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             STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE-NET
                   AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION



1.     BASIC PROVISIONS ("BASIC PROVISIONS").

       1.1     PARTIES: This Lease ("Lease"), dated for reference purposes
only, September 8, 2000, is made by and between Joseph E. DeLucia ("Lessor")
and Mission Community Bank ("Lessee"), (collectively the "Parties", or
individually a "Party").

       1.2(a) PREMISES: That certain portion of the Project (as defined below),
including all improvements therein or to be provided by Lessor under the terms
of this Lease, commonly known by the street address of 154 West Branch Street,
located in the City of Arroyo Grande, County of San Luis Obispo, State of CA,
with zip code ________, as outlined on Exhibit A attached hereto ("Premises")
and generally described as (describe briefly the nature of the Premises):
General Administrative Offices for banking and loan origination.
In addition to Lessee's rights to use and occupy the Premises as hereinafter
specified, Lessee shall have non-exclusive rights to the Common Areas (as
defined in Paragraph 2.7 below) as hereinafter specified, but shall not have any
rights to the roof, exterior walls or utility raceways of the building
containing the Premises ("Building") or to any other buildings in the Project.
The Premises, the Building, the Common Areas, the land upon which they are
located, along with all other buildings and improvements thereon, are herein
collectively referred to as the "Project." (See also Paragraph 2)
       1.2(b)  PARKING: 6 unreserved vehicle parking spaces ("Unreserved
Parking Spaces"); and 0 reserved vehicle parking spaces ("Reserved Parking
Spaces"). (See also Paragraph 2.6)
       1.3     TERM: 5 years and 0 months ("Original Term") commencing
November 1, 2000 ("Commencement Date") and ending September 30, 2005
("Expiration Date"). (See also Paragraph 3)
       1.4     EARLY POSSESSION: November 1, 2000 ("Early Possession Date").
(See also Paragraphs 3.2 and 3.3)
       1.5     BASE RENT: $2,392 per month ("Base Rent"), payable on the
First day of each month commencing November 1, 2000 (See also Paragraph 4)
/X/  If this box is checked, there are provisions in this Lease for the Base
Rent to be adjusted.
       1.6     LESSEE'S SHARE OF COMMON AREA OPERATING EXPENSES: 6.33%
percent (6.33%) ("Lessee's Share").
       1.7     BASE RENT AND OTHER MONIES PAID UPON EXECUTION:
               (a)      BASE RENT: $ $2,392 for the period November , 2000.
               (b)      COMMON AREA OPERATING EXPENSES: $ $531.60 for the period
                        November, 2000.
               (c)      SECURITY DEPOSIT: $ -0- ("Security Deposit"). (See also
                        Paragraph 5)
               (d)      OTHER: $ 0 for N/A
               (e)      TOTAL DUE UPON EXECUTION OF THIS LEASE: $ 2,923.60
       1.8     AGREED USE: General Administrative Offices for Banking and
associated services. (See also Paragraph 6)
       1.9     INSURING PARTY: Lessor is the "Insuring Party." (See also
Paragraph 8)
       1.10    REAL ESTATE BROKERS: (See also Paragraph 15)
               (a)      REPRESENTATION: The following real estate brokers (the
"Brokers") and brokerage relationships exist in this transaction (check
applicable boxes):
/ / * See Disclosure , Paragraph #51 represents Lessor exclusively ("Lessor's
Broker");
/ / * See Disclosure , Paragraph #51 represents Lessee exclusively
("Lessee's Broker"); or
/ / * See Disclosure , Paragraph #51 represents both Lessor and Lessee
("Dual Agency").
               (b)      PAYMENT TO BROKERS: Upon the execution and delivery
of this Lease by both Parties, Lessor shall pay to the Brokers the brokerage fee
agreed to in a separate written agreement (or if there is no such agreement, the
sum of ___________ or ___________% of the total Base Rent for the brokerage
services rendered by the Brokers).
       1.11    GUARANTOR. The obligations of the Lessee under this Lease are
to be guaranteed by None ("Guarantor"). (See also Paragraph 37)
       1.12    ADDENDA AND EXHIBITS. Attached hereto is an Addendum or
Addenda consisting of Paragraphs 1 through 56 and Exhibits A through
D, all of which constitute a part of this Lease.
2.     PREMISES.
       2.1     LETTING. Lessor hereby leases to Lessee, and Lessee hereby leases
from Lessor, the Premises, for the term, at the rental, and upon all of the
terms, covenants and conditions set forth in this Lease. Unless otherwise
provided herein, any statement of size set forth in this Lease, or that may have
been used in calculating Rent, is an approximation which the Parties agree is
reasonable and any payments based thereon are not subject to revision whether or
not the actual size is more or less.
       2.2     CONDITION. Lessor shall deliver that portion of the Premises
contained within the Building ("Unit") to Lessee broom clean and free of debris
on the Commencement Date or the Early Possession Date, whichever first occurs
("Start Date"), and, so long as the required service contracts described in
Paragraph 7.1(b) below are obtained by Lessee and in effect within thirty days
following the Start Date, warrants that the existing electrical, plumbing, fire
sprinkler, lighting, heating, ventilating and air conditioning systems ("HVAC"),
loading doors, if any, and all other such elements in the Unit, other than those
constructed by Lessee shall be in good operating condition on said date and that
the structural elements of the roof, bearing walls and foundation of the Unit
shall be free of material defects. If non-compliance with such warranty exists
as of the Start Date, or if one of such systems or elements should malfunction
or fail within the appropriate warranty period. Lessor shall, as Lessor's sole
obligation with respect to such matter, except as otherwise provided in this
Lease, promptly after receipt of written notice from Lessee setting forth with
specificity the nature and extent of such non-compliance, malfunction or
failure, rectify same at Lessor's expense. The warranty periods shall be as
follows: (i) 6 months as to the HVAC systems, and (ii) 30 days as to the
remaining systems and other elements of the Unit. If Lessee does not give Lessor
the required notice within the appropriate warranty period, correction of any
such non-compliance, malfunction or failure shall be the obligation of Lessee at
Lessee's sole cost and expense (except for

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the repairs to the fire sprinkler systems, roof, foundations, and/or bearing
walls - see Paragraph 7).

2.3     COMPLIANCE. Lessor warrants that the improvements on the Premises and
the Common Areas comply with the building codes that were in effect at the
time that each such improvement, or portion thereof, was constructed, and
also with all applicable laws, covenants or restrictions of record,
regulations, and ordinances in effect on the Start Date ("Applicable
Requirements"). Said warranty does not apply to the use to which Lessee will
put the Premises or to any Alterations or Utility Installations (as defined
in Paragraph 7.3(a)) made or to be made by Lessee. NOTE: Lessee is
responsible for determining whether or not the Applicable Requirements, and
especially the zoning, are appropriate for Lessee's intended use, and
acknowledges that past uses of the Premises may no longer be allowed. If the
Premises do not comply with said warranty, Lessor shall, except as otherwise
provided, promptly after receipt of written notice from Lessee setting forth
with specificity the nature and extent of such non-compliance, rectify the
same at Lessor's expense. If Lessee does not give Lessor written notice of a
non-compliance with this warranty within 6 months following the Start Date,
correction of that non-compliance shall be the obligation of Lessee at
Lessee's sole cost and expense. If the Applicable Requirements are hereafter
changed so as to require during the term of this Lease the construction of an
addition to or an alteration of the Unit, Premises and/or Building, the
remediation of any Hazardous Substance, or the reinforcement or other
physical modification of the Unit, Premises and/or Building ("Capital
Expenditure"), Lessor and Lessee shall allocate the cost of such work as
follows:
                (a) Subject to Paragraph 2.3(c) below, if such Capital
Expenditures are required as a result of the specific and unique use of the
Premises by Lessee as compared with uses by tenants in general, Lessee shall be
fully responsible for the cost thereof, provided, however that if such Capital
Expenditure is required during the last 2 years of this Lease and the cost
thereof exceeds 6 months' Base Rent, Lessee may instead terminate this Lease
unless Lessor notifies Lessee, in writing, within 10 days after receipt of
Lessee's termination notice that Lessor has elected to pay the difference
between the actual cost thereof and the amount equal to 6 months' Base Rent. If
Lessee elects termination, Lessee shall immediately cease the use of the
Premises which requires such Capital Expenditure and deliver to Lessor written
notice specifying a termination date at least 90 days thereafter. Such
termination date shall, however, in no event be earlier than the last day that
Lessee could legally utilize the Premises without commencing such Capital
Expenditure.
                (b) If such Capital Expenditure is not the result of the
specific and unique use of the Premises by Lessee (such as, governmentally
mandated seismic modifications), then Lessor and Lessee shall allocate the
obligation to pay for the portion of such costs reasonably attributable to the
Premises pursuant to the formula set out in Paragraph 7.1(d); provided, however,
that if such Capital Expenditure is required during the last 2 years of this
Lease or if Lessor reasonably determines that it is not economically feasible to
pay its share thereof, Lessor shall have the option to terminate this Lease upon
90 days prior written notice to Lessee unless Lessee notifies Lessor, in
writing, within 10 days after receipt of Lessor's termination notice that Lessee
will pay for such Capital Expenditure. If Lessor does not elect to terminate,
and fails to tender its share of any such Capital Expenditure. Lessee may
advance such funds and deduct same, with interest, from Rent until Lessor's
share of such costs have been fully paid. If Lessee is unable to finance
Lessor's share, or if the balance of the Rent due and payable for the remainder
of this Lease is not sufficient to fully reimburse Lessee on an offset basis,
Lessee shall have the right to terminate this Lease upon 30 days written notice
to Lessor.
                (c) Notwithstanding the above, the provisions concerning Capital
Expenditures are intended to apply only to non-voluntary, unexpected, and new
Applicable Requirements. If the Capital Expenditures are instead triggered by
Lessee as a result of an actual or proposed change in use, change in intensity
of use, or modification to the Premises then, and in that event, Lessee shall be
fully responsible for the cost thereof, and Lessee shall not have any right to
terminate this Lease.

       2.4 ACKNOWLEDGEMENTS. Lessee acknowledges that: (a) it has been advised
by Lessor and/or Brokers to satisfy itself with respect to the condition of the
Premises (including but not limited to the electrical, HVAC and fire sprinkler
systems, security, environmental aspects, and compliance with Applicable
Requirements and the Americans with Disabilities Act), and their suitability
for Lessee's intended use, (b) Lessee has made such investigation as it deems
necessary with reference to such matters and assumes all responsibility therefor
as the same relate to its occupancy of the Premises, and (c) neither Lessor,
Lessor's agents, nor Brokers have made any oral or written representations or
warranties with repsect to said matters other than as set forth in this Lease.
In addition, Lessor acknowledges that: (i) Brokers have made no representations,
promises or warranties concerning Lessee's ability to honor the Lease or
suitability to occupy the Premises, and (ii) it is Lessor's sole responsibility
to investigate the financial capability and/or suitability of all proposed
tenants.

       2.5 LESSEE AS PRIOR OWNER/OCCUPANT. The warranties made by Lessor in
Paragraph 2 shall be of no force or effect if immediately prior to the Start
Date Lessee was the owner or occupant of the Premises. In such event, Lessee
shall be responsible for any necessary corrective work.
       2.6 VEHICLE PARKING. Lessee shall be entitled to use the number of
Unreserved Parking Spaces and Reserved Parking Spaces specified in Paragraph
1.2(b) on those portions of the Common Areas designated from time to time by
Lessor for parking. Lessee shall not use more parking spaces than said number.
Said parking spaces shall be used for parking by vehicles no larger than
full-size passenger automobiles or pick-up trucks, herein called "Permitted Size
Vehicles." Lessor may regulate the loading and unloading of vehicles by adopting
Rules and Regulations as provided in Paragraph 2.9. No vehicles other than
Permitted Size Vehicles may be parked in the Common Area without the prior
written permission of Lessor.
                (a) Lessee shall not permit or allow any vehicles that belong to
or are controlled by Lessee or Lessee's employees, suppliers, shippers,
customers, contractors or invitees to be loaded, unloaded, or parked in areas
other than those designated by Lessor for such activities.
                (b) Lessee shall not service or store any vehicles in the Common
Areas.
                (c) If Lessee permits or allows any of the prohibited activities
described in this Paragraph 2.6, then Lessor shall have the right, without
notice, in addition to such other rights and remedies that it may have, to
remove or tow away the vehicle involved and charge the cost to Lessee, which
cost shall be immediately payable upon demand by Lessor.
       2.7 COMMON AREAS-DEFINITION. The term "Common Areas" is defined as all
areas and facilities outside the Premises and within the exterior boundary line
of the Project and interior utility raceways and installations within the Unit
that are provided and designated by the Lessor from time to time for the general
non-exclusive use of Lessor, Lessee and other tenants of the Project and their
respective employees, suppliers, shippers, customers, contractors and invitees,
including parking areas, loading and unloading areas, trash areas, roadways,
walkways, driveways and landscaped areas.
       2.8 COMMON AREAS-LESSEE'S RIGHTS. Lessor grants to Lessee, for the
benefit of Lessee and its employees, suppliers, shippers, contractors, customers
and invitees, during the term of this Lease, the non-exclusive right to use, in
common with others entitled to such use, the Common Areas as they exist from
time to time, subject to any rights, powers, and privileges reserved by Lessor
under the terms hereof or under the terms of any rules and regulations or
restrictions governing the use of the Project. Under no circumstances shall the
right herein granted to use the Common Areas be deemed to include the right to
store any property, temporarily or permanently, in the Common Areas. Any such
storage shall be permitted only by the prior written consent of Lessor or
Lessor's designated agent, which consent may be revoked at any time. In the
event that any unauthorized storage shall occur then Lessor shall have the
right, without notice, in addition to such other rights and remedies that it may
have, to remove the property and charge the cost to Lessee, which cost shall be
immediately payable upon demand by Lessor.
       2.9 COMMON AREAS-RULES AND REGULATIONS. Lessor or such other person(s)
as Lessor may appoint shall have the exclusive control and management of the
Common Areas and shall have the right, from time to time, to establish, modify,
amend and enforce reasonable rules and regulations ("Rules and Regulations") for
the management, safety, care, and cleanliness of the grounds, the parking and
unloading of vehicles and the preservation of good order, as well as for the
convenience of other occupants or tenants of the Building and the Project and
their invitees. Lessee agrees to abide by and conform to all such Rules and
Regulations, and to cause its employees, suppliers, customers, contractors and
invitees to so abide and conform. Lessor shall not be responsible to Lessee for
the non-compliance with said Rules and Regulations by other tenants of the
Project.
       2.10 COMMON AREAS-CHANGES. Lessor shall have the right, in Lessor's sole
discretion, from time to time:
                (a) To make changes to the Common Areas, including, without
limitation, changes in the location, size, shape and number of driveways,
entrances, parking spaces, parking areas, loading and unloading areas, ingress,
egress, direction of traffic, landscaped areas, walkways and utility raceways;
                (b) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available;
                (c) To designate other land outside the boundaries of the
Project to be a part of the Common Areas;
                (d) To add additional buildings and improvements to the Common
Areas;
                (e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Project, or any portion thereof; and
                (f) To do and perform such other acts and make such other
changes in, to or with respect to the Common Areas and Project as Lessor may, in
the exercise of sound business judgment, deem to be appropriate.
       3. TERM.
       3.1 TERM. The Commencement Date, Expiration Date and Original Term of
this Lease are as specified in Paragraph 1.3.
       3.2 EARLY POSSESSION. If Lessee totally or partially occupies the
Premises prior to the Commencement Date, the obligation to pay Base Rent shall
be abated for the period of such early possession. All other terms of this
Lease (including but not limited to the obligations to pay Lessee's Share of
Common Area Operating Expenses, Real Property Taxes and insurance premiums and
to maintain the Premises) shall, however, be in effect during such period. Any
such early possession shall not affect the Expiration Date.

       3.3 DELAY IN POSSESSION. Lessor agrees to use its best commercially
reasonable efforts to deliver possession of the Premises to Lessee by the
Commencement Date. If, despite said efforts, Lessor is unable to deliver
possession as agreed, Lessor shall not be subject to any liability therefor, nor
shall such failure affect the validity of this Lease. Lessee shall not, however,
be obligate to pay Rent or perform its other obligations until it receives
possession of the Premises. If possession is not delivered within 60 days after
the Commencement Date, Lessee may, at its option, by notice in writing within 10
days after the end of such 60 day period, cancel this Lease, in which event the
Parties shall be dischareged from all obligations hereunder. If such written
notice is not received by Lessor within said 10 day period, Lessee's right to
cancel shall terminate. Except as otherwise provided, if possession is not

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tendered to Lessee by the Start Date and Lessee does not terminate this Lease,
as aforesaid, any period rent abatement that Lessee would otherwise have enjoyed
shall run from the date of delivery of possession and continue for a period
equal to what Lessee would otherwise have enjoyed under the terms hereof, but
minus any days of delay caused by the acts or omissions of Lessee. I possession
of the Premises is not delivered within 4 months after the Commencement Date,
this Lease shall terminate unless other agreements are reached between Lessor
and Lessee, in writing.

     3.4 LESSEE COMPLIANCE. Lessor shall not be required to tender possession of
the Premises to Lessee until Lessee complies with its obligation to provide
evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee
shall be required to perform all of its obligations under this Lease from and
after the Start Date, including the payment of Rent, notwithstanding Lessor's
election to withhold possession pending receipt of such evidence of insurance.
Further, if Lessee is required to perform any other conditions prior to or
concurrent with the Start Date, the Start Date shall occur but Lessor may elect
to withhold possession until such conditions are satisfied.

4. RENT.
     4.1 RENT DEFINED. All monetary obligations of Lessee to Lessor under the
terms of this Lease (except for the Security Deposit) are deemed to be rent
("Rent")
     4.2 COMMON AREA OPERATING EXPENSES. Lessee shall pay to Lessor during the
term hereof, in addition to the Base Rent, Lessee's Share (as specified in
Paragraph 1.6) of all Common Area Operating Expenses, as hereinafter defined,
during each calendar year of the term of this Lease, in accordance with the
following provisions:

          (a) "COMMON AREA OPERATING EXPENSES" are defined, for purposes of this
     Lease, as all costs incurred by Lessor relating to the ownership and
     operation of the Project, including but not limited to, the following:

             (i)    The operation, repair and maintenance, in neat, clean, good
                    order and condition the following:

                    (aa) The Common Areas and Commmon Area improvements,
                    including parking areas, loading and unloading areas, trash
                    areas, roadways, parkways, walkways, driveways, landscaped
                    areas, bumpers, irrigation systems, Common Area lighting
                    facilities, fences and gates, elevator, roofs, and roof
                    drainage systems.

                    (bb) Exterior signs and any tenant directories.

                    (cc) Any fire detection and/or sprinkler systems.

             (ii)   The cost of water, gas, electricity and telephone to service
                    the Common Areas and any utilities not separately metered.

             (iii)  Trash disposal, pest control services, property management,
                    security services, and the costs of any environmental
                    inspections.

             (iv)   Reserves set aside for maintenance and repair of Common
                    Areas.

             (v)    Real Property Taxes (as defined in Paragraph 10).

             (vi)   The cost of the premiums for the insurance maintained by
                    Lessor pursuant to Paragraph 8.

             (vii)  Any deductible portion of an insured loss concerning the
                    Building or the Common Areas.

             (viii) The cost of any Capital Expenditure to the Building or the
                    Project not covered under the provisions of Paragraph 2.3
                    provided; however, that Lessor shall allocate the cost of
                    any such Capital Expenditure over a 12 year period and
                    Lessee shall not be required to pay more than Lessee's Share
                    of 1/144th of the cost of such Capital Expenditure in any
                    given month.

             (ix)   Any other services to be provided by Lessor that are stated
                    elsewhere in this Lease to be a Common Area Operating
                    Expense.

          (b) Any Common Area Operating Expenses and Real Property Taxes that
     are specifically attributable to the Unit, the Building or to any other
     building in the Project or to the operation, repair and maintenance
     thereof, shall be allocated entirely to such Unit, Building, or other
     building. However, any Common Area Operating Expenses and Real Property
     Taxes that are not specifically attributable to the Building or to any
     other building or to the operation, repair and maintenance thereof, shall
     be equitably allocated by Lessor to all buildings in the Project.

          (c) The inclusion of the improvements, facilities and services set
     forth in Subparagraph 4.2(a) shall not be deemed to impose an obligation
     upon Lessor to either have said improvements or facilities or to provide
     those services unless the Project already has the same, Lessor already
     provides the services, or Lessor has agreed elsewhere in the Lease to
     provide the same or some of them.

          (d) Lessee's Share of Common Area Operating Expenses shall be payable
     by Lessee within 10 days after a reasonably detailed statement of actual
     expenses is presented to Lessee. At Lessor's option, however, an amount may
     be estimated by Lessor from time to time of Lessee's Share of annual Common
     Area Operating Expenses and the same shall be payable monthly or quarterly,
     as Lessor shall designate, during each 12 month period of the Lease term,
     on the same day as the Base Rent is due hereunder. Lessor shall deliver to
     Lessee within 60 days after the expiration of each calendar year a
     reasonably detailed statement showing Lessee's Share of the actual Common
     Area Operating Expenses incurred during the preceding year. If Lessee's
     payments under this Paragraph 4.2(d) during the preceding year exceed
     Lessee's Share as indicated on such statement, Lessor shall credit the
     amount of such over-payment against Lessee's Share of Common Area Operating
     Expenses next becoming due. If Lessee's payments under this Paragraph
     4.2(d) during the preceding year were less than Lessee's Share as indicated
     on such statement, Lessee shall pay to Lessor the amount of the deficiency
     within 10 days after delivery by Lessor to Lessee of the statement.

     4.3 PAYMENT. Lessee shall cause payment of Rent to be received by Lessor in
lawful money of the United States, without offset or deduction (except as
specifically permitted in the Lease), on or before the day on which it is due.
Rent for any period during the term thereof which is for less than one full
calendar month shall be prorated based upon the actual number of days of said
month. Payment of Rent shall be made to Lessor at its address stated herein or
to such other persons or place as Lessor may from time to time designate in
writing. Acceptance of a payment which is less than the amount then due shall
not be a waiver of Lessor's rights top the balance of such Rent, regardless of
Lessor's endorsement of any checks so stating. In the event that any check,
draft, or other instrument or payment given by Lessee to Lessor is dishonored
for any reason, Lessee agrees to pay Lessor the sum of $25 in addition to any
late charges which may be due.

5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof
the Security Deposit as security for Lessee's faithful performance of its
obligations under this Lease. If Lessee fails to pay Rent, or otherwise
Defaults under this Lease, Lessor may use, apply or retain all or any portion
of said Security Deposit for the payment of any amount due Lessor or to
reimburse or compensate Lessor for any liability, expense, loss or damage
which Lessor may suffer or incur by reason thereof. If Lessor uses or applies
all or any portion of the Security Deposit, Lessee shall within 10 days after
written request therefor deposit monies with Lessor sufficient to restore
said Security Deposit to the full amount required by this Lease. If the Base
Rent increases during the term of this Lease, Lessee shall, upon written
request from Lessor, deposit additional monies with Lessor so that the total
amount of the Security Deposit shall at all times bear the same proportion to
the increased Base Rent as the initial Security Deposit bore to the initial
Base Rent. Should the Agreed Use be amended to accommodate a material change
in the business of Lessee to accommodate a sublessee or assignee, Lessor
shall have the right to increase the Security Deposit to the extent
necessary, in Lessor's reasonable judgment, to account for any increased wear
and tear that the Premises may suffer as a result thereof. If a change in
control of Lessee occurs during this Lease and following such change the
financial condition of Lessee is, in Lessor's reasonable judgment,
significantly reduced, Lessee shall deposit such additional monies with
Lessor as shall be sufficient to cause the Security Deposit to be at a
commercially reasonable level based on such change in financial condition.
Lessor shall not be required to keep the Security Deposit separate from its
general accounts. Within 14 days after the expiration or termination of this
Lease, if Lessor elects to apply the Security Deposit only to unpaid Rent,
and otherwise within 30 days after the Premises have been vacated pursuant to
Paragraph 7.4(c) below, Lessor shall return that portion of the Security
Deposit not used or applied by Lessor. No part of the Security Deposit shall
be considered to be held in trust, to bear interest or to be prepayment for
any monies to be paid by Lessee under this Lease.

6. USE.

     6.1 USE. Lessee shall use and occupy the Premises only for the Agreed Use,
or any other legal use which is reasonably comparable thereto, and for no other
purpose. Lessee shall not use or permit the use of the Premises in a manner that
is unlawful, creates damage, waste or nuisance, or that disturbs occupants of or
causes damage to neighboring premises or properties. Lessor shall not
unreasonably withhold or delay its consent to any written request for a
modification of the Agreed Use, so long as the same will not impair the
structural integrity of the improvements on the Premises or the mechanical or
electrical systems therein, and/or is not significantly more burdensome to the
Premises. If Lessor elects to withhold consent, Lessor shall within 7 days after
such request give written notification of same, which notice shall include an
explanation of Lessor's objections to the change in the Agreed Use.

     6.2 HAZARDOUS SUBSTANCES.

          (a) REPORTABLE USES REQUIRE CONSENT. The term "Hazardous Substance" as
     used in this Lease shall mean any product, substance, or waste whose
     presence, use, manufacture, disposal, transportation, or release, either by
     itself or in combination with other materials expected to be on the
     Premises, is either: (i) potentially injurious to the public health, safety
     or welfare, the environment or the Premises, (ii) regulated or monitored by
     any governmental authority, or (iii) a basis for potential liability of
     Lessor to any governmental agency or third party under any applicable
     statute or common law theory. Hazardous Substances shall include, but not
     be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or any
     products, by-products or fractions thereof. Lessee shall not engage in any
     activity in or on the Premises which constitutes a Reportable Use of
     Hazardous Substances without the express prior written consent of Lessor
     and timely compliance (at Lessee's expense) with all Applicable
     Requirements. "Reportable Use" shall mean (i) the installation or use of
     any above or below ground storage tank, (ii) the generation, possession,
     storage, use, transportation, or disposal of a Hazardous Substance that
     requires a permit from, or with respect to which a report, notice,
     registration or business plan is required to be filed with, any
     governmental authority, and/or (iii) the presence at the Premises of a
     Hazardous Substance with respect to which any Applicable Requirements
     requires that a notice be given to persons entering or occupying the
     Premises or neighboring properties. Notwithstanding the foregoing, Lessee
     may use any ordinary and customary materials reasonably required to be used
     in the normal course of the Agreed Use, so long as such use in compliance
     with all Applicable Requirements, is


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     not a Reportable Use, and does not expose the Premises or neighboring
     property to any meaningful risk of contamination or damage or expose Lessor
     to any liability therefor. In addition, Lessor may condition its consent to
     any Reportable Use upon receiving such additional assurances as Lessor
     reasonably deems necessary to protect itself, the public, the Premises
     and/or the environment against damage, contamination, injury and/or
     liability, including, but not limited to the installation (and removal on
     or before Lease expiration or termination) or protective modifications
     (such as concrete encasements) and/or increasing the Security Deposit.

          (b) DUTY TO INFORM LESSOR, if Lessee knows, or has reasonable cause to
     believe, that a Hazardous Substance has come to be located in, on, under or
     about the Premises, other than as previously consented to by Lessor, Lessee
     shall immediately give written notice of such fact to Lessor, and provide
     Lessor with a copy of any report, notice, claim or other documentation
     which it has concerning the presence of such Hazardous Substance.

          (c) LESSEE REMEDIATION. Lessee shall not cause or permit any Hazardous
     Substance to be spilled or released in, on, under, or about the Premises
     (including through the plumbing or sanitary sewer system) and shall
     promptly, at Lessee's expense, take all investigatory and or remedial
     action reasonably recommended, whether or not formally ordered or required,
     for the cleanup or any contamination of, and for the maintenance, security
     and/or monitoring of the Premises or neighboring properties, that was
     caused or materially contributed to by Lessee, or pertaining to or
     involving any Hazardous Substance brought onto the Premises during the term
     of this Lease, by or for Lessee, or any third party.

          (d) LESSEE INDEMNIFICATION. Lessee shall indemnify, defend and hold
     Lessor, its agents, employees, lenders and ground lessor, if any, harmless
     from and against any and all loss of rents and/or damages, liabilities,
     judgments, claims, expenses, penalties, and attorney's and consultants,
     fees arising out of or involving any Hazardous Substance brought onto the
     Premises by or for Lessee, or any third party (provided, however, that
     Lessee shall have no liability under this Lease with respect to underground
     migration of any Hazardous Substance under the Premises from areas outside
     of the Project). Lessee's obligations shall include, but not be limited to,
     the effects of any contamination or injury to person, property or the
     environment created or suffered by Lessee, and the cost of investigation,
     removal, remediation, restoration and/or abatement, and shall survive the
     expiration or termination of this Lease. No termination, cancellation or
     release agreement entered into by Lessor and Lessee shall release Lessee
     from its obligations under this Lease with respect to Hazardous Substances,
     unless specifically so agreed by Lessor in writing at the time of such
     agreement.

          (e) LESSOR INDEMNIFICATION. Lessor and its successors and assigns
     shall indemnify, defend, reimburse and hold Lessee, its employees and
     lenders, harmless from and against any and all environmental damages,
     including the cost of remediation, which existed as a result of Hazardous
     Substances on the Premises prior to the Start Date or which are caused by
     the gross negligence or willful misconduct of Lessor, its agents or
     employees. Lessor's obligations, as and when required by the Applicable
     Requirements, shall include, but not be limited to, the cost of
     investigation, removal, remediation, restoration and/or abatement, and
     shall survive the expiration or termination of this Lease.

          (f) INVESTIGATIONS AND REMEDIATIONS, Lessor shall retain the
     responsibility and pay for any investigations or remediation measures
     required by governmental entities having jurisdiction with respect to the
     existence of Hazardous Substances on the Premises prior to the Start Date,
     unless such remediation measure is required as a result of Lessee's use
     (including "Alterations", as defined in paragraph 7.3(a) below) of the
     Premises, in which event Lessee shall be responsible for such payment.
     Lessee shall cooperate fully in any such activities at the request of
     Lessor, including allowing Lessor and Lessor's agents to have reasonable
     access to the Premises at reasonable times in order to carry out Lessor's
     investigative and remedial responsibilities.

          (g) LESSOR TERMINATION OPTION. If a Hazardous Substance Condition (see
     Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee is
     legally responsible therefor (in which case Lessee shall make the
     investigation and remediation thereof required by the Applicable
     Requirements and this lease shall continue in full force and effect, but
     subject to Lessor's rights under Paragraph 6.2(d) and Paragraph 13), Lessor
     may, at Lessor's option, either (i) investigate and remediate such
     Hazardous Substance Condition, if required, as soon as reasonably possible
     at Lessor's expense, in which event this Lease shall continue full force
     and effect, or (ii) if the estimated cost to remediate such condition
     exceeds 12 times the then monthly Base Rent or $100,000, whichever is
     greater, give written notice to Lessee, within 30 days after receipt by
     Lessor of knowledge of the occurrence of such Hazardous Substance
     Condition, of Lessor's desire to terminate this Lease as of the date 60
     days following the date of such notice. In the event Lessor elects to give
     termination notice, Lessee may, within 10 days thereafter, give written
     notice to Lessor of Lessee's commitment to pay the amount by which the cost
     of the remediation of such Hazardous Substance Condition exceeds an amount
     equal to 12 times the then monthly Base Rent or $100,000, whichever is
     greater. Lessee shall provide Lessor with said funds or satisfactory
     assurance thereof within 30 days following such commitment. In such event,
     this Lease shall continue in full force and effect, and Lessor shall
     proceed to make such remediation as soon as reasonably possible after the
     required funds are available. If Lessee does not give such notice and
     provide the required funds or assurance thereof within the time provided,
     this Lease shall terminate as of the date specified in Lessor's notice of
     termination.

     6.3 LESSEE'S COMPLIANCE WITH APPLICABLE REQUIREMENTS. Except as otherwise
provided in the Lease, Lessee shall at Lessee's sole expense, fully, diligently
and in a timely manner, materially comply with all Applicable Requirements, the
requirements of any applicable fire insurance underwriter of rating bureau, and
the recommendations of Lessor's engineers and/or consultants which relate in any
manner to the Premises without regard to whether said requirements are now in
effect or become effective after the Start Date. Lessee shall within 10 days
after receipt of Lessor's written request, provide Lessor with copies of all
permits and other documents, and other information evidencing Lessee's
compliance with any Applicable Requirements specified by Lessor, and shall
immediately upon receipt, notify Lessor in writing (with copies of any documents
involved) of any threatened or actual claim, notice, citation, warning,
complaint or report pertaining to or involving the failure of Lessee or the
Premises to comply with any Applicable Requirements.

     6.4 INSPECTION, COMPLIANCE. Lessor and Lessor's "Lender"(as defined in
Paragraph 30) and consultants shall have the right to enter into Premises at any
time, in the case of an emergency, and otherwise at reasonable times, for the
purpose of inspecting the condition of the Premises and for verifying compliance
by Lessee with this Lease. The cost of any such inspections shall be paid by
Lessor, unless a violation of Applicable Requirements, or a contamination is
found to exist or be imminent, or the inspection is requested or ordered by a
governmental authority. In such case, Lessee shall upon request reimburse Lessor
for the cost of such inspection, so long as such inspection is reasonably
related to the violation or contamination.

7. MAINTENANCE: REPAIRS, UTILITY INSTALLATIONS; TRADE FIXTURES AND
ALTERATIONS.

     7.1 LESSEE'S OBLIGATIONS.

          (a) IN GENERAL. Subject to the provisions of Paragraph 2.2
     (Condition), 2.3 (Compliance), 6.3 (Lessee's Compliance with Applicable
     Requirements), 7.2 (Lessor's Obligations), 9 (Damage or Destruction), and
     14 (Condemnation), Lessee shall, at Lessee's sole expense, keep the
     Premises, Utility Installations (indented for Lessee's exclusive use, no
     matter where located), and Alterations in good order, condition and repair
     (whether or not the portion of the Premises requiring repairs, or the means
     of repairing the same, are reasonably or readily accessible to Lessee, and
     whether or not the need for such repairs occurs as a result of Lessee's
     use, any prior use, the elements or the age of such portion of the
     Premises), including, but not limited to, all equipment or facilities, such
     as plumbing, HVAC equipment, electrical, lighting facilities, boilers,
     pressure vessels, fixtures, interior walls, interior surfaces or exterior
     walls, ceilings, floors, windows, doors, plate glass, and skylights but
     excluding any items which are the responsibility of Lessor pursuant to
     Paragraph 7.2. Lessee, in keeping the Premises in good order, condition and
     repair, shall exercise and perform good maintenance practices, specifically
     including the procurement and maintenance of the service contacts required
     by Paragraph 7.1(b) below. Lessee's obligations shall include restorations
     replacements or renewal when necessary to keep the Premises and all
     improvements thereon or a part thereof in good order, condition and state
     of repair.

          (b) SERVICE CONTRACTS. Lessee shall, at Lessee's sole expense, procure
     and maintain contracts , with copies to Lessor, in customary form and
     substance for, and with contractors specializing and experienced in the
     maintenance of the following equipment and improvements, if any, if and
     when installed on the Premises: (i) HVAC equipment, (ii) boiler and
     pressure vessels, (iii) clarifiers, and (iv) any other equipment, if
     reasonably required by Lessor. However, Lessor reserves the right, upon
     notice to Lessee, to procure and maintain any or all of such service
     contracts, and if Lessor so elects, Lessee shall reimburse Lessor, upon
     demand, for the cost thereof.

          (c) FAILURE TO PERFORM. If Lessee fails to perform Lessee's
     obligations under this Paragraph 7.1, Lessor may enter upon the Premises
     after 10 days' prior written notice to Lessee (except in the case of an
     emergency, in which case no notice shall be required), perform such
     obligations on Lessee's behalf, and put the Premises in good order,
     condition and repair, and Lessee shall promptly reimburse Lessor for the
     cost thereof.

          (d) REPLACEMENT. Subject to Lessee's indemnification of Lessor as
     set forth in Paragraph 8.7 below, and without relieving Lessee of
     liability resulting from Lessee's failure to exercise and perform good
     maintenance practices, if an item described in Paragraph 7.1(b) cannot
     be repaired other than at a cost which is in excess of 50% of the cost
     of replacing such item, then such item shall be replaced by Lessor and
     the cost thereof shall be prorated between the Parties and Lessee shall
     only be obligated to pay, each month during the remainder of the term of
     this Lease, on the date on which Base Rent is due, an amount equal to
     the product of multiplying the cost of such replacement-by a fraction,
     the numerator of which is one and the denominator of which is 144 (i.e.
     1/144th of the cost per month), Lessee shall pay interest on the
     unamortized balance at a rate that is commercially reasonable in the
     judgment of Lessor's accountants. Lessee may, however, prepay its
     obligation at any time.

     7.2 LESSOR'S OBLIGATIONS. Subject to provisions of Paragraph 2.2
(Condition), 2.3 (Compliance), 4.2 (Common Area Operating Expenses), 6 (Use),
7.1 (Lessee's Obligations), 9 (Damage or Destruction) and 14 (Condemnation),
Lessor, subject to reimbursement pursuant to Paragraph 4.2, shall keep in
good order, condition and repair the foundations, exterior walls, structural
condition or interior bearing walls, exterior roof, fire sprinkler system,
Common Area fire alarm and/or smoke detections systems, fire hydrants,
parking lots, walkways, parkways, driveways, landscaping, fences, signs and
utility systems serving the Common Areas and all parts thereof, as well as
providing the services for which there is a Common Area Operating Expense
pursuant to Paragraph 4.2. Lessor shall not be obligated to paint the
exterior or interior surface of exterior walls nor shall Lessor be obligated
to maintain, repair or replace windows, doors or plate glass of the Premises.
Lessee expressly waives the benefit of any statute now or hereafter in effect
to the extent it is inconsistent with the terms of this Lease.

     7.3 UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.

          (a) DEFINITIONS. The term "Utility Installations" refers to all
     floor and window coverings, air lines, power panels, electrical
     distribution, security and fire protection systems, communication
     systems, lighting fixtures, HVAC equipment, plumbing, and fencing in or
     on the Premises. The firm "Trade Fixtures" shall mean Lessee's machinery
     and equipment that can be removed without doing material damage to the
     Premises. The term

                                  Page 4 of 13

<PAGE>
"Alterations" shall mean any modification of the improvements, other than
Utility Installations or Trade Fixtures, whether by addition or deletion.
"Lessee Owned Alterations and/or Utility Installations are defined as
Alterations and/or Utility Installations made by Lessee that are not yet owned
by Lessor pursuant to Paragraph 7.4(a).
          (b) CONSENT. Lessee shall not make any Alterations or Utility
Installations to the Premises without Lessor's prior written consent. Lessee
may, however, make non-structural Utility Installations to the interior of the
Premises (excluding the roof) without such consent but upon notice to Lessor, as
long as they are not visible from the outside, do not involve puncturing,
relocating or removing the roof or any existing walls, and the cumulative cost
thereof during this Lease as extended does not exceed a sum equal to 3 month's
Base Rent in the aggregate or a sum equal to one month's Base Rent in any one
year. Notwithstanding the foregoing, Lessee shall not make or permit any roof
penetrations and/or install anything on the roof without the prior written
approval of Lessor. Lessor may, as a precondition to granting such approval,
require Lessee to utilize a contractor chosen and/or approved by Lessor. Any
Alterations or Utility Installations that Lessee shall desire to make and which
require the consent of the Lessor shall be presented to Lesser in written form
with detailed plans. Consent shall be deemed conditioned upon Lessee's: (i)
acquiring all applicable governmental permits, (ii) furnishing Lessor with
copies of both the permits and the plans and specifications prior to
commencement of the work, and (iii) compliance with all conditions of said
permits and other Applicable Requirements in a prompt and expeditious manner.
Any Alterations or Utility Installations shall be performed in a workmanlike
manner with good and sufficient materials. Lessee shall promptly upon completion
furnish Lessor with as-built plans and specifications. For work which costs an
amount in excess of one month's Base Rent, Lessor may condition its consent
upon Lessee providing a lien and completion bond in an amount equal to 150% of
the estimated cost of such Alteration or Utility Installation and/or upon
Lessee's posting an additional Security Deposit with Lessor.
          (c) INDEMNIFICATION. Lessee shall pay, when due, all claims for labor
or materials furnished or alleged to have been furnished to or for Lessee at or
for use on the Premises, which claims are or may be secured by any mechanic's or
materialman's lien against the Premises or any Interest therein. Lessee shall
give Lessor not less than 10 days notice prior to the commencement of any work
in, on or about the Premises, and Lessor shall have the right to post notices of
non-responsibility. If Lessee shall contest the validity of any such lien, claim
or demand, then Lessee shall, at its sole expense defend and protect itself,
Lessor and the Premises against the same and shall pay and satisfy any such
adverse judgment that may be rendered thereon before the enforcement thereof.
If Lessor shall require, Lessee shall furnish a surety bond in an amount equal
to 150% of the amount of such contested lien, claim or demand, indemnifying
Lessor against liability for the same. If Lessor elects to participate in any
such action, Lessee shall pay Lessor's attorneys' fess and costs.
     7.4  OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.
          (a) OWNERSHIP. Subject to Lessor's right to require removal or elect
ownership as hereinafter provided, all Alterations and Utility Installations
made by Lessee shall be the property of Lessee, but considered a part of the
Premises. Lessor may, at any time, elect in writing to be the owner of all or
any specified part of the Lessee Owned Alterations and Utility Installations.
Unless otherwise instructed per paragraph 7.4(b) hereof, all Lessee Owned
Alterations and Utility Installations shall, at the expiration or termination of
this Lease, become property of Lessor and be surrendered by Lessee with the
Premises.
          (b) REMOVAL. By delivery to Lessee of written notice from Lessor not
earlier than 90 and not later than 30 days prior to the end of the term of this
Lease, Lessor may require that any or all Lessee Owned Alterations or Utility
Installations be removed by the expiration or termination of this Lease. Lessor
may require the removal at any time of all or any part of any Lessee Owned
Alterations or Utility Installations made without the required consent.
          (c) SURRENDER; RESTORATION. Lessee shall surrender the Premises by
the Expiration Date or any earlier termination date, with all of the
improvements, parts and surfaces thereof broom clean and free of debris, and
in good operating order, condition and state of repair, ordinary wear and
tear accepted. "Ordinary wear and tear" shall not include any damage or
deterioration that would have been prevented by good maintenance practice.
Notwithstanding the foregoing, if this Lease is for 12 months or less, then
Lessee shall surrender the Premises in the same condition as delivered to
Lessee on the Start Date with NO allowance for ordinary wear and tear. Lessee
shall repair any damage occasioned by the installation, maintenance or
removal of Trade Fixtures, Lessee owned Alterations and/or Utility
Installations, furnishings and equipment as well as the removal of any
storage tank installed by or for Lessee. Lessee shall also completely remove
from the Premises any and all Hazardous Substances brought onto the Premises
by or for Lessee, or any third party (except Hazardous Substances which were
deposited via underground migration from areas outside of the Project) even
if such removal would require Lessee to perform or pay for work that exceeds
statutory requirements. Trade Fixtures shall remain the property of Lessee
and shall be removed by Lessee. The failure by Lessee to timely vacate the
Premises pursuant to this Paragraph 7.4(c) without the express written
consent of Lessor shall constitute a holdover under the provisions of
Paragraph 26 below.
8.   INSURANCE; INDEMNITY.
     8.1  PAYMENT OF PREMIUMS. The cost of the premiums for the insurance
policies required to be carried by Lessor, pursuant to Paragraphs 8.2(b), 8.3(a)
and 8.3(b), shall be a Common Area Operating Expense. Premiums for policy
periods commencing prior to, or extending beyond, the term of this Lease shall
be prorated to coincide with the corresponding Start Date or Expiration Date.
     8.2  LIABILITY INSURANCE.
          (a) CARRIED BY LESSEE. Lessee shall obtain and keep in force a
Commercial General Liability policy of insurance protecting Lessee and Lessor as
an additional insured against claims for bodily injury, personal injury and
property damage based upon or arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant thereto. Such insurance
shall be on an occurrence basis providing single limit coverage in an amount not
less than $1,000,000 per occurrence with an annual aggregate of not less than
$2,000,000, an "Additional Insured-Managers or Lessors of Premises Endorsement"
and contain the "Amendment of the Pollution Exclusion Endorsement" for damage
caused by heat, smoke or fumes from a hostile fire. The policy shall not contain
any intra-insured exclusions as between insured persons or organizations, but
shall include overage for liability assumed under this Lease and an "insured
contract" for the performance of Lessee's indemnity obligations under this
Lease. The limits of said insurance shall not, however, limit the liability of
Lessee nor relieve Lessee of any obligation hereunder. All insurance carried by
Lessee shall by primary to and not contributory with any similar insurance
carried by Lessor, whose insurance shall be considered excess insurance only.
          (b) CARRIED BY LESSOR. Lessor shall maintain liability insurance as
described in Paragraph 8.2(a), in addition to, and not in lieu of, the Insurance
required to be maintained by Lessee. Lessee shall not be named as an additional
Insured therein.
     8.3  PROPERTY INSURANCE - BUILDING, IMPROVEMENTS AND RENTAL VALUE.
          (a) BUILDING AND IMPROVEMENTS. Lessor shall obtain and keep in force a
policy or polices of Insurance in the name of Lessor, with loss payable to
Lessor, any ground-lessor, and to any Lender insuring loss or damage to the
Premises. The amount of such insurance shall be equal to the full replacement
cost of the Premises, as the same shall exist from time to time, or the amount
required by any Lender, but in no event more than the commercially reasonable
and available Insurable value thereof. Lessee Owned Alterations and Utility
Installations, Trade Fixtures, and Lessee's personal property shall be insured
by Lessee under Paragraph 8.4. If the coverage is available and commercially
appropriate, such policy or policies shall insure against all risks of direct
physical loss or damage (except the perils of flood and/or earthquake unless
required by a Lender), including coverage for debris removal and the enforcement
of any Applicable Requirements requiring the upgrading, demolition,
reconstruction or replacement of any portion of the Premises as the result of a
covered loss. Said policy or policies shall also contain an agreed valuation
provision in lieu of any coinsurance clause, waiver of subrogation, and
inflation guard protection causing an increase in the annual property Insurance
coverage amount by a factor of not less than the adjusted U.S. Department of
Labor Consumer Price Index for All Urban Consumers for the city nearest to where
the Premises are located. If such insurance coverage has a deductible clause,
the deductible amount shall not exceed $1,000 per occurrence.
          (b) RENTAL VALUE. Lessor shall also obtain and keep in force a policy
or policies in the name of Lessor with loss payable to Lessor and any Lender,
insuring the loss of the full Rent for one year with an extended period of
indemnity for an additional 180 days ("RENTAL VALUE INSURANCE"). Said insurance
shall contain an agreed valuation provision in lieu of any coinsurance clause,
and the amount of coverage shall be adjusted annually to reflect the projected
Rent otherwise payable by Lessee, for the next 12 month period.
          (c) ADJACENT PREMISES. Lessee shall pay for any increase in the
premiums for the property insurance of the Building and for the Common Areas or
other buildings in the Project if said increase is caused by Lessee's acts,
omissions, use or occupancy of the Premises.
          (d) LESSEE'S IMPROVEMENTS. Since Lessor is the Insuring Party, Lessor
shall not be required to insure Lessee Owned Alterations and Utility
Installations unless the item in question has become the property of Lessor
under the terms of this Lease.
     8.4  LESSEE'S PROPERTY; BUSINESS INTERRUPTION INSURANCE.
          (a) PROPERTY DAMAGE. Lessee shall obtain and maintain Insurance
coverage on all of Lessee's personal property, Trade Fixtures, and Lessee Owned
Alterations and Utility Installations. Such Insurance shall be full replacement
cost coverage with a deductible of not to exceed $1,000 per occurrence. The
proceeds from any such Insurance shall be used by Lessee for the replacement of
personal property. Trade Fixtures and Lessee Owned Alterations and Utility
Installations. Lessee shall provide Lessor with written evidence that such
Insurance is in force.
          (b) BUSINESS INTERRUPTION. Lessee shall obtain and maintain loss of
Income and extra expense insurance in amounts as will reimburse Lessee for
direct or indirect loss of earnings attributable to all perils commonly insured
against by prudent lessees in the business of Lessee or attributable to
prevention of access to the Premises as a result of such perils.
          (c) NO REPRESENTATION OF ADEQUATE COVERAGE. Lessor makes no
representation that the limits or forms of coverage of insurance specified
herein are adequate to cover Lessee's property, business operations or
obligations under this Lease.
     8.5  INSURANCE POLICES. Insurance required herein shall be by companies
duly licensed or admitted to transact business in the state where the Premises
are located, and maintaining during the policy term a "General Policyholders
Rating" of at least B+, V, as set forth in the most current issue of "Best's
Insurance Guide", or such other rating as may be required by a Lender. Lessee
shall not do or permit to be done anything which invalidates the required
insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor
certified copies of policies of such insurance or certificates evidencing the
existence and amounts of the required insurance. No such policy shall be
cancelable or subject to modification except after 30 days prior written notice
to Lessor. Lessee shall, at least 30 days prior to the expiration of such
policies, furnish Lessor with evidence of renewals or "insurance binders"
evidencing

INITIALS [ILLEGIBLE]                                 INITIALS [ILLEGIBLE]

                                Page 5 of 13

<PAGE>

renewal thereof, or Lessor may order such insurance and charge the cost thereof
to Lessee, which amount shall be payable by Lessee to Lessor upon demand. Such
policies shall be for a term of at least one year, or the length of the
remaining term of this Lease, whichever is less. If either Party shall fail to
procure and maintain the Insurance required to be carried by it, the other Party
may, but shall not be required to, procure and maintain the same.
     8.6  WAIVER OF SUBROGATION. Without affecting any other rights or remedies,
Lessee and Lessor each hereby release and relieve the other, and waive their
entire right to recover damages against the other, for loss of or damage to its
property arising out of or incident to the perils required to be insured against
herein. The effect of such releases and waivers is not limited by the amount of
insurance carried or required, or by any deductibles applicable hereto. The
Parties agree to have their respective property damage insurance carriers waive
any right to subrogation that such companies may have against Lessor or Lessee,
as the case may be, so long as the insurance is not invalidated thereby.
     8.7  INDEMNITY. Except for Lessor's gross negligence or willful misconduct,
Lessee shall indemnify, protect, defend and hold harmless the Premises, Lessor
and its agents, Lessor's master or ground lessor, partners and Lenders, from and
against any and all claims, loss of rents and/or damages, liens, judgments,
penalties, attorneys' and consultants' fees, expenses and/or liabilities arising
out of, involving, or in connection with, the use and/or occupancy of the
Premises by Lessee. If any action or proceeding is brought against Lessor by
reason of any of the foregoing matters, Lessee shall upon notice defend the same
at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor
shall cooperate with Lessee in such defense. Lessor need not have first paid any
such claim in order to be defended or indemnified.
     8.8  EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other property of
Lessee, Lessee's employees, contractors, invitees, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or
results form fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, HVAC or lighting fixtures, or from any other cause,
whether the said injury or damage results from conditions arising upon the
Premises or upon other portions of the Building, or from other sources or
places. Lessor shall not be liable for any damages arising from any act or
neglect of any other tenant of Lessor nor from the failure of Lessor to enforce
the provisions of any other lease in the Project. Notwithstanding Lessor's
negligence or breach of this Lease, Lessor shall under no circumstances be
liable for injury to Lessee's business or for any loss of income or profit
therefrom.
9.   DAMAGE OR DESTRUCTION.
     9.1  DEFINITIONS
          (a) "PREMISES PARTIAL DAMAGE" shall mean damage or destruction to the
Improvements on the Premises, other than Lessee Owned Alterations and Utility
Installations, which can reasonably be repaired in 3 months or less from the
date of the damage or destruction, and the cost thereof does not exceed a sum
equal to 6 month's Base Rent. Lessor shall notify Lessee in writing within 30
days from the date of the damage or destruction as to whether or not the damage
is Partial or Total.
          (b) "PREMISES TOTAL DESTRUCTION" shall mean damage or destruction to
the improvements on the Premises, other than Lessee Owned Alterations and
Utility Installations and Trade Fixtures, which cannot reasonably be repaired in
3 months or less from the date of the damage or destruction and/or the cost
thereof exceeds a sum equal to 6 month's Base Rent. Lessor shall notify Lessee
in writing within 30 days from the date of the damage or destruction as to
whether or not the damage is Partial or Total.
          (c) "INSURED LOSS" shall mean damage or destruction to improvements
on the Premises, other than Lessee Owned Alterations and Utility
Installations and Trade Fixtures, which was caused by an event required to be
covered by the Insurance described in Paragraph 8.3(a), irrespective of any
deductible amounts or coverage limits involved.
          (d) "REPLACEMENT COST" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and
upgrading required by the operation of Applicable Requirements, and without
deduction for depreciation.
          (e) "HAZARDOUS SUBSTANCE CONDITION" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination by, a
Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the
Premises.
     9.2  PARTIAL DAMAGE - INSURED LOSS. If a Premises Partial Damage that is an
Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such damage
(but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect; provided, however, that Lessee shall, at Lessor's
election, make the repair of any damage or destruction the total cost to repair
of which is $5,000 or less, and in such event, Lessor shall make any applicable
insurance proceeds available to Lessee on a reasonable basis for that purpose.
Notwithstanding the foregoing, if the required insurance was not in force or the
insurance proceeds are not sufficient to effect such repair, the insuring Party
shall promptly contribute the shortage in proceeds as and when required to
complete said repairs. In the event, however, such shortage was due to the fact
that, by reason of the unique nature of the improvements, full replacement cost
insurance coverage was not commercially reasonable and available, Lessor shall
have no obligation to pay for the shortage in insurance proceeds or to fully
restore the unique aspects of the Premises unless Lessee provides Lessor with
the funds to cover same, or adequate assurance thereof, within 10 days following
receipt of written notice of such shortage and request therefor. If Lessor
receives said funds or adequate assurance thereof within said 10 day period, the
party responsible for making the repairs shall complete them as soon as
reasonably possible and this Lease shall remain in full force and effect. If
such funds or assurance are not received, Lessor may nevertheless elect by
written notice to Lessee within 10 days thereafter to: (i) make such restoration
and repair as is commercially reasonable with Lessor paying any shortage in
proceeds, in which case this Lease shall remain in full force and effect, or
(ii) have this Lease terminate 30 days thereafter. Lessee shall not be entitled
to reimbursement of any funds contributed by Lessee to repair any such damage or
destruction. Premises Partial Damage due to flood or earthquake shall be subject
to Paragraph 9.3, notwithstanding that there may be some insurance coverage, but
the net proceeds of any such insurance shall be made available for the repairs
if made by either Party.
     9.3  PARTIAL DAMAGE - UNINSURED LOSS. If a Premises Partial Damage that is
not an insured Loss occurs, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make repairs at Lessee's expense), Lessor
may either: (i) repair such damage as soon as reasonably possible at Lessor's
expense, in which event this Lease shall continue in full force and effect, or
(ii) terminate this Lease by giving written notice to Lessee within 30 days
after receipt by Lessor of knowledge of the occurrence of such damage. Such
termination shall be effective 60 days following the date of such notice. In the
event Lessor elects to terminate this Lease, Lessee shall have the right within
10 days after receipt of the termination notice to give written notice to Lessor
of Lessee's commitment to pay for the repair of such damage without
reimbursement from Lessor. Lessee shall provide Lessor with said funds or
satisfactory assurance thereof within 30 days after making such commitment. In
such event this Lease shall continue in full force and effect, and Lessor shall
proceed to make such repairs as soon as reasonably possible after the required
funds are available. If Lessee does not make the required commitment, this Lease
shall terminate as of the date specified in the termination notice.
     9.4  TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs, this Lease shall terminate 60 days following
such Destruction. If the damage or destruction was caused by the gross
negligence or willful misconduct of Lessee, Lessor shall have the right to
recover Lessor's damages from Lessee, except as provided in Paragraph 8.6.
     9.5  DAMAGE NEAR END OF TERM. If at any time during the last 6 months of
this Lease there is damage for which the cost to repair exceeds one month's Base
Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective
60 days following the date of occurrence of such damage by giving a written
termination notice to Lessee within 30 days after the date of occurrence of such
damage. Notwithstanding the foregoing, if Lessee at that time has an exercisable
option to extend this Lease or to purchase the Premises, then Lessee may
preserve this Lease by, (a) exercising such option and (b) providing Lessor with
any shortage in Insurance proceeds (or adequate assurance thereof) needed to
make the repairs on or before the earlier of (i) the date which is 10 days
after Lessee's receipt of Lessor's written notice purporting to terminate this
Lease, or (ii) the day prior to the date upon which such option expires. If
Lessee duly exercises such option during such period and provides Lessor with
funds (or adequate assurance thereof) to cover any shortage in insurance
proceeds, Lessor shall, at Lessor's commercially reasonable expense, repair such
damage as soon as reasonably possible and this Lease shall continue in full
force and effect. If Lessee fails to exercise such option and provide such funds
or assurance during such period, then this Lease shall terminate on the date
specified in the termination notice and Lessee's option shall be extinguished.
     9.6  ABATEMENT OF RENT; LESSEE'S REMEDIES.
          (a) ABATEMENT. In the event of Premises Partial Damage or Premises
Total Destruction or a Hazardous Substance Condition for which Lessee is not
responsible under this Lease, the Rent payable by Lessee for the period required
for the repair, remediation or restoration of such damage shall be abated in
proportion to the degree to which Lessee's use of the Premises is impaired, but
not to exceed the proceeds received from the Rental Value insurance. All other
obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall
have no liability for any such damage, destruction, remediation, repair or
restoration except as provided herein.
          (b) REMEDIES. If Lessor shall be obligated to repair or restore the
Premises and does not commence, in a substantial and meaningful way, such repair
or restoration within 90 days after such obligation shall accrue, Lessee may, at
any time prior to the commencement of such repair or restoration, give written
notice to Lessor and to any Lenders of which Lessee has actual notice, of
Lessee's election to terminate this Lease on a date not less than 60 days
following the giving of such notice. If Lessee gives such notice and such repair
or restoration is not commenced within 30 days thereafter, this Lease shall
terminate as of the date specified in said notice. If the repair or restoration
is commenced within such 30 days, this Lease shall continue in full force and
effect. "Commence" shall mean either the unconditional authorization of the
preparation of the required plans, or the beginning of the actual work on the
Premises, whichever first occurs.
     9.7  TERMINATION; ADVANCE PAYMENTS. Upon termination of this Lease pursuant
to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made
concerning advance Base Rent and any other advance payments made by Lessee to
Lessor. Lessor shall, in addition, return to Lessee so much of Lessee's Security
Deposit as has not been, or is not then required to be, used by Lessor.
     9.8  WAIVE STATUTES. Lessor and Lessee agree that the terms of this
Lease shall govern the effect of any damage to or destruction of the Premises
with respect to the termination of this Lease and hereby waive the provisions
of any present or future statute to the extent inconsistent herewith.
10.  REAL PROPERTY TAXES.
     10.1 DEFINITION. As used herein, the term "Real Property Taxes" shall
include any form of assessment; real estate, general, special, ordinary.

INITIALS [ILLEGIBLE]                                 INITIALS [ILLEGIBLE]

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or extraordinary, or rental levy or tax (other than insurance, personal income
or estate taxes); improvement bond; and/or license fee imposed upon or levied
against any legal or equitable Interest of Lessor in the Project, Lessor's right
to other income therefrom, and the Lessor's business of leasing, by any
authority having the direct or indirect power to tax and where the funds are
generated with reference to the Project address and where the proceeds so
generated are to be applied by the city, county or other local taxing
authority of a jurisdiction within which the Project is located. The term "Real
Property Taxes" shall also include any tax, fee, levy, assessment or charge, or
any increase therein, imposed by reason of events occurring during the term of
this Lease, including but not limited to, a change in the ownership of the
Project or any portion thereof or a change in the improvements thereon. In
calculating Real Property Taxes for any calendar year, the Real Property Taxes
for any real estate tax year shall be included in the calculation of Real
Property Taxes for such calendar year based upon the number of days which such
calendar year and tax year have in common.
         10.2 PAYMENT OF TAXES. Lessor shall pay the Real Property Taxes
applicable to the Project, and except as otherwise provided in Paragraph
10.3, any such amounts shall be included in the calculation of Common Area
Operating Expenses in accordance with the provisions of Paragraph 4.2.
         10.3 ADDITIONAL IMPROVEMENTS. Common Area Operating Expenses shall
not include Real Property Taxes specified in the tax assessor's records and
work sheets as being caused by additional improvements placed upon the
Project by other lessees or by Lessor for the exclusive enjoyment of such
other lessees. Notwithstanding Paragraph 10.2 hereof, Lessee shall, however,
pay to Lessor at the time Common Area Operating Expenses are payable under
Paragraph 4.2, the entirety of any increase in Real Property Taxes if
assessed solely by reason of Alterations, Trade Fixtures or Utility
Installations placed upon the Premises by Lessee or at Lessee's request.
         10.4 JOINT ASSESSMENT. If the Building is not separately assessed,
Real Property Taxes allocated to the Building shall be an equitable
proportion of the Real Property Taxes for all of the land and improvements
included within the tax parcel assessed, such proportion to be determined by
Lessor from the respective valuations assigned in the assessor's work sheets
or such other information as may be reasonably available. Lessor's reasonable
determination thereof, in good faith, shall be conclusive.
         10.5 PERSONAL PROPERTY TAXES. Lessee shall pay prior to delinquency
all taxes assessed against and levied upon Lessee Owned Alterations and
Utility Installations, Trade Fixtures, furnishings, equipment and all
personal property of Lessee contained in the Premises. When possible, Lessee
shall cause its Lessee Owned Alterations and Utility installations, Trade
Fixtures, furnishings, equipment and all other personal property to be
assessed and billed separately from the real property of Lessor. If any of
Lessee's said property shall be assessed with Lessor's real property, Lessee
shall pay Lessor the taxes attributable to Lessee's property within 10 days
after receipt of a written statement setting forth the taxes applicable to
Lessee's property.
11. UTILITIES. Lessee shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to the
Premises, together with any taxes thereon. Notwithstanding the provisions of
Paragraph 4.2, if at any time in Lessor's sole judgment, Lessor determines
that Lessee is using a disproportionate amount of water, electricity or other
commonly metered utilities, or that Lessee is generating such a large volume
of trash as to require an increase in the size of the dumpster and/or an
increase in the number of times per month that the dumpster is emptied, then
Lessor may increase Lessee's Base Rent by an amount equal to such increased
costs.
12.      ASSIGNMENT AND SUBLETTING.
         12.1     LESSOR'S CONSENT REQUIRED.
                  (a) Lessee shall not voluntarily or by operation of law
assign, transfer, mortgage or encumber (collectively, "assign or assignment")
or sublet all or any part of Lessee's interest in this Lease or in the
Premises without Lessor's prior written consent.
                  (b) A change in the control of Lessee shall constitute an
assignment requiring consent. The transfer, on a cumulative basis, of 25% or
more of the voting control of Lessee shall constitute a change in control
for this purpose.
                  (c) The involvement of Lessee or its assets in any
transaction, or series of transactions (by way of merger, sale, acquisition,
financing, transfer, leveraged buy-out or otherwise), whether or not a formal
assignment or hypothecation of this Lease or Lessee's assets occurs, which
results or will result in a reduction of the Net Worth of Lessee by an amount
greater than 25% of such Net Worth as it was represented at the time of the
execution of this Lease or at the time of the most recent assignment to which
Lessor has consented, or as it exists immediately prior to said transaction
or transactions constituting such reduction, whichever was or is greater,
shall be considered an assignment of this Lease to which Lessor may withhold
its consent. "NET WORTH OF LESSEE" shall mean the net worth of Lessee
(excluding any guarantors) established under generally accepted accounting
principles.
                  (d) An assignment or subletting without consent shall, at
Lessor's option, be a Default curable after notice per Paragraph 13.1(c), or
a noncurable Breach without the necessity of any notice and grace period. If
Lessor elects to treat such unapproved assignment or subletting as a
noncurable Breach, Lessor may either: (i) terminate this Lease, or (ii) upon
30 days written notice, increase the monthly Base Rent to 110% of the Base
Rent then in effect. Further, in the event of such Breach and rental
adjustment, (i) the purchase price of any option to purchase the Premises
held by Lessee shall be subject to similar adjustment to 110% of the price
previously in effect, and (ii) all fixed and non-fixed rental adjustments
scheduled during the remainder of the Lease term shall be increased to 110%
of the scheduled adjusted rent.
                  (e) Lessee's remedy for any breach of Paragraph 12.1 by Lessor
shall be limited to compensatory damages and/or injunctive relief.
        12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.
                  (a) Regardless of Lessor's consent, no assignment or
subletting shall: (i) be effective without the express written assumption by
such assignee or sublessee of the obligations of Lessee under this Lease, (ii)
release Lessee of any obligations hereunder, or (iii) alter the primary
liability of Lessee for the payment of Rent or for the performance of any other
obligations to be performed by Lessee.
                  (b) Lessor may accept Rent or performance of Lessee's
obligations from any person other than Lessee pending approval or disapproval of
an assignment. Neither a delay in the approval or disapproval of such assignment
nor the acceptance of Rent or performance shall constitute a waiver of
estoppel of Lessor's right to exercise its remedies for Lessee's Default or
Breach.
                  (c) Lessor's consent to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting.
                  (d) In the event of any Default or Breach by Lessee, Lessor
may proceed directly against Lessee, any Guarantors or anyone else responsible
for the performance of Lessee's obligations under this Lease, including any
assignee or sublessee, without first exhausting Lessor's remedies against any
other person or entity responsible therefore to Lessor, or any security held by
Lessor.
                  (e) Each request for consent to an assignment or subletting
shall be in writing, accompanied by information relevant to Lessor's
determination as to the financial and operational responsibility and
appropriateness of the proposed assignee or sublessee, including but not limited
to the intended use and/or required modification of the Premises, if any,
together with a fee of $1,000 or 10% of the current monthly Base Rent applicable
to the portion of the Premises which is the subject of the proposed assignment
or sublease, whichever is greater, as consideration for Lessor's considering and
processing said request. Lessee agrees to provide Lessor with such other or
additional information and/or documentation as may be reasonably requested.
                  (f) Any assignee of, or sublessee under, this Lease shall, by
reason of accepting such assignment or entering into such sublease, be deemed to
have assumed and agreed to conform and comply with each and every term,
covenant, condition and obligation herein to be observed or performed by Lessee
during the term of said assignment or sublease, other than such obligations as
are contrary to or inconsistent with provisions of an assignment or sublease to
which Lessor has specifically consented to in writing.
                  (g) Lessor's consent to any assignment or subletting shall not
transfer to the assignee or sublessee any Option granted to the original Lessee
by this Lease unless such transfer is specifically consented to by Lessor in
writing. (See Paragraph 39.2)
          12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:
                  (a) Lessee hereby assigns and transfers to Lessor all of
Lessee's interest in all Rent payable on any sublease, and Lessor may collect
such Rent and apply same toward Lessee's obligations under this Lease; provided,
however, that until a Breach shall occur in the performance of Lessee's
obligations, Lessee may collect said Rent. Lessor shall not, by reason of the
foregoing or any assignment of such sublease, nor by reason of the collection of
Rent, be deemed liable to the sublessee for any failure of Lessee to perform and
comply with any of Lessee's obligations to such sublessee. Lessee hereby
irrevocably authorizes and directs any such sublessee, upon receipt of a written
notice from Lessor stating that a Breach exists in the performance of Lessee's
obligations under this Lease, to pay to Lessor all Rent due and to become due
under the sublease. Sublessee shall rely upon any such notice from Lessor and
shall pay all Rents to Lessor without any obligation or right to inquire as to
whether such Breach exists, notwithstanding any claim from Lessee to the
contrary.
                  (b) In the event of a Breach by Lessee, Lessor may, at its
option, require sublessee to attorn to Lessor, in which event Lessor shall
undertake the obligations of the sublessor under such sublease from the time of
the exercise of said option to the expiration of such sublease; provided,
however, Lessor shall not be liable for any prepaid rents or security deposit
paid by such sublessee to such sublessor or for any prior Defaults or Breaches
of such sublessor.
                  (c) Any matter requiring the consent of the sublessor under a
sublease shall also require the consent of Lessor.
                  (d) No sublessee shall further assign or sublet all or any
part of the Premises without Lessor's prior written consent.
                  (e) Lessor shall deliver a copy of any notice of Default or
Breach by Lessee to the sublessee, who shall have the right to cure the Default
of Lessee within the grace period, if any, specified in such notice. The
sublessee shall have a right of reimbursement and offset from and against Lessee
for any such Defaults cured by the sublessee.
13. DEFAULT; BREACH; REMEDIES.
          13.1 DEFAULT; BREACH. A "Default" is defined as a failure by the
Lessee to comply with or perform any of the terms, covenants, conditions or
Rules and Regulations under this Lease. A "Breach" is defined as the occurrence
of one or more of the following Defaults, and the failure of Lessee to cure such
Default within any applicable grace period;
                  (a) The abandonment of the Premises; or the vacating of the
Premises without providing a commercially reasonable level of security, or where
the coverage of the property insurance described in Paragraph 8.3 is jeopardized
as a result thereof, or without providing reasonable assurances to minimize
potential vandalism.
                 (b) The failure of Lessee to make any payment of Rent or any
Security Deposit required to be made by Lessee hereunder, whether

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to Lessor or to a third party, when due, to provide reasonable evidence of
insurance or surety bond and to fulfill any obligation under this Lease which
endangers or threatens life or property, where such failure continues for a
period of 3 business days following written notice to Lessee.
                  (c) The failure by Lessee to provide (i) reasonable written
evidence of compliance with Applicable Requirements, (ii) the service contracts,
(iii) the rescission of an unauthorized assignment or subletting, (iv) an
Estoppel Certificate, (v) a requested subordination, (vi) evidence concerning
any guaranty and/or Guarantor, (vii) any document requested under Paragraph 41
(easements), or (viii) any other documentation or information which Lessor may
reasonably require of Lessee under the terms of this Lease, where any such
failure continues for a period of 10 days following written notice to Lessee.
                  (d) A Default by Lessee as to the terms, covenants, conditions
or provisions of this Lease, or of the rules adopted under Paragraph 2.9 hereof,
other than those described in subparagraphs 13.1(a), (b) or (c), above, where
such Default continues for a period of 30 days after written notice; provided,
however, that if the nature of Lessee's Default is such that more than 30 days
are reasonably required for its cure, then it shall not be deemed to be a Breach
if Lessee commences such cure within said 30 day period and thereafter
diligently prosecutes such cure to completion.
                  (e) The occurrence of any of the following events: (i) the
making of any general arrangement or assignment for the benefit of creditors;
(ii) becoming a "debtor" as defined in 11 U.S.C. Section 101 or any successor
statute thereto (unless, in the case of a petition filed against Lessee, the
same is dismissed within 60 days); (iii) the appointment of a trustee or
receiver to take possession of substantially all of Lessee's assets located at
the Premises or of Lessee's interest in this Lease, where possession is not
restored to Lessee within 30 days; or (iv) the attachment, execution or other
judicial seizure of substantially all of Lessee's assets located at the Premises
or of Lessee's interest in this Lease, where such seizure is not discharged
within 30 days; provided, however, in the event that any provision of this
subparagraph (e) is contrary to any applicable law, such provision shall be of
no force or effect, and not affect the validity of the remaining provisions.
                  (f) The discovery that any financial statement of Lessee or of
any Guarantor given to Lessor was materially false.
                  (g) If the performance of Lessee's obligations under this
Lease is guaranteed: (i) the death of a Guarantor, (ii) the termination of a
Guarantor's liability with respect to this Lease other than in accordance with
the terms of such guaranty, (iii) a Guarantor's becoming insolvent or the
subject of a bankruptcy filing, (iv) a Guarantor's refusal to honor the
guaranty, or (v) a Guarantor's breach of its guaranty obligation on an
anticipatory basis, and Lessee's failure, within 60 days following written
notice of any such event, to provide written alternative assurance or security,
which, when coupled with the then existing resources of Lessee, equals or
exceeds the combined financial resources of Lessee and the Guarantors that
existed at the time of execution of this Lease.
          13.2 REMEDIES. If Lessee fails to perform any of its affirmative
duties or obligations, within 10 days after written notice (or in case of an
emergency, without notice), Lessor may, at its option, perform such duty or
obligation on Lessee's behalf, including but not limited to the obtaining of
reasonably required bonds, insurance policies, or governmental licenses, permits
or approvals. The costs and expenses of any such performance by Lessor shall be
due and payable by Lessee upon receipt of invoice therefor. If any check given
to Lessor by Lessee shall not be honored by the bank upon which it is drawn,
Lessor, at its option, may require all future payments to be made by Lessee to
be by cashier's check. In the event of a Breach, Lessor may, with or without
further notice or demand, and without limiting Lessor in the exercise of any
right or remedy which Lessor may have by reason of such Breach:
                  (a) Terminate Lessee's right to possession of the Premises by
any lawful means, in which case this Lease shall terminate and Lessee shall
immediately surrender possession to Lessor. In such event Lessor shall be
entitled to recover from Lessee: (i) the unpaid Rent which had been earned at
the time of termination; (ii) the worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that the Lessee proves
could have been reasonably avoided; (iii) the worth at the time of award of the
amount by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor for
all the detriment proximately caused by the Lessee's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorneys' fees, and that
portion of any leasing commission paid by Lessor in connection with this Lease
applicable to the unexpired term of this Lease. The worth at the time of award
of the amount referred to in provision (iii) of the immediately preceding
sentence shall be computed by discounting such amount at the discount rate of
the Federal Reserve Bank of the District within which the Premises are located
at the time of award plus one percent. Efforts by Lessor to mitigate damages
caused by Lessee's Breach of this Lease shall not waive Lessor's right to
recover damages under Paragraph 12. If termination of this Lease is obtained
through the provisional remedy of unlawful detainer, Lessor shall have the right
to recover in such proceeding any unpaid Rent and damages as are recoverable
therein, or Lessor may reserve the right to recover all or any part thereof in a
separate suit. If a notice and grace period required under Paragraph 13.1 was
not previously given, a notice to pay rent or quit, or to perform or quit given
to Lessee under the unlawful detainer statute shall also constitute the notice
required by Paragraph 13.1. In such case, the applicable grace period required
by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and
the failure of Lessee to cure the Default within the greater of the two such
grace periods shall constitute both an unlawful detainer and a Breach of this
Lease entitling Lessor to the remedies provided for in this Lease and/or by said
statute.
                  (b) Continue the Lease and Lessee's right to possession and
recover the Rent as it becomes due, in which event Lessee may sublet or assign,
subject only to reasonable limitations. Acts of maintenance, efforts to relet,
and/or the appointment of a receiver to protect the Lessor's interests, shall
not constitute a termination of the Lessee's right to possession.
                  (c) Pursue any other remedy now or hereafter available under
the laws or judicial decisions of the state wherein the Premises are located.
The expiration or termination of this Lease and/or the termination of Lessee's
right to possession shall not relieve Lessee from liability under any indemnity
provisions of this Lease as to matters occurring or accruing during the term
hereof or by reason of Lessee's occupancy of the Premises.
          13.3 INDUCEMENT RECAPTURE. Any agreement for free or abated rent or
other charges, or for the giving or paying by Lessor to or for Lessee of any
cash or other bonus, inducement or consideration for Lessee's entering into this
Lease, all of which concessions are hereinafter referred to as "Inducement
Provisions", shall be deemed conditioned upon Lessee's full and faithful
performance of all the terms, covenants and conditions of this Lease. Upon
Breach of this Lease by Lessee, any such Inducement Provision shall
automatically be deemed deleted from this Lease and of no further force or
effect, and any rent, other charge, bonus, inducement or consideration
theretofore abated, given or paid by Lessor under such an Inducement Provision
shall be immediately due and payable by Lessee to Lessor, notwithstanding any
subsequent cure of said Breach by Lessee. The acceptance by Lessor of rent or
the cure of the Breach which initiated the operation of this paragraph shall not
be deemed a waiver by Lessor of the provisions of this paragraph unless
specifically so stated in writing by Lessor at the time of such acceptance.
          13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by
Lessee of Rent will cause Lessor to incur costs not contemplated by this Lease,
the exact amount of which will be extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent
shall not be received by Lessor within 5 days after such amount shall be due,
then, without any requirement for notice to Lessee, Lessee shall pay to Lessor a
one-time late charge equal to 10% of each such overdue amount or $100, whichever
is greater. The parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of such late
payment. Acceptance of such late charge by Lessor shall in no event constitute a
waiver of Lessee's Default or Breach with respect to such overdue amount, nor
prevent the exercise of any of the other rights and remedies granted hereunder.
In the event that a late charge is payable hereunder, whether or not collected,
for 3 consecutive installments of Base Rent, then notwithstanding any provision
of this Lease to the contrary, Base Rent shall, at Lessor's option, become due
and payable quarterly in advance.
          13.5 INTEREST. Any monetary payment due Lessor hereunder, other than
late charges, not received by Lessor, when due as to scheduled payments (such as
Base Rent) or within 30 days following the date on which it was due for
non-scheduled payment, shall bear interest from the date when due, as to
scheduled payments, or the 31st day after it was due as to non-scheduled
payments. The interest ("Interest") charged shall be equal to the prime rate
reported in the Wall Street Journal as published closest prior to the date when
due plus 4%, but shall not exceed the maximum rate allowed by law. Interest is
payable in addition to the potential late charge provided for in Paragraph 13.4.
          13.6 BREACH BY LESSOR
                  (a) NOTICE OF BREACH. Lessor shall not be deemed in breach of
this Lease unless Lessor fails within a reasonable time to perform an obligation
required to be performed by Lessor. For purposes of this Paragraph, a reasonable
time shall in no event be less than 30 days after receipt by Lessor, and any
Lender whose name and address shall have been furnished Lessee in writing for
such purpose, of written notice specifying wherein such obligation of Lessor has
not been performed; provided, however, that if the nature of Lessor's obligation
is such that more than 30 days are reasonably required for its performance, then
Lessor shall not be in breach if performance is commenced within such 30 day
period and thereafter diligently pursued to completion.
                  (b) PERFORMANCE BY LESSEE ON BEHALF OF LESSOR. In the event
that neither Lessor nor Lender cures said breach within 30 days after receipt of
said notice, or if having commenced said cure they do not diligently pursue it
to completion, then Lessee may elect to cure said breach at Lessee's expense and
offset from Rent an amount equal to the greater of one month's Base Rent or the
Security Deposit, and to pay an excess of such expense under protest, reserving
Lessee's right to reimbursement from Lessor. Lessee shall document the cost of
said cure and supply said documentation to Lessor.

14. CONDEMNATION. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said
power (collectively "Condemnation"), this Lease shall terminate as to the
part taken as of the date the condemning authority takes title or possession,
whichever first occurs. If more than 10% of the floor area of the Unit, or
more than 25% of Lessee's Reserved Parking Spaces, is taken by Condemnation,
Lessee may, at Lessee's option, to be exercised in writing within 10 days
after Lessor shall have given Lessee written notice of such taking (or in the
absence of such notice, within 10 days after the condemning authority shall
have taken possession) terminate this Lease as of the date the condemning
authority takes such possession. If Lessee does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in full force and
effect as to the portion of the Premises remaining, except that the Base Rent
shall be reduced in proportion to the reduction in utility of the Premises
caused by such Condemnation. Condemnation awards and/or payments shall be the
property of Lessor, whether such award shall be made as compensation for
diminution in value of the leasehold, the value of the part taken, or for
severance damages; provided, however, that Lessee shall be entitled to any
compensation for

                                  Page 8 of 13











<PAGE>

Lessee's relocation expenses, loss of business good will and/or Trade Fixtures,
without regard to whether or not this Lease is terminated pursuant to the
provisions of this Paragraph. All Alterations and [ILLEGIBLE] Installations made
to the Premises by Lessee, for purposes of Condemnation only, shall be
considered the property of the Lessee and Lessee shall be entitled to any and
all compensation which is payable therefor. In the event that this Lease is not
terminated by reason of the Condemnation, Lessor shall repair any damage to the
Premises caused by such Condemnation.
15. BROKERAGE FEES.
        15.1    ADDITIONAL COMMISSION. In addition to the payments owed pursuant
to Paragraph 1.10 above, and unless Lessor and the Brokers otherwise agree in
writing, Lessor agrees that: (a) If Lessee exercises any Option, (b) if Lessee
acquires from Lessor any rights to the Premises or other premises owned by
Lessor and located within the Project, (c) if Lessee remains in possession of
the Premises, with the consent of Lessor, after the expiration of this Lease, or
(d) if Base Rent is increased, whether by agreement or operation of an
escalation clause herein, then, Lessor shall pay Brokers a fee in accordance
with the schedule of the Brokers in effect at the time of the execution of this
Lease.
       15.2 ASSUMPTION OF OBLIGATIONS. Any buyer or transferee of Lessor's
interest in this Lease shall be deemed to have assumed Lessor's obligation
hereunder. Brokers shall be third party beneficiaries of the provisions of
Paragraphs 1, 10, 15, 22 and 31. If Lessor fails to pay to Brokers any amounts
due as and for brokerage fees pertaining to this Lease when due, then such
amounts shall accrue interest. In addition, if Lessor fails to pay any amounts
to Lessee's Broker when due, Lessee's Broker may send written notice to Lessor
and Lessee of such failure and if Lessor fails to pay such amounts within 10
days after said notice, Lessee shall pay said monies to its Broker and offset
such amounts against Rent. In addition, Lessee's Broker shall be deemed to be a
third party beneficiary of any commission agreement entered into by and/or
between Lessor and Lessor's Broker for the limited purpose of collecting any
brokerage fee owed.
       15.3 REPRESENTATIONS AND INDEMNITIES OF BROKER RELATIONSHIPS. Lessee and
Lessor each represent and warrant to the other that it has had no dealings with
any person, firm, broker or finder (other than the Brokers, if any) in
connection with this Lease, and that no one other than said named Brokers is
entitled to any commission or finder's fee in connection herewith. Lessee and
Lessor do each hereby agree to indemnify, protect, defend and hold the other
harmless from and against liability for compensation or charges which may be
claimed by any such unnamed broker, finder or other similar party by reason of
any dealings or actions of the indemnifying Party, including any costs,
expenses, attorneys' fees reasonably incurred with respect thereto.

16.     ESTOPPEL CERTIFICATES.
                (a) Each Party (as "RESPONDING PARTY") shall within 10 days
after written notice from the other Party (the "REQUESTING PARTY") execute,
acknowledge and deliver to the Requesting Party a statement in writing in form
similar to the then most current "ESTOPPEL CERTIFICATE" form published by the
American Industrial Real Estate Association, plus such additional information,
confirmation and/or statements as may be reasonably requested by the Requesting
Party.

                (b) If the Responding Party shall fail to execute or deliver the
Estoppel Certificate within such 10 day period, the Requesting Party may execute
an Estoppel Certificate stating that: (i) the Lease is in full force and effect
without modification except as may be represented by the Requesting Party, (ii)
there are no uncured defaults in the Requesting Party's performance, and (iii),
if Lessor is the Requesting Party, not more than one month's rent has been paid
in advance. Prospective purchasers and encumbrances may rely upon the Requesting
Party's Estoppel Certificate, and the Responding Party shall be estopped from
denying the truth of the facts contained in said Certificate.

                (c) If Lessor desires to finance, refinance, or sell the
Premises, or any part thereof, Lessee and all Guarantors shall deliver to any
potential lender or purchaser designated by Lessor such financial statements as
may be reasonably required by such lender or purchaser, including but not
limited to Lessee's financial statements for the past 3 years. All such
financial statements shall be received by Lessor and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.

17.     DEFINITION OF LESSOR.  The term "LESSOR" as used herein shall mean the
owner or owners at the time in question of the fee title to the Premises, or, if
this is a sublease, of the Lessee's interest in the prior lease. In the event of
a transfer of Lessor's title or interest in the Premises or this Lease, Lessor
shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor. Except as provided in Paragraph 15, upon such
transfer or assignment and delivery of the Security Deposit, as aforesaid, the
prior Lessor shall be relieved of all liability with respect to the obligations
and/or covenants under this Lease thereafter to be performed by the Lessor.
Subject to the foregoing, the obligations and/or covenants in this Lease to be
performed by the Lessor shall be binding only upon the Lessor as hereinabove
defined. Notwithstanding the above, and subject to the provisions of Paragraph
20 below, the original Lessor under this Lease, and all subsequent holders of
the Lessor's interest in this Lease shall remain liable and responsible with
regard to the potential duties and liabilities of Lessor pertaining to Hazardous
Substances as outlined in Paragraph 6.2 above.
18.     SEVERABILITY. The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
19.     DAYS. Unless otherwise specifically indicated to the contrary, the word
"days" as used in this Lease shall mean and refer to calendar days.
20.     LIMITATION ON LIABILITY. Subject to the provisions of Paragraph 17
above, the obligations of Lessor under this Lease shall not constitute personal
obligations of Lessor, the individual partners of Lessor or its or their
individual partners, directors, officers or shareholders, and Lessee shall look
to the Premises, and to no other assets of Lessor, for the satisfaction of any
liability of Lessor with respect to this Lease, and shall not seek recourse
against the individual partners of Lessor, or its or their individual partners,
directors, officers or shareholders, or any of their personal assets for such
satisfaction.
21.     TIME OF ESSENCE.  Time is of the essence with respect to the performance
of all obligations to be performed or observed by the Parties under this Lease.
22.     NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each represents and warrants to the Brokers that it has made,
and is relying solely upon, its own investigation as to the nature, quality,
character and financial responsibility of the other Party to this Lease and as
to the use, nature, quality and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach
hereof by either Party. The liability (including court costs and attorneys'
fees), of any Broker with respect to negotiation, execution, delivery or
performance by either Lessor or Lessee under this Lease or any amendment or
modification hereto shall be limited to an amount up to the fee received by such
Broker pursuant to this Lease; provided, however, that the foregoing limitation
on each Broker's liability shall not be applicable to any gross negligence or
willful misconduct of such Broker.
23.     NOTICES.
        23.1 NOTICE REQUIREMENTS. All notices required or permitted by this
Lease or applicable law shall be in writing and may be delivered in person (by
hand or by courier) or may be sent by regular, certified or registered mail or
U.S. Postal Service Express Mail, with postage prepaid, or by facsimile
transmission, and shall be deemed sufficiently given if served in a manner
specified in this Paragraph 23. The addresses noted adjacent to a Party's
signature on this Lease shall be that Party's address for delivery or mailing of
notices. Either Party may by written notice to the other specify a different
address for notice, except that upon Lessee's taking possession of the Premises,
the Premises shall constitute Lessee's address for notice. A copy of all notices
to Lessor shall be concurrently transmitted to such party or parties at such
addresses as Lessor may from time to time hereafter designate in writing.

       23.2 DATE OF NOTICE. Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of delivery shown on
the receipt card, or if no delivery date is shown, the postmark thereon. If sent
by regular mail the notice shall be deemed given 48 hours after the same is
addressed as required herein and mailed with postage prepaid. Notices delivered
by United States Express Mail or overnight courier that guarantee next day
delivery shall be deemed given 24 hours after delivery of the same to the Postal
Service or courier. Notices transmitted by facsimile transmission or similar
means shall be deemed delivered upon telephone confirmation of receipt
(confirmation report from fax machine is sufficient), provided a copy is also
delivered via delivery or mail. If notice is received on a Saturday, Sunday or
legal holiday, it shall be deemed received on the next business day.
24. WAIVERS. No waiver by Lessor of the Default or Breach of any term, covenant
or condition hereof by Lessee, shall be deemed a waiver of any other term,
covenant or condition hereof, or of any subsequent Default or Breach by Lessee
of the same or of any other term, covenant or condition hereof. Lessor's consent
to, or approval of, any act shall not be deemed to render unnecessary the
obtaining of Lessor's consent to, or approval of, any subsequent or similar act
by Lessee, or be construed as the basis of an estoppel to enforce the provision
or provisions of this Lease requiring such consent. The acceptance of Rent by
Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by
Lessee may be accepted by Lessor on account of moneys or damages due Lessor,
notwithstanding any qualifying statements or conditions made by Lessee in
connection therewith, which such statements and/or conditions shall be of no
force or effect whatsoever unless specifically agreed to in writing by Lessor at
or before the time of deposit of such payment.
25.     DISCLOSURES REGARDING THE NATURE OF A REAL ESTATE AGENCY RELATIONSHIP.
        (a)     When entering into a discussion with a real estate agent
regarding a real estate transaction, a Lessor or Lessee should from the outset
understand what type of agency relationship or representation it has with the
agent or agents in the transaction. Lessor and Lessee acknowledge being advised
by the Brokers in this transaction, as follows:
                (i)     LESSOR'S AGENT.  A Lessor's agent under a listing
agreement with the Lessor acts as the agent for the Lessor only. A Lessor's
agent or subagent has the following affirmative obligations: TO THE LESSOR: A
fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with
the Lessor. TO THE LESSEE AND THE LESSOR: (a) Diligent exercise of reasonable
skills and care in performance of the agent's duties. (b) A duty of honest and
fair dealing and good faith. (c) A duty to disclose all facts known to the agent
materially affecting the value or desirability of the property that are not
known to, or within the diligent attention and observation of, the Parties. An
agent is not obligated to reveal to either Party any confidential information
obtained from the other Party which does not involve the affirmative duties set
forth above.
                (ii)    LESSEE'S AGENT.  An agent can agree to act as agent for
the Lessee only. In these situations, the agent is not the Lessor's agent, even
if by agreement the agent may receive compensation for services rendered, either
in full or in part from the Lessor. An agent acting only for a Lessee has the
following affirmative obligations. TO THE LESSEE: A fiduciary duty of utmost
care, integrity, honesty, and loyalty in dealings with the Lessee. TO THE LESSEE
AND THE LESSOR: (a) Diligent exercise of reasonable skills and care in
performance of the agent's duties. (b) A duty of honest and fair dealing and
good faith. (c) A duty to disclose all facts known to the agent materially
affecting the value or desirability of the property that are not known to, or
within the diligent attention and observation of, the Parties. An agent is not
obligated to reveal to either Party any confidential information obtained from
the other

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                                  Page 9 of 13
<PAGE>

Party which does not involve the affirmative duties set forth above.
                (iii)    AGENT REPRESENTING BOTH LESSOR AND LESSEE.  A real
estate agent, either acting directly or through one or more associate licenses,
can legally be the agent of both the Lessor and the Lessee in a transaction, but
only with the knowledge and consent of both the Lessor and the Lessee. In a dual
agency situation, the agent has the following affirmative obligations to both
the Lessor and the Lessee: (a) A fiduciary duty of utmost care, integrity,
honesty and loyalty in the dealings with either Lessor or the Lessee. (b) Other
duties to the Lessor and the Lessee as stated above in subparagraphs (i) or
(ii). In representing both Lessor and Lessee, the agent may not without the
express permission of the respective Party, disclose to the other Party that the
Lessor will accept rent in an amount less than that indicated in the listing or
that the Lessee is willing to pay a higher rent than that offered. The above
duties of the agent in a real estate transaction do not relieve a Lessor or
Lessee from the responsibility to protect their own interests. Lessor and Lessee
should carefully read all agreements to assure that they adequately express
their understanding of the transaction. A real estate agent is a person
qualified to advise about real estate. If legal or tax advice is desired,
consult a competent professional.
        (b) Brokers have no responsibility with respect to any default or breach
hereof by either Party. The liability (including court costs and attorneys'
fees), of any Broker with respect to any breach of duty, error or omission
relating to this Lease shall not exceed the fee received by such Broker pursuant
to this Lease; provided, however, that the foregoing limitation on each Broker's
liability shall not be applicable to any gross negligence or willful misconduct
of such Broker.
        (c)     Buyer and Seller agree to identify to Brokers as "Confidential"
any communication or information given Brokers that is considered by such Party
to be confidential.
26.     NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or termination of this Lease.
In the event that Lessee holds over, then the Base Rent shall be increased to
150% of the Base Rent applicable immediately preceding the expiration or
termination. Nothing contained herein shall be construed as consent by Lessor to
any holding over by Lessee.
27.     CUMULATIVE REMEDIES.  No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28.     COVENANTS AND CONDITIONS; CONSTRUCTION OF AGREEMENT.  All provisions of
this Lease to be observed or performed by Lessee are both covenants and
conditions. In construing this Lease, all headings and titles are for the
convenience of the Parties only and shall not be considered a part of this
Lease. Whenever required by the context, the singular shall include the plural
and vice versa. This Lease shall not be construed as if prepared by one of the
Parties, but rather according to its fair meaning as a whole, as if both Parties
had prepared it.
29.     BINDING EFFECT; CHOICE OF LAW. This Lease shall be binding upon the
parties, their personal representatives, successors and assigns and be governed
by the laws of the State in which the Premises are located. Any litigation
between the Parties hereto concerning this Lease shall be initiated in the
county in which the Premises are located.
30.     SUBORDINATION; ATTORNMENT; NON-DISTURBANCE
        30.1    SUBORDINATION. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security, device (collectively, "SECURITY DEVICE"), now or
hereafter placed upon the Premises, to any and all advances made on the security
thereof, and to all renewals, modifications, and extensions thereof. Lessee
agrees that the holders of any such Security Devices (in this Lease together
referred to as "Lender") shall have no liability or obligation to perform any of
the obligations of Lessor under this Lease. Any Lender may elect to have this
Lease and/or any Option granted hereby superior to the lien of its Security
Device by giving written notice thereof to Lessee, whereupon this Lease and such
Options shall be deemed prior to such Security Device, notwithstanding the
relative dates of the documentation or recordation thereof.
        30.2    ATTORNMENT. In the event that Lessor transfers title to the
Premises, or the Premises are acquired by another upon the foreclosure or
termination of a Security Device to which this Lease is subordinated (i) Lessee
shall, subject to the non-disturbance provisions of Paragraph 30.3, attorn to
such new owner, and upon request, enter into a new lease, containing all of the
terms and provisions of this Lease, with such new owner for the remainder of the
terms hereof, or, at the election of such new owner, and upon request, enter
into a new lease, containing all of the terms and provisions of this Lease, with
such new owner for the remainder of the term hereof, or, at the election of such
new owner, this Lease shall automatically become a new Lease between Lessee and
such new owner, upon all of the terms and conditions hereof, for the remainder
of the term hereof, and (ii) Lessor shall thereafter be relieved of any further
obligations hereunder and such new owner shall assume all of Lessor's
obligations hereunder, except that such new owner shall not: (a) be liable for
any act or omission of any prior lessor or with respect to events occurring
prior to acquisition of ownership; (b) be subject to any offsets or defenses
which Lessee might have against any prior lessor, (c) be bound by prepayment of
more than one month's rent, or (d) be liable for the return of any security
deposit paid to any prior lessor.
        30.3    NON-DISTURBANCE. With respect to any Security Devices entered
into by Lessor after the execution of this Lease, Lessee's subordination of this
Lease shall be subject to receiving a commercially reasonable non-disturbance
agreement (a "Non-Disturbance Agreement") from the Lender which Non-Disturbance
Agreement provides that Lessee's possession of the Premises, and this Lease,
including any options to extend the term hereof, will not be disturbed so long
as Lessee is not in Breach hereof and attorns to the record owner of the
Premises. Further, within 60 days after the execution of this Lease, Lessor
shall use its commercially reasonable efforts to obtain a Non-Disturbance
Agreement from the holder of any pre-existing Security Device which is secured
by the Premises. In the event that Lessor is unable to provide the
Non-Disturbance Agreement within said 60 days, then Lessee may, at Lessee's
option, directly contract Lender and attempt to negotiate for the execution and
delivery of a Non-Disturbance Agreement.
        30.4    SELF-EXECUTING. The agreements contained in this Paragraph 30
shall be effective without the execution of any further documents; provided,
however , that, upon written request from Lessor or a Lender in connection
with a sale, financing or refinancing of the Premises, Lessee and Lessor
shall execute such further writings as may be reasonably required to
separately document any subordination, attornment and/or Non-Disturbance
Agreement provided herein.
31.     ATTORNEY'S FEES. If any Party or Broker brings an action or proceeding
involving the Premises whether founded in tort, contract or equity, or to
declare rights hereunder, the Prevailing Party (as hereafter defined) in any
such proceeding, action, or appeal thereon, shall be entitled to reasonable
attorneys' fees. Such fees may be awarded in the same suit or recovered in a
separate suit, whether or not such action or proceeding is pursued to decision
or judgment. The term, "Prevailing Party" shall include, without limitation, a
Party of Broker who substantially obtains or defeats the relief sought, as the
case may be, whether by compromise, settlement, judgment, or the abandonment by
the other Party or Broker of its claim or defense. The attorneys' fees award
shall not be computed in accordance with any court fee schedule, but shall be
such as to fully reimburse all attorneys' fees reasonably incurred. In addition,
Lessor shall be entitled to attorneys' fees, costs and expenses incurred in the
preparation and service of notices of Default and consultations in connection
therewith, whether or not a legal action is subsequently commenced in connection
with such Default or resulting Breach ($200 is a reasonable minimum per
occurrence for such services and consultation).
32.     LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's agents
shall have the right to enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times for the purpose of showing the
same to prospective purchasers, lenders, or tenants, and making such
alterations, repairs, improvements or additions to the Premises as Lessor may
deem necessary. All such activities shall be without abatement of rent or
liability to Lessee. Lessor may at any time place on the Premises any
ordinary "For Sale" signs and Lessor may during the last 6 months of the term
hereof place on the Premises any ordinary "For Lease" signs. Lessee may at
any time place on the Premises any ordinary "For Sublease" sign.
33.     AUCTIONS.  Lessee shall not conduct, nor permit to be conducted, any
auction upon the Premises without Lessor's prior written consent. Lessor shall
not be obligated to exercise any standard of reasonableness in determining
whether to permit an auction.
34.     SIGNS. Except for ordinary "For Sublease" signs which may be placed only
on the Premises, Lessee shall not place any sign upon the Project without
Lessor's prior written consent. All signs must comply with all Applicable
Requirements.
35.     TERMINATION; MERGER. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, that Lessor may elect to continue any one or all
existing subtenancies. Lessor's failure within 10 days following any such event
to elect to the contrary by written notice to the holder of any such lesser
interest, shall constitute Lessor's election to have such event constitute the
termination of such interest.
36.     CONSENTS. Except as otherwise provided herein, wherever in this
Lease the consent of a Party is required to an act by or for the other Party,
such consent shall not be unreasonably withheld or delayed. Lessor's actual
reasonable costs and expenses (including but not limited to architects',
attorneys', engineers' and other consultants' fees) incurred in the
consideration of, or response to, a request by Lessee for any Lessor consent,
including, but not limited to consents to an assignment, a subletting or the
presence or use of a Hazardous Substance, shall be paid by Lessee upon
receipt of an invoice and supporting documentation therefor. Lessor's consent
to any act, assignment or subletting shall not constitute an acknowledgment
that no Default or Breach by Lessee of this Lease exists, nor shall such
consent be deemed a waiver of any then existing Default or Breach, except as
may be otherwise specifically stated in writing by Lessor at the time of such
consent. The failure to specify herein any particular condition to Lessor's
consent shall not preclude the imposition by Lessor at the time of consent of
such further or other conditions as are then reasonable with reference to the
particular matter for which consent is being given. In the event that either
Party disagrees with any determination made by the other hereunder and
reasonably requests the reasons for such determination, the determining party
shall furnish its reasons in writing and in reasonable detail within 10
business days following such request.
37.     GUARANTOR
        37.1    EXECUTION. The Guarantors, if any, shall each execute a guaranty
in the form most recently published by the American Industrial Real Estate
Association, and each such Guarantor shall have the same obligations as Lessee
under this Lease.
        37.2    DEFAULT. It shall constitute a Default of the Lessee if any
Guarantor falls or refuses, upon request to provide: (a) evidence of the
execution of the guaranty, including the authority of the party signing on
Guarantor's behalf to obligate Guarantor, and in the case of a corporate
guarantor, a certified copy of a resolution of its board of directors
authorizing the making of such guaranty, (b) current financial statements, (c)
an Estoppel Certificate, or (d) written confirmation that the guaranty is still
in effect.
38.     QUIET POSSESSION.  Subject to payment by Lessee of the Rent and
performance of all of the covenants, conditions and provisions on Lessee's part
to be observed and performed under this Lease, Lessee shall have quiet
possession and quiet enjoyment of the Premises during the term hereof.
39.     OPTIONS.  If Lessee is granted an option, as defined below, then the
following provisions shall apply.

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                                  Page 10 of 13
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       39.1    DEFINITION. "Option" shall mean (a) the right to extend the
term of or renew this Lease or to extend or renew any lease that Lessee has
on other property of Lessor; (b) the right of first refusal or first offer to
lease either the Premises or other Property of Lessor; (c) the right to
purchase or the right of first refusal to purchase the Premises or other
property of Lessor.

       39.2    OPTIONS PERSONAL TO ORIGINAL LESSEE. Any Option granted to
Lessee in this Lease is personal to the original Lessee, and cannot be
assigned or exercised by anyone other than said original Lessee and only
while the original Lessee is in full possession of the Premises and, if
requested by Lessor, with Lessee certifying that Lessee has no intention of
thereafter assigning or subletting.

       39.3    MULTIPLE OPTIONS. In the event that Lessee has any multiple
Options to extend or renew this Lease, a later Option cannot be exercised
unless the prior Options have been validly exercised.

       39.4    EFFECT OF DEFAULT ON OPTIONS.

               (a)     Lessee shall have no right to exercise an Option: (i)
during the period commencing with the giving of any notice of Default and
continuing until said Default is cured, (ii) during the period of time any
Rent is unpaid (without regard to whether notice thereof is given Lessee),
(iii) during the time Lessee is in Breach of this Lease, or (iv) in the event
that Lessee has been given 3 or more notices of separate Default, whether
or not the Defaults are cured, during the 12 month period immediately
preceding the exercise of the Option.

               (b)     The period of time within which an Option may be
exercised shall not be extended or enlarged by reason of Lessee's inability
to exercise an Option because of the provisions of Paragraph 39.4(a).

               (c)     An Option shall terminate and be of no further force
or effect, notwithstanding Lessee's due and timely exercise of the Option,
if, after such exercise and prior to the commencement of the extended term,
(i) Lessee fails to pay Rent for a period of 30 days after such Rent becomes
due (without any necessity of Lessor to give notice thereof), (ii) Lessor
gives to Lessee 3 or more notices of separate Default during any 12 month
period, whether or not the Defaults are cured, or (iii) if Lessee commits a
Breach of this Lease.

40.    SECURITY MEASURES. Lessee hereby acknowledges that the Rent payable to
Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide
same. Lessee assumes all responsibility for the protection of the Premises,
Lessee, its agents and invitees and their property from the acts of third
parties.

41.    RESERVATIONS. Lessor reserves the right: (i) to grant, without the
consent or joinder of Lessee, such easements, rights and dedications that
Lessor deems necessary, (ii) to cause the recordation of parcel maps and
restrictions, and (iii) to create and/or install new utility raceways, so
long as such easements, rights, dedications, maps, restrictions, and utility
raceways do not unreasonably interfere with the use of the Premises by
Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to
effectuate such rights.

42.    PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to
any amount or sum of money to be paid by one Party to the other under the
provisions hereof, the Party against whom the obligation to pay the money is
asserted shall have the right to make payment "under protest" and such
payment shall not be regarded as a voluntary payment and there shall survive
the right on the part of said Party to institute suit for recovery of such
sum. If it shall be adjudged that there was no legal obligation on the part
of said Party to pay such sum or any part thereof, said Party shall be
entitled to recover such sum or so much thereof as it was not legally
required to pay.

43.    AUTHORITY. If either Party hereto is a corporation, trust, limited
liability company, partnership, or similar entity, each individual executing
this Lease on behalf of such entity represents and warrants that he or she is
duly authorized to execute and deliver this Lease on its behalf. Each party
shall, within 30 days after request, deliver to the other party satisfactory
evidence of such authority.

44.    CONFLICT. Any conflict between the printed provisions of this Lease
and the typewritten or handwritten provisions shall be controlled by the
typewritten or handwritten provisions.

45.    OFFER. Preparation of this Lease by either party or their agent and
submission of same to the other Party shall not be deemed an offer to lease
to the other Party.  This Lease is not intended to be binding until executed
and delivered by all Parties hereto.

46.    AMENDMENTS. This Lease may be modified only in writing, signed by the
Parties in interest at the time of the modification. As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by a Lender in connection with the obtaining of normal financing or
refinancing of the Premises.

47.    MULTIPLE PARTIES. If more than one person or entity is named herein as
either Lessor or Lessee, such multiple Parties shall have joint and several
responsibility to comply with the terms of this Lease.

48.    WAIVER OF JURY TRIAL. The Parties hereby waive their respective rights
to trial by jury in any action or proceeding involving the Property or
arising out of this Agreement.

49.    MEDIATION AND ARBITRATION OF DISPUTES. An Addendum requiring the
Mediation and/or the Arbitration of all disputes between the Parties and/or
Brokers arising out of this Lease [ ] is [X] is not attached to this Lease.

50.    DOCUMENT DISCLOSURES. Lessor herein provides to lessee the following
specific documents for Lessee's review and approval. Lessee agrees to comply
with any and all requirements of these documents which may either apply to
lessee during occupancy or can reasonably be controlled by Lessee. Any of the
documents or disclosures which are not within Lessee's control shall be
reviewed by Lessee and if deemed necessary or appropriate by Lessee, shall be
communicated to any and all employee's that Lessee shall deem necessary.
DOCUMENTS INCLUDED FOR REVIEW THAT APPLY TO THIS PROPERTY:

               A. NONE

51.    NO BROKER DISCLOSURE/NO AGENCY RELATIONSHIP (JOSEPH E. DELUCIA).
Lessee understands that Joseph E. DeLucia is a licensed California Real
Estate Broker and has not represented that he maintains an agency or
fiduciary relationship with Lessee. DELUCIA has coordinated and facilitated
this lease transaction due to the fact that he has an unrecorded vested
interest in this property and for all practical purposes is deemed to be
acting as a principal herein. Lessee and DELUCIA has attempted to resolve
the major financial and technical aspects of this lease transaction and
Lessee herein assures DELUCIA that prior to execution of this lease, Lessee
shall cause to have this lease reviewed and approved by Lessee's legal
counsel. Lessee is herein advised that although DELUCIA will not be receiving
direct compensation as a result of this lease transaction, DELUCIA will
receive indirect compensation as a result of this transaction in the form of
development fees, management fees, and/or equitable interests in the property.

52.    TENANT IMPROVEMENT ALLOWANCE: Lessor herein agrees to provide a tenant
improvement allowance in the amount of $44,500 to be used for improvements to
the building for tenants office build out above and beyond the building shell
improvements, these improvements shall be completed in substantial
conformance with the floor plans prepared by a mutually acceptable Architect
and attached hereto as Exhibit "A". Lessee understands that Lessor's
contractor has not provided any preliminary estimates based on any floor
plans and that specific improvements relating to tenants requirements often
greatly exceeds that allowance and that the actual costs for said
improvements will not be determined until plans and specifications have been
prepared and approved by the City of Arroyo Grande. The actual determination
of costs will not occur until substantially after Lessee has legally
obligated Lessee to the terms and conditions of this lease. Lessee shall be
obligated to any and all costs in excess of the $44,300 allowance provided by
lessor. Lessee shall demonstrate to lessor that lessee has readily accessible
funds to pay an amount in excess of $44,300 which is currently the allowance.
The costs associated with the tenant improvements shall include but not be
limited to the following items:

                a. Architectural, engineering, design of said plans and
specifications.

                b. Permits, fees, or any costs associated with procuring a
building permit and associated inspections for the progress of said
improvements.

                c. Construction supervision or administration costs as may be
charged by a general contractor or architect (or as mutually agreed between
the parties).

                d. All costs for labor, material, and subcontractors to
complete the tenant improvements pursuant to the plans that will be prepared
by the Architect and approved by the City of Arroyo Grande.

       Lessor shall be obligated for completion of the "Building Shell" as
determined by the plans that are currently permitted and approved for the
building currently known as Arroyo Grande Village Centre, (Plans prepared by
Pulte and Associates). These shell improvements shall include but not be
limited to the following components:


INITIALS [ILLEGIBLE]                                 INITIALS [ILLEGIBLE]

                                Page 11 of 13

<PAGE>

               1. Electrical Service and main switch gear to the building.
Tenant understands that Lessor intends to provide a 200 amp service to the
building. Lessor shall be responsible for providing the service and panels to
the electric room as per the existing plans. Any distribution from said
electrical room to accommodate tenant improvements or tenants Office
operations shall be deemed as Tenant Improvements.

               2. Mechanical platforms and roof cuts to accommodated HVAC
package units and associated utility hook ups. The actual package unit to be
installed on the roof is part of the building shell, however, all registers,
thermostats, engineering, ducting, and other requirements below the roof are
part of the tenant improvements.

               3. Fire Sprinkler risers and distribution of main lines to
accommodate a shell building. Any additional distribution that may be
required as per the tenant improvement plans shall be deemed as tenant
improvements, including but not limited to any special requirements for
monitoring or alarm systems.

               4. Plumbing and fixtures to accommodate one (1) handicap
accessible bathroom. All other plumbing as required for completion of the
tenant improvement plan including but not limited to labor, materials,
supervision shall be deemed as Tenant improvements.

       Lessor shall provide the first sums of money to complete said tenant
improvements in the amount of $44,300. Lessee shall provide the next
additional amount above the $44,300.

       NOTE: NO COSTS ASSOCIATED WITH TENANTS REQUIREMENTS FOR
TELECOMMUNICATIONS AND BANK VAULT/SAFE PROTECTION OR INSTALLATION SHALL BE
CHARGED OFF TOWARDS THE TENANT IMPROVEMENT COSTS. THESE COSTS SHALL BE PAID
FOR BY TENANT OUTSIDE THE TENANT IMPROVEMENT ALLOWANCE.

53. EARLY TERMINATION PROVISION. During the initial term of this lease (not
options) and provided Lessee is not then in default, Lessee shall have a
right to early termination of this lease by providing Lessor notice via
certified mail no less than 180 Days prior lessee's intent to cancel.
Included with said notice shall be an early termination fee equivalent to the
unamortized amount of the remainder of months during the initial term that
Lessee will have terminated said lease, using an amortization period of Five
Years and an interest rate of 12% based on the Lessor's allowance of $44,300
which is herein deemed a fair charge for lessor's unamortized tenant
improvements. Therefore, for establishment of a formula, Lessee shall pay the
amount of $985.42 per month for the remainder of the terminated lease during
the initial term times the amount of months remaining in the initial term of
the lease. Lessee shall continue to occupy and pay rent for the premises
through the remainder of the 180 days notification period required in this
provision.

54. ATM RIGHTS. As consideration for lessee to enter into this lease, Lessor
hereby grants to lessee the exclusive rights to have and maintain an ATM
machine within the complex as defined in Exhibit "A" and approved by the City
of Arroyo Grande. This agreement will provide for a sharing of fees
generated from the ATM machine as per mutual agreement between Lessor and
Lessee. There will be no fixed rent charge for the ATM Machine rental. Lessee
shall be responsible for all costs associated with installation and
improvement of said ATM area. Provided however, in the event Lessee
desires, Lessor will agree to advance 50% of said costs of said ATM Machine
up to a maximum amount of $15,000 with the provision that Lessee shall agree
to pay as additional rent the amount of $39.33 per month for each additional
$1,000 contribution by Lessor up to the maximum amount of $15,000. Lessee
agrees to promptly execute an amendment to said lease specifying the revised
rental amount upon determination of the final funds requested from Lessor for
said ATM contribution.

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM
AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY
REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH
RESPECT TO THE PREMISES.
ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY,
LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH
IT RELATES. THE PARTIES ARE URGED TO:
1.     SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
LEASE.
2.     RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION
OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE
POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE
STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS,
COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF
THE PREMISES FOR LESSEE'S INTENDED USE.
WARNING: IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA,
CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE
LAWS OF THE STATE IN WHICH THE PREMISES ARE LOCATED.

The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures.

<TABLE>
<S>                                                    <C>
Executed at: San Luis Obispo                           Executed at: San Luis Obispo
           --------------------------------------                  -------------------------------------
on: 9/15/00                                            on: 9/15/00
   ----------------------------------------------         ----------------------------------------------


By LESSOR:                                             By LESSEE:
Joseph E. DeLucia                                      Mission Community Bank
-------------------------------------------------      -------------------------------------------------
/s/ Joseph E. DeLucia
-------------------------------------------------      -------------------------------------------------


By: Joseph E. DeLucia                                  By: Anita Robinson /s/ Anita Robinson
   ----------------------------------------------         ----------------------------------------------
Name Printed: Joseph E. DeLucia                        Name Printed: Mission Community Bank
            -------------------------------------                  -------------------------------------
Title: Owner                                           Title: President
      -------------------------------------------            -------------------------------------------

By:                                                    By:
   ----------------------------------------------         ----------------------------------------------
Name Printed:                                          Name Printed:
            -------------------------------------                  -------------------------------------
Title:                                                 Title:
      -------------------------------------------            -------------------------------------------
Address: Joseph E. DeLucia c/o Pandel                  Address: Mission Community Bank
        -----------------------------------------              -----------------------------------------
</TABLE>

INITIALS [ILLEGIBLE]                                 INITIALS [ILLEGIBLE]

                                Page 12 of 13

<PAGE>


<TABLE>
<S>                                                    <C>
Box 1286                                               591 Higuera Street
-------------------------------------------------      -------------------------------------------------
San Luis Obispo, CA 93406                              San Luis Obispo, CA 93401
-------------------------------------------------      -------------------------------------------------

Telephone: (805 ) 782-9844                             Telephone: (805 ) 782-5000
                  -------------------------------                        -------------------------------
Facsimile: (    )                                      Facsimile: (    )
                  -------------------------------                        -------------------------------
Federal ID No.                                         Federal ID No.
               ----------------------------------                      ---------------------------------
</TABLE>

THESE FORMS ARE OFTEN MODIFIED TO MEET CHANGING REQUIREMENTS OF LAW AND NEEDS
OF THE INDUSTRY. ALWAYS WRITE OR CALL TO MAKE SURE YOU ARE UTILIZING THE MOST
CURRENT FORM: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 700 SOUTH FLOWER
STREET, SUITE 600, LOS ANGELES, CA 90017. (213) 687-8777


        -C-COPYRIGHT 1999 BY AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION.
                              ALL RIGHTS RESERVED.
           NO PART OF THESE WORKS MAY BE REPRODUCED IN ANY FORM WITHOUT
                             PERMISSION IN  WRITING.




INITIALS [ILLEGIBLE]                                 INITIALS [ILLEGIBLE]

                                Page 13 of 13

<PAGE>

                                EXHIBIT "A"





                      [VILLAGE CENTRE -- PLOT PLAN MAP]

<PAGE>

                       [RENT ADJUSTMENT(S) LOGO]
                        STANDARD LEASE ADDENDUM
                               EXHIBIT "B"

    Dated September 8, 2000
          -------------------------------------------------------

    By and Between (Lessor) Joseph E. DeLucia
                           --------------------------------------
                           --------------------------------------

                   (Lessee) Mission Community Bank
                           --------------------------------------
                           --------------------------------------

       Address of Premises: 154 W. Branch St., Arroyo Grande, CA
                           --------------------------------------
                           --------------------------------------


Paragraph 55
          -----

A.  RENT ADJUSTMENTS:
    The monthly rent for each month of the adjustment period(s) specified
below shall be increased using the method(s) indicated below:

(Check Method(s) to be Used and Fill in Appropriately)

/x/ I.  Cost of Living Adjustment(s) (COLA)

        a. On (Fill in COLA Dates): November 1, 2001, 2002, 2003, 2004
                                    ------------------------------------------
------------------------------------------------------------------------------
the Base Rent shall be adjusted by the change, if any, from the Base Month
specified below, in the Consumer Price Index of the Bureau of Labor
Statistics of the U.S. Department of Labor for (select one): / / CPI W (Urban
Wage Earners and Clerical Workers) or /X/ CPI U (All Urban Consumers), for
(Fill in Urban Area): Los Angeles
                      --------------------------------------------------------
All Items (1982-1984 = 100), herein referred to as "CPI".

        b. The monthly rent payable in accordance with paragraph A.l.a of
this Addendum shall be calculated as follows: the Base Rent set forth in
paragraph 1.5 of the attached Lease, shall be multiplied by a fraction the
numerator of which shall be the CPI of the calendar month two months prior to
the month(s) specified in paragraph A.l.a. above during which the adjustment
is to take effect, and the denominator of which shall be the CPI of the
calendar month which is two months prior to (select one): / / the first
months of the term of this Lease as set forth in paragraph 1.3 ("Base Month")
or /X/ (Fill in Other "Base Month"): November 2000. The sum so calculated
                                     -------------
shall constitute the new monthly rent hereunder, but in no event, shall any
such new monthly rent be less than the rent payable for the month immediately
preceding the rent adjustment.

        c. In the event the compilation and/or publication of the CPI shall
be transferred to any other governmental department or bureau or agency or
shall be discontinued, then the index most nearly the same as the CPI shall
be used to make such calculation. In the event that the Parties cannot agree
on such alternative index, then the matter shall be submitted for decision to
the American Arbitration Association in accordance with the then rules of
said Association and the decision of the arbitrators shall be binding upon
the parties. The cost of said Arbitration shall be paid equally by the
Parties.

/ / II. MARKET RENTAL VALUE ADJUSTMENT(S) (MRV)
        a. On (Fill in MRV Adjustment Date(s):
                                               -------------------------------
------------------------------------------------------------------------------
the Base Rent shall be adjusted to the "Market Rental Value" of the property
as follows:

             1. Four months prior to each Market Rental Value Adjustment Date
described above, the Parties shall attempt to agree upon what the new MRV
will be on the adjustment date. If agreement cannot be reached within thirty
days, then:

                (a) Lessor and Lessee shall immediately appoint a mutually
acceptable appraiser or broker to establish the new MRV within the next
thirty days. Any associated costs will be split equally between the Parties ,
or

                (b) Both Lessor and Lessee shall each immediately make a
reasonable determination of the MRV and submit such determination, in
writing, to arbitration in accordance with the following provisions:

                     (i) Within fifteen days thereafter, Lessor and Lessee
shall each select and / / appraiser or / / broker ("CONSULTANT" - check one )
of their choice to act as an arbitrator. The two arbitrators so appointed
shall immediately select a third mutually acceptable Consultant to act as a
third arbitrator.

                     (ii) The Three arbitrators shall within thirty days of
the appointment of the third arbitrator reach a decision as to what the
actual MRV for the Premises is, and whether Lessor's or Lessee's submitted
MRV is the closest thereto. The decision of a majority of the arbitrators
shall be binding on the Parties. The submitted MRV which is determined to be
the closest to the actual MRV shall thereafter be used by the Parties.

                     (iii) If either of the Parties fails to appoint an
arbitrator within the specified fifteen days, the arbitrator timely appointed
by one of them shall reach a decision on his or her own, and said decision
shall be binding on the Parties.

                     (iv) The entire cost of such arbitration shall be paid
by the party whose submitted MRV is not selected, ie. the one that is NOT the
closet to the actual MRV.

             2. Notwithstanding the foregoing, the new MRV shall not be less
than the rent payable for the month immediately preceding the rent adjustment.

        b. Upon the establishment of each New Market Rental Value:
             1) the new MRV will become the new "Base Rent" for the purpose of
                calculating any further Adjustments, and
             2) the first month of each Market Rental Value term shall become
                the new "Base Month" for the purpose of calculating any further
                Adjustments.


Initials: [illegible]                                   Initials: [illegible]


                                   RENT ADJUSTMENTS
                                     Page 1 of 2
<PAGE>

/ / III. Fixed Rental Adjustment(s) (FRA)

The Base Rent shall be increased to the following amounts on the dates set
forth below:

    On (Fill in FRA Adjustment Date(s)):    The New Base Rent shall be:

                                           $
     --------------------------------       --------------------------

                                           $
     --------------------------------       --------------------------

                                           $
     --------------------------------       --------------------------

                                           $
     --------------------------------       --------------------------

B.  NOTICE:

   Unless specified otherwise herein, notice of any such adjustments, other
than Fixed Rental Adjustments, shall be made as specified in paragraph 23 of
the Lease.

C.  BROKER'S FEE:

    The Brokers specified in paragraph 1.10 shall be paid a Brokerage Fee for
each adjustment specified above in accordance with paragraph 15 of the Lease.






Initials: [illegible]                                   Initials: [illegible]


                                   RENT ADJUSTMENTS
                                     Page 2 of 2
<PAGE>


                       [OPTION(S) TO EXTEND LOGO]
                        STANDARD LEASE ADDENDUM
                               EXHIBIT "C"

    Dated September 8, 2000
          -------------------------------------------------------

    By and Between (Lessor) Joseph E. DeLucia
                           --------------------------------------
                           --------------------------------------

                   (Lessee) Mission Community Bank
                           --------------------------------------
                           --------------------------------------

       Address of Premises: 154 W. Branch St., Arroyo Grande, CA
                           --------------------------------------
                           --------------------------------------


Paragraph 56
          -----

A.  OPTION(S) TO EXTEND:
Lessor hereby grants to Lessee the option to extend the term of this Lease for
Two (2) additional Sixty (60) month period(s) commencing when the prior term
expires upon each and all of the following terms and conditions:

        (i) In order to exercise an option to extend, Lessee must give
written notice of such election to Lessor and Lessor must receive the same at
least 6 but not more than 9 months prior to the date that the option period
would commence, time being of the essence. If proper notification of the
exercise of an option is not given and/or received, such option shall
automatically expire. Options (if there are more than one) may only be
exercised consecutively.

         (ii) The provisions of paragraph 39, including those relating to
Lessee's Default set forth in paragraph 39.4 of this Lease, are conditions of
this Option.

         (iii) Except for the provisions of this Lease granting an option or
options to extend the term, all of the terms and conditions of this Lease
except where specifically modified by this option shall apply.

         (iv) This Option is personal to the original Lessee, and cannot be
assigned or exercised by anyone other than said original Lessee and only
while the original Lessee is in full possession of the Premises and without
the intention of thereafter assigning or subletting.

         (v) The monthly rent for each month of the option period shall be
calculated as follows, using the method(s) indicated below:
(Check Method(s) to be Used and Fill in Appropriately)

/X/ I. COST OF LIVING ADJUSTMENT(S) (COLA)
    a. On (Fill in COLA Dates:) For first option period - November 1,
                                ----------------------------------------------
2005, 2006, 2007, 2008, 2009 / For second option period November 1, 2010,
------------------------------------------------------------------------------
2011, 2012, 2013, 2014
------------------------------------------------------------------------------
the Base Rent shall be adjusted by the change, if any, from the Base Month
specified below, in the Consumer Price Index of the Bureau of Labor
Statistics of the U.S. Department of Labor for (select one): / / CPI W (Urban
Wage Earners and Clerical Workers) or /X/ CPI U (All Urban Consumers), for
(Fill in Urban Area):
Los Angeles
------------------------------------------------------------------------------
All items (1982-1984 = 100), herein referred to as "CPI",

     b. The monthly rent payable in accordance with paragraph A.l.a. of this
Addendum shall be calculated as follows: the Base Rent set forth in paragraph
1.5 of the attached Lease, shall be multiplied by a fraction the numerator of
which shall be the CPI of the calendar month two months prior to the month(s)
specified in paragraph A.l.a. above during which the adjustment is to take
effect, and the denominator of which shall be the CPI of the calendar month
which is two months prior to (select one): / / the first month of the term of
this Lease as set forth in paragraph 1.3 ("Base Month") or / / (Fill in
Other "Base Month"): November 2004. The sum so calculated shall constitute
                     -------------
the new monthly rent hereunder, but in no event, shall any such new monthly
rent be less than the rent payable for the month immediately preceding the
rent adjustment.

      c. In the event the compilation and/or publication of the CPI shall be
transferred to any other governmental department or bureau or agency or shall
be discontinued, then the index most nearly the same as the CPI shall be used
to make such calculation. In the event that the Parties cannot agree on such
alternative index,  then the matter shall be submitted for decision to the
American Arbitration Association in accordance with the then rules of said
Association and the decision of the arbitrators shall be binding upon the
parties. The cost of said Arbitration shall be paid equally by the Parties.

/ / II. MARKET RENTAL VALUE ADJUSTMENT(S) (MRV)
     a. On (Fill in MRV Adjustment Date(s))
                                           ----------------------------------
-----------------------------------------------------------------------------
the Base Rent shall be adjusted to the "Market Rental Value" of the property
as follows:

        1) Four months prior to each Market Rental Value Adjustment Date
described above, the Parties shall attempt to agree upon what the new MRV
will be on the adjustment date. If agreement cannot be reached, within thirty
days, then:

           (a) Lessor and Lessee shall immediately appoint a mutually
acceptable appraiser or broker to establish the new MRV within the next
thirty days. Any associated costs will be split equally between the Parties,
or

           (b)  Both Lessor and Lessee shall each immediately make a
reasonable determination of the MRV and submit such determination, in
writing, to arbitration in accordance with the following provisions:


Initials: [illegible]                                   Initials: [illegible]


                                     Page 1 of 2

                                       REVISED
<PAGE>

         (i) Within fifteen days thereof Lessor and Lessee shall each select
an / / appraiser / / broker ("CONSULTANT" - check one) of their choice to act
as an arbitrator. The two arbitrators so appointed shall immediately select a
third mutually acceptable Consultant to act as a third arbitrator.

         (ii) The three arbitrators shall within thirty days of the
appointment of the third arbitrator reach a decision as to what the actual
MRV for the Premises is, and whether Lessors's or Lessee's submitted MRV is
the closest thereto. The decision of a majority of the arbitrators shall be
binding on the Parties. The submitted MRV which is determined to be the
closest to the actual MRV shall thereafter be used by the Parties.

         (iii) If either of the Parties fails to appoint an arbitrator within
the specified fifteen days, the arbitrator timely appointed by one of them
shall reach a decision on his or her own, and said decision shall be binding
on the Parties.

         (iv) The entire cost of such arbitration shall be paid by the party
whose submitted MRV is not selected, ie. the one that is NOT the closest to
the actual MRV.

      2) Notwithstanding the foregoing, the new MRV shall not be less than
the rent payable for the month immediately preceding the rent adjustment.

   b. Upon the establishment of each New Market Rental Value.

      1) the new MRV will become the new "Base Rent" for the purpose of
         calculating any further Adjustments, and
      2) the first month of each Market Rental Value term shall become the
         new "Base Month" for the purpose of calculating any further
         Adjustments.

/ / III. FIXED RENTAL ADJUSTMENT(S) (FRA)
The Base Rent shall be increased to the following amounts on the dates set
forth below:


    On (Fill in FRA Adjustment Date(s)):    The New Base Rent shall be:

                                           $
     --------------------------------       --------------------------

                                           $
     --------------------------------       --------------------------

                                           $
     --------------------------------       --------------------------

                                           $
     --------------------------------       --------------------------


B.  NOTICE:

    Unless specified otherwise herein, notice of any rental adjustments,
other than Fixed Rental Adjustments, shall be made as specified in paragraph
23 of the Lease.

C.  BROKER'S FEE:

    The Brokers specified in paragraph 1.10 shall be paid a Brokerage Fee for
each adjustment specified above in accordance with paragraph 15 of the Lease.







Initials: [illegible]                                   Initials: [illegible]


                                     Page 2 of 2

                                       REVISED

<PAGE>

                                      EXHIBIT "D"

                            SUMMARY OF COMMON AREA EXPENSES
                              ARROYO GRANDE VILLAGE CENTRE

                                 MISSION COMMUNITY BANK

                                          DATE
                                    September 8, 2000


Pursuant to Paragraph 4.2 of the Standard Industrial/Commercial Multi-Tenant
Lease-Net, below is the initial ESTIMATED costs to be reimbursed to Lessor by
Lessee.


Property Taxes        $41,241
Property Insurance    $ 7,086
Reserves/Replacement  $ 8,173
Property Management   $13,109
Repair/Maintenance    $20,000
Utilities             $12,000



            TOTAL     $101,609  Annually

                      $  8,467  Monthly

                      $   .298  Cents per/sq. foot-per Month


Your percentage share of the monthly estimated costs:       6.33%

Your monthly share of the monthly estimated costs:         $531.60 MONTH


/s/ [illegible]
----------------------------
Mission Community Bank


/s/ Joseph E. DeLucia
--------------------------------
Joseph E. DeLucia


<PAGE>

                              [VILLAGE CENTRE PLOT PLAN]