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LEASE

BETWEEN

METROPOLITAN LIFE INSURANCE COMPANY (LANDLORD)

AND

CODEXIS, INC. (TENANT)

SEAPORT CENTRE

Redwood City, California

TABLE OF CONTENTS

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ii

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LEASE

ARTICLE ONE

BASIC LEASE PROVISIONS

In the event of any conflict between these Basic Lease Provisions and any other Lease provision, such other Lease provision shall control.

220 Penobscot Drive (17,627 sq. ft.)

Redwood City, California 94063

Building Number 4, located in Phase 1 of Seaport Centre

and

501 Chesapeake Drive (11,158 sq. ft.)

Redwood City, California 94063

Building Number 3, located in Phase 1 of Seaport Centre

and

200 Penobscot Drive (10,597 sq. ft.)

Redwood City, California 94063

Building Number 4, located in Phase 1 of Seaport Centre

Metropolitan Life Insurance Company,

a New York corporation

Notices to Landlord shall be addressed:

Metropolitan Life Insurance Company

c/o Seaport Centre Manager

701 Chesapeake Drive

Redwood City, CA 94063

with copies to the following:

Metropolitan Life Insurance Company

400 South EI Camino Real, Suite 800

San Mateo, CA 94402

Attention: Assistant Vice President

Tenant shall notify Landlord of any change in the foregoing.

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Notices to Tenant shall be addressed:

Codexis, Inc.

200 Penobscot Drive

Redwood City, California 94063

Attention: Tassos Gianakakos

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Landlord’s Broker:              Cornish & Casey Commercial

Tenant’s Broker:                  CB Richard Ellis CRESA

The Exhibits set forth below and attached to this Lease are incorporated in this Lease by this reference:

EXHIBIT A Plan of Premises

EXHIBIT B Workletter Agreement (intentionally omitted)

EXHIBIT C Site Plan of Project

EXHIBIT D Permitted Hazardous Material

EXHIBIT E Maxygen Improvements

EXHIBIT F Approved Providers

EXHIBIT G Tenant’s Improvements

EXHIBIT H Form of Landlord’s Consent to Lease of Personal Property

For purposes hereof, the following terms shall have the following meanings:

ADJUSTMENT YEAR: The applicable calendar year or any portion thereof after the Commencement Date of this Lease for which a Rent Adjustment computation is being made.

AFFILIATE: Any Person (as defined below) which is currently owned or controlled by, owns or controls, or is under common ownership or control with Tenant. For purposes of this definition, the word “control,” as used above means, with respect to a Person that is a corporation, the right to exercise, directly or indirectly, more than sixty percent (60%) of the voting rights attributable to the shares of the controlled corporation and, with respect to a Person that is not a corporation, the possession, directly or indirectly, of the power at all times to direct or cause the direction of the management and policies of the controlled Person. The word Person means an individual, partnership, trust, corporation, firm or other entity.

BUILDING: Each building in which the Premises is located, as specified in Section 1.01(1).

BUILDING OPERATING EXPENSES: Those Operating Expenses described in Section 4.01.

COMMENCEMENT DATE: The date specified in Section 1.01(6) as the Commencement Date, unless changed by operation of Article Two.

COMMON AREAS: All areas of the Project made available by Landlord from time to time for the general common use or benefit of the tenants of the Building or Project, and their employees and invitees, or the public, as such areas currently exist and as they may be changed from time to time.

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DECORATION: Tenant Alterations which do not require a building permit and which do not affect the facade or roof of the Building, or involve any of the structural elements of the Building, or involve any of the Building’s systems, including its electrical, mechanical, plumbing, security, heating, ventilating, air-conditioning, communication, and fire and life safety systems.

DEFAULT RATE: Two (2) percentage points above the rate then most recently announced by Bank of America N.T.& S.A. at its San Francisco main office as its corporate base lending rate, from time to time announced, but in no event higher than the maximum rate permitted by Law.

DELIVERY DATE: The date for Landlord’s delivery to Tenant of possession of the Premises, if different from the Commencement Date.

ENVIRONMENTAL LAWS: All Laws governing the use, storage, disposal or generation of any Hazardous Material or pertaining to environmental conditions on, under or about the Premises or any part of the Project, including the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et seq.), and the Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C. Section 6901 et seq.).

EXPIRATION DATE: The date specified in Section 1.01(7) unless changed by operation of Article Two.

FORCE MAJEURE: Any accident, casualty, act of God, war or civil commotion, strike or labor troubles, or any cause whatsoever beyond the reasonable control of Landlord, including water shortages, energy shortages or governmental preemption in connection with an act of God, a national emergency, or by reason of Law, or by reason of the conditions of supply and demand which have been or are affected by act of God, war or other emergency.

HAZARDOUS MATERIAL: Such substances, material and wastes which are or become regulated under any Environmental Law; or which are classified as hazardous or toxic or medical waste or biohazardous waste under any Environmental Law; and explosives, firearms and ammunition, flammable material, radioactive material, asbestos, polychlorinated biphenyls and petroleum and its byproducts.

INDEMNITEES: Collectively, Landlord, any Mortgagee or ground lessor of the Property, the property manager and the leasing manager for the Property and their respective directors, officers, agents and employees.

LAND: The parcel(s) of real estate on which the Building and Project are located.

LANDLORD WORK: (intentionally omitted)

LAWS OR LAW: All laws, ordinances, rules, regulations, other requirements, orders, rulings or decisions adopted or made by any governmental body, agency, department or judicial authority having jurisdiction over the Property, the Premises or Tenant’s activities at the Premises and any covenants, conditions or restrictions of record which affect the Property.

LEASE: This instrument and all exhibits attached hereto, as may be amended from time to time.

LEASE YEAR: The twelve month period beginning on the first day of the first month following the Commencement Date (unless the Commencement Date is the first day of a calendar month in which case beginning on the Commencement Date), and each subsequent twelve month, or shorter, period until the Expiration Date.

MONTHLY BASE RENT: The monthly rent specified in Section 1.01(8).

MORTGAGEE: Any holder of a mortgage, deed of trust or other security instrument encumbering the Property.

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NATIONAL HOLIDAYS: New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day and other holidays recognized by the Landlord and the janitorial and other unions servicing the Building in accordance with their contracts.

OPERATING EXPENSES: All Taxes, costs, expenses and disbursements of every kind and nature which Landlord shall pay or become obligated to pay in connection with the ownership, management, operation, maintenance, replacement and repair of the Property (including the amortized portion of any capital expenditure or improvement, together with interest thereon, expenses of changing utility service providers, and any dues, assessments and other expenses pursuant to any covenants, conditions and restrictions, or any reciprocal easements, or any owner’s association now or hereafter affecting the Project). Operating Expenses shall be allocated among the categories of Project Operating Expenses, Building Operating Expenses or Phase Operating Expenses as provided in Article Four. If any Operating Expense, though paid in one year, relates to more than one calendar year, at the option of Landlord such expense may be proportionately allocated among such related calendar years (it being understood that those specific items of repairs and replacements, which under Generally Accepted Accounting Principles should be classified as capital expenditures, except that if such repair or replacement is of such a nature that it should be considered under Generally Accepted Accounting Principles a deferred expense and spread over a period of not more than ten (10) years, Operating Expenses for a year shall include the proportionate share of such deferred expense appropriately allocated to such year). Operating Expenses shall include the following, by way of illustration only and not limitation: (1) all Taxes; (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 preventive maintenance; (6) all janitorial, landscaping and security services; (7) all wages, salaries, payroll taxes, fringe benefits and other labor costs of employees who devote substantially all of his or her time to the Building or Project, 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, assessments and other expenses pursuant to any covenants, conditions and restrictions, or any reciprocal easements, or any owner’s association now or hereafter affecting the Project; (11) modifications to the Building or the Project occasioned by Laws now or hereafter in effect; (12) the total charges of any independent contractors employed in the care, operation, maintenance, repair, leasing and cleaning of the Project, including 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) exterior 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 Material, and retention of consultants in connection with the clean-up of Hazardous Material (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 Material on, under or about the Premises or the Project (to the extent not recoverable from a particular tenant of the Project), but only to the extent applicable to Tenant and its use of the Premises; (18) all capital improvements made for the purpose of reducing or controlling other Operating Expenses, and all other capital expenditures, but only as amortized over such reasonable period as Landlord shall determine, together with interest thereon; (19) all property management costs and fees, including all costs 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. Notwithstanding the foregoing, Operating Expenses shall not include: (a) costs of alterations of space to be occupied by new or existing tenants of the Project; (b) depreciation charges; (c) interest and principal payments on loans (except for loans for capital expenditures or improvements which Landlord is allowed to include in Operating Expenses as provided above); (d) ground rental payments; (e) real estate brokerage and leasing commissions; (f) advertising and marketing expenses; (g) costs of Landlord reimbursed by insurance proceeds; (h) expenses incurred in negotiating leases of other tenants in the Project or enforcing lease obligations of other tenants in the Project; (i) Landlord’s or Landlord’s property manager’s corporate general

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overhead or corporate general administrative expenses; (j) costs of correcting defects in or inadequacy of the initial design or construction of the Building or Property; (k) costs of a capital nature, including, without limitation, capital improvements, capital repairs, capital equipment and capital tools, all as determined in accordance with generally acceptable accounting principles; (l) any late fees, fines, penalties and interest on past due amounts incurred by Landlord; (m) expenses directly resulting from the gross negligence or willful misconduct of Landlord, its agents or employees; and (n) any cost (such as repairs, improvements, electricity, special cleaning or overtime services) to the extent such costs are expressly reimbursed to Landlord by tenants (as opposed to partial reimbursement in the nature of rent escalation provisions) or are separately charged to and payable by tenants.

“Operating Expenses” shall be reduced by all cash discounts, trade discounts or quantity discounts received by Landlord or Landlord’s managing agent in the purchase of any goods, utilities or services in connection with the operation of the Property.

PHASE: Phase means any individual Phase of the Project, as more particularly described in the definition of Project.

PHASE OPERATING EXPENSES: Those Operating Expenses described in Section 4.01.

PREMISES: The space located in the Buildings at the Suite Numbers listed in Section 1.01(15) and depicted on Exhibit A attached hereto. The Premises shall consist of 501 Chesapeake Drive (“Space A”), 220 Penobscot Drive (“Space B”) and 200 Penobscot Drive (“Space C”).

PROJECT or PROPERTY: As of the date hereof, the Project is known as Seaport Centre and consists of those buildings (including the Building) whose general location is shown on the Site Plan of the Project attached as Exhibit C, located in Redwood City, California, associated vehicular and parking areas, landscaping and improvements, together with the Land, any associated interests in real property, and the personal property, fixtures, machinery, equipment, systems and apparatus located in or used in conjunction with any of the foregoing. The Project may also be referred to as the Property. As of the date hereof, the Project is divided into Phase I and Phase II, which are generally designated on Exhibit C, each of which may individually be referred to as a Phase. Landlord reserves the right from time to time to add or remove buildings, areas and improvements to or from a Phase or the Project, or to add or remove a Phase to or from the Project. In the event of any such addition or removal which affects the Total Rentable Area of the Project or a Phase, Landlord shall make a corresponding recalculation and adjustment of any affected Tenant’s Rentable Area and Tenant’s Share.

PROJECT OPERATING EXPENSES: Those Operating Expenses described in Section 4.01.

REAL PROPERTY: The Property excluding any personal property.

RENT: Collectively, Monthly Base Rent, Rent Adjustments and Rent Adjustment Deposits, and all other charges, payments, late fees or other amounts required to be paid by Tenant under this Lease.

RENT ADJUSTMENT: Any amounts owed by Tenant for payment of Operating Expenses. The Rent Adjustments shall be determined and paid as provided in Article Four.

RENT ADJUSTMENT DEPOSIT: An amount equal to Landlord’s estimate of the Rent Adjustment attributable to each month of the applicable Adjustment Year. On or before the Commencement Date and the beginning of each subsequent Adjustment Year or with Landlord’s Statement (defined in Article Four), Landlord may estimate and notify Tenant in writing of its estimate of Operating Expenses, including Project Operating Expenses, Building Operating Expenses and Phase Operating Expenses, and Tenant’s Share of each, for the applicable Adjustment Year. The Rent Adjustment Deposit applicable for the calendar year in which the Commencement Date occurs shall be the amount, if any, specified in Section 1.01(9). Nothing contained herein shall be construed to limit the right of Landlord from time to time during any calendar year to revise its estimates of Operating Expenses and to notify Tenant in writing thereof and of revision by prospective adjustments in Tenant’s Rent Adjustment Deposit payable over the remainder of such year. The last estimate by Landlord shall remain in effect as the applicable Rent Adjustment Deposit unless and until Landlord notifies Tenant in writing of a change.

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SECURITY DEPOSIT: The funds specified in Section 1.01(16), if any, deposited by Tenant with Landlord as security for Tenant’s performance of its obligations under this Lease.

TAXES: All federal, state and local governmental taxes, assessments (including assessment bonds) and charges of every kind or nature, whether general, special, ordinary or extraordinary, which Landlord shall pay or become obligated to pay because of or in connection with the ownership, leasing, management, control or operation of the Property or any of its components (including any personal property used in connection therewith), which may also include any rental or similar taxes levied in lieu of or in addition to general real and/or personal property taxes. For purposes hereof, Taxes for any year shall be Taxes which are assessed for any period of such year, whether or not such Taxes are billed and payable in a subsequent calendar year. There shall be included in Taxes for any year the amount of all fees, costs and expenses (including reasonable attorneys’ fees) paid by Landlord during such year in seeking or obtaining any refund or reduction of Taxes, but not to exceed any tax savings resulting from such contest. Taxes for any year shall be reduced by the net amount of any tax refund received by Landlord attributable to such year. If a special assessment payable in installments is levied against any part of the Property, Taxes for any year shall include only the installment of such assessment and any interest payable or paid during such year. Taxes shall not include any federal or state inheritance, general income, franchise, gift or estate taxes, except that if a change occurs in the method of taxation resulting in whole or in part in the substitution of any such taxes, or any other assessment, for any Taxes as above defined, such substituted taxes or assessments shall be included in the Taxes. In addition, Landlord shall be solely responsible for penalties or other charges for late payment of taxes.

TENANT ADDITIONS: Collectively, Tenant Work and Tenant Alterations, but not including Tenant’s Personal Property.

TENANT ALTERATIONS: Any alterations, improvements, additions, installations or construction in or to the Premises or any Real Property systems serving the Premises done or caused to be done by Tenant after the date hereof, whether prior to or after the Commencement Date.

TENANT DELAY: (intentionally omitted)

TENANT WORK: All work installed or furnished to the Premises by Tenant in connection with Tenant’s initial occupancy.

TENANT’S BUILDING SHARE: The share as specified in Section 1.01(18) and Section 4.01.

TENANT’S PERSONAL PROPERTY: All movable personal property of Tenant and Tenant’s trade fixtures (including without limitation, any autoclaves, hoods, animal facility, fermentors, casework, cold rooms, generators, equipment, furniture, furnishings, telephone equipment, and cabling for any of the foregoing), the costs of which were not paid for by any portion of Landlord’s Contribution.

TENANT’S PHASE: Phase I.

TENANT’S PHASE SHARE: The share as specified in Section 1.01(18) and Section 4.01.

TENANT’S PROJECT SHARE: The share as specified in Section 1.01(18) and Section 4.01.

TENANT’S RENTABLE AREA OF THE BUILDING: The amount of square footage set forth in Section 1.01(11)

TENANT’S RENTABLE AREA OF THE PREMISES: The amount of square footage set forth in Section 1.01(10).

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TENANT’S SHARE: Shall mean collectively, Tenant’s respective shares of the respective categories of Operating Expenses, as provided in Section 1.01(18) and Section 4.01.

TERM: The term of this Lease commencing on the Commencement Date and expiring on the Expiration Date.

TERMINATION DATE: The Expiration Date or such earlier date as this Lease terminates or Tenant’s right to possession of the Premises terminates.

TOTAL RENTABLE AREA OF BUILDING 3: The amount of square footage set forth in Section 1.01(14).

TOTAL RENTABLE AREA OF BUILDING 4: The amount of square footage set forth in Section 1.01(15).

TOTAL RENTABLE AREA OF PHASE I: The amount of square footage set forth in Section 1.01(12)

TOTAL RENTABLE AREA OF THE PROJECT: The amount of square footage set forth in Section 1.01(13), which represents the sum of the rentable area of all space intended for occupancy in the Project.

WORKLETTER: (intentionally omitted)

ARTICLE TWO

PREMISES, TERM, FAILURE TO GIVE POSSESSION, COMMON AREAS AND PARKING

Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the Premises for the Term and upon the terms, covenants and conditions provided in this Lease.

The Commencement Date shall be February 1, 2004 and Landlord shall deliver possession of (a) Space A on December 10, 2003 (the “First Delivery Date”); (b) Space B on February 1, 2004 (the “Second Delivery Date”); and (c) Space C on February 25, 2005 (the “Third Delivery Date”) for the purposes of performing the Tenant Work.

Tenant acknowledges that it currently has possession of Space A pursuant to its affiliation with the current subtenant of said Space A, however, Tenant’s right to do any Tenant Work (as hereinafter defined) in Space A prior to the First Delivery Date is contingent upon Landlord obtaining the prior written consent of Cygnus, Inc., the current tenant of Space A. If the Landlord shall be unable to give direct possession of Space A on the First Delivery Date or Space B on the Second Delivery Date by reason of the following: (i) the holding over or retention of possession of any tenant, tenants or occupants, or (ii) for any other reason, then Landlord shall not be subject to any liability for the failure to give possession on said date. Under such circumstances the Commencement Date shall be delayed by a number of days equal to the days of delay in Landlord’s delivery of possession to Tenant. No such failure to give possession on the First Delivery Date or the Second Delivery Date shall affect the validity of this Lease or the obligations of the Tenant hereunder.

If the Landlord shall be unable to give possession of Space C on the Third Delivery Date by reason of the following: (i) the holding over or retention of possession of any tenant, tenants or occupants, or (ii) for any other reason, then Landlord shall not be subject to any liability for the failure to give possession on said date. Under such circumstances the increase in Monthly Base Rent scheduled for June 1, 2005 pursuant to the provisions of Section 1.01(8) of this Lease with respect only to the increased square footage (and not the rate for the then current square footage) shall be delayed by a number of days equal to the days of delay in Landlord’s delivery of possession to Tenant. No such failure to give possession on the Third Delivery Date shall affect the validity of this Lease or the obligations of the Tenant hereunder.

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Landlord and Tenant agree that for all purposes of this Lease Tenant’s Rentable Area of the Premises, Tenant’s Rentable Area of the Building, the Total Rentable Area of Phase I, the Total Rentable Area of the Project, the Total Rentable Area of Building 3 and the Total Rentable Area of Building 4 as set forth in Article One are controlling, and are not subject to revision after the date of this Lease.

In no event shall Landlord’s Contribution be used to reimburse any costs of designing, procuring or installing in the Premises Tenant’s Personal Property, and the cost of such Tenant’s Personal Property shall be paid by Tenant. Landlord’s Contribution shall be payable by Landlord to Tenant no more often than monthly for costs based upon the percentage of work completed prior to the date of the request for payment and any balance so payable shall be paid within 30 days after Landlord’s receipt of Tenant’s request for payment. In each such request, Tenant shall submit to Landlord copies of all invoices and Tenant shall certify that it has paid such invoices, that such request represents costs reimbursable to Tenant for work performed prior to the date of the request, that there are no known mechanic’s or materialmen’s liens outstanding at the date of a request, that there is no known basis for the filing of any mechanic’s or materialmen’s liens relating to the work, and that waivers from all subcontractors, mechanics and materialmen have been obtained in such form as to constitute an effective waiver of lien under the laws of the State of California. Tenant shall provide Landlord copies of such waivers. Notwithstanding the foregoing, Tenant shall not request an advance of a portion of Landlord’s Contribution in an amount which is less than

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$50,000 unless such advance is the final advance to be made hereunder, or Tenant has not requested an advance in the past 60 days. Tenant shall keep full and correct accounts and shall exercise such control as may be necessary or appropriate for the proper financial management of the construction of Tenant Work separately identified as to each of Space A, Space B and Space C or, if the work is done under separate contracts or in smaller separate identifiable segments or phases, then upon completion of and with respect to each separate contract or phase). The final payment of Landlord’s Contribution shall be paid to Tenant within 30 days after the later of final completion of the Tenant Work and Landlord’s receipt of (i) a certificate of occupancy (if applicable), (ii) final as-built plans and specifications, (iii) full, final, unconditional lien releases, and (iv) reasonable substantiation of costs incurred by Tenant with respect to the Tenant Work. Tenant must prior to expiration of nine months after the Commencement Date submit written request with the items required above for disbursement or reimbursement for any reimbursable costs out of the Landlord’s Contribution, and to the extent of any funds for which request has not been made prior to that date or if and to the extent that the reimbursable costs of the Tenant Work are less than the amount of Landlord’s Contribution, then Landlord shall retain the unapplied or unused balance of the Landlord’s Contribution and shall have no obligation or liability to Tenant with respect to such excess. If the costs of completing the Tenant Work exceeds the First Contribution or the Second Contribution, Tenant shall pay all such costs. After completion of Tenant Work, Tenant shall provide Landlord with a reasonably detailed breakdown of the allocation of the Landlord’s Contribution. Until the expiration of eighteen (18) months after Tenant delivers to Landlord the final request for payment of Landlord’s Contribution, Landlord, through its Building manager, employees and/or independent accounting firm, shall be afforded reasonable access at the Premises from time to time during normal business hours after reasonable advance written or oral notice, to Tenant’s records, books, correspondence, instructions, drawings, receipts, invoices, purchase orders, agreements (including with contractors, subcontractors and suppliers), vouchers and other information relating to Tenant Work and the use of Landlord’s Contribution for the purpose of reviewing, auditing and/or copying such material. Such copying and inspection shall be at Landlord’s sole cost.

(c) Tenant’s cost of the Tenant Work shall include a fee of two percent (2%) of Landlord’s Contribution which shall be retained by Landlord as compensation for supervising the Tenant Work (“Landlord’s Construction Management Fee”).

(d) Tenant shall be responsible for the suitability for the Tenant’s needs and business of the design and function of all Tenant Work and for its construction in compliance with all Law as applicable and as interpreted at the time of construction of the Tenant Work, including all building codes and the ADA (as defined in the Lease). Tenant, through its architects and/or space planners (“Tenant’s Architect”), shall prepare all architectural plans and specifications, and engineering plans and specifications, for the real property improvements to be constructed by Tenant in the Premises in sufficient detail to be submitted for approval by Landlord to the extent required pursuant to Article Nine of the Lease and to be submitted by Tenant for governmental approvals and building permits and to serve as the detailed construction drawings and specifications for the contractor, and shall include, among other things, all partitions, doors, heating, ventilating and air conditioning installation and distribution, ceiling systems, light fixtures, plumbing installations, electrical installations and outlets, telephone installations and outlets, any other installations required by Tenant, fire and life-safety systems, wall finishes and floor coverings, whether to be newly installed or requiring changes from the as-is condition of the Premises as of the date of execution of the Lease. Tenant shall be responsible for the oversight, supervision and construction of all Tenant Work in compliance with this Lease, including compliance with all Law as applicable and as interpreted at the time of construction, including all building codes and the ADA.

(e) Tenant hereby acknowledges that all improvements installed in the Premises by Tenant under this Section 2.05 shall, without compensation or credit to Tenant, become part of the Premises and the property of Landlord at the time of their installation and shall remain in the Premises, unless pursuant to an agreement between the parties hereto, Tenant may remove them or is required to remove them at Landlord’s request.

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(a) Right to Use Common Areas. 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 Areas in the Project. The rights of Tenant hereunder in and to the Common Areas 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 Areas free and clear of any obstructions created or permitted by Tenant or resulting from Tenant’s operations. Tenant shall not use the Common Areas or common facilities of the Building or the Project, including 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 Areas or common facilities from such areas or facilities or to prevent their use by unauthorized persons.

Tenant shall in addition have the nonexclusive right, in common with Landlord and any tenant or other user of all or any portion of the remainder of Building 3 (the “Adjacent Space”) to use the area designated on Exhibit A-1 as the common areas (“Building Common Areas”). In addition to Tenant’s obligations as set forth in this Lease, Tenant shall repair and maintain the Building Common Areas and keep the Building Common Areas clean at all times, the cost thereof to be shared between Tenant and any other tenant in Building 3 (“Adjacent Tenant”), based on relative square footage leased from Landlord under the applicable leases. Landlord agrees to provide in any lease with an Adjacent Tenant, that such Adjacent Tenant shall reimburse Tenant for the Adjacent Tenant’s share of such repair, maintenance and cleaning costs incurred by Tenant for the Building Common Areas pursuant to this paragraph. Tenant shall be solely responsible for collecting any amounts owed for such costs directly from the Adjacent Tenants.

(b) Changes in Common Areas. Landlord reserves the right, at any time and from time to time to (i) make alterations in or additions to the Common Areas or common facilities of the Project, including 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 common facilities of the Project, (iii) close temporarily any of the Common Areas or common facilities of the Project for maintenance purposes, and (4) use the Common Areas and common 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 and that any closure of Common Areas shall be for the minimum amount of time necessary.

(c) Parking. During the Term, Tenant shall have the right to use the number of Parking Spaces specified in Section 1.01(18) for parking on an unassigned basis on that portion of the Project designated by Landlord from time to time for parking. Tenant acknowledges and agrees that the parking spaces in the Project’s parking facility may include a mixture of spaces for compact vehicles as well as full-size passenger automobiles, and that Tenant shall not use parking spaces for vehicles larger than the striped size of the parking spaces. Tenant shall not park any vehicles at the Project overnight. Tenant shall comply with any and all parking rules and regulations if and as from time to time established by Landlord and delivered to Tenant. Tenant shall not allow any vehicles using Tenant’s parking privileges to be parked, loaded or unloaded except in accordance with this Section, including in the areas and in the manner designated by Landlord for such activities. If any vehicle is using the parking or loading areas contrary to any provision of this Section, Landlord shall have the right, in addition to all other rights and remedies of Landlord under this Lease, to remove or tow away the vehicle without prior notice to Tenant, and the cost thereof shall be paid to Landlord within ten (10) days after notice from Landlord to Tenant.

ARTICLE THREE

RENT

Tenant agrees to pay to Landlord at the first office specified in Section 1.01(2), or to such other persons, or at such other places designated by Landlord, without any prior demand therefor in immediately available funds and without any deduction or offset whatsoever, Rent, including Monthly Base Rent and Rent Adjustments in accordance with Article Four, during the Term. Monthly Base Rent shall be paid monthly in advance on the first day of each month of the Term, except that the first installment of Monthly Base Rent shall be paid by Tenant to Landlord concurrently with execution of this Lease. Monthly Base Rent shall be prorated for partial months within the Term. Unpaid Rent shall bear interest at the Default Rate from the date due until paid. Tenant’s covenant to pay Rent shall be independent of every other covenant in this Lease.

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ARTICLE FOUR

OPERATING EXPENSES, RENT ADJUSTMENTS AND PAYMENTS

Tenant shall pay Tenant’s Share of Operating Expenses in the respective shares of the respective categories of Operating Expenses as set forth below.

(a) Tenant’s Project Share of Project Operating Expenses, which is the percentage obtained by dividing the rentable square footage of the Premises for the building(s) in which the Premises is located by the rentable square footage of the Project and as of the date hereof equals the percentage set forth in Section 1.01(16);

(b) Tenant’s Building Share of Building Operating Expenses, which is the percentage obtained by dividing the rentable square footage of the Premises respectively for each building in which the Premises is located by the total rentable square footage of such building and as of the date hereof equals the percentage set forth in Section 1.01(16);

(c) Tenant’s Phase Share of Phase Operating Expenses, which is the percentage obtained by dividing the aggregate rentable square footage of the Premises located in Tenant’s Phase by the total rentable square footage of Tenant’s Phase and as of the date hereof equals the percentage set forth in Section 1.01(16);

(d) Project Operating Expenses shall mean all Operating Expenses that are not included as Phase Operating Expenses (defined below) and that are not either Building Operating Expenses or operating expenses directly and separately identifiable to the operation, maintenance or repair of any other building located in the Project, but Project Operating Expenses includes operating expenses allocable to any areas of the Building or any other building during such time as such areas are made available by Landlord for the general common use or benefit of all tenants of the Project, and their employees and invitees, or the public, as such areas currently exist and as they may be changed from time to time;

(e) Building Operating Expenses shall mean Operating Expenses that are directly and separately identifiable to each building in which the Premises or part thereof is located;

(f) Phase Operating Expenses shall mean Operating Expenses that Landlord may allocate to a Phase as directly and separately identifiable to all buildings located in the Phase (including but not limited to the Building) and may include Project Operating Expenses that are separately identifiable to a Phase;

(g) Landlord shall have the right to reasonably allocate a particular item or portion of Operating Expenses as any one of Project Operating Expenses, Building Operating Expenses or Phase Operating Expenses; 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; and

(h) Notwithstanding anything to the contrary contained in this Section 4.01, 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.

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Tenant shall pay to Landlord Rent Adjustments with respect to each Adjustment Year as follows:

(a) The Rent Adjustment Deposit representing Tenant’s Share of Landlord’s estimate of Operating Expenses, as described in Section 4.01, for the applicable Adjustment Year (or portion thereof) monthly during the Term with the payment of Monthly Base Rent, except the first installment which shall be paid by Tenant to Landlord concurrently with execution of this Lease; and

(b) Any Rent Adjustments due in excess of the Rent Adjustment Deposits in accordance with Section 4.02.

Within one hundred twenty (120) days after the end of each calendar year or as soon thereafter as reasonably possible, Landlord will furnish Tenant a statement (“Landlord’s Statement”) showing the following:

(a) Operating Expenses for the last Adjustment Year showing in reasonable detail the actual Operating Expenses categorized among Project Operating Expenses, Building Operating Expenses and Phase Operating Expenses for such period and Tenant’s Share of each as described in Section 4.01 above;

(b) The amount of Rent Adjustments due Landlord for the last Adjustment Year, less credit for Rent Adjustment Deposits paid, if any; and

(c) Any change in the Rent Adjustment Deposit due monthly in the current Adjustment Year, including the amount or revised amount due for months preceding any such change pursuant to Landlord’s Statement.

Tenant shall pay to Landlord within ten (10) days after receipt of such statement any amounts for Rent Adjustments then due in accordance with Landlord’s Statement. Any amounts due from Landlord to Tenant pursuant to this Section shall be credited to the Rent Adjustment Deposit next coming due, or refunded to Tenant if the Term has already expired provided Tenant is not in default hereunder. No interest or penalties shall accrue on any amounts which Landlord is obligated to credit or refund to Tenant by reason of this Section 4.02. Landlord’s failure to deliver Landlord’s Statement or to compute the amount of the Rent Adjustments shall not constitute a waiver by Landlord of its right to deliver such items nor constitute a waiver or release of Tenant’s obligations to pay such amounts. The Rent Adjustment Deposit shall be credited against Rent Adjustments due for the applicable Adjustment Year. During the last complete calendar year or during any partial calendar year in which the Lease terminates, Landlord may include in the Rent Adjustment Deposit its estimate of Rent Adjustments which may not be finally determined until after the termination of this Lease. Tenant’s obligation to pay Rent Adjustments survives the expiration or termination of the Lease. Notwithstanding the foregoing, in no event shall the sum of Monthly Base Rent and the Rent Adjustments be less than the Monthly Base Rent payable.

Landlord shall maintain books and records showing Operating Expenses and Taxes in accordance with sound accounting and management practices, consistently applied. The Tenant or its representative (which representative shall be a certified public accountant licensed to do business in the state in which the Property is located and whose primary business is certified public accounting) shall have the right, for a period of thirty (30) days following the date upon which Landlord’s Statement is delivered to Tenant, to

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examine the Landlord’s books and records with respect to the items in the foregoing statement of Operating Expenses and Taxes during normal business hours, upon written notice, delivered at least three (3) business days in advance. If Tenant does not object in writing to Landlord’s Statement within sixty (60) days of Tenant’s receipt thereof, specifying the nature of the item in dispute and the reasons therefor, then Landlord’s Statement shall be considered final and accepted by Tenant. Any amount due to the Landlord as shown on Landlord’s Statement, whether or not disputed by Tenant as provided herein shall be paid by Tenant when due as provided above, without prejudice to any such written exception.

In the event such audit discloses (i) errors made during the prior calendar year which, when totaled, established that the sum overcharged to and paid by Tenant exceeds five percent (5%) of the actual (as distinguished from estimated) amount of Tenant’s Share of Operating Expenses and Taxes, Tenant’s costs of the audit shall be paid by Landlord, or (ii) no errors or an error which equals or is less than five percent (5%), Tenant’s costs of the audit shall be paid by Tenant. If the audit determines that any sums are due and owing Tenant, such sums shall be credited to the next payment of Rent unless the Lease has been terminated, in such event Landlord shall promptly pay Tenant such amount.

Tenant acknowledges and agrees that it is a condition of Tenant’s right to conduct an audit pursuant to the foregoing, that Tenant and/or its representative, prior to commencement of such audit, execute a confidentiality agreement whereby Tenant and/or its representative agree to keep confidential and not disclose to any other party ( other than Tenant’s employees involved in such audit, and other professionals directly involved in the audit or results thereof) the results of any such audit or any action taken by Landlord in response thereto, except if required to disclose such information as required by applicable law or court order.

In addition to Monthly Base Rent, Rent Adjustments, Rent Adjustment Deposits and other charges to be paid by Tenant, Tenant shall pay to Landlord, upon demand, any and all taxes payable by Landlord (other than federal or state inheritance, general income, gift or estate taxes) whether or not now customary or within the contemplation of the parties hereto: (a) upon, allocable to, or measured by the Rent payable hereunder, including any gross receipts tax or excise tax levied by any governmental or taxing body with respect to the receipt of such rent; or (b) upon or with respect to the possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any portion thereof; or (c) upon the measured value of Tenant’s personal property or trade fixtures located in the Premises or in any storeroom or any other place in the Premises or the Property, or the areas used in connection with the operation of the Property, it being the intention of Landlord and Tenant that, to the extent possible, Tenant shall cause such taxes on personal property or trade fixtures to be billed to and paid directly by Tenant; (d) resulting from Tenant Work or Tenant Alterations to the Premises, whether title thereto is in Landlord or Tenant; or (e) upon this transaction. Taxes paid by Tenant pursuant to this Section 4.05 shall not be included in any computation of Taxes as part of Operating Expenses.

ARTICLE FIVE

SECURITY DEPOSIT

(a) Tenant shall pay Landlord, concurrently with execution of this Lease, in immediately available funds the amount of the Security Deposit specified in Section 1.01(14) as security (“Security”) for the full and faithful performance by Tenant of each and every term, provision, covenant, and condition of this Lease. If Tenant fails timely to perform any of the terms, provisions, covenants and conditions of this Lease or any other document executed by Tenant in connection with this Lease, including, but not limited to, the payment of any Rent or the repair of damage to the Premises caused by Tenant (excluding normal wear and tear) then Landlord may use, apply, or retain the whole or any part of the Security for the payment of any such Rent not paid when due, for the cost of repairing such damage, for the cost of cleaning the Premises, for the payment of any other sum which Landlord may expend or may be required to expend by reason of Tenant’s failure to perform, and otherwise for compensation of Landlord for any

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other loss or damage to Landlord occasioned by Tenant’s failure to perform, including, but not limited to, any loss of future Rent and any damage or deficiency in the releting of the Premises (whether such loss, damages or deficiency accrue before or after summary proceedings or other reentry by Landlord) and the amount of the unpaid past Rent, future Rent loss, and all other losses, costs and damages, that Landlord would be entitled to recover if Landlord were to pursue recovery under Section 11.02(b) or (c) of this Lease. If Landlord so uses, applies or retains all or part of the Security, Tenant shall within five (5) business days after demand pay or deliver to Landlord in immediately available funds the sum necessary to replace the amount used, applied or retained, except as specified in (c) below. If Tenant shall fully and faithfully comply with all of Tenant’s terms, provisions, covenants and conditions of this Lease, the Security (except any amount retained for application by Landlord as provided herein) shall be returned or paid over to Tenant no later than forty-five (45) days after the latest of: (i) the Termination Date; (ii) the removal of Tenant from the Premises; (iii) the surrender of the Premises by Tenant to Landlord in accordance with this Lease; or (iv) the date Rent Adjustments owed pursuant to this Lease have been computed by Landlord and paid by Tenant. Provided, however, in no event shall any such return be construed as an admission by Landlord that Tenant has performed all of its obligations hereunder.

(b) The Security shall not be deemed an advance rent deposit or an advance payment of any kind, or a measure of Landlord’s damages with respect to Tenant’s failure to perform, nor shall any action or inaction of Landlord with respect to it be a waiver of, or bar or defense to, enforcement of any right or remedy of Landlord. Landlord shall not be required to keep the Security separate from its general funds and shall not have any fiduciary or other duties concerning the Security except as set forth in this Section. Tenant shall not be entitled to any interest on the Security. In the event of any sale, lease or transfer of Landlord’s interest in the Building, Landlord shall have the right to transfer the Security, or balance thereof, to the vendee, transferee or lessee and any such transfer shall release Landlord from all liability for the return of the Security. Tenant thereafter shall look solely to such vendee, transferee or lessee for the return or payment of the Security. Tenant shall not assign or encumber or attempt to assign or encumber the Security or any interest in it and Landlord shall not be bound by any such assignment, encumbrance, attempted assignment or attempted encumbrance, and regardless of one or more assignments of this Lease, Landlord may return the Security to the original Tenant without liability to any assignee. Tenant hereby waives any and all rights of Tenant under the provisions of Section 1950.7 of the California Civil Code or other Law, now or hereafter enacted, regarding security deposits.

(c) Notwithstanding anything to the contrary contained in the foregoing, the following provisions shall apply to the Security Deposit: Within thirty (30) days following the last day of the twenty fourth (24^th) month of the Term, Landlord shall return to Tenant the sum of $45,000 of the Security Deposit (“First Return”), provided that at the time of such First Return, Tenant shall not be in Default under the Lease. The First Return shall be paid to Tenant by cash or check. Within thirty (30) days following the last day of the thirty sixth (36^th) month of the Term, Landlord shall return to Tenant the sum of $45,000 of the Security Deposit (“Second Return”), provided that at the time of such Second Return, Tenant shall not be in Default under the Lease. The Second Return shall be paid to Tenant by cash or check. Within thirty (30) days following the last day of the forty eighth (48^th) month of the Term, Landlord shall return to Tenant the sum of $45,000 of the Security Deposit (“Third Return”), provided that at the time of such Third Return, Tenant shall not be in Default under the Lease. The Third Return shall be paid to Tenant by cash or check. Within thirty (30) days following the last day of the sixtieth (60^th) month of the Term, Landlord shall return to Tenant the sum of $45,000 of the Security Deposit (“Fourth Return”), provided that at the time of such Fourth Return, Tenant shall not be in Default under the Lease. The Fourth Return shall be paid to Tenant by cash or check. Within thirty (30) days following the last day of the seventy second (72^nd) month of the Term, Landlord shall return to Tenant the sum of $45,000 of the Security Deposit (“Fifth Return”), provided that at the time of such Fifth Return, Tenant shall not be in Default under the Lease. The Fifth Return shall be paid to Tenant by cash or check.

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Notwithstanding anything to the contrary contained herein, Tenant shall have the option to deliver to Landlord a Letter of Credit (as set forth below) in lieu of the Security Deposit set forth in Section 5.01 above. If Tenant elects to post a Letter of Credit in lieu of the Security Deposit, then the following shall apply:

(a) No later than February 1, 2004, Tenant shall deliver to Landlord the Letter of Credit described below as security for Tenant’s performance of all of Tenant’s covenants and obligations under this Lease; provided, however, that neither the Letter of Credit nor any Letter of Credit Proceeds (as defined below) shall be deemed an advance rent deposit or an advance payment of any other kind, or a measure of Landlord’s damages upon Tenant’s default. The Letter of Credit shall be maintained in effect from the date thereof through January 31, 2011 (the “LOC Expiration Date”), and provided that on the LOC Expiration Date, Tenant shall not be in Default, Landlord shall return to Tenant the Letter of Credit and any Letter of Credit Proceeds then held by Landlord (other than those held for application by Landlord on account of a Default as provided below). Landlord shall not be required to segregate the Letter of Credit Proceeds from its other funds and no interest shall accrue or be payable to Tenant with respect thereto. Landlord may (but shall not be required to) draw upon the Letter of Credit and use the proceeds therefrom (the “Letter of Credit Proceeds”) or any portion thereof to cure any Default under this Lease, it being understood that any use of the Letter of Credit Proceeds shall not constitute a bar or defense to any of Landlord’s remedies set forth in this Lease. In such event and upon written notice from Landlord to Tenant specifying the amount of the Letter of Credit Proceeds so utilized by Landlord and the particular purpose for which such amount was applied, Tenant shall immediately deliver to Landlord an amendment Letter of Credit or a replacement Letter of Credit in an amount equal to the difference between the amount of the required Letter of Credit and the amount so expended. Tenant’s failure to deliver such amendment to the Letter of Credit or replacement Letter of Credit to Landlord within five (5) business days of Landlord’s notice shall constitute a Default hereunder. If Tenant is not in Default on the LOC Expiration Date, within forty-five (45) days after such date, Landlord shall return to Tenant the Letter of Credit or the balance of the Letter of Credit Proceeds then held by Landlord; provided, however, that in no event shall any such return be construed as an admission by Landlord that Tenant has performed all of its obligations hereunder. No purchaser at any judicial or private foreclosure sale of the Real Property or any portion thereof, shall be responsible to Tenant for such Letter of Credit or any Letter of Credit Proceeds unless such holder or purchaser shall have actually received the same.

(b) As used herein, Letter of Credit shall mean an unconditional, irrevocable letter of credit (hereinafter referred to as the “Letter of Credit”) issued by the San Francisco Bay Area office of a major national bank satisfactory to Landlord (the “Bank”), naming Landlord as beneficiary, in the initial amount of Four Hundred Fifty Thousand and No/100 Dollars ($450,000.00). The Letter of Credit shall be for not less than a one-year term and shall provide that (i) Landlord may make partial and multiple draws upon the Letter of Credit up to the full amount thereof, as determined by Landlord, (ii) the Bank will pay to Landlord the amount of such draw upon receipt by the Bank of a sight draft signed by Landlord, together with a written certification from Landlord that Tenant is in Default, (iii) Landlord is therefore entitled to draw such amount; and (iv) in the event of Landlord’s assignment or other transfer of its interest in this Lease, the Letter of Credit shall be freely transferable by Landlord, without charge and without recourse, to the assignee or transferee of such interest and the Bank shall confirm the same to Landlord and such assignee or transferee. In the event that the Bank shall fail to notify Landlord that the Letter of Credit will be renewed for at least one (1) year beyond the then applicable expiration date, and Tenant shall not have delivered to Landlord, at least thirty (30) days prior to the relevant annual expiration date, a replacement Letter of Credit in the amount required hereunder and otherwise meeting the requirements set forth above, then Landlord shall be entitled to draw on the Letter of Credit as provided above, and shall hold the proceeds of such draw as Letter of Credit Proceeds pursuant to Section 5.02(a) above.

(c) Notwithstanding anything to contrary contained herein, if Tenant is not in Default under the Lease on February 1, 2006, the replacement Letter of Credit may be issued in the amount of Four Hundred Five Thousand and No/100 Dollars ($405,000.00). If Tenant is not in Default under the Lease on February 1, 2007, the replacement Letter of Credit may be issued in the amount of Three Hundred Sixty Thousand and No/100 Dollars ($360,000.00). If Tenant is not in Default under the Lease on February 1, 2008, the replacement Letter of Credit may be issued in the amount of Three Hundred Fifteen Thousand and No/100 Dollars ($315,000.00). If Tenant is not in Default under the Lease on February 1, 2009, the replacement Letter of Credit may be issued in the amount of Two Hundred Seventy Thousand and No/100 Dollars ($270,000.00). If Tenant is not in Default under the Lease on February 1, 2010, the replacement Letter of Credit may be issued in the amount of Two Hundred Twenty Five Thousand and No/100 Dollars ($225,000.00).

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(d) The cost of the Letter of Credit shall be paid by Tenant.

If Tenant shall fully and faithfully comply with all the terms, provisions, covenants, and conditions of this Lease, the Letter of Credit, or any balance thereof, shall be returned to Tenant after the following:

If Tenant fails timely to perform any obligation under this Article Five, such breach shall constitute a Default by Tenant under this Lease without any right to or requirement of any further notice or cure period under any other Article of this Lease, except such notice and cure period expressly provided under this Article Five.

ARTICLE SIX

UTILITIES & SERVICES

Landlord shall provide maintenance and services as provided in Article Eight.

(a) 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, tog