AMENDED AND RESTATED SECOND AMENDMENT TO LEASE
THIS AMENDED AND RESTATED SECOND AMENDMENT TO LEASE AMENDS, RESTATES AND
SUPERSEDES IN ITS ENTIRETY THAT CERTAIN SECOND AMENDMENT TO LEASE DATED AUGUST
12, 2014, BY AND BETWEEN TENANT (AS DEFINED BELOW) AND LANDLORD (AS DEFINED
BELOW).
THIS AMENDED AND RESTATED SECOND AMENDMENT TO LEASE (this “Second Amendment”) is
made as of March 12, 2015, by and between ARE-SD REGION NO. 32, LLC, a Delaware
limited liability company (“Landlord”), and ILLUMINA, INC., a Delaware
corporation (“Tenant”).
RECITALS
A.    Landlord and Tenant are now parties to that certain Amended and Restated
Lease Agreement dated as of March 27, 2012, as amended by that certain First
Amendment to Lease dated as of May 23, 2013 (as amended, the “Lease”). Pursuant
to the Lease, Tenant leases certain premises consisting of approximately 497,078
rentable square feet (“Original Premises”) located at 5200 Illumina Way, San
Diego, California (“Project”). The Original Premises are more particularly
described in the Lease. Capitalized terms used herein without definition shall
have the meanings defined for such terms in the Lease.
B.     Landlord and Tenant desire, subject to the terms and conditions set forth
below, to amend the Lease to, among other things, expand the size of the
Original Premises by adding approximately 295,609 rentable square feet of space
to be located in a to be constructed building at the Project, as shown as
Building 6 on Exhibit A.
NOW, THEREFORE, in consideration of the foregoing Recitals, which are
incorporated herein by this reference, the mutual promises and conditions
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree
as follows:
1.
Building 6. In addition to the Original Premises, commencing on the Building 6
Commencement Date (as defined below), Landlord leases to Tenant, and Tenant
leases from Landlord, that certain to be constructed building to be located at
the Project shown on Exhibit A attached to this Second Amendment, containing
approximately 295,609 rentable square feet of space (the “Building 6”).

2.
Delivery. Landlord shall be responsible for Landlord’s Work (as defined in the
Building 6 Work Letter attached to this Second Amendment as Exhibit B).

Landlord shall deliver Building 6 to Tenant for the commencement of the
construction of the Building 6 Tenant Improvements (as defined in the Building 6
Work Letter) on the Building Shell Delivery Date (“Delivery” or “Deliver”) which
Landlord shall use reasonable efforts to cause to occur on or before December
18, 2015 (“Target Building 6 Delivery Date”). The “Building Shell Delivery Date”
shall be the date that (a) Tenant is notified accurately by Landlord or the
general contractor for Building 6 that construction of the Building Shell (as
defined in the Building 6 Work Letter) is at a point where Building 6 has a
substantially waterproof roof in place (but such roof shall not be watertight at
that time), and (b) Landlord and Tenant reasonably determine that Building 6 is
in a condition reasonably acceptable for the commencement and continuing
construction of the Building 6 Tenant Improvements, subject to reasonable
coordination between Landlord and Tenant taking into account Landlord’s
continued construction of the Building Shell during Tenant’s construction of the
Tenant Improvements. If Landlord fails to timely Deliver Building 6, Landlord
shall not be liable to Tenant for any loss or damage resulting therefrom except
as expressly provided for below, and the Lease, as amended herein, shall not be
void or voidable. If Landlord does not Deliver Building 6 within 120 days of the
Target Building 6 Delivery Date (“Abatement Trigger Date”) for any reason other
than Force Majeure and Tenant Delays (as defined below), then Tenant shall
receive (i) a 1 day abatement of Base Rent otherwise payable by Tenant for
Building 6 for every 1 full day after the Abatement Trigger Date that the
Building Shell Delivery Date does not occur through the date that is 60 days
after the Abatement Trigger Date, and (ii) a 2 day abatement of Base Rent
otherwise payable by Tenant for Building 6 for every 1 full day after the date
that is 60 days after the Abatement Trigger Date that the Building Shell
Delivery Date does not occur. As used herein, the term “Tenant Delay” shall
mean: (i) any delay caused by Tenant in connection with the design, permitting
or construction of the Building Shell that actually causes a delay of the
Building Shell Delivery Date beyond the date that Delivery would have otherwise
occurred but for such delay; (ii) any interference by Tenant with Landlord’s
construction of the Building Shell including, without limitation, in each case,
(A) delays arising from changes requested by Tenant to the specifications for
the Building Shell set forth in Schedule 1 to the Building 6 Work Letter (“Base
Shell Changes”), (B) Tenant’s failure to provide Landlord with any information
required from

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

Tenant for the normal progression of Landlord’s design, permitting and
construction of the Building Shell in accordance with the detailed schedule of
key milestones attached to this Second Amendment as Exhibit F and so as not to
delay Landlord’s substantial completion of Building 6, and/or (C) Tenant’s
failure to reasonably coordinate Tenant’s construction of the Building 6 Tenant
Improvements with Landlord. Notwithstanding anything to the contrary contained
herein, Tenant shall be solely responsible for all costs incurred by Landlord in
connection with any Base Shell Changes; provided, however, nothing contained
herein shall obligate Landlord to agree to make any such requested changes.
Landlord hereby agrees to permit Tenant early access, at Tenant’s sole risk and
expense, to Building 6 33 days prior to the Building Shell Delivery Date (“Early
Access Date”) to commence performing the Building 6 Tenant Improvements,
provided that (i) Tenant’s access and work is coordinated with Landlord’s
architect and general contractor and complies with the Lease and all other
reasonable restrictions and conditions Landlord may impose, and (ii) all such
access and work by Tenant shall be during normal business hours or otherwise at
such other times as are reasonably designated by Landlord. Notwithstanding the
foregoing, any such entry and work by Tenant and any Tenant Party shall comply
with all established safety practices of Landlord’s contractor, and Tenant and
any Tenant Party shall not unreasonably interfere with the performance of
Landlord’s Work. Landlord shall have the right to exclude Tenant and any Tenant
Party from Building 6 if such interference is not resolved by Tenant in a manner
reasonably acceptable to Landlord within 1 day after Landlord’s written notice
to Tenant. Landlord agrees to use reasonable efforts to cooperate with Tenant in
Tenant’s performance of Tenant’s Work; provided, however, that in no event shall
Landlord have any obligation to incur any additional or overtime costs in
connection with such cooperation with Tenant.
The “Building 6 Commencement Date” shall be the date of Delivery. The “Building
6 Rent Commencement Date” shall be October 15, 2016, regardless of whether or
not Tenant has completed the Building 6 Tenant Improvements; provided, however,
that such date shall be deemed extended by one (1) day for each day of delay in
achieving Substantial Completion of the Building 6 Tenant Improvements due to
(i) Force Majeure delays, or (ii) delays caused by Landlord’s breach of its
obligations under this Second Amendment which actually cause a delay of Tenant’s
Work, provided that no such delay shall be deemed to have commenced unless
Tenant has provided Landlord with written notice of such delay. Such October 15,
2016 date shall also be deemed extended one (1) day for each day beyond the
Target Building 6 Delivery Date that Landlord fails, for any reason other than
Tenant Delays, to deliver the Building Shell to Tenant in the condition required
pursuant to the second sentence of the second paragraph of this Section 2. Upon
the request of Landlord, Tenant shall execute and deliver a factually correct
written acknowledgment of the Early Access Date, the Building Shell Delivery
Date, the Building 6 Commencement Date and the Building 6 Rent Commencement Date
in substantially the form of the “Acknowledgement of Commencement Date” attached
to the Lease as Exhibit D; provided, however, Tenant’s failure to execute and
deliver such acknowledgment shall not affect Landlord’s or Tenant’s rights
hereunder.
Tenant acknowledges that Landlord shall require access to Building 6 following
the Building Shell Delivery Date in order to complete the construction of the
Building Shell. Landlord and its contractors and agents shall have the right to
enter Building 6 following the Building Shell Delivery Date to complete the
Building Shell. Tenant agrees to coordinate such entry with Landlord but Tenant
acknowledges that Landlord’s completion of the Building Shell may adversely
affect Tenant’s construction of the Building 6 Tenant Improvements (as defined
in the Building 6 Work Letter). Landlord shall reasonably cooperate with Tenant
in order to minimize such adverse effects.
Except as set forth in the Building 6 Work Letter: (i) Tenant shall accept
Building 6 in its condition as of the Building Shell Delivery Date; (ii) except
as otherwise provided in the Building 6 Work Letter, Landlord shall have no
obligation for any defects in Building 6. Any occupancy of Building 6 by Tenant
before the Building 6 Commencement Date shall be subject to all of the terms and
conditions of the Lease, excluding the obligation to pay Base Rent.
Tenant agrees and acknowledges that neither Landlord nor any agent of Landlord
has made any representation or warranty with respect to the suitability of
Building 6 for the conduct of Tenant’s business, and Tenant waives any implied
warranty that Building 6 is suitable for the Permitted Use.
3.
Definition of Premises. Commencing on the Building 6 Commencement Date, the
defined term “Premises” on page 1 of the Lease shall be deleted in its entirety
and replaced with the following:

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

“Premises: That certain portion of the Project consisting of (i) a building
containing approximately 171,340 rentable square feet (“Building 1”), (ii) a
building containing approximately 159,272 rentable square feet (“Building 2”),
(iii) a central plant building containing approximately 15,969 rentable square
feet (referred to herein as the “Central Plant Building” or “Building 3”), (iv)
that certain office/laboratory building containing approximately 127,373
rentable square feet (“Building 4”), (v) that certain tenant activity center
building containing approximately 23,124 rentable square feet (referred to
herein as the “Activity Center” or “Building 5”), and (vi) that certain building
containing approximately 295,609 rentable square feet (“Building 6”). Building
1, Building 2, Building 3, Building 4, Building 5, Building 6 and the Central
Plant are all as shown on Exhibit A. Building 1, Building 2, Building 3,
Building 4, Building 5 and Building 6 are collectively referred to herein as the
“Buildings”.”
As of the Building 6 Commencement Date, Exhibit A to the Lease shall be amended
to include Building 6 as shown on Exhibit A attached to this Second Amendment.
4.
Rentable Area of Premises and Project. Commencing on the Building 6 Commencement
Date, the defined terms “Rentable Area of Premises” and “Rentable Area of
Project” on page 1 of the Lease shall be deleted in their entirety and replaced
with the following:

“Rentable Area of Premises: 792,687 rentable square feet”
“Rentable Area of Project: 792,687 rentable square feet”
5.
Base Rent.

a.Original Premises. Tenant shall continue to pay Base Rent for the Original
Premises as provided for in the Lease through the expiration date of the Lease.
b.Building 6. Commencing on the Building 6 Rent Commencement Date, Tenant shall
pay Base Rent for Building 6 in the amount of $1.38 per rentable square foot of
Building 6 per month. Base Rent payable for Building 6 shall be increased on
every other anniversary of the Building 6 Rent Commencement Date (each a
“Building 6 Adjustment Date”) by multiplying the Base Rent payable with respect
Building 6 immediately before such Building 6 Adjustment Date by the Bi-Annual
Rent Adjustment Percentage and adding the resulting amount to the Base Rent
payable with respect to Building 6 immediately before such Building 6 Adjustment
Date.
6.
Tenant’s Share of Operating Expenses. Tenant shall be required to pay all
Operating Expenses with respect to Building 6 and Tenant’s Share of Operating
Expenses shall continue to be 100%. Attached hereto as Exhibit G is an estimate
of the Operating Expenses for Building 6. Tenant acknowledges and agrees that
Building 6 has not been constructed and has no operating history and, as such,
Exhibit G is merely an estimate and Tenant waives any claims that Tenant may
have against Landlord (and Landlord shall have no liability) for such estimate
not being correct, including, without limitation, as a result of any incorrect
assumptions, errors, inaccuracies and/or omissions. For the avoidance of any
doubt, nothing contained in this Second Amendment is intending to limit or
reduce the Operating Expenses which Tenant is required to pay for the Project
(including, without limitation, Building 6) prior to the Building 6 Commencement
Date.

7.
Re-Measurement.

a.Original Premises. Landlord and Tenant agree that the rentable square footage
of the Original Premises set forth in the Lease (and this Second Amendment) is
conclusively deemed to be the rentable square footage of the Original Premises
and, notwithstanding anything to the contrary contained in the Lease, the
rentable square footage of the Original Premises shall not be subject to
re-measurement.
b.Building 6. Landlord and Tenant agree that the rentable square footage of
Building 6 is conclusively deemed to be 295,609 rentable square feet and,
notwithstanding anything to the contrary contained in the Lease or this Second
Amendment, the rentable square footage of Building 6 shall not be subject to
re-measurement.
8.
Parking.

a.Section 10 of the Lease is hereby deleted in its entirety and replaced with
the following:
“10.    Parking. Subject to all matters of record, Force Majeure, a Taking (as
defined in Section 19 below), the PID Permit and the exercise by Landlord of its
rights hereunder, Tenant shall have the right to use all of the parking spaces
at the Project for the first 36 months after the Initial Commencement Date.
Tenant’s right to use all of the parking spaces at the Project shall be extended
for so long as all of Tenant’s Expansion Rights (as defined in Section 39)
continue in full force and effect. All of Tenant’s parking rights under this
Lease shall, during the Base Term, be at no additional cost to Tenant, except as
provided for herein. Notwithstanding anything to the contrary contained herein,
Landlord and Tenant acknowledge and agree that all parking at the Project
(including, without limitation, the number of parking spaces available in the
Parking

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

Structure(s) (as defined below) and in the balance of the Project) shall be
required at all times to satisfy all Legal Requirements for the Project.
Notwithstanding anything to the contrary contained in this Lease, Tenant may
only elect to exercise any of its Extension Rights under Section 40 with respect
to less than all of the Buildings, if, as of the commencement date of the
applicable Extension Term, (i) there are at least 3 parking spaces per 1,000
rentable square feet available for each Building with respect to which Tenant
does not extend the Term of the Lease and those parking spaces are in close
proximity to the applicable Building, and (ii) there are sufficient parking
spaces available for each Building with respect to which Tenant has elected to
extend the Term of the Lease to comply with applicable Legal Requirements (but
in no event no less than 2.5 parking spaces per 1,000 rentable square feet).
Tenant agrees to indemnify, defend, save and hold Landlord harmless from and
against any and all Claims (including, without limitation, from any Governmental
Authority) at any time(s) (including, without limitation, during the
construction of any Building(s) and/or Parking Structure(s)) in connection with
there not being sufficient parking spaces at the Project as may be required by
applicable Legal Requirements.
If Tenant’s Expansion Rights expire and/or Landlord commences constructing any
new buildings at the Project (“New Construction”), Tenant shall, subject to the
provisions of this Section 10, have the right, in common with other tenants of
the Project pro rata in accordance with the rentable area of the Premises and
the rentable areas of the Project occupied by such other tenants, to park in
those areas designated for non-reserved parking, subject in each case to
Landlord’s commercially reasonable rules and regulations; provided, however,
that Landlord may reduce the allocation to Tenant to less than Tenant’s pro rata
share if Tenant’s pro rata share would result in any Building(s) at the Project
not being leased in their entirety by Tenant having less than 3 parking space
per 1,000 rentable square feet. Landlord may allocate parking spaces among
Tenant and other tenants in the Project as described above if Landlord
determines that parking facilities are becoming crowded. If Landlord commences
New Construction, Tenant may elect to mark as reserved or separate and secure
its parking from the balance of the Project, in which case, Landlord shall
reasonably cooperate with Tenant to effectuate, if possible and at Tenant’s sole
cost and expense, such a separation of Tenant’s parking in a manner reasonably
acceptable to Landlord and Tenant. Landlord shall not be responsible for
enforcing Tenant’s parking rights against any third parties, including other
tenants of the Project.”
b.Notwithstanding anything to the contrary contained in Section 10 of the Lease,
the number of parking spaces allocated to Tenant for Building 6 (and/or any
other Expansion Buildings) shall be reduced by the number of parking spaces
which Landlord reasonably determines cannot be constructed or used as a result
of any generator(s), not to exceed 2 generators, and/or any HVAC
pad(s)/enclosure(s) constructed in connection with the Tenant’s use of Building
6 (and/or any other Expansion Buildings). Tenant acknowledges and agrees that
the location and screening (and related landscaping with respect to) any such
generator(s) and/or HVAC pad(s)/enclosure(s) shall be subject to Landlord’s
prior written approval (not to be unreasonably withheld, conditioned or delayed)
and Tenant shall be responsible for bearing all costs in connection foregoing;
provided, however, that Tenant may use the Building 6 TI Allowance to pay for
the same in connection with Building 6.
c.All costs and expenses related to any off-site parking, shuttles and/or any
other measures required to satisfy parking requirements at the Project
(including, without limitation all Legal Requirements with respect to the number
of required parking spaces) during the construction of Building 6 or any other
improvements at the Project shall be borne by Tenant and shall be the sole
responsibility of Tenant.
Upon completion of the P1 Parking Structure, Tenant shall have the exclusive
right to use the entire P1 Parking Structure during any period when Tenant is
leasing both Building 4 and Building 6 in their entirety. Tenant shall, at any
and all times during the Base Term and, if applicable, any Extension Term(s)
where Tenant is leasing both Building 4 and Building 6 in their entirety, be
responsible for all of the Operating Expenses and any other costs actually
incurred by Landlord or Tenant in connection with the P1 Parking Structure
(including, without limitation, any all Taxes). If, at any time during the Base
Term and, if applicable, any Extension Term(s), Tenant only leases one of such
Buildings or only a portion of either such Building, Tenant shall (i) only be
entitled to such applicable Building’s pro rata share of the spaces in the P1
Parking Structure (with pro rata share being calculated based on rentable square
footage of both Buildings), and Landlord may designate which other Building(s)
or tenants may utilize the balance of the P1 Parking Structure, and (ii) only be
responsible for the applicable Building’s pro rata share of the Operating
Expenses in connection with the P1 Parking Structure.
9.
Permitted Use. In addition to the Permitted Use (as provided for on the first
page of the Lease), Tenant shall be entitled to use Building 6 for manufacturing
purposes in compliance with applicable Legal Requirements.

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

Notwithstanding anything to the contrary contained in the Lease or that certain
letter agreement between Landlord and Tenant dated May 10, 2013 (“Letter
Agreement”), Tenant shall be entitled to use Building 5 and the amphitheater
adjacent to Building 5, subject to the terms and conditions of the Lease and the
Letter Agreement, for lectures, concerts, plays, fundraising activities and/or
similar events conducted by or for certain businesses, non-profit entities
and/or individuals, whether or not they are engaged in the health and life
sciences industry.
10.
Alterations. Section 12 of the Lease is hereby amended as follows:

a.The language in clause (vi) in the second sentence of the first paragraph of
Section 12 which reads as follows “(vi) do not involve a use of the Premises
that is inconsistent with the current use of the Premises, without Landlord’s
prior approval if the cost of any such Alteration (excluding carpeting and
painting) does not exceed $100,000 and the aggregate cost of all such
Alterations (excluding carpeting and painting) in any 12 month period does not
exceed $300,000” is hereby deleted in its entirety and replaced with the
following:
“(vi) do not involve a use of the Premises that is inconsistent with the current
use of the Premises, without Landlord’s prior approval, and if the cost of any
such Alteration (excluding carpeting and painting) does not exceed $400,000 per
occurrence and the aggregate cost of all such Alterations (excluding carpeting
and painting) in any 12 month period does not exceed $2,000,000.”
b.Notwithstanding anything to the contrary contained in the third to last
sentence of the second paragraph of Section 12 of the Lease, in no event shall
Tenant be required to pay to Landlord any plan review, coordination, scheduling
or supervision fee in connection with any Notice-Only Alterations.
11.
Extension Right. For the avoidance of doubt, the Extension Rights granted to
Tenant pursuant to Section 40(a) of the Lease shall apply to Building 6.
Notwithstanding anything to the contrary contained in Section 40(a), if Tenant
elects to exercise any Extension Right(s) for Building 6 pursuant to Section
40(a), upon the commencement of the applicable Extension Term, Base Rent for
Building 6 shall be payable at the Building 6 Market Rate (as defined below).
Base Rent for Building 6 shall thereafter be adjusted on each anniversary of the
commencement date of such Extension Term by a percentage as determined by
Landlord and agreed to by Tenant at the time the Building 6 Market Rate is
determined (or as part of the determination of Building 6 Market Rate as
provided in Section 40(b) if the parties are unable to agree on the Building 6
Market Rate). As used herein, “Building 6 Market Rate” shall mean the rate that
comparable landlords of comparable buildings have accepted in current
transactions from non-equity (i.e., not being offered equity in the buildings),
nonrenewal, non-expansion and nonaffiliated tenants of similar financial
strength for space of comparable size, quality (based on the Building Shell and
the depreciated amount of the Building 6 Tenant Improvements paid for with the
Building 6 TI Allowance (assuming a 38-year amortization schedule) and the land
value for Building 6 agreed upon by the parties (for the avoidance of doubt, the
“land value” for Building 6 shall mean that portion of the Project allocated to
or required for Building 6 along with the parking required pursuant to
applicable Legal Requirements in connection with Building 6 (which may include
the land upon which the P1 Parking Structure is located) and not any excess
land), parking spaces allocated to Building 6 and floor height in first class
office/research and development buildings (with a manufacturing component, if
applicable), as applicable, in the University Towne Center area of San Diego for
a comparable term, with the determination of the Building 6 Market Rate to take
into account all relevant factors, including tenant inducements, leasing
commissions, allowances or concessions, if any. If the allowances, free rent
and/or other economic concessions granted with respect to Building 6 pursuant to
this Section 11 differ from those granted in the comparable transactions, an
adjustment to the applicable Building 6 Market Rate shall be made on a basis
consistent with the adjustments commonly made in the market for comparable
differences in concession packages. For the avoidance of doubt, in no event
shall the Building 6 Market Rate include the cost of any tenant improvements or
other alterations to Building 6 paid for solely by Tenant.

12.
Early Termination Right. For the avoidance of doubt, if Tenant elects to
exercise its Termination Right pursuant to Section 42 of the Lease, the lease
with respect to Building 6 shall also terminate on the Termination Date and the
Early Termination Payment payable by Tenant shall also include (i) an amount
equal to 6 months of Rent with respect to Building 6 at the amount payable with
respect to Building 6 by Tenant as of the date that Tenant delivers the
Termination Notice to Landlord, and (ii) an amount equal to, as calculated by
Landlord and provided to Tenant within 10 business days after Tenant delivers a
written request therefor to Landlord, (1) the unamortized Building 6 TI
Allowance, and (2) all of the unamortized third party leasing commissions paid
by Landlord in connection with Tenant’s lease of Building 6, which amounts in
this clause 12(ii) shall be subject to verification by Tenant.

13.
Right to Expand. Section 39 of the Lease is hereby deleted in its entirety and
replaced with the following:

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

“39.    Right to Expand.
(a)Expansion in the Project. Subject to the provisions of this Section 39,
Tenant shall have the right, but not the obligation, on or before December 31,
2022 (“Expansion Right Expiration Date”) to expand the Premises (the “Expansion
Rights”) to include up to 3 to be constructed buildings (and any related
subterranean and other parking) at the Project as shown on the Master Site Plan
(as defined below) (“Building 7”, “Building 8” and “Building 9”, as and if
applicable), all upon the terms and conditions in this Section 39; provided,
however, that all of the Expansion Requirements (as defined below) are met each
time Tenant exercises an Expansion Right. Building 7, Building 8 and Building 9
shall each be individually referred to herein as an “Expansion Building” and
collectively as the “Expansion Buildings”. Landlord shall endeavor to cause the
Expansion Building(s) to be constructed in the locations shown on the Master
Site Plan, and Exhibit H to the Lease shall no longer apply.
Landlord is processing a Community Plan Amendment (“CPA”) and PID Permit
Amendment with the City of San Diego (“City”) to increase the development
intensity for the Project site (as measured by gross floor area or authorized
“average daily vehicle trips” (“ADT”)) necessary to allow for the development of
the Expansion Buildings (collectively, “Additional Entitlements”). Landlord
shall have no obligation to continue to attempt to process the Additional
Entitlements after August 15, 2016, nor shall Landlord be required to incur
costs and expenses in excess of $1,265,000 in connection with processing the
Additional Entitlements. Following the earlier to occur of the City’s approval
of the Additional Entitlements (and all applicable periods for filing a legal
challenge to the Additional Entitlements have expired) and August 15, 2016,
Landlord shall cause a site plan to be developed in accordance with Landlord’s
requirements but after consultation with Tenant (“Master Site Plan”), which
shall be reflective of the Additional Entitlements approved by the City together
with any existing remaining entitlements at the Project. The Master Site Plan
shall include, without limitation, the size, rentable square footage and
location of the Expansion Building(s) and related parking. Notwithstanding the
foregoing, Landlord and Tenant shall mutually agree prior to completion of the
Master Site Plan and specify on the Master Site Plan the order in which Tenant
may exercise its Expansion Rights with respect to the Expansion Building(s) by
identifying the Expansion Buildings as Building 7, Building 8 and Building 9, as
applicable, and Tenant shall not have the right to elect to exercise an
Expansion Right for a later numbered Expansion Building if Tenant has not
previously or concurrently therewith exercised an Expansion Right with respect
to the immediately preceding Expansion Building number. Landlord and Tenant
acknowledge and agree that, notwithstanding the foregoing, the Master Site Plan
may provide for one or two Expansion Buildings utilizing all of the Buildable
Entitlements (as defined below) rather than three Expansion Buildings
contemplated above; provided, however, in no event shall any Expansion Building
on the Master Site Plan contain less than 100,000 rentable square feet of
laboratory and/or office space. Landlord and Tenant acknowledge and agree that
the Master Site Plan may be subject to changes requested or required by the City
of San Diego. Notwithstanding anything to the contrary contained in this Lease,
Tenant acknowledges that Additional Entitlements have not been approved by the
City and, in the event the City does not approve the Additional Entitlements on
terms and conditions acceptable to Landlord in its sole and absolute (but good
faith) discretion, Landlord shall have the right at any time, in Landlord’s sole
and absolute (but good faith) discretion but after consultation with Tenant, to
amend the Expansion Rights (including the number of Expansion Buildings) to
which Tenant is entitled under this Lease in a manner reasonably acceptable to
Landlord and reflective of the actual entitlements and development intensity
approved by the City. Landlord agrees that, while Tenant’s Expansion Rights
remain in effect, Landlord shall not transfer any development intensity
associated with the Additional Entitlements approved by the City to any other
sites or projects. Landlord is seeking Additional Entitlements that will yield
up to 459,245 additional rentable square feet. Notwithstanding anything to the
contrary contained herein, if Tenant’s Expansion Rights are no longer in effect
(e.g. because Tenant does not pay Land Rent other than as a result of Tenant
having made the One Time Land Rent Payment (as defined below) to Landlord),
Landlord may at any time(s) freely transfer any development intensity associated
with the Additional Entitlements to and other sites or projects. Notwithstanding
the foregoing, Landlord may freely transfer any development intensity associated
with the Additional Entitlements in excess of those required to develop 459,245
rentable square feet of Expansion Building(s) to any other sites or projects.
Upon Tenant’s written request from time to time during the Term, Landlord shall
provide to Tenant updated information regarding the status of the Additional
Entitlements, including, but not limited to, material correspondence between
Landlord and any governmental authority regarding such entitlements.
Landlord shall, on or before May 8, 2015, provide Tenant with an accounting of
any costs and expenses incurred by Landlord in connection with processing the
Additional Entitlements and a budget for estimated future costs and expenses.
Thereafter, Landlord shall within a reasonable period, after written request
from

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

Tenant each month, provide Tenant with an accounting of the costs and expenses
incurred by Landlord in the preceding month in connection with processing the
Additional Entitlements.
Notwithstanding anything to the contrary contained in the Lease, Tenant shall
have the right to notify Landlord in writing (“Waiver Notice”) at any time prior
to August 16, 2016, that Tenant has no interest in Landlord processing the
Additional Entitlement for Tenant’s benefit, in which case (i) Tenant shall be
required to promptly reimburse Landlord for all of the third party costs and
expenses incurred by Landlord in connection with Landlord processing the
Additional Entitlements up to the date that is 30 days after Landlord’s receipt
of Tenant’s Waiver Notice up to $1,265,000 (unless Tenant previously approved in
writing costs and expenses in excess of such amount, in which case Tenant shall
be required to also reimburse Landlord for such excess costs and expenses
approved by Tenant), (ii) Tenant shall not be responsible for paying any
additional costs thereafter incurred by Landlord in connection with processing
the Additional Entitlements, (iii) Landlord may, at Landlord’s sole cost and
expense and in its sole and absolute discretion, elect to continue to process
the Additional Entitlements, (iv) Landlord shall have the right at any time(s)
to (x) freely transfer any development intensity associated with any existing
and/or Additional Entitlements to any other sites or projects and/or (y) if
Tenant does not pay Land Rent as and when required, Landlord shall be free to
construct additional building(s) at the Project and lease all or any portion of
such new building(s) to any third party(ies) (except as provided in Section
44(r)) upon any terms and conditions acceptable to Landlord, and (v) Tenant’s
remaining Expansion Rights under this Section 39 shall terminate.
As used in this Lease, “Expansion Requirements” shall mean that all of the
following requirements are satisfied: (i) Tenant is not in material Default
under any provision of the Lease; (ii) Tenant has a credit rating of “BBB-” or
better from Standard & Poor’s Corporation, or “Baa3” or better from Moody’s
Investors Service, Inc. (or in each case any successor thereof), or, in the
event that Tenant does not have a credit rating at that time, Tenant has a net
worth (as determined in accordance with GAAP) that is not less than the Minimum
Net Worth Amount; and (iii) Illumina, Inc., a Delaware corporation, or any
entity leasing or subleasing the Premises pursuant to a Permitted Assignment, is
the tenant occupying and operating out of at least 70% of the Premises under
this Lease.
Subject to the terms and conditions of this Section 39, if Tenant elects to
exercise an Expansion Right with respect to any Expansion Building(s), Tenant
shall, on or before the Expansion Right Expiration Date, deliver written notice
to Landlord of its election to exercise such Expansion Right (each, an
“Expansion Notice”), which Expansion Notice shall identify the Expansion
Building(s) with respect to which Tenant is exercising its Expansion Right (each
an “Identified Expansion Building”) along with a deposit in the amount of
$100,000 multiplied by the number of Identified Expansion Buildings identified
in the Expansion Notice for use by Landlord for the initial costs actually
incurred by Landlord in connection with the initial design and pricing
(collectively, “Initial Costs”) for each Identified Expansion Building
(“Expansion Deposit”). Landlord agrees to contribute up to $100,000 for the
Initial Costs associated with each Identified Expansion Building following the
exhaustion of Tenant’s applicable Expansion Deposit for such Identified
Expansion Building (evidence of which exhaustion/contribution shall be provided
to Tenant upon Tenant’s written request from time to time in the form of a
detailed line item statement).
Notwithstanding anything to the contrary contained herein, Tenant acknowledges
and agrees that (i) Landlord shall have no obligation to commence the design
and/or construction of any Expansion Building prior to Tenant delivering an
Expansion Notice and an Expansion Deposit with respect to such Expansion
Building to Landlord, (ii) in no event shall Tenant have the right to exercise
an Expansion Right with respect to any later numbered Expansion Building if
Tenant has not previously or concurrently therewith exercised an Expansion Right
with respect to the Expansion Building number immediate preceding it (e.g.
Tenant cannot elect to exercise an Expansion Right for Building 8 if Tenant has
not exercised an Expansion Right for Building 7) and Landlord shall have the
right, in Landlord’s sole and absolute discretion, to elect not to construct any
later numbered Expansion Building(s) for Tenant if Tenant elects as provided for
in this Lease to rescind its Expansion Notice with respect to an earlier
numbered Expansion Building (e.g., Landlord can elect not to construct Building
8 if Tenant rescinds its Expansion Notice for Building 7), (iii) in no event
shall Tenant have the right under any circumstances to exercise an Expansion
Right with respect to less than all of the rentable square footage of an
Expansion Building, (iv) the site plan including, without limitation, the number
of floors, rentable square footages, configuration and locations of the
Expansion Buildings within the Project are not guaranteed and are subject to
change by Landlord in the exercise of Landlord’s reasonable discretion;
provided, however, that so long as all of Tenant’s Expansion Rights remain in
full force and effect under this Section 39, any such changes made by Landlord
shall not materially and adversely impact: (A) the use of the Expansion
Buildings

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

for the Permitted Use, (B) Tenant’s ability to access the Premises, (C) Tenant’s
parking rights under Section 10, or (D) the total square footage available to
Tenant for expansion of the Premises pursuant to this Section 39(a), and (v)
Landlord’s obligation to develop each Expansion Building on receipt of the
applicable Expansion Notice is expressly conditioned upon and subject to, and
with Landlord having no liability for the failure of any of such conditions
(except as otherwise expressly provided herein), Landlord’s ability to obtain,
on terms and conditions reasonably acceptable to Landlord, all governmental
approvals necessary to permit the design and construction of the applicable
Expansion Building, the reasonable availability of materials and labor and all
other conditions outside of Landlord’s reasonable control. If Tenant exercises
its Expansion Rights hereunder with respect to any Expansion Building and does
not exercise any of its rescission rights under Section 39(c) with respect
thereto, Landlord agrees to use reasonable and diligent efforts to pursue and
obtain as contemplated under this Lease and the applicable work letter the
necessary governmental approvals to permit the design and construction of such
Expansion Building.
(b)Land Rent. Commencing on the Building 6 Rent Commencement Date and continuing
thereafter on the first day of each month during the Base Term and each
Extension Term, Tenant shall be required to pay rent to Landlord (“Land Rent”)
in an amount which results in Landlord receiving in equal monthly installments a
7.5% per annum return on the then Building Entitlement Value. Notwithstanding
the foregoing, Land Rent shall be abated until December 31, 2018, and Tenant
shall not be required to commence paying Land Rent until January 1, 2019. The
Building Entitlement Value shall be increased on each Building 6 Adjustment Date
by multiplying the Building Entitlement Value immediately before such Building 6
Adjustment Date by the Bi-Annual Rent Adjustment Percentage and adding the
resulting amount to the Building Entitlement Value immediately before such
Building 6 Adjustment Date.
As used herein, (i) “Building Entitlement Value” shall mean (x) $8,009,437
(which is the amount Landlord and Tenant have agreed to use as the value of any
remaining Buildable Entitlements as of January 26, 2015 (with both parties
recognizing that there is no guaranty as to the actual number of Buildable
Entitlements which will remain)) after taking into account the estimated number
of Buildable Entitlements being utilized for the construction of Building 6 plus
(y) an amount equal to all of the actual third party costs and expenses incurred
by Landlord in connection with Landlord processing the Additional Entitlements
with the City, with such costs and expenses not to exceed $1,265,000 without
Tenant’s prior written approval, and (ii) “Buildable Entitlements” shall mean
the amount of rentable square footage that can be developed on the site based on
the development intensity authorized by the Additional Entitlements.
Each time Tenant elects to exercise an Expansion Right for an Expansion
Building, the Building Entitlement Value shall, for purposes of calculating Land
Rent, be reduced on the Expansion Building Rent Commencement Date for such
Expansion Building by the value on a per rentable square foot basis of the
Buildable Entitlements (the “Per Square Foot Value”) being utilized for such
Expansion Building. The Per Square Foot Value shall be determined by dividing
the Building Entitlement Value by the actual number of Buildable Entitlements
which have been irrevocably granted to the Project, and except for the bi-annual
increases provided for in the first paragraph of this Section 39(b) the same
shall not be subject to change after August 15, 2016. The value of the Buildable
Entitlements being utilized for the applicable Expansion Building shall be
calculated by multiplying the Per Square Value of the Building Entitlements by
the amount of rentable square feet being utilized for such Expansion Building.
Notwithstanding anything to the contrary contained herein, the Building
Entitlement Value shall not be subject to adjustment except as provided for in
first sentence of this paragraph and/or if Tenant pays to Landlord the One Time
Land Rent Payment.
    The Land Rent exhibit which is attached as Exhibit H to the Second Amendment
is intended to illustrate how Landlord and Tenant arrived at the determination
of current Building Entitlement Value of $8,009,437 and with both parties
agreeing that such amount shall not be adjusted even if the remaining Buildable
Entitlements after taking into account the Buildable Entitlements being utilized
for the construction of Building 6 is substantially more or less than 143,920
rentable square feet. Tenant acknowledges and agrees that there is no assurance
that, even after Landlord has incurred costs and expenses (up to potentially
$1,265,000) to attempt to obtain the Additional Entitlements (and which result
in an increase in the Building Entitlement Value) that Landlord will receive any
of the Additional Entitlements reflected on Exhibit H to the Amended and
Restated Second Amendment as Anticipated Additional FAR and, as such, the $20.19
Per Square Foot Value of the Building Entitlements reflected on the last line of
such exhibit may never be achieved.
Notwithstanding the foregoing, if Tenant so elects, Tenant shall have the right,
at any time after August 15, 2016 but upon not less than 30 days advance written
notice to Landlord, to pay to Landlord the then full Building Entitlement Value
in a single cash payment (the “One Time Land Rent Payment”) in which case

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

Tenant shall not be required to continuing paying Land Rent but Tenant shall not
forfeit those rights under this Section 39 which Tenant would otherwise forfeit
if Tenant ceased paying Land Rent.
Notwithstanding anything to the contrary contained herein, if (other than a
result of Tenant having paid the One Time Land Rent Payment to Landlord) Tenant
does not pay (or ceases to pay) Land Rent when required under this Lease, (i)
Tenant shall be required to promptly reimburse Landlord for all of the third
party costs and expenses incurred by Landlord in connection with Landlord
processing the Additional Entitlements up to $1,265,000 (unless Tenant approved
in writing costs and expenses in excess of such amount in which case Tenant
shall be required to also reimburse Landlord for such excess costs and expenses
approved by Tenant), (ii) Tenant’s remaining Expansion Rights shall terminate
and Tenant shall have no further rights under this Section 39, and (iii)
Landlord shall have the right at any time(s) to freely transfer any development
intensity associated with the Additional Entitlements to any other sites or
projects and/or develop any new building(s) at the Project and lease all or any
portion of such new building(s) to any third party(ies) (except as provided in
Section 44(r)) upon any terms and conditions acceptable to Landlord. If Tenant
fails to pay (or ceases to pay) Land Rent, Tenant shall not have the right to
thereafter elect to resume paying Land Rent.
In addition, if Tenant elects to exercise an Extension Right for less than the
entire Premises, Landlord shall have the right at any time(s) to develop any new
building(s) at the Project and lease all or any portion of such new building(s)
to any third party(ies) (except as provided in Section 44(r)) upon any terms and
conditions acceptable to Landlord.    
(c)Rescission Rights.
(i)Initial Rescission Right. Following receipt of each Expansion Notice,
Landlord shall deliver to Tenant a detailed written line item estimate on the
part of Landlord of the Project Costs (as defined below) for the Identified
Expansion Building (“Initial Project Cost Estimate”) along with a corresponding
estimate of the initial monthly Base Rent which would be due for the applicable
Identified Expansion Building (“Initial Base Rent Estimate”). Tenant shall have
the right (“Initial Rescission Right”) to rescind the applicable Expansion
Notice by delivery to Landlord of a written rescission notice (“Initial
Rescission Notice”) on or before the date that is 15 business days after
Landlord’s delivery to Tenant of the Initial Project Cost Estimate and Initial
Base Rent Estimate for the Identified Expansion Building if (and only if) the
Initial Base Rent Estimate for the Identified Expansion Building for the first
year of the Base Term for such Identified Expansion Building exceeds $3.00 per
rentable square foot per month (“Cap Amount”). The Cap Amount provided for in
the preceding sentence applies if the first year of the Base Term for the
Identified Expansion Building is reasonably estimated by Landlord to commence
within 24 months after the Initial Commencement Date, and the Cap Amount shall
thereafter be increased by the Bi-Annual Rent Adjustment Percentage on every
other anniversary of the Initial Commencement Date. The Initial Rescission Right
shall only apply, depending on when the Base Term for the Identified Expansion
Building is reasonably estimated by Landlord to commence, if the Initial Base
Rent Estimate exceeds the Cap Amount (as adjusted). If Tenant fails to timely
deliver the Initial Rescission Notice to Landlord, Tenant shall be deemed to
have waived its Initial Rescission Right. If Tenant delivers the Initial
Rescission Notice to Landlord pursuant to this paragraph, Tenant’s Expansion
Right with respect to the Identified Expansion Building shall terminate and be
of no further force or effect, in which case Tenant shall have no further rights
under Section 39 with respect to such Identified Expansion Building but Tenant
shall nonetheless be required to pay Land Rent until the expiration of the Base
Term.
(ii)Final Rescission Right. Following Tenant’s waiver of its Initial Rescission
Right and the development by Landlord of preliminary plans for such Identified
Expansion Building, Landlord shall prepare a RFP for 3 general contractors
reasonably acceptable to Landlord and Tenant who will each be requested to
respond with their fee and general conditions based on the Expansion Building
Preliminary Plans. Landlord and Tenant shall use reasonable efforts to agree
upon one of the bids (“Contractor’s Initial Bid”) for the purposes of developing
a revised estimate of the Project Costs. Based on the Contractor’s Initial Bid,
Landlord shall deliver to Tenant a revised written estimate on the part of
Landlord of the Project Costs for the Identified Expansion Building (“Revised
Project Cost Estimate”). Tenant shall have a final right (“Final Rescission
Right”) to rescind the applicable Expansion Notice by delivery to Landlord of a
written rescission notice (“Final Rescission Notice”) on or before (i) the date
that is 15 business days after Landlord’s delivery to Tenant of the Revised
Project Cost Estimate for the Identified Expansion Building if (and only if) the
Revised Project Cost Estimate exceeds the Initial Project Cost Estimate by more
than 20%, or (ii) the date that is 5 business days after Landlord selection of
such Contractor’s Initial Bid for the purposes of developing the Revised Project
Cost Estimate if Tenant was unwilling to agree to use the Contractor’s Initial
Bid selected by Landlord for the purposes of developing a revised estimate of
the Project Costs. If Tenant fails to timely deliver the Final Rescission Notice
to Landlord, Tenant shall be deemed to have waived its Final Rescission Right.
If Tenant

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

delivers the Final Rescission Notice to Landlord pursuant to this paragraph,
Tenant’s Expansion Right with respect to the Identified Expansion Building shall
terminate and be of no further force or effect, in which case Tenant shall have
no further rights under Section 39 with respect to such Identified Expansion
Building, but Tenant shall nonetheless be required to pay Land Rent until the
expiration of the Base Term.
(iii)Effect of Multiple Rescissions. Notwithstanding anything to the contrary
contained in this Lease, if Tenant’s exercises a second Initial Rescission Right
and/or a second Final Rescission Right under this Lease, Tenant shall be solely
responsible (without any contribution from Landlord) for all Initial Costs and
other related costs incurred by Landlord in connection with all future exercises
by Tenant of any of its Expansion Rights.
(iv)Acknowledgement. If Tenant elects to exercise either its Initial Rescission
Right or its Final Rescission Right with respect to any Identified Expansion
Building, Landlord shall return to Tenant any unused portion, if any, of the
Expansion Deposit delivered by Tenant to Landlord with respect to such
Identified Expansion Building. Tenant acknowledges and agrees that the Initial
Project Cost Estimates and the Revised Project Cost Estimate provided by
Landlord and the Contractor’s Initial Bid delivered pursuant to the provisions
of Section 39(c)(i) and (ii) are merely estimates and are not a guaranty of
actual Project Costs and/or the amount of Base Rent which will be payable for
any Identified Expansion Building and Landlord shall have no liability to Tenant
in connection therewith nor shall Tenant have any additional rescission rights
beyond those expressly provided for in Section 39(c)(i) and (ii).
(d)Lease Terms for Expansion Building(s). Tenant acknowledges and agrees that if
Tenant leases any Expansion Building(s) pursuant to this Section 39, all of the
terms and conditions of this Lease shall apply to the leasing of such Expansion
Building, except that: (i) the definitions on page 1 of this Lease shall be
amended as necessary to document and reflect the addition of the applicable
Expansion Building to the Project; (ii) Tenant shall be required to pay annual
Base Rent in equal monthly installments for the first 12 months following the
Expansion Building Rent Commencement Date (as defined below) for the applicable
Expansion Building at a rate which provides Landlord with an annual return on
all Project Costs for such Expansion Building which is the greater of (A) 300
basis points above the 10-year U.S. Treasury yield as of the date that Landlord
receives the applicable Expansion Notice, and (B) 8.5%, and such return shall be
subject to increases as provided for in Section 4 hereof by the Bi-Annual Rent
Adjustment Percentage on every other anniversary of the applicable Expansion
Building Rent Commencement Date; (iii) the Base Term of the Lease with respect
to the applicable Expansion Building shall expire on the same day as the Base
Term with respect to the original Premises; provided, however, that each time
Tenant exercises its Expansion Right with respect to any Expansion Building
during the last 120 months of the Base Term, the Base Term for the entire
Premises shall be extended each time to the date that is 120 months after the
Expansion Building Rent Commencement Date for the applicable Expansion Building;
(iv) Landlord shall be responsible for the construction of tenant improvements
in each Expansion Building desired by Tenant which improvements shall be of a
fixed and permanent nature approved by Landlord (“Expansion Building Tenant
Improvements”) and shall be required to satisfy the requirements set forth on
Exhibit K, and the parties shall enter into a work letter for the Expansion
Building and Expansion Building Tenant Improvements reasonably acceptable to
both parties and based substantially on the form of work letter attached hereto
as Exhibit J (each, an “Expansion Building Work Letter”) with Tenant receiving a
tenant improvement allowance from Landlord in the amount of $60 per rentable
square foot of the applicable Expansion Building ($7.50 per rentable square foot
of which may be used for Tenant’s cabling and Tenant’s furniture, fixtures and
equipment within the applicable Expansion Building) which shall be disbursed as
provided for in the applicable Expansion Building Work Letter; and (v) the
“Expansion Building Rent Commencement Date” shall be the date that is 60 days
after the Substantial Completion of the Building Shell and the Substantial TI
Completion of the Expansion Building Tenant Improvements (all as defined in the
Expansion Building Work Letter), and Tenant shall commence paying Base Rent and
Operating Expenses for the Expansion Building on such date.
As used in this Lease, “Project Costs” shall mean the sum of all of the actual,
documented costs incurred by Landlord through Project Close-Out in connection
with the acquisition, design and construction of the applicable Expansion
Building, the Parking Structure and all related improvements including, without
limitation: (i) the value of the land on which the applicable Expansion Building
is being constructed (which for purposes hereof the parties agree is equal to
the then value of the Buildable Entitlements being utilized for the applicable
Expansion Building as calculated pursuant to Section 39(b); (ii) architectural,
engineering, construction and development cost and fees; (iii) other soft and
legal costs; (iv) a development fee to Landlord equal to 3% of the hard Project
Costs; (v) Landlord’s carry costs related to the applicable Expansion Building
from the initiation of construction of such Expansion Building until the
applicable Expansion Building Rent Commencement Date; (vi) the $60 per rentable
square foot tenant improvement allowance granted by Landlord for the applicable
Expansion Building Tenant Improvements plus Landlord’s carry costs related to
the applicable Expansion Building Tenant Improvements from the initiation of
construction of the applicable Expansion

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

Building Tenant Improvements until the applicable Expansion Building Rent
Commencement Date; (vii) infrastructure costs, assessments, impact fees, site
preparation costs, testing, labor and materials to construct the applicable
Expansion Building and the Parking Structure and related infrastructure and
improvements, permit fees, costs associated with obtaining the PID Permit
amendment and necessary entitlement or re-entitlements, if necessary, and any
other governmental fees, sales taxes and fees payable to contractors, project
landscaping, water, gas and electrical fees and related miscellaneous costs, and
builder’s risk insurance and other insurance related costs, (viii) leasing
commissions, if any, payable to a broker solely in its capacity as the broker
representing Tenant in connection with the applicable Expansion Right and,
unless Tenant has notified Landlord in writing otherwise, such broker shall be
Cushman & Wakefield of San Diego, Inc., but only if Steve Rosetta is the broker
at Cushman & Wakefield of San Diego, Inc., representing Tenant in connection
with the applicable Expansion Right and further provided however, that Landlord
and Tenant’s broker (whether Cushman & Wakefield of San Diego, Inc., or any
other brokerage company) shall have entered into a commission agreement with
respect to such commission which agreement is in form and content acceptable to
Landlord and such broker, each in their respective sole and absolute discretion,
(ix) Landlord’s carry costs related to the Parking Structure from the initiation
of construction of such Parking Structure until the Project Close-Out; (x)
Landlord’s contribution towards the Initial Costs for such Expansion Building,
and (xi) Landlord’s reasonable financing costs (or reasonable imputed market
rate financing costs) with respect to all of the foregoing. Landlord shall not
incur any Project Costs not contemplated by this Lease and/or any applicable
work letter without Tenant’s prior written approval. Tenant shall have the right
to audit Project Costs within 180 days after the Project Close-Out and if Tenant
discovers errors and Landlord and Tenant are unable to resolve such dispute
within 30 days after the expiration of such 180 day period, it shall be resolved
by arbitration by a single arbitrator with the qualifications and experience
appropriate to resolve the matter and appointed pursuant to and acting in
accordance with the rules of the American Arbitration Association.
As used herein, “Parking Structure” shall mean, all as elected by Landlord in it
sole discretion, one or more levels of subterranean parking and/or one or more
parking structures each of which may be constructed in one or more phases with
the same or different numbers of tiers in each phase. Landlord shall have right,
after taking into consideration potential limitations or difficulties on
construction of future parking at the Project if additional buildings beyond the
applicable Expansion Building were in the future to be constructed, require the
construction in connection with any Expansion Building of more subterranean
and/or other parking levels and spaces than are required under applicable Legal
Requirements to satisfy the PID Permit and other applicable requirements for the
then Premises and the additional rentable square footage of such Expansion
Building. Each Parking Structure shall generally comply with the requirements
set forth on Exhibit O attached hereto. Landlord shall use reasonable efforts to
notify Tenant of its elections with respect to the applicable Parking
Structure(s) within a reasonable time after Tenant exercises its Expansion Right
for an Expansion Building. If Landlord elects to construct any Parking
Structure(s) in phases, all of the Project Costs incurred in connection with
each such phase of the applicable Parking Structure(s) shall be attributable to
the applicable Expansion Building being constructed by Landlord. For example, if
Landlord elects in connection with Tenant’s exercise of the Expansion Right for
Building 7 to construct a Parking Structure with only 2 tiers, all of the
Project Costs in connection with such Parking Structure shall be included in the
definition of Project Costs for Building 8 and used to calculate Base Rent for
Building 8, and, if Tenant thereafter elects to exercise its Expansion Right for
Building 8, and Landlord elects to construct additional tiers and/or a new
Parking Structure at that time, all of the Project Costs in connection with such
additional tiers and/or new Parking Structure shall be included in the
definition of Project Costs for Building 8 and used to calculate Base Rent for
Building 7. Notwithstanding anything to the contrary contained herein, if Tenant
properly exercises its rescission rights as provided for in this Lease, any
elections made by Landlord pursuant to this paragraph shall not be binding on
Landlord if Landlord so elects and Landlord shall be free to make new elections
if Tenant thereafter exercises any of its Expansion Rights.
As used in this Lease, “Project Close-Out” shall mean the first date following
the final completion of the applicable Expansion Building by Landlord that (i)
all contractors, subcontractors, suppliers, architects and others who supplied
labor or materials have been paid in full and all liens are released; (ii) the
architect or general contractor for the applicable Expansion Building have
issued any certificate(s) of completion as may be required by Landlord; (iii)
all punch list items have been completed; and (iv) the contractors and architect
have provided all close out documentation required by Landlord; provided,
however, that in no event shall such date be deemed to occur until the
applicable Expansion Building Rent Commencement Date.
(e)Construction of Expansion Buildings. In addition to the foregoing, the
following provisions shall apply with respect to the design and construction of
each Expansion Building:

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

(A)Building Shell. Notwithstanding anything to the contrary contained in this
Section 39, Landlord’s construction obligation with respect to the each
Expansion Building shall be limited to an obligation to construct, subject to
the other provisions of this Section 39, and to deliver to Tenant the Expansion
Building upon Substantial Completion of the Building Shell and upon Substantial
TI Completion of the Expansion Building Tenant Improvements. As used in this
Lease, “Building Shell” shall mean a warm shell containing the warm shell
requirements set forth in the Expansion Building Requirements attached hereto as
Exhibit I. As used in this Lease, “Building Shell/TI Delivery Date” shall mean
the date that Tenant is notified in writing that the Building Shell has been
Substantially Completed (and is in fact Substantially Completed).
(B)Architects and Contractors. After the selection of the general contractor as
provided for in the Expansion Building Work Letter, Landlord shall enter into a
guaranteed maximum price contract with the selected general contractor.
(C)Plans. Tenant acknowledges that certain plans and other information that may
be made available to Tenant pursuant to the provisions of this Section 39 and
any Expansion Building Work Letter constitute information that Landlord
considers confidential and, upon request from Landlord, Tenant and Landlord
shall execute a confidentiality and non-disclosure agreement reasonably
acceptable to each party with respect to such confidential information.
(D)Budget. The cost information related to the design and construction of each
Expansion Building shall be shared with Tenant on a so called “open book basis”.
Tenant shall have the right to approve (which approval shall not be unreasonably
withheld, conditioned or delayed) any material changes to the final budget prior
to Landlord entering into the guaranteed maximum price contract with the general
contractor for the Building Shell. Notwithstanding anything to the contrary
contained herein or in the Expansion Building Work Letter, Landlord shall have
the right to include a contingency of up to 10% in the budget and in the
guaranteed maximum price contract with the general contractor. In addition, the
budget for each Expansion Building shall also include a payment for the
development fee provided for as part of the Project Costs. Landlord shall not be
entitled to any reimbursement of any fees, overhead, travel, salaries or costs
of Landlord’s personnel in connection with the construction of the Expansion
Building unless they are defined as direct Project Cost.
(E)Schedule. Landlord’s proposed construction schedule shall be included as part
of the Expansion Building Work Letter. Landlord shall use reasonable efforts to
cause the Building Shell to be Substantially Completed within 24 months after
the building permit for the shell and core construction of the applicable Shell
Building has been issued by the applicable Governmental Authority). If the
Building Shell/TI Delivery Date has not occurred within such 24 month period,
Tenant shall have no right to terminate this Lease with respect to the Expansion
Building nor shall Landlord have any liability to Tenant for any loss or damage
resulting therefrom except that Tenant shall be entitled to occupy such
Expansion Building following the Expansion Building Rent Commencement Date
without the obligation to pay Base Rent 1 day for each day following the
expiration of such 24 month period until the Building Shell/TI Delivery Date. If
the Building Shell/TI Delivery Date has not occurred within 30 months after the
building permit for the shell and core construction of the applicable Shell
Building has been issued by the applicable Governmental Authority, Tenant shall
have the right to elect to either (i) continue to receive the Base Rent
abatement provided for in the preceding sentence, or (ii) terminate this Lease
only with respect to the applicable Expansion Building by written notice to
Landlord, in which case, except as provided for in the last sentence of the
first paragraph of Section 39(b), Landlord shall not have any further duties or
obligations to Tenant under this Lease with respect to the applicable Expansion
Building and Tenant shall have no further expansion rights with respect to such
Expansion Building and Landlord shall be free to lease it to any third
party(ies) on any terms and conditions acceptable to Landlord. If Tenant does
not elect to terminate this Lease with respect to the applicable Expansion
Building pursuant to subsection (ii) of the immediately preceding sentence
within 10 business days after the expiration of such 30 month period, such right
to terminate this Lease with respect to applicable Expansion Building shall be
waived, this Lease with respect to the applicable Expansion Building shall
remain in full force and effect, and Tenant shall be deemed to have elected to
proceed under subsection (i) above. Notwithstanding anything to the contrary
contained herein, Tenant acknowledges and agrees that any Tenant Delays (as
defined in Expansion Building Work Letter) and/or delays caused by Force Majeure
shall extend the dates set forth in this paragraph for Landlord’s performance of
its obligations on a day for day basis; provided, however, that in no event may
any delays caused by Force Majeure extend the dates set forth in this paragraph
for Landlord’s performance of its obligations by more than 90 days in the
aggregate except in the case of any matter covered by the provisions of Sections
18 and 19 hereof.

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

(F)Acknowledgment. Upon the request of either Landlord or Tenant, the parties
shall execute and deliver a written factually correct acknowledgement of the
Building Shell/TI Delivery Date, the Expansion Building Rent Commencement Date,
the Base Rent for the Expansion Building and the expiration date of the Base
Term as and when such are established in the form substantially similar to the
form of the “Acknowledgement of Commencement Date” attached to this Lease as
Exhibit D; provided, however, the failure by either party to execute and deliver
such acknowledgment shall not affect the other party’s rights hereunder.
(f)Tenant Default. Notwithstanding anything to the contrary contained herein,
Landlord shall have the right to suspend performance of all or any of Landlord’s
obligations under this Section 39 during any period that Tenant is in material
Default under this Lease and such period of suspension shall constitute a delay
caused by Tenant; provided that Landlord has notified Tenant in writing of
Landlord’s intention to suspend performance due to such Default.
(g)Amended Lease. Landlord and Tenant shall enter into a lease amendment or
lease agreement acceptable to both Landlord and Tenant for each Expansion
Building setting forth the lease terms and the rental of such Expansion Building
consistent with those set forth in this Section 39.
(h)Termination. The Expansion Right shall, at Landlord’s option, terminate and
be of no further force or effect even after Tenant’s due and timely exercise of
the Expansion Right, if, after such exercise, but prior to the commencement date
of the Base Term of the lease of the applicable Expansion Building, there is any
material Default by Tenant under the Lease.
(i)Rights Personal. The Expansion Rights are personal to Tenant and are not
assignable without Landlord’s consent, which may be granted or withheld in
Landlord’s sole discretion separate and apart from any consent by Landlord to an
assignment of Tenant’s interest in the Lease, except that they may be assigned
in connection with any Permitted Assignment of this Lease.
(j)No Extensions. The period of time within which any Expansion Right may be
exercised shall not be extended or enlarged by reason of Tenant’s inability to
exercise the Expansion Right.
14.
Signage. Notwithstanding anything to the contrary contained in the Lease,
Landlord shall have the right to have the name and logo of Landlord (or any
affiliate designated by Landlord) (“Landlord’s Signage”) included on all Project
Monument Signs off Nobel Drive and/or Judicial Drive now or in the future
located at the Project, as more particularly shown on Exhibit E attached hereto.
All of Landlord’s Signage shall be of a size, color, type and location
reasonably acceptable to Landlord and Tenant, and Tenant agree to cooperate with
Landlord in connection with the design, installation and maintenance of
Landlord’s Signage. The cost of placing Landlord’s Signage on the Project
Monument Signs shall be borne by Landlord.

15.
Brokers. Landlord and Tenant each represents and warrants that it has not dealt
with any broker, agent or other person (collectively, “Broker”) in connection
with the transaction reflected in this Second Amendment and that no Broker
brought about this transaction, other than Cushman & Wakefield. Landlord and
Tenant each hereby agrees to indemnify and hold the other harmless from and
against any claims by any Broker claiming a commission or other form of
compensation by virtue of having dealt with Tenant or Landlord, as applicable,
with regard to this leasing transaction. Landlord shall be responsible for all
commissions due to Cushman & Wakefield arising out of the execution of this
Second Amendment in accordance with the terms of a separate written agreement
between Cushman & Wakefield and Landlord.

16.
Disclosure. For purposes of Section 1938 of the California Civil Code, as of the
date of this Amendment, Tenant acknowledges having been advised by Landlord that
the Project has not been inspected by a certified access specialist.

17.
Miscellaneous.

a.This Second Amendment is the entire agreement between the parties with respect
to the subject matter hereof and supersedes all prior and contemporaneous oral
and written agreements and discussions. This Second Amendment may be amended
only by an agreement in writing, signed by the parties hereto.
b.This Second Amendment is binding upon and shall inure to the benefit of the
parties hereto, and their respective successors and assigns.
c.This Second Amendment may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which when taken together shall
constitute one and the same instrument. The signature page of any counterpart
may be detached therefrom without impairing the legal effect of the signature(s)
thereon provided such signature page is attached to any other counterpart
identical thereto except having additional signature pages executed by other
parties to this Second Amendment attached thereto.
d.Except as amended and/or modified by this Second Amendment, the Lease is
hereby ratified and confirmed and all other terms of the Lease shall remain in
full force and effect, unaltered and unchanged by this Second Amendment. In the
event of any conflict between the provisions of this Second Amendment and the
provisions of the Lease, the provisions of this Second Amendment shall prevail.
Whether or not specifically

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

amended by this Second Amendment, all of the terms and provisions of the Lease
are hereby amended to the extent necessary to give effect to the purpose and
intent of this Second Amendment.
[Signatures are on the next page.]
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment as of
the day and year first above written.
TENANT:
ILLUMINA, INC.,
a Delaware corporation

By: /s/ Marc Stapley
Its: Sr. VP & CFO

LANDLORD:
ARE-SD REGION NO. 32, LLC,
a Delaware limited liability company
By:    ALEXANDRIA REAL ESTATE EQUITIES, L.P.,
a Delaware limited partnership, managing member
By:
ARE-QRS CORP.,

a Maryland corporation,
general partner

By: /s/ Gary Dean
Its: VP RE Legal Affairs