1.5 BASE RENT shall hereafter additionally provide as follows:Lessee agrees to pay Lessor and Lessor agrees to accept $6,180.00 on a Net basis as initialBase Rent for the Expansion Premises, payable in advance on the first day of each month during thefirst year of the Term for the Expansion Premises as set forth in 1.3 above. Adjustments to theBase Rent for the Expansion Premises and the Original Premises shall be as set forth in amendmentsto Addendum Paragraph 50.1 below.1.6 LESSEE’S SHARE OF COMMON AREA OPERATING EXPENSES shall hereafter additionally provide as follows:For the Expanded Premises (i.e., the Original Premises and the Expansion Premises) Lessee’sShare of Operating Expenses shall be equal to twenty-five point zero four percent (25.04%). Suchpro-rata share shall be billed and payable in estimated monthly installments and reconciledannually to actual expenses.1.7c BASE RENT AND OTHER MONIES PAID UPON EXECUTION — SECURITY DEPOSIT shall hereafter additionally provide as follows:Upon execution of this Amendment, Lessee shall pay Lessor the sum of six thousand one hundredeighty and 00/100ths dollars ($6,180.00) as Base Rent for the first month of Term of the ExpansionPremises and nine hundred seventy eight dollars and 50/100th dollars ($978.50) forLessee’s Share of Operating Expenses for the first month of the Term. Lessee shall also depositwith Lessor the sum of six thousand one hundred eighty and 00/100th Dollars ($6,180.00),which in addition to the $24,868.80 already on deposit with Lessor for the Original Premises, shallconstitute the entire Security Deposit for the Expanded Premises. However the Security Deposit forthe Original Premises shall continue to be reduced pursuant to Paragraph 5 of the Lease.50.1 RENT ADJUSTMENTS — FIXED RENTAL ADJUSTMENTS shall hereafter additionally provide as follows:The Base Rent for the Expanded Premises shall be increased to the following amounts on thedates set forth below:     January 1, 2010 — December 31, 2010 $6,437.50 January 1, 2011 — December 31, 2011 $6,695.00 January 1, 2012 — December 31, 2012 $6,952.50 January 1, 2013 — December 31, 2013 $7,210.00 Not withstanding anything contrary in the Lease, the Base Rent for the Original Premises shallbe increased to the following amounts on the dates set forth below:     April 1, 2012 — March 31, 2013 $10,173.60 April 1, 2013 — December 31, 2013 $10,550.40 50.5 TENANT IMPROVEMENTS shall hereafter additionally provide as follows:Lessee hereby accepts the Expansion Premises in their current “as is” condition and agreesthat Lessor shall not be required to provide any improvement work or services related to theimprovement of the Expansion Premises. Lessee shall construct Lessee’s Tenant Improvements, whichshall be deemed Alterations and shall be constructed pursuant to the terms and conditions ofArticle 7.3 of the Lease and in accordance with Expansion Space Plan to be prepared by Tenant,subject to Landlord’s reasonable approval, and thereafter inserted as Exhibit “E” to the Lease.Lessee shall pay all costs and expenses incurred in connection with the design, permitting andconstruction of Lessee’s Tenant Improvements; provided, however, Lessor shall reimburse Lessee forup to $50,000 of the actual cost of constructing Lessee’s Tenant Improvement, which actual cost mayinclude soft and hard costs (“Lessor’s Allowance”), upon receipt of paid invoices for the design,permitting and construction of Lessee’s Tenant Improvements, and mechanic lien releases reasonablyacceptable to Lessor and any other documentation reasonable requested by Lessor. All such Lessee’sTenant Improvement shall be completed to Lessor’s “building standard.”
 
 

 
51. OPTION TO EXTEND TERM shall hereafter additionally provide as follows:Lessee shall have one (1) option to extend the original Term of this Lease for a five-year(5-year) period, with all terms and conditions of the Lease continuing in force and effect duringthe extended term other than the Base Monthly Rent, which shall be adjusted to then current “FairMarket Rental,” provided, however, that the rent payable during the first month of the option andevery month thereafter shall in no event be less than the rent paid during the last month of theinitial Term. (the “Option Rent”). “Fair Market Rental” shall be equal to the rent (includingadditional rent and considering any “base year” or “expense stop” if applicable thereto), includingall escalations, at which, as of the commencement of the option term, tenants are leasingnon-sublease, non-encumbered, non-equity, non-renewal, non-expansion space comparable in size,location and quality to the Premises, for a term of five (5) years, in an arm’s length transaction,which comparable space is located in the Project, or, if there are not at least three (5) currentcomparable transactions in the Project, then in comparable buildings in Irvine, California, ineither case taking into consideration the following concessions: (a) rental abatement concessions,if any, being granted such tenants in connection with such comparable space; (b) tenantimprovements or allowances provided or to be provided for such comparable space, taking intoaccount, and deducting the value of, the existing improvements in the Premises, such value to bebased upon the age, design, quality of finishes and layout of the improvements and the extent towhich the same can be utilized by Lessee based upon the fact that the precise tenant improvementsexisting in the Premises are specifically suitable to Lessee; and (c) other reasonable monetaryconcessions being granted such tenants in connection with such comparable space; provided, however,that in calculating the Option Rent, no consideration shall be given to (i) the fact that Lessor isor is not required to pay a real estate brokerage commission in connection with Lessee’s exerciseof its right to lease the Premises during the Option Term or the fact that Lessors are or are notpaying real estate brokerage commissions in connection with such comparable space, and (ii) anyperiod of rental abatement, if any, granted to tenants in comparable transactions in connectionwith the design, permitting and construction of tenant improvements in such comparable spaces.Lessee shall deliver written notice to Lessor of its intention to exercise such option no less 180days, nor more than 270 days, prior to the expiration of the original Lease term. Upon Lessee’sexercise of the option, Lessor shall deliver notice to Lessee of the Option Rent. If the OptionRent is based on the Fair Market Rental and if Lessor and Lessee disagree on the Fair MarketRental, and Lessor and Lessee fail to reach agreement within ten (10) business days followingLessee’s objection to the Option Rent (the “Outside Agreement Date”), then each party shall make aseparate determination of the Option Rent within five (5) business days after the applicableOutside Agreement Date, and such determinations shall be submitted to arbitration in accordancewith Paragraphs 50.2.1 through 5.2.7 below.50.1.1 Lessor and Lessee shall each appoint one arbitrator who shall be a real estate brokerwho shall have been active over the five (5) year period ending on the date of such appointment inthe leasing of industrial property in Commerce, California. The determination of the arbitratorsshall be limited solely to the issue of whether Lessor’s or Lessee’s submitted Option Rent is theclosest to the actual Option Rent as determined by the arbitrators, taking into account thedefinition of Fair Market Rental above. Each such arbitrator shall be appointed within fifteen(15) days after the applicable Outside Agreement Date.50.1.2 The two (2) arbitrators so appointed shall within ten (10) days of the date of theappointment of the last appointed arbitrator agree upon and appoint a third arbitrator who shall bequalified under the same criteria set forth hereinabove for qualification of the initial two (2)arbitrators.50.1.3 The three (3) arbitrators shall within thirty (30) days of the appointment of the thirdarbitrator reach a decision as to whether the parties shall use Lessor’s or Lessee’s submittedOption Rent, and shall notify Lessor and Lessee thereof.50.1.4 The decision of the majority of the three (3) arbitrators shall be binding upon Lessorand Lessee.50.1.5 If either Lessor or Lessee fails to appoint an arbitrator within fifteen (15) daysafter the applicable Outside Agreement Date, then the arbitrator appointed by one of them shallreach a decision, notify Lessor and Lessee thereof, and such arbitrator’s decision shall be bindingupon Lessor and Lessee.50.1.6 If the two (2) arbitrators fail to agree upon and appoint a third arbitrator, or ifboth parties fail to appoint an arbitrator, then the appointment of the third arbitrator or anyarbitrator shall be dismissed and the matter to be decided shall be forthwith submitted to arbitration under theprovisions of the American Arbitration Association, but subject to the instruction set forth inthis Paragraph 50.2.
 
 

 
50.1.7 The cost of the arbitration shall be paid by Lessor and Lessee equally.EXHIBIT A — PREMISES shall hereafter additionally include the Expansion Premises, as perthe revised Exhibit A to the Lease attached hereto.EXHIBIT D — EXPANSION SPACE PLAN shall be inserted as Exhibit E to the Lease attached hereto.**III.** **INCORPORATION**Except as modified herein, all other terms and conditions of the Lease between the partiesabove described, as attached hereto, shall continue in full force and effect with respect both tothe Original Premises and the Expanded Premises.IN WITNESS WHEREOF, Lessor and Lessee have executed this Amendment to Lease as of the day andyear first above written.   LESSOR: SCIF PORTFOLIO II, LLC,