LEASE

BETWEEN

ANTHONY SAMMUT AND CHRISTINE SAMMUT,
TRUSTEES OF THE ANTHONY & CHRISTINE SAMMUT
REVOCABLE TRUST U/T/D FEBRUARY 14, 1992
AS LANDLORD

AND

CENTRAL COAST BANCORP
AS TENANT

WESTRIDGE CENTER

TABLE OF CONTENTS

ARTIC LE DESCRIPTION   PA GE 1   FUNDAMENTAL LEASE PROVISIONS AND DEFINITIONS  1
  1 .1 Tenant's Tradename  1   1 .2 Term  1   1 .3 Tenant's Proportionate Share
of Common Area Operating Costs  1   1 .4 Use of Premises  1   1 .5 Addresses For
Notices and Payment of Rent  1   1 .6 Broker(s)  1   1 .7 Certain. Definitions 
1   2   PREMISES, COMMON AREAS, PARKING  2   2 .1 Premises  2   2 .2 Common
Areas  3   3   TERM  3   3 .1 Term  3   3 .2 Landlord's Work  3   3 .3 Lease
Year  3   3 .4 Options To Extend Term  3   4   FIXED RENT  4   4 .1 Payment  4  
5   COMMON AREA MAINTENANCE  5   5 .1 Common Area Operating Costs; Definitions 
5   5 .2 Payment of Tenant's Proportionate Share  6   5 .3 Landlord's Records  7
  6   UTILITIES  7   7   USE OF PREMISES, COMPLIANCE WITH LAW  8   7 .1 Use  8  
7 .2 Increased Risk  8   7 .3 Acceptance  8   7 .4 Use Restrictions  8   7 .5 *
Exclusive Use  8   8   ALTERATIONS  8   8 .1 Alterations  8   8 .2 Other Tenant
Changes  9   9   LIENS AND ENCUMBRANCES  9   10   TAXES ON THE PREMISES AND
TENANT'S PROPERTY  10   10 .1 Personal Property Taxes  10   10 .2 Real Property
Taxes  10   11   MAINTENANCE AND REPAIR  11   11 .1 Obligations of Landlord  11
  11 .2 Tenant's Obligation to Maintain and Repair Premises  11   12   ENTRY AND
INSPECTION  12   13   WAIVER AND INDEMNIFICATION  12   13 .1 Waiver  12   13 .2
Indemnification  13   14   INSURANCE  13   14 .1 Insurance to be Provided by
Tenant  13   14 .2 Landlord's Insurance  14   14 .3 Policy Requirements  14   14
.4 Blanket Coverage  14   14 .5 Waiver of Subrogation  14   15   ASSIGNMENT AND
SUBLETTING  15   15 .1 General Limitations  15   15 .2 No Unreasonable
Withholding of Consent  15   15 .3 Reorganizations and Mergers  15   15 .4
Effect of Violation  16   16   TRANSFER OF LANDLORD'S INTEREST  16   17   DAMAGE
OR DESTRUCTION  16   17 .1 Landlord to Rebuild  16   17 .2 Landlord's Options to
Terminate  16   17 .3 Extent of Landlord's Repair and Rebuilding Obligations  17
  17 .4 Tenant Waivers  17   18   EMINENT DOMAIN  17   18 .1 Entire or
Substantial Taking  17   18 .2 Partial Taking  17   18 .3 Disposition of Award 
18   18 .4 Further Assurance  18   18 .5 Tenant Waivers  18   19   SIGNS AND
AUCTIONS  18   19 .1 Signage  18   19 .2 Auction or Sale  18   20   DEFAULTS AND
REMEDIES  19   20 .1 Default Defined  19   20 .2 Remedies; Termination  19   20
.3 Remedies; Re-entry  20   20 .4 Remedies; Non-termination and Collection of
Rent  20   20 .5 No Effect on Indemnification Obligation  20   20 .6 Landlord's
Default  20   20 .7 Limitation on Recourse  20   20 .8 Notice to Mortgagees and
Others  20   20 .9 Remedies; Interest and Late Charges  21   21   SURRENDER OF
PREMISES; REMOVAL OF PROPERTY  21   21 .1 Condition Upon Surrender  21   21 .2
Removal of Property Upon Re-entry  21   22   ATTORNEYS’ FEES  22   22 .1
Litigation Between the Parties  22   23   WAIVER  22   24   HOLDING OVER  22  
25   SUBORDINATION AND ATTORNMENT  23   26   HEIRS AND ASSIGNS; TIME OF ESSENCE 
23   27   INTERPRETATION  24   27 .1 Severability  24   27 .2 Integration  24  
27 .3 Amendment  24   27 .4 Section Headings and References  24   27 .5
Dependence of Covenants  24   27 .6 Lease Draftsman  24   27 .7 Landlord and
Tenant  24   27 .8 Days, Months and Years  24   27 .9 Term  24   27 .10
Including  24   28   RIGHT OF LANDLORD TO PERFORM  25   29   NOTICES  25   30  
QUIET ENJOYMENT  25   31   ESTOPPEL CERTIFICATE  26   32   BROKERS  26   33  
MERGER  26   34   LANDLORD RESERVATIONS  26   35   HAZARDOUS OR INFECTIOUS
SUBSTANCES  27   35 .1 Covenants of Tenant  27   35 .2 Indemnification  29   35
.3 Inspection  29   35 .4 Definition of Hazardous Substance  30   35 .5
Definition of Environmental, Health and Safety Requirement  30   35 .6 Survival 

SCHEDULE OF EXHIBITS

Exhibit A Shopping Center Site Plan
Exhibit B Plot Plan of Premises
Exhibit C Work Letter

LEASE

(Pad2, Area l)

(Westridge Center)

THIS LEASE (this “Leased is dated and effective as of the____day of March, 1998,
and is made by and between ANTHONY SAMMUT and CHRISTINE SAMMUT, Trustees of the
Anthony & Christine Sammut Revocable Trust u/t/d February 14, 1992
(“‘Landlord”), and CENTRAL COAST BANCORP, dba Bank of Salinas (“Tenant”).

NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, LANDLORD AND TENANT HEREBY
AGREE AS FOLLOWS:

ARTICLE 1
FUNDAMENTAL LEASE PROVISIONS AND DEFINITIONS

1.1 Tenant's Tradename (Par. 1.1): Bank of Salinas

1.2 Term (Art. 3): 10 years, with options to extend the Term.

1.3 Tenant's Proportionate Share of Common Area Operating Costs (Art. 5): one
percent (1%). Tenant's Proportionate Share of Westridge Center Common
Improvements: six/tenths of one percent (.6%).

1.4 Use of Premises (Art 7): The Premises shall be used solely for the operation
of banking facilities.

1.5 Addresses For Notices and Payment of Rent (Art. 29):

(a) Landlord:

60 D Corral De Tierra Rd.
Salinas, CA 93908
Attention: Mr. Tony Sammut

(B)TENANT:

CENTRAL COAST BANCORP
BANK OF SALINAS

301 MAIN STREET
SALINAS, CA 93901
ATTENTION: MR. NICK VENTIMIGLIA

1.6 Broker(s) (Art. 32):

None
(Landlord)
None
(Tenant)

1.7 Certain Definitions: Certain terms have the meaning given for them in other
portions of this Lease. The following terms have the following meanings:

      (a) “Area I” or “Shopping Center” means those parcels of land located in
Area I of Westridge Center as shown on the Site Plan.

      (b) “Building” means that building to be constructed by Landlord pursuant
to the terms of Exhibit “C” attached hereto, and to contain approximately three
thousand two hundred (3,200) square feet of floor area.

      (c) “Pad” means that real property which is commonly known as Pad 2 of the
Shopping Center, depicted on Exhibit “A” attached hereto, and upon which
Landlord shall construct the Building.

      (d) “Parent” means any Person who owns more than fifty percent (50%) of
the equity or beneficial interest of any other Person.

      (e) “Person” means any one or more human beings, or legal entities or
other artificial persons, including partnerships, corporations, trusts, estates,
associations, joint ventures and any other combination of human beings and/or
legal entities.

      (f) "Premises" means, collectively, the Pad and the Building, and all
improvements which, from time to time, are located on the Pad.

      (g) "REA" means that Declaration of Reciprocal Easements, Covenants and
Restrictions recorded January 31,1996, as Document No. 6170, First Amendment to
Declaration of Reciprocal Easements, Covenants and Restrictions recorded July
31, 1996, as Document No. 45144, Second Amendment to Declaration of Reciprocal
Easements, Covenants and Restrictions recorded September 19, 1996, as Document
No. 55547, Declaration of Covenants and Restrictions Affecting Land, recorded
April 24,1997, as Document No. 23045, Reciprocal Easement Agreement, recorded
May 2, 1997, as Document No. 9725071, as same may be amended. Tenant
acknowledges that the term "REA" shall include the proposed Third and Fourth
Amendments to Declaration of Reciprocal Easements, Covenants and Agreements,
copies of which have been delivered to Tenant.

      (h) "Rent Commencement Date" means the date which shall be the first to
occur of the following:

(i) The date Landlord delivers possession of the Premises to Tenant as evidenced
by Landlord delivering a key to the Building to Tenant; or

(ii) The date, Tenant actually commences to do business in, upon or from the
Premises.

      (i) “Site Plan” means the Site Plan for the Shopping Center attached as
Exhibit “A”.

      (j) “Westridge Center” means, collectively, the Premises, the Common
Areas, and all the buildings and improvements located thereon in that certain
Shopping Center located in Salinas, California. Exhibit “A” depicts the general
layout of Westridge Center.

ARTICLE 2
PREMISES, COMMON AREAS, PARKING

2.1 Premises. In consideration of and subject to each and all of the covenants
terms and conditions hereinafter set forth, Landlord hereby leases the Premises
to Tenant and Tenant hereby hires the Premises from Landlord.

2.2 Common Areas. Tenant and its employees, customers and invitees shall have
the non-exclusive license to use that portion of the Shopping Center designated
under the REA as Common Area for the common use of tenants and occupants of Area
I and any other persons permitted to use same (the “Common Areas”^) pursuant to
the terms of the REA. The Common Areas on the Premises shall be subject to the
rules and regulations governing use as promulgated from time to time by Landlord
and are subject to the REA and any amendments to the REA which govern the use
and enjoyment of the Common Areas by the parties to the REA.

ARTICLE 3
TERM

3.1 Term. Unless sooner terminated or extended as provided herein, the term of
this Lease shall be for the period specified in Paragraph 1.2 and shall commence
on the Rent Commencement Date (the “Commencement Date”).

3.2 Landlord's Work. Subject to the terms and conditions of Exhibit "C",
Landlord will complete the work of the improvements required to be performed by
Landlord in Exhibit "C".

3.3 Lease Year. The term "Lease Year" refers to each successive twelve (12)
month period following the Rent Commencement Date.

3.4 Options To Extend Term.

(a)

Subject to the terms and conditions of this Paragraph 3.4. Landlord hereby
grants to Tenant the option(s) (the “Options”^ to extend the initial Term of
this Lease for two (2) periods of five (5) years each (each, an “Option
Period”’). All terms, provisions, obligations and rights set forth in this Lease
shall apply to the Option Periods, except (i) this Paragraph 3.4(a) shall not
apply to increase the number of Option Periods, and (ii) the “Fixed Rent” (as
hereinafter defined) shall be adjusted upward at the commencement of each Option
Period as set forth in subparagraph3A(c). After the exercise of the Option, all
references in this Lease to the Term or the Term hereof shall be considered to
mean the Term as so extended, and all references to the termination or end of
the Term hereof shall be considered to mean the termination or end of the Term
as so extended. Tenant’s right to exercise the Option is subject to:

(iii)

The following conditions precedent:

(aa) This Lease shall be in full force and effect at the time notice of exercise
is given, and on the last day of the Term hereof.

(bb) Tenant shall not be in default under any term or provision of .this Lease
at the time notice of exercise is given, or on the last day of the term hereof.

(iv)

Compliance with the following procedure for exercise:

(aa) Tenant shall, not less than one hundred eighty (18 0) days prior to the
last day of the term hereof, give Landlord written notice irrevocably exercising
the Option; provided, however that Tenant’s 180-day period shall not run until
Landlord shall have delivered to Tenant a written notice stating that Tenant’s
180-day exercise period shall begin to run within thirty (30) days of the date
of Landlord’s notice;

(bb) In lieu of executing a new Lease, each party shall, at the request of the
other, execute a written memorandum hereof, acknowledging the fact that the
Option has been exercised and otherwise complying with the requirements of law
for an effective memorandum of this Lease.

(b) The Options may not be exercised or assigned involuntarily by or to any
person or entity other than Tenant, nor shall the Options be assignable apart
from this Lease, without Landlord’s prior written consent.

(c) The Fixed Rent for the Premises during each respective Option Period shall
be increased by 15% over the Fixed Rent payable as of the last day of the Term
immediately preceding such Option Period.

ARTICLE 4 FIXED RENT

4.1 Payment. From and after the Rent Commencement Date and continuing thereafter
during the Term, Tenant shall pay to Landlord, at the address in Article 1 or
such other address as Landlord designates hi writing, fixed rent as calculated
pursuant to this Paragraph 4.1 (the “Fixed Rent”! on the first day of each
month, in advance. As of the Rent Commencement Date, Fixed Rent shall be equal
to the sum of (a) $36,000.00 per annum, and (b) (the numerical sum of the
interest rate for the loan from Tenant which Landlord obtains in order to
construct the Building in accordance with Exhibit “C” and three and one-half
percent (3.5%)) times (the principal amount of the construction loan obtained by
Landlord to construct the Building). For example, assuming that the cost of the
Building is $500,000.00 and Tenant makes a loan to Landlord in the principal sum
of $500,000.00 with interest payable at six percent (6%) per annum, then Fixed
Rent for the first five (5) years would be calculated as follows: $36,000.00 +
[(.035+.06) X $500,000.00] = $83,500.00 per annum. In the foregoing example,
monthly Fixed Rent shall be $6,958.33. The foregoing is merely an illustration
of the calculation of Fixed Rent and is not a representation by Tenant that
Tenant would make a loan to Landlord in such principal sum or at an interest
rate of 6% per annum. Fixed Rent shall be increased on the first day of the
sixth Lease Year by 15% and shall be increased at the beginning of each Option
Period as provided in Paragraph 3 A(c) above. If the Rent Commencement Date
occurs on a day other than the first day of a month, then the Fixed Rent for the
fraction of the month starting with the Rent Commencement Date shall be paid on
the Rent Commencement Date, prorated on the basis of the actual number of days
in such month. If the Term hereof ends on a day other than the last day of a
month, then the Fixed Rent for the month during which the expiration occurs
shall be prorated on the basis of the actual number of days in such month. In
addition to the Fixed Rent commencing as of the Rent Commencement Date, Tenant
shall pay Common Area Operating Costs (as those terms are described in Paragraph
5.1). The Fixed Rent, Common Area Operating Costs, and any other monetary
obligations due Landlord under the Lease are hereinafter referred to
collectively as the “Rent”. The Rent shall be payable to Landlord, in lawful
money of the United States of America, in currently available funds at the
address for Landlord set forth in Article 1 (or to such other place as Landlord
may from time to time designate in writing), without notice, demand, offset,
deduction or setoff.

ARTICLE 5
COMMON AREA MAINTENANCE

5.1 Common Area Operating Costs; Definitions.

(a) The term “Common Area Operating Costs” means the sum of all expenses paid or
incurred by Landlord in connection with the operation, maintenance, repair,
alteration and periodic replacement of any part or portion of the improvements
maintained by Landlord in the Common Areas (that are not paid directly by, or
separately metered or otherwise chargeable to, individual tenants), during the
calendar year (the “Calendar Year”\ including, without limitation, the Common
Area Operating Costs allocable to the Premises pursuant to the REA. Without
limiting the generality of the foregoing, the Common Area Operating Costs shall
include:

(i)

electricity, water, gas, sewers, refuse collection and all other utilities and
utility services;

(ii)

all utility taxes, charges or similar impositions;

(iii)

rental paid for leased machinery, tools, equipment and motor vehicles used in
connection therewith;

(iv)

maintenance and repair of electrical services and resurfacing and repainting of
buildings and parking lots, restriping, repairs to parking lots, sidewalks and
pedestrian passageways, cleaning, sweeping and janitorial, services,
landscaping, light fixture and bulb replacement, trash and refuse receptacles,
directional signs and markers, and car stops;

(v)

insurance premiums and deductibles (for the policies referred to in Paragraph
14.3) and alterations or replacements of capital improvements in the Common
Areas required by Landlord’s insurance carriers, or any of them, as a condition
to the issuance or continuance of such insurance;

(vi)

the services of independent contractors including the services of any person,
firm or corporation selected by Landlord to maintain the Common Areas, on such
terms and conditions and for such duration as Landlord shall, in its sole
judgment, deem reasonable and appropriate;

(vii)

compensation (including employment taxes, workers’ compensation premiums and
fringe benefits) of all persons, whether or not directly employed by Landlord,
performing duties in connection with the operation, maintenance, repair and
periodic replacement of any part or portion of the improvements and/or
Associated Personal Property in the Common Areas;

(viii)

legal and accounting services engaged by Landlord for the Common Areas;

(ix)

"Landlord's Taxes" (as hereinafter defined);

(x)

the cost and expense associated with maintaining, repairing, and insuring
Westridge Center retention ponds, Westridge Center identification signs, and the
Westridge Center buffer wall and the cost and expense of Westridge Center
security, if any (collectively, the “Westridge Center Common Improvements”); and

(xi)

any other expenses or charges of whatsoever kind, whether or not hereinabove
described, which, in accordance with generally accepted accounting or management
principles, would be considered an expense of operating, maintaining, repairing
and periodically replacing any part or portion of the Common Areas or the
capital improvements and/or Associated Personal Property located or used in the
Common Areas, plus ten percent (10%) of all Common Area Operating Costs to cover
Landlord’s administrative and overhead costs, and to compensate Landlord for
supervision of the operation, maintenance and repair and periodic replacement of
any part or portion of the Common Areas.

Common Area Operating Costs shall not include

(i)

the costs of special services rendered to individual tenants (including Tenant)
for which a special charge is made to such tenants;

(ii)

any costs borne directly by Tenant under this Lease;

(iii)

Landlord’s ground rent, if any; and

(iv)

interest or amortization paid by Landlord in connection with any loan or loans
secured by the real property of which the Premises are a part, unless said loans
are made to finance costs expressly included above in the definition of Common
Area Operating Costs.

(b) The term "Estimated Common Area Operating Costs" means the monthly estimates
of Tenant’s Proportionate Share of Common Area Operating Costs for each Lease
Year to be given by Landlord to Tenant pursuant to the terms hereof.

(c) The term "Landlord's Taxes" means and includes all real and personal
property taxes, charges and assessments, water and sewer rents, taxes on
parking, and all other taxes, assessments, charges and fees of any description,
general and special, which are levied, assessed upon or imposed by any
governmental authority during any Calendar Year with respect to the Westridge
Center Common Improvements, and any tax which shall be levied or assessed to or
in lieu of such real or personal property taxes (including any value added tax
or municipal income tax), and any license fees, commercial rental tax or other
tax upon rents, the entering into of leases, or Landlord’s business of leasing
or operating the Premises, including all costs and fees incurred by Landlord in
contesting Landlord’s Taxes and/or negotiating with the public authorities as to
same; provided, however, that the term “Landlord’s Taxes” shall not include any
federal or state income tax, capital gains tax or any franchise, estate or
inheritance taxes. The term “Landlord’s Taxes” shall also include any tax, fee,
levy, assessment or charge (i) in substitution, partially or totally, of any tax
previously included within the definition of Landlord’s Taxes, or (ii) which is
imposed as a result of a transfer, either partial or total, of Landlord’s
interest in the Premises or any part thereof or which is added to a tax or
charge hereinbefore included within the definition of Landlord’s Taxes by reason
of such transfer, or (iii) which is imposed by reason of this transaction, any
modifications or changes hereto, any transfers hereof, or any modifications of
the Common Areas on the Premises or any portion thereof.

5.2 Payment of Tenant’s Proportionate Share. Tenant shall pay Tenant’s
Proportionate Share of the Common Area Operating Costs as described in this
Article 5. Tenant shall pay to Landlord, in advance, on the first day of each
calendar month commencing on the Rent Commencement Date, an amount estimated by
Landlord, from time to time, as being one-twelfth (1/12) of Tenant’s
Proportionate Share for such Calendar Year. Thereafter, within one hundred
twenty (120) days after the end of each Calendar Year, Landlord shall deliver to
Tenant a written statement setting forth the amount of Tenant’s Proportionate
Share of the actual Common Area Operating Costs for such Calendar Year. If the
aggregate payments made by Tenant for any such Calendar Year exceed the amount
of Tenant’s Proportionate Share for such Calendar Year, such excess shall be
applied as a credit against future payments to be made by Tenant under this
paragraph. If the aggregate payments made by Tenant for any such Calendar Year
are less than the amount of Tenant’s Proportionate Share for such Calendar Year,
Tenant shall, immediately upon demand therefor, pay Landlord the amount of any
such deficiency. Notwithstanding the foregoing, subsequent adjustments regarding
a particular Calendar Year may be made by Landlord as a result of information
not available or expenses not determined or determinable at the time Tenant was
originally billed for such Common Area Operating Costs at any time during the
two (2) year period immediately succeeding such Calendar Year. In the event that
the Commencement Date is other than the first day of a full calendar month, the
first monthly payment shall be a prorata amount of a full monthly contribution.
In the event that this Lease should end on any date other than the last day of a
Calendar Year, Tenant’s Proportionate Share shall be adjusted on the basis of
the ratio which the number of days which have elapsed from the commencement of
the said Calendar Year to the later of the date on which this Lease terminates
or Tenant otherwise surrenders possession of the Premises bears to 365. Tenant’s
obligation to pay Tenant’s Proportionate Share shall survive termination or
earlier expiration of this Lease.

5.3 Landlord’s Records. Landlord shall keep and maintain customary records of
all expenses incurred in connection with Common Area Operating Costs, and the
same shall, upon at least ten (10) days’ written notice, be made available for
inspection by Tenant during regular business hours at the offices of Landlord,
provided that such inspection shall not occur more than once during any twelve
(12) month period. If Tenant does not dispute the same in writing within one (1)
year of receiving the annual written statement setting forth the amount of
Tenant’s Proportionate Share of the actual Common Area Operating Costs for such
Calendar Year, Tenant shall have irrevocably waived its right to dispute such
determination or calculation.

ARTICLE 6
UTILITIES

Commencing on the Commencement Date and continuing throughout the Term hereof,
Tenant, at Tenant’s sole cost and expense, shall pay directly, prior to
delinquency, all charges, duties and rates of every description for water, gas,
telephone and trash removal services, and all other services and utilities
supplied to the Premises, together with any taxes or surcharges thereon.
Landlord shall not be liable for, and Tenant shall not be entitled to, any
abatement or reduction of Rent by reason of any interruption or reduction in the
amount or level of any of the foregoing when such failure or reduction is caused
or mandated by accident, breakage, repairs, strikes, lockouts or other labor
disturbances or labor disputes of any character, or any law, regulation, rule,
ordinance or court order limiting or restricting the availability, use or
consumption of utility items, or by any other cause, similar or dissimilar.
Landlord shall not be liable under any circumstances for any loss of or damage
or injury (including death) to the person, property or business of Tenant, or
any other person, however occurring, through or in connection with or incidental
to the interruption or discontinuance of any of the utilities or services
described in this Article 6.

ARTICLE 7
USE OF PREMISES, COMPLIANCE WITH LAW

7.1 Use. Tenant shall use and occupy the Premises, as and for the use specified
in Paragraph 1.4. Tenant shall not use or occupy the Premises for any other
purpose whatsoever absent Landlord’s prior written consent, which consent shall
not be unreasonably withheld or delayed. Tenant shall not use or occupy the
Premises or the Common Areas in violation of law, and shall immediately
discontinue any use of the Premises or the Common Areas which is declared by any
governmental authority having jurisdiction to be a violation of law. Landlord’s
failure to object to such use shall not constitute a consent to a use which
constitutes such a violation. Tenant, at its sole cost and. expense, shall
promptly comply with any directive of any governmental authority having
jurisdiction which shall impose any duty upon Tenant or Landlord with respect to
the Premises, or the use or occupation thereof. In no event shall Tenant place a
load upon any floor of the Premises exceeding the floor load per square foot
area which such floor was designed to carry and which is allowed by law.

7.2 Increased Risk. Tenant shall not do anything in or upon the Premises which
may be prohibited by any insurance policy in force carried by Landlord or
Tenant, from time to time, covering the Shopping Center or any portion thereof,
including the Premises. If Tenant’s occupancy or conduct of business in or upon
the Premises (whether or not Landlord has consented to the same) results in any
increase in premiums for (or calculation of) the insurance carried from time to
time by Landlord with respect to the Shopping Center, Tenant shall, at
Landlord’s option, either cease such use or conduct, immediately, or pay any
resulting increase in premium upon demand therefor from Landlord. In determining
whether increased premiums or cancellation are a result of Tenant’s occupancy of
the Premises, the written determination of the insurer shall be conclusive.
Tenant shall promptly comply with all reasonable requirements of the insurance
authority or of any insurer now or hereafter in effect relating to the use
and/or maintenance of the Premises.

7.3 Acceptance. Tenant acknowledges that neither Landlord nor any agent of
Landlord has made any representation or warranty with respect to the Premises
and/or the Shopping Center or any portion or aspect thereof, or with respect to
the suitability or fitness thereof for the conduct of Tenant’s business or for
any other purpose. There shall be a conclusive presumption that the Premises and
the Shopping Center are in good and satisfactory condition on the Rent
Commencement Date.

7.4 Use Restrictions. Tenant hereby acknowledges that it has read the REA and
agrees to be bound by all of the terms and conditions set forth therein.

7.5 Exclusive Use. During the Exclusive Protection Period (as that term is
defined below), Tenant shall have the exclusive right to operate a full service
retail bank in Westridge Center. Tenant’s exclusive shall not apply to parcels
in Westridge Center not owned by Landlord or to tenants of Landlord, whose
leases predate this Lease. For a period of four (4) years from the Rent
Commencement Date (the “Exclusive Protection Period”), Landlord shall not enter
into any leases in Westridge Center which would permit the tenant thereunder to
use its premises primarily as a full service retail bank.

ARTICLE 8
ALTERATIONS

8.1 Alterations. Except as hereinafter set forth, Tenant shall make no
alterations, additions or improvements (collectively, “Tenant Changes”) to the
Premises (including the Common Areas) or the Building affecting the outside
appearance of the Premises or the Building, and/or structural alterations of any
kind, and/or alterations affecting basic plumbing, air conditioning, electrical
or rife safety systems shared with the Common Areas or other tenants’ premises,
without Landlord’s prior written consent, which consent shall not unreasonably
be withheld or delayed. Tenant Changes (including any air conditioning equipment
or devices installed in or upon the Premises) shall become the property of
Landlord and shall be surrendered with the Premises, as a part thereof, at the
end of the term or earlier termination hereof; except that Tenant shall, at the
request of Landlord, remove any vaults installed in the Premises. Tenant hereby
covenants that, before commencing any Tenant Changes, Tenant shall give Landlord
at least twenty (20) business days’ written notice of the proposed commencement
of such work (to afford Landlord an opportunity to post appropriate notices of
nonresponsibility). Tenant covenants and agrees that all alterations done by or
pursuant to the direction of Tenant shall be performed expeditiously, in a good
and workmanlike manner, in full compliance with all laws, rules, orders,
ordinances, directions, regulations and requirements of all governmental
agencies, offices, departments, bureaus and boards having jurisdiction, in full
compliance with the rules, orders, directions, regulations, and requirements of
the Insurance Service Office or any similar body, and in a manner so as to
minimize interference with pedestrian and vehicular traffic and other businesses
in the Shopping Center. The provisions of this Lease are intended fully to
govern the rights and obligations of Landlord and Tenant as they relate to the
need for repairs to the Premises. Accordingly, Tenant waives and releases its
right to make repairs at Landlord’s expense or to quit the Premises under
Sections 1941, 1942(a) and 1932(1) of the California Civil Code or any similar
law, ordinance or regulation which may now exist or hereafter be enacted or
enforced which confers upon Tenant the right to make any repairs to the Premises
of the type allocated to Landlord by this paragraph, whether or not for the
account of Landlord, or to terminate this Lease because of Landlord’s failure to
keep the Premises or the Shopping Center in good order, condition and repair.

8.2 Other Tenant Changes. If any alteration, addition, replacement or change to
the Premises shall be required by law or the requirements of any insurance
company (as a condition to the issuance or continuation of insurance coverage
without increase in Premium) for any reason including (i) Tenant’s failure to
maintain the Premises in the manner required hereby, (ii) Tenant’s use of the
Premises, a change in the manner or mode of Tenant’s use of the Premises, or the
location of partitions, trade fixtures, merchandise or other contents of the
Premises, or (iii) any requirement of law or ordinance or other requirement of
any government or other authority, then such alterations, additions,
replacements or changes shall be promptly made and paid for solely by Tenant in
accordance with Paragraph 8.1.

ARTICLE9
LIENS AND ENCUMBRANCES

Tenant covenants and agrees to keep the Premises, the Building and the Shopping
Center, and Tenant’s leasehold interest therein, free from any mechanics’ liens
or other encumbrances arising out of work or materials claimed to have been
furnished to Tenant. Tenant shall discharge any and all of such liens and
encumbrances, by payment, bond or otherwise, within ten (10) days after filing
thereof, at the cost and expense of Tenant, and Tenant further agrees to defend,
indemnify and hold harmless Landlord from and against any such liens or claims
or actions thereon, together with costs of suit and attorneys’ fees incurred by
Landlord in connection with any such claims or actions. If any such liens are
filed, Landlord may, without waiving its rights and remedies based on such
breach of Tenant and without releasing Tenant from any of its obligations, cause
such liens to be released by any means it shall deem proper, including payment
in satisfaction of the claims giving rise to such liens. Tenant shall reimburse
Landlord, within ten (10) days after demand therefor, for any sum paid or
incurred by Landlord to remove such liens.

ARTICLE 10
TAXES ON THE PREMISES AND TENANT'S PROPERTY

10.1 Personal Property Taxes. Tenant shall be liable for, and shall pay prior to
delinquency, all taxes levied against Tenant’s Property (as that term is defined
below) and any other personal property of whatsoever kind and to whomsoever
belonging, located or installed in or about the Premises, commencing on the date
Tenant’s Property or such other personal property is placed in or about the
Premises. Upon demand by Landlord, Tenant shall furnish Landlord with evidence
satisfactory to Landlord of payment thereof. The term “Tenant’s Property” shall
mean all interior signs, trade fixtures, furniture and equipment and other
movable items installed or placed on the Premises by or at the direction or with
the consent of Tenant, regardless of ownership. If any taxes on Tenant’s
Property or other personal property are levied against Landlord or Landlord’s
property and if Landlord pays the same (which Landlord shall have the right to
do regardless of the validity of such levy, but only under proper protest if
requested in writing by Tenant), or if the assessed value of Landlord’s property
is increased by the inclusion therein of a value placed upon Tenant’s Property
or such other personal property, and if Landlord pays the taxes based upon such
increased assessment (which Landlord shall have the right to do regardless of
the validity thereof, but only under proper protest in writing if requested by
Tenant), Tenant shall repay to Landlord, within ten (10) days after demand
therefor, the taxes so paid by Landlord and any expenses incurred by Landlord in
connection therewith, together with interest thereon at the Lease Rate (as
defined in Paragraph 20.9) In any such event Tenant shall have the right, in the
name of Landlord and with Landlord’s full cooperation, but at no cost to
Landlord, to bring suit in any court of competent jurisdiction to recover the
amount of any such taxes so paid under protest, and any amount so recovered
shall belong to Tenant.

10.2 Real Property Taxes. Tenant shall pay the real property taxes, as defined
below, applicable to the Premises and the Building and improvements thereon
during the entire term of this Lease, including all Option Periods. All such
payments shall be made prior to the delinquency date. Tenant shall promptly
furnish Landlord with satisfactory evidence that such taxes have been paid. If
any such taxes paid by Tenant cover any period of time after the expiration of
the Term, Tenant’s share of such taxes shall be equitably prorated to cover only
the period of time within the tax fiscal year during which this Lease shall be
in effect, and Landlord shall reimburse Tenant to the extent required. If Tenant
shall fail to pay any such taxes, Landlord shall have the right to pay the same,
in which case Tenant shall repay such amount to Landlord with Tenant’s monthly
installment of Fixed Rent together with interest on such amounts at the Lease
Rate (as defined in Paragraph 20.9). If the Premises are not separately
assessed, Landlord shall pay all real property taxes on the Premises, and Tenant
shall pay to Landlord, within thirty (30) days after written request therefor,
the real property taxes imposed upon the Premises and the Building. In addition,
Tenant shall pay to Landlord any payments required under any gross receipts,
rental or excise tax on gross income derived by Landlord under this Lease,
regardless of how designated, but excluding federal and state income taxes. As
used herein, the term “real property taxes” includes any form of real estate tax
or assessment, general or special, ordinary or extraordinary, and any license
fee, commercial rental tax, improvement bond or bonds, and any other levee, tax
or charge (other than inheritance, personal income or estate taxes) imposed on
the Premises or the Building by any authority having the direct or indirect
power to tax, including any city, state or federal government, or any school,
agricultural, sanitary, hospital, fire, street, drainage or other improvement
district thereof, as against any legal or equitable interest of Landlord in the
Premises or in the real property of which the Premises are a part, as against
Landlord’s right to rent or other income therefrom, or as against Landlord’s
business of leasing the Premises. The term “real property taxes” shall also
include any tax, fee, levee, assessment or charge, in substitution, partially or
totally, of any tax, fee, levee, assessment or charge hereinabove included
within the definition of “real property taxes”. The term “real property taxes”
shall also include any and all assessments for services generally provided
without charge to owners and/or occupants of real property prior to the adoption
of Proposition 13 by the voters of the State of California in the June 1978
election. Without limiting the generality of the foregoing, Tenant shall be
responsible for, and the term “real property taxes” shall include, any increase
in real property taxes which is caused due to (i) any “change in ownership” of
the Premises or any portion of the real property of which the Premises
constitute a part (as defined in Section 60 et seq. of the California Revenue
and Taxation Code, the regulations promulgated thereunder and any amendments or
successor statutes or regulations thereto) or (ii) any construction or work of
improvement in the Premises or the Shopping Center.

ARTICLE 11
MAINTENANCE AND REPAIR

11.1 Obligations of Landlord. Landlord shall keep in good order; condition and
repair the structural portions, foundations, exterior walls, canopy, roof,
downspouts and gutters of the Building (excluding all windows, doors, plate
glass and storefronts, and except for damage caused by any act, negligence or
omission of Tenant or its employees, agents, invitees, licensees, contractors or
subtenants, damage or destruction caused by any casualty not required to be
repaired under Article 17 and any condemnation or taking of the Premises or the
Shopping Center governed by Article 18). Such maintenance and repair of the
structural portions and foundations of the Building and the structural members
of the roof of the Building shall be at Landlord’s sole cost and expense; all
other maintenance and repair described above (including maintenance, repair and
replacement of all portions of the roof of the Building other than the
structural members) shall be included in Common Area Operating Costs and paid by
Tenant pursuant to Article 5. Landlord shall have no obligation to make any
repairs or replacements hereunder until the expiration often (10) days following
written notice from Tenant to Landlord of the need therefor. Tenant waives any
right now or hereafter granted by law to make any repairs under this Paragraph
11.1 upon Landlord’s failure to do so hereunder or otherwise. Landlord shall
give Tenant at least 48 hours prior verbal notice before entering the Building
to perform Landlord’s obligations hereunder. Tenant shall provide Landlord with
an emergency contact number for Landlord’s use when 48 hours notice is not
possible due to emergency circumstances.

11.2 Tenant’s Obligation to Maintain and Repair Premises. Except for those
portions of the Premises and the Building for which Landlord is responsible
under Paragraph 11.1, Tenant, at Tenant’s sole cost and expense, shall at all
times keep all portions of the Premises in good order, condition and repair
(including replacements, as and when necessary), including, without limitation,
all plate glass, show cases, storefront parts and moldings, doors, door jams,
door closers, door hardware, fixtures, equipment and appurtenances thereof,
floors, partitions, all electrical, lighting, heating, plumbing and sprinkler
systems, fixtures and equipment, and HVAC. Tenant shall also be responsible for
the repair of any and all damage caused to the Building or any other portion of
the Shopping Center by any act, neglect or omission of Tenant or its employees,
agents, invitees, licensees, contractors or subtenants; the repair of any such
damage shall be made by Tenant, at Tenant’s cost and expense, within thirty (30)
days of demand by Landlord. If Tenant fails to make such repairs or commence
such repairs and diligently pursue such repairs to completion during the thirty
(30) day notice period, then Landlord shall make such repairs at Tenant’s cost
and expense, and Tenant shall reimburse to Landlord all such costs and expenses,
together with a management and administration fee of fifteen percent (15%) of
the amount thereof, within ten (10) days after submission by Landlord to Tenant
of a statement of the amount thereof. At Tenant’s expense, Tenant shall maintain
in force a service and preventive maintenance contract with an authorized HVAC
service company covering all heating, ventilation and air conditioning equipment
serving the Premises, and shall provide Landlord with a copy thereof prior to
commencement of the Term.

ARTICLE 12
ENTRY AND INSPECTION

Tenant shall permit Landlord, its employees, partners, directors, officers,
representatives, agents and affiliates, at all reasonable times during normal
business hours and at any time in case of emergency: (i) to enter into and upon
the Premises for the purpose of inspecting the same, or for the purpose of
protecting the interest therein of Landlord, or to post notices of
nonresponsibiliry; and (ii) to take all required materials and equipment into
the Premises, and perform all required work therein, including the erection of
scaffolding, props or other mechanical devices, for the purpose of making
alterations, repairs or additions to the Premises or to any portion of the
Common Areas, or for maintaining any service provided by Landlord to Tenant
hereunder, without any payment, rebate or abatement of Rent to Tenant (although
Landlord is under no obligation to make such alterations, repairs or additions
to the Premises or to maintain or provide any services to the Premises, except
to the extent expressly provided elsewhere in this Lease), provided, that
Landlord shall not unreasonably interfere with Tenant’s operation of its
business on the Premises. Landlord shall give Tenant at least 48 hours prior
verbal notice before entering the Building to perform Landlord’s obligations
hereunder. Tenant shall provide Landlord with an emergency contact number for
Landlord’s use when 48 hours notice is not possible due to emergency
circumstances. Tenant shall also permit Landlord and its employees, partners,
directors, officers, representatives, agents and affiliates, upon request, to
enter and/or pass through the Premises or any part thereof, at reasonable times
during normal business hours, to show the Premises to prospective purchasers,
mortgagees, tenants or master or ground lessors of the Shopping Center or any
portion thereof. Landlord and its employees, partners, directors, officers,
representatives, agents and affiliates shall have no liability to Tenant for any
disturbance to Tenant (and Tenant shall have no right to abate Rent) as a
consequence of Landlord’s exercise of its rights hereunder. Tenant shall permit
all tenants and occupants of the Shopping Center from time to time have signage
on the Pylon Sign to enter the Premises for the purpose of installing, removing,
maintaining or repairing such Pylon Sign, and Tenant shall not be entitled to
any rebate or abatement of Rent in connection with such entry, and Landlord
shall use its commercially reasonable effort to cause such tenants and occupants
not to unreasonably interfere with Tenant’s operation of its business on the
Premises.

ARTICLE 13
WAIVER AND INDEMNIFICATION

13.1 Waiver. Tenant, as a material part of the consideration to Landlord, hereby
assumes all risk of damage to Tenant’s Property or injury to Tenant’s employees,
agents, visitors, invitees and licensees anywhere in the Shopping Center,
including the Premises, and Tenant hereby waives all claims in respect thereof
from any cause whatsoever against Landlord, its agents or employees, except
claims for personal injury or property damage not covered by the insurance
required to be carried by Tenant pursuant to Paragraph 14.1 (and only to the
extent covered by the liability insurance carried by Landlord pursuant to
Paragraph 14.3) which are caused by the failure of Landlord to observe any of
the terms and conditions of this Lease (and such failure persists for an
unreasonable period of time after written notice of such failure) or which arise
from any negligence or intentional misconduct of Landlord, or of its agents or
employees. Landlord shall not be liable to Tenant for any unauthorized or
criminal entry of third parties into the Premises or the Shopping Center, or for
any damage to persons or property, or loss of property in or about the Premises
or the Shopping Center, the parking lot and the approaches, loading docks,
entrances, streets, sidewalks or corridors thereto, by or from any unauthorized
or criminal acts of third parties, regardless of any breakdown, malfunction or
insufficiency of any security measures, practices or equipment that may be
provided by Landlord. Tenant shall immediately notify Landlord in writing of any
breakdown or malfunction of any security measures, practices or equipment
provided by Landlord as to which Tenant has or should have knowledge. Landlord
shall not be liable to Tenant for interference with light or incorporeal
hereditaments or for damage therefrom to Tenant or Tenant’s property from any
cause. Tenant hereby agrees that in no event shall Landlord be liable for
consequential damages, including injury to Tenant’s business or any loss of
income therefrom, nor shall Landlord be liable to Tenant for any damages caused
by the act or neglect of any other tenant or their invitees in the Shopping
Center.

13.2 Indemnification. Throughout the Term of this Lease, Tenant hereby agrees to
indemnify, defend, protect and hold Landlord harmless against and from any and
all claims for damages or injury occurring on the Premises, or in connection
with the conduct of its business on the Premises, or from any activity, work or
other thing permitted or suffered by Tenant on the Premises, and shall further
indemnify, defend, protect and hold Landlord harmless against and from any and
all claims arising from any breach or default in the performance of any
obligation on Tenant’s part to be performed under the terms of this Lease, or
arising from any act, neglect, fault or omission of Tenant, or of its agents,
employees, visitors, invitees and licensees occurring on the Premises or any
part or portion of the Shopping Center, and from and against all costs,
attorneys’ fees, expenses and liabilities incurred in connection with any such
claims or any actions or proceedings brought thereon; and in case any action or
proceeding be brought against Landlord by reason of such claim, Tenant, upon
notice from Landlord, shall defend the same at Tenant’s expense by counsel
reasonably satisfactory to Landlord. Tenant agrees to advance to Landlord the
costs of Landlord’s defense of any matter subject to or reasonably believed by
Landlord to be subject to Tenant’s indemnity obligations hereunder, upon
Landlord’s undertaking to repay such advances with interest at the Lease Rate in
the event it is ultimately determined by appropriate judicial proceedings that
such matter was not within Tenant’s indemnity obligations hereunder. The
provisions of this paragraph shall survive the expiration or sooner termination
of this Lease.

ARTICLE 14
INSURANCE

14.1 Insurance to be Provided by Tenant. At its sole cost and expense, Tenant
shall maintain in full force and effect during the Term the following policies
of insurance:

(a)

Comprehensive General Liability Insurance or Commercial General Liability
Insurance, insuring against liability for bodily injury or death to persons,
property damage and personal injury, covering the Premises and the business of
Tenant, with a comprehensive single limit of liability not less than
$5,000,000.00, such coverage to be in a commercial general liability form with
at least the following endorsements: (i) deleting any employee exclusion on
personal injury coverage; (ii) including coverage for injuries to or caused by
employees; (iii) providing for blanket contractual liability coverage (including
Tenant’s indemnity obligations contained in this Lease), broad form property
damage coverage and products completed operations, owner’s protective and
personal injury coverage; (iv) providing for coverage of employers automobile
non-ownership liability; and (v) if required by Landlord, providing liquor
liability coverage. All such insurance: (1) shall be primary and
non-contributory; (2) shall provide for severability of interests; (3) shall
provide that an act or omission of one of the named insureds shall not reduce or
avoid coverage to the other named insureds; and (4) shall afford coverage for
all claims based on acts, omissions, injury or damage which occurred or arose
(or the onset of which occurred or arose) in whole or in part during the policy
period. If, in the opinion of Landlord’s insurance advisor, the amount or scope
of such coverage is deemed inadequate at any time during the Term, Tenant shall
increase such coverage to such reasonable amounts or scope as Landlord’s advisor
deems adequate.

(b)

Plate glass insurance, sufficient to pay for the replacement of, and any or all
damage to, exterior plate glass and storefront supports in the Premises.

(c)

Fire insurance, with standard extended coverage, sprinkler leakage, vandalism
and malicious mischief endorsements on all of Tenant’s fixtures and equipment in
the Premises, in an amount not less than one hundred percent (100%) of their
full insurable value, the proceeds of which shall, so long as this Lease is in
effect, be used for the repair or replacement of the fixtures and equipment so
insured.

(d)

Workers’ Compensation Insurance in the manner and to the extent required by
applicable law and with limits of liability not less than the minimum required
under applicable law, covering all employees of Tenant having any duties or
responsibilities in or about the Premises.

14.2. Landlord’s Insurance. Landlord shall during the Term maintain in full
force and effect a policy or policies of fire and extended coverage insurance
covering the Building and the Common Area on the Premises, with earthquake
and/or flood coverage if required by Landlord, and such other insurance in such
amounts and covering such other liability or hazards as deemed appropriate by
Landlord. The amount and scope of coverage of Landlord’s insurance hereunder
shall be determined by Landlord from time to time in its sole discretion and
shall be subject to such deductible amounts as Landlord may elect. Landlord
shall have the right to reduce or terminate any insurance or coverage called for
by this Paragraph 14.2 to the extent that any such coverage is not reasonably
available in the commercial insurance industry from recognized carriers or not
available at a cost which is in Landlord’s judgment economic or feasible under
the circumstances. The cost of all insurance maintained by Landlord hereunder,
or otherwise on all or any portion of the Shopping Center, shall be included in
Common Area Operating Costs. All insurance proceeds payable under Landlord’s
casualty insurance carried hereunder shall be payable solely to Landlord, and
Tenant shall have no interest therein.

14.3. Policy Requirements. All insurance policies required to be carried under
this Lease shall be issued by financially sound qualified insurers, licensed to
do business in the State in which the Shopping Center is located. All Tenant’s
insurance (other than Workers’ Compensation) shall name Landlord, and such other
persons or entities as Landlord may from time to time designate, as additional
insureds. Tenant’s Workers’ Compensation Insurance shall contain an employer’s
contingent liability endorsement. Tenant shall deliver to Landlord certificates
of all insurance required to be carried by Tenant hereunder, showing that such
policies are in full force and effect in accordance with this Article 14. Tenant
shall obtain written undertakings from each insurer under policies maintained by
Tenant hereunder to notify Landlord, and any other additional insured
thereunder, at least thirty (30) days prior to cancellation, amendment or
reduction in coverage under any such policy.

14.4. Blanket Coverage. Any policy required to be maintained hereunder by either
party may be maintained under a so-called “blanket policy”, insuring other
parties and other locations, so long as the amount of insurance required to be
provided hereunder is not thereby diminished.

14.5 Waiver of Subrogation. Each policy of property insurance which either party
obtains in connection with the Premises shall include a clause or endorsement
denying the insurer any rights of subrogation against the other party to the
extent rights have been waived by the insured prior to the occurrence of injury
or loss. Landlord and Tenant hereby waive any rights against the other for
injury or loss due to hazards covered by insurance required to be carried by
this Lease, or actually carried, whether or not containing such a waiver of
subrogation clause or endorsement, to the extent of the loss covered thereby, or
if either party does not, for any reason, have valid enforceable insurance,
then, this waiver shall apply to the extent of all property insurance which was
required to be carried hereunder.

ARTICLE 15
ASSIGNMENT AND SUBLETTING

15.1 General Limitations. Except as expressly provided in Paragraphs 15.3 and
15.4, without Landlord’s written consent first had and obtained, which consent
Landlord shall not unreasonably withhold, Tenant shall not, either voluntarily
or by operation of law, assign, mortgage, hypothecate or encumber this Lease, or
any interest in this Lease, permit the use of the Premises by any person or
persons, franchises, affiliated companies, licensees or concessionaires, other
than Tenant, or sublet the Premises or any part of the Premises. Any transfer of
this Lease from Tenant by merger, reorganization, liquidation, or the sale,
conveyance, transfer by bequest or inheritance, or other transfer of a
controlling interest in Tenant (whether by transfer of stock, partnership
interest or otherwise) shall constitute an assignment for the purposes of this
Lease. Notwithstanding the foregoing, if Tenant is a corporation whose stock is
regularly traded on a national stock exchange,- or is regularly traded in the
over-the-counter market and quoted on NASDAQ, the transfer of stock, regardless
of quantity, shall not constitute an assignment for the purposes of this Lease.
A consent to one assignment, subletting, occupation or use shall not constitute
a waiver of the necessity of such consent to a subsequent assignment or
subletting, whether by Tenant or any subsequent assignee or subtenant, an shall
not be deemed a release of Tenant from liability for the full performance of all
the terms, conditions and covenants of this Lease on Tenant’s part to be
performed, whether occurring before or after such consent, assignment or
subletting. Tenant shall reimburse Landlord its actual costs and expenses for
attorneys’ fees incurred in connection with any proposed sublease or assignment.

15.2 No Unreasonable “Withholding of Consent. In determining whether or not to
consent to the proposed assignment or subleasing, Landlord may consider, among
other factors, whether the proposed sublessee or assignee will use the Premises
for any use other than the use set forth in Paragraph 7.1. the experience of the
proposed sublessee or assignee in operating a business for the use set forth in
Paragraph 7.1, and whether the proposed sublessee or assignee has a net worth
that is adequate in the circumstances and, in any event, not less than that of
Tenant. If Tenant assigns or subleases all or any portion of the Premises on a
basis such that the value of the consideration to be received by Tenant will
exceed the Rent or prorated portion thereof, as the case may be, for such space
reserved in this Lease, then Tenant shall pay to Landlord, upon Tenant’s receipt
thereof, fifty percent (50%) of the excess of the Rent and all other
consideration paid in connection with or pursuant to the assignment or sublease,
over the rental then due as reserved in this Lease applicable to the assigned or
subleased space. The acceptance of Rent by Landlord from any other person shall
not be construed as a waiver by Landlord of any provision of this Lease, or as a
waiver of the requirement of Landlord’s consent to any assignment, subletting or
other transfer, or to be a release of Tenant from any obligation under this
Lease. Each assignee or subtenant shall jointly assume all obligations of the
Tenant under this Lease, and shall be and remain liable jointly and severally
with Tenant for the payment of Rent, and for the due performance of all the
terms, covenants and conditions and agreements herein contained on Tenant’s part
to be performed during the Term; provided, however, that a subtenant shall be
liable to Landlord for Rent only in the amount set forth in the sublease.
Whether or not Landlord’s consent is required, no assignment shall be binding on
Landlord unless such assignee or sublessee shall deliver to Landlord a
counterpart of such assignment or sublease (and any related collateral
agreements) and an instrument in recordable form which contains a covenant of
assumption by the assignee or sublessee satisfactory in substance and form to
Landlord, consistent with the above requirements. The failure or refusal of the
assignee or sublessee to execute such an instrument of assumption shall not
waiver release or discharge the assignee or sublessee from its liability.

15.3 Reorganizations and Mergers. Notwithstanding Section 15.1 to the contrary,
Tenant shall be entitled to assign and transfer this Lease without Landlord’s
prior consent to the surviving corporation in the event of a merger,
reorganization or sale of assets reorganization to which Tenant shall be a
party; provided, however, that such subsidiary, affiliated firm or surviving
corporation shall conduct the same business from the Premises under the same
trade name, shall in writing expressly assume all of the provisions, covenants
and conditions of this Lease on the part of Tenant to be kept and performed,
shall have a financial net worth no less than the financial net worm of Tenant
as of the date hereof, adjusted for any increases in the Consumer Price Index —
All Urban Consumers (San Francisco-Oakland-San Jose Area; Base: 1984 = 100)
since the date hereof, and further provided (unless Tenant shall thereafter
cease to exist) that no such assignment or transfer shall act as a release of
Tenant from any of the provisions, covenants and conditions of this Lease on the
part of Tenant to be kept and performed. In no event shall the Fixed Rent after
such assignment or subletting be less than the Fixed Rent due prior, to the
effective date of the assignment or sublease.

15.4 Effect of Violation. Any assignment, mortgage, pledge, hypothecation,
encumbrance, subletting or license of this Lease, the leasehold estate hereby
created, or the Premises or any portion thereof, either voluntarily or
involuntarily, whether by operation of law or otherwise, or any other action by
Tenant in violation of the restrictions set forth in this Article 15, without
the prior written consent of Landlord first had and obtained therefor, shall be
null and void and shall, at the option of Landlord, constitute a material
default under this Lease.

ARTICLE 16
TRANSFER OF LANDLORD'S INTEREST

In the event of any transfer or transfers of Landlord’s interest in the
Premises, other than a transfer for security purposes only, the transferor shall
automatically be relieved of any and all obligations and liabilities on the part
of the Landlord accruing from and after the date of such transfer.

ARTICLE 17
DAMAGE OR DESTRUCTION

17.1 Landlord to Rebuild!’ If the Premises are damaged or destroyed by fire or
other casualty insured under Landlord’s casualty insurance carried under
Paragraph 14.3. then Landlord shall repair the damaged or destroyed portions of
the Premises, using reasonable diligence, unless Landlord elects not to repair
as hereinafter provided. If such damage or destruction substantially interferes
with the conduct of Tenant’s business in the Premises, then a just part of the
Fixed Rent shall be abated, to the extent of such interference reasonably
attributable to such damage or destruction, until substantial completion of such
repairs. Fixed Rent shall abate in its entirety if the Building is so severely
damaged that Tenant cannot, in Landlord’s and Tenant’s reasonable judgment,
continue to operate its business in the Premises.

17.2 Landlord’s Options to Terminate. If (A) fifty percent (50%) or more of the
Gross Leasable Area of the Building is damaged or destroyed by fire or other
casualty insured under Landlord’s casualty insurance carried under Paragraph
14.2 (notwithstanding that the Premises may sustain no material damage), or (B)
the Building is damaged or destroyed by casualty so insured and the cost of
repair or replacement equals or exceeds thirty-three percent (33%) of the actual
replacement cost thereof, or (C) the Premises, the Building and/or the Shopping
Center, or’any portion thereof, are damaged or destroyed in whole or in part
from any cause or casualty, and Landlord does not actually receive insurance
proceeds sufficient to fund the cost of repair and restoration, then, in any
such event, Landlord may elect, in its sole discretion, to (1) repair or rebuild
the damaged or destroyed portion of the Premises, Building or Shopping Center or
(2) terminate this Lease by giving written notice of such termination to Tenant.
Landlord shall make its election within thirty (30) days after any such damage
or destruction. If Landlord elects to repair or rebuild, then it shall proceed
with reasonable diligence to make such repairs or rebuilding. Unless Landlord
elects to terminate this Lease hereunder, any damage or destruction to the
Premises, the Building and/or the Shopping Center shall have no effect on this
Lease and this Lease shall remain in full force and effect, the parties waiving
the provisions of any statute or law to the contrary.

17.3 Extent of Landlord’s Repair and Rebuilding Obligations. If Landlord elects
to repair and rebuild hereunder, then its obligation for such repair and
rebuilding shall be limited to a scope of work not exceeding the original scope
of work for the portions of the Shopping Center repaired and reconstructed
hereunder and Landlord’s Work as set forth in Exhibit “C”. Landlord shall have
reasonable control over all design and construction decisions with respect to
such repair and rebuilding; provided, however, that Landlord shall seek input
from Tenant regarding such repair and rebuilding and shall incorporate Tenant’s
reasonable input into such design and construction decisions. All costs and
expenses for such repair and rebuilding shall be borne by Landlord. If Landlord
elects to repair and rebuild hereunder, then Tenant shall forthwith replace or
repair all of Tenant’s signs, trade fixtures, equipment display cases and all
other installations made or installed by Tenant under this Lease, regardless of
whether paid for by Landlord or Tenant. Tenant shall prosecute its work of
repair and reconstruction hereunder with all due diligence and shall reopen for
business in the Premises at the earliest possible time after the event of damage
or destruction, so that Landlord will be deprived of the benefits of Tenant’s
business operations in the Premises for as short a time as possible.

17.4 Tenant Waivers. Tenant hereby waives any right at law or in equity which it
might have to terminate this Lease on account of any damage or destruction to
the Premises, the Building and/or the Shopping Center, including all rights
under California Civil Code Sections 1932(2) and 1933(4), and any similar or
successor statutes. In the event of any such damage or destruction, the rights,
duties and obligations of the parties shall be governed solely by the applicable
provisions of this Lease with respect thereto.

ARTICLE 18
EMINENT DOMAIN

18.1 Entire or Substantial Taking. If the Premises or the Shopping Center, or
any portion of or interest in either, is taken for any public or quasi-public
use under any statute or by right of eminent domain, or by purchase in lieu
thereof, so that in Landlord’s judgment a reasonable amount of reconstruction of
the Premises and/or Shopping Center will not result in the Premises being
reasonably suited for Tenant’s continued occupancy for the uses and purposes for
which the Premises are leased, then this Lease shall terminate as of the date
that possession of the Premises or Shopping Center, or part thereof, or interest
therein is taken.

18.2 Partial Taking. If any part of or interest in the Premises or the Shopping
Center is so taken and the remaining part thereof or interest therein is, in
Landlord’s judgment, after reconstruction of the remaining Premises or Shopping
Center, reasonably suitable for Tenant’s continued occupancy for the purposes
and uses for which the Premises are leased, then this Lease shall, as to the
part of the Premises so taken, terminate as of the date possession of such part
is taken, and the Fixed Rent then in effect shall be reduced in the proportion
that the Gross Leasable Area of the part taken (less any additions thereto by
reason of any reconstruction) bears to the original Gross Leasable Area of the
Premises. Landlord shall, at its own cost and expense, make necessary repairs or
alterations to the remaining Premises and/or Shopping Center Common Area owned
by Landlord, so as to constitute the remaining Premises (or the Building) a
complete architectural unit, provided that (A) the cost of such work does not
exceed the amount of the award available to Landlord as a result of the taking,
and (B) the scope of such work shall not exceed that done by Landlord in
originally constructing the Building and/or the Premises. A just part of the
Fixed Rent shall be abated during such restoration to the “extent that such
restoration substantially interferes with the conduct of Tenant’s business in
the Premises.

18.3 Disposition of Award. All compensation or damages awarded or paid for any
taking hereunder shall belong to and be the property of Landlord, whether such
compensation or damages are awarded or paid as compensation for diminution in
value of the leasehold, the fee or otherwise, except that Landlord shall not be
entitled to any award made to Tenant for loss of business or the unamortized
cost of Tenant’s stock, trade fixtures or leasehold improvements paid by Tenant.
Tenant waives all right to any portion of the award belonging to Landlord
hereunder, and grants to Landlord all of Tenant’s rights therein. 18.4 Further
Assurance. Each party shall execute and deliver to the other all documents or
instruments that may be necessary or appropriate to effectuate the provisions
hereof.

18.5 Tenant Waivers. Tenant hereby waives any right at law or in equity which it
might have to terminate this Lease on account of any taking by condemnation or
power of eminent domain affecting the Premises, the Building and/or the Shopping
Center, including all rights under California Code of Civil Procedure Sections
1265.120 and 1265.130, and any similar or successor statues. In the event of
such a taking, the rights, duties and obligations of the parties shall be
governed solely by the applicable provisions of this Lease with respect thereto.

ARTICLE 19
SIGNS AND AUCTIONS

19.1 Signage. Tenant shall not place or allow to be placed on the exterior of
the Building or any other improvement on the Premises or any exterior door or
wall or the exterior or interior of any window of the Building or any other
improvement on the Premises or any sign, awning, canopy, marquee, advertising
matter, decoration, lettering or other thing of any kind without the prior
written consent of Landlord, which consent shall not be unreasonably withheld.
Any exterior signage shall be installed, maintained and repaired at Tenant’s
sole cost and expense. All exterior signage shall comply with all rules,
regulations, ordinances and requirements of any and all governmental agencies
having jurisdiction thereof and the terms and provisions of the REA. Except as
otherwise herein provided, Tenant shall have the right, at its sole cost and
expense, to erect and maintain within the interior of the Building all signs and
advertising matter customary or appropriate in the conduct of Tenant’s business.
Tenant shall at all times during the Term, at its sole cost and expense, keep
its window displays, signs and advertising devices adequately illuminated
continuously during such days and hours as Tenant is required to be open for
business herein and during such additional hours as Landlord may request, from
time to time. Upon the expiration or earlier termination of this Lease, all
signage affixed to the exterior of the Building shall be removed, at Tenant’s
expense, upon surrender of the Premises, and Tenant shall repair at Tenant’s
cost any damage occasioned by such removal.

19.2 Auction or Sale. Tenant shall not conduct or permit to be conducted any
sale by auction in, upon or about the Premises or the Common Areas, whether said
auction be voluntary, involuntary or pursuant to any assignment for the benefit
of creditors, or pursuant to any bankruptcy or other insolvency proceeding.

ARTICLE 20
DEFAULTS AND REMEDIES

20.1 Default Defined. The occurrence of any of the following shall constitute a
material default and breach of this Lease by Tenant:

(a)

The failure by Tenant to pay any Rent or make any other payment required to be
made by Tenant hereunder within five (5) days of the date when due;

(b)

The abandonment (which is deemed to include absence from the Premises for more
than ten (10) days while in default of any material provision of this Lease);

(c)

Tenant’s failure to adequately bond or cause to be released any mechanics’ liens
filed against the Premises within ten (10) days after the date same shall have
been filed; or

(d)

The failure by Tenant to observe or perform any other provision of this Lease to
be observed or performed by Tenant, other than those described in subparagraphs
(a), (b) and (c) above, where such failure continues for thirty (30) days after
written notice thereof by Landlord to Tenant; provided, however, that if the
nature of such default is such that it cannot reasonably be cured within such
30-day period, Tenant shall not be deemed to. be in default if Tenant shall
commence such cure within such period and thereafter diligently prosecute the
same to completion. Such 30-day notice shall be in lieu of and not in addition
to any notice required under Section 1161 of the California Code of Civil
Procedure.

20.2 Remedies; Termination. In the event of any default by Tenant as set forth
in Paragraph 20.1, then, in addition to any other remedies available to Landlord
at law, in equity or elsewhere under this Lease, all of which rights and
remedies shall be cumulative, with the exercise of one or more rights or
remedies not to impair Landlord’s right to exercise any other right or remedy
(and which may be exercised with or without legal process as then may be
provided or permitted by the laws of the state in which the Premises are
located), Landlord shall have the immediate option to terminate this Lease and
all rights of Tenant hereunder by giving Tenant written notice of such election
to terminate. If Landlord shall elect so to terminate this Lease, then Landlord
may recover from Tenant:

(a)

The worth at the time of award of any unpaid Rent and other charges which had
been earned at the time of such termination; plus

(b)

The worth at the time of award of the amount by which the unpaid Rent and other
charges 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

(c)

The worth at the time of award of the amount by which the unpaid Rent and other
charges for the balance of the term after the time of award exceeds the amount
of such rental loss that Tenant proves could reasonably be avoided; plus

d)

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 of things would be likely to result
therefrom, including attorneys’ fees and costs; and

(e)

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.

As used in subparagraphs (a) and (b) above, the “worth at the time of award” is
computed by allowing interest at the Least Rate (as defined in Paragraph 20.91
As used in subparagraph (c) above, the “worth at the time of award” is computed
by discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of award plus one percent (1%). The amount recoverable
by Landlord pursuant to subparagraph (d) above shall include, but is not limited
to, any costs or expenses incurred by Landlord in maintaining or preserving the
Premises after such default, preparing the Premises for reletting to a new
tenant, accomplishing any repairs or alterations to the Premises for the purpose
of such reletting, repairing any damage thereto occasioned by the act or
omission of Tenant, and any other costs reasonably necessary or appropriate to
relet the Premises.

20.3 Remedies; Re-entry. In the event of any such default by Tenant and
termination of this Lease by Landlord, upon thirty (30) days written notice to
Tenant, Landlord shall also have the right to re-enter the Premises and remove
all persons and property from the Premises as provided in Paragraph 21.3. Tenant
hereby waives all claims for damages that may be caused by Landlord’s reentering
and taking possession of the Premises or removing and storing the property of
Tenant as provided in Paragraph 21.3.

20.4 Remedies; Non-termination and Collection of Rent. If Landlord elects not to
terminate this Lease as provided in Paragraph 20.2. this Lease shall continue in
full force and effect In that event, Landlord may enforce all of its rights and
remedies hereunder and at law, including the remedies described in California
Civil Code Section 1951.4 and the right to recover Rent and other charges as
they come due. However, Tenant shall continue to have, the right to possession
of the Premises, and Tenant shall have the right to sublet the same with
Landlord’s written consent which consent (for the purposes of this Paragraph
20.4) shall not unreasonably be withheld. If Tenant abandons the Premises, no
re-entry or taking possession of the Premises by Landlord shall be construed as
an election to terminate this Lease, nor shall it cause a forfeiture of Rent or
other charges remaining to be paid during the balance of the term herein, unless
a written notice of such intention to terminate be given to Tenant by Landlord.

20.5 No Effect on Indemnification Obligation. Nothing in this Article 20 shall
be deemed to affect or waive Landlord’s rights to indemnification for liability
or liabilities arising prior to termination of this Lease for personal injury or
property damage under Paragraph 13.2 or any other indemnification provision
contained in this Lease.

20.6 Landlord’s Default. Landlord shall not be deemed in default hereunder
unless Tenant shall have given Landlord written notice of such default
specifying such default with particularity and Landlord shall thereupon have
thirty (30) days in which to cure any default unless such default cannot
reasonably be cured within such period, in which case Landlord shall not be in
default if it commences to cure the default within the 30-day period and
diligently pursues the completion of same. In the event of any default, Tenant
agrees that its exclusive remedy shall be an action for damages, and shall not
include a right to terminate this Lease.

20.7 Limitation on Recourse. If Landlord is in default of this Lease and, as a
consequence, Tenant recovers a money judgment against Landlord, the judgment
shall be satisfied only out of the proceeds of sale received on execution of the
judgment and levy against the right, title and interest of Landlord in the
Premises and out of rent or other income from the Premises receivable by
Landlord, or out of the consideration received by Landlord from the sale or
other disposition of all or any part of Landlord’s right, title and interest in
the Premises and from no other assets or property of Landlord.

20.8 Notice to Mortgagees and Others. Should Landlord fail to observe or perform
any of the covenants or conditions contained in this Lease, before taking any
action asserting the right to terminate this Lease (whether or not Tenant
actually has such a right under this Lease), Tenant shall give written notice to
all ground lessors, mortgagees and/or beneficiaries of deeds of trust
(collectively, “lenders”) under instruments recorded against the Premises,
setting forth the nature of Landlord’s default. Such lenders shall have a
reasonable period of time to cure the default and perform any act which may be
necessary to prevent the forfeiture of this Lease. All payments made, and all
acts performed by such lenders in order to cure, shall be effected to prevent a
forfeiture of the rights of Landlord under this Lease and a termination of this
Lease, as if the payments and acts were performed by Landlord instead of by the
lenders. If the lenders cannot reasonably take the action required to cure
Landlord’s default without terminating or foreclosing Landlord’s interest and
acquiring possession of the Premises, the time within which the default must be
cured to avoid a termination or forfeiture of the Lease shall be extended to
include the period of time reasonably required for such lenders to obtain
possession and to effect a cure with due diligence, provided such lenders give
Tenant a written undertaking to cure the default. In the absence of the lenders’
express written consent, such an undertaking by the lenders shall not be
considered an assumption by the lenders of Landlord’s other obligations under
the Lease, and Landlord shall’remain solely liable for the performance of all
terms, covenants and conditions of the Lease both prior and subsequent to the
lenders’ exercise of any right to cure or related remedy. A lender’s exercise of
any right to cure or related remedy shall not in any way constitute a cure or
waiver of a breach or default under a ground lease, note, mortgage, deed of
trust or any other instrument given as security.

20.9 Remedies; Interest and Late Charges. Any payment not made when due shall
bear interest at a rate (the “Lease Rate”) equal to ten percent (10%) per annum,
or the maximum amount allowed by law, whichever is less. Any payment of Rent not
paid when due shall be subject to a late charge of Two Hundred Fifty Dollars
($250) or five percent (5%) of the Rent then due and payable, whichever is
greater, to reimburse Landlord for its administrative costs and expenses in
notating and processing such late payment. Such late charge will not limit
Landlord’s right to recover its actual costs’ of collection or the exercise of
its remedies under this Lease, at law or in equity, in the event of a default.

ARTICLE 21
SURRENDER OF PREMISES; REMOVAL OF PROPERTY

21.1 Condition Upon Surrender. Upon the expiration or earlier termination of
this Lease, Tenant shall quit and surrender possession of the Premises, the
Building(s) and all improvements located thereon to Landlord in broom-clean
condition, free of all refuse, trash and garbage, and in as good order and
condition as the same were in at the Commencement Date or as the same thereafter
may have been improved by Landlord or Tenant, reasonable wear and tear excepted.
Tenant shall fully repair all damage to the Premises resulting from removal of
Tenant’s property. In the event of termination prior to the expiration of the
term hereof, Tenant shall remove Tenant’s property from the Premises in the
manner aforesaid within fifteen (15) days after receipt of written direction to
do so from Landlord. If Tenant shall fail to remove any of Tenant’s property as
provided herein, Landlord may, but is not obligated, at Tenant’s expense, to
remove all of Tenant’s property as provided in Paragraph 21.2.

21.2 Removal of Property Upon Re-entry. Whenever Landlord shall re-enter the
Premises as provided in this Lease, any Tenant’s property and any other personal
property of Tenant (or any person claiming through or under Tenant) not removed
by Tenant (or such person claiming through or under Tenant) upon the expiration
of the term of this Lease (or within 48 hours after a termination by-reason of
Tenant’s default) shall be considered abandoned. Landlord shall give Tenant
whatever notice may legally be required of its right to reclaim any abandoned
property (currently, California Civil Code Section 1980, et seq.) and,
thereafter, Landlord may remove any or all of such items and dispose of the same
in any manner or store the same in a public warehouse or elsewhere for the
account and at the expense and risk of Tenant. If Tenant shall fail to pay the
cost of storing any such property after it has been stored for a period of
ninety (90) days or more, then Landlord may sell any or all of such property at
public or private sale, in such manner and at such times and places as Landlord,
in its sole discretion, may deem proper, without notice to or demand upon
Tenant, for the payment of all or any part of such charges or the removal of any
such property, and shall apply the proceeds of such sale: first, to the cost and
expenses of such sale, including attorneys’ fees and costs actually incurred;
second, to the payment of the cost or charges for storing any such property;
third, to the payment of any such sums of money which may then or thereafter be
due to Landlord from Tenant under any of the terms hereof plus interest at the
Lease Rate; and fourth, the balance, if any, to Tenant.

ARTICLE 22
ATTORNEYS’ FEES

22.1 Litigation Between the Parties. In the event suit is brought to enforce or
interpret any part of this Lease, the prevailing party shall be entitled to
recover (as element of its costs of suit, and not as damages) reasonable
attorneys’ fees and costs incurred therein, and in any appeal in connection
therewith, to be fixed by the court. The* “prevailing .party” shall be entitled
to recover its costs of suit (whether or not allowable under California Code of
Civil Procedure Section 1033.5), whether or not the suit proceeds to final
judgment. No sum for attorneys’ fees and costs shall be counted in calculating
the amount of a judgment for purposes of determining whether a party is entitled
to recover its costs or attorneys’ fees and costs. The prevailing party shall
further be entitled to recover all costs and fees incurred in connection with
the enforcement of any judgment or order issued in connection with such
litigation (including attorneys’ fees, marshall fees, garnishment, third party
examination, levy fees and costs, bankruptcy-related fees and costs, and
postjudgment motions), and this provision shall not merge with such judgment and
shall survive the entry thereof Any judgment entered in such action shall
contain a specific provision providing for the recovery of such fees and costs
incurred in enforcing such judgment.

ARTICLE 23
WAIVER

The waiver by Landlord or Tenant of any breach of any term, covenant or
condition herein contained shall not be deemed to be a waiver of such term,
covenant or condition as to any subsequent breach of the same or any other term,
covenant or condition herein contained. The subsequent acceptance or payment of
Rent hereunder by Landlord or Tenant, as the case may be, shall not be deemed to
be a waiver of any preceding breach by the other of any term, covenant or
condition of this Lease (other than the failure of Tenant to pay the particular
Rent so accepted) regardless of Landlord’s or Tenant’s knowledge of such
preceding breach at the time of acceptance or payment of such Rent.

ARTICLE 24
HOLDING OVER

If Tenant holds over after the expiration of the term, with or without the
express or implied consent of Landlord, such tenancy shall be from
month-to-month only, and not a renewal hereof or an extension for any further
term, and in such case Rent shall be payable in an amount equal to twice the
amount payable by Tenant during the last month of the term hereof pursuant to
and at the times specified in Articles 4 and 5, and such month-to-month tenancy
shall be subject to every other term, covenant and agreement contained herein.
Nothing contained in this Article 24 shall be construed as a consent by Landlord
to any holding over by Tenant, or as relieving Tenant from liability for any
damages which such holding over may cause Landlord, and Landlord expressly
reserves the right to require Tenant to surrender possession of the Premises” to
Landlord as provided in Article 22 forthwith upon the expiration or other
termination of the Term.

ARTICLE 25
SUBORDINATION AND ATTORNMENT

This Lease is subject and subordinate to all ground or master leases, mortgages
and deeds of trust which now affect the Premises and the Shopping Center, and to
all renewals, modifications, consolidations, replacements and extensions
thereof. If the lessor under any such lease or the holder or holders of any such
mortgage or deed of trust shall advise Landlord that they desire or require this
Lease to be prior and superior thereto, upon written request of Landlord to
Tenant, Tenant shall promptly execute, acknowledge and deliver any and all
documents or instruments which Landlord or such lessor, holder or holders deem
necessary or desirable for purposes thereof. Landlord shall have the right to
cause this Lease to be and become and remain subject and subordinate to any and
all ground or master leases, mortgages or deeds of trust which may hereafter be
executed covering the Premises or any renewals, modifications, consolidations,
replacements or extensions thereof, for the full amount of all advances made or
to be made thereunder and without regard to the time or character of such
advances, together with interest thereon and subject to all the terms and
provisions thereof. Within ten (10) business days after Landlord’s written
request therefor, Tenant shall execute, acknowledge and deliver any and all
documents or instruments requested by Landlord, or that are necessary or proper
to assure the subordination of this Lease to any such mortgages, deeds of trust,
or leasehold estates; provided, however, that the foregoing provisions with
respect to such election of subordination by Landlord shall not be effective
unless the owner or holder of any such mortgage or deed of trust, or the lessor
under any such leasehold estate, shall execute with Tenant a nondisturbance
agreement under which such owner, holder or lessor shall agree that, in the
event of termination of such leasehold estate or upon the foreclosure of any
such mortgage or deed of trust, Tenant’s quiet enjoyment of the Premises will
not be disturbed so long as Tenant pays Rent and observes and performs all of
the obligations under this Lease to be observed and performed by Tenant.
Tenant’s failure to deliver such a document or instrument of subordination
within such ten (10) business day period shall, at the option of Landlord,
constitute a material breach or default under this Lease. Notwithstanding
anything to the contrary set forth in this Article 25. Tenant hereby attorns and
agrees to attorn to any Person purchasing or otherwise acquiring the or the
Premises at any sale or other proceeding or pursuant to the exercise of any
other rights, powers or remedies under such mortgages or deeds of trust, or
ground or underlying leases, at their option, as if such Person had been named
as Landlord herein, it being intended hereby that if this Lease is terminated or
otherwise defeated by reason of any act or actions by the owner or holder of any
such mortgage or deed of trust, or the lessor under any such leasehold estate,
then, at the option of any such Person so purchasing or otherwise acquiring the
Premises, this Lease shall continue in full force and effect.

ARTICLE 26
HEIRS AND ASSIGNS; TIME OF ESSENCE

Subject to the provisions of Article 15. this Lease is intended to and does bind
and accrue to the benefit of the heirs, executors, administrators, successors
and assigns of the parties hereto. Time is of the essence of this Lease.

ARTICLE 27
INTERPRETATION

27.1 Severability. If any term or provision of this Lease, the deletion of which
would not adversely affect the receipt of any material benefit by either party
hereunder, shall be held invalid or unenforceable to any extent, then the
remainder of this Lease shall not be affected thereby and each term and
provision of this Lease shall be valid and enforceable to the fullest extent
permitted by law.

27.2 Integration. This Lease along with any exhibits and attachments or other
documents affixed hereto or referred to herein constitutes the entire and
exclusive agreement between Landlord and Tenant relative to the Premises. All
prior or contemporaneous oral agreements and understandings relative to the
leasing of the Premises are superseded by this Lease.

27.3 Amendment. This Lease may be altered, amended or revoked only by an
instrument in writing signed by both Landlord and Tenant and making specific
reference to this lease.

27.4 Section Headings and References. The headings included in this Lease are
for convenience only, and shall not be used to interpret this Lease. References
in this Lease to Articles, Paragraphs, sections and Exhibits shall refer to the
Articles, Paragraphs, sections and Exhibits of this Lease.

27.5 Dependence of Covenants. All obligations of Landlord are dependent upon the
timely performance, without breach, by Tenant of Tenant’s material obligations
under this Lease.

27.6 Lease Draftsman. This Lease was negotiated between the parties and their
respective counsel and professional advisors, and the parties agree that such
provisions shall be interpreted without reference to the draftsman of the lease
or any portion thereof, because this Lease is a product of all their efforts.

27.7 Landlord and Tenant. The words “Landlord” and “Tenant”, as used herein,
include the plural as well as the singular, whenever appropriate. Words used in
the neuter include the masculine and feminine and words in the masculine or
feminine gender include the neuter, whenever appropriate. If more than one
person executes this Lease as Tenant, (i) each of them is jointly and severally
liable for the keeping, observing and performing of each and all of the
obligations hereunder imposed upon Tenant and (ii) the act or notice. from, or
notice or refund to, or the signature of, any one or more of them with respect
to the tenancy or this Lease shall be binding upon each and all of the persons
executing this Lease as Tenant with the same force and effect as if each and all
of them had so acted or so given or received such notice or refund or so signed.

27.8 Days, Months and Years. Unless otherwise specified, the terms “day(s)”,
“month(s)” or “year(s)” when used herein, refer to calendar day(s), month(s) or
year(s), as the case may be. Notwithstanding any provision of applicable law to
the contrary, the term “business days” as used in this Lease shall not include
Saturdays. 27.9 Term. The words “Term”, “lease term” or “term of this Lease”,
when used herein, refer to the term of this Lease and any duly exercised
extensions and renewals thereof.

27.10 Including. Use in this Lease of the words "including" or "such as", or
words of similar import, when following any general term, statement or matter
shall not be construed to limit such term, statement or matter to the specific
items mentioned, whether or not language of non-limitation such as “without
limitation” or “but not limited to”, or words of similar import, is used with
reference thereto, but rather shall refer to all other items that could
reasonably fall within the. broadest possible scope of such term, statement or
matter.

ARTICLE 28
RIGHT OF LANDLORD TO PERFORM

All covenants and agreements to be performed by Tenant under any of the terms of
this Lease shall be performed by Tenant at Tenant’s sole cost and expense and
without any abatement of Rent. If Tenant shall fail to pay any sum of money,
other than Rent, required to be paid by it hereunder, or shall fail to perform
any other act on its part to be performed hereunder, and such failure shall
continue beyond any applicable grace period set forth in Article 20, Landlord
may, but shall not be obligated so to do, and without waiving or releasing
Tenant from any obligations of Tenant, make any such payment or perform any such
other act. All sums so paid by Landlord and all necessary incidental costs,
together with interest thereon at the Lease Rate from the date of such payment
by Landlord until the date paid in full by Tenant, shall be payable to Landlord
within ten (10) days of demand. Tenant shall pay any such sums and Landlord
shall have (in addition to any other right or remedy of Landlord) the same
rights and remedies in the’event of the nonpayment thereof by Tenant as in the
case of default by Tenant in the payment of Rent.

ARTICLE 29
NOTICES

Unless otherwise specified, all notices which Landlord or Tenant may be required
or may desire to give to the other shall be in writing and shall be delivered by
personal service, or by certified mail, return receipt requested, postage
prepaid, or by overnight courier delivery service, in each case addressed to
Landlord at the address for Landlord set forth in Article 1. and to Tenant at
the address for Tenant set forth in Article 1 or, after the Rent Commencement
Date, to Tenant at the Premises whether or not Tenant has departed from,
abandoned or vacated the Premises, or addressed to such other address or
addresses as either Landlord or Tenant may from time to time designate to the
other in writing. Any such notice shall be deemed to have been given for
purposes of this Lease on the date of delivery or, if mailed, on the third
business day after the mailing thereof as hereinabove provided.

ARTICLE 30
QUIET ENJOYMENT

Landlord covenants and agrees that Tenant, upon paying the Rent and all other
charges herein provided for and observing and keeping the covenants, agreements
and conditions of this Lease on its part to be observed and kept, shall lawfully
and quietly hold, occupy and enjoy the Premises during the Term without
hindrance or molestation of anyone lawfully claiming by, through or under
Landlord, subject, however, to the matters set forth in this Lease. Landlord
shall not be liable for any acts of other tenants of the Shopping Center, their
employees, invitees or customers or any other third party.

ARTICLE 31
ESTOPPEL CERTIFICATE

At any time and from time to time upon not less than ten (10) business days’
prior notice by Landlord, Tenant shall execute, acknowledge and deliver to
Landlord a statement in writing certifying that this Lease is unmodified and in
full force and effect (or if there have been modifications, that the same are in
full force and effect as modified and stating the modifications), the dates to
which the Fixed Rent and other charges have been paid in advance, if any,
stating whether or not to the best knowledge of the signer of any such
certificate, Landlord is in default in performance of any covenant, agreement or
condition contained in this Lease and, if so, specifying each such default of
which the signer may have knowledge, and setting forth such other information as
Landlord may reasonably request, it being intended that any such statement
delivered pursuant hereto may be relied upon by any prospective purchaser of the
Premises or any interest of Landlord therein, or any prospective mortgagee
thereof or any prospective assignee of any mortgagee thereof or any prospective
master or ground lessor, If Tenant fails to return such estoppel certificate in
accordance with the above, then the copy of the estoppel certificate as
delivered to Tenant for execution shall be deemed to be correct and may be
relied upon.

ARTICLE 32
BROKERS

Tenant hereby represents and warrants to Landlord that Tenant has had no
dealings with any real estate broker, agent or finder in connection with this
Lease other than as specified, in of Article 1. and knows of no real estate
broker, agent or finder who is entitled to a commission or finder’s fee in
connection with this Lease other than as specified in Article 1. Tenant shall
indemnify, defend, protect and hold Landlord harmless from and against all
losses, liabilities, damages, claims, causes of action and expenses (including
attorneys’ fees) arising out of the falsity or Tenant’s breach of the foregoing
representation and warranty.

ARTICLE 33
MERGER

The voluntary or other surrender of this Lease by Tenant to Landlord, or a
mutual termination thereof, shall not work a merger, and shall at the option of
Landlord operate as an assignment to it of any or all subleases or subtenancies
affecting the Premises. Furthermore, no termination of any ground lease or
master lease shall work a merger and shall, at the option of the ground lessor
or master lessor, operate as an assignment of any subleases or subtenancies.

ARTICLE 34
LANDLORD RESERVATIONS

Landlord reserves the right from time to time in Landlord’s sole and absolute
discretion:

(a) To make changes to the structure, location, size and configuration of the
Common Areas, and to grant exclusive licenses and/or leases with respect to the
use of and/or occupancy of any portions of the Common Areas; provided, however,
in no event shall Landlord reduce the number of parking spaces on the Premises
or make any changes to the Common Areas which would materially impact access to
and from the Premises or visibility of the Premises without the prior written
consent of Tenant;

(b) To close temporarily any of the Common Areas for maintenance purposes or to
construct additional improvements in the Shopping Center (but not on the
Premises) or to demolish existing improvements in the Shopping Center (but not
on the Premises), so long as reasonable access to the Premises remains available
in the Common Areas;

(c) To expand or contract the Shopping Center by adding buildings and
improvements or demolishing buildings and improvements, even though such
additions or deletions may vary the availability of parking spaces within the
Common Areas;

(d) To use the Common Areas while engaged in making additional improvements,
repairs or alterations to buildings in the Shopping Center, or any portion
thereof;

(e) To establish, promulgate and enforce rules and regulations concerning the
Common Areas for the proper and efficient management, operation, maintenance and
use-thereof, or in order to comply with new or superseding governmental laws,
rules or regulations. Such Rules and Regulations may be canceled, changed,
modified and/or supplemented from time to time by Landlord. Upon dissemination
of the same to Tenant, such Rules and Regulations shall be deemed fully
incorporated herein, and a breach of the same by Tenant shall constitute a
default hereunder. Landlord shall enforce the Rules and Regulations without
discrimination and impartially among all tenants similarly affected. However, in
the event of any disagreement or inconsistency between the Rules and Regulations
and this Lease as interpreted without such incorporation, the Lease as so
interpreted shall control.

ARTICLE 35
HAZARDOUS OR INFECTIOUS SUBSTANCES

35.1 Covenants of Tenant. .Tenant represents, warrants and covenants as follows:

(a) No Hazardous Substance (as defined below) may be brought upon, used, kept or
stored in, on, about or under the Premises or anywhere else in the Shopping
Center by Tenant, its agents, representatives, employees, contractors or
invitees, without the prior written consent of Landlord (which consent Landlord
shall not unreasonably withhold as long as Tenant demonstrates to Landlord’s
satisfaction that such Hazardous Substance is necessary or useful to Tenant’s
business and will be brought upon, used, kept and stored in a manner which
complies with all Environmental, Health and Safety Requirements [as defined
below] regulating such Hazardous Substance, and with the highest standards
prevailing in the industry for such Hazardous Substance).

(b) If any Hazardous Substance is brought upon, used, kept or store in, on,
about or under the Premises or the Shopping Center by Tenant, then Tenant shall
do so in a manner which complies with all Environmental, Health and Safety
Requirements regulating such Hazardous Substance and with the highest standards
prevailing in the industry for such Hazardous Substance. Without limiting any of
the other obligations of Tenant set forth in this Lease, Tenant shall, at its
own cost and expense, procure, maintain in effect and comply with all conditions
and requirements of any and all permits, licenses and other governmental and
regulatory, approvals or authorizations required under any Environmental, Health
or Safety Requirement in connection with the bringing, use, keeping and storage
of such Hazardous Substance in, on, about or under the Premises or the Shopping
Center. Tenant shall submit to Landlord copies of all such permits, licenses, or
other governmental or regulatory approvals or authorizations within five (5)
business days of its receipt thereof.

(c) Upon written demand by Landlord in any instance in which the presence of any
Hazardous Substance on the Premises or in the Shopping Center was caused or
permitted by Tenant without Landlord’s prior written consent, Tenant shall
promptly remove and dispose of the same at Tenant’s sole cost and expense and in
compliance with all applicable Environmental, Health and Safety Requirements. If
the presence of any Hazardous Substance in, on, about or under the Premises or
the Shopping Center caused or permitted by Tenant results in any contamination
of the Premises or the Shopping Center or the surrounding environment, Tenant
shall promptly take all actions at its sole cost and expense as are necessary to
return the Premises or the Shopping Center or the surrounding environment to the
condition existing prior to such contamination (“Remediation”’): provided,
however, that Tenant shall not undertake any Remediation without first providing
Landlord with -written notice thereof and obtaining Landlord’s approval thereof.
Tenant shall carry out any Remediation in a manner which will minimize the
impact on the businesses conducted by other tenants in the Shopping Center and
in a manner which complies with all Environmental, Health and Safety
Requirements. Further, Tenant shall not undertake any Remediation, nor enter
into any settlement agreement, consent decree or other compromise with respect
to any claims relating to any Hazardous Substance in any way connected with the
Premises or the Shopping Center without first notifying Landlord of Tenant’s
intention to do so and affording Landlord ample opportunity to appear, intervene
or otherwise appropriately assert and protect Landlord’s interest with respect
thereto.

(d) Upon the expiration or early termination of the Term, Tenant shall cause to
be removed from the Premises or the Shopping Center, as appropriate, all
Hazardous Substances brought upon, used, kept, or stored in, on, about or under
the Premises or the Shopping Center by Tenant, as well as all receptacles or
containers therefor, and shall cause such Hazardous Substances and such
receptacles or containers to be stored, treated, transported and/or disposed of
in compliance with all applicable Environmental, Health and Safety Requirements.
Any Hazardous Substances or receptacles or containers therefor which Tenant
causes to be removed from the Premises or the Shopping Center shall be removed
solely by duly licensed haulers and transported to and disposed of at duly
licensed facilities for the final disposal of such Hazardous Substances or
receptacles or containers therefor reflecting the legal and proper removal,
storage, treatment, transportation and/or disposal thereof. Tenant shall, at its
sole cost and expense, repair any damage to the Premises or the Shopping Center
resulting from Tenant’s removal of such Hazardous Substances and receptacles or
containers therefor. Tenant’s obligation to pay Fixed Rent and all other charges
shall continue until such removal by Tenant has been completed to Landlord’s
satisfaction, notwithstanding the expiration or early termination of the term of
this Lease.

(e) Tenant shall notify Landlord in writing immediately upon becoming aware of:

(i) any enforcement, cleanup, remediation or other action threatened, instituted
or completed by any governmental or regulatory agency or private person with
respect to the Premises or the Shopping Center relating to Hazardous Substances;

(ii) any claim threatened or made by any person against Tenant or the Premises
or the Shopping Center for personal injury, property damage, other losses,
contribution, cost recovery, compensation or any other matter with respect to
the Premises or the (name of shopping complex) relating to •’ Hazardous
Substances;

(iii) any reports made by or to any governmental or regulatory agency with
respect to the Premises or the Shopping Center relating to Hazardous Substances,
including any complaints, notices or asserted violations in connection
therewith; and

(iv) any other information with respect to the Premises or the Shopping Center
relating to Hazardous Substances.

Further, Tenant shall also supply to Landlord as promptly as possible, and in
any event within five (5) business days after Tenant first receives or sends the
same, copies of all claims, reports, complaints, notices, warnings, asserted
violations or other documents relating in any way to the foregoing.

(f) Landlord and its agents and representatives shall have the right to
communicate, verbally or in writing, with any governmental or regulatory agency
or any environmental consultant on any matter with respect to the Premises or
the Shopping Center relating to Hazardous Substances. Landlord shall be entitled
to copies of any and all notices, inspection reports or other documents issued
by or to any such governmental or regulatory agency or consultant with respect
to the Premises or the Shopping Center relating to Hazardous Substances.

35.2 Indemnification. If Tenant breaches any of its covenants or obligations in
this Article 35. or if the presence of Hazardous Substances on the Premises or
the Shopping Center caused or permitted by Tenant results in contamination of
the Premises or the Shopping Center, or if contamination of the Premises or the
Shopping Center by Hazardous Substances otherwise occurs for which Tenant is
legally liable to Landlord for damage resulting therefrom, or if any lender or
governmental agency requires an investigation to determine whether there has
been any contamination of the Premises or the Shopping Center, then Tenant shall
indemnify, defend, protect and hold harmless” Landlord, any subsidiary or other
affiliate of Landlord, and any director, officer, shareholder, employee, agent,
attorney or partner of any of the foregoing, from and against any and all
claims, damages, penalties, fines, costs, liabilities and losses (including
diminution in value of the Premises or the Shopping Center, damages for the loss
or restriction on use of rental or usable space or of any other amenity of the
Premises or the Shopping Center, damages arising from any adverse impact on
marketing of space in the Premises or the Shopping Center, other consequential
damages and sums paid in settlement of claims, attorneys’ fees, consultants’
fees and experts’ fees) which arise during or after the Term as a result of such
contamination. This indemnification of Landlord by Tenant includes, without
limitation, costs incurred in connection with any investigation of site
conditions or any cleanup, remedial, removal or restoration work required by any
governmental or regulatory agency or any private person due to the presence of
Hazardous Substances at the Premises or the Shopping Center or in the soil or
ground water in, on, about or under the Premises or the Shopping Center.

35.3 Inspection. If Tenant breaches its covenants or obligations in this Article
35. or if the presence of Hazardous Substances on the Premises or the Shopping
Center caused or permitted by Tenant results in contamination of the Premises or
the Shopping Center, or if contamination of the Premises or the Shopping Center
by Hazardous Substances otherwise occurs for which Tenant is legally liable to
Landlord for damage resulting therefrom, or if Landlord, any lender or
governmental agency requires an investigation to determine whether there has
been any violation of this Article 35, then Landlord and its agents and
representatives shah1 have the right, at any reasonable time and from time to
time during the term of this Lease, to enter upon the Premises to” perform
monitoring, testing or other analyses, and to review any and all applicable
documents, notices, correspondence or other materials which may be in the
possession of Tenant. Further, Tenant shall be obligated to provide Landlord,
within five (5) business days of Landlord’s request therefor, with copies of all
such applicable documents which may be in Tenant’s possession but are not at the
Premises. All costs and expenses reasonably incurred by Landlord in connection
therewith shall become due and payable by Tenant upon Landlord’s presentation to
Tenant of an invoice therefor.

35.4 Definition of Hazardous Substance. As used herein, the term “Hazardous
Substance” shall mean any substance, material, waste, petroleum product,
contaminant or pollutant determined by any local, regional, state or federal
governmental agency, court, judicial or quasi-judicial body or legislative or
quasi-legislative body pursuant to any Environmental, Health and Safety
Requirement to be hazardous, toxic, infectious, radioactive, ignitable or
flammable, corrosive, persistent or bioaccumulative, explosive, reactive or
otherwise dangerous.

35.5 Definition of Environmental, Health and Safety Requirement. As used herein,
the term “Environmental, Health and Safety Requirement” shall mean any law,
statute, ordinance, rule, regulation, order, judgment or decree promulgated by
any local, regional, state or federal governmental agency, court, judicial or
quasi-judicial body or legislative or quasi-legislative body which relates
to’matters of the environment, health, industrial hygiene or safety.

35.6 Survival. The representations, warranties, covenants, agreements and
indemnities of Tenant set forth in this Article 35 shall survive the expiration
or earlier termination of this Lease and shall not be affected by any
investigation, or information obtained as a result of any investigation, by or
on behalf of Landlord or any prospective lessee.

IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
Execution Date.

LANDLORD:

ANTHONY SAMMUT and CHRISTINE SAMMUT,
Trustees of the Anthony & Christine Sammut
Revocable Trust u/t/d February 14, 1992,

By: /s/ ANTHONY SAMMUT
Anthony Sammut 3/2/98
Title: Trustee

By: /s/ CHRISTINE SAMMUT
Christine Sammut 3/2/98
Title: Trustee

TENANT:
CENTRAL COAST BANCORP

By: /s/ J. MCCARTHY
J. MCCARTHY
(typed or printed name)
Title: EVP, COO

EXHIBIT “A”
[GRAPHIC OMITTED]

EXHIBIT “B”
[GRAPHIC OMITTED]

EXHIBIT “C”
WORK LETTER

THIS WORK LETTER (this “Agreement”) is made and entered into by and between
Landlord and Tenant as of the Execution Date. The purpose of this Agreement is
to set forth the respective obligations of Landlord and Tenant with respect to
the design and construction of the Building. This Agreement shall be deemed a
part of the Lease to which it is attached. Accordingly, capitalized terms which
are used herein and defined in the Lease shall have the meaning given in the
Lease.

1. Approval of Plans for Tenant's Improvements.

1.1. Submittal of Plans.

1.1.1. Tenant's Preliminary Plans. As soon as reasonably possible after the
execution of the Lease, Tenant and Landlord shall meet to review and approve
“Tenant’s Preliminary Plans,” which shall include the following: (i) exterior
and interior elevations; (ii) a floor plan; (iii) architectural finish schedule;
(iv) reflected ceiling plans; (v) electrical, mechanical and plumbing plans; and
(vi) outline specifications. If Landlord and Tenant do not mutually agree upon
Tenant’s Preliminary Plans within ninety (90) days after the execution of the
Lease, then Landlord may terminate the Lease upon written notice to Tenant.

1.1.2. Tenant's Final Plans. Within fifteen (15) days after approval of Tenant’s
Preliminary Plans, Landlord shall cause Landlord’s architect to prepare complete
plans, specifications and working drawings which incorporate and are consistent
with Tenant’s Preliminary Plans, as previously approved by Landlord and Tenant,
and which show in detail the intended design, construction and finishing of all
portions of Tenant’s Improvements, in sufficient detail for construction
(“Tenant’s Final Plans”). If Landlord and Tenant do not mutually agree upon
Tenant’s Final Plans within thirty (30) days after the approval of Tenant’s
Preliminary Plans, then Landlord shall have the right to terminate this Lease
upon written notice to Tenant.

2. Standard of Construction. The construction of the Building shall comply with
all applicable laws, codes, rules and regulations of all governmental and quasi-
governmental authorities with jurisdiction. Landlord shall not change any
portion of the Building from the description thereof contained in Tenant’s Final
Plans, as approved by Landlord, unless Tenant first obtains Tenant’s written
approval, which approval shall not be unreasonably withheld.

3. Commencement and Performance of Tenant’s Improvements. Landlord shall
commence construction of Tenant’s Building promptly upon the approval of
Tenant’s Final Plans. Landlord shall diligently proceed with construction and
shall complete construction of Tenant’s Building as soon as is reasonably
possible. Tenant shall accept possession of the Building when the Building is
“substantially complete.” For the purposes of this Agreement, the Building shall
be deemed substantially complete when it is complete for Tenant’s use and
occupancy subject to the completion of standard punchlist items and a
certificate of occupancy or a temporary certificate of occupancy is issued.
Following the delivery of the Building to Tenant, Tenant shall install its
fixtures and equipment as is necessary to commence operation in the Premises.