Document

 Exhibit 10.3










LEASE AGREEMENT


BY AND BETWEEN


CIVITAS EQUITY FUND I, LLC,
a California limited liability company


AS LANDLORD


and


CLOUDFLARE, INC.,
a Delaware corporation 
AS TENANT 
DATED March 21, 2022
			
	09247\00 I \4214879.v8












TABLE OF CONTENTS
									
			Page
	Index of Defined Terms
	iv
	Basic Lease Information	v
	1.	Demise
	1
	2.	Premises
	1
	3.	Term; Termination Right
	2
	4.	Rent
	3
	5.	Utilities and Services
	7
	6.	Late Charge
	8
	7.	Security Deposit
	9
	8.	Possession
	11
	9.	Use of Premises
	12
	10.	Acceptance of Premises
	14
	11.	Surrender
	15
	12.	Alterations and Additions
	15
	13.	Maintenance and Repairs of Premises 
	17
	14.	Landlord's Insurance 
	19
	15.	Tenant's Insurance 
	20
	16.	Indemnification 
	21
	17.	Subrogation 
	21
	18.	Signs
	22
	19.	Free From Liens
	22
	20.	Entry by Landlord
	22
	21.	Destruction and Damage
	23


			
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	22.	Condemnation 	25
	23.	Assignment and Subletting 	26
	24.	Default
	29
	25.	Landlord's Remedies 	31
	26.	Landlord's Right to Perform Tenant's Obligations 	33
	27.	Attorneys' Fees
	33
	28.	Taxes
	34
	29.	Confidentiality
	34
	30.	Effect of Conveyance
	34
	31.	Tenant's Estoppel Certificate	34
	32.	Subordination 
	35
	33.	Environmental Covenants 	36
	34.	Notices
	38
	35.	Waiver
	39
	36.	Holding Over
	39
	37.	Successors and Assigns	39
	38.	Time
	39
	39.	Brokers
	40
	40.	Limitation of Liability
	40
	41.	Financial Statements
	40
	42.	Rules and Regulations
	41
	43.	Mortgagee Protection
	41
	44.	Entire Agreement
	41
	45.	Interest
	41
	46.	Governing Law; Construction
	42


09247\001\4214879.v8
II









									
	47.	Name of Building	42
	48.	Jury Trial Waiver	42
	49.	Recordation	42
	50.	Force Majeure	43
	51.	Acceptance	43
	52.	Counterpart/Signatures	43
	53.	Bike Storage	43
	54.	Pets	43
	55.	Renewal Option (with FMV Rent)	44






INDEX OF EXHIBITS


						
	Exhibit
	A	Diagram of the Premises
	B	REMOVED
	C	Commencement and Expiration Date Memorandum
	D	Rules and Regulations
	E	Form of Estoppel Certificate
	F	Subordination,  Non-Disturbance and Attornment Agreement










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III









INDEX OF DEFINED TERMS
												
	Additional Rent	3	Landlord's  Determination 
	45
	Alteration	15	Landlord's Insureds	20
	Alterations	15	Laws	12
	Amortized Landlord Replacements 
	18	LC Amount	9
	Appraisal Panel 
	45	Lease	1
	ASA	45	Letter of Credit	9
	Base Building Work	2	MAI	45
	Base Insurance Expenses	4	Major Damage or Destruction	23
	Base Rent	3	Mold Conditions	13
	Base Taxes	4	Mold Prevention Practices	13
	Base Year	4	Negotiation Period	45
	Basic Lease Information	1	Option	44
	Bike Storage Facility	43	Phase 2 Base Building Approvals	2
	Building	1	Premises	1
	Commencement Date	2	Prevailing Market Rate	46
	Comparable Buildings	46	Private Restrictions	12
	Comparison Leases	46	Project	1
	Computation Year	4	Proportionate Share	6
	Condemnation
	25	Rent	6
	Default	29	Rooftop Equipment	14
	Delivery Date	2	Rules and Regulations	41
	Electronic Payment	6	Second Outside Date	3
	Environmental Laws	36	SNDA	35
	Expiration Date	2	Successor Landlord	35
	Extension Notice	44	Systems	5
	Extension Term	9	Taxes	4
	FDIC	3	Tenant Affiliate	26
	First Outside Date	43	Tenant's Agents	12
	Force Majeure	18	Tenant's Broker	vii
	GAAP	36	Tenant's Determination	45
	Hazardous Materials	41	Tenant's Property	20
	Holder	3	Term	2
	Insurance Expenses	40	Useful Life	18
	Landlord Affiliates
	12	Utilities	4
	Landlord Parties	vii	Utilities Expenses	4
	Landlord's Broker		Work Letter	2


09247\001\4214879.v8
IV







LEASE AGREEMENT 
 BASIC LEASE INFORMATION


						
	Lease Date:
	5/31/2022

	Landlord:


	CIVITAS EQUITY FUND I, LLC,
a California limited liability company


	Landlord's Address:













	Civitas Equity Fund I, LLC
c/o Dahlin Group
5865 Owens Drive
Pleasanton,  California 94588
Attention:  Tim Williams


All notices sent to Landlord under this Lease shall be sent to the above address, with copies to:


Shartsis Friese LLP
One Maritime Plaza, 18th Floor
San Francisco, California 94111
Attention:  Kathleen Keeler Bryski, Esq.



	Tenant:

	Cloudflare, INC.,
a Delaware corporation

	Tenant's Contact Person:

	Michelle Zatlyn and Caroline Quick


	Tenant's Address:




	Cloudflare,  Inc.
101 Townsend Street
San Francisco, California 94107
Attention:  Caroline Quick 
Phone:  (650) 319-8930 

	Building Square Footage:




	Approximately forty-three thousand five hundred nineteen (43,519) Interior Gross Area (the "IGA"), as measured consistent with the Building Owners and Managers Association (BOMA) Standard for the measurement of commercial office space (ANSIIBOMA Z65.1 2010)







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V







						
	Premises Address:


	101 Townsend Street
San Francisco, California 94107 
 

	Premises or Project:



	That certain property known as 101 Townsend Street, San Francisco, California, which includes approximately 12,662 square feet of land, which is improved with a four (4) story office building (with three (3) above ground levels and one lower level) located thereon (the "Building"), containing approximately 43,519 IGA.  The Project includes the approximately 16-foot wide paved area adjacent to the Building.
	Tenant's  Proportionate Share
of Project:

	96.23%


	Tenant's  Proportionate Share
of Building:
	96.23%

	Length of Term:
	Sixty (60) months

	Estimated Commencement 
Date:

	11/1/2022


	Estimated Expiration Date:

	10/31/2027




															
	Monthly Base Rent:


	Months	Sq. Ft.


	Annual Base Rate
	Monthly Base Rent

		

1 -12
	

41,879
	

X  $60.41
	=$210,825.87
		

13-24
	

41,879
	

X  $60.41
	=$210,825.87
		

25-36
	

41,879
	

X  $60.41
	=$210,825.87
		

37-48
	

41,879
	

X  $62.22
	=$217,150,64
		

49-60
	

41,879
	

X  $64.09
	=$223,665.16




						
	Base Year
	Calendar year 2022

	Security Deposit
	NONE

	Permitted Use:
	General office and any legally permitted uses ancillary thereto, including a networks operation center




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VI








						
	Tenant Improvement Allowance:

	None




09247\001\4214879.v8
VII









LEASE AGREEMENT




THIS LEASE AGREEMENT is made and entered into by and between Landlord and Tenant as of the Lease Date.   The defined terms used in this Lease which are defined in the Basic Lease Information attached to this Lease Agreement ("Basic Lease Information") shall have the meaning and definition  given them  in the  Basic Lease  Information.   The  Basic Lease Information,  the exhibits, the addendum or addenda described in the Basic Lease Information, and this Lease Agreement  are and shall be construed  as a single  instrument  and are referred  to herein as the "Lease."


1.     DEMISE


In consideration for the rents and all other charges and payments payable by Tenant, and for the agreements,  terms and conditions to be performed  by Tenant in this Lease, LANDLORD DOES HEREBY LEASE TO TENANT,  AND TENANT  DOES HEREBY HIRE AND TAKE FROM LANDLORD,  a portion of the Premises described  in the Basic Lease Information  (the "Premises"), which include a portion of the building described  in the Basic Lease Information  (the "Building") and a portion of the entire project described in the Basic Lease Information (the "Project"), upon the agreements, terms and conditions of this Lease for the Term hereinafter stated.


2.     PREMISES


The Premises has the address and contains the square footage specified in the Basic Lease Information;  provided, however, that any statement of square footage set forth in this Lease, or that may have been used in calculating  any of the economic  terms hereof, is an approximation which Landlord  and Tenant agree is reasonable  and no economic  terms based thereon shall be subject to revision whether or not the actual square footage is more or less.  The location and dimensions  of the Premises are depicted on Exhibit A, which is attached hereto and incorporated herein by this reference.


The Premises  shall be leased by Tenant  in "as-is"  condition  without any improvements  or alterations provided by Landlord. 


Landlord  reserves the right from time to time to install, use, maintain, repair, relocate and replace pipes, ducts, conduits,  wires, and appurtenant  meters and equipment  for service  to the Building which are above the ceiling surfaces,  below the floor surfaces, within the walls and in the central  core areas of the Building  upon at least 24 hours'  prior notice to Tenant (except  in case of emergency).   In connection  with any of the foregoing  activities of Landlord,  Landlord shall use reasonable efforts while conducting such activities to minimize any interference with Tenant's use of the Premises.
			
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No rights to any view or to light or air over any property, whether belonging to Landlord or any other person, are granted to Tenant by this Lease.


3.     TERM; TERMINATION  RIGHT


(a)    Term.    The term of this  Lease  (the  "Term")  shall  be  for  the  period   of  months  specified   in  the  Basic  Lease Information,  commencing on November 1, 2022.


(b)   REMOVED.


(c)    Commencement  Date Memorandum Landlord and Tenant shall execute a Lease Term Commencement Date Memorandum  on November 1, 2022.


			
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4.     RENT


(a)   Base Rent.  Tenant shall pay to Landlord, in advance on the first day of each month, without  further notice or demand  and without  abatement,  offset, rebate, credit or deduction  for any reason whatsoever, the monthly installments  of rent specified in the Basic Lease Information (the "Base Rent").




(b)   Additional Rent.  As used in this Lease, the term "Additional Rent" shall mean all sums of money, other than Base Rent, that shall become due from and payable  by Tenant pursuant to this Lease.


(i)     During the Term, in addition  to the Base Rent, Tenant shall pay to Landlord  as Additional  Rent, in accordance  with this Paragraph 4, (A) Tenant's Proportionate  Share of the total dollar  increase, if any, in Insurance  Expenses  attributable  to each Computation  Year over Base Insurance Expenses  (as defined  below), and (B) Tenant's Proportionate  Share of the total dollar  increase,  if any,  in Taxes  attributable  to each  Computation  Year over  Base  Taxes  (as defined below).


(ii)     As used in this Lease, the following terms shall have the meanings specified:


(A)  "Insurance Expenses" means the total costs and expenses paid or incurred by Landlord  in connection  with the obtaining of insurance on the Premises, the Building and/or the Project  or  any  part  thereof  or  interest  therein,  including,  premiums  for  "all  risk"  fire  and extended  coverage  insurance,  commercial   general  liability  insurance,  rent  loss  or  abatement insurance,   earthquake   insurance,   flood   or  surface   water  coverage,   and  other  insurance  as Landlord deems necessary in its sole discretion.   In the event any such insurance policies are maintained  on a portfolio  wide basis, then Landlord  shall have the right to equitably allocate  a portion  of  the  costs  of  such  policies   to  the  Premises,  the  Building  and/or  the  Project,  as reasonably  determined   by  Landlord.     The  foregoing  shall  not  be  deemed  an  agreement  by
			
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3









Landlord to carry any particular insurance relating to the Premises, the Building, or the Project, except as provided in Section 14 below.


(B)  "Utility  Expenses" means the cost of all electricity, water, gas, sewers, oil, trash, telephone, telecommunications, and other utilities (collectively, "Utilities"),  including any surcharges imposed, serving the Premises, the Building and the Project or any part thereof, and any amounts, taxes, charges, surcharges, assessments or impositions levied, assessed or imposed upon the Premises, the Building or the Project or any part thereof, or upon Tenant's  use and occupancy thereof, as a result of any rationing of Utility services or restriction on Utility use affecting the Premises, the Building and/or the Project.


(C)  "Taxes"  means any and all real estate taxes and assessments, which may include any form of tax, assessment (including any special or general assessments and any assessments or charges for Utilities or similar purposes included within any tax bill for the Building or the Project or any part thereof, including, without limitation, entitlement fees, allocation unit fees and/or any similar fees or charges), fee, license fee, business license fee, levy, penalty (if a result of Tenant's delinquency), sales tax, rent tax, occupancy tax or other tax (other than net income, estate, succession, inheritance, transfer or franchise taxes), imposed by any authority having the direct or indirect power to tax, or by any city, county, state or federal government or any improvement or other district or division thereof, whether such tax is determined by the area of the Premises, the Building and/or the Project or any part thereof, or the Rent and other sums payable hereunder by Tenant, including, but not limited to:  (1) any gross income or excise tax levied by any of the foregoing authorities, with respect to receipt of Rent and/or other sums due under this Lease; (2) upon any legal or equitable interest of Landlord in the Premises, the Building and/or the Project or any part thereof; (3) upon this transaction or any document to which Tenant is a party creating or transferring any interest in the Premises, the Building and/or the Project; and  (4) levied or assessed in lieu of,  in substitution for, or  in addition to, existing or additional taxes against the Premises, the Building and/or the Project, whether or not now customary or within the contemplation of the parties.   "Taxes"  shall also include any legal and consultants'  fees, costs and disbursements incurred in connection with proceedings  to  contest,  determine  or  reduce  taxes  but  not to  exceed  the  savings  resulting therefrom, Landlord specifically reserving the right, but not the obligation, to contest by appropriate legal proceedings the amount or validity of any taxes.


(D)  "Base  Year"  shall  mean  the  calendar  year  specified in the  Basic  Lease
Information, based on a 100% occupied and fully assessed Building.


(E)   "Base Insurance Expenses" shall mean the amount of Insurance Expesnes for the Base Year. 


 (F) "Base Taxes" shall mean the amount of Taxes for the Base Year.


(G)  "Computation Year"  shall mean each twelve (12) consecutive month period commencing January 1 of each year during the Term following the Base Year, provided that Landlord, upon notice to Tenant, may change the Computation Year from time to time to any other twelve (12) consecutive  month period, and, in the event of any such change, Tenant's
			
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4







  Proportionate Share of Insurance Expenses over Base Insurance Expenses, and of Taxes over Base Taxes shall be equitably adjusted for the Computation Years involved in any such change.


(H) "Systems" shall mean the heating, ventilating, air conditioning, plumbing, sewer, drainage, electrical, fire protection, escalator, elevator, life safety and security systems and  other  mechanical,  electrical  and  communications  systems  and  equipment  serving  the Premises, the Building and/or the Project or any part thereof.


(c)   Payment of Additional  Rent.


(i)     Approximately  thirty (30)  days  prior to  the  end  of  the  Base Year and  each Computation Year or as soon thereafter as practicable, Landlord shall give to Tenant notice of Landlord's estimate ofthe  total amounts that will be payable by Tenant under Paragraph 4(b) for the following Computation Year, and Tenant shall pay such estimated Additional Rent on a monthly basis, in advance, on the first day of each month.  Tenant shall continue to make said monthly payments until notified  by Landlord of a change therein.   If at any time or times Landlord determines that the amounts payable under Paragraph 4(b) for the current Computation Year will vary from Landlord's  estimate given to Tenant, Landlord, by notice to Tenant, may revise the estimate for such Computation Year, and subsequent payments by Tenant for such Computation Year shall be based upon such revised estimate.  By April 1 of each calendar year following the initial Computation Year, Landlord shall, in good faith, endeavor to provide to Tenant  a  statement  showing  the  actual  Additional  Rent  due  to  Landlord  for  the  prior Computation Year.   If the total of the monthly payments of Additional Rent that Tenant has made for the prior Computation Year is less than the actual Additional Rent chargeable to Tenant for such prior Computation Year, then Tenant shall pay the difference in a lump sum within ten (10) days after receipt of such statement from Landlord.   Any overpayment by Tenant of Additional Rent for the prior Computation Year shall, at Landlord's  option, be either credited towards the Additional Rent next due or returned to Tenant in a lump sum payment within ten (10) days after delivery of such statement.   Tenant shall have the right, during Landlord's regular business hours and on reasonable prior notice, to inspect, at the location of Landlord's accounting records, Landlord's  books and records regarding Additional Rent for the year to which the statement relates.  The inspection of Landlord's books and records may be conducted by Tenant's employee or a reputable certified public accountant (i.e., a member of a reputable, independent, nationally or regionally recognized certified public accounting firm, who has experience reviewing financial operating records of office building landlords; provided that such accountant is not retained by Tenant on a contingency fee basis) and such audit or review is completed within five (5) business days.  If such inspection reveals that the amount of Additional Rent  billed to Tenant  was  incorrect, the appropriate  party shall  pay to  the other party the deficiency or overpayment, as applicable, within thirty (30) days following delivery of the inspection, without interest at the interest rate set forth in Paragraph 45.  All costs and expenses of the inspection shall  be  paid  by Tenant  unless the final  undisputed determination is that Landlord overstated Additional Rent by more than five percent (5%) for the applicable year, in which case Landlord shall pay the actual and reasonable costs of the arbitration, not to exceed the amount of $5,000.  Landlord shall maintain its accounting records of Additional Rent for at least three (3) years following the expiration or earlier termination of this Lease.
			
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(ii)    Landlord's then-current annual operating budgets for Insurance and Taxes for the Building and the Project shall be used for purposes of calculating Tenant's monthly payment of estimated  Additional  Rent  for  the  current  year,  subject  to  adjustment  as  provided  above. Landlord shall make the final determination of Additional Rent for the year in which this Lease terminates as soon as possible after termination of this Lease. Even though the Term has expired and Tenant has vacated the Premises, with respect to the year in which this Lease expires or terminates, Tenant shall remain liable for payment of any amount due to Landlord in excess of the  estimated  Additional  Rent  previously  paid  by  Tenant,  and,  conversely,  Landlord  shall promptly return to Tenant any overpayment.  Failure of Landlord to submit statements as called for herein shall not be deemed a waiver of Tenant's obligation to pay Additional Rent as herein provided or Landlord's obligation to reimburse for overpayment.


(iii)   With respect to Insurance Expenses and Taxes for the Building and the Project, Tenant's "Proportionate Share" shall be Ninety six point two three percent (96.23%).


(d)   General Payment Terms.   The Base Rent, Additional Rent and all other sums payable by Tenant to Landlord hereunder, any late charges assessed pursuant to Paragraph 6 below and any interest assessed pursuant to Paragraph 45 below, are referred to as the "Rent."  The Rent for any fractional part of a calendar month at the commencement or termination of the Term shall be a  prorated amount of the Rent for a full calendar month based upon a thirty (30) day month. Except as otherwise expressly set forth herein, any nonrecurring payments of Additional Rent are due within thirty (30) days following the issuance of an invoice by Landlord.  Tenant shall make all payments of Base Rent and recurring payments of Additional Rent due pursuant to the terms of this Lease by means of a federal funds wire transfer or such other method of electronic funds transfer as may be required by Landlord in its sole and absolute discretion (the "Electronic Payment").     Prior to the Commencement Date, Tenant shall obtain from Landlord the proper bank ABA number, account number and designation of the account to which such Electronic Payment shall be made.  Tenant shall promptly notify Landlord in writing of any additional information that will be required to establish and maintain Electronic Payment from Tenant's bank or financial institution.  Landlord shall have the right, after at least fifteen (15) days' prior written notice to Tenant, to change the name of the depository for receipt of any Electronic Payment and  to discontinue  payment of  any  sum  by Electronic  Payment and require  such payments to be made by check through a domestic branch of a United States financial institution payable to such person or place as Landlord may, from time to time, designate to Tenant in writing.


(e)   Statements  Binding.   Every statement given by Landlord pursuant to subparagraph (c) of this Paragraph 4 shall be conclusive and binding upon Tenant unless (i) within one hundred twenty (120) days after the receipt of such statement Tenant shall notify Landlord that it disputes the correctness thereof, specifying the particular respects in which the statement is claimed to be incorrect, and (ii) if such dispute shall not have been settled by agreement, Tenant shall submit the dispute to binding arbitration within one hundred twenty (120) days after receipt of the statement.  Pending the determination of such dispute by agreement or arbitration as aforesaid, Tenant shall, within thirty (30) days after  receipt of such statement, pay Additional Rent in accordance with Landlord's  statement and such payment shall be without prejudice to Tenant's position.   If the dispute shall  be determined in Tenant's  favor, Landlord shall forthwith pay
			
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Tenant the amount of Tenant's overpayment of Additional Rent resulting from compliance with Landlord's statement.


(f)    Tax  Protest.   Notwithstanding  the  provisiOn of  Paragraph 4(e)  above,  Tenant,  at Tenant's  sole cost and expense, shall have the right to seek a reduction in or otherwise contest any Taxes by action or proceeding against the entity with authority to assess or impose the same. Landlord shall not be required to join in any proceeding or action brought by Tenant; provided however, that Tenant shall be required to provide written notice to Landlord of any such proceeding that Tenant pursues and copies of all correspondence relating thereto.  Tenant shall continue, during the pendency of such proceeding or action, to pay all Additional Rent owing hereunder.  Tax refunds shall be credited against Taxes for the associated period and refunded to Tenant regardless of when received, based on the period to which the refund is applicable, provided that in no event shall the amount to be refunded to Tenant for any such period exceed the total amount paid by Tenant for Taxes as Additional Rent under this Article 4 for such period.   If Taxes for any period during the Term or any extension thereof are increased after payment  thereof  for  any  reason,  including,  without  limitation,  error  or  reassessment  by applicable governmental or municipal authorities, Tenant shall pay its Proportionate Share of such increased Taxes.


5.     UTILITIES AND SERVICES


(a)   In General. Tenant will be responsible, at its sole cost and expense, for the furnishing of all services and Utilities to the Premises, including, but not limited to heating, ventilation and air  conditioning,  electricity,  water,  telephone,  telecommunications,  janitorial  and  security services.


(i)     All Utilities to the Premises shall be separately metered at the Premises and shall be paid directly by Tenant to the applicable utility provider.


(ii)    Landlord shall not provide janitorial services for the Premises.  Tenant shall be solely responsible for performing all janitorial services and other cleaning of the Premises, all in compliance with applicable Laws.  The janitorial and cleaning of the Premises shall be adequate to maintain the Premises in a manner consistent with Comparable Buildings.


(b)   Energy  Disclosure.    When  fully  implemented,  California  Code  of  Regulations, Title 20,  Section 1680  et seq.  requires  owners  of  non-residential  buildings to  provide  EPA Energy Benchmark Reports when a building is sold, refinanced or leased in full.  Tenant hereby gives its consent for the utility or utilities providing service to the Premises to disclose such information to Landlord and shall, within thirty (30) days after written request from Landlord, provide Tenant's electric usage information and data to Landlord or such further written consent for the utility or utilities providing service to Tenant to disclose such information to Landlord as may be required by the utilities, and shall reasonably assist with Landlord's  compliance with those code sections or any similar, related or successor provision of Law.


(c)   No Landlord Liability. Notwithstanding anything in this Lease to the contrary, Tenant acknowledges and agrees that Landlord shall not be liable, in any respect, for any injury or death of any  person  or  any  loss,  injury or  damage  to  property caused  by or resulting from  any
			
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variation, interruption, or failure of Utilities or any other services due to any cause whatsoever. No  temporary  interruption  or  failure  of  such  services  incident  to  the  making  of  repairs, alterations,  improvements, or due to accident, strike, or conditions or other events shall be deemed an eviction of Tenant or relieve Tenant from any of its obligations hereunder.  In no event shall Landlord be liable in any respect for any injury or death of any person or any loss, damage or injury to the Premises or any property therein or thereon occasioned by bursting, rupture,  leakage or overflow of any plumbing or other  pipes (including, without limitation, water,   steam,  and/or  refrigerant   lines),   sprinklers,  tanks,   drains,  drinking  fountains  or washstands, or other similar cause in, above, upon or about the Premises, the Building, or the Project.


(d)   Disclosure.     Landlord makes no representation with respect to the adequacy or fitness of the air-conditioning or ventilation equipment in the Building to maintain temperatures which may be required for, or because of, any equipment of Tenant, other than normal fractional horsepower office equipment, or occupancy of the Premises by more than one person per 125 square feet; and (ii) Landlord shall have no liability for loss or damage in connection therewith.  Tenant shall not, without Landlord's prior written consent, use heat-generating machines, machines other than normal fractional horsepower office machines, equipment or lighting other than building standard lights in the Premises, which may affect the temperature otherwise maintained by the air conditioning system or increase the water normally furnished for the Premises by Landlord pursuant to the terms of this Paragraph 5.   If such consent is given, Landlord shall have the right to install supplementary air conditioning units or other facilities in the Premises, including supplementary or additional metering devices, and the cost thereof, including the cost of installation, operation and maintenance, increased wear and tear on existing equipment and other similar charges, shall be paid by Tenant to Landlord upon billing by Landlord.  Tenant shall not use water or heat or air conditioning in excess of that normally supplied by Landlord.  Tenant's consumption of electricity shall not exceed the Building's capacity.


6.     LATECHARGE


Notwithstanding any other proviSion of this Lease to the contrary, Tenant hereby acknowledges that late payment to Landlord of Rent, or other amounts due hereunder will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain.  If any Rent or other sums due from Tenant are not received by Landlord or by Landlord's designated agent within five (5) days after their due date, then Tenant shall pay to Landlord a late charge equal to five percent (5%) of such overdue amount. Landlord and Tenant hereby agree that such late charges represent a fair and reasonable estimate of the cost that Landlord will incur by reason of Tenant's late payment and shall not be construed as a penalty.   Landlord's  acceptance of such late charges shall not constitute a waiver of Tenant's default with respect to such overdue amount or stop Landlord from exercising any of the other rights and remedies granted under this Lease.  Notwithstanding the foregoing, Landlord will not assess a late charge until Landlord has given written notice of such late payment for the first late payment in any twelve (12) month period and after Tenant has not cured such late payment within five (5) days from receipt of such notice.  No other notices will be required during the following twelve (12) months for a late charge to be incurred.
			
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7.     SECURITY DEPOSIT
    REMOVED.


8.     POSSESSION


(a)    Tenant's Right of Possession.  Subject to Paragraph 8(b), Tenant  shall be entitled to possession of the Premises upon commencement of the Term.
			
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9.     USE OF PREMISES


(a)   Permitted Use. During the Term, subject to the terms of this Lease and subject to any emergencies,  Tenant shall have the right to access the Premises 24 hours per day, 365 days per year.   The use of the Premises  by Tenant  and Tenant's agents,  advisors,  employees,  partners, shareholders,   directors,  customers,   invitees  and  independent   contractors,   including,  but  not limited  to  Tenant's  Contractors   (as  defined  in  the  Work  Letter)  (collectively,   the  "Tenant Parties")  shall be solely for the Permitted  Use specified  in the Basic Lease Information  and for no other use.   Tenant shall  not permit any objectionable  or unpleasant  odor,  smoke, dust, gas, noise or vibration  to emanate  from  or near the Premises.    The Premises  shall  not be used to create any nuisance or trespass,  for any illegal purpose under local, state or federal law, for any purpose not permitted by Laws (as hereinafter defined), for any purpose that would invalidate the insurance or increase the premiums for insurance on the Premises, the Building or the Project or for any purpose or in any manner that would interfere with other residents' use or occupancy of the property in the vicinity of the Project.  Tenant agrees to pay to Landlord, as Additional Rent, any increases in premiums on policies resulting from Tenant's Permitted  Use or any other use or action by Tenant or Tenant Parties which increases Landlord's premiums or requires additional coverage  by  Landlord   to  insure  the  Premises.     Tenant  acknowledges   receipt  of  the  load specifications  for the raised floor system for the Premises and agrees not to overload the floor(s) of the Building.


(b)   Compliance with Governmental Regulations and Private Restrictions.  Tenant  and Tenant Parties shall, at Tenant's expense,  faithfully  observe  and comply  with (i) all municipal, state and federal laws, statutes, codes, rules, regulations, ordinances, requirements, and orders including,  without  limitation,  the  International  Building  Code,  as  each  of  the  same  may  be amended  from time to time  (collectively,  "Laws"),  now in force or which may hereafter  be in force  pertaining  to the Premises  or Tenant's use of the Premises,  the Building  or the Project; (ii) all   recorded    covenants,    conditions    and   restrictions    affecting    the   Project    ("Private Restrictions")  now in force, provided  that Landlord  provides,  upon Landlord's execution of this Lease, copies of the documents  evidencing  such Private  Restrictions  to Tenant; or which  may hereafter  be in force;  and (iii) the Rules  and Regulations  (as defined  in Paragraph 42  below). The judgment of any court of competent jurisdiction, or the admission of Tenant in any action or proceeding against Tenant, whether  Landlord  be a party thereto or not, that Tenant has violated any  Laws  or  Private  Restrictions,  shall  be  conclusive  of  that  fact  as  between  Landlord  and Tenant.
			
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(c)   Civil Code Section 1938 Disclosure.  To Landlord's  actual knowledge, the property being leased or rented pursuant to this Lease has not undergone inspection by a Certified Access Specialist (CASp).  The foregoing verification is included in this Lease solely for the purpose of complying  with  California  Civil  Code  Section 1938  and  shall  not  in  any  manner  affect Landlord's and Tenant's respective responsibilities for compliance with construction-related accessibility standards as provided herein.


(d)   Waste, Nuisance.   Without limiting the  generality of the  other  provisions of  this Article, Tenant shall not cause, maintain, or allow any waste or nuisance in, on or about the Premises; permit on the Premises a substance or material which presents a fire, explosion or other hazard; permit noise or odors in the Premises which are objected to by Landlord, or allow noise, vibrations or odors to carry outside the Premises; receive, deliver or remove merchandise, supplies or equipment, or remove or store refuse, other than in areas approved in advance in writing by Landlord; use the  Premises or permit anything to  be done  in, on, or about the Premises which will in any way conflict with any Laws, whether local, state or federal, now in force or which may hereafter be enacted or promulgated.


(e)   Mold Prevention Practices.  Because mold spores are present essentially everywhere and mold can grow in almost any moist location, Tenant acknowledges the necessity of adopting and enforcing good housekeeping practices, ventilation and vigilant moisture control within the Premises (particularly in and around kitchen areas, janitorial closets, bathrooms, water fountains and other plumbing facilities and fixtures, break rooms, outside walls, doors,  and windows, and in and around HVAC systems and associated drains) for the prevention of mold (such measures, "Mold Prevention Practices").   Tenant will, at its sole cost and expense, keep and maintain the Premises in good order and condition in accordance with the Mold Prevention Practices and acknowledges that the control of moisture, and prevention of mold within the Premises, are integral to its obligations under this Lease. Tenant, at its sole cost and expense, shall:


(i)     Regularly monitor the Premises for the presence of mold and any conditions that reasonably can be expected to give rise to or be attributed to mold or fungus including, but not limited to, observed or suspected instances of water damage, condensation, seepage, leaks or any other water collection or  penetration (from  any  source,  internal or  external), mold growth, mildew, repeated complaints of respiratory ailments or eye irritation by Tenant's employees or any other occupants of the Premises, or any notice from a governmental agency of complaints regarding the indoor air quality at the Premises (the "Mold Conditions"); and


(ii)    Promptly notify Landlord in writing if it observes, suspects, has reason to believe mold or Mold Conditions in, at, or about the Premises or a surrounding area.  In the event of suspected mold or Mold Conditions in, at, or about the Premises and surrounding areas, Landlord may cause an inspection of the Premises to be conducted, during such time as Landlord may designate, to determine if mold or Mold Conditions are present in, at, or about the Premises. Such inspection will be at Landlord's sole expense, unless a Mold Condition is discovered.


(iii)   Tenant hereby releases and relieves Landlord from any and all liability for bodily injury and damage to property, waives any and all claims against Landlord and assumes all risk of personal injury and property damage related to or allegedly caused by or associated with any
			
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mold or Mold Conditions  in or on the Premises  existing on the Commencement  Date or arising thereafter.


             (f)    Roof Access.   Tenant shall have access to the roof of the Building at all times.


(g)   Roof Top Equipment.   Tenant,  at its sole cost and  expense,  shall  have the  right  to install, maintain, and from time to time replace one or more satellites dishes or other equipment (the "Roof  Top Equipment") on the roof of the Building, provided that prior to commencing  any installation  or maintenance,  Tenant  shall (i) obtain  Landlord's prior approval  of the proposed size,  weight  and  location  of  the  Roof  Top  Equipment   and  method  for  fastening  all  such equipment  to the roof, which approval  shall not be unreasonably  withheld (ii) such installation and/or  replacement  shall  comply  strictly  with  all  Laws  and  the  conditions  of  any  bond  or warranty maintained  by Landlord on the roof, and (iii) obtain, at Tenant's sole cost and expense, any necessary  federal,  state, and municipal  permits,  licenses and approvals,  and deliver copies thereof  to  Landlord.    Landlord  may  supervise  or  perform  any  roof  penetration  related  to the installation  of all Roof  Top  Equipment,  and Landlord  may charge  the cost thereof  to Tenant. Tenant agrees that all installation, construction and maintenance shall be performed in a neat, responsible,   and   workmanlike   manner,   using  generally   acceptable   construction   standards, consistent  with such reasonable  requirements  as shall be imposed  by Landlord.   Tenant further agrees to label each cable or wire placed  by Tenant  in the telecommunications pathways of the Building, with identification  information as reasonably required by Landlord.  Tenant shall repair any damage  to the Building  caused  by Tenant's installation,  maintenance,  replacement,  use or removal  of the Roof Top Equipment.    The Roof  Top  Equipment  shall  remain  the property  of Tenant, and Tenant may remove the Roof Top Equipment at its cost at any time during the Term. Tenant shall remove the Roof Top Equipment  at Tenant's cost and expense upon the expiration or tennination of this Lease.  Landlord  makes no warranty or representation  that the Building or any  portions  thereof  are suitable  for the  use any Roof  Top  Equipment,  it being assumed  that Tenant  has satisfied  itself thereof.   Tenant  shall protect,  defend,  indemnify  and hold harmless Landlord   and  Landlord's  Agents  from  and  against  claims,  damages,   liabilities,  costs  and expenses of every kind and nature, including  reasonable  attorneys'  fees, incurred by or asserted against Landlord  arising out of Tenant's installation,  maintenance,  replacement, use or removal ofthe RoofTop Equipment.


10.  ACCEPTANCE OF PREMISES


By its execution hereof, Tenant acknowledges that it had the opportunity to fully inspect the Premises.   By accepting  Landlord's delivery  of the  Premises,  Tenant  accepts  the Premises  as suitable for Tenant's intended  use and as being in good and sanitary  operating order, condition and repair, AS IS,  and without representation  or warranty  by Landlord  as to the condition, use or occupancy which may be made thereof.  Any exceptions  to the foregoing  must be by written agreement executed by Landlord and Tenant.
			
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11.   SURRENDER


Tenant agrees that on the last day of the Term, or on the sooner termination  of this Lease, Tenant shall surrender the premises to Landlord (a) in good condition and repair (damage by acts of  God,  fire,  and  normal  wear  and  tear  excepted),   and  (b) otherwise   in  accordance   with Paragraph 33(b)(iii).   Normal wear and tear shall not include any damage or deterioration  that would have been prevented by proper maintenance  by Tenant or Tenant otherwise performing all of its obligations  under this Lease.   On or before the expiration  or sooner  termination  of this Lease,  (i) Tenant  shall  remove  all of Tenant's Property  (as  hereinafter  defined)  and  Tenant's signage from the Premises, the Building and the Project and repair, patch, repair and repaint to match   any damage  caused  by such  removal,  and (ii) Landlord  may, by notice  to Tenant given not later than ninety (90) days prior to the Expiration Date (except in the event of a termination  of this  Lease  prior to the  scheduled  Expiration  Date,  in which event  no advance notice  shall  be required),  require Tenant at Tenant's expense  to remove any or all Alterations (but  not  any  of  the Tenant  Improvements or Alterations that have, been approved, or may subsequently be approved by the Landlord ) and  to  repair  any  damage  caused  by  such removal.   Notwithstanding  the foregoing,  Landlord shall notify Tenant, at the time of Landlord's consent,  which  Alterations  shall  be  removed.    Any  of  Tenant's Property  not so  removed  by Tenant as required herein shall be deemed abandoned and may be stored, removed, and disposed of  by Landlord  at  Tenant's expense,  and  Tenant  waives  all claims  against  Landlord  for  any damages   resulting   from  Landlord's  retention   and  disposition   of  such  property;   provided, however,  that  Tenant  shall  remain  liable  to  Landlord  for  all  costs  incurred  in  storing  and disposing  of  such  abandoned  property  of  Tenant.    All  Tenant  Improvements  and  Alterations except  those  which  Landlord  requires  Tenant  to  remove  shall  remain  in the  Premises  as the property of Landlord.


12.   ALTERATIONS AND ADDITIONS


(a)   In General.  Tenant shall not make, or permit to be made, any alteration,  addition  or improvement  (hereinafter  referred to individually  as an "Alteration" and collectively  as the "Alterations") to the Premises or any part thereof without the prior written consent of Landlord, which consent  shall not be unreasonably  withheld;  provided, however, that Landlord shall have the right in its sole and absolute discretion to consent or to withhold its consent to any Alteration which affects the structural  portions of the Premises, the Building or the Project or the Systems serving the Premises. Notwithstanding  the foregoing, Tenant may make any Alterations, without Landlord's  consent  (but  with  written  notice  prior  to  commencement   and  with  evidence  of payment in a lien-free manner to be provided upon completion), that do not affect any structural portions of the Premises, the Building or the Project or the Systems serving the Premises, that are decorative   or  cosmetic  in  nature,  and  which  have  an  aggregate  cost  that  does  not  exceed
$75,000.00  in any six (6) month period.   Except to the extent approved  in advance by Landlord in writing and subject to conformance with all San Francisco Planning and Building Department requirements,  in no event shall any work or Alteration  by Tenant alter the exterior appearance of the Building or disrupt any ground or soil within the Project, without Landlord’s consent.


(b)   Requirements.   Any  Alteration  to  the  Premises  shall  be  at  Tenant's   sole  cost  and expense, in compliance  with all applicable Laws and codes (including the International  Building Code and code work applicable  to the Base Building  Work), and all requirements  requested  by Landlord,  including,  without  limitation, the requirements  of any insurer providing coverage  for
			
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the Premises  or the Project or any part thereof, and in accordance  with plans and specifications approved in, writing by Landlord, and shall be constructed and installed by a contractor approved in writing  by Landlord, which approval  shall not be unreasonably  withheld.   In connection  with any Alteration,  Tenant shall deliver plans and specifications  therefor to Landlord.   As a further condition to giving consent, with respect to any project with an anticipated cost in excess of Two Hundred   Fifty  Thousand   Dollars  ($250,000.00),  Landlord   may  require  Tenant  to  provide Landlord,   at  Tenant's   sole  cost  and  expense,  a  payment   and  performance   bond  in  form acceptable   to  Landlord,  in  a  principal   amount   not  less  than  the  estimated   costs  of  such Alterations,  to ensure Landlord against any liability for mechanics'  and materialmen's liens and to ensure  completion  of work.   Before  Alterations  may begin, valid building  permits or other required approvals, permits or licenses must be furnished to Landlord, and, once the Alterations begin, Tenant will diligently and continuously  pursue their completion.   Landlord  may monitor construction  of  the  Alterations  and  Tenant  shall  reimburse  Landlord  for  its reasonable  costs (including, without limitation, the costs of any construction manager retained by Landlord) in reviewing   plans  and  documents  and  in  monitoring  construction,   and  shall  pay  a  logistical coordination  fee to Landlord  in an amount  equal to five percent (5%) of the total costs of any Alterations  upon completion  of the same . Tenant shall maintain during the course of construction,  at its sole cost and expense, builders' risk insurance for the amount of the completed  value of the Alterations  on an all-risk non-reporting  form covering all improvements  under construction,  including  building materials, and other insurance in amounts and against such risks as Landlord shall reasonably require in connection  with the Alterations.   In addition to and without limitation on the generality of the foregoing,  Tenant shall ensure that its contractors  procure and maintain  in full force and effect during   the  course  of  construction   a  "broad   form"  commercial   general   liability   policy  of insurance, including bodily injury and property damage liability, naming Landlord, Tenant, any property manager designated by Landlord and Landlord's lenders as additional insureds.   The minimum  limit of coverage of the aforesaid  policy shall be in the amount of not less than Three Million  Dollars  ($3,000,000.00) each  occurrence  not  less than  Three  Million  Dollars ($3,000,000.00) in the aggregate.   Such policy shall contain a severability  of interest clause or a cross liability  endorsement.   Such policies  of insurance  shall be issued as primary policies and not contributing  with or in excess of coverage that Landlord may carry, by an insurance company authorized  to do business in the state in which the Premises are located for the issuance of such type  of  insurance  coverage  and  rated  A-:VIII  or  better  in  Best's  Key  Rating  Guide.    Such requirements are in addition to Tenant's insurance obligations set forth in Article 14 below.


(c)   Landlord's Property.  All Alterations,  including, but not limited to, heating, lighting, electrical,   air  conditioning,   fixed  partitioning,   drapery,  wall  covering  and  paneling,  built-in cabinet  work  and carpeting  installations  made  by Tenant,  together  with  all  property  that  has become an integral part of the Premises or the Building, shall at once be and become the property of Landlord, and shall not be deemed Tenant's Property.


(d)   Cable Installation.  Except to the extent included in the initial Tenant Improvements, no private telephone systems and/or other related computer or telecommunications equipment or lines may be installed without Landlord's prior written consent, which consent shall not be unreasonably  withheld.   If Landlord  gives such consent,  all equipment  must be installed within the Premises and, at the request of Landlord made at any time at least thirty (30) days prior to the
			
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expiration of the Term, removed upon the expiration or sooner termination of this Lease and the Premises restored to the same condition as before such installation.


(e)   Heat Producing Equipment.  Notwithstanding anything herein to the contrary, before installing any equipment or lights which generate an undue amount of heat in the Premises, or if Tenant plans to use any high-power usage equipment in the Premises, Tenant shall obtain the written permission of Landlord, which permission shall not be unreasonably withheld.  Landlord may refuse to grant such permission unless Tenant agrees to pay the costs to Landlord for installation of supplementary air conditioning capacity or electrical systems necessitated by such equipment.


(f)    Notice.    Tenant  agrees  not  to  proceed  to  make  any  Alterations,  notwithstanding consent from Landlord to do so, until Tenant notifies Landlord in writing of the date Tenant desires to commence construction or installation of such Alterations and Landlord has approved such date in writing, in order that Landlord may post appropriate notices to avoid any liability to contractors or material suppliers for payment for Tenant's  improvements.   Tenant will at all times permit such notices to be posted and to remain posted until the completion of work.


(g)  No Liens.   Tenant shall not, at any time prior to or during the Term, directly or indirectly employ, or permit the employment of, any contractor, mechanic or laborer in the Premises, whether in connection with any Alteration or otherwise, if it is reasonably foreseeable that such employment will materially interfere or cause any material conflict with other contractors, mechanics, or laborers engaged in the construction, maintenance or operation of the Project by Landlord, Tenant or others.  In the event of any such interference or conflict, Tenant, upon demand of Landlord, shall cause all contractors, mechanics or laborers causing such interference or conflict to leave the Project promptly.


13.  MAINTENANCE AND REPAIRS  OF PREMISES


(a)   Maintenance by  Tenant.   Throughout the Term, Tenant shall, at its sole expense, subject to Landlord's obligations as set forth in Paragraphs 13(b) hereof, (i) keep and maintain in good order and condition the interior and exterior of the Building, including, but not limited to, the roof covering, lighting and Systems, and Tenant's  Property, (ii) keep and maintain in good order and condition, repair and replace all of Tenant's security systems in or about or serving the Premises, (iii) maintain and replace all specialty lamps, bulbs, starters and ballasts, and (iv) keep and maintenance in good order and condition the exterior of the Premises, including the roof covering, pavement, sidewalks, landscaping, sprinkler system, sidewalks, driveways, curbs, lighting, and exterior of the Building, including, but not limited to , by repairing and painting over any vandalism and any defacement of Building; and (v) to the extent of any damage caused by Tenant, the roof membrane, structural portions of interior and exterior walls, and window repairs.  Tenant shall not do nor shall Tenant allow Tenant Parties to do anything to cause any damage, deterioration or unsightliness to the Premises, the Building or the Project. In connection with the foregoing Tenant shall (i) cause the fire alarm systems serving the Premises to be monitored  by a monitoring or  protective  services firm reasonably approved by Landlord in writing; (ii) procure annual maintenance contracts for the HVAC system and elevators and implement any maintenance recommendations of the service providers under such annual maintenance contracts, (iv) engage licensed pest control service providers to service the Building
			
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on  a reasonable  basis; and  (iv)  cause  annual  roof  inspections  to  be performed  by a licensed roofing  contractor selected  by Tenant, and shall implement  any maintenance  recommendations of such roofing contractor.   All such contractors and providers shall be reasonably acceptable to Landlord and Tenant shall provide Landlord with copies of all such contracts and related reports and correspondence.


(b)   Maintenance by Landlord.


(i)     Subject to the  provisions  of Paragraphs 13(a), 21 and 22, Landlord, at its own cost  and  expense,  agrees  to:     (I) repair  and  maintain the  structural   portions  of  the  roof (specifically  excluding the roof coverings),  the foundation,  the footings,  the floor slab, and the load bearing walls and exterior walls of the Building (excluding any glass and any routine maintenance,  including, without limitation, any painting, sealing, patching and waterproofing of such walls); (2) repair or replace the Base Building due to latent defects in the initial construction of the Building for which Tenant  is not liable under this Lease; (3) perform warranty repairs of any defects in Base Building Work; (4) perform normal capital level repairs and replacement  of major  Systems  such  as  roof  membrane,  Base  Building  HVAC,  plumbing  and electrical  (and major  components  of  same)  unless  such  capital  level  replacement  costs  are  due  to  damages caused   by  Tenant  or  accelerated   Systems  deterioration   due  to  Tenant's  management   and operations of such Systems.


(c)   Capital Replacement  of Base Building  and Building  Systems.   Notwithstanding  the provisions  of Section 13(a) above, to the extent that the Base Building or Building Systems that Tenant would otherwise be required to maintain require replacement that would be considered a capital expense item under "Generally Accepted Accounting  Principles" ("GAAP"), Tenant shall notify Landlord in writing.  Upon confirmation  of the need for such replacement, Landlord shall perform  the necessary  replacement  (collectively,  the "Amortized Landlord Replacements").   The cost  of  the  Amortized  Landlord  Replacement  shall  include  the  cost  of  compliance  with  any Applicable  Laws  in connection  with  the completion  of such  replacement.    The cost  of  each Amortized  Landlord Replacement shall be amortized  from the date of substantial completion of the Amortized Landlord Replacement over the useful life of each such Amortized Landlord Replacement,  as determined  in accordance with GAAP (the "Useful  Life"),  together with interest at eight  percent  (8%)  per  annum,  in  equal  monthly  installments.    Upon  written  notice  from Landlord of the date of substantial  completion of each Amortized Landlord Replacement and the amount of the monthly installments,  Tenant shall pay on the first (1st) day of the calendar month that  is thirty  (30)  days  after  such  written  notice  is given  and  on  the  first  (1st)  day  of  each subsequent  month during the Useful Life of such Amortized  Landlord  Replacement  during the then Term and for any Extension  Term, the amount  of such equal monthly  installment,  which shall  be  in addition  to  the  Base  Rent.    The  first  (1st)  payment  by Tenant  shall  include  the monthly payment(s), if any, in the amortization  period to, but not including, the due date for the first (1st) payment by Tenant.


(d)   Additional Rent Payable by Tenant.  Expenses incurred by Landlord for the following items shall be paid by Tenant as Additional Rent within thirty (30) days after demand:


(i)     Capital  improvements   to  the  Building  required  by  government  agencies  not "triggered" by Tenant's particular  use or any Tenant Improvements  or Alterations performed  by
			
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or for Tenant, but only to the extent of the capital improvements annual cost as amortized over the useful life of the capital improvement in accordance with generally accepted accounting principles.


(ii)   Capital improvements to the Building required by government agencies and "triggered" by Tenant's particular use or any Tenant Improvements or Alterations performed by or for Tenant other than the initial Tenant Improvements.


(iii)   Increases in Landlord's insurance over the Base Year.


(iv)   Increases   in  Property  Tax  over  Base  Year  and  any  future  public  bond assessments.  Tenant shall not be exempt from any Property Tax reassessment during the Lease Term or extensions thereof.
(v)     Amortized Landlord Replacements, as provided in Section 13(c) above. Notwithstanding anything in this Paragraph 13 to the contrary, Landlord shall have the
right to either repair or to require Tenant to repair any damage to any portion of the Premises, the
Building and/or the Project caused by or created due to any act, omission, negligence or willful misconduct of Tenant or Tenant Parties and to restore the Premises, the Building and/or the Project, as applicable, to the condition existing prior to the occurrence of such damage; provided, however, that in the event Landlord elects to perform such repair and restoration work, Tenant shall  reimburse Landlord  upon  demand for all costs and expenses  incurred by Landlord in connection therewith.  Landlord's  obligation hereunder to repair and maintain is subject to the condition precedent that Landlord shall have received written notice of the need for such repairs and maintenance and a reasonable time to perform such repair and maintenance.  Tenant shall promptly report in writing to Landlord any defective condition known to it which Landlord is required  to  repair, and  failure  to  so  report such  defects  shall  make  Tenant  responsible to Landlord for any liability incurred by Landlord by reason of such condition.


(e)   Tenant's Waiver of Rights.  Tenant hereby expressly waives all rights to make repairs at the expense of Landlord or to terminate this Lease, as provided for in California Civil Code Sections 1941 and 1942, and 1932(1), respectively, and any similar or successor statute or law in effect or any amendment thereof during the Term.


14.  LANDLORD'S INSURANCE


Landlord  shall  purchase  and  keep  in  force  (a) commercial  general  liability  insurance policies in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and Three  Million  Dollars  ($3,000,000.00)   aggregate,  including  bodily  injury,  products  and completed operations coverage, and not less than Two Million Dollars ($2,000,000.00) in excess liability coverage, (b) fire, extended coverage and "all risk" insurance covering the Building and the Project in amounts not less than the full insurance replacement value, and (c) at Landlord's option, earthquake and flood insurance with customary limits and deductibles.  Tenant shall, at its sole cost and expense, comply with any and all reasonable requirements pertaining to the Premises,  the  Building  and  the  Project  of  any  insurer  necessary  for  the  maintenance of reasonable fire and commercial general liability insurance, covering the Building and the Project. Landlord may maintain "Loss of Rents" insurance, insuring that the Rent will be paid in a timely
			
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manner to Landlord for a period of at least twelve (12) months if the Premises, the Building or the Project or any portion thereof are destroyed or rendered unusable or inaccessible by any cause insured against under this Lease.


15.  TENANT'S INSURANCE


(a)   Commercial General Liability Insurance.  Tenant shall, at Tenant's expense, maintain in full force and effect during the Term of this Lease, commercial general liability insurance, including  bodily  injury,  property  damage,  products,  completed  operations  and  contractual liability covering Tenant's operations and activities at the Premises, insuring Tenant, and naming Landlord, and Landlord's  lenders as additional insureds (collectively, "Landlord's Insureds"). The minimum limit of coverage of such policy shall be in the amount of not less than Three Million Dollars ($3,000,000.00) each occurrence and in the amount of not less than Five Million Dollars ($5,000,000.00) in the aggregate, for bodily injury, personal injury, death, contractual liability (which shall include coverage for Tenant's  indemnification obligations in this Lease), products/completed operations liability, business interruption insurance, and property damage. Coverage shall contain a severability of interest clause or a cross liability endorsement.


(b)  Property Insurance.    Tenant shall, at Tenant's  expense, maintain in full force and effect during the Term of this Lease, All-Risk insurance with valuation basis for the full replacement  cost,  providing   coverage  for   all   of   Tenant's   personal  property,  furniture, furnishings, trade fixtures and equipment (including cabling) at the Premises (collectively, "Tenant's Property") as well as any Alterations, Tenant Improvements constructed pursuant to Exhibit  B,  if any, and any other improvements constructed by Tenant.   During the term of this Lease the proceeds from any such policy or policies of insurance shall be used for the repair or replacement of the property so insured.  Landlord will not carry insurance on any of Tenant's possessions.


(c)   Worker's Compensation Insurance; Employer's  Liability Insurance.  Tenant shall, at Tenant's expense, maintain in full force and effect during the Term of this Lease, worker's compensation insurance with not less than the minimum limits required by law, and employer's liability insurance with a minimum limit of coverage of One Million Dollars ($1,000,000.00).


(d)  Automobile  Liability.   Tenant shall, at Tenant's  expense, maintain in full force and effect during the Term of this Lease, Commercial Automobile Liability insurance providing coverage for any Tenant-Owned Autos, Non-Owned and Hired Autos and used in the conduct of its business.   Such policy shall be in the amount of no less than One Million Dollars ($1,000,000.00) Combined Single Limit.


(e)   Policy Requirements  and Evidence  of Coverage.   Landlord may from time to time require reasonable increases in the limits of any policy required hereunder if Landlord believes that such additional coverage is necessary or desirable. The limit of any insurance shall not limit the liability of Tenant hereunder.  No policy maintained by Tenant under this Paragraph 15 shall contain a deductible greater than Twenty-Five Thousand Dollars ($25,000.00).  No policy shall be cancelable or subject to reduction of coverage without thirty (30) days' prior written notice to Landlord or 10 days for non-payment.   Such policies of insurance shall be issued as primary policies and not contributing  with or in excess of coverage that Landlord may carry, by an
			
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insurance company authorized to do business in the state in which the Premises are located for the issuance of such type of insurance coverage and rated A-:VIII or better in Best's Key Rating Guide.  Tenant shall deliver to Landlord certificates of insurance and all endorsements required herein to be maintained by Tenant at the time of execution of this Lease by Tenant. Tenant shall, at least fifteen (15) days prior to expiration of each policy, furnish Landlord with certificates of renewal thereof.


16.  INDEMNIFICATION


Except to the extent caused by the gross negligence or willful misconduct of Landlord and the Landlord Parties, Tenant shall defend, protect, indemnify and hold harmless Landlord and the Landlord  Parties, against  and  from  any  and  all  claims,  suits,  liabilities, judgments, costs, demands, causes of action and expenses (including, without limitation, reasonable attorneys' fees, costs and disbursements) arising from (1) the use of, or any activity done, permitted or suffered in or about, the Premises (2) any activity done, permitted or suffered by Tenant or Tenant Parties in or about the Building or the Project, and (3) any act, neglect, fault, willful misconduct or omission of Tenant or Tenant Parties, or from any breach or default in the terms of this Lease by Tenant or Tenant Parties, and (4) any action or proceeding brought on account of any matter in items (1), (2) or (3).  If any action or proceeding is brought against Landlord by reason of any such claim, upon notice from Landlord, Tenant shall defend the same at Tenant's expense by counsel reasonably satisfactory to Landlord.  As a material part of the consideration to Landlord, Tenant hereby releases Landlord and the Landlord Parties from responsibility for, waives its entire claim of recovery for and assumes all risk of (i) damage to property or injury to persons in or about the Premises, the Building or the Project from any cause whatsoever (except to the extent is caused by the gross negligence or willful misconduct of Landlord or the Landlord Parties), or (ii) loss resulting from business interruption or loss of income at the Premises.  The obligations of Tenant under this Paragraph 16 shall survive any termination of this Lease.  The foregoing indemnity shall not relieve any insurance carrier of its obligations under any policies required to be carried by either party pursuant to this Lease, to the extent that such policies cover the peril or occurrence that results in the claim that is subject to the foregoing indemnity.


17.  SUBROGATION


Landlord and Tenant hereby mutually waive any claim against the other and the Landlord Parties or Tenant Parties, as applicable, for any loss or damage to any of their property located on or about the Premises, the Building or the Project that is caused by or results from perils covered by property insurance carried by the respective parties (or that would have been so covered if the waiving party had carried the insurance required hereunder), to the extent of the proceeds of such insurance actually received with respect to such loss or damage, whether or not due to the negligence of the other party or its Agents.  Because the foregoing waivers will preclude the assignment of any claim by way of subrogation to an insurance company or any other person, each party shall immediately notify its insurer, if required by such insurer, in writing, of the terms of these mutual waivers and have their insurance policies endorsed, if necessary, to  prevent the  invalidation of  the  insurance coverage  because of these  waivers. Nothing in this Paragraph 17 shall relieve a party of liability to the other for failure to carry insurance required by this Lease.


			
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18.   SIGNS


Subject  to  Landlord's prior  written  consent,  which  consent  shall  not  be  unreasonably withheld,  conditioned  or  delayed,  Tenant,  at  Tenant's sole  cost  and  expense,  subject  to  all applicable  Laws and Tenant's receipt of all permits and approvals, shall have the exclusive right to install  building signs on the Building  in locations  and size(s) that shall be in accordance  all Applicable  Laws.   Landlord, at no cost or expense to Landlord, shall cooperate with Tenant in securing permits, variances and all other necessary approvals to install exterior signage on the Building, including signage that may not be permitted as of the Commencement  Date but which is requested by Tenant and reasonably acceptable to Landlord.


During the Term, Tenant, at Tenant's sole cost and expense, shall install and maintain all such signage in good repair.  Tenant shall remove any sign, advertisement or notice placed on the Premises,  the  Building  or  the  Project  by  Tenant  upon  the  expiration  of  the  Term  or  sooner termination  of this Lease,  and Tenant  shall  repair, patch and repaint to match any damage  or injury to the Premises, the Building or the Project caused thereby, all at Tenant's  expense.  If any signs are not removed, or necessary repairs not made, Landlord shall have the right to remove the signs and repair any damage or injury to the Premises,  the Building or the Project at Tenant's sole cost and expense.


19.   FREE  FROM LIENS


Tenant  shall  keep the Premises,  free  from  any  liens arising  out  of any  work  performed, material  furnished  or obligations  incurred  by or for Tenant.   In the event that Tenant shall not, within ten (10) days following  the imposition  of any such lien, cause the lien to be released of record  by payment  or posting  of a proper  bond,  Landlord  shall  have in addition  to all other remedies provided herein and by law the right but not the obligation to cause same to be released by such means as it shall deem proper, including  payment of the claim giving rise to such lien. All  such  sums  paid  by  Landlord  and  all  expenses  incurred  by  it  in  connection  therewith (including, without limitation, reasonable attorneys' fees) shall be payable to Landlord by Tenant upon demand.  Landlord shall have the right at all times to post and keep posted on the Premises any notices permitted or required by law or that Landlord shall deem proper for the protection of Landlord, the Premises, from mechanics'  and materialmen's liens.  Tenant shall give to Landlord at  least   five (5)  business   days'   prior  written   notice   of  commencement   of  any  repair  or construction on the Premises with a cost in excess of Fifty Thousand Dollars ($50,000.00).


20.   ENTRY  BY LANDLORD


(a)   In General.  Tenant shall permit the Landlord  and the Landlord Parties to enter into and upon the Premises at all reasonable times, upon reasonable  notice of not less than 24 hours (except  in the  case  of an  emergency,  for  which  no  notice  shall  be required),  and  subject  to Tenant's reasonable  security  arrangements,  for the purpose of inspecting the same or showing the Premises to prospective purchasers or lenders or to provide services, alter, improve, maintain and repair  the Premises  or the Building  as required  or permitted  of Landlord  under the terms hereof, or for any other business purpose, without any rebate of Rent and without any liability to Tenant for any loss of occupation or quiet enjoyment of the Premises thereby occasioned (except for  actual  damages  resulting  from  the  sole  active  gross  negligence  or  willful  misconduct  of
			
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Landlord);  Tenant shall permit Landlord  to post notices of non-responsibility  and ordinary "for sale" or "for  lease" signs.   No such entry shall be construed to be a forcible  or unlawful entry into, or a detainer of, the Premises, or an eviction or constructive eviction of Tenant from the Premises.   Landlord may temporarily  close entrances, doors, elevators or other facilities without liability  to Tenant  by reason of such closure  in the case of an emergency  and when Landlord otherwise reasonably deems such closure necessary.


21.  DESTRUCTION AND DAMAGE


(a)   If the Project or the Premises are damaged  by fire or other perils covered by extended coverage  insurance, Tenant shall give Landlord  prompt notice thereof.   Landlord  shall provide notice of its estimated time to restore the Premises within ninety (90) days after such notice.


(i)     In the event of Major Damage or Destruction that Landlord estimates will take in excess of two hundred seventy days to repair, either Landlord or Tenant may elect to terminate this Lease  by written  notice to the other  party  given within  thirty  (30) days  after the date  of Landlord's notice of the estimated  time to restore, in which case this Lease shall be deemed to have  terminated   as  of  the  Casualty   Discovery   Date.     As  used  herein  "Major   Damage  or Destruction" shall mean damage or destruction of all or of any portion of the improvements constructed   by  Landlord  on  the  Project,  if  the  hard  costs  of  restoring  such  portion  of  the improvements will exceed twenty-five percent (25%) of the hard cost of replacing all such improvements  in their entirety.  To the extent neither party terminates this Lease, Landlord shall commence promptly to repair and restore the Premises and prosecute the same diligently to completion, and the Lease shall remain in full force and effect.


(ii)    In  the  event  of  damage  other  than  Major  Damage  or  Destruction  for  which Landlord  will receive insurance proceeds sufficient  to cover the costs to repair and restore such damage  plus  deductibles,  and,  if the damage  may  be substantially  repaired  or restored  to  its condition  existing immediately  prior to such damage or destruction  within two hundred seventy (270) days from the Casualty Discovery Date, then subject to applicable Laws, Landlord shall commence  and proceed diligently  with the work of repair and restoration,  in which event this Lease shall continue in full force and effect.   If such repair and restoration  requires longer than two hundred seventy (270) days or if the insurance proceeds therefor (plus any amounts Tenant may elect or is obligated  to contribute)  are not sufficient  to cover  the cost of such repair and restoration  plus deductibles,  Landlord  may elect either to so repair and restore, in which event this Lease shall continue in full force and effect, or not to repair or restore, in which event this Lease shall terminate.  In either case, Landlord shall give written notice to Tenant of its intention within ninety (90) days after the Casualty  Discovery Date.  If Landlord elects not to restore the Premises, this Lease shall be deemed to have terminated as of the Casualty Discovery Date.


(iii)   Notwithstanding   anything  to  the  contrary  contained  in  this  Paragraph,  in the event of damage to the Premises occurring  during the last twelve (12) months of the Term, and the  Building  cannot  be  substantially  used  by  Tenant  and  the  damage  cannot  be  repaired  or restored  within sixty (60) days, either Landlord  or Tenant may elect to terminate this Lease by written  notice  of  such  election  given  to  the  other,  within  thirty  (30)  days  after the  Casualty Discovery Date.
			
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(b)   If the Premises are damaged by any peril not fully covered by insurance proceeds to be received by Landlord (except for any amounts applicable to a deductible),  and the cost to repair such damage exceeds $125,000  and any amount Tenant may agree to contribute, Landlord may elect either to commence  promptly  to repair and restore the Premises  and prosecute the same diligently to completion, in which event this Lease shall remain in full force and effect; or not to repair  or restore the Premises,  in which  event this Lease shall terminate.    Landlord shall  give Tenant written notice of its intention within one hundred eighty (180) days after the Casualty Discovery  Date.   If Landlord  elects not to restore the Premises, this Lease shall be deemed to have  terminated  as  of  the  date  on  which  Tenant  surrenders  possession  of  the  Premises  to Landlord,  except  that  if  the  damage  to  the  Premises  materially  impairs  Tenant's   ability  to continue  its  business  operations  in  the  Premises,  then  this  Lease  shall  be  deemed  to  have terminated as of the date such damage occurred.


(c)   Notwithstanding anything to the contrary in this Paragraph 21, Landlord shall have the option  to terminate this Lease, exercisable  by notice to Tenant within sixty (60) days after the Casualty Discovery Date, in each ofthe following instances:


(i)     If the Building or any portion thereof is damaged or destroyed and the repair and restoration  of  such  damage  requires  longer  than  two  hundred  seventy  (270)  days  from  the Casualty Discovery Date.


(ii)    If the Building or the Project or any portion thereof is damaged or destroyed and the insurance proceeds therefor (when added to any deductible plus $125,000)  are not sufficient to  cover  the  costs  of  repair  and  restoration,  regardless  of  whether  or  not  the  Premises  is destroyed, unless the difference is covered by Tenant.


(d)   In the event of repair and restoration  as herein provided,  the monthly installments  of Base  Rent  shall  be abated  proportionately  in the ratio which  Tenant's use of the Premises  is impaired during the period of such repair or restoration; provided, however, that Tenant shall not be entitled to such abatement to the extent that any action or inaction of Tenant or Tenant Parties resulted in the denial of rental interruption  insurance, if any.  Except as expressly provided in the immediately  preceding  sentence  with respect to abatement  of Base Rent, Tenant shall have no claim  against  Landlord  for,  and  hereby  releases  Landlord   and  the  Landlord  Parties  from responsibility  for and waives its entire claim of recovery for any cost, loss or expense suffered or incurred  by Tenant as a result of any damage to or destruction  of the Premises, the Building or the Project  or the repair or restoration  thereof,  including,  without  limitation,  any cost, loss or expense resulting from any loss of use of the whole or any part of the Premises, the Building or the  Project  and/or  any  inconvenience   or  annoyance  occasioned   by  such  damage,  repair  or restoration.


(e)   If Landlord  is obligated  to or elects to repair or restore as herein provided, Landlord shall   repair   or   restore   the   Premises   substantially   to  their   condition   existing   as   of  the Commencement  Date; and Tenant  shall  promptly  repair and restore,  at Tenant's  expense,  the Tenant Improvements and any Alterations.


(f)     Tenant  hereby  waives  the  provisions  of  California  Civil  Code  Section 1932(2)  and Section 1933(4) which permit termination of a lease upon destruction ofthe leased premises, and
			
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the  provisions of  any  similar  law  now  or  hereinafter in effect,  and  the  provisions of  this Paragraph 21 shall govern exclusively in case of such destruction.


22.   CONDEMNATION


(a)   If  the  whole  or  any  material  part  of  the  Premises,  the  Building,  the  Project  is permanently taken for any public or quasi-public purpose by any lawful governmental power or authority, by exercise of the right of appropriation, inverse condemnation, condemnation or eminent domain, or sold to prevent such taking (each such event being referred to as a "Condemnation"), and (i) such Condemnation renders the Premises, the Building, the Project unsuitable, in Landlord's reasonable opinion, for the purposes for which they were constructed; or (ii) the Premises, the  Building, the  Project cannot be repaired, restored or replaced at a reasonable  expense to  an  economically  profitable  unit,  then  Landlord  may,  at  its  option, terminate this Lease as of the date title vests in the condemning party.   If twenty-five percent (25%) or more of the Premises is taken and if the Premises remaining after such Condemnation and any repairs by Landlord would be untenantable (in Landlord's reasonable opinion) for the conduct of Tenant's business operations, Tenant shall have the right to terminate this Lease as of the date title vests in the condemning party.   If either party elects to terminate this Lease as provided herein, such election shall be made by written notice to the other party given within ninety (90) days after the nature and extent of such Condemnation have been finally determined. If neither Landlord nor Tenant elects to terminate this Lease to the extent permitted above, Landlord shall promptly proceed to restore the Premises, to the extent of any Condemnation award received by Landlord, to substantially the same condition as existed prior to such Condemnation, allowing for the reasonable effects of such Condemnation, and a proportionate abatement shall be made to the Base Rent corresponding to the time during which, and to the portion of the floor area of the Premises (adjusted for any increase thereto resulting from any reconstruction) of which, Tenant is deprived on account of such Condemnation and restoration, as reasonably determined by Landlord.   Except as expressly provided in the immediately preceding sentence with respect to abatement of Base Rent, Tenant shall have no claim against Landlord for, and hereby releases Landlord and the Landlord Parties from responsibility for and waives its entire claim of recovery for any cost, loss or expense suffered or incurred by Tenant as a  result of any Condemnation, whether permanent or temporary, or the repair or restoration of the Premises, the Building or the Project following such Condemnation, including, without limitation, any cost, loss or expense resulting from any loss of use of the whole or any part of the Premises, the Building, the Project and/or any inconvenience or annoyance occasioned by such Condemnation, repair or restoration.  The provisions of California Code of Civil Procedure Section 1265.130, which allows either party to petition the Superior Court to terminate this Lease in the event of a partial taking of the Premises, the Building or the Project, and any other applicable law now or hereafter enacted, are hereby waived by Tenant.


(b)   Landlord shall be entitled to any and all compensation, damages, income, rent, awards, or any interest therein whatsoever which may be paid or made in connection with any Condemnation, and Tenant shall have no claim against Landlord for the value of any unexpired term of this Lease or otherwise; provided, however, that Tenant shall be entitled to receive any award  separately  allocated  by  the  condemning  authority to  Tenant  for  Tenant's  relocation expenses or the value of Tenant's  Property (specifically excluding components of the Premises which under this Lease or by law are or at the expiration of the Term will become the property of
			
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Landlord, including without limitation fixtures and Alterations), provided that such award does not reduce any award otherwise allocable or payable to Landlord.


23.   ASSIGNMENT AND SUBLETTING


(a)   Tenant shall not voluntarily or by operation of law, (1) mortgage, pledge, hypothecate or encumber this Lease or any interest herein, (2) assign or transfer this Lease or any interest herein, sublease the Premises or any part thereof, or any right or privilege appurtenant thereto, or allow any other person (the employees and invitees of Tenant excepted) to occupy or use the Premises, or any portion thereof, without first obtaining the written consent of Landlord, which consent shall not be withheld unreasonably as set forth below in this Paragraph 23, provided that Tenant is not then in Default under this Lease nor is any event then occurring which with the giving of notice or the passage of time, or both, would constitute a Default hereunder. Except in connection with an offering of shares to the public on a nationally recognized exchange, a transfer of greater than a fifty percent (50%) interest (whether stock, partnership interest, membership  interest or  otherwise)  of  Tenant,  either  in  one (1)  transaction  or  a  series  of transactions shall be deemed to be an assignment under this Lease.  Notwithstanding anything to the contrary contained in  Paragraph 23(a), Tenant  may, subject to  Landlord's  prior written consent,  but  without   Landlord's   having  any  rights  pursuant  to   clause  (1)   or   (2)  of Paragraph 23(b) below, and without the payment of any amounts pursuant to this Paragraph 23, sublet the Premises or assign this Lease to a Tenant Affiliate, provided that (i) Tenant shall give not less than five (5) business days' prior written notice thereof to Landlord (to the extent such notice is permitted by applicable Law), (ii) Tenant shall continue to be fully obligated under this Lease, (iii) any such assignee or sublessee shall expressly assume and agree to perform all the terms and conditions of this Lease to be performed by Tenant (but with respect to a sublease, only with respect to that portion of the Premises that is the subject of the sublease and excluding all rental obligations of Tenant hereunder), and (iv) such Tenant Affiliate has a tangible net worth (determined in accordance with GAAP) equal to or greater than the tangible net worth of Tenant as of the date of the proposed assignment.  As used herein, "Tenant  Affiliate" means (A) an entity controlling, controlled by or under common control with Tenant, (B) a successor entity related to Tenant by merger, consolidation, nonbankruptcy reorganization, or government action, or (C) a purchaser of all or substantially all of Tenant's  assets located in the Premises; and a party shall be deemed to "control" another party for purposes of the definition contained in the aforesaid clause (A) only if the first party owns more than fifty percent (50%) of the stock or other beneficial interests of the second party.   In addition to the foregoing, any assignee of Tenant must have a tangible net worth (determined in accordance with GAAP) sufficient, in Landlord's reasonable opinion, to enable it to perform its obligations under the Lease.


(b)   When Tenant requests Landlord's  consent to such assignment or subletting, it shall notify Landlord in writing of the name and address of the proposed assignee or subtenant and the nature and character of the business of the proposed assignee or subtenant and shall provide current and three (3) years'  prior financial statements for the proposed assignee or subtenant, which financial statements shall be audited (to the extent available) and shall in any event be prepared in accordance with generally accepted accounting principles.  Tenant shall also provide Landlord with a copy of the proposed sublease or assignment agreement, including all material terms and conditions thereof.  Landlord shall have the option, to be exercised within fifteen (15) days of receipt of the foregoing, to (1) terminate this Lease as of the commencement date stated
			
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in the proposed assignment or sublease if the sublease is for more than fifty percent (50%) of the Premises, (2) sublease or take an assignment, as the case may be, from Tenant of the interest, or any portion thereof, in this Lease and/or the Premises that Tenant proposes to assign or sublease, on the same  terms  and  conditions  as stated  in the proposed  sublet  or assignment  agreement, (3) consent  to the  proposed  assignment  or sublease,  or  (4) refuse  its consent  to the proposed assignment  or sublease,  provided  that (A) such consent  shall  not be unreasonably  withheld  so long as Tenant is not then  in Default under this Lease  nor is any event then occurring  which, with the giving of notice or the passage of time, or both, would constitute a Default hereunder, and (B) as a condition  to  providing  such  consent,  Landlord  may  require  attornment  from  the proposed subtenant on terms and conditions acceptable to Landlord.  In the event Landlord elects to terminate this Lease or sublease or take an assignment from Tenant of the interest, or portion thereof, in this Lease and/or the Premises that Tenant proposes to assign or sublease as provided in the foregoing clauses (1) and (2), respectively, then Landlord shall have the additional right to negotiate directly with Tenant's proposed assignee or subtenant and to enter into a direct lease or occupancy agreement with such party on such terms as shall be acceptable to Landlord in its sole and absolute discretion, and Tenant hereby waives any claims against Landlord related thereto, including, without limitation, any claims for any compensation  or profit related to such lease or occupancy agreement.


(c)   Without otherwise  limiting the criteria upon which Landlord may withhold its consent, Landlord shall be entitled to consider all reasonable criteria including, but not limited to, the following:  (1) whether the use to be made of the Premises by the proposed subtenant or assignee will comply  with the Permitted  Use, and whether  such  use would  be prohibited  by any other portion of this Lease,  including,  but not limited to, any rules and regulations  then in effect, or under applicable Laws, and whether such use imposes a greater load upon the Premises and the Building  and  Project  services  than  imposed  by  Tenant,  (2) the  business  reputation  of  the proposed  individuals  who  will  be  managing  and  operating   the  business  operations  of  the proposed assignee or subtenant, and the long-term financial  and competitive  business prospects of the proposed assignee or subtenant, and (3) the creditworthiness and financial stability of the proposed assignee or subtenant  in light of the responsibilities involved.   In any event, Landlord may  withhold  its consent  to  any assignment  or  sublease,  if (i) the actual  use proposed  to be conducted  in the Premises  or portion thereof conflicts  with the provisions of Paragraph 9(a) or (b) above or with any other lease which restricts the use to which any space in the Building or the   Project   may   be   put,   (ii) the   proposed   assignment   or   sublease   requires   alterations, improvements  or additions  to the Premises or portions  thereof, (iii) the portion of the Premises proposed to be sublet is irregular  in shape and/or does not permit safe or otherwise appropriate means of ingress and egress, or does not comply with governmental  safety and other codes, and (iv) the proposed sublessee or assignee is either a governmental or quasi-governmental agency or instrumentality thereof.


(d)   If Landlord  approves an assignment or subletting as herein provided, Tenant shall pay to Landlord, as Additional  Rent, fifty percent (50%) of the excess, if any, of (1) the rent and any additional  rent  payable  by  the  assignee  or  sublessee  to  Tenant,  minus  (2) Base  Rent  plus Additional Rent allocable to that part of the Premises affected by such assignment or sublease pursuant to the provisions of this Lease after deducting Tenant's reasonable marketing costs, real estate commissions,  attorneys' fees, improvement  costs and any other costs directly associated with the sublet or assignment  of the Premises, amortized  over the life of the sublease in the case
			
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of a sublease.   The assignment  or sublease  agreement,  as the case  may be, after approval  by Landlord, shall not be amended without Landlord's prior written consent, and shall contain a provision  directing  the  assignee  or subtenant  to pay  the rent  and  other  sums due  thereunder directly to Landlord upon receiving written notice from Landlord that Tenant is in default under this Lease with respect to the payment of Rent.  In the event that, notwithstanding  the giving of such notice, Tenant collects any rent or other sums from the assignee or subtenant, then Tenant shall hold such sums in trust for the benefit of Landlord and shall immediately forward the same to Landlord.  Landlord's collection of such rent and other sums shall not constitute an acceptance by Landlord of attornment by such assignee or subtenant.


(e)   Notwithstanding any assignment or subletting, Tenant and any guarantor or surety of Tenant's  obligations  under this Lease shall at all times  remain fully and primarily  responsible and liable for the payment of the Rent and for compliance with all of Tenant's other obligations under this Lease (regardless of whether Landlord's approval has been obtained for any such assignment or subletting).


(f)    Tenant   shall   pay  Landlord's   reasonable   fees  not  to  exceed   $1,000.00   plus  the reasonable  fees  of  Landlord's counsel),  incurred  in  connection  with  Landlord's   review  and processing of documents regarding any proposed assignment or sublease.


(g)   A consent to one assignment, subletting, occupation or use shall not be deemed to be a consent to any other or subsequent assignment, subletting, occupation or use, and consent to any assignment  or subletting  shall in no way relieve Tenant of any liability under this Lease.   Any assignment  or subletting  without  Landlord's  consent  shall  be void, and shall, at the option  of Landlord, constitute a Default under this Lease.


(h)   Notwithstanding anything in this Lease to the contrary, in the event Landlord consents to an assignment  or subletting  by Tenant  in accordance  with the terms of this  Paragraph 23, Tenant's assignee  or subtenant  shall have no right to further  assign  this Lease or any  interest therein or thereunder  or to further sublease all or any portion of the Premises without the prior written consent of Landlord, in its sole and absolute discretion.   In furtherance of the foregoing, Tenant acknowledges and agrees on behalf of itself and any assignee or subtenant claiming under it (and any such assignee or subtenant by accepting such assignment or sublease shall be deemed to acknowledge and agree) that no sub-subleases or further assignments of this Lease shall be permitted at any time without the prior written consent of Landlord.


(i)    If this Lease  is assigned,  whether or not in violation  of the provisions of this Lease, Landlord  may collect  Rent from the assignee.   If the Premises or any part thereof is sublet or used  or  occupied  by  anyone  other  than  Tenant,  whether  or  not  in  violation  of  this  Lease, Landlord may, after a Default by Tenant, collect Rent from the subtenant or occupant.  In either event, Landlord may apply the net amount collected to Rent, but no such assignment, subletting, occupancy or collection  shall be deemed a waiver of any of the provisions of this Paragraph 23, or the acceptance  of the assignee,  subtenant or occupant  as tenant, or a release of Tenant from the further  performance  by Tenant  of Tenant's obligations  under this  Lease.   The consent  by Landlord  to  an  assignment,  mortgaging,  pledging,  encumbering,  transfer,  use, occupancy  or subletting pursuant to any provision of this Lease shall not, except as otherwise provided herein, in any way be considered  to relieve Tenant from obtaining  the express consent of Landlord to
			
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any other or further assignment, mortgaging, pledging, encumbering, transfer, use, occupancy or subletting.  References in this Lease to use or occupancy by anyone other than Tenant shall not be construed as limited to subtenants and those claiming under or through subtenants but as including also licensees or others claiming under or through Tenant, immediately or remotely. The listing of any name other than that of Tenant on any door of the Premises or on any directory or in any elevator in the Building, or otherwise, shall not, except as otherwise provided herein, operate to vest in the person so named any right or interest in this Lease or in the Premises, or be deemed to constitute, or serve as a substitute for, or any waiver of, any prior consent of Landlord required under this Paragraph 23.


G)   Each subletting and/or assignment pursuant to this Paragraph shall be subject to all of the covenants, agreements, terms, provisions and conditions contained in this Lease and each of the covenants, agreements, terms, provisions and conditions of this Lease shall be automatically incorporated therein.   If Landlord shall consent to, or reasonably withhold its consent to, any proposed assignment or sublease, Tenant shall indemnify, defend and hold harmless Landlord against and from any and all loss, liability, damages, costs and expenses (including reasonable counsel fees) resulting from any claims that may be made against Landlord by the proposed assignee or sublessee or by any brokers or other persons claiming a commission or similar fee in connection with the proposed assignment or sublease.


(k)   Tenant  acknowledges  and  agrees  that  the  restrictions,  conditions  and  limitations imposed by this Paragraph 23 on Tenant's ability to assign or transfer this Lease or any interest herein, to sublet the Premises or any part thereof, to transfer or assign any right or privilege appurtenant to the Premises, or to allow any other person to occupy or use the Premises or any portion thereof, are, for the purposes of California Civil Code Section 1951.4, as amended from time to time, and for all other purposes, reasonable at the time that this Lease was entered into, and shall be deemed to be reasonable at the time that Tenant seeks to assign or transfer this Lease or any interest herein, to sublet the Premises or any part thereof, to transfer or assign any right or privilege appurtenant to the Premises, or to allow any other person to occupy or use the Premises or any portion thereof.


24.   DEFAULT


The occurrence of any one of the following events shall constitute a default on the part of
Tenant ("Default"):


(a)   The vacation or abandonment of the Premises by Tenant for a period of thirty (30) consecutive days or any vacation or abandonment of the Premises by Tenant which would cause any insurance policy to be invalidated or otherwise lapse in each of the foregoing cases irrespective of whether or not Tenant is then in monetary default under this Lease. Tenant agrees to notice and service of notice as provided for in this Lease and waives any right to any other or further notice or service of notice which Tenant may have under any statute or law now or hereafter in effect;


(b)   Failure to pay any installment of Rent or any other monies due and payable hereunder, said failure continuing for a period of three (3) days after the same is due;
			
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(c)   The filing of a voluntary petition in bankruptcy by Tenant, the filing by Tenant of a voluntary petition for an arrangement, the filing by or against Tenant of a petition, voluntary or involuntary, for reorganization, or the filing of an involuntary petition by the creditors of Tenant, said involuntary petition remaining undischarged for a period of sixty (60) days;


(d)   Receivership, attachment, or  other  judicial seizure of  substantially all of  Tenant's assets on the Premises, such attachment or other seizure remaining undismissed or undischarged for a period of sixty (60) days after the levy thereof;


(e)   Death or disability of Tenant, if Tenant is a natural person, or the failure by Tenant to maintain its legal existence, if Tenant is a corporation, partnership, limited liability company, trust or other legal entity;


(f)  Failure of Tenant to execute and deliver to Landlord any estoppel certificate, subordination agreement, or lease amendment within the time periods and in the manner required by Paragraphs 31 or 32 or 43, and/or failure by Tenant to deliver to Landlord any financial statement within the time period and in the manner required by Paragraph 41;


(g)   An assignment or sublease, or attempted assignment or sublease, of this Lease or the Premises  by  Tenant  contrary to  the  provision  of  Paragraph 23,  unless such  assignment or sublease is expressly conditioned upon Tenant having received Landlord's consent thereto;


(h)   Failure of Tenant to restore the Security Deposit to the amount and within the time period provided in Paragraph 7 above;


(i)    Failure in the performance of any of Tenant's  covenants, agreements or obligations hereunder (except those failures specified as events ofDefault in subparagraphs (b), (h), (k) or (I) herein or any other subparagraphs of this Paragraph 24, which shall be governed by the notice and cure periods set forth in such other subparagraphs), which failure continues for thirty (30) days after written notice thereof from Landlord to Tenant, provided that, if Tenant has exercised reasonable diligence to cure such failure and such failure cannot be cured within such thirty (30) day period despite reasonable diligence, Tenant shall not be in default under this subparagraph so long as Tenant thereafter diligently and continuously prosecutes the cure to completion and actually completes such cure within sixty (60) days after the giving of the aforesaid written notice;


G)   Chronic delinquency by Tenant in the payment of Rent, or any other periodic payments required to be paid by Tenant under this Lease.  "Chronic delinquency" means failure by Tenant to pay Rent, or any other payments required to be paid by Tenant under this Lease within three (3)   days   after   written   notice   thereof   for   any   three (3)   months   (consecutive   or nonconsecutive) during any period of twelve (12) months;


(k)  Any insurance required to be maintained by Tenant pursuant to this Lease shall be canceled or terminated or shall expire or be reduced or materially changed, except as permitted in this Lease;
			
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(I)    Any failure by Tenant to discharge  any lien or encumbrance  placed on the Project or any  part  thereof  in  violation  of  this  Lease  within  ten (10)  days  after  the  date  such  lien  or encumbrance  is filed or recorded against the Project or any part thereof;


(m)  Any failure by Tenant to promptly  remove, abate or remedy any Hazardous Materials located in, on or about the Premises or the Building in connection with any failure by Tenant to comply with Tenant's obligations under Paragraph 33;


(n)   Tenant's  failure to commence  business operations  in the Premises within one hundred eighty  (180)  days  following  the  Commencement   Date,  subject  to  delays  beyond  Tenant's reasonable control (other than financial difficulty); and


(o)   Any representation  of Tenant  herein  or in any financial  statement  or other materials provided  by Tenant or any guarantor  of Tenant's obligations  under this Lease shall prove to be untrue or inaccurate in any material respect, or any such financial statements  or other materials shall have omitted any material fact.


25.   LANDLORD'S REMEDIES


(a)    Termination.   In the event  of any  Default  by Tenant,  then  in addition  to any  other remedies available to Landlord at law or in equity and under this Lease, Landlord may terminate this Lease immediately and all rights of Tenant hereunder by giving written notice to Tenant of such intention to terminate.  Tenant waives redemption or relief from forfeiture  under California Code of Civil Procedure Sections 1174 and 1179, or under any other pertinent present or future Law, in the event Tenant is evicted  or Landlord  takes possession  of the Premises  by reason of any  Default  of  Tenant  hereunder.     If  Landlord  shall  elect  to  so  terminate  this  Lease  then Landlord may recover from Tenant:


(i)     the worth at the time of award of any unpaid Rent and any other sums due and payable which have been earned at the time of such termination; plus


(ii)    the worth at the time of award of the amount by which the unpaid Rent and any other sums due and payable which  would  have been earned after termination  until the time of award  exceeds  the  amount  of  such  rental  loss  Tenant  proves  could  have  been  reasonably avoided; plus


(iii)   the worth at the time of award of the amount by which the unpaid Rent and any other  sums due and payable  for the balance  of the term of this Lease  after the time of award exceeds the amount of such rental loss that Tenant proves could be reasonably avoided; plus


(iv)   any  other  amount   necessary   to  compensate   Landlord   for  all  the  detriment proximately  caused by Tenant's failure  to perform  its obligations  under this Lease or which in the ordinary  course would  be likely  to result therefrom,  including,  without  limitation,  (A) any costs  or  expenses  incurred  by  Landlord   (1) in  retaking  possession   of  the  Premises;  (2) in maintaining,  repairing, preserving,  restoring,  replacing,  cleaning,  altering, remodeling  or rehabilitating  the Premises or any affected portions of the Building or the Project, including such actions  undertaken  in connection  with the reletting  or attempted  reletting  of the Premises to a new  tenant  or  tenants;  (3) for  leasing  commissions,  advertising  costs  and  other  expenses  of
			
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reletting  the  Premises;  or  (4) in  carrying  the  Premises,  including  taxes,  insurance  premiums, utilities and security precautions;  (B) any unearned  brokerage  commissions  paid in connection with this Lease; (C) reimbursement  of any previously waived or abated Base Rent or Additional Rent or any free rent or reduced rental rate applied hereunder;  and (D) any concession made or paid by Landlord for the benefit of Tenant including, but not limited to, any moving allowances, contributions,  payments or loans by Landlord for tenant improvements  or build-out allowances, if any, and any outstanding  balance (principal  and accrued interest) of any tenant improvement loan), or assumptions by Landlord of any of Tenant's previous lease obligations; plus


(v)     such reasonable attorneys' fees incurred by Landlord as a result of a Default, and costs in the event suit is filed by Landlord to enforce such remedy; and plus


(vi)   at  Landlord's election,  such  other  amounts  in  addition  to  or  in  lieu  of  the foregoing as may be permitted from time to time by applicable law.


(vii)  As used in subparagraphs  (i) and (ii) above, the "worth  at the time of award" is computed by allowing interest at an annual rate equal to twelve percent (12%) per annum or the maximum  rate permitted  by law, whichever  is less.   As used  in subparagraph (iii)  above, the "worth  at the time of award"  is computed  by discounting  such amount  at the discount rate of Federal  Reserve  Bank of San Francisco  at the time of award,  plus one percent (1%).    Tenant hereby  waives for  Tenant  and  for  all those  claiming  under  Tenant  all  right now or hereafter existing to redeem by order or judgment  of any court or by any legal process or writ, Tenant's right of occupancy of the Premises after any termination of this Lease.


(b)   Continuation of Lease.  In the event of any Default by Tenant, then in addition to any other  remedies available  to Landlord  at law or in equity  and under this Lease, Landlord  shall have the remedy described in California  Civil Code Section 1951.4 (Landlord may continue this Lease  in effect after  Tenant's Default  and abandonment  and  recover  Rent as  it becomes  due, provided that Tenant has the right to sublet or assign, subject only to reasonable limitations).  In addition, Landlord shall not be liable in any way whatsoever for its failure or refusal to relet the Premises.     For  purposes  of  this  Paragraph 25(b),  the  following   acts  by  Landlord  will  not constitute the termination of Tenant's right to possession of the Premises:


(i)     Acts of maintenance  or preservation  or efforts to relet the Premises,  including, but not limited to, alterations,  remodeling,  redecorating,  repairs, replacements and/or painting as Landlord shall consider advisable for the purpose of reletting the Premises or any part thereof, or


(ii)     The  appointment   of  a  receiver   upon  the  initiative   of  Landlord  to  protect
Landlord's interest under this Lease or in the Premises.


(c)    Termination.  No action by Landlord shall be construed as an election to terminate this Lease  unless  a written  notice  of  such  intention  is given  to  Tenant  or  unless  the termination thereof is decreed by a court of competent jurisdiction.


(d)   Cumulative Remedies.  The remedies herein provided are not exclusive and Landlord shall have any and all other remedies provided herein or by law or in equity.












			
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(e)   No Surrender.  No act or conduct of Landlord, whether consisting of the acceptance of the keys to the Premises, or otherwise,  shall be deemed to be or constitute an acceptance of the surrender of the Premises by Tenant prior to the expiration of the Term, and such acceptance by Landlord of surrender by Tenant shall only flow from and must be evidenced by a written acknowledgment of acceptance  of surrender signed by Landlord.  The surrender of this Lease by Tenant, voluntarily or otherwise,  shall not work a merger unless Landlord  elects in writing that such merger take place, but shall operate as an assignment to Landlord of any and all existing subleases, or Landlord may, at its option, elect in writing to treat such surrender as a merger terminating  Tenant's  estate  under this Lease, and thereupon  Landlord  may terminate any or all such subleases by notifying the sublessee of its election so to do within five (5) days after such surrender.


26.   LANDLORD'S RIGHT TO PERFORM TENANT'S OBLIGATIONS


(a)   Without limiting the rights and remedies of Landlord contained in Paragraph 25 above, if Tenant  shall be in Default  in the performance  of any of the terms, provisions,  covenants  or conditions  to be performed  or complied  with by Tenant  pursuant  to this Lease, then Landlord may at Landlord's  option, without any obligation to do so, and without notice to Tenant perform any such term, provision,  covenant,  or condition, or make any such payment  and Landlord  by reason of so doing shall not be liable or responsible for any loss or damage thereby sustained by Tenant or anyone holding under or through Tenant or any of Tenant Parties.


(b)   Without limiting  the rights of Landlord  under Paragraph 26(a) above, Landlord  shall have the right at Landlord's option, without any obligation to do so, to perform any of Tenant's covenants or obligations  under this Lease without notice to Tenant in the case of an emergency, as  determined   by  Landlord   in  its  sole  and  absolute   judgment,   or  if  Landlord  otherwise determines  in its sole discretion  that such performance  is necessary  or desirable for the proper management and operation of the Building or the Project.


(c)   If Landlord  performs  any of Tenant's obligations  hereunder  in accordance  with this Paragraph 26, the full amount  of the cost and expense  incurred  or the payment so made or the amount of the loss so sustained  shall immediately  be owing by Tenant to Landlord, and Tenant shall promptly pay to Landlord  upon demand, as Additional  Rent, the full amount thereof with interest thereon from the date of payment  by Landlord at the lower of (i) twelve percent (12%) per annum, or (ii) the highest rate permitted by applicable law.


27. ATTORNEYS'FEES


(a)   Prevailing Party.   If either party hereto fails to perform  any of its obligations  under this  Lease  or  if  any  dispute  arises  between  the  parties  hereto  concerning  the  meaning  or interpretation of any provision of this Lease, then the defaulting party or the party not prevailing in such dispute,  as the case  may be, shall pay any and all costs  and expenses incurred  by the other party on account of such default and/or in enforcing or establishing its rights hereunder, including, without limitation, court costs and reasonable attorneys' fees and disbursements.   Any such attorneys'  fees and other expenses  incurred  by either party  in enforcing a judgment  in its favor under this Lease shall be recoverable  separately from and in addition to any other amount
			
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included in such judgment,  and such attorneys'  fees obligation  is intended to be severable from the other provisions of this Lease and to survive and not be merged into any such judgment.


(b)   Collection Costs.    Without   limiting   the  generality   of  Paragraph 27(a)  above,   if Landlord  utilizes  the  services  of an attorney  for  the  purpose  of collecting  any Rent  due  and unpaid and not cured  within  any applicable  cure  period  by Tenant  or in connection  with any other  breach  of this  Lease  by  Tenant,  Tenant  agrees  to  pay  Landlord  reasonable  and  actual attorneys'   fees,  regardless  of  the  fact  that  no  legal  action  may  be  commenced  or  filed  by Landlord.


28.   TAXES


Tenant shall be liable for and shall pay directly to the taxing authority, prior to delinquency, all taxes  levied  against  Tenant's Property.    If any  Alteration  installed  by Tenant  pursuant  to Paragraph 12 or any of Tenant's Property is assessed and taxed with the Project or the Building, Tenant  shall  pay such  taxes  to Landlord  within  thirty (30)  days after  delivery  to Tenant  of a statement therefor.


29.   CONFIDENTIALITY


Tenant acknowledges that the terms and conditions of this Lease are and shall remain confidential.  Tenant shall not reveal such terms and conditions to any third party (excepting only statements issued to either party's attorneys, accountants and financial advisors, and statements otherwise required by law or in connection  with an assignment,  sublease or other transferee,  so long as the receiving party is advised of the confidential  nature of the information and agrees to keep the same confidential.


30.   EFFECT OF CONVEYANCE


In the event of any Transfer  by Landlord of its entire interest in the Project, Landlord shall be and  hereby  is  entirely  freed  and  relieved  of  all  covenants  and  obligations  of  Landlord hereunder, and it shall be deemed and construed, without further agreement between the parties and the transferee  of such  interest, that the transferee  of Landlord's interest in the Project  has assumed and agreed to carry out any and all covenants and obligations of Landlord hereunder.


31.   TENANT'S ESTOPPEL CERTIFICATE


From time to time,  upon  written  request of Landlord,  Tenant  shall execute, acknowledge and deliver to Landlord or its designee, an Estoppel Certificate  in substantially the form attached hereto  as  Exhibit E  and  with  any  other  statements   reasonably   requested  by  Landlord  or  its designee.    Any  such  Estoppel  Certificate  may  be  relied  upon  by a prospective  transferee  of Landlord's   interest  or  a mortgagee  of (or  holder  of  a deed  of trust  encumbering)  Landlord's interest or assignment of any mortgage or deed of trust upon Landlord's interest in the Premises. If Tenant fails to provide such certificate  within ten (10) business days of receipt by Tenant of a written  request  by  Landlord   as  herein  provided,  such  failure  shall,  at  Landlord's   election, constitute a Default under this Lease, and Tenant shall be deemed to have given such certificate as above provided  without  modification  and shall be deemed to have admitted the accuracy  of
			
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any information  supplied  by Landlord to a prospective  purchaser or mortgagee or deed of trust holder.


32.   SUBORDINATION


(a)  Landlord shall use commercially reasonable efforts to obtain a subordination, non disturbance,  and  attornment  agreement  ("SNDA ')  from  its  lender,  in  the  form  of  Exhibit F attached  hereto.   Notwithstanding  the foregoing,  this  Lease  is subject  and  subordinate  to  all present and future ground or underlying leases of the Project and to the lien of any mortgages or trust  deeds,  now or hereafter  in force  against  the  Project  and  the Building,  if any, and to all renewals, extensions, modifications, consolidations and replacements thereof, and to all advances made or hereafter  to  be made  upon the security  of such  mortgages  or trust  deeds,  unless the holders of such mortgages  or trust deeds, or the lessors under such ground  lease or underlying leases, require in writing that this Lease be superior thereto.  Tenant covenants and agrees in the event any proceedings are brought for the foreclosure  of any such mortgage, to attorn so long as Tenant  has  been  offered  a  commercially  reasonable  SNDA  on  such  entity's  standard  form, without any deductions or set-offs whatsoever, to the purchaser upon any such foreclosure sale if so requested  to do so by such party, and to recognize  such party as the lessor under this Lease. Tenant covenants and agrees that in the event of cancellation  or termination of any ground lease or underlying lease in accordance with its terms or by surrender thereof, whether voluntary, involuntary or by operation of law, and provided that the lessor under any such ground lease or underlying  lease has either  approved  this Lease  in writing  or notified Tenant  in writing of its election to cause Tenant to attorn to it upon cancellation  or termination of such ground lease or underlying   lease,  then  this  Lease  shall  not  be  cancelled  or  terminated  as  a  result  of  the cancellation  or termination  of such ground lease or underlying  lease, but Tenant shall make full and complete attornment  to the lessor under any such ground  lease or underlying  lease for the balance of the term hereof with the same force and effect as though this Lease were originally made  directly  from  the  lessor  under  any  such  ground  lease  or  underlying  lease  to  Tenant. Following  Tenant's attornment  to purchaser  upon any foreclosure  sale or any lessor under any ground  lease or underlying  lease as set forth  above  (a "Successor Landlord"),  this Lease  shall continue in full force and effect as a direct lease between Successor Landlord and Tenant upon all of the terms, conditions and covenants as are set forth in this Lease, except that the Successor Landlord shall not (a) be liable for any previous  act or omission of Landlord  under this Lease, except  to  the  extent  such  act  or  omission  shall  constitute   a  continuing   Landlord  default hereunder; (b) be subject to any offset, not expressly  provided for in this Lease; or (c) be bound by any previous modification  of this Lease or by any previous prepayment of more than one (1) month's  Rent,  unless  such modification  or prepayment  shall  have been expressly  approved  in writing  by the Successor  Landlord  (or predecessor  in interest).    Tenant  shall, within  ten (10) business days of request by Landlord, execute such further instruments or assurances as Landlord may reasonably  deem necessary  to evidence or confirm  the subordination  or superiority  of this Lease to any mortgages, trust deeds, ground leases or underlying  leases and Tenant's  obligation to attorn to any holder of any mortgage or deed of trust or any lessor under any ground lease or underlying lease, subject to the provisions of this Paragraph 32.  Tenant waives the provisions of any current or future statute, rule or law which may give or purport to give Tenant any right or election  to  terminate  or  otherwise  adversely  affect  this  Lease  and  the obligations  of  Tenant hereunder in the event of any foreclosure proceeding or sale.
			
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33.   ENVIRONMENTAL COVENANTS


(a)   Definitions.


(i)     As used in this Lease, the term "Hazardous Materials" means (i) any substance or material that is included within the definitions of "hazardous substances," "hazardous materials," "toxic  substances,"  "pollutant," "contaminant," "hazardous  waste,"  or "solid  waste"  in any Environmental  Law; (ii) petroleum or petroleum  derivatives,  including crude oil or any fraction thereof,    all   forms   of   natural   gas,   and   petroleum    products   or   by-products    or   waste; (iii) polychlorinated  biphenyls (PCBs); (iv) asbestos  and asbestos containing  materials (whether friable or non-friable); (v) lead and lead based paint or other lead containing materials (whether friable or non-friable); (vi) urea formaldehyde; (vii) microbiological  pollutants; (viii) batteries or liquid  solvents  or  similar  chemicals;  (ix) radon  gas;  and  (x) mildew,  fungus,  mold,  bacteria and/or   other   organic   spore   material,   whether   or   not  airborne,   colonizing,   amplifying   or otherwise.


(ii)    As used in this Lease, the term "Environmental Laws" means all statutes, terms, conditions, limitations, restrictions, standards, prohibitions, obligations, schedules, plans and timetables  that  are  contained  in or  promulgated  pursuant  to  any  federal,  state  or  local  laws (including rules, regulations, ordinances, codes, judgments, orders, decrees, contracts, permits, stipulations,  injunctions,  the common law, court opinions, and demand or notice letters issued, entered, promulgated or approved thereunder), relating to pollution or the protection of the environment,  including laws relating to emissions,  discharges, releases or threatened  releases of Hazardous  Materials into ambient air, surface water, ground water or lands or otherwise relating to  the  manufacture,   processing,  distribution,   use,  treatment,  storage,  disposal,  transport  or handling   of   Hazardous   Materials   including,   but   not   limited   to,   the:      Comprehensive Environmental  Response  Compensation  and Liability  Act of 1980 (CERCLA),  as amended  by the Superfund  Amendments  and Reauthorization  Act of 1986 (SARA),  42 U.S.C. 9601 et seq.; Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 (RCRA),  42 U.S.C. 6901 et seq.; Federal  Water Pollution  Control Act, 33 U.S.C. 1251 et seq.; Toxic  Substances  Control  Act, 15 U.S.C. 2601  et seq.; Clean Air Act, 42 U.S.C. 7401 et seq.; and the Safe Drinking Water Act, 42 U.S.C. § 300f et seq.  "Environmental  Laws" shall include any  statutory  or  common  law  that  has  developed  or  develops  in the  future  regarding  mold, fungus, microbiological pollutants, mildew, bacteria and/or other organic spore material. "Environmental Law"  shall  not  include  laws  relating  to  industrial  hygiene  or worker  safety, except to the extent that such laws address asbestos  and asbestos containing  materials (whether friable or non-friable) or lead and lead based paint or other lead containing materials.


(b)   Tenant  Obligations.


(i)     During its use and occupancy  of the Premises Tenant will not permit Hazardous Materials  to be present on or about the Premises  except  for normal quantities  of cleaning  and other business supplies customarily  used and stored in an office and that it will comply with all Environmental Laws relating to the use, storage or disposal of any such Hazardous Materials. Notwithstanding anything  herein to the contrary  in no event shall Tenant permit any pesticides, insecticides or herbicides to be stored, used, or disposed in on or about the Premises without the prior written consent of Landlord.
			
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(ii)    If Tenant's  use of Hazardous Materials on or about the Premises results in a release, discharge or disposal of Hazardous Materials on, in, at, under, or emanating from, the Premises or the Project, Tenant agrees to investigate, clean up, remove or remediate such Hazardous Materials in full compliance with (i) the requirements of (A) all Environmental Laws and  (B) any  governmental  agency  or  authority  responsible  for  the  enforcement  of  any Environmental Laws; and (ii) any additional requirements of Landlord that are necessary, in Landlord's  sole discretion, to protect the value of the Premises or the Project.   Landlord shall also have the right, but not the obligation, to take whatever action with respect to any such Hazardous Materials that it deems necessary, in Landlord's sole discretion, to protect the value of the Premises or the Project.   All costs and expenses paid or incurred by Landlord in the exercise of such right shall be payable by Tenant promptly upon demand.  If Tenant knows, or has reasonable cause to believe, that a Hazardous Material has been released, discharged or disposed of in, on, under or about the Premises, then Tenant shall promptly give written notice of such fact to Landlord and shall promptly give Landlord a copy of any statement, report or notice concerning such event that Tenant has in its possession or control.


(iii)   Upon reasonable notice to Tenant not less than 24 hours' notice (except in the case of emergency), Landlord may inspect the Premises for the purpose of determining whether there exists on the Premises any Hazardous Materials or other condition or activity that is in violation of the requirements of this Lease or of any Environmental Laws.  The right granted to Landlord herein to perform inspections shall not create a duty on Landlord's part to inspect the Premises, or liability on the part of Landlord for Tenant's use, storage or disposal of Hazardous Materials,  it  being  understood  that  Tenant  shall  be  solely  responsible  for  all  liability  in connection therewith.


(iv)   Tenant shall surrender the Premises to Landlord upon the expiration or earlier termination of this Lease free of Hazardous Materials caused or permitted by any of the Tenant Parties and in a condition which complies with all Environmental Laws and any additional requirements of Landlord that are reasonably necessary to protect the value of the Premises, the Building or the Project.  Tenant's obligations and liabilities pursuant to this Paragraph 33 shall be in addition to any other surrender requirements in this Lease and shall survive the expiration or earlier termination of this Lease.  If it is reasonably determined by Landlord that the condition of all or any portion of the Premises, the Building, and/or the Project is not in compliance with the provisions of this Lease with respect to Hazardous Materials, including, without limitation, all Environmental Laws due to the violation of Tenant of the provisions of this Lease, at the expiration or earlier termination of this Lease, then at Landlord's sole option, Landlord may require Tenant to hold over possession of the Premises until Tenant can surrender the Premises to Landlord in the condition in which the Premises existed as of the Commencement Date.  The burden of proof hereunder shall be upon Tenant.  For purposes hereof, the term "normal wear and tear" shall not include any deterioration in the condition or diminution of the value of any portion of the Premises, the Building, and/or the Project in any manner whatsoever related to directly,  or  indirectly,  Hazardous  Materials.    Any  such  holdover  by  Tenant  will  be  with Landlord's  consent, will not be terminable by Tenant in any event or circumstance and will otherwise be subject to the provisions of Paragraph 36 below.


(v)    Tenant shall indemnify and hold harmless Landlord from and against any and all claims, damages, fines, judgments, penalties, costs, losses (including, without limitation, loss in
			
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value  of the Premises  or the Project,  damages  due to loss or restriction  of rentable or usable space, and damages due to any adverse  impact on marketing of the space and any and all sums paid for settlement of claims), liabilities and expenses (including, without limitation, reasonable attorneys', consultants',  and experts'  fees) incurred by Landlord during or after the term of this Lease  and  attributable  to  (i) any  Hazardous  Materials  placed  on  or  about  the  Premises,  the Building  or the Project by Tenant or Tenant Parties, or resulting from the action or inaction of Tenant  or Tenant  Parties, or (ii) Tenant's breach  of any provision  of this Paragraph 33.   This indemnification includes, without limitation, any and all costs incurred by Landlord due to any investigation  of the site or any cleanup,  removal or restoration  mandated  by a federal, state or local agency or political subdivision.


(c)   Landlord Obligations and Disclosures.


(i)     Landlord,  at  Landlord's sole  cost  and  expense,  shall  remove  any  Hazardous Materials   required  to  be  removed   in  connection   with  the  Base  Building   Work  and  shall indemnify  and  hold  Tenant  harmless  (including  reasonable  attorneys'   fees)  from  any  future action which shall occur as a result of the presence of Hazardous Materials  existent prior to the Commencement  Date, except to the extent  introduced to the Premises or exacerbated  by Tenant or any Tenant Party.


(ii)    To  the  extent  any  Hazardous   Materials  remain  in  place  in  accordance  with applicable   Law  (e.g.,  any  legally  entombed  older  roof  membranes),   Landlord  shall  remain responsible  for removing  the same  if and  when  required to be removed  by Law, or Landlord otherwise elects to remove the same.


(iii)   Landlord  hereby  discloses  that underground  tanks  holding  unknown substances were discovered  in 1997 and were  removed  under consultant  and government  supervision  and the work "signed off' as complete removal and restoration.


(d)  Survival.  The provisions of this Paragraph 33 shall survive the expiration or earlier termination  of this Lease.


34.   NOTICES


All notices and demands which are required or may be permitted to be given to either party by the  other  hereunder  shall  be  in writing  and  shall  be sent  by  United  States  mail,  postage prepaid, certified, or by personal  delivery  or nationally  recognized  overnight  courier, addressed to the addressee at Tenant's Address or Landlord's Address as specified in the Basic Lease Information, or to such other place as either party may from time to time designate in a notice to the other party given as provided herein.   Copies of all notices and demands given to Landlord shall additionally  be sent to Landlord's property  manager  at the address specified in the Basic Lease Information or at such other address as Landlord may specify in writing from time to time. Notice shall be deemed given upon actual receipt (or attempted delivery if delivery is refused), if personally  delivered,  or  one (1)  business  day  following  deposit  with  a  reputable  overnight courier that provides a receipt, or on the third (3rd) day following  deposit  in the United States mail in the manner described above.  Nothing contained  in this Paragraph 34 shall be deemed to limit any alternative  method of notification  to Tenant as may be permitted under applicable law,
			
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including  without  limitation  the provisions  of Section 1161,  et seq. of the California  Code of Civil Procedure or any successor statute hereinafter enacted.


35.   WAIVER


The  waiver of any  breach  of any  term,  covenant  or condition  of this Lease shall not be deemed to be a waiver of such term, covenant or condition or of any subsequent breach of the same or any other term, covenant  or condition herein contained.   The subsequent acceptance of Rent by Landlord shall not be deemed  to be a waiver of any preceding breach by Tenant, other than  the  failure  of  Tenant  to  pay  the  particular  rental  so  accepted,  regardless  of  Landlord's knowledge  of such  preceding  breach  at  the  time  of  acceptance  of  such  Rent.    No  delay  or omission  in the exercise of any right or remedy of Landlord in regard to any Default by Tenant shall impair such a right or remedy or be construed as a waiver.  Any waiver by Landlord of any Default must be in writing and shall not be a waiver of any other Default concerning the same or any other provisions of this Lease.


36.   HOLDING OVER


Any holding over after the expiration of the Term, without the express written consent of Landlord,  shall constitute  a Default  and, without limiting  Landlord's remedies provided in this Lease, such holding over shall be construed to be a tenancy at sufferance, at a rental rate equal to one hundred fifty percent (150%) of the Base Rent last due in this Lease, plus Additional Rent, and  shall  otherwise  be  on  the  terms  and  conditions  herein  specified,  so  far  as  applicable; provided, however, that in no event shall any renewal or expansion option, option to purchase, or other similar right or option contained  in this Lease be deemed applicable to any such tenancy at sufferance.   If the Premises are not surrendered at the end of the Term or sooner termination of this Lease, and in accordance  with the provisions  of Paragraphs 11 and 33(b)(ii),  Tenant shall indemnify,  defend  and  hold  Landlord  harmless  from  and against  any  and all  loss or  liability resulting from delay by Tenant in so surrendering the Premises including, without limitation, any loss or liability resulting from any claim against Landlord made by any succeeding tenant or prospective tenant founded on or resulting from such delay and losses to Landlord due to lost opportunities  to lease any portion  of the Premises to any such succeeding  tenant or prospective tenant, together with, in each case, actual attorneys'  fees and costs.


37.   SUCCESSORS AND ASSIGNS


The terms, covenants and conditions of this Lease shall, subject to the provisions as to assignment,  apply to and bind the heirs, successors,  executors,  administrators  and assigns of all of the parties hereto.  If Tenant shall consist of more than one entity or person, the obligations of Tenant under this Lease shall be joint and several.


38.   TIME


Time  is of the essence  of  this  Lease  and  each  and  every  term,  condition  and  provision herein.
			
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39.  BROKERS


Landlord and Tenant each represents and warrants to the other that neither it nor its officers or agents nor anyone acting on its behalf has dealt with any real estate broker except the Brokers specified in the Basic Lease Information in the negotiating or making of this Lease.  Landlord shall be responsible for payment of Landlord's Broker, if any, pursuant to separate written agreements, and each party agrees to indemnify and hold harmless the other from any claim or claims, and costs and expenses, including attorneys' fees, incurred by the indemnified party in conjunction with any other claim or claims of any other broker or brokers to a commission in connection with this Lease as a result of the actions of the indemnifying party.


40.   LIMITATION OF LIABILITY


In the event of any default or breach by Landlord under this Lease or arising in connection herewith or with Landlord's operation, management, leasing, repair, renovation, alteration or any other matter relating to the Project or the Premises Tenant's remedies shall be limited solely and exclusively to an amount which is equal to the lesser of (a) the interest in the Building of the then-current Landlord or (b) the equity interest Landlord would have in the Building if the Building were encumbered by third party debt in an amount equal to eighty percent (80%) of the value of the Building (as such value is determined by Landlord), provided that in no event shall such liability extend to any sales or insurance proceeds received by Landlord or the "Landlord Affiliates" in connection with the Project, the Building or the Premises.   For purposes of this Lease, "Landlord  Affiliates"  shall mean, collectively, Landlord, its partners, shareholders, members, officers, directors, employees, investment advisors, or any successor in interest of any of them.  Neither Landlord, nor any of the Landlord Affiliates shall have any personal liability therefor, and Tenant hereby expressly waives and releases such personal liability on behalf of itself and all persons claiming by, through or under Tenant.  The limitations of liability contained in this Paragraph 40 shall inure to the benefit of Landlord's and the Landlord Affiliates' present and future partners, beneficiaries, officers, directors, trustees, shareholders, members, agents and employees, and their respective partners, heirs, successors and assigns.  Under no circumstances shall any present or future partner of Landlord (if Landlord is a partnership), future member in Landlord (if Landlord is a limited liability company) or trustee or beneficiary (if Landlord or any partner or member of Landlord is a trust), have any liability for the performance of Landlord's obligations under this Lease.  Notwithstanding any contrary provision herein, neither Landlord nor the Landlord Affiliates shall be liable under any circumstances for injury or damage to, or interference with Tenant's  business, including, but not limited to, loss of profits, loss of rents or other revenues, loss of  business opportunity, loss of  goodwill or  loss of  use, in each case, however occurring.  The provisions of this paragraph shall apply only to the Landlord and the parties herein described, and shall not be for the benefit of any insurer nor any other third party.


41.   REMOVED.




42.   RULES AND REGULATIONS


Tenant shall comply  with the rules and regulations attached  hereto as Exhibit D, along with any  modifications,   amendments   and  supplements   thereto,   and  such  reasonable   rules  and regulations as Landlord may adopt, from time to time, for the orderly and proper operation of the Project (collectively, the "Rules  and  Regulations").  The Rules and Regulations may include, but shall  not  be  limited  to,  the  following:    (a) restrictions  on  parking;  and  (b) regulation  of  the 
































			
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removal, storage and disposal of Tenant's  refuse and other rubbish.  The then-current Rules and Regulations shall be binding upon Tenant upon delivery  of a copy of them to Tenant.  Landlord shall not be responsible to Tenant for the failure of any other person to observe and abide by any of said Rules and Regulations.


43.   MORTGAGEE PROTECTION


(a)   Modifications for Lender.  If, in connection with obtaining financing for the Project or any portion thereof, Landlord's lender shall request reasonable  modifications to this Lease as a condition to such financing, Tenant shall not unreasonably withhold, delay or defer its consent to such modifications,  provided that such modifications do not materially adversely affect Tenant's rights or increase Tenant's obligations under this Lease.


(b)   Rights to Cure.  Tenant shall give to any trust deed or mortgage holder ("Holder"), by a method provided for in Paragraph 34 above, at the same time as it is given to Landlord, a copy of any notice of default given to Landlord, provided that, prior to such notice, Tenant has been notified  in writing  (by  way  of notice  of assignment  of rents  and  leases, or otherwise)  of the address of such Holder.   Tenant  further agrees that, if Landlord  shall have failed to cure such default  within  the  time  provided  for  in this  Lease,  then  the  Holder  shall  have  an  additional reasonable period within which to cure such default, or if such default cannot be cured without Holder pursuing its remedies against Landlord, then such additional time as may be necessary to commence   and  complete   a  foreclosure   proceeding,   provided   that  Holder  commences   and thereafter  diligently  pursues  the  remedies  necessary  to  cure  such  default  (including,  but  not limited to, commencement  of foreclosure proceedings, if necessary to effect such cure), in which event this Lease shall not be terminated.


44.   ENTIRE AGREEMENT


This Lease, including the Exhibits and any Addenda attached hereto, which are hereby incorporated herein by this reference, contains the entire agreement of the parties hereto, and no representations,  inducements, promises or agreements, oral or otherwise, between the parties, not embodied herein or therein, shall be of any force and effect.  If there is more than one Tenant, the obligations hereunder imposed shall be joint and several.


45.   INTEREST


Any installment of Rent and any other sum due from Tenant under this Lease which is not received by Landlord  within three (3) days from when the same is due shall bear interest from
			
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the date such payment was originally due under this Lease until paid at the lesser of (a) an annual rate equal  to the maximum  rate of interest  permitted  by law, or (b) twelve  percent (12%)  per annum.   Payment of such interest shall not excuse or cure any Default by Tenant.   In addition, Tenant  shall pay all costs and reasonable attorneys'  fees incurred by Landlord  in collection  of such amounts.


46.   GOVERNING LAW; CONSTRUCTION


This Lease shall be construed and interpreted in accordance with the laws of state in which the Premises  is located.   The parties acknowledge  and agree that no rule of construction  to the effect that any ambiguities are to be resolved against the drafting party shall be employed  in the interpretation  of  this  Lease,  including  the  Exhibits  and  any  Addenda  attached  hereto.    All captions  in this Lease are for reference  only and shall not be used in the interpretation  of this Lease.  Whenever required by the context of this Lease, the singular shall include the plural, the masculine shall include the feminine, and vice versa.   If any provision of this Lease shall be determined to be illegal or unenforceable, such determination  shall not affect any other provision of this Lease and all such other provisions shall remain in full force and effect.


47.   NAME OF BUILDING


In the event Landlord  chooses  to change the name or address  of the Building and/or  the Project,  Tenant  agrees  that such  change  shall  not affect  in any way its obligations  under  this Lease, and that, except for the name or address change,  all terms and conditions  of this Lease shall remain  in full force and effect.   Tenant agrees  further  that such name or address  change shall not require a formal amendment to this Lease, but shall be effective upon Tenant's  receipt of written notification from Landlord of said change.


48.   JURY TRIAL WAIVER


To the extent now or hereafter permitted by law, Tenant hereby waives any right to trial by jury with respect to any action or proceeding (i) brought by Landlord, Tenant or any other party, relating to (A) this Lease and/or any understandings  or prior dealings between the parties hereto, or (B) the Premises, the Building or the Project or any part thereof, or (ii) to which Landlord is a party.   Tenant hereby  agrees that this Lease constitutes  a written consent to waiver of trial  by jury pursuant  to the provisions  of California  Code of Civil Procedure  Section 631, and Tenant does   hereby   constitute   and  appoint   Landlord   its  true  and  lawful  attorney-in-fact,   which appointment   is  coupled  with  an  interest,  and  Tenant  does  hereby  authorize  and  empower Landlord, in the name, place and stead of Tenant, to file this Lease with the clerk or judge of any court of competent jurisdiction  as a statutory written consent to waiver of trial by jury.


49.   RECORDATION


Neither  this Lease,  nor any  memorandum,  affidavit  or other  writing with respect thereto, shall be recorded by Tenant or by any one acting through,  under or on behalf of Tenant, and the recording thereof in violation of this provision shall make this Lease null and void at Landlord's election.
			
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50.   FORCE  MAJEURE


Any prevention, delay or stoppage due to fire or other casualty, strikes, lockouts, or other labor  disturbances,   shortage  of  equipment   or  materials,  governmental   requirements,   power shortages or outages, acts or omissions  of the other party to this Lease, or other causes beyond the reasonable  control  of Landlord  or Tenant  as the case may  be, except  with respect  to the obligations  imposed with regard to Rent and other charges to be paid by Tenant pursuant to this Lease (collectively,  a "Force Majeure"), shall excuse the performance of such party for a period equal  to any  such  prevention,  delay or stoppage  and, therefore,  if this Lease  specifies  a time period for performance of an obligation of either party, that time period shall be extended by the period of any delay in such party's performance as caused by a Force Majeure.


51.  ACCEPTANCE


This Lease shall only become effective and binding upon full execution hereof by Landlord and delivery of a signed copy to Tenant and Landlord's receipt of any Security Deposit and the Prepaid Base Rent.


52.   COUNTERPART/SIGNATURES


This Lease Agreement may be executed in one (1) or more counterparts, each of which shall be deemed  an original,  but all of which together  shall constitute  one and the same instrument. Any  signature  on  this  Lease  Agreement  or  an  amendment  to  this  Lease  Agreement  sent  by electronic  means shall be valid and binding.   A party sending a signature  by electronic  means
shall pr.omptly.send an executed original counterpart  of the document  to the other party by  mail or couner  service.


53.   BIKE STORAGE


Tenant  may install and maintain  a bike storage  facility  on the Premises  (collectively,  the "Bike Storage  Facility"), at a location reasonably approved  by Landlord on the Premises subject to the following conditions:   (i) Tenant shall provide, install and maintain the Bike Storage Facility at its sole cost  and expense;  (ii) Tenant  shall  submit  to Landlord  for  its review  and approval (which approval shall not be unreasonably withheld, conditioned or delayed) detailed plans and specifications  for the Bike Storage Facility and shall install the Bike Storage Facility pursuant to the plans and specifications approved by Landlord, in a good and workmanlike manner and in accordance with the reasonable direction of Landlord relative thereto; (iii) Tenant shall obtain all the necessary  permits and approvals which may be required from all lawful authorities  to erect and  install  the  Bike  Storage  Facility.    Tenant  may  continue  to  keep  and  maintain  the  Bike Storage  Facility  throughout  the  Term  of this  Lease  and  any  renewals  or  extension  thereof. Landlord shall cooperate  with Tenant, at Tenant's sole cost and expense, to secure any permits which may be required for the Bike Storage Facility.


54.   PETS


Subject  to the  provisions  of  this  Paragraph 54,  Tenant  shall  be permitted  to  bring  non aggressive, fully vaccinated  domesticated  dogs that are kept by Tenant's employees as pets, into the Premises.  This right is subject to the following:
			
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(a)   All dogs are to be kept under control at all times.  While outside the Building, all dogs are to be kept on leads.  No dogs are to be left unaccompanied  while outside of the Building.  No dogs may be kept at the Premises overnight.


(b)   Upon request by Landlord,  copies of current vaccination  records for all dogs shall be provided to Landlord.


(c)   Tenant shall be responsible for any cleaning costs or other costs, repairs and regular maintenance  and restoration which may arise from the dogs'  presence in the Premises, including performing regular pest control services.
(d)   Tenant shall be liable for any and all acts which any dog may undertake (e.g., biting). (e)   Tenant  shall  be responsible  for immediately  removing  any dog waste and excrement
from the Premises.


(f)    In no case shall the total number of dogs in the Premises exceed 1 (one) dog per 10,000 square feet.


(g)   Any damage, wear and tear or corrective  action arising from dogs in the Building shall be deemed  to  be in excess  of  normal  wear  and  tear  and  shall  be corrected  by Tenant  at  its expense  at  the  expiration  or  termination  of  this  Lease,  including  if reasonably  required,  the fumigation  or other treatment to eliminate fleas and other pests from the Building.


55.   RENEWAL OPTION (WITH FMV RENT)


(a)   Exercise of Options.  Provided Tenant is in occupancy of at least two full floors of the Building and is not in default (beyond applicable notice and grace periods) pursuant to any of the terms and conditions  of this Lease, at the date of both the Expiration Date and the effective date of the Option (as defined below), Tenant shall have the option (the "Option") to renew this Lease for  an  additional  sixty  (60)  month  period  (the  "Extension Term")  commencing  on  the  date following the Expiration Date upon the terms and conditions contained in this Paragraph 55.  To exercise  the  Option,  Tenant  shall  give  Landlord  notice  (the  "Extension  Notice")  of  intent  to exercise said Option not less than nine (9) months and not more than fifteen (15) months prior to the date on which the Extension  Term which  is the subject of the notice will commence.   The notice  shall  be given  as  provided  in Paragraph 34 hereof.    In the event  Tenant  exercises  the Option, this Lease will terminate in its entirety at the end of the Extension Term and Tenant will have no further option to renew or extend the Term of this Lease.


(b)   Procedures for Determining Prevailing Market Rate.


(i)      If Tenant timely  exercises  the Option,  Landlord  shall deliver  to Tenant a good faith written proposal of the "Prevailing Market Rate" (as hereinafter  defined) for the Premises for the Extension  Term.   Within  thirty (30)  days  after  receipt of  Landlord's proposal,  Tenant shall  notify  Landlord  in  writing  that  (A) Tenant  accepts  Landlord's proposal  or  (B) Tenant rejects  Landlord's proposal.    If Tenant  does  not give Landlord  a timely  notice  in response  to Landlord's proposal, Landlord's proposal  of the Prevailing  Market Rate for the Extension Term shall be deemed accepted by Tenant.
			
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(ii)   If Tenant timely rejects Landlord's proposal, Landlord and Tenant shall first negotiate in good faith in an attempt to agree upon the Prevailing Market Rate for the Extension Term.   If Landlord and Tenant are able to agree within thirty (30) days following Landlord's receipt  of  Tenant's   notice  rejecting  Landlord's   proposal  (the  "Negotiation  Period"),   such agreement shall constitute a determination of Prevailing Market Rate for purposes of this Paragraph.  If Landlord and Tenant are unable to agree upon the Prevailing Market Rate during the Negotiation Period, then within thirty (30) days after expiration of the Negotiation Period, the parties shall meet and concurrently deliver to each other their respective written estimates of the Prevailing Market Rate for the Extension Term, supported by the reasons therefor (respectively, "Landlord's  Determination" and "Tenant's  Determination").    Landlord's  Determination may be more or less than its initial proposal of Prevailing Market Rate.  If either party fails to deliver its Determination in a timely manner, then the Prevailing Market Rate shall be the amount specified by the other party.   If the higher of such Determinations is not more than one hundred five percent (105%) of the lower of such Determinations, then the Prevailing Market Rate shall be the average of the two Determinations. lfthe Prevailing Market Rate is not resolved by exchange of the Determinations, the Prevailing Market Rate shall be determined as follows, each party being bound to its Determination and such Determinations constituting the only two choices available to the Appraisal Panel (as hereinafter defined).


(iii)   Within thirty (30)  days  after  the  parties  exchange  Landlord's  and  Tenant's Determinations, the parties shall each appoint a neutral and impartial appraiser who shall be certified  as  an  MAl  or  ASA  appraiser  and  shall  have at  least  ten (10)  years'  experience, immediately prior to his or her appointment, as a real estate appraiser of office properties in the City of San Francisco, including significant experience appraising Comparable Buildings.  For purposes hereof, an "MAl" appraiser means an individual who holds an MAl designation conferred by, and is an independent member of, the American Institute of Real Estate Appraisers (or its successor organization, or, if there is no successor organization, the organization and designation most similar), and an "ASA" appraiser means an individual who holds the Senior Member designation conferred by, and is an independent member of, the American Society of Appraisers  (or  its  successor  organization,  or,  if  there  is  no  successor  organization,  the organization and designation most similar).  If either Landlord or Tenant fails to appoint an appraiser within said thirty (30) day period, the Prevailing Market Rate for the Extension Term shall be the Determination of the other party who timely appointed an appraiser.


Landlord's and Tenant's appraisers shall work together in good faith to appoint a neutral or impartial third party appraiser within ten (10) business days, and notify both Landlord and Tenant of such selection.  The three appraisers shall then work together in good faith to decide which  of  the  two  Determinations more closely  reflects the  Prevailing  Market Rate  of  the Premises for the Extension Term.    The Determination selected by such appraisers shall be binding upon Landlord and Tenant.  If all three appraisers cannot agree upon which of the two Determinations more closely reflects the Prevailing Market Rate within thirty (30) days, the decision of a majority of the appraisers shall prevail.


(iv)   Within five (5) days following notification of the identity of the third appraiser, Landlord and Tenant shall submit copies of Landlord's  Determination and Tenant's Determination to the third appraiser.  The three appraisers are referred to herein as the "Appraisal Panel."   The Appraisal Panel, if it so elects, may conduct a hearing, at which Landlord and
			
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Tenant  may each make supplemental  oral and/or written presentations,  with an opportunity  for rebuttal  by the other party and for questioning  by the members of the Appraisal  Panel.   Within thirty (30)  days  following  the  appointment   of  the  third  appraiser,  the  Appraisal  Panel,  by majority vote, shall select either Landlord's Determination or Tenant's Determination as the Prevailing  Market  Rate  of  the  Premises  for  the  Extension  Term,  and  shall  have  no  right  to propose a middle ground or to modify either of the two proposals or the provisions of this Lease. The  decision  of the Appraisal  Panel  shall  be final  and  binding  upon  the  parties, and may be enforced  in accordance with the provisions of California law.  In the event of the failure, refusal or inability  of any member of the Appraisal  Panel to act, a successor  shall be appointed  in the manner that applied to the selection of the member being replaced.


(v)    Each party shall  pay the fees and expenses  of the appraiser  appointed  by such party, and one-half of the fees and expenses  of the third appraiser  and the expenses incident to the proceedings  of the Appraisal  Panel (excluding  attorneys'  fees and similar  expenses  of the parties which shall be borne separately  by each of the parties).


(c)   Prevailing Market Rate.   As used in this Lease, the phrase "Prevailing  Market  Rate" means the amount that a landlord under no compulsion to lease the Premises, and a tenant under no compulsion  to lease the Premises,  would  agree upon at arm's  length as Base Rent for the Premises  for  the  Extension  Term,  as  of  the  commencement  of  the  Extension  Term.    The Prevailing Market Rate shall be based upon non-sublease, non-encumbered, non-equity lease transactions   recently  entered   into  for  space  in  the  Building  and  in  Comparable  Buildings ("Comparison  Leases")  and   may   include   periodic   increases.      Rental   rates  payable   under Comparison  Leases  shall  be  adjusted  to  account  for  variations  between  this  Lease  and  the Comparison  Leases with respect to:  (i) the length of the Extension  Term compared to the lease term of the Comparison  Leases;  (ii) rental  structure,  including  additional  rent, and taking  into consideration  any "base year"; (iii) the size of the Premises compared  to the size of the premises under  the Comparison  Leases;  (iv) utility,  location,  floor  levels,  views  and efficiencies  of the floor(s) of the Premises compared to the premises under the Comparison  Leases; (v) the age and quality  of  construction  of the  Building;  (vi) the  value  of  existing  leasehold  improvements  to Tenant;  and (vii) the financial  condition  and credit  history of Tenant  compared  to the tenants under  the Comparison  Leases.     In determining  the Prevailing  Market  Rate,  no consideration shall  be given  to (i) any  rental  abatement  period  granted  to tenants  in Comparison  Leases  in connection  with the design  and construction  of tenant  improvements,  (ii) whether Landlord  or the  landlords   under  Comparison   Leases  are  paying  real  estate   brokerage  commissions   in connection with Tenant's exercise of the Extension Option or in connection with the Comparison Leases,  and  (iii) moving   allowances   paid.     For  purposes   of  this  Paragraph,   "Comparable Buildings" mean those buildings located in the vicinity ofthe Building.


In no event shall the Prevailing  Market Rent  be less than ninety  percent (90%) the Base Rent paid  by  Tenant  during  the  twelve  months  of  the  Lease  Term  immediately   preceding  the Extension Term.


(d)   Option is Personal.  The rights contained  in this Paragraph  55 shall be personal to the Tenant and shall not be transferable  to any assignee, sub-lessee or other transferee (other than a Tenant Affiliate) of Tenant's interest in this Lease and may only be exercised by the Tenant or a
			
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Tenant  Affiliate  if the Tenant  or a Tenant  Affiliate  occupies  at least two (2) full floors  of the Building at the Expiration Date and at the commencement  of the Extension Term.


[Remainder of Page Intentionally Blank]
			
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IN WITNESS WHEREOF, Landlord  and Tenant  have  executed and delivered  this Lease  as of the Lease Date specified  in the Basic Lease Information.
						
	LANDLORD:	CIVITAS EQUITY FUND I, LLC,
a California limited liability company



		By: /s/ Douglas Dahlin

		Name: Douglas Dahlin
Title: Manager


	TENANT:	Cloudflare, Inc.
a Delaware corporation



		By: /s/ Matthew Prince
		Name: Matthew Prince
Title: CEO, Cloudflare, Inc.















			
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EXHIBIT A


DIAGRAM OF THE PREMISES





















			
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	A-1










EXHIBIT B 
TENANT WORK LETTER


REMOVED.


INTRODUCTION 
SECTIONS 1 & 2
PAGES B-1 TO B-3


REMOVED.






3.     CONSTRUCTION DRAWINGS


3.1    Selection of Architect/Construction Drawings. Tenant shall retain an architect/space planner approved by Landlord, which approval shall not be unreasonably withheld or delayed (the  "Architect")  to  prepare  the  "Construction  Drawings,"  as  that  term  is  defined  in  this Section 3.1.    Tenant  shall  retain  the  engineering  consultants  approved  by  Landlord  (the "Engineers"), which approval shall not be unreasonably withheld or delayed, to prepare all plans and engineering working drawings relating to the structural, mechanical, electrical, plumbing, HVAC, lifesafety, and sprinkler work in the Premises, which work is not part of the Base Building. The plans and drawings to be prepared by Architect and the Engineers hereunder shall be known collectively as the "Construction Drawings."  All Construction Drawings shall comply at a minimum with Landlord's  Specifications and shall be in a drawing format reasonably acceptable to Landlord, however, as provided in Section 3.3 below, in order to expedite plans and construction, Tenant may submit for Landlord's review the Engineered Drawings separately from the Architectural Drawings.   Landlord's review of the Construction Drawings as set forth
			
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	B-4














in this Section 3, shall be for its sole purpose and shall not imply Landlord's review of the same, or obligate Landlord to review the same, for quality, design, Code compliance or other like matters.    Accordingly,  notwithstanding  that  any  Construction  Drawings  are  reviewed  by Landlord or its space planner, architect, engineers and consultants, and notwithstanding any advice or assistance which may be rendered to Tenant by Landlord or Landlord's space planner, architect, engineers, and consultants, Landlord shall have no liability whatsoever in connection therewith, except to the extent that Landlord has specifically requested a modification to the Construction Drawings as a condition to Landlord's approval of the Construction Drawings, and shall not be responsible for any omissions or errors contained in the Construction Drawings, and Tenant's waiver and indemnity set forth in this Lease shall specifically apply to the Construction Drawings.  Furthermore, Tenant and Architect shall verify, in the field, the dimensions and conditions as shown on the relevant portions of the base building drawings, and Tenant and Architect shall be solely responsible for the same, and Landlord shall have no responsibility in connection therewith.  Each time Landlord is granted the right to review, consent or approve the Construction Drawings or any component thereof (collectively, "Consent"), such Consent shall not be unreasonably withheld, conditioned or delayed.


3.2    Final Space Plan. Tenant and the Architect shall prepare the final space plan for the Tenant Improvements (the "Final Space Plan"), and shall deliver the Final Space Plan to Landlord for Landlord's approval.   The Final Space Plan shall show all corridors, internal and external offices and partitions, and exiting.  Landlord shall, within five (5) business days after Landlord's receipt of the Final Space Plan (i) approve the Final Space Plan, (ii) approve the Final Space Plan subject to specified conditions to be complied with when the Final Working Drawings are submitted by Tenant to Landlord, or (iii) disapprove the Final Space Plan and return the same to Tenant with requested revisions.  Any failure by Landlord to respond to Tenant's request for approval shall be deemed a disapproval.  If Landlord disapproves the Final Space Plan, Tenant may resubmit the Final Space Plan to Landlord at any time, and Landlord shall approve or disapprove  of  the  resubmitted  Final  Space  Plan,  based  upon  the  criteria  set forth  in  this Section 3.2, within five (5) business days after Landlord receives such resubmitted Final Space Plan. Such procedures shall be repeated until the Final Space Plan is approved. The Final Space Plan may be provided by Tenant to Landlord in one or more stages and at one or more times and the time periods set forth herein shall apply to each portion submitted


3.3    Completion ofConstructionDrawings. Once Landlord has approved the Final Space Plan, Tenant, the Architect and the Engineers shall complete the Construction Drawings for the Premises in a form which is sufficient to allow contractors to bid on the work and to obtain applicable permits and shall submit such Construction Drawings to Landlord for Landlord's approval.  Such Construction Drawings may be submitted in one or more stages at one or more times, provided that Tenant shall ultimately supply Landlord with four (4) completed copies signed by Tenant of such Construction Drawings.  Landlord shall, within ten (10) business days after  Landlord's  receipt  of  each  stage of  the  Construction  Drawings, either (i) approve  the Construction Drawings, (ii) approve the Construction Drawings subject to specified conditions which must be stated in a reasonably clear and complete manner to be satisfied by Tenant prior to submitting the Approved Construction Drawings for permits as set forth in Section 3.4 below of this Tenant Work Letter, or (iii) disapprove and return the Construction Drawings to Tenant with requested revisions.  Any failure by Landlord to respond to Tenant's request for approval shall be deemed a disapproval.  If Landlord disapproves the Construction Drawings, Tenant may
			
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resubmit the Construction Drawings to Landlord at any time, and Landlord shall approve or disapprove  the  resubmitted  Construction  Drawings,  based  upon  the  criteria  set  forth  in  this Section 3.3, within five (5) business days after Landlord receives such resubmitted Construction Drawings.  Such procedure shall be repeated until the Construction Drawings are approved.


3.4   Approved Construction Drawings.   The  Construction  Drawings  for the  Tenant Improvements shall be approved by Landlord (the "Approved Construction Drawings") prior to the commencement  of construction  of  the Tenant  Improvements.    In the  event  that Tenant  shall submit the Construction Drawings to Landlord in more than one stage, Landlord shall be entitled to approve  a stage and to subsequently  disapprove  of such  stage, provided  that a problem  is found to exist which is evident only following Landlord's review of subsequent drawings.  Upon receipt of Landlord's  approval, Tenant shall submit the Approved Construction Drawings to the appropriate  municipal authorities for all applicable  building permits required in connection with the  construction   of  the  Tenant  Improvements  ("Permits").    Tenant  shall  be  responsible  for obtaining all such Permits; provided, however, Tenant shall coordinate with Landlord in order to allow Landlord, at its option, to take part in all phases  of the permitting process.   Tenant  shall supply  Landlord,  as  soon  as  possible,  with  all  plan  check  numbers  and  dates  of  submittal. Tenant  hereby agrees that neither Landlord  nor Landlord's consultants  shall be responsible  for obtaining  any Permits or certificate  of occupancy  for the Premises and that obtaining the same shall be Tenant's responsibility; provided, however, that Landlord shall cooperate with Tenant in performing  ministerial acts reasonably necessary to enable Tenant to obtain any such Permits or certificate of occupancy.   No material changes, modifications or alterations in the Approved Construction  Drawings may be made without the prior written consent of Landlord pursuant to the terms of Section 3.5 below.  Tenant shall pursue its Permits with all due diligence.


3.5    Change Orders.  In the event Tenant  desires  to change the Approved  Construction Drawings,  Tenant  shall deliver  notice (the "Drawing Change  Notice")  of the same to Landlord, setting forth in detail the changes (the "Tenant Change") Tenant desires to make to the Approved Construction  Drawings.   Landlord  shall, within four (4) business  days of receipt of a Drawing Change Notice either (i) approve the Tenant Change,  or (ii) disapprove the Tenant Change and deliver a notice to Tenant specifying in reasonably sufficient detail the reasons for Landlord's disapproval.    Any  failure  by  Landlord  to  respond  to  Tenant's request  for  approval  shall  be deemed a disapproval.   Any additional costs which arise in connection with such Tenant Change shall  be  paid  by  Tenant;  provided,   however,  that  to  the  extent  the  Tenant  Improvement Allowance has not been depleted, such payment shall be made out of the Tenant Improvement Allowance.


4.     CONSTRUCTION OF THE TENANT IMPROVEMENTS


4.1    Tenant's Selection of Contractors.


(a)   The   Contractor.       Tenant   shall   retain   a   licensed   general   contractor   (the "Contractor") pre-approved  by Landlord, which approval shall not be unreasonably withheld or delayed, prior to Tenant causing the Contractor to construct the Tenant Improvements.


(b)   Tenant's Contractors.   The Contractor,  Contractor's subcontractors, and all major trade subcontractors  and suppliers used by Tenant (such major trade subcontractors and material
			
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suppliers along with all other laborers, materialmen, and suppliers, and the Contractor to be known collectively as "Tenant's Agents") must be approved in writing by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed, provided that, subject to the terms hereof, Tenant shall cause Landlord's  designated structural, mechanical and life safety subcontractors to be retained in connection with the Tenant Improvements. If Landlord does not approve any of Tenant's  proposed subcontractors, laborers, materialmen or suppliers, Tenant shall submit other proposed subcontractors, laborers, materialmen or suppliers for Landlord's written approval.   The Contractor and the Contractor's  subcontractors (collectively, "Tenant's Contractors") and their respective workers shall conduct their activities in and around the Premises, the Building and the Project in a harmonious relationship with all other subcontractors, laborers, materialmen and supplies at the Premises, the Building and the Project.


4.2     Construction of Tenant Improvements by Tenant's Contractors.


(a)   Construction  Contract;  Cost  Budget.     Prior  to  Tenant's   execution  of  the construction  contract and  general  conditions  with  Contractor (the "Contract"), Tenant shall submit the Contract to Landlord for its approval, which approval shall not be unreasonably withheld  or  delayed.     Prior  to  the  commencement  of  the  construction  of  the  Tenant Improvements, and after Tenant has accepted all bids for the Tenant Improvements, Tenant shall provide Landlord with a detailed breakdown, by trade, of the final costs to be incurred or which have been incurred, as set forth more particularly in Sections 2.2(a)(i) through 2.2(a)(vii) above, in connection with the design and construction of the Tenant Improvements to be performed by or at the direction of Tenant or the Contractor, which costs form a basis for the amount of the Contract (the "Final Costs").    Prior to the commencement of construction of the Tenant Improvements, Tenant shall supply Landlord with cash in an amount (the "Over-Allowance Amount")  equal to the difference between the amount of the Final Costs and the amount of the Tenant Improvement Allowance (less any portion thereof already disbursed by Landlord, or in the process of being disbursed by Landlord, on or before the commencement of construction of the Tenant Improvements).  The Over-Allowance Amount shall be disbursed by Landlord prior to the disbursement of any of the then remaining portion of the Tenant Improvement Allowance, and such disbursement shall be pursuant to the same procedure as the Tenant Improvement Allowance.  In the event that, after the Final Costs have been delivered by Tenant to Landlord, the costs relating to the design and construction of the Tenant Improvements shall change, any additional costs necessary to such design and construction in excess of the Final Costs, shall be paid by Tenant to Landlord immediately as an addition to the Over-Allowance Amount or at Landlord's option, Tenant shall make payments for such additional costs out of its own funds, but Tenant shall continue to provide Landlord with the documents described in clauses (A), (B), (C) and (D) of Section 2.2(b)(i) above of this Tenant Work Letter, for Landlord's approval, prior to Tenant paying such costs.


(b)   Tenant's Agents.


(i)  Landlord's  General  Conditions  for  Tenant's  Agents  and  Tenant Improvement Work.  Tenant's and Tenant's  Agents' construction of the Tenant Improvements shall comply with the following:  (A) the Tenant Improvements shall be constructed in material conformance with the Approved Construction Drawings; (B) Tenant and Tenant's Agents shall use  commercially  reasonable  efforts  not  to  interfere  with,  obstruct,  or  delay, the  work  of
			
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Landlord's Base Building contractor and subcontractors with respect to the Base Building or any other work at the Project; (C) Tenant's Contractors shall submit schedules of all work relating to the Tenant  Improvements to Landlord and  Landlord shall, within five (5)  business days of receipt thereof, inform Tenant and Tenant's  Contractors of any changes which are reasonably necessary thereto in order to avoid interference with Landlord's work and Tenant's Contractors shall adhere to such corrected schedule; and (D) Tenant shall abide by all construction guidelines and reasonable rules made by Landlord's Building manager with respect to any matter, within reason,  in  connection  with  this  Tenant  Work  Letter,  including,  without  limitation,  the construction of the Tenant Improvements.


(ii)  Indemnity.   Tenant's indemnity of Landlord as set forth, qualified and conditioned in this Lease shall also apply with respect to any and all costs, losses, damages, injuries and liabilities related in any way to any act or omission of Tenant or Tenant's Agents, or anyone directly or indirectly employed by any of them, or in connection with Tenant's  non payment of any amount arising out of the Tenant Improvements and/or Tenant's disapproval of all or any portion of any request for payment.  The waivers of subrogation set forth in this Lease pertaining to property damage shall be fully applicable to damage to property arising as a result of any work performed pursuant to the terms of this Tenant Work Letter and Tenant shall be excused from its indemnification obligation to the extent Landlord's damage is covered by insurance required to be carried by Landlord under the Lease and as to which the waiver of subrogation is applicable.


(iii)  Requirements of Tenant's  Agents.   Tenant's Contractor shall guarantee to Tenant and for the benefit of Landlord that the portion of the Tenant Improvements for which it is responsible shall be free from any defects in workmanship and materials for a period of not less  than  one (1)  year from  the  date  of  completion  thereof.    Tenant's  Contractor shall  be responsible  for  the  replacement or  repair,  without  additional  charge,  of  all  work  done  or furnished in accordance with its contract that shall become defective within one (1) year after the Commencement Date.  All such warranties or guarantees as to materials or workmanship of or with respect to the Tenant Improvements shall be contained in the Contract or subcontract and shall  be written such that  such  guarantees or  warranties shall inure to the  benefit of  both Landlord and Tenant, as their respective interests may appear, and can be directly enforced by either.  Tenant covenants to give to Landlord any assignment or other assurances which may be necessary to effect such right of direct enforcement.


(iv)  Insurance Requirements.


(A) General Coverages.   All of Tenant's Agents shall carry worker's compensation insurance covering all of their respective employees, and shall also carry public liability insurance, including property damage, all with limits, in form and with companies as are required to be carried by Tenant as set forth in this Lease (provided that the limits of liability to be carried by Tenant's Agents and Contractor, shall be in an amount which is customary for such respective Tenant's Agents employed by tenants constructing improvements in the Comparable Buildings), and the policies therefor shall insure Landlord and Tenant, as their interests may appear, as well as the Contractor and subcontractors.
			
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(B)  Special  Coverages.     Contractor  shall  carry  "Builder's   All  Risk" insurance, in an  amount  approved  by  Landlord  but not  more  than  the amount of  the Contract, covering the construction of the Tenant Improvements, and such other insurance as Landlord may reasonably require, it being understood and agreed that the Tenant Improvements shall be insured by Tenant pursuant to this Lease immediately upon completion thereof.   Such insurance shall be in amounts and shall include such extended coverage endorsements as may be reasonably required by Landlord (to the extent they are generally required by landlords of Comparable Buildings) and shall be in a form and with companies as are required to be carried by Tenant pursuant to the terms of this Lease.


(C)  General Terms.   Certificates for all insurance carried pursuant to this Section 4.2(b)(iv) shall be delivered to Landlord before the commencement of construction of the Tenant Improvements and  before the Contractor's  equipment  is moved onto the Project.  All such policies of insurance must contain a provision that the company writing said policy will give Landlord thirty (30) days' prior notice of any cancellation or lapse of the effective date or any reduction in the amounts of such insurance.  In the event that the Tenant Improvements are damaged by any cause during the course of the construction thereof and this Lease  is  not terminated,  Tenant  shall  immediately  repair the  same at Tenant's  sole cost  and  expense.    Tenant's  Agents shall  maintain  all  of the foregoing insurance coverage in force until the completion of the Tenant Improvements.  All such insurance relating to property, except Workers' Compensation, maintained by Tenant's Agents shall preclude subrogation claims by the insurer against anyone insured thereunder. Such insurance shall provide that it is primary insurance as respects the owner and that any other insurance maintained by Landlord is excess and noncontributing with the insurance required hereunder.  The requirements for the foregoing insurance shall not derogate from the provisions for indemnification of Landlord by Tenant under Section 4.2(b)(ii) of this Tenant Work Letter and Tenant's right with respect to the waiver of subrogation.


(c)   Governmental  Compliance.    The  Tenant  Improvements  shall  comply  in  all respects with the following:   (i) all Laws; (ii) applicable standards of the American Insurance Association (formerly, the National Board of Fire Underwriters) and the National Electrical Code; (iii) the applicable standards of the then current International Building Code; (iv) building material manufacturer's specifications; and (v) Landlord's "green building" requirements and/or its "savings by design" criteria as the same relate to interior lighting (collectively, the "Code").


(d)  Inspection by Landlord.   Landlord shall have the right to inspect the Tenant Improvements at all reasonable times; provided, however, that Landlord's failure to inspect the Tenant Improvements shall in no event constitute a waiver of any of Landlord's rights hereunder nor shall Landlord's inspection of the Tenant Improvements constitute Landlord's approval of the same. In the event that Landlord should disapprove any portion of the Tenant Improvements during an inspection, Landlord shall notify Tenant in writing within a reasonable time of such inspection of such disapproval and shall specify in reasonably sufficient detail the items disapproved.   Any defects or deviations in, and/or disapprovals in accordance herewith by Landlord of, the Tenant Improvements shall be rectified by Tenant at Tenant's expense and at no additional expense to Landlord; provided, however, that in the event Landlord determines that a defect or deviation exists or reasonably disapproves of any matter in connection with any portion of the Tenant Improvements, Landlord may, following notice to Tenant and a reasonable period


			
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of time for Tenant to cure, take such action as Landlord deems necessary to correct the same, at Tenant's expense, and at no additional expense to Landlord, and without incurring any liability on Landlord's part.


(e)   Meetings.   Commencing  upon the execution of this Lease, Tenant shall hold periodic meetings at a reasonable time, with the Architect and the Contractor regarding the progress of the preparation of Construction Drawings and the construction of the Tenant Improvements, which meetings shall be held at a location reasonably designated by Landlord, and Landlord and/or its agents shall receive prior notice of, and shall have the right to attend, all such meetings, and, upon Landlord's request, certain of Tenant's Agents shall attend such meetings. In addition, minutes shall be taken at all such meetings, a copy of which minutes shall be promptly delivered to Landlord.   One such meeting each month shall include the review of Contractor's current request for payment.


(f)    Timing.  Tenant shall use its best, good faith, efforts and all due diligence to (i) cooperate with the Landlord to complete all phases of the space planning process, preparation of the Approved Construction Documents, estimating and bidding, and the permitting process in order to receive the Permits and be prepared to start Tenant Improvements upon the Commencement Date; (ii) coordinate Tenant's  pre-commencement construction schedule with Landlord's Base Building Work construction schedule; and (iii) proceed with its work expeditiously, continuously and efficiently, and shall use its diligent efforts to complete the same within One Hundred and Twenty (120) days after the Commencement Date.


4.3    Notice of Completion; Copy of Record Set of Plans.   Within ten (10) days after completion of construction of the Tenant Improvements, Tenant shall prepare a Notice of Completion, which Landlord  shall execute  if factually correct, and  Tenant shall cause such Notice of Completion to be recorded in the office of the Recorder of the City and County of San Francisco in accordance with Section 8182 of the Civil Code of the State of California or any successor statute, and shall furnish a copy thereof to Landlord upon such recordation.  If Tenant fails to do so, Landlord may execute and file the same on behalf of Tenant as Tenant's agent for such purpose, at Tenant's  sole cost and expense.  At the conclusion of construction, (i) Tenant shall cause the Architect and Contractor (A) to update the Approved Construction Drawings as necessary to  reflect all  changes made to the Approved Construction Drawings during the course of construction, (B) to certify to the best of their knowledge that the updated drawings are true and correct, which certification shall survive the expiration or termination of this  Lease,  and  (C) to  deliver  to  Landlord  two (2)  CO-ROMs  of  such  updated Approved Construction  Drawings,  in  CADD  format,  within  thirty (30)  days  following  issuance of  a certificate of occupancy for the Premises, and (ii) Tenant shall deliver to Landlord a copy of all warranties, guaranties, and operating manuals and information relating to the improvements, equipment, and systems in the Premises.


5.    MISCELLANEOUS


5.1    Tenant's  Representative.  Tenant shall designate in writing its representative with respect to the matters set forth in this Tenant Work Letter, who shall have full authority and responsibility to act on behalf of the Tenant as required in this Tenant Work Letter.


			
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5.2    Landlord's  Representative.    Landlord   has   designated   Doug   Dahlin   and   Karl Danielson as its representatives  with respect to the matters set forth in this Tenant Work Letter, who, until further notice to Tenant, shall have full authority and responsibility  to act on behalf of the Landlord as required in this Tenant Work Letter.


5.3    Time of the Essence in This Tenant Work Letter.  Unless otherwise  indicated,  all references  herein to a "number  of days"  shall  mean and  refer  to calendar  days.    If any  item requiring  approval  is  timely  disapproved   by  Landlord,  the  procedure  for  preparation  of  the document and approval thereof shall be repeated until the document is approved by Landlord.


5.4    Tenant's Lease Default. Notwithstanding  any terms to the contrary contained in this Lease,  if Tenant  is in default  of  this  Lease  (including,  without  limitation,  this Tenant  Work Letter) at any time on or before the completion of the Tenant Improvements,  then (i) in addition to all other rights and remedies granted to Landlord  pursuant  to the Lease, Landlord shall have the right to withhold payment of all or any portion of the Tenant Improvement Allowance and/or Landlord may cause Contractor  to cease the construction  of the Tenant Improvements (in which case, Tenant shall  be responsible  for any delay in the completion  of the Tenant Improvements caused by such work stoppage), and (ii) all other obligations of Landlord under the terms of this Tenant Work Letter shall be suspended  until such time as such default is cured pursuant to the terms of the Lease (in which case, Tenant shall be responsible for any delay in the completion of the Tenant Improvements  caused by such inaction by Landlord).   Notwithstanding  the forgoing, if a default  by Tenant  is cured,  forgiven  or waived, Landlord's suspended  obligations shall  be fully reinstated and resumed, effective immediately.


5.5     No Miscellaneous Charge. During the Tenant Improvement  construction period and move-in, Landlord shall provide commercially  reasonable use of freight elevators and/or loading docks  during  the  Business  Hours  and  commercially  reasonable  use  of  water,  electricity  and restrooms to the extent utilized in connection with the construction  of the Tenant Improvements, subject to such policies and procedures as Landlord shall prescribe.
			
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EXHIBIT B-1


BASE BUILDING STANDARDS


The Building shall be delivered by Landlord to Tenant in "warm shell" with improvements and materials as follows (collectively, the "Base Building Work"):


Description of Original  Building:


1.     The Building is a reinforced concrete structure with window bays on three sides, and attached at a common concrete wall on the southwest side.  It is three (3) stories above ground and a single story Lower Level.  The Townsend Street (northwest) side First Floor is approximately flush with the sidewalk.  The Second Street (northeast) side First Floor is along a sloping sidewalk/street and
is approximately  flush with the sidewalk at Townsend Street and several feet above grade at the east comer and along the southeast side of the Building.


2.     The Building perimeter and the Lot property are the same on three sides (Southwest Common wall; Northwest Townsend Street; Northeast Second Street). Along the Southeast Building perimeter is an area of vacant land approximately  16 feet wide running the length of the Southeast wall.  It is gated.






DESCRIPTION OF PHASE 1 IMPROVEMENT


REMOVED.




IMPROVEMENT 


REMOVED.




SECTIONS OF B-1-1; PAGES B-1-2 & B-1-3


REMOVED.


			
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EXHIBIT C


COMMENCEMENT AND EXPIRATION DATE MEMORANDUM






LANDLORD:     CIVITAS EQUITY FUND I, LLC


TENANT:     CLOUDFLARE, INC.


LEASE DATE:     November 1, 2022


PREMISES:     Located at 101 Townsend Street, San Francisco, California 94107




Tenant hereby accepts the Premises as being in the condition required under the Lease.


The  Commencement  Date  of  the  Lease  is hereby  established  as  November 1,  2022 and  the Expiration Date is October 31, 2027.


						
	TENANT
	CLOUDFLARE, INC. 
a Delaware corporation


									
		By	/s/ Matthew Prince
		Name	Matthew Prince
		Title
	CEO, Cloudflare, Inc.

		By	
		Name	
		Title	




Approved and Agreed: 
						
	LANDLORD
	CIVITAS EQUITY FUND I, LLC, 
a California limited liability company


									
		By	/s/ Douglas Dahlin
		Name	Douglas Dahlin
		Title	Manager


			
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EXHIBIT D


RULES AND REGULATIONS


This Exhibit, entitled "Rules and Regulations," is and shall constitute Exhibit D to the Lease Agreement,  dated as of the Lease Date, by and between Landlord  and Tenant for the Premises. The terms and conditions of this Exhibit D are hereby incorporated  into and are made a part of the Lease.   Capitalized  terms used, but not otherwise  defined,  in this Exhibit D  have the meanings ascribed to such terms in the Lease.


1.     Tenant shall not use any method of heating or air conditioning  other than that supplied by Landlord  without the consent of Landlord.


2.     All window coverings installed by Tenant and visible from the outside of the building require the prior written approval of Landlord.


3.     Tenant shall not use, keep or permit to be used or kept any foul or noxious gas or substance or any flammable or combustiblmaterials on or around the Premises, except to the extent that Tenant is permitted to use the same under the terms of Paragraph 33 of the Lease.
            4.     Tenant shall not alter any lock or install any new locks or bolts on any door at the
Premises without the prior consent of Landlord.


5.     Tenant shall not make any duplicate keys or key cards to the Premises or the Building without the prior consent of Landlord.


6.     Tenant is responsible for the storage and removal of all trash and refuse.  All such trash and refuse shall be contained in suitable receptacles stored behind screened enclosures at locations approved by Landlord.


7.     Tenant shall not permit any animals, including, but not limited to, any household pets (but excluding  service animals, which are permitted), to be brought or kept in or about the Premises, the Building, the Project, except as provided in the Lease.
			
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EXHIBIT E


FORM OF ESTOPPEL CERTIFICATE


CLOUDFLARE, INC., a Delaware  corporation  (herein "Tenant") hereby certifies to̲̲_____ , a_____ and  its successors  and assigns  and any  lender to any such party that  (A) Tenant  leases from   CIVITAS  EQUITY  FUND I, LLC,   a  California   limited   liability   company   ("Landlord") approximately_____square  feet  of  space  (the  "Premises")  in_____pursuant  to  that  certain Lease  Agreement  dated_____,_____by and  between  Landlord  and  Tenant,  as amended  by_____(collectively, the "Lease"),  a true and correct copy of which is attached hereto as Exhibit A, and (B) as of the date hereof:


1.     The Lease is in full force and effect and has not been modified, supplemented or amended, except as set forth in the introductory  Paragraph hereof.


2.      Tenant is in actual occupancy of the Premises under the Lease and Tenant has accepted the same.  Landlord has performed all obligations  under the Lease to be performed by Landlord, including, without limitation, completion of all tenant work required under the Lease and the making of any required payments or contributions  therefor.  Tenant is not entitled to any further payment or credit for tenant work.


3.     The initial term of the lease commenced_____,_____ and shall expire _____,_____. Tenant has the following rights to renew or extend the term of the Lease or to expand the Premises:


4.     Tenant has not paid any rentals or other payments more than one (1) month in advance except as follows:_____ .


5.     Base Rent payable under the Lease is_____Dollars($_). Base Rent and Additional  Rent have been paid through_____ ,_____.  There currently exists no claims, defenses, rights of set-off or abatement to or against the obligations of Tenant to pay Base Rent or Additional  Rent or relating to any other term, covenant or condition under the Lease.


6.     There are no concessions,  bonuses, free months' rent, rebates or other matters affecting the rentals except as follows:_____.


7.     No security or other deposit has been paid with respect to the Lease except as follows:


8.     Landlord is not currently in default under the Lease and there are no events or conditions existing which, with or without notice or the lapse of time, or both, could constitute a default of the Landlord under the Lease or entitle Tenant to offsets or defenses against the prompt payment of rent except as follows:_____ .  Tenant is not in default under any of the terms and conditions of the lease nor is there now any fact or condition which, with notice or lapse of time or both, will become such a default.


9.     Tenant has not assigned, transferred, mortgaged or otherwise encumbered  its interest under the lease, nor subleased any of the Premises nor permitted any person or entity to use the Premises except as follows:             .
10.   Tenant has no rights of first refusal or options to purchase the property of which the Premises is a part.


11.  The Lease represents the entire agreement between the parties with respect to Tenant's right to use and occupy the Premises.


Tenant  acknowledges  that the parties to whom this certificate  is addressed  will be relying upon the accuracy of this certificate  in connection  with their acquisition  and/or financing of the Premises.


			
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IN WITNESS WHEREOF, Tenant has caused this certificate to be executed  this      day of ,2022


						
	TENANT

	CLOUDFLARE, INC. 
a Delaware corporation


									
		By	
		Name	
		Title
	
		By	
		Name	
		Title	


			
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EXHIBIT F


SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT  AGREEMENT










RECORDJN(;REQU£S1'EI> BV ANI>
WHEN REC'ORDED MAlL TO:




















WITNESSETH



			
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L    That said deed of trust securing said note in favor of Lender, and any renewals or extensions thereof shall unconditionally be and remain at all times a lien or charge on the property therein described, prior and superior to the Lease, and leasehold interest of Lessee above mentioned.


2.     That Lender would not make its loan above described without this Agreement


3.    That this Agreement shall be the whole and only agreement between the parties hereto with regard to the subordination of the Lease and leasehold interest of Lessee above mentioned to the lien or charge of the deed of trust  in favor of Lender above referred to, and shall supersede and cancel any prior agreements as to such, or my subordination, including, but not limited to, those provisions contained in the lease above mentioned, which may or do provide for the subordination of the Lease and leasehold interest of Lessee to a deed or deeds of trust or a mortgage or mortgages to be thereafter executed.


4.     Lessee declares, agrees and acknowledges that:
(a)    It consents to and approves
(i)     of all provisions of the note and deed of trust in favor of a.  Lender above referred to,
and
(ii)    all agreements, including but not limited to any loan or escrow agreements, between Owner and Lender for the disbursement of the proceeds of Lender's loan;


(b)    Lender in making disbursements pursuant to any such agreement is under no obligation or duty to, nor has Lender represented that it will, see to the application of such proceeds by the person or persons to whom Lender disburses such proceeds and any application or use of such proceeds tor purposes other than those provided for in such agreement or agreements shall not defeat the suburdination herein made in whole or in part; and




(c)    It intentionally and unconditionally waives, relinquishes and subordinates the lease md  leasehold interest above mentioned in favor of the lien or charge upon said land of the deed oftrust in favor of Lender above referred to and understands that in reliance upon, and in considemtion of, this waiver, relinquishment Jmd subordination specific loans and advances are being and will be made and, as part and parcel thereof, specific monetary and other obligations are being Jmd will be entered into which would not be made or entered into but for said reliance upon this waiver, relinquislunent and subordination.




2


			
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5.     Notwithstanding the foregoing, Lessee and owner hereby agree and the recordation of this Agreement by or on behalf of Lender shall constitute Lender's agreement as follows:


(a)     In the event of foreclosure of said deed of trust, Lender will not join Lessee in any summary proceedings so long as Lessee is not in detault under any of the terms, covenants or conditions of the Lease.


(b)    It is the express intent of the parties hereto that a foreclosure of said deed of trust, the exercise of the power of sale- or the exercise of any other remedies provided therein, or  provided in any other instruments securing the indebtedness secured by said deed of trust, or the delivery of a deed to the subject premises in lieu of foreclosure,  shaU not, of itself, result in the termination of or othenvise affect the Lease, but Lender and any purcha er or other grantee upon foreclosure of said deed of trust or conveyance in lieu of foreclosure shall thereby automatically succeed to the position of Ov.ner under the Lease.


(c)    If, by dispossession, foreclosure, exercise of the power of sale, or otherwise, Lender, its successors or assigns, or any purchaser at a foreclosure  sale, or otherwise shall come into possession of  or  become the owner of  the premises demised by the Lease, such person shall succeed to the interest of Ovmer under the Lease, and, if no default then exists: tmder the tem1s, conditions and provisions of the Lease, the Lease shall remain in effect as a lease of said demised premises, together with all of the rights and privileges therein contained, between such person and Lessee for the balance of the term of the Lease between Owner and Lessee; Lessee agrees to attorn to and accept such person as Lessor under the Lease, and to be bound by and to perform all of the obligations imposed by the Lease upon the Lessee therein, and Lender, its successors or assigns, or any purchaser at a foreclosure or trustee's sale or otherwise will not disturb the possession of Lessee, and will be bound by all of the obligations imposed by the Lease upon the Lessor therein; provided, however, that Lender, or any purchaser at a foreclosure or trustee's sale or otherwise shall not be:


(i)     Liable for any act or omission of a prior lessor (including 0\\.ncr); or


(ii)         sul{jcct to any offsets or defenses which Lessee might have against any prior lessor (including Owner); or


(ii)    bound by any rent or additional rent which Lessee might have paid in advance to any prior lessor (including Owner) for any period beyond the month in which the foreclosure, sale termination or conveyance occurs; or


(iv)     bound by any agreement or modification of the Lease made without t11c consent of Lender.


(d)    Upon the written request of either Lessee or Lender given to the other at the time of a foreclosure of said deed of trust or sale under pmver of sale therein conooned or conveyance in lieu of foreclo.;.'Ure, and if no default then exists under the terms, conditions and provisions of the Lease, Lessee and lender agree to execute a lease of the premises demised by the Lease upon the same terms and conditions as the Lease between Ov.ner and Lessee, which lease shall <.-'Over  any unexpired tenn of the Lease existing prior to such foreclosure, trustee's sale or conveyance in lieu of foreclosure.


6.    This Agreement shall be binding upon and inure to the benefit of Lender and the parties hereto and their respective successors and assigns upon recordation by or on behalf of Lender.




			
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NOTICE: This subordination agreement contains a provision which allows the person obligated on the real property which you lease to obtain a loan a portion of which may be expended for other purposes than improvement of the land.




						
	OWNER:

	

	By	
	Its	
	LESSEE:

	
	By	
	Its	
	BENEFICIARY:

	
	WESTAMERICA BANK,	
	By	
	Its	










(ALL SIGNATURES MUST BE ACKNOWLEDGED AND NOTARIZED)










			
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