Agreement by and among Pacific Biosciences of California, Inc., Illumina, Inc. and FC Ops Corp., dated January 2, 2020

Termination. As of the Effective Date, the Merger Agreement shall be terminated and be of no further force or effect, and no party thereto shall have any continuing liabilities, damages or obligations to the other party thereunder, except as expressly provided in this Agreement and pursuant to the Confidentiality Agreement.

Reverse Termination Fee. Notwithstanding anything to the contrary in the Merger Agreement, no later than January 6, 2020, the Reverse Termination Fee shall be paid by Parent to the Company by wire transfer of immediately available funds to an account or accounts designated by the Company. The Reverse Termination Fee will be repayable to Parent without interest by the Company solely in the event that, on or prior to September 30, 2020, the Company enters into a definitive agreement providing for, or consummates, a transaction described under clause (ii) or (iii) of the definition of Acquisition Proposal (with all percentages in the definition of Acquisition Proposal deemed to refer to 50%) had the Merger Agreement still been in effect (a “Change of Control Transaction”), but only if such Change of Control Transaction is consummated by the two-year anniversary of the execution of the definitive agreement for such Change of Control Transaction. Any repayment of the Reverse Termination Fee by the Company, if required, will occur in connection with, and be conditioned on, the consummation of such Change of Control Transaction. Other than as provided in this Section 2, the Parent Related Parties will have no right to recover the Reverse Termination Fee. For the avoidance of doubt, the Reverse Termination Fee will not be repayable, if required, on more than one occasion.

Continuation Advances. As previously contemplated by the Merger Agreement, Parent shall make a cash payment to the Company of $6 million on or before each of January 2, 2020, and March 2, 2020, and a cash payment to the Company of $22 million on or before February 3, 2020. Each payment made by Parent pursuant to this Section 3 as well as any amounts previously made by Parent pursuant to Section 10.03 of the Merger

Public Announcements. Parent and the Company shall consult with each other before issuing any press release, making any other public statement or scheduling any press conference, conference call or meeting with investors or analysts with respect to this Agreement (except as may be required by applicable law or any listing agreement with, or rule of, any national securities exchange or association) and shall not (except as may be required by applicable law or any listing agreement with, or rule of, any national securities exchange or association) issue any such press release, make any such other public statement or schedule any such press conference, conference call or meeting before such consultation.

Further Assurances. Each Party, at its own expense, shall execute and deliver, or shall cause to be executed and delivered from time to time, such further certificates, agreements or instruments and shall take such other action as the other party hereto may reasonably request to document and effect the termination of the Merger Agreement and the transactions contemplated thereby.

Binding Nature of Agreement; No Third-Party Beneficiaries. This Agreement shall be binding upon and inure to the benefit of the parties, their respective heirs, successors and permitted assigns, executors, or other such beneficiaries. This Agreement is not intended to create, and shall not create, any rights in any person who is not a party to this Agreement.

Miscellaneous. The provisions of Section 11.01, Section 11.03, Section 11.04(a), Section 11.04(c), and Sections 11.06 through Section 11.13 of the Merger Agreement are hereby incorporated by reference in this Agreement with the same effect as if such provisions were set forth herein with the appropriate changes made.