EXHIBIT 10.28


 


LEASE AGREEMENT BETWEEN


 


TRINET MILPITAS ASSOCIATES, LLC,


 


AS LANDLORD


 


AND


 


ADVANCED MEDICAL OPTICS, INC.,


 


AS TENANT


 


DATED FEBRUARY 9, 2007


 


510 COTTONWOOD
DRIVE, MILPITAS, CALIFORNIA
















BASIC LEASE
INFORMATION


	
  Effective Date:

  	
  February 9, 2007

  
	
   

  	
   

  
	
  Landlord:

  	
  TriNet Milpitas Associates, LLC, a Delaware limited
  liability company

  
	
   

  	
   

  
	
  Tenant:

  	
  Advanced Medical Optics, Inc., a Delaware
  corporation

  
	
   

  	
   

  
	
  Premises:

  	
  The “Premises”,
  containing for purposes of this Lease approximately 180,086 square feet, are
  located at 510 Cottonwood Drive, Milpitas, California, are outlined on the
  plan attached to this Lease as Exhibit A, and consist of the real
  property described in Exhibit B, together with the partial two-story
  office/research and development building located thereon (the “Building”), and the driveways,
  parking facilities, and all other improvements and easements associated with
  the foregoing or the operation thereof. 
  Landlord and Tenant stipulate that the number of square feet in the
  Premises set forth above is conclusive and shall be binding upon them.

  
	
   

  	
   

  
	
  Term:

  	
  One Hundred Twenty (120) months, commencing on the
  Commencement Date and ending at 5:00 p.m. local time on the last day of the
  one hundred twentieth (120th) full calendar month following the Commencement Date,
  subject to extension and earlier termination as provided in the Lease.

  
	
   

  	
   

  
	
  Commencement Date:

  	
  July 1, 2007,
  subject to possible extension for “Landlord Delays” and “Force Majeure Delays”
  as and to the extent set forth in Exhibit D.

  
	
   

  	
   

  
	
  Basic Rent:

  	
  Basic Rent shall be the following amounts for the
  following periods of time:

  



 


	
  Lease Month

  	
   

  	
  Monthly Basic Rent

  	
   

  
	
  1 - 12

  	
   

  	
  $

  	
  56,034.40

  	
   

  
	
  13 - 24

  	
   

  	
  $

  	
  67,241.28

  	
   

  
	
  25 - 36

  	
   

  	
  $

  	
  100,848.16

  	
   

  
	
  37 - 48

  	
   

  	
  $

  	
  115,255.04

  	
   

  
	
  49 - 60

  	
   

  	
  $

  	
  129,661.92

  	
   

  
	
  61 - 72

  	
   

  	
  $

  	
  144,068.80

  	
   

  
	
  73 - 84

  	
   

  	
  $

  	
  158,475.68

  	
   

  
	
  85 - 96

  	
   

  	
  $

  	
  172,882.56

  	
   

  
	
  97 - 108

  	
   

  	
  $

  	
  187,289.44

  	
   

  
	
  109 - 120

  	
   

  	
  $

  	
  201,696.32

  	
   

  



 


	
  

  	
  As used herein, the term “Lease Month” means each calendar
  month during the Term (and if the Commencement Date does not occur on the
  first day of a calendar month, the period from the Commencement Date to the
  first day of the next calendar month shall be included in the first Lease
  Month for purposes of determining the duration of the Term and the monthly
  Basic Rent rate applicable for such partial month).

  
	
   

  	
   

  
	
  Additional Rent:

  	
  Tenant’s Proportionate Share of Operating Costs,
  Taxes and Insurance Costs.

  



 



 i
 









 


	
  Prepaid Rent:

  	
  $85,452.46.

  
	
   

  	
   

  
	
  Security Deposit:

  	
  $140,000.00.

  
	
   

  	
   

  
	
  Rent:

  	
  Basic Rent, Additional Rent, and all other sums that
  Tenant may owe to Landlord or otherwise be required to pay under the Lease.

  
	
   

  	
   

  
	
  Permitted Use:

  	
  General office, research and development,
  manufacturing, assembly, warehousing and other legal uses directly related to
  the foregoing.

  
	
   

  	
   

  
	
  Tenant’s Proportionate Share:

  	
  Tenant’s Proportionate Share shall be as
  follows:  (a) 77.79% for Lease Months 1
  — 24, subject to Section 11(g)(2) below; and (b) 100% for the remainder of
  the Term (including any extensions thereof).

  
	
   

  	
   

  
	
  Initial Liability Insurance Amount:

  	
  $3,000,000 per occurrence and aggregate.

  
	
   

  	
   

  	
   

  
	
  Tenant’s Address:

  	
  Prior to Commencement Date:



  Advanced Medical
  Optics, Inc.

  1700 East St. Andrews
  Place

  Santa Ana, California
  92705

  Attention:     Mr. Jamie Hardenbergh

  Telephone:   714-247-8200

  Telecopy:     714-247-8722

  	
  Following Commencement Date:



  Advanced Medical
  Optics, Inc.

  1700 East St. Andrews
  Place

  Santa Ana, California
  92705

  Attention:     Mr. Jamie Hardenbergh

  Telephone:   714-247-8200

  Telecopy:     714-247-8722

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  Advanced Medical Optics, Inc.

  1700 East St. Andrews
  Place

  Santa Ana, California
  92705

  Attention: General
  Counsel

  	
  With a copy to:

  Advanced Medical Optics, Inc.

  1700 East St. Andrews
  Place

  Santa Ana, California
  92705

  Attention: General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy to:

  Advanced Medical
  Optics, Inc.

  510 Cottonwood Drive

  Milpitas, California

  Attn: Mr. Chris Carr

  
	
   

  	
   

  	
   

  
	
  Landlord’s Address:

  	
  TriNet Milpitas
  Associates, LLC

  c/o iStar Financial Inc.

  One Embarcadero Center

  Suite 3300

  San Francisco, California 94111

  Attention:  Asset Management - 510 

  Cottonwood Drive, Milpitas, California

  Telephone:
  415-391-4300

  Facsimile: 415-391-6259

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  with
  a copy to:

  TriNet Milpitas Associates, LLC

  c/o iStar Financial Inc.

  1114 Avenue of the Americas, 27th Floor

  New York, New York  10036

  Attention:  COO - 510 Cottonwood Drive,

  Milpitas, California

  Telephone: 212-930-9400

  	
   

  



 



 ii
 









 


	
  

  	
  Facsimile: 212-930-9494

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  TriNet Milpitas Associates, LLC

  c/o iStar Financial Inc.

  3480 Preston Ridge Road, Suite 575

  Alpharetta, Georgia 30005

  Attention: Director of Lease Administration - 
  510 Cottonwood Drive, Milpitas,
  California

  Telephone:678-297-0100

  Facsimile:   678-297-0101

  	
   

  



 



 iii
 









The foregoing Basic Lease Information is incorporated
into and made a part of the Lease identified above.  If any conflict exists between any Basic
Lease Information and the Lease, then the Lease shall control.


	
  LANDLORD:

  	
  TRINET MILPITAS
  ASSOCIATES, LLC, a Delaware limited liability company

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  TriNet Realty Investors II, Inc., a Maryland
  corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ ERICH STIGER

  
	
   

  	
   

  	
  Name: 

  	
  Erich Stiger

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
  TENANT:

  	
  ADVANCED MEDICAL
  OPTICS, INC., a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JAMES V. MAZZO

  
	
   

  	
  Name: 

  	
  Jim Mazzo

  
	
   

  	
  Title: 

  	
  Chairman, President and
  CEO

  
						



 



 iv
 









TABLE OF
CONTENTS


	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Page No.

  
	
  1.

  	
   

  	
  Definitions and Basic Provisions

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Lease Grant

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Tender and Acceptance of Possession

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Rent

  	
   

  	
  2

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Payment

  	
   

  	
  2

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Operating Costs, Taxes and Insurance Costs

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Delinquent Payment; Handling Charges

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Security Deposit

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Landlord’s Maintenance Obligations

  	
   

  	
  3

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Warranty Period Work

  	
   

  	
  3

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Building’s Structure

  	
   

  	
  3

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Water and Sewer Mains

  	
   

  	
  3

  
	
   

  	
   

  	
  (d)

  	
   

  	
  Exterior Compliance with Laws

  	
   

  	
  3

  
	
   

  	
   

  	
  (e)

  	
   

  	
  Outside Areas, Landscaping, Etc

  	
   

  	
  3

  
	
   

  	
   

  	
  (f)

  	
   

  	
  Air Handler Replacement

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Improvements; Alterations; Tenant’s Maintenance and
  Repair Obligations

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Improvements; Alterations

  	
   

  	
  4

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Repairs; Maintenance

  	
   

  	
  5

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Performance of Work

  	
   

  	
  6

  
	
   

  	
   

  	
  (d)

  	
   

  	
  Mechanic’s Liens

  	
   

  	
  6

  
	
   

  	
   

  	
  (e)

  	
   

  	
  Janitorial Services

  	
   

  	
  6

  
	
   

  	
   

  	
  (f)

  	
   

  	
  Landlord’s Right to Perform Tenant’s Obligations

  	
   

  	
  7

  
	
   

  	
   

  	
  (g)

  	
   

  	
  Signage

  	
   

  	
  7

  
	
   

  	
   

  	
  (h)

  	
   

  	
  Rooftop Communications Equipment

  	
   

  	
  7

  
	
   

  	
   

  	
  (i)

  	
   

  	
  Generator/UPS

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Utilities; Licenses and Permits

  	
   

  	
  8

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Utilities

  	
   

  	
  8

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Licenses and Permits

  	
   

  	
  8

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Landlord’s Right to Perform Tenant’s Obligations

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  Use; Compliance With Laws

  	
   

  	
  8

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Use

  	
   

  	
  8

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Compliance With Laws

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  Assignment and Subletting

  	
   

  	
  9

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Transfers

  	
   

  	
  9

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Consent Standards

  	
   

  	
  9

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Request for Consent

  	
   

  	
  9

  
	
   

  	
   

  	
  (d)

  	
   

  	
  Conditions to Consent

  	
   

  	
  10

  
	
   

  	
   

  	
  (e)

  	
   

  	
  Attornment by Subtenants

  	
   

  	
  10

  
	
   

  	
   

  	
  (f)

  	
   

  	
  Cancellation

  	
   

  	
  10

  
	
   

  	
   

  	
  (g)

  	
   

  	
  Additional Compensation

  	
   

  	
  10

  
	
   

  	
   

  	
  (h)

  	
   

  	
  Permitted Transfers

  	
   

  	
  11

  
	
   

  	
   

  	
  (i)

  	
   

  	
  Strategic Partners

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  Insurance; Waivers; Subrogation; Indemnity

  	
   

  	
  12

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Insurance

  	
   

  	
  12

  



 



 v
 









 


	
  

  	
   

  	
  (b)

  	
   

  	
  No Subrogation

  	
   

  	
  12

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Indemnity

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  Subordination; Attornment; Notice to Landlord’s
  Mortgagee

  	
   

  	
  13

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Subordination

  	
   

  	
  13

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Attornment

  	
   

  	
  13

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Notice to Landlord’s Mortgagee

  	
   

  	
  13

  
	
   

  	
   

  	
  (d)

  	
   

  	
  Landlord’s Mortgagee’s Protection Provisions

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  Rules and Regulations

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  Condemnation

  	
   

  	
  14

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Total Taking

  	
   

  	
  14

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Partial Taking — Tenant’s Rights

  	
   

  	
  14

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Partial Taking — Landlord’s Rights

  	
   

  	
  14

  
	
   

  	
   

  	
  (d)

  	
   

  	
  Temporary Taking

  	
   

  	
  15

  
	
   

  	
   

  	
  (e)

  	
   

  	
  Award

  	
   

  	
  15

  
	
   

  	
   

  	
  (f)

  	
   

  	
  Repair

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  Fire or Other Casualty

  	
   

  	
  15

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Repair Estimate

  	
   

  	
  15

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Tenant’s Rights

  	
   

  	
  15

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Landlord’s Rights

  	
   

  	
  15

  
	
   

  	
   

  	
  (d)

  	
   

  	
  Repair Obligation

  	
   

  	
  16

  
	
   

  	
   

  	
  (e)

  	
   

  	
  Abatement of Rent

  	
   

  	
  16

  
	
   

  	
   

  	
  (f)

  	
   

  	
  Exclusive Remedy

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  Personal Property Taxes

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  Events of Default

  	
   

  	
  17

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Payment Default

  	
   

  	
  17

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Abandonment

  	
   

  	
  17

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Estoppel

  	
   

  	
  17

  
	
   

  	
   

  	
  (d)

  	
   

  	
  Insurance

  	
   

  	
  17

  
	
   

  	
   

  	
  (e)

  	
   

  	
  Mechanic’s Liens

  	
   

  	
  17

  
	
   

  	
   

  	
  (f)

  	
   

  	
  Other Defaults

  	
   

  	
  17

  
	
   

  	
   

  	
  (g)

  	
   

  	
  Insolvency

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  Remedies

  	
   

  	
  18

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Continuance of Lease in Effect

  	
   

  	
  18

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Termination of Lease

  	
   

  	
  18

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Election to Terminate or Continue

  	
   

  	
  18

  
	
   

  	
   

  	
  (d)

  	
   

  	
  Rights and Remedies Upon Termination

  	
   

  	
  18

  
	
   

  	
   

  	
  (e)

  	
   

  	
  Landlord’s Default and Tenant’s Remedies

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  Non-Waiver; Cumulative Remedies

  	
   

  	
  19

  
	
   

  	
   

  	
  (a)

  	
   

  	
  No Waiver

  	
   

  	
  19

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Cumulative Remedies

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
   

  	
  Intentionally Omitted

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
   

  	
  Surrender of Premises

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
   

  	
  Holding Over

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
   

  	
  Certain Rights Reserved by Landlord

  	
   

  	
  21

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Building Operations

  	
   

  	
  21

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Security

  	
   

  	
  21

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Prospective Purchasers and Lenders

  	
   

  	
  21

  
	
   

  	
   

  	
  (d)

  	
   

  	
  Prospective Tenants

  	
   

  	
  21

  



 



 vi
 









 


	
  25.

  	
   

  	
  Intentionally Omitted

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  26.

  	
   

  	
  Miscellaneous

  	
   

  	
  21

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Landlord Transfer

  	
   

  	
  21

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Landlord’s Liability

  	
   

  	
  21

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Brokerage

  	
   

  	
  22

  
	
   

  	
   

  	
  (d)

  	
   

  	
  Estoppel Certificates

  	
   

  	
  22

  
	
   

  	
   

  	
  (e)

  	
   

  	
  Notices

  	
   

  	
  22

  
	
   

  	
   

  	
  (f)

  	
   

  	
  Separability

  	
   

  	
  22

  
	
   

  	
   

  	
  (g)

  	
   

  	
  Amendments; Binding Effect

  	
   

  	
  22

  
	
   

  	
   

  	
  (h)

  	
   

  	
  Quiet Enjoyment

  	
   

  	
  22

  
	
   

  	
   

  	
  (i)

  	
   

  	
  No Merger

  	
   

  	
  23

  
	
   

  	
   

  	
  (j)

  	
   

  	
  No Offer

  	
   

  	
  23

  
	
   

  	
   

  	
  (k)

  	
   

  	
  Entire Agreement

  	
   

  	
  23

  
	
   

  	
   

  	
  (l)

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  23

  
	
   

  	
   

  	
  (m)

  	
   

  	
  Governing Law

  	
   

  	
  23

  
	
   

  	
   

  	
  (n)

  	
   

  	
  Recording

  	
   

  	
  23

  
	
   

  	
   

  	
  (o)

  	
   

  	
  Water or Mold Notification

  	
   

  	
  23

  
	
   

  	
   

  	
  (p)

  	
   

  	
  Joint and Several Liability

  	
   

  	
  23

  
	
   

  	
   

  	
  (q)

  	
   

  	
  Financial Reports

  	
   

  	
  23

  
	
   

  	
   

  	
  (r)

  	
   

  	
  Landlord’s Fees

  	
   

  	
  24

  
	
   

  	
   

  	
  (s)

  	
   

  	
  Telecommunications

  	
   

  	
  24

  
	
   

  	
   

  	
  (t)

  	
   

  	
  Confidentiality

  	
   

  	
  24

  
	
   

  	
   

  	
  (u)

  	
   

  	
  Authority

  	
   

  	
  24

  
	
   

  	
   

  	
  (v)

  	
   

  	
  Security Service

  	
   

  	
  24

  
	
   

  	
   

  	
  (w)

  	
   

  	
  Intentionally Omitted

  	
   

  	
  24

  
	
   

  	
   

  	
  (x)

  	
   

  	
  Prohibited Persons and Transactions

  	
   

  	
  25

  
	
   

  	
   

  	
  (y)

  	
   

  	
  List of Exhibits

  	
   

  	
  25

  
	
   

  	
   

  	
  (z)

  	
   

  	
  Attorneys Fees

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  27.

  	
   

  	
  Environmental Requirements

  	
   

  	
  25

  
	
   

  	
   

  	
  (a)

  	
   

  	
  Prohibition against Hazardous Materials

  	
   

  	
  25

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Environmental Requirements

  	
   

  	
  25

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Removal of Hazardous Materials

  	
   

  	
  26

  
	
   

  	
   

  	
  (d)

  	
   

  	
  Tenant’s Indemnity

  	
   

  	
  26

  
	
   

  	
   

  	
  (e)

  	
   

  	
  Inspections and Tests

  	
   

  	
  26

  
	
   

  	
   

  	
  (f)

  	
   

  	
  Tenant’s Financial Assurance in the Event of a
  Breach

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  28.

  	
   

  	
  Parking

  	
   

  	
  27

  



 



 vii














LEASE


THIS
LEASE AGREEMENT (this “Lease”)
is entered into as of the Effective Date between TRINET MILPITAS ASSOCIATES,
LLC, a Delaware limited liability company (“Landlord”), and ADVANCED MEDICAL OPTICS, INC., a Delaware
corporation (“Tenant”).


1.             Definitions and Basic
Provisions.  The
definitions and basic provisions set forth in the Basic Lease Information (the “Basic Lease Information”) executed by
Landlord and Tenant contemporaneously herewith are incorporated herein by
reference for all purposes.  Additionally,
the following terms shall have the following meanings when used in this Lease: “Affiliate” means any person or entity
which, directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with the party in question; “Building’s Structure” means the
Building’s structural roof elements, footings, foundation, and structural
portions of exterior load-bearing walls (expressly excluding any painting,
sealing or other surface maintenance); “Building’s
Systems” means the Building’s HVAC, life-safety, plumbing,
electrical, and mechanical systems; “including”
means including, without limitation; “Laws”
means all federal, state, and local laws, ordinances, rules and regulations,
all court orders, governmental directives, and governmental orders, and all
interpretations of the foregoing, and all restrictive covenants affecting the
Premises (provided that any private restrictive covenants that become effective
after the Effective Date and materially affect the Premises or Tenant’s use
thereof shall be subject to Tenant’s prior approval, which shall not be
unreasonably withheld, conditioned or delayed), and “Law” means any of the foregoing; and “Tenant Party” means any of the
following persons:  Tenant; any assignees
claiming by, through, or under Tenant; any subtenants claiming by, through, or
under Tenant; and any of their respective agents, contractors, employees,
licensees, guests, and invitees.


2.             Lease Grant. 
Subject to the terms of this Lease, Landlord leases to Tenant, and
Tenant leases from Landlord, the Premises.


3.             Tender and Acceptance of
Possession. Landlord shall tender possession of the
Premises to Tenant on the Effective Date for performance of the Work by Tenant
as provided in Exhibit D hereto. 
Subject to the terms and conditions of this Section 3, Landlord shall
deliver the Premises in good working condition (with all mechanical,
electrical, plumbing, life safety, roll-up doors, walkways, parking lots and
driveways in good working and operable condition, and the roof water tight), “broom
clean”, and free of any personal property of prior tenants.  Access to, and use and occupancy of, the
Premises by Tenant prior to the Commencement Date shall be subject to all of
the provisions of this Lease excepting only those requiring the payment of
Basic Rent and Additional Rent, provided that Tenant shall be solely
responsible for the costs of utilities and other costs directly related to
Tenant’s access, use and occupancy of the Premises prior to the Commencement
Date, including for performance of the Work (the “Early Occupancy Costs”). 
Tenant formally accepts the Premises as of the Effective Date and
acknowledges that the Premises and all components thereof are in good working
condition (including with all mechanical, electrical, plumbing, life safety,
roll-up doors, walkways, parking lots and driveways in good working and
operable condition, and the roof water tight), “broom clean”, and free of any
personal property of prior tenants, except only that Landlord shall repair or
replace, at no cost (as an Operating Expense or otherwise) to Tenant, any
components of the Building’s Systems which (a) are not in good working
condition for reasons other than the acts or omissions of a Tenant Party
(including any alterations of the applicable Building’s Systems by or on behalf
of a Tenant Party) and (b) Tenant, acting reasonably and in good faith,
specifically identifies and describes as not being in good working condition in
a written notice, together with reasonable supporting documentation, delivered
to Landlord within ninety (90) days after the Effective Date (the “Warranty Period”), it being understood
that, except for any components of the Building’s Systems so identified and
described by Tenant during the Warranty Period, the Building’s Systems and the
Premises shall be conclusively deemed to have been delivered to Tenant in good
working condition, with the roof in watertight condition, and otherwise in the
condition called for hereunder, and Landlord shall have no repair or
replacement obligations with respect thereto (except for Landlord’s ongoing
maintenance and repair obligations to the extent expressly set forth in
Sections 7, 15 and 16 below).  To the
extent in Landlord’s possession and assignable (it being understood that
Landlord shall not be obligated to incur any costs in connection with any such
assignment), Landlord shall assign to Tenant, on a non-exclusive basis, any
warranties and/or service contracts related to the Building’s Systems or other
items Tenant is responsible to maintain under this Lease; provided, however,
that to the extent (1) such warranties or contracts are not assignable to
Tenant or (2) Tenant elects not to pay all costs charged by the service
provider under such warranties or service contracts to effect











the assignment, Landlord
shall promptly upon request by Tenant use commercially reasonable efforts to
enforce such warranties and contracts for the benefit of Tenant, and the costs
incurred by Landlord in connection therewith shall be part of Operating
Expenses.  Landlord represents and
warrants that (i) it holds fee title to the Premises and has the right to enter
into this Lease and (ii) there are no Mortgages (defined below) currently
encumbering the Premises.  EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THIS SECTION 3 AND IN SECTION 27, LANDLORD DOES
NOT, BY THE EXECUTION AND DELIVERY OF THIS LEASE, AND LANDLORD SHALL NOT, BY
THE EXECUTION AND DELIVERY OF ANY DOCUMENT OR INSTRUMENT EXECUTED AND DELIVERED
IN CONNECTION WITH THIS LEASE, MAKE ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, OF ANY KIND OR NATURE WHATSOEVER, WITH RESPECT TO THE PREMISES, AND
ALL SUCH REPRESENTATIONS AND WARRANTIES ARE HEREBY DISCLAIMED.  WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING PROVISION, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS SECTION 3
AND IN SECTION 27, LANDLORD MAKES, AND SHALL MAKE, NO EXPRESS OR IMPLIED
WARRANTY AS TO MATTERS OF TITLE, ZONING, TAX CONSEQUENCES, PHYSICAL OR
ENVIRONMENTAL CONDITION, VALUATION, GOVERNMENTAL APPROVALS, GOVERNMENTAL
REGULATIONS OR ANY OTHER MATTER OR THING RELATING TO OR AFFECTING THE
PREMISES.  TENANT AGREES THAT, WITH
RESPECT TO THE PREMISES, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS SECTION
3 AND IN SECTION 27, TENANT HAS NOT RELIED UPON AND WILL NOT RELY UPON, EITHER
DIRECTLY OR INDIRECTLY, ANY REPRESENTATION OR WARRANTY OF LANDLORD.  EXCEPT TO THE EXTENT EXPRESSLY PROVIDED
OTHERWISE IN THIS LEASE (INCLUDING LANDLORD’S ONGOING MAINTENANCE AND REPAIR
OBLIGATIONS TO THE EXTENT EXPRESSLY SET FORTH IN SECTIONS 7, 15 AND 16 BELOW),
LANDLORD SHALL LEASE TO TENANT, AND TENANT SHALL ACCEPT, THE PREMISES “AS IS”, “WHERE
IS”, AND WITH ALL FAULTS, AND THERE ARE NO ORAL AGREEMENTS, WARRANTIES OR
REPRESENTATIONS, COLLATERAL TO OR AFFECTING THE PREMISES BY LANDLORD OR ANY
THIRD PARTY.


                4.             Rent.


(a)           Payment.  Tenant shall timely pay to Landlord Rent,
without notice, demand, deduction or set off (except as otherwise expressly
provided herein), by good and sufficient check at Landlord’s address provided
for in this Lease or at such other address specified in writing to Tenant by
Landlord.  The obligations of Tenant to
pay Basic Rent and other sums to Landlord and the obligations of Landlord under
this Lease are independent obligations. 
Basic Rent, adjusted as herein provided, shall be payable monthly in
advance.  The “Prepaid Rent” set forth in
the Basic Lease Information shall be payable contemporaneously with the
execution of this Lease and shall be applied to first installment(s) of Rent
due under this Lease; thereafter, Basic Rent shall be payable on the first day
of each calendar month of the Term.  The
monthly Basic Rent for any partial month at the beginning of the Term shall
equal the product of 1/365 of the annual Basic Rent in effect during the
partial month and the number of days in the partial month, and shall be due on
the Commencement Date.  Payments of Basic
Rent for any fractional calendar month at the end of the Term shall be
similarly prorated.  Tenant shall pay
Additional Rent at the same time and in the same manner as Basic Rent.


(b)           Operating Costs, Taxes and Insurance Costs.  Tenant shall pay Operating Costs, Taxes and
Insurance Costs in accordance with Exhibit G and Exhibit H
hereto.


                5.             Delinquent Payment; Handling Charges.  All payments required of Tenant hereunder
that are not paid within five days after their due date shall bear interest
from the date due until paid at the lesser of twelve percent (12%) per annum or
the maximum lawful rate of interest (such lesser amount is referred to herein as
the “Default Rate”);
additionally, Landlord, in addition to all other rights and remedies available
to it, may charge Tenant a fee equal to the greater of (a) $50.00 or (b) five
percent of the delinquent payment to reimburse Landlord for its cost and inconvenience
incurred as a consequence of Tenant’s delinquency.  In no event, however, shall the charges
permitted under this Section 4(b) or elsewhere in this Lease, to the extent
they are considered to be interest under applicable Law, exceed the maximum lawful
rate of interest.  Notwithstanding the
foregoing, the late fee referenced above shall not be charged with respect to
the first occurrence (but not any subsequent occurrence during a 12-month
period) during any 12-month period that Tenant fails to make payment when
due, until five days after Landlord delivers written notice of such delinquency
to Tenant.











                6.             Security Deposit.  Contemporaneously with the execution of this
Lease, Tenant shall pay to Landlord the Security Deposit, which shall be held
by Landlord to secure Tenant’s performance of its obligations under this
Lease.  The Security Deposit is not an
advance payment of Rent or a measure or limit of Landlord’s damages upon an
Event of Default (as defined herein). 
Landlord may, from time to time following an Event of Default and
without prejudice to any other remedy, use all or a part of the Security
Deposit to perform any obligation Tenant fails to perform hereunder or to
compensate Landlord for any damages due to an Event of Default by Tenant.  In this regard, Tenant hereby waives any
restriction on the uses to which the Security Deposit may be applied as
contained in Section 1950.7(c) of the California Civil Code and/or any
successor statute  Following any such
application of the Security Deposit, Tenant shall pay to Landlord within ten
(10) days after Tenant’s receipt of Landlord’s written demand the amount so
applied in order to restore the Security Deposit to its original amount.  Landlord shall, within 60 days after the
expiration or earlier termination of the Term and Tenant’s surrender of the
Premises, return to Tenant the portion of the Security Deposit which was not
applied to satisfy Tenant’s obligations (and Tenant hereby waives the
provisions of California Civil Code Section 1950.7 to the contrary).  The Security Deposit may be commingled with
other funds, and no interest shall be paid thereon.  If Landlord transfers its interest in the
Premises and the transferee assumes Landlord’s obligations under this Lease,
then Landlord shall assign the Security Deposit to the transferee in conformity
with the provisions of Section 1950.7 of the California Civil Code and/or any
successor statute, and Landlord thereafter shall have no further liability for
the return of the Security Deposit.  The
rights and obligations of Landlord and Tenant under this Section 6 are subject
to any other requirements and conditions imposed by Laws applicable to the
Security Deposit.


                7.             Landlord’s Maintenance Obligations.  Landlord’s maintenance obligations are
limited to the obligations specifically set forth in this Section 7.


(a)           Warranty Period Work.  Landlord shall, as and to the extent required
under Section 3 above, repair all components of the Building’s Systems which
Tenant specifically identifies and describes as not being in good working
condition or repair in a written notice delivered to Landlord prior to the
expiration of the Warranty Period.  Such
work shall be at Landlord’s sole cost and expense and shall not be part of
Operating Expenses.


(b)           Building’s Structure.  Subject to Tenant’s obligations under Section
10(b), Landlord shall repair and maintain the Building’s Structure.  The Building’s Structure does not include
exterior surfaces, roof membranes, skylights, windows, glass or plate glass,
doors or overhead doors, special fronts, or office entries, dock bumpers, dock
plates or levelers, loading areas and docks, and loading dock equipment or any
other items not expressly set forth in Section 1 above as being part of the
Building’s Structure, all of which shall be maintained, repaired and replaced,
as necessary, by Tenant.  Such work shall
be at Landlord’s sole cost and expense and shall not be part of Operating
Expenses.


(c)           Water and Sewer Mains.  Landlord shall repair and maintain the water
and sewer mains serving the Premises up to the points of common
connection.  Such work shall be at
Landlord’s sole cost and expense and shall not be part of Operating Expenses.


(d)           Exterior Compliance with Laws.  Subject to Tenant’s obligations under Section
10(b), Landlord shall make any modifications, alterations or improvements to
the exterior portions of the Premises required by Laws in effect and as
interpreted as of the Effective Date. 
Such work shall be at Landlord’s sole cost and expense and shall not be
part of Operating Expenses.


(e)           Outside Areas, Landscaping, Etc.  Landlord shall maintain the areas of the
Premises outside the Building, including landscaping and general property
management duties, and the costs thereof shall be part of Operating Costs; in addition,
Tenant shall pay to Landlord a property management fee equal to two and
one-half percent (2.5%) of the Basic Rent payable by Tenant under this Lease,
and such property management fee shall be payable 100% by Tenant
notwithstanding Tenant’s Proportionate Share during the first two years of the
Term.  Notwithstanding the foregoing, but
subject to Section 8(f) below, at any time during the Term, Tenant may elect by
written notice to Landlord to take over all of Landlord’s obligations under
this Section 7(e), in which event starting on the first day of the second full
calendar month following delivery of such notice, (i) Tenant shall be
responsible, at Tenant’s sole cost and expense, to perform all of the
obligations under this Section 7(e) (it being understood that











such costs shall not be
part of Operating Expenses and that Tenant shall be responsible for 100% of
such costs), (ii) Landlord shall have no further obligations under this Section
7(e), and (iii) the property management fee shall be reduced to one percent
(1%) of the Basic Rent payable by Tenant under this Lease.  Notwithstanding the foregoing, any work which
is required under this Section 7(e) but which constitutes a Major Capital
Expenditure under Paragraph 4 of Exhibit G shall be paid for and
performed as provided thereunder.


(f)            Air
Handler Replacement.  Landlord
shall replace the seven (7) existing air handler units and related system
components in the Building in accordance with plans which are appropriate for a
standard research and development buildout and otherwise reasonably acceptable
to Landlord and Tenant.  The cost of such
work shall be initially borne by Landlord, but (i) the cost up to one
$1,000,000.00 shall be shared by Landlord and Tenant in proportions equal to
the relationship between the length of the remaining Term (including any
Extension Period if the applicable option to extend is then or thereafter
exercised by Tenant) and the length of the useful life of the new air handler
units (which useful life is eighteen (18) years), and (ii) any cost in excess
of $1,000,000.00 shall be paid entirely by Tenant on an amortized basis over
the remaining portion of the initial Term but only if and to the extent that
the total amount of any such excess cost was approved in advance by Tenant
prior to the landlord’s performance of the work.  Upon completion of such work, Tenant shall
pay its portion of the cost on an amortized basis over the remaining months of
the Term, as provided in the immediately preceding sentence, using the Amortization
Interest Rate (as defined in Paragraph 4 of Exhibit G), along with Basic Rent,
as part of Operating Costs, provided that such portion shall be payable 100% by
Tenant notwithstanding Tenant’s Proportionate Share during the first two years
of the Term.  Notwithstanding anything to
the contrary in this Lease, including the provisions of Section 3 regarding the
Warranty Period, Landlord shall have no obligations with respect to the
maintenance, repair or replacement of the air handler units and related system
components, except as expressly set forth in this Section 7(f), as well as
Landlord’s obligations under Section 3 (concerning the assignment for the
benefit of Tenant of all warranties and/or service contracts related to the air
handler units), Section 15 (relating to the repair/replacement of any damage to
the air handler units caused by a condemnation), and Section 16 (relating to
the repair/replacement of any damage to the air handler units caused by a
casualty).


                 Notwithstanding anything to the contrary in this
Section 7 or elsewhere in this Lease (but subject to the waiver of subrogation
provisions set forth in Section 12(b), as applicable), Landlord shall not be
responsible for the payment or performance of any maintenance, repair or
replacement work (i) unless and until Tenant notifies Landlord of the need
therefor in writing, (ii) which is required by Laws and is Tenant’s
responsibility under Section 10(b) below, (iii) which arises from any damage
caused by the acts or omissions of any Tenant Party or failure to comply with
Tenant’s obligations under this Lease, (iv) which is performed at Tenant’s
request as an elective or upgrade item, or (v) to the extent such work requires
that any costs be incurred and/or any specialized consultants be hired, which
costs would not be incurred or which consultants would not be hired were it not
for the existence of any improvement, alteration or other item constructed or
installed in the Premises for Tenant’s particular and unique use of the
Premises (including as part of the Work).


8.             Improvements; Alterations;
Tenant’s Maintenance and Repair Obligations.


                (a)           Improvements; Alterations.


(1)           In General.  Improvements to the Premises shall be
installed at Tenant’s expense only in accordance with plans and specifications
which have been previously submitted to and approved in writing by Landlord,
and by engineers, contractors and subcontractors which have been previously
approved in writing by Landlord, which approval shall be governed by the
provisions set forth in this Section 8(a). 
No alterations or physical additions in or to the Premises may be made
without Landlord’s prior written consent, which shall not be unreasonably
withheld, conditioned or delayed; however, Landlord may withhold its consent to
any alteration or addition that would materially adversely affect (in the
reasonable discretion of Landlord) (a) the Building’s Structure or the Building’s
Systems (including the Building’s restrooms or mechanical rooms), (b) the
exterior appearance of the Building, or (c) the provision of services to other
Building occupants, if applicable. 
Except as expressly provided in Section 8(g) below, Tenant shall not
paint or install lighting or decorations, signs, window or door lettering, or
advertising media of any type visible from the exterior of  the Premises without the prior written
consent of Landlord, which consent shall not be unreasonably withheld,
conditioned or delayed.  Whenever Landlord’s
consent











or approval is
required under this Section 8, if Landlord fails to respond to Tenant in
writing within fifteen (15) days after receipt of a specific, written request
from Tenant, and such failure continues for more than ten (10) days after
receipt of a second specific, written request from Tenant (which second requests
states the following in bold, capital letters: 
“THIS IS THE SECOND REQUEST FOR LANDLORD’S APPROVAL PURSUANT TO SECTION
8(a)(1) OF THE LEASE, AND LANDLORD’S FAILURE TO RESPOND WITHIN TEN (10) DAYS
WILL BE DEEMED LANDLORD’S APPROVAL OF THE ITEMS IN QUESTION”), then Landlord
shall be deemed to have granted its consent or approval to such request.  All alterations, additions, and improvements
shall be constructed, maintained, and used by Tenant, at its risk and expense,
in accordance with all Laws; Landlord’s consent to or approval of any
alterations, additions or improvements (or the plans therefor) shall not
constitute a representation or warranty by Landlord, nor Landlord’s acceptance,
that the same comply with sound architectural and/or engineering practices or
with all applicable Laws, and Tenant shall be solely responsible for ensuring
all such compliance.  All alterations,
additions and improvements made by Tenant shall become the property of Landlord
upon installation and shall remain on and be surrendered with the Premises upon
the expiration or sooner termination of this Lease, unless Landlord requires
the removal of such alterations, additions or improvements.  Notwithstanding the foregoing:  (a) Tenant shall not be required to remove
any alterations, additions or improvements which, in Landlord’s reasonable
estimation, constitute generic and customary office improvements and which are
approved by Landlord as and to the extent required under this Lease; and (b)
upon Tenant’s specific, written request at the time it seeks Landlord’s
approval of any alteration, addition or improvement (including the Work),
Landlord agrees to indicate in writing whether such alteration, addition or
improvement constitutes generic and customary office improvements and, if not,
whether Landlord will require such alteration, addition or improvement to be
removed upon the expiration or earlier termination of this Lease, and if
Landlord fails to indicate a requirement that such alteration, addition or
improvement be removed, and such failure continues for more than ten (10) days
after receipt of a second specific, written request from Tenant (which second
requests states the following in bold, capital letters:  “THIS IS THE SECOND REQUEST FOR LANDLORD’S
REMOVAL DETERMINATION PURSUANT TO SECTION 8(a)(1) OF THE LEASE, AND LANDLORD’S
FAILURE TO RESPOND WITHIN TEN (10) DAYS WILL RESULT IN NO REQUIREMENT THAT
TENANT REMOVE THE ITEMS IN QUESTION”), then Tenant shall not be required to
remove such alteration, addition or improvement.  Notwithstanding the foregoing, except to the
extent otherwise indicated  on the
preliminary plans identified on Schedule 1 attached to Exhibit D, Tenant
shall not be required to remove any portions of the Work, so long as such
portions of the Work are constructed strictly in accordance with all Laws, with
such preliminary plans and the Working Drawings based on those preliminary
plans and approved by Landlord in accordance with Exhibit D.


(2)           Minor Alterations.  Notwithstanding Section 8(a)(1) above, Tenant,
without Landlord’s prior written consent (but subject to the other terms and
conditions of this Section 8, including Section 8(c) below), shall be permitted
to make alterations to the Premises that do not affect the Building’s  Structure, do not materially affect the
Building’s Systems and do not materially affect the appearance of the Building
viewed from the exterior, provided that: (a) such alterations do not exceed
$50,000 individually or $150,000 in the aggregate; (b) Tenant shall timely
provide Landlord the information required pursuant to Section 8(c) below; (c)
Tenant shall notify Landlord in writing within thirty (30) days of completion
of the alteration and deliver to Landlord a set of the plans and specifications
therefor, either “as built” or marked to show construction changes made; and
(d) Tenant shall, upon Landlord’s request, remove the alteration at the
termination of the Lease and restore the Premises to its condition prior to
such alteration; provided, however, that, within ten (10) days after a
specific, written request from Tenant delivered together with Tenant’s notice
of completion of the alteration, Landlord agrees to indicate in writing whether
Landlord will require such alteration to be removed upon the expiration or
earlier termination of this Lease, and if Landlord fails to indicate within
such 10-day period a requirement that such alteration, addition or improvement
be removed, and such failure continues for more than ten (10) days after
receipt of a second specific, written request from Tenant (which second
requests states the following in bold, capital letters:  “THIS IS THE SECOND REQUEST FOR LANDLORD’S
REMOVAL DETERMINATION PURSUANT TO SECTION 8(a)(2) OF THE LEASE, AND LANDLORD’S
FAILURE TO RESPOND WITHIN TEN (10) DAYS WILL RESULT IN NO REQUIREMENT THAT
TENANT REMOVE THE ITEMS IN QUESTION”), then Tenant shall not be required to
remove such alteration.











(b)           Repairs; Maintenance.  Except as expressly set forth to be Landlord’s
responsibility under Sections 7, 15 and 16, Tenant, at its sole expense, shall
repair, replace and maintain in good, clean, safe, and operable condition and
in accordance with all Laws and the equipment manufacturer’s suggested service
programs, all portions of the Premises, including entries, doors, ceilings,
windows, interior walls, and the interior side of demising walls, and heating,
ventilation and air conditioning systems (including any evaporative units), and
other building and mechanical systems serving the Premises.  Such repair and replacements include capital
expenditures and repairs whose benefit may extend beyond the Term; provided
that any item which constitutes a Major Capital Expenditure under Paragraph 4
of Exhibit G shall be paid for and performed as provided thereunder.


(c)           Performance of Work.  All work described in this Section 8, or
otherwise performed by or for Tenant under this Lease, shall be performed only
by contractors and subcontractors approved in writing by Landlord, which
approval shall not be unreasonably withheld, conditioned or delayed.  Tenant shall cause all contractors and
subcontractors to procure and maintain insurance coverage naming Landlord,
Landlord’s property management company and Landlord’s asset management company
as additional insureds against such risks and in such amounts as Landlord may
reasonably require and with reputable, credit-worthy insurance companies.  Tenant shall provide Landlord with the
identities, mailing addresses and telephone numbers of all persons performing
work or supplying materials costing in excess of $5,000 prior to beginning such
construction and Landlord may post on and about the Premises notices of
non-responsibility pursuant to applicable Laws. 
All such work shall be performed in accordance with all Laws and in a
good and workmanlike manner so as not to damage the Premises (including the
Building, the Building’s Structure and the Building’s Systems) and in
accordance with all approved plans for such work, if applicable.  Subject to Section 8(a)(2) above, all such
work which may materially affect the Building’s Structure or the Building’s
Systems must be approved by an engineer reasonably acceptable to Landlord, at
Tenant’s expense, with no markup or additional fee by Landlord.  Notwithstanding anything to the contrary in
this Section 8, if any work affecting the roof of the Building may or could
void or reduce the warranty on the roof, then it shall be deemed reasonable for
Landlord to withhold its approval of such work.


(d)           Mechanic’s Liens.  All work performed, materials furnished, or
obligations incurred by or at the request of a Tenant Party hereunder shall be
deemed authorized and ordered by Tenant only, and Tenant shall not permit any
mechanic’s liens to be filed against the Premises in connection therewith.  Upon completion of any such work, Tenant
shall deliver to Landlord final lien waivers from all contractors,
subcontractors and materialmen who performed such work costing in excess of
$5,000.  If any mechanics or materialmans
lien is filed, then Tenant shall, within fifteen days after Landlord has
delivered notice of the filing thereof to Tenant (or such earlier time period
as may be necessary to prevent the forfeiture of the Premises or any interest
of Landlord therein or the imposition of a civil or criminal fine with respect thereto),
either (1) pay the amount of the lien and cause the lien to be released of
record, or (2) diligently contest such lien and deliver to Landlord a bond or
other security reasonably satisfactory to Landlord.  If Tenant fails to timely take either such
action, then Landlord may pay the lien claim, and any amounts so paid,
including expenses and interest at the Default Rate from the time of Landlord’s
payment, shall be paid by Tenant to Landlord within ten business days after
Landlord has invoiced Tenant therefor. 
Landlord and Tenant acknowledge and agree that their relationship is and
shall be solely that of “landlord-tenant” (thereby excluding a relationship of “owner-contractor,”
“owner-agent” or other similar relationships). 
Accordingly, all materialmen, contractors, artisans, mechanics, laborers
and any other persons now or hereafter contracting with Tenant, any contractor
or subcontractor of Tenant or any other Tenant Party for the furnishing of any
labor, services, materials, supplies or equipment with respect to any portion
of the Premises, at any time from the Effective Date until the end of the Term,
are hereby charged with notice that they look exclusively to Tenant to obtain
payment for same.  Nothing herein shall
be deemed a consent by Landlord to any liens being placed upon the Premises or
Landlord’s interest therein due to any work performed by or for Tenant or
deemed to give any contractor or subcontractor or materialman any right or
interest in any funds held by Landlord to reimburse Tenant for any portion of
the cost of such work.  Without limiting
the generality of the foregoing, Tenant shall notify Landlord in writing no
later than one (1) day after the commencement of any work or the furnishing of
any materials at or to the Premises in order that Landlord shall be able timely
to post and record Notices of Non-Responsibility.  Tenant shall defend, indemnify and hold
harmless Landlord and its agents and representatives from and against all
claims, demands, causes of action, suits, judgments, damages and expenses
(including attorneys’ fees) in any way arising from or relating to the failure
by any Tenant Party to pay for any work performed, materials furnished, or
obligations incurred by or at the request of a Tenant Party.  This indemnity provision shall survive
termination or expiration of this Lease.











(e)           Janitorial Services.  Tenant, at its sole expense, shall provide
its own janitorial services to the Premises and shall maintain the Premises in
a clean and safe condition.  Tenant shall
store all trash and garbage in receptacles and shall, at its sole expense,
arrange for the regular pickup of such trash and garbage.  If Tenant fails continuously and diligently
to provide janitorial services to the Premises or trash removal services in compliance
with the foregoing, Landlord, in addition to any other rights and remedies
available to it, may cure such failure, and Tenant shall pay to Landlord the
cost thereof, together with interest thereon at the Default Rate from the time
of Landlord’s payment, plus an administrative fee equal to 5% of such cost,
within ten days after Landlord delivers to Tenant an invoice therefor.


(f)            Landlord’s Right to Perform Tenant’s Obligations.  If Tenant fails continuously and diligently
to perform any of Tenant’s maintenance, repair and/or replacement obligations
under this Lease, Landlord, in addition to any other rights and remedies
available to it, may elect (but without any obligation to do so) (i) to perform
such obligation(s) on a one-time basis at Tenant’s cost, including interest
thereon at the Default Rate from the time of Landlord’s payment, or (ii) to
take over the performance of such obligation(s) for some or all of the
remainder of the Term at Tenant’s cost, including an additional management fee
equal to three percent (3%) of such cost. 
For clarity, all such costs shall be payable 100% by Tenant
notwithstanding Tenant’s Proportionate Share during the first two years of the
Term.


(g)           Signage.  Notwithstanding Section 8(a) above,
throughout the Term, Tenant, and its permitted subtenants, affiliates and/or
transferees, shall have the right to install building and monument signs on, in
or about the Premises, subject to Landlord’s prior approval, which shall not be
unreasonably withheld, conditioned or delayed, and to all applicable Laws.  Tenant shall be responsible for maintaining
any such signs in good condition and shall remove such signs at the expiration
or earlier termination of this Lease. 
Tenant shall repair all damage to the Premises caused by the
installation, maintenance or removal of such signs.


(h)           Rooftop Communications Equipment.  Tenant, or any permitted assignee or
permitted subtenant, shall have the exclusive right to install and operate
antennas, satellite dishes and related communications equipment on the roof of
the building; provided that such equipment shall be for Tenant’s own use, shall
not have a negative impact on the appearance of the Building, shall be in
compliance with plans and specifications approved in advance by Landlord (which
approval shall not be unreasonably withheld, conditioned or delayed) and with
all applicable Laws, shall be in a location subject to Landlord’s approval,
which approval shall not be unreasonably withheld, conditioned or delayed, and
shall otherwise comply with the terms and conditions of this Section 8.  Tenant shall be solely responsible for all
costs related to such equipment, including the costs of designing, fabricating,
engineering, permitting, installing, screening and maintaining any such equipment
in good condition and shall remove all such equipment at the expiration or
earlier termination of this Lease at Tenant’s sole cost and expense.  Tenant shall repair all damage to the
Premises caused by the installation, maintenance or removal of such equipment.  Tenant shall not have the right to use any of
the allowances provided in Exhibit D toward any of the costs related to
such communications equipment.


(i)            Generator/UPS. 
Tenant, or any permitted assignee of Tenant’s entire
interest under this Lease, shall have the exclusive right to install and
operate a backup generator in the area of the Premises outside of the Building;
provided that such generator shall be for Tenant’s own use, shall not have a
negative impact on the appearance of the Premises, shall be in compliance with
plans and specifications approved in advance by Landlord (which approval shall
not be unreasonably withheld, conditioned or delayed) and with all applicable
Laws, shall be in a location subject to Landlord’s approval, which approval
shall not be unreasonably withheld, conditioned or delayed, and shall otherwise
comply with the terms and conditions of this Section 8.  Tenant shall be solely responsible for all
costs related to the generator, including the costs of designing, fabricating,
engineering, permitting, installing, screening and maintaining the generator in
good condition, provided that Tenant may use the allowances provided in Exhibit
D toward the costs of acquiring and installing the generator.  If Tenant uses the allowances provided in Exhibit
D toward the costs of acquiring and installing the generator, then the
generator and any related items shall be the property of Landlord and shall
remain at the Premises at the expiration or earlier termination of this Lease,
unless Landlord requires removal by Tenant. 
If Tenant does not use any of the allowances provided in Exhibit D
toward the costs of acquiring and installing the generator (or if Tenant uses
such allowances but Landlord nevertheless requires removal), then Tenant shall
remove the generator and any related items at the expiration or earlier
termination of this Lease at Tenant’s sole cost and expense, in which case the
generator shall











become the property of
Tenant.  Tenant shall repair all damage
to the Premises caused by the installation, maintenance or removal of the
generator and any related items.


                9.             Utilities; Licenses and
Permits.


(a)           Utilities.  Tenant shall, at its sole cost and expense,
contract for and pay for all water, gas, electricity, heat, telephone, sewer,
sprinkler charges and other utilities and services used at the Premises,
together with any taxes, penalties, surcharges, connection charges, maintenance
charges, and the like pertaining to Tenant’s use of the Premises.  Landlord may, at Tenant’s expense, separately
meter and bill Tenant directly for its use of any such utility service.  To the extent any utility service for the
Premises is submetered, the meter shall be read by Landlord or Landlord’s
designee, and Tenant shall pay to Landlord, within 30 days after receipt of an
invoice therefor, the cost of such service based on the actual rates charged
for such service by the utility company furnishing such service, including all
fuel adjustment charges, demand charges and taxes.  To the extent that any particular utility is
not separately metered or submetered as provided above (e.g., water or sewer
charges), Landlord shall, using its good-faith, reasonable judgment, allocate
the expenses for such utility among the existing users of such utility based
upon square footage, usage and/or otherwise in accordance with industry
standards.  Tenant, at its expense, shall
obtain all utility services for the Premises (other than a utility that is
submetered or otherwise provided to the Premises by Landlord), including making
all applications therefor, obtaining meters and other related equipment, and
paying all deposits and connection charges. 
Landlord shall not be liable for any interruption or failure of utility
service to the Premises, and such interruption or failure of utility service
shall not be a constructive eviction of Tenant, constitute a breach of any
implied warranty, or entitle Tenant to any abatement of Tenant’s obligations
hereunder.  If, however, Tenant is
prevented from using the Premises for more than 7 consecutive days because of
the unavailability of any such service, Tenant promptly notifies Landlord of
such unavailability, such unavailability was caused by Landlord or any of
Landlord’s agents, contractors or invitees, and restoration of such service is
within the reasonable control of Landlord, then Tenant shall, as its exclusive
remedy be entitled to a reasonable abatement of Rent for each consecutive day
(after such 7-day period) that Tenant is so prevented from using the
Premises.  Rent shall not abate by reason
of the interruption, insufficiency, unavailability or discontinuance of such
service if Tenant does not promptly notify Landlord of such unavailability or
if such unavailability or discontinuance was not caused by Landlord and
restoration of such service is not within the reasonable control of Landlord.


(b)           Licenses and Permits.  Tenant shall, at its sole cost and expense,
obtain and keep in force during the Term, and all extensions thereof, all
licenses, certificates and permits necessary for it to use the Premises in
accordance with applicable Laws.  Upon
Landlord’s request, Tenant shall promptly deliver to Landlord copies of all
such licenses, certificates and permits.


(c)           Landlord’s Right to Perform Tenant’s Obligations.  If any Event of Default by Tenant related to
its failure to perform any of its obligations under this Section 9 shall occur,
then Landlord may, if it so elects but expressly without any obligation to do
so, following the expiration of any applicable notice and cure period provided
herein, in addition to any other remedies provided herein, make such
payments.  Any out-of-pocket sums
expended by Landlord with respect to any of the foregoing, together with
interest thereon at the Default Rate from the time of Landlord’s payment, shall
be deemed to be Additional Rent owing by Tenant to Landlord and shall be due
and payable within 30 days after written request therefor.


                10.           Use; Compliance With Laws.


(a)           Use.  Tenant may use the Premises only for the
Permitted Use, shall comply with all Laws relating to the use, condition,
access to, and occupancy of the Premises and will not commit waste, overload
the Building’s Structure or the Building’s Systems or subject the Premises to
use that would damage the Premises.  The
Premises shall not be used for any use which is disreputable, creates
extraordinary fire hazards, or results in an increased rate of insurance on the
Building or its contents (unless Tenant agrees to pay for such increase), or
for the storage of any Hazardous Materials (except as provided in Section 27
hereto).  Except for parking of cars and
a limited number of trucks in the normal course conducting Tenant’s operations
at the Premises, outside storage, including storage of trucks or other
vehicles, is prohibited without Landlord’s prior written consent, which shall
not be unreasonably withheld, conditioned or delayed. If, because of a Tenant
Party’s acts or because Tenant vacates the











Premises, the rate of
insurance on the Building or its contents increases, then Tenant shall pay to
Landlord the amount of such increase on demand, and acceptance of such payment
shall not waive any of Landlord’s other rights. 
Tenant shall conduct its business and control each other Tenant Party so
as not to create any nuisance or unreasonably interfere with other tenants (if
any) or Landlord in its management of the Building.


(b)           Compliance With Laws.  Tenant shall not do or permit anything to be
done in or about the Premises or the Building that will in any way violate or
conflict with any Law now in force or hereinafter enacted.  Tenant, at its sole cost and expense, shall
promptly comply with all present and future Laws (including any changes in
interpretation thereof) relating to the use, condition, access to, and occupancy
of the Premises and the Building, including Title III of the Americans With
Disabilities Act of 1990 (“ADA”),
any state laws governing handicapped access or architectural barriers, and all
rules, regulations, and guidelines promulgated under such Laws, as amended from
time to time.  Tenant shall promptly
furnish Landlord with any notices received from any insurance company or
governmental agency or inspection bureau regarding any unsafe or unlawful
conditions within the Premises or the Building or the violation of any
Law.  Without limiting the generality of
the foregoing, Tenant, at its sole cost and expense, shall perform all work to
the Premises and the Building, including structural work if applicable,
required to effect such compliance with Laws (or, at Landlord’s election,
Landlord may perform any such structural work at Tenant’s cost) as a result of
or in any way relating to (i) Tenant’s use or occupancy of the Premises or the
Building, (ii) Tenant’s application for any permit or governmental approval,
(iii) any modifications, alterations or improvements made to, within or about
the Premises or the Building by or on behalf of Tenant or any Tenant Party,
and/or (iv) any new or change in Law or change in interpretation thereof;
provided, however, that if the cost of any work or other modification, whether
structural or otherwise, which results from any new or change in Law or change
in interpretation thereof is considered a capital expenditure under GAAP and
exceeds $50,000.00, then, subject to the penultimate sentence of Paragraph 4 of
Exhibit G, such work or other modification shall constitute a Major Capital
Expenditure under Paragraph 4 of Exhibit G and shall be paid for and
performed as provided thereunder.


                11.           Assignment and Subletting.


(a)           Transfers.  Except as provided in Sections 11(h) or
11(i), Tenant shall not, without the prior written consent of Landlord, (1)
assign, transfer, or encumber this Lease or any estate or interest herein,
whether directly or by operation of law, (2) permit any other entity to become
Tenant hereunder by merger, consolidation, or other reorganization, (3) if
Tenant is an entity other than a corporation whose stock is publicly traded,
permit the transfer of an ownership interest in Tenant so as to result in a
change in the current control of Tenant, (4) sublet any portion of the
Premises, (5) grant any license, concession, or other right of occupancy of any
portion of the Premises, or (6) permit the use of the Premises by any parties
other than Tenant (any of the events listed in Section 11(a)(1) through 11(a)
(6) being a “Transfer”).


(b)           Consent Standards.  Landlord shall not unreasonably withhold its
consent to any assignment or subletting of the Premises, provided that, in
Landlord’s reasonable business judgment, the proposed transferee (1) is
creditworthy, (2) does not have an unsavory reputation in the business
community, (3) will use the Premises only for the Permitted Use, (4) is not a
governmental entity, or subdivision or agency thereof, and (5) is not a person
or entity with whom Landlord is then, or has within the prior six months been
in active negotiations relating to the potential lease of space within ten
miles of the Premises, or any Affiliate of any such person or entity;
otherwise, Landlord may withhold its consent in its sole discretion.  Additionally, Landlord may withhold its
consent in its sole discretion to any proposed Transfer if any Event of Default
by Tenant then exists.  Notwithstanding
any contrary provision of law, including California Civil Code Section
1995.310, Tenant shall have no right, and Tenant hereby waives and relinquishes
any right, to cancel or terminate this Lease in the event Landlord is
determined to have unreasonably withheld or delayed its consent to a proposed
Transfer.


(c)           Request for Consent.  If Tenant requests Landlord’s consent to a
Transfer, then, at least 15 business days prior to the effective date of the
proposed Transfer, Tenant shall provide Landlord with a written description of
all terms and conditions of the proposed Transfer, copies of the proposed
documentation, and the following information about the proposed transferee:
name and address; reasonably satisfactory information about its business and
business history; its proposed use of the Premises; banking, financial, and
other credit information; and general references sufficient to enable Landlord
to determine the proposed transferee’s creditworthiness and











character.  Concurrently with Tenant’s notice of any
request for consent to a Transfer, Tenant shall pay to Landlord a fee of $1,000
to defray Landlord’s expenses in reviewing such request, and Tenant shall also
reimburse Landlord promptly upon request for its reasonable out-of-pocket
attorneys’ fees incurred in connection with considering any request for consent
to a Transfer.


(d)           Conditions to Consent.  If Landlord consents to a proposed Transfer,
then the proposed transferee shall deliver to Landlord a written agreement
whereby it expressly assumes the applicable obligations of Tenant hereunder;
however, any transferee of less than all of the space in the Premises shall be
liable only for obligations under this Lease that are properly allocable to the
space subject to the Transfer for the period of the Transfer.  No Transfer shall release Tenant from its
obligations under this Lease, but rather Tenant and its transferee shall be
jointly and severally liable therefor. 
Landlord’s consent to any Transfer shall not waive Landlord’s rights as
to any subsequent Transfers.  If an Event
of Default occurs while the Premises or any part thereof are subject to a
Transfer, then Landlord, in addition to its other remedies, may collect
directly from such transferee all rents becoming due to Tenant and apply such
rents against Rent.  Tenant authorizes
its transferees to make payments of rent directly to Landlord upon receipt of
notice from Landlord to do so following the occurrence of an Event of Default
hereunder.  Tenant shall pay for the cost
of any demising walls or other improvements necessitated by a proposed
subletting or assignment, which improvements shall be subject to Section 8
hereof.


(e)           Attornment by Subtenants.  Each sublease by Tenant hereunder shall be
subject and subordinate to this Lease and to the matters to which this Lease is
or shall be subordinate, and each subtenant by entering into a sublease is
deemed to have agreed that in the event of termination, re-entry or
dispossession by Landlord under this Lease, Landlord may, at its option, take
over all of the right, title and interest of Tenant, as sublandlord, under such
sublease, and such subtenant shall, at Landlord’s option, attorn to Landlord
pursuant to the then executory provisions of such sublease, except that
Landlord shall not be (1) liable for any previous act or omission of Tenant
under such sublease, (2) subject to any counterclaim, offset or defense that
such subtenant might have against Tenant, (3) bound by any previous
modification of such sublease not approved by Landlord in writing or by any
rent or additional rent or advance rent which such subtenant might have paid
for more than the current month to Tenant, and all such rent shall remain due
and owing, notwithstanding such advance payment, (4) bound by any security or
advance rental deposit made by such subtenant which is not delivered or paid
over to Landlord and with respect to which such subtenant shall look solely to
Tenant for refund or reimbursement, or (5) except for Landlord’s obligations
expressly set forth in this Lease, obligated to perform any other work in the
subleased space or to prepare it for occupancy, and in connection with such
attornment, the subtenant shall execute and deliver to Landlord any instruments
Landlord may reasonably request to evidence and confirm such attornment.  Each subtenant or licensee of Tenant shall be
deemed, automatically upon and as a condition of its occupying or using the
Premises or any part thereof, to have agreed to be bound by the terms and
conditions set forth in this Section 11(e). 
The provisions of this Section 11(e) shall be self-operative, and no
further instrument shall be required to give effect to this provision.


(f)            Cancellation.  Landlord may, within 30 days after submission
of Tenant’s written request for Landlord’s consent to an assignment or
subletting for all or substantially all of the remainder of the Term (provided
that the space subject to such request, together with any space previously
assigned or subleased,  constitutes at
least sixty-six percent (66%) of the square feet of the Premises), cancel this
Lease as to the portion of the Premises proposed to be sublet or assigned as of
the date the proposed Transfer is to be effective by delivering written notice
of cancellation to Tenant (“Cancellation
Notice”).  If Landlord
cancels this Lease as to any portion of the Premises, then this Lease shall
cease for such portion of the Premises and Tenant shall pay to Landlord all
Rent accrued through the cancellation date relating to the portion of the
Premises covered by the proposed Transfer. 
Thereafter, Landlord may lease such portion of the Premises to the
prospective transferee (or to any other person) without liability to
Tenant.  Notwithstanding the foregoing or
anything to the contrary contained in this Lease, (i) if Tenant rescinds the
proposed assignment or sublease by giving written notice to Landlord within
three (3) business days after receipt of the Cancellation Notice, then such
cancellation shall be void and this Lease shall continue in full force without
any such assignment or sublease, and (ii) this Section 11(f) shall not apply
to, and Landlord will have no right to cancel all or any portion of this Lease
in connection with, a Permitted Transfer under Section 11(h) or a Transfer to a
Strategic Partner under Section 11(i).















(g)           Additional Compensation


(1)           In General.  Tenant shall pay to Landlord, immediately
upon receipt thereof, fifty percent (50%) of the excess of (A) all compensation
received by Tenant for a Transfer less the actual out-of-pocket costs
reasonably incurred by Tenant with unaffiliated third parties specifically and
only for market brokerage commissions, reasonable legal fees (not to exceed
$5,000.00 in each case) and tenant improvement costs for work approved in
writing by Landlord (which approval shall not be unreasonably withheld,
conditioned or delayed), including demising walls, etc. over (B) the Rent
allocable to the portion of the Premises covered thereby.


(2)           Lease Months 1-24.  Notwithstanding Section 11(g)(1) above,
during Lease Months 1 through 24 of the initial Term, with respect to all
Transfers of portions of the Premises up to 40,000 square feet in the
aggregate, Tenant shall pay to Landlord, immediately upon receipt thereof,
twenty-five percent (25%) of the excess of (A) all compensation received by
Tenant for such Transfers less the actual out-of-pocket costs reasonably
incurred by Tenant with unaffiliated third parties specifically and only for
market brokerage commissions, reasonable legal fees (not to exceed $5,000.00 in
each case) and tenant improvement costs for work approved in writing by
Landlord (which approval shall not be unreasonably withheld, conditioned or
delayed), including demising walls, etc. over (B) the Rent allocable to the
portion of the Premises covered thereby; provided,
that, (i) immediately upon the Transfer of any portion of the
Premises up to 40,000 square feet in the aggregate, Tenant’s Proportionate
Share shall be increased by an amount equal to the quotient of the square feet
in such portion (as the numerator) and the total square feet in the Premises
(as the denominator), and (ii) the Basic Rent for such portion shall be deemed
to be zero dollars ($0.00).  For clarity,
during Lease Months 1 through 24 of the initial Term, Section 11(g)(1) shall in
any event apply to the portion of any such Transfers that are in excess of
40,000 square feet in the aggregate.


(h)           Permitted Transfers.  Notwithstanding Section 11(a), Tenant may
Transfer all or part of its interest in this Lease or all or part of the
Premises (a “Permitted Transfer”)
to the following types of entities (a “Permitted
Transferee”) without the written consent of Landlord:


(1)           an Affiliate of Tenant;


(2)           any corporation, limited partnership,
limited liability partnership, limited liability company or other business
entity in which or with which Tenant, or its corporate successors or assigns,
is merged or consolidated, in accordance with applicable statutory provisions
governing merger and consolidation of business entities or other reorganization
in which Tenant is not the surviving corporation, so long as (A) Tenant’s
obligations hereunder are assumed by the entity surviving such merger or
created by such consolidation or other reorganization; and (B) such surviving
or created entity (or an Affiliate thereof which provides an unconditional
guaranty of Tenant’s obligations under this Lease in form and content approved
in advance by Landlord in its commercially reasonable discretion) either (i)
has substantial experience operating the same line of business as Tenant and
has a total rent-adjusted debt to EBITDAR ratio of no more than four (4) or
(ii) has a credit rating of not less than two notches below “investment grade”
(i.e., a rating of at least “BB” by S&P and “Ba2” by Moody’s); or


(3)           any corporation, limited partnership,
limited liability partnership, limited liability company or other business
entity acquiring all or substantially all of Tenant’s assets, or a separate
division or line of Tenant’s business conducted at the Premises, if such entity
(or an Affiliate thereof which provides an unconditional guaranty of Tenant’s
obligations under this Lease in form and content approved in advance by
Landlord in its commercially reasonable discretion) either (i) has substantial
experience operating the same line of business as Tenant and has a total
rent-adjusted debt to EBITDAR ratio of no more than four (4) or (ii) has a
credit rating of not less than two notches below “investment grade” (i.e., a
rating of at least “BB” by S&P and “Ba2” by Moody’s).


Tenant shall promptly notify Landlord of any such
Permitted Transfer.  Tenant shall remain
liable for the performance of all of the obligations of Tenant hereunder;
provided, however, that (a) if Tenant no longer exists because of a merger,
consolidation, or acquisition, the surviving or acquiring entity shall
expressly assume in writing the obligations of Tenant hereunder, and (b) if the
Permitted Transfer is an assignment of Tenant’s entire interest 











under this Lease and the assignee (or an Affiliate
thereof which provides an unconditional guaranty of Tenant’s obligations under
this Lease in form and content approved in advance by Landlord in its
commercially reasonable discretion) has an “investment grade” credit rating
(i.e., a rating of at least “BBB-” by S&P and “Baa3” by Moody’s), then
Tenant shall be released of its obligations hereunder to the extent, and only
to the extent, such obligations are expressly assumed in writing by such
assignee.  Additionally, the Permitted
Transferee shall comply with all of the terms and conditions of this Lease,
including the Permitted Use, and the use of the Premises by the Permitted
Transferee may not violate any other agreements affecting the Premises or
Landlord’s interest therein.  Any excess
compensation received by Tenant in connection with a Permitted Transfer to an
Affiliate as described in Section 11(h)(1) above shall be shared by Landlord
and Tenant as and to the extent set forth in Section 11(g) above; provided,
however, that Tenant shall have no obligation to pay any excess compensation
that may be received in connection with a Permitted Transfer as described in
Section 11(h)(2) or 11(h)(3), except to the extent that such Permitted Transfer
includes a direct increase in rent charged to the surviving, created or
acquiring entity with respect to this Lease. 
No later than 30 days after the effective date of any Permitted
Transfer, Tenant agrees to furnish Landlord with (A) copies of the instrument
effecting any of the foregoing Transfers, (B) documentation establishing Tenant’s
satisfaction of the requirements set forth above applicable to any such
Transfer, and (C) evidence of insurance as required under this Lease with
respect to the Permitted Transferee.  The
occurrence of a Permitted Transfer shall not waive Landlord’s rights as to any
subsequent Transfers. Any subsequent Transfer by a Permitted Transferee shall
be subject to the terms of this Section 11.


(i)            Strategic Partners.  Notwithstanding Section 11(a), Tenant may
sublease part of the Premises, not to exceed twenty percent (20%) of the square
feet in Premises in the aggregate, to one or more Strategic Partners of Tenant
without the written consent of Landlord. 
As used herein, a “Strategic
Partner” shall mean any entity with whom Tenant is undertaking a
joint venture or similar joint research and development, marketing,
distribution, sales or development project at the Premises, provided that
Tenant is undertaking such joint venture or similar project as a bona fide
strategic endeavor in the interest of Tenant’s primary, non-real estate
related, business operations and not as an attempt to circumvent the sublease
restrictions set forth in this Section 11. 
Tenant shall give Landlord prior written notice of any anticipated
sublease to a Strategic Partner, together with documentation reasonably
evidencing the qualification of the proposed subtenant as a Strategic
Partner.  Tenant shall remain liable for
the performance of all of the obligations of Tenant hereunder.  Additionally, the Strategic Partner shall
comply with all of the terms and conditions of this Lease applicable to the
subleased portion of the Premises, including the Permitted Use, and the use of
the subleased portion of the Premises by the Strategic Partner may not violate
any other agreements affecting the Premises or Landlord’s interest
therein.  Any excess compensation
received by Tenant in connection with such sublease shall be shared by Landlord
and Tenant as and to the extent set forth in Section 11(g) above.  No later than 30 days after the effective
date of any sublease to a Strategic Partner, Tenant agrees to furnish Landlord
with (A) copies of the sublease and (B) evidence of insurance as required under
this Lease with respect to the Strategic Partner.


12.           Insurance; Waivers;
Subrogation; Indemnity.


(a)           Insurance.  Landlord and Tenant shall maintain insurance
policies in accordance with Exhibit H hereto.


(b)           No Subrogation.  Notwithstanding anything to the contrary
contained in this Lease, Landlord and Tenant each waives any claim it might
have against the other, and their respective agents, employees and subtenants,
for any damage to or theft, destruction, loss, or loss of use of any property,
to the extent the same is insured against under any insurance policy of the
types described in this Section 12 that covers the Premises, Landlord’s or
Tenant’s fixtures, personal property, or leasehold improvements, or is required
to be insured against under the terms hereof, regardless of whether the
negligence of the other party caused such Loss. 
Each party shall cause its insurance carrier to endorse all applicable
property insurance policies waiving the carrier’s rights of recovery under
subrogation or otherwise against the other party.


(c)           Indemnity.  Tenant shall defend with competent counsel
satisfactory to Landlord any claims made or legal actions filed or threatened
against Landlord (i) with respect to the violation of any Law or any provisions
of this Lease by Tenant or any Tenant Party, (ii) with respect to the death,
bodily injury, personal injury, or property damage occurring within the
Premises or resulting from Tenant’s use or occupancy of the Premises, or 











(iii) resulting from
Tenant’s activities in or about the Premises, and Tenant shall indemnify and
hold Landlord, Landlord’s partners, principals, members, employees, agents and
contractors harmless from any loss liability, penalties, or expense whatsoever
(including any loss attributable to vacant space which otherwise would have
been leased, but for such activities) resulting therefrom, except to the extent
(A) caused by negligence or willful misconduct of Landlord, its employees,
agents, contractors or invitees and (B) not covered by the insurance that
Tenant is required to carry under this Lease. 
Subject to the foregoing sentence, Landlord shall defend, indemnify and
hold harmless Tenant, its representatives, employees and agents from and
against all claims, demands, liabilities, causes of action, suits, judgments,
damages and expenses (including reasonable attorneys’ fees) arising from the
gross negligence or willful misconduct of Landlord or its employees, except to
the extent caused by the negligence or willful misconduct of Tenant or a Tenant
Party.  The indemnities set forth in this
Lease shall survive termination or expiration of this Lease and shall not
terminate or be waived, diminished or affected in any manner by any abatement
or apportionment of Rent under any provision of this Lease.  If any proceeding is filed for which
indemnity is required hereunder, the indemnifying party agrees, upon request
therefor, to defend the indemnified party in such proceeding at its sole cost
utilizing counsel satisfactory to the indemnified party.


13.           Subordination; Attornment;
Notice to Landlord’s Mortgagee.


(a)           Subordination.  This Lease shall be subordinate to any deed
of trust, mortgage, or other security instrument (each, a “Mortgage”), or any ground lease, master
lease, or primary lease (each, a “Primary
Lease”), that hereafter covers all or any part of the Premises
(the mortgagee under any such Mortgage, beneficiary under any such deed of
trust, or the lessor under any such Primary Lease is referred to herein as a “Landlord’s Mortgagee”); provided,
however, that such subordination shall only be effective if the Landlord’s
Mortgagee provides a commercially reasonable non-disturbance agreement
providing that, so long as this Lease is in full force and effect and there
exists no Event of Default hereunder, Tenant’s right to possession of the
Premises shall not be disturbed by reason of foreclosure, exercise of the
statutory power of sale, or receipt of a deed in lieu of foreclosure in the
case of any such Mortgage.  Any Landlord’s
Mortgagee may elect, at any time, unilaterally, to make this Lease superior to
its Mortgage, Primary Lease, or other interest in the Premises by so notifying
Tenant in writing.  The provisions of
this Section shall be self-operative and no further instrument of subordination
shall be required; however, in confirmation of such subordination and non-disturbance,
Tenant shall execute and return to Landlord (or such other party designated by
Landlord) within ten business days after written request therefor such
documentation, in recordable form if required, as a Landlord’s Mortgagee may
reasonably request to evidence the subordination of this Lease to such Landlord’s
Mortgagee’s Mortgage or Primary Lease (including a subordination,
non-disturbance and attornment agreement).


(b)           Attornment.  Tenant shall attorn to any party succeeding
to Landlord’s interest in the Premises, whether by purchase, foreclosure, deed
in lieu of foreclosure, power of sale, termination of lease, or otherwise, upon
such party’s request, and shall execute such agreements confirming such
attornment as such party may reasonably request; provided that such party
recognizes Tenant’s rights under this Lease, except that such party shall
not:  (a) be liable for any act or
omission of the original landlord under this Lease, provided, however, that
such party shall be obligated to cure all defaults or breaches of the Landlord
that are of a continuing nature (e.g., repair and maintenance obligations); (b)
be subject to any offsets or defenses which Tenant might have against the
Landlord under this Lease (prior to such party becoming landlord under this
Lease), except for those offset rights which (1) are expressly provided in this
Lease, (2) relate to periods of time following the acquisition of the Premises
by Landlord’s Mortgagee, and (3) Tenant has provided written notice to Landlord’s
Mortgagee and provided Landlord’s Mortgagee a reasonable opportunity to cure
the event giving rise to such offset event; (c) be bound by any Rent or
Additional Rent that is not actually received by such party which Tenant might
have paid to the original landlord under this Lease for more than the current
month or more than one (1) month prior to the due date for the then current
installment; (d) be liable for any deposits made or prepaid Rent paid by Tenant
hereunder unless such deposits or payments have been transferred to such party;
or (e) be bound by any amendment or modification of this Lease made without any
required lessor’s or lender’s consent.


(c)           Notice to Landlord’s Mortgagee.  Tenant shall not seek to enforce any remedy
it may have for any default on the part of Landlord without first giving
written notice by certified mail, return receipt requested, specifying the
default in reasonable detail, to any Landlord’s Mortgagee whose address has
been given to Tenant, and affording such Landlord’s Mortgagee a reasonable
opportunity to perform Landlord’s obligations hereunder.











(d)           Landlord’s Mortgagee’s Protection Provisions.  If Landlord’s Mortgagee shall succeed to the
interest of Landlord under this Lease, Landlord’s Mortgagee shall not be: (1)
liable for any act or omission of any prior lessor (including Landlord),
provided, however, that such party shall be obligated to cure all defaults or
breaches of this Lease of any prior lessor that are of a continuing nature
(e.g., repair and maintenance obligations); (2) bound by any rent or additional
rent or advance rent which Tenant might have paid for more than the current
month to any prior lessor (including Landlord) that is not actually received by
Landlord’s Mortgagee, and all such rent shall remain due and owing,
notwithstanding such advance payment; (3) bound by any security or advance
rental deposit made by Tenant which is not delivered or paid over to Landlord’s
Mortgagee and with respect to which Tenant shall look solely to Landlord for
refund or reimbursement; (4) bound by any amendment or modification of this
Lease that has the effect of (i) reducing the Rent owed by Tenant, (ii)
shortening or lengthening the Term, (iii) adding to or increasing Tenant’s
rights under this Lease, or (iv) materially increasing Landlord’s obligations
under this Lease, in each case made without Landlord’s Mortgagee’s consent and
written approval, except for those terminations, amendments and modifications
permitted to be made by Landlord without Landlord’s Mortgagee’s consent
pursuant to the terms of the loan documents between Landlord and Landlord’s
Mortgagee; (5) subject to the defenses which Tenant might have against any
prior lessor (including Landlord); and (6) subject to the offsets which Tenant
might have against any prior lessor (including Landlord) except for those
offset rights which (A) are expressly provided in this Lease, (B) relate to
periods of time following the acquisition of the Premises by Landlord’s
Mortgagee, and (C) Tenant has provided written notice to Landlord’s Mortgagee
and provided Landlord’s Mortgagee a reasonable opportunity to cure the event
giving rise to such offset event. 
Landlord’s Mortgagee shall have no liability or responsibility under or
pursuant to the terms of this Lease or otherwise after it ceases to own an
interest in the Premises, except for any liability or obligations hereunder
that accrue during Landlord’s Mortgagee’s ownership of the Premises.  Nothing in this Lease shall be construed to
require Landlord’s Mortgagee to see to the application of the proceeds of any loan,
and Tenant’s agreements set forth herein shall not be impaired on account of
any modification of the documents evidencing and securing any loan.


14.           Rules and Regulations.  Tenant shall comply with the rules and
regulations of the Premises which are attached hereto as Exhibit C.  Landlord may, from time to time, reasonably
change such rules and regulations for the safety, care, or cleanliness of the
Premises and related facilities, provided that such changes will not
unreasonably interfere with Tenant’s use of the Premises, increase the Rent, or
materially increase Tenant’s other obligations under this Lease, and are
enforced by Landlord in a non-discriminatory manner.  Tenant shall be responsible for the
compliance with such rules and regulations by each Tenant Party.


15.           Condemnation.


(a)           Total Taking.  If the entire Building or Premises are taken
by right of eminent domain or conveyed in lieu thereof (a “Taking”), this Lease shall terminate as
of the date of the Taking.


(b)           Partial Taking — Tenant’s Rights.  If any part of the Premises becomes subject
to a Taking and such Taking will prevent Tenant from conducting on a permanent
basis its business in the Premises in a manner reasonably comparable to that
conducted immediately before such Taking, then Tenant may terminate this Lease
as of the date of such Taking by giving written notice to Landlord within 30
days after the Taking, and Basic Rent and Additional Rent shall be apportioned
as of the date of such Taking.  If Tenant
does not terminate this Lease, then Rent shall be abated on a reasonable basis
as to that portion of the Premises rendered untenantable by the Taking.


(c)           Partial Taking — Landlord’s Rights.  If any material portion, but less than all,
of the Premises becomes subject to a Taking, or if Landlord is required to pay
any of the proceeds arising from a Taking to a Landlord’s Mortgagee, then
Landlord may terminate this Lease by delivering written notice thereof to
Tenant within 30 days after such Taking, and Basic Rent and Additional Rent
shall be apportioned as of the date of such Taking.  If Landlord does not so terminate this Lease,
then this Lease will continue, but if any portion of the Premises has been
taken, Rent shall abate as provided in the last sentence of Section 15(b).











(d)           Temporary Taking.  If all or any portion of the Premises becomes
subject to a Taking for a period of time of one (1) year or less, this Lease
shall remain in full force and effect and Tenant shall continue to perform all
of the terms, conditions and covenants of this Lease, including the payment of
Basic Rent and all other amounts required hereunder.  If any such temporary Taking terminates prior
to the expiration of the Term, Tenant shall restore the Premises as nearly as
possible to the condition prior to such temporary Taking, at Tenant’s sole cost
and expense.  Landlord shall be entitled
to receive the entire award for any such temporary Taking, except that Tenant
shall be entitled to receive the portion of such award which (1) compensates
Tenant for its loss of use of the Premises within the Term and (2) reimburses
Tenant for the reasonable out-of-pocket costs actually incurred by Tenant to
restore the Premises as required by this Section 15(d).


(e)           Award.  If any Taking occurs, then Landlord shall
receive the entire award or other compensation for the Premises, the Building,
and other improvements taken; provided, however, that Tenant shall be entitled
to pursue a claim (to the extent it will not reduce Landlord’s award) against
the condemnor for the value of Tenant’s personal property, alterations and
fixtures which Tenant is entitled to remove under this Lease, moving and
relocation costs, loss of business (including, without limitation, loss or
goodwill), and other claims it may have (including claims for rent attributable
to any portion of the Premises subject to a partial Taking without termination
of the Lease).  The rights of Landlord
and Tenant regarding any Taking shall be determined as provided in this Section,
and each party hereby waives the provisions of Section 1265.130 of the
California Code of Civil Procedure, and the provisions of any similar law
hereinafter enacted, allowing either party to petition the Supreme Court to
terminate this Lease and/or otherwise allocate condemnation awards between
Landlord and Tenant in the event of a Taking.


(f)            Repair.  If this Lease is not terminated under this
Section 15, Landlord shall, at its sole cost and expense and not as part of
Operating Costs, proceed with reasonable diligence as and to the extent reasonably
necessary to restore the remaining portion(s) of the Premises substantially to
their former condition, as and to the extent feasible to constitute a complete
and tenantable Premises; provided, however, that in no event shall Landlord be
required to spend more than the condemnation proceeds received by Landlord for
such repair.


16.           Fire or Other Casualty.


(a)           Repair Estimate.  If the Premises or the Building are damaged
by fire or other casualty (a “Casualty”),
Landlord shall, within 75 days after such Casualty, deliver to Tenant a good
faith, reasonable estimate (the “Damage
Notice”) of the time needed to repair the damage caused by such
Casualty, together with reasonable supporting documentation (including
confirmation of such estimate from a duly qualified and licensed general
contractor), and shall include in such notice an estimate of the date upon
which Landlord reasonably expects to have completed the restoration (the “Anticipated Restoration Date”).


(b)           Tenant’s Rights.  If a material portion of the Premises or the
Building is damaged by Casualty such that Tenant is prevented from conducting
its business in the Premises in a manner reasonably comparable to that
conducted immediately before such Casualty and Landlord estimates that the
damage caused thereby cannot be repaired within 240 days after the commencement
of repairs (the “Repair Period”),
then Tenant may terminate this Lease by delivering written notice to Landlord
of its election to terminate within 30 days after the Damage Notice has been
delivered to Tenant; provided, however, that if such damage occurs within
twelve (12) months of the last day of the Term and the time estimated to
substantially complete the repair exceeds fifty percent (50%) of the time then
remaining in the Term (expressly excluding any extensions not then exercised),
then Tenant may terminate this Lease by delivering written notice to Landlord
of its election to terminate within 30 days after the Damage Notice has been
delivered to Tenant .


(c)           Landlord’s Rights.  If a Casualty damages a material portion of
the Building and (1) Landlord estimates that the damage to the Building cannot
be repaired within the Repair Period, (2) the damage to the Building exceeds
50% of the replacement cost thereof (excluding foundations and footings), as
reasonably estimated by Landlord (and confirmed by a duly qualified and
licensed general contractor or duly qualified appraiser), and such damage
occurs during the last two years of the Term; provided, however, that Landlord
may not terminate this Lease pursuant to this clause (2) if (i) Tenant has any
remaining option to extend the Lease Term, and (ii) within thirty (30) days
after the date Tenant receives from Landlord written notification terminating
this Lease 











pursuant to the provisions
of this clause (2), Tenant delivers to Landlord written notice exercising such
extension option (“Tenant’s Termination
Override”) at 100% of Fair Market Rent to be determined within
15 days after the later of receipt of Tenant’s Termination Override or the date
that is twelve (12) months prior to the expiration of the 120th month of the initial Term or the expiration of
the First Extension Period, as applicable (and for purposes of this Section
16(c), it is understood that Tenant may exercise such extension option earlier
than the times set forth in Exhibit I), (3) adequate insurance proceeds
(excluding the amount of any insurance deductibles then carried by Landlord)
are not for any reason (other than Landlord’s failure to carry the insurance
policies it is required to carry under this Lease), including a decision made
by any Landlord’s Mortgagee, available to Landlord from Landlord’s insurance
policies to cover the cost of the required repairs, and Tenant does not agree
to fund such excess deficiency within fifteen (15) days after its receipt of a
written termination notice from Landlord, or (4) the damage to the Building
exceeds 66% of the replacement cost thereof (excluding foundations and
footings) and Landlord makes a good faith determination that restoring the
Building would be uneconomical and such damage occurs during the last five
years of the Term, then Landlord may terminate this Lease by giving written
notice of its election to terminate within 30 days after the Damage Notice has
been delivered to Tenant.


(d)           Repair Obligation.  If neither party elects to exercise any right
it may have to terminate this Lease, or neither party is entitled to terminate
this Lease, following a Casualty, then Landlord shall, as soon as reasonably
practicable after such Casualty, begin to repair the Premises and shall proceed
with reasonable diligence to restore the Premises to substantially the same
condition as they existed immediately before such Casualty; however, Landlord
shall not be required to repair or replace any alterations or improvements made
by Tenant within the Premises (which shall be promptly and with due diligence
repaired and restored by Tenant at Tenant’s sole cost and expense to the extent
of the insurance proceeds actually received by Tenant for the Casualty in
question, or the extent of the insurance proceeds Tenant would have received
but for Landlord’s failure to carry the insurance policies it is required to
carry under this Lease) or any furniture, equipment, trade fixtures or personal
property of Tenant or others in the Premises or the Building. Except for the
amount of any excess deficiency Tenant agrees to fund pursuant to Section
16(c)(3) above, Landlord’s repair and restoration obligations under this
Section 16(d) shall be performed at Landlord’s sole cost and shall not be part
of Operating Expenses, provided that Landlord’s obligation to repair or restore
the Premises shall be limited to the extent of the insurance proceeds actually
received by Landlord for the Casualty in question (or the extent of the
insurance proceeds Landlord would have actually received but for Landlord’s
failure to carry the insurance policies it is required to carry under this
Lease), plus the amount of any excess deficiency Tenant agrees to fund.  If this Lease is terminated under the
provisions of this Section 16, Landlord shall be entitled to the full proceeds
of the insurance policies providing coverage for all alterations and
improvements in the Premises (and, if Tenant has failed to maintain insurance
on such items as required by this Lease, Tenant shall pay Landlord an amount
equal to the proceeds Landlord would have received had Tenant maintained
insurance on such items as required by this Lease).  If Landlord shall have failed to complete the
restoration by a date that is thirty (30) days following the Anticipated
Restoration Date, and such failure was not caused in whole or in part by any
Tenant Party or events beyond Landlord’s reasonable control, then Tenant may
terminate this Lease by delivering written notice to Landlord of its intention
to terminate within sixty (60) days after the Anticipated Restoration Date;
provided, however, that such termination shall be automatically rescinded, and
this Lease shall continue in full force and effect, if Landlord substantially
completes the restoration within sixty (60) days after receipt of Tenant’s
notice of intention to terminate.


(e)           Abatement of Rent.  If the Premises are damaged by Casualty, Rent
for the portion of the Premises rendered untenantable by the damage shall be
abated on a reasonable basis from the date of damage until the completion of
Landlord’s repairs (or until the date of termination of this Lease by Landlord
or Tenant as provided above, as the case may be), except that Tenant shall
continue to pay Rent without abatement if such damage results from the gross
negligence or willful misconduct of Tenant or a Tenant Party.


(f)            Exclusive Remedy.  This Section 16 shall provide Tenant’s sole
and exclusive remedy in the event of damage or destruction to the Premises or
the Building, and Tenant, as a material inducement to Landlord entering into
this Lease, irrevocably waives and releases Tenant’s rights under California
Civil Code Sections 1932(2), 1933(4), 1941 and 1942.  No damages, compensation or claim shall be
payable by Landlord for any inconvenience, any interruption or cessation of
Tenant’s business, or any annoyance, arising from any damage to or destruction
of all or any portion of the Premises or the Building, except for the abatement
of rent provided in Section 16(e) above.











17.           Personal Property Taxes.  Tenant shall be liable for all taxes levied
or assessed against personal property, furniture, or fixtures placed by Tenant
in the Premises.  If any taxes for which
Tenant is liable are levied or assessed against Landlord or Landlord’s property
and Landlord elects to pay the same, or if the assessed value of Landlord’s
property is increased by inclusion of such personal property, furniture or
fixtures and Landlord elects to pay the taxes based on such increase, then
Tenant shall pay to Landlord, within 30 days following written request
therefor, the part of such taxes for which Tenant is primarily liable
hereunder; however, Landlord shall not pay such amount if Tenant notifies
Landlord that it will contest the validity or amount of such taxes before
Landlord makes such payment, and thereafter diligently proceeds with such
contest in accordance with Law and if the non-payment thereof does not pose a
threat of loss or seizure of the Premises or interest of Landlord therein or
impose any fee or penalty against Landlord (unless Tenant agrees to pay for
such fee or penalty).


18.           Events of Default.  Each of the following occurrences shall be an
“Event of Default”:


(a)           Payment Default.  Tenant’s failure to pay Rent within three (3)
business days after Landlord has delivered written notice to Tenant that the
same is due; however, an Event of Default shall occur hereunder without any
obligation of Landlord to give any notice if Tenant fails to pay Rent when due
and, during the 12 month interval preceding such failure, Landlord has given
Tenant written notice of failure to pay Rent on one or more occasions;


(b)           Abandonment.  Tenant abandons the Premises while it is in
default in the payment of Rent;


(c)           Estoppel.  Tenant fails to provide any estoppel
certificate after Landlord’s written request therefor pursuant to Section 26(d)
and such failure shall continue for five business days after Landlord’s second
written notice thereof to Tenant;


(d)           Insurance.  Tenant fails to procure, maintain and deliver
to Landlord evidence of the insurance policies and coverages as required under Exhibit
H and such failure shall continue for three (3) business days after
Landlord has delivered written notice thereof to Tenant; however, an Event of
Default shall occur hereunder without any obligation of Landlord to give any
notice if Tenant fails to procure, maintain and deliver to Landlord evidence of
such insurance policies and coverages and, during the 12 month interval
preceding such failure, Landlord has given Tenant written notice of failure to
do so on one or more occasions;


(e)           Mechanic’s Liens.  Tenant fails to pay and release of record, or
diligently contest and bond around, any mechanic’s lien filed against the
Premises for any work performed, materials furnished, or obligation incurred by
or at the request of Tenant, within the time and in the manner required by
Section 8(d) and such failure shall continue for ten (10) days after Landlord
has delivered written notice thereof to Tenant;


(f)            Other Defaults.  Tenant’s failure to perform, comply with, or
observe any other agreement or obligation of Tenant under this Lease and the
continuance of such failure for a period of more than 30 days after Landlord
has delivered to Tenant written notice thereof; provided, however, that if the
nature of Tenant’s failure to perform reasonably requires more than 30 days to
cure, then Tenant shall not be deemed in default if Tenant commences to cure
such failure within such 30-day period, and thereafter diligently prosecutes
such cure to completion; and


(g)           Insolvency.  The filing of a petition by or against Tenant
(the term “Tenant” shall include, for the purpose of this Section 18(g), any
guarantor of Tenant’s obligations hereunder) (1) in any bankruptcy or other
insolvency proceeding; (2) seeking any relief under any state or federal debtor
relief law; (3) for the appointment of a liquidator or receiver for all or
substantially all of Tenant’s property or for Tenant’s interest in this Lease;
(4) for the reorganization or modification of Tenant’s capital structure; or
(5) in any assignment for the benefit of creditors proceeding; however, if such
a petition is filed against Tenant, then such filing shall not be an Event of
Default unless Tenant fails to have the proceedings initiated by such petition
dismissed within 90 days after the filing thereof.











19.           Remedies.  Upon any Event of Default, Landlord may, in
addition to all other rights and remedies afforded Landlord hereunder or by law
or equity, take any one or more of the following actions:


(a)           Continuance of Lease in Effect.  Landlord may, at Landlord’s election, keep
this Lease in effect and enforce, by an action at law or in equity, all of its
rights and remedies under this Lease including, without limitation, (i) the
right to recover the rent and other sums as they become due by appropriate
legal action, (ii) the right to make payments required by Tenant, or perform
Tenant’s obligations and be reimbursed by Tenant for the cost thereof with interest
at the Default Rate from the date the sum is paid by Landlord until Landlord is
reimbursed by Tenant, and (iii) the remedies of injunctive relief and specific
performance to prevent Tenant from violating the terms of this Lease and/or to
compel Tenant to perform its obligations under this Lease, as the case may be.


(b)           Termination of Lease.  Landlord may, at Landlord’s election,
terminate this Lease by giving Tenant written notice of termination, in which
event this Lease shall terminate on the date set forth for termination in such
notice. Any termination under this subparagraph shall not relieve Tenant from
its obligation to pay to Landlord all Basic Rent and Additional Rent then or
thereafter due, or any other sums due or thereafter accruing to Landlord, or
from any claim against Tenant for damages previously accrued or then or
thereafter accruing. In no event shall any one or more of the following actions
by Landlord, in the absence of a written election by Landlord to terminate this
Lease constitute a termination of this Lease:


(1)           Appointment of a receiver or keeper
in order to protect Landlord’s interest hereunder;


(2)           Consent to any subletting of the
Premises or assignment of this Lease by Tenant, whether pursuant to the
provisions hereof or otherwise; or


(3)           Any action taken by Landlord or its
partners, principals, members, officers, agents, employees, or servants, which
is intended to mitigate the adverse effects of any breach of this Lease by
Tenant, including, without limitation, any action taken to maintain and
preserve the Premises or any action taken to relet the Premises or any portion
thereof for the account at Tenant.


(c)           Election to Terminate or Continue.  In the event Tenant breaches this Lease and
abandons the Premises, Landlord may terminate this Lease, but this Lease shall
not terminate unless Landlord gives Tenant written notice of termination. If
Landlord does not terminate this Lease by giving written notice of termination,
Landlord may enforce all its rights and remedies under this Lease, including
the rights and remedies provided by California Civil Code Section 1951.4 (“lessor
may continue lease in effect after lessee’s breach and abandonment and recover
rent as it becomes due, if lessee has right to sublet or assign, subject only
to reasonable limitations”).


(d)           Rights and Remedies Upon Termination.  In the event Landlord terminates this Lease,
Landlord shall be entitled, at Landlord’s election, to the rights and remedies
provided in California Civil Code Section 1951.2. For purposes of computing
damages pursuant to Section 1951.2, an interest rate equal to the maximum rate
of interest then not prohibited by law shall be used where permitted. Such
damages shall include, without limitation:


(1)           The worth at the time of award of the
amount by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss that Tenant proves could be
reasonably avoided, computed by discounting such amount at the discount rate of
the Federal Reserve Bank of San Francisco, at the time of award plus one
percent; and


(2)           Any other reasonable amount necessary
to compensate Landlord for all detriment proximately caused by Tenant’s failure
to perform Tenant’s obligations under this Lease, or which in the ordinary
course of things would be likely to result therefrom, including without
limitation, the following: (i) expenses for cleaning, repairing or restoring
the Premises, (ii) expenses for altering, remodeling or otherwise improving the
Premises for the purpose of reletting, including removal of existing 











leasehold
improvements and/or installation of additional leasehold improvements
(regardless of how the same is funded, including reduction of rent, a direct
payment or allowance to a new tenant, or otherwise), (iii) broker’s fees
allocable to the remainder of the Term, advertising costs and other expenses of
reletting the Premises; (iv) costs of carrying and maintaining the Premises,
such as taxes, insurance premiums, utility charges and security precautions,
(v) expenses incurred in removing, disposing of and/or storing any of Tenant’s
personal property, inventory or trade fixtures remaining therein; (vi)
reasonable attorney’s fees, expert witness fees, court costs and other
reasonable expenses incurred by Landlord (but not limited to taxable costs) in
retaking possession of the Premises, establishing damages hereunder, and
releasing the Premises; and (vii) any other expenses, costs or damages
otherwise incurred or suffered as a result of Tenant’s default.


(e)           Landlord’s Default and Tenant’s Remedies.  Landlord shall not be in default of any of
its obligations under this Lease unless Landlord fails to perform any covenant,
condition, or agreement contained in this Lease and fails to cure the
nonperformance within a reasonable time, but not later than thirty (30) days
after receiving written notice of the failure from Tenant; provided, however,
that if the nature of Landlord’s failure to perform reasonably requires more
than thirty (30) days to cure, then Landlord shall not be in default if
Landlord commences to cure such failure within such thirty (30) day period, and
thereafter diligently prosecutes such cure to completion.  If Landlord is in default pursuant to this
Section 19(e) and (i) such default materially and adversely impairs Tenant’s
ability to use the Premises or any material portion thereof for the operation
of its business pursuant to the terms of this Lease or (ii) poses a material
and imminent risk to the health or safety of persons, then, and only then, as
Tenant’s sole remedy at law and/or in equity, Tenant may perform such
obligations subject to the following terms and conditions:


(1)           Tenant shall deliver to Landlord a
written notice (“Self-Help Notice”)
of Tenant’s intention to perform such obligations, which Self-Help Notice shall
indicate in all capital bold-faced letters Tenant’s intention to exercise its
self-help rights and to perform such obligations which are otherwise Landlord’s
responsibility hereunder.  If Landlord
fails to commence to cure its failure to perform within ten (10) business days
after receipt of the Self-Help Notice, Tenant may take whatever action is
reasonably necessary to perform such obligations;


(2)           All work performed by Tenant or its
agents in accordance with this Section 19(e) must be performed at a reasonable
and competitive cost and rate and so as to minimize interference with the
rights of other occupants of the Building (if applicable); and


(3)           Landlord shall reimburse Tenant for
the reasonable costs of such performance incurred in accordance with the terms
of this Section 19(e) within thirty (30) days after Tenant’s submission to
Landlord of receipted invoices therefor (accompanied by reasonable supporting
documentation), but only to the extent the costs would have been paid by
Landlord without reimbursement under this Lease (it being understood that costs
which would have been reimbursed to Landlord by Tenant as an Operating Cost
shall not be repaid to Tenant under this Section 19(e)).  If Landlord fails to reimburse Tenant within
such thirty (30) day period, the Landlord shall also pay interest at the
Default Rate on any undisputed portion of such amount; provided, however, that
Tenant shall have no set off, abatement, withholding or similar rights with
respect thereto.


20.           Non-Waiver; Cumulative Remedies.


(a)           No Waiver.  Landlord’s acceptance of Rent following an
Event of Default shall not waive Landlord’s rights regarding such Event of
Default (it being understood, however, that if the Event of Default is for the
non-payment of Rent and Tenant thereafter pays, and Landlord accepts, all Rent
necessary to cure that Event of Default and all other Rent then due, Landlord
shall have no further rights regarding that particular Event of Default).  No waiver by Landlord or Tenant of any
violation or breach of any of the terms contained herein shall waive either
party’s rights regarding any future violation of such term by the other
party.  Landlord’s acceptance of any
partial payment of Rent shall not waive Landlord’s rights with regard to the
remaining portion of the Rent that is due, regardless of any endorsement or
other statement on any instrument delivered in payment of Rent or any 











writing delivered in
connection therewith; accordingly, Landlord’s acceptance of a partial payment
of Rent shall not constitute an accord and satisfaction of the full amount of
the Rent that is due.


(b)           Cumulative Remedies.  Any and all remedies set forth in this
Lease:  (1) shall be in addition to any
and all other remedies Landlord may have at law or in equity, (2) shall be
cumulative, and (3) may be pursued successively or concurrently as Landlord may
elect.  The exercise of any remedy by
Landlord shall not be deemed an election of remedies or preclude Landlord from
exercising any other remedies in the future. 
Additionally, Tenant shall defend, indemnify and hold harmless Landlord,
Landlord’s Mortgagee and their respective representatives and agents from and
against all claims, demands, liabilities, causes of action, suits, judgments,
damages and expenses (including reasonable attorneys’ fees) arising from Tenant’s
failure to perform its obligations under this Lease.


21.           Intentionally Omitted.


22.           Surrender of Premises.  No act by Landlord shall be deemed an
acceptance of a surrender of the Premises, and no agreement to accept a
surrender of the Premises shall be valid unless it is in writing and signed by
Landlord.  At the expiration or
termination of this Lease, Tenant shall deliver to Landlord all keys to the
Premises, together with manuals and warranties running to Landlord’s benefit
for improvements, alterations or other items installed by Tenant, and shall
deliver to Landlord the Premises with all improvements located therein in good
repair and condition, free of Hazardous Materials placed on the Premises during
the Term (other than by Landlord, its employees, contracts or agents) and
broom-clean, condemnation and Casualty damage (as to which Sections 15 and 16
shall control) and reasonable wear and tear excepted.  As used herein, “reasonable wear and tear” shall not
include any damage or deterioration that would have been prevented by Tenant’s
employment of ordinary prudence, care and diligence in the occupancy and use of
the Premises and the performance of all of its obligations under this Lease;
without limiting the generality of the foregoing, reasonable wear and tear
shall not include (i) excessively soiled, stained, worn or marked surfaces,
floors or finishes, (ii) damage, including holes in building surfaces (e.g.,
cabinets, doors, walls, ceilings and floors) caused by the installation or
removal of Tenant’s trade fixtures, furnishings, decorations, equipment,
alterations, utility installations, security systems, communications systems
(including cabling, wiring and conduits), displays and signs, (iii) damage to
any component, fixture, hardware, system or component part thereof within the
Premises, or (iv) the condition of any portion of the Premises that would not
be reasonably acceptable for immediate use by a subsequent tenant for
comparable purposes.  Tenant shall remove
all trade fixtures (and appurtenances thereto), furniture, and personal
property placed in the Premises or elsewhere in the Building by Tenant (but
Tenant may not remove any such item which was paid for, in whole or in part, by
Landlord or any wiring or cabling unless Landlord requires such removal).  In addition, at Landlord’s option, but
subject to the provisions of Section 8(a) above, Tenant shall remove the
following to the extent required by Landlord: 
(1) alterations, additions and improvements made to the Premises by
Tenant; (2) trade fixtures (and appurtenances thereto), furniture, and personal
property placed in the Premises by Tenant and paid for by Landlord; and (3) all
wiring, conduits and cabling placed in the Premises by Tenant and/or any
communications or data cabling and conduit used by Tenant (collectively, “Cabling”) in accordance with applicable
Laws (provided, that, at Landlord’s sole option, Tenant shall instead leave all
Cabling in good operating condition and repair, properly terminated and
identified for future use in accordance with applicable laws).  Tenant shall repair all damage caused by such
removal.  Landlord agrees that if Tenant
requests in writing not later than one hundred twenty (120) days and not
earlier than earlier than three hundred sixty (360) days before the expiration
of the Term as to whether or not Landlord will require removal of the
applicable alterations, additions, improvements, trade fixtures, personal
property, equipment, furniture and/or Cabling as provided in the preceding
sentences, Landlord shall notify Tenant in writing of such determination no
later than ninety (90) days following receipt of Tenant’s written request for
same.  All items not so removed shall, at
Landlord’s option, be deemed to have been abandoned by Tenant and may be
appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord
without notice to Tenant and without any obligation to account for such
items.  The provisions of this Section 22
shall survive the end of the Term.


23.           Holding Over.  If Tenant fails to vacate the Premises at the
end of the Term, then Tenant shall be a tenant at sufferance and, in addition
to all other damages and remedies to which Landlord may be entitled for such
holding over, Tenant shall pay, in addition to the other Rent, Basic Rent equal
to the following:  (a) for the first two
(2) holdover months, 125% of the Rent payable during the last month of the
Term; and (b) thereafter, the greater of (i) 150% of the Rent payable during
the last month of the Term, or (ii) 100% of the prevailing rental rate for 











comparable buildings in
the vicinity of the Premises.  Tenant
shall otherwise continue to be subject to all of Tenant’s obligations under
this Lease.  The provisions of this
Section 23 shall not be deemed to limit or constitute a waiver of any other
rights or remedies of Landlord provided herein or at law.  If Tenant fails to surrender the Premises
upon the termination or expiration of this Lease, in addition to any other
liabilities to Landlord accruing therefrom, Tenant shall protect, defend,
indemnify and hold Landlord harmless from all loss, costs (including reasonable
attorneys’ fees) and liability resulting from such failure, including any
claims made by any succeeding tenant founded upon such failure to surrender,
and any lost profits to Landlord resulting therefrom.


24.           Certain Rights Reserved by Landlord.  Provided that the exercise of such rights
does not unreasonably interfere with Tenant’s occupancy or use of the Premises
or Tenant’s parking rights, Landlord shall have the following rights:


(a)           Building Operations.  To make inspections, repairs, alterations, or
improvements, whether structural or otherwise, in and about the Premises, or
any part thereof in accordance with the terms of this Lease; to enter upon the
Premises (after giving Tenant no less than 24 hours prior notice thereof, which
may be oral notice, except in cases of real or apparent emergency, in which
case no notice shall be required), and otherwise subject to Tenant’s reasonable
security requirements, and, during the continuance of any such work, to
temporarily close doors, entryways, public space, and corridors in the
Building; to interrupt or temporarily suspend Building services and facilities;
and to change the name of the Building;


(b)           Security.  To take such reasonable measures as Landlord
reasonably deems advisable for the security of the Building and its occupants;


(c)           Prospective Purchasers and Lenders.  To market the Premises for sale, including
entering the Premises at all reasonable hours, upon no less than 24 hours prior
notice and otherwise subject to Tenant’s reasonable security requirements, to
show the Premises to prospective purchasers or lenders, but Landlord shall not
place any “for sale” or other marketing signs on or about the Premises except
during the last 9 months of the Term (or earlier if Tenant has notified
Landlord in writing that it does not desire to renew the Term) or at any time
following the occurrence of an Event of Default; and


(d)           Prospective Tenants.  At any time during the last 9 months of the
Term (or earlier if Tenant has notified Landlord in writing that it does not
desire to renew the Term) or at any time following the occurrence of an Event
of Default, to market the Premises for lease, including placing signs and/or
about the Premises and entering the Premises at all reasonable hours, upon no
less than 24 hours prior notice and otherwise subject to Tenant’s reasonable
security requirements,  to show the
Premises to prospective tenants.


25.           Intentionally Omitted.


26.           Miscellaneous.


(a)           Landlord Transfer.  Landlord may transfer the Premises and its
rights under this Lease.  If Landlord
assigns its rights under this Lease, then Landlord shall thereby be released
from any obligations hereunder to the extent such obligations accrue after the
date of transfer (it being understood that Landlord shall remain fully liable
for all obligations under this Lease to the extent such obligations have
accrued prior to the date of such transfer, as well as the return of Tenant’s
Security Deposit, unless Landlord has paid such Security Deposit to the
assignee), and the assignee shall be liable for Landlord’s obligations
hereunder to the extent such obligations accrue from and after the transfer
date.


(b)           Landlord’s Liability.  The liability of Landlord (and its partners,
shareholders or members) to Tenant (or any person or entity claiming by,
through or under Tenant) for any default by Landlord under the terms of this
Lease or any matter relating to or arising out of the occupancy or use of the
Premises shall be limited to Tenant’s actual direct, but not consequential,
damages therefor and shall be recoverable only from the equity interest of
Landlord in the Premises (and any sales, assignment, insurance or condemnation
proceeds received therefrom by Landlord), and Landlord (and its partners,
shareholders or members) shall not be personally liable for any deficiency.















 


(c)           Brokerage.  Neither Landlord nor Tenant has dealt with
any broker or agent in connection with the negotiation or execution of this
Lease, other than Don Reimann and Gregg von Thaden of Colliers International (“Landlord’s Broker”) and Michael R.
McMillan, Rick Kaplan, John Tran and Roger Gage of Cushman and Wakefield of
California (“Tenant’s Broker”).  Landlord’s Broker’s commission shall be paid
by Landlord pursuant to a separate written agreement.  Tenant’s Broker’s commission shall be paid
from and out of the commission paid to Landlord’s Broker,  one-half within thirty (30) days after Lease
execution and one-half within thirty (30) days after the Commencement Date, and
shall be an amount equal to Seven Hundred Fifty-Two Thousand Six Hundred
Twenty-Eight and 00/100 Dollars ($752,628.00).  
Except as expressly provided in this Section 26(c), Tenant and Landlord
shall each indemnify the other against all costs, expenses, attorneys’ fees,
liens and other liability for commissions or other compensation claimed by any
broker or agent claiming the same by, through, or under the indemnifying
party.  In no event shall any broker,
including Landlord’s Broker and Tenant’s Broker, be considered a third party
beneficiary of this Lease or any provision hereof.


(d)           Estoppel Certificates.  From time to time, Tenant shall furnish to
any party designated by Landlord, within ten business days after Landlord has
made a request therefor, an industry standard, commercially reasonable estoppel
certificate signed by Tenant confirming and containing such factual
certifications and representations as to this Lease as Landlord, Landlord’s
Mortgagee and/or a prospective purchaser or mortgagee may reasonably request
for leases of similar size premises, including the matters listed below in this
Section 26(d).  If Tenant does not
deliver to Landlord the certificate signed by Tenant within such time period
and such failure shall continue for five business days after Landlord has sent
a second written request therefor to Tenant, Landlord, Landlord’s Mortgagee and
any prospective purchaser or mortgagee, may conclusively presume and rely upon
the following facts: (1) this Lease is in full force and effect, (2) the terms
and provisions of this Lease have not been changed except as otherwise
represented by Landlord, (3) not more than one monthly installment of Basic
Rent and other charges have been paid in advance, (4) there are presently no
claims against Landlord nor any defenses or rights of offset against collection
of Rent or other charges, and (5) Landlord is not in default under this
Lease.  In such event, Tenant shall be
estopped from denying the truth of the presumed facts.


(e)           Notices.  All notices and other communications given
pursuant to this Lease shall be in writing and shall be (1) mailed by first
class, United States Mail, postage prepaid, certified, with return receipt
requested, and addressed to the parties hereto at the address specified in the
Basic Lease Information, (2) hand delivered to the intended addressee, (3) sent
by a nationally recognized overnight courier service, or (4) sent by facsimile
transmission during normal business hours followed by a confirmatory letter
sent in another manner permitted hereunder. 
All notices shall be effective upon delivery to the address of the
addressee; provided, however, that if such delivery occurs on a weekend or
holiday officially recognized in the City of Milpitas, then such notice shall
not be deemed effective until the next business day.  The parties hereto may change their addresses
by giving notice thereof to the other in conformity with this provision.


(f)            Separability.  If any clause or provision of this Lease is
illegal, invalid, or unenforceable under present or future laws, then the
remainder of this Lease shall not be affected thereby, and the remainder of
this Lease shall remain in full force and effect.


(g)           Amendments; Binding Effect.  This Lease may not be amended except by
instrument in writing signed by Landlord and Tenant.  No provision of this Lease shall be deemed to
have been waived by Landlord or Tenant unless such waiver is in writing signed
by the waiving party, and no custom or practice which may evolve between the
parties in the administration of the terms hereof shall waive or diminish the
right of Landlord or Tenant to insist upon the performance by the other party
in strict accordance with the terms hereof. 
The terms and conditions contained in this Lease shall inure to the
benefit of and be binding upon the parties hereto, and upon their respective
successors in interest and legal representatives, except as otherwise herein
expressly provided.  This Lease is for
the sole benefit of Landlord and Tenant, and, other than Landlord’s Mortgagee,
no third party shall be deemed a third party beneficiary hereof.


(h)           Quiet Enjoyment.  Provided Tenant has performed all of its
obligations hereunder, Tenant shall peaceably and quietly hold and enjoy the
Premises for the Term, without hindrance from Landlord or any party claiming
by, through, or under Landlord, but not otherwise, subject to the terms and
conditions of this Lease.











 


(i)            No Merger.  There shall be no merger of the leasehold
estate hereby created with the fee estate in the Premises or any part thereof
if the same person acquires or holds, directly or indirectly, this Lease or any
interest in this Lease and the fee estate in the leasehold Premises or any
interest in such fee estate.


(j)            No Offer.  The submission of this Lease to Tenant shall
not be construed as an offer, and Tenant shall not have any rights under this
Lease unless Landlord executes a copy of this Lease and delivers it to Tenant.


(k)           Entire Agreement.  This Lease constitutes the entire agreement
between Landlord and Tenant regarding the subject matter hereof and supersedes
all oral statements and prior writings relating thereto.  Except for those set forth in this Lease, no
representations, warranties, or agreements have been made by Landlord or Tenant
to the other with respect to this Lease or the obligations of Landlord or
Tenant in connection therewith.  The
normal rule of construction that any ambiguities be resolved against the
drafting party shall not apply to the interpretation of this Lease or any
exhibits or amendments hereto.


(l)            Waiver of Jury Trial.  TO THE MAXIMUM EXTENT NOW
OR HEREAFTER PERMITTED BY LAW, LANDLORD AND TENANT EACH WAIVE ANY RIGHT TO
TRIAL BY JURY IN ANY LITIGATION OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE ARISING OUT OF OR WITH RESPECT TO THIS LEASE OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE
TRANSACTIONS RELATED HERETO.


(m)          Governing Law.  This Lease shall be governed by and construed
in accordance with the laws of the state in which the Premises are located.


(n)           Recording.  Tenant shall not record this Lease or any
memorandum of this Lease without the prior written consent of Landlord, which
consent may be withheld or denied in the sole and absolute discretion of
Landlord, and any recordation by Tenant shall be a material breach of this
Lease.  Tenant grants to Landlord a power
of attorney to execute and record a release releasing any such recorded
instrument of record that was recorded without the prior written consent of
Landlord.


(o)           Water or Mold Notification.  To the extent either Tenant or Landlord
discovers or is notified of any water leakage, water damage or any mold in or
about the Premises that may be a danger to human health or safety, such party
shall promptly notify the other party thereof in writing.


(p)           Joint and Several
Liability.  If Tenant is
comprised of more than one party, each such party shall be jointly and
severally liable for Tenant’s obligations under this Lease.  All unperformed obligations of Tenant
hereunder not fully performed at the end of the Term shall survive the end of
the Term, including payment obligations with respect to Rent and all
obligations concerning the condition and repair of the Premises, and all
unperformed monetary obligations of Landlord hereunder not fully performed at
the end of the Term shall survive the end of the Term.


(q)           Financial Reports.  Within 15 days after Landlord’s request,
Tenant will furnish Tenant’s most recent audited financial statements
(including any notes to them) to Landlord, or, if no such audited statements
have been prepared, such other financial statements (and notes to them) as may
have been prepared by an independent certified public accountant or, failing
those, Tenant’s internally prepared financial statements.  If Tenant is a publicly traded corporation,
Tenant may satisfy its obligations hereunder by providing to Landlord Tenant’s
most recent annual and quarterly reports; provided, however, that, so long as
such reports are readily available to Landlord in electronic form without
payment of a fee, Tenant shall have no obligation to deliver copies thereof to
Landlord.  Landlord will not disclose any
aspect of Tenant’s financial statements that Tenant designates to Landlord as
confidential except (1) to Landlord’s agents and advisers, (2) to Landlord’s
Mortgagee or prospective mortgagees or purchasers of the Building, (3) in
litigation between Landlord and Tenant, and/or (4) if required by court
order.  Tenant shall not be required to
deliver the financial statements required under this Section 26(q) more than
once in any 12-month period unless requested by Landlord’s Mortgagee or a
prospective buyer or lender of the Building or an Event of Default occurs.











 


(r)            Landlord’s Fees.  Whenever Tenant requests Landlord to take any
action not required of it hereunder (including any supervision or coordination
of Tenant’s work under Section 8 and/or Exhibit D) or give any consent required
or permitted under this Lease (including any consent required under Section 8
and/or Exhibit D), Tenant will reimburse Landlord for Landlord’s actual and reasonable,
out-of-pocket costs payable to third parties and incurred by Landlord in
reviewing the proposed action or consent, including reasonable attorneys’,
engineers’ or architects’ fees, within 30 days after Landlord’s delivery to
Tenant of a statement of such costs along with reasonable supporting backup
documentation.  Tenant will be obligated
to make such reimbursement without regard to whether Landlord consents to any
such proposed action.


(s)           Telecommunications.  Subject to Landlord’s prior approval as and
to the extent required under Section 8 above, Tenant and its telecommunications
companies, including local exchange telecommunications companies and
alternative access vendor services companies, shall have the right of access to
and within the Premises, for the installation and operation of
telecommunications systems, including voice, video, data, Internet, and any
other services provided over wire, fiber optic, microwave, wireless, and any
other transmission systems (“Telecommunications
Services”), for part or all of Tenant’s telecommunications
within the Building and from the Building to any other location.  All providers of Telecommunications Services
shall be required to comply with the terms and conditions of this Lease
(including Section 8 above), the rules and regulations of the Building and
applicable Laws.  Tenant acknowledges
that Landlord shall not be required to provide or arrange for any
Telecommunications Services and that Landlord shall have no liability to any
Tenant Party in connection with the installation, operation or maintenance of
Telecommunications Services or any equipment or facilities relating
thereto.  Tenant, at its cost and for its
own account, shall be solely responsible for obtaining all Telecommunications
Services.


(t)            Confidentiality.  Tenant acknowledges that the terms and
conditions of this Lease are to remain confidential for Landlord’s benefit, and
may not be disclosed by Tenant to anyone, by any manner or means, directly or
indirectly, without Landlord’s prior written consent; provided, however, that
it is understood and agreed that Tenant may disclose such terms and conditions
(i) to the extent required by applicable Laws or court order, or (ii) to the
employees, lenders, investors, consultants, accountants and attorneys of
Tenant, provided that such persons agree to treat such terms and conditions
confidentially.  The consent by Landlord
to any disclosures shall not be deemed to be a waiver on the part of Landlord
of any prohibition against any future disclosure.  Notwithstanding the foregoing, Landlord
acknowledges that Tenant is a publicly regulated entity and, as such, may be
required to disclose the terms and conditions of this Lease in
government-mandated public filings, but Tenant shall thereafter use reasonable
efforts to minimize disclosure of the terms of this Lease by Tenant or any
Tenant Party, except (a) to the extent required to comply with applicable Laws
or court order, or (b) to the employees, lenders, investors, consultants,
accountants and attorneys of Tenant, provided that such persons agree to treat
such terms and conditions confidentially.


(u)           Authority.  Tenant (if a corporation, partnership or
other business entity) hereby represents and warrants to Landlord that Tenant
is a duly formed and existing entity qualified to do business in the state in
which the Premises are located, that Tenant has full right and authority to
execute and deliver this Lease, and that each person signing on behalf of
Tenant is authorized to do so.  Tenant
shall, on or before execution of this Lease, deliver to Landlord reasonably
acceptable documentation evidencing Tenant’s authorization of this Lease and
execution of this Lease by the person(s) signing on Tenant’s behalf.  Landlord hereby represents and warrants to
Tenant that Landlord is a duly formed and existing entity qualified to do
business in the state in which the Premises are located, that Landlord has full
right and authority to execute and deliver this Lease, and that each person
signing on behalf of Landlord is authorized to do so.


(v)           Security Service.  Tenant acknowledges and agrees that, while
Landlord may (but shall not be obligated to) patrol the Building, Landlord is
not providing any security services with respect to the Premises or Tenant’s
Off-Premises Equipment and that Landlord shall not be liable to Tenant for, and
Tenant waives any claim against Landlord with respect to, any loss by theft or
any other damage suffered or incurred by Tenant in connection with any
unauthorized entry into the Premises or any area where Tenant’s Off-Premises
Equipment is located or any other breach of security with respect to the
Premises or Tenant’s Off-Premises Equipment.


(w)          Intentionally Omitted.











 


(x)            Prohibited Persons and
Transactions.  Tenant
represents and warrants that neither Tenant nor any of its affiliates, nor any
of their respective partners, members, shareholders or other equity owners, and
none of their respective employees, officers, directors, representatives or
agents is, nor will they become, a person or entity with whom U.S. persons or
entities are restricted from doing business under regulations of the Office of
Foreign Asset Control (“OFAC”) of
the Department of the Treasury (including those named on OFAC’s Specially
Designated and Blocked Persons List) or under any statute, executive order
(including the September 24, 2001, Executive Order Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or
Support Terrorism), or other governmental action and is not and will not
Transfer this Lease to, contract with or otherwise engage in any dealings or
transactions or be otherwise associated with such persons or entities.


(y)           List of Exhibits.  All exhibits and attachments attached hereto
are incorporated herein by this reference.


Exhibit A  —  Outline
of Premises


Exhibit B  —  Legal
Description


Exhibit C  —  Rules
and Regulations


Exhibit D  —  Tenant
Finish-Work


Exhibit E  —  Intentionally
Omitted


Exhibit F  —  Intentionally
Omitted


Exhibit G  —  Operating
Costs and Taxes


Exhibit H  —  Insurance


Exhibit I   —  Options
to Extend


Exhibit J   —  Permitted
Hazardous Materials


(z)            Attorneys Fees.  If there is any legal action or proceeding
between Landlord and Tenant arising from or based on this Lease, the
unsuccessful party to such action or proceeding shall pay to the prevailing
party all costs and expenses, including reasonable attorneys’ fees and
disbursements, incurred by such prevailing party in such action or proceeding
and in any appeal in connection therewith. 
If such prevailing party recovers a judgment in any such action,
proceeding or appeal, such costs, expenses and attorneys’ fees and
disbursements shall be included in and as a part of such judgment.


27.           Environmental
Requirements.


(a)           Prohibition against
Hazardous Materials. 
Except for Hazardous Materials (i) contained in products used by Tenant
in reasonable quantities for ordinary cleaning and office purposes and/or (ii)
listed in Exhibit J hereto and used during the conduct of the Permitted
Use in no materially greater quantities than the quantities set forth in Exhibit
J, Tenant shall not permit or cause any party to transport, store, use,
generate, manufacture, dispose, or release any Hazardous Materials in, on,
under, about or from the Premises without Landlord’s prior written
consent.  Tenant, at its sole cost and
expense, shall operate its business in the Premises in strict compliance with
all Environmental Requirements and all requirements of this Lease.  Tenant shall complete and certify to
disclosure statements as requested by Landlord from time to time relating to
Tenant’s transportation, storage, use, generation, manufacture, or release of
Hazardous Materials on the Premises. 
Each party shall promptly deliver to the other party a copy of any
notice of violation it receives relating to the Premises of any Environmental
Requirement.


(b)           Environmental Requirements.  The term “Environmental
Requirements” means all Laws regulating or relating to health,
safety, or environmental conditions on, under, or about the Premises or the
environment including the following:  the
Comprehensive Environmental Response, Compensation and Liability Act; the
Resource Conservation and Recovery Act; the Clean Air Act; the Clean Water Act;
the Toxic Substances Control Act and all state and local counterparts thereto,
and any common or civil law obligations including nuisance or trespass, and any
other requirements of Section 14 and Exhibit C of this Lease.  The term “Hazardous
Materials” means and includes any substance, material, waste,
pollutant, or contaminant  that is or
could be regulated under any Environmental Requirement or that may adversely
affect human health or the environment, including any solid or hazardous waste,
hazardous substance, asbestos, petroleum (including crude oil or any fraction
thereof, natural gas, synthetic gas, polychlorinated biphenyls (PCBs), and
radioactive material).  For 











 


purposes of Environmental
Requirements, to the extent authorized by law, Tenant is and shall be deemed to
be the responsible party, including the “owner” and “operator” of Tenant’s “facility”
and the “owner” of all Hazardous Materials brought on the Premises by a Tenant
Party and the wastes, by-products, or residues generated, resulting, or
produced therefrom.


(c)           Removal of Hazardous
Materials.  Tenant, at its
sole cost and expense, shall remove all Hazardous Materials stored, disposed of
or otherwise released by a Tenant Party in, on, under, about or from the
Premises, in a manner and to a level satisfactory to Landlord in its commercially
reasonable discretion, but in no event to a level and in a manner less than
that which complies with all Environmental Requirements and does not limit any
future uses of the Premises or require the recording of any deed restriction or
notice regarding the Premises.  Tenant
shall perform such work at any time during the period of this Lease upon
written request by Landlord or, in the absence of a specific request by
Landlord, before Tenant’s right to possession of the Premises terminates.  If Tenant fails to perform such work within
the time period before Tenant’s right to possession terminates, Landlord may at
its discretion, but subject to applicable Laws and Environmental Requirements,
and without waiving any other remedy available under this Lease or at law or
equity (including an action to compel Tenant to perform such work), perform
such work at Tenant’s cost.  Tenant shall
pay all costs incurred by Landlord in performing such work, together with
interest thereon at the Default Rate from the time of Landlord’s payment,
within ten business days after Landlord’s request therefor.  Such work performed by Landlord is on behalf
of Tenant and Tenant remains the owner, generator, operator, transporter,
and/or arranger of the Hazardous Materials for purposes of Environmental
Requirements.  Tenant agrees not to enter
into any agreement with any person, including any governmental authority,
regarding the removal of Hazardous Materials that have been disposed of or otherwise
released onto or from the Premises without the written approval of the
Landlord, which approval shall not be unreasonably withheld, conditioned or
delayed.  If the removal work required of
Tenant hereunder is not completed by the scheduled expiration of the Term,
then, at Landlord’s option, either: (i) the Term shall be extended, and Tenant
shall remain obligated to comply with all terms and conditions this Lease,
until such work is completed; or (ii) Landlord and Tenant shall enter into a
license or similar agreement setting forth the terms and conditions upon which
Tenant shall have access to the Premises (or the applicable portion thereof) in
order to complete such work.


(d)           Tenant’s Indemnity.  Tenant shall indemnify, defend, and hold
Landlord harmless from and against any and all losses (including diminution in
value of the Premises and loss of rental income from the Premises), claims,
demands, actions, suits, damages (including punitive damages), expenses
(including remediation, removal, repair, corrective action, or cleanup expenses),
and costs (including actual attorneys’ fees, consultant fees or expert fees and
including removal or management of any asbestos brought onto the Premises or
disturbed in breach of the requirements of this Section 27, regardless of
whether such removal or management is required by Law) which are brought or
recoverable against, or suffered or incurred by Landlord as a result of any
release of Hazardous Materials  or any
breach of the requirements under this Section 27 by a Tenant Party regardless
of whether Tenant had knowledge of such noncompliance.  The obligations of Tenant under this Section
27 shall survive any expiration or termination of this Lease.  For clarity, and notwithstanding anything to
the contrary contained in this Lease, except to the extent caused or
exacerbated by a Tenant Party, Tenant shall not be responsible for (as part of
Operating Costs or otherwise) or required to indemnify, defend or hold harmless
Landlord from or against any losses, claims, demands, actions, suits, damages,
expenses, or costs, arising out of or in ay way related to any Hazardous
Materials which (i) existed in, on, under or about the Premises prior to the
Effective Date, (ii) were released by Landlord, its agents, employees, invitees
or contractors, or (iii) migrate onto the Premises from an off-site source.
Tenant shall promptly, diligently and in good faith notify Landlord of any such
migration of any Hazardous Materials onto the Premises from an off-site source
of which Tenant or any of its employees becomes aware.


(e)           Inspections and Tests.  Landlord shall have access to, and a right to
perform inspections and tests of, the Premises to determine Tenant’s compliance
with Environmental Requirements, its obligations under this Section 27, or the
environmental condition of the Premises. 
Access to the Premises shall be granted to Landlord upon Landlord’s
prior notice to Tenant and at such times so as to minimize, so far as may be
reasonable under the circumstances, any disturbance to Tenant’s
operations.  Such inspections and tests
shall be conducted at Landlord’s expense, unless such inspections or tests
reveal that Tenant has not complied with any Environmental Requirement, in
which case Tenant shall reimburse Landlord for the reasonable cost of such
inspection and tests.  Landlord’s receipt
of or satisfaction with any environmental assessment in no way waives any
rights that Landlord holds against











 


Tenant.  Tenant shall promptly notify Landlord of any
communication or report that Tenant makes to any governmental authority
regarding any possible violation of Environmental Requirements or release or
threat of release of any Hazardous Materials in violation of Environmental
Requirements in, on, under, about or from the Premises.  Tenant shall, within five days of receipt
thereof, provide Landlord with a copy of any documents or correspondence
received from any governmental agency or other party relating to a possible
violation of Environmental Requirements or claim or liability associated with
the release or threat of release of any Hazardous Materials onto or from the
Premises.  Except as indicated in the
Phase I Report environmental report prepared by prepared by Flour Daniel GTI
dated July 15, 1998, revised September 2, 1998, which has been provided to
Tenant or as otherwise disclosed to Tenant in writing on or before the
Effective Date, to Landlord’s knowledge, as of the Effective Date, (i) no
Hazardous Materials are present in, on or under the Premises or the soil,
surface water or groundwater thereof in violation of any applicable
Environmental Requirements, (ii) no underground storage tanks are present on
the Premises, and (iii) no action, proceeding or claim is pending or threatened
regarding the Premises concerning any Hazardous Materials pursuant to any
Environmental Requirements.  As used
herein, “to Landlord’s knowledge” mean the actual present and conscious
awareness or knowledge of Erich Stiger, Katie Padden Morris and/or Cassandra
Permenter, without any duty of inquiry or investigation; provided that so qualifying
Landlord’s knowledge shall in no event give rise to any personal liability on
the part of such named individuals, or any of them, or any other officer or
employee of Landlord, on account of any breach of the foregoing representation.  Said terms do not include constructive
knowledge, imputed knowledge, or knowledge Landlord or such individuals do not
have but could have obtained through further investigation or inquiry.


(f)            Tenant’s Financial
Assurance in the Event of a Breach.  In addition to all other rights and remedies
available to Landlord under this Lease or otherwise, Landlord may, in the event
of a breach of the requirements of this Section 27 that is not cured within 30
days following notice of such breach by Landlord, require Tenant to provide
reasonable financial assurance (such as insurance, escrow of funds or third
party guarantee) in an amount and form satisfactory to Landlord.  The requirements of this Section 27 are in
addition to and not in lieu of any other provision in this Lease.


28.           Parking.  Tenant shall have the exclusive right to use
all parking spaces located at the Premises. Parking spaces will be available to
Tenant without charge during the Term. 
Landlord shall not be responsible for enforcing Tenant’s parking rights
against third parties and Tenant may designate reserved parking stalls as it
requires.











 


This Lease is executed as of the Effective Date.


	
  LANDLORD:

  	
  TRINET MILPITAS ASSOCIATES, LLC, a Delaware limited

  liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  TriNet Realty Investors II, Inc., a Maryland

  corporation 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ ERICH STIGER 

  	
   

  
	
   

  	
   

  	
  Name: Erich Stiger 

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TENANT:

  	
  ADVANCED MEDICAL OPTICS, INC., a Delaware

  corporation 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JAMES V. MAZZO 

  	
   

  
	
   

  	
  Name: Jim Mazzo 

  
	
   

  	
  Title: Chairman, President and CEO