INTRABIOTICS PHARMACEUTICALS INC /DE
EXHIBIT 10.29
<DOCUMENT>
<TYPE>EX-10.29
<SEQUENCE>11
<FILENAME>f88660exv10w29.txt
<DESCRIPTION>EXHIBIT 10.29
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.29

                                  OFFICE LEASE
                          EMBARCADERO CORPORATE CENTER

1.    BASIC LEASE PROVISIONS ("Basic Lease Provisions")

         1.       PARTIES: This Lease, dated for reference purposes only,
FEBRUARY 10, 2003, is made by and between EMBARCADERO CORPORATE CENTER, (herein
called "Lessor") and NTRABIOTICS PHARMACEUTICALS, INC., doing business under the
name of --- (herein called "Lessee").

         1.2      PREMISES: Suite Number(s) 100 consisting of approximately
3,584 rentable square feet, as defined in paragraph 2 and as shown on Exhibit A
hereto (the "Premises").

         1.3      BUILDING: Commonly described as being located at 2483 East
Bayshore Road, in the City of Palo Alto, County of Santa Clara, State of
California, and as defined in paragraph 2.

         1.4      USE: GENERAL OFFICE, subject to paragraph 6.

         1.5      TERM: FIFTEEN (15) MONTHS commencing MARCH 1, 2003
("Commencement Date"), and ending JUNE 30, 2004 as defined in paragraph 3, plus
one 6-month option to extend as set forth in the Rider

         1.6      BASE RENT: $8,422.40 per month, payable on the 1st day of each
month, per paragraph 4.1

         1.7      BASE RENT INCREASE: THREE percent (3%) annually, per
paragraph 4.3.

         1.8      RENT PAID UPON EXECUTION: $8,422.40.

         1.9      SECURITY DEPOSIT: $8,675.

2.       PREMISES, PARKING AND COMMON AREAS.

         2.1      PREMISES: The Premises are a portion of a building, herein
sometimes referred to as the "Building" identified in paragraph 1.3 of the Basic
Lease Provisions. "Building" shall include adjacent parking structures or
surfaces used in connection therewith. The Premises, the Building, the Common
Areas (as hereinafter defined), the land upon which the same are located, along
with all other buildings and improvements thereon or thereunder, are herein
collectively referred to as the "Office Building Project." Lessor hereby leases
to Lessee and Lessee leases from Lessor for the term, at the rental, and upon
all of the conditions set forth herein, the real property referred to in the
Basic Lease Provisions, paragraph 1.2, as the "Premises," including rights to
the Common Areas as hereinafter specified.

         2.2      VEHICLE PARKING: So long as Lessee is not in default, and
subject to the rules and regulations attached hereto, and as established by
Lessor from time to time, Lessee shall be entitled to use at no additional
charge 13 parking spaces in the Office Building Project on an unassigned basis
along with other lessees of the Office Building Project.

                  2.2.1    If Lessee violates nay of the Rules and Regulations
then in effect relation to parking, then Lessor shall have the right, without
notice, in addition to such other rights and remedies that it may have, to
remove or tow away the vehicle involved and charge the cost to Lessee, which
cost shall be immediately payable upon demand by Lessor.

         2.3      COMMON AREAS-DEFINITION. The term "Common Areas" is defined as
all areas and facilities outside the Premises and within the exterior boundary
line of the Office Building Project that are provided and designated by the
Lessor from time to time for the general non-exclusive use of Lessor, Lessee and
of other lessees of the Office Building Project and their respective employees,
suppliers, shippers, customers and invitees, including but not limited to common
entrances, lobbies, corridors, stairways and stairwells, public restrooms,
elevators, parking areas to the extent not otherwise prohibited by this Lease,
loading and unloading areas, trash areas, roadways, sidewalks, walkways,
parkways, ramps, driveways, landscaped areas and decorative walls.

         2.4      COMMON AREAS--RULES AND REGULATIONS. Lessee agrees to abide by
and conform to the rules and regulations attached hereto as Exhibit B with
respect to the Office Building Project and Common Areas, and to cause its
employees, suppliers, shippers, customers, and invitees to so abide and conform.
Lessor or such other person(s) as Lessor may appoint shall have the exclusive
control and management of the Common Areas and shall have the right from time to
time to modify, amend and enforce said rules and regulations in any reasonable,
nondiscriminatory manner. Lessor shall not be responsible to Lessee for the
noncompliance with said rules and regulations by other lessees, their agents,
employees and invitees of the Office Building Project, but Lessor shall use its
best efforts to enforce such compliance.

         2.5      COMMON AREAS--CHANGES. Lessor shall have the right, in
Lessor's sole discretion, from time to time:

                  (a) To make changes to the Building interior and exterior and
Common Areas, including, without limitation, changes in the location, size,
shape, number, and appearance thereof, including but not limited to the lobbies,
windows, stairways, air shafts, elevators, restrooms, driveways, entrances,
parking spaces, parking areas, loading and unloading areas, ingress, egress,
direction of traffic, decorative walls, landscaped areas and walkways; provided,
however, Lessor

<PAGE>

shall at all times provide the parking facilities required by this Lease and
applicable law and Lessor shall not unreasonably disturb Lessee's use or
enjoyment of the Premises;

                  (b) To close temporarily any of the Common Areas for
maintenance purposes so long as reasonable access to the Premises remains
available;

                  (c) To designate other land and improvements outside the
boundaries of the Office Building Project to be a part of the Common Areas,
provided that such other land and improvements have a reasonable and functional
relationship to the Office Building Project;

                  (d) To add additional buildings and improvements to the Common
Areas;

                  (e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Office Building Project, or any
portion thereof;

                  (f) To do and perform such other acts and make such other
changes in, to or with respect to the Common Areas and Office Building Project
as Lessor may, in the exercise of sound business judgment, deem to be
appropriate, provided that such acts or changes do not interfere with Lessee's
use and enjoyment of the Premises.

3.       TERM

         3.1      TERM. The term and Commencement Date of this Lease shall be as
specified in paragraph 1.5 of the Basic Lease provisions.

         3.2      DELAY IN POSSESSION. Notwithstanding said Commencement Date,
if for any reason Lessor cannot deliver possession of the Premises to Lessee on
said date and subject to paragraph 3.2.2, Lessor shall not be subject to any
liability therefor, nor shall such failure affect the validity of this Lease or
the obligations of Lessee hereunder or extend the term hereof; but, in such
case, Lessee shall not be obligated to pay rent or perform any other obligation
of Lessee under the terms of this Lease until possession of the Premises is
tendered to Lessee, as hereinafter defined; provided, however, that if Lessor
shall not have delivered possession of the Premises within fourteen (14) days
following said Commencement Date, as the same may be extended under the terms of
a Work Letter executed by Lessor and Lessee, Lessee may, at Lessee's option, by
notice in writing to Lessor within ten (10) days thereafter, cancel this Lease,
in which event the parties shall be discharged from all obligations hereunder;
provided, however, that, Lessor shall return any money previously deposited by
Lessee and provided further, that if such written notice by Lessee is not
received by Lessor within said ten (10) day period, Lessee's right to cancel
this Lease hereunder shall terminate and be of no further force or effect.

                  3.2.1    POSSESSION TENDERED--DEFINED. Possession of the
Premises shall be deemed tendered to Lessee ("Tender of Possession") when (1)
the Improvements to be provided by Lessor under this Lease are substantially
completed, (2) the Building utilities are ready for use in the Premises, (3)
Lessee has reasonable access to the Premises, (4) five (5) days shall have
expired following advance written notice to Lessee of the occurrence of the
matters described in (1), (2) and (3), above of this paragraph 3.2.1.

                  3.2.2    DELAYS CAUSED BY LESSEE. There shall be no abatement
of rent, and the sixty (60) day period following the Commencement Date before
which Lessee's right to cancel this Lease accrues under paragraph 3.2, shall be
deemed extended to the extent of any delays caused by acts or omissions of
Lessee, Lessee's agents, employees and contractors.

         3.3      EARLY POSSESSION. If Lessee occupies the Premises prior to
said Commencement Date, such occupancy shall be subject to all provisions of
this Lease except the obligation to pay rent, and such occupancy shall not
change the termination date.

         3.4      UNCERTAIN COMMENCEMENT. In the event commencement of the Lease
term is defined as the completion of the improvements, Lessee and Lessor shall
execute an amendment to this Lease establishing the date of Tender of Possession
(as defined in paragraph 3.2.1) or the actual taking of possession by Lessee,
whichever first occurs, as the Commencement Date.

4.       RENT

         4.1      BASE RENT. Subject to adjustment, and except as may be
otherwise expressly provided in this Lease, Lessee shall pay to Lessor the Base
Rent for the Premises set forth in paragraph 1.6 of the Basic Lease Provisions,
without offset or deduction. Lessee shall pay Lessor upon execution hereof the
advance Base Rent described in paragraph 1.8 of the Basic Lease Provisions and
such amount shall be applied to the first month's Base Rent hereunder. Rent for
any period during the term hereof which is for less than one month shall be
prorated based upon the actual number of days of the calendar month involved.
Rent shall be payable in lawful money of the United States to Lessor at the
address stated herein or to such other persons or at such other places as Lessor
may designate in writing. This Lease is a "full service" lease, and Lessee shall
not be obligated to pay any additional costs of operating expenses, taxes,
insurance or the like unless and to the extent specifically provided herein.

         4.2      OPERATING EXPENSE INCREASE. [INTENTIONALLY OMITTED]

         4.3      On each anniversary date of the term Commencement Date, Base
Rent payable by Lessee hereunder shall increase by an amount equal to THREE
percent (3%) of the Base Rent in effect for the immediately preceding year of
the Lease term.

5.       SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution
hereof the security deposit set forth in

<PAGE>

paragraph 1.9 of the Basic Lease Provisions as security for Lessee's faithful
performance of Lessee's obligations hereunder. If Lessee fails to pay rent or
other charges due hereunder, or otherwise defaults with respect to any provision
of this Lease, Lessor may use, apply or retain all or any portion of said
deposit for the payment of any rent or other charge in default for the payment
of any other sum to which Lessor may become obligated by reason of Lessee's
default, or to compensate Lessor for any loss or damage which Lessor may suffer
thereby. If Lessor so uses or applies all or any portion of said deposit, Lessee
shall within ten (10) days after written demand therefor deposit cash with
Lessor in an amount sufficient to restore said deposit to the full amount then
required of Lessee. Lessor shall not be required to keep said security deposit
separate from its general accounts. Said deposit, or so much thereof as has not
heretofore been applied by Lessor, shall be returned without payment of interest
or other increment for its use, to Lessee (or, at Lessor's option, to the last
assignee, if any, of Lessee's interest hereunder) at the expiration of the term
hereof, and after Lessee has vacated the Premises. No trust relationship is
created herein between Lessor and Lessee with respect to said Security Deposit
and Lessor shall not be obligated to pay Lessee any interest thereon.

6.       USE.

         6.1      USE. The Premises shall be used and occupied only for the
purpose set forth in paragraph 1.4 of the Basic Lease Provisions or any other
lawful use which is reasonably comparable to that use and for no other purpose.

         6.2      COMPLIANCE WITH LAW.

                  (a) Lessor warrants to Lessee that the Premises, in the state
existing on the date that the Lease term commences, but without regard to
alterations or improvements made by Lessee or the use for which Lessee will
occupy the Premises, does not violate any covenants or restrictions of record,
or any applicable building code, regulation or ordinance in effect on such Lease
term Commencement Date. In the event it is determined that this warranty has
been violated, then it shall be the obligation of the Lessor, after written
notice from Lessee, to promptly, at Lessor's sole cost and expense, rectify any
such violation.

                  (b) Except as provided in paragraph 6.2(a) Lessee shall, at
Lessee's expense, promptly comply with all applicable statutes, ordinances,
rules, regulations, orders, covenants and restrictions of record, and
requirements of any fire insurance underwriters or rating bureaus, now in effect
or which may hereafter come into effect, whether or not they reflect a change in
policy from that now existing, during the term or any part of the term hereof,
relating to the Premises and the particular occupation and use by Lessee of the
Premises. Lessee shall conduct its business in a lawful manner and shall not use
or permit the use of the Premises or the Common Areas in any manner that will
create waste or a nuisance or shall disturb other occupants of the Office
Building Project.

                  (c) Notwithstanding the foregoing or anything to the contrary
contained in this Lease, Lessee shall not be responsible for compliance with any
laws, codes, ordinances or other governmental directives where such compliance
is not related specifically to Lessee's use and occupancy of the Premises. For
example, if any governmental authority should require any portion of the Office
Building Project or the Premises to be structurally strengthened against
earthquake, or should require the removal of Hazardous Materials from the
Premises and such measures are imposed as a general requirement applicable to
all tenants rather than as a condition to Lessee's specific use or occupancy of
the Premises, such work shall be performed by and at the sole cost of Lessor.

         6.3      CONDITION OF PREMISES.

                  (a) Lessor shall deliver the Premises to Lessee in a clean
condition on the Lease Commencement Date (unless Lessee is already in
possession) and Lessor warrants to Lessee that the plumbing, lighting,
electrical, ceiling tiles, window coverings, mechanical systems, air
conditioning, and heating system in the Premises shall be in good operating
condition. In the event that it is determined that this warranty has been
violated, then it shall be the obligation of Lessor, after receipt of written
notice from Lessee setting forth with specificity the nature of the violation,
to promptly, at Lessor's sole cost, rectify such violation.

                  (b) Except as otherwise provided in this Lease, Lessee hereby
accepts the Premises and the Office Building Project in their condition existing
as of the Lease Commencement Date or the date that Lessee takes possession of
the Premises, whichever is earlier, subject to all applicable zoning, municipal,
county and state laws, ordinances and regulations governing and regulating the
use of the Premises, and any easements, covenants or restrictions of record, and
accepts this Lease subject thereto and to all matters disclosed thereby and by
any exhibits attached hereto. Lessee acknowledges that it has satisfied itself
by its own independent investigation that the Premises are suitable for its
intended use, and that neither Lessor nor Lessor's agent or agents has made any
representation or warranty as to the present or future suitability of the
Premises, Common Areas, or Office Building Project for the conduct of Lessee's
business.

7.       MAINTENANCE, REPAIRS, ALTERATIONS AND COMMON AREA SERVICES.

         7.1      Lessor's Obligations. Lessor shall keep the Office Building
Project, including the Premises, interior and exterior walls, roof, and common
areas, and the equipment whether used exclusively for the Premises or in common
with other premises, in good condition and repair.. Except as provided in
paragraph 9.5, there shall be no abatement of rent or liability of Lessee on
account of any injury or interference with Lessee's business with respect to any
improvements, alterations or repairs made by Lessor to the Office Building
Project or any part thereof. Lessee expressly waives the benefits of any statute
now or hereafter in effect which would otherwise afford Lessee the right to make
repairs at Lessor's expense or to terminate this Lease because of Lessor's
failure to keep the Premises in good order, condition and repair.

         7.2      LESSEE'S OBLIGATIONS.

                  (a) Notwithstanding Lessor's obligation to keep the Premises
in good condition and repair, Lessee shall be responsible for payment of the
cost thereof to Lessor as additional rent for that portion of the cost of any
maintenance and repair of the Premises, or any equipment (wherever located) that
serves only Lessee or the Premises, to the extent such

<PAGE>

cost is attributable to causes beyond normal wear and tear.

                  (b) On the last day of the term hereof, or on any sooner
termination, Lessee shall surrender the Premises to Lessor in the same condition
as received, ordinary wear and tear excepted, clean and free of debris. Any
damage or deterioration of the Premises shall not be deemed ordinary wear and
tear if the same could have been prevented by good maintenance practices by
Lessee and such maintenance is the responsibility of Lessee hereunder. Lessee
shall repair any damage to the Premises occasioned by the installation or
removal of Lessee's trade fixtures, alterations, furnishings and equipment.
Except as otherwise stated in this Lease, Lessee shall leave the air lines,
power panels, electrical distribution systems, lighting fixtures, air
conditioning, window coverings, wall coverings, carpets, wall paneling, ceilings
and plumbing on the Premises in good operating condition.

         7.3      ALTERATIONS AND ADDITIONS.

                  (a) Lessee shall not, without Lessor's prior written consent,
make any alterations, improvements, additions, Utility Installations or repairs
in, on or about the Premises, or the Office Building Project. As used in this
paragraph 7.3 the term "Utility Installation" shall mean carpeting, window and
wall coverings, power panels, electrical distribution systems, lighting
fixtures, air conditioning, plumbing, and telephone and telecommunication wiring
and equipment. At the expiration of the term, Lessor may require the removal of
any or all of said alterations, improvements, additions or Utility
Installations, and the restoration of the Premises and the Office Building
Project to their prior condition, at Lessee's expense. Should Lessor permit
Lessee to make its own alterations, improvements, additions or Utility
Installations, Lessee shall use only such contractor as has been expressly
approved by Lessor, and Lessor may require Lessee to provide Lessor, at Lessee's
sole cost and expense, a lien and completion bond in an amount equal to one and
one-half times the estimated cost of such improvements, to insure Lessor against
any liability for mechanic's and materialmen's liens and to insure completion of
the work. Should Lessee make any alterations, improvements, additions or Utility
Installations without the prior approval of Lessor, or use a contractor not
expressly approved by Lessor, Lessor may, at any time during the term of this
Lease, require that Lessee remove any part or all of the same.

                  (b) Any alterations, improvements, additions or Utility
Installations in or about the Premises or the Office Building Project that
Lessee shall desire to make shall be presented to Lessor in written form, with
proposed detailed plans. If Lessor shall give its consent to Lessee's making
such alteration, improvement, addition or Utility Installation, the consent
shall be deemed conditioned upon Lessee acquiring a permit to do so from the
applicable governmental agencies, furnishing a copy thereof to Lessor prior to
the commencement of the work, and compliance by Lessee with all conditions of
said permit in a prompt and expeditious manner.

                  (c) Lessee shall pay, when due, all claims for labor or
materials furnished or alleged to have been furnished to or for Lessee at or for
use in the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises, the Building or the Office Building
Project, or any interest therein.

                  (d) Lessee shall give Lessor not less than ten (10) days'
notice prior to the commencement of any work in the Premises by Lessee, and
Lessor shall have the right to post notices of non-responsibility in or on the
Premises or the Building as provided by law. If Lessee shall, in good faith,
contest the validity of any such lien, claim or demand, then Lessee shall, at
its sole expense, defend itself and Lessor against the same and shall pay and
satisfy any such adverse judgment that may be rendered thereon before
enforcement thereof against the Lessor or the Premises, the Building or the
(Office Building Project, upon the condition that if Lessor shall require,
Lessee shall furnish to Lessor a surety bond satisfactory to Lessor in an amount
equal to such contested lien claim or demand indemnifying Lessor against
liability for the same and holding the Premises, the Building and the Office
Building Project free from the effect of such lien or claim. In addition, Lessor
may require Lessee to pay Lessor's reasonable attorneys' fees and costs in
participating in such action if Lessor shall decide it is in Lessor's best
interest so to do.

                  (e) All alterations, improvements, additions and Utility
Installations (whether or not such Utility Installations constitute trade
fixtures of Lessee), which may be made to the Premises by Lessee, including but
not limited to, floor coverings, panelings, doors, drapes, built-ins, moldings,
sound attenuation, and lighting and telephone or communication systems, conduit,
wiring and outlets, shall be made and done in a good and workmanlike manner and
of good and sufficient quality and materials and shall be the property of Lessor
and remain upon and be surrendered with the Premises at the expiration of the
Lease term, unless Lessor requires their removal pursuant to paragraph 7.3(a).
Provided Lessee is not in default, notwithstanding the provisions of this
paragraph 7.3(e), Lessee's personal property and equipment, other than that
which is affixed to the Premises so that it cannot be removed without material
damage to the Premises or the Building, and other than Utility Installations,
shall remain the property of Lessee and may be removed by Lessee subject to the
provisions of paragraph 7.2.

                  (f) Lessee shall provide Lessor with as-built plans and
specifications for any alterations, improvements, additions or Utility
Installations.

         7.4      UTILITY ADDITIONS. Lessor reserves the right to install new or
additional utility facilities throughout the Office Building Project for the
benefit of Lessor or Lessee, or any other lessee of the Office Building Project,
including, but not by way of limitation, such utilities as plumbing, electrical
systems, communication systems, and fire protection and detection systems, so
long as such installations do not unreasonably interfere with Lessee's use of
the Premises.

8.       INSURANCE; INDEMNITY. [AWAITING COMMENTS BY LESSEE'S INSURANCE ADVISOR]

         8.1      LIABILITY INSURANCE--LESSEE. Lessee shall, at Lessee's
expense, obtain and keep in force during the term of this Lease a policy of
Comprehensive General Liability insurance utilizing an Insurance Services Office
standard form with Broad Form General Liability Endorsement (GL0404), or
equivalent, in an amount of not less than $1,000,000 per occurrence of bodily
injury and property damage combined or in a greater amount as reasonably
determined by Lessor and shall insure Lessee with Lessor as an additional
insured against liability arising out of the use, occupancy or maintenance of
the Premises. Compliance with the above requirement shall not, however, limit
the liability of Lessee hereunder.

<PAGE>

         8.2      LIABILITY INSURANCE--LESSOR. Lessor shall obtain and keep in
force during the term of this Lease a policy of Combined Single Limit Bodily
Injury and Broad Form Property Damage Insurance, plus coverage against such
other risks Lessor deems advisable from time to time, insuring Lessor but not
Lessee, against liability arising out of the ownership, use, occupancy or
maintenance of the Office Building Project in an amount not less than $2,000,000
per occurrence.

         8.3      PROPERTY INSURANCE--LESSEE. Lessee shall, at Lessee's expense,
obtain and keep in force during the term of this Lease for the benefit of
Lessee, replacement cost fire and extended coverage insurance, with vandalism
and malicious mischief, sprinkler leakage and earthquake sprinkler leakage
endorsements, in an amount sufficient to cover not less than 100% of the full
replacement cost, as the same may exist from time to time, of all of Lessee's
personal property, fixtures, equipment and tenant improvements.

         8.4      PROPERTY INSURANCE--LESSOR. Lessor shall obtain and keep in
force during the term of this Lease a policy or policies of insurance covering
loss or damage to the Office Building Project improvements, but not Lessee's
personal property, fixtures, equipment or Less improvements, in the amount of
the full replacement cost thereof, as the same may exist from time to time,
utilizing Insurance Services Office standard form, or equivalent, providing
protection against all perils included within the classification of fire,
extended coverage, vandalism, malicious mischief, plate glass, and such other
perils as Lessor deems ADVISABLE or may be required by a lender having a lien on
the Office Building Project. In addition, Lessor shall obtain and keep in force,
during the term of this Lease, a policy of rental value insurance covering a
period of one year, with loss payable to Lessor, which insurance shall also
cover all Operating Expenses for said period. Lessee will not be named in any
such policies carried by Lessor and shall have no right to any proceeds
therefrom. The policies required by these paragraphs 8.2 and 8.4 shall contain
such deductibles as Lessor or the aforesaid lender may determine Lessee shall
not do or permit to be done anything which shall invalidate the insurance
policies carried by Lessor. Lessee shall pay the entirety of any increase in the
property insurance premium for the Office Building Project over what it was
immediately prior to the commencement of the term of this Lease if the increase
is specified by Lessor's insurance carrier as being caused by the nature of
Lessee's occupancy or any act or omission of Lessee.

         8.5      INSURANCE POLICIES. Lessee shall deliver to Lessor copies of
liability insurance policies required under paragraph 8.1 or certificates
evidencing the existence and amounts of such insurance within seven (7) days
after the Commencement Date of this Lease. No such policy shall be cancelable
except after thirty (30) days prior written notice to Lessor. Lessee shall, at
least thirty (30) days prior to the expiration of such policies, furnish Lessor
with renewals thereof.

         8.6      WAIVER OF SUBROGATION. Lessee and Lessor each hereby release
and relieve the other and waive their entire right of recovery against the other
for direct or consequential loss or damage arising out of or incident to the
perils covered by property insurance required to be carried by such party,
whether due to the negligence of Lessor or Lessee or their agents, employees,
contractors and/or invitees. If necessary, all property insurance policies
required under this Lease shall be endorsed to so provide.

         8.7      INDEMNITY. Lessee shall indemnify and hold harmless Lessor and
its agents, Lessor's master or ground lessor, partners and lenders, from and
against any and all claims for damage to the person or property of anyone or any
entity arising from Lessee's use of the Office Building Project, or from the
conduct of Lessee's business or from any activity, work or things done,
permitted or suffered by Lessee in or about the Premises and shall further
indemnify and hold harmless Lessor from and against any and all claims, costs
and expenses arising from any breach or default in the performance of any
obligation on Lessee's part to be performed under the terms of this Lease, or
arising from any act or omission of Lessee, or any of Lessee's agents,
contractors, employees, or invitees on or about the Premises, and from and
against all costs, attorney's fees, expenses and liabilities incurred by Lessor
as the result of any such use, conduct, activity, work, things done, permitted
or suffered, breach, default or negligence, and in dealing reasonably therewith,
including but not limited to the defense or pursuit of any claim or any action
or proceeding involved therein; and in case any action or proceeding be brought
against Lessor by reason of any such matter, Lessee upon notice from Lessor
shall defend the same at Lessee's expense and Lessor shall cooperate with Lessee
in such defense. Lessee, as a material part of the consideration to Lessor,
hereby assumes all risk of damage to property of Lessee or injury to persons,
in, upon or about the Office Building Project arising from any cause and Lessee
hereby waives all claims in respect thereof against Lessor. Notwithstanding the
foregoing or anything to the contrary contained in this Lease, Lessee shall not
hold Lessor harmless nor shall Lessee indemnify nor defend Lessor from claims,
costs, expenses or liabilities resulting from Lessor's negligence, willful
misconduct or breach of this Lease.

         8.8      EXEMPTION OF LESSOR FROM LIABILITY. Lessee hereby agrees that
Lessor shall not be liable for injury to Lessee's business or any loss of income
therefrom or for loss of or damage to the goods, wares, merchandise or other
property of Lessee, Lessee's employees, invitees, customers, or any other person
in or about the Premises or the Office Building Project, nor shall Lessor be
liable for injury to the person of Lessee, Lessee's employees, agents or
contractors, whether such damage or injury is caused by or results from theft,
fire, steam, electricity, gas, water or rain, or from the breakage, leakage,
obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing,
air conditioning or lighting fixtures, or from any other cause whether said
damage or injury results from conditions arising upon the Premises or upon other
portions of the Office Building Project, or from other sources or places, or
from new construction or the repair, alteration or improvement of any part of
the Office Building Project, or of the equipment, fixtures or appurtenances
applicable thereto, and regardless of whether the cause of such damage or injury
or the means of repairing the same is inaccessible, Lessor shall not be liable
for any damages arising from any act or neglect of any other lessee, occupant or
user of the Office Building Project, nor from the failure of Lessor to enforce
the provisions of any other lease of any other lessee of the Office Building
Project. Notwithstanding the foregoing or anything to the contrary contained in
this Lease, Lessee the foregoing exemption of Lessor from liability shall not
apply to injury, loss or other claims resulting from Lessor's negligence,
willful misconduct or breach of this Lease.

         8.9      NO REPRESENTATION OF ADEQUATE COVERAGE. Lessor makes no
representation that the limits or forms of coverage of insurance specified in
this paragraph 8 are adequate to cover Lessee's property or obligations under
this Lease.

<PAGE>

9.       DAMAGE OR DESTRUCTION.

         9.1      Definitions.

                  (a) "Premises Damage" shall mean if the Premises are damaged
or destroyed to any extent.

                  (b) "Premises Building Partial Damage" shall mean if the
Building of which the Premises are a part is damaged or destroyed to the extent
that the cost to repair is less than fifty percent (50%) of the then Replacement
Cost of the building.

                  (c) "Premises Building Total Destruction" shall mean if the
Building of which the Premises are a part is damaged or destroyed to the extent
that the cost to repair is fifty percent (50%) or more of the then Replacement
Cost of the Building.

                  (d) "Office Building Project Buildings" shall mean all of the
buildings on the Office Building Project site.

                  (e) "Office Building Project Buildings Total Destruction"
shall mean if the Office Building Project Buildings are damaged or destroyed to
the extent that the cost of repair is fifty percent (50%) or more of the then
Replacement Cost of the Office Building Project Buildings.

                  (f) "Insured Loss" shall mean damage or destruction which was
caused by an event required to be covered by the insurance described in
paragraph 8. The fact that an Insured Loss has a deductible amount shall not
make the loss an uninsured loss.

                  (g) "Replacement Cost" shall mean the amount of money
necessary to be spent in order to repair or rebuild the damaged area to the
condition that existed immediately prior to the damage occurring, excluding all
improvements made by lessees, other than those installed by Lessor at Lessee's
expense.

         9.2      PREMISES DAMAGE; PREMISES BUILDING PARTIAL DAMAGE.

                  (a) Insured Loss: Subject to the provisions of paragraphs 9.4
and 9.5, if at any time during the term of this Lease there is damage which is
an Insured Loss and which falls into the classification of either Premises
Damage or Premises Building Partial Damage, then Lessor shall, as soon as
reasonably possible and to the extent the required materials and labor are
readily available through usual commercial channels, at Lessor's expense, repair
such damage (but not Lessee's fixtures, equipment or tenant improvements
originally paid for by Lessee) to its condition existing at the time of the
damage, and this Lease shall continue in full force and effect.

                  (b) Uninsured Loss: Subject to the provisions of paragraphs
9.4 and 9.5, if at any time during the term of this Lease there is damage which
is not an Insured Loss and which falls within the classification of Premises
Damage or Premises Building Partial Damage, which damage prevents Lessee from
making any substantial use of the Premises, Lessor may at Lessor's option either
(i) repair such damage as soon as reasonably possible at Lessor's expense, in
which event this Lease shall continue in full force and effect, or (ii) give
written notice to Lessee within ten (10) days after the date of the occurrence
of such damage of Lessor's intention to cancel and terminate this Lease as of
the date of the occurrence of such damage, in which event this Lease shall
terminate as of the date of the occurrence of such damage.

         9.3      PREMISES BUILDING TOTAL DESTRUCTION, OFFICE BUILDING PROJECT
TOTAL DESTRUCTION. Subject to the provisions of paragraphs 9.4 and 9.5, if at
any time during the term of this Lease there is damage, whether or not it is an
Insured Loss, which falls into the classifications of either (i) Premises
Building Total Destruction, or (ii) Office Building Project Total Destruction,
then Lessor may at Lessor's option either (i) repair such damage or destruction
as soon as reasonably possible at Lessor's expense (to the extent the required
materials are readily available through usual commercial channels) to its
condition existing at the time of the damage, but not Lessee's fixtures,
equipment or tenant improvements, and this Lease shall continue in full force
and effect, or (ii) give written notice to Lessee within thirty (30) days after
the date of occurrence of such damage of Lessor's intention to cancel and
terminate this Lease, in which case this Lease shall terminate as of the date of
the occurrence of such damage.

         9.4      DAMAGE NEAR END OF TERM.

                  (a) Subject to paragraph 9.4(b), if at any time during the
last twelve (12) months of the term of this Lease there is substantial damage to
the Premises, either party may at such party's option cancel and terminate this
Lease as of the date of occurrence of such damage by giving written notice to
Lessee of Lessor's election to do so within thirty (30) days after the date of
occurrence of such damage.

                  (b) Notwithstanding paragraph 9.4(a), in the event that Lessee
has an option to extend or renew this Lease, and the time within which said
option may be exercised has not yet expired, Lessee shall exercise such option,
if it is to be exercised at all, no later than twenty (20) days after the
occurrence of an Insured Loss falling within the classification of Premises
Damage during the last twelve (12) months of the term of this Lease. If Lessee
duly exercises such option during said twenty (20) day period, Lessor shall, at
Lessor's expense, repair such damage, but not Lessee's fixtures, equipment or
tenant improvements, as soon as reasonably possible and this Lease shall
continue in full force and effect. If Lessee fails to exercise such option
during said twenty (20) day period, then Lessor may at Lessor's option terminate
and cancel this Lease as of the expiration of said twenty (20) day period by
giving written notice to Lessee of Lessor's election to do so within ten (10)
days after the expiration of said twenty (20) day period, notwithstanding any
term or provision in the grant of option to the contrary.

         9.5      ABATEMENT OF RENT; LESSEE'S REMEDIES.

                  (a) In the event Lessor elects or is required to repair or
restore the Building or Premises pursuant to the provisions of this paragraph 9,
and any part of the Premises are not usable (including loss of use due to loss
of access or

<PAGE>

essential services), the rent payable hereunder (including Lessee's Share of
Operating Expense Increase) for the period during which such damage, repair or
restoration continues shall be abated. Except for said abatement of rent, if
any, Lessee shall have no claim against Lessor for any damage suffered by reason
of any such damage, destruction, repair or restoration, except as otherwise
provided herein or by law.

                  (b) If Lessor shall elect or be obligated to repair or restore
the Premises or the Building under the provisions of this Paragraph 9 and shall
not commence such repair or restoration within forty-five (45) days after such
occurrence, or if Lessor shall not complete the restoration and repair within
three (3) months after such occurrence, Lessee may at Lessee's option cancel and
terminate this Lease by giving Lessor written notice of Lessee's election to do
so at any time prior to the commencement or completion, respectively, of such
repair or restoration. In such event this Lease shall terminate as of the date
of such notice.

                  (c) Lessee agrees to cooperate with Lessor in connection with
any such restoration and repair, including but not limited to the approval
and/or execution of plans and specifications required.

         9.6      TERMINATION--ADVANCE PAYMENTS. Upon termination of this Lease
pursuant to this paragraph 9, an equitable adjustment shall be made concerning
advance rent and any advance payments made by Lessee to Lessor. Lessor shall, in
addition, return to Lessee so much of Lessee's security deposit as has not
theretofore been applied by Lessor.

         9.7      WAIVER. Lessor and Lessee waive the provisions of any statute
which relates to termination of leases when leased property is destroyed and
agree that such event shall be governed by the terms of this Lease.

10.      REAL PROPERTY TAXES.

         10.1     PAYMENT OF TAXES. Lessor shall pay the real property tax, as
defined in paragraph 10.3, applicable to the Office Building Project.

         10.2     ADDITIONAL IMPROVEMENTS. [INTENTIONALLY OMITTED]

         10.3     DEFINITION OF "REAL PROPERTY TAX." As used herein, the term
"real property tax" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, and any license fee, commercial
rental tax, improvement bond or bonds, levy or tax (other than inheritance,
personal income or estate taxes) imposed on the Office Building Project or any
portion thereof by any authority having the direct or indirect power to tax,
including any city, county, state or federal government, or any school,
agricultural, sanitary, fire, street, drainage or other improvement district
thereof, as against any legal or equitable interest of Lessor in the Office
Building Project or in any portion thereof as against Lessor's right to rent or
other income therefrom, and as against Lessor's business of leasing the Office
Building Project. The term "real property tax" shall also include any tax, fee,
levy assessment or charge (i) in substitution of, partially or totally, any tax,
fee, levy, assessment or charge hereinabove included within the definition of
"real property tax," or (ii) the nature of which was hereinbefore included
within the definition of "real property tax," or (iii) which is imposed for a
service or right not charged prior to June 1, 1978 or, if previously charged,
has been increased since June 1, 1978, or (iv) which is imposed as a result of a
change in ownership, as defined by applicable local statutes for property tax
purposes, of the Office Building Project or which is added to a tax or charge
hereinbefore included within the definition of real property tax by reason of
such change of ownership, or (v) which is imposed by reason of this transaction,
any modifications or changes hereto, or any transfers hereof.

         10.4     JOINT ASSESSMENT. If the improvements or property, the taxes
for which are to be paid separately by Lessee under paragraph 10.2 or 10.5 are
not separately assessed, Lessee's portion of that tax shall be equitably
determined by Lessor from the respective valuations assigned in the assessor's
work sheets or such other information (which may include the cost of
construction) as may be reasonably available.

         10.5     PERSONAL PROPERTY TAXES.

                  (a) Lessee shall pay prior to delinquency all taxes assessed
against and levied upon trade fixtures, furnishings, equipment and all other
personal property of Lessee contained in the Premises.

                  (b) If any of Lessee's said personal property shall be
assessed with Lessor's real property, Lessee shall pay to Lessor the taxes
attributable to Lessee within ten (10) days after receipt of a written statement
setting forth the taxes applicable to Lessee's property.

11.      UTILITIES.

         11.1     SERVICES PROVIDED BY LESSOR. Lessor shall provide heating,
ventilation, air conditioning, and janitorial service as reasonably required,
reasonable amounts of electricity for normal lighting and office machines, water
for reasonable and normal drinking and lavatory use, and replacement light bulbs
and/or fluorescent tubes and ballasts for standard overhead fixtures.

         11.2     SERVICES EXCLUSIVE TO LESSEE. Lessee shall pay for all water,
gas, heat, light, power, telephone and other utilities and services specially or
exclusively supplied and/or metered exclusively to the Premises or to Lessee,
together with any taxes thereon. If any such services are not separately metered
to the Premises, Lessee shall pay at Lessor's option, either Lessee's Share or a
reasonable proportion to be determined by Lessor of all charges jointly metered
with other premises in the Building.

         11.3     HOURS OF SERVICE. Said services and utilities shall be
provided during generally accepted business days and hours or such other days or
hours as may hereafter be set forth. Utilities and services required at other
times shall be subject to advance request and reimbursement by Lessee to Lessor
of the cost thereof.

         11.4     EXCESS USAGE BY LESSEE. Lessee shall not make connection to
the utilities except by or through existing

<PAGE>

outlets and shall not install or use machinery or equipment in or about the
Premises that uses excess water, lighting or power, or suffer or permit any act
that causes extra burden upon the utilities or services, including but not
limited to security services, over standard office usage for the Office Building
Project. Lessor shall require Lessee to reimburse Lessor for any excess expenses
or costs that may arise out of a breach of this subparagraph by Lessee. Lessor
may, in its sole discretion, install at Lessee's expense supplemental equipment
and/or separate metering applicable to Lessee's excess usage or loading.

         11.5     INTERRUPTIONS. There shall be no abatement of rent and Lessor
shall not be liable in any respect whatsoever for the inadequacy, stoppage,
interruption or discontinuance of any utility or service due to riot, strike,
labor dispute, breakdown, accident, repair or other cause beyond Lessor's
reasonable control or in cooperation with governmental request or directions,
UNLESS LESSEE'S USE OR OCCUPANCY OF THE PREMISES IS SUBSTANTIALLY IMPAIRED
THEREBY FOR A PERIOD OF MORE THAN 30 DAYS, IN WHICH EVENT ALL RENT PAYABLE BY
LESSEE SHALL ABATE UNTIL SUCH SUBSTANTIAL IMPAIRMENT CEASES.

12.      ASSIGNMENT AND SUBLETTING.

         12.1     LESSOR'S CONSENT REQUIRED. Lessee shall not voluntarily or by
operation of law assign, transfer, mortgage sublet, or otherwise transfer or
encumber all or any part of Lessee's interest in the Lease or in the Premises,
without Lessor's prior written consent, which Lessor shall not unreasonably
withhold. Lessor shall respond to Lessee's request for consent hereunder in a
timely manner and any attempted assignment, transfer, mortgage, encumbrance or
subletting without such consent shall be void, and shall constitute a material
default and breach of this Lease without the need for notice to Lessee under
paragraph 13.1 "Transfer" within the meaning of this paragraph 12 shall not
include the transfer of the voting stock of Lessee..

         12.2     LESSEE AFFILIATE. Notwithstanding the provisions of paragraph
12.1 hereof, Lessee may assign or sublet the Premises, or any portion thereof,
without Lessor's consent to any corporation which controls, is controlled by or
is under common control with Lessee, or to any corporation resulting from the
merger or consolidation with Lessee, or to any person or entity which acquires
all the assets of Lessee as a going concern of the business that is being
conducted on the Premises, all of which are referred to as "Lessee Affiliate";
provided that before such assignment shall be effective, (a) said assignee shall
assume, in full, the obligations of Lessee under this Lease (unless such
transfer occurs by operation of law) and (b) Lessor shall be given written
notice of such assignment and assumption or transfer. Any such assignment shall
not, in any way, affect or limit the liability of Lessee under the terms of this
Lease even if after such assignment or subletting the terms of this Lease are
materially changed or altered without the consent of Lessee, the consent of whom
shall not be necessary.

         12.3     TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.

                  (a) Regardless of Lessor's consent, no assignment or
subletting shall release Lessee of Lessee's obligations hereunder or alter the
primary liability of Lessee to pay the rent and other sums due Lessor hereunder
including Lessee's Share of Operating Expense Increase, and to perform all other
obligations to be performed by Lessee hereunder.

                  (b) Lessor may accept rent from any person other than Lessee
pending approval or disapproval of such assignment.

                  (c) Neither a delay in the approval or disapproval of such
assignment or subletting, nor the acceptance of rent, shall constitute a waiver
or estoppel of Lessor's right to exercise its remedies for the breach of any of
the terms or conditions of this paragraph 12 of this Lease.

                  (d) If Lessee's obligations under this Lease have been
guaranteed by third parties, then an assignment or sublease, and Lessor's
consent thereto, shall not be effective unless said guarantors give their
written consent to such sublease and the terms thereof.

                  (e) The consent by Lessor to any assignment or subletting
shall not constitute a consent to any subsequent assignment or subletting by
Lessee or to any subsequent or successive assignment or subletting by the
sublessee. However, Lessor may consent to subsequent sublettings and assignments
of the sublease or any amendments or modifications thereto without notifying
Lessee or anyone else liable on the Lease or sublease and without obtaining
their consent and such action shall not relieve such persons from liability
under this Lease or said sublease; however, such persons shall not be
responsible to the extent any such amendment or modification enlarges or
increases the obligations of the Lessee or sublessee under this Lease or such
sublease.

                  (f) In the event of any default under this Lease, Lessor may
proceed directly against Lessee, any guarantors or any one else responsible for
the performance of this Lease, including the sublessee, without first exhausting
Lessor's remedies against any other person or entity responsible therefor to
Lessor, or any security held by Lessor or Lessee.

                  (g) Lessor's written consent to any assignment or subletting
of the Premises by Lessee shall not constitute an acknowledgment that no default
then exists under this Lease of the obligations to be performed by Lessee nor
shall such consent be deemed a waiver of any then existing default, except as
may be otherwise stated by Lessor at the time.

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

         12.4     ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING.
Regardless of Lessor's consent, the following terms and conditions shall apply
to any subletting by Lessee of all or any part of the Premises and shall be
deemed included in all subleases under this Lease whether or not expressly
incorporated therein:

                  (a) Lessee hereby assigns and transfers to Lessor all of
Lessee's interest in all rentals and income arising from any sublease heretofore
or hereafter made by Lessee, and Lessor may collect such rent and income and
apply same

<PAGE>

toward Lessee's obligations under this Lease; provided, however, that until a
default shall occur in the performance of Lessee's obligations under this Lease,
Lessee may receive, collect and enjoy the rents accruing under such sublease.
Lessor shall not, by reason of this or any other assignment of such sublease to
Lessor nor by reason of the collection of the rents from a sublessee, be deemed
liable to the sublessee for any failure of Lessee to perform and comply with any
of Lessee's obligations to such sublessee under such sublease. Lessee hereby
irrevocably authorizes and directs any such sublessee, upon receipt of a written
notice from Lessor stating that a default exists in the performance of Lessee's
obligations under this Lease, to pay to Lessor the rents due and to become due
under the sublease. Lessee agrees that such sublessee shall have the right to
rely upon any such statement and request from Lessor, and that such sublessee
shall pay such rents to Lessor without any obligation or right to inquire as
whether such default exists and notwithstanding any notice from or claim from
Lessee to the contrary. Lessee shall have no right or claim against said
sublessee or Lessor for any such rents so paid by said sublessee to Lessor.

                  (b) No sublease requiring Lessor's consent hereunder entered
into by Lessee shall be effective unless and until it has been approved in
writing by Lessor. Any sublessee shall, by reason of entering into a sublease
under this Lease, be deemed, for the benefit of Lessor, to have assumed and
agreed to conform and comply with each and every obligation herein to be
performed by Lessee other than such obligations as are contrary to or
inconsistent with provisions contained in a sublease to which Lessor has
expressly consented in writing.

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

                  (d) No sublessee shall further assign or sublet all or any
part of the Premises without Lessor's prior written consent.

         12.5     LESSOR'S EXPENSES. In the event Lessee shall assign or sublet
the Premises or request the consent of Lessor to any assignment or subletting or
if Lessee shall request the consent of Lessor for any act Lessee proposes to do
then Lessee shall pay Lessor's reasonable costs and expenses incurred in
connection therewith, including attorneys, architects, engineers, or other
consultants' fees.

         12.6     CONDITIONS TO CONSENT. In connection with any transfer
requiring Lessor's consent hereunder, Lessor reserves the right to condition any
approval to assign or sublet upon Lessor's determination that (a) the proposed
assignee or sublessee shall conduct a business on the Premises of a quality
substantially equal to that of Lessee and consistent with the general character
of the other occupants of the Office Building Project and not in violation of
any exclusives or rights then held by other Lessees, and (b) the proposed
assignee or sublessee be at least as financially responsible as Lessee was
expected to be at the time of the execution of this Lease or of such assignment
or subletting, whichever is greater, and (c) that Lessee pay to Lessor fifty
percent (50%) of any "bonus" rent or other consideration received by Lessee from
the Sublessee in connection with the Sublease, after Lessee has deducted
therefrom all costs reasonably incurred in the subletting.

         13.      DEFAULT; REMEDIES.

         13.1     DEFAULT. The occurrence of any one or more of the following
events shall constitute a material default of this Lease by Lessee:

                  (a) The abandonment of the Premises by Lessee.

                  (b) The breach by Lessee of any of the covenants, conditions
or provisions of paragraphs 7.3(a), (b) or (d) (alterations), 12.1 (assignment
or subletting), 13.1(a) (abandonment), 13.1(e) (insolvency), 13.1(f) j(false
statement), 16(a) (estoppel certificate), 29(b) (subordination), 32 (auctions),
or 39.1 (easements), all of which are hereby deemed to be material, non-curable
defaults without the necessity of any notice by Lessor to Lessee thereof.

                  (c) The failure by Lessee to make any payment of rent or any
other payment required to be made by Lessee hereunder, as and when due, where
such failure shall continue for a period of three (3) days after written notice
thereof from Lessor to Lessee. In the event that Lessor serves Lessee with a
Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes
such Notice to Pay Rent or Quit shall also constitute the notice required by
this subparagraph.

                  (d) The failure by Lessee to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed or performed by
Lessee other than those in subparagraphs (b) and (c) above, where such failure
shall continue for a period of thirty (30) days after written notice thereof
from Lessor to Lessee; provided, however, that if the nature of Lessee's
noncompliance is such that more than thirty (30) days are reasonably required
for its cure, then Lessee shall not be deemed to be in default if Lessee
commenced such cure within said thirty (30) day period and thereafter diligently
pursues such cure to completion. To the extent permitted by law, such thirty
(30) day notice shall constitute the sole and exclusive notice required to be
given to Lessee under applicable Unlawful Detainer statutes.

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

                  (f) The discovery by Lessor that any financial statement given
to Lessor by Lessee, or its successor in interest

<PAGE>

or by any guarantor of Lessee's obligation hereunder, was materially false.

         13.2     REMEDIES. In the event of any material default or breach of
this Lease by Lessee, Lessor may at any time thereafter, with or without notice
or demand and without limiting Lessor in the exercise of any right or remedy
which Lessor may have by reason of such default:

                  (a) Terminate Lessee's right to possession of the Premises by
any lawful means, in which case this Lease and the term hereof shall terminate
and Lessee shall immediately surrender possession of the Premises to Lessor. In
such event Lessor shall be entitled to recover from Lessee all damages incurred
by Lessor by reason of Lessee's default including, but not limited to, the cost
of recovering possession of the Premises; expenses of reletting, including
necessary renovation and alteration of the Premises, reasonable attorneys' fees,
and any real estate commission actually paid; the worth at the time of award by
the court having jurisdiction thereof of the amount by which the unpaid rent for
the balance of the term after the time of such award exceeds the amount of such
rental loss for the same period that Lessee proves could be reasonably avoided;
that portion of the leasing commission paid by Lessor pursuant to paragraph 15
applicable to the unexpired term of this Lease.

                  (b) Maintain Lessee's right to possession in which case this
Lease shall continue in effect whether or not Lessee shall have vacated or
abandoned the Premises. In such event Lessor shall be entitled to enforce all of
Lessor's rights and remedies under this Lease, including the right to recover
the rent as it becomes due hereunder.

                  (c) Pursue any other remedy now or hereafter available to
Lessor under the laws or judicial decisions of the state wherein the Premises
are located. Unpaid installments of rent and other unpaid monetary obligations
of Lessee under the terms of this Lease shall bear interest from the date due at
the maximum rate then allowable by law.

         13.3     DEFAULT BY LESSOR. Lessor shall not be in default unless
Lessor fails to perform obligations required of Lessor within a reasonable time,
but in no event later than thirty (30) days after written notice by Lessee to
Lessor and to the holder of any first mortgage or deed of trust covering the
Premises whose name and address shall have theretofore been furnished to Lessee
in writing, specifying wherein Lessor has failed to perform such obligation;
provided, however, that if the nature of Lessor's obligation is such that more
than thirty (30) days are required for performance then Lessor shall not be in
default if Lessor commences performance within such 30-day period and thereafter
diligently pursues the same to completion.

         13.4     LATE CHARGES. Lessee hereby acknowledges that late payment by
Lessee to Lessor of Base Rent, Lessee's Share of Operating Expense Increase or
other sums due hereunder will cause Lessor to incur costs not contemplated by
this Lease, the exact amount of which will be extremely difficult to ascertain.
Such costs include, but are not limited to, processing and accounting charges,
and late charges which may be imposed on Lessor by the terms of any mortgage or
trust deed covering the Office Building Project. Accordingly, if any installment
of Base Rent, Operating Expense Increase, or any other sum due from Lessee shall
not be received by Lessor or Lessor's designee within five (5) days after such
amount shall be due then, upon notice to Lessee, Lessee shall pay to Lessor a
late charge equal to six percent (6%) of such overdue amount. The parties hereby
agree that such late charge represents a fair and reasonable estimate of the
costs Lessor will incur by reason of late payment by Lessee. Acceptance of such
late charge by Lessor shall in no event constitute a waiver of Lessee's default
with respect to such overdue amount, nor prevent Lessor from exercising any of
the other rights and remedies granted hereunder.

14.      CONDEMNATION. If the Premises or any portion thereof or the Office
Building Project are taken under the power of eminent domain, or sold under the
threat of the exercise of said power (all of which are herein called
"condemnation"), this Lease shall terminate as to the part so taken as of the
date the condemning authority takes title or possession, whichever first occurs,
provided that if so much of the Premises or the Office Building Project are
taken by such condemnation as would substantially and adversely affect the
operation and profitability of Lessee's business conducted from the Premises,
Lessee shall have the option, to be exercised only in writing within thirty (30)
days after Lessor shall have given Lessee written notice of such taking (or in
the absence of such notice, within thirty (30) days after the condemning
authority shall have taken possession), to terminate this Lease as of the date
the condemning authority takes such possession. If Lessee does not terminate
this Lease in accordance with the foregoing, this Lease shall remain in full
force and effect as to the portion of the Premises remaining, except that the
rent and Lessee's Share of Operating Expense Increase shall be reduced in the
proportion that the floor area of the Premises taken bears to the total floor
area of the Premises. Common Areas taken shall be excluded from the Common Areas
usable by Lessee and no reduction of rent shall occur with respect thereto or by
reason thereof. Lessor shall have the option in its sole discretion to terminate
this Lease as of the taking of possession by the condemning authority, by giving
written notice to Lessee of such election within thirty (30) days after receipt
of notice of a taking by condemnation of any part of the Premises or the Office
Building Project. Any award for the taking of all or any part of the Premises or
the Office Building Project under the power of eminent domain or any payment
made under threat of the exercise of such power shall be the property of Lessor,
whether such award shall be made as compensation for diminution in value of the
leasehold or for the taking of the fee, or as severance damages; provided,
however, that Lessee shall be entitled to any separate award for loss of or
damage to Lessee's trade fixtures, removable personal property and unamortized
Less improvements that have been paid for by Lessee. For that purpose the cost
of such improvements shall be amortized over the original term of this Lease
excluding any options. In the event that this Lease is not terminated by reason
of such condemnation, Lessor shall to the extent of severance damages received
by Lessor in connection with such condemnation, repair any damage to the
Premises caused by such condemnation except to the extent that Lessee has been
reimbursed therefor by the condemning authority. Lessee shall pay any amount in
excess of such severance damages required to complete such repair.

15.      BROKER'S FEE.

         (a) The brokers involved in this transaction are CORNISH & CAREY
COMMERCIAL (LESSOR) AND BT COMMERCIAL (LESSEE).

         (b) Lessee and Lessor each represent and warrant to the other that
neither has had any dealings with any person, firm, broker or finder (other than
the person(s), if any, whose names are set forth in paragraph 15(a), above) in
connection

<PAGE>

with the negotiation of this Lease and/or the consummation of the transaction
contemplated hereby, and no other broker or other person, firm or entity is
entitled to any commission or finder's fee in connection with said transaction
and Lessee and Lessor do each hereby indemnify and hold the other harmless from
and against any costs, expenses, attorneys' fees or liability for compensation
or charges which may be claimed by any such unnamed broker, finder or other
similar party by reason of any dealings or actions of the indemnifying party.
Lessor shall be responsible for all compensation and fees payable to Cornish &
Carey Commercial and BT Commercial, and shall indemnify and hold harmless Lessee
from any such amounts

16.      ESTOPPEL CERTIFICATE.

         (a) Each party (as "responding party") shall at any time upon not less
than ten (10) days' prior written notice from the other party ("requesting
party") execute, acknowledge and deliver to the requesting party a statement in
writing (i) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of such modification and certifying
that this Lease, as so modified, is in full force and effect) and the date to
which the rent and other charges are paid in advance, if any, (ii) acknowledging
that there are not, to the responding party's knowledge, any uncured defaults on
the part of the requesting party, or specifying such defaults if any are
claimed, and (iii) certifying to such other matters regarding the status of the
Lease as the requesting party may reasonably request. Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Office Building Project or of the business of Lessee.

         (b) At the requesting party's option, the failure to deliver such
statement within such time shall be a material default of this Lease by the
party who is to respond, without any further notice to such party, or it shall
be conclusive upon such party that (i) this Lease is in full force and effect,
without modification except as may be represented by the requesting party, (ii)
there are no uncured defaults in the requesting party's performance, and (iii)
if Lessor is the requesting party, not more than one month's rent has been paid
in advance.

         (c) If Lessor desires to finance refinance, or sell the Office Building
Project, or any part thereof, Lessee hereby agrees to deliver to any lender or
purchaser designated by Lessor such financial statements of Lessee as may be
reasonably required by such lender or purchaser. Such statements shall include
the past three (3) years' financial statements of Lessee. All such financial
statements shall be received by Lessor and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.

17.      LESSOR'S LIABILITY. The term "Lessor" as used herein shall mean only
the owner or owners, at the time in question, of the fee title to the Office
Building Project, and except as expressly provided in paragraph 15, in the event
of any transfer of such title or interest, Lessor herein named (and in case of
any subsequent transfers then the grantor) shall be relieved from and after the
date of such transfer of all liability as respects Lessor's obligations
thereafter to be performed, provided that any funds in the hands of Lessor or
the then grantor at the time of such transfer, in which Lessee has an interest,
shall be delivered to the grantee. The obligations contained in this Lease to be
performed by Lessor shall, subject as aforesaid, be binding on Lessor's
successors and assigns, only during their respective periods of ownership.

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

19.      INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein provided,
any amount due to Lessor not paid when due shall bear interest at the maximum
rate then allowable by law or judgments from the date due. Payment of such
interest shall not excuse or cure any default by Lessee under this Lease;
provided, however, that interest shall not be payable on late charges incurred
by Lessee nor on any amounts upon which late charges are paid by Lessee.

20.      TIME OF ESSENCE. Time is of the essence with respect to the obligations
to be performed under this Lease.

21.      ADDITIONAL RENT. All monetary obligations of Lessee to Lessor under the
terms of this Lease, including but not limited to Lessee's Share of Operating
Expense Increase and any other expenses payable by Lessee hereunder shall be
deemed to be rent.

22.      INCORPORATION OF PRIOR AGREEMENTS, AMENDMENTS. This Lease contains all
agreements of the parties with respect to any matter mentioned herein. No prior
or contemporaneous agreement or understanding pertaining to any such matter
shall be effective. This Lease may be modified in writing only, signed by the
parties in interest at the time of the modification. Except as otherwise stated
in this Lease, Lessee hereby acknowledges that neither the real estate broker
listed in paragraph 15 hereof nor any cooperating broker on this transaction nor
the Lessor or any employee or agents of any of said persons has made any oral or
written warranties or representations to Lessee relative to the condition or use
by Lessee of the Premises or the Office Building Project and Lessee acknowledges
that Lessee assumes all responsibility regarding the Occupational Safety Health
Act, the legal use and adaptability of the Premises and the compliance thereof
with all applicable laws and regulations in effect during the term of this
Lease.

23.      NOTICES. Any notice required or permitted to be given hereunder shall
be in writing and may be given by personal delivery or by certified or
registered mail, and shall be deemed sufficiently given if delivered or
addressed to Lessee or to Lessor at the address noted below or adjacent to the
signature of the respective parties, as the case may be. Mailed notices shall be
deemed given upon actual receipt at the address required, or forty-eight (48)
hours following deposit in the mail, postage prepaid, whichever first occurs.
Either party may by notice to the other specify a different address for notice
purposes except that upon Lessee's taking possession of the Premises, the
Premises shall constitute Lessee's address for notice purposes. A copy of all
notices required or permitted to be given to Lessor hereunder shall be
concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate by notice to Lessee.

24.      WAIVERS. No waiver by Lessor of any provision hereof shall be deemed a
waiver of any other provision hereof or of any subsequent breach by Lessee of
the same or any other provision. Lessor's consent to, or approval of, any act
shall not be deemed to render unnecessary the obtaining of Lessor's consent to
or approval of any subsequent act by Lessee.

<PAGE>

The acceptance of rent hereunder by Lessor shall not be a waiver of any
preceding breach by Lessee of any provision hereof, other than the failure of
Lessee to pay the particular rent so accepted, regardless of Lessor's knowledge
of such preceding breach at the time of acceptance of such rent.

25.      HOLDING OVER. If Lessee, with Lessor's consent, remains in possession
of the Premises or any part thereof after the expiration of the term hereof,
such occupancy shall be a tenancy from month to month upon all the provisions of
this Lease pertaining to the obligations of Lessee, except that the rent payable
shall be one hundred fifty percent (150%) of the rent payable immediately
preceding the termination date of this Lease, and all Options, if any, granted
under the terms of this Lease shall be deemed terminated and be of no further
effect during said month to month tenancy.

26.      CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.

27.      COVENANTS AND CONDITIONS. Each provision of this Lease performable by
Lessee shall be deemed both a covenant and a condition.

28.      BINDING EFFECT; CHOICE OF LAW. Subject to any provisions hereof
restricting assignment or subletting by Lessee and subject to the provisions of
paragraph 17, this Lease shall bind the parties, their personal representatives,
successors and assigns. This Lease shall be governed by the laws of the State of
California and any litigation concerning this Lease between the parties hereto
shall be initiated in Santa Clara County, California.

29.      SUBORDINATION.

         (a) This Lease, and any Option or right of first refusal granted
hereby, at Lessor's option, shall be subordinate to any ground lease, mortgage,
deed of trust or any other hypothecation or security now or hereafter placed
upon the Office Building Project and to any and all advances made on the
security thereof and to all renewals, modifications, consolidations,
replacements and extensions thereof. Notwithstanding such subordination,
Lessee's right to quiet possession of the Premises shall not be disturbed if
Lessee is not in default and so long as Lessee shall pay the rent and observe
and perform all of the provisions of this Lease, unless this Lease is otherwise
terminated pursuant to its terms. If any mortgagee, trustee or ground lessor
shall elect to have this Lease and any Options granted hereby prior to the lien
of its mortgage, deed of trust or ground lease, and shall give written notice
thereof to Lessee, this Lease and such Options shall be deemed prior to such
mortgage, deed of trust or ground lease, whether this Lease or such Options are
dated prior or subsequent to the date of said mortgage, deed of trust or ground
lease or the date of recording thereof. In the event any proceedings are brought
for foreclosure, or in the event of the exercise of the power of sale under any
mortgage or deed of trust made by the Lessor covering the premises, the Lessee
shall attorn to the purchaser upon any such foreclosure or sale and recognize
such purchaser as the Lessor under this Lease.

         (b) Lessee agrees to execute any documents required to effectuate an
attornment, a subordination, or to make this Lease or any Option granted herein
prior to the lien of any mortgage, deed of trust or ground lease, as the case
may be. Lessee's failure to execute such documents within ten (10) days after
written demand shall constitute a material default by Lessee hereunder without
further notice to Lessee.

30.      ATTORNEYS' FEES.

         30.1     If either party or the broker(s) named herein bring an action
to enforce the terms hereof or declare rights hereunder, the prevailing party in
any such action, trial or appeal thereon, shall be entitled to its reasonable
attorneys' fees to be paid by the losing party as fixed by the court in the same
or a separate suit, and whether or not such action is pursued to decision or
judgment.

         30.2     The attorneys' fee award shall not be computed in accordance
with any court fee schedule, but shall be such as to fully reimburse all
attorneys' fees reasonably incurred in good faith.

         30.3     Lessor shall be entitled to reasonable attorneys' fees and all
other costs and expenses incurred in the preparation and service of notice of
default and consultations in connection therewith, whether or not a legal
proceeding is subsequently commenced in connection with such default.

31.      LESSOR'S ACCESS.

         31.1     Upon 24 hours prior notice and subject to Lessee's reasonable
security requirements, Lessor and Lessor's agents shall have the right to enter
the Premises at reasonable times for the purpose of inspecting the same,
performing any services required of Lessor, showing the same to prospective
purchasers, lenders, or lessees, taking such safety measures, erecting such
scaffolding or other necessary structures, making such alterations, repairs,
improvements or additions to the Premises or to the Office Building Project as
Lessor may reasonably deem necessary or desirable and the erecting, using and
maintaining of utilities, services, pipes and conduits through the Premises
and/or other premises as long as there is no material adverse effect on Lessee's
use of the Premises. Lessor may at any time place on or about the Premises or
the Building any ordinary "For Sale" signs and Lessor may at any time during the
last one hundred twenty (120) days of the term hereof place on or about the
Premises any ordinary "For Lease" signs.

         31.2     All activities of Lessor pursuant to this paragraph shall be
without abatement of rent, nor shall Lessor have any liability to Lessee for the
same.

         31.3     Lessor shall have the right to retain keys to the Premises and
to unlock all doors in or upon the Premises other than to files, vaults and
safes, and in the case of emergency to enter the Premises by any reasonably
appropriate means, and any such entry shall not be deemed a forcible or unlawful
entry or detainer of the Premises or an eviction. Lessee waives any charges for
damages or injuries or interference with Lessee's property or business in
connection therewith.

32.      AUCTIONS. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises or the Common Areas
without first having obtained Lessor's prior written consent. Notwithstanding
anything

<PAGE>

to the contrary in this Lease, Lessor shall not be obligated to exercise any
standard of reasonableness in determining whether to grant such consent. The
holding of any auction on the Premises or Common Areas in violation of this
paragraph shall constitute a material default of this Lease.

33.      SIGNS. Lessee shall not place any sign upon the Premises or the Office
Building Project without Lessor's prior written consent. Under no circumstances
shall Lessee place a sign on any roof of the Office Building Project. Lessee
shall be entitled to standard Building signage.

34.      MERGER. The voluntary or other surrender of this Lease by Lessee, or a
mutual cancellation thereof, or a termination by Lessor, shall not work a
merger, and shall, at the option of Lessor, terminate all or any existing
subtenancies or may, at the option of Lessor, operate as an assignment to Lessor
of any or all of such subtenancies.

35.      GUARANTOR. In the event that there is a guarantor of this Lease, said
guarantor shall have the same obligations as Lessee under this Lease.

36.      QUIET POSSESSION. Upon Lessee paying the rent for the Premises and
observing and performing all of the covenants, conditions and provisions on
Lessee's part to be observed and performed hereunder, Lessee shall have quiet
possession of the Premises for the entire term hereof subject to all of the
provisions of this Lease. The individuals executing this Lease on behalf of
Lessor represent and warrant to Lessee that they are fully authorized and
legally capable of executing this Lease on behalf of Lessor and that such
execution is binding upon all parties holding an ownership interest in the
Office Building Project.

37.      OPTIONS. Any Option to extend, renew or expand the Premises shall be
set forth in a separate addendum hereto signed by both parties.

38.      SECURITY MEASURES--LESSOR'S RESERVATIONS.

         38.1     Lessee hereby acknowledges that Lessor shall have no
obligation whatsoever to provide guard service or other security measures for
the benefit of the Premises or the Office Building Project. Lessee assumes all
responsibility for the protection of Lessee, its agents, and invitees and the
property of Lessee and of Lessee's agents and invitees from acts of third
parties. Nothing herein contained shall prevent Lessor, at Lessor's sole option
from providing security protection for the Office Building Project or any part
thereof, in which event the cost thereof shall be included within the definition
of Operating Expenses, as set forth in paragraph 4.2(b).

         38.2     Lessor shall have the following rights:

                  (a) To change the name, address or title of the Office
Building Project or building in which the Premises are located upon not less
than ninety (90) days prior written notice;

                  (b) [intentionally omitted]

                  (c) To permit any lessee the exclusive right to conduct any
business as long as such exclusive does not conflict with any rights expressly
given herein;

                  (d) To place such signs, notices or displays as Lessor
reasonably deems necessary or advisable upon the roof, exterior of the buildings
or the Office Building Project or on pole signs in the Common Areas;

         38.3     Lessee shall not:

                  (a) Use a representation (photographic or otherwise) of the
Building or the Office Building Project or their name(s) in connection with
Lessee's business;

                  (b) Suffer or permit anyone, except in emergency, to go upon
the roof of the Building.

39.      EASEMENTS.

         39.1     Lessor reserves to itself the right, from time to time, to
grant such easements, rights and dedications that Lessor deems necessary or
desirable, and to cause the recordation of parcel maps and restrictions, so long
as such easements, rights, dedications, maps and restrictions do not
unreasonably interfere with the use of the Premises by Lessee. Lessee shall sign
any of the aforementioned documents upon request of Lessor and failure to do so
shall constitute a material default of this Lease by Lessee without the need for
further notice to Lessee.

         39.2     The obstruction of Lessee's view, air, or light by any
structure erected in the vicinity of the Building, whether by Lessor third
parties, shall in no way affect this Lease or impose any liability upon Lessor.

40.      PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to
any amount or sum of money to be paid by one party to the other under the
provisions hereof, the party against whom the obligation to pay the money is
asserted shall have the right to make payment "under protest" and such payment
shall not be regarded as a voluntary payment, and there shall survive the right
on the part of said party to institute suit for recovery of such sum. If it
shall be adjudged that there was no legal obligation on the part of said party
to pay such sum or any part thereof, said party shall be entitled to recover
such sum or so much thereof as it was not legally required to pay under the
provisions of this Lease.

41.      AUTHORITY. If Lessee is a corporation, trust, or general or limited
partnership, Lessee, and each individual executing this Lease on behalf of such
entity represent and warrant that such individual is duly authorized to execute
and deliver this Lease on behalf of said entity. If Lessee is a corporation,
trust or partnership, Lessee shall, within thirty (30) days alter execution of
this Lease, deliver to Lessor evidence of such authority satisfactory to Lessor.

<PAGE>

42.      CONFLICT. Any conflict between the primed provisions, Exhibits or
Addenda of this Lease and the typewritten or handwritten provisions, if any,
shall be controlled by the typewritten or handwritten provisions.

43.      NO OFFER. Preparation of this Lease by Lessor or Lessor's agent and
submission of same to Lessee shall not be deemed an offer to Lessee to lease.
This Lease shall become binding upon Lessor and Lessee only when fully executed
by both parties.

44.      [intentionally omitted]

45.      MULTIPLE PARTIES. If more than one person or entity is named as either
Lessor or Lessee herein, except as otherwise expressly provided herein, the
obligations of the Lessor or Lessee herein shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or Lessee,
respectively.

46.      WORK LETTER. If Lessor is obligated to perform any work of improvement
to the Premises as part of this Lease, such obligations shall be detailed in an
addendum or work letter hereto signed by both parties.

47.      ATTACHMENTS. Attached hereto are the following documents which
constitute a part of this Lease:

                  EXHIBIT A - FLOOR PLAN

                  EXHIBIT B - RULES AND REGULATIONS

                  Addendum

48.      ADDITIONAL TERMS.

         (a) LESSOR SHALL INSTALL A DOOR IN THE OPENING LEADING INTO THE
GLASS-WALLED CONFERENCE ROOM AND SHALL REMOVE THE "SLOT" DOOR IN THE PRIVATE
AREA TO THE LEFT OF THE MAIN ENTRANCE AND RESTORE THE WALL IN THAT AREA LESSOR
SHALL ALSO INSTALL ADDITIONAL DEDICATED ELECTRICAL CIRCUITS FOR USE WITH SERVER
EQUIPMENT AND COPIER.

         (b) LESSOR SHALL FURNISH THE PREMISES WITH THE FURNITURE DESCRIBED ON
SCHEDULE 1 HERETO; ALL SUCH FURNISHINGS SHALL REMAIN THE PROPERTY OF LESSOR AND
SHALL BE SURRENDERED TO LESSOR AT LEASE TERMINATION IN THE SAME CONDITION AS
RECEIVED, REASONABLE WEAR AND TEAR EXCEPTED.

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED
AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS
LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND
EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.

LESSOR:                                      LESSEE:

EMBARCADERO CORPORATE CENTER                 INTRABIOTICS PHARMACEUTICALS, INC.

By: Embarcadero Bayshore Investors, LLC

    By: EBI Management, Inc.
        Manager                              By: /s/ Eric Bjerkholt
                                                 ----------------------
    By:  /s/ Jim Blake                       Its: SVP & CFO
       ----------------------
    Its: EVP

Dated: 2/24/03                               Dated: 2/20/03

Address for Notices:                         Address for Notices:

Embarcadero Corporate Center                 IntraBiotics Pharmaceuticals, Inc.
c/o The Matteson Companies                   2483 East Bayshore Road, Suite 100
1991 Broadway, Suite 300                     Palo Alto, CA 94303
Redwood City, CA 94063-1994

<PAGE>

                                  OFFICE LEASE
                          EMBARCADERO CORPORATE CENTER
                                   EXHIBIT "A"

                                   FLOOR PLAN

<PAGE>

                                  OFFICE LEASE
                          EMBARCADERO CORPORATE CENTER
                                   EXHIBIT "B"

                              RULES AND REGULATIONS

1.       No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside or
inside of the Building or the Premises which is visible from outside the
Premises without the written consent of Lessor first had obtained, and Lessor
shall have the right to remove any such unauthorized sign, placard, picture,
advertisement, name or notice without notice to and at the expense of Lessee.

2.       Lessee shall not place anything or allow anything to be placed near the
glass of any window, door partition or wall which may appear unsightly from
outside the Premises.

3.       [intentionally omitted]

4.       The Directory of the Building is provided exclusively for the display
of the name and location of Lessees only and Lessor reserves the right to
exclude any other names therefrom.

5.       The sidewalks, halls, passages, exits, entrances, elevators and
stairways shall not be obstructed by any of the Lessees or used by them for any
purpose other than for ingress to and egress from their respective Premises. The
halls, passages, exits, entrances, elevators, stairways, and roof are not for
the use of the general public and the Lessor shall, in all cases, retain the
right to control and prevent access thereto by all persons whose presence in the
judgment of the Lessor shall be prejudicial to the safety, character, reputation
and interests of the Building and its Lessees, provided that nothing therein
contained shall be construed to prevent such access to persons with whom the
Lessee normally deals in the ordinary course of Lessee's business unless such
persons are engaged in illegal activities. No Lessee and no employees or
invitees of any Lessee shall go upon the roof of the Building.

6.       Lessee shall not alter any lock or install any new or additional locks
or any bolts on any door of the Premises without the written consent of Lessor.

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

8.       Lessee shall not overload the floor of the Premises or in any way
deface the Premises or any part thereof. No boring, cutting or stringing of
wires, or laying of vinyl or other similar floor coverings, shall be permitted
except with the prior written consent of the Lessor. Lessee shall place a floor
mat of sufficient strength under each desk chair to protect the carpeting.

9.       No furniture, freight, equipment, will be brought into or received in
the Building or carried up or down the elevators, without the consent of Lessor
and all moving of the same into or out of the Building shall be done at such
time and in such manner, and in such elevators and between such hours as shall
be designated by Lessor. Lessor shall have the right to prescribe the weight,
size and position of all heavy objects or heavy equipment brought into the
Building and also the times and manner of moving the same in and out of the
Building. All heavy objects or heavy equipment shall, if considered necessary by
Lessor, stand on wood strips of such thickness as is necessary to properly
distribute the weight. Lessor will not be responsible for loss of or damage to
any such heavy objects or heavy equipment from any cause and all damage done to
the Building by moving or maintaining any such heavy objects or heavy equipment
which shall be repaired at the expense of Lessee. There shall not be used in any
space, or in the public halls of the Building, either by any Lessee or others,
any hand trucks except those equipped with rubber tires and side guards.

10.      Lessee shall not use, keep or permit to be used or kept any noxious gas
or substance in the Premises, or permit or suffer the Premises to be occupied or
used in a manner offensive or objectionable to the Lessor or other occupants of
the Building by reason of noise, odors and/or vibrations, or interfere in any
way with other Lessees or those having business therein, nor shall any animal or
bird be brought in or kept in or about the Premises or the Building, nor shall
any bicycle, motorcycle or other vehicle be brought into the Building except in
prescribed driveways and parking spaces. No Lessee shall make or permit to be
made any unseemly or disturbing noises or disturb or interfere with occupants of
this or neighboring buildings or premises or those having business with them
whether by the use of any musical instrument, radio, phonograph, unusual noise,
or in any other way. No Lessee shall throw anything out of doors or down the
passageways.

11.      The Premises shall not be used for manufacturing or for the storage of
merchandise except as such storage may be incidental to the use of the Premises
for general office purposes. No Lessee shall occupy or permit any portion of its
Premises to be occupied for the manufacture or sale of liquor, narcotics, or
tobacco in any form, or as a medical office, or as a barbershop or manicure
shop. No Lessee shall advertise for laborers giving an address at the Premises,
provided the Lessee has the right to advertise for clerical and other
assistance. The Premises shall not be used for lodging or sleeping or for any
illegal purposes.

12.      Lessee shall not use or keep in the Premises or the Building any
kerosene, gasoline or inflammable or combustible fluid or material, or use any
method of heating or air conditioning other than that supplied by Lessor.

13.      Lessor will direct electricians as to where and how telephone, computer
and telegraph wires are to be introduced. No boring or cutting for wires will be
allowed without the consent of Lessor. The location of telephones, call boxes
and other

<PAGE>

office equipment affixed to the Premises shall be subject to the approval of
Lessor.

14.      All keys to the building, offices, and any other rooms shall be
obtained from Lessor's Building Management Office and Lessee shall not from any
other source, duplicate, obtain keys or have keys made. The Lessee, upon
termination of the tenancy, shall deliver to the Lessor the keys of the
building, offices, and rooms which shall have been furnished or shall pay the
Lessor the cost of replacing same or of changing the lock or locks opened by
such lost key(s) if Lessor deems it necessary to make such change.

15.      No Lessee shall lay vinyl, tile, carpet or other similar floor covering
so that the same shall be affixed to the floor of the Premises in any manner
except as approved by the Lessor. The expense of repairing any damage resulting
from a violation of this rule or removal of any floor covering shall be borne by
the Lessee by whom, or by whose contractors, employees or invitees, the damage
shall have been caused.

16.      On Saturdays, Sundays and legal holidays, and on other days between the
hours of 6:00 p.m. and 7:30 a.m. the following days, access to the Building or
to the halls, corridors, elevators, and stairways in the Building, or to the
Premises may be refused unless the person seeking access is known to the person
or employee of the Building in charge and has a pass or is properly identified.
The Lessor shall in no case be liable for damages for any error with regard to
the admission to or exclusion from the Building of any person. In case of
invasion, mob, riot, public excitement, or other commotion, the Lessor reserves
the right to prevent access to the Building during the continuance of the same
by locking the doors or otherwise, for the safety of the Lessees and protection
of property in the Premises and the Building. Lessor reserves the right to close
and keep locked all entrance and exit doors of the Building on Saturdays,
Sundays, legal holidays, and on other days between the hours of 6:00 p.m. and
7:30 a.m., and during such further hours as Lessor may deem advisable for the
adequate protection of said Building and the property of its Lessees.

17.      Lessee shall see that the doors of the Premises are closed and securely
locked before leaving the Building and must observe strict care and caution that
all water faucets or water apparatus are entirely shut off before Lessee or
Lessee's employees leave the Building, and that all electricity shall likewise
be carefully shut off to the extent practical so as to prevent waste or damage,
and for any default or carelessness Lessee shall be liable for all injuries
sustained by other Lessees or occupants of the Building or Lessee.

18.      Lessor reserves the right to exclude or expel from the Building any
person who, in the judgment of Lessor, is intoxicated or under the influence of
liquor or drugs, or who shall, in any manner, do any act in violation of any of
the rules and regulations of the Building.

19.      The requirements of Lessee will be attended to only upon application at
the Building's management office. Employees of Lessor shall not perform any work
or do anything outside of their regular duties unless under special instructions
from the Lessor, and no employee will admit any person (Lessee or otherwise) to
any office without specific instructions from the Lessor.

20.      No vending machine or machines of any description shall be installed,
maintained or operated upon the Premises without the written consent of the
Lessor.

21.      Lessor shall have the right, exercisable without notice and without
liability to Lessee, to change the name and the street address of the Building
of which the Premises are a part.

22.      Lessee agrees that it shall comply with all fire and security
regulations that may be issued from time to time by municipal authorities or by
Lessor, and Lessee also shall provide Lessor with the name of a designated
responsible employee to represent Lessee in all matters pertaining to such fire
or security regulations.

23.      Lessee shall not disturb, solicit, or canvass any occupant of the
Building and shall cooperate to prevent same.

24.      Without the written consent of Lessor, Lessee shall not use the name of
the Building in connection with or in promoting or advertising the business of
Lessee except as Lessee's address.

25.      Lessor reserves the right, by written notice to Lessee, to rescind,
alter or waive any Rule and Regulation at any time and to make such other and
further Rules and Regulations as in its judgment may from time to time be
necessary, desirable or proper for the health, safety, and preservation of good
order for the Building and its Lessees.

26.      In the event of any conflict between these Rules and Regulations and
the terms of the Lease, the terms of the Lease shall prevail and control.

</TEXT>
</DOCUMENT>
