Document:

Ex 10.1 Patent Purcahse Agreement dated Septebmer 30, 2014

    
***Text Omitted and Filed Separately with the Securities and Exchange Commission.
Confidential Treatment Requested Under
17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

PATENT PURCHASE AGREEMENT
THIS PATENT PURCHASE AGREEMENT (this “Agreement”) dated as of September 30, 2014 (the “Effective Date”), is entered into between ISIS INNOVATION LIMITED (Company No. 2199542) (“Isis”), with a place of business at Ewert House, Ewert Place, Oxford OX2 7SG, England, and SEQUENOM, INC., a Delaware corporation (“Sequenom”), with a place of business at 3595 John Hopkins Court, San Diego, California 92121-1331, USA.
WHEREAS, Isis is the owner of all right, title and interest in and to the Assigned Patent Rights (as defined below);
WHEREAS, Isis desires to sell, assign and transfer to Sequenom all right, title and interest in and to the Assigned Patent Rights, subject to the Reserved Rights (as defined below); and
WHEREAS, Sequenom desires to purchase all right, title and interest in and to the Assigned Patent Rights, subject to the Reserved Rights.
NOW, THEREFORE, in consideration of the representations, covenants and other terms and conditions contained herein, the parties hereto agree as follows:
1.Definitions.  For the purposes of this Agreement, the following terms shall have the respective meanings set forth below and grammatical variations of such terms shall have corresponding meanings:
1.“Additional Payments” shall mean, collectively, any of the First Additional Payment, Second Additional Payment and Third Additional Payment (each as specified and referred to in clause 3.6.2) as are due in accordance with the terms of clause 3.6.2.
2.“Affiliate” shall mean, with respect to any Person, any other Person which directly or indirectly controls, is controlled by, or is under common control with, such Person.  A Person shall be regarded as in control of another Person if it owns, or directly or indirectly controls, more than fifty percent (50%) of the voting stock or other ownership interest of the other Person, or if it directly or indirectly possesses the power to direct or cause the direction of the management and policies of the other Person by any means whatsoever. For the avoidance of doubt, Oxford University is an Affiliate of Isis.
3.“Assigned Patent Rights” shall mean, collectively: (a) the patents and patent application(s) listed on Exhibit A; (b) all divisionals, continuations, continuations-in-part, substitutes and provisional applications of any of the foregoing described patent applications; (c) all patents that have issued 

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or in the future issue from any of the foregoing described patent applications, including utility, model and design patents and certificates of invention; and (d) all extensions, supplemental protection certificates, registrations, confirmations, reissues, reexaminations, inter partes reviews, post-grant reviews, restorations and renewals of or to any of the foregoing described patents.
4.“Contract” shall mean any indenture, lease, contract, covenant, arrangement, agreement, instrument, commitment, purchase order or license.
5.“Documents” shall have the meaning set forth in the Isis/Sequenom Licence Agreement.
6.“Encumbrance” shall mean any encumbrance, lien, charge, hypothecation, pledge, mortgage, adverse claim, option, preemptive right, or other security interest of any nature, or any Contract to create any of the foregoing entered into by Isis on or before the Effective Date.
7.“Europe” shall mean, collectively, Austria, Belgium, Denmark, Finland, France, Germany, Great Britain, Greece, Ireland, Italy, Luxembourg, Monaco, the Netherlands, Portugal, Spain, Sweden and Switzerland.
8.“Field” shall mean all fields and uses except: (a) Rhesus D blood typing using real time PCR in Europe; and (b) the supply of products or services using the Licensed Technology and/or the Assigned Patent Rights for the purpose of gender determination for social or lifestyle purposes in Hong Kong.
9.“Isis Improvements” shall have the meaning set forth in the definition of Licensor’s Improvements in the Isis/Sequenom License Agreement.
10.“Isis/Sequenom License Agreement” shall mean the Exclusive License of Technology Agreement, dated October 14, 2005, between Isis and Sequenom (as amended by (i) an amendment agreement dated 19 October 2006; (ii) a second amendment agreement dated 05 November 2007; (iii) a third amendment agreement dated 03 November 2009; (iv) a fourth amendment agreement dated 29 November 2012; and (v) the Letter Amendment).
11.“Know-how” shall have the meaning set forth in the Isis/Sequenom License Agreement.
12.“Letter Amendment” means the letter amendment between the parties dated 26 October 2012.
13.“Licensed Product A” shall mean any product, service or composition covered by a Valid Patent Claim on a country-by-country basis.
14.“Licensed Product B” shall mean any product, service or composition in the field of NIPT, including (without limitation) MaterniT21 PLUS, VisibiliT, and SensiGene Fetal RHD Genotyping, for as long as there exists a Valid Patent Claim (regardless of whether the product, service or composition is covered by a Valid Patent Claim) on a country-by-country basis. 
15.“Licensed Product” shall mean collectively Licensed Product A and Licensed Product B.

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16.“Licensed Technology” shall mean all of Isis’s intellectual property rights in: (a) the Know-how; (b) the Documents; and (c) Isis Improvements.
17.“Market” shall mean offering to sell, lease, license or otherwise commercially exploit the Licensed Product or the sale, lease, licence or other commercial exploitation of the Licensed Product.
18.“Net Revenue” shall mean the sum of: 
1.the gross sales price of (x) Licensed Product in the form Marketed by Sequenom or its Affiliates after 1 July 2014; and (y) Licensed Product A in the form Marketed by licensees or sub-licensees (including through multiple tiers) and/or  marketing partners of Sequenom, its Affiliates or their respective licensees or sub-licensees (including through multiple tiers) after 1 July 2014 under any agreement between them where Marketing by such persons is subject to a Selling Price Revenue Structure (whether such agreement exists or was agreed on, before or after 01 July 2014), in each case to end user customers less (i) cash, quantity and trade discounts, rebates and other price reductions (including retroactive price reductions) actually given to end user customers under price reduction programs, (ii) sales, use, value-added and other taxes paid in respect of sales (excluding personal and corporate income taxes), and (iii) an allowance for contractual adjustments and for uncollectible or bad debts determined in accordance with generally accepted accounting principles; and
2.any up-front, milestone or other cash consideration (or cash equivalent of non-cash consideration) (but excluding any consideration described in clause 1.18.1) received by Sequenom or its Affiliates specifically in consideration for any license or sub-license or other contract granted to a Third Party to Market a Licensed Product and/or otherwise use the Assigned Patent Rights and/or the Licensed Technology,
in each case, excluding amounts received to reimburse Sequenom’s or its Affiliates’ cost to perform research, development or similar services connected with technology transfer or technical assistance in connection with the Licensed Product.  In respect of Licensed Product which is a product, service or composition covered by a Valid Patent Claim on a country-by-country basis, for purposes of calculating Net Revenue, if a claim in a granted or issued patent within any of the Assigned Patent Rights (except [...***...] ***Confidential Treatment Requested) is invalidated in a decision rendered by a court or administrative body of competent jurisdiction, such claim shall not be a Valid Patent Claim from and as of the date of the first determination of invalidity by a court or administrative body of competent jurisdiction, unless and until overturned on appeal, if any appeal is taken provided that if, in such circumstances, an appellate court subsequently overturns that invalidity decision, such claim shall be retrospectively treated as a Valid Patent Claim with effect from the date of the initial ruling of invalidity such that all sales of such Licensed Product during the period between the date of the initial ruling of invalidity and the successful appeal shall be included in the calculation of Net Revenues under this Agreement.

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19.“NIPT” means in vitro cell-free nucleic acid-based non-invasive prenatal diagnostic of a biological sample (including, but not limited to, plasma, serum, whole blood, and urine) obtained from a pregnant woman.
20.“Non-Commercial Use” shall mean academic and research purposes and the purposes of non-commercial clinical patient care, including the right for Oxford University to use the Licensed Technology, Assigned Patent Rights and Sequenom’s Improvements as enabling technology in other research projects.
21.“Oxford University” shall mean the Chancellor, Masters and Scholars of the University of Oxford whose administrative offices are at the University Offices, Wellington Square, Oxford OX1 2JD.
22.“Person” shall mean any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity, as well as any syndicate or group of any of the foregoing.
23.“Pre-Existing License” shall mean the license granted by Isis prior to the Effective Date to a Third Party licensee in connection with use of the Licensed Technology and Assigned Patent Rights outside the Field.
24.“Proceedings” shall mean those proceedings set out in Exhibit B hereto.
25.“Reserved Rights” shall mean the rights reserved under Exhibit C of this Agreement.
26.“Selling Price Revenue Structure” shall mean a structure under which Sequenom’s or its Affiliates’ remuneration under an agreement with a Third Party is based on a percentage or other derivation of the price at which that Third Party Markets a Licensed Product to end user customers.
27.“Sequenom’s Improvements” shall have the meaning set forth in the definition of Licensee’s Improvements in the Isis/Sequenom License Agreement.
28.“Taxes” shall mean any federal, state, local, municipal or other governmental taxes, duties, levies, fees, excises or tariffs.
29.“Territory” shall mean, collectively, the United States of America, Canada, Japan, Australia, Hong Kong and Europe.
30.“Third Party” shall mean any Person other than Sequenom, Isis or their respective Affiliates.
31.“Valid Patent Claim” shall mean a claim in a granted or issued patent within the Assigned Patent Rights that has not been invalidated in a final decision rendered by a court or administrative body of competent jurisdiction and from which no further appeal may be taken.
Any words following the terms “including”, “include”, “in particular”, “for example” or any similar expression shall be construed as illustrative and shall not limit the sense of the words, description, definition, phrase or term preceding those terms.
2.Representations and Warranties.
1.By Each Party.  Each party represents and warrants to the other party as follows:

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1.Organization.  Such party is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized.
2.Authorization and Enforcement of Obligations.  Such party (a) has the requisite power and authority and the legal right to enter into this Agreement and to perform its obligations hereunder; and (b) has taken all requisite action on its part to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder.  This Agreement has been duly executed and delivered on behalf of such party, and constitutes a legal, valid, binding obligation, enforceable against such party in accordance with its terms.
3.Consents.  All necessary consents, approvals and authorizations of all governmental authorities and other persons or entities required to be obtained by such party in connection with this Agreement have been obtained.
4.No Conflict.  The execution and delivery of this Agreement and the performance of such party’s obligations hereunder (a) do not conflict with or violate any requirement of applicable laws, regulations or orders of governmental bodies; and (b) do not conflict with, or constitute a default under, any contractual obligation of such party.
2.Regarding Assigned Patent Rights.  Isis further represents and warrants to Sequenom that as at the Effective Date, as far as Isis is aware (without having made any further or special enquiries):
1.Assigned Patent Rights.  All Assigned Patent Rights as of the Effective Date are listed on Exhibit A.
2.Title.  Isis is the sole owner of all right, title and interest in and to the Assigned Patent Rights.  Isis has the unrestricted right to sell, assign and transfer all right, title and interest in the Assigned Patent Rights to Sequenom free and clear of any Encumbrances (other than the Pre-Existing License and the Reserved Rights).  Except for the Pre-Existing License, Isis has not transferred ownership of, or granted any license of or right to use, or authorized the retention of any rights to use, to any Person any Assigned Patent Rights.  After giving effect to the sale, assignment and transfer of the Assigned Patent Rights, except for the Pre-Existing License and Reserved Rights, all Assigned Patent Rights shall be fully transferable, alienable or licensable by Sequenom without restriction and without payment of any kind to any Third Party.  [...***...] ***Confidential Treatment Requested    [...***...] ***Confidential Treatment Requested
3.No Challenge.  To the extent that any Assigned Patent Rights were originally owned or created by or for any Person other than Isis, (a) Isis has obtained or shall procure the complete, unencumbered and unrestricted right to effect the transfer of the Assigned Patent Rights (excluding the Pre-Existing License and Reserved Rights) from Isis to Sequenom; and (b) subject to the Pre-Existing License and Reserved Rights, no Third Parties have retained or otherwise have any rights or licenses with respect to the Assigned Patent Rights; and (c) no valid basis exists for any such Person to challenge or contest this Agreement or the transactions contemplated herein.

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4.Validity and Enforceability.  Except for the Proceedings, (a) none of the patents within the Assigned Patent Rights has been held invalid or unenforceable for any reason in any administrative, arbitral, judicial or other proceeding; and (b) Isis has not received any written challenge or opposition to any patent within the Assigned Patent Rights suggesting that any patent within the Assigned Patent Rights may be invalid, unenforceable or misused or that a claim to such effect may be brought by any Person.
5.Maintenance.  All necessary registration, maintenance and renewal fees in connection with the Assigned Patent Rights have been paid and all necessary documents and certificates in connection with the Assigned Patent Rights have been filed.
6.No Infringement.  Except for the Proceedings, Isis has not issued written proceedings in respect of any infringement or misappropriation by a Third Party of the Assigned Patent Rights.
7.No Conflict.  Except for the Proceedings, the Assigned Patent Rights are not subject to any decree, order, judgment, office action or settlement agreement or stipulation that restricts in any manner the use, transfer or licensing thereof by Isis or that may affect the validity, use or enforceability of any patents that may issue from the Assigned Patent Rights.
8.No Other Warranty. Except as otherwise provided herein, to the fullest extent permissible by law, Isis does not make warranties of any kind including, without limitation, warranties with respect to:
(a)the quality of the Licensed Technology or Assigned Patent Rights;
(b)the suitability of the Licensed Technology or Assigned Patent Rights for any particular use; and
(c)whether any applications which may be comprised in the Assigned Patent Rights will be granted.
3.Purchase and Sale of the Assigned Patent Rights.
1.Assigned Patent Rights.  Subject to the terms and conditions of this Agreement and the Reserved Rights, effective as of the Effective Date, Isis hereby agrees to, and hereby does, sell, assign and transfer to Sequenom, and Sequenom hereby agrees to, and hereby does, purchase from Isis, all right, title and interest in and to the Assigned Patent Rights in the Territory, including, without limitation (but subject always to the Reserved Rights), all rights to causes of action and remedies related thereto, including, without limitation, all rights (a) to initiate, prosecute, control and settle any and all proceedings (including, without limitation, the Proceedings) related to past, present or future infringement, misappropriation or violation of the Assigned Patent Rights, (b) to retain all recoveries from any and all such proceedings, and (c) to prosecute, maintain and defend the Assigned Patent Rights (including to respond to and defend any and all interferences, oppositions, reexaminations, inter partes reviews, post grant reviews, and other challenges of any type or nature whatsoever).

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2.License to Sequenom.
1.Subject to the terms and conditions of this Agreement and the Reserved Rights, Isis hereby grants to Sequenom an irrevocable, perpetual, fully-paid, royalty-free, exclusive licence (with the right to grant sublicences through multiple tiers) under the Licensed Technology in the Territory for use in the Field. Sequenom acknowledges and agrees that, as between the parties, Isis is and will remain the owner of the Licensed Technology.
2.This Agreement shall not prevent or hinder Oxford University and every employee, student and appointee of Oxford University from using and (subject to clause 6.5) publishing the Licensed Technology solely for Non-Commercial Use.
3.Reserved Rights and Pre-Existing License.
1.Sequenom acknowledges that prior to the transfer of the Assigned Patent Rights pursuant to this Agreement, Isis has granted the Pre-Existing License. Accordingly, Isis and Sequenom expressly agree and acknowledge that the assignment and transfer of the Assigned Patent Rights pursuant to this Agreement is subject to the Reserved Rights.
4.License to Isis.  Sequenom further grants Isis the right to grant a non-transferable, perpetual, royalty-free sublicense to Oxford University and every employee, student and appointee of Oxford University to use Sequenom’s Improvements solely for Non-Commercial Use.  The sublicense granted pursuant to this clause 3.4 shall survive termination of this Agreement.  Isis shall remain solely and fully responsible for acts or omissions by Oxford University or any employee, student and appointee thereof in connection with their sublicense rights granted pursuant to this clause 3.4.
5.Transfer Documents.
1.File History.  Isis shall provide Sequenom with the prosecution files (including original applications, office actions, responses to office actions and correspondence relating to the Assigned Patent Rights) related to the Assigned Patent Rights which are in its possession at the Effective Date.
2.Further Assistance.  Promptly following the Effective Date and in any event within no more than six (6) weeks after it, Isis shall duly execute and deliver to Sequenom all such patent assignments in the form agreed between the parties (collectively, the “Patent Assignments”) evidencing the sale, conveyance, transfer and assignment of the Assigned Patent Rights from Isis to Sequenom in accordance with this Agreement.  Thereafter, at such time as reasonably requested by Sequenom, Isis shall (at Sequenom’s cost) provide all cooperation reasonably requested by Sequenom in connection with any effort by Sequenom which is reasonably required in order to evidence or register the assignment of the Assigned Patent Rights.  Without limiting the generality of anything set forth in this Agreement, such cooperation shall include, without limitation, executing confirmatory assignments, transfers and consents. 
6.Financial Terms.
1.Initial Payment.  Immediately upon the Effective Date, Sequenom hereby waives the Two Million One Hundred Thousand U.S.     Dollars (US$2,100,000) in paid legal fees that Isis owes Sequenom.  Within ten (10) days after the Effective Date, Sequenom shall pay to Isis the amount 

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(the “Initial Payment”) of Twelve Million Four Hundred and Fifty Thousand U.S. Dollars (US$12,450,000) (which equals the sum of the Nine Million Two Hundred and Fifty Thousand U.S. Dollar (US$9,250,000) up-front payment, plus Three Million Two Hundred Thousand U.S. Dollars (US$3,200,000) as the final royalty payment under the Isis/Sequenom License Agreement), by wire transfer of immediately available funds as directed in advance in writing by Isis.
2.Additional Payments.  If Net Revenues:
(a)exceed [...***...] ***Confidential Treatment Requested but are less than [...***...], then Sequenom additionally shall pay to Isis an amount equal to [...***...] percent ([...***...]%) of Net Revenues accrued under clause 1.18.1 and [...***...] percent ([...***...]%) of Net Revenues accrued under clause 1.18.2 between [...***...] and [...***...] (the “First Additional Payment”);
(b)equal or exceed [...***...] but are less than [...***...], then Sequenom additionally shall pay to Isis an amount equal to [...***...] percent ([...***...]%) of Net Revenues accrued under clause 1.18.1 and [...***...] percent ([...***...]%) of Net Revenues accrued under clause 1.18.2 between [...***...] and [...***...] (the “Second Additional Payment”); and
(c)equal or exceed [...***...], then Sequenom additionally shall pay to Isis an amount equal to [...***...] percent ([...***...]%) of Net Revenues accrued under clause 1.18.1 and [...***...] percent ([...***...]%) of Net Revenues accrued under clause 1.18.2 in excess of [...***...] (the “Third Additional Payment”).  
3.Net Revenue Calculation.  Net Revenues shall be calculated on a cumulative basis with effect from and including 1 July 2014 until the expiration of the last to expire of the Assigned Patent Rights.  Additionally, Net Revenues shall also include any damages (including, without limitation, punitive damages) and/or any other monetary amount awarded to Sequenom, and/or any other payment made to Sequenom in settlement, at any time in relation to or as a result of any enforcement or infringement action taken by Sequenom in relation to the Assigned Patent Rights, including in connection with the Proceedings, provided that Sequenom shall be entitled to deduct therefrom all costs and expenses (including legal costs) incurred in defending or enforcing the Assigned Patent Rights or in the enforcement or infringement action which leads to such award of damages, other monetary award and/or settlement payment (but excluding any such costs incurred prior to 01 July 2014 and any costs recovered from other parties to the Proceedings). 
4.Quarterly Report.  (i) Within [...***...] ***Confidential Treatment Requested days after the end of each calendar year up to and including the calendar year in which Net Revenues first exceed [...***...], and (ii) within [...***...] days after the end of the calendar quarter ending after the date on which Net Revenues first exceed [...***...] until the expiration of the last to expire of the Assigned Patent Rights, and (iii) within [...***...] days after the receipt by Sequenom or its Affiliates of any monetary amount referred to in clause 3.6.3 after the expiration of the last to expire of the Assigned Patent Rights, Sequenom (a) shall prepare and provide Isis with a written report showing in reasonably specific detail the calculation of Net Revenues and the Additional Payments, if any, owing for such calendar quarter or other period as applicable 

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(including, without limitation, a breakdown of the Net Revenues referred to in clause 1.18.1, those referred to in clause 1.18.2 and those referred to in clause 3.6.3), and (b) shall pay to Isis the Additional Payments, if any, owing for such calendar quarter or other period as applicable.  With respect to amounts invoiced or received in a currency other than United States dollars, all such amounts shall be expressed both in the currency in which the amount is invoiced or received and the United States dollar equivalent.
5.Audit Right. Sequenom must keep complete and accurate accounts of all Licensed Product Marketed by Sequenom and revenues it receives from licensees, sub-licensees or marketing partners) in each year for at least [...***...] years.  Isis may, through an independent certified accountant, audit all such accounts on at least [...***...] days written notice no more than once each year for the purpose of determining accrued Net Revenues, the accuracy of the written reports in clause 3.6.4 and the payments made pursuant to that clause.  Such independent certified accountant shall be reasonably acceptable to Sequenom and shall be subject to obligations of confidentiality at least as restrictive as those set forth herein. The cost of conducting such audit shall be borne by Isis unless such audit identifies a discrepancy in the calculation of Net Revenues and/or the Additional Payments of [...***...] per cent ([...***...]%) or more, in which case Sequenom shall promptly reimburse Isis for the costs of conducting such audit. In the event that any discrepancy is identified, Sequenom shall pay Isis any sums owed to it pursuant to clause 3.6.3 as a result of the corrected calculation within thirty (30) days of the date on which Sequenom is notified of such discrepancy. 
6.Withholding Taxes.  
(a)All sums payable under this Agreement by Sequenom shall be made free and clear of all withholding and deductions save as may be required by law in which event the amount payable by Sequenom shall be increased to the extent necessary to ensure that, after the making of any deduction or withholding, Isis receives a sum equal to the sum it would have received had no deduction or withholding been made.
(b)If, as a result of an assignment of this Agreement by Sequenom pursuant to clause 8.4 or a change in the tax residence of Sequenom, a withholding or deduction is required in respect of any of the Additional Payments which would not otherwise have arisen, the obligation to pay an additional amount referred to in clause 3.6.6(a) shall be limited to any increase in the obligation to withhold which arises solely as a result of such assignment or change in tax residence.
(c)Where Sequenom has made a payment to Isis in accordance with clause 3.6.6(a) and Isis (or any of its Affiliates) is or becomes entitled to receive a repayment, refund, credit or relief in respect of such withholding or deduction, Isis shall (at Sequenom’s cost) use reasonable efforts to recover such repayment refund, credit or relief and shall on the receipt of such payment or on the utilization of credit or relief, pay Sequenom an amount equal to the amount received or an amount equal to the tax saved as a result of the utilization of the credit or relief. 
7.VAT. In the event that the Initial Payment and/or the Additional Payment is or becomes subject to value added, sales, use, excise or other similar taxes or duties (“Turnover Tax”), Isis 

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shall as soon as reasonably practicable notify Sequenom of the requirement to pay such Turnover Tax and, upon the delivery by Isis of a value added tax invoice (or any other relevant document in respect of such Turnover Tax), Sequenom shall promptly pay to Isis the Turnover Tax due and payable. 
4.Preservation of Privileges.  As of the Effective Date, Sequenom shall control all attorney-client privileges, attorney work product doctrine and any other professional privileges or rights held by Isis that arose from the prosecution, defense or enforcement of the patents and patent applications within the Assigned Patent Rights before the Effective Date (collectively, the “Protected Communications”).  Isis shall not assert that the Protected Communications are not, as against any Third Party, protected by the attorney-client privilege, attorney work product doctrine or other professional privileges unless and only to the extent that such privilege or immunity is withdrawn by Sequenom or is determined by a final judgment of a court of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, to be invalid.  Isis shall (at Sequenom’s cost) follow Sequenom’s direction with respect to Protected Communications and otherwise cooperate with Sequenom to preserve and protect all privileges and immunities with respect to Protected Communications to the greatest extent available under applicable law.  To the extent that Isis retains control of any privilege or immunity with respect to communications or work product relating to the prosecution, defense or enforcement of the patents and patent applications before the Effective Date, Isis shall not waive or withdraw such privilege or immunity or engage in any act or omission that might result in a waiver or withdrawal without the prior written consent of Sequenom.  Should any effort be made by subpoena or otherwise to gain access to Protected Communications, whether by judicial action or by other means, Isis shall promptly notify Sequenom of the same.
5.Indemnification and Liability.
1.Indemnification of Sequenom.  Subject to the provisions of this Section 5, Isis shall indemnify, defend and hold harmless Sequenom, its Affiliates and its and their respective officers, directors and employees (collectively, the “Sequenom Indemnitees”), from and against any and all damage, loss, liability and expense (including without limitation reasonable expenses of investigation and reasonable attorneys’ fees and expenses in connection with any action, suit or proceeding or settlement of any of the foregoing) (collectively, “Losses”) incurred or suffered by a Sequenom Indemnitee arising out of:
1.Any breach of the representations and warranties of Isis set forth in this Agreement;
2.Any breach of any covenant or agreement of Isis set forth in this Agreement or in any certificate, instrument, or other document delivered pursuant to this Agreement.
2.Indemnification of Isis.  Subject to the provisions of this Section 5, Sequenom shall indemnify, defend and hold harmless Isis, its Affiliates and its and their respective officers, directors, academics, students, appointees, agents and employees (collectively, the “Isis Indemnitees”), from and against any and all Losses incurred or suffered by a Isis Indemnitee arising out of:
1.Any breach of the representations and warranties of Sequenom set forth in this Agreement;

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2.Any breach of any covenant or agreement of Sequenom set forth in this Agreement or in any certificate, instrument, or other document delivered pursuant to this Agreement;
3.The ownership or exploitation of the Assigned Patent Rights and/or Licensed Technology after the Effective Date; and
4.Any assertion by Third Parties (including claims for negligence) which arise directly or indirectly from the use of the Licensed Technology and/or Assigned Patent Rights or the Marketing of the Licensed Product by Sequenom and/or its licensees or sub-licensees whether such assertions arise in relation to such use or Marketing before, on or after the Effective Date.
3.Procedure.  If a party (an “Indemnitee”) intends to claim indemnification under this Section 5, it shall promptly notify the other party (the “Indemnitor”) in writing of any claim, demand, action or other proceeding for which the Indemnitee intends to claim such indemnification, and the Indemnitor shall have the right to participate in, and, to the extent the Indemnitor so desires, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an Indemnitee shall have the right to retain its own counsel, with the fees and expenses to be paid by Indemnitor, if representation of such Indemnitee by the counsel retained by the Indemnitor would be inappropriate due to actual or potential differing interests between such Indemnitee and any other party represented by such counsel in such proceeding.  The obligations of this Section 5 shall not apply to amounts paid in settlement of any claim, demand, action or other proceeding if such settlement is effected without the consent of the Indemnitor, which consent shall not be unreasonably withheld or delayed.  The Indemnitee shall:
1.reasonably cooperate with the Indemnitor and its legal representatives in the investigation of any claim, demand, action or other proceeding covered by this Section 5; and
2.not settle or compromise or make any admission in relation to any such claim without the Indemnitor’s prior written consent (such consent not to be unreasonably withheld or delayed).
4.Claims against employee, student, agent or appointee of Isis or Oxford University. Sequenom undertakes to make no claim against any employee, student, agent, or appointee of Isis or Oxford University, being a claim which seeks to enforce against any of them any liability whatsoever in connection with this Agreement or its subject matter.
5.Limitation of Liability
1.Subject to clause 5.5.2, neither party shall be liable for, whether under contract, negligence, tort, statute or otherwise, for any special, indirect or consequential loss.
2.Nothing in this Agreement shall limit or exclude liability of the parties for death or personal injury due to negligence, for fraud or willful misconduct.
3.The maximum total liability of Isis to Sequenom under or otherwise in connection with this Agreement or its subject-matter will not exceed [...***...] ***Confidential Treatment Requested.

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6.Confidentiality and Publication.
1.Confidential Information.  For a period of five (5) years from the Effective Date, except as otherwise provided in this Section 6, the parties shall maintain in confidence all non-public data and information related to the Assigned Patent Rights and/or the business of the other party or its Affiliates which is in its possession as at the Effective Date (the “Confidential Information”), and shall not use, disclose or grant the use of the Confidential Information except on a need-to-know basis to those directors, officers and employees, to the extent such disclosure is reasonably necessary in connection with performing its obligations or exercising its rights under this Agreement.  To the extent that disclosure is authorized by this Agreement, prior to disclosure, the party wishing to disclose Confidential Information shall obtain agreement of any such receiving Person to hold in confidence and not make use of the Confidential Information for any purpose other than those permitted by this Agreement.  Each party shall notify the other promptly upon discovery of any unauthorized use or disclosure of the other party’s Confidential Information.
2.Terms of this Agreement.  Neither party shall disclose any terms or conditions of this Agreement to any Third Party without the prior consent of the other party; provided, however, that a party may disclose the terms or conditions of this Agreement, (a) on a need-to-know basis to its legal and financial advisors to the extent such disclosure is reasonably necessary, and (b) to a Third Party in connection with (i) an equity investment in such party, (ii) a merger, consolidation or similar transaction by such party, or (iii) the sale of all or substantially all of the assets of such party.  Notwithstanding the foregoing, prior to execution of this Agreement, the parties have agreed upon the substance of information that can be used to describe the terms and conditions of this transaction, and each party may disclose such information, as modified by mutual written agreement of the parties, without the consent of the other party.
3.Permitted Disclosures.  The confidentiality obligations under this Section 6 shall not apply to the extent that:
1.a party is required to disclose information by applicable law, regulation, court or administrative order or rules of a stock exchange or automated quotation system (in each case as determined by such party’s legal counsel); provided, however, that such party shall provide advanced written notice thereof to the other party, consult with the other party with respect to such disclosure and provide the other party sufficient opportunity to object to any such disclosure or to request confidential treatment thereof (if applicable);
2.the Confidential Information  is or becomes generally available to the public (other than as a result of its disclosure by the receiving party or any Person in breach of this clause 6);
3.the Confidential Information was, is or becomes, available to Isis on a non-confidential basis from a person who, to Isis’s knowledge, is not bound by a confidentiality agreement with Sequenom or otherwise prohibited from disclosing the information to Isis.
4.Injunctive Relief.  Each party acknowledges that it may be impossible to measure in money the damage to the other party if such party fails to comply with the obligations imposed by this Section 6, and that, in the event of any such failure, the other party may not have an adequate remedy at 

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law or in damages.  Accordingly, each party agrees that injunctive relief or other equitable remedy, in addition to remedies at law or damages, may be an appropriate remedy for any such failure.
5.Publication. Isis will request Oxford University to give to Sequenom in advance a written outline of any materials related to the Assigned Patent Rights, Licensed Technology or relating to the results of the use of the Assigned Patent Rights, Licensed Technology or Sequenom’s Improvements intended for publication.  Sequenom may request that publication be delayed:
(a)for a period of no longer than three (3) months from the date of notification in respect of the Assigned Patent Rights or Licensed Technology if such delay is necessary in order to protect the Assigned Patent Rights or Licensed Technology; or
(b)for any reasonable period that may be longer than three months given the circumstances in respect of the results of the use of any of Sequenom’s Improvements if such delay is necessary in order to protect Sequenom’s Improvement.
If no request for delay is received within 30 days of the date of the written notification, Oxford University will be free to assume that Sequenom has no objection to the proposed publication.
6.Thesis. This Agreement shall not prevent or hinder registered students of Oxford University from submitting for degrees of Oxford University theses based on the Licensed Technology or Assigned Patent Rights; or from following Oxford University’s procedures for examinations and for admission to postgraduate degree status.
7.Without Prejudice. This Agreement, although marked “without prejudice”, will upon signature by all parties be treated as an open (although confidential) document evidencing an agreement binding upon the parties.
7.Termination of Isis/Sequenom License Agreement.
1.Termination.  Effective as of the Effective Date, all license rights of Sequenom in and to the Assigned Patent Rights in the Territory under the Isis/Sequenom License Agreement shall have merged with and into all right, title and interest in and to the Assigned Patent Rights in the Territory sold, assigned and transferred to Sequenom hereunder.  Therefore, effective as of the Effective Date, the parties hereby terminate the Isis/Sequenom License Agreement fully and in its entirety by mutual agreement.
2.Release.  From the Effective Date, the parties hereby release each other from all their contractual and other obligations arising out of or in connection with the Isis/Sequenom License Agreement.  The parties hereby agree to waive, surrender and not seek to enforce any and all claims, allegations, causes or rights of action (whether in contract, tort, statutory duty or otherwise), whether or not known at the date of this Agreement, that they may have against the other (or Oxford University) arising out of or in connection with the termination of the Isis/Sequenom License Agreement or which (save as provided in clause 5.2.4) may have otherwise accrued prior to the Effective Date in connection with the Isis/Sequenom License Agreement (including, without limitation, in respect of any costs payable in connection with the 

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Proceedings).  For the avoidance of doubt, Sequenom shall have exclusive liability and responsibility for any costs incurred in connection with the Proceedings on and from 01 July 2014.
8.Miscellaneous.
1.Press release. The parties may make a public announcement regarding the execution of this Agreement in the form of a mutually agreed press release. Sequenom may also make further announcements to the extent required by applicable law, regulation or judicial order or process, or for compliance with the requirements of the U.S. Securities and Exchange Commission or any securities exchange. For the avoidance of doubt, no other form of announcement by either party in respect of this Agreement is permitted.
2.Governing Law; Exclusive Jurisdiction.  This Agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England and Wales, without regard to the conflicts of law principles thereof. Each of the parties hereto irrevocably consents to the exclusive jurisdiction and venue of the courts of England and Wales, in connection with any dispute or claim arising out of or in connection with this Agreement or its subject matter or formation (including non-contractual disputes or claims) and waives and covenants not to assert or plead any objection which they might otherwise have to such jurisdiction, venue and such process.
3.Waiver.  No waiver by a party hereto of any breach or default of any of the covenants or agreements herein set forth shall be deemed a waiver as to any subsequent and/or similar breach or default.
4.Assignment.  Neither this Agreement nor any right or obligation hereunder may be assigned or delegated, in whole or part, by either party without the prior express written consent of the other.  Any permitted assignee shall assume all obligations of its assignor under this Agreement.  Notwithstanding the foregoing, either party may, without the written consent of the other, assign this Agreement and its rights and delegate its obligations hereunder in connection with the transfer or sale of all or substantially all of its business, or in the event of its merger, consolidation, change in control or similar transaction in each case to effect an acquisition of the business, provided that: (i) any such assignee is of equivalent or better Financial Standing than the assigning party at the time of the assignment; and (ii) such permitted assignee enters into a direct undertaking with the remaining party to perform all the obligations of the assigning party under this Agreement.  Any purported assignment in violation of this clause 8.4 shall be void.  For the purposes of this clause 8.4, “Financial Standing” means the total assets, liabilities and equity held by the assignee.
5.Notices.  All requests and notices required or permitted to be given to the parties hereto shall be given in writing, shall expressly reference the section(s) of this Agreement to which they pertain, and shall be delivered to the other party, effective on receipt, at the appropriate address as set forth below or to such other addresses as may be designated in writing by the parties from time to time during the term of this Agreement.

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If to Isis:        Isis Innovation Limited
Ewert House, Ewert Place
Oxford OX2 7SG
England
Attention:  Managing Director

If to Sequenom:    Sequenom, Inc.
3595 John Hopkins Court
San Diego, California 92121-1331
USA
Attention:  Chief Executive Officer

6.Variation.  Any variation of this Agreement must be in writing and signed by authorized signatories for both parties. For the avoidance of doubt, the parties to this Agreement may rescind or vary this Agreement without consent of any party that has the benefit of clauses 3.2.2, 3.4, 5.4, 6.6 and paragraph 1(b) of Exhibit C.
7.Rights of Third Parties.  Nothing in this Agreement shall be deemed to grant any rights or benefits to any person other than the parties, their respective successors in title or assignees (a “Third Party”), or entitle any Third Party to enforce any provision hereof and the parties do not intend that any term of this Agreement should be enforceable by a Third Party by virtue of the Contracts (Rights of Third Parties) Act 1999.  Notwithstanding the foregoing, the parties intend that Oxford University and the people referred to in clauses 3.2.2, 3.4, 5.4, 6.6 and paragraph 1(b) of Exhibit C will be able to enforce the terms of those provisions as if they were a party to this Agreement by virtue of the Contracts (Rights of Third Parties) Act 1999.
8.Complete Agreement.  This Agreement constitutes the entire agreement between the parties regarding the subject matter hereof, and, in the absence of fraud, all prior representations, understandings and agreements regarding the subject matter hereof, either written or oral, expressed or implied, are superseded and shall be and of no effect.  This clause 8.8 does not exclude liability of either party for fraudulent misrepresentation.
9.Counterparts.  This Agreement may be executed in separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
10.Headings.  The captions to the several sections hereof are not a part of this Agreement, but are included merely for convenience of reference only and shall not affect its meaning or interpretation.
[Remainder of Page Intentionally Left Blank]

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[Signature Page to Patent Purchase Agreement]
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed by their duly-authorized representatives as of the Effective Date.

ISIS INNOVATION LIMITED
By:    /s/ Mr. T Hockaday            
Name:    Mr. T. Hockaday            
Title:    Managing Director                    Isis Innovation Ltd            

SEQUENOM, INC.
By:    /s/ Bill Welch                
Name:    Bill Welch                
Title:    CEO                    

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A-1
EXHIBIT A
PATENTS AND PATENT APPLICATIONS

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EXHIBIT B
PROCEEDINGS
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EXHIBIT C 
RESERVED RIGHTS

		
	1.
	Isis reserves all of its right, title and interest in and to the Assigned Patent Rights in respect of: 

		
	a.
	the right to develop, make, have made, use, have used and Market outside the Field any product, service or composition which is entirely or partially produced by means of or with the use of the Licensed Technology and/or Assigned Patent Rights .  

		
	b.
	the right for Oxford University and every employee, student and appointee of Oxford University to use and (subject to clause 6.5) to publish the Assigned Patent Rights solely for Non-Commercial Use.

		
	2.
	Sequenom will, in consultation with Isis, maintain and renew the Assigned Patent Rights in Europe and Sequenom shall not abandon any of the Assigned Patent Rights in Europe. 

		
	3.
	Each party will notify the other in writing of any misappropriation or infringement of any of the Assigned Patent Rights or Licensed Technology in Europe outside the Field of which the party becomes aware. 

		
	4.
	Isis (and its licensees or sub-licensees) has the first right (but is not obliged) to take legal action at its own cost against any misappropriation or infringement of any rights included in the Assigned Patent Rights and Licensed Technology in Europe outside the Field. Isis shall discuss any proposed legal action in respect of the same with Sequenom prior to legal action being commenced. For the avoidance of doubt, any damages (including, without limitation, punitive damages) and/or any other monetary amount awarded to Isis and/or its licensees or sub-licensees, and/or any other payment made to Isis and/or its licensees or sub-licensees in settlement, in relation to such legal action shall be for the benefit of, and retained by, Isis and/or its licensees or sub-licensees only. 

		
	5.
	If Isis (or its licensees or sub-licensees) takes legal action under paragraph 4 above, Isis will keep Sequenom regularly informed (subject to (i) any obligation of confidentiality owed  by Isis or Oxford University to any Third Party; and/or (ii) any requirement in order to preserve Isis’, Oxford University’s or any other Third Party’s privilege) of the progress of the legal action, including, without limitation, any claims affecting the scope of the Licensed Technology or Assigned Patent Rights.

		
	6.
	If Isis has notified Sequenom in writing that it or its licensees or sub-licensees do not intend to take any action in relation to the misappropriation or infringement or Isis or its licensees or sub-licensees have not taken any such action within 21 days of the notification under paragraph 3, Sequenom may take such legal action at its own cost subject to Isis’ prior written consent. 

 ***Confidential Treatment RequestedEx. 10.2 Lease amendment

SECOND AMENDMENT TO LEASE

This  SECOND  AMENDMENT  TO  LEASE  ("Second  Amendment")   is  made  and entered into as of the 25th day of September, 2014, by and between TPSC IV LLC, a Delaware limited liability company ("Landlord"),  and SEQUENOM, INC., a Delaware corporation ("Tenant").

RECITALS:

A.         Landlord and Tenant entered into that certain Lease dated March 29, 2000 (the
"Original Lease"), as amended by that certain Amendment Number One to Lease dated March
29, 2000 dated September 9, 2005 (the "First Amendment") (the Original Lease and the First
Amendment shall be collectively referred to herein as the "Lease"), whereby Landlord leases to Tenant and Tenant leases from Landlord the Property (as that term is defined in the Original Lease), which Property includes that certain building (the "Building")  comprised 82,500 gross square feet of Building Area and located at 3595 John Hopkins Court, San Diego, California
92121.

B.        The parties desire to extend the Term of the Lease and to otherwise amend the
Lease on the terms and conditions set forth in this Second Amendment.

AGREEMENT:

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.        Terms.    All capitalized terms when used herein shall have the same respective meanings as are given such terms in the Lease unless expressly provided otherwise in this Second Amendment.

2.        Extended Term.    The Term is currently scheduled to expire on September 30,
2015 (the "Current Expiration Date").  Landlord and Tenant hereby agree to extend the Term

through and including September 30, 2025, on the terms and conditions set forth in this Second Amendment, unless sooner terminated as provided in the Lease, as amended.  For purposes of this Second Amendment, the ten (10) year and nine (9) month period commencing on January 1,
2015 (notwithstanding that such date occurs prior to the Current Expiration Date, the "Extended Term Commencement Date") and ending on September 30, 2025 shall be referred to herein as the "Extended Term."

3.        Basic Rent.    Prior to the Extended Term Commencement Date, Tenant shall continue to pay Basic Rent for the Property in accordance with the terms of Article 3 of the Original Lease.    Notwithstanding   any provision to the contrary contained in the Lease,

commencing    on  the  Extended    Term   Commencement    Date,   and   continuing    throughout    the remainder  of the Extended  Term,  Tenant  shall pay,  in accordance  with  the terms  of Article  3 of the Original  Lease,  Basic  Rent for the Property  as follows:

Approximate   Monthly

	
						
	Period  During
	Annual
	Monthly Installment
	Per Square Foot of

	Extended Term
	Basic Rent
	of Basic Rent
	 

	

January 1,2015 - December 31, 2015
	

$2,425,500.00
	

	$202,125.00
	$2.45

	

January 1,2016 - December 31, 2016
	

$2,492,201.28
	

	$207.683.44
	$2.52

	January 1,2017 -  December 31, 2017
	$
	2,560,736.76
	

	$213,394.73
	$2.59

	January 1,2018 - December 31, 2018
	

$2,631,157.08
	

	$219,263.09
	$2.66

	January 1,2019 - December 31, 2019
	$2,703,513.84
	

	$225,292.82
	$2.73

	January 1, 2020 - December 31, 2020
	

$2,777,860.44
	

	$231,488.37
	$2.81

	January 1,2021 - December 31, 2021
	

$2,854,251.60
	

	$237,854.30
	$2.88

	January 1, 2022 - December 31, 2022
	

$2,932,743.48
	

	

$244,395.29
	$2.96

	January 1, 2023 - December 31, 2023
	

$3,013,393.92
	

	

$251,116.16
	

$3.04

	January 1, 2024 - December 31, 2024
	$3,096,262.20
	

	$258,021.85
	$3.13

	January 1,2025 - September 30, 2025
	N/A
	

	$265,117.45
	$3.21

4.         Additional   Rent.   Tenant shall continue to be obligated to pay Additional Rent during the Extended Term.

5.         Termination   Right.
5.1       Exercise of Termination Right.   Tenant shall have the one-time right to terminate  and  cancel  the   Lease,  as  amended,  effective  as  of  September  30,  2022  (the "Termination   Date"),  provided  that, not  later than  September  30, 2021,  Landlord receives (i) written notice from Tenant (the "Termination  Notice") that Tenant intends to terminate the Lease, as amended, pursuant to the terms of this Section 5, and (ii) payment in the amount of One   Million   One   Hundred   Fifty   Thousand   and   00/100   Dollars   ($1,150,000.00)   (the "Termination  Fee") as consideration for such early termination.

5.2       Termination   of Lease.   Provided that Tenant timely elects to terminate the Lease, as amended,  in accordance with Section 5.1, above, the Lease, as amended, shall automatically terminate 

and be of no further force or effect, and Landlord and Tenant shall be relieved of their respective obligations under the Lease, as amended, as of the Termination Date, except with respect to those obligations set forth in the Lease, as amended, which specifically survive the  expiration  or  earlier  termination  of the  Lease,  as  amended,  including,  without limitation, the payment by Tenant of all amounts owed by Tenant under the Lease, as amended, as of and up to the Termination Date.  The termination right contained in this Section 5 shall be personal to the tenant originally named herein (the "Original Tenant") and any Affiliate of the Original Tenant to whom the Lease, as amended, is assigned pursuant to Article 12 below (an "Affiliate Assignee"), and may only be exercised by Original Tenant or its Affiliate Assignee (and not by any other assignee, sublessee or other Transferee of Tenant's interest in this Lease).

5.3       No Tenant Default.   Notwithstanding anything to the contrary contained in this Section 5, Tenant shall have no right to exercise the termination right set forth in this Section 5  if  Tenant  is  in  economic  or  material  non-economic  default  under  the  Lease,  as amended (beyond any applicable notice and cure periods), as of the date of Tenant's delivery to Landlord of the Termination Notice.  If Tenant is in economic or material non-economic default under the Lease, as amended (beyond any applicable notice and cure periods), following Tenant's delivery to  Landlord  of the  Termination Notice but  prior to  the  Termination  Date, then, at Landlord's option, the Termination Notice shall be null and void and of no further force or effect unless Tenant cures such default prior to the earlier of (i) the date Landlord terminates this Lease as a result of such default be Tenant, and (ii) the Termination Date.

6.         Landlord   Exculpation.    The liability of Landlord, its partners, subpartners and their respective officers, agents, servants, employees, lenders, any property manager and independent contractors  (collectively,  the  "Landlord   Parties")   to Tenant for any default by Landlord under the Lease,  as amended, or arising in connection herewith or with Landlord's operation, management, leasing, repair, renovation, alteration or any other matter relating to the Property or the Building shall be limited solely and exclusively to an amount which is equal to the interest of Landlord in the Property.  Neither Landlord, nor any of the Landlord Parties shall have any personal liability therefor, and Tenant hereby expressly waives and releases such personal liability on behalf of itself and all persons claiming by, through or under Tenant.  The limitations of liability contained in this Section 6 shall inure to the benefit of Landlord's and the Landlord Parties' present and future partners, beneficiaries, officers, directors, trustees, shareholders, agents and employees, and their respective partners, heirs, successors and assigns. Under no circumstances shall any present or future partner of Landlord (if Landlord is a partnership), or trustee or beneficiary (if Landlord or any partner of Landlord is a trust), have any liability for the   performance   of Landlord’s obligations   under the Lease, as amended.

Notwithstanding any  contrary   provision  herein,  neither  Landlord  nor the  Landlord  Parties  shall be   liable   under   any   circumstances     for   consequential     damages,    injury   or   damage   to,   or interference   with,  Tenant's  business,  including  but not limited  to, loss  of profits,  loss of rents  or other  revenues,   loss  of  business   opportunity,   loss  of  goodwill   or  loss  of  use,  in  each  case, however   occurring,   or  loss  to  inventory,   scientific  research,   scientific   experiments,   laboratory animals,  products,  specimens,   samples,  and/or  scientific,  business,  accounting   and other records of every  kind  and  description   kept  at the  Property  and any  and  all income  derived  or derivable therefrom.    Further,   neither   Tenant  nor  its  partners,   subpartners   and  their  respective   officers, agents,  servants,  employees,   lenders,  any property  manager  and independent   contractors,  shall be liable  under  any  circumstances   for consequential   damages,  injury  or damage  to,  or interference with,  Landlord's   business,   including   but  not  limited  to,  loss  of  profits,   loss  of  rents  or  other revenues,   loss  of business   opportunity,   loss  of  goodwill   or loss  of use,  in  each  case,  however occurring,   except  in  connection   with  a holding  over  for  more  than  thirty (30) days by Tenant pursuant to Section 2.5 of the Original Lease (and Section 2.5 is hereby amended to provide that Tenant shall not be liable to Landlord for consequential damages, including but not limited to any claims made by a succeeding tenant by reason of such delay, unless Tenant holds over for more than thirty (30) days).

7.        Code Waiver.    Notwithstanding any provision to the contrary contained in the Lease, as amended hereby, as of the date of this Second Amendment, for purposes of clarifying the parties intentions and obligations under the terms of Section 3.5 of the Original Lease, Tenant hereby irrevocably waives and relinquishes any and all rights, benefits, or protections, if any, Tenant now has, or in the future may have, under Section 1950.7 of the California Civil Code, and any successor statute.

8.        Broker.   Landlord and Tenant hereby warrant to each other that they have had no dealings with any real estate broker or agent in connection with the negotiation of this Second Amendment other than Hughes Marino, Inc. (the "Broker"),  and that they know of no other real estate  broker  or  agent  who  is  entitled  to  a  commission  in  connection  with  this  Second Amendment.   Landlord shall pay a commission to the Broker in connection with this Second Amendment pursuant to a separate agreement between Landlord and the Broker.   Each party agrees to indemnify and defend the other party against and hold the other party harmless from any  and  all  claims,  demands,  losses,  liabilities,  lawsuits,  judgments,   costs  and  expenses (including without limitation reasonable attorneys' fees) with respect to any leasing commission or equivalent compensation alleged to be owing on account of any dealings with any real estate broker or agent, other than the Broker occurring by, through, or under the indemnifying party. The 

terms of this Section 8 shall survive the expiration or earlier termination of the term of the Lease, as amended.

9.         Condition of Property.    Tenant hereby acknowledges that Tenant is currently in possession of the Property,  and that,  except as set forth in this  Second Amendment, neither Landlord nor any agent  of Landlord has made any representation  or warranty regarding the condition of the Property or the Building, or with respect to the suitability of the foregoing for the conduct of Tenant's business; provided that the foregoing acknowledgment  shall not be deemed to void or to otherwise  limit Landlord's ongoing repair and maintenance  obligations expressly set forth in the Lease.   Except as specifically set forth herein or in the Tenant Work Letter attached hereto as Exhibit   A (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 Property or the Building, and Tenant shall continue to accept the Property and the Building in its "as is" condition as of the date of this Second Amendment.  For purposes of Section 1938 of the   California   Civil   Code,   Landlord   hereby   discloses   to   Tenant,   and   Tenant hereby acknowledges, that the Building has not undergone inspection by a Certified Access Specialist (CASp).

10.      Option to Extend.   Tenant hereby agrees and acknowledges that in consideration of the extension of the Term of the Lease as provided under this Second Amendment, and the granting of a new option to extend as set forth below, the extension option set forth in Section 2.6 of the Original Lease shall be deemed null and void and without further force and effect, and, accordingly, effective as of the date of this Second Amendment, Section 2.6 of the Original Lease, and all references in the Original Lease to "the Extension Term" are hereby deleted in their entirety and of no further force or effect.

10.1    Option Right.    Landlord hereby  grants to the  Original Tenant and its Affiliate Assignee one (1) option (the "Option") to extend the Term for a period of five (5) years (the "Option Term"),  with respect to the entire Premises, which option shall be exercisable only by written 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, and has not previously been in default under the Lease, as amended, more than once.  Upon the proper exercise of such option to extend, and provided that, at Landlord's option, as of the end of the Term, Tenant is not in default under this Lease, and, at Landlord's option, Tenant has not previously been in default under this Lease more than once, the Term, as it applies to the Premises, shall be extended for a period of five (5) years.  The rights contained in this Section 10 shall be personal to the Original Tenant and its Affiliate Assignee and may be exercised by the Original Tenant or its Affiliate Assignee only (and not by any other assignee, sublessee or transferee of Tenant's interest in this Lease).

10.2    Exercise of Option.   If Tenant wishes to exercise the Option, then Tenant shall deliver written notice (the "Extension Notice") to Landlord not more than fifteen (15) months nor less than twelve (12) months prior to the expiration of the Term, stating that Tenant thereby exercises the Option.  In the event that Tenant so exercises the Option, this Lease shall continue in full force and effect for the duration of the Option Term.

10.3    Rental During Option Term.   The annual Rent payable by Tenant during the Option Term (the "Option Rent") shall be equal to the "Fair Rental Value," as that term is defined below, for the Property as of the commencement date of the Option Term.  The "Fair Rental  Value," as used in this Lease, shall be equal to the annual rent per rentable square foot (including additional rent and considering any "base year" or "expense stop" applicable thereto), including all escalations, at which tenants (pursuant to leases consummated within the twelve (12) month period preceding the first day of the Option Term), are leasing non-sublease, non­ encumbered, non-equity  space which  is not  significantly  greater or smaller in  size than the subject space, for a comparable lease term, in an arm's length transaction, which comparable space is located in the  "Comparable Buildings," as that term is defined in this  Section 10.3, below  (transactions  satisfying  the  foregoing  criteria  shall  be  known  as  the  "Comparable Transactions"),   taking into consideration the following concessions (the "Concessions"):   (a) rental   abatement   concessions,    if  any,   being   granted   such  tenants   in  connection    with   such comparable   space;  (b) tenant  improvements   or allowances   provided   or to be provided  for such comparable  space,  and taking  into account  the value,  if any, of the existing  improvements   in the subject  space;  and  (c)  other  reasonable   monetary   concessions   being   granted   such  tenants  in connection  with  such  comparable   space;  provided,  however,  that  in calculating   the  Fair  Rental Value,  no consideration   shall be given  to (i) the fact that  Landlord  is or is not required  to pay a real estate  brokerage   commission   in connection  with  Tenant's  exercise  of its right to extend  the Term,  or  the  fact  that  landlords   are  or  are  not  paying  real  estate  brokerage   commissions   in connection  with  such  comparable   space,  and (ii) any period  of rental  abatement,  if any,  granted to tenants  in comparable   transactions   in connection  with the design,  permitting  and construction of tenant  improvements    in  such  comparable   spaces.    The  Fair  Rental  Value  shall  additionally include  a determination   as to whether,   and  if so to what  extent,  Tenant  must  provide  Landlord with an increased  Security  Deposit  (which  may be in the form  of a letter  of credit),  for Tenant's Rent obligations  in connection  with Tenant's  lease of the Property  during  the Option  Term.   Such determination   shall  be made  by reviewing   the  extent  of financial  security  then  generally  being imposed  in Comparable   Transactions   from  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).      The   Concessions    (A) shall  be  reflected   in  the  effective   rental   rate   (which effective  rental  rate  shall  take  into  consideration   the  total  dollar  value  of  such  Concessions   as amortized   on  a straight-line   basis  over  the  applicable  term  of the  Comparable   Transaction   (in which  case  such  Concessions    evidenced   in  the  effective   rental   rate  shall  not  be  granted  to Tenant))  payable  by Tenant,  or (B) at Landlord's   election,  all such  Concessions   shall be granted to Tenant  in kind.   The term  "Comparable     Buildings"    shall mean  the Building  and those  other first-class  institutionally-owned    mid-  and  high-rise  office  buildings   located  in the  Torrey  Pines area of San Diego,  California.

10.4     Determination of   Option    Rent.       In   the   event   Tenant   timely   and appropriately   exercises  an option  to extend  the Term,  Landlord  shall  notify  Tenant  of Landlord's determination   of the  Option  Rent  on or before  the  date which  occurs  six (6) months  prior  to the expiration   of  the  Extended   Term.    If  Tenant,   on  or  before  the  date  which  is thirty (30) days following the date upon which Tenant receives Landlord's determination of the Option Rent, in good faith objects to Landlord's determination of the Option Rent, then Landlord and Tenant shall attempt to agree upon the Option Rent using their best good-faith efforts.  If Landlord and Tenant fail to reach agreement within thirty (30) days following Tenant's objection.to the Option Rent (the "Outside  Agreement  Date"), then each party shall make a separate determination of the Option Rent, as the  case may be, within five (5) days, and such determinations shall be submitted to arbitration in accordance with Sections 10.4.1 through  10.4.7, below.   If Tenant fails to object to Landlord's determination of the Option Rent within the time period set forth herein, then Tenant shall be deemed to have accepted Landlord's determination of Option Rent.

10.4.1 Landlord and Tenant shall each appoint one arbitrator who shall be, at the option of the appointing party, a real estate broker, appraiser or attorney 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 commercial office properties in North San Diego, California. The determination of the arbitrators shall be limited solely to the issue of whether Landlord's or Tenant's submitted Option Rent is the closest to the actual Option Rent, taking into account the requirements of Section 10.3 of this Second Amendment, as determined by the arbitrators.  Each such arbitrator shall be appointed within fifteen (15) days after the Outside Agreement Date. Landlord and Tenant may consult with their selected arbitrators prior to appointment and may select an arbitrator who is favorable to their respective positions.  The arbitrators so selected by Landlord and Tenant shall be deemed "Advocate Arbitrators."

10.4.2 The two (2) Advocate Arbitrators so appointed shall be specifically required pursuant to an engagement letter within ten (10) days of the date of the appointment of the last appointed Advocate Arbitrator to agree upon and appoint a third arbitrator ("Neutral Arbitrator")     who  shall  be  qualified  under  the  same  criteria  set  forth  herein above  for qualification of the two Advocate  Arbitrators, except that neither the Landlord or Tenant or either parties' Advocate Arbitrator may, directly or indirectly, consult with the Neutral Arbitrator prior or 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.

10.4.3 The   three   arbitrators   shall,   within   thirty  (30)   days  of  the appointment  of the  Neutral  Arbitrator,  reach  a decision  as to  whether the  parties  shall use Landlord's or Tenant's submitted Option Rent, and shall notify Landlord and Tenant thereof.

10.4.4 The  decision  of  the  majority  of  the  three  arbitrators  shall  be binding upon Landlord and Tenant.

10.4.5 If either Landlord or Tenant fails to appoint an Advocate Arbitrator within fifteen (15) days after the Outside Agreement Date, then either party may petition the presiding judge of the Superior Court of San Diego County to appoint such Advocate Arbitrator subject to the criteria in Section 10.4.1 of this Lease, or if he or she refuses to act, either party may petition any judge having jurisdiction over the parties to appoint such Advocate Arbitrator.

10.4.6 If the two (2) Advocate Arbitrators fail to agree upon and appoint the Neutral Arbitrator, then either party may petition the presiding judge of the Superior Court of San Diego County to appoint the Neutral Arbitrator, subject to criteria in Section 10.4.2 of this Lease, or if he or she refuses to act, either party may petition any judge having jurisdiction over the parties to appoint such arbitrator.

10.4.7 The cost of the arbitration shall be paid by Landlord and Tenant equally.

10.5    In the event that the Option Rent shall not have been determined pursuant to the terms hereof prior to the commencement of the Option Term, Tenant shall be required to pay the Option Rent initially provided by Landlord to Tenant, and upon the final determination of the Option Rent, the payments made by Tenant shall be reconciled with the actual amounts of Option Rent due, and the appropriate party shall make any corresponding payment to the other party.

10.6    Termination    of Option Right.    The  option right granted  herein  shall terminate  upon  the  failure  by  Tenant  to  exercise  its  option  right  in  accordance  with  this Section 10.

11.      Damage   or   Destruction.      Notwithstanding   any  provision to  the  contrary contained in the  Lease,  effective  as of the  date  of this  Second Amendment,  the  following provision shall be added to the end of Section 14.1(a) of the Original Lease:

"Notwithstanding the terms of Article 14 of this Lease, in the event more than
$500,000.00 of the cost to repair such damage or destruction is not covered by
Landlord's insurance policies, Landlord may elect not to rebuild and/or restore the
Property  and/or  the  Building,  and  instead  terminate  this  Lease,  by  notifying Tenant in writing  of such termination within thirty (30) days after the date of discovery of the damage, such notice to include a termination date giving Tenant sixty (60) days to vacate the Property."

12.      Compliance with Laws.     Notwithstanding   any  provision  to  the  contrary contained in the Lease, as amended hereby, Landlord shall, at Landlord's sole cost and expense (and not as part of Operating Expenses), comply with all Requirements relating to the structural portions of the Building  and all portions of the  Property outside the  Building (for example, compliance with the Americans  With Disabilities Act in parking lot and other building code requirements),  but  only  to  the  extent  (i)  such  obligations  are  not  triggered  by  either  (A) alterations, additions or improvements  (including, without limitation, the Second Amendment Tenant Improvements) which have been made by Tenant to the Property, to the extent such alterations, additions or improvements are not normal and customary improvements for the uses permitted in accordance with the Scientific Research Zoning Ordinance of the City of San Diego and the Torrey Pines Science Center Planned Industrial Development, or (B) Tenant's use of the Property for any use which is not a permitted use in accordance with the Scientific Research Zoning Ordinance of the  City  of  San Diego  and the  Torrey  Pines  Science Center Planned Industrial Development, and (ii) Landlord's failure to comply therewith would prohibit Tenant from obtaining or maintaining a certificate of occupancy for the Building, or would unreasonably and materially affect the safety of Tenant's employees or create a significant health hazard for Tenant's employees, or would otherwise materially and adversely affect Tenant's use of or access to the Property.
13.      Notices.   Notwithstanding any provision contained in the Lease to the contrary, effective as of the date of this Second Amendment, any notices to Landlord and Tenant shall be sent, transmitted, 

or delivered, as the case may be, in accordance with the terms of Section 18.1 of the Original Lease to the following addresses:
If to Landlord: TPSCIVLLC
c/o HCP, Inc.
400 Oyster Point Blvd., Suite 409
South San Francisco, CA  94080
Attn:  Jon Bergschneider
Fax:  (650) 875-1003

with a copy to:

TPSCIV   LLC
c/o RCP,  Inc.
3760 Kilroy Airport Way, Suite 300
Long Beach, CA  90806-2473
Attn:   Legal Department
Fax:  (562) 733-5219
 And
Allen Matkins Leek Gamble Mallory & Natsis LLP
190 1 Avenue of the Stars, Suite 1800
Los Angeles, California 90067
		
	Attention:
	Anton N. Natsis, Esq. Fax:   (310) 788-2410

If to Tenant:

At the Building
Attention:   Jeff Linton, Senior Vice President and General Counsel

14.       Energy    Performance      Disclosure    Information.        Tenant   hereby   acknowledges that   Landlord    may   be   required    to   disclose    certain    information     concerning    the   energy performance   of the Building  pursuant  to California  Public  Resources  Code  Section  25402.10  and the regulations   adopted  pursuant  thereto  (collectively   the "Energy   Disclosure   Requirements"). 

Tenant  hereby  acknowledges   prior  receipt  of the Data  Verification   Checklist,   as defined  in the Energy   Disclosure    Requirements    (the   "Energy    Disclosure    Information"),      and   agrees   that Landlord  has timely  complied   in full  with  Landlord's   obligations   under  the  Energy  Disclosure Requirements.     Tenant  acknowledges    and  agrees  that  (i) Landlord   makes  no representation   or warranty  regarding   the  energy  performance   of the  Building  or the  accuracy  or completeness   of the  Energy  Disclosure   Information,    (ii)  the  Energy   Disclosure   Information   is  for  the  current occupancy   and  use  of the  Building   and  that  the  energy  performance   of the  Building  may  vary depending   on  future  occupancy   and/or  use  of  the  Building,   and  (iii)  Landlord   shall  have  no liability  to Tenant  for any errors  or omissions  in the Energy  Disclosure  Information.    If and to the extent  not prohibited   by  applicable   laws,  Tenant  hereby  waives  any  right  Tenant  may  have  to receive  the  Energy  Disclosure   Information,   including,   without  limitation,   any  right  Tenant  may have  to  terminate   the  Lease,   as  amended,   as  a  result  of  Landlord's    failure   to  disclose   such information.    Further,  Tenant  hereby  releases  Landlord  from  any and  all losses,  costs,  damages, expenses  and/or  liabilities  relating  to,  arising  out of and/or  resulting  from  the Energy  Disclosure Requirements,    including,   without   limitation,   any  liabilities   arising   as  a  result   of  Landlord's failure  to  disclose  the  Energy   Disclosure   Information   to  Tenant  prior  to  the  execution   of this Second  Amendment.    Tenant's   acknowledgment    of the  AS-IS  condition  of the  Property  (except as specifically   set forth  in this  Second  Amendment   and the Tenant  Work  Letter)  pursuant  to the terms  of this Lease  shall  be deemed  to include  the energy  performance   of the Building.    Tenant further  acknowledges   that  pursuant   to  the  Energy  Disclosure   Requirements,    Landlord   may  be required  in the  future  to disclose  information   concerning   Tenant's   energy  usage  to certain  third parties,  including,  without  limitation,  prospective   purchasers,   lenders  and tenants  of the Building (the "Tenant   Energy   Use  Disclosure").     Tenant hereby (A) consents to all such Tenant Energy Use Disclosures, and (B) acknowledges that Landlord shall not be required to notify Tenant of any Tenant Energy Use Disclosure.  Further, Tenant hereby releases Landlord from any and all losses, costs, damages, expenses and liabilities relating to, arising out of and/or resulting from any Tenant Energy Use Disclosure.  The terms of this Section 14 shall survive the expiration or earlier termination of this Lease.

15.      Modification to Operating   Expenses.    Notwithstanding any provision to the contrary contained in the Lease, as amended hereby, effective as of the Extended Term Commencement Date, the following shall apply:

15.1    Item (v) of Section 6.2 of the Original Lease shall be amended and restated in its entirety as follows:

"the cost of capital improvements or other costs incurred in connection with the Property that are required under any governmental law or regulation, specifically excluding any costs which are Landlord's responsibility under Section 12 of the Second Amendment; provided, however, that any capital expenditure shall be amortized (including interest on the amortized cost) over its useful life (as reasonably determined by Landlord);"

15.2    The reference to "(to the extent such items do not constitute capital improvements) unless such costs are amortized over the useful life of the item" in Item (1) of Section 6.2 of the Original Lease shall be amended and restated in its entirety as follows: ", except as specifically set forth in Item (v) above;"

15.3    The following provisions shall be added to Section 6.2 of the Original
Lease immediately following Item (1) of Section 6.2 of the Original Lease:

"(m)    costs  incurred  in  connection  with  any  expansion  or renovation  of the Building or Property, except as specifically set forth in Item (v) above; (n) costs incurred  to  comply  with  any  governmental  law  or  regulation  relating  to  the removal, remediation, treatment or containment of any "hazardous substance" (as that term is defined in Section 10.6(a) of this Lease), the terms of which shall be governed by Section 10.6 of this Lease and Section 12 of the Second Amendment; and (n) costs relating to the landscaping of the Property to the extent that Tenant contracts, and directly pays, for such landscaping."

16.      Hazardous   Substances.   Notwithstanding anything contained in Section 10.6 of the Lease, Tenant will not be liable to Landlord for any hazardous substances which were not brought onto the Property by Tenant, its employees, contractors, agents or third parties under the control of Tenant.

17.     No Further   Modification.   Except as specifically set forth in this Second Amendment, all of the terms and provisions of the Lease shall remain unmodified and in full force and effect.

[signature page to follow]

IN WITNESS WHEREOF,   this Second Amendment has been executed as of the day and year first above written.

"LANDLORD"
TPSCIV    LLC,
A Delaware limited Liability Company

By:

Name:   ------------------------

"TENANT"
 SEQUENOM, INC.,
a Delaware corporation
By:
Name:     --------------------------

WORK LETTER
EXHIBIT A 

This Tenant Work Letter shall set forth the terms and conditions relating to the construction of the tenant improvements in the Building.  This Tenant Work Letter is essentially organized  chronologically   and   addresses  the   issues   of  the   construction   of  the  tenant improvements  in  the  Building,  in  sequence,  as  such  issues  will  arise  during  the  actual construction of the tenant improvements in the Building.   All references in this Tenant Work Letter to Articles or Sections of "this Second Amendment"   shall mean the relevant portion of the Second Amendment to which this Tenant Work Letter is attached as Exhibit A and of which this Tenant Work Letter forms a part, and all references in this Tenant Work Letter to Sections of "this Tenant Work Letter"   shall mean the relevant portion of Sections 1 through 5 of this Tenant Work Letter.   All references in this Tenant Work Letter to the "Lease" shall mean the relevant portions of the Lease as defined in the Second Amendment.  Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Second Amendment.

SECTION 1

CONDITION OF PROPERTY

Except as expressly  set forth in this Tenant Work Letter and the Second Amendment, Tenant shall continue to  accept the Property from Landlord in its presently existing, "as-is" condition.

SECTION 2

SECOND AMENDMENT TENANT IMPROVEMENTS

2.1       Second Amendment Tenant Improvement Allowance.  Tenant shall be entitled to a one-time tenant improvement allowance (the "Second Amendment  Tenant  Improvement Allowance") in the amount of One Million Two Hundred Thirty-Seven Thousand Five Hundred and 00/100 Dollars ($1,237,500.00, i.e., $15.00 per gross square foot of Building Area of the Building), for the costs relating to the initial design and construction of Tenant's improvements, which   are   permanently   affixed   to   the   Building   (the   "Second   Amendment    Tenant Improvements").    In no event shall Landlord be obligated to make disbursements pursuant to this  Tenant  Work  Letter  in  a total  amount  which  exceeds  the  Second Amendment  Tenant Improvement  Allowance.     Further,  notwithstanding  the  foregoing  or  any  provision  to  the contrary contained herein, in no event shall Landlord be 

obligated to make any disbursements pursuant to this Tenant Work Letter in a total amount which exceeds Three Hundred Thousand and 00/100 Dollars  ($300,000.00)  for  any  costs  incurred  in  connection  with  any  "Second Amendment Tenant Improvement  Allowance Items," as that term is defined in Section 2.2.1 below, which costs arise or accrue on or before December 31, 2014.  In the event that the Second Amendment  Tenant  Improvement  Allowance  is  not  fully  utilized  by  Tenant  on  or  before December 31, 2016, then such unused amounts shall revert to Landlord, and Tenant shall have no further rights with respect thereto.  All Second Amendment Tenant Improvements for which the  Second Amendment  Tenant  Improvement  Allowance  has  been  made  available  shall be deemed Landlord's property under the terms of the Lease; provided, however, Landlord may, by written  notice  to  Tenant  at  the  time  of  Landlord's  approval  of  the  "Approved  Working Drawings," as that term is defined in Section 3.4, below, require Tenant, at Tenant's expense, to remove any Second Amendment Tenant Improvements and to repair any damage to the Property and Building caused by such removal and return the affected portion  of the Property and/or Building to their condition existing prior to the installment of such Second Amendment Tenant Improvements.  Tenant may elect to construct the Second Amendment Tenant Improvements in phases, in which case each phase will be subject to the terms of this Tenant Work Letter.

2.2      Disbursement of the Second Amendment Tenant Improvement   Allowance.

2.2.1    Second Amendment Tenant Improvement Allowance Items.   Except as otherwise set forth in this Tenant Work Letter, the Second Amendment Tenant Improvement Allowance shall be disbursed by Landlord only for the following items and costs (collectively the "Second Amendment Tenant Improvement Allowance Items"):

2.2.l.1      Payment of the fees of the "Architect" and the "Engineers," as those  terms  are  defined   in   Section 3.1  of  this  Tenant  Work  Letter,  which  fees  shall, notwithstanding anything to the contrary contained in this Tenant Work Letter, not exceed an aggregate amount equal to $3.50 per rentable square foot of the Building, and payment of the fees incurred by, and the cost of documents and materials supplied by, Landlord and Landlord's consultants in connection with the preparation and review of the  "Construction Drawings," as that term is defined in Section 3.1 of this Tenant Work Letter;

2.2.1.2     The payment of plan check, permit and license fees relating to construction of the Second Amendment Tenant Improvements;

2.2.1.3    The cost of construction of the Second Amendment Tenant Improvements, including,  without  limitation, testing  and inspection  costs, hoisting and trash removal costs, and contractors' fees and general conditions;

2.2.1.4     The  cost  of  any  changes  in  the  structural  portions  of  the Building and/or the  Building  systems when  such changes  are  required  by the  Construction Drawings (including  if  such  changes  are  due to  the  fact that  such work  is prepared on an unoccupied  basis),  such  cost  to  include  all  direct  architectural  and/or  engineering  fees and expenses incurred in connection therewith;

2.2.1.5     The cost of any changes to the Construction Drawings or Second
Amendment Tenant Improvements required by all applicable building codes (the "Code");

2.2.1.6     Sales and use taxes and Title 24 fees; and

2.2.l.7      All other costs reasonably expended by Landlord in connection with the construction of the Second Amendment Tenant Improvements (specifically excluding any logistical coordination fee and any amounts payable by Landlord to PMA (as that term is defined in Section 5.2, below) in connection with Tenant's construction of the Tenant Improvements.  There   will be no charge   for freight   elevator   usage   or parking   during construction   of the Second Amendment   Tenant Improvements.

2.2.2     Disbursement    of Second   Amendment    Tenant   Improvement    Allowance. During  the  construction   of the  Second  Amendment   Tenant  Improvements,   Landlord  shall make monthly  disbursements   of the  Second  Amendment   Tenant  Improvement   Allowance   for Second Amendment   Tenant  Improvement   Allowance   Items  for the benefit  of Tenant  and  shall authorize the release  of monies  for the benefit  of Tenant  as follows.

2.2.2.1      Monthly Disbursements.     On  or before  a day  of  each  calendar month  to be  specified   by  Landlord,   during  the  construction   of the  Second  Amendment   Tenant Improvements,   Tenant  shall  deliver  to Landlord:    (i) a request  for payment   of the  "Contractor," as that term  is defined  in Section  4.1 of this Tenant  Work  Letter,  approved  by Tenant,  in a form to be provided  by Landlord,   showing  the  schedule,  by trade,  of percentage   of completion   of the Second  Amendment   Tenant  Improvements    in  the  Building,   detailing   the  portion   of  the  work completed  and the portion  not completed;   (ii) invoices  from all of "Tenant's  Agents,"  as that term is defined  in Section  4.1.2  of this Tenant  Work  Letter,  for labor rendered  and materials  delivered to the  Property;   (iii) executed  mechanic's   

lien  releases  from  all of Tenant's  Agents  which  shall comply  with  the  appropriate   provisions,   as  reasonably   determined   by  Landlord,   of  California Civil   Code   Sections  8132,   8134,   8136   and   8138;   and  (iv) all  other   information    reasonably requested  by Landlord.    Tenant's  request  for payment  shall be  deemed  Tenant's  acceptance   and approval  of the  work  furnished   and/or  the  materials   supplied   as  set  forth  in Tenant's  payment request.   Thereafter,   Landlord  shall deliver  a check  to Tenant  made jointly  payable  to Contractor and Tenant  in payment  of the lesser  of:   (A) the amounts  so requested  by Tenant,  as set forth  in this  Section  2.2.2.1,   above,   less  a ten  percent   (10%) retention   (the  aggregate   amount   of  such retentions  to be known  as the "Final  Retention"),  and (B) the balance of any remaining available portion of the  Second Amendment  Tenant  Improvement Allowance  (not including the Final
Retention), provided  that  Landlord does not dispute any request for payment based on non­ compliance of any work with the  "Approved Working Drawings," as that term is defined in Section 3.4 below, or due to any substandard work, or for any other reasonable basis.  Landlord's payment of such amounts shall not be deemed Landlord's approval or acceptance of the work furnished or materials supplied as set forth in Tenant's payment request.

2.2.2.2     Final Retention.  Subject to the provisions of this Tenant Work Letter,  a  check  for  the  Final  Retention  payable jointly  to  Tenant  and  Contractor  shall be delivered by Landlord to Tenant following the completion of construction of the Second Amendment  Tenant  Improvements,  provided  that  (i) Tenant  delivers  to  Landlord  properly executed mechanics lien releases in compliance with both California Civil Code Section 8134 and either 8136 or Section 8138, (ii) Landlord has determined that no substandard work exists which adversely affects the mechanical, electrical, plumbing, heating, ventilating and air conditioning, life-safety or other systems of the Building, the curtain wall of the Building, or the structure  or  exterior  appearance  of  the  Building,  and  (iii) Architect  delivers  to  Landlord  a certificate, in a form reasonably acceptable to Landlord, certifying that the construction of the Second Amendment Tenant Improvements in the Property has been substantially completed.

2.2.2.3   Other Terms.   Landlord shall only be obligated to make disbursements from the Second Amendment Tenant Improvement Allowance to the extent costs are incurred by Tenant for Second Amendment Tenant Improvement Allowance Items.   All Second Amendment Tenant Improvement Allowance Items for which the Second Amendment Tenant Improvement Allowance has been made available shall be deemed Landlord's property under the terms of the Lease.

2.3       Standard   Second Amendment Tenant Improvement   Package.    Landlord has established specifications (the "Specifications") for the Property standard components to be used in the   construction   of the Second Amendment Tenant   Improvements   in the   Property (collectively, the "Standard   Improvement Package"), which Specifications shall be supplied to Tenant by Landlord.  The quality of Second Amendment Tenant Improvements shall be equal to or of greater quality than the quality of the Specifications, provided that the Second Amendment Tenant Improvements shall comply with certain Specifications as designated by Landlord and provided that the parties agree that the existing finishes and materials in the Premises meet the building standards.   Landlord may make changes to the Specifications for the Standard Improvement Package from time to time.

SECTION 3

CONSTRUCTION DRAWINGS

3.1      Selection   of Architect/Construction      Drawings.       Tenant   shall  retain  the architect/space  planner  designated  by  Tenant  and  reasonably  approved  by  Landlord  (the "Architect")  to prepare the "Construction Drawings," as that term is defined in this Section 3.1; provided that Landlord hereby approves Kimberly Krenek.  Tenant shall retain the engineering consultants designated by Landlord (the “Engineers")   to prepare all plans and engineering working drawings relating to the structural, mechanical, electrical, plumbing, HVAC, lifesafety, and sprinkler work in the Building.   Landlord hereby approves Helix Mechanical, Inc. for all mechanical, HVAC and plumbing related work, Ickler Electrical Corp. for electrical work and Bryant Construction to act as the general contractor.  The plans and drawings to be prepared by Architect  and  the  Engineers  hereunder  shall  be  known  collectively  as  the  "Construction Drawings."  All Construction Drawings shall comply with the drawing format and specifications determined by Landlord, and shall be subject to Landlord's reasonable approval, which approval will be given or denied (with a written statement of reasons for denial and proposed changes necessary  to  obtain  Landlord's   consent)  within  ten  (10)  business  days  after  submittal  to Landlord.   Tenant and Architect  shall verify, in the  field, the  dimensions and conditions as shown on the relevant portions  of the base building plans, and Tenant and Architect shall be solely  responsible  for  the  same,  and  Landlord  shall  have  no  responsibility  in  connection therewith.  Landlord's review of the Construction Drawings as set forth in this Section 3, shall be for its sole purpose and shall not imply Landlord's review of the same, or obligate Landlord to review the  same, for quality,  design,  Code compliance  or other  like matters.   Accordingly, notwithstanding that any Construction Drawings are reviewed by Landlord or its space planner, architect, engineers and 

consultants, and notwithstanding any advice or assistance which may be rendered  to  Tenant  by  Landlord   or  Landlord's  space  planner,   architect,  engineers,  and consultants, Landlord shall have no liability whatsoever in connection therewith and shall not be responsible for any omissions  or errors contained in the Construction Drawings, and Tenant's waiver  and  indemnity  set  forth  in  the  Lease  shall  specifically  apply  to  the  Construction Drawings.

3.2      Final Space Plan.   Tenant shall supply Landlord with four (4) copies signed by Tenant of its final space plan for the Second Amendment Tenant Improvements before any architectural working drawings or engineering drawings have been commenced.  The final space plan (the "Final Space Plan") shall include a layout and designation of all offices, rooms and other partitioning, their intended use, and equipment to be contained therein.   Landlord may request clarification or more specific drawings for special use items not included in the Final Space Plan.  Landlord shall advise Tenant within five (5) business days after Landlord's receipt of  the  Final  Space  Plan  for  the  Second  Amendment  Tenant  Improvements  if the  same is unsatisfactory or incomplete in any respect (together with a written statement of any changes necessary to address Landlord's  concerns).  If Tenant is so advised, Tenant shall promptly cause the Final Space Plan to be revised to correct any deficiencies or other matters Landlord may reasonably require.

3.3      Final Working   Drawings.    After the Final Space Plan has been approved by Landlord, which approval shall not be unreasonably withheld, Tenant shall supply the Engineers with a complete listing of standard and non-standard equipment and specifications, including, without limitation, B.T.U. calculations, electrical requirements and special electrical receptacle requirements for the Property, to the extent necessary to enable the Engineers and the Architect to complete the "Final Working Drawings" (as that term is defined below) in the manner as set forth below.  Upon the approval of the Final Space Plan by Landlord and Tenant, Tenant shall promptly cause the Architect and the Engineers to complete the architectural and engineering drawings for the Second Amendment Tenant Improvements, and Architect shall compile a fully coordinated  set  of  architectural,  structural,  mechanical,  electrical  and  plumbing  working drawings in a form which is complete to allow subcontractors to bid on the work and to obtain all applicable permits (collectively, the "Final Working  Drawings")  and shall submit the same to Landlord for Landlord's approval.  Tenant shall supply Landlord with four (4) copies signed by Tenant of such Final Working Drawings.  Landlord shall advise Tenant within five (5) business days after Landlord's receipt of the Final Working Drawings for the Premises if the same is unsatisfactory or incomplete in any respect (together with a written statement of any changes necessary to address Landlord’s concerns).   If Tenant is so advised, Tenant shall immediately revise the Final Working Drawings in accordance with such review and any disapproval of Landlord in connection therewith.

3.4      Approved Working Drawings.   The Final Working Drawings shall be approved by Landlord (the "Approved Working Drawings"), which approval shall not be unreasonably withheld, prior to the commencement of construction of the Second Amendment Tenant Improvements by Tenant.  After approval by Landlord of the Final Working Drawings, Tenant may submit the same to the appropriate municipal authorities for all applicable building permits (the "Permits").   Tenant hereby agrees that neither Landlord nor Landlord's consultants shall be responsible for obtaining any building permit or certificate of occupancy for the Property and that obtaining the same shall be Tenant's responsibility; provided, however, that Landlord shall cooperate with Tenant in executing permit applications and performing other ministerial acts reasonably necessary to enable Tenant to obtain any such permit or certificate of occupancy. No changes, modifications or alterations in the Approved Working Drawings may be made without the prior written consent of Landlord, which consent may not be unreasonably withheld, conditioned or delayed.

SECTION 4

CONSTRUCTION OF THE SECOND AMENDMENT TENANT IMPROVEMENTS

4.1      Tenant’s Selection of Contractors.

4.1.1    The Contractor.    A general contractor shall be retained by Tenant to construct   the    Second   Amendment   Tenant   Improvements.       Such   general   contractor ("Contractor")   shall be selected by Tenant and reasonably approved by Landlord; provided Bryant Construction is hereby approved.

4.1.2    Tenant's Agents.  All subcontractors, laborers, materialmen, and suppliers used by Tenant (such subcontractors, laborers, materialmen, and suppliers, and the Contractor to be known collectively as "Tenant’s Agents") shall be subject to Landlord's reasonable approval; provided Helix Mechanical. Inc. and IckIer Electrical Corp. are hereby approved.

4.2       Construction    of Second Amendment   Tenant   Improvements by Tenant’s Agents.

4.2.1    Construction Contract; Cost Budget.   Prior to Tenant's execution of the construction contract  and  general  conditions with  Contractor  (the  "Contract"),   Tenant shall submit the Contract to  Landlord  for its approval, which approval  shall not be unreasonably withheld or delayed; provided that Landlord's approval of the Contract shall not be required in the  event  that  (i)  the  Contract  contains  commercially  standard  indemnity  provisions,  (ii) complies with the  insurance provisions of Section 4.2.2.4 below, and (iii) complies with the warranty and guarantee provisions of Section 4.2.2.3 below.  Prior to the 

commencement of the construction of the Second Amendment Tenant Improvements, and after Tenant has accepted all bids for the Second Amendment Tenant Improvements, Tenant shall provide Landlord with a detailed breakdown, by trade, of the final costs to be incurred or which have been incurred, as set forth more particularly in Sections 2.2.1.1 through 2.2.1.7, above, in connection with the design and construction of the Second Amendment Tenant Improvements to be performed by or at the direction of Tenant or the Contractor, which costs form a basis for the amount of the Contract (the "Final  Costs").    Prior to the commencement of construction of the Second Amendment Tenant  Improvements,  Tenant  shall  supply  Landlord  with  cash  in  an  amount  (the  "Over­ Allowance Amount")  equal to the difference between the amount of the Final Costs and the amount of the  Second Amendment Tenant Improvement Allowance (less any portion thereof already disbursed by Landlord, or in the process of being disbursed by Landlord, on or before the commencement of construction of the Second Amendment Tenant Improvements).  The Over­ Allowance Amount shall be disbursed by Landlord prior to the disbursement of any of the then remaining portion of the Second Amendment Tenant Improvement Allowance, and such disbursement shall be pursuant to the same procedure as the Second Amendment Tenant Improvement Allowance.  In the event that, after the Final Costs have been delivered by Tenant to Landlord, the costs relating to the design and construction of the Second Amendment Tenant Improvements shall change, any additional costs necessary to such design and construction in excess of the Final Costs, shall be paid by Tenant to Landlord immediately as an addition to the Over-Allowance  Amount  or  at  Landlord's  option,  Tenant  shall  make  payments  for  such additional costs out of its own funds, but Tenant shall continue to provide Landlord with the documents described in Sections 2.2.2.1(i), (ii), (iii) and (iv) of this Tenant Work Letter, above, for Landlord's approval, prior to Tenant paying such costs. Notwithstanding anything set forth in this Tenant Work Letter to the contrary, construction of the Second Amendment Tenant Improvements shall not commence until (a) Landlord has approved the Contract, and (b) Tenant has procured and delivered to Landlord a copy of all Permits.

4.2.2    Tenant's Agents.

4.2.2.1     Landlord's General Conditions for Tenant's Agents and Second Amendment Tenant Improvement Work.   Tenant's and Tenant's Agent's  construction of the Second Amendment  Tenant  Improvements  shall comply with the  following:    (i) the  Second Amendment Tenant Improvements shall be constructed in strict accordance with the Approved Working  Drawings;  (ii) Landlord's  reasonable  rules  and  regulations  for  the  construction  of improvements in the  Building;  and  (iii) Tenant shall abide by  all  rules made by Landlord's Building manager with respect to the use of freight, loading dock and service elevators, storage of materials, and any other matter in connection with this Tenant Work Letter, including, without limitation, the construction of the Second Amendment Tenant Improvements.  In the event of a conflict between the Approved Working Drawings and Landlord's construction rules and regulations, Landlord, in its sole and absolute discretion, shall determine which shall prevail.

4.2.2.2     Indemnity.   Tenant's indemnity of Landlord as set forth in the Lease shall also apply with respect to any and all costs, losses, damages, injuries and liabilities related in any way to 

any act or omission of Tenant or Tenant's Agents, or anyone directly or indirectly employed by any of them, or in connection with Tenant's non-payment of any amount arising out of the Second Amendment Tenant Improvements and/or Tenant's disapproval of all or any portion of any request for payment.  Except to the extent arising from Landlord's negligence or willful misconduct, such indemnity by Tenant, as set forth in the Lease, shall also apply with respect to  any and  all  costs,  losses,  damages,  injuries  and liabilities  related  in  any way to Landlord's performance  of any ministerial  acts reasonably  necessary  (i) to permit  Tenant to complete the Second Amendment Tenant Improvements, and (ii) to enable Tenant to obtain any building permit or certificate of occupancy for the Property.

4.2.2.3     Requirements of Tenant's Agents.  Each of Tenant's Agents shall guarantee to Tenant and for the benefit of Landlord that the portion of the Second Amendment Tenant Improvements for which it is responsible shall be free from any defects in workmanship and materials for a period of not less than one (1) year from the date of completion thereof.  Each of Tenant's Agents shall be responsible for the replacement or repair, without additional charge, of all work done or furnished in accordance with its contract that shall become defective within one (1) year after the completion of the work performed by such contractor or subcontractors. The correction of such work shall include, without additional charge, all additional expenses and damages incurred in connection  with  such removal or replacement  of all or any part of the Second Amendment Tenant Improvements, and/or the Building and/or common areas that may be damaged or disturbed thereby.   All such warranties or guarantees as to materials or workmanship  of  or with  respect  to  the  Second Amendment  Tenant  Improvements  shall be contained in the  Contract  or  subcontract  and shall be written  such that  such  guarantees or warranties shall inure to the benefit of both Landlord and Tenant, as their respective interests may appear, and can be directly enforced by either.  Tenant covenants to give to Landlord any assignment  or  other  assurances  which  may  be  necessary  to  effect  such  right  of  direct enforcement.

4.2.2.4     Insurance Requirements.

4.2.2.4.1     General Coverages.   All of Tenant's Agents shall carry worker's compensation insurance covering all of their respective employees, and shall also carry public liability insurance, including property damage, with limits reasonably approved by Landlord, in form and with companies as are required to be carried by Tenant as set forth in the Lease.

4.2.2.4.2      Special Coverages.  Tenant shall carry or cause the Contractor  to  carry  "Builder's  All  Risk"  insurance  in  an  amount  reasonably  approved  by Landlord covering 

the construction of the Second Amendment Tenant Improvements, and such other insurance as Landlord may reasonably require, it being understood and agreed that the Second Amendment  Tenant  Improvements shall be insured by Tenant pursuant to the Lease immediately upon completion thereof.   Such insurance shall be in amounts and shall include such extended coverage endorsements as may be reasonably required by Landlord including, but not  limited to,  the  requirement  that  all  of  Tenant's  Agents  shall  carry  excess  liability and Products and Completed Operation Coverage insurance, each in amounts not less than $500,000 per incident, $1,000,000 in aggregate, and in form and with companies as are required to be carried by Tenant as set forth in the Lease.

4.2.2.4.3      General   Terms.      Certificates   for   all insurance carried pursuant to this Section 4.2.2.4 shall be delivered to Landlord before the commencement of construction of the Second Amendment Tenant Improvements and before the Contractor's equipment is moved onto the site.  All such policies of insurance must contain a provision that the company writing said policy or the insured will give Landlord thirty (30) days prior written notice of any cancellation or lapse of the effective date or any reduction in the amounts of such insurance.  In the event that the Second Amendment Tenant Improvements are damaged by any cause during the course of the construction thereof, Tenant shall repair the same.   Tenant's Agents  shall  maintain  all  of  the  foregoing  insurance  coverage  in  force  until  the  Second Amendment Tenant Improvements are fully completed and accepted by Landlord, except for any Products and Completed Operation Coverage insurance required by Landlord, which is to be maintained for ten (10) years following completion of the work and acceptance by Landlord and Tenant.  All policies carried under this Section 4.2.2.4 shall insure Landlord and Tenant, as their interests may appear, as well as Contractor and Tenant's Agents.  All insurance, except Workers' Compensation, maintained by Tenant's Agents shall preclude subrogation claims by the insurer against anyone insured thereunder.   Such insurance shall provide that it is primary insurance as respects  the  owner  and  that   any  other  insurance   maintained  by  owner  is  excess  and noncontributing with  the  insurance  required hereunder.    The requirements for the foregoing insurance shall not derogate from the provisions for indemnification of Landlord by Tenant under Section 4.2.2.2 of this Tenant Work Letter.  In connection with any Second Amendment Tenant Improvements which cost in excess of $1,000,000.00 in the aggregate, Landlord may, in its discretion, require Tenant to obtain a lien and completion bond or some alternate form of security satisfactory to Landlord in an amount sufficient to ensure the lien-free completion of the Second Amendment Tenant Improvements and naming Landlord as a co-obligee.

4.2.3     Governmental       Compliance.           The     Second      Amendment      Tenant Improvements   shall  comply   in  all  respects   with  the  following:     (i) the  Code  and  other  state, 

federal,  city  or quasi-governmental    laws,  codes,  ordinances   and regulations,   as each  may  apply according  to the  rulings  of the  controlling   public  official,  agent  or  other  person;  (ii) applicable standards    of  the   American    Insurance    Association    (formerly,    the   National    Board   of  Fire Underwriters)    and   the   National    Electrical    Code;   and   (iii) building    material   manufacturer's specifications.

4.2.4     Inspection    by Landlord.     Landlord   shall  have   the  right  to  inspect  the Second  Amendment   Tenant  Improvements   at all times,  provided  however,  that Landlord's  failure to inspect  the  Second  Amendment   Tenant  Improvements   shall  in no event  constitute  a waiver  of any  of  Landlord's   rights  hereunder   nor  shall  Landlord's   inspection   of  the  Second  Amendment Tenant  Improvements   constitute   Landlord's   approval  of the  same.   Should  Landlord  disapprove any  portion  of the  Second  Amendment   Tenant  Improvements,   Landlord   shall  notify  Tenant  in writing  of such  disapproval   and  shall  specify  the  items  disapproved.    Any  defects  or deviations in,  and/or  disapproval   by  Landlord   of, the  Second  Amendment   Tenant  Improvements   shall  be rectified  by Tenant  at no expense  to Landlord  (but such cost may be charged  against  the Second Amendment   Tenant   Improvement    Allowance),   provided   however,   that  in  the  event  Landlord determines  that a defect  or deviation  exists  or disapproves   of any matter  in connection  with any portion  of the  Second  Amendment   Tenant  Improvements   and  such  defect,  deviation   or matter might   adversely    affect   the   mechanical,    electrical,    plumbing,    heating,    ventilating    and   air conditioning   or life-safety   systems  of the  Building,  the  structure   or  exterior  appearance   of the Building,  Landlord  may,  take  such action  as Landlord  deems  necessary,   at Tenant's  expense  and without  incurring  any  liability   on  Landlord's   part,  to  correct  any  such  defect,  deviation  and/or matter,  including,  without  limitation,   causing  the cessation  of performance   of the construction  of the  Second  Amendment   Tenant   Improvements   until  such  time  as  the  defect,  deviation   and/or matter  is corrected  to Landlord's   satisfaction.

4.2.5     Meetings.     Commencing   upon  the  execution   of  the  Lease,  Tenant  shall hold  weekly  meetings   at a reasonable   time,  with  the  Architect   and the  Contractor  regarding  the progress   of  the  preparation    of  Construction    Drawings   and  the   construction    of  the   Second Amendment   Tenant   Improvements,    which  meetings   shall  be  held  at  either  the  Building   or  a location  mutually  agreed  upon  by both Landlord  and Tenant,  and Landlord  and/or  its agents shall receive  prior notice  of, and shall have the right to attend,  all such meetings,  and, upon Landlord's reasonable  request,  certain  of Tenant's  Agents  shall  attend  such  meetings.    In addition,  minutes shall  be  taken  at  all  such  meetings,   a  copy  of  which  minutes   shall  be  promptly   delivered  to 

Landlord.   One such meeting each month shall include the review of Contractor's   current request for payment.   Notwithstanding    the  foregoing,   Tenant's  obligation  to hold  any meetings  with the Architect  and the  Contractor   pursuant  to this  Section  4.2.5  above  shall  only  apply  to the extent that (i) any Permits  are required  by an applicable  governmental   authority  in connection  with such Second  Amendment   Tenant  Improvements,   and (ii) such practice  is normal  and customary  in the industry   for   construction    projects    of   similar   scope   and   nature   to   the   applicable    Second Amendment    Tenant   Improvements;     provided   that  Tenant's   obligation   to  notify   Landlord   in connection  with  any  such  meetings,   and Landlord's  right  to attend  such  meetings,  as set forth in this   Section   4.2.5   above,   shall   continue   to   apply   in  connection    with   any   such   meetings, regardless   if Tenant  is,  or  is not,  required   to  hold  any  such  meetings   pursuant  to  this  Section
4.2.5 above.

4.3        Notice of Completion:   Copy of Record Set of Plans.    Within  ten  (10)  days  after completion  of construction   of the Second  Amendment   Tenant  Improvements,   Tenant  shall cause a Notice  of Completion   to be recorded  in the office of the Recorder of the county in which the Building is located in accordance with Section 8182 of the Civil Code of the State of California or any successor statute, and shall furnish a copy thereof to Landlord upon such recordation.  If Tenant fails to do so, Landlord may execute and file the same on behalf of Tenant as Tenant's agent for such purpose, at Tenant's sole cost and expense.  At the conclusion of construction, (i) Tenant  shall  cause  the  Architect  and  Contractor  (A) to  update  the  Approved  Working Drawings as necessary to reflect all changes made to the Approved Working Drawings during the course of construction, (B) to certify to the best of their knowledge that the "record-set" of as-built drawings are true and correct, which certification shall survive the expiration or termination of the Lease, and (C) to deliver to Landlord four (4) sets of copies of such record set of drawings within ninety (90) days following issuance of a certificate of occupancy for the Premises, and (ii) Tenant  shall deliver to  Landlord a copy of all warranties,  guaranties, and operating manuals and information relating to the improvements, equipment, and systems in the Premises.

SECTION 5
MISCELLANEOUS
5.1      Tenant’s Representative.     Tenant has designated Lana Thurman as its sole representative with respect to the matters set forth in this Tenant Work Letter, who shall have full authority and responsibility to act on behalf of the Tenant as required in this Tenant Work Letter.

5.2      Landlord's   Representative.      Landlord has designated   Project   Management Advisors, Inc. ("PMA") as a third party project manager for construction oversight of the Second Amendment Tenant 

Improvements on behalf of Landlord, who, until further notice to Tenant, shall have full authority and responsibility to act on behalf of the Landlord as required in this Tenant Work Letter.

5.3      Time of the Essence in This Tenant Work Letter.  Unless otherwise indicated, all references herein to a "number of days" shall mean and refer to calendar days.   If any item requiring approval is timely disapproved by Landlord, the procedure for preparation of the document and approval thereof shall be repeated until the document is approved by Landlord.

5.4      Tenant's Lease Default.  Notwithstanding any provision to the contrary contained in the Lease, if an event of default as described in the Lease, as amended, or this Tenant Work Letter  has  occurred  at  any  time  on  or  before  the  substantial  completion  of  the  Second Amendment Tenant Improvements, then (i) in addition to all other rights and remedies granted to Landlord pursuant to the Lease, as amended, Landlord shall have the right to withhold payment of  all  or  any  portion  of  the  Second  Amendment  Tenant  Improvement  Allowance  and/or Landlord, and (ii) all other obligations of Landlord under the terms of this Tenant Work Letter shall be forgiven until such time as such default is cured pursuant to the terms of the Lease, as amended.

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