EXHIBIT 10.46

 
SECOND AMENDMENT TO LEASE

This Second Amendment to Lease (“Second Amendment”) is made this 11th day of
July, 2011 (the “Second Amendment Effective Date”) by and between SI 34, LLC, a
California limited liability company, having an address at 10600 N. De Anza
Blvd., Suite 200, Cupertino, California 95014 (“Landlord”), as successor in
interest to Sobrato Interests, a California limited partnership, and Affymetrix,
Inc., a Delaware corporation, as successor in interest by merger to Affymetrix,
Inc., a California corporation (“Tenant”);
 
WITNESSETH

WHEREAS Landlord and Tenant are the current parties to that certain lease dated
July 3, 2002 (the “Original Lease”), as amended by that certain First Amendment
to Lease Agreement dated September 30, 2003, (collectively, the “Existing
Lease”), for the building commonly referred to as 3420 Central Expressway, Santa
Clara, California ("Premises"); and

WHEREAS effective as of the Second Amendment Effective Date Landlord and Tenant
wish to modify the Existing Lease to: (i) extend the Expiration Date; (ii)
specify the Base Monthly Rent installments due during the extended Lease Term;
and (iii) make certain additional modifications to the Existing Lease;

NOW, THEREFORE, in order to effect the intent of the parties as set forth above
and for good and valuable consideration exchanged between the parties, the
Existing Lease is amended as follows:

 
1. The Lease Expiration Date is changed from August 31, 2013 to August 31, 2023.
The period of time commencing September 1, 2013 (the “Extension Commencement
Date”) to August 31, 2023 shall be deemed the “Extension Term.”

 
2. Upon the Extension Commencement Date, Base Monthly Rent shall be paid in
accordance with the following schedule:
 

September 1, 2013 through August 31, 2014
$179,388 per month
September 1, 2014 through August 31, 2015
$184,770 per month
September 1, 2015 through August 31, 2016
$190,313 per month
September 1, 2016 through August 31, 2017
$196,022 per month
September 1, 2017 through August 31, 2018
$201,903 per month
September 1, 2018 through August 31, 2019
$207,960 per month
September 1, 2019 through August 31, 2020
$214,199 per month
September 1, 2020 through August 31, 2021
$220,625 per month
September 1, 2021 through August 31, 2022
$227,243 per month
September 1, 2022 through August 31, 2023
$234,061 per month

235283
 
1

--------------------------------------------------------------------------------

 

 
3. The parties agree that the condition of the Premises existing as of the
Second Amendment Effective Date is as set forth in Exhibit A.   Notwithstanding
paragraph 7 of the Original Lease, all Alterations (including the Initial
Improvements) and installation of equipment by Tenant, which occurred prior to
the Second Amendment Effective Date, and Alterations that Tenant intends to
carry out in the form as set forth in Exhibit B, shall not be subject to removal
at the expiration of the Lease. By execution of this Second Amendment, Landlord
hereby consents to the Alterations substantially in the form as set forth in
Exhibit B.  However, other than as set forth in Exhibit B, all Alterations and
installations of equipment by Tenant which occur  from and after the Second
Amendment Effective Date shall continue to be subject to all of the terms and
conditions of the Lease relating to Alterations and surrender of the Premises,
except that at the time Tenant requests Landlord’s consent to any such
Alterations and installations Tenant may also request that Landlord notify
Tenant in writing when it consents as to whether or not Landlord will require
Tenant to remove such Alterations or equipment at the expiration or earlier
termination of the Lease and cause any damage to the Premises resulting from
such removal to be repaired and restored as described in the Lease, and in such
case if Landlord fails to notify Tenant in writing at the time of granting of
any such consent as to whether or not Landlord will require Tenant to remove
such Alterations or equipment at the expiration of earlier termination or the
Lease and cause any damage to the Premises resulting from such removal to be
repaired and restored as described in the Lease, then Landlord shall be deemed
to have elected to require such removal, repair and restoration.

 
4. As an inducement by Landlord to Tenant to enter into this Second Amendment,
and in consideration for Tenant performing all of its obligations under the
Lease during the Extension Term, Tenant shall not be required to pay Base
Monthly Rent for the period commencing August 1, 2011 and continuing up to and
including March 14, 2012 so long as the Lease is not terminated during the
Extension Term due to Tenant’s default under the Lease. If the Lease terminates
prior to the expiration of the Extension Term due to Tenant’s default, then all
Base Monthly Rent for the period from August 1, 2011 up through and including
March 14, 2012 shall immediately become due and payable by Tenant to Landlord.
All other sums due under the Lease, and as modified by this Second Amendment,
shall remain unchanged.

 
235283
 
2

--------------------------------------------------------------------------------

 

 
5. Landlord and Tenant each represents to the other that it has had no dealings
with any real estate broker or agent in connection with the negotiation of this
Second Amendment except for CBRE (the “Broker”), and that it knows of no other
real estate broker or agent who is entitled to a commission or finder’s fee in
connection with this Second Amendment.  Each party shall indemnify, protect,
defend, and hold harmless the other party against all claims, demands, losses,
liabilities, lawsuits, judgments, and costs and expenses (including reasonable
attorney fees) for any leasing commission, finder’s fee, or equivalent
compensation alleged to be owing on account of the indemnifying party’s dealings
with any real estate broker or agent other than the Broker. Landlord shall pay
the Broker a commission by reason of this Second Amendment pursuant to a
separate agreement between Landlord and the Broker.

6.  
Notwithstanding anything to the contrary in the Existing Lease, Landlord and
Tenant hereby agree that the Existing Lease shall be modified and supplemented
as follows effective as of the Second Amendment Effective Date:

(a)  
Option to Extend Lease Term.  

(i)  
Paragraph 36(A) of the Original Lease shall be modified by deleting the first
three (3) sentences and replacing them with the following:  “Landlord hereby
grants to Tenant, upon and subject to the terms and conditions set forth in this
paragraph, two (2) options (each an “Option”) to extend the Lease Term,  each
for an additional term of five (5) years (each, an “Option Term”), with the
first Option Term commencing immediately following the then scheduled Expiration
Date, and the second Option Term commencing immediately following the then
scheduled expiration of the first Option Term.  Each Option Term shall be
exercised, if at all, by written notice to Landlord no earlier than eighteen
(18) months and no later than twelve (12) months prior to the expiration date of
the then current term. If Tenant fails to timely exercise the Option for the
first Option Term, the Option for the second Option Term shall automatically
terminate and be of no further force or effect.  If Tenant timely exercises an
Option for an Option Term, each of the terms, covenants and conditions of this
Lease except this paragraph shall apply during such Option Term as though the
expiration date of such Option Term was the date originally set forth herein as
the Expiration Date, provided that the Base Monthly Rent to be paid shall be
ninety-five percent (95%) of the Fair Market Rental, as hereinafter defined, for
the Premises for such Option Term.”

 
235283
 
3

--------------------------------------------------------------------------------

 

(ii)  
The definition of “Fair Market Rental” in the Original Lease is replaced by the
following:  “As used herein, the term “Fair Market Rental” is defined as the
rental and all other monetary payments, including any escalations and
adjustments thereto (including without limitation Consumer Price Indexing) that
Landlord could obtain during the Option Term from a third party desiring to
lease the Premises, based upon the (i) current use and other potential uses of
the Premises, as determined by the rents then obtainable for new leases of space
comparable in age and quality to the Premises in the same real estate submarket
as the Building and (ii) the credit standing and financial stature of the
Tenant. The appraisers shall be advised that the Base Monthly Rent to be paid by
Tenant during the Option Term will be ninety five percent (95%) of the Fair
Market Rental determined by the appraisers for the Premises, and the appraisers
shall be instructed that in determining Fair Market Rental the appraisers shall
not factor in any discount for costs which Landlord will not incur in the event
Tenant exercises its Option such as (i) brokerage commissions, (ii) tenant
improvement or relocation allowances, (iii) vacancy costs, and (iv) other
concessions or inducements.”  

(iii)  
The last two (2) sentences of Original Lease paragraph 36(B) are hereby amended
to read as follows:  “If the amount of Fair Market Rental as finally determined
pursuant to paragraph 36(C) below is greater than Landlord’s determination,
Tenant shall pay to Landlord the difference between the amount paid by Tenant
and the amount that is ninety five percent (95%) of the Fair Market Rental
determined by Paragraph 36(C) below.  If the amount of Fair Market Rental as
finally determined pursuant to Paragraph 36(C) below is less than Landlord’s
determination, the difference between the amount paid by Tenant and the amount
that is ninety five percent (95%) of the Fair Market Rental as so determined in
Paragraph 36(C) below shall be credited against the next installments of rent
due from Tenant to Landlord hereunder.”

  
(iv)  
All other terms and conditions of paragraph 36 of the Original Lease shall
continue to apply.  Paragraph 36(A) as amended herein, shall supersede all prior
amendments of paragraph 36(A).

 
 
235283
 
4

--------------------------------------------------------------------------------

 

(b)  
Maintenance of Premises.  The parties agree that Landlord shall repair and
maintain existing, and install additional, exterior lighting in the Project
(outside of the Premises) as soon as practicable after the Second Amendment
Effective Date (“Exterior Lighting Repair”).  The parties agree that the entire
cost of such Exterior Lighting Repair shall be included as Common Area Costs,
Tenant shall pay Tenant’s Allocable Share of the costs of such Exterior Lighting
Repair in accordance with the Lease, and Tenant’s Allocable Share shall not be
subject to the Seventy Five Thousand Dollar ($75,000) cap described in
subparagraph (d) immediately below.

(c)  
Capital Replacement.  Notwithstanding the provisions of paragraph 10 of the
Original Lease, except for the replacement of the HVAC systems (as to which
Tenant shall bear all of the costs of replacement of HVAC systems that cannot be
repaired or that are beyond their useful lives during the term of the Lease,
including all repairs and alterations required to accommodate the new HVAC
systems),  and except for the Exterior Lighting Repair costs (which shall be
governed by paragraph 6(b) of this Second Amendment), in the event any other
single replacement under Original Lease paragraph 10(B) or 10(E) would be
properly capitalized under generally accepted accounting principles, then (i) as
to such a replacement under Original Lease paragraph 10(B), if Tenant’s
Allocable Share of the cost of such replacement is more than Seventy Five
Thousand Dollars ($75,000), then Tenant shall only be required to pay the first
Seventy Five Thousand Dollars ($75,000) of Tenant’s Allocable Share of such cost
plus that portion of the remaining portion of Tenant’s Allocable share of such
cost equal to the product of such remaining portion multiplied by a fraction,
the numerator of which is the number of years remaining in the Lease Term
(prorated as to partial years), and the denominator of which is the useful life
(in years, and prorated as to partial years) of the replacement; and (ii) as to
such a replacement under Original Lease paragraph 10(E), if such replacement
costs in excess of Seventy Five Thousand Dollars ($75,000), Tenant shall only be
required to pay the first Seventy Five Thousand Dollars ($75,000) of the cost
plus that portion of the remaining cost equal to the product of such total
remaining cost multiplied by a fraction, the numerator of which is the number of
years remaining in the Lease Term (prorated as to partial years), and the
denominator of which is the useful life (in years, and prorated as to partial
years) of the replacement.

 
7. This Second Amendment may be executed in multiple counterparts, each of which
shall be deemed an original and all of which together shall constitute one and
the same document.

 
235283
 
5

--------------------------------------------------------------------------------

 

 
8. Except as hereby amended, the Existing Lease and all of the terms, covenants
and conditions thereof shall remain unmodified and in full force and effect.  In
the event of conflict or inconsistency between the terms and provisions of this
Second Amendment and the terms and provisions of the Existing Lease, the terms
and provisions of this Second Amendment shall prevail.  Capitalized terms used
and not defined herein shall have the meanings ascribed to such terms in the
Existing Lease.  From and after the Second Amendment Effective Date, “Lease”
shall mean the Existing Lease as amended by this Second Amendment.

 
[Signatures appear on the next page]

 
 
235283
 
6

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have set their hands to this Second
Amendment as of the day and date first above written.

Landlord                                                                                                                        
Tenant
SI 34,
LLC,                                                                                                                     
Affymetrix, Inc.,
a California limited liability
company                                                                        
a Delaware corporation

By:Sobrato Interests
1,                                                                                          
By: /s/Timothy C. Barabe                     
a California limited
partnership                                                                      
Timothy C. Barabe
Its:Sole
Member                                                                                                       Its:
Executive Vice President and Chief Financial Officer
 
           By:Sobrato Development Companies, LLC,
                      a California limited liability company
                      Its:General Partner
 
                      By:     /s/ John Michael Sobrato                       
                                 John Michael Sobrato
                                 Its:Manager
 
 
 
235283
 
7

--------------------------------------------------------------------------------

 

Exhibit A

Existing First and Second Floor Diagrams
 

 
235283
 
 

--------------------------------------------------------------------------------

 

Exhibit B

Diagram of Proposed Alterations to Second Floor
 
 
 
 
 
 

--------------------------------------------------------------------------------