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California-South San Francisco-343 Oyster Point Boulevard Sublease - Virologic Inc. and diaDexus Inc.

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  • Commercial Lease. Start a state-specific lease for the rental of commercial property. Specify the term and rent due, as well as whether the landlord or tenant is responsible for property taxes, insurance, and maintenance and repairs.
  • Commercial Sublease. When a tenant vacates commercial property before the lease term has expired, it may be able to rent the premises to a third party. The tenant would be the sublessor and the third party would be the sublessee. Besides preparing a sublease, both parties will want to review the provisions for assignment or subletting in the original lease agreement between the landlord and the sublessor.
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                                    SUBLEASE


       THIS SUBLEASE ("Sublease"), dated May 17, 2001, is entered into by and
between VIROLOGIC, INC., a Delaware corporation ("Sublandlord"), and DIADEXUS,
INC., a Delaware corporation ("Subtenant").

                                    RECITALS

       A. Sublandlord leases certain premises (the "Premises") consisting of
approximately 53,980 square feet in a building, located at 343 Oyster Point
Boulevard, South San Francisco, California, pursuant to that certain Lease dated
November 23, 1999, between ARE-Technology Center SSF, LLC, a Delaware limited
liability company, successor-in-interest to Trammell Crow Northern California
Development, Inc., as landlord (the "Master Landlord"), and Sublandlord, as
tenant, as amended by that certain First Amendment to Lease Agreement dated
February, 2000 (collectively, the "Master Lease"). The Premises is more
particularly described in the Master Lease, a copy of which is attached hereto
as Exhibit A. Capitalized terms used but not defined herein have the same
meanings as they have in the Master Lease.

       B. Sublandlord desires to sublease to Subtenant a portion of the Premises
comprising approximately 40,350 square feet and depicted on Exhibit B attached
hereto (the "Sublease Premises"), and Subtenant desires to sublease the Sublease
Premises from Sublandlord on the terms and provisions hereof.

       NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, Sublandlord and Subtenant covenant and agree as follows:

                                    AGREEMENT

       1. SUBLEASE PREMISES. On and subject to the terms and conditions below,
Sublandlord hereby leases to Subtenant, and Subtenant hereby leases from
Sublandlord, the Sublease Premises.

       2. TERM. This Sublease shall commence upon substantial completion of
Tenant's Work (as defined in the Master Lease) as set forth in the Work Letter
attached hereto as Exhibit C (the "Commencement Date"), provided Sublandlord has
theretofore obtained the Consent to Sublease signed by the Master Landlord in
the form of Exhibit D attached hereto, and shall expire on the last day of the
twenty-fourth (24th) month following the Commencement Date, unless sooner
terminated pursuant to any provision hereof. Subtenant shall have the right to
terminate this Sublease effective on any date on or after the first day of the
nineteenth (19th) month following the Commencement Date by providing no less
than ninety (90) days prior written notice to Sublandlord.

       3. POSSESSION/EARLY ACCESS.

              (a) The parties currently anticipate that the Commencement Date
will occur on or before August 1, 2001. If for any reason Sublandlord cannot
deliver possession of the Sublease Premises to Subtenant on or before such date,
Sublandlord shall not be subject to any


                                       1.
<PAGE>   2

liability therefor, except as set forth in this Section 3, nor shall such
failure affect the validity of this Sublease or the obligations of Subtenant
hereunder or extend the term hereof, provided that no Rent shall be due
hereunder until possession of the Sublease Premises has been delivered to
Subtenant. If Sublandlord is unable to deliver possession of the Sublease
Premises to Subtenant on or before November 1, 2001, for any reason other than
Master Landlord's delays in completing Landlord's Work (as defined in Exhibit
B-1 to the Master Lease) or Subtenant Delays (as defined in the Work Letter),
then Subtenant may terminate this Sublease by written notice to Sublandlord
given on or before November 10, 2001, whereupon any monies previously paid by
Subtenant to Sublandlord, including, without limitation, all or any portion of
Subtenant's Contribution, paid in accordance with the Work Letter, shall be
reimbursed to Subtenant by Sublandlord within ten (10) business days of such
termination and, following such reimbursement, the parties shall have no further
obligation to one another with respect to this Sublease. Sublandlord shall
deliver a notice to Subtenant describing any delays which Sublandlord
anticipates will result from Master Landlord's delays in completing Landlord's
Work.

              (b) Subtenant shall have the right to enter the Sublease Premises
prior to the Commencement Date for the purpose of installing cable, computer
equipment, AV equipment, PBX equipment, workstations, furniture and lab
equipment. Subtenant shall coordinate all such entries with Sublandlord so as
not to interfere with the completion of Tenant's Work. Such early entry shall be
subject to all of the terms and conditions of this Sublease, except that
Subtenant shall not be required to pay Rent on account thereof.

       4. RENT.

              (a) Commencing on the Commencement Date and continuing throughout
the term of this Sublease, Subtenant shall pay monthly rent ("Rent") to
Sublandlord in the following amounts:

                     (i) Base Rent. Subtenant shall pay to Sublandlord monthly
base rent ("Base Rent") as follows:

                      Months 1-12:        $80,700.00       ($2.00/square foot)
                      Months 13-24:       $82,718.00       ($2.05/square foot)

If, pursuant to Section 19 below, the term of this Sublease is extended for a
period beyond twenty-four (24) months, Base Rent during such extended term shall
be Fair Market Rent as determined by the parties in accordance with Section 19.

                     (ii) Additional Rent. In addition to Base Rent, Subtenant
also shall pay to Sublandlord, (a) Subtenant's proportionate share of Tenant's
Proportionate Share of Basic Operating Costs (as such terms are defined in the
Basic Lease Information and in Section 7 of the Master Lease), (b) all other
costs payable by Sublandlord with respect to the Sublease Premises under the
Master Lease, except penalties, interest and other costs and fees arising from a
default by Sublandlord under the Master Lease, and (c) any costs and expenses
applicable to the Sublease Premises which are paid directly by Sublandlord, if
any, including, but not limited to, utilities, personal property taxes and real
property taxes (collectively, "Additional Rent"). Subtenant shall pay
Subtenant's share of Basic Operating Costs and any Rent Increase as and


                                       2.
<PAGE>   3

when such payments are due from Sublandlord pursuant to the Master Lease, but at
least five (5) business days prior to the date Sublandlord must pay such amounts
to Master Landlord. Within ten (10) days of receipt by Sublandlord from Master
Landlord, Sublandlord shall provide to Subtenant copies of all notices relating
to Estimated Basic Operating Costs and Basic Operating Cost Adjustments
applicable to the Sublease Premises. Subtenant shall pay items of Additional
Rent other than Basic Operating costs within ten (10) days after receipt of
written demand from Sublandlord, which demand shall be accompanied by any
invoice or statement that Sublandlord received from Master Landlord relating
thereto. Promptly upon receipt from Master Landlord, Sublandlord shall provide
Subtenant with an estimate of Additional Rent for the year 2001, together with
any notices received by Sublandlord from Master Landlord with respect thereto.

                     (iii) Payment of Rent. If the Commencement Date does not
fall on the first day of a calendar month, Rent for the first month shall be
prorated on a daily basis based upon a calendar month. Rent shall be payable to
Sublandlord in lawful money of the United States, in advance, without prior
notice, demand, or offset, at least five (5) business days prior to the first
day of each calendar month during the term hereof. All Rent shall be paid to
Sublandlord at the address specified for notices to Sublandlord in Section 13
below.

              (b) Upon receipt of the Consent to Sublease executed by
Sublandlord and Master Landlord, Subtenant shall deliver to Sublandlord the sum
of Eighty Thousand Seven Hundred and No/100 Dollars ($80,700), representing the
first month's Base Rent.

              (c) In the event of any casualty or condemnation affecting the
Sublease Premises, Rent payable by Subtenant shall be abated hereunder, but only
to the extent that Rent under the Master Lease is abated, and Subtenant waives
any right to terminate this Sublease in connection with such casualty or
condemnation except to the extent the Master Lease is also terminated as to the
Sublease Premises or any portion thereof.

              (d) Base Rent and Additional Rent may be referred to herein
collectively as "Rent."

       5. SECURITY DEPOSIT. Upon execution of this Sublease, Subtenant shall
deliver to Sublandlord the sum of One Hundred Sixty-One Thousand Four Hundred
and No/100 Dollars ($161,400.00) as security for the performance of Subtenant's
obligations under this Sublease ("Security Deposit"). If Subtenant fails to pay
Rent or other charges when due under this Sublease, or fails to perform any of
its other obligations hereunder, Sublandlord may use or apply the portion of the
Security Deposit required for the payment of any Rent or other amount then due
hereunder and unpaid, for the payment of any other sum for which Sublandlord may
become obligated by reason of Subtenant's default or breach, or for any loss or
damage sustained by Sublandlord as a result of Subtenant's default or breach. If
Sublandlord so uses any portion of the Security Deposit, Subtenant shall restore
the Security Deposit to the full amount originally deposited within ten (10)
days after receipt of Sublandlord's written demand therefor. Sublandlord shall
not be required to keep the Security Deposit separate from its general accounts,
and shall have no obligation or liability for payment of interest on the
Security Deposit. The Security Deposit, or so much thereof as had not
theretofore been applied by Sublandlord, shall be returned to Subtenant within
thirty (30) days of the expiration or earlier termination of this Sublease,
provided Subtenant has vacated the Sublease Premises in accordance with the
terms of this Sublease.


                                       3.
<PAGE>   4

       In lieu of a cash Security Deposit, Subtenant may provide to Sublandlord
an unconditional, irrevocable letter of credit ("Letter of Credit") in the
amount set forth in this Section 5 in favor of Sublandlord and issued by a bank
located in the Bay Area and reasonably acceptable to Sublandlord ("Issuer"). The
Letter of Credit shall be in form reasonably acceptable to Sublandlord. The
Letter of Credit shall provide that draws, including partial draws, at
Sublandlord's election, will be honored upon the delivery to the Issuer of
notice signed by Sublandlord, or its authorized agent, that an event of default
has occurred under the Sublease. Any draw or partial draw of the Letter of
Credit shall not constitute a waiver by Sublandlord of its right to enforce its
other remedies hereunder, at law or in equity. If any portion of the Letter of
Credit is drawn upon, Subtenant shall, within ten (10) days after delivery of
written demand from Sublandlord, restore said Letter of Credit to its original
amount. The Letter of Credit shall be for the term of one year and automatically
shall be renewed each year for the term of sixty (60) days beyond the
termination or earlier expiration of the Sublease. The Letter of Credit will
automatically renew each year during the Sublease term unless the beneficiary
under the Letter of Credit is given at least thirty (30) days prior notice of a
non-renewal by the issuing bank, and Sublandlord shall be able to draw on the
Letter of Credit in the event of such notice.

       6. ASSIGNMENT AND SUBLETTING. Subtenant may not assign, sublet, transfer,
pledge, hypothecate or otherwise encumber the Sublease Premises, in whole or in
part, or permit the use or occupancy of the Sublease Premises by anyone other
than Subtenant, unless Subtenant has obtained Sublandlord's consent thereto,
which consent shall not be unreasonably withheld, and the consent of Master
Landlord in accordance with the terms of the Master Lease; provided, however,
that no such consent shall be required upon Subtenant's assignment or subletting
of the Sublease Premises to a Permitted Assignee (as such term is defined in
Section 21 of the Master Lease). Regardless of Sublandlord's consent, no
subletting or assignment shall release Subtenant of its obligations hereunder.
Any rent or other consideration payable to Subtenant pursuant to any sublease or
assignment permitted by this paragraph which is in excess of the Rent payable by
Subtenant to Sublandlord pursuant hereto ("Bonus Rent") shall be paid to
Sublandlord. In calculating Bonus Rent, Subtenant may first deduct from the rent
or other consideration received (a) the amortization of a reasonable brokerage
commission, (b) the cost of tenant improvements, if any, paid for by Subtenant
in connection with the assignment or subletting and (c) that portion of
Subtenant's Contribution proportionally attributable to (i) the square footage
of the Sublease Premises assigned or sublet and (ii) the duration of such
sublease or assignment.

       7. CONDITION OF SUBLEASE PREMISES/SUBLANDLORD'S WORK.

              (a) Subtenant has used due diligence in inspecting the Sublease
Premises and is satisfied with the condition of the Sublease Premises and the
property, including the environmental condition thereof. Subtenant agrees to
accept the Sublease Premises in "as-is" condition and with all faults without
any representation or warranty of any kind or nature whatsoever, or, except as
expressly set forth on Exhibit C, without any obligation on the part of
Sublandlord to modify, improve or otherwise prepare the Sublease Premises for
Subtenant's occupancy. Subtenant shall bear no responsibility for Hazardous
Materials (as defined in Section 4 of the Master Lease) existing in, on or about
the Sublease Premises at the date of this Sublease.

              (b) Sublandlord shall perform the work and make the installations
in the Sublease Premises substantially as set forth in the Work Letter attached
hereto as Exhibit C. Subtenant acknowledges that Master Landlord has not
completed Landlord's Work and that


                                       4.
<PAGE>   5

Sublandlord shall have no obligation to complete Landlord's Work nor any
liability arising from Master Landlord's failure to complete such work.

       8. USE. Subtenant may use the Sublease Premises only for the purposes
allowed in the Master Lease and for no other purpose. Subtenant shall promptly
comply with all applicable statutes, ordinances, rules, regulations, orders, and
restrictions of record in effect during the term of this Sublease governing,
affecting and regulating the Sublease Premises, including but not limited to the
use thereof. Subtenant shall not use or permit the use of the Sublease Premises
in a manner that will create waste or a nuisance, interfere with or disturb
other tenants in the Building or violate the provisions of the Master Lease.

       9. PARKING. Subtenant shall have a proportional interest in such parking
rights as Sublandlord has in connection with the Sublease Premises pursuant to
the Master Lease.

       10. INCORPORATION OF SUBLEASE.

              (a) All of the terms and provisions of the Master Lease, except as
provided in subsection (b) below, are incorporated into and made a part of this
Sublease and the rights and obligations of the parties under the Master Lease
are hereby imposed upon the parties hereto with respect to the Sublease
Premises, Sublandlord being substituted for the "Landlord" in the Master Lease,
and Subtenant being substituted for the "Tenant" in the Master Lease. It is
further understood that where reference is made in the Master Lease to the
"Premises," the same shall mean the Sublease Premises as defined herein; where
reference is made to the "Term Commencement Date," the same shall mean the
Commencement Date as defined herein; and where reference is made to the "Lease,"
the same shall mean this Sublease. Notwithstanding the foregoing, the term
"Landlord" in the following sections of the Master Lease (i) shall mean Master
Landlord, not Sublandlord: 8.A., 10, 24, 28, 36.J, 37.F and (ii) shall mean both
Master Landlord and Sublandlord: 18.

              (b) The following paragraphs of the Master Lease are not
incorporated herein: Basic Lease Information (except definitions that are
applicable to and appropriate in the context of this Sublease), 1, 2, 3, 6, 19,
20, 21.B., 31, 35, 37.C, D, E, G and H, Exhibit A-2, Exhibit B-1 (except to the
extent referred to in the Work Letter), Exhibit B-3, Exhibit C, Exhibit F, and
Exhibit G.

              (c) Subtenant hereby assumes and agrees to perform for
Sublandlord's benefit, during the term of this Sublease, all of Sublandlord's
obligations with respect to the Sublease Premises under the Master Lease, except
as otherwise provided herein. Subtenant shall not commit or permit to be
committed any act or omission which violates any term or condition of the Master
Lease. Except as otherwise provided herein, this Sublease shall be subject and
subordinate to all of the terms of the Master Lease.

              (d) Except as expressly set forth herein, Sublandlord hereby
grants to Subtenant all of the rights, privileges and benefits granted to or
conferred upon Sublandlord as tenant under the Master Lease, provided that
Subtenant's exercise of such rights, privileges and benefits do not result in or
cause Sublandlord to default under the Master Lease.


                                       5.
<PAGE>   6

       11. INSURANCE. Subtenant shall be responsible for compliance with the
insurance provisions of the Master Lease. Such insurance shall insure the
performance by Subtenant of its indemnification obligations hereunder and shall
name Master Landlord and Sublandlord as additional insureds. All insurance
required under this Sublease shall contain an endorsement requiring thirty (30)
days written notice from the insurance company to Subtenant and Sublandlord
before cancellation or change in the coverage, insureds or amount of any policy.
Subtenant shall provide Sublandlord with certificates of insurance evidencing
such coverage prior to the commencement of this Sublease.

       12. DEFAULT. In addition to defaults contained in the Master Lease,
failure of Subtenant to make any payment of Rent when due hereunder shall
constitute an event of default hereunder. If Subtenant's default causes
Sublandlord to default under the Master Lease, Subtenant shall defend, indemnify
and hold Sublandlord harmless from all damages, costs (including reasonable
attorneys' fees), liability, expenses or claims relating to such default.

       13. NOTICES. The addresses specified in the Master Lease for receipt of
notices to each of the parties are deleted and replaced with the following:

                  TO SUBLANDLORD AT:     VIROLOGIC, INC.
                                         270 East Grand Avenue
                                         South San Francisco, CA  94080
                                         Attn:  Karen Wilson/Kathy Hibbs

                  TO SUBTENANT AT:       the Sublease Premises


All notices hereunder shall be in writing and shall be sent by (a) messenger or
hand delivery; (b) reputable overnight air courier service; or (c) certified or
registered U.S. Mail, postage prepaid, return receipt requested. Notice shall be
deemed given on the earlier of the date delivered or refusal of a party to
accept delivery thereof. Each party immediately shall provide the other with a
copy of any notice of default given to or received from Master Landlord with
respect to this Sublease or the Sublease Premises.

       14. SUBLANDLORD'S OBLIGATIONS.

              (a) To the extent that the provision of any services or the
performance of any maintenance or any other act respecting the Sublease Premises
or the building in which the Sublease Premises is located (the "Building"),
including, without limitation, the performance and completion of Landlord's Work
(as defined in the Master Lease), is the responsibility of Master Landlord
(collectively "Master Landlord Obligations"), upon Subtenant's written request,
Sublandlord shall make reasonable efforts to cause Master Landlord to perform
such Master Landlord Obligations, including the commencement of appropriate
legal proceedings; provided, however, that, except to the extent resulting from
Sublandlord's breach of or default under the Master Lease which is not the
result of Subtenant's breach or default hereunder, in no event shall Sublandlord
be liable to Subtenant for any liability, loss or damage whatsoever in the event
that Master Landlord should fail to perform the same, nor shall Subtenant be
entitled to withhold the payment of Rent or to terminate this Sublease, except
to the extent Sublandlord has such a termination right under the Master Lease.
If Sublandlord is unsuccessful in obtaining the


                                       6.
<PAGE>   7

performance by Master Landlord of the Master Landlord Obligations in accordance
with the immediately preceding sentence, then Subtenant shall have the right,
upon prior written notice to Sublandlord, to exercise in its own name all of the
rights available to Sublandlord under the Master Lease to enforce performance on
the part of Master Landlord. It is expressly understood that the services and
repairs which are incorporated herein by reference, including but not limited to
the maintenance of exterior walls, structural portions of the roof, foundations,
walls and floors, will in fact be furnished by Master Landlord and not by
Sublandlord, except to the extent otherwise provided in the Master Lease. In
addition, Sublandlord shall not be liable for any maintenance, restoration
(following casualty or destruction) or repairs in or to the Building or Sublease
Premises, other than its obligation hereunder to use reasonable efforts to cause
Master Landlord to perform its obligations under the Master Lease. With respect
to any maintenance or repair to be performed by Master Landlord respecting the
Sublease Premises, the parties expressly agree that Subtenant shall have the
right to contact Master Landlord directly to cause it to so perform.

              (b) So long as Subtenant complies with its obligations under this
Sublease: (i) Sublandlord shall not agree to any amendment of the Master Lease
which materially affects Subtenant's rights under this Sublease; (ii)
Sublandlord shall not, without Subtenant's written consent, exercise any right
to terminate the Master Lease with respect to any period during the Sublease
term, other than on account of a default by Master Landlord under the Master
Lease, casualty or condemnation; and (iii) Sublandlord shall perform all of its
obligations under the Master Lease not assumed by Subtenant hereunder,
including, without limitation, the prompt payment to Master Landlord of all sums
paid by Subtenant to Sublandlord hereunder.

              (c) Sublandlord represents to Subtenant that (i) the Master Lease
is in full force and effect, (ii) Sublandlord is not in default under the Master
Lease and, to Sublandlord's knowledge, Master Landlord is not in default
thereunder, (iii) the Master Lease attached hereto is a full and complete copy
of the Master Lease, and (iv) as of the date of this Sublease, the Sublandlord's
leasehold estate is not encumbered by any deed of trust or mortgage financing.

              (d) Except as otherwise provided herein, Sublandlord shall have no
other obligations to Subtenant with respect to the Sublease Premises or the
performance of the Master Landlord Obligations.

       15. EARLY TERMINATION OF SUBLEASE. If, without the fault of Sublandlord,
the Master Lease should terminate prior to the expiration of this Sublease,
Sublandlord shall have no liability to Subtenant on account of such termination.
Subject to Section 14(b) above, to the extent that the Master Lease grants
Sublandlord any discretionary right to terminate the Master Lease, whether due
to casualty, condemnation, or otherwise, Sublandlord shall be entitled to
exercise or not exercise such right in its complete and absolute discretion.

       16. CONSENT OF MASTER LANDLORD AND SUBLANDLORD. If Subtenant desires to
take any action which requires the consent or approval of Sublandlord pursuant
to the terms of this Sublease, prior to taking such action, including, without
limitation, making any alterations, then, notwithstanding anything to the
contrary herein, (a) Sublandlord shall have the same rights of approval or
disapproval as Master Landlord has under the Master Lease, and (b) Subtenant
shall not take any such action until it obtains the consent of Sublandlord and
Master Landlord, as may be required under this Sublease or the Master Lease.
This Sublease shall not be effective unless


                                       7.
<PAGE>   8

and until the Consent to Sublease shall have been obtained. Each of Sublandlord
and Subtenant represents and warrants to the other that it has obtained all
necessary corporate approvals for the execution and delivery of this Sublease.

       17. INDEMNITY. Subtenant shall indemnify, defend, protect, and hold
Sublandlord and Master Landlord harmless from and against all actions, claims,
demands, costs, liabilities, losses, reasonable attorneys' fees, damages,
penalties, and expenses (collectively "Claims") which may be brought or made
against Sublandlord or which Sublandlord may pay or incur to the extent caused
by (i) a breach of this Sublease by Subtenant, (ii) any violation of law by
Subtenant or its employees, agents, contractors or invitees (collectively,
"Agents") relating to the use or occupancy of the Sublease Premises, (iii) any
act or omission by Subtenant or its Agents resulting in contamination of any
part or all of the Sublease Premises or the Building by Hazardous Materials or
(iv) the negligence or willful misconduct of Subtenant or its Agents.
Sublandlord shall indemnify and hold Subtenant harmless from and against any and
all loss, liability or expense, including reasonable attorneys' fees, incurred
or suffered by Subtenant on account of (i) the Sublandlord's material breach of
this Sublease, (ii) a default by Sublandlord under the Master Lease to the
extent not caused by Subtenant or (iii) Sublandlord's gross negligence of
willful misconduct with respect to the Sublease Premises or this Sublease.

       18. BROKERS. Each party hereto represents and warrants that it has dealt
with no brokers in connection with this Sublease and the transactions
contemplated herein, except Mark Pearson of CRESA Partners ("Broker"). All
Broker fees and commissions shall be paid by Sublandlord in accordance with the
terms of a separate agreement between Sublandlord and Broker. Each party shall
indemnify, protect, defend and hold the other party harmless from all costs and
expenses (including reasonable attorneys' fees) arising from or relating to a
breach of the foregoing representation and warranty.

       19. RIGHT OF FIRST OFFER.

              (a) So long as diaDexus, Inc. (or a Permitted Assignee) is the
Subtenant hereunder and occupies the entirety of the Sublease Premises, and
subject to the conditions set forth in this Section 19, prior to entering into a
sublease proposal with a third party for all or any portion of the Premises (the
"Offered Space"), Sublandlord shall deliver to Subtenant a written notice (the
"ROF Notice") informing Subtenant of Sublandlord's intent to sublease the
Offered Space to a third party at the expiration of the 24th month of the
Sublease term. Sublandlord shall deliver the ROF Notice to Subtenant not later
than the first day of the 22nd month of the Sublease term.

              (b) Within ten (10) days of receipt of the ROF Notice, Subtenant
shall notify Sublandlord in writing of Subtenant's election to sublease the
Offered Space (the "Acceptance Notice"). Failure of Subtenant to timely deliver
the Acceptance Notice shall be deemed an election by Subtenant not to sublease
the Offered Space, and Subtenant shall have no further rights to sublease any
portion of the Offered Space thereafter. Subtenant's right of first offer set
forth in this Section 19 is a one-time right.

              (c) Immediately following receipt of the Acceptance Notice,
Sublandlord and Subtenant shall negotiate in good faith the terms of the
sublease applicable to the Offered Space. The parties shall use best efforts to
finalize and execute such sublease within forty-five (45) days


                                       8.
<PAGE>   9

of Sublandlord's receipt of the Acceptance Notice. Such sublease shall be
subject to the following conditions:

                     (i) The term of the sublease shall be for a period not less
than six (6) months and not more than twelve (12) months.

                     (ii) Base Rent during the entire sublease term shall be the
"Fair Market Rent" for the Offered Space as agreed to by the parties. If the
parties are unable to agree on Fair Market Rent within thirty (30) days of
Sublandlord's receipt of the Acceptance Notice, then Fair Market Rent shall be
determined in accordance with subsection (d) below. In no event, however, shall
Base Rent for the Offered Space be less than the Base Rent for the Sublease
Premises for the last month of the initial Sublease term.

                     (iii) Anything herein to the contrary notwithstanding, if
Subtenant is in default under any of the terms, covenants or conditions of this
Sublease, either at the time Subtenant exercises the right of first offer or on
the commencement date of sublease applicable to the Offered Space, Sublandlord
shall have, in addition to all of Sublandlord's other rights and remedies
provided in this Sublease, the right to terminate such right of first offer upon
notice to Subtenant.

              (d) If Sublandlord and Subtenant are unable to agree on Fair
Market Rent pursuant to subsection 19(c)(ii) above, then the parties shall
submit the matter to arbitration. The arbitration shall be concluded within
ninety (90) days after the date of Subtenant's Acceptance Notice. To the extent
that arbitration has not been completed prior to the expiration of the original
Sublease term, Subtenant shall pay Base Rent at the rate applicable during the
last month of the original Sublease term, with an adjustment to be made once
Fair Market Rent is ultimately determined by arbitration. Within ten (10) days
of the expiration of the 30-day period described in subsection 19(c)(ii) above,
each party shall choose an Appraiser and shall send written notice to the other
party specifying therein the identity of the Appraiser. For purposes hereof,
"Appraiser" means a real estate broker or MAI designated appraiser, in either
case with not less than five (5) years of full time commercial appraisal or
brokerage experience in the sub-market area in which the Offered Space is
located and with no prior business dealings with the party appointing such
Appraiser. If either party fails to timely appoint an Appraiser, the sole
Appraiser appointed shall determine the Base Rent to be charged during the new
sublease term, based on the criteria described above. If two Appraisers are
appointed, they shall immediately meet and attempt to agree upon such Base Rent.
If they are unable to do so within fifteen (15) days after their first meeting,
they shall jointly appoint a third Appraiser and the third Appraiser shall
determine Fair Market Rent for the applicable extension period within ten (10)
days of his/her appointment. If the two Appraisers are unable to agree upon such
third Appraiser, either party may petition the Presiding Judge of the Superior
Court of the City and County where the Sublease Premises are located to appoint
such third Appraiser. The determination of Base Rent as provided herein shall be
binding upon the parties hereto. Promptly upon such determination, the parties
shall execute a sublease specifying the Base Rent payable during the sublease
term.

       20. RIGHT TO EXPAND SUBLEASE PREMISES.

              (a) Prior to entering into a sublease proposal with a third party
for all or any portion of the Premises, excluding the Sublease Premises (the
"Expansion Premises"),


                                       9.
<PAGE>   10

Sublandlord shall deliver a written notice to Subtenant setting forth the terms
upon which Sublandlord is willing to sublease such space to Subtenant (the
"Expansion Notice"). Subtenant shall notify Sublandlord in writing within ten
(10) days after receipt of the Expansion Notice of Subtenant's election to
sublease the Expansion Premises on the terms set forth in the Expansion Notice
("Subtenant's Election Notice"). Failure of Subtenant to timely deliver
Subtenant's Election Notice shall be deemed an election by Subtenant to not
sublease the Expansion Premises, and Subtenant shall have no further rights to
sublease any portion of the Expansion Premises thereafter. Subtenant's right
under this Section 20 is a one-time right. Failure of Subtenant to deliver
Subtenant's Election Notice within the required time period shall cause this
right of first offer to terminate and be of no further force or effect.

              (b) In the event Subtenant timely delivers Subtenant's Election
Notice, Landlord and Tenant shall enter into an amendment to this Sublease or a
separate lease within ten (10) business days after Sublandlord's receipt of
Subtenant's Election Notice, which amendment or separate lease shall (i) add to
the Sublease Premises the Expansion Premises, (ii) set forth the Base Rent and
other economic terms applicable to the Expansion Premises, which terms shall be
as set forth in the Notice, and (iii) provide that the term of the Expansion
Premises is coterminous with the Sublease Premises.

       21. SURRENDER OF SUBLEASE PREMISES. Upon the expiration or earlier
termination of this Sublease, Subtenant shall surrender the Sublease Premises in
the same condition as they were in on the Commencement Date, ordinary wear and
tear excepted.

       22. NO THIRD PARTY RIGHTS. The benefit of the provisions of this Sublease
is expressly limited to Sublandlord and Subtenant and their respective permitted
successors and assigns. Under no circumstances will any third party be construed
to have any rights as a third party beneficiary with respect to any of said
provisions.

       23. QUIET ENJOYMENT. Subject to Section 14(b)(ii) above, so long as
Subtenant timely pays Rent and performs its obligations under this Sublease,
Sublandlord shall take no action, or fail to take any action, which would
interfere with the right of Subtenant to peaceably have, hold and enjoy the
Sublease Premises during the Sublease term.

       24. COUNTERPARTS. This Sublease may be signed in two or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one agreement.


                                      10.
<PAGE>   11

       IN WITNESS WHEREOF, the parties have executed this Sublease as of the
date first written above.



SUBLANDLORD:  VIROLOGIC, INC.,          SUBTENANT:  DIADEXUS, INC.,
a Delaware corporation                  a Delaware corporation



By: /s/ William D. Young                By: /s/ Mohan S. Iyer
   -------------------------------         -------------------------------------
Print Name: William D. Young            Print Name: Mohan S. Iyer
           -----------------------                 -----------------------------
Its: Chief Executive Officer            Its: VP of Business Development
    ------------------------------          ------------------------------------


                                      11.
<PAGE>   12

                                    EXHIBIT A

                                  MASTER LEASE

                                [to be attached]


                                      12.
<PAGE>   13

                                    EXHIBIT B

                         DEPICTION OF SUBLEASE PREMISES

                                [to be attached]


                                      13.
<PAGE>   14

                                    EXHIBIT C

                                   WORK LETTER


              1. Sublandlord shall complete the Tenant's Work (as defined in
Exhibit B-1 to the Master Lease) in accordance with the Master Lease, including,
without limitation, Exhibit B-1 thereto. Subtenant acknowledges and agrees that
Sublandlord will complete Tenant's Work in accordance with plans and
specifications dated January 30, 2001, prepared by WHL Architects ("Architect")
and approved in advance by Master Landlord (the "Plans and Specifications"). Any
and all changes to the Plans and Specifications desired by Subtenant shall be
subject to Sublandlord's approval, which approval shall not be unreasonably
withheld, and to Master Landlord's approval in accordance with the terms of the
Master Lease. Sublandlord shall not be liable to Subtenant for delays in
completion of Tenant's Work triggered by changes to the Plans and Specifications
requested by Subtenant or otherwise caused by Subtenant ("Subtenant Delays") and
any such delays shall not toll commencement of this Sublease or Subtenant's
payment of Rent hereunder, provided that Sublandlord delivers a notice to
Subtenant describing the delays which Sublandlord anticipates will result from
changes to the Plans and Specifications requested by Subtenant, promptly upon
receipt of the request for the changes from Subtenant.

              2. Subtenant shall contribute to the cost of Tenant's Work an
amount not to exceed Two Million Six Hundred Thousand and No/100 Dollars
($2,600,000.00) ("Subtenant's Contribution"). Following contribution by
Sublandlord toward the cost of Tenant's Work an amount equal to the sum of One
Million One Hundred Sixty-Five Thousand and No/100 Dollars ($1,165,000.00),
which sum shall be evidenced by copies of checks, invoices marked paid or other
evidence reasonably acceptable to Subtenant, Sublandlord may submit to
Subtenant, not more frequently than monthly, copies of all documents and
invoices submitted to Master Landlord in accordance with paragraph 2.1 of
Exhibit B-1 of the Master Lease. Within fifteen (15) days of receipt of such
documents and invoices, Subtenant shall deliver to Sublandlord the amount shown
in the request as expenditures and costs of Tenant's Work, up to the maximum of
the Subtenant's Contribution. In no event shall Subtenant be required to
contribute more to Tenant's Work than Subtenant's Contribution.

              3. As used in this Work Letter and in the Sublease, "substantial
completion" shall mean completion of Tenant's Work as certified in writing by
the Architect. Completion and/or correction of items set forth on a punch-list
shall not be required for certification of substantial completion by the
Architect.


                                      14.
<PAGE>   15

                                    EXHIBIT D

                               CONSENT TO SUBLEASE

                                [to be attached]


                                      15.