Document:

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                                                                   EXHIBIT 10.15

THIS COLLABORATIVE RESEARCH AND DEVELOPMENT AGREEMENT (the "Agreement") is made
as of the 19th day of January, 2000 (the "Effective Date")

BETWEEN

TECHNOLOGICAL RESOURCES PTY LIMITED (ACN 002 183 557) through its business unit,
Research and Technology Development, of 55 Collins Street, Melbourne, Victoria
3000, a wholly owned subsidiary of Rio Tinto Limited ("TRPL")

AND

MAXYGEN INC. of 515 Galveston Drive, Redwood City, CA 94063, United States of
America ("MAXYGEN")

PURPOSE OF AGREEMENT

      A.    TRPL wishes to develop Carbon Sequestration technologies for use in
            connection with the combustion of fossil fuels, and for other
            purposes more generally.

      B.    MAXYGEN has expertise in developing biotechnologies, particularly
            those relating to gene shuffling, across a broad range of
            applications.

      C.    TRPL and MAXYGEN wish to collaborate through the sharing of their
            expertise to develop a particular technology for Carbon
            Sequestration.

      D.    The purpose of this Agreement is to establish the terms and
            conditions upon which the Project will be established, carried out
            and commercialized by TRPL and MAXYGEN.

IT IS AGREED

1.    DEFINITIONS AND INTERPRETATION

      For purposes of this Agreement, the following defined words shall have the
      meanings indicated:

1.1   "Affiliate" means any corporation, firm, limited liability company,
      partnership or other entity that directly or indirectly controls or is
      controlled by or is under common control with MAXYGEN. As used in this
      paragraph, control includes, without limitation, ownership, directly or
      through one or more affiliates, of fifty percent (50%) or more of the
      shares of stock entitled to vote for the election of directors, in the
      case of a corporation, or fifty percent (50%) or more of the equity
      interests in the case of any other type of legal entity, status as a
      general partner in any partnership, or any other arrangement whereby a
      party controls or has the right to control the board of directors or
      equivalent governing body of a corporation or other entity, or if such
      level of ownership or control is prohibited in any country, any entity
      owned or controlled by or owning or

THE SYMBOL "*******" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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      controlling at the maximum control or ownership right permitted in the
      country where such entity exists;

1.2   "Agreement" means this agreement, including its Schedules, and any
      amendment to it agreed to in writing by the Parties;

1.3   "Applications" means each of the TRPL Coal Applications, the Non-TRPL Coal
      Applications, the Biomass Applications, the Non-Renewable Energy
      Applications, and the Value Added Products Applications;

1.4   "Background Technology" means the MAXYGEN Background Technology and/or the
      TRPL Background Technology, as appropriate;

1.5   "Biomass" means organisms, living or dead, or the products of living
      organisms;

1.6   "Biomass Applications" means *******;

1.7   "Business Unit" means the TRPL Business unit, Research and Technology
      Development;

1.8   "Carbon Entity" means the joint venture vehicle or any other legal entity
      (if any) established by the Parties or with the authority of the Parties,
      to Exploit the Project Technology for the Applications;

1.9   "Carbon Sequestration" means *******;

1.10  "Confidential Information" means all know-how, financial information and
      other commercially valuable information in whatever form including
      unpatented inventions, trade secrets, formulae, graphs, drawings, designs,
      biological materials, samples, devices, models and other materials of
      whatever description which a Party discloses to the other Party and
      designates as Confidential Information at the time of disclosure. The
      following are exceptions to such information:

      (a)   information which is already in the public domain;

      (b)   information which hereafter becomes part of the public domain
            otherwise than as a result of an unauthorized disclosure by the
            recipient Party or its representatives;

      (c)   information which is or becomes available to the recipient Party,
            other than under an obligation of confidentiality, from a Third
            Party lawfully in possession of such information and who has the
            lawful power to disclose such information to the recipient Party;

      (d)   information which is rightfully known by the recipient Party (as
            shown by its written records) prior to the date of disclosure to it
            hereunder; or

      (e)   information which is independently developed by the recipient Party
            without any use of or reference to any Confidential Information of
            the other Party;

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1.11  "Contributions" means the contributions (including funding, personnel,
      research activities and equipment, etc.) a Party will make to the Project
      as specified in the Project Plan;

1.12  "Control" or "Controlled" means possession of the ability to grant the
      licenses or sublicenses as provided for herein without violating the terms
      of any agreement or other arrangement with any Third Party;

1.13  "Exploit" and/or "Exploitation" means to use, make, have made, import,
      lease, sell, sublicense or otherwise dispose of to a Third Party, or offer
      to use, make, lease, sell, sublicense or otherwise dispose of to a Third
      Party;

1.14  "Feasibility Milestone" means Decision Milestone 2 (as defined in the
      Project Plan) for the Project established in the Project Plan;

1.15  "Gene" means any gene selected for Shuffling in the Project by the
      Management Committee pursuant to clause 3.2;

1.16  "Gene Variant" means any altered form of a Gene which meets the applicable
      criteria agreed by the Management Committee and is made in connection with
      the Project through the use of Shuffling Technology;

1.17  "Improvements" means any enhancement, modification, adaptation or
      extension to the Materials made by MAXYGEN or jointly by TRPL and MAXYGEN,
      and all Intellectual Property Rights subsisting in them;

1.18  "Intellectual Property Rights" means statutory and other proprietary
      rights in respect of trade marks, patents, circuit layouts, copyrights,
      confidential information, know-how and all other rights with respect to
      Intellectual Property as defined in Article 2 of the Convention
      Establishing the World Intellectual Property Organization of July 1967;

1.19  "Management Committee" means the management committee established pursuant
      to clause 3;

1.20  "Manufacturing Costs" means, with respect to Products sold by MAXYGEN
      (and/or its Affiliates) or TRPL (and/or RIO TINTO Group Members), as the
      case may be, (i) ******* costs related to the manufacture of Products, by
      MAXYGEN (and/or its Affiliates) or TRPL (and/or RIO TINTO Group Members),
      as the case may be, including without limitation, costs for personnel,
      materials, quality control, regulatory compliance, administrative
      expenses, subcontractors, fixed and variable manufacturing overhead costs
      and business unit or division *******, and the like, as determined and
      allocated in accordance with generally accepted accounting principles
      (GAAP), consistently applied by the applicable Party, excluding *******,
      or (ii) with respect to Products purchased by MAXYGEN (and/or its
      Affiliates) or TRPL (and/or RIO TINTO Group Members), as the case may be,
      from a Third Party manufacturer, ******* paid to the manufacturer for such
      Products;

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1.21  "Materials" means any chemical or biological substances including, without
      limitation, any: (a) organic or inorganic chemical element or compound;
      (b) gene; (c) vector or construct, plasmid, phage or virus; (d) host
      organism, including bacteria and plant cells; (e) eukaryotic or
      prokaryotic cell line or expression system; (f) protein, including any
      peptide or amino acid sequence, enzyme, antibody or protein conferring
      targeting properties and any fragment of a protein or peptide or enzyme;
      (g) genetic material, including any genetic control element (e.g.,
      promoters), Gene, Gene Variant or Shuffled Gene; or (h) assay or reagent;

1.22  "MAXYGEN Background Technology" means all Materials provided by MAXYGEN
      for use in the Project and Intellectual Property Rights of MAXYGEN which
      are necessary for the conduct of the Project and made available by MAXYGEN
      for the conduct of the Project;

1.23  "MAXYGEN Field" means all uses except *******;

1.24  "Net Revenues" with respect to a particular Product means Net Sales for
      such Product, less:

      (a)   an amount for such manufacturing equal to ******* of the
            Manufacturing Costs related to such Products; and

      (b)   any expenses incurred or accrued in connection with the
            installation, packaging, labeling, marketing, sale or other
            disposition of the Products by MAXYGEN (and/or its Affiliates) or
            TRPL (and/or RIO TINTO Group Members), as the case may be, and
            general and administrative expenses relating to the preceding, as
            determined and allocated in accordance with generally accepted
            accounting principles, consistently applied by the applicable Party.

1.25  "Net Sales" means the amounts (including, without limitation, *******)
      received by MAXYGEN (and/or its Affiliates) or TRPL (and/or RIO TINTO
      Group Members), as the case may be, from Third Parties (including without
      limitation Sublicensees) with respect to the Exploitation of Products,
      less: (i) rebates, credits and cash, trade and quantity discounts,
      actually taken, (ii) excise taxes, sales, use, value added, and other
      consumption taxes and other compulsory payments to governmental
      authorities, actually paid, (iii) the cost of any shipping packages and
      packing, if billed separately, (iv) insurance costs and outbound
      transportation charges prepaid or allowed, (v) import and/or export duties
      and tariffs actually paid, and (vi) amounts allowed or credited due to
      returns or *******. All transfers of Products between MAXYGEN and/or its
      Affiliates or TRPL and/or RIO TINTO Group Members, as the case may be,
      shall be disregarded for purposes of computing Net Sales, unless the
      purchaser is the end-user of such Product;

1.26  "Non-Renewable Energy Applications" means *******;

1.27  "Non-TRPL Coal Applications" means *******;

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1.28  "Objective" means the development, through the use of Shuffling
      Technology, of Shuffled Genes which have an enhanced capability in Carbon
      Sequestration with a view to Exploitation by the Parties as set forth in
      this Agreement;

1.29  "Parties" means the parties to this Agreement and their successors and
      permitted assigns and "Party" means one of them;

1.30  "Phase I" means the first phase of the Project as described in the Project
      Plan, up to achievement of the Feasibility Milestone;

1.31  "Phase II" means the second phase of the Project involving further
      research for the scale-up the development of a prototype apparatus for the
      Applications utilizing Shuffled Genes or proteins expressed therefrom;

1.32  "Phase II Milestones" means the milestones established by the Parties in
      writing at the commencement of Phase II which milestones are directed at
      achieving the Objective;

1.33  "Product" means any product that is, or incorporates or is made through
      the use of one or more Shuffled Genes or proteins expressed therefrom. Any
      process utilizing one or more Shuffled Genes or proteins expressed
      therefrom shall also be considered a Product;

1.34  "Project" means the research activities comprised in Phase I and Phase II
      which are to be undertaken by the Parties pursuant to this Agreement as
      described more particularly in the Project Plan;

1.35  "Project Commencement Date" means the date thirty (30) days after the
      Effective Date or such earlier date as the Parties may agree in writing to
      commence Phase I of the Project;

1.36  "Project Plan" means the initial plan referred to in clause 2.1 which has
      been agreed by the parties as of the Effective Date for the conduct of the
      Project, which plan may be amended from time to time by the Management
      Committee;

1.37  "Project Technology" means all ideas, inventions, discoveries,
      innovations, data, software, databases, results, information, reports,
      samples, Materials, Improvements, Shuffled Genes, prototypes and
      artifacts, whether or not patentable, instructions, processes and
      formulae, including, without limitation, biological, chemical, physical
      and analytical, safety, manufacturing and quality control data and
      information, in each case, which is/are conceived or reduced to practice
      or otherwise developed or made or the utility of which for the Objective
      is determined or discovered by either Party, or a Third Party on behalf of
      a Party, as part of the conduct of the Project during the Project Term,
      and all Intellectual Property Rights subsisting in the foregoing;

1.38  "Project Term" means the period beginning on the Project Commencement Date
      and ending on the third anniversary of the Project Commencement Date or as
      extended or subject to earlier termination in accordance with clause 2.2;

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1.39  "Revenues" shall mean:

      (a)   the ******* by MAXYGEN (and/or its Affiliates) or TRPL (and/or RIO
            TINTO Group Members), as the case may be, for:

                  (1)   ******* from Sublicensees with respect to *******;

                  (2)   ******* from Sublicensees with respect to *******;

                  (3)   ******* of Products by Sublicensees;

                  (4)   ******* for Products; and

                  (5)   all other consideration (including, without limitation,
            ******* received by MAXYGEN (and/or its Affiliates) or TRPL (and/or
            RIO TINTO Group Members), as the case may be, attributable to the
            use of one or more Products;

            LESS, in the case of (3), (4) and/or (5) above, on a Product-by-
            Product basis, amounts paid by MAXYGEN (and/or its Affiliates) or
            TRPL (and/or RIO TINTO Group Members), as the case may be, to Third
            Parties for Intellectual Property Rights to manufacture, use, import
            or sell such Product.

      (b)   In the event that a Product is sold in combination with one or more
            other product(s), components, ingredients or active agent(s) which
            are not Products, Revenues from such sales of such Product shall be
            calculated by multiplying the Revenues of that combination by the
            fraction A/(A + B), where A is the gross selling price of the
            Product sold separately and B is the gross selling price of the
            other product, components, ingredient or active agent(s) sold
            separately. In the event that no such separate sales are made by the
            Party, Net Sales for revenue sharing determination shall be as
            reasonably allocated by the Party between such Product and such
            other product, components, ingredient or agent, based upon their
            relative importance and proprietary protection. In the event that
            the other Party believes such allocation is inequitable and the
            Parties are unable to resolve such dispute after bona fide
            negotiations in good faith, the matter may be submitted to
            arbitration pursuant to clause 23 below.

1.40  "RIO TINTO Associate" means a corporation or unincorporated joint venture
      or other business association regulated by contractual arrangement in
      which, as of December 31, 1999, a RIO TINTO Group Member has:

      (a)   not less than a 40% shareholding or participating interest; or

      (b)   if less than a 40% shareholding or participating interest, a
            shareholding or participating interest of at least 25%, provided
            that such shareholding or participating interest is equal to or
            greater than any other shareholding or participating interest;

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1.41  "RIO TINTO Group Member" means Technological Resources Pty Limited, Rio
      Tinto Corporation plc (of 6 St James's Square, London, England), Rio Tinto
      Limited, and all RIO TINTO Associates having such status as of 31 December
      1999;

1.42  "Schedule" means any schedule to this Agreement;

1.43  "Shuffled Gene" means (i) any Gene Variant that the Management Committee
      designates as meeting applicable criteria established by the Management
      Committee, and (ii) any Shuffled Gene Derivative;

1.44  "Shuffled Gene Derivative" means any modified form of a Shuffled Gene
      designated by the Management Committee, which modification is developed
      from or made to the Shuffled Gene by any means, including without
      limitation, any codon modified variant, splice variant, mutation,
      derivative or variant of a Shuffled Gene, and any fragment(s) of the
      preceding;

1.45  "Shuffle", "Shuffled" and "Shuffling" means the recombination and/or
      rearrangement and/or mutation of genetic material for the creation of
      genetic diversity using intellectual property and/or tangible property
      owned or Controlled by MAXYGEN;

1.46  "Shuffling Technology" means techniques, methodologies, processes,
      materials and/or instrumentation useful for Shuffling, and generally
      applicable screening techniques, methodologies, or processes of using the
      resulting genetic material to identify potential usefulness;

1.47  "Sublicensee" means an entity (other than Affiliates in the case of
      MAXYGEN and RIO TINTO Group Members in the case of TRPL) to whom TRPL or
      MAXYGEN, as the case may be, has granted a license or sublicense to
      Exploit Products;

1.48  "Third Party" means any person other than TRPL, a RIO TINTO Group Member,
      MAXYGEN, or an Affiliate of MAXYGEN;

1.49  TRPL Background Technology" means all Materials provided by TRPL for use
      in the Project and Intellectual Property Rights of TRPL which are
      necessary for the conduct of the Project and made available by TRPL for
      the conduct of the Project;

1.50  "TRPL Coal Applications" means *******;

1.51  "TRPL Field" means *******.

1.52  "Value Added Products Applications" means *******.

1.53  Interpretation.  In this Agreement, except where the context indicates to
      the contrary:

      (a)   the expression "person" includes an individual, a body corporate, a
            joint venture, a trust, an agency or other body;

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      (b)   words importing the singular will include the plural (and vice
            versa) and words denoting a given gender will include all other
            genders;

      (c)   headings are for convenience only and will not affect interpretation
            of this Agreement;

      (d)   all monetary amounts are expressed in United States currency;

      (e)   the Schedule forms part of this Agreement.

2.    PROJECT AND REPORTING

2.1   Project Plan.  The Parties will conduct the Project with the goal of
      achieving the Objective in accordance with the Project Plan. The Project
      Plan will establish: (i) the scope of the development activities which
      will be performed during each of Phase I and, if applicable, Phase II;
      (ii) objectives, work plan activities and time schedules with respect to
      the Project; and (iii) the Feasibility Milestone for Phase I and, if
      applicable, Phase II Milestone(s). The initial Project Plan has been
      agreed by the Parties in writing as of the Effective Date. The Management
      Committee will review the Project Plan on an ongoing basis and may make
      changes to it.

2.2   Term.  The term of Phase I of the Project will commence on the Project
      Commencement Date and, unless terminated earlier due to the termination of
      the Agreement pursuant to clause 2.11 or clause 14, or extended by mutual
      agreement of the Parties, will terminate upon completion of the Project
      Term. The term of Phase II of the Project, if any, shall be as agreed by
      the Parties.

2.3   Phase I and Phase II.

      (a)   Completion of Phase I.  Phase I will be completed upon achievement
            of the Feasibility Milestone or, if earlier, expiration of the
            Project Term.

      (b)   Negotiation of Phase II.  Upon achievement of the Feasibility
            Milestone, the Parties will promptly negotiate bona fide in good
            faith (i) whether to conduct Phase II, (ii) the duration of Phase
            II, (iii) the research funding to be provided in connection with
            Phase II, and (iv) appropriate modifications to the Project Plan to
            establish the Phase II Milestone(s) and the activities to be
            undertaken by the Parties in Phase II. MAXYGEN agrees for a period
            of six (6) months following the earlier of (a) achievement of
            *******, or (b) the expiration of the Project Term (such six month
            period the "Phase II Negotiation Period"), that TRPL shall be
            MAXYGEN's preferred partner for the conduct of Phase II or, subject
            to clauses 2.12 and 12.4, *******, and that during the Phase II
            Negotiation Period MAXYGEN will not, without TRPL's consent,
            negotiate with any Third Party to enter into a collaboration to
            conduct Phase II research or, subject to clauses 2.12 and 12.4,
            *******. TRPL agrees that if it is not interested in pursuing Phase
            II or other *******, it will promptly notify MAXYGEN in writing. If
            TRPL notifies MAXYGEN that it is not interested in pursuing Phase II
            research prior to expiration of the Phase II Negotiation Period, or
            if the Parties do not agree in

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            writing upon the items referred to in (i) through (iv) above during
            the Phase II Negotiation Period, then (a) the Project shall
            terminate, (b) neither Party shall have any obligation to conduct
            research in Phase II, (c) TRPL shall have no obligations to provide
            research funding for Phase II, (d) MAXYGEN shall be free to pursue
            such research on its own or with any Third Party, and (e) TRPL shall
            have no rights to use any Project Technology for any purpose.

      (c)   Phase II.  If the Parties agree in writing (i) to conduct Phase II,
            (ii) the duration of Phase II, (iii) the research funding to be
            provided in connection with Phase II, and (iv) appropriate
            modifications to the Project Plan to establish the Phase II
            Milestone(s) and the activities to be undertaken by the Parties in
            Phase II, then the Parties shall devote the agreed-upon resources to
            undertake the Phase II research activities, and TRPL shall provide
            further development funding at the agreed level for the conduct of
            Phase II. Phase II will be completed upon completion of the Phase II
            Milestones or, if earlier, expiration of the time period agreed by
            the Parties for the conduct of Phase II, unless terminated earlier
            in accordance with clause 14.

2.4   Efforts.  Each of MAXYGEN and TRPL will conduct activities in connection
      with the Project as described in the Project Plan. The Parties agree to
      use reasonable efforts to carry out the Project and make their
      Contributions in the manner and at the times specified in the Project
      Plan.

2.5   Project Funding.

      (a)   TRPL Expenses.  TRPL shall be responsible for the expense of its own
            participation in the Project.

      (b)   TRPL Funding.  TRPL shall pay to MAXYGEN funding for Phase I of the
            Project of U.S. ******* each year of Phase I of the Project for
            total amount of U.S. *******. The amount of funding TRPL will pay to
            MAXYGEN for Phase II of the Project, if any, shall be agreed by the
            parties pursuant to clause 2.3(c). MAXYGEN shall have no obligation
            to expend any amount or incur any expense in connection with the
            Project except the amounts paid by TRPL to MAXYGEN pursuant to this
            clause 2.5(b). All payments pursuant to this clause 2.5(b) will be
            made inclusive of any taxes or any other charge payable in respect
            of such payment or the satisfaction by a Party of its obligations
            under this Agreement or any other matter arising out of, connected
            with or related to, this Agreement (including, without limitation,
            any applicable goods and services taxes or value added taxes, sales
            taxes or withholding taxes).

      (c)   Timing of Payments.  The amounts to be paid to MAXYGEN in connection
            with the Project will be paid quarterly, in advance. The initial
            payment for the first quarter of the first year of the Project will
            be made within fourteen (14) days after the Project Commencement
            Date, and subsequent payments will be made on or before the
            applicable quarterly anniversaries of the Project Commencement Date.

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      (d)   Third Party Technology. MAXYGEN will be responsible for all payments
            due to Third Parties for the acquisition of licenses to intellectual
            property necessary for the practice of Shuffling Technology per se
            in the Project, and the costs of negotiating and preparing such
            licenses. If the Management Committee agrees that it is necessary
            for MAXYGEN to acquire any license to any other intellectual
            property or technology (e.g., a gene or Gene) from a Third Party for
            the conduct of MAXYGEN's activities in connection with the Project,
            the Management Committee will determine how such arrangements might
            proceed and what costs TRPL and/or MAXYGEN should contribute (if
            any) to the cost of acquiring the necessary license; provided, if
            the Management Committee does not agree upon allocation of costs
            between the Parties, then MAXYGEN shall have no liability hereunder
            for not acquiring or maintaining such licenses, or for failing to
            undertake or perform any research activities set forth in the
            Project Plan for which such license is necessary.

      (e)   Subcontracts.  With the prior written approval of the Management
            Committee, MAXYGEN may enter into agreements with Third Parties for
            the performance of activities in furtherance of the Project. If any
            such agreement is for the performance of activities in furtherance
            of the Project for which TRPL will be responsible for paying, TRPL
            shall be responsible for directly paying to the third party all
            compensation required to be paid pursuant to such Agreement and/or
            for reimbursing MAXYGEN for all expenses incurred by MAXYGEN in
            connection with such agreements, including, without limitation, the
            out-of-pocket costs of negotiating and preparing such agreements.

      (f)   Capital Expenditures.  If the conduct of the Project necessitates
            the purchase of specialized capital equipment, the Management
            Committee will determine whether such equipment will be purchased;
            provided, it is understood that TRPL shall not be obligated without
            its consent to provide funding in excess of the amounts set forth in
            clause 2.5(b) for Phase I or such funding as the Parties may agree
            for Phase II pursuant to clause 2.3. If the Management Committee
            approves any such purchase, TRPL and MAXYGEN in proportions to be
            agreed by them, will pay the full cost (including costs for taxes,
            shipping, etc.) for such purchases. Neither Party will have any
            obligation to purchase or to contribute to the purchase of any such
            equipment unless both Parties agree pursuant to this clause and
            provide reimbursement as agreed, and neither Party will have any
            liability hereunder for not purchasing or otherwise obtaining access
            to such equipment.

2.6   Technology Advancement Fees.  TRPL will pay to MAXYGEN an annual
      technology advancement fee of ******* each year during Phase I of the
      Project. Such funds shall be used by MAXYGEN for the development of
      Materials or Intellectual Property Rights which may be useful for the
      conduct of the Project. The first such fee will be paid to MAXYGEN on or
      before the Project Commencement Date and each subsequent fee will be paid
      to MAXYGEN on or before each anniversary of the Project Commencement Date.
      Such amounts will not be refundable nor creditable against other amounts
      due to MAXYGEN under this Agreement, and will be paid in addition to any
      amounts due from TRPL pursuant to Section 2.5(b).

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2.7   Contributions to Project.

      (a)   Phase I.  During Phase I of the Project, (i) TRPL will provide
            funding for the Project as set forth in clause 2.5 and will provide
            representatives on the Management Committee appropriately qualified
            to perform their supervisory and management functions on the
            Management Committee, and (ii) MAXYGEN will:

            (i)   Use reasonable endeavors to ensure the success of the Project,
                  including without limiting the foregoing, (where required by
                  the Project Plan) devoting sufficient research personnel, and
                  laboratory facilities;

            (ii)  Engage personnel appropriately qualified to perform (where
                  required by the Project Plan), supervise, analyze and report
                  on all the results conducted pursuant to the Project; and

            (iii) Deploy such scientific, technical, financial and other
                  resources to accord the Project such priority as is necessary
                  to conduct the Project as specified in the Project Plan.

      (b)   Phase II.  During Phase II of the Project, each Party will:

            (i)   Use reasonable endeavors to ensure the success of the Project,
                  including without limiting the foregoing, (where required by
                  the Project Plan) devoting sufficient research personnel, and
                  laboratory facilities;

            (ii)  Engage personnel appropriately qualified to perform (where
                  required by the Project Plan), supervise, analyze and report
                  on all the results conducted pursuant to the Project; and

            (iii) Deploy such scientific, technical, financial and other
                  resources to accord the Project such priority as is necessary
                  to conduct the Project as specified in the Project Plan.

2.8   Selection of Genes for Shuffling.  With respect to any gene that the
      Management Committee considers for Shuffling in the Project, both Parties
      shall inform the Management Committee of any information of which it is
      aware with respect to Third Party patent applications or patents which may
      relate to the use of the gene in the Project and/or the development or
      commercialization of Products based on Shuffled Genes resulting from the
      Shuffling of such gene in the Project; provided, neither Party shall have
      any obligation to provide the Management Committee with any document which
      would result in (i) a breach of the attorney/client privilege with respect
      thereto or (ii) a breach of an obligation of confidentiality owed to a
      Third Party. It is understood that the Parties anticipate that MAXYGEN
      will propose genes for Shuffling in the Project. The Management Committee
      shall have the sole authority to select the Genes for use in the Project.
      The Management Committee shall consider technical feasibility and freedom
      to operate risks for the commercialization of Products in the selection of
      Genes.

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2.9   Materials; Limited Use.  MAXYGEN shall provide reasonable quantities of
      Materials (which may include, without limitation, Shuffled Genes and/or
      Gene Variants which are potential Shuffled Genes) to TRPL as set forth in
      the Project Plan, which TRPL shall use solely for research activities in
      the conduct of the Project approved in advance by the Management
      Committee. TRPL shall provide a written summary of the results of all such
      research activity to the Management Committee. In the event that TRPL
      obtains rights to Exploit one or more Shuffled Genes as set forth in
      clause 5.2 or 5.3, TRPL shall also have the right to use Shuffled Genes
      provided hereunder for such purpose. Except in connection with the
      practice of the rights granted to TRPL in clause 5.2 and/or 5.3 hereof,
      TRPL shall not without the express prior written consent of MAXYGEN, (i)
      transfer any of the Shuffled Genes, Gene Variants or other Materials
      provided by MAXYGEN to any Third Party, (ii) use the data and information
      obtained from the research activities conducted using such Shuffled Genes,
      Gene Variants or other Materials provided by MAXYGEN (including without
      limitation any sequence information regarding the Shuffled Genes or Gene
      Variants or the proteins expressed therefrom) for any purpose other than
      the purpose of conducting research activities in the Project approved in
      advance by the Management Committee, (iii) authorize any Third Party to
      obtain or use any of the Shuffled Genes, Gene Variants or other Materials
      provided by MAXYGEN for any purpose, or (iv) use any data relating to any
      Shuffled Genes, Gene Variants or other Materials provided by MAXYGEN,
      including without limitation consensus sequences or structural motifs, to
      reverse engineer, reconstruct, synthesize or otherwise modify or copy any
      Shuffled Gene or Gene Variant or any other gene or product with similar
      biological activities, or to attempt the same.

2.10  Reporting. MAXYGEN will provide quarterly written reports (the "Report")
      to the Management Committee no less than fourteen (14) days prior to any
      scheduled meeting. Each Report will document the conduct of the Project,
      the results of the Project, expenditures incurred and milestones achieved
      for the previous quarter.

2.11  Termination.

      (a)   In the event that either Party materially breaches its obligations
            with respect to the conduct of the Project, the other Party shall
            have the right to terminate the Project and this Agreement as set
            forth in clause 14.2 below.

      (b)   In the event that Decision Milestone 1 (as set forth in the Project
            Plan) has not been met on or before the date ******* months
            following the Project Commencement Date, with three (3) months
            written notice, TRPL shall have the right to terminate the Project
            and the Agreement. In the event of such termination, (i) TRPL shall
            have no further obligation to provide Contributions following the
            effective date of such termination, and (ii) MAXYGEN shall retain
            all rights to the Project Technology as set forth in clause 5.1.

      (c)   The Parties may mutually agree to terminate the Project and the
            Agreement as provided in clause 14.3, below.

                                      12
<PAGE>

2.12  Further Agreements Relating to *******.  If Maxygen wishes to enter an
      agreement with a Third Party during the Project with respect to research
      relating to *******, Maxygen shall have the right to do so provided that
      (i) such agreement would not diminish MAXYGEN's obligations to the Project
      nor affect the rights and licenses granted to TRPL in clause 5.2(a) below,
      and (ii) MAXYGEN provides TRPL notice of the agreement prior to its
      execution. MAXYGEN agrees to discuss with TRPL in bona fide good faith the
      impact of any such an agreement on the Project, and subject to its
      confidentiality obligations, to identify to TRPL the other party to such
      agreement, the nature of the arrangement and the activities to be
      performed under such an agreement.

3.    PROJECT MANAGEMENT

3.1   Membership.  The management of the Projects will be carried out by the
      Management Committee consisting of two (2) representatives of each of TRPL
      and MAXYGEN. One representative from each of TRPL and MAXYGEN will have
      technical expertise and one representative from each of TRPL and MAXYGEN
      will have management/commercial expertise. A MAXYGEN representative will
      serve as chairperson of the Management Committee. A Party may change any
      of its appointments to the Management Committee at any time by written
      notice to the other Party. From time to time, the Management Committee may
      establish subcommittees to oversee particular activities.

3.2   Authority.  The Management Committee will be responsible for the
      oversight, direction and management of the Project. The responsibilities
      of the Management Committee will include: (i) selection of the Genes which
      will be Shuffled in the Project as set forth in clause 2.8, (ii)
      establishment of the criteria for identification of Shuffled Genes, (iii)
      designation of Gene Variants as Shuffled Genes (iv) review and
      modification of the Project Plan, (v) ensuring satisfactory flow of
      information by the review of quarterly reports and (vi) approving the
      acquisition of capital equipment and Third Party licenses. Quarterly
      reports will be available to all members of the Management Committee at
      least fourteen (14) days prior to the meeting.

3.3   Decisions.  A quorum for the Management Committee will be the full
      membership of the Management Committee as defined in clause 3.1. All
      decisions of the Management Committee must be unanimous and recorded in
      writing. If the Management Committee is unable to make a unanimous
      decision, the terms of the then-current Project Plan shall remain in
      effect. In the event that a member of the Management Committee believes
      that the then-current Project Plan should be changed and the Management
      Committee cannot agree, then the chairperson of the Management Committee
      will seek to resolve the matter pursuant to clause 23.1, but clauses 23.2,
      23.3 and 23.4 shall not apply to the resolution of such matters.

3.4   Meetings.  The Management Committee will meet on a quarterly basis in
      person or as otherwise agreed and will, additionally, communicate
      regularly by telephone, facsimile and/or video conference. Attendance at
      meetings may be in person, by telephone or by televideo conference, and
      will be at the respective expense of the participating Parties. Each Party
      recognizes the importance of the Management Committee to the success of
      the Project and will use diligent efforts to cause all of its
      representatives to attend all

                                      13
<PAGE>

      meetings of the Management Committee. With the prior approval of the
      Management Committee, other personnel of the Parties may attend Management
      Committee meetings.

3.5   Minutes.  The chairperson of the Management Committee will appoint a
      person to keep accurate minutes of its meetings. Draft minutes will be
      prepared and delivered to each Party within twenty (20) days after each
      meeting. Draft minutes will be edited by each Party's Management Committee
      representatives and will be adopted in final form with their approval and
      agreement and will record the final decisions made by the Management
      Committee. Minutes of the Management Committee meetings will be treated as
      Confidential Information of each Party.

4.    INTELLECTUAL PROPERTY RIGHTS

4.1   Ownership.

      (a)   Background Technology.  All rights to a Party's Background
            Technology remain vested solely in that Party.

      (b)   Project Technology.  MAXYGEN will own all Project Technology
            regardless of which Party conceives, reduces to practice or
            otherwise develops such Project Technology. Subject to clause 4.1(a)
            and the license rights granted pursuant to this Agreement to TRPL,
            TRPL agrees to assign and hereby irrevocably assigns to MAXYGEN its
            entire right, title and interest in the Project Technology and
            Improvements. TRPL agrees to execute in a timely manner such
            documents as MAXYGEN may request to document and perfect MAXYGEN's
            sole ownership of the Project Technology, including all Intellectual
            Property Rights subsisting in it.

      (c)   Governing Law.  It is understood and agreed that inventorship of
            Project Technology (whether or not patentable) will be determined in
            accordance with United States patent laws or the law of California,
            as applicable.

4.2   Research Licenses.  Each Party grants to the other Party a royalty-free,
      non-exclusive, non-transferable right to use its Background Technology to
      the extent necessary for the carrying out of the Project during the
      Project Term, and solely to carry out the Project; provided, (i) nothing
      hereunder grants TRPL any right or license under the MAXYGEN Background
      Technology to practice any Shuffling Technology, and (ii) nothing
      hereunder grants MAXYGEN any right or license under the TRPL Background
      Technology for any use other than performance of the Project.

4.3   Cooperation.  Each Party will do all things reasonably necessary to give
      effect to the ownership and licensing arrangements referred to in this
      clause 4.

4.4   Third Party Rights.  TRPL agrees that MAXYGEN is in the business of
      Shuffling genes on behalf of Third Parties, and that, subject to the
      limitations expressed in clause 12.4 of this Agreement, MAXYGEN has
      granted and will grant to Third Parties rights to acquire licenses for
      genes derived from Shuffling, provided always that MAXYGEN will not,

                                      14
<PAGE>

      during the Project, grant any licenses that are inconsistent with, or
      would prevent the granting of, the licenses to TRPL described in clause
      5.2(a).

      It is understood and agreed by TRPL that, even if MAXYGEN complies with
      its obligations under this Agreement, genes derived through Shuffling
      activities that MAXYGEN conducted with Third Parties in the course of
      MAXYGEN's other business activities may result in Third Party patent
      applications and patents, including patent applications and patents owned
      by such Third Parties, or owned jointly by MAXYGEN and such Third Parties,
      which could conflict with patent applications and patents owned by TRPL.
      MAXYGEN will use its reasonable efforts to avoid such conflict and, unless
      TRPL is damaged as a proximate result of such a material breach by MAXYGEN
      of this clause 4.4, then MAXYGEN will have no liability under this
      Agreement with respect to any such conflict.

4.5   No Implied Licenses.  No rights or licenses with respect to any
      intellectual property owned by MAXYGEN or TRPL are granted or will be
      deemed granted under this Agreement or in connection with it, other than
      those rights expressly granted in this Agreement.

5.    COMMERCIALIZATION OF PROJECT TECHNOLOGY

5.1   Phase I.  Except as provided in clause 5.2 or 12.4 below, or as the
      Parties may agree in writing as set forth in clause 5.3 below, MAXYGEN
      shall have the right to use, sublicense and otherwise Exploit the Project
      Technology without obligation to obtain consent of, pay royalties to, or
      otherwise account to, TRPL, and TRPL will have no rights to use MAXYGEN
      Background Technology or Project Technology for any purpose.

5.2   Phase II.  If the Parties commence the conduct of Phase II as described in
      clause 2.3 above, then each Party will have the right to Exploit the
      Project Technology and the Intellectual Property Rights subsisting in that
      technology for the Applications as set out in this clause 5.2, unless the
      Parties agree otherwise in writing as set forth in clause 5.3, below.

      (a)   To TRPL.

            (i)   Commercial License. Subject to sharing of Revenues as set
                  forth in clause 5.2(c) below, TRPL will be granted an
                  exclusive, irrevocable, worldwide, royalty-bearing license,
                  including the right to sub-license, to Exploit the Project
                  Technology in the TRPL FIELD.

            (ii)  Background Technology.  In furtherance of the license granted
                  in (i), above, and solely to the extent it is necessary to
                  exercise the foregoing license, MAXYGEN will also grant TRPL a
                  non-exclusive, irrevocable, worldwide license under the
                  MAXYGEN Background Technology to Exploit the Project
                  Technology in the TRPL Field in accordance with the foregoing
                  license, provided, in no event shall TRPL have any right or
                  license under the MAXYGEN Background Technology to practice
                  any Shuffling Technology. TRPL will not be obligated, as a
                  result of this

                                      15
<PAGE>

                  license, to pay any additional royalties to MAXYGEN beyond
                  those specified in clause 5.2(c).

      (b)   To MAXYGEN.  Subject to sharing of Revenues as set forth in clause
            5.2(c) below, and solely to the extent it is necessary for MAXYGEN
            to Exploit the Project Technology in the MAXYGEN Field, MAXYGEN will
            be granted a non-exclusive, irrevocable, royalty-bearing license to
            Exploit the TRPL Background Technology for the MAXYGEN Field.

      (c)   Revenue Sharing.  MAXYGEN and TRPL shall share in all Revenues on
            the following basis:

            Exploitation by TRPL (and/or
             RIO TINTO Group Members):                       Share of Revenues-
            ----------------------------

                                                               TRPL     MAXYGEN
                                                             --------   -------
            (i)   TRPL Coal Applications                      *******   *******

            (ii)  Non-TRPL Coal Applications                  *******   *******

            Exploitation by MAXYGEN (and/or
                   its Affiliates):                          Share of Revenues-
            -------------------------------

                                                               TRPL     MAXYGEN
                                                             --------   -------

            (iii) Biomass Applications                        *******   *******

            (iv)  Non-Renewable Energy Applications           *******   *******

            (iv)  Value Added Products Applications           *******   *******

            It is understood and agreed that the revenue sharing set forth in
            this clause 5.2(c) applies with respect to Revenues received by
            MAXYGEN (and/or its Affiliates) or TRPL (and/or RIO TINTO Group
            Members), as the case may be, attributable to the Exploitation of
            Products.

      (d)   Payment Term.  The Revenue sharing payments due from each Party
            under clause 5.2(c) shall be payable on a country-by-country and
            Product-by-Product basis, until the earlier of (i) ******* years
            following the first commercial sale or other Exploitation of such
            Product in such country or (ii) ******* years following the first
            commercial sale or other Exploitation of any Product by such Party.

      (e)   Convenience.  The Parties acknowledge that the other Party may not
            own or control patent applications or patents covering the
            manufacture, sale or use of a particular Product. However, the
            Parties agree that substantial value is contributed by the Parties'
            conduct and support of the Project in accelerated time to market,
            enhanced probability of success and the potential for multiple
            Products and, for the convenience of the Parties, the Parties (for
            their convenience) agree to

                                      16
<PAGE>

            make Revenue sharing payments set forth in clause 5.2(c) during the
            applicable period set forth in clause 5.2(d), regardless of whether
            any particular Product is covered by a patent application or patent.

      (f)   Non-Cash Consideration.  MAXYGEN (and/or its Affiliates) and TRPL
            (and/or RIO TINTO Group Members) shall not transfer Products for
            consideration other than cash or cash equivalents without providing
            the other Party fair compensation therefore consistent with this
            Agreement. If MAXYGEN (and/or its Affiliates) or TRPL (and/or RIO
            TINTO Group Members) receives any consideration in a form other than
            cash or a cash equivalent (e.g., a license under other intellectual
            property owned or Controlled by a Third Party) as part or all of the
            consideration included in the definition of Net Sales and/or
            Revenue, then MAXYGEN or TRPL, as the case may be, shall notify the
            other Party, and the fair market value of the non-cash consideration
            received by MAXYGEN (and/or its Affiliates) or TRPL (and/or RIO
            TINTO Group Members), as the case may be, for such Product shall be
            agreed by MAXYGEN and TRPL, or if the Parties are unable to agree on
            such fair market value, either Party may submit such matter to
            arbitration pursuant to clause 23 below, in order to determine the
            fair market value of such consideration.

5.3   Negotiation of Carbon Entity.  Upon completion of Phase II, the Parties
      will negotiate bona fide in good faith, for a period of three (3) months
      or, if the Phase II Milestones have been achieved in the Project, for a
      period of six (6) months (the applicable period referred to as the
      "Negotiation Period"), whether and on what terms the Parties may be
      willing to (i) establish a joint venture vehicle (the "Carbon Entity") for
      Exploitation of Project Technology for some or all Applications or (ii)
      provide for another arrangement for Exploiting the Project Technology
      (whether by grant to both Parties of non-exclusive rights, with right to
      sublicense, for Exploitation of the Project Technology for the
      Applications, or otherwise). It is understood that such negotiations will
      need to address, among other things, corporate structure of any such
      Carbon Entity, appropriate licenses to be granted to the Carbon Entity
      with respect to the Project Technology and Background Technology of the
      Parties, respective rights of the Parties in connection with the Carbon
      Entity or other agreed means of Exploitation, and appropriate revenue
      sharing terms. The Parties shall have no obligation to continue such
      negotiations after expiration of the Negotiation Period. It is understood
      and agreed that, except to the extent the Parties may otherwise expressly
      agree in writing, the exploitation rights and corresponding revenue
      sharing obligations set forth in clause 5.2 shall remain in effect.

6.    PAYMENTS; BOOKS AND RECORDS

6.1   Reports and Payments.  After the first commercial sale of a Product by a
      Party or its Sublicensees, or RIO TINTO Group Members in the case of TRPL,
      or Affiliates in the case of MAXYGEN, such Party shall make quarterly
      written reports to the other Party within ninety (90) days after the end
      of each calendar quarter, stating in each such report the Revenues
      received by such Party, by country, with respect to each applicable
      Product during the calendar quarter upon which payments are due under
      clause 5.2 and/or 5.3

                                      17
<PAGE>

      above. Concurrently with making such reports, the Party making the report
      shall pay the other Party all amounts due under clause 5.2 and/or 5.3 for
      such calendar quarter.

6.2   Payment Method.  All payments due under this Agreement shall be made by
      bank wire transfer in immediately available funds to a bank account
      designated by the receiving Party. All payments hereunder shall be made in
      U.S. dollars. In the event that the due date of any payment subject to
      clause 5 hereof is a Saturday, Sunday or national holiday, such payment
      may be paid on the following business day. Any payments that are not paid
      on the date such payments are due under this Agreement shall bear interest
      at the prime rate as reported by the Chase Manhattan Bank, New York, New
      York, on the date such payment is due, plus an additional two percent
      (2%), or, if less, at the maximum rate permitted by law, in each case
      calculated on the number of days such payment is delinquent. If any
      currency conversion shall be required in connection with the calculation
      of royalties hereunder, such conversion shall be made using the selling
      exchange rate for conversion of the foreign currency into U.S. Dollars,
      quoted for current transactions reported in The Wall Street Journal for
      the last business day of the calendar quarter to which such payment
      pertains.

6.3   Withholding Taxes.  Except as otherwise provided in clause 2.5(b), all
      amounts required to be paid pursuant to this Agreement may be paid with
      deduction for withholding for or on account of any taxes (other than taxes
      imposed on or measured by the paying Party's net income) or similar
      governmental charge imposed by an applicable jurisdiction ("Withholding
      Taxes"). Upon request, the Party making payment with such deduction shall
      provide to the other Party a certificate evidencing the payment of any
      Withholding Taxes hereunder.

6.4   Other Factors Affecting Payment.  As to countries covered by this
      Agreement which require governmental approval for remitting payments out
      of the country or which limit the amount of payments payable within the
      country, if the payments made hereunder by a Party in respect of Net
      Revenues from sales of Products exceed the rate approved or permitted by
      such country, then the rate of payment payable in respect of sales of
      Products sold in such country shall be the maximum rate approved or
      permitted by that country.

6.5   Local Payment.  If any portion of the payments due hereunder cannot be
      remitted from a country because of government control, and it is legally
      permissible to remit such payments within the country, then the Party
      obligated to make such payment shall have the obligation and the right to
      deposit in a bank of the other Party's election in such country, and in
      trust for the other Party, that portion of payments that could not be
      remitted from the country.

6.6   Inspection of Books and Records.  Each Party shall maintain accurate books
      and records which enable the calculation of the portions of Net Proceeds
      payable hereunder to be verified. The Parties shall retain the books and
      records for each quarterly period for ******* years after the submission
      of the corresponding report under clause 6.1 hereof or such shorter time
      as may be required by applicable law. Upon thirty (30) days prior notice,
      each Party (the "Audited Party") shall make its books and records
      available to

                                      18
<PAGE>

      independent accountants selected by the other Party (the "Auditing
      Party"), which accountants are reasonably acceptable to the Audited Party
      and have entered into a reasonable confidentiality agreement with the
      Audited Party, to conduct a review or audit once per calendar year, for
      the sole purpose of verifying the accuracy of the Audited Party's payments
      in compliance with this Agreement. The accounting firm shall report to the
      Auditing Party only whether there has been a royalty underpayment and, if
      so, the amount thereof.

7.    PATENT PROSECUTION AND ENFORCEMENT

7.1   Treatment of Project Technology.  MAXYGEN will have the sole discretion to
      decide which of the Project Technology will be:

      (a)   retained as its Confidential Information; or

      (b)   included in any patent application or other application for
            registered Intellectual Property Rights.

7.2   Filing of Patents.  If MAXYGEN decides that the Project Technology or any
      part of it will be included in any patent application or other application
      for registered Intellectual Property Rights protection, the application
      will be made by MAXYGEN in its own name and at its cost. TRPL will, at
      MAXYGEN's cost, render such assistance as MAXYGEN reasonably requires in
      the preparation, filing and prosecution of the patent.

7.3   Notice.  Each Party will give the other prompt notice of:

      (a)   any claim or allegation that the exercise of the rights under this
            Agreement constitute an infringement of the rights of any Third
            Party; and

      (b)   any Third Party's infringement or threatened infringement of a
            Party's Intellectual Property Rights in and to Project Technology
            (including without limitation, copyright, design and patent rights),
            of which it becomes aware.

7.4   Enforcement.  If either Party hereto becomes aware that any Intellectual
      Property Rights in and to Project Technology are being or have been
      infringed by any Third Party, such party shall promptly notify the other
      Party in writing describing the facts relating thereto in reasonable
      detail. MAXYGEN shall have the initial right, but not the obligation, to
      institute, prosecute and control any action, suit or proceeding with
      respect to such infringement, including any declaratory judgment action
      (each an "Action"), at its expense; using counsel of its choice. In the
      event that TRPL has exclusive rights to Project Technology in the TRPL
      Field pursuant to clause 5.2 and/or clause 5.3 and MAXYGEN fails to
      initiate or defend any Action involving an infringement that is within the
      scope of such exclusive rights of TRPL within ******* months of receiving
      notice of any infringement, TRPL shall have the right, but not the
      obligation, to initiate and control such an Action, at its expense. In any
      such event, TRPL shall promptly give MAXYGEN written notice thereof, and
      MAXYGEN shall cooperate reasonably with TRPL in connection with any such
      Action, at TRPL's expense; including without limitation, by joining such
      Action as a party if requested by TRPL. Any amounts

                                      19
<PAGE>

      recovered by TRPL in such an Action in excess of amounts paid to reimburse
      MAXYGEN and amounts expended by TRPL for the expenses incurred in
      connection with such Action, shall be *******.

7.5   In the event that TRPL has exclusive rights to Project Technology in the
      TRPL Field pursuant to clause 5.2 and/or 5.3, MAXYGEN will keep TRPL
      reasonably informed regarding any Action as described in clause 7.4
      instituted by MAXYGEN with respect to infringement within the TRPL Field.

8.    INDEPENDENT RESEARCH

8.1   Independent Research.  Subject to clauses 2.3(b), 2.12 and 12.4, each
      Party is entitled to conduct research outside of the Project free of any
      obligation to the other Party. Neither Party will have any obligation to
      conduct any research in the Project except as expressly described in the
      Project Plan.

8.2   No Reverse Engineering.  Except as expressly provided in this Agreement or
      other express written agreement between MAXYGEN and TRPL, TRPL shall not,
      and shall not authorize a RIO TINTO Group Member to, develop or
      commercialize, or authorize the development or commercialization of, or
      Exploit any process or product utilizing in any way any Gene Variant or
      Shuffled Gene, or any gene (or genetic element) which is based on or
      derived from any Gene Variant or Shuffled Gene, regardless of whether such
      gene (or genetic element) is made or obtained through synthesis, or
      mutation of a starting gene (or genetic element), or any product derived
      therefrom which contains or is made with the use of such a gene (or
      genetic element) or a Gene Variant or Shuffled Gene, or protein expressed
      from any of the foregoing. Except pursuant to a further written agreement
      between MAXYGEN and TRPL, TRPL will not itself, or through any Third
      Party, use any Project Technology and/or Improvements or structure-
      function data relating to any Gene Variants, including without limitation,
      consensus sequences or structural motifs, to reverse engineer,
      reconstruct, synthesize or otherwise modify or copy any Gene Variant or
      Shuffled Gene or any other gene or product with similar biological
      activities, or to attempt the same.

9.    CONFIDENTIALITY

9.1   Confidential Information.  Except as expressly provided herein, the
      Parties agree that the receiving Party will keep completely confidential
      and will not publish or otherwise disclose and will not use for any
      purpose except for the purposes contemplated by this Agreement any
      Confidential Information of the other Party (the "Disclosing Party")
      furnished to it by the Disclosing Party pursuant to this Agreement.
      Project Technology shall be deemed Confidential Information of MAXYGEN. In
      addition, except as expressly provided herein or to comply with applicable
      law, regulation or the order of a court of competent jurisdiction, the
      Parties agree that each Party will keep completely confidential and will
      not publish or otherwise disclose the terms of this Agreement.

                                      20
<PAGE>

9.2   Permitted Disclosures.  Confidential Information and/or the terms of this
      Agreement may be disclosed:

      (a)   to employees, agents, consultants and actual or bona fide potential
            Sublicensees of the non-Disclosing Party or its Affiliates (in the
            case of MAXYGEN) or of RIO TINTO Group Members (in the case of
            TRPL), but only to the extent reasonably required to accomplish the
            purposes of this Agreement and only if the non-Disclosing Party
            obtains prior written agreement from such employees, agents,
            consultants and actual or bona fide potential Sublicensees of the
            non-Disclosing Party or its Affiliates (in the case of MAXYGEN) or
            of RIO TINTO Group Members (in the case of TRPL) to whom disclosure
            is to be made to hold in confidence and not make use of such
            information for any purpose other than those permitted by this
            Agreement. Each Party will use at least the same standard of care as
            it uses to protect proprietary or confidential information of its
            own to ensure that such employees, agents and consultants do not
            disclose or make any unauthorized use of the Confidential
            Information; and

      (b)   to the extent reasonably necessary in prosecuting or defending
            litigation, complying with applicable governmental regulations, laws
            or court orders, or otherwise submitting required information to tax
            or other governmental authorities; provided that, if a Party is
            required to make any such disclosure of the terms of this Agreement
            or the other Party's Confidential Information, it will give
            reasonable advance notice to the other Party of such disclosure and,
            will use its reasonable efforts to secure confidential treatment of
            such Confidential Information (whether through protective orders or
            otherwise).

10.   PUBLIC STATEMENTS AND PUBLICATION

10.1  Use of Names.  Except to the extent required to comply with the law or a
      court order, neither Party will use the name or logo of the other Party
      without its written consent. In no event will either Party knowingly make
      any inaccurate or misleading statement concerning the other Party or the
      Project.

10.2  No Prejudice.  Subject to the provisions of clause 10.3, the Parties will
      use their reasonable efforts to ensure nothing is done which might
      prejudice the subsistence or Exploitation of the Project Technology or
      which would preclude the grant of a patent or cause the loss of
      Intellectual Property Rights protection. The Parties agree and acknowledge
      that this clause 10 is subject to the obligations of confidentiality
      contained in clause 9.

10.3  Publicity.  All publicity, press releases and other announcements relating
      to this Agreement and/or the Project will be reviewed in advance by, and
      will be subject to the approval of, both Parties; provided, approval shall
      be deemed to have been given if the reviewing Party does not respond
      within seven (7) days. Notwithstanding the foregoing, either Party may,
      without review or approval of the other Party, (i) publicize the existence
      and general subject matter of this Agreement without the other Party's
      approval, and (ii) disclose the terms of this Agreement to the extent
      required to comply with applicable

                                      21
<PAGE>

      securities laws. The Parties agree to release within ten (10) days after
      the Project Commencement Date a joint press release in an agreed form.
      Once a particular disclosure has been approved for disclosure, either
      Party may make disclosures which do not differ materially from it
      following review and approval by the other Party; provided, such approval
      shall be deemed to have been given if the reviewing Party does not respond
      within two (2) working days of the reviewing Party having received the
      material for review and approval.

10.4  Publication. The Parties (through their Management Committee members for
      so long as it exists, and afterward through such representatives as each
      Party may designate) will cooperate in appropriate publication of the
      results of research and development work performed pursuant to this
      Agreement, but subject to the predominating interest to obtain patent
      protection for any patentable subject matter. To this end, it is agreed
      that prior to any public disclosure of such results, the Party proposing
      disclosure will send the representatives of the other Party described
      above a copy of the information to be disclosed, and will allow the other
      Party thirty (30) days from the date of receipt in which to determine
      whether the information to be disclosed contains subject matter for which
      patent protection should be sought prior to disclosure, or otherwise
      contains Confidential Information of the reviewing Party which such Party
      desires to maintain as a trade secret. If notification is not received
      during the thirty (30) day period, the Party proposing disclosure will be
      free to proceed with the disclosure. If due to a valid business reason or
      a reasonable belief by the non-disclosing Party that the disclosure
      contains (i) Confidential Information of the non-disclosing Party, or (ii)
      subject matter for which a patentable invention should be sought, then
      prior to the expiration of the thirty (30) day period, the non-disclosing
      Party will so notify the representative of the disclosing Party, and the
      disclosing Party will then (a) at the request of the non-disclosing Party
      delete any Confidential Information of the non-disclosing Party, and/or
      (b) delay public disclosure for an additional period of up to sixty (60)
      days to permit the preparation and filing of a patent application on the
      subject matter to be disclosed or other protective action to be taken. The
      determination of authorship for any paper will be in accordance with
      accepted scientific practice.

11.   LIMITATION OF LIABILITY

      Subject to the provisions of clause 12 and clause 13, each Party will
      carry out the Project and use the other Party's Background Technology at
      its own risk. To the full extent permitted at law each Party excludes all
      warranties applicable to the Project, the Project Technology, and its
      Background Technology. Where under law any warranty cannot be excluded,
      each Party's liability is, at the option of the other Party, limited to
      the reperformance of its Contributions to the Project or the payment of
      the cost of having its Contributions to the Projects performed again. TO
      THE FULL EXTENT LAWFUL, NEITHER PARTY IS LIABLE TO THE OTHER PARTY FOR ANY
      SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES ARISING UNDER OR PURSUANT TO
      THIS AGREEMENT, WHETHER IN RESPECT OF ITS NEGLIGENCE OR OTHER DEFAULT, OR
      OTHERWISE.

                                      22
<PAGE>

12.   REPRESENTATIONS AND WARRANTIES

12.1  Each Party represents and warrants to the other that it has the legal
      power, authority and right to enter into this Agreement and to perform its
      respective obligations set forth herein.

12.2  Each Party represents and warrants that as of the Effective Date of this
      Agreement it is not a Party to any agreement or arrangement with any Third
      Party or under any obligation or restriction, including pursuant to its
      certificate of incorporation or bylaws or rules, which in any way limits
      or conflicts with its ability to fulfill any of its obligations under this
      Agreement, and will not enter into any such agreement during the term of
      this Agreement.

12.3  Each Party represents and warrants that, to the best of its belief as of
      the Effective Date of this Agreement, there are no actions, suits,
      investigations, claims or proceedings pending or threatened in any way
      relating to its Background Technology.

12.4  MAXYGEN warrants to TRPL that it has not and will not during the period
      the Project is being conducted enter into any arrangement or understanding
      with any Third Party which arrangement or understanding requires MAXYGEN
      or any of its Affiliates, to provide Material or to conduct any project
      for the primary purpose of using Shuffling Technology for *******.
      Notwithstanding the above, it is understood and agreed that MAXYGEN shall
      have the right, at all times, to provide Material or conduct any projects
      alone or with Third Parties (a) where the primary purpose of such
      activities is *******.

12.5  Subject to clauses 12.3 and 12.4, MAXYGEN and TRPL each specifically
      disclaim that the Project will be successful, in whole or part or that any
      activities undertaken by one or both of them with respect to the Project
      will be successful. MAXYGEN AND TRPL EXPRESSLY DISCLAIM ANY WARRANTIES OR
      CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THE
      CONFIDENTIAL INFORMATION, INTELLECTUAL PROPERTY RIGHTS OF SUCH PARTY
      INCLUDING WITHOUT LIMITATION, PATENTS OR KNOW-HOW, MATERIALS,
      IMPROVEMENTS, SHUFFLING TECHNOLOGY, PROGRAM TECHNOLOGY, GENE(S), GENE
      VARIANT(S), OR SHUFFLED GENE(S), INCLUDING, WITHOUT LIMITATION, ANY
      WARRANTY OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, VALIDITY
      OF ANY SHUFFLING TECHNOLOGY OR PROJECT TECHNOLOGY, PATENTED OR UNPATENTED,
      OR NON-INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

13.   INDEMNIFICATION AND INSURANCE

13.1  MAXYGEN.  MAXYGEN will indemnify, defend and hold harmless TRPL and its
      officers, employees and agents from and against any and all Third Party
      actions, claims, demands, costs, liabilities or expenses (including actual
      legal costs) (each a "Liability") made, sustained, brought or prosecuted
      or in any manner based upon, occasioned by or attributable to any injury
      to any person (including death) or loss of or damage to property

                                      23
<PAGE>

      which may arise from or as a direct result of MAXYGEN's conduct of
      activities in connection with the Project; except, in each case, to the
      extent due to the negligence or willful misconduct of TRPL.
      Notwithstanding the above, the foregoing obligations shall not apply to
      any Liability arising out of or in connection with the use of any
      particular Gene or Shuffled Gene in the Project.

13.2  TRPL.  TRPL will indemnify, defend and hold harmless MAXYGEN and its
      officers, employees and agents from and against any and all Third Party
      actions, claims, demands, costs, liabilities or expenses (including actual
      legal costs) (each a "Liability") made, sustained, brought or prosecuted
      or in any manner based upon, occasioned by or attributable to any injury
      to any person (including death) or loss of or damage to property which may
      arise from or as a direct result of TRPL's conduct of activities in
      connection with the Project; except, in each case, to the extent due to
      the negligence or willful misconduct of MAXYGEN.

13.3  Insurance.  Each Party will procure adequate insurances such as are
      customary and appropriate in their industry, including product liability
      insurance at the time of Exploitation by such Party, and Third Party
      liability insurance in respect of its participation in the Project and its
      use and permitted Exploitation of the Background Technology and Project
      Technology. Each such insurance policy held by MAXYGEN and TRPL will note
      the other Party's interest as a named insured under the policy and include
      a waiver of the insurers' right of subrogation against the other Party.
      Each Party will, on the request of the other Party, produce evidence of
      the currency of the insurance policies referred to in this clause 13. Each
      Party undertakes at all times to comply with the terms of its insurance
      policies the subject of clause 13.

14.   TERM AND TERMINATION

14.1  Term.  The initial term of this Agreement will commence on the Effective
      Date, and, unless terminated earlier as provided in this clause 14,
      continue in full force and effect on a country-by-country and Product-by-
      Product basis until there are no remaining payment obligations for such
      Product in such country.

14.2  Termination for Breach.  A Party may terminate this Agreement and the
      Project by notice in writing to the other Party on the happening of one or
      more of the following:

      (a)   if a Party commits a material breach or default of any of the terms
            and conditions contained herein, and does not within sixty (60) days
            of receipt of notice in writing from the other Party requiring the
            breach to be remedied cure the breach within such time; or

      (b)   if a material warranty, representation or statement given or made by
            a Party in this Agreement is not complied with or proves to be
            untrue and is not otherwise compensable in an award of damages.

14.3  Termination by Mutual Agreement.  The Parties may terminate this Agreement
      by written mutual agreement. In the event that such termination occurs
      during the conduct of the Project, the Parties shall negotiate bona fide
      in good faith an orderly and

                                      24
<PAGE>

      reasonably prompt wind-down of the Project and the associated funding
      obligations of TRPL.

14.4  Termination for Insolvency.  TRPL may, in its sole discretion, terminate
      this Agreement (together with the Project, if such termination is during
      the Project Term) by providing MAXYGEN with written notice on the
      happening of any of the following events:

      (a)   if MAXYGEN is the subject of winding up or liquidation proceedings,
            whether voluntary or compulsory, otherwise than for the purpose of
            and followed by, a reconstruction, amalgamation or reorganization;

      (b)   if MAXYGEN has become insolvent, bankrupt or is subject to the
            appointment of a mortgagee, a receiver or manager or an inspector to
            investigate its affairs, enters into any arrangement or composition
            with its creditors generally, or is unable to pay its debts as and
            when they become due;

      (c)   if execution is levied upon all or any part of the assets of
            MAXYGEN, provided that no breach will take place hereunder if the
            execution is contested in good faith or if within thirty (30) days
            after it is levied payment is made in full to the judgment creditor
            in question of all amounts owing to such judgment creditor,

      such termination to be effective immediately upon receipt of the above
      mentioned written notice. In the event of termination of this Agreement by
      TRPL pursuant to this clause 14.4 during Phase I and/or the Phase II
      Negotiation Period described in clause 2.3, MAXYGEN shall grant to TRPL
      the licenses described in clause 5.2(a), which license shall be subject to
      the sharing of Revenues as set forth in clause 5.2(c).

14.5  Effect of Termination.

      (a)   Accrued Obligations.  Termination of this Agreement for any reason
            will not release either Party hereto from any liability which, at
            the time of such termination, has already accrued to the other Party
            or which is attributable to a period prior to such termination nor
            preclude either Party from pursuing all rights and remedies it may
            have at law or in equity with respect to any breach of this
            Agreement.

      (b)   Return of Confidential Information and Background Technology.  Upon
            termination of this Agreement, TRPL and MAXYGEN will each promptly
            return to the other Party all Confidential Information received from
            the other Party (except one copy of which may be retained by legal
            counsel for archival purposes and ensuring compliance with clause
            9), and all MAXYGEN Background Technology will be returned to
            MAXYGEN.

      (c)   Sublicenses.  Upon termination of this Agreement, any sublicenses
            granted by each Party shall remain in force and effect and shall be
            assigned by the Party granting such sublicense (the "Sublicensing
            Party") to the other Party, provided, however, that the financial
            obligations of each Sublicensee to the non-

                                      25
<PAGE>

            Sublicensing Party shall be limited to the amounts the Sublicensing
            Party would have been obligated to pay to non-Sublicensing Party for
            the activities of such Sublicensee pursuant to this Agreement.

      (d)   Stock on Hand.  In the event this Agreement is terminated for any
            reason after the first commercial sale of one or more Products by a
            Party, such Party and its Sublicensees and its Affiliates (in the
            case of MAXYGEN) and RIO TINTO Group Members (in the case of TRPL)
            shall have right to sell or otherwise dispose of the stock of any
            such Product then on hand, subject to all applicable revenue sharing
            or other payment obligations.

      (e)   Licenses.

            (i)   In the event of any termination by MAXYGEN pursuant to clause
                  14.2(a) for TRPL's failure to make Revenue sharing payments
                  due under clause 5.2(c), the licenses, if any, granted to TRPL
                  pursuant to clause 5.2(a) shall terminate concurrently.

            (ii)  In the event of any termination by TRPL pursuant to clause
                  14.2(a) for MAXYGEN's failure to make Revenue sharing payments
                  due under clause 5.2(c), the licenses, if any, granted to
                  MAXYGEN pursuant to clause 5.2(a) shall terminate
                  concurrently. In the event of any termination by TRPL pursuant
                  to clause 14.4, the licenses, if any, granted to MAXYGEN
                  pursuant to clause 5.2(b) shall terminate concurrently.

            (iii) Except as provided in this clause 14.5(e), the licenses and
                  rights granted to the Parties under this Agreement in effect
                  at the effective date of such termination shall survive;
                  provided, nothing in this clause 14.5(e) shall prohibit, or be
                  construed to prohibit, the later termination of such a
                  surviving license in accordance with clause 14.2(a) and/or
                  14.4 and this clause 14.5(e).

      (f)   Liquidated Damages.  If MAXYGEN terminates this Agreement pursuant
            to clause 14.2 during Phase II of the Project, then TRPL shall pay
            to MAXYGEN as liquidated damages for the failure to pay such amount,
            *******. The payment of such amount shall not limit MAXYGEN's right
            to seek or obtain any other remedies available to it at law or in
            equity.

14.6  Survival.  The provisions of clauses 2.9, 4.1, 4.4, 4.5, 5.1, 5.2(c),
      5.2(d), 5.2(e), 5.2(f), 6, 7.1, 7.2, 7.3, 8, 9, 10, 11, 12.5, 13.1, 13.2,
      14.5, 14.6, 15, 16, 21, 22, 23 and 25 will survive the expiration or
      termination of this Agreement for any reason.

15.   GOVERNING LAW

      This Agreement and any dispute arising from the performance or any breach
      of it, including without limitation, any arbitration, will be governed by
      and construed in accordance with the laws of the State of California.
      without reference to conflicts of laws

                                      26
<PAGE>

      principles. Each Party submits to the jurisdiction of the federal and
      state courts in, and for, the State of California and the courts of appeal
      therefrom.

16.   ASSIGNMENT

      This Agreement will not be assigned by either Party to any third Party
      hereto without the written consent of the other Party, and any purported
      assignment prohibited by this provision shall be null and void; except
      either Party may assign this Agreement, without such consent, to (i) an
      Affiliate, in the case of MAXYGEN, or to a RIO TINTO Group Member, in the
      case of TRPL; or (ii) an entity that acquires all or substantially all of
      the business or assets of such Party to which this Agreement pertains,
      whether by merger, reorganization, acquisition, sale or otherwise. The
      terms and conditions of this Agreement shall be binding on and inure to
      the benefit of the permitted successors and assigns of the Parties.

17.   SEVERABILITY

      Each word, phrase, sentence, paragraph, section, clause and subclause ("a
      provision") of this Agreement is severable and if a court determines that
      a provision is unenforceable, illegal or void then the court may sever
      that provision without affecting the validity of the other provisions of
      this Agreement.

18.   WAIVER

      The failure by TRPL or MAXYGEN to exercise or delay in exercising a power
      or right does not operate as a waiver of that power or right. The exercise
      of a power or right does not preclude its future exercise or the exercise
      of any other power or right.

19.   AMENDMENT

      This Agreement can only be amended by written agreement between the
      Parties.

20.   NOTICES

      Any notice required or permitted by this Agreement will be in writing and
      will be sent by prepaid registered or certified mail, return receipt
      requested, internationally recognized courier or personal delivery, or by
      fax with confirming letter mailed under the conditions described above in
      each case addressed to the other party at the address shown below or at
      such other address for which such party gives notice hereunder. Such
      notice will be deemed to have been given when delivered:

                  If to MAXYGEN:  Maxygen, Inc.
                                  515 Galveston Drive
                                  Redwood City, CA  94063
                                  Attn: Chief Executive Officer

                                      27
<PAGE>

                  If to TRPL:     Technological Resources Pty Limited
                                  55 Collins Street
                                  South Melbourne
                                  Victoria 3000
                                  Attn: General Manager Commercial
21.   ENTIRE AGREEMENT

      This Agreement, together with its Schedules, which are hereby incorporated
      by reference, contains the whole agreement of the Parties relating to its
      subject matter and it supersedes any and all agreements, understandings or
      commitments in connection with the same subject matter.

22.   RELATIONSHIP

      The Parties agree that this document does not create or evidence a
      relationship between them of joint venture, partnership, employer and
      employee or principal and agent.

23.   DISPUTE RESOLUTION

23.1  Senior Executives.  The Parties agree to co-operate and to use all
      reasonable endeavors to resolve any disputes or differences between them.
      Disputes between the Parties representative on the Management Committee
      which remain unresolved for thirty (30) days will be referred to the Chief
      Executive Officer in the case of MAXYGEN and the Managing Director-
      Research & Technology, in the case of TRPL, for resolution.

23.2  Mediation.  If a dispute arises out of or relates to this Agreement, or
      the breach of it, and if said dispute cannot be settled through
      negotiation, the parties agree first to try in good faith to settle the
      dispute by non-binding mediation under the appropriate rules, if any, for
      such mediation under the rules of the International Chamber of Commerce
      ("ICC") or, if there are no such rules at the time of such mediation,
      under the Commercial Mediation Rules of the American Arbitration
      Association, before resorting to arbitration, or some other dispute
      resolution procedures.

23.3  Arbitration.  If the Parties are unable to resolve any dispute,
      controversy or claim between them arising out of or relating to the
      validity, construction, enforceability or performance of this Agreement,
      including disputes relating to alleged breach or to termination of this
      Agreement (each, a "Dispute"), the Dispute will be finally settled by
      binding arbitration conducted pursuant to the applicable rules of the ICC
      then in effect by one (1) arbitrator appointed in accordance with such
      rules. The arbitration shall take place in Melbourne, Australia, if
      initiated by MAXYGEN, and in Palo Alto, California, if initiated by TRPL.
      The arbitrator will determine what discovery will be permitted, consistent
      with the goal of limiting the cost and time which the parties will expend
      for discovery; provided the arbitrator will permit such discovery as they
      deem necessary to permit an equitable resolution of the dispute; provided,
      the arbitrator shall not order or permit discovery against one Party of a
      type and scope such Party cannot obtain against the other Party for use in
      the arbitration as a result of the laws of the country of residence of the
      other Party. The costs of any arbitration, including administrative fees
      and fees of

                                      28
<PAGE>

      the arbitrator, will be shared equally by the Parties. Each Party will
      bear the cost of its own attorneys' fees and expert fees. The decision
      and/or award rendered by the arbitrator will be written (specifically
      stating the arbitrator's findings of facts as well as the reasons upon
      which the arbitrator's decision is based), final and non-appealable
      (except for an alleged act of corruption or fraud on the part of the
      arbitrator) and may be entered in any court of competent jurisdiction. The
      Parties agree that, any provision of applicable law notwithstanding, they
      will not request, and the arbitrator will have no authority to award,
      punitive or exemplary damages against any Party. The arbitrator will have
      the authority to grant injunctive relief and order specific performance.
      The Parties and the arbitrator will use their best efforts to complete any
      such arbitration within one (1) year, unless a Party can demonstrate to
      the arbitrator that the complexity of the issues or other reasons warrant
      the extension of the time table. In such case, the arbitrator may extend
      such time table as reasonably required. The arbitrator will, in rendering
      its decision, apply the substantive law of the State of California,
      without regard to its conflict of laws provisions.

23.4  Interlocutory Relief.  Compliance with this clause 23 is a condition
      precedent to seeking relief in any court or tribunal in respect of a
      dispute, but nothing in this clause 23 will prevent a Party from seeking
      interlocutory relief in courts of appropriate jurisdiction, pending the
      establishment of the arbitral tribunal or pending the arbitral tribunal's
      determination of the merits of the controversy, if necessary to protect
      the Confidential Information, rights or property of that Party.

24.   FORCE MAJEURE

      Neither Party will be liable for any failure to carry out its obligations
      under this Agreement where such failure is due to any cause beyond the
      reasonable control of such party.

25.   MISCELLANEOUS

25.1  Advice of Counsel.  MAXYGEN and TRPL have each consulted counsel of their
      choice regarding this Agreement, and each acknowledges and agrees that
      this Agreement will not be deemed to have been drafted by one Party or
      another and will be construed accordingly.

25.2  Further Assurances.  At any time or from time to time on and after the
      date of this Agreement, either Party will at the request of the other
      Party (i) deliver to the requesting Party such records, data or other
      documents consistent with the provisions of this Agreement, (ii) execute,
      and deliver or cause to be delivered, all such consents, documents or
      further instruments of assignment, transfer or license, and (iii) take or
      cause to be taken all such actions, as the requesting Party may reasonably
      deem necessary or desirable in order for the requesting Party to obtain
      the full benefits of this Agreement.

25.3  Compliance with Laws.  Each Party will furnish to the other Party any
      information requested or required by that Party during the term of this
      Agreement or any extension of it to enable that Party to comply with the
      requirements of any federal, state or

                                      29
<PAGE>

      government agency. Each Party will comply with all applicable U.S. and
      Australian state, regional and local laws, rules and regulations relating
      to its activities to be performed pursuant to this Agreement, and will
      obtain, at its own expense, all necessary approvals, consents and permits
      required by the applicable agencies of the government of the United States
      and foreign jurisdictions.

25.4  Headings.  The captions to the several clauses and subclauses are not a
      part of this Agreement, but are included for convenience of reference only
      and will not affect its meaning or interpretation.

25.5  Binding Effect.  This Agreement will be binding upon and inure to the
      benefit of the parties and their respective legal representatives,
      successors and permitted assigns.

25.6  Counterparts.  This Agreement may be executed in two counterparts, each of
      which will be deemed an original and which together will constitute one
      instrument.

25.7  Business Unit.  The obligations of TRPL under this Agreement are
      obligations of the Business Unit and MAXYGEN acknowledges that nothing in
      this Agreement binds any other Business Unit of TRPL in so far as the
      obligations of TRPL relate to the conduct of the Project.

25.8  Performance Warranty.  Notwithstanding clause 25.7, TRPL and MAXYGEN
      hereby respectively warrant and guarantee the performance of any and all
      rights and obligations of this Agreement by their Sublicensees and
      Affiliates, in the case of MAXYGEN, and RIO TINTO Group Members, in the
      case of TRPL.

                                      30
<PAGE>

EXECUTED BY THE PARTIES AS AN AGREEMENT

Signed for and on behalf of             )
TECHNOLOGICAL                           )
RESOURCES PTY LIMITED                   )
                                        )
By R. Batterham                         )  /s/ R. Batterham
  -----------------------------------   )
(print name)                            )
                                        )
Chief Technologist                      )
-------------------------------------   )
Title                                   )
                                        )
                                        )
a duly authorized officer of TRPL       )
and in the presence of:                 )
                                        )
   J. M. Elliott                        ) /s/ J. M. Elliott
-------------------------------------   )
Witness                                 )
                                        )
                                        )
Signed for and on behalf of             )
MAXYGEN INC.                            )
                                        )
                                        )
By /s/ Russell Howard                   )
  -----------------------------------   )
   Russell Howard                       )
   Chief Executive Officer              )
                                        )
                                        )
a duly authorized officer of            )
MAXYGEN INC.                            )
and in the presence of:                 )
                                        )
   /s/ Michael Rabson                   )
-------------------------------------   )
Witness                                 )

                                      31<PAGE>

                                                                   EXHIBIT 10.05

(LOGO/LETTERHEAD OF CB COMMERCIAL REAL ESTATE GROUP, INC.)

This Lease between Dove Holdings, Inc.
                   ------------------------------------------------------------
a California Corporation
  -----------------------------------------------------------------------------
("Landlord"), and  Dove Brothers, LLC
                   ------------------------------------------------------------
a California Corporation                                       , ("Tenant"), is
  -------------------------------------------------------------
dated November 7, 1997
      ----------    --

1. LEASE OF PREMISES.

In consideration of the Rent (as defined at Section 5.4) and the provisions of
this Lease, Landlord leases to Tenant and Tenant leases from Landlord the
Premises shown by diagonal lines on the floor plan attached hereto as Exhibit
"A", and further described at Section 21. The Premises are located within the
Building and Project described in Section 2m. Tenant shall have the non-
exclusive right (unless otherwise provided herein) in common with Landlord,
other tenants, subtenants and invitees, to use of the Common Areas (as defined
at Section 2e).

2. DEFINITIONS

As used in this Lease, the following terms shall have the following meanings:

a. Base Rent (initial):$2.60 per month per rentable square foot fully
                        -------------------------------------------------------
                        serviced/$31.20 /year   per year.
                        ---------------------

b. Base Year: The calendar year of 1998
                                   --------------------------------------------
c. Broker(s)
     Landlord's: None
                 --------------------------------------------------------------
     Tenant's:   None
                 --------------------------------------------------------------

In the event that CB Commercial Real Estate Group, Inc. represents both Landlord
and Tenant, Landlord and Tenant hereby confirm that they were timely advised of
the dual representation and that they consent to the same, and that they do not
expect said broker to disclose to either of them the confidential information of
the other party.

d. Commencement Date: December 1, 1997
                      ---------------------------------------------------------

e. Common Areas: the building lobbies, common corridors and hallways,
   restrooms, garage and parking areas, stairways, elevators and other
   generally understood public or common areas. Landlord shall have the right
   to regulate or restrict the use of the Common Areas.

f. Expense Stop: (fill in if applicable): $ Base year 1998
                                            -----------------------------------

g. Expiration Date: November 31, 2000                         , unless otherwise
                    ------------------------------------------
   sooner terminated in accordance with the provisions of this Lease.

h.  Index (Section 5.2): United States Department of Labor, Bureau of Labor
    Statistics Consumer Price Index for All Urban Consumers, San Francisco-
                                                             --------------
    Oakland, San Jose Met. Area  Average, Subgroup "All Items" (1967 = 100).
    ---------------------------

i.  Landlord's Mailing Address: 1241 E Hillsdale Blvd., Foster City, CA 94404
                                -----------------------------------------------

    Tenant's Mailing Address:  1241 E.  Hillsdale Blvd. Foster City, CA 94404
                               ------------------------------------------------

j.  Monthly Installments of Base Rent (initial): $ 2.60 fully serviced per
                                                   ----------------------------
    rentable sq. foot per month.
    -----------------

k.  Parking: Tenant shall be permitted, Free of charge to park 35 cars on a non-
                                                              ----
    exclusive basis in the area(s) designated by Landlord for parking. Tenant
    shall abide by any and all parking regulations and rules established from
    time to time by Landlord or Landlord's parking operator.

i.  Premises: that portion of the Building containing approximately 9,486 square
                                                                   -------
    feet of Rentable Area, shown by diagonal lines on Exhibit "A", located on
    the 1st floor of the Building and known as Suite 110.
       -----                                        -----

m.  Project: the building of which the Premises are a part (the "Building") and
    any other buildings or improvements on the real property (the "Property")
    located at 1241 E Hillsdale Blvd. Foster City, CA
               ----------------------------------------------------------------
    The Project is known as Dove Building                                     .
                            --------------------------------------------------

n.  Rentable Area: as to both the Premises and the Project, the respective
    measurements of floor area as may from time to time be subject to lease by
    Tenant and all tenants of the Project, respectively, as determined by
    Landlord and applied on a consistent basis throughout the Project.

                                      (1)
<PAGE>

[LOGO/LETTERHEAD OF CB COMMERCIAL REAL ESTATE GROUP, INC.]

                    TABLE OF CONTENTS

                                                     PAGE
Article 1   LEASE OF PREMISES ......................    1
Article 2   DEFINITIONS ............................    1
Article 3   EXHIBITS AND ADDENDA ...................    2
Article 4   DELIVERY OF POSSESSION .................    2
Article 5   RENT ...................................    2
Article 6   INTEREST AND LATE CHARGES ..............    4
Article 7   SECURITY DEPOSIT .......................    4
Article 8   TENANTS USE OF THE PREMISES ............    4
Article 9   SERVICES AND UTILITIES .................    5
Article 10  CONDITION OF THE PREMISES ..............    5
Article 11  CONSTRUCTION, REPAIRS AND MAINTENANCE ..    5
Article 12  ALTERATIONS AND ADDITIONS ..............    6
Article 13  LEASEHOLD IMPROVEMENTS; TENANTS PROPERTY    6
Article 14  RULES AND REGULATIONS ..................    7
Article 15  CERTAIN RIGHTS RESERVED BY LANDLORD ....    7
Article 16  ASSIGNMENT AND SUBLETTING ..............    7
Article 17  HOLDING OVER ...........................    8
Article 18  SURRENDER OF PREMISES ..................    8
Article 19  DESTRUCTION OR DAMAGE ..................    8
Article 20  EMINENT DOMAIN .........................    8
Article 21  INDEMNIFICATION ........................    9
Article 22  TENANTS INSURANCE ......................    9
Article 23  WAIVER OF SUBROGATION ..................   10
Article 24  SUBORDINATION AND ATTORNMENT ...........   10
Article 25  TENANT ESTOPPEL CERTIFICATES ...........   10
Article 26  TRANSFER OF LANDLORD'S INTEREST ........   10
Article 27  DEFAULT ................................   10
Article 28  BROKERAGE FEES .........................   11
Article 29  NOTICES ................................   11
Article 30  GOVERNMENT ENERGY OR UTILITY CONTROLS ..   11
Article 31  RELOCATION OF PREMISES .................   11
Article 32  QUIET ENJOYMENT ........................   12
Article 33  OBSERVANCE OF LAW ......................   12
Article 34  FORCE MAJEURE ..........................   12
Article 35  CURING TENANT'S DEFAULTS ...............   12
Article 36  SIGN CONTROL ...........................   12
Article 37  MISCELLANEOUS ..........................   12

<PAGE>

o.  Security Deposit (Section 7):  $ Waived
                                    -------------------------------------------

p.  State: the State of  California
                         ------------------------------------------------------

q.  Tenant's First Adjustment Date (Section 5.2): the first day of the calendar
    month following the Commencement Date plus 6 months.
                                              ---

r.  Tenant's Proportionate Share:   24%. Such share is a fraction, the numerator
                                    --
    of which is the Rentable Area of the Premises, and the denominator of which
    is the Rentable Area of the Project, as determined by Landlord from time to
    time. The Project consists of 1 building(s) containing a total Rentable Area
                                 ---
    of 39,633 square feet.
      --------

s.  Tenant's Use Clause (Article 8):  general business
                                      -----------------------------------------

t.  Term: the period commencing on the Commencement Date and expiring at
    midnight on the Expiration Date.

3.  EXHIBITS AND ADDENDA.

The exhibits and addenda listed below (unless lined out) are incorporated by
reference in this Lease:

a. Exhibit "A"-Floor Plan showing the Premises.
b. Exhibit "B"-Site Plan of the Project.
c. Exhibit "C"- Building Standard Work Letter.
d. Exhibit "D"-Rules and Regulations.
e. Exhibit "E"-Guarantee.
f. Addenda:

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4. DELIVERY OF POSSESSION.

If for any reason Landlord does not deliver possession of the Premises to Tenant
on the Commencement Date, Landlord shall not be subject to any liability for
such failure, the Expiration Date shall not change and the validity of this
Lease shall not be impaired, but Rent shall be abated until delivery of
possession. "Delivery of possession" shall be deemed to occur on the date
Landlord completes Landlord's Work as defined in Exhibit "C" If Landlord permits
Tenant to enter into possession of the Premises before the Commencement Date,
such possession shall be subject to the provisions of this Lease, including,
without limitation, the payment of Rent.

5. RENT.

5.1. Payment of Base Rent. Tenant agrees to pay the Base Rent for the Premises.
Monthly Installments of Base Rent shall be payable in advance on the first day
of each calendar month of the Term. If the Term begins (or ends) on other than
the first (or last) day of a calendar month, the Base Rent for the partial month
shall be prorated on a per diem basis. Tenant shall pay Landlord the first
Monthly Installment of Base Rent when Tenant executes the Lease.

5.2  Adjusted Base Rent.
     a.   The Base Rent (and the corresponding Monthly Installments of Base
     Rent) set forth at Section 2a shall be adjusted annually (the "Adjustment
     Date"), commencing on Tenant's First Adjustment Date. Adjustments, if any,
     shall be based upon increases (if any) in the Index. The Index in
     publication three (3) months before the Commencement Date shall be the
     "Base Index." The Index in publication three (3) months before each
     Adjustment Date shall be the "Comparison Index:" As of each Adjustment
     Date, the Base Rent payable during the ensuing twelve-month period shall be
     determined by increasing the initial Base Rent by a percentage equal to the
     percentage increase, if any, in the Comparison Index over the Base Index.
     If the Comparison Index for any Adjustment Date is equal to or less than
     the Comparison Index for the preceding Adjustment Date (or the Base Index,
     in the case of First Adjustment Date), the Base Rent for the ensuing
     twelve-month period shall remain the amount of Base Rent payable during
     the preceding twelve-month period. When the Base Rent payable as of each
     Adjustment Date is determined, Landlord shall promptly give Tenant written
     notice of such adjusted Base Rent and the manner in which it was computed.
     The Base Rent as so adjusted from time to time shall be the "Base Rent" for
     all purposes under this Lease.

     b.   If at any Adjustment Date the Index no longer exists in the form
     described in this Lease, Landlord may substitute any substantially
     equivalent official index published by the Bureau of Labor Statistics or
     its successor. Landlord shall use any appropriate conversion factors to
     accomplish such substitution. The substitute index shall then become the
     "Index" hereunder.

5.3  Project Operating Costs.
     a.   In order that the Rent payable during the Term reflect any increase in
     Project Operating Costs, Tenant agrees to pay to Landlord as Rent, Tenant's
     Proportionate Share of all increases in costs, expenses and obligations
     attributable to the Project and its operation, all as provided below.

     b.   If, during any calendar year during the Term, Project Operating Costs
     exceed the Project Operating Costs for the Base Year, Tenant shall pay to
     Landlord, in addition to the Base Rent and all other payments due under
     this Lease, an amount equal to Tenant's Proportionate Share of such excess
     Project Operating Costs in accordance with the provisions of this Section
     5.3b.

                                      (2)
<PAGE>

(1)  The term "Project Operating Costs" shall include all those items described
     in the following subparagraphs (a) and (b).

     (a)  All taxes, assessments, water and sewer charges and other similar
     governmental charges levied on or attributable to the Building or Project
     or their operation, including without limitation, (i) real property taxes
     or assessments levied or assessed against the Building or Project, (ii)
     assessments or charges levied or assessed against the Building or Project
     by any redevelopment agency, (iii) any tax measured by gross rentals
     received from the leasing of the Premises, Building or Project, excluding
     any net income, franchise, capital stock, estate or inheritance taxes
     imposed by the State or federal government or their agencies, branches or
     departments; provided that if at any time during the Term any governmental
     entity levies, assesses or imposes on Landlord any (1) general or special,
     ad valorem or specific, excise, capital levy or other tax, assessment, levy
     or charge directly on the Rent received under this Lease or on the rent
     received under any other leases of space in the Building or Project, or (2)
     any license fee, excise or franchise tax, assessment, levy or charge
     measured by or based, in whole or in part, upon such rent, or (3) any
     transfer, transaction, or similar tax, assessment, levy or charge based
     directly or indirectly upon the transaction represented by this Lease or
     such other leases, or (4) any occupancy, use, per capita or other tax,
     assessment, levy or charge based directly or indirectly upon the use or
     occupancy of the Premises or other premises within the Building or Project,
     then any such taxes, assessments, levies and charges shall be deemed to be
     included in the term Project Operating Costs. If at any time during the
     Term the assessed valuation of, or taxes on, the Project are not based on a
     completed Project having at least eighty-five percent (85%) of the Rentable
     Area occupied, then the "taxes" component of Project Operating Costs shall
     be adjusted by Landlord to reasonably approximate the taxes which would
     have been payable if the Project were completed and at least eighty-five
     percent (85%) occupied.

     (b)  Operating costs incurred by Landlord in maintaining and operating the
     Building and Project, including without limitation the following: costs of
     (1) utilities; (2) supplies; (3) insurance (including public liability,
     property damage, earthquake, and fire and extended coverage insurance for
     the full replacement cost of the Building and Project as required by
     Landlord or its lenders for the Project; (4) services of independent
     contractors; (5) compensation (including employment taxes and fringe
     benefits) of all persons who perform duties connected with the operation,
     maintenance, repair or overhaul of the Building or Project, and equipment,
     improvements and facilities located within the Project, including without
     limitation engineers, janitors, painters, floor waxers, window washers,
     security and parking personnel and gardeners (but excluding persons
     performing services not uniformly available to or performed for
     substantially all Building or Project tenants); (6) operation and
     maintenance of a room for delivery and distribution of mail to tenants of
     the Building or Project as required by the U.S. Postal Service (including,
     without limitation, an amount equal to the fair market rental value of the
     mail room premises); (7) management of the Building or Project, whether
     managed by Landlord or an independent contractor (including, without
     limitation, an amount equal to the fair market value of any on-site
     manager's office); (8) rental expenses for (or a reasonable depreciation
     allowance on) personal property used in the maintenance, operation or
     repair of the Building or Project; (9) costs, expenditures or charges
     (whether capitalized or not) required by any governmental or quasi-
     governmental authority; (10) amortization of capital expenses (including
     financing costs) (i) required by a governmental entity for energy
     conservation or life safety purposes, or (ii) made by Landlord to reduce
     Project Operating Costs; and (11) any other costs or expenses incurred by
     Landlord under this Lease and not otherwise reimbursed by tenants of the
     Project. If at any time during the Term, less than eighty-five percent
     (85%) of the Rentable Area of the Project is occupied, the "operating
     costs" component of Project Operating Costs shall be adjusted by Landlord
     to reasonably approximate the operating costs which would have been
     incurred if the Project had been at least eighty-five percent (85%)
     occupied.

(2)  Tenant's Proportionate Share of Project Operating Costs shall be payable by
     Tenant to Landlord as follows:

     (a)  Beginning with the calendar year following the Base Year and for each
     calendar year thereafter ("Comparison Year"), Tenant shall pay Landlord an
     amount equal to Tenant's Proportionate Share of the Project Operating Costs
     incurred by Landlord in the Comparison Year which exceeds the total amount
     of Project Operating Costs payable by Landlord for the Base Year. This
     excess is referred to as the "Excess Expenses."

     (b)  To provide for current payments of Excess Expenses, Tenant shall, at
     Landlord's request, pay as additional rent during each Comparison Year, an
     amount equal to Tenant's Proportionate Share of the Excess Expenses payable
     during such Comparison Year, as estimated by Landlord from time to time.
     Such payments shall be made in monthly installments, commencing on the
     first day of the month following the month in which Landlord notifies
     Tenant of the amount it is to pay hereunder and continuing until the first
     day of the month following the month in which Landlord gives Tenant a new
     notice of estimated Excess Expenses. It is the intention hereunder to
     estimate from time to time the amount of the Excess Expenses for each
     Comparison Year and Tenant's Proportionate Share thereof, and then to make
     an adjustment in the following year based on the actual Excess Expenses
     incurred for that Comparison Year.

     (c)  On or before April 1 of each Comparison Year after the first
     Comparison Year (or as soon thereafter as is practical) Landlord shall
     deliver to Tenant a statement setting forth Tenant's Proportionate Share of
     the Excess Expenses for the preceding Comparison Year. If Tenant's
     Proportionate Share of the actual Excess Expenses for the previous
     Comparison Year exceeds the total of the estimated monthly payments made by
     Tenant for such year, Tenant shall pay Landlord the amount of the
     deficiency within ten (10) days of the receipt of the statement. If such
     total exceeds Tenant's Proportionate Share of the actual Excess Expenses
     for such Comparison Year, then Landlord shall credit against Tenant's next
     ensuing monthly installment(s) of additional rent an amount equal to the
     difference until the credit is exhausted. If a credit is due from Landlord
     on the Expiration Date, Landlord shall pay Tenant the amount of the credit.
     The obligations of Tenant and Landlord to make payments required under this
     Section 5.3 shall survive the Expiration Date.

     (d)  Tenant's Proportionate Share of Excess Expenses in any Comparison Year
     having less than 365 days shall be appropriately prorated.

     (e)  If any dispute arises as to the amount of any, additional rent due
     hereunder, Tenant shall have the right after reasonable notice and at
     reasonable times to inspect Landlord's accounting records at Landlord's
     accounting office and, if after such inspection Tenant still disputes the
     amount of additional rent owed, a certification as to the proper amount
     shall be made by Landlord's certified public accountant, which
     certification shall be final and conclusive. Tenant agrees to pay the cost
     of such certification unless it is determined that Landlord's original
     statement overstated Project Operating Costs by more than five percent
     (5%).
                                      (3)
<PAGE>

     (f)  If this Lease sets forth an Expense Stop at Section 2f, then during
     the Term Tenant shall be liable for Tenant's Proportionate Share of any
     actual Project Operating Costs which exceed the amount of the Expense Stop.
     Tenant shall make current payments of such excess costs during the Term in
     the same manner as is provided for payment of Excess Expenses under the
     applicable provisions of Section 5.3b(2)(b) and (c) above.

5.4  Definition of Rent. All costs and expenses which Tenant assumes or agrees
to pay to Landlord under this Lease shall be deemed additional rent (which,
together with the Base Rent is sometimes referred to as the "Rent"). The Rent
shall be paid to the Building manager (or other person) and at such place, as
Landlord may from time to time designate in writing, without any prior demand
therefor and without deduction or offset, in lawful money of the United States
of America.

5.5  Rent Control. If the amount of Rent or any other payment due under this
Lease violates the terms of any governmental restrictions on such Rent or
payment, then the Rent or payment due during the period of such restrictions
shall be the maximum amount allowable under those restrictions. Upon termination
of the restrictions, Landlord shall, to the extent it is legally permitted,
recover from Tenant the difference between the amounts received during the
period of the restrictions and the amounts Landlord would have received had
there been no restrictions.

5.6  Taxes Payable by Tenant. In addition to the Rent and any other charges to
be paid by Tenant hereunder, Tenant shall reimburse Landlord upon demand for any
and all taxes payable by Landlord (other than net income taxes) which are not
otherwise reimbursable under this Lease, whether or not now customary or within
the contemplation of the parties; where such taxes are upon, measured by or
reasonably attributable to (a) the cost or value of Tenant's equipment,
furniture, fixtures and other personal property located in the Premises, or the
cost or value of any leasehold improvements made in or to the Premises by or for
Tenant, other than Building Standard Work made by Landlord, regardless of
whether title to such improvements is held by Tenant or Landlord; (b) the gross
or net Rent payable under this Lease, including, without limitation, any rental
or gross receipts tax levied by any taxing authority with respect to the receipt
of the Rent hereunder; (c) the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises or
any portion thereof; or (d) this transaction or any document to which Tenant is
a party creating or transferring an interest or an estate in the Premises. If it
becomes unlawful for Tenant to reimburse Landlord for any costs as required
under this Lease, the Base Rent shall be revised to net Landlord the same net
Rent after imposition of any tax or other charge upon Landlord as would have
been payable to Landlord but for the reimbursement being unlawful.

6.  INTEREST AND LATE CHARGES.

If Tenant fails to pay when due any Rent or other amounts or charges which
Tenant is obligated to pay under the terms of this Lease, the unpaid amounts
shall bear interest at the maximum rate then allowed by law. Tenant acknowledges
that the late payment of any Monthly Installment of Base Rent will cause
Landlord to lose the use of that money and incur costs and expenses not
contemplated under this Lease, including without limitation, administrative and
collection costs and processing and accounting expenses, the exact amount of
which is extremely difficult to ascertain. Therefore, in addition to interest,
if any such installment is not received by Landlord within ten (10) days from
the date it is due, Tenant shall pay Landlord a late charge equal to ten percent
(10%) of such installment. Landlord and Tenant agree that this late charge
represents a reasonable estimate of such costs and expenses and is fair
compensation to Landlord for the loss suffered from such nonpayment by Tenant.
Acceptance of any interest or late charge shall not constitute a waiver of
Tenant's default with respect to such nonpayment by Tenant nor prevent Landlord
from exercising any other rights or remedies available to Landlord under this
Lease.

7.  SECURITY DEPOSIT.

Tenant agrees to deposit with Landlord the Security Deposit set forth at Section
2.0 upon execution of this Lease, as security for Tenant's faithful performance
of its obligations under this Lease. Landlord and Tenant agree that the Security
Deposit may be commingled with funds of Landlord and Landlord shall have no
obligation or liability for payment of interest on such deposit. Tenant shall
not mortgage, assign, transfer or encumber the Security Deposit without the
prior written consent of Landlord and any attempt by Tenant to do so shall be
void, without force or effect and shall not be binding upon Landlord.

If Tenant fails to pay any Rent or other amount when due and payable under this
Lease, or fails to perform any of the terms hereof, Landlord may appropriate and
apply or use all or any portion of the Security Deposit for Rent payments or any
other amount then due and unpaid, for payment of any amount for which Landlord
has become obligated as a result of Tenant's default or breach, and for any loss
or damage sustained by Landlord as a result of Tenant's default or breach, and
Landlord may so apply or use this deposit without prejudice to any other remedy
Landlord may have by reason of Tenant's default or breach. If Landlord so uses
any of the Security Deposit, Tenant shall, within ten (10) days after written
demand therefor, restore the Security Deposit to the full amount originally
deposited; Tenant's failure to do so shall constitute an act of default
hereunder and Landlord shall have the right to exercise any remedy provided for
at Article 27 hereof. Within fifteen (15) days after the Term (or any extension
thereof) has expired or Tenant has vacated the Premises, whichever shall last
occur, and provided Tenant is not then in default on any of its obligations
hereunder, Landlord shall return the Security Deposit to Tenant, or, if Tenant
has assigned its interest under this Lease, to the last assignee of Tenant. If
Landlord sells its interest in the Premises, Landlord may deliver this deposit
to the purchaser of Landlord's interest and thereupon be relieved of any further
liability or obligation with respect to the Security Deposit.

8.  TENANT'S USE OF THE PREMISES.

Tenant shall use the Premises solely for the purposes set forth in Tenant's Use
Clause. Tenant shall not use or occupy the Premises in violation of law or any
covenant, condition or restriction affecting the Building or Project or the
certificate of occupancy issued for the Building or Project, and shall, upon
notice from Landlord, immediately discontinue any use of the Premises which is
declared by any governmental authority having jurisdiction to be a violation of
law or the certificate of occupancy. Tenant, at Tenant's own cost and expense,
shall comply with all laws, ordinances, regulations, rules and/or any directions
of any governmental agencies or authorities having jurisdiction which shall, by
reason of the nature of Tenant's use or occupancy of the Premises, impose any
duty upon Tenant or Landlord with respect to the Premises or its use or
occupation. A judgment of any court of competent jurisdiction or the admission
by Tenant in any action or proceeding against Tenant that Tenant has violated
any such laws, ordinances, regulations, rules and/or directions in the use of
the Premises shall be deemed to be a conclusive determination of that fact as
between Landlord and Tenant. Tenant shall not do or permit to be done anything
which will invalidate or increase the cost of any fire, extended coverage or
other insurance policy covering the Building or Project and/or property located
therein, and shall comply with all rules, orders, regulations, requirements and
recommendations of the Insurance Services Office or any other organization
performing a similar function. Tenant shall

                                      (4)
<PAGE>

promptly upon demand reimburse Landlord for any additional premium charged for
such policy by reason of Tenant's failure to comply with the provisions of this
Article. Tenant shall not do or permit anything to be done in or about the
Premises which will in any way obstruct or interfere with the rights of other
tenants or occupants of the Building or Project, or injure or annoy them, or use
or allow the Premises to be used for any improper, immoral, unlawful or
objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance
in, on or about the Premises. Tenant shall not commit or suffer to be committed
any waste in or upon the Premises.

9.  SERVICES AND UTILITIES.

Provided that Tenant is not in default hereunder, Landlord agrees to furnish to
the Premises during generally recognized business days, and during hours
determined by Landlord in its sole discretion, and subject to the Rules and
Regulations of the Building or Project, electricity for normal desk top office
equipment and normal copying equipment, and heating, ventilation and air
conditioning ("HVAC") as required in Landlord's judgment for the comfortable use
and occupancy of the Premises. If Tenant desires HVAC at any other time,
Landlord shall use reasonable efforts to furnish such service upon reasonable
notice from Tenant and Tenant shall pay Landlord's charges therefor on demand.
Landlord shall also maintain and keep lighted the common stairs, common entries
and restrooms in the Building. Landlord shall not be in default hereunder or be
liable for any damages directly or indirectly resulting from, nor shall the Rent
be abated by reason of (i) the installation, use or interruption of use of any
equipment in connection with the furnishing of any of the foregoing services,
(ii) failure to furnish or delay in furnishing any such services where such
failure or delay is caused by accident or any condition or event beyond the
reasonable control of Landlord, or by the making of necessary repairs or
improvements to the Premises, Building or Project, or (iii) the limitation,
curtailment or rationing of, or restrictions on, use of water, electricity, gas
or any other form of energy serving the Premises, Building or Project. Landlord
shall not be liable under any circumstances for a loss of or injury to property
or business, however occurring, through or in connection with or incidental to
failure to furnish any such services. If Tenant uses heat generating machines or
equipment in the Premises which affect the temperature otherwise maintained by
the HVAC system, Landlord reserves the right to install supplementary air
conditioning units in the Premises and the cost thereof, including the cost of
installation, operation and maintenance thereof, shall be paid by Tenant to
Landlord upon demand by Landlord.

Tenant shall not, without the written consent of Landlord, use any apparatus or
device in the Premises, including without limitation, electronic data processing
machines, punch card machines or machines using in excess of 120 volts, which
consumes more electricity than is usually furnished or supplied for the use of
premises as general office space, as determined by Landlord. Tenant shall not
connect any apparatus with electric current except through, existing electrical
outlets in the Premises. Tenant shall not consume water or electric current in
excess of that usually furnished or supplied for the use of premises as general
office space (as determined by Landlord), without first procuring the written
consent of Landlord, which Landlord may refuse, and in the event of consent,
Landlord may have installed a water heater or electrical current meter in the
Premises to measure the amount of water or electric current consumed. The cost
of any, such meter and of its installation, maintenance and repair shall be paid
for by the Tenant and Tenant agrees to pay to Landlord promptly upon demand for
all such water and electric current consumed as shown by said meters, at the
rates charged for such services by the local public utility plus any additional
expense incurred in keeping account of the water and electric current so
consumed. If a separate meter is not installed, the excess cost for such water
and electric current shall be established by an estimate made by a utility
company or electrical engineer hired by Landlord at Tenant's expense.

Nothing contained in this Article shall restrict Landlord's right to require at
any time separate metering of utilities furnished to the Premises. In the event
utilities are separately metered, Tenant shall pay promptly upon demand for all
utilities consumed at utility rates charged by the local public utility plus any
additional expense incurred by Landlord in keeping account of the utilities so
consumed. Tenant shall be responsible for the maintenance and repair of any such
meters at its sole cost.

Landlord shall furnish elevator service, lighting replacement for building
standard lights, restroom supplies, window washing and janitor services in a
manner that such services are customarily furnished to comparable office
buildings in the area.

10. CONDITION OF THE PREMISES.

Tenant's taking possession of the Premises shall be deemed conclusive evidence
that as of the date of taking possession the Premises are in good order and
satisfactory condition, except for such matters as to which Tenant gave Landlord
notice on or before the Commencement Date. No promise of Landlord to alter,
remodel, repair or improve the Premises, the Building or the Project and no
representation, express or implied, respecting any matter or thing relating to
the Premises, Building, Project or this Lease (including, without limitation,
the condition of the Premises, the Building or the Project) have been made to
Tenant by Landlord or its Broker or Sales Agent, other than as may be contained
herein or in a separate exhibit or addendum signed by Landlord and Tenant.

11.  CONSTRUCTION, REPAIRS AND MAINTENANCE.

     a. Landlord's; Obligations. Landlord shall perform Landlord's Work to the
     Premises. Landlord shall maintain in good order, condition and repair the
     Building and all other portions of the Premises not the obligation of
     Tenant or of any other tenant in the Building.

     b. Tenant's Obligations.

        (1) Tenant shall perform Tenant's Work to the Premises as described in
        Exhibit "C."

        (2) Tenant at Tenant's sole expense shall, except for services furnished
        by Landlord pursuant to Article 9 hereof, maintain the Premises in good
        order, condition and repair, including the interior surfaces of the
        ceilings, walls and floors, all doors, all interior windows, all
        plumbing, pipes and fixtures, electrical wiring, switches and fixtures,
        Building Standard furnishings and special items and equipment installed
        by or at the expense of Tenant.

        (3) Tenant shall be responsible for all repairs and alterations in and
        to the Premises, Building and Project and the facilities and systems
        thereof, the need for which arises out of (i) Tenant's use or occupancy
        of the Premises, (ii) the installation, removal, use or operation of
        Tenant's Property (as defined in Article 13) in the Premises, (iii) the
        moving of Tenant's Property into or out of the Building, or (iv) the
        act, omission, misuse or negligence of Tenant, its agents contractors,
        employees or invitees.

                                      (5)
<PAGE>

        (4) If Tenant fails to maintain the Premises in good order, condition
        and repair, Landlord shall give Tenant notice to do such acts as are
        reasonably required to so maintain the Premises. If Tenant fails to
        promptly commence such work and diligently prosecute it to completion,
        then Landlord shall have the right to do such acts and expend such funds
        at the expense of Tenant as are reasonably required to perform such
        work. Any amount so expended by Landlord shall be paid by Tenant
        promptly after demand with interest at the prime commercial rate then
        being charged by Bank of America NT & SA plus two percent (2%) per
        annum, from the date of such work, but not to exceed the maximum rate
        then allowed by law. Landlord shall have no liability to Tenant for any
        damage, inconvenience, or interference with the use of the Premises by
        Tenant as a result of performing any such work.

     c. Compliance with Law. Landlord and Tenant shall each do all acts required
     to comply with all applicable laws, ordinances, and rules of any public
     authority relating to their respective maintenance obligations as set forth
     herein.

     d. Waiver by Tenant. Tenant expressly waives the benefits of any statute
     now or hereafter in effect which would otherwise afford the Tenant the
     right to make repairs at Landlord's expense or to terminate this Lease
     because of Landlord's failure to keep the Premises in good order, condition
     and repair.

     e. Load and Equipment Limits. Tenant shall not place a load upon any floor
     of the Premises which exceeds the load per square foot which such floor was
     designed to carry, as determined by Landlord or Landlord's structural
     engineer. The cost of any such determination made by Landlord's structural
     engineer shall be paid for by Tenant upon demand. Tenant shall not install
     business machines or mechanical equipment which cause noise or vibration to
     such a degree as to be objectionable to Landlord or other Building tenants.

     f. Except as otherwise expressly provided in this Lease, Landlord shall
     have no liability to Tenant nor shall Tenant's obligations under this Lease
     be reduced or abated in any manner whatsoever by reason of any
     inconvenience, annoyance, interruption or injury to business arising from
     Landlord's making any repairs or changes which Landlord is required or
     permitted by this Lease or by any other tenant's lease or required by law
     to make in or to any portion of the Project, Building or the Premises.
     Landlord shall nevertheless use reasonable efforts to minimize any
     interference with Tenant's business in the Premises.

     g. Tenant shall give Landlord prompt notice of any damage to or defective
     condition in any part or appurtenance of the Building's mechanical,
     electrical, plumbing, HVAC or other systems serving, located in, or passing
     through the Premises.

     h. Upon the expiration or earlier termination of this Lease, Tenant shall
     return the Premises to Landlord clean and in the same condition as on the
     date Tenant took possession, except for normal wear and tear. Any damage to
     the Premises, including any structural damage, resulting from Tenant's use
     or from the removal of Tenant's fixtures, furnishings and equipment
     pursuant to Section 13b shall be repaired by Tenant at Tenant's expense.

12.  ALTERATIONS AND ADDITIONS.

     a. Tenant shall not make any additions, alterations or improvements to the
     Premises without obtaining the prior written consent of Landlord.
     Landlord's consent may be conditioned on Tenant's removing any such
     additions, alterations or improvements upon the expiration of the Term and
     restoring the Premises to the same condition as on the date Tenant took
     possession. All work with respect to any addition, alteration or
     improvement shall be done in a good and workmanlike manner by properly
     qualified and licensed personnel approved by Landlord, and such work shall
     be diligently prosecuted to completion. Landlord may, at Landlord's option,
     require that any such work be performed by Landlord's contractor, in which
     case the cost of such work shall be paid for before commencement of the
     work. Tenant shall pay to Landlord upon completion of any such work by
     Landlord's contractor, an administrative fee of fifteen percent (15%) of
     the cost of the work.

     b. Tenant shall pay the costs of any work done on the Premises pursuant to
     Section 12a, and shall keep the Premises, Building and Project free and
     clear of liens of any kind. Tenant shall indemnify, defend against and keep
     Landlord free and harmless from all liability, loss, damage, costs,
     attorneys' fees and any other expense incurred on account of claims by any
     person performing work or furnishing materials or supplies for Tenant or
     any person claiming under Tenant.

     Tenant shall keep Tenant's leasehold interest, and any additions or
     improvements which are or become the property of Landlord under this Lease,
     free and clear of all attachment or judgment liens. Before the actual
     commencement of any work for which a claim or lien may be filed, Tenant
     shall give Landlord notice of the intended commencement date a sufficient
     time before that date to enable Landlord to post notices of
     non-responsibility or any other notices which Landlord deems necessary for
     the proper protection of Landlord's interest in the Premises, Building or
     the Project, and Landlord shall have the right to enter the Premises and
     post such notices at any reasonable time.

     c. Landlord may require, at Landlord's sole option, that Tenant provide to
     Landlord, at Tenant's expense, a lien and completion bond in an amount
     equal to at least one and one-half (1 1/2 ) times the total estimated cost
     of any additions, alterations or improvements to be made in or to the
     Premises, to protect Landlord against any liability for mechanic's and
     materialmen's liens and to insure timely completion of the work. Nothing
     contained in this Section 12c shall relieve Tenant of its obligation under
     Section 12b to keep the Premises, Building and Project free of all liens.

     d. Unless their removal is required by Landlord as provided in Section 12a,
     all additions, alterations and improvements made to the Premises shall
     become the property of Landlord and be surrendered with the Premises upon
     the expiration of the Term; provided, however, Tenant's equipment,
     machinery and trade fixtures which can be removed without damage to the
     Premises shall remain the property of Tenant and may be removed, subject to
     the provisions of Section 13b.

13.  LEASEHOLD IMPROVEMENTS; TENANT'S PROPERTY.

     a. All fixtures, equipment, improvements and appurtenances attached to or
     built into the Premises at the commencement of or during the Term, whether
     or not by or at the expense of Tenant ("Leasehold Improvements"), shall be
     and remain a part of the Premises, shall be the property of Landlord and
     shall not be removed by Tenant, except as expressly provided in Section
     13b.

                                      (6)
<PAGE>

     b. All movable partitions, business and trade fixtures, machinery and
     equipment, communications equipment and office equipment located in the
     Premises and acquired by or for the account of Tenant, without expense to
     Landlord, which can be removed without structural damage to the Building,
     and all furniture, furnishings and other articles of movable personal
     property owned by Tenant and located in the Premises (collectively
     "Tenant's Property") shall be and shall remain the property of Tenant and
     may be removed by Tenant at any time during the Term; provided that if any
     of Tenant's Property is removed, Tenant shall promptly repair any damage to
     the Premises or to the Building resulting from such removal.

14.  RULES AND REGULATIONS.

Tenant agrees to comply with (and cause its agents, contractors, employees and
invitees to comply with) the rules and regulations and with such reasonable
modifications thereof and additions thereto as Landlord may from time to time
make. Landlord shall not be responsible for any violation of said rules and
regulations by other tenants or occupants of the Building or Project.

15.  CERTAIN RIGHTS RESERVED BY LANDLORD.

Landlord reserves the following rights, exercisable without liability to Tenant
for (a) damage or injury to property, person or business, (b) causing an actual
or constructive eviction from the Premises, or (c) disturbing Tenant's use or
possession of the Premises:

     a. To name the Building and Project and to change the name or street
     address of the Building or Project;

     b. To install and maintain all signs on the exterior and interior of the
     Building and Project;

     c. To have pass keys to the Premises and all doors within the Premises,
     excluding Tenant's vaults and safes;

     d. At any time during the Term, and on reasonable prior notice to Tenant,
     to inspect the Premises, and to show the Premises to any prospective
     purchaser or mortgagee of the Project, or to any assignee of any mortgage
     on the Project, or to others having an interest in the Project or Landlord,
     and during the last six months of the Term, to show the Premises to
     prospective tenants thereof; and

     e. To enter the Premises for the purpose of making inspections, repairs,
     alterations, additions or improvements to the Premises or the Building
     (including, without limitation, checking, calibrating, adjusting or
     balancing controls and other parts of the HVAC system), and to take all
     steps as may be necessary or desirable for the safety, protection,
     maintenance or preservation of the Premises or the Building or Landlord's
     interest therein, or as may be necessary or desirable for the operation or
     improvement of the Building or in order to comply with laws, orders or
     requirements of governmental or other authority. Landlord agrees to use its
     best efforts (except in an emergency) to minimize interference with
     Tenant's business in the Premises in the course of any such entry.

16.  ASSIGNMENT AND SUBLETTING.

No assignment of this Lease or sublease of all or any part of the Premises shall
be permitted, except as provided in this Article 16.

     a. Tenant shall not, without the prior written consent of Landlord, assign
     or hypothecate this Lease or any interest herein or sublet the Premises or
     any part thereof, or permit the use of the Premises by any party other than
     Tenant. Any of the foregoing acts without such consent shall be void and
     shall, at the option of Landlord, terminate this Lease. This Lease shall
     not, nor shall any interest of Tenant herein, be assignable by operation of
     law without the written consent of Landlord.

     b. If at any time or from time to time during the Term Tenant desires to
     assign this Lease or sublet all or any part of the Premises, Tenant shall
     give notice to Landlord setting forth the terms and provisions of the
     proposed assignment or sublease, and the identity of the proposed assignee
     or subtenant. Tenant shall promptly supply Landlord with such information
     concerning the business background and financial condition of such proposed
     assignee or subtenant as Landlord may reasonably request. Landlord shall
     have the option, exercisable by notice given to Tenant within twenty (20)
     days after Tenant's notice is given, either to sublet such space from
     Tenant at the rental and on the other terms set forth in this Lease for the
     term set forth in Tenant's notice, or, in the case of an assignment, to
     terminate this Lease. If Landlord does not exercise such option, Tenant may
     assign the Lease or sublet such space to such proposed assignee or
     subtenant on the following further conditions:

          (1) Landlord shall have the right to approve such proposed assignee or
          subtenant, which approval shall not be unreasonably withheld;

          (2) The assignment or sublease shall be on the same terms set forth in
          the notice given to Landlord;

          (3) No assignment or sublease shall be valid and no assignee or
          sublessee shall take possession of the Premises until an executed
          counterpart of such assignment or sublease has been delivered to
          Landlord;

          (4) No assignee or sublessee shall have a further right to assign or
          sublet except on the terms herein contained; and

          (5) Any sums or other economic consideration received by Tenant as a
          result of such assignment or subletting, however denominated under the
          assignment or sublease, which exceed, in the aggregate, (i) the total
          sums which Tenant is obligated to pay Landlord under this Lease
          (prorated to reflect obligations allocable to any portion of the
          Premises subleased), plus (ii) any real estate brokerage commissions
          or fees payable in connection with such assignment or subletting,
          shall be paid to Landlord as additional rent under this Lease without
          affecting or reducing any other obligations of Tenant hereunder.

     c. Notwithstanding the provisions of paragraphs a and b above, Tenant may
     assign this Lease or sublet the Premises or any portion thereof, without
     Landlord's consent and without extending any recapture or termination
     option to Landlord, to any corporation which controls, is controlled by or
     is under common control with Tenant, or to any corporation resulting from a
     merger or consolidation with Tenant, or to any person or entity which
     acquires all the assets of Tenant's business as a going concern, provided
     that (i) the assignee or sublessee assumes, in full, the obligations of
     Tenant under this Lease, (ii) Tenant remains fully liable under this Lease,
     and (iii) the use of the Premises under Article 8 remains unchanged.

                                      (7)
<PAGE>

     d. No subletting or assignment shall release Tenant of Tenant's obligations
     under this Lease or alter the primary liability of Tenant to pay the Rent
     and to perform all other obligations to be performed by Tenant hereunder.
     The acceptance of Rent by Landlord from any other person shall not be
     deemed to be a waiver by Landlord of any provision hereof. Consent to one
     assignment or subletting shall not be deemed consent to any subsequent
     assignment or subletting. In the event of default by an assignee or
     subtenant of Tenant or any successor of Tenant in the performance of any of
     the terms hereof, Landlord may proceed directly against Tenant without the
     necessity of exhausting remedies against such assignee, subtenant or
     successor. Landlord may consent to subsequent assignments of the Lease or
     sublettings or amendments or modifications to the Lease with assignees of
     Tenant, without notifying Tenant, or any successor of Tenant, and without
     obtaining its or their consent thereto and any such actions shall not
     relieve Tenant of liability under this Lease.

     e. If Tenant assigns the Lease or sublets the Premises or requests the
     consent of Landlord to any assignment or subletting or if Tenant requests
     the consent of Landlord for any act that Tenant proposes to do, then Tenant
     shall, upon demand, pay Landlord an administrative fee of One Hundred Fifty
     and No/100ths Dollars ($150.00) plus any attorneys' fees reasonably
     incurred by Landlord in connection with such act or request.

17.  HOLDING OVER.

If after expiration of the Term, Tenant remains in possession of the Premises
with Landlord's permission (express or implied), Tenant shall become a tenant
from month to month only, upon all the provisions of this Lease (except as to
term and Base Rent), but the "Monthly Installments of Base Rent" payable by
Tenant shall be increased to one hundred fifty percent (150%) of the Monthly
Installments of Base Rent payable by Tenant at the expiration of the Term. Such
monthly rent shall be payable in advance on or before the first day of each
month. If either party desires to terminate such month to month tenancy, it
shall give the other party not less than thirty (30) days advance written notice
of the date of termination.

18.  SURRENDER OF PREMISES.

     a. Tenant shall peaceably surrender the Premises to Landlord on the
     Expiration Date, in broom-clean condition and in as good condition as when
     Tenant took possession, except for (i) reasonable wear and tear, (ii) loss
     by fire or other casualty, and (iii) loss by condemnation. Tenant shall, on
     Landlord's request, remove Tenant's Property on or before the Expiration
     Date and promptly repair all damage to the Premises or Building caused by
     such removal.

     b. If Tenant abandons or surrenders the Premises, or is dispossessed by
     process of law or otherwise, any of Tenant's Property left on the Premises
     shall be deemed to be abandoned, and, at Landlord's option, title shall
     pass to Landlord under this Lease as by a bill of sale. If Landlord elects
     to remove all or any part of such Tenant's Property, the cost of removal,
     including repairing any damage to the Premises or Building caused by such
     removal, shall be paid by Tenant. On the Expiration Date Tenant shall
     surrender all keys to the Premises.

19.  DESTRUCTION OR DAMAGE.

     a. If the Premises or the portion of the Building necessary for Tenant's
     occupancy is damaged by fire, earthquake, act of God, the elements of other
     casualty, Landlord shall, subject to the provisions of this Article,
     promptly repair the damage, if such repairs can, in Landlord's opinion, be
     completed within (90) ninety days. If Landlord determines that repairs can
     be completed within ninety (90) days, this Lease shall remain in full force
     and effect, except that if such damage is not the result of the negligence
     or willful misconduct of Tenant or Tenant's agents, employees, contractors,
     licensees or invitees, the Base Rent shall be abated to the extent Tenant's
     use of the Premises is impaired, commencing with the date of damage and
     continuing until completion of the repairs required of Landlord under
     Section 19d.

     b. If in Landlord's opinion, such repairs to the Premises or portion of the
     Building necessary for Tenant's occupancy cannot be completed within ninety
     (90) days, Landlord may elect, upon notice to Tenant given within thirty
     (30) days after the date of such fire or other casualty, to repair such
     damage, in which event this Lease shall continue in full force and effect,
     but the Base Rent shall be partially abated as provided in Section 19a. If
     Landlord does not so elect to make such repairs, this Lease shall terminate
     as of the date of such fire or other casualty.

     c. If any other portion of the Building or Project is totally destroyed or
     damaged to the extent that in Landlord's opinion repair thereof cannot be
     completed within ninety (90) days, Landlord may elect upon notice to Tenant
     given within thirty (30) days after the date of such fire or other
     casualty, to repair such damage, in which event this Lease shall continue
     in full force and effect, but the Base Rent shall be partially abated as
     provided in Section 19a. If Landlord does not elect to make such repairs,
     this Lease shall terminate as of the date of such fire Or other casualty.

     d. If the Premises are to be repaired under this Article, Landlord shall
     repair at its cost any injury or damage to the Building and Building
     Standard Work in the Premises. Tenant shall be responsible at its sole cost
     and expense for the repair, restoration and replacement of any other
     Leasehold Improvements and Tenant's Property. Landlord shall not be liable
     for any loss of business, inconvenience or annoyance arising from any
     repair or restoration of any portion of the Premises, Building or Project
     as a result of any damage from fire or other casualty.

     e. This Lease shall be considered an express agreement governing any case
     of damage to or destruction of the Premises, Building or Project by fire or
     other casualty, and any present or future law which purports to govern the
     rights of Landlord and Tenant in such circumstances in the absence of
     express agreement, shall have no application.

20.  EMINENT DOMAIN.

     a. If the whole of the Building or Premises is lawfully taken by
     condemnation or in any other manner for any public or quasi-public purpose,
     this Lease shall terminate as of the date of such taking, and Rent shall be
     prorated to such date. If less than the whole of the Building or Premises
     is so taken, this Lease shall be unaffected by such taking, provided that
     (i) Tenant shall have the right to terminate this Lease by notice to
     Landlord given within ninety (90) days after the date of such taking if
     twenty percent (20%) or more of the Premises is taken and the remaining
     area of the Premises is not reasonably sufficient for Tenant to continue
     operation of its business, and (ii) Landlord shall have the right to
     terminate this Lease by notice to Tenant given within ninety (90) days
     after the date of such taking. If either Landlord or Tenant so elects to
     terminate this Lease, the Lease shall terminate on the thirtieth (30th) day
     after either such notice. The Rent shall be prorated to the date of
     termination. If this Lease continues in force upon such partial taking, the
     Base Rent and Tenant's Proportionate Share shall be equitably adjusted
     according to the remaining Rentable Area of the Premises and Project.

                                      (8)
<PAGE>

     b. In the event of any taking, partial or whole, all of the proceeds of any
     award, judgment or settlement payable by the condemning authority shall be
     the exclusive property of Landlord, and Tenant hereby assigns to Landlord
     all of its right, title and interest in any award, judgment or settlement
     from the condemning authority. Tenant, however, shall have the right, to
     the extent that Landlord's award is not reduced or prejudiced, to claim
     from the condemning authority (but not from Landlord) such compensation as
     may be recoverable by Tenant in its own right for relocation expenses and
     damage to Tenant's personal property.

     c. In the event of a partial taking of the Premises which does not result
     in a termination of this Lease, Landlord shall restore the remaining
     portion of the Premises as nearly as practicable to its condition prior to
     the condemnation or taking, but only to the extent of Building Standard
     Work. Tenant shall be responsible at its sole cost and expense for the
     repair, restoration and replacement of any other Leasehold Improvements and
     Tenant's Property.

21.  INDEMNIFICATION.

     a. Tenant shall indemnify and hold Landlord harmless against and from
     liability and claims of any kind for loss or damage to property of Tenant
     or any other person, or for any injury to or death of any person, arising
     out of: (1) Tenant's use and occupancy of the Premises, or any work,
     activity or other things allowed or suffered by Tenant to be done in, on or
     about the Premises; (2) any breach or default by Tenant of any of Tenant's
     obligations under this Lease; or (3) any negligent or otherwise tortious
     act or omission of Tenant, its agents, employees, invitees or contractors.
     Tenant shall at Tenant's expense, and by counsel satisfactory to Landlord,
     defend Landlord in any action or proceeding arising from any such claim and
     shall indemnify Landlord against all costs, attorneys' fees, expert witness
     fees and any other expenses incurred in such action or proceeding. As a
     material part of the consideration for Landlord's execution of this Lease,
     Tenant hereby assumes all risk of damage or injury to any person or
     property in, on or about the Premises from any cause.

     b. Landlord shall not be liable for injury or damage which may be sustained
     by the person or property of Tenant, its employees, invitees or customers,
     or any other person in or about the Premises, caused by or resulting from
     fire, steam, electricity, gas, water or rain which may leak or flow from or
     into any part of the Premises, or from the breakage, leakage, obstruction
     or other defects of pipes, sprinklers, wires, appliances, plumbing, air
     conditioning or lighting fixtures, whether such damage or injury results
     from conditions arising upon the Premises or upon other portions of the
     Building or Project or from other sources. Landlord shall not be liable for
     any damages arising from any act or omission of any other tenant of the
     Building or Project.

22.  TENANT'S INSURANCE.

     a. All insurance required to be carried by Tenant hereunder shall be issued
     by responsible insurance companies acceptable to Landlord and Landlord's
     lender and qualified to do business in the State. Each policy shall name
     Landlord, and at Landlord's request any mortgagee of Landlord, as an
     additional insured, as their respective interests may appear. Each policy
     shall contain (i) a cross- liability endorsement, (ii) a provision that
     such policy and the coverage evidenced thereby shall be primary and
     non-contributing with respect to any policies carried by Landlord and that
     any coverage carried by Landlord shall be excess insurance, and (iii) a
     waiver by the insurer of any right of subrogation against Landlord, its
     agents, employees and representatives, which arises or might arise by
     reason of any payment under such policy or by reason of any act or omission
     of Landlord, its agents, employees or representatives. A copy of each paid
     up policy (authenticated by the insurer) or certificate of the insurer
     evidencing the existence and amount of each insurance policy required
     hereunder shall be delivered to Landlord before the date Tenant is first
     given the right of possession of the Premises, and thereafter within thirty
     (30) days after any demand by Landlord therefor. Landlord may, at any time
     and from time to time, inspect and/or copy any insurance policies required
     to be maintained by Tenant hereunder. No such policy shall be cancellable
     except after twenty (20) days written notice to Landlord and Landlord's
     lender. Tenant shall furnish Landlord with renewals or "binders" of any
     such policy at least ten (10) days prior to the expiration thereof. Tenant
     agrees that if Tenant does not take out and maintain such insurance,
     Landlord may (but shall not be required to) procure said insurance on
     Tenant's behalf and charge the Tenant the premiums together with a
     twenty-five percent (25%) handling charge, payable upon demand. Tenant
     shall have the right to provide such insurance coverage pursuant to blanket
     policies obtained by the Tenant, provided such blanket policies expressly
     afford coverage to the Premises, Landlord, Landlord's mortgagee and Tenant
     as required by this Lease.

     b. Beginning on the date Tenant is given access to the Premises for any
     purpose and continuing until expiration of the Term, Tenant shall procure,
     pay for and maintain in effect policies of casualty insurance covering (i)
     all Leasehold Improvements (including any alterations, additions or
     improvements as may be made by Tenant pursuant to the provisions of Article
     12 hereof), and (ii) trade fixtures, merchandise and other personal
     property from time to time in, on or about the Premises, in an amount not
     less than one hundred percent (100%) of their actual replacement cost from
     time to time, providing protection against any peril included within the
     classification "Fire and Extended Coverage" together with insurance against
     sprinkler damage, vandalism and malicious mischief. The proceeds of such
     insurance shall be used for the repair or replacement of the property so
     insured. Upon termination of this Lease following a casualty as set forth
     herein, the proceeds under (i) shall be paid to Landlord, and the proceeds
     under (ii) above shall be paid to Tenant.

     c. Beginning on the date Tenant is given access to the Premises for any
     purpose and continuing until expiration of the Term, Tenant shall procure,
     pay for and maintain in effect workers' compensation insurance as required
     by law and comprehensive public liability and property damage insurance
     with respect to the construction of improvements on the Premises, the use,
     operation or condition of the Premises and the operations of Tenant in, on
     or about the Premises, providing personal injury and broad form property
     damage coverage for not less than One Million Dollars ($1,000,000.00)
     combined single limit for bodily injury, death and property damage
     liability.

     d. Not less than every three (3) years during the Term, Landlord and Tenant
     shall mutually agree to increases in all of Tenant's insurance policy
     limits for all insurance to be carried by Tenant as set forth in this
     Article. In the event Landlord and Tenant cannot mutually agree upon the
     amounts of said increases, then Tenant agrees that all insurance policy
     limits as set forth in this Article shall be adjusted for increases in the
     cost of living in the same manner as is set forth in Section 5.2 hereof for
     the adjustment of the Base Rent.

                                      (9)
<PAGE>

23.  WAIVER OF SUBROGATION.

Landlord and Tenant each hereby waive all rights of recovery against the other
and against the officers, employees, agents and representatives of the other, on
account of loss by or damage to the waiving party of its property or the
property of others under its control, to the extent that such loss or damage is
insured against under any fire and extended coverage insurance policy which
either may have in force at the time of the loss or damage. Tenant shall, upon
obtaining the policies of insurance required under this Lease, give notice to
its insurance carrier or carriers that the foregoing mutual waiver of
subrogation is contained in this Lease.

24.  SUBORDINATION AND ATTORNMENT.

Upon written request of Landlord, or any first mortgagee or first deed of trust
beneficiary of Landlord, or ground lessor of Landlord, Tenant shall, in writing,
subordinate its rights under this Lease to the lien of any first mortgage or
first deed of trust, or to the interest of any lease in which Landlord is
lessee, and to all advances made or hereafter to be made thereunder. However,
before signing any subordination agreement, Tenant shall have the right to
obtain from any lender or lessor or Landlord requesting such subordination, an
agreement in writing providing that, as long as Tenant is not in default
hereunder, this Lease shall remain in effect for the full Term. The holder of
any security interest may, upon written notice to Tenant, elect to have this
Lease prior to its security interest regardless of the time of the granting or
recording of such security interest.

In the event of any foreclosure sale, transfer in lieu of foreclosure or
termination of the lease in which Landlord is lessee, Tenant shall attorn to the
purchaser, transferee or lessor as the case may be, and recognize that party as
Landlord under this Lease, provided such party acquires and accepts the Premises
subject to this Lease.

25.  TENANT ESTOPPEL CERTIFICATES.

Within ten (10) days after written request from Landlord, Tenant shall execute
and deliver to Landlord or Landlord's designee, a written statement certifying
(a) that this Lease is unmodified and in full force and effect, or is in full
force and effect as modified and stating the modifications; (b) the amount of
Base Rent and the date to which Base Rent and additional rent have been paid in
advance; (c) the amount of any security deposited with Landlord; and (d) that
Landlord is not in default hereunder or, if Landlord is claimed to be in
default, stating the nature of any claimed default. Any such statement may be
relied upon by a purchaser, assignee or lender. Tenant's failure to execute and
deliver such statement within the time required shall at Landlord's election be
a default under this Lease and shall also be conclusive upon Tenant that: (1)
this Lease is in full force and effect and has not been modified except as
represented by Landlord; (2) there are no uncured defaults in Landlord's
performance and that Tenant has no right of offset, counter-claim or deduction
against Rent; and (3) not more than one month's Rent has been paid in advance.

26.  TRANSFER OF LANDLORD'S INTEREST.

In the event of any sale or transfer by Landlord of the Premises, Building or
Project, and assignment of this Lease by Landlord, Landlord shall be and is
hereby entirely freed and relieved of any and all liability and obligations
contained in or derived from this Lease arising out of any act, occurrence or
omission relating to the Premises, Building, Project or Lease occurring after
the consummation of such sale or transfer, providing the purchaser shall
expressly assume all of the covenants and obligations of Landlord under this
Lease. If any security deposit or prepaid Rent has been paid by Tenant, Landlord
may transfer the security deposit or prepaid Rent to Landlord's successor and
upon such transfer, Landlord shall be relieved of any and all further liability
with respect thereto.

27.  DEFAULT.

27.1. Tenant's Default. The occurrence of any one or more of the following
events shall constitute a default and breach of this Lease by Tenant:

     a. If Tenant abandons or vacates the Premises; or

     b. If Tenant fails to pay any Rent or any other charges required to be paid
     by Tenant under this Lease and such failure continues for five (5) days
     after such payment is due and payable; or

     c. If Tenant fails to promptly and fully perform any other covenant,
     condition or agreement contained in this Lease and such failure continues
     for thirty (30) days after written notice thereof from Landlord to Tenant;
     or

     d. If a writ of attachment or execution is levied on this Lease or on any
     of Tenant's Property; or e. If Tenant makes a general assignment for the
     benefit of creditors, or provides for an arrangement, composition,
     extension or adjustment with its creditors; or

     f. If Tenant files a voluntary petition for relief or if a petition against
     Tenant in a proceeding under the federal bankruptcy laws or other
     insolvency laws is filed and not withdrawn or dismissed within forty-five
     (45) days thereafter, of if under the provisions of any law providing for
     reorganization or winding up of corporations, any court of competent
     jurisdiction assumes jurisdiction, custody or control of Tenant or any
     substantial part of its property and such jurisdiction, custody or control
     remains in force unrelinquished, unstayed or unterminated for a period of
     forty-five (45) days; or

     g. If in any proceeding or action in which Tenant is a party, a trustee,
     receiver, agent Or custodian is appointed to take charge of the Premises or
     Tenant's Property (or has the authority to do so) for the purpose of
     enforcing a lien against the Premises or Tenant's Property; or

     h. If Tenant is a partnership or consists of more than one (1) person or
     entity, if any partner of the partnership or other person or entity is
     involved in any of the acts or events described in subparagraphs d through
     g above.

27.2. Remedies. In the event of Tenant's default hereunder, then in addition to
any other rights or remedies Landlord may have under any law, Landlord shall
have the right, at Landlord's option, without further notice or demand of any
kind to do the following:

     a. Terminate this Lease and Tenant's right to possession of the Premises
     and reenter the Premises and take possession thereof, and Tenant shall have
     no further claim to the Premises or under this Lease; or

     b. Continue this Lease in effect, reenter and occupy the Premises for the
     account of Tenant, and collect any unpaid Rent or other charges which have
     or thereafter become due and payable; or

     c. Reenter the Premises under the provisions of subparagraph b, and
     thereafter elect to terminate this Lease and Tenant's right to possession
     of the Premises.

                                      (10)
<PAGE>

If Landlord reenters the Premises under the provisions of subparagraphs b or c
above, Landlord shall not be deemed to have terminated this Lease or the
obligation of Tenant to pay any Rent or other charges thereafter accruing,
unless Landlord notifies Tenant in writing of Landlord's election to terminate
this Lease. In the event of any reentry or retaking of possession by Landlord,
Landlord shall have the right, but not the obligation, to remove all or any part
of Tenant's Property in the Premises and to place such property in storage at a
public warehouse at the expense and risk of Tenant. If Landlord elects to relet
the Premises for the account of Tenant, the rent received by Landlord from such
reletting shall be applied as follows: first, to the payment of any indebtedness
other than Rent due hereunder from Tenant to Landlord; second, to the payment of
any costs of such reletting; third, to the payment of the cost of any
alterations or repairs to the Premises; fourth to the payment of Rent due and
unpaid hereunder; and the balance, if any, shall be held by Landlord and applied
in payment of future Rent as it becomes due. If that portion of rent received
from the reletting which is applied against the Rent due hereunder is less than
the amount of the Rent due, Tenant shall pay the deficiency to Landlord promptly
upon demand by Landlord. Such deficiency shall be calculated and paid monthly.
Tenant shall also pay to Landlord, as soon as determined, any costs and expenses
incurred by Landlord in connection with such reletting or in making alterations
and repairs to the Premises, which are not covered by the rent received from the
reletting.

Should Landlord elect to terminate this Lease under the provisions of
subparagraph a or c above, Landlord may recover as damages from Tenant the
following:

     1.   Past Rent. The worth at the time of the award of any unpaid Rent which
          had been earned at the time of termination; plus

     2.   Rent Prior to Award. The worth at the time of the award of the amount
          by which the unpaid Rent which would have been earned after
          termination until the time of award exceeds the amount of such rental
          loss that Tenant proves could have been reasonably avoided; plus

     3.   Rent After Award. The worth at the time of the award of the amount by
          which the unpaid Rent for the balance of the Term after the time of
          award exceeds the amount of the rental loss that Tenant proves could
          be reasonably avoided; plus

     4.   Proximately Caused Damages. Any other amount necessary to compensate
          Landlord for all 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, including, but
          not limited to, any costs or expenses (including attorneys' fees),
          incurred by Landlord in (a) retaking possession of the Premises, (b)
          maintaining the Premises after Tenant's default, (c) preparing the
          Premises for reletting to a new tenant, including any repairs or
          alterations, and (d) reletting the Premises, including broker's
          commissions.

"The worth at the time of the award" as used in subparagraphs 1 and 2 above, is
to be computed by allowing interest at the rate of ten percent (10%) per annum.
"The worth at the time of the award" as used in subparagraph 3 above, is to be
computed by discounting the amount at the discount rate of the Federal Reserve
Bank situated nearest to the Premises at the time of the award plus one percent
(1%).

The waiver by Landlord of any breach of any term, covenant or condition of this
Lease shall not be deemed a waiver of such term, covenant or condition or of any
subsequent breach of the same or any other term, covenant or condition.
Acceptance of Rent by Landlord subsequent to any breach hereof shall not be
deemed a waiver of any preceding breach other than the failure to pay the
particular Rent so accepted, regardless of Landlord's knowledge of any breach at
the time of such acceptance of Rent. Landlord shall not be deemed to have waived
any term, covenant or condition unless Landlord gives Tenant written notice of
such waiver.

27.3 Landlords Default. If Landlord fails to perform any covenant, condition or
agreement contained in this Lease within thirty (30) days after receipt of
written notice from Tenant specifying such default, or if such default cannot
reasonably be cured within thirty (30) days, if Landlord fails to commence to
cure within that thirty (30) day period, then Landlord shall be liable to Tenant
for any damages sustained by Tenant as a result of Landlord's breach; provided,
however, it is expressly understood and agreed that if Tenant obtains a money
judgment against Landlord resulting from any default or other claim arising
under this Lease, that judgment shall be satisfied only out of the rents,
issues, profits, and other income actually received on account of Landlord's
right, title and interest in the Premises, Building or Project, and no other
real, personal or mixed property of Landlord (or of any of the partners which
comprise Landlord, if any) wherever situated, shall be subject to levy to
satisfy such judgment. If, after notice to Landlord of default, Landlord (or any
first mortgagee or first deed of trust beneficiary of Landlord) fails to cure
the default as provided herein, then Tenant shall have the right to cure that
default at Landlord's expense. Tenant shall not have the right to terminate this
Lease or to withhold, reduce or offset any amount against any payments of Rent
or any other charges due and payable under this Lease except as otherwise
specifically provided herein.

28.  BROKERAGE FEES.

Tenant warrants and represents that it has not dealt with any real estate broker
or agent in connection with this Lease or its negotiation except those noted in
Section 2.c. Tenant shall indemnify and hold Landlord harmless from any cost,
expense or liability (including costs of suit and reasonable attorneys' fees)
for any compensation, commission or fees claimed by any other real estate broker
or agent in connection with this Lease or its negotiation by reason of any act
of Tenant.

29.  NOTICES.

All notices, approvals and demands permitted or required to be given under this
Lease shall be in writing and deemed duly served or given if personally
delivered or sent by certified or registered U.S. mail, postage prepaid, and
addressed as follows: (a) if to Landlord, to Landlord's Mailing Address and to
the Building manager, and (b) if to Tenant, to Tenant's Mailing Address;
provided, however, notices to Tenant shall be deemed duly served or given if
delivered or mailed to Tenant at the Premises. Landlord and Tenant may from time
to time by notice to the other designate another place for receipt of future
notices.

30.  GOVERNMENT ENERGY OR UTILITY CONTROLS.

In the event of imposition of federal, state or local government controls,
rules, regulations, or restrictions on the use or consumption of energy or other
utilities during the Term, both Landlord and Tenant shall be bound thereby. In
the event of a difference in interpretation by Landlord and Tenant of any such
controls, the interpretation of Landlord shall prevail, and Landlord shall have
the right to enforce compliance therewith, including the right of entry into the
Premises to effect compliance.

31.  RELOCATION OF PREMISES.

Landlord shall have the right to relocate the Premises to another part of the
Building in accordance with the following:

                                      (11)
<PAGE>

     a. The new premises shall be substantially the same in size, dimensions,
     configuration, decor and nature as the Premises described in this Lease,
     and if the relocation occurs after the Commencement Date, shall be placed
     in that condition by Landlord at its cost.

     b. Landlord shall give Tenant at least thirty (30) days written notice of
     Landlord's intention to relocate the Premises.

     c. As nearly as practicable, the physical relocation of the Premises shall
     take place on a weekend and shall be completed before the following Monday.
     If the physical relocation has not been completed in that time, Base Rent
     shall abate in full from the time the physical relocation commences to the
     time it is completed. Upon completion of such relocation, the new premises
     shall become the "Premises" under this Lease.

     d. All reasonable costs incurred by Tenant as a result of the relocation
     shall be paid by Landlord.

     e. If the new premises are smaller than the Premises as it existed before
     the relocation, Base Rent shall be reduced proportionately.

     f. The parties hereto shall immediately execute an amendment to this Lease
     setting forth the relocation of the Premises and the reduction of Base
     Rent, if any.

32.  QUIET ENJOYMENT.

Tenant, upon paying the Rent and performing all of its obligations under this
Lease, shall peaceably and quietly enjoy the Premises, subject to the terms of
this Lease and to any mortgage, lease, or other agreement to which this Lease
may be subordinate.

33.  OBSERVANCE OF LAW.

Tenant shall not use the Premises or permit anything to be done in or about the
Premises which will in any way conflict with any law, statute, ordinance or
governmental rule or regulation now in force or which may hereafter be enacted
or promulgated. Tenant shall, at its sole cost and expense, promptly comply with
all laws, statutes, ordinances and governmental rules, regulations or
requirements now in force or which may hereafter be in force, and with the
requirements of any board of fire insurance underwriters or other similar bodies
now or hereafter constituted, relating to, or affecting the condition, use or
occupancy of the Premises, excluding structural changes not related to or
affected by Tenant's improvements or acts. The judgment of any court of
competent jurisdiction or the admission of Tenant in any action against Tenant,
whether Landlord is a party thereto or not, that Tenant has violated any law,
ordinance or governmental rule, regulation or requirement, shall be conclusive
of that fact as between Landlord and Tenant.

34.  FORCE MAJEURE.

Any prevention, delay or stoppage of work to be performed by Landlord or Tenant
which is due to strikes, labor disputes, inability to obtain labor, materials,
equipment or reasonable substitutes therefor, acts of God, governmental
restrictions or regulations or controls, judicial orders, enemy or hostile
government actions, civil commotion, fire or other casualty, or other causes
beyond the reasonable control of the party obligated to perform hereunder, shall
excuse performance of the work by that party for a period equal to the duration
of that prevention, delay or stoppage. Nothing in this Article 34 shall excuse
or delay Tenant's obligation to pay Rent or other charges under this Lease.

35.  CURING TENANT'S DEFAULTS.

If Tenant defaults in the performance of any of its obligations under this
Lease, Landlord may (but shall not be obligated to) without waiving such
default, perform the same for the account at the expense of Tenant. Tenant shall
pay Landlord all costs of such performance promptly upon receipt of a bill
therefor.

36.  SIGN CONTROL.

Tenant shall not affix, paint, erect or inscribe any sign, projection, awning,
signal or advertisement of any kind to any part of the Premises, Building or
Project, including without limitation, the inside or outside of windows or
doors, without the written consent of Landlord. Landlord shall have the right to
remove any signs or other matter, installed without Landlord's permission,
without being liable to Tenant by reason of such removal, and to charge the cost
of removal to Tenant as additional rent hereunder, payable within ten (10) days
of written demand by Landlord.

37.  MISCELLANEOUS.

     a. Accord and Satisfaction; Allocation of Payments.  No payment by. Tenant
     or receipt by Landlord of a lesser amount than the Rent provided for in
     this Lease shall be deemed to be other than on account of the earliest due
     Rent, nor shall any endorsement or statement on any check or letter
     accompanying any check or payment as Rent be deemed an accord and
     satisfaction, and Landlord may accept such check or payment without
     prejudice to Landlord's right to recover the balance of the Rent or pursue
     any other remedy provided for in this Lease. In connection with the
     foregoing, Landlord shall have the absolute right in its sole discretion to
     apply any payment received from Tenant to any account or other payment of
     Tenant then not current and due or delinquent.

     b. Addenda.  If any provision contained in an addendum to this Lease is
     inconsistent with any other provision herein, the provision contained in
     the addendum shall control, unless otherwise provided in the addendum.

     c. Attorneys' Fees.  If any action or proceeding is brought by either party
     against the other pertaining to or arising out of this Lease, the finally
     prevailing party shall be entitled to recover all costs and expenses,
     including reasonable attorneys' fees, incurred on account of such action or
     proceeding.

     d. Captions, Articles and Section Numbers.  The captions appearing within
     the body of this Lease have been inserted as a matter of convenience and
     for reference only and in no way define, limit or enlarge the scope or
     meaning of this Lease. All references to Article and Section numbers refer
     to Articles and Sections in this Lease.

     e. Changes Requested by Lender.  Neither Landlord or Tenant shall
     unreasonably withhold its consent to changes or amendments to this Lease
     requested by the lender on Landlord's interest, so long as these changes do
     not alter the basic business terms of this Lease or otherwise materially
     diminish any rights or materially increase any obligations of the party
     from whom consent to such charge or amendment is requested.

     f. Choice of Law.  This Lease shall be construed and enforced in accordance
     with the laws of the State.

     g. Consent.  Notwithstanding anything contained in this Lease to the
     contrary, Tenant shall have no claim, and hereby waives the right to any
     claim against Landlord for money damages by reason of any refusal,
     withholding or delaying by Landlord of any consent, approval or statement
     of satisfaction, and in such event, Tenant's only remedies therefor shall
     be an action for specific performance, injunction or declaratory judgment
     to enforce any right to such consent, etc.

                                      (12)
<PAGE>

     h. Corporate Authority. If Tenant is a corporation, each individual signing
     this Lease on behalf of Tenant represents and warrants that he is duly
     authorized to execute and deliver this Lease on behalf of the corporation,
     and that this Lease is binding on Tenant in accordance with its terms.
     Tenant shall, at Landlord's request, deliver a certified copy of a
     resolution of its board of directors authorizing such execution.

     i. Counterparts.  This Lease may be executed in multiple counterparts, all
     of which shall constitute one and the same Lease.

     j. Execution of Lease; No Option.  The submission of this Lease to Tenant
     shall be for examination purposes only, and does not and shall not
     constitute a reservation of or option for Tenant to lease, or otherwise
     create any interest of Tenant in the Premises or any other premises within
     the Building or Project. Execution of this Lease by Tenant and its return
     to Landlord shall not be binding on Landlord notwithstanding any time
     interval, until Landlord has in fact signed and delivered this Lease to
     Tenant.

     k. Furnishing of Financial Statements; Tenant's Representations.  In order
     to induce Landlord to enter into this Lease Tenant agrees that it shall
     promptly furnish Landlord, from time to time, upon Landlord's written
     request, with financial statements reflecting Tenant's current financial
     condition. Tenant represents and warrants that all financial statements,
     records and information furnished by Tenant to Landlord in connection with
     this Lease are true, correct and complete in all respects.

     l. Further Assurances.  The parties agree to promptly sign all documents
     reasonably requested to give effect to the provisions of this Lease.

     m. Mortgagee Protection.  Tenant agrees to send by certified or registered
     mail to any first mortgagee or first deed of trust beneficiary of Landlord
     whose address has been furnished to Tenant, a copy of any notice of default
     served by Tenant on Landlord. If Landlord fails to cure such default within
     the time provided for in this Lease, such mortgagee or beneficiary shall
     have an additional thirty (30) days to cure such default; provided that if
     such default cannot reasonably be cured within that thirty (30) day period,
     then such mortgagee or beneficiary shall have such additional time to cure
     the default as is reasonably necessary under the circumstances.

     n. Prior Agreements; Amendments.  This Lease contains all of the agreements
     of the parties with respect to any matter covered or mentioned in this
     Lease, and no prior agreement or understanding pertaining to any such
     matter shall be effective for any purpose. No provisions of this Lease may
     be amended or added to except by an agreement in writing signed by the
     parties or their respective successors in interest.

     o. Recording.  Tenant shall not record this Lease without the prior written
     consent of Landlord. Tenant, upon the request of Landlord, shall execute
     and acknowledge a "short form" memorandum of this Lease for recording
     purposes.

     p. Severability.  A final determination by a court of competent
     jurisdiction that any provision of this Lease is invalid shall not affect
     the validity of any other provision, and any provision so determined to be
     invalid shall, to the extent possible, be construed to accomplish its
     intended effect.

     q. Successors and Assigns.  This Lease shall apply to and bind the heirs,
     personal representatives, and permitted successors and assigns of the
     parties.

     r. Time of the Essence. Time is of the essence of this Lease.

     s. Waiver.  No delay or omission in the exercise of any right or remedy of
     Landlord upon any default by Tenant shall impair such right or remedy or be
     construed as a waiver of such default.

     t. Compliance.  The parties hereto agree to comply with all applicable
     federal, state and local laws, regulations, codes, ordinances and
     administrative orders having jurisdiction over the parties, property or the
     subject matter of this Agreement, including, but not limited to, the 1964
     Civil Rights Act and all amendments thereto, the Foreign Investment In Real
     Property Tax Act, the Comprehensive Environmental Response Compensation and
     Liability Act, and The Americans With Disabilities Act.

The receipt and acceptance by Landlord of delinquent Rent shall not constitute a
waiver of any other default; it shall constitute only a waiver of timely payment
for the particular Rent payment involved.

No act or conduct of Landlord, including, without limitation, the acceptance of
keys to the Premises, shall constitute an acceptance of the surrender of the
Premises by Tenant before the expiration of the Term. Only a written notice from
Landlord to Tenant shall constitute acceptance of the surrender of the Premises
and accomplish a termination of the Lease.

Landlord's consent to or approval of any act by Tenant requiring Landlord's
consent or approval shall not be deemed to waive or render unnecessary
Landlord's consent to or approval of any subsequent act by Tenant.

Any waiver by Landlord of any default must be in writing and shall not be a
waiver of any other default concerning the same or any other provision of the
Lease.

The parties hereto have executed this Lease as of the dates set forth below

Date:     11/7/97                       Date:   11/7/97
          -------------------------             -----------------------------

Landlord: Dove Holdings                 Tenant: Dove Brothers, LLC
          -------------------------             -----------------------------
By:       /s/ Kirk Dove                 By:     /s/ Lee Cochran
          -------------------------             -----------------------------
              Kirk Dove                             Lee Cochran
Title:        President                 Title:      CFO
          -------------------------             -----------------------------
By:                                     By:
   --------------------------------         ---------------------------------
Title:                                  Title:
      -----------------------------           -------------------------------

CONSULT YOUR ADVISORS -- This document has been prepared for approval by your
attorney. No representation or recommendation is made by CB Commercial as to the
legal sufficiency or tax consequences of this document or the transaction to
which it relates. These are questions for your attorney.

In any real estate transaction, it is recommended that you consult with a
professional, such as a civil engineer, industrial, hygienist or other person,
with experience in evaluating the condition of the property, including the
possible presence of asbestos, hazardous materials and underground storage
tanks.

                                      (13)

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