Heron Therapeutics, Inc./DE – ‘10-K’ for 12/31/97 – EX-10.E

As of:  Monday, 3/30/98   ·   For:  12/31/97   ·   Accession #:  818033-98-6   ·   File #:  0-16109

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Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                         49±   225K 
 2: EX-10.E     Lease Agreement                                       66±   246K 
 3: EX-27       Financial Data Schedule (Pre-XBRL)                     2      7K 

EX-10.E   —   Lease Agreement
Exhibit Table of Contents

EX-10.E
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LEASE   

 METROPOLITAN LIFE INSURANCE COMPANY
a New York corporation    

as Landlord 

and   

 ADVANCED POLYMER SYSTEMS,
a Delaware corporation

as Tenant   

SEAPORT CENTRE  
REDWOOD CITY, CALIFORNIA  

EX-10.E
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TABLE OF CONTENTS             

PARAGRAPH 1 LEASE OF PREMISES; TERM                                             

PARAGRAPH 2 BASIC ANNUAL RENT AND RENT ADJUSTMENTS                              

PARAGRAPH 3 ADDITIONAL RENT                                                     

PARAGRAPH 4 SECURITY DEPOSIT                                                    

PARAGRAPH 5 SUBSTITUTED PREMISES                                                

PARAGRAPH 6 REPAIRS                                                             

PARAGRAPH 7 IMPROVEMENTS AND ALTERATIONS                                        

PARAGRAPH 8 LIENS                                                               

PARAGRAPH 9 USE OF PREMISES                                                     

PARAGRAPH 10 UTILITIES AND SERVICES                                             

PARAGRAPH 11 RULES AND REGULATIONS                                              

PARAGRAPH 12 TAXES ON TENANT'S PROPERTY                                         

PARAGRAPH 13 FIRE OR CASUALTY                                                   

PARAGRAPH 14 EMINENT DOMAIN                                                     

PARAGRAPH 15 ASSIGNMENT AND SUBLETTING                                          

PARAGRAPH 16 ACCESS                                                             

PARAGRAPH 17 SUBORDINATION; ATTORNMENT; ESTOPPEL CERTIFICATES                   

PARAGRAPH 18 SALE BY LANDLORD                                                   

PARAGRAPH 19 NON-LIABILITY AND INDEMNIFICATION OF LANDLORD; INSURANCE           

PARAGRAPH 20 WAIVER OF SUBROGATION                                              

PARAGRAPH 21 ATTORNEYS' FEES                                                    

PARAGRAPH 22 WAIVER                                                             

PARAGRAPH 23 NOTICES                                                            

PARAGRAPH 24 INSOLVENCY OR BANKRUPTCY                                           

PARAGRAPH 25 DEFAULT                                                            

PARAGRAPH 26 HOLDING OVER                                                       

PARAGRAPH 27 CONDITION OF PREMISES                                              

PARAGRAPH 28 QUIET POSSESSION                                                   

PARAGRAPH 29 NOTICE OF DAMAGE                                                   

PARAGRAPH 30 GOVERNING LAW                                                      

PARAGRAPH 31 COMMON FACILITIES; PARKING                                         

PARAGRAPH 32 SIGNAGE                                                            

PARAGRAPH 33 SUCCESSORS AND ASSIGNS                                             

PARAGRAPH 34 BROKERS                                                            

PARAGRAPH 35 NAME                                                               

PARAGRAPH 36 EXAMINATION OF LEASE                                               

PARAGRAPH 37 INTEREST ON TENANT'S OBLIGATIONS; LATE CHARGE                      

PARAGRAPH 38 TIME                                                               

PARAGRAPH 39 DEFINED TERMS AND MARGINAL HEADINGS                                

PARAGRAPH 40 PRIOR AGREEMENTS; SEVERABILITY                                     

PARAGRAPH 41 CORPORATE AUTHORITY                                                

PARAGRAPH 42 NO LIGHT, AIR OR VIEW EASEMENTS                                    

PARAGRAPH 43 LANDLORD'S APPROVALS                                               

PARAGRAPH 44 EXERCISE FACILITY                                                  

PARAGRAPH 45 MISCELLANEOUS                                                      

PARAGRAPH 46 WAIVER OF JURY TRIAL                                               

ADDENDUM TO OFFICE LEASE                                                        

CONSTRUCTION ADDENDUM                                                           

EXHIBIT A     Site Plan of Project                                              

EXHIBIT B     Site Plan of Premises                                             

EXHIBIT C     Confirmation of Lease Term                                        

EXHIBIT D     Permitted Hazardous Materials                                     

EXHIBIT E     (Intentionally Omitted)                                           

EXHIBIT F     Form of Subordination, Nondisturbance & Attornment                
Agreement                                           

EX-10.E
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LEASE   

THIS LEASE is made as of November 7, 1997 by and between
METROPOLITAN LIFE INSURANCE COMPANY, a New York corporation ("Landlord"),       
and ADVANCED POLYMER SYSTEMS, a Delaware corporation ("Tenant" or               
"Advanced Polymer").                                                            

BASIC LEASE PROVISIONS    

1.    PREMISES LOCATION:  a part of Building 1, Phase I of Seaport Centre; 123  
Saginaw Drive, Redwood City, California  94063.                     

2.    RENTABLE AREA:  Approximately 26,067 rentable square feet.                

3.    INITIAL BASIC ANNUAL RENT:  $594,327.60 ($22.80 per rentable square foot  
per year) (i.e., $1.90 per month)                                   

4.    INITIAL MONTHLY RENTAL INSTALLMENTS:  $49,527.30 ($1.90 per rentable      
square foot)                                                        

5.    RENT ADJUSTMENT DATES (AND BASIC ANNUAL RENT AND MONTHLY RENTAL           
INSTALLMENTS THEREAFTER):  The Rent Adjustment Date(s) are the      
  respective anniversaries of the Commencement Date set forth below with
corresponding new Basic Annual Rent and Monthly Rental Installments 
effective until the next Rent Adjustment Date:                      

                  Basic            Monthly           Monthly
                Annual            Rental             Rate/
Date             Rent           Installment           RSF 
 ----            ------          -----------         -------
1st Anniversary     $609,967.80       $50,830.65          $1.95     
2nd Anniversary     $625,608.00       $52,137.00          $2.00     
3rd Anniversary     $641,248.20       $53,437.35          $2.05     
4th Anniversary     $656,888.40       $54,740.70          $2.10     
5th Anniversary     $672,528.60       $56,044.05          $2.15     
6th Anniversary     $688,168.80       $57,347.40          $2.20     

6.    TENANT'S SHARE OF OPERATING EXPENSES:                                     
Tenant's Building Share:       42.5%                          
Tenant's Phase Share:          8.64%                          
Tenant's Project Share:        2.61%                          

7.    TERM OF LEASE:          Seven (7) years                                   

8.    COMMENCEMENT DATE:      November 15, 1997 or earlier as provided in       
Paragraph 1(c)      

9.    EXPIRATION DATE:        Seven (7) years after the Commencement Date       

10.   SECURITY DEPOSIT:       $150,000.00 due upon execution and delivery of    
 this Lease by Tenant.

11.   LISTING BROKER:         Cornish & Carey Commercial                        

12.   COOPERATING BROKER:     Ernst & Young LLP                                 

13.   SOLE PERMITTED USE:     Office, research and development,                 
warehousing                                                                     
                and no other use, but in no event in
violation                                                                       
             of any provision of any rules and
regulations                                                                     
for the Project.    

14.   PARKING SPACES:         86                                                

IN WITNESS WHEREOF, the parties hereto have executed this Lease,    
consisting of the foregoing Basic Lease Provisions and Paragraphs 1             
through 46 which follow, together with the attached Rider to Lease,             
Construction Addendum and Exhibits A through C inclusive, incorporated          
herein by this reference, as of the date first above written.  The              
foregoing Basic Lease Provisions are an integral part of this Lease;            
however, in the event of any conflict between any Basic Lease Provision         
and the balance of this Lease, the latter shall control.                        

LANDLORD:                                     TENANT:                           

METROPOLITAN LIFE INSURANCE                   ADVANCED POLYMER SYSTEMS,         
COMPANY, a New York corporation               a Delaware corporation            

By: /s/Edward J. Hayes                        By: /s/Michael O'Connnell         
-------------------------                     --------------------      

Its: Assistant Vice President                Its: Executive VP/CFO              
------------------------                     --------------------     

EX-10.E
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LEASE OF PREMISES; TERM 
----------------------- 

PARAGRAPH 1                                                                     

(a)  SEAPORT CENTRE.  The real property shown on the map attached   
hereto as EXHIBIT A, together with all improvements now or hereafter            
located on such real property, is referred to in this Lease as the              
"Project."  The Project is more commonly known as Seaport Centre and is         
located in Redwood City, California.  The Project is comprised of Phase I,      
Phase II and Phase III, which are generally designated on EXHIBIT A, each       
of which shall individually be referred to in this Lease as a "Phase."          
The Phase in which the Premises (as defined in Paragraph 1(b) herein) are       
located is indicated in Item 1 of the Basic Lease Provisions and is             
referred to in this Lease as "Tenant's Phase."  The building in which the       
Premises are located is indicated in Item 1 of the Basic Lease Provisions       
and is referred to in this Lease as the "Building."  Landlord reserves the      
right to amend at any time the definition of "Tenant's Phase" to include        
any other buildings located in the Project which are owned by Landlord, in      
which event Tenant's Phase Share (as defined in Paragraph 3(a) below)           
shall be adjusted to reflect the inclusion of any such additional               
buildings in the definition of "Tenant's Phase."                                

(b)  LEASE OF PREMISES.  Landlord hereby leases to Tenant and Tenant
hereby hires from Landlord, subject to all the terms and conditions             
hereinafter set forth, those certain premises (the "Premises") described        
in Items 1 and 2 of the Basic Lease Provisions above and substantially as       
shown in the floor plan attached hereto as EXHIBIT B.                           

(c)  TERM.  The term of this Lease (the "Term") shall be as shown in
Item 7 of the Basic Lease Provisions and shall commence on the earlier to       
occur of the commencement date shown in Item 8 of the Basic Lease               
Provisions or the date of Substantial Completion of the Tenant                  
Improvements (defined in the Construction Addendum attached hereto) or          
such earlier date as Tenant takes possession or commences use of all or         
any portion of the Premises for any purpose other than the construction         
and installation therein of the Tenant Improvements (the "Commencement          
Date") and shall expire, if not sooner terminated pursuant to the terms of      
this Lease, as of the date set forth in Item 9 of the Basic Lease               
Provisions (the "Expiration Date").  As used herein, "Substantial               
Completion" of the Tenant Improvements shall mean that the work of              
constructing the Tenant Improvements shall be complete, as stated in a          
notice prepared by Landlord's architect, notwithstanding that minor             
details of construction, mechanical adjustments or decorations which do         
not materially interfere with Tenant's use of the Premises (so-called           
"punchlist" items) remain to be performed or that Tenant's furniture,           
telephones, telecopiers, photocopiers, computers and other business             
machines or equipment have not been installed by Tenant.  The actual            
Commencement Date shall be confirmed by Landlord in the Confirmation of         
Lease Term attached hereto as EXHIBIT C upon such commencement.                 
Notwithstanding the foregoing, in no event shall the Expiration Date be         
extended.                                                                       

  BASIC ANNUAL RENT AND RENT ADJUSTMENTS

PARAGRAPH 2                                                                     

(a)  BASIC ANNUAL RENT.  Tenant agrees to pay as Basic Annual Rent  
for the Premises the initial sum shown in Item 3 of the Basic Lease             
Provisions, increased as set forth in Paragraph 2(b) below.  The Basic          
Annual Rent shall be payable in monthly installments as shown in Items 4        
and 5 of the Basic Lease Provisions, each payable in advance and without        
deduction, abatement or offset.  A monthly installment shall be paid to         
Landlord on the date of this Lease in the full amount and, subsequently,        
monthly installments shall be paid to Landlord on the first day of the          
first calendar month commencing after the Commencement Date and continuing      
on the first day of each calendar month during the Term thereafter.  If         
the Term commences or ends on a day other than the first or last day,           
respectively, of a calendar month, then the Basic Annual Rent for each          
such partial month shall be prorated in the proportion that the number of       
days this Lease is in effect during such partial month bears to the total       
number of days in such calendar month, and such Basic Annual Rent shall be      
payable at the commencement of such partial month.                              

(b)  RENT INCREASES.  The amount of Basic Annual Rent and the       
Monthly Rental Installments shall be adjusted on each Rent Adjustment Date      
set forth in Item 5 of the Basic Lease Provisions, to be the amount shown       
in the Basic Lease Provisions.                                                  

(c)  RENT.  Tenant acknowledges and agrees that Landlord has entered
into this Lease in reliance upon Tenant's agreement to timely pay all of        
the Basic Annual Rent, the Additional Rent (as defined in Paragraph 3           
below) and all other amounts required to be paid under this Lease               
(including all Addenda and Exhibits hereto and subsequent amendments            
hereof) and in no event would Landlord have agreed to grant any occupancy       
rights in and to the Premises to Tenant for less than all such amounts,         
however described or designated herein.  Accordingly, all sums payable by       
Tenant to Landlord hereunder are sometimes collectively referred to as,         
and shall collectively constitute, "rent" for all purposes hereunder, at        
law and in equity.                                                              

     ADDITIONAL RENT

PARAGRAPH 3                                                                     

(a)  TENANT'S SHARE OF COSTS.  Tenant shall pay as "Additional Rent"
Tenant's proportionate share ("Tenant's Building Share") of the Building        
Operating Expenses (as defined below), plus Tenant's proportionate share        
("Tenant's Phase Share") of Phase Operating Expenses (as defined below),        
plus Tenant's proportionate share ("Tenant's Project Share") of Project         
Operating Expenses (as defined below).  Tenant's Building Share shall be        
the percentage obtained by dividing the rentable square footage of the          
Premises by the total rentable square footage of the Building and Tenant's      
Phase Share shall be the percentage obtained by dividing the rentable           
square footage of the Premises by the total rentable square footage of the      
Phase.  Tenant's Project Share shall be the percentage obtained by              
dividing the rentable square footage of the Premises by the total rentable      
square footage of the Project.  Tenant's Building Share, Tenant's Phase         
Share and Tenant's Project Share shall initially be as set forth in Item 6      
of the Basic Lease Provisions.                                                  

(b)  OPERATING EXPENSES DEFINED.  "Operating Expenses" shall include
all costs incurred by Landlord in the management, operation, maintenance,       
overhauling and repair of the Building, Tenant's Phase and the Project.         
"Building Operating Expenses" shall include Operating Expenses that are         
directly and separately identifiable to the operation and maintenance of        
the Building.  "Project Operating Expenses" shall include all Operating         
Expenses incurred in the operation and maintenance of the Project which         
are neither Building Operating Expenses nor Operating Expenses directly         
and separately identifiable to the operation and maintenance of any other       
office building in the Project.  "Phase Operating Expenses" may include         
Building Operating Expenses that are incurred by each building, including       
the Building, in Tenant's Phase, and also may include Project Operating         
Expenses that are separately identifiable to Tenant's Phase.  Landlord          
shall have the right to allocate a particular expense as a Building             
Operating Expense, Project Operating Expense or Phase Operating Expense;        
however, in no event shall any portion of Building Operating Expenses,          
Project Operating Expenses or Phase Operating Expenses be assessed or           
counted against Tenant more than once.                                          

(c)  EXAMPLES OF OPERATING EXPENSES.  Operating Expenses shall      
include the following costs, by way of illustration only and not                
limitation: (1) all "Property Taxes" (as defined below), and all costs and      
expenses to contest the amount or validity of any of the same; (2) all          
insurance premiums and other costs (including deductibles), including the       
cost of rental insurance; (3) all license, permit and inspection fees; (4)      
all costs of utilities, fuels and related services, including water,            
sewer, light, telephone, power and steam connection, service and related        
charges; (5) all costs to repair, maintain and operate heating,                 
ventilating and air conditioning systems, including, without limitation,        
preventive maintenance; (6) all janitorial, landscaping and security            
services; (7) all wages, salaries, payroll taxes, fringe benefits and           
other labor costs, including the cost of workers' compensation and              
disability insurance; (8) all costs of operation, maintenance and repair        
of all parking facilities and other common areas; (9) all supplies,             
materials, equipment and tools; (10) dues of and expenses and assessments       
incurred in connection with membership in the Seaport Centre Owners'            
Association; (11) modifications to the Building or the Project occasioned       
by any applicable laws, statutes, ordinances, orders, requirements, rules       
or regulations now or hereafter in effect of any governmental or quasi-         
governmental authority; (12) the total charges of any independent               
contractors employed in the care, operation, maintenance, repair, leasing       
and cleaning of the Project, including, without limitation, landscaping,        
roof maintenance, and repair, maintenance and monitoring of life-safety         
systems, plumbing systems, electrical wiring and Project signage; (13) the      
cost of accounting services necessary to compute the rents and charges          
payable by tenants at the Project; (14) window and exterior wall cleaning       
and painting; (15) managerial and administrative expenses; (16) all costs       
in connection with the exercise facility at the Project; (17) all costs         
and expenses related to Landlord's retention of consultants in connection       
with the routine review, inspection, testing, monitoring, analysis, and         
control of Hazardous Materials (defined in Paragraph 9(b) below) and            
retention of consultants in connection with the clean-up of Hazardous           
Materials (to the extent not recoverable from a particular tenant of the        
Project), and all costs and expenses related to the implementation of           
recommendations made by such consultants concerning the use, generation,        
storage, manufacture, production, storage, release, discharge, disposal or      
clean-up of Hazardous Materials on, under or about the Premises or the          
Project (to the extent not recoverable from a particular tenant of the          
Project); (18) all capital improvements made that reduce other Operating        
Expenses, and all other capital expenditures, but only as amortized over        
such reasonable period as Landlord shall determine, with a return on            
capital at the rate of ten percent (10%) per annum or at such higher rate       
as may have been available to Landlord on funds borrowed for the purpose        
of constructing such capital improvements; (19) all property management         
costs and fees, including, without limitation, all costs incurred in            
connection with the Project property management office; and (20) all fees       
or other charges incurred in conjunction with voluntary or involuntary          
membership in any energy conservation, air quality, environmental, traffic      
management or similar organizations.                                            

(d)  PROPERTY TAXES.  "Property Taxes" shall include (1) all real   
estate taxes, personal property taxes and other taxes, charges and general      
and special assessments which are levied with respect to any portion of         
the Building or the Project or any improvements, fixtures, equipment or         
other property of Landlord, real or personal, located in or about the           
Building or Project or used in connection with the operation thereof, (2)       
any tax, surcharge, assessment or service or other fee which shall be           
levied or collected in addition to or in lieu of real estate or personal        
property taxes, other than taxes covered by Paragraph 12 below, (3) any         
service or other fees collected by governmental agencies in addition to or      
in lieu of property taxes for services provided by such agencies, and (4)       
any rental, excise, sales, transaction privilege or other tax or levy,          
however denominated, imposed upon or measured by any rent reserved              
hereunder or on Landlord's business of leasing the Premises, excepting          
only net income taxes.                                                          

(e)  STATEMENT OF EXPENSES.  Prior to the commencement of the Term  
and of each calendar year thereafter, Landlord shall give Tenant a written      
estimate of the amount of Operating Expenses for the applicable year, as        
well as Tenant's share thereof, which amount shall be payable by Tenant as      
Additional Rent for the ensuing year or portion thereof.  During the            
calendar year that is the subject of Landlord's statement of estimated          
Operating Expenses, Tenant shall pay such estimated amount to Landlord in       
twelve (12) equal monthly installments, in advance, on the first (1st) day      
of each calendar month.  Within one hundred twenty (120) days after the         
end of each calendar year or as soon thereafter as reasonably possible,         
Landlord shall furnish to Tenant a statement showing in reasonable detail       
the actual Building Operating Expenses, Phase Operating Expenses and            
Project Operating Expenses incurred by Landlord for such period and             
Tenant's proportionate share thereof in accordance with this Paragraph 3,       
and Tenant shall within thirty (30) days thereafter make any payment            
necessary to adjust its previous actual payments to the amount shown as         
due from Tenant on such annual statement.  Any actual overpayment by            
Tenant shall be credited against installments of Additional Rent next           
coming due from Tenant under this Paragraph 3.  Nothing contained in this       
Paragraph 3(e) shall be construed to limit the right of Landlord from time      
to time during any calendar year to revise its estimates of the Operating       
Expenses which are the subject of this Paragraph and to reflect such            
revision by prospective adjustments in billings to Tenant for Tenant's          
monthly installments payable under this Paragraph over the remainder of         
such year.  Tenant's share of such Operating Expenses for any partial year      
during the Term shall be that proportion of Tenant's Building Share of          
Building Operating Expenses, Tenant's Phase Share of Phase Operating            
Expenses and Tenant's Project Share of Project Operating Expenses for the       
full year which is the same proportion as the number of days in such            
partial year is to three hundred sixty-five (365).                              

(f)  ADJUSTMENT TO OPERATING EXPENSES.  Notwithstanding anything to 
the contrary contained in this Paragraph 3, as to each specific category        
of Operating Expense which one or more tenants of the Building either pays      
directly to third parties or specifically reimburses to Landlord (for           
example, separately contracted janitorial services or property taxes            
directly reimbursed to Landlord), then, on a category by category basis,        
the amount of Operating Expenses for the affected period shall be adjusted      
as follows: (1) all such tenant payments with respect to such category of       
expense and all of Landlord's costs reimbursed thereby shall be excluded        
from Operating Expenses and Tenant's Building Share, Tenant's Phase Share       
or Tenant's Project Share, as the case may be, for such category of             
Operating Expense shall be adjusted by excluding the square footage of all      
such tenants, and (2) if Tenant pays or directly reimburses Landlord for        
such category of Operating Expense, such category of Operating Expense          
shall be excluded from the determination of Operating Expenses for the          
purposes of this Lease.                                                         

(g)  EXCLUSIONS FROM OPERATING EXPENSES.  Notwithstanding anything  
to the contrary in this Paragraph 3, Landlord and Tenant agree that             
Operating Expenses shall not include:  (1) depreciation on the Building,        
Tenant's Phase or the Project; (2) costs incurred in renovating or              
improving vacant space or space for other tenants of the Project; (3)           
finders' fee and real estate brokers' commissions; (4) ground lease             
payments or mortgage principal or interest except to the extent to pay          
financed capital expenditures included in Operating Expenses pursuant to        
Paragraph 3(c)(18); (5) repairs due to casualty or condemnation and             
reimbursed by net proceeds of insurance coverage; (6) any cost due to           
Landlord's breach of this Lease in excess of the cost which would be            
includable in Operating Expenses if Landlord had not breached this Lease;       
(7) penalties imposed on Landlord due to Landlord's failure to comply with      
a law, ordinance or regulation applicable to the Building, Tenant's Phase       
or the Project; (8) attorneys' fees and other costs and expenses incurred       
in connection with disputes with other tenants of the Project or                
associated with the enforcement of any lease for space at the Project           
other than Tenant's, or the defense of Landlord's title to or interest in       
the Building; (9) costs incurred to clean up, contain, remove or otherwise      
remediate Hazardous Materials (defined in Paragraph 9(b) below)                 
contamination, if any, present in the Project prior to the Commencement         
Date; or (10) the cost of repairs, alterations or replacements needed to        
correct any defects in the original design, materials or workmanship of         
the Building, Tenant's Phase or the Project.                                    

SECURITY DEPOSIT

PARAGRAPH 4                                                                     

Tenant has paid or, upon execution of this Lease, will pay Landlord 
the sum set forth in Item 9 of the Basic Lease Provisions (the "Security        
Deposit") as security for the performance of the terms of this Lease by         
Tenant.  Landlord shall not be required to keep the Security Deposit            
separate from its general funds, and Tenant shall not be entitled to            
interest thereon.  If Tenant defaults with respect to any provision of          
this Lease, including, without limitation, the provisions relating to the       
payment of rent or the condition of the Premises upon the termination of        
this Lease, Landlord may, but shall not be required to, use, apply or           
retain all or any part of the Security Deposit for the payment of any rent      
or other sum in default or any other amount which Landlord may spend or         
become obligated to spend by reason of Tenant's default or to compensate        
Landlord for any other loss or damage which Landlord may suffer by reason       
of Tenant's default, including, without limitation, costs and attorneys'        
fees incurred by Landlord to recover possession of the Premises following       
a default by Tenant hereunder.  If any portion of the Security Deposit is       
so used or applied, Tenant shall, within ten (10) days following                
Landlord's demand therefor, deposit cash with Landlord in an amount             
sufficient to restore the Security Deposit to its original amount, and          
Tenant's failure to do so within ten (10) days following Landlord's             
demand, shall constitute a default hereunder by Tenant.  If Tenant shall        
fully and faithfully perform every provision of this Lease to be performed      
by it, the Security Deposit or any balance thereof shall be returned,           
without interest, to Tenant (or, at Landlord's option, to the last              
assignee of Tenant's interest hereunder) within a reasonable time after         
the expiration of the Term and surrender of possession of the Premises to       
Landlord.                                                                       

SUBSTITUTED PREMISES  

PARAGRAPH 5      [Intentionally Omitted]                                        

REPAIRS   

PARAGRAPH 6                                                                     

(a)  LANDLORD'S REPAIRS.  Subject to Paragraph 6(b), Landlord shall 
maintain the structural portions of the Building, the roof, exterior walls      
and exterior doors, foundation, and underslab standard sewer system of the      
Building in good, clean and safe condition.  Notwithstanding the                
foregoing, Landlord shall have no responsibility to repair the Building's       
heating, ventilation and air conditioning equipment, and all such repairs       
shall be performed by Tenant pursuant to the terms of Paragraph 6(b)            
below.  Landlord shall also maintain the landscaping, parking facilities        
and other common areas of the Project.  Except as provided in Paragraphs        
13 and 14, there shall be no abatement of rent, no allowance to Tenant for      
diminution of rental value and no liability of Landlord by reason of            
inconvenience, annoyance or any injury to or interference with Tenant's         
business arising from the making of or the failure to make any repairs,         
alterations or improvements in or to any portion of the Project or in or        
to any fixtures, appurtenances or equipment therein.  Tenant waives the         
right to make repairs at Landlord's expense under any law, statute or           
ordinance now or hereafter in effect.                                           

(b)  TENANT'S REPAIRS.  Tenant shall, at Tenant's sole cost and     
expense:  (i) make all repairs to the Premises and fixtures therein which       
Landlord is not required to make pursuant to Paragraph 6(a) above,              
including, without limitation, repairs to the interior walls, ceilings and      
windows of the Premises, the interior doors, Tenant's signage, and the          
electrical, life-safety, plumbing and heating, ventilation and air              
conditioning ("HVAC") systems located within or serving the Premises; (ii)      
use reasonable efforts, through a program of regularly scheduled                
preventive maintenance approved by Landlord, to keep the HVAC equipment         
serving the Premises in reasonably good order and condition; and (iii)          
maintain the Premises, the fixtures and utilities systems therein, and the      
area immediately surrounding the Premises (including all garbage                
enclosures), in a good, clean and safe condition.  Tenant shall deliver to      
Landlord a copy of any maintenance contract entered into by Tenant with         
respect to the Premises.  Tenant shall also, at Tenant's expense, keep any      
non-standard heating, ventilating and air conditioning equipment and other      
non-standard equipment in the Building in good condition and repair, using      
contractors approved in advance, in writing, by Landlord.  Notwithstanding      
Paragraph 6(a) above, Tenant will pay for any repairs to the Building or        
the Project which are caused by any negligence or carelessness of Tenant        
or its assignees, subtenants or employees, or of the respective agents of       
any of the foregoing persons, or of any other persons permitted in the          
Building or elsewhere in the Project by Tenant or any of them.  Tenant          
will maintain the Premises, and will leave the Premises upon termination        
of this Lease, in a safe, clean, neat and sanitary condition.                   

  IMPROVEMENTS AND ALTERATIONS

PARAGRAPH 7                                                                     

(a)  COMMON AREA.  Landlord shall have the right at any time to     
change the arrangement and location of the common area of the Building or       
the Project and, upon giving Tenant reasonable notice thereof, to change        
any name, number or designation by which the Premises, the Building, the        
Phase or the Project is commonly known.                                         

(b)  ALTERATIONS.                                                   

(1)  Except for Minor Alterations (as defined in Paragraph
7(b)(3) below), Tenant shall not make any alterations, additions, or            
improvements of or to the Premises without the prior written consent of         
Landlord, which Landlord may give or deny in its sole and absolute              
discretion.  At the time such consent is requested, Tenant shall furnish        
to Landlord for Landlord's written approval (which shall not be                 
unreasonably withheld) the names of Tenant's architect, Tenant's                
contractor(s) and all subcontractors who will be supplying materials or         
performing work in connection with such alterations, additions and              
improvements, a copy of all plans for the proposed work, an estimate of         
the cost thereof and such other information as shall be requested by            
Landlord substantiating Tenant's ability to pay for such work.  No less         
than ten (10) days prior to the commencement of any alterations, additions      
and improvements of or to the Premises, Tenant shall deliver to Landlord        
certificates of insurance from the carrier(s) providing insurance to            
Tenant's architect and Tenant's contractor(s) evidencing the following          
types of coverage in such amounts as are reasonably determined by Landlord      
to be necessary:  (i) professional liability insurance; (ii) commercial         
general liability insurance; (iii) business automobile liability                
insurance; (iv) workers' compensation insurance; and (v) umbrella               
liability insurance.  The insurance specified in (i), (ii), (iii) and (v)       
above shall name Landlord as an additional insured, and all such policies       
shall provide that thirty (30) days' written notice must be given to            
Landlord prior to termination or cancellation.  Landlord, at its sole           
option, may require as a condition to the granting of such consent to any       
work costing in excess of $25,000, that Tenant provide to Landlord, at          
Tenant's sole cost and expense, a lien and completion bond in an amount         
equal to one and one-half (1-1/2) times any and all estimated costs of the      
proposed work, to insure Landlord against any liability for mechanics' and      
materialmen's liens and to insure completion of the work.  Landlord may         
also require as a condition to Landlord's consent to any alterations,           
additions or improvements pursuant to this Paragraph 7(b) that, following       
completion of any such alterations, additions or improvements, Tenant           
shall provide Landlord with unconditional waivers of lien in statutory          
form from all parties performing labor and/or supplying equipment and/or        
materials in connection with such alterations, additions or improvements,       
including Tenant's architect(s).  Before commencing any work, Tenant shall      
give Landlord at least ten (10) days written notice of the proposed             
commencement of such work in order to give Landlord an opportunity to           
prepare, post and record such notice as may be permitted by law to protect      
Landlord's interest in the Premises and the Building from mechanics' and        
materialmen's liens.  Within a reasonable period following completion of        
any work, Tenant shall furnish to Landlord, at Tenant's cost, "as built"        
plans showing the changes made to the Premises including one (1) complete       
set of reproducible drawings for the entire Premises (including, but not        
limited to, a floor plan, HVAC, plumbing, electrical and reflected              
ceiling), including such alterations, additions or improvements.                

    (2)  All such alterations, additions and improvements shall be
made at Tenant's sole expense (including, without limitation, the               
reasonable cost of any review of Tenant's plans by Landlord's architect         
and/or Landlord's engineer) and in conformity with plans therefor approved      
by Landlord in writing prior to the commencement of such work, and such         
work shall be performed by a contractor(s) approved by Landlord.  All work      
performed by Tenant shall comply with the laws, rules, orders, directions,      
regulations and requirements of all governmental entities having                
jurisdiction over such work and shall comply with the rules, orders,            
directions, regulations and requirements of any nationally recognized           
board of insurance underwriters.  Tenant shall use all commercially             
reasonable efforts (including, without limitation, scheduling overtime and      
weekend work) not to interfere with other tenants in the Building and the       
Project when performing any alterations, additions or improvements.  All        
such alterations, additions or improvements (except movable furniture,          
furnishings and trade fixtures) shall, at Landlord's option, become the         
property of Landlord and shall be surrendered with the Premises, as a part      
thereof, at the expiration or earlier termination of the Term.  Upon any        
termination of this Lease, Tenant shall, upon demand by Landlord and at         
Tenant's sole expense, immediately remove any alterations, additions or         
improvements installed at the Premises except for the initial Tenant            
Improvements approved by Landlord pursuant to the Construction Addendum         
and Tenant shall repair and restore the Premises to their original              
condition, reasonable wear and tear excepted.  Any personal property left       
on the Premises at the expiration or other termination of this Lease may,       
at the option of Landlord, either be deemed abandoned or be placed in           
storage at a public warehouse in the name of and for the account of and at      
the expense and risk of Tenant or otherwise disposed of by Landlord in the      
manner provided by law; or, alternatively, in the event that Tenant leaves      
personal property on the Premises following the expiration or other             
termination of this Lease, Landlord may, in Landlord's sole and absolute        
discretion, deem Tenant to be holding over pursuant to the terms of             
Paragraph 26 below.  Tenant expressly releases Landlord of and from any         
and all claims and liability for damage to or destruction or loss of            
property left by Tenant upon the Premises at the expiration or other            
termination of this Lease and, to the extent permitted by then applicable       
law, Tenant shall protect, indemnify, defend and hold Landlord harmless         
from and against any and all claims and liability with respect thereto.         

(3)  Notwithstanding any provision of the foregoing to the
contrary, Tenant may make Minor Alterations without Landlord's prior            
written consent thereto or approval of Tenant's architect, contractor or        
subcontractor, but subject to all other requirements of this Lease              
applicable to alterations, additions, improvements or work by or for            
Tenant, its assignees or sublessees.  For purposes of this Lease, "Minor        
Alterations" shall mean alterations, additions or improvements (i)              
subsequent to those done pursuant to the Construction Addendum; (ii)            
costing less than Fifteen Thousand Dollars ($15,000.00) in any twelve (12)      
month period; and (iii) not affecting any structural portions of the            
Building, the roof, exterior walls, exterior doors, foundation, HVAC, fire      
protection systems, electrical system, or underslab standard sewer system       
of the Building.                                                                

LIENS 

PARAGRAPH 8                                                                     

Tenant shall keep the Premises free from any liens arising out of   
any work performed, materials furnished or obligations incurred by or for       
Tenant, its assignees or sublessees.  In the event that Tenant shall not,       
within ten (10) days following the imposition of any such lien, cause such      
lien to be released of record by payment or posting of a proper bond,           
Landlord shall have, in addition to all other remedies provided herein and      
by law, the right but not the obligation to cause such lien to be released      
by such means as Landlord shall deem proper, including payment of or            
defense against the claim giving rise to such lien.  All sums paid by           
Landlord and all expenses incurred by it in connection therewith shall          
create automatically an obligation of Tenant to pay an equivalent amount        
to Landlord as rent on Landlord's demand therefor, together with interest       
at the lesser of eighteen percent (18%) per annum or the maximum rate then      
permitted by law until paid to Landlord.  Nothing herein shall imply any        
consent by Landlord to subject Landlord's estate to liability under any         
mechanics' or other lien law.                                                   

Tenant shall give Landlord adequate opportunity, and Landlord shall 
have the right at all times, to post such notices of nonresponsibility as       
are provided for in the mechanics' lien laws of California.                     

 USE OF PREMISES

PARAGRAPH 9                                                                     

(a)  COMPLIANCE WITH LAW.  Tenant shall use the Premises only as set
forth in Item 13 of the Basic Lease Provisions and shall not use or permit      
the Premises to be used for any other purpose.  Tenant shall not use or         
occupy the Premises in violation of any law or of the certificate of            
occupancy issued for the Building and shall, upon five (5) days' written        
notice from Landlord, discontinue any use of the Premises which is              
declared by any governmental authority having jurisdiction to be a              
violation of law or of such certificate of occupancy.  Tenant shall comply      
with any direction of any governmental authority having jurisdiction which      
shall, by reason of the nature of Tenant's use or occupancy of the              
Premises, impose any duty upon Tenant or Landlord with respect to the           
Premises or with respect to the use or occupancy thereof.  Tenant shall         
comply with all covenants, conditions and restrictions affecting the            
Project, as such may be amended from time to time, and all articles,            
bylaws and rules of the Seaport Centre Owners' Association.  Tenant shall       
be responsible for obtaining all necessary governmental approvals in            
connection with Tenant's use of the Premises.  Tenant shall not do or           
permit to be done anything which will invalidate, or increase the cost of,      
any fire, extended coverage or other insurance policy covering any part of      
the Project or any property located thereon.  Notwithstanding the               
provisions of Paragraph 3 above, Tenant shall, within ten (10) days             
following Landlord's demand, reimburse Landlord for the full amount of any      
additional premium charged for any such policy by reason of Tenant's            
failure to comply with the provisions of this Paragraph 9(a), it being          
understood that such demand for reimbursement shall not be Landlord's           
exclusive remedy.  Tenant shall not in any way obstruct or interfere with       
the rights of other tenants or occupants of the Building or the Project,        
or injure or annoy them, or use or allow the Premises to be used for any        
improper, immoral, unlawful or objectionable purpose; nor shall Tenant          
cause, maintain or permit any nuisance in, on or about the Premises or          
commit or suffer to be committed any waste in or upon the Premises.             

(b)  HAZARDOUS MATERIALS.  Except as provided in Paragraph 9(b)(1)  
below Tenant shall not use, generate, manufacture, produce, store,              
release, discharge, or dispose of, on, under or about the Premises or any       
part of the Project, or transport to or from the Premises or any part of        
the Project, any Hazardous Material (as defined below) or allow its             
employees, agents, contractors, licensees, invitees or any other person or      
entity to do so.                                                                

   (1)  Notwithstanding the foregoing, Tenant shall be permitted
to use and store in, and transport to and from, the Premises the Hazardous      
Materials identified on EXHIBIT D hereto and by this reference                  
incorporated herein, including wastes generated from the use of such            
identified Hazardous Materials ("Permitted Hazardous Materials") so long        
as: (a) each of the Permitted Hazardous Materials is used or stored in, or      
transported to and from, the Premises only to the extent necessary for          
Tenant's operation of its business at the Premises; (b) at no time shall        
any Permitted Hazardous Material be on, under or about the Premises in          
excess of the quantity specified therefor in EXHIBIT D; and (c) the             
conditions set forth in this Paragraph 9(b) are strictly complied with.         
If Tenant desires to use, store in, or transport to the Premises Hazardous      
Materials other than Permitted Hazardous Materials used by Tenant in the        
quantities designated on EXHIBIT D Tenant shall notify Landlord at least        
thirty (30) days prior to such proposed use, storage or transportation,         
and any such use, storage or transportation of additional Hazardous             
Materials (and any related amendment or supplement of EXHIBIT D) shall be       
subject to Landlord's prior written consent, which consent may be withheld      
in Landlord's sole discretion.  The right to use and store in, and              
transport to and from, the Premises the Permitted Hazardous Materials is        
personal to Advanced Polymer and may not be assigned or otherwise               
transferred by Advanced Polymer without the prior written consent of            
Landlord, which consent may be withheld in Landlord's sole discretion. Any      
consent by Landlord pursuant to Paragraph 15 of this Lease to an                
assignment, transfer, subletting, mortgage, pledge, hypothecation or            
encumbrance of this Lease, and any interest therein or right or privilege       
appurtenant thereto, shall not constitute consent by Landlord to the use        
or storage in, or transportation to, the Premises of any Hazardous              
Material (including a Permitted Hazardous Material) by any such assignee,       
sublessee or transferee unless Landlord expressly agrees otherwise in           
writing. Any consent by Landlord to the use or storage in, or                   
transportation to or from the Premises, of any Hazardous Material               
(including a Permitted Hazardous Material) by an assignee, sublessee or         
transferee of Tenant shall not constitute a waiver of Landlord's right to       
refuse such consent as to any subsequent assignee or transferee.                

(2)  Tenant shall comply with and shall cause Tenant's    
employees, agents, contractors, licensees and invitees (collectively,           
"Tenant's Agents") to comply with, and shall keep and maintain the              
Premises and cause Tenant's Agents to keep and maintain the Premises, in        
compliance with all Environ-mental Laws (as defined below). Neither Tenant      
nor Tenant's Agents shall violate, or cause or permit the Premises to be        
in violation of, any Environmental Laws.                                        

Tenant shall, at its own expense during Tenant's use or   
occupancy, procure, maintain in effect and comply with all conditions of        
any and all permits, licenses and other governmental and regulatory             
approvals required for Tenant's use of the Premises.  Following the             
Commencement Date or such earlier date as Tenant takes possession of or         
commences use of the Premises for construction of Tenant Improvements or        
otherwise, Tenant shall cause any and all Hazardous Materials removed from      
the Premises to be removed and transported solely by duly licensed              
handlers to duly licensed facilities for final disposal of such materials       
and wastes. Tenant acknowledges that the sewer piping at the Project is         
made of ABS plastic. Accordingly, without Landlord's prior written              
consent, which may be given or withheld in Landlord's sole discretion,          
only ordinary domestic sewage is permitted to be put into the drains at         
the Premises. UNDER NO CIRCUMSTANCES SHALL TENANT EVER DEPOSIT ANY ESTERS       
OR KETONES (USUALLY FOUND IN SOLVENTS TO CLEAN UP PETROLEUM PRODUCTS) IN        
THE DRAINS AT THE PREMISES. If Tenant desires to put any substances other       
than ordinary domestic sewage into the drains, it shall first submit to         
Landlord a complete description of each such substance, including its           
chemical composition, and a sample of such substance suitable for               
laboratory testing. Landlord shall promptly determine whether or not the        
substance can be deposited into the drains and its determination shall be       
absolutely binding on Tenant. Upon demand, Tenant shall reimburse Landlord      
for expenses incurred by Landlord in making such determination. If any          
substances not so approved hereunder are deposited in the drains in             
Tenant's Premises, Tenant shall be liable to Landlord for all damages           
resulting therefrom, including, but not limited to, all costs and expenses      
incurred by Landlord in repairing or replacing the piping so damaged.           

Tenant agrees to provide Landlord with: (a) a copy of any 
hazardous material management plan or similar document required by any          
federal, state or local governmental or regulatory authority to be              
submitted by Tenant; (b) copies of all permits, licenses and other              
governmental and regulatory approvals with respect to the use of Hazardous      
Materials; (c) copies of hazardous waste manifests reflecting the legal         
and proper disposal of all Hazardous Materials removed from the Premises;       
and (d) copies of all reports, studies and written results of tests or          
inspections concerning the Premises or any part of the Project with             
respect to Hazardous Materials, including, without limitation, the "Plans"      
hereinafter defined (collectively "Documents"). Tenant shall deliver all        
Documents to Landlord promptly following the earlier of (i) Tenant's            
submission of such Documents to the requesting governmental agency, or          
(ii) Tenant's receipt of such Documents (Tenant hereby agreeing that it         
shall exercise diligent efforts to expeditiously obtain copies of any such      
Documents known by Tenant to exist).                                            

     (3)  Upon commencing any activity involving Hazardous Materials
on the Premises, and continuing thereafter throughout the term of this          
Lease, Tenant shall initiate and maintain the systems set forth in the          
following (collectively, "Plans") in order to ensure the routine                
monitoring of the levels of Hazardous Materials which may be present on,        
under or about the Premises or any part of the Project or properties            
adjoining or in the vicinity of the Project as the result of the                
activities of Tenant or Tenant's Agents and to ensure continued compliance      
with the procedures and regulations concerning the handling, storage, use       
and disposal of Hazardous Materials:  (a) each permit, license or other         
governmental or regulatory approval with respect to the use of Hazardous        
Materials, (b) each Hazardous Materials management plan or similar              
document required by any federal, state, or local governmental or               
regulatory entity, (c) each plan for handling and disposing of Hazardous        
Materials necessary to comply with Environmental Laws prepared by or on         
behalf of Tenant or Tenant's Agents (whether or not required to be              
submitted to a governmental agency).  Tenant shall provide Landlord copies      
of the foregoing described Plans within five (5) days after each is so          
issued or is so required to be prepared or is so required to be submitted       
by Tenant to a governmental agency.                                             

    (4)  Not less often than once each calendar quarter during the
term of this Lease, Tenant shall provide Landlord with a written report         
which shall set forth the results of the monitoring of Hazardous Materials      
during the previous calendar quarter. Landlord may elect (but shall not be      
obligated) to retain an independent consultant experienced in the use and       
management of Hazardous Materials for the purpose of reviewing any              
information received by Landlord in connection with Hazardous Materials.        
Pursuant to such review, Landlord's consultant may make recommendations in      
connection with Tenant's control of Hazardous Materials on the Premises,        
and Tenant shall implement, at Tenant's sole cost, the recommendations of       
Landlord's consultant relating to Tenant's improper use or management of        
Hazardous Materials in violation of Environmental Laws.  Landlord's             
failure to appoint any consultant shall not relieve Tenant of any of            
Tenant's obligations under this Lease relating to Hazardous Materials nor       
constitute a waiver of Landlord's rights under this Lease.                      

   (5)  Landlord may install permanent or other testing wells or
devices at or about the Premises or any part of the Project, and may cause      
the ground water to be tested to detect the presence of Hazardous               
Materials at least once every twelve (12) months during the term of this        
Lease by the use of such wells or devices as are then customarily used for      
such purposes. If Tenant so requests in writing, Landlord shall supply          
Tenant with a copy of any such test results. The costs of any such tests,       
and the installation, maintenance, repair, removal, closure and                 
replacement of such wells or devices shall be an Operating Expense              
pursuant to Paragraph 3 of this Lease; provided, however, such costs shall      
be borne solely by Tenant if the same are incurred by Landlord because          
Tenant is in breach of its obligations under this Paragraph 9(b) or if,         
following the initiation of such testing, the presence of Hazardous             
Materials is detected and Tenant or Tenant's Agents are responsible             
therefor.  Tenant's obligations under this Paragraph 9(b)(5) shall survive      
the expiration or earlier termination of this Lease.                            

   (6)  Landlord and its representative shall have the right, at
the following times, to enter the Premises and to: (i) conduct any              
testing, monitoring and analysis for Hazardous Materials; (ii) review any       
documents, materials, inventory, financial data or notices or                   
correspondence to or from private parties or governmental or regulatory         
authorities in connection therewith; and (iii) review all storage, use,         
transportation and disposal facilities and procedures associated with the       
storage, use, transportation and disposal of Hazardous Materials provided       
that Landlord (x) shall comply with all of Tenant's safety procedures, (y)      
shall not unreasonably interfere  with Tenant's operations and (z) shall        
keep confidential any proprietary  testing, processes or research of            
Tenant of which Tenant has notified Landlord of their confidential and          
proprietary status (collectively, "Inspection"):                                

     a.  Once every three months for the first twelve (12)
months after the Commencement Date and once every twelve (12) months            
thereafter throughout the term of this Lease.                                   

    b.  At any time during the term of this Lease if, in
Landlord's reasonable judgment, Tenant is breaching its obligation under        
this Paragraph 9(b) or is not in compliance with any other provision of         
this Lease.                                                                     

    All costs and expenses incurred by Landlord in connection with
any Inspection pursuant to this Paragraph 9(b)(6) shall, subject to             
Paragraph 9(b)(15) below, become due and payable by Tenant as Additional        
Rent, upon presentation by Landlord of an invoice for up to one such            
Inspection every twelve (12) month period and additional Inspections as         
follows:  (x) if at the time of such Inspection Tenant is not in                
compliance with the provisions of this Paragraph 9(b) and (y) in any event      
to the extent such expenses are related to Tenant's improper use or             
management of Hazardous Materials in violation of Environmental Laws.           

  (7)  Tenant shall give prompt written notice to Landlord of:

          a.  any proceeding or inquiry by, notice from, or order of
any governmental authority (including, without limitation, the California       
State Department of Health Services) with respect to the presence of any        
Hazardous Material on, under or about the Premises or any part of the           
Project or the migration thereof from or to other property;                     

    b.  all claims made or threatened by any third party
against Tenant, the Premises or any part of the Project relating to any         
loss or injury resulting from any Hazardous Materials; and                      

         c.  any spill, release, discharge or non-routine disposal
of Hazardous Materials that occurs with respect to the Premises or              
operations at the Premises by Tenant or Tenant's Agents;                        

          d.  all matters of which Tenant is required to give notice
pursuant to Sections 25249.5 ET SEQ. and 25359.7 of the California Health       
and Safety Code; and                                                            

         e.  Tenant's discovery of any occurrence or condition on,
under or about the Premises or any part of the Project or any real              
property adjoining or in the vicinity of the Premises or the Project that       
could cause the Premises or any part of the Project to be subject to any        
restrictions on the ownership, occupancy, transferability or use of the         
Premises or any part of the Project under any Environmental Law, including      
without limitation, Tenant's discovery of any occurrence or condition on        
any real property adjoining or in the vicinity of the Premises or the           
Project that could cause the Premises or any part of the Project to be          
classified as "border zone property" under the provisions of California         
Health and Safety Code Sections 25220 ET SEQ. or any regulation adopted in      
accordance therewith, or to be otherwise subject to any restrictions on         
the ownership, occupancy, transferability or use of the Premises or any         
part of the Project under any Environmental Law.                                

    (8)  Landlord shall have the right to join and participate in,
as a party if it so elects, any legal proceedings or actions affecting the      
Premises or any part of the Project initiated in connection with any            
Environmental Law and have its attorneys' fees in connection therewith          
paid by Tenant to the extent such fees relate to (w) the violation by           
Tenant of Environmental Laws, or (x) any third party's allegation of such       
violation, or (y) any third party's allegation regarding emergency              
response, clean-up or remediation or right of contribution under any            
Environmental Laws or any third party's allegation of bodily injury             
arising from any alleged Release as defined in Paragraph 9(b)(9) below.         
In addition, Tenant shall not take any remedial action in response to the       
presence of any Hazardous Materials in, under, or about the Premises or         
the Project (except in the case where loss of life or substantial property      
damage is imminent or immediate action is required by any governmental          
entity, in which event Tenant shall take immediate remedial action), nor        
enter into any settlement agreement, consent decree or other compromise in      
respect to any claims relating to any Hazardous Materials in any way            
connected with the Premises or the Project, without first notifying             
Landlord of Tenant's intention to do so and affording Landlord ample            
opportunity to appear, intervene or otherwise appropriately assert and          
protect Landlord's interest with respect thereto.                               

(9)  To the fullest extent permitted by law, Tenant shall 
protect, defend, indemnify and hold harmless Landlord, its directors,           
officers, partners, employees, agents, successors and assigns from and          
against any and all claims, fines, judgments, penalties, losses, damages,       
costs, expenses or liability (including attorneys' fees and costs)              
directly or indirectly arising out of or attributable to a Release              
(defined below), but only to the extent of such activities of Tenant or         
Tenant's Agents, including, without limitation: (a) all foreseeable             
consequential damages, including, without limitation, loss of rental            
income and diminution in property value; (b) the costs of any                   
investigation, monitoring, removal, restoration, abatement, repair,             
cleanup, detoxification or other ameliorative work of any kind or nature        
(collectively "Remedial Work") and the preparation and implementation of        
any closure, remedial or other required plans; (c) any injury to or death       
of persons or damage to or destruction of property; and (d) any failure of      
Tenant or Tenant's Agents to observe the foregoing covenants.  For              
purposes of this Paragraph 9(b)(9), "Release" means the use, generation,        
manufacture, production, storage, release, threatened release, discharge,       
disposal, transportation to or from, or presence of any Hazardous Material      
on, in or under the Premises or any part of the Project resulting from the      
acts or omissions of Tenant or Tenant's Agents at the Premises or Project       
during the period of use or occupancy of the Premises by Tenant or              
Tenant's Agents.  For purposes of this Paragraph 9(b)(9), any acts or           
omissions of Tenant or Tenant's Agents (whether or not they are negligent,      
intentional, willful or unlawful) shall be strictly attributable to             
Tenant.  Tenant's obligations under this Paragraph 9(b)(9) shall survive        
the expiration or earlier termination of this Lease.                            

 In no event shall Landlord be responsible to Tenant for the
presence of Hazardous Materials in, on or about the Premises or the             
Project to the extent caused or contributed to by any third party.              

Tenant shall have no liability for any and all claims,    
judgments, damages, penalties, fines, liabilities, losses (including,           
without limitation, diminution in value of the Premises, the Building, the      
Project, or any portion of any of the foregoing, damages for the loss of        
or restriction on the use of rentable or usable space), suits,                  
administrative proceedings and costs (including, but not limited to,            
attorneys' and consultant fees and court costs) (i) arising at any time         
prior to the term of this Lease in connection with or related to, directly      
or indirectly, the use, presence, transportation, storage, disposal,            
migration, removal, spill, release or discharge of Hazardous Materials on,      
in or under the Premises, the Building, the Project or in any Common Areas      
or parking lots (to the extent such areas are not considered part of the        
Premises) or (ii) arising during the term of this Lease in connection with      
or related to, directly or indirectly, the use, presence, transportation,       
storage, disposal, migration, removal, spill, release or discharge of           
Hazardous Materials on, in or under the Premises, the Building, the             
Project or in any Common Areas or parking lots (to the extent such areas        
are not considered part of the Premises) as a result (directly or               
indirectly) of the intentional or negligent acts or omissions of Landlord       
or any other tenants at the Project; provided, however, that the foregoing      
does not relieve Tenant of (or diminish) Tenant's obligation to pay             
Tenant's proportionate share(s) of all costs and expenses includable in         
Operating Expenses pursuant to Paragraph 3(c)(17).                              

 (10)  Within ninety (90) days following the end of Tenant's
fiscal year, Tenant shall provide Landlord with financial statements            
prepared in accordance with generally accepted accounting principles            
consistently applied and certified as true and correct by Tenant's              
independent certified public accountant setting forth Tenant's performance      
for the applicable fiscal year. As of the execution of this Lease,              
Tenant's fiscal year ends December 31.  Tenant shall provide Landlord with      
prompt written notice of any change in Tenant's fiscal year. If at any          
time it reasonably appears to Landlord that Tenant is not maintaining           
sufficient insurance or is not otherwise financially capable of fulfilling      
its obligations under this Paragraph 9(b), whether or not such obligations      
have accrued, become liquidated, conditional or contingent, Tenant shall        
procure and thereafter maintain in full force and effect such insurance or      
other form of financial assurance, with or from companies or persons and        
in forms reasonably acceptable to Landlord, as Landlord may from time to        
time request.                                                                   

     (11)  Upon any Release (as defined above in Paragraph 9(b)(9)),
Tenant shall, subject to Paragraph 9(b)(8), promptly notify Landlord of         
the Release and shall, at its sole expense and immediately after demand by      
Landlord, commence to perform and thereafter diligently prosecute to            
completion such Remedial Work as is necessary to restore the Premises,          
Project or any other property affected by the Release to the condition          
existing prior to the use of any Hazardous Materials. All such Remedial         
Work shall be performed: (a) in conformance with the requirements of all        
applicable Environmental Laws; (b) by one or more contractors, approved in      
advance in writing by Landlord; and (c) under the supervision of a              
consulting engineer approved in advance in writing by Landlord. All costs       
and expenses of such Remedial Work shall be paid by Tenant including,           
without limita-tion, the charges of such contractor(s) and/or the               
consulting engineer and Landlord's reasonable attorneys' fees and costs         
incurred in connection with the monitoring or review of such Remedial           
Work. In the event Tenant shall fail to timely commence, or cause to be         
commenced, or fail to diligently prosecute to completion, such Remedial         
Work, Landlord may, but shall not be required to, cause such Remedial Work      
to be performed and all costs and expenses thereof, or incurred in              
connection therewith, shall become immediately due and payable by Tenant.       
Tenant's obligations under this Paragraph 9(b)(11) shall survive the            
expiration or sooner termination of this Lease.                                 

    (12)  "Hazardous Materials" shall include, without limitation,
(i) those substances included within the definitions of "hazardous              
substances," "hazardous materials," "toxic substances" or "solid waste"         
under all present and future federal, state and local laws (whether under       
common law, statute, rule, regulation or otherwise) relating to the             
protection of human health or the environment, including, without               
limitation, California Senate Bill 245 (Statutes of 1987, Chapter 1302),        
the Safe Drinking Water and Toxic Enforcement Act of 1986 (commonly known       
as Proposition 65) and the Comprehensive Environmental Response,                
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601      
ET SEQ., the Resource Conservation and Recovery Act of 1976, 42 U.S.C.          
Section 6901 ET SEQ., and the Hazardous Materials Transportation Act, 49        
U.S.C. Sections 1801, ET SEQ., all as heretofore and hereafter amended, or      
in any regulations promulgated pursuant to said laws; (ii) those                
substances defined as "hazardous wastes" in Section 25117 of the                
California Health & Safety Code or as "hazardous substances" in Section         
25316 of the California Health & Safety Code, or in any regulations             
promulgated pursuant to said laws; (iii) those substances listed in the         
United States Department of Transportation Table (49 CFR 172.101 and            
amendments thereto) or designated by the Environmental Protection Agency        
(or any successor agency) as hazardous substances (SEE, E.G., 40 CFR Part       
302 and amendments thereto); (iv) such other substances, materials and          
wastes which are or become regulated under applicable local, state or           
federal law or by the United States government or which are or become           
classified as hazardous or toxic under federal, state or local laws or          
regulations, including, without limitation, California Health & Safety          
Code, Division 20, and Title 26 of the California Code of Regulations; and      
(v) any material, waste or substance which contains petroleum, asbestos or      
polychlorinated biphenyls, is designated as a "hazardous substance"             
pursuant to Section 311 of the Clean Water Act of 1977, 33 U.S.C. Sections      
1251, ET SEQ. (33 U.S.C. ss. 1321) or listed pursuant to Section 307 of         
the Clean Water Act of 1977 (33 U.S.C. ss. 1317) or contains any                
flammable, explosive or radioactive material.                                   

 (13)  "Environmental Laws" shall mean any federal, state or
local law, statute, ordinance, or regulation now in effect or hereafter         
enacted pertaining to health, industrial hygiene, or the environmental          
conditions on, under or about the Premises or any part of the Project,          
including without limitation, the Comprehensive Environmental Response,         
Compensation, and Liability Act of 1980 ("CERCLA") as amended, 42 U.S.C.        
section 9601 ET SEQ, and the Resource Conservation and Recovery Act of          
1976 ("RCRA"), 42 U.S.C. sections 6901 ET SEQ.                                  

     (14)  In addition to Tenant's obligations pursuant to Paragraph
27(b) of this Lease, Tenant shall, on the expiration or sooner termination      
of this Lease, surrender the Premises to Landlord free of Hazardous             
Materials used, generated, manufactured, produced, stored, released,            
discharged or disposed on, in or under the Premises, or transported to or       
from the Premises, resulting from the acts or omissions of Tenant or            
Tenant's Agents at the Premises or Project during the period of use or          
occupancy of the Premises by Tenant or Tenant's Agents.  If Tenant fails        
to so surrender the Premises and the Project, the provisions of Paragraph       
9(b)(9) shall apply.  Landlord shall have the right, but not the                
obligation, to appoint a consultant, at Tenant's expense, to conduct an         
investigation to determine whether any Hazardous Materials are located in       
or about the Premises or the Project, and to determine the corrective           
measures required to remove such Hazardous Materials. Tenant, at its            
expense, shall comply with all recommendations of the consultant.  A            
failure by Landlord to appoint such a consultant shall in no way relieve        
Tenant of any of Tenant's obligations set forth in this Lease relating to       
Hazardous Materials, nor constitute a waiver of Landlord's rights under         
this Lease. Tenant's obligations under this Paragraph 9(b)(14) shall            
survive the expiration or earlier termination of this Lease.                    

(15)  Except as otherwise provided in Paragraphs 9(b)(4)  
(concerning the implementation of consultant recommendations) and 9(b)(11)      
(concerning the monitoring and review of Remedial Work), all costs              
incurred by Landlord in retaining a consultant for any purpose contained        
in this Paragraph 9(b) shall be an Operating Expense under Paragraph 3 of       
this Lease unless Landlord retains a consultant pursuant to this Paragraph      
9(b) and such consultant reasonably determines after appropriate review of      
information and/or inspection that Tenant is breaching its obligations          
under this Lease to comply with this Paragraph 9(b), in which event to the      
extent that the costs and expenses incurred by Landlord in connection with      
any such review, inspection, and/or implementation of recommendations           
pursuant to this Paragraph 9(b) relate to the Premises or to Tenant's           
breach, such costs and expenses shall become due and payable by Tenant as       
Additional Rent, upon presentation by Landlord of an invoice therefor.          

 (16)  Upon any violation of any of the foregoing covenants,
Landlord shall be entitled to exercise all remedies available to a              
landlord against a defaulting tenant, including but not limited to those        
set forth in Paragraph 25(b) of this Lease.  Without limiting the               
generality of the foregoing, Tenant expressly agrees that upon any such         
violation Landlord may, at its option (i) immediately terminate this            
Lease, or (ii) continue this Lease in effect until compliance by Tenant         
with its clean-up and removal covenant (notwithstanding the expiration of       
the Term).  No action by Landlord hereunder shall impair the obligations        
of Tenant pursuant to this Paragraph 9(b).                                      

(c)  ADA.  Tenant acknowledges that the Americans with Disabilities 
Act of 1990 (as amended and as supplemented by further laws from time to        
time, the "ADA") imposes certain requirements upon the owners, lessees and      
operators of commercial facilities and places of public accommodation,          
including, without limitation, prohibitions on discrimination against any       
individual on the basis of disability.  Accordingly, but without limiting       
the generality of and in addition to all other requirements under this          
Lease, Tenant agrees to take all proper and necessary action to cause the       
Premises to be maintained, used and occupied in compliance with the ADA         
and, further, to otherwise assume all responsibility to ensure the              
Premises' continued compliance with all provisions of the ADA throughout        
the Term.                                                                       

UTILITIES AND SERVICES  

PARAGRAPH 10                                                                    

(a)  PAYMENT BY TENANT.  Tenant shall be responsible for and shall  
pay promptly all charges for gas, electricity, sewer, heat, light, power,       
telephone, refuse pickup (to be performed on a regularly scheduled basis        
so that accumulated refuse does not exceed the capacity of Tenant's refuse      
bins), janitorial service and all other utilities, materials and services       
furnished directly to or used by Tenant in, on or about the Premises,           
together with all taxes thereon.  Tenant shall contract directly with the       
providing companies for such utilities and services.                            

(b)  NO ABATEMENT OF RENT.  Landlord shall not be liable for, and   
Tenant shall not be entitled to, any abatement or reduction of rent by          
reason of any failure or interruption of any utility or other service           
furnished to the Premises or the Project.  No such failure, stoppage, or        
interruption of any such utility or service shall constitute an eviction        
of Tenant or relieve Tenant of the obligation to perform any covenant or        
agreement of this Lease to be performed by Tenant.  In the event of any         
such failure, stoppage or interruption of the utilities or services to be       
supplied by Landlord, Landlord shall use good faith efforts to have             
service promptly resumed.  Where the cause of any such failure, stoppage        
or interruption of such utilities or services is within the control of a        
public utility or other public or quasi-public entity outside Landlord's        
control, notification to such utility or entity of such failure, stoppage       
or interruption and request to remedy the same shall constitute "good           
faith efforts" by Landlord to have service promptly resumed.                    

   RULES AND REGULATIONS

PARAGRAPH 11                                                                    

Tenant agrees to abide by all rules and regulations for use of the  
Premises, the Building, the Phase and the Project imposed by Landlord, as       
the same may be revised from time to time, including, without limitation,       
the following:  (a) Tenant shall comply with all of the requirements of         
Landlord's emergency response plan, as the same may be amended from time        
to time; and (b) Tenant shall not place any furniture, furnishings,             
fixtures or equipment in the Premises in a manner so as to obstruct the         
windows of the Premises to cause the Building, in Landlord's good faith         
determination, to appear unsightly from the exterior.  Such rules and           
regulations are and shall be imposed for the cleanliness, good appearance,      
proper maintenance, good order and reasonable use of the Premises, the          
Building, the Phase and the Project and as may be necessary for the             
enjoyment of the Building and the Project by all tenants and their              
clients, customers, and employees.  Landlord shall not be liable for the        
failure of any tenant or of the agents or employees of any tenant to            
conform to such rules and regulations.                                          

  TAXES ON TENANT'S PROPERTY

PARAGRAPH 12                                                                    

Tenant shall be liable for, and shall pay, at least ten (10) days   
before delinquency, all taxes, levies and assessments levied against any        
personal property or trade fixtures placed by Tenant in or about the            
Premises or against the cost or value of any leasehold improvements made        
in or to the Premises by or for Tenant regardless of whether title to such      
improvements shall be in Tenant or Landlord.  If any such tax, levy or          
assessment on Tenant's personal property, trade fixtures or leasehold           
improvements is levied against Landlord or Landlord's property, or if the       
assessed value of the Building or the Project is increased by the               
inclusion therein of a value placed upon such personal property, trade          
fixtures or leasehold improvements of Tenant and if Landlord pays such          
taxes, levies or assessment based upon such increased assessment (which         
Landlord shall have the right to do regardless of the validity thereof),        
Tenant shall upon demand repay to Landlord the amount of such taxes,            
levies or assessments so levied against Landlord, or the proportion of any      
taxes, levies or assessments resulting from such increase in assessment.        
Tenant shall also be liable for and shall upon demand repay to Landlord         
the amount of any rental, excise, sales, transaction privilege or other         
tax or levy, however denominated, imposed upon or measured by the rent          
reserved hereunder or on Landlord's business of leasing the Premises,           
excepting only net income taxes, franchise taxes and estate, inheritance        
or gift taxes.                                                                  

FIRE OR CASUALTY        

PARAGRAPH 13                                                                    

(a)  OBLIGATION TO RESTORE.  Except as otherwise provided below, in 
the event the Premises or access thereto is wholly or partially destroyed       
by fire or other casualty covered by the form of fire and extended              
coverage insurance maintained by Landlord, Landlord shall rebuild, repair       
or restore the Premises and access thereto to substantially the same            
condition as when the same were furnished to Tenant, excluding any              
improvements installed by Tenant, and this Lease shall continue in full         
force and effect, except that rent shall abate during the period which,         
and to the extent to which, any portion of the Premises is untenantable         
and is not used by Tenant.  Notwithstanding the foregoing, in no event          
shall Landlord be required to expend more than the amount of insurance          
proceeds received by Landlord in respect of any such casualty in                
connection with Landlord's restoration of the Premises.                         

(b)  ELECTION NOT TO RESTORE.  In the event that the Building is    
damaged or destroyed to the extent of more than fifty percent (50%) of its      
replacement cost or to the extent of more than twenty-five percent (25%)        
of its replacement cost if the damage or destruction occurs during the          
last year of the Term or to any extent by a casualty not so covered, or if      
the buildings at the Project shall be damaged to the extent of fifty            
percent (50%) or more of the replacement value or to any extent by a            
casualty not so covered, and regardless of whether or not the Premises be       
damaged, Landlord may elect by written notice to Tenant given within            
thirty (30) days after the occurrence of the casualty to terminate this         
Lease in lieu of so restoring the Premises, in which event this Lease           
shall terminate as of the date specified in Landlord's notice, which date       
shall be no later than sixty (60) days following the date of Landlord's         
notice.                                                                         

(c)  RESTORATION.  Upon the occurrence of a casualty as to which    
Landlord does not elect to terminate this Lease, Landlord shall, within         
thirty (30) days after the date of such casualty, or as soon thereafter as      
reasonably possible, notify Tenant in writing of the time estimated by          
Landlord to repair or restore the damage caused by such casualty.  If           
Landlord's estimated time to complete such restoration is more than twelve      
(12) months from the date of the occurrence and such damage or destruction      
materially adversely interferes with Tenant's use of the Premises, Tenant       
may elect to terminate this Lease by written notice to Landlord given           
within fifteen (15) days after receipt of Landlord's estimate.  If Tenant       
has the right to terminate this Lease and timely and properly exercises         
such right, this Lease shall terminate on the date of Tenant's notice to        
Landlord.  If Tenant is not entitled to terminate this Lease or if Tenant       
is so entitled but fails to do so in time and in the manner herein              
specified, Landlord shall repair or restore the Premises as promptly as         
practicable and this Lease shall continue in effect.  Landlord shall in no      
event be obligated to make any repairs or replacement of any items other        
than those items installed by and at the expense of Landlord.  If the           
Premises are rendered totally untenantable, rent shall abate during the         
period that the Premises remain untenantable and Tenant does not use the        
Premises.  However, in no event shall Tenant be entitled to any                 
compensation or damages for loss of the use of the whole or any part of         
the Premises, for damage to Tenant's personal property in or improvements       
to the Premises or for any inconvenience or annoyance occasioned by any         
such destruction, rebuilding or restoration of the Premises or the              
Building or access thereto.  Tenant waives the provisions of California         
Civil Code Sections 1932(2) and 1933(4) and any present or future laws or       
case decisions to the same effect.                                              

(d)  Landlord, in repairing the Building and the Premises, shall    
repair any damage to the Building itself, including any damage to the           
shell of the Premises as existing as of the date hereof, and Tenant shall       
pay the cost of repairing or replacing the Tenant Improvements in the           
Premises equal to the value of the Tenant Improvements existing                 
immediately prior to the occurrence of any damage, and with the same kind       
and quality of Tenant Improvements or such other Tenant Improvements for        
which Tenant obtains Landlord's prior written approval, and Tenant shall        
repair or replace all of Tenant's trade fixtures, furnishings, equipment        
and other personal property.  Landlord shall not be required to repair any      
injury or damage to the personal property of Tenant, or to make any             
repairs to or replacement of any alterations, additions, improvements or        
fixtures installed on the Premises by or for Tenant.                            

EMINENT DOMAIN            

PARAGRAPH 14                                                                    

(a)  TERMINATION OF LEASE.  In case the whole of the Premises, or   
such part thereof as shall substantially interfere with Tenant's use and        
occupancy thereof, shall be taken by any lawful power or authority by           
exercise of the right of eminent domain, or shall be sold to prevent such       
taking, either Tenant or Landlord may terminate this Lease effective as of      
the date possession is required to be surrendered to such authority.  If        
at least fifty percent (50%) of the leasable area of Tenant's Phase, or         
twenty-five percent (25%) of the leasable area of the Project, is taken by      
any lawful power or authority by exercise of the right of eminent domain,       
or shall be sold to prevent such taking, Landlord may terminate this Lease      
effective as of the date possession is required to be surrendered to such       
authority.  Landlord may, without any obligation to Tenant, agree to sell       
or convey to the taking authority the Premises, the Building, Tenant's          
Phase, the Project or any portion thereof sought by the taking authority,       
free from this Lease and the right of Tenant hereunder, without first           
requiring that any action or proceeding be instituted or, if instituted,        
pursued to a judgment.                                                          

(b)  PARTIAL TAKING.  In the event the amount of property or the    
type of estate taken shall not substantially interfere with Tenant's use        
of the Premises, and neither Landlord nor Tenant shall have terminated          
this Lease pursuant to Paragraph 14(a) above, then Landlord shall promptly      
restore the Premises to substantially their condition prior to such             
partial taking and this Lease shall continue in full force and effect           
except that a proportionate allowance shall be made to Tenant for the rent      
corresponding to the time during which, and to the part of the Premises of      
which, Tenant shall be deprived on account of such taking and restoration.      

(c)  AWARDS.  Except as expressly provided herein, Tenant shall not 
because of any taking of all or any portion of the Premises assert any          
claim against Landlord or the taking authority for any compensation             
because of such taking, and Landlord shall be entitled to receive the           
entire amount of any award therefor without deduction for any estate or         
interest of Tenant.  Nothing contained in this subparagraph, however,           
shall be deemed to give Landlord any interest in, or prevent Tenant from        
seeking any award against the taking authority independent of Landlord,         
and without in any manner interfering with or reducing any claim of             
Landlord against the taking authority for, the taking of personal property      
and fixtures belonging to Tenant or for relocation or business                  
interruption expenses recoverable from the taking authority.                    

ASSIGNMENT AND SUBLETTING   

PARAGRAPH 15                                                                    

(a)  LANDLORD'S CONSENT.  Tenant shall not voluntarily or           
involuntarily assign, sublet, mortgage or otherwise transfer or encumber        
all or any portion of its interest in this Lease or in the Premises or          
permit the use of the Premises by any party other than Tenant without           
obtaining the prior written consent of Landlord, which consent shall not        
be unreasonably withheld.  Any such attempted assignment, subletting,           
mortgaging, transfer or other encumbering without such consent shall be         
null and void and of no effect.  Without limiting the generality of the         
foregoing, it shall be reasonable for Landlord to deny any proposed             
assignment or sublease if (1) the use to be made of the Premises by the         
proposed assignee or subtenant is not generally consistent with the             
character and nature of all other tenancies in the Project, or (2) the          
proposed assignee or subtenant uses Hazardous Materials, or (3) the             
character, reputation or financial responsibility of the proposed assignee      
or subtenant is not satisfactory to Landlord or in any event is not at          
least equal to that which was possessed by Tenant as of the date of             
execution of this Lease, or (4) the proposed assignee or subtenant is an        
existing tenant in the Project or is negotiating with Landlord or               
Landlord's representative, or the owner (or the owner's representative) of      
any other Phase of the Project, to lease space at the Project, or (5)           
Tenant is in default hereunder, or a condition exists which, with the           
passage of time or the giving of notice or both, would constitute such a        
default.                                                                        

(b)  NO RELIEF.  No permitted assignment, subletting, mortgaging or 
other encumbering of Tenant's interest in this Lease shall relieve Tenant       
of its obligation to pay the rent and to perform all of the other               
obligations to be performed by Tenant hereunder.  The acceptance of rent        
by Landlord from any person other than Tenant shall not be deemed to be a       
waiver by Landlord of any provision of this Lease or to be a consent to         
any subletting, assignment, mortgaging or other encumbering of the              
Premises.  Consent to an assignment, sublease, mortgage or other                
encumbrance shall not be deemed to constitute consent to any subsequent         
attempted assignment, sublease, mortgage or other encumbrance.                  

(c)  NOTICE TO LANDLORD.  If Tenant desires at any time to assign   
this Lease or to sublet the Premises or any portion thereof, it shall           
first notify Landlord of its desire to do so and shall submit in writing        
to Landlord (1) the name of the proposed subtenant or assignee, (2) the         
nature of the proposed subtenant's or assignee's business to be carried on      
in the Premises, (3) copies of all applicable documentation in connection       
with the proposed sublease or assignment, and (4) such financial and other      
information as Landlord may reasonably request concerning the proposed          
subtenant or assignee.                                                          

(d)  CONDITION TO CONSENT.  As a condition to Landlord's consent to 
such assignment or subletting, if the net aggregate rental paid or given        
by any sublessee or assignee exceeds, on a square foot basis, the amount        
per square foot payable by Tenant to Landlord for the Premises, then            
Tenant shall pay to Landlord as additional rental hereunder, monthly as         
received, fifty percent (50%) of such excess rental.  Net aggregate rental      
as used herein shall mean gross rental and additional consideration of any      
kind or type received by Tenant with respect to the subleased or assigned       
premises, less the following actual and documented out-of-pocket costs          
incurred by Tenant (amortized, in the case of a sublease, over the term of      
said sublease, on a straight line basis):  Tenant's actual costs of any         
commercially reasonable commission paid by Tenant to a broker independent       
of Tenant in connection with such sublease or assignment, reasonable legal      
fees in processing such assignment or subletting, reasonable advertising        
costs and commercially reasonable costs to remodel or renovate the area         
subject to such subletting or assignment. "Sublet" and "sublease" shall         
include a sublease as to which Tenant is sublessor and any sub-sublease or      
other sub-subtenancy, irrespective of the number of tenancies and tenancy       
levels between the ultimate occupant and Landlord, as to which Tenant           
receives any consideration.  Tenant shall require on any sublease which it      
executes that Tenant receive all profit from all sub-subtenancies,              
irrespective of the number of levels thereof.  Any rent or other                
consideration which is to be passed through to Landlord by Tenant pursuant      
to this Paragraph 15(d) shall be paid to Landlord promptly upon receipt by      
Tenant and shall be paid in cash, irrespective of the form in which             
received by Tenant from any subtenant or assignee.  In the event that any       
rent or other consideration received by Tenant from a subtenant or              
assignee is in a form other than cash, Tenant shall pay to Landlord in          
cash the fair value of such consideration.                                      

(e)  LANDLORD'S ELECTION.  At any time within thirty (30) days after
Landlord's receipt of the information specified in Paragraph 15(c) above,       
Landlord may by written notice to Tenant elect to (1) consent to the            
proposed sublease or assignment; (2) sublease the Premises or the portion       
thereof so proposed to be subleased by Tenant or take an assignment of          
Tenant's leasehold estate hereunder or such part thereof as shall be            
specified in such notice to Landlord, in each case upon the same terms          
stated in this Lease, and concurrently enter into the proposed sublease or      
assignment to the proposed subtenant or assignee on the same terms as           
those offered by Tenant, as the case may be; or (3)  reasonably withhold        
its consent to the proposed sublease or assignment.                             

(f)  NO MERGER.  The voluntary or other surrender of this Lease by  
Tenant or a mutual cancellation hereof shall not work a merger but shall,       
at the option of Landlord, either terminate all or any existing subleases       
or subtenancies or operate as an assignment to Landlord of such subleases       
or subtenancies.  If Tenant is a corporation which under the then current       
guidelines published by the Commissioner of Corporations of the State of        
California, is not deemed to be a public corporation or is an                   
unincorporated association or partnership, then the transfer, assignment        
or hypothecation of any stock or interest in such corporation, association      
or partnership in the aggregate in excess of twenty-five percent (25%)          
shall be deemed to be an assignment within the meaning and provisions of        
this Paragraph 15.                                                              

(g)  ASSIGNMENT OF RENT.  Tenant immediately and irrevocably assigns
to Landlord, as security for Tenant's obligations under this Lease, all         
rent from any subletting of all or a part of the Premises as permitted by       
this Lease, and Landlord, as assignee and attorney-in-fact for Tenant, or       
a receiver for Tenant appointed on Landlord's application, may collect          
such rent and apply it toward Tenant's obligation under this Lease; except      
that, until the occurrence of an act of default by Tenant, Tenant shall         
have the right to collect such rent.                                            

(h)  LANDLORD'S COSTS.  Tenant agrees to reimburse Landlord for     
Landlord's costs and attorneys' fees incurred in conjunction with the           
processing and documentation of any requested assignment, subletting,           
transfer, change of ownership or hypothecation of this Lease or Tenant's        
interest in and to the Premises which is submitted for approval to              
Landlord, whether or not Landlord approves the same.                            

  ACCESS

PARAGRAPH 16                                                                    

Landlord reserves and shall at all times have the right to enter the
Premises upon twenty-four (24) hours notice (except in case of emergency,       
when no notice shall be required) to inspect the same, to supply any            
service to be provided by Landlord to Tenant hereunder, to submit the           
Premises to prospective purchasers or tenants, to post notices of               
nonresponsibility, to use and maintain pipes and conduits in and through        
the Premises and to alter, improve or repair the Premises or any other          
portion of the Building, all without being deemed guilty of an eviction of      
Tenant and without abatement of rent provided that Landlord shall not           
unreasonably interfere with Tenant's operations and shall comply with all       
of Tenant's safety procedures.  Landlord may, for the purpose of altering,      
improving or repairing the Premises or any other portion of the Building,       
erect scaffolding and other necessary structures where reasonably required      
by the character of the work to be performed.  Landlord shall use               
commercially reasonable efforts where practicable to conduct such entries       
and activities in a workmanlike manner so as to reasonably minimize             
interference with Tenant's ability to conduct its business at the Premises      
and Tenant hereby waives any claim for damages for any injury or                
inconvenience to or interference with Tenant's business, any loss of            
occupancy or quiet enjoyment of the Premises and any other loss occasioned      
thereby or arising therefrom.  Landlord shall have the right at all times       
to have and retain a key with which to unlock all of the doors in, upon         
and about the Premises, excluding Tenant's vaults and safes, if any.            
Landlord shall have the right to use any and all means which Landlord may       
deem proper to open such doors in an emergency in order to obtain entry to      
the Premises and any such entry shall not under any circumstances be            
construed or deemed to be a forcible or unlawful entry into, or a detainer      
of, the Premises or an eviction of Tenant from the Premises or any portion      
thereof.  No provision of this Paragraph 16 shall be construed as               
obligating Landlord to perform any repairs, alterations or decoration not       
otherwise expressly required of Landlord under this Lease.                      

  SUBORDINATION; ATTORNMENT; ESTOPPEL CERTIFICATES

PARAGRAPH 17                                                                    

(a)  SUBORDINATION; ATTORNMENT; NONDISTURBANCE; SUPERIORITY.        

(1)   SUBORDINATION.  Subject to the last sentence of this
Paragraph 17(a)(1) and to Paragraph 17(a)(2), this Lease is junior,             
subject and subordinate to all declarations of restrictions and all             
mortgages, deeds of trust and other security instruments of any kind now        
covering the Premises, the Project, or any portion of thereof.  Landlord        
reserves the right to place liens or encumbrances on the Premises, the          
Project, or any part of or interest in any of the foregoing, and, subject       
to the last sentence of this Paragraph 17(a), this Lease shall be subject       
and subordinate to any such liens or encumbrances now or hereafter imposed      
by Landlord without the necessity of the execution and delivery of any          
further instruments on the part of Tenant to effectuate such                    
subordination.  Notwithstanding the foregoing, Tenant covenants and agrees      
to execute and deliver upon demand such further instruments evidencing any      
such subordination of this Lease as may be requested by Landlord.  In the       
event Tenant fails to so execute any such further instrument within ten         
(10) business days after demand therefor, Landlord may execute such             
instrument on behalf of Tenant as Tenant's attorney-in-fact (and Tenant         
hereby makes, constitutes and irrevocably appoints Landlord as Tenant's         
attorney-in-fact and in Tenant's name, place and stead to execute such          
instruments) and such failure shall constitute a material breach of this        
Lease.  In the event of the foreclosure of any such lien or encumbrance,        
Tenant shall attorn to the then owner who owns or acquires title to the         
Premises or the Project and will recognize such owner as Landlord under         
this Lease.  Tenant hereby waives any right to terminate this Lease             
because of any such foreclosure.  Notwithstanding the foregoing, Tenant         
agrees that if any holder of a mortgage, deed of trust or other security        
instrument covering the Premises or the Project desires this Lease to be        
superior to the lien of such mortgage, deed of trust or security                
instrument, upon written notice from Landlord or such holder to Tenant          
indicating such desire, this Lease shall automatically become superior to       
such mortgage, deed of trust or security instrument and Tenant agrees to        
execute, promptly upon Landlord's or such holder's demand therefor, such        
instruments as Landlord or such holder shall reasonably require confirming      
the priority of this Lease, but Tenant's failure to execute such                
instrument shall not affect such holder's election to cause this Lease to       
be superior to such holder's lien.                                              

 (2)   NONDISTURBANCE.  Notwithstanding any provision of the
Lease to the contrary, provided that: (i) Tenant has executed and               
delivered a subordination, nondisturbance and attornment agreement              
substantially in the form of EXHIBIT F hereto, with such changes thereto        
as any mortgagee, trustee, beneficiary or holder of other security              
interest ("Mortgagee") may reasonably require ("Nondisturbance Agreement")      
and complies with the provisions thereof, and (ii) Tenant is not in             
default under this Lease, no foreclosure, sale pursuant to power of sale        
or conveyance by deed in lieu of foreclosure shall affect Tenant's rights       
under this Lease, except to the extent provided by such Nondisturbance          
Agreement.  If Tenant fails to execute and deliver any Nondisturbance           
Agreement within fifteen (15) days of a request therefor from Landlord,         
Tenant hereby constitutes Landlord as Tenant's attorney-in-fact to execute      
and deliver such instrument.  Landlord's inability to obtain the signature      
of any Mortgagee on any such Nondisturbance Agreement shall not constitute      
a default by Landlord under this Lease, but so long as default by Tenant        
under this Lease is not the reason for Landlord's inability to obtain such      
signature, any such lessor or Mortgagee shall be deemed to have elected         
that this Lease be superior to the lease, mortgage or deed of trust in          
question, and Tenant shall, at the request of such lessor, mortgagee or         
beneficiary (or purchaser at any sale pursuant to the mortgage or deed of       
trust), attorn to any such party or enter into a new lease with such party      
(as Landlord) for the balance of the Term then remaining hereunder upon         
the same terms and conditions as those herein.                                  

(b)  ESTOPPEL CERTIFICATES.  Tenant shall at any time and from time 
to time, upon not less than three (3) days' prior notice from Landlord,         
execute, acknowledge and deliver to Landlord a statement in writing             
certifying that this Lease is unmodified and in full force and effect (or       
if there have been modifications, that this Lease is in full force and          
effect as modified and describing the same), the dates through which the        
Basic Annual Rent, Additional Rent and all other charges have been paid in      
advance, if any, and stating whether or not, to the best knowledge of           
Tenant, Landlord is in default in the performance of any covenant,              
agreement or condition contained in this Lease and, if so, specifying each      
such default.  Any such statement delivered pursuant to this Paragraph          
17(b) may be relied upon by any prospective purchaser or encumbrancer (and      
all successors thereof) of any interest of Landlord in or to Tenant's           
Phase or the Project and Tenant shall be liable for all loss, cost or           
expense resulting from the failure of any sale or funding of any loan           
caused by any material misstatement contained in any such statement or          
other estoppel certificate supplied to Landlord by Tenant.  Tenant's            
failure to timely deliver any such statement shall be conclusive upon           
Tenant that (1) this Lease is in full force and effect, without                 
modification except as may be represented by Landlord, (2) there are no         
uncured defaults in Landlord's performance, and (3) not more than one           
month's Basic Annual Rent has been paid in advance.                             

SALE BY LANDLORD  

PARAGRAPH 18                                                                    

In the event of a sale or conveyance by Landlord of the Premises,   
such transfer shall operate to release Landlord from any and all liability      
under this Lease.  Subject to the provisions of Paragraph 17 above,             
Tenant's right to quiet possession of the Premises shall not, however, be       
disturbed on account of such transfer, so long as Tenant shall pay all          
rent and observe and perform all provisions of this Lease to be observed        
and performed by Tenant, unless this Lease is terminated pursuant to            
specific provisions relating to termination contained in this Lease.  If        
any security deposit has been made by Tenant, Landlord may transfer the         
then balance of such deposit to Landlord's transferee in connection with        
the sale or conveyance of the Premises, and thereupon Landlord shall be         
discharged from any further liability in connection with such deposit.          

  NON-LIABILITY AND INDEMNIFICATION OF LANDLORD; INSURANCE

PARAGRAPH 19                                                                    

(a)  LANDLORD'S NON-LIABILITY.  Except to the extent caused solely  
by the gross active negligence or intentional misconduct of Landlord,           
Landlord shall not be liable for any injury or damage which may be              
sustained by any person or any goods, wares, merchandise or other property      
of Tenant, of Tenant's employees, invitees or customers or of any other         
person in or about the Premises resulting from any cause whatsoever             
(including, without limitation, fire, steam, electricity, gas, water, rain      
or dampness which may occur, leak or flow from or into any part of the          
Premises or any other place, any breakage, leakage, obstruction or other        
defect in the pipes, sprinklers, wires, appliances, plumbing, air               
conditioning or lighting fixtures of the Premises, theft, explosion or          
falling plaster).  In no event shall Landlord be liable for any damage          
arising from any act or neglect of any other tenant of the Project or any       
of their officers, employees, agents, representatives, customers, visitors      
or invitees, for any damage to Tenant's property entrusted to employees of      
Landlord or its agents, for any interference with light or other                
incorporeal hereditaments or for any damage arising from any latent defect      
in the Premises or the Project.                                                 

(b)  INDEMNIFICATION.  To the fullest extent permitted by then      
applicable law, Tenant shall protect, indemnify and hold Landlord harmless      
from, and defend Landlord against any and all claims, losses, costs,            
damages, expenses, or liabilities, including, without limitation,               
attorneys' fees and costs of defense, for any bodily injury or property         
damage to any person or property whatsoever caused in part or in whole by       
the act, neglect, fault or omission of Tenant or its assignees, subtenants      
or agents, of the respective servants, employees or invitees of any of the      
foregoing persons or of any other persons permitted in the Building or          
elsewhere in the Project by Tenant or any of such persons; excluding,           
however, such damage to the extent caused solely by the gross active            
negligence or intentional misconduct of Landlord.  This indemnity shall         
not require payment by Landlord as a condition precedent to recovery from       
Tenant.                                                                         

(c)  TENANT'S INSURANCE.  Tenant hereby agrees to maintain in full  
force and effect at all times during the Term and any other period of its       
occupancy or possession of the Premises, at its own expense, for the            
protection of Tenant and Landlord, as their interests may appear, policies      
of insurance which afford the following coverages: (1) Worker's                 
Compensation and Employer's Liability Insurance to the extent required by       
then applicable law, (2) Commercial General Liability Insurance (including      
protective liability coverage on operations of independent contractors          
engaged in construction, coverage of Tenant's indemnity obligations under       
this Lease and blanket contractual liability insurance) on an "occurrence"      
basis against claims for "bodily injury" liability, including, without          
limitation, bodily injury, death and property damage liability, with a          
limit of not less than Three Million Dollars ($3,000,000) in the event of       
"bodily injury" to any number of persons or of damages to property arising      
out of any single "occurrence," (3) insurance against loss or damage by         
fire and such other risks and hazards as are insurable under then               
applicable standard forms of "all risk" fire and extended coverage              
insurance policies to all of the Tenant Improvements and the personal           
property, furniture, furnishings and fixtures belonging to Tenant used or       
located in the Premises for not less than one hundred percent (100%) of         
the actual replacement value thereof (the proceeds of which insurance, so       
long as this Lease remains in effect, shall be used to repair or replace        
such Tenant Improvements, personal property, furnishings and fixtures in        
the Premises; provided, however, that upon any termination of this Lease        
pursuant to Paragraph 13 above, all such proceeds to the extent of one          
hundred percent (100%) of the actual replacement value of such Tenant           
Improvements shall be the property of Landlord), and (4) business               
interruption or loss of income insurance in an amount equal to the Basic        
Annual Rent for a period of at least twelve (12) months commencing with         
the date of loss (the proceeds of which insurance shall be paid to              
Landlord to the extent of any abatement of rent under the Lease, but only       
to the extent that Landlord does not otherwise receive net insurance            
proceeds for rental loss).                                                      

(d)  DEDUCTIBLES.  Tenant may, with the prior written consent of    
Landlord, elect to have reasonable deductibles in connection with the           
policies of insurance required to be maintained by Tenant under Paragraph       
19(c)(3) above.                                                                 

(e)  CERTIFICATES OF INSURANCE.  Tenant shall deliver to Landlord at
least thirty (30) days prior to the time such insurance is first required       
to be carried by Tenant, and thereafter at least thirty (30) days prior to      
expiration of each such policy, certificates of insurance from the carrier      
providing such insurance evidencing the above coverages with limits not         
less than those specified above.  Such certificates, with the exception of      
worker's compensation, shall designate Landlord, each of its partners,          
subsidiaries, affiliates, directors, agents and employees, as additional        
insureds and shall expressly provide that the interest of such persons          
therein shall not be affected by any breach by Tenant of any policy             
provision for which such certificates evidence coverage.  Further, each         
such certificate shall expressly provide that no less than thirty (30)          
days' prior written notice shall be given to Landlord in the event of           
cancellation of the coverages evidenced by such certificate unless such         
cancellation is caused by nonpayment of premiums, in which case Landlord        
shall be given not less than ten (10) days prior written notice.  The           
insurance which Tenant is required to maintain in force and effect under        
this Paragraph 19 shall be primary insurance as respects Landlord (and any      
other additional insureds designated by Landlord) and not excess over or        
contributory with any other available insurance.  Certificates of               
insurance evidencing the liability insurance coverage required under            
Paragraph 19(c)(2) above shall contain an endorsement providing, in             
substance, that such insurance as is afforded thereby for the benefit of        
Landlord (and any other additional insureds designated by Landlord) shall       
be primary and any insurance carried by Landlord (and any other such            
additional insureds) shall be excess and not contributory.                      

(f)  INCREASE IN COVERAGE.  Upon demand, Tenant shall provide       
Landlord, at Tenant's expense, with such increased amounts of existing          
insurance and such other coverages and insurance as Landlord may                
reasonably require.                                                             

(g)  NO CO-INSURANCE.  If on account of the failure of Tenant to    
comply with the provisions of this Paragraph 19, Landlord or any other          
person is adjudged a co-insurer by its insurance carrier, then any loss or      
damage which Landlord or such other person shall sustain by reason thereof      
shall be borne by Tenant and shall be immediately paid by Tenant upon           
receipt of a bill therefor and evidence of such loss.                           

(h)  INSURANCE LIMITS.  Landlord makes no representation that the   
limits of liability specified to be carried by Tenant under this Lease are      
adequate to protect Tenant against Tenant's undertaking under this Lease.       
In the event Tenant believes that any such required coverage is                 
insufficient, Tenant shall provide, at its own expense, such additional         
insurance as Tenant deems adequate.  In no event shall the limits of any        
coverage maintained by Tenant pursuant to this Paragraph 19 be considered       
as limiting Tenant's liability under this Lease.                                

(i)  CONSEQUENTIAL DAMAGES.  In no event shall Landlord be liable to
Tenant for any damage by reason of loss of profits, business interruption       
or other consequential damage.                                                  

(j)  GENERAL REQUIREMENTS.  All insurance required to be carried by 
Tenant hereunder shall be with companies reasonably acceptable to               
Landlord.  All certificates of insurance delivered by Tenant pursuant to        
this Paragraph shall contain liability limits not less than those set           
forth herein, shall list all additional insureds and shall specify all          
endorsements and special coverages required by this Paragraph.  Any             
insurance required to be maintained by Tenant may be maintained pursuant        
to so-called "blanket" policies of insurance so long as the Premises are        
specifically identified therein (by endorsement or otherwise) as included       
in the coverage provided and such policies otherwise comply with the            
provisions of this Lease.  Within ten (10) days after request by Landlord,      
Tenant shall deliver to Landlord copies of all polices (and renewals) to        
be maintained by Tenant hereunder.                                              

WAIVER OF SUBROGATION       

PARAGRAPH 20                                                                    

(a)  Without affecting any other rights or remedies hereunder, at   
law or in equity, Landlord and Tenant each hereby waives all rights of          
recovery against the other, any other tenant or occupant in the Building        
or the Project and all officers, employees, agents, representatives,            
customers and business visitors of such persons for loss of or damage to        
property at the Project arising from any cause insured against under any        
policy of all-risk insurance either required to be carried by such waiving      
party pursuant to the provisions of this Lease or actually carried by such      
waiving party.  The foregoing waiver shall be effective whether or not          
such waiving party shall actually obtain and maintain the "all risk"            
insurance required pursuant to this Lease.  Tenant shall, upon obtaining        
the policies of insurance which it is required to maintain under this           
Lease, give notice to its insurance carriers that the foregoing waiver of       
subrogation is contained in this Lease.                                         

(b)  In the event either Landlord or Tenant notifies the other that 
an insurer under any policy described in Paragraph 20(a) above has refused      
to consent to or permit the waiver of subrogation thereunder in any             
fashion or has conditioned the same upon the payment of an additional           
premium, then such waiver shall be of no force or effect with respect to        
loss or damage covered by such policy during the period commencing five         
(5) business days after such other party's receipt of such notice and           
continuing until such insurer reinstates such consent; provided, however,       
that if such other party elects to reimburse the notifying party for any        
required additional premium, the notifying party shall obtain such              
insurer's consent.                                                              

ATTORNEYS' FEES   

PARAGRAPH 21                                                                    

In the event any party to this Lease brings any suit or other       
proceeding with respect to the subject matter or enforcement of this Lease      
(including all addenda and exhibits hereto), the prevailing party (as           
determined by the court, agency or other authority before which such suit       
or proceeding is commenced) shall, in addition to such other relief as may      
be awarded, be entitled to recover attorneys' fees, expenses and costs of       
investigation as actually incurred (including, without limitation,              
attorneys' fees, expenses and costs of investigation incurred in appellate      
proceedings or in connection with the enforcement or collection of any          
judgment obtained in any suit or other proceeding with respect to the           
subject matter or enforcement of this Lease, costs incurred in                  
establishing any right to indemnification, or in any action or                  
participation, or in connection with, any case or proceeding under              
Chapters 7, 11 or 13 of the Bankruptcy Code, 11 United States Code Section      
101 ET SEQ., or any successor statutes).  The parties hereto expressly          
agree that (i) any attorneys' fees incurred in connection with the              
enforcement or collection of any judgment obtained in any suit or other         
proceeding with respect to the subject matter or enforcement of this Lease      
shall be recoverable as a separate item, (ii) the provisions of this            
Paragraph 21 shall survive the entry of any judgment with respect to the        
subject matter or enforcement of this Lease, and (iii) the provisions of        
this Paragraph 21 will not merge, or be deemed to have merged, into any         
such judgment.                                                                  

  WAIVER

PARAGRAPH 22                                                                    

No waiver by Landlord of any provision of this Lease or of any      
breach by Tenant hereunder shall be deemed to be a waiver of any other          
provision hereof or of any subsequent breach by Tenant of the same or any       
other provision.  Landlord's consent to or approval of any act by Tenant        
requiring Landlord's consent or approval shall not be deemed to render          
unnecessary the obtaining of Landlord's consent to or approval of any           
subsequent act of Tenant.  No act or thing done by Landlord or Landlord's       
agents during the Term, including, without limitation, Tenant's delivery        
of the keys to the Premises to any employee or agent of Landlord, shall         
operate as or be deemed to be a termination of this Lease, a surrender of       
the Premises or an acceptance of a surrender of the Premises unless             
expressly stated in a writing signed by Landlord.  The acceptance of any        
rent by Landlord following a breach of this Lease by Tenant shall not           
constitute a waiver by Landlord of such breach or any other breach unless       
such waiver is expressly stated in a writing signed by Landlord.  The           
acceptance of any payment from a debtor-in-possession, a trustee, a             
receiver or any other person acting on behalf of Tenant or Tenant's estate      
shall not constitute a waiver of or cure a default under Paragraphs 15 or       
24 hereof.                                                                      

NOTICES   

PARAGRAPH 23                                                                    

(a)  Any notice required by law to be given by Landlord to Tenant as
a condition to the filing of an action alleging an unlawful detainer of         
the Premises, including, without limitation, any three (3) days' notice         
under Section 1161(2) or (3) of the California Code of Civil Procedure,         
and any service of process made by Landlord in connection with any action       
arising out of or related to this Lease or the Premises shall be effective      
only if in writing and either sent by registered or certified mail, return      
receipt requested, or delivered personally to Tenant either (1) at the          
Premises, or (2) at any place where Tenant or any agent or employee of          
Tenant may be found.                                                            

(b)  Except as otherwise expressly provided in this Lease, any      
notice, demand, request or other communication not described in (a) above       
given or required to be given by Landlord hereunder shall be effective          
only if in writing and either sent by registered or certified mail, return      
receipt requested, or by recognized overnight courier or delivered              
personally to each of the following:                                            

Advanced Polymer Systems                    
123 Saginaw Drive                           
Redwood City, California 94063              

(c)  Except as otherwise expressly provided in this Lease, any      
notice, demand, request or other communication given or required to be          
given by Tenant hereunder shall be effective only if in writing and either      
sent by registered or certified mail, return receipt requested, or by           
recognized overnight courier or delivered personally to each of the             
following:                                                                      

(1)   METROPOLITAN LIFE INSURANCE COMPANY                 
101 Lincoln Centre Drive, Sixth Floor         
Foster City, California 94404                 
Attention:  Vice President                    

(2)   METROPOLITAN LIFE INSURANCE COMPANY                 
101 Lincoln Centre Drive, Sixth Floor         
Foster City, California 94404                 
Attention:  Associate General Counsel         

(3)   INSIGNIA COMMERCIAL GROUP, INC.                     
Three Lagoon Drive, Suite 100                 
Redwood City, California 94065                
Attention:  Property Manager, Seaport Centre  

(d)  Tenant and Landlord may designate new addresses for notice for 
the purposes of (b) or (c) above (however, in no event may any party have       
more than four (4) separate designations at any one time) by notice given       
to the other in accordance with the provisions of this Paragraph 23.            

(e)  Any notice hereunder shall be deemed effectively given upon its
delivery or the addressee's refusal to accept delivery as indicated by the      
person attempting such personal delivery, by the applicable return              
receipt, if sent by registered or certified mail, or by similar advice          
from the recognized courier company, as the case may be.                        

        INSOLVENCY OR BANKRUPTCY

PARAGRAPH 24                                                                    

(a)  PRIOR TO TERM.  If at any time prior to the date herein fixed  
as the commencement of the Term there shall be filed by or against Tenant       
in any court pursuant to any statute either of the United States or of any      
State a petition in bankruptcy or insolvency or for reorganization or for       
the appointment of a receiver or trustee or conservator of all or a             
portion of Tenant's property, or if Tenant makes an assignment for the          
benefit of creditors (collectively, an "Insolvency Event"), this Lease          
shall IPSO FACTO be canceled and terminated and in such event neither           
Tenant nor any person claiming through or under Tenant or by virtue of any      
statute or by an order of any court shall be entitled to possession of the      
Premises and Landlord, in addition to the other rights and remedies given       
by Paragraph 25(b) hereof or by virtue of any other provision in this           
Lease contained or by virtue of any statute or rule of law, may retain as       
damages any rent, security, deposit or moneys received by it from Tenant        
or others on behalf of Tenant.                                                  

(b)  NO ASSIGNMENT.  In no event shall this Lease be assigned or    
assignable by operation of law and in no event shall this Lease be an           
asset of Tenant in any receivership, bankruptcy, insolvency or                  
reorganization proceeding.                                                      

DEFAULT   

PARAGRAPH 25                                                                    

(a)  DEFAULT BY TENANT.  The occurrence of any of the following     
shall constitute a material default and breach of this Lease by Tenant:         

  (1)   Any failure by Tenant to pay rent or to make any other
payment required to be made by Tenant hereunder at the time specified for       
payment.                                                                        

 (2)   Any abandonment or vacation of the Premises by Tenant
without payment of rent in full.                                                

(3)   Any warranty, representation or statement made or   
furnished by Tenant to Landlord at any time in connection with this Lease       
or any other agreement to which Tenant and Landlord are parties is              
determined to have been false or misleading in any material respect when        
made or furnished.                                                              

(4)   Any attempted assignment, sublease, mortgage or     
encumbrance in violation of Paragraph 15 above.                                 

(5)   The occurrence of any Insolvency Event filed against
Tenant by a third party other than Landlord which is not dismissed within       
thirty (30) days after such occurrence or the occurrence of any other           
Insolvency Event.                                                               

  (6)   Any failure by Tenant to observe and perform any other
provision of this Lease (or of the addenda attached hereto) to be observed      
or performed by Tenant, where such failure continues for fifteen (15) days      
(except where a different period is specified in this Lease or in the           
addenda) after written notice thereof by Landlord to Tenant; provided,          
however, that any such notice shall be in lieu of, and not in addition to,      
any notice required under Section 1161 ET SEQ. of the California Code of        
Civil Procedure, and provided, further, that if the nature of such default      
is such that the same cannot reasonably be cured within such fifteen (15)       
day period, Tenant shall not be deemed to be default if Tenant shall            
within such period commence such cure and thereafter diligently prosecute       
the same to completion; but in no event shall any such cure period exceed       
ninety (90) days in the aggregate.                                              

(b)  REMEDIES.  In the event of any such default by Tenant, then in 
addition to all other remedies available to Landlord at law or in equity:       

 (1)   Landlord shall have the immediate option to terminate
this Lease and all rights of Tenant hereunder by giving Tenant written          
notice of such intention to terminate, in which event Landlord may recover      
from Tenant all of the following: (i) the worth at the time of award of         
any unpaid rent which had been earned at the time of such termination;          
plus (ii) the worth at the time of award of the amount by which the unpaid      
rent which would have been earned after termination until the time of           
award exceeds the amount of such rental loss Tenant proves reasonably           
could have been avoided; plus (iii) the worth at the time of award of the       
amount by which the unpaid rent for the balance of the term after the time      
of award exceeds the amount of such rental loss that Tenant proves              
reasonably could be avoided; plus (iv) any other amount necessary to            
compensate Landlord for all the detriment proximately caused by Tenant's        
failure to perform its obligations under this Lease or which in the             
ordinary course of things would be likely to result therefrom; plus (v) at      
Landlord's election, such other amounts in addition to or in lieu of the        
foregoing as may be permitted from time to time by applicable California        
law.  As used in (i) and (ii) above, the "worth at the time of award"           
shall be computed by allowing interest at the rate specified in Paragraph       
36(a) below and as used in (iii) above, the "worth at the time of award"        
shall be computed by discounting such amount at the discount rate of the        
Federal Reserve Bank of San Francisco at the time of award plus one             
percent (1%).                                                                   

(2)   Landlord shall also have the right, with or without 
terminating this Lease, to re-enter the Premises and remove all persons         
and property from the Premises.  Such property may be removed and stored        
in a public warehouse or elsewhere at the cost of and for the account of        
Tenant.                                                                         

 (3)   In the event Landlord elects to re-enter the Premises
under (2) above or takes possession of the Premises pursuant to any             
proceeding or notice provided by law or Tenant vacates or abandons the          
Premises, but Landlord does not elect to terminate this Lease as provided       
in this Paragraph 25, Landlord may from time to time without terminating        
this Lease either recover from Tenant all rent as it becomes due or relet       
the Premises or any part thereof upon such terms and conditions as              
Landlord in its sole discretion may deem advisable, with the right of           
Landlord to make alterations and repairs to the Premises.  In the event of      
any such reletting, rental and other charges received by Landlord               
therefrom shall be applied in the following order: (i) to the payment of        
any indebtedness other than rent due hereunder from Tenant to Landlord,         
(ii) to the payment of all costs of such reletting, (iii) to the payment        
of the cost of any alterations and repairs to the Premises, and (iv) to         
the payment of rent and other charges due and unpaid hereunder.  The            
residue, if any, shall be held by Landlord and applied in payment of            
future rent and other charges due hereunder, as the same may become due.        
In the event the rental and other charges received by Landlord from such        
reletting are at any time less than the then aggregate of (i) through (iv)      
above, Tenant shall pay such deficiency to Landlord immediately upon            
demand therefor, but not more often than monthly.                               

(4)   No re-entry or taking possession of the Premises by 
Landlord pursuant to this Paragraph 25 shall be construed as an election        
to terminate this Lease unless a written notice of such intention shall be      
given to Tenant or unless such termination shall be decreed by a court of       
competent jurisdiction.  Notwithstanding any reletting without termination      
by Landlord because of any default by Tenant, Landlord may at any time          
after such reletting elect to terminate this Lease for any such default.        

     (5)   In any action for unlawful detainer commenced by Landlord
against Tenant by reason of any default hereunder, the reasonable rental        
value of the Premises for the period of the unlawful detainer shall be the      
amount of rent reserved in this Lease for such period, unless Landlord or       
Tenant shall prove to the contrary by competent evidence.  The rights and       
remedies reserved to Landlord herein, including those not specifically          
described, shall be cumulative and, except as otherwise provided by then        
applicable California law, Landlord may pursue any or all of such rights        
and remedies at the same time or otherwise.                                     

   (6)   Provided that Landlord serves notice in accordance with
the provisions of this Paragraph 25 and Paragraph 23 above, Tenant hereby       
waives any notice required by Section 1161 of the California Code of Civil      
Procedure.                                                                      

(c)  DEFAULT BY LANDLORD.  Landlord shall not be in default or      
breach of this Lease unless Landlord fails to observe or perform an             
obligation required under this Lease to be observed or performed by             
Landlord and such failure continues for thirty (30) days (except where a        
different period is specified in this Lease) after written notice thereof       
by Tenant to Landlord; provided, however, that if the nature of such            
default is such that the same cannot reasonably be cured within such            
thirty (30) day period, Landlord shall not be deemed to be default if           
Landlord shall within such period commence such cure and thereafter             
diligently prosecute the same to completion.                                    

  HOLDING OVER

PARAGRAPH 26                                                                    

If Tenant holds over after the expiration or earlier termination of 
the Term without the express written consent of Landlord, Tenant shall          
become a tenant at sufferance only at either the then prevailing market         
rate, as determined by Landlord in its sole and absolute discretion, for        
the Premises or, at Landlord's option, one hundred and fifty percent            
(150%) of the Basic Annual Rental, in each case in effect upon the date of      
such expiration or earlier termination (subject to such adjustments as may      
be provided for in Paragraph 2 above and prorated on a daily basis) and         
otherwise upon the terms, covenants and conditions herein specified, so         
far as applicable.  Acceptance by Landlord of rent after such expiration        
or earlier termination shall not constitute a consent to a holdover             
hereunder or result in a renewal of this Lease.  The foregoing provisions       
of this Paragraph are in addition to and do not affect Landlord's right of      
re-entry or any other rights of Landlord hereunder or as otherwise              
provided by law, including without limitation Landlord's right to receive       
damages, consequential and direct, sustained by reason of Tenant's              
retention of possession.                                                        

 CONDITION OF PREMISES

PARAGRAPH 27                                                                    

(a)  PRESMISES LEASED "AS-IS".  Tenant acknowledges and agrees that 
except as may be expressly specifically provided herein, if at all:  (i)        
Tenant has been afforded ample opportunity to inspect the Premises and the      
Building, and has investigated their condition to the extent Tenant             
desires to do so; (ii) Tenant is leasing the Premises in its "AS-IS"            
condition; (iii) no representation regarding the condition of the Premises      
or the Building has been made by or on behalf of Landlord; (iv) Landlord        
has no obligation to remodel or to make any repairs, alterations or             
improvements to the Premises in connection with Tenant's initial                
occupancy; (v) any repairs, alterations or improvements to the Premises in      
connection with Tenant's initial occupancy shall be Tenant's                    
responsibility and subject to the Construction Addendum, except to the          
extent of any Tenant Improvement Allowance from Landlord pursuant to the        
Construction Addendum.                                                          

(b)  SURRENDER OF PREMISES.  Upon the expiration or early           
termination of this Lease, Tenant shall surrender the Premises to Landlord      
in safe, clean and good condition (except for ordinary wear and tear            
associated with normal office use) and free of Hazardous Materials as           
provided in Paragraph 9(b)(14) above.  Tenant shall remove all of its           
personal property as of the expiration date or termination date, as the         
case may be.  In addition, at Landlord's option, Landlord may require           
Tenant to remove all alterations installed by Tenant or for Tenant's            
benefit at the Premises except the initial Tenant Improvements approved by      
Landlord pursuant to the Construction Addendum.  If Tenant shall remove or      
restore any such property or alterations, Tenant shall repair any damage        
arising from such removal.   The terms of this Paragraph 27(b) shall            
survive the expiration or earlier termination of this Lease.                    

QUIET POSSESSION    

PARAGRAPH 28                                                                    

Upon Tenant's paying the rent reserved hereunder and observing and  
performing all of the covenants, conditions and provisions on Tenant's          
part to be observed and performed hereunder, Tenant shall have quiet            
possession of the Premises for the entire Term, subject to all the              
provisions of this Lease.                                                       

NOTICE OF DAMAGE  

PARAGRAPH 29                                                                    

Tenant shall give prompt notice to Landlord in case of fire or      
accidents in the Premises or at the Project or of any defects discovered        
therein or in their fixtures or equipment.                                      

GOVERNING LAW     

PARAGRAPH 30                                                                    

This Lease shall be governed by, and construed in accordance with   
the laws of the State of California.                                            

COMMON FACILITIES; PARKING  

PARAGRAPH 31                                                                    

(a)  RIGHT TO USE COMMON FACILITIES.  Tenant shall have the non-    
exclusive right, in common with others, to the use of any common                
entrances, ramps, drives and similar access and serviceways and other           
common facilities in the Project.  The rights of Tenant hereunder in and        
to the common facilities shall at all times be subject to the rights of         
Landlord and other tenants and owners in the Project who use the same in        
common with Tenant, and it shall be the duty of Tenant to keep all the          
common facilities free and clear of any obstructions created or permitted       
by Tenant or resulting from Tenant's operations.  Tenant shall not use the      
common areas of the Building or the Project, including, without                 
limitation, the Building's electrical room, parking lot or trash                
enclosures, for storage purposes.  Nothing herein shall affect the right        
of Landlord at any time to remove any persons not authorized to use the         
common facilities from such facilities or to prevent the use of such            
facilities by unauthorized persons.                                             

(b)  CHANGES IN COMMON FACILITIES.  Landlord reserves the right, at 
any time and from time to time to (i) make alterations in or additions to       
the common areas or facilities of the Project, including, without               
limitation, constructing new buildings or changing the location, size,          
shape or number of the driveways, entrances, parking spaces, parking            
areas, loading and unloading areas, landscape areas and walkways, (ii)          
designate property to be included in or eliminate property from the common      
areas or facilities of the Project, (iii) close temporarily any of the          
common areas or facilities of the Project for maintenance purposes, and         
(4) use the common areas and facilities of the Project while engaged in         
making alterations in or additions and repairs to the Project; provided,        
however, that reasonable access to the Premises and parking at or near the      
Project remains available.                                                      

(c)  PARKING.  Landlord shall make available to Tenant, and Tenant  
shall have the right to use, throughout the term of the Lease the number        
of parking spaces indicated on Item 14 of the Basic Lease Provisions on an      
unassigned basis on that portion of the Project designated by Landlord          
from time to time for parking.  The parking spaces shall be used for            
parking only by vehicles no larger than full-sized passenger automobiles        
or pick-up trucks, and Tenant shall park no vehicles at the Project             
overnight.  Landlord shall have the right to impose rules and regulations       
on parking at the Project.  Landlord shall also have the right, in              
addition to all other rights and remedies that it may have under this           
Lease, to remove or tow away a vehicle which is in violation of Landlord's      
rules, without prior notice to Tenant, and Tenant shall pay the cost            
thereof to Landlord within ten (10) days after notice from Landlord to          
Tenant.  Upon any sale by Landlord of any building located at the Project,      
Landlord shall have the right to alter the parking area.                        

SIGNAGE   

PARAGRAPH 32                                                                    

Tenant shall not install any signage within the Project, the        
Building or the Premises without obtaining the prior written approval of        
Landlord, and Tenant shall be responsible for the maintenance of any such       
signage installed by Tenant.  Any such signage shall comply with                
Landlord's current Project signage criteria and all applicable                  
governmental requirements.                                                      

SUCCESSORS AND ASSIGNS  

PARAGRAPH 33                                                                    

Except as otherwise provided in this Lease, and subject to the terms
of Paragraph 15 above, all of the covenants, conditions, and provisions of      
this Lease shall be binding upon and shall inure to the benefit of the          
parties hereto and their respective heirs, personal representatives,            
successors, and assigns.                                                        

   BROKERS

PARAGRAPH 34                                                                    

Tenant warrants that it has had no dealings with any real estate    
broker or agent in connection with the negotiation of this Lease,               
excepting only the broker named in Item 12 of the Basic Lease Provisions        
as the "Cooperating Broker", and that it knows of no other real estate          
broker or agent who is or might be entitled to a commission or finder's or      
similar fee in connection with this Lease excepting only the broker named       
in Item 11 of the Basic Lease Provisions as the "Listing Broker".  Tenant       
agrees to indemnify, protect, defend and hold Landlord harmless from and        
against any and all costs, expenses and liabilities for any compensation        
claimed by the Cooperating Broker in excess of the maximum commission           
previously disclosed in writing to Landlord or claimed by any other             
broker, finder or agent in connection with the negotiation of this Lease        
other than brokers claiming solely through Landlord.                            

NAME        

PARAGRAPH 35                                                                    

Tenant shall not, without the prior written consent of Landlord, use
the name of the Building or the Project for any purpose other than as the       
address of the business to be conducted by Tenant in the Premises and in        
no event shall Tenant acquire any rights in or to such names.                   

EXAMINATION OF LEASE          

PARAGRAPH 36                                                                    

Submission of this Lease for examination or signature by Tenant does
not constitute a reservation of or option for lease, and it is not              
effective as a lease or otherwise until execution by and delivery to both       
Landlord and Tenant.                                                            

INTEREST ON TENANT'S OBLIGATIONS; LATE CHARGE 

PARAGRAPH 37                                                                    

(a)  Any amount due from Tenant to Landlord which is not paid when  
due shall bear interest at the lesser of eighteen percent (18%) per annum       
or the maximum rate then permitted by law in this context from the date         
such payment is due until paid.  The rate so determined shall continue in       
effect following any default by Tenant pursuant to this Lease.  Payment of      
such interest shall not excuse or cure any default by Tenant under this         
Lease.                                                                          

(b)  In the event Landlord does not receive any installment of rent 
due under this Lease within three (3) business days after the date such         
installment is due, Tenant shall pay Landlord a late charge equal to five       
percent (5%) of the delinquent installment of rent.  The parties agree          
that the amount of such late charge represents a reasonable estimate of         
the cost and expense that will be incurred by Landlord in processing each       
delinquent payment of rent by Tenant and that such late charge shall be         
paid to Landlord as liquidated damages for each delinquent payment              
pursuant to Section 1671 of the California Civil Code.  The parties             
further agree that the payment of late charges and the payment of interest      
provided for in Paragraph 36(a) above are distinct and separate from one        
another in that the payment of interest is to compensate Landlord for its       
inability to use the money improperly withheld by Tenant, while the             
payment of late charges is to compensate Landlord for its additional            
administrative expenses in handling and processing delinquent payments.         

TIME  

PARAGRAPH 38                                                                    

Time is and shall be of the essence of this Lease and each and all  
of its provisions.                                                              

DEFINED TERMS AND MARGINAL HEADINGS     

PARAGRAPH 39                                                                    

The words "Landlord" and "Tenant" as used herein shall include the  
plural as well as the singular.  If more than one person is named as            
Tenant under this Lease, the obligations of such persons shall be joint         
and several.  Whenever under the provisions of this Lease Landlord is           
required or agrees to take certain action, Landlord's obligation to do so       
shall be deemed fulfilled if Landlord causes such action to be taken by         
any other person.  The marginal headings and titles to the Paragraphs and       
other divisions of this Lease are not a part of this Lease and shall have       
no effect upon the construction or interpretation of any part hereof.           

PRIOR AGREEMENTS; SEVERABILITY      

PARAGRAPH 40                                                                    

This Lease, including all of the Addenda and Exhibits attached      
hereto, contains all of the agreements of the parties hereto with respect       
to any matter covered or mentioned in this Lease, and no prior agreement,       
understanding or representation pertaining to any such matter shall be          
effective for any purpose.  No provision of this Lease may be amended or        
added to except by an agreement in writing signed by the parties hereto or      
their respective successors in interest.  If any term or provision of this      
Lease the deletion of which would not adversely affect the receipt of any       
material benefit by either party hereunder shall be held invalid or             
unenforceable to any extent, the remainder of this Lease shall not be           
affected thereby and each term and provision of this Lease shall be valid       
and enforceable to the fullest extent permitted by law.                         

CORPORATE AUTHORITY           

PARAGRAPH 41                                                                    

Each individual executing this Lease on behalf of Landlord and      
Tenant represents and warrants that (a) such individual has full power and      
authority to execute this Lease on behalf of its party, and (b) the             
execution and delivery of this Lease have been duly authorized by such          
party.  If Tenant is a corporation Tenant shall, within ten (10) days           
after execution of this Lease, deliver to Landlord a certified copy of a        
resolution of the Board of Directors of Tenant authorizing or ratifying         
the execution of this Lease.                                                    

NO LIGHT, AIR OR VIEW EASEMENTS           

PARAGRAPH 42                                                                    

Any diminution or shutting off of light, air or view by any         
structure which may be erected on lands adjacent to the Building or the         
Project shall in no way affect this Lease or impose any liability on            
Landlord.                                                                       

LANDLORD'S APPROVALS      

PARAGRAPH 43                                                                    

In no event shall the review, approval, inspection or examination by
Landlord of any item to be reviewed, approved, inspected or examined by         
Landlord under the terms of this Lease be deemed to be an approval of or        
representation or warranty as to the adequacy, accuracy, sufficiency or         
soundness of any such item or the quality or suitability of such item for       
its intended use.  Any such review, approval, inspection or examination by      
Landlord shall be for the sole purpose of protecting Landlord's interests       
in the Building and the Project and under this Lease and no third parties       
shall have any rights pursuant thereto.                                         

EXERCISE FACILITY         

PARAGRAPH 44                                                                    

Tenant agrees to inform all employees of Tenant of the following:   
(i) the exercise facility is available for the use of the employees of          
tenants of the Project only and for no other person; (ii) use of the            
facility is at the risk of Tenant or Tenant's employees, and all users          
must sign a release; (iii) the facility is unsupervised; and (iv) users of      
the facility must report any needed equipment maintenance or any unsafe         
conditions to the Landlord immediately.  Landlord may discontinue               
providing such facility at Landlord's sole option at any time without           
incurring any liability.  As a condition to the use of the exercise             
facility, Tenant and each of Tenant's employees that uses the exercise          
facility shall first sign a written release in form and substance               
acceptable to Landlord.  Landlord may change the rules and/or hours of the      
exercise facility at any time, and Landlord reserves the right to deny          
access to the exercise facility to anyone due to misuse of the facility or      
noncompliance with rules and regulations of the facility.  Tenant will          
indemnify, defend and hold harmless Landlord from any claims, liabilities       
or damages resulting from use of the exercise facility in the Project by        
Tenant, Tenant's employees or invitees except to the extent caused by           
Landlord's gross active negligence or intentional misconduct.                   

MISCELLANEOUS     

PARAGRAPH 45                                                                    

(a)  At the expiration or earlier termination of this Lease, Tenant 
shall execute, acknowledge and deliver to Landlord, within five (5) days        
after written demand from Landlord to Tenant, any quitclaim deed or other       
document as may be reasonably requested by any title insurance company to       
remove this Lease as a matter affecting title to the Premises.                  

(b)  Tenant acknowledges that the liability of Landlord with respect
to its obligations pursuant to this Lease is limited to Landlord's equity       
interest in the Building.  Tenant shall look solely to Landlord's equity        
interest in the Building to satisfy any claim or judgment against or any        
liability or obligation of Landlord to Tenant.  No recourse shall be had        
by Tenant against Landlord or the assets of Landlord (other than the            
equity interest of Landlord in the Building) to satisfy any claim or            
judgment of Tenant against Landlord or any obligation or liability of           
Landlord to Tenant.                                                             

WAIVER OF JURY TRIAL        

PARAGRAPH 46                                                                    

Landlord and Tenant (including any assignee, successor or personal  
representative of such party) HEREBY WAIVE THEIR RESPECTIVE RIGHT TO TRIAL      
BY JURY of any cause of action, claim, counterclaim or cross-complaint in       
any action, proceeding and/or hearing brought by either Landlord against        
Tenant or Tenant against Landlord on any matter whatsoever arising out of,      
or in any way connected with, this Lease, the relationship of Landlord and      
Tenant, Tenant's use or occupancy of the Premises, or any claim of injury       
or damage, or the enforcement of any remedy under any law, statute, or          
regulation, emergency or otherwise, now or hereafter in effect.  Neither        
party will seek to consolidate any such action in which a jury has been         
waived, with any other action in which a jury trial cannot or has not been      
waived.  THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE      
PARTIES HERETO, AND EACH PARTY HAS RECEIVED THE ADVICE OF COUNSEL WITH          
RESPECT TO SUCH WAIVER.  IT IS THE INTENTION OF THE PARTIES THAT THESE          
PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS.  BY EXECUTING THIS LEASE,         
LANDLORD AND TENANT AGREE THAT THIS PROVISION MAY BE FILED BY ANY PARTY         
HERETO WITH THE CLERK OR JUDGE BEFORE WHOM ANY ACTION IS INSTITUTED, WHICH      
FILING SHALL CONSTITUTE THE WRITTEN CONSENT TO A WAIVER OF JURY TRIAL           
REQUIRED PURSUANT TO AND IN ACCORDANCE WITH SECTION 631 OF THE CALIFORNIA       
CODE OF CIVIL PROCEDURE.  NO PARTY HAS IN ANY WAY AGREED WITH OR                
REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS PARAGRAPH WILL       
NOT BE FULLY ENFORCED IN ALL INSTANCES.                                         

IN WITNESS WHEREOF, the parties hereto have executed this Lease as  
of the date first set forth on page 1 hereof.                                   

LANDLORD:                                      TENANT:                          

METROPOLITAN LIFE INSURANCE                    ADVANCED POLYMER SYSTEMS,        
COMPANY, a New York corporation                a Delaware corporation           

By:  /s/Edward J. Hayes                       By:  /s/Michael O'Connell         
-------------------------                      --------------------     
Its: Assistant Vice President                 Its:  Executive VP/CFO            
------------------------                      --------------------    

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EXHIBIT A       

SITE PLAN OF PROJECT        

This exhibit includes a map of the Project.                                     

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EXHIBIT B         

SITE PLAN OF PREMISES         

This exhibit includes a floor plan of the premises.                             

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EXHIBIT C           

CONFIRMATION OF LEASE TERM          

THIS MEMORANDUM is made as of ____________________, 1997, between   
METROPOLITAN LIFE INSURANCE COMPANY, a New York corporation ("Landlord"),       
and ADVANCED POLYMER SYSTEMS, a Delaware corporation ("Tenant"), who            
entered into a lease dated for reference purposes as of November 7, 1997,       
covering certain premises located at Seaport Centre, Redwood City,              
California, which premises are commonly known as 123 Saginaw Drive.             
Redwood City, California.  All capitalized terms, if not defined herein,        
shall be defined as they are defined in the Lease.                              

1.   The parties to this Memorandum hereby agree that the date of   
_________________, 19___ is the "Commencement Date" of the Term and that        
_______________, 19___ is the "Expiration Date" of the Term.                    

2.   Tenant hereby confirms the following:                          

    (a)   That it has accepted possession of the Premises pursuant
to the terms of the Lease;                                                      

(b)   That Landlord has fulfilled all of its duties of an 
inducement nature;                                                              

     (c)   That the Lease has not been modified, altered or amended,
except as follows:                                                              

  ________________________________________________
  ________________________________________________
  ________________________________________________

     (d)   That there are no offsets or credits against rentals, nor
has any security deposit been paid except as provided pursuant to the           
terms of the Lease; and                                                         

(e)   That the Lease is in full force and effect.         

IN WITNESS WHEREOF, the parties hereto have executed this           
Confirmation of Lease Term as of the date first set forth above.                

LANDLORD:                                 TENANT:                               

METROPOLITAN LIFE INSURANCE               ADVANCED POLYMER SYSTEMS,             
COMPANY, a New York corporation           a Delaware corporation                

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

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

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EXHIBIT D           

PERMITTED HAZARDOUS MATERIALS     

This exhibit includes a table listing of permitted hazardous materials.         

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EXHIBIT E       

This exhibit is not used.                                                       

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EXHIBIT F     

FORM OF SUBORDINATION, NONDISTURBANCE & ATTORNMENT AGREEMENT    

RECORDING REQUESTED                                                             
BY AND WHEN                                                                     
RECORDED RETURN TO:                                                             

____________________, Esq.                                                      
____________________                                                            
____________________                                                            
____________________                                                            

SUBORDINATION,            
NONDISTURBANCE            
AND ATTORNMENT AGREEMENT            

NOTICE:         THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT               
 AGREEMENT RESULTS IN YOUR LEASEHOLD ESTATE IN THE
  PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY
THAN THE LIEN OF SOME OTHER OR LATER SECURITY   
INSTRUMENT.                                     

DEFINED TERMS           
Execution Date:                                                                 
Beneficiary & Address:                                                          

Attn.:                                                                          
with a copy to:                                                                 

Tenant & Address:                                                               

Landlord & Address:                                                             

Loan: A first mortgage loan in the original principal amount of $               
from Beneficiary to Landlord.                                         
Note: A Promissory Note executed by Landlord in favor of Beneficiary in         
the amount of the Loan dated as of                                              

Deed of Trust: A Deed of Trust, Security Agreement and Fixture Filing           
dated as of                                                                     
executed by Landlord, to                     as Trustee, for the benefit        
of Beneficiary securing repayment of the Note to be recorded in the             
records of the County in which the Property is located.                         

Lease and Lease Date:  The lease entered into by Landlord and Tenant dated      
as of                     covering the Premises.                                
[Add amendments]                                                                
Property:  [Property Name]                                                      
[Street Address 1]                                        
[City, State, Zip]                                        

The Property is more particularly described on Exhibit A. 

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 THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT
(the "Agreement") is made by and among Tenant, Landlord, and Beneficiary        
and affects the Property described in Exhibit A.  Certain terms used in         
this Agreement are defined in the Defined Terms. This Agreement is entered      
into as of the Execution Date with reference to the following facts:            

   A.   Landlord and Tenant have entered into the Lease covering
certain space in the improvements located in and upon the Property (the         
"Premises").                                                                    

 B.   Beneficiary has made or is making the Loan to Landlord
evidenced by the Note. The Note is secured, among other documents, by the       
Deed of Trust.                                                                  

   C.   Landlord, Tenant and Beneficiary all wish to subordinate
the Lease to the lien of the Deed of Trust.                                     

     D.   Tenant has requested that Beneficiary agree not to disturb
Tenant's rights in the Premises pursuant to the Lease in the event              
Beneficiary forecloses the Deed of Trust, or acquires the Property              
pursuant to the trustee's power of sale contained in the Deed of Trust or       
receives a transfer of the Property by a conveyance in lieu of foreclosure      
of the Property (collectively, a "Foreclosure Sale") but only if Tenant is      
not then in default under the Lease and Tenant attorns to Beneficiary or a      
third party purchaser at the Foreclosure Sale (a "Foreclosure Purchaser").      

    NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties agree as follows:                       

     1.   Subordination.  The Lease and the leasehold estate created
by the Lease and all of Tenant's rights under the Lease are and shall           
remain subordinate to the Deed of Trust and the lien of the Deed of Trust,      
to all rights of Beneficiary under the Deed of Trust and to all renewals,       
amendments, modifications and extensions of the Deed of Trust.                  

     2.   Acknowledgments by Tenant.  Tenant agrees that: (a) Tenant
has notice that the Lease and the rent and all other sums due under the         
Lease have been or are to be assigned to Beneficiary as security for the        
Loan. In the event that Beneficiary notifies Tenant of a default under the      
Deed of Trust and requests Tenant to pay its rent and all other sums due        
under the Lease to Beneficiary, Tenant shall pay such sums directly to          
Beneficiary or as Beneficiary may otherwise request. (b) Tenant shall send      
a copy of any notice or statement under the Lease to Beneficiary at the         
same time Tenant sends such notice or statement to Landlord. (c) This           
Agreement satisfies any condition or requirement in the Lease relating to       
the granting of a nondisturbance agreement.                                     

     3.   Foreclosure and Sale.  In the event of a Foreclosure Sale,

        (a)   So long as Tenant complies with this Agreement and
is not in default under any of the provisions of the Lease, the Lease           
shall continue in full force and effect as a direct lease between               
Beneficiary and Tenant, and Beneficiary will not disturb the possession of      
Tenant, subject to this Agreement. Tenant agrees to attorn to and accept        
Beneficiary as landlord under the Lease and to be bound by and perform all      
of the obligations imposed by the Lease.  Upon Beneficiary's acquisition        
of title to the Property, Beneficiary will perform all of the obligations       
imposed on the Landlord by the Lease except as set forth in this                
Agreement; provided, however, that Beneficiary shall not be: (i) liable         
for any act or omission of a prior landlord (including Landlord); or (ii)       
subject to any offsets that Tenant might have against any prior landlord        
(including Landlord); or (iii) bound by any rent or additional rent which       
Tenant might have paid in advance to any prior landlord (including              
Landlord) for a period in excess of one month or by any security deposit,       
cleaning deposit or other sum that Tenant may have paid in advance to any       
prior landlord (including Landlord); or (iv) bound by any amendment,            
modification, assignment or termination of the Lease made without the           
written consent of Beneficiary; (v) obligated or liable with respect to         
any representations or warranties contained in the Lease; (vi) liable to        
Tenant or any other party for any conflict between the provisions of the        
Lease and the provisions of any other lease affecting the Property which        
is not entered into by Beneficiary; or (vii) subject to any defenses that       
Tenant might have against any prior landlord (including Landlord) except:       

    (x) after foreclosure, to the extent of a failure by
Beneficiary, after notice and expiration of any grace or cure period            
applicable to a landlord default, to cure a continuing condition of             
default of landlord under the Lease which is capable of cure by                 
Beneficiary; and                                                                

(y) before foreclosure, if landlord shall have failed to cure a default of      
landlord within the time provided for in the Lease, and if Beneficiary has      
failed to cure such default within an additional thirty (30) days after         
receipt of notice thereof, or if such default cannot be cured within that       
time, then within such additional time as may be necessary, if, within          
such thirty (30) days, Beneficiary has commenced and is diligently              
pursuing the remedies necessary to cure such default (including                 
commencement of foreclosure proceedings or other proceedings to acquire         
possession of the Property, if necessary to effect such cure), and such         
period of time shall be extended by any period within which Beneficiary is      
prevented from commencing or pursuing such foreclosure proceedings or           
other proceedings to acquire possession of the Property by reason of            
landlord's bankruptcy, and until the time allowed as aforesaid for              
Beneficiary to cure such defaults has expired without cure, Tenant shall        
have no right to, and shall not, terminate the Lease on account of              
default.                                                                        

      (b)   Upon the written request of Bene-ficiary after a
Foreclosure Sale, the parties shall execute a lease of the Premises upon        
the same provisions as contained in the Lease between Landlord and Tenant,      
except as set forth in this Agreement, for the unexpired term of the            
Lease.                                                                          

 4.   Subordination and Release of Purchase Options.  Lessee
represents that it has no right or option of any nature to purchase the         
Property or any portion of the Property or any interest in the Borrower.        
To the extent Tenant has or acquires any such right or option, these            
rights or options are acknowledged to be subject and subordinate to the         
Mortgage and are waived and released as to Beneficiary and any Foreclosure      
Purchaser.                                                                      

 5.   Acknowledgment by Landlord.  In the event of a default
under the Deed of Trust, at the election of Beneficiary, Tenant shall and       
is directed to pay all rent and all other sums due under the Lease to           
Beneficiary.                                                                    

    6.   Construction of Improvements.  Beneficiary shall not have
any obligation or incur any liability with respect to the completion of         
the improvements in which the Premises are located at the commencement of       
the term of the Lease.                                                          

    7.   Notice.  All notices under this Agreement shall be deemed
to have been properly given if delivered by overnight courier service or        
mailed by United States certified mail, with return receipt requested,          
postage prepaid to the party receiving the notice at its address set forth      
in the Defined Terms (or at such other address as shall be given in             
writing by such party to the other parties) and shall be deemed complete        
upon receipt or refusal of delivery.                                            

  8.   Miscellaneous.  Beneficiary shall not be subject to any
provision of the Lease that is incon-sistent with this Agreement. Nothing       
contained in this Agreement shall be construed to derogate from or in any       
way impair or affect the lien or the provisions of the Deed of Trust. This      
Agreement shall be governed by and construed in accordance with the laws        
of the State of in which the Property is located.                               

   9.   Liability and Successors and Assigns.  In the event that
Beneficiary acquires title to the Premises or the Property, Beneficiary         
shall have no obligation nor incur any liability beyond Beneficiary's then      
equity interest in the building in which the Premises is located, and           
Tenant shall look solely to such equity interest for the payment and            
performance of any obligations imposed upon Beneficiary under this              
Agreement or under the Lease.  This Agreement shall run with the land and       
shall inure to the benefit of the parties and, their respective successors      
and permitted assigns including a Foreclosure Purchaser. If a Foreclosure       
Purchaser acquires the Property or if Beneficiary assigns or transfers its      
interest in the Note and Deed of Trust or the Property, all obligations         
and liabilities of Beneficiary under this Agreement shall terminate and be      
the responsibility of the Foreclosure Purchaser or other party to whom          
Beneficiary's interest is assigned or transferred.  The interest of Tenant      
under this Agreement may not be assigned or transferred except in               
connection with an assignment of its interest in the Lease which has been       
consented to by Beneficiary.                                                    

IN WITNESS WHEREOF, the parties have executed this        
Subordination, Nondisturbance and Attornment Agreement as of the Execution      
Date.                                                                           

NOTICE:    THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT          
CONTAINS PROVISIONS WHICH ALLOW THE PERSON OBLIGATED ON THE LEASE TO            
OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOS-ES THAN      
IMPROVEMENT OF THE PROPERTY.                                                    

IT IS RECOMMENDED THAT THE PARTIES CONSULT WITH THEIR ATTORNEYS PRIOR TO        
THE EXECUTION OF THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT              
AGREEMENT.                                                                      

BENEFICIARY:                   ___________________________________,             
                 a _________________________________

                  By ________________________________,
                  Its ________________________________

TENANT:                        ___________________________________,             
                 a _________________________________

                 By ________________________________
                  Its ________________________________

LANDLORD:                      __________________________________,              
                 a _________________________________

                  By ________________________________,
                  Its ________________________________

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EXHIBIT A OF SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT 

PROPERTY DESCRIPTION  

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State of _____________                                                          

County of ____________                                                          

On ______________, 199_ before me, ____________________, personally             
appeared ___________________, personally known to me (or proved to me on        
the basis of satisfactory evidence) to be the person whose name is              
subscribed to the within instrument and acknowledged to me that he/she          
executed the same in his/her authorized capacity, and that by his/her           
signature on the instrument the person, or the entity upon behalf of which      
the person acted, executed the instrument.                                      

WITNESS my hand and official seal.                                              

Signature ________________________________          (Seal)                      

***************************************************     

State of _____________                                                          

County of ____________                                                          

On ______________, 199_ before me, ____________________, personally             
appeared ___________________, personally known to me (or proved to me on        
the basis of satisfactory evidence) to be the person whose name is              
subscribed to the within instrument and acknowledged to me that he/she          
executed the same in his/her authorized capacity, and that by his/her           
signature on the instrument the person, or the entity upon behalf of which      
the person acted, executed the instrument.                                      

WITNESS my hand and official seal.                                              

Signature ________________________________          (Seal)                      

***************************************************     

State of _____________                                                          

County of ____________                                                          

On ______________, 199_ before me, ____________________, personally             
appeared ___________________, personally known to me (or proved to me on        
the basis of satisfactory evidence) to be the person whose name is              
subscribed to the within instrument and acknowledged to me that he/she          
executed the same in his/her authorized capacity, and that by his/her           
signature on the instrument the person, or the entity upon behalf of which      
the person acted, executed the instrument.                                      

WITNESS my hand and official seal.                                              

Signature ________________________________          (Seal)                      

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RIDER TO LEASE        
ADDITIONAL PROVISIONS         

This Rider to Lease ("Rider") is attached to and a part of a certain
Lease dated as of November 7, 1997 executed concurrently herewith by            
METROPOLITAN LIFE INSURANCE COMPANY, a New York corporation, as Landlord,       
and ADVANCED POLYMER SYSTEMS, a Delaware corporation (for purposes of this      
Rider, "Advanced Polymer" or "Tenant"), as Tenant, for the Premises as          
described therein (the "Lease").                                                

SECTION 1.  DEFINED TERMS; FORCE AND EFFECT                                     

Capitalized terms used in this Rider shall have the same meanings set           
forth in the Lease except as otherwise specified herein and except for          
terms capitalized in the ordinary course of punctuation.  This Rider forms      
a part of the Lease and is being entered into as an additional                  
consideration for this Lease.  Without limiting the generality of the           
foregoing, any default by any party hereunder shall have the same force         
and effect as a default under the Lease.  Should any inconsistency arise        
between this Rider and any other provision of the Lease as to the specific      
matters which are the subject of this Rider, the terms and conditions of        
this Rider shall control.                                                       

SECTION 2.  CONDITION PRECEDENT TO LEASE.                                       

This Lease and the obligations of each party hereunder are expressly            
subject to the condition precedent of Landlord successfully entering into       
and obtaining a legally binding written agreement with The 3DO Company          
("3DO") modifying 3DO's pre-existing lease of the Premises to provide for       
3DO's surrender of possession of the Premises and termination of 3DO's          
rights to the Premises satisfactory in all respects in form and substance       
to Landlord, in Landlord's sole discretion (the "3DO Surrender                  
Agreement").  If such condition precedent is not satisfied or waived in         
writing by Landlord in its sole discretion, this Lease shall be null and        
void, and of no force or effect.  Landlord shall give Tenant written            
notice (by telecopy or by any other means permitted by the Lease) of the        
satisfaction of this condition precedent or shall notify Tenant of the          
satisfaction of this condition precedent by delivering to Tenant the keys       
and possession of the Premises.                                                 

SECTION 3.  OPTION TO EXTEND.                                                   

(a)   Landlord hereby grants Tenant a single option to extend the   
initial Term of the Lease for an additional period of five (5) years (such      
period may be referred to as the "Option Term"), as to the entire Premises      
as it may then exist, upon and subject to the terms and conditions of this      
Section (the "Option To Extend"), and provided that at the time of              
exercise of such right:  (i) Tenant must be in occupancy of the entire          
Premises; and (ii) there has been no material adverse change in Tenant's        
financial position from such position as of the date of execution of the        
Lease, as certified by Tenant's independent certified public accountants,       
and as supported by Tenant's certified financial statements, copies of          
which shall be delivered to Landlord with Tenant's written notice               
exercising its right hereunder.                                                 

(b)   Tenant's election (the "Election Notice") to exercise the     
Option To Extend must be given to Landlord in writing no earlier than the       
date which is two hundred and seventy (270) days before the Expiration          
Date and no later than the date which is one hundred and eighty (180) days      
prior to the Expiration Date.  If Tenant either fails or elects not to          
exercise its Option to Extend by not timely giving its Election Notice,         
then the Option to Extend shall be null and void.                               

(c)   The Option Term shall commence immediately after the          
expiration of the initial Term of the Lease.  Tenant's leasing of the           
Premises during the Option Term shall be upon and subject to the same           
terms and conditions contained in the Lease except that (i) the Basic           
Annual Rent pursuant to the Lease shall be amended to equal the "Option         
Term Basic Annual Rent", defined and determined in the manner set forth in      
the immediately following Subsection; (ii) the Security Deposit shall not       
be reduced; (iii) Tenant shall accept the Premises in its "as is"               
condition without any obligation of Landlord to repaint, remodel, repair,       
improve or alter the Premises or to provide Tenant any allowance therefor;      
and (iv) there shall be no further option or right to extend the term of        
the Lease.  If Tenant timely and properly exercises the Option To Extend,       
references in the Lease to the Term shall be deemed to mean the initial         
Term as extended by the Option Term unless the context clearly requires         
otherwise.                                                                      

(d)   The Option Term Basic Annual Rent shall mean the greater of   
(i) the Basic Annual Rent payable by Tenant under this Lease calculated at      
the rate applicable for the last year of the initial Term, or (ii) the new      
basic annual rents which would apply (with Additional Rent payable as           
provided under this Lease) at the "Prevailing Market Rent".  As used            
herein Prevailing Market Rent shall mean the rent and all other monetary        
payments and escalations, including consumer price increases, that              
Landlord could obtain from a third party desiring to lease the Premises         
for a term equal to the Option Term and commencing when the Option Term is      
to commence under market leasing conditions, and taking into account the        
following:  the size, location and floor levels of the Premises; the type       
and quality of tenant improvements; age and location of the Project;            
quality of construction of the Project; services to be provided by              
Landlord or by tenant; the rent, all other monetary payments and                
escalations obtainable for new leases of space comparable to the Premises       
in the Project and in comparable office/research and development buildings      
within an eight (8) mile radius, and other factors that would be relevant       
to such a third party in determining what such party would be willing to        
pay therefor, provided, however, that Prevailing Market Rent shall be           
determined without reduction or adjustment for "Tenant Concessions" (as         
defined below), if any, being offered to prospective new tenants of             
comparable space.  For purposes of the preceding sentence, the term             
"Tenant Concessions" shall include, without limitation, so-called free          
rent, tenant improvement allowances and work, moving allowances, and lease      
takeovers.  The determination of Prevailing Market Rent based upon the          
foregoing criteria shall be made by Landlord, in the good faith exercise        
of Landlord's business judgment.  Within thirty (30) days after Tenant's        
exercise of the Option To Extend, Landlord shall notify Tenant of               
Landlord's determination of Option Term Rent for the Premises.  If              
Landlord's determination of Prevailing Market Rent is greater than the          
Preceding Rent, and if Tenant, in Tenant's sole discretion, disagrees with      
the amount of Prevailing Market Rent determined by Landlord, Tenant may         
elect to revoke and rescind the exercise of the option by giving written        
notice thereof to Landlord within thirty (30) days after notice of              
Landlord's determination of Prevailing Market Rent.                             

(e)   This Option to Extend is personal to Advanced Polymer and may 
not be used by, and shall not be transferable or assignable (voluntarily        
or involuntarily) to any person or entity.                                      

(f)   Upon the occurrence of any of the following events, Landlord  
shall have the option, exercisable at any time prior to commencement of         
the Option Term, to terminate all of the provisions of this Section with        
respect to the Option to Extend, with the effect of canceling and voiding       
any prior or subsequent exercise so this Option to Extend is of no force        
or effect:                                                                      

     (i)  Tenant's failure to timely exercise the Option to Extend
in accordance with the provisions of this Section.                              

      (ii)  The existence at the time Tenant exercises the Option to
Extend or at the commencement of the Option Term of any default on the          
part of Tenant under the Lease or of any state of facts which with the          
passage of time or the giving of notice, or both, would constitute such a       
default.                                                                        

  (iii)  Tenant's third default under the Lease prior to the
commencement of the Option Term, notwithstanding that all such defaults         
may subsequently be cured.                                                      

In the event of Landlord's termination of the Option to Extend pursuant to      
this Section, Tenant shall reimburse Landlord for all costs and expenses        
Landlord incurs in connection with Tenant's exercise of the Option to           
Extend including, without limitation, costs and expenses with respect to        
any brokerage commissions and attorneys' fees, and with respect to the          
design, construction or making of any tenant improvements, repairs or           
renovation or with respect to any payment of all or part of any allowance       
for any of the foregoing.                                                       

(g)   Without limiting the generality of any provision of the Lease,
time shall be of the essence with respect to all of the provisions of this      
Section.                                                                        

IN WITNESS WHEREOF, the parties hereto have executed this Rider as  
of the date first set forth in the Lease.                                       

LANDLORD:                               TENANT:                                 

METROPOLITAN LIFE INSURANCE             ADVANCED POLYMER SYSTEMS,               
COMPANY, a New York corporation         a Delaware corporation                  

By:  /s/Edward J. Hayes                 By:  /s/Michael O'Connell               
-------------------------                ------------------------       

Its: Assistant Vice President           Its: Executive VP/CFO                   
------------------------                ------------------------      

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CONSTRUCTION ADDENDUM           

This Construction Addendum ("Addendum") is made and entered into as 
of November 7, 1997, by and between Metropolitan Life Insurance Company, a      
New York corporation ("Landlord"), and Advanced Polymer Systems, a              
Delaware corporation ("Tenant").                                                

RECITALS            

A.   Pursuant to the terms of that certain Lease of even date       
herewith (the "Lease"), Landlord leased to Tenant, and Tenant hired from        
Landlord, those certain premises consisting of approximately 26,067 square      
feet of space (the "Premises"), which is a part of Building No. 1 (the          
"Building") in Phase I of Seaport Centre, Redwood City, California (the         
"Project"), as more particularly described in the Lease.                        

B.   Subject to the terms and provisions hereof, Landlord has agreed
that Tenant may construct certain tenant improvements in the Premises.          
Accordingly, Landlord and Tenant now desire to set forth the terms and          
conditions upon which Tenant shall construct the tenant improvements in         
the Premises, as more particularly set forth hereinbelow.  Capitalized          
terms used but not defined herein shall have the meaning ascribed to them       
in the Lease.                                                                   

NOW THEREFORE, the parties agree as follows:                        

1.   GENERAL REQUIREMENTS FOR CONSTRUCTION.                         

    1.1   TENANT'S OBLIGATION TO CONSRUCT.  Tenant shall construct
and install, in a good and workmanlike manner, the tenant improvements and      
fixtures generally described in Exhibit "A" attached hereto (the "Tenant        
Improvements") in accordance with the Final Plans (as defined in Section        
2.2 below) and otherwise in strict compliance with this Addendum.  Tenant       
shall be solely responsible for all cost and expenses related to the            
construction and installation of the Tenant Improvements, subject to            
reimbursement by Landlord pursuant to Section 4 below.                          

1.2   TENANT'S ACCESS TO THE PRESMISES.  Tenant shall     
coordinate with the Seaport Centre project manager for access to the            
Premises and the scheduling of construction work therein.    Tenant shall       
exercise due diligence and best efforts to ensure that Tenant's                 
construction and installation of the Tenant Improvements does not               
unreasonably interfere with the use and enjoyment of other tenants of the       
Building or the Project.  If any shutdown of plumbing, electrical or air        
conditioning equipment of the Building becomes necessary during the course      
of construction of the Tenant Improvements, Tenant shall notify Landlord        
and Landlord and Tenant shall agree upon when, and upon what conditions,        
such shutdown may be made in order to cause the least disruption to other       
tenants in the Building.  Any damage to the Building or the Project caused      
by Tenant or its contractor or subcontractors in connection with the            
construction of the Tenant Improvements shall be immediately repaired at        
Tenant's sole cost and expense.                                                 

2.   DEVELOPMENT OF PLANS.                                          

     2.1   PRELIMINARY PLANS.  Prior to Tenant's commencement of the
construction and installation of the Tenant Improvements, Tenant shall          
prepare and deliver to Landlord preliminary plans and specifications (the       
"Preliminary Plans") setting forth the Tenant Improvements to be                
constructed in the Premises.  Within five (5) business days following           
delivery of the Preliminary Plans, Landlord shall approve the Preliminary       
Plans or deliver to Tenant written notice of Landlord's disapproval of the      
Preliminary Plans.  Such notice shall specify all changes that must be          
made to the Preliminary Plans as a condition of Landlord's approval             
thereof.  Within five (5) business days following receipt of Landlord's         
notice of disapproval, Tenant shall deliver a revised set of Preliminary        
Plans to Landlord, which Preliminary Plans shall incorporate all changes        
specified in Landlord's notice of disapproval.                                  

2.2   FINAL PLANS.  As soon as the Preliminary Plans are  
approved by Landlord, Tenant shall prepare final plans, specifications and      
working drawings for the Tenant Improvements (the "Final Plans") that are       
consistent with and logical evolutions of the approved Preliminary Plans        
and shall deliver the same to Landlord for approval.  Concurrently with         
the delivery of the Final Plans, Tenant shall deliver to Landlord for           
Landlord's approval a schedule of values ("Schedule of Values") allocating      
costs to the various portions of the work involved in the construction and      
installation of the Tenant Improvements and setting forth Tenant's              
reasonable, good faith estimate of the timing of Landlord's disbursements       
of the Tenant Improvement Allowance (as defined in Section 4.1 below) and       
the amount of each such disbursement.  If Landlord disapproves the Final        
Plans and/or the Schedule of Values, Landlord shall deliver to Tenant, as       
soon as reasonably possible but within five (5) business days following         
receipt thereof, written notice of such disapproval.  Such notice shall         
specify all changes that must be made to the Final Plans and/or the             
Schedule of Values as a condition of Landlord's approval thereof.  Within       
five (5) business days following receipt of Landlord's notice of                
disapproval, Tenant shall deliver a revised set of Final Plans and/or           
Schedule of Values to Landlord, which Final Plans and/or Schedule of            
Values shall incorporate all changes specified in Landlord's notice of          
disapproval.  As soon as Landlord approves the Final Plans and the              
Schedule of Values submitted by Tenant, Landlord and Tenant shall each          
sign the same.  Except as otherwise specifically provided in this               
Addendum, the term "Final Plans" as hereinafter used shall mean the final       
plans, specifications, working drawings and Schedule of Values approved by      
Landlord for the construction of the Tenant Improvements.                       

  2.3   FORM OF FINAL PLANS; APPROVAL OF ARCHITECT.  The Final
Plans shall include tracings and other reproducible drawings, shall be in       
a form satisfactory for filing with appropriate governmental authorities        
and shall conform to all applicable codes, rules, regulations and               
ordinances of all governing authorities.  All plans submitted by Tenant to      
Landlord shall be prepared by an architect selected by Tenant and approved      
by Landlord.  Landlord's approval of Tenant's architect shall not               
constitute Landlord's warranty that said architect is professionally            
qualified.                                                                      

2.4   LANDLORD'S APPROVAL.  If the Final Plans otherwise  
conform to the Preliminary Plans and this Addendum, Landlord's approval         
thereof shall not be unreasonably withheld.  If the Final Plans show work       
requiring a modification or change to the shell of the Building, Landlord       
shall not be deemed unreasonable if Landlord disapproves such Final Plans       
or if Landlord conditions its consent to such Final Plans upon Tenant           
paying to Landlord, prior to the commencement of construction, the full         
cost of modifying or changing the shell of the Building.  Landlord may, at      
Landlord's option, have the Preliminary Plans or the Final Plans reviewed       
by Landlord's architect, engineer and/or construction manager; provided,        
however, that any such review shall be performed within the time periods        
set forth above for Landlord's review of the Preliminary Plans and the          
Final Plans.  The cost of any such review shall be reimbursed by Tenant to      
Landlord within ten (10) days following demand therefor by Landlord.  In        
no event shall the approval by Landlord (or Landlord's architect, engineer      
or construction manager) of the Preliminary Plans or the Final Plans            
constitute a representation or warranty by Landlord (or Landlord's              
architect, engineer or construction manager) of: (i) the accuracy or            
completeness thereof, (ii) the absence of design defects or construction        
flaws therein, or (iii) the compliance thereof with applicable laws; and        
the parties agree that Landlord (and Landlord's architect, engineer and         
construction manager) shall incur no liability by reason of such approval.      

  2.5   CHANGES.  There shall be no changes to the Final Plans
without the prior written consent of Landlord.  All change orders               
requested by Tenant shall be made in writing and shall specify any added        
or reduced cost resulting therefrom.  Any change proposed by Tenant shall       
be approved or disapproved by Landlord within five (5) business days            
following Landlord's receipt of plans and specifications therefor.              
Landlord's failure to approve any proposed change within said five (5) day      
period shall be deemed Landlord's disapproval thereof.                          

3.   CONSTRUCTION OF TENANT IMPROVEMENTS.                           

 3.1   PERMITS AND APPROVALS.  Tenant shall submit the Final
Plans to all appropriate governmental agencies for approval and shall not       
commence construction or installation of the Tenant Improvements described      
therein unless and until Tenant has obtained all necessary permits and          
approvals required for the construction and installation of the same and        
has delivered a copy or copies thereof to Landlord.                             

 3.2   CONSTRUCTION DOCUMENTS.  Prior to the commencement of
construction and installation of the Tenant Improvements, Tenant shall          
submit to Landlord, for Landlord's approval, the following (collectively,       
the "Construction Documents"):  (a) the name of the proposed general            
contractor and a copy of the proposed construction contract for the Tenant      
Improvements, which shall be consistent with the terms hereof, (b) a            
written assignment of such construction contract, creating in favor of          
Landlord a prior perfected security interest in all of Tenant's rights          
thereunder and containing the written consent of Tenant's general               
contractor to such assignment, (c) a copy of the architect's contract for       
the Tenant Improvements, which shall be consistent with the terms hereof,       
(d) a written assignment of such architect's contract, creating in favor        
of Landlord a prior perfected security interest in all of Tenant's rights       
under said architect's contract and containing the written consent of           
Tenant's architect to                                                           
such assignment, and (e) a list of all subcontractors and materials             
suppliers proposed to be used by Tenant in connection with the                  
construction of the Tenant Improvements.  Within five (5) business days         
following the delivery of all of the Construction Documents, Landlord           
shall approve such information or deliver to Tenant written notice of           
Landlord's disapproval of all or any information contained therein.  If         
Landlord disapproves the proposed construction contract or the proposed         
architect's contract for the Tenant Improvements, Landlord's notice shall       
specify all changes that must be made to the proposed architect's and/or        
contractor's agreements as a condition of Landlord's approval thereof.          
Within five (5) business days following receipt of Landlord's notice of         
disapproval, Tenant shall deliver to Landlord revised copies of the             
proposed architect's and/or contractor's agreements, which revised copies       
shall incorporate all changes specified in Landlord's notice of                 
disapproval.  If Landlord disapproves the general contractor, any               
subcontractor or materials supplier, the parties shall negotiate in good        
faith to select another contractor, subcontractor or materials supplier         
mutually acceptable to the parties.  Landlord shall be entitled to              
withhold its approval of the general contractor, any subcontractor, or any      
materials supplier, who, in Landlord's determination, is financially or         
otherwise professionally unqualified to construct the Tenant Improvements.      
In addition, Landlord may condition its approval of a general contractor        
upon Tenant obtaining a performance bond and labor and materials payment        
bond, each in an amount equal to one hundred percent (100%) of the              
estimated cost of the Tenant Improvements and in a form acceptable to           
Landlord, in the event Landlord determines that such bonds are necessary        
to ensure lien-free completion of the Tenant Improvements.  Landlord's          
failure to disapprove a contractor, subcontractor or materials supplier         
shall not constitute Landlord's warranty that any contractor,                   
subcontractor or supplier not so disapproved is in fact qualified.              
Following approval by Landlord, Tenant shall not materially amend or            
consent to the material amendment of the construction contract or the           
bonds, if the same are required, without Landlord's prior written               
approval.                                                                       

   3.3   COMMENCEMENT AND COMPLETION OF CONSTRUCTION.  Following
Tenant's satisfaction of all of the requirements of Section 2 above and         
this Section 3, Tenant shall commence construction and installation of the      
Tenant Improvements in accordance with the Final Plans and shall pursue         
the same diligently to completion.  Tenant covenants to give Landlord at        
least ten (10) days' prior written notice of its commencement of                
construction or delivery of materials related thereto to enable Landlord        
to post a notice of nonresponsibility respecting the Tenant Improvements        
to be constructed in the Premises.                                              

    All work done in connection with the Tenant Improvements shall
be performed in compliance with all applicable laws, ordinances, rules,         
orders and regulations of all federal, state, county and municipal              
governments or agencies now in force or that may be enacted hereafter,          
with the requirements and standards of any insurance underwriting board,        
inspection bureau or insurance carrier insuring the Premises pursuant to        
the terms of the Lease, and with all directives, rules and regulations of       
the fire marshal, health officer, building inspector, or other proper           
officers of any governmental agency now having or hereafter acquiring           
jurisdiction.                                                                   

 3.4   BUILDING SYSTEMS.  In no event shall Tenant interfere
with the provision of heating, plumbing, electrical or mechanical system        
services to the Building, make any structural changes to the Building,          
make any changes to the heating, plumbing, electrical or mechanical             
systems of the Building, or make any changes to the Premises which would        
weaken or impair the structural integrity of the Building, alter the            
aesthetic appearance of the Building exterior, or which would affect any        
warranties applicable to the Building or any improvements constructed or        
installed by Landlord therein, without Landlord's prior written consent,        
which consent may be withheld in Landlord's sole discretion.                    

    3.5   INSPECTIONS.  In addition to any right of Landlord under
the Lease and this Addendum to enter the Premises for the purpose of            
posting notices of nonresponsibility, Landlord and its officers, agents or      
employees shall have the right at all reasonable times to enter upon the        
Premises and inspect the Tenant Improvements and to determine that the          
same are in conformity with the Final Plans and all of the requirements of      
this Addendum.  Landlord, however, is under no obligation to supervise,         
inspect or inform Tenant of the progress of construction and Tenant shall       
not rely upon Landlord therefor.  Neither the right herein granted to           
Landlord to make such inspections, nor the making of such inspections by        
Landlord, shall operate as a waiver of any rights of Landlord to require        
that the construction and installation of the Tenant Improvements conform       
with the Final Plans and all the requirements of this Addendum.                 

   3.6   PROTECTION AGAINST LIEN CLAIMS.  Tenant agrees to fully
pay and discharge all claims for labor done and materials and services          
furnished in connection with the construction of the Tenant Improvements,       
to diligently file or procure the filing of a valid notice of completion        
within ten (10) days following completion of construction of the Tenant         
Improvements, to diligently file or procure the filing of a notice of           
cessation upon any cessation of labor on the Tenant Improvements for a          
continuous period of thirty (30) days or more, and to take all reasonable       
steps to forestall the assertion of claims of lien against the Premises or      
the Project, or any part thereof, or any right or interest appurtenant          
thereto.  Upon the request of Landlord, Tenant shall provide Landlord with      
satisfactory evidence of the release or removal (including removal by           
appropriate surety bond) of all liens recorded against the Premises, the        
Project, or any portion thereof, and all stop notices received by Tenant.       

3.7   INSURANCE.                                          

       (a)   At least five (5) days prior to the date Tenant
commences construction of the Tenant Improvements, Tenant shall submit to       
Landlord evidence of the following insurance coverage:  (i) general             
liability insurance as required by Paragraph 19 of the Lease, which shall       
include contractor's protective liability coverage; (ii) workers'               
compensation insurance as required by Paragraph 19 of the Lease, with           
limits in accordance with the statutory requirements of the State of            
California; and (iii) broad form "Builder's Risk" property damage               
insurance with limits of not less than one hundred percent (100%) of the        
estimated value of the Tenant Improvements.  All such policies shall            
provide that thirty (30) days' written notice must be given to Landlord         
prior to termination or cancellation.  The insurance specified in (i) and       
(iii) above shall name Landlord and Landlord's property manager as              
additional insureds and shall provide that Landlord, although an                
additional insured, may recover for any loss suffered by Landlord or            
Landlord's agents by reason of the negligence of Tenant or Tenant's             
contractors, subcontractors and/or employees.  Tenant hereby waives, and        
Tenant shall use best efforts to cause each of its contractors and              
subcontractors to waive, all rights to recover against Landlord and its         
agents, contractors and employees for any loss or damage arising from a         
cause covered by insurance required to be carried by Tenant hereunder to        
the extent of such coverage and shall cause each respective insurer to          
waive all rights of subrogation against Landlord and its agents,                
contractors and employees in connection therewith to the same extent.           

       (b)   At least five (5) days prior to the date Tenant
commences construction of the Tenant Improvements, Tenant shall deliver to      
Landlord certificates of insurance from the carrier(s) providing insurance      
to Tenant's contractor(s) (and, upon Landlord's request, from the               
carrier(s) providing insurance to Tenant's architect) evidencing the            
following types of coverage in such amounts as are reasonably determined        
by Landlord to be necessary:  (i) professional liability insurance; (ii)        
commercial general liability insurance; (iii) business automobile               
liability insurance; (iv) workers' compensation insurance; and (v)              
umbrella liability insurance.  The insurance specified in (i), (ii), (iii)      
and (v) above shall name Landlord and Landlord's property manager as            
additional insureds, and all such policies shall provide that thirty (30)       
days' written notice must be given to Landlord prior to termination or          
cancellation.                                                                   

3.8   Final Documents.  Following completion of the Tenant
Improvements, Tenant shall comply with the following:  (a) Tenant shall         
obtain and deliver to Landlord a copy of the certificate of occupancy for       
the Tenant Improvements from the governmental agency having jurisdiction        
thereof; (b) Tenant shall promptly cause a notice of completion to be           
validly recorded for the Tenant Improvements; (c) Tenant shall furnish          
Landlord with unconditional waivers of lien in statutory form from all          
parties performing labor and/or supplying equipment and/or materials in         
connection with the Tenant Improvements, including Tenant's architect(s);       
(d) Tenant shall deliver to Landlord a certificate of Tenant's                  
architect(s) certifying completion of the Tenant Improvements in                
substantial accordance with the Final Plans; (e) Tenant shall deliver to        
Landlord a certificate of Tenant's contractor(s) certifying completion of       
the Tenant Improvements in substantial accordance with the construction         
contract(s) approved by Landlord; (f) Tenant shall deliver to Landlord a        
full set of reproducible as-built drawings (signed and dated by the             
general contractor and each responsible subcontractor) for the Tenant           
Improvements; and (g) Tenant shall deliver to Landlord copies of all            
written construction and equipment warranties and manuals related to the        
Tenant Improvements.                                                            

     3.9   Indemnification.  Tenant shall, at Tenant's sole cost and
expense, defend, indemnify, save and hold Landlord harmless from and            
against any and all claims, liabilities, demands, losses, expenses,             
damages or causes of actions (whether legal or equitable in nature)             
asserted by any person, firm, corporation, governmental body or agency or       
entity arising out of the construction of the Tenant Improvements.  Tenant      
shall pay to Landlord upon demand all claims, judgments, damages, losses        
or expenses (including attorneys' fees) incurred by Landlord as a result        
of any legal action arising out of the construction of the Tenant               
Improvements.                                                                   

4.   TENANT IMPROVEMENT ALLOWANCE.                                  

     4.1   AMOUNT OF ALLOWANCE.  Subject to the terms and conditions
of this Addendum, Landlord shall pay to Tenant an amount not in excess of       
$104,268.00 (the "Tenant Improvement Allowance") on account of all              
construction costs, space planning and design fees, architecture and            
engineering fees, permit fees and construction management fees (including       
Landlord's construction management fee) incurred by Tenant in designing         
and constructing the Tenant Improvements in the Premises.  In no event          
shall Tenant be entitled to any cash payment, credit, offset or other           
benefit whatsoever based on any excess of the Tenant Improvement Allowance      
over the actual costs of the construction and installation of the Tenant        
Improvements.                                                                   

4.2   TENANT'S COST.  Any cost incurred in the design or  
construction of the Tenant Improvements in excess of the Tenant                 
Improvement Allowance shall be borne by Tenant in accordance with the           
terms and conditions set forth below.  Prior to the construction of the         
Tenant Improvements, Tenant shall cause its general contractor to submit        
an estimate of the total cost of constructing the Tenant Improvements.  In      
the event that the aggregate of the cost estimated by Tenant's general          
contractor and the cost of designing the Tenant Improvements                    
(collectively, the "Improvements Cost") exceeds the Tenant Improvement          
Allowance, Landlord and Tenant shall determine Landlord's share of the          
Improvements Cost ("Landlord's Share") and Tenant's share of the                
Improvements Cost ("Tenant's Share") as follows:                                

           (a)   Landlord's Share shall be a fraction, the numerator
of which is the Tenant Improvement Allowance, and the denominator of which      
is the Improvements Cost.                                                       

         (b)   Tenant's Share shall be a fraction, the numerator
of which is the portion of the Improvements Cost that exceeds the Tenant        
Improvement Allowance, and the denominator of which is the Improvements         
Cost.                                                                           

        (c)   Prior to the commencement of construction of the
Tenant Improvements, Tenant shall deposit in a separate bank account            
("Tenant's Construction Account") funds equal to Tenant's Share of the          
Improvements Cost and shall deliver to Landlord reasonable evidence of the      
establishment of Tenant's Construction Account and the deposit therein of       
Tenant's Share of the Improvements Cost.  Tenant's Construction Account         
shall be used only for the purpose of funding Tenant's Share of the             
Improvements Cost, and Tenant shall instruct the bank maintaining Tenant's      
Construction Account to send to Landlord duplicate statements of each           
disbursement or withdrawal from Tenant's Construction Account.  In the          
event of any change order or other event which would increase the               
Improvements Cost, Tenant's Share shall be appropriately adjusted to            
reflect the increase in the Improvements Cost, and Tenant shall promptly        
deposit sufficient funds into Tenant's Construction Account to equal the        
then outstanding unpaid amount of Tenant's Share of such increased              
Improvements Cost.                                                              

4.3   PROCEDURE FOR DISBURSEMENT OF THE TENANT IMPROVEMENT
ALLOWANCE.  On or before the twenty-fifth (25th) day of each calendar           
month during the construction of the Tenant Improvements, but in no event       
more frequently than once every thirty (30) days, Tenant shall deliver to       
Landlord such invoices marked paid and other evidence as Landlord shall         
reasonably require of the cost of the design of the Tenant Improvements         
and the cost of the Tenant Improvements already constructed and Landlord        
shall pay within forty-five (45) days of confirmation of such amount            
Landlord's Share of each amount invoiced by Tenant's architect or Tenant's      
general contractor; provided, however, that such invoices and other             
evidence shall not be submitted by Tenant to Landlord until all of the          
following, if appropriate, have occurred:  (i) Landlord has reasonably and      
timely determined that all of the Tenant Improvements constructed to date       
have been satisfactorily completed in accord-ance with the Construction         
Documents, based upon certifications satisfactory to Landlord delivered by      
Tenant and Tenant's architect; and (ii) Tenant has delivered to Land-lord       
unconditional partial lien releases from the general contractor and each        
subcontractor.  Following substantial completion of the Tenant                  
Improvements and prior to Landlord's final disbursement of the Tenant           
Improvement Allowance (which shall include a retention of ten percent           
(10%) of the Tenant Improvement Allowance), Tenant shall comply with the        
requirements set forth in Section 3.8 above, together with the following:       
(a) Tenant shall have submitted to Landlord a cost breakdown of Tenant's        
final and total construction costs incurred in connection with the Tenant       
Improvements, together with receipted invoices showing evidence of full         
payment therefor; (b) Tenant shall have completed Landlord's punchlist          
items, which list shall be provided by Landlord to Tenant in accordance         
with Section 5 below; and (c) the Lease shall be in full force and effect       
and there shall exist no event of default under the Lease or this               
Addendum, and no condition, event or act which, with the passage of time        
or the giving of notice, or both, would constitute an event of default          
under the Lease or this Addendum.  Notwithstanding any provision hereof to      
the contrary, the Tenant Improvement Allowance is available only to             
reimburse Tenant to the extent of qualified applications, if any, for           
reimbursement which meet all the requirements of this Addendum and which        
are submitted by Tenant to Landlord within one year after the date of the       
Lease, and Landlord has no obligation to pay or fund any balance of the         
Tenant Improvement Allowance in excess of the total of qualified                
applications, if any, submitted by such date and such remaining amount          
shall be retained by Landlord as its property free of any claim by Tenant       
to such amount.                                                                 

     4.4   CONSTRUCTION MANAGEMENT.  Insignia Commercial Group, Inc.
shall be retained by Landlord to supervise the construction of the Tenant       
Improvements.  A construction management fee, in an amount not to exceed        
the lesser of (a) Ten Thousand Dollars or (b) two percent (2.0 %) of the        
total amount of the construction contract(s) with Tenant's general              
contractor(s) for all the work in connection with construction of the           
Tenant Improvements, shall be payable out of the Tenant Improvement             
Allowance.                                                                      

5.   WALK-THROUGH OF TENANT IMPROVEMENTS.  Within two (2) business  
days following the completion of the Tenant Improvements, Tenant shall          
notify Landlord of the completion thereof and shall provide Landlord an         
opportunity to inspect the Tenant Improvements.  Within ten (10) business       
days following Tenant's notice, Landlord (or its representative) shall          
walk-through and inspect Tenant's work on the Tenant Improvements and           
shall either approve Tenant's work or advise Tenant in writing of any           
defects or uncompleted items.  Tenant shall promptly repair such defects        
or uncompleted items to Landlord's reasonable satisfaction.  Landlord's         
approval of the Tenant Improvements, or Landlord's failure to advise            
Tenant of any defects or uncompleted items in the Tenant Improvements,          
shall not relieve Tenant of responsibility for constructing and installing      
the Tenant Improvements in accordance with the Final Plans and this             
Addendum, and in compliance with all applicable laws.                           

6.   NATURE OF IMPROVEMENTS.  The ownership of the Tenant           
Improvements shall be governed by Paragraph 7 of the Lease, with the            
Tenant Improvements constituting "alterations, additions, or improvements"      
to or of the Premises as used thereunder.                                       

7.   DEFAULT.  Each of the following events shall constitute an     
event of default ("Default") under this Addendum:                               

     (a)   Failure to comply with those conditions set forth in this
Addendum which are required to be fulfilled by Tenant prior to the              
commencement and installation of Tenant Improvements;                           

   (b)   Failure to commence and/or complete construction of the
Tenant Improvements in compliance with this Addendum;                           

(c)   Deviations in construction from the Final Plans (as 
determined by Landlord or its representative) without the approval of           
Landlord, the appearance of defective workmanship or materials in the           
construction of the Tenant Improvements which are not corrected by Tenant       
within thirty (30) days after notice from Landlord (or if the defect is         
such that it cannot reasonably be corrected within said thirty (30) day         
period, the correction of such defect is not initiated by Tenant within         
said thirty (30) day period and thereafter prosecuted diligently to             
completion), or any other failure by Tenant to complete construction and        
installation of the Tenant Improvements in accordance with the conditions       
set forth in this Addendum; and                                                 

   (d)   The default or breach by Tenant of any provision of the
Lease.                                                                          

8.   REMEDIES.  In the event of a default by Tenant hereunder,      
Landlord shall thereafter have no further obligation to disburse any            
portion of the Tenant Improvement Allowance unless and until such default       
is cured, and any such default shall be a default under the Lease and           
shall entitle Landlord to exercise all remedies set forth in the Lease.         
In addition, upon the occurrence of a default by Tenant hereunder,              
Landlord shall have the right (but not the obligation), at Tenant's sole        
cost and expense, to enter upon the Premises and take over and complete         
construction and installation only as to those areas where the                  
construction or installation of the Tenant Improvements has been commenced      
and such other areas to the extent necessary to relet the Premises, and to      
make disbursements from the Tenant Improvement Allowance toward completion      
of the Tenant Improvements.  In connection therewith, Landlord may              
discharge or replace the contractors or subcontractors performing such          
work.  In no event shall Landlord be required to expend its own funds to        
complete the Tenant Improvements if the Tenant Improvement Allowance is         
insufficient.  Where substantial deviations from the Final Plans have           
occurred which have not been approved by Landlord, or defective or              
unworkmanlike labor or materials are being used in construction of the          
Tenant Improvements, Landlord shall have the right to demand that such          
labor or materials be corrected, and if the same are not so corrected,          
shall have the right to immediately order the stoppage of all construction      
until such condition is corrected.  After issuance of such an order in          
writing, no further work shall be done on the Tenant Improvements without       
the prior written consent of Landlord unless and until said condition has       
been fully corrected.                                                           

9.   MISCELLANEOUS.  Time is of the essence of this Addendum.  The  
invalidity or unenforceability of any one or more provisions of this            
Addendum will in no way affect the validity or enforceability of any other      
provision.  This Addendum and the Lease to which this Addendum is attached      
constitute the entire agreement of the parties with respect to the subject      
matter hereof.  This Addendum may not be modified or amended except by a        
written agreement signed by Landlord and Tenant.  The captions of the           
paragraphs of this Addendum are for convenience and reference only, and in      
no way modify, amplify or interpret the provisions of this Addendum.            

10.  ATTORNEYS' FEES.  If any action or proceeding is commenced to  
enforce the provisions of this Addendum, the prevailing party in such           
action or proceeding will have the right to recover from the other party        
its reasonable attorneys' fees and costs and expenses of litigation.            

11.  CONFLICT.  In the event of any conflict between the terms of   
the Lease and the terms of this Addendum concerning the construction of         
the Tenant Improvements, the terms of this Addendum shall prevail.              

LANDLORD:                                                                       

Metropolitan Life Insurance Company,                                            
a New York corporation                                                          

By:  /s/Edward J. Hayes                                                         
-----------------------------------                                   

Its: Assistant Vice President                                                   
-----------------------------------                                   

TENANT:                                                                         

Advanced Polymer Systems,                                                       
a Delaware corporation                                                          

By:  /s/Michael O'Connell                                                       
-----------------------------------                                   

Its: Executive VP/CFO                                                           
-----------------------------------                                   

EX-10.E
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EXHIBIT A         

This exhibit includes a floor plan of construction improvements to the          
original premises.                                                              

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-K’ Filing		Date		First		Last			Other Filings
Filed on:		3/30/98							11-K
For Period End:		12/31/97							11-K
		11/15/97		3
		11/7/97		3		15
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