Exhibit 10.42
EXECUTION VERSION
LEASE
(Parcel 3: 9865 Towne Centre Drive, San Diego, California)
by and between
BMR-9885 TOWNE CENTRE DRIVE LLC,
a Delaware limited liability company
and
ILLUMINA, INC.,
a Delaware corporation

 

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LEASE
(Parcel 3: 9865 Towne Centre Drive, San Diego, California)
     THIS LEASE (this “Lease”) is entered into as of this 26th day of January,
2007 (the “Execution Date”), by and between BMR-9885 Towne Centre Drive LLC, a
Delaware limited liability company (“Landlord”), and Illumina, Inc., a Delaware
corporation (“Tenant”).
RECITALS
     A. WHEREAS, Landlord is the owner of three (3) parcels of real property
located in the City of San Diego, County of San Diego, State of California,
legally described as Parcels 1, 2 and 3 of Parcel Map 18286 filed with the San
Diego County Recorder on June 21, 1999 (together with any easements and
appurtenances thereto, the “Initial Illumina Lease Land”). The Original Illumina
Lease Land consists of approximately 10.781 gross acres and is improved with two
(2) buildings and an atrium on Parcels 1 and 2 (the “Existing Parcel 1 and
Parcel 2 Buildings”) and one (1) building on Parcel 3 (the “Diversified
Building” and, collectively with the Existing Parcel 1 and Parcel 2 Buildings,
the “Original Illumina Lease Buildings”) consisting of 115,870 square feet of
space and commonly known as 9855 through 9885 (and consecutive addresses), Towne
Centre Drive, San Diego, California. The Original Illumina Lease Land and the
Original Illumina Lease Buildings are shown on the site plan attached hereto as
Exhibit A and made a part of this Lease. The Original Illumina Lease Land and
the Original Illumina Lease Buildings are collectively referred to as the
“Original Illumina Lease Premises.”
     B. WHEREAS, On July 6, 2000, Landlord (as successor in interest to Tenant)
and Diversified Eastgate Pointe, LLC, a California limited liability company (as
successor in interest to Matsix Investments, Inc., “Diversified”), entered into
that certain Eastgate Pointe Building “D” Lease (the “Diversified Lease”),
pursuant to which Diversified leases approximately 6,600 rentable square feet of
space located in the Diversified Building (the “Diversified Space”);
     C. WHEREAS, On August 18, 2004, Tenant and Landlord entered into that
certain Single Tenant Lease (the “Original Illumina Lease”), pursuant to which
Landlord leases the Original Illumina Lease Premises to Tenant;
     D. WHEREAS, Concurrently herewith, Landlord and Tenant are amending and
restating the Original Illumina Lease (such amended and restated lease, the
“Illumina Lease”) to, among other things, (i) exclude the Parcel 3 Land
(including the Diversified Building) from the “Premises” covered by the Illumina
Lease; (ii) eliminate Tenant’s right of first refusal to lease space in the
Building (as defined below); (iii) eliminate the development fee; and
(iv) extend the term of the Original Illumina Lease to be co-terminous with the
term of this Lease;
     E. WHEREAS, Landlord intends to construct an additional building totaling
approximately 83,866 rentable square feet on the Property (the “Expansion
Building” and, together with the Diversified Building, the “Buildings”);
     F. WHEREAS, Landlord may subdivide (the “Subdivision”) Parcel 3 so that it
will consist of two lots that may be legally conveyed in accordance with
California’s Subdivision Map Act as follows: (a) the portion of Parcel 3 on
which the Expansion Building is located, and to be more particularly defined by
Landlord in connection with the Subdivision (the “Subdivided Property”), and
(b) the portion of Parcel 3 excluding the Subdivided Property. The term
“Property” shall mean Parcel 3, together with all landscaping, parking
facilities and other improvements and appurtenances related thereto, including
the Buildings, the Common Areas, the Premises (as defined below) and the
Diversified Space; and
     G. WHEREAS, Landlord wishes to lease to Tenant, and Tenant desires to lease
from Landlord, the Premises (as defined below) pursuant to the terms and
conditions of this Lease, as detailed below.
AGREEMENT
     NOW, THEREFORE, Landlord and Tenant, in consideration of the mutual
promises contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound, agree as follows:

 

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1. Lease of Premises.
     1.1. Effective on the Execution Date, Landlord hereby leases to Tenant, and
Tenant hereby leases from Landlord, (a)approximately 4,400 rentable square feet
of space located in the Diversified Building (the “Diversified Building
Premises”), and (b) upon the satisfaction of the conditions set forth in this
Section 1.1, the interior portion of the Expansion Building described below (the
“Expansion Premises” and, together with the Diversified Building Premises, the
“Premises”): (a) from and after the Phase 1 Commencement Date (as defined
below), 40,866 rentable square feet located in the Expansion Building (the
“Phase 1 Premises”), (b) from and after the Phase 2 Commencement Date (as
defined below), 21,500 rentable square feet located in the Expansion Building
(the “Phase 2 Premises”), and (c) from and after the Phase 3 Commencement Date
(as defined below), the remainder of the interior space located in the Expansion
Building (including all elevator shafts and stairwells) (the “Phase 3
Premises”), subject to and with the benefit of the terms, covenants, conditions
and provisions of this Lease. The term “Phase” shall mean and refer to each of
the Phase 1 Premises, the Phase 2 Premises and the Phase 3 Premises. On or
before Substantial Completion of the Landlord’s Construction Work (as defined
below), Tenant and Landlord shall mutually agree to: (1) the location of the
Phase 1 Premises, and shall attach a diagram of its location to this Lease as
Exhibit C; (2) the location of the Phase 2 Premises, and shall attach a diagram
of its location to this Lease as Exhibit D; and (3) the location of the Phase 2
Premises, and shall attach a diagram of its location to this Lease as Exhibit E.
In the event the parties are unable to agree on the location of each of the
Phase 1 Premises, the Phase 2 Premises and the Phase 3 Premises by the
Substantial Completion of the Landlord’s Construction Work, Landlord shall
reasonably designate the location of each of the Phase 1 Premises and the Phase
2 Premises, and shall attach: (x) a diagram of the location of the Phase 1
Premises to this Lease as Exhibit C, (y) a diagram of the location of the Phase
2 Premises to this Lease as Exhibit D, and (z) a diagram of the location of the
Phase 3 Premises to this Lease as Exhibit E.
     1.2. Tenant shall have, as appurtenant to the Premises, the exclusive right
of tenants of the Buildings (including any assignees, sublessee and assigns) to
use, and permit its invitees to use in common with Landlord and others, the
elevators, walkways, access roads, and driveways necessary for access to the
Premises and the parking areas, loading areas, pedestrian sidewalks, landscaped
areas, trash enclosures, recreation areas and other areas and facilities, if
any, which are located on the Property (the “Common Areas”). Tenant’s use of the
Common Areas shall at all times be in compliance with all Applicable Laws and
shall be consistent with and in connection with Tenant’s Permitted Use as set
forth in Section 2.8. Tenant shall use the Common Areas only in such a manner as
will not interfere with the use of, and access to, the Diversified Space and the
parking spaces to be provided to the occupants thereof under the Diversified
Lease.
     1.3. This Lease and all rights and remedies of Tenant hereunder are subject
and subordinate to Section 2(e) (Common Areas), Section 2(j) (Parking),
Section 2(k) (Premises), Section 9 (Services and Utilities), Article 30 (Quiet
Enjoyment) and Article 32 (Signage & Sign Control) of the Diversified Lease.
2. Basic Lease Provisions. For convenience of the parties, certain basic
provisions of this Lease are set forth herein. The provisions set forth herein
are subject to the remaining terms and conditions of this Lease and are to be
interpreted in light of such remaining terms and conditions.
     2.1. Binding. This Lease shall take effect upon the Execution Date and,
except as specifically otherwise provided within this Lease, each of the
provisions hereof shall be binding upon and inure to the benefit of Landlord and
Tenant from the Execution Date.
     2.2. Rentable Areas of the Premises. The term “Rentable Area” of (i) the
Diversified Building Premises shall be deemed to be 4,400 square feet; (ii) the
Phase 1 Premises shall be deemed to be 40,866 square feet, (iii) the Phase 2
Premises shall be deemed to be 21,500 square feet, (iv) the Phase 3 Premises
shall be deemed to be 21,500 square feet, and (v) the Expansion Premises shall
be deemed to be 83,866 square feet, even if it is determined upon final
measurement of the Diversified Building Premises, such Phase or the Expansion
Premises that the Rentable Area of the Diversified Building Premises, such Phase
or the Expansion Premises is smaller or larger than the amount set forth in this
Section 2.2.

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     2.3. Basic Annual Rent.
          2.3.1 Diversified Building Premises. Initial monthly and annual
installment of Basic Annual Rent for the Diversified Building Premises (the
“Diversified Building Premises Basic Annual Rent”) as of the Execution Date is
set forth on Schedule 1 attached hereto.
          2.3.2 Expansion Premises. Initial monthly and annual installments of
Basic Annual Rent for the Expansion Premises (the “Expansion Premises Basic
Annual Rent” and, together with the Diversified Building Premises Basic Annual
Rent, the “Basic Annual Rent”) as of the Phase 1 Commencement Date, subject to
adjustment in accordance with Section 6.1, shall be as follows:

                                              Per Rentable                      
  S.F. of                 Rentable S.F. of   Phase 1           Total     Phase 1
Premises   Premises   Total Annual   Monthly
Phase 1 Premises
    40,866     $ 2.80     $ 1,373,097.60     $ 114,424.80  

     2.4. Estimated Delivery Dates. The Estimated Delivery Dates for each Phase
of the Premises are as follows:
          2.4.1 Phase 1 Estimated Delivery Date. October 1, 2008.
          2.4.2 Phase 2 Estimated Delivery Date. Twelve (12) months after the
Phase 1 Commencement Date.
          2.4.3 Phase 3 Estimated Delivery Date. Twelve (12) months after the
Phase 2 Commencement Date.
     2.5. Commencement Date: Subject to Section 5.2, the Commencement Date shall
be determined as follows:
          2.5.1 Diversified Building Premises Commencement Date: The Execution
Date;
          2.5.2 Phase 1 Commencement Date: Thirty (30) days after the later of:
(a) the Phase 1 Estimated Delivery Date, or (b) Substantial Completion of
Landlord’s Construction Work and the Tenant Improvements (each as defined
below);
          2.5.3 Phase 2 Commencement Date: Thirty (30) days after the earlier
of: (a) the Phase 2 Estimated Delivery Date, or (b) the date Tenant actually
occupies any portion of the Phase 2 Premises to conduct business therein
(including storage); and
          2.5.4 Phase 3 Commencement Date: Thirty (30) days after the earlier
of: (a) the Phase 3 Estimated Delivery Date, or (b) the date Tenant actually
occupies any portion of the Phase 3 Premises to conduct business therein
(including storage).
     2.6. Expiration Date: Fifteen (15) years from the Phase 1 Commencement
Date; provided, however, Tenant shall have the option to extend this Lease as
provided in Article 42.
     2.7. Security Deposit: An amount equal to $40,836.75, which amount shall be
increased accordingly as occupancy of the Expansion Building by Tenant is
increased as provided in Article 10.
     2.8. Permitted Use: (a) Laboratory research, administration,
pharmaceutical, diagnostic, office, manufacturing and related health care and
research uses in conformity with Applicable Laws (as defined below); and
(b) such other legally permitted uses as are approved by Landlord, which
approval shall not be unreasonably withheld or delayed.
     2.9. Address for Rent Payment:
BMR-9885 Towne Centre Drive LLC
Unit E
P.O. Box 51918
Los Angeles, CA 90051-6218

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     2.10. Address for Notices to Landlord:
BMR-9885 Towne Centre Drive LLC
17140 Bernardo Center Drive, Suite 222
San Diego, California 92128
Attn: General Counsel/Real Estate
     2.11. Address for Notices to Tenant:
Illumina, Inc.
9885 Towne Centre Drive
San Diego, CA 92121
Attn: Christian Henry
     2.12. The following Exhibits are attached hereto and incorporated herein by
reference:

     
Exhibit A
  Original Illumina Lease Premises
Exhibit B
  Intentionally Omitted
Exhibit C
  Phase 1 Premises
Exhibit D
  Phase 2 Premises
Exhibit E
  Phase 3 Premises
Exhibit F
  Acknowledgement of Commencement Date and Expiration Date
Exhibit G
  Tenant’s Personal Property
Exhibit H
  Rules and Regulations
Exhibit I
  Form of Estoppel Certificate
Exhibit J
  Work Letter
Exhibit K
  Form of Letter of Credit
Exhibit L
  Reciprocal Easement Agreement
Exhibit M
  Form of Subordination, Non-Disturbance and Attornment Agreement
 
   
Schedule 1
  Diversified Building Premises Rent Schedule

3. Term. The actual term of this Lease (the “Term”) shall be the period from the
Execution Date through the Expiration Date, subject to earlier termination of
this Lease as provided herein.
4. Landlord’s Construction Work and Tenant Improvements.
     4.1. Shell and Core Construction of Expansion Building.
          4.1.1 Commencement of Landlord’s Construction Work. On or before
June 1, 2007, Landlord shall, at Landlord’s sole cost and expense, cause
Landlord’s contractor, Reno Contracting or such replacement thereof as Landlord
may make from time to time with Tenant’s approval, which approval shall not be
unreasonably withheld or delayed (“Contractor”), to commence and thereafter
diligently prosecute the construction of the shell and core of the Expansion
Building to completion pursuant to the Approved CW Plans (as defined in the Work
Letter), subject only to CW Permitted Changes (as defined in the Work Letter),
(all such construction, collectively, “Landlord’s Construction Work”).
Landlord’s Construction Work shall be performed in a workmanlike manner, and in
compliance with all Applicable Laws. The commencement and completion of
Landlord’s Construction Work shall be subject to delays resulting from acts of
Tenants, acts of God; acts of terrorism; adverse weather conditions; war;
invasion; insurrection; acts of a public enemy; terrorism; riot; mob violence;
civil commotion; sabotage; labor disputes; general shortage of labor, materials,
facilities, equipment or supplies on the open market; delay in transportation;
delays caused by new, or changes to existing, laws, rules, regulations or orders
of any Governmental Authority; moratorium or other governmental action;
inability to obtain permits or approvals, including, without limitation, city
and public utility approvals beyond the time periods that generally prevail for
obtaining such permits and approvals; the acts or inaction of the contractor and
subcontractors, if any; or any other cause beyond the reasonable control of
Landlord, financial ability excepted, whether similar or dissimilar to the
foregoing (collectively, “Force Majeure”).

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          4.1.2 Completion of Construction. Landlord’s Construction Work shall
be deemed “Substantially Complete” or there shall be “Substantial Completion” if
Landlord has (a) completed all of Landlord’s Construction Work identified on the
Approved CW Plans (subject only to such incomplete or defective work as will not
materially or adversely impact Tenant’s continuous and uninterrupted use of the
Expansion Premises for its Permitted Use (collectively, the “Punchlist Items”))
and (b) received a temporary or permanent certificate of occupancy from the
applicable municipal authority(ies) and a certificate of substantial completion
from the architect.
          4.1.3 Warranties. Landlord shall use commercially reasonable efforts
(but without any obligation to commence or pursue any litigation) to cause
Contractor to complete with reasonable promptness the Punchlist Items and repair
with reasonable promptness all defects in the construction of Landlord’s
Construction Work in accordance with the Approved CW Plans as to which Tenant
notifies Landlord in writing (which notice Tenant shall give within thirty
(30) days following the Phase 1 Commencement Date). Notwithstanding the
foregoing, Landlord shall cause all Punchlist Items that reasonably can be
completed within thirty (30) days after Substantial Completion of the Landlord’s
Construction Work to be completed within thirty (30) days after Substantial
Completion of the Landlord’s Construction Work. Except for such Punchlist Items
and except for latent defects and non-compliance of Landlord’s Construction Work
with Applicable Laws, Tenant shall, subject to the terms hereof, be deemed to
have accepted the Expansion Premises in the condition delivered to it “As Is,”
provided, however, except as to those items that Landlord is required to correct
pursuant to this Section, Landlord shall partially assign to Tenant (but without
prejudice to any of Landlord’s rights of enforcement) all warranties that it has
received under the construction contract, any subcontract, or from any material
supplier. Notwithstanding the foregoing, if Tenant notifies Landlord within the
period beginning on Substantial Completion of the Landlord’s Construction Work
and continuing through the date that is twelve (12) months thereafter (the “CW
Warranty Period”), of (a) latent defects in the construction of the Landlord’s
Construction Work; or (b) non-compliance of Landlord’s Construction Work with
Applicable Laws, then as Landlord’s sole and exclusive obligation with respect
thereto, Landlord shall cause such latent defect or non-compliance promptly to
be remedied. All warranty claims shall be barred and shall lapse unless such
claim is made in writing to Landlord, with a description of the claim made, on
or before the expiration of the CW Warranty Period.
     4.2. Tenant Improvements.
          4.2.1 Tenant Improvements. Landlord shall cause the Contractor to
commence and thereafter diligently prosecute the construction of the tenant
improvements in the Expansion Building pursuant to the Work Letter (the “Tenant
Improvements”). The Tenant Improvements shall be performed in a workmanlike
manner and in compliance with all Applicable Laws and substantially in
compliance with the Approved TI Plans (as defined in the Work Letter), subject
to minor deviations that do not alter the type, scope and quality of the Tenant
Improvements depicted on the Approved TI Plans. The portion of the TI Costs for
which Landlord is responsible (the “TI Allowance”) shall not exceed (subject to
the terms hereof) the TI Allowance Amount (as defined below). “TI Costs” means
all Tenant Delay Costs (as defined below) and costs of the Tenant Improvements
(the “TI Costs”), including the costs of (i) construction, (ii) construction
management by Landlord (which costs shall be stipulated to equal one and
one-half percent (1.5%) of the cost of the Tenant Improvements, including the
Excess Cost (as defined below)) (the “Construction Management Fee”), (iii) space
planning, architect, engineering and other related services, (iv) costs and
expenses for labor, material, equipment and fixtures, and (v) building permits
and other taxes, fees, charges and levies by governmental and quasi-governmental
agencies for permits or for inspections of the Tenant Improvements.
Notwithstanding the foregoing, in no event shall the TI Allowance be used for:
(w) the purchase of any furniture, personal property or other non-building
system equipment, (x) the cost of work that is not authorized by the Approved TI
Plans (subject to any TI Change) or otherwise approved in writing by Landlord,
(y) costs resulting from any default by Tenant of its obligations under this
Lease, or (z) costs that are recoverable or reasonably recoverable by Tenant
from a third party (e.g., insurers, warrantors or tortfeasors). The “TI
Allowance Amount” shall be Forty-Seven and 15/100 Dollars ($47.15) per rentable
square foot of the Expansion Building, plus the amount of any Additional
Allowance that Tenant elects to use to pay the cost of the Tenant Improvements.

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          4.2.2 In the event the estimated total TI Costs (the “Estimated TI
Costs”) exceeds the TI Allowance Amount, Tenant shall pay such overage, as
reasonably estimated by Landlord from time to time (the “Excess Cost”), as the
work progresses as follows: on or before the tenth (10th) day of each month,
Landlord shall deliver to Tenant an application for reimbursement, accompanied
by reasonable documentary evidence of the construction costs of such Tenant
Improvements incurred since the last application for reimbursement. On or before
the tenth (10th) day following delivery of such application for reimbursement,
Tenant shall pay to Landlord an amount that (when added to any prior
reimbursements of Excess Costs by Tenant) will equal (a) a fraction, the
numerator of which is the amount of TI Costs incurred prior to the date of the
application for reimbursement, and the denominator of which is the Estimated TI
Costs, times (b) the Excess Cost (the “Tenant Reimbursement”). In the event the
TI Allowance and the estimated Excess Cost are not sufficient to cover the
actual TI Costs, including all approved change orders, Landlord shall adjust the
Excess Cost accordingly.
          4.2.3 Architects and Consultants. The architect, engineering
consultants, design team, general contractor and subcontractors responsible for
the construction of the Tenant Improvements shall be selected pursuant to the
procedures set forth in the Work Letter. Subject to the terms of the Work
Letter, Tenant hereby approves of Ferguson Pape Baldwin Architects as Landlord’s
architect and Reno Contracting as Landlord’s general contractor.
          4.2.4 Completion of Tenant Improvements. The Tenant Improvements shall
be deemed “Substantially Complete” or there shall be “Substantial Completion” if
(i) Landlord has completed, in compliance with all Applicable Laws, all of the
Tenant Improvements identified on and substantially in accordance with the
Approved TI Plans (subject only to the Punchlist Items and minor deviations that
do not alter the type, scope and quality of the Tenant Improvements depicted on
the Approved TI Plans) and Tenant is provided with continuous and uninterrupted
use of the applicable portion of the Expansion Premises and the Expansion
Building for Tenant’s Permitted Use (including Tenant’s parking), except to the
extent reasonably necessary for Landlord’s Contractor to complete the Punchlist
Items in accordance with Section 4.1.2, and (ii) Landlord has obtained a
certificate of occupancy or temporary certificate of occupancy (or its
equivalent) allowing Tenant to legally occupy the Expansion Premises.
          4.2.5 Warranties. Landlord shall use commercially reasonable efforts
(but without obligation to commence or pursue any litigation) to cause
Contractor to complete with reasonable promptness the Punchlist Items and repair
with reasonable promptness all defects in the construction of the Tenant
Improvements in accordance with the Work Letter as to which Tenant notifies
Landlord in writing (which notice Tenant shall give within thirty (30) days
following the Phase 1 Commencement Date). Notwithstanding the foregoing,
Landlord shall cause all Punchlist Items that reasonably can be completed within
sixty (60) days after Substantial Completion of the Tenant Improvements to be
completed within sixty (60) days after Substantial Completion of the Tenant
Improvements. Except for such Punchlist Items and except for latent defects and
non-compliance of Tenant Improvements with Applicable Laws, Tenant shall,
subject to the terms hereof, be deemed to have accepted the Expansion Premises
in the condition delivered to it “As Is,” provided, however, except as to those
items that Landlord is required to correct pursuant to this Section, Landlord
shall partially assign to Tenant (but without prejudice to any of Landlord’s
rights of enforcement) all warranties that it has received under the
construction contract, any subcontract, or from any material supplier.
Notwithstanding the foregoing, if Tenant notifies Landlord within the period
beginning on Substantial Completion of the Tenant Improvements and continuing
through the date that is twelve (12) months thereafter (the “TI Warranty
Period”), of (a) latent defects in the construction of the Tenant Improvements;
or (b) non-compliance of Tenant Improvements with Applicable Laws, then as
Landlord’s sole and exclusive obligation with respect thereto, Landlord shall
cause such latent defects or non-compliance promptly to be remedied. All
warranty claims shall be barred and shall lapse unless such claim is made in
writing to Landlord, with a description of the claim made, on or before the
expiration of the TI Warranty Period.
     4.3. Additional Allowance. Landlord shall, at Tenant’s request, provide an
additional tenant improvement allowance not to exceed Thirty-Five Dollars
($35.00) per rentable square foot of the Expansion Premises (the “Additional
Allowance”), which amount may be used by Tenant to increase the scope of
Landlord’s Construction Work or the Tenant Improvements pursuant to the terms
and conditions contained in the Work Letter and/or pay for any other costs
payable by Tenant pursuant to the Work Letter. In the event Tenant elects to use
all or any

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portion of the Additional Allowance, Tenant shall pay to Landlord, as Rent, an
amount equal to the Additional Allowance disbursed by Landlord, together with
interest thereon at the rate of nine percent (9%) per annum. Tenant shall make
payments in respect of the Additional Allowance plus interest thereon in equal
monthly installments so that the full amount shall be paid on or before the
expiration of the initial Term. Tenant shall pay such amounts with the payment
of Basic Annual Rent for each month. If Tenant has not paid the full amount of
the Additional Allowance plus interest thereon at the expiration or earlier
termination of this Lease, then upon the expiration or termination of this
Lease, Tenant shall, within thirty (30) days thereafter, pay the unpaid portion
of such amount to Landlord. The payments Tenant is requested to make in respect
of the Additional Allowance shall constitute “Additional Rent.”
5. Possession and Commencement Date.
     5.1. Tenant’s Access. So long as Tenant does not (in Landlord’s reasonable
judgment) unreasonably or unnecessarily interfere with Landlord’s Construction
Work or the Tenant Improvements, upon reasonable prior written notice to
Landlord, Tenant may enter upon any Phase prior to the respective Commencement
Date for the purpose of, among other things, installing improvements (including
cabling) or the placement of personal property; provided, however, that Tenant
shall furnish to Landlord evidence satisfactory to Landlord that insurance
coverages required of Tenant under the provisions of Article 23 are in effect,
and such entry shall be subject to all the terms and conditions of this Lease
other than the payment of Rent. Tenant shall reimburse Landlord for all actual
documented incremental costs that result from such entry and indemnify, defend
and hold harmless Landlord from and against any loss, cost, claim, lawsuit,
liability or expense (including reasonable attorneys’ fees and disbursements)
arising out of any entry and/or activities upon the Expansion Premises by Tenant
or Tenant’s Agents.
     5.2. Possession and Commencement Date.
          5.2.1 Diversified Building Premises. Tenant hereby acknowledges that
immediately prior to the Diversified Building Premises Commencement Date, Tenant
occupied the Diversified Building Premises and that Tenant is in possession of
the Diversified Building Premises, and is familiar with the condition thereof
and accepts the Diversified Building Premises in its “as is” condition with all
faults, and Landlord makes no representation or warranty of any kind with
respect the Diversified Building Premises, and Landlord will have no obligation
to improve, alter or repair the Diversified Building Premises, except as
specifically set forth herein. Tenant acknowledges that Tenant was the prior
owner of the Diversified Building and as such is fully aware of the current
conditions of the Diversified Building.
          5.2.2 Phase 1 Premises.
               (a) Landlord shall endeavor to tender possession of the Phase 1
Premises to Tenant on or before the Phase 1 Estimated Delivery Date. If
Landlord’s Construction Work or the Tenant Improvements as required pursuant to
the terms of the Work Letter are not Substantially Complete on or before the
Phase 1 Estimated Delivery Date for any reason whatsoever, then, except as
provided below, this Lease shall not be void or voidable, Landlord shall not be
liable to Tenant for any loss or damage resulting therefrom and the Phase 1
Commencement Date shall not occur until Substantial Completion of Landlord’s
Construction Work and the Tenant Improvements occurs; provided, however, if the
satisfaction of the requirements for Substantial Completion of Landlord’s
Construction Work or the Tenant Improvements have been actually delayed by any
Tenant Delay, then, subject to the terms hereof, Substantial Completion of
Landlord’s Construction Work and the Tenant Improvements shall be deemed to
occur when (as reasonably determined by Landlord) Substantial Completion of
Landlord’s Construction Work and the Tenant Improvements would have occurred if
such Tenant Delay had not occurred. Within thirty (30) days after Substantial
Completion of Landlord’s Construction Work and the Tenant Improvements,
Landlord’s architect shall calculate and certify in writing to Landlord and
Tenant the Rentable Area of the Phase 1 Premises in accordance with Article 9.
“Tenant Delay” shall mean: (1) delays or failure of Tenant or Tenant’s architect
to deliver items in accordance with the Work Letter attached hereto as
Exhibit J; (2) Tenant’s failure to timely fulfill its obligations as set forth
in the Work Letter within the time periods set forth therein; (3) delays caused
by CW Tenant Change Order Requests (as defined in the Work Letter) or TI Tenant
Change Order Requests (as defined in the Work Letter); 4) unavailability of
materials, components or finishes for the Tenant Improvements that have an
unusually long lead-time for delivery; (5) a willful or negligent act or

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omission of Tenant, Tenant’s Agents that interferes with the progress of the
work, (6) any delay that results from Tenant’s use of an architect other than
Ferguson Pape Baldwin Architects for purposes of the TI Program and the
Schematic TI Plans, or (7) any other event or circumstance described as a Tenant
Delay in the Work Letter. Landlord shall not assess any day towards a Tenant
Delay for delays caused solely by Landlord’s contractors, Landlord or any third
parties or due to Force Majeure. Notwithstanding anything above to the contrary,
(i) the first ten (10) days of Tenant Delays (if any) associated with any CW
Tenant Change Order Request or TI Tenant Change Order Request shall not be
deemed a Tenant Delay, (ii) no delay shall be considered a Tenant Delay unless
Landlord provides Tenant written notice of such Tenant Delay, to the extent
Landlord and/or management personnel of Landlord’s contractor(s) are aware of
such Tenant Delay, and Tenant fails to cure such delay within one (1) business
day; provided that no such notice and cure period shall be required if such
delay is with respect to interference with the Landlord’s construction
activities and Landlord has previously notified Tenant of similar Tenant Delays,
(iii) no delay shall be considered a Tenant Delay in the event Substantial
Completion of Landlord’s Construction Work and the Tenant Improvements occurs on
or before the Phase 1 Estimated Delivery Date. Landlord and Contractor shall
take commercially reasonable actions, remedial or otherwise, to complete the
Landlord’s Construction Work and the Tenant Improvements by the Phase 1
Estimated Delivery Date notwithstanding any Tenant Delay. All additional cost
and expense payable by Landlord, if any, to complete the Landlord’s Construction
Work or the Tenant Improvements due to Tenant Delay (“Tenant Delay Costs”),
shall constitute TI Costs, and to the extent the TI Costs exceed the TI
Allowance Amount, Tenant shall pay such actual and documented additional costs
and expenses as “Excess Costs” in accordance with Section 4.2.2 of this Lease.
               (b) Landlord and Tenant shall each execute and deliver to the
other a factually correct written acknowledgment of the actual Phase 1
Commencement Date and the Expiration Date when such is established in the form
of Exhibit F, and shall attach it to this Lease as Exhibit F-1. Failure to
execute and deliver such acknowledgement, however, shall not affect the Phase 1
Commencement Date or Landlord’s or Tenant’s liability hereunder. Failure by
Tenant to obtain validation by any medical review board or other similar
governmental licensing of the Expansion Premises required for the Permitted Use
by Tenant shall not serve to extend the Phase 1 Commencement Date.
          5.2.3 Phase 2 Premises.
               (a) In the event Tenant elects to occupy the Phase 2 Premises
before the Phase 2 Estimated Delivery Date, then Tenant shall deliver to
Landlord at least five (5) business days before the date Tenant elects to occupy
the Phase 2 Premises a written notice setting forth the date Tenant intends to
occupy the Phase 2 Premises (collectively, the “Phase 2 Commencement Date
Notice”).
               (b) Landlord shall tender possession of the Phase 2 Premises to
Tenant upon the Phase 2 Commencement Date. On the Phase 2 Commencement Date,
Landlord and Tenant shall each execute and deliver to the other a factually
correct written acknowledgement of the actual Phase 2 Commencement Date and the
Expiration Date when established, in the form Exhibit F, and shall attach it to
this Lease as Exhibit F-2. Failure to execute and deliver such acknowledgement,
however, shall not affect the Phase 2 Commencement Date or Tenant’s liability
hereunder.
          5.2.4 Phase 3 Premises.
               (a) In the event Tenant elects to occupy the Phase 3 Premises
(which shall include all, and not less than all, of the remainder unoccupied
portion of the Expansion Building) before the Phase 3 Estimated Delivery Date,
Tenant shall deliver to Landlord at least five (5) business days a written
notice setting forth the date that Tenant intends to occupy the Phase 3 Premises
(collectively, the “Phase 3 Commencement Date Notice”).
               (b) Landlord shall tender possession of the Phase 3 Premises to
Tenant upon the Phase 3 Commencement Date. On the Phase 3 Commencement Date,
Landlord and Tenant shall each execute and deliver to the other factually
correct written acknowledgement of the actual Phase 3 Commencement Date and the
Expiration Date when established, in the form Exhibit F, and shall attach it to
this Lease as Exhibit F-3. Failure to execute and deliver such

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acknowledgement, however, shall not affect the Phase 3 Commencement Date or
Tenant’s liability hereunder.
          5.2.5 Tenant’s Termination and Abatement Rights.
               (a) First Milestone Termination Right. Notwithstanding the
foregoing, in the event Landlord has not commenced the grading of the land where
the Expansion Building will be located (“Grading Work”) by September 1, 2007, as
such date may be equitably extended to reflect any Tenant Delay and any Force
Majeure delays (“Outside Date Termination Date”), then Tenant shall have the
right to terminate this Lease by notice to Landlord given no later than thirty
(30) days following such date, at which time neither party shall have any
further right or obligation hereunder (except for those terms and provisions
which expressly survive the expiration or sooner termination of this Lease).
               (b) Second Milestone Abatement and Termination Right.
Notwithstanding the foregoing, in the event that Substantial Completion of the
Tenant Improvements has not occurred by October 1, 2008, as such date may be
equitably extended to reflect any Tenant Delay and any Force Majeure delays (the
“TI Completion Outside Date”), then Tenant shall be entitled to one (1) day of
abatement of Expansion Premises Basic Annual Rent for the Phase 1 Premises for
every day past the applicable TI Completion Outside Date that Substantial
Completion of the Tenant Improvements has not occurred. In the event that
Substantial Completion of the Tenant Improvements has not occurred by October 1,
2009, as such date may be equitably extended to reflect any Tenant Delay and any
Force Majeure delays (the “TI Completion Termination Date”), then Tenant shall
have the right to terminate this Lease by notice to Landlord given no later than
thirty (30) days following such date, at which time neither party shall have any
further right or obligation hereunder (except for those terms and provisions
which expressly survive the expiration or sooner termination of this Lease);
provided, however, for purposes of this Section 5.2.5(b), in no event shall the
period of excused delay for Force Majeure exceed ninety (90) days in the
aggregate.
6. Rent.
     6.1. Diversified Building Premises. Starting on the Execution Date, Tenant
shall pay to Landlord as Basic Annual Rent for the Diversified Building
Premises, the rent set forth on the rent schedule attached hereto as Schedule 1,
subject to adjustments in accordance with Article 7. The Diversified Building
Premises Basic Annual Rent shall be paid in equal monthly installments on or
before the first day of the applicable month.
     6.2. Expansion Premises. Starting on the Phase 1 Commencement Date, Tenant
shall pay to Landlord as Basic Annual Rent for the Expansion Premises, the
product of (a) the rate per rentable square feet set forth in Section 2.3 (as
adjusted in accordance with Article 7), and (b) the rentable square feet of the
Phases that are included in the Expansion Premises from time to time, subject to
adjustment pursuant to the terms of this Lease, including, without limitation:
(i) the Expansion Premises Basic Annual Rent shall increase on the Phase 2
Commencement Date by the product of (1) the number of rentable square feet of
the Phase 2 Premises and (2) the same Expansion Premises Basic Annual Rent rate
per rentable square foot that applies to the Expansion Premises from time to
time; (ii) the Expansion Premises Basic Annual Rent shall increase on the Phase
3 Commencement Date by the product of (1) the number of rentable square feet of
the Phase 3 Premises and (2) the same Expansion Premises Basic Annual Rent rate
per rentable square foot that applies to the Expansion Premises from time to
time; and (iii) the biennial rent adjustments in accordance the provisions of
Article 7 hereof. Expansion Premises Basic Annual Rent and the TI Allowance
Amount shall be paid in equal monthly installments on or before the first day of
the applicable month.
     6.3. In addition to Basic Annual Rent, from and after the Commencement
Date, Tenant shall pay to Landlord as additional rent (“Additional Rent”) at
times hereinafter specified in this Lease (a) amounts related to Insurance
Costs, Utility Costs and Taxes (each as defined below) and (b) any other amounts
that Tenant agrees to pay under the provisions of this Lease that are owed to
Landlord, including, without limitation, any and all other sums that may become
due by reason of any default of Tenant or failure on Tenant’s part to comply
with the agreements, terms, covenants and conditions of this Lease to be
performed by Tenant, after notice and the lapse of any applicable cure periods.

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     6.4. Basic Annual Rent (including the Diversified Building Premises Basic
Annual Rent and the Expansion Premises Basic Annual Rent) and Additional Rent
shall together be denominated “Rent.” Rent shall be paid to Landlord, without,
except as otherwise provided herein, abatement, deduction or offset, in lawful
money of the United States of America at the office of Landlord as set forth in
Section 2.10 or to such other person or at such other place as Landlord may from
time designate in writing. In the event the Commencement Date for any Phase
commences or ends on a day other than the first day of a calendar month, then
the Rent for such fraction of a month shall be prorated for such period on the
basis of a thirty (30) day month and shall be paid at the then-current rate for
such fractional month.
7. Rent Adjustments.
     7.1. Initial Term.
          7.1.1 Diversified Building Premises. The Diversified Building Premises
Basic Annual Rent per rentable square foot of the Diversified Building Premises
shall be increased in accordance with Schedule 1 attached hereto.
          7.1.2 Expansion Premises. The Expansion Premises Basic Annual Rent per
rentable square foot of the Expansion Premises shall be increased on every other
anniversary (i.e., the second anniversary, the fourth anniversary, the sixth
anniversary, etc.) of the Phase 1 Commencement Date by five percent (5%) of the
Expansion Premises Basic Annual Rent per rentable square foot of the Expansion
Premises immediately preceding such increase. The monthly installment of
Expansion Premises Basic Annual Rent that is due for the month in which each
such adjustment occurs (the installment due immediately before such month) shall
be the first installment that will be increased to reflect such increase in
Expansion Premises Basic Annual Rent.
     7.2. Extended Term.
          7.2.1 Diversified Building Premises. The Diversified Building Premises
Basic Annual Rent for the Diversified Building Premises shall be adjusted on the
first (1st) day of each Extended Term to the amount calculated in accordance
with Section 42.1, and shall be adjusted every twenty-four (24) months
thereafter by five percent (5%) of the Diversified Building Premises Basic
Annual Rent per rentable square foot of the Diversified Building Premises
immediately preceding such increase. The monthly installment of the Diversified
Building Premises Basic Annual Rent that is due for the month in which each such
adjustment occurs (the installment due immediately before such month) shall be
the first installment that will be increased to reflect such increase in the
Diversified Building Premises Basic Annual Rent.
          7.2.2 Expansion Premises. The Expansion Premises Basic Annual Rent for
the Expansion Premises shall be adjusted on the first (1st) day of each Extended
Term to the amount calculated in accordance with Section 42.1, and shall be
adjusted every twenty-four (24) months thereafter by five percent (5%) of the
Expansion Premises Basic Annual Rent per rentable square foot of the Expansion
Premises immediately preceding such increase. The monthly installment of the
Expansion Premises Basic Annual Rent that is due for the month in which each
such adjustment occurs (the installment due immediately before such month) shall
be the first installment that will be increased to reflect such increase in the
Expansion Premises Basic Annual Rent.
8. Taxes.
     8.1. Commencing with the Commencement Date and continuing for each calendar
year or, at Landlord’s option, tax year (each such “tax year” being a period of
twelve (12) consecutive calendar months for which the applicable taxing
authority levies or assesses Taxes), for the balance of the Term, Tenant shall
pay to Landlord the amount of all Taxes levied and assessed for any such year
upon the Property (including the Diversified Space). “Taxes” shall mean all
government impositions including, without limitation, property tax costs
consisting of real and personal property taxes and assessments (including
amounts due under any improvement bond upon the Property or any portion thereof,
including the Parcel or parcels of real property upon which the Buildings are
located or assessments levied in lieu thereof) imposed by any federal, state,
regional, local or municipal governmental authority, agency or subdivision
(each, a “Governmental Authority”) on the Property or improvements thereon, any
tax on or

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measured by gross rentals received from the rental of space in the Buildings, or
tax based on the square footage of the Premises or the Buildings as well as any
parking charges, utilities surcharges, or any other costs levied, assessed or
imposed by, or at the direction of, or resulting from statutes or regulations,
or interpretations thereof, promulgated by any Governmental Authority in
connection with the use or occupancy of the Premises or the parking facilities
exclusively serving the Premises; any tax on this transaction or this Lease;
provided, however, that “Taxes” shall in no event include any franchise or
federal or state income tax, excess profit taxes, gift taxes, capital stock
taxes, inheritance and succession taxes, estate taxes or any tax based on net
rentals received from the rental of space in the Buildings. Any amount paid by
Tenant for any partial year of the Term shall be prorated on the basis of the
number of days of such partial year. Payment shall be made in the following
manner: Tenant shall pay to Landlord the amounts owed under this Article 8
within thirty (30) days after Landlord gives notice to Tenant of the amount of
such Taxes payable by Tenant (or not less than fifteen (15) days prior to
delinquency, whichever is later). Landlord also shall provide Tenant with a copy
of the applicable tax bill or tax statement from the relevant taxing authority.
Notwithstanding the foregoing, if Applicable Laws allow any such Taxes to be
paid in installments, then Tenant may make such payments to Landlord in
installments, provided that each such installment shall be payable to Landlord
not less than ten (10) days prior to the date upon which payment of the
applicable installment to the taxing authority becomes delinquent. In addition
to any other amounts due from Tenant to Landlord, if Tenant fails to pay Taxes
to Landlord as herein required, Tenant shall pay to Landlord the amount of any
interest, penalties or late charges imposed by any governmental authority for
late payment. “Applicable Laws” means all federal, state, municipal and local
laws, codes, ordinances, rules and regulations of Governmental Authorities,
committees, associations, or other regulatory committees, agencies or governing
bodies having jurisdiction over the Property, Landlord or Tenant, including both
statutory and common law and hazard waste rules and regulations.
          8.1.1 Tenant shall have the right, by appropriate proceedings, to
protest or contest in good faith any assessment or reassessment of Taxes, any
special assessment, or the validity of any Taxes or of any change in assessment
or tax rate; provided, however, that prior to any such challenge Tenant must
either (a) pay the Taxes alleged to be due in their entirety and seek a refund
from the appropriate authority or (b) post a bond in an amount sufficient to
ensure full payment of the Taxes, including any potential interest, late charge
and penalties. Upon a final determination with respect to any such contest or
protest, Tenant shall promptly pay to the appropriate Governmental Authority all
sums found to be due with respect thereto. In any such protest or contest,
Tenant may act in its own name, and at the request of Tenant, Landlord shall
cooperate with Tenant in any way Tenant may reasonably require in connection
with such contest or protest, including signing such documents as Tenant
reasonably shall request, provided that such cooperation shall be at no expense
to Landlord and shall not require Landlord to attend any appeal or other
hearing. Any such contest or protest shall be at Tenant’s sole expense, and if
any penalties, interest or late charges become payable with respect to the Taxes
as a result of such contest or protest, Tenant shall pay the same.
          8.1.2 If Tenant obtains a refund as the result of Tenant’s protest or
contest, and subject to Tenant’s obligation to pay Landlord’s costs (if any)
associated therewith, Tenant shall be entitled to such refund to the extent it
relates to the Property during the Term.
     8.2. If, at any time during the Term under the laws of any Governmental
Authority, a tax or excise on rent or any other tax howsoever described is
levied or assessed by any such political body against Landlord on account of
rentals payable to Landlord hereunder, such tax or excise shall be considered
“Taxes” for the purposes of this Article 8, although any amount assessed against
Landlord as state or federal income tax shall not be deemed “Taxes.”
     8.3. To the extent Landlord is required by a lender, Tenant shall timely
pay all tax and insurance impound payments due on the Property.
     8.4. Taxes on Tenant’s Property.
          8.4.1 Tenant shall pay at least twenty (20) days prior to delinquency
any and all taxes levied against any personal property or trade fixtures placed
by Tenant in or about the Property.

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          8.4.2 If any such taxes on Tenant’s personal property or trade
fixtures are levied against Landlord or Landlord’s property or, if the assessed
valuation of the Buildings is increased by inclusion therein of a value
attributable to Tenant’s personal property or trade fixtures, and if Landlord,
after written notice to Tenant, pays the taxes based upon any such increase in
the assessed valued of the Buildings, then Tenant shall, upon demand, repay to
Landlord the taxes so paid by Landlord.
     8.5. Cut-Off Date. Notwithstanding anything herein to the contrary, Tenant
shall not be responsible for Taxes attributable to any calendar year which are
first billed to Tenant more than eighteen (18) months after the expiration of
the applicable calendar year, except with respect to supplemental Taxes.
9. [Intentionally Omitted].
10. Security Deposit.
     10.1. Pursuant to the Original Illumina Lease, Tenant has deposited with
Landlord an amount equal to $1,911,855 as the security deposit under the
Original Illumina Lease (the “Original Illumina Lease Security Deposit”), and
(a) from and after the Execution Date, Landlord shall continue to hold a portion
of the Original Illumina Lease Security Deposit in an amount equal to $40,836.75
(the “Security Deposit”), in accordance with the terms and conditions of this
Section 10, (b) from and after the Execution Date, Landlord shall hold a portion
of Original Illumina Lease Security Deposit equal to $865,177.50 in accordance
with the terms and conditions of Section 8 of the Illumina Lease, and
(c) Landlord shall return the remaining portion of the Original Illumina Lease
Security Deposit in an amount equal to $1,005,840.75 to Tenant.
     10.2. The Security Deposit shall be held by Landlord as security for the
faithful performance by Tenant of all of the terms, covenants and conditions of
this Lease to be kept and performed by Tenant during the period commencing on
the Execution Date and ending upon the expiration or termination of this Lease.
In addition, Tenant shall deposit the following amounts with Landlord and the
Security Deposit shall be increased by such amounts: (a) a sum equal to
$343,274.40 upon commencement of construction of the Landlord’s Construction
Work, (b) a sum equal to $180,600.00 on the Phase 2 Commencement Date, and (c) a
sum equal to $189,630.00 on the Phase 3 Commencement Date. If Tenant defaults
with respect to any provision of this Lease, including, but not limited to, any
provision relating to the payment of Rent, then Landlord may (but shall not be
required to) use, apply or retain all or any part of the Security Deposit for
the payment of any Rent or any other sum in default, or to compensate Landlord
for any other loss or damage that Landlord may suffer by reason of Tenant’s
default. If any portion of the Security Deposit is so used or applied, then
Tenant shall, within twenty (20) days following demand therefor, deposit cash
with Landlord in an amount sufficient to restore the Security Deposit to its
original amount, and Tenant’s failure to do so shall be a material breach of
this Lease. Landlord shall not be required to keep this Security Deposit
separate from its general fund, and Tenant shall not be entitled to interest on
the Security Deposit. The provisions of this Article 10 shall survive the
expiration or earlier termination of this Lease.
     10.3. In the event Landlord receives documentation from Tenant that
demonstrates to Landlord’s reasonable satisfaction that Tenant has achieved a
rating of “BBB” or better from Standard & Poor’s Corporation (“S&P”), or “Baa”
or better from Moody’s Investors Service, Inc. (“Moody’s”)(or in each case any
successor thereof), and Tenant is not then in Default, Landlord shall return a
portion of the Security Deposit so that the remaining Security Deposit equals
one (1) month of Basic Annual Rent for the entire Premises to Tenant; provided,
however, in the event (a) Tenant subsequently has neither a S&P rating of “BBB”
or better nor a Moody’s rating of “Baa” or better, or (b) Tenant assigns its
interest in this Lease to another person or entity in accordance with Section 27
hereof, unless such assignee satisfies the requirements set forth in this
Section 10.3, Tenant shall, within fifteen (15) days after written notice
thereof, deposit an amount with Landlord sufficient to restore said Security
Deposit to the amount set forth in Section 2.7 and Tenant’s failure to do so
shall constitute a Default of this Lease.
     10.4. In the event of bankruptcy or other debtor-creditor proceedings
against Tenant, the Security Deposit shall be deemed to be applied first to the
payment of Rent and other charges due Landlord for all periods prior to the
filing of such proceedings.

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     10.5. Landlord may deliver to any purchaser of Landlord’s interest in the
Property the funds deposited hereunder by Tenant, and thereupon Landlord shall
be discharged from any further liability with respect to such deposit. This
provision shall also apply to any subsequent transfers.
     10.6. If Tenant is not then in Default under this Lease nor is any event
then occurring which with the giving of notice or the passage of time, or both,
would constitute a Default hereunder, then the Security Deposit, or any balance
thereof, shall be returned to Tenant (or, at Landlord’s option, to the last
assignee of Tenant’s interest hereunder) within thirty (30) days after the
expiration or earlier termination of this Lease.
     10.7. The Security Deposit may be in the form of cash, a letter of credit
or any other security instrument acceptable to Landlord in its sole discretion.
Tenant may at any time, except during Default, deliver a letter of credit (“L/C
Security”) as the entire Security Deposit, as follows.
          10.7.1 If Tenant elects to deliver L/C Security, then Tenant shall
provide Landlord, and maintain in full force and effect throughout the Term, a
letter of credit in substantially the form of Exhibit K issued by an issuer
reasonably satisfactory to Landlord, in the amount of the Security Deposit, with
an initial term of at least one year. If, at the Expiration Date, any Rent
remains uncalculated or unpaid, then: (a) Landlord shall with reasonable
diligence complete any necessary calculations; (b) Tenant shall extend the
expiry date of such L/C Security from time to time as Landlord reasonably
requires; and (c) in such extended period, Landlord shall not unreasonably
refuse to consent to an appropriate reduction of the L/C Security. Tenant shall
reimburse Landlord’s legal costs (as estimated by Landlord’s counsel) in
handling Landlord’s acceptance of L/C Security or its replacement or extension
          10.7.2 If Tenant delivers to Landlord satisfactory L/C Security in
place of the entire Security Deposit, Landlord shall promptly remit to Tenant
any cash Security Deposit Landlord previously held.
          10.7.3 Landlord may draw upon the L/C Security, and hold and apply the
proceeds in the same manner and for the same purposes as the Security Deposit,
if: (a) an uncured Default exists; (b) as of the date thirty (30) days before
any L/C Security expires (even if such scheduled expiry date is after the
Expiration Date) Tenant has not delivered to Landlord an amendment or
replacement for such L/C Security, reasonably satisfactory to Landlord,
extending the expiry date to the earlier of (i) six (6) months after the
then-current Expiration Date or (ii) the date one year after the then-current
expiry date of the L/C Security; (c) the L/C Security provides for automatic
renewals, Landlord asks the issuer to confirm the current L/C Security expiry
date, and the issuer fails to do so within ten (10) business days; (d) Tenant
fails to pay (when and as Landlord reasonably requires) any bank charges for
Landlord’s transfer of the L/C Security; or (e) the issuer of the L/C Security
ceases, or announces that it will cease, to maintain an office in the city where
Landlord may present drafts under the L/C Security. This Section does not limit
any other provisions of this Lease allowing Landlord to draw the L/C Security
under specified circumstances.
          10.7.4 Tenant shall not seek to enjoin, prevent, or otherwise
interfere with Landlord’s draw under L/C Security, even if it violates this
Lease. Tenant acknowledges that the only effect of a wrongful draw would be to
substitute a cash Security Deposit for L/C Security, causing Tenant no legally
recognizable damage. Landlord shall hold the proceeds of any draw in the same
manner and for the same purposes as a cash Security Deposit. In the event of a
wrongful draw, the parties shall cooperate to allow Tenant to post replacement
L/C Security simultaneously with the return to Tenant of the wrongfully drawn
sums, and Landlord shall upon request confirm in writing to the issuer of the
L/C Security that Landlord’s draw was erroneous.
          10.7.5 If Landlord transfers its interest in the Property, then Tenant
shall at Tenant’s expense, within ten (10) business days after receiving a
request from Landlord, deliver (and, if the issuer requires, Landlord shall
consent to) an amendment to the L/C Security naming Landlord’s grantee as
substitute beneficiary; provided, however, in the event Landlord transfers its
interest in the Property more than once in a twelve (12) month period, Landlord
shall pay any fee owed to the issuing bank in connection with any such
additional transfer. If the required Security changes while L/C Security is in
force, then Tenant shall deliver (and, if the issuer requires, Landlord shall
consent to) a corresponding amendment to the L/C Security.

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11. Use.
     11.1. Tenant shall use the Premises for the purpose set forth in
Section 2.8, and shall not use the Premises, or permit or suffer the Premises to
be used, for any other purpose without Landlord’s prior written consent, which
consent Landlord may withhold in its reasonable discretion.
     11.2. Tenant shall not use or occupy the Property in violation of
Applicable Laws; zoning ordinances; or the certificate of occupancy issued for
the Buildings, and shall, upon five (5) days’ written notice from Landlord,
discontinue any use of the Property that is declared or claimed by any
Governmental Authority having jurisdiction to be a violation of any of the
above, or that Landlord has a reasonable basis to believe that such use violates
any of the above and Landlord identifies such basis in its notice to Tenant.
Tenant shall comply with any direction of any Governmental Authority having
jurisdiction that shall, by reason of the nature of Tenant’s use or occupancy of
the Property, impose any duty upon Tenant with respect to the Property or with
respect to the use or occupation thereof.
     11.3. Tenant shall not do or permit to be done anything that will
invalidate or increase the cost of any fire, environmental, extended coverage or
any other insurance policy covering the Property, and shall comply with all
rules, orders, regulations and requirements of the insurers of the Property, and
Tenant shall promptly, upon demand, reimburse Landlord for any additional
premium charged for such policy by reason of Tenant’s failure to comply with the
provisions of this Article 11.
     11.4. Tenant shall, at its sole cost and expense, promptly and properly
observe and comply with all present and future orders, regulations, directions,
rules, laws, ordinances, and requirements of all Governmental Authorities
(including, without limitation, state, municipal, county and federal governments
and their departments, bureaus, boards and officials) arising from the use or
occupancy of the Property, including, without limitation, the requirements of
Americans with Disabilities Act of 1990 (together with regulations promulgated
pursuant thereto, the “ADA”). Tenant’s obligations under this Section 11.4 shall
include any Alterations to the Property (including (a) the Diversified Building
and, (b) from and after the Phase 1 Commencement Date, the Expansion Building)
that Tenant is required or elects to make pursuant to the terms of this Lease;
provided, however, Landlord shall be responsible for ADA compliance of the
Landlord’s Construction Work and the Tenant Improvements.
     11.5. Tenant shall keep all doors opening onto public corridors closed,
except when in use for ingress and egress.
     11.6. No additional locks or bolts of any kind shall be placed upon any of
the doors or windows by Tenant, nor shall any changes be made to existing locks
or the mechanisms thereof without Landlord’s prior written consent. Tenant
shall, upon termination of this Lease, return to Landlord all keys to offices
and restrooms either furnished to or otherwise procured by Tenant. In the event
any key so furnished to Tenant is lost, Tenant shall pay to Landlord the cost of
replacing the same or of changing the lock or locks opened by such lost key if
Landlord shall deem it necessary to make such change
     11.7. No awnings or other projections shall be attached to any outside wall
of the Buildings. No curtains, blinds, shades or screens shall be attached to or
hung in, or used in connection with, any window or door of the Buildings other
than Landlord’s standard window coverings. Neither the interior nor exterior of
any windows shall be coated or otherwise sunscreened without Landlord’s prior
written consent, nor shall any bottles, parcels or other articles be placed on
the windowsills. No equipment, furniture or other items of personal property
shall be placed on any exterior balcony without Landlord’s prior written
consent.
     11.8. Subject to Diversified’s right to place signs on the Property in
accordance with Section 32 of the Diversified Lease, Tenant shall, at Tenant’s
sole cost and expense, have the exclusive right to install the maximum amount of
any legally permitted signage on the Property (including any building thereon)
(“Signage”), which Signage shall be subject to Landlord’s prior written consent,
which consent shall not be unreasonably withheld, conditioned or delayed. Tenant
shall keep the Signage in good condition and repair. The size, design, and other
physical aspects of any sign shall be subject to Landlord’s written approval
prior to installation, which approval will not unreasonably be withheld, any
covenants, conditions, or restrictions

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encumbering the Property and, any Applicable Laws. The cost of the sign(s),
including but not limited to the permitting, installation, maintenance and
removal thereof shall be at Tenant’s sole cost and expense. If Tenant fails to
maintain its sign(s), or if Tenant fails to remove such sign(s) upon termination
of this Lease, or fails to repair any damage caused by such removal (including
without limitation, painting the damaged portions of the Buildings and any other
portions of the Buildings that Landlord reasonably determines in good faith
shall be painted so that repainting the damaged portion of the Buildings does
not adversely affect the visual appearance of the Buildings, if required by
Landlord; provided, however, in no event shall Landlord require Tenant to
repaint an entire Building), Landlord may do so at Tenant’s expense. Tenant
shall on demand reimburse Landlord for all costs incurred by Landlord to effect
such removal, which amounts shall be deemed Additional Rent and shall include
without limitation, all sums disbursed, incurred or deposited by Landlord,
including Landlord’s costs, expenses and actual attorneys’ fees with interest
thereon. Tenant shall indemnify, defend and hold harmless Landlord from and
against any loss, cost, claim, lawsuit, liability or expense (including
reasonable attorneys’ fees and disbursements) arising directly or indirectly out
of Tenant’s failure to perform any of its obligations under this Section 11.8.
     11.9. Tenant shall only place equipment within the Premises with floor
loading consistent with the structural design of the Buildings without
Landlord’s prior written approval, and such equipment shall be placed in a
location designed to carry the weight of such equipment.
     11.10. Tenant shall not (a) use or allow the Property to be used for any
unlawful or reasonably objectionable purposes or (b) cause, maintain or permit
any nuisance or waste in, on or about the Property (other than the Diversified
Space).
     11.11. Except for Landlord’s Construction Work and Tenant Improvement work,
Tenant shall be responsible for all liabilities, costs and expenses arising out
of or in connection with the compliance of the Property (other than the
Diversified Space) with the ADA, and Tenant shall indemnify, defend and hold
harmless Landlord from and against any loss, cost, claim, lawsuit, liability or
expense (including reasonable attorneys’ fees and disbursements) arising out of
any failure of the Property (other than the Diversified Space) to comply with
the ADA. Notwithstanding the foregoing, Landlord represents and warrants that
upon Substantial Completion of Landlord’s Construction Work and the Tenant
Improvement work, the Expansion Building shall comply with all Applicable Laws,
including the ADA and any compliance costs as a result of a breach of this
representation and warranty shall be at Landlord’s sole cost and expense and
Landlord shall indemnify, defend and hold harmless Tenant from and against any
loss, cost, claim, lawsuit, liability or expense (including reasonable
attorneys’ fees and disbursements) arising out of any failure of the Landlord’s
Construction Work or the Tenant Improvements to comply with the ADA. The
provisions of this Section 11.11 shall survive the expiration or earlier
termination of this Lease.
12. Diversified Lease and Subdivision.
     12.1. Diversified Lease. From and after the Commencement Date, (a) Tenant
shall be responsible for paying all amounts with respect to Taxes, Insurance
Costs, Utility Costs and any other costs and expenses Landlord is required to
pay in connection with the Diversified Space in accordance with Article 9 of the
Diversified Lease, and (b) Landlord assumes, and is responsible for performing,
all of the obligations of the landlord under and related to the Diversified
Lease (other than the payment of expenses in accordance with Section 12.1(a)
above). Notwithstanding the foregoing, (x) Tenant is solely responsible for
maintaining the Property (other than the Diversified Space) in accordance with
the terms and conditions of this Lease, and (y) Diversified is solely
responsible for maintaining the Diversified Space pursuant to Section 11(b) of
the Diversified Lease.
     12.2. Estoppel. Tenant certifies that (a) the Diversified Lease is
unmodified and in full force and effect and (b) to Tenant’s knowledge, there are
not any uncured defaults on the part of landlord or the tenant under the
Diversified Lease.
     12.3. Recreation Facilities. Tenant acknowledges that Diversified has
certain rights to the Property (excluding the Expansion Building) pursuant to
the Diversified Lease, including, without limitation, the right to use: (a) the
Diversified Building lobby, utility room, common corridors and hallways, 5
covered reserved parking spaces, uncovered parking areas, stairways & elevators
and access to other generally understood public or common areas (“Diversified

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Building Common Areas”), and (b) the full court basketball/sports courts,
outdoor seating areas, dressing, locker and working rooms, restrooms, and
showers located on the Property (collectively, the “Recreation Facilities” and,
together with the Diversified Building Common Areas, the “Diversified Areas”).
Diversified shall have the non-exclusive right to use the Diversified Areas 24
hours a day, 7 days a week other than Diversified’s exclusive right to use the 5
covered reserved parking spaces pursuant to the Diversified Lease. Tenant hereby
agrees that it shall not regulate, restrict or charge any fees in connection
with Diversified’s use of the Diversified Areas.
     12.4. Subdivision. Landlord may subdivide Parcel 3 so that it will consist
of two lots that may be legally conveyed in accordance with California’s
Subdivision Map Act. At Landlord’s request, Tenant shall execute, acknowledge
and deliver such further instruments and do such further acts as may be
necessary to modify the subdivision of such property. Tenant shall not oppose or
object to any changes or modifications to the subdivision for such property.
13. Brokers.
     13.1. Tenant represents and warrants that it has had no dealings with any
real estate broker or agent in connection with the negotiation of this Lease
other than Steve Rosetta and Ted Simpson, Cushman & Wakefield (“Tenant’s
Broker”), and that it knows of no other real estate broker or agent that is or
might be entitled to a commission in connection with this Lease. Landlord shall
compensate Tenant’s Broker in relation to this Lease pursuant to a separate
agreement between Landlord and Landlord’s Broker (the “Commission Agreement”).
     13.2. Landlord represents and warrants that it has had no dealings with any
real estate broker or agent in connection with the negotiation of this Lease
other than Doug Lozier at CB Richard Ellis, Inc. (“Landlord’s Broker”), and that
it knows of no other real estate broker or agent that is or might be entitled to
a commission in connection with this Lease. Landlord shall compensate Landlord’s
Broker in relation to this Lease pursuant to the Commission Agreement.
     13.3. Tenant acknowledges and agrees that the employment of brokers by
Landlord is for the purpose of solicitation of offers of leases from prospective
tenants and that no authority is granted to any broker to furnish any
representation (written or oral) or warranty from Landlord unless expressly
contained within this Lease. Landlord is executing this Lease in reliance upon
Tenant’s representations, warranties and agreements contained within
Section 13.1.
     13.4. Tenant agrees to indemnify, defend and hold Landlord harmless from
any and all cost or liability for compensation claimed by any other broker or
agent, other than Tenant’s Broker, employed or engaged by it or claiming to have
been employed or engaged by Tenant. Landlord agrees to indemnify, defend and
hold Tenant harmless from any and all cost or liability for compensation claimed
by any other broker or agent, other than Landlord’s Broker, employed or engaged
by it or claiming to have been employed or engaged by Landlord.
14. Holding Over.
     14.1. If, with Landlord’s prior written consent, Tenant holds possession of
all or any part of the Property after the Term, Tenant shall become a tenant
from month to month after the expiration or earlier termination of the Term, and
in such case Tenant shall continue to pay (a) the Basic Annual Rent in
accordance with Article 6, as adjusted in accordance with Article 7, and (b) any
amounts for which Tenant would otherwise be liable under this Lease if this
Lease were still in effect, including, without limitation, payments for Taxes
and insurance. Any such month-to-month tenancy shall be subject to every other
term, covenant and agreement contained herein.
     14.2. Notwithstanding the foregoing, if Tenant remains in possession of the
Property after the expiration or earlier termination of the Term without
Landlord’s prior written consent, Tenant shall become a tenant at sufferance
subject to the terms and conditions of this Lease, except that the per diem
Basic Annual Rent shall be equal to: (a) for the first three (3) months that
Tenant remains in possession of the Property after the expiration or earlier
termination of this Lease, one hundred twenty-five percent (125%) of the Basic
Annual Rent in effect during the last thirty (30) days of the Term; and (b) for
any time thereafter that Tenant remains in possession of the Property after the
expiration or earlier termination of this Lease, one hundred

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fifty percent (150%) of the Basic Annual Rent in effect during the last thirty
(30) days of the Term.
     14.3. Acceptance by Landlord of Rent after the expiration or earlier
termination of the Term shall not result in an extension, renewal or
reinstatement of this Lease.
     14.4. The foregoing provisions of this Article 14 are in addition to and do
not affect Landlord’s right of reentry or any other rights of Landlord hereunder
or as otherwise provided by Applicable Laws.
15. Property Management Fee. Tenant shall pay to Landlord on the first day of
each calendar month of the Term, as Additional Rent, the “Property Management
Fee,” which shall equal one percent (1%) of the Basic Annual Rent due from
Tenant.
16. Condition of Premises and the Property. Except as otherwise provided herein,
Tenant acknowledges that neither Landlord nor any agent of Landlord has made any
representation or warranty with respect to the condition of the Premises, the
Property or with respect to the suitability of the Premises for the conduct of
Tenant’s business.
17. Regulations and Parking and Recreation Facilities.
     17.1. Tenant shall faithfully observe and comply with the rules and
regulations adopted by Landlord and attached hereto as Exhibit H, together with
such other reasonable and nondiscriminatory rules and regulations as are
hereafter promulgated by Landlord in its reasonable discretion (the “Rules and
Regulations”).
     17.2. Subject to Diversified’s rights under Section 12.3, Tenant shall have
the right to use, at no additional cost, the parking facilities serving the
Premises. As part of Landlord’s Construction Work, the Property shall contain
sufficient parking to comply with applicable zoning requirements.
     17.3. Tenant shall, at Tenant’s sole cost and expense, comply with the
terms and conditions set forth in, and perform each of the obligations of the
Parcel 3 Owner (as defined in the REA) described in, Sections 3, 4.1, 4.2, 4.3,
4.4, 4.8, 7, 8, 9, 11.3, 11.10, 11.11 and 11.12 of the Reciprocal Easement
Agreement attached hereto as Exhibit L (the “REA”), in accordance with the terms
of conditions of the REA as if Tenant were the Parcel 3 Owner.
     17.4. Subject to Section 18.5 and provided there is no material adverse
impact on Tenant’s Permitted Use and access to the Premises (including the
parking facilities), Landlord reserves the right to subdivide the real property;
provided, however, that such right shall be exercised in a way that does not
materially adversely affect Tenant’s beneficial use and occupancy of the
Premises, including Tenant’s Permitted Use and Tenant’s access to the Premises
(including the parking facilities).
     17.5. Tenant shall, and shall cause Tenant’s Agents to, faithfully observe
and comply with any rules and regulations adopted pursuant to Section 4.7 of the
REA (the “Recreation Facilities Rules and Regulations”). Landlord has the right
to refuse to allow Tenant’s Agents to access the Recreation Facilities if such
Tenant’s Agent has not complied with the applicable Recreation Facilities Rules
and Regulations after receiving written notice of such failure to comply.
     17.6. Tenant shall have the right to use the Recreation Facilities during
the hours reasonably established by Landlord as the operating hours of the
Recreation Facilities. Notwithstanding anything to the contrary in this Lease,
Landlord shall have no responsibility to Tenant or Tenant’s Agents (as defined
below), for any accidents, claims, demands, liabilities, causes of action,
judgments, costs, liens, damages, injuries, suits, losses or expenses, including
attorneys’ fees, of any nature, kind or description, arising out of, caused by,
or resulting from Tenant or Tenant’s Agent’s use of the Recreational Facilities
or the negligence of Landlord Parties (as defined in Section 22.3) or Tenant’s
Agents in connection with the operation and maintenance of such Recreational
Facilities.
     17.7. So long as this Lease is in full force and effect, Landlord shall not
amend or modify the REA without first obtaining: (a) the prior written consent
of the original Tenant hereunder (but not any assignee or subtenant), which
consent shall not be unreasonably withheld,

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conditioned or delayed, and (b) solely with respect to amendments or
modifications that could reasonably be expected to have a material adverse
effect on obligations assumed by any successors and assigns of Tenant under the
REA, the prior written consent of any such successors and assigns, which consent
shall not be unreasonably withheld, conditioned or delayed. All amendments or
modifications which result in an increase of the costs and expenses to be
incurred by Tenant under Section 17.3 shall be deemed material and adverse.
18. Utilities and Services.
     18.1. Tenant shall, at Tenant’s sole cost and expense, procure and maintain
contracts, with copies furnished promptly to Landlord after execution thereof,
in customary form and substance for, and with contractors specializing and
experienced in, the maintenance of the following equipment and improvements, if
any, if and when installed on the Property: (a) HVAC equipment, (b) boilers and
pressure vessels, (c) fire extinguishing systems, including fire alarm and smoke
detection devices, (d) landscaping and irrigation systems, (e) roof coverings
and drains, (f) clarifiers, (g) basic utility feeds to the perimeter of the
Buildings, and (h) any other equipment reasonably required by Landlord.
Notwithstanding the foregoing, in the event Tenant fails to maintain the
contracts required under this Section 18.1 within one (1) business day after
Landlord provides Tenant written notice of such failure, Landlord reserves the
right, upon notice to Tenant, to procure and maintain any or all of such
contracts, and if Landlord so elects, Tenant shall reimburse Landlord, upon
demand, for the actual documented costs thereof.
     18.2. Within sixty (60) days after the Commencement Date, and within sixty
(60) days after the beginning of each calendar year during the Term, Landlord
shall give Tenant a written estimate for such calendar year of the cost of
utilities for the Property (including the Diversified Space), if not separately
metered (“Utility Costs”), and insurance provided by Landlord for the Property
(including the Diversified Space) (“Insurance Costs”). Tenant shall pay such
estimated amount to Landlord in advance in equal monthly installments. Within
ninety (90) days after the end of each calendar year, Landlord shall furnish to
Tenant a statement showing in reasonable detail the costs incurred by Landlord
for Utility Costs and Insurance Costs for the Property (including the
Diversified Space) during such year (the “Annual Statement”), and Tenant shall
pay to Landlord the costs incurred in excess of the payments previously made by
Tenant within thirty (30) days of receipt of the Annual Statement. In the event
that the payments previously made by Tenant for Utility Costs and Insurance
Costs for the Property (including the Diversified Space) exceed Tenant’s
obligation, such excess amount shall be credited by Landlord to the Rent or
other charges next due and owing, provided that, if the Term has expired,
Landlord shall remit such excess amount to Tenant. In the event Tenant disputes
the amounts of any Annual Statement for the particular calendar year delivered
by Landlord to Tenant and Tenant is not in Default hereunder, Tenant shall have
the right, at Tenant’s cost, after reasonable notice to Landlord, to have
Tenant’s authorized employees inspect, at Landlord’s office in San Diego County
during normal business hours, Landlord’s books, records and supporting documents
concerning the expenses set forth in such Annual Statement; provided, however,
Tenant shall have no right to conduct such inspection, have an audit performed
by the Accountant as described below, or object to or otherwise dispute the
amount of the expenses set forth in any such Annual Statement unless Tenant
notifies Landlord of such objection and dispute, completes such inspection, and
has the Accountant commence and complete such audit within one hundred and
eighty (180) days immediately following Landlord’s delivery of the particular
Annual Statement in question (the “Review Period”); provided, further, that
notwithstanding any such timely objection, dispute, inspection, and/or audit,
and as a condition precedent to Tenant’s exercise of its right of objection,
dispute, inspection and/or audit as set forth in this Section 18.2, Tenant shall
not be permitted to withhold payment of, and Tenant shall timely pay to
Landlord, the full amounts as required by the provisions of this Lease in
accordance with such Annual Statement. However, such payment may be made under
protest pending the outcome of any audit which may be performed by the
Accountant as described below. In connection with any such inspection by Tenant,
Landlord and Tenant shall reasonably cooperate with each other so that such
inspection can be performed pursuant to a mutually acceptable schedule. If after
such inspection and/or request for documentation, Tenant still disputes the
amount of the expenses set forth in the Annual Statement, Tenant shall have the
right, within the Review Period, to cause an independent certified public
accountant selected by Tenant and compensated on a non-contingency fee basis
(the “Accountant”) to complete an audit of Landlord’s books and records to
determine the proper amount of the expenses incurred and amounts payable by
Tenant for the calendar year which is the subject of such Annual Statement. Such
audit by the Accountant shall be final and binding upon Landlord and Tenant. If
such audit reveals that Landlord has

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over-charged Tenant, then within thirty (30) days after the results of such
audit are made available to Landlord, Landlord shall reimburse to Tenant the
amount of such over-charge. If the audit reveals that the Tenant was
under-charged, then within thirty (30) days after the results of such audit are
made available to Tenant, Tenant shall reimburse to Landlord the amount of such
under-charge. Tenant agrees to pay the cost of such audit unless it is
subsequently determined that Landlord’s original Annual Statement which was the
subject of such audit overstated expenses by five percent (5%) or more of the
actual expenses which were the subject of such audit. The payment by Tenant of
any amounts pursuant to this Section 18.2 shall not preclude Tenant from
questioning, during the Review Period, the correctness of the particular Annual
Statement in question provided by Landlord, but the failure of Tenant to object
thereto, conduct and complete its inspection and have the Accountant conduct the
audit as described above prior to the expiration of the Review Period for such
Annual Statement shall be conclusively deemed Tenant’s approval of the Annual
Statement in question and the amount of expenses shown thereon. If following
Tenant’s delivery to Landlord of a written request to make Landlord’s books and
records regarding the expenses reasonably available to Tenant and/or the
Accountant to conduct any such inspection and/or audit described above in this
Section 18.2, Landlord fails to make Landlord’s books reasonably available for
such purposes during Landlord’s normal business hours, and such failure
continues for five (5) business days after Tenant notifies Landlord thereof,
then the Review Period shall be extended one (1) day for each such additional
day that Tenant and/or the Accountant, as the case may be, is so prevented from
accessing such books and records. In connection with any inspection and/or audit
conducted by Tenant pursuant to this Section 18.2, Tenant agrees to keep, and to
cause all of Tenant’s employees and consultants and the Accountant to keep, all
of Landlord’s books and records and the audit, and all information pertaining
thereto and the results thereof, strictly confidential (except if required by
any court to disclose such information or if such information is available from
an inspection of public records).
     18.3. Tenant shall make all arrangements for and pay for all water, sewer,
gas, heat, light, power, telephone service and any other service or utility
Tenant required at the Property (including the Diversified Space). Landlord
shall not be liable for, nor shall any eviction of Tenant result from, the
failure to furnish any utility or service, whether or not such failure is caused
by Force Majeure or Landlord’s inability, despite the exercise of reasonable
diligence, to furnish any such utility or service. Except as provided in
Section 18.5, in the event of such failure, Tenant shall not be entitled to
termination of this Lease, any abatement or reduction of Rent, or relief from
the operation of any covenant or agreement of this Lease. Tenant shall pay for,
prior to delinquency of payment therefor, any utilities and services that may be
furnished to the Property (including the Diversified Space) during or, if Tenant
occupies any portion of the Premises after the expiration or earlier termination
of the Term, after the Term.
     18.4. From and after the Commencement Date, Tenant shall be responsible for
paying all amounts with respect to Insurance Costs, Utility Costs, Taxes and
other amounts for which Tenant is responsible under this Lease (other than
Expansion Premises Basic Annual Rent) for the Expansion Premises as if it was
part of the Expansion Premises on the Commencement Date.
     18.5. Notwithstanding the foregoing and subject to Sections 17 and 35, if
because of (i) any repair, maintenance, alteration, development or construction
performed by Landlord after the Commencement Date, which substantially
interferes with Tenant’s use of the Premises and which was not caused by Tenant,
(ii) any material interference by Landlord with Tenant’s access to the Premises
(including the parking facilities) that is not caused by Tenant, or (iii) the
presence of Hazardous Materials in, on or around the Premises in connection with
the Landlord’s Construction Work or the Tenant Improvements which (a) is not
caused by Tenant, and (b) poses a health risk to occupants of the Premises
(each, an “Adverse Condition”), Tenant is unable to conduct its business in a
reasonable manner in a material portion of the Premises as a direct result of
the Adverse Condition and Tenant therefore actually does not occupy or use such
portion of the Premises, as the case may be, and such condition persists for
more than the “Interruption Period” (as defined below), then following the
Interruption Period, Tenant shall be entitled to an abatement of Rent for the
portion of the Premises rendered untenantable. However, in the event that the
remaining portion of the Premises is not sufficient to allow Tenant to conduct
its business therein, and if Tenant does not conduct its business from such
remaining portion, then for such time after expiration of the Interruption
Period during which Tenant is so prevented from effectively conducting its
business therein, the Rent for the entire Premises shall be abated; provided,
however, if Tenant continues to occupy any portion of the Premises, or
reoccupies and conducts its business from any portion of the Premises, during
such period, the

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Rent allocable to such reoccupied portion, based on the proportion that the
rentable area of such reoccupied portion of the Premises bears to the total
rentable area of the Premises, shall be payable by Tenant from the date such
business operations commence. Such abatement shall commence as of the first day
after the expiration of the “Interruption Period” and terminate upon the
cessation of such Adverse Condition. As used herein, the term “Interruption
Period” shall mean seven (7) consecutive business days after written notice
thereof to Landlord, or such shorter period as applicable under the coverage
which is or would be covered by rental abatement insurance required to be
carried by Landlord.
19. Alterations.
     19.1. Tenant shall make no alterations, additions or improvements in or to
the Property or engage in any construction, demolition, reconstruction,
renovation, or other work of any kind in, at, or serving the Premises
(“Alterations”) without Landlord’s prior written approval, which approval
Landlord may withhold in its sole and absolute discretion; provided, however,
that Landlord’s approval shall not be unreasonably withheld, conditioned or
delayed in connection with any Alteration that does none of the following
(i) adversely affects the exterior appearance of a Building or the Premises,
(ii) adversely affects the structural aspects of a Building, including, without
limitation, the roof, foundation, load bearing walls and structural elements of
a Building or the Premises, (iii) adversely affects any base-building system or
equipment, including, without limitation, the base building HVAC, mechanical,
electrical, plumbing or life safety systems; (iv) creates a foreseeable risk of
violating any Applicable Law or increasing insurance premiums; (v) violates any
recorded document affecting the Property; (vi) causes a Building to be
inconsistent with the quality and scope of a class “A” office buildings in the
vicinity of the Buildings; (vii) involves a use of the Premises that is
inconsistent with the current use of the Premises; nor (viii) in Landlord’s
reasonable judgment, reduces the quality or value of a Building or the Property
(each, a “Design Problem”). In seeking Landlord’s approval, Tenant shall provide
Landlord, at least ten (10) business days in advance of any proposed
construction, with plans, specifications, bid proposals, work contracts,
requests for laydown areas and such other information concerning the nature and
cost of the Alterations as Landlord may reasonably request.
     19.2. Notwithstanding the provisions of Section 19.1, Tenant may make
non-structural Alterations to the Premises (“Acceptable Changes”) upon at least
ten (10) business days prior written notice to Landlord but without Landlord’s
prior consent provided (a) the Acceptable Changes do not involve Design
Problems; and (b) the cost of such Acceptable Changes do not exceed Fifty
Thousand Dollars ($50,000) per occurrence or an aggregate amount of One Hundred
Thousand Dollars ($100,000) in any twelve (12) month period.
     19.3. All Alterations made by Tenant shall be: (a) performed in a good and
workmanlike manner and in conformance with any and all Applicable Laws and
CC&Rs; and (b) shall be made only by a licensed, bonded contractor and such
architects, suppliers and mechanics approved in advance by Landlord (which shall
not be unreasonably withheld, conditioned or delayed); provided, however, that
such contractor need not be bonded or approved and such architects, suppliers
and mechanics need not be approved by Landlord in connection with Acceptable
Changes.
     19.4. Tenant shall not construct or permit to be constructed partitions or
other obstructions that will interfere with free access to mechanical
installation or service facilities of the Buildings, or interfere with the
moving of Landlord’s equipment to or from the enclosures containing such
installations or facilities.
     19.5. Tenant shall accomplish any work performed on the Property in such a
manner as to permit any fire sprinkler system and fire water supply lines to
remain fully operable at all times.
     19.6. Tenant covenants and agrees that all work done by Tenant or Tenant’s
contractors shall be performed in full compliance with Applicable Laws. Within
thirty (30) days after completion of any Alterations, Tenant shall provide
Landlord with complete “as-built” drawing print sets and electronic CADD files
on disc (or files in such other current format in common use as Landlord
reasonably approves or requires) showing any changes in the Property (but only
if drawings and plans were required by this Lease or were prepared in connection
with any such Alterations).

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     19.7. Before commencing any work, Tenant shall give Landlord at least ten
(10) business days’ prior written notice of the proposed commencement of such
work.
     19.8. Except for those items listed on Exhibit G, all Alterations, attached
equipment, decorations, fixtures, trade fixtures, additions and improvements,
subject to Section 19.8, attached to or built into the Property, made by either
of the Parties, including, without limitation, all floor and wall coverings,
built-in cabinet work and paneling, sinks and related plumbing fixtures,
laboratory benches, exterior venting fume hoods and walk-in freezers and
refrigerators, ductwork, conduits, electrical panels and circuits shall (unless,
prior to such construction or installation, Landlord elects otherwise) become
the property of Landlord upon the expiration or earlier termination of the Term,
and shall remain upon and be surrendered with the Property as a part thereof.
The Property shall at all times remain the property of Landlord and shall be
surrendered to Landlord upon the expiration or earlier termination of this
Lease. Except for those items on Exhibit G, all trade fixtures, Tenant
Improvements, Alterations and Signage installed by or under Tenant shall be the
property of Landlord. Notwithstanding the foregoing, at any time during the
Term, subject to Landlord’s prior written approval, which approval shall not be
unreasonably withheld, conditioned or delayed, Tenant shall have the right to
update Exhibit G.
     19.9. Tenant shall repair any damage to the Property caused by Tenant’s
removal of any property from the Property. During any such restoration period,
Tenant shall pay Rent to Landlord as provided herein as if the affected portion
of the Premises were otherwise occupied by Tenant. The provisions of this
Section shall survive the expiration or earlier termination of this Lease.
     19.10. Except as to those items listed on Exhibit G attached hereto, all
business and trade fixtures, machinery and equipment, built-in furniture and
cabinets, together with all additions and accessories thereto, attached to or
built into the Property shall be and remain the property of Landlord and shall
not be moved by Tenant at any time during the Term. If Tenant shall fail to
remove any of its effects from the Property within ten (10) days after the
termination of this Lease, then Landlord may, at its option, remove the same in
any manner that Landlord shall choose and store said effects without liability
to Tenant for loss thereof or damage thereto, and Tenant shall pay Landlord,
upon demand, any actual, documented and reasonable costs and expenses incurred
due to such removal and storage or Landlord may, at its sole option and upon
notice to Tenant, sell such property or any portion thereof at private sale and
without legal process for such price as Landlord may obtain and apply the
proceeds of such sale against any (a) amounts due by Tenant to Landlord under
this Lease and (b) any actual and documented expenses incident to the removal,
storage and sale of said personal property.
     19.11. Notwithstanding any other provision of this Article 19 to the
contrary, in no event shall Tenant remove any improvement from the Property as
to which Landlord contributed payment, including, without limitation, the Tenant
Improvements made pursuant to the Work Letter without Landlord’s prior written
consent, which consent Landlord may withhold in its sole and absolute
discretion.
     19.12. Tenant shall pay to Landlord the Construction Management Fee on the
Tenant Improvements. In addition, Tenant shall pay to Landlord an amount equal
to one and one-half percent (1.5%) of the cost to Tenant of all Alterations
(other than Tenant Improvements) installed by Tenant or its contractors or
agents to cover Landlord’s overhead and expenses for plan review, coordination,
scheduling and supervision thereof but only for those Alterations requiring
Landlord’s consent. For purposes of payment of such sum, Tenant shall submit to
Landlord copies of all bills, invoices and statements covering the costs of such
charges, accompanied by payment to Landlord of the fee set forth in this
Section. Tenant shall reimburse Landlord for any extra expenses incurred by
Landlord by reason of faulty work done by Tenant or its contractors.
     19.13. Upon Landlord’s written request, within sixty (60) days after final
completion of any Alterations performed by Tenant with respect to the Property,
Tenant shall submit to Landlord documentation showing the amounts expended by
Tenant with respect to such Alterations, together with supporting documentation
reasonably acceptable to Landlord.

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     19.14. Tenant shall require its contractors and subcontractors performing
work on the Property to name Landlord and its affiliates and lenders as
additional insureds on their respective insurance policies.
20. Repairs and Maintenance.
     20.1. Subject to Landlord’s obligations hereunder, Tenant, at its sole cost
and expense, shall maintain and keep the Property (other than the Diversified
Space), all improvements thereon, and all appurtenances thereto, including but
not limited to sidewalks, parking areas, curbs, roads, driveways, lighting
standards, landscaping, sewers, water, gas and electrical distribution systems
and facilities, drainage facilities, and all signs, both illuminated and
non-illuminated that are now or hereafter on the Property, in good condition and
in a manner consistent with the Permitted Use. Tenant shall make all repairs,
replacements and improvements, including, without limitation, all HVAC, plumbing
and electrical repairs, replacements and improvements required, and shall keep
the same free and clear from all rubbish and debris, excluding, however, the
foundation, slab, structural portions of the walls and roof (not including the
membrane), and structural steel aspects of the Buildings. All repairs made by
Tenant shall be at least equal in quality to the original work, and shall be
made only by a licensed, bonded contractor approved in advance by Landlord
(which shall not be unreasonably withheld, conditioned or delayed); provided,
however, that such contractor need not be bonded or approved by Landlord if the
non-structural alterations, repairs, additions or improvements to be performed
do not exceed Fifty Thousand Dollars ($50,000) per occurrence or an aggregate
amount of One Hundred Thousand Dollars ($100,000) in any twelve (12) month
period. Tenant shall not take or omit to take any action, the taking or omission
of which shall cause waste, damage or injury to the Property. Tenant shall
indemnify, defend (by legal counsel acceptable to Landlord) and hold harmless
Landlord from and against any and all Claims (as defined below) arising out of
the failure of Tenant or Tenant’s Agents to perform the covenants contained in
this Section. “Tenant’s Agents” shall be defined to include Tenant’s officers,
employees, agents, contractors, invitees, customers and subcontractors. For the
avoidance of doubt, as used in this Article 20 and in Section 11.1, the
Diversified Space shall exclude all building systems within the Diversified
Space and any demising, exterior or load bearing walls (other than the interior
surface of such walls within the Diversified Space).
     20.2. Tenant shall maintain the lines designating the parking spaces in
good condition and paint the same as often as may be necessary, so that they are
easily discernable at all times; resurface the parking areas as necessary to
maintain them in good condition; paint any exterior portions of the Buildings as
necessary to maintain them in good condition; maintain the roof and landscaping
in good condition; maintain sightly screens, barricades or enclosures around any
waste or storage areas; and take all reasonable precautions to insure that the
drainage facilities of the roof are not clogged and are in good and operable
condition at all times
     20.3. There shall be no abatement of Rent and no liability of Landlord by
reason of any injury to or interference with Tenant’s business arising from the
Tenant’s making of any repairs, alterations or improvements in or to any portion
of the Property, or in or to improvements, fixtures, equipment and personal
property therein (unless the necessity for any of the same is due to Landlord’s
gross negligence or willful misconduct).
     20.4. During the Term, Landlord shall, at Landlord’s sole cost and expense,
be responsible for any and all repairs and replacements to the foundation, slab,
structural portions of the walls and roof (not including the membrane), and
structural steel aspects of the Buildings only. Notwithstanding the foregoing,
Tenant shall be responsible for, and shall pay, all costs and expenses of such
repair and replacement if such repair or replacement results from anything done
by Tenant or Tenant’s Agents or any breach by Tenant under this Lease. For
purposes of clarity, except as provided in the preceding sentence, Landlord
shall not be responsible for any repairs or replacements to the roof, the
exterior walls or any other portions of the Property. Except for the foregoing
and except as otherwise provided in this Lease, Landlord shall not be required
to maintain or make any repairs or replacements of any nature or description
whatsoever to the Property unless the necessity for such repairs or replacements
is due to Landlord’s gross negligence or willful misconduct. Except as otherwise
provided in this Lease, Tenant hereby expressly waives the right to make repairs
at the expense of Landlord as provided for in any Applicable Laws in effect at
the time of execution of this Lease, or in any other Applicable Laws that may
hereafter be enacted, and waives its rights under Applicable Laws relating to a
landlord’s duty to maintain its premises in a tenantable condition.
Notwithstanding the

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foregoing, if Tenant shall fail, where such failure shall continue for a period
of ten (10) days after written notice thereof from Landlord to Tenant, to
maintain or to commence and thereafter to proceed with diligence to make any
repair required of it pursuant to the terms of this Lease, Landlord, without
being under any obligation to do so and without thereby waiving such default by
Tenant, may so maintain or make such repair and may charge Tenant for the actual
and documented costs thereof. Any expense reasonably incurred by Landlord in
connection with the making of such repairs may be billed by Landlord to Tenant
monthly or, at Landlord’s option, immediately, and shall be due and payable
within thirty (30) days after such billing.
     20.5. Landlord and Landlord’s agents shall have the right to enter upon the
Property or any portion thereof in accordance with the terms and conditions of
Section 34.2, for the purposes of performing any repairs or maintenance Landlord
is permitted or required to make pursuant to this Lease, and of ascertaining the
condition of the Property or whether Tenant is observing and performing Tenant’s
obligations hereunder, all without unreasonable interference from Tenant or
Tenant’s Agents.
     20.6. Tenant shall, upon the expiration or sooner termination of the Term,
surrender the Property (other than the Diversified Space) to Landlord in as good
of a condition as when received, ordinary wear and tear and damage by casualty
excepted. Landlord shall have no obligation to alter, remodel, improve, repair,
decorate or paint the Property (other than the Diversified Space) or any part
thereof, other than pursuant to the terms and provisions of this Lease.
     20.7. Tenant shall, at its sole cost and expense, perform the maintenance
and repair obligations of the Parcel 3 Owner (as defined in the REA) pursuant
to, and in accordance with, Section 4.1 of the REA.
     20.8. Landlord shall not be liable for any failure to make any repairs or
to perform any maintenance that is an obligation of Landlord unless such failure
shall persist for an unreasonable time after Tenant provides Landlord with
written notice of the need of such repairs or maintenance. Notwithstanding any
provision in this Lease to the contrary, if Tenant provides notice to Landlord
of an event or circumstance which requires the action of Landlord with respect
to the provision of repairs as set forth in Section 20.4 of this Lease, and
Landlord fails to provide such action as required by the terms of this Lease
within thirty (30) days after the date of such notice from Tenant (or if such
repair is reasonably expected to require longer than thirty (30) days to
complete, if Landlord shall fail to commence in a meaningful way such repair
within said thirty (30) day period and diligently prosecutes such repair to
completion), then Tenant may provide Landlord with a second written notice
stating in bold and all caps 12 point font that “Landlord’s failure to commence
repair of the damage described below within ten (10) business days after
Landlord’s receipt of this second notice shall entitle Tenant to repair such
damage.” If Landlord does not commence in a meaningful way such repair within
such ten (10) business day period, then Tenant shall have the right to take such
action, and if such action was required under the terms of this Lease to be
taken by Landlord, then Tenant shall be entitled to reimbursement by Landlord of
Tenant’s reasonable actual and documented costs and expenses in taking such
action. Notwithstanding the foregoing, in case of an emergency (where there is
an imminent threat of injury to persons or damage to property), Tenant shall
only be required to provide Landlord five (5) business days notice of the need
to make such repairs stating in bold and all caps 12 point font that “EMERGENCY:
Landlord’s failure to commence its repairs of such damage within five
(5) business days after Landlord’s receipt of this notice shall entitle Tenant
to repair such damage,” and if Landlord does not commence in a meaningful way
such repair within such five (5) business day period, then Tenant shall have the
right to take such action. In the event Tenant takes such action, and such work
will affect the building systems and equipment, structural integrity of the
Buildings or exterior appearance of the Buildings, Tenant shall use only those
contractors used by Landlord in connection with the Landlord’s Construction Work
for such work unless such contractors are unwilling or unable to perform such
work or their pricing is unreasonable, in which event Tenant may utilize the
services of any other qualified contractor which normally and regularly performs
similar work in comparable first-class, institutional quality, office buildings
in the San Diego, California area whose pricing is reasonable. If Tenant is
entitled to reimbursement by Landlord of Tenant’s reasonable actual and
documented costs and expenses in taking any action pursuant to this
Section 20.8, Tenant shall so notify Landlord in writing (the “Reimbursement
Notice”), which Reimbursement Notice shall specify in detail such costs and
expenses. Within thirty (30) days after Landlord’s receipt of a Reimbursement
Notice, Landlord shall pay to Tenant any undisputed portion of such costs and

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expenses and shall notify Tenant in writing of those costs and expenses
specified by Tenant in the Reimbursement Notice which Landlord disputes (the
“Disputed Amounts”) and the reasons for such dispute. Any amounts which are not
so identified by Landlord as Disputed Amounts within said thirty (30) day period
shall be considered to be undisputed. To the extent Landlord fails to reimburse
Tenant for the actual and documented costs and expenses specified in the
Reimbursement Notice within thirty (30) days after demand therefor, Tenant shall
be entitled to offset the sum of the amount of any undisputed portion of such
costs and expenses against Basic Annual Rent payable by Tenant under this Lease
together with interest at the interest rate of eight percent (8%) per annum from
the date of expiration of said thirty (30) day period until the earlier of
(a) the date that Landlord reimburses Tenant such amount and (b) the date of
offset (up to a maximum offset each month of fifteen percent (15%) of the Basic
Annual Rent payable for the Premises) until the full pre-judgment offset amount
(plus such interest) has been so offset. If Tenant obtains a final judgment
against Landlord for the Disputed Amount and if Landlord fails to pay such
judgment within thirty (30) days after the date such judgment is rendered,
Tenant shall be entitled to offset such judgment against Basic Annual Rent
payable by Tenant under this Lease together with interest at the interest rate
of eight percent (8%) per annum from the date Landlord failed to timely
reimburse Tenant for such costs and expenses until the earlier of (x) the date
that Landlord has reimburses Tenant such amount and (y) the date of offset (up
to a maximum offset each month of fifteen percent (15%) of the Basic Annual Rent
payable for the Premises) until the full amount of such judgment (plus such
interest) has been so offset. If Landlord obtains a final judgment against
Tenant for the Disputed Amount, Tenant shall pay to Landlord such judgment
within thirty (30) days after the date such judgment is rendered.
     20.9. This Article 20 relates to repairs and maintenance arising in the
ordinary course of operation of the Property (other than the Diversified Space)
and any related facilities. In the event of fire, earthquake, flood, vandalism,
war, terrorism, natural disaster or similar cause of damage or destruction,
Article 24 shall apply in lieu of this Article 20.
     20.10. Notwithstanding anything above to the contrary, if during the Term,
any portion of the Property which is Tenant’s responsibility hereunder to repair
cannot be repaired other than at a cost which is in excess of fifty percent
(50%) of the cost of replacing such item(s), then such item(s) shall be replaced
by Tenant (subject to Landlord’s prior approval of the plans and specifications
and the cost of any such replacement), and Landlord shall reimburse Tenant a
prorata share of the cost thereof based upon a fraction, the numerator of which
is the number of months of the useful life of such replacement item beyond the
expiration of the Term (including any Extended Term, if applicable), and the
denominator of which is the total number of months of the useful life of such
replacement (as such useful life is specified pursuant to Federal income tax
regulations or guidelines for depreciation thereof); provided, however, for
purposes of calculating the useful life of such replacement, the useful life of
such replacement shall not exceed seven (7) years from the date that such
replacement is made.
21. Liens.
     21.1. Subject to the immediately succeeding sentence, Tenant shall keep the
Property free from any liens arising out of work performed, materials furnished
or obligations incurred by Tenant. Tenant further covenants and agrees that any
mechanic’s lien filed against the Property for work claimed to have been done
for, or materials claimed to have been furnished to, shall be discharged or
bonded by Tenant within ten (10) days after the filing thereof, at Tenant’s sole
cost and expense.
     21.2. Should Tenant fail to discharge or bond against any lien of the
nature described in Section 21.1, Landlord may, at Landlord’s election, pay such
claim or post a bond or otherwise provide security to eliminate the lien as a
claim against title, and Tenant shall immediately reimburse Landlord for the
actual, documented and reasonable costs thereof as Additional Rent.
     21.3. In the event that Tenant leases or finances the acquisition of office
equipment, furnishings or other personal property of a removable nature utilized
by Tenant in the operation of Tenant’s business (which Tenant shall have the
right to do), Tenant warrants that any Uniform Commercial Code financing
statement executed by Tenant shall, upon its face or by Exhibit thereto,
indicate that such financing statement is applicable only to removable personal
property of Tenant located within the Premises. In no event shall the address of
the Property be furnished on a financing statement without qualifying language
as to applicability of the lien only to removable personal property located in
an identified suite leased by Tenant. Should any

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holder of a financing statement executed by Tenant record or place of record a
financing statement that appears to constitute a lien against any interest of
Landlord, Tenant shall, within ten (10) days after filing such financing
statement, cause (a) a copy of the lender security agreement or other documents
to which the financing statement pertains to be furnished to Landlord to
facilitate Landlord’s ability to demonstrate that the lien of such financing
statement is not applicable to Landlord’s interest and (b) Tenant’s lender to
amend such financing statement and any other documents of record to clarify that
any liens imposed thereby are not applicable to any interest of Landlord in the
Property.
22. Indemnification and Exculpation.
     22.1. Subject to Section 22.6 below, Tenant agrees to indemnify, defend and
save Landlord harmless from and against any and all demands, claims,
liabilities, losses, costs, expenses, actions, causes of action, damages or
judgments, and all reasonable expenses (including, without limitation,
reasonable attorneys’ fees, charges and disbursements) incurred in investigating
or resisting the same (collectively, “Claims”) arising from injury to or death
of any person or damage to any property occurring within or about the Property
arising directly or indirectly out of Tenant’s or Tenant’s employees’, agents’
or guests’ use or occupancy of the Property or a breach or default by Tenant in
the performance of any of its obligations hereunder, unless caused solely by
Landlord’s willful misconduct or gross negligence.
     22.2. Landlord agrees to indemnify, defend and save Tenant harmless from
and against any and all Claims arising from injury to or death of any person or
damage to any property occurring within or about the Diversified Space that
arise directly out of Landlord’s obligations under the Diversified Lease after
the Effective Date, unless (a) caused by Tenant’s acts or omissions, or (b)
arising from Tenant’s performance, or Tenant’s failure to perform, any of
Tenant’s obligations under this Lease.
     22.3. Notwithstanding any provision of Section 22.1 to the contrary, but
subject to Section 22.5 below, Landlord shall not be liable to Tenant for, and
Tenant assumes all risk of, damage to personal property or scientific research,
including, without limitation, loss of records kept by Tenant within the
Property and damage or losses caused by fire, electrical malfunction, gas
explosion or water damage of any type (including, without limitation, broken
water lines, malfunctioning fire sprinkler systems, roof leaks or stoppages of
lines), unless any such loss is due to Landlord’s gross negligence, willful
misconduct and/or willful disregard of written notice by Tenant of need for a
repair that Landlord is responsible to make for an unreasonable period of time.
Tenant further waives any claim for injury to Tenant’s business or loss of
income relating to any such damage or destruction of personal property as
described in this Section 22.2.
     22.4. Landlord shall not be liable for any damages arising from any act,
omission or neglect of any third party other than the gross negligence or
willful misconduct of any of Landlord’s officers, employees, agents, general
partners, members, and Lenders (“Landlord Parties”).
     22.5. Tenant acknowledges that security devices and services, if any, while
intended to deter crime, may not in given instances prevent theft or other
criminal acts. Landlord shall not be liable for injuries or losses caused by
criminal acts of third parties, and Tenant assumes the risk that any security
device or service may malfunction or otherwise be circumvented by a criminal. If
Tenant desires protection against such criminal acts, then Tenant shall, at
Tenant’s sole cost and expense, obtain appropriate insurance coverage.
Notwithstanding any contrary provision of this Lease, neither Landlord nor
Tenant shall be liable to the other party for any consequential damages, loss of
business or profit for a breach or default under this Lease; provided that this
sentence shall not limit Landlord’s damages if, as a result of Tenant’s breach
of this Lease: (a) Landlord does not or is unable to lease the Premises to
another party, or (b) a third party is unable to occupy the Premises on the date
specified in such third party’s lease.
     22.6. Tenant shall not be required to indemnify and hold Landlord harmless
from any Claim to any person, property or entity resulting from the grossly
negligent acts or omissions or willful misconduct of the Landlord Parties in
connection with the Landlord Parties’ activities in, on or about the Property,
and Landlord hereby agrees to so indemnify and holds Tenant harmless from any
such Claims.

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     22.7. The provisions of this Article 22 shall survive the expiration or
earlier termination of this Lease.
23. Insurance; Waiver of Subrogation.
     23.1. Landlord shall maintain insurance for the Property (including the
Diversified Space) in amounts equal to full replacement cost (exclusive of the
costs of excavation, foundations and footings, and without reference to
depreciation taken by Landlord upon its books or tax returns) or such lesser
coverage as Landlord may elect, provided that such coverage shall not be less
than ninety percent (90%) of such full replacement cost or the amount of such
insurance Landlord’s lender, mortgagee or beneficiary (each, a “Lender”), if
any, requires Landlord to maintain, providing protection against any peril
generally included within the classification “Fire and Extended Coverage,”
together with insurance against sprinkler damage (if applicable), vandalism and
malicious mischief. Landlord, subject to availability thereof, shall further
insure, if Landlord deems it appropriate, coverage against flood, environmental
hazard, earthquake, loss or failure of building equipment, rental loss during
the period of repairs or rebuilding, workmen’s compensation insurance and
fidelity bonds for employees employed to perform services. Notwithstanding the
foregoing, Landlord may, but shall not be deemed required to, provide insurance
for any improvements installed by Tenant or that are in addition to the standard
improvements customarily furnished by Landlord, without regard to whether or not
such are made a part of or are affixed to the Buildings. Any costs incurred by
Landlord pursuant to this Section 23.1 shall constitute a portion of Insurance
Costs.
     23.2. In addition, Landlord shall carry public liability insurance with a
single limit of not less than Ten Million Dollars ($10,000,000) for death or
bodily injury, or property damage with respect to the Property (including the
Diversified Space). Any costs incurred by Landlord pursuant to this Section 23.2
shall constitute a portion of Insurance Costs.
     23.3. Tenant shall, at its own cost and expense, procure and maintain in
effect, beginning on the Commencement Date or the date of occupancy, whichever
occurs first, and continuing throughout the Term (and occupancy by Tenant, if
any, after termination of this Lease) comprehensive public liability insurance
with limits of not less than Five Million Dollars ($5,000,000) per occurrence
for death or bodily injury and not less than Two Million Dollars ($2,000,000)
for property damage with respect to the Property (including the Diversified
Space).
     23.4. Tenant shall, at its sole cost and expense, procure and maintain in
effect, beginning on the Commencement Date or the date of occupancy, whichever
occurs first, and continuing throughout the Term all insurance required to be
maintained by the Parcel 3 Owner (as defined in the REA) in connection with the
Parcel 3 Land (as defined in the REA) pursuant to Section 6 of the REA.
     23.5. The insurance required to be purchased and maintained by Tenant
pursuant to this Lease shall show, as an additional insured in respect of the
Property, Landlord, BioMed Realty, L.P., BioMed Realty Trust, Inc., Tenant, any
management company retained by Landlord to manage the Property, any ground
lessor and any mortgagee of Landlord required to be named pursuant to its
mortgage documents. All public liability and property damage policies shall
contain a provision that Landlord, although named as an insured, nevertheless
shall be entitled to recovery under said policies for any loss occasioned to it,
its servants, agents and employees by reason of the negligence of Tenant. Said
insurance shall be with companies having a rating of not less than policyholder
rating of A and financial category rating of at least Class XII in “Best’s
Insurance Guide.” Tenant shall obtain for Landlord from the insurance companies
or cause the insurance companies to furnish certificates of coverage to
Landlord. No such policy shall be cancelable or subject to reduction of coverage
or other modification or cancellation except after thirty (30) days’ prior
written notice to Landlord from the insurer. All such policies shall be written
as primary policies, not contributing with and not in excess of the coverage
that Landlord may carry. Tenant’s policy may be a “blanket policy” that
specifically provides that the amount of insurance shall not be prejudiced by
other losses covered by the policy. Tenant shall, at least twenty (20) days
prior to the expiration of such policies, furnish Landlord with renewals or
binders. Tenant agrees that if Tenant does not take out and maintain such
insurance, Landlord may (but shall not be required to) procure said insurance on
Tenant’s behalf and at its cost to be paid by Tenant as Additional Rent.

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     23.6. Tenant assumes the risk of damage to any fixtures, goods, inventory,
merchandise, equipment and leasehold improvements, and Landlord shall not be
liable for injury to Tenant’s business or any loss of income therefrom, relative
to such damage, all as more particularly set forth within this Lease unless
caused by Landlord’s gross negligence or willful misconduct. Tenant shall, at
Tenant’s sole cost and expense, carry such insurance as Tenant desires for
Tenant’s protection with respect to personal property of Tenant or business
interruption.
     23.7. In each instance where Tenant’s insurance is to name additional
insureds, Tenant shall, upon Landlord’s written request, also designate and
furnish certificates evidencing the same to (a) any Lender of Landlord holding a
security interest in the Property or any portion thereof, (b) the landlord under
any lease whereunder Landlord is a tenant of the real property upon which the
Buildings are located if the interest of Landlord is or shall become that of a
tenant under a ground lease rather than that of a fee owner, and (c) any
management company retained by Landlord to manage the Property.
     23.8. Landlord and Tenant each hereby waive any and all rights of recovery
against the other or against the officers, directors, employees, agents and
representatives of the other on account of loss or damage occasioned by such
waiving party or its property or the property of others under such waiving
party’s control, in each case to the extent that such loss or damage is insured
against under any fire and extended coverage insurance policy that either
Landlord or Tenant may have in force at the time of such loss or damage. Such
waivers shall continue so long as their respective insurers so permit. Any
termination of such a waiver shall be by written notice to the other party,
containing a description of the circumstances hereinafter set forth in this
Section 23.8. Landlord and Tenant, upon obtaining the policies of insurance
required or permitted under this Lease, shall give notice to the insurance
carrier or carriers that the foregoing mutual waiver of subrogation is contained
in this Lease. If such policies shall not be obtainable with such waiver or
shall be so obtainable only at a premium over that chargeable without such
waiver, then the party seeking such policy shall notify the other of such
conditions, and the party so notified shall have ten (10) days thereafter to
either (a) procure such insurance with companies reasonably satisfactory to the
other party or (b) agree to pay such additional premium. If the parties do not
accomplish either (a) or (b), then this Section 23.8 shall have no effect during
such time as such policies shall not be obtainable or the party in whose favor a
waiver of subrogation is desired refuses to pay the additional premium. If such
policies shall at any time be unobtainable, but shall be subsequently
obtainable, then neither party shall be subsequently liable for a failure to
obtain such insurance until a reasonable time after notification thereof by the
other party. If the release of either Landlord or Tenant, as set forth in the
first sentence of this Section 23.8, shall contravene Applicable Laws, then the
liability of the party in question shall be deemed not released but shall be
secondary to the other party’s insurer.
24. Damage or Destruction.
     24.1. Subject to Section 24.2, In the event of a partial or complete
destruction of the Premises or a Building by fire or other perils, Landlord
shall commence and proceed diligently with the work of repair, reconstruction
and restoration of the Premises and such Building, as applicable, and this Lease
shall continue in full force and effect.
     24.2. Notwithstanding the terms of this Article 24, Landlord may elect not
to rebuild and/or restore the Premises and the Buildings and instead terminate
this Lease by notifying Tenant in writing of such termination within sixty
(60) days after the date of damage, such notice to include a termination date
giving Tenant ninety (90) days to vacate the Premises, but Landlord may so elect
only if the Premises or any Building shall be damaged by fire or other casualty
or cause or be subject to a condition existing as a result of such a fire or
other casualty or cause, and one or more of the following conditions is present:
(i) in the reasonable judgment of a contractor selected by Landlord and
reasonably approved by Tenant, repairs cannot reasonably be completed within one
hundred eighty (180) days of the date of damage (when such repairs are made
without the payment of overtime or other premiums); (ii) the holder of any
mortgage on the Premises or the Buildings, or ground or underlying lessor with
respect to the Premises or the Buildings (a) shall require that the insurance
proceeds or any portion thereof be used to retire the mortgage debt due to an
impairment of such holder’s collateral, and the remaining proceeds are
insufficient to repair the damage and as a result thereof the deficiency of
insurance proceeds exceeds the “Maximum Amount,” as that term is defined below,
and Landlord elects not to commence repair to the Premises or the Buildings
within one (1) year of such damage or

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destruction, or (b) shall terminate the ground or underlying lease, as the case
may be; (iii) the dollar amount of the damage or condition arising as a result
of such damage which is not fully covered by Landlord’s insurance policies (and
that would not be fully covered by Landlord’s insurance policies if Landlord had
carried the coverage required under this Lease) including any deductible amount,
is equal to or greater than Two Hundred and Fifty Thousand Dollars ($250,000)
(the “Maximum Amount”), which Maximum Amount shall, as of the date of
termination of this Lease, be equal to the product of (a) the Maximum Amount and
(b) a fraction, the numerator of which is the number of full months remaining in
the Term, or when appropriate the Extended Term then applicable, as of the date
of the termination of this Lease, and the denominator of which is 180 (or, if
applicable, 60 during an Extended Term) and Landlord elects not to commence
repair to the Premises or the Buildings within one (1) year of such damage or
destruction; or (iv) the damage occurs during the last twenty-four (24) months
of the Term, as such Term may have been extended by Tenant pursuant to this
Lease; provided, however, that if Landlord does not elect to terminate this
Lease pursuant to Landlord’s termination right as provided above, and the
repairs of such damage cannot, in the reasonable opinion of a contractor
selected by Landlord and reasonably approved by Tenant, be completed within
twelve (12) months after being commenced, Tenant may elect, not later than ten
(10) business days after the date of such damage, to terminate this Lease by
written notice to Landlord effective as of the date specified in the notice. At
any time, from time to time, after the date occurring thirty (30) days after the
date of the damage, but in no event more than once every forty-five (45) days,
Tenant may request that Landlord provide Tenant with a certificate from the
architect or contractor described above setting forth such architect’s or
contractors’ reasonable opinion of the date of completion of the repairs and
Landlord shall respond to such request within fifteen (15) business days.
     24.3. Landlord shall give written notice to Tenant of its election not to
repair, reconstruct or restore the Premises or the Buildings within sixty
(60) days following the date of damage or destruction.
     24.4. Upon any termination of this Lease under any of the provisions of
this Article 24, the parties shall be released thereby without further
obligation to the other from the date possession of the Premises is surrendered
to Landlord, except with regard to (a) items occurring prior to the damage or
destruction and (b) provisions of this Lease that, by their express terms,
survive the expiration or earlier termination hereof.
     24.5. In the event of repair, reconstruction and restoration as provided in
this Article 24, all Rent to be paid by Tenant under this Lease shall be abated
proportionately based on the extent to which Tenant’s use of the Premises is
impaired during the period of such repair, reconstruction or restoration, unless
Landlord provides Tenant with other space during the period of repair that, in
Tenant’s reasonable discretion, is suitable for the temporary conduct of
Tenant’s business; provided, however, that the amount of such abatement shall be
reduced by the proceeds of lost rental income insurance actually received by
Tenant with respect to the Premises.
     24.6. Notwithstanding anything to the contrary contained in this
Article 24, should Landlord be delayed or prevented from completing the repair,
reconstruction or restoration of the damage or destruction to the Premises or
the Buildings after the occurrence of such damage or destruction by Force
Majeure, then the time for Landlord to commence or complete repairs shall be
extended on a day-for-day basis.
     24.7. If Landlord is obligated to or elects to repair, reconstruct or
restore as herein provided, then Landlord shall be obligated to make such
repair, reconstruction or restoration only with regard to those portions of the
Premises and the Buildings that were originally provided at Landlord’s expense.
The repair, reconstruction or restoration of improvements not originally
provided by Landlord or at Landlord’s expense shall be the obligation of Tenant.
In the event Tenant has elected to upgrade certain improvements, Landlord shall,
upon the need for replacement due to an insured loss, construct the improvements
to the standard that existed prior to such damage, unless Tenant again elects to
upgrade such improvements and pay any incremental costs related thereto, except
to the extent that excess insurance proceeds, if received, are adequate to
provide such upgrades, in addition to providing for basic repair, reconstruction
and restoration of the Premises and the Buildings.
     24.8. In addition to its termination right in Section 24.2 above, Tenant
shall have the right to terminate this Lease if any damage to the Buildings or
the Premises: (a) occurs during

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the last twelve (12) months of the Term of this Lease (including the last twelve
(12) months of any Extended Term, if applicable); (b) Tenant is unable to occupy
more than twenty-five percent (25%) of the Premises; and (c) in the reasonable
judgment of a contractor selected by Landlord and reasonably approved by Tenant,
such repairs cannot reasonably be completed within twenty-five percent (25%) of
the remaining term of this Lease (including any Extended Term, if applicable).
25. Eminent Domain.
     25.1. Total Taking — Termination. In the event the whole of the Premises,
or such part thereof so that reconstruction of the Premises will not result in
the Premises being reasonably suitable (as reasonably determined by Landlord and
Tenant) for Tenant’s continued occupancy for the uses and purposes permitted by
this Lease, shall be taken for any public or quasi-public purpose by any lawful
power or authority by exercise of the right of appropriation, condemnation or
eminent domain, or sold to prevent such taking, Tenant or Landlord may terminate
this Lease effective as of the date possession is required to be surrendered to
said authority.
     25.2. Partial Taking. In the event of a partial taking of the Premises, or
of drives, walkways or parking areas serving the Premises for any public or
quasi-public purpose by any lawful power or authority by exercise of right of
appropriation, condemnation, or eminent domain, or sold to prevent such taking,
then, without regard to whether any portion of the Premises occupied by Tenant
was so taken, Landlord may elect to terminate this Lease as of such taking if
such taking is, in Landlord’s sole opinion, of a material nature such as to make
it uneconomical to continue use of the unappropriated portion for purposes of
renting office or laboratory space.
     25.3. Tenant shall be entitled to any award that is specifically awarded as
compensation for (a) the taking of Tenant’s personal property that was installed
at Tenant’s expense and (b) the costs of Tenant moving to a new location. Except
as set forth in this Article 25, any award for such taking shall be the property
of Landlord.
     25.4. If, upon any taking of the nature described in Sections 25.1 and
25.2, this Lease continues in effect, then (a) Landlord shall promptly proceed
to restore the Premises to substantially their same condition prior to such
partial taking and this Lease shall, as to the part so taken terminate as of the
date that possession of such part of the Premises is taken and the Basic Annual
Rent shall be reduced in the same proportion that the floor area of the portion
of the Buildings so taken (less any addition thereto by reason of any
reconstruction) bears to the original floor area of the Buildings, and (b) in
the event of a partial taking of the Diversified Space, (i) Tenant agrees to
sublease to Diversified, at no cost to Diversified, up to 6,600 rentable square
feet in the Expansion Premises or in the Existing Parcel 1 and Parcel 2
Buildings in accordance with Diversified’s rights under Article 20 of the
Diversified Lease, (ii) Tenant shall be entitled to (1) an abatement of fifty
percent (50%) of the Expansion Premises Basic Annual Rent for the portion of the
Expansion Premises (if any) occupied by Diversified, and (2) an abatement of
fifty percent (50%) of the Basic Annual Rent under the Illumina Lease for the
portion of the Premises (as defined in the Illumina Lease) (if any) occupied by
Diversified, (iii) Landlord shall pay all costs associated with the relocation
of Diversified, including, but not limited to, costs of tenant improvements and
moving costs, and (iv) Tenant shall not be entitled to an abatement of any of
the operating expenses, including Taxes, Insurance Costs, Utility Costs and all
other insurance and utility costs and expenses in connection with the portion of
the Expansion Premises or the Premises (as defined in the Illumina Lease)
occupied by Diversified
26. Defaults and Remedies.
     26.1. Late payment by Tenant to Landlord of Rent and other sums due shall
cause Landlord to incur costs not contemplated by this Lease, the exact amount
of which shall be extremely difficult and impracticable to ascertain. Such costs
include, but are not limited to, processing and accounting charges and late
charges that may be imposed on Landlord by the terms of any mortgage or trust
deed covering the Property. Therefore, if any installment of Rent due from
Tenant is not received by Landlord within five (5) days after written notice
that such payment is due, Tenant shall pay to Landlord an additional sum of
three percent (3%) of the overdue Rent as a late charge. The parties agree that
this late charge represents a fair and reasonable estimate of the costs that
Landlord shall incur by reason of late payment by Tenant. Notwithstanding the
foregoing, Landlord shall waive the imposition of such late charge for the

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first late payment of Rent due hereunder in any calendar year of the Term. In
addition to the late charge, Rent not paid when due shall bear interest from the
fifth (5th) day after the date due until paid at the lesser of (a) twelve
percent (12%) per annum or (b) the maximum rate permitted by Applicable Laws.
     26.2. No payment by Tenant or receipt by Landlord of a lesser amount than
the Rent payment herein stipulated shall be deemed to be other than on account
of the Rent, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment as Rent be deemed an accord and satisfaction,
and Landlord may accept such check or payment without prejudice to Landlord’s
right to recover the balance of such Rent or pursue any other remedy provided in
this Lease or in equity or at law. If a dispute shall arise as to any amount or
sum of money to be paid by Tenant to Landlord hereunder, Tenant shall have the
right to make payment “under protest,” such payment shall not be regarded as a
voluntary payment, and there shall survive the right on the part of Tenant to
institute suit for recovery of the payment paid under protest.
     26.3. If Tenant fails to pay any sum of money (other than Basic Annual
Rent) required to be paid by it hereunder, or shall fail to perform any other
act on its part to be performed hereunder, Landlord may, without waiving or
releasing Tenant from any obligations of Tenant, but shall not be obligated to,
make such payment or perform such act; provided that (a) such failure by Tenant
continues beyond all applicable notice and cure periods after Landlord delivers
notice to Tenant demanding performance by Tenant; or (b) such failure by Tenant
reasonably could be expected to result in a violation of Applicable Laws, damage
to property or injury to any person, or the cancellation of an insurance policy
maintained by Landlord. Notwithstanding the foregoing, in the event of an
emergency, Landlord shall have the right to enter the Property and act in
accordance with its rights as provided elsewhere in this Lease. Tenant shall pay
to Landlord as Additional Rent all sums so paid or incurred by Landlord,
together with interest thereon, from the date such sums were paid or incurred,
at the annual rate equal to twelve percent (12%) per annum or highest rate
permitted by Applicable Laws, whichever is less.
     26.4. The occurrence of any one or more of the following events shall
constitute a “Default” hereunder by Tenant:
          26.4.1 The failure by Tenant to make any payment of Rent, as and when
due, where such failure shall continue for a period of five (5) days after
written notice thereof from Landlord to Tenant;
          26.4.2 The failure by Tenant to observe or perform any obligation or
covenant contained herein to be performed by Tenant (other than described in
Subsections 26.4.1 and 26.4.2), where such failure shall continue for a period
of ten (10) business days after written notice thereof from Landlord to Tenant;
provided that, if the nature of Tenant’s default is such that it reasonably
requires more than ten (10) business days to cure, Tenant shall not be deemed to
be in default if Tenant shall commence such cure within said ten (10) business
day period and thereafter diligently prosecute the same to completion;
          26.4.3 Tenant makes an assignment for the benefit of creditors;
          26.4.4 A receiver, trustee or custodian is appointed to or does take
title, possession or control of all or substantially all of Tenant’s assets;
          26.4.5 Tenant files a voluntary petition under the United States
Bankruptcy Code or any successor statute (the “Bankruptcy Code”) or an order for
relief is entered against Tenant pursuant to a voluntary or involuntary
proceeding commenced under any chapter of the Bankruptcy Code;
          26.4.6 Any involuntary petition if filed against Tenant under any
chapter of the Bankruptcy Code and is not dismissed within sixty (60) days;
          26.4.7 Failure to deliver an estoppel certificate in accordance with
Article 31;
          26.4.8 The occurrence of a monetary or material non-monetary default
under the Illumina Lease;

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          26.4.9 The occurrence of any Transfer that is not in compliance with
the provisions of Article 27, where such failure shall continue for a period of
ten (10) days after written notice thereof from Landlord to Tenant; or
          26.4.10 Tenant’s interest in this Lease is attached, executed upon or
otherwise judicially seized and such action is not released within one hundred
twenty (120) days of the action.
     No notice given above shall be deemed a forfeiture or a termination of this
Lease unless Landlord elects otherwise in such notice.
     26.5. In the event of a Default by Tenant, and at any time thereafter, with
or without notice or demand and without limiting Landlord in the exercise of any
right or remedy that Landlord may have, Landlord shall be entitled to terminate
Tenant’s right to possession of the Premises by any lawful means, in which case
this Lease shall terminate and Tenant shall immediately thereafter, surrender
possession of the Premises to Landlord. In such event, Landlord shall have the
right to re-enter and remove all persons and property, and such property may be
removed and stored in a public warehouse or elsewhere at the cost and for the
account of Tenant, all without service of notice or resort to legal process and
without being deemed guilty of trespass or becoming liable for any loss or
damage that may be occasioned thereby. In the event that Landlord shall elect to
so terminate this Lease, then Landlord shall be entitled to recover from Tenant
all damages incurred by Landlord by reason of Tenant’s default, including,
without limitation:
          26.5.1 The worth at the time of award of the unpaid Rent that had been
earned at the time of termination; plus
          26.5.2 The worth at the time of award of the amount by which the
unpaid Rent that would have been earned during the period commencing with
termination of this Lease and ending at the time of award exceeds that portion
of the loss of Landlord’s rental income from the Premises that Tenant proves
could have been reasonably avoided; plus
          26.5.3 The worth at the time of award of the amount by which the
unpaid Rent for the balance of the Term after the time of award exceeds the
amount of the loss of Landlord’s rental income from the Premises that Tenant
proves could be reasonably avoided; plus
          26.5.4 Any other amount necessary to compensate Landlord for all the
detriment caused by Tenant’s failure to perform its obligations under this Lease
or that in the ordinary course of things would be likely to result therefrom,
including, without limitation, the cost of restoring the Premises to the
condition required under the terms of this Lease.
As used in Subsections 26.5.1 and 26.5.2, “worth at the time of award” shall be
computed by allowing interest at the rate specified in Section 26.1. As used in
Subsection 26.5.3 above, the “worth at the time of the award” shall be computed
by taking the present value of such amount, using the discount rate of the
Federal Reserve Bank of San Francisco at the time of the award plus one
(1) percentage point.
     26.6. In addition to any other remedies available to Landlord at law or in
equity and under this Lease, Landlord shall have the remedy described in
California Civil Code Section 1951.4 (Landlord may continue this Lease in effect
after Tenant’s Default and abandonment and recover Rent as it becomes due,
provided Tenant has the right to sublet or assign, subject only to reasonable
limitations). In addition, Landlord shall not be liable in any way whatsoever
for its failure or refusal to relet the Premises. For purposes of this
Section 26.6, the following acts by Landlord will not constitute the termination
of Tenant’s right to possession of the Premises:
     Acts of maintenance or preservation or efforts to relet the Premises,
including, but not limited to, alterations, remodeling, redecorating, repairs,
replacements and/or painting as Landlord shall consider advisable for the
purpose of reletting the Premises or any part thereof, or
     The appointment of a receiver upon the initiative of Landlord to protect
Landlord’s interest under this Lease or in the Property.

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Notwithstanding the foregoing, in the event of a Default by Tenant, Landlord may
elect at any time to terminate this Lease and to recover damages to which
Landlord is entitled.
     26.7. In the event Landlord elects to terminate this Lease and relet the
Premises, Landlord may execute any new lease in its own name. Tenant hereunder
shall have no right or authority whatsoever to collect any Rent from such
tenant. The proceeds of any such reletting shall be applied as follows:
          26.7.1 First, to the payment of any indebtedness other than Rent due
hereunder from Tenant to Landlord, including, without limitation, storage
charges or brokerage commissions owing from Tenant to Landlord as the result of
such reletting;
          26.7.2 Second, to the payment of the costs and expenses of reletting
the Premises, including (a) alterations and repairs that Landlord deems
reasonably necessary and advisable and (b) reasonable attorneys’ fees, charges
and disbursements incurred by Landlord in connection with the retaking of the
Premises and such reletting;
          26.7.3 Third, to the payment of Rent and other charges due and unpaid
hereunder; and
          26.7.4 Fourth, to the payment of future Rent and other damages payable
by Tenant under this Lease.
     26.8. All of Landlord’s rights, options and remedies hereunder shall be
construed and held to be nonexclusive and cumulative. Landlord shall have the
right to pursue any one or all of such remedies, or any other remedy or relief
that may be provided by Applicable Laws, whether or not stated in this Lease. No
waiver of any default of Tenant hereunder shall be implied from any acceptance
by Landlord of any Rent or other payments due hereunder or any omission by
Landlord to take any action on account of such default if such default persists
or is repeated, and no express waiver shall affect defaults other than as
specified in said waiver.
     26.9. Landlord’s termination of (a) this Lease or (b) Tenant’s right to
possession of the Premises shall not relieve Tenant of any liability to Landlord
that has previously accrued or that shall arise based upon events that occurred
prior to the later to occur of (i) the date of Lease termination or (ii) the
date Tenant surrenders possession of the Premises.
     26.10. In the event of a Default by Tenant hereunder, to the fullest extent
required by Applicable Laws (to the extent such Applicable Laws cannot be
modified by contract), Landlord shall use commercially reasonable efforts to
mitigate its damages.
     26.11. To the extent permitted by Applicable Laws, Tenant waives any and
all rights of redemption granted by or under any present or future Applicable
Laws if Tenant is evicted or dispossessed for any cause, or if Landlord obtains
possession of the Premises due to Tenant’s default hereunder or otherwise.
     26.12. Landlord shall not be in default under this Lease unless Landlord
fails to perform obligations required of Landlord within a reasonable time, but
in no event shall such failure continue for more than thirty (30) days after
written notice from Tenant specifying the nature of Landlord’s failure;
provided, however, that if the nature of Landlord’s obligation is such that more
than thirty (30) days are required for its performance, then Landlord shall not
be in default if Landlord commences performance within such thirty (30) day
period and thereafter diligently prosecutes the same to completion. In the event
of any default by Landlord (beyond the expiration of all applicable notice and
cure periods), Tenant may exercise any rights and remedies available at law or
in equity.
     26.13. In the event of any default by Landlord, Tenant shall give notice by
registered or certified mail to any (a) beneficiary of a deed of trust or
(b) mortgagee under a mortgage covering the Property or any portion thereof and
to any landlord of any lease of land upon or within which the Premises are
located, and shall offer such beneficiary, mortgagee or landlord a reasonable
opportunity to cure the default, including time to obtain possession of the
Premises by power of sale or a judicial action if such should prove necessary to
effect a cure; provided that Landlord shall furnish to Tenant in writing, upon
written request by Tenant, the names and addresses of all such persons who are
to receive such notices; provided, however, in no event shall such reasonable
opportunity to cure exceed an additional sixty (60) days within which to

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cure or correct such default (or if such default cannot be cured or corrected
within that time, then such additional time as may be necessary if such
mortgagee has commenced within such sixty (60) day period and is diligently
pursuing the remedies or steps necessary to cure or correct such default).
27. Assignment or Subletting.
     27.1. Except as hereinafter expressly permitted, Tenant shall not, either
voluntarily or by operation of Applicable Laws, directly or indirectly sell,
hypothecate, assign, pledge, encumber or otherwise transfer this Lease, or
sublet the Premises or any part hereof (each, a “Transfer”), without Landlord’s
prior written consent, which consent Landlord may not unreasonably withhold,
condition or delay. Tenant shall have the right to Transfer without Landlord’s
prior written consent the Premises or any portion thereof to any person or
entity that: (a) directly, or indirectly through one or more intermediaries,
(i) controls, is controlled by, or is under common control with Tenant,
(ii) acquires all or substantially all of the assets of Tenant, or (iii) is the
resulting entity of a merger or consolidation of Tenant with another entity; and
(b) has a net worth equal to Two Hundred Million Dollars ($200,000,000) (each, a
“Tenant’s Affiliate”), provided (1) Tenant shall notify Landlord in writing at
least ten (10) days prior to the effectiveness of such Transfer to Tenant’s
Affiliate (an “Exempt Transfer”); and (2) Tenant remains obligated under this
Lease. For purposes of Exempt Transfers, “control” requires both (x) owning
(directly or indirectly) more than fifty-one percent (51%) of the stock or other
equity interests of another person and (y) possessing, directly or indirectly,
the power to direct or cause the direction of the management and policies of
such person.
     27.2. In the event Tenant desires to effect a Transfer, then, at least
twenty (20) business days but not more than one hundred twenty (120) days prior
to the date when Tenant desires the assignment or sublease to be effective (the
“Transfer Date”), Tenant shall provide written notice to Landlord (the “Transfer
Notice”) containing information (including references) concerning the character
of the proposed transferee, assignee or sublessee; the Transfer Date; any
ownership or commercial relationship between Tenant and the proposed transferee,
assignee or sublessee; and the consideration and all other material terms and
conditions of the proposed Transfer; and evidence respecting the relevant
business experience and financial responsibility and status of the proposed
transferee, assignee or sublessee, all in such detail as Landlord shall
reasonably require (the “Transfer Information”). Tenant shall also tender to
Landlord the actual, documented and reasonable attorneys’ fees and other costs
or overhead expenses incurred by Landlord in reviewing Tenant’s request for such
Transfer (not to exceed Two Thousand Five Hundred Dollars ($2,500.00) in the
aggregate per Transfer request).
     27.3. Landlord, in determining whether consent should be given to a
proposed Transfer, may give consideration to (a) the financial strength of such
assignee (notwithstanding Tenant remaining liable for Tenant’s performance), and
(b) any change in use that such transferee, assignee or sublessee proposes to
make in the use of the Premises. In no event shall Landlord be deemed to be
unreasonable for declining to consent to a Transfer to a transferee, assignee or
sublessee of lacking financial qualifications or seeking a change in the
Permitted Use, or jeopardizing directly or indirectly the status of Landlord or
any of Landlord’s affiliates as a Real Estate Investment Trust under the
Internal Revenue Code of 1986 (the “Code”). Notwithstanding anything contained
in this Lease to the contrary, (w) no Transfer shall be consummated on any basis
such that the rental or other amounts to be paid by the occupant, assignee,
manager or other transferee thereunder would be based, in whole or in part, on
the income or profits derived by the business activities of such occupant,
assignee, manager or other transferee; (x) Tenant shall not furnish or render
any services to an occupant, assignee, manager or other transferee with respect
to whom transfer consideration is required to be paid, or manage or operate the
Premises or any capital additions so transferred, with respect to which transfer
consideration is being paid; (y) Tenant shall not consummate a Transfer with any
person in which Landlord owns an interest, directly or indirectly (by applying
constructive ownership rules set forth in Section 856(d)(5) of the Code); and
(z) Tenant shall not consummate a Transfer with any person or in any manner that
could cause any portion of the amounts received by Landlord pursuant to this
Lease or any sublease, license or other arrangement for the right to use, occupy
or possess any portion of the Premises to fail to qualify as “rents from real
property” within the meaning of Section 856(d) of the Code, or any similar or
successor provision thereto or which could cause any other income of Landlord to
fail to qualify as income described in Section 856(c)(2) of the Code. Landlord
shall respond to Tenant’s proposed Transfer within twenty (20) days after
receipt of Tenant’s Transfer request. If Landlord fails to respond within such
twenty

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(20) day period, then Tenant shall provide Landlord with a second written notice
stating in bold and all caps 12 point font that “Landlord’s failure to respond
to Tenant’s Transfer request within five (5) days after Landlord’s receipt of
this second notice shall be deemed approval by Landlord,” and if Landlord does
not respond within such five (5) day period, then Landlord shall be deemed to
have approved such Transfer request.
     27.4. As conditions precedent to Tenant subleasing the Premises or to
Landlord considering a request by Tenant to Tenant’s transfer of rights or
sharing of the Premises, Landlord may require any or all of the following:
          27.4.1 Tenant shall remain fully liable under this Lease during the
unexpired Term;
          27.4.2 Tenant shall provide Landlord with the Transfer Information;
          27.4.3 If Tenant’s transfer of rights or sharing of the Premises
provides for the receipt by, on behalf of or on account of Tenant of any
consideration of any kind whatsoever (including, without limitation, a premium
rental for a sublease or lump sum payment for an assignment) in excess of the
rental and other charges due to Landlord under this Lease, Tenant shall pay
fifty percent (50%) of all of such excess to Landlord, after deductions for
tenant improvement allowances actually provided by Tenant, alterations
(including hard and soft costs), cash and other monetary concessions, marketing
expenses, free rent, brokerage commissions and the actual documented and
reasonable attorneys fees necessarily incurred in negotiating such sublease or
assignment. If said consideration consists of cash paid to Tenant, payment to
Landlord shall be made upon receipt by Tenant of such cash payment;
          27.4.4 The proposed transferee, assignee or sublessee shall agree
that, in the event Landlord gives such proposed transferee, assignee or
sublessee notice that Tenant is in default under this Lease, such proposed
transferee, assignee or sublessee shall thereafter make all payments otherwise
due Tenant directly to Landlord, which payments shall be received by Landlord
without any liability being incurred by Landlord, except to credit such payment
against those due by Tenant under this Lease, and any such proposed transferee,
assignee or sublessee shall agree to attorn to Landlord or its successors and
assigns should this Lease be terminated for any reason; provided, however, that
in no event shall Landlord or its Lenders, successors or assigns be obligated to
accept such attornment;
          27.4.5 Any such consent to Transfer shall be effected on Landlord’s
forms, subject to changes by Tenant that are satisfactory to Landlord in its
reasonable discretion;
          27.4.6 Tenant shall not then be in default hereunder (beyond the
expiration of all applicable notice and cure periods) in any respect;
          27.4.7 Such proposed transferee, assignee or sublessee’s use of the
Premises shall not be inconsistent with the Permitted Use;
          27.4.8 Landlord shall not be bound by any provision of any agreement
pertaining to the Transfer, except for Landlord’s written consent to the same;
          27.4.9 Tenant shall pay all transfer and other taxes (including
interest and penalties) assessed or payable for any Transfer;
          27.4.10 Landlord’s consent (or waiver of its rights) for any Transfer
shall not waive Landlord’s right to consent to any later Transfer;
          27.4.11 Tenant shall deliver to Landlord one executed copy of any and
all written instruments evidencing the Transfer; and
          27.4.12 A list of Hazardous Materials (as defined in Section 40.6
below), certified by the proposed transferee, assignee or sublessee to be true
and correct, that the proposed transferee, assignee or sublessee intends to use
or store in the Property. Additionally, Tenant shall deliver to Landlord, on or
before the date any proposed transferee, assignee or sublessee takes occupancy
of the Premises, all of the items relating to Hazardous Materials of such
proposed transferee, assignee or sublessee as described in Section 40.2.

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     27.5. Any Transfer that is not in compliance with the provisions of this
Article 27 shall be void and constitute a “Default” hereunder.
     27.6. The consent by Landlord to a Transfer shall not relieve Tenant or
proposed transferee, assignee or sublessee from obtaining Landlord’s consent to
any further Transfer, nor shall it release Tenant or any proposed transferee,
assignee or sublessee of Tenant from full and primary liability under this
Lease.
     27.7. Notwithstanding any Transfer, Tenant shall remain fully and primarily
liable for the payment of all Rent and other sums due or to become due
hereunder, and for the full performance of all other terms, conditions and
covenants to be kept and performed by Tenant. The acceptance of Rent or any
other sum due hereunder, or the acceptance of performance of any other term,
covenant or condition thereof, from any person or entity other than Tenant shall
not be deemed a waiver of any of the provisions of this Lease or a consent to
any Transfer.
     27.8. Licenses to Business Affiliates. Notwithstanding any contrary
provision of this Article 27, the original Tenant named hereunder (but not any
assignee or subtenant) shall have the right, without the receipt of Landlord’s
consent, but on prior written notice to Landlord, to license (but not sublease)
up to an aggregate of up to ten percent (10%) of the rentable square feet of the
Expansion Premises to individuals or entities (each, a “Business Affiliate”),
which license to a Business Affiliate shall be on and subject to all of the
following conditions: (i) Tenant shall have a direct contractual business
relationship (relating to a primary business of Tenant conducted in the
Expansion Premises and other than Business Affiliate’s use of the Expansion
Premises) with each such Business Affiliate; (ii) each such Business Affiliate
shall be of a character and reputation consistent with the quality of the
Buildings; (iii) each such license shall clearly specify that it is only a
contract right and that the Business Affiliate is not a subtenant and has no
interest in real property; (iv) each such Business Affiliate’s use of the
Expansion Premises is in a manner consistent with the Permitted Use; (v) no
demising walls or separate entrances shall be constructed in the Expansion
Premises to accommodate any such license; (vi) the term of such license shall
not exceed six (6) months; and (vii) the licensee shall pay no rent or other
compensation to Tenant in respect of such license. No such license shall relieve
Tenant from any liability under this Lease.
     27.9. If Tenant sublets the Premises or any portion thereof, Tenant hereby
immediately and irrevocably assigns to Landlord, as security for Tenant’s
obligations under this Lease, all rent from any such subletting, and appoints
Landlord as assignee and attorney-in-fact for Tenant, and Landlord (or a
receiver for Tenant appointed on Landlord’s application) may collect such rent
and apply it toward Tenant’s obligations under this Lease; provided that, until
the occurrence of a Default (beyond the expiration at all applicable notice and
cure periods) by Tenant, Tenant shall have the right to collect such rent.
28. Attorneys’ Fees. If either party commences an action against the other party
arising out of or in connection with this Lease, then the substantially
prevailing party shall be entitled to have and recover from the other party
reasonable attorneys’ fees, charges and disbursements and costs of suit.
29. [Intentionally Omitted].
30. Definition of Landlord. With regard to obligations imposed upon Landlord
pursuant to this Lease, the term “Landlord,” as used in this Lease, shall refer
only to Landlord or Landlord’s then-current successor-in-interest. In the event
of any transfer, assignment or conveyance of Landlord’s interest in this Lease
or in Landlord’s fee title to or leasehold interest in the Property, as
applicable, Landlord herein named (and in case of any subsequent transfers or
conveyances, the subsequent Landlord) shall be automatically freed and relieved,
from and after the date of such transfer, assignment or conveyance, from all
liability for the performance of any covenants or obligations contained in this
Lease thereafter to be performed by Landlord and, without further agreement, the
transferee, assignee or conveyee of Landlord’s in this Lease or in Landlord’s
fee title to or leasehold interest in the Property, as applicable, shall be
deemed to have assumed and agreed to observe and perform any and all covenants
and obligations of Landlord hereunder during the tenure of its interest in this
Lease or the Property. Landlord or any subsequent Landlord may transfer its
interest in the Property or this Lease without Tenant’s consent.

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31. Estoppel Certificate. Tenant shall, within fifteen (15) days of receipt of
written notice from Landlord, execute, acknowledge and deliver a statement in
writing substantially in the form attached to this Lease as Exhibit I, or on any
other commercially reasonable form reasonably requested by a proposed Lender or
purchaser, (a) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of such modification and certifying
that this Lease as so modified is in full force and effect) and the dates to
which rental and other charges are paid in advance, if any, (b) acknowledging
that there are not, to Tenant’s knowledge, any uncured defaults on the part of
Landlord hereunder, or specifying such defaults if any are claimed, and
(c) setting forth such further information with respect to this Lease or the
Property as may be reasonably requested thereon. Any such statement may be
relied upon by any prospective purchaser or encumbrancer of all or any portion
of the real property of which the Premises are a part. Tenant’s failure to
deliver such statement within such the prescribed time shall, at Landlord’s
option, constitute a Default under this Lease, and, in any event, shall be
binding upon Tenant that this Lease is in full force and effect and without
modification except as may be represented by Landlord in any certificate
prepared by Landlord and delivered to Tenant for execution and that all other
statements set forth in such certificate are true and correct. Landlord shall,
within fifteen (15) days of receipt of written notice from Tenant but in no
event more than once every twelve (12) months, provide to Tenant an estoppel
certificate signed by Landlord, (a) certifying that this Lease is unmodified and
in full force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease as so modified is in full force and
effect) and the dates to which rental and other charges are paid in advance, if
any, and (b) acknowledging that there are not, to Landlord’s knowledge, any
uncured defaults on the part of Tenant hereunder, or specifying such defaults if
any are claimed.
32. Joint and Several Obligations. If more than one person or entity executes
this Lease as Tenant, then:
     32.1. Each of them is jointly and severally liable for the keeping,
observing and performing of all of the terms, covenants, conditions, provisions
and agreements of this Lease to be kept, observed or performed by Tenant; and
     32.2. The term “Tenant” as used in this Lease shall mean and include each
of them, jointly and severally. The act of, notice from, notice to, refund to,
or signature of any one or more of them with respect to the tenancy under this
Lease, including, without limitation, any renewal, extension, expiration,
termination or modification of this Lease, shall be binding upon each and all of
the persons executing this Lease as Tenant with the same force and effect as if
each and all of them had so acted, so given or received such notice or refund,
or so signed.
33. Limitation of Landlord’s Liability.
     33.1. If Landlord is in default under this Lease and, as a consequence,
Tenant recovers a monetary judgment against Landlord, the judgment shall be
satisfied only out of (a) the proceeds of sale received on execution of the
judgment and levy against the right, title and interest of Landlord in the
Property, (b) rent or other income from such real property receivable by
Landlord, (c) the consideration received by Landlord from the sale, financing,
refinancing or other disposition of all or any part of Landlord’s right, title
or interest in the Property and (d) any casualty insurance proceeds which
Landlord receives for damage to the Property.
     33.2. Landlord shall not be personally liable for any deficiency under this
Lease. If Landlord is a partnership or joint venture, then the partners of such
partnership shall not be personally liable for Landlord’s obligations under this
Lease, and no partner of Landlord shall be sued or named as a party in any suit
or action, and service of process shall not be made against any partner of
Landlord except as may be necessary to secure jurisdiction of the partnership or
joint venture. If Landlord is a corporation, then the shareholders, directors,
officers, employees and agents of such corporation shall not be personally
liable for Landlord’s obligations under this Lease, and no shareholder,
director, officer, employee or agent of Landlord shall be sued or named as a
party in any suit or action, and service of process shall not be made against
any shareholder, director, officer, employee or agent of Landlord. If Landlord
is a limited liability company, then the members of such limited liability
company shall not be personally liable for Landlord’s obligations under this
Lease, and no member of Landlord shall be sued or named as a party in any suit
or action, and service of process shall not be made against any member of
Landlord except as may be necessary to secure jurisdiction of the limited
liability company. No partner, shareholder, director, employee, member or agent
of Landlord shall be required to

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answer or otherwise plead to any service of process, and no judgment shall be
taken or writ of execution levied against any partner, shareholder, director,
employee or agent of Landlord.
     33.3. If Tenant is a partnership or joint venture, then the partners of
such partnership shall not be personally liable for Tenant’s obligations under
this Lease, and no partner of Tenant shall be sued or named as a party in any
suit or action, and service of process shall not be made against any partner of
Tenant except as may be necessary to secure jurisdiction of the partnership or
joint venture. If Tenant is a corporation, then the shareholders, directors,
officers, employees and agents of such corporation shall not be personally
liable for Tenant’s obligations under this Lease, and no shareholder, director,
officer, employee or agent of Tenant shall be sued or named as a party in any
suit or action, and service of process shall not be made against any
shareholder, director, officer, employee or agent of Tenant. If Tenant is a
limited liability company, then the members of such limited liability company
shall not be personally liable for Tenant’s obligations under this Lease, and no
member of Tenant shall be sued or named as a party in any suit or action, and
service of process shall not be made against any member of Tenant except as may
be necessary to secure jurisdiction of the limited liability company. No
partner, shareholder, director, employee, member or agent of Tenant shall be
required to answer or otherwise plead to any service of process, and no judgment
shall be taken or writ of execution levied against any partner, shareholder,
director, employee or agent of Tenant. Notwithstanding the foregoing, in no
event shall the provisions of this Section 33.3 relieve Tenant’s partners,
shareholders, directors, employees, members or agents of any personal liability
arising out of, or in connection with, such partner’s, shareholder’s,
director’s, employee’s, member’s or agent’s gross negligence or willful
misconduct.
     33.4. Each of the covenants and agreements of this Article 33 shall be
applicable to any covenant or agreement either expressly contained in this Lease
or imposed by Applicable Laws and shall survive the expiration or earlier
termination of this Lease.
34. Control by Landlord.
     34.1. Subject to Section 34.2, Landlord and Landlord’s offices, employees,
lenders, agents, architects, engineering consultants, design team, general
contractor, and subcontractors (collectively “Landlord’s Agents”) shall have the
right, at any time, to enter the Property and the Buildings to commence and
prosecute the construction of Landlord’s Construction Work, the Tenant
Improvements and to attend to all other activities related thereto.
     34.2. Landlord and Landlord’s Agents may, at any and all reasonable times
during non-business hours (or during business hours if Tenant so requests), and
upon twenty-four (24) hours’ prior notice (provided that no time restrictions
shall apply or advance notice be required if an emergency necessitates immediate
entry), enter the Property to (a) inspect the same and to determine whether
Tenant is in compliance with its obligations hereunder, (b) supply any service
Landlord is required to provide hereunder, (c) show the Property to prospective
purchasers or tenants during the final year of the Term, (d) post notices of
nonresponsibility, (e) access the telephone equipment, electrical substation and
fire risers, or (f) alter, improve or repair any portion of the Buildings. In
connection with any such alteration, improvement or repair as described in
Subsection 34.2(f) above, Landlord and Landlord’s Agents may erect in the
Property scaffolding and other structures reasonably required for the
alteration, improvement or repair work to be performed. Subject to Section 18.5
above, in no event shall Tenant’s Rent abate as a result of Landlord’s
activities pursuant to this Section 34.1; provided, however, that all such
activities shall be conducted in such a manner so as to cause as little
interference to Tenant as is reasonably possible. Landlord shall at all times
retain a key with which to unlock all of the doors in the Premises. If an
emergency (where there is an imminent threat to persons or property)
necessitates immediate access to the Premises, Landlord may use whatever force
is necessary to enter the Premises, and any such entry to the Premises shall not
constitute a forcible or unlawful entry to the Premises, a detainer of the
Premises, or an eviction of Tenant from the Premises or any portion thereof.
35. Quiet Enjoyment. So long as Tenant is not in default under this Lease or as
otherwise permitted by this Lease, Landlord or anyone acting through or under
Landlord shall not disturb Tenant’s occupancy of the Premises. Notwithstanding
the foregoing, to the extent that Landlord uses commercially reasonable efforts
to minimize any interference with the construction of the Expansion Building may
have on Tenant’s use and quiet enjoyment of the Diversified Building Premises
for Tenant’s normal business operations, Tenant hereby (i) accepts any and all

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inconveniences associated with the construction of the Expansion Building,
including, any noise, paint, fumes, dust, debris, obstruction of access
(including any obstruction caused by the erection of scaffolding, barricades or
other necessary structures on the Property), or any other inconvenience caused
by the construction of the Expansion Building, (ii) agrees that the performance
of the construction of the Expansion Building shall not constitute a
constructive eviction nor shall Tenant be entitled to an abatement of Rent, and
(iii) acknowledges and agrees that Landlord shall not, for any reason, be
responsible or liable to Tenant for any direct or indirect injury to Tenant or
Tenant’s Agents, or interference with Tenant’s business, arising from the
construction of the Expansion Building; provided, however, that if Landlord
fails to use its commercially reasonable efforts to minimize any interference
that the construction of the Expansion Building may have on Tenant’s use of the
Diversified Building Premises for Tenant’s normal business operations, such
failure results in an Adverse Condition, and as a direct result of such Adverse
Condition, Tenant is unable to conduct its business in a reasonable manner in a
material portion of the Premises, Tenant shall be entitled to an abatement of
rent with respect to such Adverse Condition to the extent Tenant is entitled to
an abatement of rent pursuant to the terms and conditions of Section 18.5 above.
36. Subordination and Attornment.
     36.1. Subject to the delivery of the non-disturbance agreements described
in this Article 36 as a condition precedent to any such subordination, this
Lease shall be subject and subordinate to the lien of any mortgage, deed of
trust, or lease in which Landlord is tenant now or hereafter in force against
the Property or any portion thereof and to all advances made or hereafter to be
made upon the security thereof without the necessity of the execution and
delivery of any further instruments on the part of Tenant to effectuate such
subordination. In consideration of, and as a condition precedent to, Tenant’s
agreement to permit its interest pursuant to this Lease to be subordinated to
any particular future ground or underlying lease of the Buildings or the
Property or to the lien of any mortgage or trust deed, hereafter enforced
against the Buildings or the Property and to any renewals, extensions,
modifications, consolidations and replacements thereof, Landlord shall deliver
to Tenant a non-disturbance agreement on (a) the form of Exhibit M attached
hereto, (b) a commercially reasonable form of non-disturbance agreements of the
lessor under such ground lease or underlying lease or the holder of such
mortgage or trust deed, or (c) another commercially reasonable form. Landlord’s
delivery to Tenant of non-disturbance agreement(s) in favor of Tenant from any
ground lessors, mortgage holders or lien holders of Landlord who later came into
existence at any time prior to the expiration of the Term shall be in
consideration of, and a condition precedent to, Tenant’s agreement to be bound
by the terms of this Article 36. Tenant shall be entitled, at Tenant’s sole cost
and expense, to record any such non-disturbance agreement promptly after full
execution and delivery of such agreement.
     36.2. Notwithstanding the foregoing, Tenant shall execute and deliver upon
demand such further commercially reasonable instrument or instruments evidencing
such subordination of this Lease to the lien of any such mortgage or mortgages
or deeds of trust or lease in which Landlord is tenant as may be required by
Landlord. However, if any such mortgagee, beneficiary or Landlord under lease
wherein Landlord is tenant so elects, this Lease shall be deemed prior in lien
to any such lease, mortgage, or deed of trust upon or including the Property
regardless of date and Tenant shall execute a statement in writing to such
effect at Landlord’s request.
     36.3. Upon written request of Landlord and opportunity for Tenant to
review, Tenant agrees to execute any Lease amendments not materially altering
the terms of this Lease, if required by a mortgagee or beneficiary of a deed of
trust encumbering real property of which the Premises constitute a part incident
to the financing of the real property of which the Premises constitute a part.
Any change affecting the amount or timing of the consideration to be paid by
Tenant or modifying the term of this Lease shall be deemed as materially
altering the terms hereof.
     36.4. Subject to Section 36.1, in the event any proceedings are brought for
foreclosure, or in the event of the exercise of the power of sale under any
mortgage or deed of trust made by Landlord covering the Property, Tenant shall
at the election of the purchaser at such foreclosure or sale attorn to the
purchaser upon any such foreclosure or sale and recognize such purchaser as
Landlord under this Lease.

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37. Surrender.
     37.1. No surrender of possession of any part of the Property shall release
Tenant from any of its obligations hereunder, unless such surrender is accepted
in writing by Landlord.
     37.2. The voluntary or other surrender of this Lease by Tenant shall not
effect a merger with Landlord’s fee title or leasehold interest in the Property
or any portion thereof, unless Landlord consents in writing, and shall, at
Landlord’s option, operate as an assignment to Landlord of any or all subleases.
     37.3. The voluntary or other surrender of any ground or other underlying
lease that now exists or may hereafter be executed affecting the Property or any
portion thereof, or a mutual cancellation thereof or of Landlord’s interest
therein by Landlord and its lessor shall not effect a merger with Landlord’s fee
title or leasehold interest in the Property and shall, at the option of the
successor to Landlord’s interest in the Property or any portion thereof operate
as an assignment of this Lease.
     37.4. In the event Tenant has performed any Alterations in accordance with
this Lease, upon surrender of the Premises, Tenant shall reimburse Landlord for
any extra costs and expenses incurred by Landlord by reason of any delays in
re-leasing the Premises caused by Tenant’s removal of such Alterations.
38. Waiver and Modification No provision of this Lease may be modified, amended
or supplemented except by an agreement in writing signed by Landlord and Tenant.
The waiver by Landlord of any breach by Tenant of any term, covenant or
condition herein contained shall not be deemed to be a waiver of any subsequent
breach of the same or any other term, covenant or condition herein contained.
The waiver by Tenant of any breach by Landlord of any term, covenant or
condition herein contained shall not be deemed to be a waiver of any subsequent
breach of the same or any other term, covenant or condition herein contained.
39. Waiver of Jury Trial and Counterclaims. To the extent allowed under
Applicable Laws, the parties waive trial by jury in any action, proceeding or
counterclaim brought by the other party hereto related to matters arising out of
or in any way connected with this Lease; the relationship between Landlord and
Tenant; Tenant’s use or occupancy of the Property; or any claim of injury or
damage related to this Lease or the Property.
40. Hazardous Materials.
     40.1. After the Execution Date, Tenant shall not cause or permit any
Hazardous Materials (as hereinafter defined) to be brought upon, kept or used in
or about the Property in violation of Applicable Laws by Tenant or Tenant’s
Agents. If Tenant breaches such obligation, or if the presence of Hazardous
Materials brought upon, kept or used in or about the Property by Tenant or
Tenant’s Agents results in contamination of the Property or any adjacent
property, or if contamination of the Property or any adjacent property by
Hazardous Materials otherwise occurs during the term of this Lease or any
extension or renewal hereof or holding over hereunder (other than in connection
with substances that migrated to the Property from any adjoining property,
except in the event Tenant is aware of such contamination and neither remedies
such contamination nor promptly notifies Landlord of the existence of such
contamination), then Tenant shall indemnify, save, defend and hold Landlord, its
agents and contractors harmless from and against any and all claims, judgments,
damages, penalties, fines, costs, liabilities and losses (including, without
limitation, diminution in value of the Property or any portion thereof; damages
for the loss or restriction on use of rentable or usable space or of any amenity
of the Property; damages arising from any adverse impact on marketing of space
in the Property; and sums paid in settlement of claims, attorneys’ fees,
consultants’ fees and experts’ fees) that arise during or after the Term as a
result of such breach or contamination, except to the extent arising solely out
of Landlord’s construction of the Landlord’s Construction Work or the Tenant
Improvements; provided, however, in no event shall Tenant’s indemnity extend to
consequential damages; provided that this sentence shall not limit Landlord’s
damages if, as a result of Tenant’s breach of this Lease: (a) Landlord does not
or is unable to lease the Premises to another party, or (b) a third party is
unable to occupy the Premises on the date specified in such third party’s lease.
This indemnification of Landlord by Tenant includes, without limitation, costs
incurred in connection with any investigation of site conditions or any cleanup,
remedial, removal or restoration work required by any Governmental Authority
because of Hazardous

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Materials present in the air, soil or groundwater above, on or under the
Property. Without limiting the foregoing, if the presence of any Hazardous
Materials in, on, under or about the Property or any adjacent property caused or
permitted by Tenant or Tenant’s Agents results in any contamination of the
Property or any adjacent property, then Tenant shall promptly take all actions
at its sole cost and expense as are necessary to return the Property and any
adjacent property to their respective condition existing prior to the time of
such contamination; provided that Landlord’s written approval of such action
shall first be obtained, which approval Landlord shall not unreasonably
withhold; and provided, further, that it shall be reasonable for Landlord to
withhold its consent if such actions could have a material adverse long-term or
short-term effect on the Property.
     40.2. Landlord acknowledges that it is not the intent of this Article 40 to
prohibit Tenant from operating its business as described in Section 2.8 above.
Tenant may operate its business according to the custom of Tenant’s industry so
long as the use or presence of Hazardous Materials is strictly and properly
monitored according to Applicable Laws. As a material inducement to Landlord to
allow Tenant to use Hazardous Materials in connection with its business, Tenant
agrees to deliver to Landlord prior to the Term Commencement Date a list
identifying each type of Hazardous Material to be present on the Property and
setting forth any and all governmental approvals or permits required in
connection with the presence of such Hazardous Material on the Property (the
“Hazardous Materials List”). Tenant shall deliver to Landlord an updated
Hazardous Materials List on or prior to each annual anniversary of the Term
Commencement Date and shall also deliver an updated Hazardous Materials List
before any new Hazardous Materials are brought onto the Property. Tenant shall
deliver to Landlord true and correct copies of the following documents
(hereinafter referred to as the “Documents”) relating to the handling, storage,
disposal and emission of Hazardous Materials prior to the Term Commencement Date
or, if unavailable at that time, concurrent with the receipt from or submission
to any Governmental Authority: permits; approvals; reports and correspondence;
storage and management plans; notices of violations of Applicable Laws; plans
relating to the installation of any storage tanks to be installed in or under
the Property (provided that installation of storage tanks shall only be
permitted after Landlord has given Tenant its written consent to do so, which
consent Landlord may withhold in its sole and absolute discretion); and all
closure plans or any other documents required by any and all Governmental
Authorities for any storage tanks installed in, on or under the Property for the
closure of any such storage tanks. Tenant shall not be required, however, to
provide Landlord with any portion of the Documents containing information of a
proprietary nature that, in and of themselves, do not contain a reference to any
Hazardous Materials or activities related to Hazardous Materials.
     40.3. At any time, and from time to time, prior to the expiration of the
Term, Landlord shall have the right to conduct appropriate tests of the Property
to demonstrate that Hazardous Materials are present or that contamination has
occurred due to Tenant or Tenant’s agents, employees or invitees. Tenant shall
pay all reasonable costs of such tests of the Property if such tests demonstrate
that Tenant has breached any provision of this Lease regarding Hazardous
Materials or has any clean-up obligations under this Article 40.
     40.4. If underground or other storage tanks storing Hazardous Materials
are: (a) located on the Property; (b) hereafter placed on the Property by Tenant
or Tenant’s Agents, (c) hereafter used by Tenant or Tenant’s Agents, or
(d) placed on the Property by any other party and Tenant is aware that such
party placed such underground or other storage tank on the Property, Tenant
shall monitor the storage tanks, maintain appropriate records, implement
reporting procedures, properly close any underground storage tanks, and take or
cause to be taken all other steps necessary or required under the Applicable
Laws. Tenant shall pay all reasonable costs of such tests of the Property
     40.5. Tenant’s and Landlord’s obligations under this Article 40 shall
survive the expiration or earlier termination of this Lease. During any period
of time needed by Tenant or Landlord after the termination of this Lease to
complete the removal from the Property of any such Hazardous Materials that
Tenant is liable for pursuant to the terms and conditions of this Lease, Tenant
shall continue to pay Rent in accordance with this Lease, which Rent shall be
prorated daily.
     40.6. As used herein, the term “Hazardous Material” means any hazardous or
toxic substance, material or waste that is or becomes regulated by any
Governmental Authority.

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41. Miscellaneous.
     41.1. This Lease shall not be effective until, and shall be contingent
upon, the satisfaction of each of the following conditions: (a) the Illumina
Lease shall have been fully executed and be in full force and effect,
(b) Landlord shall have received Northwestern Mutual Life Insurance Company’s
consent to the Illumina Lease and release of its security interest in Parcel 3,
(c) Landlord shall have conveyed the Parcel 3 Land (including the Diversified
Building) to, and assigned all of its interests in this Lease to, BMR-9865 Towne
Centre Drive, LLC, a Delaware limited liability company, and (d) Landlord has
received formal approval of substantial conformance review and plan checks
comments from the City of San Diego in connection with the Expansion Building,
which approval and comments shall not contain any required changes that cause
Landlord to materially alter the Landlord’s Construction Work or Tenant
Improvements. If the conditions set forth in this Section 41.1 are not satisfied
or waived on or before April 10, 2007, this Lease shall become null and void.
     41.2. Within five (5) business days after the end of each calendar month,
Tenant shall submit to Landlord an invoice, or, in the event an invoice is not
available, an itemized list of expenses, of all costs and expenses that:
(a) Tenant has incurred during the prior month; and (b) Tenant has reasonably
determined that Landlord is obligated to reimburse such costs and expenses
pursuant to the terms of this Lease.
     41.3. This Lease shall be deemed and construed to be an “absolute net
lease” and, except as herein expressly provided, Landlord shall receive all
payments required to be made by Tenant free from all charges, assessments,
impositions, expenses and deductions of any and every kind or nature whatsoever.
Landlord shall not be required to furnish any services or facilities or to make
any repairs, replacements or alterations of any kind in or on the Property
except as specifically provided herein. Tenant shall receive all invoices and
bills relative to the Property (including the Diversified Space) and, except as
otherwise provided herein, shall pay for all expenses directly to the person or
company submitting a bill without first having to forward payment for the
expenses to Landlord. Tenant shall at Tenant’s sole cost and expense be
responsible for the management of the Property (other than the Diversified
Space), shall maintain the landscaping and parking lot, and shall make those
additional repairs and alterations required of Tenant hereunder to maintain the
Property (other than the Diversified Space) in first class condition.
     41.4. Where applicable in this Lease, the singular includes the plural and
the masculine or neuter includes the masculine, feminine and neuter. The Section
headings of this Lease are not a part of this Lease and shall have no effect
upon the construction or interpretation of any part hereof.
     41.5. Submission of this instrument for examination or signature by Tenant
does not constitute a reservation of or option for a lease, and shall not be
effective as a lease or otherwise until execution by and delivery to both
Landlord and Tenant.
     41.6. Time is of the essence with respect to the performance of every
provision of this Lease in which time of performance is a factor.
     41.7. Each provision of this Lease performable by Tenant shall be deemed
both a covenant and a condition.
     41.8. Whenever consent or approval of either party is required, that party
shall not unreasonably withhold such consent or approval, except as may be
expressly set forth to the contrary.
     41.9. The terms of this Lease are intended by the parties as a final
expression of their agreement with respect to the terms as are included herein,
and may not be contradicted by evidence of any prior or contemporaneous
agreement.
     41.10. Any provision of this Lease that shall prove to be invalid, void or
illegal shall in no way affect, impair or invalidate any other provision hereof,
and all other provisions of this Lease shall remain in full force and effect and
shall be interpreted as if the invalid, void or illegal provision did not exist.

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     41.11. Landlord may, but shall not be obligated to, record a short form
memorandum hereof without Tenant’s consent. Tenant shall reasonably cooperate
with Landlord in such recording. Neither party shall record this Lease. Tenant
shall have the right to record a memorandum of this Lease (which Landlord shall
execute); provided, however, that Tenant shall be responsible for the cost of
recording any memorandum of this Lease, including any transfer or other taxes
incurred in connection with said recordation. Landlord shall reasonably
cooperate with Tenant in such recording at Tenant’s sole cost and expense.
     41.12. The language in all parts of this Lease shall be in all cases
construed as a whole according to its fair meaning and not strictly for or
against either Landlord or Tenant.
     41.13. Each of the covenants, conditions and agreements herein contained
shall inure to the benefit of and shall apply to and be binding upon the parties
hereto and their respective heirs; legatees; devisees; executors;
administrators; and permitted successors, assigns, sublessees. Nothing in this
Section 41.13 shall in any way alter the provisions of this Lease restricting
assignment or subletting.
     41.14. Any notice, consent, demand, bill, statement or other communication
required or permitted to be given hereunder shall be in writing and shall be
given by personal delivery, overnight delivery with a reputable nationwide
overnight delivery service, or certified mail (return receipt requested), and if
given by personal delivery, shall be deemed delivered upon receipt; if given by
overnight delivery, shall be deemed delivered one (1) day after deposit with a
reputable nationwide overnight delivery service; and, if given by certified mail
(return receipt requested), shall be deemed delivered three (3) business days
after the time the notifying party deposits the notice with the United States
Postal Service. Any notices given pursuant to this Lease shall be addressed to
Tenant at the Premises, or to Landlord or Tenant at the addresses shown in
Sections 2.10 and 2.11, respectively. Either party may, by notice to the other
given pursuant to this Section, specify additional or different addresses for
notice purposes.
     41.15. This Lease shall be governed by, construed and enforced in
accordance with the laws of the State in which the Property is located, without
regard to such State’s conflict of law principles.
     41.16. That individual or those individuals signing this Lease guarantee,
warrant and represent that said individual or individuals have the power,
authority and legal capacity to sign this Lease on behalf of and to bind all
entities, corporations, partnerships, limited liability companies, joint
venturers or other organizations and entities on whose behalf said individual or
individuals have signed.
     41.17. To induce Landlord to enter into this Lease, Tenant agrees that it
shall promptly furnish to Landlord, from time to time, upon Landlord’s written
request, the most recent audited year-end financial statements reflecting
Tenant’s current financial condition. Tenant shall, within ninety (90) days
after the end of Tenant’s financial year, furnish Landlord with a certified copy
of Tenant’s audited year-end financial statements for the previous year. Tenant
represents and warrants that all financial statements, records and information
furnished by Tenant to Landlord in connection with this Lease are true, correct
and complete in all respects. Notwithstanding the foregoing, the provisions of
this Section 41.17 shall not apply to Tenant so long as Tenant is a publicly
traded company that is listed on a United States stock exchange.
     41.18. This Lease is subject to any recorded covenants, conditions or
restrictions now or hereinafter affecting the Premises or the Property (the
“CC&Rs”). Tenant shall comply with all CC&Rs except to the extent any future
CC&Rs (a) materially adversely affects Tenant’s use of the Premises for its
Permitted Use; or (b) materially increase Tenant’s costs under this Lease.
42. Option to Extend Term. Tenant shall have the option (“Option”) to extend the
Term of this Lease as to the entire Premises (and no less than the entire
Premises) upon the following terms and conditions. Any extension of the Term
pursuant to any Option shall be on all the same terms and conditions as this
Lease, except as follows:
     42.1. Tenant shall have three (3) options to extend the Term of this Lease
by five (5) years each (each, an “Extended Term”), upon the same terms and
conditions as this Lease (except as provided below). Basic Annual Rent for the
Diversified Building Premises and the Expansion Premises shall be adjusted on
the first (1st) day of each Extended Term and every

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twenty-four (24) months thereafter in accordance with Article 7. The Basic
Annual Rent during each Extended Term shall equal the greater of: (a) the Fair
Market Value for the Extended Term; and (b) 102.5% of the then-current Basic
Annual Rent at the end of the then-current Term or Extended Term, as applicable.
“Fair Market Value” means the then-prevailing average annual rate that
comparable landlords have accepted in current transactions from new, non-equity
(i.e., not being offered equity in the Buildings), nonrenewal, nonexpansion and
nonaffiliated tenants of similar financial strength for comparable space in
comparable class “A” office buildings comparably located, with comparable size,
quality and floor height in a first class office building, or as appropriate, a
laboratory building, taking into consideration all relevant factors, including,
without limitation, the proposed lease term, the tenant inducements, allowances
or concessions, if any, and excluding specialized tenant improvements or tenant
paid improvements for a comparable term, with the determination of Fair Market
Value to take into account all relevant factors, including tenant inducements,
allowances or concessions, if any, the extent of the services provided or to be
provided to the Premises, and contraction and expansion options. In the event
the tenant inducements, allowances or concessions granted differ from the terms
contained in this Lease, an adjustment to the Fair Market Value shall be made on
a basis consistent with the adjustments commonly made in the market for
comparable differences and concession packages. If Landlord and Tenant cannot
agree on the Fair Market Value for purposes of any Extended Term then they shall
engage a mutually agreeable independent third party appraiser, which appraiser
shall be a real estate broker with at least ten (10) years’ experience in
appraising the rental value of leased commercial premises (for research and
development and laboratory uses) in the San Diego, California area (the
“Appraiser”). If the parties cannot agree on the Appraiser, each shall within
ten (10) days after such impasse appoint an Appraiser (meeting the
qualifications set forth above) and, within ten (10) days after the appointment
of both such Appraisers, those two Appraisers shall select a third Appraiser
meeting the qualifications set forth above. If either party fails to timely
appoint an Appraiser, then the Appraiser the other party appoints shall be the
sole Appraiser. Within ten (10) days after appointment of all Appraiser(s),
Landlord and Tenant shall each simultaneously give the Appraisers (with a copy
to the other party) its determination of Fair Market Value, with such supporting
data or information as each submitting party determines appropriate. Within ten
(10) days after such submissions, the Appraisers shall by majority vote select
either Landlord’s or Tenant’s Fair Market Value. The Appraisers may not select
or designate any other Fair Market Value. The determination of the Appraiser(s)
shall bind the parties
     42.2. The Option is not assignable separate and apart from this Lease.
     42.3. The Option is conditional upon Tenant giving Landlord written notice
of its election to exercise an Option at least twelve (12) months prior to the
end of the expiration of the initial term of this Lease and, if exercised, the
applicable Extended Term. Time shall be of the essence as to Tenant’s exercise
of each Option. Tenant assumes full responsibility for maintaining a record of
the deadlines to exercise any Option(s). Tenant acknowledges that it would be
inequitable to require Landlord to accept any exercise of any Option(s) after
the date provided for in this Section.
     42.4. Notwithstanding anything contained in this Article 42, Tenant shall
not have the right to exercise an Option:
          42.4.1 During the time commencing from the date Landlord delivers to
Tenant a written notice that Tenant is in monetary or material non-monetary
default under any provision of this Lease or the Illumina Lease and continuing
until Tenant has cured the specified default; or
          42.4.2 At any time after any Default as described in Article 26 of
this Lease (provided, however, that, for purposes of this Subsection 42.4(b),
Landlord shall not be required to provide Tenant with notice of such Default)
and continuing until Tenant cures any such Default, if such Default is
susceptible to being cured; or
          42.4.3 In the event that Tenant has defaulted in the performance of
its obligations under this Lease three (3) or more times and a service or late
charge has become payable under Section 26.1 for each of such defaults during
the twelve (12)-month period immediately prior to the date that Tenant intends
to exercise an Option, whether or not Tenant has cured such defaults.

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     42.5. The period of time within which Tenant may exercise an Option shall
not be extended or enlarged by reason of Tenant’s inability to exercise such
Option because of the provisions of Section 42.4.
43. Tenant’s Authority. Tenant hereby covenants and warrants that (a) Tenant is
duly incorporated or otherwise established or formed and validly existing under
the laws of its state of incorporation, establishment or formation, (b) Tenant
has and is duly qualified to do business in the state in which the Property is
located, (c) Tenant has full corporate, partnership, trust, association or other
appropriate power and authority to enter into this Lease and to perform all
Tenant’s obligations hereunder and (d) each person (and all of the persons if
more than one signs) signing this Lease on behalf of Tenant is duly and validly
authorized to do so.
44. Landlord’s Authority. Landlord hereby covenants and warrants that
(a) Landlord is duly incorporated or otherwise established or formed and validly
existing under the laws of its state of incorporation, establishment or
formation, (b) Landlord has and is duly qualified to do business in the state in
which the Property is located, (c) Landlord has full corporate, partnership,
trust, association or other appropriate power and authority to enter into this
Lease and to perform all Landlord’s obligations hereunder and (d) each person
(and all of the persons if more than one signs) signing this Lease on behalf of
Landlord is duly and validly authorized to do so.
45. Confidentiality. Neither party shall disclose any terms or conditions of
this Lease (including Rent) or give a copy of this Lease to any third party, and
Landlord shall not release to any third party any nonpublic financial
information or nonpublic information about Tenant’s ownership structure that
Tenant gives Landlord, except (a) if required by Applicable Laws or in any
judicial proceeding, provided that the releasing party has given the other party
reasonable notice of such requirement, if feasible, (b) to a party’s attorneys,
accountants, brokers and other bona fide consultants or advisers, provided such
third parties agree to be bound by this Section or (c) to bona fide prospective
assignees or subtenants of this Lease, provided they agree in writing to be
bound by this Section.
46. Excavation. If any excavation shall be made upon land adjacent to or under
the Buildings, or shall be authorized to be made, Tenant shall afford to the
person causing or authorized to cause such excavation, license to enter the
Property for the purpose of performing such work as said person shall deem
necessary or desirable to preserve and protect the Buildings from injury or
damage and to support the same by proper foundations, without any claim for
damages or liability against Landlord and without, subject to the terms and
conditions of this Lease, reducing or otherwise affecting Tenant’s obligations
under this Lease.
47. Telecommunications Equipment. At any time during the Term, subject to the
terms of this Article 47 and subject to Landlord’s prior written approval, which
approval shall not be unreasonably withheld or delayed, Tenant shall have the
exclusive right to install, at Tenant’s sole cost and expense, satellite or
microwave dishes or other communication equipment (the “Telecommunications
Equipment”) upon the roof of the Expansion Building. The physical appearance and
the size of the Telecommunications Equipment shall be subject to Landlord’s
written approval prior to installation, which approval will not unreasonably be
withheld, any covenants, conditions, or restrictions encumbering the Property
and, any Applicable Laws. Tenant shall maintain such Telecommunications
Equipment in good condition and repair, at Tenant’s sole cost and expense. The
cost of the Telecommunications Equipment, including but not limited to the
permitting, installation, maintenance and removal thereof shall be at Tenant’s
sole cost and expense. If Tenant fails to maintain its Telecommunications
Equipment, or if Tenant fails to remove such Telecommunications Equipment upon
termination of this Lease, or fails to repair any damage caused by such removal,
Landlord may do so at Tenant’s expense. Tenant shall on demand reimburse
Landlord for all costs incurred by Landlord to effect such removal, which
amounts shall be deemed Additional Rent and shall include without limitation,
all sums disbursed, incurred or deposited by Landlord, including Landlord’s
costs, expenses and actual attorneys’ fees with interest thereon. Tenant shall
indemnify, defend and hold harmless Landlord from and against any loss, cost,
claim, lawsuit, liability or expense (including reasonable attorneys’ fees and
disbursements) arising directly or indirectly out of Tenant’s failure to perform
any of its obligations under this Article 47.
48. Access to Premises. Subject to Section 34.2, Tenant shall be granted access
to the Premises (including the parking facilities) twenty-four (24) hours per
day, seven (7) days per week, every day of the year.

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49. Secured Areas. Notwithstanding anything to the contrary set forth in this
Lease, Tenant may designate certain areas of the Premises as “Secured Areas”
should Tenant require such areas for the purpose of securing certain valuable
property or confidential information. Landlord may not enter such Secured Areas
except in the case of emergency or in the event of a Landlord inspection, in
which case Landlord shall provide Tenant with one (1) business day prior written
notice of the specific date and time of such Landlord inspection.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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     IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
date first above written.

          LANDLORD:    
 
        BMR-9885 TOWNE CENTRE DRIVE LLC,
a Delaware limited liability company    
 
       
By:
       
 
       
Name:
       
 
       
Title:
       
 
       
 
        TENANT:    
 
        ILLUMINA, INC.,
a Delaware corporation    
 
       
By:
       
 
       
Name:
       
 
       
Title:
       
 
       

[Signature Page — Parcel 3: Illumina Lease]

 

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EXHIBIT A
ORIGINAL ILLUMINA LEASE PREMISES
(MAP) [a29658a2965806.gif]
TOWNE CENTRE DRIVE

EXHIBIT A-1

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EXHIBIT B
INTENTIONALLY OMITTED

EXHIBIT B-1

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EXHIBIT C
PHASE 1 PREMISES
(to be attached by the parties on or before
Substantial Completion of the Landlord’s Construction Work}

EXHIBIT C-1

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EXHIBIT D
PHASE 2 PREMISES
(to be attached by the parties on or before
Substantial Completion of the Landlord’s Construction Work}

EXHIBIT D-1

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EXHIBIT E
PHASE 3 PREMISES
(to be attached by the parties on or before
Substantial Completion of the Landlord’s Construction Work}

EXHIBIT E-1

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EXHIBIT F
ACKNOWLEDGEMENT OF [PHASE 1][PHASE 2][PHASE 3]
COMMENCEMENT DATE AND EXPIRATION DATE
     THIS ACKNOWLEDGEMENT OF [PHASE 1][PHASE 2][PHASE 3] COMMENCEMENT DATE AND
EXPIRATION DATE is entered into as of [___], 20[___], with reference to that
certain Lease (the “Lease”) dated as of January 26, 2007, by Illumina, Inc., a
Delaware corporation (“Tenant”), in favor of BMR-9885 Towne Centre Drive LLC, a
Delaware limited liability company (“Landlord”). All capitalized terms used
herein without definition shall have the meanings ascribed to them in the Lease.
     Tenant hereby confirms the following:

1.   Tenant accepted possession of the [Phase 1][Phase 2][Phase 3] Premises on
[___], 20[___].   2.   The [Phase 1][Phase 2][Phase 3] Premises are in good
order, condition and repair.   3.   Landlord’s Construction Work and the Tenant
Improvements required to be constructed by Landlord under the Lease have been
substantially completed.   4.   All conditions of the Lease to be performed by
Landlord as a condition to the full effectiveness of the Lease have been
satisfied, and Landlord has fulfilled all of its duties in the nature of
inducements offered to Tenant to lease the [Phase 1][Phase 2][Phase 3] Premises.
  5.   In accordance with the provisions of Section [5.2.2][5.2.3][5.2.4] of the
Lease, the [Phase 1][Phase 2][Phase 3] Commencement Date is [___], 20[___], and,
unless the Lease is terminated prior to the Expiration Date pursuant to its
terms, the Expiration Date shall be [___], 20[___].   6.   Tenant commenced
occupancy of the [Phase 1][Phase 2][Phase 3] Premises for the Permitted Use on
[___], 20[___].   7.   The Lease is in full force and effect, and the same
represents the entire agreement between Landlord and Tenant concerning the
[Phase 1][Phase 2][Phase 3] Premises [, except [___]].   8.   Tenant has no
existing defenses against the enforcement of the Lease by Landlord, and there
exist no offsets or credits against Rent owed or to be owed by Tenant.   9.  
The obligation to pay Rent is presently in effect and all Rent obligations on
the part of Tenant under the Lease commenced to accrue on [___], 20[___].   10.
  The undersigned Tenant has not made any prior assignment, transfer,
hypothecation or pledge of the Lease or of the rents thereunder or sublease of
the Premises or any portion thereof.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

EXHIBIT F-1

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     IN WITNESS WHEREOF, Tenant has executed this Acknowledgment of [Phase
1][Phase 2][Phase 3] Commencement Date and Expiration Date as of [___], 20[___].

          ILLUMINA, INC.,
a Delaware corporation    
 
       
By:
       
 
       
Name:
       
 
       
Title:
       
 
       
 
        ACKNOWLEDGED AND AGREED:    
 
        BMR-9885 TOWNE CENTRE DRIVE LLC,
a Delaware limited liability company    
 
       
By:
       
 
       
Name:
       
 
       
Title:
       
 
       

EXHIBIT F-2

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EXHIBIT G
TENANT’S PERSONAL PROPERTY

1)   All Data Servers/Racks that are not mounted to the floor   2)   2 large
UPS’s

  a)   1 in the A/2 Data Room     b)   1 in the A/1 Shipping area

3)   RO/DI Water System   4)   Backup Generator   5)   Boardroom Electronics and
Podium   6)   All Modular Furniture   7)   All Shelving/Racking   8)   Reagent
Delivery System   9)   Caging Material   10)   All Equipment Specific to the
Production Process of Illumina other than Fume Hoods and Bio-Safety Cabinets

EXHIBIT G-1

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EXHIBIT H
RULES AND REGULATIONS
     NOTHING IN THESE RULES AND REGULATIONS (“RULES AND REGULATIONS”) SHALL
SUPPLANT ANY PROVISION OF THE LEASE. IN THE EVENT OF A CONFLICT OR INCONSISTENCY
BETWEEN THESE RULES AND REGULATIONS AND THE LEASE, THE LEASE SHALL PREVAIL.

1.   Except as specifically provided in the Lease to which these Rules and
Regulations are attached, no sign, placard, picture, advertisement, name or
notice shall be installed or displayed on any part of the outside of the
Buildings or in the Common Areas without Landlord’s prior written consent.
Landlord shall have the right to remove, at Tenant’s sole cost and expense and
without notice, any sign installed or displayed in violation of this rule.

2.   If Landlord objects in writing to any curtains, blinds, shades, screens or
hanging plants or other similar objects attached to or used in connection with
any window or door of the Buildings or placed on any windowsill, which window,
door or windowsill is (a) visible from the exterior of the Buildings and (b) not
included in plans approved by Landlord, then Tenant shall promptly remove said
curtains, blinds, shades, screens or hanging plants or other similar objects at
its sole cost and expense.

3.   Tenant shall not obstruct any sidewalks or entrances to the Buildings, or
any halls, passages, exits, entrances or stairways within the Premises, in any
case that are required to be kept clear for health and safety reasons.

4.   Tenant shall not place a load upon any floor of the Premises that exceeds
the load per square foot that (a) such floor was designed to carry or (b) that
is allowed by Applicable Laws.

5.   Tenant shall not use any method of heating or air conditioning other than
that shown in the Tenant Improvement plans.

6.   Tenant shall not install any radio, television or other antenna, cell or
other communications equipment, or any other devices on the roof or exterior
walls of the Buildings except to the extent shown on approved Tenant
Improvements plans or as otherwise provided in the Lease. Tenant shall not
interfere with radio, television or other communications from or in the
Buildings or elsewhere.

7.   Canvassing, peddling, soliciting and distributing handbills or any other
written material within, on or around the Property is prohibited, and Tenant
shall cooperate to prevent such activities.

8.   Tenant shall store all of its trash, garbage and Hazardous Materials within
its Premises or in designated receptacles outside of the Premises. Tenant shall
not place in any such receptacle any material that cannot be disposed of in the
ordinary and customary manner of trash, garbage and Hazardous Materials
disposal.

9.   The Property shall not be used for any unlawful or reasonably objectionable
purposes. No cooking shall be done or permitted on the Property; provided,
however, that Tenant may use (a) equipment approved in accordance with the
requirements of insurance policies that Landlord or Tenant is required to
purchase and maintain pursuant to the Lease for brewing coffee, tea, hot
chocolate and similar beverages, (b) microwave ovens for employees’ use and
(c) equipment shown on Tenant Improvement plans approved by Landlord; provided,
further, that any such equipment and microwave ovens are used in accordance with
Applicable Laws.

10.   Tenant shall not, without Landlord’s prior written consent, use the name
of the Premises, if any, in connection with or in promoting or advertising
Tenant’s business except as Tenant’s address.

11.   Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any Governmental
Authority.

EXHIBIT H-1

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12.   Tenant assumes any and all responsibility for protecting the Property from
theft, robbery and pilferage, which responsibility includes keeping doors locked
and other means of entry to the Premises closed.

13.   Landlord may waive any one or more of these Rules and Regulations for the
benefit of Tenant, but no such waiver by Landlord shall be construed as a waiver
of such Rules and Regulations in favor of Tenant, nor prevent Landlord from
thereafter enforcing any such Rules and Regulations against Tenant.

14.   These Rules and Regulations are in addition to, and shall not be construed
to in any way modify or amend, in whole or in part, the terms covenants,
agreements and conditions of the Lease.

15.   Landlord reserves the right to make such other reasonable rules and
regulations as, in its judgment, may from time to time be needed for safety and
security, the care and cleanliness of the Property, or the preservation of good
order therein; provided, however, that Landlord shall provide written notice to
Tenant of such rules and regulations prior to them taking effect. Tenant agrees
to abide by these Rules and Regulations and any additional reasonable rules and
regulations issued or adopted by Landlord.

16.   Tenant shall not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant’s Agents to be loaded, unloaded or parked in
areas other than those designated by Landlord for such activities. No vehicles
are to be left in the parking areas overnight and no vehicles are to be parked
in the parking areas other than normally sized passenger automobiles,
motorcycles and pick-up trucks. No extended term storage of vehicles is
permitted. Landlord reserves the right, without cost or liability to Landlord,
to tow any vehicle if such vehicle’s audio theft alarm system remains engaged
for an unreasonable period of time. Washing, waxing, cleaning or servicing of
any vehicle in any portion of the Property is prohibited.

17.   Tenant shall be responsible for the observance of these Rules and
Regulations by Tenant’s employees, agents, clients, customers, invitees and
guests.

EXHIBIT H-2

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EXHIBIT I
FORM OF ESTOPPEL CERTIFICATE

To:   BMR-9885 Towne Centre Drive LLC
17140 Bernardo Center Drive, Suite 222
San Diego, CA 92128
Attention: General Counsel/Real Estate

BioMed Realty, L.P.
c/o BioMed Realty Trust, Inc.
17140 Bernardo Center Drive, Suite 222
San Diego, CA 92128

Re: 9885 Towne Centre Drive (the “Premises”) at 9885 Towne Centre Drive, San
Diego, California (the “Property”)
     The undersigned tenant (“Tenant”) hereby certifies to you as follows:
1. Tenant is a tenant at the Property under a lease (the “Lease”) for the
Premises dated as of [                    ], 20[___]. The Lease has not been
cancelled, modified, assigned, extended or amended [except as follows:
[                    ]], and there are no other agreements, written or oral,
affecting or relating to Tenant’s lease of the Premises or any other space at
the Property. The lease term expires on [                    ], 20[___].
2. Tenant took possession of the Premises, currently consisting of
[                    ] square feet, on [                    ], 20[___], and
commenced to pay rent on [                    ], 20[___]. Tenant has full
possession of the Premises, has not assigned the Lease or sublet any part of the
Premises, and does not hold the Premises under an assignment or sublease[,
except as follows: [                    ]].
3. All base rent, rent escalations and additional rent under the Lease have been
paid through [                    ], 20[___]. There is no prepaid rent[, except
$[                    ]][, and the amount of security deposit is
$[                    ] [in cash][in the form of a letter of credit]]. Tenant
currently has no right to any future rent abatement under the Lease.
4. Base rent is currently payable in the amount of $[                    ] per
month.
5. Tenant is currently paying estimated payments of additional rent of
$[                    ] per month on account of real estate taxes, insurance,
management fees and common area maintenance expenses.
6. All work to be performed for Tenant under the Lease has been performed as
required under the Lease and has been accepted by Tenant[, except
[                    ]], and all allowances to be paid to Tenant, including
allowances for tenant improvements, moving expenses or other items, have been
paid.
7. The Lease is in full force and effect, free from default and free from any
event that could become a default under the Lease, and Tenant has no claims
against the landlord or offsets or defenses against rent, and there are no
disputes with the landlord. Tenant has received no notice of prior sale,
transfer, assignment, hypothecation or pledge of the Lease or of the rents
payable thereunder[, except [                    ]].
8. [Tenant has the following expansion rights or options for the Property:
[                    ].][Tenant has no rights or options to purchase the
Property.]
9. To Tenant’s knowledge, no hazardous wastes have been generated, treated,
stored or disposed of by or on behalf of Tenant in, on or around the Property in
violation of any environmental laws.
10. The undersigned has executed this Estoppel Certificate with the knowledge
and understanding that [INSERT NAME OF LANDLORD, PURCHASER OR LENDER, AS
APPROPRIATE] or its assignee is acquiring the Property in reliance on this
certificate and that the undersigned shall be bound by this certificate. The
statements contained herein may be relied upon by [INSERT NAME OF PURCHASER OR
LENDER, AS APPROPRIATE],

EXHIBIT I-1

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[LANDLORD], BioMed Realty, L.P., BioMed Realty Trust, Inc., and any mortgagee of
the Property and their respective successors and assigns.
     Any capitalized terms not defined herein shall have the respective meanings
given in the Lease.
Dated this [___] day of [                    ], 20[___].
[                    ],
a [                    ]

         
By:
       
 
       
Name:
       
 
       
Title:
       
 
       

EXHIBIT I-2

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EXHIBIT J
WORK LETTER
     This Work Letter (the “Work Letter”) is made and entered into as of the
26th day of January, 2007, by and between BMR-9885 Towne Centre Drive LLC, a
Delaware limited liability company (“Landlord”), and Illumina, Inc., a Delaware
corporation (“Tenant”), and is attached to and made a part of that certain Lease
dated as of January 26, 2007 (the “Lease”), by and between Landlord and Tenant
for the Premises located at 9885 Towne Centre Drive in San Diego, California.
All capitalized terms used but not otherwise defined herein shall have the
meanings given them in the Lease.
1. General Requirements.
     1.1 Tenant’s Authorized Representative. Tenant designates Jeff Hughson
(“Tenant’s Authorized Representative”) as the person authorized to initial all
plans, drawings, changes orders and approvals pursuant to this Work Letter.
Landlord shall not be obligated to respond to or act upon any such item until
such item has been initialed by Tenant’s Authorized Representative. Tenant may
change Tenant’s Authorized Representative upon five (5) days’ prior written
notice to Landlord.
     1.2 Responsibility Matrix. Landlord and Tenant have approved that certain
Responsibility Matrix attached hereto as Exhibit A-1 (the “Responsibility
Matrix”). The Responsibility Matrix shall be determinative in allocating work
between the Tenant Improvements and the Landlord’s Construction Work.
     1.3 Landlord’s Construction Work. The schedule for the design and
development of Landlord’s Construction Work (as defined in the Lease),
including, without limitation, the time periods for preparation and review of
construction documents, approvals and performance, shall be in accordance with
that certain schedule prepared by Landlord and Tenant attached as Exhibit A-2 to
this Work Letter (the “Landlord’s Construction Work Schedule”). The Landlord’s
Construction Work Schedule shall be subject to adjustment as mutually agreed
upon in writing by the parties, or as provided in this Work Letter.
     1.4 Landlord’s Construction Work: Architects and Consultants. The
architect, engineering consultants, design team, general contractor and
subcontractors responsible for the construction of Landlord’s Work (as defined
below) shall be selected by Landlord and approved by Tenant, which approval
Tenant shall not unreasonably withhold, condition or delay. Tenant hereby
approves of Ferguson Pape Baldwin Architects as Landlord’s architect and Reno
Contracting as Landlord’s general contractor.
     1.5 Tenant Improvements: Architect. The architect responsible for the
preparation of the TI Program and the Schematic TI Plans shall be selected by
Tenant and approved by Landlord, which approval Landlord shall not unreasonably
withhold, condition or delay. Landlord hereby approves Ferguson Pape Baldwin
Architects as Tenant’s architect.
2. Landlord’s Construction Work.
     2.1 Landlord’s Construction Work. Landlord’s Construction Work shall be
performed by Landlord at Landlord’s sole cost and expense in accordance with the
Approved CW Plans (as defined below), the outline specifications attached hereto
as Exhibit B, and the Landlord’s Construction Work Schedule, subject only to
changes approved in accordance with Section 2.3.
     2.2 Approved CW Plans. Landlord shall prepare final plans and
specifications for Landlord’s Construction Work that are: (a) consistent with
and are logical evolutions of the Design Development Drawings dated December 5,
2006 and prepared by Ferguson Pape Baldwin, which have been reasonably approved
by Tenant, (b) incorporate CW Permitted Changes, and (c) incorporate any other
Landlord-requested (and Tenant approved) CW Changes. As soon as such final plans
and specifications (“Final CW Plans”) are completed, Landlord shall deliver the
same to Tenant for Tenant’s approval, which approval may be reasonably withheld
only if: (i) the Final CW Plans are not consistent with or logical evolutions of
the approved Design Development Drawings, (ii) Tenant requests changes to the
Final CW Plans in

EXHIBIT J-1

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accordance with Section 2.3(a)(i), or (iii) Tenant objects to any Landlord
requested CW Change (other than CW Permitted Changes). Such Final CW Plans shall
be approved or disapproved by Tenant within seven (7) days after delivery to
Tenant. If Tenant fails to respond within such seven (7) days period, then
Landlord shall provide Tenant with a second written notice stating that
“Tenant’s failure to respond within three (3) days after Landlord’s second
notice shall be deemed Tenant’s approval of the Final CW Plans,” and if Tenant
does not respond within such three (3) day period, then Tenant shall be deemed
to have approved the Final CW Plans. If the Final CW Plans are disapproved by
Tenant, Tenant shall notify Landlord in writing of its objections to such Final
CW Plans and shall submit any requested CW Changes through a CW Tenant Change
Order Request (as defined below), then the parties shall confer and negotiate in
good faith to reach agreement on the Final CW Plans. Promptly after the Final CW
Plans are approved by Landlord and Tenant, two (2) copies of such Final CW Plans
shall be initialed and dated by Landlord and Tenant as soon as approved by
Landlord and Tenant, Landlord shall promptly submit such Final CW Plans to all
appropriate governmental agencies for approval. The Final CW Plans so approved,
and all change orders specifically permitted by the Lease, are referred to
herein as the “Approved CW Plans” and shall become part of the Lease as though
set forth in full.
     2.3 Changes to Landlord’s Construction Work. Any changes to the Final CW
Plans or the Approved CW Plans (each, a “CW Change”) requested by Landlord or
Tenant (other than CW Permitted Changes by Landlord) shall be requested and
instituted in accordance with the provisions of this Article 2 and shall be
subject to the written approval of the other party in accordance with this Work
Letter.
          (a) CW Changes Requested by Tenant.
               (i) CW Tenant Change Order Request. Tenant may request CW Changes
to the Final CW Plans or the Approved CW Plans by notifying Landlord thereof in
writing in substantially the same form as the AIA standard change order form (a
“CW Tenant Change Order Request”), which CW Tenant Change Order Request shall
detail the nature and extent of any requested CW Changes, including, without
limitation, (a) the CW Change, (b) the party required to perform the CW Change,
and (c) any modification of the Final CW Plans or the Approved CW Plans, as
applicable, and the Landlord’s Construction Work Schedule necessitated by the CW
Change. If the nature of a CW Change requires revisions to the Final CW Plans or
the Approved CW Plans, as applicable, or the Landlord’s Construction Work
Schedule, then Tenant shall be solely responsible for the cost and expense of
such revisions. In the event Landlord approves such CW Change, Landlord shall:
(1) notify Tenant if it reasonably believes such CW Change could cause a delay
in the Landlord’s Construction Work Schedule; and (2) provide Landlord’s
reasonable estimate of any additional costs and expenses associated with such CW
Change. Tenant shall deposit with Landlord the additional cost and expense
payable by Landlord, as reasonably estimated by Landlord, to complete the
Construction Work due to a Tenant-requested CW Change within ten (10) days of
receiving Landlord’s approval of such CW Change (the “CW Deposit”). In the event
such deposit is not sufficient to cover the actual cost of such approved CW
Change, Tenant shall reimburse Landlord the difference between the actual cost
of such CW Change and the CW Deposit. Tenant shall have the right to apply the
Additional Allowance (as defined in the Lease) towards the CW Deposit. CW Tenant
Change Order Requests shall be signed by Tenant’s Authorized Representative.
               (ii) Landlord’s Approval of CW Changes. If Landlord does not
notify Tenant in writing of Landlord’s decision either to proceed with or
abandon Tenant requested CW Change within ten (10) days after receipt of a CW
Tenant Change Order Request, then such CW Tenant Change Order Request shall be
deemed rejected by Landlord, and Tenant shall not be permitted to alter
Landlord’s Construction Work as contemplated by such CW Tenant Change Order
Request. Landlord may withhold in it sole and absolute discretion its approval
of any CW Tenant Change Order Request; provided, however, Landlord shall not
unreasonably withhold its approval to any CW Change requested by Tenant that is
a CW Permitted Change or that could not reasonably be expected, as reasonably
determined by Landlord, to cause a Design Problem.
          (b) Changes Requested by Landlord.
               (i) CW Landlord Change Order Request. Landlord may request CW
Changes to Landlord’s Construction Work by notifying Tenant thereof in writing
in substantially the same form as the AIA standard change order form (a “CW
Landlord Change Order

EXHIBIT J-2

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Request”), which CW Landlord Change Order Request shall detail the nature and
extent of any requested CW Changes, including, without limitation, (a) the CW
Change, (b) the party required to perform the CW Change, and (c) any
modification of the Approved CW Plans and the Landlord’s Construction Work
Schedule necessitated by the CW Change.
               (ii) Tenant’s Approval of CW Change. Tenant shall have seven
(7) days after receipt of a CW Landlord Change Order Request to notify Landlord
in writing of Tenant’s approval or rejection of the Landlord-requested CW
Change, which approval shall not be unreasonably withheld, conditioned or
delayed. If Tenant fails to respond within such seven (7) days period, then
Landlord shall provide Tenant with a second written notice stating that
“Tenant’s failure to respond within three (3) days after Landlord’s second
notice shall be deemed Tenant’s approval to such CW Landlord Change Order
Request,” and if Tenant does not respond within such three (3) day period, then
Tenant shall be deemed to have approved such CW Landlord Change Order Request.
          (c) CW Permitted Changes. For purposes of this Work Letter, a “CW
Permitted Change” shall mean: (a) minor field changes; (b) changes required by
Governmental Authority; (c) any other changes that: (1) do not materially and
adversely affect the building structure, roof, or building service equipment to
be constructed as part of Landlord’s Construction Work, (2) do not materially
change the size, cost, configuration, or overall appearance of the Expansion
Building or Landlord’s ability to construct Landlord’s Construction Work or
Tenant’s ability to operate its business in the Expansion Building, and (3) will
not extend the Scheduled Completion Date of Landlord’s Construction Work (as set
forth in the Landlord’s Construction Work Schedule) beyond October 1, 2008; and
(d) ordinary development of the Approved CW Plans in a manner not inconsistent
with the Approved CW Plans.
3. Tenant Improvements.
     3.1 TI Program. The Tenant Improvements shall be performed by Landlord at
Tenant’s sole cost and expense and without cost to Landlord (except for the TI
Allowance) and in accordance with the Approved TI Plans (as defined below). On
or before April 1, 2007, Tenant shall prepare and submit to Landlord for
Landlord’s approval a TI Program for the Tenant Improvements (the “TI Program”).
Landlord shall notify Tenant in writing within ten (10) business days after
receipt of the TI Program whether Landlord approves or rejects to the TI Program
and of the manner, if any, in which the TI Program is objectionable. If Landlord
objects to the TI Program, then Tenant shall revise the TI Program and cause
Landlord’s permitted objections to be remedied in the revised TI Program. Tenant
shall then resubmit the revised Tenant Program to Landlord for approval within
ten (10) business days after Tenant receives Landlord’s comments on the TI
Program. Landlord shall not unreasonably withhold its approval of any iteration
of the TI Program so long as the TI Program does not include any Design Problem
and the date when Landlord expects the Tenant Improvements to be Substantially
Completed (the “Expected TI Substantial Completion Date”) based thereon is no
later than October 1, 2008 (the “Target TI Substantial Completion Date”).
Landlord’s approval of or objection to the revised TI Program and Tenant’s
correction of the same shall be in accordance with this Section 3.1 until
Landlord has approved the TI Program in writing. Any delay in the final approval
of the TI Program beyond June 1, 2007 shall be a Tenant Delay except to the
extent that Tenant demonstrates that such delay in the approval of the TI
Program resulted from Landlord’s failure to comply with the requirements of this
Section 3.1. The iteration of the TI Program that is approved by Landlord
without objection shall be referred to herein as the “Approved TI Program”.
     3.2 Schematic TI Plans. Within thirty (30) business days after Landlord’s
approval of the Approved TI Program, Tenant shall prepare and submit to Landlord
for approval schematics covering the Tenant Improvements prepared in conformity
with the Approved TI Program (the “Schematic TI Plans”). The Schematic TI Plans
shall contain sufficient information and detail to accurately describe the
proposed design to Landlord and such other information as Landlord may
reasonably request. Tenant shall be solely responsible for ensuring that the
Approved TI Program and the Schematic TI Plans satisfy Tenant’s business
requirements. Subject to Section 3.4(a)(ii), Landlord shall notify Tenant in
writing within ten (10) business days after receipt of the Schematic TI Plans
whether Landlord approves or objects to the Schematic TI Plans and of the
manner, if any, in which the Schematic TI Plans are objectionable. If Landlord
objects to the Schematic TI Plans, then Tenant shall revise the Schematic TI
Plans and cause Landlord’s reasonable objections to be remedied in the revised
Schematic TI Plans. Tenant shall then

EXHIBIT J-3

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resubmit the revised Schematic TI Plans to Landlord for approval within ten
(10) business days after Tenant received Landlord’s comments to the Schematic TI
Plans. Landlord’s approval of or objection to revised Schematic TI Plans and
Tenant’s correction of the same shall be in accordance with this Section 3.2,
until Landlord has approved the Schematic TI Plans in writing. Landlord shall
not unreasonably withhold its approval of any iteration of the Schematic TI
Plans so long as such iteration of such Schematic TI Plans do not include any
Design Problem, are consistent with the Approved TI Program and the Expected TI
Substantial Completion Date is not later than the Target TI Substantial
Completion Date. Any delay in the final approval of the Schematic TI Plans
beyond the day that is thirty (30) days after Landlord approves the TI Program
shall be a Tenant Delay except to the extent that Tenant demonstrates that such
delay in the approval of the Schematic TI Plans resulted from Landlord’s failure
to comply with the requirements of this Section 3.2. The iteration of the
Schematic TI Plans that is approved by Landlord without objection shall be
referred to herein as the “Approved Schematic TI Plans.”
     3.3 Construction TI Plans. Landlord shall prepare final plans and
specifications for the Tenant Improvements that: (a) are consistent with and are
logical evolutions of the Approved Schematic TI Plans, (b) incorporate TI
Permitted Changes, and (c) incorporate any other Landlord-requested (and Tenant
approved) TI Changes. As soon as such final plans and specifications
(“Construction TI Plans”) are completed, Landlord shall deliver the same to
Tenant for Tenant’s approval, which approval may be reasonably withheld only if:
(i) the Construction TI Plans are not consistent with or logical evolutions of
the Approved Schematic TI Plans, (ii) Tenant intends to request changes to the
Construction TI Plans in accordance with Section 3.4(a)(i), or (iii) Tenant
objects to any Landlord requested TI Change (other than TI Permitted Changes).
Such Construction TI Plans shall be approved or disapproved by Tenant within
seven (7) business days after delivery to Tenant. If Tenant fails to notify
Landlord of disapproval within such seven (7) days period, then Landlord shall
provide Tenant with a second written notice stating that “Tenant’s failure to
respond within three (3) days after Landlord’s second notice shall be deemed
Tenant’s approval to such Construction TI Plans,” and if Tenant does not respond
within such three (3) day period, then Tenant shall be deemed to have approved
such Construction TI Plans. If the Construction TI Plans are disapproved by
Tenant, Tenant shall notify Landlord in writing of its objections to such
Construction TI Plans and shall submit any requested TI Changes through a TI
Tenant Change Order Request (as defined below), then the parties shall confer
and negotiate in good faith to reach agreement on the Construction TI Plans.
Promptly after the Construction TI Plans are approved by Landlord and Tenant,
two (2) copies of such Construction TI Plans shall be initialed and dated by
Landlord and Tenant as soon as approved by Landlord and Tenant, Landlord shall
promptly submit such Construction TI Plans to all appropriate governmental
agencies for approval. The Construction TI Plans so approved, and all change
orders specifically permitted by the Lease, are referred to herein as the
“Approved TI Plans” and shall become part of the Lease as though set forth in
full.
     3.4 Changes to Tenant Improvements. Any changes to the Construction TI
Plans or the Approved TI Plans (each, a “TI Change”) requested by Landlord or
Tenant (other than TI Permitted Changes by Landlord) shall be requested and
instituted in accordance with the provisions of this Article 3 and shall be
subject to the written approval of the other party in accordance with this Work
Letter.
          (a) TI Changes Requested by Tenant.
               (i) TI Tenant Change Order Request. Tenant may request TI Changes
after Tenant approves the Construction TI Plans or the Approved TI Plans, as
applicable, by notifying Landlord thereof in writing in substantially the same
form as the AIA standard change order form (a “TI Tenant Change Order Request”),
which TI Tenant Change Order Request shall detail the nature and extent of any
requested TI Changes, including, without limitation, (a) the TI Change, (b) the
party required to perform the TI Change, and (c) any modification of the
Construction TI Plans or the Approved TI Plans, as applicable. If the nature of
a TI Change requires revisions to the Construction TI Plans or the Approved TI
Plans, as applicable, then Tenant shall be solely responsible for the cost and
expense of such revisions. In the event Landlord approves such TI Change,
Landlord shall: (1) notify Tenant if it reasonably believes such TI Change could
cause a delay in Substantial Completion of the Tenant Improvements; and
(2) provide Landlord’s reasonable estimate of any additional costs and expenses
associated with such TI Change. Tenant shall reimburse Landlord the additional
cost and expense payable by Landlord, as reasonably estimated by Landlord, to
complete the Tenant Improvements due to a Tenant-requested TI Change as “Excess
Costs” in accordance with Section 4.2.2 of the Lease.

EXHIBIT J-4

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               (ii) Landlord’s Approval of TI Changes. All Tenant-requested TI
Changes shall be subject to Landlord’s prior written approval, which shall not
be unreasonably withheld, conditioned or delayed so long as such TI Change would
not create a Design Problem and would not delay Substantial Completion of the
Tenant Improvements beyond the Target TI Substantial Completion Date. Landlord
shall have ten (10) days after receipt of a TI Tenant Change Order Request to
notify Tenant in writing of Landlord’s decision either to proceed with or
abandon Tenant-requested TI Change. If Landlord does not approve in writing a TI
Tenant Change Order Request, then such TI Tenant Change Order Request shall be
deemed rejected by Landlord, and Tenant shall not be permitted to alter Tenant
Improvements as contemplated by such TI Tenant Change Order Request.
          (b) TI Changes Requested by Landlord.
               (i) TI Landlord Change Order Request. Other than TI Permitted
Changes, Landlord may request TI Changes after Tenant approves the Approved TI
Plans by notifying Tenant thereof in writing in substantially the same form as
the AIA standard change order form (a “TI Landlord Change Order Request”), which
TI Landlord Change Order Request shall detail the nature and extent of any
requested TI Changes, including, without limitation, (a) the TI Change, (b) the
party required to perform the TI Change, and (c) any modification of the
Approved TI Plans, or any delay in the Expected TI Substantial Completion Date,
necessitated by the TI Change. If the nature of a Landlord requested TI Change
requires revisions to the Construction TI Plans or the Approved TI Plans, then
Landlord shall be solely responsible for the cost and expense of such revisions
(and such cost shall not be deducted from the TI Allowance).
               (ii) Tenant’s Approval of TI Change. Tenant shall have seven
(7) days after receipt of a TI Landlord Change Order Request to notify Landlord
in writing of Tenant’s approval or rejection of the Landlord-requested TI
Change, which approval shall not be unreasonably withheld, conditioned or
delayed. If Tenant fails to respond within such seven (7) days period, then
Landlord shall provide Tenant with a second written notice stating “that
Tenant’s failure to respond within three (3) days after Landlord’s second notice
shall be deemed Tenant’s approval to such Landlord-requested TI Change,” and if
Tenant does not respond within such three (3) day period, then Tenant shall be
deemed to have approved such Landlord-requested TI Change.
          (c) TI Permitted Changes. For purposes of this Work Letter, a “TI
Permitted Change” shall mean: (a) minor field changes; (b) changes required by
Governmental Authority; (c) any other changes that: (1) do not materially and
adversely affect the building structure, roof, or building service equipment to
be constructed as part of the Tenant Improvements, (2) do not materially change
the size, cost, configuration, or overall appearance of the Tenant Improvements
or Tenant’s ability to operate its business in the Expansion Building, and
(3) will not extend the Expected TI Substantial Completion Date beyond
October 1, 2008; and (d) ordinary development of the Approved TI Plans in a
manner not inconsistent with the Approved TI Plans.
     3.5 TI Allowance.
          (a) Application of TI Allowance. Landlord shall contribute the TI
Allowance toward the costs and expenses incurred in connection with the
performance of the Tenant Improvements, in accordance with Section 4.2 of the
Lease. If the entire TI Allowance is not applied toward or reserved for the
costs of the Tenant Improvements, Tenant shall not be entitled to a credit of
such unused portion of the TI Allowance.
          (b) Approval of Budget for Landlord’s Work. Notwithstanding anything
to the contrary set forth elsewhere in this Work Letter or the Lease, Landlord
shall not have any obligation to expend any portion of the TI Allowance until
Landlord and Tenant shall have approved in writing the budget for the Tenant
Improvements (the “Approved Budget”). Prior to Landlord’s and Tenant’s approval
of the Approved Budget, Tenant shall pay all of the costs and expenses incurred
in connection with Tenant Improvements as they become due. Landlord shall not be
obligated to reimburse Tenant for costs or expenses relating to Tenant
Improvements that exceed either (a) the amount of the TI Allowance (other than
pursuant to Section 4.3 of the Lease pertaining to the Additional Allowance) or
(b) the Approved Budget, either on a line item or on

EXHIBIT J-5

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an overall basis. Tenant’s payment to Landlord of any such excess costs shall be
paid as “Excess Costs” in accordance with Section 4.2.2 of the Lease
          (c) Application of the TI Allowance. Tenant may apply the TI Allowance
for the payment of construction and other costs (including, without limitation,
standard laboratory improvements; finishes; building fixtures; building permits;
and architectural, engineering, design and consulting fees), in each case as
reflected in the Approved Budget and the Approved TI Plans. In no event shall
the TI Allowance be applied to: (i) the purchase of any furniture, personal
property or other non-building system equipment; (ii) the cost of work that is
not authorized by the Approved TI Plans or approved in writing by Landlord,
(iii) costs resulting from any default by Tenant of its obligations under the
Lease, or (iv) costs that are recoverable or reasonably recoverable by Tenant
from a third party (e.g., insurers, warrantors, or tortfeasors).
4. Requests for Consent. Except as otherwise provided in this Work Letter,
Tenant shall respond to all requests for consents, approvals or directions made
by Landlord pursuant to this Work Letter within seven (7) days following
Tenant’s receipt of such request. If Tenant fails to respond within such seven
(7) days period, then Landlord shall provide Tenant with a second written notice
stating that “Tenant’s failure to respond within three (3) days after Landlord’s
second notice shall be deemed approval by Tenant,” and if Tenant does not
respond within such three (3) day period, then Tenant shall be deemed to have
approved such item.
5. Cost Proposal. After the Approved TI Plans are approved by Landlord and
Tenant, and the Contractor and subcontractors have been selected, Landlord shall
provide Tenant with a cost proposal setting forth the reconciled bids and copies
of all sub-bids, which cost proposal shall include, as nearly as possible, the
cost of all items to be incurred in connection with the construction of the
Tenant Improvements (the “Cost Proposal”). The Cost Proposal shall reflect bids
that will be priced by Contractor on an individual item-by-item or
trade-by-trade basis. Tenant shall accept or reject the Cost Proposal within ten
(10) business days after receipt thereof. If Tenant rejects the Cost Proposal,
then Landlord and Tenant shall work together in good faith in an attempt to
agree upon a mutually acceptable Cost Proposal as soon as reasonably
practicable, and a Tenant Delay shall be deemed to exist for a number of days
equal to the number of days elapsed from Tenant’s rejection of the Cost Proposal
until Tenant’s and Landlord’s agreement to a mutually acceptable Cost Proposal.
6. Completion of Landlord’s Work. Landlord shall complete Landlord’s
Construction Work and the Tenant Improvements (collectively the “Landlord’s
Work”) described in this Work Letter in all respects in accordance with the
provisions of the Lease and this Work Letter. Landlord’s Work shall be deemed
completed at such time as Landlord shall furnish to Tenant (a) evidence that all
Landlord’s Work has been completed and paid for in full (which shall be
evidenced by the architect’s certificate of completion), (b) all certifications
and approvals with respect to Landlord’s Work that may be required from any
Governmental Authority and any board of fire underwriters or similar body for
the use and occupancy of the Expansion Premises and (c) an affidavit from
Landlord’s architect certifying that all work performed in, on or about the
Expansion Premises is in accordance with the Approved TI Plans.
7. Miscellaneous.
     7.1 Headings, Etc. Where applicable in this Work Letter, the singular
includes the plural and the masculine or neuter includes the masculine, feminine
and neuter. The Section headings of this Work Letter are not a part of this Work
Letter and shall have no effect upon the construction or interpretation of any
part hereof.
     7.2 Time of the Essence. Time is of the essence with respect to the
performance of every provision of this Work Letter in which time of performance
is a factor.
     7.3 Covenants. Each provision of this Work Letter performable by Landlord
or Tenant shall be deemed both a covenant and a condition.
     7.4 Consent. Whenever consent or approval of either party is required, that
party shall not unreasonably withhold, condition or delay such consent or
approval, except as may be expressly set forth to the contrary.

EXHIBIT J-6

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     7.5 Entire Agreement. The terms of this Work Letter are intended by the
parties as a final expression of their agreement with respect to the terms as
are included herein, and may not be contradicted by evidence of any prior or
contemporaneous agreement, other than the Lease.
     7.6 Invalid Provisions. Any provision of this Work Letter that shall prove
to be invalid, void or illegal shall in no way affect, impair or invalidate any
other provision hereof, and all other provisions of this Work Letter shall
remain in full force and effect and shall be interpreted as if the invalid, void
or illegal provision did not exist.
     7.7 Construction. The language in all parts of this Work Letter shall be in
all cases construed as a whole according to its fair meaning and not strictly
for or against either Landlord or Tenant.
     7.8 Assigns. Each of the covenants, conditions and agreements herein
contained shall inure to the benefit of and shall apply to and be binding upon
the parties hereto and their respective heirs; legatees; devisees; executors;
administrators; and permitted successors, assigns, sublessees. Nothing in this
Section 6.8 shall in any way alter the provisions of the Lease restricting
assignment or subletting.
     7.9 Authority. That individual or those individuals signing this Work
Letter guarantee, warrant and represent that said individual or individuals have
the power, authority and legal capacity to sign this Work Letter on behalf of
and to bind all entities, corporations, partnerships, limited liability
companies, joint venturers or other organizations and entities on whose behalf
said individual or individuals have signed.
     7.10 Counterparts. This Work Letter may be executed in one or more
counterparts, each of which, when taken together, shall constitute one and the
same document.
     7.11 Notice of Completion. Within ten (10) days after completion of
construction of the Tenant Improvements, Landlord shall cause a Notice of
Completion to be recorded in the office of the Recorder of the County in which
the Expansion Building is located and shall furnish a copy thereof to Tenant
upon such recordation.
     7.12 No Fee to Landlord. Except as otherwise provided in the Lease,
Landlord shall receive no fee for supervision, profit, over overhead in
connection with the Landlord’s Construction Work or Tenant Improvement work. In
no event shall this Section 7.12 limit the fees that are payable to the
architect, engineering consultants, design team, general contractor and
subcontractors.
     7.13 Staging Area. During the period prior to the Commencement Date, Tenant
shall have the right, without the obligation to pay Rent, to use empty space in
the Expansion Building (if any), as designated by Landlord, in its sole and
absolute discretion, for the purposes of storing and staging its furniture and
equipment only. With respect to this free storage space, if any, Tenant shall be
responsible for providing all insurance and for providing any necessary fencing
or other protective facilities. Tenant shall hold Landlord harmless and shall
indemnify and defend Landlord from and against any and all Claims arising out of
or in connection with the use of such storage space by Tenant. Tenant shall be
obligated to remove all of the stored materials and its fencing and other
facilities within five (5) business days after Tenant’s receipt of written
notice from Landlord stating that such staging area is needed by Landlord in
which event comparable vacant space, to the extent such space is available (as
determined by Landlord in its sole and absolute discretion), shall be made
available to Tenant as a substitute staging area.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

EXHIBIT J-7

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     IN WITNESS WHEREOF, Landlord and Tenant have executed this Work Letter to
be effective on the date first above written.

          LANDLORD:    
 
        BMR-9885 TOWNE CENTRE DRIVE LLC,
a Delaware limited liability company    
 
       
By:
       
 
       
Name:
       
 
       
Title:
       
 
       
 
        TENANT:    
 
        ILLUMINA, INC.,
a Delaware corporation    
 
       
By:
       
 
       
Name:
       
 
       
Title:
       
 
       

EXHIBIT J-8

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EXHIBIT A-1
RESPONSIBILITY MATRIX

      BMR — Towne Centre Drive, LLC     Scope Allocation Matrix- Base building
vs. Tenant Work     Illumina   1/22/2007

                                              Constructed by                    
Owner during             Constructed   Base Building     Included in   by
Tenant,   construction,     Shell / Base   funded by TI   funded by TI    
Building by   Allowance(s)   Allowance(s) Description   Owner   as needed   as
needed
Site work
                       
Sidewalks and Curbs
    X                  
Pedestrian paved areas (San Diego Buff at main entry plaza and link to buildings
A&B)
    X                  
Landscaping
    X                  
Parking and Roads
    X                  
Ground floor parking garage
    X                  
Subterranean parking garage
    X                  
Parking garage, security gates and security systems
                    X  
 
                       
Code Compliance
                       
Base building construction in accordance w/ req of the City of San Diego
building codes
    X                  
Building Led Components
            X          
Tenant build out compliance w/ applicable codes @ the time of fit-up
            X          
 
                       
Structure
                       
Concrete floor stabs over metal deck, typical live load capacity pf 100 psf,
    X                  
a predetermined of 2 structural bays upgradeable to a capacity of 125 psf,
            X          
including a 20 psf partition allowance
    X                  
Live load increases for tenant loads
            X          
Floor to floor heights: 16’-0” (excluding garage levels)
    X                  
 
                       
Steel framing w/ diagonal bracing & composite steel & concrete floors & roofs,
    X                  
fireproofed as required by code
    X                  
Mechanical screen at roof level
    X                  
Stub-up columns for structural supports for tenant supplied equipment (not
included in base building)
            X          
Structural support above roof for Tenant equipment
            X          
Grate walkways on structural support (not included in base building)
            X          
Misc metal items (lintels, elevator angles, etc.) related to base building
construction
    X                  
Misc metal items & concrete pads & structural modifications related to tenant
fit-out
            X          
 
                       
Exterior
                       
Exterior wall assembly (Cement plaster over metal frame construction, storefront
type window wall systems and stone accents)
    X                  
Insulation & Vapor barrier @ spandrel areas of exterior walls
    X                  
Service door consisting of metal coiling doors, electricity operated
                    X  
On grade service drive
    X                  
Loading Dock below grade with electric dock leveler
                    X  
Entry Canopy in general compliance and appearance as shown on the approved
architectural renderings
    X                  
 
                       
Roofing
                       
Weather tight membrane roofing system (3 ply plus a cap sheet built-up roofing
system)
    X                  
Walkway pads to base building mechanical equipment
    X                  
Walkway pads to tenant mechanical equipment
            X          

EXHIBIT J-9

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                                              Constructed by                    
Owner during             Constructed   Base Building     Included in   by
Tenant,   construction,     Shell / Base   funded by TI   funded by TI    
Building by   Allowance(s)   Allowance(s) Description   Owner   as needed   as
needed
Common Areas
                       
Accessible main entrance
    X                  
First floor lobby framing and fire taped sheetrock
    X                  
Typical floor lobbies and elevator entrances for single tenant floors
            X          
Finished toilet rooms — core areas only
                    X  
Base building electrical room
    X                  
Finished exit stairways w/ painted walls & sealed concrete floors
    X                  
Main telephone room @ Level 1
    X                  
Ships ladder roof access with 3'x5'
                    X  
Doors and frames @ common areas:
    X                  
Hollow metal frames
    X                  
Hollow metal doors @ service areas
    X                  
Solid core wood doors @ other areas
    X                  
Lever hardware @ common areas
    X                  
Doors and frames w/in tenant areas & @ entry off elevator lobby
            X          
Enclosed area for standby generators
            X          
Tenant toilet rooms & kitchen in tenant areas
            X          
Finished loading area w/ truck and trash bays
    X                  
Area for storage @ ground floor level
    X                  
 
                       
Elevators
                       
Provisions for 3 building elevators (2 passenger, 1 service elevator)
    X                  
4 Stop passenger elevator at main entry with allowance for cab finish
    X                  
4 stop passenger elevator at west entry
            X          
3 stop service elevator at East entrance
            X          
 
                       
Window Treatment
                       
Building standard blinds @ at windows
            X          
 
                       
Tenant Areas
                       
Drywall, insulation and stud back up @ inside face of exterior walls
            X          
Drywall on tenant side of base building rooms and shafts fire taped and finished
            X          
Shaft enclosures for tenant use
            X          
Column enclosures w/in tenant spaces
            X          
Partitions, ceilings, floorings, painting, finishes, doors, millwork and all
office, laboratory, and animal space build-out w/in tenant area
            X          
 
                       
Equipment
                       
Tenant Equipment
            X          
 
                       
Fire Protection
                       
Combination sprinkler/standpipe system w/ fire department valves
    X                  
Fire service and double check valve assembly
    X                  
Alarm check valve and fire dept connection
    X                  
Floor control valve assemblies and test drains
    X                  
Sprinkler coverage to all core areas
    X                  
Branch distribution to all open shell space
    X                  
Modifications to branch distribution in tenant area
            X          
Secondary fire suppression systems
            X          
Flow switches, tamper switches, pressure switches
    X                  
Modification of sprinkler piping and head layout to suit tenant build-out and
hazard index
            X          
 
                       
Plumbing
                       
below grade sanitary waste system and risers to cap 4” above ground floor FF
    X                  
Sanitary waste system distribution to tenant areas
            X          
Potable water from meter to core area. Cap 4” above ground finish floor.
    X                  
Backflow preventors at entrance
    X                  
Water provided at city pressure
    X                  
Domestic water heaters and hot water supply piping
            X          
Non Potable cold water system, back flow devices and risers
    X                  

EXHIBIT J-10

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                                              Constructed by                    
Owner during             Constructed   Base Building     Included in   by
Tenant,   construction,     Shell / Base   funded by TI   funded by TI    
Building by   Allowance(s)   Allowance(s) Description   Owner   as needed   as
needed
Gas
                       
Gas service to the building
    X                  
Gas main to the roof for base building requirements
    X                  
Gas distribution for base building systems
    X                  
Low-pressure gas riser for tenant use
            X          
Low-pressure gas distribution to tenant requirements
            X          
 
                       
H.V.A.C
                       
Air handling units with capacity for 60% lab and 40% office at 288SF/ton at Labs
and 400SF/ton at Office. Average building coverage of 325SF/ton of occupied
space.
    X                  
Exhaust for common areas per code
    X                  
Exhaust for subterranean parking garage
    X                  
Exhaust capacity for office and lab
            X          
Supply and exhaust duct risers for additional tenant systems
            X          
Vertical distribution of supply and return air systems
                    X  
Supply and exhaust system, including ductwork, control boxes, grilles,
registers, and diffusers in tenant areas
            X          
Boilers (in support of HVAC system described above)
    X                  
Automatic temperature control system for base building systems
    X                  
Automatic temperature control system for tenant areas and systems
            X          
 
                       
Electrical
                       
Main electrical service @ 4000 amps
    X                  
Distribution to tenant spaces and equip
            X          
Optional standby generators and feeders to distribution panels for tenant use
            X          
Electric closest at first floor for base building systems
    X                  
Additional electric closets for tenant areas
            X          
Power distribution for tenant areas
            X          
Fire alarm systems and risers
    X                  
Fire alarm devises in tenant spaces
            X          
Lighting in common and base building areas
    X                  
Lighting in tenant areas
            X          
Lighting protection system for base building systems
    X                  
Empty telephone/data conduits into building main room
    X                  
Telephone/data system, including service, risers, wiring, closets, and
distribution
            X          
Lighting protection system for tenant systems
            X          
 
                       
Security
                       
Card access at bldg entries and w/in elevators
            X          
Card access and/or alarm systems into or w/in Tenant areas
            X          
Security system for base bldg area
            X          
Security system for tenant areas. Tenant systems need to be coordinated w/ the
base bldg system
            X          
 
                       
Acoustical
                       
Acoustical sound attenuation and isolation of base bldg systems
    X                  
Acoustical sound attenuation and isolation of tenant systems
            X          
 
                       
Other
                       
Cable TV conduit into Building Main Service Room
            X          
Cable TV service
            X          

EXHIBIT J-11

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EXHIBIT A-2
LANDLORD’S CONSTRUCTION WORK SCHEDULE
(LANDLORD’S CONSTRUCTION CHART) [a29658a2965807.gif]

EXHIBIT J-12

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(LANDLORD’S CONSTRUCTION CHART) [a29658a2965808.gif]

EXHIBIT J-13

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(LANDLORD’S CONSTRUCTION CHART) [a29658a2965809.gif]

EXHIBIT J-14

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EXHIBIT B
OUTLINE SPECIFICATIONS
(See Attached)

EXHIBIT J-15

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EXHIBIT K
FORM OF LETTER OF CREDIT
[On letterhead or L/C letterhead of Issuer.]
LETTER OF CREDIT
Date:                     , 200___

         
 
      (the “Beneficiary”)      
 
             
 
             
Attention:
       
 
       
L/C. No.:
       
 
       
Loan No.:
       
 
       

Ladies and Gentlemen:
     We establish in favor of Beneficiary our irrevocable and unconditional
Letter of Credit numbered as identified above (the “L/C”) for an aggregate
amount of $                    , expiring at ___:00 p.m. on                     
or, if such day is not a Banking Day, then the next succeeding Banking Day (such
date, as extended from time to time, the “Expiry Date”). “Banking Day” means a
weekday except a weekday when commercial banks in                      are
authorized or required to close.
     We authorize Beneficiary to draw on us (the “Issuer”) for the account of
                     (the “Account Party”), under the terms and conditions of
this L/C.
     Funds under this L/C are available by presenting the following
documentation (the “Drawing Documentation”): (a) the original L/C and (b) a
sight draft substantially in the form of Exhibit A, with blanks filled in and
bracketed items provided as appropriate. No other evidence of authority,
certificate, or documentation is required.
     Drawing Documentation must be presented at Issuer’s office at
                     on or before the Expiry Date by personal presentation,
courier or messenger service, or fax. Presentation by fax shall be effective
upon electronic confirmation of transmission as evidenced by a printed report
from the sender’s fax machine. After any fax presentation, but not as a
condition to its effectiveness, Beneficiary shall with reasonable promptness
deliver the original Drawing Documentation by any other means. Issuer will on
request issue a receipt for Drawing Documentation.
     We agree, irrevocably, and irrespective of any claim by any other person,
to honor drafts drawn under and in conformity with this L/C, within the maximum
amount of this L/C, presented to us on or before the Expiry Date, provided we
also receive (on or before the Expiry Date) any other Drawing Documentation this
L/C requires.
     We shall pay this L/C only from our own funds by check or wire transfer, in
compliance with the Drawing Documentation.
     If Beneficiary presents proper Drawing Documentation to us on or before the
Expiry Date, then we shall pay under this L/C at or before the following time
(the “Payment Deadline”): (a) if presentment is made at or before noon of any
Banking Day, then the close of such Banking Day; and (b) otherwise, the close of
the next Banking Day. We waive any right to delay payment beyond the Payment
Deadline. If we determine that Drawing Documentation is not proper, then we
shall so advise Beneficiary in writing, specifying all grounds for our
determination, within one Banking Day after the Payment Deadline.
     Partial drawings are permitted. This L/C shall, except to the extent
reduced thereby, survive any partial drawings.
     We shall have no duty or right to inquire into the validity of or basis for
any draw under this L/C or any Drawing Documentation. We waive any defense based
on fraud or any claim of fraud.

EXHIBIT K-1

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

 

     The Expiry Date shall automatically be extended by one year (but never
beyond ___ the “Outside Date”) unless, on or before the date thirty (30) days
before any Expiry Date, we have given Beneficiary notice that the Expiry Date
shall not be so extended (a “Nonrenewal Notice”). We shall promptly upon request
confirm any extension of the Expiry Date under the preceding sentence by issuing
an amendment to this L/C, but such an amendment is not required for the
extension to be effective. We need not give any notice of the Outside Date.
     Beneficiary may from time to time without charge transfer this L/C, in
whole but not in part, to any transferee (the “Transferee”). Issuer shall look
solely to Beneficiary for payment of any fee for any transfer of this L/C.
Beneficiary or Transferee shall consummate such transfer by delivering to Issuer
the original of this L/C and a Transfer Notice substantially in the form of
Exhibit B, purportedly signed by Beneficiary, and designating Transferee. Issuer
shall promptly reissue or amend this L/C in favor of Transferee as Beneficiary.
Upon any transfer, all references to Beneficiary shall automatically refer to
Transferee, who may then exercise all rights of Beneficiary. Issuer expressly
consents to any transfers made from time to time in compliance with this
paragraph.
     Any notice to Beneficiary shall be in writing and delivered by hand with
receipt acknowledged or by overnight delivery service such as FedEx (with proof
of delivery) at the above address, or such other address as Beneficiary may
specify by written notice to Issuer. A copy of any such notice shall also be
delivered, as a condition to the effectiveness of such notice, to:
                     (or such replacement as Beneficiary designates from time to
time by written notice).
     No amendment that adversely affects Beneficiary shall be effective without
Beneficiary’s written consent.
     This L/C is subject to and incorporates by reference: (a) the Uniform
Customs and Practice for Documentary Credits, International Chamber of Commerce
Publication No. 500 (the “UCP”); and (b) to the extent not inconsistent with the
UCP, Article 5 of the Uniform Commercial Code of the State of New York.
Very truly yours,
[Issuer Signature]

EXHIBIT K-2

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

 

EXHIBIT A
FORM OF SIGHT DRAFT
[BENEFICIARY LETTERHEAD]
TO:
[Name and Address of Issuer]
SIGHT DRAFT
AT SIGHT, pay to the Order of                     , the sum of
                     United States Dollars ($                    ). Drawn under
[Issuer] Letter of Credit No.                      dated                     .
[Issuer is hereby directed to pay the proceeds of this Sight Draft solely to the
following account:                     .]
[Name and signature block, with signature or purported signature of Beneficiary]
Date:                     

EXHIBIT K-3

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EXHIBIT B
FORM OF TRANSFER NOTICE
[BENEFICIARY LETTERHEAD]
TO:
[Name and Address of Issuer] (the “Issuer”)
TRANSFER NOTICE
By signing below, the undersigned, Beneficiary (the “Beneficiary”) under
Issuer’s Letter of Credit No.                      dated                     
(the “L/C”), transfers the L/C to the following transferee (the “Transferee”):
[Transferee Name and Address]
The original L/C is enclosed. Beneficiary directs Issuer to reissue or amend the
L/C in favor of Transferee as Beneficiary. Beneficiary represents and warrants
that Beneficiary has not transferred, assigned, or encumbered the L/C or any
interest in the L/C, which transfer, assignment, or encumbrance remains in
effect.
[Name and signature block, with signature or purported signature of Beneficiary]
Date:                     

EXHIBIT K-4

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EXHIBIT L
RECIPROCAL EASEMENT AGREEMENT
RECORDING REQUESTED BY:
BMR-9865 Towne Centre Drive LLC
General Counsel / Finance Department
17140 Bernardo Center Drive, Suite 222
San Diego, CA 92128
SPACE ABOVE LINE FOR RECORDER’S USE ONLY
RECIPROCAL EASEMENT AND COVENANT AGREEMENT
     This RECIPROCAL EASEMENT AND COVENANT AGREEMENT (together with all exhibits
attached hereto and by this reference incorporated herein, this “Agreement”) is
made and entered into as of         , 2007 (the “Effective Date”), by and
between BMR-9885 TOWNE CENTRE DRIVE LLC, a Delaware limited liability company
(together with its successors and assigns, the “Parcels 1&2 Owner”), whose
address is 17140 Bernardo Center Drive, Suite 222, San Diego, California 92128
and BMR-9865 TOWNE CENTRE DRIVE LLC, a Delaware limited liability company
(together with its successors and assigns, the “Parcel 3 Owner” and, together
with the Parcels 1&2 Owner, the “Owners”)), whose address is 17140 Bernardo
Center Drive, Suite 222, San Diego, California 92128.
RECITALS
     A. WHEREAS, the Parcels 1&2 Owner owns three (3) parcels of real property
located in the City of San Diego, County of San Diego, State of California,
legally described as: (1) Parcel 1 of Parcel Map 18286 filed with the San Diego
County Recorder on June 21, 1999 (together with any easements and appurtenances
thereto, the “Parcel 1 Land”); (2) Parcel 2 of Parcel Map 18286 filed with the
San Diego County Recorder on June 21, 1999 (together with any easements and
appurtenances thereto, the “Parcel 2 Land” and, together with the Parcel 1 Land,
the “Parcels 1&2 Land”); and (3) Parcel 3 of Parcel Map 18286 filed with the San
Diego County Recorder on June 21, 1999 (together with any easements and
appurtenances thereto, the “Parcel 3 Land” and, collectively with the Parcel 1
Land and the Parcel 2 Land, the “Parcels”). The Parcels 1&2 Land is improved by
two (2) buildings consisting of approximately 104,870 square feet of space (the
“Parcels 1&2 Building”), and the Parcel 3 Land is improved by one (1) building
consisting of approximately 11,000 square feet of space (the “Parcel 3
Building”).
     B. WHEREAS, concurrently herewith, the Parcels 1&2 Owner is conveying to
the Parcel 3 Owner all of its right, title and interest in the Parcel 3 Land,
together with the Parcel 3 Building.
     C. WHEREAS, the Parcel 3 Owner intends to construct an additional building
on the Parcel 3 Land (the “Additional Parcel 3 Building” and, collectively with
the Parcels 1&2 Building and the Parcel 3 Building, the “Buildings”), totaling
approximately 83,866 rentable square feet.
     D. WHEREAS, the Parcel 3 Land is improved by, among other things, a fitness
center, a full court basketball/sports courts, outdoor seating areas, dressing,
locker and working rooms, restrooms, and showers (the “Recreation Facilities”).
     E. WHEREAS, pursuant to that certain: (a) Amended and Restated Lease dated
as of January 26, 2007 (the “Parcels 1&2 Lease”), the Parcels 1&2 Owner is
leasing the Parcels 1&2 Building to Illumina, Inc., a Delaware corporation (the
“Parcels 1&2 Tenant”); (b) Lease dated as of January 26, 2007 (the “Parcel 3
Lease”), the Parcel 3 Owner is leasing a portion of the Parcel 3 Building and,
upon completion, the Additional Parcel 3 Building, to Illumina, Inc., a Delaware
corporation (the “Parcel 3 Tenant”); and (c) Eastgate Pointe Building “D” Lease
dated as of July 6, 2000 (the “Diversified Lease”), Diversified Eastgate Pointe,
LLC, a California limited liability company (as successor in interest to Matsix
Investments, Inc., “Diversified” and,

EXHIBIT L-1

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

 

together with the Parcels 1&2 Tenant and the Parcel 3 Tenant, the “Tenants”), is
leasing a portion of the Parcel 3 Building.
     F. WHEREAS, the Parcels 1&2 Owner and the Parcel 3 Owner desire to grant
each other and their respective Tenants certain rights to use their respective
Parcels, including access rights, parking rights, and certain rights to use the
Recreation Facilities, all in accordance with the following.
     NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and accuracy of which is hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
1. Grant of Easement Rights, Etc.
          1.1 Grant by Parcels 1&2 Owner. Subject to the terms and conditions
hereof: the Parcels 1&2 Owner hereby grants, bargains, sells and conveys
perpetually to the Parcel 3 Owner and its successors in title, for the benefit
of, and appurtenant to, the Parcel 3 Land, a non-exclusive easement and right of
way (the “Parcels 1&2 Driveway Easement”) for the Parcel 3 Benefited Parties (as
defined below) over, upon, through and across the portions of the easement area
described on Exhibit A attached hereto and incorporated hereby (the “Parcels 1&2
Driveway Servient Tenement”), to be used in common with the Parcels 1&2
Benefited Parties (as defined below), for vehicular or pedestrian ingress,
egress and access (“Access”) to and from the public streets adjacent to the
Parcel 3 Land.
          1.2 Grant by Parcel 3 Owner. Subject to the terms and conditions
hereof: the Parcel 3 Owner hereby grants, bargains, sells and conveys
perpetually to the Parcels 1&2 Owner and its successors in title, for the
benefit of, and appurtenant to, the Parcels 1&2 Land, the following easements
and licenses:
          (a) Parcel 3 Driveway Easement: a non-exclusive easement and right of
way (the “Parcel 3 Driveway Easement”) for the Parcels 1&2 Benefited Parties
over, upon, through and across the portions of the easement area described on
Exhibit A attached hereto and incorporated hereby (the “Parcel 3 Driveway
Servient Tenement” and together with the Parcels 1&2 Driveway Servient Tenement,
the “Driveway Servient Tenements”), to be used in common with the Parcel 3
Benefited Parties, for Access to and from the public streets adjacent to Parcels
1&2 Land.
          (b) Parking Easement: from and after substantial completion of the
Additional Parcel 3 Building, a non-exclusive easement and right of way (the
“Parking Easement”) for the Parcels 1&2 Benefited Parties over, upon, through
and across the portions of the easement area and to use the parking spaces
described on Exhibit B attached hereto and incorporated hereby (the “Parking
Servient Tenement”), to be used in common with the Parcel 3 Benefited Parties,
for vehicular parking and Access to the Parcels 1&2 Land. The Parcel 3 Owner has
the right to reasonably establish the location of the pedestrian pathways in the
Parking Servient Tenement so as to minimize (i) the impact on the number of
parking spaces within the Parcel 3 Land and (ii) the likely disruption to the
Parcel 3 Benefited Parties.
          (c) Recreation Facilities: a non-exclusive license (the “Recreation
Facilities License” and, collectively with the Parcel 3 Driveway Easement, the
Parking Easement and the Access Easement, the “Parcel 3 Easements” and, together
with the Parcels 1&2 Driveway Easement, the “Easements”)) for the Parcels 1&2
Benefited Parties, to be used in common with the Parcel 3 Benefited Parties, to
Access, use and enjoy the Recreation Facilities located on the Parcel 3 Land.
The Recreation Facilities License shall include the right of ingress, egress and
regress for pedestrian traffic over and across any and all sidewalks, elevators,
stairways, paths, valleys and lanes within Parcel 3 Land which provides
reasonably direct access from the Parcels 1&2 Land to the Recreation Facilities,
as further described on Exhibit C attached hereto and incorporated hereby (the
“Recreation Facilities Servient Tenement” and, collectively with the Parcel 3
Driveway Servient Tenement, and the Parking Servient Tenement, the “Parcel 3
Servient

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Tenements” and, together with the Parcels 1&2 Driveway Servient Tenement, the
“Servient Tenements”).
          1.3 Temporary Parking Easement. In addition to the Parcel 3 Easements
granted in Section 1.2, the Parcel 3 Owner hereby grants, bargains, sells and
conveys to the Parcels 1&2 Owner and its successors in title, for the benefit
of, and appurtenant to, the Parcels 1&2 Land, a non-exclusive temporary easement
and right of way (the “Temporary Parking Easement”) for the Parcels 1&2
Benefited Parties over, upon, through and across the portions of the easement
area and to use the parking spaces and the pedestrian pathways described on
Exhibit D attached hereto and incorporated hereby (the “Temporary Parking
Servient Tenement”), to be used in common with the Parcel 3 Benefited Parties,
for vehicular parking and Access to the Parcels 1&2 Land. The Parcel 3 Owner has
the right to reasonably establish the location of the pedestrian pathways in the
Temporary Parking Servient Tenement so as to minimize (a) the impact on the
number of parking spaces within the Parcel 3 Land and (b) the likely disruption
to the Parcel 3 Benefited Parties. The Temporary Parking Easement shall be
irrevocable until substantial completion of the Additional Parcel 3 Building
(the “Additional Parcel 3 Building Substantial Completion Date”). During the
term of the Temporary Parking Easement, the Temporary Parking Easement shall be
considered for all purposes under this Agreement as a “Parking Easement.”
Immediately upon the Additional Parcel 3 Building Substantial Completion Date,
the Temporary Parking Easement shall immediately terminate.
          1.4 In General. For purposes of this Agreement the following shall
apply:
          (a) The term “Parcels 1&2 Benefited Parties” shall mean the Parcels
1&2 Owner, the Parcels 1&2 Tenant, and any person from time to time entitled to
the use and occupancy of any portion of the improvements on the Parcel 3 Land as
an owner or under any lease, sublease, license, concession or other similar
agreement, and any of their officers, directors, members, employees, agents,
contractors, customers, vendors, suppliers, visitors, guests, invitees,
licensees, tenants, subtenants and concessionaires.
          (b) The term “Parcel 3 Benefited Parties” shall mean the Parcel 3
Owner, the Parcel 3 Tenant, Diversified, and any person from time to time
entitled to the use and occupancy of any portion of the improvements on the
Parcels 1&2 Land as an owner or under any lease, sublease, license, concession
or other similar agreement, and any of their officers, directors, members,
employees, agents, contractors, customers, vendors, suppliers, visitors, guests,
invitees, licensees, tenants, subtenants and concessionaires.
          (c) The term “Benefited Parties” shall mean the Parcels 1&2 Benefited
Parties and the Parcel 3 Benefited Parties.
          (d) The Easements are not exclusive. Without limiting the generality
of the foregoing, each Owner may also use their property for any purposes which
does not unreasonably interfere with such uses by the other Owner, and/or convey
easements appurtenant or in gross upon, under, over and across their property to
other persons, public and private, for the same purposes as the other Owner’s
use thereof, and for other purposes which do not unreasonably interfere with
such uses by the other Owner, without necessity for further consent or
documentation of any kind by such Owner.
          (e) This Agreement, and the protective covenants, conditions,
restrictions, grants of easements, licenses, rights, rights-of-way, liens,
charges and equitable servitudes set forth therein or herein, shall, except as
otherwise expressly provided therein or herein, (a) be irrevocable and perpetual
in nature (other than the Temporary Parking Easement), (b) be binding upon all
persons having or acquiring any right, title or interest in any property
encumbered thereby, or any part thereof, and upon any successors or assigns to
any such right, title or interest, (c) inure to the benefit of all persons
having or acquiring any right, title or interest in any properties benefited
thereby, or any part thereof, and upon any successors or assigns to any such
right, title or interest, and (d) constitute covenants running with the land
pursuant to applicable law, including without limitation Section 1468 of the
Civil Code of the State of California.

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          (f) The Parcel 3 Easements shall be appurtenant to and shall run with
fee title to the Parcels 1&2 Land. The Parcels 1&2 Driveway Easement shall be
appurtenant to and shall run with fee title to the Parcel 3 Land.
          (g) Nothing herein contained shall be deemed to be a gift or
dedication of any rights in any Parcels to or for the benefit of the general
public or for any public purposes whatsoever, it being the intention of the
parties hereto that this Agreement shall be strictly limited to and for the
purposes herein expressed.
     2. Covenants of the Parcels 1&2 Owner. The Parcels 1&2 Owner covenants and
agrees as follows:
          2.1 Injury, Damage, and Indemnification. The Parcels 1&2 Owner shall
exercise its rights and perform its obligations under this Agreement so as to
reasonably minimize interference with the use of the Parcel 3 Land or
unreasonably disturb any of the Parcel 3 Benefited Parties, including any
construction or alteration work undertaken by the Parcel 3 Owner on the Parcel 3
Land. Subject to Section 6.4, if, in entering any of the Parcel 3 Servient
Tenements, any of the Parcels 1&2 Benefited Parties causes any damage other than
ordinary wear and tear, to landscaping, pavement, site improvements, or other
real or personal property located on the Parcel 3 Land, or causes any injury to
any person, whether such damage, release, or injury is intentional or
unintentional, then the Parcels 1&2 Owner shall:
          (a) promptly reimburse the Parcel 3 Owner the cost to repair any and
all physical damage as necessary to substantially restore the affected area to
the condition that existed immediately before such physical damage; and
          (b) indemnify, defend, and hold harmless the Parcel 3 Owner from and
against any and all demands, claims, liabilities, losses, costs, expenses,
actions, causes of action, damages or judgments, and all expenses (including,
without limitation, attorneys’ fees, mechanic’s liens, charges and
disbursements) incurred in investigating or resisting the same (collectively,
“Claims”) resulting from such damage or injury in accordance with Section 8.
          2.2 No Change of Use. The Parcels 1&2 Owner shall not permit or create
a substantial, permanent or indefinite change in its use of the Parcels 1&2
Driveway Easement.
     3. Covenants of the Parcel 3 Owner. The Parcel 3 Owner covenants and agrees
as follows:
          3.1 Injury, Damage, and Indemnification. Subject to Section 6.4, if,
in entering the Parcels 1&2 Driveway Servient Tenement, any of the Parcel 3
Benefited Parties cause any damage other than ordinary wear and tear, to
landscaping, pavement, site improvements, or other real or personal property
located on the Parcels 1&2 Driveway Servient Tenement, or causes any injury to
any person, whether such damage, release, or injury is intentional or
unintentional, then the Parcel 3 Owner shall:
          (a) promptly reimburse the Parcels 1&2 Owner the cost to repair any
and all physical damage as necessary to substantially restore the affected area
to the condition that existed immediately before such physical damage; and
          (b) indemnify, defend, and hold harmless the Parcels 1&2 Owner from
and against any and Claims resulting from such damage or injury in accordance
with Section 8.
          3.2 No Change of Use. The Parcel 3 Owner shall not permit or create a
substantial, permanent or indefinite change in its use of the Parcel 3 Easements
other than in connection with the construction of the Additional Parcel 3
Building.
     4. Maintenance and Repair of Servient Tenements.
          4.1 Maintenance of Servient Tenements.
          (a) General Provisions.
          (i) As used in this Agreement, the term “Maintenance” (or as a verb,
to “Maintain”) means maintain, repair, sweep, and otherwise operate the Servient

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Tenements, as applicable, so that at all times the Servient Tenements, as
applicable, are in a reasonable condition and state of reasonable repair
sufficient for use in accordance with this Agreement.
          (ii) As used in this Agreement, the term “good condition and repair”
means in a condition which is not less than the condition of such Servient
Tenement on the date on which this Agreement was initially recorded, normal wear
and tear excepted.
          (b) Driveway Servient Tenements. The Parcels 1&2 Owner and the Parcel
3 Owner shall each, at their respective cost and expense, Maintain all paved
surfaces within the portion of the Driveway Servient Tenement on its respective
parcel of land with a paved surface and in a smooth, clean, orderly, safe and
good state of repair and condition.
          (c) Parking Servient Tenement. The Parcel 3 Owner shall on a timely
basis perform all Maintenance for the Parking Servient Tenement at the Parcel 3
Owner’s sole cost and expense. The Parking Servient Tenement shall be maintained
in good condition and repair, including all paved surfaces within the portion of
the Parking Servient Tenement with a paved surface and in a smooth, clean,
orderly, safe and good state of repair and condition. The Parcel 3 Owner shall
make all repairs or replacements of, in, on, under, within, upon or about such,
property, whether said repairs involve ordinary or extraordinary repairs or
replacements, necessary to keep the same in safe and good operating and
condition, howsoever the necessity or desirability thereof may arise, and
whether or not necessitated by wear, tear, obsolescence, defects or otherwise.
          (d) Recreation Facilities.
          (i) The Parcel 3 Owner shall on a timely basis perform all Maintenance
for the Recreation Facilities Servient Tenement at the Parcel 3 Owner’s sole
cost and expense. The Recreation Facilities Servient Tenement shall be
maintained in good condition and repair, including all paved surfaces within the
portion of the Recreation Facilities Servient Tenement with a paved surface and
in a smooth, clean, orderly, safe and good state of repair and condition
          (ii) The Parcel 3 Owner shall on a timely basis Maintain in good
condition and repair and make all repairs or replacements of, in, on, under,
within, upon or about such, Recreation Facilities, whether said repairs or
replacements are to the interior or exterior thereof, or structural or
non-structural components thereof, or involve ordinary or extraordinary repairs
or replacements, necessary to keep the same in safe and good operating and
condition, howsoever the necessity or desirability thereof may arise, and
whether or not necessitated by wear, tear, obsolescence, defects or otherwise.
In the event the Parcel 3 Owner decides to replace any of the Recreation
Facilities, the Parcel 3 Owner shall replace such Recreation Facilities with
Recreation Facilities substantially equivalent or better and providing
substantially the same quality of service or better.
          (iii) No material changes in the improvements or use of the Recreation
Facilities shall be permitted without the prior written approval of Parcels 1&2
Owner, which consent shall not be unreasonably withheld, conditioned or delayed.
          4.2 Waste. Neither the Parcels 1&2 Owner nor the Parcel 3 Owner shall
suffer or commit, and shall use all reasonable precaution to prevent, waste to
any of their respective Servient Tenements.
          4.3 Failure to Maintain the Servient Tenements. If an Owner shall fail
to perform the Maintenance of its respective Servient Tenements as set forth in
Section 4.1, the other Owner shall have the right, but not the obligation,
(a) following thirty (30) days’ written notice and opportunity to cure (or such
longer period as may be necessary to cure such failure if such default cannot be
completed within such period provided such Owner commences to cure within said
thirty (30) day period and thereafter diligently prosecutes such cure to
completion), or (b) in the case of any facts or circumstances that create an
imminent risk of damage to such Servient Tenements or injury to, or death of,
persons, without written notice, to perform such Maintenance as it deems
reasonable and necessary. Upon written demand, the Owner in default

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shall reimburse the other Owner for the reasonable costs incurred by it in
performing such Maintenance. Such written demand for payment shall include a
statement of costs and reasonable detail of expenses.
          4.4 Damage or Destruction. Subject to Section 4.5, if any portion of
the Servient Tenements are damaged by fire or other perils, then the Owner of
such Servient Tenements shall, at such Owner’s sole cost and expense, commence
and proceed diligently with the work of repair, reconstruction and restoration
of such Servient Tenements, in as timely a manner as practicable under the
circumstances.
          4.5 Condemnation. Notwithstanding anything to the contrary set forth
herein, neither Owner shall have any obligation to restore, reconstruct or
replace any of the Servient Tenements located on its property in the event that
such Servient Tenements is taken pursuant to a condemnation (or similar) action
by a governmental or quasi-governmental entity. In any of such events, this
Agreement shall automatically terminate without the need for any further action
by any Owner as to such Servient Tenements that has been affected by such
casualty or condemnation.
          4.6 Compliance with Law. Each Owner and each Benefited Party shall, at
its sole cost and expense, promptly comply with all federal, state and local
laws, ordinances, regulations, codes, rules, orders and safety guidelines
pertaining to this Agreement, the Parcels 1&2 Land, the Parcel 3 Land, or any
other matter within the scope of this Agreement (collectively, “Laws”) and all
recorded documents or recorded amendments thereto affecting the Parcels or any
portion thereof, and with the requirements of any board of fire underwriters or
other similar body now or hereafter constituted relating to or affecting the
condition, use or occupancy of the Parcels.
          4.7 Rules and Regulations. The Parcel 3 Owner may establish and
modify, from time to time, reasonable rules and regulations (the “Rules and
Regulations”) governing the use of the Recreation Facilities. The Parcels 1&2
Owner covenants and agrees to use commercially reasonable efforts to cause the
Parcels 1&2 Benefited Parties to comply with all applicable Rules and
Regulations. The Parcel 3 Owner shall have the right to refuse to allow any of
the Parcels 1&2 Benefited Parties access to the Recreation Facilities if such
Parcels 1&2 Benefited Party has not complied with the applicable Rules and
Regulations after receiving written notice of such failure to comply.
          4.8 Use of Easements.
          (a) The use of the Easements by the parties hereto shall be expressly
conditioned upon the compliance by such parties with each of the terms and
conditions specified in this Agreement (including, but not limited to, the
applicable Rules and Regulations), which Rules and Regulations shall be
uniformly applied by the parties hereto to all Benefited Parties without
discrimination.
          (b) No fence or other barrier shall be erected or permitted within or
across any portion of the Driveway Servient Tenements or the Parking Servient
Tenement which would prevent or obstruct the passage of pedestrian or vehicular
travel; provided, however, that the foregoing shall not prohibit the temporary
erection of barricades which are reasonably necessary for security and/or safety
purposes in connection with the construction of the Additional Parcel 3
Building, provided that all such work shall be conducted to reasonably minimize
the interference with the use of such Servient Tenement, and such work shall be
diligently prosecuted to completion.
          (c) Access Cards. Notwithstanding any other provision of this
Agreement, the Parcel 3 Owner shall have the right to restrict access to the
Recreation Facilities located in the Parcel 3 Building, subject to the
provisions of this Section 4.8:
          (i) The access to the Recreation Facilities if locked, shall
incorporate into their design a system of being opened by an access card, entry
key, remote control mechanism or other similar controlled access device (an
“Access Card”). The Parcel 3 Owner shall provide to the Parcels 1&2 Owner a
reasonable initial supply of Access Cards (the reasonableness of such supply to
be measured in terms of the number of Parcels 1&2 Benefited Parties that will be
accessing the Recreation Facilities).

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The Parcel 3 Owner further shall provide any additional Access Cards reasonably
required by the Parcels 1&2 Owner from time to time, and the Parcels 1&2 Owner
shall reimburse the Parcel 3 Owner for the actual cost thereof.
          (ii) The Parcels 1&2 Owner shall maintain a list of those Parcels 1&2
Benefited Parties to whom Access Cards have been provided, and the Parcels 1&2
Owner shall provide copies of such lists from time to time upon request to the
Parcel 3 Owner.
          (iii) The intent of the foregoing is that the scope of the access,
ingress and egress rights enjoyed by the Parcels 1&2 Owner of the Recreation
Facilities shall not be diminished by the provisions of this Section 4.8 except
that exercise of such rights of the Recreation Facilities may be controlled by
the Access Cards so long as the Parcel 3 Owner provides the Parcels 1&2 Owner
with Access Cards that operate in the manner described in this Section 4.8.
     5. Construction of Additional Parcel 3 Building: Before the Parcel 3 Owner
commences any construction of the Additional Parcel 3 Building, the Parcel 3
Owner agrees to coordinate and discuss any necessary security precautions or
restrictions to the Easements necessary to protect the Parcels 1&2 Benefited
Parties in connection with the Parcels 1&2 Benefited Parties’ use of the Parcel
3 Easements. The Parcel 3 Owner shall have the ability to relocate the Parcel 3
Easements at its own expense to any other location on the Parcel 3 Land so long
as relocation shall continue to reasonably provide Access to the Recreation
Facilities or the Parcels 1&2 Land, as applicable.
     6. Insurance: The Owners shall procure and maintain the following
insurance:
          6.1 Insurance. Each Owner shall, at its own cost and expense, procure
and maintain in effect, a comprehensive public liability insurance with limits
of not less than Five Million Dollars ($5,000,000) per occurrence for death or
bodily injury and property damage with respect to the their respective Parcel.
Such insurance policies shall name the other Owner, BioMed Realty, L.P., BioMed
Realty Trust, Inc., and Mortgagees as additional insureds.
          6.2 Insurance Provisions. Each policy described in this Section 6
shall provide that the knowledge or acts or omissions of any insured party shall
not invalidate the policy as against any other insured party or otherwise
adversely affect the rights of any other insured party under any such policy;
(ii) shall provide (except for liability insurance described in Section 6.1, for
which it is inapplicable) by endorsement or otherwise, that the insurance shall
not be invalidated should any of the insureds under the policy waive in writing
prior to a loss any or all rights of recovery against any party for loss
occurring to the property insured under the policy, if such provisions or
endorsements are available and provided that such waiver by the insureds does
not invalidate the policy or diminish or impair the insured’s ability to collect
under the policy, or unreasonably increase the premiums for such policy unless
the party to be benefited by such endorsement or provision pays such increase;
(iii) shall provide for a minimum of thirty (30) days’ advance written notice of
the cancellation, non-renewal or material modification thereof to all insureds
thereunder; (iv) shall include a standard mortgagee endorsement and loss payable
clause in favor of the Mortgagees reasonably satisfactory to them; and (v) shall
not include a co-insurance clause.
          6.3 Limits of Liability. Insurance specified in this Section 6 shall
be jointly reviewed by the Owners periodically at the request of any Owner, but
no review will be required more often than annually, to determine if such
limits, deductible amounts and types of insurance are reasonable and prudent in
view of the type, place and amount of risk to be transferred and the financial
responsibility of the insureds, and to determine whether such limits, deductible
amounts and types of insurance comply with the requirements of all applicable
Laws and whether on a risk management basis, additional types of insurance or
endorsements against special risks should be carried or whether required
coverages or endorsements should be deleted. In connection with such periodic
review, each Owner shall make reasonably available to the other any Mortgagee
(as defined below) insurance requirements that apply to such Owner. Limits of
liability may not be less than limits required by Mortgagees. Such limits shall
be increased or decreased, deductible amounts increased or decreased or types of
insurance shall be modified, if justified, based upon said review, and upon any
such increase, decrease or modification, the Owners shall, at any Owners
election, execute an instrument in recordable form confirming such increase,
decrease or modification, which any Owner may record with the San Diego County
Recorder’s Office as a supplement to this Agreement.

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          6.4 Waiver. Provided that such a waiver does not invalidate the
respective policy or policies or diminish or impair the insured’s ability to
collect under such policy or policies, each Owner hereby waives all claims for
recovery from the other Owner for any loss or damage to any of its property
insured (or required hereunder to be insured) under valid and collectible
insurance policies to the extent of any recovery collectible (or which would
have been collectible had such insurance required hereunder been obtained) under
such insurance policies plus any deductible amounts.
          6.5 Delegate. Each Owner shall have the right to delegate its
obligations under this Section 6 to its respective Tenants.
     7. Reimbursements: Any reimbursements due to a Owner from the other Owner
which are not paid within fifteen (15) days of receipt of any invoice therefore
shall bear interest at a rate equal to the prime rate, as published in The Wall
Street Journal from time to time, plus three percent (3%) per annum, not to
exceed the highest rate allowed by law. If The Wall Street Journal no longer
publishes such prime rate, then the Parcel 3 Owner shall reasonably designate a
substitute publication that is nationally recognized as an authoritative source
for interest rate information.
     8. Indemnification: Subject to Section 6.4, each Owner (hereinafter as used
in this Section 8, the “Indemnifying Owner”) covenants and agrees, at its sole
cost and expense, to indemnify, defend and hold harmless the other Owner
(hereinafter as used in this Section 8.1, the “Indemnitee”) from and against any
and all Claims, against Indemnitee, for losses, liabilities, damages, judgments,
costs and expenses by or on behalf of any Person other than the Indemnitee,
arising from: (a) the Indemnifying Owner’s negligent use, possession or
management of the Indemnifying Owner’s property or activities therein; and
(b) the Indemnifying Owner’s or any of such Indemnifying Owner’s Benefited
Parties use, exercise or enjoyment of the applicable Easements, except to the
extent caused by the Indemnitee’s gross negligence or willful misconduct.
Notwithstanding anything to the contrary in this Section 8.1, the Parcel 3 Owner
shall have no responsibility to the Parcels 1&2 Owner for any Claims arising out
of, caused by, or resulting from any of the Parcels 1&2 Benefited Parties’ use
of the Recreation Facilities or the negligence of any of the Parcel 3 Benefited
Parties in connection with the operation and maintenance of such Recreation
Facilities.
     9. Remedies. In the event of any breach, violation, or failure to perform
or satisfy any of the duties or obligations contained in this Agreement
(including without limitation using any Servient Tenement in any manner not
permitted by this Agreement), the Owner to which such duty or obligation is owed
shall have the right to provide written notice to the affecting Owner describing
in reasonable detail the nature of the breach, violation or failure. If such
breach, violation or failure is not cured within thirty (30) days after delivery
of such notice, the Owner delivering the notice shall have the right to enforce
all easements, rights, rights-of-way, charges and equitable servitudes now or
hereafter imposed pursuant to this Agreement. Any court hearing a dispute with
respect to such alleged breach shall have the power to award all rights and
remedies available at law or in equity; provided, however, that no breach of
this Agreement by a Owner shall entitle any other Owner to cancel, rescind or
terminate the rights granted to the breaching Owner hereunder; and provided
further that such complaining Owner shall have the right (a) to require the
breaching Owner to remedy the breach, and (b) in the event of a default in the
payment of any amount due and payable under this Agreement, either Owner, in
addition to any other remedy provided herein or by law, shall have the right to
recover a money judgment for the amount due and payable, including costs and
reasonable attorneys’ fees.
     10. Limitation of Liability.
          10.1 Limitation of Liability. The liability under this Agreement of an
Owner shall be limited to and enforceable solely against the assets of such
Owner constituting an interest in the Parcels (including insurance and
condemnation proceeds attributable to the Parcels) and no other assets of such
Owner.
          10.2 Transfer of Ownership. If an Owner shall sell, assign, transfer,
convey or otherwise dispose of its portion of the Parcel (other than as security
for a loan to such Owner),

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then (a) such Owner shall be entirely freed and relieved of any and all
covenants and obligations arising under this Agreement which accrue under this
Agreement from and after the date such Owner shall so sell, assign, transfer,
convey or otherwise dispose of its interest in such portion of the Parcel, and
(b) the person or entity who succeeds to Owner’s interest in such portion of the
Parcel shall be deemed to have assumed any and all of the covenants and
obligations arising under this Agreement of such Owner both theretofore accruing
or which accrue under this Agreement from and after the date such Owner shall so
sell, assign, transfer, convey or otherwise dispose of its interest in such
Parcel.
     11. Miscellaneous
          11.1 Term. The covenants, conditions and restrictions contained in
this Agreement shall be enforceable by the Owners and their respective
successors and assigns for the term of this Agreement which shall be perpetual
(or if the law provides for a time limit on any covenant, condition, or
restriction, then such covenant, condition or restriction shall be enforceable
for such shorter period permitted by law), subject to amendment as set forth in
Section 11.8. If the law provides for such shorter period, then upon expiration
of such shorter period, said covenants, conditions and restrictions shall be
automatically extended without further act or deed of the Owners, except as may
be required by law, for successive periods of ten (10) years, subject to
amendment or termination as set forth in Section 11.8.
          11.2 Further Assurances. Each Owner shall each promptly upon request
take such further actions, and execute such further documents, as shall be
reasonably necessary or appropriate from time to time to implement and
effectuate the intentions of the Owners as expressed in this Agreement.
          11.3 Estoppel Certificates. At any time and from time to time, within
fifteen (15) days after written request by either Owner or any institutional
mortgagee of an Owner, the Owner receiving such a request shall deliver to the
requesting Owner and/or institutional mortgagee a statement in writing
certifying that this Agreement is unmodified and in full force and effect (or
specifying each such modification), and stating whether or not there is any
default in the performance of any provision contained in this Agreement (and
specifying each such default, if any). If an Owner or institutional mortgagee
shall fail or refuse to deliver such a statement within such period, then as
against such Owner or institutional mortgagee, this Agreement shall be deemed to
be in full force and effect with no defaults hereunder.
          11.4 Notices. Any notice, consent, demand, bill, statement or other
communication required or permitted to be given hereunder shall be in writing
and shall be given by personal delivery, overnight delivery with a reputable
nationwide overnight delivery service, or certified mail (return receipt
requested), and if given by personal delivery, shall be deemed delivered upon
receipt; if given by overnight delivery, shall be deemed delivered one (1) day
after deposit with a reputable nationwide overnight delivery service; and, if
given by certified mail (return receipt requested), shall be deemed delivered
three (3) business days after the time the notifying party deposits the notice
with the United States Postal Service. Any notices given pursuant to this
Agreement shall be sent to the following addresses or at such other single
address within the United States as a party may specify by notice to the other:
If to Parcels 1&2 Owner:
BMR-9885 Towne Centre Drive LLC
17140 Bernardo Center Drive, Suite 222
San Diego, California 92128
Attn: General Counsel/Real Estate
Facsimile: (858) 985-9843
If to Parcel 3 Owner:
BMR-9865 Towne Centre Drive LLC
17140 Bernardo Center Drive, Suite 222
San Diego, California 92128
Attn: General Counsel/Real Estate
Facsimile: (858) 985-9843

EXHIBIT L-9

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          11.5 Governing Law; Modification. This Agreement shall be governed by,
construed and interpreted in accordance with the internal laws of the State of
California, without reference to choice of law principles.
          11.6 Third Party Beneficiaries. This Agreement is made and entered
into for the sole protection and benefit of the parties hereto, their successors
and assigns, and no other person or entity shall under any circumstances be
deemed to be a beneficiary of any of the rights, remedies, terms and provisions
of this Agreement.
          11.7 Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
THE PARTIES HERETO HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE
RELATIONSHIP BETWEEN THE PARTIES HERETO THAT IS BEING ESTABLISHED. THE PARTIES
HERETO ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING
INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR
RELATED FUTURE DEALINGS. THE PARTIES HERETO FURTHER WARRANT AND REPRESENT THAT
EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY
AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.
          11.8 Amendment. This Agreement may be amended or otherwise modified
only in a writing signed and acknowledged by the Parcels 1&2 Owner and the
Parcel 3 Owner, or their respective successors and assigns; provided, however,
(a) for so long as the Parcels 1&2 Lease is in full force and effect, any such
amendment or modification shall be subject to: (i) the prior written consent of
the original named tenant under the Parcels 1&2 Lease, which consent pursuant to
Section 14.2.5 of the Parcels 1&2 Lease shall not be unreasonably withheld,
conditioned or delayed, and (ii) solely with respect to amendments or
modifications that could reasonably be expected to have a material adverse
effect on obligations assumed by any successors and assigns of the original
named tenant under the Parcels 1&2 Lease, the prior written consent of any such
successors and assigns, which consent pursuant to Section 14.2.5 of the Parcels
1&2 Lease shall not be unreasonably withheld, conditioned or delayed; and
(b) for so long as the Parcel 3 Lease is in full force and effect, any such
amendment or modification shall be subject to: (i) the prior written consent of
the original named tenant under the Parcel 3 Lease, which consent pursuant to
Section 17.7 of the Parcel 3 Lease shall not be unreasonably withheld,
conditioned or delayed, and (ii) solely with respect to amendments or
modifications that could reasonably be expected to have a material adverse
effect on obligations assumed by any successors and assigns of the original
named tenant under the Parcel 3 Lease, the prior written consent of any such
successors and assigns, which consent pursuant to Section 17.7 of the Parcel 3
Lease shall not be unreasonably withheld, conditioned or delayed. All amendments
or modifications which result in an increase of the costs and expenses to be
incurred by such successor and assign under Section 14.2.2 of the Parcels 1&2
Lease or Section 17.3 of the Parcel 3 Lease shall be deemed material and
adverse.
          11.9 No Partnership. Each of the parties to this Agreement agree that
by this Agreement no partnership, joint venture or other relationship is created
other than a contractual relationship to perform the obligations specifically
and expressly stated in this Agreement.
          11.10 Notice to Mortgagee’s Rights of Mortgagee:
          (a) The term “Mortgage” as used herein shall mean any mortgage (or any
trust deed) of an interest in the Parcel given primarily to secure the repayment
of money owed by the mortgagor. The term “Mortgagee” as used herein shall mean
the Mortgagee from time to time under any such Mortgage (or the beneficiary
under any such trust deed).
          (b) If a Mortgagee shall have served on the Owners, by personal
delivery or by registered or certified mail return receipt requested, a written
notice specifying the name and address of such Mortgagee, such Mortgagee shall
be given a copy of each and every notice required to be given by one party to
the others at the same

EXHIBIT L-10

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time as and whenever such notice shall thereafter be given by one party to the
others, at the address last furnished by such Mortgagee. The address of any
existing Mortgagee shall be as set forth in its consent to subordination to be
attached hereto in connection with such Mortgage. After receipt of such notice
from a Mortgagee, no notice thereafter given by either party shall be deemed to
have been given unless and until a copy thereof shall have been so given to the
Mortgagee. If a Mortgagee so provides or otherwise requires, and notice thereof
is given by the Mortgagee as provided above:
          (i) A Mortgagee shall have the absolute right, but no duty or
obligation, to cure or correct a breach of this Agreement by the Owner whose
property is secured by the Mortgagee’s Mortgage within any applicable cure
period provided for such breach by such mortgagor Owner plus an additional
period of twenty (20) days after notice to the Mortgagee of expiration of the
cure period allowed the mortgagor Owner before the other Owner may exercise any
right or remedy to which it may be entitled as a Benefitted Party, except
exercise of a self-help right in an emergency situation.
          (ii) Should any prospective Mortgagee require a modification or
modifications of this Agreement, which modification or modifications will not
cause an increased cost or expense to the Owner whose property is not subject to
the Mortgage of such Mortgagee or in any other way materially and adversely
change the rights and obligations of such Owner, then and in such event, such
Owner agrees that this Agreement may be so modified and agrees to execute
whatever documents are reasonably required therefor and deliver the same to the
other Owner within ten (10) business days following written requests therefor by
the other Owner or prospective Mortgagee.
          11.11 Mortgagee Protection Provisions. No breach or violation of the
terms of this Agreement shall defeat or render invalid the lien of any Mortgage
encumbering the Parcels 1&2 Land or the Parcel 3 Land or any portions thereof;
provided, however, that this Agreement and all provisions hereof shall be
binding upon and effective against any subsequent owner of the property or
portion thereof whose title is acquired by foreclosure, trustee’s sale, a deed
in lieu, or other remedies provided in such Mortgage, but such subsequent owners
shall take title free and clear of any of the previous owner’s violations of the
terms of this Agreement that occurred before such transfer of title or
occupancy.
          11.12 Attorney’s Fees. In the event any legal action, proceeding or
arbitration is commenced to interpret or enforce the terms of, or obligations
arising out of, this Agreement, or to recover damages for the breach hereof, the
party prevailing in any such action, proceeding or arbitration shall be entitled
to recover from the non-prevailing party all reasonable attorney’s fees, costs
and expenses incurred by the prevailing party.
          11.13 Counterparts. This Agreement may be executed in one or more
counterparts, each of which, when taken together, shall constitute one and the
same document.
[Signature Page Follows]

EXHIBIT L-11

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     IN WITNESS WHEREOF, the Owners have executed and delivered this Agreement
as of the Effective Date.

                      PARCELS 1&2 OWNER    
 
                    BMR-9885 TOWNE CENTRE DRIVE LLC,
a Delaware limited liability company    
 
                    By:   BIOMED REALTY, L.P.,             a Maryland limited
partnership             its Member    
 
               
 
      By:        
 
                        Name:             Title:    
 
                    PARCEL 3 OWNER    
 
                    BMR-9865 TOWNE CENTRE DRIVE LLC,
a Delaware limited liability company    
 
                    By:   BIOMED REALTY, L.P.,             a Maryland limited
partnership             its Member    
 
               
 
      By:        
 
               
 
      Name:        
 
      Title:        

EXHIBIT L-12

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ACKNOWLEDGMENTS
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
On                                          before me,                         
                                    , a Notary Public, personally appeared ,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the                     person(s) whose name is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacit(ies), and that by his/her/their signature(s) on
the instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.

     
 
Signature of Notary Public
   

(This area for official notarial seal)
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
On                                         before me,                         
                , a Notary Public, personally appeared
                                                            , personally known
to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name is/are subscribed to the within instrument and acknowledged
to me that he/she/they executed the same in his/her/their authorized
capacit(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.
WITNESS my hand and official seal.

     
 
Signature of Notary Public
   

(This area for official notarial seal)
EXHIBIT L-13

 

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CONSENT OF PARCELS 1&2 TENANT
     THE UNDERSIGNED, as the tenant under that certain under that Lease (the
“Parcels 1&2 Lease”), as more particularly defined in Recital D of the foregoing
Reciprocal Easement and Covenant Agreement (“Agreement”) to which this Consent
is attached, hereby (a) consents to the execution and recording of the foregoing
Agreement against the undersigned’s leasehold interest in the real property
subject to the Parcels 1&2 Lease, and (b) agrees that the Parcels 1&2 Lease is
subject and subordinate to the Agreement.
     Dated as of                                           , 2007.

              ILLUMINA, INC.,     a Delaware corporation
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       

EXHIBIT L-14

 

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CONSENT OF PARCEL 3 TENANT
     THE UNDERSIGNED, as the tenant under that certain under that Lease (the
“Parcel 3 Lease”), as more particularly defined in Recital D of the foregoing
Reciprocal Easement and Covenant Agreement (“Agreement”) to which this Consent
is attached, hereby: (a) consents to the execution and recording of the
foregoing Agreement against the undersigned’s leasehold interest in the real
property subject to the Parcel 3 Lease, and (b) agrees that the Parcel 3 Lease
is subject and subordinate to the Agreement.
     Dated as of                                           , 2007.

              ILLUMINA, INC.,     a Delaware corporation
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       

EXHIBIT L-15

 

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CONSENT OF DIVERSIFIED
     THE UNDERSIGNED, as the tenant under that certain under that Eastgate
Pointe Building “D” Lease dated as of July 6, 2000 (the “Diversified Lease”), as
more particularly defined in Recital D of the foregoing Reciprocal Easement and
Covenant Agreement (“Agreement”) to which this Consent is attached, hereby
consents to the execution and recording of the foregoing Agreement against the
undersigned’s leasehold interest in the real property subject to the Diversified
Lease, and agrees that the Diversified Lease is subject and subordinate to the
Agreement.
     Dated as of                                           , 2007.

              DIVERSIFIED EASTGATE POINTE, LLC     a California limited
liability company
 
       
 
  By:    
 
       
 
  Name:    
 
       
 
  Title:    
 
       

EXHIBIT L-16

 

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RECIPROCAL EASEMENT AND COVENANT AGREEMENT
EXHIBITS

     
Exhibit A
  Driveway Servient Tenement
 
   
Exhibit B
  Parking Servient Tenement
 
   
Exhibit C
  Recreation Facilities Servient Tenement
 
   
Exhibit D
  Temporary Parking Servient Tenement

EXHIBIT L-17

 

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EXHIBIT A
DRIVEWAY SERVIENT TENEMENT
(MAP) [a29658a2965801.gif]
TOWN CENTRE DRIVE
EXHIBIT L-18

 

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EXHIBIT B
PARKING SERVIENT TENEMENT

(MAP) [a29658a2965802.gif]
TOWN CENTRE DRIVE
EXHIBIT L-19

 

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EXHIBIT C
RECREATION FACILITIES SERVIENT TENEMENT
(MAP) [a29658a2965803.gif]
TOWN CENTRE DRIVE
EXHIBIT L-20

 

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EXHIBIT D
TEMPORARY PARKING SERVIENT TENEMENT
(MAP) [a29658a2965804.gif]
TOWN CENTRE DRIVE
EXHIBIT L-21

 

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EXHIBIT M
FORM OF SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
RECORDED AT REQUEST OF
AND WHEN RECORDED RETURN TO:

               
 
             
 
             
 
       
Attention:
       
 
 
 
   

 
SUBORDINATION, NONDISTURBANCE, AND ATTORNMENT AGREEMENT
     This Subordination, Nondisturbance, and Attornment Agreement (“Agreement”)
is made as of                     ,                      between
                     (“Lender”), a                     , having its principal
place of business at                     ,                     ,
                     and Illumina, Inc. (“Tenant”), a Delaware corporation,
having its principal place of business at 9855 through 9885 Towne Centre Drive,
San Diego, California.
Recitals:
     A. Lender has agreed to make a loan to BMR-9865 Towne Center Drive LLC, a
Delaware limited liability company (“Landlord”), to be secured by a deed of
trust, dated                     ,                     , and recorded on
                    ,                     , as Instrument No.          
           , in the Official Records of San Diego County, California (together
with all amendments, increases, renewals, modifications, consolidations,
spreaders, combinations, supplements, replacements, substitutions, and
extensions, either current or future, referred to hereafter as the “Mortgage”)
encumbering Landlord’s ownership interest in real property located in San Diego
County, State of California. The legal description of the encumbered real
property (the “Mortgage Premises”) is set forth in Exhibit A, attached to this
Agreement. The Mortgage, together with the promissory note or notes, the loan
agreement(s), and other documents executed in connection with it are hereafter
collectively referred to as the “Loan Documents”.
     B. On                     ,                     , Tenant and Landlord
entered into that certain Lease for a portion of the Mortgage Premises (the
“Lease”). The Lease creates a leasehold estate in favor of Tenant for space (the
“Leased Premises”) located on the Mortgage Premises.
     C. In connection with execution of the Mortgage, Landlord also executed and
delivered to Lender an [Assignment of Leases, Rents and Profits] dated
                    ,                     , and recorded on
                    ,                     , as Instrument No.
                    , in the Official Records of the County Recorder of San
Diego, California concerning all rents, issues and profits from the Mortgage
Premises. This document, together with all amendments, renewals, modifications
consolidations, replacements, substitutions and extensions, is hereafter
referred to as the “Assignment of Rents.”
     TO CONFIRM their understanding concerning the legal effect of the Mortgage
and the Lease, in consideration of the mutual covenants and agreements contained
in this Agreement and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Lender and Tenant, intending to be legally
bound, agree and covenant as follows:
     1. Representations and Warranties. Tenant warrants and represents that the
Lease is in full force and effect and that, as of the date of this Agreement and
to Tenant’s actual knowledge, there is no default under the Lease by Landlord or
Tenant.
     2. Tenant Subordination.
          2.1 Subject to the provisions of Section 3, the Loan Documents shall
constitute a lien or charge on the Mortgage Premises that is prior and superior
to the Lease, to the leasehold estate created by it, and to all rights and
privileges of Tenant under it; by this
EXHIBIT M-1

 

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Agreement, the Lease, the leasehold estate created by it, together with all
rights and privileges of Tenant under it, is, subject to Section 3,
subordinated, at all times, to the lien or charge of the Loan Documents in favor
of Lender.
          2.2 By executing this Agreement, Tenant, subject to Section 3,
subordinates the Lease and Tenant’s interest under it to the lien right and
security title, and terms of the Loan Documents, and to all advances or payments
made, or to be made, under any Loan Document.
     3. Nondisturbance.
          3.1 Lender consents to the Lease.
          3.2 Despite Tenant’s subordination under Section 2, Tenant’s peaceful
and quiet possession of the Leased Premises shall not be disturbed and Tenant’s
rights and privileges under the Lease, shall not be diminished by Lender’s
exercise of its rights or remedies under the Loan Documents (subject to the
provisions of Section 5), provided that:
               (a) no Default (as defined in the Lease) exists; and
               (b) the Lease has not been canceled or terminated (without regard
to whether Landlord or Tenant is then in default under the Lease).
          3.3 Tenant shall not be named or joined in any foreclosure, trustee’s
sale, or other proceeding to enforce the Loan Documents unless such joinder
shall be legally required to perfect the foreclosure, trustee’s sale, or other
proceeding.
     4. Attornment.
          4.1 If Lender shall succeed to Landlord’s interest in the Mortgage
Premises by foreclosure of the Mortgage, by deed in lieu of foreclosure, or in
any other manner, Tenant shall be bound to Lender (and Lender shall be bound to
Tenant) under all the terms, covenants and conditions of the Lease for the
balance of its term with the same force and effect as if Lender were the
Landlord under the Lease. Tenant shall be deemed to have full and complete
attornment to, and to have established direct privity between Tenant and:
               (a) Lender when in possession of the Mortgage Premises;
               (b) a receiver appointed in any action or proceeding to foreclose
the Mortgage;
               (c) any party acquiring title to the Mortgage Premises; or
               (d) any successor to Landlord.
          4.2 Tenant’s attornment is self-operating, and it shall continue to be
effective without execution of any further instrument by any of the parties to
this Agreement or the Lease. Lender agrees to give Tenant written notice if
Lender has succeeded to the interest of the Landlord under the Lease. Subject to
Section 5, the terms of the Lease are incorporated into this Agreement by
reference.
          4.3 If the interests of Landlord under the Lease are transferred by
foreclosure of the Mortgage, deed in lieu of foreclosure, or otherwise, to a
party other than Lender (“Transferee”), in consideration of, and as condition
precedent to, Tenant’s agreement to attorn to any such Transferee, Transferee
shall be deemed to have assumed all terms, covenants, and conditions of the
Lease to be observed or performed by Landlord from the date on which the
Transferee succeeds to Landlord’s interests under the Lease; provided that the
liability of any Transferee to Tenant under the terms of the Lease shall be
limited in the same manner as Lender’s liability is limited under Section 5.
     5. Lender as Landlord. If Lender shall succeed to the interest of Landlord
under the Lease, Lender shall be bound to Tenant under all the terms, covenants
and conditions of the Lease, and Tenant shall, from the date of Lender’s
succession to the Landlord’s interest under the Lease, have the same remedies
against Lender for breach of the Lease that Tenant would have had under the
Lease against Landlord; provided, however, that despite anything to the
EXHIBIT M-2

 

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contrary in this Agreement or the Lease, Lender, as successor to the Landlord’s
interest, shall not be:
               (a) liable for any act or omission of any previous landlord
(including Landlord), provided that the foregoing shall not be construed to
limit Tenant’s right to possession of the Leased Premises for the entire term of
the Lease, as extended, on the terms and conditions of the Lease;
               (b) subject to any offsets or defenses which Tenant might have
had against any previous landlord (including Landlord) relating to any event or
occurrence before the date of attornment. The foregoing shall not limit either
(a) Tenant’s right to exercise against successor landlord any offset right
otherwise available to Tenant because of events occurring after the date of
attornment, or (b) successor landlord’s obligation to correct any conditions
that existed as of the date of attornment and that violate successor landlord’s
obligations as landlord under the Lease;
               (c) unless actually received by Lender, bound by any rent or
additional rent that Tenant might have paid for more than one month in advance
to any prior landlord (including Landlord), other than, and only to the extent
of, prepayments (if any) expressly required under the Lease; or
               (d) bound by an amendment or modification of the Lease which
would materially adversely affect any right of Landlord under the Lease made
without Lender’s written consent, which consent shall not be unreasonably
withheld, conditioned or delayed, except for any amendment or modification
evidencing Tenant’s exercise of any rights expressly granted to Tenant in the
Lease so long as such amendment or modification reflects the terms and
conditions provided with regards to such rights as reflected in the Lease.
Notwithstanding the foregoing, any modification, amendment or waiver made or
entered into between Landlord and Tenant shall be binding as between Landlord
and Tenant.
     6. Notice of Default; Right To Cure. Tenant agrees to give Lender prompt
written notice of any known default by Landlord under the Lease. Tenant agrees
that, before Tenant exercises any of its rights or remedies under the Lease,
Lender shall have the right, but not the obligation, to cure the default within
the same time given Landlord in the lease to cure the default, plus an
additional thirty (30) days. Tenant agrees that the cure period shall be
extended by the time reasonably necessary for Lender to commence foreclosure
proceedings and to obtain possession of the Mortgage Premises, provided that
this sentence shall not apply if the breach or default by Landlord poses an
immediate threat to the health, safety or welfare of Tenant’s employees,
customers or invitees at the Leased Premises, provided further that:
               (a) Lender shall notify Tenant of Lender’s intent to effect its
remedy within thirty (30) days after receipt of Tenant’s notice;
               (b) Lender initiates immediate steps to foreclose on or to
recover possession of the Mortgage Premises;
               (c) Lender initiates legal proceedings to appoint a receiver for
the Mortgage Premises or to foreclose on or recover possession of the Mortgage
Premises within the thirty (30) day period; and
               (d) Lender prosecutes such proceedings and remedies with due
diligence and continuity to completion.
     Tenant also agrees to its use its commercially reasonable efforts to give
Lender notice of any casualty damage to the Mortgage Premises, but Tenant’s
failure to provide such notice shall not be a default under this Agreement.
     7. Assignment of Rents. If Landlord defaults in its performance of the
terms of the Loan Documents, Tenant agrees to recognize the Assignment of Rents
made by Landlord to Lender and shall pay to Lender, as assignee, from the time
Lender gives Tenant written notice that Landlord is in default under the terms
of the Loan Documents, the rents under the Lease, but only those rents that are
due or that become due under the terms of the Lease after notice by
EXHIBIT M-3

 

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Lender. Payments of rents to Lender by Tenant under the assignment of rents and
Landlord’s default shall continue until the first of the following occurs:
               (a) No further rent is due or payable under the Lease;
               (b) Lender gives Tenant written notice that the Landlord’s
default under the Loan Documents has been cured and instructs Tenant that the
rents shall thereafter be payable to Landlord; or
               (c) The lien of the Mortgage has been foreclosed and the
purchaser at the foreclosure sale (whether Lender or a Transferee) gives Tenant
written notice of the foreclosure sale. On giving written notice, the purchaser
shall succeed to Landlord’s interests under the Lease, after which time the
rents and other benefits due Landlord under the Lease shall be payable to the
purchaser as the owner of the Mortgage Premises.
     8. Tenant’s Reliance. When complying with the provisions of Section 7,
Tenant shall be entitled to rely on the notices given by Lender under Section 7,
and Landlord agrees to release, relieve, protect and indemnify Tenant from and
against any and all loss, claim, damage, or liability (including reasonable
attorney’s fees) arising out of Tenant’s compliance with such notice.
     Tenant shall be entitled to full credit under the Lease for any rents paid
to Lender in accordance with Section 7 to the same extent as if such rents were
paid directly to Landlord. Any dispute between Lender (or Lender’s Transferee)
and Landlord as to the existence of a default by Landlord under the terms of the
Mortgage, the extent or nature of such default, or Lender’s right to foreclosure
of the Mortgage, shall be dealt with and adjusted solely between Lender (or
Transferee) and Landlord, and Tenant shall not be made a party to any such
dispute (unless required by law).
     9. Lender’s Status. Nothing in this Agreement shall be construed to be an
agreement by Lender to perform any covenant of the Landlord under the Lease
unless and until it obtains title to the Mortgage Premises by power of sale,
judicial foreclosure, or deed in lieu of foreclosure, or obtains possession of
the Mortgage Premises under the terms of the Loan Documents.
     10. Cancellation of Lease. Tenant agrees that it will not cancel,
terminate, or surrender the Lease, except at the normal expiration of the Lease
term or as provided in the Lease, or except as otherwise provided in Section 5
above, enter into any agreement, amendment, or modification of the Lease except
any agreement, amendment, or modification contemplated by or provided by the
terms of the Lease unless Lender gives its prior written consent, which shall
not be unreasonably withheld, conditioned or delayed; provided, however, that no
Lender consent shall be required pursuant to a termination permitted under the
Lease.
     11. Special Covenants. Despite anything in this Agreement or the Lease to
the contrary, if Lender acquires title to the Mortgage Premises, Tenant agrees
that: Lender shall have the right at any time in connection with the sale or
other transfer of the Mortgage Premises to assign the Lease or Lender’s rights
under it to any person or entity, and that Lender, its officers, directors,
shareholders, agents, and employees shall be released from any further liability
under the Lease arising after the date of such transfer, provided that the
assignee of Lender’s interest assumes Lender’s obligations under the Lease
(including liability for all obligations accruing prior to the date of the
assignment), in writing, from the date of such transfer.
     12. Transferee’s Liability. If a Transferee acquires title to the Mortgage
Premises:
               (a) Tenant’s recourse against Transferee for default under the
Lease shall be limited to the Mortgage Premises or any sale, insurance, or
condemnation proceeds from the Mortgage Premises;
               (b) Tenant shall look exclusively to Transferee’s interests
described in (a) above for the payment and discharge of any obligations imposed
on Transferee under this Agreement or the Lease ; and
               (c) Transferee, its officers, directors, shareholders, agents,
and employees are released and relieved of any personal liability under the
Lease; and
EXHIBIT M-4

 

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               (d) Tenant shall not collect or attempt to collect any judgment
out of any other assets, or from any general or limited partners or shareholders
of Transferee.
     Notwithstanding the foregoing, Tenant reserves all rights and remedies
available to it in law or in equity against the prior landlord.
     13. Transferee’s Performance Obligations. Subject to the limitations
provided in Sections 11 and 12, if a Transferee acquires title to the Mortgage
Premises, the Transferee shall perform and recognize: all tenant improvement
allowance provisions, all rent-free and rent rebate provisions, and all options
and rights of offer, in addition to Landlord’s other obligations under the
Lease.
     14. Notice. All notices required by this Agreement shall be given in
writing and shall be deemed to have been duly given for all purposes when:
               (a) deposited in the United States mail (by registered or
certified mail, return receipt requested, postage prepaid); or
               (b) deposited with a nationally recognized overnight delivery
service such as Federal Express or Airborne.
     Each notice must be directed to the party to receive it at its address
stated below or at such other address as may be substituted by notice given as
provided in this Section.
     The addresses are:

                   Lender:                                                      
                                  Attention:                
 
         Copy to:                                                              
                          Attention:                
 
   

           Tenant:   Illumina, Inc.     9885 Towne Centre Drive     San Diego,
CA 92121     Attention: Christian Henry            Copy to:   Allen Matkins Leck
Gamble Mallory & Natsis LLP     501 West Broadway, 15th Floor     San Diego, CA
92121     Attention: Martin L. Togni, Esq.

Copies of notices sent to the parties’ attorneys or other parties are courtesy
copies, and failure to provide such copies shall not affect the effectiveness of
a notice given hereunder.
     15. Miscellaneous Provisions.
          15.1 This Agreement may not be modified orally; it may be modified
only by an agreement in writing signed by the parties or their
successors-in-interest. This Agreement shall inure to the benefit of and bind
the parties and their successors and assignees.
          15.2 The captions contained in this Agreement are for convenience only
and in no way limit or alter the terms and conditions of the Agreement.
     15.3 This Agreement has been executed under and shall be construed,
governed, and enforced, in accordance with the laws of the State of California
except to the extent that California law is preempted by the U.S. federal law.
The invalidity or unenforceability of one or more provisions of this Agreement
does not affect the validity or enforceability of any other provisions.
EXHIBIT M-5

 

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          15.4 This Agreement has been executed in duplicate. Lender and Tenant
agree that one (1) copy of the Agreement will be recorded.
          15.5 This Agreement shall be the entire and only agreement concerning
subordination of the Lease and the leasehold estate created by it, together with
all rights and privileges of Tenant under it, to the lien or charge of the Loan
Documents and shall supersede and cancel, to the extent that it would affect
priority between the Lease and the Loan Documents, any previous subordination
agreements, including provisions, if any, contained in the Lease that provide
for the subordination of the Lease and the leasehold estate created by it to a
deed of trust or mortgage.
          15.6 This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which copies, taken together, shall constitute but one and the same
instrument. Signature and acknowledgment pages may be detached from the copies
and attached to a single copy of this Agreement to physically form one original
document, which may be recorded without an attached copy of the Lease.
          15.7 If any legal action or proceeding is commenced to interpret or
enforce the terms of this Agreement or obligations arising out of it, or to
recover damages for the breach of the Agreement, the party prevailing in such
action or proceeding shall be entitled to recover from the non-prevailing party
or parties all reasonable attorneys’ fees, costs, and expenses it has incurred.
          15.8 Unless the context clearly requires otherwise, (a) the plural and
singular numbers will each be deemed to include the other; (b) the masculine,
feminine, and neuter genders will each be deemed to include the others; (c)
“shall,” “will,” “must,” “agrees,” and “covenants” are each mandatory; (d) “may”
is permissive; (e) “or” is not exclusive; and (f) “includes” and “including” are
not limiting.
(Signature Page Follows)
EXHIBIT M-6

 

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Executed on the date first above written.

                              LENDER:            
 
                       
 
  [       ],            
 
 
 
               
 
  a [       ]            
 
 
 
               
 
                       
 
  By;                              
 
  Name:                              
 
  Title:                              

                  TENANT:
 
                ILLUMINA, INC.,
a Delaware corporation
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           

                          Accepted and Agreed To:        
 
                        BMR-9865 TOWNE CENTRE DRIVE LLC,
a Delaware limited liability company        
 
                        By:   BIOMED REALTY, L.P.,
a Maryland limited partnership
its Member
 
                   
 
      By:            
 
                   
 
      Name:            
 
                   
 
      Title:            
 
                   

EXHIBIT M-7

 

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ACKNOWLEDGMENTS
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
     On                                         before me,
                                   , a Notary Public, personally appeared
                                        , personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s) whose name is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacit(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
     WITNESS my hand and official seal.

     
 
   
 
  Signature of Notary Public

(This area for official notarial seal)
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
     On                                          before me,
                                      , a Notary Public, personally appeared
                                        , personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s) whose name is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacit(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
     WITNESS my hand and official seal.

     
 
   
 
  Signature of Notary Public

(This area for official notarial seal)
EXHIBIT M-8

 

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STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
     On                                          before me,               
               , a Notary Public, personally appeared
                                        , personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s) whose name is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacit(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
     WITNESS my hand and official seal.

     
 
   
 
  Signature of Notary Public

(This area for official notarial seal)
EXHIBIT M-9

 

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EXHIBIT A
LEGAL DESCRIPTION
(See Attached)
EXHIBIT M-10

 

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SCHEDULE 1
DIVERSIFIED BUILDING PREMISES: RENT SCHEDULE

                                                Expiration   Square   Annual    
              Monthly StartDate   Date   feet   $/SF   Annual Rent   Monthly
Rent   $/SF  
Execution
  8/17/2007     4,400     $ 37.12     $ 163,346.99     $ 13,612.25     $ 3.09  
8/18/2007
  8/17/2008     4,400     $ 38.24     $ 168,247.40     $ 14,020.62     $ 3.19  
8/18/2008
  8/17/2009     4,400     $ 39.39     $ 173,294.82     $ 14,441.23     $ 3.28  
8/18/2009
  8/17/2010     4,400     $ 40.57     $ 178,493.66     $ 14,874.47     $ 3.38  
8/18/2010
  8/17/2011     4,400     $ 41.78     $ 183,848.47     $ 15,320.71     $ 3.48  
8/18/2011
  8/17/2012     4,400     $ 43.04     $ 189,363.93     $ 15,780.33     $ 3.59  
8/18/2012
  8/17/2013     4,400     $ 44.33     $ 195,044.84     $ 16,253.74     $ 3.69  
8/18/2013
  8/17/2014     4,400     $ 45.66     $ 200,896.19     $ 16,741.35     $ 3.80  
8/18/2014
  8/17/2015     4,400     $ 45.60     $ 200,640.00     $ 16,720.00     $ 3.80  
8/18/2015
  8/17/2016     4,400     $ 45.60     $ 200,640.00     $ 16,720.00     $ 3.80  
8/18/2016
  8/17/2017     4,400     $ 47.88     $ 210,672.00     $ 17,556.00     $ 3.99  
8/18/2017
  8/17/2018     4,400     $ 47.88     $ 210,672.00     $ 17,556.00     $ 3.99  
8/18/2018
  8/17/2019     4,400     $ 50.27     $ 221,205.60     $ 18,433.80     $ 4.19  
8/18/2019
  8/17/2020     4,400     $ 50.27     $ 221,205.60     $ 18,433.80     $ 4.19  
8/18/2020
  8/17/2021     4,400     $ 52.79     $ 232,265.88     $ 19,355.49     $ 4.40  
8/18/2021
  8/17/2022     4,400     $ 52.79     $ 232,265.88     $ 19,355.49     $ 4.40  
8/18/2022
  8/17/2023     4,400     $ 55.43     $ 243,879.17     $ 20,323.26     $ 4.62  
8/18/2023
  Initial
Expiration Date     4,400     $ 55.43     $ 243,879.17     $ 20,323.26     $
4.62  

SCHEDULE 1-1

 

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TABLE OF CONTENTS

             
1.
  Lease of Premises     2  
 
           
2.
  Basic Lease Provisions     2  
 
           
3.
  Term     4  
 
           
4.
  Landlord’s Construction Work and Tenant Improvements     4  
 
           
5.
  Possession and Commencement Date     7  
 
           
6.
  Rent     9  
 
           
7.
  Rent Adjustments     10  
 
           
8.
  Taxes     10  
 
           
9.
  [Intentionally Omitted]     12  
 
           
10.
  Security Deposit     12  
 
           
11.
  Use     14  
 
           
12.
  Diversified Lease and Subdivision     15  
 
           
13.
  Brokers     16  
 
           
14.
  Holding Over     16  
 
           
15.
  Property Management Fee     17  
 
           
16.
  Condition of Premises     17  
 
           
17.
  Regulations and Parking and Recreation Facilities     17  
 
           
18.
  Utilities and Services     18  
 
           
19.
  Alterations     20  
 
           
20.
  Repairs and Maintenance     22  
 
           
21.
  Liens     24  
 
           
22.
  Indemnification and Exculpation     25  
 
           
23.
  Insurance; Waiver of Subrogation     26  
 
           
24.
  Damage or Destruction     27  
 
           
25.
  Eminent Domain     29  
 
           
26.
  Defaults and Remedies     29  
 
           
27.
  Assignment or Subletting     33  
 
           
28.
  Attorneys’ Fees     35  
 
           
29.
  [Intentionally Omitted]     35  
 
           
30.
  Definition of Landlord     35  
 
           
31.
  Estoppel Certificate     36  
 
           
32.
  Joint and Several Obligations     36  

 

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33.
  Limitation of Landlord’s Liability     36  
 
           
34.
  Premises Control by Landlord     37  
 
           
35.
  Quiet Enjoyment     37  
 
           
36.
  Subordination and Attornment     38  
 
           
37.
  Surrender     39  
 
           
38.
  Waiver and Modification     39  
 
           
39.
  Waiver of Jury Trial and Counterclaims     39  
 
           
40.
  Hazardous Materials     39  
 
           
41.
  Miscellaneous     41  
 
           
42.
  Option to Extend Term     42  
 
           
43.
  Tenant’s Authority     44  
 
           
44.
  Landlord’s Authority     44  
 
           
45.
  Confidentiality     44  
 
           
46.
  Excavation     44  
 
           
47.
  Telecommunications Equipment     44  
 
           
48.
  Access to Premises     44  
 
           
49.
  Secured Areas     45