AMENDED AND RESTATED OFFICE LEASE

Office Lease Agreement

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FAVRILLE INC | PACIFIC CORPORATE CENTER | KILROY REALTY, L.P.,

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Title: AMENDED AND RESTATED OFFICE LEASE
Governing Law: California Date: 11/14/2005
Law Firm: Cooley Godward LLP

Exhibit 10.5

AMENDED AND RESTATED OFFICE LEASE

KILROY REALTY

PACIFIC CORPORATE CENTER

KILROY REALTY, L.P. ,

a Delaware limited partnership,

as Landlord,

and

FAVRILLE, INC. ,

a Delaware corporation,

as Tenant.

TABLE OF CONTENTS

		Page

ARTICLE 1	PREMISES, BUILDING, PROJECT, AND COMMON AREAS	6

ARTICLE 2	LEASE TERM; OPTION TERM(S)	8

ARTICLE 3	BASE RENT	11

ARTICLE 4	ADDITIONAL RENT	12

ARTICLE 5	USE OF PREMISES	20

ARTICLE 6	SERVICES AND UTILITIES	21

ARTICLE 7	REPAIRS	25

ARTICLE 8	ADDITIONS AND ALTERATIONS	26

ARTICLE 9	COVENANT AGAINST LIENS	29

ARTICLE 10	INSURANCE	29

ARTICLE 11	DAMAGE AND DESTRUCTION	33

ARTICLE 12	NONWAIVER	36

ARTICLE 13	CONDEMNATION	36

ARTICLE 14	ASSIGNMENT AND SUBLETTING	37

ARTICLE 15	SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES	41

ARTICLE 16	HOLDING OVER	42

ARTICLE 17	ESTOPPEL CERTIFICATES	43

ARTICLE 18	SUBORDINATION	43

ARTICLE 19	DEFAULTS; REMEDIES	44

ARTICLE 20	COVENANT OF QUIET ENJOYMENT	47

ARTICLE 21	SECURITY DEPOSIT; LETTER OF CREDIT	48

ARTICLE 22	TELECOMMUNICATIONS EQUIPMENT	52

ARTICLE 23	SIGNS	53

ARTICLE 24	COMPLIANCE WITH LAW	55

ARTICLE 25	LATE CHARGES	56

ARTICLE 26	LANDLORD’S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT	56

ARTICLE 27	ENTRY BY LANDLORD	57

ARTICLE 28	TENANT PARKING	57

ARTICLE 29	MISCELLANEOUS PROVISIONS	58

iii

INDEX

	Page(s)

Accountant	20
Additional Notice	25
Additional Rent	12
Affiliate	41
Alterations	26
Applicable Laws	55
Award	11
Bank Prime Loan	56
Base Building	27
Base Rent	11
Brokers	63
BS Exception	25
Building Monument Sign	53
Building Structure	25
Building System	22
Building Systems	22
Building Top Sign	53
CC&Rs	21
CGCC	41
cGMP Standard	3
Comparable Area	10
Comparable Buildings	9
Comparable Deals	9
Comparable Term	9
Cosmetic Alterations	27
Damage Termination Date	35
Damage Termination Notice	35
Direct Expenses	12
Eligibility Period	25
Environmental Laws	65
Estimate	19
Estimate Statement	19
Estimated Direct Expenses	19
Excess	18
Exercise Notice	10
Existing Tenant	6
Expense Year	13
Force Majeure	61
Hazardous Material(s)	65
HVAC	22
Initial Notice	25
Landlord	1
Landlord Default	25
Landlord Parties	29

	Page(s)

Landlord Response Date	10
Landlord Response Notice	10
Landlord’s Option Rent Calculation	10
L-C	48
L-C Amount	48
L-C Security Deposit	51
Lease	1
Lease Commencement Date	8
Lease Expiration Date	8
Lease Term	8
Lease Year	8
Lines	65
Mail	61
Market Rent	8
Neutral Arbitrator	11
Nondisturbance Agreement	44
Notices	61
Objectionable Name	54
Operating Expenses	13
Option Rent	8
Option Term	8
Option Term TI Allowance	9
Original Improvements	32
Other Improvements	68
Outside Agreement Date	10
Permitted Assignee	8
Permitted Use	3
Premises	6
Proposition 13	17
Reestablishment Notice	49
Renovations	64
Rent Concessions	9
Rent.	12
Required L-C Amount	49
Required Thresholds	50
Sign Specifications	54
Statement	18
Subject Space	37
Summary	1
Tax Expenses	16
Telecommunications Equipment	52
Tenant	1
Tenant Parties	30
Tenant Work Letter	6
Tenant’s Maintenance Obligations	22

	Page(s)

Tenant’s Option Rent Calculation	10
Tenant’s Share	18
Tenant’s Signage	53
Transfer	40
Transfer Notice	37
Transfer Premium	39
Transferee	37
Transfers	37
Working Capital	50

iii

PACIFIC CORPORATE CENTER

AMENDED AND RESTATED OFFICE LEASE

This Amended and Restated Office Lease (the “ Lease ”), dated as of the date set forth in Section 1 of the Summary of Basic Lease Information (the “ Summary ”), below, is made by and between KILROY REALTY, L.P., a Delaware limited partnership (“ Landlord ”), and FAVRILLE, INC., a Delaware corporation (“ Tenant ”).

SUMMARY OF BASIC LEASE INFORMATION

TERMS OF LEASE			DESCRIPTION

1.	Date:

	1.1	Date of Lease:	October 31, 2005.

	1.2	Effective Date:	November 1, 2005.

2.	Premises:
	2.1	Building:	That certain building located at 10421 Pacific Center Court in the “Project” in Sorrento Mesa, which Building contains 79,871 rentable square feet of space.

	2.2	Premises:	All of the leasable area within the Building, as more particularly identified in Exhibit A to the Office Lease.

	2.3	Project:	The Building is part of a multi-building project known as the “ Pacific Corporate Center ”, as further set forth in Section 1.1.2 of this Lease.
3.	Lease Term
	( Article 2 ):

	3.1	Length of Term:	Nineteen (19) years and eight (8) months.
	3.2	Lease Commencement Date:	November 1, 2005
	3.3	Lease Expiration Date:	June 30, 2025.

Base Rent ( Article 3 ):

					Approximate Monthly
Period			Monthly		Rental Rate
During	Annualized		Installment		per Rentable
Lease Term	Base Rent		of Base Rent		Square Foot

November 1, 2005 – January 31, 2007	See Exhibit I		See Exhibit I		See Exhibit I
February 1, 2007 – January 31, 2008	$	3,450,427.20	$	287,535.60	$	3.6000
February 1, 2008 – January 31, 2009	$	3,571,192.15	$	297,599.35	$	3.7260
February 1, 2009 – January 31, 2010	$	3,696,183.88	$	308,015.32	$	3.8564
February 1, 2010 – January 31, 2011	$	3,825,550.31	$	318,795.86	$	3.9914
February 1, 2011 – January 31, 2012	$	3,959,444.57	$	329,953.71	$	4.1311
February 1, 20012 – January 31, 20013	$	4,098,025.13	$	341,502.09	$	4.2757
February 1, 2013 – January 31, 2014	$	4,241,456.01	$	353,454.67	$	4.4253
February 1, 2014 – January 31, 2015	$	4,389,906.97	$	365,825.58	$	4.5802
February 1, 2015 – January 31, 2016	$	4,543,553.72	$	378,629.48	$	4.7405
February 1, 2016 – January 31, 2017	$	4,702,578.10	$	391,881.51	$	4.9064
February 1, 2017 – January 31, 2018	$	4,867,168.33	$	405,597.36	$	5.0782
February 1, 2018 – January 31, 2019	$	5,037,519.22	$	419,793.27	$	5.2559
February 1, 2019 – January 31, 2020	$	5,213,832.40	$	434,486.03	$	5.4398
February 1, 2020 – January 31, 2021	$	5,396,316.53	$	449,693.04	$	5.6302
February 1, 2021 – January 31, 2022	$	5,585,187.61	$	465,432.30	$	5.8273

					Approximate Monthly
Period			Monthly		Rental Rate
During	Annualized		Installment		per Rentable
Lease Term	Base Rent		of Base Rent		Square Foot

February 1, 2022 – January 31, 2023	$	5,780,669.18	$	481,722.43	$	6.0313
February 1, 2023 – January 31, 2024	$	5,982,992.60	$	498,582.72	$	6.2423
February 1, 2024 – January 31, 2025	$	6,192,397.34	$	516,033.11	$	6.4608
February 1, 2005 – June 30, 2025	$	6,409,131.25	$	534,094.27	$	6.6869

5.	Intentionally Omitted:

6.	Tenant’s Share ( Article 4 ):	100%.

7.	Permitted Use ( Article 5 ):	Tenant shall use the Premises solely for biotechnology labs and pharmaceutical manufacturing (in accordance with the Federal Drug Administration’s current Good Manufacturing Practices (“ cGMP Standard ”)), together with related offices uses (collectively, the “ Permitted Use ”); provided, however, that notwithstanding anything to the contrary set forth hereinabove, and as more particularly set forth in the Lease, Tenant shall be responsible for operating and maintaining the Premises pursuant to, and in no event may such Permitted Use violate, (A) Landlord’s “Rules and Regulations,” as that term is set forth in Section 5.2 of this Lease, (B) all “Applicable Laws,” as that term is set forth in Article 24 of this Lease, (C) all applicable zoning, building codes, the “CC&Rs,” as that term is set forth in Section 5.3 of this Lease, and the Pacific Corporate Center P.I.D., and (D) the character of the Project as a first-class Project.

8.	Security Deposit ( Article 21 ):	$355,727.60. In addition to the Security Deposit, Tenant shall have additional security obligations, in the form more particularly set forth in Section 21.2 , which shall be subject to increases, reductions and reinstatements pursuant to the TCCs of Section 21.2 .

9.	Parking Spaces ( Article 28 ):	A total of one hundred fifty-nine (159) parking spaces (i.e., two (2) unreserved parking spaces for every 1,000 rentable square feet of the Premises).

10.	Address of Tenant ( Section 29.18 ):

		Favrille, Inc.
		10421 Pacific Center Court
		Suite 150
		San Diego, California 92121
		Attention: Chief Financial Officer
		( Prior to and after Lease Commencement Date )

		with a copy to:

		Cooley Godward LLP
		101 California Street, 5 ^th Floor
		San Francisco, California 94111
		Attention: Helen Sedwick, Esq.

11.	Address of Landlord ( Section 29.18 ):	See Section 29.18 of the Lease.

12.	Broker(s) ( Section 29.24 ):	For Tenant:
		Colliers International
		4660 La Jolla Village Drive, Suite 200
		San Diego, California 92122
		Attention:	Kevin Craven
			Thomas Mercer

13.	Improvement Allowance ( Section 2 of Exhibit B ):	$10,000,000.00.

PACIFIC CORPORATE CENTER

AMENDED AND RESTATED OFFICE LEASE

R E C I T A L S :

A. This Amended and Restated Office Lease (“ Office Lease ”), which includes the preceding Summary of Basic Lease Information (the “ Summary ”) attached hereto and incorporated herein by this reference (the Office Lease and Summary are sometimes collectively referred to herein as the “ Lease ”), dated as of the date set forth in Section 1 of the Summary is made by and between KILROY REALTY, L.P., a Delaware limited partnership (“ Landlord ”), and FAVRILLE, INC., a Delaware corporation (“ Tenant ”).

B. Landlord, and Tenant previously entered into that certain Office Lease dated January 31, 2004 (the “ Original Office Lease ”), as amended by that certain First Amendment to Lease dated July 2004 (the “ First Amendment ”), that certain Second Amendment to Lease dated October 11, 2004 (the “ Second Amendment ”), that certain Third Amendment to Lease dated July 8, 2005 (the “Third Amendment ”), and that certain Fourth Amendment to Lease dated October 31, 2005 (the “ Fourth Amendment ”), whereby Landlord leased to Tenant and Tenant leased from Landlord the entire building located at 10421 Pacific Center Court, San Diego, California (the “ 10421 Building ”) comprised (i) those certain premises (the “ Original Premises ”) consisting of 48,502 rentable square feet of space located on the first (1 ^st ) and second (2 ^nd ) floors of the Building, (ii) those certain premises (the “ First Expansion Premises ”) consisting of 13,987 rentable square feet of space located on the second (2 ^nd ) floor of the Building, and (iii) those certain premises (the “ Third Expansion Premises ”) consisting of approximately 17,382 rentable square feet located on the first (1 ^st ) floor of the Building (the Original Premises, the First Expansion Premises and the Third Expansion Premises are, collectively, (x) initially referred to herein as the “ Premises ,” and (x) alternatively, and throughout the Lease Term, referred to herein as the “ 10421 Premises ”). The Office Lease, the First Amendment, the Second Amendment, the Third Amendment and the Fourth Amendment are, collectively, the “ Original Lease .”

C. The Original Office Lease was initially entered into by Landlord and Tenant with respect to the Original Premises only, and because such Original Premises did not comprise the entire Building, the rights and obligations of both Landlord and Tenant under the terms of the Original Office Lease were structured so as to be a part of, and integrated with, a larger, multi-tenant building. Following the execution of the Third Amendment and Tenant’s lease of the Third Expansion Premises, Landlord leases to Tenant and Tenant leases from Landlord the entire Building. As a result thereof, the parties acknowledge and agree that certain of the terms and conditions relating directly to a multi-tenant building which are set forth in the Original Lease are no longer applicable.

D. Landlord and Tenant desire to amend and restate the terms of the Original Lease in their entirety, effective as of the Effective Date, as set forth herein.

E. Following the date of this Lease, Landlord and Tenant desire to expand the 10421 Premises to include the entire building (the “ 10445 Premises ”) located at 10445 Pacific Center Court, San Diego, California (the “ 10445 Building ”). However, as such 10445 Premises is currently occupied by a third party (“ Nuera ”) pursuant to an existing lease between Landlord and Nuera (the “ Nuera Lease ”), Landlord and Tenant acknowledge that such expansion, and Landlord’s ability to deliver the 10445 Building to Tenant, is expressly conditioned upon the termination or expiration of the Nuera Lease as set forth more particularly in Section 29.37 of this Lease. In the event that the Nuera Lease is so terminated, or upon the expiration thereof, then Landlord and Tenant shall immediately thereafter enter into that certain First Amendment to Amended and Restated Office Lease (which shall amend this Lease) in the form attached hereto as Exhibit H (the “ First Amendment to Amended and Restated Office Lease ”). All of the terms and conditions of this Lease, as amended by the terms of such First Amendment to Amended and Restated Office Lease, shall be effective immediately upon the full execution and delivery of such First Amendment to Amended and Restated Office Lease by and between Landlord and Tenant (the “ 10445 Premises Effective Date ”).

F. Upon the date set forth in Section 1.2 of the Summary (the “ Effective Date ”), this Lease shall amend and restate the Original Lease in its entirety and shall thereafter supersede the Original Lease. The provisions of the Original Lease shall remain in effect as to all periods prior to the Effective Date.

A G R E E M E N T :

ARTICLE 1

PREMISES, BUILDING, PROJECT, AND COMMON AREAS

1.1 Premises, Building, Project and Common Areas .

1.1.1 The Premises . Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the premises set forth in Section 2.2 of the Summary (the “ Premises ”). The outline of the Premises is set forth in Exhibit A attached hereto and comprises all of the leasable area with in the Building. The parties hereto agree that the lease of the Premises is upon and subject to the terms, covenants and conditions (the “ TCCs ”) herein set forth, and Tenant covenants as a material part of the consideration for this Lease to keep and perform each and all of such TCCs by it to be kept and performed and that this Lease is made upon the condition of such performance. The parties hereto hereby acknowledge that the purpose of Exhibit A is to show the approximate location of the Premises in the “ Building ,” as that term is defined in Section 1.1.2 , below, only, and such Exhibit is not meant to constitute an agreement, representation or warranty as to the construction of the Premises, the precise area thereof or the specific location of the “ Common Areas ,” as that term is defined in Section 1.1.3 , below, or the elements thereof or of the accessways to the Premises or the “ Project ,” as that term is defined in Section 1.1.2 , below. Landlord and Tenant acknowledge that Tenant has been occupying the entire Premises pursuant to the Original Lease, and therefore except as specifically set forth in this Lease and in the Tenant Work Letter attached hereto as Exhibit B (the “ Tenant Work

Letter ”), Landlord shall not be obligated to provide or pay for any improvement work or services related to the improvement of the Premises and Tenant shall continue to accept the Premises in its presently existing, “as is” condition, subject only to Landlord’s ongoing obligations set forth in Article 7 of this Lease, including, without limitation, Landlord’s ongoing obligation to maintain the “Building Structure,” as that term is defined in, and pursuant to the TCCs of, Section 7.1 . Tenant also acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty regarding the condition of the Premises, the Building or the Project or with respect to the suitability of any of the foregoing for the conduct of Tenant’s business, except as specifically set forth in this Lease and the Tenant Work Letter.

1.1.2 The Building and The Project . The Premises initially constitutes all of the building set forth in Section 2.1 of the Summary (the “ Building ”). The Building is part of a project known as “ Pacific Corporate Center .” The term “ Project ,” as used in this Lease, shall mean (i) the Building and the Common Areas, (ii) the land (which is improved with landscaping, parking facilities and other improvements) upon which the Building and the Common Areas are located, and (iii) the 10445 Building located immediately adjacent to the Building and the land upon which such 10445 Building is located.

1.1.3 Common Areas . Tenant shall have the non-exclusive right to use in common with other tenants in the Project, and subject to the rules and regulations referred to in Article 5 of this Lease, those portions of the Project which are provided, from time to time, for use in common by Landlord, Tenant and any other tenants of the Project (such areas, together with such other portions of the Project designated by Landlord, in its discretion, including certain areas designated for the exclusive use of certain tenants, or to be shared by Landlord and certain tenants, are collectively referred to herein as the “ Common Areas ”). The manner in which the Common Areas are maintained and operated shall be at the reasonable discretion of Landlord and the use thereof shall be subject to such rules, regulations and restrictions as Landlord may make from time to time as provided in Section 5.2 of this Lease, provided that Landlord shall at all times maintain and operate the Common Areas in a first-class manner consistent with the “Comparable Buildings,” as such term is defined in Section 2.2.2 of this Lease. Landlord reserves the right to close temporarily, make alterations or additions to, or change the location of elements of the Project and the Common Areas as long as such changes do not (i) change the nature of the Project to something other than a first-class project (ii) materially, adversely effect Tenant’s use of the Premises for the Permitted Use, as granted under Section 7 of the Summary, (iii) materially, adversely reduce Tenant’s ingress to or egress from the Project, Building, the Premises or the parking areas servicing the same, or (iv) materially reduce the parking area available for use by Tenant. Except when and where Tenant’s right of access is specifically excluded as a result of (x) an emergency, (y) a requirement by law, or (z) a specific provision set forth in this Lease, Tenant shall have the right of access to the Premises, the Building, and the Project parking facility twenty-four (24) hours per day, seven (7) days per week during the “Lease Term,” as that term is defined in Section 2.1 , below and any “ Option Term ,” as that term is defined in Section 2.2 , below.

1.2 Stipulation of Rentable Square Feet of Premises and Building . For purposes of this Lease, “rentable square feet” of the initial Premises and 10421 Building shall be deemed as set forth in Section 2.1 of the Summary.

ARTICLE 2

LEASE TERM; OPTION TERM(S)

2.1 Initial Lease Term . The TCCs and provisions of this Lease shall be effective as of the date of this Lease. The term of this Lease (the “ Lease Term ”) shall be as set forth in Section 3.1 of the Summary, shall commence on the date set forth in Section 3.2 of the Summary (the “ Lease Commencement Date ”), and shall terminate on the date set forth in Section 3.3 of the Summary (the “ Lease Expiration Date ”) unless this Lease is sooner terminated as hereinafter provided. For purposes of this Lease, the term “ Lease Year ” shall mean each consecutive twelve (12) month period during the Lease Term; provided, however, that the first Lease Year shall commence on the Lease Commencement Date and end on the last day of the eleventh month thereafter and the second and each succeeding Lease Year shall commence on the first day of the next calendar month; and further provided that the last Lease Year shall end on the Lease Expiration Date. At any time during the Lease Term, Landlord may deliver to Tenant a notice in the form as set forth in Exhibit C , attached hereto, as a confirmation only of the information set forth therein, which Tenant shall execute and return to Landlord within five (5) days of receipt thereof.

2.2 Option Term(s) .

2.2.1 Option Right . Landlord hereby grants the Tenant originally named herein (the “ Original Tenant ”), its “Affiliates” (as that term is defined in Section 14.8, below) and any permitted assignee of the Original Tenant’s interest in this Lease pursuant to Article 14 of this Lease (a “ Permitted Assignee ”), two (2) options to extend the Lease Term for the entire 10421 Premises each by a period of five (5) years (each, an “ Option Term ”). Such options shall be exercisable only by Notice delivered by Tenant to Landlord as provided below, provided that, as of the date of delivery of such Notice, Tenant is not in default under this Lease (beyond any applicable notice and cure periods). Upon the proper exercise of an option to extend, and provided that, as of the end of the then applicable Lease term, Tenant is not in default under this Lease (beyond any applicable notice and cure periods), the Lease Term, as it applies to the entire 10421 Premises, shall be extended for a period of five (5) years. The rights contained in this Section 2.2 shall only be exercised by the Original Tenant, its Affiliate or a Permitted Assignee (and not any other assignee, sublessee or other transferee of the Original Tenant’s interest in this Lease) if Original Tenant, its Affiliate and/or a Permitted Assignee is in possession of the entire then-existing 10421 Premises. In the event the 10445 Premises is leased by Tenant, Tenant’s right to extend the Lease Term with respect to such 10445 Premises shall be as expressly set forth in the First Amendment to Amended and Restated Office Lease, and which right shall be independent of the right to extend the Lease Term with respect to the 10421 Premises as set forth in this Section 2.2. Accordingly, Tenant shall have the right to exercise the applicable option rights with respect to the 10421 Premises, the 10445 Premises, or both, in Tenant’s sole discretion.

2.2.2 Option Rent . The Rent payable by Tenant during the Option Term (the “ Option Rent ”) shall be equal to the Market Rent as set forth below. For purposes of this Lease, the term “ Market Rent ” shall mean rent (including additional rent and considering any “base year” or “expense stop” applicable thereto), including all escalations, at which tenants, as of the

commencement of the applicable term are, pursuant to transactions completed within the twenty-four (24) months prior to the date Tenant delivers to Landlord the “Exercise Notice,” as that term is set forth below, leasing non-sublease, non-encumbered, non-synthetic, non-equity space (unless such space was leased pursuant to a definition of “fair market” comparable to the definition of Market Rent) comparable in size, location and quality to the Premises for a “Comparable Term,” as that term is defined in this Section 2.2.2 (the “ Comparable Deals ”), which comparable space is located in the “Comparable Buildings,” as that term is defined in this Section 2.2.2 , giving appropriate consideration to the annual rental rates per rentable square foot (adjusting the base rent component of such rate to reflect a net value after accounting for whether or not utility expenses are directly paid by the tenant such as Tenant’s direct utility payments provided for in Section 6.1 of this Lease), the standard of measurement by which the rentable square footage is measured, parking ratios, general access to such Comparable Buildings, the general visibility of such Comparable Buildings, and taking into consideration only, and granting only, the following concessions (provided that the rent payable in Comparable Deals in which the terms of such Comparable Deals are determined by use of a discounted fair market rate formula shall be equitably increased in order that such Comparable Deals will not reflect a discounted rate) (collectively, the “ Rent Concessions ”): (a) rental abatement concessions or build-out periods, if any, being granted such tenants in connection with such comparable spaces; (b) tenant improvements or allowances provided or to be provided for such comparable space, taking into account the value of the existing improvements in the Premises, such value to be based upon the age, quality and layout of the improvements and the extent to which the same can be utilized by this particular Tenant, (c) Proposition 13 protection, and (d) all other monetary concessions, if any, being granted such tenants in connection with such comparable space; provided, however, that notwithstanding anything to the contrary herein, no consideration shall be given to the fact that Landlord is or is not required to pay a real estate brokerage commission in connection with the applicable term or the fact that the Comparable Deals do or do not involve the payment of real estate brokerage commissions. The term “ Comparable Term ” shall refer to the length of the lease term, without consideration of options to extend such term, for the space in question. In addition, the determination of the Market Rent shall include a determination as to whether, and if so to what extent, Tenant must provide Landlord with financial security, such as a letter of credit or guaranty, for Tenant’s rent obligations during any Option Term. Such determination shall be made by reviewing the extent of financial security then generally being imposed in Comparable Transactions upon tenants of comparable financial condition and credit history to the then existing financial condition and credit history of Tenant (with appropriate adjustments to account for differences in the then-existing financial condition of Tenant and such other tenants). If in determining the Market Rent, Tenant would, pursuant to the Comparable Deals and the Rent Concessions set forth therein, otherwise be entitled to a tenant improvement or comparable allowance for the improvement of the Premises (the “ Option Term TI Allowance ”), Tenant shall not be entitled, and shall not be compelled, to receive such Option Term TI Allowance and Landlord shall reduce the rental rate component of the Market Rent to be an effective rental rate which takes into consideration that Tenant will not receive any Option Term TI Allowance. The term “ Comparable Buildings ” shall mean the Building and other first-class “cGMP/lab buildings” which are comparable to the Building in terms of age (based upon the date of completion of construction or major renovation as to the building containing the portion of the Premises in question), quality of construction, level of services and amenities, size

and appearance, and are located in the Sorrento Mesa, University Towne Center and Torrey Pines area of San Diego, California (the “ Comparable Area ”).

2.2.3 Exercise of Option . The option contained in this Section 2.2 shall be exercised by Tenant, if at all, only in the manner set forth in this Section 2.2.3 . Tenant shall deliver notice (the “ Exercise Notice ”) to Landlord not more than fifteen (15) months nor less than nine (9) months prior to the expiration of the then Lease Term, stating that Tenant is exercising its option. Concurrently with such Exercise Notice, Tenant shall deliver to Landlord Tenant’s calculation of the Market Rent (the “ Tenant’s Option Rent Calculation ”). Landlord shall deliver notice (the “ Landlord Response Notice ”) to Tenant on or before the later to occur of (i) the date which is thirty (30) days after Landlord’s receipt of the Exercise Notice and Tenant’s Option Rent Calculation, and (ii) the date which is nine (9) months prior to the expiration of the then Lease Term (the “ Landlord Response Date ”), stating that (A) Landlord is accepting Tenant’s Option Rent Calculation as the Market Rent, or (B) rejecting Tenant’s Option Rent Calculation and setting forth Landlord’s calculation of the Market Rent (the “ Landlord’s Option Rent Calculation ”). Within ten (10) business days of its receipt of the Landlord Response Notice, Tenant may, at its option, accept the Market Rent contained in the Landlord’s Option Rent Calculation. If Tenant does not affirmatively accept or Tenant rejects the Market Rent specified in the Landlord’s Option Rent Calculation, the parties shall follow the procedure, and the Market Rent shall be determined as set forth in Section 2.2.5 .

2.2.4 No Defaults; Required Financial Condition of Tenant . The rights contained in this Section 2.2 shall be personal to the Original Tenant, its Affiliates and any Permitted Assignee and may only be exercised by such Original Tenant, Affiliate or Permitted Assignee (and not any other assignee, sublessee or other transferee of the Original Tenant’s interest in this Lease) if the Original Tenant, Affiliate and/or Permitted Assignee occupies not less than one hundred percent (100%) of the then existing Premises. The right to extend the Lease Term as provided in this Section 2.2 may not be exercised if, as of the date of the attempted exercise of the extension option by Tenant, or as of the commencement date of such Option Term, (A) Tenant is in economic or material default pursuant to the terms of this Lease (beyond any applicable notice and cure periods), or (B) Tenant has previously been in economic or material default under this Lease (beyond any applicable notice and cure periods) during the previous twenty-four (24) month period.

2.2.5 Determination of Market Rent . In the event Tenant objects or is deemed to have objected to the Market Rent, Landlord and Tenant shall attempt to agree upon the Market Rent using reasonable good-faith efforts. If Landlord and Tenant fail to reach agreement within sixty (60) days following Tenant’s objection or deemed objection to the Landlord’s Option Rent Calculation (the (the “ Outside Agreement Date ”), then (i) in connection with the Option Rent, Landlord’s Option Rent Calculation and Tenant’s Option Rent Calculation, each as previously delivered to the other party, shall be submitted to the arbitrators pursuant to the TCCs of this Section 2.2.4 , and (ii) in connection with any other contested calculation of market Rent, the parties shall each make a separate determination of the Market Rent and shall submit the same to the arbitrators pursuant to the TCCs of this Section 2.2.5 . The submittals shall be made concurrently with the selection of the arbitrators pursuant to this Section 2.2.5 and shall be submitted to arbitration in accordance with Section 2.2.5.1 through 2.2.5.5 of this Lease, but subject to the conditions, when appropriate, of Section 2.2.3 .

2.2.5.1 Landlord and Tenant shall mutually and reasonably select and appoint one arbitrator who shall by profession be a real estate broker, appraiser or attorney (the “ Neutral Arbitrator ”) who shall have been active over the five (5) year period ending on the date of such appointment in the leasing (or appraisal, as the case may be) of first-class office/lab/manufacturing properties in the Comparable Area. The determination of the Neutral Arbitrator shall be limited solely to the issue of whether Landlord’s or Tenant’s submitted Market Rent, is the closest to the actual Market Rent as determined by the Neutral Arbitrator, taking into account the requirements of Section 2.2.2 of this Lease. Such Neutral Arbitrator shall be appointed within thirty (30) days after the applicable Outside Agreement Date. Neither the Landlord nor Tenant may, directly or indirectly, consult with the Neutral Arbitrator prior to subsequent to his or her appearance. The Neutral Arbitrator shall be retained via an engagement letter jointly prepared by Landlord’s counsel and Tenant’s counsel.

2.2.4.2 Within thirty (30) days of the appointment of the Neutral Arbitrator, such Neutral Arbitrator shall reach a decision as to Market Rent and determine whether the Landlord’s or Tenant’s determination of Market Rent as submitted pursuant to Section 2.2.5.1 and Section 2.2.3 of this Lease is closest to Market Rent as determined by such Neutral Arbitrator and simultaneously publish a ruling (“ Award ”) indicating whether Landlord’s or Tenant’s submitted Market Rent is closest to the Market Rent as determined by the Neutral Arbitrator. Following notification of the Award, the Landlord’s or Tenant’s submitted Market Rent determination, whichever is selected by the Neutral Arbitrator as being closest to Market rent shall become the then applicable Market Rent.

2.2.4.3 The Award issued by the Neutral Arbitrator shall be binding upon Landlord and Tenant.

2.2.4.4 If Landlord and Tenant fail to agree upon and appoint the Neutral Arbitrator, then either party may petition Judicial Arbitration & Mediation Services, Inc. (“ JAMS ”) to designate an independent third party to appoint the Neutral Arbitrator, subject to criteria in Section 2.2.5.1 of this Lease.

2.2.4.5 The cost of arbitration shall be paid by the party (either Landlord or Tenant) whose Market Rent is not selected by the Neutral Arbitrator.

ARTICLE 3

BASE RENT

Tenant shall pay, without prior notice or demand, to Landlord or Landlord’s agent at the management office of the Project, or, at Landlord’s option, at such other place as Landlord may from time to time designate in writing, by a check for currency which, at the time of payment, is legal tender for private or public debts in the United States of America, base rent (“ Base Rent ”) as set forth in Section 4 of the Summary, payable in equal monthly installments as set forth in Section 4 of the Summary in advance on or before the first day of each and every calendar month during the Lease Term, without any setoff or deduction whatsoever. The Base Rent for the first full month of the Lease Term shall be paid at the time of Tenant’s execution of this Lease. If any Rent payment date (including the Lease Commencement Date) falls on a day of the month other

than the first day of such month or if any payment of Rent is for a period which is shorter than one month, the Rent for any fractional month shall accrue on a daily basis for the period from the date such payment is due to the end of such calendar month or to the end of the Lease Term at a rate per day which is equal to 1/365 of the applicable annual Rent. All other payments or adjustments required to be made under the TCCs of this Lease that require proration on a time basis shall be prorated on the same basis.

ARTICLE 4

ADDITIONAL RENT

4.1 General Terms .

4.1.1 “Triple-Net” Lease . Landlord and Tenant understand and agree that this Lease is a “Triple Net” Lease. Tenant recognizes and acknowledges, without limiting the generality of any other TCCs of this Lease, that it is the intent of the parties hereto that the Base Rent provided to be paid by Tenant to Landlord shall be net to Landlord, and any and all expenses incurred in connection with the Premises, the Building and an applicable portion of the Common Areas, or in connection with the operations thereof, include any and all taxes, assessments, general or special license fees, insurance premiums, public utility bills and costs of repair, maintenance and operation of the Premises and the Project and all buildings, structures, permanent fixtures and other improvements comprised therein, together with the appurtenances thereto, shall be paid by Tenant in addition to the Base Rent specified in this Lease, except as otherwise specifically set forth herein.

4.1.2 Direct Payments; Additional Rent . In addition to paying the Base Rent specified in Article 3 of this Lease, Tenant shall, prior to and throughout the Lease Term, directly pay for (i) all utilities service charges accruing with regard to the Premises during the Lease Term, and (ii) all other costs required to be paid directly by Tenant pursuant to the TCCs of this Lease. Additionally, Tenant shall pay to Landlord “ Tenant’s Share ” of the annual “ Direct Expenses ,” as those terms are defined in Sections 4.2.6 and 4.2.2 , respectively, of this Lease. Such payments of Tenant’s Share of Direct Expenses by Tenant, together with any and all other amounts payable by Tenant to Landlord pursuant to the TCCs of this Lease, are hereinafter collectively referred to as the “ Additional Rent ,” and the Base Rent and the Additional Rent are herein collectively referred to as “ Rent .” All amounts due under this Article 4 as Additional Rent shall be payable for the same periods and in the same manner as the Base Rent. Without limitation on other obligations of Tenant which survive the expiration of the Lease Term, the obligations of Tenant to pay the Additional Rent accruing during the Lease Term provided for in this Article 4 shall survive the expiration of the Lease Term.

4.2 Definitions of Key Terms Relating to Additional Rent . As used in this Article 4 , the following terms shall have the meanings hereinafter set forth:

4.2.1 Intentionally Deleted.

4.2.2 “ Direct Expenses ” shall mean “Operating Expenses” and “Tax Expenses.”

4.2.3 “ Expense Year ” shall mean each calendar year in which any portion of the Lease Term falls, through and including the calendar year in which the Lease Term expires, provided that Landlord, upon notice to Tenant, may change the Expense Year from time to time to any other twelve (12) consecutive month period, and, in the event of any such change, Tenant’s Share of Direct Expenses shall be equitably adjusted for any Expense Year involved in any such change.

4.2.4 “ Operating Expenses ” shall mean all expenses, costs and amounts of every kind and nature which Landlord pays or accrues during any Expense Year because of or in connection with the ownership, management, maintenance, security, repair, replacement, restoration or operation of the Project, or any portion thereof, except as specifically set forth hereinbelow to the contrary. Without limiting the generality of the foregoing, Operating Expenses shall specifically include any and all of the following: (i) the cost of supplying all utilities to the Common Areas (as opposed to the cost of utilities to the Premises, which are to be directly paid by Tenant, or to the premises of third-party tenants in the Project), the cost of operating, repairing, maintaining, and renovating the utility, telephone, mechanical, sanitary, storm drainage, and elevator systems, and the cost of maintenance and service contracts in connection therewith; (ii) the cost of licenses, certificates, permits and inspections and the cost of contesting any governmental enactments which may affect Operating Expenses, and the costs incurred in connection with a governmentally mandated transportation system management program or similar program; (iii) the cost of all insurance carried by Landlord in connection with the Project; (iv) the cost of landscaping, relamping, and all supplies, tools, equipment and materials used in the operation, repair and maintenance of the Project, or any portion thereof; (v) costs incurred in connection with the parking areas servicing the Project; (vi) fees and other costs, including management fees (which management fee shall equal two and one-quarter percent (2¼%) of the Base Rent due under this Lease, unless increased pursuant to the terms of Section 6.5 of this Lease), consulting fees, legal fees and accounting fees, of all contractors and consultants in connection with the management, operation, maintenance and repair of the Project; (vii) the fair rental value of any management office space reasonably attributable to the Project (as opposed to being attributable to Landlord’s non-Project activities); (viii) wages, salaries and other compensation and benefits, including taxes levied thereon, of all persons (other than persons generally considered to be higher in rank than the position of Project manager) engaged in the operation, maintenance and security of the Project; (ix) costs under any recorded instrument pertaining to the sharing of costs by the Project; (x) operation, repair, maintenance and replacement of all systems and equipment and components thereof of the Building; (xi) the cost of janitorial, alarm, security and other services, replacement of wall and floor coverings, ceiling tiles and fixtures in common areas, maintenance and replacement of curbs and walkways, repair to the Building’s roof membrane; (xii) amortization (including interest on the unamortized cost) of the cost of acquiring or the rental expense of personal property used in the maintenance, operation and repair of the Project, or any portion thereof, to the extent of cost savings reasonably anticipated by Landlord at the time of such expenditure to be incurred in connection therewith; (xiii) the cost of capital improvements or other costs incurred in connection with the Project (A) which are intended to effect economies in the operation or maintenance of the Project, or any portion thereof, (B) that are required to comply with present or anticipated conservation programs, (C) which are replacements or modifications of nonstructural items located in the Common Areas required to keep the Common Areas in good order or condition, or (D) that are required under any governmental law or regulation by a federal, state or local

governmental agency, except for capital repairs, replacements or other improvements to remedy a condition existing prior to the Lease Commencement Date which an applicable governmental authority, if it had knowledge of such condition prior to the Lease Commencement Date, would have then required to be remedied pursuant to then-current governmental laws or regulations in their form existing as of the Lease Commencement Date and pursuant to the then-current interpretation of such governmental laws or regulations by the applicable governmental authority as of the Lease Commencement Date; provided, however, that any capital expenditure shall be amortized with interest over its useful life, as reasonably determined by Landlord pursuant to sound real estate accounting and management principles, consistently applied; (xiv) costs, fees, charges or assessments imposed by, or resulting from any mandate imposed on Landlord by, any federal, state or local government for fire and police protection, trash removal, community services, or other services which do not constitute “Tax Expenses” as that term is defined in Section 4.2.5 , below; and (xv) payments under any easement, license, operating agreement, declaration, restrictive covenant, or instrument pertaining to the sharing of costs by the Building. Notwithstanding the foregoing, for purposes of this Lease, Operating Expenses shall not, however, include:

(a) all costs relating to the maintenance and repair of the following structural items: (i) the foundation slab structure under the Building (ii) exterior wall structure of the Building, and (iii) the roof structure of the Building (excluding the membrane), except to the extent such repairs are required due to the negligence or willful misconduct of Tenant;

(b) costs, including marketing costs, legal fees, space planners’ fees, advertising and promotional expenses, and brokerage fees incurred in connection with the original construction or development, or original or future leasing of the Project, and costs, including permit, license and inspection costs, incurred with respect to the installation of tenant improvements made for other tenants or incurred in renovating or otherwise improving, decorating, painting or redecorating vacant space for tenants or other occupants of the Project (excluding, however, such costs relating to any common areas of the Project or parking facilities);

(c) except as set forth in items (xii), (xiii), and (xiv) above, depreciation, interest and principal payments on mortgages and other debt costs, if any, penalties and interest, costs of capital repairs and alterations, and costs of capital improvements and equipment;

(d) except as otherwise specifically provided in item (xiii) above, costs incurred by Landlord in the repairs, capital additions, alterations or replacements made or incurred to rectify or correct defects in original design, materials or workmanship in connection with the “Base Building,” as that term is defined in Section 8.2 , portions of the Project (as so excluded, the “ Non-Reimbursable Capital Improvements ”);

(e) costs for which the Landlord is reimbursed by any tenant or occupant of the Project or by insurance by its carrier or any tenant’s carrier or by anyone else, and electric power costs for which any tenant directly contracts with the local public service company;

(f) any bad debt loss, rent loss, or reserves for bad debts or rent loss;

(g) costs associated with the operation of the business of the partnership or entity which constitutes the Landlord, as the same are distinguished from the costs of operation of the Project (which shall specifically include, but not be limited to, accounting costs associated with the operation of the Project). Costs associated with the operation of the business of the partnership or entity which constitutes the Landlord include costs of partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of the Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of the Landlord’s interest in the Project, and costs incurred in connection with any disputes between Landlord and its employees, between Landlord and Project management, or between Landlord and other tenants or occupants, and Landlord’s general corporate overhead and general and administrative expenses;

(h) the wages and benefits of any employee who does not devote substantially all of his or her employed time to the Project unless such wages and benefits are prorated to reflect time spent on operating and managing the Project vis-a-vis time spent on matters unrelated to operating and managing the Project; provided, that in no event shall Operating Expenses for purposes of this Lease include wages and/or benefits attributable to personnel above the level of Project manager;

(i) interest, charges and fees incurred on debt, payments on mortgages and/or amount paid as ground rental for the Project by the Landlord;

(j) interest, late charges and tax penalties incurred as a result of Landlord’s gross negligence, inability or unwillingness to make payments or file returns when due;

(k) overhead and profit increment paid to the Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the costs of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;

(l) any compensation paid to clerks, attendants or other persons in commercial concessions operated by the Landlord, provided that any compensation paid to any concierge at the Project shall be includable as an Operating Expense;

(m) rentals and other related expenses incurred in leasing air conditioning systems, elevators or other equipment which if purchased the cost of which would be excluded from Operating Expenses as a capital cost, except equipment not affixed to the Project which is used in providing janitorial or similar services and, further excepting from this exclusion such equipment rented or leased to remedy or ameliorate an emergency condition in the Project;

(n) all items and services for which Tenant or any other tenant in the Project reimburses Landlord or which Landlord provides selectively to one or more tenants (other than Tenant) without reimbursement;

(o) costs, other than those incurred in ordinary maintenance and repair, for sculpture, paintings, fountains or other objects of art;

(p) any costs expressly excluded from Operating Expenses elsewhere in this Lease;

(q) any costs expressly included as Tax Expenses pursuant to Section 4.2.5 , below;

(r) rent for any office space occupied by Project management personnel to the extent the size or rental rate of such office space exceeds the size or fair market rental value of office space occupied by management personnel of the Comparable Buildings in the vicinity of the Building, with adjustment where appropriate for the size of the applicable project;

(s) reserves for depreciation, amortization and other expenses;

(t) costs arising from the active negligence or willful misconduct of Landlord or its agents, employees, vendors, contractors, or providers of materials or services; and

(u) costs incurred to comply with laws relating to the removal of hazardous material (as defined under applicable law) which was in existence in the Building or on the Project prior to the Commencement date of the Original Office Lease, and was of such a nature that a federal, State or municipal governmental authority, if it had then had knowledge of the presence of such hazardous material, in the state, and under the conditions that it then existed in the Building or on the Project, would have then required the removal of such hazardous material or other remedial or containment action with respect thereto; and costs incurred to remove, remedy, contain, or treat hazardous material, which hazardous material is brought into the Building or onto the Project after the date hereof by Landlord or any other tenant of the Project and is of such a nature, at that time, that a federal, State or municipal governmental authority, if it had then had knowledge of the presence of such hazardous material, in the state, and under the conditions, that it then exists in the Building or on the Project, would have then required the removal of such hazardous material or other remedial or containment action with respect thereto.

4.2.5 Taxes .

4.2.5.1 “ Tax Expenses ” shall mean all federal, state, county, or local governmental or municipal taxes, fees, charges or other impositions of every kind and nature, whether general, special, ordinary or extraordinary, (including, without limitation, real estate taxes, general and special assessments, transit taxes, leasehold taxes or taxes based upon the receipt of rent, including gross receipts or sales taxes applicable to the receipt of rent, unless required to be paid by Tenant, personal property taxes imposed upon the fixtures, machinery, equipment, apparatus, systems and equipment, appurtenances, furniture and other personal property used in connection with the Project, or any portion thereof), which shall be paid or accrued during any Expense Year (without regard to any different fiscal year used by such governmental or municipal authority) because of or in connection with the ownership, leasing

and operation of the Project, or any portion thereof. Notwithstanding anything to the contrary set forth in this Section 4.2.5 , Tax Expenses shall specifically exclude bonds and/or assessments which have been or, subsequent to the date hereof are, levied for the purpose of funding the costs of construction of all or any portion of the Project or capital improvements constructed therein or about, or on-or off-site improvements with respect thereto, to the extent such improvements are the sole responsibility of Landlord under the TCCs of this Lease.

4.2.5.2 Tax Expenses shall include, without limitation: (i) Any tax on the rent, right to rent or other income from the Project, or any portion thereof, or as against the business of leasing the Project, or any portion thereof; (ii) Any assessment, tax, fee, levy or charge in addition to, or in substitution, partially or totally, of any assessment, tax, fee, levy or charge previously included within the definition of real property tax, it being acknowledged by Tenant and Landlord that Proposition 13 was adopted by the voters of the State of California in the June 1978 election (“ Proposition 13 ”) and that assessments, taxes, fees, levies and charges may be imposed by governmental agencies for such services as fire protection, street, sidewalk and road maintenance, refuse removal and for other governmental services formerly provided without charge to property owners or occupants, and, in further recognition of the decrease in the level and quality of governmental services and amenities as a result of Proposition 13, Tax Expenses shall also include any governmental or private assessments or the Project’s contribution towards a governmental or private cost-sharing agreement for the purpose of augmenting or improving the quality of services and amenities normally provided by governmental agencies; (iii) Any assessment, tax, fee, levy, or charge allocable to or measured by the area of the Premises or the Rent payable hereunder, including, without limitation, any business or gross income tax or excise tax with respect to the receipt of such rent, or upon or with respect to the possession, leasing, operating, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises, or any portion thereof; and (iv) Any assessment, tax, fee, levy or charge, upon this transaction or any document to which Tenant is a party, creating or transferring an interest or an estate in the Premises.

4.2.5.3 Any costs and expenses (including, without limitation, reasonable attorneys’ fees) incurred in attempting to protest, reduce or minimize Tax Expenses shall be included in Tax Expenses in the Expense Year such expenses are paid. Except as set forth in Section 4.2.5.4 , below, refunds of Tax Expenses shall be credited against Tax Expenses and refunded to Tenant regardless of when received, based on the Expense Year to which the refund is applicable, provided that in no event shall the amount to be refunded to Tenant for any such Expense Year exceed the total amount paid by Tenant as Additional Rent under this Article 4 for such Expense Year. If Tax Expenses for any period during the Lease Term or any extension thereof are increased after payment thereof for any reason, including, without limitation, error or reassessment by applicable governmental or municipal authorities, Tenant shall pay Landlord upon demand Tenant’s Share of any such increased Tax Expenses included by Landlord as Building Tax Expenses pursuant to the TCCs of this Lease. Notwithstanding anything to the contrary contained in this Section 4.2.8 (except as set forth in Section 4.2.8.1 , above), there shall be excluded from Tax Expenses (i) all excess profits taxes, franchise taxes, gift taxes, capital stock taxes, inheritance and succession taxes, estate taxes, federal and state income taxes, and other taxes to the extent applicable to Landlord’s general or net income from all sources, (ii) any items included as Operating Expenses, (iii) any items paid by Tenant under Section 4.5 of this

Lease, and (iv) transfer taxes associated with the sale or other transfer by Landlord of its interest in the Project.

4.2.6 “ Tenant’s Share ” shall mean the percentage set forth in Section 6 of the Summary.

4.3 Allocation of Direct Expenses .

4.3.1 Method of Allocation . The parties acknowledge that the Building is a part of a multi-building project and that the costs and expenses incurred in connection with the Project ( i.e. the Direct Expenses) should be shared between the tenants of the Building and the tenants of the other buildings in the Project. Accordingly, as set forth in Section 4.2 above, Direct Expenses (which consists of Operating Expenses and Tax Expenses) are determined annually for the Project as a whole, and a portion of the Direct Expenses, which portion shall be determined by Landlord on an equitable basis, shall be allocated to the Building (as opposed to any other buildings in the Project) and such portion shall be the Direct Expenses for purposes of this Lease. Such portion of Direct Expenses allocated to the Building shall include all Direct Expenses attributable solely to the Building and an equitable portion of the Direct Expenses attributable to the Project as a whole.

4.4 Calculation and Payment of Additional Rent . Tenant shall pay to Landlord, in the manner set forth in Section 4.4.1 , below, and as Additional Rent, Tenant’s Share of Direct Expenses for each Expense Year.

4.4.1 Statement of Actual Building Direct Expenses and Payment by Tenant . Landlord shall give to Tenant following the end of each Expense Year, a statement (the “ Statement ”) which shall state the Building Direct Expenses incurred or accrued for such preceding Expense Year, and which shall indicate the amount of Tenant’s Share of Direct Expenses. Landlord shall use commercially reasonable efforts to deliver such Statement to Tenant on or before May 1 following the end of the Expense Year to which such Statement relates. Upon receipt of the Statement for each Expense Year commencing or ending during the Lease Term, Tenant shall pay, within thirty (30) days after receipt of the Statement, the full amount of Tenant’s Share of Direct Expenses for such Expense Year, less the amounts, if any, paid during such Expense Year as “Estimated Direct Expenses,” as that term is defined in Section 4.4.2 , below, and if Tenant paid more as Estimated Direct Expenses than the actual Tenant’s Share of Direct Expenses (an “ Excess ”), Tenant shall receive a credit in the amount of such Excess against Rent next due under this Lease. The failure of Landlord to timely furnish the Statement for any Expense Year shall not prejudice Landlord or Tenant from enforcing its rights under this Article 4 . Even though the Lease Term has expired and Tenant has vacated the Premises, when the final determination is made of Tenant’s Share of Direct Expenses for the Expense Year in which this Lease terminates, if Tenant’s Share of Direct Expenses is greater than the amount of Estimated Direct Expenses previously paid by Tenant to Landlord, Tenant shall, within thirty (30) days after receipt of the Statement, pay to Landlord such amount, and if Tenant paid more as Estimated Direct Expenses than the actual Tenant’s Share of Direct Expenses (again, an Excess), Landlord shall, within thirty (30) days, deliver a check payable to Tenant in the amount of such Excess. The provisions of this Section 4.4.1 shall survive the expiration or earlier termination of the Lease Term. Notwithstanding the immediately preceding sentence,

Tenant shall not be responsible for Tenant’s Share of any Building Direct Expenses attributable to any Expense Year which are first billed to Tenant more than two (2) calendar years after the Lease Expiration Date, provided that in any event Tenant shall be responsible for Tenant’s Share of Direct Expenses levied by any governmental authority or by any public utility companies at any time following the Lease Expiration Date which are attributable to any Expense Year.

4.4.2 Statement of Estimated Building Direct Expenses . In addition, Landlord shall give Tenant a yearly expense estimate statement (the “ Estimate Statement ”) which shall set forth in general major categories Landlord’s reasonable estimate (the “ Estimate ”) of what the total amount of Direct Expenses for the then-current Expense Year shall be and the estimated Tenant’s Share of Direct Expenses (the “ Estimated Direct Expenses ”). Landlord shall use commercially reasonable efforts to deliver such Estimate Statement to Tenant on or before April 1 following the end of the Expense Year to which such Estimate Statement relates. The failure of Landlord to timely furnish the Estimate Statement for any Expense Year shall not preclude Landlord from enforcing its rights to collect any Estimated Direct Expenses under this Article 4 , nor shall Landlord be prohibited from revising any Estimate Statement or Estimated Direct Expenses theretofore delivered to the extent necessary. Thereafter, Tenant shall pay, within thirty (30) days after receipt of the Estimate Statement, a fraction of the Estimated Direct Expenses for the then-current Expense Year (reduced by any amounts paid pursuant to the second to last sentence of this Section 4.4.2 ). Such fraction shall have as its numerator the number of months which have elapsed in such current Expense Year, including the month of such payment, and twelve (12) as its denominator. Until a new Estimate Statement is furnished (which Landlord shall have the right to deliver to Tenant at any time), Tenant shall pay monthly, with the monthly Base Rent installments, an amount equal to one-twelfth (1/12) of the total Estimated Direct Expenses set forth in the previous Estimate Statement delivered by Landlord to Tenant. Throughout the Lease Term Landlord shall maintain books and records with respect to Building Direct Expenses in accordance with generally accepted real estate accounting and management practices, consistently applied.

4.5 Taxes and Other Charges for Which Tenant Is Directly Responsible .

4.5.1 Tenant shall be liable for and shall pay ten (10) days before delinquency, taxes levied against Tenant’s equipment, furniture, fixtures and any other personal property located in or about the Premises. If any such taxes on Tenant’s equipment, furniture, fixtures and any other personal property are levied against Landlord or Landlord’s property or if the assessed value of Landlord’s property is increased by the inclusion therein of a value placed upon such equipment, furniture, fixtures or any other personal property and if Landlord pays the taxes based upon such increased assessment, which Landlord shall have the right to do regardless of the validity thereof but only under proper protest if requested by Tenant, Tenant shall upon demand repay to Landlord the taxes so levied against Landlord or the proportion of such taxes resulting from such increase in the assessment, as the case may be.

4.5.2 If the tenant improvements in the Premises, whether installed and/or paid for by Landlord or Tenant and whether or not affixed to the real property so as to become a part thereof, are assessed for real property tax purposes at a valuation higher than the valuation at which tenant improvements conforming to Landlord’s “building standard” in other space in the Building are assessed, then the Tax Expenses levied against Landlord or the property by reason

of such excess assessed valuation shall be deemed to be taxes levied against personal property of Tenant and shall be governed by the provisions of Section 4.5.1 , above.

4.5.3 Notwithstanding any contrary provision herein, Tenant shall pay prior to delinquency any (i) rent tax or sales tax, service tax, transfer tax or value added tax, or any other applicable tax on the rent or services herein or otherwise respecting this Lease, (ii) taxes assessed upon or with respect to the possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any portion of the Project, including the Project parking facility; or (iii) taxes assessed upon this transaction or any document to which Tenant is a party creating or transferring an interest or an estate in the Premises.

4.5.4 Tenant shall be liable for and shall pay directly to Landlord within thirty (30) days of being invoiced therefor, the actual cost, if any, incurred by Landlord’s for carrying, pursuant to the terms and conditions of Section 10.2 , below, “Pollution Legal Liability Environmental Insurance.”

4.6 Landlord’s Books and Records . Within two (2) years after receipt of a Statement by Tenant, if Tenant disputes the amount of Additional Rent set forth in the Statement, a determination as to the proper amount shall be made, at Tenant’s expense, by an independent certified public accountant (the “ Accountant ”) selected by Landlord and subject to Tenant’s reasonable approval, by inspecting Landlord’s records with respect to the Statement at Landlord’s offices, provided that Tenant is not then in default under this Lease (beyond any applicable notice and cure periods) and Tenant has paid all amounts required to be paid under the applicable Estimate Statement and Statement, as the case may be. In connection with such inspection, the Accountant must agree in advance to follow Landlord’s reasonable rules and procedures regarding inspections of Landlord’s records, and shall execute a commercially reasonable confidentiality agreement regarding such inspection. If such determination by the Accountant proves that Direct Expenses were overstated by more than five percent (5%), then the cost of the Accountant and the cost of such determination shall be paid for by Landlord. Tenant’s failure to dispute the amount of Additional Rent set forth in any Statement within two (2) years of Tenant’s receipt of such Statement shall be deemed to be Tenant’s approval of such Statement and Tenant, thereafter, waives the right or ability to dispute the amounts set forth in such Statement. Tenant hereby acknowledges that Tenant’s sole right to inspect Landlord’s books and records and to contest the amount of Direct Expenses payable by Tenant shall be as set forth in this Section 4.6 , and Tenant hereby waives any and all other rights pursuant to Applicable Law to inspect such books and records and/or to contest the amount of Direct Expenses payable by Tenant.

ARTICLE 5

USE OF PREMISES

5.1 Permitted Use . Tenant shall use the Premises solely for the Permitted Use set forth in Section 7 of the Summary and Tenant shall not use or permit the Premises or the Project to be used for any other purpose or purposes whatsoever without the prior written consent of Landlord, which may be withheld in Landlord’s reasonable discretion.

5.2 Prohibited Uses . The uses prohibited under this Lease shall include, without limitation, use of the Premises or a portion thereof for (i) offices of any agency or bureau of the United States or any state or political subdivision thereof; (ii) offices or agencies of any foreign governmental or political subdivision thereof; (iii) medical/operational offices (as opposed to general offices) of any health care professionals; (iv) schools or other training facilities which are not ancillary to corporate, executive or professional office use; (v) retail or restaurant uses; or (vi) communications firms such as radio and/or television stations. Tenant further covenants and agrees that Tenant shall not use, or suffer or permit any person or persons to use, the Premises or any part thereof for any use or purpose contrary to the provisions of the Rules and Regulations set forth in Exhibit D , attached hereto, or in violation of the laws of the United States of America, the State of California, or the ordinances, regulations or requirements of the local municipal or county governing body or other lawful authorities having jurisdiction over the Project) including, without limitation, any such laws, ordinances, regulations or requirements relating to hazardous materials or substances, as those terms are defined by applicable laws now or hereafter in effect; provided, however, Landlord shall not enforce, change or modify the Rules and Regulations in a discriminatory manner and Landlord agrees that the Rules and Regulations shall not be unreasonably modified or enforced in a manner which will unreasonably interfere with the normal and customary conduct of Tenant’s business. Tenant shall not do or permit anything to be done in or about the Premises which will in any way damage the reputation of the Project or obstruct or interfere with the rights of other tenants or occupants of the Building, or injure or annoy them or use or allow the Premises to be used for any improper, unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about the Premises.

5.3 CC&Rs . Tenant shall comply with all recorded covenants, conditions, and restrictions currently affecting the Project. Additionally, Tenant acknowledges that the Project may be subject to any future covenants, conditions, and restrictions (the “ CC&Rs ”) which Landlord, in Landlord’s discretion, deems reasonably necessary or desirable (provided, however, such amendments and/or modifications do not prohibit the Permitted Use in the Project and do not materially adversely interfere with Tenant’s use and enjoyment of the Premises), and Tenant agrees that this Lease shall be subject and subordinate to such CC&Rs. Landlord shall have the right to require Tenant to execute and acknowledge, within fifteen (15) business days of a request by Landlord, a “Recognition of Covenants, Conditions, and Restriction,” in a form substantially similar to that attached hereto as Exhibit F , agreeing to and acknowledging the CC&Rs.

ARTICLE 6

SERVICES AND UTILITIES;
TENANT’S MAINTENANCE AND REPAIR OBLIGATIONS

6.1 Providing Services and Utilities . Tenant hereby acknowledges that Landlord has previously provided, and shall maintain pursuant to the TCCs of Article 7 of this Lease, the currently existing facilities for the provision of utilities to the exterior areas of the Project and to the point of entry in the Building (i.e., to the main utility distribution systems located therein), and Tenant shall provide and maintain the facilities for the distribution of such utilities from such entry point to the interior of the Premises. Landlord shall not be responsible for, and Tenant

shall be solely responsible for, paying all third party utility service charges for all utilities consumed within the Building on and after the Lease Commencement Date, and within the Project from and after the 10445 Premises Effective Date, as are necessary for Tenant’s use of the Premises, including, without limitation, if applicable, electricity, potable water, natural gas, sewage disposal, and solid waste disposal. In addition Tenant shall be solely responsible for providing any security and janitorial service required by Tenant. Landlord shall reasonably cooperate with Tenant, in connection with Tenant’s application for and renewal of any permits or agreements with utility companies in connection with the providing of utility services to the Building on and after the Lease Commencement Date, and within the Project from and after the 10445 Premises Effective Date. In connection with the foregoing, Tenant shall directly pay one hundred percent (100%) of the third-party charges of all such utilities and services (e.g., electricity, gas, sewer and water utilities) attributable to its use of the Building on and after the Lease Commencement Date, and within the Project from and after the 10445 Premises Effective Date, which payments shall be made on or prior to the date on which the same are due to the applicable utility and service providers.

6.2 Tenant Maintained Building Systems; HVAC . Except with regard to the Building Structure and exterior portions of the Project which shall be maintained by Landlord pursuant to the TCCs of Section 7.1 , below, Tenant shall maintain, repair and replace all Premises improvements. The improvements to be so maintained, repaired, improved and/or replaced by Tenant include, without limitation, the interior portion of the Premises, (i) the interior utility systems (specifically including, without limitation, all plumbing and sewer systems and any “Alterations” (as that term is defined in Section 8.1, below) thereof), (ii) the roof membrane and mechanical, electrical, life safety, plumbing, fire-sprinkler systems serving the Building, (iii) any improvements or equipment installed by Tenant, specifically including any Tenant improvements constructed pursuant to the Tenant Work Letter or any “Alterations” constructed pursuant to the TCCs of Article 8, (iv) the main heating, ventilating, air conditioning (“ HVAC ”),and the electrical, plumbing and lifesafety infrastructure distribution systems located within the Building, (v) the “Central Plant Area,” as that term is set forth in Section 29.35, and (vi) any other element of the Project not expressly the responsibility of Landlord pursuant to the TCCs of Section 7.1 (individually, a “ Building System ” and collectively, the “ Building Systems ”). Tenant shall perform its maintenance and repair obligations set forth in this Section 6.2 (“ Tenant’s Maintenance Obligations ”), at Tenant’s sole, direct cost.

6.3 Tenant Maintained Security . Tenant hereby acknowledges that Landlord shall have no obligation to provide guard service or other security measures for the benefit of the Premises, the Building or the Project. Any security measures desired by Tenant for the benefit of the Premises, the Building or the Project shall be provided by Tenant, at Tenant’s sole cost and expense. Tenant hereby assumes all responsibility for the protection of Tenant and its agents, employees, contractors, invitees and guests, and the property thereof, from acts of third parties, including keeping doors locked and other means of entry to the Premises closed.

6.4 Tenant Maintenance Standards . All Building Systems, including HVAC, shall be maintained, repaired and replaced by Tenant (i) in a commercially reasonable first-class condition, (ii) in accordance with any applicable manufacturer specifications relating to any particular component of such Building Systems, (iii) in accordance with Applicable Laws, and (iv) in accordance with any requirements of the cGMP Standard.

6.4.1 Maintenance Meetings . At the written request of Landlord (a “ MM Request ”), Tenant shall arrange to meet and confer with Landlord (at a mutually reasonable and convenient time and location), as to the status of the maintenance, repair, replacement and other work required to be performed by each of them under this Lease (each, a “ Maintenance Meeting ”); provided, however, in no event shall Tenant be required to participate in more than one such Maintenance Meeting in any calendar quarter throughout the Lease Term, unless such a Maintenance Meeting is required in connection with an emergency situation or event.

6.4.2 Service Contracts; Books and Records . To the extent Tenant contracts with third parties to perform its maintenance, repair and replacement obligations hereunder, or any portion thereof (each, a “ Service Contract ”), Tenant shall deliver full and complete copies of all such Service Contracts entered into by Tenant for the Building Systems to Landlord within thirty (30) days after the effective date of such Service Contract. In addition, Tenant shall regularly, in accordance with commercially reasonable standards, generate and maintain preventive maintenance records relating to the Building’s mechanical and main electrical systems, including life safety, elevators and the central plant (“ Books and Records ”).

6.4.3 M&R Reports . In connection with, and in advance of, any such Maintenance Meeting, Tenant shall promptly deliver any Books and Records, together with any maintenance, repair and replacement reports, documents and back-up materials related to any major repair or replacement work performed or then scheduled to be performed by Tenant under the Lease (collectively, the “ M&R Reports ”).

6.4.4 Tenant’s Responsibilities Upon Termination of Management of the Project . Upon the expiration or earlier termination of this Lease for any reason, or upon Landlord’s recapture of Tenant’s maintenance and repair obligations pursuant to the TCCs of Section 6.5, below, Tenant shall forthwith, without necessity of demand or notice, deliver the following to Landlord, or Landlord’s appointed agent on the effective date of expiration or termination (except to the extent that any such item has already been delivered to Landlord).

(i) Copies of the Books and Records for the most recent full calendar year and any subsequent partial calendar year.

(ii) Any third party warranties, guaranties and operating manuals in Tenant’s possession relating to the improvements in the Project and any Building Systems being maintained by Tenant (copies thereof where reasonably acceptable).

(iii) All keys related to the telephone closets, janitorial closets, electrical closets, storage rooms, storage areas, SDG&E rooms or areas, rooftop access points, and other areas which would traditionally be characterized as Common Areas.

(iv) A certification that Tenant has maintained those portions of the Project, Building and Premises required to be maintained by Tenant in accordance with the TCCs of this Article 6.

The obligation of Tenant to deliver the foregoing shall survive the termination of the Lease.

6.4.5 Assignment of Warranties . As of the Effective Date, Landlord assigns to Tenant all of Landlord’s rights under any and all warranties and service contracts, to the extent existing, which relate to any Building System or other maintenance obligations of Tenant under the terms of this Lease.

6.5 Landlord’s Assumption Of Maintenance . Landlord shall have the right, after twenty-four (24) hours notice to Tenant, to inspect the Building, Building Systems, the Central Plant Area, and/or Tenant’s Books and Records, in order to ensure compliance with this Article 6 . In the event Tenant fails, in the reasonable judgment of Landlord, to provide the maintenance services (or cause the same to be provided) in accordance with the obligations set forth in this Article 6 , Landlord shall deliver a written notice (a “ Maintenance Failure Notice ”) to Tenant stating with particularity the nature of such failure (such failure by Tenant to be known as a “ Tenant Maintenance Failure ”). If such Tenant Maintenance Failure continues at the end of the fifth (5 th ) business day following the date of delivery of such Maintenance Failure Notice, then Landlord shall have the right to provide such maintenance and Tenant shall pay Landlord the cost thereof promptly upon being billed for same (including a percentage of the cost thereof sufficient to reimburse Landlord for all overhead, general conditions, fees and other costs or expenses arising from Landlord’s involvement with such maintenance); provided, however, in the event of an emergency, Landlord may take such remedial action immediately following the delivery of the Maintenance Failure Notice. In the event more than two (2) Tenant Maintenance Failures occur during any calendar year during the Lease Term, Landlord may, but need not, assume such repair and maintenance obligations on behalf of Tenant for the remainder of the Lease Term, in which case (i) Tenant shall pay Landlord the cost thereof promptly upon being billed for same, and (ii) Landlord’s management fee for the Project shall, notwithstanding the management fee set forth in Section 4.2.4(vi) , be increased to five percent (5%).

6.6 Interruption of Use . Except as otherwise provided in this Lease, Tenant agrees that Landlord shall not be liable for damages, by abatement of Rent or otherwise, for failure to furnish or delay in furnishing any service (including telephone and telecommunication services), or for any diminution in the quality or quantity thereof, when such failure or delay or diminution is occasioned, in whole or in part, by breakage, repairs, replacements, or improvements, by any strike, lockout or other labor trouble, by inability to secure electricity, gas, water, or other fuel at the Building or Project after reasonable effort to do so, by any riot or other dangerous condition, emergency, accident or casualty whatsoever, by act or default of Tenant or other parties, or by any other cause beyond Landlord’s reasonable control; and such failures or delays or diminution shall never be deemed to constitute an eviction or disturbance of Tenant’s use and possession of the Premises or relieve Tenant from paying Rent or performing any of its obligations under this Lease, except as otherwise provided in this Lease. Furthermore, Landlord shall not be liable under any circumstances for consequential damages relating to the loss of, or injury to, property or for injury to, or interference with, Tenant’s business, including, without limitation, loss of profits, however occurring, through or in connection with or incidental to a failure to furnish any of the services or utilities as set forth in this Article 6 .

6.7 Rent Abatement . If Landlord fails to perform the obligations required of Landlord under the TCCs of this Lease and such failure causes all or a portion of the Premises to be untenantable and unusable by Tenant and such failure relates to the nonfunctioning of the heat, ventilation, and air conditioning system in the Premises, the electricity in the Premises, the

nonfunctioning of the elevator service to the Premises, or a failure to provide access to the Premises, Tenant shall give Landlord notice (the “ Initial Notice ”), specifying such failure to perform by Landlord (the “ Landlord Default ”). If Landlord has not cured such Landlord Default within five (5) business days after the receipt of the Initial Notice (the “ Eligibility Period ”), Tenant may deliver an additional notice to Landlord (the “ Additional Notice ”), specifying such Landlord Default and Tenant’s intention to abate the payment of Rent under this Lease. If Landlord does not cure such Landlord Default within five (5) business days of receipt of the Additional Notice, Tenant may, upon written notice to Landlord, immediately abate Rent payable under this Lease for that portion of the Premises rendered untenantable and not used by Tenant, for the period beginning on the date five (5) business days after the Initial Notice to the earlier of the date Landlord cures such Landlord Default or the date Tenant recommences the use of such portion of the Premises. Such right to abate Rent shall be Tenant’s sole and exclusive remedy at law or in equity for a Landlord Default. Except as provided in this Section 6.4 , nothing contained herein shall be interpreted to mean that Tenant is excused from paying Rent due hereunder.

ARTICLE 7

BUILDING STRUCTURE & PROJECT EXTERIOR REPAIRS

7.1 Landlord’s Maintenance Obligations . Landlord shall repair, replace and maintain in a first-class condition and operating order the structural portions of the Building, including, without limitation, the foundation, floor slabs, Building skin and roof (not including the roof membrane), curtain wall (including gaskets and seals), exterior glass and mullions, columns, beams, shafts and stairwells (collectively, “ Building Structure ”), and all portions of the Project existing outside of the Building including, without limitation, the parking facilities, sidewalks, gutters, and landscaping and hardscaping; provided, however, for the purposes of this Article 7, the Building Structure shall not apply to the extent of any Alteration or other improvements thereto made by or on behalf of Tenant under the terms of this Lease or the Original Lease. Notwithstanding anything in this Lease to the contrary, Tenant shall be required to repair the Building Structure to the extent caused due to Tenant’s use of the Premises for other than normal and customary implementation of the Permitted Use, unless and to the extent such damage is covered by insurance carried or required to be carried by Landlord pursuant to Article 10 and to which the waiver of subrogation is applicable (such obligation to the extent applicable to Tenant as qualified and conditioned will hereinafter be defined as the “ BS Exception ”). While Landlord shall perform all of such work allocated to Landlord under this Section 7.1 (collectively, the “ LL Maintenance Obligations ”), the reasonable, actual costs related to Landlord’s performance of reasonably required maintenance included with such LL Maintenance Obligations shall be included in Operating Expenses (except to the extent such costs are incurred for Non-Reimbursable Capital Improvements). Any entry of the Premises by Landlord in connection with the foregoing shall be done consistent with the terms of Article 27 of this Lease. Tenant acknowledges that, Tenant shall, at Tenant’s own expense, pursuant to the TCCs of this Lease, including, without limitation Article 6 and Article 8 hereof, remain responsible for the maintenance, repair and replacement of all of the remaining portions of the Building (i.e., the Building Structure).Except as specifically set forth in Section 7.2 of this Lease, below, Tenant hereby waives any and all rights under and benefits of subsection 1 of Section

1932 and Sections 1941 and 1942 of the California Civil Code or under any similar law, statute, or ordinance now or hereafter in effect.

7.2 Tenant’s Right to Make Repairs . Notwithstanding the provisions of Section 7.1 , above, if Tenant provides notice to Landlord of an event or circumstance which requires the action of Landlord with respect to repair and/or maintenance as set forth in Section 7.1 , above and Landlord fails to provide such action within (30) days after receipt of such notice, then Tenant may proceed to take the required action upon delivery of an additional ten (10) days notice to Landlord specifying that Tenant is taking such required action, and if such action was required under the TCCs of this Lease to be taken by Landlord, then Tenant shall be entitled to prompt reimbursement by Landlord of Tenant’s reasonable costs and expenses in taking such action; provided, however, notwithstanding such thirty (30) day period, Landlord shall use commercially reasonable efforts to expedite such repairs to ensure completion as soon as reasonably practicable. In the event Tenant takes such action, Tenant shall use only those contractors used by Landlord in the Building for similar work unless such contractors are unwilling or unable to perform such work, in which event Tenant may utilize the services of any other qualified contractor which normally and regularly performs similar work in the Comparable Buildings. If Landlord delivers to Tenant within thirty (30) days after receipt of Tenant’s invoice, a written objection to the payment of such invoice, setting forth with reasonable particularity Landlord’s reasons for its claim that such action did not have to be taken by Landlord pursuant to the TCCs of this Lease or that the charges are excessive (in which case Landlord shall pay the amount it contends would not have been excessive), then, as Tenant’s sole remedy, Tenant may proceed to institute legal proceedings against Landlord to collect the amount set forth in the subject invoice; provided that under no circumstances shall Tenant be allowed to (i) deduct such disputed amount from Rent, or (ii) terminate this Lease. If Tenant receives a non-appealable final judgment against Landlord in connection with such legal proceedings, Tenant may deduct the amount of the judgment, not to exceed the amount of the unpaid portion of the relevant invoice, from the Base Rent next due and owing under this Lease; provided, however, Tenant may not deduct the amount of the judgment against more than fifty percent (50%) of Base Rent next due and owing (until such time as the entire amount of such judgment is deducted) to the extent following a foreclosure or a deed-in-lieu of foreclosure.

ARTICLE 8

ADDITIONS AND ALTERATIONS

8.1 Landlord’s Consent to Alterations . Tenant may not make any improvements, alterations, additions, repairs or changes to the Premises or any mechanical, plumbing or HVAC facilities or systems pertaining to the Premises (collectively, the “ Alterations ”) without first procuring the prior written consent of Landlord to such Alterations, which consent shall be requested by Tenant not less than fifteen (15) business days prior to the commencement thereof, and which consent shall not be unreasonably withheld by Landlord, provided it shall be deemed reasonable for Landlord to withhold its consent to any Alteration which adversely affects the structural portions or the systems or equipment of the Building or is visible from the exterior of the Building. Notwithstanding the foregoing, Tenant shall be permitted to make Alterations following fifteen (15) days notice to Landlord, but without Landlord’s prior consent, to the extent that such Alterations do not (i) involve the expenditure of more than $100,000.00 in the

aggregate in any Lease Year; (ii) adversely affect the systems and equipment of the Building or the Building Structure, or (iii) adversely affect the exterior appearance of the Building (the “ Cosmetic Alterations ”). The construction of the initial improvements to the Premises shall be governed by the terms of the Tenant Work Letter and not the terms of this Article 8 .

8.2 Manner of Construction . Landlord may impose, as a condition of its consent to any and all Alterations or repairs of the Premises or about the Premises, such requirements as Landlord in its reasonable discretion may deem desirable; provided, however, such requirement shall at a minimum include, but not limited to, the following: (i) the requirement that Tenant utilize for such purposes only contractors reasonably approved by Landlord, (ii) the requirement that upon Landlord’s request made at the time such consent is granted, Tenant shall, at Tenant’s expense, remove such Alterations upon the expiration or any early termination of the Lease Term and return the affected portion of the Premises to a building standard general laboratory improved condition consistent with the cGMP Standard and otherwise as reasonably determined by Landlord; (iii) the requirement that a copy of Tenant’s contract(s) with its contractors be delivered to Landlord prior to the commencement of any such construction (which contracts shall state that all change orders must be approved, in writing, by Landlord prior to implementation); (iv) Landlord’s review and approval of the final budget (contractor’s cost proposal) for such Alterations or repairs; and (v) the requirement that Tenant shall meet with Landlord, prior to the commencement of any construction, to discuss Landlord’s design parameters and code compliance issues. Tenant shall construct such Alterations and perform such repairs in a good and workmanlike manner, in conformance with any and all applicable federal, state, county or municipal laws, rules and regulations and pursuant to a valid building permit, issued by the City of San Diego, all in conformance with Landlord’s construction rules and regulations. In the event Tenant performs any Alterations in the Premises which require or give rise to governmentally required changes to the “Base Building,” as that term is defined below, then Landlord shall, at Tenant’s expense, make such changes to the Base Building. The “ Base Building ” shall consist of the Building Structure. In performing the work of any such Alterations, Tenant shall have the work performed in such manner so as not to obstruct access to the Project or any portion thereof, by any other tenant of the Project, and so as not to obstruct the business of Landlord or other tenants in the Project. Tenant shall not use (and upon notice from Landlord shall cease using) contractors, services, workmen, labor, materials or equipment that, in Landlord’s reasonable judgment, would disturb labor harmony with the workforce or trades engaged in performing other work, labor or services in or about the Building or the Common Areas. In addition to Tenant’s obligations under Article 9 of this Lease, upon completion of any Alterations, Tenant agrees to cause a Notice of Completion to be recorded in the office of the Recorder of the County of San Diego in accordance with Section 3093 of the Civil Code of the State of California or any successor statute, and Tenant shall deliver to the Project construction manager a reproducible copy of the “as built” drawings of the Alterations, to the extent applicable, as well as all permits, approvals and other documents issued by any governmental agency in connection with the Alterations.

8.3 Payment for Improvements . Tenant shall sign Landlord’s standard contractor’s rules and regulations to the extent the same are commercially reasonable. Except with regard to Cosmetic Alterations for which there shall be no such charge, whether or not Tenant orders any work directly from Landlord, Tenant shall pay to Landlord an amount equal to one percent (1%)

of the cost of such work to compensate Landlord for all overhead, general conditions, fees and other costs and expenses arising from Landlord’s involvement with such work.

8.4 Construction Insurance . In addition to the requirements of Article 10 of this Lease, in the event that Tenant makes any Alterations, prior to the commencement of such Alterations, Tenant shall provide Landlord with evidence that Tenant carries “Builder’s All Risk” insurance in an amount reasonably approved by Landlord covering the construction of such Alterations, and such other insurance as Landlord may reasonably require, it being understood and agreed that all of such Alterations shall be insured by Tenant pursuant to Article 10 of this Lease immediately upon completion thereof. In addition, for any Alterations with an aggregate cost equal to or greater than $100,000.00 in any Lease Year, Tenant shall obtain a lien and completion bond or some alternate form of security reasonably satisfactory to Landlord in an amount sufficient to ensure the lien-free completion of such Alterations and naming Landlord as a co-obligee (“ Alteration Security ”); provided, however, if Tenant meets or exceeds one or both of the financial thresholds set forth in Sections 21.2.2.2(ii) and (iii) of this Lease , then Tenant shall not be required to obtain such Alteration Security.

8.5 Landlord’s Property . Landlord and Tenant hereby acknowledges and agree that (i) all Alterations, improvements, fixtures, affixed equipment and/or appurtenances which may be installed or placed in or about the Premises, from time to time, shall be at the sole cost of Tenant and shall be and become the property of Landlord, except as more particularly set forth below, and (ii) the Tenant Improvements to be constructed in the Premises pursuant to the TCCs of the Tenant Work Letter shall, upon completion of the same, be and become a part of the Premises and the property of Landlord. Notwithstanding the foregoing, and provided that (A) the same are not Tenant Improvements constructed pursuant to the terms of the Tenant Work Letter, and (B) Landlord has not previously identified the same as “must-remain” items pursuant to the procedure set forth below, Tenant may remove any other Alterations, improvements, fixtures and/or equipment which Tenant can substantiate to Landlord have not been paid for (in whole or in part) with any improvement allowance funds provided to Tenant by Landlord, provided Tenant repairs any damage to the Premises and Building caused by such removal and returns the affected portion of the Premises to a building standard general laboratory improved condition as reasonably determined by Landlord. Furthermore, Landlord may, by written notice to Tenant prior to the end of the Lease Term, or given following any earlier termination of this Lease, require Tenant, at Tenant’s expense, to (i) remove any Alterations or improvements in the Premises installed pursuant to this Article 8 , and/or (ii) remove any “Above Building Standard Tenant Improvements,” as that term is defined in Section 2.4 of the Tenant Work Letter, located within the Premises and replace the same with then existing “Building Standard Tenant Improvements,” as that term is defined in Section 2.3 of the Tenant Work Letter, and to repair any damage to the Premises and Building caused by such removal and returns the affected portion of the Premises to a building standard tenant improved condition as reasonably determined by Landlord; provided, however, if in connection with its request for Landlord’s approval for particular Alterations, (1) Tenant requests Landlord’s decision with regard to the removal of such Alterations, and (2) Landlord thereafter agrees in writing to waive the removal requirement when approving such Alterations, then Tenant shall not be required to so remove such Alterations; provided further, however, that Landlord may, in connection with Landlord’s approval for particular Alterations (or, in Landlord’s approval is not required or sought, then within thirty (30) days of Landlord being notified of such Alterations), identify particular

Alterations as those which must-remain in the Premises and become the property of Landlord. If Tenant fails to complete such removal and/or to repair any damage caused by the removal of any Alterations or improvements in the Premises, and returns the affected portion of the Premises to a building standard tenant improved condition as determined by Landlord, then at Landlord’s option, either (X) Tenant shall be deemed to be holding over in the Premises and Rent shall continue to accrue in accordance with the terms of Article 16 , below, until such work shall be completed, or (Y) Landlord may do so and may charge the cost thereof to Tenant. Tenant hereby protects, defends, indemnifies and holds Landlord harmless from any liability, cost, obligation, expense or claim of lien in any manner relating to the violation of the foregoing provisions, which obligations of Tenant shall survive the expiration or earlier termination of this Lease.

ARTICLE 9

COVENANT AGAINST LIENS

Tenant shall keep the Project and Premises free from any liens or encumbrances arising out of the work performed, materials furnished or obligations incurred by or on behalf of Tenant, and shall protect, defend, indemnify and hold Landlord harmless from and against any claims, liabilities, judgments or costs (including, without limitation, reasonable attorneys’ fees and costs) arising out of same or in connection therewith. Tenant shall give Landlord notice at least twenty (20) days prior to the commencement of any such work on the Premises (or such additional time as may be necessary under applicable laws) to afford Landlord the opportunity of posting and recording appropriate notices of non-responsibility. Tenant shall remove any such lien or encumbrance by bond or otherwise within ten (10) days after notice by Landlord, and if Tenant shall fail to do so, Landlord may pay the amount necessary to remove such lien or encumbrance, without being responsible for investigating the validity thereof. The amount so paid shall be deemed Additional Rent under this Lease payable upon demand, without limitation as to other remedies available to Landlord under this Lease. Nothing contained in this Lease shall authorize Tenant to do any act which shall subject Landlord’s title to the Building or Premises to any liens or encumbrances whether claimed by operation of law or express or implied contract. Any claim to a lien or encumbrance upon the Building or Premises arising in connection with any such work or respecting the Premises not performed by or at the request of Landlord shall be null and void, or at Landlord’s option shall attach only against Tenant’s interest in the Premises and shall in all respects be subordinate to Landlord’s title to the Project, Building and Premises. Notwithstanding anything in this Article 9 to the contrary, Landlord hereby acknowledges and agrees that Tenant may grant a security interest to Tenant’s construction lender pursuant to the express terms and conditions of Section 5.5 of the Tenant Work Letter.

ARTICLE 10

INSURANCE

10.1 Indemnification and Waiver . Tenant hereby releases Landlord from all risk of damage to property or injury to persons in, upon or about the Premises from any cause whatsoever (other than Landlord’s and Landlord Parties’ negligence or willful misconduct) and agrees that Landlord, its partners, subpartners and their respective officers, agents, servants, employees, and independent contractors (collectively, “ Landlord Parties ”) shall not be liable to

Tenant for, and are hereby released from any responsibility to Tenant for, any damage either to person or property or resulting from the loss of use thereof, which damage is sustained by Tenant or by other persons claiming through Tenant (other than damage arising due to Landlord’s and Landlord Parties’ negligence or willful misconduct). Tenant shall indemnify, defend, protect, and hold harmless the Landlord Parties from any and all loss, cost, damage, expense and liability (including without limitation court costs and reasonable attorneys’ fees) incurred in connection with or arising from any cause in or on the Premises (other than Landlord’s and Landlord Parties’ negligence or willful misconduct), any acts, omissions or negligence of Tenant or of any person claiming by, through or under Tenant, or of the contractors, agents, servants, employees, or licensees of Tenant (collectively, the “ Tenant Parties ”), in, on or about the Project or any breach of the TCCs of this Lease, either prior to, during, or after the expiration of the Lease Term, provided that the terms of the foregoing indemnity shall not apply to the negligence or willful misconduct of Landlord or any Landlord Party. Should Landlord be named as a defendant in any suit brought against Tenant in connection with or arising out of Tenant’s occupancy of the Premises and subject to the indemnification provision hereinabove, Tenant shall pay to Landlord its costs and expenses incurred in such suit, including without limitation, its actual professional fees such as appraisers’, accountants’ and attorneys’ fees. Further, Tenant’s agreement to indemnify Landlord pursuant to this Section 10.1 is not intended and shall not relieve any insurance carrier of its obligations under policies required to be carried by Tenant or Landlord pursuant to the provisions of this Lease, to the extent such policies cover the matters subject to Tenant’s indemnification obligations; nor shall they supersede any inconsistent agreement of the parties set forth in any other provision of this Lease. The provisions of this Section 10.1 shall survive the expiration or sooner termination of this Lease with respect to any claims or liability arising in connection with any event occurring prior to such expiration or termination. Notwithstanding anything to the contrary contained in this Lease, nothing in this Lease shall impose any obligations on Tenant or Landlord to be responsible or liable for, and each hereby releases the other from all liability for, consequential damages other than those consequential damages incurred by Landlord in connection with a holdover of the Premises by Tenant after the expiration or earlier termination of this Lease.

10.2 Landlord’s Fire, Casualty and Liability Insurance . Landlord shall carry commercial general liability insurance with respect to the Project and Building during the Lease Term, shall further insure the Project and Building Structure during the Lease Term against loss or damage due to fire and other casualties covered within the classification of fire and extended coverage, vandalism coverage and malicious mischief, sprinkler leakage, water damage and special extended coverage, as well as flood damage and additional hazards, and shall further carry rental interruption coverage for a period of one year. Such coverage shall be in such amounts, from such companies, and on such other terms and conditions, as Landlord may from time to time reasonably determine; provided, however, such coverage shall be for the full replacement value of the Building Structure and the Project in compliance with all then-existing Applicable Laws. Additionally, at the option of Landlord, such insurance coverage may include the risks of (i) earthquakes, (ii) one or more loss payee endorsements in favor of the holders of any mortgages or deeds of trust encumbering the interest of Landlord in the Building or the ground or underlying lessors of the Building, or any portion thereof, and (iii) ”Pollution Legal Liability Environmental Insurance,” as that term is set forth below; provided, however, that to the extent Tenant is not in default of this Lease (beyond any applicable notice and cure periods), Tenant shall have the option, upon thirty (30) days written notice to Landlord, to itself carry such

Pollution Legal Liability Environmental Insurance in lieu of Landlord carrying such insurance; provided further, however, to the extent Tenant elects to carry such Pollution Legal Liability Environment Insurance pursuant to the foregoing option, Tenant shall comply with the express coverage requirements set forth hereinbelow and such insurance coverage shall otherwise comply with the TCCs of Section 10.4 , below. Notwithstanding the foregoing provisions of this Section 10.2 , the coverage and amounts of insurance carried by Landlord in connection with the Building shall, at a minimum, be comparable to the coverage and amounts of insurance which are carried by reasonably prudent landlords of Comparable Buildings, and Worker’s Compensation and Employer’s Liability coverage as required by applicable law. Tenant shall, at Tenant’s expense, comply with all commercially reasonable insurance company requirements pertaining to the use of the Premises. If Tenant’s conduct or use of the Premises causes any increase in the premium for such insurance policies then Tenant shall reimburse Landlord for any such increase. Tenant, at Tenant’s expense, shall comply with all rules, orders, regulations or requirements of the American Insurance Association (formerly the National Board of Fire Underwriters) and with any similar body. For purposes of this Lease, the “ Pollution Legal Liability Environmental Insurance ” (aka an “Owner’s Policy” of environmental insurance) shall mean insurance (1) from an insurance carrier with a credit rating of no less than AAA, it being acknowledged and agreed by Landlord that, as of the date of this Lease, Kemper, AIG, Chubb, Zurich and the XL Insurance Company currently satisfy such credit rating, and (2) providing, at a minimum, the following: (a) an initial 5-year policy term (with successive 1-year terms renewable on a rolling annual basis, until such time as the policy term equals or exceeds the Lease Expiration Date), (b) $2,000,000 coverage per incident or occurrence, (c) $2,000,000 aggregate coverage, (d) a deductible or self-insured retention of no more than $25,000, and (e) coverage for: (A) known and unknown pre-existing conditions; (B) unknown and later discovered conditions; (C) on-site and off-site third-party claims for bodily injury or property damage; and (D) legal defense expenses. Furthermore, the policy of insurance must include an automatic extended reporting period that provides the Insured a period of no less than sixty (60) days following the effective date of termination of coverage in which to provide written notice to the insurance carrier of claims first made and reported within the automatic extended reporting period. All other terms, coverage, exclusions, or conditions of the policy shall be at Landlord’s sole and complete discretion.

10.3 Tenant’s Insurance . Tenant shall maintain the following coverages in the following amounts.

10.3.1 Commercial General Liability Insurance covering the insured against claims of bodily injury, personal injury and property damage (including loss of use thereof) arising out of Tenant’s operations, and contractual liabilities (covering the performance by Tenant of its indemnity agreements) including a Broad Form endorsement covering the insuring provisions of this Lease and, to the extent consistent with commercially standard policies of such insurance coverage, the performance by Tenant of the indemnity agreements set forth in Section 10.1 of this Lease, for limits of liability not less than:

Bodily Injury and		$5,000,000 each occurrence
Property Damage Liability		$5,000,000 annual aggregate

Personal Injury Liability		$5,000,000 each occurrence
		$5,000,000 annual aggregate
		0% Insured’s participation

10.3.2 Physical Damage Insurance covering (i) all office furniture, business and trade fixtures, office equipment, free-standing cabinet work, movable partitions, merchandise and all other items of Tenant’s property on the Premises installed by, for, or at the expense of Tenant, (ii) the Building Systems, the “Tenant Improvements,” as that term is defined in Section 2.1 of the Tenant Work Letter, and any other improvements which exist in the Premises as of the Lease Commencement Date (excluding the Base Building) (the “ Original Improvements ”), and (iii) all other improvements, alterations and additions to the Premises made by Tenant. Such insurance shall be written on a “special cause of loss” physical loss or damage basis, for the full replacement cost value (subject to reasonable deductible amounts) new without deduction for depreciation of the covered items and in amounts that meet any co-insurance clauses of the policies of insurance and shall include coverage for damage or other loss caused by fire or other peril including, but not limited to, vandalism and malicious mischief, theft, water damage of any type (provided the following shall not require Tenant to carry flood insurance, which flood insurance may instead be carried by Landlord pursuant to Section 10.2 , above), including sprinkler leakage, bursting or stoppage of pipes, and explosion.

10.3.3 Worker’s Compensation and Employer’s Liability or other similar insurance pursuant to all applicable state and local statutes and regulations.

10.4 Form of Policies . The minimum limits of policies of insurance required of Tenant under this Lease shall in no event limit the liability of Tenant under this Lease. Such insurance shall (i) name Landlord, and any other party the Landlord so specifies that has a material financial interest in the Project, as an additional insured, including Landlord’s managing agent, if any; (ii) specifically cover the liability assumed by Tenant under this Lease, including, but not limited to, Tenant’s obligations under Section 10.1 of this Lease to the extent consistent with commercially standard policies of such insurance coverage; (iii) be issued by an insurance company having a rating of not less than A-X in Best’s Insurance Guide or which is otherwise acceptable to Landlord and licensed to do business in the State of California; (iv) be primary insurance as to all claims thereunder and provide that any insurance carried by Landlord is excess and is non-contributing with any insurance requirement of Tenant; (v) be in form and content reasonably acceptable to Landlord; and (vi) provide that said insurance shall not be canceled or coverage materially changed unless ten (10) days’ prior written notice shall have been given to Landlord and any mortgagee of Landlord, the identity of whom has been provided to Tenant in writing. Tenant shall deliver said policy or policies or certificates thereof to Landlord on or before the Lease Commencement Date and at least thirty (30) days before the expiration dates thereof. In the event Tenant shall fail to procure such insurance, or to deliver such policies or certificate, Landlord may, at its option, after written notice to Tenant and Tenant’s failure to obtain such insurance within five (5) days thereafter, procure such policies for the account of Tenant, and the cost thereof shall be paid to Landlord within thirty (30) days after delivery to Tenant of bills therefor.

10.5 Subrogation . Landlord and Tenant intend that their respective property loss risks shall be borne by reasonable insurance carriers to the extent above provided, and, notwithstanding any provisions to the contrary set forth in this Lease, Landlord and Tenant hereby agree to look solely to, and seek recovery only from, their respective insurance carriers in the event of a property loss to the extent that such coverage is agreed to be provided hereunder. The parties each hereby waive all rights and claims against each other for such losses, and waive all rights of subrogation of their respective insurers, provided such waiver of subrogation shall not affect the right to the insured to recover thereunder. The parties agree that their respective insurance policies are now, or shall be, endorsed such that the waiver of subrogation shall not affect the right of the insured to recover thereunder, so long as no material additional premium is charged therefor (unless the other party agrees to pay such additional premium).

10.6 Additional Insurance Obligations . Tenant shall carry and maintain during the entire Lease Term, at Tenant’s sole cost and expense, increased amounts of the insurance required to be carried by Tenant pursuant to this Article 10 and such other reasonable types of insurance coverage and in such reasonable amounts covering the Premises and Tenant’s operations therein, as may be reasonably requested by Landlord, but in no event in excess of the amounts and types of insurance then being required by landlords of other Comparable Buildings.

10.7 Risk Management Obligations . Landlord and Tenant shall promptly advise each other as to (i) any alleged accidents or casualty known by the reporting party which are substantially likely to result in the assertion of a claim against the other party, and (ii) the occurrence of any substantial casualty damage to the Project known to the reporting party. Landlord and Tenant shall notify each other promptly of any threatened or pending condemnation, rezoning or other governmental orders, proceedings or lawsuits involving the Project.

ARTICLE 11

DAMAGE AND DESTRUCTION

11.1 Repair of Damage to Premises by Landlord . If the Building Structure or any portions of the Project existing outside of the Building serving or providing access to the Premises shall be damaged by fire or other casualty, Landlord shall promptly and diligently, subject to reasonable delays for insurance adjustment or other matters beyond Landlord’s reasonable control (specifically including, without limitation, any requirement to obtain any license, clearance or other authorization of any kind required to enter into and restore the Premises issued by any governmental or quasi-governmental agency having jurisdiction over the use, storage, release or removal of “Hazardous Materials,” as that term is set forth in Section 29.33 of this Lease, below, in, on or about the Premises (collectively, the “ Hazardous Materials Clearances ”), which Hazardous Materials Clearances shall be obtained by Tenant), and subject to all other terms of this Article 11 , restore the Building Structure and all such portions of the Project existing outside of the Building. Such restoration shall be to substantially the same condition of the Building Structure and exterior Project components prior to the casualty, except for modifications required by zoning and building codes and other laws or by the holder of a mortgage on the Building or Project or any other modifications to the exterior Project components deemed desirable by Landlord, which are consistent with the character of the

Project, provided that access to the Premises and any common restrooms serving the Premises shall not be materially impaired. Upon the occurrence of any damage to the Premises, Tenant shall, at its sole cost and expense, repair any injury or damage to the Building Systems, Tenant Improvements and the Original Improvements installed in the Premises and shall return such Building Systems, Tenant Improvements and Original Improvements to the condition existing immediately prior to such casualty (provided such Building Systems, Tenant Improvements and Original Improvements were properly maintained pursuant to the TCCs of this Lease prior to such casualty), except for modifications required by “Applicable Laws,” as that term is set forth in Article 24 of this Lease. Prior to the commencement of construction, Tenant shall submit to Landlord, for Landlord’s review and approval, all plans, specifications and working drawings relating thereto, and Tenant shall select the contractors, subject to Landlord’s reasonable approval, to perform such improvement work. Landlord shall not be liable for any inconvenience or annoyance to Tenant or its visitors, or injury to Tenant’s business resulting in any way from such damage or the repair thereof; provided however, that if such fire or other casualty shall have damaged the Premises or Common Areas necessary to Tenant’s occupancy, and the Premises are not occupied by Tenant as a result thereof, then during the time and to the extent the Premises are unfit for occupancy, the Rent shall be abated in proportion to the ratio that the amount of rentable square feet of the Premises which is unfit for occupancy for the purposes permitted under this Lease bears to the total rentable square feet of the Premises; provided further, however, that if any Hazardous Materials Clearances are required to be obtained by Tenant before such restoration can begin, such abatement of Rent shall continue for only so long as Tenant, in Landlord’s reasonable judgment, diligently pursues obtaining such required Hazardous Materials Clearances. Tenant’s right to rent abatement pursuant to the preceding sentence shall terminate as of the date which is reasonably determined by Landlord to be the date Tenant should have completed repairs to the Premises assuming Tenant used reasonable due diligence in connection therewith.

11.2 Landlord’s Option to Repair . Notwithstanding the terms of Section 11.1 of this Lease, Landlord may elect not to rebuild and/or restore the Building Structure and/or exterior Project components, and instead terminate this Lease, by notifying Tenant in writing of such termination within sixty (60) days after the date of discovery of the damage, such notice to include a termination date giving Tenant sixty (60) days to vacate the Premises, but Landlord may so elect only if the Building Structure or exterior Project components shall be damaged by fire or other casualty or cause, whether or not the Premises are affected, and one or more of the following conditions is present: (i) in Landlord’s reasonable judgment, repairs cannot reasonably be completed within one hundred eighty (180) days after the date of discovery of the damage (when such repairs are made without the payment of overtime or other premiums); (ii) the holder of any mortgage on the Building or Project or ground lessor with respect to the Building or Project shall require that the insurance proceeds or any portion thereof be used to retire the mortgage debt, or shall terminate the ground lease, as the case may be; (iii) the damage is not fully covered by the insurance policies Landlord is required to carry pursuant to the TCCs of this Lease; (iv) Landlord cannot, pursuant to the applicable laws then in effect, rebuild the Building Structure or exterior Project components so that they will be substantially the same structurally or architecturally; or (v) the damage occurs during the last twelve (12) months of the Lease Term; provided, however, that if Landlord does not elect to terminate this Lease pursuant to Landlord’s termination right as provided above, and the repairs cannot, in the reasonable opinion of Landlord, be completed within one hundred eighty (180) days after being commenced, Tenant

may elect, no earlier than sixty (60) days after the date of the damage and not later than ninety (90) days after the date of such damage, to terminate this Lease by written notice to Landlord effective as of the date specified in the notice, which date shall not be less than thirty (30) days nor more than sixty (60) days after the date such notice is given by Tenant. Furthermore, if neither Landlord nor Tenant has terminated this Lease, and the repairs are not actually completed within such 180-day period, Tenant shall have the right to terminate this Lease during the first five (5) business days of each calendar month following the end of such period until such time as the repairs are complete, by notice to Landlord (the “ Damage Termination Notice ”), effective as of a date set forth in the Damage Termination Notice (the “ Damage Termination Date ”), which Damage Termination Date shall not be less than ten (10) business days following the end of each such month. Notwithstanding the foregoing, if Tenant delivers a Damage Termination Notice to Landlord, then Landlord shall have the right to suspend the occurrence of the Damage Termination Date for a period ending thirty (30) days after the Damage Termination Date set forth in the Damage Termination Notice by delivering to Tenant, within five (5) business days of Landlord’s receipt of the Damage Termination Notice, a certificate of Landlord’s contractor responsible for the repair of the damage certifying that it is such contractor’s good faith judgment that the repairs shall be substantially completed within thirty (30) days after the Damage Termination Date. If repairs shall be substantially completed prior to the expiration of such thirty-day period, then the Damage Termination Notice shall be of no force or effect, but if the repairs shall not be substantially completed within such thirty-day period, then this Lease shall terminate upon the expiration of such thirty-day period. At any time, from time to time, after the date occurring sixty (60) days after the date of the damage, Tenant may request that Landlord inform Tenant of Landlord’s reasonable opinion of the date of completion of the repairs and Landlord shall respond to such request within five (5) business days. Notwithstanding the provisions of this Section 11.2 , Tenant shall have the right to terminate this Lease under this Section 11.2 only if each of the following conditions is satisfied: (a) the damage to the Project by fire or other casualty was not caused by the gross negligence or intentional act of Tenant or its partners or subpartners and their respective officers, agents, servants, employees, and independent contractors; (b) as a result of the damage, Tenant cannot reasonably conduct business from the Premises; and, (c) as a result of the damage to the Project, Tenant does not occupy or use the Premises at all. In the event this Lease is terminated in accordance with the terms of this Section 11.2 , Tenant shall assign to Landlord (or to any party designated by Landlord) all insurance proceeds payable to Tenant under Tenant’s insurance required under Section 10.3.2 of this Lease; provided, however, that notwithstanding anything to the contrary set forth above, Tenant shall be entitled to retain a portion of such proceeds equal to the then-remaining unamortized amount (based on a straight-line amortization over the initial Lease Term) of the “Initial TI Disbursement” and the “Over-Allowance Amount,” as those terms are set forth in Sections 2.2.2.1 and 4.2.1 , respectively, of the Tenant Work Letter.

11.3 Waiver of Statutory Provisions . The provisions of this Lease, including this Article 11 , constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any part of the Premises, the Building or the Project, and any statute or regulation of the State of California, including, without limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with respect to any rights or obligations concerning damage or destruction in the absence of an express agreement between the parties, and any other statute or regulation, now or hereafter in effect, shall have no application to this Lease or any damage or destruction to all or any part of the Premises, the Building or the Project.

ARTICLE 12

NONWAIVER

No provision of this Lease shall be deemed waived by either party hereto unless expressly waived in a writing signed thereby. The waiver by either party hereto of any breach of any term, covenant or condition herein contained shall not be deemed to be a waiver of any subsequent breach of same or any other term, covenant or condition herein contained. The subsequent acceptance of Rent hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease, other than the failure of Tenant to pay the particular Rent so accepted, regardless of Landlord’s knowledge of such preceding breach at the time of acceptance of such Rent. No acceptance of a lesser amount than the Rent herein stipulated shall be deemed a waiver of Landlord’s right to receive the full amount due, nor shall any endorsement or statement on any check or payment or any letter accompanying such check or payment be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the full amount due. No receipt of monies by Landlord from Tenant after the termination of this Lease shall in any way alter the length of the Lease Term or of Tenant’s right of possession hereunder, or after the giving of any notice shall reinstate, continue or extend the Lease Term or affect any notice given Tenant prior to the receipt of such monies, it being agreed that after the service of notice or the commencement of a suit, or after final judgment for possession of the Premises, Landlord may receive and collect any Rent due, and the payment of said Rent shall not waive or affect said notice, suit or judgment.

ARTICLE 13

CONDEMNATION

If the whole or any part of the Premises or the Building shall be taken by power of eminent domain or condemned by any competent authority for any public or quasi-public use or purpose, or if any adjacent property or street shall be so taken or condemned, or reconfigured or vacated by such authority in such manner as to require the use, reconstruction or remodeling of any part of the Premises or Building, or if Landlord shall grant a deed or other instrument in lieu of such taking by eminent domain or condemnation, Landlord shall have the option to terminate this Lease effective as of the date possession is required to be surrendered to the authority. If more than fifty percent (50%) of the rentable square feet of the Premises is taken, or if access to the Premises is substantially impaired, in each case for a period in excess of one hundred eighty (180) days, Tenant shall have the option to terminate this Lease effective as of the date possession is required to be surrendered to the authority. Tenant shall not because of such taking assert any claim against Landlord or the authority for any compensation because of such taking and Landlord shall be entitled to the entire award or payment in connection therewith, except that Tenant shall have the right to file any separate claim available to Tenant for any taking of (i) Tenant’s personal property, and (ii) improvements and fixtures belonging to Tenant and removable by Tenant upon expiration of the Lease Term pursuant to the TCCs of this Lease, and for moving expenses, so long as such claims do not diminish the award available to Landlord, its ground lessor with respect to the Building or Project or its mortgagee, and such claim is payable separately to Tenant. All Rent shall be apportioned as of the date of such termination. If any

part of the Premises shall be taken, and this Lease shall not be so terminated, the Rent shall be proportionately abated. Tenant hereby waives any and all rights it might otherwise have pursuant to Section 1265.130 of The California Code of Civil Procedure. Notwithstanding anything to the contrary contained in this Article 13 , in the event of a temporary taking of all or any portion of the Premises for a period of one hundred and eighty (180) days or less, then this Lease shall not terminate but the Base Rent and the Additional Rent shall be abated for the period of such taking in proportion to the ratio that the amount of rentable square feet of the Premises taken bears to the total rentable square feet of the Premises. Landlord shall be entitled to receive the entire award made in connection with any such temporary taking.

ARTICLE 14

ASSIGNMENT AND SUBLETTING

14.1 Transfers . Tenant shall not, without the prior written consent of Landlord as set forth more particularly in Section 14.2, below, assign, mortgage, pledge, hypothecate, encumber, or permit any lien to attach to, or otherwise transfer, this Lease or any interest hereunder, permit any assignment, or other transfer of this Lease or any interest hereunder by operation of law, sublet the Premises or any part thereof, or enter into any license or concession agreements or otherwise permit the occupancy or use of the Premises or any part thereof by any persons other than Tenant and its employees and contractors (all of the foregoing are hereinafter sometimes referred to collectively as “ Transfers ” and any person to whom any Transfer is made or sought to be made is hereinafter sometimes referred to as a “ Transferee ”). If Tenant desires Landlord’s consent to any Transfer, Tenant shall notify Landlord in writing, which notice (the “ Transfer Notice ”) shall include (i) the proposed effective date of the Transfer, which shall not be less than thirty (30) days nor more than one hundred eighty (180) days after the date of delivery of the Transfer Notice, (ii) a description of the portion of the Premises to be transferred (the “ Subject Space ”), (iii) all of the terms of the proposed Transfer and the consideration therefor, including calculation of the “ Transfer Premium ”, as that term is defined in Section 14.3 below, in connection with such Transfer, the name and address of the proposed Transferee, and a copy of all existing executed and/or proposed documentation pertaining to the proposed Transfer, including all existing operative documents to be executed to evidence such Transfer or the agreements incidental or related to such Transfer, (iv) current financial statements of the proposed Transferee certified by an officer, partner or owner thereof, business credit and personal references and history of the proposed Transferee and any other information required by Landlord which will enable Landlord to determine the financial responsibility, character, and reputation of the proposed Transferee, nature of such Transferee’s business and proposed use of the Subject Space and (v) an executed estoppel certificate from Tenant in the form attached hereto as Exhibit E . Any Transfer made without Landlord’s prior written consent shall, at Landlord’s option, be null, void and of no effect, and shall, at Landlord’s option, constitute a default by Tenant under this Lease. Whether or not Landlord consents to any proposed Transfer, Tenant shall, within thirty (30) days after written request by Landlord, reimburse Landlord for all reasonable and actual out-of-pocket third-party costs and expenses incurred by Landlord in connection with its review of a proposed Transfer; provided that such costs and expenses shall not exceed One Thousand Five Hundred and No/100 Dollars ($1,500.00) for a Transfer in the ordinary course of business. Landlord and Tenant hereby agree that a proposed Transfer shall not be considered “in the ordinary course of business” if such Transfer involves the review of

documentation by Landlord on more than two (2) occasions with regard to a single proposed Transfer.

14.2 Landlord’s Consent . Landlord shall not unreasonably withhold its consent to any proposed Transfer of the Subject Space to the Transferee on the terms specified in the Transfer Notice. Without limitation as to other reasonable grounds for withholding consent, the parties hereby agree that it shall be reasonable under this Lease and under any applicable law for Landlord to withhold consent to any proposed Transfer where one or more of the following apply:

14.2.1 The Transferee is of a character or reputation or engaged in a business which is not consistent with the quality of the Building or the Project;

14.2.2 The Transferee intends to use the Subject Space for purposes which are not permitted under this Lease;

14.2.3 The Transferee is either a governmental agency or instrumentality thereof;

14.2.4 The Transferee is not a party of reasonable financial worth and/or financial stability in light of the responsibilities to be undertaken in connection with the Transfer on the date consent is requested;

14.2.5 The proposed Transfer would cause a violation of another lease for space in the Project, or would give an occupant of the Project a right to cancel its lease;

14.2.6 The terms of the proposed Transfer will allow the Transferee to exercise a right of renewal, right of expansion, right of first offer, or other similar right held by Tenant (or will allow the Transferee to occupy space leased by Tenant pursuant to any such right);

14.2.7 Either the proposed Transferee, or any person or entity which directly or indirectly, controls, is controlled by, or is under common control with, the proposed Transferee, (i) occupies space in the Project at the time of the request for consent, or (ii) is negotiating with Landlord to lease space in the Project at such time, or (iii) has negotiated with Landlord during the six (6)-month period immediately preceding the Transfer Notice, and Landlord has available space in the Project suitable for such proposed Transferee; or

14.2.8 The Transferee does not intend to occupy the entire Premises and conduct its business therefrom for a substantial portion of the term of the Transfer.

If Landlord consents to any Transfer pursuant to the terms of this Section 14.2 (and does not exercise any recapture rights Landlord may have under Section 14.4 of this Lease), Tenant may within six (6) months after Landlord’s consent, but not later than the expiration of said six-month period, enter into such Transfer of the Premises or portion thereof, upon substantially the same terms and conditions as are set forth in the Transfer Notice furnished by Tenant to Landlord pursuant to Section 14.1 of this Lease, provided that if there are any changes in the terms and conditions from those specified in the Transfer Notice (i) such that Landlord would initially have been entitled to refuse its consent to such Transfer under this Section 14.2 , or (ii) which would cause the proposed Transfer to be more favorable to the Transferee than the

terms set forth in Tenant’s original Transfer Notice, Tenant shall again submit the Transfer to Landlord for its approval and other action under this Article 14 (including Landlord’s right of recapture, if any, under Section 14.4 of this Lease). Notwithstanding anything to the contrary in this Lease, if Tenant or any proposed Transferee claims that Landlord has unreasonably withheld or delayed its consent under Section 14.2 or otherwise has breached or acted unreasonably under this Article 14 , their sole remedies shall be a declaratory judgment and an injunction for the relief sought without any monetary damages, and Tenant hereby waives all other remedies, including, without limitation, any right at law or equity to terminate this Lease, on its own behalf and, to the extent permitted under all applicable laws, on behalf of the proposed Transferee. Tenant shall indemnify, defend and hold harmless Landlord from any and all liability, losses, claims, damages, costs, expenses, causes of action and proceedings involving any third party or parties (including without limitation Tenant’s proposed subtenant or assignee) who claim they were damaged by Landlord’s wrongful withholding or conditioning of Landlord’s consent, unless a court of competent jurisdiction determines that Landlord was wrongful in its withholding or conditioning of its consent.

14.3 Transfer Premium . If Landlord consents to a Transfer, as a condition thereto which the parties hereby agree is reasonable, Tenant shall pay to Landlord fifty percent (50%) of any “Transfer Premium,” as that term is defined in this Section 14.3 , received by Tenant from such Transferee. “ Transfer Premium ” shall mean all rent, additional rent or other consideration payable by such Transferee in connection with the Transfer in excess of the Rent and Additional Rent payable by Tenant under this Lease during the term of the Transfer on a per rentable square foot basis if less than all of the Premises is transferred, after deducting the reasonable expenses incurred by Tenant for (i) any changes, alterations and improvements to the Premises in connection with the Transfer, (ii) any free base rent reasonably provided to the Transferee, and (iii) any commercially reasonable brokerage commissions and legal fees in connection with the Transfer. “Transfer Premium” shall also include, but not be limited to, key money, bonus money or other cash consideration paid by Transferee to Tenant in connection with such Transfer, and any payment in excess of fair market value for services rendered by Tenant to Transferee or for assets, fixtures, inventory, equipment, or furniture transferred by Tenant to Transferee in connection with such Transfer. In the calculations of the Rent (as it relates to the Transfer Premium calculated under this Section 14.3 ), and the Transferee’s Rent and Quoted Rent under Section 14.2 of this Lease, the Rent paid during each annual period for the Subject Space, and the Transferee’s Rent and the Quoted Rent, shall be computed after adjusting such rent to the actual effective rent to be paid, taking into consideration any and all leasehold concessions granted in connection therewith, including, but not limited to, any rent credit and improvement allowance. For purposes of calculating any such effective rent all such concessions shall be amortized on a straight-line basis over the relevant term.

14.4 Landlord’s Option as to Subject Space . In the event that a proposed Transfer, if consented to, would cause fifty percent (50%) or more of the Premises to be subleased or assigned to a party other than Original Tenant and/or its Affiliates, then notwithstanding anything to the contrary contained in this Article 14 , Notwithstanding anything to the contrary contained in this Article 14 , Landlord shall have the option, by giving written notice to Tenant within thirty (30) days after receipt of any Transfer Notice, to recapture the Subject Space. Such recapture notice shall cancel and terminate this Lease with respect to the Subject Space as of the date stated in the Transfer Notice as the effective date of the proposed Transfer until the last day

of the term of the Transfer as set forth in the Transfer Notice (or at Landlord’s option, shall cause the Transfer to be made to Landlord or its agent, in which case the parties shall execute the Transfer documentation promptly thereafter). In the event of a recapture by Landlord, if this Lease shall be canceled with respect to less than the entire Premises, the Rent reserved herein shall be prorated on the basis of the number of rentable square feet retained by Tenant in proportion to the number of rentable square feet contained in the Premises, and this Lease as so amended shall continue thereafter in full force and effect, and upon request of either party, the parties shall execute written confirmation of the same. If Landlord declines, or fails to elect in a timely manner to recapture the Subject Space under this Section 14.4 , then, provided Landlord has consented to the proposed Transfer, Tenant shall be entitled to proceed to transfer the Subject Space to the proposed Transferee, subject to provisions of this Article 14 .

14.5 Effect of Transfer . If Landlord consents to a Transfer, (i) the TCCs of this Lease shall in no way be deemed to have been waived or modified, (ii) such consent shall not be deemed consent to any further Transfer by either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord, promptly after execution, an original executed copy of all documentation pertaining to the Transfer in form reasonably acceptable to Landlord, (iv) Tenant shall furnish upon Landlord’s request a complete statement, certified by Tenant’s chief financial officer, setting forth in detail the computation of any Transfer Premium Tenant has derived and shall derive from such Transfer, and (v) no Transfer relating to this Lease or agreement entered into with respect thereto, whether with or without Landlord’s consent, shall relieve Tenant or any guarantor of the Lease from any liability under this Lease, including, without limitation, in connection with the Subject Space. Landlord or its authorized representatives shall have the right at all reasonable times to audit the books, records and papers of Tenant relating to any Transfer, and shall have the right to make copies thereof. If the Transfer Premium respecting any Transfer shall be found understated, Tenant shall, within thirty (30) days after demand, pay the deficiency, and if understated by more than five percent (5%), Tenant shall pay Landlord’s costs of such audit.

14.6 Additional Transfers . For purposes of this Lease, the term “ Transfer ” shall also include (i) if Tenant is a partnership, the withdrawal or change, voluntary, involuntary or by operation of law, or transfer of fifty percent (50%) or more of partnership interests, within a twelve (12)-month period, or the dissolution of the partnership without immediate reconstitution thereof, and (ii) if Tenant is a closely held corporation ( i.e. , whose stock is not publicly held and not traded through a nationally recognized exchange or over the counter), (A) the merger, consolidation or other reorganization of Tenant in which the holders of Tenant’s outstanding voting stock immediately prior to such transaction own, immediately after such transaction, securities representing less than fifty percent (50%) of the voting power of the corporation or other entity surviving such transaction, (B) the sale or other transfer by the Tenant of an aggregate of fifty percent (50%) or more of the voting shares of Tenant in a single transaction or series of transactions, within any twelve (12)-month period (other than in connection with a capital raising transaction involving the sale of capital stock of Tenant to bona fide third-party investors), or (C) the sale, mortgage, exclusive license, hypothecation or pledge of all or substantially all of the value of the unencumbered assets of Tenant in a single transaction or series of transactions within a twelve (12)-month period. Notwithstanding anything to the contrary set forth in this Article 14 to the contrary, in no event shall an offering of stock to (1) third parties by means of a public offering (either an initial public offering or a subsequent public

offering) through a recognized stock market, or (2) in connection with research and development partnerships or collaborative agreements, constitute a “Transfer.”

14.7 Occurrence of Default . Any Transfer hereunder shall be subordinate and subject to the provisions of this Lease, and if this Lease shall be terminated during the term of any Transfer, Landlord shall have the right to: (i) treat such Transfer as canceled and repossess the Subject Space by any lawful means, or (ii) require that such Transferee attorn to and recognize Landlord as its landlord under any such Transfer. If Tenant shall be in default under this Lease, Landlord is hereby irrevocably authorized, as Tenant’s agent and attorney-in-fact, to direct any Transferee to make all payments under or in connection with the Transfer directly to Landlord (which Landlord shall apply towards Tenant’s obligations under this Lease) until such default is cured. Such Transferee shall rely on any representation by Landlord that Tenant is in default hereunder, without any need for confirmation thereof by Tenant. Upon any assignment, the assignee shall assume in writing all obligations and covenants of Tenant thereafter to be performed or observed under this Lease. No collection or acceptance of rent by Landlord from any Transferee shall be deemed a waiver of any provision of this Article 14 or the approval of any Transferee or a release of Tenant from any obligation under this Lease, whether theretofore or thereafter accruing. In no event shall Landlord’s enforcement of any provision of this Lease against any Transferee be deemed a waiver of Landlord’s right to enforce any term of this Lease against Tenant or any other person. If Tenant’s obligations hereunder have been guaranteed, Landlord’s consent to any Transfer shall not be effective unless the guarantor also consents to such Transfer.

14.8 Non-Transfers . Notwithstanding anything to the contrary contained in this Article 14 , to the extent the Original Tenant in not then in default under this Lease (beyond any applicable notice and cure periods) , an assignment or subletting of all or a portion of the Premises to (i) an affiliate of Tenant (an entity which is controlled by, controls or is under common control, as such term is defined in California General Corporations Code (“ CGCC ”) Sections 160 and 5045, with, Tenant), (ii) an entity which merges with or acquires or is acquired by, Tenant or a parent of Tenant, as defined in CGCC Sections 175 and 5064, or a subsidiary, as defined in CGCC Sections 189 and 5073, of Tenant’s parent or Affiliate, or (iii) a transferee of substantially all of the assets of Tenant (collectively, an “ Affiliate ”) along with any other entity which will qualify as an “affiliate” under CGCC 150 and 5031, shall not be deemed a Transfer under this Article 14 , provided that Tenant notifies Landlord of any such assignment or sublease and promptly supplies Landlord with any documents or information reasonably requested by Landlord regarding such assignment or sublease or such Affiliate, and such assignment or sublease is not a subterfuge by Tenant to avoid its obligations under this Lease, or otherwise “releases” the Original Tenant from such obligations.

ARTICLE 15

SURRENDER OF PREMISES; OWNERSHIP AND

REMOVAL OF TRADE FIXTURES

15.1 Surrender of Premises . No act or thing done by Landlord or any agent or employee of Landlord during the Lease Term shall be deemed to constitute an acceptance by Landlord of a surrender of the Premises unless such intent is specifically acknowledged in

writing by Landlord. The delivery of keys to the Premises to Landlord or any agent or employee of Landlord shall not constitute a surrender of the Premises or effect a termination of this Lease, whether or not the keys are thereafter retained by Landlord, and notwithstanding such delivery Tenant shall be entitled to the return of such keys at any reasonable time upon request until this Lease shall have been properly terminated. The voluntary or other surrender of this Lease by Tenant, whether accepted by Landlord or not, or a mutual termination hereof, shall not work a merger, and at the option of Landlord shall operate as an assignment to Landlord of all subleases or subtenancies affecting the Premises or terminate any or all such sublessees or subtenancies.

15.2 Removal of Tenant Property by Tenant . Upon the expiration of the Lease Term, or upon any earlier termination of this Lease, Tenant shall, subject to the provisions of Section 8.5 , this Article 15 and Section 29.33 , quit and surrender possession of the Premises to Landlord in as good order and condition as when Tenant took possession and as thereafter improved by Landlord and/or Tenant, reasonable wear and tear and repairs which are specifically made the responsibility of Landlord hereunder excepted. Upon such expiration or termination, Tenant shall, without expense to Landlord, remove or cause to be removed from the Premises all debris and rubbish, and such items of furniture, equipment, business and trade fixtures, free-standing cabinet work, movable partitions and other articles of personal property owned by Tenant or installed or placed by Tenant at its expense in the Premises, and such similar articles of any other persons claiming under Tenant, as Landlord may, in its sole discretion, require to be removed, and Tenant shall repair at its own expense all damage to the Premises and Building resulting from such removal.

ARTICLE 16

HOLDING OVER

If Tenant holds over after the expiration of the Lease Term or earlier termination thereof, with or without the express or implied consent of Landlord, such tenancy shall be from month-to-month only, and shall not constitute a renewal hereof or an extension for any further term, and in such case Rent shall be payable at a monthly rate equal to the product of (i) the Rent applicable during the last rental period of the Lease Term under this Lease, and (ii) a percentage equal to one hundred fifty percent (150%) during the first two (2) months immediately following the expiration or earlier termination of the Lease Term, and two hundred percent (200%) thereafter. Such month-to-month tenancy shall be subject to every other applicable term, covenant and agreement contained herein. Nothing contained in this Article 16 shall be construed as consent by Landlord to any holding over by Tenant, and Landlord expr