SECOND AMENDMENT TO LEASE

Exhibit 10.9

SECOND AMENDMENT TO LEASE

THIS SECOND AMENDMENT TO LEASE (this "Second Amendment") is made as of April 4, 2011, by and between ARE-SEATTLE NO. 10, LLC, a Delaware limited liability company ("Landlord"), and PHASERX INC., a Delaware corporation ("Tenant").

RECITALS

A.           Landlord and Tenant entered into that certain Lease Agreement dated as of February 9, 2010, as amended by that certain First Amendment to Lease dated as of July 1, 2010 (as amended, the "Lease"). Pursuant to the Lease, Tenant leases certain premises consisting of approximately 11,291 rentable square feet ("Original Premises") in a building located at 410 West Harrison, Seattle, Washington. The Premises are more particularly described in the Lease. Capitalized terms used herein without definition shall have the meanings defined for such terms in the Lease.

B.        Tenant has elected to expand the Original Premises to include the Expansion Space (as defined in Section 39(a)).

C.         Landlord and Tenant desire, subject to the terms and conditions set forth below, to amend the Lease to, among other things, expand the size of the Original Premises by adding the Expansion Space consisting of approximately 6,236 rentable square feet.

NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein by this reference, the mutual promises and conditions contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:

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Landlord shall provide Tenant at least thirty (30) days advance notice of its proposed date of delivery of the Expansion Space (“Proposed Delivery Date”). Tenant may elect, at Tenant’s sole cost and expense, to perform an environmental inspection of the Expansion Space (“Environmental Inspection”) prior to the Proposed Delivery Date. Following Tenant’s written notice to Landlord of its election to conduct the Environmental Inspection (“Inspection Notification”), Landlord hereby agrees to permit Tenant access to the Expansion Space for such Environmental Inspection at least fifteen (15) days prior to the Proposed Delivery Date (“Initial Access Date”). Landlord shall not be required to provide access to the Expansion Space for the Environmental Inspection prior to August 15, 2011 so long as the Proposed Delivery Date is on or after September 1, 2011. Such Environmental Inspection shall be coordinated with Landlord and shall comply with the Lease and all other reasonable restrictions and conditions Landlord may impose. Tenant’s Inspection Notification shall include notification to Landlord of the date upon which Tenant desires to commence the Environment Inspection of the Expansion Premises (“Desired Access Date”); provided, however, that in no event shall the Desired Access Date be earlier than the Initial Access Date. All such access shall be during normal business hours or at such other times as are reasonably designated by Landlord.

The "Expansion Space Commencement Date" shall be the date Landlord actually delivers the Expansion Space to Tenant. Upon request of Landlord, Tenant shall execute and deliver a written acknowledgment of the Expansion Space Commencement Date when the same is established in a form substantially similar to the form of the "Acknowledgement of Commencement Date" attached to the Lease as Exhibit D; provided, however, Tenant’s failure to execute and deliver such acknowledgment shall not affect Landlord’s rights hereunder.

Except as set forth in this Second Amendment, if applicable: (i) Tenant shall accept the Expansion Space in their condition as of the Expansion Space Commencement Date; (ii) Landlord shall have no obligation for any defects in the Expansion Space; and (iii) Tenant’s taking possession of the Expansion Space shall be conclusive evidence that Tenant accepts the Expansion Space and that the Expansion Space were in good condition at the time possession was taken. As of the Expansion Space Commencement Date, the defined term “Premises” in the Lease shall include the Expansion Space and the terms of the Lease including, without limitation, Landlord’s warranty obligations under Sections 30(i) and 42, shall apply to the Expansion Space. Landlord shall, at Landlord’s sole cost and expense, be responsible for the compliance of the Premises (including the Expansion Space) with Legal Requirements as of the Commencement Date.

Except with respect to the boiler serving the Building (any replacement of which shall be undertaken by Landlord as part of Operating Expenses), commencing on the Expansion Space Commencement Date through December 31, 2012, Landlord shall, at its sole cost and expense (which shall not constitute an Operating Expense), be responsible for any replacements that are required to be made to the mechanical, plumbing and electrical systems serving the Expansion Space, except to the extent Tenant was responsible for the cause of such replacement, in which case Tenant shall pay the cost. Any repairs and maintenance of the mechanical, plumbing and electrical systems serving the Expansion Space shall be undertaken by Landlord as part of Operating Expenses.

Tenant agrees and acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty with respect to the condition of all or any portion of the Expansion Space, and/or the suitability of the Expansion Space for the conduct of Tenant’s business and Tenant waives any implied warranty that the Expansion Space are suitable for the Permitted Use.

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"Premises: That portion of the Building containing approximately 17,527 rentable square feet, consisting of (i) the “Original Premises” consisting of approximately 11,291 rentable square feet, and (ii) the “Expansion Space” consisting of approximately 6,236 rentable square feet, all, as shown on Exhibit A. The Original Premises and the Expansion Space shall be collectively referred to herein as the “Premises”.

As of the Expansion Space Commencement Date, Exhibit A to the Lease shall be amended to include Exhibit I attached to the Lease.

“Base Term: A term (i) beginning, with respect to the Original Premises, on the Commencement Date, and with respect the Expansion Space on the Expansion Space Commencement Date, and (ii) ending, with respect to the entire Premises, on September 30, 2015.”

"Rentable Area of the Premises: 17,527 sq. ft."

"Tenant’s Share of Operating Expenses of Building: 54.28%”

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Tenant shall continue to pay Operating Expenses with respect to the Original Premises as provided for in the Lease. If the Expansion Space Commencement Date occurs on or before December 31, 2011, Tenant shall commence paying Operating Expenses with respect to the Expansion Space on the Expansion Space Commencement Date; provided, however, that commencing on such date through December 31, 2011, the Operating Expenses payable by Tenant with respect to the Expansion Space shall be capped at $13.25 per rentable square foot of the Expansion Space per annum. So long as the Expansion Space Commencement Date occurs on or before January 1, 2012, Tenant shall commence paying the full amount of Operating Expenses payable with respect the Expansion Space on January 1, 2012. If the Expansion Space Commencement Date occurs after January 1, 2012, Tenant shall commence paying the full amount of Operating Expenses payable with respect the Expansion Space on the Expansion Space Commencement Date. Tenant’s Share of Operating Expenses of Building with respect to the Expansion Space is 19.30%.

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During the course of design and construction of the Expansion Space Tenant Improvements, Landlord shall reimburse Tenant for the cost of the Expansion Space Tenant Improvements once a month against a draw request in Landlord's standard form, containing evidence of payment of the applicable costs and such certifications, lien waivers (including a conditional lien release for each progress payment and unconditional lien releases for the prior month's progress payments), inspection reports and other matters as Landlord customarily obtains, to the extent of Landlord's approval thereof for payment, no later than 30 days following receipt of such draw request. Upon completion of the Expansion Space Tenant Improvements (and prior to any final disbursement of the Expansion Space TI Allowance) Tenant shall deliver to Landlord the following items: (i) sworn statements setting forth the names of all contractors and subcontractors who did work on the Expansion Space Tenant Improvements and final lien waivers from all such contractors and subcontractors; and (ii) "as built" plans for the Expansion Space Tenant Improvements. The Expansion Space TI Allowance shall only be available for use by Tenant for the construction of the Expansion Space Tenant Improvements in the Expansion Space for a period of 12 months following the Expansion Space Rent Commencement Date and any portion of the Expansion Space TI Allowance for which verifiable costs have not been incurred by Tenant on or before the expiration of such 12 month period shall be forfeited and shall not be available for use by Tenant.

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a.           This Second Amendment is the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral and written agreements and discussions. This Second Amendment may be amended only by an agreement in writing, signed by the parties hereto.

b.           This Second Amendment is binding upon and shall inure to the benefit of the parties hereto, their respective agents, employees, representatives, officers, directors, divisions, subsidiaries, affiliates, assigns, heirs, successors in interest and shareholders.

c.           Tenant acknowledges that it has read the provisions of this Second Amendment, understands them, and is bound by them. Time is of the essence in this Second Amendment.

d.           This Second Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the same instrument. The signature page of any counterpart may be detached therefrom without impairing the legal effect of the signature(s) thereon provided such signature page is attached to any other counterpart identical thereto except having additional signature pages executed by other parties to this Second Amendment attached thereto.

e.           Except as amended and/or modified by this Second Amendment, the Lease is hereby ratified and confirmed and all other terms of the Lease shall remain in full force and effect, unaltered and unchanged by this Second Amendment. In the event of any conflict between the provisions of this Second Amendment and the provisions of the Lease, the provisions of this Second Amendment shall prevail. Whether or not specifically amended by this Second Amendment, all of the terms and provisions of the Lease are hereby amended to the extent necessary to give effect to the purpose and intent of this Second Amendment.

[Signatures are on the next page]

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IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment as of the day and year first above written.

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