Common use of Expansion in the Project Clause in Contracts

Expansion in the Project. Tenant shall have the one-time right, commencing on the Commencement Date and exercisable on or before March 31, 2011 (“Expansion Right Expiration Date”), to elect to expand the original Premises (the “Expansion Right”) to include the balance of the western half of the first floor of the Building, containing approximately 13,000 rentable square feet, as more particularly described on Exhibit J (“Expansion Space”), upon the terms and conditions contained in this Section. If Tenant elects to exercise the Expansion Right, Tenant shall, on or before the Expansion Right Expiration Date, deliver written notice to Landlord of its election to exercise the Expansion Right (“Expansion Exercise Notice”). If Tenant elects to lease the Expansion Space by delivering an Expansion Exercise Notice prior to the Expansion Right Expiration Date, Tenant shall be deemed to agree to lease the Expansion Space on the same terms and conditions as this Lease, except that the terms of this Lease shall be modified as follows effective as of the ES Commencement Date (as defined below): (i) the definition of Premises shall be amended to include the Expansion Space; (ii) the Base Term of the Lease with respect to the original Premises and the Expansion Space shall be amended to end 54 months from the earlier of Substantial Completion (as defined in the Expansion Space Work Letter attached hereto as Exhibit K) by Landlord of the Expansion Space Tenant Improvements (as defined in the Expansion Space Work Letter) or the date Landlord could have delivered the Expansion Space but for Tenant Delays (as defined in the Expansion Space Work Letter)(“ES Commencement Date”); (iii) Tenant shall continue to pay Base Rent for the original Premises as provided for in this Lease and, in addition thereto, beginning on the ES Commencement Date, Tenant shall pay Base Rent for the Expansion Space at the then current monthly Base Rent per rentable square foot payable for the original Premises (as the same is adjusted from time to time pursuant to Section 4 of this Lease); (iv) with respect to the Base Rent payable by Tenant for the Expansion Space, Tenant shall only be required to pay Base Rent with respect to only 50% of the Expansion Space commencing on the ES Commencement Date through the expiration of the 12th month following the ES Commencement Date and Tenant shall commence paying Base Rent with respect to the entire Expansion Space on the first day of the 13th month following the ES Commencement Date; (v) Tenant shall commence paying Operating Expenses with respect to the entire Expansion Space on the ES Commencement Date; (vi) Base Rent shall be increased on the first day of the 49th month of the original Base Term and the first day of the 61st month of the original Base Term (each, an “Adjustment Date”) by multiplying the Base Rent payable immediately before such Adjustment Date by 3.5% and adding the resulting amount to the Base Rent payable immediately before such Adjustment Date, (vii) except as provided for in clause (iv) of this Section, Tenant shall not be entitled to any Rent Credit or any other abatement of Rent with respect to its lease of the Expansion Space, (viii) Tenant’s Share of Operating Expenses of Building and Tenant’s Share of Operating Expenses of Project shall be proportionately adjusted; (ix) the Expansion Space Tenant Improvements shall be constructed in accordance with the Expansion Space Work Letter; (x) subject to Force Majeure delays and Tenant Delays (as defined in the Expansion Space Work Letter) the target date for completion of the Expansion Space Tenant Improvements shall be 7 months after Tenant’s delivery of the Expansion Exercise Notice to Landlord; and (xiii) the terms of Sections 41 (a) and 42 shall not be applicable to the Expansion Space. Tenant’s failure to deliver a Tenant Expansion Exercise Notice prior to the Expansion Right Expiration Date shall be deemed an election by Tenant not to exercise Tenant’s Expansion Right, in which case Tenant shall be deemed to have forever waived all of its rights under this Section 39(a), the provisions of this Section 39(a) shall no longer apply.

Expansion in the Project. Tenant shall have the one-time right, commencing on but not the Commencement Date and exercisable on or before March 31obligation, 2011 (“Expansion Right Expiration Date”), to elect to expand the original Premises (the “Expansion Right”) to include the balance of Available Space in the western half of the first floor of the Building, containing approximately 13,000 rentable square feet, as more particularly described on Exhibit J (“Expansion Space”), Project upon the terms and conditions contained in this Section. For purposes of this Section 39(a), “Available Space” shall mean all of that that certain space contiguous to the Premises consisting of approximately 5,705 rentable square feet , as shown on Exhibit G attached hereto. If Tenant elects to exercise the Expansion Right, Tenant shall, on or before the October 1, 2009 (“Expansion Right Expiration Date”), deliver written notice to Landlord of its election to exercise the Expansion Right (“Tenant Expansion Exercise Notice”). If, prior to Tenant’s delivery of a Tenant Expansion Exercise Notice to Landlord and prior to the Expansion Right Expiration Date, Landlord intends to accept a proposal from a third party to lease the Available Space, Landlord shall deliver to Tenant a written notice of the existence of such proposal (“Proposal Notice”). Within 5 business days after Tenant’s receipt of the Proposal Notice, Tenant shall deliver to Landlord written notice (the “Acceptance Notice”) if Tenant elects to lease the Available Space. If Tenant elects to lease the Expansion Available Space by delivering an a Tenant Expansion Exercise Notice prior to or an Acceptance Notice, as applicable, within the Expansion Right Expiration Daterequired time periods, Tenant shall be deemed to agree to lease the Expansion Available Space on the same terms and conditions as this LeaseLease except, except that the terms of this Lease shall be modified as follows effective as follows: (i) tenant improvements within the Available Space, acceptable to Landlord in Landlord’s reasonable discretion, shall be constructed in accordance with a work letter entered into by the parties, each in their sole and absolute discretion, which work letter shall provide that (1) the parties shall cause a space plan for the Available Space, acceptable to Landlord in Landlord’s reasonable discretion, to be finalized no later than 30 days after Tenant’s delivery of the ES Commencement Date Tenant Expansion Exercise Notice or the Acceptance Notice to Landlord, (as defined below): 2) Landlord shall provide a tenant improvement allowance (i“Available Space TI Allowance”) for the construction of tenant improvements in the Available Space of up to $20.00 per rentable square foot of the Available Space and an Additional TI Allowance, subject to the terms of such work letter, of up to $5.00 per rentable square foot of the Available Space which shall be fully amortized over the remainder of the Term pursuant to Section 4(b) of this Lease, and (3) Tenant shall have no obligation to construct any tenant improvements in the Available Space; (ii) the definition of Premises shall be amended to include the Expansion Available Space; (ii) the Base Term of the Lease with respect to the original Premises and the Expansion Space shall be amended to end 54 months from the earlier of Substantial Completion (as defined in the Expansion Space Work Letter attached hereto as Exhibit K) by Landlord of the Expansion Space Tenant Improvements (as defined in the Expansion Space Work Letter) or the date Landlord could have delivered the Expansion Space but for Tenant Delays (as defined in the Expansion Space Work Letter)(“ES Commencement Date”); (iii) Tenant shall continue to pay Base Rent for the original Premises as provided for in this Lease and, in addition thereto, beginning on the ES Commencement Date, Tenant shall pay Base Rent for the Expansion Space at the then current monthly Base Rent per rentable square foot payable for the original Premises (as the same is adjusted from time to time pursuant to Section 4 of this Lease); (iv) with respect to the Base Rent payable by Tenant for the Expansion Space, Tenant shall only be required to pay Base Rent with respect to only 50% of the Expansion Space commencing on the ES Commencement Date through the expiration of the 12th month following the ES Commencement Date and Tenant shall commence paying Base Rent with respect to the entire Expansion Space on the first day of the 13th month following the ES Commencement Date; (v) Tenant shall commence paying Operating Expenses with respect to the entire Expansion Space on the ES Commencement Date; (vi) Base Rent shall be increased on the first day of the 49th month of the original Base Term and the first day of the 61st month of the original Base Term (each, an “Adjustment Date”) by multiplying the Base Rent payable immediately before such Adjustment Date by 3.5% and adding the resulting amount to the Base Rent payable immediately before such Adjustment Date, (vii) except as provided for in clause (iv) of this Section, Tenant shall not be entitled to any Rent Credit or any other abatement of Rent with respect to its lease of the Expansion Space, (viii) Tenant’s Share of Operating Expenses of for the Building and Tenant’s Share of Operating Expenses of for the Project shall be proportionately adjusted; increased based upon the addition of the Available Space to the Premises, (ixiv) the Expansion amount of Base Rent payable for the Available Space Tenant Improvements shall be constructed equal to the amount of Base Rent on a per square foot basis being paid by Tenant with respect to the Premises as of the date that Tenant commences paying Base Rent for the Available Space, excluding any rent abatement provided for in accordance clauses (i) and (ii) of Section 3(a) of this Lease, and (vi) Tenant shall commence paying Base Rent and Operating Expenses for the Available Space on the date Landlord delivers the Available Space to Tenant with the Expansion Space Work Letter; (x) subject to Force Majeure delays and Tenant Delays (as defined tenant improvements in the Expansion Available Space Work Letter) the target date for completion substantially completed. The term of the Expansion Lease with respect to the Available Space Tenant Improvements shall be 7 months after Tenant’s delivery commence immediately upon mutual execution of the Expansion Exercise Notice to Landlord; and (xiiiamendment described in Section 39(b) the terms of Sections 41 (a) and 42 shall not be applicable to the Expansion Space. Tenant’s failure to deliver a Tenant Expansion Exercise Notice prior to the Expansion Right Expiration Date shall be deemed an election by Tenant not to exercise Tenant’s Expansion Right, in which case Tenant shall be deemed to have forever waived all of its rights under this Section 39(a), the provisions of this Section 39(a) shall no longer applybelow.

Expansion in the Project. Tenant shall have the one-time right, commencing on but not the Commencement Date and exercisable on or before March 31obligation, 2011 (“Expansion Right Expiration Date”), to elect to expand the original Premises (the “Expansion Right”) to include any Available Space in the balance of the western half of the first floor of the Building, containing approximately 13,000 rentable square feet, as more particularly described on Exhibit J (“Expansion Space”), Project upon the terms and conditions contained in this Section. For purposes of this Section 39(a), “Available Space” shall mean any of the space identified in the table below in the Project that is currently occupied by an existing tenant (that is, a tenant that is a tenant on the date of this Lease) and such existing tenant does not wish to renew (regardless of whether such tenant has a right to renew) its occupancy of such space: † The table above identifies the expiration date for the lease agreement with the existing tenant, subject to rights of renewal or extension in favor of the existing tenants. With respect to the Available Space identified in the table above, no other person or entity (including any existing Project tenants) has any right to lease any of the Available Space that is superior to the rights granted to Tenant in this Section 39, If there is any Available Space in the Project from time to time, Landlord shall, at such time as Landlord shall elect (but no later than 30 days after Landlord shall have knowledge that such space shall be Available Space), deliver to Tenant elects written notice (“Expansion Notice”) of the Available Space, together with the terms and conditions on which Landlord is prepared to lease Tenant the Available Space. Tenant shall have 10 business days after delivery of the Expansion Notice to deliver to Landlord written notification of Tenant’s exercise of the Expansion Right, . Tenant shall, on or before shall have the Expansion Right Expiration Date, deliver written notice to Landlord of its election right to exercise the Expansion Right (“Expansion Exercise Notice”). If Tenant elects to lease the Expansion Space by delivering an Expansion Exercise Notice prior to the Expansion Right Expiration Date, Tenant shall be deemed to agree to lease the Expansion Space on the same terms and conditions as this Lease, except that the terms of this Lease shall be modified as follows effective as of the ES Commencement Date (as defined below): only (i) the definition of Premises shall be amended to include the Expansion Space; (ii) the Base Term of the Lease with respect to the original Premises and the Expansion Space shall be amended to end 54 months from the earlier of Substantial Completion (as defined in the Expansion Space Work Letter attached hereto as Exhibit K) by Landlord of the Expansion Space Tenant Improvements (as defined in the Expansion Space Work Letter) if 5 or the date Landlord could have delivered the Expansion Space but for Tenant Delays (as defined in the Expansion Space Work Letter)(“ES Commencement Date”); (iii) Tenant shall continue to pay Base Rent for the original Premises as provided for in this Lease and, in addition thereto, beginning more years remain on the ES Commencement Date, Tenant shall pay Base Rent for the Expansion Space at the then current monthly Base Rent per rentable square foot payable for the original Premises (as the same is adjusted from time to time pursuant to Section 4 Term of this Lease); (iv) with respect to the Base Rent payable by Tenant for the Expansion Space, Tenant shall only be required to pay Base Rent with respect to only 50% of the Expansion Space commencing on the ES Commencement Date through the expiration of the 12th month following the ES Commencement Date and Tenant shall commence paying Base Rent with respect to the entire Expansion Space on the first day of the 13th month following the ES Commencement Date; (v) Tenant shall commence paying Operating Expenses with respect to the entire Expansion Space on the ES Commencement Date; (vi) Base Rent shall be increased on the first day of the 49th month of the original Base Term and the first day of the 61st month of the original Base Term (each, an “Adjustment Date”) by multiplying the Base Rent payable immediately before such Adjustment Date by 3.5% and adding the resulting amount to the Base Rent payable immediately before such Adjustment Date, (vii) except as provided for in clause (iv) of this Section, Tenant shall not be entitled to any Rent Credit or any other abatement of Rent with respect to its lease of the Expansion Space, (viii) Tenant’s Share of Operating Expenses of Building and Tenant’s Share of Operating Expenses of Project shall be proportionately adjusted; (ix) the Expansion Space Tenant Improvements shall be constructed in accordance with the Expansion Space Work Letter; (x) subject to Force Majeure delays and Tenant Delays (as defined in the Expansion Space Work Letter) the target date for completion of the Expansion Space Tenant Improvements shall be 7 months after Tenant’s delivery of the Expansion Exercise Notice to Landlord; and (xiii) the terms of Sections 41 (a) and 42 shall not be applicable to the Expansion Space. Tenant’s failure to deliver a Tenant Expansion Exercise Notice prior to the Expansion Right Expiration Date shall be deemed an election by Tenant not to exercise Tenant’s Expansion Right, in which case Tenant the term of the lease for the Available Space (“Available Space Term”) shall be deemed to have forever waived all of its rights under this Section 39(a), coterminous with the provisions then current Term of this Section 39(aLease, or (ii) if less than 5 years remain on the then current Term of this Lease, in which case the Available Space Term shall no longer applybe for the term set forth in the Expansion Notice. Tenant shah be entitled to lease the Available Space upon the terms and conditions set forth in the Expansion Notice.

Expansion in the Project. Tenant shall have the one-time right, commencing on but not the Commencement Date and exercisable on or before March 31obligation, 2011 (“Expansion Right Expiration Date”), to elect to expand the original Premises (the “"Expansion Right”") to include the balance Available Space in the Project upon the terms and conditions in this Section. For purposes of this Section 39(a), "Available Space" shall mean the western half of space on the first floor of the Building, Project adjacent to the First Floor Premises containing approximately 13,000 5,466 rentable square feet, feet of space as more particularly described shown on Exhibit J A attached hereto that is not occupied by a tenant or that is occupied by an existing tenant whose lease is expiring within 6 months or less and such tenant does not wish to renew (“regardless of whether such tenant has a right to renew) its occupancy of such space. The Expansion Space”), upon Right shall expire in all events on the terms and conditions contained in this Sectionfirst anniversary of the Rent Commencement Date. If Tenant elects to exercise there is any Available Space in the Expansion RightProject, Tenant Landlord shall, on or before the Expansion Right Expiration Dateat such time as Landlord shall elect so long as Tenant's rights hereunder are preserved, deliver to Tenant written notice to Landlord ("Expansion Notice") of its election to exercise such Available Space and the Expansion Right (“Expansion Exercise Notice”)date when the Available Space will become available. If Tenant elects to The lease of the Expansion Space by delivering an Expansion Exercise Notice prior to the Expansion Right Expiration Date, Tenant shall be deemed to agree to lease the Expansion Space on the same terms and conditions as this Lease, except that the terms of this Lease shall be modified as follows effective as of the ES Commencement Date (as defined below): (i) the definition of Premises shall be amended to include the Expansion Space; (ii) the Base Term of the Lease with respect to the original Premises and the Expansion Space shall be amended to end 54 months from the earlier of Substantial Completion (as defined in the Expansion Space Work Letter attached hereto as Exhibit K) by Landlord of the Expansion Space Tenant Improvements (as defined in the Expansion Space Work Letter) or the date Landlord could have delivered the Expansion Space but for Tenant Delays (as defined in the Expansion Space Work Letter)(“ES Commencement Date”); (iii) Tenant shall continue to pay Base Rent for the original Premises as provided for in this Lease and, in addition thereto, beginning on the ES Commencement Date, Tenant shall pay Base Rent for the Expansion Space at the then current monthly Base Rent per rentable square foot payable for the original Premises (as the same is adjusted from time to time pursuant to Section 4 of this Lease); (iv) with respect to provided, however, that the Base Rent payable by Tenant for the Expansion Space, Tenant shall only be required to pay Base Rent with respect to only 50% duration of the Expansion Space commencing on the ES Commencement Date through the expiration of the 12th month following the ES Commencement Date and Tenant shall commence paying Base Rent with respect to the entire Expansion Space on the first day of the 13th month following the ES Commencement Date; (vrental abatement specified in Section 4(a) Tenant shall commence paying Operating Expenses with respect to the entire Expansion Space on the ES Commencement Date; (vi) Base Rent shall be increased on the first day of the 49th month of the original Base Term and the first day of the 61st month of the original Base Term (each, an “Adjustment Date”) by multiplying the Base Rent payable immediately before such Adjustment Date by 3.5% and adding the resulting amount to the Base Rent payable immediately before such Adjustment Date, (vii) except as provided for in clause (iv) of this Section, Tenant shall not be entitled to any Rent Credit or any other abatement of Rent with respect to its lease of the Expansion Space, (viii) Tenant’s Share of Operating Expenses of Building and Tenant’s Share of Operating Expenses of Project shall be proportionately adjusted; (ix) reduced based on the Expansion Space Tenant Improvements shall be constructed in accordance with the Expansion Space Work Letter; (x) subject to Force Majeure delays and Tenant Delays (as defined in the Expansion Space Work Letter) the target date for completion remaining duration of the Expansion Space Base Term. Tenant Improvements shall be 7 months after Tenant’s have 10 business days following delivery of the Expansion Exercise Notice to Landlord; and (xiii) the terms deliver to Landlord written notification of Sections 41 (a) and 42 shall not be applicable to Tenant's exercise of the Expansion SpaceRight. Tenant’s failure Provided that no right to deliver a Tenant Expansion Exercise Notice prior to the Expansion Right Expiration Date shall be deemed an election expand is exercised by Tenant not to exercise Tenant’s Expansion Rightany tenant with superior rights, in which case Tenant shall be deemed entitled to have forever waived all of its rights under this Section 39(a), lease such Available Space upon the provisions of this Section 39(a) shall no longer applyterms and conditions set forth in the Expansion Notice.

Expansion in the Project. Subject to the provisions of this Section 39, Tenant shall have the one-time right, commencing on but not the Commencement Date and exercisable obligation, on or before March December 31, 2011 2022 (“Expansion Right Expiration Date”), to elect ) to expand the original Premises (the “Expansion RightRights”) to include up to 3 to be constructed buildings (and any related subterranean and other parking) at the balance of Project as shown on the western half of the first floor of the BuildingMaster Site Plan (as defined below) (“Building 7”, containing approximately 13,000 rentable square feet“Building 8” and “Building 9”, as more particularly described on Exhibit J (“Expansion Space”and if applicable), all upon the terms and conditions in this Section 39; provided, however, that all of the Expansion Requirements (as defined below) are met each time Tenant exercises an Expansion Right. Building 0, Xxxxxxxx 0 xxx Xxxlding 9 shall each be individually referred to herein as an “Expansion Building” and collectively as the “Expansion Buildings”. Landlord shall endeavor to cause the Expansion Building(s) to be constructed in the locations shown on the Master Site Plan, and Exhibit H to the Lease shall no longer apply. Landlord is processing a Community Plan Amendment (“CPA”) and PID Permit Amendment with the City of San Diego (“City”) to increase the development intensity for the Project site (as measured by gross floor area or authorized “average daily vehicle trips” (“ADT”)) necessary to allow for the development of the Expansion Buildings (collectively, “Additional Entitlements”). Landlord shall have no obligation to continue to attempt to process the Additional Entitlements after August 15, 2016, nor shall Landlord be required to incur costs and expenses in excess of $1,265,000 in connection with processing the Additional Entitlements. Following the earlier to occur of the City’s approval of the Additional Entitlements (and all applicable periods for filing a legal challenge to the Additional Entitlements have expired) and August 15, 2016, Landlord shall cause a site plan to be developed in accordance with Landlord’s requirements but after consultation with Tenant (“Master Site Plan”), which shall be reflective of the Additional Entitlements approved by the City together with any existing remaining entitlements at the Project. The Master Site Plan shall include, without limitation, the size, rentable square footage and location of the Expansion Building(s) and related parking. Notwithstanding the foregoing, Landlord and Tenant shall mutually agree prior to completion of the Master Site Plan and specify on the Master Site Plan the order in which Tenant may exercise its Expansion Rights with respect to the Expansion Building(s) by identifying the Expansion Buildings as Building 0, Xxxxxxxx 0 xxx Xxxlding 9, as applicable, and Tenant shall not have the right to elect to exercise an Expansion Right for a later numbered Expansion Building if Tenant has not previously or concurrently therewith exercised an Expansion Right with respect to the immediately preceding Expansion Building number. Landlord and Tenant acknowledge and agree that, notwithstanding the foregoing, the Master Site Plan may provide for one or two Expansion Buildings utilizing all of the Buildable Entitlements (as defined below) rather than three Expansion Buildings contemplated above; provided, however, in no event shall any Expansion Building on the Master Site Plan contain less than 100,000 rentable square feet of laboratory and/or office space. Landlord and Tenant acknowledge and agree that the Master Site Plan may be subject to changes requested or required by the City of San Diego. Notwithstanding anything to the contrary contained in this Section. If Lease, Tenant elects acknowledges that Additional Entitlements have not been approved by the City and, in the event the City does not approve the Additional Entitlements on terms and conditions acceptable to exercise Landlord in its sole and absolute (but good faith) discretion, Landlord shall have the right at any time, in Landlord’s sole and absolute (but good faith) discretion but after consultation with Tenant, to amend the Expansion RightRights (including the number of Expansion Buildings) to which Tenant is entitled under this Lease in a manner reasonably acceptable to Landlord and reflective of the actual entitlements and development intensity approved by the City. Landlord agrees that, while Tenant’s Expansion Rights remain in effect, Landlord shall not transfer any development intensity associated with the Additional Entitlements approved by the City to any other sites or projects. Landlord is seeking Additional Entitlements that will yield up to 459,245 additional rentable square feet. Notwithstanding anything to the contrary contained herein, if Tenant’s Expansion Rights are no longer in effect (e.g. because Tenant does not pay Land Rent other than as a result of Tenant having made the One Time Land Rent Payment (as defined below) to Landlord), Landlord may at any time(s) freely transfer any development intensity associated with the Additional Entitlements to and other sites or projects. Notwithstanding the foregoing, Landlord may freely transfer any development intensity associated with the Additional Entitlements in excess of those required to develop 459,245 rentable square feet of Expansion Building(s) to any other sites or projects. Upon Tenant’s written request from time to time during the Term, Landlord shall provide to Tenant updated information regarding the status of the Additional Entitlements, including, but not limited to, material correspondence between Landlord and any governmental authority regarding such entitlements. Landlord shall, on or before May 8, 2015, provide Tenant with an accounting of any costs and expenses incurred by Landlord in connection with processing the Expansion Right Expiration DateAdditional Entitlements and a budget for estimated future costs and expenses. Thereafter, deliver Landlord shall within a reasonable period, after written notice to request from Tenant each month, provide Tenant with an accounting of the costs and expenses incurred by Landlord of its election to exercise in the Expansion Right (“Expansion Exercise Notice”)preceding month in connection with processing the Additional Entitlements. If Tenant elects to lease the Expansion Space by delivering an Expansion Exercise Notice prior Notwithstanding anything to the Expansion Right Expiration Datecontrary contained in the Lease, Tenant shall be deemed have the right to agree notify Landlord in writing (“Waiver Notice”) at any time prior to lease August 16, 2016, that Tenant has no interest in Landlord processing the Expansion Space on the same terms and conditions as this LeaseAdditional Entitlement for Tenant’s benefit, except that the terms of this Lease shall be modified as follows effective as of the ES Commencement Date (as defined below): in which case (i) the definition of Premises shall be amended to include the Expansion Space; (ii) the Base Term of the Lease with respect to the original Premises and the Expansion Space shall be amended to end 54 months from the earlier of Substantial Completion (as defined in the Expansion Space Work Letter attached hereto as Exhibit K) by Landlord of the Expansion Space Tenant Improvements (as defined in the Expansion Space Work Letter) or the date Landlord could have delivered the Expansion Space but for Tenant Delays (as defined in the Expansion Space Work Letter)(“ES Commencement Date”); (iii) Tenant shall continue to pay Base Rent for the original Premises as provided for in this Lease and, in addition thereto, beginning on the ES Commencement Date, Tenant shall pay Base Rent for the Expansion Space at the then current monthly Base Rent per rentable square foot payable for the original Premises (as the same is adjusted from time to time pursuant to Section 4 of this Lease); (iv) with respect to the Base Rent payable by Tenant for the Expansion Space, Tenant shall only be required to pay Base Rent with respect to only 50% promptly reimburse Landlord for all of the Expansion Space commencing on third party costs and expenses incurred by Landlord in connection with Landlord processing the ES Commencement Date through the expiration of the 12th month following the ES Commencement Date and Tenant shall commence paying Base Rent with respect Additional Entitlements up to the entire Expansion Space on the first day date that is 30 days after Landlord’s receipt of the 13th month following the ES Commencement Date; (v) Tenant shall commence paying Operating Expenses with respect to the entire Expansion Space on the ES Commencement Date; (vi) Base Rent shall be increased on the first day of the 49th month of the original Base Term and the first day of the 61st month of the original Base Term (each, an “Adjustment Date”) by multiplying the Base Rent payable immediately before such Adjustment Date by 3.5% and adding the resulting amount to the Base Rent payable immediately before such Adjustment Date, (vii) except as provided for in clause (iv) of this Section, Tenant shall not be entitled to any Rent Credit or any other abatement of Rent with respect to its lease of the Expansion Space, (viii) Tenant’s Share Waiver Notice up to $1,265,000 (unless Tenant previously approved in writing costs and expenses in excess of Operating Expenses of Building and Tenant’s Share of Operating Expenses of Project shall be proportionately adjusted; (ix) the Expansion Space Tenant Improvements shall be constructed in accordance with the Expansion Space Work Letter; (x) subject to Force Majeure delays and Tenant Delays (as defined in the Expansion Space Work Letter) the target date for completion of the Expansion Space Tenant Improvements shall be 7 months after Tenant’s delivery of the Expansion Exercise Notice to Landlord; and (xiii) the terms of Sections 41 (a) and 42 shall not be applicable to the Expansion Space. Tenant’s failure to deliver a Tenant Expansion Exercise Notice prior to the Expansion Right Expiration Date shall be deemed an election by Tenant not to exercise Tenant’s Expansion Rightsuch amount, in which case Tenant shall be deemed required to also reimburse Landlord for such excess costs and expenses approved by Tenant), (ii) Tenant shall not be responsible for paying any additional costs thereafter incurred by Landlord in connection with processing the Additional Entitlements, (iii) Landlord may, at Landlord’s sole cost and expense and in its sole and absolute discretion, elect to continue to process the Additional Entitlements, (iv) Landlord shall have forever waived the right at any time(s) to (x) freely transfer any development intensity associated with any existing and/or Additional Entitlements to any other sites or projects and/or (y) if Tenant does not pay Land Rent as and when required, Landlord shall be free to construct additional building(s) at the Project and lease all or any portion of its rights such new building(s) to any third party(ies) (except as provided in Section 44(r)) upon any terms and conditions acceptable to Landlord, and (v) Tenant’s remaining Expansion Rights under this Section 39(a), the provisions of this Section 39(a) 39 shall no longer applyterminate.

Expansion in the Project. Tenant shall have the one-time right, commencing on the Commencement Date and exercisable on or before March December 31, 2011 (“Expansion Right Expiration Date”)2008, to elect to expand the original Premises (the “Expansion Right”) to include the balance all of the western half of the first floor of the Building, containing remaining approximately 13,000 62,393 rentable square feet, feet (as more particularly described the same may be adjusted based on Exhibit J the results of measurement provided for in Section 6) in the Building (“Expansion Space”), ) upon the terms and conditions contained in this Section. If Tenant elects to exercise the Expansion Right, Tenant shall, on or before the Expansion Right Expiration DateDecember 31, 2008, deliver written notice to Landlord of its election to exercise the Expansion Right (“Expansion Exercise Notice”). If Tenant elects to lease acknowledges and agrees that all of the Expansion Space by delivering an Expansion Exercise Notice prior to the Expansion Right Expiration Date, Tenant shall be deemed to agree to lease the Expansion Space on the same terms and conditions as this Lease, except that the terms of this Lease shall be modified as follows effective as apply to the leasing of the ES Commencement Date (as defined below): (i) the definition of Premises shall be amended to include the Expansion Space; , except that: (iia) the Base Term term of the Lease lease with respect to the original Premises and the Expansion Space shall be amended to end 54 months from commence upon the earlier of Substantial Completion (as defined in the Expansion Space Work Letter attached hereto as Exhibit KLetter) by Landlord of the Expansion Space Tenant Improvements (as defined in the Expansion Space Work Letter) or the date Landlord could have delivered within the Expansion Space but for Tenant Delays (as defined in the “Expansion Space Work Letter)(“ES Commencement DateTenant Improvements”); (iiib) Tenant shall continue to pay Base Rent for the original Premises as provided for in this Lease and, in addition thereto, beginning on the ES Commencement Datedate of Substantial Completion of the Expansion Space Tenant Improvements, Tenant shall pay Base Rent for the Expansion Space at the then current monthly Base Rent per rentable square foot payable for the original Premises (as the same is adjusted from time to time pursuant to Section 4 4(b) and (c) of this Lease), but specifically excluding any applicable reductions applicable to the original Premises provided for in Section 4(a) of this Lease; (ivc) subject to adjustment based on the results of the measurement provided for in Section 6), Tenant’s Share of the Building with respect to the Base Rent payable by Tenant for the Expansion Space, Tenant shall only be required to pay Base Rent with respect to only 50% of the Expansion Space commencing on the ES Commencement Date through the expiration of the 12th month following the ES Commencement Date and Tenant shall commence paying Base Rent with respect to the entire Expansion Space on the first day of the 13th month following the ES Commencement Datebe 49.%; (v) Tenant shall commence paying Operating Expenses with respect to the entire Expansion Space on the ES Commencement Date; (vi) Base Rent shall be increased on the first day of the 49th month of the original Base Term and the first day of the 61st month of the original Base Term (each, an “Adjustment Date”) by multiplying the Base Rent payable immediately before such Adjustment Date by 3.5% and adding the resulting amount to the Base Rent payable immediately before such Adjustment Date, (vii) except as provided for in clause (iv) of this Section, Tenant shall not be entitled to any Rent Credit or any other abatement of Rent with respect to its lease of the Expansion Space, (viii) Tenant’s Share of Operating Expenses of Building and Tenant’s Share of Operating Expenses of Project shall be proportionately adjusted; (ixd) the Expansion Space Tenant Improvements shall be constructed in accordance with the Work Letter except that (i) all references to “Premises” contained in the Work Letter shall be deemed to refer to the Expansion Space Work Letter; Space, (xii) subject to Force Majeure delays and Tenant Delays (as defined in the parties shall cause the Design Drawings for the Expansion Space Work Letter) the target date for completion of the Expansion Space Tenant Improvements shall be 7 months finalized no later than 30 days after Tenant’s delivery of the Expansion Exercise Notice to Landlord; , (iii) the parties shall cause the Construction Drawings shall be completed and approved by the parties and the City of South San Francisco no later then 90 days after Tenant’s delivery of the Expansion Exercise Notice to Landlord, (xiiiiv) Landlord shall, subject to the terms of Sections 41 the Work Letter, provide a tenant improvement allowance (a“Expansion Space TI Allowance”) and 42 shall not be applicable to for the construction of the Expansion Space. Tenant’s failure Space Tenant Improvements of up to deliver a Tenant Expansion Exercise Notice prior to $70.00 per rentable square foot of the Expansion Right Expiration Date Space which amount shall be deemed an election reduced by Tenant not the Lobby Cost (as defined in Section 5(a) of the Work Letter), (v) all references to exercise Tenant’s Expansion Right, “TI Allowance” contained in which case Tenant the Work Letter shall be deemed to mean the Expansion Space TI Allowance, and (vi) all references to “Landlord’s Work” and Tenant Improvements contained in the Work Letter shall be deemed to refer to only the Expansion Space Tenant Improvements; (e) Tenant shall commence paying Base Rent and Tenant’s Share of the Building with respect to Operating Expenses upon delivery of the Expansion Space to Tenant with the Expansion Space Tenant Improvements Substantially Completed ; and (f) Base Rent for the Expansion Space shall decrease by $0.012 for every $1.00 of Expansion Space TI Allowance that is not disbursed by Landlord for the Expansion Space Tenant Improvements in the same way that Base Rent is to be reduced for the original Premises in accordance with the terms of Section 4(a) up to a maximum reduction of $0.12 per month. Notwithstanding anything to the contrary contained in this Lease, in the event that Substantial Completion of the Expansion Space Tenant Improvements has been delayed as a result of a Tenant Delay, Tenant shall pay to Landlord, within thirty (30) days of demand therefor, an amount equal to the Base Rent that would have forever waived all of its rights under this Section 39(a), accrued in connection with the provisions of this Section 39(a) shall no longer applyExpansion Space if the Expansion Space Tenant Improvements had been Substantially Completed on the day they would have been Substantially Completed but for the Tenant Delay.

Expansion in the Project. Tenant shall have the one-time right, commencing on but not the Commencement Date and exercisable on or before March 31obligation, 2011 (“Expansion Right Expiration Date”), to elect to expand the original Premises (the “Project Expansion Right”) to include any Project Expansion Space (as defined below) in the balance of the western half of the first floor of the Building, containing approximately 13,000 rentable square feet, as more particularly described on Exhibit J (“Expansion Space”), Project upon the terms and conditions contained in this Section. If Tenant elects For purposes of this Section, “Project Expansion Space” means any space in the Project containing at least 50,000 rentable square feet of contiguous space in Building B that is not occupied by a tenant or that is occupied by an existing tenant whose lease is expiring within 6 months or less and such tenant does not wish to exercise the Expansion Right, Tenant renew (whether or not such tenant has a right to renew) its occupancy of such space. Landlord shall, on or when the availability of the Project Expansion Space becomes known (but not earlier than 180 days before the Expansion Right Expiration Datesuch availability), deliver to Tenant written notice to Landlord of its election to exercise the Expansion Right (“Project Expansion Exercise Notice”)) of the Project Expansion Space. If Tenant elects The Project Expansion Notice shall set forth the terms and conditions on which Landlord is prepared to lease the Project Expansion Space. The rental terms for the Project Expansion Space shall be the fair market rent, including market concessions (collectively, “Project Expansion Space FMR/Concessions”) as mutually determined by delivering an Landlord and Tenant, and the Project Expansion Exercise Notice prior shall set forth Landlord’s proposed Project Expansion Space FMR/Concessions. Tenant shall respond to the Project Expansion Right Expiration DateNotice within 10 business days after receipt thereof, which response shall state that Tenant shall be deemed to agree (1) declines to lease the Project Expansion Space, (2) agrees to lease the Project Expansion Space on the same terms set forth in the Project Expansion Notice (including the Project Expansion Space FMR/Concessions), in which event Landlord and conditions as this Lease, except that the terms Tenant shall within a period of 15 days thereafter execute and deliver an amendment to this Lease shall be modified as follows effective as of or a lease agreement for the ES Commencement Date (as defined below): (i) the definition of Premises shall be amended to include the Project Expansion Space; , or (ii3) desires to lease the Base Term of the Lease with respect to the original Premises and the Expansion Space shall be amended to end 54 months from the earlier of Substantial Completion (as defined in the Expansion Space Work Letter attached hereto as Exhibit K) by Landlord of the Expansion Space Tenant Improvements (as defined in the Expansion Space Work Letter) or the date Landlord could have delivered the Project Expansion Space but for Tenant Delays (as defined in good faith disagrees with the proposed Project Expansion Space Work Letter)(“ES Commencement Date”); (iii) Tenant shall continue to pay Base Rent for the original Premises as provided for in this Lease andFMR/Concessions, in addition theretowhich event Landlord and Tenant shall, beginning on the ES Commencement Datefor a period of up to 15 days, Tenant shall pay Base Rent negotiate in good faith for the Expansion Space at the then current monthly Base Rent per rentable square foot payable for the original Premises (as the same is adjusted from time to time pursuant to Section 4 of this Lease); (iv) with respect to the Base Rent payable by Tenant for the Expansion Space, Tenant shall only be required to pay Base Rent with respect to only 50% Tenant’s lease of the Expansion Space commencing on the ES Commencement Date through the expiration of the 12th month following the ES Commencement Date and Tenant shall commence paying Base Rent with respect to the entire Project Expansion Space on the first day of the 13th month following the ES Commencement Date; (v) Tenant shall commence paying Operating Expenses with respect to the entire mutually acceptable Project Expansion Space FMR/Concessions. If Landlord and Tenant are unable to agree on the ES Commencement Date; (vi) Base Rent shall be increased on the first day of the 49th month of the original Base Term and the first day of the 61st month of the original Base Term (each, an “Adjustment Date”) by multiplying the Base Rent payable immediately before such Adjustment Date by 3.5% and adding the resulting amount to the Base Rent payable immediately before such Adjustment Date, (vii) except as provided for in clause (iv) of this Section, Tenant shall not be entitled to any Rent Credit or any other abatement of Rent with respect to its lease of the Expansion Space, (viii) Tenant’s Share of Operating Expenses of Building and Tenant’s Share of Operating Expenses of Project shall be proportionately adjusted; (ix) the Expansion Space Tenant Improvements shall be constructed FMR/Concessions within such 15 day period after negotiating in accordance with the Expansion Space Work Letter; (x) subject to Force Majeure delays and Tenant Delays (as defined in the Expansion Space Work Letter) the target date for completion of the Expansion Space Tenant Improvements shall be 7 months after Tenant’s delivery of the Expansion Exercise Notice to Landlord; and (xiii) the terms of Sections 41 (a) and 42 shall not be applicable to the Expansion Space. Tenant’s failure to deliver a Tenant Expansion Exercise Notice prior to the Expansion Right Expiration Date shall be deemed an election by Tenant not to exercise Tenant’s Expansion Right, in which case Tenant shall be deemed to have forever waived all of its rights under this Section 39(a)good faith, the provisions of this Section 39(a) parties shall no longer applyproceed to arbitration as set forth below.

Expansion in the Project. Tenant shall have the one-time right, commencing on the Commencement Date and exercisable on If Landlord intends to accept a bona fide offer or before March 31, 2011 (“Expansion Right Expiration Date”), to elect to expand the original Premises otherwise agree (the “Expansion RightPending Deal”) to include the balance lease all or any portion of the western half Available Space to any third party, Landlord shall, so long as Tenant’s rights hereunder are preserved, deliver to Tenant written notice (the “Pending Deal Notice”) of the first floor material terms of such Pending Deal. For purposes of this Section 39(a), “Available Space” shall mean the approximately 10,000 rentable square feet in the building at the Project located at 0000 Xxx Xxxxx Xxxx and which space is currently leased to A.M. Xxxxxx & Associates, LLC. Within 5 business days after Tenant’s receipt of the BuildingPending Deal Notice, containing approximately 13,000 rentable square feet, as more particularly described on Exhibit J Tenant shall deliver to Landlord written notice (the “Expansion SpacePending Deal Acceptance”), upon the terms and conditions contained in this Section. If ) if Tenant elects to exercise lease the Expansion Right, Tenant shall, on or before Available Space described in the Expansion Right Expiration Date, deliver written notice Pending Deal Notice pursuant to Landlord of its the terms set forth in the Pending Deal Notice. Tenant’s right to receive the Pending Deal Notice and election to exercise lease or not lease the Expansion Available Space pursuant to this Section 39 is hereinafter referred to as the “Right (“Expansion Exercise Notice”). of First Refusal.” If Tenant elects to lease the Expansion Available Space described in the Pending Deal Notice by delivering an Expansion Exercise Notice prior to the Expansion Right Expiration DatePending Deal Acceptance within the required 5 business day period, Tenant shall be deemed to agree to lease the Expansion Available Space on Landlord’s standard form of office lease setting forth the same terms for the rental of the Available Space consistent with those set forth in the Pending Deal Notice and conditions as this Lease, except which office lease is modified to the extent practicable (bearing in mind that the terms of this Lease shall Available Space will be modified as follows effective as of the ES Commencement Date (as defined below): (ileased for office use only) the definition of Premises shall be amended to include the Expansion Space; (ii) the Base Term of the Lease with respect to the original Premises and the Expansion Space shall be amended to end 54 months from the earlier of Substantial Completion (as defined in the Expansion Space Work Letter attached hereto as Exhibit K) by Landlord of the Expansion Space Tenant Improvements (as defined in the Expansion Space Work Letter) or the date Landlord could have delivered the Expansion Space but for Tenant Delays (as defined in the Expansion Space Work Letter)(“ES Commencement Date”); (iii) Tenant shall continue to pay Base Rent for the original Premises as provided for negotiated changes in this Lease and, in addition thereto, beginning on the ES Commencement Date, Tenant shall pay Base Rent for the Expansion Space at the then current monthly Base Rent per rentable square foot payable for the original Premises (as the same is adjusted from time to time pursuant to Section 4 of this Lease); (iv) with respect to the Base Rent payable by Tenant for the Expansion Space, Tenant shall only be required to pay Base Rent with respect to only 50% of the Expansion Space commencing on the ES Commencement Date through the expiration of the 12th month following the ES Commencement Date and Tenant shall commence paying Base Rent with respect to the entire Expansion Space on the first day of the 13th month following the ES Commencement Date; (v) Tenant shall commence paying Operating Expenses with respect to the entire Expansion Space on the ES Commencement Date; (vi) Base Rent shall be increased on the first day of the 49th month of the original Base Term and the first day of the 61st month of the original Base Term (each, an “Adjustment Date”) by multiplying the Base Rent payable immediately before such Adjustment Date by 3.5% and adding the resulting amount to the Base Rent payable immediately before such Adjustment Date, (vii) except as provided for in clause (iv) of this Section, Tenant shall not be entitled to any Rent Credit or any other abatement of Rent with respect to its lease of the Expansion Space, (viii) Tenant’s Share of Operating Expenses of Building and Tenant’s Share of Operating Expenses of Project shall be proportionately adjusted; (ix) the Expansion Space Tenant Improvements shall be constructed in accordance with the Expansion Space Work Letter; (x) subject to Force Majeure delays and Tenant Delays (as defined in the Expansion Space Work Letter) the target date for completion of the Expansion Space Tenant Improvements shall be 7 months after Tenant’s delivery of the Expansion Exercise Notice to Landlord; and (xiii) the terms of Sections 41 (a) and 42 shall not be applicable to the Expansion Space. Tenant’s failure to deliver a Tenant Expansion Exercise Notice prior Pending Deal Acceptance to Landlord within the Expansion Right Expiration Date required 5 business day period shall be deemed to be an election by Tenant not to exercise Tenant’s Expansion Right, right to lease the Available Space in which case Landlord shall have the right to lease the Available Space to any third party on the same terms and conditions as those specified in the Pending Deal Notice and Tenant shall be deemed have no further right to have forever waived all lease any of its rights under this Section 39(a), the provisions of this Section 39(a) shall no longer applyAvailable Space.

Expansion in the Project. Tenant shall have the one-time right, commencing on but not the Commencement Date and exercisable on or before March 31obligation, 2011 (“Expansion Right Expiration Date”), to elect to expand the original Premises (the “Expansion Right”) to include any Available Space in the balance of the western half of the first floor of the Building, containing approximately 13,000 rentable square feet, as more particularly described on Exhibit J (“Expansion Space”), Project upon the terms and conditions contained in this Section. For purposes of this Section 39(a), “Available Space” shall mean any space on the 2nd Floor or the 4th Floor of the Project which is not occupied by a tenant or which is occupied by an existing tenant whose lease is expiring within 6 months or less and such tenant does not wish to renew (whether or not such tenant has a right to renew) its occupancy of such space. If there is any Available Space in the Project, Landlord shall, at such time as Landlord shall elect so long as Tenant’s rights hereunder are preserved, deliver to Tenant elects written notice (the “Expansion Notice”) of such Available Space, together with the terms and conditions on which Landlord is prepared to lease Tenant such Available Space. Tenant acknowledges and agrees that such terms and conditions shall include, without limitation, the following: (i) a requirement that Tenant exercise its Expansion Right with respect to no less than the entire Available Space described in the applicable Expansion Notice, and (ii) a requirement that the Term of this Lease be extended to expire concurrently with the term of the lease offered for the Available Space. Tenant shall have 20 days following delivery of the Expansion Right, Notice (“Negotiation Period”) to Tenant shall, on or before to deliver to Landlord written notification of Tenant’s exercise of the Expansion Right Expiration Date, deliver written notice and to negotiate with Landlord enter into an amendment to this Lease setting forth the terms for the rental of its election to exercise the Available Space consistent with those set forth in the Expansion Right (“Expansion Exercise Notice”). If Tenant elects to lease the Expansion Space by delivering an Expansion Exercise Notice prior to the Expansion Right Expiration Date, Tenant shall be deemed to agree to lease the Expansion Space on the same terms and conditions as this Lease, except that otherwise consistent with the terms of this Lease shall be modified as follows effective as of (the ES Commencement Date (as defined below): (i) the definition of Premises shall be amended to include the Expansion Space; (ii) the Base Term of the “Lease with respect to the original Premises and the Expansion Space shall be amended to end 54 months from the earlier of Substantial Completion (as defined in the Expansion Space Work Letter attached hereto as Exhibit K) by Landlord of the Expansion Space Tenant Improvements (as defined in the Expansion Space Work Letter) or the date Landlord could have delivered the Expansion Space but for Tenant Delays (as defined in the Expansion Space Work Letter)(“ES Commencement DateAmendment”); (iii) Tenant shall continue . Provided that no right to pay Base Rent for the original Premises as provided for in this Lease and, in addition thereto, beginning on the ES Commencement Dateexpand is exercised by any tenant with superior rights, Tenant shall pay Base Rent for the Expansion Space at the then current monthly Base Rent per rentable square foot payable for the original Premises (as the same is adjusted from time to time pursuant to Section 4 of this Lease); (iv) with respect to the Base Rent payable by Tenant for the Expansion Space, Tenant shall only be required to pay Base Rent with respect to only 50% of the Expansion Space commencing on the ES Commencement Date through the expiration of the 12th month following the ES Commencement Date and Tenant shall commence paying Base Rent with respect to the entire Expansion Space on the first day of the 13th month following the ES Commencement Date; (v) Tenant shall commence paying Operating Expenses with respect to the entire Expansion Space on the ES Commencement Date; (vi) Base Rent shall be increased on the first day of the 49th month of the original Base Term and the first day of the 61st month of the original Base Term (each, an “Adjustment Date”) by multiplying the Base Rent payable immediately before such Adjustment Date by 3.5% and adding the resulting amount to the Base Rent payable immediately before such Adjustment Date, (vii) except as provided for in clause (iv) of this Section, Tenant shall not be entitled to any Rent Credit or any other abatement of Rent with respect to its lease of the Expansion Space, (viii) Tenant’s Share of Operating Expenses of Building such Available Space upon such terms and Tenant’s Share of Operating Expenses of Project conditions as Tenant and Landlord shall be proportionately adjusted; (ix) the Expansion Space Tenant Improvements shall be constructed in accordance with the Expansion Space Work Letter; (x) subject to Force Majeure delays and Tenant Delays (as defined in the Expansion Space Work Letter) the target date for completion of the Expansion Space Tenant Improvements shall be 7 months after Tenant’s delivery of the Expansion Exercise Notice to Landlord; and (xiii) the terms of Sections 41 (a) and 42 shall not be applicable to the Expansion Space. Tenant’s failure to deliver a Tenant Expansion Exercise Notice prior to the Expansion Right Expiration Date shall be deemed an election by Tenant not to exercise Tenant’s Expansion Right, in which case Tenant shall be deemed to have forever waived all of its rights under this Section 39(a), the provisions of this Section 39(a) shall no longer applynegotiate.

Expansion in the Project. Tenant shall have the one-time right, commencing on but not the Commencement Date and exercisable on or before March 31obligation, 2011 (“Expansion Right Expiration Date”), to elect to expand the original Premises (the “Expansion Right”) to include any Available Space in the balance of the western half of the first floor of the Building, containing approximately 13,000 rentable square feet, as more particularly described on Exhibit J (“Expansion Space”), Project; upon the terms and conditions contained in this Section. For purposes of this Section 39(a). “Available Space” shall mean any space in the Project which is not occupied by a tenant or which is occupied by a tenant whose lease is expiring within 6 months or less and such tenant does not wish to renew (whether or not such tenant has a right to renew) its occupancy of such space. If there is any Available Space in the Project, Landlord shall, at such time as Landlord shall elect so long as Tenant’s rights hereunder are preserved, deliver to Tenant elects written notice (the “Expansion Notice”) of such Available Space (“Identified Space”), together with the terms and conditions on which Landlord is prepared to exercise lease Tenant such Identified Space. Tenant shall have 10 days following delivery of the Expansion Right, Tenant shall, on or before the Expansion Right Expiration Date, Notice to deliver written notice to Landlord written notification of its election to Txxxxx’s exercise of the Expansion Right (“Expansion Exercise Notice”). If Tenant elects Provided that no right to lease the Expansion Space expand is exercised by delivering an Expansion Exercise Notice prior to the Expansion Right Expiration Dateany tenant with superior rights, Tenant shall be deemed to agree entitled to lease such Identified Space upon the Expansion Space on the same terms and conditions as this Leaseset forth in the Expansion Notice, except that the terms of this Lease shall be modified as follows effective as of the ES Commencement Date (as defined below): (i) the definition of Premises shall be amended to include the Expansion Space; (ii) the Base Term of the Lease with respect to the original Premises and the Expansion Space shall be amended to end 54 months from the earlier of Substantial Completion (as defined in the Expansion Space Work Letter attached hereto as Exhibit K) by Landlord of the Expansion Space Tenant Improvements (as defined in the Expansion Space Work Letter) or the date Landlord could have delivered the Expansion Space but for Tenant Delays (as defined in the Expansion Space Work Letter)(“ES Commencement Date”); (iii) Tenant shall continue to pay Base Rent for the original Premises as provided for in this Lease and, in addition thereto, beginning on the ES Commencement Date, Tenant shall pay Base Rent for the Expansion Identified Space at the then current monthly Base Rent per rentable square foot payable for the original Premises Market Rate as determined by Landlord and agreed to by Tenant (as and the same is shall be adjusted from time to time pursuant to Section 4 of this Lease); (iv) with respect . For the purposes of this Section 39(a). “Market Rate” shall mean the then market rental rate as determined by Landlord and agreed to by Tenant, which shall in no event be less than the Base Rent payable by Tenant for the Expansion Space, Tenant shall only be required to pay Base Rent with respect to only 50% original Premises as of the Expansion Space commencing on the ES Commencement Date through the expiration commencement date of the 12th month following the ES Commencement Date and Tenant shall commence paying Base Rent Lease with respect to the entire Expansion Space Identified Space. If Landlord and Tenant are unable to agree on the first day of Market Rate for the 13th month following Identified Space after negotiating in good faith, the ES Commencement Date; (v) Tenant shall commence paying Operating Expenses with respect to the entire Expansion Space on the ES Commencement Date; (vi) Base Rent shall Market Rate will be increased on the first day of the 49th month of the original Base Term and the first day of the 61st month of the original Base Term (each, an “Adjustment Date”) by multiplying the Base Rent payable immediately before such Adjustment Date by 3.5% and adding the resulting amount to the Base Rent payable immediately before such Adjustment Date, (vii) except as provided for in clause (iv) of this Section, Tenant shall not be entitled to any Rent Credit or any other abatement of Rent with respect to its lease of the Expansion Space, (viii) Tenant’s Share of Operating Expenses of Building and Tenant’s Share of Operating Expenses of Project shall be proportionately adjusted; (ix) the Expansion Space Tenant Improvements shall be constructed determined through arbitration in accordance with the Expansion Space Work Letter; (x) subject to Force Majeure delays and Tenant Delays (as defined in the Expansion Space Work Letter) the target date for completion of the Expansion Space Tenant Improvements shall be 7 months after Tenant’s delivery of the Expansion Exercise Notice to Landlord; and (xiii) the terms of Sections 41 (a) and 42 shall not be applicable to the Expansion SpaceSection 40(b). Tenant’s failure to deliver a Tenant Expansion an Exercise Notice prior to the Expansion Right Expiration Date Landlord shall be deemed to be an election by Tenant not to exercise Tenant’s Expansion RightRight with respect to the Identified Space, in which case Tenant shall be deemed to have forever waived all of its no further rights under this Section 39(a)) with respect to such Identified Space, and Landlord shall have the provisions of this Section 39(a) shall no longer applyright to lease the Identified Space to any third party on any terms and conditions acceptable to Landlord.

Expansion in the Project. Tenant shall have Subject to Landlord’s obtaining all required Approvals (subject to the one-time right, commencing on the Commencement Date and exercisable on or before March 31, 2011 (“Expansion Right Expiration Date”third paragraph of Section 2 above), to elect to expand Landlord shall, within 24 months after the original Premises Rent Commencement Date, construct a second building at the Project containing approximately 40,000-60,000 rentable square feet of rentable space (the “Expansion RightSpectrum 3 Building”). Landlord shall, in the exercise of its sole and absolute discretion, make the decisions as to all matters regarding the Spectrum 3 Building including, without limitation, the size thereof. Tenant acknowledges that, if Landlord so elects in its sole and absolute discretion, all or a portion of the Spectrum 3 Building may consist of small suites (e.g., a science hotel). So long as Tenant is then leasing not less than 75% of the Premises, then, subject to the terms of this Section 39, the first time that Landlord intends to accept a written proposal (the “Pending Deal”) to include the balance lease all or a portion of the western half ROFR Space (as hereinafter defined) to a third party, Landlord shall deliver to Tenant written notice (the “Pending Deal Notice”) of the first floor existence and the material terms of such Pending Deal. For purposes of this Section 39(a), “ROFR Space” shall mean any space in the Spectrum 3 Building, containing approximately 13,000 rentable square feet, as more particularly . Tenant shall be entitled to exercise its right under this Section 39(a) only with respect to the entire ROFR Space described on Exhibit J in such Pending Deal Notice (the “Expansion Identified Space”). Within 10 business days after Tenant’s receipt of the Pending Deal Notice, upon Tenant shall deliver to Landlord written notice (the terms and conditions contained in this Section. If “Space Acceptance Notice”) if Tenant elects to exercise lease the Expansion Right, Tenant shall, on or before Identified Space. Tenant’s right to receive the Expansion Right Expiration Date, deliver written notice to Landlord of its Pending Deal Notice and election to exercise lease or not lease the Expansion Identified Space pursuant to this Section 39(a) is hereinafter referred to as the “Right (“Expansion Exercise Notice”). of Refusal.” If Tenant elects to lease the Expansion Identified Space by delivering an Expansion Exercise the Space Acceptance Notice prior to within the Expansion Right Expiration Daterequired 10 business day period, Tenant shall be deemed to agree to lease the Expansion Identified Space on the same general terms and conditions as this Lease, Lease except that the terms of this the Lease shall be modified as follows effective as to reflect the terms of the ES Commencement Date (as defined below): Pending Deal Notice for the rental of the Identified Space, provided, however, that (i) if the definition term of Premises shall be amended the lease with respect to include the Expansion Space; (ii) Identified Space would pursuant to the Base Term Pending Deal expire prior to the term of the Lease with respect to the original Premises and then-existing Premises, then the Expansion term of the Lease with respect to the Identified Space shall be amended modified to end 54 months from be co-terminous with the earlier Term of Substantial Completion this Lease with respect to the then-existing Premises, and (ii) if the term of the lease with respect to the Identified Space is modified to be co-terminous with the term of the then-existing Premises pursuant to sub-section (i), then the economic terms set forth in the Pending Deal Notice shall be equitably adjusted to account for such extension of the term with respect to the Identified Space, provided that such adjustment of the economic terms shall be no less favorable to Landlord on an annual basis than the economic terms set forth in the Pending Deal (and with market rate Exhibit 10.10 3215 Merrxxxxxx/Xxxtex - Page 36 annual increases in base rent for the Identified Space for that portion of the lease term for the Identified Space beyond the term provided for in the Pending Deal), as reasonably determined by Landlord and Tenant. If the term of the lease with respect to the Identified Space would pursuant to the Pending Deal expire after the term of this Lease with respect to the then-existing Premises, then the term of the lease with respect to the Identified Space shall be as provided in the Pending Deal (and, for the avoidance of any doubt, no adjustment shall be made to the term of this Lease for the then-existing Premises). Notwithstanding anything to the contrary contained herein, in no event shall the Work Letter or the TI Allowance (as defined in the Expansion Space Work Letter attached hereto as Exhibit K) by Landlord of the Expansion Space Tenant Improvements (as defined in the Expansion Space Work Letter) or apply to the date Landlord could have delivered Identified Space, as the Expansion Space but for Tenant Delays terms and conditions of the Pending Deal Notice (as defined in the Expansion Space Work Letter)(“ES Commencement Date”may be equitably adjusted by Landlord); (iii) Tenant shall continue to pay Base Rent for the original Premises as , including any tenant improvement allowance provided for in this Lease andthe Pending Deal Notice, in addition thereto, beginning on the ES Commencement Date, shall apply. If Tenant shall pay Base Rent for the Expansion Space at the then current monthly Base Rent per rentable square foot payable for the original Premises (as the same is adjusted from time to time pursuant to Section 4 of this Lease); (iv) with respect to the Base Rent payable by Tenant for the Expansion Space, Tenant shall only be required to pay Base Rent with respect to only 50% of the Expansion Space commencing on the ES Commencement Date through the expiration of the 12th month following the ES Commencement Date and Tenant shall commence paying Base Rent with respect to the entire Expansion Space on the first day of the 13th month following the ES Commencement Date; (v) Tenant shall commence paying Operating Expenses with respect to the entire Expansion Space on the ES Commencement Date; (vi) Base Rent shall be increased on the first day of the 49th month of the original Base Term and the first day of the 61st month of the original Base Term (each, an “Adjustment Date”) by multiplying the Base Rent payable immediately before such Adjustment Date by 3.5% and adding the resulting amount to the Base Rent payable immediately before such Adjustment Date, (vii) except as provided for in clause (iv) of this Section, Tenant shall not be entitled to any Rent Credit or any other abatement of Rent with respect to its lease of the Expansion Space, (viii) Tenant’s Share of Operating Expenses of Building and Tenant’s Share of Operating Expenses of Project shall be proportionately adjusted; (ix) the Expansion Space Tenant Improvements shall be constructed in accordance with the Expansion Space Work Letter; (x) subject to Force Majeure delays and Tenant Delays (as defined in the Expansion Space Work Letter) the target date for completion of the Expansion Space Tenant Improvements shall be 7 months after Tenant’s delivery of the Expansion Exercise Notice to Landlord; and (xiii) the terms of Sections 41 (a) and 42 shall not be applicable to the Expansion Space. Tenant’s failure fails to deliver a Tenant Expansion Exercise Space Acceptance Notice prior to Landlord within the Expansion Right Expiration Date shall be deemed an election by Tenant not to exercise Tenant’s Expansion Rightrequired 10 business day period, in which case Tenant shall be deemed to have forever waived all of its rights under this Section 39(a) to lease the Identified Space identified in the applicable Pending Deal Notice, and Landlord shall have the right to lease such Identified Space to the third party subject to the Pending Deal (or an affiliate of such third party) (“Pending Deal Party”). Tenant’s Right of First Refusal with respect to such Identified Space shall be restored if Landlord fails to enter into an agreement to lease the Identified Space to the Pending Deal Party within 6 months after Landlord’s deliver of the Pending Deal Notice to Tenant. Tenant’s Right of First Refusal shall exist with respect to each portion of the Spectrum 3 Building until such portion of the Spectrum 3 Building has been subject to a Pending Deal. For the avoidance of any doubt, Tenant shall in no event be entitled to a second Pending Deal Notice with respect to any space in the Spectrum 3 Building once Landlord has entered into a lease with a Pending Deal Party with respect to such space in the Spectrum 3 Building. If Tenant leases a portion of the Spectrum 3 Building and a portion of the Spectrum 3 Building is leased to a third party, the following Lease provisions shall also apply to Tenant’s leasing of the Identified Space (and in the event of any conflict between the provisions of this paragraph and the other provisions of the this Lease with respect to the leasing of the Identified Space, the provisions of this paragraph shall govern): (i) Tenant shall not, without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed, use the Identified Space in any manner which will require ventilation, air exchange, heating, gas, steam, electricity or water beyond the existing capacity of the Spectrum 3 Building as proportionately allocated to the Identified Space based upon Tenant’s share of the Spectrum 3 Building as usually furnished for the Permitted Use, (ii) Tenant’s Alterations affecting the structure of the Spectrum 3 Building or the Building Systems serving the Spectrum 3 Building shall require Landlord’s consent which consent may be given or withheld in Landlord’s sole discretion, (iii) Landlord may equitably increase, in Landlord’s reasonable discretion, Tenant’s share of Operating Expenses for any item of expense or cost reimbursable by Tenant that relates to a repair, replacement, or service that benefits only the Identified Space or only a portion of the Spectrum 3 Building that includes the Identified Space or that varies with occupancy or use. Also, so long as Tenant leases any portion of the Spectrum 3 Building, Section 39(a5(hh) shall no longer applybe deleted in its entirety.

Expansion in the Project. Tenant shall have the one-time right, commencing on but not the Commencement Date and exercisable obligation, on or before March 31January 1, 2011 2015 (“Expansion Right Expiration Date”), to elect ) to expand the original Premises (the “Expansion RightRights”) to include the balance to be constructed buildings (including any related subterranean parking) contemplated on the project site plan attached hereto as Exhibit H (“Project Site Plan”) as (i) Building 6, which Landlord currently contemplates will contain 4 floors and a total of the western half of the first floor of the Building, containing approximately 13,000 134,804 rentable square feet, as more particularly described on Exhibit J feet of laboratory and/or office space (“Expansion SpaceBuilding 6”), and (ii) Building 7, which Landlord currently contemplates will contain 4 floors and a total of approximately 134,804 rentable square feet of laboratory and/or office space (“Building 7”), all upon the terms and conditions contained in this SectionSection 39; provided, however, that all of the Expansion Requirements (as defined below) are met each time Tenant exercises an Expansion Right. If Building 6 and Building 7 shall each be individually referred to herein as an “Expansion Building” and collectively as the “Expansion Buildings”. Upon Tenant's written request from time to time during the Term (but in no event more than twice during any calendar year), Landlord shall provide to Tenant updated information regarding the status of entitlements for the Project, including, but not limited to, material correspondence between Landlord and any governmental authority regarding such entitlements. Notwithstanding anything to the contrary contained herein, Tenant acknowledges that, as of the date of this Lease, (a) Landlord has not yet received approval from the City of San Diego for the building entitlements required for the construction of Building 5 (“Building 5 Entitlements”), (b) the parties currently contemplate that the City of San Diego will approve Building 5 Entitlements equal to 22,116 square feet, (c) if the City of San Diego approves Building 5 Entitlements of less or more than 22,116 square feet, the Buildable Entitlements (as defined below) available for the Expansion Buildings shall be proportionately adjusted, and (d) if the Buildable Entitlements available for the Expansion Buildings are so adjusted, the rentable square footages of Building 6 and Building 7 shall be adjusted such that each equals 50% of the available Buildable Entitlements. As used in this Lease, “Expansion Requirements” shall mean that all of the following requirements are satisfied: (i) Tenant is not in material Default under any provision of the Lease; (ii) Tenant has a credit rating of “BBB-” or better from Standard & Poor’s Corporation, or “Baa3” or better from Xxxxx’x Investors Service, Inc. (or in each case any successor thereof), or, in the event that Tenant does not have a credit rating at that time, Tenant has a net worth (as determined in accordance with GAAP) that is not less than the Minimum Net Worth Amount; and (iii) Illumina, Inc., a Delaware corporation, or any entity leasing or subleasing the Premises pursuant to a Permitted Assignment, is the tenant occupying and operating out of at least 70% of the Premises under this Lease. Subject to the terms and conditions of this Section 39, if Tenant elects to exercise an Expansion Right with respect to Building 6 only or both of the Expansion RightBuildings, Tenant shall, on or before the Expansion Right Expiration Date, deliver written notice to Landlord of its election to exercise such Expansion Right (each, an “Expansion Notice”), which Expansion Notice shall identify the Expansion Building(s) with respect to which Tenant is exercising its Expansion Right (“Identified Expansion Exercise NoticeBuilding”) along with a deposit in the amount of $100,000 multiplied by the number of Identified Expansion Buildings identified in the Expansion Notice for use by Landlord for the initial costs actually incurred by Landlord in connection with the initial design and pricing (collectively, Initial Costs”) for each Identified Expansion Building (“Expansion Deposit”). If Landlord agrees to contribute up to $100,000 for the Initial Costs associated with each Identified Expansion Building following the exhaustion of Tenant’s applicable Expansion Deposit for such Identified Expansion Building (evidence of which exhaustion/contribution shall be provided to Tenant elects upon Tenant's written request from time to lease time in the form of a detailed line item statement). Notwithstanding anything to the contrary contained herein, Tenant acknowledges and agrees that (i) Landlord shall have no obligation to commence the design and/or construction of any Expansion Space by Building prior to Tenant delivering an Expansion Exercise Notice prior and an Expansion Deposit with respect to the such Expansion Right Expiration DateBuilding to Landlord, Tenant shall be deemed to agree to lease the Expansion Space on the same terms and conditions as this Lease, except that the terms of this Lease shall be modified as follows effective as of the ES Commencement Date (as defined below): (i) the definition of Premises shall be amended to include the Expansion Space; (ii) in no event shall Tenant have the Base Term of the Lease right to exercise an Expansion Right with respect to Building 7 if Tenant has not previously or concurrently therewith exercised an Expansion Right with respect to Building 6 and Landlord shall have the original Premises right, in Landlord’s sole and the Expansion Space shall be amended absolute discretion, to end 54 months from the earlier of Substantial Completion (as defined in the Expansion Space Work Letter attached hereto as Exhibit K) by Landlord of the Expansion Space Tenant Improvements (as defined in the Expansion Space Work Letter) or the date Landlord could have delivered the Expansion Space but elect not to construct Building 7 for Tenant Delays (as defined in the Expansion Space Work Letter)(“ES Commencement Date”); (iii) if Tenant shall continue to pay Base Rent for the original Premises elects as provided for in this Lease andto rescind its Expansion Notice with respect to Building 6, (iii) in addition thereto, beginning on no event shall Tenant have the ES Commencement Date, Tenant shall pay Base Rent for right under any circumstances to exercise an Expansion Right with respect to less than all of the Expansion Space at the then current monthly Base Rent per rentable square foot payable for the original Premises (as the same is adjusted from time to time pursuant to Section 4 footage of this Lease); either Expansion Building, (iv) with respect to the Base Rent payable by Tenant for Project Site Plan including, without limitation, the Expansion Spacenumber of floors, Tenant shall only be required to pay Base Rent with respect to only 50% rentable square footages, configuration and locations of the Expansion Space commencing on Buildings within the ES Commencement Date through Project are not guaranteed and are subject to change by Landlord in the expiration exercise of Landlord’s reasonable discretion; provided, however, that so long as all of Tenant’s Expansion Rights remain in full force and effect under this Section 39, any such changes made by Landlord shall not materially and adversely impact: (A) the 12th month following use of Building 6 and/or Building 7 for the ES Commencement Date and Tenant shall commence paying Base Rent with respect to the entire Expansion Space on the first day of the 13th month following the ES Commencement Date; (v) Tenant shall commence paying Operating Expenses with respect to the entire Expansion Space on the ES Commencement Date; (vi) Base Rent shall be increased on the first day of the 49th month of the original Base Term and the first day of the 61st month of the original Base Term (each, an “Adjustment Date”) by multiplying the Base Rent payable immediately before such Adjustment Date by 3.5% and adding the resulting amount to the Base Rent payable immediately before such Adjustment DatePermitted Use, (vii) except as provided for in clause (iv) of this Section, Tenant shall not be entitled to any Rent Credit or any other abatement of Rent with respect to its lease of the Expansion Space, (viiiB) Tenant’s Share of Operating Expenses of Building and ability to access the Premises, (C) Tenant’s Share of Operating Expenses of Project shall be proportionately adjusted; parking rights under Section 10, or (ixD) the Expansion Space total square footage available to Tenant Improvements shall be constructed in accordance with the Expansion Space Work Letter; (x) subject to Force Majeure delays and Tenant Delays (as defined in the Expansion Space Work Letter) the target date for completion expansion of the Expansion Space Tenant Improvements shall be 7 months after Tenant’s delivery of the Expansion Exercise Notice Premises pursuant to Landlord; and (xiii) the terms of Sections 41 (a) and 42 shall not be applicable to the Expansion Space. Tenant’s failure to deliver a Tenant Expansion Exercise Notice prior to the Expansion Right Expiration Date shall be deemed an election by Tenant not to exercise Tenant’s Expansion Right, in which case Tenant shall be deemed to have forever waived all of its rights under this Section 39(a), and (v) Landlord’s obligation to develop each Expansion Building on receipt of the provisions applicable Expansion Notice is expressly conditioned upon and subject to, and with Landlord having no liability for the failure of any of such conditions (except as otherwise expressly provided herein), Landlord’s ability to obtain, on terms and conditions reasonably acceptable to Landlord, all governmental approvals necessary to permit the design and construction of the applicable Expansion Building, the reasonable availability of materials and labor and all other conditions outside of Landlord’s reasonable control. If Tenant exercises its Expansion Rights hereunder with respect to either Expansion Building and does not exercise any of its rescission rights under Section 39(c) with respect thereto, Landlord agrees to use reasonable and diligent efforts to pursue and obtain as contemplated under this Section 39(a) shall no longer applyLease and the applicable work letter the necessary governmental approvals to permit the design and construction of the applicable Expansion Building.

Expansion in the Project. Landlord, in Landlord’s sole discretion, may at any time construct a second building at the Project (the “Spectrum 3 Building”). Without limiting the foregoing, Landlord shall, in the exercise of its sole and absolute discretion, make the decisions as to all matters regarding the Spectrum 3 Building including, without limitation, the size thereof. Tenant acknowledges that, if Landlord so elects in its sole and absolute discretion, all or a portion of the Spectrum 3 Building may consist of small suites (e.g., a science hotel). Subject to the terms of this Section 39, each time that Landlord intends to accept a written proposal (the “Pending Deal”) to lease all or a portion of the ROFR Space (as hereinafter defined) to a third party, Landlord shall deliver to Tenant written notice (the “Pending Deal Notice”) of the existence and the material terms of such Pending Deal. For purposes of this Section 39(a), “ROFR Space” shall mean any space in the Spectrum 3 Building so long as Landlord has not previously provided Tenant with Pending Deal Notice(s) which in the aggregate cover fifty percent (50%) or more of the total rentable square footage in the Spectrum 3 Building. Tenant shall be entitled to exercise its right under this Section 39(a) only with respect to the entire ROFR Space described in such Pending Deal Notice (the “Identified Space”). Within 5 business days after Tenant’s receipt of the Pending Deal Notice, Tenant shall deliver to Landlord written notice (the “Space Acceptance Notice”) if Tenant elects to lease the Identified Space. Tenant’s right to receive the Pending Deal Notice and election to lease or not lease the Identified Space pursuant to this Section 39(a) is hereinafter referred to as the “Right of Refusal.” Notwithstanding any provision to the contrary in this Lease, once Landlord has provided Tenant with Pending Deal Notice(s) which in the aggregate cover fifty percent (50%) or more of the total rentable square footage in the Spectrum 3 Building, Tenant shall have the one-time right, commencing on the Commencement Date and exercisable on or before March 31, 2011 (“Expansion Right Expiration Date”), to elect to expand the original Premises (the “Expansion Right”no further Right(s) to include the balance of the western half of the first floor of the Building, containing approximately 13,000 rentable square feet, as more particularly described on Exhibit J (“Expansion Space”), upon the terms and conditions contained in this Section. If Tenant elects to exercise the Expansion Right, Tenant shall, on or before the Expansion Right Expiration Date, deliver written notice to Landlord of its election to exercise the Expansion Right (“Expansion Exercise Notice”)First Refusal. If Tenant elects to lease the Expansion Identified Space by delivering an Expansion Exercise the Space Acceptance Notice prior to within the Expansion Right Expiration Daterequired 5 business day period, Tenant shall be deemed to agree to lease the Expansion Identified Space on the same general terms and conditions as this Lease, Lease except that the terms of this the Lease shall be modified as follows effective as to reflect the terms of the ES Commencement Date (as defined below): Pending Deal Notice for the rental of the Identified Space, provided, however, that (i) if the definition term of Premises shall be amended the lease with respect to include the Expansion Space; (ii) Identified Space would pursuant to the Base Term Pending Deal expire prior to the term of the Lease with respect to the original Premises and then-existing Premises, then the Expansion term of the Lease with respect to the Identified Space shall be amended modified to end 54 months from be co-terminous with the earlier Term of Substantial Completion this Lease with respect to the then-existing Premises, and (ii) if the term of the lease with respect to the Identified Space is modified to be co-terminous with the term of the then-existing Premises pursuant to sub-section (i), then the economic terms set forth in the Pending Deal Notice shall be equitably adjusted to account for such extension of the term with respect to the Identified Space, provided that such adjustment of the economic terms shall be no less favorable to Landlord on an annual basis than the economic terms set forth in the Pending Deal (and with market rate annual increases in base rent for the Identified Space for that portion of the lease term for the Identified Space beyond the term provided for in the Pending Deal), as reasonably determined by Landlord and Tenant. If the term of the lease with respect to the Identified Space would pursuant to the Pending Deal expire after the term of this Lease with respect to the then-existing Premises, then the term of the lease with respect to the Identified Space shall be as provided in the Pending Deal (and, for the avoidance of any doubt, no adjustment shall be made to the term of this Lease for the then-existing Premises). Notwithstanding anything to the contrary contained herein, in no event shall the Work Letter or the TI Allowance (as defined in the Expansion Space Work Letter attached hereto as Exhibit K) by Landlord of the Expansion Space Tenant Improvements (as defined in the Expansion Space Work Letter) or apply to the date Landlord could have delivered Identified Space, as the Expansion Space but for Tenant Delays terms and conditions of the Pending Deal Notice (as defined in the Expansion Space Work Letter)(“ES Commencement Date”may be equitably adjusted by Landlord); (iii) Tenant shall continue to pay Base Rent for the original Premises as , including any tenant improvement allowance provided for in this Lease andthe Pending Deal Notice, in addition thereto, beginning on the ES Commencement Date, shall apply. If Tenant shall pay Base Rent for the Expansion Space at the then current monthly Base Rent per rentable square foot payable for the original Premises (as the same is adjusted from time to time pursuant to Section 4 of this Lease); (iv) with respect to the Base Rent payable by Tenant for the Expansion Space, Tenant shall only be required to pay Base Rent with respect to only 50% of the Expansion Space commencing on the ES Commencement Date through the expiration of the 12th month following the ES Commencement Date and Tenant shall commence paying Base Rent with respect to the entire Expansion Space on the first day of the 13th month following the ES Commencement Date; (v) Tenant shall commence paying Operating Expenses with respect to the entire Expansion Space on the ES Commencement Date; (vi) Base Rent shall be increased on the first day of the 49th month of the original Base Term and the first day of the 61st month of the original Base Term (each, an “Adjustment Date”) by multiplying the Base Rent payable immediately before such Adjustment Date by 3.5% and adding the resulting amount to the Base Rent payable immediately before such Adjustment Date, (vii) except as provided for in clause (iv) of this Section, Tenant shall not be entitled to any Rent Credit or any other abatement of Rent with respect to its lease of the Expansion Space, (viii) Tenant’s Share of Operating Expenses of Building and Tenant’s Share of Operating Expenses of Project shall be proportionately adjusted; (ix) the Expansion Space Tenant Improvements shall be constructed in accordance with the Expansion Space Work Letter; (x) subject to Force Majeure delays and Tenant Delays (as defined in the Expansion Space Work Letter) the target date for completion of the Expansion Space Tenant Improvements shall be 7 months after Tenant’s delivery of the Expansion Exercise Notice to Landlord; and (xiii) the terms of Sections 41 (a) and 42 shall not be applicable to the Expansion Space. Tenant’s failure fails to deliver a Tenant Expansion Exercise Space Acceptance Notice prior to Landlord within the Expansion Right Expiration Date shall be deemed an election by Tenant not to exercise Tenant’s Expansion Rightrequired 5 business day period, in which case Tenant shall be deemed to have forever waived all of its rights under this Section 39(a) to lease the Identified Space identified in the applicable Pending Deal Notice, and Landlord shall have the right to lease such Identified Space to the third party subject to the Pending Deal (or an affiliate of such third party) (“Pending Deal Party”), the provisions of . Provided Tenant has not already waived or exercised its rights under this Section 39(a) to space which in the aggregate constitutes 50% or more of the total rentable square footage in the Building, Tenant’s Right of First Refusal with respect to such Identified Space shall no longer applybe restored if Landlord fails to enter into an agreement to lease the Identified Space to the Pending Deal Party within 6 months after Landlord’s deliver of the Pending Deal Notice to Tenant.