Common use of Option to Term Clause in Contracts

Option to Term. (a) Landlord hereby grants Tenant an option (the "Extension Option") to extend the term of the Lease for one additional period of five (5) years, commencing immediately after the expiration of the initial term, upon the same terms and conditions contained in the Lease, except that (i) the base monthly rent for the Premises shall be equal to ninety-five percent (95 percent) of the fair market rent for the Premises determined in the manner set forth in subparagraph (b) below, (ii) Tenant shall accept the Premises in an "as is" condition without any obligation of landlord to repaint, remodel, repair, improve or alter the Premises; and (iii) there shall be no further options to extend the term of the Lease. The Extension Option shall be exercised, if at all, by notice from Tenant to Landlord in writing given no less than twelve (12) months prior to expiration for the initial term of the Lease. If Tenant properly exercises the Extension Option, references in the Lease to the term shall be deemed to include the option term unless the context clearly provides otherwise. Notwithstanding anything to the contrary contained herein, if Tenant is in default under any of the material terms, covenants or conditions of the lease, at the time Tenant exercises the Extension Option, Landlord shall have, in addition to all of Landlord's other rights and remedies provided in the Lease, the right to terminate the Extension Option upon notice to Tenant, in which event the expiration date of the Lease shall be and remain the expiration date of the initial term. (b) If Tenant properly exercises the Extension Option, the base monthly rent during the option term shall be determined in the following manner. The base monthly rent shall be increased to an amount equal to ninety-five percent (95 percent) of the fair market rent for the Premises as of the commencement of the option term for a term equal to the option term, as specified by Landlord by notice to Tenant not less than ninety (90) days prior to commencement of the option term, subject to Tenant's right of arbitration as set forth below. If Tenant believes that the fair market rent specified by Landlord exceeds the actual fair market rent for the Premises as of commencement of the option term, then Tenant shall so notify Landlord within thirty (30) days following receipt of Landlord's notice. If Tenant fails to so notify. Landlord within said thirty (30) day period, Landlord's determination of the fair market rent for the premises shall be final and binding upon the parties. If the parties are unable to agree upon the fair market rent for the premises within thirty (30) days after Landlord's receipt of notice of Tenant's objection, the amount of base monthly rent as of commencement of the option term shall be determined as follows: (1) Within thirty (30) days after receipt of the Landlord's notice specifying fair market rent, Tenant, at its sole expense, shall obtain and deliver in writing to Landlord a determination of the fair market basic rent for the Premises for a term equal to the option term from a broker ("Tenant's broker") licensed in the State of California and currently active in the market for research laboratory space in the Berkeley/Emeryville area. If Landlord accepts such determination, the base monthly rent for the option term shall be increased to an amount equal to ninety-five percent (95%) of the amount determined by Tenant's broker. (2) If Landlord does not accept such determination, within ten (10) days after receipt of the determination of Tenant's broker, Landlord shall designate a broker ("Landlord's broker") licensed in the State of California and currently active in the market for research laboratory space in the Berkeley/Emeryville area. Landlord's broker and Tenant's broker shall name a third broker, similarly qualified, within five (5) days after the appointment of Landlord's broker. Each of said three brokers shall determine the fair market rent for the Premises as of the commencement of the option term for a term equal to the option term within twenty (20) days after the appointment of the third broker. The base rent payable by Tenant effective as of the commencement of the option term shall be increased to an amount equal to ninety-five percent of the arithmetic average of such three determinations; provided, however, that if any such broker's determination deviates more than 10% from the median of such determinations, the base monthly rent payable shall be an amount equal to ninety-five percent (95%) of the average of the two closest determinations. (3) Landlord shall pay the costs and fees of Landlord's broker in connection with any determination hereunder, and Tenant shall pay the costs and fees of Tenant's broker in connection with such determination. The costs and fees of any third broker shall be paid one-half by landlord and one-half by Tenant. (c) If the amount of the fair market rent is not known as of the commencement of the option term, then Tenant shall continue to pay the base monthly rent in effect at the expiration of the initial term until the amount of the fair market basic rent is determined. When such determination is made, Tenant shall pay any deficiency to Landlord upon demand.

Option to Term. (a) Landlord hereby grants Tenant an option (the "Extension Option") to extend the term of the Lease for one additional period of five (5) years, commencing immediately after the expiration of the initial term, upon the same terms and conditions contained in the Lease, except that (i) the base monthly rent for the Premises shall be equal to ninety-five percent (95 percent95%) of the fair market rent for the Premises determined in the manner set forth in subparagraph (b) below, (ii) Tenant shall accept the Premises in an "as is" condition without any obligation of landlord to repaint, remodel, repair, improve or alter the Premises; , and (iii) there shall be no further options to extend the term of the Lease. The Extension Option shall be exercised, if at all, by notice from Tenant to Landlord in writing given no less than twelve (12) months prior to expiration for the initial term of the Lease. If Tenant properly exercises the Extension Option, references in the Lease to the term shall be deemed to include the option term unless the context clearly provides otherwise. Notwithstanding anything to the contrary contained herein, if Tenant is in default under any of the material terms, covenants or conditions of the lease, at the time Tenant exercises the Extension Option, Landlord shall have, in addition to all of Landlord's other rights and remedies provided in the Lease, the right to terminate the Extension Option upon notice to Tenant, in which event the expiration date of the Lease shall be and remain the expiration date of the initial term. (b) If Tenant properly exercises the Extension Option, the base monthly rent during the option term shall be determined in the following manner. The base monthly rent shall be increased to an amount equal to ninety-five give percent (95 percent95%) of the fair market rent for the Premises as of the commencement of the option term for a term equal to the option term, as specified by Landlord by notice to Tenant not less than ninety (90) days prior to commencement of the option term, subject to Tenant's right of arbitration as set forth below. If Tenant believes that the fair market rent specified by Landlord exceeds the actual fair market rent for the Premises as of commencement of the option term, then Tenant shall so notify Landlord within thirty (30) days following receipt of Landlord's notice. If Tenant fails to so notify. notify Landlord within said thirty (30) day period, Landlord's determination of the fair market rent for the premises shall be final and binding upon the parties. If the parties are unable to agree upon the fair market rent for the premises within thirty (30) days after Landlord's receipt of notice of Tenant's objection, the amount of base monthly rent as of commencement of the option term shall be determined as follows: (1) Within thirty (30) days after receipt of the Landlord's notice specifying fair market rent, Tenant, at its sole expense, shall obtain and deliver in writing to Landlord a determination of the fair market basic rent for the Premises for a term equal to the option term from a broker ("Tenant's broker") licensed in the State of California and currently active in the market for research laboratory space in the Berkeley/Emeryville area. If Landlord accepts such determination, the base monthly rent for the option term shall be increased to an amount equal to ninety-five percent (95%) of the amount determined by Tenant's broker. (2) If Landlord does not accept such determination, within ten (10) days after receipt of the determination of Tenant's broker, Landlord shall designate a broker ("Landlord's broker") licensed in the State of California and currently active in the market for research laboratory space in the Berkeley/Emeryville area. Landlord's broker and Tenant's broker shall name a third broker, similarly qualified, within five (5) days after the appointment of Landlord's broker. Each of said three brokers shall determine the fair market rent for the Premises as of the commencement of the option term for a term equal to the option term within twenty (20) days after the appointment of the third broker. The base rent payable by Tenant effective as of the commencement of the option term shall be increased to an amount equal to ninety-five percent of the arithmetic average of such three determinations; provided, however, that if any such broker's determination deviates more than 10% from the median of such determinations, the base monthly rent payable shall be an amount equal to ninety-five percent (95%) of the average of the two closest determinations. (3) Landlord shall pay the costs and fees of Landlord's broker in connection with any determination hereunder, and Tenant shall pay the costs and fees of Tenant's broker in connection with such determination. The costs and fees of any third broker shall be paid one-half by landlord and one-half by Tenant. (c) If the amount of the fair market rent is not known as of the commencement of the option term, then Tenant shall continue to pay the base monthly rent in effect at the expiration of the initial term until the amount of the fair market basic rent is determined. When such determination is made, Tenant shall pay any deficiency to Landlord upon demand.