BUILDING LEASE AGREEMENT

EXHIBIT 10.17

BUILDING LEASE AGREEMENT

     This BUILDING LEASE AGREEMENT (“ Lease ”) dated as of July 26, 2004 (“ Effective Date ”), is entered into by and between ROBERT JEAN LICHTER and GAIL F. LICHTER, Trustees of THE LICHTER FAMILY TRUST FIRST AMENDED AND RESTATED DECLARATION OF TRUST DATED NOVEMBER 7, 1996, and KENNETH R. SATTERLEE and CANDACE C. SATTERLEE, Trustees of THE SATTERLEE FAMILY TRUST UTD APRIL 24, 1986, as tenants-in-common (“ Landlord ”), and ARTES MEDICAL USA, INC., a Delaware corporation (“ Tenant ”), on all of the terms and conditions set forth below and in the attached Exhibits, each of which are incorporated into this Lease by this reference. For and in consideration of the mutual covenants and conditions set forth in this Lease, Landlord leases to Tenant, and Tenant leases from Landlord, the Premises as described in Section 1.1(b) below.

     1.  Basic Lease Provisions . (“ Basic Lease Provisions ”)

          1.1 Building and Premises :

               (a)  Building . The “ Building ” shall mean the building and improvements located at 5870 Pacific Center Blvd., San Diego, California 92121.

               (b)  Premises . The “ Premises ” shall mean 34,820 square feet of rentable area located within the Building and as depicted on the attached Exhibit “A” .

               (c)  Elan Lease . Tenant acknowledges that, as of the Effective Date, a portion of the Premises consisting of the warehouse space located in the southwest corner of the Building known as Room 168 (“ Temporary Elan Space ”) is currently leased by Elan Pharmaceuticals, Inc., a Delaware corporation (“ Elan ”) pursuant to a Lease dated November 19, 2003 (“ Elan Lease ”) between Landlord and Elan. A copy of the Elan Lease has been provided to Tenant. Tenant’s leasing of the Premises pursuant to this Lease shall be subject to the Elan Lease and Elan’s right to possession and quiet enjoyment of the Temporary Elan Space during the term thereof, as the same may be extended. The approximate location of the Temporary Elan Space is depicted on the attached Exhibit “A” . The term of the Elan Lease is scheduled to expire on November 30, 2005 (“ Elan Lease Expiration Date ”). During the term of the Elan Lease, Elan shall have the right to use the Temporary Elan Space pursuant to the terms and provisions of the Elan Lease. Landlord shall use commercially reasonable efforts to cause Elan to vacate and surrender exclusive possession of the entire Temporary Elan Space to Landlord on the Elan Lease Expiration Date. Upon the later of (i) the Elan Termination Date (as defined below) or (ii) November 30, 2005, Landlord shall not be obligated to pay Tenant the Reimbursement Amount (as defined in Section 1.4 below). The “ Elan Termination Date ” shall be the date on which all of the following three (3) requirements have been satisfied: (i) termination of the Elan Lease for any reason, (ii) vacation and surrender of exclusive possession of the entire Temporary Elan Space by Elan to Landlord and (iii) delivery of the Temporary Elan Space by Landlord to Tenant in a vacant, broom clean condition. Notwithstanding any provision of this Lease to the contrary, Tenant shall not be liable for any damages, losses or claims for liability to the extent that such damages, losses and/or claims arise out of Elan’s acts or omissions in connection with its use of the Temporary Elan Space.

          1.2 Use : Any legally permitted use including, but not limited to, biomedical research, manufacturing and development and related office and administrative uses, subject to Section 5 below.

          1.3 Term : The term of this Lease (“ Term ”) shall commence upon the Commencement Date (as defined below), and continue until December 31, 2011, subject to the provisions of Section 2.4 below. The “ Commencement Date ” shall be the date on which the Premises are delivered to Tenant. Landlord shall deliver the Premises to Tenant upon the date of full execution and delivery of this Lease. Tenant shall have one (1) option to extend the Term for a period of five (5) years, pursuant to Section 2.4 below.

          1.4 Rent : Base rent payable for the Premises (“ Base Rent ”) shall be as follows:

Base Rent shall be payable in advance on the first (1st) day of each month during the Term, beginning on January 1, 2005 (“ Rent Commencement Date ”), and shall be subject to a late charge if not received by the tenth (10th) day of such month, as provided in Section 12.4 below. Provided that Tenant is not in default under this Lease after the lapse of any applicable notice and cure periods, Base Rent shall be abated during the period beginning on the Commencement Date until December 31, 2004. Provided that Tenant is not in default under this Lease after the lapse of any applicable notice and cure periods, Landlord shall pay Tenant the sum of Ten Thousand and 00/100 Dollars ($10,000.00) (“ Reimbursement Amount ”) per month during the period beginning on January 1, 2005, and ending on the later of (i) November 30, 2005 (i.e., 11 payments) or (ii) the Elan Termination Date, for the use of the Temporary Elan Space by Elan.

          1.5 Initial Payment : Concurrently with delivery of the executed Lease, Tenant shall pay Landlord the sum of Two Hundred Forty-Eight Thousand Three Hundred Sixty-Four and 40/100 Dollars ($248,364.40) (“ Initial Payment ”) (i.e.; an amount equal to $43,699.10 for the first month’s rent, less the $10,000.00 monthly Reimbursement Amount for the first month, plus an amount equal to $6,964.00 for the first full calendar monthly Operating Expenses and Real Property Taxes, plus the $207,701.30 Security Deposit (as defined below)) in immediately available funds. In addition, if the Commencement Date is not the first day of the calendar month, then, concurrently with delivery of the executed Lease, Tenant shall also pay Landlord a prorated portion of Six Thousand Nine Hundred Sixty-Four and 00/100 Dollars ($6,964.00) for Operating Expenses and Real Property Taxes for such partial calendar month based upon the actual number of days of such calendar month. The amount of Forty-Three Thousand Six Hundred Ninety-Nine and 10/100 Dollars ($43,699.10) shall be applied toward the first monthly installment of Base Rent. Landlord shall not be obligated to pay the Reimbursement Amount during the month of January 2005. The remaining, unapplied portion of the Initial Payment shall

2

be retained by Landlord as the Security Deposit for the remainder of the Term, as the same may be extended.

          1.6 Security Deposit : Two Hundred Seven Thousand Seven Hundred One and 30/100 Dollars ($207,701.30) (“ Security Deposit ”), payable as provided in Section 1.5 above.

          1.7 Operating Expenses and Real Property Taxes : During the period beginning on the Commencement Date and continuing through and until the Direct Expense Date (as defined in Section 3.3(a) below), Tenant shall pay Landlord the sum of Six Thousand Nine Hundred Sixty-Four and 00/100 Dollars ($6,964.00) (i.e., $0.20 per square foot) per month for Operating Expenses (inclusive of association fees and water and sewer service, but excluding electricity service to the Premises) and Real Property Taxes, as Landlord shall be responsible for providing all items described as Operating Expenses for the period prior to the Direct Expense Date. Beginning on the Direct Expense Date, Tenant shall pay one hundred percent (100%) of the Operating Expenses, as provided in Section 3.3 below, and the Real Property Taxes applicable to the Premises, as provided in Section 9 below. In addition, Tenant shall pay for the actual cost of all utility services to the Building and security services for the Building required by Tenant, if any.

          1.8 Parking : Seventy (70) spaces.

          1.9 Brokers : Landlord shall pay commissions to (a) Lisa Anderson of ERA Eagle Estates Realty and Chad Urie of Colliers International (Tenant’s brokers) and (b) Burnham Real Estate Services (Landlord’s brokers), pursuant to a separate written agreement.

          1.10 Right of First Refusal: See Section 37 below.

          1.11 Tenant Improvement Allowance: See Sections 3.2 and 6.3(a) below.

     2.  Term .

          2.1 Term . The terms and provisions of this Lease shall be effective as of the Effective Date of this Lease. The Term and Commencement Date of this Lease shall be as specified in Section 1.3 of the Basic Lease Provisions.

          2.2 Acceptance . On the Commencement Date, Tenant shall be deemed to have accepted the Premises in their then existing condition and subject to all applicable recorded easements and covenants, conditions and restrictions, including, without limitation, the Declaration of Covenants, Conditions and Restrictions for Units 2, 3, 4, and 6 of Pacific Corporate Center recorded October 24, 1986, as File No. 86-482692 (“ CC&Rs ”), any recorded covenants and restrictions regarding parking and access, and all applicable zoning and municipal, county, state and federal laws, codes, ordinances and regulations, including without limitation, laws and regulations pertaining to the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101, et seq., as amended (“ ADA ”), and the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 § U.S.C. 9601, et seq., as amended (collectively, “ Applicable Laws ”). Subject only to the express representations of Landlord provided in Section 5.4 below, Tenant shall accept the Premises in its “as-is”, “where is” condition and configuration, it being agreed that Landlord shall not be required to perform any work or, except

3

as provided above with respect to the Allowance (as defined in Section 3.2 ) below, incur any costs in connection with the construction or demolition of any improvements on, to or within the Premises.

          2.3 Intentionally Omitted .

          2.4 Option to Extend Term . Provided that Tenant is not in default under the Lease after the lapse of any applicable cure periods, Tenant shall have one (1) option (“ Option ”) to extend the Term of the Lease for an additional period of five (5) years (“ Option Term ”) on all of the same terms and conditions of the Lease, except as expressly provided below in this Section 2.4 . Tenant may exercise the Option by delivering written notice to Landlord of its intention to so extend the term of the Lease no later than June 30, 2011. Base Rent payable during the Option Term shall be the greater of (a) Eighty Thousand Eight Hundred Seventy Four and 67/100 ($80,874.67) per month, plus cumulative annual increases of three percent (3%) during the Option Term, or (b) ninety-five percent (95%) of the Market Rate (as defined below) as of the date on which Tenant exercises the Option. The “ Market Rate ” shall mean the terms and conditions which would be offered to a non-equity, non synthetic-lease tenant for comparable laboratory space with improvements of comparable age, appearance and quality of construction located in the Sorrento Mesa submarket of San Diego, taking into account the value of existing tenant improvements over standard tenant improvements, parking ratios, rental rates, rent concessions, operating expense base year, rent increases and equivalent location, access, visibility and signage. Comparable lease terms shall be based on five (5) year transactions with corresponding adjustments to rental rates and concessions. Landlord shall determine the Market Rate by using its good faith judgment and shall provide written notice of the Market Rate to Tenant within fifteen (15) days after Tenant delivers notice of exercise of the Option. Tenant shall have thirty (30) days (“ Tenant’s Review Period ”) after receipt of Landlord’s notice of the Market Rate within which to accept such rent or to reasonably object thereto in writing. In the event that Tenant objects, Landlord and Tenant shall attempt to agree upon the Market Rate using their good faith efforts. If Landlord and Tenant are unable to reach agreement within fifteen (15) days following Tenant’s Review Period (“ Outside Agreement Date ”), then the matter shall be submitted to arbitration as provided in this Section 2.4 below:

               (a) Landlord and Tenant shall each appoint one independent, unaffiliated, neutral appraiser who shall by profession be a real estate broker who has been active over the five (5) year period ending on the date of such appointment in the valuation of leases of comparable space in comparable buildings in the general vicinity of the Building. Each such appraiser will be appointed within twenty (20) days after the Outside Agreement Date.

               (b) The two (2) appraisers so appointed shall, within ten (10) days of the date of the appointment of the last appointed appraiser, agree upon and appoint a third appraiser who will be qualified under the same criteria set forth above for qualification of the initial two (2) appraisers.

               (c) The determination of the appraisers shall be limited solely to the issue of whether Landlord’s or Tenant’s last proposed (as of the Outside Agreement Date) Market Rate for the Premises is the closest to the actual Market Rate for the Premises as determined by the appraisers, taking into account the requirements of Section 2.4 above.

               (d) The three (3) appraisers shall, within fifteen (15) days of the appointment of the third appraiser, reach a decision as to whether the parties shall use Landlord’s or Tenant’s submitted Market Rate (i.e., the appraisers may only select Landlord’s or Tenant’s submission and may not select a compromise position), and shall notify Landlord and Tenant of the decision.

               (e) The decision of the majority of the three (3) appraisers shall be binding upon Landlord and Tenant. The cost of each party’s appraiser shall be the responsibility of the party selecting such appraiser, and the cost of the third appraiser shall be shared equally by Landlord and Tenant.

               (f) If either Landlord or Tenant fails to appoint an appraiser within the time period in Section 2.4(a) above, the appraiser appointed by one of them shall reach a decision, notify Landlord and Tenant thereof and such appraiser’s decision shall be binding upon Landlord and Tenant.

               (g) If the two (2) appraisers fail to agree upon and appoint a third appraiser, both appraisers shall be dismissed and the matter to be decided shall be submitted to binding arbitration under the auspices of JAMS (or any successor organization) in San Diego County, California according to the then rules for commercial arbitration for such organization (but subject to the requirements of this Section 2.4 ).

               (h) The cost of the arbitration shall be shared equally by Landlord and Tenant.

The Option is personal to the original Tenant and may not be assigned to any third party except to an Affiliate in connection with a Permitted Transfer pursuant to Section 11.1 below.

     3.  Rent and Tenant Improvement Allowance .

          3.1 Monthly Payment . Tenant shall pay Landlord Base Rent and Operating Expenses set forth in Sections 1.4 and 1.7 above and Section 3.3 below without notice, demand, offset or deduction, except as otherwise provided herein. Tenant shall pay Landlord the Initial Payment provided in Section 1.5 above upon execution and delivery of this Lease. Rent for any period during the Term which is for less than one calendar month shall be prorated based upon the actual number of days of the applicable calendar month. Rent shall be payable in lawful money of the United States to Landlord at the address stated in Section 22 below or to such other person or at such other places as Landlord may designate in writing.

          3.2 Tenant Improvement Allowance . Provided that Tenant is not in default under the Lease after the lapse of any applicable notice and cure periods, Landlord agrees to contribute the sum of One Hundred Seventy-Five Thousand and 00/100 Dollars ($175,000.00) (“ Allowance ”) toward the cost of constructing the Initial Alterations as provided in Section 6.3(a) below.

          3.3 Operating Expenses .

               (a) This Lease contemplates a transaction commonly described as a “triple-net lease” whereby the parties intend that Tenant shall bear all of the costs related to the operation, repair, maintenance, management, restoration and replacement of the Building or any portion thereof, except as otherwise expressly set forth in this Lease (collectively, “ Operating Expenses ”). Subject to the provisions of Section 1.7 above, in addition to the Base Rent, Tenant shall pay to Landlord during the Term of this Lease one hundred percent (100%) of Operating Expenses as provided in this Section 3.3 . The Parties acknowledge that, Landlord intends to record a subdivision of the single legal parcel currently containing the Building and the building located at 5880 Pacific Center Boulevard into two (2) legal parcels (“ Lot Split ”) in the Official Records of San Diego County prior to the Direct Expense Date. Following the Lot Split, one new parcel will consist of the portion of the original parcel located at 5870 Pacific Center Boulevard (“ 5870 Parcel ”), including the Building, and the other new parcel will consist of the portion of the original parcel located at 5880 Pacific Center Boulevard (“ 5880 Parcel ”), including the building thereon. Beginning on the date (“ Direct Expense Date ”) which is the later of the Rent Commencement Date (i.e., January 1, 2005) or the effective date of the Lot Split, (i) Tenant shall be responsible for one hundred percent (100%) of the Operating Expenses attributable to the 5870 Parcel and the Building, including all of the costs related to the operation, repair, maintenance, management, restoration and replacement of the areas of the 5870 Parcel that were common areas prior to the Lot Split; (ii) Tenant shall pay Operating Expenses directly to the service providers, contractors or other appropriate third parties, except as provided below in this Section 3.3 ; (iii) Tenant shall maintain, repair and replace the Building Systems and shall make such structural or capital improvements to the 5870 Parcel and the Building as may be necessary to comply with Tenant’s obligations under this Lease, provided, that, Tenant shall not be obligated to make any structural or capital improvements to the foundation, roof, or structural or exterior walls of the Building; (v) Landlord shall be responsible only for costs related to the foundation, roof, and structural and exterior walls of the Building; and (vii) Tenant shall continue to pay Landlord directly for the Real Property Taxes.

               (b) Operating Expenses payable by Tenant shall include, without limitation:

                    (i) costs and expenses incurred in the operation, repair, maintenance, management and replacement of (A) surfaces, coverings and parking areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways, parkways, driveways, landscaped areas, striping, irrigation systems, lighting facilities, fences and gates, and all taxes and assessments, utilities, insurance premiums, administrative charges and other costs; and (B) all heating, air conditioning, plumbing, electrical systems, life safety equipment, telecommunications equipment, elevators and escalators, tenant directories, fire detection systems, sprinkler systems and other equipment servicing the Building (collectively, “ Building Systems ”);

                    (ii) janitorial and trash disposal for the common areas;

                    (iii) the cost incurred in connection with the implementation or operation of a transportation system management program or similar program, and the cost of

any equipment rental agreements or personal property used in connection with the maintenance, operation or repair of the Building;

                    (iv) the cost of the premiums for the liability and property insurance policies (including, but not limited to, boiler and machinery insurance), earthquake and flood insurance and other insurance policies maintained by Landlord, pursuant to Section 7 below;

                    (v) the cost of water, sewer, gas, electricity, heating, ventilation, air-conditioning and other utilities or services provided to the Building;

                    (vi) replacing and/or adding improvements mandated by any governmental agency and any repairs or removals necessitated thereby, except for any capital improvements, repairs and/or replacements made by Landlord to the foundation, roof, and structural and exterior walls of the Building as these expenses shall be at Landlord’s sole cost and expense;

                    (vii) replacing equipment or improvements (other than the roof, the foundation and the structural and exterior walls of the Building); and

                    (viii) association fees payable pursuant to the CC&Rs and any other owners’ association dues or fees.

     The components of Operating Expenses listed as items (iv) and (viii) above (i.e., insurance costs and association fees), together with Real Property Taxes, shall be paid directly by Landlord. Tenant shall pay Landlord such costs, together with an administrative fee equal to two percent (2%) of the aggregate amount of items (iv) and (viii) above and Real Property Taxes, within fifteen (15) days after delivery of invoice therefor to Tenant from Landlord, which invoice shall include the itemized bill received by Landlord for such item. Tenant shall have no obligation to reimburse Landlord for any Operating Expenses pursuant to this Section 3.3 other than for items (iv) and (viii) above, the Real Property Taxes and the administrative fee.

          3.4 Definition of Rent . The capitalized term “ Rent ,” as used in this Lease, shall mean the Base Rent, Operating Expenses and any and all monetary obligations of Tenant under this Lease.

          3.5 Intentionally Omitted .

     4.  Security Deposit . Tenant shall deposit with Landlord upon execution hereof the Security Deposit set forth in Section 1.6 of the Basic Lease Provisions as security for Tenant’s faithful performance of Tenant’s obligations hereunder. If Tenant fails to pay Rent or other charges due hereunder after the lapse of any applicable notice and cure periods, or otherwise defaults with respect to any provision of this Lease, Landlord may use, apply or retain all or any portion of said Security Deposit for the payment of any Rent or other charge in default, for the payment of any other sum to which Landlord may become obligated by reason of Tenant’s default, and/or to compensate Landlord for any loss or damage which Landlord may suffer thereby. If Landlord so uses or applies all or any portion of the Security Deposit, Tenant shall, within ten (10) days after written demand, deposit cash with Landlord in an amount sufficient to

restore the Security Deposit to the full amount set forth in Section 1.6 (as decreased pursuant to the last sentence of this Section 4 below, if applicable). Landlord shall not be required to keep the Security Deposit separate from its general accounts. If Tenant performs all of Tenant’s obligations hereunder, the Security Deposit (as decreased pursuant to the last sentence of this Section 4 below, if applicable), or so much thereof as has not been applied by Landlord, shall be returned, without payment of interest or other increment for its use, to Tenant (or, at Landlord’s option, to the last assignee, if any, of Tenant’s interest hereunder) within thirty (30) days after the Term expires and Tenant vacates the Premises. No trust relationship is created herein between Landlord and Tenant with respect to the Security Deposit. Notwithstanding anything to the contrary contained in this Section 4 , so long as Tenant is not in default of any of its obligations under this Lease after the lapse of any applicable cure periods, and never has been in default of any of its material monetary obligations under this Lease after the lapse of any applicable notice and cure periods, Landlord shall reduce the amount of the Security Deposit by Sixty-Eight Thousand Seventy-Three and 10/100 Dollars ($68,073.10) on December 31, 2007, and by Seventy-Five Thousand Thirty-Seven and 10/100 Dollars ($75,037.10) on December 31, 2009, and Landlord shall apply such amounts against Tenant’s next Rent obligations coming due hereunder, respectively.

     5.  Use .

          5.1 Use . The Premises shall be used and occupied only for the purpose set forth in Section 1.2 of the Basic Lease Provisions and Tenant shall not use or permit the Premises or any part thereof to be used for any other purpose or purposes whatsoever. Tenant shall keep the Premises and every part thereof in a clean and safe condition free of nuisances. Tenant shall have access to and the right to conduct its business operations at the Premises twenty-four (24) hours a day, seven (7) days a week.

          5.2 Compliance with Law; Insurance Requirements . Tenant shall, at Tenant’s sole cost and expense, promptly comply with all Applicable Laws (including, without limitation, the ADA), rules, regulations, orders, the CC&Rs, and the requirements of any insurance underwriters or ratings bureaus, now in effect or which may hereafter come into effect, relating in any manner to the Premises and the occupation and use of the Premises by Tenant and (subject only to Landlord’s representations in Section 2.2 above) any improvements or alterations made to the Premises by or on behalf of Tenant. Tenant shall conduct its business in a lawful manner and shall not use or permit the use of the Premises or the common areas in any unlawful manner or in any manner that will tend to create waste or a nuisance or shall tend to disturb other occupants of the Building. Notwithstanding anything to the contrary in this Lease, no such requirement by Tenant to comply with laws shall be construed as requiring Tenant to make structural or capital improvements to the foundation, roof or structural and exterior walls of the Building.

          5.3 Rules and Regulations . Tenant agrees to comply with all of the rules and regulations attached hereto as Exhibit “D” with respect to the Building, as the same may be reasonably supplemented and/or modified by Landlord from time to time, and to cause its invitees to comply with the same. Landlord shall have the right, from time to time, to reasonably modify and amend the rules and regulations, provided that a copy of any such modification or amendment is delivered to Tenant prior to the effective date thereof.

          5.4 Suitability of Premises . Tenant acknowledges that it has satisfied itself by its own independent investigation that the Premises are suitable for its intended use, and neither Landlord nor any agent of Landlord has made any representation or warranty as to the present or future suitability of the Premises, common areas, or Building for the conduct of Tenant’s business. Tenant further acknowledges that it is accepting the Premises, and that Landlord is delivering the Premises to Tenant, on an “as is”, “where is” basis, without any representations by Landlord regarding the condition thereof except that Landlord represents and warrants that, as of the Commencement Date, (a) Landlord has not received any written notice of violation of any Applicable Laws and, to the actual knowledge of Landlord without investigation or inquiry, the Premises are not in material violation of any Applicable Laws as of the Commencement Date, (b) the foundation, roof, and structural and exterior walls of the Building are in good working order and (c) to Landlord’s actual knowledge, without investigation or inquiry, the Building Systems are in working order.

          5.5 Vehicle Parking : Subject to the rules and regulations attached hereto as Exhibit “D” and as established by Landlord from time to time, and any recorded covenants and restrictions, Tenant and its employees, agents, customers and invitees shall have the right to use the number of parking spaces indicated in Section 1.8 of the Basic Lease Provisions within the parking areas located adjacent and contiguous to the Building (“ Parking Area ”) at no charge. Landlord shall have the right to relocate and/or restripe any portion of the Parking Area in its sole discretion, provided that the number of parking spaces allocated to Tenant shall not be decreased.

          5.6 Changes to Common Areas . Prior to the effective date of the Lot Split, Landlord shall have the right, in Landlord’s sole discretion, from time to time to: (a) close temporarily any of the common areas for maintenance and/or alteration purposes so long as reasonable access to the Premises remains available; (b) designate other land and improvements outside the present boundaries of property surrounding the Building to be a part of the common areas; (c) use the common areas while making additional improvements, repairs or alterations to the Building or any portion thereof provided that such use does not materially adversely interfere with Tenant’s business operations and there is no reduction in the parking for, or access to, the Premises; and (d) do and perform such other acts and make such other changes in, to or with respect to the common areas and the other portions of the Building as Landlord may reasonably deem to be appropriate provided that such acts do not materially adversely interfere with Tenant’s business operations and there is no reduction in the parking for, or access to, the Premises.

          5.7 Roof Rights .

               (a) Tenant shall have the non-exclusive right to use certain rooftop and antenna space and certain related vertical penetrations in the rooftop and related interior space, as designated by Landlord on and within the Building (“ Antenna Space ”) for the use of communications antennas and/or satellite dishes for Tenant’s business (“ Permitted Equipment ”) and for no other purposes. Tenant shall have access to the rooftop upon twenty- four (24) hours prior notice to Landlord and when accompanied by a representative of Landlord. The location of all of such communications antennas and/or satellite dishes shall be at locations reasonably designated by Landlord provided that such locations will allow Tenant to transmit

and receive reception without interference (“ Interference Free Location ”). If from time to time a location designated by Landlord, which initially is acceptable to Tenant as an Interference Free Location, subsequently becomes unacceptable because of conditions which create interference, Landlord shall designate and make available to Tenant a new Interference Free Location. The installation and any costs relating thereto, and the maintenance, repair, insurance obligations and liability, with respect to such communications antennas and/or satellite dishes, shall be borne completely by Tenant.

               (b) Tenant shall, at its sole cost and expense, obtain and maintain any and all permits, approvals and/or licenses required by the CC&Rs and any and all governmental agencies having jurisdiction over the Building for the construction, installation and operation of the Permitted Equipment. Tenant shall not use the Antenna Space in any way that interferes (electronically or otherwise) with the use of the Building by Landlord or by any third party office tenants or licensees of Landlord. Upon written notice from Landlord to Tenant of any such interference, Tenant shall immediately eliminate or mitigate such interference to the reasonable satisfaction of Landlord. If such interference cannot be eliminated or mitigated to the reasonable satisfaction of Landlord within five (5) business days following such notice, Tenant shall immediately cease operating the equipment or portion thereof causing such interference. Tenant shall not perform any maintenance, repairs, alterations or other work on the Permitted Equipment in any manner that disrupts or interferes with the use of the Building by Landlord or by other tenants or licensees of Landlord. Tenant shall not make any improvement or alteration or take any other action that affects the integrity of the roof of the Building. Tenant shall be responsible for any damage, which Tenant or its agents or invitees may cause to the roof.

               (c) Tenant shall cooperate with Landlord with respect to any and all maintenance and/or repair work performed by Landlord on or to the roof (collectively, “ Roof Wor k”) during the term, as the same may be extended. In connection with such cooperation, Tenant shall temporarily move and/or relocate, at Landlord’s sole cost and expense, any and all portions of the Permitted Equipment and Tenant’s improvements on or to the portion of the Antenna Space located on the roof to the extent and for the duration reasonably necessary to accommodate any Roof Work. Landlord shall notify Tenant not less than fifteen (15) business days prior to the commencement of any Roof Work. Landlord shall use commercially reasonable efforts to prevent any interference with or to the use and operation of the Permitted Equipment by Tenant during the performance of any Roof Work. In the event that Landlord desires to remodel, improve or otherwise alter the Building so as to require the relocation of the Permitted Equipment, then upon sixty (64) days prior notice to Tenant, Tenant shall cooperate with Landlord in relocating the Permitted Equipment provided that (a) such relocation is at Landlord’s expense, and (b) such relocation does not have any adverse effect on the continued operation of the Permitted Equipment.

               (d) Upon termination of this Lease, Tenant shall (a) remove all of the Permitted Equipment and any and all other equipment, fixtures and personal property of Tenant from the Antenna Space, (b) repair any damage caused by such removal, and (c) surrender the Antenna Space to Landlord free and clear of all debris.

          5.8 Furniture . In connection with Landlord’s delivery of the Premises to Tenant, Landlord shall deliver the Premises to Tenant with those certain items of moveable

furniture and furniture systems located in the office portion(s) of the Premises as of the Effective Date (collectively, “ Furniture ”). Landlord does hereby grant, sell, convey, transfer and deliver all of Landlord’s rights, title and interests in and to the Furniture to Tenant. Tenant shall accept the Furniture in its current “AS-IS,” “WHERE-IS,” condition, without any representation or warranty by Landlord, except that Landlord warrants that it has not directly encumbered the Furniture with any monetary liens. Tenant shall, at all times during the Term, at Tenant’s own expense, maintain and keep the Furniture in good order, repair and condition. Tenant shall be responsible for the removal of the Furniture upon the expiration or earlier termination of this Lease.

     6.  Maintenance, Repairs, Alterations and Additions .

          6.1 Landlord’s Maintenance Obligation .

               (a) Subject to the provisions of Section 8 and 13 below, and except for damage caused by any act or omission of Tenant, or Tenant’s employees, agents, contractors or invitees (unless such repair is of the type that would be covered by the insurance Landlord is required to maintain under this Lease in which case Tenant shall not be obligated to reimburse Landlord therefor), Landlord shall keep the foundation, roof, and structural and exterior walls of the Building in good order, condition and repair. Landlord shall not be obligated to maintain or repair any Building Systems, or any windows, doors, plate glass or the surfaces of walls within or making up any part of the Premises. Tenant shall promptly report in writing to Landlord any defective condition known to it which Landlord is required to repair at its own expense. Tenant waives the benefit of any present or future law which provides Tenant the right to repair the Premises or Property at Landlord’s expense (but Tenant shall have the self help rights provided in Section 6.1(b) below). If as a direct result of any maintenance or repair work performed by Landlord pursuant to this Section 6.1(a) or any other work performed by Landlord on or within the Premises (except in connection with the provisions of Section 6.2 below), Tenant is prevented from using and does not use the Premises or any portion thereof and (“ Abatement Event ”), Tenant shall give Landlord notice (“ Abatement Notice ”) of any such Abatement Event, and if such Abatement Event continues beyond the “Eligibility Period” (as defined below), then the Base Rent shall be abated entirely or reduced, as the case may be, after expiration of the Eligibility Period for such time that Tenant continues to be so prevented from using and does not use the Premises or a portion thereof, in the proportion that the square footage of that portion of the Premises that Tenant is prevented from using and does not use bears to the total square footage of the Premises. The term “ Eligibility Period ” shall mean a period of three (3) consecutive days after Landlord’s receipt of any Abatement Notice.

               (b) Notwithstanding anything to the contrary set forth in this Section 6.1 , if Tenant provides written notice to Landlord of the need for repairs and/or maintenance which are Landlord’s obligation to perform under Section 6.1(a) above, and Landlord fails to undertake such repairs and/or maintenance within a reasonable period of time, given the circumstances, after receipt of such notice (but in no event earlier than ten (10) days after receipt of such notice except in cases where there is an immediate threat of material and substantial property damage or immediate threat of bodily injury, in which case such shorter period of time as is reasonable under the circumstances), then Tenant may proceed to undertake such repairs and/or maintenance upon delivery of an additional three (3) business days’ notice to Landlord

that Tenant is taking such required action (or no additional notice in the event of an emergency which threatens life or where there is imminent danger to property or a possibility that a failure to take immediate action could cause a material, adverse disruption in Tenant’s normal and customary business activities). If such repairs and/or maintenance were required under the terms of this Lease to be performed by Landlord and are not performed by Landlord prior to the expiration of such three (3) business day period (or the initial notice and repair period set forth in the first sentence of this Section 6.1(b) in the event of emergencies where no second notice is required) (“ Outside Repair Period ”), then Tenant shall be entitled to reimbursement by Landlord of Tenant’s actual, reasonable, and documented costs and expenses in performing such maintenance and/or repairs. Such reimbursement shall be made within thirty (30) days after Landlord’s receipt of Tenant’s invoice of such costs and expenses, and if Landlord fails to so reimburse Tenant within such thirty (30) day period, then Tenant shall be entitled to offset against the Rent payable by Tenant under this Lease the amount of such invoice; provided, however, that notwithstanding the foregoing to the contrary, if (i) Landlord delivers to Tenant prior to the expiration of the Outside Repair Period described above, a written, reasonably particularized, objection to Tenant’s right to receive any such reimbursement based upon Landlord’s good faith claim that such action did not have to be taken by Landlord pursuant to the terms of this Lease, or (ii) Landlord delivers to Tenant, within thirty (30) days after receipt of Tenant’s invoice, a written objection to the payment of such invoice based upon Landlord’s good faith claim that such charges are excessive (in which case, Landlord shall reimburse Tenant, within such thirty (30) day period, the amount Landlord contends would not be excessive), then Tenant shall not be entitled to such reimbursement or offset against Rent, but Tenant, as its sole remedy, may notify Landlord that Tenant elects to resolve the dispute pursuant to binding arbitration under the auspices of JAMS (or any successor organization) in San Diego County, California according to the then rules for commercial arbitration for such organization. In the event Tenant undertakes such repairs and/or maintenance, and such work will affect the Building Systems, any structural portions of the Building, any areas outside the Building and/or the exterior appearance of the Building (or any portion thereof), Tenant shall use only those unrelated third party contractors used by Landlord in the Building for such work unless such contractors are unwilling or unable to perform such work at competitive prices, in which event Tenant may utilize the services of any other qualified contractor which normally and regularly performs similar work in comparable first-class office buildings located in the vicinity of the Building. Tenant shall comply with the other terms and conditions of this Lease if Tenant takes the required action, except that Tenant is not required to obtain Landlord’s consent for such repairs.

          6.2 Tenant’s Maintenance Obligations . Except as provided in Section 6.1 above, and Sections 8 and 13 below, Tenant shall keep all portions of the Premises (including systems and equipment, the Parking Area and the exterior access ways), and Building Systems in working order, condition and repair (including repainting and refinishing, as needed) during the Term. Tenant shall maintain a preventive maintenance contract providing for the regular inspection and maintenance of the heating and air conditioning system by a heating and air conditioning contractor, and such contract and contractor shall be subject to reasonable approval by Landlord. In addition, upon the date on which Landlord records the Lot Split in the Official Records of San Diego County and thereafter, except as provided in Section 6.1 above, and Sections 8 and 13 below, Tenant shall keep all portions of the 5870 Parcel (including systems and equipment, the Parking Area, the exterior access ways and landscaping) in working order,

condition and repair (including repainting and refinishing, as needed) during the Term. If any portion of the 5870 Parcel, or any system or equipment in the 5870 Parcel, that Tenant is obligated to repair cannot be repaired or restored, Tenant shall promptly replace such portion of the 5870 Parcel or system or equipment, regardless of whether the benefit of such replacement extends beyond the Term. Tenant shall fulfill all of Tenant’s obligations under this Section 6.2 at Tenant’s sole cost and expense. If Tenant shall fail to maintain, repair or make replacements to the Premises or the 5870 Parcel as required by this Section 6.2 within a reasonable period of time, given the circumstances, after receipt of notice from Landlord (but in no event earlier than ten (10) days after receipt of such notice except in cases where there is an immediate threat of material and substantial property damage or immediate threat of bodily injury, in which case such shorter period of time as is reasonable under the circumstances), Landlord may enter the Premises and perform such maintenance or repair (including replacement, as needed) on behalf of Tenant. In such case, Tenant shall reimburse Landlord for all costs reasonably incurred in performing such maintenance, repair or replacement within ten (10) business days following the payment of such costs by Landlord. Upon expiration of the Term or earlier termination of the Lease, Tenant shall surrender the Premises to Landlord with all Building Systems in working order.

          6.3 Alterations and Additions .

               (a) Tenant shall have the right to construct improvements on and within the Premises (“ Initial Alterations ”) as provided below in this Section 6.3(a) . Prior to the commencement of construction of the Initial Alterations, Tenant shall submit to Landlord for its approval (which shall not be unreasonably withheld or delayed and shall be deemed approved if Landlord does not respond within ten (10) business days after such submission) detailed construction drawings and specifications for the Initial Alterations and the identity of the general contractor selected by Tenant to construct the Initial Alterations. Landlord’s approval of the general contractor to perform the Initial Alterations shall not be considered unreasonably withheld if any such general contractor (i) does not have trade references reasonably acceptable to Landlord, (ii) does not maintain insurance as required pursuant to the terms of this Lease, (iii) does not have the ability to be bonded for the work in an amount of no less than $1,000,000.00, or (iv) is not licensed as a contractor in the State of California. Tenant shall construct or cause the construction of the Initial Alterations in full compliance with Applicable Laws, including, without limitation, all applicable building and electrical code requirements. The Allowance shall be paid to Tenant or, at Landlord’s option, to the order of the general contractor constructing the Initial Alterations, within thirty (30) days following completion of the construction of the Initial Alterations and receipt by Landlord of (1) invoices covering all labor and materials expended and used in the Initial Alterations; (2) a sworn contractor’s affidavit from the general contractor and a request to disburse from Tenant containing an approval by Tenant of the work completed; (3) unconditional lien releases from the general contractor and all subcontractors; (4) as-built drawings for the Initial Alterations (if applicable); and (5) the certification of Tenant and its architect that the Initial Alterations have been installed in a good and workmanlike manner in accordance with the approved plans, and in accordance with Applicable Laws. The Allowance shall be disbursed in the amount reflected on the invoices meeting the requirements above. Notwithstanding anything in this Lease to the contrary, Landlord shall not be obligated to disburse any portion of the Allowance during the continuance of any uncured default under the Lease, and Landlord’s obligation to disburse shall only resume when and if such default is cured.

In the event that Tenant does not use the entire Allowance for the Initial Alterations, Landlord shall pay Tenant the unused portion of the Allowance within thirty (30) days after Tenant’s request therefor (provided that each of the conditions precedent to disbursement of the Allowance have been satisfied relative to the Initial Alterations).

               (b) Except for the Initial Alterations, Tenant shall not, without Landlord’s prior written consent, make any alterations or additions in, on or to the Premises. Landlord’s consent to any such alterations or additions shall not be unreasonably withheld; provided, however, Landlord may withhold its consent in its sole and absolute discretion with respect to any additions or alterations that would affect the structural portions of the Building or any Building Systems, or which can be seen from the exterior of the Premises. Notwithstanding the foregoing, however, Tenant shall have the right to make alterations and/or additions in, on or to the Premises that do not affect the structural portions of the Building or any Building Systems and do not cost in excess of Thirty Thousand and 00/100 Dollars ($30,000.00) in each instance (“ Permitted Alterations ”), provided that (i) Tenant shall deliver notice to Landlord not less than five (5) days prior to making any such Permitted Alterations to allow Landlord to post notices of non responsibility and (ii) any such Permitted Alterations shall comply with Applicable Laws. Within thirty (30) days following the construction of any alterations and/or additions in, on or to the Premises made by Tenant pursuant to this Section 6.3(a) , Tenant shall provide Landlord with copies of “as-built” drawings for such alterations and/or additions (if applicable). In the event that such drawings are not provided to Landlord within such thirty (30) day period, Landlord shall have no obligation to repair or restore any such alterations and/or additions under this Lease in the event of any casualty to the Premises. At the expiration of the Term, Landlord may require the removal of any or all of such alterations or additions (provided Landlord so notifies Tenant of such requirement at the time of Tenant’s request for consent to such alteration or addition) and the restoration of the Premises to their prior condition (reasonable wear and tear excepted), at Tenant’s expense. Tenant shall have no obligation to remove the Initial Alterations, unless at the time of Tenant’s request for consent to the Initial Alterations, Landlord notifies Tenant that Tenant must remove any or all of the Initial Alterations. Should Landlord permit Tenant to make any alterations or additions, Tenant shall use only contractors expressly approved by Landlord (which approval shall not be unreasonably withheld and shall be deemed approved if Landlord does not respond within five (5) business days after request). Such contractors shall carry liability and such other insurance of a type and in such reasonable amounts as Landlord shall reasonably require, naming Tenant, Landlord, Landlord’s asset manager and property manager and any other party Landlord reasonably specifies as additional insureds. Before commencing the work, such contractors shall furnish Landlord with certificates of insurance evidencing such coverage. Tenant shall also maintain a policy of “builder’s risk” insurance coverage for such work naming Landlord, Landlord’s property manager and any other party Landlord reasonably specifies as additional insureds, and Tenant shall provide to Landlord a certificate evidencing such coverage prior to commencing such work. Should Tenant make any alterations or additions without the prior approval of Landlord, or use a contractor not expressly approved by Landlord, Landlord may, at any time during the Term of this Lease, require that Tenant remove any part or all of the same.

               (c) Any alterations or additions in or about the Premises that Tenant shall desire to make (other than Permitted Alterations) shall be presented to Landlord in written form, with proposed detailed plans. If Landlord consents to such alteration or addition, the

consent shall be deemed conditioned upon Tenant acquiring a permit (if required) to do so from the applicable government agencies, furnishing a copy thereof to Landlord prior to the commencement of the work, compliance by Tenant with all conditions of said permit in a prompt and expeditious manner, and compliance by Tenant with Landlord’s commercially reasonable construction rules and regulations and scheduling requirements.

               (d) Tenant shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Tenant at or for use in the Premises, which claims are or may be secured by any mechanic’s or materialmen’s lien against the Premises, the Building, or any interest therein.

               (e) Tenant shall give Landlord not less than ten (10) days notice prior to the commencement of any work in the Premises by Tenant and Landlord shall have the right to post notices of non-responsibility in or on the Premises and the Building. If Tenant, in good faith, contests the validity of any lien, claim or demand regarding the work, then Tenant shall, at its sole expense, defend itself and Landlord and its agents against the same and shall pay and satisfy any adverse judgment that may be rendered thereon before the enforcement thereof against Landlord or its agents or the Premises, the Building, upon the condition that if Landlord shall require, Tenant shall furnish to Landlord a surety bond satisfactory to Landlord in an amount equal to such contested lien claim or demand indemnifying Landlord against liability for the same and holding the Premises, the Building free from the effect of such lien or claim. In addition, Landlord may require Tenant to pay Landlord’s reasonable attorneys’ fees and costs in participating in such action if Landlord decides it is in Landlord’s best interest to participate.

               (f) All alterations and additions shall be done in a good, workmanlike, manner with good quality materials and shall be the property of Landlord and remain upon and be surrendered with the Premises at the expiration of the Term, unless Landlord requires their removal pursuant to Section 6.3(a) above. Any trade fixtures installed and paid for by Tenant may be removed by Tenant during the Term of this Lease and shall upon demand by Landlord be removed upon expiration of the Term. Tenant shall in all events promptly repair any damage caused by removal of trade fixtures. On or prior to the expiration or termination of this Lease, Tenant shall remove any and all alterations and additions that are designated by Landlord to be removed, as provided in this Section 6.3 above, at Tenant’s sole cost and expense.

               (g) Tenant shall provide Landlord with “as-built” plans and specifications for any alterations or additions (if applicable).

          6.4 Utility Additions . Tenant may install new or additional utility facilities throughout the Building, including, but not by way of limitation, such utilities as plumbing, electrical systems, communication systems, and fire protection and detection systems, so long as such installations do not have any material and adverse effect on the Building and are installed pursuant to Section 6.3 above.

          6.5 Security System . Tenant may, in accordance with Section 6 hereof and at its own expense, install its own security system (“ Tenant’s Security System ”) in the Premises; provided, however, that Tenant shall obtain Landlord’s prior consent with respect to the plans and specifications for Tenant’s Security System (which consent shall not be unreasonably

withheld, conditioned or delayed), and shall coordinate the installation and operation of Tenant’s Security System with Landlord to assure that Tenant’s Security System is reasonably compatible with the Building Systems. Tenant shall be solely responsible, at Tenant’s sole cost and expense, for the monitoring, operation, maintenance, repair, replacement and removal of Tenant’s Security System.

     7.  Insurance; Indemnity .

          7.1 Liability Insurance-Tenant . Tenant shall at Tenant’s expense, obtain and keep in force during the term of this Lease (and any period prior to the Term of the Lease during which Tenant enters the Premises to conduct any fixturization or improvement work) a policy of Commercial General Liability Insurance, or equivalent, in an amount of not less than Two Million Dollars ($2,000,000.00) per occurrence of bodily injury, personal injury and property damage combined or in a greater amount as reasonably determined by Landlord and