Common use of Option to Extend Lease Term Clause in Contracts

Option to Extend Lease Term. Provided Tenant is not in default of any term, covenant or condition of this Lease, Tenant shall have the option to extend the Initial Term of this Lease for one (1) additional period of three (3) years (the "Renewal Term") to commence immediately upon the expiration of the Initial Term. Tenant's rental of the Premises during the Renewal Term shall be upon the same terms, covenants and conditions contained in this Lease, except that Tenant shall pay to Landlord as Base Rent that amount equal to the "Prevailing Market Rate" for the Premises for the Renewal Term as hereinafter defined (including annual adjustments). For purposes of this Section 3.3, the term "Prevailing Market Rate" shall mean the then prevailing market rate being charged for comparable space in comparable office buildings within a ten (10) mile radius of the Premises, with consideration given for construction allowances, commissions, free rent, and other concessions or premiums. In order to exercise its option granted herein, Tenant shall notify Landlord in writing of its intent to renew not less than one hundred eighty (180)days prior to the expiration of the Initial Term. Within thirty (30) days following the exercise by Tenant of its option to extend the Lease for the Renewal Term, Landlord shall notify Tenant in writing of its determination of the Prevailing Market Rate for the Renewal Term as reasonably determined by Landlord ("Landlord's Notice"). Within ten (10) days after receipt of Landlord's Notice, Tenant shall notify Landlord in writing of Tenant's acceptance or rejection of such rate. If Tenant shall accept such Prevailing Market Rate, Landlord and Tenant shall enter into an amendment to this Lease acknowledging such renewal and setting forth any terms at variance with the terms of this Lease. If within the ten (10) day period, Tenant shall reject such Prevailing Market Rate as determined by Landlord for the Renewal Term, then within twenty (20) days thereafter, Landlord and Tenant shall meet at a mutually acceptable time and place and shall use their reasonable efforts to agree upon the Prevailing Market Rate. If Landlord and Tenant shall fail to agree upon such Prevailing Market Rate within the twenty (20) day period, Landlord and Tenant shall each appoint an independent commercial leasing broker licensed in the Maryland area within the next ten (10) days (the "Brokers"). Such Brokers shall deliver their respective estimates of the Prevailing Market Rate within ten (10) days after being appointed. If the estimates of the Prevailing Market Rate as quoted by the Brokers are within ten percent (10%) of each other, the Prevailing Market Rate shall be deemed to be the average of the estimates presented by the Brokers. If the estimates of the Prevailing Market Rate as quoted by the Brokers differ by more than ten percent (10%), then Landlord and Tenant shall jointly appoint a third independent commercial leasing broker licensed in the Maryland area within ten (10) days after the receipt of the initial brokers' estimates (the "Third Broker") who shall deliver its estimate of the Prevailing Market Rate within ten (10) days after being appointed and such estimate shall be deemed to be the Prevailing Market Rate. Tenant shall notify Landlord within ten (10) days after receipt of the estimate of the Prevailing Market Rate (whether as resulting from the average of the Brokers or from the Third Broker, as applicable), whether Tenant shall accept such Prevailing Market Rate, whereupon Landlord and Tenant shall enter into an amendment to this Lease acknowledging such renewal and setting forth any terms at variance with the terms of this Lease. If

Option to Extend Lease Term. Provided Tenant is not in default of any term, covenant or condition of this Lease, Tenant shall have the option (“Option”) to extend the Initial Lease Term of this Lease for one by five (1) additional period of three (35) years (as to either the "Renewal Term"11120 Premises or the Existing Premises or both) to commence immediately upon the expiration following terms and conditions. Any extension of the Initial TermTerm pursuant to the Option shall be on all the same terms and conditions as the Lease, except as follows: 4.1 Minimum Monthly Rent at the commencement of the Option term shall equal the then-current fair market value for comparable office and laboratory space in the Scrrento Valley submarket of comparable age, quality, level of finish and proximity to amenities and public transit (“FMV”), and shall be further increased on each annual anniversary of the Option term commencement date by three percent (3%). Tenant's rental Tenant may, no more than twelve (12) months prior to the date the Lease Term is then scheduled to expire, request Landlord’s estimate of the FMV for the Option term. Landlord shall, within fifteen (15) days after receipt of such request, give Tenant a written proposal of such FMV. If Tenant gives written notice to exercise the Option, such notice shall specify whether Tenant accepts Landlord’s proposed estimate of FMV. If Tenant does not accept the FMV, then the parties shall endeavor to agree upon the FMV, taking into account all relevant factors, including (a) the size of the Premises during (or portion thereof that is being extended, as applicable), (b) the Renewal Term shall be upon length of the same termsOption term, covenants and conditions contained in this Lease, except that Tenant shall pay to Landlord as Base Rent that amount equal to the "Prevailing Market Rate" for the Premises for the Renewal Term as hereinafter defined (including annual adjustments). For purposes of this Section 3.3, the term "Prevailing Market Rate" shall mean the then prevailing market rate being charged for comparable space c) rent in comparable office buildings within a ten (10) mile radius of in the Premisesrelevant submarket, with consideration given for construction allowancesincluding concessions offered to new tenants, commissions, such as free rent, tenant improvement allowances and other concessions or premiumsmoving allowances, (d) Tenant’s creditworthiness and (e) the quality and location of the Project. In order the event that the parties are unable to exercise its option granted herein, Tenant shall notify Landlord in writing of its intent to renew not less than one hundred eighty (180)days prior to agree upon the expiration of the Initial Term. Within FMV within thirty (30) days following after Tenant notifies Landlord that Tenant is exercising the exercise by Tenant Option, then either party may request that the same be determined as follows: a senior officer of its option to extend the Lease for the Renewal Term, Landlord shall notify Tenant in writing of its determination a nationally recognized leasing brokerage firm with local knowledge of the Prevailing Market Rate Sorrento Valley laboratory/research and development leasing submarket (the “Baseball Arbitrator”) shall be selected and paid for the Renewal Term as reasonably determined jointly by Landlord ("Landlord's Notice"). Within ten (10) days after receipt of Landlord's Notice, Tenant shall notify Landlord in writing of and Tenant's acceptance or rejection of such rate. If Tenant shall accept such Prevailing Market Rate, Landlord and Tenant shall enter into an amendment to this Lease acknowledging such renewal and setting forth any terms at variance with the terms of this Lease. If within the ten (10) day period, Tenant shall reject such Prevailing Market Rate as determined by Landlord for the Renewal Term, then within twenty (20) days thereafter, Landlord and Tenant shall meet at a mutually acceptable time and place and shall use their reasonable efforts to agree upon the Prevailing Market Rate. If Landlord and Tenant shall fail are unable to agree upon such Prevailing Market Rate within the twenty Baseball Arbitrator, then the same shall be designated by the local chapter of the American Arbitration Association or any successor organization thereto (20the “AAA”). The Baseball Arbitrator selected by the parties or designated by the AAA shall (y) day period, have at least ten (10) years’ experience in the leasing of laboratory/research and development space in the Sorrento Valley submarket and (z) not have been employed or retained by either Landlord or Tenant or any affiliate of either for a period of at least ten (10) years prior to appointment pursuant hereto. Each of Landlord and Tenant shall each appoint an independent commercial leasing broker licensed in submit to the Maryland area within Baseball Arbitrator and to the next ten (10) days (the "Brokers"). Such Brokers shall deliver their respective estimates other party its determination of the Prevailing Market Rate within ten (10) days after being appointedFMV. If the estimates of the Prevailing Market Rate as quoted by the Brokers are within ten percent (10%) of each other, the Prevailing Market Rate The Baseball Arbitrator shall be deemed grant to be the average of the estimates presented by the Brokers. If the estimates of the Prevailing Market Rate as quoted by the Brokers differ by more than ten percent (10%), then Landlord and Tenant a hearing and the right to submit evidence. The Baseball Arbitrator shall jointly appoint a third independent commercial leasing broker licensed in the Maryland area within ten (10) days after the receipt determine which of the initial brokers' estimates two (2) FMV determinations more closely represents the "Third Broker") who actual FMV. The arbitrator may not select any other FMV other than one submitted by Landlord or Tenant. The FMV selected by the Baseball Arbitration shall deliver its estimate be binding upon Landlord and Tenant and shall serve as the basis for determination of Minimum Monthly Rent payable for the Option term. If, as of the Prevailing Market Rate within ten (10) days after being appointed and commencement date of the Option term, the amount of Minimum Monthly Rent payable during the Option term shall not have been determined, then, pending such estimate shall be deemed to be the Prevailing Market Ratedetermination. Tenant shall notify Landlord within ten (10) days after receipt pay Minimum Monthly Rent equal to the Minimum Monthly Rent payable with respect to the last year of the estimate then-current Lease Term. After the final determination of Minimum Monthly Rent payable for the Option term, the parties shall promptly execute a written amendment to the Lease specifying the amount of Minimum Monthly Rent to be paid during the Option term. Any failure of the Prevailing Market Rate (whether as resulting parties to execute such amendment shall not affect the validity of the FMV determined pursuant to this Section. 4.2 The Option is not assignable separate and apart from the average Lease. 4.3 The Option is conditional upon Tenant giving Landlord written notice of its election to exercise the Option at least nine (9) months prior to the end of the Brokers or from expiration of the Third Brokerthen-current Lease Term. Time shall be of the essence as to Tenant’s exercise of the Option. Tenant assumes full responsibility for maintaining a record of the deadlines to exercise the Option. Tenant acknowledges that it would be inequitable to require Landlord to accept any exercise of the Option after the date provided for in this Section. 4.4 Notwithstanding anything contained in this Article to the contrary, as applicable), whether Tenant shall accept such Prevailing Market Rate, whereupon Landlord and Tenant shall enter into an amendment not have the right to this Lease acknowledging such renewal and setting forth any terms at variance with exercise the terms of this Lease. IfOption:

Option to Extend Lease Term. Provided Tenant is not in default of any term, covenant or condition of this Lease, Tenant shall have the option (“Option”) to extend the Initial Lease Term of this Lease for one by five (1) additional period of three (35) years (as to either the "Renewal Term"11120 Premises or the Existing Premises or both) to commence immediately upon the expiration following terms and conditions. Any extension of the Initial TermTerm pursuant to the Option shall be on all the same terms and conditions as the Lease, except as follows: 4.1. Tenant's rental Minimum Monthly Rent at the commencement of the Option term shall equal the then-current fair market value for comparable office and laboratory space in the Sorrento Valley submarket of comparable age, quality, level of finish and proximity to amenities and public transit (“FMV”), and shall be further increased on each annual anniversary of the Option term commencement date by three percent (3%). Tenant may, no more than twelve (12) months prior to the date the Lease Term is then scheduled to expire, request Landlord’s estimate of the FMV for the Option term. Landlord shall, within fifteen (15) days after receipt of such request, give Tenant a written proposal of such FMV. If Tenant gives written notice to exercise the Option, such notice shall specify whether Tenant accepts Landlord’s proposed estimate of FMV. If Tenant does not accept the FMV, then the parties shall endeavor to agree upon the FMV, taking into account all relevant factors, including (a) the size of the Premises during (or portion thereof that is being extended, as applicable), (b) the Renewal Term shall be upon length of the same termsOption term, covenants and conditions contained in this Lease, except that Tenant shall pay to Landlord as Base Rent that amount equal to the "Prevailing Market Rate" for the Premises for the Renewal Term as hereinafter defined (including annual adjustments). For purposes of this Section 3.3, the term "Prevailing Market Rate" shall mean the then prevailing market rate being charged for comparable space c) rent in comparable office buildings within a ten (10) mile radius of in the Premisesrelevant submarket, with consideration given for construction allowancesincluding concessions offered to new tenants, commissions, such as free rent, tenant improvement allowances and other concessions or premiumsmoving allowances, (d) Tenant’s creditworthiness and (e) the quality and location of the Project. In order the event that the parties are unable to exercise its option granted herein, Tenant shall notify Landlord in writing of its intent to renew not less than one hundred eighty (180)days prior to agree upon the expiration of the Initial Term. Within FMV within thirty (30) days following after Tenant notifies Landlord that Tenant is exercising the exercise Option, then either party may request that the same be determined as follows: a senior officer of a nationally recognized leasing brokerage firm with local knowledge of the Sorrento Valley laboratory/research and development leasing submarket (the “Baseball Arbitrator”) shall be selected and paid for jointly by Landlord and Tenant. If Landlord and Tenant are unable to agree upon the Baseball Arbitrator, then the same shall be designated by the local chapter of its option the American Arbitration Association or any successor organization thereto (the “AAA”). The Baseball Arbitrator selected by the parties or designated by the AAA shall (y) have at least ten (10) years’ experience in the leasing of laboratory/research and development space in the Sorrento Valley submarket and (z) not have been employed or retained by either Landlord or Tenant or any affiliate of either for a period of at least ten (10) years prior to extend appointment pursuant hereto. Each of Landlord and Tenant shall submit to the Lease for Baseball Arbitrator and to the Renewal Term, Landlord shall notify Tenant in writing of other party its determination of the Prevailing Market Rate FMV. The Baseball Arbitrator shall grant to Landlord and Tenant a hearing and the right to submit evidence. The Baseball Arbitrator shall determine which of the two (2) FMV determinations more closely represents the actual FMV. The arbitrator may not select any other FMV other than one submitted by Landlord or Tenant. The FMV selected by the Baseball Arbitrator shall be binding upon Landlord and Tenant and shall serve as the basis for determination of Minimum Monthly Rent payable for the Renewal Term Option term. If, as reasonably of the commencement date of the Option term, the amount of Minimum Monthly Rent payable during the Option term shall not have been determined, then, pending such determination. Tenant shall pay Minimum Monthly Rent equal to the Minimum Monthly Rent payable with respect to the last year of the then-current Lease Term. After the final determination of Minimum Monthly Rent payable for the Option term, the parties shall promptly execute a written amendment to the Lease specifying the amount of Minimum Monthly Rent to be paid during the Option term. Any failure of the parties to execute such amendment shall not affect the validity of the FMV determined by pursuant to this Section. 4.2. The Option is not assignable separate and apart from the Lease. 4.3. The Option is conditional upon Tenant giving Landlord written notice of its election to exercise the Option at least nine ("Landlord's Notice")9) months prior to the end of the expiration of the then-current Lease Term. Within ten (10) days Time shall be of the essence as to Tenant’s exercise of the Option. Tenant assumes full responsibility for maintaining a record of the deadlines to exercise the Option. Tenant acknowledges that it would be inequitable to require Landlord to accept any exercise of the Option after receipt of Landlord's Noticethe date provided for in this Section. 4.4. Notwithstanding anything contained in this Article to the contrary, Tenant shall notify not have the right to exercise the Option: 4.4.1 During the time commencing from the date Landlord delivers to Tenant a written notice that Tenant is in writing default under any provisions of the Lease and continuing until Tenant has cured the specified default to Landlord’s reasonable satisfaction; or 4.4.2 At any time after any Event of Default as described in Article 21 of the Existing Lease (provided, however, that, for purposes of this Section 4.4.2, Landlord shall not be required to provide Tenant with notice of such Event of Default) and continuing until Tenant cures any such Event of Default, if such Event of Default is susceptible to being cured; or 4.4.3 In the event that Tenant has defaulted in the performance of its obligations under the Lease two (2) or more times and a service or late charge has become payable under Section 22.4 of the Existing lease for each of such defaults during the twelve (12)-month period immediately prior to the date that Tenant intends to exercise the Option, whether or not Tenant has cured such defaults. 4.5. The period of time within which Tenant may exercise the Option shall not be extended or enlarged by reason of Tenant's acceptance ’s inability to exercise such Option because of the provisions of Section 4.4 above. 4.6. All of Tenant’s rights under the provisions of the Option shall terminate and be of no further force or rejection effect even after Tenant’s due and timely exercise of the Option if, after such rate. If exercise, but prior to the commencement date of the new term, (a) Tenant shall accept such Prevailing Market Rate, fails to pay to Landlord and a monetary obligation of Tenant shall enter into an amendment to this Lease acknowledging such renewal and setting forth any terms at variance with the terms for a period of this Lease. If within the ten (10) day period, Tenant shall reject such Prevailing Market Rate as determined by Landlord for the Renewal Term, then within twenty (20) days thereafterafter written notice from Landlord to Tenant, Landlord and (b) Tenant shall meet at fails to commence to cure a mutually acceptable time and place and shall use their reasonable efforts to agree upon the Prevailing Market Rate. If Landlord and Tenant shall fail to agree upon such Prevailing Market Rate default (other than a monetary default) within the twenty thirty (20) day period, Landlord and Tenant shall each appoint an independent commercial leasing broker licensed in the Maryland area within the next ten (10) days (the "Brokers"). Such Brokers shall deliver their respective estimates of the Prevailing Market Rate within ten (10) days after being appointed. If the estimates of the Prevailing Market Rate as quoted by the Brokers are within ten percent (10%) of each other, the Prevailing Market Rate shall be deemed to be the average of the estimates presented by the Brokers. If the estimates of the Prevailing Market Rate as quoted by the Brokers differ by more than ten percent (10%), then Landlord and Tenant shall jointly appoint a third independent commercial leasing broker licensed in the Maryland area within ten (1030) days after the receipt date Landlord gives notice to Tenant of such default or (c) Tenant has defaulted under the Lease two (2) or more times and a service or late charge under Section 22.4 of the initial brokers' estimates (the "Third Broker") who shall deliver its estimate Existing Lease has become payable for any such default, whether or not Tenant has cured such defaults. 4.7. Article 27 of the Prevailing Market Rate within ten (10) days after being appointed Existing Lease is hereby deleted in its entirety and such estimate shall be deemed to be the Prevailing Market Rate. Tenant shall notify Landlord within ten (10) days after receipt is no longer of the estimate of the Prevailing Market Rate (whether as resulting from the average of the Brokers any further force or from the Third Broker, as applicable), whether Tenant shall accept such Prevailing Market Rate, whereupon Landlord and Tenant shall enter into an amendment to this Lease acknowledging such renewal and setting forth any terms at variance with the terms of this Lease. Ifeffect.

Option to Extend Lease Term. Provided Tenant is not in default of any term, covenant or condition of this Lease, Tenant Lessee shall have the option right, at its option, to extend the Initial Term of this Lease for one (1) additional period of three five (35) years (the "Renewal Option Term") immediately following the Expiration Date. Lessee shall exercise its right to commence immediately upon extend the expiration Term by delivery of written notice to Lessor at least six (6) months and not more than nine (9) months prior to the then scheduled Expiration Date. All of the Initial Term. Tenant's rental of the Premises during the Renewal Term shall be upon the same terms, covenants and conditions (including without limitation defined terms) contained in this LeaseLease shall be applicable to the Option Term in the event of exercise by Lessee; provided, except however, that Tenant shall pay to Landlord as the Term and the Base Rent that amount shall be modified as provided herein and Lessee shall have no further options to extend the Term thereafter. Subject to adjustment as hereafter provided, the Base Rent for the Option Term shall be adjusted to the greater of (i) the Base Rent for the last month of the Term or (ii) Prevailing Market Rent, described below. The "Prevailing Market Rent" shall be equal to the "Prevailing Market Rate" for rental per square foot of rentable area of the Premises for the Renewal Term per month as hereinafter defined (including annual adjustments). For purposes of this Section 3.3, the term "Prevailing Market Rate" shall mean the then prevailing market rate being charged for comparable space in comparable office buildings within a ten (10) mile radius of the Premises, with consideration given for construction allowances, commissions, free rent, and other concessions or premiums. In order to exercise its option granted herein, Tenant shall notify Landlord in writing of its intent to renew not less than one hundred eighty date which is six (180)days 6) months prior to the expiration of the Initial Term. Within thirty (30) days following the exercise by Tenant Original Term of its option to extend the Lease prevailing for comparable space in the Renewal Termsame area where the Premises are located. In determining the Prevailing Market Rent, Landlord the particular configuration, frontage along a public thoroughfare, signage visible to the public, parking facilities, and general level of quality of improvements and location of each comparison building shall be taken into account. If Lessee has timely exercised the Option, Lessor shall notify Tenant Lessee in writing of its determination the proposed new Base Rent determined by Lessor for the Option Term at least ninety (90) days prior to the commencement date of the Prevailing Market Rate for Option Term. Unless Lessee objects to the Renewal Term as reasonably amount determined by Landlord Lessor within fifteen ("Landlord's Notice"). Within ten (1015) days after receipt of Landlord's Notice, Tenant shall notify Landlord in writing of Tenant's acceptance or rejection of such rate. If Tenant shall accept such Prevailing Market Rate, Landlord and Tenant shall enter into an amendment to this Lease acknowledging such renewal and setting forth any terms at variance with the terms of this Lease. If within the ten (10) day period, Tenant shall reject such Prevailing Market Rate as determined by Landlord for the Renewal Term, then within twenty (20) days thereafter, Landlord and Tenant shall meet at a mutually acceptable time and place and shall use their reasonable efforts to agree upon the Prevailing Market Rate. If Landlord and Tenant shall fail to agree upon such Prevailing Market Rate within the twenty (20) day period, Landlord and Tenant shall each appoint an independent commercial leasing broker licensed in the Maryland area within the next ten (10) days (the "Brokers"). Such Brokers shall deliver their respective estimates of the Prevailing Market Rate within ten (10) days after being appointed. If the estimates of the Prevailing Market Rate as quoted by the Brokers are within ten percent (10%) of each othernotice, the Prevailing Market Rate amount stated in such notice shall be deemed to be the average of the estimates presented by the Brokers. If the estimates of the Prevailing Market Rate as quoted by the Brokers differ by more than ten percent (10%), then Landlord and Tenant shall jointly appoint a third independent commercial leasing broker licensed in the Maryland area within ten (10) days after the receipt of the initial brokers' estimates (the "Third Broker") who shall deliver its estimate of the Prevailing Market Rate within ten (10) days after being appointed and such estimate shall be deemed to be the Prevailing Market Rate. Tenant shall notify Landlord within ten (10) days after receipt of the estimate of the Prevailing Market Rate (whether as resulting from the average of the Brokers or from the Third Broker, as applicable), whether Tenant shall accept such Prevailing Market Rate, whereupon Landlord and Tenant shall enter into an amendment to this Lease acknowledging such renewal and setting forth any terms at variance with the terms of this Lease. Ifnew Base

Option to Extend Lease Term. Provided Tenant Lessee is hereby granted and shall, if not then in default of any term, covenant or condition of under this Lease, Tenant shall have the an option to extend the Initial Term term of this Lease for one (1) an additional period of three (3) ten years (from the "Renewal Term") to commence immediately upon the original expiration date of the Initial Term. Tenant's rental this Lease in successive periods of the Premises during the Renewal Term shall be upon five years each on the same terms, covenants and conditions contained in this Lease, except provided however, that Tenant the minimum monthly rent to be paid by Lessee to Lessor shall pay be as agreed upon by Lessee and Lessor, or if the parties are unable to Landlord as Base Rent that amount equal agree, fixed by appraisal in the following matter: (1) The successive options set forth herein shall be exercised only by a Lessee delivering to the "Prevailing Market Rate" for the Premises for the Renewal Term as hereinafter defined (including annual adjustments). For purposes of this Section 3.3, the term "Prevailing Market Rate" shall mean the then prevailing market rate being charged for comparable space in comparable office buildings within a ten (10) mile radius of the Premises, with consideration given for construction allowances, commissions, free rent, and other concessions or premiums. In order to exercise its option granted herein, Tenant shall notify Landlord in writing of its intent to renew not less than Lessor one hundred eighty (180)days prior to 180) days before the expiration of the Initial Term. Within thirty term hereof written notice of Lessee's election to renew the term of this lease as provided in this Article. (302) On or before 90 days following before the exercise by Tenant of its option to extend the Lease for the Renewal Term, Landlord shall notify Tenant in writing of its determination commencement of the Prevailing Market Rate for the Renewal Term as reasonably determined by Landlord ("Landlord's Notice"). Within ten (10) days after receipt of Landlord's Notice, Tenant shall notify Landlord in writing of Tenant's acceptance or rejection of such rate. If Tenant shall accept such Prevailing Market Rate, Landlord extended term Lessor and Tenant shall enter into an amendment to this Lease acknowledging such renewal and setting forth any terms at variance with the terms of this Lease. If within the ten (10) day period, Tenant shall reject such Prevailing Market Rate as determined by Landlord for the Renewal Term, then within twenty (20) days thereafter, Landlord and Tenant shall meet at a mutually acceptable time and place and shall use their reasonable efforts to agree upon the Prevailing Market Rate. If Landlord and Tenant shall fail to agree upon such Prevailing Market Rate within the twenty (20) day period, Landlord and Tenant Lessee shall each appoint an independent commercial leasing broker licensed in the Maryland area within the next ten (10) days (the "Brokers"). Such Brokers shall deliver their respective estimates appraiser and give written notice of the Prevailing Market Rate name and address of that appraiser to the other party to this lease. The two appraisers shall, within ten (10) 30 days after being appointed. If the estimates appointment of the Prevailing Market Rate as quoted by last of the Brokers are within ten percent (10%) of each other, the Prevailing Market Rate shall be deemed two appraiser to be the average of the estimates presented by the Brokers. If the estimates of the Prevailing Market Rate as quoted by the Brokers differ by more than ten percent (10%)appointed, then Landlord and Tenant shall jointly appoint a third independent commercial leasing broker licensed appraiser and serve written notice of the name and address of that appraiser upon the Lessee and Lessor in the Maryland area within ten (10) manner prescribed by this Lease for service of notice on one party of the Lease by the other. All appraisers appointed under this Article shall be, at the time of their appointment, licensed Real Estate Appraiser, certified by the State of California. Within 30 days after the receipt appointment of the initial brokers' estimates (third appraiser, the appraisers shall confer and each submit in writing to the Lessor and the Lessee his or her appraisal of the fair rental value of the leased premises which, in this case, be defined as the "Third Broker") who shall deliver its estimate price a willing lessee would pay a willing lessor for the leased premises for the uses, regardless of the Prevailing Market Rate within ten (10) days after being highest and best potential use of the premises, as specified in this lease. The appraised value agreed upon in writing by any two of the three appointed and such estimate appraisers shall be deemed to be conclusive and binding and shall establish the Prevailing Market Rate. Tenant shall notify Landlord within ten (10) days after receipt fair rental value of the estimate leased premises. If no two of the Prevailing Market Rate (whether as resulting from three appraisers are able to agree on the average fair rental value of the Brokers or from leased premises, both the Third Broker, as applicable), whether Tenant highest appraisal and the lowest appraisal submitted by any of the three appraisers shall accept such Prevailing Market Rate, whereupon Landlord be disregarded and Tenant the remaining appraisal shall enter into an amendment be binding and conclusive upon the parties to this Lease acknowledging such renewal lease. If either Lessor or Lessee fail to appoint an appraiser as required under this Article, the appraiser so appointed by the other party shall act for both Lessor and setting forth any terms at variance with Lessee and his decision as to the terms determination of fair rental value will be final and binding on both parties. Lessor and Lessee shall each pay the fee and all expenses incurred by the appraiser appointed by each of them and one-half of all expenses and the fee incurred by the third appraiser appointed pursuant to this Lease. IfArticle.

Option to Extend Lease Term. Provided Tenant is not in default of any term, covenant or condition of this Lease, Tenant shall have the option to extend the Initial Term Lease Agreement, including Addendum I and II and this Addendum III, for an additional term of this Lease for one five (15) additional period of three (3) years (the "Renewal Term") years, from March 31, 1997 to commence immediately upon the expiration of the Initial TermMarch 31, 2002. Tenant's rental of the Premises during the Renewal Term shall be upon the same terms, covenants and conditions contained in this Lease, except that Tenant shall pay to Landlord as Base Rent that amount equal to the "Prevailing Market Rate" for the Premises for the Renewal Term as hereinafter defined (including annual adjustments). For purposes of this Section 3.3, the term "Prevailing Market Rate" shall mean the then prevailing market rate being charged for comparable space in comparable office buildings within a ten (10) mile radius of the Premises, with consideration given for construction allowances, commissions, free rent, and other concessions or premiums. In order to may exercise its option granted herein, Tenant shall notify Landlord in writing of its intent to renew not less than one hundred eighty (180)days prior to the expiration of the Initial Term. Within thirty (30) days following the exercise by Tenant of its such option to extend the Lease for lease term as follows: If Tenant notifies Landlord prior to June 1, 1993, Tenant shall have the Renewal Termright to extend the lease on the existing terms and conditions, Landlord shall notify Tenant in writing of its subject to determination of the Prevailing Market Rate rental rate as follows. The rate will be the sum of the effective rates in effect May 31, 1997, for the Renewal Term Original Lease and Addendum II and III with a reduction of $5,816.88 MONTHLY. The rate for all subsequent years will be the current effective base rate plus the annual adjustment in the CPI for Houston SMSA, not to exceed five percent (5%) per year, based on the previous 12 months. If Tenant exercises its option hereunder, the twenty-thousand ($20,000.00) dollar security deposit secured by the Irrevocable Letter of Credit from Texas Commerce Bank (G-111 419) dated February 8, 1988, shall be extended from the expiration of June 30, 1997, to June 30, 2002. If Tenant does not exercise the above option by June 1, 1993, Tenant must notify the Landlord ninety (90) days prior to the original termination date of the lease to have the right to extend the lease on the existing terms and conditions, subject to determination of the rental rate as reasonably determined agreed by the fair market value as follows: The fair market value shall be as mutually agreed by Landlord and Tenant within fifteen ("Landlord's Notice"). Within ten (1015) days after receipt of Landlord's Notice, Tenant shall notify Landlord in writing of Tenant's acceptance or rejection of such rateexercises its option to renew. If Tenant shall accept such Prevailing Market Rate, Landlord and Tenant shall enter into an amendment to this Lease acknowledging such renewal and setting forth any terms at variance with the terms of this Lease. If within the ten (10) day period, Tenant shall reject such Prevailing Market Rate as determined by Landlord for the Renewal Term, then within twenty (20) days thereafter, Landlord and Tenant shall meet at a mutually acceptable time and place and shall use their reasonable efforts parties are unable to agree upon the Prevailing Market Rate. If Landlord and Tenant shall fail to agree upon such Prevailing Market Rate within fair market value of the twenty (20) day periodPremises, Landlord and Tenant shall each appoint an independent appraiser who is knowledgeable in commercial leasing broker licensed property values in the Maryland area within in which the next ten (10) days (Premises are located and the "Brokers"). Such Brokers shall deliver their respective estimates of the Prevailing Market Rate two appraisers shall, then within ten (10) days after being appointedtheir selection, agree upon the fair market value of the Premises. If they are unable to agree, they shall appoint a third appraiser with the estimates same qualifications and the three appraisers shall then, within fifteen (15) days thereafter, prepare appraisals of the Prevailing Market Rate Premises. The average of the three appraisals shall be used as quoted by the Brokers are within fair market value of the Premises for the Second Option Period; provided, however, that if any appraiser's estimate is either (a) less than ninety percent (90%) of the average figure, or (b) more than one hundred ten percent (10110%) of each other, such average then the Prevailing Market Rate shall be deemed to fair market value of the Premises will be the average of the estimates presented by the Brokers. If the estimates of the Prevailing Market Rate as quoted by the Brokers differ by more than remaining figures which are between ninety percent (90%) and one hundred and ten percent (10110%) inclusive of the average figure even if only one estimate remains. If all figures fall outside of the range between ninety percent (90%) and one hundred ten percent (110%), then the middle figure of the three appraisals shall be the fair market value even if the middle figure is the same as the higher or lower figure. Landlord and Tenant shall jointly appoint a third independent commercial leasing broker licensed in each bear the Maryland area within ten (10) days after cost of its appraiser and shall share equally the receipt cost of the initial brokers' estimates (third. After the "Third Broker") who Renewal Term rent for any Renewal Term has been determined in accordance with the provisions set forth herein, Landlord shall deliver its estimate promptly give Tenant written notice of the Prevailing Market Rate within ten (10) days after being appointed and such estimate shall be deemed to be annual renewal rent for the Prevailing Market Rate. Tenant shall notify Landlord within ten (10) days after receipt of the estimate of the Prevailing Market Rate (whether as resulting from the average of the Brokers or from the Third Broker, as applicable), whether Tenant shall accept such Prevailing Market Rate, whereupon Landlord Renewal Term and Tenant shall enter into an amendment thereafter have fifteen (15) days to this decide whether the reaffirm or cancel its exercise of the option to renew by written notice of the Landlord. If Tenant exercises its option hereunder, the twenty-thousand ($20,000.00) dollar security deposit secured by the Irrevocable Letter of Credit from Texas Commerce Bank (G-111 419) dated February 8, 1988, shall be extended from the expiration of June 30, 1997, to June 30, 2002. This Addendum III, and the Lease acknowledging such renewal Agreement dated December 4, 1986, and setting forth any Addendum I and II to the Lease Agreement constitute the entire understanding between the parties with regard to leasing space at 10301 Stella Link, Suite 110, Houston, Harris County, Texas. Default xxxxx xxx xx xxx xxxxxxxxx xxxxxxxxxx xxxx xxxxxxxxxx xxxxxlt under all of the agreements. Except for the foregoing changes, all of the covenants, terms at variance and conditions of the prior Lease Agreement, and Addendum I and II remain the same. Landlord: MAIN LINK BUSINESS PARK ASSOCIATES By: /s/ JAMES E. STUBBS ATTEST: /s/ RHONDA SHAW Xxxxx X. Stubbs Assistant Vice President Xxx: XXXXA INVESTMXXXX, XXX. (XXXAGING PARTNER) (SUCCESSOR TO ALTA MAIN LINK INVESTMENTS, INC.) Tenant: TANOX BIOSYSTEMS, INC. By: /s/ NANCY T. CHANG ATTEST: ?????????? Xxxxx X. Xxxxg -- President DESCRIPTION OF LEASE PXXXXXXX -- XXXIBIT "A" Description Lease Premises are located in Building # 10301 Stella Link which is part of Main Link Business Park situated on a tract containing 4.1684 acres out of that certain 22.2444 acre (984,966 square feet), more or less, tract, land located in Harris County Texas, conveyed from Marvin H. McMurry, Jr. et al, to Mxxx Xxnk Business Center Associates xx xxxx xxxxx Xxxx 0, 1982, and recorded under Clerk's File No. H471470 of the Harris County Deed Records, to which deed and the record thereof refexxxxx is here made for all purposes. TANOX - PHASE I (Approx. 4032 SF) LEASE ADDENDUM PREMISES (Approx. 8013 SF) LEASE ADDENDUM III APPROX. 6569 SF Fischer & Porter XxXXXXXX STELLA LINK XXXXXXX "X" PHASE III EXPANSION Build-out of improvements to the Phase III expansion is intended to provide for additional production capabilities, general administrative areas, storage space, or other research and development-related activities. Because Tenant intends to produce certain pharmaceutical products for human use, a part of the planned build-out must be undertaken with due consideration of applicable Food and Drug Administration requirements, including current Good Manufacturing Practices. Build out is planned to occur in the terms of this Lease. Iffollowing stages:

Option to Extend Lease Term. Provided Landlord hereby grants to Tenant is not in default of any term, covenant or condition of this Lease, Tenant shall have the one option to extend the Initial Lease Term for a five (5) year term on the following terms and conditions: A. Tenant must give Landlord notice in writing of its exercise of the option in question no earlier than one hunderd eighty (180) days and no later than one hundred twenty (120) days before the date the Lease Term would end but for said exercise. B. Tenant may not extend the Lease Term pursuant to any option granted by this paragraph if Tenant is materially in default beyond any applicable cure period as of the date of exercise of the option in question or as of the date this Lease would have been terminated but for said exercise. C. All terms and conditions of this Lease for one (1) additional period of three (3) years (the "Renewal Term") to commence immediately upon the expiration of the Initial Term. Tenant's rental of the Premises shall apply during the Renewal Term shall be upon the same terms, covenants and conditions contained in this Leaseoption period, except that Tenant the Base Monthly Rent for the option period shall pay be determined as provided in Paragraph D. D. The Base Monthly Rent for the Option Period shall be greater of (i) one hundred percent (100%) of the Base Monthly Rent due the last month of the previous Lease Term, or (ii) one-hundred percent (100%) of the then fair market monthly rent determined as of the commencement of the option period in question based upon like buildings with like improvements in the San Xxxx area within the boundaries of Highways 237, 101 and 880. If the parties are unable to Landlord as Base Rent that amount equal to agree upon the "Prevailing Market Rate" fair market monthly rent for the Premises for the Renewal Term as hereinafter defined option period in question at least seventy-five (including annual adjustments). For purposes of this Section 3.3, 75) days prior to the term "Prevailing Market Rate" shall mean the then prevailing market rate being charged for comparable space in comparable office buildings within a ten (10) mile radius commencement of the Premisesoption period in question, then the fair market monthly rent shall be determined by appraisal conducted pursuant to subparapgraph E. E. In the event it becomes necessary to determine by appraisal the fair market rent of the Premises for the purpose of establishing the Base Monthly Rent during the Option Period, then such fair market monthly rent shall be determined by three (3) real estate appraiser, all of whom shall be members of the American Institue of Real Estate Appraisers with consideration given for construction allowances, commissions, free rent, and other concessions or premiums. In order to exercise its option granted herein, Tenant shall notify Landlord in writing of its intent to renew not less than one hundred eighty five (180)days prior to 5) years experience appraising real property (other than residential or agricultural property) located in Santa Xxxxx County, California, in accordance with the expiration of following procedures: (1) The party demanding an appraisal (the Initial Term. Within thirty (30"Notifying Party") days following the exercise by Tenant of its option to extend the Lease for the Renewal Term, Landlord shall notify Tenant in writing the other party (the "Non-Notifying Party") thereof by delivering a written demand for appraisal, which demand, to be effective, must give the name, address, and qualifications of its determination of an appraiser selected by the Prevailing Market Rate for the Renewal Term as reasonably determined by Landlord ("Landlord's Notice")Notifying Party. Within ten (10) days after of receipt of Landlord's Noticesaid demand, Tenant the Non-notifying Party shall select its appriaser and notify Landlord the Notifying Party, in writing writing, of Tenant's acceptance or rejection the name, address, and qualifications of such ratean appraiser selected by it. If Tenant Failure by the Non-Notifying Party to select a qualified appraiser within said ten (10) day period shall accept such Prevailing Market Rate, Landlord be deemed a waiver of its right to select a second appraiser on its own behalf and Tenant the Notifying Party shall enter into an amendment to this Lease acknowledging such renewal and setting forth any terms at variance with select a second appraiser on behalf of the terms Non-Notifying Party within five (5) days after the expiration of this Lease. If within the said ten (10) day period. Within ten (10) days from the date the second appraiser shall have been appointed, Tenant the two (2) appraisers so selected shall reject appoint a third appraiser. If the two appraisers fail to select a third qualified appraiser, the third appraiser shall be selected by the American Arbitrations Association or if it shall refuse to perform this function, then at the request of either Landlord or Tenant, such Prevailing Market Rate as determined third appraiser shall be promptly appointed by Landlord the then Presiding Judge of the Superior Court of the State of California for the Renewal TermCounty of Santa Xxxxx. (2) The three (3) appraisers so selected shall meet in San Jose, then within California, not later than twenty (20) days thereafterfollowing the selection of the third appriaser. At said meeting the appraisers so selected shall attempt to determine the fair market monthly rent of the Premises for the option period in question (including the timing and amount of periodic increases). (3) If the appraisers so selected are unable to complete their determinations in one meeting, Landlord and Tenant shall meet they may continue to consult at such times as they deem necessary for a mutually acceptable fifteen (15) day period from the date of the first meeting, in an attempt to have at least two (2) of them agree. If, at the initial meeting or at any time and place and shall use their reasonable efforts to agree upon the Prevailing Market Rate. If Landlord and Tenant shall fail to agree upon such Prevailing Market Rate within the twenty during said fifteen (2015) day period, two (2) or more of the appraisers so selected agree on the fair market rent of the Leased Premises, such agreement shall be determinative and binding on the parties hereto, and the agreeing appraisers shall, in simple letter form executed by the agreeing appraisers, forthwith notify both Landlord and Tenant shall each appoint an independent commercial leasing broker licensed in the Maryland area within the next ten (10) days (the "Brokers"). Such Brokers shall deliver their respective estimates of the Prevailing Market Rate amount set by such agreement. (4) If two (2) or more appraisers do not so agree within ten said fifteen (1015) day period, then each appraiser shall, within five (5) days after being appointed. If the estimates expiration of said fifteen (15) day period, submit his independent appraisal in simple letter form to Landlord and Tenant stating his determination of the Prevailing Market Rate as quoted fair market rent of the Premises for the option period in question. The parties shall then determine the fair market rent for the Premises by the Brokers are within ten percent (10%) of each other, the Prevailing Market Rate shall be deemed to be determining the average of the estimates presented fair market rent set by each of the Brokersappraisers. However, if the lowest appraisal is less than eighty-five percent (85%) of the middle appraisal then such lowest appraisal shall be disregarded and/or if the highest appraisal is greater than one hundred fifiteen percent (115%) of the middle appraisal then such highest appraisal shall be disregarded. If the estimates of fair market rent set by any appraisal is so disregarded, then the Prevailing Market Rate as quoted average shall be determined by computing the average set by the Brokers differ by more than ten percent other appraisals that have not been disregarded. (10%), then 5) Nothing contained herein shall prevent Landlord and Tenant shall from jointly appoint selecting a third independent commercial leasing broker licensed in single appraiser to determine the Maryland area within ten (10) days after the receipt fair market rent of the initial brokers' estimates (Premises, in which event the "Third Broker") who determination of such appraisal shall deliver its estimate be conclusively deemed the fair market rent of the Prevailing Market Rate within ten Premises. (106) days after being appointed Each party shall bear the fees and such estimate expenses of the appraiser selected by or for it, and the fees and expenses of the third appraiser (or the joint appraiser if one joint appraiser is used) shall be deemed to be the Prevailing Market Rate. Tenant shall notify Landlord within ten borne fifty percent (1050%) days after receipt of the estimate of the Prevailing Market Rate (whether as resulting from the average of the Brokers or from the Third Broker, as applicable), whether Tenant shall accept such Prevailing Market Rate, whereupon by Landlord and Tenant shall enter into an amendment to this Lease acknowledging such renewal and setting forth any terms at variance with the terms of this Lease. Iffifty percent (50%) by Tenant.

Option to Extend Lease Term. Provided Landlord hereby grants to Tenant is not in default of any term, covenant or condition of this Lease, Tenant shall have the one option to extend the Initial Lease Term for a five (5) year term on the following terms and conditions: A. Tenant must give Landlord notice in writing of its exercise of the option in question no earlier than two hundred seventy (270) days and no later than one hundred eighty (180) days before the date the Lease Term would end but for said exercise. B. Tenant may not extend the Lease Term pursuant to any option granted by this paragraph if an Event of Tenant's Default exists as of the date of exercise of the option in question or as of the date this Lease would have been terminated but for said exercise. C. All term and conditions of this Lease for one (1) additional period of three (3) years (the "Renewal Term") to commence immediately upon the expiration of the Initial Term. Tenant's rental of the Premises shall apply during the Renewal Term shall be upon the same terms, covenants and conditions contained in this LeaseOption Period, except that Tenant the Base Monthly Rent for the Option Period shall pay be determined as provided in Paragraph D. D. The Base Monthly Rent for the Option Period shall be the greater of (i) one hundred percent (100%) of the Base Monthly Rent due the last month of the previous Lease Term, or (ii) one hundred percent (100%) of the then fair market monthly rent determined as of the commencement of the Option Period in question based upon like buildings with like improvements in the Mountain View/Sunnyvale/Santa Xxxxx area taking into account tenant improvement allowances and other concessions which may be available in the market.. If the parties are unable to Landlord as Base Rent that amount equal to agree upon the "Prevailing Market Rate" fair market monthly rent for the Premises for the Renewal Term as hereinafter defined Option Period in question at lean seventy-five (including annual adjustments). For purposes of this Section 3.3, 75) days prior to the term "Prevailing Market Rate" shall mean the then prevailing market rate being charged for comparable space in comparable office buildings within a ten (10) mile radius commencement of the PremisesOption Period in question, then the fair market monthly rent shall be determined by appraisal conducted pursuant to subparagraph E. E. In the event it becomes necessary to determine by appraisal the fair market rent of the Premises for the purpose of establishing the Base Monthly Rent during the Option Period, then such fair market monthly rent shall be determined by three (3) real estate appraisers, all of whom shall be members of the American Institute of Real Estate Appraisers with consideration given for construction allowances, commissions, free rent, and other concessions or premiums. In order to exercise its option granted herein, Tenant shall notify Landlord in writing of its intent to renew not less than one hundred eighty five (180)days prior 5) years experience appraising real property (other than residential or agricultural property) located in Santa Xxxxx County, California, in accordance with the following procedures: (1) The party demanding an appraisal (the "Notifying Party") notify the other party (the "Non-Notifying Party") thereof by delivering a written demand for appraisal, which demand, to be effective, must give the expiration name, address, and qualifications of an appraiser selected by the Initial Term. Within thirty (30) days following the exercise by Tenant of its option to extend the Lease for the Renewal Term, Landlord shall notify Tenant in writing of its determination of the Prevailing Market Rate for the Renewal Term as reasonably determined by Landlord ("Landlord's Notice")Notifying Party. Within ten (10) days after of receipt of Landlord's Noticesaid demand, Tenant the Non-Notifying Party shall select its appraiser and notify Landlord the Notifying Party, in writing writing, of Tenant's acceptance or rejection the name, 1. address, and qualifications of such ratean appraiser selected by it. If Tenant Failure by the Non- Notifying Party to select a qualified appraiser within said ten (10) day period shall accept such Prevailing Market Rate, Landlord be deemed a waiver of its right to select a second appraiser on its own behalf and Tenant the Notifying Party shall enter into an amendment to this Lease acknowledging such renewal and setting forth any terms at variance with select a second appraiser on behalf of the terms Non-Notifying Party within five (5) days after the expiration of this Lease. If within the said ten (10) day period. Within ten (10) days from the date the second appraiser shall have been appointed, Tenant the two (2) appraisers so selected shall reject appoint a third appraiser. If the two appraisers fad to select a third qualified appraiser, the third appraiser shall be selected by the American Arbitration Association or if it shall refuse to perform this function, then at the request of either Landlord or Tenant, such Prevailing Market Rate as determined third appraiser shall be promptly appointed by Landlord the then Presiding Judge of the Superior Court of the State of California for the Renewal Term, then within County of Santa Xxxxx. (2) The three (3) appraisers so selected shall meet not later than twenty (20) days thereafterfollowing the selection of the third appraiser. At said meeting the appraisers so selected shall attempt to determine the fair market monthly rent of the Premises for the option period in question (including the timing and amount of periodic increases). (3) If the appraisers so selected are unable to complete their determinations in one meeting, Landlord and Tenant shall meet they may continue to consult at such times as they deem necessary for a mutually acceptable fifteen (15) day period from the date of the first meeting, in an attempt to have at least two (2) of them agree. If, at the initial meeting or at any time and place and shall use their reasonable efforts to agree upon the Prevailing Market Rate. If Landlord and Tenant shall fail to agree upon such Prevailing Market Rate within the twenty during said fifteen (2015) day period, two (2) or more of the appraisers so selected agree on the fair market rent of the Leased Premises, such agreement shall be determinative and binding on the parties hereto, and the agreeing appraisers shall, in simple letter form executed by the agreeing appraisers, forthwith notify both Landlord and Tenant shall each appoint an independent commercial leasing broker licensed in the Maryland area within the next ten (10) days (the "Brokers"). Such Brokers shall deliver their respective estimates of the Prevailing Market Rate amount set by such agreement. (4) If two (2) or more appraisers do not so agree within ten said fifteen (1015) day period, then each appraiser shall, within five (5) days after being appointed. If the estimates expiration of said fifteen (15) day period, submit his independent appraisal in simple letter form to Landlord and Tenant stating his determination of the Prevailing Market Rate as quoted fair market rent of the Premises for the Option Period in question. The parties shall then determine the fair market rent for the Premises by the Brokers are within ten percent (10%) of each other, the Prevailing Market Rate shall be deemed to be determining the average of the estimates presented fair market rent set by each of the Brokersappraisers. However, if the lowest appraisal is less than eighty-five percent (85%) of the middle appraisal then such lowest appraisal Wall be disregarded and/or if the highest appraisal is greater than one hundred fifteen percent (115%) of the middle appraisal then such highest appraisal shall be disregarded. If the estimates of fair market rent set by any appraisal is so disregarded, then the Prevailing Market Rate as quoted average shall be determined by computing the average set by the Brokers differ by more than ten percent other appraisals that have not been disregarded. (10%), then 5) Nothing contained herein shall prevent Landlord and Tenant shall from jointly appoint selecting a third independent commercial leasing broker licensed in single appraiser to determine the Maryland area within ten (10) days after the receipt fair market raw of the initial brokers' estimates (Premises, in which event the "Third Broker") who determination of such appraisal shall deliver its estimate be conclusively deemed the fair market rent of the Prevailing Market Rate within ten Premises. (106) days after being appointed Each party shall bear the fees and such estimate expenses of the appraiser selected by or for it, and the few and expenses of the third appraiser (or the joint appraiser if one joint appraiser is used) shall be deemed to be the Prevailing Market Rate. Tenant shall notify Landlord within ten home fifty percent (1050%) days after receipt of the estimate of the Prevailing Market Rate (whether as resulting from the average of the Brokers or from the Third Broker, as applicable), whether Tenant shall accept such Prevailing Market Rate, whereupon by Landlord and Tenant shall enter into an amendment to this Lease acknowledging such renewal and setting forth any terms at variance with the terms of this Lease. Iffifty percent (50%) by Tenant.

Option to Extend Lease Term. Provided Landlord hereby grants to Tenant is not in default of any term, covenant or condition of this Lease, Tenant shall have the one option to extend the Initial Lease Term for a five (5) year term on the following terms and conditions: A. Tenant must give Landlord notice in writing of its exercise of the option in question no earlier than one hundred eight (180) days and no later than one hundred twenty (120) days before the date the Lease Term would end but for said exercise. B. Tenant may not extend the Lease Term pursuant to any option granted by this paragraph if Tenant is materially in default beyond any applicable cure period as of the date of exercise of the option in question or as of the date this Lease would have been terminated but for said exercise. C. All terms and conditions of this Lease for one (1) additional period of three (3) years (the "Renewal Term") to commence immediately upon the expiration of the Initial Term. Tenant's rental of the Premises shall apply during the Renewal Term shall be upon the same terms, covenants and conditions contained in this Leaseoption period, except that Tenant the Base Monthly Rent for the option period shall pay be determined as provided in Paragraph D. D. The Base Monthly Rent for the Option Period shall be the greater of (i) one hundred percent (100%) of the Base Monthly Rent due the last month of the previous Lease Term, or (ii) one-hundred percent (100%) of the then fair market monthly rent determined as of the commencement of the option period in question based upon like buildings with like improvements in the San Xxxx area within the boundaries of Highways 237,101 and 880. If the parties are unable to Landlord as Base Rent that amount equal to agree upon the "Prevailing Market Rate" fair market monthly rent for the Premises for the Renewal Term as hereinafter defined option period in question at least seventy-five (including annual adjustments). For purposes of this Section 3.3, 75) days prior to the term "Prevailing Market Rate" shall mean the then prevailing market rate being charged for comparable space in comparable office buildings within a ten (10) mile radius commencement of the Premisesoption period in question, then the fair market monthly rent shall be determined by appraisal conducted pursuant to subparagraph E. E. In the event it becomes necessary to determine by appraisal the fair market rent of the Premises for the purpose of establishing the Base Monthly Rent during the Option Period, then such fair market monthly rent shall be determined by three (3) real estate appraisers, all of whom shall be members of the American Institute of Real Estate Appraisers with consideration given for construction allowances, commissions, free rent, and other concessions or premiums. In order to exercise its option granted herein, Tenant shall notify Landlord in writing of its intent to renew not less than one hundred eighty five (180)days prior to 5) years experience appraising real property (other than residential or agricultural property) located in Santa Xxxxx County, California, in accordance with the expiration of following procedures: (1) The party demanding an appraisal (the Initial Term. Within thirty (30"Notifying Party") days following the exercise by Tenant of its option to extend the Lease for the Renewal Term, Landlord shall notify Tenant in writing the other party (the "Non-Notifying Party") thereof by delivering a written demand for appraisal, which demand, to be effective, must give the name, address, and qualifications of its determination of an appraiser selected by the Prevailing Market Rate for the Renewal Term as reasonably determined by Landlord ("Landlord's Notice")Notifying Party. Within ten (10) days after of receipt of Landlord's Noticesaid demand, Tenant the Non-Notifying Party shall select its appraiser and notify Landlord the Notifying Party, in writing writing, of Tenant's acceptance or rejection the name, address, and qualifications of such ratean appraiser selected by it. If Tenant Failure by the Non-Notifying Party to select a qualified appraiser within said ten (10) day period shall accept such Prevailing Market Rate, Landlord be deemed a waiver of its right to select a second appraiser on its own behalf and Tenant the Notifying Party shall enter into an amendment to this Lease acknowledging such renewal and setting forth any terms at variance with select a second appraiser on behalf of the terms Non-Notifying Party within five (5) days after the expiration of this Lease. If within the said ten (10) day period. Within ten (10) days from the date the second appraiser shall have been appointed, Tenant the two (2) appraisers so selected shall reject appoint a third appraiser. If the two appraisers fail to select a third qualified appraiser, the third appraiser shall be selected by the American Arbitrations Association or if it shall refuse to perform this function, then at the request of either Landlord or Tenant, such Prevailing Market Rate as determined third appraiser shall be promptly appointed by Landlord the then Presiding Judge of the Superior Court of the State of California for the Renewal TermCounty of Santa Xxxxx. (2) The three (3) appraisers so selected shall meet in San Jose, then within California, not later than twenty (20) days thereafterfollowing the selection of the third appraiser. At said meeting the appraisers so selected shall attempt to determine the fair market monthly rent of the Premises for the option period in question (including the timing and amount of periodic increases). (3) If the appraisers so selected are unable to complete their determinations in one meeting, Landlord and Tenant shall meet they may continue to consult at such times as they deem necessary for a mutually acceptable fifteen (15) day period from the date of the first meeting, in an attempt to have at least two (2) of them agree. If, at the initial meeting or at any time and place and shall use their reasonable efforts to agree upon the Prevailing Market Rate. If Landlord and Tenant shall fail to agree upon such Prevailing Market Rate within the twenty during said fifteen (2015) day period, two (2) or more of the appraisers so selected agree on the fair market rent of the Leased Premises, such agreement shall be determinative and binding on the parties hereto, and the agreeing appraisers shall, in simple letter form executed by the agreeing appraisers, forthwith notify both Landlord and Tenant shall each appoint an independent commercial leasing broker licensed in the Maryland area within the next ten (10) days (the "Brokers"). Such Brokers shall deliver their respective estimates of the Prevailing Market Rate amount set by such agreement. (4) If two (2) or more appraisers do not so agree within ten said fifteen (1015) day period, then each appraiser shall, within five (5) days after being appointed. If the estimates expiration of said fifteen (15) day period, submit his independent appraisal in simple letter form to Landlord and Tenant stating his determination of the Prevailing Market Rate as quoted fair market rent of the Premises for the option period in question. The parties shall then determine the fair market rent for the Premises by the Brokers are within ten percent (10%) of each other, the Prevailing Market Rate shall be deemed to be determining the average of the estimates presented fair market rent set by each of the Brokersappraisers. However, if the lowest appraisal is less than eighty-five percent (85%) of the middle appraisal then such lowest appraisal shall be disregarded and/or if the highest appraisal is greater than one hundred fifteen percent (115%) of the middle appraisal then such highest appraisal shall be disregarded. If the estimates of fair market rent set by any appraisal is so disregarded, then the Prevailing Market Rate as quoted average shall be determined by computing the average set by the Brokers differ by more than ten percent other appraisals that have not been disregarded. (10%), then 5) Nothing contained herein shall prevent Landlord and Tenant shall from jointly appoint selecting a third independent commercial leasing broker licensed in single appraiser to determine the Maryland area within ten (10) days after the receipt fair market rent of the initial brokers' estimates (Premises, in which event the "Third Broker") who determination of such appraisal shall deliver its estimate be conclusively deemed the fair market rent of the Prevailing Market Rate within ten Premises. (106) days after being appointed Each party shall bear the fees and such estimate expenses of the appraiser selected by or for it, and the fees and expenses of the third appraiser (or the joint appraiser if one joint appraiser is used) shall be deemed to be the Prevailing Market Rate. Tenant shall notify Landlord within ten borne fifty percent (1050%) days after receipt of the estimate of the Prevailing Market Rate (whether as resulting from the average of the Brokers or from the Third Broker, as applicable), whether Tenant shall accept such Prevailing Market Rate, whereupon by Landlord and Tenant shall enter into an amendment to this Lease acknowledging such renewal and setting forth any terms at variance with the terms of this Lease. Iffifty percent (50%) by Tenant.