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Exhibit 10.17

AGREEMENT OF LEASE

by and between

B-LINE Holdings, L.C.,

a Utah limited liability Company

as “Landlord”

and

Medallion Bank, a Utah Industrial Bank

as “Tenant”

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Section Heading

  

Page

1.

  DEFINED TERMS    1

2.

  TERM    3   2.1   Length    3   2.2   Option to Renew    3   2.3   Surrender
   3   2.4   Holdover    4

3.

  RENT    4   3.1   Amount    4   3.2   Operating Costs    4   3.3   When Due
and Payable    6   3.4   Where Payable    7   3.5   Tax on Lease    7   3.6  
Security Deposit    7   3.7   Lease Year    7   3.8   Solvency of Tenant and
Guarantors    8   3.9   Tenant’s Financial Statements    8

4.

  USE OF PERMITS    8   4.1   Permitted Uses    8   4.2   Compliance with Laws;
Conduct on the Premises    8   4.3   License    10   4.4   Compliance with ADA
   10

5.

  INSURANCE AND INDEMNIFICATION    11   5.1   Increase in Risk    11   5.2  
Insurance to be Maintained by Tenant    11   5.3   Insurance to be Maintained by
Landlord    12   5.4   Waiver of Subrogation    12   5.5   Liability of Parties
   12

6.

  IMPROVEMENTS TO PREMISES    13   6.1   Tenant Improvements    13   6.2   Cost
of Tenant Improvements    14   6.3   Default    15   6.4   Fixtures    15

7.

  MAINTENANCE AND SERVICES    16   7.1   Ordinary Services    16

 

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  7.2   Extraordinary Services    16   7.3   Interruption    16   7.4  
Maintenance by Tenant    17   7.5   Maintenance by Landlord    17

8.

  LANDLORD’S RIGHT OF ENTRY    17

9.

  FIRE AND OTHER CASUALTIES    17   9.1   General    17   9.2   Substantial
Destruction    18   9.3   Tenant’s Negligence    18

10.

  CONDEMNATION    19   10.1   Right to Award    19   10.2   Effect of
Condemnation    19   10.3   Landlords Liability    19   10.4   Condemnation
Proceedings    20

11.

  ASSIGNMENT AND SUBLETTING    20   11.1   In General    20   11.2   Consent
Standards    20

12.

  RULES AND REGULATIONS    21

13.

  SUBORDINATION AND ATTORNMENT    21   13.1   Subordination    21   13.2  
Attornment    21   13.3   Senior Holder’s Right to Subordinate    21

14.

  DEFAULT    22   14.1   Definition    22   14.2   Notice to Tenant: Grace
Period    22   14.3   Landlord’s Rights on Event of Default    23   14.4  
Landlord’s Security Interest    26   14.5   Default by Landlord    26

15.

  ESTOPPEL CERTIFICATE    27

16.

  QUIET ENJOYMENT    27

17.

  NOTICES    27

18.

  GENERAL    28   18.1   Effectiveness    28   18.2   Complete Understanding   
28   18.3   Amendment    28

 

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  18.4   Applicable law    28   18.5   Waiver    28   18.6   Time of Essence   
28   18.7   Headings    28   18.8   Construction    28   18.9   Exhibits    29  
18.10   Severability    29   18.11   Definition of “Landlord”    29   18.12  
Definition of “Tenant”    29   18.13   Recitals    29   18.14   Commissions   
29

19.

  SPECIAL TERMS    30   19.1   Option to Expand    30   19.2   FDIC Contingency
   30   19.3   Guarantee    30 EXHIBITS        A   Description of Land    32   B
  Page 1 of Drawing Showing the Premises    33   C   Plans and Specifications   
34   D   Rules and Regulations    35   E   Guarantee    39

 

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AGREEMENT OF LEASE

THIS AGREEMENT OF LEASE (“this Lease”), made this 3 day of July, 2002, by and
between B-LINE Holdings, L.C., a Utah limited liability Company (“the
Landlord”), and Medallion Bank, a Utah Industrial Bank (“the Tenant”),

WITNESSETH, THAT FOR AND IN CONSIDERATION of the mutual entry into this Lease by
the parties hereto, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged by each party hereto, the Landlord
hereby leases the Premises (as defined below) to the Tenant and the Tenant
hereby leases the Premises from the Landlord, SUBJECT TO THE OPERATION AND
EFFECT of any and all instruments and matters of record or in fact, UPON THE
TERMS AND SUBJECT TO THE CONDITIONS which are hereinafter set forth:

SECTION 1. DEFINED TERMS.

Each of the following terms, when used in this Lease, shall have the meaning set
forth in this Section 1.

Advance Rent means the amount of Twelve Thousand One Hundred Eighty Eight and
76/100 Dollars ($12,188.76), which amount is due upon Lease execution and shall
be applied as provided in accordance with subsection 3.3.1 below and in
accordance with Section 19.2., below.

Anticipated Completion Date means December 1, 2002 (see subsection 6.1).

Base Rent means an annual base rent (see subsection 3.1) which for each Lease
Year (as defined in Subsection 3.7) during the Term is in the sum set forth with
respect to such Lease Year on the schedule below:

 

LEASE YEAR

   BASE RENTAL
RATE      ANNUAL BASE RENT      MONTHLY
INSTALLMENT  

12/1/02-12/31/03

   $ 17.50      $ 48,755.04      $ 4,062.92  

1/1/04-12/31/04

   $ 18.03      $ 50,231.64      $ 4,185.97  

1/1/05-12/31/05

   $ 18.57      $ 51,736.08      $ 4,311.34  

1/1/06-12/31/06

   $ 19.15      $ 53,351.88      $ 4,445.99  

1/1/07-11/30/07

   $ 19.72      $ 54,939.96      $ 4,578.33  

Base Year means calendar year 2003 (see subsection 3.2.1).

Building means that certain 5-story office building located at 1100 East 6600
South, Salt Lake City, Utah 84121.

Commencement Date means December 1, 2002, subject to the provisions of
subsection 2.1 below.

 

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Land means the tract of land described on Exhibit A attached hereto.

Landlord means the party identified hereinabove as the Landlord, subject to the
provisions of subsection 18.11 below.

Landlord Broker means Colliers Commerce CRG (see subsection 18.14).

Notice Address means the parties’ notice addresses for purposes, of Section 17
of this Lease, which addresses are as follows:

Landlord (for notice purposes):    with a copy to:

B-LINE Holdings, L.C.

c/o Transwestern Commercial Services of Utah

1100 East 6600 South, Ste 180

Salt Lake City, Utah 84121

Tenant:

Medallion Bank

1100 East 6600 South, Ste 510

Salt Lake City, UT 84121

Premises means the space (containing approximately 2,786 rentable square feet
(2,459 usable square feet)) shown outlined on a drawing attached hereto as
Exhibit B and known as Suite 510, located on the fifth (5th) floor in the
Building.

Property means and includes collectively the Premises, the remainder of the
Building, the Land, and any other improvements thereon.

Recognised Broker means Colliers Commerce CRG (see subsection 18.14.2).

Security Deposit means the sum of No Dollars ($0.00) (see subsection 3.6).

Tenant means the party identified hereinabove as the Tenant, subject to the
provisions of subsection 18.12 below.

Tenant Broker means Colliers Commerce CRG (see subsection 18.14).

Tenant’s Percentage means the approximate and (for purposes of the provisions of
this Lease) hereby agreed upon proportion, which the net rentable space of the
Premises bears to the aggregate net rentable space within the Building, and
shall be Four and 22/100 percent (4.22%) (see subsection 3.2.1 (b)).

Tenant Improvement Allowance means $24,590.00 to be provided by Landlord to
Tenant to improve the Premises as provided for in Section 6, below.

 

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Term means the period of five (5) years, beginning on December 1, 2002, subject
to the provisions of subsection 6.1 regarding completion of the Premises (see
subsection 2.1.1).

Termination Date means November 30, 2007 (see subsection 2.1.1).

SECTION 2. TERM.

2.1. Length.

2.1.1. This Lease shall be for the Term (a) commencing on the Commencement Date
(except that if the date of such commencement is hereafter advanced or postponed
pursuant to this Lease), or by written agreement of the parties hereto, or by
operation of law, the date to which it is advanced or postponed shall be the
Commencement Date for all purposes of this Lease), and (b) terminating at 11:59
p.m., local time, on the Termination Date.

2.1.2. Confirmation of commencement and termination. The Landlord and the Tenant
shall, at the Landlord’s or Tenant’s request, after (a) the commencement of the
Term and (b) the expiration of the Term or any earlier termination of this
Lease, confirm in writing that, respectively, such commencement or such
termination has occurred, setting forth therein the Commencement Date and/or the
Termination Date.

2.2. Option to Renew. Provided Tenant is not then in default of any of the terms
and conditions of this Lease, the Tenant shall have one (1) option to extend the
Term for an additional five (5) years for such Rent, as defined below, as the
parties shall at that time negotiate. Tenant shall give Landlord at least 60 day
written notice of its desire to exercise this option. The parties shall during
the next succeeding 30 days negotiate the amount of the Rent to be paid for the
extended Term. In the event the parties are unable to negotiate such Rent for
the extended period, then the Term shall not be extended and the Lease shall
terminate as herein otherwise provided.

2.3. Surrender. The Tenant shall at its expense, at the expiration of the Term
or any earlier termination of this Lease, (a) promptly surrender to the Landlord
possession of the Premises (including any fixtures or other improvements which,
under the provisions of Section 6, are owned by the Landlord) in good order and
repair (ordinary- wear and tear excepted) and broom clean, (b) remove from the
Premises and from any other location on or about the Property where any such
items may have been affixed or placed pursuant to any provision of this Lease,
the Tenant’s signs, goods and effects and any machinery, trade fixtures and
equipment owned or leased by the Tenant and (c) repair any damage to the
Premises or the Building caused by such removal, except ordinary wear and tear.

 

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2.4. Holdover. If the Tenant continues to occupy the Premises after the
expiration of the Term or any earlier termination of this Lease without having
obtained the Landlord’s express, written consent thereto, then without altering
or impairing any of the Landlord’s rights under this Lease or applicable law,
(a) the Tenant hereby agrees to pay to the Landlord immediately on demand by the
Landlord, as Rent for the Premises, for each calendar month or portion thereof
after such expiration of the Term or such earlier termination of this Lease, as
aforesaid, until the Tenant surrenders possession of the Premises to the
Landlord, a sum equaling one hundred fifty percent (150%) of the amount of the
monthly Base Rent and Additional Rent for the last full calendar month of the
Term, and (b) the Tenant shall surrender possession of the Premises to the
Landlord immediately on the Landlord’s having demanded the same. Nothing in the
provisions of this Lease shall be deemed in any way to give the Tenant any right
to remain in possession of the Premises after such expiration or termination,
regardless of whether the Tenant has paid any such Rent to the Landlord.

SECTION 3. RENT

3.1. Amount. As rent for the Premises (all of which is called collectively
“Rent”), the Tenant shall pay to the Landlord all of the amounts set forth in
this subsection 3.1.

3.1.1. The Tenant shall pay to the Landlord the Base Rent, plus if the Term
commences on a day other than the first (1st) day of a calendar month, one
three-hundred sixty-fifth (1/365) of the sum set forth in such schedule for the
first Lease Year for each day of such calendar month falling within the Term.

3.1.2. The Tenant shall pay as additional rent (“Additional Rent”) the amount of
any and all payments, charges or other amounts which the Tenant is obligated to
pay to the Landlord under any of the provisions of this Lease, other than the
Base Rent.

3.2. Operating Costs.

3.2.1. Definitions.

(a) As used herein, the term “Operating Costs” means the actual costs incurred
by the Landlord in operating and maintaining the Property during each calendar
year falling wholly or partly within the Term. Such costs shall include, by way
of example rather than of limitation, (1) real property, front-foot benefit,
metropolitan district and other similar taxes or public or private assessments
(whether regular or special) levied against any or all of the Property;
(ii) charges or fees for, and taxes on, the furnishing of water, sewer service,
gas, fuel, electricity or other utility services to the Property; (iii) costs of
providing elevator, janitorial and trash removal service and of maintaining
grounds, common areas and mechanical systems of the Building; (iv) all other
costs of maintaining, repairing or replacing any or all of the Building or the
rest of the Property (including, by way of example rather than of limitation,
(1) the cost amortized in such calendar year of capital improvements which are
made by the Landlord in its reasonable judgment in order to reduce any of the
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the Property to comply with any applicable law or regulation which was not
applicable to the same at the entry into this Lease by the parties hereto, which
cost shall be amortized over a period selected by the Landlord in its reasonable
judgment, plus (2) interest on the unamortized balance of such cost calculated
at that rate which is one percentage point above the prime rate of interest per
annum from time to time announced by the Bank of America N. A.; (v) charges or
fees or contributions in lieu of charges or fees for any necessary governmental
permits; (vi) reasonable management fees, overhead and expenses ; (vii) premiums
for hazard, rental interruption, liability, workmen’s compensation or other
insurance for risks required or permitted by this Lease; (viii) costs arising
under service contracts with independent contractors; (ix) costs of any services
not provided by the Landlord to the Property on the date hereof but hereafter
provided by the Landlord in its prudent management of the Property; and (x) the
cost of any other items which, under generally accepted accounting principles
consistently applied from year to year with respect to the Property, constitute
operating or maintenance costs attributable to any or all of the Property.
Operating Costs shall not include (i) any deduction for depreciation of the
Property taken on the Landlord’s income tax returns; (ii) the cost of capital
improvements made to the Property (other than as described in subsection
3.2.1(a)(iv) above) if and to the extent that the expense thereof is not taken
as a deduction of an ordinary business expense on the Landlord’s federal income
tax returns, or (iii) the cost of the Landlord’s federal, state or local income
taxes.

(b) The Tenant’s Percentage shall be used for purposes of allocating the
Operating Costs to the Premises (and the rest of the net rentable spaces within
the Property) in accordance with the provisions of this subsection.

3.2.2. Portion covered by Base Rent. Included in the Base Rent is an amount (the
“Base Year Operating Costs Amount”) equaling the cost to the Landlord of
providing to or for the benefit of the Premises all of the services or other
items, the costs of which are included in the Operating Costs (excluding any of
such services or other items to be provided at the Tenant’s direct expense under
the provisions of Sections 6 and 7) for the Base Year.

3.2.3. Computation. After the end of each calendar year during the Term, the
Landlord shall compute the total of the Operating Costs incurred during such
calendar year, and shall allocate them to each separate net rentable space
within the Property in proportion to the respective percentages assigned to such
spaces; provided, however, that anything contained in the foregoing provisions
of this subsection 3.2 to the contrary notwithstanding, wherever the Tenant
and/or any other tenant of space within the Property has agreed in its lease or
otherwise to provide any item of such services partially or entirely at its own
expense, or wherever in the Landlord’s reasonable judgment any such significant
item of expense is not incurred with respect to or for the benefit of all of the
net rentable space within the Property (including, by way of example rather than
of limitation, any such expense which, by its nature, is incurred only with
respect to those spaces which are occupied), in allocating the Operating Costs
the Landlord shall make an appropriate adjustment, using generally accepted
accounting principles, so as to avoid allocating to the Tenant or to such other
tenant (as the case may be) those Operating Costs covering such

 

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services already being provided by the Tenant or by such other tenant at its own
expense, or to avoid allocating to all of the net rentable space within the
Property those Operating Costs incurred only with respect to a portion thereof.

3.2.4. Payment as Additional Rent. The Tenant shall, within fifteen (15) days
after demand therefore by the Landlord (with respect to each calendar year
during the Term), accompanied by a statement setting forth in reasonable detail
the Operating Costs for such calendar year, pay to the Landlord as Additional
Rent the amount by which (a) the Tenant’s Percentage of the Operating Costs for
such calendar year (as derived and allocated under the provisions of subsection
3.2.3) exceeds (b) the Base Year Operating Costs Amount as defined in subsection
3.2.2.

3.2.5. Proration. If only part of any calendar year falls within the Term, the
amount computed as Additional Rent for such calendar year under this subsection
shall be prorated (but the expiration of the Term before the end of a calendar
year shall not impair the Tenant’s obligation hereunder to pay such prorated
portion on demand, as aforesaid).

3.2.6. Landlord’s right to estimate. Anything contained in the foregoing
provisions of this subsection to the contrary notwithstanding, the Landlord may,
at its discretion, (a) make from time to time during the Term a reasonable
estimate of the Additional Rent which may become due under such provisions for
any calendar year, (b) require the Tenant to pay to the Landlord for each
calendar month during such year one twelfth (1/12) of the estimate of such
Additional Rent, at the time and in the manner that the Tenant is required
hereunder to pay the monthly installment of the Base Rent for such month, and
(c) at the Landlord’s reasonable discretion, increase or decrease from time to
time during such calendar year the amount initially so estimated for such
calendar year, all by giving the Tenant written notice thereof, accompanied by a
schedule setting forth in reasonable detail the expenses comprising the
Operating Costs, as so estimated. In such event, the Landlord shall cause the
actual amount of such Additional Rent to be computed and certified to the Tenant
as soon as reasonably possible after the end of such calendar year, and the
Tenant shall promptly thereafter pay to the Landlord the amount of any
deficiency or the Landlord shall credit the amount of any overpayment to the
next payment of Additional Rent, as the case may be.

3.2.7. Tenant’s right to review books and records. Within two (2) years after
the close of each calendar year and no more frequently than annually, the Tenant
and/or Tenant’s representative shall be entitled, at Tenant’s expense, at any
reasonable time during regular business hours, after giving written notice
thereof to the Landlord at least thirty (30) days prior thereto, to inspect in
the Landlord’s business office (or at such other location as they may be kept)
the Landlord’s books and records relating to the Operating Costs for the
Property.

3.3. When due and payable.

3.3.1. The Base Rent for each Lease Year shall be due and payable in monthly
installments, in advance, on the first (1st) day of each calendar month during
such Lease Year; provided, however, that Advance Rent equal to the installment
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payable for the first full calendar month of the Term (and, if the Term is
scheduled to commence on a day other than the first (1st) day of a calendar
month, that portion of the Base Rent which is payable for such month) shall be
due and payable on the full execution and delivery of this Lease.

3.3.2. Any Additional Rent accruing under any provision of this Lease shall,
except as is otherwise set forth herein, be due and payable fifteen (15) days
after the Landlord issues notice to the Tenant.

3.3.3. Each payment of Rent shall be made promptly when due, without any
deduction, recoupment or setoff whatsoever, and without demand, failing which
the Tenant shall pay to the Landlord as Additional Rent (1) a late charge
equaling ten percent (10%) of such payment and (ii) interest on the amount of
such payment at an annual rate equal to the lesser of eighteen percent (18%) or
the maximum rate allowed by law. Any payment made by the Tenant to the Landlord
on account of Rent may be credited by the Landlord to the payment of any Rent
then past due before being credited to Rent currently falling due. Any such
payment which is less than the amount of Rent then due shall constitute a
payment made on account thereof, and the parties agree that the Landlord’s
acceptance of such payment (whether or not with or accompanied by an endorsement
or statement that such lesser amount or the Landlord’s acceptance thereof
constitutes payment in full of the amount of Rent then due) shall not alter or
impair the Landlord’s rights hereunder to be paid all of such amount then due,
or in any other respect.

3.4. Where payable. The Tenant shall pay the Rent, in lawful currency of the
United States of America, to the Landlord by delivering or mailing it to the
Landlord’s payment address which is set forth hereinabove, or to such other
address or in such other manner as the Landlord from time to time specifies by
written notice to the Tenant.

3.5. Tax on Lease. If federal, state or local law now or hereafter imposes any
tax, assessment, levy or other charge (other than any income, inheritance or
estate tax) directly or indirectly upon (a) the Landlord with respect to this
Lease or the value thereof, (b) the Tenant’s use or occupancy of the Premise,
(c) the Base Rent, Additional Rent or any other sum payable under this Lease, or
(d) this transaction, then (except if and to the extent that such tax,
assessment, levy or other charge is included in Operating Costs) the Tenant
shall pay the amount thereof as Additional Rent to the Landlord upon demand,
unless the Tenant is prohibited by law from doing so, in which event the
Landlord may, at its election, terminate this Lease by giving written notice
thereof to the Tenant.

3.6. Security deposit. Intentionally omitted.

3.7. Lease Year. As used in the provisions of this Lease, the term “Lease Year”
means (a) the period commencing on the Commencement Date and terminating on the
day immediately preceding the first (1st) anniversary of the first (1st) day of
the first (1st) full calendar month during the Term, (b) each successive period
of twelve (12) calendar months thereafter during the Term and (c) the period of
fewer than twelve (12) months during which the Termination Date occurs, if the
Term shall include any such period.

 

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3.8. Solvency of Tenant and Guarantors. The Tenant represents and warrants to
the Landlord that the Tenant or the guarantor (if any) of the Tenant’s
obligations hereunder (each a “Guarantor” and collectively the “Guarantors”) is
solvent and that the financial statements of the Tenant and each Guarantor
heretofore delivered to the Landlord fairly present the financial condition of
the Tenant and/or such Guarantor and operations of the Tenant and such Guarantor
at such date and the results of the Tenant’s operations and the Guarantor’s
operations for the period then ended. No material adverse change in the
business, financial condition, prospects or operations of the Tenant or any
Guarantor has occurred since the date of such financial statements. Neither the
Tenant nor any Guarantor has any material indebtedness or material liabilities
other than as reflected on such financial statements.

3.9 Tenant’s Financial Statements. Upon written request of Landlord, Tenant will
furnish Tenant’s or Guarantor’s most recent audited financial statements
(including a balance sheet and statement of profit and loss for the preceding
fiscal year and any notes to the financial statements) to Landlord (or any
Senior Holder, if so directed by Landlord), or, if no such audited statements
have been prepared, such other financial statements (and notes to them) as may
have been prepared by an independent certified public accountant or, failing
those, Tenant’s internally prepared financial statements. If requested, Tenant
will discuss its financial statements with Landlord. Landlord will not disclose
any aspect of Tenant’s financial statements that Tenant designates to Landlord
as confidential except (1) to any Senior Holder or prospective purchasers of the
Building, (2) in litigation between Landlord and Tenant, and (3) if required by
court order.

SECTION 4. USE OF PREMISES AND THE PROPERTY.

4.1. Permitted uses. The Tenant shall occupy and use the Premises for and only
for executive office, general office or professional office purposes. Landlord
represents that Tenant’s proposed use of Premises for commercial banking is a
permitted use of the premises.

4.2. Compliance with laws; conduct on the Premises.

4.2.1. The Tenant shall at all times during the Term, at its own expense,
conform to and comply with all laws, regulations, orders and other governmental
requirements, or requirements of the insurance service office, now or hereafter
in force, affecting the use or occupancy of all or any part of the Premises. At
all times during the Term and for any period that the Tenant enters the Premises
before the Commencement Date to make its installations, the Tenant shall
indemnify the Landlord against and agrees to save the Landlord harmless from all
expense or liability incurred, or penalty imposed because of any violation of
any law, regulation, order or other governmental requirement occasioned by the
neglect or omission, or willful act of the Tenant, its customers, employees,
visitors, or invitees, independent contractors, or any person on the Premises or
in the Building by permission or holding under Tenant unless such violation
results solely from an act or omission on the part of the Landlord or an agent
or employee of the Landlord. Following notice to the Landlord, the Tenant, by
appropriate proceedings conducted with due diligence at the Tenant’s expense in
the Tenant’s name, may contest in good faith the validity or enforcement of any
applicable governmental requirement provided that the Landlord is not subjected
to any fine or penalty.

 

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4.2.2. The Tenant shall not do, or permit anything to be done, in the Premises,
which in any way will (1) obstruct or interfere with the rights of the Landlord
or of other tenants; (ii) injure or annoy the Landlord or the other tenants;
(iii) subject the Landlord to any liability for injury to persons or damage to
property; or (iv) interfere with the good order of the Building. Any expense
incurred in consequence of negligence or the willful action of the Tenant, the
Tenant’s employees, agents, servants, or invitees shall be payable to the
Landlord upon demand as Additional Rent.

4.2.3. The Tenant shall not (either with or without negligence) (a) cause or
permit the escape, disposal or release of any Hazardous Substances (as defined
below), or (b) allow the storage or use of any Hazardous Substances in any
manner not sanctioned by law or by the highest standards prevailing in the
industry for the storage and use thereof, or (c) allow any Hazardous Substances
to be brought onto the Property except to use in the ordinary course of the
Tenant’s business, and then only after written notice is given to the Landlord
of the identity thereof and a plan for the safe handling of such Hazardous
Substances is delivered to the Landlord by the Tenant and reviewed and approved
by the Landlord and, if necessary, the Landlord’s environmental consultant
(which review shall be at the Tenant’s sole cost and expense and which approval
may be granted or withheld in the sole and absolute discretion of the Landlord).
For purposes of this Lease, “Hazardous Substances” shall include without
limitation, all substances, materials, products, by-products, wastes (including
medical or other bio-hazardous wastes) or other items of any type, the
manufacture, storage, handling, disposal, or other possession of which is the
subject of any federal, state or local environmental law or regulation
(collectively “Environmental Laws”). Environmental Laws shall include, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (42 U.S.C. sections 9601 et seq.), the Resource
Conservation and Recovery Act, as Amended (42 U.S.C. sections 6901 et seq.), any
similar applicable state or local laws, and the regulations adopted under these
acts. If any lender or governmental agency ever requires testing to ascertain
whether or not there has been any release of Hazardous Substances on the
Premises by Tenant while this Lease is in effect, then the reasonable costs
thereof shall be reimbursed by the Tenant to the Landlord upon demand as
additional charges if such requirement applies to the Premises. The Tenant shall
execute certificates from time to time at the Landlord’s request concerning the
Tenant’s knowledge and belief regarding the presence of Hazardous Substances on
the Premises. The Tenant shall defend, indemnify and hold harmless the Landlord
against and from any liability, claim of liability or expense arising out of any
release of Hazardous Substances on the Premises occurring while the Tenant is in
possession thereof, or elsewhere on or about the Property if and only to the
extent caused by the Tenant, its officers, employees, agents, contractors or
invitees. The foregoing covenants shall survive the expiration or earlier
termination of this Lease.

 

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4.3. License.

4.3.1. The Landlord hereby grants to the Tenant a nonexclusive license to use
(and to permit its officers, directors, agents, employees and invitees to use in
the course of conducting business at the Premises), throughout the Term, (a) any
and all elevators, common stairways, lobbies, common hallways and other portions
of the Building which, by their nature, are manifestly designed and intended for
common use by the occupants of the Building, for pedestrian ingress and egress
to and from the Premises and for any other such manifest purposes; and (b) any
and all portions of the Land which, by their nature, are manifestly designed and
intended for common use by the occupants of the Building and of any other
improvements on the Land, for pedestrian ingress and egress to and from the
Premises and for any other such manifest purposes; and (c) any and all portions
of the Land (if any) as from time to time are designated (by striping or
otherwise) by the Landlord for such purpose, for the non-reserved parking of
automobiles; provided, however, that the Landlord expressly reserves the right
to impose fees for the use of such parking facilities if and only to the extent
that such fees are required by any governmental or quasi-governmental agency.

4.3.2. Such license shall be exercised in common with the exercise thereof by
the Landlord, any tenant or owner of the Building or any other building located
on the Land, any other person who may now or hereafter have any right to use any
or all of the areas which are the subject of such license, and their respective
officers, directors, agents, employees and invitees, and in accordance with the
Rules and Regulations pursuant to Section 12. The Landlord reserves the right,
in its sole and absolute discretion, to reconfigure, close off and otherwise
deal with all areas to which such license applies, provided, however, that the
Tenant shall at all times have reasonably convenient access to the Premises. The
foregoing license does not in any way constitute a covenant or representation
that any such facilities now exist, or shall exist at any time during the Term,
at or upon the Property.

4.4. Compliance with ADA.

4.4.1. Landlord represents that to the best of its knowledge and information the
common areas of the Building comply with the ADA.

4.4.2. In no event shall the Landlord be responsible for, and the Tenant hereby
agrees to bear the responsibility, cost and expense of (1) providing auxiliary
aids and services to accommodate specific needs for disabled employees,
licensees and invitees of the Tenant unless such accommodations are exempted
from the coverage of the ADA or the Tenant has notified the Landlord in writing
of the need for any such accommodation and the Landlord and the Tenant have
mutually agreed in writing that the Landlord shall bear the burden of providing
such accommodation, (ii) complying with the provisions of Title I of the ADA
relating to hiring and all terms, conditions and privileges of employment, and
(iii) complying with Title III of the ADA with respect to any requirement
arising out of a specific need of which: the Tenant was aware and with respect
to which the Tenant failed to provide notice to the Landlord, as required
hereunder.

 

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4.4.3. The Tenant further agrees that (1) in the event it provides any plans or
specifications for improvements, alterations or additions to the Premises
pursuant to the terms and conditions of this Lease, the Tenant shall be
obligated to cause such plans to conform to all applicable requirements of the
ADA and shall otherwise cause them to be in accordance with the agreements
contained in this subsection 4.4, (ii) the Tenant shall notify the Landlord of
any particular requirements that the Tenant may have to enable the Landlord to
meet its obligations under this subsection 4.4, and (iii) the Tenant shall bear
sole responsibility for complying with the ADA as it may relate to the Tenant’s
furniture, fixtures and equipment.

4.4.4. The Landlord and the Tenant covenant and agree to reimburse and indemnify
each other for any expenses incurred by the indemnified party due to the
indemnifying party’s failure to conform to the requirements of the ADA as agreed
to in this subsection 4.4, including, but not limited to, the cost of making any
alterations, renovations or accommodations required by the ADA, or any
governmental enforcement agency, or any court, any and all fines, civil
penalties and damages awarded resulting from a violation of the ADA and all
reasonable legal expenses incurred in defending claims made under the ADA or in
enforcing this indemnification, including but not limited to reasonable
attorney’s fees. Such indemnification shall survive the expiration or
termination of this Lease.

SECTION 5. INSURANCE AND INDEMNIFICATION

5.1. Increase in risk. The Tenant shall not do or permit to be done any act or
thing as a result of which (1) any policy of insurance of any kind covering
either any or all of the Property or covering the Landlord may become void or
suspended, or (ii) the insurance risk under any such policy would (in the
opinion of the insurer thereunder) be made greater. The Tenant shall pay as
Additional Rent the amount of any increase in any premium for such insurance
resulting from any breach of such covenant, within fifteen (15) days after the
Landlord notifies the Tenant in writing of such increase.

5.2. Insurance to be maintained by Tenant.

5.2.1. The Tenant shall maintain at its expense, throughout the Term, insurance
against loss or liability in connection with bodily injury, death, property
damage or destruction, occurring within the Premises or arising out of the use
thereof by the Tenant or its agents, employees, officers, subtenants, invitees,
visitors and guests, under one or more policies of commercial general liability
insurance having such limits as to each as are reasonably required by the
Landlord from time to time, but in any event having a combined single limit of
not less than Three Million Dollars ($3,000,000) (which limit, if such policy is
carried on a “blanket” basis, shall be written on a per location basis). Each
such policy shall (a) name as additional insureds thereunder the Landlord and
the Landlord’s directors, officers, and agents (and at the Landlord’s request,
any Senior Holder), (b) be written as primary policy, not contributing with and
not in excess of coverage which the Landlord may carry, (c) by its terms, be
cancelable only on at least thirty (30) days’ prior written notice to the
Landlord (and, at the Landlord’s request, any such Senior Holder), and (d) be
issued by an insurer of recognized responsibility licensed to issue such policy
in the state in which the Property is located.

 

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5.2.2. The Tenant, at its sole cost and expense, shall also maintain throughout
the Term a policy insuring against damage to or destruction of the Tenant’s
leasehold improvements, furniture, fixtures, equipment and other personal
property installed in or otherwise located on the Premises.

5.2.3. At least five (5) days prior to the Commencement Date, the Tenant shall
deliver to the Landlord a certificate evidencing such insurance, and at least
thirty (30) days before any such policy expires, the Tenant shall deliver to the
Landlord a certificate evidencing such replacement. On request, following an
insurable event, Landlord shall be provided an original or signed duplicate copy
of each policy of insurance required to be maintained by the Tenant hereunder.

5.3. Insurance to be maintained by Landlord. The Landlord shall maintain
throughout the Term all-risk or fire and extended coverage insurance upon the
Building in such amounts and with such insurers as the Landlord may elect, in
its reasonable judgment; but not less than “replacement cost.”

5.4. Waiver of subrogation. If either party hereto is entitled to be paid any
proceeds under any policy of insurance naming such party as an insured, on
account of any loss or damage, (or would be so entitled if such party had
maintained the insurance coverage it agrees to maintain under this Lease,
whether or not so maintained) then such party hereby releases the other party
hereto, to and only to the extent of the amount of such proceeds, from any and
all liability for such loss or damage, notwithstanding that such loss, damage or
liability may arise out of the negligent or intentionally tortuous act or
omission of the other party, its agents or employees.

5.5. Liability of parties. Except if and to the extent that such party is
released from liability to the other party hereto pursuant to the provisions of
subsection 5.4.

5.5.1. The Landlord (a) shall be responsible for, and shall defend, indemnify
and hold harmless the Tenant against and from any and all liability or claim of
liability arising out of, any injury to or death of any person or damage to any
property, occurring anywhere upon the Property, if, only if and to the extent
that such injury, death or damage is caused by the negligent or intentionally
tortious act or omission of the Landlord or its agents, officers or employees,
but (b) shall not be responsible for or be obligated to defend, indemnify or
hold harmless the Tenant against or from any liability for any such injury,
death or damage occurring anywhere upon the Property (including the Premises),
(i) by reason of the Tenant’s occupancy or use of the Premises or any other
portion of the Property unless caused by the negligent or intentionally tortious
act or omission of the Landlord, or (ii) because of fire, windstorm, act of God
or other cause unless caused by the negligent or intentionally tortious act or
omission of the Landlord; and

5.5.2. Excluding those situations in which the Landlord is obligated to
indemnify and hold harmless the Tenant under the provisions of subsection 5.5.1,
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responsible for, and shall defend, indemnify and hold harmless the Landlord
against and from, any and all liability or claim of liability arising out of
(a) the use or occupancy of, or the conduct, operation or management of the
Tenant’s business in the Premises during the Term or (b) any breach or default
by the Tenant in performing any of its obligations under the provisions of this
Lease or applicable law, or (c) any negligent, intentionally tortious or other
act or omission of the Tenant or any of its agents, contractors, servants,
employees, subtenants, licensees or invitees during the Term, or (d) any injury
to or death of any person or damage to any property occurring on the Premises
during the Term.

SECTION 6. IMPROVEMENTS TO PREMISES.

6.1. Tenant Improvements.

6.1.1. Definition. Landlord shall provide the construction material, hardware
and equipment and the labor to construct and install the improvements to the
Premises described in the Plans (as that term is hereinafter described) subject
to the conditions and limitations hereinafter contained. The material, hardware
and equipment as incorporated into the Premises pursuant to the Plans are herein
collectively referred to as the “Tenant Improvements”. Subject to the provisions
of this Section 6, Landlord shall proceed in a commercially reasonable manner to
cause the Tenant Improvements approved by Landlord to be completed.

6.1.2. Submission of Plans. On or before the date which is thirty (30) days
after the execution of this Lease (the “Plan Submittal Date”) Tenant shall
deliver to Landlord architectural construction drawings (which shall include
(I) furniture plans showing details of space occupancy; (ii) reflected ceiling
plans; (iii) partition and door location plans; (iv) electrical and telephone
plans noting any special requirements; (v) fire safety systems; (vi) detail
plans; (vii) mechanical and electrical drawings for the Premises; and
(viii) finish plans and schedules) and specifications for the Tenant
Improvements to be performed in the Premises. Such architectural drawings and
specifications shall be subject to Landlord’s prior written approval, which
approval shall not be unreasonbly withheld or delayed, within seven (7) days of
receipt by Landlord of a complete set of such architectural construction
drawings and specifications. If Landlord does not approve the same, Landlord
shall advise Tenant in writing generally of the changes required in such
architectural construction drawings and specifications so that they will meet
with Landlord’s approval. Tenant shall cause Tenant’s architects and engineers
to revise such architectural construction drawings and specifications pursuant
to Landlord’s comments and to deliver to Landlord, within seven (7) days after
receipt by Tenant of such comments, revised architectural construction drawings
and specifications noting the changes for Landlord’s approval. Landlord shall
continue to comment on such architectural construction drawings and
specifications and Tenant shall continue to revise said architectural
construction drawings and specifications are approved by Landlord. Such
architectural construction drawings and specifications when approved by Landlord
are referred to herein as the “Plans”.

6.1.3. Revisions; Permits. Tenant agrees to revise the Plans to include
sufficient detail so that Landlord can obtain a building permit for the Tenant
Improvements. Landlord shall have the right to approve or disapprove said
revised plans by written notice to Tenant within seven (7) days of receipt by
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Landlord shall advise Tenant in writing generally of the changes required in
such plans so that they meet with Landlord’s approval. Copies of the revised,
final Plans approved by the Landlord shall be attached as Exhibit C to this
Lease.

6.1.4. Timing of Delivery of Plans. Tenant represents to Landlord that Tenant
has reviewed its needs and the above-specified delivery dates with Tenant’s
architects and engineers and that Tenant has assured itself that the Plans can
be delivered as herein above required. Tenant agrees to cooperate with Tenant’s
architects and engineers as promptly as possible and in any event in sufficient
time to cause the Plans to be prepared and timely delivered as herein above
required.

6.1.5. No Liability of Landlord. Neither review nor approval by Landlord of any
of the Plans shall constitute a representation or warranty by Landlord that such
Plans either (I) are complete or suitable for their intended purpose or
(ii) comply with applicable laws, ordinances, codes and regulations, it being
expressly agreed by Tenant that Landlord assumes no responsibility or liability
whatsoever to Tenant or to any other person or entity for such completeness,
suitability or compliance.

6.2 Cost of Tenant Improvements.

6.2.1. Contract. Before commencement of any portion of the Tenant Improvements,
Landlord shall obtain a contract to perform the Tenant Improvements. Landlord
agrees to promptly give Tenant a copy of the contract.

6.2.2. Payment of the Costs of Tenant Improvements. As an inducement for Tenant
executing this Lease, Landlord hereby agrees to provide the Tenant Improvement
Allowance of TEN and 00/100 Dollars ($10.00) per usable square foot of the
Premises for a total of TWENTY-FOUR THOUSAND ONE HUNDRED EIGHTY and 00/100
($24,590.00). Such Tenant Improvement Allowance shall be used only for payment
of the following costs:

(i) The cost of preparing the Plans. The Tenant Improvement Allowance shall not
be used for payment of extraordinary design work not included within the scope
of Section 6.

(ii) The cost of other permit and other governmental fees relating to
construction of the Tenant Improvements.

(iii) The cost of construction of the Tenant Improvements, including demolition
of any prior improvements, labor, materials, contractor fees and general
conditions costs.

(iv) All other direct costs incurred in connection with the Tenant Improvements
(an example of such costs would be the extension of mechanical, heating,
ventilating and air conditioning systems and electrical distribution systems).

(v) The cost of Landlord’s preliminary and ongoing review of the Plans and all
other construction documents.

 

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Notwithstanding anything contained in this Lease to the contrary, if Tenant has
not provided Landlord with all of the above-listed items on or before the date
which is one hundred eighty (180) days following the date on which the Tenant
Improvements are Substantially Completed, Landlord shall not be obligated to pay
for such missing items.

6.2.3. Work Cost Estimate and Statement. Landlord shall select the general
contractor for the Tenant Improvements. Prior to the commencement of
construction of any of the Tenant Improvements shown on the Final Plans,
Landlord will submit to Tenant a written estimate of the cost (the “Work Cost”)
to complete the Tenant Improvements, which written estimate will be based on the
Final Plans taking into account any modifications which may be required to
reflect changes in the Final Plans required by the City or County in which the
Premises are located (the “Work Cost Estimate”). Tenant will either approve the
Work Cost Estimate or disapprove specific items and submit to Landlord revisions
to the Final Plans to reflect deletions of and/or substitutions for such
disapproved items. Upon Tenant’s approval of the Work Cost Estimate (such
approved Work Cost Estimate to be hereinafter known as the “Work Cost
Statement”), Landlord will have the right to purchase materials and to commence
the construction of the items included in the Work Cost Statement. If the total
costs reflected in the Work Cost Statement exceed the Tenant Improvement
Allowance, Tenant agrees to pay such excess, as Additional Rent, (a) fifty
percent (50%) within five (5) business days after Tenant’s approval of the Work
Cost Estimate and the remaining fifty percent (50%) upon substantial completion
of the Tenant Improvements. If, after the Final Plans have been prepared and the
Work Cost Statement has been established, Tenant requires any changes or
substitutions to Final Plans, any additional costs related thereto are to be
paid by Tenant to Landlord within five (5) business days after invoice therefor.
Any changes to the Final Plans requires Landlord’s prior written approval, which
approval shall not be unreasonably withheld. Changes to the Final Plans will, if
necessary, require the Work Cost Statement to be revised and agreed upon between
Landlord and Tenant and paid as provided for above.

6.3 Default. The failure by Tenant to pay any monies due Landlord pursuant to
this Section 6 within the time period herein stated shall be deemed an Event of
Default under the terms of this Lease for which Landlord shall be entitled to
exercise all remedies available to Landlord for nonpayment of Rent. All late
payments shall bear interest and shall be subject to a late charge pursuant to
this Lease.

6.4 Fixtures. Any and all improvements, repairs, alterations and all other
property attached to or otherwise installed as a fixture within the Premises by
the Landlord or the Tenant shall, immediately on the completion of their
installation, become the Landlord’s property without payment therefor by the
Landlord, except that any machinery, equipment or fixtures installed by the
Tenant at no expense to the Landlord and used solely in the conduct of the
Tenant’s trade or business (rather than to service the Premises or any of the
remainder of the Building or the Property generally) shall remain the Tenant’s
property, and shall be removed by the Tenant at the end of the Term (and any
damage to the Premises caused by such removal shall be repaired at the Tenant’s
expense).

 

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SECTION 7. MAINTENANCE AND SERVICES

7.1. Ordinary services. Provided there has not been an uncured Event of Default
by the Tenant hereunder, the Landlord shall provide the following services at
the Landlord’s expense (subject to the provisions of subsection 3.2) to or for
the benefit of the Premises: (a) heating and air-conditioning (during those
respective seasons of the year in which they are necessary) for the comfortable
use and occupancy of the Premises, electricity and water suitable for the use of
the Premises in accordance with the provisions of Section 4, and automatic
elevator service within the Building, all between 8 a.m. and 6 p.m., Monday
through Friday, and between 8 a.m. and 2 p.m. on Saturday of each week during
the Term (in each case except for the following holidays: New Year’s Day,
Veterans, Independence Day, Labor Day, Thanksgiving Day and Christmas Day); (b)
janitorial service and trash removal service after 5 p.m., Monday through Friday
(except for the holidays listed above) of each week during the Term; and
(c) replacement of Building standard fluorescent bulbs and incandescent bulbs.

7.2. Extraordinary services.

7.2.1. The Landlord shall not be obligated to provide to or for the benefit of
the Premises any of the services referred to in the provisions of subsection 7.1
other than during the hours referred to therein. Upon the request of the Tenant
made at least twenty-four (24) hours in advance, the Landlord shall provide such
services other than during such hours, and if the Tenant utilizes any of such
services, the Tenant shall pay to the Landlord as Additional Rent the amount
from time to time reasonably charged by the Landlord therefore, as set forth on
the written schedule of such charges most recently provided by the Landlord to
the Tenant.

7.2.2. The Tenant shall not, without first obtaining the Landlord’s written
consent thereto not to be unreasonably withheld, install within the Premises any
electrical machinery or equipment (including, by way of example rather than of
limitation, any electrical heating, cooking, water-heating, kitchen,
photocopying or refrigeration equipment, electronic data processing machinery or
punch-card machinery), which (singly) (a) uses electrical current exceeding .5
kilowatts at rate of capacity or requires a voltage of more than 120 volts,
single phase, or (b) in any way increases the amount of electricity which would
normally be consumed upon the Premises when used as general office space or
(c) would generate heat or otherwise affect the temperature or humidity within
the Premises or the Building, and shall pay periodically as Additional Rent the
additional expense incurred by the Landlord as a result thereof, including that
resulting from any installation of such equipment or from the installation of
any supplemental heating, ventilating and air-conditioning equipment (“HVAC”),
or any modification thereof. The Landlord shall have the right, at the cost of
the Tenant, to provide meters or submeters for utilities used at the Premises.
Upon the installation of such meter, the Tenant shall pay the cost of such
utilities based on the product of the volume of usage at the Premises and the
unit tariff then in effect for such usage as established by the supplying
utility.

7.3. Interruption. The Landlord shall not be liable to the Tenant for any
failure, modification or interruption of any service to be provided by the
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by reason of any (a) strike, lockout or other labor troubles, (b) governmental
restrictions or limitations, (c) failure or shortage of electrical power, gas,
water, fuel oil, or other utility or service, (d) riot, war, insurrection or
other national or local emergency, (e) accident, flood, fire or other casualty,
(f) adverse weather condition, (g) other act of God, (h) inability to obtain
necessary governmental permits or approvals, or (i) other cause similar or
dissimilar to any of the foregoing and beyond the Landlord’s reasonable control
(other than financial capability), or is’ required by applicable law (including,
by way of example rather than of limitation, any federal law or regulation
relating to the furnishing or consumption of energy or the temperature of
buildings).

7.4. Maintenance by Tenant. The Tenant shall maintain the nonstructural parts of
the interior of the Premises in good repair and condition, ordinary wear and
tear excepted.

7.5. Maintenance by Landlord. The Landlord shall maintain or cause to be
maintained in good order and repair (a) the roof, structure and exterior of the
Building, (b) any and all hallways, stairways, lobbies, elevators, heating and
air-conditioning facilities, electrical, sanitary sewer and water lines and
facilities, restroom facilities, grounds, sidewalks and parking areas (including
the removal of snow from such sidewalks and parking areas), and other common
areas, all if located within the Building or the rest of the Property but not
within the Premises, all at the Landlord’s expense (subject to Section 3
hereof). There shall be no allowance to the Tenant for a diminution of rental
value, no abatement of rent, and no liability on the part of the Landlord by
reason of inconvenience, annoyance or injury to business arising from the
Landlord, the Tenant or others making any repairs, alterations, additions or
improvements in or to any portion of the Property or the Premises, or in or to
fixtures, appurtenances or equipment thereof. The Landlord shall not be liable
for failure of the Landlord or others to make any repairs, alterations,
additions or improvements in or to any portion of the Building or of the
Premises, or in or to the fixtures, appurtenances or equipment thereof.

SECTION 8. LANDLORD’S RIGHT OF ENTRY.

The Landlord and its agents shall be entitled to enter the Premises at any time
during the Tenant’s business hours and at any other reasonable time (a) to
inspect the Premises, (b) to exhibit the Premises to any existing or prospective
purchaser, tenant or mortgagee thereof, (c) to make any alteration, improvement
or repair to the Building or the Premises, or (d) for any other purpose relating
to the operation or maintenance of the Property. The Landlord shall (unless
doing so is impractical or unreasonable because of emergency) use commercially
reasonable efforts to give the Tenant at least twenty-four (24) hours’ prior
notice of its intention to enter the Premises (which notice, notwithstanding
Section 17, need not be in writing), and use reasonable efforts to avoid thereby
materially interfering with the Tenant’s use and enjoyment thereof.

SECTION 9. FIRE AND OTHER CASUALTIES.

9.1. General. If the Premises or commercially reasonable access thereto are
damaged by fire or other casualty during the Term, the terms and conditions of
this Section 9 shall apply.

9.1.1. The Landlord shall, to the extent of the insurance proceeds available
therefor, restore the Premises or commercially reasonable access thereto with
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(taking into account the time required by the Landlord to effect a settlement
with, and to procure any insurance proceeds from, any insurer against such
casualty, but in any event within one hundred eighty (180) days after the date
of such casualty) to substantially the condition of the Premises immediately
before such casualty, and may temporarily enter and possess any or all of the
Premises for such purpose (provided, that the Landlord shall not be obligated to
repair, restore or replace any fixture, improvement, alteration, furniture or
other property owned, installed or made by the Tenant after the Commencement
Date).

9.1.2. The times for commencement and completion of any restoration pursuant to
subsection 9.1.1 shall be extended for the period (not longer than sixty [60]
days) of any delay occasioned by the Landlord in doing so arising out of any of
the causes enumerated in the provisions of subsection 7.3. If the Landlord
undertakes to restore the Premises and such restoration is not accomplished
within the said period of one hundred eighty (180) days plus the period of any
extension thereof, as aforesaid, the Tenant may terminate this Lease by giving
written notice thereof to the Landlord within thirty (30) days after the
expiration of such period, as so extended.

9.1.3. So long as the Tenant is deprived of the use of any or all of the
Premises and/or commercially reasonable access thereto on account of such
casualty, the Base Rent and any Additional Rent payable under the provisions of
subsection 3.2 shall be abated in proportion to the number of square feet of the
Premises rendered substantially unfit for occupancy by such casualty, unless,
because of any such damage, the undamaged portion of the Premises is made
materially unsuitable for use by the Tenant for the purposes set forth in the
provisions of Section  4, in which event the Base Rent and any such Additional
Rent shall be abated entirely during such period of deprivation.

9.2. Substantial destruction. Anything contained in the foregoing provisions of
this Section to the contrary notwithstanding, if during the Term the Building is
so damaged by fire or other casualty that (a)  either the Premises or (whether
or not the Premises are damaged) the Building is rendered substantially, unfit
for occupancy, as determined by the Landlord in its reasonable judgment, or (b) 
the Building is damaged to the extent that the Landlord elects to demolish the
Building (whether or not the Premises are damaged), or if any Senior Holder
requires that any or all of such insurance proceeds be used in accordance with
the requirements of its Senior Instrument, then in any such case the Landlord
may elect to terminate this Lease as of the date of such casualty, by giving
written notice thereof to the Tenant within thirty (30) days after such date. In
such event, (a)  the Tenant shall pay to the Landlord the Base Rent and any
Additional Rent payable by the Tenant hereunder and accrued through the date of
such termination, (b)  the Landlord shall repay to the Tenant any and all
prepaid Rent for periods beyond such termination, and (c) the Landlord may enter
upon and repossess the Premises without further notice.

9.3. Tenant’s Negligence. Anything contained in any provision of this Lease to
the contrary notwithstanding, if any such damage to the Premises, the Building
or both are caused by or result from the negligent or intentionally tortious act
or omission of the Tenant, those claiming under the Tenant or any of their
respective officers, employees, agents or invitees, (a) the Rent shall not be
suspended or apportioned as aforesaid, and (b) except if and to the extent that
the Tenant is released from liability therefor pursuant to the provisions of
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Landlord upon demand, as Additional Rent, the cost of (1) any repairs and
restoration made or to be made as a result of such damage, or (ii) (if the
Landlord elects not to restore the Building) any damage or loss which the
Landlord incurs as a result of such damage.

SECTION 10. CONDEMNATION.

10.1. Right to Award.

10.1.1. Landlord Entitled to Award. If any or all of the Premises or
commercially reasonable access thereto, or the remainder of the Property are
taken by the exercise of any power of eminent domain or are conveyed to or at
the direction of any governmental entity under a threat of any such taking (each
of which is hereinafter called a “Condemnation”), the Landlord shall be entitled
to collect from the condemning authority thereunder the entire amount of any
award made in any such proceeding or as consideration for such conveyance,
without deduction therefrom for any leasehold or other estate or right held by
the Tenant under this Lease.

10.2. Effect of Condemnation.

10.2.1. Termination of Lease. If (a) all of the Premises or commercially
reasonable access thereto are taken by Condemnation, or (b) any part of the
Premises is taken by Condemnation and the remainder thereof is insufficient for
the reasonable operation therein of the Tenant’s business, or (c) any of the
Building is taken by Condemnation and, in the Landlord’s reasonable opinion, it
would be impractical to restore the remainder thereof (whether or not the
Premises are affected), or (d) any of the rest of the Property is taken by
Condemnation and, in the Landlord’s reasonable opinion, it would be impractical
to continue to operate the remainder of the Property thereafter (whether or not
the Premises are affected), then, in any such event the Term shall terminate on
the date on which possession of so much of the Premises, the Building or the
rest of the Property, as the case may be, is taken by the condemning authority,
and all Rent (including, by way of example rather than of limitation, any
Additional Rent payable under the provisions of subsection 2.2), taxes and other
charges payable hereunder shall be apportioned and paid to such date.

10.2.2. Prorata Adjustment to Rent. If there is a Condemnation and the Term does
not terminate pursuant to the foregoing provisions of this subsection, the
operation and effect of this Lease shall be unaffected by such Condemnation,
except that the Base Rent and any Additional Rent payable under the provisions
of subsection 3.2 shall be reduced in proportion to the square footage of floor
area, if any, of the Premises taken by such Condemnation.

10.3. Landlord’s Liability. If there is a Condemnation, the Landlord shall have
no liability to the Tenant on account of any (a) interruption of the Tenant’s
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(b) diminution in the Tenant’s ability to use the Premises, or (c) other injury
or damage sustained by the Tenant as a result of such Condemnation.

10.4. Condemnation Proceedings. The Landlord shall be entitled to conduct any
such Condemnation proceeding and any settlement thereof by keeping Tenant
reasonably informed.

SECTION 11. ASSIGNMENT AND SUBLETTING.

11.1. In General. The Tenant hereby acknowledges that the Landlord has entered
into this Lease because of the Tenant’s financial strength, goodwill, ability
and expertise and that, accordingly, this Lease is one which is personal to the
Tenant, and agrees for itself and its successors and assigns in interest
hereunder that it will not (a) assign this Lease or any of its rights under this
Lease, as to all or any portion of the Premises or otherwise, or (b) make or
permit any voluntary or involuntary total or partial sale, lease (sublease,
assignment, conveyance, license, mortgage, pledge, encumbrance or other transfer
of any or all the Premises or the occupancy or use of any or all of the Premises
(each of which is called a “Transfer”) (including, by way of example rather than
of limitation, any sale at foreclosure or by the execution of any judgment of
any or all of the Tenant’s rights hereunder, or any Transfer by operation of
law) without first obtaining the Landlord’s express written consent thereto
(which consent (i) may not be unreasonably withheld by Landlord, and, if given,
shall not constitute a consent to any subsequent such Transfer, whether by the
person hereinabove named as “the Tenant” or by any such transferee, but
(ii) shall not be deemed to have been given by the Landlord’s acceptance of the
payment of Rent after such Transfer occurs, with or without the Landlord’s
knowledge, or by any other act or failure to act by the Landlord, other than the
giving of such express, written consent, as aforesaid). Any person to whom any
Transfer is attempted without such consent shall have no claim, right or remedy
whatsoever hereunder against the Landlord, and the Landlord shall have no duty
to recognize any person claiming under or through the same. No Transfer shall
release, alter or impair the obligations hereunder of any person constituting
the Tenant, or liable as a guarantor for the obligations of the Tenant before
such Transfer, or of any other person holding any interest or obligation
hereunder before such Transfer. For purposes of the foregoing provisions of this
subsection, a transfer, by any person or persons controlling the Tenant on the
date hereof, of such control to a person or persons not controlling the Tenant
on the date hereof shall be deemed a Transfer of this Lease, In addition to any
other right or remedy it may have hereunder, the Landlord shall be entitled to
be paid by the Tenant any and all profits and proceeds derived by the Tenant
from any Transfer made, whether with or without the Landlord’s consent.

11.2. Consent Standards. Without limiting the other instances in which it may be
reasonable for Landlord to withhold its consent to a Transfer, Landlord and
Tenant agree that it shall be reasonable for Landlord to withhold its consent in
the following instances:

(i) if at the time consent is requested or at any time prior to the granting of
consent, Tenant is in default under this Lease or would be in default under this
Lease but for the pendency of any grace or cure period under paragraph 14 below;
(ii) if, in Landlord’s reasonable judgment, the use of the Premises by the
proposed assignee or sublessee would not be comparable to the types of use by
other tenants in the Building, would entail any alterations which would lessen
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leasehold improvements in the Premises, would result in more than a reasonable
number of occupants per floor, or would require increased services by Landlord;
(iii) if, in Landlord’s reasonable judgment, the financial worth of the proposed
sublessee does not meet the credit standards applied by Landlord for other
tenants under leases with comparable terms, or the character, reputation, or
business of the proposed sublessee is not consistent with the quality of the
other tenancies in the Building; (iv) if the subletting would result in the
division of the Premises into two or more units, and (v) if the proposed
sublessee or assignee is an existing tenant of the Building whose space
requirements do not exceed the then current vacant space in the Building.

SECTION 12. RULES AND REGULATIONS.

The Landlord shall have the right to prescribe, at its sole discretion,
commercially reasonable rules and regulations (the “Rules and Regulations”)
governing the use and enjoyment of the Building and the remainder of the
Property and to modify such Rules and Regulations from time to time. The Tenant
shall adhere to the Rules and Regulations and shall cause its agents, employees,
invitees, visitors and guests to do so. A copy of the Rules and Regulations in
effect on the date hereof is attached hereto as Exhibit D. Landlord shall
enforce the Rules and Regulations on a non-discriminatory basis.

SECTION 13. SUBORDINATION AND ATTORNMENT.

13.1. Subordination. This Lease shall be subject and subordinate to the lien,
operation and effort of each of the following (each herein called a “Senior
Instrument”): (1) each first mortgage, first deed of trust, ground lease and/or
other similar first lien instrument of encumbrance now or at any time hereafter
during the Term covering any or all of the Premises or the remainder of the
Property; (ii) each renewal, modification, consolidation, replacement or
extension of any of such instruments. Such subordination shall be automatic and
shall not require any action by either party hereto.

13.2. Attornment. The Tenant shall, promptly at the request of the Landlord or
the holder of any Senior Instrument (each herein called a “Senior Holder”),
execute, acknowledge and deliver such further instrument or instruments
evidencing such subordination as the Landlord or such Senior Holder deems
necessary or desirable and (at such Senior Holder’s request) attorning to such
Senior Holder.

13.3. Senior Holder’s Right to Subordinate. Anything contained in the provisions
of this Section to the contrary notwithstanding, any Senior Holder may at any
time, by a document specifically exercising such right, subordinate the lien,
operation and/or effect of its Senior Instrument to the operation and effect of
this Lease without obtaining the Tenant’s consent thereto, by giving the Tenant
written notice thereof, in which event this Lease shall be deemed to be senior
to such Senior Instrument.

 

 

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SECTION 14. DEFAULT.

14.1. Definition. As used in the provisions of this Lease, each of the events
described in this subsection 14.1 shall constitute, and is hereinafter called,
an “Event of Default”.

14.1.1. If the Tenant fails to (a) pay any Rent or any other sum which it is
obligated to pay by any provision of this Lease, when and as due and payable
hereunder and without demand therefor, or (b) perform any of its other
obligations under the provisions of this Lease.

14.1.2. If the Tenant (a) applies for or consents to the appointment of a
receiver, trustee or liquidator of the Tenant or of all or a substantial part of
its assets, (b) files a voluntary petition in bankruptcy or admits in writing
its inability to pay its debts as they come due, (c) makes an assignment for the
benefit of its creditors, (d) files a petition or an answer seeking a
reorganization or an arrangement with creditors, or seeks to take advantage of
any insolvency law, (e) performs any other act of bankruptcy, or (f) files an
answer admitting the material allegations of a petition filed against the Tenant
in any bankruptcy, reorganization or insolvency proceeding.

14.1.3. If (a) an order, judgment or decree is entered by any court of competent
jurisdiction adjudicating the Tenant a bankrupt or an insolvent, approving a
petition seeking such a reorganization, or appointing a receiver, trustee or
liquidator of the Tenant or of all or a substantial part of its assets, or
(b) there otherwise commences as to the Tenant or any of its assets any
proceeding under any bankruptcy, reorganization, arrangement, insolvency,
readjustment, receivership or similar law, and if such order, judgment, decree
or proceeding continues unstayed for more than sixty (60) consecutive days after
any stay thereof expires.

14.1.4. If the Tenant fails to occupy and assume possession of the Premises
within sixty (60) days after the Commencement Date or to occupy the Premises
after the Commencement Date for a period exceeding sixty (60) consecutive days
except as may result from Landlord’s failure to provide the Premises to Tenant.

14.2. Notice to Tenant; Grace Period.

14.2.1. Subject to the provisions of subsections 14.2.2 and 14.2.3, on the
occurrence of an Event of Default the Landlord shall not exercise any right or
remedy on account thereof which it holds under any provision of this Lease or
applicable law unless and until the Landlord has given written notice thereof to
the Tenant and the Tenant has failed within five (5) days thereafter to cure an
Event of Default consisting of the failure to pay any monetary obligation of the
Tenant hereunder or within ten (10) days thereafter to cure such other Event of
Default; or in the event the Event of Default is not monetary and of such a
character as to require more than ten (10) days to cure, Tenant shall have
failed to commence cure within such time period, fail to use reasonable
diligence in curing such Event of Default, or fail to cure such Event of Default
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14.2.2. Anything contained in the provisions of this Lease to the contrary
notwithstanding, no notice shall be required to be given, and (even if the
Landlord gives such notice) the Tenant shall not be entitled to any grace
period, (i) in any emergency situation in which, in the Landlord’s reasonable
judgment, it is necessary for the Landlord to act to cure such Event of Default
without giving such notice, or (ii) more than twice during any twelve (12) month
period, or (iii) if the Tenant has substantially terminated or is in the process
of substantially terminating its occupancy and use of the Premises for the
purpose set forth in the provisions of Section 4, or (iv) in the case of any
Event of Default listed in the provisions of paragraphs 14.1.4, or (v) in the
case of any Event of Default consisting of the failure to pay any monetary
obligation of the Tenant hereunder or any Event of Default listed in the
provisions of subsections 14.1.2 or 14.1.3.

14.2.3. The Landlord shall be entitled immediately on the occurrence of an Event
of Default, and without waiting for any applicable grace period to elapse,
either or both to terminate this Lease pursuant to the provisions of
subparagraph 14.3.1 (c) and/or to declare the entire balance of the Rent for the
remainder of the Term to be due and payable pursuant to the provisions of
subparagraph 14.3.1 (b) (each of which actions, if taken, shall be effective
immediately upon the giving of a notice thereof to the Tenant, unless otherwise
stated in such notice); provided, however, that if and only if under the
provisions of subsection 14.2 the Tenant is entitled to any such grace period
within which to cure such Event of Default, then (i) the Landlord shall take no
other action under this subsection 14.2 on account of such Event of Default
unless it is not cured within such grace period, and (ii) if such Event of
Default is cured within such grace period, such termination and/or declaration
by the Landlord pursuant to the provisions of subsections 14.3.1(c) and/or
14.3.1(b), respectively, shall upon the curing of such Event of Default within
such grace period become null, void and of no force or effect, as if such action
had not been taken by the Landlord.

14.3. Landlord’s rights on Event of Default.

14.3.1. On the occurrence of any Event of Default, the Landlord may (subject to
the operation and effect of the provisions of subsection 14.2) take any or all
of the actions described in this subsection 14.3.1.

(a) The Landlord may reenter and repossess any or all of the Premises and any or
all improvements thereon and additions thereto.

(b) The Landlord may declare the entire balance of the Rent for the remainder of
the Term to be due and payable, and collect such balance in any manner not
inconsistent with applicable law.

(c) The Landlord may terminate this Lease by giving written notice of such
termination to the Tenant, which termination shall be effective as of the date
of such notice or any later date therefor specified by the Landlord therein
(provided, that without limiting the generality of the foregoing provisions of
this subparagraph 14.3.1(c), the Landlord shall not be deemed to have accepted
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Tenant of any or all of the Premises or the Tenant’s leasehold estate under this
Lease unless the Landlord has so advised the Tenant expressly and in writing,
regardless of whether the Landlord has reentered or relet any or all of the
Premises or exercised any or all of the Landlord’s other rights under the
provisions of this Section or applicable law).

(d) The Landlord may, in the Landlord’s own name (but either (i) as agent for
the Tenant, if this Lease has not then been terminated, or (ii) on the
Landlord’s own behalf, if this Lease has then been terminated), relet any or all
of the Premises with or without any additional premises, for any or all of the
remainder of the Term (or, if this Lease has then been terminated, for any or
all of the period which would, but for such termination, have constituted the
remainder of the Term) or for a period exceeding such remainder, on such terms
and subject to such conditions as are acceptable to the Landlord in its sole and
absolute discretion (including, by way of example rather than of limitation, the
alteration of any or all of the Premises in any manner which, in the Landlord’s
judgment, is necessary or desirable as a condition to or otherwise in connection
with such reletting, and the allowance of one or more concessions or “free-rent”
or reduced-rent periods), and collect and receive the rents therefor. Subject to
Landlord’s duty to mitigate damages, (i) the Landlord shall not have any duty or
obligation to relet any or all of the Premises as the result of any Event of
Default, or any liability to the Tenant or any other person for any failure to
do so or to collect any rent or other sum due from any such reletting; (ii) the
Tenant shall have no right in or to any surplus which may be derived by the
Landlord from any such reletting, in the event that the proceeds of such
reletting exceed any Rent, installment thereof or other sum owed by the Tenant
to the Landlord hereunder; and (iii) the Tenant’s liability hereunder shall not
be diminished or affected by any such failure to relet or the giving of any such
initial or other concessions or “free-rent” or reduced rent period in the event
of any such reletting. In such event, and regardless of the termination or
non-termination of this Lease, the Tenant shall pay to the Landlord, at the
times and in the manner specified by the provisions of Section 3, both (i) the
installments of the Base Rent and any Additional Rent accruing during such
remainder (or, if this Lease has then been terminated, damages equaling the
respective amounts of such installments of the Base Rent and any Additional Rent
which would have accrued during such remainder, had this Lease not been
terminated), less any monies received by the Landlord with respect to such
remainder from such reletting of any or all of the Premises, plus (ii) the cost
to the Landlord of any such reletting (including, by way of example rather than
of limitation, any attorneys’ fees, leasing or brokerage commissions, repair or
improvement expenses and the expense of any other actions taken in connection
with such reletting), plus (iii) any other sums for which the Tenant is liable
under the provisions of subsection 14.3.4 (and the Tenant hereby waives any and
all rights which it may have under applicable law, the exercise of which would
be inconsistent with the foregoing provisions of this subparagraph 14.3.1(d)).

(e) The Landlord may cure such Event of Default in any other manner.

(f) The Landlord may pursue any combination of such remedies and/or any other
right or remedy available to the Landlord on account of such Event of Default
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14.3.2. No such expiration or termination of this Lease, or summary proceedings,
abandonment or vacancy, shall relieve the Tenant of any of its liabilities and
obligations under this Lease (whether or not any or all of the Premises are
relet); accordingly, in any such event the Tenant shall pay to the Landlord the
Rent and all other charges required to be paid by Tenant up to the time of such
event, and thereafter the Landlord shall have the right to take any or all of
the actions described in this subsection 14.3.2.

(a) At any time after the expiration or termination of this Lease pursuant to
this Section 14, in lieu of collecting any further monthly installments, as
aforesaid, the Landlord shall be entitled to recover from the Tenant, and the
Tenant shall pay to the Landlord, on demand, damages Standard Leasing Agreement
computed in the manner set forth in clause (1) of subparagraph 14.3.2(b), minus
the amount of any such monthly installments previously recovered from the
Tenant.

(b)(i) In the case of any Event of Default under the provisions of paragraphs
14.1.2 or 14.1.3, the Landlord shall immediately and automatically, without the
necessity of notice or other action by the Landlord, become entitled to recover
from the Tenant as damages for such breach, in addition to any damages or other
payments becoming due from the Tenant under any other provision of this Lease,
an amount equaling the difference between the Base Rent and the Additional Rent
reserved in this Lease from the date of such breach to the date of the
expiration of the Term and the then-fair and reasonable rental value of the
Premises for the same period. Such damages shall become due and payable to the
Landlord immediately upon the occurrence of such Event of Default and without
regard to whether or, if so, how this Lease is terminated. Notwithstanding the
provisions of this paragraph, damages shall be limited to the extent allowed by
the laws of the State of Utah.

(ii) If and so long as the Term of this Lease continues, the Rent for the
unexpired Term of the Lease after an Event of Default under the provisions of
paragraphs 14.1.2 or 14.1.3 shall be reduced by the amount of such liquidated
damages as may be paid to the Landlord, such reduction being applied
proportionately to each installment of the Rent thereafter becoming due. During
the continuance of this Lease after such a breach and until such damages are
paid to the Landlord, the whole amount of each installment of Rent herein
reserved shall be due and payable at the time herein specified, and if, by
reason of the subsequent payment of liquidated damages, and the resulting
reduction in Rent, the Landlord receives a sum in excess of all installments, as
so reduced, becoming due after the breach and before the collection of such
damages, such excess shall be refunded upon the Landlord’s receipt of such
liquidated damages.

14.3.3. Nothing herein contained shall limit ox prejudice the Landlord’s right
to prove for and obtain as damages, by reason of such termination, an amount
equal to the maximum allowed by any statute or rule of law in effect at the time
when, and governing the proceedings in which, such damages are to be proved,
whether or not such amount be greater, equal to, or less than the amount of the
difference referred to in clause (1) of subparagraph 14.3.2(b).

 

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14.3.4. On the occurrence of an Event of Default, the Tenant shall, immediately
on its receipt of a written demand therefor from the Landlord, reimburse the
Landlord for (a) all expenses (including, by way of example rather than of
limitation, any and all repossession costs, management expenses, operating
expenses, reasonable legal expenses and attorneys’ fees) incurred by the
Landlord (i) in curing or seeking to cure any Event of Default and/or (ii) in
exercising or seeking to exercise any of the Landlord’s rights and remedies
under the provisions of this Lease and/or at law or in equity on account of any
Event of Default, and/or (iii) otherwise arising out of any Event of Default,
and/or (iv) (regardless of whether it constitutes an Event of Default) in
connection with any action, proceeding or matter of the types referred to in the
provisions of paragraphs 14.1.2 and 14.1.3, plus (b) interest on all such
expenses, at the lesser of the rate of eighteen percent (18%) per annum or the
highest rate then permitted on account thereof by applicable law, all of which
expenses and interest shall be Additional Rent and shall be payable by the
Tenant immediately on demand therefor by the Landlord.

14.3.5. Each party shall have all of its rights at law or in equity before a
court of law. Each party hereto hereby waives any right which it may otherwise
have at law or in equity to a trial by jury in connection with any suit or
proceeding at law or in equity brought by the other against the waiving party or
which otherwise relates to this Lease.

14.4. Landlord’s Security Interest. In addition to any statutory lien for rent
held by the Landlord, the Landlord shall have, and the Tenant hereby grants to
the Landlord, a continuing security interest for all Rent and other sums of
money becoming due hereunder from the Tenant, upon all of the Tenant’s
improvements, furniture, fixtures, and equipment located on the Premises, none
of which may be removed from the Premises without the Landlord’s prior, express,
written consent so long as any Rent or other such sum from time to time owed to
the Landlord hereunder remains unpaid, or any other uncured Event of Default has
occurred. On the occurrence of an Event of Default, the Landlord shall have, in
addition to any other remedies provided herein or by law, all of the rights and
remedies afforded to secured parties under the provisions of the Uniform
Commercial Code, as codified in the state in which the Property is located (“the
Code”), The Tenant shall, on its receipt of a written request therefor from the
Landlord, execute such financing statements and other instruments as are
necessary or desirable, in the Landlord’s judgment, to perfect such security
interest.

14.5. Default by Landlord. If the Landlord violates any of its obligations under
the provisions o this Lease, the Tenant may (subject to the operation and effect
of the provisions of subsection 3.3.3, requiring the Tenant to pay all Rent when
due, without deduction or set-off whatsoever) exercise any right or remedy which
it holds on account thereof hereunder, at law or in equity; provided, however,
that if any or all of the Premises is then subject to any Senior Instrument, the
Tenant shall not exercise any of its rights or remedies on account thereof
unless and until it has given written notice of its intention to do so, by
certified or registered mail, return receipt requested, to the Senior Holder
under such first Senior Instrument, specifying therein the nature of such
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discretion and without any obligation to do so, has not cured such default on
the Landlord’s behalf within sixty (60) days after such notice is given.
Notwithstanding the foregoing, in the event of an emergency or default that
materially interferes with Tenant’s business, Tenant shall not be required to
provide notice to the Senior Holder.

SECTION 15. ESTOPPEL CERTIFICATE.

The Tenant shall from time to time, within ten (10) days after being requested
to do so by the Landlord or any Senior Holder, execute, enseal, acknowledge and
deliver to the Landlord (or, at the Landlord’s request, to any existing or
prospective purchaser, transferee, assignee or Senior Holder of any or all of
the Premises, the Property, any interest therein or any of the Landlord’s rights
under this Lease) an instrument in recordable form, certifying (a) that this
Lease is unmodified and in full force and effect (or, if there has been any
modification thereof, that it is in full force and effect as so modified,
stating therein the nature of such modification); (b) as to the dates to which
the Base Rent and any Additional Rent and other charges arising hereunder have
been paid; (c) as to the amount of any prepaid Rent or any credit due to the
Tenant hereunder; (d) that the Tenant has accepted possession of the Premises,
and the date on which the Term commenced; (e) as to whether, to the actual
knowledge (without obligation to make more than commercially reasonable inquiry
of management personnel situated in the Premises), information and belief of the
signer of such certificate the Landlord or the Tenant is then in default in
performing any of its obligations hereunder (and, if so, specifying the nature
of each such default); (f) as to any other fact or condition reasonably
requested by the Landlord or such other addressee; and (g) acknowledging and
agreeing that any statement contained in such certificate may be relied upon by
the Landlord and any such other addressee.

SECTION 16. QUIET ENJOYMENT.

The Landlord hereby covenants that the Tenant, on paying the Rent and performing
the covenants set forth herein, shall peaceably and quietly hold and enjoy the
Premises throughout the Term without disturbance by the Landlord. Nothing in the
provisions of this Lease shall be deemed to impose upon the Landlord any
liability on account of any act or failure to act by any person other than the
Landlord.

SECTION 17. NOTICES.

Any notice, demand, consent, approval, request or other communication or
document to be provided hereunder to a party hereto shall be (a) in writing, and
(b) deemed to have been provided (i) forty-eight (48) hours after being sent as
certified or registered mail using the United States mails, postage prepaid,
return receipt requested, or (ii) the next business day after having been
deposited (in accordance with such courier’s requirements for delivery on such
business day) with Federal Express or another national courier service, in each
case to the Notice Address of such party or to such other address in the United
States of America as such party may designate from time to time by notice to
each other party hereto, or (iii) (if such party’s receipt thereof is
acknowledged in writing) upon being given by hand or other actual delivery to
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SECTION 18. GENERAL.

18.1. Effectiveness. This Lease shall become effective upon and only upon its
execution and delivery by each party hereto.

18.2. Complete Understanding. This Lease represents the complete understanding
between the parties hereto as to the subject matter hereof, and supersedes all
prior written or oral negotiations, representations, warranties, statements or
agreements between the parties hereto as to the same. No inducements,
representations, understandings or agreements have been made or relied upon in
the making of this Lease, except those specifically set forth in the provisions
of this Lease. Neither party hereto has any right to rely on any other prior or
contemporaneous representation made by anyone concerning this Lease which is not
set forth herein.

18.3. Amendment. This Lease may be amended by and only by an instrument executed
and delivered by each party hereto.

18.4. Applicable law. This Lease shall he given effect and construed by
application of the laws of the state of Utah and any action or proceeding
arising hereunder shall be brought in the courts of such state; provided, that
if such action or proceeding arises under the Constitution, laws or treaties of
the United States of America, or if there is a diversity of citizenship between
the parties thereto, so that it is to be brought in a United States District
Court, for the District of Utah or any successor federal court having original
jurisdiction.

18.5. Waiver. Neither the Landlord nor Tenant shall be deemed to have waived the
exercise of any right which it holds hereunder unless such waiver is made
expressly and in writing (and no delay or omission by the Landlord or Tenant in
exercising any such right shall be deemed a waiver of its future exercise). No
such waiver made as to any instance involving the exercise of any such right
shall be deemed a waiver as to any other such instance, or any other such right.
Without limiting the generality of the foregoing, no action taken or not taken
by the Landlord or Tenant under the provisions of this Section or any other
provision of this Lease (including, by way of example rather than of limitation,
the Landlord’s acceptance of the payment of Rent after the occurrence of any
Event of Default) shall operate as a waiver of any right to be paid a late
charge or of any other right or remedy which the Landlord would otherwise have
against the Tenant or Landlord, as the case may be, on account of such Event of
Default under the provisions of this Lease or applicable law.

18.6. Time of Essence. Time shall be of the essence of this Lease.

18.7. Headings. The headings of the Sections, subsections, paragraphs and
subparagraphs hereof are provided herein for and only for convenience of
reference, and shall not be considered in construing their contents.

18.8. Construction. As used herein, (a) the term “person” means a natural
person, a trustee, a corporation, a partnership and any other form of legal
entity; and (b) all references made (i) in the neuter, masculine or feminine
gender shall be deemed to have been made in all such genders, (ii) in the
singular or plural number shall be deemed to have been made, respectively, in
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singular number as well, and (iii) to any Section, subsection, subsection or
subparagraph shall, unless therein expressly indicated to the contrary, be
deemed to have been made to such Section, subsection, subsection or subparagraph
of this Lease.

18.9. Exhibits. Each writing or plat referred to herein as being attached hereto
as an exhibit or otherwise designated herein as an exhibit hereto is hereby made
a part hereof.

18.10. Severability. No determination by any court, governmental body or
otherwise that any provision of this Lease or any amendment hereof is invalid or
unenforceable in any instance shall affect the validity or enforceability of
(a) any other such provision, or (b) such provision in any circumstance not
controlled by such determination. Each such provision shall be valid and
enforceable to the fullest extent allowed by, and shall be construed wherever
possible as being consistent with, applicable law.

18.11. Definition of “Landlord”. As used herein, the term “Landlord” means the
person hereinabove named as such, and its successors and assigns (each of whom
shall have the same rights, remedies, powers, authorities and privileges as it
would have had, had it originally signed this Lease as the Landlord). No person
holding the Landlord’s interest hereunder (whether or not such person is named
as “the Landlord” herein) shall have any liability hereunder after such person
ceases to hold such interest, except for any such liability accruing while such
person holds such interest. No Senior Holder not in possession of the Premises
or the Building shall have any liability hereunder. Neither the Landlord nor any
principal of the Landlord, whether disclosed or undisclosed, nor any officer,
director, employee, agent or representative of the Landlord shall have any
personal liability under any provision of this Lease except as may arise out of
or result from the negligent acts or omissions of any such persons. If the
Landlord defaults in performing any of its obligations hereunder or otherwise,
the Tenant shall look solely to the Landlord’s equity, interest and rights in
the Property to satisfy the Tenant’s remedies on account thereof.

18.12. Definition of “Tenant”, As used herein, the term “Tenant” means each
person hereinabove named as such and such person’s heirs, personal
representatives, successors and assigns, each of whom shall have the same
obligations, liabilities, rights and privileges as it would have possessed had
it originally executed this Lease as the Tenant; provided, that no such right or
privilege shall inure to the benefit of any assignee of the Tenant, immediate or
remote, unless the assignment to such assignee is made in accordance with the
provisions of Section 11. Whenever two or more persons constitute the Tenant,
all such persons shall be jointly and severally liable for performing the
Tenant’s obligations hereunder. No officer, director, employee, agent or
representative of the Tenant shall have any personal liability under any
provision of this Lease.

18.13. Recitals. The recitals set forth at the beginning of this Lease are
hereby incorporated as a substantive part hereof.

18.14. Commissions.

18.14.1. Each party hereto hereby represents and warrants to the other that,
other than as is set forth herein below, in connection with the leasing of the
Premises hereunder, the party so representing and warranting has not dealt with
any real estate broker, agent or

 

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finder, and there is no commission, charge or other compensation due on account
thereof. Each party hereto shall defend, indemnify and hold harmless the other
against and from any liability, claim of liability or expense arising out of any
inaccuracy in such party’s representation.

18.14.2. The parties hereto hereby acknowledge and agree that, in connection
with such leasing, the Tenant has utilized the services of the Tenant Broker, if
any, and the Landlord has utilized the services of the Landlord Broker, if any.
The Landlord shall pay to the Recognized Broker any and all commissions due to
it for such services in accordance with the provisions of a written brokerage
agreement by and between the Landlord and the Recognized Broker.

SECTION 19: SPECIAL TERMS

19.1. Option to Expand. Tenant shall have a right of first offer on any space
that is adjacent to the Premises on the 5fh floor of the Building that will
become available any time during the Term other than the last 90 days of the
Term. In the event such space becomes available, Landlord shall provide Tenant
written notice of such fact and of the amount of rent it intends to charge for
such available space. Tenant shall have ten (10) days from receipt of such
notice to inform Landlord of its desire to also lease such additional space.
Absent such timely acceptance, Tenant rights to such space shall be terminated.
Tenant’s lease of such additional space shall be at such rent proposed by the
Landlord and on the same other terms and conditions as contained herein.

19.2. FDIC Contingency. Notwithstanding anything herein to the contrary, the
continuation of this Lease is subject to Tenant obtaining FDIC approval to its
operations as an industrial bank charter or Tenant’s waiver of this condition.
Tenant shall pay to Landlord upon execution an Advance Rent of $12,188.76 . In
the event Tenant does not receive FDIC approval or has waived this condition,
the Landlord shall be entitled to a fixed payment of $20,000.00 as its sole and
exclusive remedy as damages, and the remainder of this Lease shall be
automatically terminated and of no further force or effect. Notwithstanding the
above, in the event Tenant gives Landlord notice that it has not received FDIC
approval by September 15, 2002, the Landlord shall retain the Advance Rent as
its sole and exclusive remedy as damages, and the remainder of this Lease shall
be automatically terminated and of no further force or effect.

In the event Tenant receives FDIC approval or of Tenant’s waiver of this
condition, then Landlord shall apply the Advanced Rent to the first three months
Base Rent due under the Lease and the Lease shall continue as herein provided.

19.3. Guarantee. The granting and entering into of a Guarantee attached hereto
as Exhibit E is a condition to Landlord’s performance hereunder.

(the remainder of this page is deliberately blank)

 

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IN WITNESS WHEREOF, each party hereto has executed and unsealed this Lease or
caused it to be executed and unsealed on its behalf by its duly authorized
representatives, the day and year first above written.

 

LANDLORD: B-Line Holdings, L.C. By:   LOGO [g643263dsp013a.jpg] Its:   Manager
TENANT: Medallion Bank, a Utah Industrial Bank By:   LOGO [g643263dsp013b.jpg]
Its:  

President

 

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EXHIBIT A

Description of the Land

BEGINNING at a point on the South line of 6600 South Street said point being
North, 41.526 feet and East 2756.412 feet from the West quarter corner of
Section 20, Township 2 South, Range 1 East, Salt Lake Base and Meridian; said
point also being South 38.856 feet and East 1048.719 feet from Salt Lake County
Monument at the intersection of 900 East and 6600 South Street; running thence
North 89°56’ 15” East, 434.972 feet along said South line of 6600 South Street;
thence South 30°03’39” East 170.636 feet; thence South 51°31 ‘38” East 201.066
feet to the North line of Interstate 215; thence South 89°04’59” West 203.876
feet along said North line to a R/W Marker, thence North 82°30’26” West 267.286
feet along said North line to a R/W Marker, thence North 76°06’26” West 213.220
feet along said North line to a R/W Marker, thence North 00° 10’42” East 197.390
feet to point of BEGINNING.

 

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EXHIBIT B

Page 1 of 1 Drawing Showing the Premises

 

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LOGO [g643263dsp014.jpg]

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EXHIBIT C

Plans and Specifications (to be inserted)

 

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EXHIBIT D

Rules and Regulations

 

1.

The sidewalks, lobbies, passages, elevators and stairways shall not be
obstructed by the Tenant or used by the Tenant for any purpose other than
ingress and egress from and to the Premises. The Landlord shall in all cases
retain the right to control or prevent access to the Property by any person
whose presence, in the Landlord’s judgment, would be prejudicial to the safety,
peace, character or reputation of the Building or of any tenant of the Property.

 

2.

The toilet rooms, water closets, sinks, faucets, plumbing and other service
apparatus of any kind shall not be used by the Tenant for any purpose other than
those for which they were installed, and no sweepings, rubbish, rags, ashes,
chemicals or other matter shall be placed therein or used in connection
therewith by the Tenant. Any damages resulting from the misuse of the fixtures
shall be the responsibility of the Tenant. The Tenant shall not place, store or
leave any item in the lobbies, passages, elevators or stairways of the Building
or on or about any part of the Property other than the Premises. Doormats or
walk off mats are not to be placed outside the entry door of the Premises.

 

3.

No skylight, window, door or transom of the Building shall be covered or
obstructed by the Tenant, and no window shade, blind, curtain, screen, storm
window, awning or other material shall be installed or placed on any window or
in any window space, except as approved in writing by the Landlord. If the
Landlord has installed or hereafter installs any shade, blind or curtain in the
Premises, the Tenant shall not remove it without first obtaining the Landlord’s
written consent.

 

4.

No sign, lettering, insignia, advertisement, notice or other thing shall be
inscribed, painted, installed, erected or placed in any portion of the Premises
or other part of the exterior or interior of the Building or on or about any
part of the Property, unless first approved in writing by the Landlord. Names on
suite entrances shall be provided by and only by the Landlord at the Tenant’s
expense.

 

5.

The Tenant shall not place any other or additional lock upon any door within the
Premises or elsewhere upon the Property, and shall surrender all keys for all
such locks at the end of the Term. The Landlord shall provide the Tenant with
one set of keys to the Premises when the Tenant assumes possession thereof. All
locks shall be operable by the Building grand master key.

 

6.

The Tenant shall not do or permit to be done anything which obstructs or
interferes with the rights of any other tenant of the Property. The Tenant shall
not keep anywhere within the Property any matter having an offensive odor, or
any kerosene, gasoline, benzene, camphene, fuel or other explosive or flammable
material. No bicycle or vehicle, or bird, fish or other animal shall be brought
into or kept in or about the Premises. The Tenant shall not permit the
generation of any vibration, light or noise, mechanical or otherwise, which is
capable of being felt, seen or heard (as the case may be) outside of the
Premises.

 

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7.

So that the Premises may be kept in a good state of preservation and
cleanliness, the Tenant shall, while in possession of the Premises, permit only
the Landlord’s employees and contractors to clean the Premises unless prior
thereto the Landlord otherwise consents in writing. The Tenant shall see each
day that the windows are closed and the doors securely locked before leaving the
Premises, and that all lights and standard office equipment within the Premises
are turned off.

 

8.

If the Tenant desires to install signaling, telegraphic, telephonic, protective
alarm or other wires, apparatus or devices within the Premises, the Landlord
shall direct where and how they are to be installed and, except as so directed,
no installation, boring or cutting shall be permitted. The Landlord shall have
the right (a) to prevent or interrupt the transmission of excessive, dangerous
or annoying current of electricity into or through the Building or the Premises,
(b) to require the changing of wiring connections or layout at the Tenant’s
expense, to the extent that the Landlord may deem necessary, (c) to require
compliance with such reasonable rules as the Landlord may establish relating
thereto, and (d) in the event of noncompliance with such requirements or rules,
immediately to cut wiring or do whatever else it considers necessary to remove
the danger, annoyance or electrical interference with apparatus in any part of
the Building. Each wire installed by the Tenant must be clearly tagged at each
distributing board and junction box and elsewhere where required by the
Landlord, with the number of the office to which such wire leads and the purpose
for which it is used, together with the name of the Tenant or other concern, if
any, operating or using it.

 

9.

All deliveries or moving of furniture, equipment, supplies, etc., into or out of
the Building are to be done Monday through Friday, 8 a.m. to 4 p.m., only. All
such deliveries are to use the designated freight elevator only. Passenger
elevators and/or the main building lobby are not to be used for deliveries
unless otherwise directed by security or building management personnel. No
furniture, equipment, bulk items or other items which might, in the Landlord’s
judgment, interfere with the orderly operation of the Building, may be received
in or removed from the Building, or carried up or down in the elevators or
stairways, except during such hours as are designated above for such purpose by
the Landlord, and, if necessary in the Landlord’s opinion, under the direction
and control of the Landlord (at the expense of the Tenant) and only after the
Tenant gives notice thereof to the Landlord. The Landlord shall have the
exclusive right to prescribe the method and manner in which any such item is
brought into or taken out of the Building, and the right to exclude from the
Building any such items which may create a hazard (whether structural or
otherwise) and/or to require any such item to be located at a designated place
in the Premises. The Tenant shall not place any weight anywhere beyond the safe
carrying capacity of the Building. The cost of repairing any damage to the
Building or any other part of the Property caused by taking any such item in or
out of the Premises, or any damage caused while any such item is in the Premises
or the rest of the Building, shall be borne by the Tenant.

 

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10.

Without the Landlord’s prior written consent, (a) nothing shall be fastened to
(and no hole shall be drilled, or nail or screw driven into) any wall or
partition, (b) no wall or partition shall be painted, papered or otherwise
covered or moved in any way or marked or broken, (c) no connection shall be made
to any electrical wire for running any fan, motor or other apparatus, device or
equipment, (d) no machinery of any kind other than customary small business
machinery shall be allowed in the Premises, and (e) no mechanic or service
technician, other than one employed by the Landlord, shall be allowed to work on
or install any item affecting the Building or the structures or systems thereof.
If the Landlord shall consent thereto, all such work shall be performed in
accordance with the accepted Building standard methods and procedures.

 

11.

The Tenant shall have access to the Premises at all reasonable times. The
Landlord shall in no event be responsible for admitting or excluding any person
from the Premises. In case of invasion, hostile attack, insurrection, mob
violence, riot, public excitement or other commotion, explosion, fire or any
casualty, the Landlord shall have the right, but not the obligation, to bar or
limit access to the Building to protect the safety of occupants of the Property,
or any property within the Property.

 

12.

The Landlord reserves the right to inspect all objects and matters to be brought
into the Building and to exclude from the Building all objects and matters which
violate any of these Rules and Regulations or the Lease of which these Rules and
Regulations are a part. The Landlord may require any person leaving the Building
with any package or other object or matter to submit a pass listing such package
or object or matter from the Tenant from whose premises the package is being
removed. Establishment or enforcement of this requirement shall not impose any
responsibility on the Landlord for the protection of any tenant against the
removal of property from its premises. The Landlord shall in no way be liable to
the Tenant for damages or loss wising from the admission, exclusion or ejection
of any person to or from the Premises or the Building.

 

13.

All persons entering and/or leaving the Building may be required to sign a
register. The Landlord will furnish passes to persons for whom the Tenant
requests such passes in writing. The Tenant shall be responsible for all persons
for whom the Tenant requests such passes and shall be liable to the Landlord for
all acts or omissions of such persons.

 

14.

Canvassing, soliciting and peddling in the Building are prohibited and the
Tenant shall cooperate to prevent the same.

 

15.

There shall not be used any hand truck, cart, etc., except those equipped with
rubber tires, side guards and other such safeguards as the Landlord may require.

 

16.

The Tenant and its employees are obligated to follow the provisions of the
Building fire safety plan and to participate in any fire drills, training
sessions or any other activities deemed by the Landlord to be necessary to the
success of such plan.

 

17.

The use of any room within the Building as lodging, sleeping quarters or for any
immoral or illegal purpose is strictly prohibited at all times.

 

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18.

The Tenant shall keep the windows and doors of the Premises (including those
opening on corridors and all doors between rooms entitled to receive heating or
air conditioning service and rooms not entitled to receive such service), closed
while the heating or air conditioning system is operating, in order to minimize
the energy used by, and to conserve the effectiveness of, such systems. The
Tenant shall comply with all reasonable Rules and Regulations from time to time
promulgated by the Landlord with respect to such systems or their use.

 

19.

No smoking activities (including, but not limited to, smoking or carrying a
lighted cigar, cigarette or pipe or using smokeless tobacco) are permitted
anywhere in the Building, including, without limitation, the Premises, common
areas, hallways, restrooms or other public areas.

 

20.

Nothing in these Rules and Regulations shall give any Tenant any right or claim
against the Landlord or any other person if the Landlord does not enforce any of
them against any other tenant or person (whether or not the Landlord has the
right to enforce them against such tenant or person), and no such non
enforcement with respect to any tenant shall constitute a waiver of the right to
enforce them as to the Tenant or any other tenant or person.

 

21.

The Landlord shall have the right to rescind, suspend or modify the Rules and
Regulations and to promulgate such other Rules or Regulations as, in the
Landlord’s reasonable judgment, are from time to time necessary or desirable for
the reputation, safety, care, maintenance, operation and/or cleanliness of the
Building, or for the preservation of good order therein. Upon the Tenant’s
having been given notice of the taking of any such any action, the Rules and
Regulations as so rescinded, suspended, modified or promulgated shall have the
same force and effect as if in effect at the time at which the Tenant’s Lease
was entered into (except that nothing in the Rules and Regulations shall be
deemed in any way to alter or impair any provision of such Lease and in the
event of any conflict between the terms of the Lease and the Rules and
Regulations, the Lease terms shall govern). Subject to the specific provisions
of each tenant’s lease, the Landlord agrees to apply and enforce the Rules and
Regulations in a uniform and reasonable manner, taking into account the nature,
extent and frequency of the violations thereof by the respective tenants of the
Property.

 

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EXHIBIT E

GUARANTY

1. GUARANTEE. To induce B-LINE HOLDINGS, L.C., a Utah limited liability company
(“Landlord”) to enter into that certain Agreement of Lease (the “Lease”) dated
July 3, 2002, between Landlord and MEDALLION BANK, a Utah Industrial Bank (the
“Tenant”), for property located in the building generally located at 1100 East
6600 South, Salt Lake City Utah, the undersigned, MEDALLION FINANCIAL CORP., a
Delaware corporation (“Guarantor”) hereby guarantees and promises, on demand
(i) to pay to the Landlord the amount specified in 2. below, in accordance with
Section 19.2 in the Lease.

2. AMOUNT OF GUARANTEE. This guaranty is for the fixed payment of Twenty
Thousand Dollars ($20,000.00) referred to in Section 19.2 in the Lease.

3. OBLIGATIONS JOINT AND SEVERAL. The obligations of the Guarantor hereunder are
joint and several, and are independent of the obligations of Tenant. Separate
action or actions may be brought and prosecuted against Guarantor, whether or
not action is brought against Tenant and whether or not Tenant be joined in any
such action or actions and if and to the extent such a waiver is valid Guarantor
waive the benefit of any statute of limitations affecting their liability
hereunder or the enforcement thereof. Guarantor shall have the benefit of any
and all defenses, claims and counterclaims available to Tenant, other than any
defense that may be raised by reason of Tenant’s bankruptcy.

4. ASSIGNMENT OF GUARANTY. Landlord may without notice assign the Lease or this
guaranty in whole or in part. Guarantor shall not delegate its obligations under
this Guaranty without the prior written consent of Landlord.

5. WAIVERS. Guarantor waive any right to require Landlord to: (a) proceed
against Tenant (b) proceed against or exhaust any security held from Tenant
(c) pursue any other remedy in Landlord’s power whatsoever. Before commencing
any action to enforce this Guaranty, the Tenant shall first be provided notice
of any default and opportunity to cure as provided in the Lease. In the event
the Tenant fails to cure such default as provided, Landlord shall provide the
Guarantor written notice sent by registered or certified mail, postage prepaid,
return receipt requested, or by overnight mail delivery service, and the
Guarantor shall then have ten (10) days after notice to cure such default before
the Landlord shall take any action to enforce this Guaranty.

6. VENUE. The parties mutually acknowledge and agree that this Guaranty shall be
construed and enforced in accordance with the law of the State of Utah. The
parties mutually consent and submit to the jurisdiction of the federal and/or
state court located in Salt Lake County, Utah and any action or suit concerning
this Guaranty or related matters shall only be brought by the parties in federal
or state court with appropriate subject matter jurisdiction sitting in Salt Lake
County, Utah. The parties

 

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mutually acknowledge and agree that they shall not raise in connection
therewith, and hereby waive, any defenses based upon venue, inconvenience of
forum or lack of personal jurisdiction in any action or suit brought in
accordance with the foregoing. The parties acknowledge that they have read and
understand this clause and agree willingly to its terms.

 

  7.

INUREMENT. This Guaranty shall inure to the benefit of Landlord, its successors
and assigns, and shall be binding upon the heirs, personal representatives and
assigns of the Guarantor.

 

  8.

ATTORNEY FEES. Guarantor shall pay to Landlord all of Landlord’s costs,
including reasonable attorney fees, to collect the amount being guaranteed.

INTENDING TO BE LEGALLY BOUND the undersigned Guarantor has executed this
Guaranty this 3rd, day of July, 2002.

 

MEDALLION FINANCIAL CORP. By:   LOGO [g643263dsp015.jpg] Its:   President

 

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ADDENDUM TO LEASE

THIS ADDENDUM TO LEASE (“Addendum”) is attached to and made a part of that
certain Agreement of Lease (“Lease”) dated July 3, 2002, by and between B-Line
Holdings, L.C., a Utah limited liability company (“Landlord”) and Medallion
Bank, a Utah industrial bank for certain premises located at 6600 South 1100
East, Salt Lake City, Utah 84121 as more particularly described in the Lease. In
the event of any contradiction or inconsistency between the terms and provisions
of this Addendum and the terms and provisions of the Lease to which it is
attached, the terms and provisions of this Addendum shall control. All defined
terms not specifically defined in this Addendum shall be given the same meaning
as the defined terms in the Lease.

1. Landlord represents to Tenant that with respect to all provisions of the
Lease, all of the area in the Building, including the Premises, is and shall be
measured, and the calculation of rentable space, usable space and Tenant’s
Percentage of Operating Costs is and shall be determined, using a formula which
is applied to all areas of the Building and all Tenants on a consistent and
uniform basis.

2. Notwithstanding any other provision of this Lease to the contrary, Operating
Costs shall not include: (i) expenses for any capital improvements made to the
Property which do not result in a reduction of the Operating Expenses;
(ii) expenses for painting, redecorating or other work which Landlord performs
for any other tenant of the Property; (iii) expenses for repairs or other work
to the extent Landlord is reimbursed by insurance; (iv) expenses incurred in
leasing or procuring new tenants, including brokerage fees; (v) legal expenses
incurred in enforcing the terms of any lease; (vi) interest on amortization
payments on any mortgage; (vii) costs to repair or maintenance of common areas
due to negligence or willful acts of Landlord, other tenants or their respective
officers, directors, employees, agents and visitors; (viii) costs associated
with repairing the defective construction of the Buildings and other
improvements located at the Property; (ix) taxes on Landlord’s business (such as
income, excess profits, franchise, capital stock, estate, inheritance); (x)
expenses paid directly by a Tenant for any reason including, without limitation,
excessive utility use; (xi) services or benefits or both provided to some but
not all tenants of the Property; (xii) all costs, fines, and the like due to
Landlord’s violation of, or failure to comply with, any governmental rules or
authorities; and (xiii) expenses that are duplicative. Additionally, Landlord
covenants that it will conduct the operation, maintenance and repair of the
Building and the Property in an efficient and economical manner.

3. Landlord agrees to keep at the Building or at its principal office at least
36 months after the expiration of each calendar year, accurate books and records
of all expenses and costs related to the Operating Costs, all of which shall be
kept in accordance with generally acceptable accounting principles. Tenant
and/or Tenant’s agents shall have the right from time to time upon reasonable
advanced notice to inspect and audit all such books and records to determine the
accuracy thereof. If such audit discloses that the statement of Operating Costs
is inaccurate to the extent of five percent (5%) or more, Landlord shall
promptly pay to Tenant, within 10 days of written notice, the reasonable costs
of such audit in addition to any deficiency.

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4. If Tenant exercises its option to renew (“Option”), Base Rent during the term
of the Option period shall be based on “Fair Market Rental Value.” Fair Market
Rental Value shall be determined in accordance with the following procedure:

(a) Landlord shall deliver to Tenant written notice of Landlord’s determination
of the Fair Market Rental Value within twenty (20) days after Landlord receives
notice from Tenant that Tenant intends to exercise its Option. If Tenant
disputes Landlord’s determination of the Fair Market Rental Value as contained
in said notice, Tenant shall notify Landlord in writing within ten (10) days of
its receipt of Landlord’s determination, which notice shall further set forth
Tenant’s determination of the Fair Market Rental Value. Should Tenant timely
notify Landlord, Landlord and Tenant shall attempt to resolve their differences
within five (5) days following Landlord’s receipt of Tenant’s objection notice.
Should the parties be unable to timely resolve their differences, each party
shall within five (5) days thereafter, at its own cost and by giving notice to
the other party, appoint an M.A.I. appraiser with at least five years full time
commercial appraisal experience in the area in which the Premises are located to
appraise and determine the Fair Marker Rental Value within ten (10) days of
their appointment. If a party does not appoint an appraiser within said five
(5) day period, the single appraiser appointed by the other party shall be the
sole appraiser and shall determine the Fair Market Rental Value within ten
(10) days of his appointment. If two appraisers are appointed by the parties,
the appraisers shall meet promptly attempt to mutually determine the Fair Market
Rental Value.

If the two appraisers are unable to agree upon the Fair Market Rental Value
within twenty (20) days of their appointment, then if the difference between
them is less than five percent (5%)(determined as a ratio of the larger
appraisal), the appraisals shall be added together and divided by two, the
quotient being the Fair Market Rental Value; but if such difference is five
percent (5%) or greater, the appraisers shall select a third appraiser meeting
the qualifications as stated in this Section within five (5) days after the last
day of the two appraisers are given to set the Fair Market Rental Value. If they
are unable to agree on the third appraiser, either party may petition the
District Court in Salt Lake City for the selection of a third appraiser who
meets the qualifications stated in this Section. Each of the parties shall bear
one-half of the third appraiser’s fees and charges. Within twenty (20) days
after the selection of the third appraiser, the three (3) appraisers shall
independently determine the Fair Market Rental Value. The average of the two
(2) appraisals nearest in value shall conclusively be deemed the Fair Market
Rental Value, and the Base Rent as of the first day of the term of the Option
period shall be set based thereon.

5. Landlord shall use reasonable efforts to mitigate its damages in the event of
a Tenant default. Wherever either party to the Lease is required or requested to
give its consent, such consent shall not be unreasonably withheld.

6. Notwithstanding any subordination under Section 13 of the Lease, so long as
the Lease is in full force and effect and Tenant is not in default (beyond any
applicable cure period): (a) Tenant’s possession and occupancy of the Premises
under the Lease shall not be disturbed or interfered with by Senior Holder or
its successors and assigns in the exercise of any of its rights under the Senior
Instrument, or conveyance in lieu of foreclosure; (ii) any extension or renewal
rights in the Lease shall not be diminished or interfered with by Senior Holder;
and (iii) Tenant will not be joined as a party defendant for the purpose of
terminating Tenant’s interest and estate under the Lease in any proceeding for
fore closure of the Senior Instrument. Any subordination requested to be
executed by Tenant shall contain a non-disturbance provision in the same form as
set forth in this Section 6.

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7. The individuals executing the Lease and this Addendum on behalf of the
parties hereby warrant that they have the requisite authority to execute the
Lease and this Addendum on behalf of the respective parties and that the
respective parties have agreed to be and are bound hereby.

IN WITNESS WHEREOF, the parties have executed this Addendum as of the dates
below written to be effective as of the date of the Lease.

 

  LANDLORD:  

B-Line Holdings, L.C.,

 

a Utah limited liability company

Date: July 3, 02

 

By:

  LOGO [g643263dsp016a.jpg]  

Print Name:

     

Title:

      TENANT:  

Medallion Bank, a Utah industrial bank

Date: 7/3/02

 

By:

  LOGO [g643263dsp016b.jpg]  

Print Name:

  JOHN M. TAGGART  

Title:

 

President