Document:

Prepared by MerrillDirect

Exhibit 10.30

 

Basic Lease Information

	Date:	 	July
  11, 2001
	 	 	 
	Tenant:	 	Deltagen,
  Inc.
	 	 	 
	Address:	 	740
  Bay Road Redwood City, CA 94063
	 	 	 
	Landlord:	 	Woodside
  Technology Center, LLC
	 	 	 
	Landlord’s Address For Notice:	 	Woodside
  Technology Center, llc

  505 Montgomery Street, Suite 1550 

  San Francisco, California  94111 

  Attn:  Daniel MacEachron 

with a
  copy to: 

  Hines 101 California Street, Suite 1000 

  San Francisco, California 94111 

  Attn:  Lisa Burke Lewis 

and a
  copy to: 

  Hines 

  601 California Street, Ground Floor 

  San Francisco, California 94108 

  Attn:  Property Manager, Woodside
  Technology Center
	 	 	 
	 	 	 
	 	 	 
	Leased Premises:	 	740
  Bay Road, Redwood City, CA, located within The Woodside Technology Center
	 	 	 
	Area of Leased Premises:	 	Sixty
  Thousand Nine Hundred Eighty–Five (60,985) square feet
	 	 	 
	Term Commencement Date:	 	September
  1, 2001
	 	 	 
	Term:	 	approximately
  107 Months
	 	 	 
	Term Expiration Date:	 	July
  14, 2010

Basic Lease Information

	Base Rent:	 	Months of Term	Monthly Base Rent
	 	

	

	 	 	 	 
	 	 	1 - 12	$189,053.50
	 	 	 	 
	 	 	13 - 24	$194,725.11
	 	 	 	 
	 	 	25 - 36	$200,566.86
	 	 	 	 
	 	 	37 - 48	$206,583.87
	 	 	 	 
	 	 	49 - 60	$212,781.39
	 	 	 	 
	 	 	61 - 72	$219,164.83
	 	 	 	 
	 	 	73 - 84	$225,739.77
	 	 	 	 
	 	 	85 - 96	$232,511.96
	 	 	 	 
	 	 	97 – July 14,
  2010	$239,487.32
	 	 	 	 
	Letter of Credit:	 	One
  Million Seven Hundred One Thousand Four Hundred Eighty–One Dollars
  ($1,701,481.00), subject to adjustment in accordance with Section 5.14.
	 	 	 
	Broker:	 	BT
  Commercial Real Estate
	 	 	 
	Option To Renew:	 	Two
  (2) Options of Five (5) Consecutive Years Each

 

 

	BUILDING LEASE

 by and between 

WOODSIDE TECHNOLOGY CENTER, LLC,
a Delaware limited liability company

  and 

DELTAGEN, INC.,

  a Delaware corporation

 

 

WOODSIDE TECHNOLOGY CENTER

             This
Lease is made and entered into as of the date specified in the Basic Lease
Information Sheet attached hereto and incorporated herein by this reference, by
and between WOODSIDE TECHNOLOGY
CENTER, LLC, a Delaware limited liability company (“Landlord”), and the Tenant
identified in the Basic Lease Information Sheet.

             IN
CONSIDERATION OF THE MUTUAL COVENANTS AND AGREEMENTS CONTAINED IN THIS LEASE,
THE PARTIES AGREE AS FOLLOWS:

ARTICLE 1

Definitions

             Certain
terms used in this Lease and the Exhibits hereto shall have the meaning set
forth below for each such term.  Certain
other terms shall have the meaning set forth elsewhere in this Lease and the
Exhibits hereto.

             1.01     “Additional
Rent”
shall mean all obligations of Tenant hereunder other than the obligation for
payment of Gross Rent.

             1.02     “Alterations”
shall mean any alterations, additions or improvements in or to the Leased
Premises made in accordance with Section 5.07, including, without
limitation, any equipment, fixtures or similar items which are either affixed
to any portion of the Building or affixed or connected to, or otherwise
integrated within, any of the Building Systems by or on behalf of Tenant.

             1.03     “Base
Rent”
shall mean the basic rent payable by Tenant to Landlord in the amounts shown on
the Basic Lease Information sheet and in the manner provided in
Section 3.03.

             1.04     “Building”
shall mean the improvements known as 740 Bay Road located in Redwood City,
California.

             1.05     “Building Operating Cost” shall mean the portion
of the Project Operating Cost which is allocated to the tenants of the Building
pursuant to Section 3.06.

             1.06     “Building Operating Cost Adjustment” for any calendar year
shall mean the difference, if any, between Estimated Building Operating Cost
and Building Operating Cost for that calendar year.

             1.07     “Building Systems” shall mean all
mechanical, electrical, HVAC, life safety or other systems of the Building.

             1.08     “business
day”
shall mean Monday through Friday, except holidays; “holiday”
means those holidays specified by the laws of the United States or the State of
California.

             1.09     “Common Areas”
shall mean all walkways, roadways, sidewalks, parkways, driveways, parking
areas, parking structures, landscaped areas or other similar facilities
maintained for the benefit of Project Tenants and invitees.

             1.10     “Estimated
Building Operating Cost”
for any calendar month shall mean the portion of the Estimated Project
Operating Cost which Landlord estimates to be allocable to the tenants of the
Building pursuant to Section 3.06 for such calendar month.

             1.11     “Estimated Project Operating Cost” for any calendar month
shall mean Landlord’s estimate of Project Operating Cost for the calendar year
within which such month falls divided by twelve (12) equal monthly
installments.

             1.12     “Fair
Market Rent”
shall mean the rate being charged for comparable space within first-class
commercial office and R&D properties comparable to the Project located in
central and southern San Mateo County, including, without limitation, the
rate being charged by Landlord for comparable space within the Project, taking
into consideration:  location in the
Building, tenant improvements or allowances existing or to be provided, rental
abatements, lease takeovers/assumptions, moving expenses and other forms of
rental concessions, proposed term of lease, extent of service provided or to be
provided, the ownership of the comparable space, whether or not the transaction
is a sublease, the time the particular rate under consideration became or is to
become effective and any other relevant terms or conditions.

             1.13     “Gross
Rent”
shall mean the total of Base Rent and Tenant’s Proportionate Share of Estimated
Building Operating Cost.

             1.14     “Hazardous
Material”
shall mean any:  (a) oil, flammable
substances, explosives, radioactive materials, hazardous wastes or substances,
toxic wastes or substances or any other wastes, materials or pollutants which
(i) pose a hazard to the Project or to persons on or about the Project or
(ii) cause the Project to be in violation of any Hazardous Materials Laws;
(b) asbestos in any form, urea formaldehyde foam insulation, transformers
or other equipment that contain dielectric fluid containing levels of
polychlorinated biphenyls, or radon gas; (c) chemical, material or
substance defined as or included in the definition of “hazardous substances”,
“hazardous wastes”, “hazardous materials”, “extremely hazardous waste”,
“restricted hazardous waste”, or “toxic substances” or words of similar import
under any applicable local, state or federal law or under the regulations
adopted or publications promulgated pursuant thereto, including, but not
limited to, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. §9601, et seq.; the Hazardous Materials
Transportation Act, as amended, 49 U.S.C. §1801, et seq.; the Federal Water Pollution
Control Act, as amended, 33 U.S.C. §1251, et seq.;
Sections 25115, 25117, 25122.7, 25140, 25249.8, 25281, 25316, and 25501 of
the California Health and Safety Code; (d) other chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
governmental authority or may or could pose a hazard to the health and safety
of the occupants of the Project or the owners and/or occupants of property
adjacent to or surrounding the Project, or any other person coming upon the
Project or adjacent property; and (e) other chemicals, materials or
substances which may or could pose a hazard to the environment.

             1.15     “Hazardous Materials Claims”
shall mean any enforcement, cleanup, removal, remedial or other governmental or
regulatory actions, agreements or orders instituted pursuant to any Hazardous
Materials Laws; and any claims made by any third party against Landlord, Tenant
or the Project relating to damage, contribution, cost recovery, compensation,
loss or injury resulting from the presence, release or discharge of any
Hazardous Materials.

             1.16     “Hazardous
Materials Laws”
shall mean any federal, state or local laws, ordinances, orders, rules,
regulations or policies, now or hereafter in force, as amended from time to
time, in any way relating to the environment, health and safety, and Hazardous
Materials (including, without limitation, the use, handling, transportation,
production, disposal, discharge or storage thereof) or to industrial hygiene or
the environmental conditions on, under or about the Project, including, without
limitation, soil, groundwater and indoor and ambient air conditions.  Landlord hereby notifies Tenant in
accordance with California Health & Safety Code Section 25359.7 that
the Project is the subject of a state-supervised cleanup of hazardous waste
disposed of on the site by prior occupants and in connection therewith, a no
further action letter was issued by the Bay Area Regional Water Quality Board
on July 18, 1997.

             1.17     “Landlord
Parties”
means the employees, agents, contractors, officers, directors, partners,
licensees, invitees and guests of Landlord, Landlord’s affiliates, Landlord’s
manager and members and their respective members, managers, shareholders,
general partners and limited partners.

             1.18     “Laws”
shall mean all federal, state and local laws, ordinances, orders, rules,
regulations and policies.

             1.19     “LC Face
Amount”
shall mean the face amount of the Letter of Credit as determined pursuant to
Section 5.14.

             1.20     “Leased
Premises”
shall mean the floor area more particularly shown on the Exhibit A–1
floor plan attached hereto, containing the square footage specified on the
Basic Lease Information sheet.

             1.21     “Letter
of Credit”  shall mean the irrevocable standby letter of
credit in the “LC Face Amount” to be
delivered by Tenant to Landlord to be held pursuant to Section 5.14.

             1.22     “Permitted
Hazardous Materials”
shall mean Hazardous Materials in quantities and of a type customarily used in
the ordinary course of business operations of a business similar to the
business in which Deltagen, Inc. is engaged in at the time of execution of this
Lease, but only if and to the extent that such Hazardous Materials are
transported, stored and used in full compliance with all Hazardous Materials
Laws and otherwise in a safe and prudent manner.  Hazardous Materials which are customarily used in the ordinary
course of business operations of businesses similar to the business in which
Deltagen, Inc. is engaged in at the time of execution of this Lease, but which
are transported, stored and used in a manner which is not in full compliance
with all Hazardous Materials Laws or which is not in any respect safe and
prudent shall not be deemed to be “Permitted Hazardous Materials”
for the purposes of this Lease. 
Notwithstanding the foregoing, “Permitted
Hazardous Materials” shall only include Hazardous Materials
of a type and in quantities which have been identified to Landlord in writing
from time to time.

             1.23     “Permitted Use”
shall mean executive, professional office and corporate administrative office
uses, research and development uses in the area of biotechnology and
pharmaceuticals and ancillary warehousing; provided, however, that for the
purpose of limiting the type of use permitted by Tenant, or an assignee of
Tenant, but without limiting Landlord’s right to lease any portion of the
Building to a tenant of Landlord’s choice, except as specifically otherwise
agreed by Landlord in writing, “Permitted Use”
shall not include (i) any use not otherwise permitted under applicable
zoning ordinances, (ii) offices of any agency or bureau of the United
States or any state or political subdivision thereof, (iii) offices or
agencies of any foreign government or political subdivision thereof,
(iv) offices of any health care professionals or service organization,
except for administrative offices where no diagnostic, treatment or patient
laboratory services are performed, (v) schools or other training
facilities that are not ancillary to executive, professional or corporate
administrative office use, (vi) retail or restaurant uses,
(vii) broadcast studios or other broadcast production facilities, such as
radio and/or television stations, (viii) product display or demonstration
facilities, (ix) offices at which deposits or bills are regularly paid in
person by customers, and (x) personnel agencies, except offices of
executive search firms.

             1.24     “Project”
shall mean the real property (including, without limitation, the Building, the
Common Areas and any other present or hereafter existing improvements), as such
real property may be expanded from time to time by Landlord, situated in the
City of Redwood City, County of San Mateo and more particularly described
on Exhibit A–2.

             1.25     “Project Operating Cost” shall have the meaning
given in Section 3.05.

             1.26     “Rent”
shall mean Gross Rent, Additional Rent and any and all other charges of any
nature payable by Tenant to Landlord under this Lease.

             1.27     “Tenant
Parties”
shall mean the employees, agents, contractors, officers, directors, partners,
licensees, invitees and guests of Tenant.

             1.28     “Tenant’s
Proportionate Share”
shall mean one hundred percent (100%) of the Building.

             1.29     “Term”
shall mean the period from the Term Commencement Date and ending on the Term
Expiration Date, as the same may be extended pursuant to Section 7.09.

             1.30     “Term
Commencement Date”
shall mean the date when the Term commences as set forth on the Basic Lease
Information sheet.

             1.31     “Term
Expiration Date”
shall mean the date set forth on the Basic Lease Information or such earlier
date upon which this Lease is terminated pursuant to the terms hereof.

ARTICLE 2

Leased Premises

             2.01     Lease.  Landlord leases to Tenant and Tenant leases
from Landlord the Leased Premises upon all of the terms, covenants and
conditions set forth herein.

             2.02     Landlord’s
Reserved Rights.  Landlord reserves from the leasehold estate
hereunder, in addition to all other rights reserved by Landlord under this
Lease:  (i) the roof of the
Building, provided, that Tenant may have access to the roof for the purpose of
installation of Antenna Equipment in accordance with Section 5.07(b)
below, (ii) all exterior walls and windows bounding the Leased Premises,
and (iii) the right from time to time, without unreasonable interference
with Tenant’s use, to alter or relocate any portion of the Common Areas or any
other common facility and to make changes or alterations or additions to the
Project or any portion thereof.  Subject
to the rights of Tenant specified in this Lease as to the non-exclusive use of
certain portions of the Common Areas, Landlord shall have the sole and
exclusive right to possession and control of the Common Areas and all other
areas of the Project outside the Leased Premises.  Subject to Landlord’s approval of the same as Alterations to the
Leased Premises pursuant to Section 5.07 below, Tenant shall install and
maintain all required intrabuilding network cable and other communications
wires and cables necessary to serve the Leased Premises from the point of
presence to the Project of a telecommunications provider selected by Tenant and
approved by Landlord in its reasonable discretion (and Tenant hereby
acknowledges and agrees that Tenant shall not obtain any telecommunications
services within the Building from vendors other than those so approved by
Landlord in its reasonable discretion).

ARTICLE
3

Rent,
Term, Use and Building Operating Costs

             3.01     Term.

             (a)         Subject to Sections 3.01(b) and
3.01(c), the Term of this Lease shall commence and Tenant shall be entitled to
possession of the Leased Premises upon the Term
Commencement Date and shall continue until the Term Expiration Date, unless
earlier terminated in accordance with the provisions of this Lease.  Upon the Term Commencement Date, Landlord
and Tenant shall exercise a Lease Commencement Certificate in the form of Exhibit C
attached hereto.

             (b)        If for
any reason whatsoever, Landlord cannot deliver possession of the Leased
Premises to Tenant on or before the Term Commencement Date, except as expressly
provided below, this Lease shall not be void or voidable, nor shall Landlord,
or the Landlord Parties, be liable to Tenant for any loss or damage resulting
therefrom.  Tenant shall not be liable
for Rent until Landlord delivers possession of the Leased Premises to
Tenant.  The Term Expiration Date shall
be extended by the same number of days that Tenant’s possession of the Leased
Premises was delayed beyond the original Term Commencement Date.  Notwithstanding the foregoing, Landlord
shall use commercially reasonable efforts to deliver possession of the Leased
Premises to Tenant on or before December 1, 2001, provided that, if
Landlord fails to deliver possession of the Leased Premises to Tenant on or
before February 2, 2002, Tenant shall have the right to terminate this
Lease by written notice delivered to Landlord not later than February 8,
2002 and neither party shall have any further rights or obligations
hereunder.  If Tenant fails to exercise
such right of termination, on or before the date set forth herein, this Lease
shall remain in full force and effect, provided that, Tenant shall not be
liable for Rent until Landlord delivers possession of the Leased Premises to
Tenant and the Term Expiration Date shall be extended by the same number of
days that Tenant’s possession of the Leased Premises was delayed beyond the
original Term Commencement Date.

             (c)          
Notwithstanding anything to the contrary herein,
this Lease shall become effective and binding upon Landlord and Tenant only
upon the satisfaction of each of the following conditions precedent:
(i) Landlord’s valid and effective exercise of its right to recapture the
Leased Premises from the current tenant, Kana Communications, Inc., a
California corporation (“Kana”); and
(ii) the mutual execution by Tenant and Heartport, Inc., a Delaware
corporation, of a sublease agreement with respect to space within the building
of the Project commonly known as 700 Bay Road, Redwood City, California,
and receipt of Landlord’s corresponding consent thereto.  If either of the foregoing conditions
precedent have not been satisfied or waived by Tenant and Landlord within
thirty (30) days after the date of this Lease, then either Tenant or Landlord
may terminate this Lease upon not less than ten (10) days written notice to the
other, whereupon such termination the provisions of this Lease shall be null
and void and, except with respect to Landlord’s return to Tenant of any letter
of credit and prepaid Rent amounts delivered or otherwise paid to Landlord by Tenant,
neither party shall have any obligation thereafter with respect to the Leased
Premises or this Lease. 
Notwithstanding the foregoing, Landlord will not voluntarily agree to
allow Kana to holdover in the Leased Premises.

             3.02     Use.  Tenant shall use the Leased Premises solely
for the Permitted Use and for no other use or purpose.

             3.03     Payment
of Base Rent and Tenant’s Proportionate Share of Estimated Building Operating
Cost.  Base Rent shall be payable in advance on or
before the first day of each calendar month during the Term and any extensions
or renewals thereof; provided, however, that Base Rent for the first full
calendar month following the Term Commencement Date shall be paid in advance
immediately upon execution of this Lease. 
Tenant’s Proportionate Share of Estimated Building Operating Cost shall
be payable in advance on or before the first day of each calendar month during
the Term and any extensions or renewals thereof.  If the Term commences on other than the first day of a calendar
month, then Gross Rent (consisting of Base Rent plus Tenant’s Proportionate
Share of Estimated Building Operating Cost) provided for such partial calendar
month shall be prorated and the prorated amount shall be paid on the first day
of the calendar month following the Term Commencement Date together with any
other amounts payable on that day.  If
the Term terminates on other than the last day of a calendar month, then Gross
Rent provided for such partial calendar month shall be prorated and the
prorated installment shall be paid on the first day of the calendar month
preceding the Term Expiration Date.  All
payments due under this paragraph shall be payable in advance, without demand
and without reduction, abatement, counterclaim or setoff, at the address specified
on the Basic Lease Information or at such other address as may be designated by
Landlord in the manner provided for giving notice under Section 7.17
hereof.

             3.04     Net
Lease.  Subject to Sections 3.05(b) below and
4.01 below, the provisions for payment of Building Operating Cost by means of
periodic payment of Tenant’s Proportionate Share of Estimated Building
Operating Cost and the Building Operating Cost Adjustment are intended to pass
on to Tenant and reimburse Landlord for Tenant’s Proportionate Share of all
costs and expenses relating to Landlord’s ownership and operation of the
Project and the Building.

             3.05     Project Operating Cost.

             (a)         Project
Operating Cost shall mean all expenses and costs (but not specific costs that
are separately billed to and paid by specific tenants) of every kind and nature
that Landlord shall pay or incur or become obligated to pay or incur
(including, without limitation, costs incurred by managers and agents that are
reimbursed by Landlord) because of or in connection with the management,
maintenance, preservation, ownership and operation of the Project and its
supporting facilities directly servicing the Project (as allocated to the
Project in accordance with generally accepted accounting principles,
consistently applied) including, but not limited to, the following:

                           (i)          Wages,
salaries and reimbursable expenses and benefits of all on-site and off-site
personnel (with the exception of any of Landlord’s employees or executives
above the level of Senior Property Manager) who are engaged in the operation,
maintenance and security of the Project and the direct costs of training such
employees limiting such charges only to amounts directly allocable to services
rendered by the employees and personnel for the benefit of the Project.

                           (ii)         Costs
of the property management office and office operation.

                           (iii)        All
supplies, materials and rental equipment used in the operation and maintenance
of the Project.

                           (iv)       Utilities,
including, without limitation, water, power, waste disposal, communication
facilities, and lighting serving the Common Areas.

                           (v)        Assessments,
fees or other charges levied by the Project’s Property Owners Association or
other similar body with respect to the maintenance, repair and operation of the
Project.

                           (vi)       All
maintenance, janitorial and service agreements for the Project and the
equipment therein, including, but not limited to, alarm service, window
cleaning, elevator maintenance, maintenance and repair of sidewalks, storm
water pollution prevention, landscaping, building exteriors and service areas.

                           (vii)      A management cost recovery equal to three
percent (3%) of all revenue (excluding such management cost recovery) derived
from the Project, without limitation, all Rent hereunder, all rent and other
payments derived from other tenants in the Building, parking revenues and other
revenues derived from licensees of any other part of or right in the Building.

                           (viii)     Legal
and accounting services for the Project, including, but not limited to, the costs
of audits by certified public accountants of Project Operating Cost records;
provided, however, that legal expense shall not include the cost of
(i) negotiating lease terms for prospective tenants, (ii) negotiating
termination or extension of leases with existing tenants,
(iii) proceedings against any other specific tenant relating solely to the
collection of rent or other sums due to Landlord from such tenant,
(iv) legal costs incurred in connection with the title to or development
and/or construction of the Project, or (v) disputes with tenants, lenders,
employees, managers or with shareholders or members of Landlord.

                           (ix)        All
insurance premiums and costs, including, but not limited to, the premiums and
cost of fire, casualty, liability, rental abatement and (subject to the
provisions of Section 7.01 below with respect to the maintenance of
earthquake insurance) earthquake insurance applicable to the Project and
Landlord’s personal property used in connection therewith (and all amounts paid
as a result of loss sustained that would be covered by such policies but for
“deductible” or self-insurance provisions); provided, however, that Landlord
may, but shall not be obligated to, carry earthquake insurance.

                           (x)         Repairs,
replacements and general maintenance (except for repairs and replacements
(i) paid for from the proceeds of insurance, (ii) paid for directly
by Tenant, other tenants or any third party, or (iii) for the benefit
solely of tenants of the Project other than Tenant to the extent that Tenant could
not obtain similar services from Landlord without an obligation to reimburse
Landlord for the entire cost thereof under the provisions of this Lease).

                           (xi)        All real estate or personal property
taxes, possessory interest taxes, business or license taxes or fees, service
payments in lieu of such taxes or fees, annual or periodic license or use fees,
including, but not limited to, all of the following:  (i) all real estate taxes and assessments, and all other
taxes relating to, or levied, assessed or imposed on, the Project, or any
portion thereof, or interest therein; (ii) all taxes, assessments,
charges, levies, fees, excises or penalties, general and special, ordinary and
extraordinary, unforeseen as well as foreseen, of any kind and nature imposed,
levied upon, measured by or attributable to Landlord’s equipment, furniture,
fixtures and other property used in connection with the operation of the
Project, or levied upon, measured by or reasonably attributable to the cost or
value of any of the foregoing; (iii) all other taxes (including, without
limitation, value added taxes), assessments, charges, levies, fees, or
penalties, general and special, ordinary and extraordinary, unforeseen as well
as foreseen, of any kind and nature imposed, levied, assessed, charged or
collected by any governmental authority or other entity either directly or
indirectly (A) for or in connection with public improvements, user,
maintenance or development fees, transit, parking, housing, employment, police,
fire, open space, streets, sidewalks, utilities, job training, child care or
other governmental services or benefits, (B) upon or with respect to the
development, possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy of, or business operations in, the
Project, (C) upon, against or measured by the area of the Project, or uses
made thereof, or leases made to tenants thereof, or all or any part of the
rents collected or collectible from tenants thereof, and (D) for
environmental mitigation matters imposed in connection with or as a result of
any environmental impact report affecting all or any portion of the Project,
including parking taxes, employer parking regulations, or fees, charges or
assessments as a result of the treatment of the Project, or any portion thereof
or interest therein, as a source of storm water runoff; (iv) any tax or
excise, however described, imposed in addition to, or in substitution partially
or totally of, any or all of the foregoing taxes, assessments, charges or fees;
and (v) any and all costs, expenses and attorneys’ fees paid or incurred
by Landlord in connection with any proceeding or action to contest in whole or
in part, formally or informally, the imposition, collection or validity of any
of the foregoing taxes, assessments, charges or fees.  If by law any Real Property Taxes may be paid in installments at
the option of the taxpayer, then Landlord shall include within Real Property
Taxes only those installments (including interest, if any) which would become due
by exercise of such option.  Real estate
taxes shall not include (i) inheritance or estate taxes imposed upon or
assessed against the Project, or any part thereof or interest therein, or
(ii) taxes computed upon the basis of the net income derived from the
Project by Landlord or the owner of any interest therein.

                           (xii)       Amortization
(together with reasonable financing charges) of capital improvements made to
the Project (i) to comply with the requirements of law, ordinance, rule or
regulation, (ii) to replace items which Landlord would be obligated to
maintain under this Lease, or (iii) to improve the operating efficiency of
the Project; provided, however, that in the case of improvements made solely
for efficiency purposes, the amount chargeable as a Project Operating Cost in
any year shall not exceed Landlord’s reasonable determination of the efficiency
achieved either in direct cost savings, avoidance of cost increases or a
combination of both.  As used in this
Section 3.05(a)(xii), “amortization”
shall mean allocation of the cost equally to each year of useful life of the
items being amortized or a shorter period equal to the number of years required
to recover the cost of said item of capital improvement out of the savings in
operating efficiency derived therefrom. 
Notwithstanding the foregoing, however, Landlord may treat as expenses
(chargeable in the year incurred) and not as capital costs items that are less
than two percent (2%) of Estimated Project Operating Cost for the year in
question.

             (b)        Notwithstanding
the provisions of Section 3.05(a) above, the following costs shall not be
included within the calculation of Project Operating Cost:

                           (i)          costs incurred by Landlord for the
repair of damage to the Building, to the extent that Landlord is reimbursed
directly therefor by any insurer or other third party;

                           (ii)         leasing commissions, finder’s fees,
attorneys’ fees or similar costs associated with the leasing or subleasing of
space within the Project;

                           (iii)        costs, including permit, license and
inspection costs, incurred with respect to the installation of tenant
improvements made for tenants in the Project or incurred in renovating or
otherwise improving, decorating, painting or redecorating vacant space for
tenants or other occupants of the Project (excluding, however, such costs
relating to any Common Areas of the Project and/or any property management
office located at the Project);

                           (iv)       costs incurred by Landlord for which
Landlord is to be directly reimbursed by Tenant or other tenants of the Project
(as opposed to costs which are reimbursed solely through inclusion within the
calculation of Project Operating Cost);

                           (v)        except as permitted within
Section 3.05(a)(xii) above, interest, principal, points and fees on debt
or amortization of any mortgage or mortgages or any other debt instrument
encumbering the Building or the Project;

                           (vi)       any compensation paid to clerks,
attendants or other persons in commercial concessions operated by the Landlord,
with the exception of the costs of any such persons operating the parking areas
at the Project to the extent such costs exceed any revenues generated from the
operation of such parking garage;

                           (vii)      except as permitted within
Section 3.05(a)(xii) above, costs which are considered capital improvements
under generally accepted accounting principles, consistently applied;

                           (viii)     rental and leasing expenses (as opposed to
any maintenance and repair expenses) in leasing air conditioning systems,
elevators or other equipment affixed to the Building which is ordinarily
considered to be of a capital nature, with the exception of any such rental and
leasing expenses for any such equipment for which Landlord would be permitted
to include the amortized cost of acquisition (together with reasonable financing
charges) within the calculation of Project Operating Cost pursuant to the
provisions of Section 3.05(a)(xii) above;

                           (ix)        overhead or profit paid to subsidiaries
or affiliates of Landlord for services (other than any management fee cost
recovery), if and only to the extent that the cost of such services exceeds the
costs which would have been otherwise payable if the related services had been
rendered by qualified, first-class unaffiliated third parties on a competitive
basis;

                           (x)         costs for purchasing or replacing
sculptures, paintings and other objects of art;

                           (xi)        advertising and promotional
expenditures, and the costs of acquisition of any signs installed in or on the
Project which identify the owner of the Project or any tenant of the Project;

                           (xii)       tax penalties and interest imposed as a
result of Landlord’s failure to make payments or to file returns when due,
provided that such failure does not result from Tenant’s failure to timely pay
any amounts of Rent due and payable hereunder;

                           (xiii)      costs associated with the operation of the
business of the entity which constitutes the Landlord (as the same are
distinguished from the costs of operation of the Project), including Landlord’s
general corporate overhead;

                           (xiv)      costs arising from Landlord’s charitable
or political contributions;

                           (xv)       costs
incurred to comply with laws relating to the removal of any Hazardous Material
which was in existence on the Project prior to the date hereof, and was of such
a nature that a federal, state or municipal governmental authority, if it had
then had knowledge of the presence of such Hazardous Material and of the
conditions that then existed on the Project, would have then required the
removal of such Hazardous Material or other remedial or containment action with
respect thereto;

                           (xvi)      costs
incurred to remove, remedy, contain, or treat any Hazardous Material which is
brought onto the Project after the date hereof by any tenant of the Project;
and

                           (xvii)     fines, penalties, fees or similar costs
which are imposed as a result of Landlord’s willful misconduct or Landlord’s
breach of any contract related to the operation of the Project, including any
judgments imposed upon Landlord or the Project as a result thereof.

             (c)         Notwithstanding any other provision
herein to the contrary, if the Project is not fully occupied during any year of
the Term, an adjustment shall be made in computing the variable portions of the
Project Operating Cost for such year so that Project Operating Cost shall be
computed as though the Project had been fully occupied during such year;
provided, however, that in no event shall Landlord collect in total, from
Tenant and all other tenants of the Project, an amount greater than one hundred
percent (100%) of the actual Project Operating Cost during any year of the
Term.

             3.06     Allocation
of Building Operating Cost.  The parties acknowledge that the Building is
a part of a multi-building project (i.e.,
the Project) and that the costs and expenses incurred in connection with the
Project (i.e., the Project
Operating Cost) should be shared between the tenants of the Building and the
tenants of the other buildings in the Project, including, without limitation,
the expenses and costs associated with the management, maintenance,
preservation, ownership and operation of the Common Areas, presently or
hereafter existing at the Project, that are, from time to time, allocated by
Landlord, in its sole but reasonable discretion, between the Building and other
buildings, presently or hereafter existing at the Project.  Accordingly, as set forth in
Section 3.05 above, the Project Operating Cost shall be determined
annually for the Project as a whole, and a portion of the Project Operating
Cost, which portion shall be reasonably determined by Landlord on an equitable
basis, shall be allocated to the tenants of the Building (as opposed to the
tenants of any other buildings in the Project) and such portion shall be the
Building Operating Cost for purposes of this Lease.  Such portion of the Project Operating Cost allocated to the
tenants of the Building shall include all Project Operating Costs attributable
solely to the Building and an equitable portion of the Project Operating Costs
attributable to the Project as a whole. 
Tenant agrees to pay as Additional Rent, Tenant’s Proportionate Share of
such Building Operating Cost as so equitably allocated by Landlord.

             3.07     Adjustment
For Variation Between Estimated and Actual.  If the Building Operating Cost Adjustment
for any calendar year is a positive number (i.e.,
actual cost exceeds estimated cost) Tenant shall pay to Landlord, pursuant to
Landlord’s billing therefor (submitted pursuant to Section 3.08), Tenant’s
Proportionate Share of the Building Operating Cost Adjustment within
thirty (30) days after presentation of Landlord’s statement.  If the Building Operating Cost Adjustment
for any calendar year is a negative number (i.e.,
estimated cost exceeds actual cost), then Landlord at Landlord’s option shall
pay Tenant’s Proportionate Share of the Building Operating Cost Adjustment to
Tenant in cash, within ten (10) days after the Building Operating Cost
Adjustment is finally determined, or credit said amount against future
installments of Estimated Building Operating Cost payable by Tenant hereunder.  Should the Term commence or terminate at any
time other than the first day of a calendar year, Tenant’s Proportionate Share
of the Building Operating Cost Adjustment shall be prorated for the exact
number of calendar days during such calendar year that fall within the Term.

             3.08     Computation of Building Operating Cost Adjustment.  Landlord shall, within a reasonable period
of time after the end of any calendar year for which Estimated Building
Operating Cost differs from Building Operating Cost, give written notice thereof
to Tenant.  The notice shall contain or
be accompanied by a statement (“Building Operating Cost
Statement”) of the Building Operating Cost during such
calendar year (prepared by a certified public accountant), and a computation of
Building Operating Cost Adjustment. 
Landlord’s failure to give such notice and Building Operating Cost
Statement within a reasonable period of time after the end of any calendar year
for which a Building Operating Cost Adjustment is due shall not release either
party from the obligation to make the adjustment provided for in
Section 3.07.

             3.09     Tenant’s
Right To Audit Building Operating Costs.   Provided that (i) no Event of Default
is then occurring hereunder, nor (ii) is any event occurring which with
the giving of notice or the passage of time, or both, would constitute an Event
of Default hereunder (provided that, in the case of clause (ii) above,
such event shall not act to void Tenant’s right to elect to audit as provided
below unless such event continues to occur after Landlord has provided Tenant
with five (5) days written notice of its existence), Tenant, at its sole
expense, shall have the right, exercisable within ninety (90) days after the
receipt of each Building Operating Cost Statement, to review and audit Landlord’s
books and records regarding such Building Operating Cost Statement for the sole
purpose of determining the accuracy thereof. 
Such review or audit shall be performed by a nationally recognized
accounting firm that calculates its fees with respect to hours actually worked
(as opposed to a calculation based upon percentage of recoveries or other
incentive arrangement), shall take place during business hours in the office of
Landlord or Landlord’s property manager and shall be completed within sixty (60)
days after Tenant’s delivery to Landlord of notice of its election to conduct
such audit.  If Tenant does not so
review or audit Landlord’s books and records, Landlord’s Building Operating
Cost Statement shall be final and binding upon Tenant.  In the event that such audit of Landlord’s
books and records reveals that the amount of Building Operating Cost paid by
Tenant pursuant to Section 3.06 above, as adjusted pursuant to
Section 3.07 above, for the period covered by such Building Operating Cost
Statement is less than or greater than the actual amount properly payable by
Tenant under the terms of this Lease, Tenant shall promptly pay any deficiency
to Landlord or, if Landlord concurs with the results of such audit, Landlord
shall promptly refund any excess payment to Tenant, as the case may be.  Without limiting the foregoing, in the event
that such audit reveals an overstatement of Building Operating Cost in excess
of five percent (5%) of the total amount of the Building Operating Cost stated
by Landlord, Landlord shall reimburse Tenant for the reasonable cost of said
audit in addition to refunding any excess payment to Tenant as provided
above.  Both Tenant and Tenant’s
accounting firm shall keep any information gained from its review of Landlord’s
books and records confidential and shall not disclose it to any other party,
except as required by any Laws.

ARTICLE 4

Landlord Covenants

             4.01     Landlord’s
Repairs and Maintenance.  So long as no Event of Default is occurring
under this Lease and subject to any termination of this Lease pursuant to
Section 7.06 below or Section 7.07 below, Landlord agrees to repair
and maintain (i) the structural portions of the Building, (ii) the
exterior wall of the Building, including glass and glazing, (iii) the
roof, (iv) the Common Areas, and (v) those portions of the Base
Building Systems servicing the Building consisting of the mechanical portion of
the heating, ventilation and air–conditioning system (but specifically
excluding any ducts and vents running through and servicing the Leased
Premises), the plumbing pipes extending to the point where such pipes first
enter the Building (but specifically excluding any plumbing located within the
Building and the fixtures and other plumbing within the bathrooms and kitchen
areas of the Leased Premises), the electrical wiring extending to the main
power panel of the Building (but specifically excluding any electrical wiring
and equipment within the Building and any electrical outlets, switches and
other equipment within the Leased Premises), the elevators, if any, within the
Building, and the life safety systems within the Building.  Landlord’s obligation hereunder to repair
and maintain is subject to the condition precedent that Landlord shall have
received written notice of the need for such repairs and maintenance and a
reasonable time to perform such repair and maintenance.  Tenant shall promptly report in writing to
Landlord any defective condition known to it which Landlord is required to
repair.

             4.02     Landlord’s
Right To Perform.  Without limiting any other rights or
remedies of Landlord hereunder or at Law, in the event that Tenant fails or
refuses to perform any of Tenant’s obligations hereunder after notice and the
expiration of any applicable cure period, Landlord shall have the right, but
not the obligation to perform such obligations for Tenant’s account, including,
without limitation, the right to perform any repair, maintenance or replacement
required to be performed by Tenant under Section 5.04 below Lease, and the
right to pay any amounts due to the providers of any Utilities pursuant to
Section 5.02 below.  All costs
incurred by Landlord in performing any such obligations for the account of
Tenant shall be repaid by Tenant to Landlord upon demand, together with an administration
fee equal to fifteen percent (15%) of such costs.

             4.03     Graphics
and Signage.  All signs, notices and graphics of every
kind or character, visible in or from public corridors, the Common Area or the
exterior of the Leased Premises shall be subject to Landlord’s prior written
approval which Landlord shall have the right to withhold in its absolute and
sole discretion.  Without limiting the
foregoing and subject to Landlord’s prior approval of the plans and
specifications thereof (including, without limitation, the design, location,
and size), Tenant shall have the right (“Exterior
Signage Rights”) to install one (1) tenant
identification sign at the top of the Building (the “Sign”),
at Tenant’s sole cost and expense and in accordance with all applicable Laws
(as defined in Section 5.09(a)), REAs (as defined in Section 5.12(d))
and any other private restrictions imposed against the Property (the
“Applicable Requirements”).  Tenant
shall erect the Sign in accordance with the plans and specifications approved
by Landlord and all other requirements related to the installation of
Alterations (as provided in Section 5.07 below), and at all times
thereafter, Tenant shall maintain, at its sole cost and expense, the Sign in a
good, clean and safe condition and in accordance with the Applicable
Requirements, including all repairs and replacements thereto.  At the earlier to occur of
(i) Landlord’s delivery of written notice to remove the Sign following the
occurrence of any Event of Default hereunder, or (ii) upon the termination
or earlier expiration of this Lease, Tenant shall promptly remove the Sign, in
which event Tenant shall be responsible for and shall repair any damage to the
Building resulting therefrom.  Tenant’s
Exterior Signage Rights hereunder are personal to Deltagen, Inc. and may not be
assigned or transferred except with the prior written consent of Landlord,
which consent may be given or withheld in Landlord’s sole and absolute
discretion.  Tenant shall be responsible
for obtaining all permits and approvals (governmental and private) necessary
for the installation and maintenance of the Sign.  Notwithstanding the foregoing, if at any time Deltagen, Inc. no
longer personally occupies (and specifically excluding any area of the Leased
Premises occupied by any sublessee or assignee of Deltagen, Inc.) at least
fifty–one percent (51%) of the square footage of the Building, Tenant’s
Exterior Signage Rights granted hereunder shall terminate and be of no further
force or effect and Tenant shall promptly thereafter remove the Sign, in which
event Tenant shall be responsible for and shall repair any damage to the
Building resulting therefrom.  If Tenant
fails to remove the Sign as required under this Section 4.03, Landlord
shall have the right, at Tenant’s expense, to remove the Sign.  Tenant shall indemnify, defend and protect
Landlord and the Landlord Parties and hold Landlord and the Landlord Parties
harmless from and against any and all, proceedings, losses, costs, damages,
causes of action, liabilities, injuries or expenses arising out of or related
to Tenant’s exercise of the Exterior Signage Rights granted hereunder,
including, without limitation, any claims of injury to or death of persons or
damage to property occurring or resulting directly or indirectly from the
installation or maintenance of the Sign on the Building.

             4.04     Peaceful Enjoyment.  So long as no Event of Default has occurred,
Tenant shall peacefully have, hold and enjoy the Leased Premises, subject to
the other terms hereof.  This covenant
and the other covenants of Landlord contained in this Lease shall be binding
upon Landlord and its successors only with respect to breaches occurring during
its and their respective ownership of Landlord’s interest hereunder.

ARTICLE 5

Tenant’s Covenants

             5.01     Payments
By Tenant.  Tenant shall pay Rent at the times and in
the manner herein provided.  All
obligations of Tenant hereunder to make payments to Landlord shall constitute
Rent and failure to pay the same when due shall give rise to the rights and
remedies provided for in Section 7.08.

             5.02     Utilities.  Tenant shall pay the cost of all water,
sewer use, sewer discharge fees and permit costs and sewer connection fees,
gas, heat, electricity, refuse pick-up, janitorial service, telephone and other
telecommunications and all materials and services or other utilities
(collectively, “Utilities”) applicable to the Leased Premises and/or Tenant,
together with all taxes, assessments, charges and penalties added to or
included within such cost.  Tenant shall
arrange to be separately billed by the provider of such Utilities, provided,
that to the extent that any such costs, fees and taxes are not separately
billed to Tenant, Tenant shall pay the amount thereof as invoiced to Tenant by
Landlord, within ten (10) days after receipt of an invoice therefor.  Tenant acknowledges that the Leased
Premises, the Building and/or the Project may become subject to the rationing
of Utility services or restrictions on Utility use as required by a public
utility company, governmental agency or other similar entity having
jurisdiction thereof.  Tenant
acknowledges and agrees that its tenancy and occupancy hereunder shall be
subject to such rationing or restrictions as may be imposed upon Landlord,
Tenant, the Leased Premises, the Building and/or the Project, and Tenant shall
in no event be excused or relieved from any covenant or obligation to be kept
or performed by Tenant by reason of any such rationing or restrictions.  Tenant agrees to comply with energy
conservation programs implemented by Landlord by reason of rationing,
restrictions or Laws.

               Landlord shall not be liable for any loss,
injury or damage to property caused by or resulting from any variation,
interruption, or failure of Utilities due to any cause whatsoever, or from
failure to make any repairs or perform any maintenance.  No temporary interruption or failure of such
services incident to the making of repairs, alterations, improvements, or due
to accident, strike, or conditions or other events shall be deemed an eviction
of Tenant or relieve Tenant from any of its obligations hereunder.  In no event shall Landlord be liable to
Tenant for any damage to the Leased Premises or for any loss, damage or injury
to any property therein or thereon occasioned by bursting, rupture, leakage or
overflow of any plumbing or other pipes (including, without limitation, water,
steam, and/or refrigerant lines), sprinklers, tanks, drains, drinking fountains
or washstands, or other similar cause in, above, upon or about the Leased
Premises, the Building, or the Project. 
Notwithstanding the foregoing, in the event that Tenant is prevented
from using, and does not use, the Leased Premises or any portion thereof, as a
result of Landlord’s negligence or willful failure to perform the obligations
set forth in clause (v) of Section 4.01 (hereinafter, an “Abatement Event”) then
Tenant shall give Landlord notice of such Abatement Event, and if such
Abatement Event continues for five (5) consecutive business days after
Landlord’s receipt of any such notice (the “Eligibility
Period”), then the Base Rent shall be abated or reduced, as
the case may be, after expiration of the Eligibility Period for such time that
Tenant continues to be so prevented from using, and does not use, the Leased
Premises or a portion thereof, in the proportion that the rentable area of the
portion of the Leased Premises that Tenant is prevented from using, and does
not use, bears to the total rentable area of the Leased Premises; provided,
however, that such abatement of Base Rent shall be allowed only to the extent
Landlord is reimbursed from the proceeds of rental interruption insurance
purchased, or required to be purchased under Section 7.01 below, by
Landlord as part of Building Operating Cost.

             5.03     Taxes
On Personal Property and Alterations.  In addition to, and wholly apart from its
obligation to pay Tenant’s Proportionate Share of Building Operating Costs,
Tenant shall be responsible for and shall pay prior to delinquency 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 its
Alterations, on its interest pursuant to this Lease or on any use made of the
Leased Premises or the Common Areas by Tenant in accordance with 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.

             5.04     Repairs By Tenant.  Tenant shall, at all times and at Tenant’s
sole cost and expense, maintain and repair the Leased Premises and keep the
same in the same order and condition as received, reasonable wear and tear
excepted.  Tenant shall not do nor shall
Tenant allow the Tenant Parties to do anything to cause any damage,
deterioration or unsightliness to the Leased Premises, the Building or the
Project.  Tenant’s obligations hereunder
shall include, without limitation: (i) the obligation to maintain and
repair and keep the Leased Premises in same order and condition as received
and, in connection therewith, repair and replace every part thereof, including,
without limitation all walls, floors, ceilings, interior glass, windows, window
frames and casements, interior doors and door frames and door closers,
fixtures, interior lighting (including, without limitation, light bulbs and
ballasts), the portions of the Building Systems not otherwise maintained by
Landlord pursuant to clause (v) of Section 4.01 above, all
communications systems serving the Building, signage, equipment, interior
painting, and any roll-up doors, ramps and dock equipment, including, without
limitation, dock bumpers, dock plates, dock seals, dock levelers and dock
lights located in or about the Building, whatever the scope of the work of
maintenance or repair required (excepting only those portions of the Building
or the Project to be maintained by Landlord, as provided in Section 4.01
above), (ii) the obligation to furnish all expendables, including light
bulbs, paper goods and soaps, used in the Leased Premises, and (iii) the
obligation to repair all damage caused by Tenant or Tenant Parties to any
portion of the Project, whatever the scope of the repair required.  Tenant shall repair all damage caused by
removal of Tenant’s movable equipment or furniture or the removal of any
Alterations permitted or required by Landlord, all as provided in
Section 5.18.  Without limiting the
foregoing, any work of repair and maintenance performed by or for the account
of Tenant shall be performed by contractors approved by Landlord prior to
commencement of the work and in accordance with procedures Landlord shall from
time to time establish.  All such work
shall be performed in compliance with all applicable laws, ordinances, rules
and regulations and Tenant shall provide to Landlord copies of all permits and
records of inspection issued or obtained by Tenant in connection therewith to
establish such compliance.

             5.05     Waste.  Tenant shall not commit or allow any waste
or damage to be committed in any portion of the Leased Premises.

             5.06     Assignment or Sublease.

             (a)         If
Tenant intends to assign this Lease or sublet the Leased Premises or any part
thereof, Tenant shall give Landlord written notice of such intent.  Tenant’s notice shall set forth the date any
such assignment or sublease shall commence and be accompanied by an exact copy
of the proposed agreements between Tenant and the proposed assignee or
subtenant.  Tenant shall provide
Landlord with (i) any additional information or documents reasonably
requested by Landlord, within ten (10) days after receiving Tenant’s
notice, and (ii) an opportunity to meet and interview the proposed
assignee or subtenant, if requested by Landlord.

             (b)        Landlord
shall then have a period of twenty (20) days following such interview and
receipt of such additional information (or thirty (30) days from the date
of Tenant’s original notice if Landlord does not request additional information
or an interview) (“Landlord’s Review Period”)
within which to notify Tenant in writing whether Landlord approves or
disapproves of the proposed assignee or sublessee, provided, that Landlord’s
approval shall not be unreasonably withheld so long as:  (i) the use of the Leased Premises by
such proposed assignee or sublessee would be a Permitted Use; (ii) the
proposed assignee or sublessee is of sound financial condition as determined by
Landlord; (iii) the proposed assignee’s or sublessee’s use will not
involve the storage, use, treatment or disposal of any Hazardous Material
(except for Permitted Hazardous Materials transported, stored and used in
accordance with the provisions of this Lease); (iv) the proposed use or
the proposed assignee or sublessee would not cause the violation of any covenant
or agreement of Landlord to any third party or would permit any other tenant to
terminate its lease; and (v) the proposed subtenant or assignee does not
then lease or occupy any other space in the Project, provided that the
restriction contained within this item (v) shall only apply where Landlord
has other space within the Project which would generally fit the proposed
subtenant’s/assignee’s requirements and which could otherwise be made available
for lease by such party.  Failure by
Landlord to approve a proposed subtenant or assignee shall not cause a
termination of this Lease, and the sole remedy of Tenant shall be an action for
injunctive or declaratory relief.

             (c)         Notwithstanding the provisions of
Section 5.06(b) above, if any sublease or assignment proposed by Tenant
involves (A) a proposed assignee or sublessee who is not an Affiliated
Entity (as defined below), and (B) either (i) an area of greater than
fifty percent (50%) of the Leased Premises (whether individually, or in the
aggregate when taken together with any previously permitted sublease or
assignment to the same party), or (ii) a sublet or assignment term of
longer than four (4) years, then in addition to the approval rights granted to
Landlord pursuant to Section 5.06(b) above, Landlord shall have the right,
exercisable by written notice delivered to Tenant on or before the expiration
of Landlord’s Review Period, to elect to terminate this Lease as to the space
so affected as of the date so specified by Tenant in its notice under Section 5.06(a)
above, in which event Tenant will be relieved of all further obligations
hereunder as to such space.  For the
purposes hereof, “Affiliated Entity” shall
mean any firm or corporation which is either (x) a wholly owned subsidiary
of the initial tenant hereunder, or (y) an entity which results from the
merger or consolidation of the original tenant hereunder with another entity.

             (d)        For the
purposes of this Section 5.06(d), the term “Transfer
Costs” shall mean, with respect to any sublease or assignment,
the following costs: 
(i) reasonable and customary market–based leasing
commissions, (ii) reasonable attorney’s fees, (iii) the reasonable
costs of Alterations which have been approved by Landlord and are required to
be made to the Leased Premises in connection with such sublease or assignment
in order to separately demise the subleased or assigned premises, and
(iv) fifty percent (50%) of the undepreciated portion of the reasonable
costs incurred by Tenant in construction and installation of non–building
standard heating, ventilation and air conditioning systems (“Non–Standard HVAC Systems”)
servicing the laboratories, testing rooms or other research facilities, if any,
located within the portion of the Leased Premises which is the subject of such
sublease or assignment with such undepreciated portion to be determined by
depreciating such costs incurred in construction and installation of the Non–Standard
HVAC Systems on a straight–line basis over the portion of the initial
Term of the Lease remaining following Tenant’s construction of such Non–Standard
HVAC Systems; provided, however, that the costs identified as items (i),
(ii) and (iii) shall only be included in Transfer Costs if they have been
actually paid directly by Tenant in connection with any such sublease or
assignment, and the costs identified as item (iv) shall only be included
in Transfer Costs to the extent (1) that Landlord has approved the
installation of such Non–Standard HVAC Systems in the same manner as
other Alterations hereunder and, at the time of such approval, Landlord and
Tenant have mutually agreed upon what items constitute such Non–Standard
HVAC Systems and, following Tenant’s submission of invoices related to the
construction and installation of such Non–Standard HVAC Systems, Landlord
and Tenant have mutually agreed upon the actual reasonable costs associated
with the same which are to be the subject of such item (iv); and
(2) that such Non–Standard HVAC Systems are installed for the
purpose of servicing laboratories, testing rooms or other research facilities,
if any, located within the Leased Premises, as opposed to computer rooms,
office areas and/or other non–laboratory areas of the Leased
Premises.  Any rent or other
consideration realized by Tenant under any such sublease or assignment in
excess of the Rent payable hereunder, after first deducting the applicable
amortized portion of any Transfer Costs applicable to such sublease or
assignment, shall be divided and paid fifty percent (50%) to Tenant and fifty
percent (50%) to Landlord.  For the purposes of the aforesaid
calculation, Transfer Costs, if any, shall be amortized on a straight–line
basis over the term of such sublease or assignment.  Without limiting the foregoing, in the event that (x) a
sublease or assignment of all or a portion of the Leased Premises includes
laboratories, testing rooms or other research facilities, and (y) Tenant
establishes to the reasonable satisfaction of Landlord that the sublease or
assignment rent obtained under such sublease or assignment exceeds the sublease
or assignment rent which would have been obtained if the subject space were
general office space as opposed to laboratories, testing rooms or other
research facilities (such aggregate excess rent being referred to herein as the
“Laboratory Excess”), then
Landlord will permit Tenant to include within the calculation of Transfer Costs
those costs (“Laboratory Costs”) incurred
by Tenant in construction and installation of any specialized laboratory
improvements (as opposed to standard building improvements erected within
general office space) (herein “Laboratory Improvements”),
provided that (m) Landlord has previously approved the installation of
such Laboratory Improvements in the same manner as other Alterations hereunder,
(n) at the time of such approval, Landlord and Tenant mutually agreed upon
the identity of the items that would constitute such Laboratory Improvements,
and (o) following Tenant’s submission of invoices related to the
construction and installation of such Laboratory Improvements, Landlord and
Tenant mutually agreed upon the actual reasonable Laboratory Costs associated
with the same.  For the purposes herein,
Laboratory Costs shall not include any amounts with respect to Non–Standard
HVAC Systems.  Notwithstanding anything
to the contrary herein, Tenant shall not be allowed to include within the
calculation of Transfer Costs any portion of the applicable Laboratory Costs
which exceed the amount of the Laboratory Excess associated therewith after
first deducting from such Laboratory Excess the costs set forth in
item (iv) above.

             (e)         In any subletting undertaken by Tenant,
Tenant shall diligently seek to obtain not less than Fair Market Rent for the
space so sublet.  In any assignment of
this Lease in whole or in part, Tenant shall seek to obtain from the assignee
consideration reflecting a value of not less than Fair Market Rent for the
space subject to such assignment. 
Tenant shall provide to Landlord, upon Landlord’s demand, true and
correct executed copies of the documents constituting such sublease or
assignment and any amendments thereof during the Term.

             (f)         No assignment or subletting by Tenant
shall relieve Tenant of any obligation under this Lease.  Any assignment or subletting that conflicts
with the provisions hereof shall be void. 
No consent by Landlord to any subletting or assignment shall constitute
a consent to any other assignment or subletting nor shall it constitute a
waiver of any of the provisions of this Section 5.06 as they apply to any
such future sublettings or assignments.

             (g)        Any assignee shall assume in writing,
for the express benefit of Landlord, all of the obligations of Tenant under
this Lease, provided that no such assumption shall be deemed a novation or
other release of the prior Tenant. 
Following any assignment, the obligations for which the prior Tenant
remains liable under this Lease shall include, without limitation, any
obligations arising in connection with any amendments to this Lease executed by
Landlord and the assignee, whether or not such amendments are made with
knowledge or consent of the prior Tenant.

             (h)        Tenant shall not market or otherwise
offer space within the Leased Premises for sublease or assignment, nor shall
Tenant enter into any subletting or assignment of this Lease until after the
Term Commencement Date has occurred.

             (i)          Any improvements, additions, or
alterations to the Building or the Project that are required by any law,
ordinance, rule or regulation, or are deemed necessary or appropriate by
Landlord as a result of any subletting or assignment hereunder, shall be
installed and provided without cost or expense to Landlord.  Landlord may condition its consent to any
proposed sublessee or assignee on the construction of improvements reasonably
deemed necessary or appropriate by Landlord in order to separately demise the
subleased or assigned premises.

             (j)          Landlord may hire outside consultants
to review all assignment and subletting documents and information.  Tenant shall reimburse Landlord for the cost
thereof, including reasonable attorneys’ fees, on demand.

             (k)         Without liability to Tenant, Landlord
shall have the right to offer and to lease space in the Building, or in any
other property, to any party, including, without limitation, parties with whom
Tenant is negotiating, or with whom Tenant desires to negotiate, concerning
assignment or subletting the Leased Premises, or any portion thereof.

             5.07     Alterations, Additions
or Improvements.

             (a)          
Tenant shall not make or allow to be made any
alterations, additions or improvements in or to the Leased Premises
(collectively, “Alterations”) without
obtaining the prior written consent of Landlord.  Landlord’s consent shall not be unreasonably withheld with
respect to proposed Alterations that (i) comply with all applicable laws,
ordinances, rules and regulations, (ii) are compatible with the Building
and the Building Systems, (iii) will not interfere with the use and
occupancy of any other portion of the Building or the Project by any other
tenant or their invitees, (iv) do not affect the structural portions of
the Building, (v) do not and will not, whether alone or taken together
with other improvements, constitute a violation of the Permitted Use of the
Leased Premises, (vi) do not and will not, involve the demolition of
current office improvements within the Building for the purpose of installation
of any warehouse space or any laboratories, testing rooms or other research
facilities, and (vii) do not and will not, whether alone or taken together
with other improvements, require the construction of any other improvements or
alterations within the Building or the Project.  With respect to all other proposed Alterations, Landlord may
withhold its consent in Landlord’s sole and absolute discretion, provided, that
with respect to any Alterations which involve the construction and installation
of any laboratories, testing rooms or other research facilities, Landlord will
not withhold its consent so long as (x) Tenant’s demonstrated then current
Net Cash Position (as such term is defined within Section 5.14(b) below)
at the time of Tenant’s request for consent to such Alterations is equal to or
greater than Thirty Million Dollars ($30,000,000.00), (y) Tenant delivers
the applicable Supplemental Credit (as defined within and within the time
period required by Section 5.14(d) below), and (z) if requested by
Landlord pursuant to Section 5.18 below, Tenant shall, as a part of the
restoration obligations set forth in Section 5.18 below, remove such
laboratories, testing rooms or other research facilities at the expiration or
sooner termination of this Lease and restore the affected portions of the
Leased Premises to the condition required within said Section 5.18
below.  In determining whether or not to
consent to proposed Alterations, Landlord shall have the right (without
limitation) to review plans and specifications for proposed Alterations,
construction means and methods, the identity of any contractor or subcontractor
to be employed on the work of Alterations, and the time for performance of such
work.  In addition, Landlord shall have
the right to approve, which approval shall not be unreasonably withheld,
Tenant’s engineers, architects and contractors who will be engaged in connection
with Tenant’s construction and installation of any Alterations approved by
Landlord.  Tenant shall supply to
Landlord any documents and information requested by Landlord in connection with
the exercise of its rights hereunder. 
Landlord may hire outside consultants to review such documents and
information and Tenant shall reimburse Landlord for the cost thereof, including
reasonable attorneys’ fees, upon demand. 
All Alterations permitted hereunder shall be made and performed by
Tenant without cost or expense to Landlord. 
Tenant shall pay Landlord, upon completion of any Alteration, a
reasonable fee for Landlord’s supervision and administration of the
installation thereof; provided, however, that such fee shall not be deemed to
be “income” for purposes of
calculating management cost recovery under Section 3.05(a)(vii).  The obligations of the parties with respect
to removal of Alterations shall be controlled by Section 5.18.  Without limiting the foregoing, before
Alterations may begin, Tenant shall provide Landlord with copies of valid
building permits or other permits or licenses required for the construction of
such Alterations and Tenant shall, at Tenant’s sole cost and expense, during
the course of construction of any Alterations, maintain builders’ risk
insurance for the amount of the completed value of the Alterations on an
all-risk non-reporting form covering all improvements under construction,
including building materials, and such other insurance in amounts and against
such risks as Landlord shall reasonably require in connection with the
Alterations, including, without limitation, naming Landlord and Mortgage Lender
(as defined in Section 5.12 below) as loss payee under any such policy or
policies.  In addition to and without
limitation on the generality of the foregoing, Tenant shall ensure that its
contractor(s) procure and maintain in full force and effect, during the course
of construction of such Alterations, a “broad form” commercial general
liability and property damage policy of insurance naming Landlord, Tenant and
Mortgage Lender as additional insureds. 
Such insurance shall have policy limits approved by Landlord, from time
to time with reference to the scope of the Alterations to be performed, but in
no event less than Three Million Dollars ($3,000,000.00) combined single limit
for bodily injury or property damage in any one accident or occurrence, and
shall contain a severability of interest clause or a cross liability
endorsement.

             (b)         
Subject to Landlord’s prior written approval of
the plans and specifications therefor (including, without limitation, the
location, size, and color of the equipment and all associated cabling and
wiring to be installed by Tenant throughout the Building, including any
penetrations of the roof membrane of the Building), during the Term, Tenant
may, at its sole cost and expense, construct and maintain up to three (3)
antennas on the roof of the Building together with related cabling and
equipment (the “Antenna Equipment”).  Notwithstanding the foregoing, the
location(s) of any penetration of the roof membrane of the Building shall be
determined by Landlord in its sole and absolute discretion.  For the purposes herein, it shall be
reasonable for Landlord to withhold its approval of the installation of any such
Antenna Equipment which (i) will, in Landlord’s reasonable judgment,
damage or impair the structural integrity of the Building (including the roof),
(ii) will result in an unsafe condition affecting Landlord’s employees or
contractors authorized to have access to the roof, or (iii) will interfere
with any then existing equipment of Landlord located on the roof, or interfere
with any then existing equipment or services of any third party, including any
other tenant at the Project.  Upon
receipt of Landlord’s prior written approval of the plans and specifications as
set forth herein, Tenant shall erect the Antenna Equipment in accordance with
the approved plans and specifications, in a good and workmanlike manner, in
accordance with the requirements for all other Alterations set forth in Section 5.07(a)
above, and in a manner so as not to interfere with the use of the Project by
any other tenant or occupant.  Tenant
shall at all times operate and maintain the Antenna Equipment in a good, clean
and safe condition, in accordance with all Laws (as defined in
Section 5.09(a) below) and in a manner so as not to interfere with the use
of the Project by any other tenant or occupant.  Tenant shall provide Landlord with reasonable advance written
notice prior to entering upon the roof of the Building so that Landlord may, if
it so desires, have a representative accompany Tenant onto the roof.  Upon the expiration or sooner termination of
this Lease or Tenant’s right to possession of the Leased Premises, Tenant
shall, at Tenant’s sole cost and expense, promptly remove the Antenna
Equipment, including, without limitation, all associated wiring and cabling
throughout the Building, and repair any damage to the Building resulting
therefrom.  If Tenant fails to remove
the Antenna Equipment on or before the expiration or sooner termination of this
Lease or Tenant’s right to possession of the Leased Premises, Landlord may, at
Tenant’s expense, remove the Antenna Equipment and perform the related
restoration and repair work, and use, dispose of or take such other actions
with respect to the Antenna Equipment as Landlord may deem appropriate, all
without compensation or payment to Tenant. 
Tenant shall indemnify, defend, protect and hold harmless Landlord and
the Landlord Parties from all Claims (as defined in Section 5.17 below)
arising from or in any way directly or indirectly relating to the construction,
installation, maintenance, use, operation or removal of the Antenna Equipment.

             5.08     Liens.  Tenant shall keep the Leased Premises and
the Project free from any liens arising out of any (i) work performed or
material furnished to or for the Leased Premises, and (ii) obligations
incurred by or for Tenant or any person claiming through or under Tenant.  Tenant shall, within ten (10) business
days following the imposition of any such lien, cause such lien to be released
of record by payment or posting of a bond fully satisfactory to Landlord in
form and substance.  Landlord shall have
the right at all times to post and keep posted on the Leased Premises any
notices permitted or required by law, or that Landlord shall deem proper for
the protection of Landlord, the Leased Premises, the Project and any other
party having an interest therein, from mechanics’, materialmen’s and other
liens.  If Tenant fails in its
obligations to cause any such lien to be released of record within said
ten (10) business day period, Landlord may cause such liens to be released
by any means it deems proper, including, without limitation, payment of any
such lien, at Tenant’s sole cost and expense.  All costs and expenses incurred by Landlord in causing such liens
to be released shall be repaid by Tenant to Landlord immediately upon demand,
together with an administration fee equal to twenty percent (20%) of such costs
and expenses.  In addition to all other
requirements contained in this Lease, Tenant shall give to Landlord at least
fifteen (15) business days’ prior written notice before commencement of
any construction on the Leased Premises.

             5.09     Compliance
With Laws, Insurance Standards and Non-Discrimination.

             (a)         Tenant
shall comply with all Laws, now or hereafter in force, as amended from time to
time, in any way related to the use, condition or occupancy of the Leased
Premises, regardless of when they become effective, including, without limitation,
all applicable Hazardous Materials Laws, the Americans with Disabilities Act of
1990, as amended; provided however, that Tenant shall not be required to make
or, except as provided in Section 3.05 above, pay for any capital
improvements or structural changes to the Leased Premises or the Building not
related to Tenant’s specific use of the Leased Premises unless the requirement
for any such capital improvements or structural changes is imposed as a result
of any Alterations made or proposed to be made at Tenant’s request.  Tenant shall immediately deliver to Landlord
a copy of any notices received from any governmental agency in connection with
the Leased Premises.  It is the
intention of Tenant and Landlord that the obligations of Tenant under this Section 5.09
shall apply irrespective of the scope of work required to achieve such
compliance.  Tenant shall promptly cure
and satisfy all Hazardous Materials Claims arising out of or by reason of the
activities or businesses of Tenant, its sub-tenants, or Tenant Parties or any
employees, agents, contractors, officers, directors, partners, licensees,
invitees and guests of Tenant’s sub-tenant. 
Nothing done by Tenant in its use or occupancy of the Leased Premises
shall create, require or cause imposition of any requirement by any
governmental authority for structural or other upgrading of or improvement to
the Project.

             (b)        Tenant shall not occupy or use, or
permit any portion of the Leased Premises to be occupied or used, for any
business or purpose that is disreputable or productive of fire hazard, or
permit anything to be done that would increase the rate of fire or other
insurance coverage on the Project and/or its contents.  If Tenant does or permits anything to be
done that shall increase the cost of any insurance policy required to be
carried hereunder, then Tenant, at Landlord’s option, shall not be in default
under this Lease, but shall reimburse Landlord, upon demand, for any such
additional premiums.  Landlord shall
deliver to Tenant a written statement setting forth the amount of any such
insurance cost increase and showing in reasonable detail the manner in which it
has been computed.

             (c)         Tenant herein covenants by and for
himself or herself, his or her heirs, executors, administrators and assigns,
and all persons claiming under or through him or her, and this Lease is made
and accepted upon and subject to the following conditions:  That 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, sexual orientation, national
origin or ancestry in the leasing, subleasing, transferring, use, occupancy,
tenure or enjoyment of the Leased Premises herein leased, nor shall Tenant, or
any person claiming under or through him or her, establish or permit any such
practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, subtenants,
sublessees or vendees in the Leased Premises herein leased.

             5.10     Entry
For Repairs, Inspection, Posting Notices, Etc.  After reasonable notice (except in
emergencies where no such notice shall be required), Landlord or Landlord
Parties shall have the right to enter the Leased Premises to inspect the same,
to clean, to perform such work as may be permitted or required hereunder, to
make repairs to the Building or other areas of the Project or to make
alterations of the Project (with the exception of alterations to the interior
areas of the Building), to deal with emergencies, to post such notices as may
be permitted or required by law to prevent the perfection of liens against
Landlord’s interest in the Project or to exhibit the Leased Premises to
prospective tenants, purchasers, encumbrancers or others, or for any other
purpose as Landlord may deem necessary or desirable; provided, however, that in
exercising any such right of entry Landlord shall not unreasonably interfere
with Tenant’s business operations.  Tenant
shall not be entitled to any abatement of Rent by reason of the exercise of any
such right of entry or about the Project.

             5.11     No Nuisance.  Tenant shall conduct its business and
control Tenant Parties without creating any nuisance, or interfering with,
annoying, endangering or disturbing any other tenant or Landlord in its
operation of the Project.  Tenant shall
not place any loads upon the floor, walls or ceiling of the Leased Premises
that endanger the structure nor place any harmful liquids or Hazardous Material
in the drainage system of the Building. 
Tenant shall not permit any vibration, noise or odor to escape from the
Leased Premises and shall not do or permit anything to be done within the
Leased Premises which would adversely affect the quality of the air in the
Building or about the Project.  Tenant
shall promptly provide Landlord with copies of all permits issued to Tenant by
the Bay Area Air Quality Management District (the “Air
Management District”) and any other governmental agency
responsible for or having jurisdiction over matters related to air quality,
together with copies of all correspondence between Tenant and the Air
Management District or such other agencies. 
Tenant acknowledges that the Project is a
first-class office and research and development campus and that “objectionable
odors” is a subjective standard. 
Accordingly, Tenant agrees that, if Landlord in its sole and absolute
discretion determines that odors emanating from the Premises are leading to
chronic complaints from other tenants and occupants of the Project, Tenant
shall promptly use its best efforts to correct the situation, at Tenant’s sole
cost and expense, to Landlord’s satisfaction. 
Such measures to be taken by Tenant shall include, without limitation,
the hiring of special consultants and the making of capital improvements to the
Leased Premises, including, without limitation, the replacing or upgrading of
equipment.  Without limiting the
provisions of Section 5.07(a) above, in the event that Landlord approves
the installation and construction of any laboratories, or testing rooms or
other research facilities within the Leased Premises, then as a component of
any Alterations made by Tenant to the Leased Premises, Tenant shall install
fume hoods, as well as a rooftop venting and exhaust system designed to
increase the velocity of exhaust such that any odors shall be discharged high
into the atmosphere in order to minimize the risk of odors detectable at ground
level.  In addition, Tenant shall
install and utilize such additional venting, exhaust and quenching systems,
including, without limitation, base quenching, distillation units, acid
quenching, and mechanical exhaust/filtration systems, as appropriate to reduce
the risk of emanation of such odors in or about the Project.  In all events, and irrespective of whether
or not Landlord has received chronic complaints from other tenants or occupants
of the Project, Tenant shall strictly comply with the measures set forth in
this Section 5.11 and any additional measures reasonably required by
Landlord from time to time to eliminate the emanation of objectionable odors
from the Leased Premises.  Without
limiting any other rights or remedies of Landlord under this Lease, Landlord
reserves the right, after providing Tenant notice of and a reasonable
opportunity to cure any problems relating to odors, to take such actions as
Landlord deems necessary in its sole and absolute discretion to eliminate any
such odors emanating from the Leased Premises. 
Tenant shall promptly reimburse Landlord upon demand for all costs incurred
by Landlord in enforcing its rights under this Section 5.11.

             5.12     Subordination;
Mortgagee Protection; Reciprocal Easement Agreements.

             (a)         Tenant agrees that, upon Tenant’s
receipt of a subordination, non–disturbance and attornment agreement, this
Lease and the rights of Tenant hereunder are subject and subordinate to the
holder of or beneficiary under any mortgage or deed of trust whether now or in
the future encumbering the Project (the “Mortgage
Lender”) and to any and all advances made thereunder, and
interest thereon, and all modifications, renewals, supplements, consolidations
and replacements thereof.  Tenant
agrees, however, that the Mortgage Lender may at its option, unilaterally elect
to subordinate, in whole or in part, by an instrument in form and substance
satisfactory to such Lender, the lien of such mortgage or deed of trust to this
Lease.  In such case, Tenant agrees to
execute promptly and to deliver to Landlord or such Mortgage Lender any such
subordination instrument or instruments requested by such Lender and agrees
that if it fails or refuses to do so within fifteen (15) days after
written request therefor by Landlord or such Mortgage Lender, such failure or
refusal shall constitute a default by Tenant under this Lease, but such failure
or refusal shall in no way affect the validity or enforceability of any such
subordination made by such Mortgage Lender.

             (b)        Any successor in interest to any
Mortgage Lender shall not be bound by (i) any payment of Gross Rent for
more than one (1) month in advance, or (ii) any amendment or
modification of this Lease made without the written consent of the Mortgage
Lender.  Nothing herein contained shall
be deemed to impose upon the person or party succeeding to the interest of
Landlord as a result of the enforcement of such mortgage or first deed of trust
by any Mortgage Lender, any obligation for defaults on the part of Landlord,
and any person or party succeeding to possession of the Project as a successor
to Landlord shall be subject to Landlord’s obligations hereunder only during
the period of such persons’ or party’s ownership.

             (c)         Tenant shall not sue, seek any remedy
or enforce any right against Landlord until (a) Tenant gives written
notice to any Mortgage Lender and (b)  if Landlord shall have failed to
cure the default which would otherwise be the subject of such matter within the
time period provided for in this Lease, then the Mortgage Lender shall have an
additional forty–five (45) days after the expiration of such time
period, or after receipt of such notice from Tenant (whichever shall last
occur) within which to cure such default or if such default cannot be cured
within that time, then such additional time as may be necessary if within such
forty–five (45) days, any Mortgage Lender has commenced and is
diligently pursuing the remedies necessary to cure such default, in which event
this Lease shall not be terminated, provided, that it is agreed that the
Mortgage Lender shall have no obligation to Tenant to cure or remedy any act or
omission of Landlord.

             (d)        Tenant
agrees that this Lease and the rights of Tenant hereunder are subject and
subordinate to any easements, reciprocal easement agreements, rights of way,
covenants, conditions and restrictions or similar property interests, whether
now or in the future affecting the Project (collectively, the “REAs”); provided, however,
that any future REAs shall not materially adversely affect any specific rights
granted to Tenant hereunder.  Landlord
represents to Tenant that Landlord has not personally created any REAs
encumbering or otherwise affecting the Project as of the date of Landlord’s
execution of this Lease.  Tenant agrees
to execute promptly and to deliver to Landlord any subordination instrument or
instruments requested by Landlord and agrees that if it fails or refuses to do
so within fifteen (15) days after written request therefor by Landlord,
such failure or refusal shall constitute a default by Tenant under this Lease,
but such failure or refusal shall in no way affect the validity or
enforceability of any such subordination.

             5.13     Estoppel Certificate.  Within ten (10) days of a written
request from the other party, Landlord or Tenant, as applicable, shall execute
estoppel certificates addressed to (i) in the case of a request by
Landlord, Landlord and (1) any mortgagee or prospective mortgagee of
Landlord, or (2) any purchaser or prospective purchaser of all or any
portion of, or interest in, the Project, on a form specified by Landlord,
certifying as to such facts (if true) and agreeing to such notice provisions
and other matters as such mortgagee(s) or purchaser(s) may reasonably require,
and (ii) in the case of a request by Tenant, (1) a prospective lender
or other financier of Tenant, or (2) a prospective sublessee or assignee
who has been approved by Landlord in accordance with Section 5.06 above;
provided, however, that in no event shall any such estoppel certificate require
an amendment of the provisions hereof, although the party delivering such
estoppel certificate shall be bound by the statements made in such
certificate.  In the event that Landlord
or Tenant, as applicable fails or refuses to deliver such an estoppel
certificate to the requesting party within ten (10) days of a written
request from such requesting party, then the requesting party may give to
Landlord or Tenant, as applicable, a second notice, reiterating the request
that Landlord or Tenant, as applicable, execute an estoppel certificate and
stating that, if Landlord or Tenant, as applicable, fails to do so within
five (5) days of the receipt of such second notice from the requesting
party, that Landlord or Tenant, as applicable, shall be deemed to be bound by
the statements set forth in the form of certificate which the requesting party
delivered to Landlord or Tenant, as applicable.  In the event that Landlord or Tenant, as applicable, fails to
deliver an estoppel certificate in the form specified by the requesting party
within five (5) days of the receipt by Landlord or Tenant, as applicable,
of such second notice from the requesting party, Landlord or Tenant, as
applicable, shall conclusively be deemed, without exception, to have
acknowledged the correctness of the statements set forth in the form of
certificate which the requesting party delivered, and Landlord or Tenant, as
applicable, shall be estopped from denying the correctness of each such
statement, such that the requesting party together with the applicable parties
on behalf of which such requesting party may request such estoppel certificate,
as referenced above, may rely on the correctness of the statements in such form
of certificate, as if made and certified by Landlord or Tenant, as
applicable.  A failure by Tenant to
deliver an estoppel certificate in the form specified by Landlord within fifteen (15)
days of the receipt by Tenant of an initial request from Landlord for such
certificate shall also constitute a material breach of this Lease by Tenant.

             5.14     Letter
of Credit.

             (a)          
Upon execution of this Lease, Tenant shall
deliver to Landlord, by wire transfer of immediately available funds, cash in
the amount of One Million Seven Hundred One Thousand Four Hundred Eighty–One
Dollars ($1,701,481.00) (hereinafter, the “Cash
Equivalent”), as security for Tenant’s performance of all of
Tenant’s covenants and obligations under this Lease.  Within fifteen (15) business days after the execution of
this Lease, Tenant shall, at Tenant’s sole cost and expense, deliver to
Landlord the Letter of Credit described below in an amount equal to the “LC Face Amount” (as
defined below) then required to be maintained hereunder, as a substitution for
and replacement of the Cash Equivalent, which Letter of Credit will thereafter
be held as security for Tenant’s performance of all of Tenant’s covenants and
obligations under this Lease.  Tenant
shall deliver the original Letter of Credit to Hines, 101 California
Street, Suite 1000, San Francisco, California 94111, Attn:  Lisa Burke Lewis, and shall provide a copy
thereof to Morrison & Foerster LLP, 425 Market Street, 32nd
Floor, San Francisco, California 94105, Attn: Stephan C. Wagner.  For the purposes herein, the “LC Face Amount” shall
mean the aggregate total of (v) the amount set forth in the Basic Lease
Information, plus (w) the aggregate amount of all Supplemental Credits (as
defined below), if any, plus (x) the aggregate amount of all First
Opportunity Credits (as defined below), if any, plus (y) the aggregate
amount of the Heartport Lease Termination Credit (as defined in
Section 7.34(a) below), if any, plus (z) the aggregate amount of the
Heartport Expansion Option Credit (as defined in Section 7.34(b)
below).  Within five (5) business
days after Landlord’s receipt and written approval of the original Letter Credit
together with Tenant’s written wiring instructions for return of the Cash
Equivalent and written notification (which notification must be given to all of
the parties specified above in this Section 5.14(a)), Landlord shall
return to Tenant the Cash Equivalent; provided that, if Landlord fails to so
return the Cash Equivalent to Tenant then such Cash Equivalent shall accrue
interest at a rate equal to ten (10%) annually for each day that Landlord
fails to so return such Cash Equivalent and Tenant may off–set the amount
of such Cash Equivalent plus any applicable interest against the Gross Rent
coming due from and after the second month of the initial Term.  Notwithstanding the foregoing, neither the
Letter of Credit nor any Letter of Credit Proceeds (as defined below) shall be
deemed an advance rent deposit or an advance payment of any other kind, or a
measure of Landlord’s damages upon Tenant’s default.  The Letter of Credit shall be maintained in effect from the
Effective Date through the date that is forty-five (45) days after the
Expiration Date (the “LC Termination Date”).  On the LC Termination Date, Landlord
shall return to Tenant the Letter of Credit and any Letter of Credit Proceeds
then held by Landlord (other than those Letter of Credit Proceeds Landlord is
entitled to retain under the terms of this Section 5.14(a)); provided,
however, that in no event shall any such return be construed as an admission by
Landlord that Tenant has performed all of its obligations hereunder.  Landlord shall not be required to segregate
the Letter of Credit Proceeds from its other funds and no interest shall accrue
or be payable to Tenant with respect thereto. 
Landlord may (but shall not be required to) draw upon the Letter of
Credit and use the proceeds therefrom (the “Letter
of Credit Proceeds”) or any portion thereof (i) to cure
any default under this Lease and to compensate Landlord for any loss or damage
Landlord incurs as a result of such default, (ii) to repair damage to the
Leased Premises caused by Tenant, (iii) to clean the Leased Premises upon
termination of this Lease, and (iv) to reimburse Landlord for the payment
of any amount which Landlord may spend or be required to spend by reason of
Tenant’s default, it being understood that any use of the Letter of Credit
Proceeds shall not constitute a bar or defense to any of Landlord’s remedies
set forth in Section 7.08(b) below. 
In such event and upon written notice from Landlord to Tenant specifying
the amount of the Letter of Credit Proceeds so utilized by Landlord and the
particular purpose for which such amount was applied, Tenant shall immediately
deliver to Landlord an amendment to the Letter of Credit or a replacement
Letter of Credit in an amount equal to the full LC Face Amount.  Tenant’s failure to deliver such replacement
Letter of Credit to Landlord within ten (10) business days of Landlord’s
notice shall constitute an Event of Default hereunder.  In the event Landlord transfers its interest
in this Lease, Landlord shall transfer the Letter of Credit and any Letter of
Credit Proceeds then held by Landlord to Landlord’s successor in interest and
Landlord or the transferee shall provide written notice of such transfer to
Tenant and the Bank, and thereafter Landlord shall have no further liability to
Tenant with respect to such Letter of Credit or Letter of Credit Proceeds.

             (b)        Tenant
shall have the right to make a one time request for Landlord’s consent, which
consent shall not be withheld except as specifically provided below, to a one
time reduction of the then current LC Face Amount by the amount of
Five Hundred Sixty–Seven Thousand One Hundred Sixty And 50/100ths
Dollars ($567,160.50), which request may be submitted at any time after the
July 1, 2003, but which reduction shall not take place before the second
anniversary of the Term Commencement Date. 
Notwithstanding the
foregoing, Landlord may withhold its consent to such reduction only if
(i) (x) an Event of Default is occurring under this Lease, or
(y) there is then occurring any event which with the giving of notice or
the passage of time, or both, would constitute an Event of Default hereunder,
either at the time of Tenant’s submission of such request for reduction of the
LC Face Amount or the time that such reduction is to take place (provided
that, in the case of clause (y) above, such event shall not act to void
Tenant’s right to request Landlord’s consent to such one time reduction of the
then current LC Face Amount unless such event continues to occur after
Landlord has provided Tenant with five (5) days written notice of its
existence), or (ii) Tenant’s demonstrated Net Cash Position (as defined
below) at the time of such request is less than Sixty–Five Million
Dollars ($65,000,000.00) as shown by evidence delivered by Tenant to Landlord
on or promptly after the date of Tenant’s delivery of such request for
consent.  For the purposes of this
Lease, Tenant’s “Net Cash Position” shall
mean (x) the aggregate amount of the following items:  (1) cash on hand; (2) dollar
demand deposits maintained in the United States with any commercial bank and
dollar time deposits maintained in the United States with, or certificates of
deposit having a maturity of one year or less issued by, any commercial bank or
other financial institution acceptable to the Landlord; (3) direct
obligations of, or unconditionally guaranteed by, the United States and having
a maturity of one year or less; and (4) readily marketable commercial
paper having a maturity of one year or less, issued by any corporation
organized and existing under the laws of the United States or any state thereof
or the District of Columbia and rated by Standard & Poor’s or Moody’s
(or, if neither such organization shall rate such commercial paper at any time,
rated by any nationally recognized rating organization in the United States)
with the highest rating assigned by such organization, less (y) the
aggregate amount of Tenant’s then known and reasonably anticipated liabilities
which will either become due or be reasonably anticipated to become due during
the twelve (12) month period immediately following the date of Tenant’s request
for reduction of the LC Face Amount, including, without limitation the
aggregate amount of all principal and interest payments due under any loan
obligations of Tenant during such twelve (12) month period.

             (c)         As used
herein, Letter of Credit shall mean an unconditional, standby irrevocable
letter of credit (herein referred to as the “Letter
of Credit”) issued by Wells Fargo Bank, N.A. or the
San Francisco office of a major national bank insured by the Federal
Deposit Insurance Corporation, with assets of not less than Fifty Billion
Dollars ($50,000,000,000.00) and otherwise satisfactory to Landlord
(collectively, the “Bank”),
naming Landlord as beneficiary, in the amount of the LC Face Amount, and
otherwise in form and substance satisfactory to Landlord.  The Letter of Credit shall be for a minimum
one–year term and shall provide: 
(i) that Landlord may make partial and multiple draws thereunder,
up to the face amount thereof; (ii) that Landlord may draw upon the Letter
of Credit up to the full amount thereof and the Bank will pay to Landlord the
amount of such draw upon receipt by the Bank of a sight draft signed by
Landlord and accompanied by a written certification from Landlord to the Bank
stating either that:  (A) a default
has occurred and is continuing under this Lease and any applicable grace period
has expired or Landlord is otherwise entitled to draw on the Letter of Credit
under the terms of the Lease, or (B) Landlord has not received notice from
the Bank at least thirty (30) days prior to the then current expiry date
of the Letter of Credit that the Letter of Credit has been renewed by the Bank
for at least one (1) year beyond the relevant annual expiration date or,
in the case of the last year of the Term, forty-five (45) days after the
Expiration Date, together with a replacement Letter of Credit or a modification
to the existing Letter of Credit effectuating such renewal, and Tenant has not
otherwise furnished Landlord with a replacement Letter of Credit as hereinafter
provided; (iii) that the beneficial interest under the Letter of Credit
shall be freely transferable one or more times and, therefore, in the event of
the assignment or other transfer of the interest of Landlord (or any successor
Landlord) under this Lease, the Letter of Credit shall be freely transferable
by Landlord (or such successor), without recourse and without the payment of
any fee or consideration by Landlord, such assignee or transferee, or any
future assignees or transferees, to the assignee or transferee of such interest
and the Bank shall confirm the same to Landlord (or such successor) and such
assignee or transferee; and (iv) in the event that a fee or other
consideration is payable by Tenant in connection with the transfers referenced
in item (iii) above, the payment of such fee shall not be a condition
precedent to the effectiveness of any such transfer or any future draws upon
such Letter of Credit, and the Bank shall confirm the same to Landlord (or such
successor) and such assignee or transferee. 
In the event that the Bank shall fail to (y) notify Landlord that
the Letter of Credit will be renewed for at least one (1) year beyond the
then applicable expiration date (or, in the case of the last year of the Term,
forty-five (45) days after the Expiration Date), and (z) deliver to
Landlord a replacement Letter of Credit or a modification to the existing
Letter of Credit effectuating such renewal, and Tenant shall not have otherwise
delivered to Landlord, at least thirty (30) days prior to the relevant
annual expiration date, a replacement Letter of Credit in the amount required
hereunder and otherwise meeting the requirements set forth above, then Landlord
shall be entitled to draw on the Letter of Credit as provided above, and shall
hold the proceeds of such draw as Letter of Credit Proceeds pursuant to
Section 5.14(a) above until Tenant delivers to Landlord an acceptable
replacement Letter of Credit satisfying the requirements of this
Section 5.14.

             (d)        Notwithstanding
anything to the contrary contained in this Lease, if at any time after the date
of this Lease Landlord approves the construction by Tenant of any Alterations
comprising laboratories, testing rooms or other research facilities, then prior
to commencement of construction of such Alterations Tenant shall deliver to
Landlord an amendment to the Letter of Credit increasing the then-current
LC Face Amount by an amount equal to the product of the applicable “Multiplier” (as defined
below) multiplied by the number of square feet of such laboratories, testing
rooms or other research facilities to which Landlord consents and Tenant
constructs in accordance with Section 5.07 above (each such increase being
herein referred to as a “Supplemental Credit”
and all such credits being referred to herein collectively as the “Supplemental Credits”).  (The amount of each Supplemental Credit will
initially be determined in accordance with the Multiplier in effect on the date
that Tenant is first obligated to deliver an amendment to the Letter of Credit
in relation to such Supplemental Credit.) 
Notwithstanding the foregoing, upon each renewal of the Letter of Credit
in accordance with Section 5.14(c), the amount of any Supplemental
Credits, if any, then included within the LC Face Amount shall be recalculated
in accordance with the Multiplier which is in effect on the date of such
renewal.  For the purposes herein, the
term “Multiplier” shall mean
(i) with respect to months 1 through 34 of this Lease, the amount of Fifty
Dollars ($50.00); (ii) with respect to months 35 through 46 of this Lease,
the amount of Forty–Four Dollars ($44.00); (iii) with respect to
months 47 through 58 of this Lease, the amount of Thirty–Eight Dollars
($38.00); (iv) with respect to months 59 through 70 of this Lease, the
amount of Thirty–Two Dollars ($32.00); (v) with respect to months 71
through 82 of this Lease, the amount of Twenty–Six Dollars ($26.00); and
(vi) with respect to months 83 through the Term Expiration Date, the
amount of Twenty Dollars ($20.00).

             (e)         Notwithstanding
anything to the contrary contained in this Lease, if at any time after the date
of this Lease Tenant accepts any First Opportunity Space, pursuant to
Section 7.33 below, then within ten (10) business days after the exercise
of the Right of First Opportunity applicable to such First Opportunity Space,
Tenant shall deliver to Landlord an amendment to the Letter of Credit
increasing the then-current LC Face Amount by an amount equal to
nine (9) months Base Rent applicable to such First Opportunity Space or,
if the conditions precedent to Tenant’s reduction of the LC Face Amount,
in accordance with Section 5.14(b) above have been satisfied, six (6)
months Base Rent applicable to such First Opportunity Space (each increase
being herein referred to as a “First Opportunity Credit”
and all such credits being referred to herein collectively as the “First Opportunity Credits”).

             5.15     Tenant’s
Remedies.  Tenant shall look solely to Landlord’s
interest in the Building for recovery of any judgment from Landlord, provided,
that such interest in the Building shall be deemed to be an amount which is
equal to the lesser of (a) the interest in the Building of the then
current Landlord, or (b) the equity interest Landlord would have in the
Building if the Building were encumbered by third party debt in an amount equal
to eighty percent (80%) of the fair market value of the Building, provided that
in no event shall such liability extend to any sales or insurance proceeds
received by Landlord or the Landlord Parties in connection with the Project,
the Building or the Leased Premises. 
Landlord and Landlord Parties shall not be personally liable for any
such judgment.  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 to which
Section 5.12 applies or may apply.

             5.16     Rules and Regulations.  Tenant shall comply with the Rules and
Regulations for the Project attached as Exhibit B and such
amendments thereto as Landlord may adopt from time to time with prior notice to
Tenant; provided, however, that Landlord shall not enforce or amend such Rules
and Regulations with respect to tenants of the Project in a discriminatory
manner.  Landlord shall not be liable to
Tenant for or in connection with the failure of any other tenant of the Project
to comply with any rules and regulations applicable to such other tenant under
its lease.  Notwithstanding anything to
the contrary herein or in any Rules and Regulations, in the event of a conflict
between the terms of this Lease and the terms of any Rules and Regulations, now
existing or hereafter adopted, the terms of this Lease shall prevail.

             5.17     Hazardous Materials.

             (a)         Tenant shall not cause or permit any
Hazardous Material to be brought upon, kept or used in or about the Leased
Premises by Tenant or Tenant Parties without the prior written consent of
Landlord, save and except only for Permitted Hazardous Materials, which Tenant
may bring, store and use in reasonable quantities for their intended use in the
Leased Premises, but only in full compliance with all Hazardous Materials Laws
and otherwise in a safe and prudent manner. 
If Tenant breaches the obligations stated in the preceding sentence, or
if contamination of the Leased Premises by Hazardous Material occurs which is
caused by Tenant or Tenant Parties, or arises out of the activities of Tenant
or those of Tenant Parties (or those of its subtenants), then Tenant shall
indemnify, defend, protect and hold Landlord and Landlord Parties harmless from
and against any and all claims, judgments, damages, penalties, fines, costs,
expenses, liabilities or losses (including, without limitation, diminution in
value of the Leased Premises, damages for the loss or restriction on use of
rentable or useable space or of any amenity of the Leased Premises, damages
arising from any adverse impact on marketing of space, and sums paid in
settlement of claims, attorneys’ fees, consultants’ fees and experts’ fees)
(collectively, “Claims”) which arise during
or after the Term as a result of such contamination.  This indemnification of Landlord by Tenant includes, without
limitation, costs incurred in connection with any investigation of site
conditions or any clean-up, remedial, removal or restoration work required by
any federal, state or local governmental agency or political subdivision
because of Hazardous Material present in the soil or ground water on or under
the Leased Premises.  The foregoing
indemnity shall survive the expiration or earlier termination of this Lease.

             (b)        Tenant shall immediately notify Landlord
of (i) any inquiry, test, investigation or enforcement proceeding by any
governmental agency or authority against Tenant, Landlord or the Leased
Premises, Building or Project relating to any Hazardous Materials or under any
Hazardous Materials Laws, or (ii) the occurrence of any event or existence
of any condition that would cause a breach of any of the covenants set forth in
this Section 5.17.

             5.18     Surrender
of Premises On Termination.  On or before the ninetieth (90th) day
preceding the Term Expiration Date, Tenant shall notify Landlord in writing of
the precise date upon which Tenant plans to surrender the Leased Premises to
Landlord.  On expiration of the Term,
Tenant shall quit and surrender the Leased Premises to Landlord, broom clean,
in good order, condition and repair as required by Section 5.04, with all
of Tenant’s movable equipment, furniture, trade fixtures and other personal
property removed therefrom. 
Notwithstanding anything to the contrary herein, unless Tenant has
obtained Landlord’s agreement in writing that it can remove any Alteration, all
Alterations shall be surrendered with the Leased Premises in the same condition
as when received, reasonable wear and tear (but only to an extent consistent
with the Leased Premises remaining in good condition and repair) and casualty
damage excepted.  Any property of Tenant
not removed hereunder shall be deemed, at Landlord’s option, to be abandoned by
Tenant and Landlord may store such property in Tenant’s name at Tenant’s
expense, and/or dispose of the same in any manner permitted by law.  Notwithstanding the foregoing, if Landlord
desires to have the Leased Premises, or any part or parts thereof, restored to
a condition that existed prior to the making of any Alterations, Landlord shall
so notify Tenant in writing not later than sixty (60) days prior to the
regularly scheduled Term Expiration Date (or if this Lease is sooner
terminated, upon the date of such termination); and upon receipt of such
notice, Tenant shall, at Tenant’s sole cost and expense, so restore the Leased
Premises, or such part or parts thereof, before the regularly scheduled Term
Expiration Date (or if this Lease is sooner terminated, within ten (10)
days thereafter), provided that, with respect to any laboratories, testing
rooms or other research facilities constructed within the Leased Premises for
which Landlord requires removal, Tenant shall remove such laboratories, testing
rooms or other research facilities and shall restore the area of the Leased
Premises affected thereby to a drywall shell condition.  Tenant shall repair at its sole cost and
expense, all damage caused to the Leased Premises or the Project by removal of
Tenant’s movable equipment or furniture and such Alterations as Tenant shall be
allowed or required to remove from the Leased Premises by Landlord.  Without limiting the foregoing, Tenant
acknowledges and hereby agrees that Landlord’s rights to require removal of any
Alterations hereunder shall extend to the right to require removal of any
conduit, wiring, cabling or other telecommunications equipment located
installed anywhere within the Project by or on behalf of Tenant.  If the Leased Premises are not surrendered
as of the end of the Term in the manner and condition herein specified, Tenant
shall indemnify, defend, protect and hold Landlord and Landlord Parties
harmless from and against any and all Claims resulting from or caused by
Tenant’s delay or failure in so surrendering the Leased Premises, including,
without limitation, any Claims made by any succeeding tenant due to such delay
or failure.  Tenant acknowledges that
Landlord will be attempting to lease the Leased Premises with any such lease to
be effective upon expiration of the Term, and failure to surrender the Leased
Premises could cause Landlord to incur liability to such successor tenant for
which Tenant shall be responsible hereunder to the full extent thereof.

             5.19     Window
Coverings.  All window coverings shall be provided by
Tenant, at its sole cost and expense, and shall comply with Landlord’s standard
Building window covering.  Tenant shall
not place or maintain any window coverings, blinds or drapes on any exterior
window, other than those in compliance with Landlord’s standards, without
Landlord’s prior written approval which Landlord shall have the right to grant
or withhold in its absolute and sole discretion exercised in good faith.  Tenant acknowledges that breach of this
covenant will directly and adversely affect the exterior appearance of the
Project and the operation of the heating, ventilation or air conditioning
systems.

             5.20     Tenant’s
Right to Repair.

             (a)         Without
limiting Tenant’s other rights hereunder, if Landlord fails to perform any of
its obligations under this Lease and such failure (i) materially and
adversely affects Tenant’s use and occupancy of the Building for the operation
of Tenant’s business therein; and (ii) continues for more than ten (10)
business days after written notice from Tenant to Landlord of such failure (or
if the nature of the failure is such that it cannot be cured within said ten
(10) business day period, then if Landlord fails to commence to cure the
original failure within said ten (10) business day period or thereafter fails
to diligently prosecute the cure of such original failure to completion) then
Tenant may give Landlord a second notice of such original failure, reiterating
the request that Landlord cure such failure and stating that, if Landlord fails
to commence cure of such original failure within seven (7) days of the receipt
of such second notice from Tenant, that Tenant will elect to promptly
thereafter commence the cure of such failure by Landlord in the performance of
its obligations hereunder.  If Tenant
elects, at Tenant’s sole option, to deliver the second notice of failure and
election to cure, then following Tenant’s completion of the cure of such
failure by Landlord, Tenant shall have the right to demand reimbursement from
Landlord for all reasonable costs of performing such cure that are incurred by
Tenant.  If Tenant demands reimbursement
of such reasonable costs from Landlord in writing and Landlord fails to pay
such reasonable costs within ten (10) business days after Landlord’s receipt of
Tenant’s written demand therefore together with all invoices related to such
costs for which Tenant is seeking reimbursement, then at the election of Tenant
the matter shall be submitted to arbitration in accordance with
Section (b) below.  If Tenant
obtains an award of such reasonable costs in an arbitration performed in
accordance with Section (b) below and Landlord fails to pay the amount of
such reasonable costs so awarded to Tenant within ten (10) business days after
the date that such arbitration award is rendered, Tenant shall have the right
to offset the amount of such reasonable costs of cure of the Landlord default,
as so awarded in such arbitration, from the Base Rent payable under this Lease.

             (b)        Upon
written request of Tenant delivered to Landlord following Landlord’s failure or
refusal to pay any amounts demanded in accordance with Section 5.20(a)
above, Landlord and Tenant shall arbitrate: (i) whether Landlord had
actually failed in the performance of its obligations under this Lease;
(ii) If there was a failure by Landlord then whether Tenant had a right to
cure such failure by Landlord under this Section 5.20; and (iii) if
Tenant had such a right to cure, whether and to what extent the costs incurred
by Tenant to cure the failure by Landlord were reasonable in type and amount.  The arbitration shall be conducted and
determined in the City of Redwood City in accordance with the then–prevailing
commercial arbitration rules of the American Arbitration Association or its
successor for arbitration of commercial disputes (collectively, “AAA”), except as modified
by this Section 5.20(b).  The
decision rendered in any arbitration shall be binding upon the parties hereto
and may be entered in any court having jurisdiction over the Project.  Notwithstanding the AAA rules, any
arbitration under this Section 5.20(b) shall be held before a single
arbitrator who shall be experienced in the areas of law raised by the subject
matter of the dispute.  Lists of
prospective arbitrators shall include retired judges.  Notwithstanding the AAA rules, the parties shall use their best
good faith efforts to select an arbitrator within forty–five (45) days
after Tenant’s delivery of a written request to arbitrate and the parties shall
use their best good faith efforts to complete the arbitration within ninety
(90) days after Tenant’s delivery of a written request to arbitrate, provided
that (a) any party may strike from a list of prospective arbitrators any
individual who is regarded by that party as not appropriate for the dispute;
and (b) if the arbitrator appointment cannot be made from the initial list of
prospective arbitrators circulated by the AAA, a second list shall be
circulated and exhausted before the AAA is empowered to make the appointment.  The arbitrator shall render his/her decision
and award in writing with counterpart copies to each party.  The arbitrator shall have no power to modify
the provisions of this Lease.  Subject to the prevailing party’s right to
reimbursement pursuant to Section 7.13 below, each party shall pay the
fees and costs of its own counsel and the fees payable to the arbitrator shall
be borne equally by the parties.

ARTICLE
6

Condition and Operation of the
Building

             6.01     As-Is
Condition.  Tenant understands and agrees that the
Leased Premises, including, without limitation, the existing improvements
therein and the Building Systems servicing the Leased Premises, shall be leased
by Tenant in its existing As-Is condition without any improvements,
alterations, upgrades or enhancements by Landlord, provided that, Landlord shall
deliver the Leased Premises to Tenant with all currently existing Building
Systems in good working order for general office uses, and to the extent that
any portion of the Leased Premises is significantly damaged in the course of
Kana’s vacating of the Leased Premises then Landlord shall reasonably enforce
any provisions within Kana’s former lease of the Leased Premises with respect
to restoration and repair of the Leased Premises upon Kana’s vacating of the
same, including, without limitation, application of the proceeds of any
security deposit currently held by Landlord with respect to Kana’s lease
towards the costs of repair and restoration of the Leased Premises, all in
accordance with the terms and conditions set forth within the lease between
Landlord and Kana.  Landlord hereby
represents to Tenant that, to Landlord’s actual knowledge without duty of
investigation, there are no currently existing material defects in the Leased
Premises or the Building Systems as of the date of this Lease which have not
otherwise been previously disclosed to Tenant. 
Landlord shall have no other obligation of any kind or character,
express or implied, with respect to the condition of the Leased Premises or the
suitability thereof for Tenant’s purposes or with respect to alterations,
additions, improvements, upgrades or enhancements to the Leased Premises, the
Building Systems, the Building or the Project, and Tenant acknowledges that it
has neither received nor relied upon any representation or warranty made by or
on behalf of Landlord with respect to such matters.  By entry hereunder, Tenant accepts the Leased Premises as
suitable for Tenant’s intended use and as being in good and sanitary operating
order, condition and repair, As-Is and without representation or warranty by
Landlord as to the condition, use or occupancy which may be made thereof.

             6.02     Alteration of Project.  Landlord may, at any time and from time to
time:  (i) make structural
modifications and/or seismic modifications that are either required to be performed
by Landlord in accordance with the provisions of this Lease or otherwise
required by any Laws affecting the Building; (ii) make external
alterations to the Building; (iii) change, add to, eliminate or reduce the
extent, size, shape or configuration of any aspect of or improvement within the
Project (with the exception of the Building) or its operations (including,
without limitation, parcelizing the Project into one or more separate legal
lots and/or realigning boundary lot lines of any such legal lots now or
hereafter comprising the Project (collectively “Parcelization”));
and (iv) change the name, number or designation by which the Building or
the Project is commonly known.  None of
the foregoing acts shall be deemed an actual or constructive eviction of
Tenant, shall entitle Tenant to any reduction of Rent or shall result in any
liability of Landlord to Tenant, provided, that, in the event item (iii)
results from Landlord’s independent actions (as opposed to any requirement
imposed by any state, city, or county governmental or quasi-governmental
authority having jurisdiction over the Project or otherwise resulting from the
actions of any state, city or county governmental or quasi-governmental
authority), then Landlord shall reimburse Tenant for the reasonable costs
incurred by Tenant in changing addresses on stationery, business cards,
directories and other such items in a sum not to exceed Five Hundred Dollars
($500.00).  Landlord shall have the
exclusive rights to the airspace above and around, and the subsurface below,
the Leased Premises, the Building and other portions of the Project, including,
without limitation, the exclusive right to use all exterior walls, roofs and
other portions of the Building (including, without limitation, the right to install
any equipment, antennas, signs, notices or other promotional items).  Without limiting the foregoing, Tenant
agrees to fully cooperate with Landlord to allow Landlord to accomplish any
such Parcelization, as referenced in clause (ii) above, and acknowledges
that, the real property currently comprising the Project may be operated as an
integrated project irrespective of any such Parcelization.

ARTICLE
7

Casualty,
Eminent Domain and Miscellaneous Matters

             7.01     Landlord’s
Insurance.  Landlord shall maintain, or cause to be
maintained, a policy or policies of insurance with the premiums thereon fully
paid in advance, issued by and binding upon an insurance company of good
financial standing, insuring the Project against loss or damage by fire or
other insurable hazards (that may include earthquake loss if Landlord elects to
maintain such coverage) and contingencies for the full insurable value thereof,
exclusive of excavations and foundations; provided, however, that Landlord
shall not be obligated to insure any of Tenant’s furniture, equipment,
machinery, trade-fixtures, goods or supplies (“Tenant’s
Personal Property”), or any Alterations that Tenant may make
upon the Leased Premises.  If the annual
premiums charged Landlord for such casualty insurance exceed the standard
premium rates and such excess is in any way related to the Alterations or to
the nature of Tenant’s operations in the Leased Premises, including, without
limitation, a determination that such operations result in extra-hazardous or
higher than normal risk exposure, then Tenant shall, upon receipt of
appropriate premium invoices, reimburse Landlord for such increases in
premium.  Landlord shall maintain, or
cause to be maintained, a policy or policies of rental interruption insurance
with respect to the Building in an amount equal to not less than one (1)
year of Base Rent payable hereunder. 
All insurance proceeds payable under Landlord’s insurance carried
hereunder shall be payable solely to Landlord, and Tenant shall have no
interest therein.  Without limiting the
foregoing, if at any time during the Term of this Lease Landlord continues to
elect to maintain earthquake insurance coverage despite the fact that
(i) such earthquake insurance is not then available at commercially
reasonable rates, and (ii) the election to carry such earthquake insurance
is not consistent with prudent business practices of institutional owners of
commercial properties in central and southern San Mateo County of a comparable
size, construction, age and quality to that of the Project, then, except where
Landlord’s continued maintenance of such earthquake insurance is required by
any Mortgage Lender’s loan documents related to the Project, Tenant may object
to the continued maintenance of such policy of earthquake insurance on the
Building by Landlord, in which event so long as Landlord continues to maintain
such policy of earthquake insurance while the conditions referenced in
items (i) and (ii) continue to exist, the cost thereof may only be
included within Building Operating Cost to the extent of the cost of such
earthquake insurance immediately prior to any rate increases which resulted in
the existence of the conditions identified as items (i) and (ii) above.

             7.02     Liability
Insurance.  Landlord (with respect to the Project) and
Tenant (with respect to the Leased Premises and Project) shall each maintain or
cause to be maintained a policy or policies of commercial general liability
insurance with the premiums thereon fully paid in advance, issued by and
binding upon an insurance company of good financial standing, such insurance to
afford minimum protection of not less than Five Million Dollars ($5,000,000.00)
combined single limit for bodily injury and property damage in any one
occurrence.  The coverages required to
be carried shall be extended to include, but not to be limited to, blanket
contractual liability, personal injury liability (libel, slander, false arrest
and wrongful eviction), and broad form property damage liability.  Tenant’s contractual liability insurance
shall apply, without limitation, to all of Tenant’s indemnity obligations under
this Lease.  The certificate evidencing
Tenant’s insurance coverage required hereunder shall state that the insurance
includes the liability assumed by Tenant under this Lease and that Tenant’s
insurance is primary with any other insurance available to Landlord or any
other named insured being excess.  Upon
request of Tenant, Landlord shall provide Tenant reasonable evidence that the
insurance required to be maintained hereunder by Landlord is in full force and
effect.

             7.03     Tenant’s Casualty
Insurance and Additional Tenant Insurance Requirements.

             (a)         Tenant shall provide insurance coverage
during the Term against loss or damage by fire and such other risks as are from
time to time included in an Insurance Services Offices (ISO) “Causes of
Loss – Special Form” policy (including, without limitation,
sprinkler leakage and water damage), insuring the full insurable value of any
Alterations, Tenant’s trade fixtures, furnishings, equipment, and all other
items of personal property of Tenant, insuring the full replacement cost
thereof.

             (b)        All policies required to be carried by
Tenant under this Article 7 shall be written with financially responsible
companies with a Best & Company rating of “B+” or better, and all
evidence of insurance provided to Landlord shall contain an endorsement showing
that Landlord and Mortgage Lender are included as an additional insured and an
endorsement whereby the insurer agrees not to cancel or alter the policy
without at least thirty (30) days’ prior written notice to Landlord and
all named and additional insureds.  Any
deductible or self-insurance provisions under any insurance policies maintained
by Tenant shall be subject to Landlord’s prior written approval which shall not
be unreasonably withheld.

             (c)         Prior to the Term Commencement Date and
thereafter, from time to time, promptly upon request by Landlord, Tenant shall
furnish Landlord and any additional insureds with copies of policies or
certificates of insurance, evidencing Tenant’s maintenance and renewal of the
required coverages.  If Tenant fails to
provide such evidence of insurance required hereunder, Landlord shall be
authorized (but not required) to procure such coverage in the amounts stated
with all costs thereof to be charged to Tenant and paid upon written invoice
therefor as Additional Rent together with an administrative fee equal to twenty
percent (20%) of such costs.

             7.04     Indemnity
and Exoneration.

             (a)         Landlord shall not be liable to Tenant
(i) for any loss, damage or injury to person or property caused by theft,
fire, vandalism, assault, battery, act of God, acts of the public enemy, acts
of terrorists or criminals, riot, strike, insurrection, war, court order, requisition
or order of governmental body or authority, whether or not the negligence of
Landlord was a partial cause of such loss, damage or injury, or (ii) that
occur by reason of the negligence or willful misconduct of Tenant or Tenant
Parties, or (iii) for any damage or inconvenience which may arise through
repair of any part of the Project, alteration to any part of the Project
permitted hereunder, or failure to make any such repair except as expressly
otherwise provided in Sections 7.06 and 7.07.  Without limiting the foregoing and notwithstanding anything to
the contrary herein, Tenant acknowledges that no security services are being
provided to the Leased Premises, and to the extent any security service is
being provided to the Project by Landlord, such security service shall be
provided by unarmed personnel and shall not include alarm systems for a special
surveillance of the Leased Premises or the Project, and Tenant agrees, that
Landlord shall not be liable to Tenant or any third party for any breach of security
or any losses due to theft, burglary, battery or for damage done or injury
inflicted by persons (other than the employees of Landlord) in or on the
Project.

             (b)        Tenant shall indemnify, defend, protect
and hold Landlord and Landlord Parties harmless from and against any and all
Claims arising out of or related to claims of injury to or death of persons,
damage to property occurring or resulting directly or indirectly from the use
or occupancy of the Leased Premises or activities of Tenant or its employees in
or about the Leased Premises or Project; provided, however, that the foregoing
indemnity shall not be applicable to claims arising by reason of the gross
negligence or willful misconduct of Landlord, unless covered by insurance
required to be carried by Tenant under the terms of this Lease.

             (c)         Tenant shall indemnify, defend and
protect Landlord and hold and save Landlord harmless of and from any and all
loss, claims, proceedings, cost, damage, injury, causes of action, liabilities
or expense or other Claims arising out of or in any way related to work or
labor performed, materials or supplies furnished to or at the request of Tenant
or in connection with performance of any work done for the account of Tenant in
the Leased Premises or the Project.

             7.05     Waiver
of Subrogation Rights.  Anything in this Lease to the contrary
notwithstanding, Landlord and Tenant each waive all rights of recovery, claim,
action or cause of action, against the other, Tenant Parties or Landlord
Parties, as applicable, for any loss or damage that may occur to the Leased
Premises, or any improvements thereto, or the Project or any personal property
of such party therein, by reason of fire, the elements, or any other cause that
could be insured against under the terms of an ISO “Causes of
Loss – Special Form” insurance policy or other casualty insurance
coverages which are required to be obtained pursuant to this Lease, regardless
of cause or origin, including negligence of the other party, Landlord Parties
or Tenant Parties, as applicable; and each party covenants that no insurer
shall hold any right of subrogation against such other party.  Tenant shall advise its insurers of the
foregoing and such waiver shall be a part of each policy maintained by Tenant
that applies to the Leased Premises, any part of the Project or Tenant’s use
and occupancy of any part thereof.

             7.06     Condemnation.

             (a)         If the Leased Premises or any portion
of the Project shall be taken or condemned for any public purpose to such an
extent as to render the Leased Premises untenantable as reasonably determined
by Landlord, this Lease shall, at the option of either party, forthwith cease
and terminate as of the date of taking. 
All proceeds from any taking or condemnation of the Leased Premises
shall belong to and be paid to Landlord subject to the rights of any Mortgage
Lender; provided, however, that Landlord shall cooperate with Tenant, at
Tenant’s sole cost and expense, if Tenant seeks to recover proceeds, damages or
awards paid to compensate for damage to or taking of Tenant’s Personal
Property.

             (b)        If a temporary taking of all or a
portion of the Leased Premises occurs, there shall be no abatement of Rent and
Tenant shall remain fully obligated for performance of all of the covenants and
obligations on its part to be performed pursuant to the terms of this
Lease.  All proceeds awarded or paid
with respect thereto shall belong to Tenant.

             7.07     Damage and Destruction.  If a fire or other casualty in the Leased
Premises occurs, Tenant shall immediately give notice thereof to Landlord.  In the event of a fire or other casualty in
any portion of the Building, the following provisions shall then apply:

             (a)         If the
damage is limited solely to the Leased Premises and the Leased Premises can, in
the reasonable opinion of Landlord, be made tenantable with all damage repaired
within twelve (12) months from the date of damage or destruction, then Landlord
shall diligently rebuild the same.  If
Landlord rebuilds the Leased Premises, Tenant shall repair and restore any Alterations
or, at Landlord’s election, Landlord may repair and rebuild such Alterations,
at Tenant’s sole cost and expense.

             (b)        If Section 7.07(a) does not apply,
Landlord shall notify Tenant within sixty (60) days after the date of such
damage and destruction of Landlord’s reasonable estimate of the time required
for restoration of the Leased Premises and/or the Building, as applicable (“Casualty Notice”), and
thereafter Landlord may terminate this Lease within thirty (30) days after
the date of such Casualty Notice. 
Notwithstanding the foregoing, if the Leased Premises can not, in the
reasonable opinion of Landlord, be made tenantable with all damage to be
repaired by Landlord completed within eighteen (18) months from the date of
such Casualty Notice, then Tenant may terminate this Lease within
thirty (30) days after the date of Tenant’s receipt of such Casualty
Notice.

             (c)         During any period when Tenant’s use of
the Leased Premises is significantly affected by damage or destruction, Gross
Rent shall abate proportionately until such time as the Leased Premises are
made tenantable as reasonably determined by Landlord, and no portion of the
Rent so abated shall be subject to subsequent recapture; provided, however,
that there shall be no such abatement except to the extent that the amount
thereof is compensated for and recoverable from the proceeds of rental
abatement or business interruption insurance maintained or required to be
maintained by Landlord with respect to this Lease, the Leased Premises or the Project.

             (d)        The
proceeds from any insurance paid by reason of damage to or destruction of the
Building or any part thereof, or any other element, component or property
insured by Landlord shall belong to and be paid to Landlord subject to the
rights of any mortgagee of Landlord’s interest in the Project or the
beneficiary of any deed of trust that constitutes an encumbrance thereon.  If this Lease is terminated by either party
as a consequence of a casualty in accordance with any of the provisions of this
Section 7.07(d), all proceeds of insurance required to be maintained
either by Landlord or Tenant shall be paid to Landlord subject to the rights of
any mortgagee of Landlord’s interest in the Project or the beneficiary of any
deed of trust that constitutes an encumbrance thereon; provided, however, that
Tenant shall be paid all proceeds of insurance payable in connection with
Tenant’s trade fixtures, furnishings, equipment and all other items of personal
property of Tenant.

             (e)         If the Leased Premises, or any part
thereof, or any portion of the Building is damaged or destroyed during the last
twelve (12) months of the Term, or any extension thereof, and the damage
can not, in the reasonable opinion of Landlord, be repaired within six (6)
months from the date of damage or destruction, then either Landlord or Tenant
may terminate this Lease by giving written notice thereof to the other party
within thirty (30) days after the date of the casualty, in which case this
Lease shall terminate as of the date of the casualty.

             7.08     Default By Tenant.

             (a)         Events
of Default.  The occurrence of any
of the following shall constitute an event of default (“Event of Default”) on the
part of Tenant:

                           (i)          Nonpayment
of Rent.  Failure to pay any
installment of Gross Rent or items of Additional Rent or any other amount to be
paid by Tenant hereunder, upon the date when payment is due, such failure
continuing for a period of five (5) business days after written notice of
such failure;

                           (ii)         Chronic
Delinquency.  Chronic delinquency by
Tenant in the payment of Gross Rent or items of Additional Rent or any other
amount to be paid by Tenant hereunder. 
“Chronic delinquency” shall
mean failure by Tenant to pay Gross Rent or items of Additional Rent or any
other amount to be paid by Tenant hereunder within three (3) business
days after written notice thereof for any three (3) months (consecutive or
nonconsecutive) during any period of twelve (12) months.  In the event of a Chronic delinquency, in
addition to Landlord’s other remedies for an Event of Default provided
hereunder, at Landlord’s option, Landlord shall have the right to require that
Gross Rent be paid by Tenant quarterly, in advance;

                           (iii)        Other Obligations.  Failure to perform any obligation, agreement
or covenant under this Lease other than those matters specified in
Sections 7.08(a)(i) and 7.08(a)(ii), such failure continuing for
fifteen (15) business days after written notice of such failure (or with
respect to non-monetary obligations only, such longer period as is reasonably
necessary to remedy such default, provided that Tenant shall continuously and
diligently pursue such remedy at all times until such default is cured);

                           (iv)       General Assignment.  A general assignment by Tenant for the
benefit of creditors;

                           (v)        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.  If 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;

                           (vi)       Receivership.  The employment of a receiver to take
possession of substantially all of Tenant’s assets or the Leased Premises, if
such receivership remains undissolved for a period of twenty (20) business
days after creation thereof;

                           (vii)      Attachment.  The attachment, execution or other judicial
seizure of all or substantially all of Tenant’s assets or the Leased Premises,
if such attachment or other seizure remains undismissed or undischarged for a
period of twenty (20) business days after the levy thereof;

                           (viii)     Insolvency.  The admission by Tenant in writing of its
inability to pay its debts as they become due, the filing by Tenant of a
petition seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, the filing by Tenant of an answer admitting or failing
timely to contest a material allegation of a petition filed against Tenant in
any such proceeding or, if within sixty (60) days after the commencement
of any proceeding against Tenant seeking any reorganization, or arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, such proceeding shall not have
been dismissed.

             (b)        Remedies
Upon Default.

                           (i)          Termination.  If an Event of Default occurs, Landlord
shall have the right, with or without notice or demand, immediately (after
expiration of the applicable grace periods specified herein) to terminate this
Lease, and at any time thereafter recover possession of the Leased 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
Leased 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.

                           (ii)         Continuation After Default.  Even though Tenant has breached this Lease
and/or abandoned the Leased Premises, this Lease shall continue in effect for
so long as Landlord does not terminate Tenant’s right to possession under
Section 7.08(b)(i) hereof, and Landlord may enforce all of its rights and
remedies under this Lease, including, without limitation, the right to recover
Rent as it becomes due.  Landlord has
the remedy described in Section 1951.4 of the Civil Code of the State of
California or any successor code section (Landlord may continue the Lease in
effect after Tenant’s breach and abandonment and recover rent as it becomes
due, if Tenant has the right to sublet or assign, subject only to reasonable
limitations).  Acts of maintenance,
preservation or efforts to lease the Leased Premises or the appointment of
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
Upon Termination.  Should Landlord
terminate this Lease pursuant to the provisions of Section 7.08(b)(i)
hereof, Landlord shall have all the rights and remedies of a landlord provided
by Section 1951.2 of the Civil Code of the State of California, or
successor code section.  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:  (i) the worth at the time
of award of the unpaid Rent and other amounts which had been earned at the time
of termination; (ii) the worth at the time of award of the amount by which
the unpaid Rent which would have been earned after termination until the time
of award exceeds the amount of such Rent loss that the Tenant proves could have
been reasonably avoided; (iii) the worth at the time of award of the
amount by which the unpaid Rent for the balance of the Term after the time of
award exceeds the amount of such Rent loss that the Tenant proves could be
reasonably avoided; and (iv) any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant’s failure to
perform its obligations under this Lease or which, in the ordinary course of
things, would be likely to result therefrom. 
The “worth at the time of award”
of the amounts referred to in (i) and (ii) shall be computed with interest at
eighteen percent (18%) per annum or the highest lawful rate, whichever is the
lower.  The “worth
at the time of award” of the amount referred to in (iii)
shall be computed by discounting such amount at the “discount rate” of the
Federal Reserve Bank of San Francisco in effect as of time of award plus
one percent (1%) and, where rental value is a material issue, shall be based
upon competent appraisal evidence.

             (d)        Computation of Rent For Purposes of
Default.  For purposes of computing
unpaid Rent that would have accrued and become payable under this Lease
pursuant to the provisions of Section 7.08(c), unpaid Rent shall consist
of the sum of:

                           (i)          the total Base Rent for the balance of
the Term, plus

                           (ii)         a computation of the Building Operating
Cost for the balance of the Term, the assumed Building Operating Cost for the
calendar year of the default and each future calendar year in the Term to be
equal to the Building Operating Cost for the calendar year prior to the year in
which default occurs compounded at a per annum rate equal to the mean average
rate of inflation for the preceding five (5) calendar years as determined
by reference to the Consumer Price Index—all items for the
San Francisco-Oakland-San Jose Area, All Urban Consumers, published
by the Bureau of Labor Statistics of the United States Department of Labor
(Base Year 1982–84=100), or such successor index as may be established to
provide a measure of the current purchasing power of the dollar.

             (e)         Late
Charge.  In addition to its other
remedies, after written notice of its intention to invoke this paragraph
because of previous late payments by Tenant, Landlord shall have the right to
add to the amount of any payment required to be made by Tenant hereunder that
is not paid on or before the date which is five (5) business days after
written notice that the same is due, an amount equal to five percent (5%) of
the delinquency for each month or portion thereof that the delinquency remains
outstanding, 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. 
The provision for a late charge set forth in this Section 7.08(e),
and any collection of a late charge by Landlord, shall not be deemed a waiver
of any breach or Event of Default by Tenant under this Lease.  The late charge shall be due upon demand by
Landlord at any time after failure to pay any installment of Rent, and in the
case of Gross Rent, without waiting for expiration of the period specified in
Section 7.08(a)(i).

             (f)         Landlord’s Right To Perform.  In addition to and without limiting its
other remedies hereunder, Landlord shall have the right, but not the obligation
to perform such obligations for Tenant’s account, including, without
limitation, the right to perform any repair, maintenance or replacement
required to be performed by Tenant under Section 5.04 above, and the right
to pay any amounts due to the providers of any Utilities pursuant to
Section 5.02 above.  All costs
incurred by Landlord in performing any such obligations for the account of
Tenant shall be repaid by Tenant to Landlord upon demand, together with an
administration fee equal to fifteen percent (15%) of such costs.

             (g)        Remedies Cumulative.  All of the remedies permitted or available to
Landlord under this Lease, or at law or in equity, shall be cumulative and not
alternative and invocation of any such right or remedy shall not constitute a
waiver or election of remedies with respect to any other permitted or available
right or remedy.

             7.09     Option
to the Extend the Term At Fair Market Rent.

             (a)         Subject to the terms of this
Section 7.09, Tenant shall have two (2) options (the first such
option being referred to herein as the “First
Renewal Option”, the second such option being referred to
herein as the “Second Renewal Option”, and
both options collectively referred to herein as the “Renewal
Options”) to extend the Term of this Lease for a consecutive
period of five (5) years beyond the then applicable Term Expiration Date
(each such extension a “Renewal Term”).  The Renewal Options are personal to
Deltagen, Inc., as Tenant, and may only be exercised by Deltagen, Inc., as
Tenant, not by any sublessee or assignee, or by any other successor or assign
of Deltagen, Inc., as Tenant, provided, that, the foregoing shall not preclude
Deltagen, Inc. from exercising any such Renewal Options merely because a
sublessee or assignee of Deltagen, Inc. is then occupying all or any portion of
the Leased Premises.  The First Renewal
Option must be exercised, if at all, by written notice (“Election Notice”) from
Tenant to Landlord given not more than eighteen (18) months nor less than
twelve (12) months prior to the initial Term Expiration Date.  The Second Renewal Option must be exercised,
if at all, by an Election Notice from Tenant to Landlord given not more than
eighteen (18) months nor less than twelve (12) months prior to the Term
Expiration Date, as extended by the first Renewal Term.  Any such Election Notice given by Tenant to
Landlord shall be irrevocable.  The
Renewal Options and Tenant’s delivery of an Election Notice shall be effective
only if (i) no Event of Default is occurring under this Lease, nor
(ii) is any event then occurring which with the giving of notice or the
passage of time, or both, would constitute an Event of Default hereunder,
either at the time of Tenant’s delivery of the applicable Election Notice or
the time of commencement of the applicable Renewal Term, provided that, in the
case of clause (ii) above, such event shall not act to void the Renewal
Options and Tenant’s delivery of such Election Notice unless such event
continues to occur after Landlord has provided Tenant with five (5) days
written notice of its existence.  If
Tenant fails to exercise the First Renewal Option in a timely manner, as
provided for above, the Renewal Options shall be void.  If Tenant validly exercises the First
Renewal Option in a timely manner, as provided for above, but fails to exercise
the Second Renewal Option in a timely manner, as provided for above, the Second
Renewal Option shall be void.  Each
Renewal Term shall be upon the same terms and conditions as the initial Term,
except that the annual Base Rent during the applicable Renewal Term shall be
equal to the Fair Market Rent as of the commencement of the Renewal Term;
provided, however, that in no event shall the Base Rent during any Renewal Term
be less than the Base Rent payable hereunder immediately prior to the
commencement of such Renewal Term.

             (b)        Fair
Market Rent for each Renewal Term shall be determined by Landlord with written
notice given to Tenant prior to the commencement of the applicable Renewal
Term, subject to Tenant’s right of arbitration pursuant to the provisions of
Section 7.09(c) below.  Failure on
the part of Tenant to demand arbitration within thirty (30) days after
receipt of notice from Landlord of Landlord’s determination of Fair Market Rent
shall bind Tenant to the Fair Market Rent as determined by Landlord.  Should Tenant elect to arbitrate and should
the arbitration not have been concluded prior to the commencement of the
Renewal Term, Tenant shall pay Base Rent to Landlord during the Renewal Term,
including Base Rent adjusted to reflect Fair Market Rent as Landlord has so
determined.  If the amount of Fair
Market Rent as determined by arbitration is greater than or less than
Landlord’s determination, then any adjustment required to correct the amount
previously paid shall be made by payment by the appropriate party within
ten (10) days after such determination of Fair Market Rent.

             (c)         If
Tenant disputes the amount claimed by Landlord as Fair Market Rent, and such
dispute cannot be resolved by mutual agreement, the dispute shall be submitted
to arbitration.  The award rendered in
any such arbitration may be entered in any court having jurisdiction and shall
be final and binding between the parties. 
The arbitration shall be conducted and determined in the City of Redwood
City in accordance with the then-prevailing commercial arbitration rules of the
American Arbitration Association or its successor for arbitration of commercial
disputes except to the extent that the procedures mandated by said rules shall
be modified as follows:

                           (i)          Tenant
shall make demand for arbitration, if at all, in writing within
thirty (30) days after service of Landlord’s determination of Fair Market
Rent given under Section 7.09(b) above, specifying therein the name and
address of the person to act as the arbitrator on its behalf.  The arbitrator shall be qualified as a real
estate appraiser familiar with the Fair Market Rent of first-class commercial
office and R&D space in central and southern San Mateo County who
would qualify as an expert witness over objection to give testimony addressed
to the issue in a court of competent jurisdiction.  Failure on the part of Tenant to make a timely and proper demand
for such arbitration shall constitute a waiver of the right thereto.  Within ten (10) business days after the
service of Tenant’s demand for arbitration, Landlord shall have the right to
give notice in writing to Tenant of Landlord’s adjusted determination of Fair
Market Rent.  Within ten (10)
business days following Tenant’s receipt of such notice, if Tenant and Landlord
have not agreed upon Fair Market Rent, Tenant shall notify Landlord in writing
that Tenant desires to renew its demand for arbitration.  Failure on the part of Tenant to give such
notice shall constitute a waiver of the right to such arbitration, and Tenant
shall be deemed to have accepted Landlord’s adjusted determination of Fair
Market Rent.  Within ten (10)
business days after the receipt of a notice to renew Tenant’s demand, Landlord
shall give notice to Tenant, specifying the name and address of the person
designated by Landlord to act as arbitrator on its behalf who shall be
similarly qualified.  If Landlord fails
to notify Tenant of the appointment of its arbitrator, within or by the time
above specified, then the arbitrator appointed by Tenant shall be the
arbitrator to determine the issue.

                           (ii)         If two (2) arbitrators are chosen
pursuant to Subsection (i) above, the arbitrators so chosen shall meet
within ten (10) business days after the second arbitrator is appointed
and, if within ten (10) business days after such first meeting the two
arbitrators shall be unable to agree promptly upon a determination of Fair
Market Rent, they shall appoint a third arbitrator, who shall be a competent
and impartial person with qualifications similar to those required of the first
two arbitrators pursuant to Subsection (i) above.  If they are unable to agree upon such
appointment within five (5) business days after expiration of said
ten (10) day period, the third arbitrator shall be selected by the parties
themselves, if they can agree thereon, within a further period of ten (10)
business days.  If the parties do not so
agree, then either party, on behalf of both, may request appointment of such a
qualified person by the then Chief Judge of the United States District Court
having jurisdiction over the City of Redwood City, acting in his private
non-judicial capacity.  Request for
appointment shall be made in writing with a copy given to the other party.  Each party agrees that said Judge shall have
the power to make the appointment; provided, however, that if the Chief Judge
does not make a determination within ten (10) days of request by either
party for the appointment of a third arbitrator, appointment of such third
arbitrator shall be made in accordance with the selection procedure of the
commercial arbitration rules of the American Arbitration Association or its
successor for arbitration of commercial disputes.  The three (3) arbitrators shall decide the dispute, if it
has not previously been resolved, by following the procedure set forth in
Section (iii) below.

                           (iii)        Where
the issue cannot be resolved by agreement between the two arbitrators selected
by Landlord and Tenant or settlement between the parties during the course of
arbitration, the issue shall be resolved by the three arbitrators in accordance
with the following procedure.  The
arbitrators selected by each of the parties shall state in writing their
respective determinations of the Fair Market Rent, supported by the reasons
therefor with counterpart copies to each party.  The arbitrators shall arrange for a simultaneous exchange of such
proposed resolutions.  The role of the
third arbitrator shall be to select which of the two proposed resolutions most
closely approximates his determination of Fair Market Rent.  The third arbitrator shall have no right to
propose a middle ground or any modification of either of the two proposed
resolutions.  The resolution he chooses
as most closely approximating his determination shall constitute the decision
of the arbitrators and be final and binding upon the parties.

                           (iv)       If any arbitrator fails, refuses or is
unable to act, his successor shall be appointed by him, but in the case of the
third arbitrator, his successor shall be appointed in the same manner as
provided for appointment of the third arbitrator.  The arbitrators shall attempt to decide the issue within
ten (10) business days after the appointment of the third arbitrator.  Any decision in which the arbitrator
appointed by Landlord and the arbitrator appointed by Tenant concur shall be
binding and conclusive upon the parties. 
Each party shall pay the fees and costs of its own counsel.  The losing party shall pay the fees and
costs of the arbitrators and of the expert witnesses (if any) of the prevailing
party as well as those of its expert witnesses.  For purposes hereof, the losing party shall be that party whose
selected arbitrator’s statement of Fair Market Rent was not selected by the
third arbitrator.

                           (v)        The arbitrators shall have the right to
consult experts and competent authorities with factual information or evidence
pertaining to a determination of Fair Market Rent, but any such consultation
shall be made in the presence of both parties with full right on their part to
cross-examine.  The arbitrators shall
render their decision and award in writing with counterpart copies to each
party.  The arbitrators shall have no
power to modify the provisions of this Lease.

             7.10     No
Waiver.  Failure of Landlord or Tenant to declare any
default immediately upon occurrence thereof, or delay in taking any action in
connection therewith, shall not waive such default, but Landlord or Tenant, as
the case may be, shall have the right to declare any such default at any time
thereafter.  No waiver by Landlord of an
Event of Default, or any agreement, term, covenant or condition contained in
this Lease, shall be effective or binding on Landlord unless made in writing
and no such waiver shall be implied from any omission by Landlord to take
action with respect to such Event of Default or other such matter.  No express written waiver by Landlord of any
Event of Default, or other such matter, shall affect or cover any other Event
of Default, matter or period of time, other than the Event of Default, matter
and/or period of time specified in such express waiver.  One or more written waivers by Landlord of
any Event of Default, or other matter, shall not be deemed to be a waiver of
any subsequent Event of Default, or other matter, in the performance of the
same provision of this Lease.  Except as
expressly provided in this Lease, no waiver by Tenant of any agreement, term,
covenant or condition contained in this Lease, shall be effective or binding on
Tenant unless made in writing and no such waiver shall be implied from any
omission by Tenant to take action with respect to such matter.  No express written waiver by Tenant of any
matter, shall affect or cover any other matter or period of time, other than
the matter and/or period of time specified in such express waiver.  Except with respect to the provisions of
Sections 7.09 and 7.33, one or more written waivers by Tenant of any
matter shall not be deemed to be a waiver of any subsequent matter, in
Landlord’s performance of the same provision of this Lease.  Acceptance of Rent by Landlord hereunder, or
endorsement of any check, shall not, in and of itself, constitute a waiver of
any breach or Event of Default or of any agreement, term, covenant or condition
of this Lease, except as to the payment of Rent so accepted, regardless of
Landlord’s knowledge of any concurrent Event of Default or matter.  Landlord may, at its election, apply any
Rent received from Tenant to the oldest obligation outstanding from Tenant to
Landlord, any endorsement or other statement of Tenant to the contrary
notwithstanding.  No course of conduct
between Landlord and Tenant, and no acceptance of the keys to or possession of
the Leased Premises before the termination of the Term by Landlord or any
employee of Landlord shall constitute a waiver of any such breach or of any
term, covenant or condition of this Lease or operate as a surrender of this
Lease.  All of the remedies permitted or
available to Landlord under this Lease, or at law or in equity, shall be
cumulative and not alternative and invocation of any such right or remedy shall
not constitute a waiver or election of remedies with respect to any other
permitted or available right or remedy.

             7.11     Statutory
Waivers.  Tenant hereby waives the benefits of:  (i) Sections 1932 and 1933(4) of
the California Civil Code (pertaining to the termination of a hiring);
(ii) 1941 and 1942 of the California Civil Code (pertaining to the
obligations of a landlord to maintain premises and the rights of a tenant to
make certain repairs or terminate a lease); (iii) Section 1263.260 of
the California Code of Civil Procedure (pertaining to the removal of
improvements upon condemnation); and (iv) Section 1265.130 of the
California Code of Civil Procedure (pertaining to the termination of a lease
upon condemnation).

             7.12     Holding
Over.  If Tenant holds over after expiration or
termination of this Lease without the written consent of Landlord, Tenant shall
pay for each month of hold-over tenancy the greater of (i) one hundred
fifty percent (150%) of the Gross Rent that Tenant was obligated to pay for the
month immediately preceding the end of the Term, or (ii) one hundred fifty
percent (150%) of the market rental amount then applicable to the Leased
Premises, for each month or any part thereof of any such hold-over period
together with such other amounts as may become due hereunder.  No holding over by Tenant after the Term
shall operate to extend the Term.  If
Tenant holds over without consent, Tenant shall indemnify, defend, protect and
hold Landlord and Landlord Parties harmless from and against any and all
claims, judgments, damages, penalties, fines, costs, expenses, liabilities or
losses for damages by any other tenant or third person to whom Landlord may
have leased or offered to lease all or any part of the Leased Premises covered
hereby effective on or after the termination of this Lease, together with all
loss, cost, expense, damages and liabilities in connection with any such
reletting, including, without limitation, attorneys’ fees and Landlord’s lost
revenues.  Any holding over with the
consent of Landlord in writing shall thereafter constitute this Lease a lease
from month to month.

             7.13     Attorneys’ Fees.  Except as otherwise provided in
Section 7.09(c) above, if either party 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 the possession of the Leased Premises in the hands of
an attorney or collection agency, or files suit upon the same, or seeks a
judicial declaration of rights hereunder (including, without limitation, any
arbitration conducted in accordance with Section 5.20(b) above), the
prevailing party shall recover its reasonable attorneys’ fees, court or
arbitration costs and collection agency charges.  As used herein, “prevailing party”
shall mean the party who substantially prevails in the matter at issue,
including, without limitation, a party who dismisses an action for recovery
hereunder in exchange for payment of the sums allegedly due, performance of
covenants allegedly breached or consideration substantially equal to the relief
sought in the action.

             7.14     Amendments.  This Lease may not be altered, changed or
amended, except by an instrument in writing signed by both parties.

             7.15     Transfers
By Landlord.  Landlord shall have the right to transfer
and assign, in whole or in part, all of its rights and obligations hereunder
and in the Project.  Upon transfer by
Landlord of its interest in the Project, and upon the transferee’s assumption
of Landlord’s obligations hereunder, no liability or obligations shall
thereafter accrue against the transferring or assigning person as Landlord
hereunder with respect to obligations arising after the date of such transfer.

             7.16     Severability.  If any term or provision of this Lease, or
the application thereof to any person or circumstances, shall to any extent be
invalid or unenforceable, the remainder of this Lease, or the application of
such provision to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby, and each provision of
this Lease shall be valid and shall be enforceable to the extent permitted by
law.

             7.17     Notices.  All notices, demands, consents and approvals
that may or are required to be given by either party to the other hereunder
shall be in writing and shall be deemed to have been fully given by personal
delivery or when deposited in the United States mail, certified or registered,
postage prepaid, and addressed to the party to be notified at the address for
such party specified on the Basic Lease Information sheet, 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.  Personal delivery of notices to Tenant may
in all events be made by leaving a copy of the notice, addressed to Tenant, at
the Leased Premises.  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 or occupying the Leased 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 Leased Premises.

             7.18     No
Option.  Submission of this instrument for
examination or signature by Tenant does not constitute a reservation of or an
option for lease, and it is not effective as a lease or otherwise until
execution and delivery by both Landlord and Tenant.

             7.19     Integration
and Interpretation.  The terms of this Lease are intended by the
parties as a final expression of their agreement with respect to such terms as
are included in this Lease and may not be contradicted by evidence of any prior
or contemporaneous agreement, arrangement, understanding or negotiation
(whether oral or written).  The parties
further intend that this Lease constitutes the complete and exclusive statement
of its terms, and no extrinsic evidence whatsoever may be introduced in any
judicial proceeding involving this Lease. 
The language in all parts of this Lease shall in all cases be construed
as a whole and in accordance with its fair meaning and not restricted for or
against any party, regardless of which party may have drafted the provision in
question, it being agreed that this is a negotiated agreement.

             7.20     Quitclaim.  Upon expiration or earlier termination of
this Lease, Tenant shall, immediately upon request of Landlord, execute,
acknowledge and deliver to Landlord a recordable deed quit-claiming to Landlord
all interest of Tenant in the Leased Premises, the Project and this Lease.

             7.21     No
Easement For Light, Air and View.  This Lease conveys to Tenant no rights for
any light, air or view.  No diminution
of light, air or view, or any impairment of the visibility of the Leased
Premises from inside or outside the Building, by any structure or other object that
may hereafter be erected (whether or not by Landlord) shall entitle Tenant to
any reduction of Rent under this Lease, constitute an actual or constructive
eviction of Tenant, result in any liability of Landlord to Tenant, or in any
other way affect this Lease or Tenant’s obligations hereunder.

             7.22     No
Merger.  The voluntary or other surrender or
termination of this Lease by Tenant, or a mutual cancellation thereof shall not
work a merger, but, at Landlord’s sole option, shall either terminate all existing
subleases or subtenancies or shall operate as an assignment to Landlord of all
such subleases or subtenancies.

             7.23     Memorandum
of Lease.  Tenant shall, upon request of Landlord,
execute, acknowledge and deliver a short form memorandum of this Lease (and any
amendment hereto or consolidation hereof), in form suitable for recording.  In no event shall this Lease or any
memorandum thereof be recorded without the prior written consent of Landlord,
and any attempt to do so shall constitute a default by Tenant.

             7.24     Survival.  All of Tenant’s covenants and obligations
contained in this Lease shall survive the expiration or earlier termination of
this Lease.  With the exception of any
applicable notice and cure provisions expressly set forth in Section 7.08(a)
above, no provision of this Lease providing for termination in certain events
shall be construed as a limitation or restriction of Landlord’s rights and
remedies at law or in equity available upon a breach by Tenant of this Lease.

             7.25     Financial
Statements.  From time to time (but not more frequently
than once per calendar quarter) Tenant shall, within fifteen (15) days of
Landlord’s written request, furnish Landlord with Tenant’s most recent
quarterly financial statements, certified as accurate by Tenant or, if
available, audited financial statements audited by an independent certified
public accountant (together with copies of the auditor’s statement), together
with a statement reflecting Tenant’s estimated “burn–rate” for the
remainder of the then current calendar year and such additional information and
detail as Landlord may reasonably request. 
In addition, Tenant shall deliver to Landlord annual audited financial
statements during each calendar year of the Term audited by an independent
certified public accountant (together with copies of the auditor’s statement).

             7.26     No
Joint Venture.  This Lease shall not be construed to create
a partnership, joint venture or similar relationship or arrangement between
Landlord and Tenant hereunder.

             7.27     Successors
and Assigns.  This Lease shall be binding upon and inure
to the benefit of Landlord, its successors and assigns (subject to the
provisions hereof, including, without limitation, Section 5.15); and shall
be binding upon and inure to the benefit of Tenant, its successors, and to the
extent assignment may be approved by Landlord hereunder, Tenant’s assigns.

             7.28     Applicable
Law.  All rights and remedies of Landlord and
Tenant under this Lease shall be construed and enforced according to the laws
of the State of California.  Any actions
or proceedings brought under this Lease, or with respect to any matter arising
under or out of this Lease, shall be brought and tried only in courts located
in the County of San Mateo, California (excepting appellate courts).

             7.29     Time of
the Essence.  Time is of the essence of each and every
covenant herein contained.

             7.30     Interpretation.  Except as specifically provided otherwise in
this Lease, Landlord may act in its sole and absolute discretion when required
to act hereunder.  The term, “including”
shall mean “including, without limitation.” 
All indemnities contained herein shall survive termination of this Lease
with respect to any act, condition or event that is the subject matter of such
indemnity and that occurs prior to the Term Expiration Date.  Notwithstanding anything herein to the
contrary, all provisions of this Lease which require the payment of money or
the delivery of property after the Term Expiration Date shall survive
termination of the Lease.

             7.31     Parking.  Unless an Event of Default has occurred and
shall be continuing hereunder, Tenant shall be entitled to the non–preferential
and non–exclusive use of 3.3 spaces for each 1,000 square feet of the
Leased Premises, as the same may be expanded or reduced from time to time, in
the Common Areas, for which right Tenant shall pay the monthly fee, tax or
assessment per space, if any, established or otherwise imposed by any
governmental authority having jurisdiction over the Project in connection with
the parking privileges provided to Tenant pursuant to this Lease.  Said monthly fees, if any, shall be paid in
the same manner as Additional Rent hereunder, regardless of whether or not
Tenant uses said spaces.  Landlord may
assign any unreserved and unassigned parking spaces and/or make all or a
portion of such spaces reserved, if it determines that it is necessary for
orderly and efficient parking.  Landlord
shall have the right, at any time, to relocate Tenant’s parking to other areas
within the Project and to provide parking spaces to Tenant in surface parking
lots, parking structures or valet parking areas in the general vicinity of the
Building now or hereafter designated by Landlord as the “Project’s Parking Areas.”  Notwithstanding anything to the contrary herein,
during the initial Term, Tenant’s right to use the parking spaces provided
herein shall be free of charge.

             7.32     Brokers.  Tenant and Landlord each represent and
warrant to the other that it has had no dealing with any broker or agent other
than the Broker set forth on the Basic Lease Information.  Tenant and Landlord each indemnify, defend
and hold the other party harmless from and against any and all liabilities for
commissions or other compensation or charges claimed by any other broker or
agent based on dealings with the indemnifying party with respect to this
Lease.  The foregoing indemnity shall
survive termination or earlier expiration of this Lease.

             7.33     Right
of First Opportunity.

             (a)          Subject to the terms of
Subsection 7.33(b) below, Tenant is granted the conditionally recurring
right to add to the Leased Premises additional space located within the
building commonly known as 720 Bay Road (“Building
Three”), as and if such space becomes available (the term “available” is used herein
meaning that (i) an Existing Lease (as defined in Subsection 7.33(b)
below) has terminated, either by default, mutual agreement, or expiration of
the term of such lease and of any renewal options, rights of first refusal or
options or agreements of expansion related thereto, and (ii) that the
space which was the subject of such Existing Lease has not been relet to such
tenant, or to a subtenant or assignee of such tenant, immediately thereafter,
either through the renewal of the previous lease with respect to such space or
the exercise of an expansion right with respect to such space by another tenant
of the Project), each such space being referred to herein individual as a “First Opportunity Space”
and each such conditionally recurring option being referred to herein as a “Right of First Opportunity”.  Each Right of First Opportunity is personal
to Deltagen, Inc., as Tenant, and may not be exercised by any sublessee or
assignee, or by any other successor or assign of Tenant.  Each Right of First Opportunity shall be
effective only if (i) no Event of Default is occurring under this Lease,
nor (ii) is any event then occurring which with the giving of notice or
the passage of time, or both, would constitute an Event of Default hereunder,
either at the time of exercise of the applicable Right of First Opportunity or
on the date when such First Opportunity Space is added to the Leased Premises
as provided in Subsection 7.33(c) below, provided that, in the case of
clause (ii) above, such event shall not act to void the effectiveness of a
Right of First Opportunity unless such event continues to occur after Landlord
has provided Tenant with five (5) days written notice of its existence.

             (b)        Each
Right of First Opportunity shall be subject and subordinate to: (i) any
lease existing as of the date of this Lease (“Existing
Lease”) with respect to any increment of any space within
Building Three; (ii) any renewal or extension of the term of any Existing
Lease, which extensions or renewals Landlord may enter into without regard to
the Right of First Opportunity granted in this Section 7.33; and
(iii) any expansion option, right of first refusal or right of first
opportunity granted by Landlord to any third party prior to the date of this
Lease.

             (c)         Not
less than six (6) months prior to the date of expiration of all third party
leases or rights in any First Opportunity Space (or such shorter period where
Landlord has less notice in fact of an earlier termination), Landlord shall
notify Tenant in writing of such date. 
Each Right of First Opportunity must be exercised by Tenant, if at all,
by written notice to Landlord delivered within fifteen (15) days after the date
of Landlord’s written notice to Tenant that a First Opportunity Space will
become available.  Any such notice with
respect to any First Opportunity Space given by Tenant to Landlord shall be
irrevocable.  Upon timely exercise of
any such Right of First Opportunity, the applicable First Opportunity Space
shall be included under this Lease and added to the Leased Premises effective
immediately upon availability of such space, and such First Opportunity Space
shall then become part of the Leased Premises for the remainder of the Term,
and any validly exercised renewals thereof.

             (d)        The Base Rent applicable to each First
Opportunity Space added to the Leased Premises shall be the Fair Market Rent of
such First Opportunity Space as of the date such First Opportunity Space
becomes part of the Leased Premises.  At
the time Landlord offers the applicable First Opportunity Space to Tenant,
Landlord shall notify Tenant of Landlord’s determination of the Fair Market
Rent for such First Opportunity Space. 
Within fifteen (15) days after receipt of such notice from Landlord,
Tenant shall have the right to: (i) elect to accept Landlord’s statement
of the Fair Market Rent as the Base Rent for the First Opportunity Space; or
(ii) elect to require that Fair Market Rent be determined by arbitration
pursuant to Section 7.09(c) above. 
Failure by Tenant to elect arbitration of Fair Market Rent by written
notice delivered to Landlord within such fifteen (15) day period shall
constitute an election by Tenant to accept Landlord’s statement of Fair Market
Rent.

             (e)         In the event that Tenant fails to
exercise any Right of First Opportunity with respect to any First Opportunity
Space that contains greater than nine thousand nine hundred ninety–nine
(9,999) square feet of space in a timely manner as provided herein, such
Right of First Opportunity shall lapse and all future Rights of First
Opportunity shall be null, void and of no force or affect, and Landlord shall
thereafter have the right to lease any First Opportunity Space, including,
without limitation, the First Opportunity Space for which tenant’s Right of
First opportunity has so lapsed, to any party or parties on terms deemed
acceptable to Landlord in its sole and absolute discretion without any further
obligation to Tenant under this Section 7.33.  In the event that Tenant validly exercises any Right of First
Opportunity pursuant to the terms of this Section 7.33, Tenant shall take
any First Opportunity Space added to the Leased Premises in an “As-Is”
condition, Tenant acknowledging and agreeing that Landlord shall have no
obligation to improve, remodel or otherwise alter such First Opportunity Space;
provided, however, that Landlord shall deliver such First Opportunity Space in
a “broom clean” condition.

             (f)         From and after the commencement date
specified in Subsection 7.33(c) above with respect to any First
Opportunity Space as to which the Right of First Opportunity has been validly
exercised by Tenant, all terms and provisions of this Lease shall apply to such
First Opportunity Space, except that all references to the Building herein,
shall thereafter include Tenant’s respective portion of Building Three and
Tenant’s obligation to pay Tenant’s Proportionate Share of Estimated Building
Operating Cost shall be expanded with respect to any such First Opportunity
Space to include Tenant’s Proportionate Share of Building Three, as increased
from time to time to reflect any additional First Opportunity Space which has
previously been added to the Leased Premises, and the Estimated Operating Costs
applicable to Building Three.

             (g)        Within ten (10) business days after the
exercise of any Right of First Opportunity, Tenant shall deliver to Landlord
the First Opportunity Credit required pursuant to Section 5.14(e) above.

             7.34     Potential Lease of
Heartport Building.

             (a)         Automatic
Expansion.  The building commonly
known as 700 Bay Road, Redwood City, California (“Heartport
Building”) is currently the subject of that certain Amended
and Restated Industrial Build–To–Suit Lease (“Heartport Lease”) by and
between Landlord (as Landlord thereunder) and Heartport, Inc., a Delaware
corporation (“Heartport”) (as Tenant
thereunder).  Pursuant to that certain
Sublease Agreement (“Deltagen Sublease”),
of even date herewith, between Tenant (as Subtenant) and Heartport (as
Sublandlord), and Landlord’s letter of consent in relation thereto of even date
herewith, Tenant will sublease the Heartport Building from Heartport.  Landlord and Tenant hereby agree that, in
the event that the Heartport Lease is terminated prior to July 14, 2010
(hereinafter, a “Heartport Lease Termination”),
then the Deltagen Sublease shall terminate by operation of law and all of the
space within the Heartport Building (the “Heartport
Premises”) shall concurrently therewith automatically and
unconditionally be deemed added to the Leased Premises without any additional
action by Landlord or Tenant.  From and
after the date of the Heartport Lease Termination, all terms and provisions of
this Lease shall apply to the Heartport Premises, except that all references to
the Building herein shall thereafter include the Heartport Building, and
Tenant’s obligation to pay Tenant’s Proportionate Share of Estimated Building
Operating Cost shall be expanded with respect to the Heartport Premises to
include Tenant’s Proportionate Share of the Heartport Building (which is
acknowledged to be one hundred percent (100%) thereof); provided however, that
the Base Rent payable by Tenant with respect to the Heartport Premises so added
to the Leased Premises shall be determined as provided below.  In the event of a Heartport Lease Termination
occurring either on or before July 14, 2004 or on or after July 15,
2007, the Base Rent payable by Tenant with respect to the Heartport Premises
shall be equal to the Base Rent which would have been payable by Tenant under
the Deltagen Sublease, from time to time, if the Deltagen Sublease had not been
terminated as set forth above.  In the
event of a Heartport Lease Termination occurring between July 15, 2004 and
July 14, 2007 (inclusive), then the Base Rent payable by Tenant with
respect to the Heartport Premises shall be equal to the Base Rent payable by
Tenant from time to time pursuant to this Lease (i.e. for months 37 through 48
an amount equal to $3.39 per square foot per month; for months 49 through 60 an
amount equal to $3.49 per square foot per month; for months 61 through 72 an amount
equal to $3.59 per square foot per month; etc.); provided however, that if
Tenant’s demonstrated Net Cash Position at the time of the Heartport Lease
Termination is equal to or greater than Fifty Million Dollars ($50,000,000.00),
then the Base Rent payable by Tenant with respect to the Heartport Premises
shall be equal to the Base Rent which would have been payable by Tenant under
the Deltagen Sublease, from time to time, if the Deltagen Sublease had not been
terminated as set forth above.  Tenant
hereby agrees that in the event of a Heartport Lease Termination, Tenant will
enter into an amendment to this Lease memorializing the addition of the
Heartport Premises to the Leased Premises on the terms set forth in this
Section 7.34(a).  Tenant’s
agreement to lease the Heartport Premises directly from Landlord in the event
of a Heartport Lease Termination occurring prior to July 14, 2010 is a
material portion of the consideration for Landlord’s agreement to enter into
this Lease and any failure on the part of Tenant to accept the Heartport
Premises as provided herein shall constitute an Event of Default hereunder.  Within ten (10) business days after the
Heartport Lease Termination, Tenant shall deliver to Landlord an amendment to
the Letter of Credit increasing the then–current LC Face Amount by
an amount equal to nine (9) months Base Rent applicable to the portion of
the Leased Premises comprising the Heartport Premises, as determined in
accordance with the foregoing provisions (hereinafter the “Heartport Lease Termination Credit”).  Landlord and Tenant acknowledge and agree
that in the event that a Heartport Lease Termination shall have occurred, then
the Heartport Premises shall be included within the Leased Premises during any
Renewal Term
validly exercised pursuant to Section 7.09 above, provided that all
references to the Building herein, shall include the Heartport Building as
provided in this Section 7.34(a), Tenant’s obligation to pay Tenant’s
Proportionate Share of Estimated Building Operating Cost shall be expanded to
include Tenant’s Proportionate Share of the Heartport Building (which is
acknowledged to be one hundred percent (100%) thereof) as provided in this
Section 7.34(a) and the applicable Base Rent payable with respect to the
entire Leased Premises, including the Heartport Premises, shall be as
determined in accordance with Section 7.09 above.

             (b)        Expansion
Option and Renewal Option In the Event that No Heartport Lease Termination
Occurs.  If a Heartport Lease
Termination has not occurred, then Tenant shall have the right of first
opportunity (“Heartport Right of First Opportunity”)
to incorporate the Heartport Premises within the Leased Premises during the
period of the first Renewal Term as part of a valid exercise of the First
Renewal Option in accordance with the provisions of Section 7.09
above.  Tenant’s election to include the
Heartport Premises within the Leased Premises during the first Renewal Term
must be exercised, if at all, by written notice (“Heartport
Election Notice”) from Tenant to Landlord given concurrently
with the Renewal Option Notice.  If
Tenant validly and timely delivers the Heartport Election Notice to Landlord,
then the Heartport Premises shall be deemed a part of the Leased Premises
during the first Renewal Term and, if Tenant validly exercises the Second
Renewal Option, during the second Renewal Term.  However, if Tenant fails to deliver a Heartport Election Notice
on a timely basis as provided herein, the Heartport Premises shall not be
included within the Leased Premises during any Renewal Term and Tenant shall no
longer have any rights hereunder to lease the Heartport Premises after
July 14, 2010.  The Heartport
Election Notice given by Tenant to Landlord shall be irrevocable.  Notwithstanding anything to the contrary
herein, Tenant’s delivery of the Heartport Election Notice shall be effective
only if (i) no Event of Default is occurring under this Lease, nor
(ii) is any event then occurring which with the giving of notice or the
passage of time, or both, would constitute an Event of Default hereunder,
either at the time of Tenant’s delivery of the Heartport Election Notice or the
time of commencement of the first Renewal Term, provided that, in the case of
clause (ii) above, such event shall not act to void Tenant’s delivery of
the Heartport Election Notice unless such event continues to occur after
Landlord has provided Tenant with five (5) days written notice of its
existence.  If Tenant validly delivers
the Heartport Election Notice and validly exercises the First Renewal Option in
a timely manner, then (i) the Heartport Premises shall be deemed a part of
the Leased Premises upon the same terms and conditions of this Lease, except
that all references to the Building herein, shall thereafter include the Heartport
Building and Tenant’s obligation to pay Tenant’s Proportionate Share of
Estimated Building Operating Cost shall be expanded with respect to the
Heartport Premises to include Tenant’s Proportionate Share of the Heartport
Building (which is acknowledged to be one hundred percent (100%) thereof),
(ii) the applicable Base Rent payable with respect to the entire Leased
Premises, including the Heartport Premises, shall be as determined in
accordance with Section 7.09 above, and (iii) within ten (10)
business days after the commencement of the first Renewal Term, Tenant shall
deliver to Landlord an amendment to the Letter of Credit increasing the then–current
LC Face Amount by an amount equal to
nine (9) months Base Rent applicable to the portion of the Leased Premises
comprising the Heartport Premises or, if the conditions precedent to Tenant’s
reduction of the LC Face Amount, in accordance with Section 5.14(b)
above have been satisfied, six (6) months Base Rent applicable to the
portion of the Leased Premises comprising the Heartport Premises (“Heartport Option Credit”).

             (c)         Notwithstanding anything to the
contrary herein and irrespective of the fact that Tenant may construct
laboratories, testing rooms or other research facilities within the Heartport
Premises, no laboratories, testing rooms or other research facilities
constructed at any time by Tenant within the Heartport Premises shall be, at
any time, subject to the requirements of Section 5.14(d) above, nor shall
Tenant, at any time, be obligated to comply with the requirements of
Section 5.14(d) above with respect to any such laboratories, testing rooms
or other research facilities constructed, at any time, by Tenant within the
Heartport Premises.

 

[Lease Continues On Following
Page]

             7.35     Counterpart
Originals.  This Agreement may be executed in
counterparts each of which shall be deemed an original but all of which taken
together shall constitute one and the same instrument.  The parties may execute and deliver this
Lease by forwarding signed facsimile copies of this Lease.  Such facsimile signatures shall have the
same binding effect as original signatures, and the parties hereby waive any
defense to validity based on any such copies of signatures.

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

	LANDLORD:	 	WOODSIDE TECHNOLOGY CENTER, LLC,
	 	a
  Delaware limited liability company
	 	 
	 	By:	National
  Office Partners Limited Partnership,
	 	a
  Delaware limited partnership,
	 	its
  sole member
	 	 
	 	By:	Hines
  National Office Partners Limited Partnership,
	 	 	a
  Texas limited partnership,
	 	 	its
  general partner
	 	 	 
	 	 	By:	Hines
  Fund Management, L.L.C.,
	 	 	 	a
  Delaware limited liability company,
	 	 	 	its
  general partner
	 	 	 	 
	 	 	By:	Hines
  Interests Limited Partnership,
	 	 	 	a
  Delaware limited partnership
	 	 	 	its
  sole member
	 	 	 	 
	 	 	By:	Hines
  Holdings, Inc.,
	 	 	 	a
  Texas corporation,
	 	 	 	its
  general partner
	 	 	 	 
	 	 	By:	 

	 	 	 	 
	 	 	Its:	 

	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 
	TENANT:	 	DELTAGEN, INC.,
	 	a
  Delaware corporation
	 	 
	 	 
	 	By:
	 	 	

	 	Name:
	 	 	

	 	Title:
	 	 	

											

Exhibit A–1

“Leased Premises Depiction”

(to
come)

Exhibit A–2

“Project Legal Description”

The land referred to herein is located in
the State of California, County of San Mateo, and is described as follows:

Parcels 1, 2 and 3, as shown on that
certain map entitled “Parcel Map No. 97–6, lying entirely within the
City of Redwood City, California”, filed in the office of the County Recorder
of San Mateo County, State of California, on December 10, 1997 in
Book 70 of Parcel Maps at page(s) 17 and 18.

Exhibit B

Building
Rules and Regulations

	1.	Tenant
  shall not use any method of heating or air conditioning other than that
  approved by Landlord without the prior written consent of Landlord, which
  consent shall not be unreasonably withheld, conditioned or delayed.
	 	 
	2.	Except
  as otherwise provided in the Lease, all window coverings installed by tenant
  and visible from the outside of the building require the prior written
  approval of Landlord, which approval shall not be unreasonably withheld,
  conditioned or delayed.
	 	 
	3.	Tenant
  shall not use, keep or permit to be used or kept any foul or noxious gas or
  substance or any flammable or combustible materials on or around the
  Premises, except to the extent that Tenant is permitted to use the same under
  the terms of the Lease.
	 	 
	4.	Tenant
  shall park motor vehicles in the areas of the Project designated by Landlord
  as parking areas, including areas for loading and unloading. During those
  periods of loading and unloading, Tenant shall not unreasonably interfere
  with traffic flow around the Building or the Project and loading and
  unloading areas of other tenants.
	 	 
	5.	Tenant
  shall not waste electricity, water or air conditioning, shall cooperate fully
  with Landlord to assure the most effective operation of the Building’s
  heating and air conditioning systems and shall comply with any governmental
  energy-saving rules or regulations about which Tenant has been given
  notice.  Tenant shall not tamper with
  or attempt to adjust temperature control thermostats in the Leased Premises;
  Landlord shall make reasonable adjustments in thermostats upon request from
  Tenant.
	 	 
	6.	Canvassing,
  peddling, soliciting, and distribution of handbills in the Building are
  prohibited and Tenant will cooperate to prevent these activities.
	 	 
	7.	Except
  as provided in the Lease, Tenant shall not access the roof without Landlord’s
  permission.
	 	 
	8.	Business
  machines and mechanical equipment belonging to Tenant which cause noise or
  vibration that may be transmitted to the structure of the Building, to such a
  degree as to be objectionable to Landlord or other tenants, shall be placed
  and maintained by Tenant, at Tenant’s expense, on vibration isolators or in
  noise-dampering housing or other devices sufficient to eliminate noise or
  vibration.
	 	 
	9.	All
  goods, including material used to store goods, delivered to the Premises of
  Tenant shall be immediately moved into the Premises and shall not be left in
  parking or receiving areas over night.
	 	 
	10.	Tenant
  is responsible for the storage and removal of all trash and refuse.  All such trash and refuse shall be
  contained in suitable receptacles stored behind screened enclosures at
  locations approved by Landlord.
	 	 
	11.	Tenant
  shall not store or permit the storage or placement of goods or merchandise in
  or around the common areas surrounding the Premises.  No displays or sales of merchandise shall
  be allowed in the parking lots or other common areas.
	 	 
	12.	Tenant
  shall not permit any animals, including but not limited to, any household
  pets, to be kept in or about the Leased Premises, the Building, the Project
  or any of the Common Areas in a manner which violates applicable Laws or in
  the Common Areas of the Project in a manner which constitutes a nuisance to
  the Common Areas of the Project. 
  Tenant shall prior to the date such animals are to enter the Leased
  Premises and thereafter from time to time upon the request of Landlord
  provide to Landlord a written plan for the handling and disposal of all
  animals used by Tenant in the conduct of its business, which plan shall be
  subject to the reasonable written approval of Landlord.
	 	 
	13.	No smoking
  shall be permitted in public areas of the Building including without
  limitation lobbies, restrooms, balconies, stairwells and fire exist
  corridors.
	 	 
	14.	Movement
  in or out of the Building of furniture, office equipment, or other bulky
  material shall be scheduled at least 24 hours in advance with Landlord
  regarding the time, method, and routing of such movement.  The tenant is responsible for ensuring
  that the moving/delivery company provides a valid Certificate of Insurance to
  the Landlord.
	 	 
	15.	Landlord
  reserves the right to rescind any of these rules and regulations and to make
  future rules and regulations required for the safety, protection and
  maintenance of the Building, the operation and preservation of the good order
  thereof, and the protection and comfort of the tenants and their employees
  and visitors.  Such rules and
  regulations, when made and written notice thereof given to Tenant, shall be
  binding as if originally included herein but shall be subject to the
  provisions of Section 5.16 of the Lease.

EXHIBIT C

Sample
Form of

Lease Commencement Certificate

Dated:
___________, 2001

	Re:	That
  certain Building Lease (“Lease”), dated _________, 2001, by and between
  Woodside Technology Center, LLC (as Landlord) and Deltagen, Inc. (as Tenant),
  pursuant to which Tenant has leased the building (“Building”) commonly known
  as 740 Bay Road, Redwood City, California 94063, located within the Project
  commonly known as Woodside Technology Center.

             This
is to certify that Woodside Technology Center, LLC has delivered possession of
the above–referenced Building to Deltagen, Inc. and the following matters
related to the Lease:

	1.	Term
  Commencement Date: ____________________ 
	2.	Term
  Expiration Date: ________________________ 
	3.	The Lease is in full
  force and affect and neither party has any further right to terminate the
  Lease pursuant to Section 3.01(c) thereof.

             IN
WITNESS WHEREOF, the undersigned have executed this Lease Commencement
Certificate to be effective as of the date first written above.

 

	LANDLORD:	 	WOODSIDE TECHNOLOGY CENTER, LLC,
	 	a
  Delaware limited liability company
	 	 
	 	By:	National
  Office Partners Limited Partnership,
	 	a
  Delaware limited partnership,
	 	its
  sole member
	 	 
	 	By:	Hines
  National Office Partners Limited Partnership,
	 	 	a
  Texas limited partnership,
	 	 	its
  general partner
	 	 	 
	 	 	By:	Hines
  Fund Management, L.L.C.,
	 	 	 	a
  Delaware limited liability company,
	 	 	 	its
  general partner
	 	 	 	 
	 	 	By:	Hines
  Interests Limited Partnership,
	 	 	 	a
  Delaware limited partnership
	 	 	 	its
  sole member
	 	 	 	 
	 	 	By:	Hines
  Holdings, Inc.,
	 	 	 	a
  Texas corporation,
	 	 	 	its
  general partner
	 	 	 	 
	 	 	By:	 

	 	 	 	 
	 	 	Its:	 

	TENANT:	 	DELTAGEN, INC.,
	 	a
  Delaware corporation
	 	 
	 	 
	 	By:
	 	 	

	 	Name:
	 	 	

	 	Title:
	 	 	

										

Table of Contents

	 	 	Page	 
	ARTICLE 1	 	Definitions	 
	1.01	 	“Additional
  Rent”	 
	1.02	 	“Alterations”	 
	1.03	 	“Base Rent”	 
	1.04	 	“Building”	 
	1.05	 	“Building
  Operating Cost”	 
	1.06	 	“Building Operating
  Cost Adjustment”	 
	1.07	 	“Building
  Systems”	 
	1.08	 	“business day”	 
	1.09	 	“Common Areas”	 
	1.10	 	“Estimated Building
  Operating Cost”	 
	1.11	 	“Estimated Project
  Operating Cost”	 
	1.12	 	“Fair Market
  Rent”	 
	1.13	 	“Gross Rent”	 
	1.14	 	“Hazardous
  Material”	 
	1.15	 	“Hazardous Materials Claims”	 
	1.16	 	“Hazardous
  Materials Laws”	 
	1.17	 	“Landlord
  Parties”	 
	1.18	 	“Laws”	 
	1.19	 	“LC Face Amount”	 
	1.20	 	“Leased
  Premises”	 
	1.21	 	“Letter of
  Credit”	 
	1.22	 	“Permitted Hazardous
  Materials”	 
	1.23	 	“Permitted Use”	 
	1.24	 	“Project”	 
	1.25	 	“Project
  Operating Cost”	 
	1.26	 	“Rent”	 
	1.27	 	“Tenant Parties”	 
	1.28	 	“Tenant’s Proportionate
  Share”	 
	1.29	 	“Term”	 
	1.30	 	“Term
  Commencement Date”	 
	1.31	 	“Term
  Expiration Date”	 
	ARTICLE 2	 	Leased
  Premises	 
	2.01	 	Lease.	 
	2.02	 	Landlord’s Reserved Rights.	 
	ARTICLE 3	 	Rent, Term, Use and Building
  Operating Costs	 
	3.01	 	Term.	 
	3.02	 	Use.	 
	3.03	 	Payment
  of Base Rent and Tenant’s Proportionate Share of Estimated Building Operating
  Cost.	 
	3.04	 	Net Lease.	 
	3.05	 	Project
  Operating Cost.	 
	3.06	 	Allocation of
  Building Operating Cost.	 
	3.07	 	Adjustment
  For Variation Between Estimated and Actual.	 
	3.08	 	Computation
  of Building Operating Cost Adjustment.	 
	3.09	 	Tenant’s
  Right To Audit Building Operating Costs.	 
	ARTICLE 4	 	Landlord Covenants	 
	4.01	 	Landlord’s Repairs
  and Maintenance.	 
	4.02	 	Landlord’s Right To
  Perform.	 
	4.03	 	Graphics
  and Signage.	 
	4.04	 	Peaceful
  Enjoyment.	 
	ARTICLE 5	 	Tenant’s Covenants	 
	5.01	 	Payments By
  Tenant.	 
	5.02	 	Utilities.	 
	5.03	 	Taxes On
  Personal Property and Alterations.	 
	5.04	 	Repairs By
  Tenant.	 
	5.05	 	Waste.	 
	5.06	 	Assignment
  or Sublease.	 
	5.07	 	Alterations,
  Additions or Improvements.	 
	5.08	 	Liens.	 
	5.09	 	Compliance
  With Laws, Insurance Standards and Non-Discrimination.	 
	5.10	 	Entry
  For Repairs, Inspection, Posting Notices, Etc.	 
	5.11	 	No Nuisance.	 
	5.12	 	Subordination;
  Mortgagee Protection; Reciprocal Easement Agreements.	 
	5.13	 	Estoppel
  Certificate.	 
	5.14	 	Letter of
  Credit.	 
	5.15	 	Tenant’s
  Remedies.	 
	5.16	 	Rules
  and Regulations.	 
	5.17	 	Hazardous
  Materials.	 
	5.18	 	Surrender of
  Premises On Termination.	 
	5.19	 	Window Coverings.	 
	5.20	 	Tenant’s
  Right to Repair.	 
	ARTICLE 6	 	Condition
  and Operation of the Building	 
	6.01	 	As-Is Condition.	 
	6.02	 	Alteration
  of Project.	 
	ARTICLE 7	 	Casualty,
  Eminent Domain and Miscellaneous Matters	 
	7.01	 	Landlord’s
  Insurance.	 
	7.02	 	Liability
  Insurance.	 
	7.03	 	Tenant’s
  Casualty Insurance and Additional Tenant Insurance Requirements.	 
	7.04	 	Indemnity and Exoneration.	 
	7.05	 	Waiver of Subrogation
  Rights.	 
	7.06	 	Condemnation.	 
	7.07	 	Damage
  and Destruction.	 
	7.08	 	Default By
  Tenant.	 
	7.09	 	Option
  to the Extend the Term At Fair Market Rent.	 
	7.10	 	No Waiver.	 
	7.11	 	Statutory
  Waivers.	 
	7.12	 	Holding Over.	 
	7.13	 	Attorneys’ Fees.	 
	7.14	 	Amendments.	 
	7.15	 	Transfers
  By Landlord.	 
	7.16	 	Severability.	 
	7.17	 	Notices.	 
	7.18	 	No Option.	 
	7.19	 	Integration and
  Interpretation.	 
	7.20	 	Quitclaim.	 
	7.21	 	No Easement For
  Light, Air and View.	 
	7.22	 	No Merger.	 
	7.23	 	Memorandum
  of Lease.	 
	7.24	 	Survival.	 
	7.25	 	Financial
  Statements.	 
	7.26	 	No Joint
  Venture.	 
	7.27	 	Successors
  and Assigns.	 
	7.28	 	Applicable Law.	 
	7.29	 	Time of
  the Essence.	 
	7.30	 	Interpretation.	 
	7.31	 	Parking.	 
	7.32	 	Brokers.	 
	7.33	 	Right of First Opportunity.	 
	7.34	 	Potential Lease
  of Heartport Building.	 
	7.35	 	Counterpart
  Originals.Prepared by MerrillDirect

Exhibit 10.31.1

 

SUBLEASE AGREEMENT

BETWEEN

HEARTPORT, INC.,

a Delaware corporation

Sublandlord

AND

DELTAGEN, INC.,

a Delaware corporation

Subtenant

FOR PREMISES AT

700 Bay Road

Redwood City, California

Dated

July 10, 2001

BASIC
SUBLEASE INFORMATION

             The following terms constitute the
Basic Sublease Information for this Sublease. 
Where the following capitalized terms appear in this Sublease, they
shall have the meanings set forth opposite such terms in this Basic Sublease
Information.  All other capitalized
terms used in this Sublease without definition shall have the meanings ascribed
to such terms in the Master Lease.  The
Basic Sublease Information is incorporated into and forms a part of the
Sublease.

	Effective Date:	July 10, 2001
	 	 
	Master Lease	Amended and Restated Industrial Build-to-Suit Lease,
  dated July 10, 2001, between Woodside Technology Center, LLC, a Delaware
  limited liability company and successor in interest to Chestnut Bay LLC, a
  California limited liability company, as landlord, and Heartport, Inc., a
  Delaware corporation, as tenant.
	 	 
	Master Landlord	Woodside Technology Center, LLC, a Delaware limited
  liability company and successor in interest to Chestnut Bay LLC, a California
  limited liability company
	 	 
	Sublandlord	Heartport, Inc., a Delaware corporation
	 	 
	Subtenant	Deltagen, Inc., a Delaware corporation
	 	 
	Building	The building situated on the Real Property and
  commonly known as 700 Bay Road, Redwood City, California, containing
  approximately 132,347 rentable square feet.
	 	 
	Master Premises	All rentable area contained within the Building, as
  further described in the Master Lease.
	 	 
	Sublease Premises	 
	 	 
	 	Phase 1	A portion of the first and second floors of the
  Building, as shown on Exhibit A, containing approximately 38,769 rentable
  square feet.
	 	 	 
	 	Phase 2	A portion of the first and second floors of the
  Building, as shown on Exhibit A, containing approximately 40,763
  rentable square feet.
	 	 	 
	 	Phase 3	A portion of the first and second floors of the
  Building, as shown on Exhibit A, containing approximately 24,815
  rentable square feet.
	 	 	 
	 	Phase 4	A portion of the first and second floors of the
  Building, as shown on Exhibit A, containing approximately 28,000
  rentable square feet.
	 	 	 
	 	Phases 1-4 together comprise all of the rentable
  square footage of the Building.  The
  actual rentable square footage of each Phase shall be subject to
  remeasurement in accordance with section 1(a).
	 	 
	Sublandlord's Address	Prior to the Phase 4 Commencement Date:
	 	 	 
	 	 	Heartport, Inc.
	 	 	700 Bay Road
	 	 	Redwood City, CA 
  94063
	 	 
	 	From and after the Phase 4 Commencement Date:
	 	 
	 	 	Heartport, Inc.
	 	 	c/o Ethicon, Inc.
	 	 	U.S. Route 22 West
	 	 	Somerville, NJ 
  08876
	 	 
	Subtenant's Address	Prior to the Phase 1 Commencement Date
	 	 	 
	 	 	Deltagen, Inc.
	 	 	1003 Hamilton Avenue
	 	 	Menlo Park, CA 94025
	 	 	 
	 	 
	 	From and after the Phase I Commencement Date
	 	 
	 	 	Deltagen, Inc.
	 	 	740 Bay Road
	 	 	Redwood City, CA 
  94063
	 	 	 
	 	 
	 	 
	Term	Approximately eight (8) years and nine (9) months,
  commencing on the Commencement Date and ending on the Expiration Date, unless
  sooner terminated in accordance with this Sublease.
	 	 
	Commencement Date	October 15, 2001
	 	 
	 	Phase 1 Commencement Date	October 15, 2001
	 	 	 
	 	Phase 2 Commencement Date	October 15, 2001
	 	 	 
	 	Phase 3 Commencement Date	December 15, 2001
	 	 	 
	 	Phase 4 Commencement Date	The first to occur of (a) the date specified in a
  written notice by Sublandlord to Subtenant, which date shall be not earlier
  than (i) April 15, 2002 or (ii) the date which is six (6) months from
  the date of such notice, whichever is later; or (b) the third anniversary of
  the Commencement Date, whether or not notice is given.
	 	 
	 	The Commencement Date for each Phase is subject to
  adjustment as provided in section 2 below.
	 	 
	Expiration Date	July 14, 2010, unless sooner terminated in accordance
  with the terms of this Sublease.
	 	 
	Rent Commencement Date:	 
	 	 
	 	Phase
  1 Rent Commencement Date	Phase 1 Commencement Date.
	 	 	 
	 	Phase
  2 Rent Commencement Date	The earlier of (a) Subtenant's occupancy of Phase 2
  for the conduct of its business or (b) one hundred twenty (120) days after
  the Phase 2 Commencement Date.
	 	 	 
	 	Phase
  3 Rent Commencement Date	The earlier of (a) Subtenant's occupancy of Phase 2
  for the conduct of its business or (b) one hundred twenty (120) days after
  the Phase 2 Commencement Date.
	 	 	 
	 	 	 
	 	Phase
  4 Rent Commencement Date	Phase 4 Commencement Date.
	 	 
	Security Deposit	At Sublease Execution:
	 	 	Cash:	$	1,500,000.00	 
	 	 	Letter of Credit:	$	500,000.00	 	 
	 	 
	Subtenant's Proportionate

  Share	The ratio of the rentable square footage of each Phase
  of the Sublease Premises, from and after the Commencement Date for each such
  Phase, to the total rentable square footage of the Building, which the
  parties agree equals 132,347 rentable square feet. rounded to the nearest ten
  thousandths of a percent.  At and
  after the Phase 4 Commencement Date, the Subtenant's Proportionate Share
  shall be 100.0000%
	 	 
	Subtenant's Parking

  Allotment	That number of spaces obtained by multiplying 436 (the
  total number of parking spaces serving the Building), by Subtenant's
  Proportionate Share in effect from time to time.
	 	 
	Brokers	For Sublandlord:	Tory Corporate Real Estate Advisors, Inc., dba The
  Staubach Company
	 	 	 
	 	For Subtenant:	BT Commercial/Technology Commercial
	 	 
	Exhibits	Exhibit A – Sublease Premises Floor Plan
	 	 
	 	Exhibit B – Master Lease (redacted)
	 	 
	 	Exhibit C – Form of Letter of Credit
	 	 
	 	Exhibit D – Building Modifications
	 	 
	 	Exhibit E – Schedule of Terms
										

SUBLEASE

             This Sublease, dated as of the
Effective Date, is made by and between Sublandlord and Subtenant with reference
to the following facts and understandings:

Recitals

             A.         Sublandlord
is the tenant of the Master Premises pursuant to the Master Lease.  A copy of the Master Lease, with certain
economic provisions not relevant to this Sublease redacted, is attached as Exhibit
B to this Sublease.

             B.          Subtenant
desires to sublease the Sublease Premises from Sublandlord, and Sublandlord
desires to sublease the Sublease Premises to Subtenant, on and subject to all
of the terms and conditions of this Sublease.

Agreement

             In consideration of the mutual
covenants of the parties set forth herein, and other valuable consideration,
the receipt and sufficiency of which are acknowledged, Sublandlord and
Subtenant, intending to be legally bound, hereby agree as follows:

             1.          Sublease;
Common Area; Parking.

             (a)         Sublease Premises.  Sublandlord hereby subleases to Subtenant,
and Subtenant hereby subleases from Sublandlord, the Sublease Premises, in
phases as depicted on Exhibit A attached to this Sublease and described
in the Basic Sublease Information (each a "Phase"), on and subject to
all of the terms, covenants and conditions set forth herein.  The parties acknowledge that Exhibit A
shows the approximate location of the Sublease Premises, demising walls,
interior partition walls, and movable partitions and other details.  Exhibit A is not intended to
constitute an agreement, representation or warranty as to the exact location of
the Sublease Premises, any Common Areas or any elements thereof.

             (b)        Re-measurement of Phases.  Subtenant shall, within sixty (60) days after the execution of
this Sublease, cause the rentable square footage of each Phase of the Sublease
Premises to be re-measured in accordance with the measurement principles
articulated in BOMA International's Standard Method for Measuring Floor Area in
Office Buildings, ANSI/BOMA Z65.1-1996 (the "BOMA Standard").  The results shall be certified to
Sublandlord by Subtenant's architect or engineer as conforming to the BOMA
Standard, which certification shall be delivered to Sublandlord prior to the
expiration of such sixty (60) day period. 
The results of such re-measurement shall be subject to Sublandlord's
reasonable approval, within ten (10) days after Sublandlord's receipt of such
certification, and shall be subject to adjustment to the extent determined by
Sublandlord not to be in conformance with the BOMA Standard.  Notwithstanding the foregoing, the rentable
square footage of each Phase shall be subject to reasonable adjustment so that
the aggregate rentable square footage of all Phases shall equal the total
rentable square footage of the Building, as specified in the Basic Sublease
Information.  Sublandlord and Subtenant
agree that the total rentable square footage of the Building as specified in
the Basic Sublease Information shall be controlling and shall not be subject to
remeasurement or modification.  Unless
and until re-measured as provided above, the rentable square footage of each
Phase shall be as specified in the Basic Sublease Information, which footage
shall be used to determine the Base Rent for each Phase, Subtenant's
Proportionate Share, Subtenant's Parking Allotment and Subtenant's share of
utilities expenses (subject to the adjustments permitted in subsection 3(d)
below).  Within ten (10) days after
Sublandlord's approval of the re-measurement, as provided above, Sublandlord
and Subtenant shall enter into an amendment to this Sublease, substantially in
the form of Exhibit E hereto, setting forth the actual square footage of
each Phase, the amount of the Base Rent for each Phase during the Term (except
for Phase 4), Subtenant's Proportionate Share, and Subtenant's Parking
Allotment.  Subtenant's failure to
execute such amendment shall not affect Subtenant's obligations under this
Sublease.  Any adjustment to the Rent
paid by Subtenant prior to Sublandlord's 
approval of the re-measurement and required as a result of such
re-measurement shall be made either by credit against the next Rent coming due
(in the case of an overpayment) or by Subtenant paying any shortfall to
Sublandlord within fifteen (15) days after Sublandlord's approval of the
re-measurement.  Notwithstanding the
foregoing, the Base Rent applicable to Phase 1 for each of the first four
months following the Phase 1 Rent Commencement Date shall be $67,845.75 per
month.

                           (c)         Common Area Rights.  During the Sublease Term, Subtenant shall
have a non-exclusive license, in common with Sublandlord, Master Landlord, all
other subtenants or occupants of the Project, and their respective employees,
agents, representatives and invitees, to use the Common Areas of the Project.

                           (d)        Parking.  During the Sublease Term, Subtenant shall
have a non-exclusive license, in common with Sublandlord, Master Landlord, all
other subtenants or occupants of the Project, and their respective employees,
agents, representatives and invitees, to use that number of parking spaces
indicated on the Basic Sublease Information as Subtenant's Parking Allotment
corresponding to the Phase Commencement Date then in effect.  Subtenant's Parking Allotment shall be
subject to adjustment as provided in subsection 1(b) above.

             2.          Term; Possession; Occupancy; Early
Access.

                           (a)         Term; Commencement Date.  The Term of this Sublease shall commence on
the Commencement Date and shall end on July 14, 2010, unless sooner terminated
in accordance with the terms of this Sublease. 
Notwithstanding the foregoing, Subtenant's obligations with respect to
(i) Phase 1 shall commence on the Phase I Commencement; (ii) Phase 2 shall
commence on the Phase 2 Commencement Date; (iii) Phase 3 shall commence on the
Phase 3 Commencement Date; and (iv) Phase 4 shall commence on the
Phase 4 Commencement Date.  In the event
that Subtenant takes occupancy of a Phase for the conduct of its business
operations prior to the Commencement Date for such Phase, as specified in the
Basic Sublease Information, then the Commencement Date for such Phase shall be
adjusted to the date on which such occupancy of the Phase first occurred.

                           (b)        Possession.  Sublandlord shall use reasonable efforts to
tender possession of each Phase of the Sublease Premises to Subtenant on or
before the Commencement Date for such Phase, vacant of all occupants and in the
condition required by section 6 below.  
If requested by Sublandlord, Subtenant shall execute an amendment to
this Sublease setting forth the actual Commencement Date for a Phase and the
Base Rent then applicable to such Phase; provided, however, that Subtenant's
failure to execute such an amendment shall not affect Subtenant's obligations
under this Sublease.  If Sublandlord,
for any reason whatsoever, fails to deliver possession of any Phase of the
Sublease Premises to Subtenant by the Commencement Date for such Phase, then
(i) this Sublease shall not be void or voidable, (ii) Sublandlord shall not be
liable to Subtenant for any loss or damage resulting therefrom and (iii) the
Term of this Sublease shall not be extended. 
However, in that event, the Commencement Date for such Phase shall be
delayed until the date on which Sublandlord tenders possession of such Phase to
Subtenant, and Subtenant shall not be liable for the payment of Rent with
respect to such Phase until the Commencement Date for such Phase has
occurred.  Notwithstanding the
foregoing, (x) Sublandlord shall have a period of two weeks from completion of
the second floor demising wall (described in paragraph (B)(1)(b) of Exhibit
D hereto) to relocate its operations to the second floor of the Phase 4
Premises, without such period constituting a delay by Sublandlord in tendering
possession of the Sublease Premises, and (y) if Sublandlord is delayed in
tendering possession of a Phase on or before the Commencement Date for such
Phase as a result of the act or omission of Subtenant, then the Commencement
Date for such Phase shall be the date on which the Commencement Date for such
Phase would have occurred in the absence of such delay by Subtenant.  Sublandlord acknowledges that Sublandlord
will be able to relocate its operations from the Phase 1, 2 and 3 portions of
the Sublease Premises into the Phase 4 portion of the Sublease Premises when
the demising walls for the second floor portion of Phase 4 (described in
paragraph (B)(1)(b) of Exhibit D hereto) are complete and the first
floor portion of Phase 4 is separately demised and secure.  Such first floor demising work sufficient to
enable Sublandlord to vacate the first floor portions of Phases 1, 2 and 3 may
be satisfied by Subtenant either completing the first floor demising wall
described in paragraph (B)(1)(a) of Exhibit D hereto or installing
temporary partition walls (reasonably acceptable to Sublandlord to separate and
provide security for such area) pending completion of such first floor demising
wall.

                           (c)         Early Access.  Provided that all conditions to the
effectiveness of this Sublease have been satisfied, Sublandlord agrees to
provide Subtenant with access to Phase 1 and Phase 2 as soon as reasonably
practicable for the sole purpose of designing, constructing and installing the
Subtenant Improvements (defined in section 7) and the Building Modifications
(defined in section 8) and otherwise preparing such Phases for Subtenant's
occupancy.  Similarly, Sublandlord
agrees to provide Subtenant with access to Phase 3, for such purposes, as soon
as reasonably practicable following the vacation of such Phase by its current
occupant.  Such access shall be on all
of the terms and conditions of this Sublease except that (i) Subtenant's
obligation to pay Base Rent applicable to a Phase shall commence on the Rent
Commencement Date for each such Phase, (ii) Subtenant's obligation to pay
Subtenant's Proportionate Share of Common Area Expenses and insurance, and
Subtenant's obligation to pay Subtenant's share of  utilities expenses shall commence on commencement of demolition
or construction work by Subtenant in the Sublease Premises, and (iii)
Subtenant's obligation to pay Subtenant's Proportionate Share of Real Property
Taxes shall commence on the Commencement Date for each such Phase.  All activities by Subtenant and its
employees, agents, contractors, subcontractors and invitees in each Phase prior
to the Commencement Date for such Phase shall be conducted in accordance with
the terms of this Sublease and in a manner so as to minimize any disruption to
the operations of Sublandlord or other subtenants in the Building.  Notwithstanding anything herein to the
contrary, Subtenant shall not be provided with early access to any Phase
pursuant to this subsection 2(c) unless and until (i) all conditions precedent
to this Sublease have been satisfied, (ii) Subtenant has deposited with
Sublandlord the cash portion and the Letter of Credit portion of the Security
Deposit (as provided in section 4), (iii) Subtenant has paid to Sublandlord the
Base Rent due for the first month of the Sublease Term (as provided in section
3), and (iv) Subtenant has provided to Sublandlord evidence of all insurance
required to be maintained by Subtenant under this Sublease.

             3.          Rent.

                           (a)         Base Rent.  Subtenant shall pay to Sublandlord monthly
base rent ("Base Rent")  in
advance on the first day of each calendar month during the Term of this
Sublease commencing on the Commencement Date corresponding to each Phase.  Base Rent shall be paid by Subtenant,
without prior notice and free of all claims, demands or setoffs of any kind or
character whatsoever, to Sublandlord at Sublandlord's Address or to such other
address as Sublandlord may specify to Subtenant in a written notice.  If a Rent Commencement Date for a Phase
occurs on a date other than the first day of a calendar month, or if the Term
ends on a date other than the last day of a calendar month, then the Base Rent
due for such month shall be prorated on a per diem basis with respect to the
portion of the calendar month within the Term. 
All sums other than Base Rent that Tenant is obligated to pay under this
Sublease will be deemed to be additional rent due, regardless of whether those
sums are designated as "additional rent".  The term "Rent" means the Base Rent and all additional
rent payable under this Sublease.  The
Base Rent payable under this Sublease shall be the product of the Base Rent per
rentable square foot, as set forth in the following table, multiplied by the
rentable square footage of each Phase of the Sublease Premises in effect from
and after the Rent Commencement Date for each such Phase.

	 	Base
  Rent Per R.S.F.	 
	Phase 1 Rent
  Commencement Date through Month 4	$	1.75	 
	Month 5 through
  10/14/02 (Phase 1)	$	2.75	 
	Phase 2 Rent
  Commencement Date through 10/14/02	$	2.75	 
	Phase 3 Rent
  Commencement Date through 10/14/02	$	2.75	 
	10/15/02 through
  10/14/03	$	2.8325	 
	10/15/03 through
  10/14/04	$	2.9175	 
	10/15/04 through
  10/14/05	$	3.0050	 
	10/15/05 through
  10/14/06	$	3.0951	 
	10/15/06 through
  10/14/07	$	3.1880	 
	10/15/07 through
  10/14/08	$	3.2836	 
	10/15/08 through
  10/14/09	$	3.3822	 
	10/15/09 through
  07/14/10	$	3.4836	 

Base Rent for Phase 4 shall be the
product of the rentable square footage of Phase 4 and the Base Rent per
rentable square foot in effect on the Phase 4 Rent Commencement Date.  Upon execution of this Sublease by
Subtenant, Subtenant shall pay to Sublandlord the sum of $67,845.75, which
shall be applied against the Base Rent due for the first month of the Sublease
Term.  Notwithstanding any
re-measurement of the rentable square footage of the Sublease Premises, the
Base Rent applicable to Phase 1 for each of the first four months following the
Phase 1 Rent Commencement Date shall be $67,845.75 per month.

                           (b)        Adjustments to Base Rent.  As shown in the above table, Base Rent shall
be adjusted, effective October 15 of each year during the Term, to an amount
which is 103% of the Base Rent in effect during the immediately preceding
calendar month.

                           (c)         Additional Rent.  In addition to paying the Base Rent,
Subtenant shall pay to Sublandlord Subtenant's Proportionate Share of Common
Area Expenses, Real Property Taxes, insurance and all other expenses which are
charged to Sublandlord by Master Landlord under the Master Lease which are
applicable to the Sublease Premises or Subtenant's use thereof.  Subtenant shall not be liable for any fee or
expense charged by Master Landlord to Sublandlord solely as a result of
Sublandlord's failure to perform its obligations under the Master Lease except
and to the extent that such failure is the result of the act or omission of
Subtenant.

                           (d)        Utilities Expenses.  Subtenant's obligations with respect to
utilities supplied to or used at the Sublease Premises shall be governed by
section 4 of the Master Lease.  However,
so long as the Sublease Premises consists of less than the entire Building
then, with respect to any utilities that are not separately metered to the
Sublease Premises, Subtenant shall pay Subtenant's Proportionate Share of such
utilities' expense, as additional rent, within fifteen (15) days after written
invoice from Sublandlord.  If
Sublandlord determines that Subtenant has used or is using a disproportionate
amount of any utility that is not separately metered to the Sublease Premises,
or an amount that is in excess of the amount that would be customarily supplied
to the Sublease Premises for office and research/development purposes, the
Sublandlord shall be entitled to make a reasonable determination of Subtenant's
share of such utilities' expense and Subtenant shall pay such amount within
fifteen (15) days after written invoice from Sublandlord. 

             4.          Security Deposit.  Concurrently with Subtenant's execution of
this Sublease, Subtenant shall deposit with Sublandlord the cash portion of the
Security Deposit in the amount set forth in the Basic Sublease Information and
the Letter of Credit in the amount specified in the Basic Sublease Information,
as security for the performance and observance by Subtenant of all of the
terms, covenants and conditions of this Sublease by Subtenant to be kept and
performed during the Term.  The cash
portion of the Security Deposit and the Letter of Credit shall together
constitute the "Security Deposit". 
In the event Sublandlord transfers its interest in this Sublease,
Sublandlord shall transfer the Security Deposit then held by Sublandlord to
Sublandlord’s successor in interest, and thereafter Sublandlord shall have no
further liability to Subtenant with respect to the Security Deposit.

                           (a)         Application of Security Deposit.  If Subtenant defaults in the full and timely
performance of any or all of Subtenant's covenants and obligations under this
Sublease, after notice and the expiration of any applicable cure period, then
Sublandlord may, at the option of Sublandlord, from time to time and without
waiving any other remedy available to Sublandlord, appropriate or apply such
portion of the Security Deposit (either the cash portion or the Letter of
Credit Proceeds, defined below) in the amount and to
the extent necessary (i) to cure any Event of Default under this Sublease and
to compensate Sublandlord for any loss or damage Sublandlord incurs as a result
of such Event of Default, (ii) to repair damage to the Sublease Premises caused
by Subtenant and not repaired by Subtenant in accordance with this Sublease,
(iii) to clean and repair the Sublease Premises upon termination of this
Sublease, if Subtenant fails to deliver possession of the Sublease Premises to
Sublandlord in accordance with the terms of this Sublease, and (iv) to
reimburse Sublandlord for the payment of any amount which Sublandlord may for
any other purpose spend or be required to spend by reason of an Event of
Default, it being understood that any use of the Security Deposit shall not
constitute a bar or defense to any of Sublandlord’s remedies as a result of
such Event of Default.  The Security
Deposit shall not be deemed an advance rent deposit or an advance payment of
any other kind, or a measure of Sublandlord’s damages upon an Event of Default.

                           (b)        Cash Security Deposit.  In the event that Sublandlord applies all or
any portion of the cash Security Deposit as provided above, Subtenant shall pay
to Sublandlord, within fifteen (15) days following demand, the amount so
applied in order to restore the cash Security Deposit to the amount stated in
the Basic Sublease Information. 
Subtenant's failure to do so within such fifteen (15) day period shall
constitute an Event of Default under this Sublease.  Sublandlord shall return the cash portion of the Security Deposit
(or so much thereof as remains) to Subtenant within forty-five (45) days
following the expiration of the Term and satisfaction by Subtenant of all its
obligations under this Sublease. 
Sublandlord's obligations with respect to the Security Deposit are those
of a debtor and not a trustee.  Subject
to Sublandlord's right to apply the Security Deposit as provided herein,
Sublandlord shall cause the cash portion of the Security Deposit and any Letter
of Credit Proceeds to be held in one or more federally insured interest bearing
accounts, separate from Sublandlord's general funds, and/or in United States
Treasury bills or notes.  Provided that
no Event of Default shall have occurred during the Term, all interest which
accrues and is paid with respect to the Security Deposit shall, after deducting
all fees and expenses applicable thereto, be paid to Subtenant within a
reasonable time after the end of each calendar year (but not later than March 1
of each year).  From and after the
occurrence of an Event of Default, all such interest shall be added to and
become a part of the Security Deposit. 
Sublandlord shall provide to Subtenant, promptly following receipt by
Sublandlord but not more frequently than quarterly, copies of account
statements received by Sublandlord with respect to the Security Deposit.  If not otherwise provided by the financial
institution or investment management firm holding the Security Deposit,
Sublandlord shall also provide Subtenant with an annual statement of income and
expenses applicable to the Security Deposit. 
Sublandlord shall have no liability for any loss or diminution in the
value of the Security Deposit or for achieving any particular rate of return
thereon, provided that the Security Deposit is invested, held and applied as
provided herein.  In the event that the
amount of the Security Deposit declines for any reason to an amount less than
the amount stated in the Basic Sublease Information, Subtenant shall, within
fifteen (15) days following written demand, deposit with Sublandlord the amount
necessary to restore the Security Deposit to the amount stated in the Basic
Sublease Information.

                           (c)         Letter of Credit.  In addition to the cash portion of the
Security Deposit, Subtenant shall deliver to Sublandlord, within ten (10)
business days after the execution of this Sublease, a Letter of Credit (defined
in subsection 4(d) below) in the amount set forth in the Basic Sublease
Information (the “LC Face Amount”) as additional security for Subtenant’s
performance of all of Subtenant’s covenants and obligations under this
Sublease.  The Letter of Credit shall be
maintained in effect from the date of its issuance through the date that is
forty-five (45) days after the expiration of the Term (the “LC Termination
Date”).  On the LC Termination Date,
Sublandlord shall return to Subtenant the Letter of Credit and any Letter of
Credit Proceeds then held by Sublandlord (other than those Letter of Credit
Proceeds Sublandlord is entitled to retain under the terms of this section 4);
provided, however, that in no event shall any such return be construed as an
admission by Sublandlord that Subtenant has performed all of its obligations
hereunder.  Upon the occurrence of an
Event of Default, Sublandlord may (but shall not be required to) draw upon the
Letter of Credit in the amounts and for the purposes set forth in subsection
4(a) above.  The amounts drawn under the
Letter of Credit are referred to herein as the “Letter of Credit
Proceeds”.  Any Letter of Credit
Proceeds which are drawn against the Letter of Credit  shall be held, pending application for the purposes permitted by
this Sublease, in the same manner as the cash portion of the Security Deposit.  In such event and upon written notice from
Sublandlord to Subtenant specifying the amount of the Letter of Credit Proceeds
so utilized by Sublandlord and the purpose for which such amount was applied,
Subtenant shall immediately deliver to Sublandlord an amendment to the Letter
of Credit or a replacement Letter of Credit so that the Letter of Credit is
again in the full LC Face Amount. 
Subtenant’s failure to deliver such an amendment or replacement Letter
of Credit to Sublandlord within fifteen (15) days of Sublandlord’s notice shall
constitute an Event of Default hereunder.

                           (d)        Form and Terms of Letter of Credit.  As used herein, Letter of Credit shall mean
an unconditional, stand-by irrevocable letter of credit (herein referred to as
the “Letter of Credit”), issued by a state or federally chartered financial
institution insured by the Federal Deposit Insurance Corporation with assets of
not less than Fifty Billion Dollars ($50,000,000,000.00) and otherwise
reasonably acceptable to Sublandlord (the “Bank”), naming Sublandlord as
beneficiary, in the amount of the LC Face Amount, substantially in the form of Exhibit
C to this Sublease, and otherwise in form and substance reasonably
satisfactory to Sublandlord.  If at any
time during the Term of this Lease, the Bank does not meet the qualifications
set forth above (notwithstanding Sublandlord’s prior approval of such
institution), then Subtenant shall, on the next renewal date of the Letter of
Credit, replace the Letter of Credit with a substitute Letter of Credit issued
by a Bank reasonably approved by Sublandlord and otherwise satisfying the
requirements of this section 4.  The
Letter of Credit shall be for a one-year term and shall provide:  (i) that Sublandlord may make partial and
multiple draws thereunder, up to the face amount thereof, (ii) that Sublandlord
may draw upon the Letter of Credit up to the full amount thereof and the Bank
will pay to Sublandlord the amount of such draw upon receipt by the Bank of a
sight draft signed by Sublandlord and accompanied by a written certification
from Sublandlord to the Bank stating either that:  (A) an Event of Default has occurred and is continuing under this
Sublease and any applicable grace period has expired or Sublandlord is
otherwise entitled to draw on the Letter of Credit, or (B) Sublandlord has not
received notice from the Bank at least thirty (30) days prior to the then
current expiry date of the Letter of Credit that the Letter of Credit will be
renewed by the Bank for at least one (1) year beyond the relevant annual
expiration date or, in the case of the last year of the Term, forty-five (45)
days after the expiration of the Term, together with a replacement Letter of
Credit or a modification to the existing Letter of Credit effectuating such
renewal, and Subtenant has not otherwise furnished Sublandlord with a
replacement Letter of Credit as hereinafter provided; and (iii) that the
beneficial interest under the Letter of Credit shall be freely transferable one
or more times and, therefore, in the event of Sublandlord’s (or any successor
Sublandlord’s) assignment or other transfer of its interest in this Sublease,
the Letter of Credit shall be freely transferable by Sublandlord (or any
successor Sublandlord), without recourse and without the payment of any fee or
consideration by Sublandlord, to the assignee or transferee of such interest
and the Bank shall confirm the same to Sublandlord (or such successor) and such
assignee or transferee.  In the event
that the Bank shall fail to (y) notify Sublandlord that the Letter of Credit
will be renewed for at least one (1) year beyond the then applicable expiration
date (or, in the case of the last year of the Term, within forty-five (45) days
of the expiration of the Term), and (z) deliver to Sublandlord a replacement
Letter of Credit or a modification to the existing Letter of Credit
effectuating such renewal, and Subtenant shall not have otherwise delivered to
Sublandlord, at least thirty (30) days prior to the relevant annual expiration
date, a replacement Letter of Credit in the amount required hereunder and otherwise
meeting the requirements set forth above, then Sublandlord shall be entitled to
draw on the Letter of Credit as provided above, and shall hold the proceeds of
such draw as Letter of Credit Proceeds which may be applied as provided in this
section 4.  Notwithstanding any of the
foregoing, in no event shall the sum of the Letter of Credit Proceeds and the
remaining balance on the Letter of Credit (or any required replacement thereof)
exceed the LC Face Amount.

                           (e)         Conversion of Portion of Cash
Security Deposit to Letter of Credit. 
If no Event of Default has occurred under this Sublease on or before
December 31, 2005, then after that date and upon Sublandlord's receipt of an
additional Letter of Credit in the face amount of $500,000.00 or an amendment to
the then existing Letter of Credit increasing the LC Face Amount thereof by an
additional $500,000.00, Sublandlord shall, within ten (10) days after receipt
of such additional Letter of Credit or amendment, refund to Subtenant
$500,000.00 from the cash portion of the Security Deposit.  If Subtenant elects to provide Sublandlord
with an additional Letter of Credit, such Letter of Credit shall conform to and
be governed by the provisions of this Sublease pertaining to the original
Letter of Credit.

             5.          Use.  Subtenant shall use the Sublease Premises
solely for the Permitted Use under the Master Lease, and for no other purpose.

             6.          Condition
of Sublease Premises.  Upon
taking possession of a Phase of the Sublease Premises, Subtenant shall be
deemed to have accepted such Phase in its existing "AS IS"
condition.  Sublandlord agrees to
deliver possession of each Phase of the Sublease Premises in its "as
is" condition, "broom clean" , with all electrical, plumbing,
HVAC and other Building systems in good operating condition, subject to
Subtenant's Improvements (defined in section 7) and the Building Modifications
(defined in section 8).  Sublandlord
shall have no liability for any Building system that is not in good operating
condition if such condition is due to any Subtenant Improvement, Building
Modification or any act or misuse by Subtenant or its agents, employees,
contractors or invitees, or for any condition of which Sublandlord is not
notified in writing within sixty (60) days after the Commencement Date.  Subtenant acknowledges that it has conducted
its own investigation of the Sublease Premises, including, without limitation,
its physical condition, compliance with laws, suitability for Subtenant's
intended purpose, and such other matters which Subtenant has determined, in its
discretion, to be necessary and appropriate to Subtenant's decision to enter
into this Sublease.  Neither Sublandlord
nor anyone acting on its behalf has made any representation or warranty concerning
the condition, operation, permitted use, legal compliance or suitability of the
Sublease Premises that is not expressly set forth in this Sublease.  Sublandlord shall have no obligation to make
any repair, alteration or modification to the Sublease Premises, except as
expressly set forth herein.

             7.          Subtenant Improvements.  Subtenant shall have the right, at Subtenant's sole expense,  to make certain Alterations to each Phase of
the Sublease Premises (the "Subtenant Improvements") during any early
access period provided under subsection 2(c) for such Phase and following the
Commencement Date of such Phase.  The
Subtenant Improvements shall be made on and subject to the terms and conditions
of the Master Lease, and shall be subject to Sublandlord's approval of the
plans and specifications therefor, and Subtenant's architect, general
contractor and subcontractors, which approvals shall not be unreasonably
withheld.  Notwithstanding the
provisions of section 9(a) of the Master Lease, Subtenant shall make no
Alteration that affects the Building structure or any Building system, or which
is visible from outside the Sublease Premises without Sublandlord's prior
written approval, which shall not be unreasonably withheld.  Prior to commencement of the Subtenant
Improvements, the Building Modifications (pursuant to section 8 below), or any
other Alteration, Subtenant shall provide Sublandlord with evidence that
Subtenant carries "Builder's All Risk" insurance in an amount
approved by Sublandlord covering the construction of such Subtenant Improvements,
Building Modifications and Alterations, and such other insurance as Sublandlord
may reasonably require.

             8.          Building
Modifications.  Subtenant
acknowledges that certain Alterations to the Building (the "Building
Modifications") are required to be made in order to separate and
separately demise Phase 1, 2 and 3 of the Sublease Premises from Phase 4,
which is the portion of the Master Premises to be retained and occupied by
Sublandlord prior to the Phase 4 Commencement Date, and to prevent the transmission
of contaminants from Phase 1, 2 and 3 of the Sublease Premises to Phase 4.  Such Building Modifications are required,
without limitation, to accommodate Subtenant's operational and infrastructure
requirements in the Sublease Premises, Sublandlord's FDA, Factory Mutual and
product quality and sterility requirements, and the parties' mutual security
requirements.  Those Alterations
constituting Building Modifications for purposes of this Sublease may include,
without limitation, demising the existing loading dock, installing demising
walls from the floors to the underside of the ceiling decks, relocating and
isolating the water, sewer, electrical and HVAC systems between Phases 1, 2 and
3 on the one hand, and Phase 4 on the other hand, and modifying the fire safety
and security systems of the Building. 
The Building Modifications are set forth in more detail in Exhibit D
to this Sublease.  All Building
Modifications shall be made in compliance with the terms of the Master Lease by
Subtenant's contractor, concurrently with the Subtenant Improvements for Phase
1, based on plans and specifications approved in writing by Sublandlord.  Sublandlord shall have the right to inspect
the Building Modification work while in progress, and to require reasonable
change orders as determined by Sublandlord to be necessary or appropriate.  All Building Modification work shall be
performed in a manner so as to minimize any disruption to the business
operations of Sublandlord and other subtenants in the Building.  Sublandlord shall have the right to adjust
the contractor's schedule to the extent reasonably necessary to minimize
disruption to Sublandlord's operations. 
Except as may be expressly set forth to the contrary in Exhibit D,
the Building Modifications shall made at Subtenant's expense.  To the extent that any cost item for the
Building Modifications is agreed by Sublandlord and Subtenant to be paid by
Sublandlord, Sublandlord shall reimburse Subtenant for such cost item within
thirty (30) days after presentation of Subtenant's paid invoice with supporting
documentation.  All Alterations made by
Subtenant shall be subject to surrender or removal by Subtenant as provided in
the Master Lease.

             9.          Assignment
and Subletting.  Subtenant shall not
mortgage, pledge, hypothecate, encumber or permit any lien to attach to this
Sublease or Subtenant's interest in the Sublease Premises.  Subtenant shall not assign this Sublease or
sublet or license all or any portion of the Sublease Premises, or permit the
occupancy or use of the Sublease Premises by any other person or entity other
than its employees and contractors during the term of their employment or
contracts with Subtenant (collectively referred to as "Transfers"),
whether voluntarily, involuntarily or by operation of law, except in compliance
with the Master Lease and with Sublandlord's prior written consent, which shall
not be unreasonably withheld. 
Sublandlord's consent shall not be required for a Transfer to an
Affiliate, as provided in section 15(d) of the Master Lease.  Whether or not Sublandlord consents to a
proposed Transfer, Subtenant shall pay Sublandlord's fees and expenses in
reviewing and responding to such proposal, including, without limitation,
reasonable fees of Sublandlord's attorneys, accountants, architects and consultants,
within fifteen (15) days after written notice from Sublandlord.  If Sublandlord consents to a Transfer,
Subtenant shall pay to Sublandlord fifty percent (50%) of any "Transfer
Premium" received by Subtenant in respect of such Transfer.  "Transfer Premium" shall mean all
rent or other consideration payable by the transferee under such Transfer which
is in excess of the Base Rent payable by Subtenant under this Sublease, for the
portion of the Sublease Premises that is applicable to such Transfer, after
deducting Subtenant's reasonable expenses for (a) brokerage commissions,
marketing costs and legal expenses for such Transfer, and (b) Alterations to
the Sublease Premises required in connection with the Transfer.  "Transfer Premium" shall also
include, but not be limited to, key money, bonus money, payment for assets or
services in excess of the fair market value thereof, or other consideration
paid by the transferee to Subtenant in connection with such Transfer.  Consent to any Transfer shall not constitute
consent to any other Transfer.

             10.        Master Lease and
Sublease Terms.  Subtenant
acknowledges that it has read and is familiar with all of the terms and
conditions of the Master Lease to the extent applicable to the Sublease
Premises.  The terms of the Master Lease
are incorporated by this reference into this Sublease, except to the extent
specifically excluded from this Sublease or modified by the terms of this
Sublease.

                           (a)         The following provisions of the Master
Lease are excluded from this Sublease or, if so indicated, modified for
purposes of this Sublease (with the entries under "Description" being
for reference purposes only):

	Excluded and/or Modified Provision	 	Description
	 	 	 
	Definitions of Effective Date, Landlord, Landlord's
  Address for Notice, Tenant, Tenant's Address for Notice, Premises, Tenant's
  Proportionate Share of Common Area Expenses, Term, Base Rent Per Month,
  Security Deposit, Letter of Credit.	 	Basic Lease Information
	 	 	 
	Section 1	 	Premises
	Section 2	 	Term
	Section 3	 	Rent
	Section 6(b)(i), second sentence	 	Common Areas; parking
	Section 11(b)(iii)	 	Environmental Provisions; Disclosure, Etc.; Assignment
  of R&H Indemnification (subject to section 10(j) below)
	Section 11(j)(ii)	 	Environmental Provisions; Liability; Landlord's
  Indemnification of Tenant
	Section 12(a)(ii)(B)	 	Damage and Destruction; Casualty; Greater than 270
  Days
	Section 12(a)(iv), after the second sentence	 	Damage and Destruction; Casualty; Total Destruction
	Section 14(a)(i) is modified to shorten the five (5)
  day period to three (3) days	 	Default; Events of Default
	Section 14(a)(iii) is modified to shorten the thirty
  (30) day period to twenty (20) days	 	Default; Events of Default
	Section 21	 	Security
	Section 33, first sentence	 	Signage
	Section 38	 	Brokerage Commission
	Section 40	 	Holding Over
	Section 45	 	Original Lease; Letter of Credit Agreement
	Exhibit D-1	 	R&H Landlord Redacted Purchase Agreement
	Exhibit D-2	 	R&H Access Agreement

                           (b)        In
the event of any conflict between the provisions of the Master Lease and the
provisions of this Sublease, the provisions of this Sublease shall
control.  In the event that a provision
of this Sublease addresses the same subject matter as a provision of the Master
Lease, the two provisions shall be read together to the maximum extent
possible, and those provisions of the Master Lease which are directly
contradicted by or excluded from this Sublease shall be controlled by the
provisions of this Sublease.  Subtenant
assumes and agrees to perform the obligations of the Tenant under the Master
Lease which are incorporated into this Sublease and applicable to the Sublease
Premises.

                           (c)         For purposes of this Sublease, the
following terms appearing in the Master Lease shall have the meanings indicated
below: (i) "Landlord" shall mean Sublandlord; (ii) "Tenant"
shall mean Subtenant; (iii) "Premises" shall mean each Phase of the
Sublease Premises from and after the Commencement Date for such Phase; (iv)
"Term" shall mean the "Term" as defined in this Sublease;
and (v) "Lease" shall mean "Sublease".  All other capitalized terms which are
defined in this Sublease and appear in the Master Lease shall have the meanings
given to such terms in this Sublease. 
References herein to "Master Landlord" shall mean the holder
of the Landlord's interest in the Master Lease.

                           (d)        Any non-liability, release, indemnity or
hold harmless provision in the Master Lease for the benefit of Master Landlord
(as landlord thereunder) shall, to the extent incorporated herein, inure to the
benefit of Sublandlord, Master Landlord and any other person intended to be
benefited by such provision.  Any
non-liability, release, indemnity or hold harmless provision in the Master
Lease for the benefit of the Tenant shall, to the extent incorporated herein,
inure to the benefit of Subtenant and any other person intended to be benefited
by such provision.  Any right of Master
Landlord under the Master Lease of access or inspection, to do work in the
Sublease Premises, or in respect of rules and regulations, shall, to the extent
incorporated herein, inure to the benefit of Sublandlord, Master Landlord and
any other person intended to be benefited by such provision.

                           (e)         All provisions of the Master Lease
requiring the consent or approval of Master Landlord shall be deemed to require
the consent or approval of Master Landlord and Sublandlord.  Any provision of this Sublease requiring the
consent or approval of Sublandlord shall also require the consent or approval
of Master Landlord to the extent such consent is a requirement under the Master
Lease.  Any act of Subtenant that, if
proposed to be undertaken by Sublandlord under the Master Lease would require
the consent or approval of Master Landlord, shall be subject to the consent or
approval of Master Landlord and Sublandlord. 
In any instance when Sublandlord's consent or approval is required under
this Sublease and such consent or approval may not be withheld or denied
unreasonably, Sublandlord's refusal to render its consent or approval shall be
deemed reasonable if, among other considerations, the consent or approval of
Master Landlord is required but has not been obtained despite Sublandlord's
request therefor.  Subtenant shall
reimburse Sublandlord, within fifteen (15) days after demand, all reasonable
costs incurred by Sublandlord in seeking the consent or approval of Master
Landlord for Subtenant's benefit.

                           (f)         All provisions of the Master Lease that
require the Tenant to submit, exhibit, supply or provide documents,
instruments, certificates, financial statements, evidence, information or other
items shall be deemed to require Subtenant to furnish such items to Master
Landlord and Sublandlord.  Sublandlord
shall determine the sufficiency of the items so furnished and shall be deemed
to have acted reasonably if the items so furnished are determined to be
insufficient by Master Landlord.

                           (g)        Sublandlord shall have no obligation to
restore, repair or rebuild the Sublease Premises or any portion thereof, or to
apply any insurance proceeds or condemnation awards it might receive, after any
casualty damage or taking by eminent domain other than those duties of
Sublandlord, as Tenant, set forth in the Master Lease.  To the extent that Sublandlord is granted
the right, under the Master Lease, to terminate the Master Lease following the
occurrence of a casualty to the Sublease Premises, under section 12 of the
Master Lease, or a condemnation, under section 13 of the Master Lease,
Sublandlord agrees not to exercise such right of termination without the prior
written consent of Subtenant, which shall not be unreasonably withheld or
delayed so long as Sublandlord occupies any portion of the Building, provided
that Sublandlord shall not be required to expend any monies to restore or
repair the Sublease Premises, to apply any insurance proceeds payable to
Sublandlord, to extend the Term of the Master Lease or otherwise increase its
obligations under the Master Lease beyond those in effect through the Term of
this Sublease.  Except as provided
above, exercise of any such termination right by Sublandlord shall not
constitute a breach or default by Sublandlord under this Sublease.  Subtenant shall have the right to terminate
this Sublease following any such casualty or condemnation only to the extent
that Sublandlord has the right to terminate the Master Lease.

                           (h)        All provisions of the Master Lease
requiring the Tenant to designate the Master Landlord as an additional insured
on its insurance policy(ies), shall require Subtenant to so designate Master
Landlord, Sublandlord and any other person or entity having an insurable
interest in the Sublease Premises, as determined and required by Master
Landlord, on its insurance policy(ies). 
In addition, Subtenant shall (i) 
include in its insurance policies a requirement of its insurer to notify
Sublandlord in writing not less than thirty (30) days prior to any material
change, reduction in coverage, cancellation or other termination of any such
policy, and (ii) concurrently with the execution of this Sublease, deliver to
Sublandlord a certificate of insurance signed by Subtenant’s insurance
company.  Insurance required to be
maintained by Master Landlord under the Master Lease shall continue to be
maintained by Master Landlord, notwithstanding anything to the contrary
contained in this Sublease.

                           (i)          Any provision of the Master Lease
which provides for an abatement of Rent shall apply proportionately to
Subtenant under the Sublease Premises only to the extent that the Sublease
Premises is affected by the condition that gives rise to such abatement and
Sublandlord receives such abatement from Master Landlord.

                           (j)          To the maximum extent permitted by law
and the R&H Indemnity described in section 11(b)(iii) of the Master Lease,
Sublandlord will assign, and will exercise commercially reasonable efforts to
provide the benefit of, the R&H Indemnity to Subtenant; provided, however,
in no event shall Sublandlord have any direct or indirect obligation or
responsibility arising under or with respect to the R&H Indemnity or any
agreement of which it is a part or to which it relates.

                           (k)         Sublandlord agrees, during the Term of
this Sublease, not to exercise any right or option to extend the term of the
Master Lease, expand the Master Premises, or purchase the Building or Real
Property, which Sublandlord may hold under the Master Lease, in the event that
such rights or options exist under the Master Lease.

             11.        Compliance with Master Lease.

                           (a)         During the Term and for all periods
thereafter with respect to obligations which arise prior to the termination of
this Sublease, Subtenant shall perform and comply with, for the benefit of
Sublandlord and Master Landlord, the obligations of Tenant under the Master
Lease which pertain to the Sublease Premises and/or this Sublease.  Without limiting the generality of the
foregoing statement, Subtenant shall occupy and use the Sublease Premises in
compliance with the terms of the Master Lease applicable to the Sublease
Premises, and will not do or permit any act or omission which may result in a
violation of or a default under any of the terms and conditions of the Master
Lease, or render Sublandlord liable for any damage, charge, lien, penalty or
expense thereunder.  To the extent that
Subtenant makes any payment of Rent or performs any of its obligations hereunder
directly to or for Master Landlord, Subtenant shall deliver to Sublandlord a
copy of any such payments and such evidence that such other obligations have
been performed as Sublandlord may reasonably request from time to time. If
Subtenant fails to pay any amount or perform any other obligations required to
be paid or performed by Subtenant under this Sublease, after notice and the
expiration of any applicable cure period, Sublandlord may make such payment or
perform such obligation, in which case Subtenant shall, on Sublandlord’s
demand, reimburse Sublandlord for all reasonable costs and expenses actually
incurred by Sublandlord.

                           (b)        Subtenant agrees that Sublandlord shall
not be required to perform any of the obligations, agreements or undertakings
of Master Landlord under the Master Lease. 
Insofar as any of the obligations, agreements or undertakings of
Sublandlord under this Sublease are required to be performed under the Master
Lease by Master Landlord, Sublandlord, upon Subtenant's written request, shall
use reasonable efforts to seek and obtain such performance thereof but shall
otherwise have no duty, obligation or liability with respect to the failure of
Master Landlord to do so.  This Sublease
shall remain in full force and effect notwithstanding Master Landlord’s failure
or refusal to comply with any such obligations, agreements or
undertakings.  At Subtenant's request,
Sublandlord shall assign to Subtenant any cause of action Sublandlord may have
against Master Landlord as a result of Master Landlord's breach or default
under the Master Lease which has caused damage to Subtenant, to the extent such
assignment does not impair Sublandlord's right to pursue any claims it may have
against Master Landlord for damages that Sublandlord may have incurred.  Alternatively, at Sublandlord's election
following Subtenant's request, Sublandlord consents to be named as a plaintiff
in any action or proceeding that Subtenant may elect to bring against Master
Landlord as a result of Master Landlord's breach or default under the Master
Lease which has caused damage to Subtenant, to the extent such action or
proceeding does not impair Sublandlord's right to pursue any claims it may have
against Master Landlord for damages that Sublandlord may have incurred.  Subtenant shall indemnify and, at
Sublandlord's request and with counsel approved by Sublandlord, defend
Sublandlord and its parents, subsidiaries and affiliates, now or hereafter
existing, and their respective officers, directors, shareholders, partners,
members, representatives, managers, employees, agents, successors and assigns
from and against all losses, costs, damages, expenses and liabilities,
including, without limitation, reasonable attorneys' fees and costs
(collectively, "Liabilities"), which any such indemnified person or
entity may incur or pay out by reason of any such assignment by Landlord, or by
Sublandlord being named as a party in such action or proceeding, or as a result
of any cross-complaint brought against any such indemnified party in such action
or proceeding; provided, however, that such indemnity shall not apply to
Liabilities suffered or incurred as a result of an Event of Default by
Sublandlord under the Master Lease, or the tortious conduct of any such
indemnified party, to the extent such Liabilities are not caused by or the
result of any act or omission of Subtenant. 
Without limiting the foregoing, Subtenant shall reimburse Sublandlord,
within fifteen (15) days after demand, all reasonable costs incurred by
Sublandlord in seeking and obtaining Master Landlord's performance under the
Master Lease for the benefit of Subtenant.

                           (c)         Each party agrees to promptly deliver
to the other party a copy of all notices received by such party with respect to
the Sublease Premises from Master Landlord or any governmental agency.

             12.        Subordination to Master Lease.  This Sublease is, and shall at all times be,
subject and subordinate to the Master Lease. 
This Sublease shall also be subject to any amendments, modifications or
supplements to the Master Lease hereafter made, and Subtenant accepts this
Sublease subject to any such amendments, modifications or supplements to the
Master Lease hereafter made, provided that Sublandlord shall not enter into any
amendment, modification or supplement, without Subtenant’s prior written
consent that would prevent or adversely affect the use by Subtenant of the
Sublease Premises in accordance with the terms hereof, increase the obligations
of Subtenant or decrease its rights hereunder, shorten or lengthen the Term hereof
or increase the Rent required to be paid by Subtenant hereunder.  Nothing herein shall be construed to grant
Subtenant any greater rights in and to the Sublease Premises than Sublandlord
holds in the Sublease Premises under the Master Lease.  If the Master Lease terminates, this
Sublease shall terminate and the parties shall be relieved of any further
liability or obligation under this Sublease, excluding those which accrued
prior to such termination and those which by their terms survive the termination
of this Sublease; provided, however, that if the Master Lease terminates as a
result of an Event of Default by Subtenant under this Sublease, then Subtenant
shall be liable to Sublandlord for all damages suffered as a result of such
termination, and if the Master Lease terminates solely as a result of an Event
of Default by Sublandlord under the Master Lease (and no Event of Default by
Subtenant under this Sublease exists), then Sublandlord shall be liable to
Subtenant for all damages suffered as a result of such termination.  In no event shall either party be liable to
the other for indirect or consequential damages, including, without limitation,
loss of profits or loss of business opportunities as a result thereof.   Sublandlord shall have no liability to
Subtenant for any failure of Master Landlord to apply insurance proceeds or any
condemnation award toward the repair or restoration of the Sublease Premises or
the Building.

             13.        Indemnity.  In addition to the indemnifications provided
by Subtenant to Sublandlord under the provisions of the Master Lease
incorporated herein, Subtenant indemnifies and agrees to defend and hold
harmless Sublandlord and its parents, subsidiaries and affiliates, now or
hereafter existing, and their respective officers, directors, shareholders,
partners, members, representatives, managers, employees, agents, successors and
assigns from and against all losses, costs, damages, expenses and liabilities,
including, without limitation, reasonable attorneys' fees and costs, which any
such indemnified person or entity may incur or pay out by reason of
(a) any personal injury, death or property damage occurring in, on or
about the Sublease Premises to the extent caused by or resulting from the
negligence or willful misconduct of Subtenant or its agents, employees,
contractors or invitees; (b) any act or omission of Subtenant which results in
a breach or default by Sublandlord under the Master Lease; (c) the conduct of
Subtenant's business at the Premises, or (d) any failure by Subtenant to
surrender the Sublease Premises on the Expiration Date or earlier termination
of this Sublease in the condition required by this Sublease.  The foregoing indemnity, defense and hold
harmless obligation shall survive the expiration or sooner termination of this
Sublease and the surrender of the Sublease Premises to Sublandlord.

             14.        Right of Entry.  Supplementing and subject to the provisions
of section 19 of the Master Lease, incorporated herein, Sublandlord's right of
entry includes the right to enter the Sublease Premises to (a) perform any
work or provide any service required of Sublandlord, (b) perform any covenant
which Subtenant fails to perform within a reasonable time period after written
notice, which period shall not exceed thirty (30) days, (c) post any notices of
non-responsibility, or (d) to make any repairs, alterations or improvements to
the Building, the Building's systems or its equipment to the extent reasonably
required for Sublandlord's use and occupancy of Phase 4.  Sublandlord's entry into the Sublease
Premises shall be without abatement of Rent and shall not constitute a forcible
entry into or  detainer of the Sublease
Premises, or a constructive eviction of Subtenant.  Subtenant waives all claims for damages or for any injuries or
inconvenience to or interference with Subtenant's business, lost profits, any
loss of occupancy or quiet enjoyment and any other loss occasioned thereby,
except claims for actual damages directly resulting from the gross negligence
or willful misconduct of Sublandlord or its contractors.  In an emergency, Sublandlord shall have the
right to use any means that Sublandlord may deem proper to gain access to the
Sublease Premises.

             15.        Holding Over. 
If Subtenant remains in possession of all or any portion of the Sublease
Premises at the Expiration Date or sooner termination of this Sublease, with or
without the express or implied consent of Sublandlord, such possession shall
constitute a tenancy at sufferance only, and shall not constitute a renewal
hereof or an extension for any further term. 
In such case, the Base Rent shall be payable at a per diem rate for each
day that Subtenant remains in possession of the Sublease Premises at the
greater of (a) 150% of the per diem Base Rent for the last month of the Term or
(b) the then current market rent for the Sublease Premises, as determined by
Sublandlord.  Such tenancy shall be
subject to all of the terms and conditions of this Sublease, including, without
limitation, the payment of Additional Rent. 
A holding over by Subtenant shall include, without limitation,
Subtenant's failure to surrender possession of the Sublease Premises in the
condition required by this Sublease, for the period reasonably required by
Sublandlord, or determined by Master Landlord, to remove all of Subtenant's
property from the Sublease Premises, to remove any Alterations required to be
removed by Subtenant under this Sublease, to repair any damage to the Sublease
Premises, and otherwise to put the Sublease Premises in the condition required
for surrender under this Sublease.  In
addition to payment of the Base Rent (as adjusted) and Additional Rent during
the period of Subtenant's holding over, Subtenant shall reimburse Sublandlord
on demand for the all additional sums, in excess of the Base Rent (as adjusted)
and Additional Rent as provided above, for which Sublandlord becomes liable to
Master Landlord under the Master Lease resulting from Subtenant's holding
over.  The rights set forth in this section
15 are in addition to all other rights and remedies available to Sublandlord
under this Sublease or at law or in equity.

             16.        Conditions to Sublease. The
effectiveness of this Sublease and the rights, duties, and obligations of
Sublandlord and Subtenant hereunder are expressly subject to and conditioned
upon (a) Sublandlord obtaining (i) the prior written consent of Master Landlord
to this Sublease, in form and content reasonably acceptable to Sublandlord and
Subtenant, and (ii) agreements, in form and content reasonably acceptable to
Sublandlord, terminating the subleases for portions of the Sublease Premises
held by Corio, Inc. and Kana Communications, Inc., and (b) Subtenant executing
a lease, in form and content reasonably acceptable to Subtenant, for the
premises located at 740 Bay Road, Redwood City, California.  Sublandlord shall use commercially
reasonable efforts to obtain Master Landlord’s consent to this Sublease and
such termination agreements, but in no event shall Sublandlord be required to pay
any money or other consideration or engage in any litigation to secure such
consent or approval.  If Sublandlord is
unable to obtain the consent of Master Landlord to this Sublease, or to obtain
such termination agreements, or if Subtenant is unable to execute such lease,
by July 16, 2001, Sublandlord or Subtenant may terminate this Sublease by
delivering notice thereof to the other party, in which case all payments of
advance Base Rent and Security Deposit made by Subtenant under this Sublease
shall be promptly returned to Subtenant and no party shall have any further
obligations or liabilities under this Sublease. Subtenant shall cooperate with
Sublandlord in connection with Sublandlord’s efforts to obtain Master
Landlord’s consent to this Sublease, including, without limitation, by providing
such documents or information concerning Subtenant as Landlord may request in
connection with the request.

             17.        Brokers.  Sublandlord and Subtenant hereby represent
and warrant to the other that they have had no dealings with any broker,
finder, or similar person who is or might be entitled to a commission or other
fee in connection with introducing Subtenant to the Premises or in connection
with this Sublease, except for the Brokers identified in the Basic Sublease
Information, and that they know of no other person or entity who is entitled to
any compensation in connection with this Sublease.  Sublandlord and Subtenant shall indemnify, defend, protect and
hold harmless the other from and against any and all loss, cost, liability,
damage, or expense (including, without limitation, attorneys’ fees and costs)
incurred by the other as a result of any claim for a commission or fee by any
person (other than the Brokers) who claims to have dealt with the indemnifying
party in connection with this Sublease.

             18.        Representations.

                           (a)         By Subtenant.  Subtenant represents and warrants to
Sublandlord as follows:  Subtenant is
duly organized and validly existing as a corporation under the laws of the
State of Delaware; is qualified to transact business in the State of
California; has all lawful power and authority to enter into this Sublease and
perform the obligations on its part to be performed by Subtenant; and the
execution, delivery and performance of this Sublease by Subtenant has been
authorized by all necessary corporate action. 
When executed and delivered by Subtenant and Sublandlord, this Sublease
shall be binding and enforceable against Subtenant in accordance with its
terms, subject only to the satisfaction of the conditions precedent set forth
herein, and the application of equitable principles or bankruptcy rules and
regulations which may limit certain rights or remedies of the parties under
certain circumstances.  No consent,
approval, permit or authorization of any person, entity or governmental agency
is required as a condition to the validity or enforceability of this Sublease
in accordance with its terms.  No
litigation, arbitration or other adversarial or governmental proceeding is
pending or, to Subtenant's knowledge, threatened which could impair the
enforceability of this Sublease against Subtenant, or terminate the Master
Lease or Subtenant's interest in the Sublease Premises.  There has not been filed by or
against Subtenant a petition in bankruptcy, voluntary or otherwise, any
assignment for the benefit of creditors, any petition seeking reorganization or
arrangement under the bankruptcy laws of the United States or any state
thereof, or any other action brought pursuant to such bankruptcy laws with
respect to Subtenant.

                           (b)        By Sublandlord.  Sublandlord
represents and warrants to Subtenant as follows:  Sublandlord is duly organized and validly existing as a
corporation under the laws of the State of Delaware; is qualified to transact
business in the State of California; has all lawful power and authority to
enter into this Sublease and perform the obligations on its part to be
performed by Sublandlord; and the execution, delivery and performance of this
Sublease by Sublandlord has been authorized by all necessary corporate action.  When executed and delivered by Subtenant and
Sublandlord, this Sublease shall be binding and enforceable against Subtenant
in accordance with its terms, subject only to the satisfaction of the
conditions precedent set forth herein, and the application of equitable principles
or bankruptcy rules and regulations which may limit certain rights or remedies
of the parties under certain circumstances. 
No consent, approval, permit or authorization of any person, entity or
governmental agency is required as a condition to the validity or
enforceability of this Sublease in accordance with its terms.  No litigation, arbitration or other
adversarial or governmental proceeding is pending or, to Sublandlord's
knowledge, threatened which could impair the enforceability of this Sublease
against Sublandlord, or terminate the Master Lease or Sublandlord's interest in
the Sublease Premises.  There has not been filed by or against
Sublandlord a petition in bankruptcy, voluntary or otherwise, any assignment
for the benefit of creditors, any petition seeking reorganization or
arrangement under the bankruptcy laws of the United States or any state
thereof, or any other action brought pursuant to such bankruptcy laws with
respect to Sublandlord.

             19.        Waiver
of Redemption.  Subtenant hereby
waives, for itself and all others claiming under Subtenant, any and all rights,
now or hereafter existing, of redemption or relief from forfeiture following
the termination of this Sublease.

             20.        Waiver of Jury Trial.  SUBLANDLORD AND SUBTENANT HEREBY CONSENT TO
(1) THE JURISDICTION OF ANY COMPETENT COURT WITHIN THE STATE OF CALIFORNIA, (2)
SERVICE OF PROCESS BY ANY MEANS AUTHORIZED BY CALIFORNIA LAW, AND (3) IN THE
INTEREST OF SAVING TIME AND EXPENSE, TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR THEIR
SUCCESSORS, IN EACH CASE, IN RESPECT OF ANY MATTER ARISING OUT OF OR IN
CONNECTION WITH THIS SUBLEASE, THE RELATIONSHIP OF LANDLORD AND TENANT BETWEEN
THE PARTIES, SUBTENANT'S USE OR OCCUPANCY OF THE SUBLEASE PREMISES, AND/OR ANY
CLAIM FOR INJURY OR DAMAGE, OR ANY EMERGENCY OR STATUTORY REMEDY.

             21.        Notices.  All notices given under this Sublease shall
be in writing and shall be given in the manner and with the effect stated in
section 37 of the Master Lease.  If sent
to Sublandlord, such notices shall be addressed to Sublandlord's Address, and
if sent to Subtenant, such notices shall be addressed to Subtenant's Address,
as specified in the Basic Sublease Information.  Either party may change the address to which notices to such
party may be sent; provided, however, that in the event any notice sent to
Subtenant at the address provided by Subtenant is returned as undeliverable or
delivery refused, then such notice to Subtenant shall be effective if delivered
to the Sublease Premises.

             22.        Miscellaneous.

                           (a)         In the event of any action or
proceeding between the parties arising out of or relating to the provisions of
this Sublease, the prevailing party in such action or proceeding shall be
entitled to recover its reasonable attorneys’ and court fees and costs.

                           (b)        Except as set forth in section 10(a),
the time limits set forth in the Master Lease for the giving of notices, making
of demands, performance of any act, condition or covenant, or the exercise of
any right, remedy or option, to the extent such portions of the Master Lease
are incorporated by reference herein, are changed for the purpose of this
Sublease, by lengthening or shortening the same in each instance by five (5)
days, as appropriate, so that notices may be given, demands made, or any act,
condition or covenant performed, or any right, remedy or option hereunder
exercised, by Sublandlord or Subtenant, as the case may be, within the time
limits relating thereto contained in the Master Lease.

                           (c)         This Sublease may be executed in
counterparts, all of which taken together shall constitute one agreement.  A facsimile signature of a party to this
Sublease shall be effective as the original signature of such party.  Any party who executes this Sublease by
facsimile signature shall cause the original thereof to be delivered to the
other party by overnight courier service. 
All exhibits attached to this Sublease are incorporated herein by this
reference.

                           (d)        If any provision of this Sublease shall
prove to be invalid or unenforceable, such provision shall be deemed modified
to the minimum extent necessary to render it valid and enforceable, and if not
susceptible to such modification, such provision shall be stricken from this
Sublease.  In no event shall any such
provision affect, impair or invalidate any other provision of this Sublease,
and such other provisions shall remain in full force and effect.

                           (e)         This Sublease constitutes the entire
agreement regarding the transaction covered hereby, and supersedes all prior
discussions, negotiations, memoranda and understandings concerning the
same.  This Sublease may not be
supplemented, modified, or amended except by an agreement in writing signed by
the parties hereto or their respective successors in interest.

                           (f)         Sublandlord and Subtenant agree that at
any time or from time to time after the execution of this Sublease they shall,
upon request of each other, execute and deliver such further documents and do
such further acts and things as such party may reasonably request in order to
fully effect the purpose of this Sublease.

                           (g)        There are no third party beneficiaries
of this Sublease.

                           (h)        The captions and headings used in this
Sublease are provided for convenience of reference only and shall not affect
the meaning or interpretation of any provision of this Sublease.

                           (i)          Subtenant shall not record this
Sublease or any memorandum, affidavit or other writing hereof.      

             The
parties have caused this Sublease to be executed and delivered by their
respective duly authorized officers, effective as of the Effective Date
specified above, subject to satisfaction of the conditions precedent set forth
in section 16 above.

	SUBLANDLORD:	 	SUBTENANT:
	 	 	 
	HEARTPORT, INC., a Delaware corporation    	 	DELTAGEN, INC., a Delaware corporation    
	 	 	 
	By:	 	By:
	 	

	 	 	

	 
	Name:	 	Name:
	 	

	 	 	

	Title:	 	Title:
	 	

	 	 	

								

EXHIBIT A

SUBLEASE PREMISES FLOOR PLAN

EXHIBIT B

MASTER LEASE (REDACTED)

EXHIBIT C

FORM OF LETTER OF CREDIT

[BANK NAME/ADDRESS]

IRREVOCABLE STANDBY
LETTER OF CREDIT:  #

DATE OF ISSUE:

DATE OF EXPIRY:

PLACE OF EXPIRY: AT OUR COUNTERS IN __________, CALIFORNIA

APPLICANT:                DELTAGEN, INC.

                                        740
BAY ROAD

                                        REDWOOD
CITY, CA 94063

BENEFICIARY:            HEARTPORT, INC.

                                        C/O
ETHICON, INC.

                                        U.S.
ROUTE 22 WEST

                                        SOMERVILLE,
NJ 08876

AMOUNT:                    USD                                

                                        (                                                                                            U.S.
DOLLARS)

GENTLEMEN:

WE HEREBY ESTABLISH
IN YOUR FAVOR OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. _______________, FOR
THE ACCOUNT OF DELTAGEN, INC., UP TO THE AGGREGATE AMOUNT OF USD                               AVAILABLE BY
PAYMENT AGAINST BENEFICIARY'S DRAFT(S) AT SIGHT DRAWN ON [BANK NAME],
[LOCATION] ACCOMPANIED BY THE FOLLOWING DOCUMENTS:

(A)       ORIGINAL OF THIS CREDIT AND AMENDMENTS,
IF ANY, FOR OUR ENDORSEMENT THEREON OF THE AMOUNT OF SUCH DRAFT.

(B)        BENEFICIARY'S WRITTEN STATEMENT, ON
BENEFICIARY'S LETTERHEAD, MANUALLY SIGNED AND DATED BY BENEFICIARY'S OFFICER OR
DULY AUTHORIZED AGENT, CERTIFYING THAT (I) AN EVENT OF DEFAULT HAS OCCURRED
UNDER THE TERMS OF THE SUBLEASE, DATED JULY 10, 2001, BETWEEN BENEFICIARY, AS
SUBLANDLORD, AND DELTAGEN, INC., AS SUBTENANT, AND HAS NOT BEEN CURED WITHIN
THE CURE PERIOD PROVIDED THEREFOR UNDER THE SUBLEASE, IF ANY, OR (II)
BENEFICIARY IS OTHERWISE ENTITLED TO DRAW ON THIS LETTER OF CREDIT UNDER THE
TERMS OF THE SUBLEASE, AND IN EITHER CASE (III) THE AMOUNT OF THE DRAFT
ACCOMPANYING SUCH STATEMENT IS DUE AND PAYABLE TO BENEFICIARY UNDER THE TERMS
OF THE SUBLEASE.

PARTIAL AND
MULTIPLE DRAWS ARE PERMITTED.

THIS LETTER OF CREDIT IS TRANSFERABLE TO AND IN ACCORDANCE WITH THE TERMS OF A
WRITTEN STATEMENT, EXECUTED BY BENEFICIARY, SUBSTANTIALLY IN THE FORM OF
EXHIBIT 1 ATTACHED HERETO, UPON OUR RECEIPT OF SUCH STATEMENT.

THIS LETTER OF
CREDIT SHALL BE AUTOMATICALLY RENEWED WITHOUT ANY AMENDMENT FOR A PERIOD OF ONE
YEAR FROM THE PRESENT OR EACH FUTURE SUCCESSIVE EXPIRATION DATE UNLESS AT LEAST
THIRTY (30) DAYS PRIOR TO SUCH DATE WE NOTIFY YOU AND APPLICANT BY OVERNIGHT
MAIL OR PERSONAL DELIVERY OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED THAT WE
ELECT NOT TO RENEW THIS LETTER OF CREDIT FOR ANY ADDITIONAL PERIOD, IN WHICH
EVENT BENEFICIARY SHALL BE ENTITLED TO DRAW BY SIGHT DRAFT ALONE THE FULL
AMOUNT OF THIS LETTER OF CREDIT.

DOCUMENTS MUST BE
SENT TO US VIA OVERNIGHT COURIER OR PERSONAL DELIVERY AT OUR ADDRESS:

WE HEREBY ENGAGE
WITH DRAWERS AND/OR BONA FIDE HOLDERS THAT DRAFTS DRAWN UNDER AND IN
CONFORMANCE WITH THE TERMS AND CONDITIONS OF THIS CREDIT WILL BE DULY HONORED
ON PRESENTATION AT OUR COUNTERS IN               , CALIFORNIA.

DRAFT(S) MUST
INDICATE THE NUMBER AND DATE OF THIS CREDIT.

THIS CREDIT IS SUBJECT
TO THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION),
INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NUMBER 500, AND ENGAGES US IN
ACCORDANCE WITH THE TERMS THEREOF.

	 	 	 	 	 	 	

	 	 	 
	 	 	 	 	 	 	AUTHORIZED SIGNATURE	 	 	 

 

Exhibit 1 to Letter of Credit

Date:

	To:	[Bank Name/Address]
	 	 
	Re:	Standby Letter of Credit No.	 	 
	 	 	

	 
	 	Issued by [Bank Name]	 	 
	 	Letter of Credit Amount:	$	 	 
	 	  	

	 
					

Gentlemen:

For value received,
the undersigned Beneficiary of the above referenced Letter of Credit hereby
irrevocably transfers all rights of Beneficiary to draw under the Letter of
Credit up to its available amount existing as of the date of this transfer to
the following Transferee:

	Name of Transferee:	 
	 	

	Address:	 
	 	

	 	

	 	

By this transfer,
all rights of the Beneficiary in such Letter of Credit are transferred to the
Transferee.  From and after the date of
this letter, the Transferee shall have the sole rights as the Beneficiary under
the Letter of Credit, including, without limitation, rights relating to draws
against and amendments, if any, to the Letter of Credit.  All amendments are to be advised directly to
the Transferee without necessity of any consent of or notice to the undersigned
Beneficiary.

Accompanying this
letter is the original of the Letter of Credit.  You are authorized to endorse the transfer on the Letter of
Credit and forward it direct to the Transferee with your customary notice of
transfer.  Please forward to us a copy
of the notice of transfer to confirm your compliance with these instructions.

Sincerely,

HEARTPORT, INC.

	By:	 	[signature guaranty]
	 	

	 	 
	Name:	 	 
	 	

	 	 
	Title:	 	 
	 	

	 	 

EXHIBIT D

SUBTENANT IMPROVEMENTS

AND

BUILDING MODIFICATIONS

(A)       Initial
Subtenant Improvements:

             Following
is a partial list of the Subtenant Improvements.  Subtenant shall complete the construction and installation of the
following Subtenant Improvements, at Subtenant's expense, prior to introducing
laboratory animals to the Sublease Premises (but not as a condition to
Sublandlord's ability to tender possession of the Phase 1, 2 and 3 portions of
the Sublease Premises).  Subtenant
acknowledges that the following Subtenant Improvements and the Building
Improvements described below are important to Sublandlord's operations in the
Phase 4 Sublease Premises in order to maintain adequate isolation of
Sublandlord’s operations from potential contaminants that may emanate from
Subtenant’s animal facility in Phases 1, 2 and 3.

             1.          Subtenant will provide containment in
its cage wash area to prevent effluent based contaminant infiltration to the
Phase 4 Sublease Premises.

             2.          Subtenant will install separate air
handling units and related ductwork for its air system to prevent airborne
contaminant infiltration to the Phase 4 Sublease Premises.

             3.          Subtenant will install double backflow
prevention on the water system, and separate its domestic water lines from
those serving the Phase 4 Sublease Premises.

             4.          Subtenant will cause its waste water
disposal lines to be separated from the waste water disposal system serving the
Phase 4 Sublease Premises until outside the Building.

             The
foregoing list does not address operational requirements of Subtenant.  Any additional utility requirements
(including, without limitation, electric, gas, water and sewer) of Subtenant
which is in excess of the current capacity of the Building applicable to the
Sublease Premises must be identified and addressed by Subtenant, at Subtenant's
expense.

(B)        Building
Modifications.

             The
following Building Modifications shall be made by Subtenant, at Subtenant's
expense, except as otherwise provided below, to isolate Sublandlord’s
manufacturing operation in the Phase 4 Sublease Premises from Subtenant’s
animal facilities.

             (1)         Initial Demising Work.  The initial demising work described below shall
be performed prior to date indicated for each element of the demising work.

                           (a)         First Floor Demising Wall.  Prior to commencement of demolition and
construction of the Subtenant Improvements to the interior of the Phase 1, 2
and 3 portions of the Sublease Premises, and in all events prior to the
introduction of laboratory animals to the Sublease Premises, Subtenant shall
construct on the first floor of the Building a demising wall separating the
Phase 1, 2 and 3 Sublease Premises from the Phase 4 Sublease Premises.  Such demising wall shall consist of full
height parallel partitions from floor to underside of overhead deck, separated
by an air cavity which shall be operated at an air pressure which is less than
that of the air pressure on each the opposing sides of the cavity.  Each of the parallel partitions shall be
completely sealed to prevent air leakage, and contain magnahelic air pressure
gauges with alert monitoring for verifying proper air pressure in the air
cavity.  The parallel partitions shall
be separated by enough space (approx. 24”) to allow for maintenance personnel
to verify the integrity of the air cavity. 
The air system servicing the air cavity between the parallel partitions
shall be supported by Subtenant’s emergency back-up power, such that in the
event of power loss, the air cavity shall remain at an air pressure less than
that of the Phase 4 Sublease Premises. 
Any electrical conduits or other penetrations between the parallel
partitions that pass from/to the Phase 1, 2 and 3 Sublease Premises to/from the
Phase 4 Sublease Premises shall be sealed at the junction box or other point of
penetration.

                           (b)        Second Floor Demising Wall.  On or before October 15, 2001, Subtenant
shall construct on the second floor of the Sublease Premises a demising wall
separating the Phase 1, 2 and 3 portion of the Sublease Premises from the Phase
4 Sublease Premises on the second floor. 
Such demising wall shall consist of standard office partition walls from
floor to ceiling.  In demising the
second floor office space, the contractor shall relocate lighting, switches,
electrical outlets, HVAC, fire sprinkler and related Building Systems as
necessary to provide electrical service, balanced HVAC and life safety systems
to the Phase 4 Sublease Premises.

                           (c)         HVAC System. Prior to the
introduction of laboratory animals to the Phase 1 (but not as a condition to
Sublandlord's ability to tender possession of the Phase 1, 2 and 3 portions of
the Sublease Premises), 2 or 3 portions of the Sublease Premises, the ventilation
ductwork serving Sublandlord’s clean room 
on the first floor of  the Phase
4 Sublease Premises shall be isolated, headed-off, sealed and relocated as not
to traverse through the Phase 1, 2 and 3 Sublease Premises on the first floor.

                           (d)        Loading Dock.  Prior to the introduction of laboratory
animals to the Phase 1, 2 or 3 portions of the Sublease Premises (but not as a
condition to Sublandlord's ability to tender possession of the Phase 1, 2 and 3
portions of the Sublease Premises), Subtenant shall construct (i) a demising
wall dividing the loading dock into two approximately equal portions, (ii)
floor to ceiling partition walls, with an enclosure and door, enclosing the
loading dock serving the Phase 4 Sublease Premises, thus forming an airlock for
shipping and receiving on the loading dock for the Phase 4 Sublease Premises,
and (iii) if requested by Sublandlord, additional, reasonable lighting within
such loading dock enclosure.

             The
initial demising work described above will be performed by Subtenant’s
designated engineer and contractor, and coordinated with Subtenant’s
construction of the Subtenant Improvements or other Alterations required by
Subtenant, thus minimizing the issues of multiple engineers and contractors on
site.  The engineering and construction
shall be subject to review and approval by Sublandlord.  The cost of the initial demising work
described above will be equally shared by Subtenant and Sublandlord, with
Sublandlord’s total expenditure for the initial demising work not to exceed a
maximum of $200,000.

             (2)         Potential Additional Demising Work.  For the purposes of assessing whether
exhaust contaminants from the HVAC system serving the Phase 1, 2 and 3 Sublease
Premises can migrate to the HVAC air intake system serving the Phase 4 Sublease
Premises, thereby affecting Sublandlord's sterile operations, Sublandlord
agrees to conduct and commission at its own expense a wind-wake analysis.  The study will be conducted by Sublandlord’s
designated engineer and reviewed by Subtenant’s engineer.  Should the outcome of the study indicate
that there is no impact of Subtenant’s exhaust on Sublandlord’s sterile
operations, then no additional demising work shall be required.  If on the other hand, the wind-wake study
indicates that there may be an impact to Sublandlord’s sterile operations, then
Sublandlord and Subtenant agree that additional demising to Subtenant’s air
exhaust system may be required. 
Sublandlord’s engineer will recommend the additional demising
requirements, and Subtenant’s engineer and contractor shall perform the
work.  Sublandlord and Subtenant will
equally share the cost of the additional demising work, provided that such
demising work is not or will not be otherwise required of Subtenant to comply
with applicable law with respect to Subtenant's use of the Sublease Premises or
in connection with Subtenant's Alterations to the Sublease Premises.  If such work is otherwise required by
applicable law, then it shall be performed at Subtenant's expense.

             (3)         Additional Provisions.

                           (a)         During the course of construction of
the initial demising work described above, Subtenant will cause its contractors
to install temporary partitions, air filtration systems, and take other steps
to prevent the transmission of airborne contaminants, debris, and excessive
noise into the portions of the Building currently occupied by Sublandlord, and
to provide security for Phase 4.  Such
procedures shall continue to be employed after Sublandlord relocates to the
Phase 4 portion of the Sublease Premises until completion of the above demising
work.

                           (b)        All initial and additional demising work
shall be done in accordance with specifications provided by Sublandlord and
pursuant to plans prepared by Subtenant's architect.  Following completion of all demising engineering and construction
in accordance with the plans and specifications therefor, Subtenant shall
assign to Sublandlord all warranties obtained from its architect, engineers and
contractors for such work.

                           (c)         All construction activities by Subtenant
that could affect Sublandlord's business and operations in the Sublease
Premises must be coordinated and scheduled in advance to minimize the impact to
Sublandlord's operations.

                           (d)        All Subtenant Improvements and Building
Modifications shall be done using new materials of a quality and grade
consistent with the existing improvements in the Building.  The surfaces of the first and second floor
demising walls on the interior of the Phase 4 Premises shall be painted to
match the painted surfaces of the existing walls within Phase 4.

                           (e)         Prior to commencing construction of the
Building Modifications, Subtenant shall provide to Sublandlord a detailed, line
item budget showing all costs anticipated to be incurred.  Such budget and cost management during the
course of construction shall be maintained separate from the budget and costs
associated with the Subtenant Improvements. 
Sublandlord shall have the right to review the books, records, invoices
and related documentation pertaining to the Building Modifications and their
costs.

EXHIBIT
E

SCHEDULE
OF TERMS

             This
Schedule of Terms (the "Schedule") is executed and delivered by
Heartport, Inc., a Delaware corporation, and Deltagen, Inc., a Delaware
corporation, in their capacities as Sublandlord and Subtenant, respectively,
under that certain Sublease Agreement, dated as of July 10, 2001 for premises
located at 700 Bay Road, Redwood City, California (the
"Sublease").  Capitalized
terms used in this Schedule without definition have the same meanings as are
given to such terms in the Sublease.

Sublandlord and Subtenant agree as
follows:

1.          The
rentable square footage of each Phase of the Sublease Premises is as follows:

	Phase
  1	 	 
	 	

	 
	Phase
  2	 	 
	 	

	 
	Phase
  3	 	 
	 	

	 
	Phase
  4	 	 
	 	

	 

             Total
rentable square feet of Sublease Premises: 
132,347.

2.          The
Base Rent for each Phase of the Sublease Premise is as follows:

	 	Rate
  Per R.S.F.	 	Phase
  1	 	Phase
  2	 	Phase
  3	 
	Phase 1 Rent
  Commencement Date through Month 4	$	1.75	 	 	 	 	 	 	 
	Month 5 through
  10/14/02	$	2.75	 	 	 	 	 	 	 
	Phase 2 Rent
  Commencement Date through 10/14/02	$	2.75	 	 	 	 	 	 	 
	Phase 3 Rent
  Commencement Date through 10/14/02	$	2.75	 	 	 	 	 	 	 
	10/15/02 through
  10/14/03	$	2.8325	 	 	 	 	 	 	 
	10/15/03 through
  10/14/04	$	2.9175	 	 	 	 	 	 	 
	10/15/04 through 10/14/05	$	3.0050	 	 	 	 	 	 	 
	10/15/05 through
  10/14/06	$	3.0951	 	 	 	 	 	 	 
	10/15/06 through
  10/14/07	$	3.1880	 	 	 	 	 	 	 
	10/15/07 through
  10/14/08	$	3.2836	 	 	 	 	 	 	 
	10/15/08 through
  10/14/09	$	3.3822	 	 	 	 	 	 	 
	10/15/09 through
  07/14/10	$	3.4836	 	 	 	 	 	 	 

Base Rent for Phase 4 shall be the
product of the rentable square footage of Phase 4 and the Base Rent per
rentable square foot in effect on the Phase 4 Rent Commencement Date.

3.          Subtenant's Proportionate
Share from and after the Commencement Date of each Phase of the Sublease
Premises is as follows:

	Commencement
  Date:	Subtenant's Proportionate Share
	 	Phase
  1 Commencement Date	%	 
	 	Phase
  2 Commencement Date	%	 
	 	Phase
  3 Commencement Date	%	 
	 	Phase
  4 Commencement Date	100.0000%	 

4.          Subtenant's
Parking Allocation from and after the Commencement Date of each Phase of the
Sublease Premises is as follows:

	Commencement
  Date:	Subtenant's Parking Allocation
	 	Phase
  1 Commencement Date	spaces	 
	 	Phase
  2 Commencement Date	spaces	 
	 	Phase
  3 Commencement Date	spaces	 
	 	Phase
  4 Commencement Date	436 spaces	 

As amended by the terms of this Schedule,
the Sublease shall remain in full force and effect in accordance with its
terms.

Sublandlord and Subtenant have caused
this Schedule to be executed and delivered by their respective duly authorized
officers.

	SUBLANDLORD:	 	SUBTENANT:
	 	 	 
	HEARTPORT, INC., a Delaware corporation      	 	DELTAGEN, INC., a Delaware corporation      
	 	 	 
	By:	 	By:
	 	

	 	 	

	 
	Name:	 	Name:
	 	

	 	 	

	Title:	 	Title:
	 	

	 	 	

	Date:
                          
  , 2001	 	Date:
                          ,
  2001

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