OFFICE LEASE by and between PRII HIGH BLUFFS LLC, a Delaware limited liability company, and COLLINS CORPORATE CENTER PARTNERS, LLC, a Delaware limited liability company, as tenants in common ( Landlord ) and XENCOR, INC.

PRII HIGH BLUFFS LLC,

a Delaware limited liability company,

COLLINS CORPORATE CENTER PARTNERS, LLC,

a Delaware limited liability company, as tenants in common

a Delaware corporation

THIS OFFICE LEASE ( Lease ) is made between PRII HIGH BLUFFS LLC, a Delaware limited liability company ( Landlord ), and the Tenant described in Item 1 of the Basic Lease Provisions.

Landlord hereby leases to Tenant and Tenant hereby leases from Landlord, subject to all of the terms and conditions set forth herein, those certain premises (the Premises ) described in Item 3 of the Basic Lease Provisions and as shown in the drawing attached hereto as Exhibit A-1. The Premises are located in the Building described in Item 2 of the Basic Lease Provisions. The Building is located on that certain land (the Land ), which is a part of a larger tract of land owned by Landlord, all of which is improved with landscaping, parking facilities and other improvements, fixtures and common areas and appurtenances now or hereafter placed, constructed or erected on the Land, including both buildings located at 12481-12531 High Bluff Drive, San Diego, California (sometimes referred to herein as the Project ), as shown on the site plan attached as Exhibit A-2 to this Lease.

BASIC LEASE PROVISIONS

This Lease consists of the foregoing introductory paragraphs and Basic Lease Provisions, the provisions of the Standard Lease Provisions (the Standard Lease Provisions ) (consisting of Paragraphs 1 through Paragraph 19 which follow) and Exhibits A-1 through Exhibit A-2 and Exhibits B through Exhibit H, and the following Addenda: Addendum One (One Extension Option at Market) and Addendum Two (Right of First Offer), all of which are incorporated herein by this reference. In the event of any conflict between the provisions of the Basic Lease Provisions and the provisions of the Standard Lease Provisions, the Standard Lease Provisions shall control.

STANDARD LEASE PROVISIONS

(a) The Initial Term of this Lease and the Rent (defined below) shall commence on the date that is thirty (30) days following the date that the Premises are delivered to Tenant for Tenant s occupancy (the Commencement Date ) and the Initial Term shall end on the last day of the calendar month in which the sixtieth (60th) monthly anniversary of the Commencement Date occurs (the Termination Date ). Unless earlier terminated in accordance with the provisions hereof, the Initial Term of this Lease shall be the period shown in Item 9 of the Basic Lease Provisions. As used herein, Lease Term shall mean the Initial Term referred to in Item 9 of the Basic Lease Provisions, subject to any extension of the Initial Term hereof exercised in accordance with the terms and conditions expressly set forth herein. This Lease shall be a binding contractual obligation effective upon execution hereof by Landlord and Tenant, notwithstanding the later commencement of the Initial Term of this Lease.

(b) Landlord shall deliver the Premises to Tenant promptly following the Current Tenant s surrender of the Premises pursuant to the Termination contemplated by Paragraph 19(jj) of this Lease, which Landlord currently anticipates to occur on or about July 31, 2017; however, any delay in delivery of the Premises shall not render this Lease void or voidable, nor shall Landlord be liable to Tenant for any loss or damage resulting therefrom. Tenant s access to the Premises shall be conditioned upon Tenant (x) delivering to Landlord the Security Deposit, as shown in Item 7 of the Basic Lease Provisions, plus Tenant s Installment Payable upon Execution, as shown in Item 6 of the Basic Lease Provisions, and (y) providing to Landlord satisfactory evidence of insurance for personal injury and property damage, including such insurance from Tenant s contractors, as applicable and as required by Landlord for third party contractors working in the Building. Between the date that the Premises are delivered to Tenant until the day immediately preceding the Commencement Date, Tenant agrees it shall be bound by and subject to all terms, covenants, conditions and obligations of this Lease during the period between the date possession is delivered and the Commencement Date (including, without limitation, the payment of electricity consumed at the Premises during this time period), other than the payment of Basic Annual Rent, in the same manner as if delivery had occurred on the Commencement Date.

(c) Within a reasonable period of time after the Commencement Date, Landlord may deliver to Tenant, a Tenant Commencement Certificate in the form of Exhibit F attached hereto (the Certificate ), confirming the information set forth therein, which Tenant shall acknowledge by executing a copy and returning it to Landlord within thirty (30) days of receipt thereof. Failure of Landlord to send the Certificate shall have no effect on the Commencement Date.

2. BASIC ANNUAL RENT AND SECURITY DEPOSIT

(a) Tenant agrees to pay during each partial or whole calendar month of the Lease Term as Basic Annual Rent ( Basic Annual Rent ) for the Premises the sums shown for such periods in Item 5 of the Basic Lease Provisions.

(b) Except as expressly provided to the contrary herein, Basic Annual Rent shall be payable in consecutive monthly installments, in advance, without demand, deduction or offset, commencing on the Commencement Date and continuing on the first day of each calendar month thereafter until the expiration of the Lease Term. The first full monthly installment of Basic Annual Rent shall be payable upon Tenant s execution of this Lease. The obligation of Tenant to pay Rent and other sums to Landlord and the obligations of Landlord under this Lease are independent obligations. If the Commencement Date is a day other than the first day of a calendar month, or the Lease Term expires on a day other than the last day of a calendar month, then the Rent for such partial month shall be calculated on a per diem basis. In the event Landlord delivers possession of the Premises to Tenant prior to the Commencement Date, Tenant agrees it shall be bound by and subject to all terms, covenants, conditions and obligations of this Lease during the period between the date possession is delivered and the Commencement Date, other than the payment of Basic Annual Rent, in the same manner as if delivery had occurred on the Commencement Date.

(c) Simultaneously with the execution of this Lease, Tenant has paid or will pay Landlord the security deposit (the Security Deposit ) in Item 7 of the Basic Lease Provisions as security for the performance of the provisions hereof by Tenant. Landlord shall not be required to keep the Security Deposit separate from its general funds and Tenant shall not be entitled to interest thereon.

If Tenant defaults with respect to any provision of this Lease (beyond the expiration of all applicable notice and cure periods), including, without limitation, the provisions relating to the payment of Rent or the cleaning of the Premises upon the termination of this Lease, or amounts which Landlord may be entitled to recover pursuant to the provisions of Section 1951.2 of the California Civil Code, Landlord may, but shall not be required to, use, apply or retain all or any part of the Security Deposit (i) for the payment of any Rent or any other sum in default, (ii) for the payment of any other amount which Landlord may spend or become obligated to spend by reason of Tenant s default hereunder, or (iii) to compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenant s default hereunder, including, without limitation, costs and reasonable attorneys fees incurred by Landlord to recover possession of the Premises following a default by Tenant hereunder. If any portion of the Security Deposit is so used or applied, Tenant shall, upon demand therefor, deposit cash with Landlord to restore the Security Deposit to the appropriate amount, as determined hereunder. Any unapplied portion of the Security Deposit or any balance thereof shall be returned to Tenant (or, at Landlord s option, to the last assignee of Tenant s interest hereunder) within sixty (60) days following the expiration of the Lease Term. Tenant hereby waives the provisions of Section 1950.7 of the California Civil Code. Tenant also waives all provisions of law, now or hereafter in force, which provide that Landlord may claim from a security deposit only those sums reasonably necessary to remedy defaults in the payment of rent, to repair damage caused by Tenant or to clean the Premises.

(d) The parties agree that for all purposes hereunder the Premises shall be stipulated to contain the number of square feet of Rentable Area and the number of square feet of Usable Area described in Item 3 of the Basic Lease Provisions, based upon the Standard Method for Measuring Floor Area in Office Buildings (ANSI/BOMA Z65.1, 1996). Tenant has inspected the Premises and is fully familiar with the scope and size thereof. Tenant agrees to pay the full Basic Annual Rent and Additional Rent (defined below) set forth in this Lease in consideration for the use and occupancy of said space, regardless of the actual number of square feet contained therein, and Tenant shall have no right to terminate this Lease or receive any adjustment or rebate of any Basic Annual Rent or Additional Rent payable hereunder if the amounts set forth in Item 3 are incorrect.

(a) If Operating Costs (defined below) for the Project for any calendar year during the Lease Term ( Expense Year ) exceed Base Operating Costs (defined below), Tenant shall pay to Landlord as additional rent ( Additional Rent ) an amount equal to Tenant s Proportionate Share (defined below) of such excess.

(b) Tenant s Proportionate Share is, subject to the provisions of Paragraph 18, the percentage number described in Item 4 of the Basic Lease Provisions. Tenant s Proportionate Share represents a fraction, the numerator of which is the number of square feet of Rentable Area in the Premises and the denominator of which is the number of square feet of Rentable Area in the Building or Project, as applicable. To the extent the applicable Operating Costs are attributed by Landlord solely to the Building (rather than to the entire Project), then Tenant s Proportionate Share, with respect to such Operating Costs, shall be a fraction, the numerator of which is the number of square feet of Rentable Area in the Premises and the denominator of which is the number of square feet of Rentable Area in the Building. To the extent the applicable Operating Costs are attributed by Landlord to the entire Project, then Tenant s Proportionate Share, with respect to such Operating Costs, shall be a fraction, the numerator of which is the number of square feet of Rentable Area in the Premises and the denominator of which is the number of square feet of Rentable Area in the Project.

(c) Base Operating Costs means all Operating Costs incurred or payable by Landlord during the calendar year specified as Tenant s Base Year for Operating Costs in Item 8 of the Basic Lease Provisions.

(d) Operating Costs means all costs, expenses and obligations incurred or payable by Landlord during any Expense Year in connection with the operation, ownership, management, repair or maintenance of the Building and the Project during or allocable to the Lease Term, including without limitation, the following:

(i) The cost of services provided to the Premises, the Building or the Project, including, without limitation: water and sewer charges and the costs of electricity, heating, ventilating, air conditioning and other utilities (but excluding the cost of electricity to the extent reimbursed by Tenant or other tenants outside of Operating Costs or separately metered for the premises of Tenant or other tenants);

(ii) costs, levies or assessments imposed by, or resulting from any mandate imposed on Landlord by, any federal, state or local government for fire and police protection, trash removal, community services, or other services which do not constitute Taxes as that term is defined in Section 4(d)(xix), below;

(iii) supplies, equipment, tools, materials, service contracts, window cleaning, maintenance and repair of sidewalks and Building exterior and services areas (provided that, to the extent that Landlord reasonably determines in accordance with sound real estate management and accounting practices, consistently applied, that any of the foregoing costs are capital expenditures, then such costs shall be amortized pursuant to the terms below), gardening and landscaping; waste disposal and janitorial services;

(iv) the cost of compensation, including employment, welfare and social security taxes, paid vacation days, disability, pension, medical and other fringe benefits of all persons (including independent contractors), other than persons generally considered to be higher in rank than the position of Senior Asset Manager or its equivalent, engaged in the operation, maintenance, repair or replacement of the Project;

(v) any association assessments, costs, dues and/or expenses relating to the Project, personal property taxes on and maintenance and repair of equipment and other personal property used in connection with the operation, maintenance or repair of the Project;

(vi) repair and replacement of window coverings provided by Landlord in the premises of tenants in the Project;

(vii) such reasonable auditors fees and legal fees as are incurred in connection with the operation, maintenance or repair of the Project;

(viii) administration fees;

(ix) a property management fee (which fee may be imputed if Landlord has internalized management or otherwise acts as its own property manager);

(x) the maintenance of any easements benefiting the Project, whether by Landlord or by an independent contractor;

(xi) a reasonable allowance for depreciation of personal property used in the operation, maintenance or repair of the Project;

(xii) license, permit and inspection fees;

(xiii) all costs and expenses required for any reason by any governmental or quasi-governmental authority or by applicable law, except for capital repairs, replacements or any other improvements to remedy non-compliance with any applicable law, code or ordinance existing prior to the Date of this Lease;

(xiv) the cost of any capital improvements incurred in connection with Project by Landlord:

(A) that are reasonably anticipated to effect economies in the operation or maintenance of the Project, or any portion thereof, or to reduce current or future Operating Costs;

(B) to enhance the safety or security of the Project;

(C) that are required to comply with present or anticipated governmentally mandated conservation programs or to maintain compliance with the Green Building Standard, except for capital repairs, replacements, or other improvements to remedy any non-compliance existing prior to the Date of this Lease;

(D) that are replacements or modifications of nonstructural items located in the Common Areas that Landlord is required to maintain under the Lease in good order or condition;

(E) that are required under any governmental law or regulation enacted or first becoming effective after the Date of this Lease, except for capital repairs, replacements, or other improvements to remedy any non-compliance with any law or regulation existing prior to the Date of this Lease;

provided, however, that any capital expenditure shall be amortized (together with interest thereon at the rate of ten percent (10%) per annum or such other rate as may have been paid by Landlord on funds borrowed for the purpose of funding such improvements) over such period of time as Landlord shall reasonably determine (but in no event less than over the useful life of such improvement or such equipment as determined in accordance with sound real estate management and accounting practices, consistently applied) (collectively, Permitted Capital Expenditures );

(xv) the cost of air conditioning, heating, ventilating, plumbing, elevator maintenance and repair (to include the replacement of components) and other mechanical and electrical systems repair and maintenance;

(xvi) sign maintenance;

(xvii) Common Area (defined below) repair, resurfacing, operation and maintenance; the reasonable cost for temporary lobby displays and events commensurate with the operation of a similar class building, the cost of providing security services, if any, deemed appropriate by Landlord; Taxes (as defined below);

(xviii) The cost of all insurance carried by Landlord in connection with the Project; and

(xix) Taxes , which means any and all forms of assessment, license fee, license tax, business license fee, commercial rental tax, levy, charge, improvement bond, tax, water and sewer rents and charges, utilities and communications taxes and charges or similar or dissimilar imposition imposed by any authority having the direct power to tax, including any city, county, state or federal government, or any school, agricultural, lighting, drainage or other improvement or special assessment district thereof, or any other governmental charge, general and special, ordinary and extraordinary, foreseen and unforeseen, which may be assessed against any legal or equitable interest of Landlord in the Premises, Building, Common Areas or Project. Notwithstanding the foregoing, Taxes shall not include late fees, penalties, mortgage recording taxes and any interest related to late fees and/or delinquent payments, except to the extent directly caused by Tenant s actions. Taxes shall also include, without limitation:

(A) any tax on Landlord s right to rent or right to other income from the Premises or as against Landlord s business of leasing the Premises;

(B) any assessment, tax, fee, levy or charge in substitution, partially or totally, of any assessment, tax, fee, levy or charge previously included within the definition of real property tax, it being acknowledged by Tenant and Landlord that Proposition 13 was adopted by the voters of the State of California in the June, 1978 election and that assessments, taxes, fees, levies and charges may be imposed by governmental agencies for such services as fire protection, street, sidewalk and road maintenance, refuse removal and for other governmental services formerly provided without charge to property owners or occupants. It is the intention of Tenant and Landlord that all such new and increased assessments, taxes, fees, levies and charges be included within the definition of Taxes for the purposes of this Lease;

(C) any assessment, tax, fee, levy or charge allocable to or measured by the area of the Premises or other premises in the Building or the rent payable by Tenant hereunder or other tenants of the Project, including, without limitation, any gross receipts tax or excise tax levied by state, city or federal government, or any political subdivision thereof, with respect to the receipt of such rent, or upon or with respect to the possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises, or any portion thereof but not on Landlord s other operations;

(D) any assessment, tax, fee, levy or charge upon this transaction or any document to which Tenant is a party, creating or transferring an interest or an estate in the Premises;

(E) any assessment, tax, fee, levy or charge by any governmental agency related to any transportation plan, fund or system (including assessment districts) instituted within the geographic area of which the Project is a part; and/or

(F) any costs and expenses (including, without limitation, reasonable attorneys fees) incurred in attempting to protest, reduce or minimize Taxes.

(xx) The following items shall be excluded from Operating Costs:

(A) Marketing costs, promotional expenses, leasing commissions, attorneys fees, costs and disbursements and other expenses incurred in connection with leasing, renovating or improving vacant space in the Project for tenants or prospective tenants of the Project;

(B) costs (including permit, license and inspection fees) incurred in renovating or otherwise improving or decorating, painting or redecorating space for tenants or vacant space;

(C) costs for which the Landlord is reimbursed by any tenant or occupant of the Project outside of Operating Costs;

(D) costs of any items for which Landlord is actually paid or reimbursed by insurance;

(E) any depreciation or amortization of the Project except as expressly permitted herein; costs incurred due to a violation of Law (defined below) by Landlord relating to the Project;

(F) interest on debt or amortization payments on any mortgages or deeds of trust or any other debt for borrowed money;

(G) repairs or other work occasioned by fire, windstorm or other work paid for through insurance or condemnation proceeds (excluding any deductible);

(H) repairs resulting from any defect in the original design or construction of the Project;

(I) amount paid as ground rental for the Project by Landlord;

(J) costs incurred to comply with Laws relating to the removal of Hazardous Material which was in existence in the Building or on the Project prior to the Commencement Date (except with respect to those costs associated with the removal or abatement of Hazardous Materials due to a change of laws or for which Tenant is directly responsible pursuant to the terms of this Lease); and

(K) costs incurred by Landlord for alterations, additions, and replacements which are considered capital expenditures under sound real estate management and accounting practices, consistently applied, except for Permitted Capital Expenditures;

(L) costs resulting from the gross negligence or willful misconduct of the Landlord or its employees, contractors, or agents.

(e) If the Project is not at least ninety-five percent (95%) occupied during all or a portion of the Base Year or any Expense Year, Landlord shall make an appropriate adjustment to the components of Operating Costs for such year to determine the amount of Operating Costs that would have been incurred had the Project been ninety-five percent (95%) occupied; and the amount so determined shall be deemed to have been the amount of Operating Costs for such year. Operating Costs for the Base Year (as defined in Item 8 of the Basic Lease Provisions) shall not include (i) Operating Costs attributable to temporary market-wide labor-rate increases and/or utility rate increases due to extraordinary circumstances, including, but not limited to Force Majeure, conservation surcharges, boycotts, embargoes, or other shortages, (ii) one-time special assessments, charges, costs or fees or extraordinary charges or costs incurred in the Base Year only, or (iii) amortization of any capital items including, but not limited to, capital improvements, capital repairs and capital replacements (including such amortized costs where the actual improvement, repair or replacement was made in prior years). In addition, if in any calendar year subsequent to the Base Year, the amount of Operating Costs decreases due to a reduction in the cost of providing utilities, security and/or other services to the Project for any reason, including without limitation, because of deregulation of the utility industry and/or reduction in rates achieved in contracts with utilities and/or service providers, then for purposes of the calendar year in which such decrease in Operating Costs occurred and all subsequent calendar years, the Operating Costs for the Base Year shall be decreased by an amount equal to such decrease. In the event (i) the Commencement Date shall be a date other than January 1, (ii) the date fixed for the expiration of the Lease Term shall be a date other than December 31, (iii) of any early termination of this Lease, or (iv) of any increase or decrease in the size of the Premises, then in each such event, an appropriate adjustment in the application of this Paragraph 3 shall, subject to the provisions of this Lease, be made to reflect such event on a basis determined by Landlord to be consistent with the principles underlying the provisions of this Paragraph 3. In addition, Landlord shall have the right, from time to time, to equitably allocate and prorate some or all of the Operating Costs among different tenants and/or different buildings of the Project and/or on a building-by-building basis (the Cost Pools ), adjusting Tenant s Proportionate Share as to each of the separately allocated costs based on the ratio of the Rentable Area of the Premises to the Rentable Area of all of the premises to which such costs are allocated. Such Cost Pools may include, without limitation, the office space tenants and retail space tenants of the buildings in the Project. The Operating Costs within each such Cost Pool shall be allocated and charged to the tenants within such Cost Pool in an equitable manner and in accordance with sound real estate management and accounting practices, consistently applied.

(f) Landlord shall give to Tenant following the end of each Expense Year a statement (the Statement ) which shall state in general major categories the Operating Costs incurred or accrued for the particular Expense Year, and which shall indicate the amount by which Tenant s Proportionate Share of Operating Costs for such Expense Year exceeds Tenant s Proportionate Share of Operating Costs applicable to the Base Year, if any (the Excess ). Landlord shall use commercially reasonable efforts to deliver such Statement to Tenant on or before April 1 following the end of the Expense Year to which such Statement relates. Upon receipt of the Statement for each Expense Year commencing or ending during the Initial Term, if an Excess is present, Tenant shall pay, within thirty (30) days after receipt of the Statement, the full amount of the Excess for such Expense Year, less the amounts, if any, paid during such Expense Year as estimated Excess.

(g) Prior to the commencement of each Expense Year, Landlord shall endeavor to give to Tenant a written estimate of Tenant s Proportionate Share of the Operating Costs for the Project for then-current Expense Year ensuing year over the Base Operating Costs. Tenant shall pay such estimated amount to Landlord in equal monthly installments, in advance on the first day of each month. Within a reasonable period after the end of each calendar year, Landlord shall furnish Tenant a statement indicating in reasonable detail the excess of Operating Costs over Base Operating Costs for such period, and the parties shall, within thirty (30) days thereafter, make any payment or allowance necessary to adjust Tenant s estimated payments to Tenant s actual share of such excess as indicated by such annual statement. Any payment due Landlord shall be payable by Tenant on demand from Landlord. Any amount due Tenant shall be credited against installments next becoming due under this Paragraph 3(g) or refunded to Tenant, if requested by Tenant. Throughout the Initial Term Landlord shall maintain records with respect to Operating Costs in accordance with sound real estate management and accounting practices, consistently applied.

(h) In the event of any dispute as to any Operating Costs due under this Paragraph 3, Tenant, an officer of Tenant or Tenant s certified public accountant (but in no event shall Tenant hire or employ an accounting firm of accountants or any person to audit Landlord as set forth under this Paragraph 3 who is compensated or paid for such audit on a contingency basis) shall have the right, upon ten (10) days prior written notice to Landlord and at reasonable times, to inspect Landlord s accounting records relating to such Operating Costs. If, after such inspection, Tenant still disputes such Operating Costs, upon Tenant s written request therefor, a certification as to the proper amount of Operating Costs and the amount due to or payable by Tenant shall be made by an independent certified public accountant mutually agreed to by Landlord and Tenant. Such certification shall be final and conclusive as to all parties. If the certification reflects that Tenant has overpaid Tenant s Proportionate Share of Operating Costs for the period in question, then Landlord shall credit such excess to Tenant s next payment of Basic Annual Rent, and conversely, if Tenant has underpaid Tenant s Proportionate Share of Operating Costs, Tenant shall promptly pay such Additional Rent to Landlord. Tenant agrees to pay the cost of such certification and the investigation with respect thereto unless it is determined that Landlord s original statement was in error in Landlord s favor by more than four percent (4%), and in such event Landlord shall reimburse Tenant for the actual cost of such certification (as evidenced by written invoices), up to a maximum amount of $2,500.00, and the amount of such overstated Operating Costs shall be credited towards Tenant s next installment of Basic Annual Rent. Tenant waives the right to dispute any matter relating to the calculation of Additional Rent under this Paragraph 3 if either (i) any claim or dispute is not asserted in writing to Landlord within ninety (90) days after delivery to Tenant of the original billing statement with respect thereto or (ii) the certification regarding the disputed Operating Costs is not completed within thirty (30) days following Tenant s initial assertion to Landlord of such disputed Operating Costs; and Tenant shall have the right to inspect the records for a particular Operating Cost Year only one time. Any such inspection shall not be conducted more than once during any calendar year. Notwithstanding the foregoing, Tenant shall maintain strict confidentiality of all of Landlord s accounting records and shall not disclose the same to any other person or entity except for Tenant s professional advisory representatives (such as Tenant s employees, accountants, advisors, attorneys and consultants) with a need to know such accounting information, who agree to similarly maintain the confidentiality of such financial information. Tenant hereby acknowledges that Tenant s sole right to audit Landlord s records and to contest the amount of Operating Costs payable by Tenant shall be as set forth in this Paragraph 3(h), and Tenant hereby waives any and all other rights pursuant to applicable law to audit such records and/or to contest the amount of Operating Costs payable by Tenant.

(i) All capital levies or other taxes assessed or imposed on Landlord upon the rents payable to Landlord under this Lease and any excise, transaction, sales, gross receipts, or privilege tax, assessment, levy or charge measured by or based, in whole or in part, upon such rents from the Premises and/or the Project or any portion thereof shall be paid by Tenant to Landlord monthly in estimated installments or upon demand, at the option of Landlord, as additional rent to be allocated to monthly Operating Costs.

(j) Tenant shall pay ten (10) days before delinquency, all taxes and assessments (i) levied against any personal property, tenant improvements or trade fixtures of Tenant in or about the Premises, (ii) based upon this Lease or any document to which Tenant is a party creating or transferring an interest in this Lease or an estate in all or any portion of the Premises, and (iii) levied for any business, professional, or occupational license fees. If any such taxes or assessments are levied against Landlord or Landlord s property or if the assessed value of the Project is increased by the inclusion therein of a value placed upon such personal property or trade fixtures, Tenant shall upon demand reimburse Landlord for the taxes and assessments so levied against Landlord, or such taxes, levies and assessments resulting from such increase in assessed value. To the extent that any such taxes are not separately assessed or billed to Tenant, Tenant shall pay the amount thereof as invoiced to Tenant by Landlord.

(k) Any delay or failure of Landlord in (i) delivering any estimate or Statement described in this Paragraph 3, or (ii) computing or billing the Excess shall not constitute a waiver of its right to require an increase in Rent, or in any way impair, the continuing obligations of Tenant under this Paragraph 3.

(l) Even though the Lease Term has expired and Tenant has vacated the Premises, when the final determination is made of the Excess for the year in which this Lease terminates, Tenant shall immediately pay any increase due over the estimated Operating Costs paid, and conversely, any overpayment made by Tenant shall be promptly refunded to Tenant by Landlord.

(m) Tenant shall pay all sales and use tax levied or assessed against all Basic Annual Rent, Tenant s Proportionate Share of Operating Costs, and any other payments due under this Lease simultaneously with each installment of Basic Annual Rent, Tenant s Proportionate Share of Operating Costs and any other payment required hereunder.

(n) The Basic Annual Rent, as adjusted pursuant to Paragraphs 2, 3 and 7, and other amounts required to be paid by Tenant to Landlord hereunder, are sometimes collectively referred to as, and shall constitute, Rent .

4. IMPROVEMENTS AND ALTERATIONS

(a) Landlord shall deliver the Premises to Tenant on the Commencement Date vacant, broom clean and with the Building Systems (as that term is defined in Section 4(b) of this Lease) in good working order and repair, but otherwise in its existing AS-IS , WHERE-IS and WITH ALL FAULTS condition, and Tenant acknowledges that Landlord shall have no obligation to refurbish or otherwise improve the Premises after the Commencement Date; except, however, subject to (i) Landlord s maintenance and repair obligations as expressly set forth in this Lease, and (ii) Landlord s obligations (including, without limitation, the disbursement of the Landlord s Construction Allowance) set forth in the Work Letter attached hereto as Exhibit B. The parties acknowledge that certain furniture, trade fixtures and equipment currently in the Premises have been conveyed to Tenant pursuant to a separate written agreement between Tenant and the previous occupants of the Premises ( Existing FF&E ). Notwithstanding anything in this Lease to the contrary, Landlord was not a party to such conveyance of the Existing FF&E, and Landlord makes no representation or warranty as to such Existing FF&E. Tenant assumes the risk in accepting such Existing FF&E and waives and releases any and all claims against Landlord with respect thereto.

(b) Except in connection with any Cosmetic Alterations (as defined below) as permitted hereinbelow, after completion of the Tenant Improvements (as defined in and in accordance with Exhibit B attached hereto), any alterations, additions, or improvements made by or on behalf of Tenant to the Premises ( Alterations ) shall be subject to Landlord s prior written consent. Landlord s consent shall not be unreasonably withheld with respect to proposed Alterations that (i) comply with all Laws; (ii) are compatible with the Building mechanical, electrical, life safety, plumbing, sprinkler, heating, ventilation and air conditioning systems serving the Premises (excluding any supplemental systems installed by or on behalf of Tenant) (collectively, the Building Systems ); (iii) will not interfere with the use and occupancy of any other portion of the Building by any other tenant or their invitees; (iv) do not affect the structural portions of the Building; (v) do not and will not, whether alone or taken together with other improvements, require the construction of any other improvements or alterations within the Building; and (vi) will not adversely affect, impair or impede the Building s compliance with the Green Building Standard (collectively, the Alterations Conditions ). Notwithstanding the foregoing, Tenant shall be permitted to make minor, cosmetic Alterations, following ten (10) business days notice to Landlord, but without Landlord s consent, which (A) do not affect the Building Systems, the exterior appearance of the Premises or the Building, or the structural aspects of the Premises or the Building, (B) are not visible from outside the Premises, (C) do not require a building or construction permit, (D) do not cost more than Fifty Thousand and 00/100 Dollars ($50,000.00) in any twelve (12) month period, and (E) comply with the Alterations Conditions (such Alterations, collectively, Cosmetic Alterations ). Tenant shall cause, at its sole cost and expense, all Alterations to comply with insurance requirements and with Laws and shall construct, at its sole cost and expense, any alteration or modification required by Laws as a result of any Alterations. All Alterations shall be constructed at Tenant s sole cost and expense and in a good and workmanlike manner by contractors reasonably acceptable to Landlord and only good grades of materials shall be used. All plans and specifications for any Alterations shall be submitted to Landlord for its approval. Landlord may monitor construction of the Alterations. Landlord s right to review plans and specifications and to monitor construction shall be solely for its own benefit, and Landlord shall have no duty to see that such plans and specifications or construction comply with applicable laws, codes, rules and regulations. Without limiting the other grounds upon which Landlord may refuse to approve any contractor or subcontractor, Landlord may take into account the desirability of maintaining harmonious labor relations at the Project. Landlord may also require that all life safety related work and all mechanical, electrical, plumbing and roof related work be performed by contractors designated by Landlord. Landlord shall have the right, in its sole discretion, to instruct Tenant to remove any improvements or Alterations from the Premises at the expiration or earlier termination of the Lease. Together with Tenant s request for approval of any Alteration and the plans and specifications submitted to Landlord therefor, Tenant may request in writing that Landlord specify which Alterations, if any, Landlord will require that Tenant

remove from the Premises upon the expiration or earlier termination of the Lease Term (a Removal Request ), in which case Landlord shall specify such Alterations together with Landlord s consent thereof (if such consent is granted in accordance with the terms hereof). If Tenant delivers a Removal Request to Landlord in accordance with the immediately preceding sentence, and Landlord either fails to specify Tenant s removal obligations with respect to such Alterations together with Landlord s consent, or Landlord notifies Tenant in writing that Tenant will not have to remove such Alterations at the expiration or earlier termination of this Lease, then, in either case, Tenant will not be obligated to remove such Alterations upon the expiration or earlier termination of this Lease. Notwithstanding the foregoing, Landlord shall have the right, in its sole discretion, to instruct Tenant to remove those Alterations from the Premises which (i) were not approved in advance by Landlord, (ii) were not built in conformance with the plans and specifications approved by Landlord, or (iii) Landlord specified during its review of plans and specifications for Alterations would need to be removed by Tenant upon the expiration of this Lease. If, upon the termination of this Lease, Landlord requires Tenant to remove any or all of such Alterations from the Premises, then Tenant, at Tenant s sole cost and expense, shall promptly remove such Alterations and improvements and Tenant shall repair and restore the Premises to its condition as of the Commencement Date, reasonable wear and tear excepted. Any Alterations remaining in the Premises following the expiration of the Lease Term or following the surrender of the Premises from Tenant to Landlord, shall become the property of Landlord unless Landlord notifies Tenant otherwise. Tenant shall provide Landlord with the identities and mailing addresses of all persons performing work or supplying materials, prior to beginning such construction, and Landlord may post on and about the Premises and record any notices of non-responsibility pursuant to applicable law. Tenant shall assure payment for the completion of all work free and clear of liens and shall provide certificates of insurance for worker s compensation and other coverage in amounts and from an insurance company reasonably satisfactory to Landlord protecting Landlord against liability for bodily injury or property damage during construction. Upon completion of any Alterations and upon Landlord s reasonable request, Tenant shall deliver to Landlord final lien waivers from all such contractors and subcontractors. Tenant shall pay to Landlord, as Additional Rent (x) the reasonable third party, out-of-pocket costs incurred and actually paid by Landlord to Landlord s engineers and other consultants (but not Landlord s on-site management personnel) for review of all plans, specifications and working drawings for the Alterations and for the incorporation of such Alterations in the Landlord s master Building drawings, within ten (10) business days after Tenant s receipt of invoices either from Landlord or such consultants together with (in any event) an administrative charge of five percent (5%) of the actual costs of such work, and (y) within ten (10) business days after completion of any Alterations, the actual, reasonable costs incurred by Landlord for services rendered by Landlord s management personnel and engineers to coordinate and/or supervise any of the Alterations to the extent such services are provided in excess of or after the normal on-site hours of such engineers and management personnel.

(c) Tenant shall keep the Premises, the Building and the Project free from any and all liens arising out of any Alterations, work performed, materials furnished, or obligations incurred by or for Tenant. In the event that Tenant shall not, within ten (10) days following the imposition of any such lien, cause the same to be released of record by payment or posting of a bond in a form and issued by a surety acceptable to Landlord, Landlord shall have the right, but not the obligation, to cause such lien to be released by such means as it shall deem proper (including payment of or defense against the claim giving rise to such lien); in such case, Tenant shall reimburse Landlord for all amounts so paid by Landlord in connection therewith, together with all of Landlord s costs and expenses, with interest thereon at the Default Rate (defined below) and Tenant shall indemnify and defend each and all of the Landlord Indemnitees (defined below) against any damages, losses or costs arising out of any such claim. Tenant s indemnification of Landlord contained in this Paragraph shall survive the expiration or earlier termination of this Lease. Such rights of Landlord shall be in addition to all other remedies provided herein or by law.

(d) NOTICE IS HEREBY GIVEN THAT LANDLORD SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT, OR TO ANYONE HOLDING THE PREMISES THROUGH OR UNDER TENANT, AND THAT NO MECHANICS OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN THE PREMISES.

(a) Landlord shall keep the Common Areas of the Building and the Project in a clean and neat condition. Subject to subparagraph (b) below, Landlord shall maintain in good condition and operating order the structural portions, the exterior walls, the foundation, the floor/ceiling slabs, the roof, the columns, the beams, the shafts (including elevator shafts), the stairwells, the exterior doors, the exterior locks on exterior doors and the windows of the Building, the public bathrooms (to the extent same are not the obligation of a tenant or occupant of the Building pursuant to the applicable lease agreement), the landscaping, the exterior Project signage, and the Common Areas and public corridors and other public areas of the Project not constituting a portion of any tenant s premises; and Landlord shall keep all Building Systems used by Tenant in good condition and repair and to replace same at the end of such equipment s normal and useful life, reasonable wear and tear and casualty loss excepted. Except as expressly provided in Paragraph 9 of this Lease, there shall be no abatement of Rent and no liability of Landlord by reason of any injury to or interference with Tenant s business arising from the making of any repairs, alterations or improvements in or to any portion of the Premises, the Building or the Project. Tenant waives the right to make repairs at Landlord s expense under any law, statute or ordinance now or hereafter in effect (including the provisions of California Civil Code Section 1942 and any successive sections or statutes of a similar nature).

(b) Tenant, at its expense, (i) shall keep the Premises and all fixtures and equipment contained therein in a safe, clean and neat condition, and (ii) shall bear the cost of maintenance and repair, by contractors selected by Landlord, of all facilities which are not expressly required to be maintained or repaired by Landlord and which are located in the Premises, including, without limitation, lavatory, shower, toilet, wash basin and kitchen facilities and supplemental heating and air conditioning systems (including all plumbing connected to said facilities or systems installed by or on behalf of Tenant or existing in the Premises at the time of Landlord s delivery of the Premises to Tenant). Tenant shall make all repairs to the Premises not required to be made by Landlord under subparagraph (a) above with replacements of any materials to be made by use of materials of equal or better quality. Tenant shall do all decorating, remodeling, alteration and painting required by Tenant during the Lease Term. Tenant shall pay for the cost of any repairs to the Premises, the Building or the Project made necessary by any negligence or willful misconduct of Tenant or any of its assignees, subtenants, employees or their respective agents, representatives, contractors, or other persons permitted in or invited to the Premises or the Project by Tenant. If Tenant fails to make such repairs or replacements within fifteen (15) days after written notice from Landlord, Landlord may at its option make such repairs or replacements, and Tenant shall upon demand pay Landlord for the cost thereof, together with an administration fee equal to five percent (5%) of such costs.

(c) Upon the expiration or earlier termination of this Lease, Tenant shall surrender the Premises in a safe, clean and neat condition, normal wear and tear excepted. Prior to the expiration or earlier termination of this Lease, Tenant shall remove from the Premises (i) all trade fixtures, furnishings and other personal property of Tenant, and (ii) all computer and phone cabling and wiring from the Premises, and Tenant shall repair all damage caused by such removal, and shall restore the Premises to its original condition reasonable wear and tear excepted, except as otherwise set forth in Paragraph 4(b) of this Lease with respect to Alterations in connection with a Removal Request. In addition to all other rights Landlord may have, in the event Tenant does not so remove any such fixtures, furnishings or personal property, Tenant shall be deemed to have abandoned the same, in which case Landlord may store or dispose of the same at Tenant s expense, appropriate the same for itself, and/or sell the same in its discretion.

(a) Tenant shall use the Premises only for general office uses and shall not use the Premises or permit the Premises to be used for any other purpose. Landlord shall have the right to deny its consent to any change in the permitted use of the Premises in its sole and absolute discretion.

(b) Tenant shall not at any time use or occupy the Premises, or permit any person to use the Premises in violation of any covenant of record, law, statute, building or zoning code, ordinance, or governmental order, condition of approval, rule or regulation, as well as the same may be amended and supplemented from time to time (collectively, Law or Laws ) and Tenant shall, upon written notice from Landlord, discontinue any use of the Premises which is declared by any governmental authority to be a violation of Law. If any Law shall, by reason of

the nature of Tenant s use or occupancy of the Premises, impose any duty upon Tenant or Landlord with respect to (i) modification or other maintenance of the Premises, the Building or the Project, or (ii) the use, alteration or occupancy thereof, Tenant shall comply with such Law at Tenant s sole cost and expense. This Lease shall be subject to and Tenant shall comply with all financing documents encumbering the Building or the Project and all covenants, conditions and restrictions affecting the Premises, the Building or the Project, including, but not limited to, Tenant s execution of any subordination agreements requested by a mortgagee (which for purposes of this Lease includes any lender or grantee under a deed of trust) of the Premises, the Building or the Project.

(c) Tenant shall not at any time use or occupy the Premises in violation of the certificates of occupancy issued for or restrictive covenants pertaining to the Building or the Premises, and in the event that any architectural control committee or department of the State or the city or county in which the Project is located shall at any time contend or declare that the Premises are used or occupied in violation of such certificate or certificates of occupancy or restrictive covenants recorded in the public records,. Any statement in this Lease of the nature of the business to be conducted by Tenant in the Premises shall not be deemed or construed to constitute a representation or guaranty by Landlord that such business is or will continue to be lawful or permissible under any certificate of occupancy issued for the Building or the Premises, or otherwise permitted by Law.

(d) Tenant shall not do or permit to be done anything which may invalidate or increase the cost of any fire, All Risk, Causes of Loss Special Form or other insurance policy covering the Building, the Project and/or property located therein and shall comply with all rules, orders, regulations and requirements of the appropriate fire codes and ordinances or any other organization performing a similar function. In addition to all other remedies of Landlord, Landlord may require Tenant, promptly upon demand, to reimburse Landlord for the full amount of any additional premiums charged for such policy or policies by reason of Tenant s failure to comply with the provisions of this Paragraph 6.

(e) Tenant shall not in any way interfere with the rights or quiet enjoyment of other tenants or occupants of the Premises, the Building or the Project. Tenant shall not use or allow the Premises to be used for any unlawful or reasonably objectionable purpose, nor shall Tenant cause, maintain, or permit any nuisance in, on or about the Premises, the Building or the Project. Tenant shall not place weight upon any portion of the Premises exceeding the structural floor load (per square foot of area) which such area was designated (and is permitted by Law) to carry or otherwise use any Building system in excess of its capacity or in any other manner which may damage such system or the Building. Tenant shall not create within the Premises a working environment with a density of greater than five (5) persons per 1,000 square feet of Rentable Area. Business machines and mechanical equipment shall be placed and maintained by Tenant, at Tenant s expense, in locations and in settings sufficient in Landlord s reasonable judgment to absorb and prevent vibration, noise and annoyance. Tenant shall not commit or suffer to be committed any waste in, on, upon or about the Premises, the Building or the Project.

(f) Tenant shall take all reasonable steps necessary to adequately secure the Premises from unlawful intrusion, theft, fire and other hazards, and shall keep and maintain any and all security devices in or on the Premises in good working order, including, but not limited to, exterior door locks for the Premises and smoke detectors and burglar alarms located within the Premises and shall cooperate with Landlord and other tenants in the Project with respect to access control and other safety matters.

(g) As used herein, the term Hazardous Material means any hazardous or toxic substance, material or waste which is or becomes regulated by any local governmental authority, the State or the United States Government, including, without limitation, any material or substance which is (A) defined or listed as a hazardous waste, pollutant, extremely hazardous waste, restricted hazardous waste, hazardous substance or hazardous material under any applicable federal, state or local Law or administrative code promulgated thereunder, (B) petroleum, or (C) asbestos.

(i) Landlord covenants that during the Lease Term, all of Landlord s operations and activities shall comply with all Laws then governing or in any way relating to the generation, handling, manufacturing, treatment, storage, use, transportation, release, spillage, leakage, dumping, discharge or disposal of any Hazardous Materials.

(ii) Tenant agrees that all operations or activities upon, or any use or occupancy of the Premises, or any portion thereof, by Tenant, its respective agents, employees, representatives and contractors (collectively referred to herein as Tenant Parties ), throughout the Lease Term, shall be in all respects in compliance with all federal, state and local Laws then governing or in any way relating to the generation, handling, manufacturing, treatment, storage, use, transportation, release, spillage, leakage, dumping, discharge or disposal of any Hazardous Materials. Nothing in this Lease shall impose any liability on Tenant for any Hazardous Materials that are (i) in existence on the Premises, Building or Project in a condition of non-compliance with applicable Laws prior to the Date of this Lease, or (ii) other than costs that are properly included within Operating Costs in accordance with Paragraph 3 of this Lease, brought onto the Premises, Building or Project after the Date of this Lease by Landlord or any third parties not under Tenant s control, provided that in each of the cases in clauses (i) and (ii), such Hazardous Materials are not generated, handled, released, or used by Tenant or a Tenant Party (other than mere discovery).