Exhibit 10.4

LEASE

BETWEEN

WXIII/▇▇▇▇▇▇▇▇▇▇ REALTY C, L.L.C.

AND

WXIII/▇▇▇▇▇▇▇▇▇▇ REALTY D, L.L.C.

(LANDLORD)

AND

SILICON GRAPHICS, INC.

(TENANT)

July 9, 2003

(▇▇▇▇▇▇▇▇▇▇ C and ▇▇▇▇▇▇▇▇▇▇ D)

TABLE OF CONTENTS

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COMMERCIAL LEASE
(▇▇▇▇▇▇▇▇▇▇ Parcel C and ▇▇▇▇▇▇▇▇▇▇ Parcel D)

THIS LEASE is entered into as of July 9, 2003, by and between each of WXIII/▇▇▇▇▇▇▇▇▇▇ Realty C, L.L.C., a Delaware limited liability company (the “C Landlord”) and WXIII/▇▇▇▇▇▇▇▇▇▇ Realty D, L.L.C., a Delaware limited liability company (the “D Landlord” and together with the C Landlord, the “Landlord”), and Silicon Graphics, Inc., a Delaware corporation (“SGI,” or the “Tenant”).

1.                                      A.  BASIC LEASE INFORMATION.  The following is a summary of basic lease information.  Each item in this Article 1 incorporates all of the terms set forth in this Lease pertaining to such item and to the extent there is any conflict between the provisions of this Article 1 and any more specific provisions of this Lease, the more specific provisions shall control.  Any capitalized term not defined in this Lease shall have the meaning set forth in the Glossary which appears at the end of this Lease.

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B.                                    GENERAL INTERPRETIVE PROVISIONS.

(a)                                  The terms “herein”, “hereto”, “hereunder” and all terms of similar import shall be deemed to refer to this Lease as a whole rather than to any Article, Section or Exhibit to this Lease.

(b)                                 Unless otherwise specified, references in this Lease to the “Section    ”, “Subsection    ” or “Article    ” shall be deemed to refer to the Section, Subsection or Article of this Lease bearing the number so specified.  References in this Lease to “Exhibit    ” shall be deemed to refer to the Exhibit or Schedule of this Lease bearing the letter or number so specified.

(c)                                  Unless otherwise specified or unless inappropriate in any specific context, all references in this Lease to any singular noun shall be deemed equally applicable to the plural of such noun, and all references to the plural of any noun shall be deemed equally applicable to the singular of such noun.

(d)                                 Captions used for or in Sections, Articles, Schedules and Exhibits of this Lease are for convenience of reference only and shall not affect the construction of this Lease.

(e)                                  The term “mortgage” shall include a mortgage, deed of trust or similar instrument, and shall include any such instrument to a trustee to secure an issue of bonds, and the term “mortgagee” shall include the secured party thereunder, including, such a trustee.

(f)                                    The terms “include”, “including” and “such as” shall each be construed as if followed by the phrase “without being limited to”.

(g)                                 The term “obligations of this Lease” and words of like import, shall mean the covenants to pay Base Rent and Additional Rent under this Lease and all of the other covenants and conditions contained in this Lease. Any provision in this Lease that one party or the other party or both shall do or not do or shall cause or permit or not cause or permit a particular act, condition or circumstance shall be deemed to mean that such party so covenants or both parties so covenant, as the case may be.

(h)                                 The term “Tenant’s obligations hereunder”, and words of like import, and the term “Landlord’s obligations hereunder”, and words of like import, shall mean the obligations, terms, covenants, provisions or conditions of this Lease which are to be performed or observed by Tenant, or by Landlord, as the case may be. Reference to “performance” of either party’s obligations under this Lease shall be construed as “performance and observance”.

(i)                                     Reference to Tenant being “in default hereunder”, or words of like import, shall mean that Tenant is in default in the performance of one or more of Tenant’s obligations hereunder, and reference to Tenant not being “in default hereunder” shall mean that Tenant is not in default in the performance of any of Tenant’s obligations.

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(j)                                     The term “repair” shall be deemed to include restoration and replacement as may be necessary to achieve and/or maintain good working order and condition.

(k)                                  Reference to “termination of this Lease” includes expiration or earlier termination of the Term or cancellation of this Lease pursuant to any of the provisions of this Lease or of any Legal Requirement.  Upon a termination of this Lease, the Term and estate granted by this Lease shall end at 11:59 p.m. of the date of termination as if such date were the Expiration Date and neither party shall have any further obligation or liability to the other after such termination (i) except as shall be expressly provided for in this Lease, or (ii) except for such obligations as by their nature or under the circumstances can only be, or by the express provisions of this Lease, may be, performed after such termination, and, in any event, unless expressly otherwise provided in this Lease, any liability for payment which shall have accrued to or with respect to any period ending at the time of termination shall survive the termination of this Lease.

(l)                                     The term “Tenant” shall mean Tenant herein named or any immediate or remote assignee of or other successor to the Tenant’s estate and interest under this Lease, provided that the foregoing shall not modify the provisions of Article 15.

(m)                               Whenever this Lease provides that Tenant shall indemnify the Landlord, such provision shall be deemed to mean that Tenant shall indemnify, defend and hold harmless Landlord in accordance with Article 14.

(n)                                 Except as the context may otherwise require, references to this “Lease” means this Lease and the Tenant Work Letter and any other exhibits and attachments hereto.

2.                                      PREMISES.

2.1                               Premises.  Subject to the terms, covenants and conditions set forth in this Lease, Landlord hereby leases to Tenant and Tenant hereby leases from Landlord those premises (the “Premises”) consisting of the buildings shown on Exhibit A-1 and identified in Article 1 (collectively, the “Building”).  The approximate total Rentable Area of the Premises and the Building are specified in Article 1.  Together, the Building, any other buildings located in the vicinity of the Building on the land described on Exhibit A-2 and operated as a common project with the Building, and the Common Area for the joint operation of the Building and such other buildings, are referred to as the “Property”.

2.2                               Common Area.  Landlord hereby grants to Tenant and its employees, agents, contractors and invitees (collectively, “Tenant’s Agents”) a non-exclusive license in common with other tenants of the Property to use the Common Area during the Term.  Tenant’s rights to the Common Area shall be subject to the Rules and

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Regulations described in Section 24.1 and to Landlord’s reserved rights described in Article 17.

2.3                               Parking.  Landlord hereby grants to Tenant and Tenant’s Agents a non-exclusive license in common with other tenants of the Property to use parking areas located on the Property for parking and for ingress to and egress from the Property. Tenant’s license shall not be assigned, sublet or otherwise transferred separately from the Premises.  Tenant agrees that neither Tenant nor Tenant’s Agents shall use parking spaces in areas not designated for Tenant’s use.  Landlord shall have the right, at Landlord’s sole discretion (but subject to any covenants or restrictions encumbering the Property), to specifically designate the location of Tenant’s parking spaces (if any) within the parking areas of the Common Area.  Tenant’s parking spaces (if any) may be relocated by Landlord from time to time upon written notice.  Tenant shall not, at any time, park, or permit the parking of the trucks or vehicles of Tenant or Tenant’s Agents in any portion of the Common Area not designated by Landlord for such use by Tenant.  Provided that Landlord and its agents may also use the parking areas in connection with the performance of its obligations or exercise of its rights under this Lease, Tenant’s right to use parking shall be equal to Tenant’s Share of parking (where the denominator used to determine such share shall equal the sum of the square footages of all of the Rentable Area of the Property).  Tenant shall not park nor permit to be parked any inoperative vehicles or store any materials or equipment on any portion of the parking area or other areas of the Common Area.  Tenant agrees to assume responsibility for compliance by Tenant’s Agents with the parking provisions contained in this Section.  Tenant hereby authorizes Landlord at Tenant’s expense to attach violation stickers or notices to such vehicles not parked in compliance with this Section and to tow away any such vehicles.  In addition, a specific section of the parking area may be set aside by Landlord for visitor parking for the Property.

3.                                      TERM.

3.1                               Term.  The Premises are leased for a term (the “Term”) commencing on the Commencement Date and expiring on the Expiration Date.  The Term shall end on the Expiration Date, or such earlier date on which this Lease terminates pursuant to its terms.  The date upon which this Lease actually terminates, whether by expiration of the Term or in the event of default or surrender of the Premises is sometimes referred to in this Lease as the “Termination Date”.

3.2                               Renewal Option.  Tenant shall have two (2) options (the “Renewal Options”) to extend the Term for a period of five (5) years (each, a “Renewal Term”, and respectively the “First Renewal Term” and the “Second Renewal Term”).  Each Renewal Term (i) must be exercised, if at all, as to the entire Premises subject to this Lease as of the Commencement Date (unless reduced pursuant to condemnation) and (ii) will be void if this Lease has previously expired or terminated with respect to any part of the Premises leased by Tenant hereunder as of the Commencement Date (other than as a result of condemnation), or if the Premises then leased by Tenant hereunder shall be less than 100% of the Premises as of the Commencement Date.  Each Renewal Option shall be void if an Event of Default by Tenant exists, either at the time of exercise of the

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applicable Renewal Option or the time of commencement of the applicable Renewal Term.  Each Renewal Option must be exercised, if at all, by written notice from Tenant to Landlord given not less than twelve (12) months prior to the expiration of the Term (in the case of the First Renewal Term), and not less than twelve (12) months prior to the expiration of the First Renewal Term (in the case of the Second Renewal Term).  For the avoidance of doubt, the Second Renewal Term shall be void unless the First Renewal Option shall be timely exercised by Tenant.  Each Renewal Term shall be upon the same terms and conditions as the original Term, except that the Base Rent applicable to the relevant Renewal Term shall be equal to the greater of (i) Base Rent payable under this Lease for the full year immediately preceding the effectiveness of that Renewal Term or (ii) Prevailing Market Rent as of the commencement of that Renewal Term, as determined pursuant to Exhibit C.  As a condition to the exercise and the effectiveness of the Renewal Option, Tenant shall be required to modify the Letter of Credit so that the Letter of Credit will have a face amount equal to the Required Amount and otherwise meet the requirements of Section 4.7 with respect to the Term as extended by Tenant’s exercise of the Renewal Option.  The Renewal Option is personal to Tenant and shall be inapplicable and null and void if Tenant assigns its interest under this Lease (including an “Assignment” as defined in Section 15.1 but excluding short-term Subleases contemplated by Section 15.11).

4.                                      RENT.

4.1                               Net Lease – Net Rent.  It is the purpose and intent of Landlord and Tenant that, except as expressly provided otherwise herein, this Lease shall be deemed and construed to be a so-called “triple net lease” and that the Base Rent and Additional Rent shall be absolutely net to Landlord throughout the Term, so that this Lease shall yield, absolutely net to Landlord, the Base Rent and Additional Rent throughout the Term, free of any charges, assessments, impositions, Real Estate Taxes or deductions of any kind charged, assessed or imposed on or against the Premises and without abatement, deduction, deferment, reduction, defense, credit, set-off or counterclaim (except as may otherwise be expressly provided herein) whatsoever by Tenant, and Landlord shall not under any circumstances or conditions, whether now existing or hereafter arising, or whether beyond the present contemplation of the parties, be expected or required to pay any such charge, assessment, imposition, Real Estate Tax or deduction, or be under any obligation or liability hereunder except as expressly otherwise provided herein. It is agreed that except as expressly otherwise provided herein all costs, expenses and charges of every kind and nature whatsoever relating to the Premises, or the use, operation or maintenance thereof, which may arise or become due during the Term of this Lease, including, without limitation, those relating to the maintenance, preservation, care, repair and operation of the Premises (including, without limitation, all costs, expenses and charges for water, sewer, natural gas, electricity, telephone and any other utility used upon or furnished to the Premises) and all restorations, replacements, Alterations and additions in and to the Premises as herein provided, but specifically excluding Monthly Rent under the Ground Lease, shall be paid and/or performed by Tenant, at Tenant’s sole cost and expense, and Landlord shall be indemnified and saved harmless by Tenant from and against the same.

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4.2                               Base Rent.  (a) Commencing upon the Base Rent Commencement Date in respect of all portions of the Premises except the Top Floors, and commencing upon the Top Floor Payment Commencement Date in respect of the Top Floors, and thereafter during the Term, Base Rent will be payable in monthly installments in advance on or before the first day of each month at the rate of one-twelfth (1/12) of the annual Base Rent specified in Article 1.  Landlord will, on or after the first day of each calendar month or the immediately preceding business day if the first day of a month is not a business day, draw upon the Letter of Credit each month for payment of monthly Base Rent then due.  If Landlord notifies Tenant that Landlord does not intend or is unable to draw on the Letter of Credit, Tenant shall pay the Base Rent due to Landlord by wire transfer of immediately available funds, to Landlord’s account specified in writing to Tenant, without any prior notice or demand and without any deductions or setoff whatsoever, other than as expressly provided herein.  If the Commencement Date or the Top Floor Payment Commencement Date occurs on a day other than the first day of a calendar month, or the Termination Date occurs on a day other than the last day of a calendar month, then the Base Rent for such fractional month will be prorated on the basis of the actual number of days in such month.  The Rentable Area of the Premises and the Building shall be conclusively presumed to be as stated in Article 1, and shall not be subject to adjustment by either Landlord or Tenant during the Term, other than as described herein.

(b)                                 Commencing on December 1, 2004 and every December 1 thereafter (each, an “Adjustment Date”), the Base Rent shall be increased as stated in Article 1.

4.3                               Tenant Future Payments.  Tenant shall pay to Landlord the 2004 Payment on the 2004 Payment Date, and the 2005 Payment on the 2005 Payment Date.

4.4                               Additional Rent.  All sums due from Tenant to Landlord (other than the Base Rent) or to any third party under the terms of this Lease shall be additional rent (“Additional Rent”), including, without limitation, the 2004 Payment and the 2005 Payment, the charges for Operating Expenses (described in Article 5) and all sums incurred by Landlord due to Tenant’s failure to perform its obligations under this Lease. In accordance with Section 5.1, (a) Tenant shall pay directly to the person entitled thereto all Operating Expenses identified in clauses (iii), (vii) and (viii) of Section 5.1(b), and (b) Landlord shall pay directly Operating Expenses identified in Section 5.1(b) (other than in clauses (iii), (vii) and (viii)), for which Tenant shall reimburse Landlord as Additional Rent payable in monthly installments in advance equal to one-twelfth (1/12) of Tenant’s Share of the annual amount thereof.  All Additional Rent which is payable to Landlord shall be paid at the time and place that Base Rent is paid.  For the avoidance of doubt, Landlord will draw upon the Letter of Credit each month on the same day that Base Rent is drawn in an amount equal to the Additional Rent then due (including, if applicable, the 2004 Payment and the 2005 Payment), provided that if Landlord delivers the notice described in Section 4.2(a), Tenant shall pay the Additional Rent to Landlord in the same manner as Base Rent.  Landlord will have the same remedies for a default in the payment of any Additional Rent as for a default in the payment of Base Rent.  Together, Base Rent and Additional Rent are sometimes referred to in this Lease as “Rent”.  There shall be no

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abatement of, deduction from, counterclaim or setoff against Rent except as otherwise specifically provided in this Lease.

4.5                               Late Payment.  Any unpaid Rent shall bear interest from the date due until paid at the lesser of (i) fifteen percent (15%) per annum or (ii) the maximum interest rate allowed by law (the “Interest Rate”).  Tenant agrees that the interest charge provided for herein is equal to or less than a reasonable estimate of the additional administrative costs and detriment that will be incurred by Landlord as a result of the failure by Tenant to pay Rent in a timely manner.  In the event of nonpayment of interest on overdue Rent, Landlord shall have, in addition to all other rights and remedies, the rights and remedies provided in this Lease and by law for nonpayment of rent.

4.6                               Covenant.  Tenant covenants to pay (a) Rent when due and (b) observe and perform and not to suffer or permit any violation of Tenant’s obligations under this Lease.

4.7                               Credit Enhancement.  (a)  On or prior to the Commencement Date, Tenant shall deliver to Landlord a Letter of Credit as security for the full and punctual performance by Tenant of all of the terms of this Lease.  For so long as the Letter of Credit is in effect and sufficient funds thereunder shall be available for draw, Landlord shall be entitled to draw such Letter of Credit each month for payment of Base Rent and Additional Rent.  In addition, if Landlord shall be entitled to draw the Letter of Credit in whole or in part pursuant to the other provisions of this Lease, Landlord shall have the right, at its option, either to deposit the cash proceeds of any such draw upon the Letter of Credit into a cash collateral account (the “Cash Collateral Account”) established in Landlord’s name and maintained by Landlord or to apply the proceeds to the obligations of Tenant due or to become due hereunder.  The Cash Collateral Account shall be under the sole dominion and control of Landlord and Landlord shall have the sole right to make withdrawals from the Cash Collateral Account and to exercise all rights with respect to the amounts deposited in the Cash Collateral Account.

(b)                                 The initial letter of credit and any replacement letter of credit issued to Landlord shall satisfy the requirements set forth in this Section 4.7 (each, a “Letter of Credit”).  Each Letter of Credit shall be a clean, irrevocable, non-documentary and unconditional letter of credit issued by and drawable upon any commercial bank, trust company, national banking association or savings and loan association with offices for banking and drawing purposes in The City of San Francisco or the City of New York (the “Issuing Bank”), which has outstanding, unsecured, uninsured and unguaranteed indebtedness, or shall have issued a letter of credit or other credit facility that constitutes the primary security for an outstanding indebtedness (which is otherwise uninsured and unguaranteed), that is then rated, without regard to qualification of such rating by symbols such as “+” or “-” or numerical notation, “A” or better by ▇▇▇▇▇’▇ Investment Service and “A” or better by Standard & Poor’s Ratings Service (and is not on credit-watch or similar credit review with negative implication), and has combined capital, surplus and undivided profits of not less than $1,000,000,000.  Each Letter of Credit shall (i) name Landlord as beneficiary, (ii) be in the amount of the Required Amount, (iii) have a term of not less than one (1) year, (iv) permit multiple drawings, (v) be fully

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transferable by Landlord without payment of any fees or charges, (vi) at Landlord’s request, name any Leasehold Mortgagee as a co-beneficiary and (vii) otherwise be in form and content satisfactory to Landlord in its sole discretion.  If upon the transfer of any Letter of Credit, any fees or charges shall so be imposed, then such fees or charges shall be payable solely by Tenant and the Letter of Credit shall so specify.  Regardless of the initial expiration date of any Letter of Credit, each Letter of Credit shall expressly provide that (unless notice of non-renewal is delivered in accordance with the following sentence) it shall be deemed automatically renewed, without amendment, for consecutive periods after such expiration date of one year each during the Term through the date that is at least one hundred twenty (120) days after the Expiration Date.  If the Issuing Bank desires not to renew a Letter of Credit, it shall deliver a notice (the “Non-Renewal Notice”) to Landlord by certified mail, return receipt requested, not less than sixty (60) days prior to the then-current expiration date of the Letter of Credit, stating that the Issuing Bank has elected not to renew the Letter of Credit.  In such event or if (a) for any other reason the Letter of Credit would expire by its terms in sixty (60) days or less from such date or (b) the Issuing Bank is downgraded so that it no longer satisfies the rating requirements set forth in this Section 4.7, Landlord shall have the right, at its option, either (x) to draw the full amount of the Letter of Credit, by sight draft on the Issuing Bank, and thereafter hold the proceeds in the Cash Collateral Account and apply them pursuant to the terms of this Article 4, or (y) to require Tenant to procure, or Landlord to procure on Tenant’s behalf at Tenant’s cost and utilizing if necessary the cash proceeds so drawn, a replacement Letter of Credit that satisfies the requirements of this Section 4.7; provided that Landlord shall provide Tenant with notice of any such event at least ten (10) business days before exercising such rights and Tenant may, within ten (10) business days after such notice is provided, deliver a replacement Letter of Credit that satisfies the requirements of this Section 4.7, and provided further that such notice shall not be required in the event Landlord determines in good faith that the delay caused by providing such notice presents a risk that Landlord will not be able to exercise its rights to draw upon the Letter of Credit following such delay.  In the event that Tenant’s Letter of Credit expires at any time without the proceeds being drawn down and deposited in the Cash Collateral Account, Tenant shall be obligated to deliver a new Letter of Credit to Landlord complying with the terms of this Section 4.7.  Each Letter of Credit shall be governed by the International Standby Practices-ISP98 or any standard set of practices replacing ISP98.  Each Letter of Credit shall be substantially in the form attached hereto as Exhibit D.

(c)                                  Within three (3) business days following any draw under the Letter of Credit or such shorter period as may be required under the Tenant’s reimbursement agreement with the Issuing Bank, Tenant shall reimburse the Issuing Bank for each such draw in an amount sufficient to insure that the face value of the Letter of Credit is an amount at least equal to the Required Amount and will cause the Issuing Bank to provide written notice to Landlord if such reimbursement is not timely made.  In the event Tenant fails to timely reimburse the Letter of Credit bank or increase the face amount of the Letter of Credit required, such failure shall constitute an Event of Default hereunder, and, in addition to all other rights and remedies available to Landlord for Tenant’s default, Landlord shall have the right to draw the full amount of the Letter of Credit, by sight

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draft on the Issuing Bank, and shall thereafter hold in the Cash Collateral Account or apply the cash proceeds of the Letter of Credit pursuant to the terms of this Article 4.

(d)                                 In addition to the foregoing, if an Event of Default occurs under this Lease, Landlord may draw the full amount of the Letter of Credit, by sight draft on the Issuing Bank, and thereupon receive all or a portion of the face amount of the Letter of Credit, and use, apply or retain the whole or any part of such proceeds, as the case may be, to the extent required for the payment of any Base Rent, Additional Rent or other amounts due or to become due hereunder or for any reasonable sum which Landlord may expend or may be required to expend by reason of Tenant’s default in respect of any of the terms of this Lease, including any damages or deficiency in the re-letting of the Premises, whether accruing before or after summary proceedings or other re-entry by Landlord.  In the case of every such use, application or retention, Tenant shall, within three (3) business days following any such use, application or retention or such shorter period as may be required under the Tenant’s reimbursement agreement with the Issuing Bank, cause the face value of the Letter of Credit to be restored to the Required Amount, and Tenant shall cause the Issuing Bank to acknowledge to Landlord that such restoration of the Required Amount occurred in a timely manner.  In the event the Landlord draws upon the Letter of Credit as provided in this Section 4.7 and retains excess proceeds of such draw in the Cash Collateral Account,  Tenant shall only be required to cause the face value of the Letter of Credit to be restored to an amount equal to the Required Amount less the amount of excess proceeds which Landlord has deposited in the Cash Collateral Account.  In the event Landlord withdraws funds in the Cash Collateral Account for amounts secured by the Letter of Credit as set forth in this Section 4.7, Tenant shall within three (3) days following Landlord’s notice to Tenant of such withdrawal, cause the face value of the Letter of Credit to be increased by the amount of funds withdrawn from the Cash Collateral Account.  Subject to Section 33.20, if Tenant shall fully and punctually comply with all of the terms of this Lease, the Letter of Credit shall be terminated on the one hundred twentieth (120th) day after the termination of this Lease and delivery of exclusive possession of the Premises to Landlord.

(e)                                  In the event of a transfer of Landlord’s interest in the Building or the Property, Landlord shall have the right to transfer the Letter of Credit or Cash Collateral to the transferee and upon such transfer to such transferee, Landlord shall ipso facto be released by Tenant from all liability for the return of the Letter of Credit or Cash Collateral; provided the transferee agrees to assume Landlord’s obligation to return the Letter of Credit or Cash Collateral; and Tenant agrees to look solely to the new landlord for the return of said Letter of Credit or Cash Collateral; and it is agreed that the provisions hereof shall apply to every transfer or assignment made of the Letter of Credit or Cash Collateral to a new landlord.  Tenant shall promptly execute such documents reasonably requested by Landlord as may be necessary to accomplish any such transfer or assignment of the Letter of Credit or Cash Collateral.  Tenant shall not assign or encumber or attempt to assign or encumber the Letter of Credit or Cash Collateral and neither Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance or attempted assignment or encumbrance.  Upon ten (10) days prior written notice from Landlord, Tenant shall cause any Letter of Credit to be modified so that it names any Leasehold Mortgagee as the co-beneficiary under the Letter of Credit.  The

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Letter of Credit shall provide that sight drafts presented for payment of monthly Base Rent shall identify the monthly Base Rent payment to which they relate.  In the event the Issuing Bank is presented with multiple sight drafts from the beneficiary and co-beneficiary for payment of the same monthly Base Rent, the Issuing Bank shall honor the first sight draft received by the Issuing Bank for such monthly Base Rent payment.  If at any time the Issuing Bank is presented with multiple sight drafts from the beneficiary and co-beneficiary for draw of amounts other than the same monthly Base Rent payment, and such requested amounts in the aggregate exceed the face value of the Letter of Credit, the Issuing Bank shall honor the sight draft presented by the co-beneficiary and not the sight draft presented by the beneficiary.

(f)                                    From time to time, Tenant may substitute the letter of credit then in effect with a substitute letter of credit meeting the requirements of this Section 4.7 and otherwise in substantially the form of the letter of credit then in effect.

4.8                               Legal Requirements.  If any of the Rent payable under the terms of this Lease shall be or become uncollectible, reduced or required to be refunded because of any Legal Requirement, Tenant shall enter into such agreements and take such other steps as Landlord may reasonably request and as may be legally permissible, to permit Landlord to collect the maximum rents which from time to time during the continuance of such legal rent restriction may be legally permissible.  Upon the termination of such legal rent restriction, (a) the rents shall become and thereafter be payable in accordance with the amounts reserved herein for the periods following such termination and (b) Tenant shall pay to Landlord, to the maximum amount legally permissible, an amount equal to, (i) the rents which would have been paid pursuant to this Lease but for such legal restriction, less (ii) the rents and payments in lieu of rents paid by Tenant during the period such legal restriction was in effect.

5.                                      OPERATING EXPENSES.

5.1                               Operating Expenses.  For purposes of this Article 5, the following terms shall have the meanings described below:

(a)                                  “Tenant’s Share” means (i) 50% with respect to D Premises and 100% with respect to C Premises for the period commencing with the Commencement Date and ending with the Top Floor Payment Commencement Date, provided that if Tenant shall occupy all or any portion of the Top Floors prior to the Top Floor Payment Commencement Date, then Tenant’s Share shall be increased in respect of such period of occupancy by increasing the numerator used in calculating Tenant’s Share by the square footage of Rentable Area so occupied by Tenant; and (ii) 100% for both the C Premises and the D Premises for the period commencing with the Top Floor Payment Commencement Date and ending on the date the Premises leased by Tenant hereunder shall be less than 100% of the Premises.  In such event, Tenant’s Share shall be reduced to the proportionate share of the Rentable Area then leased by Tenant at the Building.  Notwithstanding the foregoing, to the extent incurred by Landlord in connection with the ownership, management, operation, maintenance, repair and replacement

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of the Common Area, Tenant’s Share with respect to (b)(iv), (b)(v), (b)(vi), (b)(x), (b)(xii), (b)(xiii), (b)(xiv), (b)(xv), (b)(xvii), (b)(xviii) and (b)(xix) shall be the percentage determined by dividing the Rentable Area then leased by Tenant at the Building by the total Rentable Area at the Property (except to the extent that any of the foregoing are dependent or based on usage, in which case, Tenant’s Share shall be determined by reference to Tenant’s usage relative to the usage of other occupants of the Property).  The parties hereto acknowledge that Tenant’s Share is based upon an assumption that the C Premises contain a total of 114,122 square feet of Rentable Area, the D Premises contain a total of 124,389 square feet of Rentable Area, the Premises in its entirety contains a total of 238,511 square feet of Rentable Area and the Property contains a total of 471,749 square feet (of which 115,023 is attributable to ▇▇▇▇▇▇▇▇▇▇ B), and that the calculation of Tenant’s Share is based upon a fraction, the denominator of which is, as applicable, 114,122 (for the C Premises), 124,389 (for the D Premises), 238,511 (for the Premises), or 471,749 (for the Property), in accordance with the terms of this section.

(b)                                 “Operating Expenses” means the total costs and expenses paid or incurred by Landlord in connection with the ownership, management, operation, maintenance, repair and replacement of the Building and the Common Area in connection with its obligations hereunder, including, without limitation, all costs of:

(i)                                     amounts payable under the Ground Lease other than Monthly Rent (including escalations);

(ii)                                  taxes, assessments and charges levied upon or with respect to the Property or any personal property of Landlord used in the operation of the Property, or on Landlord’s interest in the Property or such personal property (“Real Estate Taxes”).  Real Estate Taxes shall include, without limitation, all general real property taxes and general and special assessments, charges, fees, or assessments for transit, housing, police, fire, or other governmental services or purported benefits to the Property or the occupants thereof, service payments in lieu of taxes that are now or hereafter levied or assessed against Landlord by the United States of America, the State of California or any political subdivision thereof, or any other political or public entity, and shall also include any other tax, assessment or fee, however described, that may be levied or assessed as a substitute for, or as an addition to, in whole or in part, any other Real Estate Taxes, whether or not now customary or in the contemplation of the parties as of the Commencement Date.  Real Estate Taxes shall not include franchise, transfer, succession, gift, inheritance, gross receipts or capital stock taxes or income taxes measured by the net income of Landlord unless, due to a change in the method of taxation, any of such taxes is levied or assessed against Landlord as a substitute for, or as an addition to, in whole or in part, any other tax that would otherwise constitute a Real Estate Tax.  Real Estate Taxes shall also include

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reasonable legal fees, costs, and disbursements incurred in connection with proceedings to contest, determine, or reduce Real Estate Taxes;

(iii)                               repair, maintenance, replacement and supply of air conditioning, electricity, steam, water, heating, ventilating, mechanical, escalator and elevator systems, sanitary and storm drainage systems and all other utilities and mechanical systems which are commonly used by all Building tenants;

(iv)                              landscaping and gardening;

(v)                                 security, repaving, repairing, maintaining and restriping of parking areas;

(vi)                              repairs and maintenance to the Common Area, and all labor and material costs related thereto;

(vii)                           security and fire protection to the Building (other than areas occupied by tenants);

(viii)                        general maintenance, janitorial services, trash removal, cleaning and service contracts for the Building and the cost of all supplies, tools and equipment required in connection therewith;

(ix)                                all insurance (including earthquake coverage) carried by Landlord on the Building, the Common Area and the Property, or in connection with the use or occupancy thereof, including fire and extended coverage, vandalism and malicious mischief, public liability and property damage, worker’s compensation insurance, rental income insurance, terrorism insurance and any other insurance commonly carried by prudent owners of comparable buildings;

(x)                                   wages, salaries, payroll taxes and other labor costs and employee benefits for all persons engaged in the operation, management, maintenance and security of the Property and not otherwise on the general payroll of Landlord or an affiliate of Landlord or any property manager other than a person located on site at the Property based on the proportionate amount of time such person devotes to the management of the Property relative to other properties;

(xi)                                management fees at commercially reasonable rates, provided that, so long as Tenant leases hereunder 100% of the Premises leased by Tenant hereunder as of the Commencement Date Tenant shall have the right to approve the Property manager, such approval not to be unreasonably withheld or delayed, and Tenant hereby agrees that Legacy Property Management, L.P. is an acceptable manager; provided further, it is agreed that (x) as of the date hereof, 1.25% per annum of the annual Base Rent and Operating Expenses payable by Tenant to Landlord (and

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not directly to third parties as permitted by Section 5.2) hereunder constitutes a commercially reasonable rate and (y) the same shall not be subject to increase or decrease to reflect changing market conditions until after the first anniversary of the date hereof;

(xii)          fees, charges and other costs of all independent contractors engaged by Landlord;

(xiii)         license, permit and inspection fees;

(xiv)        charges on or surcharges imposed by any governmental agencies on or with respect to transit or automobile usage or parking facilities;

(xv)         the cost of supplies, tools, machines and equipment used in operation and maintenance of the Common Area;

(xvi)        any Ordinary Capital Improvements; provided that the cost of any such Ordinary Capital Improvements shall be amortized over the useful life of the improvement in question, together with interest on the unamortized balance at the Interest Rate;

(xvii)       the cost of contesting the validity or applicability of any governmental enactments including taxes which may affect operating expenses;

(xviii)      audit and bookkeeping fees, and legal fees and expenses; and

(xix)         any other expenses of any kind whatsoever reasonably incurred in connection with the management, operation, maintenance, repair and replacement of the Building and the Common Area.

Notwithstanding anything in the definition of Operating Expenses to the contrary, Operating Expenses shall not include the following, except to the extent specifically permitted by a specific exception to the following:

(A)                              Costs actually reimbursed to Landlord by insurance proceeds for the repair of damage to the Building;

(B)                                Marketing costs, including without limitation, leasing commissions, space planning costs, and other costs and expenses incurred in connection with lease, sublease and/or assignment negotiations and transactions with Tenant or present or prospective tenants of the Building;

(C)                                Overhead and profit increment paid to Landlord or to subsidiaries or affiliates of Landlord for goods and/or services in or to

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the Building to the extent the same exceeds the costs of such goods and/or services generally available to unaffiliated third parties;

(D)                               Costs of capital improvements that do not constitute Ordinary Capital Improvements unless Tenant shall request or approve any such capital improvements;

(E)                                 Interest, principal, points and fees on debts or amortization on any mortgage or mortgages or any other debt instrument encumbering the Building or the Property; and

(F)                                 Monthly Rent (including escalations) due during the Term from C Landlord under the C Ground Lease and from D Landlord under the D Ground Lease (the C Ground Lease and the D Ground Lease collectively, the “Ground Lease”) in each case with respect to the Property.

5.2                               Payment of Operating Expenses.  Commencing on the Commencement Date, Tenant shall pay to Landlord as Additional Rent one twelfth (1/12) of Tenant’s Share of Operating Expenses paid or incurred by Landlord for each calendar year or portion thereof during the Term, in advance, on or before the first day of each month in an amount estimated by Landlord as stated in a written notice to Tenant. Landlord shall pay Operating Expenses and be reimbursed for the same in accordance herewith (except that Tenant shall pay directly to the parties entitled thereto, as Additional Rent, items (iii), (vii) and (viii) of Section 5.1(b) above).  Landlord may by written notice to Tenant revise such estimates from time to time and Tenant shall thereafter make payments on the basis of such revised estimates, commencing on the date immediately following the receipt of such revised estimates that is the earlier of January 1 and August 1.  With reasonable promptness after the expiration of each calendar year, Landlord will furnish Tenant with a statement (“Landlord’s Expense Statement”) setting forth in reasonable detail the actual Operating Expenses for such year and Tenant’s Share.  If Tenant’s Share of the actual Operating Expenses for such year exceeds the estimated Operating Expenses paid by Tenant for such year, Tenant shall pay to Landlord (whether or not this Lease has terminated) the difference between the amount of estimated Operating Expenses paid by Tenant and Tenant’s Share of the actual Operating Expenses within fifteen (15) days after the receipt of Landlord’s Expense Statement.  If the total amount paid by Tenant for any year exceeds Tenant’s Share of the actual Operating Expenses for that year, the excess shall be credited against the next installments of Base Rent due from Tenant to Landlord, or, if after the Termination Date, the excess shall first be credited against any unpaid Base Rent or Additional Rent due and remaining any excess shall be refunded to Tenant concurrently with the furnishing of Landlord’s Expense Statement.

5.3                               Proration.  If either the Commencement Date, the Top Floor Payment Commencement Date or the Termination Date occurs on a date other than the first or last day, respectively, of a calendar year, Tenant’s Share of Operating Expenses

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for the year in which the Commencement Date, Top Floor Payment Commencement Date or Termination Date occurs shall be prorated based on a 365-day year.

5.4                               Normalization.  For the purpose of determining Operating Expenses for any partial year, Operating Expenses shall be deemed to accrue uniformly during the entire calendar year.  If any part of the Building or (with respect to those Operating Expenses for which Tenant’s Share is determined by the Rentable Area of the Property) other rentable areas of the Property is not fully leased during a calendar year, Operating Expenses shall be adjusted to add amounts and items of Operating Expenses which would normally have been incurred if the Building or other rentable areas of the Property (as applicable) had been fully leased during such calendar year and Tenant’s Share of Operating Expenses (both for the purposes of the initial estimate and year-end reconciliation) shall be based on an assumed full occupancy of the Building or the Property (as applicable).

5.5                               Other Buildings.  In the event any facilities, services or utilities used in connection with the Building are provided from another building owned or operated by Landlord or vice versa, the costs incurred by Landlord in connection with the operation of the Building shall be allocated to Operating Expenses by Landlord on a reasonably equitable basis, subject to the terms of existing covenants and restrictions encumbering the Property.

5.6                               Utility Costs.  Subject to the provisions of Section 8.1(c), Tenant shall be solely responsible for and shall make all arrangements for all utilities and services exclusively furnished to or used at the Premises, including, without limitation, all water, gas, electricity, sewer service, waste pick-up and any other utilities, materials or services.

5.7                               Taxes on Tenant’s Property and Business.  At least ten (10) days prior to delinquency, Tenant shall pay all taxes levied or assessed by any local, state or federal authority upon the conduct of Tenant’s business in the Premises or upon Tenant’s Property (as defined in Section 10.6).  Upon Landlord’s request, Tenant shall deliver satisfactory evidence of payment of all such taxes.  If the assessed value of the Property is increased by the inclusion of a value placed upon Tenant’s Property, Tenant shall pay to Landlord, upon written demand, the taxes so levied against Landlord, or the portion of Landlord’s taxes resulting from said increase in assessment, as determined from time to time by Landlord.

6.                                      GROUND LEASE.

6.1                               Ground Lease.  A copy of the Ground Lease is attached hereto as Exhibit E and the obligations of “Tenant” thereunder (which Tenant hereby agrees it will perform) (except only those excluded provisions identified in Section 6.2 of this Lease) are hereby incorporated herein by this reference.  In addition, to the extent practicable, Landlord shall have all of the rights and remedies granted to the “Landlord” under the Ground Lease, which rights and remedies are incorporated herein by this reference.  In accordance with Section 17.5(b) of this Lease, this Lease is subordinate and subject to the

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Ground Lease, and Tenant agrees to be bound by and subject to the terms of the Ground Lease.

6.2                               Compliance with Obligations; Conflicts.  (a)   Tenant shall, at Tenant’s sole cost and expense, throughout the Term, comply with, satisfy and cause the Premises to comply with and satisfy, each of the provisions of the Ground Lease within the period of time and in the manner required by the Ground Lease, excluding, however the following provisions of the Ground Lease: Article 1 (Definitions) (unless such definitions are used in the incorporated sections), Article 2 (Demise, Term and Surrender) (other than Section 2.9), Article 3 (Rent), Sections 4.4, 4.5.1, 4.5.3, 4.5.9.1, 4.5.9.2, 4.5.9.3, 4.5.12 and 4.6 of Article 4 (Use), Article 5  (Payment of Real Property Taxes and Facility Charges), Sections 6.1, 6.2, and 6.3 of Article 6 (Construction of Improvements and Mechanic’s Liens), Sections 7.1.1 and 7.4 of Article 7 (Insurance and Indemnity), Article 9 (Condemnation), Article 10 (Default and Remedies), Article 11 (Assignment and Subletting), Article 12 (Transfer of Leased Premises by Landlord), Article 13 (Tenant Mortgages) and Article 14 (General Provisions, except to the extent relevant to the incorporated sections).  Tenant shall not do, permit, suffer or refrain from doing anything which is Tenant’s obligation under this Lease to do, as a result of which there could be a default under the Ground Lease.  Notwithstanding anything to the contrary contained in this Lease, in the event the time given to Landlord as tenant under the Ground Lease is shorter than the time given to Tenant by this Lease to perform or do the same act or thing, then Tenant shall perform or do said thing within the time specified in the Ground Lease.

(b)                                 So long as this Lease is in effect as to, and Tenant is currently occupying, more than 25% of the Building and no Event of Default has occurred, Landlord shall not, without Tenant’s prior consent, exercise any right to terminate the Ground Lease pursuant to the terms thereof.  Tenant shall respond to any request for consent to such termination within five (5) business days following receipt thereof, and, if Tenant does not respond within such five (5) business day period, Tenant shall be deemed to have consented.  If Landlord terminates the Ground Lease in accordance with the foregoing, this Lease shall terminate.

6.3                               Landlord Ground Rent Obligation.  Landlord covenants and agrees that (except as may otherwise be waived or modified) Landlord shall pay to Ground Lessor Monthly Rent (including escalations) and any late charge and interest due in connection with the payment thereof under Article 3 of the Ground Lease.

7.                                      USE OF PREMISES AND CONDUCT OF BUSINESS.

7.1                               Permitted Use.  (a)  Tenant (and any permitted successor, assign or subtenant of Tenant, whether by Landlord’s consent or by operation of law) may use and occupy the Premises during the Term solely for the uses specified and permitted in Article 1 and for no other purpose without the prior written consent of Landlord, such consent to be granted or withheld in Landlord’s sole discretion.  The foregoing statement shall not constitute a representation or guaranty by Landlord that such business may be conducted in the Premises or is lawful or permissible under any certificates of occupancy

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issued for the Premises or the Building, or is otherwise permitted by law.  Tenant’s use of the Premises shall in all respects comply with all Legal Requirements.

(b)                                 If any governmental license or permit shall be required for the proper and lawful conduct of Tenant’s business in the Premises or any part thereof, then Tenant, at its expense, shall duly procure and thereafter maintain such license or permit and shall submit same to Landlord for inspection.  Tenant shall at all times comply with the terms and conditions of such license and permit, but in no event shall failure to procure or maintain such license or permit affect Tenant’s obligations hereunder.

7.2                               Prohibited Uses.  Tenant shall not use the Premises or allow the Premises to be used for any illegal or immoral purpose, or so as to create waste, constitute a private or public nuisance, or disturb other occupants of the Property.  Tenant shall not place any loads upon the floors, walls, or ceiling which endanger the structure, or place any harmful fluids or other materials in the drainage system of the Building, or overload existing electrical or other mechanical systems.  Tenant shall not use any machinery or equipment which causes any substantial noise or vibration.  No waste materials or refuse shall be dumped upon or permitted to remain upon any part of the Premises or outside of the Premises except in trash containers placed inside exterior enclosures designated by Landlord for that purpose or inside of the Premises where approved by Landlord.  No materials, supplies, equipment, finished products or semi-finished products, raw materials or articles of any nature shall be stored upon or permitted to remain outside the Premises or on any portion of the Common Area unless otherwise approved by Landlord in its sole discretion.  No loudspeaker or other device, system or apparatus which can be heard outside the Premises shall be used in or at the Premises without the prior written consent of Landlord.  No explosives or firearms shall be brought into the Premises, except that firearms may be carried by personnel of security firms retained by Landlord or Tenant for the provision of security services to the Premises.

7.3                               Food and Beverage.  If Tenant engages in the cooking of food, beverages or baked goods, Tenant shall, at Tenant’s sole cost and expense, comply with all applicable Legal Requirements and insurance requirements.

8.                                      REPAIRS AND MAINTENANCE; SERVICES.

8.1                               Landlord’s Obligations.  (a) Except as specifically provided in this Lease, Landlord shall not be required to furnish any services, facilities or utilities to the Premises or to Tenant, and Tenant assumes full responsibility for obtaining and paying for all services, facilities and utilities to the Premises.  Landlord will maintain casualty insurance as required by Section 7.2 of the Ground Lease.  Landlord will repair and maintain the Common Area and the Structural Components in good working order and in a clean, safe and sanitary condition.  All repairs and maintenance performed by Landlord shall be made and performed so that the same shall be comparable in quality, value and utility to the original work or installation and in a manner and using equipment and materials that will not interfere with or impair the operations, use or occupancy of the Premises by Tenant.  Tenant shall notify Landlord in writing of the need for any repair or

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maintenance which is Landlord’s responsibility under this Section.  The costs of such repair and maintenance shall be included in Operating Expenses to the extent provided in Article 5; provided that Tenant shall reimburse Landlord upon written demand for the cost of any repair to the Structural Components or the Common Area which is attributable to the conduct or misuse of Tenant or its Agents.  The reimbursement shall be Additional Rent.  Tenant hereby waives and releases any right it may have under any law, statute or ordinance now or hereafter in effect to make any repairs which are Landlord’s obligation under this Section.

(b)                                 Tenant recognizes and acknowledges that the operation of the Building Systems may cause vibration, noise, heat or cold which may be transmitted throughout the Premises.  Landlord shall have no obligation to endeavor to reduce such vibration, noise, heat or cold.

(c)                                  Tenant shall contract directly with utility companies for the provision of water, electricity and (except as provided for herein) such other services and utilities as Tenant may require for the use and occupancy of the Premises, and Tenant shall timely pay all charges incurred in connection therewith. Landlord shall have no responsibility or liability in connection with the provision (or failure to provide) such services or utilities or any obligation to modify, supplement or replace the Building Systems, Structural Components or any other portion of the Building or Property to the extent required for Tenant to obtain such services or utilities.

(i)                                     Landlord does not warrant that any services or utilities that Tenant may obtain in respect of the Premises (whether from Landlord, a utility company, municipality or otherwise, and regardless whether the same are available at the Premises as of the date hereof or hereafter) will be free from shortages, failures, variations, or interruptions caused by strikes, lockouts, labor controversies, accidents, inability to obtain services, fuel, steam, water or supplies or reasonable substitutes therefor, governmental requirements or restrictions, acts of war or acts of God or other causes beyond Landlord’s reasonable control.  None of the same shall be deemed an eviction or disturbance of Tenant’s use and possession of the Premises or any part thereof, or, render Landlord liable to Tenant for abatement of Rent, or relieve Tenant from performance of Tenant’s obligations under this Lease.  Landlord in no event shall be liable for damages by reason of loss of profits, business interruption or other consequential damages.

(ii)                                  Landlord shall have the right to use electricity, water and other utilities and services available in the Building, at no cost or charge, to the extent necessary or reasonable for the performance of its obligations or the enforcement of its rights hereunder.

(iii)                               If Tenant requires electrical service in excess of the service currently capable of being provided to and within the Building or in excess of the Property-wide electrical capacity allocated to the Building (as

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determined by reference to the maximum capacity of the Building’s meter for electrical service), then Tenant shall pay any equipment, installation and other costs required to obtain such service.

8.2                               Tenant’s Obligations.  Except as provided in Section 8.1, Tenant assumes full responsibility for the repair and maintenance of the Premises and the Building Systems.  Tenant shall take good care of the Premises and the Building Systems and keep the Premises and the Building Systems (and not the Common Area and Structural Components, which are the responsibility of Landlord) in good working order and in a clean, safe and sanitary condition.  The Premises and the Building Systems shall continue throughout the Term to be in as good condition as at the Commencement Date, reasonable wear and tear excepted; and Tenant shall prevent waste.  All repairs and replacements by Tenant shall be made and performed:  (a) at Tenant’s cost and expense, (b) by contractors or mechanics approved by Landlord, such approval not to be unreasonably withheld or delayed, provided that, absent reasonable grounds to object to the same arising subsequent to the date hereof, the contractors listed in Exhibit G are deemed approved, (c) so that same shall be comparable in quality, value and utility to the original work or installation, (d) in a manner and using equipment and materials that will not interfere with or impair the operations, use or occupation of the Building, the Building Systems, or the activities of other tenants of the Building, and (e) in accordance with Article 10 (if applicable), the Rules and Regulations, and all Legal Requirements.  Tenant shall reimburse Landlord upon demand for any out-of-pocket expenses incurred by Landlord in connection with any repairs or replacements required to be made by Tenant, including, without limitation, any fees charged by Landlord’s contractors to review plans and specifications prepared by Tenant.  Within ten (10) business days following Landlord’s request therefor, Tenant shall deliver to Landlord copies of all service and maintenance contracts and reports for Building Systems in the possession or control of Tenant with respect to the Property, including but not limited to HVAC maintenance, elevator and fire records.

8.3                               Security.  Tenant shall provide and be solely responsible for the security of the Premises and Tenant’s Agents while in or about the Premises.  Landlord in its discretion may engage its own security service for the Property.  To the extent, and only to the extent, that security services provided to the Property by Landlord are of a supplemental or different scope from those provided by Tenant as of the date hereof, or otherwise as to which Tenant shall have given Landlord reasonable notice, Landlord’s cost for such security services shall be an Operating Expense.  In addition, if Landlord is providing security services pursuant to Section 16.5, Tenant shall be liable to reimburse Landlord’s cost for such services.  Landlord shall not be liable to Tenant or Tenant’s Agents for any failure to provide security services or any loss, injury or damage suffered as a result of a failure to provide security services.

8.4                               Special Services.  If Tenant requests any services from Landlord other than those for which Landlord is obligated under this Lease, Tenant shall make its request in writing and Landlord may elect in its sole discretion whether to provide the requested services.  If Landlord provides any special services to Tenant, Landlord shall charge Tenant for such services at the prevailing rate being charged for such services by

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other property owners and property managers of comparable buildings in the area of the Property, and Tenant shall pay the cost of such services as Additional Rent within fifteen (15) business days after receipt of Landlord’s invoice.

9.                                      ACCEPTANCE.

The Premises as furnished by Landlord consist of the improvements as they exist as of the Commencement Date and Landlord shall have no obligation for construction work or improvements on or to the Premises.  Prior to entering into this Lease, Tenant has made a thorough and independent examination of the Premises and all matters related to Tenant’s decision to enter into this Lease.  Tenant is thoroughly familiar with all aspects of the Premises and is satisfied that they are in an acceptable condition and meet Tenant’s needs.  Tenant does not rely on, and Landlord does not make, any express or implied representations or warranties as to any matters including, without limitation, (a) the physical condition of the Premises, the Building, the Structural Components, Building Systems, or the Common Area, (b) the existence, quality, adequacy or availability of utilities serving the Premises, (c) the use, habitability, merchantability, fitness or suitability of the Premises for Tenant’s intended use, (d) the likelihood of deriving business from Tenant’s location or the economic feasibility of Tenant’s business, (e) Hazardous Materials in the Premises, the Building, or on, in under or around the Property, (f) zoning, entitlements or any laws, ordinances or regulations which may apply to Tenant’s use of the Premises or business operations, or (g) any other matter relating to the Premises.  Tenant has satisfied itself as to such suitability and other pertinent matters by Tenant’s own inquiries and tests into all matters relevant in determining whether to enter into this Lease.  Tenant accepts the Premises in their existing “as-is” condition.  Tenant shall, by entering into this Lease, be deemed to have accepted the Premises and to have acknowledged that the same are in good order, condition and repair.

10.                               ALTERATIONS.

10.1                        Alterations by Tenant.  Tenant shall make no improvements, changes or alterations in or to the Premises (“Alterations”) without Landlord’s prior approval.  Landlord shall not unreasonably withhold approval to any Alteration that is not a Material Alteration.  “Material Alteration” means an Alteration that (i) is not limited to the interior of the Premises or affects the exterior (including the appearance) of the Building or entry ways, (ii) is structural or affects the structural integrity of the Building or the structural integrity of the Structural Components, (iii) affects the usage or the proper functioning of the Building Systems other than to a de minimis extent, (iv) requires the consent of any Leasehold Mortgagee or the Landlord under the Ground Lease or (v) requires a change to the Building’s certificate of occupancy.  In its sole discretion, Landlord may designate certain Material Alterations non-severable Material Alterations (“Non-Severable Material Alterations”). Notwithstanding the foregoing, Landlord’s consent shall not be required in the case of Alterations (“Permitted Alterations”) that are not Material Alterations and that do not exceed a total cost of Two Hundred Fifty Thousand Dollars ($250,000) per project.

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Any determination to be made pursuant to this Section 10.1 as to the cost or price of an Alteration shall be made on a “job-by-job basis” and all work that is part of the same Alteration or integrated or related, whether or not performed in phases or stages, shall be treated as a single Alteration for the purposes of such determination.

10.2                        Project Requirements.  The following provisions of this Section 10.2 shall apply to all Alterations, whether or not requiring Landlord’s approval (unless otherwise noted):

(a)                                  Tenant, in connection with any Alteration, shall comply with any rules and regulations as may be from time to time established by Landlord and communicated in writing to Tenant. Tenant shall not proceed with any Alteration (other than Permitted Alterations) unless and until Landlord approves Tenant’s plans and specifications therefor. Any review or approval by Landlord of plans and specifications with respect to any Alteration is solely for Landlord’ benefit, and without any representation or warranty to Tenant with respect to the adequacy, correctness or efficiency thereof, its compliance with Legal Requirements or otherwise.  Landlord shall, within ten (10) business days following receipt of Tenant’s plans and specifications for the performance of any Alteration that is not a Material Alteration (and within twenty (20) business days following receipt of Tenant’s plans and specifications for the performance of any Alteration that is a Material Alteration)  advise Tenant of Landlord’s approval or disapproval of such plans and specifications for such an Alteration or any part thereof and, if approved, shall advise Tenant, contemporaneously with such approval, whether, upon completion of any Material Alteration, such Material Alteration shall be deemed a Non-Severable Material Alteration.  If Landlord shall fail to approve or disapprove Tenant’s plans and specifications for such an Alteration or any part thereof within such ten (10) business day period (or such twenty (20) business day period in the case of Material Alterations), Tenant shall have the right to give a reminder notice (as described further below) to Landlord and if Landlord fails to approve or disapprove Tenant’s plans and specifications or any part thereof within such two (2) business days after receipt of such reminder notice, Landlord shall be deemed to have approved such plans and specifications for such an Alteration or the applicable part thereof.  If Landlord shall disapprove such plans and specifications for such an Alteration (or any part thereof), Landlord shall set forth in reasonable detail its reasons for such disapproval in writing.  Landlord shall advise Tenant within five (5) business days (or ten (10) business days in the case of Material Alterations) following receipt of Tenant’s revised plans and specifications, or portions thereof, of Landlord’s approval or disapproval of the revised plans and specifications or any portion thereof, and shall set forth in reasonable detail Landlord’s reasons for any such further disapproval in writing and in reasonable detail.  If Landlord fails to approve or disapprove the revised plans and specifications for such an Alteration or any portion thereof within such five (5) business day period (or such ten (10) business day period in the case of Material Alterations), Tenant shall have the right to give a reminder notice to Landlord and if Landlord fails to approve or disapprove Tenant’s plans and specifications for such an Alteration or any part

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thereof within two (2) business days after receipt of such reminder notice, Landlord shall be deemed to have approved the revised plans and specifications or such portions thereof.  For the avoidance of doubt, Landlord shall not unreasonably withhold its approval of plans and specifications for any Material Alteration.  As used herein, a “reminder notice” shall include a conspicuous statement that Landlord’s failure to respond within the specified time shall result in Landlord being deemed to have approved the Alteration in question.

(b)                                 Upon the completion of the Alteration in accordance with the terms of this Article 10 Tenant shall submit to Landlord (x) proof evidencing the payment in full for said Alteration, (y) written unconditional lien waivers of mechanics’ liens and other liens on the Property from all contractors performing said Alteration and (z) all other submissions as may be, from time to time reasonably required by Landlord.

(c)                                  Before commencing the construction of any Alterations, Tenant shall procure or cause to be procured the insurance coverage described below and provide Landlord with certificates of such insurance in form reasonably satisfactory to Landlord.  All such insurance shall comply with the following requirements of this Section and of Section 14.2.

(i)                                     During the course of construction, to the extent not covered by property insurance maintained by Landlord or Tenant pursuant to Article 14, covering all improvements in place on the Premises, all materials and equipment stored at the site and furnished under contract, and all materials and equipment that are in the process of fabrication at the premises of any third party or that have been placed in transit to the Premises when such fabrication or transit is at the risk of, or when title to or an insurable interest in such materials or equipment has passed to, Tenant or its construction manager, contractors or subcontractors (excluding any contractors’, subcontractors’ and construction managers’ tools and equipment, and property owned by the employees of the construction manager, any contractor or any subcontractor), such insurance to be written on a completed value basis in an amount not less than the full estimated replacement value of Alterations.

(ii)                                  Commercial general liability insurance covering Tenant, Landlord and each construction manager, contractor and subcontractor engaged in any work on the Premises.

(iii)                               Workers’ Compensation Insurance approved by the State of California, in the amounts and coverages required under workers’ compensation laws applicable to the Premises, and Employer’s Liability Insurance with limits not less than One Million Dollars ($1,000,000) or such higher amounts as may be required by law.

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(d)                                 All construction and other work in connection with any Alterations shall be done at Tenant’s sole cost and expense (except as provided in Section 10.3) and in a prudent and first class manner.  Tenant shall construct the Alterations in accordance with all Legal Requirements, and with plans and specifications that are in accordance with the provisions of this Article 10 and all other provisions of this Lease.

(e)                                  Prior to the commencement of any construction, alteration, addition, improvements, repair or landscaping in excess of Fifty Thousand Dollars ($50,000), Landlord shall have the right to post in a conspicuous location on the Premises and to record in the public records a notice of Landlord’s nonresponsibility.  Tenant covenants and agrees to give Landlord at least ten (10) days prior written notice (or concurrent notice in the event of an emergency repair required to protect human health or safety) of the commencement of any such construction, alteration, addition, improvement, repair or landscaping in order that Landlord shall have sufficient time to post such notice.

(f)                                    Tenant shall take all necessary safety precautions during any construction.

(g)                                 Tenant shall prepare and maintain (i) on a current basis during construction, annotated plans and specifications showing clearly all changes, revisions and substitutions during construction, and (ii) upon completion of construction, as-built drawings showing clearly all changes, revisions and substitutions during construction, including, without limitation, field changes and the final location of all mechanical equipment, utility lines, ducts, outlets, structural members, walls, partitions and other significant features.  These as-built drawings and annotated plans and specifications shall be kept at the Premises and Tenant shall update them as often as necessary to keep them current.  The as-built drawings and annotated plans and specifications shall be made available for copying and inspection by Landlord at all reasonable times, and are subject to Landlord’s approval as provided in subsection  (a) above.

(h)                                 Upon completion of the construction of any Alterations in excess of Fifty Thousand Dollars ($50,000) during the Term, Tenant shall file for recordation, or cause to be filed for recordation, a notice of completion and shall deliver to Landlord evidence satisfactory to Landlord of payment of all costs, expenses, liabilities and Liens arising out of or in any way connected with such construction (except for Liens that are contested in the manner provided herein).

(i)                                     Tenant shall reimburse Landlord within five (5) days following demand for any out-of-pocket expenses incurred by Landlord in the review of any Alterations proposed to be made by Tenant, including fees charged by Landlord’s contractors or consultants to review plans and specifications, and such reimbursement obligation shall constitute Additional Rent hereunder.

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(j)                                     Should any Liens be filed against any portion of the Property by reason of the acts or omissions of, or because of a claim against, Tenant or anyone claiming under or through Tenant, Tenant shall cause the same to be canceled or discharged of record by bond or otherwise within twenty (20) business days after notice from Landlord.  If Tenant shall fail to cancel or discharge said lien or liens within said twenty (20) business day period, Landlord may cancel or discharge the same and, upon Landlord=s demand, Tenant shall reimburse Landlord for all costs incurred in canceling or discharging such liens, together with interest thereon at the Interest Rate from the date incurred by Landlord to the date of payment by Tenant, such reimbursement to be made within twenty (20) days after receipt by Tenant of a written statement from Landlord as to the amount of such costs. Tenant shall indemnify and hold Landlord harmless from and against all costs (including, without limitation, attorneys= fees and disbursements and costs of suit), losses, liabilities or causes of action arising out of or relating to any Alteration, including, without limitation, any mechanics= or other liens asserted in connection with such Alteration.

(k)                                  Tenant shall deliver to Landlord, within sixty (60) days after the completion of an Alteration costing in excess of $50,000, “as-built” drawings thereof.  During the Term, Tenant shall keep records of Alterations costing in excess of $50,000 including plans and specifications, copies of contracts, invoices, evidence of payment and all other records customarily maintained in the real estate business relating to Alterations and the cost thereof and shall, within thirty (30) days after demand by Landlord, furnish to Landlord copies of such records.

(l)                                     All Alterations to and fixtures installed by Tenant in the Premises (other than Tenant’s Property) shall be fully paid for by Tenant in cash and not be subject to conditional bills of sale, chattel mortgages, or other title retention agreements.

10.3                        Tenant Improvement Allowance.  Landlord agrees to pay to Tenant in connection with Tenant’s initial build-out of the Premises (“Tenant Improvements”) an aggregate amount of $15,000,000 (which amount shall include any Tenant Improvement Allowance under the Other Lease for ▇▇▇▇▇▇▇▇▇▇ A), hereinafter referred to as the “Tenant Improvement Allowance”.  The Tenant Improvement Allowance shall represent Landlord’s sole and total contribution to Tenant Improvements.  The Tenant Improvements shall be made and the Tenant Improvement Allowance shall be applied in accordance with the terms of the Tenant Work Letter attached hereto as Exhibit F.

10.4                        Restoration Obligations.  (a)  Landlord shall have the right to require Tenant to restore the Premises or any portion or component thereof, including any Building System or any portion or component thereof, affected by any Alteration to its condition prior to the commencement of such Alteration, which restoration Tenant shall have the obligation to complete by no later than the Expiration Date.  Landlord shall notify Tenant in writing at the time of Landlord’s approval of the Alterations, as

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applicable, whether or not the proposed Alterations will be required to be removed by Tenant at the end of the Term.  Tenant shall have no obligation to remove any Alterations that Landlord has not designated in writing for removal.  Tenant shall repair or pay the cost of repairing any damage to the Premises or to the Buildings caused by the removal of Alterations.

(b)                                 (i)  Tenant shall be required to deposit security with Landlord to secure Tenant’s obligation to restore any Alteration in an amount sufficient to secure the restoration of the Alteration in the manner discussed below.  For the elimination of doubt, all such restoration shall be subject to the provisions hereof relating to the performance of Alterations.  Prior to undertaking the Alteration, Tenant shall furnish to Landlord one of the following (as selected by Tenant): (i) a cash deposit or (ii) an irrevocable, unconditional, negotiable letter of credit, issued by a bank and in a form satisfactory to Landlord, each to be equal to 100% of the cost of the restoration, as reasonably estimated by Landlord, in an amount not to exceed an aggregate of $1 million during the Term.  Any such letter of credit shall be for one year and shall be renewed by Tenant each and every year until the restoration in question is completed and shall be delivered to Landlord not less than 30 days prior to the expiration of the then current letter of credit, failing which Landlord may present the then current letter of credit for payment.  Upon (A) the completion of the restoration in accordance with the terms of this Article 10 and (B) the submission to Landlord of the items described in clauses (x), (y) and (z) of Section 10.2(b), the security deposited with Landlord (or the balance of the proceeds thereof, if Landlord has drawn on the same) shall be returned to Tenant.  Upon Tenant’s failure properly to perform, complete and fully pay for the restoration, as reasonably determined by Landlord, Landlord may, upon notice to Tenant, draw on the security deposited under this Section 10.4(b) to the extent Landlord deems reasonably necessary in connection with the restoration and/or protection of the Premises or the Property and the payment of any costs, damages or expenses resulting therefrom.

(ii)                                  To the extent that Landlord shall be holding any such security, Landlord shall have the right from time-to-time, subject to the $1 million limit of Section 10.4(b)(i) above, to require Tenant to deposit additional security as it pertains to any and all Alterations made by Tenant which Tenant shall be obligated to restore under this Article 10, if Landlord shall reasonably establish that the security then held by Landlord with respect to any and all such Alterations will be inadequate for their intended purposes.  Any dispute regarding the sufficiency of any security deposited with Landlord which the parties shall be unable to resolve within fifteen (15) days after one party shall have notified the other party that such a bona fide dispute exists and shall be resolved by arbitration in accordance with Section 18.4.

(iii)                               To the extent that Landlord shall be holding any such security, Landlord shall be permitted to use such security to complete Tenant’s obligation to restore the Alteration with respect to which such security has been deposited by Tenant if Tenant shall default in Tenant’s obligation to restore the applicable Alteration.  If at any time Landlord shall notify Tenant that Landlord or its consultants shall have concluded that there is a substantial likelihood that any Alteration that Tenant is obligated to restore or any Turnover Alteration will not be completed by the date by which it shall be

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required to be completed hereunder, then for the period of thirty (30) days following such notification by Landlord to Tenant, Landlord and Tenant and their respective architects and/or engineers shall endeavor to resolve the matter.  If the parties shall be unable to resolve the matter, then at any time after the expiration of such thirty (30) day period, either party may submit the matter to arbitration under Section 18.4 hereof, with the sole question to be determined by such arbitration being whether or not there is a substantial likelihood that any such Alteration will not be completed by the date by which it shall be required to be completed hereunder. If the arbitration is determined in favor of Landlord, then Landlord shall have the right (but shall not be obligated) to use any security then on deposit with Landlord to complete the same. In the event that Landlord shall complete such Alteration for a cost that is less than the then available balance of any security deposited to secure Tenant’s obligation to perform the Alteration in question, then any excess unused portion of such security being held by Landlord after the restoration of the applicable Alteration with respect to which it was deposited with Landlord shall belong to and promptly be refunded by Landlord to Tenant.

(c)                                  Notwithstanding anything to the contrary contained in this Article 10 or elsewhere in this Lease, Tenant shall be obligated to surrender the Premises and the Building on the Expiration Date in the condition and quality that the Premises and the Building (including, without limitation, the Building Systems) would have been in at the time of such surrender had Tenant complied with the terms of this Lease (any such Alteration required to be performed by Tenant to satisfy the foregoing requirement being herein referred to as a “Turnover Alteration”).  At least one hundred and twenty days (120) days prior to, but no earlier than one hundred and eighty (180) days prior to, the Expiration Date, Landlord shall notify Tenant, and Landlord and Tenant shall endeavor to agree upon any Turnover Alteration remaining to be performed by Tenant.  If the parties shall be unable to resolve any dispute regarding whether Tenant has an obligation to perform any Turnover Alteration or regarding the manner in which the same shall be required to be performed within such one hundred and twenty (120) day period, then either party may submit the matter to arbitration in accordance with Section 18.4.  All Turnover Alterations shall be performed in accordance with the provisions of this Article 10 and other portions of this Lease applicable to Alterations.

(d)                                 Notwithstanding anything to the contrary contained in this Article 10 or elsewhere in this Lease, Tenant shall not perform any Alteration which Tenant shall be obligated to restore under this Article 10 unless the restoration of such Alteration can be completed as and when required under Article 10.

(e)                                  Without limiting the generality of any other provision of this Lease, in the event that Tenant shall fail to restore any Alteration that it is obligated hereunder to restore or shall fail to perform any Turnover Alteration, and the failure to perform same shall interfere with the use and occupancy of the Premises or any portion thereof, then Tenant shall be liable to Landlord for failure to make such Turnover Alterations.

(f)                                    Tenant acknowledges and agrees that it shall have restoration obligations for the Tenant Improvements known as the “customer briefing area” planned

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for forty percent (40%) of the square footage of the first (1st) floor of the D Premises (a drawing of which is attached hereto as Exhibit H), such obligations to include demolition of such improvements, restoration of any floor penetration, and restoration of the area to shell condition.  Prior to the commencement of any Tenant Improvement, Tenant shall furnish to Landlord a letter of credit in the amount of $150,000 as security for the restoration obligations outlined in this Section 10.4(f).  For the avoidance of doubt, such letter of credit shall be subject to the terms and requirements of Section 10.4(b), and shall count toward the $1 million limit of Section 10.4(b)(i).

10.5                        Ownership of Improvements.  Except as provided in Section 10.6, all Alterations, and any other appurtenances, fixtures, improvements, equipment, additions and property permanently attached to or installed in the Premises at the commencement of or during the Term, shall at the end of the Term become Landlord’s property without compensation to Tenant, or be removed in accordance with this Section.  Landlord shall notify Tenant in writing at the time of Landlord’s approval of the Alterations, as applicable, whether or not the proposed Alterations will be required to be removed by Tenant at the end of the Term.  Tenant shall have no obligation to remove any Alterations that Landlord has not designated in writing for removal.  Tenant shall repair or pay the cost of repairing any damage to the Premises or to the Building caused by the removal of Alterations.  If Tenant fails to perform its repair obligations, without limiting any other right or remedy, Landlord may on five (5) business days’ prior written notice to Tenant perform such obligations at Tenant’s expense and Tenant shall promptly reimburse Landlord upon demand for all out-of-pocket costs and expenses incurred by Landlord in connection with such repair.  In addition, any such reimbursement shall include a fifteen percent (15%) administrative fee to cover Landlord’s overhead in undertaking such repair.  The reimbursement and administrative fee shall be Additional Rent. Tenant’s obligations under this Section shall survive the termination of this Lease.

10.6                        Tenant’s Personal Property.  All furniture, trade fixtures, furnishings, equipment and articles of movable personal property installed in the Premises by or for the account of Tenant (except for ceiling and related fixtures, HVAC equipment and floor coverings), and which can be removed without structural or other material damage to the Building (collectively, “Tenant’s Property”) shall be and remain the property of Tenant and may be removed by it at any time during the Term and Tenant may ▇▇▇▇▇ ▇ ▇▇▇▇ on such personal property.  Tenant shall remove from the Premises all Tenant’s Property on or before the Termination Date, except such items as the parties have agreed pursuant to the provisions of this Lease or by separate agreement are to remain and to become the property of Landlord.  Tenant shall repair or pay the cost of repairing any damage to the Premises or to the Building resulting from such removal, and the provisions of Section 10.5 above shall apply in the event Tenant fails to do so.  Any items of Tenant’s Property which remain in the Premises after the Termination Date may, on five (5) business days’ prior written notice to Tenant, at the option of Landlord, be deemed abandoned and in such case may either be retained by Landlord as its property or be disposed of, without accountability, at Tenant’s expense in such manner as Landlord may see fit.

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11.                               LIENS.

Tenant shall promptly pay, in cash, the cost of all Alterations, repairs, restorations or replacements made by or on behalf of Tenant.  Tenant shall keep the Premises free from any Liens arising out of any work performed, material furnished or obligations incurred by or for Tenant.  Tenant hereby indemnifies Landlord against liability for any and all Liens arising out of work performed, material furnish or obligations incurred by or for Tenant.  If Tenant shall not, within ten (10) days following notice of the imposition of any such Lien, cause the Lien to be released of record by payment or posting of a proper bond, Landlord shall have, in addition to all other remedies provided in this Lease and by law, the right but not the obligation to cause any such Lien to be released by such means as it shall deem proper, including payment of the claim giving rise to such Lien.  All such sums paid by Landlord and all expenses incurred by it in connection therewith (including, without limitation, reasonable counsel fees) shall be payable to Landlord by Tenant within five (5) days of Landlord’s demand with interest from the date incurred at the Interest Rate.  Landlord shall have the right at all times to post and keep posted on the Premises any notices permitted or required by law or that Landlord shall deem proper for the protection of Landlord, the Premises, and the Building from Liens.

Landlord shall at its own cost and expense, take such action as may be necessary (by bonding or other appropriate action) to duly discharge and satisfy in full promptly any Lessor Lien, provided, however, Landlord need not discharge or satisfy any Lessor Lien being contested by Landlord in good faith and by appropriate proceedings so long as such proceedings do not involve any material danger of sale, forfeiture or loss of any part of Tenant’s leasehold interest in the Property.  In addition, Landlord shall use commercially reasonable efforts to cause persons claiming by, through or under Landlord (excluding Tenant) to promptly discharge and satisfy in full any Lien against Tenant’s leasehold interest in the Property.  “Lessor Liens” means Liens against the Property or the Ground Lease that result from (i) claims against the Landlord or (ii) Real Estate Taxes payable by Landlord which are not required to be paid by Tenant.  For the avoidance of doubt, the foregoing shall not apply to any Leasehold Mortgage or Lien related thereto, any Prior Lease, any Lien in effect as of the Commencement Date or any other Lien permitted by the terms of this Lease.

12.                               COMPLIANCE WITH LAWS AND INSURANCE REQUIREMENTS.

12.1                        Legal Requirements.  Tenant, at Tenant’s cost and expense, shall comply with all Legal Requirements relating to its use or occupancy of the Premises or any Alterations and Landlord shall comply with all Legal Requirements applicable with respect to Landlord’s obligations under this Lease.  Without limiting the foregoing, Tenant shall be solely responsible for compliance with and shall make or cause to be made all such improvements and alterations to the Premises (including, without limitation, removing barriers and providing alternative services) as shall be required to comply with all applicable building codes, laws and ordinances relating to public accommodations, including the Americans with Disabilities Act of 1990, 42 U.S.C. §§ 12111 et seq. (the “ADA”), and the ADA Accessibility Guidelines promulgated by the Architectural and Transportation Barriers Compliance Board, the public accommodations

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title of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000a et seq., the Architectural Barriers Act of 1968, 42 U.S.C. §§ 4151 et seq., as amended, Title V of the Rehabilitation Act of 1973, 29 U.S.C. §§ 790 et seq., the Minimum Guidelines and Requirements for Accessible Design, 36 C.F.R. Part 1190, the Uniform Federal Accessibility Standards, and applicable State law, as the same may be amended from time to time, or any similar or successor laws, ordinances and regulations, now or hereafter adopted.  Tenant’s liability shall be primary and Tenant shall indemnify Landlord in accordance with Section 14.1 in the event of any failure or alleged failure of Tenant to comply with Legal Requirements.  Any work or installations made or performed by or on behalf of Tenant or any person or entity claiming through or under Tenant pursuant to the provisions of this Section shall be made in conformity with and subject to the provisions of Article  10.

12.2                        Insurance Requirements.  (a)  Tenant shall not do anything, or permit anything to be done, in or about the Premises that would:  (i) invalidate or be in conflict with the provisions of or cause any increase in the applicable rates for any fire or other property insurance policies covering the Building or any property located therein (unless Tenant pays for such increased costs and the basis for such increased costs can be eliminated by Landlord without any material expense or delay upon Landlord’s repossession of the Premises at the expiration or earlier termination of the Term), or (ii) result in a refusal by fire insurance companies of good standing to insure the Building or any such property in amounts reasonably satisfactory to Landlord (which amounts shall be comparable to the amounts required by comparable landlords of comparable buildings or (iii)  result in the cancellation of any fire or other property insurance policy maintained by or for the benefit of Landlord (subject to the same parenthetical contained in clause (i) above).  Tenant, at Tenant’s expense, shall comply with all rules, orders, regulations or requirements of the American Insurance Association (formerly the National Board of Fire Underwriters) and with any similar body that shall hereafter perform the function of such Association.

(b)                                 If, by reason of any act or omission on the part of Tenant which is inconsistent with the use permitted hereunder, whether or not Landlord has consented to the same, the rate of “all risk” or other type of insurance maintained by Landlord on the Property or the Building or other property of Landlord shall be higher than it otherwise would be, but for such act or omission, Tenant shall reimburse Landlord for that part of the premiums for such insurance paid by Landlord because of such act or omission on the part of Tenant, which sum shall be Additional Rent and payable within five (5) days of demand.  If, due to the occupancy or abandonment of, or Tenant’s failure to occupy, the Premises as herein provided, any such insurance shall be canceled by the insurance carrier, then, in any of such events, Tenant hereby indemnifies Landlord against liability which would have been covered by such insurance.  Landlord shall give Tenant notice of any such cancellation promptly after Landlord shall have received written notice thereof.  Tenant shall also pay any increase in premiums on any rent insurance carried by Landlord for its protection against rent loss through fire or casualty if such increase shall result from any of the foregoing events.

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13.                               HAZARDOUS MATERIALS.

13.1                        Definitions.  As used in this Lease, the following terms shall have the following meanings:

(a)                                  “Environmental Activity” means any use, storage, holding, release, emission, discharge, manufacturing, generation, processing, abatement, removal, disposition, handling, transportation, discharge or release of any Hazardous Materials from, into, on or under the Building, the Common Area or the Property.

(b)                                 “Environmental Laws” mean all Legal Requirements, now or hereafter in effect, relating to environmental conditions, industrial hygiene or Hazardous Materials on, under or about the Property, including without limitation the comprehensive environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Solid Waste Disposal Act, 42 U.S.C. Section 6901, et seq., the Clean Water Act, 33 U.S.C. Section 1251, et seq., the Clean Air Act, 42 U.S.C. Section 7401, et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601 through 2629, the Safe Drinking Water Act, 42 U.S.C. Sections 300f through 300j, and any similar state and local laws and ordinances and the regulations now or hereafter adopted and published and/or promulgated pursuant thereto.

(c)                                  “Hazardous Material” means any chemical, substance, medical or other waste or combination thereof which is or may be hazardous to the environment or human or animal health or safety due to its radioactivity, ignitability, corrosivity, reactivity, explosivity, toxicity, carcinogenicity, mutagenicity, phytotoxicity or other harmful or potentially harmful properties or effects.  Hazardous Materials shall include, without limitation, petroleum hydrocarbons, including crude oil or any fraction thereof, asbestos, radon, polychlorinated biphenyls (PCBs), methane and all substances which now or in the future may be defined as “hazardous substances,” “hazardous wastes,” “extremely hazardous wastes,” “hazardous materials,” “toxic substances,” “infectious wastes,” “biohazardous wastes,” “medical wastes,” “radioactive wastes” or which are otherwise listed, defined or regulated in any manner pursuant to any Environmental Laws.

(d)                                 “Tenant’s Hazardous Materials” means any Hazardous Materials resulting from the Environmental Activity by Tenant or any of Tenant’s Agents.

13.2                        Environmental Release.  Tenant represents to Landlord that Tenant is aware that detectable amounts of Hazardous Materials have come to be located on, beneath and/or in the vicinity of the Premises.  Tenant has made such investigations and inquiries as it deems appropriate to ascertain the effects, if any, of such substances and contaminants on its operations and persons using the Building and the Common Area.  Landlord makes no representation or warranty with regard to the environmental

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condition of the Building, the Common Area or the Property.  Tenant hereby releases Landlord and Landlord’s officers, directors, trustees, agents and employees from any and all claims, demands, debts, liabilities, and causes of action of whatever kind or nature, whether known or unknown or suspected or unsuspected which Tenant or any of Tenant’s Agents may have, claim to have, or which may hereafter accrue against the released parties or any of them, arising out of or relating to or in any way connected with Hazardous Materials presently in, on or under, or now or hereafter emanating from or migrating onto the Building or the Property (except to the extent such existence, emanation or migration is caused by Landlord or Landlord’s Agents).  In connection with such release, Tenant hereby waives any and all rights conferred upon it by the provisions of Section 1542 of the California Civil Code, which reads as follows:

A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.

13.3                        Use of Hazardous Materials.  Tenant shall not cause or permit any Hazardous Materials to be used, stored, discharged, released or disposed of in the Premises or cause any Hazardous Materials to be used, stored, discharged, released or disposed of in, from, under or about, the Property, or any other land or improvements in the vicinity of the Property, excepting only the types and minor quantities of Hazardous Materials which are normally used in connection with Tenant’s permitted use, operation and maintenance of the Premises and then only in strict accordance with all Legal Requirements, including all Environmental Laws (“Permitted Substances”).  Tenant shall, at its own expense, procure, maintain in effect and comply with all conditions of any and all permits, licenses, and other governmental and regulatory approvals required for Tenant’s use of Hazardous Materials at the Premises, including, without limitation, discharge of appropriately treated materials or wastes into or through any sanitary sewer serving the Building.  Tenant shall in all respects handle, treat, deal with and manage any and all Tenant’s Hazardous Materials in total conformity with all Environmental Laws and prudent industry practices regarding management of such Hazardous Materials.  Without limiting the foregoing, if any Tenant’s Hazardous Materials result in contamination of the Building, or any soil or groundwater in, under or about the Property in each case to the extent the presence of same amounts to a violation of any Legal Requirement or poses a threat to human health or safety, Tenant, at its expense, shall promptly take all actions necessary to return the Building and/or the Property, to the condition existing prior to the appearance of the Tenant’s Hazardous Material, subject to Landlord’s right to approve Tenant’s proposed remediation method.  On or prior to the Termination Date, Tenant shall cause all Tenant’s Hazardous Materials in, on, under or about the Building to be removed in accordance with and in compliance with all Legal Requirements.  Tenant shall promptly notify Landlord and obtain Landlord’s written approval before taking any remedial action in response to the presence of any Tenant’s Hazardous Materials or entering into any settlement agreement, consent decree or other compromise with respect to any claims relating to Tenant’s Hazardous Materials.

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13.4                        Indemnity.  Tenant shall indemnify, defend (by counsel reasonably acceptable to Landlord), protect and hold Landlord and Landlord’s trustees, directors, officers, agents, shareholders, direct or indirect beneficial owners and employees, any Leasehold Mortgagees, and any Prior Lessors, and their respective successors and assigns (collectively, “Landlord’s Agents”), free and harmless from and against any and all claims, liabilities, penalties, forfeitures, losses or expenses (including reasonable attorneys’ and consultants’ fees and oversight and response costs) to the extent arising from (a) Environmental Activity by Tenant or Tenant’s Agents; or (b) failure of Tenant or Tenant’s Agents to comply with any Environmental Law with respect to Tenant’s Environmental Activity; or (c) Tenant’s failure to remove Tenant’s Hazardous Materials as required in Section 13.3.

13.5                        No Lien.  Tenant shall not suffer any Lien to be recorded against the Building or the Property as a consequence of any Tenant’s Hazardous Materials, including any so called state, federal or local “super fund” Lien related to the remediation of any Tenant’s Hazardous Materials in or about the Building or the Property.

13.6                        Investigation.  In the event Hazardous Materials are discovered in or about the Building or the Property, and Landlord reasonably believes that such Hazardous Materials are Tenant’s Hazardous Materials, then Landlord shall have the right to appoint a consultant to conduct an investigation to determine the nature and extent of such Hazardous Materials, whether such Hazardous Materials are Tenant’s Hazardous Materials, and the corrective measures, if any, required to remove such Hazardous Materials.  If such Hazardous Materials are determined to be Tenant’s Hazardous Materials, Tenant, at its expense, shall comply with all investigation, remediation or other actions required by any applicable governmental authority and reasonably approved by Landlord and shall promptly reimburse Landlord for all costs incurred by Landlord in connection with such investigation, along with a fifteen percent (15%) administrative fee to cover Landlord’s costs and overhead in undertaking or supervising such work.  The reimbursement and administrative fee shall be Additional Rent.

13.7                        Notices.  Tenant shall notify Landlord of any inquiry, test, claim, investigation or enforcement proceeding by or against Tenant or the Premises or the Property known to Tenant within five (5) business days of obtaining knowledge thereof concerning any Hazardous Materials.  Tenant shall immediately notify Landlord of any release or discharge of Hazardous Materials on, in under or about the Property.  Tenant acknowledges that Landlord, as the owner of the Property, shall have the sole right at its election and at Tenant’s expense, to negotiate, defend, approve and appeal any action taken or order issued with regard to Tenant’s Hazardous Materials by any applicable governmental authority.

13.8                        Surrender.  Tenant shall surrender the Premises to Landlord, upon the expiration or earlier termination of the Lease, free of Tenant’s Hazardous Materials except for Permitted Substances and other Hazardous Materials the presence of which would not and could not reasonably be expected to result in a violation of any Legal Requirements or pose a threat to human health or safety.  If Tenant fails to so surrender

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the Premises, Tenant shall indemnify and hold Landlord harmless from all losses, costs, claims, damages and liabilities resulting from Tenant’s failure to surrender the Premises as required by this Section 13.8, including, without limitation, (a) any claims or damages arising in connection with the condition of the Premises, and (b) damages occasioned by Landlord’s inability to relet the Premises or a reduction in the fair market and/or rental value of the Building or any portion thereof, by reason of the existence of any Tenant’s Hazardous Materials.

13.9                        Survival.  The provisions of this Article 13 shall survive the expiration or earlier termination of this Lease.

14.                               INDEMNITY; INSURANCE.

14.1                        Indemnity.  Tenant shall indemnify, protect, defend and save and hold Landlord, Landlord’s Agents (the “Indemnified Parties”) harmless from and against any and all losses, costs, liabilities, claims, judgments, liens, damages (including consequential damages) and expenses, including, without limitation, reasonable attorneys’ fees and costs, and reasonable investigation costs, incurred in connection with or arising from:  (a) any default by Tenant in the observance or performance of any of the terms, covenants or conditions of this Lease on Tenant’s part to be observed or performed, including Tenants obligations under Article 6 with respect to the Ground Lease, (b) the use or occupancy or manner of use or occupancy of the Premises, the Building and the Property by Tenant and Tenant’s Agents or any person claiming under Tenant, (c) the condition of the Premises, and any occurrence on the Premises, the Building or the Property from any cause whatsoever, except to the extent caused by the gross negligence or willful misconduct of the Indemnified Parties, and (d) any negligence of Tenant or of Tenant’s Agents, in, on or about the Premises, the Building or the Common Area.  In case any action or proceeding be brought, made or initiated against the Indemnified Parties relating to any matter covered by Tenant’s indemnification obligations under this Section or under Section 13.4, Tenant, upon notice from the Landlord, shall at its sole cost and expense, resist or defend such claim, action or proceeding by counsel approved by the Indemnified Parties.  Notwithstanding the foregoing, to the extent any Indemnified Party reasonably believes a conflict of interest exists between such Indemnified Party and any other Indemnified Party, each of the Indemnified Parties may retain its own counsel to defend or assist in defending any claim, action or proceeding, and Tenant shall pay the reasonable fees and disbursements of such counsel.  Tenant’s obligations under this Section shall survive the expiration or earlier termination of this Lease.  Each of the Indemnified Parties is an intended third-party beneficiary of this Section 14.1 and shall be entitled to enforce the provisions hereof.

14.2                        Insurance.  Tenant shall procure at its sole cost and expense and keep in effect during the Term:

(a)                                  commercial general liability insurance covering Tenant’s operations in the Premises and the use and occupancy of the Premises.  Such insurance shall include contractual liability. Such coverage shall be written on an

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“occurrence” form and shall have a minimum combined single limit of liability of not less than Ten Million Dollars ($10,000,000).  Tenant’s policy shall be written to apply to all bodily injury, property damage and personal injury and provide for coverage of owned and non-owned automobile liability, if applicable.  Such insurance shall name Landlord and Indemnified Parties as an Additional Insured, and shall provide that Landlord will receive thirty (30) days’ written notice from the insurer prior to any cancellation and shall provide that it is primary insurance;

(b)                                 “All Risk” commercial property insurance with respect to Tenant’s Property, including furniture, fittings, installations, alterations, additions, partitions and fixtures or anything in the nature of a leasehold improvement made or installed by or on behalf of the Tenant in an amount of not less than one hundred percent (100%) of the full replacement cost thereof as shall from time to time be determined by Tenant in form satisfactory to Landlord;

(c)                                  Worker’s Compensation Insurance in the amounts and coverages required under worker’s compensation laws applicable to Tenant and/or the Premises from time to time, and Employer’s Liability Insurance, with limits of not less than one million dollars ($1,000,000) such higher amounts as may be required by law; and

(d)                                 any other form or forms of insurance as Landlord may reasonably require from time to time (other than insurance that Landlord is required to maintain) in amounts and for insurable risks (on commercially reasonable terms) against which a prudent tenant would protect itself to the extent landlords of comparable buildings in the vicinity of the Building require their tenants to carry such other form(s) of insurance.

14.3                        Policies.  All policies of insurance provided for herein shall be issued by insurance companies with general policyholders’ rating of not less than A, as rated in the most current available “Best’s Insurance Reports,” and not prohibited from doing business in the State of California.  Certificates of insurance shall be delivered to Landlord prior to the delivery of possession of the Premises to Tenant and thereafter prior to the expiration of the term of each such policy.  All such policies of insurance shall provide that the company writing said policy will give to Landlord thirty (30) days notice in writing in advance of any cancellation.  No policy shall have a deductible in excess of $500,000 for any one occurrence.

14.4                        Landlord’s Rights.  Should Tenant fail to take out and keep in force each insurance policy required under this Article 14, or should such insurance not be approved by Landlord and should the Tenant not rectify the situation within two (2) business days after written notice from Landlord to Tenant, Landlord shall have the right, without assuming any obligation in connection therewith, to purchase such insurance at the sole cost of Tenant, and all costs incurred by Landlord shall be payable within five (5) days of demand to Landlord by Tenant as Additional Rent and without prejudice to any other rights and remedies of Landlord under this Lease.  Notwithstanding anything to the contrary set forth herein, at any time and from time to

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time, upon reasonable notice to Tenant, Landlord may elect to insure all or any part of the Premises under its own policy or policies of insurance, in which event, during the period of such coverage the cost of any such policies shall be an Operating Expense hereunder and Tenant may elect to discontinue insurance coverage it is otherwise required to carry hereunder to the extent of such insurance provided by Landlord.

14.5                        Waiver of Subrogation.  Notwithstanding anything to the contrary in this Lease, the parties hereto (and their respective agents, employees, successor, assignees and, as to Tenant, its subtenants) release each other and their respective agents, employees, successor, assignees and, as to Tenant, its subtenants from damage to any property that is caused by or results from a risk (i) which is actually insured against, to the extent of receipt of payment under such policy, (ii) which is required to be insured against under this Lease, or (iii) which would normally be covered by the standard “all risk” property insurance.  Landlord and Tenant (and each of Tenant’s subtenants) shall each obtain from their respective Commercial Property insurers at any time during the Term insuring or covering the Property or any portion thereof of its contents therein, a waiver of all rights of subrogation which the insurer of one party might otherwise, if at all, have against the other party.

14.6                        No Liability.  No approval by Landlord of any Tenant insurer, or the terms or conditions of any policy, or any coverage or amount of insurance, or any deductible amount shall be construed as a representation by Landlord of the solvency of the insurer or the sufficiency of any policy or any coverage or amount of insurance or deductible and Tenant assumes full risk and responsibility for any inadequacy of insurance coverage or any failure of insurers.

15.                               ASSIGNMENT AND SUBLETTING.

15.1                        Consent Required.  Except as otherwise explicitly provided herein, Tenant shall not directly or indirectly, voluntarily or by operation of law, (i) sell, assign, encumber, pledge or otherwise transfer or hypothecate all or any part of its interest in or rights with respect to the Premises or its leasehold estate (collectively, “Assignment”), without Landlord’s written consent, which consent Landlord may withhold in its sole and absolute discretion, or (ii) permit all or any portion of the Premises to be occupied by anyone other than itself or sublet all or any portion of the Premises (collectively, “Sublease”) without Landlord’s prior written consent, such consent not to be unreasonably withheld.

15.2                        Notice.  If Tenant desires to enter into a Sublease of the Premises or Assignment of this Lease, it shall give written notice (the “Transfer Notice”) to Landlord of its intention to do so, which notice shall contain (a) the name and address of the proposed assignee, subtenant or occupant (the “Transferee”), (b) the nature of the proposed Transferee’s business to be carried on in the Premises, (c) the terms and provisions of the proposed Assignment or Sublease, and (d) such financial information as Landlord may reasonably request concerning the proposed Transferee.

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15.3                        Terms of Approval.  Landlord shall respond to Tenant’s request for approval within fifteen (15) business days after receipt of the Transfer Notice, and if Landlord fails to respond within such fifteen (15) day period, Landlord shall be deemed to have disapproved such proposed Assignment or Sublease.  If Landlord approves the proposed Assignment or Sublease, or if an Assignment or Sublease is permitted by operation of law, Tenant may, not later than thirty (30) days thereafter, enter into the Assignment or Sublease with the proposed Transferee upon the terms and conditions set forth in the Transfer Notice, and sixty percent (60%) of the Excess Rent received by Tenant shall be paid to Landlord as and when received by Tenant and forty percent (40%) of the Excess Rent received by Tenant shall be retained by Tenant. “Excess Rent” means the gross revenue received from the Transferee during the Sublease term or with respect to the Assignment, less (a) the gross revenue paid to Landlord by Tenant during the period of the Sublease term or during the Assignment; (b) any reasonably documented tenant improvement allowance or other economic concession (planning allowance, moving expenses, etc.), paid by Tenant to the Transferee or to a third party in connection with the transfer; (c) customary and reasonable external brokers’ commissions to the extent paid and documented; (d) reasonable attorneys’ fees; and (e) reasonable costs of advertising the space for Sublease or Assignment (collectively, “Transfer Costs”).  Tenant shall not have to pay to Landlord any Excess Rent until Tenant has recovered its Transfer Costs.

15.4                        Certain Conditions Applicable to All Sublettings and Assignments.  Any assignment or subletting will also be subject to the following conditions:

(a)                                  At least thirty (30) days prior to the date on which such subletting or assignment shall become effective, Tenant shall furnish to Landlord all of the documents and information required under this Section 15.4 together with the Transfer Notice.

(b)                                 At both the time of Tenant’s furnishing to Landlord the information and documents required under this Section 15.4 and the time at which the subletting or assignment becomes effective, an Event of Default shall not have occurred.

(c)                                  If required, the consent of the Leasehold Mortgagee under such Leasehold Mortgage shall have been obtained and Tenant shall have paid to Landlord, or at Landlord’s election reimbursed Landlord for, any charges or payments which are the responsibility of Landlord under the Leasehold Mortgage in connection with such subletting or assignment.

(d)                                 Tenant shall furnish to Landlord a copy of the final executed copy of the Sublease or Assignment documents used in connection with the Sublease or Assignment, and of each instrument delivered in connection therewith within five (5) business days after the execution and delivery thereof.

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(e)                                  Such Sublease or Assignment shall be for the actual use and physical occupancy of the Premises, in the case of an Assignment, and the portion of the Premises sublet, in the case of a Sublease, by the assignee or subtenant, as applicable.

(f)                                    No assignee or subtenant shall be a person having, directly or indirectly, sovereign or diplomatic immunity or having immunity from (or otherwise not being subject to) the service of process in and the jurisdiction of the courts of California.

(g)                                 Following the proposed Assignment or Sublease, the assignee or subtenant shall use the Premises only for the specific use permitted under Article 7.

(h)                                 The instrument of Sublease or Assignment shall not purport to grant to the subtenant or assignee thereunder any rights greater than or inconsistent with those granted to Tenant under this Lease, including for this purpose any term in the instrument of assignment or sublease for which there is no corresponding term in this Lease resulting in such greater rights or inconsistency.

(i)                                     In the case of any subletting, the term thereof (including any extension options) shall in all respects be consistent with Article 10 and shall not prevent Tenant from delivering vacant possession, free and clear of any subtenancies, of the Premises or the applicable portion thereof, on the Expiration Date.

15.5                        No Release.  No Sublease or Assignment by Tenant nor any consent by Landlord thereto shall relieve Tenant of any obligation to be performed by Tenant under this Lease.  Any Sublease or Assignment that is not in compliance with this Article shall be null and void and, at the option of Landlord, shall constitute an Event of Default by Tenant under this Lease, and Landlord shall be entitled to pursue any right or remedy available to Landlord under the terms of this Lease or under the laws of the State of California.  The acceptance of any Rent or other payments by Landlord from a proposed Transferee shall not constitute consent to such Sublease or Assignment by Landlord or a recognition of any Transferee, or a waiver by Landlord of any failure of Tenant or other Transferor to comply with this Article.