**EXHIBIT 10.31****THIRD AMENDMENT TO LEASE**     ThisThird Amendment to Lease (this “**Amendment**”), dated as of June 1, 2004 (the “**AmendmentDate**”), by and between iSTAR SUNNYVALE PARTNERS, L.P., a Delaware limited partnership (“**Landlord**”),and SILICON IMAGE, INC., a Delaware corporation(“**Tenant**”), amends and forms a part of the Lease,dated December 12, 2002, by and between Landlord and Tenant, as amended by the First Amendment toLease dated July 23, 2003 and by the Second Amendment to Lease dated February 17, 2004(collectively, the “**Lease**”).RECITALS     A. Capitalized terms used herein and not defined herein have the meanings specified in theLease.     B. Tenantcurrently leases the entirety of the interior space within the 1060 East Arquesbuilding and a 30,821 square foot portion of the interior space within the 1070/1080 East Arquesbuilding.     C. Landlord and Tenant desire to amend the Lease to expand the Leased Premises to include theremaining portion of the interior space within the 1070/1080 East Arques building (the“**ExpansionPremises**”), subject to the terms and conditions set forth herein. The Expansion Premises aredepicted in Schedule 1 attached hereto and consist of approximately 28,163 square feet.AGREEMENTS     Now,therefore, for good and valuable consideration, the receipt andsufficiency of which is hereby acknowledged, Landlord and Tenanthereby agree as follows:     1. Expansion of Leased Premises.     a. On July 1, 2004 (the “**Expansion Premises Commencement Date**”), Landlord shall deliver theExpansion Premises to Tenant, and Tenant shall accept the Expansion Premises from Landlord “as is”,“where is” and with all faults, on and subject to the terms and conditions set forth in Paragraph2.5 of the Lease. Notwithstanding the foregoing, Landlord shall beresponsible to repair anydefects in the HVAC system if it is not in good working order if: (i) Tenant notifies Landlord inwriting of such defect on or before August 15, 2004, and (ii) such defect is not caused due to anyactions by Tenant.     b. Effective as of the Expansion Premises Commencement Date, the definition of the “LeasedPremises” set forth in Article 1 of the Lease shall be deleted in its entirety and replaced withthe following:“(1) All of the interior space within the 1060 East Arques building, including stairwells,connecting walkways, and atriums, consisting of approximately 50,819square feet and, forpurposes of this Lease, agreed to contain said number of square feet and (2) all of theinterior space within the 1070/1080 East Arques building, including stairwells, connectingwalkways, and atriums, consisting ofapproximately 58,984 square feet and, for purposes of this Lease, agreed to contain saidnumber of square feet.”     2. Lease Expiration Date. The Lease Expiration Date with respect to the entire LeasedPremises (including, without limitation, the Expansion Premises) shall be and remain July 31, 2010.
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     3. Tenant’s Security Deposit. Within ten (10) days after the Amendment Date,Tenant shall deposit with Landlord the amount of fifty-five thousand one hundred ninety-ninedollars ($55,199.00) in order to increase Tenant’s Security Deposit to two hundred seven thousandtwo hundred forty-four dollars ($207,244.00).     4. Abatement: Base Monthly Rent; First Month’s Prepaid Rent.     (a) Provided that no Event of Default occurs, Base Monthly Rent for the period from theAmendment Date until March 31, 2005 shall be fully abated; provided that Tenant shall remainobligated to pay any and all Additional Rent due under the Lease during such period, including,without limitation, any Additional Rent related to the Expansion Premises from and after the ExpansionPremises Commencement Date.     (b) Effectiveas of April 1, 2005, the definition of “Base Monthly Rent” set forth in Article 1of the Lease shall be deleted in its entirety and replaced with the following:“$107,607.00 per month from April 1, 2005 for a period of 4 months. On August 1, 2005, andon August 1 during each subsequent year of the Lease Term (each an“Adjustment Date”), BaseMonthly Rent shall be increased to an amount equal to one hundred three percent (103%) ofthe Base Monthly Rent in effect immediately prior to such Adjustment Date.”     (c) Notwithstandinganything to the contrary herein, upon execution of this Amendment, Tenantshall pay to Landlord the April 1, 2005 installment of Base Monthly Rent set forth in Section 4(b)above; subsequent installments of Base Monthly Rent shall be payableon the first day of eachcalendar month beginning on May 1, 2005.     5. Tenant’s Project Proportionate Share. Effective as of the Expansion PremisesCommencement Date, the definition of the “Tenant’s ProjectProportionate Share” set forth in Article1 of the Lease shall be deleted in its entirety and replaced with fifty and 96/100 percent(50.96%).     6. Tenant’s Building Proportionate Share. Effective as of the Expansion PremisesCommencement Date, the definition of the “Tenant’s BuildingProportionate Share” set forth inArticle 1 of the Lease shall be deleted in its entirety andreplaced with one hundred percent(100%).     7. Area Plan for 1070/1080 East Arques Building. Effective as of the ExpansionPremises Commencement Date, the Leased Premises shall include the entirety of the interior spacewithin the 1070/1080 East Arques building, such that Exhibit “A-1” to the Lease, which exhibitdelineates the portion of such building leased to Tenant prior to the Expansion PremisesCommencement Date, will no longer apply. Accordingly, Exhibit “A-1” to the Lease, together with anyand all references thereto in the Lease, shall be deleted in their entirety as of the ExpansionPremises Commencement Date.     8. Tenant Improvement Work; Allowance. Paragraph 2.7 of the Lease is hereby deleted inits entirety and replaced with the following:“**2.7 Tenant Improvement Work; Allowance.**Landlord shall provide Tenant with an improvementallowance of up to seven hundred eighty-one thousand six hundred thirty dollars($781,630.00) (the “Allowance”); provided, however, that three hundred sixty thousand sixhundred twenty three and 15/100 dollars ($360,623.15) of such Allowance has already beenused prior to the Amendment Date, leaving an available balance of up to four hundredtwenty-one thousand six and 85/100 dollars ($421,006.85). The Allowance shall be used toreimburse Tenant only for direct, reasonable costs incurred by Tenant in designing,constructing and installing
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improvements in the Leased Premises (the “Tenant improvements”); provided, however, that theAllowance shall not be used to reimburse Tenant for any costs incurred by Tenant in connection withsignage, furniture, trade fixtures, equipment or moving. The Tenant Improvements shall be designed,constructed and installed in accordance with plans and specifications to be reasonably approved inadvance by Landlord and in accordance with all applicable laws, ordinances and regulations, andshall be constructed by a general contractor that is licensed in the State of California andreasonably approved in advance by Landlord. Tenant Improvement work may commence upon thecompletion and execution of all required documentation and receipt of all required approvals andpermits. Landlord shall pay to Tenant the Allowance when Tenant provides to Landlord receipts for all Tenant Improvement work and evidence that all such work has beencompleted free and clear of all mechanics’ and materialman’s liens; provided that Landlord shallhave no obligation to pay any portion of the Allowance for any Tenant Improvement work that has notbeen so completed by December 31, 2005.”     9. Brokerage Commissions. Tenant represents, warrants and agrees that, except for Ted Eyreof BT Commercial, it has not had any dealings with any real estate broker(s), leasing agent(s),finder(s) or salesmen with respect to the subject matter of this Amendment, and that, subject tothe immediately following sentence, it will indemnify, defend with competent counsel, and holdLandlord harmless from any liability for the payment of any real estate brokerage commissions,leasing commissions or finder’s fees claimed by any real estate broker(s), leasing agent(s),finder(s), or salesmen to be earned or due and payable by reason of Tenant’s agreement or promise(implied or otherwise) to pay (or to have Landlord pay) such a commission or finder’s fee byreason of the subject matter of this Amendment. For the transaction contemplated by this AmendmentLandlord shall pay to BT Commercial a procuring fee equal to five percent (5%) of the Base MonthlyRent payable with respect to the Expansion Premises through the Lease Expiration Date, payableone-half (1/2) upon execution of this Amendment and one-half (1/2) on the Expansion PremisesCommencement Date. Except as expressly provided in this Section 10 with respect to brokeragecommissions payable with respect to this Amendment, Paragraph 14.2 of the Lease shall continue toapply and remain in full force and effect.     10. Conflicts: No Other Amendment. In the event of a conflict between the provisions ofthis Amendment and the provisions of the Lease, the provisions of this Amendment shall control.Except as set forth in this Amendment, the provisions of the Lease remain in full force and effect.     11. Entire Agreement. The Lease, as modified by this Amendment, constitutes the entireagreement between the parties hereto pertaining to the subject matter hereof and may be furthermodified only by a writing signed by the parties hereto.     12. Facsimile: Counterparts. This Amendment may be signed in multiple counterparts which,when signed by all parties, shall constitute a binding agreement. Landlord and Tenant agree thatthe delivery of an executed copy of this Amendment by facsimile shallbe legal and binding and shall have the same full force and effect as if an original executed copyof this Amendment had been delivered.
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     In Witness Whereof, the parties have caused this Amendment to be dulyexecuted as of the Amendment Date.         iSTAR SUNNYVALE PARTNERS, L.P., a  Delaware limited partnership, Landlord         By: /s/ Erich Stiger                  Its: Vice President                         SILICON IMAGE, INC., a Delaware corporation,  Tenant         By: /s/ Robert Gargus                  Its:           
 

 
Schedule 1Expansion Premises
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Exhibit10.31