EXHIBIT 10.7 OFFICE LEASE AGREEMENT

EXHIBIT 10.7

OFFICE LEASE AGREEMENT

by and between

C.M. STRATPLAN, INC.,

a California corporation

(“Landlord”)

and

Spatializer Audio Laboratories, Inc.,

a Delaware corporation

(“Tenant”)

For approximately

1,288 rentable square feet

at San Jose Gateway

(“Premises”)

TABLE OF CONTENTS

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OFFICE LEASE AGREEMENT

INFORMATION SHEET

(“INFORMATION SHEET”)

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OFFICE LEASE AGREEMENT

     1.  Parties . THIS OFFICE LEASE AGREEMENT (“Lease”), effective as of the date (“Effective Date”) set forth at B of the Office Lease Agreement Information Sheet (“Information Sheet”), is entered into by and between C.M. Stratplan, Inc., a California corporation (“Landlord”), and the entity set forth in the Information Sheet at A.2. (“Tenant”).

     2.  Premises . Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, a portion of that certain Building (“Building”) in the City of San Jose, County of Santa Clara, State of California containing the total rentable floor area set forth in C.2. of the Information Sheet, as more particularly shown on EXHIBIT A (“Premises”), and located at the address, and in the suite and floor, designated on the Information Sheet at C.1 of the Information Sheet, together with a right in common to the Outside Area, as defined in Paragraph 3.K., of the Property, as defined in Paragraph 3.M. Tenant’s right to use the Outside Area shall be a right in common with other tenants of the Property and is subject to the reasonable rules and regulations and changes therein from time to time promulgated by Landlord governing the use of the Outside Area.

     3.  Definitions . The following initially capitalized terms shall have the following meanings when used in this Lease:

          A. Alterations . Any alterations, additions or improvements made in, on or about the Building or the Premises after the Commencement Date, including, but not limited to, lighting, heating, ventilating, air conditioning, electrical, telecommunication cabling, partitioning, drapery and carpentry installations.

          B. Building . That certain building on the Property, commonly known as 2025 Gateway Place, San Jose, California 95110, containing an aggregate rentable area in the approximate amount set forth in the Information Sheet at C.1.d.

          C. CC&R’s . The Declaration of Covenants, Conditions, Restrictions and Easements dated May 25, 1972 established by Dillingham Development Company and recorded on June 2, 1972 in Book 9862 at page 57 et. Seq., of the official records of Santa Clara County, California, as they may be amended from time to time. Tenant hereby acknowledges that it has received and read a copy of the present CC&R’s.

          D. City . The City of San Jose, State of California.

          E. Commencement Date . The Commencement Date of this Lease shall be the first day of the Lease Term determined in accordance with Paragraph 4.B.

          F. County . The County of Santa Clara, State of California.

          G. HVAC . Heating, ventilating and air conditioning.

          H. Interest Rate . Interest Rate shall have the meaning set forth in Paragraph 43.

          I. Landlord’s Agents . Landlord’s authorized agents, together with any partners and any subsidiary, parent, and affiliate corporations of Landlord, and any directors, officers, shareholders and employees of Landlord or of any such agents, partners, or subsidiary, parent or affiliate corporations.

          J. Monthly Rent . The rent payable pursuant to Paragraph 5.A., as adjusted from time to time pursuant to the terms of this Lease.

          K. Outside Area . All areas and facilities within the Property, but outside the Building, as defined in Paragraph 3.M., provided and designated by Landlord for the general use and convenience of Tenant and other tenants and occupants of the Building, including, without limitation, the parking areas, access and perimeter roads, sidewalks, landscaped areas, service areas, trash disposal facilities, and similar areas and facilities, and the exterior walls and windows of the Building, subject to the reasonable rules and regulations and changes therein from time to time promulgated by Landlord governing the use of the Outside Area.

          L. Project . The Property, Building (including the Premises), and Outside Area.

          M. Property . That certain real property, described in EXHIBIT B and consisting of approximately five and seven hundred and forty-four hundredths (5.744) acres, upon which is located the Building .

          N. Real Property Taxes . Any form of assessment, license, fee, rent tax, levy, interest or penalty (if a result of Tenant’s delinquency), or tax (other than net income, estate, succession, inheritance, transfer or franchise taxes), imposed by any authority having the direct or indirect power to tax, or by any city, county, state or federal government or any improvement or other district or division thereof, whether such tax is: (i) determined by the value or area of the Project or any part thereof (or any improvements now or hereafter made to the Project or any portion thereof by Landlord, Tenant or other tenants) or the rent and other sums payable hereunder by Tenant or by other tenants, including, but not limited to, any gross income or excise tax levied by any of the foregoing authorities with respect to receipt of such rent or other sums due under this Lease; (ii) upon any legal or equitable interest of Landlord in the Project or any part thereof; (iii) upon this transaction or any document to which Tenant is a party creating or transferring any interest in the Project; (iv) levied or assessed in lieu of, in substitution for, or in addition to, existing or additional taxes against the Project whether or not now customary or within the contemplation of the parties; (v) assessed for the purpose of constructing or maintaining or reimbursing the cost of construction of any streets, utilities or other public improvements; (vi) surcharged against the parking area; or (vii) levied upon any personal property of Landlord, Tenant or other tenants located on or used exclusively in connection with the operation of the Project.

          O. Rent . Monthly Rent plus any other amounts payable by Tenant under this Lease.

          P. Sublet . Any assignment or transfer of any estate or interest in this Lease; any subletting or parting with or sharing of the occupation, control, or possession of the Premises, or of any part thereof or any right or privilege appurtenant thereto; allowing anyone to conduct business at or from the Premises (whether as concessionaire, franchisee, licensee, permittee, subtenant or otherwise); if Tenant is a corporation, any transfer of the effective voting control of Tenant; if Tenant is a partnership, the resignation, death or the cessation of existence of a general partner; if Tenant is composed of more than one person or entity, any purported transfer from one to one or any more of the others composing Tenant or to any other person; any other transfer by voluntary or involuntary act or by operation of law (including by merger or consolidation); or any attempt to do any of the foregoing.

          Q. Subrent . Any consideration of any kind received, or to be received, by Tenant from a subtenant if such sums are related to Tenant’s interest in this Lease or in the Premises, including, but not limited to, bonus money and payments (in excess of fair market value) for Tenant’s assets including its trade fixtures, equipment and other personal property, goodwill, general intangibles, and any capital stock or other equity ownership of Tenant.

          R. Subtenant . The person or entity with whom a Sublet agreement is proposed to be or is made.

          S. Tenant Improvements . Those certain improvements to the Premises to be constructed by Landlord pursuant to EXHIBIT C .

          T. Tenant’s Agents . Tenant’s agents, employees, officers, directors, invitees or licensees.

          U. Tenant’s Property Percentage . The percentage determined by dividing the approximate rentable square footage of the Premises by the approximate total rentable square footage of the Building. Tenant’s Property Percentage is currently agreed to be the percentage set forth in C.5. of the Information Sheet, subject to adjustment as a result of a remeasurement of the Premises and/or the Building by Landlord pursuant to Paragraph 46.G.

          V. Tenant’s Personal Property . Tenant’s trade fixtures, furniture, equipment and other personal property in the Premises.

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          W. Term . The term of this Lease set forth in Paragraph 4.A., as it may be extended hereunder pursuant to any options to extend granted herein or by any written amendments to or extensions of this Lease.

     4.  Lease Term .

          A. Term . The Term shall be a period set forth at C.3. of the Information Sheet, commencing on the Commencement Date, as defined below, and ending 5:00 p.m. on the last day of such period, unless the Term is sooner terminated as hereinafter provided.

          B. Commencement Date . Commencement Date shall be defined to mean the earliest to occur of the following, as determined by Landlord:

               (i) the date Tenant commences occupancy of any portion of the Premises; or

               (ii) the Estimated Commencement Date specified in the Information Sheet at C.4.

     If, for any reason, Landlord cannot deliver possession of the Premises to Tenant by the Estimated Commencement Date, Landlord shall not be subject to any liability therefor, nor shall such failure affect the validity of this Lease or the obligations of Tenant hereunder; but in such case, Tenant shall not be obligated to pay any Monthly Rent hereunder, subject to the provisions contained in Paragraph 4.D., until the date that Landlord gives Tenant notice that all work for the Tenant Improvements to be constructed or performed pursuant to EXHIBIT C has been substantially completed (which date shall then be deemed the Commencement Date).

          C. Commencement Date Memorandum . When the actual Commencement Date is determined, the parties shall execute a Commencement Date Memorandum, in the form attached hereto as EXHIBIT D , setting forth the date.

          D. Tenant Delays . If the Commencement Date of this Lease has not occurred on or before the Estimated Commencement Date, and if the cause of any delay in the occurrence of the Commencement Date is attributable to Tenant, then commencing on such date as the Commencement Date would have occurred but for any delay attributable to Tenant, and continuing on the first day of each calendar month thereafter until the Commencement Date, Tenant shall pay to Landlord the Monthly Rent set forth in Paragraph 5. Payments for any partial month shall be prorated on the basis of a thirty (30) day month. Delays attributable to Tenant shall include those caused by:

               (i) Tenant’s change requests in the space plan or the Plans for Tenant Improvements attached as EXHIBIT C-1 after their approval by Landlord;

               (ii) Tenant’s failure to complete any of its own improvement work to the extent Tenant delays completion by the City of its final inspection and approval of the Tenant Improvements described in EXHIBIT C ;

               (iii) Tenant’s failure to approve cost estimates if such approvals are required pursuant to EXHIBIT C ; or

               (iv) Interference with Landlord’s work caused by Tenant or by Tenant’s contractors or subcontractors.

          E. Early Entry . Landlord gives permission for Tenant to enter the Premises six weeks prior to the Commencement Date for the purpose of fixturing or any other purpose permitted by Landlord, such early entry shall be at Tenant’s sole risk and subject to all the terms and provisions hereof, except for the payment of Monthly Rent which shall commence on the date set forth in Paragraph 4.B. Landlord shall have the right to impose such additional conditions on Tenant’s early entry as Landlord shall deem appropriate.

          F. Termination . Either party, at its option, may terminate this Lease by giving written notice of its election to terminate to the other party if the Commencement Date has not occurred on or before one hundred twenty (120) days after the Estimated Commencement Date specified in the Information Sheet at C.4. through no fault of the terminating party.

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     5.  Rent .

          A. Monthly Rent . In advance, on or before the first day of each calendar month, without prior notice or demand, deduction or offset, Tenant shall pay monthly rent (“Monthly Rent”) to Landlord, in lawful money of the United States at the Office of the Property Manager specified in the Information Sheet at C.11., or to such other place or person as Landlord may designate in the manner set forth in Paragraph 30. Monthly Rent shall consist of the sum of the following:

               (i)  Base Rent . Base Rent (“Base Rent”) in the amount specified at C.6. of the Information Sheet (subject to adjustment as provided for at C.9 of the Information Sheet); and

               (ii)  Monthly Operating Expense Reimbursement . Monthly Operating Expense Reimbursement (“Monthly Operating Expense Reimbursement”) equal to one twelfth (1/12) of Tenant’s Property Percentage of the amount by which Landlord’s estimate of the Operating Expenses for the relevant calendar year of the Term exceed the Base Year Operating Expenses, as such terms are defined in Paragraph 15.

          B. Prorations . If the Commencement Date is not the first (1st) day of a month, or if the termination date is not the last day of a month, a prorated monthly installment based on a thirty (30) day month shall be paid for the fractional month during which this Lease commences or terminates.

     6.  Late Payment Charges . TENANT ACKNOWLEDGES THAT LATE PAYMENT BY TENANT TO LANDLORD OF RENT AND OTHER CHARGES PROVIDED FOR UNDER THIS LEASE WILL CAUSE LANDLORD TO INCUR COSTS NOT CONTEMPLATED BY THIS LEASE, THE EXACT AMOUNT OF SUCH COSTS BEING EXTREMELY DIFFICULT OR IMPRACTICABLE TO FIX. THEREFORE, IF ANY INSTALLMENT OF RENT OR ANY OTHER CHARGE DUE FROM TENANT IS NOT RECEIVED BY LANDLORD WITHIN FIVE DAYS OF THE DATE DUE, TENANT SHALL PAY TO LANDLORD AN ADDITIONAL SUM EQUAL TO FIVE PERCENT (5%) OF THE AMOUNT OVERDUE AS A LATE CHARGE. THE PARTIES AGREE THAT THIS LATE CHARGE REPRESENTS A FAIR AND REASONABLE ESTIMATE OF THE COSTS THAT LANDLORD WILL INCUR BY REASON OF THE LATE PAYMENT BY TENANT. SUCH LATE CHARGE SHALL BE IN ADDITION TO, AND NOT IN LIEU OF, ANY INTEREST THAT MAY ACCRUE ON ANY SUCH OVERDUE AMOUNT PURSUANT TO THE PROVISIONS OF PARAGRAPH 43.

     7.  Security Deposit . By execution hereof, Landlord acknowledges receipt of the sum set forth at C.7. of the Information Sheet from Tenant, as security for the faithful performance by Tenant of all of the terms and conditions of this Lease to be kept and performed by Tenant during the term hereof (“Security Deposit”). The Security Deposit shall secure Tenant’s obligations hereunder to pay rent and all other sums due to Landlord hereunder, to maintain the Premises and repair damages thereto as provided in this Lease, to surrender the Premises to Landlord in clean condition and good repair upon termination of this Lease and timely to discharge Tenant’s other obligations hereunder. Landlord may use and commingle the Security Deposit with other funds of Landlord. If Tenant fails to perform its obligations hereunder, then Landlord may, but without any obligation so to do, apply all or any portion of the Security Deposit toward fulfillment of Tenant’s unperformed obligations. If Landlord does so apply any portion of the Security Deposit, Tenant, upon demand by Landlord, shall immediately pay to Landlord a sufficient amount in cash to restore the Security Deposit to its full original amount. On termination of this Lease, if Tenant has then fully performed all its obligations hereunder, Landlord shall return the Security Deposit to Tenant. If Landlord, prior to the expiration of the term of this Lease, sells or otherwise transfers Landlord’s rights or interest under this Lease, Landlord may deliver the Security Deposit to the transferee, whereupon, Landlord shall have no further liability to Tenant concerning the Security Deposit.

     8.  Holding Over . If Tenant remains in possession of all or any part of the Premises after the expiration of the Term, with the consent of Landlord, such tenancy shall be from month-to-month only and not a renewal hereof or any extension for any further term, and in such case, Base Rent shall be increased to an amount equal to one hundred fifty percent (150%) of the Base Rent paid during the last

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month of the Term and all other sums due hereunder shall be payable in the amount and at the time applicable at the time of expiration and at the time specified in this Lease and such month-to-month tenancy shall be subject to every other term, covenant and agreement of this Lease.

     9.  Tenant Improvements . Landlord and Tenant agree to the terms and procedures for the planning, construction and funding of the construction of the Tenant Improvements as set forth in EXHIBIT C .

     10.  Condition of Premises . Within ten (10) days after the Commencement Date, Tenant and Landlord shall conduct a walk- through inspection of the Premises with Landlord and jointly prepare and sign a final punch-list of items needing additional work by Landlord. Other than the items specified in the punch-list, by taking possession of the Premises, Tenant shall be deemed to have accepted the Premises in “As Is” condition as improved with the Tenant Improvements in good, clean and completed condition and repair, subject to all applicable laws, codes and ordinances. The punch-list to be prepared by Tenant shall not include any damage to the Premises caused by Tenant’s move-in, which damage shall be repaired or corrected by Tenant, at its expense. Tenant acknowledges that neither Landlord nor Landlord’s Agents have made any representations or warranties as to the suitability or fitness of the Premises or any other part of the Project (including, without limitation, the interbuilding network cabling) for the conduct of Tenant’s business or for any other purpose, nor has Landlord or Landlord’s Agents agreed to undertake any Alterations or construct any Tenant Improvements to the Premises except as expressly provided in this Lease. If Tenant fails to submit a punch-list to Landlord within the ten (10) day period, it shall be deemed that there are no items needing additional work or repair. Landlord’s contractor shall complete all reasonable punch-list items within thirty (30) days after the walk-through inspection or as soon as practicable thereafter. Upon Landlord or Landlord’s contractor’s indication to Tenant of the completion of such punch-list items, Tenant shall acknowledge the completion of such items in writing to Landlord. If Tenant fails either to so acknowledge the completion of such items within seven (7) days of such stated completion or within such seven day period to specify in writing to Landlord in reasonable detail any such previously listed punch-list items that remain uncompleted, all such items shall be deemed approved by Tenant.

     11.  Use of the Premises .

          A. Tenant’s Use . Tenant shall use the Premises solely for general office purposes and shall not use the Premises for any other purpose without obtaining the prior written consent of Landlord. Tenant agrees that the Property is subject and this Lease is subordinate to the CC&R’s. Tenant acknowledges that it has read the CC&R’s and knows the contents thereof. Throughout the Term, Tenant shall faithfully and timely perform and comply with the CC&R’s and any modification or amendments thereof. Tenant shall comply with all duly adopted rules, regulations and restrictions as may be adopted from time to time by any committee established pursuant to the CC&Rs (“Association”). Any periodic or special dues or Outside Area assessments of the Association shall be included within the definition of Operating Expenses pursuant to Paragraph 15.B. and Tenant shall pay Tenant’s Property Percentage of such amounts over the Base Year amounts as further set forth in Paragraph 15. Tenant shall defend, indemnify and hold Landlord, and Landlord’s Agents free and harmless from and against any claim, loss, liability, expense or damage, including attorneys’ fees and costs, arising out of the actual or asserted failure of Tenant to perform or comply with the CC&R’s. Tenant shall not permit or make any use of the Premises which will increase the existing rate of insurance upon the Project, or cause the cancellation of any insurance policy covering the Project, or any part thereof. If the existing rate of insurance shall be increased or any insurance policy covering the Project canceled as a result of Tenant’s or Tenant’s Agent’s acts or omissions, then Landlord, in addition to such remedies as Landlord may have under this Lease or pursuant to law or equity, shall be entitled to reimbursement from Tenant upon written demand therefor for the entire amount of said increase or any additional amount which must be paid for a new insurance policy.

          B. Compliance . Tenant shall not use the Project or suffer or permit Tenant’s Agents to do anything in or about the Project in conflict with any law, statute, zoning restriction, ordinance or governmental law, rule, regulation or requirement of duly constituted public authorities now in force or which may hereafter be in force, or the requirements of the Board of Fire Underwriters or other similar body now or hereafter constituted relating to or affecting the condition, use or occupancy of the Project. Tenant shall continuously and uninterruptedly conduct its business in the Premises during the Term and shall not vacate or abandon the Premises. Tenant shall not commit any public or private nuisance or any other act or practice which might or would disturb the quiet enjoyment of any other tenant of Landlord or any occupant of nearby properties. Tenant shall place no loads upon the floors,

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walls or ceilings in excess of the maximum designed load determined by Landlord or which endanger the structure; nor place any harmful liquids in the drainage systems; nor dump or store waste materials or refuse or allow such to remain outside the Building proper, except in the enclosed trash areas provided. Tenant shall not store or permit to be stored or otherwise placed any material of any nature whatsoever outside the Building. If as a result of any use or change in use of the Premises by Tenant or any Alteration made to the Premises by or on behalf of Tenant, any alterations are required to the Premises, the Building or the Project (including, but not limited to, the Americans with Disabilities Act, and any state or local building, fire or safety codes, ordinances or regulations), Tenant shall be responsible for the same (or at the election of Landlord, for reimbursing Landlord for the cost of performing the same).

          C. Toxic Material . Tenant, at its sole cost, shall comply with and cause Tenant’s Agents to comply with all laws relating to the storage, use and disposal of hazardous, toxic or radioactive matter, including those materials identified in Sections 66680 through 66685 of Title 22 of the California Administrative Code, Division 4, Chapter 30 (“Title 22”) as they may be amended from time to time (collectively, “Toxic Materials”). If Tenant or Tenant’s Agents desire to store, use or dispose of any Toxic Materials in, on or about the Premises (other than the storage and use of reasonable quantities of customary office supplies), Tenant shall first request and obtain Landlord’s approval to such proposed storage, use or disposal in writing, which request must be made at least ten (10) days prior to the storage, use or disposal thereof in, on or about the Premises. Whether or not Landlord is aware or approves of the storage, use or disposal of any Toxic Material by Tenant or Tenant’s Agents, Tenant shall be solely responsible for and shall defend, indemnify and hold Landlord and Landlord’s Agents harmless from and against all claims, costs and liabilities, including attorneys’ fees and costs, arising out of or in connection with the storage, use, generation, transportation, disposal or release of Toxic Materials by Tenant or Tenant’s Agents, including without limitation, any such claims, costs, damages and liabilities (including attorneys’ fees and costs) arising out of or in connection with any investigation, testing, remediation, removal, clean-up and/or restoration services, work, materials and equipment necessary to return the Premises and any other property of whatever nature to their condition existing prior to the storage, use, generation, transportation, disposal or release of Toxic Materials by Tenant or Tenant’s Agents in, on or about the Premises or the Project, and to otherwise satisfactorily investigate and remediate the contamination arising therefrom to the satisfaction of Landlord and all governmental authorities. If at any time during or after the term of this Lease, as it may be extended, Tenant becomes aware of any injury, investigation, administrative proceeding, or judicial proceeding regarding the storage, use or disposition of any Toxic Materials by Tenant or Tenant’s Agents on or about the Premises or the Project, Tenant shall within five (5) days after first learning of such injury, investigation or proceeding give Landlord written notice advising Landlord of same.

          D. Transportation Systems Management . Tenant shall comply with the requirements of the City or County mandated parking or transportation systems management ordinances.

          E. Rules and Regulations . The Rules and Regulations for the Project in effect as of the Effective Date are attached hereto as EXHIBIT E . Landlord reserves the right to adopt or amend the Rules and Regulations from time to time in its reasonable discretion. Tenant agrees that Tenant, its employees and agents and, to the extent Tenant can require the same, its invitees and others over whom Tenant can reasonably be expected to exercise control, shall observe and perform the Rules and Regulations as they may be amended or adopted. A breach of the Rules and Regulations by Tenant or such persons shall constitute a default under this Lease as if the Rules or Regulations were contained in this Lease as covenants of the Tenant. Tenant acknowledges that Landlord has no obligation to enforce, and shall have no liability for non-enforcement of, the Rules and Regulations. The Rules and Regulations shall be consistent with the terms of the Lease.

     12.  Quiet Enjoyment . Landlord covenants that Tenant, upon performing the terms, covenants and conditions of this Lease, shall have quiet and peaceful possession of the Premises as against any person claiming the same by, through or under Landlord.

     13.  Alterations . Tenant shall not make or permit any Alterations in, on or about the Premises without the prior written consent of Landlord, and according to plans and specifications approved in writing by Landlord, which consent shall not be unreasonably withheld. Landlord, at its sole option, may, however, require as a condition to the granting of any such consent, that Tenant provide to Landlord, at Tenant’s sole cost and expense, a lien and completion bond in an amount equal to one and one-half (1 ¹ / 2 ) times any and all estimated costs of any intended improvements to the Premises, to insure Landlord against any liability for mechanics’ and materialmen’s liens and to insure completion of the work. Tenant shall, at its sole cost and expense, obtain all necessary permits and governmental

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inspections and approvals required in connection with any Alterations. All Alterations shall be installed at Tenant’s sole expense, in compliance with all applicable laws (including, but not limited to, The Americans With Disabilities Act, and any state or local building, fire or safety codes, ordinances or regulations), the Rules and Regulations and the CC&R’s, by a licensed contractor reasonably acceptable to Landlord, shall be done in a good and workmanlike manner conforming in quality and design with the Premises existing as of the Commencement Date, and shall not diminish the value of the Project. In the event that any Alteration made by Tenant necessitates the making of other alterations to the interior or exterior of the Building, the Outside Area or elsewhere within the Project for purposes of complying with applicable laws (including, but not limited to, The Americans With Disabilities Act, and any state or local building, fire or safety codes, ordinances or regulations), Tenant shall undertake such additional alterations at its sole cost and expense or shall, at Landlord’s option, reimburse Landlord for the cost and expenses incurred with respect to such additional alterations required for purposes of complying with applicable law as a result of Tenant’s Alterations. All Alterations made by Tenant shall be and become the property of Landlord upon installation and shall not be deemed Tenant’s Personal Property; provided, however, that Landlord may, at its option, require that Tenant, at Tenant’s expense, remove any or all Alterations installed by Tenant and return the Premises to their condition as of the Commencement Date of this Lease, normal wear and tear excepted and subject to the provisions of Paragraph 25. Notwithstanding any other provisions of this Lease, Tenant shall be solely responsible for the maintenance and repair of any and all Alterations made by it to the Premises. Tenant shall give Landlord written notice of Tenant’s intention to perform any work on the Premises at least twenty (20) days prior to the commencement of such work to enable Landlord to post and record an appropriate Notice of Nonresponsibility or other notice deemed proper before the commencement of any such work.

     14.  Surrender of the Premises . Upon the expiration or earlier termination of the Term, Tenant shall surrender the Premises to Landlord in its condition existing as of the Commencement Date, normal wear and tear and fire or other insured casualty for which Tenant is not otherwise obligated under the provisions of Paragraph 18. to repair excepted, with all interior areas cleaned. Tenant shall prior to the expiration or termination of the Term remove from the Premises all of Tenant’s Alterations required to be removed pursuant to Paragraph 13., and all Tenant’s Personal Property and repair any damage and perform any restoration work caused or necessitated by any such removal. If Tenant fails to remove such Alterations and Tenant’s Personal Property, and such failure continues after the termination of this Lease, Landlord may retain such property and all rights of Tenant with respect to it shall cease, or Landlord may place all or any portion of such property in public storage for Tenant’s account. Tenant shall be liable to Landlord for costs of removal of any such Alterations and Tenant’s Personal Property and storage and transportation costs of same, and the cost of repairing and restoring the Premises, together with interest at the Interest Rate from the date of expenditure by Landlord until paid.

     15.  Operating Expenses .

          A. Payment by Tenant . During the term of this Lease, Tenant shall pay to Landlord, as rent on a monthly basis as set forth in Paragraph 5.A., one-twelfth (1/12) of Tenant’s Property Percentage of the amount by which Landlord’s estimate of the Operating Expenses for each calendar year during the Term (after the Base Year) are estimated by Landlord to exceed the Operating Expenses incurred by Landlord for the Base Year, as such Base Year is specified at C.8. of the Information Sheet (“Base Year Operating Expenses”).

          B. Operating Expenses . The term “Operating Expenses” shall mean all expenses, costs and disbursements (but not capital investment items except as otherwise expressly provided below, or specific costs especially billed to and paid by specific tenants) of every kind and nature which Landlord shall pay or become obligated to pay because of or in connection with the ownership, maintenance, repair or operation of the Project and such additional building or Outside Area facilities in subsequent years as may be determined by Landlord to be necessary or appropriate. Operating Expenses shall include, but not be limited to, the following:

               (i) Wages and salaries of all employees engaged in the operation, maintenance and security of the Project, including taxes, insurance and benefits relating thereto; and the rental cost and overhead of any office and storage space used to provide such services;

               (ii) All supplies and materials used in operation, repair and maintenance of the Project;

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               (iii) Cost of all utilities, including surcharges, for the Project, including the cost of water, sewer, gas, power, heating, lighting, air conditioning and ventilating for the Project;

               (iv) Cost of all maintenance and service agreements for the Project and the equipment thereon, including but not limited to, security and energy management services, window cleaning, floor waxing, elevator maintenance, janitorial service, engineers, gardeners, and trash removal services;

               (v) Cost of all insurance which Landlord or Landlord’s lender deems necessary or appropriate for the Project such as the cost of “All-Risk” property insurance including, at Landlord’s option, earthquake and flood coverage, insurance against loss of rents on an “All-Risk” basis, and a lender’s loss payable endorsement in favor of any lenders with respect to the Project, and naming Landlord and such lenders as insureds; and casualty and liability insurance applicable to the Building, Property and Outside Area and Landlord’s personal property used in connection therewith, naming Landlord and Landlord’s Agents as named or additional insureds;

               (vi) Cost of repairs and general maintenance (excluding repairs and general maintenance to the extent then paid by proceeds of insurance or other third parties);

               (vii) A five percent (5%) management fee for the management of the Project (which management may be provided either by Landlord, affiliates of Landlord and/or by third parties) (the “Management Fee”);

               (viii) The costs of any additional services not provided to the Project at the Commencement Date but thereafter provided by Landlord in its management of the Building, Property or Outside Area;

               (ix) The cost of any capital improvements (including interest) made to the Project after September 1, 1997 that are intended to reduce other Operating Expenses or are required under any governmental law or regulation, or which enhance in any material respect the general appearance or use of the Project or any portion thereof, such cost thereof to be amortized with interest at a reasonable rate over the period Landlord reasonably determines to be the useful life of the capital improvement, consistent with applicable governmental requirements and generally accepted accounting principles;

               (x) Real property taxes, as that term is defined in Paragraph 16;

               (xi) Assessments, dues and other amounts payable pursuant to the CC&R’s, including any and all assessments and dues of the Association; provided, however, that Landlord may elect that Tenant pay directly any such assessments or dues relating to any particular uses of the Project made by Tenant or arising out of any actions of Tenant or Tenant’s Agents; and

               (xii) Maintenance and repair costs for interbuilding network cabling.

     The cost of additional or extraordinary services provided to Tenant and not paid or payable by Tenant pursuant to other provisions of this Lease shall be payable by Tenant and may be included by Landlord as part of the Operating Expenses payable by Tenant on a monthly basis or may be billed to Tenant separately, in a lump sum, as Landlord shall elect.

     Operating Expenses shall not include:

          (a) the cost of any additional or extraordinary services provided to other tenants of the Building;

          (b) costs paid for directly by Tenant;

          (c) principal and interest payments on loans secured by deeds of trust recorded against the Project;

          (d) real estate sales or leasing brokerage commissions; or

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          (e) executive salaries of off-site personnel employed by Landlord except for the charge (or pro rata share) of the manager of the Project (which manager’s salary is not included within the Management Fee).

          C. Adjustment .

               (i)  Projected Increases . Prior to or at any time after the commencement of each calendar year during the Term following the Base Year, Landlord may provide Tenant with notice of Landlord’s estimate of the amount by which the then current year’s Operating Expenses are projected, if at all, to exceed the Base Year Operating Expenses (the “Projected Increase in Operating Expenses”). Tenant shall thereafter during such year pay adjusted Monthly Rent which shall include as the Monthly Operating Expense Reimbursement an amount equal to one-twelfth (1/12) of Tenant’s Property Percentage multiplied by any Projected Increase in Operating Expenses.

               (ii)  Accounting . Within ninety (90) days (or as soon thereafter as possible) after the close of each calendar year after the Base Year, Landlord shall provide Tenant a statement of (a) such year’s actual Operating Expenses, (b) the Base Year Operating Expenses, (c) the amount, if any, by which the actual Operating Expenses exceed the Base Year Operating Expenses (the “Actual Increase in Operating Expenses”), (d) the amount equating to Tenant’s Property Percentage of any Actual Increase in Operating Expenses and (e) the sum of any amounts theretofore paid by Tenant as Monthly Operating Expense Reimbursements pursuant to Paragraph 5.A. with respect to such year. If the amount set forth in clause (d) above exceeds the amount set forth in clause (e) above, Tenant shall pay the amount of such excess to Landlord within ten (10) days of receipt of such statement, which obligation shall survive the expiration or earlier termination of its Term of the Lease. If the amount set forth in clause (e) above exceeds the amount set forth in clause (d) above, Landlord shall credit the amount of such excess against the next accruing payment(s) of Monthly Operating Expense Reimbursements or reimburse Tenant for same if this Lease has terminated prior to the date such determination is made.

               (iii)  Proration . Tenant’s liability to pay Tenant’s Property Percentage of Operating Expenses in excess of Base Year Operating Expenses shall be prorated on the basis of a 365-day year to account for any fractional portion of a year included at the commencement or expiration of the term of this Lease.

               (iv)  Not Fully Occupied . Notwithstanding any other provision to the contrary, it is agreed that if the Building, in total, is less than ninety-five percent (95%) occupied during all or any portion of any calendar year, an adjustment shall be made in calculating the Operating Expenses for the Project for such year so that Tenant’s Percentage of Operating Expenses in excess of the Base Year Operating Expenses shall be equivalent to the Operating Expenses calculated as though the Building, in total, had been ninety-five percent (95%) occupied during the entirety of such year.

               (v)  Survival . Landlord and Tenant’s obligation to pay for or credit any increase or decrease in payments pursuant to this Paragraph shall survive the expiration or termination of the Term of this Lease.

          D. Failure to Pay . Failure of Tenant to pay any of the charges required to be paid under this Paragraph 15. shall constitute a breach of this Lease and Landlord’s remedies shall be as specified in Paragraph 28.B.

     16.  Taxes and Assessments .

          A. Payment by Tenant . Except as provided for in Paragraph 16.C., Real Property Taxes for the Project shall be included within Operating Expenses pursuant to Paragraph 15.B.

          B. Annual Assessments . With respect to any taxes or assessments which may be levied against or upon the Project, or which under the laws then in force may be evidenced by improvement or other bonds or may be paid in annual installments, only the amount of such annual installment (with appropriate proration for any partial year) and interest due thereon shall be included within the computation of the annual taxes and assessments levied against the Project.

          C. Taxes Levied Against Tenant’s Alterations and Personal Property . In addition to Tenant’s obligation to pay its Property Percentage of Operating Expenses over Base Year Operating Expenses as provided in Paragraphs 15. and 16.A., (i) Tenant shall be responsible for and shall

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pay to the taxing authority prior to delinquency to the extent Tenant is billed directly, all Real Property Taxes assessed with respect to or against Tenant, or any Alterations, improvements, fixtures, equipment, facilities, furniture or other Personal Property owned by Tenant or placed, installed or located within, upon or about the Premises by Tenant or at Tenant’s direction (collectively “Personal Property Taxes”), and (ii) to the extent any Personal Property Taxes are billed to Landlord and Landlord elects not to include such Personal Property Taxes in Operating Expenses, Tenant shall be responsible for and shall pay to Landlord within ten (10) days after notice from Landlord, the amount of such Personal Property Taxes so billed to Landlord. Tenant shall provide Landlord with evidence of Tenant’s payment of the same upon Landlord’s request.

          D. Failure to Pay . Failure of Tenant to pay any of the charges required to be paid under this Paragraph 16. shall constitute a breach of this Lease and Landlord’s remedies shall be as specified in Paragraph 28.B.

     17.  Utilities and Services . Landlord agrees to provide the utilities and services to the Premises on the terms more specifically set forth in EXHIBIT F . Landlord shall not be liable in damages or otherwise for any failure or interruption of any utility service or other service furnished to the Premises. Tenant shall be responsible for payment of all utility and other services provided during other than normal business hours for the Building, as reasonably determined by Landlord.

     18.  Repair and Maintenance .

          A. Premises, Building and Outside Area .

               (i)  Maintenance and Repair . Except as provided in this subparagraph (i), Tenant, at all times during the Term and at Tenant’s sole cost and expense, shall keep the Premises and every part thereof (including all fixtures and equipment located therein or exclusively servicing the Premises) in good condition and repair, normal wear and tear and damage for which Landlord is otherwise required to repair pursuant to Paragraph 25 of this Lease excepted. Landlord shall be responsible for maintaining and repairing (a) the structural parts of the Building, which structural parts include only the foundation, roof and subflooring of the Premises, the basic plumbing, heating, ventilating, air conditioning and electrical systems installed or furnished by Landlord, and (b) the Outside Area, except for any damage to Premises, Building or Outside Area caused by the negligence or willful acts or omissions of Tenant or of Tenant’s Agents, or by reason of the failure of Tenant to perform or comply with any terms, conditions or covenants in this Lease, or caused by Alterations made by Tenant or by Tenant’s Agents, which shall be Tenant’s responsibility. Except as otherwise provided in Paragraph 15.B., all costs of repair and maintenance of the Project shall be included in Operating Expenses.

               (ii)  Notice of Repairs Needed . Landlord shall not be liable for any failure to make any of the repairs or to perform any maintenance unless the failure shall persist for an unreasonable time after written notice of the need of the repairs or maintenance is given to Landlord by Tenant.

               (iii)  No Abatement . 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, or maintenance of, any portion of the Project, or any fixtures, appurtenances and equipment therein.

          B. Control and Reconfiguration . Landlord shall at all times have exclusive control of the Building (other than the Premises) and the Outside Area and may at any time temporarily close any part thereof and exclude and restrain anyone from any part thereof, and may change the design configuration or location of the Building or the Outside Area. In exercising any such rights, Landlord shall make a reasonable effort to minimize any disruption of Tenant’s business. Landlord shall have the right to reconfigure the parking area and ingress to and egress from the parking area, and to modify the directional flow of traffic in the parking area. Landlord shall further have the right to enter upon the Premises, upon the giving of the notice provided in Paragraph 21., for the purpose of installing, maintaining, repairing, adjusting and making connections to any utilities (including but not limited to plumbing, HVAC, electrical, telephone, cable TV, and computer wiring) serving the Premises or other spaces in the Building or for gaining access to the structural portions of the Building and making alterations thereto for the bene