**Exhibit10.10**

 

**LEASE**

 

THIS LEASE (“Lease”),dated for reference purposes only as of **November 12, 2003,** is made by andbetween Century Park, a California Limited Partnership (“Landlord”) and **MercantileNational Bank, N.A., a national bank** (“Tenant”), upon thefollowing terms and conditions:

 

1.                                       **Premises andBasic Lease Information**

 

1.1.                              Landlordhereby leases to Tenant and Tenant hereby leases from Landlord, upon the termsand conditions set forth in this Lease, those certain premises (the “Premises”)described in Article 1.1.1 below and diagrammed in Exhibit “A” attached heretoand hereby made a part hereof, as well as the right to use, in common withothers, the Common Areas (as hereinafter defined).  The Premises are situated in that certain office building (the“Building”) located at 1880 Century Park East, Los Angeles, California90067.  The land upon which the Buildingis located together with the Building and related facilities and appurtenancesand Common Areas shall hereinafter be referred to as the “Project.”  The terms and conditions of this Leaseinclude, without limitation, the following:

 

1.1.1                        **Premises**:                                         Suite**800**consistingof approximately **13,880** rentable square feet on the **8th**floor of the Building (see the attached Exhibit “A”).  The exact area of the Premises shall be determined by applyingthe BOMA method of measurement (ANSI Z65.1-1996) to calculate the squarefootage per the final space plan for the Premises.  Should the square footage measured from the space plan vary fromthat set forth in this Article 1.1.1, Landlord shall revise all figures in thisLease that are affected by the square footage, and Landlord and Tenant shallamend this Lease accordingly.  Landlordmay re-measure the Premises once within twenty (20) days of the CommencementDate of the Initial Term.  Landlord mayre-measure the Premises thereafter; provided, however that such re-measurementdoes affect the economics specified in Article 1.1.4 or Article 1.1.7 herein.

 

1.1.2**                        LeaseTerm**:                            Exceptfor Tenant’s occupancy of the Temporary Space pursuant to the terms andconditions of this Lease as set forth in Article 41 of the Lease Addendum, theterm of this Lease (the “Lease Term” or “Term”) shall begin on the later of thefollowing dates (the “Commencement Date”): (a) **April 1, 2004** (the“Scheduled Commencement Date”) or, where applicable, (b) upon SubstantialCompletion of the Tenant Improvements, as defined in the construction agreementattached hereto as Exhibit “B” and herein incorporated by reference, and, **unless terminated pursuant to Article 42 in the LeaseAddendum,** shall expire on the last day of the month that is onehundred twenty **(120)** months after the first day of themonth after the Commencement Date, unless sooner terminated pursuant to thisLease.

 

1.1.3                        **Holding Over.****                   **IfTenant, with or without Landlord’s written consent, remains in possession ofall or any portion of the Premises after the expiration or sooner terminationof the Lease, such holding over (“Holdover”) shall constitute and be construedas a tenancy from month-to-month only, subject to such terms and conditionscontained herein as may reasonably and logically be construed to apply to theHoldover, and any and all options or other preferential rights of Tenant shallbe deemed to have lapsed and to be of no further force or effect.  Either party may terminate suchmonth-to-month tenancy by giving the other party at least thirty (30) dayswritten notice thereof.  During such Holdover,Base Rent (as defined below) shall be one hundred fifty percent (150%) of theBase Rent in effect immediately prior to such Holdover.  Acceptance by Landlord of any Rent after theexpiration or termination of the Lease shall not be deemed to constituteLandlord’s consent to such Holdover.

 

1.1.4**                        BaseRent**:                                     Thebase rent (“Base Rent”) for the Premises shall be **$2.23** per rentablesquare foot **($30,952.40)** per month, subject to an annual CPIadjustment (see Article 3.2; see also Article 41 relating to the payment ofrent in the Temporary Space.).

 

1.1.5                        **AdditionalRent**: Amounts which are due as Additional Rent by reason ofincreases in Estimated Pass-through Costs (as both capitalized terms aredefined in Article 4 below) and all other amounts payable by Tenant pursuant tothe provisions of this Lease.

 

1.1.6                        **Base Year**:                                     **2004**is the Base Year.

 

1.1.7                        **Tenant’sPercentage Share:**   **4.45%**“Tenant’s Percentage Share” shall be a fraction, the numerator of which shallbe the rentable square footage of the Premises and the denominator of whichshall be 311,400 approximate rentable square feet for the Building.

 

1.1.8                        **SecurityDeposi**t:  **None**

 

1.1.9                        **PermittedUse**:                Generaloffices and uses related thereto that do not conflict with the Building’scertificate of occupancy, that comply with all applicable codes and statutes,and that are uses commonly found in similar office buildings in the Projectvicinity.

 

1.1.10**                  AddressFor Notices**:

 
| **Tenant***(prior to Commencement Date)* |   | **Tenant***(after Commencement Date)* |
|------------------------------------------|--------|---------------------------------------|
|                                     |   |                                  |
| Mercantile National  Bank                |   | Mercantile National  Bank             |
| 1840 Century Park East                   |   | 1880 Century Park East,  Suite 800    |
| Los Angeles, CA  90067              |   | Los Angeles, CA 90067                 |
|                                     |   |                                  |
| Contact: Mr. Scott A.  Montgomery        |   | Contact: Mr. Scott A.  Montgomery     |
| Phone:  310/282-6778                |   | Phone: 310/ 282-6778                  |
|                                     |   | With a Copy to:                       |
|                                     |   | Ted Simpson                           |
|                                     |   | Cushman & Wakefield               |
|                                     |   | 601 Figueroa Street,  Suite 4700      |
|                                     |   | Los Angeles, CA 90017                 |
|                                     |   | Telephone:  213/955-5100         |

 

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**Landlord****                                              **CenturyPark, a California limited partnership, c/o Held Properties, Inc., 1880 CenturyPark East, Suite 500, Los Angeles, CA 90067. See also Article 25 of this Lease.

 

1.1.11                  **ParkingRights**:       **Two and One-Half automobile spaces per 1,000 rentablesquare feet, currently calculated as****Thirty-Five (35)**automobile spaces at the Building’s prevailing parking rates.  See also Article 31 herein.  **Seealso Article 46 of the Lease Addendum.**

 

1.1.12**                  Guarantor(s)**:                      N/A

 

1.1.13**                  Broker:****                                               **Cushman& Wakefield of California, Inc.

 

1.2                                 **CommonAreas.**         The term“Common Area(s)” as used in this Lease shall mean all areas and facilities inthe Project which are provided and designated from time to time by Landlord forthe general use and convenience of Tenant and other tenants of the Project andtheir respective employees and invitees. Common Areas include, withoutlimitation, the lobby areas, walkways, parking facilities, landscaped areas,sidewalks, corridors, washrooms (if not part of the Premises), stairways,elevators, walls, common telephone and electrical closets, loading docks,plazas, service areas, and all other areas of the Project intended for commonuse.  Floors wholly occupied by Tenantor any other tenant shall not have any facilities which shall be used in commonwith other tenants, except for elevators, fire stairs, shafts, utility andservice closets, and similar installations. Tenant, its employees and invitees shall have a nonexclusive right touse the Common Areas, subject to Landlord’s rights and duties as hereinafterset forth.  Without Tenant’s consent andwithout liability to Tenant, so long as Tenant’s access to the Premises **and parking area or Tenant’s** ability toconduct business therefrom is not materially impaired and provided thatLandlord uses reasonable effort (including performing such work after normalbusiness hours, if reasonably required) to minimize any interference withTenant’s use and access of the Premises and parking areas during normalbusiness hours, Landlord shall have the right to do the following:

 

1.2.1                        Establishand enforce in a nondiscriminatory, consistently applied manner, reasonablerules and regulations concerning the maintenance, management, use and operationof the Common Areas;

 

1.2.2                        Temporarilyclose any Common Area for maintenance, alterations or improvements;

 

1.2.3                        Select,appoint and/or contract with any person or entity for the purpose of operatingand maintaining the Common Areas; and

 

1.2.4                        Change, **except for the number and location of parking spaces**,the size, use, shape or nature of the Common Area provided that doing so doesnot materially affect the existing ingress and egress to the Building, orchange the character of the Building to less than a first class officebuilding.

 

2.                                       **CommencementDate; Early Entry**

 

2.1                                 Exceptas set forth in Article 42, this Lease shall not be void or voidable, nor shallLandlord be subject to any liability as a result of any delay in theCommencement Date for any reason. Except for Tenant Delays, as defined in the Construction Agreement,payment of rent shall not commence until the Premises are available for occupancyby Tenant with all work to be performed pursuant to the Construction Agreementsubstantially completed **and the Departmentof Building and Safety has signed the permit card, indicating that occupancy ispermitted**.

 

2.2                                 Withinthirty (30) business days after Tenant’s occupancy of the Premises, or as soonthereafter as possible, the **Landlord shalldraft a statement**, and the parties hereto shall execute awritten statement setting forth the Commencement Date and the date ofexpiration of this Lease; provided, however, the enforceability of this Leaseand the Commencement Date shall not be affected should either party fail orrefuse to execute such statement.

 

2.3                                 Providedthat Tenant or Tenant’s agents do not interfere with or delay the SubstantialCompletion of Landlord’s Work in the Premises, or otherwise cause additionalcost or expense to Landlord, Tenant and Tenant’s agents shall be permitted toenter the Premises up to fourteen (14) days prior to the Commencement Date forthe purpose of installing telephones, cabling, fixtures and equipment.  Such early entry shall be subject to all theterms of such permission and all the provisions of this Lease which could bereasonably and logically construed as applying thereto, except that Tenantshall not be required to pay Rent.

 

3.                                       **Base Rent;Adjustments; General Rent Provisions**.

 

3.1                                 Tenantshall pay to Landlord as Base Rent for the Premises, without prior notice ordemand, the amount specified in Article 1.1.4, in advance, on or before thefirst day of each and every calendar month during the Lease Term.  All payments received by Landlord fromTenant shall be applied to the oldest payment obligation owed by Tenant toLandlord.

 

3.2                                 Base Rent asset forth in Section 1.1.4 above shall be increased effective as of eachanniversary of the Commencement Date during the term (“Adjustment Date”) to anamount which shall be determined by adding to the Base Rent an amount equal tothe Base Rent multiplied by the percentage of increase, if any, of the“Consumer Price Index for All Urban Consumers, Los Angeles-Anaheim-Riverside,California, Subgroup All Items (1982-1984=100)”, published by the United StatesDepartment of Labor, Bureau of Labor Statistics (the “CPI”) for the calendarmonth which is four (4) months immediately preceding the month in which theAdjustment Date occurs (the “Adjustment Index”) as compared with the CPI forthe calendar month which is four (4) months immediately preceding theCommencement Date (the “Base Index”); provided, however, that in no event shallthe adjusted and then current rent be decreased.

 

For example, if (i) theBase Rent as of the Commencement Date is $1,000; (ii) the Base Index is 300;(iii) the Adjustment Index for the first Adjustment Date is 315; (iv) theAdjustment Index for the Second Adjustment Date is 327; and (v) the AdjustmentIndex for the third Adjustment Date is 330; the Base Rent shall be increased asfollows:

 
| A)     |   | As of the first  Adjustment Date –  315/300 = 1.05 x  $1,000 = $1,050 |
|--------|--------|---------------------------------------------------------------------------------|
|   |   |                                                                            |
| B)     |   | As of the second  Adjustment Date – 327/300 = 1.09 x $1,000 = $1,090       |
|   |   |                                                                            |
| C)     |   | As of the third  Adjustment Date – 330/300 = 1.10 x $1,000 = $1,100        |

 

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If the AdjustmentIndex is unavailable on the date on which the first installment of Base Rent asadjusted shall become due, Tenant shall continue to pay the then effective Rentpayable by Tenant until the Adjustment Index is available, and the adjustment,if any, shall be paid retroactively with Base Rent for the first month in whichthe Adjustment Index is available.  Ifthe Bureau of Labor Statistics ceases to use the 1982-1984 base of 100 as thebasis of calculation for the CPI, then the Base Index and the Adjustment Indexshall be adjusted in accordance with the conversion formula published by theBureau of Labor Statistics.  If, at anytime required for the determination of the amount of any adjustment in BaseRent, the CPI is no longer published or issued, Landlord shall reasonablyselect a reliable governmental or other non-partisan publication evaluating theinformation theretofore used in determining the CPI.

 

3.3                                 Forany period during the Lease Term which is less than one (1) month, Base Rent,Additional Rent (defined in Article 4.1), and any other sums which are payableby Tenant under the Lease (all of which shall be deemed “Rent”) shall beprorated based upon a thirty (30) day month.

 

3.4                                 Rentunder this Lease shall be paid to Landlord, without deduction, offset orabatement (except as otherwise may be specifically set forth in this Lease) atLandlord’s address as specified in Article 1.1.10 above. Landlord shall havethe right to accept all payments of Rent and other payments, whether full orpartial, and to negotiate checks in payment thereof without any waiver of itsrights, irrespective of any conditions to the contrary sought to be imposed byTenant.  Rent paid by check shall not bedeemed paid to Landlord until funds clear and the check is honored.  If any noncash payment is not paid by thebank or other financial institution on which it is drawn, Landlord shall have theright to require Tenant to make future payments by certified funds.

 

4.                                       **AdditionalRent**.

 

4.1                                 **Computationof Additional Rent **Duringeach December of the Lease Term, or as soon thereafter as reasonably practical,Landlord shall provide Tenant with its good faith written estimate of theamount, if any, by which the Tax Costs (as defined in Article 4.3 below) and/orthe Operating Costs (as defined in Article 4.4 below) for the coming calendaryear are projected to exceed those of the Base Year (collectively referred toas “Estimated Pass-through Costs”).  Onor before the first day of each month during the ensuing calendar year, Tenantshall pay to Landlord as additional rent (“Additional Rent”), in addition toand at the time provided for payment of Base Rent, one-twelfth (1/12th)of the amount computed by multiplying Tenant’s Percentage Share by the amountof the Estimated Pass-through Costs for Taxes and/or one-twelfth (1/12th)of the amount computed separately with respect to Operating Costs.  In the event that Landlord does not provideTenant with such written estimate in December, Tenant shall continue to makemonthly payments of Additional Rent on the basis of the prior year’s EstimatedPass-through Costs until the first day of the month after Landlord providessuch written estimate to Tenant, at which time Tenant shall commence makingmonthly Additional Rent payments based upon the revised Estimated Pass-throughCosts, and additionally shall pay to Landlord a one-time retroactive sum foreach month that has elapsed since December the amount by which the AdditionalRent payable pursuant to the revised Estimated Pass-through Costs exceeds theamount Tenant paid based on the prior year’s Estimated Pass-through Costs.  **Landlordshall use its commercially best efforts to deliver its written estimate withinsix (6) months of the end of the calendar year**.  Under no circumstances shall the provisionsof this Article 4 cause the Base Rent to be reduced.  Neither Landlord’s failure to deliver, nor the late delivery ofsuch statement or statements shall constitute a default by Landlord hereunder,nor a waiver of Landlord’s right to receive any Additional Rent or to latercollect Additional Rent accrued as provided hereinabove.  The Tax Costs and Operating Costs for theBase Year shall be deemed to constitute Landlord’s agreed contribution toOperating Costs and Tax Costs and is neither a representation nor a warrantythat such Base Year costs will reflect actual Operating Costs or Tax Costs forany succeeding year.  If, during anycalendar year including the Base Year, the Building is less than ninety-fivepercent (95%) occupied, then for the purpose of computing Additional Rent duehereunder, the variable components of the Operating Costs and Tax Costsactually incurred during such calendar year shall be increased to approximatethe amounts which would have been payable if the Building had been ninety-fivepercent (95%) occupied.

 

4.2                                 **Reconciliationof Estimated Pass-through Costs to Actual **By July 1st of each year, Landlord shall furnishto Tenant a written statement of reconciliation (the “Reconciliation”), showingLandlord’s actual Operating Costs and Taxes for the preceding calendar year,together with a statement of adjustments necessary to reconcile any sums paidby Tenant hereunder during such calendar year pursuant to Article 4.1 withthose sums actually payable and due hereunder for such calendar year.  Any reference to Landlord’s “actual”Operating Costs or Tax Costs in this Article 4 shall be deemed to include anallowance for adjustment to reflect the level of occupancy of the Building tothe extent provided above.  If theReconciliation shows that Tenant owes additional sums hereunder, Tenant shallpay such sums to Landlord within thirty (30) days after receipt of theReconciliation.  If the Reconciliationshows that Tenant overpaid Additional Rent, such overpayment shall be refundedor credited to Tenant within thirty (30) days after Tenant’s receipt of theReconciliation. Landlord’s obligation to reconcile, Tenant’s obligation to pay,and Landlord’s obligation to credit or refund shall survive the expiration orsooner termination of the Lease. Landlord’s failure to deliver theReconciliation to Tenant as provided herein shall not constitute a default by Landlordnor waive Landlord’s right to collect all Additional Rent and other sums duehereunder.  Where only a portion of acalendar year falls within the Lease Term, Landlord shall reasonably proratethe estimated (or actual) Operating Costs and/or Tax Costs for such calendaryear.

 

4.3                                 **TaxCosts. **“Tax Costs” shallmean the sum of the following: any and all real property taxes, assessments(including, but not limited to, general and special assessments and possessoryinterests), charges, surcharges, license and other fees, levies, cost ofimprovement bonds and any and all other taxes (other than income, franchise,inheritance and estate or gift taxes of Landlord) on or relating to all or aportion of the Project including any legal or equitable interest of Landlordtherein, that may be imposed, levied, assessed or charged for any reason by anyauthority having the direct or indirect power to tax including, but not limitedto, the United States or the state, county or city in which the Project islocated, or any other local governmental authority, agency, district orpolitical subdivision thereof, together with personal property taxes,assessments, fees and charges (other than those paid by Tenant pursuant toArticle 26 below) and fees of tax consultants and attorneys retained to seek areduction, to contest or to act in some other manner in connection with any ofthe foregoing Tax Costs, together with any tax, assessment or other amounts(including, without limitation, commercial rental taxes) imposed, levied orcharged as a substitute for or a supplement to the foregoing.  **Exceptas provided in Article 48.1 in the Lease Addendum**, Tax Costsshall include increases caused by increases in tax rates as well as increasescaused by additional or increased assessed values for any

 

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reason including transfers of title to the Building or the Project, tothe extent not precluded elsewhere in this Lease.   **See also, Paragraph 48 ofthe Lease Addendum**.

 

4.4                                 **OperatingCosts.**

 

4.4.1                        **Definitionof Operating Costs.****                           **“OperatingCosts” shall mean the sum of any and all costs, expenses and disbursements ofany kind paid or incurred by Landlord in connection with the management,operation, security, maintenance, and repair of the Project, calculated inaccordance with the audited financial statements of Landlord, including, butnot be limited to, salaries, wages, benefits and related costs for employees;management fees, either as charged to Landlord by outside management companies ornot exceeding the amount typically charged by outside management companies ifLandlord or Landlord’s affiliate manages the Project; charges for utilities andservices provided to all tenants in accordance with Article 13.1 herein,including but not limited to janitorial services, window cleaning, elevatorservices, HVAC services, security services (including any taxes thereon); thecost of insurance as specified in Article 12.6 herein; outside accounting fees;office supplies; building cleaning supplies and materials; garbage and wastecollection; and a reasonable allowance for depreciation (or amortization) withrespect to machinery and equipment and other capital expenditures andimprovements; provided, however, that the only depreciation (or amortizationand expenditures) includable in Operating Costs shall be a reasonable allowancefor depreciation (or amortization) over the useful life of the improvements, asdetermined by Landlord’s accountants to conform with applicable tax laws.  **SeeParagraph 49 of the Lease Addendum.**

 

4.4.2                        **Definitionof Required Alterations****     **“Required Alterations”are any changes, alterations or improvements to the Project (excluding thoseattributable exclusively to Tenant’s specific use and occupancy of thePremises, which alterations shall be Tenant’s sole responsibility), including,but not limited to, the installation or modification of electrical, mechanical,water sprinkler, or other energy or life safety systems or components, requiredby any rule, regulation or law which became enacted and effective after theCommencement Date.  The capital costsrelating to such Required Alterations, including all related financing costs,shall be amortized over the useful life of the Required Alterations, asdetermined by Landlord’s accountants to conform with applicable tax laws.

 

4.5                                 **Audit.**               If Tenant disputesthe amount of any Additional Rent due under Article 4, Tenant shall have theright, after reasonable notice, to inspect Landlord’s accounting records atLandlord’s accounting office during its normal business hours and, if aftersuch inspection Tenant still disputes the amount of Additional Rent owed,Tenant may retain a mutually-acceptable national or regionally-recognizedindependent certified public accounting firm to certify to the parties itsdetermination of the proper amount of Operating Costs and Tax Costs payable byTenant.  After such determination hasbeen made, and if a dispute continues to exist between Tenant and Landlord, anindependent accountant mutually-agreed upon by both Landlord and Tenant may beretained to determine the amount of any Additional Rent due **or credited**.  If the certification discloses that the Operating Costs and TaxCosts charged to Tenant exceed the audited operating costs by more than fivepercent (5%), the cost of such certification shall be borne by Landlord.Otherwise, the cost of the certification shall be borne by Tenant.

 

5.                                       **SecurityDeposit**.                                                [**Intentionally Deleted**]

 

6.                                       **Restrictionson Use; Compliance with Laws**.

 

6.1                                 Tenantshall use and occupy the Premises only for the specific uses, and those relatedthereto, specified in Article 1.1.9 above for no other uses whatsoever.  Tenant shall use and occupy the Premises inaccordance with Article 36, Rules and Regulations.  In addition to the rules and regulations in Article 36, Tenantshall not: (a) do or permit anything to be done in or about the Premises whichwill in any way obstruct or materially interfere with the rights of othertenants or occupants of the Building or injure or annoy them; (b) use or allowthe Premises to be used for any unlawful purpose; (c) cause or maintain orpermit any nuisance in or about the Premises; (d) cause or permit any hazardousor toxic waste, substance or material, other than generally used officematerials, to be brought to the Premises or used, handled, stored or disposedof in or about the Premises; (e) conduct business or other activity in or aboutthe Premises that places an unreasonable or excessive burden upon the publicand Common Areas or the utility systems of the Project; or (f) commit or sufferthe commission of any waste in or about the Premises.

 

6.2                                 Tenantshall not place a load upon any floor that exceeds 70 pounds per square foot,without Landlord’s prior written approval. Tenant shall not install any equipment, apparatus or device in thePremises which causes vibrations or excessive noise.

 

6.3                                 Tenantshall not use the Premises or permit anything to be done in or about thePremises which in any way conflicts with any law, statute, ordinance or governmentalrule or regulation now in force or which may hereafter be enacted orpromulgated.  **With respect to the condition of the Premises**,Tenant shall, at its sole cost and expense, promptly comply with all applicablelaws, statutes, ordinances and governmental rules, regulations and requirementsnow in force or which may hereafter be in force and with the requirements ofany board of fire underwriters or other similar body now or hereafterconstituted relating to or affecting **Tenant’sspecific nature of use** of the Premises **and to all building codes requiring modifications tothe Premises due to the improvements made by or for Tenant in thePremises.  Notwithstanding anything tothe contrary in this Lease, except for grandfathered rights and variances, it shallbe Landlord’s obligation, at Landlord’s cost and expense, to comply with allapplicable laws relating to the Building and the Building’s systems in general,without regard to specific use, including modifications required to obtain thenecessary building permits for the Work to be performed in accordance with theConstruction Agreement attached hereto as Exhibit B**.  Tenant shall not knowingly do or permitanything to be done in or about the Premises or bring or keep anything thereinwhich will in any way increase the rate of any insurance upon the Building orany of its contents, or cause cancellation of said insurance or otherwiseaffect said insurance in any manner. Tenant shall be responsible for any increase in cost of Landlord’sinsurance caused by or resulting from Tenant’s breach of the obligationscontained herein.

 

6.4                                 Pursuant toArticle 6.1(d) above, other than commonly used business office supplies, Tenantshall not permit nor use, generate, store, transport or dispense on thePremises any flammable, radioactive materials, hazardous wastes, chemicals,environmental poisons, pollutants, contaminants, or other substancesdemonstrated as hazardous or toxic pursuant to the Comprehensive EnvironmentalResponse Compensation and Liability Act of 1980, as amended; the HazardousMaterials Transportation Act; the Resource Conservation and Recovery Act; theCalifornia Health and Safety Code, or regulations issued

 

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underany of said acts (collectively, “Applicable Environmental Laws”) without theprior written consent of Landlord.  Anysuch Landlord consent shall be conditioned upon (a) Tenant’s separate writtenagreement to handle, store, use and dispose of such materials in accordancewith all applicable environmental laws, and (b) Tenant’s separate writtenagreement to indemnify and hold Landlord harmless from any and all liabilityincluding consequential damages directly or indirectly arising out of Tenant’sstorage, use, or disposal of such materials, including without limitation thecost of any required or necessary repair, clean up or detoxification as aresult thereof.  Tenant’s failure toprovide a separate written agreement to handle, store, use and dispose and toindemnify Landlord shall not abrogate or eliminate Tenant’s obligationshereunder.

 

6.5                                 Asused herein, the term “Hazardous Material” means any hazardous or toxicsubstance, material or waste which is or becomes regulated by any localgovernmental authority, the state in which the Project is located or the UnitedStates government.  The term “HazardousMaterial” includes, without limitation, any material or substance that is (i)defined as a “Hazardous Substance” under appropriate state law provisions, (ii)petroleum, (iii) asbestos, (iv) designated as a “Hazardous Substance” pursuantto Section 311 of the Federal Water Pollution Control Act (33 U.S.C. section1321), (v) defined as a “Hazardous Waste” pursuant to Section 1004 of theFederal Resource Conservation and Recovery Act, 42 U.S.C. section 6901 *et seq*.(42 U.S.C. section 6903), (vi) defined as a “Hazardous Substance” pursuant toSection 101 of the Comprehensive Environmental Response, Compensation andLiability Act, 42 U.S.C. sections 9601 *et seq*. (42 U.S.C. section 9601), or (vii)defined as a “Regulated Substance” pursuant to Subchapter IX, Solid WasteDisposal Act (Regulation of Underground Storage Tanks), 42, U.S.C. sections6991 *etseq*.

 

6.6                                 Excludingcommonly used business office supplies, as well as any preexisting asbestos andasbestos containing materials (“ACMs”) in the Building, Tenant shall, atTenant’s sole expense and with counsel reasonably acceptable to Landlord,indemnify, defend and hold harmless Landlord and Landlord’s shareholders,directors, officers, employees, partners, affiliates, and agents (“LandlordIndemnities”) with respect to all losses arising out of or resulting from therelease of any Hazardous Material in or about the Premises or the Project, **by Tenant, Tenant’s Agents, contractors or inviteesother than Landlord or Landlord’s Indemnitees** or the violationof any Applicable Environmental Law, by Tenant or Tenant’s agents, contractorsor invitees (other than Landlord and Landlord Indemnities) pursuant to Article6.4(b) above.  This indemnification includesall losses, liabilities, obligations, penalties, fines, claims, actions(including remedial or enforcement actions of any kind and administrative orjudicial proceedings, orders or judgments), damages (including consequentialdamages and punitive damages) and costs (including attorney, consultant andexpert fees and expenses) resulting from the release of any HazardousSubstances or violation of any Applicable Environmental Law **by Tenant or Tenant’s agents, contractors or inviteesother than Landlord and Landlord’s Indemnitees**.  This indemnification shall survive theexpiration or sooner termination of the Lease. (**See Lease Addendum Paragraph 50 and 51.)**

 

7.                                       **Improvementsand Alterations.**

 

7.1                                 **Alterations,Additions or Improvements.****                       Without the prior written consent ofLandlord, and except for non-structural, cosmetic alterations costing less thanFifty Thousand Dollars ($50,000) (“Cosmetic Alterations**”),Tenant shall not make nor cause alterations, additions, or improvements in, onor to any part of the Premises or the Project, except to install freestandingfurniture and floor coverings, where such freestanding furniture does not placea load on the floor that exceeds 70 pounds per square foot.  Except as provided above, any alterations,additions or improvements to the Premises desired by Tenant shall be made inaccordance with plans and specifications approved in advance in writing byLandlord and pursuant to any applicable governmental permits.  Landlord’s approval of Tenant’s plans andspecifications shall not constitute Landlord’s representation or warranty as tothe adequacy of the plans and specifications or their compliance withapplicable laws.

 

7.2                                 **Contractorsfor Improvements.****                      Except for any Cosmetic Alterations**,any alterations, additions or improvements to the Premises desired by Tenant,other than any specified in the Approved Plans as defined in Exhibit B, if any,shall be made by Landlord or contractors selected by Landlord for Tenant’saccount.  Landlord’s contractor shallhave all major work items bid by three subcontractors or vendors.  **Landlord’scontractor and Tenant shall mutually approve subcontractors for major workitems (i.e., items that cost more than Thirty Thousand Dollars ($30,000).  Landlord’s contractor shall use its bestefforts to hire such mutually approved qualified subcontractors with the lowestbids**.

 

7.3                                 **Landlord’sConsent to Improvements.**                                      Landlordmay impose as a condition to its consent to alterations, additions orimprovements to the Premises desired by Tenant such requirements as Landlordmay reasonably deem necessary including, without limitation, requirementsrelating to the manner in which the work is done and the times during which thework is to be accomplished **so long as suchrequirements do not impose additional costs**.  At Landlord’s request, but at Tenant’s solecost and expense, at the expiration or sooner termination of this Lease, Tenantshall have Landlord’s contractor remove any and all improvements, additions orpersonal property **that are not typical incomparable first class buildings** in the Premises caused to beinstalled by Tenant other than the initial Tenant Improvements described inArticle 7.5 below. **At the time Landlordapproves such improvements, Landlord shall specify which improvements it willrequire Tenant to remove at the end of the Lease Term.**  Landlord’s contractor at Tenant’s sole costand expense shall repair any damage done to the Premises in connection withsuch removal.

 

7.4                                 **Changes toStructure or Mechanical or Electrical Systems.**    Notwithstanding any provision herein thatpermits Tenant to make its own alterations, additions or improvements to thePremises, Tenant shall not make any alterations, additions or improvements tothe Premises which would negatively affect the Building’s structure or itsmechanical or electrical systems, or which would materially interfere with ordisrupt other tenants in the Building or any work then being carried outtherein by Landlord or its contractors.

 

7.5                                 **InitialTenant Improvements.**                                    Landlordshall construct or have Landlord’s contractor construct the improvements in thePremises (the “Tenant Improvements”), if any, pursuant to Exhibit B, ifany.  Tenant may install certain movablepersonal property (*e.g.*, file systems, furniture) in thePremises, which Tenant shall remove upon the expiration or earlier terminationof the Lease.

 

7.6                                 **Standard forImprovements.**                                          Anyalterations, additions or improvements to the Premises shall be manufacturedand installed in a good, workmanlike, diligent, prompt and expeditious mannerin compliance with all Building specifications, applicable laws and ApplicableEnvironmental Laws.

 

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8.                                       **Repairs andMaintenance**.

 

8.1                                 The Premisesat Tenant’s move-in will be in good operating condition, free of debris andstructurally sound in accordance with industry standards in the Projectarea.  By taking possession of thePremises, Tenant shall be deemed to have conclusively agreed to accept the Premisesas being in good order, condition and repair, subject to “punchlist” items andlatent defects **and any representations orwarranties that may be set forth elsewhere in this Lease**.  Except as required by Article 20 below andordinary wear and tear **and subject toArticle 8.2 with regard to any Building Systems in or about the Premises**,Tenant shall, at all times during the Lease Term hereof and at Tenant’s solecost and expense, keep the Premises and every part thereof in good condition,order and repair except repairs resulting from the negligence, recklessness orwillful wrongful act of Landlord or Landlord’s representatives, employees orother agents (collectively, “Landlord’s Agents”).  Landlord shall have no obligation to alter, remodel, improve, repair,decorate or paint the Premises or any part thereof, or maintain any nonstandarditems installed in the Premises by or at the request of Tenant, except asspecified in Articles 13 and 20 below or in Exhibit B, if any.  No representations relating to the conditionof the Premises, the Building or the Project have been made by Landlord orLandlord’s Agents to Tenant, except as may be specifically set forth in thisLease.

 

8.2                                 Subjectto the provisions of Article 8.1 above and Article 20 below, Landlord shallmaintain the Common Areas, the foundation and structural portions of theBuilding **(which shall include but notlimited to floor/ceiling slabs, roof, curtain wall, exterior glass andmullions, columns, beams, shafts (including elevator shafts) parking areas,plazas, pavement and curbs (collectively, “Building Structures”)**,and the plumbing, heating, ventilation and air conditioning (“HVAC”), fire,life, safety, mechanical and electrical systems **(collectively, “Building Systems”)** providing the servicesand utilities to be furnished by Landlord pursuant to Article 13.1 below, ingood order and condition; provided, however if any maintenance and repairs arecaused by the act, neglect, fault, or omission of any duty by Tenant orTenant’s agents, servants, employees, or invitees (collectively, “Tenant’sAgents”), Tenant shall pay to Landlord the reasonable cost of such maintenanceand repairs.  Landlord shall not beliable for any failure to make any such repairs or to perform any maintenanceunless such failure persists for an unreasonable time after Tenant giveswritten notice to Landlord of the need for such repairs or maintenance.  Notwithstanding anything in this Lease tothe contrary, in the event of an interruption in essential services to thePremises (defined for these purposes as the failure to provide HVAC service,electrical service, elevator service, water or restroom facilities) or Tenant’saccess to Premises is materially impaired, and such interruption or impairmentcontinues for a period of five (5) consecutive days or twenty (20) days in anyone calendar year, Tenant shall be entitled to an abatement of Rent for theperiod that such services are not provided where such interruption orimpairment materially interferes with the normal business conduct of Tenant inthe Premises.  If any such interruptionoccurs during a period when Tenant is not otherwise required to pay Rent,Tenant’s free rent period shall be extended for the number of days that theservices were not provided.  Tenantwaives the right to make repairs at Landlord’s expense under any law, statuteor ordinance now or hereafter in effect.

 

9.                                       **Liens**.              Tenant shall keepthe Project free from any liens arising out of any work performed, materialsfurnished or obligations incurred by Tenant. If within twenty (20) days following the imposition of any lien andwritten notice thereof to Tenant, Tenant does not cause the lien to be releasedof record by payment or posting of a proper bond, Landlord shall have, inaddition to all other remedies provided herein and at law or in equity, theright to cause the lien to be released by such means as it deems properincluding, but not limited to, payment of the claim giving rise to suchlien.  All such sums paid by Landlordand all expenses incurred in connection therewith shall be considered AdditionalRent and shall be payable to Landlord by Tenant within thirty (30) days afterreceipt of notice from Landlord, with interest at the Interest Rate (as definedin Article 27 below).  Landlord shallhave the right at all times to post and keep posted on the Premises, anynotices permitted or required by law, or which Landlord shall deem proper, forthe protection of Landlord, the Project and by other parties having an interesttherein from mechanic’s and materialmen’s liens.  Tenant shall give Landlord at least 15 business days priorwritten notice of commencement of any work on the Premises.

 

10.                                 **Assignmentand Subletting**.

 

10.1                           Tenantshall not have the right to assign the Lease, or sublease all or any portion ofthe Premises without Landlord’s consent, **whichshall not be unreasonably withheld, conditioned or delayed**.  If Landlord consents to an assignment orsublease, such assignment or sublease shall be subject to all the terms andconditions of the Lease, and on Landlord-approved forms.  Any assignment, sublease or other transferwithout Landlord’s prior written consent shall be void.

 

10.2                           Indetermining whether to consent to an assignment or a sublease, Landlord mayconsider the nature of the proposed use and business and the financial statureof the proposed transferee.  Inaddition, Landlord reserves the right to condition any such consent upon itsreasonable determination that the proposed assignee’s or subtenant’s use of thePremises will not adversely materially impact on the Common Areas or utilitysystems of the Building.

 

10.3                           Tenantshall not enter into any proposed assignment, sublease or other transfer of anyinterest herein or in the Premises which would (a) detract from the first-classcharacter or image of the Building, or (b) cause a breach by Landlord of anyloan obligation or agreement, any covenants, conditions, restrictions and leaseobligations of record, or any insurance policy.  (Upon Tenant’s request, Landlord shall provide Tenant with a listof any existing rights in favor of any other tenant in the Building.)

 

10.4                           Tenantshall give Landlord fifteen (15) days prior written notice of its intention toassign, sublease or otherwise transfer its Lease.  Tenant shall submit the following information onLandlord-approved forms with such notice and with a written request forLandlord’s consent to any assignment, sublease or transfer: (a) all transferand related documents, (b) financial statements or other financial information,certified by a certified public accountant **orofficer of the Company**, sufficient to enable Landlord to make aninformed judgment as to the financial capabilities of the proposed transferee,and (c) such other information, related to the proposed transfer and theparties involved therein as Landlord reasonably requests in writing.  Landlord, at its option, may void anytransaction that does not comply with provisions of this Article 10.

 

10.5                           IfLandlord does not consent to the proposed sublease or assignment, or othertransfer, **within fifteen (15) days**,Tenant shall not complete such proposed assignment or sublease.  On the other hand, if Landlord consents tosuch proposed sublease or assignment, or other transfer, Tenant shall berequired to pay Landlord’s reasonable legal and administrative fees not toexceed $1,000 for any assignment or sublease. In addition, if Landlord consents to the proposed

 

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assignment or sublease: (a) any subtenant shall agreethat if Landlord gives such subtenant notice that Tenant is in default underthis Lease, such subtenant shall thereafter make all sublease or other paymentsdirectly to Landlord, which sublease payments will be received by Landlordwithout any liability to honor the sublease (except to credit such paymentsagainst sums due under the Lease) and any subtenant shall agree to attorn toLandlord or its successors and assigns should the Lease be terminated for anyreason, voluntarily, or otherwise, except that in no event shall Landlord orits successors or assigns be obligated to accept such attornment and (b)Landlord may require that subtenant not then be in default hereunder in anyrespect.

 

10.6                           Theparties acknowledge that Landlord’s economic stake in the Project issignificantly greater than Tenant’s economic stake in this Lease.  Accordingly, the parties have expresslybargained for the following allocation of any **“Profits” (as defined in Article 59 in the Lease Addendum)**to be derived by Tenant from any assignment or subletting or other transfer ofthis Lease.  **Except in the case of a Permitted Transferee asdefined in Article 10.9 below****(in which case no Transfer Premium is due)**, **in the event Tenant assigns or subleases more thanfifty percent (50%) of the Premises,** Tenant shall be required topay Landlord fifty percent (50%) of any rent, key money, transferconsideration, or other premiums of any kind or nature on the sublease,assignment or transfer in excess of the Base Rent payable by Tenant under thisLease on a per rentable square foot basis net of Tenant’s costs incurred tofacilitate the transfer (the “Transfer Premium”).  Such payments shall be paid, in the same manner and at the sametime as Tenant receives such Transfer Premium, whether such Transfer Premium isin the form of an increased rental, a lump sum payment or any other form ofconsideration.  If such sublease,assignment or transfer pertains to a portion of the Premises only, any TransferPremium shall be computed on the assumption that Tenant’s Rent and other sumsdue hereunder are allocable on a pro rata per square foot basis.  **[SeeLease Addendum Article 52]**

 

10.7                           Theprovisions of this Article 10 shall apply regardless of whether suchassignment, sublease or other transfer is made in compliance with theprovisions of this Lease.  Any paymentsmade to Landlord pursuant to this Article 10 shall not cure any default underthis Lease arising from such assignment, sublease or transfer. Tenant shall notartificially structure any sublease, assignment or other transfer or take anyother steps to circumvent or to reduce the amount payable to Landlord underthis Article 10.  The amount payable toLandlord under this Article 10 shall be the amount that would have been payableto Landlord had the Tenant not artificially structured the sublease, assignmentor transfer or otherwise tried to circumvent this Article 10.

 

10.8                           Noassignment, sublease or other transfer shall release Tenant from any of itsobligations hereunder.  Landlord’sconsent to any one transfer shall apply only to the specific transaction therebyauthorized and such consent shall not waive the duty of Tenant or anytransferee to obtain Landlord’s consent to any other or subsequent transfer, ormodify or limit Landlord’s rights hereunder in any way.  Landlord’s acceptance of Rent directly fromany assignee, subtenant or other transferee shall not be construed asLandlord’s consent thereto nor Landlord’s agreement to accept the attornment ofany subtenant in the event of any termination of this Lease.  In no event shall Landlord’s enforcement ofany provision of this Lease against transferee be deemed a waiver of Landlord’sright to enforce any Lease provision against Tenant or other person.

 

10.9                           IfTenant is a corporation, an unincorporated association or a partnership(including, without limitation, a limited liability company (“LLC”) or alimited liability partnership (“LLP”)), any cumulative transfer, assignment orhypothecation of any stock or interest in such corporation, association orpartnership greater than forty-nine percent (49%) thereof, or any cumulativetransfer, assignment or hypothecation (other than in the ordinary course ofbusiness) of any asset of such corporation, association, partnership, LLC orLLP greater than forty-nine percent (49%) thereof (“Change in Control”), shallbe deemed an assignment within the meaning and provisions of this Article10.  The foregoing shall not apply tocorporations, where forty-nine percent (49%) or more of the stock is tradedthrough a regional, national or over-the-counter exchange.  Provided that the transferee’s use ispermitted under the Lease and provided that Tenant notifies Landlord of itsintention at least thirty (30) days prior to such assignment or sublease, thennotwithstanding anything in this Lease to the contrary, Tenant shall have theright, without obtaining Landlord’s consent or paying any Transfer Premium, todo the following: (a) assign this Lease or sublet all or any part of thePremises to a parent, wholly-owned subsidiary or affiliate of Tenant; (b)transfer a majority or controlling interest in the Tenant to an entity with afinancial strength **sufficient to meet theobligations set forth in this Lease**; (c) assign this Lease orsublet all or any part of the Premises to an entity into which Tenant is mergedor by which it has been acquired; (d) assign this Lease or sublet all or any part of the Premises to an entityor entities of the Tenant created by the division of Tenant into one or moreseparate corporations and/or partnerships **(collectively,a “Permitted Transferee”)**.

 

10.10                     Notwithstandingany of the foregoing provisions, covenants and conditions to the contrary, inthe event that this Lease is assigned to any person or entity pursuant to theprovisions of the Bankruptcy Code, 11 U.S.C. 101 et seq. (the “Bankruptcy Code”),any and all moneys or other consideration payable or otherwise to be deliveredin connection with such assignment shall be paid or delivered to Landlord,shall be and remain the exclusive property of the Landlord and shall notconstitute property of Tenant or of the estate of Tenant within the meaning ofthe Bankruptcy Code. Any and all moneys or other consideration constitutingLandlord’s property under the preceding sentence not paid or delivered toLandlord shall be held in trust by the bankruptcy trustee in possession ordebtor in possession for the benefit of the Landlord and shall promptly be paidto or turned over to Landlord.  IfTenant proposes to assign this Lease pursuant to the provisions of the BankruptcyCode to any person or entity who shall have made a bona fide offer to accept anassignment of this Lease on terms acceptable to Tenant, then notice of suchproposed assignment setting forth (a) the name and address of such person, (b)all of the terms and conditions of such offer, (c) the adequate assuranceprovided by Tenant to assure such person’s future performance under the Leaseincluding, without limitation, the assurance referred to in Section 365 of theBankruptcy Code, or any such successor or substitute legislation or rulethereto, shall be given to Landlord by Tenant no later than twenty (20) daysafter receipt of such bona fide offer by Tenant.  Tenant shall make application to a court of competentjurisdiction for authority and approval to enter into such assignment andassumption.  Landlord shall thereuponhave the prior right and option, to be exercised by notice to Tenant given atany time prior to the effective date of such proposed assignment, to accept anassignment of this Lease upon the same terms and conditions and for the sameconsideration, if any, as the bona fide offer made by such person, less anybrokerage commissions, attorneys’ fees, tenant improvement costs or othercharges which may be payable out of the consideration to be paid by such personfor the assignment of this Lease.  Anyperson or entity to which this Lease is assigned pursuant to the provisions ofthe Bankruptcy Code shall be deemed without further act or deed to have assumedall of the obligations arising under this Lease on and after the date of such assignment.  Any such assignee shall upon demand executeand deliver to Landlord an instrument confirming such assumption.  Subject to this Article 10 and Article 20below, the Lease

 

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provisions shall be binding upon and shall inureto the benefit of the parties hereto and their respective heirs, executors,administrators, successors and assigns.

 

11.                                 **Waiver;Indemnity.**

 

11.1                           Tenant, as amaterial part of the consideration to Landlord, hereby assumes all risk ofdamage to personal property of Tenant, or injury to persons in or about thePremises, **except to the extent caused bythe negligence, recklessness or willful misconduct of Landlord or Landlord’sAgents**.  Notwithstandingany contrary provision herein, and except to the extent arising from thenegligence, recklessness or willful misconduct of the Landlord, or Landlord’sAgents, Landlord shall not be liable and Tenant hereby waives all claimsagainst Landlord for any injury or damage to any person or property or anyother loss (including, but not limited to loss of income), which may besustained by the person, goods, wares, merchandise or property of Tenant, orTenant’s Agents, or any other person in or about the Premises, the Building, orthe Project by or from any cause whatsoever. Without limiting the generality of the foregoing, **except to the extent caused by negligence,recklessness or willful misconduct of the Landlord or Landlord’s Agents**,Landlord shall not be liable for any damage caused by or resulting from: (a)water leakage of any character from the roof, walls, windows, basement, or anyother portion of the Premises or the Project; (b) fire, steam, electricity, gasor oil, or by any interruption of utilities or services, or by any tenant, occupant,or other person; or (c) any other cause whatsoever, in, on or about thePremises or the Project. Notwithstanding any contrary provision in this Lease, Landlord shall notin any event be liable for consequential damages hereunder.

 

11.2                           Subject to Article12.7 below, except to the extent that claims arise from the negligence,recklessness or willful misconduct of Landlord, Tenant shall indemnify and holdLandlord (as used in this Article 11.2, “Landlord” shall refer to Landlord andLandlord’s Agents) harmless from and against any and all claims, demands,losses, damages, liabilities, costs and expenses (including, but not limitedto, reasonable attorney’s fees) arising from Tenant’s use or **occupancy of the Premises**, from theconduct of Tenant’s business, from any act or omission, work or thing done,permitted or suffered by Tenant (or any officer, employee, agent, contractor,representative, licensee, guest, invitee or visitor thereof) in or about theProject, or from any default under this Lease by Tenant. If any action orproceeding is brought against Landlord by reason of any such matter, Tenantshall, upon notice from Landlord, defend Landlord in such action or proceedingat Tenant’s expense.  The provisions ofthis Article 11 shall survive the expiration or termination of this Lease for aperiod of ninety (90) days with respect to any claims or liability arising fromevents occurring prior to such expiration or termination.

 

11.3                           Notwithstandinganything in this Lease to the contrary, except to the extent that claims arisefrom the negligence, recklessness or willful misconduct of Tenant, Tenant (asused in this Article 11.3, “Tenant” shall refer to Tenant and Tenant’sAgents) shall not be liable for and Landlord shall indemnify Tenant and holdTenant harmless from and against all suits, actions, damages, liability andexpense in connection with loss of life, bodily or personal injury or propertydamage arising from or out of any occurrence, in, upon, at or from the Project.

 

12.                                 **Insurance.**

 

12.1                           Throughoutthe Lease Term hereof, Tenant shall carry and maintain, at its own expense, thefollowing types, amounts and forms of insurance:

 

12.1.1                  **CommercialGeneral Liability Insurance**.** **Apolicy of commercial general liability insurance with a combined single limitof One Million Dollars ($1,000,000) per occurrence with Two Million Dollars($2,000,000) aggregate coverage, in the name of Tenant (naming, as additionalinsureds, Landlord, its management company Held Properties, Inc., and, ifrequested by Landlord, any mortgagee, trust deed holder, or secured party withan interest in this Lease).  Tenant’sliability coverage shall include, without limitation, all coverage typicallyprovided by the Broad Form Comprehensive General Liability Endorsement,including broad form property damage, and premises-operations coverage,products-completed operations coverage, owners and contractors protectivecoverage, and the broadest form of contractual liability coverage, the last ofwhich shall cover the insuring provisions of this Lease and the performance byTenant of the indemnity agreements in Article 11 above. Such policy shallprovide coverage on an occurrence basis. The amount of such insurance required hereunder shall be subject toadjustment from time to time as reasonably requested by Landlord, but Landlordshall not raise such coverage amounts to an extent where they materially exceedthat customarily carried by prudent tenants in first class office buildings inthe Project area.

 

12.1.2                  **Tenant’sProperty Insurance**.  Tenantshall procure and maintain property insurance coverage for: (a) all officefurniture, trade fixtures, office equipment, merchandise and all other items ofTenant’s property in, on or about the Premises and the Project, includingproperty installed by, for or at the expense of Tenant and (b) TenantImprovements.  Tenant’s propertyinsurance shall be written on the broadest available “all risk” (special causesof loss) policy form and shall include an agreed amount endorsement for no lessthan one hundred percent (100%) of the full replacement cost (new, withoutdeduction for depreciation) of the covered items and property.  The property insurance coverage shallinclude vandalism and malicious mischief coverage, sprinkler leakage coverageand earthquake sprinkler leakage coverage.

 

12.2                           **Recovery forTenant’s Negligence**.  All ofthe policies that Tenant is required to obtain pursuant to the provisions ofArticle 12.1 above shall be issued by companies legally authorized to dobusiness in California.  Although namedas an additional insured and subject to the provisions of Article 12.7 of thisLease, Landlord shall be entitled to recover under said policies for any lossoccasioned to it, its servants, agents and employees, by reason of thenegligence, recklessness or willful misconduct of Tenant.

 

12.3                           **Delivery ofCertificate, Policy and Endorsements**.  Prior to Tenant’s occupancy of the Premises, Tenant shall provideLandlord with evidence of compliance with Tenant’s insurance requirements underthe Lease, including the endorsements specified in Article 12.1, and, asavailable, certified certificates for all insurance policies regarding thePremises, executed by an authorized agent of the insurer or insurers.  Each insurance policy shall provide that it maynot be modified or canceled without **ten(10)** days prior written notice to Landlord (by any meansdescribed in Article 27 below) and to any other additional insureds.  At least **ten (10)** days prior to the expiration of any of suchpolicies, Tenant shall furnish Landlord with a renewal or binder therefor.

 

12.4                           **BlanketInsurance**.  Tenant may carryinsurance by a combination of primary, excess and umbrella policies, providedthat the policies are absolutely concurrent in all respects regarding thecoverage afforded by the policies.  The

 

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coverage of any excess or umbrella policy must be at least as broad asthe coverage of the primary policy.  Allinsurance policies carried by Tenant for Tenant’s Premises and personalproperty shall be primary and non-contributory with respect to any otherinsurance available to and purchased by Landlord.

 

12.5                           **Tenant’sFailure to Obtain Insurance**. If Tenant fails to carry any insurance policy required hereunder or tofurnish certificates pursuant hereto, Landlord may, upon no less than ten (10)business days prior written notice, and without waiving Tenant’s default,obtain such insurance.  In such case,Tenant, with the next month’s Rent due hereunder, shall reimburse Landlord forthe cost thereof including interest at the Interest Rate specified in Article27.

 

12.6                           **Landlord’sInsurance**.  During the LeaseTerm, Landlord shall procure and maintain property and liability insurance forthe Project in such reasonable amounts, and with such reasonable coverage, aswould be carried by a prudent owner of a similar building in the Project area,or as any lienholder may require. Tenant acknowledges that it shall not be a named insured or an additionalinsured in such policies, and that it has no right to receive any proceeds fromany such insurance policies carried by Landlord.  Landlord may but shall not be required to carry insurancecoverage for damages caused by flood or earthquake.

 

12.7                           **Waiver ofSubrogation**.  Landlord andTenant hereby waive all causes of action and rights of recovery against eachother, against all subtenants or assignees of Tenant and against any otherperson or entity holding an interest in the Project (together, the “AffectedParties”) and against the agents, officers and employees of the AffectedParties for any loss occurring to the property of the Affected Partiesresulting from any of the perils insured against under any and all insurancepolicies (including self-insurance) in effect at the time of any such loss orwhich, under this Lease, were required to be insured against, regardless ofcause or origin of such loss, including the negligence, recklessness or willfulmisconduct of the Affected Parties or the agents, officers or employees of theAffected Parties.  Landlord and Tenantshall each use commercially reasonably efforts to cause their respectiveinsurers to issue an endorsement denying such insurer any rights of subrogationagainst the other party.

 

12.8                           **Increases inPremiums due to Tenant’s Use or Occupancy**.  If, after Landlord provides notice to Tenant that the insurancecarrier is proposing increased premiums to the Project due to Tenant’s use oroccupancy of the Premises, and Tenant fails to cease the offending use withinten (10) business days after receipt of such notice, Tenant shall pay saidincreases in insurance premiums.

 

13.                                 **Services andUtilities.**                         13.1                           Throughoutthe Lease Term, Landlord shall provide the following services and utilitiestwenty-four (24) hours per day on every day during the Lease Term, unlessotherwise stated below.

 

13.1.1                  Subject to allgovernmental rules, regulations and guidelines applicable thereto, Landlordshall provide heating, ventilation and air conditioning (“HVAC”) to thePremises in a manner consistent with a first class office building from Mondaythrough Friday, from 8:00 a.m. to 6:00 p.m. and on Saturday from 9:00 a.m. to1:00 p.m., except for the celebratory days of the following holidays: NewYear’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving andChristmas (collectively “Business Hours”).  **After hours HVAC is currentlyavailable to Tenant at no direct charge for the first five (5) years of theLease Term but shall be included in Operating Costs under Article 4.  Thereafter, Landlord may charge Tenant forafter-hours HVAC cost, at Landlord’s actual cost, calculated to include wearand tear and amortization of equipment and electrical.**

 

13.1.2                  Landlord shallat all times provide electricity to the Premises for lighting and power of notless than three (3) watts per rentable square foot demand load on acontinuous annualized basis.  Landlordshall also provide electrical lighting in all Common Areas, parking facilitiesor storage areas and replace building standard lamps and ballasts as required.

 

13.1.3                  Landlord shallprovide hot and cold water to the Building’s rest rooms (and, as applicable, toany sink, refrigerator or dishwasher in the Premises).

 

13.1.4                  Landlord shallprovide passenger elevator service at all times; provided, however, afterBusiness Hours, Landlord may decrease the availability of passenger elevatorservice so long as at least one car services the floor on which the Premisesare located.

 

13.1.5                  Landlord shallprovide non-exclusive freight elevator service to Tenant, subject to reasonableand non-discriminatory scheduling by Landlord. After Business Hours, Tenant maybe charged at a rate equal to Landlord’s cost of providing such freightelevator service.

 

13.1.6                  Landlord shallprovide **24-hour** securityfor the Project in a manner consistent with the security systems, equipment andprocedures maintained in **comparable firstclass office buildings** in the Project area. **In addition to Landlord’s covenant to provide 24-hoursecurity to the Project, Tenant shall have the right to provide to the Premisesits own security system.**

 

13.1.7                  Landlord shallprovide normal janitorial services five (5) days per week, similar to thatfurnished in comparable first class office buildings in the Project area and inaccordance with the building standard janitorial and cleaning servicespecifications.

 

13.1.8                  Landlord shallprovide grounds care, including the sweeping of walkways and parking areas,removal of rainwater (as may be required) and maintenance of the landscaping inan attractive manner consistent with other office buildings in the Projectarea.

 

13.1.9                  Landlord shalloperate and maintain the Project in accordance with the standards ofmaintenance and operation as are customary for other comparable first classbuildings in the Project area.

 

13.1.10            Landlord shall providecontrolled access to the Premises 24 hours a day, every day.

 

13.2                           Withoutthe prior written consent of Landlord, Tenant shall not use in the Premises anyapparatus, device, machine or equipment that uses excess lighting, heating,ventilation or air conditioning, electricity or water; nor shall Tenant connectany apparatus or device to sources of electrical current or water exceptthrough existing electrical outlets or water pipes in the Premises.  If Tenant requires electricity in excess ofthe amount provided pursuant to Article 13.1.2 herein, or any other resource inexcess of that customarily supplied for use of similar premises in comparablefirst class buildings in the Project

 

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area, Tenant shall first request the consent of Landlord.  As a condition to its consent, Landlord maycause a separate metering device to be installed in the Premises, at Tenant’scost and expense.  Tenant shall promptlypay the cost of all excess resources consumed within the Premises, togetherwith any additional administrative expenses incurred by Landlord in connectiontherewith.  Any sums payable by Tenantto Landlord under this Article 13 also shall be considered Additional Rent andmay be included in any installment of Rent thereafter becoming due.  Landlord shall have the same remedies for adefault in payment of such sums as for a default in the payment of Rent.

 

13.3                           Except asprovided otherwise in this Lease, Landlord shall not be in default or be liablefor any damages directly or indirectly resulting from any interruption ofutilities or services caused by: (a) the installation or repair of anyequipment in connection with the furnishing of utilities or services; (b) actsof God or the elements, labor disturbances of any character, any otheraccidents or any other conditions beyond the reasonable control of Landlord, ordue to repairs or improvements to the Premises or the Project; or (c) thelimitation, curtailment, rationing or restriction imposed by any governmentalagency or service or utility supplier on use of water or electricity, gas orany other form of energy or any other service or utility whatsoever serving thePremises or the Project.  .

 

14.                                 **EstoppelCertificate****                                    **Within**twenty (20)** days after anywritten request from Landlord, Tenant shall execute and deliver to Landlord acertificate (the “Estoppel Certificate”) provided by Landlord’s current orprospective lender or prospective purchaser stating: (a) that this Lease isthen in full force and effect and has not been modified (or if modified,setting forth all modifications or attaching all amendments to the Lease), (b)the then current Base Rent and the date to which said Rent has been paid, and(c) whether or not Landlord is then under default of this Lease and if so, thenature of such default and date notice of default was given Landlord. Landlordand Tenant intend that any existing or prospective lender or any prospectivepurchaser or assignee of Tenant may rely on such Estoppel Certificate.  Failure of Tenant to provide**, within five (5) days after notice and opportunity tocure,** Landlord with a Estoppel Certificate as provided aboveshall be a default under the Lease.

 

15.                                 **Subordination;Requirements of Lenders.**

 

15.1                           This Leaseshall be subject and subordinate at all times to (a) all ground leases orunderlying leases which may now exist affecting all or any portion of theProject, and (b) the lien of any mortgage or deed of trust which may now existaffecting all or any portion of the Project.

 

15.2                           If anyground lease or underlying lease terminates for any reason or any mortgage ordeed of trust is foreclosed or a deed in lieu of foreclosure is made for anyreason, then Tenant shall, notwithstanding any subordination, attorn to andbecome the tenant of the successor-in-interest.   It shall be a condition to any future subordination of thisLease that the ground lessor, air space lessor, or mortgagee or beneficiaryrequesting such subordination shall agree that so long as Tenant is not indefault under this Lease **as definedArticle 17**, Tenant’s possession of the Premises shall not bedisturbed as a result of such termination, foreclosure or deed in lieu offoreclosure. Tenant shall execute and deliver, within thirty (30) days ofdemand by Landlord, any additional, commercially reasonable documentsevidencing the priority or subordination of this Lease and the attornment ofTenant with respect to any such ground leases or underlying leases or the lienof any such mortgage or deed of trust. [**SeeArticle 44 of the Lease Addendum.**]

 

16.                                 **Access byLandlord.**

 

16.1                           Landlord(and its agents, contractors and employees) reserves the right, withoutabatement of Rent, to enter the Premises at reasonable times and afterreasonable advance notice (except in cases of emergency) to inspect it, tosupply janitorial services and any other service to be provided by Landlord toTenant hereunder, to show the Premises to any prospective purchaser,beneficiary, mortgagee, to post notices of non-responsibility, to make anyalteration, improvement or repair to the Premises required by law or consentedto by Tenant, or, during the last six (6) months of the Lease Term, to show itto prospective tenants.  For the purposeof making any alterations, improvement or repair to the Premises or any portionof the Project, Landlord may erect, use and maintain scaffolding, pipes,conduits and other necessary structures in and through the Project and thePremises where reasonably required by the character of the work to be performedand in conformance with good construction practices, provided that entrance tothe Premises shall not be blocked thereby, and provided further that Landlordworks expeditiously and uses its best efforts to minimize any interference withTenant’s use of and access to the Premises. At Tenant’s election, Tenant may accompany Landlord and all personsentering under the authority or right of Landlord, during any such entry.  Tenant hereby waives any claim for damagesor abatement of Rent for any injury or inconvenience to or interference withTenant’s business, any loss of occupancy or quiet enjoyment of the Premises,and any other loss occasioned thereby, except as otherwise set forth in theLease or to the extent arising from the negligence, recklessness or willfulmisconduct of Landlord or Landlord’s employees, agents, representatives,contractors, or invitees.

 

16.2                           Foreach of the aforesaid purposes, Landlord shall at all times have and retain akey to all of the doors in, upon and about the Premises, excluding Tenant’svaults and safes, and Landlord shall have the right to use any and all meanswhich Landlord may deem reasonably necessary or proper to open said doors inany emergency, and any such entry to the Premises or portions thereof byLandlord shall not under any circumstances be construed or deemed to be aforcible or unlawful entry into, or a detainer of, the Premises, or aneviction, actual or constructive, of Tenant from the Premises or any portionthereof. If at any time during the Lease Term Tenant wishes to re-key itsPremises, all such re-keying shall be done by Landlord with locks and hardwaresupplied by Landlord all at Tenant’s sole cost and expense.

 

17.                                 **Default byTenant**.

 

17.1                           Theoccurrence of any of the following shall constitute a breach of the Lease, anda default if not cured by Tenant after notice and a reasonable opportunity tocure such breach:

 

17.1.1                  Failure byTenant to pay Rent or any amount due hereunder when such amount becomes payablein accordance with this Lease, or to duly, promptly and completely perform anyobligation of Tenant under Articles 14 or 15 above, and continuation of suchfailure for a period of three (3) business days after receipt of the writtenstatutory notice from Landlord to Tenant specifying the nature of such failure.

 

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17.1.2                  Failure byTenant in the due, prompt and complete performance or observance of any otherexpress or implied covenant, agreement or obligation of Tenant contained inthis Lease, and the continuation of such failure for a period of thirty (30)days after written notice from Landlord to Tenant specifying the nature of suchfailure; provided, however, that if any such failure cannot reasonably be curedwithin such period, Tenant shall not be deemed to be in default hereunder ifTenant promptly commences such cure within such period and thereafterdiligently pursues such cure to completion.

 

17.1.3                  Tenant’sabandoning the Premises, which shall mean for these purposes, Tenant’s absencefor a period of more than two (2) weeks from the Premises while otherwise indefault of this **Lease as described in thisArticle 17**.

 

17.1.4                  Tenant,its assignee, sublessee, other transferee, successor or any guarantor of thisLease gives to Landlord any financial statement or representation which provesto be materially false or materially misleading.

 

17.1.5                  The insolvencyof Tenant; the making by Tenant of any assignment for the benefit of creditors;the filing by or against Tenant of a petition to have Tenant adjudged bankruptor of a petition for reorganization or arrangement under any law relating tobankruptcy, insolvency or creditors’ rights in general (unless in the case of apetition filed against Tenant, the same is dismissed within sixty (60) days);the appointment of a trustee or receiver to take possession of all or asubstantial part of Tenant’s assets or of Tenant’s interest under this Lease,where such seizure is not discharged within sixty (60) days.  The occurrence of any of the acts or eventsreferred to in this Article with respect to any Guarantor of this Lease shallalso constitute a default hereunder.

 

17.1.6                  The attachment,execution or other judicial seizure of a substantial portion of Tenant’s assetsor of Tenant’s interest in this Lease, where such seizure is not dischargedwithin sixty (60) days.

 

17.2                           The noticesreferred to in Article 17.1.1 and 17.1.2 above shall be in lieu of, and not inaddition to, any notice required under Section 1161 et seq. of the CaliforniaCode of Civil Procedure.

 

18.                                 **Remedies ofLandlord**.

 

18.1                           In theevent of Tenant’s default under this Lease as provided in Article 17 above,Landlord, at Landlord’s option, and without limiting Landlord in the exerciseof any other right or remedy Landlord may have on account of such default, andwithout any further demand or notice, may terminate this Lease, recoverpossession of the Premises and/or, to the extent permitted by California CivilCode Section 1951.3 or any other law, remove all persons and property from thePremises, which property shall be stored by Landlord at a warehouse orelsewhere at the risk, expense and for the account of Tenant.

 

18.2                           Ontermination of this Lease as provided in Article 18.1 above, Landlord shall beentitled to recover from Tenant the aggregate of:

 

18.2.1                  The worth at thetime of the award of the unpaid Rent, as defined in Article 3.2, late chargesand interest earned as of the date of the termination hereof;

 

18.2.2                  The worth at thetime of the award of the amount by which the unpaid Rent, late charges,interest and other amounts due hereunder, which would have been earned afterthe date of termination hereof until the time of the award, exceeds the amountof such unpaid Rent, late charges and interest that Tenant proves could havebeen reasonably avoided by Landlord mitigating its damages;

 

18.2.3                  The worth at thetime of the award of the amount by which the unpaid Rent for the balance of theterm hereof after the time of the award exceeds the amount of such unpaid Rent,interest and late charges that Tenant proves could have been reasonably avoidedby Landlord mitigating its damages; and

 

18.2.4                  Any other amountnecessary to compensate Landlord for the detriment proximately caused byTenant’s uncured default under this Lease, including but not limited tobrokerage commissions and advertising expenses, expenses incurred for removingand storing any of Tenant’s property remaining on the Premises, expenses ofremodeling the Premises for a new tenant and any special concessions made toobtain a new tenant.

 

18.3                           For thepurposes of this Article 18, the “time of the award” shall mean the date uponwhich the judgment in any action brought by Landlord against Tenant by reasonof such default is entered or such earlier date as the court may determine; the“worth at the time of award” (referred to in Articles 18.2.1 and 18.2.2) shallbe computed by including interest at the Interest Rate and late charges setforth in Article 27 below; and the “worth at the time of award” (referred to inArticle 18.2.3) shall be computed by applying the discount rate of the FederalReserve Bank of San Francisco at the time of the award plus one percent (1%)per annum.

 

18.4                           Nothingin this Article 18 shall be deemed to alter Landlord’s right to indemnificationunder the indemnification clause or clauses contained in this Lease for claimsor liabilities arising from events occurring prior to the termination of thisLease.

 

18.5                           Notwithstandinganything to the contrary set forth herein, Landlord’s reentry into the Premisesto perform acts of maintenance or preservation of, or in connection withefforts to relet the Premises, or any portion thereof, or the appointment of areceiver upon Landlord’s initiative to protect Landlord’s interest under thisLease shall not terminate Tenant’s right to possession of the Premises or anyportion thereof and, until Landlord does elect to terminate this Lease, thisLease shall continue in full force and Landlord may pursue all its remedieshereunder including, without limitation, the right to recover from Tenant asthey become due hereunder all Rent and other charges required to be paid byTenant under the terms of this Lease.

 

18.6                           IfTenant abandons the Premises, or if Landlord elects to reenter or take possessionof the Premises pursuant to any legal proceeding or pursuant to any noticeprovided by law, and until Landlord elects to terminate this Lease, Landlordmay, from time to time, without terminating this Lease, recover all Rent as itbecomes due under Article 18.5 above, subject to interest and late charges asset forth in Article 27, and/or relet the Premises or any part thereof for theaccount of and on behalf of Tenant, on any terms, for any term (whether or notlonger than the Lease Term) and at any rental rate as Landlord in itsreasonable discretion may deem advisable, and Landlord may make any alterationsand repairs to the Premises in connection therewith.  In the event that Landlord shall elect to so relet the Premiseson behalf of Tenant, then base rent and additional rent received by Landlordfrom such reletting shall be applied:

 

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18.6.1                  First, toreimburse Landlord for the reasonable costs and expenses of such reletting(including, without limitation, legal and other costs and expenses ofrepossessing the Premises, removing persons and property therefrom, obtainingnew tenants, brokerage fees, costs of preparing the Premises for occupancy bysuch new tenants, and, if Landlord maintains and operates the Premises, thecosts thereof).

 

18.6.2                  Second, to thepayment of any indebtedness of Tenant to Landlord other than Base Rent,adjustments to Base Rent, Additional Rent and other sums due and unpaidhereunder.

 

18.6.3                  Third, to thepayment of Rent and other sums due and unpaid hereunder; the residue, if any,shall be held by Landlord and applied in payment of other or future obligationsof Tenant to Landlord as they may become due and payable.

 

18.7                           Shouldthe rent received from such reletting, when applied in the manner and orderindicated above, be less than the total amount owing from Tenant pursuant tothis Lease, then Tenant shall pay such deficiency to Landlord, and if Tenantdoes not pay such deficiency within five (5) days of its receipt of writtennotice, Landlord may bring an action against Tenant for recovery of suchdeficiency or pursue its other remedies hereunder or under California CivilCode Section 1951.8, California Code of Civil Procedure Section 1161 et seq.,or any similar, successor or related provision of law.

 

18.8                           Allrights, powers and remedies of Landlord under the Lease and any other agreementbetween Landlord and Tenant shall be cumulative and not alternative and shallbe in addition to all rights, powers and remedies given to Landlord at law orin equity.  The exercise of any one ormore of such rights or remedies shall not impair Landlord’s right to exerciseany other right or remedy, including, without limitation, any and all rights andremedies of Landlord under California Civil Code Section 1951.8, CaliforniaCode of Civil Procedure Section 1161 et seq., or any similar, successor orrelated provision of law.

 

18.9                           **[Intentionally Deleted]**

 

18.10                     If Tenantabandons the Premises and leaves behind any items of personal property, thenLandlord shall store such property at Tenant’s cost and expense at a warehouseor any other location at the risk of Tenant, and Tenant’s property shall bereleased only upon Tenant’s payment of any and all moving and storage charges,as well as any expense or damages incurred as a result of the removal, movingand storage of such property, together with all sums due and owing under thisLease. If Tenant does not reclaim such property within the period permitted bylaw, Landlord may sell such property in accordance with law and apply theproceeds of such sale to any sums due and owing hereunder, or retain saidproperty, granting Tenant credit against sums due and owing hereunder for thereasonable value of such property.

 

18.11                     To the extentpermitted by law, Tenant and Landlord each hereby waive all provisions of, andprotection under, any decisions, statutes, rules, regulations and other laws ofthe State of California to the extent same are inconsistent and in conflictwith specific terms and provisions of this Article 18.

 

19.                                 **Default byLandlord; Limitation of Liability.**

 

19.1                           Landlordshall not be deemed to be in default hereunder unless Landlord does not performits material obligations under the Lease after written notice of Landlord’sbreach by Tenant to Landlord and to such other parties whose names andaddresses are furnished to Tenant.  Thenotice shall specify that Landlord has failed to perform such obligations;provided, however, that if the nature of such obligations is such that more thanthirty (30) days are reasonably required for their cure, Landlord shall not bedeemed to be in default hereunder if Landlord or any such other party(ies)commences such cure within such thirty (30) day period and thereafterdiligently pursues such cure to completion.

 

19.2                           If Landlordis in default hereunder and, as a consequence thereof, Tenant recovers ajudgment against Landlord, such judgment may be satisfied only out of theright, title and interest of Landlord in the Project and out of the rent or otherrevenue receivable by Landlord from the Project, or out of the proceedsreceivable by Landlord from the sale or other disposition of all or any portionof Landlord’s right, title and interest in the Project. Neither Landlord norany of the partners of Landlord shall be personally liable for any deficiencyor otherwise.

 

20.                                 **Damage andDestruction.**

 

20.1                           If theProject (whether or not including the Premises) is damaged by an insuredcasualty (or a casualty for which Landlord is required to insure under theterms of this Lease) occurring more than six (6) months prior to the expirationof this Lease and any extensions thereof, Landlord shall forthwith repair same,or cause same to be repaired, to the extent that insurance proceeds are madeavailable to Landlord therefor and provided that such repairs can, inLandlord’s reasonable opinion, be made within one hundred eighty (180) daysfrom the date of such damage  under thelaws and regulations of the federal, state and local governmental authoritieshaving jurisdiction thereof.  Landlordagrees to repair any casualty damage as long as the uninsured portion of suchcasualty damage does not exceed $15.00 per rentable square foot.

 

20.2                           If (a)the Premises or the Project is damaged by an uninsured casualty which costsmore than $15.00 per rentable square foot to repair, (b) the casualty repairrequires more than one hundred eighty (180) days to complete without payment ofovertime or other premium or (c) if the Premises, or the Project is damaged bya casualty as described in Article 20.1 above within the last six (6) months ofthis Lease and any extensions thereof, then Landlord shall have the optionwithin **thirty** (**30**) days from the date of such damageeither to (1) notify the Tenant of its election to continue the Lease, in whichevent Landlord shall thereafter repair such damage; or (2) notify the Tenant ofits election to immediately terminate this Lease, in which event this Leaseshall be so terminated.  Landlord shallrefund to Tenant any Rent previously paid for any period of time subsequent tothe earlier of such termination or untenantability of the Premises.  Notwithstanding any contrary provisionherein, Landlord shall not be required to repair any casualty damage to theproperty of Tenant or to repair or replace any paneling, decorations, railings,floor coverings, alterations, additions, fixtures or improvements installed onthe Premises by or at the expense of Tenant. **To the extent permitted by law,**Tenant hereby waives the provisions of Section 1932, subdivision 2, and Section1933, subdivision 4, of the Civil Code of California, and any similar law,statute or ordinance now or hereafter in effect.

 

20.3                           Untilthe Premises are restored, Rent shall be abated in the proportion that the areaof the Premises rendered unusable by Tenant bears to the total area of thePremises.  Except for abatement of Rent,Tenant shall have no claim against the Landlord for any damage suffered byreason of (a) any damage to the Premises, (b) such repairs, or (c) any inconvenience,

 

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interruption, annoyance, loss of business, or continued expense ofoperation caused by such damage or repair, except to the extent resulting fromthe negligence, recklessness or willful misconduct of Landlord, its employeesagents, representatives, contractors or invitees.

 

20.4                           Shouldthe Premises be damaged or destroyed by fire or other casualty insured under astandard fire and casualty insurance policy (or which could be insured under astandard fire and casualty insurance policy), Landlord shall within **forty-five** (**45**) days of the date of the casualty,notify Tenant in writing of Landlord’s good faith estimate of the timenecessary to repair and rebuild the Premises. If such estimate sets forth a period of one hundred eighty (180) days orless, Landlord shall, except as otherwise provided herein this Article, repairand/or rebuild the same with reasonable diligence.  Landlord’s obligation hereunder shall be limited to the Buildingand Tenant Improvements originally provided by Landlord at the CommencementDate, and any alterations provided by Landlord that Landlord has not requestedTenant to remove upon expiration of the Lease Term.

 

21.                                 **EminentDomain.**

 

21.1                           If theentire Premises, or enough thereof so as to render the balance thereof notreasonably usable for the conduct of Tenant’s business, is taken orappropriated by a governmental agency under the power of eminent domain orconveyed in lieu thereof, either party hereto may terminate this Lease byserving written notice upon the other party hereto within thirty (30) daysthereafter.  If any substantial part ofthe Project excluding the Premises is taken or appropriated by a governmentalagency under the power of eminent domain or conveyed in lieu thereof, Landlordmay so terminate this Lease.  In eitherevent, Landlord shall receive (and Tenant shall assign to Landlord upon demandby Landlord) any income, Rent, award or any interest therein which may be paidin connection therewith, and Tenant shall have no claim for any part of any sumso paid, whether or not attributable to the value of the unexpired Lease Term;provided, however, that nothing herein shall prevent Tenant from pursuing aseparate award in connection with the taking of Tenant’s removable tangiblepersonal property placed in the Premises solely at Tenant’s expense, forTenant’s relocation costs and for loss of goodwill.

 

21.2                           If apart of the Premises is so taken, appropriated or conveyed by a governmentalagency, and neither party hereto elects to terminate this Lease, then Base Rentand Additional Rent payable hereunder shall be abated in the proportion thatthe portion of the Premises so taken, appropriated or conveyed bears to thearea of the entire Premises.

 

21.3                           Notwithstandinganything to the contrary contained in this Article 21, if the temporary use oroccupancy of any part of the Premises (for a period not to exceed 60 days) istaken or appropriated by a governmental agency under the power of eminentdomain or conveyed in lieu thereof during the Lease Term, this Lease shall beand remain unaffected by such taking, appropriation or conveyance and Tenantshall continue to pay in full all Rent payable by Tenant.  In the event of any such temporary taking,appropriation or conveyance, Tenant shall be entitled to receive that portionof any award that represents compensation for loss of this use or occupancy ofthe Premises during the Lease Term, and Landlord shall be entitled to receivethe balance of such award.  To the extentthat it is inconsistent with the above, each party hereto hereby waives theprovisions of Section 1265.130 of the California Code of Civil Procedureallowing either party to petition a court to terminate this Lease in the eventof a partial taking of the Premises.

 

22.                                 **Sale byLandlord.**                                                            IfLandlord sells or transfers all or any portion of the Project including thePremises, Landlord shall, upon consummation of the sale or transfer, bereleased from any liability relating to its obligations or covenants thereafterto be performed or observed under this Lease, and Tenant agrees to look solelyto Landlord’s successor-in-interest with respect to such liability.  If Landlord transfers or credits anysecurity deposit or prepaid Rent to Landlord’s successor-in-interest, then uponsuch transfer Landlord shall be discharged from any further liability therefor.

 

23.                                 **Surrender ofPremises.**                         Uponthe expiration or sooner termination of the Lease, Tenant shall surrender toLandlord the Premises broom clean and free of debris, with all repairs,changes, alterations, additions and improvements thereto, in good order,condition and repair, ordinary wear and tear and damage from insured casualtyexcepted.  At Tenant’s sole cost and expense,Tenant shall upon expiration or sooner termination of the Lease: (a) remove itspersonal property from the Premises; (b) remove any improvements to thePremises caused to be installed by Tenant that Landlord may require Tenant toremove pursuant to Article 7.3; and (c) repair any damage caused by the removalof any such property or improvements. If Tenant leaves any personal property at the Premises, Landlord mayremove such personal property and dispose of it, at Tenant’s expense.

 

24.                                 **QuietEnjoyment.**                                                            Solong as Tenant is not in default hereunder, Tenant shall have the right to thequiet peaceful enjoyment and possession of the Premises and the use of theCommon Areas during the Lease Term, subject to the terms and conditions of thisLease.

 

25.                                 **Notices.**    Any notice, demand or othercommunication to be given under the provisions of this Lease shall be inwriting to the appropriate address set forth in Article 1.1.10 (or such addressfurnished by either party hereto to the other party hereto in writing) andshall be (a) personally served, (b) mailed by United States registered orcertified mail, return receipt requested, postage prepaid, (c) sent by anationally recognized courier service (e.g. Federal Express) for next daydelivery, to be confirmed in writing by such courier or (d) sent by electronicfacsimile with appropriate provisions for confirmation of receipt.  Service by mail shall be deemed complete onthe day of actual delivery as shown by the addressee’s registered or certifiedmail receipt or at the expiration of the third business day after the date ofmailing, whichever first occurs. Service by personal service or courier shall be deemed complete onreceipt.  Service by electronicfacsimile shall be deemed complete on confirmation of receipt if received priorto the close of business, and on the next business day if received after theclose of business.

 

26.                                 **PersonalProperty Taxes.**                Tenantshall pay before delinquency all taxes, assessments, license fees and othercharges (collectively, “Tenant’s Taxes”) that are levied and assessed againstTenant’s trade fixtures and other personal property installed or located in oron the Premises that become payable during the Lease Term.  On demand by Landlord, Tenant shall furnishLandlord with satisfactory evidence of such payments.  If any taxes on Tenant’s personal property are levied againstLandlord or Landlord’s property, or if the assessed value of the Building isincreased by the inclusion of a value placed on Tenant’s personal property orabove-standard leasehold improvements, Tenant, on demand, shall immediatelyreimburse Landlord for any such taxes. Landlord shall have the right to pay these taxes regardless of thevalidity of the levy.

 

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Notwithstanding the foregoing, Landlord agrees to: (a) notify Tenant inwriting prior to paying any taxes under this Article 26 on Tenant’s behalf(“Landlord’s Tax Notice”), and (b) not pay any such taxes on Tenant’s behalf ifTenant notifies Landlord in writing within five (5) business days after itreceives Landlord’s Tax Notice that Tenant, in good faith, disputes that theassessed taxes are properly due and owing by Tenant, provided that Tenantdiligently pursues such dispute with the appropriate taxing authority in goodfaith within thirty (30) days from notice.

 

27.                                 **Interest andLate Charges**.                                               AnyRent, Additional Rent or other amount not paid by Tenant to Landlord when duehereunder shall bear interest from the due date until paid, unless otherwisespecifically provided herein, at a rate (the “Interest Rate”) equal to thelesser of (a) the rate per annum announced from time to time by Bank ofAmerica, N.A. as its prime rate (or, if such bank fails to announce such rate,then the prime rate announced by the Chase Manhattan Bank, USA, N.A.) plus two(2) percentage points, or (b) the maximum rate permitted by law.  The payment of such interest shall notexcuse or cure any such default by Tenant under this Lease.  In addition to such interest, if any Rent,Additional Rent or other amount is not paid within ten (10) days of when due, alate charge equal to five percent (5%) of such amount shall be assessed againstTenant, which late charge Tenant hereby agrees is a reasonable estimate of thedamages Landlord would suffer as a result of Tenant’s late payment.  The parties agree that it would beimpracticable and extremely difficult to fix Landlord’s actual damages in suchevent.  Such interest and late chargesare separate and cumulative and are in addition to and shall not diminish orsubstitute for any or all of Landlord’s rights or remedies under any otherprovision of this Lease.

 

28.                                 **CollectionAgency and Attorneys’ Fees**.**                         **Tenantshall pay the costs incurred by Landlord if Landlord uses a collection agencyor attorneys to collect any moneys unpaid by Tenant or to enforce the terms ofthis Lease. In any action to enforce or interpret this Lease, including anysuit by Landlord for the recovery of Rent or possession of the Premises, thenon-prevailing party shall pay to the prevailing party its actual attorneys’fees.  The prevailing party will bedetermined by the court, arbitrator or arbitration panel before whom the actionwas brought based upon an assessment of which party’s major arguments orpositions could fairly be said to have prevailed. Any attorneys’ fees and othercosts and expenses incurred by the prevailing party in enforcing a judgmentunder this Lease shall be recoverable separately from and in addition to anyother amount included in such judgment in favor or the prevailing party.

 

29.                                 **Light andAir.****                  **Tenantcovenants and agrees that no diminution of light, air or view by any structurethat may hereafter be erected shall entitle Tenant to any reduction of Rentunder this Lease, result in any liability of Landlord to Tenant, or in anyother way affect this Lease or Tenant’s obligations hereunder.

 

30.                                 **Signs andDirectory.**

 

30.1                           Withoutthe prior written consent of Landlord, Tenant shall not place, construct ormaintain any sign, advertisement, awning, banner or other decoration on orvisible from, or otherwise use, the exterior of the Premises or any otherportion of the Project.  All door signson the exterior of the Premises must be installed by Landlord, at Tenant’s solecost and expense or as part of any tenant improvement allowance, that theLandlord provides for installation of improvements to the Premises, and mustconform to standards of the Project as to size, style, placement, color andnumber of the names, and other matters as reasonably determined by Landlord.  In the event that Tenant violates theforegoing, Landlord may remove the sign without any liability, and may chargeTenant the expense incurred, including but not limited to the cost incurred forthe repair of the wall, door surface or other area on which the sign was mounted.

 

30.2                           Landlordshall place, construct and maintain a directory in the Building lobby and insuch other locations, if any, as Landlord, in its sole discretion, maydetermine, which directory(ies) shall be for the display of the business namesof Building tenants and their respective suite numbers.  Landlord shall have the sole right todetermine and change from time to time the type of such directory(ies) and allcommon Project signage, including, but not limited to, size of letters, style,color content and placement.  Tenantshall have the right at Landlord’s cost to three (3) lines per directory per1,000 rentable square feet of the Premises, but listings on such directory(ies)shall be limited to professional personnel of Tenant located principally at thePremises.  Tenant shall notify Landlordin writing of the business names that it desires to include on any suchdirectory and shall, upon demand by Landlord, pay the cost associated with anysubsequent changes to such names on the directory.

 

31.                                 **Parking.****                                              **Subjectto applicable rules and regulations any other charges, fees and taxes to becollected by Landlord, or other parking operator, Tenant shall have the right,but not the obligation, throughout the Lease Term to lease the number ofparking spaces in the parking facility that serves the Building at such parkingrate(s) and upon such other terms as may be specified in Article 1.1.11.  Notwithstanding anything to the contrarycontained herein, Tenant shall be obligated to lease at least fifty percent (50%)of the parking spaces designated in Article 1.1.11 for the entire LeaseTerm.    Tenant may lease additionalparking spaces on an “as available” monthly basis.  If Tenant desires to relinquish any of the spaces that Tenant isleasing, Tenant shall give not less than thirty (30) days notice thereof toLandlord.  Tenant may not sell, assignor transfer its parking rights hereunder, except pursuant to a permittedsublease or assignment of this Lease. Except as may otherwise be specifically provided elsewhere in thisLease, Tenant shall not be entitled to any designated, reserved, assigned orvalet parking. Landlord reserves the right to establish and alter, from time totime, on a non-discriminatory basis, all parking rates, rules and regulations,provided said rates shall be comparable to rates charged by other similarbuildings in the Project area.  Tenantmay purchase validation stickers at the prevailing rate then charged by theProject. **See also Article 46 of the LeaseAddendum.**

 

32.                                 **BrokerageFees.****    **Landlord shall have noobligation to pay commissions or fees to any real estate broker, finder orintermediary other than Tenant’s Broker, if any, listed in Article 1.1.13 andHeld Properties, Inc., who represents Landlord.  Landlord and Tenant each warrant that with respect to this Leaseneither has dealt with any other real estate broker, finder orintermediary.  To the extent that Tenantbreaches the foregoing, any commissions or fees payable with respect to thisLease shall be paid exclusively by Tenant, and Landlord shall have noobligation of any kind with respect to such commissions or fees.  Landlord agrees to pay a commission toTenant’s Broker pursuant to a separate agreement.

 

33.                                 **RelocationRight.****                                                **[**Intentionally Deleted**]

 

34.                                 **Authority.**                                        IfTenant is a corporation, trust or partnership, each individual executing thisLease on behalf of Tenant represents and warrants that he or she is dulyauthorized to so execute and deliver this Lease, and within ten (10) days

 

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after its execution shall deliver to Landlord satisfactory evidence ofsuch authority.  If Tenant or Guarantoris a corporation, it shall, upon demand, also deliver satisfactory evidence of(a) good standing in California, and in Tenant’s or Guarantor’s state ofincorporation, (b) qualification to do business in California, and (c) acorporate resolution duly certified by the secretary of Tenant or Guarantorauthorizing execution and delivery of this Lease or Guarantee, as the case maybe, by the parties who have signed it on behalf of Tenant or Guarantor.

 

35.                                 **Miscellaneous.**

 

35.1                           Ifeither Landlord or Tenant waives the performance of any term, covenant orcondition contained in this Lease, such waiver shall not be deemed to waive anyother breach of the same or of any other term, covenant or condition containedherein.  Furthermore, the acceptance ofRent by Landlord shall not constitute a waiver of any preceding breach byTenant of any term, covenant or condition of this Lease, other than the failureof Tenant to pay the particular Rent so accepted, regardless of Landlord’sknowledge of such breach at the time of Landlord’s acceptance of suchRent.  Failure by Landlord to enforceany of the terms, covenants or conditions of this Lease for any length of timeshall not be deemed to waive or to affect the right of Landlord to insistthereafter upon strict performance by Tenant. Landlord’s or Tenant’s waiver of any term, covenant or condition of thisLease may only be made by a written document signed by the waiving party.

 

35.2                           Anyvoluntary or other early surrender of this Lease by Tenant, mutual terminationhereof or prior termination hereof by Landlord shall not work a merger, andshall, at the option of Landlord, terminate all or any existing subleases orsub-tenancies.  If Landlord elects toassume any sublease or enter into a lease with any subtenant, such assumptionshall not relieve Tenant of any remaining liability under this Lease.

 

35.3                           ThisLease shall not be recorded; and no memorandum of lease shall be recordedwithout Landlord’s prior written consent.

 

35.4                           Rent,Additional Rent and all other sums payable under this Lease must be paid inlawful money of the United States of America.

 

35.5                           ThisLease may be executed in counterparts with the same effect as if both partieshereto had executed the same document. Both counterparts shall be construed together and shall constitute asingle lease.

 

35.6                           Nothingcontained in this Lease shall be construed to create the relationship ofprincipal and agent, partnership, joint venture or any other relationshipbetween the parties hereto, other than the relationship of Landlord and Tenant.

 

35.7                           Anyprovision of this Lease that proves to be invalid, void or illegal shall in noway affect, impair or invalidate any other provision hereof, and such otherprovisions shall remain in full force and effect.

 

35.8                           Theterm “Premises” shall be deemed to include (unless, based on the context, suchmeaning would clearly be unintended) the space hereby demised and allimprovements on or at any time hereafter constructed or built in such space.

 

35.9                           Theterm “Tenant” or any pronoun used in place thereof shall indicate and includethe masculine or feminine, the singular or plural number, individual, firms orcorporations, and any Tenant’s successor in interest.

 

35.10                     The sectionheadings herein are for convenience of reference only and shall in no waydefine, increase, limit or describe the scope or intent of any provision ofthis Lease.

 

35.11                     If this Leaseis entered into by co-tenants, the obligations of such co-tenants hereundershall be joint and several.

 

35.12                     Time is ofthe essence of this Lease and all of its provisions.

 

35.13                     The laws ofCalifornia shall in all respects govern this Lease.  The parties acknowledge that the laws of California may change byvirtue of legislative enactment or judicial decision.  The parties further acknowledge that they have entered into thisLease based on the laws of California at the time of the execution of thisLease, and each hereby expressly waives any future rights, benefits, oradvantages derived from or as a result of any future changes in the law ofCalifornia to the extent not inconsistent with the terms of the Lease.  In any action or proceeding arisingtherefrom, Tenant hereby consents to (a) the jurisdiction of any competentcourt within the state of California, (b) service of process by any meansauthorized by the laws of the state of California, and (c) trial without a juryexcept for actions primarily based upon personal injury.

 

35.14                     This Leasecontains the entire agreement of the parties hereto with respect to the subjectmatter hereof and supersedes any previous negotiations, and may not bemodified, except by a written document executed by the parties hereto.  There have been no representations orunderstandings made between the parties other than those set forth in thisLease.  Without limiting the generalityof the foregoing, Tenant specifically acknowledges and agrees that neitherLandlord nor any broker, agent or representative thereof has made any warrantyor representation with respect to the tenant mix of the Building, the identityof prospective tenants or other tenants of the Building, profitability orsuitability of the Premises for Tenant’s use, the state of repair of theProject and the Premises, or the amount and extent of provided services, exceptas otherwise specifically set forth herein.

 

35.15                     If anyguarantee of this Lease is required by Landlord, such guarantee shall be in theform and content attached hereto or, if none, as supplied and/or approved byLandlord.

 

35.16                     The words“person” and “persons” as used herein shall include individuals, firms,partnerships, associations and corporations.

 

35.17                     The languagein all parts of this Lease shall be construed simply according to its fairmeaning, and not strictly for or against Landlord or Tenant.  Any reference to any Article herein shall bedeemed to include all subsections thereof unless otherwise specified orreasonably required from the context. Any reference to “days” or “months” herein shall refer to calendar daysor months, respectively, unless specifically provided to the contrary.  Unless clearly inconsistent with thecontext, any reference herein to the “term hereof” or “the Lease Term” shallrefer to the term of this Lease as the same may be extended pursuant to anyextension option(s) contained herein. The terms “herein”, “hereunder” and “hereof” as used in this Lease shall

 

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mean “in this Lease” and “under this Lease” or “of this Lease”respectively, except as otherwise specifically set forth in this Lease.

 

35.18                     All exhibitsand the addendum referred to in this Lease are incorporated herein as a parthereof.

 

35.19                     Tenant herebyacknowledges and agrees that the exterior walls of the Building and the areabetween the demising walls of premises and the finished ceilings and floors ofthe Premises and the slab of the floor above or below have not been demisedhereby and that the use thereof, together with the right to install, maintain,use, repair and replace pipes, ducts, conduits and wires leading through,under, above or alongside the Premises, is hereby reserved unto Landlord.

 

35.20                     The submittalof this Lease by Landlord or its agent or representative for examination orexecution by Tenant does not constitute an option or offer to lease thePremises upon the terms and conditions contained herein or a reservation of thePremises in favor of Tenant.  This Leaseshall become effective only upon the execution hereof by Landlord and Tenantand delivery of a fully executed counterpart hereof to Tenant.

 

35.21                     Tenantwarrants and represents that neither its execution of this Lease nor itsperformance hereunder will violate any agreement, instrument, contract, law,rule or regulation by which Tenant is bound. Tenant shall indemnify Landlord against any loss, cost, damage orliability including, without limitation, reasonable attorneys’ fees and relatedcosts arising out of Tenant’s breach of this warranty and representation.

 

36.                                 **Rules andRegulations**.  Tenant shallobserve and comply with the rules and regulations set forth in this Article 36and any and all reasonable modifications thereof and additions theretoestablished in writing by Landlord written notice of which has been given toTenant.  Landlord shall not beresponsible for the non-observance of, or noncompliance with, any of said rulesand regulations by any other tenant or occupant of the Building, but Landlordshall use its reasonable efforts to enforce the rules and regulations in anon-discriminatory and consistent manner. In the event of any conflict between said rules and regulations andother provisions hereof, the latter shall control.

 

36.1                           Tenantshall not obstruct, encumber or use any sidewalks, entrance, passages, courts,elevators, vestibules, stairways, corridors or halls or Common Area for anypurpose other than ingress and egress to and from the Premises or the Building.

 

36.2                           Tenant shallneither attach any awning or other projection to the outside walls or windowsof the Building, nor attach or hang any curtains, blinds, shades, drapes orscreen to, in or on any window or door of the Premises without the priorwritten consent of Landlord.  Suchawnings, projections, curtains, blinds, shades, drapes, screens and otherfixtures must be of a quality, type, design, color, material, installation andgeneral appearance approved by Landlord. All electrical fixtures hung in offices or spaces along the windowperimeter of the Premises must be of a quality, type, design, bulb color, sizeand general appearance approved by Landlord and must be installed by Landlordat Tenant’s cost.

 

36.3                           Tenantshall not cover or obstruct the sashes, sash doors, skylights, windows, and doorsthat admit light or air into the interior Common Areas, nor shall any articlesbe placed on the windowsills of the Project.

 

36.4                           Noarticles or signs shall be placed in front of or affixed to any part of theexterior of the Building, nor placed in public portions thereof without theprior written consent of Landlord.

 

36.5                           Thewater and janitorial closets and other plumbing fixtures shall not be used forany purposes other than those for which they were constructed, and nosweepings, rubbish, rags or other substances shall be thrown or storedtherein.  All damages resulting from anymisuse of the fixtures shall be borne by Tenant to the extent caused by Tenantor Tenant’s agents, servants, employees, contractors, visitors or licensees.

 

36.6                           **Except for Cosmetic Alterations,** Tenantshall not mark, paint, drill into or in any way deface any part of the Premisesor the Project, or string any wires except with the prior written consent ofLandlord and as Landlord may direct. Notwithstanding the foregoing, Landlordhereby consents to the hanging of normal office decorations.

 

3.67                           Noanimal (except for seeing-eye dogs or other ADA-approved animals), bird of anykind, or bicycles shall be brought into or kept in or about the Premises or theBuilding.

 

36.8                           Priorto leaving the Premises for the day, Tenant shall use its best efforts toconserve energy and electricity, including but not limited to drawing orlowering window coverings and extinguishing all lights.

 

36.9                           Tenantshall not make, or permit to be made, any unseemly or disturbing noises orsmells, or disturb or interfere with occupants of or visitors to the Buildingor neighboring buildings.  Tenant shallnot throw anything out of the doors, windows or skylights or down thepassageways.  Tenant shall at all timeskeep the doors closed from Tenant’s suite into the Common Areas of the Projectexcept upon prior written approval of Landlord.

 

36.10                     Tenant shallnot permit any principal, agent, servant, employee, contractor, visitor orlicensee to smoke any tobacco products or any non-tobacco products.  No smoking of any substance will be allowedin the Building at any time.  Landlordreserves the right to exclude or expel from the Building any person who, inLandlord’s judgment, is smoking any tobacco or non-tobacco products.  If, in Landlord’s judgment, Tenant, orTenant’s principals, agents, servants, employees, contractors, visitors orlicensee continue to smoke after adequate warning continues to smoke anytobacco or non-tobacco product, then Landlord may provide Tenant with a noticeof default and give Tenant 30 days to cure or quit the premises.

 

36.11                     NeitherTenant nor any of Tenant’s agents, servants, employees, contractors, visitorsor licensees shall at any time bring or keep upon the Premises any inflammable,combustible or explosive fluid, chemical or substance except in such smallquantities and in original manufacturer’s containers as may reasonably berequired for the proper operation and maintenance of Tenant’s office equipment.  All quantities of the inflammable,combustible or explosive fluids, chemicals or substances shall be stored as perguidelines set forth on their containers in a safe manner. After use, anyhazardous wastes shall be disposed of by certified hazardous waste methods inaccordance with the manufacturers’ instructions.

 

36.12                     Landlordshall deliver keys to Tenant upon Tenant’s occupancy.  Tenant shall not place any additional locks, bolts or mail slotsof any kind upon any of the doors or windows, nor shall Tenant change any existinglocks or the mechanism thereof without Landlord’s prior written consent.  Upon the termination of the tenancy, Tenantmust turn over to Landlord all

 

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keys for the Premises or the Project and, in the event of the loss ofany keys so furnished, Tenant shall pay to Landlord the cost thereof.

 

36.13                     Delivery orremoval of any safes, freight, furniture, fixtures, bulky matter or heavyequipment of any description must take place during the hours which Landlord orits agent may reasonably determine from time to time, upon previous notice tothe Landlord and in a manner and at times reasonably prescribed by Landlord,and the persons employed by Tenant for such work are subject to Landlord’sreasonable prior approval.  Landlordreserves the right to prescribe the weight and position of all safes, or otherextra heavy equipment or furniture or improvements so as to distribute theweight or to require reinforcing at the cost of Tenant.  Landlord reserves the right to inspect allsafes, freight or other bulky articles to be brought into the Building and toexclude from the Building all safes, freight or other bulky articles whichviolate any of these Rules and Regulations of this Lease, normal officeequipment excluded.

 

36.14                     Tenant shallnot occupy or permit any portion of the Premises to be occupied in a way thatis not otherwise permitted by and consistent with Article 1.1.9, or is notgenerally consistent with the character and nature of all other tenancies inthe Building.

 

36.15                     Tenant shallnot purchase janitorial or maintenance or other like service from any companyor persons not approved by Landlord, except that Landlord’s approval shall notbe required in connection with any maintenance or other like service that doesnot affect the structure or other major systems of the Building.  Landlord shall approve a sufficient numberof sources of such services to provide Tenant with a reasonable selection, butonly in such instances and to such extent, as Landlord in its judgmentconsiders consistent with security and proper operation of the Building.

 

36.16                     Landlordshall have the right to prohibit any advertising or business conducted byTenant referring to the Building which, in Landlord’s opinion, tends to impairthe reputation of the Building or its desirability as a first class officebuilding, and upon notice from Landlord, Tenant shall refrain from or ceasesuch advertising.

 

36.17                     Outside ofBusiness Hours, Landlord reserves the right to exclude from the Building allpersons who are not otherwise authorized by Tenant to enter the Premises.

 

36.18                     Tenant’sinterior designers and installers of Tenant’s decoration, furniture, carpentry,wall coverings, and window coverings, shall, while in the Building or elsewherein the Project, be subject to and under the control and direction of theBuilding manager (but not as agent or servant of said manager or of Landlord).

 

36.19                     If thePremises is or becomes infested with vermin as a result of the use or anymisuse or neglect by Tenant, its agents, servants, employees, contractors,visitors or licensees, then Landlord shall forthwith at Tenant’s expense causethe same to be exterminated by licensed exterminators to the satisfaction ofLandlord and, as necessary, from time to time thereafter.

 

36.20                     Tenant shallmake requests for services at and as instructed by the office of the Building.

 

36.21                     Canvassing,soliciting and peddling in the Building are prohibited and Tenant shallcooperate to prevent the same.

 

36.22                     No airconditioning unit(s) shall be installed or used by Tenant without Landlord’swritten consent.

 

36.23                     No handtrucks or dollies, except those equipped with rubber tires and side guards, maybe used in any space in the Project, either by Tenant or by jobbers or others.Tenant shall not permit its customers, clients or invitees to wait in thepublic corridors of the Building. Tenant shall not permit its employees to loiter or smoke in the interiorCommon Areas.

 

36.24                     Tenant,Tenant’s agents, servants, employees, contractors, licensees or visitors shallnot park or stop any vehicles in any driveways, service entrances, or areasposted as “No Parking” or “No Stopping.”

 

36.25                     Landlordshall install and maintain for the Premises, at Landlord’s sole cost andexpense, such safety equipment as may be mandated by applicable governmentalauthority.

 

36.26                     Tenant shallnot use the name of the Building for any purpose other than as the address ofthe Tenant’s business in the Premises, nor shall Tenant use any picture of theBuilding in its advertising, stationery or in any other manner without theprior written permission of Landlord. Landlord expressly reserves the right at any time to change name of theBuilding or Project without in any manner being liable to Tenant therefor.

 

37.                                 **Compliancewith Laws.****                   **Landlordshall pay the cost of any repairs, capital additions, replacements or take anyother actions necessary to cause the Building to comply with governmental laws,statutes or regulations that are in effect, applicable to and enforced withrespect to the Building and/or the Premises as of the Commencement Date,including but not limited to American with Disabilities Act (“ADA”).

 

38.                                 **Good Faith.**                                   Withoutregard to any references to the terms “sole” or “absolute”, except for matterswhich could adversely affect the Building’s plumbing, HVAC or electricalsystems, or its exterior appearance (in which case Landlord shall have theright to act in its sole and absolute discretion, exercised in good faith), anytime the consent of Landlord or Tenant is required, such consent shall not beunreasonably withheld or delayed. Whenever the Lease grants Landlord or Tenant the right to take action,exercise discretion, establish rules and regulations or make allocations orother determinations, Landlord and Tenant shall act reasonably and in goodfaith and take no action which might result in the frustration of thereasonable expectations of a sophisticated tenant or landlord concerning theLease.

 

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IN WITNESS WHEREOF, theparties hereto have executed this Lease as of                                         ,2003.

 
| **LANDLORD**                      | **TENANT**                                       |
|-----------------------------------|--------------------------------------------------|
|                              |                                             |
| Century Park,                     | Mercantile National  Bank, N.A., a National Bank |
| a California limited  partnership |                                             |
| By:                               | Held Properties, Inc.                            |   |
| Its:                              | Management Company                               |   |
|                              |                                             |
|                              |                                             |
| By:                               |                                             |   | By: |   |   |
|                              | Joel R. Delman                                   |   | Scott A. Montgomery |
| Its:                              | Director of Leasing                              | Its: | President and Chief  Executive Officer |
|                                   |                                                  |  |  |  |  |

 

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**LEASE ADDENDUM**

 

ThisAddendum is attached to and made a part of that certain office lease (this“Lease”) dated November 12, 2003 between Century Park, a California limitedpartnership, as Landlord (“Landlord”) and **MercantileNational Bank, N.A., a National Bank,** as Tenant (“Tenant”)relating to the premises (“Premises”) known as Suite **800** consisting of approximately **13,880** rentable square feet on the **8th**floor of the Building located at 1880 Century Park East, Los Angeles,California.  The provisions set forthbelow shall supersede any inconsistent provisions set forth in the Lease.  Except as otherwise provided below,capitalized items used below shall have their respective meaning set forth inthe Lease.

 

39.                                 **Option to Renew.****   **Provided that Tenant isnot in default under this Lease and provided that the Lease has not beenterminated as a result of Tenant’s default or other acts or failures to act byTenant, Tenant shall have an option to renew the Lease for **two** additional five (5) year term**s** (**eachan** “Extended Term”). Tenant shall provide Landlord with at least six (6) months but not morethan twelve (12) months prior written notice indicating its intention toexercise such option to renew.  Therights contained in this Article **39**shall be personal to the originally named Tenant and may not be assigned nortransferred except with Landlord’s written consent.

 

39.1                           Themonthly base rent during the Extended Term shall be an amount equal to thePrevailing Rate (as hereinafter defined) at the time of the commencement of theExtended Term for space leased within the previous six months that areComparable Transactions, as defined below. The term “Prevailing Rate” shall mean the monthly rent per rentablesquare foot that Landlord has accepted in contemporaneous transactions between nonaffiliatedparties for non-expansion, renewal and non-equity tenants of comparablecreditworthiness, for comparable space, comparable use and comparable leaseterms (collectively, “Comparable Transactions”) in the Building.  If there are no Comparable Transactions inthe Building, then the Prevailing Rate shall be prevailing fair market rentalvalue for Comparable Transactions in the Project area.  In any determination of ComparableTransactions, appropriate consideration shall be given to the rental rates,abatement provisions or other concessions, brokerage commissions, if any, thatactually have been paid by Landlord (or other landlords) in similartransactions, length of the lease term, size and location of the premises beingleased, building standard tenant improvement allowances, if any, and othergenerally applicable conditions of tenancy. The intent is that Tenant will obtain the same rent and other economicbenefits that Landlord would otherwise give in Comparable Transactions and thatLandlord will make and receive the same economic payments and concessions thatLandlord would otherwise make and receive in Comparable Transactions.

 

39.2                           IfLandlord and Tenant are unable to agree on the Prevailing Rate, then Landlordand Tenant shall agree upon, and jointly appoint, one arbitrator who shall bean active real estate broker in the Project area over the most recent 5-yearperiod.  If the Landlord and Tenant failto agree upon and appoint an arbitrator, then the appointment of the arbitratorshall be made by the Presiding Judge of the Superior Court, or if he or sherefuses to act, by any judge having jurisdiction over the parties.  Within five (5) business days after saidappointment, Landlord and Tenant may submit to the arbitrator (with a copy tothe other party) any market data and additional information that such partydeems relevant to the determination of the Prevailing Rate and the other partymay submit a reply in writing within five (5) business days thereafter.  The determination of the arbitrator shall belimited solely to the issue of whether Landlord’s or Tenant’s submittedPrevailing Rate is the closest to the actual fair market rent for the Premises,taking into account the criteria of Comparable Transactions.  Neither Landlord nor Tenant may consult withsuch arbitrator as to his or her opinion of the fair market rent prior to theappointment or resolution of the issue regarding Prevailing Rate for thePremises.

 

39.3                           Withinfifteen (15) days of being appointed, the arbitrator shall decide whether theparties shall use Landlord’s or Tenant’s submitted Prevailing Rate, and shallso notify Landlord and Tenant.  Thedecision of the arbitrator shall be binding upon the Landlord and Tenant.  The cost of the arbitration shall be paid bythe Landlord and Tenant equally.

 

39.4                           Rentduring the Extended Term shall continue to be subject to adjustment based uponTenant’s pro-rata share of increases in Recurring Operating Costs except thatthe new base year shall be the calendar year in which the Extended Termcommences.

 

39.5                           IfTenant fails to exercise in a timely manner the option to renew hereinprovided, said option to renew shall expire and have no further force andeffect.  Tenant’s exercise of saidoption to renew shall not operate to cure any uncured default by Tenant underthis Lease, nor to extinguish or impair any rights or remedies of Landlordarising by virtue of such default.  Ifthe Lease or Tenant’s right to possession of the Premises terminates in anymanner whatsoever before Tenant exercises the option to renew herein provided,such option to renew shall terminate; or if Tenant has assigned the Premises toan unaffiliated, independent third party, then immediately upon suchassignment, the transferability of the option to renew shall be reasonablyapproved by Landlord, provided Tenant notifies Landlord in writing at the timeof such assignment of its desire to transfer the option provided hereunder.

 

40.                                 **Tenant Improvements.****                       **In the event Tenant does not use the entireallowance, Tenant shall have the right to use up to $15.00 per usable squarefoot as a rent credit amortized over the first sixty (60) months of the LeaseTerm.

 

41.                                 **Temporary Space.    **As of January 1,2004, Landlord will provide Tenant with temporary space on the entire twelfth(12th) floor of the Building (the “Temporary Space”) **under theterms and conditions of this Lease except that rent shall be paid as follows:Rent** for the TemporarySpace occupied by Tenant will be abated for the first sixty (60) days followingTenant’s **occupancy** in the Temporary Space.  If,after two months, Tenant continues to occupy the Temporary Space **and untilsuch time as the Tenant Improvements in the Premises are Substantially Completeand Tenant has vacated the Temporary Space**, Tenant shall pay rent (“Temporary SpaceRent”) in the amount of $15,268.00 per month for each month (or on a per diembasis for any partial month) after the end of the second month of occupancythat Tenant continues to occupy the Temporary Space.  Landlord shall provide the Temporary Space free of debris andbroom clean with all Building Systems fully operative.

 

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42.                                 **Option to Terminate.**

 

42.1                           **Option to Terminate (Ground Floor).**                                           **Landlord will use its best efforts to reach andexecute, by April 1, 2004, an agreement with Krueger International (the “GroundFloor Tenant”) an agreement to amend the Ground Floor Tenant’s lease to reduceits space, which reduced space will become the subject of a lease (the “GroundFloor Lease”) between Tenant and Landlord. If Landlord and Ground Floor Tenant fail to execute such amendment ofthe Ground Floor Tenant’s Lease by April 1, 2004, or if Landlord fails todeliver the Ground Floor Premises by October 1, 2004, Tenant shall have an optionto terminate this Lease; this Lease shall become a month-to-month lease, whichTenant may terminate upon thirty (30) days prior written notice. **

 

42.2                           **Option to Terminate (Premises).**                If Landlord orLandlord’s contractor is unable to deliver Premises with all TenantImprovements installed, except for punchlist items **and decorative and design issues**, by **August 31**, 2004, Tenant shall have anoption to terminate the Lease.  In suchcase, Tenant shall have thirty (30) days to deliver to Landlord a notice of terminationof the Lease.  If Tenant elects toterminate the Lease, Tenant shall have until **February 28**, 2005 to vacate the Temporary Space.  **(Seealso, Paragraph III.J of the Construction Agreement)**

 

42.3                           **Option to Terminate (Fifth Year Anniversary).**                                      Atany time prior to the date nine months prior to the fifth (5th) anniversarydate of the Commencement Date, Tenantshall have the option, with written notice to Landlord, to terminate theLease.  The Premises subject to thetermination notice shall be referred to as the “Canceled Premises.”  The termination shall be effective as of theday before the fifth (5th) anniversary date of the CommencementDate.  Tenant’s delivery of theTermination Notice to Landlord shall be accompanied by an amount equal to theLease Termination Fee, which will be equal to the unamortized TenantImprovement Allowance and leasing commissions plus three (3) months Base Rent, **whichamount shall be Three Hundred Sixty-Two Thousand One Hundred Sixty-Two Dollars($362,162.00)**

 

43.                                 **Signage.**

 

43.1                           **Tenant’s Monument Sign.****  **Tenant shall have thenon-exclusive right to have its name (including its logo) displayed, atLandlord’s sole cost and expense, on a monument sign located in the front ofthe Building (the “Monument Sign”).   **Such signage shall be no smaller than any othertenant’s sign.**  **Until the Monument Sign has been installed, Tenantshall have the right at Tenant’s cost and expense to have a temporary sign tobe installed at a mutually agreed location that is visible by a passing vehiclefrom Century Park East.**

 

43.2                           **Requirements.** Tenant’s right to maintain its name on the Monument Sign shall besubject to the following requirements:

 

a.                                       All expenses in connection with theconstruction, installation and maintenance of Tenant’s sign shall be paid byLandlord.

 

b.                                      The design, size, location, materials, colorsand lighting of the Monument Sign shall be determined by Tenant and Landlord.

 

c.                                       Landlord shall have the right to relocate,redesign or reconstruct the Monument Sign from time to time **so longas the Monument Sign is visible by a passing vehicle, as described insub-section (e).**

 

d.                                      The cost of graphics related to Tenant’sportion of sign will be part of the Tenant Improvement Allowance.

 

e.                                       **TheMonument Sign shall be visible by a passing vehicle on Century Park East.**

 

44.                                 **Non-Disturbance.****                                               **Landlord shall use its best efforts to secureas soon as commercially possible a commercially reasonable Non-DisturbanceAgreement from the Lender, the form of which shall be provided to Tenant priorto lease execution.

 

45.                                 **Proposition 13.**             **[See Article 48.1]**

 

46.                                 **Parking.**                                               Tenantshall have the right, during the Lease Term or any extension thereof, to leasetwo and one-half (2.5) parking spaces per every 1,000 rentable square footleased, at the then current prevailing rates. However, the parking rates shall not be increased during the firsttwelve (12) months of the Lease Term. Tenant shall be entitled to lease twenty-five percent (25%) of suchparking spaces as “VIP Call-Down” spaces. Tenant shall receive a twenty percent (20%) discount on parkingvalidation sticker books purchased in quantities of Five Thousand Dollars($5,000.00) or more.

 

47.                                 **Option toNegotiate for Additional Space.**                   Subject to the rights of existingtenants that have been granted as of the date hereof, Tenant shall have anoption during the Lease Term to negotiate for additional space (“ONAS”) **on the eighth (8th) floor**(“ONAS Space”) by giving Landlord written notice of Tenant’s desire foradditional space.  Provided that Tenantis not in default under the Lease, and subject to availability of eighth (8th)floor, Landlord shall offer ONAS Space to Tenant (subject to Tenant’s right ofrenewal set forth in this Lease) at a prevailing rent and base year determinedin the same manner as during the Extended Term as set forth in Article **39**; provided, however, that if Tenantexercises its option in the first year of the Lease Term, the terms andconditions for the ONAS Space shall be the same as those contained in thisLease.  Tenant shall have a period often (10) business days in which to either accept or reject Landlord’soffer.  If Tenant does not timely acceptthe ONAS Space specified in Landlord’s notice, Landlord may lease the ONASSpace to any third party.  If Tenantexercises the ONAS, Landlord and Tenant promptly shall execute and deliver anamendment to this Lease reflecting the

 

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terms of the ONAS Space.This ONAS shall be personal to Tenant or any entity described in Article 10 andmay not be assigned nor otherwise transferred to any assignee or sub-tenantwithout Landlord’s consent.

 

48.                                 **Exclusionsfrom Tax Costs.**                                            Notwithstandinganything in this Lease to the contrary, the following items shall be excludedfrom the definition of Tax Costs.

 

48.1                           Anyincreases in Tax Costs resulting from a reassessment due to a sale or change ofownership in the Project occurring during the **Initial** Lease Term, except for change in ownershipresulting from a non-voluntary foreclosure sale, deed in lieu of foreclosure orsimilar transfer of interest.

 

48.2                           TaxCosts for the Base Year and any subsequent year shall be calculated withouttaking into account any decreases in real estate taxes that may be obtained inconnection with Revenue and Taxation Code Section 51 (“Proposition 8”).

 

48.3                           Anyexcess profits taxes, franchise taxes, gift taxes, capital stock taxes,inheritance and succession taxes, estate taxes, federal and state income taxesand other taxes to the extent applicable to Landlord’s general or net income(as opposed to rents or receipts);

 

48.4                           Any TaxCosts based on taxes on tenant improvements in any space in the Building basedupon an assessed level in excess of Building standard improvements, to theextent that the related taxes are separately designated on the tax bill;

 

48.5                           Any TaxCosts based on penalties incurred as a result of Landlord’s negligence,inability or unwillingness to pay, and/or to file any tax or informationalreturns with respect to, any real property taxes when due, and any additionalcosts arising as a result of Landlord’s failure to pay taxes in the maximumnumber of installments;

 

48.6                           Any TaxCosts based on increase of, or reassessment in, real property taxes andassessments resulting from major alterations, improvements, modifications orrenovations to the Project, to the extent that the related taxes are separatelydesignated on the tax bill;

 

48.7                           Anycosts or expenses incurred by Landlord for personal property taxes, leaseholdtaxes in lieu thereof, or taxes or assessments levied in lieu thereof, or inaddition thereto;

 

48.8                           Anyother taxes or assessments charged or levied against Landlord that are notdirectly incurred as a result of the operation of the Building.

 

49.                                 **Exclusionsfrom Operating Costs.****       **Notwithstandinganything in this Lease to the contrary, the following items shall be excludedfrom the definition of Operating Costs:

 

49.1.                        Costsincurred for repairs or other work to the Project occasioned by fire, windstormor other insurable casualty or by the exercise of eminent domain or anyexpenditures for which Landlord is reimbursed.

 

49.2                           Marketingcosts, advertising costs, promotional expenses, leasing commissions, attorneys’fees, space planning costs, and other costs and expenses incurred in connectionwith any lease, sublease and/or assignment negotiations and transactions withcurrent or prospective tenants or other occupants of the Building.

 

49.3                           Costsincurred for renovating or otherwise improving or decorating, painting orredecorating space for other tenants or occupants of the Building.

 

49.4                           Thecost incurred for special services or utilities separately chargeable to othertenants.

 

49.5                           Depreciationand amortization except as provided above.

 

49.6                           Expensesincurred for services or other benefits that are not offered to Tenant butwhich are provided to another tenant or occupant of the Building.

 

49.7                           Legalfees and related costs, together with any damages awarded by a court of law orarbitration panel to Tenant or any other tenants, or any repair and maintenancecosts incurred by Landlord due to the violation by Landlord or any tenant ofthe terms and conditions of any lease in the Building.

 

49.8                           Overheadand profit increment paid to subsidiaries or affiliates of Landlord forservices on or to the Project, to the extent that the costs of such servicesexceed competitive costs of such services for similar buildings in the Projectarea.

 

49.9                           Intereston debt or amortization payments on any mortgage or mortgages, and rental underany ground or underlying lease or leases, or other financing costs, includingpoints, commitment fees, or legal costs related thereto.

 

49.10                     Landlord’sin-house accounting or legal costs, general overhead and executive salaries,except for salaries of project manager, project engineer or other employees tothe extent directly related to the operation and management of the Project.

 

49.11                     Anycompensation paid to clerks, attendants or other persons in commercialconcessions operated by Landlord.

 

49.12                     All items andservices for which Tenant reimburses Landlord or pays directly to thirdparties.

 

49.13                     Any costs,fines or penalties incurred due to violations by Landlord of any governmentalrule or authority, or due to Landlord’s negligence, recklessness or willfulmisconduct.

 

49.14                     Costsincurred for sculpture, paintings or other objects of art.

 

49.15                     Rentals andother related expenses incurred in leasing air-conditioning systems, elevatorsor other equipment ordinarily considered of a capital nature, except equipmentwhich is used in providing janitorial services and which is not affixed to theBuilding.

 

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49.16                     Costsincurred in the testing, encapsulation or other treatment or removal ofasbestos, Hazardous Materials as defined herein, or other substances considereddetrimental to the health or the environment of occupants of the Buildingincluding, without limitation, the cost and expense incurred by or on behalf ofLandlord in removing and disposing any cooling or chilling system and thechemicals used in the HVAC system from either (1) the Building or (2) anothertenant’s premises within the Building **or(3)_Tenant’s Premises**.

 

49.17                     The value ofany lost income to Landlord of any office space in the Project that is utilizedfor the management of the Building.

 

49.18                     Costsincurred by Landlord to remedy any defects in the design, installation,construction, or materials used in any part of the Project.

 

49.19                     Costsincurred by Landlord in compliance with the Americans with Disabilities Act(the “ADA”) or statutes, laws regulations or other legislation of similarimport.

 

49.20                     Costs ofLandlord’s charitable or political contributions.

 

49.21                     Insurancepremiums to the extent any tenant causes Landlord’s existing insurance premiumsto increase or requires Landlord to purchase additional insurance, to theextent that any related premiums are separately designated on the insurancebill.

 

49.22                     Increases inreserves not presently being maintained for future expenses.

 

49.23                     Costsassociated with the ownership of the Project or Landlord or Landlord’s propertymanager, as distinguished from the cost of Building operations, including thecosts of partnership or corporate accounting (other than partnership taxpreparation) and legal matters, selling or syndicating any of Landlord’sinterest in the Project; and disputes between Landlord and Landlord’s propertymanager.

 

49.24                     Maintenanceto or replacement of any utility, mechanical or other system solely dedicatedto the single use of any other tenant.

 

49.25                     Costsrelating to any areas leased on a triple net basis.

 

49.26                     Premiums forearthquake or flood insurance, unless included in recalculating the OperatingCosts for the Base Year, or other costs relating to expansion in scope ofservices or addition of new services not included in the Base Year.

 

**49.27****                 Costs of itemsconsidered capital repairs, replacements, improvements and equipment undergenerally accepted accounting principles consistently applied or otherwise(“Capital Items”) except for (i) the annual amortization (amortized as providedin Article 4.4) of costs, including financing costs, if any, incurred byLandlord after the Commencement Date for any capital improvements installed orpaid for by Landlord and required by any new (or change in) laws, rules orregulations of any governmental or quasi-governmental authority which areenacted after the Commencement Date; (ii) the annual amortization (amortized as provided in Article 4.4) of costs,including financing costs, if any, of any equipment, device or capitalimprovement purchased or incurred as a labor-saving measure or to affect othereconomics in the operation or maintenance of the Building (provided the annualamortized costs does not exceed the actual cost savings realized and suchsavings do not redound primarily to the benefit of any particular tenant.**

 

50.                                 Tenantacknowledges that Landlord has advised Tenant that the Building contains or,because of its age, is likely to contain asbestos-containing materials (“ACMs”).  If Tenant undertakes any alterations,additions, or improvements to the Premises, as permitted by Article 7, Tenantshall, in addition to complying with the requirements of Article 7, undertakethe alterations, additions, or improvements in a manner that avoids disturbingACMs in the Building.  If ACMs arelikely to be disturbed in the course of such work, Tenant shall **notify Landlord, and Landlord shall, at its sole cost,**encapsulate or remove the ACMs in accordance with an approved asbestos-removal planand otherwise in accordance with all applicable Environmental Laws, includinggiving all notices required by Health and Safety Code sections 2591-25919.7.

 

51.                                 **Landlord has removed or has caused to be removed all accessible, friableACMs in the Premises.** Landlord shall use its best efforts to comply with all ApplicableEnvironmental Laws in the Premises, and throughout the Project during the LeaseTerm. Landlord shall, at Landlord’s sole expense and with counsel reasonablyacceptable to Tenant, indemnify, defend and hold harmless Tenant and Tenant’sshareholders, directors, officers, employees, partners, affiliates and agents(“Tenant Indemnitees”) with respect to all losses arising out of or resultingfrom the release of any Hazardous Material in or about the Premises or theProject, or the violation of any Applicable Environmental Laws, existing priorto the Commencement Date or brought onto the Premises or Project by Landlord,or Landlord’s agents, employees, contractors or invitees (other than Tenant andTenant Indemnitees).  Thisindemnification includes all losses, liabilities, obligations, penalties,fines, claims, actions (including remedial or enforcement actions of any kindand administrative or judicial proceedings, orders or judgments), damages(including consequential damages and punitive damages), and costs (includingattorneys, consultants or experts fees and expenses) resulting from the releaseor violation. This indemnification shall survive the expiration or soonertermination of the Lease.

 

**52**.                               **Profits (Article 10.6).**                          **For the purposes of Article 10.6, “Profits” shall mean the gross revenuereceived from the assignee or sublessee during the assignment or the subleaseterm with respect to the space covered by the assignment or sublease (“TransferredSpace”) less: (i) the gross revenue paid to Landlord by Tenant during theperiod of the assignment or sublease term with respect to the TransferredSpace; (b) any improvement allowance or other economic concession (planningallowance, moving expenses, etc.) paid by Tenant to sublessee or assignee; (c)brokers’ commissions; (d) attorneys’ fees; (e) costs of advertising the spacefor sublease or assignment; (f) unamortized cost of initial and subsequentimprovements to the Premises by Tenant; and (g) any other costs actually paidin assigning or subletting the Transferred Space or in negotiating oreffectuating the assignment or sublease.**

 

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IN WITNESS WHEREOF, theparties hereto have executed this Lease as of November 19, 2003.

 

 
| **LANDLORD**                      | **TENANT**                                       |
|-----------------------------------|--------------------------------------------------|
|                              |                                             |
| Century Park,                     | Mercantile National  Bank, N.A., a National Bank |
| a California limited  partnership |                                             |
| By:Held Properties,  Inc.         |                                             |
| Its:Management Company            |                                             |
|                              |                                             |
| By:                               | /s/ JOEL R. DELMAN                               |   | By: | /s/ SCOTT A. MONTGOMERY |   |
|                              | Joel R. Delman                                   |   | Scott A. Montgomery |
| Its:                              | Director of Leasing                              | Its: | President and Chief  Executive Officer |
|                                   |                                                  |  |  |  |  |

 

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