Document:

ex1026

LEASE   by and between   BMR–LINCOLN CENTRE LP,   a Delaware limited partnership   and   ILLUMINA, INC.,   a Delaware corporation    

 

i   Table of Contents   1. Lease of Premises.................................................................................................................... 1   2. Basic Lease Provisions............................................................................................................ 2   3. Term........................................................................................................................................ 7   4. Project and Base Building Work; Substantial Completion; Schedule and Budget................. 7   5. Rent ....................................................................................................................................... 12   6. Rent Adjustments.................................................................................................................. 14   9. Use ........................................................................................................................................ 18   10. Rules and Regulations, CC&Rs and Parking Facilities ........................................................ 20   11. Control by Landlord.............................................................................................................. 21   12. Quiet Enjoyment ................................................................................................................... 22   13. Utilities and Services ............................................................................................................ 23   14. Alterations............................................................................................................................. 28   15. Repairs and Maintenance ...................................................................................................... 31   17. Estoppel Certificate............................................................................................................... 35   18. Hazardous Materials ............................................................................................................. 36   19. Odors and Exhaust ................................................................................................................ 39   20. Insurance; Waiver of Subrogation ........................................................................................ 39   21. Damage or Destruction ......................................................................................................... 44   22. Eminent Domain ................................................................................................................... 46   23. Surrender............................................................................................................................... 47   24. Holding Over ........................................................................................................................ 48   25. Indemnification and Exculpation .......................................................................................... 49   26. Assignment or Subletting...................................................................................................... 50   27. Subordination and Attornment.............................................................................................. 54   28. Defaults and Remedies ......................................................................................................... 55   29. Bankruptcy............................................................................................................................ 60   30. Brokers .................................................................................................................................. 61   31. Definition of Landlord .......................................................................................................... 61   32. Limitation of Landlord’s Liability ........................................................................................ 61   33. Joint and Several Obligations ............................................................................................... 62    

 

ii   34. Representations ..................................................................................................................... 63   35. Confidentiality ...................................................................................................................... 63   36. Notices .................................................................................................................................. 64   37. Miscellaneous ....................................................................................................................... 64   38. Telecommunications Equipment ........................................................................................ 69   39. Options to Extend Term........................................................................................................ 69   40. Expansion Option ................................................................................................................. 71   41. Right of First Refusal to Purchase ........................................................................................ 76   42. Multi Tenant Provisions........................................................................................................ 79   43. Secured Areas ....................................................................................................................... 79    

 

LEASE   THIS LEASE (this “Lease”) is entered into as of this ____ day of December, 2014 (the   “Execution Date”), by and between BMR–LINCOLN CENTRE LP, a Delaware limited   partnership (“Landlord”), and ILLUMINA, INC., a Delaware corporation (“Tenant”).   RECITALS   A. WHEREAS, Landlord owns certain real property (the “Property”) and all   improvements on the Property which is located at 200-800 Lincoln Centre Drive, Foster City,   California 94044 as more fully described on Exhibit A-1 attached hereto;   B. WHEREAS, Landlord intends to construct on the Property three (3) buildings,   each containing 160,000 square feet of Rentable Area, as defined below, (which buildings shall   be referred to herein as “Building A”, “Building B” and “Building C”), one (1) building   containing 40,000 square feet of Rentable Area (which building shall be referred to herein as   “Building D”), and certain parking structures (known as PS1, PS2 and PS3), surface parking   facilities and other improvements (such buildings and improvements are more fully depicted on   the preliminary site plan attached hereto as Exhibit A, which site plan is for illustration purposes   only and remains subject to change in accordance with the terms and conditions of this Lease).   Building A, Building B, Building C and Building D or any combination thereof may be referred   to herein as the “Buildings,” and any reference herein to a “Building” shall mean Building A,   Building B, Building C or Building D, as applicable. Building A, Building B, Building C,   Building D and all parking structures, facilities and other improvements serving such buildings,   together with the Property, are collectively referred to herein as the “Project;” and   C. 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:   1. Lease of Premises. Effective on the Term Commencement Date (as defined below),   Landlord hereby leases to Tenant and Tenant hereby leases from Landlord (i) Building A   (including, without limitation, all shafts, cable runs, mechanical spaces and rooftop areas (subject   to the terms and conditions of this Lease)), (ii) Building B (including, without limitation, all   shafts, cable runs, mechanical spaces and rooftop areas (subject to the terms and conditions of   this Lease)), (iii) Building D (including, without limitation, all shafts, cable runs, mechanical   spaces and rooftop areas (subject to the terms and conditions of this Lease)) and (iv) all   landscaping, parking facilities and structures, private drives and other improvements and   appurtenances within the Project related thereto or serving the applicable Buildings as reasonably   designated by Landlord (all of (i), (ii), (iii) and (iv) above, together with the rights of access and    

 

2   parking granted to Tenant hereunder which are appurtenant to the Premises, are collectively   referred to herein as the “Premises”) for use by Tenant in accordance with the Permitted Use (as   defined below) and no other uses. Notwithstanding anything to the contrary in this Lease,   Landlord and Tenant have mutually agreed to defer construction of PS1 (as defined in Section   40.5 below), and have agreed that the area where PS1 will be constructed will be paved and used   as a surface parking lot until the “PS1 Trigger Date” as defined in Section 40.5 below.   1.1 Verification of Rentable Area. Upon completion of the Design Development   Drawings (as defined below) or their equivalent for each Building in the Project, Landlord will   cause an architect/space measurement consultant reasonably acceptable to Landlord and Tenant   (the “Space Measurement Consultant”) to calculate the Rentable Area (as defined below) for the   applicable Building using the method of measurement attached hereto as Exhibit L (the   “Measurement Standard”) and the results of such measurement will be provided to Landlord and   Tenant and may be referred to herein as the “Rentable Area” of such Building (provided,   however, Landlord and Tenant hereby agree that, for purposes of this Lease, the Rentable Area   for each of Building A, Building D and Building B shall be the Rentable Area set forth in Section   2.2 below). Landlord and Tenant hereby agree that the measurement of the applicable Building   as determined by the Space Measurement Consultant (or, with respect to Building A, Building D   and Building B, the Rentable Area set forth in Section 2.2 below) will be the final, binding   Rentable Area of the applicable Building and will not be subject to change by either party during   the Term, unless the physical size of a Building or the Premises leased by Tenant actually   changes. Any amounts or provisions in this Lease which vary with Rentable Area will be   appropriately adjusted upon such remeasurement and confirmed by Landlord to Tenant in   writing.   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. 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 date of execution and delivery hereof by all   parties hereto.   2.2. “Rentable Area” of the Premises. Landlord and Tenant hereby stipulate that the   Rentable Area of Building A, Building D and Building B shall be as follows:   (a) Building A: 160,000 square feet.   (b) Building D: 40,000 square feet.   (c) Building B: 160,000 square feet.   2.3. “Base Rent”:    

 

3   (a) Building A and Building D: Initial monthly and annual installments of   Base Rent for Building A and Building D shall be payable commencing as of the Phase 1 Rent   Commencement Date (as defined below), subject to increase as set forth in Section 6 below:   Dates   Square Feet   of Rentable   Area   Base Rent per Square   Foot of Rentable Area   Monthly Base   Rent   Annual   Base Rent   Month 1 – Month 24 200,000 $32.86 annually $547,666.67 $6,572,000   (b) Building B : Initial monthly and annual installments of Base Rent for   Building B shall be payable commencing as of the Phase 2 Rent Commencement Date (as   defined below), subject to increase as set forth in Section 6 below and subject to the Building B   Base Rent Abatement (as defined in Section 5.5 below):   Dates   Square Feet   of Rentable   Area   Base Rent per Square   Foot of Rentable Area   Monthly Base   Rent   Annual   Base Rent   Month 1 – Month 24 160,000 $32.86 annually $438,133.33 $5,257,600   (c) Occupancy: Notwithstanding anything to the contrary, from and after the   Term Commencement Date, Tenant shall be permitted to occupy any space within Building A   and/or Building B for purposes of conducting business subject to the terms, conditions and   provisions of this Section 2.3(c). Tenant shall not be permitted to occupy Building D for any   purpose other than constructing the Tenant Improvements (as defined below) until the Phase 1   Rent Commencement Date.   (i) Tenant will notify Landlord in advance before commencing any   business activity in any Building, which notice must include proof that Tenant has obtained all   required approvals, permits and licenses from any applicable Governmental Authorities to allow   Tenant to legally commence business from such Building.   (ii) If prior to the Phase 1 Rent Commencement Date, Tenant   commences conducting business within any Building, then Tenant shall pay, with respect to any   Rentable Area in which Tenant commences conducting business (any such Rentable Area,   “Phase 1 Early Occupancy Space”), Early Occupancy Additional Rent (as defined below), for the   period commencing on the date Tenant first conducts business activities in such Phase 1 Early   Occupancy Space and ending on the date immediately preceding the Phase 1 Rent   Commencement Date.    

 

4   (iii) If, after the Phase 1 Rent Commencement Date but prior to the   Phase 2 Rent Commencement Date, Tenant commences conducting business within a combined   Rentable Area (within Building A and Building B) in excess of the Rentable Area of Building A   (any such excess Rentable Area, “Phase 2 Early Occupancy Space”), then Tenant shall pay, with   respect to such Phase 2 Early Occupancy Space, Early Occupancy Additional Rent, for the period   commencing on the date Tenant first conducts business activities in such Phase 2 Early   Occupancy Space and ending on the date immediately preceding the Phase 2 Rent   Commencement Date.   (iv) “Early Occupancy Additional Rent” shall mean one hundred   percent (100%) of utility charges and other expenses incurred or attributable to any Building   occupied by Tenant, Taxes (as prorated pursuant to Article 7), Insurance Expenses (as prorated   pursuant to Article 13) and Operating Expenses (as prorated pursuant to Article 13).   2.4. Commencement Date:   (a) The “Term Commencement Date” shall be the date that Building A,   Building B and Building D are delivered to Tenant in TI Ready Condition.   (b) The “Phase 1 Rent Commencement Date” is the date that is the later of   (i) July 1, 2017 and (ii) the date that is nine (9) months after the date upon which Building A,   Building B and Building D are delivered to Tenant in TI Ready Condition (as defined in the   Work Letter); provided that if the Phase 1 Rent Commencement Date is delayed because of a   Tenant Delay (as defined the Work Letter), then the Phase 1 Rent Commencement Date shall   be the date that the Phase 1 Rent Commencement Date would have occurred but for such   Tenant Delay, and in the event there is a Landlord Delay or an Uncontrollable Delay which   actually delays completion of the Tenant Improvements (provided that no Uncontrollable   Delays shall exceed 90 days regardless of the actual number of days of Uncontrollable Delay)),   then the nine (9) month period set forth above will be extended by the number of days of such   Landlord Delays and/or Uncontrollable Delays, as applicable.   (c) The “Phase 2 Rent Commencement Date” is the date that is one (1) year   after the Phase 1 Rent Commencement Date; provided that if the Phase 2 Rent Commencement   Date is delayed because of a Tenant Delay, then the Phase 2 Rent Commencement Date shall   be the date that the Phase 2 Rent Commencement Date would have occurred but for such   Tenant Delay, and in the event there is a Landlord Delay or an Uncontrollable Delay which   actually delays completion of the Tenant Improvements in Building B (provided that no   Uncontrollable Delays shall exceed 90 days regardless of the actual number of days of   Uncontrollable Delay)), then the Phase 2 Rent Commencement Date will be extended by the   number of days of such Landlord Delays and/or Uncontrollable Delays, as applicable.   2.5. Term Expiration Date*:   (a) Building A and Building D: The “Term Expiration Date” for Building A   and Building D shall be date that is fifteen (15) years after the Phase 1 Rent Commencement   Date.    

 

5   (b) Building B: The “Term Expiration Date” for Building B shall be the   date that is fifteen (15) years after the Phase 2 Rent Commencement Date.   *The parties hereby acknowledge that the Term of this Lease as to Building A and   Building D will not expire on the same date as the Term of the Lease as to Building B   unless Tenant properly exercises the following option. Tenant shall have the option,   exercisable by written notice (an “Extension Notice”) to Landlord within ninety (90) days   after the Phase 2 Rent Commencement Date, to extend the Term Expiration Date for   Building A and Building D such that the Term of the Lease with respect to Building A   and Building D will expire conterminously with the Term of the Lease with respect to   Building B. In the event Tenant delivers the Extension Notice within the time period set   forth above, the Term of this Lease as to Building A and Building D shall be   automatically extended such that Tenant’s lease of Building A and Building D will expire   on the Term Expiration Date for Building B, and all terms and conditions of this Lease as   applicable to Building A and Building D shall continue to apply during such extended   Term, including the bi-annual adjustment of Base Rent payable as set forth in Section 6   below. Tenant will sign a commercially reasonable lease amendment memorializing such   extension if requested by Landlord, but such extension will be effective regardless of   whether such an amendment is fully executed by Landlord and Tenant. Tenant will not   have the right to exercise the above option in the event Tenant is in default hereunder   after the expiration of any applicable notice and cure periods.   2.6. Security Deposit: None.   2.7. Permitted Use: Office, R&D, manufacturing, distribution, laboratory and any   other uses in conformity with all Applicable Laws (as defined below); provided that at least   seventy-five percent (75%) of the Rentable Area of the Premises will be used for office, R&D,   manufacturing, distribution and/or laboratory use. “Applicable Laws” shall mean all federal,   state, municipal and local laws, codes, ordinances, rules and regulations of Governmental   Authorities (as defined below), committees, associations, or other regulatory committees,   agencies or governing bodies having jurisdiction over the Premises or any portion thereof,   Landlord or Tenant, including both statutory and common law and hazardous waste rules and   regulations and any covenants, conditions or restrictions, reciprocal easements or similar   agreements affecting the Project. Subject to Force Majeure or temporary interruptions due to   casualty or repairs and maintenance, Tenant will have access to the Premises 24 hours per day, 7   days per week throughout the Term.   2.8. Address for Rent Payment:   BMR-Lincoln Centre LP   Attention Entity 445   P.O. Box 511415   Los Angeles, California 90051-7970   2.9. Address for Notices to Landlord:    

 

6   BMR-Lincoln Centre LP   17190 Bernardo Center Drive   San Diego, California 92128   Attn: Vice President, Real Estate Legal   2.10. Address for Notices to Tenant:   Illumina, Inc.   5200 Illumina Way   San Diego, CA 92122   Attn: Director of Facilities   And   Illumina, Inc.   5200 Illumina Way   San Diego, CA 92122   Attn: General Counsel   With a copy to:   Martin Togni, Esq.   Allen Matkins Leck Gamble Mallory & Natsis LLP   501 West Broadway, 15th Floor   San Diego, CA 92101-3541   2.11. Address for Invoices to Tenant:   Illumina, Inc.   5200 Illumina Way   San Diego, CA 92122   Attn: Accounts Payable   2.12. The following Exhibits are attached hereto and incorporated herein by reference:   Exhibit A Premises and Site Plan   Exhibit A-1 Property   Exhibit B Work Letter   Exhibit B-1 Tenant Work Insurance Schedule   Exhibit C-1 Shell Schematic Design Documents   Exhibit C-2 Specifications   Exhibit D Project Cost Estimate   Exhibit E Project Costs   Exhibit F Key Milestone Dates   Exhibit G Multi-Tenant Provisions   Exhibit H Tenant’s Personal Property   Exhibit I Form of Estoppel Certificate    

 

7   Exhibit J Acknowledgement of Commencement Date and Term Expiration   Date   Exhibit K Rules and Regulations   Exhibit L Measurement Standard   Exhibit M Form of Memorandum of Lease   Exhibit N Form Termination of Memorandum of Lease   3. Term. The actual term of this Lease (as the same may be extended pursuant to Article 39   hereof, the “Term”) shall commence on the Term Commencement Date and shall end on the   “Term Expiration Date” as defined in Section 2.5 above as to the applicable portions of the   Premises. TENANT HEREBY WAIVES THE REQUIREMENTS OF SECTION 1933 OF THE   CALIFORNIA CIVIL CODE, AS THE SAME MAY BE AMENDED FROM TIME TO TIME.   4. Project and Base Building Work; Substantial Completion; Schedule and Budget.   4.1. Entitlements. Promptly upon the full execution and delivery of this Lease,   Landlord shall diligently pursue the procurement of all permits, approvals, and entitlements   necessary for the construction of the Project and Base Building Work (as defined below) on the   Property (collectively, the "Entitlements"), which Entitlements will include PS1 to the extent   reasonably practicable, even though PS1 will be constructed at a later date. If, as of October 4,   2015 (as such date may be extended by any Uncontrollable Delays (as defined below); but   provided that such date will not be extended beyond December 1, 2015 regardless of the cause of   delay), all Entitlements necessary to commence construction of the Project and Base Building   Work have not been received or remain subject to any appeal or challenge for any reason, then   Tenant will have the right (in its sole and absolute discretion) to terminate this Lease upon ten   (10) days’ prior written notice to Landlord. In addition, in the event Tenant fails to exercise its   termination right above, and any Governmental Authority notifies Landlord that Entitlements   will not be issued for the Project (despite Landlord’s diligent efforts to procure such Entitlements   including, without limitation, exhausting all administrative remedies available to Landlord in   connection therewith), then Landlord will have the right to terminate this Lease by delivery of   written notice to Tenant on or before December 31, 2015. Following the exercise of either of the   termination rights above, this Lease shall be fully and finally surrendered and terminated and   shall no longer be of any force or effect, except for those provisions that, by their express terms,   survive the expiration or earlier termination of this Lease. The term “Uncontrollable Delay”   shall mean any event of Force Majeure (as defined below), any strike, lockout or similar labor   disturbance, any litigation, challenge or appeal brought by a third party objecting to the Project or   Entitlements, excess time in obtaining governmental permits or approvals beyond the time period   normally required to obtain such permits or approvals for similar space, similarly improved, in   comparable office/lab buildings in Foster City, California, delays caused by changes to the   Approved Plans (as defined below) requested by Governmental Authorities, any environmental   mitigation requirements or similar unforeseen delay in obtaining Entitlements.   4.2. Landlord's Project and Base Building Work. Landlord will construct the Project   and Base Building Work on an open book basis, using a general contractor selected by Landlord    

 

8   on a negotiated fee basis, which general contractor will be retained pursuant to a guaranteed   maximum price contract in a form reasonably negotiated by Landlord, a copy of which will be   provided to Tenant. Tenant will have the right to reasonably approve the general contractor   selected by Landlord, provided that such approval must be given or withheld (with a written   statement outlining the reasonable basis for any disapproval) within five (5) days after Landlord’s   request for approval or Tenant will be deemed to have approved the contractor. Promptly   following the date on which the Entitlements necessary for the construction of the Project and   Base Building Work have been received and are no longer subject to any potential appeal or   challenge and the Approved Plans (as defined in Section 4.4 below) are approved, or on such   earlier date as Landlord may elect in its discretion, Landlord shall cause the contractor selected   by Landlord (the “General Contractor”) to commence and diligently prosecute the construction of   the work described on the Approved Plans (the "Project and Base Building Work") in accordance   with Section 2.1 of the Work Letter attached hereto as Exhibit B (the "Work Letter"); provided,   Landlord shall have no obligation to start any grading or construction before the necessary   Entitlements for the Project and Base Building Work have been received and are no longer   subject to any potential appeal or challenge and PS1 construction will be deferred until the “PS1   Trigger Date” (as defined in Section 40.5 below). The Project and Base Building Work shall be   constructed in a good and workmanlike manner, and in accordance with Applicable Laws   (subject only to (a) such minor discrepancies as will not adversely impact the performance of the   Tenant Improvements (collectively, the "Punchlist Items") and (b) any failure to comply with   Applicable Laws as will not adversely impact Tenant's ability to obtain a certificate of occupancy   and use the Premises for Tenant's Permitted Use).   4.3. Substantial Completion of Project and Base Building Work. The Project and Base   Building Work shall be deemed "Substantially Complete" or there shall be "Substantial   Completion" at such time as (a) Landlord has completed construction of the Project and Base   Building Work in accordance with the Approved Plans (excluding PS1, which shall be   constructed pursuant to Section 40.5 below), subject only to Punchlist Items (which shall be   completed by Landlord within thirty (30) days after the preparation of the Punchlist, or as soon   thereafter as is reasonably practicable provided Landlord uses diligent efforts to complete such   Punchlist within a reasonable time), (b) Tenant has been provided the number of parking passes   to which it is entitled pursuant to Section 10.4 of this Lease, and (c) Landlord has provided   Tenant with continuous and uninterrupted access to the Premises (provided that Landlord will be   permitted reasonable access to the Premises as necessary to complete the Punchlist Items). The   date on which the Project and Base Building Work is deemed Substantially Complete pursuant to   the foregoing shall be referred to herein as the "Substantial Completion Date." Tenant   acknowledges that neither Landlord nor any agent of Landlord has made any representation or   warranty with respect to the condition of the Premises or with respect to the suitability of the   Premises for the conduct of Tenant’s business. Tenant acknowledges that Landlord shall have no   obligation to alter, repair or otherwise prepare the Premises for Tenant’s occupancy or to pay for   or construct any improvements to the Premises, except with respect to the Project and Base   Building Work and payment of the TI Allowance (as defined in the Work Letter) or in   connection with any repair obligations expressly undertaken by Landlord pursuant to this Lease.   Tenant’s taking of possession of the Premises shall, except as otherwise agreed to in writing by    

 

9   Landlord and Tenant, conclusively establish that the Premises were at such time in good, sanitary   and satisfactory condition and repair.   4.4. Approved Plans. Landlord has caused its architect to prepare the schematic plans   attached hereto as Exhibit C-1 (the “Shell Schematic Design Documents”), based upon the   specifications attached hereto as Exhibit C-2 (the “Specifications”). The Shell Schematic Design   Documents, together with any Permitted Plan Changes (as defined below) and any Approved   Significant Changes (as defined below) shall be referred to herein as the “Approved Plans.” The   Approved Plans shall be subject to change (a) to accommodate minor field changes, (b) by   Landlord provided such changes do not materially and adversely affect the quality of the Project   and Base Building Work or Tenant’s ability to operate its business at the Premises for the   Permitted Use, (c) to obtain Entitlements, (d) to comply with Applicable Laws or as required by   any Governmental Authority as a condition to the issuance of a permit or other approval for the   Project and Base Building Work (collectively, the “Permitted Plan Changes”). Tenant will not   be entitled to object to any Permitted Plan Changes unless such Permitted Plan Changes are not a   logical progression of the Shell Schematic Design Documents, including any change which   results in (1) a reduction in the number of buildings to be built on the Property, (2) a material   decrease in the Rentable Area, which for purposes hereof shall mean a decrease of more than ten   percent (10%) of the Rentable Area of the Premises set forth in Section 2.2 above, (3) a reduction   in the number of parking passes that Landlord can provide to Tenant below the number required   in Section 10.4 below, (4) a material change which significantly impairs ingress or egress to the   Project, or (5) a material change in the configuration of the Project (including a material change   in the configuration of the improvements thereon) (each of the foregoing items (1) through (5), a   “Significant Change”).   (a) Significant Changes; Termination Right. In the event of a Significant   Change, Landlord will cause the Approved Plans to be modified to incorporate the Significant   Change and will submit such revised plans to Tenant for review. Tenant will have ten (10) days   from and after the date Tenant is provided with the revised Approved Plans to deliver a written   notice to Landlord which notice will either (i) approve the revisions, (ii) request reasonable   changes to the revised Approved Plans (based upon the Significant Change) or (iii) terminate this   Lease. Failure of Tenant to respond during such ten (10) day period, if such failure continues for   an additional three (3) days after written notice to Tenant of such failure, shall be deemed   Tenant’s approval of the revised Approved Plans. In the event Tenant reasonably objects to the   revised Approved Plans, Landlord will revise the Approved Plans in order to address Tenant’s   objections. Landlord shall then resubmit the further revised Approved Plans to Tenant for   approval, but the approval period with respect to any such revisions shall be five (5) business   days (and Tenant’s response will be limited to either approving such revisions or reasonably   disapproving such revisions due to a failure to address Tenant’s requested changes). Failure of   Tenant to respond within such five (5) business days, if such failure continues for an additional   three (3) days after written notice to Tenant of such failure, will be deemed approval of such   revised Approved Plans. If Tenant terminates this Lease as a result of a Significant Change in   the Approved Plans, this Lease will thereafter be null and void and of no further force or effect,   and Landlord will not be obligated to reimburse Tenant for any costs incurred by Tenant in   connection with this Lease. Any changes made to the Approved Plans pursuant to the foregoing    

 

10   process shall be referred to herein as “Approved Significant Changes.” After Tenant’s approval   or deemed approval of the revised Approved Plans, Landlord shall submit the revised Approved   Plans to the appropriate Governmental Authorities for approval. If the applicable Governmental   Authorities require modifications to the resubmitted Approved Plans, then Landlord will revise   the Approved Plans based upon the direction of such Governmental Authority (which change   will be a Permitted Plan Change); provided, however, if such revisions constitute a Significant   Change to the resubmitted Approved Plans, then Landlord shall resubmit the revised Approved   Plans to Tenant pursuant to the review process for a Significant Change set forth above. In the   event that Tenant does not exercise its right under subsection (iii) above in connection with such   Significant Change, then, after Tenant’s approval or deemed approval of the revised Approved   Plans, Landlord shall resubmit such revised Approved Plans to the Governmental Authority, and   this process will be repeated until the Approved Plans are approved by the Governmental   Authorities and all Entitlements are issued. Landlord will provide notice to Tenant of any   Permitted Plan Change to allow Tenant to conform the Tenant Improvements to such change.   Landlord will prepare the final construction drawings for the Project and Base Building Work in   accordance with the Approved Plans (the “Design Development Drawings”) and provide a copy   of such Design Development Drawings to Tenant, but Tenant will have no approval rights over   the Design Development Drawings so long as they are consistent with and logical evolutions of   the Approved Plans.   (b) Change Orders. Tenant may request changes to the Approved Plans or   Design Development Drawings in order to accommodate the Tenant Improvements by   submitting a detailed request for such change(s) to Landlord in writing (a “Change Order”);   provided that after Entitlements are issued for the Project and Base Building Work, Tenant will   not be permitted to request a Change Order which would require any change to the Entitlements   or could permit any Governmental Authority to revoke any Entitlement. As soon as reasonably   practicable after receipt of Tenant’s requested Change Order, Landlord will either approve or   deny the Change Order in its reasonable discretion. If Landlord approves the Change Order,   Landlord will provide Tenant with a breakdown of the total anticipated cost to implement such   Change Order and the time delay anticipated due to such Change Order (which time delay will be   a Tenant Delay (as defined in Section 9.3 of the Tenant Work Letter) (a “Change Order   Statement”). Tenant will have five (5) days after receipt of the Change Order Statement to   approve the Change Order Statement. In the event that Tenant approves the Change Order   Statement, Tenant shall be solely responsible for all costs incurred by Landlord in connection   with the Change Order and shall pay such costs to Landlord within thirty (30) days of receipt of   invoice from Landlord. Tenant’s failure to respond within such five (5) day period will be   deemed disapproval of such Change Order Statement, in which case the Change Order will be   deemed to have been rescinded and Landlord will not be obligated to make the requested change.   4.5. Budget/Additional TI Allowance. Landlord has established a budget for the Total   Project Costs (as defined in Exhibit E) which it believes will be reasonably required to complete   construction of the Project and Base Building Work for the Premises, which budget is   $163,881,400 (the “Project Cost Estimate”) as more particularly set forth on Exhibit D attached   hereto, and which Project Cost Estimate does not include the cost to construct PS1, as Tenant is   obligated to pay the costs of construction of PS1 separately pursuant to Section 40.5 below.    

 

11   Upon completion of the Design Development Drawings for the Project, Landlord will submit a   revised interim budget to Tenant for informational purposes only, which revised budget is   anticipated to be delivered on the date set forth as task 11 on Exhibit F attached hereto. Promptly   upon completion of the Project and Base Building Work (except PS1, which shall be excluded   from Project Costs for purposes of this Section 4.5), Landlord will calculate the actual total of all   Project Costs incurred plus the Land Value Contribution to obtain the actual Total Project Costs   (the “Final Budget”), which Final Budget will be delivered to Tenant together with a calculation   of the Additional TI Allowance (as defined below), if any. In the event the Final Budget is less   than the Project Cost Estimate, the difference shall be an addition to the TI Allowance payable to   Tenant pursuant to the Work Letter (the “Additional TI Allowance”). It is the intention of the   parties that the Additional TI Allowance will not include any amount due to the deferred   construction of PS1, as the Project Cost Estimate does not include the cost to construct PS1 and   Tenant is obligated to pay the costs of construction of PS1 pursuant to Section 40.5 below.   4.6. Schedule/Delays. Landlord will use commercially reasonable efforts to (a) cause   each Building to be delivered to Tenant in TI Ready Condition within eighteen (18) months after   the date of issuance of the building permit for such Building (subject to Tenant Delays and   Uncontrollable Delays), (b) meet the “Key Milestone Dates” set forth on Exhibit F, as such dates   may be extended by Tenant Delays and Uncontrollable Delays and (c) cause the Substantial   Completion Date to occur on or before the Phase 1 Rent Commencement Date (as to Building A   and Building D and the parking structure (“PS2”) described on Exhibit A as “Parking Structure   2”) and on or before the Phase 2 Commencement Date (as to Building B); provided, however,   except as otherwise expressly provided under Section 4.1 above or under this Section 4.6 below,   Tenant agrees that in the event any or all of the deadlines set forth in (a), (b) or (c) above are not   reached for any reason, then this Lease shall not be void or voidable and Landlord shall not be   liable to Tenant for any loss or damage resulting therefrom. In the event that Building A,   Building D and Building B are not in TI Ready Condition (as defined in the Work Letter) on or   before the date which is one hundred twenty (120) days after July 1, 2016 (as such July 1, 2016   date may be extended by Tenant Delays and Uncontrollable Delays (provided that Uncontrollable   Delays will not exceed 90 days for purposes of this Section 4.6) (“Outside Date”), then the sole   remedy of Tenant shall be a credit equal to one (1) day of free Base Rent (to be applied   commencing on the Phase 1 Rent Commencement Date) for each day beyond the Outside Date   that Building A, Building D and Building B are not in TI Ready Condition; provided that if such   delay exceeds sixty (60) days, then for each day of delay beyond sixty (60) days, Tenant will   receive two (2) days of free Base Rent (to be applied commencing on the day that is sixty-one   (61) days following the Phase 1 Rent Commencement Date) for each day of delay beyond sixty   (60) days. In the event that Building A, Building D and Building B are not in TI Ready   Condition on or before the date (“Outside Termination Date”) which is two hundred forty (240)   days after July 1, 2016 (as such July 1, 2016 date may be extended by Tenant Delays and   Uncontrollable Delays (provided that Uncontrollable Delays will not exceed 90 days for purposes   of this Section 4.6)), then the sole remedy of Tenant shall be the right to deliver a notice to   Landlord (the “Outside Date Termination Notice”) electing to terminate this Lease effective   upon receipt of the Outside Date Termination Notice by Landlord. The Outside Date   Termination Notice must be delivered by Tenant to Landlord, if at all, not earlier than the   Outside Termination Date and not later than five (5) business days after the Outside Termination    

 

12   Date. If Tenant delivers the Outside Date Termination Notice, this Lease shall terminate as of   the date of such notice, and Landlord will not be obligated to reimburse Tenant for any costs   incurred by Tenant in connection with this Lease.   4.7. Assignment of Warranties. Except for Landlord’s responsibility under Section   15.3 below, Landlord will not be responsible for any defects in the Project and Base Building   Work; provided that Landlord will obtain industry standard warranties relating to such Project   and Base Building Work (which warranties shall, with respect to any elements of the Project and   Base Building Work related to the roof membrane of a Building, be in effect for a minimum of   15 years following the date the applicable Building is in TI Ready Condition; and, as to the   warranty applicable to the glazing system, Landlord will use good faith efforts to obtain a 15 year   warranty, including purchasing such warranty if available from the applicable contractor at a   commercially reasonable price) and Landlord will assign to Tenant all warranties obtained by   Landlord in connection with the non-structural portions of the Project and Base Building Work   (but only to the extent such warranties are assignable). Landlord will reasonably cooperate with   Tenant to enforce such warranties; provided that Landlord will not have any obligation to initiate   legal proceedings or perform or pay the cost to perform any work which any contractor fails to   perform. Any assignment of such warranties will provide that assignment of the warranty to   Tenant will not affect Landlord’s rights pursuant to such warranties, and Landlord reserves the   right to enforce such warranties directly against the applicable contractor, at its sole option. In   the event any warranties cannot be assigned to Tenant, Landlord will enforce such warranties   against the applicable contractor on Tenant’s behalf.   4.8. Confirmation of Dates. Tenant shall execute and deliver to Landlord any factually   correct written acknowledgments of the Rent Commencement Date(s) (as defined below) and the   Term Expiration Date for the applicable portion of the Premises within ten (10) business days of   Landlord’s request (provided, however, that Landlord shall not be permitted to request any such   acknowledgement until after the applicable Rent Commencement Date), which   acknowledgement shall be in the form attached as Exhibit J hereto. Failure to execute and   deliver such acknowledgment, however, shall not affect any Rent Commencement Date(s) 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 Premises required for the Permitted   Use by Tenant shall not serve to extend any Rent Commencement Date(s).   5. Rent.   5.1. Base Rent. Tenant shall pay to Landlord as Base Rent for (a) Building A and   Building D, commencing on the Phase 1 Rent Commencement Date, and (b) Building B,   commencing on the Phase 2 Rent Commencement Date (as applicable, the “Rent   Commencement Date”), the Base Rent set forth in Section 2.3, subject to the rental adjustments   provided in Article 6 hereof and subject to the Building B Base Rent Abatement (as defined in   Section 5.5 below). Base Rent shall be paid in equal monthly installments in advance on the first   day of each and every calendar month during the Term. Beginning on the applicable Rent   Commencement Date, Tenant shall pay to Landlord an amount equal to the Base Rent, subject to   adjustments pursuant to Section 6 below without deduction, offset or prior notice or demand,   except as may be expressly provided by the terms of this Lease.    

 

13   5.2. Additional Rent. In addition to Base Rent, Tenant shall pay to Landlord as   additional rent (“Additional Rent”) at times hereinafter specified in this Lease (a) any Early   Occupancy Additional Rent due pursuant to Section 2.3(c) above, (b) amounts related to   Operating Expenses, Insurance Expenses and Taxes (each as defined below), (c) the Property   Management Fee (as defined below) and (d) any other amounts that Tenant assumes or agrees to   pay under the provisions of this Lease that are owed to Landlord, including 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 any applicable notice and cure periods.   5.3. Payment of Rent. Base Rent and Additional Rent shall together be denominated   “Rent.” Rent shall be paid to Landlord, without abatement, deduction or offset (except as may be   expressly provided by the terms of this Lease), in lawful money of the United States of America   at the office of Landlord as set forth in Section 2.8 or to such other person or at such other place   as Landlord may from time designate in writing. In the event the Term or any early occupancy   pursuant to Section 2.3(c) above 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 the number of days in the month and shall be paid at the then-current rate for such   fractional month.   5.4. Rental Obligation. Except as expressly provided in this Lease, Tenant’s   obligation to pay Rent shall not be discharged or otherwise affected by (a) any Applicable Laws   now or hereafter applicable to the Premises, (b) any other restriction on Tenant’s use not   attributable to a breach of this Lease by Landlord (Section 28.13 below shall govern any breach   by Landlord) or (c) any other occurrence; and, except as expressly provided in this Lease, Tenant   waives all rights now or hereafter existing to terminate or cancel this Lease or quit or surrender   the Premises or any part thereof, or to assert any defense in the nature of constructive eviction to   any action seeking to recover rent. For avoidance of doubt, Landlord and Tenant agree that, for   purposes of this Section 5.4, the phrase “except as expressly provided in this Lease” means that   in the event of any conflict between this Section 5.4 and any other express provision of this   Lease, the express provision of this Lease shall control.   5.5. Base Rent Abatement. Tenant’s obligations with respect to Base Rent as to   Building B only (and not as to any other Building) shall be subject to abatement in the amount of   Five Million Two Hundred Fifty-Seven Thousand Six Hundred Dollars ($5,257,600) (the   "Building B Base Rent Abatement"), which Building B Base Rent Abatement shall be amortized   and applied in equal installments over months one (1) through twelve (12) of the initial Term   with respect to Building B commencing on the Phase 2 Rent Commencement Date; provided,   however, that Tenant shall not be entitled to any portion of the Building B Base Rent Abatement   accruing during a period of time in which Tenant is in monetary Default or material non-   monetary Default under this Lease. Tenant acknowledges and agrees that the Building B Base   Rent Abatement has been granted to Tenant as additional consideration for entering into this   Lease and for agreeing to pay the Rent and perform all of the obligations of Tenant under this   Lease (including, without limitation, Tenant’s obligations with respect to PS1 under Section 40.5   below). The Building B Base Rent Abatement shall not work to abate or reduce Tenant’s    

 

14   obligations under this Lease with respect to Additional Rent for Building B including (without   limitation) Tenant’s obligations with respect to Taxes, Insurance and Operating Expenses with   respect to Building B; provided, however, that the Property Management Fee for months one (1)   through twelve (12) of the initial Term with respect to Building B shall be adjusted pursuant to   Article 8 below.   6. Rent Adjustments. Base Rent for the Premises shall be subject to an upward adjustment   of five percent (5%) of the then-current Base Rent every twenty four (24) months during the   Term. As to Building A and Building D, the first such adjustment shall become effective   commencing on the second (2nd) annual anniversary of the Phase 1 Rent Commencement Date,   and subsequent adjustments shall become effective on every other successive annual anniversary   for so long as this Lease continues in effect with respect to Building A and Building D. As to   Building B, the first such adjustment shall become effective commencing on the second (2nd)   annual anniversary of the Phase 2 Rent Commencement Date, and subsequent adjustments shall   become effective on every other successive annual anniversary for so long as this Lease   continues in effect with respect to Building B. In the event Tenant exercises the Land Rental   Option (as defined in Section 40.1 below), then the Expansion Land Rent will be subject to an   upward adjustment of five percent (5%) of the then-current Expansion Land Rent every twenty   four (24) months during the term of the Land Rental Option commencing on the first day of the   sixty-first (61st) month following the Phase 1 Rent Commencement Date, and subsequent   adjustments shall become effective on every other successive annual anniversary for so long as   the Land Rental Option continues in effect. The Project Costs Component (as defined in Section   40 below) of Base Rent for the Expansion Space will be subject to an upward adjustment of five   percent (5%) of the then-current Project Costs Component of Base Rent every twenty four (24)   months during the Term commencing on the second (2nd) annual anniversary of the Expansion   Space Commencement Date (as defined below), and subsequent adjustments of the Project Costs   Component shall become effective on every other successive annual anniversary for so long as   this Lease continues in effect with respect to the Expansion Space, and the Land Rent   Component (as defined below) of Base Rent for the Expansion Space shall be subject to an   upward adjustment of five percent (5%) of the then-current Land Rent Component of Base Rent   every twenty four (24) months commencing on the first day of the sixty-first (61st) month   following the Phase 1 Rent Commencement Date (the “Initial Land Rent Component Adjustment   Date”) regardless of when payment of the Land Rent Component commences (i.e., adjustments   of the Land Rent Component shall commence on the Initial Land Rent Component Adjustment   Date even if Tenant’s payment obligations with respect to the Land Rent Component do not   begin until after the Initial Land Rent Component Adjustment Date), and subsequent adjustments   shall become effective on every other successive annual anniversary for so long as this Lease   continues in effect with respect to the Expansion Space.   7. Taxes.   7.1. Commencing on the earlier of (i) the Phase 1 Rent Commencement Date or (ii)   the first day of any early occupancy pursuant to Section 2.3(c) above, and continuing for each 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    

 

15   shall pay to Landlord the amount of all Taxes levied and assessed for any such year as follows:   Tenant shall pay 100% of the portion of Taxes attributable to improvements on the Property, plus   a pro rata portion of Taxes attributable to the land within the Project (which pro rata portion will   be calculated based upon a fraction, the numerator of which will be (a) prior to the Phase 1 Rent   Commencement Date, the combined Rentable Area of any Phase 1 Early Occupancy Space   occupied under Section 2.3(c)(ii) above, (b) after the Phase 1 Rent Commencement Date but   prior to the Phase 2 Rent Commencement Date, the combined Rentable Area of Building A,   Building D and any Phase 2 Early Occupancy Space, and (c) at any time after the Phase 2 Rent   Commencement Date, all Rentable Area leased by Tenant, and the denominator of which will be   total Rentable Area of the Project including, without limitation, the Expansion Space). “Taxes”   means all government impositions, including property tax costs consisting of real and personal   property taxes and assessments (including amounts due under any improvement bond upon the   Premises or any portion thereof) or assessments in lieu thereof imposed by any federal, state,   regional, local or municipal governmental authority, agency or subdivision (each, a   “Governmental Authority”); taxes on or measured by gross rentals received from the rental of   space at the Premises; taxes based on the Rentable Area of the Premises or any portion thereof,   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 Applicable Laws or interpretations thereof,   promulgated by any Governmental Authority in connection with the use or occupancy of the   Premises or the parking facilities serving the Premises; taxes on this transaction or any document   to which Tenant is a party creating or transferring an interest in the Premises; any fee for a   business license to operate an office building; and any expenses, including the reasonable cost of   attorneys or experts, reasonably incurred by Landlord in seeking reduction by the taxing authority   of the applicable taxes, less tax refunds obtained as a result of an application for review thereof.   Notwithstanding anything in this Lease to the contrary, Taxes shall not include any federal or   state income taxes, net income, franchise, capital stock, estate or inheritance and succession   taxes, or taxes that are the personal obligation of Tenant. 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 7 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 fifteen (15) 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.   (a) Notwithstanding anything to the contrary contained in this Lease, in the   event that, at any time during the first five (5) years of the initial Term, any sale, refinancing, or   change in ownership of the Project is consummated, and as a result thereof, and to the extent that   in connection therewith, the Project is reassessed (the "Reassessment") for real estate tax    

 

16   purposes by the appropriate governmental authority pursuant to the terms of Proposition 13, then   the following provisions shall apply to such Reassessment of the Project.   (b) For purposes of this Section 7.1, the term "Tax Increase" shall mean that   portion of the Taxes, as calculated immediately following the Reassessment, which is attributable   solely to the Reassessment. Accordingly, the term Tax Increase shall not include any portion of   the Taxes, as calculated immediately following the Reassessment, which (i) is attributable to the   initial assessment of the value of the Project, the Buildings or the tenant improvements located in   the Project, (ii) is attributable to assessments which were pending immediately prior to the   Reassessment which assessments were conducted during, and included in, such Reassessment, or   which assessments were otherwise rendered unnecessary following the Reassessment, (iii) is   attributable to improvements (including, without limitation, due to construction of Building A,   Building D, Building B and Building C as applicable) constructed on the Project and not due to a   change in ownership, or (iv) is attributable to the annual inflationary increase of real estate taxes   permitted to be assessed annually under Proposition 13. During the first five (5) years of the   initial Term, any Tax Increase shall be excluded from Taxes. After the first five (5) years of the   initial Term, any Tax Increase shall be included in Taxes.   (c) The amount of Taxes which Tenant is not obligated to pay or will not be   obligated to pay during the first five (5) years of the initial Term in connection with a particular   Reassessment pursuant to the terms of this Section 7.1, shall be referred to as a "Proposition 13   Protection Amount." At any time during the Term, upon notice to Tenant, Landlord shall have   the right to purchase the Proposition 13 Protection Amount relating to the applicable   Reassessment (the "Applicable Reassessment"), by paying to Tenant an amount equal to the   Proposition 13 Purchase Price, as that term is defined below, provided that the right of any   successor of Landlord to exercise its right of repurchase hereunder shall not apply to any   Reassessment which results from the event pursuant to which such successor of Landlord became   the Landlord under this Lease. As used herein, "Proposition 13 Purchase Price" shall mean the   present value of the Proposition 13 Protection Amount remaining during the Term, as of the date   of payment of the Proposition 13 Purchase Price by Landlord. Such present value shall be   calculated (i) by using the portion of the Proposition 13 Protection Amount attributable to each   remaining year during the Term (as though the portion of such Proposition 13 Protection Amount   benefited Tenant at the end of each such year), as the amounts to be discounted, and (ii) by using   discount rates for each amount to be discounted equal to the prime interest rate, as reported by   Wells Fargo Bank, N.A. (or if Wells Fargo ceases to exist to publish such a rate, the largest   federally chartered banking institution in California) as of the date of Landlord's exercise of its   right to purchase, as set forth in this Section 7.1(c). Upon such payment of the Proposition 13   Purchase Price, the provisions of Subsection 7.1(b) of this Lease shall not apply to any Tax   Increase attributable to the Applicable Reassessment. If Landlord estimates the Proposition 13   Purchase Price because a Reassessment has not yet occurred, then when such Reassessment   occurs, if Landlord has underestimated the Proposition 13 Purchase Price, then upon notice by   Landlord to Tenant, Tenant's Base Rent next due shall be credited with the amount of such   underestimation, and if Landlord overestimates the Proposition 13 Purchase Price, then upon   notice by Landlord to Tenant, Base Rent next due shall be increased by the amount of the   overestimation.    

 

17   7.2. 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.   7.3. If Tenant obtains a refund as the result of Tenant's protest or contest, and subject   to Tenant's obligation to pay Landlord's actual costs (if any) associated therewith, Tenant shall be   entitled to such refund to the extent it relates to the Premises during the Term.   7.4. Tenant shall be solely responsible for the payment of any and all taxes levied upon   (a) personal property and trade fixtures located at the Premises and (b) any gross or net receipts   of or sales by Tenant, and shall pay the same at least ten (10) days prior to delinquency.   7.5. To the extent Landlord is required by a lender, Tenant shall timely pay all tax and   insurance impound payments due on the Premises.   7.6. Tenant shall not be responsible for Taxes attributable to the time period prior to   the Phase 1 Rent Commencement Date except to the extent required under Section 2.3(c) above.   Tenant’s responsibility for Taxes shall continue to the latest of (a) the date of termination of the   Lease and (b) the date Tenant has fully vacated the Premises (provided that the foregoing will not   limit Landlord’s remedies in the event of a default by Tenant hereunder).   7.7. 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.   8. 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 (as defined below). The   “Property Management Fee” shall equal one percent (1%) of Base Rent due from Tenant (subject   to increase pursuant to Exhibit G). Tenant shall pay the Property Management Fee with respect   to the entire Term, including any extensions thereof or any holdover periods, regardless of   whether Tenant’s obligation to pay Base Rent, Operating Expenses or any other Rent with   respect to any such period or portion thereof has been abated and, for any period of time in which    

 

18   Base Rent is abated, the Property Management Fee will be calculated as if Tenant were paying   the amount of Base Rent that is being abated (provided, however, that, for purposes of   calculating the Property Management Fee for months one (1) through twelve (12) of the initial   Term with respect to Building B, the dollar amount of Base Rent actually abated in connection   with the Building B Base Rent Abatement pursuant to Section 5.5 of this Lease shall be deducted   from Base Rent for Building B).   9. Use.   9.1. Tenant shall not use the Premises, or permit or suffer the Premises to be used, for   any purpose other than the Permitted Use without Landlord’s prior written consent, which   consent Landlord may withhold in its reasonable discretion.   9.2. Tenant shall not use or occupy the Premises in violation of Applicable Laws;   zoning ordinances; or the certificate of occupancy issued for the Premises or any portion thereof,   and shall, upon five (5) days’ written notice from Landlord, discontinue any use of the Premises   that is declared or claimed by any Governmental Authority having jurisdiction to be a violation   of any of the above. 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   Premises, impose any duty upon the Premises or with respect to the use or occupation thereof.   9.3. 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   Premises or any portion thereof, and shall comply with all rules, orders, regulations and   requirements of the insurers of the Premises or any portion thereof, 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.   9.4. So long as Tenant or a Tenant’s Affiliate (as defined below) is the sole tenant of   the Project, Tenant shall, at Tenant's sole cost and expense, have the exclusive right to install the   maximum amount of any legally permitted signage in the Project ("Signage"), which   Signage shall be subject to compliance with all Applicable Laws. In the event Tenant or a   Tenant’s Affiliate is not the sole tenant of the Project, Tenant will have the right to install   and/or maintain its pro-rata portion of the legally-permissible signage for the Project, and   will remove any Signage installed in excess of such pro-rata allotment, as designated and   directed by Landlord. Such Signage may include (a) building top signage on any Building at   least fifty percent (50%) leased by Tenant (provided that Tenant’s building top signage   rights will not be exclusive for any Building not 100% leased by Tenant or a Tenant’s   Affiliate), (b) monument signage near the entrance to each Building leased by Tenant   (including Building D, if applicable), and (c) signage at each entrance to the Project. Tenant   shall keep the Signage in good condition and repair. The size, design, and other physical   aspects of any sign shall be subject to any covenants, conditions, or restrictions encumbering   the Premises 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 upon Landlord’s direction if Tenant ceases to be the sole    

 

19   tenant of the Project), and/or fails to repair any damage to the Buildings, Project or Project   monument signs 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.   9.5. Tenant may only place equipment within the Premises with floor loading   consistent with the Building’s structural design unless Tenant obtains Landlord’s prior written   approval and pays for any structural support necessary to support such additional loads. Tenant   may place such equipment only in a location designed to carry the weight of such equipment.   9.6. Tenant shall not (a) use or allow the Premises to be used for unlawful purposes or   any use which would reasonably be expected to offend an institutional landlord of comparable   first class laboratory properties in the vicinity of the Project or (b) cause, maintain or permit any   nuisance or waste in, on or about the Premises.   9.7. 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 any Governmental Authorities (including, without limitation, all state, county,   municipal, and federal governments and their departments, bureaus, boards and officials) relating   to the Premises, including, without limitation the requirements of the Americans with Disabilities   Act of 1990 and regulations adopted thereunder (the “ADA”). Notwithstanding the foregoing,   Landlord will be responsible for constructing the Project and Base Building Work in compliance   with Applicable Laws (on an unoccupied basis and without regard for Tenant’s intended use or   the Tenant Improvements), including the ADA, in effect as of the date that Landlord’s architect   provides a certified affidavit that the Project and Base Building Work has been completed by   Landlord in accordance with the Approved Plans. In the event of a breach of the foregoing   sentence by Landlord, as Tenant’s sole remedy (enforceable in accordance with Section 15.4 as   applicable), Landlord will, at Landlord’s sole cost and expense, correct any aspect of the Project   and Base Building Work which was not constructed in compliance with Applicable Laws (on an   unoccupied basis and without regard for Tenant’s intended use or the Tenant Improvements) in   effect at the time that Landlord’s architect provided the certified affidavit referenced in the   immediately preceding grammatical sentence. In no event will Tenant be required to make any   improvements, alterations repairs or replacements to comply with this Section 9.7 unless the   applicable Governmental Authority requires that such work be performed (i.e., if an aspect of the   Premises is not required to be brought up to current code due to “grandfathering” provisions,   Tenant will not be required to upgrade such item unless and until it is required to do so by a   Governmental Authority). Tenant shall indemnify, save, defend (at Landlord’s option and with   counsel reasonably acceptable to Landlord) and hold Landlord and its affiliates, employees,    

 

20   agents and contractors; and any lender, mortgagee or beneficiary (each, a “Lender” and,   collectively with Landlord and its affiliates, employees, agents and contractors, the “Landlord   Indemnitees”) harmless from and against any demands, claims, liabilities, losses, costs, expenses,   actions, causes of action, damages, suits or judgments, and all reasonable expenses (including   reasonable attorneys’ fees, charges and disbursements, regardless of whether the applicable   demand, claim, action, cause of action or suit is voluntarily withdrawn or dismissed) incurred in   investigating or resisting the same (collectively, “Claims”) arising out of any such failure of the   Premises to comply with Applicable Laws. The Premises have not undergone inspection by a   Certified Access Specialist (as defined in California Civil Code Section 55.52). The provisions   of this Section shall survive the expiration or earlier termination of this Lease.   10. Rules and Regulations, CC&Rs and Parking Facilities.   10.1. Tenant shall faithfully observe and comply with the rules and regulations adopted   by Landlord and attached hereto as Exhibit K, together with such other reasonable and   nondiscriminatory rules and regulations as are hereafter promulgated by Landlord in its   reasonable discretion (the “Rules and Regulations”). In the event of a conflict between the Rules   and Regulations and the terms and conditions of this Lease, the terms and conditions of this   Lease shall control.   10.2. This Lease is subject to any recorded covenants, conditions or restrictions on the   Property or Premises as the same may be amended, amended and restated, supplemented or   otherwise modified from time to time (the “CC&Rs”); provided that any such amendments,   restatements, supplements or modifications do not materially modify Tenant’s rights or   obligations hereunder nor materially increase Tenant’s monetary obligations under this Lease.   Any future CC&Rs or modifications to existing CC&Rs which would have a material impact on   Tenant’s rights or obligations hereunder will be subject to Tenant’s reasonable approval (which   approval will be given or withheld within ten (10) business days after request) so long as Tenant   or Tenant’s Affiliate occupies at least seventy five percent (75%) of the Rentable Area within the   Project. Tenant shall comply with the CC&Rs (except to the extent any such future CC&Rs or   modification to existing CC&R is required by Applicable Laws or any Governmental Authority).   10.3. Tenant shall have the right to install any security systems (including cameras)   inside and outside the Premises subject to Landlord’s reasonable prior written consent and the   terms and conditions of Article 14 below. In the event the Project becomes a multi-tenant   project, Landlord may require that Tenant make reasonable adjustments and modifications to the   security systems to the extent reasonably deemed necessary to accommodate a multi-tenant   project.   10.4. For so long as Tenant or any Tenant’s Affiliate is the sole tenant of the Project,   Tenant shall have the right to use all parking structures and parking facilities serving the Project   during the Term at no additional cost, which parking will contain not less than 1,120 parking   spaces for Building A, Building D and Building B. In the event Tenant or any Tenant’s Affiliate   is not the sole tenant of the Project, Tenant will at all times have the right to use its pro rata share   of the parking spaces serving the Project at locations designated by Landlord within the Project   and subject to the terms and conditions of Exhibit G; provided, however, that (a) Tenant shall be    

 

21   permitted to designate up to twenty percent (20%) of its pro rata share of parking spaces as   reserved parking spaces (with Landlord reasonably designating the precise location of such   reserved parking spaces), and (b) Landlord shall be obligated to maintain at least 1,120 total   parking spaces at the Project for the collective use of occupants of Building A, Building D and   Building B. Landlord will permit Tenant, subject to Tenant’s compliance with Section 14 of this   Lease, to install security gates (including security guards), card key access control, parking   control arms or similar parking security measures, subject to Landlord’s reasonable approval of   such measures. In the event Tenant or any Tenant’s Affiliate ceases to be the sole tenant of the   Project, Landlord will have the option to (i) require Tenant to remove any security measures that   Landlord reasonably determines would injure or disturb other tenants of the Project; (ii) modify   such measures in order to allow for shared access to the parking structures and facilities by other   tenants and their visitors; and/or (iii) require Tenant to remove any “reserved” or similar parking   designations which it has marked on any parking stalls or portions of the Project parking   facilities (subject to Tenant’s rights set forth in subsection 10.4(a) above).   11. Control by Landlord.   11.1. Landlord reserves full control over the Project to the extent not inconsistent with   Tenant’s enjoyment of the same as provided by this Lease. Notwithstanding the foregoing, only   in the event the Project ceases to be leased solely by Tenant or any Tenant’s Affiliate, Landlord   shall have the right to subdivide the Project; convert portions of the Project to condominium   units; change the size of the Project by selling all or a portion of the Project or adding real   property and any improvements thereon to the Project; provided, however, that such rights shall   be exercised in a way that does not unreasonably and adversely (in light of the commercially   reasonable expectations of a sophisticated landlord and tenant in the context of a lease   transaction similar to this Lease) affect Tenant’s beneficial use and occupancy of the Premises,   including the Permitted Use and Tenant’s access to the Premises and Tenant’s parking rights   hereunder. In any event, Landlord reserves the right to grant easements and licenses to third   parties; and maintain or establish ownership of the Buildings separate from fee title to the   Property; provided, however, that such rights shall be exercised in a way that does not   unreasonably and adversely (in light of the commercially reasonable expectations of a   sophisticated landlord and tenant in the context of a lease transaction similar to this Lease) affect   Tenant’s beneficial use and occupancy of the Premises, including the Permitted Use and Tenant’s   access to the Premises and Tenant’s parking rights hereunder.   11.2. Tenant shall, at Landlord’s request, promptly execute such further documents as   may be reasonably appropriate to assist Landlord in the performance of its obligations hereunder;   provided that Tenant need not execute any document that creates additional liability for Tenant or   that unreasonably and adversely (in light of the commercially reasonable expectations of a   sophisticated landlord and tenant in the context of a lease transaction similar to this Lease)   affects Tenant’s quiet enjoyment and beneficial use of the Premises (including access and   parking rights) as provided for in this Lease and Landlord will reimburse Tenant with reasonable   out of pocket costs incurred by Tenant in connection with the review and execution of any such   documents.    

 

22   11.3. Subject to compliance with Tenant’s commercially reasonable security   requirements (including the requirement that Landlord be escorted by a representative of Tenant),   Landlord may, at any and all reasonable times during non-business hours (or during business   hours, if (a) with respect to Subsections 11.3(v) through 11.3(y), Tenant so requests, and (b) with   respect to Subsection 11.3(z), if Landlord so requests), and upon forty-eight (48) hours’ prior   written notice (provided that no time restrictions shall apply or advance notice be required if an   emergency (which involves an imminent threat of personal injury or property damage)   necessitates immediate entry), enter the Premises to (v) inspect the same and to determine   whether Tenant is in compliance with its obligations hereunder, (w) supply any service Landlord   is required to provide hereunder, (x) post notices of nonresponsibility, (y) access the telephone   equipment, electrical substation and fire risers and (z) show the Premises to prospective tenants   during the final year of the Term and current and prospective purchasers and lenders at any time   during the Term. In no event shall Tenant’s Rent abate as a result of Landlord’s activities   pursuant to this Section; 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   (which involves an imminent threat of personal injury or property damage) 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.   12. Quiet Enjoyment. Landlord covenants that Tenant, upon paying the Rent and performing   its obligations contained in this Lease, may peacefully and quietly have, hold and enjoy the   Premises (including all appurtenant rights expressly set forth in this Lease), free from any claim   by Landlord or persons claiming under Landlord, but subject to all of the terms and provisions   hereof, provisions of Applicable Laws and rights of record to which this Lease is or may become   subordinate. This covenant is in lieu of any other quiet enjoyment covenant, either express or   implied. Notwithstanding the foregoing, and subject to Section 13.9 below, to the extent that   Landlord uses commercially reasonable efforts to minimize any interference that any   construction at the Project may have on Tenant's use and quiet enjoyment of the Premises for   Tenant's normal business operations, Tenant hereby (a) accepts any and all typical   inconveniences associated with any such construction (based on the scope of construction   being undertaken), including, any noise, paint, fumes, dust, debris, obstruction of access   (including any temporary obstruction caused by the erection of scaffolding, barricades or other   reasonably necessary structures on the Property), or any other inconvenience caused by the   construction, (b) 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 any construction at the Project, and (c) agrees   that the performance of construction shall not constitute a constructive eviction nor shall   Tenant be entitled to an abatement of Rent; provided, however, that the terms, conditions and   provisions of this Section 12 shall be subject to the terms, conditions and provisions of Section   13.9 below.    

 

23   13. Utilities and Services.   13.1. Tenant shall be responsible for contracting directly for janitorial services for the   Premises at least 5 days per week, consistent with similar services in comparable Class A   office/lab buildings in the vicinity of the Premises.   13.2. Tenant shall, at Tenant’s sole cost and expense, procure and maintain contracts,   with copies of the same and of any related records furnished promptly to Landlord after   execution thereof, in customary form and substance for, and with contractors and/or Tenant’s   employees specializing and experienced in, the maintenance of the following equipment and   improvements, if any, if and when installed on the Premises: (a) heating, ventilating and air   conditioning (“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   Building 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 13.2   within five (5) business days 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   service contracts, and if Landlord so elects, Tenant shall reimburse Landlord, upon demand, for   the actual documented costs thereof.   13.3. Commencing on the date (the “Operating Expense Start Date”) that is earlier of   (a) the Phase 1 Rent Commencement Date, or (b) the first day of any early occupancy pursuant to   Section 2.3(c) above, and continuing for the balance of the Term, Tenant shall pay to Landlord   the amount of all Insurance Expenses and Operating Expenses (subject to the terms and   conditions of this Section). Landlord shall give Tenant a written estimate for each calendar year   of the cost of (i) utilities provided to the Project, to the extent not separately metered or billed   directly to Tenant, (ii) any other costs (excluding Taxes and Insurance Expenses) paid or incurred   by Landlord in connection with the operation or ownership of the Project or for which Tenant is   otherwise required to reimburse to Landlord pursuant to the terms of this Lease ((i) and (ii),   collectively, “Operating Expenses”), and (iii) insurance provided by Landlord (“Insurance   Expenses”).   13.3.1 For purposes of calculating Operating Expenses payable by Tenant, (a)   Operating Expenses will not include any of the items excluded from Operating Expenses in   Exhibit G attached hereto, and (b) commencing on the Operating Expense Start Date but prior to   the Phase 2 Rent Commencement Date, Operating Expenses shall include 100% of all variable   Operating Expenses but shall only include a pro rata portion of those Operating Expenses   reasonably determined by Landlord to be fixed costs (i.e., Operating Expenses that do not vary   depending on occupancy) (such Operating Expenses, “Fixed Operating Expenses”), which pro   rata portion will be calculated based on a fraction, the numerator of which will be (i) prior to the   Phase 1 Rent Commencement Date, the combined Rentable Area of any Phase 1 Early   Occupancy Space occupied under Section 2.3(c)(ii) above, and (ii) after the Phase 1 Rent   Commencement Date but prior to the Phase 2 Rent Commencement Date, the combined   Rentable Area of Building A, Building D and any Phase 2 Early Occupancy Space; and in either   case, the denominator being the total Rentable Area of Building A, Building B and Building D.    

 

24   For avoidance of doubt, from and after the Phase 2 Rent Commencement Date, Fixed Operating   Expenses shall no longer be pro-rated and Tenant shall be responsible for 100% of Operating   Expenses.   13.3.2 For purposes of calculating Insurance Expenses payable by Tenant, Tenant   shall pay 100% of the portion of Insurance Expenses attributable to improvements on the   Property (as reasonably determined by Landlord), plus a pro rata portion of Insurance Expenses   attributable to the land within the Project (which pro rata portion will be calculated based upon a   fraction, the numerator of which will be (a) prior to the Phase 1 Rent Commencement Date, the   combined Rentable Area of any Phase 1 Early Occupancy Space occupied under Section   2.3(c)(ii) above, (b) after the Phase 1 Rent Commencement Date but prior to the Phase 2 Rent   Commencement Date, the combined Rentable Area of Building A, Building D and any Phase 2   Early Occupancy Space, and (c) at any time after the Phase 2 Rent Commencement Date, all   Rentable Area leased by Tenant, and the denominator of which will be total Rentable Area of the   Project including, without limitation, the Expansion Space). Tenant shall pay such estimated   amount to Landlord in advance in equal monthly installments.   13.3.3 Within ninety (90) days after the conclusion of each calendar year (or such   longer period as may be reasonably required by Landlord), Landlord shall furnish to Tenant a   statement showing in reasonable detail the actual Taxes, Insurance Expenses and any Operating   Expenses for the Project and any over or under payment of such costs by Tenant (the “Annual   Statement”). Any additional sum due from Tenant to Landlord shall be immediately due and   payable. If the amounts paid by Tenant pursuant to this Section 13.3 exceed Taxes, Insurance   Expenses and Operating Expenses for the previous calendar year, then Landlord shall credit the   difference against the estimates of Taxes, Insurance Expenses and Operating Expenses next due   and owing from Tenant; provided that, if the Term has expired, Landlord shall accompany the   Annual Statement with payment for the amount of such difference. Any amount due under this   Section for any period that is less than a full month shall be prorated for such fractional month on   the basis of the number of days in the month. Operating Expenses for the calendar year in which   Tenant’s obligation to share therein commences and for the calendar year in which such   obligation ceases shall be prorated on a basis reasonably determined by Landlord.   13.3.4 The Annual Statement shall be final and binding on Tenant unless Tenant   disputes such Annual Statement in accordance with this Section. In the event Tenant disputes   the amounts of Operating Expenses in any Annual Statement and/or the allocation of   Operating Expenses for the particular calendar year delivered by Landlord to Tenant and   Tenant is not in monetary Default or material non-monetary 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 Operating   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 and/or allocation of the Operating 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    

 

25   within one hundred 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, 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 reasonably approved by Landlord) 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 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 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,   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, 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).    

 

26   13.4. Commencing as of the Term Commencement Date, Tenant shall make all   arrangements for and pay for all water, electricity, air, sewer, refuse, gas, heat, light, power,   telephone service and any other service or utility Tenant required at the Premises. For any   Project-wide utilities, for purposes of allocating such costs to the Premises, Landlord may base   its bills for utilities on reasonable estimates; provided that Landlord adjusts such billings   promptly thereafter to reflect the actual cost as allocated by Landlord of providing utilities to the   Premises.   13.5. Except as provided in Section 13.9 below, Landlord shall not be liable for, nor   shall any eviction of Tenant result from, the failure to furnish any utility or service (and in no   event will Tenant have any right to terminate this Lease due to such failure), whether or not such   failure is caused by accidents; breakage; casualties (to the extent not caused by the party claiming   Force Majeure); Severe Weather Conditions (as defined below); physical natural disasters (but   excluding weather conditions that are not Severe Weather Conditions); strikes, lockouts or other   labor disturbances or labor disputes (other than labor disturbances and labor disputes resulting   solely from the acts or omissions of the party claiming Force Majeure); acts of terrorism; riots or   civil disturbances; wars or insurrections; shortages of materials (which shortages are not unique   to the party claiming Force Majeure); government regulations, moratoria or other governmental   actions, inactions or delays; failures by third parties to deliver gas, oil or another suitable fuel   supply, or inability of the party claiming Force Majeure, by exercise of reasonable diligence, to   obtain gas, oil or another suitable fuel; or other causes beyond the reasonable control of the party   claiming that Force Majeure has occurred (collectively, “Force Majeure”). In the event Tenant is   prevented from performing its obligations hereunder as a result of a Force Majeure, such   performance will be excused during such Force Majeure, and if this Lease specifies a time period   for Tenant’s performance, such time period will be extended by the number of days of such Force   Majeure; provided, however, that this Section 13.5 is not intended to, and shall not excuse   Tenant’s obligations with respect to any payment of Rent or extend the time period for the   payment of any Rent or other monetary amounts due from Tenant pursuant to this Lease.   “Severe Weather Conditions” means weather conditions that are materially worse than those that   reasonably would be anticipated for the Property at the applicable time based on historic   meteorological records.   13.6. Tenant shall pay for, prior to delinquency of payment therefor, any utilities and   services that may be furnished to the Premises during or, if Tenant occupies the Premises after   the expiration or earlier termination of the Term, after the Term. Tenant shall not use the   Premises in a manner that would increase the amount of gas, electricity or water beyond the   existing capacity of the Premises, unless Tenant agrees, at Tenant’s sole cost, to upgrade the   capacity of the applicable Building (as an Alteration pursuant to Article 14 below and subject to   Tenant obtaining all necessary permits and approvals for such upgrades) subject to Landlord’s   approval of all plans and specifications for such capacity upgrade.   13.7. Tenant will be permitted to install emergency backup generators in locations   designated by Landlord for each of Building A, Building B and Building D (and if leased by   Tenant pursuant to the Expansion Option, Building C) and to connect such generators to the   applicable Building’s emergency electrical panel (collectively, the “Generator”). Tenant shall    

 

27   maintain, repair and (if necessary) replace the Generator at its sole cost and expense. The terms   and conditions of this Lease, including Tenant’s insurance and indemnity obligations, shall apply   to such Generators which shall be a part of the Premises for such purposes. Tenant will not   install any underground fuel storage tanks and any Hazardous materials used in connection with   such Generators will be subject to the terms and conditions of this Lease, including all surrender   obligations. In no event shall Landlord have any liability to Tenant in connection with the   Generator or its failure to operate in an emergency situation.   13.8. For any utilities serving the Premises for which Tenant is billed directly by such   utility provider, Tenant agrees to furnish to Landlord any utility usage information required for   Landlord to comply with Applicable Laws, including, if required for Landlord to comply with   any Applicable Law, authorization to allow Landlord to access Tenant’s usage information   necessary for Landlord to complete an ENERGY STAR® Statement of Performance (or similar   comprehensive utility usage report) and any other information reasonably requested by Landlord.   Tenant agrees at all times to cooperate fully with Landlord and to abide by all reasonable rules   established by Landlord in order to comply with the requirements of utility suppliers and   governmental agencies regulating the consumption of energy and/or other resources. Tenant   acknowledges that any utility information for the Premises may be shared with third parties as   required to comply with Applicable Laws. In addition to the foregoing, Tenant shall comply with   all Applicable Laws related to the disclosure and tracking of energy consumption at the Premises.   The provisions of this Section shall survive the expiration or earlier termination of this Lease.   13.9. Notwithstanding anything in this Lease to the contrary, if Tenant is prevented   from using, and does not use, the Premises or any portion thereof, as a result of (a) the   failure by Landlord to provide access to the Premises, or (b) the interruption of HVAC   service, water, sewer and/or electricity, where such failure or interruption is due to the   negligent acts or omissions of Landlord and not due to any matter beyond Landlord’s   reasonable control (any such stoppage to be known as an “Abatement Event”), then Tenant   shall give Landlord written notice of such Abatement Event, and if such Abatement Event   continues for 3 consecutive business days (including Saturday) after Landlord’s receipt of   any such notice, or occurs for 10 non-consecutive business days in a 12 month period   (provided Landlord is sent a notice (in either of such events, the “Eligibility Period”), then   the Base Rent and Tenant’s obligations with respect to Operating Expenses shall be abated   or reduced, as the case may be, after the expiration of the Eligibility Period for such time   that Tenant continues to be so prevented from using, and does not use, the Premises, or a   portion thereof, in the proportion that the Rentable Area of the portion of the Premises that   Tenant is prevented from using, and does not use (“Unusable Area”), bears to the total   Rentable Area of the Premises; provided, however, regardless who is managing the Project,   if Tenant is prevented from using, and does not use, the Unusable Area for a period of time   in excess of the Eligibility Period and 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 the expiration of the Eligibility Period   during which Tenant is so prevented from conducting its business and is not conducting its   business in any portion of the Premises, the Base Rent and Tenant’s obligations under this   Lease with respect to Operating Expenses for the entire Premises shall be abated for such    

 

28   time as Tenant continues to be so prevented from using, and does not use, the Premises.   Notwithstanding anything to the contrary contained herein, Tenant shall not be entitled to   any abatement of Rent provided for in this paragraph above and beyond the amount of rent   loss insurance proceeds paid to Landlord for the Abatement Event in question. If, however,   Tenant reoccupies any portion of the Premises during such period, the 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 Tenant reoccupies such portion of the Premises. Such right to abate   Base Rent and Tenant’s obligations under this Lease with respect to Operating Expenses   shall be Tenant’s sole and exclusive remedy at law or in equity for an Abatement Event and   Landlord shall not otherwise be liable for any loss or damage suffered or sustained by   Tenant resulting from any failure or cessation of services; provided, however, nothing in this   paragraph, shall impair Tenant’s rights under Sections 15.4 and 28.13 below. To the extent   Tenant is entitled to abatement under this paragraph because of an event covered by Sections   21 or 22 of this Lease, then those provisions of this Lease shall apply and not the provisions   of this paragraph. For the avoidance of any doubt, the Rent abatement being provided for   under this Lease shall not be considered a free rent period.   14. Alterations.   14.1. Tenant shall make no alterations, additions or improvements other than the Tenant   Improvements in or to the Premises or engage in any construction, demolition, reconstruction,   renovation or other work (whether major or minor) of any kind in, at or serving the Premises   (“Alterations”) without Landlord’s prior written approval, which approval Landlord shall not   unreasonably withhold, condition or delay; provided that it shall be reasonable to withhold   consent if the Alteration (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 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) will violate   any Applicable Law or increase insurance premiums (unless Tenant agrees to pay any such   premium increase); (v) violates any recorded document affecting the Premises (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,   certified stamped engineering drawings and calculations by Tenant’s engineer of record or   architect of record, if any (including, if applicable, connections to the Building’s structural   system, modifications to the Building’s envelope, non-structural penetrations in slabs or walls,   and modifications or tie-ins to life safety systems), if applicable, work contracts, requests for   laydown areas and such other information concerning the nature and cost of the Alterations as   Landlord may reasonably request. Notwithstanding the provisions of Section 14.1 above, 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; (b) the Acceptable Changes do not   impact the base building systems, (c) the Acceptable Changes do not adversely affect the value of   the improvements in the particular area (e.g., conversion of lab to office space) and (d) the cost of    

 

29   such Acceptable Changes do not exceed Five Hundred Thousand Dollars ($500,000) per   occurrence or an aggregate amount of Two Million Dollars ($2,000,000) in any twelve (12)   month period.   14.2. 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 Building, or interfere with the moving of Landlord’s equipment to or from the enclosures   containing such installations or facilities.   14.3. Tenant shall accomplish any work performed on the Premises in such a manner as   to permit any life safety systems to remain fully operable at all times (except for temporary   outages which are permitted and performed in accordance with Applicable Laws).   14.4. Tenant covenants and agrees that all work done by Tenant or Tenant’s contractors   shall be performed in full compliance with Applicable Laws, and Tenant will perform any legal   compliance work in the Project which is triggered by any Alterations performed by or on behalf   of Tenant. Tenant shall maintain copies of “as built” drawing print sets and electronic CADD   files on disc showing any changes in the Premises (but only if drawings and plans were required   by this Lease or were prepared in connection with any such Alterations). Tenant will provide   the same to Landlord upon request.   14.5. Before commencing any Alterations or Tenant Improvements, Tenant shall give   Landlord at least ten (10) days’ prior written notice of the proposed commencement of such   work.   14.6. Tenant shall repair any damage to the Premises caused by Tenant’s removal of   any property from the Premises. During any such restoration period, Tenant shall pay Rent to   Landlord as provided herein for the portion of the space occupied (or such larger portion of the   Premises to the extent Landlord’s ability to show the larger space to prospective tenants, lease the   space to prospective tenants or prepare the space for reletting is adversely affected) as if such   space were otherwise occupied by Tenant. The provisions of this Section shall survive the   expiration or earlier termination of this Lease.   14.7. Except for (a) those items listed on Exhibit H, (b) any other unattached trade   fixtures, equipment, stock, inventory, machines or other personal property of Tenant (which   shall remain the property of Tenant), and (c) any attached trade fixtures, equipment or   machinery that are proprietary or unique to Tenant’s business (as opposed to attached trade   fixtures, equipment or machinery commonly associated with laboratory buildings, such as lab   benches, fume hoods, sinks, etc.) ((a), (b), and (c), collectively, “Tenant’s Property”), all   Alterations, attached equipment, decorations, fixtures, trade fixtures, additions and   improvements attached to or built into the Premises, made by either of the Parties, including,   without limitation, all built-in 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   become the property of Landlord upon the expiration or earlier termination of the Term, and   shall remain upon and be surrendered with the Premises as a part thereof unless, prior to such    

 

30   construction or installation, Landlord notifies Tenant such installation or construction must be   removed upon the expiration or earlier termination of this Lease and the Premises restored to   the condition existing prior to such construction or installation. The Premises shall at all times   remain the property of Landlord and shall be surrendered to Landlord upon the expiration or   earlier termination of this Lease. Tenant shall, prior to the expiration or earlier termination of   this Lease, remove all of Tenant’s Property and repair any damage caused by such removal.   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 H.   14.8. If Tenant shall fail to remove any of its effects from the Premises 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.   14.9. Notwithstanding any other provision of this Article to the contrary, in no event   shall Tenant remove any improvement from the Premises as to which Landlord contributed   payment, and in no event shall Tenant remove any of the initial Tenant Improvements (or any   improvements installed to replace any initial Tenant Improvements with like-kind or reasonable   substitute improvements), without Landlord’s prior written consent, which consent Landlord may   withhold in its sole and absolute discretion, unless such improvement is considered Tenant’s   Property under Section 14.7 above.   14.10. Tenant shall pay to Landlord an amount equal to one percent (1%) of the hard cost   to Tenant of all Alterations (not to exceed Twenty Five Thousand Dollars ($25,000) for any one   (1) Alteration) to cover Landlord’s overhead and expenses for plan review, engineering review,   coordination, scheduling and supervision thereof (but only for Alterations requiring Landlord   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 Alterations, 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, or by   reason of inadequate clean-up.   14.11. Within sixty (60) days after final completion of the Tenant Improvements or any   Alterations performed by Tenant with respect to the Premises, Tenant shall submit to Landlord a   copy of the final permit (if applicable).   14.12. Tenant shall take, and shall cause its contractors to take, commercially reasonable   steps to protect the Premises during the performance of any Alterations or Tenant Improvements,    

 

31   including covering or temporarily removing any window coverings so as to guard against dust,   debris or damage.   14.13. Tenant shall require its contractors and subcontractors performing work on the   Premises to name Landlord and its affiliates and Lenders as additional insureds on their   respective insurance policies.   15. Repairs and Maintenance.   15.1. Subject to Section 15.3 below, Tenant, at its sole cost and expense, shall maintain   and keep the Premises, including without limitation all improvements thereon, and all   appurtenances thereto, including without limitation 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 Premises, in good condition and in a manner consistent with the Permitted   Use. Subject to Section 15.3 below, Tenant shall make all repairs, replacements and   improvements, including without limitation all structural repairs, HVAC, plumbing and electrical   repairs, replacements and improvements required, and shall keep the same free and clear from all   rubbish, debris. Tenant’s obligations hereunder may include capital expenditures and repairs   whose benefit may extend beyond the Term, and nothing herein will be construed to allow capital   repairs without consent of Landlord if required by Article 14. Tenant shall, within ten (10) days   after receipt of written notice from Landlord, provide to Landlord any maintenance records that   Landlord reasonably requests. All repairs made by Tenant shall be at least equal in quality to the   original work, and shall be made only by a qualified employee or a licensed contractor approved   in advance by Landlord (which shall not be unreasonably withheld, conditioned or delayed);   provided, however, that such contractor need not be approved by Landlord if the non-structural   alterations, repairs, additions or improvements to be performed do not exceed Five Hundred   Thousand Dollars ($500,000) per occurrence. Tenant shall not take or omit to take any action,   the taking or omission of which shall cause waste, damage or injury to the Premises. 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. As used in this Lease,   “Tenant’s Agents” shall be defined to include Tenant’s officers, employees, agents, contractors,   invitees, customers and subcontractors.   15.2. Subject to Section 15.3 below, Tenant shall maintain the lines designating the   parking spaces in good condition and paint the same as often as may be reasonably 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 Building as necessary to maintain them   in good condition; maintain the roof membrane 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.   15.3. Subject to Section 13.9 above, 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    

 

32   making of any repairs, alterations or improvements in or to any portion of the Premises, or in or   to improvements, fixtures, equipment and personal property therein. Landlord shall, at   Landlord’s sole cost and expense (not to be included within Operating Expenses), be responsible   for the repair and maintenance of the structural portions of the Buildings identified in the   structural plans (i.e., the “S” series of drawings) which form a part of the Approved Plans.   15.4. Landlord shall not be liable for any failure to make any repairs or to perform any   maintenance that is Landlord’s obligation pursuant to this Lease unless such failure shall persist   beyond the time periods set forth in the immediately following grammatical sentence.   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 that Landlord is obligated to perform under 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 pursue such repair to completion), then Tenant may   provide Landlord with a second written notice stating in bold and all caps font "LANDLORD'S   FAILURE TO COMMENCE REPAIR OF THE DAMAGE DESCRIBED BELOW   WITHIN THREE (3) 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 three (3) business day   period, then Tenant shall, as Tenant’s sole and exclusive remedy (provided, however, nothing   in this paragraph, shall impair Tenant’s rights under Section 28.13 below), 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 "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, as   Tenant’s sole and exclusive remedy (provided, however, nothing in this paragraph, shall   impair Tenant’s rights under Section 28.13 below), 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 a   general contractor designated by Landlord for such work unless such contractor is unwilling or   unable to perform such work or its 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 Foster City, California area   whose pricing is competitively bid in the market. 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, Tenant shall so notify Landlord in writing (the "Reimbursement   Notice"), which Reimbursement Notice shall specify in detail such costs and expenses. Within    

 

33   thirty (30) days after Landlord's receipt of a Reimbursement Notice, Landlord shall pay to Tenant   any undisputed portion of such costs and 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 Base 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 Base 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 Base 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 (y) the date that Landlord reimburses Tenant such amount   and (z) the date of offset (up to a maximum offset each month of fifteen percent (15%) of the   Base 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, together with interest from the date Landlord paid such Disputed Amount to Tenant   or the date Tenant wrongly offset such Disputed Amounts, as applicable.   15.5. Subject to Section 15.3 above, Tenant shall be responsible for all repairs,   maintenance and replacements at the Premises. Landlord shall not be required to maintain or   make any repairs or replacements of any nature or description whatsoever to the Premises unless   (a) Landlord is required to make such repairs or replacements pursuant to Section 15.3 above, or   (b) the necessity for such repairs or replacements is due to Landlord's negligence or willful   misconduct (and not due in any part to any negligent act or omission on the part of Tenant or   any Tenant Party). 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 foregoing, if Tenant shall fail, where   such failure shall continue for a period of thirty (30) days after written notice thereof from   Landlord to Tenant, to commence and thereafter to proceed with diligence to make any repair or   perform any maintenance 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 commercially reasonable 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.    

 

34   15.6. Subject to Section 11.3 above, Landlord and Landlord’s agents shall have the   right to enter upon the Premises or any portion thereof for the purposes of performing any repairs   or maintenance Landlord is required to make pursuant to this Lease, and of ascertaining the   condition of the Premises or whether Tenant is observing and performing Tenant’s obligations   hereunder, all without unreasonable interference from Tenant or Tenant’s Agents. Except for   emergency maintenance or repairs, the right of entry contained in this paragraph shall be   exercisable at reasonable times, at reasonable hours and on reasonable notice.   15.7. Tenant shall, upon the expiration or sooner termination of the Term, (a) surrender   the Premises to Landlord in as good a condition as when received, ordinary wear and tear and   damage by casualty excepted and with the Tenant Improvements in substantially the same   condition as existed upon completion thereof, reasonable wear and tear excepted (subject to any   Alterations made by Tenant pursuant to Article 14); (b) at Landlord’s request and Tenant’s sole   cost and expense, remove equipment from the Premises and repair any damage to the Premises   caused thereby, and (c) cause a licensed electrician to (i) remove all wiring and cabling from   disconnected equipment back to the junction box, and (ii) otherwise place all wiring and cabling   in a safe condition and in the condition required by Applicable Laws. Landlord shall have no   obligation to alter, remodel, improve, repair, decorate or paint the Premises or any part thereof,   other than pursuant to the terms and provisions of this Lease or as described in Exhibit B with   respect to payment of the Improvement Allowance.   15.8. If any excavation shall be made upon land adjacent to or under the Building, or   shall be authorized to be made, Tenant shall afford to the person causing or authorized to cause   such excavation, license to enter the Premises for the purpose of performing such work as such   person shall deem necessary or desirable to preserve and protect the Building from injury or   damage and to support the same by proper foundations, without any claim for damages or   liability against Landlord and without reducing or otherwise affecting Tenant’s obligations under   this Lease.   15.9. This Article relates to repairs and maintenance arising in the ordinary course of   operation of the Premises. In the event of a casualty described in Article 21, Article 21 shall   apply in lieu of this Article. In the event of eminent domain, Article 22 shall apply in lieu of this   Article.   16 Liens.   16.1 Subject to the immediately succeeding sentence, Tenant shall keep the Premises   free from any liens arising out of work or services performed, materials furnished or obligations   incurred by Tenant. Tenant further covenants and agrees that any mechanic’s or materialman’s   lien filed against the Premises for work or services claimed to have been done for, or materials   claimed to have been furnished to, or obligations incurred by Tenant shall be discharged or   bonded by Tenant within twenty (20) days after the filing thereof, at Tenant’s sole cost and   expense; provided, however, that Tenant shall have the right to contest any such lien by any   manner available to Tenant under applicable law provided that a bond has been issued and any   such contest shall stay the enforcement of the lien until such contest is completed.    

 

35   16.2 Should Tenant fail to discharge or bond against any lien of the nature described in   Section 16.1, Landlord may, at Landlord’s election, pay such claim or post a statutory lien bond   or otherwise provide security to eliminate the lien as a claim against title, and Tenant shall   immediately reimburse Landlord for the costs thereof as Additional Rent. Tenant shall   indemnify, save, defend (at Landlord’s option and with counsel reasonably acceptable to   Landlord) and hold the Landlord Indemnitees harmless from and against any Claims arising from   any such liens, including any administrative, court or other legal proceedings related to such   liens.   16.3 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 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 Premises 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 holder of a financing statement 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 Premises. Upon Tenant’s   request, Landlord will execute and deliver to Tenant a commercially reasonable form of   Landlord’s waiver reasonably acceptable to Landlord in favor of Tenant’s equipment lienor;   provided, however, that (a) Landlord shall have the opportunity to make any reasonable   comments to such form that Landlord desires, and (b) Tenant will reimburse Landlord for the   cost to Landlord to review and negotiate such waiver.   17. Estoppel Certificate. Tenant shall, within twenty (20) 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 current or proposed Lender or encumbrancer or proposed 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 Premises 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 Property. Tenant’s failure to deliver such statement within such the prescribed time shall,   at Landlord’s option, constitute a Default (as defined below) under this Lease, and, in any event,   shall be binding upon Tenant that the 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    

 

36   to Tenant for execution. Landlord shall, within twenty (20) 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.   18. Hazardous Materials.   18.1. Tenant shall not cause or permit any Hazardous Materials (as defined below) to be   brought upon, kept or used in or about the Premises in violation of Applicable Laws by Tenant or   any of its employees, agents, contractors or invitees (collectively with Tenant, each a “Tenant   Party”). If (a) Tenant breaches such obligation, (b) the presence of Hazardous Materials as a   result of such a breach results in contamination of the Premises, any portion thereof, or any   adjacent property, (c) contamination of the Premises otherwise occurs during the Term or any   extension or renewal hereof or holding over hereunder (other than (i) if such contamination   results from migration of Hazardous Materials from outside the Premises not caused by a Tenant   Party or (ii) to the extent such contamination is caused by Landlord or any Landlord Party or (iii)   if such Hazardous Materials existed in, on or about the Premises prior to the Execution Date) or   (d) contamination of the Premises occurs as a result of Hazardous Materials that are placed on or   under or are released into the Premises by a Tenant Party, then Tenant shall indemnify, save,   defend (at Landlord’s option and with counsel reasonably acceptable to Landlord) and hold the   Landlord Indemnitees harmless from and against any and all Claims of any kind or nature,   including (w) diminution in value of the Premises or any portion thereof, (x) damages for the loss   or restriction on use of rentable or usable space or of any amenity of the Premises, (y) damages   arising from any adverse impact on marketing of space in the Premises or any portion thereof and   (z) sums paid in settlement of Claims that arise before, during or after the Term as a result of   such breach or contamination. This indemnification by Tenant includes costs incurred in   connection with any investigation of site conditions or any clean-up, remedial, removal or   restoration work required by any Governmental Authority because of Hazardous Materials   present in the air, soil or groundwater above, on, under or about the Premises. Without limiting   the foregoing, if the presence of any Hazardous Materials in, on, under or about the Premises,   any portion thereof or any adjacent property caused or permitted by any Tenant Party results in   any contamination of the Premises, any portion thereof or any adjacent property, then Tenant   shall promptly take all actions at its sole cost and expense as are necessary to return the Premises,   any portion thereof or any adjacent property to its 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 Premises, any portion thereof or any adjacent   property. Tenant’s obligations under this Section shall not be affected, reduced or limited by any   limitation on the amount or type of damages, compensation or benefits payable by or for Tenant   under workers’ compensation acts, disability benefit acts, employee benefit acts or similar   legislation. Notwithstanding anything contained in this Article 18, Tenant shall not be    

 

37   responsible for any Hazardous Materials which (i) Tenant can prove existed on the Premises   prior to the date Tenant first commenced occupancy of the Premises, (ii) migrated onto the   Premises from offsite and were not exacerbated by any act of Tenant or any Tenant Party or (iii)   were brought onto the Premises by Landlord, its employees or agents.   Landlord will provide Tenant with copies of any soils test, Hazardous Materials reports or   similar studies ordered by Landlord during the construction of the Project and Base Building   Work upon request from Tenant. Landlord shall, at no cost to Tenant (and not as an Operating   Expense), cause the removal or remediation, to the extent required in order to obtain the   Entitlements for the Project and/or required by any Governmental Authority as a condition to the   construction of the Project and Base Building Work, of any Hazardous Material which was on   the Project prior to the Phase 1 Rent Commencement Date in violation of Applicable Laws in   effect as of the Phase 1 Rent Commencement Date; provided, however, that Landlord shall have   no obligations with respect to any Hazardous Materials brought onto the Property by Tenant or   any Tenant Party. Landlord indemnifies Tenant for, from and against any (a) breach by Landlord   of the obligations stated in the preceding sentence and (b) contamination of the Premises caused   by Landlord or any Landlord Party, and agrees to defend and hold Tenant harmless from and   against any and all claims, judgments, damages, penalties, fines, costs, liabilities, or losses which   arise during or after the Term as a result of such (a) or (b).   18.2. Landlord acknowledges that it is not the intent of this Article to prohibit Tenant   from operating its business for the Permitted Use. 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 in accordance with 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 (a) a list identifying each type of Hazardous Material to be present   at the Premises that is subject to regulation under any environmental Applicable Laws, (b) a list   of any and all approvals or permits from Governmental Authorities required in connection with   the presence of such Hazardous Material at the Premises and (c) correct and complete copies of   (i) notices of violations of Applicable Laws related to Hazardous Materials and (ii) plans relating   to the installation of any storage tanks to be installed in, on, under or about the Premises   (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 closure plans or any other documents required by any and all   Governmental Authorities for any storage tanks installed in, on, under or about the Premises for   the closure of any such storage tanks (collectively, “Hazardous Materials Documents”). Tenant   shall deliver to Landlord updated Hazardous Materials Documents, within fourteen (14) days   after receipt of a written request therefor from Landlord, not more often than once per year,   unless (m) there are any changes to the Hazardous Materials Documents or (n) Tenant initiates   any Alterations or changes its business, in either case in a way that involves any material increase   in the types or amounts of Hazardous Materials. For each type of Hazardous Material listed, the   Hazardous Materials Documents shall include (t) the chemical name, (u) the material state (e.g.,   solid, liquid, gas or cryogen), (v) the concentration, (w) the storage amount and storage condition   (e.g., in cabinets or not in cabinets), (x) the use amount and use condition (e.g., open use or   closed use), (y) the location (e.g., room number or other identification) and (z) if known, the    

 

38   chemical abstract service number. Notwithstanding anything in this Section to the contrary,   Tenant shall not be required to provide Landlord with any Hazardous Materials Documents   containing information of a proprietary nature, which Hazardous Materials Documents, in and of   themselves, do not contain a reference to any Hazardous Materials or activities related to   Hazardous Materials. Landlord may, at Landlord’s expense, cause the Hazardous Materials   Documents to be reviewed by a person or firm qualified to analyze Hazardous Materials to   confirm compliance with the provisions of this Lease and with Applicable Laws. In the event   that a review of the Hazardous Materials Documents indicates non-compliance with this Lease or   Applicable Laws, Tenant shall, at its expense, diligently take steps to bring its storage and use of   Hazardous Materials into compliance. Notwithstanding anything in this Lease to the contrary or   Landlord’s review into Tenant’s Hazardous Materials Documents or use or disposal of hazardous   materials, however, Landlord shall not have and expressly disclaims any liability related to   Tenant’s or other tenants’ use or disposal of Hazardous Materials, it being acknowledged by   Tenant that Tenant is best suited to evaluate the safety and efficacy of its Hazardous Materials   usage and procedures.   18.3. Intentionally Omitted.   18.4. At any time, and from time to time, prior to the expiration of the Term, Landlord,   at its sole cost and expense, shall have the right to conduct appropriate tests of the Premises or   any portion thereof to demonstrate that Hazardous Materials are present or that contamination   has occurred due to the acts or omissions of a Tenant Party; provided that Tenant shall pay all   actual, documented and reasonable costs of such tests if such tests reveal that Hazardous   Materials for which Tenant is responsible pursuant to Section 18.1 above exist at the Premises in   violation of Applicable Laws or this Lease.   18.5. If underground or other storage tanks storing Hazardous Materials installed or   utilized by Tenant are located on the Premises, or are hereafter placed on the Premises by Tenant   (or by any other party, if such storage tanks are utilized by Tenant), then 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 have no responsibility or liability for underground or   other storage tanks installed by anyone other than Tenant unless Tenant utilizes such tanks, in   which case Tenant’s responsibility for such tanks shall be as set forth in this Section.   18.6. Tenant shall promptly report to Landlord any actual or suspected presence of mold   or water intrusion at the Premises.   18.7. Landlord’s and Tenant’s obligations under this Article shall survive the expiration   or earlier termination of the Lease. During any period of time needed by Tenant or Landlord   after the termination of this Lease to complete the removal from the Premises of any such   Hazardous Materials which are Tenant’s responsibility under this Lease, Tenant shall be deemed   a holdover tenant and subject to the provisions of Article 24.   18.8. As used herein, the term “Hazardous Material” means any toxic, explosive,   corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous    

 

39   substance, material or waste that is or becomes regulated by Applicable Laws or any   Governmental Authority.   19. Odors and Exhaust. Tenant shall, at Tenant’s sole cost and expense, undertake   commercially reasonable steps to minimize or eliminate, where possible, offensive odors   emanating from the Premises, including providing odor eliminators and other devices (such as   filters, air cleaners, scrubbers and whatever other equipment may be required by Applicable   Laws or in Tenant’s good faith business judgment be necessary or appropriate from time to time)   to completely remove, eliminate and abate any odors, fumes or other substances in Tenant’s   exhaust stream that, in Landlord’s judgment, emanate from Tenant’s Premises. Any work Tenant   performs under this Section shall constitute Alterations.   20. Insurance; Waiver of Subrogation.   20.1. Landlord shall maintain insurance for the Project 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) 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, workers’ 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.   20.2. In addition, Landlord shall carry Commercial General Liability insurance with   limits of not less than Five Million Dollars ($5,000,000) per occurrence/general aggregate for   bodily injury (including death), or property damage with respect to the Premises.   20.3. Tenant shall, at its own cost and expense, procure (prior to Tenant’s entry onto the   Premises to commence any occupancy or Tenant Improvements) and maintain during the Term   the following insurance for the benefit of Tenant and Landlord (as their interests may appear)   with insurers financially acceptable and lawfully authorized to do business in the state where the   Premises are located:   (b) Commercial General Liability insurance on a broad-based occurrence   coverage form, with coverages including but not limited to bodily injury (including death),   property damage (including loss of use resulting therefrom), premises/operations, personal &   advertising injury, and contractual liability with limits of liability of not less than $5,000,000 for   bodily injury and property damage per occurrence, $5,000,000 general aggregate, which limits   may be met by use of excess and/or umbrella liability insurance provided that such coverage is at   least as broad as the primary coverages required herein.    

 

40   (c) Commercial Automobile Liability insurance covering liability arising from   the use or operation of any auto, including those owned, hired or otherwise operated or used by   or on behalf of the Tenant. The coverage shall be on a broad-based occurrence form with   combined single limits of not less than $1,000,000 per accident for bodily injury and property   damage.   (d) Commercial Property insurance covering property damage to the full   replacement cost value and business interruption (which may be self-insured as set forth below).   Covered property shall include all tenant improvements in the Premises (to the extent not insured   by Landlord pursuant to Section 20.1) and Tenant’s Property including personal property,   furniture, fixtures, machinery, equipment, stock, inventory and improvements and betterments,   which may be owned by Tenant or Landlord and required to be insured hereunder, or which may   be leased, rented, borrowed or in the care custody or control of Tenant, or Tenant’s agents,   employees or subcontractors. Such insurance, with respect only to all Tenant Improvements,   Alterations or other work performed on the Premises by Tenant (collectively, “Tenant Work”),   shall name Landlord and Landlord’s current and future mortgagees as loss payees as their   interests may appear. Such insurance shall be written on an “all risk” of physical loss or damage   basis including the perils of fire, extended coverage, electrical injury, mechanical breakdown,   windstorm, vandalism, malicious mischief, sprinkler leakage, back-up of sewers or drains, flood,   earthquake, terrorism and such other risks Landlord may from time to time designate, for the full   replacement cost value of the covered items with an agreed amount endorsement with no co-   insurance. Business interruption coverage shall have limits sufficient to cover Tenant’s lost   profits and necessary continuing expenses, including rents due Landlord under the Lease. The   minimum period of indemnity for business interruption coverage shall be twelve (12) months   plus twelve (12) months’ extended period of indemnity. Notwithstanding anything to the   contrary contained herein, the Tenant originally named herein (the “Original Tenant”) (and not   any assignee, subtenant or other transferee) may, subject to the provisions of this Section 20.3(d),   fulfill its insurance obligations under the preceding sentence by self-insurance (regardless of   whether Tenant elects to self-insure all insurance pursuant to Section 20.10 below). Any self-   insurance so maintained by Tenant shall be deemed to contain all of the terms and conditions   applicable to such insurance as required in this Article 20, including, without limitation, a   deemed waiver of subrogation; consequently, Landlord shall be treated, for all purposes, as if   Tenant had actually purchased such insurance from a third party. If Tenant elects to so self-   insure, then with respect to any claims which may result from incidents occurring during the   Term, such self-insurance obligation shall survive the expiration or earlier termination of this   Lease to the same extent as the insurance required hereunder would survive.   (e) Workers’ Compensation insurance as is required by statute or law, or as   may be available on a voluntary basis and Employers’ Liability insurance with limits of not less   than the following: each accident, Five Hundred Thousand Dollars ($500,000); disease   ($500,000); disease (each employee), Five Hundred Thousand Dollars ($500,000).   (f) Pollution Legal Liability insurance is required if Tenant stores, handles,   generates or treats hazardous materials, as determined solely by Landlord, on or about the   Premises. Such coverage shall include bodily injury, sickness, disease, death or mental anguish    

 

41   or shock sustained by any person; property damage including physical injury to or destruction of   tangible property including the resulting loss of use thereof, clean-up costs, and the loss of use of   tangible property that has not been physically injured or destroyed; and defense costs, charges   and expenses incurred in the investigation, adjustment or defense of claims for such   compensatory damages. Coverage shall apply to both sudden and non-sudden pollution   conditions including the discharge, dispersal, release or escape of smoke, vapors, soot, fumes,   acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or   pollutants into or upon land, the atmosphere or any watercourse or body of water. Claims-made   coverage is permitted, provided the policy retroactive date is continuously maintained prior to the   commencement date of this agreement, and coverage is continuously maintained during all   periods in which Tenant occupies the Premises. Coverage shall be maintained with limits of not   less than $1,000,000 per incident with a $2,000,000 policy aggregate.   (g) During all construction by Tenant at the Premises, with respect to tenant   improvements being constructed (including the Tenant Improvements and any Alterations,   insurance required in Exhibit B-1 must be in place.   20.4. The insurance required to be purchased and maintained by Tenant pursuant to this   Lease shall show, as an additional insured in respect of the Premises, Landlord, BioMed Realty,   L.P., BioMed Realty Trust, Inc., any management company retained by Landlord to manage the   Premises, any ground lessor and any mortgagee of Landlord required to be named pursuant to its   mortgage documents. All general liability and property damage policies shall contain a provision   that Landlord, although named as an additional insured or loss payee, 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   VII in "Best's Insurance Guide." Tenant shall obtain for Landlord from the insurance companies   or cause the insurance companies to furnish certificates of insurance evidencing all coverages   required herein to Landlord. If available, the policy will provide that such policy shall not 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. Tenant’s required policies shall   contain severability of interests clauses stating that, except with respect to limits of insurance,   coverage shall apply separately to each insured or additional insured. 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.   20.5. In each instance where insurance is to name Landlord Parties as additional   insureds, Tenant shall, upon Landlord’s written request, also designate and furnish certificates   evidencing such Landlord Parties as additional insureds to (a) any Lender of Landlord holding a   security interest in the Premises, (b) the landlord under any lease whereunder Landlord is a tenant    

 

42   of the real property upon which the Premises is 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 Premises.   20.6. 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. 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.   20.7. Landlord and Tenant and its insurers 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 20.7. 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 Landlord or Tenant shall notify the other party in writing within 30   days of becoming aware of the condition.   20.8. Landlord may require insurance policy limits required under this Lease to be   raised to conform with requirements of Landlord’s Lender (provided that Landlord will only be   permitted to revise such limits one time in any five (5) year period); provided such increased   limits are being provided by similarly situated tenants of Landlord.   20.9. Any costs incurred by Landlord pursuant to this Article shall be included as   Insurance Expenses payable by Tenant pursuant to this Lease.   20.10 Self Insurance. The Original Tenant shall have the right to self-insure for any or   all of the insurance required by this Article 20, on the following terms and conditions:   "Self-insure" shall mean that Tenant is itself acting as though it were the insurance   company providing the insurance required under the provisions hereof and Tenant shall pay any   amounts due in lieu of insurance proceeds which would have been payable if the insurance   policies had been carried, which amounts shall be treated as insurance proceeds for all purposes   under this Lease.   All amounts which Tenant pays or is required to pay and all loss or damages   resulting from risks for which Tenant has elected to self-insure shall be subject to the waiver of    

 

43   subrogation provisions of Section 20.7 hereof and shall not limit Tenant's indemnification   obligations set forth in Section 25.1 hereof.   Tenant's right to self-insure and to continue to self-insure is conditioned upon and   subject to:   (a) Tenant now having and hereafter maintaining a market capitalization rate   of at least Five Billion Dollars ($5,000,000,000);   (b) If requested by Landlord or its mortgagee, Tenant providing an audited   financial statement, prepared in accordance with generally accepted accounting principles, to   Landlord and Landlord's mortgagee once per year which establishes and confirms that Tenant has   the required net worth (provided that the foregoing will not be required so long as Tenant   remains a publicly traded company and such financial information is readily available by public   means);   (c) No change in use occurring in the Premises that would materially increase   the risk of the operations conducted being thereon; and   (d) Tenant maintaining appropriate loss reserves for the amount of its self-   insurance obligations under this Lease and otherwise with are actuarially derived in accordance   with accepted standards of the insurance industry and accrued (i.e., charged against earnings) or   otherwise funded.   In the event Tenant fails to fulfill the requirements of this Section 20.10, then   Tenant shall immediately lose the right to self-insure and shall be required to provide the   insurance specified herein issued by a qualifying insurance company.   In the event that Tenant elects to self-insure and an event or claim occurs for   which a defense and/or coverage would have been available from the insurance company, Tenant   shall:   (1) undertake the defense of any such claim, including a defense of Landlord,   at Tenant's sole cost and expense, and   (2) use its own funds to pay any claim or replace property or otherwise   provide the funding which would have been available from insurance proceeds but for such   election by Tenant to self-insure.   In the event of a damage or destruction of the Premises, any self-insurance   proceeds will be paid to Landlord as required by Article 21 of this Lease in the same manner as   the proceeds from a third party insurer would be payable to Landlord.   In the event that Tenant elects to self-insure a deductible or self-insured retention,   Tenant shall provide Landlord and Landlord's mortgagee with certificates of insurance from the   primary, umbrella and excess carriers specifying the extent of self-insurance coverage hereunder    

 

44   and containing a waiver of subrogation and/or release of right of recovery provision reasonably   satisfactory to Landlord. Any insurance coverage provided by Tenant shall be for the benefit of   Tenant, Landlord and Landlord’s mortgagee, as their respective interests may appear and, shall   name the mortgagee under a standard mortgage provision.   The obligations of Tenant under this Section 20.10 are independent and shall   remain in full force and effect notwithstanding any breach of any provision of this Lease by   Landlord.   21. Damage or Destruction.   21.1. Subject to Section 21.2, In the event of a partial or complete destruction of the   Premises by fire or other perils, Landlord shall commence and proceed diligently with the work   of repair, reconstruction and restoration of the Premises, and this Lease shall continue in full   force and effect.   21.2. Notwithstanding the terms of this Article 21, Landlord may elect not to rebuild   and/or restore the Premises 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 the Buildings 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 two hundred forty (240) 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 within one (1) year of such damage or 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 Million Dollars ($2,000,000) (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 then-current Term, or when appropriate the Option 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 Option Term) and Landlord elects not to commence repair to the Premises or   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    

 

45   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 thirty (30) 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.   21.3. Landlord shall give written notice to Tenant within sixty (60) days following the   date of damage or destruction of its election not to repair, reconstruct or restore the Premises.   21.4. Upon any termination of this Lease under any of the provisions of this Article, 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.   21.5. In the event of repair, reconstruction and restoration as provided in this Article, 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,   reconstruction and restoration that, in Tenant’s sole, but reasonable opinion, is suitable for the   temporary conduct of Tenant’s business.   21.6. Notwithstanding anything to the contrary contained in this Article, should   Landlord be delayed or prevented from completing the repair, reconstruction or restoration of the   damage or destruction to the Premises after the occurrence of such damage or destruction by   Force Majeure (but in no event shall Force Majeure delays exceed ninety (90) days) or delays   caused by a Tenant Party, or due to delays in obtaining clearances or authorization relating to any   Hazardous Materials used by Tenant, then the time for Landlord to commence or complete   repairs, reconstruction and restoration shall be extended on a day-for-day basis; provided,   however, that, at Landlord’s election, Landlord shall be relieved of its obligation to make such   repairs, reconstruction and restoration and may instead terminate this Lease by written notice   delivered to Tenant in the event that the aggregate amount of any such delays exceed twelve (12)   months (provided, further, that for purposes of determining whether the aggregate amount of   delays exceeds twelve (12) months, the number of days of Force Majeure delays shall not be   limited to ninety (90) days but rather shall be uncapped).   21.7. If Landlord is obligated to or elects to repair, reconstruct or restore as herein   provided, then Landlord shall be obligated to make such repairs, reconstruction or restoration   only with regard to those portions of the Premises that were originally provided at Landlord’s   expense. The repairs, 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    

 

46   elected to upgrade certain improvements from Landlord’s building standards (the “Building   Standard”), Landlord shall, upon the need for replacement due to an insured loss, provide only   the Building Standard, 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 repairs, reconstruction   and restoration of the Premises.   21.8. Notwithstanding anything to the contrary contained in this Article, Landlord shall   not have any obligation whatsoever to repair, reconstruct or restore the Premises if the damage   resulting from any casualty covered under this Article occurs during the last twenty-four (24)   months of the Term or any extension thereof, and will take more than one hundred eighty (180)   days to complete or to the extent that insurance proceeds are not available therefor.   21.9. Landlord’s obligation, should it elect or be obligated to repair, reconstruct or   restore, shall be limited to the Project and Base Building Work. Tenant shall, at its expense,   replace or fully repair all of Tenant’s personal property and any Alterations installed by Tenant   existing at the time of such damage or destruction. If the Premises are to be repaired,   reconstructed or restored in accordance with the foregoing, Landlord shall make available to   Tenant any portion of insurance proceeds it receives that are allocable to the Alterations   constructed by Tenant pursuant to this Lease, and subject to the requirements of any Lender of   Landlord (if applicable).   21.10. In addition to its termination right in Section 21.2 above, Tenant shall have the   right to terminate this Lease if any damage to the Buildings or Premises: (a) occurs during the   last twelve (12) months of the Term of this Lease (including the last twelve (12) months of any   Option Term, if applicable); or (b) causes Tenant to be unable to occupy more than twenty-five   percent (25%) of the Premises.   21.11. This Article sets forth the terms and conditions upon which this Lease may   terminate in the event of any damage or destruction. Accordingly, the parties hereby waive the   provisions of California Civil Code Sections 1932(2) and 1933(4) (and any successor statutes   permitting the parties to terminate this Lease as a result of any damage or destruction).   22. Eminent Domain.   22.1. 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.   22.2. 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    

 

47   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. If any partial taking (i) materially interferes with Tenant’s use of the Premises   for the Permitted Use and (ii) prevents Tenant from accessing the Premises or the parking areas   of the Project where no substitute parking is made available, and such partial taking continues for   more than one hundred eighty (180) days, Tenant will have the right to terminate this Lease by   delivery of written notice given within ten (10) business days after the expiration of such one   hundred eighty (180) day period.   22.3. 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 22, any award for   such taking shall be the property of Landlord.   22.4. If, upon any taking of the nature described in this Article, this Lease continues in   effect, then Landlord shall promptly proceed to restore the Premises to substantially their same   condition prior to such partial taking. To the extent such restoration is infeasible, as determined   by Landlord in its sole and absolute discretion, the Rent shall be decreased proportionately to   reflect the loss of any portion of the Premises no longer available to Tenant.   22.5. This Article sets forth the terms and conditions upon which this Lease may   terminate in the event of any damage or destruction. Accordingly, the parties hereby waive the   provisions of California Code of Civil Procedure Section 1265.130 (and any successor statutes   permitting the parties to terminate this Lease as a result of any damage or destruction).   22.6. Tenant shall have the right to file any separate claim available to Tenant for any   taking of Tenant’s personal property and fixtures belonging to Tenant and removable by Tenant   upon expiration of the Term in accordance with the terms of this Lease, and for moving   expenses, so long as such claim is payable separately to Tenant and does not diminish Landlord’s   claim.   23. Surrender.   23.1. Prior to Tenant’s surrender of possession of any part of the Premises, Tenant shall   provide Landlord with a facility decommissioning and Hazardous Materials closure plan for the   Premises (“Exit Survey”) prepared by an independent third party state-certified professional with   appropriate expertise, which Exit Survey must be reasonably acceptable to Landlord. The Exit   Survey shall comply with the American National Standards Institute’s Laboratory   Decommissioning guidelines (ANSI/AIHA Z9.11-2008) or any successor standards published by   ANSI or any successor organization (or, if ANSI and its successors no longer exist, a similar   entity publishing similar standards). In addition, at least ten (10) days prior to Tenant’s surrender   of possession of any part of the Premises, Tenant shall (a) provide Landlord with written   evidence of all appropriate governmental releases obtained by Tenant in accordance with   Applicable Laws, including laws pertaining to the surrender of the Premises, (b) place Laboratory    

 

48   Equipment Decontamination Forms on all decommissioned equipment to assure safe occupancy   by future users and (c) conduct a site inspection with Landlord. In addition, Tenant agrees to   remain responsible after the surrender of the Premises for the remediation of any recognized   environmental conditions set forth in the Exit Survey and comply with any recommendations set   forth in the Exit Survey. Tenant’s obligations under this Section shall survive the expiration or   earlier termination of the Lease.   23.2. No surrender of possession of any part of the Premises shall release Tenant from   any of its obligations hereunder, unless such surrender is accepted in writing by Landlord.   23.3. 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 Premises 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.   23.4. The voluntary or other surrender of any ground or other underlying lease that now   exists or may hereafter be executed affecting the Premises 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 Premises and shall, at the option of   the successor to Landlord’s interest in the Premises or any portion thereof operate as an   assignment of this Lease.   24. Holding Over.   24.1. If, with Landlord’s prior written consent, Tenant holds possession of all or any   part of the Premises 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)   Base Rent in accordance with Section 2.3 and Article 5, as adjusted in accordance with Article 6,   and (b) any amounts for which Tenant would otherwise be liable under this Lease if the Lease   were still in effect, including payments for Taxes, Operating Expenses, Insurance Expenses and   Tenant’s electricity and other utility costs. Any such month-to-month tenancy shall be subject to   every other term, covenant and agreement contained herein.   24.2. Notwithstanding the foregoing, if Tenant remains in possession of the Premises   after the expiration or earlier termination of the Term without Landlord’s prior written consent,   (a) Tenant shall become a tenant at sufferance subject to the terms and conditions of this Lease,   except that the monthly rent shall be equal to (a) for the first three (3) months that Tenant   remains in possession of the Premises after the expiration or earlier termination of this   Lease, one hundred fifteen percent (115%) of the Base 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 Premises after the expiration or earlier termination of this Lease, one hundred fifty   percent (150%) of the Base Rent in effect during the last thirty (30) days of the Term, and (c)   Tenant shall be liable to Landlord for any and all damages suffered by Landlord as a result of any   holdover for more than ninety (90) days, including any lost rent or consequential, special and   indirect damages (in each case, regardless of whether such damages are foreseeable).    

 

49   24.3. 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.   24.4. The foregoing provisions of this Article 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.   24.5. The provisions of this Article shall survive the expiration or earlier termination of   this Lease.   25. Indemnification and Exculpation.   25.1. Tenant agrees to indemnify, save, defend (at Landlord’s option and with counsel   reasonably acceptable to Landlord) and hold the Landlord Indemnitees harmless from and against   any and all Claims of any kind or nature, real or alleged, arising from (a) injury to or death of any   person or damage to any property occurring within or about the Premises arising directly or   indirectly out of the presence at or use or occupancy of the Premises or Project by a Tenant Party,   (b) an act or omission on the part of any Tenant Party, (c) a breach or default by Tenant in the   performance of any of its obligations hereunder or (d) injury to or death of persons or damage to   or loss of any property, real or alleged, arising from the serving of alcoholic beverages at the   Premises or Project, including liability under any dram shop law, host liquor law or similar   Applicable Law, except to the extent caused by Landlord’s negligence or willful misconduct.   Tenant’s obligations under this Section shall not be affected, reduced or limited by any limitation   on the amount or type of damages, compensation or benefits payable by or for Tenant under   workers’ compensation acts, disability benefit acts, employee benefit acts or similar legislation.   Tenant’s obligations under this Section shall survive the expiration or earlier termination of this   Lease. Subject to Sections 20.7, 25.2 and 28.13 and any subrogation provisions contained in the   Work Letter, Landlord agrees to indemnify, save, defend (at Tenant’s option and with counsel   reasonably acceptable to Tenant) and hold the Tenant Parties harmless from and against any and   all Claims arising from injury to or death of any person or damage to or loss of any physical   property occurring within or about the Premises to the extent directly arising out of (i) a default   by Landlord under this Lease or (ii) Landlord’s gross negligence or willful misconduct. Tenant   shall not be liable for any damages to the extent arising from any act, omission or neglect of any   other tenant or in the Project, except to the extent a Tenant Party committed such act, omission or   neglect.   25.2. Subject to Section 13.9 above and Landlord’s indemnity obligations above,   Landlord shall not be liable to Tenant for and Tenant assumes all risk of damage or losses caused   by fire, electrical malfunction, gas explosion or water damage of any type (including broken   water lines, malfunctioning fire sprinkler systems, roof leaks or stoppages of lines), unless any   such loss is due to Landlord’s willful disregard of written notice by Tenant of need for a repair   that Landlord is responsible to make for an unreasonable period of time (given the   circumstances). Notwithstanding anything to the contrary contained in this Lease, Landlord shall   not be liable under any circumstances for damage to personal property or scientific research,   including loss of records kept by Tenant within the Premises (in each case, regardless of whether   such damages are foreseeable). Tenant further waives any claim for injury to Tenant's business    

 

50   or loss of income relating to any such damage or destruction of personal property as described   in this Section 25.2.   25.3. 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   Landlord Parties.   25.4. 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.   25.5. 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 holdover for a period in excess of ninety (90)   days after the expiration or earlier termination 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.   25.6. The provisions of this Article shall survive the expiration or earlier termination of   this Lease.   26. Assignment or Subletting.   26.1. 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"), unless providing   such notification to Landlord would violate a confidentiality agreement between Tenant and the   Tenant’s Affiliate (provided, however, that Tenant shall use its best efforts to ensure that such   confidentiality agreement permits Tenant to provide the notification required under this   subsection 26.1(b)(1)), in which event Tenant shall provide such notification as soon as such   notification is permissible under the confidentiality agreement; and (2) Tenant remains fully and   primarily liable under this Lease (including in connection with any extension or expansion of this   Lease and Tenant’s obligations hereunder by any such Tenant’s Affiliate, including, without    

 

51   limitation any exercise of the rights granted pursuant to Sections 37.22, 39 or 40 below). For   purposes of Exempt Transfers, "control" requires both (y) owning (directly or indirectly) more   than fifty-one percent (51%) of the stock or other equity interests of another person and (z)   possessing, directly or indirectly, the power to direct or cause the direction of the management   and policies of such person.   26.2. In the event Tenant desires to effect a Transfer, then, at least twenty (20) business   days (or at least ten (10) days with respect to an Exempt Transfer subject to subsection 26.1(b)(1)   above) but not more than one hundred eighty (180) days prior to the date when Tenant desires the   Transfer to be effective (the "Transfer Date"), Tenant shall provide written notice to Landlord   (the "Transfer Notice") containing the proposed 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, including unconsolidated   financial statements, 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.   26.3. Landlord, in determining whether consent should be given to a proposed   assignment, may give consideration to the financial strength of such transferee (notwithstanding   Tenant remaining liable for Tenant's performance). Notwithstanding anything to the contrary, 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   (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    

 

52   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.   26.4. The following are conditions precedent to a Transfer or to Landlord considering a   request by Tenant to a Transfer:   (a) Tenant shall remain fully liable under this Lease during the unexpired   Term (and any Option Term or other extension of the Term exercised or negotiated by a Tenant’s   Affiliate, including, without limitation any exercise of the rights granted pursuant to Sections   37.22, 39 or 40 below). Tenant agrees that it shall not be (and shall not be deemed to be) a   guarantor or surety of this Lease, however, and waives its right to claim that is it is a guarantor or   surety or to raise in any legal proceeding any guarantor or surety defenses permitted by this Lease   or by Applicable Laws;   (b) Tenant shall provide Landlord with the Transfer Information;   (c) In the case of an Exempt Transfer, Tenant shall provide Landlord with   evidence reasonably satisfactory to Landlord that the Transfer qualifies as an Exempt Transfer,   unless providing such information to Landlord prior to the effectiveness of such Exempt Transfer   would violate a confidentiality agreement between Tenant and the Tenant’s Affiliate (provided,   however, that Tenant shall use its best efforts to ensure that such confidentiality agreement   permits Tenant to provide the information required under this subsection 26.4(c)), in which event   Tenant shall provide such information as soon as the same is permissible under the   confidentiality agreement;   (d) Except with respect to an Exempt Transfer, 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   “Net Profit” as defined below, Tenant shall pay fifty percent (50%) of all of such Net Profit to   Landlord. “Net Profit” shall mean all cash rents payable by a transferee in excess of the Base   Rent and Additional Rent payable by Tenant under this Lease during the term of the Transfer (on   a per square foot basis if less than all of the Premises is transferred) after deducting the expenses   incurred or to be incurred by Tenant for the following: (1) any changes, alterations and   improvements to the Premises in connection with the Transfer, (2) any space planning,   architectural or design fees or other expenses incurred in marketing such space or in connection   with such Transfer, (3) any improvement allowance, rent abatement or other monetary   concessions provided by Tenant to the Transferee, (4) any brokerage commissions incurred by   Tenant in connection with the Transfer, (5) any attorneys' fees incurred by Tenant in connection   with the Transfer, (6) any lease takeover costs incurred by Tenant in connection with the   Transfer, (7) any costs of advertising the space which is the subject of the Transfer, with all such   costs amortized over the term of the Transfer, (8) the fair market value of any furniture that may   be included in connection with the transfer, and (9) the cost of the Tenant Improvements and   Alterations paid for by Tenant to the Premises on account of such transfer;   (e) 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    

 

53   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;   (f) Landlord’s consent to any such Transfer shall be effected on Landlord’s   forms, subject to changes by Tenant that are satisfactory to Landlord in its reasonable discretion;   (g) Tenant shall not then be in monetary or material non-monetary default   hereunder (beyond the expiration of all applicable notice and cure periods) hereunder in any   respect;   (h) Such proposed transferee, assignee or sublessee’s use of the Premises shall   be consistent with the Permitted Use;   (i) Landlord shall not be bound by any provision of any agreement pertaining   to the Transfer, except for Landlord’s written consent to the same;   (j) Tenant shall pay all transfer and other taxes (including interest and   penalties) assessed or payable for any Transfer;   (k) Landlord’s consent (or waiver of its rights) for any Transfer shall not   waive Landlord’s right to consent or refuse consent to any later Transfer;   (l) Tenant shall deliver to Landlord one executed copy of any and all written   instruments evidencing the Transfer; and   (m) Tenant shall deliver to Landlord a list of Hazardous Materials (as defined   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 Premises. 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 18.2.   26.5. Any Transfer that is not in compliance with the provisions of this Article or with   respect to which Tenant does not fulfill its obligations pursuant to this Article shall be void and   shall, at the option of Landlord, constitute a default under this Lease.   26.6. 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    

 

54   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.   26.7. [Intentionally omitted]   26.8. 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 (as defined below) by Tenant, Tenant shall have the right to collect such rent.   26.9. Notwithstanding any contrary provision of this Article 26, the original Tenant   named in this Lease (i.e., Illumina, Inc.) and any Tenant’s Affiliate (but not any other assignee or   any subtenant) shall have the right, without the receipt of Landlord's consent, but on prior written   notice to Landlord, to license (or, with respect to any space that contains less than 5,000 square   feet of Rentable Area, sublease) up to an aggregate of up to ten percent (10%) of the Rentable   Area of the Premises to individuals or entities (each, a "Business Affiliate") or to a Tenant   Affiliate, which license (or sublease) to a Business Affiliate or Tenant 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 Premises and other than   Business Affiliate's use of the Premises) with each such Business Affiliate; (ii) each such   Business Affiliate or Tenant Affiliate shall be of a character and reputation consistent with the   quality of the Buildings; (iii) each license shall clearly specify that it is only a contract right and   that the Business Affiliate or Tenant Affiliate is not a subtenant and has no interest in real   property; (iv) each such Business Affiliate's or Tenant Affiliate’s use of the Premises is in a   manner consistent with the Permitted Use; and (v) no demising walls or separate entrances shall   be constructed in the Premises to accommodate any such license or sublease. No such license or   sublease shall relieve Tenant from any liability under this Lease.   27. Subordination and Attornment.   27.1. Subject to Tenant’s receipt of a commercially reasonable subordination, non-   disturbance and attornment agreement, 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 Premises 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. Such commercially reasonable   subordination, non-disturbance and attornment agreements shall include an obligation by any   successor ground lessor or lender, mortgagor or lien holders to recognize Tenant’s rights   specifically set forth in this Lease so long as Tenant is not in default hereunder after any   applicable notice and cure period, and will be in a recordable form. Landlord hereby represents   to Tenant that there is no lender for the Project as of the date of this Lease.   27.2. Notwithstanding the foregoing, Tenant shall execute and deliver upon demand   such further instrument or instruments evidencing such subordination of this Lease to the lien of    

 

55   any such mortgage or mortgages or deeds of trust or lease in which Landlord is tenant as may be   required by Landlord. If any such mortgagee, beneficiary or landlord under a lease wherein   Landlord is tenant (each, a “Mortgagee”) so elects, however, this Lease shall be deemed prior in   lien to any such lease, mortgage, or deed of trust upon or including the Premises regardless of   date and Tenant shall execute a statement in writing to such effect at Landlord’s request. If   Tenant fails to execute any document required from Tenant under this Section within thirty (30)   days after written request therefor, such failure shall be a Default under this Lease.   27.3. Upon written request of Landlord and opportunity for Tenant to review, Tenant   agrees to execute any Lease amendments not (a) materially altering the terms of this Lease, (b)   increasing Tenant’s liability or obligations under this Lease, or (c) diminishing Tenant’s rights   under 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.   27.4. Subject to Section 27.1 above, 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 Premises, 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.   28. Defaults and Remedies.   28.1. 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 processing and accounting   charges and late charges that may be imposed on Landlord by the terms of any mortgage or trust   deed covering the Premises. Therefore, if any installment of Rent due from Tenant is not   received by Landlord within three (3) days after written notice that such payment is due, Tenant   shall pay to Landlord (a) an additional sum of three percent (3%) of the overdue Rent as a late   charge plus (b) interest at an annual rate (the “Default Rate”) equal to the lesser of (1) twelve   percent (12%) and (2) the highest rate permitted by Applicable Laws; provided, however that, so   long as Rent due from Tenant has not been late more often than two (2) times in any twelve (12)   month period or more than five (5) times over the Term of this Lease (whichever occurs first),   the foregoing cure period will be modified to provide that Tenant will not be subject to a late fee   unless (i) any payment of Base Rent is not received by Landlord within ten (10) days after written   notice that such payment is due and (ii) any payment of Additional Rent is not paid within thirty   (30) days after written notice that such payment is due. 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 and shall be payable as Additional Rent to Landlord due with the next   installment of Rent or within ten (10) business days after Landlord’s demand, whichever is   earlier. Landlord’s acceptance of any Additional Rent (including a late charge or any other   amount hereunder) shall not be deemed an extension of the date that Rent is due or prevent   Landlord from pursuing any other rights or remedies under this Lease, at law or in equity.   Notwithstanding the foregoing, Landlord shall waive the imposition of such late charge for the   first late payment of Rent due hereunder in any calendar year of the Term.    

 

56   28.2. 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.   28.3. If Tenant fails to pay any sum of money required to be paid by it hereunder or   perform any other act on its part to be performed hereunder, in each case within the applicable   cure period (if any) described in Section 28.4, then Landlord may (but shall not be obligated to),   without waiving or releasing Tenant from any obligations of Tenant, make such payment or   perform such act; provided that such failure would likely result in a violation of Applicable Laws   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 Premises and   act in accordance with its rights as provided elsewhere in this Lease. In addition to the late   charge described in Section 28.1, Tenant shall pay to Landlord as Additional Rent all sums so   paid or incurred by Landlord, together with interest at the Default Rate, computed from the date   such sums were paid or incurred.   28.4. The occurrence of any one or more of the following events shall constitute a   “Default” hereunder by Tenant:   (a) Tenant fails to make any payment of Rent, as and when due, or to satisfy   its obligations under Article 18, where such failure shall continue for a period of five (5) business   days after written notice thereof from Landlord to Tenant (provided that for the first late payment   in any twelve (12) month period, the cure period shall be ten (10) days after written notice);   (b) Tenant fails to observe or perform any obligation or covenant contained   herein (other than described in Sections 28.4(a) and 28.4(c)-(i)) to be performed by Tenant,   where such failure continues for a period of thirty (30) 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 thirty (30) days to cure, Tenant shall not be deemed to be in Default if Tenant   commences such cure within such thirty (30) day period and thereafter diligently prosecute the   same to completion;   (c) Tenant makes an assignment for the benefit of creditors;   (d) A receiver, trustee or custodian is appointed to or does take title,   possession or control of all or substantially all of Tenant’s assets;   (e) Tenant files a voluntary petition under the United States Bankruptcy Code   or any successor statute (as the same may be amended from time to time, the “Bankruptcy    

 

57   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;   (f) Any involuntary petition is filed against Tenant under any chapter of the   Bankruptcy Code and is not dismissed within one hundred twenty (120) days;   (g) A default exists under any other lease by and between Landlord or an   affiliate of Landlord and Tenant, after the expiration of any applicable notice and cure periods;   (h) Tenant fails to deliver an estoppel certificate in accordance with Article 17   and such failure continues for more than five (5) business days after Landlord delivers notice to   Tenant of such failure; or   (i) 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.   Notices given under this Section shall specify the alleged default and shall demand that Tenant   perform the provisions of this Lease or pay the Rent that is in arrears, as the case may be, within   the applicable period of time, or quit the Premises. No such notice shall be deemed a forfeiture   or a termination of this Lease unless Landlord elects otherwise in such notice   28.5. 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 has the right to do any or all of the following:   (a) Halt any Project and Base Building Work, Tenant Improvements and   Alterations and order Tenant’s contractors, subcontractors, consultants, designers and material   suppliers to stop work (and any resulting delay will be a Tenant Delay);   (b) Terminate Tenant’s right to possession of the Premises by any lawful   means, in which case Tenant shall immediately surrender possession of the Premises to Landlord.   In such event, Landlord shall have the immediate 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; and   (c) Terminate this Lease, in which event Tenant shall immediately surrender   possession of the Premises to Landlord. In such event, Landlord, shall to the extent allowed   under Applicable Laws, 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    

 

58   entitled to recover from Tenant all damages incurred by Landlord by reason of Tenant’s default,   including the sum of:   A. The worth at the time of award of any unpaid Rent which   had been earned at the time of such termination; plus   B. 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 the   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   C. 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 that portion of the loss   of Landlord’s rental income from the Premises that Tenant proves could have been reasonably   avoided; plus   D. 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,; plus   E. At Landlord’s election, such other amounts in addition to or   in lieu of the foregoing as may be permitted from time to time by Applicable Laws.   As used in Sections 28.5(c)(A) and (B), “worth at the time of award” shall be computed by   allowing interest at the Default Rate. As used in Section 28.5(c)(C), 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 percent (1%).   28.6. 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 and 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. For purposes of this Section, the following acts by Landlord will not   constitute the termination of Tenant’s right to possession of the Premises:   (a) Acts of maintenance or preservation or efforts to relet the Premises,   including alterations, remodeling, redecorating, repairs, replacements or painting as Landlord   shall consider advisable for the purpose of reletting the Premises or any part thereof; or   (b) The appointment of a receiver upon the initiative of Landlord to protect   Landlord’s interest under this Lease or in the Premises.   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.    

 

59   28.7. If Landlord does not elect to terminate this Lease as provided in Section 28.5, then   Landlord may, from time to time, recover all Rent as it becomes due under this Lease. At any   time thereafter, Landlord may elect to terminate this Lease and to recover damages to which   Landlord is entitled.   28.8. 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:   (a) First, to the payment of any indebtedness other than Rent due hereunder   from Tenant to Landlord;   (b) Second, to the payment of the costs and expenses of reletting the Premises,   including (i) alterations and repairs that Landlord deems reasonably necessary and advisable and   (ii) reasonable attorneys’ fees, charges and disbursements incurred by Landlord in connection   with the retaking of the Premises and such reletting;   (c) Third, to the payment of Rent and other charges due and unpaid hereunder;   and   (d) Fourth, to the payment of future Rent and other damages payable by   Tenant under this Lease.   28.9. 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 such waiver.   28.10. 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 (y) the date of Lease   termination and (z) the date Tenant surrenders possession of the Premises.   28.11. 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   28.12. 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.    

 

60   28.13. Landlord shall not be in default or liable for damages 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. If Landlord fails to cure a Landlord   default after the expiration of all applicable notice and cure periods, Tenant may, except as   otherwise provided for in this Lease and subject to any limitations contained in this Lease,   exercise all of its rights and remedies provided for in this Lease or at law or in equity for such   default; provided, however, that, notwithstanding anything to the contrary, Tenant shall not be   permitted to terminate this Lease unless a court of competent jurisdiction grants to Tenant a right   of termination.   28.14. 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 Premises 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 commercially   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.   29. Bankruptcy . In the event a debtor, trustee or debtor in possession under the Bankruptcy   Code, or another person with similar rights, duties and powers under any other Applicable Laws,   proposes to cure any default under this Lease or to assume or assign this Lease and is obliged to   provide adequate assurance to Landlord that (a) a default shall be cured, (b) Landlord shall be   compensated for its damages arising from any breach of this Lease and (c) future performance of   Tenant’s obligations under this Lease shall occur, then such adequate assurances shall include   any or all of the following, as designated by Landlord in its sole and absolute discretion:   29.1. Those acts specified in the Bankruptcy Code or other Applicable Laws as included   within the meaning of “adequate assurance,” even if this Lease does not concern a shopping   center or other facility described in such Applicable Laws;   29.2. A prompt cash payment to compensate Landlord for any monetary defaults or   actual damages arising directly from a breach of this Lease;   29.3. A cash deposit in an amount at least equal to the then-current amount of the   Security Deposit; or   29.4. The assumption or assignment of all of Tenant’s interest and obligations under   this Lease.    

 

61   30. Brokers.   30.1. 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 Cushman &   Wakefield of San Diego, Inc. (“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 Broker in relation to this Lease pursuant to a separate agreement between Landlord   and Broker.   30.2. Tenant represents and warrants that no broker or agent has made any   representation or warranty relied upon by Tenant in Tenant’s decision to enter into this Lease,   other than as contained in this Lease.   30.3. 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 Sections 30.1 and 30.2.   30.4. Tenant agrees to indemnify, save, defend (at Landlord’s option and with counsel   reasonably acceptable to Landlord) and hold the Landlord Indemnitees harmless from any and all   cost or liability for compensation claimed by any broker or agent, other than Broker, employed or   engaged by Tenant or claiming to have been employed or engaged by Tenant.   31. 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 interest in this Lease or in   Landlord’s fee title to or leasehold interest in the Property, as applicable, shall otherwise 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 the Lease or the Property.   Landlord or any subsequent Landlord may transfer its interest in the Premises or this Lease   without Tenant’s consent.   32. Limitation of Landlord’s Liability.   32.1. 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 Premises, (b) rent or other income from such real property receivable by   Landlord or (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 Premises.    

 

62   32.2. Neither Landlord nor any of its affiliates, nor any of their respective partners,   shareholders, directors, officers, employees, members or agents shall be personally liable for   Landlord’s obligations or any deficiency under this Lease, and service of process shall not be   made against any shareholder, director, officer, employee or agent of Landlord or any of   Landlord’s affiliates. No partner, shareholder, director, officer, employee, member or agent of   Landlord or any of its affiliates shall be sued or named as a party in any suit or action, and   service of process shall not be made against any partner or member of Landlord except as may be   necessary to secure jurisdiction of the partnership, joint venture or limited liability company, as   applicable. No partner, shareholder, director, officer, employee, member or agent of Landlord or   any of its affiliates 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,   officer, employee, member or agent of Landlord or any of its affiliates.   32.3. 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. 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 in its personal capacity, and no judgment shall be taken or writ of execution levied   against any partner, shareholder, director, employee or agent of Tenant in its personal capacity.   32.4. Each of the covenants and agreements of this Article 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.   33. Joint and Several Obligations. If more than one person or entity executes this Lease as   Tenant, then:   33.1. 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 such terms, covenants, conditions, provisions and   agreements shall be binding with the same force and effect upon each and all of the persons   executing this Agreement as Tenant; and   33.2. 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 any renewal, extension,    

 

63   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.   34. Representations. 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, (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. In addition,   Tenant represents that, to its current, actual knowledge (without duty of inquiry), it is not an   entity with whom U.S. persons or entities are restricted from doing business under regulations of   the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury (including   those named on OFAC’s Specially Designated and Blocked Persons List) or under any statute,   executive order (including the September 24, 2001, Executive Order Blocking Property and   Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism)   or other similar governmental action. 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. In addition, Landlord represents that, to its current, actual knowledge   (without duty of inquiry), it is not an entity with whom U.S. persons or entities are restricted   from doing business under regulations of the Office of Foreign Asset Control ("OFAC") of the   Department of the Treasury (including those named on OFAC's Specially Designated and   Blocked Persons List) or under any statute, executive order (including the September 24, 2001,   Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit,   Threaten to Commit, or Support Terrorism) or other similar governmental action.   35. 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 or otherwise in connection with SEC filings desired by either party   (but not required under Applicable Laws), provided that the releasing party has given the other   party reasonable notice of such requirement or SEC filing, 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. Either party may issue a   press release or similar announcement regarding this Lease, provided that the other party   reasonably approves the content of such press release in advance.    

 

64   36. Notices. Except as otherwise stated in this Lease, any notice, consent, demand, invoice,   statement or other communication required or permitted to be given hereunder shall be in writing   and shall be given by (a) personal delivery, (b) overnight delivery with a reputable international   overnight delivery service, such as FedEx, or (c) facsimile or email transmission, so long as such   transmission is followed within one (1) business day by delivery utilizing one of the methods   described in Subsection 36(a) or (b). Any such notice, consent, demand, invoice, statement or   other communication shall be deemed delivered (x) upon receipt, if given in accordance with   Subsection 36(a); (y) one business (1) day after deposit with a reputable international overnight   delivery service, if given if given in accordance with Subsection 36(b); or (z) upon transmission,   if given in accordance with Subsection 36(c). Except as otherwise stated in this Lease, any   notice, consent, demand, invoice, statement or other communication required or permitted to be   given pursuant to this Lease shall be addressed to Tenant at the Premises, or to Landlord or   Tenant at the addresses shown in Sections 2.9 and 2.10 or 2.11, respectively. Either party may,   by notice to the other given pursuant to this Section, specify additional or different addresses for   notice purposes.   37. Miscellaneous.   37.1. Tenant will be permitted to select the initial name for the Project, subject to   Landlord’s reasonable prior approval of such Project name. If at any time Tenant ceases to   occupy a minimum of three hundred sixty thousand (360,000) square feet of Rentable Area at the   Project, Landlord reserves the right to change the name of the Building or the Project in its sole   discretion.   37.2. 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 year-end   unconsolidated financial statements reflecting Tenant’s current financial condition audited by a   nationally recognized accounting firm. Tenant shall, within ninety (90) days after the end of   Tenant’s financial year, furnish Landlord with a certified copy of Tenant’s year-end   unconsolidated financial statements for the previous year audited by a nationally recognized   accounting firm. 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. If audited financials are not otherwise prepared, unaudited financials   complying with generally accepted accounting principles and certified by the chief financial   officer of Tenant as true, correct and complete in all respects shall suffice for purposes of this   Section. This Section shall not apply so long as Tenant is a publicly traded company and its   financial statements are readily available by public means, e.g., the internet.   37.3. 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.   37.4. The terms of this Lease are intended by the parties as a final, complete and   exclusive expression of their agreement with respect to the terms that are included herein, and   may not be contradicted or supplemented by evidence of any other prior or contemporaneous   agreement.    

 

65   37.5. Landlord or Tenant may, but shall not be obligated to, record a short form or   memorandum hereof. In the event Tenant wishes to record a short form memorandum, such   memorandum shall be in the form attached hereto as Exhibit M, and concurrently with Tenant’s   signature on such short form memorandum, Tenant will sign a termination of such short form   memorandum of lease in the form of Exhibit N which termination will be held by Landlord and   may be recorded by Landlord upon the expiration or earlier termination of this Lease. Within ten   (10) days after receipt of written request from Landlord, which Landlord may make at any time,   Tenant shall execute an updated termination of any short form or memorandum of lease recorded   with respect hereto (which termination will be held by Landlord in escrow until the termination   or expiration of this Lease). Tenant shall be responsible for the cost of recording any short form   or memorandum of this Lease, including any transfer or other taxes incurred in connection with   such recordation. Neither party shall record this Lease.   37.6. Where applicable in this Lease, the singular includes the plural and the masculine   or neuter includes the masculine, feminine and neuter. The words “include,” “includes,”   “included” and “including” mean “‘include,’ etc., without limitation.” The word “shall” is   mandatory and the word “may” is permissive. 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 of this   Lease. Landlord and Tenant have each participated in the drafting and negotiation of this Lease,   and 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.   37.7. Except as otherwise expressly set forth in this Lease, each party shall pay its own   costs and expenses incurred in connection with this Lease and such party’s performance under   this Lease; provided that, if either party commences an action, proceeding, demand, claim,   action, cause of action or suit against the other party arising out of or in connection with this   Lease, then the substantially prevailing party shall be reimbursed by the other party for all   reasonable costs and expenses, including reasonable attorneys’ fees and expenses, incurred by the   substantially prevailing party in such action, proceeding, demand, claim, action, cause of action   or suit, and in any appeal in connection therewith (regardless of whether the applicable action,   proceeding, demand, claim, action, cause of action, suit or appeal is voluntarily withdrawn or   dismissed).   37.8. Time is of the essence with respect to the performance of every provision of this   Lease.   37.9. Each provision of this Lease performable by Tenant shall be deemed both a   covenant and a condition.   37.10. Notwithstanding anything to the contrary contained in this Lease, Tenant’s   obligations under this Lease are independent and shall not be conditioned upon performance by   Landlord.   37.11. 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.    

 

66   37.12. 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.   37.13. 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 and assigns. This Lease   is for the sole benefit of the parties and their respective heirs, legatees, devisees, executors,   administrators and permitted successors and assigns, and nothing in this Lease shall give or be   construed to give any other person or entity any legal or equitable rights. Nothing in this Section   shall in any way alter the provisions of this Lease restricting assignment or subletting.   37.14. This Lease shall be governed by, construed and enforced in accordance with the   laws of the state in which the Premises are located, without regard to such state’s conflict of law   principles.   37.15. Tenant guarantees, warrants and represents that the individual or individuals   signing this Lease 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 such individual or individuals have signed.   37.16. This Lease may be executed in one or more counterparts, each of which, when   taken together, shall constitute one and the same document.   37.17. No provision of this Lease may be modified, amended or supplemented except by   an agreement in writing signed by Landlord and Tenant.   37.18. No waiver of any term, covenant or condition of this Lease shall be binding upon   Landlord unless executed in writing by Landlord. The waiver by Landlord of any breach or   default of any term, covenant or condition contained in this Lease shall not be deemed to be a   waiver of any preceding or subsequent breach or default of such term, covenant or condition or   any other term, covenant or condition of this Lease.   37.19. To the extent permitted by 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 Premises; or any claim of injury or damage related to this Lease   or the Premises.   37.20. Subject to Force Majeure or temporary interruptions due to casualty or repairs and   maintenance, Tenant will have access to the Premises 24 hours per day, 7 days per week   throughout the Term.   37.21. Whenever in this Lease a non-scheduled payment is required to be made by one   party to the other, but a specific date for payment is not set forth or a specific number of days    

 

67   within which payment is to be made is not set forth, or the words "promptly" and/or "on   demand," or the equivalent, are used to specify when such payment is due, then such payment   shall be due thirty (30) days (and when words such as “immediately” or the equivalent are used,   then such payment will be due ten (10) days) after the party which is entitled to such payment   sends written notice to the other party demanding payment.   37.22. For so long as Tenant leases a minimum of three hundred sixty thousand   (360,000) square feet of Rentable Area at the Project, Landlord shall not enter into a lease   agreement for any space in the Project with any of the following competitors of Tenant:   Affymetrix (including Parallele, True Materials, Panomics, and US Bio Chemicals), Agilent,   Beckman Coulter, BGI (including Complete Genomics), BioArray Solutions, Combimatrix,   Intelligent Biosystems, Thermo Fisher (including Life Technologies, Applied Biosystems,   Invitrogen, and Ion Torrent), Luminex, Natera, New England Biolabs, Pacific Biosciences,   Qiagen (including Intelligent Biosystems & Pyrosequencing), Roche, Sequenom, Ariosa   (including Tandem Diagnostics), Genomic Health, Oxford Nanopore (each, a “Competitor”);   provided, however, that nothing in this Lease shall prohibit Landlord from entering into a lease   agreement with any affiliate (which shall mean a company controlled by, under common control   with, or which controls such Competitor) of a Competitor (any such entity, a “Competitor   Affiliate”); provided, further, that, prior to entering into any lease agreement with a Competitor   Affiliate for space at the Project, Landlord shall be obligated to offer the space which Landlord   intends to lease to such Competitor Affiliate to Tenant in accordance with the terms, conditions   and provisions of this Section 37.22 (the “Competitor ROFR”).   37.22.1 In the event Landlord receives from a Competitor Affiliate a bona fide   offer to lease space in the Project on terms which Landlord would consider (any such space, the   “Competitor ROFR Premises”), Landlord shall provide written notice thereof to Tenant (the   “Notice of Offer”), specifying the terms and conditions (including lease term) of the proposed   lease to such Competitor Affiliate of the Competitor ROFR Premises. This Competitor ROFR   will not apply in the event an existing tenant of the Project becomes a Competitor Affiliate after   entering into its lease at the Project, in which case, Landlord will have no obligation to offer such   Competitor Affiliate’s space to Tenant, and Landlord will have the right to extend, expand or   permit such Competitor Affiliate to exercise any rights or options granted to it pursuant to its   lease without any liability or obligation to Tenant hereunder.   37.22.2 Within ten (10) days following its receipt of a Notice of Offer, Tenant   shall advise Landlord in writing whether Tenant elects to lease all (not just a portion) of the   Competitor ROFR Premises on the terms and conditions set forth in the Notice of Offer. If   Tenant fails to notify Landlord of Tenant’s election within such ten (10) day period, then Tenant   shall be deemed to have elected not to lease the Competitor ROFR Premises.   37.22.3 If Tenant timely notifies Landlord that Tenant elects to lease the   Competitor ROFR Premises on the terms and conditions set forth in the Notice of Offer, then   Landlord shall lease the Competitor ROFR Premises to Tenant upon the terms and conditions set   forth in the Notice of Offer. Landlord and Tenant will execute an amendment to this Lease   adding the Competitor ROFR Premises to the Premises on the terms set forth in the Notice of    

 

68   Offer (provided that the Term as to the Competitor ROFR Premises does not have to be   coterminous with the Premises) and otherwise in accordance with the terms and conditions of   this Lease. Notwithstanding anything in this Section 37.22 to the contrary, the Competitor   ROFR shall not apply during the last twelve (12) months of the Term (or any applicable Option   Term) unless Tenant has delivered an Option Exercise Notice pursuant to Section 39.3 of this   Lease further extending the Term.   37.22.4 If Tenant notifies Landlord that Tenant elects not to lease the   Competitor ROFR Premises on the terms and conditions set forth in the Notice of Offer, or if   Tenant fails to notify Landlord of Tenant’s election within the ten (10)-day period described   above, then Landlord shall have the right to consummate a lease with such Competitor Affiliate   of the Competitor ROFR Premises on such terms as Landlord and such Competitor Affiliate   deem acceptable (provided that in the event the terms previously offered to Tenant in the Notice   of Offer are altered so as to reduce the Net Effective Rental Rate (as defined below) by more than   five percent (5%) of the Net Effective Rental Rate listed in the Notice of Offer delivered to   Tenant, Landlord will be obligated to deliver a revised Notice of Offer stating such revised terms,   and Tenant will have three (3) business days after receipt of the revised Notice of Offer to deliver   written notice to Landlord exercising the Competitor ROFR on such revised terms). The term   “Net Effective Rental Rate” shall mean the rental rate, as adjusted to reflect the value of any   free rent, tenant improvement allowance or similar monetary concessions contained in the   revised Notice of Offer. If Tenant elects not to exercise the Competitor ROFR on such revised   terms (or fails to respond during such three (3) business day period), then Tenant will have no   further rights with respect to the Competitor ROFR Premises and Landlord shall have the right to   enter into a lease with such Competitor Affiliate on any terms and conditions it deems   acceptable.   37.22.5 Notwithstanding anything in this Article to the contrary, Tenant shall   not have the right to exercise the Competitor ROFR during such period of time that Tenant is in   monetary or material non-monetary Default under any provision of this Lease (and the time   period for Tenant to exercise the Competitor ROFR will not be extended by reason of Tenant’s   inability to so exercise the Competitor ROFR). Any attempted exercise of the Competitor ROFR   during a period of time in which Tenant is so in monetary or material non-monetary Default   (beyond the expiration of all applicable notice and cure periods) shall be void and of no effect.   37.22.6 The rights described in this Section 37.22 shall be personal to the   Tenant originally named in this Lease (i.e., Illumina, Inc.), may not be transferred to any other   entity, and may not be assigned to any third party except in connection with an assignment of   Tenant’s entire interest in this Lease to a Tenant’s Affiliate; provided, however, that the Tenant   originally named in this Lease (i.e., Illumina, Inc.) shall be fully and primarily liable under this   Lease for any Competitor ROFR Premises leased pursuant to this Section 37.22 regardless of   whether the right of first refusal granted under this Section 37.22 is exercised by the Tenant   originally named in this Lease (i.e., Illumina, Inc.) or by a Tenant’s Affiliate. Illumina, Inc. will   sign any reasonable document reasonably requested by Landlord to confirm the foregoing   continuing liability of Illumina, Inc. as an express condition precedent to Landlord’s obligation to   lease the Competitor ROFR Premises to any Tenant’s Affiliate.    

 

69   37.22.7 If Tenant exercises the Competitor ROFR, Landlord does not   guarantee that the Competitor ROFR Premises will be available on the anticipated   commencement date for the Lease as to such Competitor ROFR Premises due to a holdover by   the then-existing occupants of the Competitor ROFR Premises or for any other reason beyond   Landlord’s reasonable control.   38. Telecommunications Equipment. At any time during the Term, subject to the terms of   this Article 38, 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 Buildings leased solely by Tenant to   the extent the same is reasonably necessary for equipment used in connection with Tenant’s   business operations at the Project. Tenant shall comply with any roof or roof-related warranties.   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, conditioned or delayed) any covenants, conditions, or restrictions encumbering the   Premises 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 actual, documented and reasonable 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 Telecommunications Equipment or any failure to perform   any of its obligations under this Article 38.   39. Options to Extend Term. Tenant (or a Tenant’s Affiliate to whom Tenant has assigned its   entire interest in this Lease) shall have three (3) options (each, an “Option”) to extend the Term   by five (5) years each (each, an “Option Term”) as to the entire Premises (or as to any full   Building leased by Tenant; provided that in the event Tenant does not elect to exercise its Option   as to all Buildings in the Project, the Multi-Tenant Provisions will apply as of the   commencement date of such Option Term) upon the following terms and conditions. If Tenant   fails to renew the Term as to any Building within the Project, Tenant will have no further right or   Option with respect to those Buildings for which Tenant does not exercise the applicable Option   (e.g., if Tenant elects to exercise its Option only as to Building A, the Multi-Tenant Provisions   will apply and Tenant will have no further right or Option with respect to Building D, Building B   or Building C). Tenant may not exercise the second or third Option, as applicable, unless Tenant   has properly exercised the first and second Options in accordance with the terms of this Article   39. Any extension of the Term pursuant to an Option shall be on all the same terms and   conditions as this Lease, except as follows:    

 

70   39.1. Base Rent for the applicable Building(s) identified in the Option Exercise Notice   (as defined below) shall be adjusted on the first (1st) day of each Option Term. The Base Rent   during each Option Term shall equal the Fair Market Value for the applicable Option Term,   which Fair Market Value determination will include rental adjustments in accordance with   comparable transactions as determined as part of the Fair Market Value determination. "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/lab 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 Option Term within sixty   (60) days after Tenant delivers the Option Exercise Notice, 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) at comparable sites within the Bay Area   Peninsula submarket (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.   39.2. The rights described in this Section 39 shall be personal to the Tenant originally   named in this Lease (i.e., Illumina, Inc.), may not be transferred to any other entity, and may not   be assigned separately from this Lease except in connection with an assignment of Tenant’s   entire interest in this Lease to a Tenant’s Affiliate; provided, however, that the Tenant originally   named in this Lease (i.e., Illumina, Inc.) shall remain fully and primarily liable under this Lease   during any Option Term regardless of whether such Option was exercised by the Tenant   originally named in this Lease (i.e., Illumina, Inc.) or by a Tenant’s Affiliate. Illumina, Inc. will   sign any reasonable document reasonably requested by Landlord to confirm the foregoing    

 

71   continuing liability of Illumina, Inc. as an express condition precedent to Landlord’s obligation to   allow any Tenant’s Affiliate to exercise an Option.   39.3. Each Option is conditional upon Tenant giving Landlord written notice (“Option   Exercise Notice”) of its election to exercise such Option at least twelve (12) months prior to the   end of the expiration of the then-current Term. Time shall be of the essence as to Tenant’s   exercise of an Option. Tenant assumes full responsibility for maintaining a record of the   deadlines to exercise an Option. Tenant acknowledges that it would be inequitable to require   Landlord to accept any exercise of an Option after the date provided for in this Section.   39.4. Notwithstanding anything contained in this Article to the contrary, Tenant shall   not have the right to exercise an Option during any time period when Tenant is in monetary or   material non-monetary default after the expiration of any applicable notice and cure period, or 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 28.1 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.   39.5. 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 39.4.   40. Expansion Option. Upon a written request from Tenant, at any time during the   Expansion Exercise Period (as defined below), Tenant can request that Landlord provide (1) its   then-current calculation of the estimated Project Costs for the Expansion Space (as defined   below) based on a bid from Landlord’s general contractor, and (2) a detailed rent schedule for the   Expansion Space, which Landlord shall provide within thirty (30) days after receipt of Tenant’s   written request. In the event that, at any time within the first thirty-six (36) months after the   Phase 1 Rent Commencement Date subject to extension as set forth below (the “Expansion   Exercise Period”), Tenant would like to expand the Premises to include that certain Building to   be constructed by Landlord and referred to as Building C and containing approximately 160,000   square feet of Rentable Area, subject to measurement pursuant to Section 1.1 above (“Expansion   Space”), as further described on Exhibit A attached hereto, Tenant may do so by delivering   written notice to Landlord (“Expansion Notice”), which notice shall state that Tenant is   exercising its option (“Expansion Option”) to request that Landlord construct Building C and the   related parking facilities to accommodate Tenant’s expansion into the Expansion Space. If   Tenant delivers an Expansion Notice to Landlord within the Expansion Exercise Period, then the   Expansion Space will be added to the Premises leased by Tenant hereunder on terms and   conditions substantially equivalent to those applicable to the original Premises except that (i) the   Commencement Date as to Tenant’s lease of the Expansion Space will be the date (the   “Expansion Space Commencement Date”) which is nine (9) months after the Expansion Space is   delivered to Tenant in TI Ready Condition; provided that if the Expansion Space   Commencement Date is delayed because of a Tenant Delay (as defined the Work Letter), then   the Expansion Space Commencement Date shall be the date that the Expansion Space   Commencement Date would have occurred but for such Tenant Delay, and in the event there is    

 

72   a Landlord Delay or an Uncontrollable Delay which actually delays completion of the Tenant   Improvements (provided that no Uncontrollable Delays shall exceed 90 days regardless of the   actual number of days of Uncontrollable Delay)), then the nine (9) month period set forth above   will be extended by the number of days of such Landlord Delays and/or Uncontrollable Delays,   as applicable, and (ii) the annual Base Rent for the Expansion Space (the “Expansion Space Base   Rent”) will be equal to the sum of (a) the product of seven percent (7%) and the Project Costs (as   defined in Exhibit E) allocable to the Expansion Space, which shall be payable commencing as   of the Expansion Space Commencement Date (which will escalate pursuant to Section 6 above)   (the “Project Costs Component”), plus (b) the fixed portion of the Expansion Land Rent set forth   in Section 40.1(a) below (i.e., $1,574,809.60, but subject to increase pursuant to Section 6   above), which shall be payable commencing on the later of (1) the first day of the thirty-seventh   (37th) month after the Phase 1 Rent Commencement Date or (2) the Expansion Space   Commencement Date, and will be further subject to escalation as set forth in Section 6 above   (the “Land Rent Component”), (iii) the only tenant improvement allowance payable by Landlord   in connection with the Expansion Space will be an amount equal to Fifty Five Dollars ($55.00)   per square foot of Rentable Area in the Expansion Space, as measured in accordance with   Section 1.1 of this Lease, (iv) the Term Expiration Date as to the Expansion Space will be the   date that is fifteen (15) years after the Expansion Space Commencement Date and (v) the Project   and Base Building Work, including without limitation the Shell Schematic Design Documents,   Approved Plans, Design Development Documents, Project Cost Estimate and Final Budget, will   all be altered, prepared and/or approved as necessary to reflect the Expansion Space. Expansion   Space Base Rent will be payable in monthly installments equal to 1/12th of the Expansion Space   Base Rent as calculated pursuant to subsection (ii) of the foregoing sentence and otherwise in   accordance with the provisions of this Lease applicable to Base Rent (and further subject to   adjustment pursuant to the terms of Section 6 of this Lease). The Project and Base Building   Work with respect to the Expansion Space will be constructed in a manner which is comparable   to the initial Premises (and delivered in substantial accordance with the Specifications set forth in   Exhibit C). In the event Tenant properly exercises the Expansion Option, Landlord and Tenant   will execute an amendment to this Lease memorializing the addition of the Expansion Space to   the Premises within thirty (30) days after the date of the Expansion Notice (provided that the   execution of such an amendment will not be a condition precedent to the effectiveness of the   expansion), which Expansion Space Amendment shall include a detailed schedule of the   Expansion Space Base Rent. In order to exercise the Expansion Option hereunder, Tenant must   not be in Default under this Lease after expiration of applicable notice and cure periods at the   time of delivery of the Expansion Notice. The rights described in this Section 40 shall be   personal to the Tenant originally named in this Lease (i.e., Illumina, Inc.), may not be transferred   to any other entity, and may not be assigned separately from this Lease except in connection with   an assignment of Tenant’s entire interest in this Lease to a Tenant’s Affiliate; provided, however,   that the Tenant originally named in this Lease (i.e., Illumina, Inc.) shall be fully and primarily   liable under this Lease for the Expansion Space (if the Expansion Option is exercised), regardless   of whether the Expansion Option is exercised by the Tenant originally named in this Lease (i.e.,   Illumina, Inc.) or by a Tenant’s Affiliate, and Illumina, Inc. agrees to sign any reasonable   document reasonably requested by Landlord to confirm the foregoing continuing liability of   Illumina, Inc. as an express condition precedent to Landlord’s obligation to lease the Expansion   Space to any Tenant’s Affiliate regardless of whether the Expansion Option, Land Rent Option    

 

73   and/or Building C ROFR (as applicable) is exercised by the Tenant originally named in this   Lease (i.e., Illumina, Inc.) or by a Tenant’s Affiliate.   40.1 By delivery of written notice (“Land Rental Notice”) delivered to Landlord no   later than the day that is twenty-four (24) months after the Phase 1 Rent Commencement Date,   Tenant (or a Tenant’s Affiliate to whom Tenant has assigned its entire interest in this Lease) may   elect to extend the Expansion Option (such extension may be referred to as the “Land Rental   Option”) by agreeing to pay “Expansion Land Rent” as defined below, which Expansion Land   Rent will commence on the first day of the thirty-seventh (37th) month following the Phase 1   Rent Commencement Date; provided, however, that Tenant's right to provide the Land Rental   Notice shall continue unless Landlord provides written notice ("Reminder Notice") to Tenant of   Tenant's failure to timely provide such Land Rental Notice and Tenant fails to provide the same   within ten (10) days of Landlord's Reminder Notice (which Reminder Notice shall not be sent   earlier than that date which is twenty-four (24) months after the Phase 1 Rent Commencement   Date). The “Expansion Land Rent” shall mean an annual amount equal to the sum of (a)   $1,574,809.60, plus (b) the product of (i) seven percent (7%) and (ii) all Project Costs which are   allocated to Building C by Landlord based on the pro rata share of Building C to the overall   Rentable Area of the Project. Expansion Land Rent will be payable in monthly installments   equal to 1/12th of the Expansion Land Rent as calculated pursuant to the foregoing sentence and   otherwise in accordance with the provisions of this Lease applicable to Base Rent (and further   subject to adjustment pursuant to the terms of Section 6 of this Lease). In the event Tenant elects   to exercise the Land Rental Option, then Tenant’s Expansion Option will remain in full force and   effect and Tenant will continue to pay the Expansion Land Rent for so long as Tenant desires   (provided that the Land Rental Option will in no event extend beyond the Term of this Lease as   to Building A and Building D). In the event Tenant wishes to terminate the Land Rental Option,   it may do so by delivery of at least eighteen (18) months’ prior written notice, in which event the   Land Rental Option (and the Expansion Option) will terminate as of the date which is eighteen   (18) months after Landlord’s receipt of such termination notice. Landlord shall have all the same   rights and remedies for non-payment of Expansion Land Rent as it has for non-payment of Base   Rent hereunder. The rights described in this Section 40.1 shall be personal to the Tenant   originally named in this Lease (i.e., Illumina, Inc.), may not be transferred to any other entity, and   may not be assigned separately from this Lease except in connection with an assignment of   Tenant’s entire interest in this Lease to a Tenant’s Affiliate; provided, however, that the Tenant   originally named in this Lease (i.e., Illumina, Inc.) shall be fully and primarily liable under this   Lease for the Expansion Land Rent regardless of whether the Land Rent Option is exercised by   the Tenant originally named in this Lease (i.e., Illumina, Inc.) or by a Tenant’s Affiliate, and   Illumina, Inc. agrees to sign any reasonable document reasonably requested by Landlord to   confirm the foregoing continuing liability of Illumina, Inc. as an express condition precedent to   Landlord’s obligation to allow any Tenant’s Affiliate to exercise the Land Rental Option.   40.2 The parties hereby acknowledge that in the event Tenant exercises the Expansion   Option, the Term of this Lease as to the Premises and the Expansion Space will not expire on the   same date. Tenant shall have the option, exercisable by written notice (an “Expansion Extension   Notice”) delivered to Landlord within ninety (90) days after the Expansion Space   Commencement Date, to extend the Term Expiration Date for the Premises such that the Term of    

 

74   Tenant’s lease of the Premises will expire conterminously with the Expansion Space. In the   event Tenant delivers the Expansion Extension Notice within the time period set forth above, the   Term of this Lease as to the Premises shall be automatically extended such that Tenant’s lease of   the Premises will expire on the Term Expiration Date for the Expansion Space, and all terms and   conditions of this Lease as applicable to the Premises shall continue to apply during such   extended Term, including the bi-annual adjustment of Base Rent set forth in Section 6 above.   Tenant will sign a lease amendment memorializing such extension if requested by Landlord, but   such extension will be effective regardless of whether an amendment is entered. Tenant will not   have the right to exercise the above option in the event Tenant is in monetary or material non-   monetary default hereunder after the expiration of any applicable notice and cure periods. The   rights described in this Section 40.2 shall be personal to the Tenant originally named in this   Lease (i.e., Illumina, Inc.), may not be transferred to any other entity, and may not be assigned   separately from this Lease except in connection with an assignment of Tenant’s entire interest in   this Lease to a Tenant’s Affiliate; provided, however, that the Tenant originally named in this   Lease (i.e., Illumina, Inc.) shall be fully and primarily liable under this Lease regardless of   whether the extension right is exercised by the Tenant originally named in this Lease (i.e.,   Illumina, Inc.) or by a Tenant’s Affiliate, and Illumina, Inc. agrees to sign any reasonable   document reasonably requested by Landlord to confirm the foregoing continuing liability of   Illumina, Inc.   40.3 In the event (i) Tenant fails to exercise the Expansion Option or the Land Rental   Option, or (ii) the Expansion Option or Land Rental Option expire or are terminated in   accordance with the terms of this Article 40 or by lapse of time, then Landlord will be free to   develop Building C, together with all landscaping, parking facilities and structures, private drives   and other improvements and appurtenances within the Project related thereto or serving Building   C exclusively as reasonably designated by Landlord (the “Building C Site”); provided such   development will comply with the provisions of Article 12 of this Lease and Landlord will not   make any material changes to the configuration of the Project in connection with the   development of the Building C Site. Landlord will have sole control and discretion over the   design (provided that Landlord will not make material changes to the exterior appearance of   Building C), development and leasing of Building C (subject to Section 37.22 above and the   Building C ROFR described in Section 40.4 below).   40.4 In the event Tenant does not exercise its Expansion Option, Tenant shall have a   right of first refusal (“Building C ROFR”) as to any space in Building C, provided that such   Building C ROFR will only apply after the initial lease of the applicable portions of Building C   to third party tenant(s) (i.e., Tenant will have no rights with respect to the initial leasing of any   portion of Building C, regardless of when such initial lease is entered). After the initial lease of   any portion of Building C, if such space becomes available for lease to third parties, as   reasonably determined by Landlord (“Available Second Generation Space”), the Building C   ROFR shall apply on the terms and conditions set forth in this Section 40.4, subject to the rights   of any holder of a Superior Right (as defined below). To the extent that Landlord renews or   extends a then-existing lease with any then-existing tenant or subtenant of any space, or enters   into a new lease with such then-existing tenant or subtenant for the same premises, or allows an   existing tenant to exercise an option to expand, exercise a right of first refusal or first offer, such   rights shall be deemed “Superior Rights” and the affected space shall not be deemed to be    

 

75   Available Second Generation Space. In the event Landlord receives from a third party a bona   fide offer to lease Available Second Generation Space on terms which Landlord would consider,   Landlord shall provide written notice thereof to Tenant (the “Building C Notice of Offer”),   specifying the terms and conditions (including lease term) of a proposed lease to Tenant of the   Available Second Generation Space.   40.4.1 Within ten (10) days following its receipt of a Building C Notice of Offer,   Tenant shall advise Landlord in writing whether Tenant elects to lease all (not just a portion) of   the Available Second Generation Space on the terms and conditions set forth in the Building C   Notice of Offer. If Tenant fails to notify Landlord of Tenant’s election within such ten (10) day   period, then Tenant shall be deemed to have elected not to lease the Available Second Generation   Space.   40.4.2 If Tenant timely notifies Landlord that Tenant elects to lease the Available   Second Generation Space on the terms and conditions set forth in the Building C Notice of Offer,   then Landlord shall lease the Available Second Generation Space to Tenant upon the terms and   conditions set forth in the Building C Notice of Offer. Landlord and Tenant will execute an   amendment to this Lease adding the Available Second Generation Space to the Premises on the   terms set forth in the Building C Notice of Offer (provided that the Term as to the Available   Second Generation Space does not have to be coterminous with the Premises) and otherwise in   accordance with the terms and conditions of this Lease. Notwithstanding anything in this Section   40.4 to the contrary, the Building C ROFR shall not apply during the last twelve (12) months of   the Term (or any applicable Option Term) unless Tenant has delivered an Option Exercise Notice   pursuant to Section 39.3 of this Lease further extending the Term.   40.4.3 If Tenant notifies Landlord that Tenant elects not to lease the Available   Second Generation Space on the terms and conditions set forth in the Notice of Offer, or if   Tenant fails to notify Landlord of Tenant’s election within the ten (10)-day period described   above, then Landlord shall have the right to consummate the lease of the Available Second   Generation Space with a third party on such terms as Landlord deems acceptable (provided that   in the event the terms previously offered to Tenant in the Building C Notice of Offer are altered   so as to reduce the Net Effective Rental Rate (as defined below) by more than five percent (5%)   of the Net Effective Rental Rate listed in the Building C Notice of Offer delivered to Tenant,   Landlord will be obligated to deliver a revised Building C Notice of Offer stating such revised   terms, and Tenant will have three (3) business days after receipt of the revised Building C Notice   of Offer to deliver written notice to Landlord exercising the Building C ROFR on such revised   terms). The term “Net Effective Rental Rate” shall mean the rental rate, as adjusted to reflect   the value of any free rent, tenant improvement allowance or similar monetary concessions   contained in the revised Building C Notice of Offer. If Tenant elects not to exercise the Building   C ROFR on such revised terms (or fails to respond during such three (3) business day period),   then Tenant will have no further rights with respect to the Available Second Generation Space   and Landlord shall have the right to enter into a lease with a third party on any terms and   conditions it deems acceptable.   40.4.4 Notwithstanding anything in this Article to the contrary, Tenant shall not   exercise the Building C ROFR during such period of time that Tenant is in default under any   provision of this Lease (and the time period for Tenant to exercise the Building C ROFR will not    

 

76   be extended by reason of Tenant’s inability to so exercise the Building C ROFR). Any attempted   exercise of the Building C ROFR during a period of time in which Tenant is so in default shall be   void and of no effect.   40.4.5 The rights described in this Section 40.4 shall be personal to the Tenant   originally named in this Lease (i.e., Illumina, Inc.), may not be transferred to any other entity, and   may not be assigned to any third party except in connection with an assignment of Tenant’s   entire interest in this Lease to a Tenant’s Affiliate; provided, however, that the Tenant originally   named in this Lease (i.e., Illumina, Inc.) shall be fully and primarily liable under this Lease for   any Available Second Generation Space leased pursuant to this Section 40.4 regardless of   whether the right of first refusal granted under this Section 40.4 is exercised by the Tenant   originally named in this Lease (i.e., Illumina, Inc.) or by a Tenant’s Affiliate. Illumina, Inc. will   sign any reasonable document reasonably requested by Landlord to confirm the foregoing   continuing liability of Illumina, Inc. as an express condition precedent to Landlord’s obligation to   lease the Available Second Generation Space to any Tenant’s Affiliate.   40.4.6 If Tenant exercises the Building C ROFR, Landlord does not guarantee   that the Available Second Generation Space will be available on the anticipated commencement   date for the Lease as to such Available Second Generation Space due to a holdover by the then-   existing occupants of the Available Second Generation Space or for any other reason beyond   Landlord’s reasonable control.   40.5 Parking Structure Construction. Effective as of the date (“PS1 Trigger Date”)   which is the earlier of (i) the date upon which Tenant delivers an Expansion Notice to Landlord   pursuant to Section 40 above, (ii) the date upon which the Expansion Exercise Period (as the   same may be extended by the Land Rental Option pursuant to Section 40.1 above) ends, (iii) the   date upon which the Term with respect to any Building expires or (iv) the expiration or earlier   termination of this Lease (other than a termination due to a Landlord default), Tenant will be   obligated to pay for the cost to construct a parking structure (“PS1”) in the location labelled   “Parking Structure 1” on the Site Plan attached hereto as Exhibit A (as such Site Plan may be   modified as permitted hereunder). Landlord will perform the construction of PS1 in accordance   with the plans and specifications included within the Approved Plans. For clarity, Tenant’s   obligation to pay to construct PS1 will apply regardless of whether Tenant leases any space in   Building C and is independent of any right of expansion, extension or otherwise in this Lease. In   the event Tenant determines that it requires additional parking spaces prior to the PS1 Trigger   Date, Tenant may deliver written notice to Landlord requesting to accelerate the PS1 Trigger   Date to an earlier date as specified in such notice, in which case Landlord will construct PS1 as   soon as reasonably practicable after such accelerated PS1 Trigger Date. Landlord will provide   Tenant with monthly invoices for all costs incurred by Landlord during the construction of PS1,   which costs shall constitute Additional Rent due hereunder. All such invoices will be paid by   Tenant within thirty (30) days after Tenant’s receipt thereof.   In the event Tenant fails to pay any costs incurred by Landlord in connection with   construction of PS1, Landlord will have all rights and remedies against Tenant as it has for non-   payment of any other Rent due hereunder, including all rights set forth in Section 46 below. In   addition, in the event this Lease terminates prior to the construction of PS1 for any reason other   than a Landlord default, in lieu of making monthly payments during construction of PS1 as set    

 

77   forth above, Tenant will pay to Landlord a lump sum equal to the anticipated cost (based on a   competitive bid to at least three (3) general contractors selected by Landlord) to construct PS1   within thirty (30) days after receipt of an invoice from Landlord for such costs, which invoice   will be accompanied by the general contractor’s bid, without any deduction or offset whatsoever,   which obligation will survive the expiration or earlier termination of this Lease.   41. Right of First Refusal to Purchase. Provided that Tenant is not then in monetary or   material non-monetary default under this Lease, then if Landlord receives an offer to purchase   the Project or any individual Buildings within the Project on terms which Landlord would   agree to sell such Building(s) or Project to such third party (the applicable Building(s) or   Project to which such offer to purchase applies shall be referred to in this Article 41 as the   “Interest”), then Landlord shall provide Tenant with a summary of the pertinent economic and   non-economic terms of such offer, including the purchase price and any earnest money   deposits required (the “Offer Summary”), and Tenant shall have a period of ten (10) business   days from receipt thereof (the “ROFR Period”) within which to exercise its right (the “ROFR”)   to purchase the Interest under the terms contained in the Offer Summary. If Tenant is in   default, the foregoing shall not be read to prevent Tenant from curing the applicable default   and then exercising the ROFR once the default is cured if such cure is completed within the   applicable cure period, if any, expressly set forth in this Lease and the ROFR is exercised   within the period set forth herein (which period shall not be extended to allow for a cure of the   default).   41.1 For the avoidance of confusion, Tenant’s rights under this Article 41:   (a) shall be personal to the Tenant originally named in this Lease (i.e., Illumina,   Inc.), may not be transferred to any other entity, and may not be assigned separately from   this Lease except in connection with an assignment of Tenant’s entire interest in this   Lease to a Tenant’s Affiliate;   (b) shall be continuing and binding on Landlord's successors and assigns, and;   (c) shall apply only to a proposed sale of Landlord’s fee simple interest to a third   party for consideration and shall not apply in the event of: (i) a multi-asset portfolio sale   by persons holding a controlling interest in Landlord (and/or their affiliates), or (ii) a   recapitalization or financing transaction, including grants of easements, rights and   restrictions and the like (iii) any larger securities transaction involving the Interest or   (iv) a sale, transfer or other conveyance of any Interest in the Project to any parent,   subsidiary or affiliate of Landlord.   41.2 Tenant shall notify Landlord of its election to exercise the ROFR by giving   Landlord written notice (“ROFR Exercise Notice”) within the ROFR Period, in the manner set   forth herein for the giving of notice to Landlord. Within ten (10) business days thereafter,   Landlord and Tenant shall enter into a purchase agreement incorporating the economic and   other terms contained in the Offer Summary, which purchase agreement will otherwise contain   commercially reasonable terms consistent with comparable transactions involving the sale of a   project to the occupant thereof in the market area of the Project, including a thirty (30) day    

 

78   diligence period within which to obtain and review the then-current title report and secure an   ALTA survey for the Interest or conduct any other commercially reasonable diligence desired   by Tenant. Title will be insured by a title company reasonably acceptable to Landlord and   Tenant, and the parties will cooperate as required to allow the title company to issue a 2006   Form American Land Title Association extended coverage Owner’s Policy of Title Insurance   (or equivalent) in the amount of the purchase price upon closing, with such endorsements or   exceptions as Tenant may negotiate with the title company, at Tenant’s sole option and cost.   Landlord and Tenant shall consummate the purchase and sale of the Interest pursuant to the   terms of such purchase agreement, provided that such purchase agreement shall provide Tenant   at least thirty (30) days after entry into the purchase agreement to complete its due diligence   and fifteen (15) days thereafter within which to complete the purchase of the Interest. If   Landlord and Tenant are unable to agree on the terms of the purchase agreement within the ten   (10) business day period set forth above, then the ROFR Exercise Notice will be deemed   rescinded and Tenant’s ROFR shall thereafter be null and void and Landlord will be free to   convey the Interest to a third party on the terms set forth in the Offer Summary or terms   substantially equivalent thereto, and this ROFR will thereafter terminate as to such Interest. No   brokerage fees will be payable in connection with the exercise of this ROFR, and each party will   be responsible for the payment of any brokerage fee payable to any broker who claims to have   represented such party in connection with the purchase or sale pursuant to this ROFR.   41.3 Failure of Tenant to deliver the ROFR Exercise Notice within the required time   period shall be deemed an election by Tenant to not exercise the ROFR, and:   (a) Tenant shall have no further rights to exercise the ROFR thereafter (except   as set forth in (c) and (d) below), and   (b) Landlord shall then have the right for the next two hundred forty (240)   days to complete the transaction described in the Offer Summary for a purchase price that is   equal to or greater than ninety-five percent (95%) of the price set forth in the Offer Summary,   whether with the third party who submitted the unsolicited offer to purchase or with another third   party, unencumbered by the provisions of this Article, and   (c) If a sale of the Interest complying with subparagraph (b) does not occur   within the two hundred seventy (270) day period described therein, Landlord shall again comply   with the provisions of this Article 41 with respect to any further offer Landlord receives to   purchase the Interest which Landlord deems acceptable, and   (d) If Landlord intends to sell its Interest in response to an offer with respect   to which Tenant failed to deliver the ROFR Exercise Notice within the required time period, for   less than ninety-five percent (95%) of the price set forth in the applicable Offer Summary,   Landlord shall again provide Tenant with the opportunity to deliver a ROFR Exercise Notice   with respect thereto, and the ROFR Period shall be ten (10) business days as to such revised   Offer Summary.   Notwithstanding the foregoing, Tenant’s first refusal rights under this Article 41 shall be null and   void and of no further effect if Tenant delivers a ROFR Exercise Notice and then fails to close on    

 

79   the purchase of the Interest for any reason (other than as a result of a default by Landlord under   the purchase agreement). If Tenant completes a purchase of any Interest which is less than the   entire Project, Landlord and Tenant will enter into an amendment to this Lease terminating the   Lease as to the Interest purchased by Tenant and making such other adjustments as necessary to   reflect that the Premises no longer includes the Interest.   42. Multi-Tenant Provisions. In the event that (i) Tenant fails to exercise the Expansion   Option and/or Land Rental Option as to Building C or (ii) the Term with respect to any   Building(s) expires prior to the Term with respect to any other Building(s), the terms and   conditions of Exhibit G attached hereto will automatically apply, and the Lease will   automatically be modified in accordance with the terms and conditions set forth therein, effective   as of the date (“Trigger Date”) set forth in Landlord’s written notice to Tenant advising Tenant   that the Project is anticipated to become a multi-tenant Project.   43 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 shall at   all times be accompanied by a representative of Tenant before entering any Secured Area, and   Landlord will otherwise follow Tenant’s commercially reasonable security procedures. 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. Notwithstanding the foregoing,   Landlord will be permitted to enter into a Secured Area without a representative of Tenant in the   event of an emergency which poses an imminent risk of injury to persons or property where no   representative of Tenant is readily available, or in the event Tenant fails to provide a   representative after Landlord has made such request at least one (1) business day in advance.   44 Fiber Optic/Internet Services. Subject to the terms of this Lease, including without   limitation, Article 14 above, Tenant shall have the right, at Tenant’s sole cost, to contract with a   third party to connect fiber optic cable, including any equipment ancillary to such fiber optic   cabling (the “Fiber Optic Lines”) to any Buildings within the Project. Tenant may select the   service provider, subject to Landlord’s approval, which will not be unreasonably withheld,   conditioned or delayed. Landlord will have the right to review and reasonably approve any   agreements with such third parties, and in the event Landlord is required to execute any access   agreement, easement or similar agreement, such agreement will be in a form reasonably   acceptable to Landlord, and Tenant will pay all of Landlord’s reasonable documented costs to   review, negotiate and perform such agreement. The method of installation of such Fiber Optic   Lines, including location of any trenches and conduit, will be subject to Landlord’s reasonable   prior consent, and Tenant or its service provider will repair any damage to the Project and restore   all surface areas disturbed by the installation and maintenance of such Fiber Optic Lines. In   addition, Tenant will have the right to contract with its preferred internet service provider for   internet service to the Premises, at Tenant’s sole cost and expense. In the event any conduit,   cabling or similar equipment needs to be connected to the Premises in order to provide such   internet service, the terms and conditions set forth above relating to Fiber Optic Lines will apply   to the installation of such lines.    

 

80   45 Solar. Tenant may elect to install a solar power generating system and all equipment relating   thereto (“Solar Panels”) on the roof of any Building wholly leased by Tenant in order to supply   electrical power to the Premises, subject to Tenant’s compliance with all terms and conditions of   Articles 14 and 38 above. Tenant shall comply with any roof or roof-related warranties and   Applicable Laws. Tenant will be responsible for engaging a qualified structural engineer to   assess the weight distribution and requirements for the Solar Panels and Tenant will provide and   pay for any roof or structural support required to accommodate such Solar Panels and preserve   the roof warranty and structural integrity of the Building. All plans for the installation of such   Solar Panels will be subject to Landlord’s prior written consent, which shall not be unreasonably   withheld. Upon the expiration or earlier termination of this Lease, Landlord may elect to require   Tenant to remove such Solar Panels and repair all damage caused by such removal and restore   the Building to its condition prior to the installation of such system. Tenant, at its sole cost and   expense, shall inspect the Solar Panels at least annually (or more often, if more frequent   inspections are in keeping with industry standards), and correct any loose bolts, fittings or other   appurtenances and repair any damage to the roof caused by the installation or operation of the   Solar Panels. Tenant shall not permit the installation, maintenance or operation of the Solar   Panels to violate any Applicable Laws.   46. Completion Guaranty. In order to induce Landlord to enter into the Lease, and in   consideration of Landlord’s investment in the Project, and further acknowledging that Landlord   intends to rely on the guaranty set forth in this Section 46 in entering into this Lease and   investing in the Project, Tenant hereby irrevocably, absolutely and unconditionally warrants and   guarantees to Landlord, independently of all other obligations and rights of Tenant under this   Lease, and regardless of whether Tenant determines that it will not occupy the Premises under   this Lease for any reason, that it will (i) complete the Tenant Improvements in Building D and   complete the Tenant Improvements in a minimum of 160,000 square feet of Rentable Area in   Building A and/or Building B in accordance with the Approved TI Plans (as defined in the   Tenant Work Letter attached hereto as Exhibit B), with reasonable diligence after the Premises   are delivered to Tenant in TI Ready Condition (but in any event prior to the date which is two (2)   years after the date of delivery in TI Ready Condition, subject to Uncontrollable Delays   (provided that no Uncontrollable Delays shall exceed 90 days regardless of the actual number of   days of Uncontrollable Delay)), (ii) prior to the expiration of the initial Term of this Lease,   complete Tenant Improvements in the remaining portions of Building A and Building B to a   minimum level such that such remaining portions of Building A and Building B are in “warm   shell” condition, with such warm shell improvements constructed in a good and workmanlike   manner, in compliance with all Applicable Laws and constructed with finishes and materials   equal or better in quality to the materials and finishes used in the 160,000 square feet of Rentable   Area completed in accordance with the Approved TI Plans (e.g., with similar type and   quality/quantity of base building systems (including base building HVAC, electrical, plumbing   and fire life safety systems), with finished lobbies and restrooms, and complete elevators with   finished cabs); and (iii) reimburse Landlord for the cost to construct PS1 as set forth in Section   40.5 above (items (i), (ii) and (iii) the “Guaranteed Obligations”). Tenant makes this guaranty   with the expectation that it will receive substantial benefits from this Lease and from the   investment of Landlord in the Project.    

 

81   46.1 If Tenant fails to perform any part of the Guaranteed Obligations when due,   Tenant shall, immediately upon written demand of Landlord to Tenant, cure such failure to   perform the applicable part of the Guaranteed Obligations by performing, or causing to be   performed, the following: (a) recommencing construction of the Guaranteed Obligations (or   payment of the costs of PS1, as applicable) within thirty (30) days of notice from Landlord and   diligently prosecuting construction and/or completion of the Guaranteed Obligations at Tenant’s   sole cost and expense (subject only to Landlord’s obligation to disburse the TI Allowance); (b)   fully paying and discharging all claims, including for labor performed and material and services   furnished in connection with the construction and completion of the Guaranteed Obligations; and   (c) paying Landlord all reasonable attorneys’ fees and costs Landlord incurs in enforcing the   performance by Tenant of the Guaranteed Obligations, with interest at the Default Rate on all   past due portions of, and/or sums Landlord has advanced to satisfy portions of, the Guaranteed   Obligations pursuant to this Lease. Unless otherwise required by law or a specific agreement to   the contrary, all payments received by Landlord from Tenant shall be applied by Landlord to the   Guaranteed Obligations in such manner and order as Landlord desires in Landlord’s sole   discretion. It is expressly understood and agreed that Landlord may exercise all of its rights and   remedies under the Lease or at law or at equity, should any Default relating to any of the   Guaranteed Obligations exist that is not cured promptly after a demand by Landlord to Tenant   pursuant to this Section 46. If Tenant shall fail to perform the Guaranteed Obligations hereunder,   then Landlord shall have the right to, in addition to and cumulative of any other remedies   Landlord may have hereunder, at Landlord’s option and without any obligation to do so, upon   giving prior written notice to Tenant, proceed to perform the Guaranteed Obligations on behalf of   Tenant, and Tenant shall, upon written demand from Landlord, including an invoice, pay to   Landlord all such sums expended by Landlord in the performance of the Guaranteed Obligations   with interest thereon at the Default Rate. In connection with such completion, Landlord may   make changes to the Approved Plans as Landlord may reasonably deem necessary or as may be   required by any Governmental Authority. Notwithstanding anything to the contrary, Tenant   further agrees to indemnify and hold harmless Landlord against any loss, damage, cost or   expense (including, without limitation, reasonable attorneys’ fees and costs) that Landlord may   suffer or incur by reason of the breach or failure of the Tenant’s undertakings and agreements   pursuant to this Section 46; provided, however that Tenant’s indemnity obligation shall not   extend to loss of business, loss of profits or other consequential damage which may be suffered   by Landlord. This guaranty is not a guaranty of collection, but rather this guaranty is an   irrevocable, absolute, and unconditional guarantee of performance of the Guaranteed   Obligations; and if all or any part of the Guaranteed Obligations are not performed by Tenant as   and when required herein, Tenant shall perform the same immediately upon written demand by   Landlord.   46.2 Landlord’s rights hereunder shall not be exhausted by any action taken by   Landlord until all Guaranteed Obligations have been fully performed and this guaranty shall   continue until the Guaranteed Obligations have been fully performed. The liability of Tenant   hereunder shall be reinstated and revived, and the rights of Landlord shall continue with respect   to any amount at any time paid on account of the Guaranteed Obligations that shall thereafter be   required to be restored or returned by Landlord upon bankruptcy, insolvency, or reorganization of   Tenant, or any other person, or otherwise, all as though such amount had not been paid. The    

 

82   obligations of Tenant pursuant to this Section 46 shall survive the expiration or earlier   termination of this Lease.   [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]    

 

IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date first   above written.   LANDLORD:   BMR–LINCOLN CENTRE LP,   a Delaware limited partnership   By:   Name:   Title:   TENANT:   ILLUMINA, INC.,   a Delaware corporation   By:   Name:   Title:FY14 EX1027

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POOLED PATENTS AGREEMENT
This Pooled Patents Agreement (the “Agreement”) is made and entered as of 11:59 P.M. Pacific Time on December 2, 2014 (such date and time the “Effective Date”) by and among:
Illumina Inc., a Delaware corporation, having a place of business at 5200 Illumina Way, San Diego, CA 92122 (“Illumina”), and
Sequenom, Inc., a Delaware corporation, having a place of business at 3595 John Hopkins Court, San Diego CA 92121 (“Sequenom”),
W I T N E S S E T H:
WHEREAS, the Parties and others have entered into the Settlement Agreement dated as of the Effective Date (the “Settlement Agreement”) pursuant to which the Parties and others finally settled and resolved certain disputes on the terms and conditions thereof;
WHEREAS, both of the Parties desire to continue their current businesses related to the sale of services in the NIPT LDT Field;
WHEREAS, the Parties desire to pool together certain patent rights which each Party or its Affiliates owns or in-licenses in the Licensed NIPT Field, as Pooled Patents, and to offer them to third parties as a package license in an effort to help facilitate the broader exploitation in the marketplace of the technology claimed by the Pooled Patents;
WHEREAS, the Parties have agreed upon a price schedule for such licenses in the NIPT LDT Field, and upon mechanisms for adjusting such prices in response to changes in market conditions;
WHEREAS, the Parties desire for Illumina to have the exclusive right to Exploit the Pooled Patents in the NIPT IVD Field and have agreed on royalties that shall be payable by Illumina to Sequenom upon sale of NIPT IVD Products in the NIPT IVD Field;
WHEREAS, the Parties desire that the Pooled Patents be prosecuted, enforced, and licensed or sublicensed by Illumina or its Affiliates as set forth in this Agreement, and have set forth or referenced in this Agreement certain assignments, licenses, rights and obligations in that regard;
WHEREAS, the Parties have agreed upon one-time and recurring payments to be made between and among them in recognition of the rights and obligations each is receiving and incurring under this Agreement and the Ancillary Agreements; and
NOW THEREFORE, in consideration of the foregoing and the mutual covenants and promises contained herein, the Parties, intending to be legally bound, agree as follows:

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ARTICLE I 
 
DEFINITIONS AND INTERPRETATION
1.1    Definitions.  Unless otherwise specifically provided herein, the following Capitalized terms shall have the following meanings:
“Affiliate” means, with respect to a Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such Person at any time during the period for which the determination of affiliation is being made.  For purposes of this definition, the term “control” means, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of management policies of such Person, whether through the ownership of voting securities or by contract or otherwise.
“Agreement” has the meaning set forth in the preamble.
“Ancillary Agreement” means any agreement that is executed and delivered pursuant to the terms of this Agreement, including any agreement the execution and delivery of which is a condition precedent to the effectiveness of this Agreement, including as stated in Sections 2.4, 2.5, 2.6 and 2.7.
“Annual Report” has the meaning set forth in Section 3.4(c)(i).
“Authorized Lab” has the meaning set forth in Section 2.8(b).
“Business Day” means all days other than Saturdays, Sundays or a national or local holiday recognized in the United States or Hong Kong.
“Change of Control” means, with respect to a Person: (a) a transaction or series of related transactions that results in the sale or other disposition of all or substantially all of such Person’s assets; or (b) a merger or consolidation in which such Person is not the surviving corporation or in which, if such Person is the surviving corporation, the shareholders of such Person immediately prior to the consummation of such merger or consolidation do not, immediately after consummation of such merger or consolidation, possess, directly or indirectly through one or more intermediaries, a majority of the voting power of all of the surviving entity’s outstanding stock and other securities and the power to elect a majority of the members of such Person’s board of directors; or (c) a transaction or series of related transactions (which may include a tender offer for such Person’s stock or the issuance, sale or exchange of stock of such Person) if the shareholders of such Person immediately prior to the initial such transaction do not, immediately after consummation of such transaction or any of such related transactions, own, directly or indirectly through one or more intermediaries, stock or other securities of the entity that possess a majority of the voting power of all of such Person’s outstanding stock and other securities and the power to elect a majority of the members of such Person’s board of directors.

2

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 CERTAIN INFORMATION OMITTED AND FILED SEPARATELY WITH THE SEC.

“Claims” means, collectively, all losses, liabilities, damages, costs and expenses of any type or nature whatsoever, and all claims, demands, suits, actions, causes of action or other proceedings of any type or nature whatsoever relating thereto.
“Combined Product” means a bundle of products consisting of at least one  NIPT IVD Product and any other product (including any Illumina Product) that is not itself an NIPT IVD Product where the bundle is sold or transferred for a single price  in a territory in any royalty reporting period, where such NIPT IVD Product and other product are also sold and priced separately in such territory in such royalty reporting period.
“Confidential Information” means all information that (a) is provided by one Party to the other Party pursuant to this Agreement, and (b) if disclosed in writing or other tangible medium is marked or identified as confidential at the time of disclosure to the recipient or, if disclosed other than in writing, is acknowledged at the time of disclosure to be confidential and is documented as confidential by written notice to the recipient within thirty (30) days after disclosure.  Notwithstanding the foregoing, all reports, payments made and notices provided under this Agreement shall be Confidential Information of the providing Party, and all information subject to audits hereunder shall be Confidential Information of the audited Party, in each case whether or not so marked or identified, and subject to the exclusions (i) through (iv) immediately below.  Notwithstanding the foregoing, Confidential Information of a Party shall not include that portion of such information that, and only to the extent that, the recipient can establish by satisfactory evidence: (i) was known to the recipient without an obligation of confidentiality to disclosing Party or any other Person before receipt thereof from the disclosing Party, (ii) is disclosed to the recipient free of confidentiality obligations by a Third Party who has the right to make such disclosure, (iii) is or becomes part of the public domain through no fault of the recipient, or (iv) was independently developed by Persons on behalf of recipient without use of the information disclosed by the disclosing Party.
“CUHK Licenses” means, collectively, the CUHK Licenses (2008/2011) and CUHK Licenses 2014.
“CUHK Licenses (2008/2011)” means (a) that license agreement between the Chinese University of Hong Kong (“CUHK”) and Sequenom, No TS094849 titled License Agreement, effective as of September 16, 2008, (b)  that license agreement between CUHK and Sequenom, No TS116378 titled License Agreement, effective as of May 3, 2011 and (c) that license agreement between CUHK and Sequenom, No TS116379 titled License Agreement, effective as of May 3, 2011, as each of (a), (b) and (c) is amended as of the Effective Date and transferred by Sequenom to Illumina by assignment and novation as of the Effective Date.
“CUHK Licenses (2014)” means (a) that license agreement between CUHK and Illumina, No TS148570 titled License Agreement, effective as of the Effective Date, pursuant to which CUHK grants to Illumina certain licenses and other rights related to the inventions and other technology described in CUHK’s University Docket No. 10/MED/401/ITF, and (b) that license agreement between CUHK and Illumina, No TS148571 titled License Agreement, effective as of the Effective Date, pursuant to which CUHK grants to Illumina certain licenses 

3

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and other rights related to the inventions and other technology described in CUHK’s University Docket No. 11/MED/403.
“CUHK Patent” means any Patent licensed to Illumina or Sequenom under a CUHK License.
“Current Illumina Product” means, collectively: 
(a)any NIPT LDT Test that is first commercially performed by an Illumina Party as of or before the Effective Date; 
(b)any Illumina Product first commercially sold by an Illumina Party as of or before the Effective Date solely to the extent such Product was used by any Person on or prior to the Effective Date for NIPT, and any line extension or natural evolution of such Illumina Product, provided that such line extension or natural evolution is first commercially sold by an Illumina Party and used for NIPT prior to the fifth (5th) anniversary of the Effective Date and solely to the extent such Illumina Product is used by any Person for NIPT as set forth in subsections (a), (c), (d) and (e) herein;
(c)any NIPT LDT Test that is a line extension or natural evolution of any NIPT LDT Test set forth in the foregoing clause (a), provided that such line extension or natural evolution is first commercially performed by an Illumina Party prior to the fifth (5th) anniversary of the Effective Date;
(d)any NIPT LDT Test: 
(i)which is first commercially performed by an Illumina Party prior to the fifth (5th) anniversary of the Effective Date;
(ii)for which a Test Fee is paid in accordance with this Agreement; and
(iii)which is developed and performed solely and exclusively by or on behalf of Illumina or its Affiliates as its own product, and is sold
		
	(A)
	under brand names of Illumina or its Affiliates or

(B)under a private label for a Third Party sales agent, distributor or other reseller, provided that an NIPT LDT Test shall be excluded from this clause (d) if such NIPT LDT Test is performed in collaboration with a Third Party sales agent, distributor or other reseller; and
(e)any NIPT IVD Product:
(i)    which is first commercially sold by an Illumina Party prior to the fifth (5th) anniversary of the Effective Date;

4

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(ii)    for which a Royalty is paid in accordance with this Agreement; and
(iii)    which is developed and made solely and exclusively by or on behalf of Illumina or its Affiliates as its own product, and is sold
		
	(A)
	under brand names of Illumina or its Affiliates; or 

(B)    under a private label for a Third Party sales agent, distributor or other reseller, provided that an NIPT IVD Product shall be excluded from this clause (e) if such NIPT IVD Product is developed or manufactured for or in collaboration with a Third Party sales agent, distributor or other reseller in accordance with the product design of, such Third Party, including by an Illumina Party acting as a foundry, contract developer or manufacturer, or original equipment or device manufacturer.  
For the avoidance of doubt, 
(x) porting an NIPT LDT Test from one sequencing instrument to a different sequencing instrument for performance thereon is a natural evolution or line extension of that NIPT LDT Test;
(y) nothing in this Agreement prohibits Illumina from using a foundry, contract developer or manufacturer to develop and/or manufacture on its behalf any NIPT IVD Product; and 
(z) NIPT IVD Product that is covered by the elements of clauses (e)(i), (ii) and (iii) herein is not excluded from Current Illumina Product solely by as a result of being developed on its behalf, made on its behalf or distributed or re-sold by a Third Party. 
“Current Sequenom Product” means, collectively, (a) any NIPT LDT Test that is first commercially performed by a Sequenom Party as of or before the Effective Date; (b) any NIPT LDT Test that is a line extension or natural evolution of any NIPT LDT Test set forth in the foregoing clause (a), provided that such line extension or natural evolution is first commercially performed by a Sequenom Party prior to the fifth (5th) anniversary of the Effective Date; and (c) any NIPT LDT Test (i) which is first commercially performed by a Sequenom Party prior to the fifth (5th) anniversary of the Effective Date, (ii) for which a Test Fee is paid in accordance with this Agreement, and (iii) which is developed and performed solely and exclusively by or on behalf of Sequenom or its Affiliates as its own product and sold (A) under brand names of Sequenom or its Affiliates or (B) under a private label for a Third Party sales agent, distributor or other reseller, provided that an NIPT LDT Test shall be excluded from this clause (c) if such NIPT LDT Test is performed in collaboration with a Third Party sales agent, distributor or other reseller.  For the avoidance of doubt, porting an NIPT LDT Test from one sequencing instrument to a different sequencing instrument for performance thereon is a natural evolution or line extension of that NIPT LDT Test. 
“Existing Illumina License” has the meaning set forth in Section 2.11(a).

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“Existing Illumina Licensee” has the meaning set forth in Section 2.11(a).
“Existing Illumina Litigant” has the meaning set forth in Section 2.8(e).
“Existing Sequenom License” has the meaning set forth in Section 2.10(a).
“Existing Sequenom Licensee” has the meaning set forth in Section 2.10(a).
“Existing Sequenom Litigant” has the meaning set forth in Section 2.8(d).
“Expire” and grammatical variations  “expired” or “expiration” (with corresponding meaning for “unexpired”) in relation to a Patent shall include abandonment, failure to maintain, or a holding of invalidity or unenforceability by a final decision of a court or a governmental agency of competent jurisdiction (including without limitation any patent office of competent jurisdiction), from which no further appeal is possible, in addition to the ordinary expiration of a patent term of an issued patent.
“Exploit”  means (a) with respect to NIPT LDT Tests, Current Sequenom Products and those Current Illumina Products that are NIPT LDT Tests, to research, develop, offer for sale, have offered for sale, sell, have sold, market, have marketed and perform, and (b) with respect to NIPT IVD Products and all Current Illumina Products not addressed in clause (a), to research, develop, make, have made, use, have used, sell, have sold, offer to sell and have offered to sell, import and have imported, market and have marketed, perform and all other acts that, but for a license, would infringe a Patent in the country in which the act occurred.
“Granting Illumina Affiliate” has the meaning set forth in Section 2.2(c).
“Granting Sequenom Affiliate” has the meaning set forth in Section 2.3(c).
“Gross Test Fees” has the meaning set forth in Section 3.2(d).
“HDFN Product” has the meaning set forth in Section 2.16.
“Illumina Customer” means any Person that purchases Illumina Products.
“Illumina Customer License” has the meaning set forth in Section 2.8(a).
“Illumina In-Licensed Patents” means all Patents in-licensed by Illumina or its Affiliates under, and as set forth in, the Stanford License, [...***...] and, on and after the Effective Date, the CUHK Licenses.  The Illumina In-Licensed Patents as of the Effective Date are set forth on Annex II, provided that on and after the Effective Date, the Patents set forth on Annex IV (in-licensed by Sequenom from CUHK) shall be deemed added to Annex II, and Annex IV shall be deemed to no longer include any Patents.
“Illumina Owned Patents” means, collectively, (a) those United States and foreign patents and patent applications, including provisional applications, owned by Illumina or its Affiliates set forth on Annex I, (b) all divisional, continuation, continuation-in-part, and 

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substitute applications of any of the patents or patent applications set forth in the foregoing clause (a), (c) all patents that have issued or in the future issue from any of the patent applications set forth in the foregoing clauses (a) and (b), including utility model and design patents and certificates of invention, (d) all extensions, supplemental protection certificates, registrations, confirmations, reissues, reexaminations, inter partes reviews, post-grant reviews, restorations and renewals of or to any of the foregoing described patents and (e) any equivalents of any of the foregoing in clauses (a), (b), (c) and (d) in any jurisdiction.
“Illumina Patents” means, collectively, the Illumina In-Licensed Patents and Illumina Owned Patents. 
“Illumina Parties” means, collectively, Illumina and its Affiliates.
“Illumina Products” refers to any and all consumables, reagents, instruments, software and accessories commercialized by or on behalf of Illumina or its Affiliates.  
“Illumina Technology Partner” has the meaning set forth in Section 2.12(a).
“Isis License” means that license agreement between Isis Innovation Limited (“Isis”) and Sequenom, titled Exclusive License of Technology, effective as of October 14, 2005, and as amended on October 19, 2006 (1st amendment), November 5, 2007 (2nd amendment), November 3, 2009 (3rd amendment), November 29, 2012 (4th amendment), the letter amendment dated 26 October 2012, as further amended prior to the Effective Date, and which was terminated on or before the Effective Date. 
“Isis Patents” means the Patents originally owned by Isis and licensed by Isis to Sequenom under the Isis License, and that were sold, assigned and transferred to Sequenom before the Effective Date. The Isis Patents are set forth on Annex III.
“Lapidus Patents” means the Patents on Annex V.
“Law” means, individually and collectively, any and all laws, ordinances, orders, rules, rulings, directives and regulations of any kind whatsoever of any governmental or regulatory authority within the applicable jurisdiction.
“Licensed NIPT Field” means, collectively, the NIPT IVD Field and NIPT LDT Field.
[...***...].
[...***...].
“Net IVD Sales” means the gross sales price of any NIPT IVD Product invoiced by Illumina or its Affiliates, a Person that is sublicensee described in Section 3.3(c) or its Affiliates, for the first (and not any subsequent) arms-length sale of that NIPT IVD Product to any non-Affiliate Person and any use, transfer or sale set forth in (i), (ii) or (iii) hereinbelow, less, to the extent reasonable in the in vitro diagnostic industry and actually paid, applied or accrued, 

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(a) credits, allowances, discounts and rebates to, and chargebacks from the account of, such Person for spoiled, damaged, outdated and returned product; (b) freight and insurance costs incurred in transporting such product to such Persons; (c) cash, quantity and trade discounts, rebates and other price reductions for such product given to such Persons under price reduction programs that are consistent with price reductions given for in vitro diagnostic products; (d) sales, use, value-added and other direct taxes, incurred on the sale of such product to such customers; and (e) customs duties, surcharges and other governmental charges incurred in exporting or importing such product to such customers.  To the extent any NIPT IVD Product in any calendar quarter is (i) used by Illumina or its Affiliates or a Person that is a sublicensee described in Section 3.3(c) or its Affiliates (excluding NIPT IVD Products purchased from Illumina or its Affiliates in an arms-length sale, for which gross sales price is included in Net IVD Sales) in conjunction with a fee-for-service arrangement, or (ii) is transferred to a customer in the course of a reagent rental sales structure, or (iii) is sold in other than an arm’s length sale (including as part of a reagent rental program, operating or capital lease or comparable sales arrangement), the gross sales price of the NIPT IVD Product for purposes of calculating Net IVD Sales shall be the weighted average gross invoiced sales price of the applicable NIPT IVD Product for sales of such NIPT IVD Product to Persons purchasing comparable volumes of such NIPT IVD Product in an arm’s length sale in the applicable territory during such calendar quarter.
In the event an NIPT IVD Product is sold, transferred or bundled as part of a Combined Product, the gross invoiced sales price of such Combined Product shall be multiplied by the fraction A / (A+B) to determine the gross invoiced sales price of such NIPT IVD Product for purposes of calculating the Net Sales of such NIPT IVD Product, where A equals the weighted average gross invoiced sales price of such NIPT IVD Product sold separately, and B equals the weighted average gross invoiced sales price of such other product comprising such Combined Product sold separately, in each case sold to Persons purchasing comparable volumes of such NIPT IVD Product and/or other product in the applicable territory during the applicable royalty reporting period.
In the event an NIPT IVD Product is sold, transferred or bundled as part of a reagent rental program, operating or capital lease or comparable sales arrangement, then the gross invoiced sales price of such NIPT IVD Product shall equal the weighted average gross invoiced sales price of such NIPT IVD Product sold separately (other than as part of a reagent rental program, operating or capital lease or comparable sales arrangement) to Persons purchasing comparable volumes of such NIPT IVD Product in the applicable territory during the applicable royalty reporting period.
In the event of an NIPT IVD Product that is not a single use consumable and, instead, is intended for repeated use (e.g., software), the gross invoiced sales price of that NIPT IVD Product shall be (x) the actual gross invoiced sales price of that NIPT IVD Product at the time of sale and (y) any additional sales price that is based on usage, subscription, or other recurring occurrences, both (x) and (y) subject to applicable deductions permitted herein.  Each of the sales prices described in clause (x) and (y) constitutes Net IVD Sales for the calendar 

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quarter in which such sales price is invoiced or payable, subject to applicable deductions permitted herein. 
Notwithstanding anything in this Agreement to the contrary, in the case of NIPT IVD Product that is software, Illumina has sole discretion to transfer such NIPT IVD Product by license instead of sale, provided that all amounts payable to Illumina, its Affiliates, or a Person that is a sublicensee described in Section 3.3(c) or its Affiliates, in exchange for such transfer shall, for the purpose of the immediately preceding paragraph, be considered as the sales price set forth in (x) and (y). For the avoidance of doubt, separately invoiced services regarding installation, training, maintenance and similar activities that a software seller/licensor provides to a software purchaser/licensee shall not be included in Net IVD Sales. 
“Net LDT Sales” has the meaning [...***...].
“New Illumina Licensee” has the meaning set forth in Section 2.8(a).
“New Sequenom Licensee” has the meaning set forth in Section 2.9(b).
“NIPT” means in vitro cell-free nucleic acid-based non-invasive prenatal testing (including, without limitation, testing by massively parallel sequencing or digital PCR) of a biological sample (including but not limited to plasma, serum, whole blood, and urine) obtained from a pregnant woman, excluding oncology testing.
“NIPT IVD Field” means the field of conducting or performance of NIPT (in whole or in part) by use of an NIPT IVD Product.
“NIPT IVD Product” means a distributable in vitro diagnostic device that has either (a) received applicable Regulatory Approval for sale and use to conduct or perform (in whole or in part) NIPT or (b) is otherwise particularly labeled and marketed for use to conduct or perform NIPT (in whole or in part,) excluding from (a) and (b) general purpose products and components labeled for research use only.  For the purposes of this Agreement, an item is distributable if it is distributed on tangible medium or if accessed remotely (e.g., available in the cloud).
“NIPT LDT Field” means the field of conducting or performance of NIPT by use of an NIPT LDT Test, in a clinical laboratory, excluding the NIPT IVD Field. 
“NIPT LDT Test” means a non-distributable in vitro test (including a Site-specific IVD) performed in a clinical laboratory to conduct or perform NIPT, excluding all NIPT IVD Products, but in all cases (other than Site-specific IVD tests), whether or not the test requires Regulatory Approval for sale or use before or after the Effective Date.  As of the Effective Date, NIPT LDT Tests include, without limitation, the verifi® test that is performed by Illumina and its Affiliates and the MaterniT21® test and VisibiliTTM test that is performed by Sequenom and its Affiliates. 
 “Nominal Amount” has the meaning set forth in Section 3.4(c)(ii).

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“Other Platform License” has the meaning set forth in Section 2.8(f).
“One-Time Payment” has the meaning set forth in Section 3.1.
“Party” means Illumina or Sequenom and “Parties” means Illumina and Sequenom.
“Patent” means (a) any United States or foreign issued patent or pending patent application, including provisional application, together with (b) all divisional, continuation, continuation-in-part, and substitute applications of any such patent or patent application set forth in the foregoing clause (a), (c) all patents that have issued or in the future issue from any of the patent applications set forth in the foregoing clauses (a) and (b), including utility model and design patents and certificates of invention, and (d) all extensions, supplemental protection certificates, registrations, confirmations, reissues, reexaminations, inter partes reviews, post-grant reviews, restorations and renewals of or to any of the foregoing described patents and any foreign equivalents of any of the foregoing.
“Patent Royalty Term” means, on a country-by-country and product-by-product basis with respect to a particular NIPT IVD Product in the NIPT IVD Field, the time period beginning on the Effective Date and ending upon the date of expiration of the last to Expire Pooled Patent having at least one Valid Issued Claim covering the applicable NIPT IVD Product or its use in the NIPT IVD Field. 
“Person” means any individual, corporation, partnership, firm, company, joint venture, association (including trust association), joint-stock company, limited liability company, trust, unincorporated organization, governmental body, organization or other entity.
“Pooled Patents” means the Illumina Patents and the Sequenom Patents.
“Protective Action” has the meaning as set forth in Section 5.1(b).
“Regulatory Approval” means any governmental approvals, licenses, registrations, clearances or authorizations necessary for the marketing, sale, or use of an in vitro diagnostic device; provided that, (a) in the United States, as of the Effective Date Regulatory Approval is only that sought from the Federal Food and Drug Administration, (b) in the European Union, as of the Effective Date Regulatory Approval is only that sought through compliance with the In Vitro Diagnostic Medical Devices Directive (which on the Effective Date is Directive 98/79/EC) and (c) in jurisdictions not requiring any governmental approvals, licenses, registrations, clearances or authorizations for the marketing, sale, or use of an in vitro diagnostic device, Regulatory Approval shall be deemed to have been provided for a particular  in vitro diagnostic device upon the first commercial sale or marketing of that in vitro diagnostic device if that in vitro diagnostic device would require Regulatory Approval in the United States if marketed in the United States. 
“Royalty” and “Royalties” have the meaning set forth in Section 3.3(d).

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“Sample Agreement” means the Sample Transfer Agreement made and entered into as of the Effective Date, between the Parties.
“Sequenom In-Licensed Patents” means all Patents in-licensed by Sequenom or its Affiliates immediately prior to the Effective Date under, and as set forth in, the CUHK Licenses (2008/2011).  The Sequenom In-Licensed Patents immediately prior to the Effective Date are set forth on Annex IV, provided that on and after the Effective Date, the Patents set forth on Annex IV shall be deemed added to Annex II, and Annex IV shall be deemed to no longer include any Patents.
“Sequenom Owned Patents” means, collectively, (a) those United States and foreign patents and patent applications and provisional applications owned by Sequenom or its Affiliates set forth on Annex III and (solely if and to the extent Sequenom owns and has the right to grant licenses under the Lapidus Patents) the Lapidus Patents on Annex V, (b) all divisional, continuation, continuation-in-part, and substitute applications of any of the patents or patent applications set forth in the foregoing clauses (a), (c) all patents that have issued or in the future issue from any of the patent applications set forth in the foregoing clauses (a) and (b), including utility model and design patents and certificates of invention, (d) all extensions, supplemental protection certificates, registrations, confirmations, reissues, reexaminations, inter partes reviews, post-grant reviews, restorations and renewals of or to any of the foregoing described patents, and (e) any equivalents of any of the foregoing in clauses (a), (b), (c) and (d) in any jurisdiction.
“Sequenom Parties” means, collectively, Sequenom and its Affiliates.
“Sequenom Patents” means, collectively, the Sequenom In-Licensed Patents, Sequenom Owned Patents and Isis Patents.
“Sequencing Platform Manufacturer”  means a Person, other than Illumina or its Affiliates, (a) that  has raised at least $[...***...] in financing transaction(s) and is engaged as a primary business in the business of [...***...], collectively, “Sequencing Platform Products”), or (b) the annual aggregated revenue of such Person and its Affiliates for the most recent full calendar year is greater than $[...***...] and [...***...].
“Sequenom Technology Partner” has the meaning set forth in Section 2.12(a).
“Site-specific IVD” means a non-distributable in vitro diagnostic test that received Regulatory Approval for sale or use, which Regulatory Approval in the United States is pursuant to 21 CFR 814 or 21 CFR 807 Subpart E. 
“Stanford License” means that license agreement between Verinata and the Trustees of Leland Stanford Junior University (“Stanford”), titled the Second Amended and Restated Co-Exclusive Agreement, effective on September 14, 2012, as amended as of the Effective Date.

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“Stanford Sublicense Agreement” means the sublicense agreement from Illumina Parties to Sequenom Parties (excluding Affiliates that are Sequencing Platform Manufacturers) under the Stanford License, effective on the Effective Date.
“Technology Agreement” has the meaning as set forth in Section 2.12(a).
“Term” has the meaning as set forth in Section 4.1.
“Test Fee” has the meaning as set forth in Section 3.2(a).
“Test Fee and Royalty Report” has the meaning set forth in Section 3.4(a).
“Third Party” means any Person that is not a Party to this Agreement and is not an Affiliate of a Party to this Agreement.
“United States” means the United States of America and its territories and possessions.
“University Licenses” means the CUHK Licenses, Stanford License, [...***...].
“University Licensors” means CUHK, Stanford, [...***...].
“Valid Claim” means (a) any claim of an issued and unexpired Pooled Patent that has not been held unenforceable, unpatentable, or invalid by a final decision of a court or a governmental agency of competent jurisdiction (including without limitation any patent office of competent jurisdiction), from which no further appeal is possible (“Valid Issued Claim”), and (b) solely in the case of Pooled Patents other than Illumina Owned Patents, Isis Patents and Sequenom Owned Patents,  any claim of a pending patent application that is a Pooled Patent, excluding such claims that have been abandoned and such claims for which no further prosecution is possible in order to seek allowance and issuance of such claim (“Valid Pending Claim”). 
“Verinata” means Verinata Health, Inc.
1.2    Interpretation.  Except where expressly stated otherwise in this Agreement, the following rules of interpretation apply to this Agreement:
(a)    all references to a particular section or schedule or annex shall be a reference to that section or schedule or annex in or to this Agreement as it may be amended from time to time pursuant to this Agreement;
(b)    the headings are inserted for convenience only and shall be ignored in construing this Agreement;
(c)    words importing the masculine gender shall include the feminine and vice versa and words in the singular include the plural and vice versa;

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(d)    any phrase introduced by the terms “including”, “include”, “in particular” or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding or following those terms;
(e)    reference to any statute or regulation includes any modification or re-enactment of that statute or regulation;
(f)    all references to a “license,” “licensed”  or “licensing” include the grant or receipt of either a direct license from the owner of the rights licensed, a sublicense from a Party or Affiliate of rights licensed or sublicensed to such Party or Affiliate, or both, in each case as applicable to the particular rights being licensed and so referred to;
(g)    all references in this Agreement to “Illumina Patent” or “Illumina Patents” or to “Sequenom Patent” or “Sequenom Patents” is a reference to the defined terms, and is not a reference to all Patents of Illumina or all Patents of Sequenom;
(h)    all references in this Agreement to “Schedule 1” or the “Test Fee Schedule” is a reference to Schedule 1 as it may be amended from time to time in accordance with this Agreement; and
(i)    all references in this Agreement to NIPT LDT Tests in the NIPT LDT Field are understood to mean NIPT LDT Tests performed in the NIPT LDT Field, and all references in this Agreement to NIPT IVD Products in the NIPT IVD Field are understood to mean NIPT IVD Products in, for, or for use in the NIPT IVD Field.
ARTICLE II     
 
RIGHTS OF SEQUENOM AND ILLUMINA UNDER POOLED PATENTS
2.1    Rights Under Pooled Patents Generally.  This Section 2.1 is not intended to, and does not, convey any license rights under any Pooled Patent.  In the event of any conflict between the language in this Section 2.1 and the provisions of any Ancillary Agreement granting a license under any Pooled Patent, or the licenses granted pursuant to Sections 2.2 (License to Sequenom Under Illumina Owned Patents) and 2.3 (Licenses to Illumina Under Sequenom Owned Patents and Isis Patents) of this Agreement, the applicable provisions in the Ancillary Agreement, Section 2.2, or Section 2.3 shall control.
(a)    Illumina Rights.  Pursuant and subject to this Agreement (including the license grants in Sections 2.2 and 2.3), and the Ancillary Agreements, and the rights retained by Sequenom (and by Isis and its Affiliates as described in Schedule 7.1(b)) under the Sequenom Patents, the Illumina Parties will have:
(i)    the exclusive (even as to the Sequenom Parties), worldwide, sublicensable right under the Pooled Patents to Exploit NIPT IVD Products in the NIPT IVD Field, 

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(ii)    the exclusive, worldwide, sublicensable right under the Pooled Patents (excluding the Isis Patents) to Exploit NIPT LDT Tests in the NIPT LDT Field, subject to the non-exclusive rights granted to, or reserved by, the Sequenom Parties, and
(iii)    the nonexclusive, worldwide, sublicensable right under the Isis Patents to Exploit NIPT LDT Tests in the NIPT LDT Field.
Notwithstanding the foregoing, for the avoidance of doubt:
(1)    each of Sections 2.1(a)(i), 2.1(a)(ii) and 2.1(a)(iii) is subject to any and all applicable terms in the CUHK Licenses, including without limitation any territory restrictions and rights reserved by CUHK thereunder,
(2)    each of Sections 2.1(a)(i), 2.1(a)(ii) and 2.1(a)(iii) is subject to Section 2.8 (Conditions for Illumina Grant of Licenses Under Pooled Patents), and
(3)    Section 2.1(a)(ii) is subject to rights granted under Existing Sequenom Licenses.
(b)    Sequenom Rights.  Pursuant and subject to this Agreement (including the license grants in Sections 2.2 and 2.3, the exclusive rights of Illumina in Section 2.8(f)), the Ancillary Agreements, and the rights retained by the Sequenom Parties under the Isis Patents:
(i)    neither Sequenom nor any of its Affiliates will have any rights under the Pooled Patents (including under the Isis Patents) to Exploit NIPT IVD Products anywhere in the world, 
(ii)    the Sequenom Parties will have a non-exclusive, worldwide, non-sublicensable right under the Pooled Patents to Exploit NIPT LDT Tests in the NIPT LDT Field, except that, with respect to the Isis Patents, the Sequenom Parties will have the right to grant sublicenses to Persons [...***...] and thereby authorize, only under the Isis Patents, each such sublicensee to Exploit NIPT LDT Tests in the NIPT LDT Field in that sublicensee’s, or as applicable its Affiliates’, clinical laboratory,
(iii)    the Sequenom Parties will retain the rights under the Isis Patents, subject to the rights granted to Illumina Parties under the Isis Patents (exclusive to Exploit NIPT IVD Products in the NIPT IVD Field, and nonexclusive to Exploit NIPT LDT Tests in the NIPT LDT Field).  
Notwithstanding the foregoing, for the avoidance of doubt, (A) Sequenom acknowledges and agrees that the Sequenom Parties do not have any rights under Pooled Patents with respect to Exploiting NIPT IVD Products, and (B) each of Sections 2.1(b)(ii) and 2.1(b)(iii) is subject to: 
(1)    rights granted under Existing Sequenom Licenses, and

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(2)    any and all applicable terms in the University Licenses, including without limitation any field limitations, any territory restrictions and rights reserved by the applicable University Licensor thereunder or Isis.
2.2    License to Sequenom Under Illumina Owned Patents. On the terms and conditions of this Agreement, Illumina, on behalf of itself and its Affiliates, hereby grants to Sequenom and its Affiliates [...***...] a non-exclusive, irrevocable and perpetual (subject to Section 2.2(b)), non-transferable and non-assignable (except as permitted under Section 9.1) worldwide  non-sublicensable Test Fee -bearing license under the Illumina Owned Patents to Exploit NIPT LDT Tests in the NIPT LDT Field. 
(a)    The license rights set forth in Section 2.2(a) granted to any Affiliate of Sequenom shall automatically terminate with respect to such Person when it ceases to be an Affiliate of Sequenom. Persons (other than [...***...]) that become Affiliates of Sequenom after the Effective Date shall be licensed under the license rights set forth in Section 2.2(a) only for those licensed acts that occur on and after the date it becomes an Affiliate. 
(b)    Illumina agrees on behalf of itself, its Affiliates, and their respective successors and assigns that, to the extent any Illumina Affiliate (a “Granting Illumina Affiliate”) is the owner (including joint owner) or in-licensee of any Pooled Patents for which Sequenom Parties have been granted rights hereunder (including under Ancillary Agreements), or the Granting Illumina Affiliate has granted rights hereunder (including under Ancillary Agreements) to any Sequenom Party, such rights granted to Sequenom Parties (i) shall not terminate following the date, if any, that such Granting Illumina Affiliate ceases to be an Affiliate of Illumina and that such rights shall continue after such date, with such rights under Illumina Owned Patents continuing to be perpetual and irrevocable on and after such date, subject to Section 2.2(b) and (ii) to the extent the Sequenom Parties received rights only from a Granting Illumina Affiliate under Pooled Patents and not from Illumina or another Affiliate that is not a Granting Illumina Affiliate, such rights shall become a direct license from Illumina under Illumina Owned Patents or, if applicable, a direct license from the applicable University Licensor under, and pursuant to the terms of, the applicable Illumina In-Licensed Patents.
2.3    License to Illumina Under Sequenom Owned Patents and Isis Patents.On the terms and conditions of this Agreement, Sequenom, on behalf of itself and its Affiliates, hereby grants to Illumina and its Affiliates an exclusive, irrevocable and perpetual (subject to Section 2.3(b)), non-transferable and non-assignable (except as permitted under Section 9.1), worldwide license, with the exclusive right to grant sublicenses, under the Sequenom Owned Patents and Isis Patents, to Exploit NIPT LDT Tests in the NIPT LDT Field and to Exploit NIPT IVD Products in the NIPT IVD Field, provided that  the license is Royalty-bearing with respect to NIPT IVD Products and the license is Test Fee-bearing with respect to NIPT LDT Tests.  The foregoing license grant in the NIPT LDT Field is subject to (i) any and all Existing Sequenom Licenses, and (ii) the reservation of the non-exclusive right, on behalf of Sequenom and its Affiliates, to Exploit NIPT LDT Tests in the NIPT LDT Field and to grant sublicenses under the Isis Patents to Persons that are not Sequencing Platform Manufacturers for each such sublicensee 

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to Exploit NIPT LDT Tests in the NIPT LDT Field in its, or as applicable its Affiliates’, clinical laboratories. 
(a)    The license rights set forth in Section 2.3(a) granted to any Affiliate of Illumina shall automatically terminate with respect to such Person when it ceases to be an Affiliate of Illumina. Persons that become Affiliates of Illumina after the Effective Date shall be licensed under the license rights set forth in Section 2.3(a) only for those licensed acts that occur on and after the date it becomes an Affiliate.
(b)    Sequenom agrees on behalf of itself, its Affiliates, and their respective successors and assigns that, to the extent any such Sequenom Affiliate (a “Granting Sequenom Affiliate”) is the owner (including joint owner) or in-licensee of any Pooled Patents for which Illumina Parties have been granted rights hereunder (including under Ancillary Agreements), or has granted rights hereunder (including under Ancillary Agreements) to any Illumina Party, such rights granted to Illumina Parties (i) shall not terminate following the date, if any, that such Granting Sequenom Affiliate ceases to be an Affiliate of Sequenom and that such rights shall continue to be perpetual and irrevocable on and after such date, subject to Section 2.3(b) and (ii) to the extent the Illumina Parties received rights only from a Granting Sequenom Affiliate under Pooled Patents and not from Sequenom or another Affiliate that is not a Granting Sequenom Affiliate, such rights shall become a direct license from Sequenom under Sequenom Patents.
2.4    Amendments, Assignments, Licenses and Sublicenses Under CUHK Licenses.  The effectiveness of this Agreement is subject to the satisfaction in full, or the waiver by the Parties, of the due execution and delivery of the Settlement Agreement and the agreements required to be duly executed and delivered pursuant to the terms of ARTICLE V thereof, of the satisfaction of the conditions precedent set forth therein, and of the following additional conditions precedent:
(a)    The due execution and delivery by Sequenom and CUHK, and acknowledgement by Illumina, of the amendments to each of the CUHK Licenses (2008/2011) and the satisfaction of the conditions precedent set forth therein.
(b)    The due execution and delivery by Sequenom, Illumina, and CUHK, of the assignment and novation from Sequenom to Illumina of each of the CUHK Licenses (2008/2011) and the satisfaction of the conditions precedent set forth therein.
(c)    The due execution and delivery by Sequenom and Illumina of the sublicenses from Illumina to Sequenom Parties (excluding Affiliates that are Sequencing Platform Manufacturers) under each of the CUHK Licenses (2008/2011) and the satisfaction of the conditions precedent set forth therein.
(d)    The due execution and delivery by Illumina and CUHK of each of the CUHK Licenses (2014), and the satisfaction of the conditions precedent set forth therein.

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(e)    The due execution and delivery by Sequenom and Illumina of the sublicenses from Illumina to Sequenom Parties (excluding Affiliates that are Sequencing Platform Manufacturers) under each of the CUHK Licenses (2014), and the satisfaction of the conditions precedent set forth therein. 
2.5    Sublicense Under Stanford License.  The effectiveness of this Agreement is subject to the satisfaction in full, or the waiver by the Parties, of the due execution and delivery by Sequenom and Illumina of the Stanford Sublicense Agreement. 
2.6    Sublicense Under [...***...].  The effectiveness of this Agreement is subject to the satisfaction in full, or the waiver by the Parties, of the due execution and delivery by Sequenom and Illumina of the sublicense from Illumina Parties to Sequenom Parties (excluding Affiliates that are Sequencing Platform Manufacturers) under the [...***...]. 
2.7    Isis Patents.  The effectiveness of this Agreement is subject to the due execution and delivery by Sequenom and Isis of a valid and binding agreement pursuant to which Sequenom purchases from Isis all right title and interest in and to the Isis Patents and receives full legal and beneficial title thereto, subject to the rights described in Schedule 7.1(b), and the satisfaction of any and all conditions precedent set forth therein. Sequenom represents and warrants that the Isis Patents were sold, assigned and transferred to Sequenom, and the provisions of this Section 2.7 have been satisfied in full, before the Effective Date.
2.8    Conditions for Illumina to Grant Licenses Under Pooled Patents.
(a)    Test Fee; Conveyance of Customer License to Illumina Customers.  Subject to the terms and conditions of this Agreement (including Section 2.8(f) (Non-Illumina Platforms) and Section 2.9(a)(i) (Sequenom Granting Licenses Under Isis Patents), and rights expressly retained by Sequenom to grant sublicenses to Persons to Exploit NIPT LDT Tests in the NIPT LDT Field in such Person’s, or as applicable its Affiliates’, clinical laboratory under the Isis Patents), the Illumina Parties have the exclusive right to grant licenses to perform NIPT LDT Tests in the NIPT LDT Field to any Person under any and all the Pooled Patents, provided the license obligates the Person to pay a Test Fee on terms consistent with Section 3.2 of this Agreement (each a “New Illumina Licensee”).  Subject to the immediately preceding sentence, including obligations regarding Test Fees, the Illumina Parties may grant licenses under Pooled Patents to Illumina Customers who purchase Illumina Products, which licenses authorize the Illumina Customer, with each unit of consumable Illumina Product purchased, to Exploit, including a subset of the rights constituting Exploitation, NIPT LDT Tests in the NIPT LDT Field using Illumina Products (each such license an “Illumina Customer License”). 
(b)    [...***...].  
(c)    Conveyance of License for NIPT IVD Product.  With each NIPT IVD Product that is covered by a Valid Claim of a Pooled Patent that is sold by Illumina and its Affiliates, Illumina and its Affiliates shall include a label license under Pooled Patents authorizing use of that unit of NIPT IVD Product for the labeled intended use in the NIPT IVD Field under the applicable Pooled Patents.

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(d)    Third Parties in Litigation with Sequenom.  A Third Party in litigation over a Pooled Patent with Sequenom or a Sequenom Affiliate as of the Effective Date is an “Existing Sequenom Litigant.”  Sequenom has identified Existing Sequenom Litigants, and the Pooled Patents subject to each such litigation as of the Effective Date, on Schedule 2.8(d), which Schedule 2.8(d) shall be amended by notice from Sequenom in the event that a litigant settles or is dismissed or is otherwise dropped from the applicable litigation, and may be amended by mutual agreement of the Parties in writing from time to time.  [...***...].
(e)    Third Parties in Litigation with Illumina.  A Third Party in litigation over any Pooled Patent with Illumina or an Illumina Affiliate as of the Effective Date is an “Existing Illumina Litigant.”  [...***...].   Illumina shall provide Sequenom with a written accounting of any such amounts collected in settlement or as an award or reimbursements, and the allocations pursuant to the terms of this Section 2.8(e). [...***...].
(f)    Non-Illumina Platforms.
(i)    Subject to the terms and conditions of this Agreement, including the right of Sequenom Parties to grant sublicenses under Isis Patents only to a Person to Exploit NIPT LDT Tests in the NIPT LDT Field in that Person’s, or as applicable its Affiliates’, clinical laboratory, Illumina has the exclusive right to grant licenses to or to authorize any Person under the Pooled Patents to Exploit NIPT LDT Tests in the NIPT LDT Field or Exploit NIPT IVD Products in the NIPT IVD Field on any manufacturers’ platform, including non-Illumina platforms, subject to Sequenom’s prior written consent to the overall economic terms for any such license that expressly permits such Exploitation in the Licensed NIPT Field on a non-Illumina platform under terms that are less favorable to Sequenom set forth in this Agreement (“Other Platform License”), which consent shall not be unreasonably withheld, delayed or conditioned.  As between Sequenom and Illumina, Illumina shall have the right to retain all types of economic consideration (whether one-time payments, royalties, continuing payments or other payment types) paid by all Persons under an Other Platform License described in the preceding sentence until such time as Illumina has received under this sentence the aggregate amount of [...***...].  Thereafter, with respect to consideration received under Other Platform Licenses (A) consideration received for Exploitation of NIPT LDT Tests under Pooled Patents will be treated as Test Fees and shared between the Parties in accordance with Section 3.2(d), (B) consideration received for all sales of NIPT IVD Products under Pooled Patents will be treated under, and Illumina shall pay Royalties to Sequenom in accordance with, Section 3.3(c), and (C) all other types of economic consideration that are not within (A) or (B), (whether one-time payments, continuing payments or other payment types) paid by a Person under any such Other Platform License shall be shared between Illumina and Sequenom in the same proportion as for the Test Fees in accordance with Section 3.2(d)(i).
(ii)    In the event that Sequenom undergoes a Change of Control [...***...] (including as part of an assignment of this Agreement in a bankruptcy or other financial restructuring of Sequenom), the provisions of this Section 2.8(f) shall apply with respect to how rights under the Pooled Patents to Exploit NIPT LDT Tests in the NIPT LDT Field or Exploit 

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NIPT IVD Products on non-Illumina platforms may be made available to such Person, provided that in such event [...***...]. 
2.9    Conditions for Sequenom Grant of Licenses under Isis Patents.Right to License Only Under Isis Patents; No Right to License for NIPT IVD Products.
(i)    Without limiting the foregoing in Section 2.9(a)(i), Sequenom and its Affiliates may not, and shall not, grant licenses under the Pooled Patents, including the Isis Patents, to Exploit any NIPT IVD Product.
(b)    Test Fees.  [...***...], Sequenom agrees that any license granted by a Sequenom Party to a Person after the Effective Date that authorizes performance in the NIPT LDT Field under any Isis Patent(s) (“New Sequenom Licensee”), will include an obligation for that Person to pay a Test Fee on terms (including amounts) consistent with Section 3.2 of this Agreement and Sequenom will share Test Fees and other consideration received for such sublicenses in accordance with Section 3.2. 
(c)    Settlement with Existing Sequenom Litigants.  No term in this Agreement, or any Ancillary Agreement prohibits Sequenom from settling any litigation with an Existing Sequenom Litigant, and Sequenom shall be entitled as part of any such settlement to grant rights to an Existing Sequenom Litigant under rights Sequenom retains under any Isis Patent, provided that Sequenom shall use commercially reasonable efforts to negotiate and enter into an agreement with such Existing Sequenom Litigant obligating such Existing Sequenom Litigant to pay a Test Fee in at least the amount set forth in Schedule 1 for rights under any Isis Patent or group of Isis Patents that authorizes the Existing Sequenom Litigant to perform NIPT LDT Tests in NIPT LDT Field in its, or its Affiliates’, clinical laboratory.  [...***...].  Sequenom shall provide Illumina with a written accounting of any such amounts collected in settlement or as an award or reimbursements, and the allocations pursuant to the terms of this Section 2.9(c). Nothing in this Section 2.9(c) alters Illumina’s exclusive rights regarding NIPT IVD Product.
2.10    Existing Sequenom Licensees.
(a)    Sequenom and its Affiliates are parties to written agreements with Third Parties, entered into prior to the Effective Date and remaining effective as of the Effective Date, under which such Third Party (“Existing Sequenom Licensee”) is expressly authorized or licensed by Sequenom or its Affiliate to Exploit an NIPT LDT Test under one or more Sequenom Patents in the NIPT LDT Field (“Existing Sequenom License”).  The Existing Sequenom Licensees and Existing Sequenom Licenses are set forth on Schedule 2.10(a), which indicates which Existing Sequenom Licensees are Sequenom Technology Partners and other information. 
(b)    As set forth in and on the terms and conditions of this Agreement, Sequenom shall be responsible for collecting, and shall use commercially reasonable efforts to collect, Test Fees for Licensed NIPT LDT Tests performed by Existing Sequenom Licensees under a grant of any rights under any Pooled Patents on and after the Effective Date.  [...

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***...].  All Test Fees paid by Existing Sequenom Licensees on and after the Effective Date are subject to sharing between Illumina and Sequenom in accordance with Section 3.2(d).
(c)    For avoidance of doubt, no rights are granted under this Agreement to Existing Sequenom Licensees or Existing Illumina Licensees, however this Agreement shall not result in such existing licensees losing the rights under Sequenom Patents or under Illumina Patents that each was granted or received from Sequenom Party or an Illumina Party, respectively, prior to the Effective Date.
(i)    [...***...].
(ii)    [...***...]. 
(iii)    Notwithstanding the foregoing, if an Existing Sequenom Licensee is obligated as of the Effective Date under a written Agreement, to which it is a party with a Sequenom Party and was granted a right under Sequenom Patents (prior to assignment of CUHK License (2008/2011)) to perform a Licensed NIPT LDT Test in the NIPT LDT Field, in exchange for payment of Test Fees, in an amount that is $[...***...] or higher (based on currency exchange rates in effect on the Effective Date), for performance of such Licensed NIPT LDT Tests in its, or as applicable its Affiliates’, clinical laboratory, then the provisions of clause (i) of this Section 2.10(c) shall apply to that Existing Sequenom Licensee. 
2.11    Existing Illumina Licensees.
(a)    Illumina or its Affiliates are parties to written agreements with Third Parties, entered into prior to the Effective Date and remaining effective as of the Effective Date, under which such Third Party (“Existing Illumina Licensee”) is expressly authorized or licensed by an Illumina Party to Exploit NIPT LDT Test under one or more Pooled Patent in the NIPT LDT Field (“Existing Illumina License”). The Existing Illumina Licensees and Existing Illumina Licenses are set forth on Schedule 2.11(a), which indicates which Existing Illumina Licensees are Illumina Technology Partners and other information.  Existing Illumina Licenses include licenses or rights granted pursuant to supply agreements in effect on the Effective Date.
(b)    On the terms and conditions of this Agreement, Illumina shall be responsible for collecting, and shall use commercially reasonable efforts to collect, Test Fees for Licensed NIPT LDT Tests performed in NIPT LDT Field by Existing Illumina Licensees under a grant of any rights under any Pooled Patents on and after the Effective Date.  For the avoidance of doubt, and as set forth in Section 3.2, the amount of Test Fees paid by Existing Illumina Licensees on an per test or annual basis may be less or more than the amounts, or at a less or more expensive price tier of annual Test Fees, on Schedule 1. All Test Fees paid by Existing Illumina Licensees on and after the Effective Date are subject to sharing between Illumina and Sequenom in accordance with Section 3.2(d).

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2.12    Transfers of NIPT Technology and Know How.
(a)    Subject to Section 2.12(b) Illumina and Sequenom and their respective Affiliates each may enter into and perform under Technology Agreements with Third Parties as set forth in this Section 2.12. “Technology Agreement” means a written agreement under which (i) a Third Party receives from an Illumina Party certain know how and transfer of technology, and is authorized under Illumina Patents (for Technology Agreements entered into prior to Effective Date) or Pooled Patents (for Technology Agreements entered into on and after Effective Date) to use same to perform an NIPT LDT Test in NIPT LDT Field that is the same or substantially similar to the Illumina verifi® test or another Licensed NIPT LDT Test  covered by Pooled Patents, or (ii) a Third Party receives from Sequenom or its Affiliates certain know how and transfer of technology, and is authorized under Sequenom Patents (for Technology Agreements entered into prior to the Effective Date) or Isis Patents (for Technology Agreements entered into on and after Effective Date) to use same to perform an NIPT LDT Test in NIPT LDT Field that is the same or substantially similar to the Sequenom MaterniT21® test or another Licensed NIPT LDT Tests covered by Pooled Patents.  A Third Party who enters into a Technology Agreement with an Illumina Party is an “Illumina Technology Partner,” and a Third Party who enters into a Technology Agreement with Sequenom or an Affiliate is a “Sequenom Technology Partner.”  The Illumina Technology Partners and Sequenom Technology Partners as of the Effective Date are identified on Schedules 2.11(a) and 2.10(a), respectively. This Agreement shall be amended by the Parties on a quarterly basis or otherwise upon notification by one Party to the other, to revise Schedules 2.11(a) and 2.10(a) to identify any new Third Party that becomes an Illumina Technology Partner or a Sequenom Technology Partner after the Effective Date and to identify which Existing Illumina Licenses and Existing Sequenom Licenses (including those with existing Technology Partners) are terminated or expired.
(b)    Illumina shall obligate Illumina Technology Partners and Sequenom shall obligate Sequenom Technology Partners to pay a Test Fee on terms consistent with Section 3.2 of this Agreement.  [...***...]. 
(c)    Illumina represents that all Illumina Technology Partners under a Technology Agreement in effect as of the Effective Date have received rights under one or more Illumina Patents (prior to assignment and novation of the CUHK Licenses (2008/2011)) and, therefore, are Existing Illumina Licensees and, except as set forth on Schedule 7.1(c)(ix),  are subject to payment of Test Fees on terms consistent with Section 3.2 of this Agreement.
(d)    Sequenom represents that all Sequenom Technology Partners under a Technology Agreement in effect as of the Effective Date have received rights under one or more Sequenom Patents (prior to assignment and novation of the CUHK Licenses (2008/2011)) and, therefore, are Existing Sequenom Licensees and are subject to payment of Test Fees on terms consistent with Section 3.2 of this Agreement.
2.13    Non-Assertion Covenants.Sequenom, on behalf of itself and its Affiliates and their respective predecessors, successors and assigns (each a “Sequenom Covenant Party”), hereby covenants not to directly (e.g., by itself) or indirectly (e.g., through a “strawman”, other 

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involvement for or with a Third Party, or otherwise) (i) sue (or purport to sue) in any forum, (ii) assign to any Third Party any right to sue in any forum, nor (iii) in any way support or encourage any Third Party in suing in any forum, any Illumina Protected Party (as defined below) for infringement of any Patent that (x) is owned or controlled by Sequenom or any of its Affiliates as of or after the Effective Date and (y) has its earliest priority date as of or before the Effective Date, in each case excluding (1) the Pooled Patents, (2) in the event of the Change of Control of Sequenom, all Patents of the Third Party acquirer, successor or survivor in such Change of Control, and its Affiliates, immediately prior to such Change of Control, and (3) in the event of the Change of Control of either Sequenom or Illumina, all Patents first owned or controlled by Sequenom or any of its Affiliates immediately after such Change of Control, wherein such suit for infringement of any such Patent alleges that the Exploitation of any Current Illumina Product by Illumina or its Affiliates and, solely to the extent any of the following Persons are expressly authorized to Exploit any Current Illumina Product and are acting within the scope of such express authorization (including paying Test Fees if a (sub)licensee or if otherwise so required to make payment as a condition of authorization): manufacturers, distributors, resellers, (sub)licensees and customers (each of the Illumina Parties and the foregoing Persons an “Illumina Protected Party”), infringes, or induces or contributes to the infringement of, any such Patent.  With respect to subclause (3) herein, applications (and patents that issue therefrom) that are continuations, divisionals, continuation-in-parts, or substitute applications claiming earliest priority from a Patent that was subject to the covenant in this Section 2.13(a) prior to the date of the Change of Control, are deemed to be Patents first owned or controlled by Sequenom or any of its Affiliates before the date of that Change of Control. Notwithstanding the foregoing or anything in this Agreement, the covenant in this Section 2.13(a) shall not apply to the extent any Illumina Protected Party infringes (directly or indirectly) a Patent claim that covers general platform technology of a Sequencing Platform Manufacturer that is an Affiliate of Sequenom solely to the extent claiming multi-purpose (i.e., useful in multiple fields of use) consumables, reagents, instruments (or components of instruments), software or accessories.  This non-assertion covenant shall be a covenant that transfers with, and burdens, any sale, license, assign, or other disposition, transfer or grant of rights under the applicable Patent including with respect to the disposition of any rights in any license agreement pertaining thereto.  Each Sequenom Covenant Party shall impose the foregoing non-assertion covenant on any Third Party to which such Sequenom Covenant Party may sell, license, assign or otherwise dispose of, transfer or grant any rights to or under the applicable Patent, but only to the extent such rights sold, licensed, assigned or otherwise disposed of, transferred or granted give the Third Party the right to enforce such Patent against an Illumina Protected Party.
(a)    Illumina, on behalf of itself, its Affiliates and their respective predecessors, successors and assigns (each an “Illumina Covenant Party”), hereby covenants not to directly (e.g., by itself) or indirectly (e.g., through a “strawman”, other involvement for or with a Third Party, or otherwise) (i) sue (or purport to sue) in any forum, (ii) assign to any Third Party any right to sue in any forum, nor (iii) in any way support or encourage any Third Party in suing in any forum any Sequenom Protected Party (as defined below) for infringement of any Patent that is (x) is owned or controlled by Illumina or any of its Affiliates as of or after the Effective Date and (y) has its earliest priority date as of or before the Effective Date, in each case excluding (1) the Pooled Patents, (2) in the event of the Change of Control of 

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Illumina, all Patents of the Third Party acquirer, successor or survivor in such Change of Control, and its Affiliates, immediately prior to such Change of Control, and (3) in the event of the Change of Control of either Sequenom or Illumina, all Patents first owned or controlled by Illumina or any of its Affiliates immediately after such Change of Control, wherein such suit for infringement of any such Patent alleges that the Exploitation of any Current Sequenom Product by any Sequenom Party and, solely to the extent any of the following Persons are expressly authorized to Exploit any Current Sequenom Product and are acting within the scope of such express authorization (including payment of Test Fees if a (sub)licensee or if otherwise so required to make payment as a condition of authorization): distributors, resellers, (sub)licensees and customers (each of the Sequenom Parties and the foregoing Persons, a “Sequenom Protected Party”), infringes, or induces or contributes to the infringement of, any such Patent. With respect to subclause (3) herein, applications (and patents that issue therefrom) that are continuations, divisionals, continuation-in-parts, or substitute applications claiming earliest priority from a Patent that was subject to the covenant in this Section 2.13(b) prior to the date of the Change of Control, are deemed to be Patents first owned or controlled by Illumina or any of its Affiliates before the date of that Change of Control. Notwithstanding the foregoing or anything in this Agreement, the covenant in this Section 2.13(b) shall not apply to the extent any Sequenom Protected Party infringes (directly or indirectly) a Patent claim that covers general platform technology of an Illumina Party solely to the extent claiming multi-purpose (i.e., useful in multiple fields of use) consumables, reagents, instruments (or components of instruments), software or accessories.   This non-assertion covenant shall be a covenant that transfers with and burdens any sale, license assign, or other disposition, transfer or grant of rights under the applicable Patent, including with respect to the disposition of any rights in any license agreement pertaining thereto.  Each Illumina Covenant Party shall impose the foregoing non-assertion covenant on any Third Party to which such Illumina Covenant Party may sell, license, assign or otherwise dispose of, transfer or grant any rights to or under the applicable Patent, but only to the extent such rights sold, licensed, assigned or otherwise disposed of, transferred or granted give the Third Party the right to enforce such Patent against a Sequenom Protected Party. 
(b)    Each Sequenom Covenant Party hereby covenants not to directly (e.g., by itself) or indirectly (e.g., through a “strawman”, other involvement for or with a Third Party, or otherwise) (i) sue (or purport to sue) in any forum, (ii) assign to any Third Party any right to sue in any forum, nor (iii) in any way support or encourage any Third Party in suing in any forum  alleging that the Exploitation of any Current Illumina Product by any Illumina Party infringes any Pooled Patent. Nothing in this Section 2.13(c) alters any obligation to pay Test Fees and/or Royalties in accordance with the terms of this Agreement.
(c)    Each Illumina Covenant Party hereby covenants not to directly (e.g., by itself) or indirectly (e.g., through a “strawman”, other involvement for or with a Third Party, or otherwise) (i) sue (or purport to sue) in any forum, (ii) assign to any Third Party any right to sue in any forum, nor (iii) in any way support or encourage any Third Party in suing in any forum alleging that the Exploitation of any Current Sequenom Product by any Sequenom Party infringes any Pooled Patent. Nothing in this Section 2.13(d) alters any obligation to pay Test Fees and Royalties in accordance with the terms of this Agreement.

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2.14    [...***...] Patents.  Sequenom, on behalf of itself and its Affiliates, agrees [...***...], it shall not undertake to expand the scope of the claims of the Patents as such claims exist as of the Effective Date. 
2.15    [...***...] Patents.  Illumina, on behalf of itself and its Affiliates, represents and warrants [...***...].
2.16    HDFN Products.  Notwithstanding anything to the contrary in this Agreement, solely with respect to NIPT LDT Tests in each case that are solely directed to fetal blood antigen testing associated with hemolytic disease of the fetus and newborn (“HDFN Products”), each Party shall be permitted to Exploit such HDFN Product in the NIPT LDT Field and, if such Exploitation of an HDFN Product is covered by a Valid Claim of an Isis Patent, but not covered by a Valid Claim of any other Pooled Patent, then such Party shall have no obligation under this Agreement to collect or share a Test Fee or other consideration with the other Party.
2.17    Additional Rights.
(a)    The Patents set forth on Schedule 2.17(a) are exclusively licensed by Sequenom from CUHK and are not Pooled Patents. Upon Illumina’s request, Sequenom will negotiate in good faith commercially reasonable terms under which Sequenom would grant Illumina a sublicense under the Patents on Schedule 2.17(a).
(b)    The Patents set forth on Schedule 2.17(b) are solely owned by Sequenom and are not Pooled Patents.  In the event Sequenom licenses any of the Patents on Schedule 2.17(b) to any Third Party (other than in settlement of litigation), then upon Illumina’s request, Sequenom will negotiate in good faith with Illumina a license under the Patents on Schedule 2.17(b) [...***...].
ARTICLE III     
 
CONSIDERATION
3.1    One-Time Payment.  A one-time, non-refundable payment of fifty million dollars (US$50,000,000) shall be payable by Illumina, in three installments, in recognition of the settlement of the disputes, grants of exclusivity and other rights granted to Illumina as set forth in this Agreement and the Ancillary Agreements (the “One-Time Payment”).  Within one (1) Business Day after the Effective Date, Illumina shall pay to Sequenom forty four million dollars (US$44,000,000) of the One-Time Payment.  Within five (5) Business Days after the [...***...], Illumina shall pay to Sequenom two million dollars (US$2,000,000).  Within five (5) Business Days after the [...***...], Illumina shall pay to Sequenom four million dollars (US$4,000,000).  In the event [...***...], Illumina shall have the right to credit one million dollars (US$1,000,000) of the One-Time Payment against any and all amounts owed by Illumina to Sequenom under this Agreement until the full one million dollars (US$1,000,000) has been credited.  In the event [...***...], Illumina shall have the right to credit two million dollars (US$2,000,000) of the One-Time Payment against any and all amounts owed by Illumina to Sequenom under this Agreement until the full two million dollars (US$2,000,000) has been 

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credited.  Notwithstanding anything to the contrary in this Agreement, nothing in this Agreement is intended by the Parties to, and nothing in this Agreement shall [...***...].
3.2    Test Fees for Performance of Licensed NIPT LDT Test.
(c)    Selected Definitions.  For purposes of this Agreement:
(i)    A “Licensed NIPT LDT Test” means an NIPT LDT Test the performance of which is covered by a Valid Claim of a Pooled Patent, wherein the Person performing the NIPT LDT Test received the right, license or other authorization to Exploit that NIPT LDT Test under that Pooled Patent, subject to Section 3.2(b).
(ii)    An “Authorized Lab” means any Person that receives the right, license or other authorization pursuant to the terms and conditions of this Agreement to Exploit a Licensed NIPT LDT Test under at least one Pooled Patent. Without limitation, each of the following is an Authorized Lab to the extent of its rights under the Pooled Patent(s) under which it received right, license or other authorization:  (A) each Sequenom Party, (B) Sequenom Technology Partners, (C) Existing Sequenom Licensees (which includes Sequenom Technology Partners existing on Effective Date), (D) Illumina Parties, (E)  Illumina Technology Partners,  (F) Existing Illumina Licensees (which includes Illumina Technology Partners existing on Effective Date), (G) any and all Illumina Customers who receive an Illumina Customer License with purchase of Illumina Products, (H) any New Sequenom Licensee, and (I) any New Illumina Licensee.  For the avoidance of doubt, an Authorized Lab may be described by more than one category of (A) through (I).  An Authorized Lab shall be an Authorized Lab only for so long as it has a right, license or other authorization to Exploit Licensed NIPT LDT Tests under one or more Pooled Patents pursuant to the terms and conditions of this Agreement.  
(iii)    A “Test Fee” means the per test amount that is payable by an Authorized Lab when a Licensed NIPT LDT Test is performed by such Authorized Lab as a fee-for-service or reimbursable offering (whether or not Authorized Lab is paid or reimbursed for the test), such amount set in accordance with Section 3.2(c) and payable and/or creditable in accordance with Section 3.2(b).
(d)    Payment and Collection of Test Fees.  Illumina or Sequenom, as applicable, shall obligate, pursuant to written agreements therewith (or this Agreement with respect to Sequenom Parties and Illumina Parties), every Authorized Lab to pay a Test Fee for any and all (subject to Section 3.2(c)(ii)) Licensed NIPT LDT Tests performed by such Authorized Lab as follows:
(i)    Sequenom shall be responsible for all Test Fees that are payable under this Agreement for any and all Licensed NIPT LDT Tests performed by Sequenom Parties (Authorized Labs A), and Illumina shall be responsible for all Test Fees that are payable under this Agreement for any and all Licensed NIPT LDT Tests performed by Illumina Parties (Authorized Labs D).

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(ii)    Illumina shall use commercially reasonable efforts to collect Test Fees that are payable by Illumina Technology Partners, Existing Illumina Licensees, and Illumina Customers who receive an Illumina Customer License (Authorized Labs – E, F, G), and any other Authorized Lab (I) that receives the applicable right, license or authorization from an Illumina Party, for any and all Licensed NIPT LDT Tests performed by such Persons.
(iii)    Sequenom shall use commercially reasonable efforts to collect Test Fees that are payable by its Sequenom Technology Partners, Existing Sequenom Licensees, and any New Sequenom Licensees (Authorized Labs – B, C and H) for any and all Licensed NIPT LDT Tests performed by such Persons.
(iv)    In the event there is an Authorized Lab that is not in a category addressed in this Section 3.2(b), Illumina and Sequenom shall mutually agree on which of them shall be responsible for using commercially reasonable efforts to collect Tests Fees payable by such an Authorized Lab.
(v)    Each Party shall and shall cause its Affiliates to forego any conduct the intent of which is to prevent the collection or sharing of Test Fees or other consideration between the Parties in accordance with the terms of this Agreement.
(vi)    Any consideration received by an Illumina Party or a Sequenom Party from any Person for a license under a Pooled Patent to Exploit an NIPT LDT Test in the NIPT LDT Field, that is not in the form of Test Fees, shall be shared between Illumina and Sequenom in accordance with Section 3.2(d).
(vii)    To the extent any Illumina Party or Sequenom Party entered into prior to the Effective Date any agreement that obligates an Authorized Lab to pay a Test Fee for performance of an NIPT LDT Test that is covered by a Valid Issued Claim or any pending claim of a Pooled Patent (including pending claims of the Illumina Owned Patents, Sequenom Owned Patents and Isis Patents), and such Authorized Lab pays such Test Fee, then such NIPT LDT Test shall be deemed to be a Licensed NIPT LDT Test and all such Test Fees collected under such agreements shall be shared between the Parties in accordance with this Agreement.
(e)    Determination of Test Fee Amounts.  Test Fee amounts will be determined as follows:
(i)    Except as expressly stated otherwise in this Agreement (including in Section 3.2(c)(ii) (Exceptions to Amount of Test Fee), Section 2.8(e) (Third Parties in Litigation with Illumina), Section 2.8(f) (Non-Illumina Platforms) and Section 2.9(c) (Settlement with Existing Sequenom Litigants)), each Illumina Party or Sequenom Party shall enter into written agreements with Persons it grants rights, licenses, or authorizations as an Authorized Labs such that the Authorized Lab is obligated to pay Test Fees on a quarterly basis, and Sequenom Parties and Illumina Parties shall be obligated to pay Test Fees on a quarterly basis. (A) Except as stated below with respect to Licensed NIPT LDT Test for which the Test Fee is equal to [...***...].  With respect to Licensed LDT Tests performed by an Authorized Lab during the first calendar year of its agreement under which it received the right to perform Licensed 

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NIPT LDT Tests, the Test Fee amount that the Authorized Lab shall pay for Licensed NIPT LDT Tests performed during the first calendar year of that agreement shall be no lower than the amount of Test Fee on Schedule 1, Section 3 that corresponds to the good faith estimate of the volume that Authorized Lab will achieve at the end of that first calendar year. For agreements entered into within six months before the end of a calendar year, the first annual calculation of the Test Fee amount payable by the Authorized Lab will be for the period ending on December 31 of the first full calendar year of that agreement.  The quarterly Test Fees for an Authorized Lab shall be in amounts that result in at least the product of (1) the number of Licensed NIPT LDT Tests performed by that Authorized Lab in that quarter with (2) the Test Fee amount in effect for that Authorized Lab in that quarter, plus an amount equal to the product of the annual number of Licensed NIPT LDT Tests in (1) that are subject to the additional $[...***...] fee as set forth on Schedule 1 multiplied by $[...***...].  (B) With respect to each Licensed NIPT LDT Test for which the Test Fee is equal to [...***...].  For the avoidance of doubt, notwithstanding the minimum amounts payable in accordance with the first sentence of this Section 3.2(c), the full amount of all Test Fees collected by Illumina and Sequenom from Authorized Labs shall be shared between the Parties as set forth in Section 3.2(d) (Sharing of Test Fee Amounts.) 
(ii)    Exceptions to Amount of Test Fee.
(1)    Illumina Licensees.  Illumina shall use commercially reasonable efforts to collect a Test Fee from Existing Illumina Licensees (including Illumina Technology Partners in existence as of the Effective Date) and New Illumina Licensees in the amounts governed by the terms of the applicable Existing Illumina License (including an applicable Technology Agreement) as modified by this Section 3.2(c)(ii).  [...***...].  Notwithstanding anything to the contrary in this Agreement, any and all amounts for Test Fees received by Illumina from an Existing Illumina Licensee or New Illumina Licensee, including amounts in excess of the Test Fee that would otherwise be due under this Agreement, shall be subject to sharing with Sequenom in the same manner and amount as set forth in Section 3.2(d) (Sharing of Test Fees).
(2)    Existing Sequenom Licensees.  Sequenom shall use commercially reasonable efforts to collect a Test Fee from Existing Sequenom Licensees (including Sequenom Technology Partners in existence as of the Effective Date) and New Sequenom Licensees  in the amounts governed by the terms of the applicable Existing Sequenom License (including an applicable Technology Agreement) as modified by this Section 3.2(c)(ii).  If an Existing Sequenom Licensee is obligated under an Existing Sequenom License to pay a per test fee upon performance of a NIPT LDT Test that is less than the amount that Sequenom would otherwise be obligated to charge under the provisions of Sections 3.2(c)(i), then Sequenom shall not be under any obligation to raise the Test Fee amounts payable by that Existing Sequenom Licensee from the amount set forth in that Existing Sequenom License and the Test Fees amounts collected by Sequenom on such basis shall be shared with Illumina in accordance with this Agreement.  [...***...]. Notwithstanding anything to the contrary in this Agreement, any and all amounts for Test Fees (and their equivalents) received by Sequenom from an Existing Sequenom Licensee or New Sequenom Licensee, including amounts in excess of the Test Fee due under this 

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Agreement shall be subject to sharing with Illumina in the same manner and amount as set forth in Section 3.2(d) (Sharing of Test Fees).
(3)    With respect to Existing Sequenom Licensees and New Sequenom Licensees that are Authorized Labs, which have received less than full rights under all Pooled Patents to perform NIPT LDT Tests in the NIPT LDT Field, in the event an Illumina Party enters into a later agreement with such Authorized Lab to extend the rights under the Pooled Patents granted to such Authorized Lab under which such Authorized Lab is authorized to perform Licensed NIPT LDT Tests, Illumina shall be entitled to offer such extended rights at Test Fee amounts lower than those set forth in Schedule 1 in order to facilitate the later agreement with such Authorized Lab in view of the Test Fee amounts already owed pursuant the earlier agreement.  In any such case, Illumina shall not require such Authorized Lab or any existing Illumina Licensee to pay an additional amount of Test Fees (for the total rights received from Sequenom and from Illumina) that would result in the aggregate amount of Test Fees paid by that Authorized Lab to be in excess of the Test Fees set forth in Schedule 1. 
(4)    Research and Development.     The Test Fee is [...***...] for a Licensed NIPT LDT Test (A) that is performed by an Authorized Lab for internal research or development in the NIPT LDT Field, and (B) for which the Authorized Lab did not receive compensation on a per test basis (individually or as a lot of tests) for such Licensed NIPT LDT Test, and (C) the results of such Licensed NIPT LDT Test were not reported back to a subject or her physician or used for commercial purposes.
(iii)    [...***...].
(1)    Adjustment to Test Fee Schedule. Illumina shall have the right to adjust the Test Fee Schedule [...***...] on a market segment (including geographic or product segment) basis to reflect such market changes, upon written notice to and consent of Sequenom. Upon receipt of such notice [...***...], Sequenom shall consider in good faith whether or not to consent, such consent not to be unreasonably withheld, delayed or conditioned. As promptly as practicable, [...***...], Sequenom shall notify Illumina of its decision to consent or to withhold consent and its reasons therefor.  If Sequenom has not responded in writing within the specified time, then it shall be deemed to have consented and Illumina may proceed with such reduced Test Fee structure for that market segment. In the event of a dispute between the Parties regarding adjustment of amounts in this clause (1), the procedures set forth on Schedule 2 shall govern the resolution of such Dispute.
(2)    [...***...] Test Fees for Potential Future Authorized Labs. Each Party shall have the right to request that Test Fees be adjusted [...***...] for a particular Person that is a potential future Authorized Lab, upon notice to and consent from the other Party. Upon receipt of such notice requesting a reduced Test Fee structure for a particular Person (other than the Parties or their respective Affiliates), the other Party shall consider in good faith whether or not to consent, such consent not to be unreasonably withheld, delayed or conditioned, on a case by case basis, to charging [...***...] to such Person if such [...***...] is reasonably necessary or useful to promote adoption of Licensed NIPT LDT Tests in that Person’s clinical laboratory [...***...].  As promptly as practicable, but in no event later than [...***...] after 

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receiving such notice, the other Party shall notify the requesting Party of its decision to consent or to withhold consent and its reasons therefor.  If the other Party has not responded in writing within the specified time, then the other Party shall be deemed to have consented and the requesting Party may proceed with such [...***...] for that Authorized Lab [...***...].
(3)    In the event the Test Fee Schedule is adjusted [...***...] pursuant to the procedure in clause (1) in this Section 3.2(c)(iii), then Schedule 1 automatically shall be amended to reflect such [...***...] adjustment for the applicable market segment, and thereafter shall be applicable to Test Fees payable by the Illumina Parties, Sequenom Parties and new Authorized Labs authorized after the adjustment date and, pursuant to each Party’s rights to adjust Test Fees as set forth in Section 3.2(c)(ii), payable by the Parties’ then-existing licensees.
(f)    Sharing of Test Fees.
(i)    Sharing of Test Fees Between Illumina and Sequenom.  The aggregate Test Fees collected by Illumina and Sequenom in a particular calendar quarter from Authorized Labs, including the Test Fees payable by Sequenom Parties and Illumina Parties as Authorized Labs (in amounts prior to any allocation of Test Fees between Illumina and Sequenom or deductions or credits), are the “Gross Test Fees” Illumina and Sequenom will share Gross Test Fees as follows: 
(1)    For Licensed NIPT LDT Tests performed by Authorized Labs anywhere in the world, excluding [...***...], Illumina shall be entitled [...***...] of the Gross Test Fees collected and Sequenom shall be entitled to [...***...] of the Gross Test Fees collected, subject to Section 3.2(d)(ii).
(2)    For Licensed NIPT LDT Tests performed by Authorized Labs in [...***...], Illumina shall be entitled to [...***...] of the Gross Test Fees collected and Sequenom shall be entitled to [...***...] of the Test Fees collected, subject to Section 3.2(d)(ii).
(ii)    Illumina shall be responsible for any amounts owed to its third party licensors (including University Licensors), and Sequenom shall be responsible for any amounts owed to its third party licensors or Isis, provided that, Illumina may credit or [...***...] of all of Illumina’s payments to CUHK pursuant to the CUHK Licenses (including all amounts paid or payable to CUHK after termination or expiration of such CUHK Licenses, pursuant to the terms of any such CUHK License), based on performance of NIPT LDT Tests by Authorized Labs (including royalties, milestone payments, and any recurring payments to the extent related to performance of NIPT LDT Tests, and minimum guarantees, bonus payments, any payments to make up for shortfalls in payments not made by sub-licensee or a sublicensee of a sublicensee, but excluding Patent Costs, the sharing of which is addressed in Section 5.2) against the amounts owing to Sequenom based on the sharing of Gross Fees hereunder. Subject to Section 3.5 (Minimum Payments), payments by one Party to the other Party necessary to effectuate the sharing of Gross Test Fees set forth in this Section 3.2(d) shall be made in accordance with Section 3.4 (Payments and Reports).

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(iii)    If any University License, pursuant to which any Illumina In-Licensed Patents are licensed to Illumina, is terminated and Sequenom and its Affiliates obtain a direct license from the applicable University Licensor under such Illumina In-Licensed Patents, thereafter (1) Sequenom shall be responsible for the payment of all amounts owing to such University Licensor for sales by Sequenom and its Affiliates under such Illumina In-Licensed Patents, (2) Sequenom shall continue to be responsible for all payment obligations to Illumina set forth in this Agreement, including payment of Test Fees, and (3) Sequenom shall have the right to credit against Illumina’s portion of shared consideration under this Agreement all such amounts owing to such University Licensor (other than CUHK) for sales by Sequenom and its Affiliates under such Illumina In-Licensed Patents up to the amounts that Illumina would have paid to University Licensor if it had remained the direct licensee. 
3.3    Royalties on NIPT IVD Products.
(f)    For any country, in which there is, at the time of sale of the applicable NIPT IVD Product, a Valid Issued Claim in such country covering that NIPT IVD Product, Illumina shall pay Sequenom a royalty of [...***...] of Net IVD Sales of such NIPT IVD Product sold by Illumina and its Affiliates during the Patent Royalty Term in the NIPT IVD Field in such country.  Notwithstanding the foregoing [...***...] shall be due under this Agreement for sales of instruments, hardware or sale or sale/license of general or multi-purpose software.
(g)    For any country, other than [...***...], (i) in which there is not, at the time of sale of the applicable NIPT IVD Product, a Valid Issued Claim in that country covering that NIPT IVD Product, and (ii) if that NIPT IVD Product had been sold in another country at the same time, the sale or use thereof in such other country would be covered by a Valid Issued Claim in such other country, then in the case of (i) and (ii) Illumina shall pay Sequenom a royalty of [...***...] of Net IVD Sales of such NIPT IVD Product sold by Illumina and its Affiliates in the NIPT IVD Field during the period beginning on the Effective Date and ending on the [...***...] anniversary thereof.  Notwithstanding the foregoing [...***...] shall be due under this Agreement for sales of instruments, hardware or sale/license of general or multi-purpose software.
(h)    Illumina shall share with Sequenom any royalties received by Illumina or an Illumina Affiliate from a sublicensee (and its Affiliates), that is licensed under Pooled Patents to Exploit an NIPT IVD Product in the NIPT IVD Field, for sale of NIPT IVD Products in the NIPT IVD Field under such license to Pooled Patents, in the proportion set forth in Section 3.2(d). Illumina agrees that any sublicense granted to any Person under Pooled Patents to Exploit an NIPT IVD Product in the NIPT IVD Field will be for a royalty that is no less than [...***...]% of Net IVD Sales of NIPT IVD Products sold by such sublicensee (and its Affiliates) in the NIPT IVD Field.  For the avoidance of doubt, for the purpose of this Section 3.3(c), a Person that purchases NIPT IVD Product is not a sublicensee under Pooled Patents.  Notwithstanding the foregoing no Royalty shall be due under this Agreement for sales of instruments, hardware or sale/license of general or multi-purpose software.

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(i)    “Royalty” and “Royalties” means the amount payable to Sequenom pursuant to Sections 3.3(a), 3.3(b), 3.3(c) and 3.3(g).  Notwithstanding anything to the contrary in this Agreement, (i) except as stated in part (iii) herein, a Royalty shall be calculated and due under this Agreement with respect to any and all NIPT IVD Products in the NIPT IVD Field sold, and subject to, and solely with respect to, the terms of Section 3.3(g), NIPT Components sold and used with NIPT IVD Product(s) to perform (in whole) NIPT, (ii) in the event any Person (including Illumina Parties, Sequenom Parties or any other Authorized Lab) purchases any NIPT IVD Product from or on behalf of an Illumina Party or a sublicensee as permitted hereunder, (except as stated in part (iii) herein) including to perform an NIPT LDT Test in the NIPT LDT Field and a Royalty is payable in accordance with Section 3.3(a)-(c) or 3.3(g) for such sale of the NIPT IVD Product, then no Test Fee shall be payable under this Agreement for the performance of such NIPT LDT Test, (iii) in the event of sale of an NIPT IVD Product in the NIPT IVD Field wherein the purchaser is expressly authorized by Illumina Party or sublicensee as permitted hereunder to use such product to perform NIPT for tests not included in the product label or protocols for use (e.g., for genetic conditions not included in label), then no Royalty shall be payable in accordance with Section 3.3(a)- (c) or 3.3(g) for such sale of the NIPT IVD Product, however a Test Fee shall be payable under this Agreement for the performance of such NIPT (whether the NIPT is deemed to be performed in the NIPT IVD Field or the NIPT LDT Field) and (iv) except as set forth in clauses (x) and (y) of the fourth paragraph of the definition of Net IVD Sales, under no circumstances shall more than one Royalty be payable for the same unit of NIPT IVD Product or NIPT Component sold.
(j)    With respect to Net IVD Sales for NIPT IVD Products, Illumina shall be responsible for any amounts owed to its third party licensors (including University Licensors), and Sequenom shall be responsible for any amounts owed to its third party licensors, provided that, Illumina may credit or offset the full amount of all of Illumina’s payments to CUHK pursuant to the CUHK Licenses (including all amounts paid or payable to CUHK after termination or expiration of such CUHK Licenses, pursuant to the terms of any such CUHK License), based on sales of NIPT IVD Product (by Illumina Parties or sublicensees and their Affiliates) (including royalties, milestone payments, and any recurring payments to the extent related to sale of NIPT IVD Product, and minimum guarantees, bonus payments, any payments to make up for shortfalls in payments not made by sub-licensee or a sublicensee of a sublicensee, but excluding Patent Costs, the sharing of which is addressed in Section 5.2) against the Royalties owing to Sequenom on Net IVD Sales. 
(k)    Subject to Section 3.5, payments by one Party to the other Party necessary to effectuate the Royalties provisions set forth in this Section 3.3 shall be made in accordance with Section 3.4 (d).
(l)    To the extent Illumina, its Affiliates, or sublicensees described in Section 3.3(c),
(i)    sells an NIPT IVD Product in the NIPT IVD Field for conduct or performance (in part, but not in whole) of NIPT,

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(A)    for which a Royalty is payable pursuant to Section 3.3(a), (b) or (c) upon such sale, and
(B)    which sale (alone or together with NIPT Component(s)) conveys to the purchaser particular rights to conduct or perform (in whole) NIPT in accordance with product labeling or protocols of use without risk of infringing any Pooled Patent (e.g., convey through patent exhaustion, license, or covenant), and 
(ii)    sells together (whether under a single purchase order or under separate purchase orders) with such NIPT IVD Product other product(s) (whether NIPT IVD Product(s) or a non-NIPT IVD Product(s)) that is not an instrument, hardware, or general or multi-purpose software (such software being sold or licensed), but that is a required component, with NIPT IVD Product(s), to conduct or perform (in whole) NIPT, and (A) if each such other product(s) is the same or substantially the same as a product that, at the time of sale, is a component of an NIPT IVD Product of the seller that has received Regulatory Approval in the United States for conducting or performing (in whole) NIPT, or (B) in the event there is not such an NIPT IVD Product in (A), would be a component of an NIPT IVD Product of the seller for which an application for Regulatory Approval in the United States would be required for sale of such NIPT IVD Product for conducting or performing (in whole) NIPT (each such product an “NIPT Component”), then
(iii)    Illumina shall pay Sequenom 
(A)    a Royalty upon sale of such NIPT IVD Product sold, payable in accordance with Section 3.3(a), (b) or (c), as required,
(B)    a Royalty on each NIPT Component sold, payable (1) only during the time period stated in the applicable clause (a), (b) or (c) of Section 3.3, (2) as a percentage of net sales of each such NIPT Component calculated in the same manner as set forth for calculation of Net IVD Sales (for the purpose of this Section 3.3(g)(iii)(B), each instance of NIPT IVD Product in “Net IVD Sales” is replaced with NIPT Component) and (3) in the percentage stated in such applicable clause (a), (b) or (c) of Section 3.3, as required, and
(C)    Notwithstanding the foregoing or anything contrary in this Agreement, Illumina is not obligated to pay a Royalty on any NIPT Component that is used by an Authorized Lab to perform a Licensed NIPT LDT Test for which a Test Fee is owed to an Illumina Party or a Sequenom Party.
3.4    Payment and Reports.
(a)    Not later than forty five (45) calendar days after the last day of each calendar quarter, Sequenom and Illumina each shall provide the other with a written Test Fee and Royalty Report (each a “Test Fee and Royalty Report”), detailing separately for Japan and the rest of the world other than Japan (i) the names of all Third Party Authorized Labs for which that Party is obligated to collect Test Fees, (ii) the degree of compliance by each such Third Party Authorized Lab with its payment obligations under the applicable agreement  

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therewith, (iii) the aggregate number of Licensed NIPT LDT Tests performed by all such Authorized Labs, including by Sequenom Parties and Illumina Parties, during that period, including the number of Licensed NIPT LDT Tests that are subject to the additional $[...***...] added to the Test Fee and that are subject to a Test Fee in an amount equal to percentage of Net LDT Sales, (iv) the aggregate amount of Test Fees collected by such Party during that period, including for its own Licensed NIPT LDT Test and those of its applicable Affiliates, (v) the amount of the Test Fees collected by the reporting Party that is owed to the other Party during that period based on the sharing obligations set forth in Section 3.2(d) (Sharing of Test Fees), (vi) in the case of Illumina, the aggregate Net IVD Sales and the Royalties owed to Sequenom based on the Net IVD Sales, and the corresponding net sales and Royalties owed to Sequenom based on sales of NIPT Components as provided for in Section 3.3(g)(iii)(B) above, (vii) all other consideration received by such Party during that period that is subject to sharing hereunder and the amount thereof owing to the other Party hereunder, (viii) in the case of Illumina, all amounts paid by Illumina to CUHK during such period pursuant to the CUHK Licenses (including all amounts paid or payable to CUHK after termination of such CUHK Licenses, pursuant to the terms of any such CUHK License), including as set forth in this Agreement in Section 3.2(d)(ii) and 3.3(e), (ix) a reasonably detailed report on any anomalous activity during the period, such as a Third Party’s licensee’s refusal to pay an owed amount or any other material exception to the expected performance by such Authorized Lab in relation to this Agreement, (x) the aggregate Net LDT Sales, and the number of tests upon which Net LDT Sales is based, by such Party or its Affiliates or  (sub)licensees under any Pooled Patent, as applicable, (xi) the Patent Cost incurred by that Party, (xii) in the case of Illumina, all amounts creditable in accordance with Section 3.1, and (xiii) based on the foregoing (i) through (xii), the net amount owed to the other Party for that period before taking into consideration the other Party’s Test Fee and Royalty Report for the same period.  Each Party shall provide its quarterly Test Fee and Royalty Report in a Microsoft excel-compatible spreadsheet (electronic and hard copy), or in another mutually acceptable spreadsheet format.  In the event that a University Licensor of Illumina under any Pooled Patent requires in its University License additional reporting relating to sales of NIPT LDT Tests, which reporting is not set forth in this Agreement, upon Illumina’s request therefor, Sequenom shall include in its Test Fee and Royalty Report such additional reporting.
(b)    Not later than sixty (60) calendar days after the last day of each calendar quarter, or thirty (30) days after a Party receives the applicable Test Fee and Royalty Report from the other Party for such calendar quarter, whichever is later, (i) each Party shall reconcile the amount subject to sharing hereunder that is owed to the other Party under the Test Fee and Royalty Reports provided for such calendar quarter, after application of all offsets and credits permitted under this Agreement, including under Sections 3.1, 3.2(d)(ii), 3.3(e) and 3.4(b) and Patent Costs, and (ii)(A) if such reconciliation shows that Illumina owes to Sequenom a net aggregate amount of consideration subject to sharing hereunder for such calendar quarter, then Illumina shall pay such net aggregate amount to Sequenom, and (B) if such reconciliation shows that Sequenom owes to Illumina a net aggregate amount of consideration subject to sharing hereunder or subject to reimbursement hereunder for such calendar quarter, then Sequenom shall pay such net aggregate amount to Illumina.  Making or accepting a payment made under this 

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Section 3.4(b) shall not constitute an admission by a Party or conclusive evidence of the correctness of any amount so paid or accepted.
(c)    Annual Reporting and True-Up.
(iv)    Not later than ninety (90) calendar days after the last day of each calendar year, or forty five (45) days after a Party receives from the other Party the Test Fee and Royalty Report for the last calendar quarter of such calendar year, whichever is later, each Party shall provide the other with an annual report (the “Annual Report”) in reasonable detail showing for the previous calendar year all categories of information set forth in parts (i) through (xii) of the quarterly Test Fee and Royalty Report, and  in each case, any difference between the information reported on the Annual Report and the information reported in the quarterly Test Fee and Royalty Reports.  The Annual Report provided by Sequenom shall also report the number of NIPT LDT Tests in the NIPT LDT Field (A) performed during that calendar year period using Illumina equipment and consumables and (B) performed during that period using non-Illumina equipment and consumables, and any adjustments to those number permitted in accordance with Section 3.5(b) (Adjustment Due to Third Party Platforms and Products).  Each Party shall provide its Annual Report in a Microsoft excel spreadsheet (electronic and hard copy), or in another mutually acceptable spreadsheet format. 
(v)    The Parties shall each calculate and also include such calculation in such Annual Report the sum of (A) payments received by Sequenom from Illumina for shared Test Fees and other shared consideration, (B)  Royalties received by Sequenom from Illumina for Net IVD Sales, (C) the amounts retained by Sequenom for Test Fees and other shared consideration  in relation to Licensed NIPT LDT Tests, and, in the case of Illumina, (D) the amounts paid by Illumina to CUHK pursuant to the CUHK Licenses and deducted by Illumina from payments to Sequenom as specifically permitted under this Agreement and (E) for 2015, any amounts that Illumina credited in accordance with Section 3.1, in each case during the previous calendar year (such sum, the “Nominal Amount”). For the avoidance of doubt, the Nominal Amount for a calendar year shall not include any amount of shared consideration that was retained or received by Sequenom or Illumina, as applicable, in that year pursuant to Section 5.1(c), to the extent such amount was in a prior year actually credited against a Minimum Payment, as permitted pursuant to Section 3.5(b)(ii) (Credit Due to Illumina Enforcing Pooled Patents).
(vi)    The Parties shall each calculate and also include in such Annual Report any adjustments to the Minimum Payment pursuant to Section 3.5(b).  If, for any calendar year, there is any amount paid by Illumina to CUHK pursuant to the CUHK Licenses (except for the Patent Costs, which are addressed in ARTICLE V) that has not been credited or reimbursed by Sequenom, then Sequenom shall pay to Illumina along with the payment otherwise due for the first calendar quarter of the following calendar year, that amount of un-credited or not reimbursed payments made by Illumina to CUHK as set forth in Illumina’s annual report.
(vii)    If, for any calendar year starting with 2015 and ending with 2020, the Nominal Amount for that calendar year is less than the Minimum Payment amount for the applicable year set forth in Section 3.5(a) as that Minimum Payment is adjusted pursuant to 

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Section 3.5(b), then Illumina shall pay to Sequenom along with the payment otherwise due for the first calendar quarter of the following calendar year, the difference between such Minimum Payment and such Nominal Amount.
(d)    To the extent that, with respect to any calendar year for which a Minimum Payment is set forth in Section 3.5(a), the aggregate amount that Sequenom retains and receives of shared revenues hereunder is in excess of the applicable Minimum Payment for such calendar year, then the excess amount over such Minimum Payment for such calendar year shall be credited against the amount (if any) owing by Illumina to Sequenom under Section 3.5 for the immediately following calendar year in excess of the aggregate amount that Sequenom retains and receives of shared revenues hereunder for such immediately following calendar year;  provided, however, that the operation of this Section 3.4(d), together with any adjustment under Section 3.5(b) that is subject to a floor, shall not reduce the amount of the Minimum Payment below the amount of  such floor therefor set forth in the first paragraph of Section 3.5(b).
(e)    All calculations and payments under this Section shall be made subject to Section 3.6 (Foreign Exchange).
3.5    Minimum Payments.Unadjusted Minimum Payments.  Beginning in calendar year 2015 and continuing through calendar year 2020, the unadjusted minimum aggregate annual amounts payable to Sequenom including all amounts expressly stated to be payable under this Agreement, other than the One-Time Payment (each, a “Minimum Payment”), shall be:
(viii)    for calendar year 2015, [...***...];
(ix)    for calendar year 2016 [...***...];
(x)    for calendar year 2017,  [...***...];
(xi)    for calendar year 2018, [...***...];
(xii)    for calendar year 2019, [...***...]; and
(xiii)    for calendar year 2020, [...***...].
(b)    Adjustments and Credits to the Minimum Payment Obligations.  To the extent that any of the events or circumstances set forth in this Section 3.5(b) arises in any year after 2016, the Minimum Payment for the applicable year shall be adjusted downward as set forth below, provided that any such reduction shall not bring the Minimum Payment owed for such year below a floor of (1) in 2017 calendar year, [...***...]dollars (US$[...***...]), (2) in calendar year 2018, [...***...] dollars (US$[...***...]), and (3) in calendar year 2019, [...***...] dollars (US$[...***...]) (with no floor applicable to  calendar year 2020), except as expressly stated otherwise.
(viii)    Adjustment Due to Average Test Fee Collected. The Minimum Payments set forth in Section 3.5(a) are based on an average annual Test Fee collected by 

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Illumina and Sequenom in the amount of $[...***...] per NIPT Test.  If the average Test Fee collected for a calendar year is lower than $[...***...] per NIPT Test by [...***...] or more, then the Minimum Payment for the calendar year shall be adjusted downward by multiplying the then current Minimum Payment amount by the quotient of the average Test Fee actually collected and subject to sharing between Illumina and Sequenom during that calendar year divided by [...***...].  
(ii)    Credit Due to Illumina Enforcing Pooled Patents. To the extent an Illumina Party is suing in good faith any Person (other than an Existing Illumina Litigant) for patent infringement under any Pooled Patent, and is diligently prosecuting such suit:
(A)    [...***...] shall be used to calculate the annual amount of Test Fees that would have been collected by such Illumina Party, [...***...] Sequenom as if such sales were made by such Illumina Party, in each case if those sales had been licensed under the Pooled Patents and amounts had been paid in accordance with this Agreement; 
(B)    the applicable amounts that would have been paid hereunder to Sequenom, [...***...]; and
(C)    [...***...] of the applicable amounts calculated under clause (B) above shall be credited against the minimum amounts set forth in Section 3.5(a) for such year, subject to Section 3.4(c)(ii). 
(iii)    Credit Due to Test Fees Not Paid by Sequenom.  In the event that Sequenom fails to pay any Test Fee owing under this Agreement based on Licensed NIPT LDT Tests performed by a Sequenom Party, then the full amount of such unpaid debt (i.e., not just the share due to Sequenom) shall be credited against the Annual Minimum in the same year.  The provisions of Section 3.5(b) to establish a floor for adjustments shall not be applicable to this Section 3.5(b)(iii). 
(iv)    Adjustment Due to Third Party Platforms and Products. If in any calendar quarter a Sequenom Party employs non-Illumina equipment and consumables (excluding library prep) for more than [...***...]% of its laboratory services for NIPT, when Illumina equipment and consumables are otherwise available to Sequenom Party on non-discriminatory economic terms consistent with the intent of this Agreement and any applicable Ancillary Agreements, then the annual Minimum Payment amounts set forth in Section 3.5(a) will be reduced by [...***...]% for the calendar year during which such calendar quarter occurs and the immediately following calendar year.  The provisions of Section 3.5(b) to establish a floor for adjustments shall not be applicable to this Section 3.5(b)(iv).
(v)    Adjustment Due to Impairment of Pooled Patents.  If one or more key Patents within the Patent Pool are held invalid so as to be or otherwise become unenforceable in a country, then the Parties shall engage in good faith renegotiation of the Minimum Payment amounts set forth in Section 3.5(a) with the intention of reducing those minimum amounts commensurate with the impact of such an event in such country on the market. Notwithstanding the foregoing, the provisions of this Section 3.5(b)(v) shall not be 

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applicable if one or more key Patents within the Patent Pool are held invalid so as to be or otherwise become unenforceable in a country as a result of a challenge by an Illumina Party pursuant to Section 4.2.2(e) of the Settlement Agreement and the Illumina Party controlled, participated in, or assisted (other than being named as a nominal party or a real party in interest, or paying or reimbursing costs, or taking an action that it is required to take under a University License as set forth in Schedule 3.5(b)(v)) in such challenge  The provisions of Section 3.5(b) to establish a floor for adjustments shall not be applicable to this Section 3.5(b)(v).
(vi)    Adjustment Due to Decreased Value of Pooled Patents in Market. If after the Effective Date either Party or its Affiliates, or any Third Party, sells a competitive NIPT LDT Test or NIPT IVD Product in a country that does not infringe any of the Pooled Patents in such country, and all such competitive NIPT LDT Tests and NIPT IVD Products achieve in aggregate a market share for the applicable products or services of at least [...***...], then the Parties shall engage in good faith renegotiation of the Minimum Payment amounts set forth in Section 3.5(a) with the intention of reducing those minimum amounts commensurate with the impact of such an event in such country on the market.
3.6    Foreign Exchange.  For the purpose of calculating all amounts received hereunder subject to sharing with the other Party hereunder, where the consideration is received in a currency other than U.S. Dollars, conversion from such foreign currency to U.S. Dollars will be calculated and reported for each date in a calendar month based on the rate of exchange quoted by OANDA.com on last calendar day of the applicable month, with respect to the currency in which such consideration is received for each day during the applicable calendar quarter.
3.7    Records.  Sequenom and Illumina each will keep, and will require all other Authorized Labs to keep, for [...***...] years from the date of each payment of Test Fees or Royalties, or the date of receipt of any other amount that is subject to sharing between the Parties under this Agreement, records in sufficient detail to allow the determination of the accuracy and completeness of reports submitted hereunder with respect to any payment hereunder.  Further, Sequenom and Illumina will obtain from the Authorized Labs with which they or their applicable Affiliates are in contract, the right for the contracting Party to audit the records of such Authorized Labs of a scope at least as beneficial to the auditing party as set forth herein. Sequenom and Illumina each will have the right for a period of [...***...] years after receiving any report or statement with respect to amounts due and payable hereunder to appoint an independent certified public accountant reasonably acceptable to the other Party, and which auditor shall receive the same consideration for performing the audit regardless of outcome, to inspect the relevant records of the other Party to the extent necessary to verify the accuracy and completeness of such report or statement.  The auditor shall have the right to report to the auditing party whether the Test Fees, Royalties and Test Fee Reports and Annual Reports were accurate and complete, and if they are not, then the nature and amount of the inaccuracy or incompleteness, and no further information. The audited Party will make its records and the relevant records of its Affiliates available (including any applicable reports received from Authorized NIPT Labs) for inspection by such independent certified public accountant during regular business hours on Business Days at such place or places where such records are customarily kept, upon reasonable prior notice (of at least thirty (30) days) from the auditing 

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party, to verify the accuracy and completeness of the reports and payments.  Such inspection right will not be exercised more than once in any calendar year and no period may be audited by a Party more than once.  The auditing Party will bear all costs and expenses associated with an audit conducted pursuant to this Section 3.7, provided, however, that if the designated auditor discovers an underpayment of [...***...] or more for the audited period between the amount of payments made under this Agreement and the amount of payments actually owed under this Agreement, then the audited Party will bear all reasonable costs and expenses associated with such audit.  Any amount of underpayment shall be made, with interest calculated in accordance with Section 3.9, within ten (10) Business Days after a final audit report. The auditing Party agrees to hold in confidence all information learned in the course of any audit or inspection, in accordance with the terms and conditions set forth in ARTICLE VI.  Neither Party will have any obligation under this Agreement to maintain records pertaining to such reports or payments beyond such three-year period.  The University Licensors’ of the Pooled Patents shall have the audit rights stated in their respective University Licenses. In the event the written agreement between an Illumina Party or a Sequenom Party and its Existing Illumina Licensee or Existing Sequenom Licensee, respectively, does not include audit rights of at least the scope of this Section 3.7, then Illumina or Sequenom, as applicable, shall use commercially reasonable efforts to seek such audit rights from the existing licensee and execute an amendment to that agreement that contains audits rights of at least the scope of this Section 3.7.
3.8    Taxes.
(d)    All payments under this Agreement will be made without deduction or withholding for taxes except to the extent that any such deduction or withholding is required by Law in effect at the time of payment.
(e)    Any tax required to be withheld on amounts payable under this Agreement will promptly be paid by payor on behalf of the payee to the appropriate governmental authority, and the payor will furnish the payee with proof of payment of such tax.  Any such tax required to be withheld will be an expense of and borne by the payee.
(f)    Illumina and Sequenom will cooperate with respect to all documentation required by any taxing authority or reasonably requested by Illumina or Sequenom to attempt to minimize or eliminate the rate of applicable withholding taxes.
3.9    Interest on Late Payments.  For any payment due hereunder that is not made when due, in addition to paying the amount of such payment, the Party making such payment shall pay an additional amount as interest on such late amount calculated at a rate equal to the lower of [...***...], or the highest rate permitted by applicable Law, calculated daily from the date that such late amount was due until and including the date actually paid.
3.10    CUHK Licenses. Illumina and Sequenom acknowledge that certain of the CUHK Licenses include certain [...***...] to CUHK. Notwithstanding anything to the contrary in this Agreement or any Ancillary Agreement, any and all of Sequenom’s obligations under this Agreement to reimburse Illumina (whether by credit, repayment, or any other means of reimbursement satisfactory to Illumina) for payments that Illumina is obligated to make to 

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CUHK under a CUHK License shall continue for so long as Illumina is so obligated to CUHK and shall be [...***...]. 
ARTICLE IV     
 
TERM 
4.1    Term.  Unless earlier terminated by mutual written agreement of the Parties, the term of this Agreement, including the licenses granted under this Agreement, shall be from the Effective Date until the date of Expiration of the last to Expire Pooled Patent (the “Term”).  Neither Party may terminate this Agreement except by mutual written agreement of the Parties.  Upon termination of the Agreement, the following terms and provisions shall survive: (a) ARTICLE I, (b) Section 5.1 (Infringement Claims Against Third Parties) shall survive for six years after Expiration of each Pooled Patent, (c) ARTICLE VI (Confidentiality) shall survive, (d) all payment obligations under the Agreement shall survive until satisfied, (e) Section 3.7 (Records) shall survive for three years after the last day of the Term, (f) Section 7.2 (No Implied Warranty), (g) ARTICLE VIII, and (h) ARTICLE IX.
4.2    Effect of Material Breach.  If a Party materially breaches this Agreement and such breach is not cured within thirty (30) days after written notice thereof from the other Party, the non-breaching Party shall have a right to pursue a claim in accordance with the enforcement procedures set forth in Section 9.7.
ARTICLE V     
 
ENFORCEMENT AND PROSECUTION OF POOLED PATENTS
5.1    Infringement Claims Against Third Parties.Notices.  Sequenom will advise Illumina promptly upon its becoming aware of: (i) any unlicensed activities which it believes may be an actual or impending infringement of any Pooled Patent in the Licensed NIPT Field; (ii) any attack on or appeal of the grant of any Pooled Patent; (iii) any published application for Patent by, or the grant of a Patent to, a Person which claims the same subject matter as any Pooled Patent; or (iv) any application made for a compulsory license under any Pooled Patent.
(m)    Right to Take Action.  Subject to Section 5.1(f) (Secondary Enforcement Rights) and Section 5.1(d) (University Licensors) and any applicable University License, as between Sequenom and Illumina and their respective Affiliates, Illumina shall have the sole right (which it may exercise through its Affiliates at its sole discretion), at its sole expense, to enforce the Pooled Patents against Third Parties that Exploit NIPT LDT Tests in the NIPT LDT Field and against Third Parties that Exploit NIPT IVD Products in the NIPT IVD Field, except to the extent (i) such sole right is inconsistent with an applicable Ancillary Agreement or University License, (ii) that Sequenom and its Affiliates retains the enforcement rights under the Isis Patents in the NIPT LDT Field, or (iii) subject to Section 5.1(e) (Existing Litigation).  Subject to the foregoing, solely with respect to infringement of the Isis Patents in the NIPT LDT Field, Sequenom, and in all other cases, Illumina, on behalf of itself and its respective Affiliates, will have the sole right to determine whether or not to take whatever legal or other 

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action is required in response to activities described under Section 5.1(a), including such activities of which Sequenom becomes aware and provides notice under Section 5.1(a) (“Protective Action”).  If the applicable Party determines in its sole discretion that such Protective Action is warranted, then such Party or its Affiliates shall, at such Party’s expense, commence and prosecute and control such Protective Action.  The other Party may be represented by counsel of its own selection at its own expense in such Protective Action to the extent it is a party of record in such Protective Action, provided that such counsel shall not in any way control such Protective Action.
(n)    Recovery.  Any recovery obtained as a result of such Protective Action, whether by judgment, award, decree or settlement, (i) first, will be [...***...], and (ii) then [...***...] (A) with recovery of amounts for NIPT LDT Tests [...***...], and (B) with recovery of amounts for NIPT IVD Products [...***...].  To the extent such recovery is insufficient to reimburse the Parties’ associated reasonable costs and expenses fully, then a Party’s share of the recovery will be [...***...]. 
(o)    University Licensors. Each Party agrees to enforce the provisions of any agreement it has with any of the University Licensors, which provisions permit such Party to solicit or compel the cooperation of, including the naming as a party to a litigation of, any such University Licensor, as may be necessary or useful to bring or maintain an action to enforce any Pooled Patent hereunder.
(p)    Existing Litigation.  Nothing in this ARTICLE V is intended to alter or divest rights of any Party to continue to prosecute and settle any enforcement action of any Pooled Patent against a Third Party, which Third Parties as of the Effective Date are set forth on Schedules 2.8(d) and 2.8(e), and which enforcement action had begun as of the Effective Date, or to take any appeal therefrom.
(q)    Secondary Enforcement Rights.  Notwithstanding anything to the contrary in this Agreement, in the event Sequenom provides notice to Illumina pursuant to Section 5.1(a) with respect to any Patent on Schedule 5.1(f), and Illumina does not within three (3) months of such written notice take Protective Action in response to such notice and thereafter diligently prosecute such Protective Action to eliminate the applicable activity described in Section 5.1(a), or if Illumina provides written notice earlier than such three (3) months that it does not intend to take Protective Action, then Sequenom shall have the same right to take action with respect to the applicable Patent as Illumina has to enforce the Pooled Patents set forth in Section 5.1(b), provided that Sequenom takes such action within three (3) months of such notice and diligently prosecutes such action to eliminate the applicable activity described in Section 5.1(a).  In the event Sequenom chooses to take Protective Action, then Illumina shall have the same rights set forth in Section 5.1(b) as Sequenom has when Illumina takes Protective Action.  Any recovery obtained as a result of any such Protective Action pursued by Sequenom in accordance with this Section 5.1(f) shall be treated as set forth in Section 5.1(c), except that with respect to the division set forth in clause (ii) therein (A) recovery of amounts for NIPT LDT Tests treated as Test Fees shall be shared between the Parties with Sequenom receiving the portion that Illumina would have received if Illumina 

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pursued the Protective Action and with Illumina receiving the portion that Sequenom would have received if Illumina pursued the Protective Action, and (B) with recovery of amounts for NIPT IVD Products being treated as royalties received and Sequenom shall pay a portion of such amount equal to the Royalties that would have been payable by Illumina to Sequenom in accordance with Section 3.3(c) if Illumina had pursued the Protective Action.
5.2    Prosecution and Maintenance of Pooled Patents. 
(f)    As between the Parties and subject to the applicable University Licenses and Section 5.2(e), Illumina and its Affiliates shall control the prosecution and maintenance of the Illumina Patents and the Sequenom Patents.
(g)    As between the Parties, Sequenom and its Affiliates shall control at their sole cost the prosecution and maintenance of the Isis Patents.
(h)    Subject to Section 5.2(b) (regarding Isis Patents), Illumina and Sequenom shall share the reasonable costs and expenses directly incurred by Illumina and Sequenom for prosecution (including responding to interferences declared and oppositions filed and post-grant proceedings) and maintenance of the Pooled Patents, other than Interference Expenses as that term is defined in each of the CUHK Licenses, including without limitation costs and expenses for litigating (in any forum or procedure, including arbitration) Patent Interference Nos. 105,920, 105,922, 105,923 and 105,924 before the United States Patent and Trademark Office, Patent Trial & Appeal Board, or for appealing or settling such interferences, (such shared costs and expenses “Patent Costs”) on a [...***...] Illumina:Sequenom basis.  The Patent Costs include out-of-pocket costs and expenses and costs and expenses incurred by Illumina and Sequenom for activities that occur on and after the Effective Date for outside counsel and in-house patent attorneys and patent agents prosecuting the Pooled Patents (whether directly or through review and oversight of outside counsel), provided that such in-house expenses shall be at an hourly rate of $[...***...] per hour (which shall increase annually by [...***...] on January 1, 2016 and on each January 1 thereafter during the Term).  Payments owed shall be made or credited in accordance with Section 3.4.  For the avoidance of doubt, (1) [...***...] are not creditable against the Minimum Payments, (2) [...***...] is included in Patent Costs and (3) [...***...] shall be paid by Illumina and Sequenom shall reimburse Illumina for 100% of such amounts paid.  Notwithstanding the foregoing, Patent Costs shall not include any costs incurred by [...***...].  Unless there was reasonable basis for delay, neither Party will be responsible for payment of costs or expenses that were incurred by the other Party and arising more than six (6) months prior to the receipt by such first Party of the invoice from such other Party.  Each Party shall provide the other Party with reasonable detail regarding costs for services and shall include, at a minimum, the date services were performed, a description of each service provided, specific and accurate time for each service provided and the hourly rate for the service provider. A party shall have the right to audit the invoices in accordance with the audit process set forth in Section 3.7.
(i)    Illumina will use commercially reasonable efforts to (i) prosecute (including responding to interferences declared and oppositions filed) and maintain Sequenom-Owned Patents  by filing all necessary papers and paying any fees required for such purpose by 

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the patent Laws of the particular country in which such Sequenom-Owned Patent is prosecuted and was granted, and (ii) obtain such patent extensions or restorations of patent terms as may become available from time to time in any country regarding Sequenom-Owned Patents.  In the event Illumina decides not to prosecute or maintain any pending application or issued patent within Sequenom-Owned Patents, or obtain any patent extensions or restorations of patent term, Illumina will give Sequenom written notice of such decision at least sixty (60) days prior to Illumina allowing such application to go abandoned or prior to Illumina not taking a necessary step to maintain, extend or restore such patent.  Sequenom will have the option of taking over the activities in (i) and (ii) with respect to such application or patent, and shall notify Illumina in writing if it chooses to assume such control of the prosecution or maintenance of any such application or patent.  If Sequenom so assumes control of the prosecution or maintenance of any such application or patent, promptly after such notification, Illumina shall transfer its files with respect thereto to Sequenom, and Sequenom will use commercially reasonable efforts to prosecute (including responding to interferences declared and oppositions filed) and maintain any such application or patent to the same extent Illumina is required as set forth and pursuant to parts (i) and (ii) of this Section 5.2(d).
(j)    Each Party prosecuting Pooled Patents pursuant to Sections 5.2(a)-(d) shall use commercially reasonable efforts and reasonably experienced patent professionals of its choosing (in-house or law firm) in so doing to maintain and, if reasonably possible under applicable patent Laws, to prosecute to allowance Valid Issued Claims in the Pooled Patents in the Licensed NIPT Field so maintained and prosecuted, and shall consider in good faith the interests of the other Party in so doing.  [...***...].  Notwithstanding the foregoing, a Party prosecuting a Pooled Patent shall give good faith consideration to any such comments on prosecution of a Pooled Patent in the Licensed NIPT Field received by the other Party.
5.3    Cooperation.  Each Party shall reasonably cooperate with the other Party in the exercise of its rights or performance of its obligations under this ARTICLE V.  For any action or proceeding brought by a Party under this ARTICLE V, the other Party shall join as a party plaintiff in any such action or proceeding if necessary for standing or otherwise necessary to enable the initiating Party or its Affiliates to bring or continue such action or proceeding.  Each Party shall enter into a common interest agreement if requested by the other Party in connection with performing its obligations or exercising its rights under this Article V.
ARTICLE VI     
 
CONFIDENTIALITY
6.1    Confidentiality.  During the Term and for a period of five (5) years thereafter, each Party shall maintain in confidence the Confidential Information of the other Party, shall not use or grant the use of the Confidential Information of the other Party except as expressly permitted hereby, and shall not disclose the Confidential Information of the other Party except on a need-to-know basis to such Party’s directors, officers, employees, agents and consultants, to the extent such disclosure is necessary or useful in connection with performance of such Party’s obligations or exercise of such Party’s rights under this Agreement or any of the Ancillary Agreements.  To the extent that disclosure to any Person is authorized by this Agreement, prior to 

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disclosure, a Party shall have obtained written agreement of such Person (which written agreement may be a general employee confidentiality agreement) to hold in confidence and not disclose, use or grant the use of the Confidential Information of the other Party except as expressly permitted under this Agreement.  Each Party shall notify the other Party promptly upon discovery of any unauthorized use or disclosure of the other Party’s Confidential Information.
6.2    Terms of Agreement.  Neither Party shall disclose any terms or conditions of this Agreement to any Third Party without the prior consent of the other Party; provided, however, that a Party may disclose the terms or conditions of this Agreement, (a) on a need-to-know basis to such Party’s directors, officers, employees and consultants, and its legal and accounting advisors, in each case, to the extent such disclosure is necessary, and (b) to a Third Party, other than a Sequencing Platform Manufacturer, in connection with (i) an equity investment in or financing of the operations of such Party, (ii) a merger, consolidation or similar transaction by such Party, or (iii) the sale of all or substantially all of the assets of such Party to which the Agreement and the Ancillary Agreement are related, provided in each case that such Third Party is bound by written confidentiality obligations respecting such disclosures in accordance with the terms of this Agreement.
6.3    Permitted Disclosures.  Notwithstanding Section 6.4, if required by Law, including without limitation by the U.S. Securities and Exchange Commission or any stock exchange or Nasdaq, or by other applicable law, regulation, court or administrative order then a Party may issue a press release or other public announcement regarding this Agreement, or make a disclosure required by Law, provided that the other Party has received prior written notice of such intended press release or public announcement, or the disclosure required by Law, if practicable under the circumstances, and the other Party has been provided sufficient opportunity to object to any such disclosure or to request confidential treatment thereof , and an opportunity to seek a protective order (if applicable), or to have discussion between the Parties and their counsel regarding the requirement,  in each case to the extent reasonably practicable under the circumstances, and the Party subject to the requirement cooperates with the other Party to limit the disclosure and includes in such press release or public announcement or required disclosure only such information relating to this Agreement as is required by such Law to be publicly disclosed.  In the event this Agreement or an Ancillary Agreement is required by applicable Law to be made public (e.g., SEC filing), the Parties will make reasonable attempts to diligently and in good faith work together to redact this Agreement and any applicable Ancillary Agreement to a mutually acceptable extent and in compliance with applicable Law, and in any event the Party required to make the applicable agreement public shall provide the other Party with a copy of the proposed redaction prior to public disclosure.
6.4    Publicity; Use of Names.  Each Party shall obtain the prior written consent of the other Party on all press releases or other public announcements relating to this Agreement, including its existence or its terms, provided that a Party is not required to obtain prior written consent of the other Party for press releases or public disclosures that repeat information that has been previously authorized for public disclosure pursuant to terms of this Agreement. Notwithstanding anything to the contrary in this Agreement, the Parties have mutually agreed on the form of the press release attached hereto as Schedule 6.4, and any Party may disclose free 

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from confidentiality obligations the content of such press release, provided that, except as permitted hereunder, no more than one (1) press release may be issued by any Party in relation to the transactions contemplated by this Agreement and the Ancillary Agreements unless the other Party consents in writing to any additional press release, such consent to be given or withheld in such other Party’s sole and absolute discretion.  Neither Party shall use the name or trademarks of the other Party without the express prior written consent of the other Party.
ARTICLE VII     
 
REPRESENTATIONS AND WARRANTIES
7.1    Representations and Warranties.Except as set forth on Schedule 7.1(a), each of the Parties represents and warrants, as of the Effective Date, that:
(ix)    it has legal power, authority and right to enter into this Agreement;
(x)    the execution and performance by it of its obligations hereunder will not constitute a breach of, or conflict with, its organizational documents nor any other material agreement or arrangement, whether written or oral, by which it is bound;
(xi)    it has full power and authority and has taken all action necessary to enter into and perform this Agreement, and that this Agreement has been duly authorized, executed and delivered by such Party;
(xii)    this Agreement is a valid, binding, and legally enforceable obligation of that Party in accordance with its terms;
(xiii)    it has the right to grant the rights granted hereunder, including the licenses and covenants not to sue granted hereunder, and undertake the obligations it assumes hereunder and that it has not previously licensed, assigned, or otherwise conveyed rights in any intellectual property, which license, assignment or other conveyance is inconsistent with the terms of, or could otherwise undermine any exclusivity set forth in, the terms of this Agreement;
(xiv)    each of its Existing Illumina Licensees or Existing Sequenom Licensees (as applicable) as of the Effective Date that is authorized by an Illumina Party under any Illumina Patent (excluding CUHK Patents) or by a Sequenom Party under any Sequenom Patent (prior to assignment and novation of the CUHK Licenses (2008/2011)) or Isis Patent to perform or have performed an NIPT LDT Test is obligated on a per-test basis to pay a fixed fee (or fixed fee dependent upon volume tiers) on performance of such NIPT LDT Test, which fee will be treated as a Test Fee hereunder; and
(xv)    it has no knowledge or reasonable belief, without a duty to investigate, that any Person, other than Illumina, Sequenom, CUHK, Isis, Stanford, [...***...] and any of their Affiliates (a) owns any right, title or interest in a Pooled Patent, or (b) has asserted or alleged that it owns any right, title or interest in a Pooled Patent.

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(c)    Except as set forth on Schedule 7.1(b), Sequenom represents and warrants, as of the Effective Date, that:
(iv)    it is the sole and exclusive beneficial and record owner of the Sequenom Owned Patents and Isis Patents licensed to Illumina hereunder;
(v)    this Agreement is not in conflict in any material respect with, and will not result in breach of another agreement to which Sequenom or any of its Affiliates is a party;
(vi)    other than as set forth in the Settlement Agreement, it is not aware of any legal action challenging the ownership, validity or enforceability of any of the Sequenom Patents or CUHK Patents; 
(vii)    that the Sequenom Patents (prior to assignment and novation of the CUHK Licenses (2008/2011)) include all Patents owned or in-licensed by Sequenom and its Affiliates with a right to sublicense that claim the verifi® test, MaterniT21® test, VisibiliTTM test and other methods of performing NIPT (including targeted sequencing, PCR, arrays), in each case as currently commercially performed and sold by Sequenom and Illumina, [...***...];
(viii)    it intends to continue prosecuting the ongoing disputes it has with Existing Sequenom Litigants in a manner that, if successful, would lead to an obligation, on each such Existing Sequenom Litigant that intends to perform on a going forward basis an NIPT LDT Test that is covered by a Valid Issued Claim under the Isis Patents, to take a license under the Isis Patents in exchange for consideration payable to Sequenom that is consistent with the Test Fee amounts set forth on Schedule 1;
(ix)    other than as set forth in the Settlement Agreement, it has no reasonable basis to believe that (A) any of the Sequenom Owned Patents, Isis Patents or CUHK Patents will Expire prior to the ordinary date that would be calculated for any such Patent based on the filing and priority dates of the applications leading to such Patent and (B) it will allow any Expiration to occur for Pooled Patents under its control that is prior to the ordinary date that would be calculated for any such Patent based on the filing and priority dates of the applications leading to such Patent; 
(x)    it is not a party to any agreement with any Person that would conflict with the obligations regarding Test Fees collection and sharing with Illumina hereunder or that includes a right for a Person other than a Sequenom Party to sublicense any rights under any Sequenom Patent or CUHK Patent; 
(xi)    it is not in material breach of any existing agreement under which it has obtained any right in any Sequenom Patent (prior to assignment and novation of the CUHK Licenses (2008/2011)), including Isis Patents;
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CUHK Patents that results in Illumina Parties receiving less than full exclusive rights under Sequenom Patents, including Isis Patents, and CUHK Patents to Exploit NIPT IVD Products in the NIPT IVD Field; 
(xiii)    It has not reserved any rights for any Sequenom Party, nor granted any right or license to any Person under any of the Sequenom Patents, including Isis Patents, or CUHK Patents to Exploit NIPT IVD Products in the NIPT IVD Field; 
(xiv)    any agreement entered into by Sequenom or any Affiliate of Sequenom prior to the Effective Date granting rights under any Sequenom Patent (prior to assignment and novation of the CUHK Licenses (2008/2011)) includes an obligation for the grantee to pay Test Fees to Sequenom or such Affiliate that are in an amount that is materially consistent with (or higher than) the Test Fee amounts (based on currency exchange rates in effect on the Effective Date) set forth on Schedule 1 (excluding the additional $[...***...] fee pursuant to Section 3 of Schedule 1);
(xv)    no Existing Sequenom Licensee has been granted a right under any Sequenom Patent (prior to assignment and novation of the CUHK Licenses (2008/2011)) greater than a right to Exploit an NIPT LDT Test in the NIPT LDT Field;
(xvi)    it and none of its Affiliates has neither granted any license to, nor entered into any agreement with, any Person that would prohibit Illumina from granting licenses to Exploit NIPT IVD Products in the NIPT IVD Field and NIPT LDT Tests in the NIPT LDT Field under the Pooled Patents anywhere in the world; 
(xvii)    other than an obligation to make an up-front payment, all payment obligations of Existing Sequenom Licensees (including existing Sequenom Technology Partners) to Sequenom or its Affiliates pursuant to and under an Existing Sequenom License are in consideration of the grant of a license or right under at least one Sequenom Patent (prior to assignment and novation of the CUHK Licenses (2008/2011));
(xviii)    [...***...]; 
(xix)    [...***...];
(xx)    it owns all right, title and interest in the Isis Patents, including the sole and exclusive right to assert, bring, settle, and release claims of infringement and collect for past damages;
(xxi)    other than rights granted by Sequenom or its Affiliates under Existing Sequenom Licenses, no other Person has any right under any Isis Patent; 
(xxii)    it has the sole right to grant licenses under the Isis Patents; and 
(xxiii)    it has not granted any rights under any Sequenom Patent to an Existing Sequenom Licensee that is performing NIPT on a non-Illumina platform.

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(d)    Illumina represents and warrants, as of the Effective Date, that:
(ii)    Except as set forth on Schedule 7.1(c)(i), it (and/or its Affiliates) is the sole and exclusive beneficial and record owner of the Illumina Owned Patents licensed to Sequenom hereunder; 
(iii)    this Agreement is not in conflict in any material respect with, and will not result in breach of another agreement to which Illumina or any of its Affiliates is a party;
(iv)    other than as set forth in the Settlement Agreement, it is not aware of any legal action challenging the ownership, validity or enforceability of any of the Illumina Patents (excluding the CUHK Patents);
(v)    the Illumina Patents (excluding the CUHK Patents) include all Patents owned or in-licensed by Illumina and its Affiliates with a right to sublicense that claim the verifi® test, MaterniT21® test, VisibiliTTM test and other methods of performing NIPT  (including targeted sequencing, PCR, arrays), in each case as currently commercially performed and sold by Sequenom and Illumina, but excluding those claims of Patents solely to the extent they cover Illumina’s and its Affiliates’ general purpose consumables, reagents, instruments, accessories and software and use thereof;
(vi)    it intends to continue prosecuting the ongoing disputes it has with Existing Illumina Litigants in a manner that, if successful, would lead to an obligation, on each such Existing Illumina Litigant that intends to perform on a going forward basis an NIPT LDT Test that is covered by a Valid Issued Claim under the Illumina Patents (excluding the CUHK Patents), to take a license under such Illumina Patents in exchange for consideration payable to Illumina that is consistent with the Test Fee amounts set forth on Schedule 1 (excluding the additional $[...***...] fee pursuant to Section 3 of Schedule 1);
(vii)    other than as set forth in the Settlement Agreement, it has no reasonable basis to believe that (A) any of the Illumina Owned Patents or Illumina In-Licensed Patents (excluding the CUHK Patents) will Expire prior to the ordinary date that would be calculated for any such Patent based on the filing and priority dates of the applications leading to such Patent and (B) it will allow any Expiration to occur for Pooled Patents under its control that is prior to the ordinary date that would be calculated for any such Patent based on the filing and priority dates of the applications leading to such Patent; 
(viii)    it is not a party to any agreement with any Person that would conflict with the obligations regarding Test Fees collection and sharing with Sequenom hereunder or that includes a right for a Person, other than the Illumina Parties or its University Licensors, to sublicense any rights under any Illumina Patent (excluding the CUHK Patents);
(ix)    it is not in material breach of any existing agreement under which it has obtained any right in any Illumina Patent (excluding any CUHK Patents);

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(x)    except as set forth on Schedule 7.1(c)(ix), any agreement entered into by Illumina or any Affiliate of Illumina prior to the Effective Date granting rights under any Illumina Patent (excluding the CUHK Patents) includes an obligation for the grantee to pay Test Fees to Illumina or such Affiliate that are materially consistent with (or higher than) the Test Fee amounts (based on currency exchange rates in effect on the Effective Date) set forth on Schedule 1 (excluding the additional $[...***...] fee pursuant to Section 3 of Schedule 1); 
(xi)    no Existing Illumina Licensee has been granted a right under any Illumina Patent (excluding the CUHK Patents) greater than a right to Exploit an NIPT LDT Test in the NIPT LDT Field; 
(xii)    it and none of its Affiliates has neither granted any license to, nor entered into any agreement with, any Person that would prohibit Sequenom from granting licenses to Persons for Exploiting NIPT LDT Tests in the NIPT LDT Field in such Person’s, or its Affiliates’, clinical laboratory under the Isis Patents anywhere in the world; and 
(xiii)    Except as set forth on Schedule 7.1(c)(xiii), all payment obligations of Existing Illumina Licensees (including existing Illumina Technology Partners) to Illumina or an Illumina Affiliate pursuant to and under an Existing Illumina License are in consideration of the grant of a license or right under at least one Illumina Patent (excluding CUHK Patents).
7.2    No Implied Agreements or Warranties.  Nothing contained in this Agreement will be construed as:
(a)    a warranty or representation that any manufacture, importation, offer for sale, sale, lease, use, performance or other disposition of NIPT LDT Tests or NIPT IVD Product hereunder will be free from infringement of Third Party Patents;
(b)    a warranty or representation of the validity of any claims of the Pooled Patents;
(c)    an agreement or other obligation to bring or prosecute actions or suits for infringement of or otherwise enforce any of the Pooled Patents generally or against any particular Person or Persons;
(d)    conferring any right to use in advertising, publicity, or otherwise, any trademark, trade name or names, or any contraction, abbreviation or simulation thereof, of any Party; and
(e)    conferring by implication, estoppel or otherwise, upon any Party hereunder, any license or other right under any class or type of Patent or other intellectual property right, except the licenses and rights expressly granted hereunder or under the Ancillary Agreements.  The Parties reserve for themselves any rights not so expressly granted to the other Party or its Affiliates hereunder or under the Ancillary Agreements.

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ARTICLE VIII     
 
INDEMNIFICATION
8.1    Indemnification.
(f)    Illumina shall fully and unconditionally indemnify, defend and hold harmless Sequenom, its Affiliates, and each of their respective directors, officers, employees, agents and representatives, successors and assigns, for any Claims by a Third Party to the extent (i) arising from a breach or misrepresentation of any representation or warranty made by Illumina (on behalf of itself and its Affiliates) under this Agreement, (ii) arising from infringement or alleged infringement of any [...***...] by the Exploitation of any NIPT LDT Test in the NIPT LDT Field by Sequenom or its Affiliates that are not Sequencing Platform Manufacturers in accordance with this Agreement and with  the sublicense under the [...***...] executed and delivered in accordance with Section 2.6, or (iii) arising from, resulting from or relating to the failure of Illumina to pay any and all applicable royalties owing to [...***...] for activities for which Sequenom has paid the applicable consideration in accordance with [...***...]. 
(g)    Sequenom shall fully and unconditionally indemnify, defend and hold harmless Illumina, its Affiliates, and each of their respective directors, officers, employees, agents and representatives, successors and assigns, for any Claims (i) by a Third Party to the extent arising from (A) a breach or misrepresentation of any representation or warranty made by Sequenom (on behalf of itself and its Affiliates) under this Agreement, (B) infringement or alleged infringement of any [...***...], in each case by Illumina or its Affiliates in accordance with this Agreement, (C) any act or omission of Sequenom, or an Affiliate of Sequenom pursuant to any sublicense granted to Sequenom or an Affiliate of Sequenom under this Agreement or any Ancillary Agreement to the extent Illumina has an express indemnification obligation in respect of such Claim under an applicable University License, in each case to the extent such obligation is expressly disclosed by Illumina to Sequenom prior to the Effective Date or exists in a CUHK License as of the Effective Date, (D) the transaction that resulted in Sequenom taking assignment and ownership of the Isis Patents, (E) any and all Pre-Novation Liability (as defined in the assignment and novation agreements referenced in Section 2.4(b) of this Agreement), (F) any act or omission of Sequenom, or its sublicensees or their sub-sublicensees under the Sequenom Sublicense (as defined in the sublicenses referenced in Section 2.4(c) and (e) of this Agreement), any Existing Sequenom Sublicense or any sub-sublicense granted under an Existing Sequenom License, including a breach of any of the foregoing sublicenses or sub-sublicenses, (G) any duties, obligations act or omission of Sequenom or an Existing Sequenom Licensee, for which Illumina and Sequenom are jointly and severally liable to CUHK under any or all of the assignment and novation agreement referenced in Section 2.4(b) (other than due to any failure by Illumina or its Affiliates to comply with the terms and conditions of such novation or assignment), or (H) or arising under, or otherwise in relation to the novation or assignment of any or all of the CUHK Licenses (2008/2011) referenced in Section 2.4(b) to Illumina (other than due to any failure by Illumina or its Affiliates to comply with the terms and conditions of such novation or assignment), or 

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(ii) arising out of (A) a suit or other action by or on behalf of Sequenom or an Affiliate of Sequenom for infringement or alleged infringement of any [...***...] by the Exploitation of any NIPT LDT Test in the NIPT LDT Field or Exploitation of any NIPT IVD Products in the NIPT IVD Field by Illumina or its Affiliates, or (B) a Claim that would have been released under Section 4.1.1 of the Settlement Agreement if Claims for infringement of any Patents licensed by [...***...] to Sequenom as of the Effective Date had not been excluded from such release pursuant to Section 4.1.1 of the Settlement Agreement. 
8.2    Procedure.  The indemnified Party promptly shall notify the indemnifying Party of any Claim in respect of which the indemnified Party intends to claim such indemnification, and the indemnifying Party shall have the right to assume the defense thereof with reasonable counsel selected by the indemnifying Party.  The indemnity agreement in this ARTICLE VIII shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the consent of the indemnifying Party, which consent shall not be unreasonably withheld, delayed or conditioned.  The failure to deliver notice to the indemnifying Party within a reasonable time after the commencement of any such Claim, if prejudicial to its ability to defend such action, shall relieve the indemnifying Party of liability to the indemnified Person under this ARTICLE VIII to the extent of such prejudice, but the omission so to deliver notice to the indemnifying Party shall not relieve it of any liability that it may have to the indemnified Person otherwise than under this ARTICLE VIII.  The indemnified Party under this ARTICLE VIII, its directors, officers, employees, agents and representatives shall reasonably cooperate with the indemnifying Party and its legal representatives in the investigation and defense of any Claim covered by this indemnification.
8.3    Limitation of Liability.  Notwithstanding anything to the contrary, the maximum economic liability of a Party under Section 8.1 shall be limited to (a) [...***...] of the shared Test Fees and related revenues collected pursuant to Section 3.2(b)(vi) paid to or retained by such Party under this Agreement, plus (b)(i) in the case of Sequenom, [...***...], and (ii) in the case of Illumina, [...***...].
ARTICLE IX     
 
MISCELLANEOUS PROVISIONS

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9.1    No Assignment Without Consent.No Party shall, without the prior written consent of the other Party, assign or transfer this Agreement (in whole or in part) or assign, transfer, declare a trust of or dispose of in any manner any of its rights and obligations hereunder to any Third Party, except that Illumina and Sequenom (a) may assign or transfer this Agreement (in whole or in part) to an Affiliate or (b) may assign or transfer this Agreement, only together with all the Ancillary Agreements to which it is a party, to a Third Party as part of a merger, sale of stock or shares, or sale of assets in each case relating to the entire business of either Illumina or Sequenom to which this Agreement and the Ancillary Agreements relate, as applicable, in each case without any further consent required of any other Party, subject in all cases to Section 2.8(f).  Any purported assignment or transfer in violation of this Section 9.1(a) shall be null and void ab initio.
(g)    Subject to the foregoing, all of the terms and provisions of this Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the respective successors and assigns of the Parties.
(h)    For the avoidance of doubt, the provisions of Section 2.8(f) shall be applicable in the event of a Change of Control of Sequenom to a Sequencing Platform Manufacturer (including as part of an assignment of this Agreement in a bankruptcy or other financial restructuring of Sequenom).
9.2    Notices.  All notices required or permitted to be given hereunder will be in writing and will be valid and sufficient if dispatched by internationally recognized overnight courier (such as UPS, FedEx or DHL), freight prepaid, or delivered personally with written receipt as follows:
If to Illumina:
Illumina, Inc. 
5200 Illumina Way 
San Diego, CA 92122 
Attn:  Senior Vice President, Corporate Development
With a copy to: 
Illumina, Inc. 
5200 Illumina Way 
San Diego, CA 92122 
Attn:  General Counsel
If to Sequenom:
Sequenom, Inc. 
3595 John Hopkins Court 
San Diego CA 92121 
Attn:  President

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With a copy to: 
Sequenom, Inc. 
3595 John Hopkins Court 
San Diego CA 92121 
Attn:  General Counsel

Either Party may give written notice of a change of address and, after notice of such change has been received, any notice or request will thereafter be given to such Party as above provided at such changed address.
9.3    Counterparts.  This Agreement may be executed in one or more counterparts (whether delivered by facsimile or otherwise), each of which will be considered one and the same agreement and will become effective when counterparts have been signed by each of the Parties and delivered to the other Party.
9.4    Entire Agreement.  This Agreement along with the Ancillary Agreements:  (i) constitutes the entire agreement and supersedes all prior agreements, negotiations, arrangements and understandings, both written and oral, between the Parties with respect to the subject matter hereof, and (ii) is not intended to confer upon any Person, other than the Parties, any rights, benefits or remedies of any nature whatsoever.
9.5    Severability.  Any term or provision of this Agreement that is held to be invalid, void or unenforceable in any situation in any jurisdiction will not affect the validity or enforceability of the remaining terms and provisions hereof, or the validity or enforceability of the invalid, void or unenforceable term or provision in any other situation or in any other jurisdiction.  If any term or provision of this Agreement is declared invalid, void or unenforceable, the Parties agree that the authority making such determination will have the power to and shall, subject to the discretion of such authority, reduce the scope, duration, area or applicability of the term or provision, to delete specific words or phrases, or to replace any invalid, void or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the original intention of the invalid or unenforceable term or provision.
9.6    Governing Law.  This Agreement and any action related thereto shall be governed, controlled, interpreted and defined by and under the Laws of the State of California, without regard to any choice of law or conflicts of laws provisions thereof.
9.7    Enforcement.Illumina and Sequenom each agree that all disputes arising out of or relating to this Agreement (other than disputes between the Parties regarding adjustment of Test Fee amounts in accordance with Section 3.2(c)(iii)) shall be presented in writing to the Presidents of the Parties who shall use good faith efforts to resolve such disputes.  If any such dispute is not resolved by the Presidents within thirty (30) days (or such longer period as the Parties mutually agree in writing) after first presentation in writing to each of such dispute, then either Party shall be entitled to commence proceedings in the state or federal courts, as applicable, located in San Diego, California.  Each Party agrees (i) that all such disputes shall be instituted exclusively in the state or federal courts in California; (ii) irrevocably to submit and 

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consent to the exclusive jurisdiction of the foregoing courts for any action properly brought pursuant to clause (i) above; and (iii) to waive any objection they may have now or hereafter to the venue of any action brought pursuant to clause (i) above.
(a)    Irreparable damage may occur if any of the provisions of this Agreement were not performed in accordance with their specific terms.  Accordingly, the Parties will be entitled to seek specific performance of the terms of this Agreement, this being in addition to any other remedy to which they are entitled at Law or in equity.
(b)    No failure or delay on the part of either Party in the exercise or assertion of any right under this Agreement will impair such right or be construed to be a waiver of, or acquiescence in, any breach of any representation or agreement herein, nor will any single or partial exercise of any such right preclude other or further exercise thereof or of any other right. All rights and remedies under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.
(c)    Any agreement on the part of a Party to any extension, waiver, amendment, modification or supplement of this Agreement or its rights hereunder will be valid only if set forth in an instrument in writing signed on behalf of such Party.
(d)    All rights and licenses granted under or pursuant to this Agreement by one Party to the other are, and will otherwise be deemed to be, for purposes of Article 365(n) of the Bankruptcy Code, licenses of rights to “intellectual property” as defined under Article 101(52) of the Bankruptcy Code. The Parties agree that either Party in its capacity as a licensee of such rights under this Agreement will retain and may fully exercise all of its rights and elections under the Bankruptcy Code.
9.8    Export Control Laws.  Anything contained in this Agreement to the contrary notwithstanding, the obligations of the Parties will be subject to all Laws, present and future and including export control laws and regulations, of any government having jurisdiction over the Parties hereto, and to orders, regulations, directions or requests of any such government.  Each Party will undertake to comply with and be solely responsible for complying with such Laws applicable to such Party.
9.9    Construction.  Any reference to a Party will include such Party’s permitted successors and permitted assigns.  If any ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties, and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement.  No prior draft of this Agreement will be used in the interpretation or construction of this Agreement.  Headings are used for convenience only and will not in any way affect the construction or interpretation of this Agreement.  The doctrine of election of remedies will not apply in constructing or interpreting the remedies provisions of this Agreement or the equitable power of a court considering this Agreement or the transactions contemplated hereby.

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9.10    No Implied Warranty.  EXCEPT AS SPECIFIED IN SECTION VII (REPRESENTATIONS AND WARRANTIES), AND ANY OTHER EXPRESS REPRESENTATION OR WARRANTY IN THIS AGREEMENT, THE LICENSES GRANTED HEREUNDER ARE GRANTED WITHOUT ANY WARRANTY OF ANY KIND.  EACH PARTY HEREBY DISCLAIMS ANY IMPLIED WARRANTIES OF ANY KIND INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT.
9.11    Damage Limitation.  EXCEPT FOR INFRINGEMENT OF THE OTHER PARTY’S INTELLECTUAL PROPERTY RIGHTS, ANY EXPRESS OBLIGATION OF A PARTY TO INDEMNIFY, HOLD HARMLESS AND DEFEND UNDER THIS AGREEMENT, AND FOR BREACH OF THE CONFIDENTIALITY OBLIGATIONS SET FORTH IN ARTICLE VI (CONFIDENTIALITY).  NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL OR SPECIAL DAMAGES, OR FOR LOST PROFITS OR COSTS ASSOCIATED WITH OBTAINING SUBSTITUTE PERFORMANCE HEREUNDER, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE BREACH THEREOF, REGARDLESS OF WHETHER SUCH PARTY HAD BEEN WARNED OF SUCH DAMAGES, AND REGARDLESS OF THE THEORY UPON WHICH SUCH DAMAGES ARE CLAIMED, INCLUDING, FOR BREACH OF CONTRACT, WARRANTY, TORT, NEGLIGENCE OR STRICT LIABILITY. 
[signature page follows]

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Illumina and Sequenom have duly executed and delivered this Pooled Patents Agreement as of the Effective Date.
	
		
	Illumina Inc.
	Sequenom, Inc.

	 
	 

	 
	 

	 
	 

	By:    
	By:    

	Name:       
	Name:       

	Title:    
	Title:    

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