Document:

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                                                                   EXHIBIT 10.1

[***] CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. SECTIONS 200.80(b)(4),
200.83 AND 230.406. CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

                                   AGREEMENT

     This Agreement is made by and between Roche Molecular Systems, Inc.
("RMS"), having an office at 1080 U.S. Highway 202, Branchburg Township,
Somerville, New Jersey 08876-3771 and Virologic, Inc. ("VLI"), South San
Francisco, California, hereafter collectively referred to as "The Parties".

                                   BACKGROUND

     A.   RMS has the right to grant immunities from suit under certain United
States Patents describing and claiming, inter alia, a nucleic acid
amplification process known as the polymerase chain reaction ("PCR") technology.

     B.   VLI has attained substantial expertise in developing, validating,
documenting and performing sophisticated in vitro susceptibility/resistance
diagnostic procedures.

     C.   VLI desires to obtain an immunity from suit from RMS to practice PCR
Technology to perform human in vitro clinical laboratory services, and RMS is
willing to grant such an immunity, on the terms and subject to the conditions
provided exclusively in this Agreement.

     NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein, RMS and VLI agree as follows:

     1.   Definitions

          For the purpose of this Agreement, and solely for that purpose, the
terms set forth hereinafter shall be defined as follows:

          1.1  The term "Affiliate" of a designated party to this Agreement
          shall mean:

               a)   an organization of which fifty percent (50%) or more of the
                    voting stock is controlled or owned directly or indirectly
                    by either party to this Agreement;

               b)   an organization which directly or indirectly owns or
                    controls fifty percent (50%) or more of the voting stock of
                    either party to this Agreement;

               c)   an organization, the majority ownership of which is directly
                    or indirectly common to the majority ownership of either
                    party to this Agreement; and

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               d)   an organization under (a), (b), or (c) above in which the
                    amount of said ownership is less than fifty percent (50%)
                    and that amount is the maximum amount permitted pursuant to
                    the law governing the ownership of said organization.

     It is understood and agreed, however, that the term "AFFILIATE" shall  not
include Genentech Inc., a Delaware Corporation.

     1.2 "COMBINATION SERVICE" shall mean a LICENSED SERVICE offered in
combination with [***] as part of a package, where the LICENSED SERVICE is not
separately billed.

     1.3 "DIAGNOSTIC PRODUCT" shall mean an assemblage of reagents, including
but not limited to reagents packaged in the form of a kit, useful in
performing a LICENSED SERVICE.

     1.4 "EFFECTIVE DATE" shall mean the date on which the last signatory to
this Agreement signs the Agreement.

     1.5 "LICENSED FIELD" shall mean the field of human in vitro diagnostics
solely for the detection of genetic diseases, genetic pre-disposition to
disease, cancer, tissue transplant typing, Parentage, and microorganisms
associated with infectious diseases.

     1.6 "LICENSED SERVICES" shall mean the performance by VLI of an in vitro
diagnostic procedure utilizing PCR TECHNOLOGY to detect the presence, absence
or quantity of a nucleic acid sequence associated with a specific human disease
or condition within the LICENSED FIELD. LICENSED SERVICES include but are not
limited to, any combination of the steps of collecting a sample for analysis,
isolating nucleic acid sequences therein, amplifying one or more desired
sequences, analyzing the amplified material and reporting the results.

     1.7 "NET SERVICE REVENUES" shall mean gross invoice price for the
LICENSED SERVICES performed by VLI (or the fair market value for any
nonmonetary  consideration which VLI agree to receive in exchange for LICENSED
SERVICES), less the following deductions where they are factually applicable
and are not already reflected in the gross invoice price:

               i)   discounts allowed and taken, in amounts customary in the
                    trade (which shall include the difference between the dollar
                    amount charged by VLI for a LICENSED SERVICE and the
                    Medicare and/or Medicaid Limits of Allowance  and/or
                    reimbursement limitations of a THIRD PARTY insurance
                    program); and

[***] CONFIDENTIAL TREATMENT REQUESTED.

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               ii)  government imposed transportation taxes, sales taxes and
                    other taxes to the extent they are separately identified on
                    the invoice; and

              iii)  actual bad debt, up to 2% of gross invoice price for
                    LICENSED SERVICES, which bad debt VLI can prove and document
                    that it was reasonable and diligent in its efforts to
                    collect payment.

     No allowance or deduction shall be made for commissions or collections, by
whatever name known.

     It is hereby understood and agreed that LICENSED SERVICES and COMBINATION
SERVICES shall at all times be invoiced, listed and billed by VLI as a separate
item in VLI's invoices, bills and reports to customers. NET SERVICE REVENUES for
determining royalties on a LICENSED SERVICE which is part of a COMBINATION
SERVICE shall be determined by [***] in Attachment I hereto. The [***] specified
in Attachment I for a particular LICENSED SERVICE shall be set my RMS after
consultation with VLI, [***] by the LICENSED SERVICE to the [***] of the
COMBINATION SERVICE as offered by VLI. Attachment I hereto shall be modified as
new COMBINATION SERVICES are identified and new royalty-bearing fractions set.

          The NET SERVICE REVENUES of the LICENSED SERVICES that are performed
by VLI for any person, firm or corporation controlling, controlled by, or under
common control with VLI, or enjoying a special course of dealing with VLI,
shall be determined by reference to the NET SERVICE REVENUES which would be
applicable under this Section in an arm's length transaction by VLI to a THIRD
PARTY other than such person, firm or corporation.

          1.8  "PARENTAGE" shall mean analysis of human genetic material to
ascertain whether two or more individuals are biologically related, but
specifically excludes analysis of forensic evidence for a sexual assault
investigation.

          1.9  "PCR TECHNOLOGY" shall mean polymerase chain reaction technology
covered by United States Patent Nos. B2 4,683,195, B1 4,683,202 and 4,965,188
and any reissue or reexamination patents thereof.

          1.10 "THIRD PARTY" shall mean a party other than an AFFILIATE of The
Parties to this Agreement.

     2.   Grant

          2.1  Upon the terms and subject to the conditions of this Agreement,
RMS hereby grants to VLI, and VLI hereby accepts from RMS, a royalty-bearing,
non-exclusive immunity from suit under PCR TECHNOLOGY solely to perform LICENSED
SERVICES within the United States and its possessions and the Commonwealth of
Puerto Rico.

[***] CONFIDENTIAL TREATMENT REQUESTED.

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          2.2  PCR Technology hereunder may be practiced solely for the
performance of Licensed Services and for no other purpose whatsoever, and no
other right, immunity or license is granted expressly, impliedly or by estoppel.

          2.3  VLI expressly acknowledges and agrees that the immunity from
suit pursuant to this Agreement is personal to VLI alone and VLI shall have no
right to sublicense, assign or otherwise transfer or share its rights under the
foregoing immunity from suit and further agrees that LICENSED SERVICES will be
performed, offered, marketed and sold only by VLI and VLI shall not authorize
any other party, including AFFILIATES, to practice the PCR TECHNOLOGY, nor
shall it practice the PCR TECHNOLOGY in conjunction with any other party.

          2.4  For each COMBINATION SERVICE that VLI offers pursuant to this
immunity from suit, VLI agrees that it will notify RMS at least [***] days
before it commences offering said COMBINATION SERVICE. COMBINATION SERVICES
claimed by VLI on royalty reports which have not met the [***] day notice
requirement and for which RMS has not set an appropriate royalty bearing
fraction, shall be royalty bearing at [***] of the package price, less
applicable deductions. As to all other LICENSED SERVICES offered by VLI which
are not part of a COMBINATION SERVICE, VLI agrees to inform RMS of the
availability from VLI of each such LICENSED SERVICE within 30 days after VLI
commences offering the LICENSED SERVICE.

          2.5  RMS hereby grants to VLI the right and VLI accepts and agrees to
credit RMS as the source of PCR TECHNOLOGY rights in VLI's promotional
materials and any other materials intended for distribution to THIRD PARTIES as
follows:

  "This PCR portion of this test is performed pursuant to a license agreement
                       with Roche Molecular Systems, Inc."

     3.   Acknowledgement and Agreement on Diagnostic Products

          3.1  VLI acknowledges and agrees that the immunity from suit granted
hereunder is for the performance of LICENSED SERVICES only and does not include
any right to make, have made, import, offer or sell any products, including
devices, PCR reagents, kits or DIAGNOSTIC PRODUCTS. VLI specifically
acknowledges that it does not by virtue of this agreement acquire any rights
under RMS' U.S. Patent Nos. 4,889,818, 5,079,352 or any other polymerase
patent. VLI further acknowledges and agrees that RMS Affiliates are in the
business of providing clinical laboratory testing services and the commercial
sale of diagnostic testing systems and therefore may compete directly with
VLI's business.

     4.   Royalties, Records and Reports

          4.1  Royalties. For the rights and privileges granted under this
Agreement, VLI shall pay to RMS earned royalties equal to [***] percent [***] of
VLI's NET SERVICE REVENUES for each LICENSED SERVICE performed.

[***] CONFIDENTIAL TREATMENT REQUESTED.

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     4.2  VLI shall keep full, true and accurate books of account containing all
particulars which may be necessary for the purpose of showing the amount
payable to RMS by way of royalty or by way of any other provision under this
Agreement. Such books and the supporting data shall be open at all reasonable
times, for three (3) years following the end of the calendar year to which they
pertain (and access shall not be denied thereafter, if reasonably available),
to the inspection of RMS or an independent certified public accountant retained
by RMS for the purpose of verifying VLI's royalty statements or VLI's
compliance in other respects with this Agreement. If in dispute, such records
shall be kept until the dispute is settled. The inspection of records shall be
at RMS' sole cost and expense, unless the inspector concludes that royalties
reported by VLI for the period being audited are understated by five percent
(5%) or more from actual royalties, in which case the costs and expenses of
such inspection shall be paid by VLI.

     4.3  VLI shall within sixty (60) days after the first day of January and
July of each year deliver to RMS a true and accurate royalty report. Such
report shall cover the preceding six (6) calendar months; and shall be
submitted either i) on the "Summary Royalty Report", a copy of which is
attached hereto as Attachment II, or ii) on a form generated by VLI which
duplicates the format of the Summary Royalty Report; and shall include at least
the following:

          a)  the name of each LICENSED SERVICE and COMBINATION SERVICE and the
              number performed during those six (6) months;

          b)  compilation of billings thereon and the allowable deductions
              therefrom;

          c)  NET SERVICE REVENUES and the calculation of total royalties
              thereon; and

          d)  the calculation of the net royalty payable to RMS. If no royalties
              are due, its shall be so reported.

     The correctness and completeness of each such report shall be attested to
in writing by the responsible financial officer of VLI's organization or by
VLI's external auditor or by the chair or other head of VLI's internal audit
committee.

     Simultaneously with the delivery of each such report, VLI shall pay to RMS
the royalty due under this Agreement for the period covered by such report. All
payments due RMS hereunder shall be sent together with the royalty report by the
due date to the following address:

                    Roche Molecular Systems, Inc.
                    P.O. Box 18139
                    Newark, New Jersey 07191

or to any address that RMS may advise in writing.

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                4.4     All amounts payable hereunder by VLI to RMS shall be
payable in United States currency.

                4.5     VLI's obligation to pay royalties pursuant to this
Agreement shall terminate upon a final holding of invalidity or
unenforceability of all of the patents identified in Section 1.9, supra, by a
court of appellate jurisdiction or by a trial court from which no appeal is or
can be taken.

                4.6     If VLI shall fail to pay any amount specified under this
Agreement after the due date thereof, the amount owed shall bear interest at the
Citibank NA base lending rate ("prime rate") plus [***] % from the due date
until paid, provided, however, that if this interest rate is held to be
unenforceable for any reason, the interest rate shall be the maximum rate
allowed by law at the time the payment is due.

        5.      Performance of Licensed Services

                5.1     The Parties agree that quality assurance is of utmost
importance in the performance of LICENSED SERVICES. To that end, VLI agrees
that it will:

                a)      participate in at least one independent proficiency
                        testing program for each LICENSED SERVICE when such
                        program(s) becomes available; and

                b)      comply with all Medicare, Medicaid and/or CLIA standards
                        for diagnostic testing as well as all other applicable
                        federal, state and local regulations applicable to human
                        diagnostic testing.

        6.      Technology Notification

                6.1     With respect to any invention, improvement or discovery
(hereinafter referred to as "Discoveries" in this Article) of VLI made after
entering into this Agreement, resulting from work conducted under this
Agreement and being applicable to PCR, if VLI decides to license that Discovery
to THIRD PARTIES, then VLI agrees to provide to RMS, unless not possible due to
VLI's previous commitments to THIRD PARTIES relating to said Discoveries, a
reasonable opportunity to negotiate a license to use said Discoveries in
PCR-based DIAGNOSTIC PRODUCTS and services. Such Discoveries include, but are
not limited to, improvements of the PCR process or in the performance of
LICENSED SERVICES, modifications to or new methods of performing the LICENSED
SERVICES, including the automation of the PCR process or of the LICENSED
SERVICES.

                6.2     Any agreement reached between The Parties as a result
of VLI's notification to RMS of a Discovery pursuant to Section 6.1 hereto
shall be upon terms and conditions negotiated in good faith by The Parties.

[***] CONFIDENTIAL TREATMENT REQUESTED.

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     7.   Diligence

          VLI shall exercise reasonable diligence in developing, testing,
validating, documenting, promoting and selling the LICENSED SERVICES. In the
course of such diligence, VLI shall take appropriate steps including, upon
reasonable written request of RMS, furnish RMS with representative copies of
all promotional material relating to the LICENSED SERVICES.

     8.   TERM AND TERMINATION

          8.1  The immunity from suit granted to VLI herein shall commence on
the EFFECTIVE DATE and terminate on the date of expiration of the last to expire
of the patents included within the PCR TECHNOLOGY, which patent contains at
least one claim covering the performance of LICENSED SERVICES.

          8.2  If in the course of performing and offering LICENSED SERVICES,
VLI fails to comply with the quality assurance provisions of Article 5, VLI
shall so notify RMS immediately upon such failure and shall have thirty (30)
days from receipt of such notice to cure all defects of which it is notified.
If VLI does not cure all such defects within the designated thirty (30) days,
RMS may then in its sole discretion terminate this Agreement in its entirety,
or any portion thereof immediately. For the purposes of this Section and this
Agreement, VLI's failure to provide an accurate and correct test result when
participating in an independent proficiency testing program pursuant to Section
5.1 (a), on two consecutive evaluations, shall automatically be deemed a
failure to comply with Article 5 and shall be a material breach of this
Agreement.

          8.3  Notwithstanding any other Section of this Agreement, VLI may
terminate this Agreement for any reason on thirty (30) days' written notice to
RMS.

          8.4  The decision of a court or administrative body finding RMS
liable for culpable due to VLI's performance of LICENSED SERVICES shall give
RMS the right to terminate this Agreement immediately upon notification to RMS
of said decision.

          8.5  The immunity granted hereunder to VLI shall automatically
terminate upon (i) adjudication of VLI as bankrupt or insolvent, or VLI's
admission in writing of its inability to pay its obligations as they mature;
(ii) or an assignment by VLI for the benefit of creditors; (iii) or VLI's
applying for or consenting to the appointment of a receiver, trustee or similar
officer for any substantial part of its property; (iv) such receiver, trustee
or similar officers appointment without the application or consent of VLI, if
such appointment shall continue undischarged for a period of ninety (90) days;
or VLI's instituting (by petition, application, answer, consent or otherwise)
any bankruptcy, insolvency arrangement, or similar proceeding relating to VLI
under the laws of any jurisdiction; (v) or the institution of any such
proceeding (by petition, application or otherwise) against VLI, if such
proceeding shall remain undismissed for a period of ninety (90) days or the
issuance or levy of any judgment, writ, warrant of attachment or execution or
similar process against a substantial part of the property of VLI, if such
judgment, writ, or similar process shall not

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be released, vacated or fully bonded within ninety (90) days after its issue or
levy; (vi) loss of VLI's federal or state licenses permits or accreditation
necessary for operation of VLI as a health care institution.

     8.6  RMS shall have the right to terminate this Agreement by written
notice to VLI upon any change in the ownership or control of VLI or of its
assets. Termination under this Section shall be effective immediately upon
receipt by VLI of RMS' notice of termination. For such purposes, a "change in
ownership or control" shall mean that 30% or more of the voting stock of VLI
become subject to the control of a person or entity, or any related group of
persons or entities acting in concert, which person(s) or entity(ies) did not
control such proportion of voting stock as of the EFFECTIVE DATE of the
Agreement. Analogously, RMS shall have the right to terminate this Agreement
upon any transfer or sale of 30% or more of the assets of VLI to another party.

     8.7  BREACH. Upon any breach of or default of a material term under this
Agreement by VLI, RMS may terminate this Agreement upon thirty (30) days'
written notice to VLI. Said notice shall become effective at the end of the
thirty-day (30) period, unless during said period VLI fully cures such breach
or default and notifies RMS of such a cure.

     8.8  Upon termination of this Agreement as provided herein, all immunities
and rights granted to VLI hereunder shall revert to or be retained by RMS. To
the extent RMS has LICENSED TECHNOLOGY or know-how of VLI pursuant to Article 6
hereto, those licenses shall remain in force according to their terms.

     8.9  VLI's obligations to report to RMS and to pay royalties to RMS as to
the LICENSED SERVICES performed under the Agreement prior to termination or
expiration of the Agreement shall survive such termination or expiration.

  9. Confidentiality-Publicity

     9.1  Except as otherwise specifically provided in Section 2.5, VLI agrees
to obtain RMS' approval before distributing any written information, including
but not limited to promotional and sales materials, to THIRD PARTIES  which
contains references to RMS or this Agreement. RMS' approval shall not be
unreasonably withheld or delayed and, in any event, RMS' decision shall be
rendered within three (3) weeks of receipt of the written information. Once
approved, such materials, or abstracts of such materials, which do not
materially alter the context of the material originally approved may be
reprinted during the term of the Agreement without further approval by RMS
unless RMS has notified VLI in writing of its decision to withdraw permission
for such use.

     9.2  Each Party agrees that any financial, legal or business information
or any technical information disclosed to it (the "Receiving Party") by the
other (the "Disclosing Party") in connection with this Agreement shall be
considered confidential and proprietary and the Receiving

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Party shall not disclose same to any THIRD PARTY and shall hold it in
confidence for a period of five (5) years and will not use it other than as
permitted under this Agreement provided, however, that any information,
know-how or data which is orally disclosed to the Receiving Party shall not be
considered confidential and proprietary unless such oral disclosure is reduced
to writing and given to the Receiving Party in written form within thirty (30)
days after oral disclosure thereof. Such confidential and proprietary
information shall include, without limitation, marketing and sales information,
commercialization plans and strategies, research and development work plans,
and technical information such as patent applications, inventions, trade
secrets, systems, methods, apparatus, designs, tangible material, organisms and
products and derivatives thereof.

        9.3     The above obligations of confidentiality shall not be applicable
                to the extent:

                a.      such information is general public knowledge or, after
                        disclosure hereunder, becomes general or public
                        knowledge through no fault of the Receiving Party; or

                b)      such information can be shown by the Receiving Party by
                        its written records to have been in its possession prior
                        to receipt thereof hereunder; or

                c)      such information is received by the Receiving Party from
                        any THIRD PARTY for use or disclosure by the Receiving
                        Party without any obligation to the Disclosing Party
                        provided, however, that information received by the
                        Receiving Party from any THIRD PARTY funded by the
                        Disclosing Party (e.g. consultants, subcontractors,
                        etc.) shall not be released from confidentiality under
                        this exception; or

                d)      the disclosure of such information is reasonably needed
                        for use in connection with performing, offering and
                        selling LICENSED SERVICES; or

                e)      the disclosure of such information is required or
                        desirable to comply with or fulfill governmental
                        requirements, submissions to governmental bodies, or the
                        securing of regulatory approvals.

        9.4     With the exception of Section 2.5, each party shall, to the
extent reasonably practicable, maintain the confidentiality of the provisions
of this Agreement and shall refrain from making any public announcement or
disclosure of the terms of this Agreement without the prior consent of the
other party, except to the extent a party concludes in good faith that such
disclosure is required under applicable law or regulations, in which case the
other party shall be notified in advance.

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     10.  Compliance

          In exercising any and all rights and in performing its obligations
hereunder, VLI shall comply fully with any and all applicable laws, regulations
and ordinances and shall obtain and keep in effect licenses, permits and other
governmental approvals, whether at the federal, state or local levels, necessary
or appropriate to carry on its activities hereunder. VLI further agrees to
refrain from any activities that would have an adverse effect on the business
reputation of RMS. RMS will advise VLI of any such activities and VLI will have
thirty (30) days to correct such activity.

     11.  Assignment

          This Agreement shall not be assigned or transfered by VLI (including
without limitation any purported assignment or transfer that would arise from a
sale or transfer of VLI's business) without the express written consent of RMS.
RMS may assign all or any part of its rights and obligations under this
Agreement at any time without the consent of VLI. VLI agrees to execute such
further acknowledgements or other instruments as RMS may reasonably request in
connection with such assignment.

     12.  Negation of Warranties and Indemnity

          12.1 Nothing in this Agreement shall be construed as:

               a)   a warranty or representation by RMS as to the validity or
                    scope of any PCR TECHNOLOGY;

               b)   a warranty or representation that the practice of the PCR
                    TECHNOLOGY is or will be free from infringement of patents
                    of THIRD PARTIES;

               c)   an obligation to bring or prosecute actions or suits against
                    THIRD PARTIES for infringement;

               d)   except as expressly set forth herein, conferring the right
                    to use in advertising, publicity or otherwise any trademark,
                    trade name, or names, or any contraction, abbreviation,
                    simulation or adaptation thereof, of RMS;

               e)   conferring by implication, estoppel or otherwise any
                    license, right or immunity under any patents or patent
                    applications of RMS other than those specified in PCR
                    TECHNOLOGY, regardless of whether

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                    such patents and patent applications are dominant or
                    subordinate to those in PCR TECHNOLOGY;

               f)   an obligation to furnish any know-how not provided in PCR
                    TECHNOLOGY; or

               g)   creating any agency, partnership, joint venture or similar
                    relationship between RMS and VLI.

          12.2 RMS MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE

          12.3 VLI acknowledges that the technology licensed hereby is newly
developed, and agrees to take all reasonable precautions to prevent death,
personal injury, illness and property damage from the use of such technology.
VLI shall assume full responsibility for its use of the PCR TECHNOLOGY and shall
defend, indemnify and hold RMS harmless from and against all liability,
demands, damages, expenses (including attorneys' fees) and losses for death,
personal injury, illness, property damage or any other injury or damage,
including any damages or expenses arising in connection with state or federal
regulatory action (collectively "Damages"), resulting from the use by VLI,
including its officers, directors, agents and employees, of the PCR TECHNOLOGY
except, and to the extent that such Damages are caused by the negligence or
willful misconduct of RMS.

     13.  GENERAL

          13.1 This Agreement constitutes the entire agreement between The
Parties as to the subject matter hereof, and all prior negotiations,
representations, agreements and understandings are merged into, extinguished by
and completely expressed by it. This Agreement may be modified or amended only
by a writing executed by authorized officers of each of The Parties.

          13.2 Any notice required or permitted to be given by this Agreement
shall be given by postpaid, first class, registered or certified mail, or by
courier, properly addressed to the other party at the respective address as
shown below:

If to RMS:           Roche Molecular Systems, Inc.
                     340 Kingsland Street
                     Nutley, New Jersey 07110
                     Attn: Corporate Secretary

with a copy to:      Roche Molecular Systems, Inc.
                     1145 Atlantic Avenue, Suite 100
                     Alameda, California 94501
                     Attn: Licensing Manager

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If to VLI:          ViroLogic, Inc.
                    270 East Grand Avenue
                    South San Francisco, CA 94080
                    Attn: Martin H. Goldstein, President & COO

     Either party may change its address by providing notice to the other
party. Unless otherwise specified herein, any notice given in accordance with
the foregoing shall be deemed given within four (4) full business days after
the day of mailing, or one full day after the date of delivery to the courier,
as the case will be.

     13.3 Governing Law and Venue. This Agreement and its effect are subject to
and shall be construed and enforced in accordance with the law of the State of
New Jersey, U.S.A., except as to any issue which by the law of New Jersey
depends upon the validity, scope or enforceability of any patent within the PCR
TECHNOLOGY, which issue shall be determined in accordance with the applicable
patent laws of the United States. The Parties agree that the exclusive
jurisdiction and venue for any dispute or controversy arising from this
Agreement shall be in the United States District Court for the District of New
Jersey if federal jurisdiction exists, and if no federal jurisdiction exists,
then in the Superior Court of New Jersey.

     13.4 Arbitration. Notwithstanding the provisions of Section 13.3 above, any
dispute concerning solely the determination of facts such as, but not limited
to, (i) the value of a COMBINATION SERVICE and a LICENSED SERVICE pursuant to
Section 1.7; (ii) a determination of royalty rate payments owed pursuant to
Section 4.1; (iii) compliance with quality assurance pursuant to Article 5; or
(iv) good faith compliance with Article 6; and which dispute does not involve a
question of law, shall be settled by final and binding arbitration at a mutually
convenient location in the State of New Jersey pursuant to the commercial
arbitration rules of the American Arbitration Association, in accordance with
the following procedural process:

          a)   The arbitration tribunal shall consist of three arbitrators. In
               the request for arbitration and the answer thereto, each party
               shall nominate one arbitrator and the two arbitrators so named
               will then jointly appoint the third arbitrator as chairman of the
               arbitration tribunal.

          b)   The decision of the arbitration tribunal shall be final and
               judgment upon such decision may be entered in any competent court
               for juridical acceptance of such an award and order of
               enforcement. Each party hereby submits itself to the jurisdiction
               of the courts of the place of arbitration, but only for the entry
               of judgment with respect to the decision of the arbitrators
               hereunder.

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          13.5 Nothing in this Agreement shall be construed so as to require
the commission of any act contrary to law, and wherever there is any conflict
between any provision of this Agreement or concerning the legal right of The
Parties to enter into this contract and any statute, law, ordinance or treaty,
the latter shall prevail, but in such event the affected provisions of the
Agreement shall be curtailed and limited only to the extent necessary to bring
it within the applicable legal requirements.

          13.6 If any provision of this Agreement is held to be unenforceable
for any reason, it shall be adjusted rather than voided, if possible, in order
to achieve the intent of the parties to the extent possible. In any event, all
other provisions of this Agreement shall be deemed valid and enforceable to the
full extent possible.

     IN WITNESS WHEREOF, The Parties hereto have set their hands and seals and
duly executed this Agreement on the date(s) indicated below, to be effective on
EFFECTIVE DATE as defined herein.

ROCHE MOLECULAR SYSTEMS, INC.                VIROLOGIC, INC.

By: /s/ KATHY ORDONEZ                        By: /s/ MARTIN H. GOLDSTEIN
   --------------------------------             --------------------------------

Name:  Kathy Ordonez                         Name:  Martin H. Goldstein

Title: President                             Title: President & CEO

Date:  July 21, 1997                         Date:  Aug. 4, 1997
     ------------------------------               ------------------------------

                               Apprv'd As To Form
                                   LAW DEPT.

                                 By [initials]
                                ----------------

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ATTACHMENT I

                              COMBINATION SERVICES

<TABLE>
<CAPTION>
                                                  PERCENT OF NET SERVICE
                                                  REVENUES FOR COMBINATION
                                                  SERVICES WHICH IS
                                                  ATTRIBUTABLE TO LICENSED
LICENSED SERVICES                                 SERVICES
-----------------                                 ------------------------
<S>                                               <C>
Drug Susceptibility and Resistance Test                      [***]
</TABLE>

                               [TO BE DETERMINED]

[***] CONFIDENTIAL TREATMENT REQUESTED.
<PAGE>   15

                                 ATTACHMENT II

                             SUMMARY ROYALTY REPORT
                     for the Period _________ to __________

Licensee: Virologic, Inc.      Field of Use: In Vitro Human Diagnostic Services
Effective Date:                Royalty Rate: 18%

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
                           AMOUNT         NUMBER OF       COMPILATION               COMBINATION
                         BILLED PER     Lic. SERVICES          OF       DEDUCTION    SERVICE %    NEW SERVICE      EARNED
LICENSED SERVICE        Lic. SERVICE      PERFORMED         BILLINGS     ALLOWED   (FROM ATT. I)    REVENUES       ROYALTY
--------------------------------------------------------------------------------------------------------------------------
<S>                     <C>             <C>                 <C>         <C>         <C>           <C>              <C>
--------------------------------------------------------------------------------------------------------------------------

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

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

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

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

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

--------------------------------------------------------------------------------------------------------------------------
                                          ROYALTY PAYMENT DUE
                                          --------------------------------------------------------------------------------
</TABLE>

*  Please attach, to this form, documentation or supplemental data for
   "Deductions Allowed."

** Combination Service %'s must be previously agreed upon. To confirm that a
   Combination Service % has been established or to propose this status, please
   contact Roche Licensing Dept. @ (510) 814-2984.

CHECK HERE IF THERE WERE NO LICENSED SERVICES PERFORMED FOR THIS REPORT
PERIOD: ____

I hereby certify the information set forth above is correct and complete with
respect to the amounts due under the applicable license agreement.

By:____________________________ Title: _____________________ Date: _____________
   (authorized signature)

Name (please print):__________________________________

________________________________________________________________________________
Mail completed form to: Roche Molecular Systems, Inc., P.O. Box 18139, Newark,
New Jersey 07191

<PAGE>   16
                 RIDER CONCERNING SUPPLEMENTAL PATENT RIGHTS TO
                         DIAGNOSTIC SERVICES AGREEMENT

The purpose of this rider is to set forth the agreement of Virologic, Inc.
("VLI") and Roche Molecular Systems, Inc. ("RMS") concerning the supplemental
rights to additional patents relating to PCR technology which RMS offers and
the parties agree to add the rights granted to VLI by the Agreement between the
parties, dated ________________ (the "Diagnostic Services Agreement").

1.   It is understood by the parties that RMS may, from time to time, come into
     possession or control of additional patents or claims of patents relating
     to PCR technology rights to which RMS may decide to offer to add to the
     Diagnostic Services Agreement and which VLI may desire to accept.
     Accordingly, appended hereto as APPENDIX A is a list of such additional
     patents or claims of patents as RMS is currently offering to which VLI, by
     its authorized representative, has indicated its acceptance thereof in
     accordance with the rights of use and all other pertinent obligations,
     restrictions and limitations as set forth in the Diagnostic Services
     Agreement.

2.   APPENDIX A may be amended by mutual agreement of the parties in writing so
     as to add additional patent rights being offered by RMS. Accordingly, a new
     APPENDIX A signed and dated by both parties shall supersede any prior
     APPENDIX A and shall become a part of this rider.

3.   It is expressly understood and agreed by the parties that the grant of
     additional patent rights herein does not in any way otherwise modify the
     Diagnostic Services Agreement and that all provisions of that Agreement
     shall remain in full force and effect as originally set forth therein. The
     term of the Diagnostic Services Agreement shall control the enjoyment of
     rights hereunder and is not extended by the rights granted hereby nor shall
     there be any additional royalty obligation to RMS beyond that set forth in
     said Agreement.

4.   In consideration of the further rights being granted hereunder, VLI agrees
     to remain in good faith compliance with the applicable terms of the
     Diagnostic Services Agreement, including reporting and payment of royalties
     and the limitation on use of PCR technology strictly for the performance of
     licensed services and not to make products.

5.   In the event that VLI's obligation to pay royalties under the Diagnostic
     Services Agreement for its rights to use the PCR technology shall cease for
     any reason, whether by termination, expiry, invalidation or otherwise, then
     the parties agree that this rider shall become null and void and the rights
     granted hereunder terminated without notice and the parties shall be free
     to negotiate a new agreement with respect to the patent rights listed on
     APPENDIX A.

                                             Accepted and Agreed,
ROCHE MOLECULAR SYSTEMS, INC.                VIROLOGIC, INC.

By: /s/ KATHY ORDONEZ                        By: /s/ MARTIN H. GOLDSTEIN
   --------------------------------             --------------------------------
   Kathy Ordonez                                Martin H. Goldstein

Title: President                             Title: President & CEO

Date:  July 21, 1997                         Date:  Aug. 4, 1997
     ------------------------------               ------------------------------

                               Apprv'd As To Form
                                    LAW DEPT.

                                 By: [initials]
                                    -----------
<PAGE>   17
                              APPENDIX A TO RIDER

Additional Patents

U.S. Patent Number 5,008,182
U.S. Patent Number 5,176,995
U.S. Patent Number 5,219,727
U.S. Patent Number 5,110,920

ROCHE MOLECULAR SYSTEMS, INC.                VIROLOGIC, INC.

By:  /s/ KATHY ORDONEZ                       By:  /s/ MARTIN H. GOLDSTEIN
   -------------------------                    -------------------------

Name: Kathy Ordonez                          Name: Martin H. Goldstein

Title: President                             Title: President and CFO

Date: July 21, 1997                          Date: Aug. 4, 1997
     -----------------------                      -----------------------

                               Apprv'd As To Form
                                   LAW DEPT.
                                 By [INITIALS]
                                 -------------<PAGE>   1
                                                                    EXHIBIT 10.2

                            BASIC LEASE INFORMATION

LEASE DATE                    May 25, 1999

TENANT:                       VIROLOGIC, INC., a California corporation

TENANT'S ADDRESS:             Until the Term Commencement Date:

                              270 East Grand Avenue
                              South San Francisco, CA 94080

                              After the Term Commencement Date:

                              345 Oyster Point Boulevard
                              South San Francisco, CA 94080

LANDLORD:                     Oyster Point Tech Center LLC, a Delaware Limited
                              Liability Company

LANDLORD'S ADDRESS:           c/o Riggs & Company
                              808-17th Street NW
                              Washington DC 20006
                              Attn: Mr. Patrick O. Mayberry
                              Phone: (202) 835-4965
                              Fax: (202) 835-6887

                              with copy to:

                              Trammell Crow NW, Inc.
                              1241 East Hillsdale Blvd., St. 200
                              Foster City, CA 94404
                              Phone: (650) 578-8100
                              Fax: (650) 345-2506

PROJECT:                      A three (3) building project totaling
                              approximately 145,446 square feet to be
                              constructed on approximately 7.56 acres of land
                              to be known as 345-349 Oyster Point Blvd., South
                              San Francisco, California 94080 which legal
                              description is contained herein in Exhibit A-1.

BUILDING:                     That approximately 40,316 square foot two story
                              building to be constructed as part of the Project
                              and to be known as 346 Oyster Point Boulevard,
                              South San Francisco, California 94080, as
                              approximately depicted on the site plan attached
                              as Exhibit A-2.

PREMISES:                     The Building to be known as 345 Oyster Point
                              Boulevard, South San Francisco, California 94080
                              as shown herein in Exhibit A-3.

PERMITTED USE:                Office, laboratory and warehouse, and other
                              related legal uses subject to Landlord's approval
                              which shall not be unreasonably withheld.

PARKING DENSITY:              3.3 non-designated spaces per 1000 square feet of
                              rentable area.

ESTIMATED TERM COMMENCEMENT   March 1, 2000
DATE:

LENGTH OF TERM:               One Hundred Twenty (120) months

RENT:
  Base Rent                   Months of Term  Rent Per Square Foot  Monthly Rent
                              --------------  --------------------  ------------

                              Months 1-24     $1.74 psf per month   $70,150
                              Months 25-48    $1.85 psf per month   $74,585
                              Months 49-72    $1.98 psf per month   $79,019
                              Months 73-96    $2.08 psf per month   $83,857
                              Months 97-120   $2.20 psf per month   $88,695

  Estimated First Year Basic  $.40 psf per month, estimated at $16,126/mo.
  Operating Cost

SECURITY DEPOSIT:             $86,276

TENANT'S PROPORTIONATE SHARE: Subject to change, but based on the rentable
                              square feet of the Premises divided by the total
                              rentable square feet of the Building and the
                              Project, respectively, estimated as follows:

                                    Of Building:      100%
                                    Of Project        27.72%

BROKER:                       Cress Partners, LLC
                              Trammell Crow NW, Inc.

The foregoing Basic Lease Information is incorporated into and made a part of
this Lease. Defined terms in the Lease shall have the meanings ascribed to them
in the Basic Lease Information unless otherwise stated. Each reference in this
Lease to any of the Basic Lease Information shall mean the respective
information above and shall be construed to incorporate all of the terms
provided under the particular Lease paragraph pertaining to such information.
In the event of any conflict between the Basic Lease Information and the Lease,
the latter shall control. The term "days" as used in this Lease means "calendar
days" unless the specific term "business days" is used.
<PAGE>   2
                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                            PAGE
<S>                                                                         <C>
     Basic Lease Information...............................................  (i)

     Table of Contents..................................................... (ii)

1.   Premises..............................................................   1

2.   Term..................................................................   1

3.   Possession............................................................   1

4.   Use...................................................................   1

5.   Rules and Regulations.................................................   3

6.   Rent..................................................................   3

7.   Basic Operating Cost..................................................   3

8.   Insurance and Indemnification.........................................   5

9.   Waiver of Subrogation.................................................   6

10.  Landlord's Repairs....................................................   6

11.  Tenant's Repairs......................................................   7

12.  Alterations...........................................................   7

13.  Signs.................................................................   7

14.  Inspection/Posting Notices............................................   7

15.  Utilities.............................................................   8

16.  Subordination.........................................................   8

17.  Financial Statements..................................................   8

18.  Estoppel Certificate..................................................   8

19.  Security Deposit......................................................   9

20.  Tenant's Remedies.....................................................   9

21.  Assignment and Subletting.............................................   9

22.  Authority of Parties..................................................  10

23.  Condemnation..........................................................  10

24.  Casualty Damage.......................................................  11

25.  Holding Over..........................................................  12

26.  Default...............................................................  12

27.  Liens.................................................................  13

28.  Transfers By Landlord.................................................  13

29.  Right of Landlord to Perform Tenant's Covenants.......................  13

30.  Waiver................................................................  13

31.  Notices...............................................................  14

32.  Attorneys' Fees.......................................................  14

33.  Successors and Assigns................................................  14

34.  Force Majeure.........................................................  14

35.  Brokerage Commission..................................................  14

36.  Miscellaneous.........................................................  14

37.  Additional Provisions.................................................  15

Signatures.................................................................  17
</TABLE>
<PAGE>   3
                                   EXHIBITS:
<TABLE>
<CAPTION>
<S>                                <C>
Exhibit A-1....................................................Legal Description
Exhibit A-2............................................................Site Plan
Exhibit A-3.......................................................Phase III Plan
Exhibit B-1.....................................Initial Improvements of Premises
Exhibit B-2..................................Interior Improvement Specifications
Exhibit B-3................................Moveable Equipment and Trade Fixtures
Exhibit C.........................................Initial Project Specifications
Exhibit D............................................Tenant Estoppel Certificate
Exhibit E..........................Rules and Regulations for Tenants' Contractor
Exhibit F.....................................Disclosed Hazardous Materials List
Exhibit G................................Agreement Regarding Shell Modifications
</TABLE>
<PAGE>   4

                                     LEASE

THIS LEASE is made as of this 25th day of May, 1999, by and between Oyster Point
Tech Center LLC, a Delaware limited liability company, (hereinafter called
"Landlord") and ViroLogic, Inc., a California corporation (hereinafter called
"Tenant").

PREMISES

1. Landlord hereby leases to Tenant, and Tenant leases from Landlord, the
   Premises, for the Term, at the rental, and upon all of the terms and
   conditions set forth in this Lease. The Premises is comprised of the building
   which is commonly known and designated as 345 Oyster Point Boulevard, South
   San Francisco, CA (sometimes referred to herein as the "Building") and is
   depicted on Exhibit A-3. The Premises comprises one hundred percent (100%) of
   the rentable area of the Building. The Building is part of the Project. The
   Building is crosshatched on Exhibit A-2. Landlord shall, at its sole cost and
   expense, construct the Building shell, parking lot, exterior common areas,
   and landscaping approximately in the manner depicted on Exhibit C hereto
   ("Initial Project Specifications"). The Initial Project Specifications shall
   include, without limitation, the Building shell, roof, all exterior windows
   and doors, fire sprinklers at the roof line, and utilities and services to
   the Building exterior. Upon Landlord's delivery of Early Possession (as
   provided in Section 3 hereof), Tenant shall perform Tenant's Work (as defined
   in Exhibit B-1 hereto) for the Premises. Tenant's Work shall be performed in
   the manner described in Exhibit B-1 hereto.

TERM

2. The Term of this Lease ("Term") shall commence on the term commencement date
   ("Term Commencement Date") and continue in full force and effect for the
   number of months specified as the Length of Term in the Basic Lease
   Information or until this Lease is terminated as otherwise provided herein.
   If the Term Commencement Date is a date other than the first day of the
   calendar month, the Term shall be the number of months of the Length of Term
   in addition to the remainder of the calendar month following the Term
   Commencement Date. The Term Commencement Date shall be the date of
   Substantial Completion of Tenant's Work as provided in Exhibit B-1 hereto
   (which is estimated to be March 1, 2000) but in no event later than May 1,
   2000 (the "Outside Term Commencement Date"); provided, however, that the
   Outside Term Commencement Date may be adjusted as provided in Section 3
   below. Within ten (10) days after requested by Landlord, Landlord and Tenant
   shall execute an amendment to this Lease stating and confirming the Term
   Commencement Date and Tenant's acceptance of the Premises.

POSSESSION

3. Landlord shall permit Tenant, or Tenant's agents, to enter the Premises
   ("Early Possession") immediately after the concrete floor for the second deck
   of the Building has been poured for the purpose of performing Tenant's Work
   and installing Tenant's equipment, Fixtures, Trade Fixtures and furniture. If
   Landlord is unable for any reason other than Tenant Delay or Force Majeure to
   deliver to Tenant Early Possession of the Premises on or before November 29,
   1999, the Outside Term Commencement Date shall be extended one (1) day for
   each day elapsing after November 29, 1999 to, but not including, the date on
   which Landlord delivers to Tenant Early Possession of the Premises; provided,
   however, that the number of such elapsed days shall be reduced by one (1) day
   for each day of Tenant Delay and one (1) day for each day of delay (not to
   exceed, however, forty-five (45) days) caused by a Force Majeure. If Landlord
   is unable by May 15, 2000 for any reason other than Tenant Delay or Force
   Majeure (subject, in the case of Force Majeure to the forty-five (45) day
   limit stated in the immediately preceding sentence) to deliver to Tenant
   Early Possession, Tenant may by written notice to Landlord given not later
   than May 25, 2000, terminate this Lease in which case this Lease shall
   terminate upon Landlord's receipt of such notice and Landlord shall promptly
   refund to Tenant the first month's Base Rent and Security Deposit and cancel
   the Letter of Credit. For purposes of this Section 3 only "Tenant Delay"
   shall mean (i) any default by Tenant under this Lease, including, but not
   limited to any failure to pay when due any monetary sum due hereunder; (ii)
   any failure by Tenant to deliver any required insurance, or other document or
   instrument required hereunder; (iii) any failure by Tenant to respond within
   the time required hereunder to any request by Landlord for information or
   approval required hereunder; (iv) any construction delay caused by Tenant's
   request for changes in the Initial Project specifications or other
   modifications to the Building shell unless such changes were a result of an
   error or omission in the Initial Project Specifications which was caused by
   Landlord or its agents and is not related to Tenant's particular proposed use
   of the Premises; or (v) any construction delay caused by interference with
   the performance of Landlord's Work caused by Tenant or Tenant's agents.
   Landlord shall deliver, and Tenant shall accept delivery and take immediate
   possession of, the Premises on the Term Commencement Date. The terms
   "Fixture" or "Trade Fixture" as used herein shall be defined as anything
   attached in any manner to Landlord's property, except that equipment shall
   not be deemed a Fixture merely because of the manner in which such equipment
   is connected to the electrical supply of the Building. All portable,
   unattached items are Tenant's property. Tenant and Landlord agree that Tenant
   does not own any Trade Fixtures in the Premises except those items listed in
   Exhibit B-3 or otherwise agreed to in a separate writing between Landlord and
   Tenant. Landlord owns all remaining Trade Fixtures. In connection with
   Tenant's Early Possession, from and after the date on which Tenant or its
   agent first enters the Premises therefor, all of the terms and conditions of
   this Lease (including, but not limited to, insurance and indemnity
   provisions) shall be applicable to Tenant's occupancy save and except for the
   requirement to pay Base Rent and Basic Operating Costs.

USE

4. A. GENERAL. Tenant shall use the Premises for the Permitted Use and for no
   other use or purpose. Tenant shall control Tenant's employees, agents,
   customers, visitors, invitees, licensees, contractors, assignees and
   subtenants (collectively, "Tenant's Parties") in such a manner that Tenant
   and Tenant's Parties cumulatively do not exceed the Parking Density at any
   time. Tenant and Tenant's Parties shall have the nonexclusive right to use,
   in common with other parties occupying the Building or the Project, the
   parking areas and driveways of the Project subject to such rules and
   regulations as Landlord may from time to time prescribe.

B. LIMITATIONS. Tenant shall not permit any odors, smoke, dust, gas, substances,
   noise or vibrations to emanate from the Premises, nor take any action which
   would constitute a nuisance or would disturb, obstruct or endanger any other
   tenants of the Building or the Project or interfere with their use of their
   respective premises. Storage outside the Premises of materials, vehicles or
   any other items is prohibited. Tenant shall not use or allow the Premises to
   be used for any improper or unlawful purpose, nor shall Tenant cause or
   maintain or permit any nuisance in, on or about the Premises or the Project.
   Tenant shall not commit or suffer

                                       1
<PAGE>   5
the commission of any waste in, on or about the Premises or the Project. Tenant
shall not allow any sale by auction upon the Premises or the Project, or place
any loads upon the floors, walls or ceilings which endanger the structure, or
place any harmful liquids in the drainage system of the Building or the
Project. No waste, materials or refuse shall be dumped upon or permitted to
remain outside the Premises except in trash containers placed inside exterior
enclosures designated for that purpose by Landlord. Landlord shall not be
responsible to Tenant for the non-compliance by any other tenant or occupant of
the Building or the Project with any of the above-referenced rules or any other
terms or provisions of such tenant's or occupant's lease or other contract.

C.  COMPLIANCE WITH REGULATIONS. By entering the Premises, Tenant accepts the
Premises in the condition existing as of the date of such entry, subject to
Landlord's representations and warranties set forth in this Lease and subject
to all existing or future applicable municipal, state and federal and other
governmental statues, regulations, laws and ordinances, including zoning
ordinances and regulations governing and relating to the use, occupancy and
possession of the Premises and the use, storage, generation and disposal of
Hazardous Materials (hereinafter defined) in, or and under the Premises
(collectively "Regulations"). Except for matters which occurred prior to the
Term Commencement Date and were not caused directly or indirectly by Tenant or
by any of Tenant's Parties, Tenant shall, at Tenant's sole expense, strictly
comply with all Regulations now in force or which may hereafter be in force
relating to the Premises and the use of the Premises and/or Tenant's and
Tenant's Parties' use, storage, generation of Hazardous Materials in, on and
under the Premises. Tenant shall at its sole cost and expense obtain any and
all licenses or permits necessary for Tenant's use of the Premises. Tenant
shall promptly comply with the requirements of any board of fire underwriters
or other similar body now or hereafter constituted. Tenant shall not do or
permit anything to be done in, on, or about the Premises or bring or keep
anything which will in any way increase the rate of any insurance upon the
Premises, the Building or the Project, or upon any contents therein or cause a
cancellation of said insurance or otherwise affect said insurance in any
manner. Tenant shall indemnify, defend, protect and hold Landlord harmless from
and against any loss, cost, expense, damage, attorneys' fees or liability
arising out of the failure of Tenant to comply with any Regulation or comply
with the requirements as set forth herein. Notwithstanding the foregoing or
anything to the contrary contained in this Lease, Tenant shall not be
responsible for compliance with any laws, codes, ordinances or other
governmental directives where such compliance is caused by Landlord's failure
to cause the Building Shell to be constructed in compliance with all then
applicable laws. Landlord warrants that on the Commencement Date the Building
Shell shall comply with all laws, codes, ordinances, and other governmental
requirements applicable to the Premises and/or the Project as of the date the
building permit was issued.

D.  HAZARDOUS MATERIALS. Tenant shall not cause, or allow any of Tenant's
Parties to cause, any Hazardous Materials to be generated, stored, used,
treated, removed, transported, handled and disposed of on or about the Premises,
the Building or the Project without Landlord's prior written approval, provided
that, Tenant shall be permitted to use the Disclosed Hazardous Materials in the
ordinary course of this business subject to the conditions and requirements of
this Lease. Landlord's conditional authorization of the Disclosed Hazardous
Materials shall be strictly limited to the types and quantities described in
Exhibit F, and shall not be construed as an authorization for Tenant to
generate, store, use, treat, remove, transport, handle or dispose of any
additional quantities of Disclosed Hazardous Materials or any other Hazardous
Materials in, on, about or under the Premises, Building or the Project. Tenant
acknowledges that any change in the types or quantities or Disclosed Hazardous
Materials described in Exhibit F, or any material change in the means and
methods of generating, storing, treating, removing, transporting, handling or
disposing of such Disclosed Hazardous Materials, shall require the prior written
approval of Landlord in each instance. Tenant represents and warrants to
Landlord that (a) prior to its use of Hazardous Materials on the Premises, it
will have received or obtained issuance of, and will maintain in effect, all
permits, approvals, licenses, or other authorizations necessary for Tenant's
activities with respect to the Disclosed Hazardous Materials, and (b) Tenant has
not been cited, fined, or otherwise found to be in violation of any governmental
requirement or fire, safety and insurance requirements or regulations applicable
to any Disclosed Hazardous Materials or any other Hazardous Materials in any
other leased premises. At least once during each twelve (12) month of the Lease
Term, Tenant shall provide Landlord with an inventory list describing the
minimum and maximum quantities of each of the Disclosed Hazardous Materials
generated, stored, used, treated, removed, transported, handled and disposed of
on or about the Premises, the Building or the Project the succeeding twelve (12)
months, and a copy of its Hazardous Materials Management Plan ("HHMP") in the
form submitted by Tenant to the fire department. Tenant agrees to notify
Landlord immediately if Tenant receives notification or otherwise becomes aware
of: (a) any threatened or actual release, spill or discharge of any Disclosed
Hazardous Materials in, on, about or under the Premises, the Building or the
Project, or (b) any threatened or actual lien, action, or proceeding or notice
that any Disclosed Hazardous Materials or any other Hazardous Materials is not
being generated, stored, used, treated, removed, transported, placed,
manufactured, handled, or disposed of in strict compliance with any and all
governmental requirements and regulations or applicable fire, safety or
insurance requirements and regulations. If Tenant or any of Tenant's Parties is
partially or wholly responsible or potentially responsible for such condition,
situation, lien, action or notice, Tenant's notice to Landlord shall include a
statement as to the actions Tenant proposes to take in response to such
condition, situation, lien, action or notice. As used in this Lease, "Hazardous
Materials" shall include, but not be limited to, hazardous, toxic and
radioactive materials and those substances defined as "hazardous substances,"
"hazardous materials," "hazardous wastes," "toxic substances," or other similar
designations in any federal, state, or local law, regulation, or ordinance.
Landlord shall have the right at all reasonable times to inspect the Premises
and to conduct tests and investigations to determine whether Tenant is in
compliance with the foregoing provisions, the costs of all such inspections,
tests and investigations to be borne by Tenant. Tenant shall indemnify, defend
(by counsel selected by Landlord), protect and hold Landlord harmless from and
against all liabilities, losses, costs and expenses, demands, causes of action,
claims or judgments directly or indirectly arising out of the use, generation,
storage or disposal of Hazardous Materials by Tenant or any of Tenant's Parties,
which indemnity shall include, without limitation, attorneys' and consultants'
fees, the cost of any required or necessary repair, cleanup or detoxification,
and the preparation of any closure or other required plans, whether such action
is required or necessary prior to or following the termination of this Lease.
Neither the written consent by Landlord to the use, generation, storage or
disposal of Hazardous Materials nor the strict compliance by Tenant with all
laws pertaining to Hazardous Materials shall excuse Tenant from Tenant's
obligation of indemnification pursuant to this Paragraph 4.D. Tenant's
obligations pursuant to the foregoing indemnity shall survive the termination of
this Lease. Notwithstanding anything to the contrary in this Lease, Landlord
warrants that on the Commencement Date to the best of Landlord's knowledge the

                                       2
<PAGE>   6
     Premises and the Project, and the land and groundwater thereunder, are free
     of contamination in excess of allowable limits by any Hazardous Materials
     introduced by Landlord or its employees, officers, or directors or, except
     for substances and materials within allowable limits used in the ordinary
     course of construction by Landlord's contractors. In the event of any
     breach of the foregoing warranty, Landlord shall promptly rectify the same
     as its sole cost and expense and shall indemnify, defend, and hold Tenant
     harmless from and against any actual damages, liability, suits, losses,
     claims, actions, costs or expenses (including attorneys' and consultants'
     fees and costs) suffered by Tenant in connection with any such breach.

RULES AND REGULATIONS

5.   Tenant shall faithfully observe and comply with any rules and regulations
     Landlord may from time to time prescribe in writing for the purpose of
     maintaining the proper care, cleanliness, safety, traffic flow and general
     order of the Premises, the Building, or the Project. Tenant shall cause
     Tenant's Parties to comply with all such rules and regulations. Landlord
     shall not be responsible to Tenant for the non-compliance by any other
     tenant or occupant of the Building or the Project with any of the rules and
     regulations.

RENT

6.   A. BASE RENT. Base Rent for the Premises shall be calculated on the basis
     of the rentable square feet of the Premises at the rates specified in the
     Basic Lease Information. Rentable square feet shall include all areas
     inside the Building as determined by Landlord's architect. Tenant's
     obligation to pay Base Rent for the Premises shall commence on the Term
     Commencement Date. Upon completion of Landlord's Work (as defined in
     Exhibit B-1 hereto), Landlord's architect shall certify to Landlord the
     rentable square feet of the Premises, measured from the outside of exterior
     walls, but including areas below the "dripline" in the exterior entrances
     and exits and including all areas within the Building such as, but not
     limited to, utility rooms and shafts for mechanical equipment. Landlord's
     architect shall also certify the rentable square feet of the Project,
     Landlord's architect's certification of rentable square feet for the
     Premises, the Building and the Project shall be binding upon both Landlord
     and Tenant for all purposes under this Lease. Landlord and Tenant currently
     estimate that the rentable square feet of the Premises and the Base Rent
     for the Premises will be as stated in the Basic Lease Information. Upon
     receipt of the architect's certification of rentable square feet, the
     actual Base Rent shall be determined and, if requested by Landlord,
     Landlord and Tenant shall enter into an amendment by this Lease which
     states the actual Base Rent as so determined. Upon determination of the
     actual Base Rent for the Premises, Landlord and Tenant shall adjust, if
     necessary, the Base Rent deposited by Tenant for the first full month of
     the Term as provided in Paragraph 6.B. below.

     B. PAYMENTS. Tenant shall pay to Landlord, without demand throughout the
     Term, Base Rent as specified in the Basic Lease Information and finally
     determined as provided in Paragraph 6.A., payable in monthly installments
     in advance on or before the first day of each calendar month, in lawful
     money of the United States, without deduction or offset whatsoever, at the
     address specified in the Basic Lease Information or to such other place as
     Landlord may from time to time designate in writing. Base Rent and
     Estimated Basic Operating Costs as defined in Paragraph 7.A. for the first
     full month of the Term (based upon the estimated rentable area as
     hereinabove provided) shall be paid by Tenant upon Tenant's execution of
     this Lease. If the obligation for payment of Base Rent commences on other
     than the first day of a month, then Base Rent (calculated at the rate
     applicable to the second full month of the Term) for the partial month
     shall be prorated on the basis of the actual number of days in the month.

     C. ADDITIONAL RENT. All monies other than Base Rent required to be paid by
     Tenant hereunder, including, but not limited to, the interest and late
     charges described in Paragraph 26.D., any monies spent by Landlord pursuant
     to Paragraph 29., and Tenant's Proportionate Share of Basic Operating
     Costs, as specified in Paragraph 7. of this Lease, shall be considered
     additional rent ("Additional Rent"). "Rent" shall mean Base Rent and
     Additional Rent.

BASIC OPERATING COST

7.   A. BASIC OPERATING COST. In addition to the Base Rent required to be paid
     hereunder, Tenant shall pay as Additional Rent, Basic Operating Costs in
     the manner set forth below. The Basic Operating Costs shall be calculated
     on the basis of Landlord's architect's certification of the rentable square
     feet of the Building and the Project. The certification by Landlord's
     architect of the rentable square feet of the Building and the Project shall
     be conclusive and binding upon both Landlord and Tenant for all purposes of
     this Lease. Tenant's obligation to pay Basic Operating Costs with respect
     to the Building and the Project shall commence on the Term Commencement
     Date. Landlord shall account for each item of Basic Operating Costs
     attributable to the Building and the Project, in a commercially reasonable
     and customary manner, and unless provided to the contrary in this Lease,
     Tenant shall pay the Basic Operating Costs, as set forth in the Basic Lease
     Information. "Basic Operating Costs" shall mean all commercially reasonable
     and customary expenses and costs of every kind and nature which Landlord
     shall pay or become obligated to pay because of or in connection with the
     management, maintenance, preservation and operation of the Building and the
     Project (determined in accordance with generally accepted accounting
     principles, consistently applied) including but not limited to the
     following:

     (1) TAXES. All real property taxes, possessory interest rates, business or
     license taxes or fees, service payments in lieu of such taxes or fees,
     annual or periodic license or use fees, excise, transit charges, housing
     fund assessments, open space charges, assessments, levies, fees or charges
     general and special, ordinary and extraordinary, unforeseen as well as
     foreseen, of any kind (including fees "in-lieu" of any such tax or
     assessment) which are assessed, levied, charged, confirmed, or imposed by
     any public authority upon the Project, its operations or the Rent (or any
     portion or component thereof) (all of the foregoing being hereinafter
     collectively referred to as "real property taxes"), or any tax imposed in
     substitution, partially or totally, of any tax previously included within
     the definition of real property taxes, or any additional tax the nature of
     which was previously included within the definition of real property taxes,
     except (a) inheritance or estate taxes imposed upon or assessed against the
     Project, or any part thereof or interest therein, and (b) taxes computed
     upon the basis of net income of Landlord or the owner of any interest
     therein, except as otherwise provided in the following sentence. Basic
     Operating Costs shall also include any taxes, assessments, or any other
     fees imposed by any public authority upon or measured by the monthly rental
     or other charges payable hereunder, including, without limitation, any
     gross income tax or excise tax levied by the local governmental authority
     in which the Project is located, the federal government, or any other
     governmental body with respect to receipt of such rental, or upon, with
     respect to or by reason of the development, possession, leasing, operation,
     management, maintenance, alteration, repair, use or occupancy by Tenant of
     the Premises or any portion thereof, or upon this transaction or any
     document to which Tenant is a party creating or transferring an interest or
     an estate in the Premises. In the event that it shall not be lawful

                                       3

<PAGE>   7
for Tenant to reimburse Landlord for all or any part of such taxes, the Base
Rent payable to Landlord under this Lease shall be revised to net to Landlord
the same net rental after imposition of any such taxes on Landlord as would
have been payable to Landlord prior to the payment of any such taxes.

(2) INSURANCE. All insurance premiums and costs, including but not limited to,
any deductible amounts, premiums and costs of insurance incurred by Landlord,
as more fully set forth in Paragraph 8.A. herein.

(3) REPAIRS AND IMPROVEMENTS. The cost of all repairs, replacements and general
maintenance for the Premises, the Building and the Project (except for those
repairs expressly made the financial responsibility of Landlord pursuant to the
terms of this Lease, repairs to the extent paid for by proceeds of insurance or
by Tenant or other third parties, and alterations attributable solely to
tenants of the Project other than Tenant). Such repairs, replacements, and
general maintenance shall include the cost of any capital improvements made to
or capital assets acquired for the Project or the Building after the Term
Commencement Date which reduce any other Basic Operating Cost but only to the
extent of such reduction as reasonably determined by Landlord, are reasonably
necessary for the health and safety of the occupants of the Project, or are
made to the Building by Landlord after the date of this Lease and are required
under any governmental law or regulation, such costs or allocable portions
thereof to be amortized over the useful life thereof, together with interest on
the unamortized balance at the "prime rate" charged at the time such
improvements or capital assets are constructed or acquired by Wells Fargo Bank,
N.A. (San Francisco) plus two (2) percentage points, but in no event more than
the maximum rate permitted by law.

(4) SERVICES. To the extent such expenses are not the obligation of Tenant
under other provisions of this Lease, all expenses relating to maintenance,
janitorial and service agreements and services, and costs of supplies and
equipment used in operating and maintaining the Building and the Project and
the equipment therein and the adjacent sidewalks, driveways, parking and
service areas, including, without limitation, alarm service, window cleaning,
elevator maintenance, the Building exterior maintenance and Project landscaping.

(5) UTILITIES. To the extent such expenses are not the obligation of Tenant
under other provisions of this Lease, the cost of all utilities which benefit
all or a portion of the Building or the Project.

(6) MANAGEMENT FEE. A management and accounting cost recovery fee equal to
three (3%) percent of the sum of Base Rent and Basic Operating Cost.

(7) LEGAL AND ACCOUNTING. Reasonable legal and accounting expenses relating to
the Project, including the cost of audits by certified public accountants.

In the event that the Building is not fully occupied during any fiscal year of
the Term as determined by Landlord, an adjustment shall be made in computing
the Basic Operating Costs for such year so that Tenant pays an equitable
portion of all variable items of Basic Operating Costs, as reasonably
determined by Landlord; provided, however, that in no event shall Landlord be
entitled to collect in excess of one hundred (100%) percent of the total Basic
Operating Costs from all of the tenants in the Building including Tenant.

Basic Operating Costs shall not include the following: specific costs incurred
for the account of, separately billed to and paid by specific tenants; the cost
of redecorating or special cleaning or similar services to individual tenant
spaces, not provided on a regular basis to other tenants of the Building; wages
or salaries paid to executive personnel higher than the property management
level of Landlord not providing full-time service at the Building; the cost of
any new item (not replacement or upgrading of an existing item) which, by
standard accounting principles, should be capitalized (except as provided
above); any charge for depreciation or interest paid or incurred by Landlord;
leasing commissions, finders fees and all other leasing expenses incurred in
procuring tenants in the Building; any costs incurred in the ownership of the
Building, as opposed to the operation and maintenance of the Building,
including Landlord's income taxes, excess profit taxes, franchise taxes or
similar taxes on Landlord's business; preparation of income tax returns;
corporation, partnership or other business form organization expenses;
franchise taxes, filing fees; or other such expenses; or any costs incurred in
cleaning up any environment hazard or condition in violation of any
environmental law (except to the extent caused by Tenant); legal fees for the
negotiation or enforcement of leases; expenses in connection with services or
other benefits of a type which are not Building standard and which are provided
to a single tenant of the Project; any items to the extent such items are
required to be reimbursed to Landlord by Tenant (other than through Tenant's
Additional Rent), or by other tenants or occupants of the Building or by third
parties; the cost of constructing tenant improvements or installations for
any tenant in the Project, including any relocation costs; brokerage
commissions, origination fees, points, mortgage recording taxes, title charges
and other costs or fees incurred in connection with any financing or
refinancing or transfer of the Building and/or any portion of the Project;
attorneys' fees and disbursements, incurred in connection with the leasing of
space in the project (including without limitation the enforcement of any
lease or the surrender, termination or modification of any lease of space in
the Project); advertising and promotional expenses, brochures with respect to
the Project; cost of repairs or replacements occasioned by fire, windstorm or
other casualty, which are paid by insurance or reimbursed by governmental
authorities in eminent domain; overhead and profit increment paid to
subsidiaries or affiliates of Landlord for services on or to the Project, to the
extent that the costs of such services exceed market-based costs for such
services rendered by unaffiliated persons or entities of similar skill,
competence and experience; penalties, fines, legal expense, or late payment
interest incurred by Landlord due to violation by Landlord or Landlord's
agents, contractors or employees, of either the payment terms and conditions of
any lease or service contract covering space in the Project or Landlord's
obligations as owner of the Building (such as late payment penalties and
interest on real estate taxes, late payment of utility bills), except to the
extent caused by Tenant's failure to timely pay or perform pursuant to this
Lease; any compensation paid to clerks, attendants or other persons in any
commercial concession operated by Landlord in the Project from which Landlord
receives any form of income whatsoever, whether or not Landlord actually makes
a profit from such concession; or costs incurred in connection with correcting
latent defects in any portion of the Building and/or Project or remediating
Hazardous Materials contamination in the Building and/or Project, or in
repairing or replacing Building and/or Project equipment, where such repair or
replacement results from original defects in design, manufacture or
installation rather than from ordinary wear and tear or use. Notwithstanding
anything herein to the contrary, in any instance wherein Landlord, in
Landlord's sole discretion, deems Tenant to be

                                       4
<PAGE>   8
     responsible for any amounts greater than Tenant's Proportionate Share,
     Landlord shall have the right to allocate costs in any manner Landlord
     reasonably deems appropriate.

     B. PAYMENT OF ESTIMATED BASIC OPERATING COST. "Estimated Basic Operating
     Costs" for any particular year shall mean Landlord's estimate of the Basic
     Operating Cost for such fiscal year made prior to commencement of such
     fiscal year as hereinafter provided. Landlord shall have the right from
     time to time to revise its fiscal year and interim accounting periods so
     long as the periods as so revised are reconciled with prior periods in
     accordance with generally accepted accounting principles applied in a
     consistent manner. During the last month of each fiscal year during the
     Term, or as soon thereafter as practicable, Landlord shall give Tenant
     written notice of the Estimated Basic Operating Costs for the ensuing
     fiscal year. Tenant shall pay Tenant's Proportionate Share of the
     Estimated Basic Operating Cost with installments of Base Rent for the
     fiscal year to which the Estimated Basic Operating Cost applies in monthly
     installments on the first day of each calendar month during such year, in
     advance. If at any time during the course of the fiscal year, Landlord
     determines that Basic Operating Cost is projected to vary from the then
     Estimated Basic Operating Cost by more than ten (10%) percent, Landlord
     may, by written notice to Tenant, revise the Estimated Basic Operating Cost
     for the balance of such fiscal year, and Tenant's monthly installments for
     the remainder of such year shall be adjusted so that by the end of such
     fiscal year Tenant has paid to Landlord Tenant's Proportionate Share of
     the revised Estimated Basic Operating Cost for such year. Upon execution
     of this Lease, Tenant shall pay to Landlord the Estimated Basic Operating
     Cost for the Premises (calculated on the estimated rentable square feet)
     for the first full month of the Term. Upon final determination of the
     rentable square feet, Landlord and Tenant shall adjust such estimated
     payment.

     C. COMPUTATION OF BASIC OPERATING COST ADJUSTMENT. "Basic Operating Cost
     Adjustment" shall mean the difference between Estimated Basic Operating
     Cost and Basic Operating Cost for any fiscal year determined as
     hereinafter provided. Within one hundred twenty (120) days after the end
     of each fiscal year, as determined by Landlord, or as soon thereafter as
     practicable, Landlord shall deliver to Tenant a statement of Basic
     Operating Cost for the fiscal year just ended, accompanied by a
     computation of Basic Operating Cost Adjustment. If such statement shows
     that Tenant's payment based upon Estimated Basic Operating Cost is less
     than Tenant's Proportionate Share of Basic Operating Cost, then Tenant
     shall pay to Landlord the difference within thirty (30) days after receipt
     of such statement. If such statement shows that Tenant's payments of
     Estimated Basic Operating Cost exceed Tenant's Proportionate Share of
     Basic Operating Cost, then (provided that Tenant is not in Default under
     this Lease) Landlord shall credit the difference against the Estimated
     Basic Operating Cost payment next due. If this Lease has been terminated
     or the Term hereof has expired prior to the date of such statement, then
     the Basic Operating Cost Adjustment shall be paid by the appropriate party
     within thirty (30) days after the date of delivery of the statement and
     this obligation shall survive termination of the Lease. Should this Lease
     commence or terminate at any time other than the first day of the fiscal
     year, Tenant's Proportionate Share of the Basic Operating Cost adjustment
     shall be prorated by reference to the exact number of calendar days during
     such fiscal year that this Lease is in effect.

     D. NET LEASE. This shall be a net Lease and Base Rent shall be paid to
     Landlord net of all costs and expenses, except as specifically provided to
     the contrary in this Lease. The provisions for payment of Basic Operating
     Cost and the Basic Operating Cost Adjustment are intended to pass on to
     Tenant and reimburse Landlord for all costs and expenses of the nature
     described in Paragraph 7.A. incurred in connection with the management,
     maintenance, preservation and operation of the Building or the Project and
     such additional facilities now and in subsequent years as may be reasonably
     determined by Landlord to be necessary to the Building or the Project.

     E. TENANT AUDIT. In the event that Tenant shall dispute the amount set
     forth in any statement provided by Landlord under Paragraph 7.B. or 7.C.
     above, Tenant shall have the right, not later than sixty (60) days
     following the receipt of such statement and upon the condition that Tenant
     shall first deposit with Landlord the full amount in dispute within sixty
     (60) days of receipt of such statement, to cause Landlord's books and
     records with respect to Basic Operating Cost for such fiscal year to be
     audited by certified public accountants selected by Tenant and subject to
     Landlord's reasonable right of approval. The Basic Operating Cost
     Adjustment shall be appropriately adjusted on the basis of such audit. If
     such audit discloses a liability for a refund in excess of ten (10%)
     percent of Tenant's Proportionate Share of the Basic Operating Cost
     Adjustment previously reported, the cost of such audit shall be borne by
     Landlord; otherwise the cost of such audit shall be paid by Tenant. If
     Tenant shall not request an audit in accordance with the provisions of this
     Paragraph 7.E. within sixty (60) days after receipt of Landlord's statement
     provided pursuant to Paragraph 7.B. or 7.C., such statement shall be final
     and binding for all purposes hereof.

INSURANCE AND INDEMNIFICATION

8.   A. LANDLORD'S INSURANCE. Landlord agrees to maintain insurance insuring
     the Building against fire, lightning, vandalism and malicious mischief
     (including, if Landlord elects, "All Risk" coverage, earthquake and/or
     flood insurance), in an amount of not less than one hundred (100%) percent
     of the current replacement cost thereof, except where commercially
     unreasonable, with deductibles and the form and endorsements of such
     coverage as selected by Landlord. Such insurance may also include, at
     Landlord's option, insurance against loss of Base Rent and Additional
     Rent, in an amount equal to the amount of Base Rent and Additional Rent
     payable by Tenant for a period of at least twelve (12) months commencing on
     the date of loss. Such insurance shall be for the sole benefit of Landlord
     and under Landlord's sole control. Landlord shall not be obligated to
     insure any furniture, equipment, machinery, goods or supplies which Tenant
     may keep or maintain in the Premises, or any leasehold improvements,
     additions or alterations within the Premises. Landlord may also carry such
     other insurance as Landlord may deem prudent or advisable, including,
     without limitation, liability insurance in such amounts and on such terms
     as Landlord shall determine.

     B. TENANT'S INSURANCE.

     (1) PROPERTY INSURANCE. Tenant shall procure at Tenant's sole cost and
     expense and keep in effect from the date of this Lease and at all times
     until the end of the Term, insurance on all personal property, and Fixtures
     of Tenant and all improvements made by or for Tenant to the Premises,
     insuring such property for the full replacement value of such property.

     (2) LIABILITY INSURANCE. Tenant shall procure at Tenant's sole cost and
     expense and keep in effect from the date of this Lease and at all times
     until the end of the Term either Comprehensive General Liability Insurance

                                       5

<PAGE>   9
     or Commercial General Liability Insurance applying to the use and occupancy
     to the of the Premises and the Building, and any part of either, and any
     areas adjacent thereto, and the business operated by Tenant, or by any
     other occupant on the Premises. Such insurance shall include Broad Form
     Contractual Liability insurance coverage insuring all of Tenant's indemnity
     obligations under this Lease. Such coverage shall have a minimum combined
     single limit of liability of at least two million dollars ($2,000,000.00),
     and a general aggregate limit of five million dollars ($5,000,000.00). All
     such policies shall be written to apply to all bodily injury, property
     damage or loss, personal injury and other covered loss, however occasioned,
     occurring during the policy term, shall be endorsed to add Landlord, Riggs
     Bank N.A., as trustee of Multi-Employer Trust, the Multi-Employer Trust,
     Kennedy Associates Real Estate Counsel, Inc., and the officers, agents and
     employees of each of the foregoing entities, and any party holding an
     interest to which this Lease may be subordinated as an additional insured,
     and shall provide that such coverage shall be primary and that any
     insurance maintained by Landlord shall be excess insurance only. Such
     coverage shall also contain endorsements: (i) deleting any employee
     exclusion on personal injury coverage; (ii) including employees as
     additional insureds; (iii) deleting any liquor liability exclusion; and
     (iv) providing for coverage of employer's automobile non-ownership
     liability. All such insurance shall provide for severability of interests;
     shall provide that an act or omission of one of the named insureds shall
     not reduce or avoid coverage to the other named insureds; and shall afford
     coverage for all claims based on acts, omissions, injury and damage, which
     claims occurred or arose (or the onset of which occurred or arose) in whole
     or in part during the policy period. Said coverage shall be written on an
     "occurrence" basis, if available. If an "occurrence" basis form is not
     available, Tenant must purchase "tail" coverage for the most number of
     years available, and tenant must also purchase "tail" coverage if the
     retroactive date of an "occurrence" basis form is changed so as to leave a
     gap in coverage for occurrences that might have occurred in prior years. If
     a "claims made" policy is ever used, the policy must be endorsed so that
     Landlord is given the right to purchase "tail" coverage should Tenant for
     any reason not do so or if the policy is to be canceled for nonpayment of
     premium.

(3)  GENERAL INSURANCE REQUIREMENTS. All coverages described in this Paragraph
     8.B. shall be endorsed to provide Landlord with thirty (30) days' notice of
     cancellation or change in terms. If at any time during the Term the amount
     or coverage of insurance which Tenant is required to carry under this
     Paragraph 8.B. is, in Landlord's reasonable judgment, materially less than
     the amount or type of insurance coverage typically carried by owners or
     tenants of properties located in the general area in which the Premises are
     located which are similar to and operated for similar purposes as the
     Premises, Landlord shall have the right to require Tenant to increase the
     amount or change the types of insurance coverage required under this
     Paragraph 8.B. All insurance policies required to be carried under this
     Lease shall be written by companies rated A+XII or better in "Best's
     Insurance Guide" and authorized to do business in California. Any
     deductible amounts under any insurance policies required hereunder shall be
     subject to Landlord's prior written approval. In any event deductible
     amounts shall not exceed one thousand dollars ($1,000.00). Tenant shall
     deliver to Landlord on or before the Term Commencement Date, and thereafter
     at least thirty (30) days before the expiration dates of the expiring
     policies, certified copies of Tenant's insurance policies, or a certificate
     evidencing the same issued by the insurer thereunder, showing that all
     premiums have been paid for the full policy period; and, in the event
     Tenant shall fail to procure such insurance, or to deliver such policies or
     certificates, Landlord may, at Landlord's option and in addition to
     Landlord's other remedies in the event of a Default by Tenant hereunder,
     procure the same for the account of Tenant, and the cost thereof shall be
     paid to Landlord as Additional Rent.

C.   INDEMNIFICATION. Landlord shall not be liable to Tenant for any loss or
     damage to person or property caused by theft, fire, acts of God, acts of a
     public enemy, riot, strike, insurrection, war, court order, requisition or
     order of governmental body or authority or for any damage or inconvenience
     which may arise through repair or alteration of any part of the Building or
     the Project or failure to make any such repair, except as expressly
     otherwise provided in Paragraph 10. Tenant shall indemnify, defend by
     counsel acceptable to Landlord, protect and hold Landlord harmless from and
     against any and all liabilities, losses, costs, damages. Injuries or
     expenses, including reasonable attorneys' fees and court costs, arising out
     of or related to: (1) claims of injury to or death of persons or damage to
     property occurring or resulting directly or indirectly from the use or
     occupancy of the Premises, or from activities of Tenant, Tenant's Parties
     or anyone in or about the Premises or Project, or from any cause
     whatsoever; (2) claims for work or labor performed, or for materials or
     supplies furnished to or at the request of Tenant in connection with
     performance of any work done for the account of Tenant within the Premises
     or Project; and (3) claims arising from any breach or Default on the part
     of Tenant in the performance of any covenant contained in this Lease. The
     foregoing indemnity shall not be applicable to claims arising from the
     gross negligence or willful misconduct of Landlord. The provisions of this
     Paragraph shall survive the expiration or termination of this Lease with
     respect to any claims or liability occurring prior to such expiration or
     termination.

WAIVER OF SUBROGATION

9.   To the extent permitted by law and without affecting the coverage provided
     by insurance to be maintained hereunder, Landlord and Tenant each waive any
     right to recover against the other for; (a) damages for injury to or death
     of persons; (b) damages to property; (c) damages to the Premises or any
     part thereof, and (d) claims arising by reason of the foregoing due to
     hazards covered by insurance to the extent of proceeds recovered therefrom.
     This provision is intended to waive fully, and for the benefit of each
     party, any rights and/or claims which might give rise to a right of
     subrogation in favor of any insurance carrier. The coverage obtained by
     each party pursuant to this Lease shall include, without limitation, a
     waiver of subrogation by the carrier which conforms to the provisions of
     this Paragraph.

LANDLORD'S REPAIRS

10.  Landlord shall at Landlord's expense maintain the structural soundness of
     the roof, the foundations and exterior walls of the Building in good
     repair, reasonable wear and tear excepted; provided that, Landlord shall
     not be responsible for the cost of any repairs resulting from damage,
     destruction or deterioration which is caused by Tenant, Tenant's Parties,
     or by an act or event which is not fully insured. The term "exterior walls"
     as used herein shall not include windows, glass or plate glass, doors,
     special store fronts or office entries. Landlord shall perform on behalf of
     Tenant and other tenants of the Project, as an item of Basic Operating
     Cost, the exterior maintenance of the Building, the Project, and public and
     common areas of the Project, including but not limited to the roof, pest
     extermination, the landscaped areas, parking areas, driveways, the truck
     staging areas, fire sprinkler systems, sanitary and storm sewer lines,
     utility services, electric and telephone equipment servicing the
     Building(s), exterior lighting, and anything which affects the operation
     and exterior appearance of  the Project, which determination shall be at
     Landlord's sole discretion. Except for the expenses directly involving the
     items specifically described in the first sentence of this Paragraph 10.,
     Tenant

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<PAGE>   10
        shall reimburse Landlord for all such costs in accordance with Paragraph
        7. Any damage caused by or repairs necessitated by any act of Tenant or
        Tenant's Parties may be repaired by Landlord at Landlord's option and at
        Tenant's expense. Tenant shall immediately give Landlord written notice
        of any defect or need of repairs after which Landlord shall have a
        reasonable opportunity to repair same. Landlord's liability with respect
        to any defects, repairs, or maintenance for which Landlord is
        responsible under any of the provisions of this Lease shall be limited
        to the cost of such repairs or maintenance unless caused by Landlord's
        gross negligence or willful misconduct.

TENANT'S REPAIRS

11.     Tenant shall at Tenant's expense throughout the Term of this Lease
        maintain all parts of the Premises in a good, clean and secure condition
        and promptly make all necessary repairs and replacements, including but
        not limited to all windows, glass, doors, walls and wall finishes, floor
        covering, heating, ventilating and air conditioning systems, truck
        doors, dock bumpers, dock plates and levelers, plumbing work and
        Fixtures, roof (exclusive of structural beams), downspouts, electrical
        and lighting systems, and fire sprinklers. Tenant shall at Tenant's
        expense also perform regular removal of trash and debris. Tenant shall,
        at Tenant's own expense, enter into a regularly scheduled preventive
        maintenance/service contract with a maintenance contractor for servicing
        all hot water, heating and air conditioning systems and equipment within
        or serving the Premises. The maintenance contractor and the contract
        must be approved by Landlord which approval shall not be unreasonably
        withheld or delayed. The service contract must include all services
        suggested by the equipment manufacturer within the operation/maintenance
        manual and must become effective and a copy thereof delivered to
        Landlord within thirty (30) days after the Term Commencement Date.

ALTERATIONS

12.     Tenant shall not make, or allow to be made, any Alterations or physical
        additions in, about or to the Premises without obtaining the prior
        written consent of Landlord, which consent shall not be unreasonably
        withheld with respect to proposed alterations and additions which: (a)
        comply with all applicable laws, ordinances, rules and regulations; (b)
        are in Landlord's opinion, compatible with the Project and its
        mechanical, plumbing, electrical, heating/ventilation/air conditioning
        systems, (c) are constructed utilizing Union Labor as set forth in
        Section 2.4. of Exhibit B-1; (d) will not interfere with the use and
        occupancy of any other portion of the Project by any other tenant or its
        invitees; (e) are performed promptly and in a workmanlike manner; (f)
        the Project remains lien free as a result of the construction; and (g)
        are constructed using all new materials. Notwithstanding the foregoing,
        Tenant may, without the prior consent of Landlord, perform alterations
        which do not in the aggregate cost more than (A) in the case of clinical
        laboratories, $200,000 per annum, and (B) in all other cases, $50,000
        per annum provided that (i) Tenant gives Landlord not less than thirty
        (30) days prior written notice thereof containing a description of the
        work to be performed and the estimated cost thereof, and (ii) the work
        to be performed does not impair the structural integrity of the
        Building, is not visible from the exterior of the Building, and does not
        involve or affect any life safety or Building systems, and (iii) the
        work to be performed complies in all respects with the requirements of
        subsections (a), (c), (d), (e), (f) and (g) of this Section 12. The term
        "Alteration" as used herein is defined as alterations, additions,
        substitutions, installations, changes and improvements, but excludes
        minor decorations. Specifically, but without limiting the generality of
        the foregoing, Landlord shall have the right of written consent for all
        plans and specifications for the proposed Alterations or additions,
        construction means and methods, all appropriate permits and licenses,
        any contractor or subcontractor to be employed on the work of Alteration
        or additions, and the time for performance of such work. Tenant shall
        also supply to Landlord any documents and information reasonably
        requested by Landlord in connection with Landlord's consideration of a
        request for approval hereunder. Tenant shall reimburse Landlord for all
        costs which Landlord may reasonably incur in connection with granting
        approval to Tenant for any such Alterations and additions, including any
        costs or expenses which Landlord may reasonably incur in electing to
        have outside architects and engineers review said plans and
        specifications. All such Alterations, physical additions or improvements
        shall remain the property of Tenant until termination of this Lease, at
        which time they shall be and become the property of Landlord if Landlord
        so elects; provided, however, that Landlord may, at Landlord's option,
        (provided that, at the time Landlord grants its consent to such
        Alterations, Landlord notifies Tenant in writing that removal will be
        required), require that Tenant, at Tenant's expense, remove any or all
        Alterations, additions, improvements and partitions made by Tenant and
        restore the Premises by the termination of this Lease, whether by lapse
        of time, or otherwise, to their condition existing prior to the
        construction of any such alterations, additions, partitions or leasehold
        improvements. All such removals and restoration shall be accomplished in
        a good and workmanlike manner so as not to cause any damage to the
        Premises or Project whatsoever. If Tenant fails to so remove such
        alterations, additions, improvements and partitions or Tenant's Trade
        Fixtures or furniture, Landlord may keep and use them or remove any of
        them and cause them to be stored or sold in accordance with applicable
        law, at Tenant's sole expense. In addition to and wholly apart from
        Tenant's obligation to pay Tenant's Proportionate Share of Basic
        Operating Cost, Tenant shall be responsible for and shall pay prior to
        delinquency any taxes or governmental service fees, possessory interest
        taxes, fees or charges in lieu of any such taxes, capital levies, or
        other charges imposed upon, levied with respect to or assessed against
        its personal property, on the value of the alterations, additions or
        improvements within the Premises, and on Tenant's interest pursuant to
        this Lease. To the extent that any such taxes are not separately
        assessed or billed to Tenant, Tenant shall pay the amount thereof as
        invoiced to Tenant by Landlord.

SIGNS

13.     All signs, notices, graphics and advertising balloons of every kind or
        character, visible in or from public view or corridors, the common areas
        or the exterior of the Premises, shall be subject to Landlord's prior
        written approval. Landlord shall provide, at Landlord's cost,
        directional signage on the Project identifying the location of the
        Building. Tenant shall not place or maintain any banners whatsoever or
        any window decor in or on any exterior window or window fronting upon
        any common areas or service area or upon any truck doors or man doors
        without Landlord's prior written approval. Any installation of signs or
        graphics on or about the Premises and Project shall be subject to any
        applicable governmental laws, CC&Rs, ordinances, regulations and to any
        other requirements imposed by Landlord. Tenant shall remove all such
        signs and graphics prior to the termination of this Lease. Such
        installations and removals shall be made in such manner as to avoid
        injury or defacement of the Premises, the Building or the Project and
        any other improvements contained therein, and Tenant shall repair any
        injury or defacement, including without limitation, discoloration caused
        by such installation or removal.

INSPECTION/POSTING NOTICES

14.     After reasonably notice, except in emergencies where no such notice
        shall be required, Landlord, and Landlord's agents and representatives,
        shall have the right to enter the Premises to inspect the same, to
        clean, to perform such work as may be permitted or required hereunder,
        to make repairs or alterations to the Premises or Project or to other
        tenant spaces therein, to deal with emergencies, to post such notices as
        may

                                       7
<PAGE>   11

be permitted or required by law to prevent the perfection of liens against
Landlord's interest in the Project or to exhibit the Premises to prospective
tenants, purchasers, encumbrances or others, or for any other purpose as
Landlord may deem necessary or desirable; provided, however, that Landlord
shall use reasonable efforts not to unreasonably interfere with Tenant's
business operations and shall not, except in the case of an emergency, enter
areas of the Premises marked by Tenant as "sensitive" unless accompanied by
Tenant's representative which Tenant shall make available to Landlord for such
inspections. Tenant shall not be entitled to any abatement of Rent by reason of
the exercise of any such right of entry. At any time within six (6) months prior
to the end of the Term, Landlord shall have the right to erect on the Premises
and/or Project a suitable sign indicating that the Premises are available for
lease. Tenant shall give written notice to Landlord at least thirty (30) days
prior to vacating the Premises and shall meet with Landlord for a joint
inspection of the Premises at the time of vacating. In the event of Tenant's
failure to give such notice or participate in such joint inspection, Landlord's
inspection at or after Tenant's vacating the Premises shall conclusively be
deemed correct for purposes of determining Tenant's responsibility for repairs
and restoration.

UTILITIES

     15. Tenant shall pay directly for all water, gas, heat, air conditioning,
light, power, telephone, sewer, sprinkler charges and other utilities and
services used on or from the Premises, together with any taxes, penalties,
surcharges or the like pertaining thereto, and maintenance charges for
utilities and shall furnish all electric light bulbs, ballasts and tubes. If
any such services are not separately metered to Tenant, Tenant shall pay a
reasonable proportion, as determined by Landlord, of all charges jointly
serving other premises. Landlord shall not be liable for any damages (unless
caused by Landlord's gross negligence or willful misconduct) directly or
indirectly resulting from nor shall the Rent or any monies owed Landlord under
this Lease herein reserved be abated by reason of: (a) the installation, use or
interruption of use of any equipment used in connection with the furnishing of
any such utilities or services; (b) the failure to furnish or delay in
furnishing any such utilities or services when such failure or delay is caused
by acts of God or the elements, labor disturbances of any character, or any
other accidents or other conditions beyond the reasonable control of Landlord;
or (c) the limitation, curtailment, rationing or restriction on use of water,
electricity, gas or any other form of energy or any other service or utility
whatsoever serving the Premises or Project. Landlord shall be entitled to
cooperate voluntarily and in a reasonable manner with the efforts of national,
state or local governmental agencies or utility suppliers in reducing energy or
other resource consumption. The obligation to make services available hereunder
shall be subject to the limitations of any such voluntary, reasonable program.

SUBORDINATION

     16. Without the necessity of any additional document being executed by
Tenant for the purpose of effecting a subordination, this Lease shall be
subject and subordinate at all times to: (a) all ground leases or underlying
leases which may now exist or hereafter be executed affecting the Premises
and/or the land upon which the Premises and Project are situated, or both; and
(b) conditioned upon Tenant's receipt of a nondisturbance agreement in the
lender's customary form, any mortgage or deed of trust which may now exist or
be placed upon said Project, land, ground leases or underlying leases, or
Landlord's interest or estate in any of said items which is specified as
security. Notwithstanding the foregoing, Landlord shall have the right to
subordinate or cause to be subordinated any such ground leases or underlying
leases or any such liens to this Lease. In the event that any ground lease or
underlying lease terminates for any reason or any mortgage or deed of trust is
foreclosed or a conveyance in lieu of foreclosure is made for any reason, Tenant
shall, notwithstanding any subordination, attorn to and become the Tenant of
the successor in interest to Landlord at the option of such successor in
interest. Within ten (10) days after request by Landlord, and conditioned upon
Tenant's receipt of a nondisturbance agreement in the lender's customary form,
Tenant shall execute and deliver any additional documents evidencing Tenant's
attornment or the subordination of this Lease with respect to any such ground
leases or underlying leases or any such mortgage or deed of trust, in the form
requested by Landlord or by any ground landlord, mortgagee, or beneficiary
under a deed of trust.

FINANCIAL STATEMENTS

     17. At the request of Landlord, Tenant shall provide to Landlord Tenant's
current financial statement or other information discussing financial worth of
Tenant within thirty (30) days after the date of Landlord's request, which
Landlord shall use solely for purposes of this Lease and in connection with the
ownership, management and disposition of the Project.

ESTOPPEL CERTIFICATE

     18. Tenant agrees from time to time, within ten (10) days after request of
Landlord, to deliver to Landlord, or Landlord's designee, an estoppel
certificate per Exhibit D or in an alternate form that the requesting party may
require stating that this Lease is in full force and effect, the date to which
Rent has been paid, the unexpired portion of this Lease, and such other matters
pertaining to this Lease as may be reasonably requested by Landlord. Landlord
and Tenant intend that any statement delivered pursuant to this Paragraph may be
relied upon by any mortgagee, beneficiary, purchaser or prospective purchaser of
the Project or any interest therein. The parties agree that Tenant's obligation
to furnish such estoppel certificates in a timely fashion is a material
inducement for Landlord's execution of the Lease, and shall be an Event of
Default if Tenant fails to fully comply. Tenant acknowledges that failure to
provide the Estoppel Certificate to Landlord or Landlord's designee within the
time provided above may cause Landlord to incur substantial damages. Tenant
hereby agrees to indemnify Landlord for any liabilities, losses, costs, damages
(including, without limitation, compensatory, incidental and consequential
damages), injuries or expenses arising from the failure of Tenant to deliver the
Estoppel certificate in the time and manner provided in this Paragraph. In
addition to any other remedies Landlord may have at law and equity, Landlord
shall be entitled to specific performance of this Paragraph. The provisions of
this Paragraph shall survive the expiration or termination of this Lease with
respect to any claims or liability occurring prior to such expiration or
termination. Landlord shall execute (and acknowledge if required by any lender)
and deliver to Tenant, within ten (10) business days after Tenant provides such
to Landlord, a statement in writing certifying that, to the best of Landlord's
actual knowledge this Lease is unmodified and in full force and effect (or, if
modified, stating the nature of such modification), the date to which the Base
Rent and other charges are paid in advance, if any, and acknowledging that there
are not, to Landlord's actual knowledge, any uncured defaults on the part of
Tenant hereunder or specifying such defaults as are claimed. Landlord's failure
to deliver such statement within such time shall be conclusive upon the Landlord
that (a) this Lease is in full force and effect, without modification except as
may be represented by Tenant; (b) there are no uncured defaults in Tenant's
performance; and (c) not more than one month's Rent has been paid in advance.

SECURITY DEPOSIT

     19. Tenant agrees to deposit with Landlord upon execution of this Lease, a
Security Deposit as stated in the Basic Lease Information, which sum shall be
held by Landlord, without obligation for interest, as security for

                                       8
<PAGE>   12
SECURITY DEPOSIT (continued)

the performance of Tenant's covenants and obligations under this Lease. The
Security Deposit is not an advance rental deposit or a measure of damages
incurred by Landlord in case of Tenant's Default. Landlord is not required to
keep all or any part of the Security Deposit separate from its general
accounts. Upon the occurrence of any Event of Default by Tenant Landlord may,
from time to time, without prejudice to any other remedy provided herein or
provided by law, use such fund to the extent necessary to make good any arrears
of Rent or other payments due to Landlord hereunder, and any other damage,
injury, expense or liability caused by such Event of Default, and Tenant shall
pay to Landlord, on demand, the amount so applied in order to restore the
Security Deposit to its original amount. Although the Security Deposit shall be
deemed the property of Landlord, any remaining balance of such deposit shall be
returned by Landlord to Tenant at such time after termination of this Lease
that all of Tenant's obligations under this Lease have been fulfilled. Landlord
may use and commingle the Security Deposit with other funds of Landlord. Upon
execution of this Lease, as collateral for the full and faithful performance by
Tenant of all of its obligations under this Lease and for all losses and
damages Landlord may suffer as a result of any default by Tenant under this
Lease, Tenant shall deliver to Landlord an unconditional irrevocable negotiable
Letter of Credit in the amount of $950,000.00 meeting the requirements of this
paragraph (the "Letter of Credit"). The Letter of Credit shall (a) designate
Landlord or its assignees as beneficiary, (b) be issued by a financial
institution approved by Landlord, (c) subject to the remaining provisions
hereof, remain in full force and effect during the entire term of this Lease
and any extension or holdover period, plus an additional period of three (3)
months, and (d) be in form satisfactory to Landlord. The Letter of Credit may
be for an initial term of fifteen (15) months so long as it provides that
Landlord may immediately draw the full amount of the letter of Credit if the
issuer does not give Landlord written notice of renewal for additional
successive periods of twelve (12) months at least sixty (60) days prior to the
expiration date. Landlord is authorized to draw on the Letter of Credit from
time to time in the event that (i) Landlord advises the issuer of the Letter of
Credit that there is an Event of Default by Tenant under this Lease, or (ii)
the issuer gives Landlord noticed that the Letter of Credit will be terminated
or will expire prior to the initial term of fifteen (15) months, or (iii) the
issuer does not give Landlord a written notice of renewal of the term of the
Letter of Credit as required by the preceding sentence. In the event Landlord
shall draw on the Letter of Credit in the circumstances described in clause (i)
of this paragraph, Landlord shall be permitted to draw an amount necessary in
Landlord's good faith estimation to fully cure any such Event of Default,
including any damage, injury, expense or liability caused or projected to be
caused by such Event of Default, and Tenant shall, on demand from Landlord,
increase the letter of Credit up to its full original amount. In the event
Landlord shall draw on the Letter of Credit in the circumstances described in
clause (ii) or (iii) of this paragraph, Landlord shall be permitted to draw the
entire amount of the Letter of Credit, in which case such sum shall be held by
Landlord as an additional Security Deposit and administered as such. Landlord
may draw on the Letter of Credit regardless of whether or not Tenant disputes
that an Event of Default has occurred and regardless of any other disputes or
claims between the parties. Landlord shall not be required to deliver any
certifications or documentation of any kind to the issuer in order to make a
draw, other than Landlord's written demand certifying that an Event of Default
has occurred. The issuer shall not be required to conduct any inquiry or
investigation before paying Landlord the requested amount of the draw. Landlord
may assign, transfer or pledge the Letter of Credit to any lender or purchaser
in connection with any financing  or sale of the Premises. Provided that at no
time during the initial thirty-six (36) months of the Lease Term Tenant has
been in material default under this Lease beyond any applicable cure period,
Landlord shall authorize and consent to a reduction by $100,000 of the then
required amount of the Letter of Credit as of the thirty-seventh (37th) month of
the Lease Term. Provided that at no time during the initial forty-eight (48)
months of the Lease Term Tenant has been in default under this Lease beyond any
applicable cure period, Landlord shall authorize and consent to a reduction by
$100,000 of the then required amount of the Letter of Credit as of the
forty-ninth (49th) month of the lease Term. Provided that at no time during the
initial sixty (60) months of the Lease Term Tenant has been in material default
under this Lease beyond any applicable cure period, Landlord shall authorize
and consent to a reduction by $300,000 of the then required amount of the
Letter of Credit as of the sixty-first (61st) month of the Lease Term. Prior to
the commencement of any of Tenant's Work, and as a condition to Tenant's right
to Early Possession and to commence Tenant's Work, Tenant shall provide Landlord
with proof of Tenant's financial ability to complete and pay fully the cost of
the Tenant's Work. Such proof shall consist of (i) an unconditional guaranty to
Landlord from Tenant's third party lender (acceptable to Landlord), in the form
acceptable to Landlord, that such lender shall pay as and when due all of
Tenant's monetary obligations under this Lease with respect to the performance
of Tenant's Work, or (ii) payment and completion bonds, in form and from
issuers reasonably acceptable to Landlord, bonding the full lien-free
completion of all of  Tenant's Work, or (iii) Tenant's deposit into an escrow,
with instructions for disbursement thereof which are acceptable to Landlord, of
all sums reasonably estimated to be payable by Tenant to fulfill its monetary
obligations under this Lease with respect to the performance of Tenant's Work,
or (iv) Tenant maintaining until lien-free completion of Tenant's Work a
minimum unrestricted cash balance of immediately payable funds in the sum of
$10,000,000. Upon Landlord's acceptance of Tenant's proof of financial ability
as set forth herein and upon commencement of the construction of the Tenant
Improvements, Landlord shall authorize and consent to the reduction of the
Letter of Credit to a total sum of $500,000. If, upon lien-free completion of
the Tenant's Work, (A) Tenant's third party lender (acceptable to Landlord)
agrees irrevocably and unconditionally in writing for the benefit of Landlord to
either (i) in case of an Event of Default under the Lease, release its lien or
other security interest in all of Tenant's equipment which is listed on Exhibit
B-3 hereto or (ii) perform (as guarantor) all of Tenant's obligations under the
Lease throughout the remaining Term of the Lease and (B) the total sum actually
expended for Tenant's Work, including the Tenant Improvement Allowance, was not
less than $85.00 per rentable square foot of the Premises, then Landlord shall
authorize and consent to cancellation of the Letter of Credit.

TENANT'S REMEDIES

20. The liability of Landlord to Tenant for any default by Landlord under
the terms of this Lease are not personal obligations of the Landlord or other
trustees, advisors, partners, directors, officers and shareholders of Landlord,
and Tenant agrees to look solely to Landlord's interest in the Project for the
recovery of any amount from Landlord, and shall not look to other assets of
Landlord nor seek recourse against the assets of the Landlord or other
trustees, advisors, partners, directors, officers and shareholders of Landlord.
Any lien obtained to enforce any such judgment and any levy of execution thereon
shall be subject and subordinate to any lien, mortgage or deed of trust on the
Project.

ASSIGNMENT AND SUBLETTING

21. A. GENERAL. Except in connection with a Permitted Assignee, Tenant
shall not assign this Lease or sublet the Premises or any part thereof without
Landlord's prior written approval which shall not be unreasonably withheld or
delayed. Except in connection with a Permitted Assignee, if Tenant desires to
assign this Lease.

                                       9

<PAGE>   13
      or sublet any or all of the Premises,it must present the Landlord with an
      ERISA Certificate in compliance with the provisions of Paragraph 37, of
      this Lease signed by the potential assignee or subtenant, demonstrate that
      the potential assignee or subtenant has adequate credit and demonstrate to
      the Landlord's satisfaction that the potential assignee's or subtenant's
      proposed use of the Premises is compatible with the Project and complies
      with all applicable laws, ordinances, rules and regulations. Except in
      connection with a Permitted Assignee, if Tenant desires to assign this
      Lease or sublet any or all of the Premises, Tenant shall give Landlord
      written notice sixty(60) days prior to the anticipated effective date of
      the assignment or sublease. Landlord shall then have a period of fifteen
      (15) days following receipt of such notice to notify Tenant in writing
      that Landlord elects either: (1) to permit Tenant to assign this Lease or
      sublet such space, subject, however, to Landlord's prior written approval
      of the proposed assignee or subtenant and of any related documents or
      agreements associated with the assignment or sublease or (2) refuse to
      consent. If Landlord should fail to notify Tenant in writing of such
      election within said period, Landlord shall be deemed to have refused to
      consent to the proposed assignment or subletting. Without limiting the
      other instances in which it may be reasonable for Landlord to withhold
      Landlord's consent to an assignment or subletting, Landlord and Tenant
      acknowledge that it shall be reasonable for Landlord to withhold
      Landlord's consent in the following instances: The use of the Premises by
      such proposed assignee or subtenant would not be a permitted use or would
      increase the Parking Density of the Project; the proposed assignee or
      subtenant is not of sound financial condition, as reasonably determined by
      Landlord after receipt of the proposed assignee's or subtenant's financial
      statements in form satisfactory to Landlord; the proposed assignee or
      subtenant is a governmental agency; the proposed assignee or subtenant
      does not have a good reputation as a tenant of property; the proposed
      assignee or subtenant is a person with whom Landlord is negotiating to
      lease comparable space in the Project; the assignment or subletting would
      entail any alterations which would lessen the value of the leasehold
      improvements in the Premises; or if Tenant is in Default of any obligation
      of Tenant under this Lease. Failure by Landlord to approve a proposed
      assignee or subtenant shall not cause a termination of this Lease.
      Notwithstanding anything in this Section 21A to the contrary, Tenant may,
      without the consent of Landlord, assign this Lease or sublet the Premises
      or any portion thereof to any entity with a demonstrated net worth which
      is greater than $10,000,000 which (i) controls, is controlled by or is
      under common control with Tenant or which (ii) results from a merger or
      reorganization or a consolidation with Tenant, or which (iii) acquires all
      of the stock or assets of Tenant, as a going concern, with respect to the
      business that is being conducted on the Premises ("Permitted Assignees").
      Any assignment or subletting to a Permitted Assignee shall be subject to
      and conditioned upon the following: (a) Tenant shall not be in Default of
      any of its obligations under this Lease, (b) Tenant shall give Landlord at
      least sixty (60) days prior written notice of any such proposed
      transaction, (c) the Permitted Assignee shall have a net equity of at
      least Ten Million Dollars ($10,000,000) which has been demonstrated in
      appropriate documentation delivered to Landlord prior to the occurrence of
      such transaction, (d) the Permitted Assignee shall execute an ERISA
      Certificate as set forth in Paragraph 38, and (e) Tenant shall provide
      Landlord with full and complete copies of all documents executed by Tenant
      and the Permitted Assignee in connection with such assignment or
      subletting. The right to assign and/or sublet the Premises is personal to
      the Tenant and any Permitted Assignee and shall not inure to the benefit
      of any other assignee, subtenant or successor of Tenant.

      B. BONUS RENT. Any Rent or other consideration realized by Tenant under
      any approved sublease or assignment in excess of the Base Rent payable
      hereunder, after amortization of a reasonable brokerage commission,
      reasonable attorneys' fees related to the subletting, and the cost of
      tenant improvements, if any, paid for by Tenant in excess of Tenant's
      Work, shall be divided and paid sixty (60%) percent to Tenant, forty (40%)
      percent to Landlord; provided, however, that if Tenant expends $70.00 per
      rentable square foot in excess of the Tenant improvement Allowance for
      Tenant's Work, exclusive of soft costs, the aforesaid division shall be
      seventy-five percent (75%) to Tenant and twenty-five percent (25%) to
      Landlord. In any subletting or assignment undertaken by Tenant, Tenant
      shall diligently seek to obtain the maximum rental amount available in the
      marketplace for such subletting or assignment.

      C. CORPORATION. If Tenant is a corporation, a transfer of corporate shares
      by sale, assignment, bequest, inheritance, operation of law or other
      disposition (including such a transfer to or by a receiver or trustee in
      federal or state bankruptcy, insolvency or other proceedings), so as to
      result in a change in the present control of such corporation or any of
      its parent corporations by the person or persons owning a majority of said
      corporate shares, shall constitute an assignment for purposes of this
      Lease, provided, however, that this Section 21C shall not apply to any
      transfer in connection with a bonafide financing or capitalization of
      Tenant, or if Tenant is or becomes a public company.

      D. PARTNERSHIP. If Tenant is a partnership, joint venture or other
      incorporated business form, a transfer of the interest of persons, firms
      or entities responsible for managerial control of Tenant by sale,
      assignment, bequest, inheritance, operation of law or other disposition,
      so as to result in a change in the present control of said entity and/or a
      change in the identity of the persons responsible for the general credit
      obligations of said entity shall constitute an assignment for all purposes
      of this Lease, provided that this Section shall not apply to a transfer in
      connection with a bonafide financing or capitalization of Tenant.

      E. LIABILITY. No assignment or subletting by Tenant shall relieve Tenant
      of any obligation under this Lease. Any assignment or subletting which
      conflicts with the provisions hereof shall be void.

      F. OPTIONS. Except in connection with a Permitted Assignee, in the event
      of assignment or subletting by Tenant, any and all options to renew and
      expand shall terminate automatically.

AUTHORITY OF PARTIES

22. Landlord represents and warrants that it has full right and authority to
enter into this Lease and to perform all of Landlord's obligations hereunder.
Tenant represents and warrants that it has full right and authority to enter
into this Lease and to perform all of Tenant's obligations hereunder.

CONDEMNATION

23. A. CONDEMNATION RESULTING IN TERMINATION. If the whole or any
substantial part of the Project of which the Premises are a part should be
taken or condemned for any public use under governmental law, ordinance or
regulation, or by right of eminent domain, or by private purchase in lieu
thereof, and the taking would prevent or materially interfere with the
Permitted Use of the Premises, this Lease shall terminate and the Rent shall be
abated during the unexpired portion of this Lease, effective when the physical
taking of said Premises shall have occurred.

                                       10
<PAGE>   14
      B.    CONDEMNATION NOT RESULTING IN TERMINATION. If a portion of the
      Project of which the Premises are a part should be taken or condemned for
      any public use under any governmental law, ordinance, or regulation, or by
      right of eminent domain, or by private purchase in lieu thereof, and this
      Lease is not terminated as provided in Paragraph 23.A. above, this Lease
      shall not terminate, but the Rent payable hereunder during the unexpired
      portion of the Lease shall be reduced, beginning on the date when the
      physical taking shall have occurred, to such amount as may be fair and
      reasonable under all of the circumstances.

      C.    AWARD. Landlord shall be entitled to any and all payment, income,
      rent, award, or any interest therein whatsoever which may be paid or made
      in connection with such taking or conveyance and Tenant shall have no
      claim against Landlord or otherwise for the value of any unexpired
      portion of this Lease. Notwithstanding the foregoing, any compensation
      specifically awarded Tenant for loss of business, Tenant's personal
      property, moving costs or loss of goodwill, shall be and remain the
      property of Tenant.

CASUALTY DAMAGE

24.   A.    GENERAL. If the Premises or the Building should be damaged or
      destroyed by fire, tornado, earthquake or other casualty, Tenant shall
      give immediate written notice thereof to Landlord. Within thirty (30)
      days after Landlord's receipt of such notice, Landlord shall notify
      Tenant whether in Landlord's opinion such repairs can reasonably be made
      either: (1) within ninety (90) days; (2) in more than ninety (90) days
      but in less than one hundred eighty (180) days; or (3) in more than one
      hundred eighty (180) days from the date of such notice. Landlord's
      determination shall be binding on Tenant.

      B.    LESS THAN 90 DAYS. If the Premises or the Building should be
      damaged by fire, tornado, earthquake or other casualty but only to such
      extent that rebuilding or repairs can in Landlord's estimation be
      reasonably completed within ninety (90) days after the date of such
      damage, this Lease shall not terminate, and provided that insurance
      proceeds are available to fully repair the damage, Landlord shall proceed
      to rebuild and repair the Premises in the manner determined by Landlord,
      except that Landlord shall not be required to rebuild, repair or replace
      any part of the partitions, Fixtures, additions and other leasehold
      improvements which may have been placed in, on or about the Premises. If
      the Premises are untenantable in whole or in part following such damage,
      the Rent payable hereunder during the period in which they are
      untenantable shall be abated proportionately, but only to the extent of
      rental abatement insurance proceeds received by the Landlord during the
      time and to the extent the Premises are unfit for occupancy. In the event
      that Landlord should fail to complete such repairs and rebuilding within
      one hundred eighty days (180) days after the date upon which Landlord is
      notified by Tenant of such damage, such period of time to be extended for
      delays caused by the fault or neglect of Tenant or for delays (but not by
      more than forty-five (45) days for such delays) because of acts of God,
      acts of public agencies, labor disputes, strikes, fires, freight
      embargoes, rainy or stormy weather, inability to obtain materials,
      supplies or fuels, or delays of the contractors or subcontractors or any
      other causes or contingencies beyond the reasonable control of Landlord,
      Tenant may at Tenant's option within ten (10) days after the expiration
      of such one hundred eighty (180) day period (as such may be extended),
      terminate this Lease by delivering written notice of termination to
      Landlord as Tenant's exclusive remedy, whereupon all rights hereunder
      shall cease and terminate thirty (30) days after Landlord's receipt of
      such termination notice.

      C.    GREATER THAN 90 DAYS. If the Premises or the Building should be
      damaged by fire, tornado, earthquake or other casualty but only to such
      extent that rebuilding or repairs can in Landlord's estimation be
      reasonably completed in more than ninety (90) days but in less than one
      hundred eighty (180) days, then Landlord shall have the option of either:
      (1) terminating the Lease effective upon the date of the occurrence of
      such damage, in which event the Rent shall be abated during the unexpired
      portion of the Lease; or (2) electing to rebuild or repair the Premises to
      substantially the condition in which they existed prior to such damage,
      provided that insurance proceeds are available, to fully repair the
      damage, except that Landlord shall not be required to rebuild, repair or
      replace any part of the partitions, Fixtures, additions and other
      improvements which may have been placed in, on or about the Premises. If
      the Premises are untenantable in whole or in part following such damage,
      the Rent payable hereunder during the period in which they are
      untenantable shall be abated proportionately, but only to the extent of
      rental abatement insurance proceeds received by the Landlord during the
      time and to the extent the Premises are unfit for occupancy. In the event
      that Landlord should fail to complete such repairs and rebuilding within
      one hundred eighty days (180) days after the date upon which Landlord is
      notified by Tenant of such damage, such period of time to be extended for
      delays caused by the fault or neglect of Tenant or for delays (but not by
      more than forty-five (45) days for such delays) because of acts of God,
      acts of public agencies, labor disputes, strikes, fires, freight
      embargoes, rainy or stormy weather, inability to obtain materials,
      supplies or fuels, or delays of the contractors or subcontractors or any
      other causes or contingencies beyond the reasonable control of Landlord,
      Tenant may at Tenant's option within ten (10) days after the expiration
      of such one hundred eighty (180) day period (as such may be extended),
      terminate this Lease by delivering written notice of termination to
      Landlord as Tenant's exclusive remedy, whereupon all rights hereunder
      shall cease and terminate thirty (30) days after Landlord's receipt of
      such termination notice.

      D.    GREATER THAN 180 DAYS. If the Premises or the Building should be so
      damaged by fire, tornado, earthquake or other casualty that rebuilding or
      repairs cannot in Landlord's estimation be completed within one hundred
      eighty (180) days after such damage, this Lease shall terminate and the
      Rent shall be abated during the unexpired portion of this Lease,
      effective upon the date of the occurrence of such damage.

      E.    TENANT'S FAULT. If the Premises or any other portion of the
      Building is damaged by fire or other casualty resulting from the fault,
      negligence, or breach of this Lease by Tenant or any of Tenant's Parties,
      Base Rent and Additional Rent shall not be diminished during the repair
      of such damage and Tenant shall be liable to Landlord for the cost and
      expense of the repair and restoration of the Building caused thereby to
      the extent such cost and expense is not covered by insurance proceeds.

      F.    UNINSURED CASUALTY. Notwithstanding anything herein to the
      contrary, in the event that the Premises or the Building is damaged or
      destroyed and are not fully covered by the insurance proceeds received by
      Landlord or in the event that the holder of any indebtedness secured by a
      mortgage or deed of trust covering the Premises requires that the
      insurance proceeds be applied to such indebtedness, then in either case
      Landlord shall have the right to terminate this Lease by delivering
      written notice of termination to Tenant within thirty (30) days after the
      date of notice to Landlord that said damage or destruction is not fully
      covered

                                       11

<PAGE>   15
     by insurance or such requirement is made by any such holder, as the case
     may be, whereupon all rights and obligations hereunder shall cease and
     terminate.

     G.   WAIVER. Except as otherwise provided in this Paragraph 24., Tenant
     hereby waives the provisions of Sections 1932(a), (1933(4), 1941 and 1942
     of the Civil Code of California.

HOLDING OVER

25.  If Tenant shall retain possession of the Premises or any portion thereof
     without Landlord's consent following the expiration of the Lease or sooner
     termination for any reason, then Tenant shall pay to Landlord for each day
     of such retention 150% of the amount of the daily rental as of the last
     month prior to the date of expiration or termination. Tenant shall also
     indemnify, defend, protect and hold Landlord harmless from any loss,
     liability or cost, including reasonable attorneys' fees, resulting from
     delay by Tenant in surrendering the Premises, including, without
     limitation, any claims made by any succeeding tenant founded on such delay.
     Acceptance of Rent by Landlord following expiration or termination shall
     not constitute a renewal of this Lease, and nothing contained in this
     Paragraph 25, shall waive Landlord's right of reentry or any other right.
     Unless Landlord consents in writing to Tenant's holding over, Tenant shall
     be only a Tenant at sufferance, whether or not Landlord accepts any Rent
     from Tenant while Tenant is holding over without Landlord's written
     consent. Additionally, in the event that upon termination of the Lease,
     Tenant has not fulfilled its obligation with respect to repairs and cleanup
     of the Premises or any other Tenant obligations as set forth in this Lease,
     then Landlord shall have the right to perform any such obligations as it
     deems necessary at Tenant's sole cost and expense.

DEFAULT

26.  A.   EVENTS OF DEFAULT. The occurrence of any of the following shall
     constitute an event of default ("Event of Default" or "Default") on the
     part of Tenant:

     (1)  ABANDONMENT. Abandonment of the Premises for a continuous period in
     excess of five (5) days unless Tenant notifies Landlord in writing in
     advance of such abandonment keeps the Premises locked and secure at all
     times, and timely performs and continues to perform all of the Tenant's
     other monetary and non-monetary obligations under this Lease. Tenant waives
     any right to notice Tenant may have under Section 1951.3 of the Civil Code
     of the State of California, the terms of this Paragraph 26.A, being deemed
     such notice to Tenant as required by said Section 1951.3.

     (2)  NONPAYMENT OF RENT. Failure to pay any installment of Rent or any
     other amount due and payable hereunder when said payment is due.

     (3)  OTHER OBLIGATIONS. Failure to perform any obligation, agreement or
     covenant under this Lease other than those matters specified in
     subparagraphs (1) and (2) of this Paragraph 26.A., such failure continuing
     for fifteen (15) days after written notice of such failure. In the event
     Tenant has commenced to cure the failure of performance within the fifteen
     (15) day period, but has not completed the cure despite diligent attempts
     to do so, Tenant shall have an additional period not to exceed thirty (30)
     additional days after such fifteen (15) day period to complete such cure so
     long as Tenant continues to diligently pursue the cure to completion during
     such additional thirty (30) day period.

     (4)  GENERAL ASSIGNMENT. A general assignment by Tenant for the benefit of
     creditors.

     (5)  BANKRUPTCY. The filing of any voluntary petition in bankruptcy by
     Tenant, or the filing of an involuntary petition by Tenant's creditors,
     which involuntary petition remains undischarged for a period of sixty (60)
     days. In the event that under applicable law the trustee in bankruptcy or
     Tenant has the right to affirm this Lease and continue to perform the
     obligations of Tenant hereunder, such trustee or Tenant shall, in such time
     period as may be permitted by the bankruptcy court having jurisdiction,
     cure all Defaults of Tenant hereunder outstanding as of the date of the
     affirmance of this Lease and provide to Landlord such adequate assurances
     as may be necessary to ensure Landlord of the continued performance of
     Tenant's obligations under this Lease.

     (6)  RECEIVERSHIP. The employment of a receiver to take possession of
     substantially all of Tenant's assets or the Premises, if such appointment
     remains undismissed or undischarged for a period of thirty (30) days after
     the order thereof.

     (7)  ATTACHMENT. The attachment, execution or other judicial seizure of all
     or substantially all of Tenant's assets or the Premises, if such attachment
     or other seizure remains undismissed or undischarged for a period of thirty
     (30) days after the levy thereof.

     (8)  DELAYS. Any delay in the construction of Landlord's Work caused by
     Tenant as provided in Exhibit B-1.

     B.   REMEDIES UPON DEFAULT.

     (1)  TERMINATION. In the event of the occurrence of any Event of Default,
     Landlord shall have the right to give a written termination notice to
     Tenant, and on the date specified in such notice, Tenant's right to
     possession shall terminate, and this Lease shall terminate unless on or
     before such date all arrears of rental and all other sums payable by Tenant
     under this Lease and all costs and expenses incurred by or on behalf of
     Landlord hereunder shall have been paid by Tenant and all other Events of
     Default of this Lease by Tenant at the time existing shall have been fully
     remedied to the satisfaction of Landlord. At any time after such
     termination, Landlord may recover possession of the Premises or any part
     thereof and expel and remove therefrom Tenant and any other person
     occupying the same, by any lawful means, and again repossess and enjoy the
     Premises without prejudice to any of the remedies that Landlord may have
     under this Lease, or at law or equity by reason of Tenant's Default or of
     such termination.

     (2)  CONTINUATION AFTER DEFAULT. Even though an Event of Default may have
     occurred, this Lease shall continue in effect for so long as Landlord does
     not terminate Tenant's right to possession under Paragraph 26.B.(1) hereof,
     and Landlord may enforce all of Landlord's rights and remedies under this
     Lease, including without limitation, the right to recover Rent as it
     becomes due, and Landlord, without terminating this Lease, may exercise all
     of the rights and remedies of a landlord under Section 1951.4 of the Civil
     Code of the State of California or any successor code section. Acts of
     maintenance, preservation or efforts to lease the

                                       12
<PAGE>   16
      Premises or the appointment of a receiver upon application of Landlord to
      protect Landlord's interest under this Lease shall not constitute an
      election to terminate Tenant's right to possession.

      C.    DAMAGES AFTER DEFAULT. Should Landlord terminate this Lease pursuant
      to the provisions of Paragraph 26.B.(1) hereof, Landlord shall have the
      rights and remedies of a Landlord provided by Section 1951.2 of the Civil
      Code of the State of California, or successor code sections. Upon such
      termination, in addition to any other rights and remedies to which
      Landlord may be entitled under applicable law, Landlord shall be entitled
      to recover from Tenant: (1) the worth at the time of award of the unpaid
      Rent and other amounts which had been earned at the time of termination;
      (2) the worth at the time of award of the amount by which the unpaid Rent
      which would have been earned after termination until the time of award
      exceeds the amount of such Rent loss that Tenant proves could have been
      reasonably avoided; (3) the worth at the time of award of the amount by
      which the unpaid Rent for the balance of the Term after the time of award
      exceeds the amount of such Rent loss that the Tenant proves could be
      reasonably avoided; and (4) any other amount necessary to compensate
      Landlord for all the detriment proximately caused by Tenant's failure to
      perform Tenant's obligations under this Lease or which, in the ordinary
      course of things, would be likely to result therefrom. The "worth at the
      time of award" of the amounts referred to in (1) and (2), above shall be
      computed at the lesser of the "prime rate," as announced from time to
      time by Wells Fargo, N.A. (San Francisco) plus five (5) percentage
      points, or the maximum interest rate allowed by law ("Applicable Interest
      Rate"). The "worth at the time of award" of the amount referred to in (3)
      above shall be computed by discounting such amount at the Federal
      Discount Rate of the Federal Reserve Bank of San Francisco at the time of
      the award plus one (1%) percent. If this Lease provides for any periods
      during the Term during which Tenant is not required to pay Base Rent or
      if Tenant otherwise receives a Rent concession, then upon the occurrence
      of an Event of Default, Tenant shall owe to Landlord the full amount of
      such Base Rent or value of such Rent concession, plus interest at the
      Applicable Interest Rate, calculated from the date that such Base Rent or
      Rent concession would have been payable.

      D.    LATE CHARGE. If any installment of Rent is not paid on the date
      when due, such amount shall bear interest at the Applicable Interest Rate
      from the date on which said payment shall be due until the date on which
      Landlord shall receive said payment. In addition, Tenant shall pay
      Landlord a late charge equal to five (5%) percent of the delinquency, to
      compensate Landlord for the loss of the use of the amount not paid and
      the administrative costs caused by the delinquency, the parties agreeing
      that Landlord's damage by virtue of such delinquencies would be difficult
      to compute and the amount stated herein represents a reasonable estimate
      thereof. This provision shall not relieve Tenant of Tenant's obligation
      to pay Rent at the time and in the manner herein specified.

      E.    REMEDIES CUMULATIVE. All rights, privileges and elections or
      remedies of the parties are cumulative and not alternative, to the extent
      permitted by law and except as otherwise provided herein.

LIENS

27.   Except for the items scheduled on Exhibit B-3, Tenant shall keep the
      Premises free from liens arising out of or related to work performed,
      materials or supplies furnished or obligations incurred by Tenant or in
      connection with work made, suffered or done by or on behalf of Tenant in
      or on the Premises or Project. In the event that Tenant shall not, within
      ten (10) business days following the imposition of any such lien, cause
      the same to be released of record by payment or posting of a proper bond,
      Landlord shall have, in addition to all other remedies provided herein
      and by law, the right, but not the obligation, to cause the same to be
      released by such means as Landlord shall deem proper, including payment
      of the claim giving rise to such lien. All sums paid by Landlord on
      behalf of Tenant and all expenses incurred by Landlord in connection
      therefor shall be payable to Landlord by Tenant on demand with interest
      at the Applicable Interest Rate. Landlord shall have the right at all
      times to post and keep posted on the Premises any notices permitted or
      required by law, or which Landlord shall deem proper, for the protection
      of Landlord, the Premises, the Project and any other party having an
      interest therein, from mechanics' and materialmen's liens, and Tenant
      shall give Landlord not less than ten (10) business days prior written
      notice of the commencement of any work in the Premises or Project which
      could lawfully give rise to a claim for mechanics' or materialmen's liens.

TRANSFERS BY LANDLORD

28.   In the event of a sale or conveyance by Landlord of the Building or the
      Project or a foreclosure by any creditor of Landlord, the same shall
      operate to release Landlord from any liability upon any of the covenants
      or conditions, express or implied, herein contained in favor of Tenant,
      to the extent required to be performed after the passing of title to
      Landlord's successor-in-interest. In such event, Tenant agrees to look
      solely to the responsibility of the successor-in-interest of Landlord
      under this Lease with respect to the performance of the covenants and
      duties of "Landlord" to be performed after the passing of title to
      Landlord's successor-in-interest. This Lease shall not be affected by any
      such sale and Tenant agrees to attorn to the purchaser or assignee.
      Landlord's successor(s)-in-interest shall not have liability to Tenant
      with respect to the failure to perform all of the obligations of
      "landlord", to the extent required to be performed prior to the date such
      successor(s)-in-interest became the owner of the Building.

RIGHT OF LANDLORD TO PERFORM TENANT'S COVENANTS

29.   All covenants and agreements to be performed by Tenant under any of the
      terms of this Lease shall be performed by Tenant at Tenant's sole cost
      and expense and without any abatement of Rent. If Tenant shall fail to
      pay any sum of money, other than Base Rent and Basic Operating Cost,
      required to be paid by Tenant hereunder or shall fail to perform any
      other act on Tenant's part to be performed hereunder, and such failure
      shall continue for five (5) days after notice thereof by Landlord.
      Landlord may, but shall not be obligated to do so, and without waiving or
      releasing Tenant from any obligations of Tenant, make any such payment or
      perform any such act on Tenant's part to be made or performed. All sums,
      so paid by Landlord and all necessary incidental costs together with
      interest thereon at the Applicable Interest Rate from the date of such
      payment by Landlord shall be payable to Landlord on demand, and Tenant
      covenants to pay such sums, and Landlord shall have, in addition to any
      other right or remedy of Landlord, the same right and remedies in the
      event of the non-payment thereof by Tenant as in the case of Default by
      Tenant in the payment of Base Rent and Basic Operating Cost.

WAIVER

30.   If either Landlord of Tenant waives the performance of any term, covenant
      or condition contained in this Lease, such waiver shall not be deemed to
      be a waiver of any subsequent breach of the same or any other term,
      covenant or condition contained herein. The acceptance of Rent by
      Landlord shall not constitute a waiver of any preceding breach by Tenant
      of any term, covenant or condition of this Lease, regardless of
      Landlord's knowledge of such preceding breach at the time Landlord
      accepted such Rent. Failure by

<PAGE>   17
Landlord to enforce any of the terms, covenants or conditions of this Lease for
any length of time shall not be deemed to waive or to decrease the right of
Landlord to insist thereafter upon strict performance by Tenant. Waiver by
Landlord of any term, covenant or condition contained in this Lease may only be
made by a written document signed by Landlord.

NOTICES

31.  Each provision of this Lease or of any applicable governmental laws,
     ordinances, regulations and other requirements with reference to sending,
     mailing or delivery of any notice or the making of any payment by Landlord
     or Tenant to the other shall be deemed to be complied with when and if the
     following steps are taken:

     A. RENT. All Rent and other payments required to be made by Tenant to
     Landlord hereunder shall be payable to Landlord at the address set forth in
     the Basic Lease Information, or at such other address as Landlord may
     specify from time to time by written notice delivered in accordance
     herewith. Tenant's obligation to pay Rent and any other amounts to Landlord
     under the terms of this Lease shall not be deemed satisfied until such Rent
     and other amounts have been actually received by Landlord.

     B. OTHER. All notices, demands, consents and approvals which may or are
     required to be given by either party to the other hereunder shall be in
     writing and either personally delivered, sent by commercial overnight
     courier, sent by facsimile, or mailed, certified or registered, postage
     prepaid, and addressed to the party to be notified at the address for such
     party as specified in the Basic Lease Information or to such other place as
     the party to be notified may from time to time designate by at least
     fifteen (15) days notice to the notifying party. Notices shall be deemed
     served upon receipt or refusal to accept delivery. Tenant appoints as its
     agent to receive the service of all default notices and notice of
     commencement of unlawful detainer proceedings the person in charge of or
     apparently in charge of occupying the Premises at the time, and, if there
     is no such person, then such service may be made by attaching the same on
     the main entrance of the Premises.

ATTORNEYS' FEES

32.  In the event that Landlord places the enforcement of this Lease, or any
     part thereof, or the collection of any Rent due, or to become due
     hereunder, or recovery of possession of the Premises in the hands of an
     attorney, Tenant shall pay to Landlord, upon demand, Landlord's reasonable
     attorneys' fees and court costs. In any action which Landlord or Tenant
     brings to enforce its respective rights hereunder, the unsuccessful party
     shall pay all costs incurred by the prevailing party including reasonable
     attorneys' fees, to be fixed by the court, and said costs and attorneys'
     fees shall be a part of the judgment in said action.

SUCCESSORS AND ASSIGNS

33.  This Lease shall be binding upon and inure to the benefit of Landlord, its
     successors and assigns, and shall be binding upon and inure to the benefit
     of Tenant, its successors, and to the extent assignment is approved by
     Landlord hereunder, Tenant's assigns.

FORCE MAJEURE

34.  In the event that Landlord shall be delayed, hindered in or prevented from
     the performance of any act or obligation required under this Lease by
     reason of acts of God, strikes, lockouts, labor troubles or disputes,
     inability to procure or shortage of materials or labor, failure of power or
     utilities, delay in transportation, fire, vandalism, accident, flood,
     severe weather, other casualty, governmental requirements (including
     mandated changes in the plans and specifications of Landlord's Work
     resulting from changes in pertinent governmental requirements or
     interpretations thereof), riot, insurrection, civil commotion, sabotage,
     explosion, war, natural or local emergency, acts or omissions of others,
     including Tenant, or other reasons of a similar or dissimilar nature not
     solely the fault of, or under the exclusive control of, Landlord
     (individually and collectively, "Force Majeure"), then performance of such
     act or obligation shall be excused for the period of the delay and the
     period for the performance of any such act or obligations shall be extended
     for the period equivalent to the period of such delay.

BROKERAGE COMMISSION

35.  Landlord shall pay a brokerage commission to Broker in accordance with a
     separate agreement between Landlord and Broker. Tenant warrants to Landlord
     that Tenant's sole contact with Landlord or with the Premises in connection
     with this transaction has been directly with Landlord and Broker, and that
     no other broker or finder can properly claim a right to a commission or a
     finder's fee based upon contacts between the claimant and Tenant with
     respect to Landlord or the Premises. Tenant shall indemnify, defend by
     counsel acceptable to Landlord, protect and hold Landlord harmless from and
     against any loss, cost or expense, including, but not limited to,
     attorneys' fees and costs, resulting from any claim for a fee or commission
     by any broker or finder in connection with the Premises and this Lease,
     other than Broker, who claims such right based upon contacts between
     claimant and Tenant.

     Landlord shall indemnify, defend by counsel acceptable to Tenant, protect
     and hold Tenant harmless from and against any loss, cost or expense,
     including, but not limited to, attorney's fees and costs, resulting from
     any claim for a fee or commission by any broker or finder in connection
     with the Premises and this Lease, other than Broker, who claims such right
     based upon contacts between claimant and Landlord.

MISCELLANEOUS

36.  A. GENERAL. The terms "Tenant and/or Landlord" or any pronoun used in place
     thereof shall indicate and include the masculine or feminine, the singular
     or plural number, individuals, firms or corporations, and their respective
     successors, executors, administrators and permitted assigns, according to
     the context hereof.

     B. TIME. Time is of the essence regarding this Lease and all of its
     provisions.

     C. CHOICE OF LAW. This Lease shall in all respects be governed by the laws
     of the State of California.

     D. ENTIRE AGREEMENT. This Lease, together with its exhibits, contains all
     the agreements of the parties hereto and supersedes any previous
     negotiations. There have been no representations made by the Landlord or
     understandings made between the paries other than those set forth in this
     Lease and its exhibits.

     E. MODIFICATION. This Lease may not be modified except by a written
     instrument signed by the parties hereto.

     F. SEVERABILITY. If, for any reason whatsoever, any of the provisions
     hereof shall be unenforceable or ineffective, all of the other provisions
     shall be and remain in full force and effect.

                                       14

<PAGE>   18
     G. RECORDATION. Tenant shall not record this Lease or a short form
     memorandum hereof.

     H. EXAMINATION OF LEASE. Submission of this Lease to Tenant does not
     constitute an option or offer to lease and this Lease is not effective
     otherwise until execution and delivery by both Landlord and Tenant.

     I. ACCORD AND SATISFACTION. No payment by Tenant of a lesser amount than
     the Rent or any endorsement on any check or letter accompanying any check
     or payment of Rent shall be deemed an accord and satisfaction of full
     payment of Rent, and Landlord may accept such payment without prejudice to
     Landlord's right to recover the balance of such Rent or to pursue other
     remedies.

     J. EASEMENTS. Landlord may grant easements on the Project and dedicate for
     public use portions of the Project without Tenant's consent; provided that
     no such grant or dedication shall substantially interfere with Tenant's use
     of the Premises. Upon Landlord's demand, Tenant shall execute, acknowledge
     and deliver to Landlord documents, instruments, maps and plats necessary to
     effectuate Tenant's covenants hereunder.

     K. DRAFTING AND DETERMINATION PRESUMPTION. The parties acknowledge that
     this Lease has been agreed to by both the parties, that both Landlord and
     Tenant have consulted with attorneys with respect to the terms of this
     Lease and that no presumption shall be created against Landlord because
     Landlord drafted this Lease. Except as otherwise specifically set forth in
     this Lease, with respect to any consent, determination or estimation of
     Landlord required in this Lease or requested of Landlord, Landlord's
     consent, determination or estimation shall be made in Landlord's good faith
     opinion, whether objectively reasonable or unreasonable.

     L. EXHIBITS. Exhibits A through F attached hereto are hereby incorporated
     herein by this reference.

     M. NO LIGHT, AIR OR VIEW EASEMENT. Any diminution or shutting off of light,
     air or view by any structure which may be erected on lands adjacent to or
     in the vicinity of the Building shall in no way affect this Lease or impose
     any liability on Landlord.

     N. NO THIRD PARTY BENEFIT. This Lease is a contract between Landlord and
     Tenant and nothing herein is intended to crate any third party benefit.

     O. WAIVER OF JURY TRIAL. IF ANY ACTION OR PROCEEDING BETWEEN LANDLORD AND
     TENANT TO ENFORCE THE PROVISIONS OF THIS LEASE (INCLUDING AN ACTION OR
     PROCEEDING BETWEEN LANDLORD AND THE TRUSTEE OR DEBTOR IN POSSESSION WHILE
     TENANT IS A DEBTOR IN A PROCEEDING UNDER ANY BANKRUPTCY LAW) PROCEEDS TO
     TRIAL, LANDLORD AND TENANT HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
     IN SUCH TRIAL. Landlord and Tenant agree that this Paragraph constitutes a
     written consent to waiver of trial by jury within the meaning of California
     Code of Civil Procedure Section 631(a)(2), and Tenant does hereby authorize
     and empower Landlord to file this Paragraph and or this Lease, as required,
     with the clerk or judge of any court of competent jurisdiction as a written
     consent to waiver of jury trial.

ADDITIONAL PROVISIONS

37.  A. ERISA REPRESENTATIONS. Tenant represents to Landlord that with the
     exception of this Lease, neither the Tenant nor any affiliate of the Tenant
     is a tenant under a lease or any other tenancy arrangement (1) with
     (a) Riggs & Company, a division of Riggs Bank N.A., as trustee of the
     Multi-Employer Property Trust; (b) Riggs Bank N.A., as trustee of the
     Multi-Employer Property Trust; (c) the Multi-Employer Property Trust; (d)
     the National Bank of Washington Multi-Employer Property Trust, the previous
     name of the Multi-Employer Property Trust; (e) the Riggs National Bank of
     Washington, D.C., as trustee of the Multi-Employer Property Trust; (f) the
     Corporate Drive Corporation as trustee of the Corporate Drive Nominee
     Realty Trust; (g) Arboretum Lakes-I, L.L.C.; (h) Village Green at Seven
     Bridges, L.L.C.; (i) Pine Street Development, L.L.C.; (j) MEPT Realty LLC;
     (k) MEPT, L.L.C.; (l) Cabrillo Properties LLC; (m) Valencia L.L.C.; (n)
     Centrepointe Distribution Center LLC; (o) Mission Trails LLC; (p)
     Northridge Business Center LLC; (q) Oyster Point Tech Center LLC (r)
     Meadows Office Building LLC; or (s) MEPT West Hills, LLC; (t) MEPT Sea-Tac
     Company LLC; (u) Sea-Tac Hotel Venture LLC; (v) MEPT Newark, LLC; or (w)
     MEPT Greenspoint, L.L.C.; OR (2) involving any property in which any one or
     more of the entities named in clauses (1)(a) through (e) are known by the
     Tenant to have an ownership interest.

     B. ANTI-DISCRIMINATION. There shall be no discrimination against or
     segregation of any person or group of persons, on account of race, color,
     creed, religion, sex, marital status, national origin, or ancestry, in the
     leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of
     the Premises, nor shall the Tenant or any person claiming under or through
     the Tenant establish or permit any such practice or practices of
     discrimination or segregation with reference to the selection, location,
     number, use or occupancy of tenants, sublessees, subtenants, or vendees in
     the Premises.

     C. RIGHT OF FIRST OFFER. Landlord may acquire and develop a third phase of
     the Project ("Phase III") as depicted in Exhibit A-3. In the event that
     during the term of this Lease Landlord obtains a controlling interest in
     Phase III and provided that as of the date of the First Offer Notice and
     the Commencement Date of the Lease Tenant is not in default under this
     Lease, Tenant shall have a one-time right of first offer ("Right of First
     Offer") to lease all of the space in the approximately 60,000 square foot
     building proposed in Phase III ("Phase III, Building. 1) and/or in the
     approximately 46,000 square foot building proposed in Phase III ("Phase
     III, Building. 2") which Right of First Offer shall be on the terms and
     conditions set forth in this Section. Landlord shall provide Tenant with
     written notice ("First-Offer Notice") when Landlord determines at
     Landlord's sole discretion that Phase III will become available for lease
     to third parties. Provided that Tenant is not in Default as of the time of
     exercise of the Right of First Offer, if Tenant wishes to exercise its
     Right of First Offer, Tenant shall within ten (10) business days after
     delivery of the First-Offer Notice to Tenant, deliver written notice to
     Landlord of its intention to exercise its Rights of First Offer on either
     the Phase III, Building 1 or the Phase III, Building 2, or both. Tenant
     must lease all space in either building, or both. If Tenant does not
     exercise its Right of First Offer and elect to lease space available in
     Phase III within the prescribed response period, the Right of First Offer
     shall terminate and the Landlord shall be free to lease the space to anyone
     on any terms at any time during the Lease Term, without any obligation to
     provide Tenant with a further right to lease that space.

     If Tenant timely and validly exercises the Right of First Offer, Tenant and
     Landlord shall negotiate in good faith the terms of the lease on the Phase
     III space. The lease shall be in substantially the form of this Lease

                                       15

<PAGE>   19
     except for economic and credit issues including, but not limited to, Rent,
     Tenant Improvement Allowance, Operating Costs, Security Deposit,
     Assignment and Subletting rights, and Tenant's right to make repairs and
     alterations without Landlord's consent. The lease shall be in substantially
     the form of this Lease except for economic and credit issues including,
     but not limited to, Rent, Tenant Improvement Allowance, Operating Costs,
     Security Deposit, Assignment and Subletting rights, and Tenant's right to
     make repairs and alterations without Landlord's consent. If Landlord and
     Tenant cannot agree as to the terms of the lease within twenty (20) days
     of Tenant's written notice exercising its Right of First Offer, Landlord
     shall be free to lease the Phase III space to anyone on any terms it deems
     acceptable.

     D. OPTION TO EXTEND TERM. Provided that Tenant is not in Default as of the
     time of exercise of each option and the commencement date of each Option
     Period, Tenant shall have two (2) successive five (5) year options to
     extend the Term of the Lease for the Premises in "as is" condition at the
     expiration of the original Lease Term and, if the first option is duly
     exercised, at the end of the first Option Term. All of the terms and
     conditions of this Lease except for Base Rent and the provisions of this
     Paragraph shall be applicable to the Option Period.

     The Base Rent for the Premises under such option shall be the then current
     market rent for comparable facilities in the proximate South San Francisco
     market area. The definition of comparable facilities shall incorporate the
     parking amenities of the Premises, and the Building's location, age,
     quality, amenities, identity, exterior appearance, interior improvements,
     and type of construction, excluding Tenant Improvements in excess of
     $50.00 per rentable square foot.

     Tenant shall give Landlord written notice to exercise its option at least
     nine (9) but not more than twelve (12) months prior to the expiration of
     the then current Term for the Premises. Within fifteen (15) days after
     Tenant exercises its option to extend, Landlord shall provide Tenant with
     the Base Rent, as determined by Landlord, for the Option Period. The
     parties are obligated to negotiate in good faith to agree on the Base
     Rent. If the parties have not mutually agreed on the Base Rent within
     thirty (30) days from notification by Landlord to Tenant of Landlord's
     determination of Base Rent, each party hereto shall appoint one
     representative who shall be a licensed real estate broker experienced in
     the leasing of comparable facilities in the County of San Mateo to act as
     an arbitrator. The two (2) arbitrators so appointed shall determine the
     Base Rent for the relevant Option Period. The determination of said Base
     Rent shall be made by said two (2) arbitrators within sixty (60) days from
     notification by Landlord to Tenant of Landlord's determination of Base
     Rent and they shall submit said determination in writing and signed by
     said arbitrators in duplicate. One of the written notifications shall be
     delivered to Landlord and the other to Tenant.

     In the event the two (2) arbitrators of the parties hereto cannot agree on
     the Base Rent for the Premises herein, said two (2) arbitrators shall
     appoint a third arbitrator who shall be a licensed real estate broker
     experienced in the leasing of comparable facilities in the County of San
     Mateo, to act as an arbitrator. The Base Rent for the relevant Option
     Period shall be independently determined by the third of said arbitrators,
     which said determination shall be made within ninety (90) days from
     notification by Landlord to Tenant of Landlord's determination of Base
     Rent. The role of the third arbitrator shall then be to immediately select
     from the proposed resolution of arbitrators #1 and #2 the one that most
     closely approximates the third arbitrator's determination of Base Rent.
     The third arbitrator shall have no right to adopt a compromise or middle
     ground or any modification of either of the two final proposed
     resolutions. The resolution that the third arbitrator chooses as most
     closely approximating his determination of the Base Rent shall constitute
     the decision of all arbitrators and shall be final and binding upon the
     parties.

     The parties hereto shall pay the charges of the arbitrator appointed by it
     and any expenses incurred by such arbitrator. The charges and expenses of
     the third arbitrator, as provided herein, shall be paid by the parties
     hereto in equal shares.

     In the event either arbitrator #1 or arbitrator #2 fails to present a Base
     Rent figure within the thirty (30) day period, the Base Rent presented by
     the other arbitrator shall be considered final and binding on both parties.

     Notwithstanding anything to the contrary herein contained, Tenant's right
     to extend the term by exercise of the foregoing Option shall be
     conditioned upon the following: (i) at the time of the exercise of the
     Option, and at the time of the commencement of the extended term, Tenant
     or a Permitted Assignee shall be in possession of and occupying the
     Premises for the conduct of its business therein and the same shall not be
     occupied by any other assignee, subtenant or licensee, and (ii) the notice
     of exercise shall constitute a representation by Tenant to Landlord
     effective as of the date of the exercise and as of the date of
     commencement of the extended term, that Tenant does not intend to seek to
     assign the lease in whole or in part, or sublet all of any portion of the
     Premises, the election to extend the term being for purposes of utilizing
     the Premises for Tenant's purposes in the conduct of Tenant's or a
     Permitted Assignee's business therein.

     E. The Agreement Regarding Shell Modifications attached hereto as Exhibit
     G is hereby incorporated into and made a part of this Lease.

                                       16
<PAGE>   20
IN WITNESS WHEREOF, the parties hereto have executed this Lease the day and
year first above written.

          "Landlord"

          OYSTER POINT TECH CENTER LLC, a Delaware Limited Liability Company

          By: RIGGS & COMPANY, a division of Riggs Bank N.A.,
              as Trustee of the Multi-Employer Property Trust, a trust
              organized under 12 C.F.R. Section 9.18, its sole member

          By:  /s/ MARY ANN MARTINS
               ---------------------------------------

          Its: Managing Director
               ---------------------------------------

          "Tenant"

          VIROLOGIC, INC., a California corporation

          By:  /s/ MARTIN H. GOLDSTEIN
               ---------------------------------------

          Its: Pres. & CEO
               ---------------------------------------

          By:
               ---------------------------------------

          Its:
               ---------------------------------------

                                       17
<PAGE>   21
                                                                     EXHIBIT A-1

                          LEGAL DESCRIPTION OF PROJECT

PARCEL 1:

Parcel B as shown on Parcel Map no. 98-033 filed December 30, 1998, Book 71 of
Parcel Maps, pages 13 and 14, San Mateo County Records.

                                       1
<PAGE>   22

                                  EXHIBIT A-2
                                   SITE PLAN

                            [PLAN DIAGRAM OMITTED]
<PAGE>   23

                                  EXHIBIT A-3
                                 PHASE III PLAN

                            [PLAN DIAGRAM OMITTED]
<PAGE>   24

                                  EXHIBIT B-12

                        INITIAL IMPROVEMENTS OF PREMISES

        1.      LANDLORD'S WORK

                1.1     Landlord's work ("Landlord's Work") shall be defined as
the construction of the Building shell more particularly described in Exhibit
C, including ADA facilities, to the extent required by the City. The scope of
the shell construction shall include: The Building shell, roof, all exterior
windows and doors, fire sprinklers at the roof line, utilities and services to
the Building's exterior, an elevator, the parking lot, exterior common areas,
interior stairs (consisting of stair assemblies and metal handrails to be
provided F.O.B.), and landscaping.

                1.2     Landlord's work shall be completed through Landlord's
general contractor, South Bay Construction, in compliance with all applicable
codes and regulations.

                1.3     Landlord shall pay for all costs involved in shell
construction described in Paragraph 1.1, including, but not limited to, hard
costs and architecture, engineering, consultants, shell building permit and
impact fees, utility fees, loan fees, construction interest, transaction fees
and development fees. Any changes in the Building shell required by Tenant and
agreed to by Landlord shall be at Tenant's sole cost and expense.

        2.      TENANT'S WORK

                2.1     All interior improvements, including installation of
Trade Fixtures, as indicated in Exhibit B-3, furnishings and Building Core
Improvements (collectively referred to herein as "Tenant's Work"), shall be
constructed by Tenant at its sole cost and expense. All of the plans and
specifications for Tenant's Work shall be approved by Landlord in advance of
commencing any construction. Such approval by Landlord, shall not be
unreasonably withheld or delayed. The parties agree that certain items of the
Building Core improvements (specifically, proof loading of the roof structure
and penetrations in the second deck for future mechanical drafts) shall be
completed during shell construction by Landlord and the cost of such items shall
be deducted from the Tenant Improvement Allowance. Tenant shall invest a minimum
of sixty dollars ($60.00) per rentable square foot, including the Tenant
Improvement Allowance supplied by Landlord, excluding soft costs ("Soft Costs"
are those items described in Paragraphs 2.2 (v) through (xi)), and excluding the
items described on Exhibit B-3 hereto, to improve the entire Premises. Tenant
shall, within thirty (30) days following the term Commencement Date, provide
Landlord with an accounting, certified by an officer of Tenant, itemizing all
amounts expended by Tenant to improve the Premises. If the amount expended by
Tenant is less than sixty dollars ($60.00) per rentable square foot of the
Building, (exclusive of Soft Costs), Tenant shall, together with the accounting,
deliver to Landlord an unconditional irrevocable letter of credit (separate from
but for a purpose similar to the Letter of Credit described in paragraph 19 of
this Lease) in an amount equal to the difference between the amount expended by
Tenant and sixty dollars ($60.00) per rentable square foot of the Building
(exclusive of Soft Costs). At any time prior to the twenty-forth month of the
Lease Term (but in no event more frequently than monthly) Tenant may provide
Landlord with an amended accounting, as above, showing additional amounts
expended by Tenant to improve the Premises (exclusive, however, of the costs of
demolition and reconstruction of the Tenant's Work) since the last date shown on
the immediately preceding accounting. If the total amount expended by Tenant is
less than sixty dollars ($60.00) per rentable square foot of the Building
(exclusive of Soft Costs), the amount of the letter of credit may be reduced to
a sum equal to the difference between the amount expended by Tenant and sixty
dollars ($60.00) per rentable square foot of the Building (exclusive of Soft
Costs). On or before the last day of the twenty-forth month of the Lease Term,
with an amended accounting as above showing in addition any amounts expended by
Tenant to improve the Premises since the last date shown on Tenant's most recent
accounting (exclusive, however, of the costs of demolition and reconstruction of
the Tenant's Work), if the total amount expended by Tenant is less than sixty
dollars ($60) per rentable square foot, Landlord shall be immediately entitled
to draw down from the letter of credit an amount equal to the difference between
the amount expended by Tenant and sixty dollars ($60.00) per rentable square
foot. Upon such draw the requirement that this letter of credit be maintained
shall terminate. The letter of credit shall (a) designate Tenant or its
assignees as beneficiary, (b) be issued by a financial institution approved by
Landlord, (c) be in form satisfactory to Landlord, and (d) be for a term of
twenty-six months. Landlord shall not be required to deliver any certifications
or documentation of any kind to the issuer in order to make a draw, other than
Landlord's written demand stating that Landlord is entitled to draw in
accordance with the terms of this Lease. The issuer shall not be required to
conduct any inquiry or investigation before paying Landlord the requested amount
of the draw. Landlord may assign, transfer or pledge the letter of credit to any
lender or purchaser in connection with any financing or sale of the Premises.
Landlord shall provide to Tenant a Tenant Improvement Allowance of up to a
maximum of thirty-five dollars ($35.00) per rentable square foot on the Premises
(Tenant Improvement Allowance") which shall include Soft Costs. The Tenant
Improvement Allowance shall be reduced by the amount Landlord expends on
Building Core Improvements as stated above. Tenant shall promptly pay when due
all costs for Tenant's Work. Landlord shall reimburse Tenant a portion of such
costs not to exceed in the aggregate the amount of the Tenant Improvement
Allowance less amounts expended by Landlord for Building Core Improvements as
provided above. Tenant shall, not more frequently than monthly after
commencement of the construction of Tenant's Work, submit to Landlord requests
for reimbursement of amounts expended by Tenant for Tenant's Work. Each request
shall be certified by an officer of Tenant and shall include, without
limitation, (i) copies of all invoices paid by Tenant for which reimbursement is
sought (ii) proof of payment of each invoice (iii) a fully executed
unconditional lien release from each payee, and (iv) such additional information
as Landlord may reasonably request. After Landlord has received and approved
each request as provided herein, Landlord shall process the approved request for
payment by its lender and upon disbursement by Landlord's Lender reimburse
Tenant promptly for one-half of all amounts shown in the request as expenditures
for costs to which the Tenant Improvement Allowance applies, as hereinbelow
provided, up to the maximum amount set forth above.

                2.2     Tenant Improvement Allowance (thirty-five dollars
($35.00) per rentable square foot on the Premises) shall be applied to, but not
limited to the following costs:

                (i)     Costs paid to general contractors and subcontractors for
                        labor, material, permits, bonds and the like relating to
                        the Premises;

                (ii)    Construction management fee to Landlord in the amount of
                        two (2%) percent of the Tenant Improvement Allowance;

                                       2
<PAGE>   25
          (iii)   Building core improvements items such as lobbies, restrooms,
                  locker areas with showers, janitorial room, interior finishes
                  for the stairs (including framing, lights, etc.), deck
                  penetrations, structurally reinforcing the roof for Tenant's
                  HVAC, caulking of interior concrete joints, and screening of
                  mechanical equipment ("Building Core Improvements");

          (iv)    Cost of labor, material and overhead for change orders
                  approved by Landlord in accordance with this Exhibit B-1 and
                  minor field changes;

          (v)     Architectural, engineering and other design fees;

          (vi)    Plans, drawings and printing costs;

          (vii)   Insurance premiums;

          (viii)  Cost of any reasonably required reports, surveys or studies;

          (ix)    The cost of utility connections, installation of utility
                  facilities and meters and user installation or hook-up fees;

          (x)     All governmental fees and development impact fees, including
                  fees for permits, charges and costs of obtaining governmental
                  approvals;

          (xi)    Recording costs and filing fees; and

          2.3     Tenant's architect, as described in Paragraph 2.4, shall
furnish all architectural and engineering plans and specifications ("Core
Improvement Plans and Specifications") required for the construction of
Building Core Improvements. Core Improvement Plans and Specifications shall be
based on the Interior Improvement Specifications attached as Exhibit B-2
herein, or as otherwise indicated by Landlord. It is understood and agreed by
Tenant that any minor changes from any plans and specifications that may be
reasonably necessary during construction of the Premises shall not affect,
change or invalidate this Lease and shall not require Tenant's consent.

          2.4     Tenant shall contract with WHL Architects for Tenant's Work
to furnish architectural plans and specifications ("Tenant's Plans and
Specifications") required for the construction of Tenant's Work. Tenant's Plans
and Specifications shall also be based on the Interior Improvement
Specifications attached hereto as Exhibit B-2.

          2.5     Tenant shall contract with South Bay Construction for
completion of Tenant's Work. Tenant's suppliers, contractors, workmen and
mechanics shall be subject to approval by Landlord, which shall not be
unreasonably withheld or delayed, prior to the commencement of work and shall
be subject to Landlord's administrative control while performing their work.
Landlord shall coordinate with Tenant's representative the scheduling of
Tenant's Work. Prior to commencement of Landlord's Work, Tenant shall notify
Landlord with respect to any special scheduling requirements of Tenant in
connection with the installation of Tenant's Work. If at any time any supplier,
contractor, workman or mechanic performing Tenant's Work hinders or delays any
other work in the Building or performs any work which may or does impair the
quality, integrity or performance of any portion of the Building. Tenant shall
take all steps necessary to bring an end to the delay or hindrance, and the
contractor in question shall not recommence Tenant's Work until reasonable
steps have been taken to avoid further delay or hindrance. In performing
Tenant's Work, Tenant shall be required to employ contractors (and
subcontractors) which (a) are parties to, and bound by, a collective bargaining
agreement with a labor organization affiliated with the Building and
Construction Trades Council of the AFL-CIO and (b) employ only members of such
labor organizations to perform work within their respective jurisdictions),
with the exception of labor hired for network cabling for personal and
mainframe computer systems and related items. Tenant shall reimburse Landlord
for any repairs  of corrections of Landlord's Work or of Tenant's Work or of any
portion of the Building caused by or resulting from the work of any supplier,
contractor, workman or mechanic with whom Tenant contracts. Landlord shall
provide access to Tenant's suppliers, contractors, workmen and mechanics so as
to achieve timely completion and occupancy of the Premises.

     3.  COMPLETION DATES

                  3.1    Tenant shall notify Landlord in advance of the
approximate date on which Tenant's Work will be substantially completed and
will notify Landlord when Tenant's Work is in fact substantially completed
("Substantial Completion"). If any dispute shall arise as to whether the
Premises are substantially completed and ready for Tenant's occupancy, a
certificate furnished by an independent architect mutually agreed to by Landlord
and Tenant certifying the date of Substantial Completion shall be conclusive.
The following shall constitute tenant delays ("Tenant Delays") under the  Lease:

           (a)  Tenant's failure to furnish complete and timely instructions or
approvals;

           (b)  Tenant's failure to submit conceptual plans for Tenant's Work
to Landlord with forty-five (45) days from execution of lease:

           (c)   Tenant's failure to submit preliminary Plans and Specifications
for Tenant's Work for approval by Landlord within seventy-five (75) days from
execution of lease unless caused by Landlord's delay in responding to Tenant's
conceptual plans;

           (d)    Tenant's failure to enter into contracts with WHL Architects
and South Bay Construction for design and construction of Tenant's Work within
ninety (90) days of execution of Lease;

                                       2
<PAGE>   26
                  (e)   Tenant's failure to diligently pursue to completion the
construction of Tenant's Work unless caused by Landlord, its agents or
contractors;

                  (f)   Tenant's failure to deliver a Certificate of Occupancy
and a set of as-built plans to Landlord within thirty (30) days after
Substantial Completion of Tenant's Work, unless caused by a delay by Landlord.

Tenant Delays resulting in postponement of the Term Commencement Date shall
cause Tenant to be charged Rent under the terms of the Lease for each day of
such delay. All time periods indicated above shall be computed on a calendar
basis with no allowance for holidays, weekends or other customs.

            3.2   Except as otherwise provided in Section 3 of this Lease,
failure of Landlord to deliver possession of the Premises within the time and in
the condition provided for in the Lease will not give rise to any claim for
damages by Tenant against Landlord or Landlord's general contractor. If Landlord
fails to deliver the Premises in the condition as provided for under this Lease,
Landlord shall promptly correct any such deficiencies, excluding any immaterial
deficiencies which do not prevent Tenant from using the Premises for their
intended use. If Landlord fails to correct such deficiencies within a reasonable
time, Tenant may pursue its legal remedies against Landlord.

                                       3
<PAGE>   27
                                  EXHIBIT B-2

                      INTERIOR IMPROVEMENT SPECIFICATIONS

NOTE: Not all specified items listed herein refer to this project.

1.    WALLS
      -----

      A.    All walls receive paint to be properly prepared. Texture to be
            medium spray finish with 1 coat of latex paint to cover. Paint to be
            Pittsburg Doric white.

      B.    Demising walls, between tenant spaces to roof height shall be metal
            studs with 5/8" gypsum board both sides. Fire tape finish. U.O.N.
            See T.I. drawings for size, gauge and spacing.

      C.    Restroom studs with 5/8" gypsum board to 6" above adjacent ceiling
            U.O.N. with friction fit sound batt insulation. Wainscot at wet
            walls to be +4' - 0' high with ceramic tile. Texture to be smooth
            finish with semi-gloss latex paint U.O.N.

      D.    Interior Office Walls. Metal studs with 5/8" gypsum board on both
            sides to underside of ceiling, U.O.N. Perimeter office walls between
            office and warehouse areas to 6" above ceiling, U.O.N. per Title 24
            energy calculation requirements.

      E.    Other. As may be directed by code or tenant purposes for fire
            protection, sound or energy insulation, demountability and
            aesthetics.

      F.    See tenant improvements drawings for specifications on size, gauge
            and spacing of studs.

2.    CEILING
      -------

      A.    General. Finished ceiling height to be 10'.

      B.    Restrooms. Finished ceiling height to be 9' with metal joist with
            5/8" gypsum board. Texture to be smooth finish with semi-gloss latex
            paint with friction fit sound batt insulation. See tenant
            improvement drawings for specifications on size, gauge and spacing
            of joists.

      C.    Office. 2' x 4' T-bar suspended ceiling system with 2' x 4' Second
            Look II acoustical ceiling tile by Armstrong or approved equal.

      D.    Other. As may be directed by tenant or as may otherwise be required
            by tenant or codes. See tenant improvement drawings.

3.    FLOOR COVERING
      --------------

      A.    Carpet - 30 oz. cut pile nylon Design Weave "Westbridge"/26 oz. loop
            Design Weave "Caravan" or equivalent without pad. Carpet to be glued
            down installation. Color to be selected by Tenant.

      B.    V.C.T. Armstrong "Standard Excelon" - 1/8" gauge: 12" x 12" or
            approved equal.

      C.    Sheet vinyl Congoleum "Forever" or approved equal.

      D.    Base. 2-1/2" covered base at carpet and resilient floors.

      E.    Ceramic tile at toilet rooms with 6" ceramic tile base.

      F.    Sealed Concrete. Sealed with a clear acrylic sealer.

4.    DOORS
      -----

      A.    Interior. SP Particleboard Core Oak 3'-0" x 9'-0", Rotary Sawn Red
            Oak Veneer door by Weyerhauser or equal. 20 minutes rated at one
            hour fire walls.

6.    FRAMES (DOORS & WINDOWS)
      ------------------------

      A.    Timely Standard prefinished steel door and sidelight frame in
            standard white. "Timely II" at rated walls.

      B.    Other. As may be directed by code.

6.    HARDWARE
      --------

      A.    Latch set and lockset - Schlage D Series in brushed stainless steel
            with H.C. Levon lever.

      B.    Butts - 2 pair per door finished to match.

7.    RESTROOM ACCESSORIES
      --------------------

      A.    Water closet, white American Standard flush valve #2221.18 with
            Olsonite #95 seat and Sloan Ryal #110.3 flush valve. H.C. stalls to
            have white #9468.018 water closet with Sloan Royal #115.3 flush
            valve.

                                       1
<PAGE>   28
     B.     Urinal, white American Standard "Washbrook" #6501.010 with Sloan
            Royal #186 flush valve.

     C.     Lavatory, American Standard with faucet #0355.027 and drain
            #2103.786.

     D.     Recessed towel dispenser/waste receptacle, Bobrick #B3944.

     E.     Surface mounted seat cover dispenser, Bobrick.

     F.     Surface mounted toilet tissue dispenser, Bobrick #B2740.

     G.     Hook, Bobrick #B682.

     H.     Grab bars, Bobrick #B6806, 36" and 42".

     I.     Toilet partitions, Bobrick 108Q series, plastic laminate, or
            equivalent. Baked enamel floor-braced with coat hook/bumper.

     J.     Urinal partitions, Bobrick 1085 "Duraline" series, or equivalent.

     K.     Recessed toilet room accessories, Bobrick B301, B3570 and B35704, or
            equivalent.

8.   HVAC

     Gas-fired roof-mounted VAV system for cooling, heating and ventilation.
     Designed and installed in accordance with the California Energy Act -
     Title 24.

            1.     All cuts in roof to be properly sealed, flashed and hot
                   mopped.

9.   ELECTRICAL

     A.     Designed and installed in accordance with the California Energy Act
            - Title 24.

     B.     Power distributed as required by tenant for warehouse, assembly and
            manufacturing equipment, appliance operation and special office
            machinery shall be ceiling hung U.O.N.

     C.     Warehouse/Manufacturing/Assembly Lighting. High Bay THS 150-watt
            high pressure sodium light fixtures by Lithonia or equal in areas
            with open ceiling. U.O.N. See tenant improvement drawings, T-bar
            dropped ceiling 2' x 4' recessed mounted fluorescent fixtures with
            light levels ranging from 15-75 foot candles as specified by Owner.
            Fixtures same as for office lighting following.

     D.     Office lighting is 2' x 4' recessed mounted fluorescent ceiling
            fixtures, Lithonia 2PM4G B3 40 18LS 120 or equal, approved by Owner,
            with parabolic lens.

     E.     Downlights, Halo #117-1CT-331-P Coilex Baffle 7" O.D. trim.

     F.     Wallwashers. Halo #1176-T-425P Coilex Baffle with scoop trim 7" O.D.

     G.     Track Lights. Halo 120v single circuit power trac with Coilex
            Continental lampholdes #L733P.1.

     H.     Wall-mounted fixture at restroom. Lithonia Wallens #W240-120A.

     I.     Other lighting as required by tenant or code.

     J.     Provide plates for all power outlets. Provide pull wires at all
            telephone and cable (C.R.T.) pull locations as indicated on plan.

     K.     Illuminated exit signs as required by tenant or code.

     L.     Emergency lighting as required by code.

10.   FINISHES/SPECIALTIES

     A.     Special office wall or floor finishes. See tenant improvement
            drawings or specifications.

     B.     Lunch room, conference room, coffee or wet bar cabinetry and
            plumbing. See tenant improvement drawings.

                                       2
<PAGE>   29
                                  EXHIBIT B-3

                     MOVEABLE EQUIPMENT AND TRADE FIXTURES

13.  MOVEABLE EQUIPMENT & TRADE FIXTURES INCLUDES:
14.
M.   Special Devices used in Research Activities for the Following Processes:
     1.   Storage
     2.   Analysis
     3.   Synthesis
     4.   Measurement
     5.   Chemical, Biological, or Physical Manipulation
     6.   Drug Screening Equipment
     7.   Clinical Assays
     8.   Information Systems
H.   Computers
I.   Computer Terminals and Printers
J.   Computer Network
K.   Microwave Antennas
L.   Telephone Sets, Operator Switchboards
M.   Modular Prefabricated Enclosures (Cold & Warm Rooms)
N.   Security System Controls
O.   Cylinders, Tanks, Batteries and Other Equipment for Generating or Supplying
     the Following Services to the Basic Building Systems (Other Than Electrical
     and HVAC):
     9.   Laboratory Compressed Air
     10.  Nitrogen
     11.  Carbon Dioxide
     12.  Oxygen
     13.  Other Gases
     14.  Process Steam
     15.  Vacuum
     16.  Distilled Water
     17.  Deionized Water
     18.  Supplemental Process
J.   Refrigeration
K.   Heating
     2.   Emergency Generator
     3.   Non-Standard Frequency and Voltage Electricity
L.   Architectural
     10.  Window Coverings
     11.  Lab Casework, Counters, and Shelving
B.   Electrical
     11.  Telephone Terminal Backboard & Cabinet
     12.  Telephone Conduit, Wiring Outlets and Cover Plates
     13.  Computer Conduit, Wiring, Outlets and Cover Plates
     14.  Motor Generator
     15.  Security System Wiring
     16.  Critical Conditioning Monitoring Equipment
F.   Mechanical-HVAC
     12.  Hoods
     13.  Hood Exhaust Duct Work
     14.  Hepafilters
C.   Mechanical-Plumbing
     13.  Distribution Lines, Connections and Cover Plates for Process Gases and
          Fluids such as Carbon Dioxide, Nitrogen, Oxygen, Freon and Distilled
          and Deionized Water
     14.  Sinks and Fixtures
     15.  Equalization Vault and All Interior Components
     16.  Vacuum Piping
<PAGE>   30
                                                                       EXHIBIT C

                         INITIAL PROJECT SPECIFICATIONS

GENERAL DESCRIPTION

     -  Two story concrete tilt-up building.

     -  Clear heights of 13'6" on the top floor and 14'6" on the bottom floor.

     -  Bay spacing of 34'6" x 33' on the top and bottom floors.

BUILDING STRUCTURE

     -  All foundations to include footings, foundation walls or other building
        foundation components required to support the entire building structure.

     -  Columns shall be steel box.

     -  All columns, beams, joists, purlins, headers, or other framing members
        to support the roof, roofing membrane and stair openings.

     -  Ten inch (10") thick structural concrete slab on grade with #4
        reinforcing bars at 18" on center and #6 reinforcing bars at 13" on
        center.

     -  Two and a half (2-1/2") thick concrete slab over metal deck supported
        by structural open web and columns.

     -  Exterior walls that enclose the perimeter of the building with steel
        reinforcing and structural connections that may be necessary or
        required.

     -  All exterior glass and glazing with pained aluminum frames. Glass to be
        tinted as appropriate to the aesthetic design of the building. All
        exterior doors, door closer and locking devices necessary for proper
        functioning.

     -  Hybrid Vulcraft panel roof system to support roofing membrane.

     -  Four (4) ply built-up roofing (including a base sheet, two plys and a
        cap sheet) and all flashings by Owens-Corning, Johns Manville, or equal.

     -  Painting of all concrete walls with Tex-Coat or Kel-Tex textural paint.
        All caulking of exterior concrete joint in preparation for painting.

     -  The foundation and structural framing should be designed to support a
        minimum live load of 100 pounds per share foot in all areas on top
        floor and 125 pounds on bottom floor.

     -  The floor-to-floor height of the building shall allow a minimum of
        10'0" interior drop ceiling height.

     -  Roof hatch and ladder within each building.

     -  One (1) 3,500 lb. capacity elevator.

     -  Three (3) interior stairs consisting of stair assemblies with metal
        handrails to be provided f.o.b. at job site.

PLUMBING

     -  Underground sanitary sewer laterals connected to the city sewer main
        the street and piped into the building and under the concrete slab on
        grade for the length of the building. Sewer lines to consist of a four
        inch (4") sanitary sewer line and a four inch (4") biowaste sewer line.
        Sanitary sewer line under the slabs will be in a close proximity to the
        building restroom locations.

     -  Domestic water mains connected to the city water main in the street and
        stubbed to the building. Water main to the building shall be three
        inches (3") in size with a three inch (3") supply line.

     -  Roof drain leaders piped and connected to the site storm drainage
        systems. Overflow drains daylight two inches (2") above grade.

<PAGE>   31
ELECTRICAL

     -  Gas lines connected from the city public utility mains and gas meters
        adjacent to, and in close proximity to the building. Meters supplied by
        utility company.

     -  All primary electrical service to the building that is complete
        including underground conduit and wire feeders from transformers pads
        into the building's main  switchgear electrical room. The electrical
        characteristics of the secondary side of transformers shall be 277/480
        volt, 3 Phase and the rated capacity of the transformers shall be 2,000
        amps for each building.

     -  Underground pull section, meter, and panel(s), for site lighting and
        landscaping.

     -  Underground conduit from the street to the building for telephone trunk
        line service by Pacific Telephone. Conduit to the building shall not be
        less than 4".

     -  An electrically operated landscape irrigation controller that is a
        complete and functioning system.

     -  Underground conduit from the building to the main fire protection
        system, shut off valve (PIV) for installation for security alarm wiring.

     -  All parking lot and landscaping lighting to include fixtures,
        underground conduit, wire, distribution panel and controller. All
        exterior lighting shall be a complete and functioning system.

FIRE PROTECTION

     -  A complete and fully functional overhead system distributed throughout
        the building with a density of 2/3000.

     -  System shall include all sprinkler heads that may be required by
        building codes above the ceiling, when ceilings are installed.

LOADING

     -  Two (2) grade level 10' x 12' roll-up doors.

SITEWORK

     -  All work outside the building perimeter walls shall be considered site
        work for the building shell and shall include grading, asphalt
        concrete, paving, landscaping (hard and soft), landscape and
        irrigation, storm drainage, utility service laterals, curbs, butters,
        sidewalks, specialty paving (if required), retaining walls, fencing and
        gates, trash enclosures, planters, sign monuments, parking lot and
        landscape lighting and other exterior lighting per code.

     -  Paving sections for automobile and truck access shall be according to
        the Geological Soils Report.

     -  All parking lot striping to include handicap signage and spaces.

     -  Underground site storm drainage system shall be connected to the city
        storm system main.

EXCLUSION

The following items are not included in the building shell:

     -  Roof screen.

     -  Proof loading roof for mechanical equipment.

     -  Deck penetrations for mechanical equipment.

     -  Caulking of interior concrete joints.

     -  Framing and finishes for interior stairs.

     -  Electrical panels and distribution.

     -  Security system.

                                      -3-
<PAGE>   32
     10.  With the exception of this Lease and except as otherwise disclosed in
writing to Landlord, neither the Tenant nor any affiliate of the Tenant is a
tenant under a lease or any other tenancy arrangement (i) with (a) ___________;
(b) ____________; (c) ____________; or (ii) involving any property in which the
entities named in clauses (___), (___) or (___) are known by the Tenant to have
an ownership interest.

DATED this ____________ day of __________, 19___.

                                        TENANT:

                                        ________________________________________

                                        By: ____________________________________

                                        Name: __________________________________

                                        Its: ___________________________________

     (Tenant to attach Exhibit A to Tenant Estoppel Certificate, List of
Defects, if necessary.)

                                       2
<PAGE>   33
                                   EXHIBIT D

                          TENANT ESTOPPEL CERTIFICATE

            TO:   Oyster Point Tech Center LLC
                  c/o Trammel Crow NW, Inc.
                  1241 East Hillsdale Blvd., Ste. 200
                  Foster City, CA 94404

THIS IS TO CERTIFY:

      1.    That the undersigned is the Tenant under that certain Lease dated
_______________, and, if applicable, amended on _______________, by and between
_______________ ("Landlord"), and the undersigned ("Tenant") covering those
certain premises located as shown on the drawing made part of the Lease (the
"Premises").

      2.    That said Lease is in full force and effect and, except as noted in
Paragraph 1, above, has not been modified, changed, altered or amended in any
respect, and is the only lease or agreement between the Tenant and the Landlord
affecting the Premises.

      3.    To the best of Tenant's knowledge, the information set forth below
is true and correct:

            (a)   Square footage of the Premises: _____________________________

            (b)   Annual rent as of the Commencement of Lease: $_______________

            (c)   Current annual rent (if different than at commencement):
                  $______________

            (d)   Commencement date of Lease: _________________________________

            (e)   Lease termination date: _____________________________________

            (f)   Rent paid to and including: _________________________________

            (g)   Security deposit: $__________________________________________

            (h)   Prepaid rent for and in amount of: $_________________________

            (i)   Free rent period: ___________________ to ____________________

            (j)   Amount of current monthly escrow payment obligations with
                  respect to taxes, insurance, and Common Area Maintenance
                  charges under the Lease:

                  Taxes:                              $________________________

                  Insurance:                          $________________________

                  Common Area Maintenance Charges:    $________________________

            (k)   Dates through which Tenant has paid monthly escrow payments
                  and Common Area Maintenance charges:

                  Escrow Payment for Taxes:            ________________________

                  Escrow Payment for Insurance:        ________________________

                  Common Area Maintenance Charges:     ________________________

      4.    DELETE IF TENANT HAS NOT OCCUPIED THE PREMISES: Tenant now occupies
the Premises, accepts the Premises in their current condition subject only to
those punch list items listed in Exhibit A, if any, and is not aware of any
defect in the Premises except as described in Exhibit A, if any.

      5.    DELETE IF TENANT HAS OCCUPIED THE PREMISES: Tenant does not occupy
the Premises. The status of the plans and specifications for and the
construction of Tenant improvements is described in Exhibit A. Tenant is
familiar with the Tenant improvement work done to date and is not aware of any
defect in such work, except as described in Exhibit A.

      6.    No rent has been paid in the current month other than as disclosed
in Paragraph 3. No free rent or other concessions, benefits, or inducements
other than as specified in the Lease have been granted to Tenant or undertaken
by the Landlord.

      7.    Tenant has not been granted any renewal, expansion, purchase options
or any rights of first refusal, except as disclosed in writing in the Lease.

      8.    Neither tenant nor to the best of Tenant's knowledge, Landlord is
in breach of the Lease and there has not occurred any event, act, omission or
condition which by notice or lapse of time or both or otherwise, will result in
any breach by Tenant or to the best of Tenant's knowledge, by Landlord. As of
the date hereof and except as set forth in the Lease, the undersigned is
entitled to no credit, offset or deduction in rent. Tenant knows of no
liabilities or obligations of Landlord which have accrued but are unsatisfied
under the Lease as of the date of this Certificate.

      9.    To the best of Tenant's knowledge, there are no actions, whether
voluntary or otherwise, pending against the undersigned under the bankruptcy
laws or other laws for the relief of debtors of the United States or any state
thereof.

<PAGE>   34

                                   EXHIBIT E

                             RULES AND REGULATIONS
                           FOR TENANT'S CONTRACTOR(S)

1.      Tenant's contractor will be responsible for making arrangements with
        Landlord as to time for the use of Building and equipment such as
        elevators and loading areas. The delivery of materials, equipment and
        supplies to the Building or Premises must be coordinated with Landlord
        at least two (2) business days prior to delivery. The Building debris
        box is not to be used for waste produced by Tenant's contractor.

2.      Tenant's contractor shall not interfere with the Landlord's contractor
        and sub-trades in any way and will cooperate fully with same.

3.      All Tenant's contractor's waste and debris must be removed from the
        Premises and Building regularly and promptly. All combustible waste and
        debris must be stored in a covered, fire-proof container prior to
        removal.

4.      Tenant's contractor and sub-trades shall take all precautions to ensure
        the security and the site condition of the Premises and Building in
        which the work is being performed, including their own tools, equipment
        and materials, and are responsible for any damage caused by employees
        and sub-trades to any part of the Building or Premises.

5.      Tenant's contractor shall remove and properly replace underfloor duct
        access covers as required for Tenant's trades and services. Any damage
        to underfloor duct access coverings shall be repaired or replaced by
        Tenant's contractor to the satisfaction of Landlord.

6.      Tenant's contractor must provide their own fire protection equipment,
        have same on premises at all times and conform to any requirements of
        Landlord or Landlord's contractor regarding fire protection.

7.      Tenant's contractor shall carry out all work in compliance with all
        Federal, State, County and City Building Codes and applicable Acts,
        Ordinances and Statutes.

8.      Tenant's contractor shall provide all their own protective devices and
        coverings, so as to protect the Building finishes provided by Landlord
        in the Building.

9.      No attachments to or use of window frames and mullions, ceiling systems,
        glass, ceiling frame or Building frame, will be permitted without the
        expressed written consent of Landlord.

10.     All Landlord's contractors, employees and trades must be confined to the
        area in which work is being performed.

11.     Tenant or Tenant's contractor shall carry builder's risk insurance with
        limits of not less than the amount requested by Landlord, insurance
        covering loss or damage to the work during the course of construction;
        worker's compensation/employer's liability insurance covering all
        employees of contractor and subcontractor. All such policies shall name
        Landlord and Tenant as additional insureds. A certificate of insurance
        must be provided to Landlord prior to commencement of work.

12.     Any construction, alteration, maintenance, repair, replacement, removal
        or decoration undertaken by Tenant's contractor shall be carried out in
        a good, workmanlike, and prompt manner, shall comply with applicable
        statutes, laws, ordinances, regulations, rules, orders and requirements
        of the authorities having jurisdiction thereof, and shall be subject to
        supervision by Landlord or its employees, agents, or contractors. All
        construction shall be performed in a timely manner without delays or
        interruptions.

13.     Tenant's contractors shall not use excessive quantities of electricity
        or water and shall not shut off any water, electricity, sprinkler
        systems or other services without first obtaining Landlord's express
        authorization.

                                       1

<PAGE>   35
                                   EXHIBIT F

                       DISCLOSED HAZARDOUS MATERIALS LIST

                                       2
<PAGE>   36
                                   EXHIBIT G

                    AGREEMENT REGARDING SHELL MODIFICATIONS

As set forth in Exhibit B-1 to this Lease, Landlord is to complete and pay for
all costs involved in certain construction ("Landlord's Work"). Landlord's Work
includes the construction of a building shell more particularly described in
Exhibit C to the Lease ("Initial Project Specifications"). Landlord's Work is
to be completed through Landlord's general contractor, South Bay Construction
("Contractor"). Tenant desires to have Landlord modify certain items set forth
in the initial Project Specifications ("Modifications"). Regarding such
Modifications, Landlord and Tenant hereby agree to the following terms and
conditions:

   1.   During Landlord's construction of Landlord's Work Tenant may request in
        writing ("Proposal") Modifications to the Initial Project Specifications
        which Tenant desires. Landlord shall have the right to approve or to
        disapprove each Proposal in Landlord's sole and absolute discretion. In
        the event Landlord approves some or all of the proposed Modifications,
        Landlord shall have Contractor estimate the cost of such Modifications,
        which cost shall be presented in writing to Tenant for Tenant's review
        and written approval. Tenant's failure to approve or disapprove the
        estimated cost of the approved Modifications within five (5) calendar
        days after receipt of the estimate shall be conclusively deemed a
        disapproval.

   2.   Tenant shall be solely responsible for and pay to Landlord: (a) all
        costs reasonably incurred by Landlord for Landlord's review of a Tenant
        Proposal, including, but not limited to, any architectural, engineering
        and consulting costs incurred by Landlord or Contractor to define the
        scope and/or estimate the costs of any Modifications proposed by Tenant
        (such costs shall be paid by Tenant whether the Proposal is approved or
        disapproved by Landlord and regardless of whether Tenant approves or
        disapproves the estimated cost of the proposed Modifications); (b) the
        actual increase in cost as a result of constructing the approved
        Modifications; (c) a fee for the Contractor's overhead and profit per
        Landlord's construction contract with Contractor; and (d) all other
        costs and expenses reasonably incurred by Landlord in connection with
        the review, approval, and construction of the Modifications, including,
        but not limited to, permit fees and change order costs (collectively,
        the "Modifications Costs"). Tenant shall pay the Modifications Costs
        within ten (10) days after Landlord submits to Tenant an invoice
        therefor, provided that Landlord shall not submit an invoice for any
        Modifications Costs until Landlord has been billed for such Cost.
        Landlord may invoice the Modifications Costs for any Proposal in one or
        more separate invoices in Landlord's discretion. Tenant's failure to pay
        the invoiced Modifications Costs in full within the time prescribed
        above shall constitute an Event of Default by Tenant under Section
        26A(2) of this Lease and in such case Landlord shall be entitled to all
        of its remedies under this Lease in addition to its remedies at law as a
        result of such failure to pay.

   3.   Landlord and Tenant acknowledge that review of Proposals and
        construction of proposed Modifications could delay construction of the
        Landlord's Work and, consequently, the date ("Early Possession Date")
        on which Landlord grants permission to Tenant to commence construction
        of Tenant's Work pursuant to Section 3 of this Lease. Landlord and
        Tenant hereby agree that any such delay shall be a "Tenant Delay" for
        the purposes of this Lease, and, in particular, for purposes of Section
        3 of the Lease. For purposes of determining the number of days of such
        Tenant Delay, Landlord and Tenant agree that the good faith joint
        determination thereof by Dan Kirby (of Dowler Gruman Architects) and
        Douglas White (of WHL Architects), Landlord's and Tenant's architects,
        respectively, shall be conclusive and binding on both Landlord and
        Tenant.

                                       1

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