Exhibit 10.14

FOURTH AMENDMENT TO LEASE AGREEMENT
PARCELS 3, 4 AND 8 PARCEL MAP NO. 16960
(July 17, 1985)

THIS FOURTH AMENDMENT TO LEASE AGREEMENT OF JULY 17, 1985 (“Fourth Amendment”)
is entered into this 20th day of June, 2002, pursuant to Ordinance No. C-7795
adopted by the City Counsel of the City of Long Beach on the 2nd day of April
2002 (“Ordinance”), by and between the CITY OF LONG BEACH, a municipal
corporation (“Landlord”) and KILROY REALTY, L.P., a Delaware limited partnership
(“Kilroy Realty, L.P.”), successor-in-interest to KILROY LONG BEACH ASSOCIATES,
a California limited partnership (“KLBA”), hereinafter referred to as
“Developer”.

RECITALS

A.On July 17, 1985, a lease was entered into between Landlord and Developer
(“Lease”), which demised to Developer the Real Property described in Exhibit A
to the Lease.

B.    On July 22, 1988, Parcel Map No. 16960 was recorded in Book 208, Pages
92-100 of Parcel Maps in the Office of the County Recorder, Los Angeles County,
State of California.

C.    On January 24, 1989, the Lease was amended and subdivided by a First
Amendment to Lease in accordance with Subsection 7.6 of the Lease in order to
establish three (3 separate ground leases between Landlord and Developer, as
follows:

Parcels 1 and 2 - Phase 1 of the development of Parcel Map No. 16960

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Parcels 5 and 6 – Phase 2 of the development of Parcel Map No. 16960

Parcels 3, 4 and 8 - Phase 3 of the development of Parcel Map No. 16960

D.    On December 29, 1990, the Lease for Parcels 3, 4 and 8 was further amended
by a Second Amendment to Lease Agreement in order to recognize and clarify
certain issues arising out of a development agreement entered into between the
parties in September 1990.

E.    On October 10, 1994, the Lease for Parcels 3, 4 and 8 was further amended
by a Third Amendment to Lease to provide for payment of past due rental and
adjustments to rental payable by Developer.

F.    On January 30, 1997, the Lease for Parcels 3, 4, and 8 was assigned by
KLBA, to KILROY REALTY, L.P. by an instrument entitled “Assignment and
Assumption of Ground Lessee’s Interest in Ground Lease and Grant Deed.” The
Lease, the First Amendment to Lease, Second Amendment to Lease, Third Amendment,
Assignment and Assumption of Ground Lessee’s Interest in Ground Lease and the
Grant Deed to Lease, are hereinafter collectively referred to as the “Lease.”

G.    The parties now desire to further amend the Lease.

NOW THEREFORE the Lease is hereby amended as follows:

1.    Subsection 3.2.1 of the Lease is amended in its entirety to read as
follows:

3.2.1    Adjustment Dates. In order to adjust the annual Ground Rent for parcels
3, 4, and 8, the fair market land value of each parcel and the prevailing rate
of return shall be determined as of January 1, 2001, and every five (5)

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years thereafter. The Ground Rent shall be adjusted accordingly on the first day
of each sixth year. Said dates of adjustment of Ground Rent shall be referred to
for convenience as “adjustment dates.”

2.    Subsection 3.2.4 of the Lease is amended in its entirety to read as
follows:

3.2.4    Maximum Rent Adjustment. The adjustment, if any, in Ground Rent for
parcels upon which one or more buildings have been constructed at the time of
any adjustment date shall be limited as set forth below:

3.2.4.1    Allocation to Parcels. At the time of execution of the Lease, the
Ground Rent shall be allocated between the parcels within the Premises in the
manner set out in subsection 3.1.2. The percentage of rent attributable to each
parcel shall remain in effect during the term of the Lease unless parcel areas
change.

3.2.4.2    Base Period. The Base Period for a parcel shall be the first twelve
(12) calendar month period after the point in time when eighty percent (80%) of
the rentable space on the particular parcel is first leased. The Base Period for
parcel 3 is hereby established to be the twelve (12) month period from 10/1/99
to 9/30/00; and the Base Period for parcel 4 is hereby established to be the
twelve (12) month period from 8/1/00 to 7/31/01.

3.2.4.3    Comparison Year Period. The Comparison Year Period for a parcel shall
be the twelve (12) month period immediately prior to the applicable Ground Rent
adjustment date.

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3.2.4.4    Weighted Average Sublease Monthly Rental Rate. For each parcel, the
Weighted Average Sublease Monthly Rental Rate for each applicable Base Period or
Comparison Year Period shall be determined as follows:

a.    Each of the subleases in existence during a particular Base Period or
Comparison Year Period shall be categorized as a full service gross lease. To
the extent that any of the sublease agreements are other than a full service
gross lease, the base monthly rent under such sublease shall be converted to an
equivalent full service gross lease by increasing such base monthly rent by the
amount of expenses paid directly by the subtenant that normally would be paid by
the landlord under a full service gross lease during the first year of
occupancy. The base rent paid under a full service gross sublease or other type
of lease in which the base rent is converted as provided herein is defined as
the “base rent”. If during a particular Base Period or Comparison Year Period
there is a sublease(s), other than a full service gross lease, Developer shall,
within sixty ( 60) days after Landlord’s written request, which request may only
occur after the expiration of the first nine (9) months of a Comparison Year
Period, deliver to Landlord information identifying expense items and the
amounts thereof which have been paid by a subtenant under such sublease and have
been added to the base monthly rental thereunder to convert such sublease to an
equivalent full service gross lease. In addition, such information shall also
include the amount of any excess tenant improvement amortizations or other
similar

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concessions or considerations that Developer has received and excluded from base
rent.

b.    For each sublease on a particular parcel, the total base rent stabilized
to exclude excess tenant improvement amortization or other similar concessions
or considerations, due to and to be received by Developer over the entire term
of such sublease (said term shall specifically exclude any unexercised option
periods and said base rent shall only include fixed rental increases) shall be
computed and then divided by the rentable square footage of said sublease space,
and the result shall then in turn be divided by the total number of months of
said sublease term. The resulting amount shall be deemed to be the Average
Sublease Monthly Rental Rate for that particular sublease. Each such amount
shall then be weighted by multiplying it by the quotient resulting from dividing
the sublease’s total rentable square footage by the total rentable square
footage under sublease resulting in the Weighted Average Sublease Monthly Rental
Rate for each sublease. The sum of all such amounts shall be the Total Weighted
Average Sublease Monthly Rental Rate.

3.2.4.5    Sublease Rental Percentage Change. The Sublease Rental Percentage
Change for each parcel shall be determined by calculating the average percentage
change of the Total Weighted Average Sublease Monthly Rental Rates between the
Base Period and the applicable Comparison Year Period. Said average percentage
change calculation shall be performed as follows:

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a.    The Base Period Total Weighted Average Sublease Monthly Rental Rate shall
be subtracted from the Comparison Year Period Total Weighted Average Sublease
Monthly Rental Rate, and then dividing that result by the Base Period Total
Weighted Average Sublease Monthly Rental Rate.

3.2.4.6    Adjusted Ground Rent. The “Adjusted Ground Rent” for each parcel at
any given adjustment date shall be the lesser of the Adjusted Fair Market Rental
Value for such parcel as determined in subsection 3.2.2 above or the initial
Ground Rent for such parcel plus the product of the Sublease Rental Percentage
Change determined in 3.2.4.5 above times the initial Ground Rent for such
parcel.

3.2.4.7    Sale or Assignment of Leasehold Interest. Should the Developer sell,
assign or otherwise transfer its leasehold interest to an owner-user such that
sublease rental is not paid to Developer, the fair market sublease rental for
such building, using the criteria and methods set out in subsection 3.2.2, shall
become the basis for calculating the maximum rental adjustment using the process
described in subsection 3.2.4.5 above.

3.2.4.8    ARBITRATION OF DISPUTE. ANY DISPUTE BETWEEN LANDLORD AND DEVELOPER
CONCERNING THE CONVERSION OF A SUBLEASE TO AN EQUIVALENT FULL SERVICE GROSS
LEASE, OR THE EXCLUSION OF EXCESS TENANT IMPROVEMENT AMORTIZATIONS OR OTHER
SIMILAR CONCESSIONS OR CONSIDERATIONS, AS DESCRIBED IN SUBSECTION 3.2.4.4a
ABOVE, SHALL BE DECIDED BY NEUTRAL BINDING ARBITRATION IN ACCORDANCE WITH THE
RULES OF THE AMERICAN ARBITRATION ASSOCIATION, RATHER THAN BY COURT

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ACTION. JUDGMENT UPON THE AWARD RENDERED BY THE ARBITRATOR(S) MAY BE ENTERED IN
ANY COURT HAVING JURISDICTION THEREOF. THE FILING OF A JUDICIAL ACTION TO ENABLE
THE RECORDING OF A NOTICE OF PENDING ACTION, FOR ORDER OF ATTACHMENT,
RECEIVERSHIP, INJUNCTION, OR ACTION, FOR ORDER OF ATTACHMENT, RECEIVERSHIP,
INJUNCTION, OR OTHER PROVISIONAL REMEDIES SHALL NOT CONSTITUTE A WAIVER OF THE
OTHER PROVISIONAL REMEDIES AND SHALL NOT CONSTITUTE A WAIVER OF THE RIGHT TO
ARBITRATE UNDER THIS PROVISION. ANY ELECTION BY A PARTY TO ARBITRATE ANY DISPUTE
OR CLAIM THAT MAY BE ARBITRATED PURSUANT TO THIS AGREEMENT SHALL BE MADE BY
SENDING WRITTEN NOTICE TO THE OTHER PARTY PRIOR TO THE EARLIER OF: (I) THE TIME
WHEN AN ACTION WITH RESPECT THERETO WOULD BE BARRED BY CALIFORNIA LAW; OR (II)
IF AN ACTION HAS BEEN BROUGHT WITH RESPECT THERETO, SIX MONTHS AFTER SERVICE OF
SUCH ACTION UPON THE PARTY ELECTING TO ARBITRATE (OR, IF THE PARTY DESIRING TO
ELECT TO ARBITRATE FILED THE ACTION, SIX MONTHS AFTER THE FILING OF THE ACTION)
.

WITHIN FIVE (5) BUSINESS DAYS AFTER RECEIPT OF WRITTEN NOTICE FROM A PARTY
SUBMITTING ANY DISPUTE TO ARBITRATION PURSUANT TO THIS SUBSECTION, LANDLORD AND
DEVELOPER SHALL APPOINT A DISINTERESTED PERSON AS ARBITRATOR (THE “ARBITRATOR”)
AS FOLLOWS: THE PARTIES SHALL REQUEST THE LOS ANGELES SUPERIOR COURT TO CHOOSE
AN ARBITRATOR PURSUANT TO SECTION 1281.6 OF THE CALIFORNIA CODE OF CIVIL
PROCEDURE. THE ARBITRATOR SHALL ESTABLISH A TIME AND PLACE IN THE COUNTY OF LOS
ANGELES FOR HEARING THE MATTER TO BE ARBITRATED, SUCH HEARING TO BE NOT LATER
THAN THIRTY (30) DAYS AFTER THE APPOINTMENT OF THE ARBITRATOR. THE HEARING
PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION
RULES OF THE AMERICAN ARBITRATION ASSOCIATION. THE ARBITRATOR SHALL DETERMINE
THE CONTROVERSY AND EXECUTE AND ACKNOWLEDGE HIS OR HER AWARD WITHIN THIRTY (30)

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DAYS AFTER HEARING THE MATTER. THE ARBITRATOR SHALL BE ONLY AUTHORIZED TO (X)
DETERMINE THOSE EXPENSE ITEMS AND THE AMOUNT THEREOF WHICH SHOULD BE ADDED TO
THE BASE MONTHLY RENT PAYABLE UNDER A SUBLEASE, OTHER THAN A FULL SERVICE GROSS
LEASE, TO CONVERT SUCH SUBLEASE TO AN EQUIVALENT FULL SERVICE GROSS LEASE AND
(Y) THE AMOUNT OF ANY EXCESS TENANT IMPROVEMENTS AMORTIZATIONS OR OTHER SIMILAR
CONCESSIONS OR CONSIDERATIONS THAT DEVELOPER HAS RECEIVED AND EXCLUDED FROM BASE
RENT. THE DECISION OF THE ARBITRATOR SHALL BE DELIVERED TO EACH PARTY TO THE
ARBITRATION IN WRITING, AND SHALL BE FINAL AND BINDING UPON ALL PARTIES. THE
PARTIES EACH SHALL HAVE THE RIGHT TO REASONABLE DISCOVERY PURSUANT TO THE
PROVISIONS OF SECTION 1283.05 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE DURING
THE PROCEEDINGS. JUDGMENT UPON THE AWARD RENDERED BY THE ARBITRATOR MAY BE
ENTERED IN ANY COURT HAVING JURISDICTION THEREOF. THE ARBITRATOR SHALL DETERMINE
IN WHAT PROPORTION THE PARTIES SHALL BEAR THE COST OF THE ARBITRATION, INCLUDING
AN AWARD OF REASONABLE ATTORNEY’S FEES.

NOTICE: BY INITIALING THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE
ARISING OUT OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION
DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING

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UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY
TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS
TO DISCOVERY AND APPEAL, UNLESS SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN THE
‘ARBITRATION OF DISPUTES’ PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION
AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE
AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS
ARBITRATION PROVISION IS VOLUNTARY. WE HAVE READ AND UNDERSTAND THE FOREGOING
AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE
‘ARBITRATION OF DISPUTES’ PROVISION TO NEUTRAL ARBITRATION.
INITIALS:
[exhibit1014signature1.jpg]
 
INITIALS:
/s/ AMW /s/ JCH
 
LANDLORD
 
 
DEVELOPER

3.    Section 3.4. of the Lease is amended in its entirety to read as follows:

3.4    Adjustments to Ground Rent During Option Term. At the commencement of
each option term, and at the end of each five ( 5) years of each option term,
the Ground Rent shall be determined as provided in subsection 3.2.2., but with
no adjustment thereto as is provided in subsections 3.2.2.1 . and 3.2.4. The
fair market land value shall be converted into an annual Ground Rent obligation
based on the rate of return then current in the market for parcels which are
currently and fairly appraised.

4.    Section 3.5. of the Lease is deleted in its entirety.

5.    The parties agree that the Predevelopment and Infrastructure Costs as
determined under subsection 3.8. are

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Three Million Thirty-five Thousand Five Hundred Ninety-three Dollars
($3,035,593).

6.    The execution of this Fourth Amendment by Developer and Landlord shall
constitute Developer’s exercise of each of the five (5) options to extend the
Lease term as set forth in section 2.1.2 and shall constitute Landlord’s
approval and granting of each such Lease term extension resulting in an
extension of the Lease term to and including July 16, 2084. The parties further
agree that Landlord, in connection with the adoption of the Ordinance and
execution of this Fourth Amendment, has reviewed the Lease terms and provisions
pursuant to Section 37380(b) (1) of the Government Code and Ordinance No.
C-7370, and determined that the terms and provisions of the Lease as amended
herein fully comply with Section 37380(b) (1) of the Government Code and
Ordinance No. C-7370 including without limitation the terms and provisions for
periodic reviews by Landlord which reviews take into consideration the then
current market conditions.

7.    In consideration of Landlord’s approval of Developer’s exercise of each of
the five (5) options and the extension of the Lease term to and including July
16, 2084, Developer within three (3) days of execution of this Fourth Amendment
shall pay Landlord a Ground Lease extension fee payment in the amount of Three
Hundred Sixty-three Thousand Three Hundred Eighteen Dollars ($363,318).

8.    All notices, demands and communications to Developer shall be addressed to
Kilroy Realty, L.P., a Delaware Limited Partnership, Attention: Legal
Department, 2250 East Imperial Highway, Suite 1200, El Segundo, California
90245.

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9.    The purported Lease Agreement dated January 24, 1989, executed by Landlord
and KLBA relating to parcels 3, 4 and 8 substantially duplicates the Lease and
is therefore ab initio void and of no force and effect.

10.    Except as stated in this Fourth Amendment, the Lease shall remain
unmodified and in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused these presents to be duly
executed with all the formalities required by law as of the date first above
written.

June 14, 2002
KILROY REALTY, L.P., a Delaware limited partnership
 
By: KILROY REALTY CORPORATION,
a Maryland corporation, General Partner
 
By: /s/ Jeffrey C. Hawken    
Name: Jeffrey C. Hawken 
Title: Executive Vice President, Chief Operating Officer
 
By: /s/ Ann Marie Whitney    
Name: Ann Marie Whitney 
Title: Senior Vice President and Controller   
 
DEVELOPER
 
CITY OF LONG BEACH, a municipal corporation
June 20, 2002
[exhibit1014signature2.jpg]
 
CITY
EXECUTED PURSUANT TO SECTION 301 OF THE CITY CHARTER.

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The foregoing Fourth Amendment to Lease Agreement is hereby approved as to form
this 18th day of June, 2002.
 
ROBERT E. SHANNON, CITY ATTORNEY
 
 
By:
/s/ Everett L. Glenn
 
 
 
Everett L. Glenn, Deputy
 

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