies it obtains in accordance
with this section 8 to provide that the insurance company waives all right of
recovery by subrogation against Landlord in connection with any liability or
damage covered by Tenant's insurance policies.

     8.5  Coverage.  Landlord makes no representation to Tenant that the limits
or forms of coverage specified above or approved by Landlord are adequate to
insure Tenant's property or Tenant's obligations under this Lease, and the
limits of any insurance carried by Tenant shall not limit Tenant's obligations
or liability under any indemnity provision included in this Lease or under any
other provision of this Lease.

9.   Damage or Destruction.

     9.1  Effect of Damage or Destruction.  If all or part of the Project is
damaged by fire, earthquake, flood, explosion, the elements, riot, the release
or existence of Hazardous Substances (as defined below) or by any other cause
whatsoever (hereinafter collectively referred to as "damages"), but the damages
are not material (as defined in section 9.2 below), Landlord shall repair the
damages to the Project as soon as is reasonably possible, and this Lease shall
remain in full force and effect.  If all or part of the Project is destroyed or
materially damaged (as defined in section 9.2 below), Landlord shall have the
right, in its sole and complete discretion, to repair or to rebuild the Project
or to terminate this Lease.  Landlord shall within one hundred twenty (120) days
after the discovery of such material damage or destruction notify Tenant in
writing of Landlord's intention to repair or to rebuild or to terminate this
Lease.  Tenant shall in no event be entitled to compensation or damages on
account of annoyance or inconvenience in making any repairs, or on account of
construction, or on account of Landlord's election to terminate this Lease.
Notwithstanding the foregoing, if Landlord shall elect to rebuild or repair the
Project after material damage or destruction, but in good faith determines that
the Premises cannot be substantially repaired within two hundred forty (240)
days after the date of the discovery of the material damage or destruction,
without payment of overtime or other premiums, and the damage to the Project
will

                                       13
<PAGE>

render the entire Premises unusable during said two hundred forty (240) day
period, Landlord shall notify Tenant thereof in writing at the time of
Landlord's election to rebuild or repair, and Tenant shall thereafter have a
period of fifteen (15) business days within which Tenant may elect to terminate
this Lease, upon thirty (30) days' advance written notice to Landlord. Tenant's
termination right described in the preceding sentence shall not apply if the
damage was caused by the negligent or intentional acts of Tenant or its
employees, agents, contractors or invitees. Failure of Tenant to exercise said
election within said fifteen (15) business day period shall constitute Tenant's
agreement to accept delivery of the Premises under this Lease whenever tendered
by Landlord, provided Landlord thereafter pursues reconstruction or restoration
diligently to completion, subject to delays caused by Force Majeure Events. If
Landlord is unable to repair the damage to the Premises or the Project during
such three hundred sixty (360) day period due to Force Majeure Events, the three
hundred sixty (360) day period shall be extended by the period of delay caused
by the Force Majeure Events. Subject to section 9.3 below, if Landlord or Tenant
terminates this Lease in accordance with this section 9.1, Tenant shall continue
to pay all Base Rent, Operating Expense increases and other amounts due
hereunder which arise prior to the date of termination.

     9.2  Definition of Material Damage.  Damage to the Project shall be deemed
material if, in Landlord's reasonable judgment, the uninsured cost of repairing
the damage will exceed Twenty-Five Thousand Dollars ($25,000).  If insurance
proceeds are available to Landlord in an amount which is sufficient to pay the
entire cost of repairing all of the damage to the Project, the damage shall be
deemed material if the cost of repairing the damage exceeds One Hundred Thousand
Dollars ($100,000).  Damage to the Project shall also be deemed material if (a)
the Project cannot be rebuilt or repaired to substantially the same condition it
was in prior to the damage due to laws or regulations in effect at the time the
repairs will be made, (b) the holder of any mortgage or deed of trust
encumbering the Project requires that insurance proceeds available to repair the
damage in excess of Twenty-Five Thousand Dollars ($25,000) be applied to the
repayment of the indebtedness secured by the mortgage or the deed of trust, or
(c) the damage occurs during the last twelve (12) months of the Lease term.

     9.3  Abatement of Rent.  If Landlord elects to repair damage to the Project
and all or part of the Premises will be unusable or inaccessible to Tenant in
the ordinary conduct of its business until the damage is repaired, and the
damage was not caused by the negligence or intentional acts of Tenant or its
employees, agents, contractors or invitees, Tenant's Base Rent and Tenant's
Share of Operating Expense increases shall be abated until the repairs are
completed in proportion to the amount of the Premises which is unusable or
inaccessible to Tenant in the ordinary conduct of its business.  Notwithstanding
the foregoing, there shall be no abatement of Base Rent or Tenant's Share of
Operating Expense increases by reason of any portion of the Premises being
unusable or inaccessible for a period equal to five (5) consecutive business
days or less.  If the cause of the damage or destruction is an earthquake or a
flood, Tenant shall only be entitled to an abatement of rent when and if
Landlord receives reimbursement for such rent from insurance proceeds, if any.

     9.4  Tenant's Acts.  If such damage or destruction occurs as a result of
the negligence or the intentional acts of Tenant or Tenant's employees, agents,
contractors or invitees, and the proceeds of insurance which are actually
received by Landlord are not sufficient to pay for the repair of all of the
damage, Tenant shall pay, at Tenant's sole cost and expense, to Landlord upon
demand, the difference between the cost of repairing the damage and the
insurance proceeds received by Landlord.

     9.5  Tenant's Property.  As more fully set forth in section 47, and to the
extent allowed by law, Landlord shall not be liable to Tenant or its employees,
agents, contractors, invitees or customers for loss or damage to merchandise,
tenant improvements, fixtures, automobiles, furniture, equipment, computers,
files or other property (hereinafter collectively "Tenant's property") located
at the Project.  Tenant shall repair or replace all of Tenant's property at
Tenant's sole cost and expense.  Tenant acknowledges that it is Tenant's sole
responsibility to obtain adequate insurance coverage to compensate Tenant for
damage to Tenant's property.

     9.6  Waiver.  Landlord and Tenant hereby waive the provisions of any
present or future statutes which relate to the termination of leases when leased
property is damaged or destroyed and agree that such event shall be governed by
the terms of this Lease.

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<PAGE>

10.  Real and Personal Property Taxes.

     10.1 Payment of Taxes.  Tenant shall pay to Landlord during the term of
this Lease, in addition to Base Rent and Tenant's Share of Operating Expense
increases, Tenant's Share of the amount by which all "Real Property Taxes" (as
defined in section 10.2 below) for each Comparison Year exceeds the amount of
all Real Property Taxes for the Base Year.  Tenant's Share of Real Property Tax
increases shall be payable by Tenant at the same time, in the same manner and
under the same terms and conditions as Tenant pays Tenant's Share of Operating
Expense increases as provided in section 4.2(f) of this Lease.  Except as
expressly provided in section 10.4 below, if the Real Property Taxes incurred
during any Comparison Year are less than the Real Property Taxes incurred during
the Base Year, Tenant shall not be entitled to receive any credit, offset,
reduction or benefit as a result of said occurrence.

     10.2 Definition of "Real Property Tax".  As used herein, the term "Real
Property Taxes" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, improvement bond or bonds imposed
on the Project or any portion thereof by any authority having the direct or
indirect power to tax, including any city, county, state or federal government,
or any school, agricultural, sanitary, fire, street, drainage or other
improvement district thereof, as against any legal or equitable interest of
Landlord in the Project or in any portion thereof, unless such tax is defined as
an Operating Expense by section 4.3(c).  Real Property Taxes shall not include
income, franchise, inheritance and gift taxes.

     10.3 Personal Property Taxes.  Tenant shall pay prior to delinquency all
taxes assessed against and levied upon trade fixtures, furnishings, equipment
and all other personal property of Tenant contained in the Premises or related
to Tenant's use of the Premises.  If any of Tenant's personal property shall be
assessed with Landlord's real or personal property, Tenant shall pay to Landlord
the taxes attributable to Tenant within ten (10) days after receipt of a written
statement from Landlord setting forth the taxes applicable to Tenant's property.

     10.4 Reassessments.  From time to time Landlord may challenge the assessed
value of the Project as determined by applicable taxing authorities and/or
Landlord may attempt to cause the Real Property Taxes to be reduced on other
grounds.  If Landlord is successful in causing the Real Property Taxes to be
reduced or in obtaining a refund, rebate, credit or similar benefit (hereinafter
collectively referred to as a "reduction"), Landlord shall have the option, in
its sole discretion, to (a) retain the benefit of the reduction and to pay, at
Landlord's sole expense, the costs incurred by Landlord in causing the reduction
to be made or (b) to the extent practicable, to credit the reduction(s) to Real
Property Taxes for the calendar year to which a reduction applies and to
recalculate the Real Property Taxes owed by Tenant for years after the year in
which the reduction applies based on the reduced Real Property Taxes (if a
reduction applies to Tenant's Base Year, the Base Year Real Property Taxes shall
be reduced by the amount of the reduction and Tenant's Share of Real Property
Tax increases shall be recalculated for all Comparison Years following the year
of the reduction based on the lower Base Year amount).  If Landlord proceeds in
accordance with (b) above, all costs incurred by Landlord in obtaining the Real
Property Tax reductions shall be considered an Operating Expense and Landlord
shall determine, in its sole discretion, to which years any reductions will be
applied.  In addition, if Landlord proceeds in accordance with (b) above, all
accounting and related costs incurred by Landlord in calculating new Base Years
for tenants and in making all other adjustments shall be an Operating Expense.
If Landlord proceeds in accordance with (a) above, Landlord shall not be
obligated to refund to Tenant all or any portion of the reduction or to reduce
Real Property Taxes for the years to which any reductions apply.

11.  Utilities.

     11.1 Services Provided by Landlord.  Subject to all governmental rules,
regulations and guidelines applicable thereto, Landlord shall use its best
efforts to provide HVAC to the Premises and Common Areas during the times
described in section 11.4, reasonable amounts of electricity for normal
lighting, water in the Premises or in the Common Area for reasonable and normal
drinking and lavatory use, replacement light bulbs and/or fluorescent tubes and
ballasts for standard overhead fixtures, and building standard janitorial
services.

     11.2 Services Exclusive To Tenant.  Tenant shall pay for all water, gas,
heat, heat pump fuel costs and charges, telephone and other utilities and
services supplied and/or metered exclusively to the Premises or to Tenant,
together with any taxes thereon.  If any such services are not separately
metered to the Premises, Tenant shall pay, at Landlord's option, either Tenant's
Share or a reasonable proportion to be determined by Landlord of all charges
jointly metered with other premises in the Building.

                                       15
<PAGE>

     11.3 Occupant Density.  Tenant shall maintain a ratio of not more than one
Occupant (as defined below) for each two hundred fifty (250) square feet of
rentable area in the Premises.  Upon request by Landlord, Tenant shall maintain
on a daily basis an accurate record of the number of employees, visitors,
contractors and other people that visit the Premises (collectively "Occupants").
Landlord shall have the right to audit Tenant's Occupant record and, at
Landlord's option, Landlord shall have the right to periodically visit the
Premises without advance notice to Tenant in order to track the number of
Occupants arriving at the Premises.  For purposes of this section, "Occupants"
shall not include people not employed by Tenant that deliver or pick up mail or
other packages at the Premises, employees of Landlord or employees of Landlord's
agents or contractors.  Tenant acknowledges that increased numbers of Occupants
causes additional wear and tear on the Premises and the Common Areas, additional
use of electricity, water and other utilities, and additional demand for other
Building services.  Tenant's failure to comply with the requirements of this
section shall constitute a default under section 13.3 and Landlord shall have
the right, in addition to any other remedies it may have at law or equity, to
specifically enforce Tenant's obligations under this section.

     11.4 Hours of Service.  Building services and utilities shall be provided
Monday through Friday from 8:00 a.m. to 6:00 p.m. and Saturdays from 9:00 a.m.
to noon.  Janitorial services shall be provided Monday through Friday.  HVAC and
other Building services shall not be provided at other times or on nationally
recognized holidays.  Tenant acknowledges that there will be no air circulation
or temperature control within the Premises when the HVAC is not operating and,
consequently, during such times the Premises may not be suitable for human
occupation or for the operation of computers and other heat sensitive equipment.
Nationally recognized holidays shall include, but shall not necessarily be
limited to, New Years Day, Martin Luther King Jr. Day, Presidents' Day, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.  Landlord
shall use its best efforts to provide HVAC to Tenant at times other than those
set forth above subject to (a) the payment by Tenant of Landlord's standard
charge, as determined by Landlord from time to time, in Landlord's sole
discretion, for after hours HVAC. Tenant shall pay all after hours HVAC charges
to Landlord within three (3) days after Landlord bills Tenant for said charges.

     11.5 Excess Usage by Tenant.   Notwithstanding the use set forth in section
1.7, Tenant shall not use Building utilities or services in excess of those used
by the average office building tenant using its premises for ordinary office
use.  Tenant shall not install at the Premises office machines, lighting
fixtures or other equipment which will generate above average heat, noise or
vibration at the Premises or which will adversely effect the temperature
maintained by the HVAC system.  If Tenant does use Building utilities or
services in excess of those used by the average office building tenant, Landlord
shall have the right, in addition to any other rights or remedies it may have
under this Lease, to (a) at Tenant's expense, install separate metering devices
at the Premises, and to charge Tenant for its usage, (b) require Tenant to pay
to Landlord all costs, expenses and damages incurred by Landlord as a result of
such usage, and (c) require Tenant to stop using excess utilities or services.

     11.6 Interruptions.  Tenant agrees that, to the extent allowed by law,
Landlord shall not be liable to Tenant for its failure to furnish gas,
electricity, telephone service, water, HVAC or any other utility services or
building services when such failure is occasioned, in whole or in part, by
repairs, replacements, or improvements, by any strike, lockout or other labor
trouble, by inability to secure electricity, gas, water, telephone service or
other utility at the Project, by any accident, casualty or event arising from
any cause whatsoever, including the act, negligence or default of Tenant or any
other person or entity, or by any other cause, and such failures shall never be
deemed to constitute an eviction or disturbance of Tenant's use and possession
of the Premises or relieve Tenant from the obligation of paying rent or
performing any of its obligations under this Lease.  Furthermore, Landlord shall
not be liable under any circumstances for loss of property or for injury to, or
interference with, Tenant's business, including, without limitation, loss of
profits, however occurring, through or in connection with or incidental to a
failure to furnish any such services or utilities.  Landlord may comply with
voluntary controls or guidelines promulgated by any governmental entity relating
to the use or conservation of energy, water, gas, light or electricity or the
reduction of automobile or other emissions without creating any liability of
Landlord to Tenant under this Lease.

12.  Assignment and Subletting.

     12.1 Landlord's Consent Required.  Tenant shall not voluntarily or by
operation of law assign, transfer, hypothecate, mortgage, sublet, or otherwise
transfer or encumber all or any part of Tenant's interest in this Lease or in
the Premises (hereinafter collectively a "Transfer"), without Landlord's prior
written consent, which shall not be unreasonably withheld.  Landlord shall
respond to Tenant's written request for consent hereunder within twenty (20)
days after Landlord's receipt of the written request from Tenant.  Any attempted
Transfer without such consent shall be void

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<PAGE>

and shall constitute a material default and breach of this Lease. Tenant's
written request for Landlord's consent shall include, and Landlord's twenty (20)
day response period referred to above shall not commence, unless and until
Landlord has received from Tenant, all of the following information: (a)
financial statements for the proposed assignee or subtenant for the past three
(3) years (or, subject to Landlord's reasonable discretion, such lesser period
if three (3) years' statements are unavailable) prepared in accordance with
generally accepted accounting principles, (b) a TRW credit report or similar
report on the proposed assignee or subtenant, (c) a detailed description of the
business the assignee or subtenant intends to operate at the Premises, (d) the
proposed effective date of the assignment or sublease, (e) a copy of the
proposed sublease or assignment agreement which includes all of the terms and
conditions of the proposed assignment or sublease, (f) a detailed description of
any ownership or commercial relationship between Tenant and the proposed
assignee or subtenant and (g) a detailed description of any Alterations the
proposed assignee or subtenant desires to make to the Premises. If the
obligations of the proposed assignee or subtenant will be guaranteed by any
person or entity, Tenant's written request shall not be considered complete
until the information described in (a) and (b) of the previous sentence has been
provided with respect to each proposed guarantor. "Transfer" shall also include
the transfer (a) if Tenant is a corporation, and Tenant's stock is not publicly
traded over a recognized securities exchange, of more than twenty five percent
(25%) of the voting stock of such corporation during the term of this Lease
(whether or not in one or more transfers) or the dissolution, merger or
liquidation of the corporation, or (b) if Tenant is a partnership or other
entity, of more than twenty five percent (25%) of the profit and loss
participation in such partnership or entity during the term of this Lease
(whether or not in one or more transfers) or the dissolution, merger or
liquidation of the partnership. If Tenant is a limited or general partnership
(or is comprised of two or more persons, individually or as co-partners), Tenant
shall not be entitled to change or convert to (i) a limited liability company,
(ii) a limited liability partnership or (iii) any other entity which possesses
the characteristics of limited liability without the prior written consent of
Landlord, which consent may be given or withheld in Landlord's sole discretion.
Tenant's sole remedy in the event that Landlord shall wrongfully withhold
consent to or disapprove any assignment or sublease shall be to obtain an order
by a court of competent jurisdiction that Landlord grant such consent; in no
event shall Landlord be liable for damages with respect to its granting or
withholding consent to any proposed assignment or sublease. If Landlord shall
exercise any option to recapture the Premises, or shall deny a request for
consent to a proposed assignment or sublease, Tenant shall indemnify, defend and
hold Landlord harmless from and against any and all losses, liabilities,
damages, costs and claims that may be made against Landlord by the proposed
assignee or subtenant, or by any brokers or other persons claiming a commission
or similar compensation in connection with the proposed assignment or sublease.

Notwithstanding anything to the contrary contained in this Lease, the original
Tenant hereunder may assign this Lease without the prior written consent of
Landlord, but upon prior written notice to Landlord, to an entity which
controls, is controlled by, or is under common control with Tenant; to any
entity which results from a merger of, reorganization of, or consolidation with
Tenant; or to any entity which acquires all or substantially all of the stock or
the assets of Tenant, as a going concern, with respect to the business that is
being conducted by Tenant at substantially all of its locations (collectively, a
"Permitted Transfer"), provided:

     a.   the assignee of this Lease shall have a net worth, on a consolidated
          basis, immediately prior to and following such assignment, in an
          amount not less than that of Tenant, immediately preceding the
          transfer and balance sheets and profit and loss statements certified
          by a certified public accountant or officer of Tenant and  furnished
          by Tenant to Landlord with Tenant's notice of such assignment; and

     b.   Tenant shall not be in default after the expiration of all applicable
          grace periods of any material term and/or provision of this Lease on
          the date Landlord is notified of such assignment and on the effective
          date of assignment; and

     c.   The permitted use of the Premises shall be for the same permitted use
          as provided in this Lease; and

     d.   Such assignee shall execute an assumption of lease agreement assuming
          the obligations of this Lease with the same force and effect as if
          such assignee executed this Lease as the Tenant; and

     e.   The assignee or transferee or its parent, subsidiaries or affiliates
          shall not be subject to any bankruptcy or insolvency proceedings at
          the time of such sale; and

     f.   Notwithstanding such assignment, Tenant shall remain fully liable and
          shall not be released from performing any of the terms of this Lease.

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<PAGE>

Furthermore and notwithstanding anything to the contrary contained herein, a
sale or transfer of the capital stock of the original Tenant shall be deemed a
Permitted Transfer if (1) such sale or transfer occurs in connection with a bona
fide financing or capitalization for the benefit of the original Tenant, or (2)
Tenant is or becomes a publicly traded corporation, and in either event Tenant
shall notify Landlord in writing promptly after the occurrence of such an event.
Landlord shall have no right to terminate the Lease in connection with, and
shall have no right to any sums or other economic consideration resulting from
any bona fide Permitted Transfer.

     12.2 Leveraged Buy-out.  Except as otherwise set forth in section 12.1, the
involvement by Tenant or its assets in any transaction, or series of
transactions (by way of merger, sale, acquisition, financing, refinancing,
transfer, leveraged buy-out or otherwise) whether or not a formal assignment or
hypothecation of this Lease or Tenant's assets occurs, which results or will
result in a reduction of the "Net Worth" of Tenant as hereinafter defined, by an
amount equal to or greater than twenty-five percent (25%) of such Net Worth of
Tenant as it is represented to Landlord at the time of the execution by Landlord
of this Lease, or as it exists immediately prior to said transaction or
transactions constituting such reduction, at whichever time said Net Worth of
Tenant was or is greater, shall be considered to be an assignment of this Lease
by Tenant to which Landlord may reasonably withhold its consent.  "Net Worth" of
Tenant for purposes of this section 12.2 shall be the net worth of Tenant
(excluding any guarantors) established under generally accepted accounting
principles consistently applied.

     12.3 Standard For Approval.  Landlord shall not unreasonably withhold its
consent to a Transfer provided that Tenant has complied with each and every
requirement, term and condition of this section 12.  Tenant acknowledges and
agrees that each requirement, term and condition in this section 12 is a
reasonable requirement, term or condition.  It shall be deemed reasonable for
Landlord to withhold its consent to a Transfer if any requirement, term or
condition of this section 12 is not complied with or: (a) the Transfer would
cause Landlord to be in violation of its obligations under another lease or
agreement to which Landlord is a party; (b) in Landlord's reasonable judgment, a
proposed assignee or subtenant has a smaller net worth than Tenant had on the
date this Lease was entered into with Tenant or is less able financially to pay
the rents due under this Lease as and when they are due and payable; (c) a
proposed assignee's or subtenant's business will impose a burden on the
Project's parking facilities, elevators, Common Areas or utilities that is
greater than the burden imposed by Tenant, in Landlord's reasonable judgment;
(d) the terms of a proposed assignment or subletting will allow the proposed
assignee or subtenant to exercise a right of renewal, right of expansion, right
of first offer, right of first refusal or similar right held by Tenant; (e) a
proposed assignee or subtenant refuses to enter into a written assignment
agreement or sublease, reasonably satisfactory to Landlord, which provides that
it will abide by and assume all of the terms and conditions of this Lease
(subject to section 12.4(k)) for the term of any assignment or sublease and
containing such other terms and conditions as Landlord reasonably deems
necessary; (f) the use of the Premises by the proposed assignee or subtenant
will not be identical to the use permitted by this Lease; (g) any guarantor of
this Lease refuses to consent to the Transfer or to execute a written agreement
reaffirming the guaranty; (h) Tenant is in default as defined in section 13.1 at
the time of the request; (i) if requested by Landlord, the assignee or subtenant
refuses to sign a non-disturbance and attornment agreement in favor of
Landlord's lender; (j) Landlord has sued or been sued by the proposed assignee
or subtenant or has otherwise been involved in a legal dispute with the proposed
assignee or subtenant; (k) the assignee or subtenant is involved in a business
which is not in keeping with the then current standards of the Project; (l) the
proposed assignee or subtenant is an existing tenant of the Project or is a
person or entity then negotiating with Landlord for the lease of space in the
Project; (m) the assignment or sublease will result in there being more than one
subtenant of the Premises (e.g., the assignee or subtenant intends to use the
Premises as an executive suite); or (n) the assignee or subtenant is a
governmental or quasi-governmental entity or an agency, department or
instrumentality of a governmental or quasi-governmental agency.

     12.4 Additional Terms and Conditions.  The following terms and conditions
shall be applicable to any Transfer:

          (a)  Regardless of Landlord's consent, no Transfer shall release
Tenant from Tenant's obligations hereunder or alter the primary liability of
Tenant to pay the rent and other sums due Landlord hereunder and to perform all
other obligations to be performed by Tenant hereunder or release any guarantor
from its obligations under its guaranty.

          (b)  Landlord may accept rent from any person other than Tenant
pending approval or disapproval of an assignment or subletting.

                                       18
<PAGE>

          (c)  Neither a delay in the approval or disapproval of a Transfer, nor
the acceptance of rent, shall constitute a waiver or estoppel of Landlord's
right to exercise its rights and remedies for the breach of any of the terms or
conditions of this section 12.

          (d)  The consent by Landlord to any Transfer shall not constitute a
consent to any subsequent Transfer by Tenant or to any subsequent or successive
Transfer by an assignee or subtenant.  However, Landlord may consent to
subsequent Transfers or any amendments or modifications thereto without
notifying Tenant or anyone else liable on the Lease and without obtaining their
consent, and such action shall not relieve such persons from liability under
this Lease.

          (e)  In the event of any default under this Lease, Landlord may
proceed directly against Tenant, any guarantors or anyone else responsible for
the performance of this Lease, including any subtenant or assignee, without
first exhausting Landlord's remedies against any other person or entity
responsible therefor to Landlord, or any security held by Landlord.

          (f)  Landlord's written consent to any Transfer by Tenant shall not
constitute an acknowledgment that no default then exists under this Lease nor
shall such consent be deemed a waiver of any then existing default.

          (g)  The discovery of the fact that any financial statement relied
upon by Landlord in giving its consent to an assignment or subletting was
materially false shall, at Landlord's election, render Landlord's consent null
and void.

          (h)  Landlord shall not be liable under this Lease or under any
sublease to any subtenant.

          (i)  No assignment or sublease may be modified or amended without
Landlord's prior written consent.

          (j)  The occurrence of a transaction described in section 12.2 shall
give Landlord the right (but not the obligation) to require that Tenant
immediately provide Landlord with an additional security deposit equal to twelve
(12) times the monthly Base Rent payable under the Lease, and Landlord may make
its receipt of such amount a condition to Landlord's consent to such
transaction.

          (k)  Any assignee of, or subtenant under, this Lease shall, by reason
of accepting such assignment or entering into such sublease, be deemed, for the
benefit of Landlord, to have assumed and agreed to conform and comply with each
and every term, covenant, condition and obligation herein to be observed or
performed by Tenant during the term of said assignment or sublease, other than
such obligations as are contrary or inconsistent with provisions of an
assignment or sublease to which Landlord has specifically consented in writing.

     12.5 Additional Terms and Conditions Applicable to Subletting.  The
following terms and conditions shall apply to any subletting by Tenant of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:

          (a)  Tenant hereby absolutely and unconditionally assigns and
transfers to Landlord all of Tenant's interest in all rentals and income arising
from any sublease entered into by Tenant, and Landlord may collect such rent and
income and apply same toward Tenant's obligations under this Lease; provided,
however, that until a default shall occur in the performance of Tenant's
obligations under this Lease, Tenant may receive, collect and enjoy the rents
accruing under such sublease. Landlord shall not, by reason of this or any other
assignment of such rents to Landlord nor by reason of the collection of the
rents from a subtenant, be deemed to have assumed or recognized any sublease or
to be liable to the subtenant for any failure of Tenant to perform and comply
with any of Tenant's obligations to such subtenant under such sublease,
including, but not limited to, Tenant's obligation to return any security
deposit. Tenant hereby irrevocably authorizes and directs any such subtenant,
upon receipt of a written notice from Landlord stating that a default exists in
the performance of Tenant's obligations under this Lease, to pay to Landlord the
rents due as they become due under the sublease. Tenant agrees that such
subtenant shall have the right to rely upon any such statement and request from
Landlord, and that such subtenant shall pay such rents to Landlord without any
obligation or right to inquire as to whether such default exists and
notwithstanding any notice from or claim from Tenant to the contrary.

                                       19
<PAGE>

          (b)  In the event Tenant shall default in the performance of its
obligations under this Lease, Landlord at its option and without any obligation
to do so, may require any subtenant to attorn to Landlord, in which event
Landlord shall undertake the obligations of Tenant under such sublease from the
time of the exercise of said option to the termination of such sublease;
provided, however, Landlord shall not be liable for any prepaid rents or
security deposit paid by such subtenant to Tenant or for any other prior
defaults of Tenant under such sublease.

     12.6 Transfer Premium from Assignment or Subletting.  Landlord shall be
entitled to receive from Tenant (as and when received by Tenant) as an item of
additional rent (hereinafter the "Transfer Premium"), seventy-five percent (75%)
of all amounts received by Tenant from the subtenant or assignee in excess of
the amounts payable by Tenant to Landlord hereunder.  The Transfer Premium shall
be reduced by the reasonable brokerage commissions and legal fees actually paid
by Tenant in order to assign the Lease or to sublet a portion of the Premises.
"Transfer Premium" shall mean all Base Rent, additional rent or other
consideration of any type whatsoever payable by the assignee or subtenant in
excess of the Base Rent and additional rent payable by Tenant under this Lease.
If less than all of the Premises is transferred, the Base Rent and the
additional rent shall be determined on a per rentable square foot basis.
"Transfer Premium" shall also include, but not be limited to, key money and
bonus money paid by the assignee or subtenant to Tenant in connection with such
Transfer, and any payment in excess of fair market value for services rendered
by Tenant to the assignee or subtenant or for assets, fixtures, inventory,
equipment, or furniture transferred by Tenant to the assignee or subtenant in
connection with such Transfer.  Notwithstanding the foregoing, this section 12.6
shall not apply to a bona fide Permitted Transfer.

     12.7 Landlord's Option to Recapture Space.  Notwithstanding anything to the
contrary contained in this section 12, Landlord shall have the option, by giving
written notice to Tenant within thirty (30) days after receipt of any request by
Tenant to assign this Lease or to sublease space in the Premises, to terminate
this Lease with respect to said space as of the date thirty (30) days after
Landlord's election.  In the event of a recapture by Landlord, if this Lease
shall be canceled with respect to less than the entire Premises, the Base Rent,
Tenant's Share of Operating Expense increases and the number of parking spaces
Tenant may use shall be adjusted on the basis of the number of rentable square
feet retained by Tenant in proportion to the number of rentable square feet
contained in the original Premises, and this Lease as so amended shall continue
thereafter in full force and effect, and upon request of either party, the
parties shall execute written confirmation of same.  If Landlord recaptures only
a portion of the Premises, it shall construct and erect at its sole cost such
partitions as may be required to sever the space to be retained by Tenant from
the space recaptured by Landlord.  Landlord may, at its option, lease any
recaptured portion of the Premises to the proposed subtenant or assignee or to
any other person or entity without liability to Tenant.  Tenant shall not be
entitled to any portion of the profit, if any, Landlord may realize on account
of such termination and reletting.  Tenant acknowledges that the purpose of this
section 12.7 is to enable Landlord to receive profit in the form of higher rent
or other consideration to be received from an assignee or subtenant, to give
Landlord the ability to meet additional space requirements of other tenants of
the Project and to permit Landlord to control the leasing of space in the
Project.  Tenant acknowledges and agrees that the requirements of this section
12.7 are commercially reasonable and are consistent with the intentions of
Landlord and Tenant.

     12.8 Landlord's Expenses.  In the event Tenant shall assign this Lease or
sublet the Premises or request the consent of Landlord to any Transfer, then
Tenant shall pay Landlord's reasonable costs and expenses incurred in connection
therewith, including, but not limited to, attorneys', architects', accountants',
engineers' or other consultants' fees.

13.  Default; Remedies.

     13.1 Default by Tenant.  Landlord and Tenant hereby agree that the
occurrence of any one or more of the following events is a material default by
Tenant under this Lease and that said default shall give Landlord the rights
described in section 13.2.  Landlord or Landlord's authorized agent shall have
the right to execute and to deliver any notice of default, notice to pay rent or
quit or any other notice Landlord gives Tenant.

          (a)  Tenant's failure to make any payment of Base Rent, Tenant's Share
of Operating Expense increases, Tenant's Share of Real Property Taxes, parking
charges (if any), charges for after hours HVAC, late charges, or any other
payment required to be made by Tenant hereunder, as and when due, where such
failure shall continue for a period of three (3) business days after written
notice thereof from Landlord to Tenant.  In the event that Landlord serves
Tenant with a notice to pay rent or quit pursuant to applicable unlawful
detainer statutes, such notice shall also constitute the notice required by this
section 13.1(a).

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<PAGE>

          (b)  The abandonment of the Premises by Tenant in which event Landlord
shall not be obligated to give any notice of default to Tenant.

          (c)  The failure of Tenant to comply with any of its obligations under
sections 6.1, 6.2(b), 7.2, 7.3, 8, 12, 18, 19, 21, 23, 26, 34, 35 and 56 where
Tenant fails to comply with its obligations or fails to cure any earlier breach
of such obligation within ten (10) days following written notice from Landlord
to Tenant.  In the event Landlord serves Tenant with a notice to quit or any
other notice pursuant to applicable unlawful detainer statutes, said notice
shall also constitute the notice required by this section 13.1(c).

          (d)  The failure by Tenant to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed by Tenant
(other than those referenced in sections 13.1(a), (b) and (c), above), where
such failure shall continue for a period of ten (10) days after written notice
thereof from Landlord to Tenant; provided, however, that if the nature of
Tenant's non-performance is such that more than ten (10) days are reasonably
required for its cure, then Tenant shall not be deemed to be in default if
Tenant commences such cure within said ten (10) day period and thereafter
diligently pursues such cure to completion.  In the event that Landlord serves
Tenant with a notice to quit or any other notice pursuant to applicable unlawful
detainer statutes, said notice shall also constitute the notice required by this
section 13.1(d).

          (e)  The making by Tenant or any guarantor of Tenant's obligations
hereunder of any general arrangement or general assignment for the benefit of
creditors; (ii) Tenant or any guarantor becoming a "debtor" as defined in 11
U.S.C.  101 or any successor statute thereto (unless, in the case of a petition
filed against Tenant or guarantor, the same is dismissed within sixty (60)
days); (iii) the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within thirty
(30) days; (iv) the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within thirty (30)
days; or (v) the insolvency of Tenant.  In the event that any provision of this
section 13.1(e) is unenforceable under applicable law, such provision shall be
of no force or effect.

          (f)  The discovery by Landlord that any financial statement,
representation or warranty given to Landlord by Tenant, or by any guarantor of
Tenant's obligations hereunder, was materially false at the time given.  Tenant
acknowledges that Landlord has entered into this Lease in material reliance on
such information.

          (g)  If Tenant is a corporation or a partnership, the dissolution or
liquidation of Tenant.

          (h)  If Tenant's obligations under this Lease are guaranteed: (i) the
death of a guarantor, (ii) the termination of a guarantor's liability with
respect to this Lease other than in accordance with the terms of such guaranty,
(iii) a guarantor's becoming insolvent or the subject of a bankruptcy filing,
(iv) a guarantor's refusal to honor the guaranty, or (v) a guarantor's breach of
its guaranty obligation on an anticipatory breach basis.

     13.2 Remedies.

          (a)  In the event of any material default or breach of this Lease by
Tenant, Landlord may, at any time thereafter, with or without notice or demand,
and without limiting Landlord in the exercise of any right or remedy which
Landlord may have by reason of such default:

               (i)  terminate Tenant's right to possession of the Premises by
any lawful means, in which case this Lease and the term hereof shall terminate
and Tenant shall immediately surrender possession of the Premises to Landlord.
If Landlord terminates this Lease, Landlord may recover from Tenant (A) the
worth at the time of award of the unpaid rent and all additional charges which
would have been payable hereunder for the remainder of the term of the Lease
including, without limitation, Tenant's share of Operating Expenses increases,
Tenant's Share of Real Property Tax increases, and Tenant Electricity Cost which
had been earned at the time of termination; (B) the worth at the time of award
of the amount by which the unpaid rent and all additional charges which would
have been payable hereunder for the remainder of the term of the Lease
including, without limitation, Tenant's share of Operating Expenses increases,
Tenant's Share of Real Property Tax increases, and Tenant Electricity Cost which
would have been earned after termination until the time of award exceeds the
amount of such rental loss that Tenant proves could have been reasonably
avoided; (C) the worth at the time of award of the amount by which the unpaid
rent and all additional charges

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<PAGE>

which would have been payable hereunder for the remainder of the term of the
Lease including, without limitation, Tenant's share of Operating Expenses
increases, Tenant's Share of Real Property Tax increases, and Tenant Electricity
Cost for the balance of the term after the time of award exceeds the amount of
such rental loss that Tenant proves could be reasonably avoided; and (D) any
other amount necessary to compensate Landlord for all detriment proximately
caused by Tenant's failure to perform its obligations under the Lease or which
in the ordinary course of things would be likely to result therefrom, including,
but not limited to, the cost of recovering possession of the Premises, the
unamortized cost of Landlord's Work, expenses of releasing, including necessary
renovation and alteration of the Premises, reasonable attorneys' fees, any real
estate commissions actually paid by Landlord and the unamortized value of any
free rent, reduced rent, tenant improvement allowance or other economic
concessions provided by Landlord. The "worth at time of award" of the amounts
referred to in section 13.2(a)(i)(A) and (B) shall be computed by allowing
interest at the lesser of ten percent (10%) per annum or the maximum interest
rate permitted by applicable law. The worth at the time of award of the amount
referred to in section 13.2(a)(i)(C) shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of Boston at the time of
award plus one percent (1%). For purposes of this section 13.2(a)(i), "rent"
shall be deemed to be all monetary obligations required to be paid by Tenant
pursuant to the terms of this Lease.

                (ii)  collect sublease rents (or appoint a receiver to collect
such rent) and otherwise perform Tenant's obligations at the Premises, it being
agreed, however, that the appointment of a receiver for Tenant shall not
constitute an election by Landlord to terminate this Lease.

                (iii) pursue any other remedy now or hereafter available to
Landlord under the laws or judicial decisions of the state in which the Premises
are located.

           (b)  No remedy or election hereunder shall be deemed exclusive, but
shall, wherever possible, be cumulative with all other remedies at law or in
equity.  The expiration or termination of this Lease and/or the termination of
Tenant's right to possession of the Premises shall not relieve Tenant of
liability under any indemnity provisions of this Lease as to matters occurring
or accruing during the term of the Lease or by reason of Tenant's occupancy of
the Premises.

           (c)  If Tenant abandons or vacates the Premises, Landlord may re-
enter the Premises and such re-entry shall not be deemed to constitute
Landlord's election to accept a surrender of the Premises or to otherwise
relieve Tenant from liability for its breach of this Lease. No surrender of the
Premises shall be effective against Landlord unless Landlord has entered into a
written agreement with Tenant in which Landlord expressly agrees to (i) accept a
surrender of the Premises and (ii) relieve Tenant of liability under the Lease.
The delivery by Tenant to Landlord of possession of the Premises shall not
constitute the termination of the Lease or the surrender of the Premises.

     13.3  Default by Landlord.  Landlord shall not be in default under this
Lease unless Landlord fails to perform obligations required of Landlord within
thirty (30) days after written notice by Tenant to Landlord and to the holder of
any mortgage or deed of trust encumbering the Project whose name and address
shall have theretofore been furnished to Tenant in writing, specifying wherein
Landlord has failed to perform such obligation; provided, however, that if the
nature of Landlord's obligation is such that more than thirty (30) days are
required for its cure, then Landlord shall not be in default if Landlord
commences performance within such thirty (30) day period and thereafter
diligently pursues the same to completion.  In no event shall Tenant have the
right to terminate this Lease as a result of Landlord's default, and Tenant's
remedies shall be limited to damages and/or an injunction.  Tenant hereby waives
its right to recover consequential damages (including, but not limited to, lost
profits) or punitive damages arising out of a Landlord default.  This Lease and
the obligations of Tenant hereunder shall not be affected or impaired because
Landlord is unable to fulfill any of its obligations hereunder or is delayed in
doing so, if such inability or delay is caused by reason of a Force Majeure
Event, and the time for Landlord's performance shall be extended for the period
of any such delay.

     13.4  Late Charges.  Tenant hereby acknowledges that late payment by Tenant
to Landlord of Base Rent, Tenant's Share of Operating Expense increases,
Tenant's Share of Real Estate Tax increases, Tenant Electricity Cost, parking
charges (if any), after hours HVAC charges,  or other sums due hereunder will
cause Landlord to incur costs not contemplated by this Lease, the exact amount
of which will be extremely difficult to ascertain.  Such costs include, but are
not limited to, processing and accounting charges and late charges which may be
imposed on Landlord by the terms of any mortgage or trust deed encumbering the
Project.  Accordingly, if any installment of Base Rent, Tenant's Share of
Operating Expense increases, parking charges (if any), after hours HVAC charges
or any other sum due from Tenant shall not be received by Landlord when such
amount shall be due, then, without any requirement for notice or demand to
Tenant, Tenant shall immediately pay to Landlord a late charge equal to six
percent (6%) of such overdue amount.  The

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<PAGE>

parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs Landlord will incur by reason of late payment by Tenant.
Acceptance of such late charge by Landlord shall in no event constitute a waiver
of Tenant's default with respect to such overdue amount, nor prevent Landlord
from exercising any of the other rights and remedies granted hereunder including
the assessment of interest under section 13.5.

     13.5  Interest on Past-due Obligations.  Except as expressly herein
provided, any amount due to Landlord that is not paid when due shall bear
interest at the lesser of eighteen percent (18%) per annum or the maximum rate
permitted by applicable law.  Payment of such interest shall not excuse or cure
any default by Tenant under this Lease; provided, however, that interest shall
not be payable on late charges incurred by Tenant nor on any amounts upon which
late charges are paid by Tenant.

     13.6  Payment of Rent and Security Deposit after Default.  If Tenant fails
to pay Base Rent, Tenant's Share of Operating Expense increases, parking charges
(if any) or any other monetary obligation due hereunder on the date it is due,
after Tenant's third failure within twelve (12) consecutive months to pay any
monetary obligation on the date it is due, at Landlord's option, all monetary
obligations of Tenant hereunder shall thereafter be paid by cashier's check, and
Tenant shall, upon demand, provide Landlord with an additional security deposit
equal to three (3) months' Base Rent.  If Landlord has required Tenant to make
said payments by cashier's check or to provide an additional security deposit,
Tenant's failure to make a payment by cashier's check or to provide the
additional security deposit shall be a material default hereunder.

14.  Landlord's Right to Cure Default; Payments by Tenant.  All covenants and
agreements to be kept or performed by Tenant under this Lease shall be performed
by Tenant at Tenant's sole cost and expense and without any reduction of rent.
If Tenant shall fail to perform any of its obligations under this Lease, within
a reasonable time after such performance is required by the terms of this Lease,
Landlord may, but shall not be obligated to, after three (3) days prior written
notice to Tenant, make any such payment or perform any such act on Tenant's
behalf without waiving its rights based upon any default of Tenant and without
releasing Tenant from any obligations hereunder.  Tenant shall pay to Landlord,
within ten (10) days after delivery by Landlord to Tenant of statements
therefore, an amount equal to the expenditures reasonably made by Landlord in
connection with the remedying by Landlord of Tenant's defaults pursuant to the
provisions of this section 14.

15.  Condemnation.  If any portion of the Premises or the Project are taken
under the power of eminent domain, or sold under the threat of the exercise of
said power (all of which are herein called "condemnation"), this Lease shall
terminate as to the part so taken as of the date the condemning authority takes
title or possession, whichever first occurs; provided that if so much of the
Premises or Project are taken by such condemnation as would substantially and
adversely affect the operation and profitability of Tenant's business conducted
from the Premises, and said taking lasts for ninety (90) days or more, Tenant
shall have the option, to be exercised only in writing within thirty (30) days
after Landlord shall have given Tenant written notice of such taking (or in the
absence of such notice, within thirty (30) days after the condemning authority
shall have taken possession), to terminate this Lease as of the date the
condemning authority takes such possession.  If a taking lasts for less than
ninety (90) days, Tenant's rent shall be abated during said period but Tenant
shall not have the right to terminate this Lease.  If Tenant does not terminate
this Lease in accordance with the foregoing, this Lease shall remain in full
force and effect as to the portion of the Premises remaining, except that the
rent and Tenant's Share of Operating Expenses shall be reduced in the proportion
that the usable floor area of the Premises taken bears to the total usable floor
area of the Premises.  Common Areas taken shall be excluded from the Common
Areas usable by Tenant and no reduction of rent shall occur with respect thereto
or by reason thereof.  Landlord shall have the option in its sole discretion to
terminate this Lease as of the taking of possession by the condemning authority,
by giving written notice to Tenant of such election within thirty (30) days
after receipt of notice of a taking by condemnation of any part of the Premises
or the Project.  Any award for the taking of all or any part of the Premises or
the Project under the power of eminent domain or any payment made under threat
of the exercise of such power shall be the property of Landlord, whether such
award shall be made as compensation for diminution in value of the leasehold,
for good will, for the taking of the fee, as severance damages, or as damages
for tenant improvements; provided, however, that Tenant shall be entitled to any
separate award for loss of or damage to Tenant's removable personal property and
for moving expenses.  In the event that this Lease is not terminated by reason
of such condemnation, and subject to the requirements of any lender that has
made a loan to Landlord encumbering the Project, Landlord shall to the extent of
severance damages received by Landlord in connection with such condemnation,
repair any damage to the Project caused by such condemnation except to the
extent that Tenant has been reimbursed therefor by the condemning authority.
Tenant shall pay any amount in excess of such severance damages required to
complete

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<PAGE>

such repair. This section, not general principles of law, shall govern the
rights and obligations of Landlord and Tenant with respect to the condemnation
of all or any portion of the Project.

16.  Vehicle Parking;  Use of Parking Facilities.  During the term and subject
to the rules and regulations attached hereto as Exhibit "C," as modified by
Landlord from time to time (the "Rules"), Tenant shall be entitled to use the
number of parking spaces set forth in section 1.15 in the parking facility of
the Project.  Landlord may, in its sole discretion, assign tandem parking spaces
to Tenant and designate the location of any reserved parking spaces.  For
purposes of this Lease, a "parking space" refers to the space in which one (1)
motor vehicle is intended to park (e.g., a tandem parking stall includes two
tandem parking spaces).  Landlord reserves the right at any time to relocate
Tenant's reserved and unreserved parking spaces.  If Tenant commits or allows in
the parking facility any of the activities prohibited by the Lease or the Rules,
then Landlord shall have the right, without notice, in addition to such other
rights and remedies that it may have, to remove or tow away the vehicle involved
and charge the cost to Tenant, which cost shall be immediately payable by Tenant
upon demand by Landlord.  Tenant shall not transfer, assign, or otherwise convey
its parking rights separate and apart from this Lease.

17.  Broker's Fee. Tenant and Landlord each represent and warrant to the other
that neither has had any dealings or entered into any agreements with any
person, entity, broker or finder other than the persons, if any, listed in
section 1.17, in connection with the negotiation of this Lease, and no other
broker, person, or entity is entitled to any commission or finder's fee in
connection with the negotiation of this Lease, and Tenant and Landlord each
agree to indemnify, defend and hold the other harmless from and against any
claims, damages, costs, expenses, attorneys' fees or liability for compensation
or charges which may be claimed by any such unnamed broker, finder or other
similar party by reason of any dealings, actions or agreements of the
indemnifying party.

18.  Estoppel Certificate.

     18.1  Delivery of Certificate. Tenant shall from time to time upon not less
than ten (10) business days' prior written notice from Landlord execute,
acknowledge and deliver to Landlord a statement in writing certifying such
information as Landlord may reasonably request including, but not limited to,
the following: (a) that this Lease is unmodified and in full force and effect
(or, if modified, stating the nature of such modification and certifying that
this Lease, as so modified, is in full force and effect) (b) the date to which
the Base Rent and other charges are paid in advance and the amounts so payable,
(c) that there are not, to Tenant's knowledge, any uncured defaults or
unfulfilled obligations on the part of Landlord, or specifying such defaults or
unfulfilled obligations, if any are claimed, (d) that all tenant improvements to
be constructed by Landlord, if any, have been completed in accordance with
Landlord's obligations and (e) that Tenant has taken possession of the Premises.
Any such statement may be conclusively relied upon by any prospective purchaser
or encumbrancer of the Project.

     18.2  Failure to Deliver Certificate.  At Landlord's option, the failure of
Tenant to deliver such statement within such time shall constitute a material
default of Tenant hereunder, or it shall be conclusive upon Tenant that (a) this
Lease is in full force and effect, without modification except as may be
represented by Landlord, (b) there are no uncured defaults in Landlord's
performance, (c) not more than one month's Base Rent has been paid in advance,
(d) all tenant improvements to be constructed by Landlord, if any, have been
completed in accordance with Landlord's obligations and (e) Tenant has taken
possession of the Premises.

19.  Financial Information.  From time to time, at Landlord's request, Tenant
shall cause the following financial information to be delivered to Landlord, at
Tenant's sole cost and expense, upon not less than ten (10) days' advance
written notice from Landlord: (a) a current financial statement for Tenant and
Tenant's financial statements for the previous two accounting years, (b) a
current financial statement for any guarantor(s) of this Lease and the
guarantor'(s) financial statements for the previous two accounting years and (c)
such other financial information pertaining to Tenant or any guarantor as
Landlord or any lender or purchaser of Landlord may reasonably request.  All
financial statements shall be prepared in accordance with generally accepted
accounting principals consistently applied and, if such is the normal practice
of Tenant, shall be audited by an independent certified public accountant.
Tenant hereby authorizes Landlord, from time to time, without notice to Tenant,
to obtain a credit report or credit history on Tenant from any credit reporting
company.  Landlord shall not request financial statements from Tenant more than
once every six (6) months and Landlord or Landlord's lender, accounts,
attorneys, financial representatives or agents, or prospective purchasers shall
keep the information contained therein in confidence, subject to order by any
court, governmental agency or other organization having jurisdiction over
Landlord.  Furthermore, Tenant's obligations with respect to Financial
Statements shall be limited to Tenant's Financial Statements existing as of the
time of the request.

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<PAGE>

20.  Landlord's Liability.  Tenant acknowledges that Landlord shall have the
right to transfer all or any portion of its interest in the Project and to
assign this Lease to the transferee.  Tenant agrees that in the event of such a
transfer Landlord shall automatically be released from all future liability
under this Lease; and Tenant hereby agrees to look solely to Landlord's
transferee for the performance of Landlord's obligations hereunder after the
date of the transfer.  Upon such a transfer, Landlord shall, at its option,
return Tenant's security deposit to Tenant or transfer Tenant's security deposit
to Landlord's transferee and, in either event, Landlord shall have no further
liability to Tenant for the return of its security deposit.  Subject to the
rights of any lender holding a mortgage or deed of trust encumbering all or part
of the Project, Tenant agrees to look solely to Landlord's equity interest in
the Project for the collection of any judgment requiring the payment of money by
Landlord arising out of (a) Landlord's failure to perform its obligations under
this Lease or (b) the negligence or wilful misconduct of Landlord, its partners,
employees and agents.  No other property or assets of Landlord shall be subject
to levy, execution or other enforcement procedure for the satisfaction of any
judgment or writ obtained by Tenant against Landlord.  No partner, employee or
agent of Landlord shall be personally liable for the performance of Landlord's
obligations hereunder or be named as a party in any lawsuit arising out of or
related to, directly or indirectly, this Lease and the obligations of Landlord
hereunder.  The obligations under this Lease do not constitute personal
obligations of the individual partners of Landlord, if any, and Tenant shall not
seek recourse against the individual partners of Landlord or their assets.

21.  Indemnity.  To the extent allowed by law, Tenant hereby agrees to
indemnify, defend and hold harmless Landlord and its employees, partners,
agents, contractors, lenders and ground lessors (said persons and entities are
hereinafter collectively referred to as the "Indemnified Parties") from and
against any and all liability, loss, cost, damage, claims, loss of rents, liens,
judgments, penalties, fines, settlement costs, investigation costs, the cost of
consultants and experts, attorneys fees, court costs and other legal expenses,
the effects of environmental contamination, the cost of environmental testing,
the removal, remediation and/or abatement of Hazardous Substances (as defined
below), insurance policy deductibles and other expenses (hereinafter
collectively referred to as "Damages") arising out of or related to an
"Indemnified Matter" (as defined below).  For purposes of this section 21, an
"Indemnified Matter" shall mean any matter for which one or more of the
Indemnified Parties incurs liability or Damages if the liability or Damages
arise out of or involve, directly or indirectly, (a) Tenant's or its employees,
agents, contractors or invitees (all of said persons or entities are hereinafter
collectively referred to as "Tenant Parties") use or occupancy of the Premises
or the Project, (b) any act, omission or neglect of a Tenant Party, (c) Tenant's
failure to perform any of its obligations under the Lease, (d) the existence,
use or disposal of any Hazardous Substance (as defined in section 23 below)
brought on to the project by a Tenant Party, or (e) any other matters for which
Tenant has agreed to indemnify Landlord pursuant to any other provision of this
Lease.  Tenant's obligations hereunder shall include, but shall not be limited
to (f) compensating the Indemnified Parties for Damages arising out of
Indemnified Matters within ten (10) days after written demand from an
Indemnified Party and (g) providing a defense, with counsel reasonably
satisfactory to the Indemnified Party, at Tenant's sole expense, within ten (10)
days after written demand from the Indemnified Party, of any claims, action or
proceeding arising out of or relating to an Indemnified Matter whether or not
litigated or reduced to judgment and whether or not well founded.  If Tenant is
obligated to compensate an Indemnified Party for Damages arising out of an
Indemnified Matter, Landlord shall have the immediate and unconditional right,
but not the obligation, without notice or demand to Tenant, to pay the damages
and Tenant shall, upon ten (10) days advance written notice from Landlord,
reimburse Landlord for the costs incurred by Landlord.  By way of example, and
not limitation, Landlord shall have the immediate and unconditional right to
cause any damages to the Common Areas, another tenant's premises or to any other
part of the Project to be repaired and to compensate other tenants of the
Project or other persons or entities for Damages arising out of an Indemnified
Matter.  The Indemnified Parties need not first pay any Damages to be
indemnified hereunder.  Tenant's obligations under this section shall not be
released, reduced or otherwise limited because one or more of the Indemnified
Parties are or may be actively or passively negligent with respect to an
Indemnified Matter or because an Indemnified Party is or was partially
responsible for the Damages incurred.  This indemnity is intended to apply to
the fullest extent permitted by applicable law.  Tenant's obligations under this
section shall survive the expiration or termination of this Lease unless
specifically waived in writing by Landlord after said expiration or termination.

22.  Signs.  Tenant shall not place any sign upon the Premises (including on the
inside or the outside of the doors or windows of the Premises) or the Project
without Landlord's prior written consent, which may be given or withheld in
Landlord's sole discretion.  Landlord shall have the right to place any sign it
deems appropriate on any portion of the Project except the interior of the
Premises.  Any sign Landlord permits Tenant to place upon the Premises shall be
maintained by Tenant, at Tenant's sole expense.  If Landlord permits Tenant to
include its name in the Building's directory, the cost of placing Tenant's name
in the directory and the cost of any subsequent modifications thereto shall be
paid by Tenant, at Tenant's sole expense.

                                       25
<PAGE>

23.  Hazardous Substances.

     23.1  Definition and Consent.  The term "Hazardous Substance" as used in
this Lease shall mean any product, substance, chemical, material or waste whose
presence, nature, quantity and/or intensity of existence, use, manufacture,
disposal, transportation, spill, release or affect, either by itself or in
combination with other materials expected to be on the Premises, is either: (a)
potentially injurious to the public health, safety or welfare, the environment
or the Premises, (b) regulated or monitored by any governmental entity, (c) a
basis for liability of Landlord to any governmental entity or third party under
any federal, state or local statute or common law theory or (d) defined as a
hazardous material or substance by any federal, state or local law or
regulation.  Except for small quantities or ordinary office supplies such as
copier toner, liquid paper, glue, ink and common household cleaning materials,
Tenant shall not cause or permit any Hazardous Substance to be brought, kept, or
used in or about the Premises or the Project by Tenant, its agents, employees,
contractors or invitees.

     23.2  Duty to Inform Landlord.  If Tenant knows, or has reasonable cause to
believe, that a Hazardous Substance, or a condition involving or resulting from
same, has come to be located in, on or under or about the Premises or the
Project, Tenant shall immediately give written notice of such fact to Landlord.
Tenant shall also immediately give Landlord (without demand by Landlord) a copy
of any statement, report, notice, registration, application, permit, license,
given to or received from, any governmental authority or private party, or
persons entering or occupying the Premises, concerning the presence, spill,
release, discharge of or exposure to, any Hazardous Substance or contamination
in, on or about the Premises or the Project.

     23.3  Inspection; Compliance.  Landlord and Landlord's employees, agent,
contractors and lenders shall have the right to enter the Premises at any time
in the case of an emergency, and otherwise at reasonable times (upon reasonable
notice), for the purpose of inspecting the condition of the Premises and for
verifying compliance by Tenant with this section 23.  Landlord shall have the
right to employ experts and/or consultants in connection with its examination of
the Premises and with respect to the installation, operation, use, monitoring,
maintenance, or removal of any Hazardous Substance on or from the Premises.  The
costs and expenses of any such inspections shall be paid by the party requesting
same, unless a contamination, caused or materially contributed to by Tenant, is
found to exist or be imminent, or unless the inspection is requested or ordered
by governmental authority as the result of any such existing or imminent
violation or contamination.  In any such case, Tenant shall upon request
reimburse Landlord for the cost and expenses of such inspection.

24.  Intentionally Deleted.

25.  Tenant Improvements.  Tenant acknowledges and agrees that except as
otherwise set forth in this Lease, Landlord shall not be obligated to construct
any tenant improvements on behalf of Tenant and it is specifically understood
and agreed that Landlord has no obligation and has made no promises to alter,
remodel, improve, renovate, repair or decorate the Premises, the Project, or any
part thereof, or to provide any allowance for such purposes, and that no
representations respecting the condition of the Premises or the Project have
been made by Landlord to Tenant.

                                       26
<PAGE>

26.  Subordination.

     26.1  Effect of Subordination.  This Lease, and any Option (as defined in
section 27 below) granted hereby, upon Landlord's written election, shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or any
other hypothecation or security now or hereafter placed upon the Project and to
any and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof.
Notwithstanding such subordination, Tenant's right to quiet possession of the
Premises shall not be disturbed if Tenant is not in default and so long as
Tenant shall pay the rent and observe and perform all of the provisions of this
Lease, unless this Lease is otherwise terminated pursuant to its terms.  At the
request of any mortgagee, trustee or ground lessor, Tenant shall attorn to such
person or entity.  Landlord shall use commercially reasonable efforts to obtain
a commercially reasonable subordination and nondisturbance and attornment
agreement effecting the terms hereof from any mortgagee, trustee or ground
lessor.  If any mortgagee, trustee or ground lessor shall elect to have this
Lease and any Option granted hereby prior to the lien of its mortgage, deed of
trust or ground lease, and shall give written notice thereof to Tenant, this
Lease and such Options shall be deemed prior to such mortgage, deed of trust or
ground lease, whether this Lease or such Options are dated prior or subsequent
to the date of said mortgage, deed of trust or ground lease or the date of
recording thereof.  In the event of the foreclosure of a security device, the
new owner shall not (a) be liable for any act or omission of any prior landlord
or with respect to events occurring prior to its acquisition of title, (b) be
liable for the breach of this Lease by any prior landlord, (c) be subject to any
offsets or defenses which Tenant may have against the prior landlord or (d) be
liable to Tenant for the return of its security deposit.

     26.2  Execution of Documents.  Tenant agrees to execute and acknowledge any
documents Landlord reasonably requests that Tenant execute to effectuate an
attornment, a subordination, or to make this Lease or any Option granted herein
prior to the lien of any mortgage, deed of trust or ground lease, as the case
may be.  Tenant acknowledges that the subordination agreement may give the
lender the right, in the lender's sole discretion, to continue this Lease in
effect or to terminate this Lease in the event of a foreclosure sale.  Tenant's
failure to execute such documents within ten (10) business days after written
demand shall constitute a material default by Tenant hereunder or, at Landlord's
option, Landlord shall have the right to execute such documents on behalf of
Tenant as Tenant's attorney-in-fact.  Tenant does hereby make, constitute and
irrevocably appoint Landlord as Tenant's attorney-in-fact and in Tenant's name,
place and stead, to execute such documents in accordance with this section 26.2.

27.  Options.

     27.1  Definition.  As used in this Lease, the word "Option" shall mean the
right or option to extend the term of this Lease.  Any Option granted to Tenant
by Landlord must be evidenced by a written option agreement attached to this
Lease as a rider or addendum or said option shall be of no force or effect.

     27.2  Options Personal.  Each Option granted to Tenant in this Lease, if
any, is personal to the original Tenant (and assignee pursuant to any Permitted
Transfer) and may be exercised only by the original Tenant (or assignee pursuant
to any Permitted Transfer) while occupying the entire Premises and may not be
exercised or be assigned, voluntarily or involuntarily, by or to any person or
entity other than Tenant (or assignee pursuant to any Permitted Transfer).  The
Option, if any, herein granted to Tenant are not assignable separate and apart
from this Lease, nor may any Option be separated from this Lease in any manner,
either by reservation or otherwise.  If at any time an Option is exercisable by
Tenant, the Lease has been assigned, or a sublease exists as to any portion of
the Premises, the Option shall be deemed null and void and neither Tenant nor
any assignee or subtenant shall have the right to exercise the Option.

     27.3  Multiple Options.  In the event that Tenant has multiple Options to
extend or renew this Lease a later Option cannot be exercised unless the prior
Option to extend or renew this Lease has been so exercised.

     27.4  Effect of Default on Option.  Tenant shall have no right to exercise
an Option (i) during the time commencing from the date Landlord gives to Tenant
a notice of default pursuant to section 13.1 and continuing until the
noncompliance alleged in said notice of default is cured, or (ii) if Tenant is
in default of any of the terms, covenants or conditions of this Lease.  The
period of time within which an Option may be exercised shall not be extended or
enlarged by reason of Tenant's inability to exercise an Option because of the
provisions of this section 27.4.

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<PAGE>

     27.5  Limitations on Option.  Notwithstanding anything to the contrary
contained in any rider or addendum to this Lease, any Option, rights of first
refusal or rights of first offer granted hereunder shall be subject and
secondary to Landlord's right to first offer and lease any such space to any
tenant who is then occupying or leasing such space at the time the space becomes
available for leasing and shall be subject and subordinated to any other
options, rights of first refusal or rights of first offer previously given to
any other person or entity.

     27.6  Notice of Exercise of Option.  Notwithstanding anything to the
contrary contained in section 41, Tenant may only exercise an Option by
delivering its written notice of exercise to Landlord by certified mail, return
receipt and date of delivery requested.  It shall be Tenant's obligation to
prove that such notice was so sent in a timely manner and was delivered to
Landlord by the U.S. Postal Service.

28.  Landlord Reservations.  Landlord shall have the right: (a) to change the
name and address of the Project or Building upon not less than ninety (90) days
prior written notice; (b) to, at Tenant's expense, provide and install Building
standard graphics on or near the door of the Premises and such portions of the
Common Areas as Landlord shall determine, in Landlord's sole discretion; (c) to
permit any tenant the exclusive right to conduct any business as long as such
exclusive right does not conflict with any rights expressly given herein; and
(d) to place signs, notices or displays upon the roof, interior, exterior or
Common Areas of the Project.  Tenant shall not use a representation
(photographic or otherwise) of the Building or the Project or their name(s) in
connection with Tenant's business or suffer or permit anyone, except in an
emergency, to go upon the roof of the Building.  Landlord reserves the right to
use the exterior walls of the Premises, and the area beneath, adjacent to and
above the Premises together with the right to install, use, maintain and replace
equipment, machinery, pipes, conduits and wiring through the Premises, which
serve other parts of the Project provided that Landlord's use does not
unreasonably interfere with Tenant's use of the Premises.

29.  Changes to Project. Landlord shall have the right, in Landlord's sole
discretion, from time to time, to make changes to the size, shape, location,
number and extent of the improvements comprising the Project (hereinafter
referred to as "Changes") including, but not limited to, the Project interior
and exterior, the Common Areas, elevators, escalators, restrooms, HVAC,
electrical systems, communication systems, fire protection and detection
systems, plumbing systems, security systems, parking control systems, driveways,
entrances, parking spaces, parking areas and landscaped areas.  In connection
with the Changes, Landlord may, among other things, erect scaffolding or other
necessary structures at the Project, limit or eliminate access to portions of
the Project, including portions of the Common Areas, or perform work in the
Building, which work may create noise, dust or leave debris in the Building.
Tenant hereby agrees that such Changes and Landlord's actions in connection with
such Changes shall in no way constitute a constructive eviction of Tenant or
entitle Tenant to any abatement of rent.  Landlord shall have no responsibility
or for any reason be liable to Tenant for any direct or indirect injury to or
interference with Tenant's business arising from the Changes, nor shall Tenant
be entitled to any compensation or damages from Landlord for any inconvenience
or annoyance occasioned by such Changes or Landlord's actions in connection with
such Changes.

30.  Substitution of Other Premises.  Landlord shall have the right at any time
to relocate Tenant to any other leasable space in the Project provided that said
space shall be approximately the same size as the Premises and that Landlord
shall pay the cost of moving Tenant's furniture and equipment to the new space.
The new space shall include tenant improvements that are substantially
equivalent to the tenant improvements contained in the Premises, and the cost of
any required tenant improvements shall be paid by Landlord.  If Landlord elects
to relocate Tenant, Landlord shall give Tenant written notice of its election
and Tenant shall have thirty (30) days thereafter to agree to be relocated in
accordance with the terms and conditions of this section 30 or to elect to
terminate this Lease.  If Tenant elects to terminate this Lease within said
thirty (30) day period or fails to respond to Landlord's notice within said
thirty (30) day period, this Lease shall then terminate on the date which is
sixty (60) days after the date Landlord gave Tenant its written notice electing
to relocate Tenant.  Landlord shall have no liability to Tenant as a result of
Tenant's election to terminate this Lease.  Prior to said termination, Landlord
and Tenant shall perform all of their obligations under this Lease.  If Tenant
elects to be relocated, Landlord shall deliver substitute space to Tenant not
more than one hundred eighty (180) days after (a) Tenant agrees to be relocated
and (b) approves plans for the construction of required tenant improvements at
the new space, if any.  Tenant shall not unreasonably withhold or delay its
approval of any plans for the construction of tenant improvements.  Landlord
shall give Tenant thirty (30) days advance notice of the estimated move in date.
Prior to the date that Tenant is moved to the new space, Tenant shall remain in
the Premises and shall continue to perform all of its obligations under this
Lease.  After Tenant moves into the new space, this Lease shall remain in full
force and effect and be deemed applicable to such new space, except as to Base
Rent, Tenant's Share of Operating Expense increases and the number of parking
spaces Tenant shall be entitled to use, all of which shall be adjusted based on
the relationship between the number of rentable square feet in the original
Premises and the number of rentable square feet

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<PAGE>

in the substituted space. Upon Tenant's election to be relocated, Landlord and
Tenant shall amend this Lease to provide for the relocation of the Premises.

31.  Holding Over.  If Tenant remains in possession of the Premises or any part
thereof after the expiration or earlier termination of the term hereof with
Landlord's consent, such occupancy shall be a tenancy from month to month upon
all the terms and conditions of this Lease pertaining to the obligations of
Tenant, except that the Base Rent payable for the first thirty (30) day period
of such holdover shall be one hundred fifty (150%) percent of the Base Rent Base
Rent payable immediately preceding the termination date of this Lease and after
such thirty (30) day period of holdover, the Base Rent payable shall be two
hundred percent (200%) of the Base Rent payable immediately preceding the
termination date of this Lease and all Options, if any, shall be deemed
terminated and be of no further effect.  If Tenant remains in possession of the
Premises or any part thereof after the expiration of the term hereof without
Landlord's consent, Tenant shall, at Landlord's option, be treated as a tenant
at sufferance or a trespasser.  Nothing contained herein shall be construed to
constitute Landlord's consent to Tenant holding over at the expiration or
earlier termination of the Lease term or to give Tenant the right to hold over
after the expiration or earlier termination of the Lease term.  Tenant hereby
agrees to indemnify, hold harmless and defend Landlord from any cost, loss,
claim or liability (including attorneys' fees) Landlord may incur as a result of
Tenant's failure to surrender possession of the Premises to Landlord upon the
termination of this Lease.

32.  Landlord's Access.

     32.1  Access.  Landlord and Landlord's agents, contractors and employees
shall have the right to enter the Premises at reasonable times (and upon
reasonable notice) for the purpose inspecting the Premises, performing any
services required of Landlord, showing the Premises to prospective purchasers,
lenders, or tenants, undertaking safety measures and making alterations,
repairs, improvements or additions to the Premises or to the Project.  In the
event of an emergency, Landlord may gain access to the Premises by any
reasonable means, and Landlord shall not be liable to Tenant for damage to the
Premises or to Tenant's property resulting from such access.  Landlord may at
any time place on or about the Building for sale or for lease signs and Landlord
may at any time during the last one hundred twenty (120) days of the term hereof
place on or about the Premises for lease signs.

     32.2  Keys.  Landlord shall have the right to retain keys and electric
codes or card keys to the locks and card key access systems and other security
systems on the entry doors to the Premises and all interior doors at the
Premises. At Landlord's option, Landlord may require Tenant to obtain all keys
to door locks at the Premises from Landlord's engineering staff or Landlord's
locksmith and to only use Landlord's engineering staff or Landlord's locksmith
to change locks at the Premises. Tenant shall pay Landlord's or its locksmith's
standard charge for all keys and other services obtained from Landlord's
engineering staff or locksmith.

33.  Security Measures.  Tenant hereby acknowledges that Landlord shall have no
obligation whatsoever to provide guard service or other security measures for
the benefit of the Premises or the Project, and Landlord shall have no liability
to Tenant due to its failure to provide such services.  Tenant assumes all
responsibility for the protection of Tenant, its agents, employees, contractors
and invitees and the property of Tenant and of Tenant's agents, employees,
contractors and invitees from acts of third parties.  Nothing herein contained
shall prevent Landlord, at Landlord's sole option, from implementing security
measures for the Project or any part thereof, in which event Tenant shall
participate in such security measures and the cost thereof shall be included
within the definition of Operating Expenses, and Landlord shall have no
liability to Tenant and its agents, employees, contractors and invitees arising
out of Landlord's negligent provision of security measures.  Landlord shall have
the right, but not the obligation, to require all persons entering or leaving
the Project to identify themselves to a security guard and to reasonably
establish that such person should be permitted access to the Project.

34.  Easements.  Landlord reserves to itself the right, from time to time, to
grant such easements, rights and dedications that Landlord deems necessary or
desirable, and to cause the recordation of parcel maps and restrictions, so long
as such easements, rights, dedications, maps and restrictions do not
unreasonably interfere with the use of the Premises by Tenant.  Tenant shall
sign any of the aforementioned documents within ten (10) business days after
Landlord's request and Tenant's failure to do so shall constitute a material
default by Tenant.  The obstruction of Tenant's view, air, or light by any
structure erected in the vicinity of the Project, whether by Landlord or third
parties, shall in no way affect this Lease or impose any liability upon
Landlord.

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<PAGE>

35.  Transportation Management.  Tenant shall fully comply at its sole expense
with all present or future programs implemented or required by any governmental
or quasi-governmental entity or reasonably required by Landlord to manage
parking, transportation, air pollution, or traffic in and around the Project or
the metropolitan area in which the Project is located.

36.  Severability.  The invalidity of any provision of this Lease as determined
by a court of competent jurisdiction shall in no way affect the validity of any
other provision hereof.

37.  Time of Essence.  Time is of the essence with respect to each of the
obligations to be performed by Tenant and Landlord under this Lease.

38.  Definition of Additional Rent.  All monetary obligations of Tenant to
Landlord under the terms of this Lease, including, but not limited to, Base
Rent, Tenant's Share of Operating Expenses, parking charges (if any), late
charges and charges for after hours HVAC shall be deemed to be rent.

39.  Incorporation of Prior Agreements.  This Lease and the attachments listed
in section 1.18 contain all agreements of the parties with respect to the lease
of the Premises and any other matter mentioned herein.  No prior or
contemporaneous agreement or understanding pertaining to any such matter shall
be effective.  Except as otherwise stated in this Lease, Tenant hereby
acknowledges that no real estate broker nor Landlord or any employee or agents
of any of said persons has made any oral or written warranties or
representations to Tenant concerning the condition or use by Tenant of the
Premises or the Project or concerning any other matter addressed by this Lease.

40.  Amendments.  This Lease may be modified in writing only, signed by the
parties in interest at the time of the modification.

41.  Notices.  Subject to the requirements of section 27.6 of this Lease, and
except for notices required in sections 23.3 and 32.1, all notices required or
permitted by this Lease shall be in writing and may be delivered (a) in person
(by hand, by messenger or by courier service), (b) by U.S. Postal Service
regular mail, (c) by U.S. Postal Service certified mail, return receipt
requested, (d) by U.S. Postal Service Express Mail, Federal Express or other
overnight courier, or (e) by facsimile transmission, and shall be deemed
sufficiently given if served in a manner specified in this section 41.  Any
notice permitted or required hereunder, and any notice to pay rent or quit or
similar notice, shall be deemed personally delivered to Tenant on the date the
notice is personally delivered to any employee of Tenant at the Premises.  The
addresses set forth in section 1.19 of this Lease shall be the address of each
party of notice purposes.  Landlord or Tenant may by written notice to the other
specify a different address for notices purposes, except that upon Tenant's
taking possession of the Premises, the Premises shall constitute Tenant's
address for the purpose of mailing or delivering notices to Tenant.  A copy of
all notices required or permitted to be given to Landlord hereunder shall be
concurrently transmitted to such party or parties at such addresses as Landlord
may from time to time hereinafter designate by written notice to Tenant.  Any
notice sent by regular mail or by certified mail, return receipt requested,
shall be deemed given three (3) days after deposited with the U.S. Postal
Service.  Notices delivered by U.S. Express Mail, Federal Express or other
courier shall be deemed given on the date delivered by the carrier to the
appropriate party's address for notice purposes.  If any notice is transmitted
by facsimile transmission, the notice shall be deemed delivered upon telephone
confirmation of receipt of the transmission thereof at the appropriate party's
address for notice purposes.  A copy of all notices delivered to a party by
facsimile transmission shall also be mailed to the party on the date the
facsimile transmission is completed.  If notice is received on Saturday, Sunday
or a legal holiday, it shall be deemed received on the next business day.
Nothing contained herein shall be construed to limit Landlord's right to serve
any notice to pay rent or quit or similar notice by any method permitted by
applicable law, and any such notice shall be effective if served in accordance
with any method permitted by applicable law whether or not the requirements of
this section have been met.

42.  Waivers.  No waiver by Landlord or Tenant of any provision hereof shall be
deemed a waiver of any other provision hereof or of any subsequent breach by
Landlord or Tenant of the same or any other provision.  Landlord's consent to,
or approval of, any act shall not be deemed to render unnecessary the obtaining
of Landlord's consent to or approval of any subsequent act by Tenant.  The
acceptance of rent hereunder by Landlord shall not be a waiver of any preceding
breach by Tenant of any provision hereof, other than the failure of Tenant to
pay the particular rent so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such rent.  No acceptance by
Landlord of partial payment of any sum due from Tenant shall be deemed a waiver
by Landlord of its right

                                       30
<PAGE>

to receive the full amount due, nor shall any endorsement or statement on any
check or accompanying letter from Tenant be deemed an accord and satisfaction.
Tenant hereby waives for Tenant and all those claiming under Tenant all rights
now or hereafter existing to redeem by order or judgment of any court or by
legal process or writ, Tenant's right of occupancy of the Premises after any
termination of this Lease or to otherwise obtain relief from the forfeiture or
termination of this Lease.

43.  Covenants.  This Lease shall be construed as though the covenants contained
herein are independent and not dependent and each party hereby waives the
benefit of any statute to the contrary.  All provisions of this Lease to be
observed or performed are both covenants and conditions.

44.  Binding Effect; Choice of Law.  Subject to any provision hereof restricting
assignment or subletting by Tenant, this Lease shall bind the parties, their
heirs, personal representatives, successors and assigns.  This Lease shall be
governed by the laws of the state in which the Project is located and any
litigation concerning this Lease between the parties hereto shall be initiated
in the county in which the Project is located.

45.  Attorneys' Fees.  If Landlord or Tenant brings an action to enforce the
terms hereof or declare rights hereunder, the prevailing party in any such
action, or appeal thereon, shall be entitled to its reasonable attorneys' fees
and court costs to be paid by the losing party as fixed by the court in the same
or separate suit, and whether or not such action is pursued to decision or
judgment.  The attorneys' fee award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorneys' fees
and court costs reasonably incurred in good faith.  Landlord shall be entitled
to reasonable attorneys' fees and all other costs and expenses incurred in the
preparation and service of notices of default and consultations in connection
therewith, whether or not a legal action is subsequently commenced in connection
with such default.  Landlord and Tenant agree that attorneys' fees incurred with
respect to defaults and bankruptcy are actual pecuniary losses within the
meaning of section 365(b)(1)(B) of the Bankruptcy Code or any successor statute.

46.  Auctions.  Tenant shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises or the Common Areas.
The holding of any auction on the Premises or Common Areas in violation of this
section 46 shall constitute a material default hereunder.

47.  Exemption of Landlord from Liability. To the extent allowed by law, Tenant
hereby agrees that Landlord shall not be liable for injury to Tenant's business
or any loss of income therefrom or for loss of or damage to the merchandise,
tenant improvements, fixtures, furniture, equipment, computers, files,
automobiles, or other property of Tenant, Tenant's employees, agents,
contractors or invitees, or any other person in or about the Project, nor shall
Landlord be liable for injury to the person of Tenant, Tenant's employees,
agents, contractors or invitees, whether such damage or injury is caused by or
results from any cause whatsoever including, but not limited to, theft, criminal
activity at the Project, negligent security measures, bombings or bomb scares,
Hazardous Substances, fire, steam, electricity, gas, water or rain, flooding,
breakage of pipes, sprinklers, plumbing, air conditioning or lighting fixtures,
or from any other cause, whether said damage or injury results from conditions
arising upon the Premises or upon other portions of the Project, or from other
sources or places, or from new construction or the repair, alteration or
improvement of any part of the Project, and regardless of whether the cause of
the damage or injury arises out of Landlord's or its employees, agents or
contractors negligent or intentional acts.  Landlord shall not be liable for any
damages arising from any act or neglect of any employees, agents, contractors or
invitees of any other tenant, occupant or user of the Project, nor from the
failure of Landlord to enforce the provisions of the lease of any other tenant
of the Project.  Tenant, as a material part of the consideration to Landlord
hereunder, hereby assumes all risk of damage to Tenant's property or business or
injury to persons, in, upon or about the Project arising from any cause,
including Landlord's negligence or the negligence of its employees, agents or
contractors, and Tenant hereby waives all claims in respect thereof against
Landlord, its employees, agents and contractors.

48.  Merger.  The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, or a termination by Landlord, shall not result in
the merger of Landlord's and Tenant's estates, and shall, at the option of
Landlord, terminate all or any existing subtenancies or may, at the option of
Landlord, operate as an assignment to Landlord of any or all of such
subtenancies.

49.  Quiet Possession. Subject to the other terms and conditions of this Lease,
and the rights of any lender, and provided Tenant is not in default hereunder,
Tenant shall have quiet possession of the Premises for the entire term hereof
subject to all of the provisions of this Lease.

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<PAGE>

50.  Authority.  If Tenant is a corporation, trust, or general or limited
partnership, Tenant, and each individual executing this Lease on behalf of such
entity, represents and warrants that such individual is duly authorized to
execute and deliver this Lease on behalf of said entity, that said entity is
duly authorized to enter into this Lease, and that this Lease is enforceable
against said entity in accordance with its terms.  If Tenant is a corporation,
trust or partnership, Tenant shall deliver to Landlord upon demand evidence of
such authority satisfactory to Landlord.

51.  Conflict.  Except as otherwise provided herein to the contrary, any
conflict between the printed provisions, exhibits, addenda or riders of this
Lease and the typewritten or handwritten provisions, if any, shall be controlled
by the typewritten or handwritten provisions.

52.  Multiple Parties.  If more than one person or entity is named as Tenant
herein, the obligations of Tenant shall be the joint and several responsibility
of all persons or entities named herein as Tenant.  Service of a notice in
accordance with section 41 on one Tenant shall be deemed service of notice on
all Tenants.

53.  Interpretation.  This Lease shall be interpreted as if it was prepared by
both parties and ambiguities shall not be resolved in favor of Tenant because
all or a portion of this Lease was prepared by Landlord.  The captions contained
in this Lease are for convenience only and shall not be deemed to limit or alter
the meaning of this Lease.  As used in this Lease the words tenant and landlord
include the plural as well as the singular.  Words used in the neuter gender
include the masculine and feminine gender.

54.  Prohibition Against Recording.  Neither this Lease, nor any memorandum,
affidavit or other writing with respect thereto, shall be recorded by Tenant or
by anyone acting through, under or on behalf of Tenant.  Landlord shall have the
right to record a memorandum of this Lease, and Tenant shall execute,
acknowledge and deliver to Landlord for recording any memorandum prepared by
Landlord.

55.  Relationship of Parties.  Nothing contained in this Lease shall be deemed
or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant.

56.  Rules and Regulations. Tenant agrees to abide by and conform to the Rules
and to cause its employees, suppliers, customers and invitees to so abide and
conform.  Landlord shall have the right, from time to time, to modify, amend and
enforce the Rules in a non-discriminatory manner.  Landlord shall not be
responsible to Tenant for the failure of other persons including, but not
limited to, other tenants, their agents, employees and invitees to comply with
the Rules.

57.  Right to Lease.  Landlord reserves the absolute right to effect such other
tenancies in the Project as Landlord in its sole discretion shall determine, and
Tenant is not relying on any representation that any specific tenant or number
of tenants will occupy the Project.

58.  Intentionally Deleted.

59.  Security for Performance of Tenant's Obligations.  Notwithstanding any
security deposit held by Landlord pursuant to section 5, Tenant hereby agrees
that in the event of a default by Tenant, Landlord shall be entitled to seek and
obtain a writ of attachment and/or a temporary protective order and Tenant
hereby waives any rights or defenses to contest such a writ of attachment and/or
temporary protective order on the basis of any relevant law.

60.  Attachments.  The items listed in section 1.18 are a part of this Lease and
are incorporated herein by this reference.

61.  Confidentiality.  Tenant acknowledges and agrees that the terms of this
Lease are confidential and constitute propriety information of Landlord.
Disclosure of the terms hereof could adversely affect the ability of Landlord to
negotiate other leases with respect to the Project and may impair Landlord's
relationship with other tenants of the Project.  Tenant agrees that it and its
partners, officers, directors, employees, brokers, and attorneys, if any, shall
not disclose the terms and conditions of this Lease to any other person or
entity without the prior written consent of Landlord which may be given or
withheld by Landlord, in Landlord's sole discretion.  It is understood and
agreed that

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<PAGE>

damages alone would be an inadequate remedy for the breach of this provision by
Tenant, and Landlord shall also have the right to seek specific performance of
this provision and to seek injunctive relief to prevent its breach or continued
breach.

62.  Costs Related to Tenant Requests.  Tenant shall reimburse Landlord promptly
upon request for the costs and expenses incurred by Landlord as a result of any
Tenant request, for example, legal fees and expenses incurred to review an
assignment or subletting request or architectural and engineering fees incurred
to review a proposed alteration by Tenant.

63.  WAIVER OF JURY TRIAL.  LANDLORD AND TENANT HEREBY WAIVE THEIR RESPECTIVE
RIGHT TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, COUNTERCLAIM OR CROSS-
COMPLAINT IN ANY ACTION, PROCEEDING AND/OR HEARING BROUGHT BY EITHER LANDLORD
AGAINST TENANT OR TENANT AGAINST LANDLORD ON ANY MATTER WHATSOEVER ARISING OUT
OF, OR IN ANY WAY CONNECTED WITH, THIS LEASE, THE RELATIONSHIP OF LANDLORD AND
TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF INJURY OR
DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY LAW, STATUTE, OR REGULATION,
EMERGENCY OR OTHERWISE, NOW OR HEREAFTER IN EFFECT.

LANDLORD AND TENANT ACKNOWLEDGE THAT THEY HAVE CAREFULLY READ AND REVIEWED THIS
LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS
LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO.  THE PARTIES HEREBY
AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND
TENANT WITH RESPECT TO THE PREMISES.  TENANT ACKNOWLEDGES THAT IT HAS BEEN GIVEN
THE OPPORTUNITY TO HAVE THIS LEASE REVIEWED BY ITS LEGAL COUNSEL PRIOR TO ITS
EXECUTION.  PREPARATION OF THIS LEASE BY LANDLORD OR LANDLORD'S AGENT AND
SUBMISSION OF SAME TO TENANT SHALL NOT BE DEEMED AN OFFER BY LANDLORD TO LEASE
THE PREMISES TO TENANT OR THE GRANT OF AN OPTION TO TENANT TO LEASE THE
PREMISES.  THIS LEASE SHALL BECOME BINDING UPON LANDLORD ONLY WHEN FULLY
EXECUTED BY BOTH PARTIES AND WHEN LANDLORD HAS DELIVERED A FULLY EXECUTED
ORIGINAL OF THIS LEASE TO TENANT.

     LANDLORD                                TENANT

     THE REALTY ASSOCIATES FUND IV, L.P.     NOOSH, INC.

     By:  REALTY ASSOCIATES FUND IV LLC

          Its:  General Partner

     By:  TA REALTY CORP.                    By:________________________
          Its:  Manager                      Name:______________________

     By:_______________________              Its:______________, duly authorized

                                       33
<PAGE>

                                   EXHIBIT A

                                  FLOOR PLAN
                                  ----------

                                      A-1
<PAGE>

                                   EXHIBIT B

                              VERIFICATION LETTER
                              -------------------

Noosh, Inc. ("Tenant") hereby certifies that it has entered into a lease with
The Realty Associates Fund IV, L.P., ("Landlord") and verifies the following
information as of the _______ day of ____________________________, 1999:

<TABLE>
<S>                                            <C>
                    Address of Building:       The Hillsite Building, 75 Second Avenue, Needham, Massachusetts 02192

Number of Rentable Square Feet in Premises:    4,230

                      Commencement Date:       November 1, 1999

                 Lease Termination Date:       October 31, 2002

              Tenant's Percentage Share:       4.0%

                      Initial Base Rent:       $122,670.00/ year and /$10,222.50/month

             Billing Address for Tenant:       Noosh, Inc.
                                               3401 Hillview Avenue, Building B
                                               Palo Alto, California 94304

                              Attention:       Ann Marie Cady

                       Telephone Number:       (650) 858-8300

                   Federal Tax I.D. No.:       77-0495080
</TABLE>

     Tenant acknowledges and agrees that all tenant improvements Landlord is
obligated to make to the Premises, if any, have been completed to Tenant's
satisfaction, that Tenant has accepted possession of the Premises, and that as
of the date hereof, there exist no offsets or defenses to the obligations of
Tenant under the Lease.

                                                  TENANT

                                                NOOSH, INC.

                                    By:____________________________

                                    Name:__________________________
                                               (print name)

                                    Its:____________________, duly authorized

                                      B-1
<PAGE>

                                   EXHIBIT C

                             RULES AND REGULATIONS

                                 GENERAL RULES
                                 -------------

     Tenant shall faithfully observe and comply with the following Rules and
Regulations.

1.   Tenant shall not alter any locks or install any new or additional locks or
bolts on any doors or windows of the Premises without obtaining Landlord's prior
written consent.  Tenant shall bear the cost of any lock changes or repairs
required by Tenant.  Keys required by Tenant must be obtained from Landlord at a
reasonable cost to be established by Landlord.

2.   All doors opening to public corridors shall be kept closed at all times
except for normal ingress and egress to the Premises.  Tenant shall assume any
and all responsibility for protecting the Premises from theft, robbery and
pilferage, which includes keeping doors locked and other means of entry to the
Premises closed.

3.   Landlord reserves the right to close and keep locked all entrance and exit
doors of the Project except during the Project's normal hours of business as
defined in section 11.4 of the Lease.  Tenant, its employees and agents must be
sure that the doors to the Project are securely closed and locked when leaving
the Premises if it is after the normal hours of business of the Project.
Tenant, its employees, agents or any other persons entering or leaving the
Project at any time when it is so locked, or any time when it is considered to
be after normal business hours for the Project, may be required to sign the
Project register.  Access to the Project may be refused unless the person
seeking access has proper identification or has a previously received
authorization for access to the Project.  Landlord and its agents shall in no
case be liable for damages for any error with regard to the admission to or
exclusion from the Project of any person.  In case of invasion, mob, riot,
public excitement, or other commotion, Landlord reserves the right to prevent
access to the Project during the continuance thereof by any means it deems
appropriate for the safety and protection of life and property.

4.   Landlord reserves the right, in Landlord's sole and absolute discretion, to
close or limit access to the Project and/or the Premises, from time to time, due
to the failure of utilities, due to damage to the Project and/or the Premises,
to ensure the safety of persons or property or due to government order or
directive, and Tenant agrees to immediately comply with any such decision by
Landlord.  If Landlord closes or limits access to the Project and/or the
Premises for the reasons described above, Landlord's actions shall not
constitute a breach of the Lease.

5.   No furniture, freight or equipment of any kind shall be brought into the
Project without Landlord's prior authorization.  Tenant shall only move in and
out of the Premises at times designated by Landlord, in Landlord's reasonable
discretion (e.g., Landlord could require that all moves in and out of the
Premises only occur on weekends or on weekdays between 5:00 p.m. and 11:00
p.m.).  All moves in and out of the Premises shall be scheduled with Landlord in
advance, on a first come, first served basis.  All property shall be moved in
and out of the Premises using the freight elevator.  Landlord shall have the
right, in its sole discretion, to permit only one tenant to move in or out of
the Building at a time.  When moving equipment, furniture and other items into
and out of the Premises, Tenant shall take whatever precautions Landlord
designates to protect the Project from damage (e.g., placing plastic or other
protective material on carpets in the common areas and the Premises).  Landlord
shall have the right to prescribe the weight, size and position of all safes and
other heavy property brought into the Project and also the times and manner of
moving the same in and out of the Project.  Safes and other heavy objects shall,
if considered necessary by Landlord, stand on supports of such thickness as is
necessary to properly distribute the weight, and Tenant shall be solely
responsible for the cost of installing all supports.  Landlord will not be
responsible for loss of or damage to any such safe or property in any case.  Any
damage to any part of the Project, its contents, occupants or visitors by moving
or maintaining any such safe or other property shall be the sole responsibility
and expense of Tenant.

6.   The requirements of Tenant will be attended to only upon application at the
management office for the Project or at such office location designated by
Landlord.  Tenant shall not ask employees of Landlord to do anything outside
their regular duties without special authorization from Landlord.

7.   Tenant shall not disturb, solicit, or canvass any occupant of the Project
and shall cooperate with Landlord and its agents to prevent the same.  Tenant,
its employees and agents shall not loiter in or on the entrances, corridors,
sidewalks, lobbies, halls, stairways, elevators, or any Common Areas for the
purpose of smoking tobacco products or for any other purpose, nor in any way
obstruct such areas, and shall use them only as a means of ingress and egress
for the Premises.  Smoking shall not be permitted in the Common Areas.

                                      C-2
<PAGE>

8.   The toilet rooms, urinals and wash bowls shall not be used for any purpose
other than that for which they were constructed, and no foreign substance of any
kind whatsoever shall be thrown therein.  The expense of any breakage, stoppage
or damage resulting from the violation of this rule shall be borne by the tenant
who, or whose employees or agents, shall have caused it.

9.   Except for vending machines intended for the sole use of Tenant's employees
and invitees, no vending machine or machines other than fractional horsepower
office machines shall be installed, maintained or operated upon the Premises
without the written consent of Landlord.  All vendors or other persons visiting
the Premises shall be subject to the reasonable control of Landlord.  Tenant
shall not permit its vendors or other persons visiting the Premises to solicit
other tenants of the Project.

10.  Tenant shall not use or keep in or on the Premises or the Project any
kerosene, gasoline or other inflammable or combustible fluid or material.
Tenant shall not bring into or keep within the Premises or the Project any
animals, birds, bicycles or other vehicles.

11.  Tenant shall not use, keep or permit to be used or kept, any foul or
noxious gas or substance in or on the Premises, or permit or allow the Premises
to be occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Project by reason of noise, odors, or vibrations, or to
otherwise interfere in any way with the use of the Project by other tenants.

12.  No cooking shall be done or permitted on the Premises, nor shall the
Premises be used for the storage of merchandise, for loading or for any
improper, objectionable or immoral purposes.  Notwithstanding the foregoing,
Underwriters' Laboratory approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages for employees and visitors of Tenant, provided that such use is in
accordance with all applicable federal, state and city laws, codes, ordinances,
rules and regulations; and provided further that such cooking does not result in
odors escaping from the Premises.

13.  Landlord shall have the right to approve where and how telephone wires are
to be introduced to the Premises.  No boring or cutting for wires shall be
allowed without the consent of Landlord.  The location of telephone call boxes
and other office equipment affixed to the Premises shall be subject to the
approval of Landlord.  Tenant shall not mark, drive nails or screws, or drill
into the partitions, woodwork or plaster contained in the Premises or in any way
deface the Premises or any part thereof without Landlord's prior written
consent.  Tenant shall not install any radio or television antenna, satellite
dish, loudspeaker or other device on the roof or exterior walls of the Project.
Tenant shall not interfere with broadcasting or reception from or in the Project
or elsewhere.

14.  Landlord reserves the right to exclude or expel from the Project any person
who, in the judgment of Landlord, is intoxicated or under the influence of
liquor or drugs, or who shall in any manner do any act in violation of any of
these Rules and Regulations.

15.  Tenant shall not waste electricity, water or air conditioning and agrees to
cooperate fully with Landlord to ensure the most effective operation of the
Project's heating and air conditioning system, and shall refrain from attempting
to adjust any controls.  Tenant shall not without the prior written consent of
Landlord use any method of heating or air conditioning other than that supplied
by Landlord.  Tenant shall not use electric fans or space heaters in the
Premises.

16.  Tenant shall store all its trash and garbage within the interior of the
Premises.  No material shall be placed in the trash boxes or receptacles if such
material is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash in the vicinity of the
Project without violation of any law or ordinance governing such disposal.  All
trash, garbage and refuse disposal shall be made only through entry-ways and
elevators provided for such purposes at such times as Landlord shall designate.

17.  Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.

18.  No awnings or other projection shall be attached to the outside walls or
windows of the Project by Tenant.  No curtains, blinds, shades or screens shall
be attached to or hung in any window or door of the Premises without the prior
written consent of Landlord.  Landlord shall have the right to require Tenant to
use Landlord's standard curtains or window coverings.  Tenant shall not place
any signs in the windows of the Premises or the Project.  All electrical ceiling
fixtures hung in the Premises must be fluorescent and/or of a quality, type,
design and bulb color approved by Landlord.  Tenant shall abide by Landlord's
regulations concerning the opening and closing of window coverings which are
attached to the windows in the Premises.  The skylights, windows, and doors that
reflect or admit light and air into the

                                      C-3
<PAGE>

halls, passageways or other public places in the Project shall not be covered or
obstructed by Tenant, nor shall any bottles, parcels or other articles be placed
on the windowsills.

19.  Tenant shall not employ any person or persons other than the janitor of
Landlord for the purpose of cleaning the Premises unless otherwise agreed to in
writing by Landlord.  Except with the prior written consent of Landlord, no
person or persons other than those approved by Landlord shall be permitted to
enter the Project for the purpose of cleaning same.  Landlord shall in no way be
responsible to Tenant for any loss of property on the Premises, however
occurring, or for any damage done to the effects of Tenant or any of its
employees or other persons by the janitor of Landlord.  Landlord shall not be
obligated to notify Tenant of the times at which the janitorial staff will enter
the Premises, and Tenant hereby authorizes the janitorial staff to enter the
Premises at any time, without notice.  Janitor service shall include ordinary
dusting and cleaning by the janitor assigned to such work and shall not include
cleaning of carpets or rugs, except normal vacuuming, or moving of furniture and
other special services.  Window cleaning shall be done only by Landlord at
reasonable intervals and as Landlord deems necessary.

20.  Tenant acknowledges that the local fire department has previously required
Landlord to participate in a fire and emergency preparedness program or may
require Landlord and/or Tenant to participate in such a program in the future.
Tenant agrees to take all actions necessary to comply with the requirements of
such a program including, but not limited to, designating certain employees as
"fire wardens" and requiring them to attend any necessary classes and meetings
and to perform any required functions.

21.  Tenant and its employees shall comply with all federal, state and local
recycling and/or resource conversation laws and shall take all actions requested
by Landlord in order to comply with such laws.  Tenant and its employees shall
participate in any recycling or resource conservation program implemented by
Landlord, at Tenant's sole expense.

                                 PARKING RULES
                                 -------------

1.   Parking areas shall be used only for parking by vehicles no longer than
full size, passenger automobiles.  Tenant and its employees shall park
automobiles within the lines of the parking spaces.

2.   Tenant shall not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant's employees, suppliers, shippers, customers, or
invitees to be loaded, unloaded, or parked in areas other than those designated
by Landlord for such activities.  Users of the parking area will obey all posted
signs and park only in the areas designated for vehicle parking.

3.   Parking stickers, parking cards and other identification devices shall be
the property of Landlord and shall be returned to Landlord by the holder thereof
upon termination of the holder's parking privileges.  Landlord may require
Tenant and each of its employees to give Landlord a deposit when a parking card
or other parking device is issued.  Landlord shall not be obligated to return
the deposit unless and until the parking card or other device is returned to
Landlord.  Tenant will pay such replacement charges as is reasonably established
by Landlord for the loss of such devices.  Loss or theft of parking
identification stickers or devices from automobiles must be reported to the
parking operator immediately.  Any parking identification stickers or devices
reported lost or stolen found on any unauthorized car will be confiscated and
the illegal holder will be subject to prosecution.

4.   Landlord reserves the right to relocate all or a part of parking spaces
within the parking area and/or to reasonably adjacent off site locations(s), and
to allocate them between compact and standard size and tandem spaces, as long as
the same complies with applicable laws, ordinances and regulations.

5.   Unless otherwise instructed, every person using the parking area is
required to park and lock his own vehicle.  Landlord will not be responsible for
any damage to vehicles, injury to persons or loss of property, all of which
risks are assumed by the party using the parking area.

6.   Validation of visitor parking, if established, will be permissible only by
such method or methods as Landlord may establish at rates determined by
Landlord, in Landlord's sole discretion.  Only persons visiting Tenant at the
Premises shall be permitted by Tenant to use the Project's visitor parking
facilities.

7.   The maintenance, washing, waxing or cleaning of vehicles in the parking
structure or Common Areas is prohibited.

8.   Tenant shall be responsible for seeing that all of its employees, agents
and invitees comply with the applicable parking rules, regulations, laws and
agreements.  Parking area managers or attendants, if any, are not authorized to
make

                                      C-4
<PAGE>

or allow any exceptions to these Parking Rules and Regulations. Landlord
reserves the right to terminate parking rights for any person or entity that
willfully refuses to comply with these rules and regulations.

9.   Every driver is required to park his own car.  Tenant agrees that all
responsibility for damage to cars or the theft of or from cars is assumed by the
driver, and further agrees that Tenant will hold Landlord harmless for any such
damages or theft.

10.  No vehicles shall be parked in the parking garage overnight.  The parking
garage shall only be used for daily parking and no vehicle or other property
shall be stored in a parking space.

11.  Any vehicle parked by Tenant, its employees, contractors or visitors in a
reserved parking space or in any area of the parking area that is not designated
for the parking of such a vehicle may, at Landlord's option, and without notice
or demand, be towed away by any towing company selected by Landlord, and the
cost of such towing shall be paid for by Tenant and/or the driver of said
vehicle.

12.  At Landlord's request, Tenant shall provide Landlord with a list which
includes the name of each person using the parking facilities based on Tenant's
parking rights under this Lease and the license plate number of the vehicle
being used by that person.  Tenant shall provide Landlord with an updated list
within five (5) days after any part of the list becomes inaccurate.

     Landlord reserves the right at any time to change or rescind any one
or more of these Rules and Regulations, or to make such other and further
reasonable Rules and Regulations as in Landlord's judgment may from time to time
be necessary for the management, safety, care and cleanliness of the Project,
and for the preservation of good order therein, as well as for the convenience
of other occupants and tenants therein.  Landlord may waive any one or more of
these Rules and Regulations for the benefit of any particular tenant, but no
such waiver by Landlord shall be construed as a waiver of such Rules and
Regulations in favor of any other tenant, nor prevent Landlord from thereafter
enforcing any such Rules or Regulations against any or all tenants of the
Project.  Tenant shall be deemed to have read these Rules and Regulations and to
have agreed to abide by them as a condition of its occupancy of the Premises.

                                      C-5
<PAGE>

                                   EXHIBIT D
                               LETTER OF CREDIT

THE REALTY ASSOCIATES FUND IV, L.P.
c/o TA Associates Realty
28 State Street, 10/th/ Floor
Boston, Massachusetts 02110

Ladies and Gentlemen:

     By order of our client, Noosh, Inc., we have established our irrevocable
standby Letter of Credit #_________ in your favor for a sum or sums not to
exceed $62,000.00 in United States currency, effective immediately for a term of
one (1) year.

     We shall make payment hereunder against presentation of your sight draft
drawn on us bearing the clause "drawn under __________ Bank, Letter of Credit
#_________", signed by an authorized officer or agent and accompanied by a
statement signed by an authorized officer or agent reading as follows:

     "The amount of this draft constitutes funds due us from Noosh, Inc. in
     connection with a default under a certain Lease dated September ___, 1999,
     between THE REALTY ASSOCIATES FUND IV, L.P. and NOOSH, INC., relating to
     premises situated at 75 SECOND AVENUE, NEEDHAM, MASSACHUSETTS 02192."

     It is a condition of this Letter of Credit that it shall be deemed
automatically extended without amendment for an additional period of one (1)
year from the present or any future expiration date hereof unless at least
thirty (30) days prior to any such  date we shall notify you in writing by
certified mail that we  elect not to consider this Letter of Credit renewed for
any such additional period.  Upon receipt by you of such notice of non- renewal,
you may draw hereunder your sight draft(s) on ourselves signed by an authorized
officer or agent and accompanied by a statement signed by an authorized officer
or agent reading as follows:

     "We have received notice of non-renewal of Letter of Credit  #_____________
     from _____________ Bank and the applicant has  failed to provide us with a
     substitute Letter of Credit not less  than thirty (30) days prior to the
     purported expiration date of  the Letter of Credit."

     We hereby agree with you that drafts drawn under and in compliance with the
terms of this Letter of Credit will by duly honored upon presentation and
delivery thereof to the Bank's ____ Department.  This Letter of Credit sets
forth in full our undertaking, and such undertaking shall not in any way be
modified, amended, amplified or limited by reference to any document, instrument
or agreement referred to herein and any such reference shall not be deemed to
incorporate herein by reference any document, instrument or agreement.

     This Letter of Credit is subject to the Uniform Customs and Practices for
Documentary Credits, 1993 revision, ICC Publication No. 500.  Partial drawings
shall be permitted under this Letter of Credit.

     This Letter of Credit is transferable in whole or in part by the
beneficiary to any successor or assign of the beneficiary.  This Letter of
Credit may be transferred more than once.

                                    Very truly yours,

                                    ________________<PAGE>

Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

                                                                  Exhibit 10.7

                            COLLABORATION AGREEMENT

          This Collaboration Agreement (the "Agreement") is made and entered
into as of January 1, 2000 (the "Effective Date") by and among Exelixis
Pharmaceuticals, Inc., a Delaware corporation having its principal place of
business in South San Francisco, California ("Exelixis"), Bayer Corporation, an
Indiana corporation having its principal place of business in Pittsburgh,
Pennsylvania ("Bayer"), and GenOptera LLC, a Delaware limited liability company
having its principal place of business in South San Francisco, California (the
"LLC").  Each of Exelixis, Bayer and the LLC may be referred to herein
individually as a "Party" or collectively as the "Parties."

                                   Background

          A.  Exelixis has technology, materials, and expertise relating to the
identification of proteins and nucleic acids involved in intracellular pathways
or networks in insects and nematodes and to the development of high-throughput
assays that can identify compounds having potential utility in inhibiting or
enhancing the activity of such pathway proteins or nucleic acids.

          B.  Bayer has an extensive library of small molecules, and has
substantial experience in the research (including target research), development
(including assay development), and commercialization of pesticides for use in
the markets for crop and plant protection and non-human animal health (including
companion animal care).

          C.  Exelixis and Bayer A.G., an Affiliate of Bayer, have been working
together in the field of pesticide research under an existing Collaboration
Agreement (the "Original Agreement") entered into as of May 1, 1998 (the
"Original Agreement Date") and terminated as of the Effective Date by a separate
agreement between Exelixis and Bayer A.G.  Exelixis and Bayer have now decided
to organize the LLC to continue and expand the research performed under the
Original Agreement, and to make the collaboration between Exelixis and Bayer
exclusive within the field of insecticides and nematicides, as and to the extent
further defined herein.

          Now, Therefore, in consideration of the foregoing and the covenants
and promises contained in this Agreement, the Parties agree as follows:

1.   Definitions

     As used herein, the following capitalized terms shall have the following
meanings (with terms defined in the singular having the same meanings when used
in the plural):

     1.1     "A List Reserved Target" has the meaning set forth in Section 6.1.

[*]=CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       1
<PAGE>

  1.2     "Affiliate" means a Person who controls, is controlled by or is under
common control with (a) the referenced Party or (b) another Person.  For
purposes of this definition, (1) the word "control" (including, with correlative
meaning, the terms "controlled by" or "is under common control with") means the
power to direct or cause the direction of the management and policies of the
relevant Person, or the ownership of at least fifty percent (50%) of the voting
stock or voting power of such Person if it is a legal entity, and (2) Bayer and
Bayer AG are Affiliates of each other, the LLC shall not be considered an
Affiliate of either Bayer or Exelixis, and neither Bayer nor Exelixis shall be
considered an Affiliate of the LLC.

  1.3     "Annual FTE Rate" means the amount to be paid over a 12-month period
by the LLC to Exelixis to support one FTE for such period.  The Annual FTE Rate
will be [ * ] for the first Contract Year.  For each subsequent Contract Year,
this rate will be [ * ].

  1.4     "Approval Application" means the appropriate application(s), together
with all documents, data and information concerning a Product required to be
included with such application, that is necessary to obtain Regulatory Approval
to manufacture, use, import, distribute, market and/or sell a Product for use in
the Field of Use in a particular country.

  1.5     "B List Reserved Target" has the meaning set forth in Section 6.1.

  1.6     "Bayer Assay" means, with respect to a particular Target, an in vitro
or in vivo assay (other than an LLC Assay) developed by or on behalf of Bayer as
provided in Sections 2.11(b), 3.2, 4.3(b), 5.3 and 6.2(b) that can measure
whether a particular molecule or compound inhibits or antagonizes (or, if
appropriate, agonizes or enhances) the function of the Target.

  1.7     "Bayer Compounds" are compounds, excluding the Bayer Pesticides and
any and all compounds that Bayer and/or an Affiliate of Bayer was marketing or
developing on the Original Agreement Date, to which Bayer has access and which
it has the right to test and that Bayer A.G. tested under the Original Agreement
or that Bayer tests under this Agreement.

  1.8     "Bayer Know-How" means Information Controlled by Bayer or any
Affiliate of Bayer that is necessary or useful for conducting the LLC's
obligations under the Research Plan, or for the discovery, preparation or use of
Targets or LLC Assays, or for the development or use of the Sequence Library or
Sequence Database and that is disclosed to the LLC and/or Exelixis under this
Agreement and/or the Original Agreement.  Bayer Know-How excludes the Bayer
Patents.

  1.9     "Bayer Patents" means all Patents Controlled by Bayer or any Affiliate
of Bayer, covering inventions made prior to the end of the Research Term,
including those made prior to the Effective Date, that claim or cover a Bayer
Pesticide or its use, the discovery, manufacture or use of a Target or LLC
Assay, the development or use of the Sequence Library or Sequence Database, or
the discovery, manufacture or use of a Collaboration Compound or Product; and
include Joint Patents in which Bayer has an ownership interest.

  1.10    "Bayer Pesticide" means any compound Controlled by Bayer that has been
shown to have potential utility in pest control as an insecticide, arachnicide
and/or nematicide, but the target for such activity was not known as of the
Original Agreement Date.

[*]=CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       2
<PAGE>

  1.11    "Bayer Product" means a product that contains a Collaboration
Compound.

  1.12    "Candidate Target" means (a) a Target identified, mapped, cloned, and
validated in the course of the Target Identification Program or (b) a Sequence-
Based Target that is identical with a Target described in subsection (a) of this
Section 1.12.

  1.13    "Chemical Development Program" means a chemical research program
conducted to find a compound with commercial value when formulated into a
product.  For clarity, a Chemical Development Program includes, without
limitation, the synthesis of derivatives, modifications and analogues whether
made through medicinal chemistry, the study of structure-activity relationships,
combinatorial chemistry or a structure-based design program.

  1.14    "Chief Executive Officer" means the Chief Executive Officer of the
LLC.

  1.15    "Cognate Target" means any Candidate Target, (i) the function of which
a particular Bayer Pesticide agonizes, antagonizes, enhances or counteracts to
achieve the insecticide or nematicide (as applicable) effect, which function was
not known to Bayer, Exelixis or an Affiliate of either of them as of the
Original Agreement Date and was determined as a result of the investigation of
the mechanism of action of a Bayer Pesticide through work conducted by the LLC
or Exelixis, or (ii) [ * ].

  1.16    "Collaboration Compound" means

          (a) a compound (other than an Excluded Compound), having a molecular
weight below [ * ], that:

              (i)   agonizes, antagonizes, enhances or inhibits the function of
a Target, wherein such activity was discovered by or on behalf of Bayer or its
Affiliate or licensee by screening the compound in a Selected Assay for the
Target or in a Bayer Assay for the Target, within [ * ] after the first use of
such Selected Assay or Bayer Assay by Bayer or its Affiliate or licensee; or

              (ii)  agonizes, antagonizes, enhances or inhibits the function of
a Target, wherein such activity was discovered by a material use by or on behalf
of Bayer or its Affiliate or licensee of the Exelixis Know-How, Exelixis
Patents, LLC Know-How or LLC Patents (other than Selected Assays or Bayer
Assays), within [ * ] after the Effective Date or if later by [ * ]; or

              (iii) is a compound synthesized in connection with a Chemical
Development Program based on or arising from a compound (including, without
limitation, derivatives of an Excluded Compound) that meets the criteria in
Section 1.16(a)(i) or 1.16(a)(ii) and that is shown to agonize, antagonize,
enhance or inhibit the function of a Target; or

              (iv)  is identified by Bayer or its Affiliate or licensee (other
than the LLC) as provided in Section 2.4(c) within [ * ] after the first use by
Bayer or its Affiliate or licensee of an assay or Target described in Section
2.4(c); or

[*]=CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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          (b) is a [ * ] useful in the Field of Use and that is discovered by or
on behalf of Bayer or its Affiliate or licensee under this Agreement and/or was
discovered by or on behalf of Bayer AG or its licensee under the Original
Agreement.

The definition of "Collaboration Compound" does not include any compound
identified and developed without any use of a Selected Assay, Target or
Confidential Information of the LLC or Exelixis.  References in this Section
1.16 to a "licensee" of Bayer shall include sublicensees but shall exclude the
LLC in those cases where the compound satisfies the definition of an LLC
Compound.

  1.17    "Confidential Information" means with respect to a Party, Information
that is owned or Controlled by such Party, its Affiliates or sublicensees,
including information of Third Parties known to such Party by reason of any
collaboration with such Third Party or under any confidentiality agreement with
such Third Party, that is disclosed by such Party to the one or both of the
other Parties hereto pursuant to this Agreement, and that is identified by the
disclosing Party in writing, or is acknowledged by the receiving Party in
writing, to be confidential to the disclosing Party or to a Third Party at the
time of disclosure to the receiving Party if disclosed in tangible form, or is
confirmed by the disclosing Party to the receiving Party as confidential within
thirty (30) days after disclosure if initially disclosed orally by the
disclosing Party.  Confidential Information will not include any information
which:

     (a) Already Known Without Breach.  Was already known to the receiving
Party, without breach of any obligation of confidentiality by any Party, at the
time of disclosure by the disclosing Party;

     (b) Generally Available Or In Public Domain Without Breach.  Was generally
available to the public or otherwise part of the public domain at the time of
its disclosure to the receiving Party by the disclosing Party, or became
generally available to the public or otherwise part of the public domain after
its disclosure to the receiving Party by the disclosing Party, in each case
without breach of any obligation of confidentiality by the receiving Party or
subsequently becomes part of the public domain without breach of any obligation
of confidentiality by the receiving Party;

     (c) Freely Disclosed By Certain Third Parties.  Was disclosed to the
receiving Party, other than under an obligation of confidentiality, by a Third
Party who had no obligation to the disclosing Party not to disclose such
information to others;

     (d) Freely Disclosed By Disclosing Party To Others.  Is disclosed by the
disclosing Party to others without an obligation of confidentiality;

     (e) Required To Be Disclosed.  Is required to be disclosed pursuant to law,
subject, except for disclosure of financial information to the extent required
by securities laws to be disclosed, to the protective provisions set forth in
Section 18.6 of the Operating Agreement; or

     (f) Independently Developed.  The receiving Party can document was
subsequently and independently developed by employees or others on behalf of the
receiving

[*]=CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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Party without use of any Confidential Information disclosed to the receiving
Party or such others by the disclosing Party.

  1.18    "Contract Year" means a 12-month period of time commencing on the
Effective Date or any anniversary of the Effective Date, and designated by a
number one larger than the number of full 12-month periods since the Effective
Date at the commencement of such period of time.

  1.19    "Control" means, with respect to any compound, material, Information
or intellectual property right (including without limitation those relating to
an LLC Assay, Bayer Assay, Exelixis Assay, Bayer Pesticide, Bayer Compound,
Collaboration Compound, Exelixis Agrochemical Compound, Product or Target),
possession by a Party of the ability to grant access, a license, or a sublicense
to such compound, material, Information or intellectual property right as
provided for herein, without violating the terms of any agreement or other
arrangements with any Third Party existing at the time such Party would be first
required hereunder to grant the other Party such access.

  1.20    "Core Improvements" means any and all improvements to Exelixis Core
Technology made by FTEs, any entity other than Bayer or any individual other
than a Bayer employee under this Agreement after the Effective Date.  The JSC
will propose and the LLC will decide whether inventions made by FTEs, any entity
other than Bayer or any individual other than a Bayer employee are Core
Improvements or not.  In case of disagreement within the JSC, an external expert
appointed by the LLC shall make such proposal.

  1.21    "Dedicated FTE" means any FTE who, at the time in question, performs
work solely for the LLC.

  1.22    "Development" means conducting in vitro and/or in vivo investigations
and trials on a Collaboration Compound for use in the Field of Use, starting
with Bayer's decision to enter the F\\2\\-Phase as to such Collaboration
Compound.

  1.23    "Dollars" or "$" means United States dollars.

  1.24    "Excluded Compound" means any compound owned or Controlled by Bayer
that, prior to any use or screening of such compound in a Selected Assay or
Bayer Assay or in any material use under this Agreement or the Original
Agreement of Exelixis Know-How, Exelixis Patents, LLC Know-How or LLC Patents,
is known to Bayer, and has been shown by or on behalf of Bayer or its Affiliate
to have [ * ] activity, in testing such as microscreening or in actual data from
greenhouse or field experiments typically used by Bayer to determine whether a
compound has [ * ] activity.

  1.25    "Exelixis Agrochemical Compound" means a compound (including early
stage compounds such as hits and leads) having a molecular weight below [ * ]
that has activity in the Field of Use and that:

     (a) agonizes, antagonizes, enhances or inhibits the function of a Selected
Target identified in the Target Identification Project or present in the
Sequence Database,

[*]=CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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wherein such activity was discovered by or on behalf of Exelixis or its
Affiliate or collaborator by screening the compound in an LLC Assay for the
Target (if permitted by the LLC under Section 4.6(a)) within [ * ] after the
first use of such LLC Assay by Exelixis or its Affiliate or collaborator; or

     (b) agonizes, antagonizes, enhances or inhibits the function of an
Unselected Non-Cognate Target, wherein such activity was discovered by or on
behalf of Exelixis or its Affiliate or collaborator by screening the compound in
an Exelixis Assay for such Target (if permitted by the LLC under Section 4.3(a))
within [ * ] after the first use of such Exelixis Assay by Exelixis or its
Affiliate or collaborator; or

     (c) is a compound synthesized in connection with a Chemical Development
Program based on or arising from a compound that meets the criteria in Section
1.25(a) or (b) and that is shown to agonize, antagonize, enhance or inhibit the
function of a Selected Target identified in the Target Identification Project or
present in the Sequence Database or an Unselected Non-Cognate Target,
respectively.

The definition of "Exelixis Agrochemical Compound" does not include any compound
identified and developed without any use of an LLC Assay, Exelixis Assay,
Selected Target or Unselected Non-Cognate Target.

  1.26    "Exelixis Agrochemical Product" means a product that is commercialized
by Exelixis or by a licensee of Exelixis (other than Bayer) in the Field of Use
and that contains an Exelixis Agrochemical Compound.

  1.27    "Exelixis Assay" means, with respect to a particular Target, an in
vitro or in vivo assay developed by or on behalf of Exelixis that can measure
whether a particular molecule or compound inhibits or antagonizes (or, if
appropriate, agonizes or enhances) the function of the Target.

  1.28    "Exelixis Core Technology" means the [ * ] used by Exelixis (whether
owned by Exelixis or used by it under license from Third Parties) generally in
its business.  The JSC will consider in good faith and propose modifications of
this definition after the Effective Date and the LLC will decide whether to make
such modifications.  In case of disagreement within the JSC, an external expert
appointed by the LLC shall make such proposal.

  1.29    "Exelixis Human Health Compound" means a compound having a molecular
weight below [ * ] that has activity outside the Field of Use and that agonizes,
antagonizes, enhances or inhibits the function of a Candidate Target or a
Sequence-Based Target, wherein such activity was discovered by or on behalf of
Exelixis or its Affiliate or collaborator by screening the compound in an LLC
Assay or an Exelixis Assay for the Candidate Target or the Sequence-Based
Target, within [ * ] after first use of such assay by Exelixis or its Affiliate
or collaborator.

  1.30    "Exelixis Human Health Product" means any product commercialized by
Exelixis or a licensee of Exelixis (other than Bayer) outside the Field of Use
that contains an Exelixis Human Health Compound.

[*]=CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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  1.31    "Exelixis Know-How" means Information Controlled by Exelixis or any
Affiliate of Exelixis that (a) is necessary or useful for performing an LLC
Assay or Bayer Assay or otherwise for discovering a Collaboration Compound and
is disclosed to the LLC and/or Bayer under this Agreement and/or the Original
Agreement, or (b) is derived from the FlyTag database.  Exelixis Know-How
excludes the Exelixis Patents.

  1.32    "Exelixis Patents" means all Patents Controlled by Exelixis or any
Affiliate of Exelixis, covering inventions made prior to the end of the Research
Term, including those made prior to the Effective Date, that (a) claim or cover
the manufacture or use of an LLC Assay or Target, or the discovery of a
Collaboration Compound, or (b) are derived from the FlyTag database; and include
Joint Patents in which Exelixis has an ownership interest.

  1.33    "Field of Use" means any use [ * ].

  1.34    "Force Majeure Event" means, as to a Party, an event or condition
having a material adverse effect upon such Party due to circumstances beyond
such Party's reasonable control and that by the exercise of commercially
reasonable due diligence it is unable to prevent.  Circumstances beyond the
reasonable control of a Party include, but are not limited to, fire, strikes,
insurrections, riots, embargoes, shortages, war-time rationing or preferences,
delays in transportation, inability to obtain supplies of raw materials or
requirements or regulations of any government or any other civil or military
authority in the relevant jurisdiction.

  1.35    "F\\2\\-Phase" means the stage of research and development of a
Collaboration Compound for use in the Field of Use where Bayer selects the
Collaboration Compound for formal development work to generate the data needed
for registration, such as toxicological, environmental and ecobiological data,
metabolism studies, and residue studies.

  1.36    "Full Time Employee" or "FTE" means the equivalent of one employee of
Exelixis, working full time for one work year.

  1.37    "Independent Research" means:

          (a) with respect to Exelixis, work performed by employees or
consultants of Exelixis other than Dedicated FTEs or persons while acting as
Shared FTEs that does not utilize Confidential Information of another Party
(other than that Confidential Information of the LLC permitted to be used in
Section 11.3(c)); or

          (b) with respect to Bayer, work performed by employees or consultants
of Bayer that does not utilize Confidential Information of another Party (other
than that Confidential Information of the LLC permitted to be used in Section
11.2(c)).

  1.38    "Information" means information, results and data of any type
whatsoever, in any tangible or intangible form whatsoever, including without
limitation inventions, practices, methods, techniques, specifications,
formulations, formulae, knowledge, know-how, skill, experience, test data
including pharmacological, biological, chemical, biochemical, toxicological and
clinical test data, analytical and quality control data, stability data, studies
and procedures, and patent and other legal information or descriptions.

[*]=CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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  1.39    "Joint Invention" means all inventions, developments, results, know-
how and other Information, and all intellectual property relating thereto,
jointly conceived by employees of or consultants to two or more of the Parties
in the course of work performed pursuant to this Agreement after the Effective
Date and reduced to practice during the Research Term or within [ * ]
thereafter.

  1.40    "Joint Patent" means any Patent claiming a Joint Invention.

  1.41    "JSC" means the Joint Scientific Committee of the LLC, as further
defined in the Operating Agreement.

  1.42    "LLC Assay" means, with respect to a particular Selected Target, an in
vitro or in vivo assay developed by the LLC in the course of the Research or by
a Third Party subcontracted by the LLC pursuant to Section 3.3, including the
required reagents for performing such assay that are not otherwise readily
available, that is suitable for [ * ] and that can measure whether a particular
molecule or compound inhibits or antagonizes (or, if appropriate, agonizes or
enhances) the function of the Selected Target.

  1.43    "LLC Compound" means a  compound (including early stage compounds such
as hits and leads) having a molecular weight below [ * ] that:

          (a) agonizes, antagonizes, enhances or inhibits the function of a
Target, wherein such activity was discovered by or on behalf of the LLC or its
Affiliate or sublicensee by screening the compound in an LLC Assay for the
Target;

          (b) is a compound synthesized in connection with a Chemical
Development Program based on or arising from a compound that meets the criteria
in subsection (a) and that is shown to agonize, antagonize, enhance or inhibit
the function of a Target; or

          (c) is identified by the LLC or its Affiliate or licensee as provided
in Section 2.4(c) within [ * ] after the first use by the LLC or its Affiliate
or licensee of an assay or target described in Section 2.4(c).

The Parties understand and agree that the definition of "LLC Compound" does not
include any compound identified and developed without any use of an LLC Assay,
Selected Assay, Target or Confidential Information of Exelixis or Bayer.

  1.44    "LLC Know-How" means Information Controlled by the LLC or any
Affiliate of the LLC that (a) concerns a Target or is necessary or useful for
performing an LLC Assay, Exelixis Assay or Bayer Assay or otherwise for
discovering a Collaboration Compound, Exelixis Agrochemical Compound or Exelixis
Human Health Compound, or the manufacture, use or sale of a Product, and is
disclosed to Exelixis and/or Bayer under this Agreement, or (b) is derived from
the Sequence Library or Sequence Database.  LLC Know-How excludes the LLC
Patents.

  1.45    "LLC Patents" means all Patents Controlled by the LLC or any Affiliate
of the LLC, covering inventions made prior to the end of the Research Term, that
(a) claim or cover the discovery, manufacture or use of a Target, LLC Assay,
Exelixis Assay or Bayer Assay, or the

[*]=CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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discovery of a Collaboration Compound, Exelixis Agrochemical Compound or
Exelixis Human Health Compound, or the manufacture, use or sale of a Product, or
(b) are derived from the Sequence Library or Sequence Database; and include
Joint Patents in which the LLC has an ownership interest.

  1.46    "Management Committee" shall mean the Management Committee of the LLC,
as further defined in the Operating Agreement.

  1.47    "Net Sales" means the total amount invoiced or otherwise charged by
Bayer or Exelixis or their respective Affiliates or sublicensees, as applicable,
on account of the sale of a Product to a Third Party, less the following
deductions to the extent actually incurred and invoiced or charged to the
purchaser based upon the sale of such Product: (a) credits, allowances,
discounts and rebates to, and chargebacks from the account of, such Third Party
for spoiled, damaged, out-dated and returned Product; (b) actual freight and
insurance costs incurred in transporting such Product; (c) sales, value-added
and other direct taxes incurred; and (d) customs duties, surcharges and other
governmental charges incurred in connection with the exportation or importation
of such Product.  In calculating the Net Sales of a Product, any rebates,
discounts, commissions, costs, expenses or payments other than those expressly
provided above in this Section 1.47 shall not be deducted from the amount
invoiced or otherwise charged on account of sale of such Product.

  1.48    "Non-Cognate Target" means any Candidate Target or Sequence-Based
Target that is not a Cognate Target.

  1.49    "Operating Agreement" means the Operating Agreement of the LLC of even
date herewith.

  1.50    "Patent" means (a) all patent applications heretofore or hereafter
filed or having legal force in any country; (b) all unexpired patents that have
issued or in the future issue therefrom, including without limitation utility,
model and design patents and certificates of invention; and (c) all divisionals,
continuations, continuations-in-part, reissues, reexaminations, renewals,
extensions (including supplemental protection certificates), additions,
registrations or confirmations to or of any such patent applications and
patents.

  1.51    "Person" means a natural person, corporation, partnership (whether
general or limited), a limited liability company, or any trust, estate,
association, custodian, nominee or any other individual or entity in its own or
representative capacity, and in each case, as to a legal entity, whether formed
under the laws of the United States or of any state thereof or of any non-United
States jurisdiction.

  1.52    "Product" means a Bayer Product, Exelixis Agrochemical Product, or
Exelixis Human Health Product.

  1.53    "Putative Related Family Member" means an Unselected Non-Cognate
Target that is identified in accordance with Section 4.4(a).

[*]=CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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  1.54    "Regulatory Approval" means any and all approvals (including
supplements, amendments, pre- and post-approvals, pricing and reimbursement
approvals), licenses, registrations or authorizations of any national, supra-
national (e.g., the European Commission or the Council of the European Union),
regional, state or local regulatory agency, department, bureau, commission,
council or other governmental entity, that are necessary for the manufacture,
distribution, use or sale of a Product in a regulatory jurisdiction.

  1.55    "Related Family Member" means, with respect to a particular Selected
Target, a Putative Related Family Member that the Parties determine, as set
forth in Section 4.4(b), to be [ * ].

  1.56    "Research" means the research efforts conducted by a Party or the
Parties pursuant to this Agreement during the Research Term, together with the
research efforts conducted by Exelixis and/or Bayer A.G. under the Original
Agreement during the term of the Original Agreement.  Research includes work
performed under the Target Identification Project and the Sequencing Project and
such other research activities as specified by the LLC.

  1.57    "Research Field" means research directed only towards the discovery
and testing of insecticides (including compounds acting against other
invertebrate animals) and nematicides for crop protection, [ * ].

  1.58    "Research Orthologue" means, with respect to a first gene or protein
that was discovered in the course of the Collaboration and naturally occurs in a
particular species, a second gene or protein that naturally occurs in a
different species, was identified by a Party in the course of work other than
Independent Research, and has sufficient sequence homology or evidence of
functional equivalence to be considered the counterpart of such first gene or
protein.

  1.59    "Research Plan" means a detailed plan for research under this
Agreement as recommended by the JSC and approved by the LLC from time to time
during the Research Term.

  1.60    "Research Term" means the period commencing on the Effective Date and
ending on the date specified in Section 2.1(b) unless earlier terminated
pursuant to Section 14.3.

  1.61    "Reserved Target" means any target designated as set forth in Section
6.1.

  1.62    "Selected Assay" means an LLC Assay for which Bayer commences
screening for Collaboration Compounds within the period set forth in Section
3.3.

  1.63    "Selected Cognate Target" means a Cognate Target that the LLC has
selected for LLC Assay development as provided in Section 3.1 or that Bayer has
selected for Bayer Assay development as provided in Section 3.2 or 5.3.

  1.64    "Selected Non-Cognate Target" means: (a) a Non-Cognate Target that the
LLC has selected for LLC Assay development as provided in Section 3.1 or 4.3(a)
or that Bayer has selected for Bayer Assay development as provided in Section
3.2 or 4.3(a), or (b) a Target that Bayer has selected for Bayer Assay or LLC
Assay development as provided in Section 2.11.

[*]=CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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  1.65    "Selected Target" means a Selected Cognate Target, Selected Non-
Cognate Target or Selected A List Reserved Target.

  1.66    "Sequence-Based Target" means a Target contained in the Sequence
Database.

  1.67    "Sequence Database" means the compilation of the readable sequence
data from a Sequence Library.

  1.68    "Sequence Library" means an arrayed, normalized cDNA or genomic
library created from samples provided by Bayer from an arthropod or helminth
species selected by Bayer.

  1.69    "Sequencing Project" means the research project described in Section
2.4.

  1.70    "Shared FTE" means an FTE furnished by, and comprised of, the
collective services of persons who perform work for the LLC and also work on
other Exelixis projects, both internal and in collaboration with Third Parties.

  1.71    "Target" means (a) a gene or gene product or portion thereof that is
identified in the course of the Research, (b) a gene or gene product or portion
thereof Controlled by Exelixis that it licenses to the LLC for Research in the
Research Field, (c) a gene or gene product obtained by Bayer or the LLC using
sequence information provided by Exelixis pursuant to this Agreement or the
Original Agreement, or (d) a Research Orthologue of a gene, gene product or
portion thereof that meets the criteria set forth in Section 1.71(a), (b) or
(c).  For clarity, Section 1.71(a) includes Sequence-Based Targets, Candidate
Targets and A List Reserved Targets.  The Parties understand and agree that any
gene or gene product or portion thereof that is discovered through Independent
Research is not a Target.

  1.72    "Target Identification Project" means that research project described
in Section 2.3 and Articles 3, 4 and 5 regarding identification of Cognate
Targets and/or Non-Cognate Targets and development of LLC Assays.

  1.73    "Third Party" means any entity or individual other than the Parties
and other than the Affiliates of the Parties.

  1.74    "Unselected Assay" means an LLC Assay which Bayer fails to select or
for which Bayer fails to commence screening for Collaboration Compounds within
the period set forth in Section 3.3.

  1.75    "Unselected Cognate Target" means a Cognate Target that both the LLC
and Bayer failed to select as provided in Section 3.1, 3.2 or 5.3.

  1.76    "Unselected Non-Cognate Target" means a Non-Cognate Target that both
the LLC and Bayer failed to select as provided in Section 3.1, 3.2 or 4.3.

[*]=CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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2.   Collaborative Research

     2.1     Overview of Research Projects.

             (a) Under the terms of the Original Agreement, Exelixis has already
performed Research on the Target Identification Project and the Sequencing
Project.  During the Research Term, the LLC shall undertake the Research, to be
conducted on a cooperative and collaborative basis with Exelixis and Bayer in
accordance with a new Research Plan agreed upon by the Parties.  To the extent
consistent with the resources of the LLC provided under this Agreement or
otherwise available to the LLC, the LLC may establish Research projects in
addition to the Target Identification Project and the Sequencing Project for the
Parties to conduct within the Research Field.

             (b) Unless terminated pursuant to Section 14.7, the Research Term
will initially last eight (8) years from the Effective Date, and it will
automatically be extended beyond the eighth anniversary of the Effective Date,
in one year increments, unless Exelixis or Bayer gives written notice, at least
[ * ] prior to the eighth or any subsequent anniversary of the Effective Date,
of its intent to terminate the Research Term.

     2.2     Research Plan. The Research shall be conducted in accordance with a
Research Plan approved by the LLC based on the recommendation of the JSC. The
initial Research Plan under this Agreement shall be recommended by the JSC at
its first meeting after the Effective Date, and shall include the continuation
of the Research underway as of the Effective Date with appropriate additions and
modifications arising from the increased level of Research effort arising from
this Agreement. Prior to the first meeting of the JSC, the Research Plan shall
be determined by the LLC. Any changes to the Research Plan will require the
recommendation of the JSC or, if a decision of the JSC cannot be reached, the
approval of such change by the LLC. If the revised Research Plan requires a
personnel change of [ * ] or more of the FTEs working in a particular
discipline, then such Research Plan shall provide for a reasonable time for
Exelixis to implement such change. If the revised Research Plan requires
Exelixis to purchase or lease more than [ * ] of equipment or to acquire
licenses that were not already budgeted for purchase, lease or license at such
time, then such change shall require the consent of Exelixis unless the LLC
agrees (i) to purchase such additional capital equipment and/or to acquire such
additional licenses, as assets of the LLC, or (ii) to pay for such purchase or
lease expenses in excess of [ * ], which agreement in either case will require
that Bayer also agree with the LLC in writing to fund such amounts as an
increase in LLC operating expenses.

     2.3     Target Identification Project. The goal of the Target
Identification Project is to discover, isolate and validate Cognate Targets and
Non-Cognate Targets and to develop appropriate LLC Assays directed at such
Cognate Targets and Non-Cognate Targets and useful for the identification of
novel insecticides and nematicides. The research carried out by the LLC under
the Target Identification Project and each Party's rights with respect to the
data, Targets and LLC Assays that arise from the Target Identification Project
are set forth below and in Articles 3, 4 and 5 .

             (a) Research Performed Prior to the Effective Date. Exelixis has
already performed substantial Research in the Target Identification Project
under the Original Agreement. Commencing on the Effective Date, the LLC shall
assume responsibility for all

[*]=CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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Research then in progress and shall begin new Research in accordance with the
Research Plan. The rights and obligations with respects to all data, Targets and
LLC Assays arising in the course of the Research shall be the same regardless of
whether the underlying work was performed by Exelixis or Bayer A.G. under the
Original Agreement, by the Parties under this Agreement, or a combination of
both. In this regard:

        (i) The LLC shall have the right to decide, pursuant to Section 3.1,
whether the LLC will develop an LLC Assay for any Candidate Target for which
Exelixis provided to Bayer A.G. the information set forth in Section 3.1 prior
to the Effective Date and for which Bayer A.G. did not, prior to the Effective
Date, select such Candidate Target as a Selected Target.  For any such Candidate
Target which was provided prior to the Effective Date, the rights of Bayer set
forth in Section 3.2 shall come into effect on [ * ], and the rights of the
Parties set forth in Sections 4.3 and 5.3 shall come into effect on [ * ] if
Bayer fails to select such Candidate Target or designate such Candidate Target
as a Putative Related Family Member by such date.

        (ii) Any assays in development as of the Effective Date which are
delivered to Bayer pursuant to this Agreement after the Effective Date shall be
deemed to be LLC Assays, subject to the rights of the LLC and Exelixis set forth
in Sections 4.6 and 5.5.

     (b) Target Identification.  In the event that the Research Plan calls for
the LLC to perform target identification research upon a Bayer Pesticide other
than those Bayer Pesticides upon which research was conducted by Exelixis prior
to the Effective Date, the LLC shall request and Bayer shall provide to the LLC
within sixty (60) days after of such request, a reasonable amount of each such
Bayer Pesticide.  The LLC will study the feasibility of isolating [ * ] that are
resistant to the Bayer Pesticides, or using other research capabilities of
Exelixis to identify Targets.  Based on these feasibility studies Bayer shall
prioritize those Bayer Pesticides upon which the LLC shall perform further work
under the Research to identify Candidate Targets (as defined below).  For each
of these selected Bayer Pesticides, the LLC will endeavor to: (i) isolate [ * ],
as appropriate, that are resistant to the Bayer Pesticide, or apply other
Exelixis discovery capabilities as appropriate; (ii) map and clone the genes
responsible for the resistance in such [ * ]; and (iii) identify and validate
genes encoding Targets that may be useful for the identification of
Collaboration Compounds.  Each Target for which the LLC has successfully
completed steps (i), (ii), and (iii) above shall be deemed a "Candidate Target."
The JSC shall recommend to the LLC and the LLC shall decide whether each
Candidate Target identified is a Cognate Target or Non-Cognate Target.

  2.4     Sequencing Project.  Under the Original Agreement, Exelixis and Bayer
AG commenced a Sequencing Project (formerly known as an "EST Library Project")
intended to create an expressed sequence tag ("EST") library for an [ * ]
species of interest and a database comprising sequenced ESTs from said species.
During the Research Term, the LLC shall continue the Sequencing Project in
accordance with the Research Plan and this Section 2.4.  The Research Plan may
be amended by the written agreement of the LLC and Exelixis, to expand the
Sequencing Project to include one or more additional sequencing projects to be
performed by Shared FTEs, including but not limited to genomic sequencing
projects.

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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     (a) For each project in the Sequencing Project, Bayer AG has selected or
Bayer will select an [ * ] species with relevance to Bayer's crop protection
business.  For each species that Bayer AG did not provide Exelixis with whole
organism and tissue samples from such species, Bayer shall provide such
materials to the LLC.  Using these whole organism and tissue samples, Shared
FTEs will create a Sequence Library.  Shared FTEs will perform [ * ] sequencing
upon the number of clones from the Sequence Library specified in the Research
Plan and approved by Exelixis and compile the readable sequence data from such
Sequence Library (approximately [ * ] of the sequencing lanes are expected by
the Parties to be readable, but such expectation is not binding) into a Sequence
Database specifically arising from the Research.

     (b) Shared FTEs or Dedicated FTEs will perform cross-species comparisons
between the Sequence Database and proprietary Exelixis sequence banks and
between the Sequence Database and publicly available databases, with the
intention of identifying gene fragments or Targets with potential utility in the
Research Field.  The LLC will provide Bayer and Exelixis access to the Sequence
Database and any information relating to the such targets or otherwise derived
from such comparisons.  The Sequence Database and sequence-derived information
will be supplied to Bayer and Exelixis in the computer-readable format agreed
upon under the Original Agreement.

     (c) Bayer may identify and validate Sequence-Based Targets without
selecting such Targets.  Bayer shall select a Sequence-Based Target prior to
conducting further Research and Development work using such a Sequence-Based
Target.  Upon selection, a Sequence-Based Target shall become a Selected Non-
Cognate Target and any compounds identified by use of such Target or LLC Assays
or Bayer Assays based on such Target will be Collaboration Compounds subject to
all milestone and premium fee obligations outlined in Sections 9.3 and 9.4
[ * ].

     (d) The LLC will allocate from the Research commitment set forth in Section
2.5 sufficient FTEs to perform the sequencing dictated by the Research Plan and
not exceeding Exelixis' uncommitted sequencing capacities.  The JSC will attempt
in good faith to project sequencing needs [ * ] in advance.

     (e) The LLC may, upon the allocation of sufficient FTEs from the Research
commitment set forth in Section 2.5, expand the Sequencing Project to include
more than one [ * ] species (not exceeding Exelixis' uncommitted sequencing
capacities).  Bayer shall retain the right to select any additional species and
the Parties' rights and obligations with respect to the additional Sequence
Libraries and Sequence Databases shall be the same as for the initial Sequence
Library and Sequence Database.

 2.5 Research Commitment; FTEs.

     (a) In the first Contract Year, the LLC shall provide Exelixis with [ * ]
in Research funding and shall carry forward [ * ] for Research funding for the
subsequent Contract Year.  At least [ * ] in advance of the commencement of each
Contract Year after the first Contract Year, Exelixis shall provide the LLC with
a written calculation of the Annual FTE Rate for the following Contract Year in
accordance with Section 1.3.  If such Annual FTE Rate exceeds [ * ], the LLC
shall provide Exelixis, at least [ * ] in advance of the commencement of

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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such Contract Year, written notice of whether the LLC commits to provide
sufficient Research funding (which shall include any carry-forward described in
this Section 2.5(a)) in the subsequent Contract Year to support [ * ] FTEs at
such Annual FTE Rate. If the LLC does not provide such commitment, then the LLC
shall specify such lesser amount of research funding which it commits to provide
in the forthcoming Contract Year, which amount shall not be less than [ * ] plus
any carry-forward described in this Section 2.5(a). The number of FTEs which are
funded during any given Calendar Year, which shall equal the sum of such level
of funding specified by the LLC plus any carry-forward described in Section
2.5(b) divided by the Annual FTE Rate in effect for such Calendar Year (with any
partial number being rounded down), is referred to in this Section 2.5 and
Section 9.2 as the "Specified FTEs." The amount of Research funding provided to
Exelixis by the LLC in each Contract Year after the first Contract Year shall
equal the result of the following calculation: multiply the number of Specified
FTEs by the Annual FTE Rate for such Calendar Year and deduct from the product
of such multiplication the amount of any Exelixis carry-forward described in
Section 2.5(b).

     (b) During each Contract Year in which the number of Specified FTEs (as
defined in Section 2.5(a)) equals [ * ], Exelixis shall provide [ * ] FTEs for
the Research, [ * ] of which shall be Dedicated FTEs and [ * ] of which shall be
Shared FTEs initially.  During any Contract Year in which the number of
Specified FTEs does not equal [ * ], Exelixis shall provide such number of
Specified FTEs, with any reduction in FTEs below [ * ] or increase above [ * ]
to be effected pro rata between Dedicated FTEs and Shared FTEs in the ratio
agreed upon in the Research Plan.  If Exelixis is unable to provide the number
of Specified FTEs for a particular Contract Year, then the excess of the level
of funding provided by the LLC during such Contract Year, divided by the product
the Annual FTE Rate for such Calendar Year times the number of FTEs actually
provided by Exelixis in such Contract Year, shall be carried forward by Exelixis
and used to pay for FTEs in the following Contract Year as provided in Section
2.5(a).

     (c) None of the Dedicated FTEs or Shared FTEs which the LLC is committed to
fund under Section 2.5(b) may be allocated by the LLC to (a) collaborations
between the LLC and Third Parties, (b) projects that involve the use of LLC
Assay(s) for screening purposes (except for implementation of LLC Assays at
Bayer's HTS facility) or (c) development of LLC Compounds.  Prior to any
amendment of the Research Plan to provide for the performance of such tasks by
the LLC, the LLC shall, with the written approval of Bayer, increase the number
of FTEs for which it provides research funding under this Agreement in order to
allocate sufficient new FTEs, funded by the LLC, to perform such tasks.  At any
time during the Research Term, the LLC, with the separate prior written consent
of Exelixis, may increase the number of Specified FTEs funded by the LLC under
this Agreement.

     (d) The Exelixis employees who provide FTE services to the LLC under this
Agreement shall remain employees of Exelixis, and Exelixis shall be solely
responsible for their recruiting, evaluation, compensation, management and
termination.  Exelixis shall indemnify Bayer and the LLC and their Affiliates
for any claims arising from such employment relationship, as set forth in
Article 13.

 2.6 Records.  The LLC shall maintain records of all work conducted under the
Research and all results, data and developments made pursuant to its efforts
under the Research. Exelixis shall cause all of its employees performing work on
behalf of the LLC to maintain

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records of such Research and of other activities in accordance with the
practices used by Exelixis in its independent research activities, with work on
behalf of the LLC to be maintained in independent laboratory notebooks. Such
records shall be complete and accurate and shall fully and properly reflect all
work done and results achieved in the performance of the Research and other
activities in sufficient detail and in good scientific manner appropriate for
patent and regulatory purposes. Exelixis and Bayer shall each have the right to
review and copy such records of the LLC at reasonable times to the extent
necessary for Bayer and Exelixis to each conduct its Research or perform other
obligations under this Agreement, subject to the confidentiality provisions set
forth in Article 18 of the Operating Agreement. Bayer or the LLC shall be
entitled to review at its expense the laboratory note books maintained by
Exelixis for the Shared FTEs, subject to appropriate confidentiality provisions,
for the purpose of determining ownership of intellectual property. If Exelixis
cites confidentiality concerns, Bayer or the LLC shall be entitled to hire an
independent auditor at its expense to review the laboratory note books
maintained by Exelixis for the Shared FTEs, subject to appropriate
confidentiality provisions, for the purpose of determining own ership of
intellectual property.

  2.7     Quarterly Reports.  Within [ * ] after the end of each calendar
quarter during the term of this Agreement, Exelixis and Bayer shall provide the
LLC with a written progress report summarizing the work performed in relation to
the goals of the Research projects and the Research Plan and provide such other
information required by the Research Plan or reasonably requested by another
Party.  The LLC shall produce an omnibus report that includes the Information
provided by Exelixis and Bayer as well as the corresponding Information
regarding the LLC's work.  The LLC's obligation under this Section 2.7 shall
commence on the Effective Date.  Bayer's obligation to provide quarterly reports
pursuant to this Section 2.7 will commence in the calendar quarter in which any
employee, agent or representative of Bayer first performs Research.  Exelixis'
obligation to provide quarterly reports pursuant to this Section 2.7 will
commence in the calendar quarter in which any employee, agent or representative
of Exelixis, other than a Dedicated FTE or an employee acting as a Shared FTE,
first performs Research.

  2.8     Additional Research Projects.  In addition to the Target
Identification Project and Sequencing Project, the LLC may, in its discretion,
identify and direct additional Research projects within the Research Field to
the extent resources are available, provided such Research projects are not
precluded by another agreement binding upon one of the Parties.  Such projects
shall be conducted under the guidance of the JSC and the LLC as provided in
Article 2.  The LLC shall allocate sufficient additional FTEs, as set forth in
Section 2.5, to perform such agreed additional Research projects.

  2.9     LLC Research Employees.  As of the Effective Date, it is not
contemplated that the LLC will employ its own research scientists.  In the event
the LLC determines that the LLC shall hire its own research employees, the
Parties shall review this Agreement for the purpose of agreeing on amendments,
if any, which may be necessary or appropriate to account for such hiring while
still preserving the originally contemplated allocation of rights as among the
Parties.

  2.10    Targets Supplied by Exelixis.  To the extent that it is able to do so,
Exelixis will make available to Bayer sequence information and database
annotation regarding Targets Exelixis has discovered independently or through
its other collaborations.  Bayer may pursue

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such Targets by selecting them as set forth in Section 2.11, in which case they
shall be deemed Selected Non-Cognate Targets.

  2.11    Targets Separately Selected by Bayer.

          (a) With the exception of Reserved Targets (which are addressed in
Article 6), this Section 2.11 sets forth Bayer's rights to pursue Targets not
identified in the Target Identification Project. Such Targets shall include (i)
Sequence-Based Targets, (ii) Targets obtained from sequences in any database
provided by Exelixis hereunder, and (iii) Targets provided by Exelixis pursuant
to Section 2.10. Upon selection by Bayer as set forth in Section 2.11(b) or
2.11(c), a Target described in this Section 2.11(a) shall become a Selected Non-
Cognate Target unless such Target is identical to a Cognate Target, in which
case such Target shall become a Selected Cognate Target.

          (b) Bayer may develop a Bayer Assay against a Target described in
Section 2.11(a) at its own expense at any time, provided that Bayer first
selects such Target as a Selected Non-Cognate Target by written notification to
the LLC and [ * ]. The LLC shall not receive any compensation under [ * ], but
the LLC shall receive all other compensation under Sections 9.3 and 9.4 which is
due with respect to any resulting Collaboration Compounds and/or Bayer Products.

          (c) In lieu of developing a Bayer Assay directed against a Target
described in Section 2.11(a), Bayer may select, by written notification to the
LLC, such Target as a Selected Non-Cognate Target for which the LLC will develop
an LLC Assay, provided that the LLC has sufficient resources to perform such
work. Bayer shall make all payments under Section 9.3 and 9.4 due with respect
to such Selected Non-Cognate Target and any resulting Collaboration Compounds
and/or Bayer Products.

3.   Target and Assay Selection

     3.1     Target Selection by the LLC. The LLC may select any Candidate
Target that the LLC identifies as a Selected Target and direct the LLC to
develop one or more appropriate LLC Assays. Any such selection by the LLC shall
be confirmed in writing delivered to each of the Parties (which may be in the
form of the minutes of a meeting of the Management Committee). If the LLC does
not select any particular Candidate Target as a Selected Target within [ * ]
following the date that the relevant LLC Know-How and Exelixis Know-How relating
to such Candidate Target is provided to the LLC, then Bayer shall have the
rights set forth in Section 3.2 to select such Candidate Target.

     3.2     Target Selection by Bayer. Bayer shall have [ * ] after the failure
of the LLC to timely select a Candidate Target as a Selected Target to select,
by written notification to the LLC, such Candidate Target as a Selected Target
and to commence development, at Bayer's expense, of a Bayer Assay directed at
such Candidate Target. The LLC shall not receive any compensation under [ * ],
but the LLC shall receive all other compensation under Sections 9.3 and 9.4
which is due with respect to any resulting Collaboration Compounds and/or Bayer
Products. If Bayer does not select such Candidate Target and commence such assay

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
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development within such [ * ] period, then the Parties shall have the rights set
forth in Sections 4.3 and 5.3.

  3.3     LLC Assay Development and Selection.  For each Selected Target
selected by LLC under Section 3.1 or selected by Bayer under Section 2.11(c) or
6.2(b) for development of an LLC Assay, the LLC will work to develop an LLC
Assay that is configured to screen Bayer Compounds in order to identify
Collaboration Compounds that inhibit or antagonize (or, if appropriate, agonize
or enhance) the function of such Selected Target.  The LLC may subcontract the
development of LLC Assay(s) for one or more Selected Targets.  Upon completion
of the LLC Assay development in a format configured for [ * ] and as further
specified in Exhibit A hereto or as otherwise specified by Bayer in writing, the
LLC shall present the LLC Assay and all data regarding the applicable Selected
Target to Bayer.  Bayer shall have [ * ] after the date of the LLC's
presentation in order to commence using such LLC Assay at Bayer's expense to
screen for Collaboration Compounds.  If Bayer does not commence such screening
activity within [ * ] and Bayer provides the JSC, prior to the end of the [ * ]
period, with a written request for a [ * ] extension of the period, the LLC
shall decide, on a case-by-case basis, whether to grant Bayer such extension.
If Bayer commences such screening activity within such [ * ] period or any such
extension thereof, then such LLC Assay shall then be deemed a "Selected Assay."
If Bayer does not commence such screening activity within such [ * ] period and
any extension thereof, then such LLC Assay shall be deemed an "Unselected Assay"
and so identified in the LLC's books and records, and the LLC and Exelixis shall
have the rights set forth in Sections 4.6 and 5.5 with respect to such
Unselected Assay.

  3.4     Selected Assays.  The LLC will deliver to Bayer the format for each
Selected Assay and will provide to Bayer [ * ] of any proprietary reagents
developed by the LLC for the Selected Assay for Bayer's use to conduct screening
of Bayer Compounds in the Selected Assay.  The LLC may allocate FTEs, out of the
resources available to conduct Research, to conduct work under the Research Plan
to prepare such [ * ] of reagents to be provided to Bayer, and to the extent
that the LLC must expend additional effort or cost beyond such allocation of
FTEs in order to provide Bayer with such proprietary reagents, Bayer shall pay
the LLC such actual costs and expenses of the LLC to complete such efforts.

  3.5     Screening by Bayer.  For each Selected Assay or Bayer Assay, Bayer
will screen Bayer Compounds at Bayer's sole discretion and expense in the
Selected Assay or Bayer Assay for the purpose of identifying Collaboration
Compounds active in such Selected Assay or Bayer Assay.  For each Collaboration
Compound identified in such initial screening, Bayer will then conduct such
further work at its expense as it considers advisable in order to identify
additional Collaboration Compounds that may have higher activity or superior
quality, e. g. selectivity or stability.

  3.6     Retained Rights of Exelixis.  Except for the options granted in
Section 8.9 to Bayer, Exelixis shall retain the exclusive right to use all Non-
Cognate Targets, Cognate Targets and A List Reserved Targets outside of the
Field of Use. When Exelixis makes a Non-Cognate Target, Cognate Target or
Reserved Target available to a Third Party as permitted above, Exelixis shall
not disclose to such Third Party any [ * ], except as otherwise permitted
elsewhere in this Agreement.

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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4.   Non-Cognate Targets

     4.1     The Parties' Rights Regarding Non-Cognate Targets Selected by the
LLC. Bayer and the LLC shall have co-exclusive rights to pursue each Selected
Non-Cognate Target in the Research Field. Such co-exclusive right shall not
include any sublicensing rights for the LLC (except for LLC Assay development
purposes). Subject to Section 8.10(c), Bayer shall have the exclusive right to
pursue each Selected Non-Cognate Target in the Field of Use outside the Research
Field. Subject to Bayer's option set forth in Section 8.9(b), Exelixis shall
have the exclusive right to pursue each Selected Non-Cognate Target outside the
Field of Use and may develop an Exelixis Assay directed at a Selected Non-
Cognate Target for such purpose.

     4.2     The Parties' Rights Regarding Non-Cognate Targets Selected by
Bayer. Subject to Section 8.10(c), Bayer shall have exclusive rights to pursue
in the Field of Use each Non-Cognate Target it selects. Subject to Bayer's
option set forth in Section 8.9(b), Exelixis shall have the exclusive right to
pursue each such Selected Non-Cognate Target outside the Field of Use and may
develop an Exelixis Assay directed at a Selected Non-Cognate Target for such
purpose.

     4.3     Unselected Non-Cognate Targets.

             (a) After the failure of Bayer to timely select a Non-Cognate
Target as a Selected Non-Cognate Target pursuant to Section 3.2, any Party may
submit a written request to the LLC for the right to pursue such Unselected Non-
Cognate Target in the Field of Use. The LLC shall grant such request unless the
LLC has already granted such a request to another Party or licensed such Target
to a Third Party for use in the Research Field or, in response to such a request
by Exelixis, Bayer commits to promptly commence development of a Bayer Assay
directed at such Unselected Non-Cognate Target (in which case such Target shall
then be a Selected Non-Cognate Target). After the granting of such a request,
the requesting Party may pursue such Unselected Non-Cognate Target within the
Field of Use internally or in collaboration with a Third Party. In the event
that Exelixis is the requesting Party, Exelixis shall obtain Bayer's written
consent prior to the establishment of any collaboration in the Research Field
involving such Unselected Non-Cognate Target and any collaboration in the Field
of Use involving such Unselected Non-Cognate Target wherein [ * ]. Exelixis may
enter into collaborations in the Field of Use involving such Unselected Non-
Cognate Target without the prior approval of Bayer, provided that [ * ].
Exelixis shall not have the right to grant a Third Party a license to pursue any
Unselected Non-Cognate Target in the Research Field except as part of a
collaboration with Exelixis permitted in this Section 4.3 and Section 8.10(a).
Exelixis shall have the right to grant licenses to compounds identified with
apparent activity against such Unselected Non-Cognate Targets, provided,
however, that any such compounds that are Exelixis Agrochemical Compounds shall
be subject to the rights of Bayer set forth in Section 8.3.

     (b) The LLC shall have the right to pursue each Unselected Non-Cognate
Target within the Field of Use (unless such right is granted to Exelixis
pursuant to this Section 4.3).  Exelixis shall have the exclusive right to
pursue each Unselected Non-Cognate Target outside the Field of Use.  Bayer and
Exelixis shall have co-exclusive rights to pursue each Unselected Non-Cognate
Target in the field of animal health [ * ].  Exelixis may develop an Exelixis
Assay directed at an Unselected Non-Cognate Target.

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  4.4     Related Family Members.

          (a) If Exelixis wishes to select an Unselected Non-Cognate Target, it
shall discuss with the JSC whether such Unselected Non-Cognate Target [ * ]. If
[ * ] exists the Unselected Non-Cognate Target shall be deemed a "Putative
Related Family Member." Neither the LLC nor Exelixis may pursue within the Field
of Use any Putative Related Family Member.

          (b) The Parties will work together to determine [ * ] of the Putative
Family Related Member and such Selected Target, and in the course of such work,
Exelixis or Bayer will supply to the other, within [ * ] after the other Party's
reasonable request, the relevant requested biological material for testing.
Bayer will [ * ], determine whether [ * ], and measure the [ * ].  If the
Putative Related Family Member is [ * ] to such Selected Target and [ * ], then
the Putative Related Family Member is a Related Family Member and Exelixis shall
be prohibited from working upon it within the Field of Use.  If Bayer
subsequently has an HTS assay formatted with respect to such Related Family
Member, then Bayer shall retroactively pay [ * ] for such Related Family Member
and all future milestones and royalties shall be due for such Related Family
Member, which shall be deemed a separate Selected Target.  All Putative Related
Family Members that do not become Related Family Members within [ * ] of
designation as a Putative Related Family Members will cease to be Putative
Related Family Members and the rights of the Parties set forth in Section 4.3
shall apply to such Targets.

  4.5     The Parties' Rights Regarding Selected Assays. Subject to the
exceptions set forth in this Section 4.5, Bayer shall have exclusive rights to
pursue in the Field of Use each Selected Non-Cognate Target that is the basis
for a Selected Assay, such Selected Assay and all Research Orthologues of such
Selected Non-Cognate Target.  Bayer may approve, in its sole discretion, a
request by the LLC to grant it co-exclusive rights in the Field of Use outside
the Research Field to pursue a Selected Non-Cognate Target that is the basis for
a Selected Assay, such Selected Assay and all Research Orthologues of such
Selected Non-Cognate Target.  Exelixis shall have the exclusive right to pursue
outside the Field of Use each Selected Non-Cognate Target that is the basis for
a Selected Assay, such Selected Assay and all Research Orthologues of such
Selected Non-Cognate Target.  Exelixis may develop an Exelixis Assay directed at
a Selected Non-Cognate Target for such purpose.   Bayer's rights shall be
exclusive within the Research Field and within the Field of Use until the later
of (a) [ * ], or (b) [ * ].  Bayer may obtain a single [ * ] extension of the
period of exclusivity for a particular Selected Assay by, within [ * ] prior to
the expiration of the initial exclusivity period, submitting a written extension
request to the LLC and making a payment of [ * ] to the LLC within thirty (30)
days after the LLC grants such request in writing.  The LLC shall grant such
request if Bayer provides the LLC with (i) [ * ] and (ii) [ * ].

  4.6     Unselected Assays.

          (a) If Bayer fails to commence using an LLC Assay directed to a
Selected Non-Cognate Target to screen for Collaboration Compounds within the
period set forth in Section 3.3, then any Party may submit a written request to
the LLC for the right to screen such LLC Assay in the Field of Use. The LLC
shall grant such request unless the LLC has already (a) commenced use of such
LLC Assay for screening purposes in the Research Field (in which case the LLC
must have allocated additional FTEs pursuant to Section 2.5 to perform such
work), (b)

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granted a license to perform such screening available to a Third Party (subject
to Bayer approval), (c) granted such a request to another Party or (d) in
response to such a request by Exelixis, Bayer commits to promptly use the LLC
Assay to screen Bayer Compounds (in which case such assay shall then be a
Selected Assay).  After the granting of such a request, the requesting Party may
perform such screening within the Field of Use internally or in collaboration
with a Third Party.  In the event that Exelixis is the requesting Party,
Exelixis shall obtain Bayer's written consent prior to the establishment of any
collaboration in the Research Field involving such LLC Assay.  Exelixis may
enter into collaborations in the Field of Use outside the Research Field
involving such LLC Assay without the prior approval of Bayer.  Exelixis shall
not have the right to grant a Third Party a license to perform such screening
except on behalf of Exelixis, but shall have the right to grant licenses to
compounds identified through screening performed by or on behalf of Exelixis,
subject to the rights of Bayer set forth in Section 8.3.  Compounds discovered
through Exelixis' permitted use of an LLC Assay in the Field of Use may be
Exelixis Agrochemical Compounds.

          (b) The LLC shall have the right to use each LLC Assay that is not a
Selected Assay to screen for compounds with apparent activity inside the
Research Field (unless such right is granted to Exelixis pursuant to this
Section 4.6) and all such compounds shall be LLC Compounds.  Exelixis shall have
the exclusive right to use each such LLC Assay to screen for compounds with
apparent activity outside the Field of Use.

5.   Cognate Targets

     5.1     The Parties' Rights Regarding Cognate Targets Selected by the LLC .
Bayer and the LLC shall have co-exclusive rights to pursue each Selected Cognate
Target in the Research Field (in the case of the LLC, excluding the right to
sublicense except for LLC Assay development purposes).  Bayer shall have the
exclusive right to pursue each Selected Cognate Target in the Field of Use
outside the Research Field. Subject to Bayer's option set forth in Section
8.9(b), Exelixis shall have the exclusive right to pursue each Selected Cognate
Target outside the Field of Use and may develop an Exelixis Assay directed at a
Selected Cognate Target for such purpose.

     5.2     The Parties' Rights Regarding Cognate Targets Selected by Bayer.
Bayer shall have exclusive rights to pursue in the Field of Use each Cognate
Target it selects. Subject to Bayer's option set forth in Section 8.9(b),
Exelixis shall have the exclusive right to pursue each such Selected Cognate
Target outside the Field of Use and may develop an Exelixis Assay directed at a
Selected Cognate Target for such purpose.

     5.3     Unselected Cognate Targets.  After the failure of Bayer to timely
select a Cognate Target as a Selected Cognate Target pursuant to Section 3.2,
either Bayer or the LLC may select such Cognate Target as a Selected Cognate
Target at any time, provided that such Cognate Target has not already been
selected by either Bayer or the LLC and that the LLC has not already licensed,
with the prior approval of Bayer, such Target to a Third Party for use in the
Research Field.  Exelixis shall have the exclusive right to pursue each such
Unselected Cognate Target outside the Field of Use. Exelixis may develop an
Exelixis Assay directed at such a Target.

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  5.4     The Parties' Rights Regarding Selected Assays. Subject to the
exceptions set forth in this Section 5.4, Bayer shall have exclusive rights to
pursue in the Field of Use each Selected Cognate Target that is the basis for a
Selected Assay, such Selected Assay and all Research Orthologues of such
Selected Cognate Target.  Bayer may approve, in its sole discretion, a request
by the LLC to grant it co-exclusive rights in the Field of Use outside the
Research Field to pursue a Selected Cognate Target that is the basis for a
Selected Assay, such Selected Assay and all Research Orthologues of such
Selected Cognate Target.  Exelixis shall have the exclusive right to pursue
outside the Field of Use each Selected Cognate Target that is the basis for a
Selected Assay, such Selected Assay and all Research Orthologues of such
Selected Cognate Target.  Exelixis may develop an Exelixis Assay directed at a
Selected Cognate Target for such purpose.

  5.5     Unselected Assays.

          (a) If Bayer fails to commence using such LLC Assay to screen for
Collaboration Compounds within the period set forth in Section 3.3, then either
Bayer may select such LLC Assay as a Selected Assay at any time, provided that
the LLC has not already commenced screening of such LLC Assay in the Research
Field (in which case the LLC must have allocated additional FTEs pursuant to
Section 2.5 to perform such work) or already licensed to a Third Party the right
to screen such LLC Assay in the Research Field, subject to Bayer approval.
Exelixis shall have the exclusive right to use each such LLC Assay to screen for
compounds with apparent activity outside the Field of Use.

          (b) The LLC shall have the right to use each LLC Assay that is not a
Selected Assay to screen for compounds with apparent activity inside the
Research Field (unless such right is granted to Exelixis pursuant to this
Section 5.5) or within the Field of Use (and all such compounds shall be LLC
Compounds), Exelixis shall have the right to use each such LLC Assay to screen
for compounds with apparent activity outside the Field of Use.

6.   Reserved Targets

     6.1     Designation of Reserved Targets.

             (a) During the Research Term, Bayer may designate as a Reserved
Target any [ * ], provided that the number of Reserved Targets at any one time
never exceeds [ * ] and the cumulative number of Reserved Targets never exceeds
[ * ]. A Reserved Target will be classified as an A List Reserved Target if it
is present in (i) [ * ] or (ii) [ * ] and such target was either (A) [ * ] or
(B) [ * ]. All Reserved Targets that do not qualify as A List Reserved Targets
shall be classified as B List Reserved Targets. The Parties understand and agree
that Exelixis does not want to know the identities of the B List Reserved
Targets. Thus, Bayer will not reveal the identity of any B List Reserved Target
to Exelixis or any member of the LLC other than the CEO, and the CEO shall be
contractually prohibited from disclosing such Information to Exelixis or any
Dedicated FTE or Shared FTE.

             (b) Within [ * ], Bayer will submit to Exelixis and the LLC a
written list which identifies each A List Reserved Target and which indicates
the number of B List Reserved

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Targets but does not disclose their identities. Bayer shall simultaneously
provide to the CEO a separate written list that identifies each B List Reserved
Target.

        (c) During the Research Term, Bayer may designate new Reserved Targets
by written notification to Exelixis and the LLC, provided that the limitations
set forth in Section 6.1(a) regarding the number of Reserved Targets are not
exceeded. Bayer shall disclose the identity of each new A List Reserved Target
and the number of new B List Reserved Targets in such notification and shall
simultaneously submit to the CEO a written list that identifies each new B List
Reserved Target.

        (d) During the Research Term, Bayer may remove particular Reserved
Targets from the list by notifying the LLC and the CEO in writing of such
intent. Upon receipt of such notification, each such Reserved Target shall cease
to be a Reserved Target.

  6.2   A List Reserved Targets.

        (a) Bayer may perform preliminary research in the Field of Use upon A
List Reserved Targets but may not screen assays based on such Targets or
identify compounds with activity against such Targets prior to selecting the
relevant A List Reserved Target as a Selected A List Reserved Target. Prior to
Bayer's selection of an A List Reserved Target as a Selected A List Reserved
Target, the LLC shall, at the request of Bayer and the allocation of sufficient
resources, perform research upon one or more such A List Reserved Targets,
provided such research is limited to the collection of data for the support of
patent claims directed at such A List Reserved Targets. During the period after
the designation of a target as an A List Reserved Target and before Bayer's
selection of such Target as a Selected A List Reserved Target, Bayer shall have
exclusive rights (subject to the LLC's right to perform the aforementioned work
at the request of Bayer) to pursue such Targets in the Field of Use and Exelixis
has exclusive rights (subject to the option set forth in Section 8.9(b)) to
pursue such Targets outside the Field of Use.

        (b) Within [ * ] after its designation of a target as an A List Reserved
Target, Bayer may select any such Target as a Selected A List Reserved Target
upon written notification to the LLC.  Such notification shall specify whether
an assay based on such Selected A List Reserved Target shall be developed by the
LLC (in which case it will be an LLC Assay) or by Bayer (in which case it will
be a Bayer Assay).  Within [ * ] after the selection of an A List Reserved
Target, Bayer shall [ * ].

        (c) The Parties' rights and obligations with respect to Selected A List
Reserved Targets are the same as for Selected Cognate Targets:  if the LLC is
developing an LLC Assay based on a particular Selected A List Reserved Target,
then Section 5.1 shall apply to such Selected A List Reserved Target; if Bayer
is developing a Bayer Assay based on a particular Selected A List Reserved
Target, then Section 5.2 shall apply.  All milestone and premium fee obligations
set forth in Section 9.3 and 9.4 shall apply to such Targets and their related
assays and compounds ([ * ]).

        (d) The Parties' rights and obligations with respect to A List Reserved
Targets that have not been selected [ * ] after designation are the same as for
Unselected Cognate Targets.  If Bayer removes an A List Reserved Target from the
list of Reserved Targets, then the

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Parties' rights and obligations with respect to such Target shall be the same as
for an Unselected Non-Cognate Target. In addition, Bayer shall have the option
set forth in Section 8.9(b) with respect to such Targets.

     6.3     B List Reserved Targets. Bayer may work upon B List Reserved
Targets independently, with Third Parties, or with Exelixis or the LLC under a
separate agreement. In the event that a B List Reserved Target is identified in
the course of the Target Identification Program, the CEO shall promptly instruct
the LLC to stop work on such B List Reserved Target. If Bayer subsequently
removes a B List Reserved Target from the list of Reserved Targets, then the CEO
shall inform the LLC that it may, if it so desires, resume work on such Target.

7.   Product Development

     7.1     Development of Collaboration Compounds.  Bayer shall have the sole
right and responsibility to conduct Development of Collaboration Compounds,
either itself or through its Affiliates or licensees on its behalf and at its
expense, with the right to file Approval Applications for obtaining and
maintaining Regulatory Approval of Products as soon as reasonably practicable.
Upon deciding to commence Development on a Collaboration Compound, Bayer shall
notify the LLC in writing of such decision.  If requested by Bayer in writing,
the LLC shall provide Bayer reasonable assistance, at Bayer's expense, in
conducting such Development efforts.

     7.2     Development Expenses.  Bayer shall bear all the costs and expenses
incurred by Bayer or its Affiliates relating to the Development of Collaboration
Compounds undertaken under this Agreement and to the procurement of such
Regulatory Approval of Products.

     7.3     Reports. Bayer shall maintain records of all Development activities
and all results of any trials, studies and other investigations conducted by or
on behalf of Bayer under this Agreement. At least twice a year, Bayer shall
provide the LLC written reports summarizing the Development status or otherwise
respond informally and reasonably promptly upon the LLC's reasonable written
request.

     7.4     Development of LLC Compounds. The LLC may develop LLC Compounds in
the Research Field and pursue Regulatory Approval for products containing such
LLC Compounds, provided the LLC allocates FTEs in addition to the original [ * ]
FTEs, and/or funds for Third Party services, to perform such work. Bayer shall
have the option set forth in Section 8.4 with respect to such LLC Compounds.

     7.5     Development of Exelixis Compounds And Products. Exelixis shall bear
all costs and expenses incurred by it in connection with the discovery and
development of compounds and products arising from its use of LLC Know-How and
LLC Patents to discover compounds and develop products outside of its activities
on behalf of the LLC. Bayer shall have the option set forth in Section 8.3 with
respect to those compounds that are Exelixis Agrochemical Compounds.

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8.   Exclusivity; Further Bayer and Exelixis Rights

     8.1     Exelixis Exclusivity. During the Research Term, Exelixis shall
not knowingly conduct or finance research in the Research Field except pursuant
to this Agreement or otherwise as set forth in this Article 8. The Parties
recognize that the nature of the Exelixis technology may make it difficult for
Exelixis, acting in good faith, to know whether the results of its activities
undertaken on behalf of Third Parties may be directed towards the Research
Field. However, if in the course of performing work for any Third Party,
Exelixis determines in good faith that its activities appear to be directed
towards the Research Field, Exelixis shall refrain from any further work which
appears to be so directed. The foregoing restriction on work within the Research
Field includes that prohibition that Exelixis shall not knowingly engage in
mechanism of action studies on behalf of Third Parties within the Research
Field.

     8.2     Exelixis Independent Research Directed At [ * ]. [ * ] Exelixis may
desire to initiate, on its own and not with a Third Party, a research project
involving [ * ]. In such case it shall disclose to the LLC its planned
activities and its reasons for believing that such work is worthwhile. If within
[ * ] after the submission of a written proposal for such independent project to
the LLC by Exelixis, the LLC does not elect in writing to Exelixis to include
such project within the Research, then Exelixis may pursue such work on its own
behalf, at its own expense and without collaboration with Third Parties (other
than Exelixis consultants under customary consulting arrangements). Exelixis
shall report to the LLC on a quarterly basis regarding its work under any such
independent project. At [ * ], Exelixis may submit to the LLC a written report
of its results to that point and request a determination as to whether the LLC
desires to bring such project into the Research. If the LLC elects by written
notice to Exelixis to bring such project within the Research, then the Parties
shall negotiate at arm's length mutually acceptable terms and conditions for
such project to be brought into the Research, the LLC shall allocate a
sufficient number of FTEs in addition to those previously allocated to the
Collaboration to continue the project with reasonable diligence, and the work
shall thereafter be conducted as part of the Research. If the LLC does not elect
to include such work within the Research, then Exelixis shall be free to pursue
it thereafter, alone or with Third Parties.

     8.3     Exelixis Agrochemical Compounds.  Prior to offering any Third Party
the opportunity to acquire a license to research and develop an Exelixis
Agrochemical Compound and/or commercialize an Exelixis Agrochemical Product,
Exelixis shall provide Bayer with the opportunity to consider whether Bayer or
an Affiliate of Bayer wishes to acquire a license in the Research Field or the
Field of Use to the Exelixis Agrochemical Compound and any current or future
Exelixis Agrochemical Products incorporating such Compound (except for those
Exelixis Agrochemical Products for which Bayer has been offered but failed to
exercise its option to license under this Section 8.3). When presenting Bayer
the opportunity for any such license, Exelixis will provide Bayer in writing
with information regarding [ * ].  The first time that Exelixis offers Bayer the
opportunity to license in the Research Field or Field of Use an Exelixis
Agrochemical Compound active against a particular Target, Exelixis shall also
offer Bayer the opportunity to [ * ].  Subsequent offers to Bayer shall include
those rights set forth in the previous sentence that, at the time of such
offers, have not been exclusively licensed to a Third Party.  Bayer shall have [
* ] after such offer in which to inform Exelixis in writing that Bayer or an
Affiliate of Bayer is interested in acquiring such a license.  If Bayer
indicates such interest within the [ * ] period, then Exelixis and Bayer or
Bayer's relevant Affiliate shall negotiate in good faith for up to [ * ] to
reach agreement on the terms of a license agreement which shall be set forth in
an executed license agreement.  If Bayer fails to notify Exelixis of its
interest or Exelixis and Bayer fail to execute a license agreement within the
applicable period, then Bayer

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or its relevant Affiliate shall provide to Exelixis all information and data
collected or generated by Bayer or its relevant Affiliate with respect to such
Exelixis Agrochemical Compound and Bayer shall have no rights with respect to
such Exelixis Agrochemical Compound or Exelixis Agrochemical Product and
Exelixis shall have unrestricted rights to develop said Exelixis Agrochemical
Compound and commercialize such Exelixis Agrochemical Product, without
compensation to Bayer or the LLC other than that set forth in Section 9.4(b),
either independently or in collaboration with one or more Third Parties, [ * ].
This Section 8.3 shall expire [ * ].

     8.4     LLC Compounds. Prior to offering any Third Party the opportunity to
acquire a license to develop an LLC Compound in the Research Field and/or
commercialize a product containing such LLC Compound in the Field of Use, the
LLC shall provide Bayer with written notice of its intention to do so and all of
the information then available to the LLC with respect to such LLC Compounds.
When presenting Bayer the opportunity for any such license, the LLC will provide
Bayer in writing with information regarding [ * ].  The first time that the LLC
offers Bayer the opportunity to license within the Field of Use any LLC Compound
active against a particular Target, the LLC shall also offer Bayer the
opportunity to [ * ].  Subsequent offers to Bayer shall include those rights set
forth in the previous sentence that, at the time of such offers, have not been
exclusively licensed to a Third Party.  Bayer shall have [ * ] after such offer
in which to inform the LLC  in writing that Bayer or an Affiliate of Bayer is
interested in acquiring such a license.  Thereafter, the LLC and Bayer (or such
Bayer Affiliate) shall negotiate in good faith for up to [ * ] to reach
agreement on the terms of a license agreement which shall be set forth in either
an executed license agreement or an executed legally binding heads of agreement.
If Bayer fails to notify the LLC of its interest or the LLC and Bayer (or such
Bayer Affiliate) fail to execute a license agreement within the applicable
period, then Bayer (or such Bayer Affiliate) shall have no rights with respect
to such LLC Compound or product containing such LLC Compound and the LLC shall
have unrestricted rights to develop such LLC Compound in the Research Field and
commercialize such product containing such LLC Compound in the Field of Use
either independently or in collaboration with one or more Third Parties.  This
Section 8.4 shall expire [ * ].

     8.5     Exelixis Independent Research Collaborations [ * ].  Except as
provided in the penultimate sentence of this Section 8.5, before Exelixis [ * ]
whereby Exelixis would collaborate exclusively with such Third Party during the
Research Term in an area that is [ * ], Exelixis shall notify Bayer and the LLC
in writing in reasonable detail of any such opportunity and provide Bayer and
the LLC with the same type and quality of information it would make available to
such Third Party with respect to such opportunity.  Bayer and the LLC shall
thereafter have a [ * ] period in which to notify Exelixis in writing that Bayer
or the LLC wishes to pursue such opportunity.  The first such Party, if any, as
between Bayer and the LLC, to provide Exelixis with timely notification of its
interest in the opportunity shall have an additional [ * ] period in which to
negotiate with Exelixis for and execute a binding agreement with Exelixis
setting forth the terms of a collaboration encompassing the subject matter
described by Exelixis in the information provided to Bayer and the LLC prior to
the start of the [ * ] notice period.  During the periods set forth above in
this Section 8.5, Exelixis may [ * ] but may not [ * ], and may not [ * ].  If
both Bayer and the LLC fail to notify Exelixis of its interest within the [ * ]
period or Exelixis or any notifying Party fails to execute a license agreement
within the [ * ]

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period, then neither Bayer nor the LLC shall have any rights with respect to
such opportunity and Exelixis shall have unrestricted rights (except as set
forth in Section 8.6) to pursue such collaborations with one or more Third
Parties, without compensation to Bayer or the LLC, except as set forth in
Sections 9.4(b) and (c). The option set forth in this Section 8.5 does not
pertain to [ * ]. This Section 8.5 does not obligate Exelixis to enter into a
collaboration with Bayer or the LLC that, in the sole discretion of Exelixis,
Exelixis decides is not in its best interests.

  8.6     Exelixis Negative Covenant.  Exelixis hereby covenants that it shall
not commercialize in the Research Field an Exelixis Agrochemical Product for
which it has an obligation under Section 8.3 to provide Bayer an opportunity to
consider acquiring a license, unless it has fulfilled its obligations under
Section 8.3.  In addition, Exelixis shall [ * ].

  8.7     Bayer Undertaking Regarding [ * ].  [ * ], if Bayer elects to conduct
or finance any work at a for-profit organization that is [ * ], then Bayer shall
first offer to the LLC in writing the opportunity to perform such work. If (i)
the LLC fails to notify Bayer within [ * ] following such offer that the LLC is
interested in performing such work,  (ii) the LLC fails, after timely notice, to
[ * ]  or (iii) Bayer and the LLC fail to execute within [ * ] after the LLC's
timely notice  a written agreement for the LLC to perform such work, then Bayer
may conduct or finance such work at a Third Party for-profit organization.
Except as provided in this Section 8.7, Bayer shall retain complete freedom of
operation to conduct research and development activities [ * ].

  8.8     Collaboration Compounds. Prior to offering any Third Party the
opportunity to acquire a license to develop a Collaboration Compound upon which
Bayer has ceased Development, Bayer shall provide Exelixis with the opportunity
in writing to consider whether Exelixis wishes to acquire a license to such
Collaboration Compound.  Bayer shall [ * ].  Exelixis shall have [ * ] following
its receipt of such writing in which to inform Bayer in writing that it is
interested in acquiring a license to such Collaboration Compound.  Thereafter,
Exelixis and Bayer shall have [ * ] in which to negotiate and execute a license
agreement enabling Exelixis to further develop such Collaboration Compound and
to make, have made, import, sell and offer to sell products incorporating such
Collaboration Compound.  This Section 8.8 does not obligate Bayer to enter into
a license agreement with Exelixis that, in the sole discretion of Bayer, Bayer
decides is not in its best interests.  This Section 8.8 shall expire [ * ].

  8.9     Options for Pharmaceutical Collaborations

          (a) Exelixis hereby grants Bayer a royalty-free option to collaborate
with Exelixis regarding the use of Cognate Targets, Non-Cognate Targets, and A
List Reserved Targets that have human orthologues and LLC Assays based on such
Targets for pharmacological research and development under still to be
negotiated and agreed upon terms and provisions, provided that Bayer has a
pharmaceutical division or Affiliate at the time of exercise of the option and
further provided that Exelixis does not then have a pre-existing obligation that
would prevent it from collaborating with Bayer with respect to such Target and
such disease area.

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        (b) Exelixis hereby grants Bayer a royalty-free option to establish a
pharmaceutical collaboration with Exelixis regarding a Selected Cognate Target,
Selected Non-Cognate Target, or A List Reserved Target that has a human
orthologue, provided that Bayer has a pharmaceutical division or Affiliate at
the time of exercise of the option.  If Bayer wishes to exercise this option, it
shall notify Exelixis in writing within (i) [ * ], (ii) [ * ], or (iii) [ * ].
Such notification shall identify the Selected Cognate Target, Selected Non-
Cognate Target or A List Reserved Target and the disease area in which it is
interested in collaborating with Exelixis.  Provided Exelixis does not then have
a pre-existing obligation that would prevent it from collaborating with Bayer
with respect to such Target and such disease area, Exelixis and Bayer shall have
[ * ] (or longer upon mutual agreement) following receipt of such notification
to negotiate and enter into a collaboration agreement regarding such Target and
such disease area.  During the [ * ] period Exelixis will not [ * ].

  8.10  Use of Targets in the Field of Animal Health.

        (a) Exelixis and Bayer shall have co-exclusive rights with the right to
sublicense as permitted under Section 4.3 to pursue Unselected Non-Cognate
Targets in the field of animal health (which is part of the Field of Use).
Exelixis and Bayer may also perform Independent Research upon such Targets.

        (b) Bayer shall have exclusive rights (with the right to sublicense) to
pursue Cognate Targets, and A List Reserved Targets, in the field of animal
health (which is part of Field of Use).  Exelixis may perform research in the
field of animal health upon such Targets as follows:  Exelixis shall not begin
work on any genetic entry point that, at such time, is a Cognate Target, or an A
List Reserved Target.  If Exelixis discovers a Target during research that is at
such time a Cognate Target or an A List Reserved Target, it can reveal the
identity of such Target to its Third Party collaborator but cannot perform
further work upon such Target in the field of animal health.

        (c) Commencing [ * ] after the delivery of an LLC Assay directed at a
Selected Non-Cognate Target, Exelixis shall have the right (with the right to
sublicense as permitted under Section 4.3) to pursue such Selected Non-Cognate
Target in the field of animal health (which is part of the Field of Use),
provided that Bayer is not then developing an animal health product based on
such Target and further provided that any Exelixis collaboration with a Third
Party regarding such Selected Non-Cognate Target is subject to approval by Bayer
if [ * ], and [ * ].  Exelixis and Bayer may also perform Independent Research
upon such Targets.

   8.11 Independent Research. Subject to Sections 8.1, 8.2, 8.5, 8.7 or as
otherwise set out in this Agreement, Bayer, Exelixis and the LLC may each
perform Independent Research during the Research Term.

9. Payments

   9.1  License Fee And Research Commitment Fee.  The LLC shall pay Exelixis a
license fee of $10,000,000 and a separate research commitment fee of $10,000,000
(for aggregate payments under this Section 9.1 of $20,000,000). Exelixis shall
invoice the LLC (and send a copy of the first such invoice to Bayer) for one-
half of each amount on the Effective Date

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and the first anniversary of the Effective Date, and the LLC shall make such
payment within [ * ] thereafter.

  9.2     Research Funding. From the Effective Date until the end of the
Research Term, Exelixis will invoice the LLC (and send a copy of the first such
invoice to Bayer) for and the LLC will make within [ * ] thereafter quarterly
advance payments to Exelixis sufficient to pay for the number of Specified FTEs
(as defined in Section 2.5(a)) then performing Research under this Agreement
multiplied by the then current Annual FTE Rate.  In any event, for each calendar
quarter, the amount of research funding provided by the LLC to Exelixis shall be
not less than one-quarter of the amount calculated in Section 2.5(a) and shall
only exceed [ * ] in the event that the LLC commits to provide more than [ * ]
in Research funding in the applicable Contract Year as set forth in Section
2.5(a).

  9.3     Milestone Payments.  Commencing on the Effective Date, Bayer shall pay
the LLC the following amounts within [ * ] after the LLC's invoice following the
occurrence of each of the events specified below:

          (a) [ * ] upon (i) [ * ], (ii) [ * ] or (iii) [ * ];

          (b)       [ * ] upon [ * ];

          (c)       [ * ] upon [ * ]; and

          (d)       [ * ] upon [ * ].

  9.4     Premium Fee Payments.

          (a) Bayer Products. Bayer shall pay the LLC a running premium fee of
[ * ] on the aggregate Net Sales of Bayer Products in addition to amounts
payable above. For each Bayer Product, Bayer's obligations to pay premium fees
will expire on a country-by-country basis on the later of: (i) [ * ] or (ii)
[ * ]. After the expiration of Bayer's premium fee obligation hereunder on a
Bayer Product in a particular country, the license set forth in Section 11.5
with respect to such Bayer Product in such country shall continue in force
perpetually with no further premium fee or other payment obligations.

          (b) Exelixis Agrochemical Products. Exelixis shall pay the LLC a
running premium fee of: [ * ] from such Exelixis Agrochemical Product. Exelixis'
obligations to pay premium fees will expire on a country-by-country basis on the
later of: (A) [ * ] or (B) [ * ]. After the expiration of Exelixis' premium fee
obligation hereunder on an Exelixis Agrochemical Product in a particular
country, the license set forth in Section 11.3 with respect to such Exelixis
Agrochemical Product in such country shall continue in force perpetually, with
no further premium fee or other payment obligations.

          (c) Exelixis Human Health Products. Exelixis shall pay the LLC a
running premium fee of the lesser of [ * ] on the aggregate Net Sales of each
Exelixis Human Health Product or [ * ] of Exelixis' sublicensing income from
such Exelixis Human Health Product. Exelixis' obligations to pay premium fees
will expire, on a country-by-country basis on the later

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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of: (i) [ * ] or (ii) [ * ]. After the expiration of Exelixis' premium fee
obligation on an Exelixis Human Health Product in a particular country, the
license set forth in Section 11.3 with respect to such Exelixis Human Health
Product in such country shall continue in force perpetually, with no further
premium fee or other payment obligations.

     (d) Combination Products.  If a Product contains a Collaboration Compound,
an Exelixis Human Health Compound or Exelixis Agrochemical Compound combined as
a single product with one or more other active ingredients (a "Combination
Product"), then Net Sales of such Combination Product for premium fee purposes
under Section 9.4 shall be calculated as follows:  the Net Sales of the
Combination Product shall be calculated in accordance with the definition of Net
Sales under Section 1.47, and then such Net Sales shall be adjusted on a
country-by-country basis as follows:

        (i)   The Net Sales of such Combination Product shall be multiplied by
the fraction A/(A+B), where A is [ * ]; or

        (ii)  If the [ * ] is not available on an independent basis, the Net
Sales of such Combination Product shall be multiplied by a percentage,
determined by mutual agreement of the Parties, which represents [ * ].

        (iii) In the case a synergistic effect of at least [ * ] times
results from the combination of active ingredients in the sold Combination
Products based on evidence on the active ingredients, the Party paying premium
fees for such Product shall give the Party or Parties to whom premium fees are
due notice thereof.  The relevant Parties shall promptly after such notice meet
to negotiate and agree in good faith upon a commercially reasonable adjustment
of Net Sales for such Combination Product.  Such adjustment shall be based on a
reasonable measure, as agreed by the relevant Parties in good faith, of the
economic value of the contribution of the Collaboration Compound, Exelixis Human
Health Compound or Exelixis Agrochemical Compound as compared to the economic
value of the contribution of the other active ingredient(s) in such Combination
Product.

  9.5     Reports on Payments.  After the first commercial sale of a Product on
which payments are to be made by Bayer or Exelixis hereunder, the Party with a
payment obligation shall make quarterly written reports to the other Parties
within [ * ] after the end of each calendar quarter, stating in each such
report, separately for each selling Party and each of its Affiliates and
sublicensees, the number, description, and aggregate Net Sales, by country, of
each Product sold during the calendar quarter upon which a payment is to be made
under Section 9.4 above.  Subject to any reductions permitted pursuant to the
express terms of this Agreement, concurrently with the making of such reports,
the Party with the payment obligation shall deliver such payment to the Party or
Parties entitled to such payment.

  9.6     Payment Method.  All payments due under this Agreement shall be
noncreditable and nonrefundable, except as to errors, and as to any amounts
disputed in good faith and determined not to have been due or agreed by the
relevant Parties not to be due, and shall be made by bank wire transfer in
immediately available funds to an account designated by the LLC.  All payments
hereunder shall be made in United States dollars.

[*]=CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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  9.7     Place of Payments and Currency Conversions.  If any currency
conversion is required in connection with the calculation of payments hereunder,
such conversion shall be made using the selling exchange rate for conversion of
the Wall Street Journal for the last business day of the calendar quarter to
which such payment pertains.  If at any time legal restrictions prevent the
prompt remittance of any payments owed on Net Sales in any jurisdiction, Bayer
or Exelixis may make such payments by depositing the amount thereof on local
currency in a bank account or other depository in such country in the name of
the LLC.  Bayer or Exelixis shall promptly notify the LLC in writing, of the
circumstances leading to such deposit and, at the LLC's request, cooperate with
the LLC to repatriate such amounts.

  9.8     Records; Inspection.

         (a) Bayer and Exelixis and their Affiliates and sublicensees shall keep
complete, true and accurate books of account and records for the purpose of
determining the payments to be made under this Agreement.  Such books and
records shall be kept at the principal place of business of such Party, as the
case may be, for at least [ * ] years following the end of the calendar quarter
to which they pertain.

         (b) Such records will be open for inspection during such [ * ] year
period by a public accounting firm to whom Bayer or Exelixis, as applicable, has
no reasonable objection, solely for the purpose of verifying payment statements
hereunder. Such inspections may be made not more than once each calendar year,
at reasonable times and on reasonable prior written notice. Inspections
conducted under this Section 9.8 shall be at the expense of the requesting
Party, unless a variation or error producing an increase exceeding five percent
(5%) of the amount stated for any period covered by the inspection is
established in the course of any such inspection, whereupon all costs relating
to the inspection for such period and the full amount of any unpaid amounts that
are so discovered will be paid promptly by Bayer or Exelixis, as applicable.

         (c) All information concerning payments and reports, and all
information learned by a Party in the course of any audit or inspection shall be
subject to the confidentiality provisions set forth in Article 18 of the
Operating Agreement. The public accounting firm employees shall sign customary
confidentiality agreement as a condition precedent to their inspection and shall
report to the LLC only that information which would be contained in a properly
prepared payment report by Bayer or Exelixis, as applicable.

         (d) Upon request and subject to confidentiality, any Party shall
provide a written explanation of the discovery and development of any compound
that the requesting Party reasonably suspects may be a Collaboration Compound,
Exelixis Agrochemical Compound or Exelixis Human Health Compound. If the Parties
cannot agree within [ * ], the requesting Party shall: (i) engage an
independent, mutually acceptable technical consultant within [ * ] who is bound
by an appropriate confidentiality agreement to review the source documents for
such discovery and development and determine whether the compound is royalty-
bearing to the LLC, (ii) in the event that no mutually agreeable technical
consultant is found, each Party may engage its own technical consultant within
such [ * ] period and those two consultants shall pick within [ * ] days
thereafter a third consultant to perform the review and make such determination,
or (iii)

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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be deemed to have agreed that the compound in question is not royalty-bearing to
the LLC. The Party whose view is contrary to the decision of the consultant
shall bear the cost of such review.

  9.9     Withholding Taxes.

          (a) Any Party with a premium fee payment obligation under this
Agreement shall have the right to deduct from the premium fee payments the tax
which a receiving Party is liable to pay thereon under the tax law of the
country from which such payment is being made. The party receiving such payment
shall immediately be sent a tax receipt certifying the payments of the tax, so
that such receiving Party may use it for claiming a credit on the tax payable by
it in its own country. No deduction shall be made if the receiving Party
furnishes a document from the tax authorities of the country from which such
payment is being made by the time of the payment of the premium fees certifying
that the premium fees are exempt from withholding.

          (b) German value added tax (VAT) will be administered by Bayer for the
LLC. The LLC will not invoice any VAT to Bayer.

          (c) Each Party undertakes to cooperate with the other Parties to
achieve lawful tax arrangements which are most favorable for all Parties,
without prejudice to the rights or treatment of any one Party.

  9.10    Subscription Fees. Commencing on the Effective Date, LLC may license
the Sequence Database to Third Parties.

  9.11    Relationship To Licenses.  The premium fee payments provided for
herein are in consideration of the various services, covenants, allocations of
rights, and grants of licenses set forth in this Agreement.  Such premium fees
shall be paid regardless of whether the recipient of such payment then possesses
intellectual property which covers the Product which is the subject of the
premium fee payment, and similarly, such payments shall expire at the end of the
term set forth in Section 9.4(a), 9.4(b), or 9.4(c), respectively, even if the
Party previously receiving such payments continues to hold intellectual property
which covers such Product.

  9.12    Late Payment Penalty.  Any payment due under this Article 9 that is
not paid by [ * ] after the payment's due date shall accrue interest, which must
be paid by the Party with the payment obligation to the recipient Party, on a
daily basis at a rate equal to [ * ] (or the maximum amount permitted by law, if
less), from the date first owed until paid.

10.  Inventions and Patents

     10.1    Ownership of Research Intellectual Property.

             (a) Bayer shall own the entire right, title and interest in and to
any and all inventions, developments, results, know-how and other Information,
and all intellectual property relating thereto, made solely by Bayer and its
employees or agents and arising from work performed pursuant to this Agreement
after the Effective Date, and Patents covering such intellectual property.

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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      (b) The LLC shall own the entire right, title and interest in and to any
and all inventions, developments, results, know-how and other Information (other
than Core Improvements), and all intellectual property relating thereto, made
solely by the Dedicated FTEs and Shared FTEs and arising from work performed
pursuant to this Agreement after the Effective Date, and Patents covering such
intellectual property.

      (c) Exelixis shall own the entire right, title and interest in and to any
and all inventions, developments, results, know-how and other Information, and
all intellectual property (including Patents) relating thereto, and made solely
by employees or agents of Exelixis other than Dedicated and Shared FTEs and
arising from work performed pursuant to this Agreement after the Effective Date,
and Patents covering such intellectual property.

      (d) Exelixis shall own the entire right, title and interest in and to any
and all inventions, developments, results, know-how and other Information
relating to Core Improvements, and all intellectual property relating thereto,
and Patents covering such intellectual property.

      (e) Subject to the provisions of Section 10.3(d), the Joint Inventions and
Joint Patents shall be jointly owned by the Parties that made, whether directly
or through their employees or agents (which, in the case of the LLC, shall be
the Dedicated FTEs and the Shared FTEs), such Joint Inventions and Joint
Patents.  Each inventing Party shall each own an undivided one-half or one-third
(if the number of inventing Parties is two or three, respectively) interest in
and to such Joint Inventions or Joint Patents.  Each joint owner shall have the
right to grant licenses under or to assign its interest in, such Joint Patents,
only to the extent as provided for in this Agreement or as otherwise agreed in
writing by the other joint owner(s).  Each Party shall have the right to grant
licenses under its interest in any Joint Patent to the other Parties and their
Affiliates.  Bayer may freely grant a license to Bayer AG or an Affiliate of
Bayer under or assign to Bayer AG or an Affiliate of Bayer, Bayer's ownership
interest in any Joint Patent.  All questions concerning inventions and/or
inventorship and/or the construction of or effect of Patents shall be decided in
accordance with the laws relating to inventorship and other relevant laws of the
country in which the particular Patent has been filed or granted, as the case
may be.

      (f) The Sequence Library and the Sequence Database will be owned
exclusively by the LLC, subject to the licenses granted herein to Exelixis and
Bayer.

 10.2 Disclosure of Patentable Inventions.  In addition to the disclosures
required under Sections 2.6 and 7.3, each Party shall submit a written report to
the other Parties within [ * ] after the end of each quarter describing any
invention arising during the prior quarter in the course of the Research done
during the Research Term which it believes may be patentable.  The LLC and
Exelixis shall provide Bayer with drafts of any patent application which
discloses an LLC Assay or Target prior to filing, allowing adequate time for
review and comment by Bayer if possible; provided, however, that the LLC and/or
Exelixis shall not delay the filing of any patent application pursuant to
Section 10.3 below.

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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  10.3    Patent Prosecution and Maintenance; Abandonment.

          (a)       Exelixis Patents.

                    (i)  Exelixis shall retain control over, and shall bear all
expenses related to, the filing, prosecution, and maintenance of all Exelixis
Patents; except as set forth in Section 10.3(a)(ii).

                    (ii) If Exelixis elects to cease prosecution of or not
maintain any Exelixis Patent that [ * ], Exelixis shall notify [ * ] in writing
not less than [ * ] before any relevant deadline. [ * ] shall have the right to
assume control over the prosecution or maintenance of such Exelixis Patent,
provided that [ * ] shall bear all expenses related thereto; but title to any
such Exelixis Patent shall remain in Exelixis.

          (b)       LLC Patents.

                    (i) The LLC shall retain control over, and shall bear all
expenses related to, the filing, prosecution, and maintenance of all LLC
Patents, except as set forth in Section 10.3(b)(ii).

                    (ii) If the LLC elects to cease prosecution of or not
maintain any LLC Patent, the LLC shall notify Bayer and Exelixis in writing not
less than [ * ] before any relevant deadline. If Bayer gives notice to Exelixis
within [ * ] of notification from the LLC, Bayer shall have the right to assume
control over the prosecution or maintenance of such LLC Patent, provided that
Bayer shall bear all expenses related thereto; but title to any such LLC Patent
shall remain in the LLC. If Bayer does not give such notice, Exelixis shall have
the right to assume control over the prosecution or maintenance of such LLC
Patent, provided that Exelixis shall bear all expenses related thereto; but
title to any such application or patent shall remain in the LLC.

          (c) Bayer Patents. Bayer shall retain control over, and shall bear all
expenses related to, the filing, prosecution and maintenance of all Bayer
Patents.

          (d) Joint Patents.

              (i)  Control. The Parties or Party at the time owning any Joint
Patent shall jointly or solely, as applicable, control the filing, prosecution,
and maintenance of such Joint Patent.

              (ii) Expenses and Relinquishment of Ownership.

                   (1) Bayer shall bear all expenses related to the filing,
prosecution, and maintenance of all Joint Patents at the time jointly owned by
Bayer. If Bayer elects to not pay any expense related to such Joint Patent,
Bayer shall notify the other joint owner(s) of such Joint Patent in writing not
less than two (2) months before any relevant deadline, and such notification
shall constitute a relinquishment by Bayer of its ownership interest in such
Joint Patent, which shall thereafter be jointly or solely owned by the remaining
joint owner(s).

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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                   (2) The LLC shall bear all expenses related to the filing,
prosecution, and maintenance of all Joint Patents at the time jointly owned by
the LLC and not jointly owned by Bayer. If the LLC elects to not pay any expense
related to such Joint Patent, the LLC shall notify Exelixis in writing not
less than one (1) month before any relevant deadline, and such notification
shall constitute a relinquishment by the LLC of its ownership interest in such
Joint Patent, which shall thereafter be solely owned by Exelixis.

                   (3) Each of the LLC and Exelixis shall bear all expenses
related to the filing, prosecution, and maintenance of all Joint Patents of
which it is then a sole owner.

     10.4    Confidential Treatment. All information disclosed under Sections
10.2 and 10.3 shall be treated as confidential and subject to the terms set
forth in Article 18 of the Operating Agreement.

11.  Licenses

     11.1    LLC Research License.

             (a) Bayer hereby grants the LLC a fully paid-up, nonexclusive,
worldwide license, with the right to sublicense only for LLC Assay development
purposes, under all relevant Bayer Know-How and Bayer Patents to conduct its
Research activities within the Research Field under this Agreement, including
without limitation making and using making and using the Bayer Pesticides and
the LLC Assays for Research purposes and making the Sequence Library. Such
license shall expire at the end of the Research Term unless it is continued
pursuant to Section 14.5. This license does not grant the LLC any
commercialization rights, i.e. to make or use Bayer Compounds or Collaboration
Compounds.

             (b) Exelixis hereby grants the LLC a fully paid-up, worldwide
license, with the right to sublicense only for LLC Assay development purposes,
under all relevant Exelixis Patents and Exelixis Know-How to perform Research
activities within the Research Field under this Agreement. Such license shall be
exclusive, but shall expire at the end of the Research Term unless such license
is continued thereafter on a non-exclusive basis pursuant to Section 14.4.

     11.2    Bayer Research License.

             (a) Exelixis hereby grants the LLC a non-exclusive, fully paid-up,
worldwide license (with the right to sublicense only to Bayer) under all
relevant Exelixis Know-How and Exelixis Patents that are necessary to enable
Bayer to conduct Bayer's permitted Research and Development activities hereunder
in the Field of Use to identify and select Collaboration Compounds, including
the right to make and use the Selected Assays within the Field of Use for the
sole purpose of identifying Collaboration Compounds. Subject to Section 4.5, the
LLC may not sublicense to Bayer the right: (i) to make or use Targets pursued by
the LLC or Exelixis or a licensee of either of them, pursuant to Section 4.3 or
5.3, (ii) to make or use an LLC Assay that is not a Selected Assay, (iii) to use
a Selected Assay outside of the Field of Use, or (iv) except with the written
consent of Exelixis, any right to practice Third Party technology which has been
licensed to Exelixis.

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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     (b) Except to the extent of the limitations set forth in the final sentence
of Section 11.2(a), the LLC hereby grants Bayer a fully paid-up, worldwide
sublicense under the license set forth in Section 11.2(a).

     (c) The LLC hereby grants Bayer a non-exclusive, fully paid-up, worldwide
license under all relevant LLC Know-How and LLC Patents to enable Bayer to
conduct Bayer's Research and Development activities hereunder in the Field of
Use to identify and select Collaboration Compounds, including the right to make
and use the Selected Assays for the sole purpose of identifying Collaboration
Compounds.  Subject to Section 4.5, this license does not grant Bayer the right:
(i) to make or use Targets pursued by the LLC or Exelixis or a licensee of
either of them, pursuant to the Section 4.3 or 5.3, (ii) to make or use an LLC
Assay that is not a Selected Assay, or (iii) to use a Selected Assay outside of
the Field of Use.  Bayer may use the following Confidential Information of the
LLC use in its Independent Research in any field, provided that Bayer does not
[*] using such Confidential Information: [ * ]. Bayer may petition the LLC at
any time during the term of this Agreement to add certain Confidential
Information of the LLC to the foregoing list. Such addition shall only be made
upon the mutual written agreement of all of the Parties.

     (d) Bayer may not sublicense its rights under the license and sublicense
granted in this Section 11.2, except to Affiliates or Third Party contractors
performing such Research and Development activities solely on Bayer's behalf.

11.3 Licenses to Exelixis.

     (a) Bayer hereby grants to the LLC a fully paid-up, worldwide non-exclusive
license, with the right to sublicense only to Exelixis, under all relevant Bayer
Know-How and Bayer Patents that arise from work performed under this Agreement
solely for Exelixis to conduct its permitted activities in research, development
and commercialization (other than Independent Research) in the Field of Use and
outside the Field of Use under this Agreement.  This license does not grant
Exelixis any rights to make or use Bayer Pesticides, Bayer Compounds,
Collaboration Compounds or LLC Compounds.

     (b) The LLC hereby grants Exelixis a fully paid-up, worldwide exclusive
sublicense under the license granted in Section 11.3(a), solely for Exelixis to
conduct its permitted activities in research, development and commercialization
(other than Independent Research) in the Field of Use and outside the Field of
Use under this Agreement.  Exelixis may grant sublicenses under this sublicense
only to permitted Third Party collaborators of Exelixis and only for the
purposes of collaboratively pursuing Exelixis' permitted research, development
and commercialization activities in the Field of Use and outside the Field of
Use under this Agreement.  This license does not grant Exelixis any rights to
make or use Bayer Pesticides, Bayer Compounds, Collaboration Compounds or LLC
Compounds.

     (c) Except to the extent of the of the exclusivity specified in this
Agreement, the LLC hereby grants Exelixis a fully paid-up, worldwide license,
with the right to sublicense, under all relevant LLC Patents and the LLC Know-
How to perform research, development and commercialization activities outside
the Research Field.  Such license shall be exclusive except as to Bayer's and
the LLC's permitted uses of Selected Assays, Bayer Assays and LLC Assays

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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under this Agreement. Such license shall not convey any rights to make, use or
sell Bayer Pesticides, Bayer Compounds, Collaboration Compounds or LLC
Compounds. Exelixis may use the following Confidential Information of the
LLC in Exelixis' Independent Research in any field, provided that Exelixis
does not [ * ] using any of the following LLC Confidential Information: [ * ].
Exelixis may petition the LLC at any time during the term of this Agreement
to add certain Confidential Information of the LLC to the foregoing list.
Such addition shall only be made upon the mutual written agreement of all of
the Parties.

       (d) The LLC hereby grants Exelixis an exclusive, fully worldwide license,
with the right to sublicense, under all relevant LLC Patents and LLC Know-How to
perform Research, Development and commercialization activities in the Research
Field as permitted under Sections 4.3 and 4.6.

  11.4 Development License.

       (a) Exelixis hereby grants the LLC a worldwide, exclusive license (with
the right to sublicense only to Bayer) under all relevant Exelixis Know-How and
Exelixis Patents for Bayer to conduct Development of Collaboration Compounds.

       (b) The LLC hereby grants Bayer a worldwide, exclusive sublicense under
the license set forth in Section 11.4(a) (with the right for Bayer further to
sublicense) for Bayer to conduct Development of Collaboration Compounds.

       (c) The LLC hereby grants to Bayer a worldwide, exclusive license (with
the right to sublicense) under all relevant LLC Know-How and LLC Patents to
conduct Development of Collaboration Compounds.

       (d) Bayer may not sublicense its rights under the license and sublicense
granted in Section 11.4(b) except to Affiliates or Third Party contractors
performing such Development activities solely on Bayer's behalf.

  11.5 Commercialization License.

       (a) The LLC hereby grants Bayer and its Affiliates a worldwide, exclusive
license (with the right to sublicense) under all relevant LLC Know-How and LLC
Patents, to the extent required for Bayer, its Affiliates and sublicensees to
make, have made, use, have used, import, have imported, offer to sell, sell and
have sold Bayer Products in the Field of Use.

       (b) Exelixis hereby grants Bayer and its Affiliates a worldwide,
exclusive license (with the right to sublicense) under all relevant Exelixis
Know-How and Exelixis Patents, to the extent required for Bayer, its Affiliates
and sublicensees to make, have made, use, have used, import, have imported,
offer to sell, sell and have sold Bayer Products in the Field of Use.

  11.6 Joint Patents.  Each Party shall have a worldwide, co-exclusive right
to practice the Joint Patents in which it has an ownership interest arising from
the work under this Agreement without any duty to account.  Except for licensing
rights and assignment rights expressly granted herein, such right shall not
include a right to grant sublicenses or assignments

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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of ownership interest (other than from Bayer to Bayer AG or a Bayer Affiliate),
except with the mutual consent of all of the owners.

  11.7    Sublicenses of Third Party Technology.  To the extent that any of the
licenses granted herein include sublicenses of technology licensed from a Third
Party to a Party, each such sublicense is subject to the terms of the license
agreement between such Party and such Third Party.

  11.8    Negative Covenant.  Each Party agrees that it will not practice
technology licensed to it under this Agreement outside the scope of the licenses
granted herein.  Except as specifically provided herein, no Party grants to the
other Parties any license, express or implied, to any technology, know-how,
inventions, improvements, trade secrets or materials that it possesses. Upon the
termination of the Research, neither party shall have any implied license to any
technology, know-how, inventions, improvements, trade secrets or materials of
the other Party except as specifically provided herein.

  11.9    Certain Commitments As To Licenses.  Each Party will use its
respective commercially reasonable diligent efforts during the Research Term
(which efforts will not, absent express prior written agreement of the relevant
Party hereto, require any Party to pay additional money, whether by increased
royalty rates or other payments, or grant additional rights, to any Third Party)
as follows:

          (a) Bayer Commitments. On the part of Bayer, to provide, with respect
to licenses as to which Bayer or its Affiliates become licensees after the
Effective Date within the Research Field, and/or within such areas outside of
the Research Field in which the LLC has, pursuant to Section 2.4 of the
Operating Agreement, designated to be of interest to the LLC, for such license
rights to be sublicensed to the LLC, with or without a further right of the LLC
to sublicense them to Exelixis; and

          (b) Exelixis Commitments. On the part of Exelixis, to provide, with
respect to licenses as to which Exelixis or its Affiliates become licensees
after the Effective Date within the Research Field, and/or within such areas
outside of the Research Field in which the LLC has, pursuant to Section 2.4 of
the Operating Agreement, designated to be of interest to the LLC, for such
license rights to be sublicensed to the LLC, with or without a further right of
the LLC to sublicense them to the Bayer; and

          (c) LLC Commitments. On the part of the LLC, provide, with respect to
licenses, other than from Bayer or Exelixis, as to which the LLC becomes a
licensee after the Effective Date within the Research Field, and/or within such
areas outside of the Research Field in which the LLC has, pursuant to Section
2.4 of the Operating Agreement, designated to be of interest to the LLC, for
such license rights to be sublicensed by the LLC to Bayer and Exelixis.

12.  Enforcement of Patent Rights

     12.1 General. Each Party will provide notice to the other Parties of any
infringement of an Exelixis Patent, LLC Patent, Bayer Patent, or Joint Patent.
In any action to enforce any of such Patents against alleged infringement, the
Party or Parties prosecuting such action shall bear

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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all costs and expenses thereof, and the other Parties will provide reasonable
assistance, if requested, in such action at the expense of the Party or Parties
prosecuting such action.

  12.2    Exelixis Patents.  Exelixis shall have the first right, but not the
obligation, to enforce the Exelixis Patents (other than the Joint Patents)
against any infringer.  Any amounts recovered by Exelixis from an infringer of
such Patents shall be retained by Exelixis.  If Exelixis does not exercise such
right within [ * ] after notice of infringement of an Exelixis Patent (other
than a Joint Patent) [ * ], then [ * ] has the right to enforce such Exelixis
Patent in the name of Exelixis.  Any amounts recovered by [ * ] from an
infringer of such Exelixis Patent shall first be applied to reimburse [ * ]
costs and expenses of the action, and any remaining amounts shall be treated as
revenue of [ * ].

  12.3    LLC Patents.  The LLC shall have the first right, but not the
obligation, to enforce the LLC Patents (other than the Joint Patents) against
any infringer.  If the LLC does not exercise such right within [ * ] after
notice of infringement of an LLC Patent, then Exelixis and Bayer shall each have
the right, but not the obligation, to enforce such LLC Patent in the name of the
LLC, and shall agree on which of them shall enforce such LLC Patent.  Any
amounts recovered by an enforcing Party from an infringer of such LLC Patent
shall first be applied to reimburse such enforcing Party's costs and expenses of
the action, and any remaining amounts shall be treated as revenue of [ * ].

  12.4    Bayer Patents.  Bayer shall have the sole right, but not the
obligation, to enforce the Bayer Patents (other than the Joint Patents) against
any infringer.  Any amounts recovered by Bayer from an infringer of such Patents
shall be retained by Bayer.

  12.5    Joint Patents.

          (a) In the case of a Joint Patent that is at the time jointly owned by
two or more Parties, each then jointly owning Party shall have the right, but
not the obligation, to enforce such Joint Patent in the name of the then joint
owners, and the then jointly owning Parties shall agree on which of them shall
enforce such Joint Patent. Any amounts recovered by an enforcing Party from an
infringer of such Joint Patent shall first be applied to reimburse such
enforcing Party's costs and expenses of the action, and any remaining amounts
shall be divided equally among those Parties that had agreed to accept the
obligation of enforcement.

          (b) In the case of a Joint Patent that has become solely owned by a
Party, that Party shall have the right, but not the obligation, to enforce such
Patent against any infringer. Any amounts recovered by such Party from an
infringer of such Patent shall be retained by such Party.

13.  Indemnification

     13.1    Collaboration Compounds and Products.  Subject to compliance with
Section 13.3, Bayer shall indemnify, defend and hold harmless Exelixis, its
Affiliates, the LLC and their respective agents and employees, from and against
any and all losses, liabilities, damages, costs, fees and expenses, including
reasonable legal costs and attorneys' fees ("Losses") resulting from a Third
Party claim, suit or action concerning and to the extent attributable to a
Collaboration

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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Compound, a Bayer Product or the permitted use of a Bayer Pesticide, but
excluding any Losses resulting from the gross negligence or intentionally
wrongful act or omission of the LLC, Exelixis, its Affiliates or sublicensees or
any of their employees or agents.

     13.2 Exelixis Products and Personnel.  Subject to compliance with Section
13.3, Exelixis shall indemnify, defend and hold harmless Bayer, its Affiliates,
the LLC and their respective agents and employees, from and against any and all
losses, liabilities, damages, costs, fees and expenses, including reasonable
legal costs and attorneys' fees ("Losses") resulting from (a) a Third Party
claim, suit or action concerning and to the extent attributable to an Exelixis
Agrochemical Compound, Exelixis Human Health Compound or a Product containing
such a Compound, and (b) a Third Party claim, suit or action arising from
Exelixis' employment relationship with personnel providing FTE services under
this Agreement (including without limitation claims based on personal injury or
unlawful discharge), but in each case excluding any Losses resulting from the
gross negligence or intentionally wrongful act or omission of the LLC, Bayer,
its Affiliates or sublicensees or any of their employees or agents.

     13.3 Indemnity Procedure.  In the event a Party is seeking indemnification
under Section 13.1 or 13.2, the Party seeking indemnification shall inform the
indemnifying Party in writing of a claim as soon as reasonably practicable after
it receives notice of the claim, shall permit the indemnifying Party to assume
direction and control of the defense of the claim (including the right to settle
the claim solely for monetary consideration), and, at the expense of the
indemnifying Party, shall cooperate as reasonably requested in the defense of
the claim.  Each indemnified Party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying Party if
representation of the indemnified Party by the counsel retained by the
indemnifying Party would be inappropriate due to actual or potential differing
interests among the Parties.  The indemnifying Party may not settle such action
or claim, or otherwise consent to an adverse judgment in such action or claim,
that diminishes the rights or interests of an indemnified Party without the
express written consent of such indemnified Party.

14.  Term of Agreement And Termination

     14.1 Term.  This Agreement shall expire upon the latest of: (a) the end of
Research Term, (b) the expiration of all payment obligations of Bayer and
Exelixis hereunder, and (c) the expiration of all LLC Patents.  Sections 10.1
and 11.6, Articles 13, 14, 15 and 16, and the commercialization licenses set
forth in Sections 11.3 and 11.5 shall survive such expiration.

     14.2 Termination of Research Term. Upon the termination of the Research
Term pursuant to Section 2.1 or 14.7, the licenses granted to the
LLC under Section 11.1 shall terminate.  If such termination of the Research
Term was due to dissolution of the LLC, then Exelixis shall use all unspent
research payments as of the effective date of such termination to wind down the
LLC's Research efforts in an orderly manner with Bayer deemed to have granted an
appropriate license to allow Exelixis to perform such wind down activities. If
such termination of the Research Term was not due to dissolution of the LLC,
then Bayer and the LLC shall have the right to cause Exelixis to perform
continuing research (i.e. Target identification and LLC Assay development)
pursuant to a Research Plan mutually agreed by Bayer and Exelixis for a period
of one (1) year beyond the end of the Research Term to complete the development
of LLC programs under way at the end of the Research Term. If Bayer and the LLC
exercise the aforementioned right, they shall be deemed to have granted
appropriate

[*]=CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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licenses to Exelixis under the Bayer Know-How, Bayer Patents, LLC Know-How and
LLC Patents to enable Exelixis to perform such continuing research; such
licenses shall expire at the end of such one-year period. The number of FTEs to
be supported during such one-year period shall be mutually agreed by Bayer and
Exelixis, and Bayer shall pay Exelixis for such work at the Annual FTE Rate then
in effect. Thereafter, such research shall cease, Bayer's payment obligations
under Section 9.2 shall cease, provided that Bayer shall make all such payments
which had accrued prior to the date of such termination, and each Party's rights
and obligations under this Agreement (other than those limited to the Research
Term) with respect to Targets, LLC Assays, Bayer Assays, LLC Compounds,
Collaboration Compounds, Exelixis Agrochemical Compounds, Exelixis Human Health
Compounds, Products and Exelixis' rights outside the Research Field shall
continue as specified in this Agreement. This Agreement shall continue in effect
until the date set forth in Section 14.1 or until terminated pursuant to Section
14.3.

  14.3    Material Breach.

          (a) If any Party believes that another Party is in material breach of
this Agreement, such Party (the "Non-Breaching Party") shall give notice of such
alleged breach to each Party which it believes to be in material breach (the
"Breaching Party"), with a concurrent notice to the other Party. Such notice
shall state with specificity the nature of the breach. If the Breaching Party
either cures such breach within sixty (60) days of such notice or, if it is
not possible to cure such breach within such sixty (60) day period, the
Breaching Party commences diligent, good faith efforts to cure such breach
during such sixty (60) day period and continues using such efforts for a prompt
and successful cure of the breach, then the Non-Breaching Party shall have no
further remedy except the right to recover money damages, if any, through
arbitration pursuant to Article 17 of the Operating Agreement and to protect its
rights in Confidential Information and intellectual property, either through
arbitration or judicial relief.

          (b) If the Breaching Party does not cure the alleged breach as
provided in Section 14.3(a), the Non-Breaching Party shall have the right to
commence an arbitration pursuant to Article 17 of the Operating Agreement to
either (i) seek specific performance of this Agreement and/or recover money
damages, or (ii) seek to terminate this Agreement and exercise the rights of a
non-defaulting Party set forth in Section 14.2(c) or 14.2(d) of the Operating
Agreement (termination and dissolution of the LLC or purchase of the interest of
the Defaulting Party). If the arbitrator determines that a material breach of
this Agreement has occurred, the arbitrator shall order specific performance
and/or the payment of money damages, unless the arbitrator determines either
that such relief would be inadequate to compensate the Non-Breaching Party for
the harm resulting from the breach or that in view of the circumstances then
prevailing, the Breaching Party cannot provide adequate assurances that if this
Agreement and the LLC were to continue, the Non-Breaching Party would in the
future receive the benefits of its bargain set forth herein and therein. If the
arbitrator makes a determination that specific performance and/or money damages
would be inadequate or that the Breaching Party cannot provide such adequate
assurances, then the Non-Breaching Party may terminate this Agreement and make
either of the elections set forth in Section 14.2(c) or 14.2(d) of the Operating
Agreement.

  14.4    Acquisition Of The LLC By Bayer.  Under certain circumstances set
forth in Article 13 of the Operating Agreement, Bayer has the right to purchase
Exelixis' ownership

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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interest in the LLC. In the event Bayer concludes such a transaction, the
following terms and conditions shall apply. In any appraisal of the value of the
LLC for purposes of establishing the price of any such transaction, the
appraiser shall value the LLC on the basis that the terms and conditions set
forth in this Section 14.4 shall be in effect as of the closing of such
acquisition.

     (a) Bayer's acquisition of Exelixis' ownership interest in the LLC shall
terminate any right of Exelixis to receive a portion of the premium fees payable
by Bayer under Section 9.4(a).  However, the premium fee obligations of Exelixis
set forth in Sections 9.4(b) and 9.4(c) shall continue in effect.

     (b) Exelixis shall provide continuing Research services to the LLC for a
period of twelve (12) months following the closing of Bayer's acquisition of
Exelixis' interest in the LLC, provided that (i) such work is limited to a
continuation of projects underway at the time of such closing, or related work
agreed to by Exelixis, (ii) Bayer or the LLC pays Exelixis for its FTEs engaged
in such transitional work at the Annual FTE Rate then in effect, and (iii) the
level of FTE effort devoted by Exelixis to the LLC research shall wind down in
an orderly manner mutually agreed in writing by Bayer and Exelixis.

     (c) The ownership and license rights applicable to all Assays, Compounds,
Products, and Targets in existence immediately prior to the closing of such
transaction shall continue without modification, except that the license granted
to the LLC in Section 11.1(b): (i) shall continue on an exclusive basis for
twelve (12) months following the closing of such transaction, following which it
shall continue perpetually on a nonexclusive basis, subject to the modification
set forth in the following sentence, and (ii) may be sublicensed by the LLC to
Bayer and its Affiliates (but not to any Third Party). At the end of the
exclusive period described in the preceding clause (i), the license from
Exelixis to the LLC shall be modified to exclude any license under Third Party
technology licensed to Exelixis and sublicensed to the LLC pursuant to Section
11.1(b). Rights with respect to Targets, assays, compounds and products arising
from the activities of the Parties under this Agreement shall not be affected by
reason of the acquisition by Bayer, except to the extent that the Research Term
shall then be deemed to have ended as of such closing and, accordingly, the
duration of certain provisions of this Agreement will be affected.

     (d) Exelixis shall cooperate reasonably in enabling Bayer and the LLC to
replicate the ability to use the Exelixis technology which was used by the
Dedicated FTEs and Shared FTEs in the performance of Research on behalf of the
LLC in the twelve (12) months prior to the closing of the acquisition by Bayer.
Bayer or the LLC shall bear all costs associated with such replication of
technology and shall reimburse Exelixis for any costs incurred by Exelixis in
that regard (with internal resources to be reimbursed at the Annual FTE Rate
then in effect and out-of-pocket costs which exceed the customary inclusions
within the Annual FTE Rate to be reimbursed at cost). This Section 14.4(d) shall
not require Exelixis to transfer or sublicense to the LLC any licenses to
practice Third Party technology, but Exelixis shall (i) cooperate with the LLC
in approaching any such Third Parties from which Exelixis has licensed
technology used in the Research to seek licenses directly from such Third Party
to the LLC, and (ii) in those cases, if any, where Exelixis holds an exclusive
license with a right of sublicense, Exelixis shall negotiate in good faith to
grant such a sublicense to the LLC on a basis which generates no net profit to
Exelixis and imposes no net cost on Exelixis by reason of such sublicense or as
a result of the LLC's use of such sublicensed technology. By way of example,
under this Section 14.4(d),

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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Exelixis shall cooperate with the LLC in enabling the LLC to purchase equipment
and supplies from Exelixis' vendors, shall share with Exelixis reasonable
quantities of specialty chemicals not readily available from vendors (with
reimbursement of the manufacturing cost of such chemicals), and shall
demonstrate to LLC personnel the use of Exelixis technology.

  14.5    Acquisition Of The LLC By Exelixis.  Under certain circumstances set
forth in Article 13 of the Operating Agreement, Exelixis has the right to
purchase Bayer's ownership interest in the LLC.  In the event Exelixis concludes
such a transaction, the following terms and conditions shall apply.  In any
appraisal of the value of the LLC for purposes of establishing the price of any
such transaction, the appraiser shall value the LLC on the basis that the terms
and conditions set forth in this Section 14.5 shall be in effect as of the
closing of such acquisition.

          (a) Exelixis' acquisition of Bayer's ownership interest in the LLC
shall terminate any right of Bayer to receive a portion of the premium fees
payable by Exelixis under Sections 9.4(b) and 9.4(c). The premium fee
obligations of Bayer set forth in Section 9.4(a) shall continue in effect but
shall be reduced to a rate of [ * ].

          (b) Exelixis shall provide continuing Research services to the LLC for
the benefit of Bayer for a period of up to twelve (12) months following the
closing of Exelixis' acquisition of Bayer's interest in the LLC, provided that
(i) such work is limited to a completion of any LLC Assays already under
development at the time of such closing, (ii) Bayer or the LLC pays Exelixis for
its FTEs engaged in such transitional work at the Annual FTE Rate then in
effect, and (iii) the level of FTE efforts devoted by Exelixis to the LLC
research shall wind down in orderly manner mutually agreed in writing by Bayer
and Exelixis.

          (c) The ownership and license rights applicable to all Assays,
Compounds, Products, and Targets in existence immediately prior to the closing
of such transaction shall continue without modification, except that the license
granted to the LLC in Section 11.1(a): (i) shall continue perpetually on a
nonexclusive basis, subject to the modification set forth in the following
sentence, and (ii) may be sublicensed by the LLC to Exelixis and its Affiliates
(but not to any Third Party). The license from Bayer to the LLC shall be
modified to exclude any license under Third Party technology licensed to Bayer
and sublicensed to the LLC pursuant to Section 11.1(a) and the right to use the
Bayer Pesticides. Rights with respect to Targets, assays, compounds and products
arising from the activities of the Parties under this Agreement shall not be
affected by reason of the acquisition by Exelixis, except to the extent that the
Research Term shall then be deemed to have ended as of such closing and,
accordingly, the duration of certain provisions of this Agreement will be
affected.

  14.6    Acquisition Of The LLC By A Third Party.  The Operating Agreement
requires the approval of Exelixis and Bayer prior to the merger or acquisition
of the LLC by a Third Party.  In the event of such a merger or acquisition,
Exelixis, Bayer and the acquiring Third Party may mutually agree to amend this
Agreement.  If no such mutual agreement is reached, the Research Term will
terminate upon the closing of such merger or acquisition.

  14.7    Termination and Dissolution of the LLC. Under certain circumstances
set forth in Section 12.1 of the Operating Agreement, Exelixis or Bayer has the
right to terminate and dissolve the LLC.  In the event that such termination and
dissolution occurs, the Research Term

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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shall terminate and the terms set forth in Section 14.2 of this Agreement and
12.5 of the Operating Agreement shall apply.

15.  Representations & Warranties

     15.1    Representations and Warranties of Exelixis.

             (a) Exelixis is duly organized and validly existing and in good
standing under the laws of Delaware and has full corporate power and authority
to enter into this Agreement and to carry out the provisions hereof.

             (b) Exelixis is duly authorized to execute and deliver this
Agreement and to perform its obligations hereunder.

             (c) As of the Effective Date, Exelixis [ * ].

             (d) Subsequent to the Effective Date, [ * ].

             (e) Exelixis [ * ].  Exelixis has the rights necessary to grant the
licenses from Exelixis to LLC which are set forth in this agreement.

             (f) Exelixis has determined that as of the Effective Date the value
of the exclusive licenses acquired by Exelixis under this Agreement and the
Operating Agreement does not exceed [ * ].

     15.2    Representations and Warranties of Bayer.

             (a) Bayer is duly organized, validly existing and in good standing
under the laws of Indiana and has full corporate power and authority to enter
into this Agreement and to carry out the provisions hereof.

             (b) Bayer is duly authorized to execute and deliver this Agreement
and to perform its obligations hereunder.

             (c) Bayer has the rights necessary to grant the licenses from Bayer
to LLC which are set forth in this agreement.

             (d) Bayer ha s the rights necessary to grant the licenses set forth
herein to (i) [ * ] and (ii) [ * ].

             (e) Bayer has [ * ].

             (f) Bayer has determined that as of the Effective Date the value of
the exclusive licenses acquired by Bayer under this Agreement and the Operating
Agreement does not exceed [ * ].

[*]=CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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16.  Miscellaneous

     16.1    Dispute Resolution. The dispute resolution procedures set forth in
Article 17 of the Operating Agreement shall apply to all disputes between the
Parties under this Agreement.

     16.2    Confidentiality. The confidentiality provisions set forth in
Article 18 of the Operating Agreement shall apply to all Confidential
Information disclosed by one Party to another Party under this Agreement.

     16.3    Performance By Affiliates. The Parties recognize that portion of
this Agreement may be performed by Affiliates of Bayer or Exelixis, and that
Products may be commercialized by such Affiliates under appropriate agreements.
Each of Bayer and Exelixis hereby guarantees that any of its Affiliates which
participates in the performance of this Agreement or the commercialization of
Products will comply with the terms and conditions of this Agreement. In the
event of any dispute between Bayer or Exelixis and an Affiliate of such other
Party arising from or related to this Agreement, such dispute may be brought
directly against such other Party under this Agreement without any obligation to
first seek to resolve such dispute or exhaust remedies with respect to such
Affiliate.

     16.4    Limitation of Liability. EXCEPT AS SPECIFICALLY PROVIDED IN ARTICLE
13, IN NO EVENT SHALL EITHER PARTY, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS
OR AFFILIATES BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL,
SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, WHETHER BASED UPON A CLAIM OR
ACTION OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER TORT, OR
OTHERWISE, ARISING OUT OF THIS AGREEMENT. For clarification, the foregoing
sentence shall not be interpreted to limit or to expand the express rights
specifically granted in the sections of this Agreement, including without
limitation Article 12.

     16.5    Entire Agreement; Amendment. This Agreement, together with Exhibit
A (which the Parties shall agree upon [ * ] and shall append to this Agreement),
sets forth the agreement among the Parties with respect to the specific subject
matter hereof, and, except as otherwise set forth herein, supersedes and
terminates all prior representations, agreements and understandings among the
Parties regarding the subject matter hereof. No alteration, amendment, change or
addition to this Agreement will be binding upon the Parties unless in writing
and signed by an authorized signatory of each Party.

     16.6    Assignment. Subject to the terms of the Operating Agreement, no
Party may assign or transfer this Agreement or any rights or obligations
hereunder without the prior written consent of the other Parties, except that
(a) a Party may make such an assignment without the other Parties' consent to an
Affiliate or to a successor to all or substantially all of the related business
assets of such Party relating to this Agreement, whether by way of a merger,
sale of stock, sale of assets or other similar transaction; and (b) each of
Bayer and Exelixis may contract to Third Parties any of its marketing and sales
rights with respect to Products, and such contracts shall not be considered
assignment of rights and obligations as provided above.

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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  16.7    Notices. All notices, requests, consents and other communications
hereunder to any Party will be deemed to be sufficient if contained in a written
instrument delivered in person, including delivery by recognized express
courier, fees prepaid, or sent by facsimile transmission or duly sent by first
class registered or certified mail, return receipt requested, postage prepaid,
in each case addressed as set forth below, or to such other address as may
hereinafter be designated in writing by the recipient to the sender pursuant to
this Section 16.7.  All such notices, requests, consents and other
communications will be deemed to have been received in the case of personal
delivery, including delivery by express courier, on the date of such delivery;
in the case of facsimile transmission, on the date of transmission; and in the
case of mailing, on the third day after deposit in the U.S. mail, proper postage
prepaid.

If to Exelixis:     Exelixis Pharmaceuticals, Inc.
                    260 Littlefield Avenue
                    South San Francisco, CA 94080
                    Attention: Chief Executive Officer
                    Facsimile: 650-825-2205

With a copy to:     Cooley Godward LLP
                    Five Palo Alto Square
                    3000 El Camino Real
                    Palo Alto, CA 94306
                    Attention: Robert L. Jones
                    Facsimile: 650-857-0663

If to Bayer:        Bayer Corporation
                    8400 Hawthorne Road
                    Kansas City, MO 64120-0013
                    Attention: William G. Ferguson, Vice President and
                    Assistant General Counsel
                    Facsimile:  816-242-2739

With a copy to:     Heller Ehrman White & McAuliffe
                    525 University Avenue
                    Palo Alto, CA 94301
                    Attention: Bruce W. Jenett
                    Facsimile: 650-324-0638

If to the LLC:      GenOptera LLC
                    c/o Exelixis Pharmaceuticals, Inc.
                    260 Littlefield Avenue
                    South San Francisco, CA 94080
                    Attention: Chief Executive Officer of GenOptera LLC
                    Facsimile: 650-825-2205

  16.8    Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, then such provisions will be enforced to
the maximum extent possible under applicable law and the remainder of such
provisions will be excluded from

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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this Agreement, and the balance of this Agreement will be interpreted as if such
provisions or portion(s) thereof were so excluded and will continue to be
enforceable in accordance with its terms.

  16.9    Force Majeure Events. Except as otherwise provided herein, no Party
will be in breach of this Agreement, or liable to the other Parties, for any
loss, damage, detention, delay or failure of performance to the extent such
loss, damage, detention, delay or failure is caused by a Force Majeure Event
provided that the Party claiming excuse uses its commercially reasonable efforts
to overcome the same.  In the event of a Force Majeure Event, the obligations of
the affected Party will be suspended as long as such Force Majeure Event
continues.

  16.10   Hardship. If, during the period of this Agreement, performance of this
Agreement should lead to unreasonable hardship for one Party taking the
interests of all Parties into account, the Parties will endeavor to agree in
good faith to amend this Agreement in view of such circumstance.

  16.11   Electronic Data Interchange. If the Parties elect to facilitate their
activities hereunder by electronically sending and receiving data in agreed
formats (also referred to in general usage as Electronic Data Interchange or
EDI) in substitution for conventional paper-based documents, the terms and
conditions of this Agreement will apply to such EDI activities and
communications as if such EDI communication, and as if such communication were
sent by facsimile.

  16.12   Counting Of Time.  Whenever days are to be counted under this
Agreement, the first day will not be counted and the last day will be counted,
such that if a notice is delivered on a Monday to one Party, for example, with a
five (5) day reply period hereunder, the reply must be sent to the sending Party
(not received by such sending Party) by such recipient member no later than
11:59 a.m. local time for the sender, on the Saturday next following such
Monday.

  16.13   Certain Third Parties.  Except with respect to the rights of certain
Persons to be indemnified pursuant to Article 13 of this Agreement, which
Persons are intended as third party beneficiaries of their respective rights be
indemnified as set forth therein, able to enforce their respective rights to
such indemnification as if they were a party hereto, nothing in this Agreement,
express or implied, is intended to confer upon any person, other than the
Parties hereto and their successors and assigns, any rights or remedies under or
by reason of this Agreement.

  16.14   No Grant Of Rights.  Except as specifically stated herein, no Party
grants to any other Party hereto any rights or license to any intellectual
property rights or other rights of the first Party.

  16.15   Captions.  The captions to Sections of this Agreement have been
inserted for identification and reference purposes only and will not be used to
construe or interpret this Agreement.

  16.16   Costs And Attorneys' Fees.  Except as otherwise provided in Article 11
of the Operating Agreement, including the definition of "Damages" under Section
1.21 of the

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

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Operating Agreement, if any action, suit or other proceeding is instituted
concerning or arising out of this Agreement or any transaction contemplated
hereunder, the prevailing Party will recover all of such Party's reasonable fees
and costs of attorneys incurred in each such action, suit or other proceeding,
including any and all appeals or petitions therefrom.

  16.17   Expenses. Except as otherwise provided in this Agreement (a) all
expenses incurred by a Party in connection with its obligations under this
Agreement will be borne solely by such Party, and (b) each Party will be
responsible for appointing its own employees, agents and representatives, who
will be compensated by such Party.

  16.18   Non-Waiver. The failure of a Party in any one or more instances to
insist upon strict performance of any of the terms and conditions of this
Agreement will not be construed as a waiver or relinquishment, to any extent, of
the right to assert or rely upon any such terms or conditions on any future
occasion.

  16.19   Disclaimer of Agency. This Agreement will not render any Party the
legal representative or agent of another, nor will any Party have the right or
authority to assume, create, or incur any Third Party liability or obligation of
any kind, express or implied, against or in the name of or on behalf of another
except as expressly set forth in this Agreement or except as may be expressly
agreed in advance in writing by the Party to be bound.

  16.20   Further Assurances.  The Parties will execute and deliver any further
instruments or documents and perform any additional acts that are or may become
necessary to carry out the purposes and intent of this Agreement.

  16.21   Binding Effect. This Agreement will be binding on and inures to the
benefit of each Party and its respective transferees, successors, assigns and
legal representatives.

  16.22   Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be an original and all of which will constitute
together the same document.  This Agreement, which Bayer and Exelixis executed
on December 15, 1999, shall become effective upon execution by the LLC.

  16.23   Governing Law. The law of the State of California, excluding that body
of law known as conflict of laws, will be the applicable substantive law for all
matters involving this Agreement, except those governed by federal law, which
will apply to such other matters.

  16.24   Official Language. The official text of this Agreement and any
appendices, Exhibits hereto, will be made, written and interpreted in English.
Any notices, accounts, reports, documents, disclosures of information or
statements required by or made under this Agreement, whether during its term or
upon expiration or termination thereof, will be in English.  In the event of any
dispute concerning the construction or meaning of this Agreement, reference will
be made only to this Agreement as written in English and not to any other
translation into any other language.

  16.25   Internal Section References.  All references in this document to
Sections are to Sections hereof except as otherwise indicated.

[*]=CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       48
<PAGE>

                    [REST OF PAGE INTENTIONALLY LEFT BLANK]

[*]=CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       49
<PAGE>

     In Witness Whereof, the Parties hereto have duly executed this Agreement as
of the date first above written.

Exelixis Pharmaceuticals, Inc.              Bayer Corporation

By:  /s/ George Scangos                     By:  /s/ Emil E. Lansu
     -------------------------------             ------------------------------

Name:  George Scangos                       Name:  Emil E. Lansu
     -------------------------------             ------------------------------
Title:  President & CEO                     Title:  Executive Vice President
      ------------------------------              -----------------------------

GenOptera LLC

By:  /s/ Frank F. Reuscher
   ---------------------------------

Name:  Frank F. Reuscher
     -------------------------------

Title:  Chief Executive Officer
      ------------------------------

[*]=CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       50
<PAGE>

                                   Exhibit A

                                     [ * ]

[*]=CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>

                            COLLABORATION AGREEMENT
                                     AMONG

                        EXELIXIS PHARMACEUTICALS, INC.,

                            BAYER CORPORATION, AND

                                 GENOPTERA LLC

                          DATED AS OF JANUARY 1, 2000

[*]=CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                       1

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