**Exhibit 10.9**

**LEGACYSABRE SPRINGS**

**OFFICELEASE**

**LEGACY SABRE SPRINGS, LLC,a California limited liability company,**

**as Landlord,**

**and**

**1**st PACIFIC BANK OF CALIFORNIA,a California corporation,

**as Tenant**

 

----

**TABLE OFCONTENTS**
|                                    | ** ** | ** **                                         | ** ** | **Page**   |
|------------------------------------|------------|----------------------------------------------------|------------|------------|
|                               |       |                                               |       |       |
| SUMMARY OF BASIC LEASE INFORMATION |       | iv                                                 |
|                               |       |                                               |
| **OFFICE LEASE**                   | ** ** | ** **                                         |
| ** **                         | ** ** | ** **                                         | ** ** | ** ** |
| ARTICLE 1                          |       | REAL PROPERTY, BUILDING AND PREMISES               |       | 1          |
| ARTICLE 2                          |       | LEASE TERM                                         |       | 2          |
| ARTICLE 3                          |       | BASE RENT                                          |       | 3          |
| ARTICLE 4                          |       | ADDITIONAL RENT                                    |       | 3          |
| ARTICLE 5                          |       | USE OF PREMISES                                    |       | 7          |
| ARTICLE 6                          |       | SERVICES AND UTILITIES                             |       | 8          |
| ARTICLE 7                          |       | REPAIRS                                            |       | 10         |
| ARTICLE 8                          |       | ADDITIONS AND ALTERATIONS                          |       | 10         |
| ARTICLE 9                          |       | COVENANT AGAINST LIENS                             |       | 11         |
| ARTICLE 10                         |       | INDEMNIFICATION AND INSURANCE                      |       | 11         |
| ARTICLE 11                         |       | DAMAGE AND DESTRUCTION                             |       | 13         |
| ARTICLE 12                         |       | CONDEMNATION                                       |       | 13         |
| ARTICLE 13                         |       | COVENANT OF QUIET ENJOYMENT                        |       | 14         |
| ARTICLE 14                         |       | ASSIGNMENT AND SUBLETTING                          |       | 14         |
| ARTICLE 15                         |       | SURRENDER; OWNERSHIP AND REMOVAL OF TRADE FIXTURES |       | 16         |
| ARTICLE 16                         |       | HOLDING OVER                                       |       | 16         |
| ARTICLE 17                         |       | ESTOPPEL CERTIFICATES                              |       | 17         |
| ARTICLE 18                         |       | SUBORDINATION                                      |       | 17         |
| ARTICLE 19                         |       | TENANT’S DEFAULTS; LANDLORD’S REMEDIES   |       | 18         |
| ARTICLE 20                         |       | SECURITY DEPOSIT                                   |       | 19         |
| ARTICLE 21                         |       | COMPLIANCE WITH LAW                                |       | 19         |
| ARTICLE 22                         |       | ENTRY BY LANDLORD                                  |       | 20         |
| ARTICLE 23                         |       | TENANT PARKING                                     |       | 20         |
| ARTICLE 24                         |       | MISCELLANEOUS PROVISIONS                           |       | 21         |
|                                    |            |                                                    |            |            |  |  |

**EXHIBITS**
| A   |   | OUTLINE OF PREMISES                                      |
|-----|--------|----------------------------------------------------------|
| A-1 |   | CONCEPTUAL SITE PLAN OF REAL PROPERTY                    |
| B   |   | TENANT WORK LETTER                                       |
| C   |   | AMENDMENT TO LEASE                                       |
| D   |   | RULES AND REGULATIONS                                    |
| E   |   | SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT  AGREEMENT |
| F   |   | PROJECT SIGN CRITERIA                                    |
| G   |   | VISITOR PARKING LOCATION                                 |

 

EXTENSION OPTION RIDER

i

----

**INDEX**
|                                 | ** ** | **Pages**               |
|---------------------------------|------------|-------------------------|
|                            |       |                    |
| Additional Rent                 |       | 3                       |
| Adjacent Building               |       | 1                       |
| Affiliates                      |       | 16                      |
| Alterations                     |       | 10                      |
| Approved Working Drawings       | * *   | *Exhibit  B*            |
| Architect                       | * *   | *Exhibit  B. Exhibit B* |
| ATM                             |       | 8                       |
| ATM Facility                    |       | 8                       |
| Base Rent                       |       | 3                       |
| Base, Shell and Core            | * *   | *Exhibit  B*            |
| BOMA                            |       | 2                       |
| Brokers                         |       | 23                      |
| Building II                     |       | 1                       |
| Buildings                       |       | 1                       |
| Calendar Year                   |       | 3                       |
| Claims                          |       | 11                      |
| Construction                    |       | 24                      |
| Construction Drawings           | * *   | *Exhibit  B. Exhibit B* |
| Contractor                      | * *   | *Exhibit  B*            |
| Cost Pools                      |       | 4                       |
| Cost Proposal                   | * *   | *Exhibit  B*            |
| Current Lender                  |       | 17                      |
| Effective Date                  |       | 2                       |
| Eligibility Period              |       | 9                       |
| Engineers                       | * *   | *Exhibit  B. Exhibit B* |
| Estimate                        |       | 6                       |
| Estimate Statement              |       | 6                       |
| Estimated Excess                |       | 6                       |
| Excess                          |       | 6                       |
| Excluded Claims                 |       | 11                      |
| Expense Base Year               |       | 3                       |
| Expense Year                    |       | 4                       |
| Extension Rider                 | * *   | *Rider*                 |
| Fair Market Rental Rate         |       | 1                       |
| Final Space Plan                | * *   | *Exhibit  B*            |
| Final Working Drawings          | * *   | *Exhibit  B*            |
| Force Majeure                   |       | 23                      |
| Hazardous Material              |       | 8                       |
| Holidays                        |       | 8                       |
| Interest Rate                   |       | 7                       |
| Landlord                        |       | 1                       |
| Landlord Parties                |       | 11                      |
| Landlord Supervision Fee        | * *   | *Exhibit  B*            |
| Lease                           |       | 1                       |
| Lease Commencement Date         |       | 2                       |
| Lease Expiration Date           |       | 2                       |
| Lease Term                      |       | 2                       |
| Lease Year                      |       | 2                       |
| Monument Sign                   |       | 22                      |
| Notices                         |       | 23                      |
| Operating Expenses              |       | 4                       |
| Option Rent                     |       | 1                       |
| Option Term                     |       | 1                       |
| Original Tenant                 |       | 17                      |
| Other Buildings                 |       | 7                       |
| Outside Date                    |       | 2                       |
| Outside Date Termination Notice |       | 2                       |
| Over-Allowance Amount           | * *   | *Exhibit  B*            |
| Over-Allowance Cap              | * *   | *Exhibit  B*            |
| Parking Facilities              |       | 1                       |
| Partial Cost Proposal           | * *   | *Exhibit  B*            |
| Permits                         | * *   | *Exhibit  B*            |
| Premises                        |       | 1                       |
| Project                         |       | 1                       |
| Proposition 13                  |       | 5                       |
| Real Property                   |       | 1                       |
| Rent                            |       | 3                       |
| rentable square feet            |       | 2                       |
| Security Deposit                |       | 19                      |
| Specifications                  | * *   | *Exhibit  B*            |
| Statement                       |       | 6                       |
| Subject Space                   |       | 14                      |
| Subleasing Costs                |       | 15                      |

i

----

 
|                                    | ** ** | **Pages**    |
|------------------------------------|------------|--------------|
|                               |       |         |
| Summary                            |       | iii          |
| Systems and Equipment              |       | 5            |
| Tax Expense Base Year              |       | 5            |
| Tax Expenses                       |       | 5            |
| Temporary Extension Term           |       | 16           |
| Tenant                             |       | 1            |
| Tenant Delays                      | * *   | *Exhibit  B* |
| Tenant Improvement Allowance       | * *   | *Exhibit  B* |
| Tenant Improvement Allowance Items | * *   | *Exhibit  B* |
| Tenant Improvements                | * *   | *Exhibit  B* |
| Tenant Parties                     |       | 11           |
| Tenant Work Letter                 | * *   | *Exhibit  B* |
| Tenant’s Name Sign            |       | 22           |
| Tenant’s Share                |       | 5            |
| Time Deadlines                     | * *   | *Exhibit  B* |
| Transfer Notice                    |       | 14           |
| Transfer Premium                   |       | 15           |
| Transfers                          |       | 14           |
| usable square feet                 |       | 2            |
| Utilities Base Year                |       | 6            |
| Utilities Costs                    |       | 6            |

 

ii

----

**SUMMARYOF BASIC LEASE INFORMATION**

This Summary of BasicLease Information (“**Summary**”) ishereby incorporated into and made a part of the attached Office Lease. Eachreference in the Office Lease to any term of this Summary shall have themeaning as set forth in this Summary for such term. In the event of a conflictbetween the terms of this Summary and the Office Lease, the terms of the OfficeLease shall prevail. Any capitalized terms used herein and not otherwisedefined herein shall have the meaning as set forth in the Office Lease.
| **TERMS OF LEASE**  (References are to the Office Lease) | ** ** | **DESCRIPTION**                      |
|----------------------------------------------------------|------------|--------------------------------------|
|                                                     |       |                                 |
| 1.                                                       |       | Date:                                |   | September 30, 2004 |
|                                                     |       |                                 |   |   |
| 2.                                                       |       | Landlord:                            |   | LEGACY SABRE SPRINGS, LLC,  a California limited liability company |
|                                                     |       |                                 |   |   |
| 3.                                                       |       | Address of Landlord (Section 24.19): |   | Legacy Sabre Springs, LLC  c/o Legacy Partners Commercial, Inc.  30 Executive Park, Suite 100  Irvine, California 92614  Attention: Regional Vice President, Operations |
|                                                     |       |                                 |   |   |
| 4.                                                       |       | Tenant:                              |   | 1ST PACIFIC  BANK OF CALIFORNIA,  a California corporation |
|                                                     |       |                                 |   |   |
| 5.                                                       |       | Address of Tenant (Section 24.19):   |   | 1ST Pacific  Bank of California  7728 Regents Road, Suite 503  San Diego, California 92122  Attention: A. Vincent Siciliano  (Prior to Lease Commencement Date) |
|                                                     |       |                                 |   |   |
|                                                     |       |                                 |   | and |
|                                                     |       |                                 |   |   |
|                                                     |       |                                 |   | 1ST Pacific  Bank of California  13500 Evening Creek Drive, Suite 100  San Diego, California 92128  Attention: A. Vincent Siciliano  (After Lease Commencement Date) |
|                                                     |       |                                 |   |   |
| 6.                                                       |       | Premises (Article 1):                |   |   |
|                                                     |       |                                 |   |   |
|                                                     |       | 6.1                                  | Premises: |   | Approximately 5,316 rentable and 4,664 usable square  feet of space located on the first (1st) floor of the Building (as  defined below), as set forth in **Exhibit  A** attached hereto. |
|                                                     |       |                                 |   |   | ** ** |
|                                                     |       | 6.2                                  | Building: |   | The Premises are located in “Building No. I”  (sometimes referred to herein as the “**Building**”)  whose address is 13500 Evening Creek Drive, San Diego, California |
|                                                     |       |                                 |   |   | ** ** |
| 7.                                                       |       | Term (Article 2):                    |   |   |
|                                                     |       |                                 |   |   |
|                                                     |       | 7.1                                  | Lease Term: |   | Eighty-four (84) months. |
|                                                     |       |                                 |   |   |   |
|                                                     |       | 7.2                                  | Lease Commencement Date: |   | The earlier to occur of (i) the date Tenant  commences business operations in the Premises, or (ii) the date the Premises  are Ready for Occupancy (as defined in the Tenant Work Letter attached hereto  as **Exhibit B**), which  Lease Commencement Date is anticipated to be February 1, 2005. |
|                                                     |       |                                 |   |   | ** ** |
|                                                     |       | 7.3                                  | Lease Expiration Date: |   | The last day of the month in which the seventh (7th) anniversary of the Lease  Commencement Date occurs. |

 

iii

----

 
| **TERMS OF LEASE**  (References are to the Office Lease) | ** ** | **DESCRIPTION**        |
|----------------------------------------------------------|------------|------------------------|
|                                                     |       |                   |
| 8.                                                       |       | Base Rent (Article 3): |   |   |
|                                                          |            |                        |  |  |

 

 
| Lease Year | ** ** | **Annual  Base Rent** | ** ** | **Monthly  Installment  of Base Rent** | ** ** | **Monthly Rental  Rate per Rentable  Square Foot** | ** ** |
|-----------------|------------|----------------------------|------------|--------------------------------------------------|------------|------------------------------------------------------------------------|------------|
| 1               |       | $                          | 178,617.60 |                                             | $          | 14,884.80                                                              |       | $ | 2.80 |   |
| 2               |       | $                          | 183,720.96 |                                             | $          | 15,310.08                                                              |       | $ | 2.88 |   |
| 3               |       | $                          | 189,462.24 |                                             | $          | 15,788.52                                                              |       | $ | 2.97 |   |
| 4               |       | $                          | 195,203.52 |                                             | $          | 16,266.96                                                              |       | $ | 3.06 |   |
| 5               |       | $                          | 200,944.80 |                                             | $          | 16,745.40                                                              |       | $ | 3.15 |   |
| 6               |       | $                          | 206,686.08 |                                             | $          | 17,223.84                                                              |       | $ | 3.24 |   |
| 7               |       | $                          | 213,065.28 |                                             | $          | 17,755.44                                                              |       | $ | 3.34 |   |

 

----

* Subject to abatement as provided in Article 3 of theOffice Lease.
| 9.     |   | Additional Rent (Article 4): |
|--------|--------|------------------------------|
|   |   |                         |
|   |   | 9.1                          | Expense Base  Year: |   | Calendar year 2005. |
|   |   |                         |   |   |   |
|   |   | 9.2                          | Tax Expense Base  Year: |   | Calendar year 2005. |
|   |   |                         |   |   |   |
|   |   | 9.3                          | Utilities Base  Year: |   | Calendar year 2005. |
|   |   |                         |   |   |   |
|   |   | 9.4                          | Tenant’s Share  of Operating Expenses, Tax Expenses and Utilities Costs: |   | 3.77% (5,316 rentable square feet within the  Premises/140,915 rentable square feet within the Building). |
|   |   |                         |   |   |   |
| 10.    |   |                         | Security Deposit  (Article 20): |   | $17,755.44. |
|   |   |                         |   |   |   |
| 11.    |   |                         | Parking (Article  23): |   | Four (4) parking passes for every 1,000 usable square  feet of the Premises. |
|   |   |                         |   |   |   |
| 12.    |   |                         | Brokers (Section  24.25): |   | CB Richard Ellis represents Landlord and Irving  Hughes represents Tenant. |

 

iv

----

**OFFICE LEASE**

This Office Lease, whichincludes the preceding Summary and the exhibits attached hereto andincorporated herein by this reference (the Office Lease, the Summary and theexhibits to be known sometimes collectively hereafter as the “**Lease**”), dated as of the date set forth inSection 1 of the Summary, is made by and between LEGACY SABRE SPRINGS, LLC, aCalifornia limited liability company (“**Landlord**”),and 1ST PACIFICBANK. OF CALIFORNIA, a California corporation (“**Tenant**”).

**ARTICLE 1**

**REAL PROPERTY, BUILDINGAND PREMISES**

1.1                                 RealProperty, Building and Premises.

1.1.1                        Premises.Upon and subject to the terms, covenants and conditions hereinafter set forthin this Lease, Landlord hereby leases to Tenant and Tenant hereby leases fromLandlord the premises set forth in Section 6.1 of the Summary (the “**Premises**”), which Premises are located inthe Building defined in Section 6.2 of the Summary to be constructed on theReal Property. The outline of the floor plan of the Premises is set forth in **Exhibit A** attached hereto.

1.1.2                        Buildingand Real Property/Project. The Building is part of a multi-office buildingproject (“**Project**”) constructed onthe Real Property (as defined below) known as “Legacy Sabre Springs” which alsoincludes an additional office building located adjacent to the Building at13520 Evening Creek Drive, San Diego, California (“**Building****I**”).Building I and Building II are sometimes collectively referred to herein as the“**Buildings**.” The Project maycontain an additional office building that may be constructed on the RealProperty and located adjacent to the Buildings (“**Adjacent Building**”). The term “**Real Property**,” as used in this Lease, shall mean,collectively, (i) the Buildings, (ii) the Adjacent Building (if and whenconstructed), (iii) any outside plaza areas, walkways, driveways, courtyards,public and private streets, transportation facilitation areas and otherimprovements and facilities now or hereafter constructed surrounding and/orservicing the Buildings and the Adjacent Building (if and when constructed),including parking structures and surface parking facilities now or hereafterservicing the Buildings, the Adjacent Building (if and when constructed) andany other buildings which may be constructed within the Project (collectively,the “**Parking Facilities**”), whichare designated from time to time by Landlord as common areas (or parkingfacilities, as the case may be) appurtenant to or servicing the Buildings, theAdjacent Building (if and when constructed) and any such other buildings; (iv)any additional buildings, improvements, facilities, parking areas andstructures and common areas which Landlord (and/or any common area associationformed by Landlord or Landlord’s assignee for the Project) may add thereto fromtime to time within or as part of the Project; provided, however, that no suchadditions shall materially and adversely interfere with Tenant’s permitted useof the Premises (as described in Article 5 below) or unreasonably interferewith Tenant’s access to the Premises or the Building (including Tenant’s accessto the Parking Facilities); and (iv) the land upon which any of the foregoingare situated. The site plan depicting the current configuration of the RealProperty and proposed Project is set forth in **Exhibit A-l** attached hereto. Notwithstanding the foregoingor anything contained in this Lease to the contrary, (1) Landlord has noobligation to expand or otherwise make any improvements within the Project,including, without limitation, the Adjacent Building, or any of the outsideplaza areas, walkways, driveways, courtyards, public and private streets,transportation facilitation areas and other improvements and facilities whichmay be depicted on **Exhibit A-l**attached hereto (as the same may be modified by Landlord from time to timewithout notice to Tenant), other than Landlord’s obligations set forth in theTenant Work Letter to construct the Base, Shell and Core of the Building, andthe initial Tenant Improvements for the Premises pursuant to the provisions ofthe Tenant Work Letter, and (2) Landlord shall have the right from time to timeto include or exclude any improvements or facilities within the Project, atLandlord’s sole election, as more particularly set forth in Section 1.1.3below.

1.1.3                        Tenant’sand Landlord’s Rights. Tenant is hereby granted the right to thenonexclusive use of the common corridors and hallways, stairwells, elevators,restrooms and other public or common areas located within the Building, and thenon-exclusive use of the areas located on the Real Property designated byLandlord from time to time as common areas for the Building; provided, however,that (i) Tenant’s use thereof shall be subject to (A) the provisions of anycovenants, conditions and restrictions regarding the use thereof now orhereafter recorded against the Real Property, and (B) such reasonable,non-discriminatory rules, regulations and restrictions as Landlord may makefrom time to time (which shall be provided in writing to Tenant), and (ii)Tenant may not go on the roof of Building without Landlord’s prior consent(which may be withheld in Landlord’s sole and absolute discretion) and withoutotherwise being accompanied by a representative of Landlord. Landlord reservesthe right from time to time to use any of the common areas of the RealProperty, and the roof, risers and conduits of the Building fortelecommunications and/or any other purposes, and to do any of the following:(1) make any changes, additions, improvements, repairs and/or replacements inor to the Real Property or any portion or elements thereof, including, withoutlimitation, (x) changes in the location, size, shape and number of driveways,entrances, loading and unloading areas, ingress, egress, direction of traffic,landscaped areas, walkways, public and private streets, plazas, courtyards, transportation facilitation areas and commonareas, parking spaces, parking structures and parking areas, and (y)expanding or decreasing the size of the Real Property and any common areas andother elements thereof, including adding or deleting buildings thereon and therefrom;(2) close temporarily any of the common areas while engaged in making repairs,improvements or alterations to the Real Property; (3) form a common areaassociation or associations under covenants, conditions and restrictions toown, manage, operate, maintain, repair and/or replace all or any portion of thelandscaping, driveways, walkways, parking areas, public and private streets,plazas, courtyards, transportation facilitation areas and/or other common areaslocated outside of the

----

Building and, subject toArticle 4 below, include the common area assessments, fees and taxes charged bythe association(s) and the cost of maintaining, managing, administering andoperating the association(s), in Direct Expenses; and (4) perform such otheracts and make such other changes with respect to the Real Property as Landlordmay, in the exercise of good faith business judgment, deem to be appropriate;provided, however, that Landlord agrees to exercise its rights under thisSection 1.1.3 so as to minimize any material, adverse interference with Tenant’suse of and access to the Premises (including Tenant’s parking rightshereunder). Landlord, as part of Operating Expenses, agrees to maintain thecommon areas-of the Real Property in a first-class manner consistent with otherfirst-class office buildings in the Central San Diego County area.

1.2                                 Conditionof Premises. Except as expressly set forth in this Lease and in the TenantWork Letter attached hereto as **Exhibit B**,Landlord shall not be obligated to provide or pay for any improvement,remodeling or refurbishment work or services related to the improvement,remodeling or refurbishment of the Premises, and Tenant shall accept thePremises in its “As Is” condition on the Lease Commencement Date; provided,however, in the event that, as of the date of execution of this Lease, theBase, Shell and Core of the Building (as defined in Section 1 of **Exhibit B**), in its condition existingas of such date without regard to any of the Tenant Improvements, alterationsor other improvements to be constructed or installed by or on behalf of Tenantin the Premises or Tenant’s use of the Premises, and based solely on anunoccupied basis, (A) does not comply with applicable laws in effect as of thedate hereof, or (B) contains latent defects (not caused by Tenant’s acts oromissions), then Landlord shall be responsible, at its sole cost and expensewhich shall not be included in Operating Expenses (except as otherwisepermitted in Section 4.2 hereof), for correcting any such non-compliance to theextent and as and when required by applicable laws, and/or correcting any suchlatent defects as soon as reasonably possible after receiving notice thereoffrom Tenant; provided, however, that if Tenant fails to give Landlord writtennotice of any such latent defects described in clause (B) hereinabove withintwo (2) months after the Lease Commencement Date, then the correction of anysuch latent defects shall, subject to Landlord’s repair obligations in Section7.2 hereof, be Tenant’s responsibility at Tenant’s sole cost and expense.

1.3                                 Rentableand Usable Square Feet. The rentable and usable square feet for thePremises are approximately as set forth in Section 6.1 of the Summary. For purposeshereof, the “**usable square feet**”of the Premises and the “**rentable square feet**”of the Premises and the Buildings and the Adjacent Building in the Projectshall be calculated by Landlord pursuant to the Standard Method for MeasuringFloor Area in Office Buildings, ANSI Z65.1-1996 (“**BOMA**”), as modified for the Project pursuant to Landlord’sstandard rentable area measurements for the Project, to include, among othercalculations, a portion of the common areas and service areas of the Buildingsand the Adjacent Building in the Project. If the rentable and usable squarefeet of the Premises and/or the rentable square feet of the Building pursuantto the BOMA Standard, shall be different from the amounts thereof set forth inthis Lease, Landlord shall modify all amounts, percentages and figuresappearing or referred to in this Lease to conform to such corrected squarefootage amounts therefor (including, without limitation, the amount of the BaseRent, Tenant’s Share of Operating Expenses, Tax Expense and Utilities Costs andthe Tenant Improvement Allowance). Any such modifications shall be confirmed inwriting by Landlord to Tenant.

**ARTICLE 2**

**LEASE TERM**

2.1                                 LeaseTerm. The terms and provisions of this Lease shall be effective as of thedate of this Lease except for the provisions of this Lease relating to thepayment of Rent. The term of this Lease (the “**LeaseTerm**”) shall be as set forth in Section 7.1 of the Summary and shallcommence on the date (the “**Lease CommencementDate**”) set forth in Section 7.2 of the Summary (subject, however, tothe terms of the Tenant Work Letter), and shall terminate on the date (the “**Lease Expiration Date**”) set forth inSection 7.3 of the Summary, unless this Lease is sooner terminated ashereinafter provided. For purposes of this Lease, the term “**Lease Year**” shall mean each consecutivetwelve (12) month period during the Lease Term, provided that the last LeaseYear shall end on the Lease Expiration Date. If Landlord does not deliverpossession of the Premises to Tenant on or before the anticipated LeaseCommencement Date (as set forth in Section 7.2(ii) of the Summary), Landlordshall not be subject to any liability nor shall the validity of this Lease northe obligations of Tenant hereunder be affected. In the event that the LeaseCommencement Date is a date which is other than the anticipated LeaseCommencement Date set forth in Section 7.2(ii) of the Summary, within areasonable period of time after the date Tenant takes possession of thePremises Landlord shall deliver to Tenant an amendment to lease in the formattached hereto as **Exhibit C,**attached hereto, setting forth, among other things, the Lease Commencement Dateand the Lease Expiration Date, and Tenant shall execute and return suchamendment to Landlord within five (5) days after Tenant’s receipt thereof. Inthe event that Landlord does not deliver such amendment to Tenant, the LeaseCommencement Date shall be deemed to be the anticipated Lease Commencement Dateset forth in Section 7.2(ii) of the Summary.

2.2                                 OutsideDate; Termination. In the event that Substantial Completion of the Premiseshas not occurred by the “**Outside Date**,”which Outside Date shall be April 1, 2005, as such Outside Date may be extendedby the number of days of Tenant Delays (as defined in the Tenant Work Letter)and by the number of days of “Force Majeure” delays (as defined in Section24.17 hereof) then the sole remedy of Tenant shall be the right to deliver anotice to Landlord (the “**Outside DateTermination Notice**”) electing to terminate this Lease effective uponreceipt of the Outside Date TerminationNotice by Landlord (the “**Effective Date**”).Except as provided hereinbelow, the Outside Date Termination Notice mustbe delivered by Tenant to Landlord, if at all, not earlier than the Outside Dateand not later than ten (10) business days after the Outside Date. If Tenantdelivers the Outside Date Termination Notice to Landlord, then Landlord shallhave the right to suspend the Effective Date for a period ending thirty (30)days after the original Effective Date. In order to suspend the Effective Date,Landlord must deliver to Tenant, within five (5) business days after receipt ofthe Outside Date Termination Notice, a certificate of the Contractor (asdefined in the Tenant Work Letter) certifying that it is such Contractor’s bestgood faith judgment that Substantial

2

----

Completion of the Premises will occur within thirty(30) days after the original Effective Date. If Substantial Completion of thePremises occurs within said thirty (30) day suspension period, then the OutsideDate Termination Notice shall be of no further force and effect; if, however,Substantial Completion of the Premises does not occur within thirty (30) daysuspension period, then this Lease shall terminate as of the date of expirationof such thirty (30) day period. If, prior to the Outside Date, Landlorddetermines that Substantial Completion of the Premises will not occur by theOutside Date, Landlord shall have the right to deliver a written notice toTenant stating Landlord’s opinion as to the date by which SubstantialCompletion of the Premises shall occur and Tenant shall be required, withinfive (5) business days after receipt of such notice, to either deliver theOutside Date Termination Notice (which will mean that this Lease shallthereupon terminate and shall be of no further force and effect) or agree toextend the Outside Date to that date which is set by Landlord. Failure ofTenant to so respond in writing within said five (5) business day period shallbe deemed to constitute Tenant’s agreement to extend the Outside Date to thatdate which is set by Landlord. If the Outside Date is so extended, Landlord’sright to request Tenant to elect to either terminate this Lease or furtherextend the Outside Date shall remain and shall continue to remain, with each ofthe notice periods and response periods set forth above, until the SubstantialCompletion of the Premises or until this Lease is terminated. Upon terminationof this Lease pursuant to this Section 2.2, the parties shall be relieved ofall further obligations under this Lease except for those obligations underthis Lease which expressly survive the expiration or sooner termination of thisLease.

**ARTICLE 3**

**BASE RENT**

Tenant shall pay, withoutnotice or demand, to Landlord or Landlord’s agent at the management office ofthe Project, or at such other place as Landlord may from time to time designatein writing, in currency or a check for currency which, at the time of payment,is legal tender for private or public debts in the United States of America,base rent (“**Base Rent**”) as setforth in Section 8 of the Summary, payable in equal monthly installments as setforth in Section 8 of the Summary in advance on or before the first day of eachand every month during the Lease Term, without any setoff or deductionwhatsoever. The Base Rent for the first full month of the Lease Term shall bepaid at the time of Tenant’s execution of this Lease. If any rental paymentdate (including the Lease Commencement Date) falls on a day of the month otherthan the first day of such month or if any rental payment is for a period whichis shorter than one month, then the rental for any such fractional month shallbe a proportionate amount of a full calendar month’s rental based on theproportion that the number of days in such fractional month bears to the numberof days in the calendar month during which such fractional month occurs. Allother payments or adjustments required to be made under the terms of this Leasethat require proration on a time basis shall be prorated on the same basis.

Notwithstanding anythingto the contrary contained herein and provided that Tenant faithfully performsall of the terms and conditions of this Lease, Landlord hereby agrees to abateTenant’s obligation to pay Tenant’s monthly Base Rent for the second (2nd) and third (3rd) full months of the initial Lease Term.During such abatement period, Tenant shall still be responsible for the paymentof all of its other monetary obligations under this Lease. In the event of adefault by Tenant under the terms of this Lease that results in earlytermination pursuant to the provisions of Article 19 of this Lease, then as apart of the recovery set forth in Article 19 of this Lease, Landlord shall beentitled to the recovery of the monthly Base Rent that was abated under theprovisions of this Article 3.

**ARTICLE 4**

**ADDITIONAL RENT**

4.1                                 AdditionalRent. In addition to paying the Base Rent specified in Article 3 of thisLease, Tenant shall pay as additional rent the sum of the following: (i) Tenant’sShare (as such term is defined below) of the annual Operating Expensesallocated to the Building (pursuant to Section 4.3.4 below) which are in excessof the amount of Operating Expenses allocated to the Building and applicable tothe Expense Base Year; plus (ii) Tenant’s Share of the annual Tax Expensesallocated to the Building (pursuant to Section 4.3.4 below) which are in excessof the amount of Tax Expenses allocated to the Building and applicable to theTax Expense Base Year; plus (iii) Tenant’s Share of the annual Utilities Costsallocated to the Building (pursuant to Section 4.3.4 below) which are in excessof the amount of Utilities Costs allocated to the Building and applicable tothe Utilities Base Year. Such additional rent, together with any and all otheramounts payable by Tenant to Landlord pursuant to the terms of this Lease(including, without limitation, pursuant to Article 6), shall be hereinaftercollectively referred to as the “**AdditionalRent**.” The Base Rent and Additional Rent are herein collectivelyreferred to as the “**Rent**.” Allamounts due under this Article 4 as Additional Rent shall be payable for thesame periods and in the same manner, time and place as the Base Rent. Withoutlimitation on other obligations of Tenant which shall survive the expiration ofthe Lease Term, the obligations of Tenant to pay the Additional Rent providedfor in this Article 4 shall survive the expiration of the Lease Term.

4.2                                 Definitions.As used in this Article 4, the following terms shall have the meaningshereinafter set forth:

4.2.1                        “**Calendar Year**” shall mean each calendaryear in which any portion of the Lease Term falls, through and including thecalendar year in which the Lease Term expires.

4.2.2                        “**Expense Base Year**” shall mean the year setforth in Section 9.1 of the Summary.

3

----

4.2.3                        “**Expense Year**” shall mean each CalendarYear, provided that Landlord, upon notice to Tenant, may change the ExpenseYear from time to time to any other twelve (12) consecutive-month period, and,in the event of any such change, Tenant’s Share of Operating Expenses, TaxExpenses and Utilities Costs shall be equitably adjusted for any Expense Yearinvolved in any such change.

4.2.4                        “**Operating Expenses**” shall mean allexpenses, costs and amounts of every kind and nature which Landlord shall payduring any Expense Year because of or in connection with the ownership,management, maintenance, repair, replacement, restoration or operation of theReal Property, including, without limitation, any amounts paid for: (i) thecost of operating, maintaining, repairing, renovating and managing the utilitysystems, mechanical systems, sanitary and storm drainage systems, any elevatorsystems and all other “Systems and Equipment” (as defined in Section 4.2.5 ofthis Lease), and the cost of supplies and equipment and maintenance and servicecontracts in connection therewith; (ii) the cost of licenses, certificates,permits and inspections, and the cost of contesting the validity orapplicability of any governmental enactments which may affect OperatingExpenses, and the costs incurred in connection with implementation andoperation (by Landlord or any common area association(s) formed for theProject) of any transportation system management program or similar program;(iii) the cost of insurance carried by Landlord, in such amounts as Landlordmay reasonably determine or as may be required by any mortgagees or the lessorof any underlying or ground lease affecting the Real Property; (iv) the cost oflandscaping, relamping, supplies, tools, equipment and materials, and all fees,charges and other costs (including consulting fees, legal fees and accountingfees) incurred in connection with the management, operation, repair andmaintenance of the Real Property; (v) the cost of parking area repair,restoration, and maintenance; (vi) any equipment rental agreements ormanagement agreements (including the cost of any management fee (not to exceedfive percent (5%) of the gross receipts of the Real Property) and the fairrental value of any office space provided thereunder); (vii) wages, salariesand other compensation and benefits of all persons engaged in the operation,management, maintenance or security of the Real Property, and employer’s SocialSecurity taxes, unemployment taxes or insurance, and any other taxes which maybe levied on such wages, salaries, compensation and benefits; (viii) paymentsunder any easement, license, operating agreement, declaration, restrictivecovenant, underlying or ground lease (excluding rent), or instrument pertainingto the sharing of costs by the Real Property; (ix) the cost of janitorialservice, alarm and security service, if any, window cleaning, trash removal,replacement of wall and floor coverings, ceiling tiles and fixtures in lobbies,corridors, restrooms and other common or public areas or facilities,maintenance and replacement of curbs and walkways, repair to roofs and reroofing; (x) amortization (including interest on the unamortized cost) of thecost of acquiring or the rental expense of personal property used in themaintenance, operation and repair of the Real Property; and (xi) the cost ofany capital improvements or other costs (I) which are intended as alabor-saving device or to effect other economies in the operation or maintenanceof the Real Property, (II) made to the Real Property or any portion thereofafter the Lease Commencement Date that are required under any governmental lawor regulation, or (III) which are reasonably determined by Landlord to be inthe best interests of the Real Property; provided, however, that if any suchcost described in (I), (II) or (III) above, is a capital expenditure, such costshall be amortized (including interest on the unamortized cost) over its usefullife as Landlord shall reasonably determine. If Landlord is not furnishing anyparticular work or service (the cost of which, if performed by Landlord, wouldbe included in Operating Expenses) to a tenant who has undertaken to performsuch work or service in lieu of the performance thereof by Landlord, OperatingExpenses shall be deemed to be increased by an amount equal to the additionalOperating Expenses which would reasonably have been incurred during such periodby Landlord if it had at its own expense furnished such work or service to suchtenant. If the Buildings (and during the period of time when any other officebuildings are fully constructed and ready for occupancy and are included byLandlord within the Project) are less than ninety-five percent (95%) occupiedduring all or a portion of any Expense Year (including the Expense Base Year),Landlord shall make an appropriate adjustment to the variable components ofOperating Expenses for such year or applicable portion thereof, employing soundaccounting and management principles, to determine the amount of OperatingExpenses that would have been paid had the Buildings (and during the period oftime when any other office buildings are fully constructed and ready foroccupancy and are included by Landlord within the Project) been ninety-fivepercent (95%) occupied; and the amount so determined shall be deemed to havebeen the amount of Operating Expenses for such year, or applicable portionthereof.

Subject to the provisions of Section 4.3.4 below,Landlord shall have the right, from time to time, to equitably allocate some orall of the Operating Expenses (and/or Tax Expenses and Utilities Costs) betweenthe Building and/or among different tenants of the Project and/or differentbuildings of the Real Property as and when such different buildings (including,but not limited to, Building II and the Adjacent Building) are constructed andadded to (and/or excluded from) the Real Property or otherwise (the “**Cost Pools**”). Such Cost Pools may include,without limitation, the office space tenants and retail space tenants of theReal Property or of a building or buildings in the Real Property. Such CostPools may also include an allocation of certain Operating Expenses (and/or TaxExpenses and Utilities Costs) within or under covenants, conditions andrestrictions affecting the Real Property. In addition, Landlord shall have theright from time to time, in its reasonable discretion, to include or excludeexisting or future buildings in the Project for purposes of determiningOperating Expenses, Tax Expenses and Utilities Costs and/or the provision ofvarious services and amenities thereto, including allocation of OperatingExpenses, Tax Expenses and Utilities Costs in any such Cost Pools.

Notwithstanding anything to the contrary set forth inthis Article 4, when calculating Operating Expenses for the Expense Base Year,Operating Expenses shall exclude market-wide labor-rate increases due toextraordinary circumstances, including, but not limited to, boycotts andstrikes, and costs relating to capital improvements or expenditures.

Notwithstanding the foregoing, Operating Expensesshall not, however, include: (A) costs of leasing commissions, attorneys’ feesand other costs and expenses incurred in connection with negotiations ordisputes with present or prospective tenants or other occupants of the RealProperty; (B) costs (including permit, license and inspection costs) incurredin renovating or otherwise improving, decorating or redecorating rentable spacefor other

4

----

tenants or vacant rentable space; (C) costs incurreddue to the violation by Landlord of the terms and conditions of any lease ofspace in the Real Property; (D) costs of overhead or profit increment paid toLandlord or to subsidiaries or affiliates of Landlord for services in or inconnection with the Real Property to the extent the same exceeds the costs ofoverhead and profit increment included in the costs of such services whichcould be obtained from third parties on a competitive basis; (E) except asotherwise specifically provided in this Section 4.2.4, costs of interest ondebt or amortization on any mortgages, and rent payable under any ground leaseof the Real Property; (F) Utilities Costs; and (G) Tax Expenses.

4.2.5                        “**Systems and Equipment**” shall mean anyplant, machinery, transformers, duct work, cable, wires, and other equipment,facilities, and systems designed to supply heat, ventilation, air conditioningand humidity or any other services or utilities, or comprising or serving asany component or portion of the electrical, gas, steam, plumbing, sprinkler,communications, alarm, security, or fire/life safety systems or equipment, orany other mechanical, electrical, electronic, computer or other systems orequipment which serve either or both of the Buildings and/or the Adjacent Buildingand/or any other building in the Project in whole or in part.

4.2.6                        “**Tax Expense Base Year**” shall mean the yearset forth in Section 9.2 of the Summary.

4.2.7                        “**Tax Expenses**” shall mean all federal,state, county, or local governmental or municipal taxes, fees, assessments,charges or other impositions of every kind and nature, whether general,special, ordinary or extraordinary, (including, without limitation, real estatetaxes, general and special assessments, transit assessments, fees and taxes, childcare subsidies, fees and/or assessments, job training subsidies, fees and/orassessments, open space fees and/or assessments, housing subsidies and/orhousing fund fees or assessments, public art fees and/or assessments, leaseholdtaxes or taxes based upon the receipt of rent, including gross receipts orsales taxes applicable to the receipt of rent, personal property taxes imposedupon the fixtures, machinery, equipment, apparatus, systems and equipment,appurtenances, furniture and other personal property used in connection withthe Real Property), which Landlord shall pay during any Expense Year because ofor in connection with the ownership, leasing and operation of the Real Propertyor Landlord’s interest therein. For purposes of this Lease, Tax Expenses shallbe calculated as if the tenant improvements in the Buildings (and, if and whenconstructed, the Adjacent Building) were fully constructed and the RealProperty, the Buildings (and, if and when constructed, the Adjacent Building)and all tenant improvements in the Buildings (and, if and when constructed, theAdjacent Building) were fully assessed for real estate tax purposes.

4.2.7.1               Tax Expenses shallinclude, without limitation:

(i)                                     Anytax on Landlord’s rent, right to rent or other income from the Real Property oras against Landlord’s business of leasing any of the Real Property;

(ii)                                  Anyassessment, tax, fee, levy or charge in addition to, or in substitution,partially or totally, of any assessment, tax, fee, levy or charge previouslyincluded within the definition of real property tax, it being acknowledged byTenant and Landlord that Proposition 13 was adopted by the voters of the Stateof California in the June 1978 election (“**Proposition13**”) and that assessments, taxes, fees, levies and charges may beimposed by governmental agencies for such services as fire protection, street,sidewalk and road maintenance, refuse removal and for other governmentalservices formerly provided without charge to property owners or occupants. Itis the intention of Tenant and Landlord that all such new and increasedassessments, taxes, fees, levies, and charges and all similar assessments,taxes, fees, levies and charges be included within the definition of TaxExpenses for purposes of this Lease;

(iii)                               Anyassessment, tax, fee, levy, or charge allocable to or measured by the area ofthe Premises or the rent payable hereunder, including, without limitation, anygross income tax upon or with respect to the possession, leasing, operating,management, maintenance, alteration, repair, use or occupancy by Tenant of thePremises, or any portion thereof;

(iv)                              Anyassessment, tax, fee, levy or charge, upon this transaction or any document towhich Tenant is a party, creating or transferring an interest or an estate in thePremises; and

(v)                                 Anyreasonable expenses incurred by Landlord in attempting to protest, reduce orminimize Tax Expenses.

4.2.7.2               In no event shallTax Expenses for any Expense Year be less than the Tax Expenses for the TaxExpense Base Year.

4.2.7.3               Notwithstandinganything to the contrary contained in this Section 4.2.7, there shall beexcluded from Tax Expenses (i) all excess profits taxes, franchise taxes, gifttaxes, capital stock taxes, inheritance and succession taxes, estate taxes,federal and state net income taxes, and other taxes to the extent applicable toLandlord’s net income (as opposed to rents, receipts or income attributable tooperations at the Real Property), (ii) any items included as OperatingExpenses, and (iii) any items paid by Tenant under Section 4.4 of this Lease.

4.2.8                        “**Tenant’s Share**” shall mean the percentageset forth in Section 9.4 of the Summary. Tenant’s Share was calculated bydividing the number of rentable square feet of the Premises by the totalrentable square feet in the Building (as set forth in Section 9.4 of theSummary), and stating such amount as a percentage. Landlord shall have theright from time to time to redetermine the rentable square feet of the Premisesand/or Building, and Tenant’s Share shall be appropriately adjusted to reflectany such redetermination. If Tenant’s Share is adjusted pursuant to theforegoing, as to the Expense Year in which such adjustment occurs, Tenant’sShare for such

5

----

year shall be determined on the basis of the number ofdays during such Expense Year that each such Tenant’s Share was in effect.

4.2.9                        “**Utilities Base Year**” shall mean the yearset forth in Section 9.3 of the Summary.

4.2.10                  “**Utilities Costs**” shall mean all actualcharges for utilities for the Building and the Project which Landlord shall payduring any Expense Year, including, but not limited to, the costs of water,sewer and electricity, and the costs of HVAC (including, unless paid by Tenantpursuant to Section 6.1.2 below, the cost of electricity to operate the HVACair handlers) and other utilities (but excluding (i) the cost of electricityconsumed in the Premises and the premises of other tenants of the Building, theAdjacent Building and any other buildings in the Project (since Tenant isseparately paying for the cost of electricity pursuant to Section 6.1.2 below)and (ii) those charges for which tenants directly reimburse Landlord orotherwise pay directly to the utility company) as well as related fees,assessments and surcharges. Utilities Costs shall be calculated assuming theBuildings (and during the period of time when any other office buildings arefully constructed and ready for occupancy and are included by Landlord withinthe Project), are at least ninety-five percent (95%) occupied. If, during all orany part of any Expense Year, Landlord shall not provide any utilities otherthan gas and electricity (the cost of which, if provided by Landlord, would beincluded in Utilities Costs) to a tenant (including Tenant) who has undertakento provide the same instead of Landlord, Utilities Costs shall be deemed to beincreased by an amount equal to the additional Utilities Costs which wouldreasonably have been incurred during such period by Landlord if Landlord had atits own expense provided such utilities to such tenant. Utilities Costs shallinclude any costs of utilities which are allocated to the Real Property underany declaration, restrictive covenant, or other instrument pertaining to thesharing of costs by the Real Property or any portion thereof, including anycovenants, conditions or restrictions now or hereafter recorded against oraffecting the Real Property. For purposes of determining Utilities Costsincurred for the Utilities Base Year, Utilities Costs for the Utilities BaseYear shall not include any one time special charges, costs or fees orextraordinary charges or costs incurred in the Utilities Base Year only,including those attributable to boycotts, embargoes, strikes or other shortagesof services or fuel. In addition, if in any Expense Year subsequent to theUtilities Base Year, the amount of Utilities Costs decreases due to a reductionin the cost of providing utilities to the Real Property for any reason,including without limitation, because of deregulation of the utility industry and/orreduction in rates achieved in contracts with utilities providers, then forpurposes of the Expense Year in which such decrease in Utilities Costs occurredand all subsequent Expense Years, the Utilities Costs for the Utilities BaseYear shall be decreased by an amount equal to such decrease.

4.3                                 Calculationand Payment of Additional Rent.

4.3.1                        Calculationof Excess. If for any Expense Year ending or commencing within the LeaseTerm, (i) Tenant’s Share of Operating Expenses allocated to the Building pursuantto Section 4.3.4 below for such Expense Year exceeds Tenant’s Share ofOperating Expenses allocated to the Building for the Expense Base Year and/or(ii) Tenant’s Share of Tax Expenses allocated to the Building pursuant toSection 4.3.4 below for such Expense Year exceeds Tenant’s Share of TaxExpenses allocated to the Building for the Tax Expense Base Year, and/or (iii)Tenant’s Share of Utilities Costs allocated to the Building pursuant to Section4.3.4 below for such Expense Year exceeds Tenant’s Share of Utilities Costsallocated to the Building for the Utilities Base Year, then Tenant shall pay toLandlord, in the manner set forth in Section 4.3.2, below, and as AdditionalRent, an amount equal to such excess (the “**Excess**”).

4.3.2                        Statementof Actual Operating Expenses. Tax Expenses and Utilities Costs and Payment byTenant. Landlord shall endeavor to give to Tenant on or before the firstday of May following the end of each Expense Year, a statement (the “**Statement**”) which shall state the OperatingExpenses, Tax Expenses and Utilities Costs incurred or accrued for suchpreceding Expense Year, and which shall indicate the amount, if any, of anyExcess. Upon receipt of the Statement for each Expense Year ending during theLease Term, if an Excess is present, Tenant shall pay, with its nextinstallment of Base Rent due, the full amount of the Excess for such ExpenseYear, less the amounts, if any, paid during such Expense Year as “EstimatedExcess,” as that term is defined in Section 4.3.3 of this Lease. The failure ofLandlord to timely furnish the Statement for any Expense Year shall notprejudice Landlord from enforcing its rights under this Article 4. Even thoughthe Lease Term has expired and Tenant has vacated the Premises, when the finaldetermination is made of Tenant’s Share of the Operating Expenses, Tax Expensesand Utilities Costs for the Expense Year in which this Lease terminates, if anExcess is present, Tenant shall immediately pay to Landlord an amount ascalculated pursuant to the provisions of Section 4.3.1 of this Lease. Theprovisions of this Section 4.3.2 shall survive the expiration or earliertermination of the Lease Term.

4.3.3                        Statementof Estimated Operating Expenses, Tax Expenses and Utilities Costs. Inaddition, Landlord shall endeavor to give Tenant a yearly expense estimatestatement (the “**Estimate Statement**”)which shall set forth Landlord’s reasonable estimate (the “**Estimate**”) of what the total amount ofOperating Expenses, Tax Expenses and Utilities Costs allocated to the Buildingpursuant to Section 4.3.4 below for the then-current Expense Year shall be andthe estimated Excess (the “**Estimated Excess**”)as calculated by comparing (i) Tenant’s Share of Operating Expenses allocatedto the Building, which shall be based upon the Estimate, to Tenant’s Share ofOperating Expenses allocated to the Building for the Expense Base Year, (ii)Tenant’s Share of Tax Expenses allocated to the Building, which shall be basedupon the Estimate, to Tenant’s Share of Tax Expenses allocated to the Buildingfor the Tax Expense Base Year, and (iii) Tenant’s Share of Utilities Costsallocated to the Building, which shallbe based upon the Estimate, to Tenant’s Share of Utilities Costs allocated tothe Building for the Utilities Base Year. The failure of Landlord totimely furnish the Estimate Statement for any Expense Year shall not precludeLandlord from enforcing its rights to collect any Estimated Excess under thisArticle 4. If pursuant to the Estimate Statement an Estimated Excess is calculatedfor the then-current Expense Year, Tenant shall pay, with its next installmentof Base Rent due, a fraction of the Estimated Excess for the then-currentExpense Year (reduced by any amounts paid pursuant to the last sentence of thisSection 4.3.3). Such fraction shall have as its numerator the number of monthswhich have elapsed in such current Expense Year to the month of such payment,both months

6

----

inclusive, and shall have twelve (12) as itsdenominator. Until a new Estimate Statement is furnished, Tenant shall paymonthly, with the monthly Base Rent installments, an amount equal toone-twelfth (1/12) of the total Estimated Excess set forth in the previousEstimate Statement delivered by Landlord to Tenant.

4.3.4                        Allocationof Operating Expenses, Tax Expenses and Utilities Costs to Building. Theparties acknowledge that the Building is a part of a multi-office buildingproject consisting of the Buildings and the Adjacent Building (if and whenconstructed) and such other buildings as Landlord may elect to construct andinclude as part of the Real Property from time to time (collectively, the “**Other Buildings**”), and that certain of thecosts and expenses incurred in connection with the Real Property (i.e.the Operating Expenses, Tax Expenses and Utilities Costs) shall be shared amongthe Buildings and/or such Other Buildings, while certain other costs andexpenses which are solely attributable to the Building, Building II and suchOther Buildings, as applicable, shall be allocated directly to the Building, BuildingII and the Other Buildings, respectively. Accordingly, as set forth in Sections4.1 and 4.2 above, Operating Expenses, Tax Expenses and Utilities Costs aredetermined annually for the Real Property as a whole, and a portion of theOperating Expenses, Tax Expenses and Utilities Costs, which portion shall bedetermined by Landlord on an equitable basis, shall be allocated to theBuilding (as opposed to the tenants of Building II and the Other Buildings),and such portion so allocated shall be the amount of Operating Expenses, TaxExpenses and Utilities Costs payable with respect to the Building upon whichTenant’s Share shall be calculated. Such portion of the Operating Expenses, TaxExpenses and Utilities Costs allocated to the Building shall include allOperating Expenses, Tax Expenses and Utilities Costs which are attributablesolely to the Building, and an equitable portion of the Operating Expenses, TaxExpenses and Utilities Costs attributable to the Real Property as a whole. Asan example of such allocation with respect to Tax Expenses and Utilities Costs,it is anticipated that Landlord may receive separate tax bills which separatelyassess the improvements component of Tax Expenses for each building in theProject and/or Landlord may receive separate utilities bills from the utilitiescompanies identifying the Utilities Costs for certain of the utilities costsdirectly incurred by each such building (as measured by separate metersinstalled for each such building), and such separately assessed Tax Expensesand separately metered Utilities Costs shall be calculated for and allocatedseparately to each such applicable building. In addition, in the event Landlordelects, at its sole option, to subdivide certain common area portions of theReal Property such as landscaping, public and private streets, driveways,walkways, courtyards, plazas, transportation facilitation areas, accesswaysand/or parking areas into a separate parcel or parcels of land (and/orseparately convey all or any of such parcels to a common area association toown, operate and/or maintain same), the Operating Expenses, Tax Expenses andUtilities Costs for such common area parcels of land may be aggregated and thenreasonably allocated by Landlord to the Building, Building II and such OtherBuildings on an equitable basis as Landlord (and/or any applicable covenants,conditions and restrictions for any such common area association) shall providefrom time to time.

4.4                                 Taxesand Other Charges for Which Tenant Is Directly Responsible. Tenant shallreimburse Landlord upon demand for any and all taxes or assessments required tobe paid by Landlord (except to the extent included in Tax Expenses byLandlord), excluding state, local and federal personal or corporate incometaxes measured by the net income of Landlord from all sources and estate andinheritance taxes, whether or not now customary or within the contemplation ofthe parties hereto, when:

4.4.1                        said taxesare measured by or reasonably attributable to the cost or value of Tenant’sequipment, furniture, fixtures and other personal property located in thePremises, or by the cost or value of any leasehold improvements made in or tothe Premises by or for Tenant, to the extent the cost or value of suchleasehold improvements exceeds the cost or value of a building standardbuild-out as determined by Landlord regardless of whether title to suchimprovements shall be vested in Tenant or Landlord;

4.4.2                        said taxesare assessed upon or with respect to the possession, leasing, operation, management,maintenance, alteration, repair, use or occupancy by Tenant of the Premises orany portion of the Real Property (including the Parking Facilities); or

4.4.3                        said taxesare assessed upon this transaction or any document to which Tenant is a party creatingor transferring an interest or an estate in the Premises.

4.5                                 LateCharges. If any installment of Rent or any other sum due from Tenant shallnot be received by Landlord or Landlord’s designee by the due date therefor,then Tenant shall pay to Landlord a late charge equal to ten percent (10%) ofthe amount due plus any attorneys’ fees incurred by Landlord by reason ofTenant’s failure to pay Rent and/or other charges when due hereunder. The latecharge shall be deemed Additional Rent and the right to require it shall be inaddition to all of Landlord’s other rights and remedies hereunder, at lawand/or in equity and shall not be construed as liquidated damages or aslimiting Landlord’s remedies in any manner. In addition to the late chargedescribed above, any Rent or other amounts owing hereunder which are not paidby the date that they are due shall thereafter bear interest until paid at arate (the “**Interest Rate**”) equalto the lesser of (i) the “Prime Rate” or “Reference Rate” announced from timeto time by the Bank of America (or such reasonable comparable national bankinginstitution as selected by Landlord in the event Bank of America ceases toexist or publish a Prime Rate or Reference Rate), plus four percent (4%), or(ii) the highest rate permitted by applicable law.

**ARTICLE 5**

**USE OF PREMISES**

5.1                                 PermittedUse. Tenant shall use the Premises solely for retail banking, relatedfinancial services and general office purposes, all to the extent consistentwith the character of the Building as a first-class office building, and Tenantshall not use or permit the Premises to be used for any other purpose orpurposes whatsoever.

7

----

Tenant further covenants and agrees that it shall notuse, or suffer or permit any person or persons to use, the Premises or any partthereof for any use or purpose contrary to the provisions of **Exhibit D,** attached hereto, or inviolation of the laws of the United States of America, the state in which theReal Property is located, or the ordinances, regulations or requirements of thelocal municipal or county governing body or other lawful authorities havingjurisdiction over the Real Property. Tenant shall comply with all recordedcovenants, conditions, and restrictions, and the provisions of all ground orunderlying leases, now or hereafter affecting the Real Property. Tenant shallnot use or allow another person or entity to use any part of the Premises forthe storage, use, treatment, manufacture or sale of “Hazardous Material,” asthat term is defined below. As used herein, the term “**Hazardous****Material**”means any hazardous or toxic substance, material or waste which is or becomesregulated by any local governmental authority, the state in which the RealProperty is located or the United States Government.

5.2                                 ATMFacility. Subject to all applicable governmental approvals, during theLease Term, Tenant shall have the exclusive right to install and maintain one(1) automated transaction machine (the “**ATM**”)in an area on the exterior of the Building that shall be subject to Landlord’sapproval, in Landlord’s sole and absolute discretion (collectively, the “**ATM Facility**”). In addition, Landlordagrees that Tenant, at Tenant’s sole cost and expense, shall be permitted tomaintain the name “1st Pacific Bank of California” on the ATMFacility, in a location thereon to be agreed upon by the parties. In connectionwith Tenant’s operation of the ATM Facility, Tenant shall, at its sole cost andexpense (i) obtain and maintain all necessary federal, state, and localpermits, licenses, and approvals; (ii) comply with all laws applicable to theuse and operation of the ATM Facility, including, without limitation anyprovisions of the Americans with Disabilities Act; (iii) maintain the ATMFacility, and the area in the vicinity thereof, in clean and working conditionand service the ATM Facility with cash and supplies (such services shall beperformed before or after the normal business hours of the Real Property,except as deemed reasonably necessary by Tenant); (iv) provide all security measuresthat are customary for similar facilities in comparable projects in thevicinity of the Real Property including, without limitation, mirrors,surveillance cameras, door locks, adequate lighting, card entry systems, andwarning signage, and Tenant shall review such security measures at leastannually and revise same to reflect then customary security measures; (v) payall real, personal property, or other taxes or fees assessed or imposed on theATM Facility; (vi) arrange with, and pay directly to, the applicable public orprivate utilities, as the case may be, for furnishing, installing, andmaintaining of all telecommunications lines, services, and equipment as may berequired by Tenant for the operation of the ATM Facility and, in connectiontherewith, Tenant shall not modify or disturb any telecommunications lines,services and/or equipment in the Real Property without Landlord’s prior writtenconsent, which shall not be unreasonably withheld or delayed. Landlord mayrequire Tenant to temporarily discontinue services in connection with Landlord’smaintenance and repair of the Real Property or any portion thereof, or ifnecessary in Landlord’s reasonable judgment, for the security of the RealProperty or its occupants or contents, and any such action by Landlord shallnot be deemed a constructive eviction of Tenant or a disturbance of Tenant’suse of the Premises or the Real Property and without Landlord incurring anyliability to Tenant whatsoever. Landlord shall have no responsibilitywhatsoever for the ATM Facility and shall not be liable for any damage ordisruption to same however caused, including without limitation, due to adisruption in electrical or telecommunication service. Landlord makes norepresentations as to the suitability of the Real Property for an ATM, whetheror not an ATM may be operated in the Real Property under applicable zoningordinances or other laws, or as to the safety or security of the Real Property.The ATM Facility and surrounding area shall be deemed to constitute a portionof the Premises for purposes of Article 10 below. Tenant’s rights to the ATMFacility are personal to Original Tenant (as defined in Article 16 below andany assignee that is an Affiliate of Original Tenant’s entire interest in thisLease pursuant to Section 14.7 below), and shall only be available to theOriginal Tenant (or such Affiliate assignee, as the case may be) while theOriginal Tenant (or such Affiliate assignee, as the case may be) is in physicaloccupancy of the entire Premises. Upon the expiration or early termination ofthis Lease or the termination of Tenant’s rights to the ATM Facility asprovided hereinabove, Tenant shall, at its sole cost and expense, remove theATM and return that portion of the ATM Facility to the original condition asexisted immediately prior to Tenant’s initial installation of such ATM, normalwear and tear and damage by fire and casualty excepted. If Tenant fails toremove such ATM and restore the ATM Facility as provided in this Section 5.2within ten (10) days following the expiration or early termination of thisLease, then Landlord may perform such work, and all costs and expenses incurredby Landlord in so performing such work shall be reimbursed by Tenant toLandlord within thirty (30) days after Tenant’s receipt of invoice therefor.

**ARTICLE 6**

**SERVICES AND UTILITIES**

6.1                                 StandardTenant Services. Landlord shall provide the following services on all daysduring the Lease Term, unless otherwise stated below.

6.1.1                        Subject toreasonable changes implemented by Landlord and to all governmental rules,regulations and guidelines applicable thereto, Landlord shall provide heatingand air conditioning when necessary for normal comfort for normal office use inthe Premises, from Monday through Friday, during the period from 7:00 a.m. to6:00 p.m., and on Saturday during the period from 9:00 a.m. to 1:00 p.m.,except for the date of observation of New Year’s Day, Presidents’ Day, MemorialDay, Independence Day, Labor Day, Thanksgiving Day, Christmas Day and otherlocally or nationally recognized holidays as designated by Landlord(collectively, the “**Holidays’**”).

6.1.2                        Landlordshall provide adequate electrical wiring and facilities and power for normalgeneral office use as determined by Landlord. Tenant shall pay directly to theutility company pursuant to the utility company’s separate meters (or toLandlord in the event Landlord provides submeters instead of the utilitycompany’s meters), the cost of all electricity provided to and/or consumed inthe Premises (including normal and excess consumption and including the cost ofelectricity to operate the HVAC air handlers if not charged to and paid by

8

----

Tenant as part of Utilities Costs), which electricityshall be separately metered (as described above or otherwise equitably allocatedand charged by Landlord to Tenant and other tenants of the Building). Tenantshall pay such cost (including the cost of such meters or submeters) within ten(10) days after demand and as additional rent under this Lease (and not as partof the Operating Expenses or Utilities Costs). Landlord shall designate theelectricity utility provider from time to time.

6.1.3                        As part ofOperating Expenses or Utilities Costs (as determined by Landlord), Landlordshall replace lamps, starters and ballasts for Building standard lightingfixtures within the Premises. In addition, Tenant shall bear the cost ofreplacement of lamps, starters and ballasts for non-Building standard lightingfixtures within the Premises.

6.1.4                        Landlordshall provide city water from the regular Building outlets for drinking,lavatory and toilet purposes.

6.1.5                        Landlordshall, in a manner consistent with the janitorial standards generally employedby landlords of comparable first-class office buildings in the Central SanDiego County area, provide janitorial services five (5) days per week, exceptthe date of observation of the Holidays, in and about the Premises and windowwashing services in a manner consistent with other comparable buildings in thevicinity of the Project.

6.1.6                        Landlord shallprovide nonexclusive automatic passenger elevator service at all times.

6.1.7                        Landlordshall provide nonexclusive freight elevator service subject to scheduling byLandlord.

6.2                                 OverstandardTenant Use. Tenant shall not, without Landlord’s prior written consent, useheat-generating machines, machines other than normal fractional horsepoweroffice machines, or equipment or lighting other than building standard lightsin the Premises, which may affect the temperature otherwise maintained by theair conditioning system or increase the need for water normally furnished forthe Premises by Landlord pursuant to the terms of Section 6.1 of this Lease. IfTenant uses water or heat or air conditioning in excess of that supplied byLandlord pursuant to Section 6.1 of this Lease, Tenant shall pay to Landlord,within ten (10) days after billing and as additional rent, the cost of suchexcess consumption, the cost of the installation, operation, and maintenance ofequipment which is installed in order to supply such excess consumption, andthe cost of the increased wear and tear on existing equipment caused by suchexcess consumption; and Landlord may install devices to separately meter anyincreased use, and in such event Tenant shall pay, as additional rent, the increasedcost directly to Landlord, within ten (10) days after demand, including thecost of such additional metering devices. If Tenant desires to use heat,ventilation or air conditioning during hours other than those for whichLandlord is obligated to supply such utilities pursuant to the terms of Section6.1 of this Lease, (i) Tenant shall give Landlord at least twenty-four (24)hours prior written notice or such other notice as Landlord shall from time totime establish as appropriate (which other notice is anticipated to beaccomplished through telephonic dial-up and/or access via computer codes), ofTenant’s desired use, (ii) Landlord shall supply such HVAC to Tenant at suchhourly cost to Tenant as Landlord shall from time to time establish; such hourlycost shall be equal to (A) the actual cost incurred by Landlord to supply suchafter-hours HVAC on an hourly basis (but based on a two (2) hour minimumprovision of such after-hours HVAC), (B) increased wear and tear anddepreciation of equipment to provide such after-hours HVAC, and (C) maintenancecosts, and (iii) Tenant shall pay such cost within ten (10) days after billing,as Additional Rent.

6.3                                 Interruptionof Use. Except as expressly provided herein, Tenant agrees that Landlordshall not be liable for damages, by abatement of Rent or otherwise, for failureto furnish or delay in furnishing any service (including telephone andtelecommunication services), or for any diminution in the quality or quantitythereof, when such failure or delay or diminution is occasioned, in whole or inpart, by repairs, replacements, or improvements, by any strike, lockout orother labor trouble, by inability to secure electricity, gas, water, or otherfuel at the Building or Real Property after reasonable effort to do so, by anyaccident or casualty whatsoever, by act or default of Tenant or other parties,or by any other cause beyond Landlord’s reasonable control; and such failuresor delays or diminution shall never be deemed to constitute an eviction ordisturbance of Tenant’s use and possession of the Premises or relieve Tenantfrom paying Rent or performing any of its obligations under this Lease.Furthermore, Landlord shall not be liable under any circumstances for a lossof, or injury to, property or for injury to, or interference with, Tenant’sbusiness, including, without limitation, loss of profits, however occurring,through or in connection with or incidental to a failure to furnish any of theservices or utilities as set forth in this Article 6.

6.4                                 AdditionalServices. Landlord shall also have the exclusive right, but not theobligation, to provide any additional services which may be required by Tenant,including, without limitation, locksmithing, lamp replacement, additionaljanitorial service, and additional repairs and maintenance, provided thatTenant shall pay to Landlord upon billing, the sum of all costs to Landlord ofsuch additional services plus an administration fee. Charges for any utilitiesor service for which Tenant is required to pay from time to time hereunder,shall be deemed Additional Rent hereunder and shall be billed on a monthlybasis.

6.5                                 Abatementof Rent When Tenant Is Prevented From Using Premises. In the event thatTenant is prevented from using, and does not use, the Premises or any portionthereof, for five (5) consecutive business days (the “**Eligibility Period**”) as a result of (i) anyrepair, maintenance or alteration performed by Landlord after the LeaseCommencement Date and required to be performed by Landlord under this Lease orpermitted pursuant to Section 24.30 below, or (ii) any failure by Landlord toprovide to the Premises any of the essential utilities and services required tobe provided in Sections 6.1.1 or 6.1.2 above, or (iii) any failure by Landlordto provide access to the Premises, then Tenant’s obligation to pay Base Rentand Tenant’s Share of Operating Expenses, Tax Expenses and Utilities Costsshall be abated or reduced, as the case may be, from and after the first (1st)day following the Eligibility Period and continuing until such time that Tenantcontinues to be so prevented from using, and does not

9

----

use, the Premises or a portion thereof, in theproportion that the rentable square feet of the portion of the Premises thatTenant is prevented from using, and does not use, bears to the total rentablesquare feet of the Premises; provided, however, that Tenant shall only beentitled to such abatement of rent if the matter described in clauses (i), (ii)or (iii) of this sentence is not caused by Tenant’s gross negligence or willfulmisconduct. To the extent Tenant shall be entitled to abatement of rent becauseof a damage or destruction pursuant to Article 11 or a taking pursuant toArticle 12, then the Eligibility Period shall not be applicable.

**ARTICLE 7**

**REPAIRS**

7.1                                 Tenant’sRepairs. Subject to Landlord’s repair obligations in Sections 7.2 and 11.1below, Tenant shall, at Tenant’s own expense, keep the Premises, including allimprovements, fixtures and furnishings therein, in good order, repair andcondition at all times during the Lease Term, which repair obligations shallinclude, without limitation, the obligation to promptly and adequately repairall damage to the Premises and replace or repair all damaged or broken fixturesand appurtenances; provided however, that, at Landlord’s option, or if Tenantfails to make such repairs, Landlord may, but need not, make such repairs andreplacements, and Tenant shall pay Landlord the cost thereof, including apercentage of the cost thereof not to exceed five percent (5%) (to be uniformlyestablished for the Building) sufficient to reimburse Landlord for alloverhead, general conditions, fees and other costs or expenses arising fromLandlord’s involvement with such repairs and replacements forthwith upon beingbilled for same.

7.2                                 Landlord’sRepairs. Anything contained in Section 7.1 above to the contrarynotwithstanding, and subject to Articles 11 and 12 of this Lease, Landlordshall repair and maintain the structural portions of the Building, includingthe basic plumbing, heating, ventilating, air conditioning and electricalsystems serving the Building and not located in the Premises; provided,however, if such maintenance and repairs are caused in part or in whole by theact, neglect, fault of or omission of any duty by Tenant, its agents, servants,employees or invitees, Tenant shall pay to Landlord as additional rent, thereasonable cost of such maintenance and repairs. Landlord shall not be liablefor any failure to make any such repairs, or to perform any maintenance. Thereshall be no abatement of rent and no liability of Landlord by reason of anyinjury to or interference with Tenant’s business arising from the making of anyrepairs, alterations or improvements in or to any portion of the Real Property,Building or the Premises or in or to fixtures, appurtenances and equipmenttherein. Tenant hereby waives and releases its right to make repairs atLandlord’s expense under Sections 1941 and 1942 of the California Civil Code;or under any similar law, statute, or ordinance now or hereafter in effect.

**ARTICLE 8**

**ADDITIONS AND ALTERATIONS**

8.1                                 Landlord’sConsent to Alterations. Tenant may not make any improvements, alterations,additions or changes to the Premises (collectively, the “**Alterations**”) without first procuring the priorwritten consent of Landlord to such Alterations, which consent shall berequested by Tenant not less than thirty (30) days prior to the commencementthereof, and which consent shall not be unreasonably withheld by Landlord;provided, however, Landlord may withhold its consent in its sole and absolutediscretion with respect to any Alterations which may affect the structuralcomponents of the Building or the Systems and Equipment or which can be seenfrom outside the Premises. Tenant shall pay for all overhead, generalconditions, fees and other costs and expenses of the Alterations, and shall payto Landlord a Landlord supervision fee often percent (10%) of the cost of theAlterations. The construction of the initial improvements to the Premises shallbe governed by the terms of the Tenant Work Letter and not the terms of thisArticle 8.

8.2                                 Mannerof Construction. Landlord may impose, as a condition of its consent to allAlterations or repairs of the Premises or about the Premises, such requirementsas Landlord in its reasonable discretion may deem desirable, including, but notlimited to, the requirement that Tenant utilize for such purposes onlycontractors, materials, mechanics and materialmen approved by Landlord;provided, however, Landlord may impose such requirements as Landlord maydetermine, in its sole and absolute discretion, with respect to any workaffecting the structural components of the Building or Systems and Equipment(including designating specific contractors to perform such work). Tenant shallconstruct such Alterations and perform such repairs in conformance with any andall applicable rules and regulations of any federal, state, county or municipalcode or ordinance and pursuant to a valid building permit, issued by the cityin which the Real Property is located, and in conformance with Landlord’sconstruction rules and regulations. Landlord’s approval of the plans,specifications and working drawings for Tenant’s Alterations shall create noresponsibility or liability on the part of Landlord for their completeness,design sufficiency, or compliance with all laws, rules and regulations ofgovernmental agencies or authorities. All work with respect to any Alterationsmust be done in a good and workmanlike manner and diligently prosecuted tocompletion to the end that the Premises shall at all times be a complete unitexcept during the period of work. In performing the work of any suchAlterations, Tenant shall have the work performed in such manner as not toobstruct access to the Building or Real Property or the common areas for anyother tenant of the Real Property, and as not to obstruct the business ofLandlord or other tenants of the Real Property, or interfere with the laborforce working at the Real Property. If Tenant makes any Alterations, Tenantagrees to carry “Builder’s All Risk” insurance in an amount approved byLandlord covering the construction of such Alterations, and such otherinsurance as Landlord may require, it being understood and agreed that all ofsuch Alterations shall be insured by Tenant pursuant to Article 10 of thisLease immediately upon completion thereof. In addition, Landlord may, in itsdiscretion, require Tenant to obtain a lien and completion bond or somealternate form of security satisfactory to

10

----

Landlord in an amount sufficient to ensure thelien-free completion of such Alterations and naming Landlord as a co-obligee.Upon completion of any Alterations, Tenant shall (i) cause a Notice ofCompletion to be recorded in the office of the Recorder of the county in whichthe Real Property is located in accordance with Section 3093 of the Civil Codeof the State of California or any successor statute, (ii) deliver to themanagement office of the Real Property a reproducible copy of the “as built”drawings of the Alterations, and (iii) deliver to Landlord evidence of payment,contractors’ affidavits and full and final waivers of all liens for labor,services or materials.

8.3                                 Landlord’sProperty. All Alterations, improvements, fixtures and/or equipment which maybe installed or placed in or about the Premises, and all signs installed in, onor about the Premises, from time to time, shall be at the sole cost of Tenantand shall be and become the property of Landlord. Furthermore, except for theTenant Improvements constructed by Landlord pursuant to the Tenant Work Letter,Landlord may require that Tenant remove any improvement or Alteration upon theexpiration or early termination of the Lease Term, and repair any damage to thePremises and Building caused by such removal. If Tenant fails to complete suchremoval and/or to repair any damage caused by the removal of any Alterations,Landlord may do so and may charge the cost thereof to Tenant.

**ARTICLE 9**

**COVENANT AGAINST LIENS**

Tenant has no authorityor power to cause or permit any lien or encumbrance of any kind whatsoever,whether created by act of Tenant, operation of law or otherwise, to attach toor be placed upon the Real Property, Building or Premises, and any and allliens and encumbrances created by Tenant shall attach to Tenant’s interestonly. Landlord shall have the right at all times to post and keep posted on thePremises any notice which it deems necessary for protection from such liens.Tenant covenants and agrees not to suffer or permit any lien of mechanics ormaterialmen or others to be placed against the Real Property, the Building orthe Premises with respect to work or services claimed to have been performedfor or materials claimed to have been furnished to Tenant or the Premises, and,in case of any such lien attaching or notice of any lien, Tenant covenants andagrees to cause it to be immediately released and removed of record.Notwithstanding anything to the contrary set forth in this Lease, if any suchlien is not released and removed on or before the date notice of such lien isdelivered by Landlord to Tenant, Landlord, at its sole option, may immediatelytake all action necessary to release and remove such lien, without any duty toinvestigate the validity thereof, and all sums, costs and expenses, includingreasonable attorneys’ fees and costs, incurred by Landlord in connection withsuch lien shall be deemed Additional Rent under this Lease and shallimmediately be due and payable by Tenant.

**ARTICLE 10**

**INDEMNIFICATION ANDINSURANCE**

10.1                           Indemnificationand Waiver. Tenant hereby assumes all risk of damage to property and injuryto persons, in, on, or about the Premises from any cause whatsoever and agreesthat Landlord, and its partners and subpartners, and their respective officers,agents, property managers, servants, employees, and independent contractors(collectively, “**Landlord Parties**”)shall not be liable for, and are hereby released from any responsibility for,any damage to property or injury to persons or resulting from the loss of usethereof, which damage or injury is sustained by Tenant or by other personsclaiming through Tenant. Tenant shall indemnify, defend, protect, and holdharmless the Landlord Parties from any and all loss, cost, damage, expense andliability, including without limitation court costs and reasonable attorneys’fees (collectively, “**Claims**”)incurred in connection with or arising from any cause in, on or about thePremises (including, without limitation, Tenant’s installation, placement andremoval of Alterations, improvements, fixtures and/or equipment in, on or aboutthe Premises), and any acts, omissions or negligence of Tenant or of any personclaiming by, through or under Tenant, or of the contractors, agents, servants,employees, licensees or invitees of Tenant or any such person, in, on or aboutthe Premises, the Building and Real Property; provided, however, that Tenant’sindemnity shall, in no event, extend to loss of profits, loss of business orother consequential damages incurred by Landlord or any Landlord Parties.Notwithstanding anything in this Section 10.1 to the contrary, the foregoingassumption of risk, release and indemnity shall not apply to any Claims to theextent resulting from the gross negligence or willful misconduct of Landlord orthe Landlord Parties, and not insured (or required to be insured) by Tenantunder this Lease (collectively, the “**ExcludedClaims**”), and Landlord shall indemnify, protect, defend and holdharmless Tenant and Tenant’s officers, agents and employees (collectively, “**Tenant Parties**”) from and against any suchExcluded Claims, but only to the extent Landlord’s liability is not waived andreleased by Tenant pursuant to the terms of Section 10.4 of this Lease(provided, however, that Landlord’s indemnity shall, in no event, extend toloss of profits, loss of business or other consequential damages incurred byTenant or any Tenant Parties). Each party’s agreement to indemnify the otherpursuant to this Section 10.1 is not intended and shall not relieve anyinsurance carrier of its obligations under policies required to be carried bythe indemnifying party pursuant to the provisions of this Lease. The provisionsof this Section 10.1 shall survive the expiration or sooner termination of thisLease.

10.2                           Tenant’s Compliance with Landlord’s Fire andCasualty Insurance. Tenantshall, at Tenant’s expense, comply as to the Premises with all insurancecompany requirements pertaining to the use of the Premises. If Tenant’s conductor use of the Premises causes any increase in the premium for such insurancepolicies, then Tenant shall reimburse Landlord for any such increase. Tenant,at Tenant’s expense, shall comply with all rules, orders, regulations orrequirements of the American Insurance Association (formerly the National Boardof Fire Underwriters) and with any similar body.

11

----

10.3                           Tenant’sInsurance. Tenant shall maintain the following coverages in the followingamounts.

10.3.1                  CommercialGeneral Liability Insurance covering the insured against claims of bodilyinjury, personal injury and property damage arising out of Tenant’s operations,assumed liabilities or use of the Premises, including a Broad Form CommercialGeneral Liability endorsement covering the insuring provisions of this Leaseand the performance by Tenant of the indemnity agreements set forth in Section10.1 of this Lease, (and with owned and non-owned automobile liabilitycoverage, and liquor liability coverage in the event alcoholic beverages areserved on the Premises) for limits of liability not less than:
| Bodily Injury and          | $5,000,000 each occurrence      |
|----------------------------|---------------------------------|
| Property Damage  Liability | $5,000,000 annual aggregate     |
|                       |                            |
| Personal Injury  Liability | $5,000,000 each occurrence      |
|                       | $5,000,000 annual aggregate     |
|                       | 0% Insured’s participation |

 

10.3.2                  Physical DamageInsurance covering (i) all office furniture, trade fixtures, office equipment,merchandise and all other items of Tenant’s property on the Premises installedby, for, or at the expense of Tenant, (ii) the Tenant Improvements, includingany Tenant Improvements which Landlord permits to be installed above theceiling of the Premises or below the floor of the Premises, and (iii) all otherimprovements, alterations and additions to the Premises, including anyimprovements, alterations or additions installed at Tenant’s request above theceiling of the Premises or below the floor of the Premises. Such insuranceshall be written on a “physical loss or damage” basis under a “special form”policy, for the full replacement cost value new without deduction fordepreciation of the covered items and in amounts that meet any co-insuranceclauses of the policies of insurance and shall include a vandalism andmalicious mischief endorsement, sprinkler leakage coverage and earthquakesprinkler leakage coverage.

10.3.3                  Workers’compensation insurance as required by law.

10.3.4                  Loss-of-income,business interruption and extra-expense insurance in such amounts as willreimburse Tenant for direct and indirect loss of earnings attributable to allperils commonly insured against by prudent tenants or attributable toprevention of loss of access to the Premises or to the Building as a result ofsuch perils.

10.3.5                  Tenant shallcarry comprehensive automobile liability insurance having a combined single limitof not less than Two Million Dollars ($2,000,000.00) per occurrence andinsuring Tenant against liability for claims arising out of ownership,maintenance or use of any owned, hired or non-owned automobiles.

10.3.6                  The minimumlimits of policies of insurance required of Tenant under this Lease shall in noevent limit the liability of Tenant under this Lease. Such insurance shall: (i)name Landlord, and any other party it so specifies, as an additional insured;(ii) specifically cover the liability assumed by Tenant under this Lease,including, but not limited to, Tenant’s obligations under Section 10.1 of thisLease; (iii) be issued by an insurance company having a rating of not less thanAX in Best’s Insurance Guide or which is otherwise acceptable to Landlord andlicensed to do business in the state in which the Real Property is located;(iv) be primary insurance as to all claims thereunder and provide that anyinsurance carried by Landlord is excess and is non-contributing with anyinsurance requirement of Tenant; (v) provide that said insurance shall not becanceled or coverage changed unless thirty (30) days’ prior written noticeshall have been given to Landlord and any mortgagee or ground or underlyinglessor of Landlord; (vi) contain a cross-liability endorsement or severabilityof interest clause reasonably acceptable to Landlord; and (vii) with respect tothe insurance required in Sections 10.3.1, 10.3.2, 10.3.4 and 10.3.5 above,have deductible amounts not exceeding Ten Thousand Dollars ($10,000.00). Tenantshall deliver said policy or policies or certificates thereof to Landlord on orbefore the Lease Commencement Date and at least thirty (30) days before theexpiration dates thereof. If Tenant shall fail to procure such insurance, or todeliver such policies or certificate, within such time periods, Landlord may,at its option, in addition to all of its other rights and remedies under thisLease, and without regard to any notice and cure periods set forth in Section19.1, procure such policies for the account of Tenant, and the cost thereofshall be paid to Landlord as Additional Rent within ten (10) days afterdelivery of bills therefor.

10.4                           Subrogation.Landlord and Tenant agree to have their respective insurance companies issuingproperty damage insurance waive any rights of subrogation that such companiesmay have against Landlord or Tenant, as the case may be, so long as theinsurance carried by Landlord and Tenant, respectively, is not invalidatedthereby. As long as such waivers of subrogation are contained in theirrespective insurance policies, Landlord and Tenant hereby waive any right thateither may have against the other on account of any loss or damage to theirrespective property to the extent such loss or damage is insurable under policiesof insurance for fire and all risk coverage, theft, public liability, or othersimilar insurance.

10.5                           AdditionalInsurance Obligations. Tenant shall carry and maintain during the entireLease Term, at Tenant’s sole cost and expense, increased amounts of theinsurance required to be carried by Tenant pursuant to this Article 10, andsuch other reasonable types of insurance coverage and in such reasonableamounts covering the Premises and Tenant’s operations therein, as may bereasonably requested by Landlord.

12

----

**ARTICLE 11**

**DAMAGE AND DESTRUCTION**

11.1                           Repairof Damage to Premises by Landlord. Tenant shall promptly notify Landlord ofany damage to the Premises resulting from fire or any other casualty. If thePremises or any common areas of the Building or Real Property serving orproviding access to the Premises shall be damaged by fire or other casualty,Landlord shall promptly and diligently, subject to reasonable delays forinsurance adjustment or other matters beyond Landlord’s reasonable control, andsubject to all other terms of this Article 11, restore the base, shell, andcore of the Premises and such common areas. Such restoration shall be tosubstantially the same condition of the base, shell, and core of the Premisesand common areas prior to the casualty, except for modifications required byzoning and building codes and other laws or by the holder of a mortgage on theReal Property, or the lessor of a ground or underlying lease with respect tothe Real Property and/or the Building, or any other modifications to the commonareas deemed desirable by Landlord, provided access to the Premises and anycommon restrooms serving the Premises shall not be materially impaired.Notwithstanding any other provision of this Lease, upon the occurrence of any damageto the Premises, Tenant shall assign to Landlord (or to any party designated byLandlord) all insurance proceeds payable to Tenant under Tenant’s insurancerequired under Section 10.3 of this Lease, and Landlord shall repair any injuryor damage to the tenant improvements and alterations installed in the Premisesand shall return such tenant improvements and alterations to their originalcondition; provided that if the cost of such repair by Landlord exceeds theamount of insurance proceeds received by Landlord from Landlord’s and Tenant’sinsurance carrier, as assigned by Tenant, the cost of such repairs shall bepaid by Tenant to Landlord prior to Landlord’s repair of the damage. Inconnection with such repairs and replacements, Tenant shall, prior to thecommencement of construction, submit to Landlord, for Landlord’s review andapproval, all plans, specifications and working drawings relating thereto, andLandlord shall select the contractors to perform such improvement work.Landlord shall not be liable for any inconvenience or annoyance to Tenant orits visitors, or injury to Tenant’s business resulting in any way from suchdamage or the repair thereof; provided however, that if such fire or othercasualty shall have damaged the Premises or common areas necessary to Tenant’soccupancy, and if such damage is not the result of the negligence or willfulmisconduct of Tenant or Tenant’s employees, contractors, licensees, orinvitees, Landlord shall allow Tenant a proportionate abatement of Base Rentand Tenant’s Share of Operating Expenses, Tax Expenses and Utilities Costs,during the time and to the extent the Premises as a result thereof.

11.2                           Landlord’sOption to Repair. Notwithstanding the terms of Section 11.1 of this Lease,Landlord may elect not to rebuild and/or restore the Premises, the Buildingand/or any other portion of the Real Property and instead terminate this Leaseby notifying Tenant in writing of such termination within sixty (60) days afterthe date of damage, such notice to include a termination date giving Tenantninety (90) days to vacate the Premises, but Landlord may so elect only if theBuilding shall be damaged by fire or other casualty or cause, whether or notthe Premises are affected, and one or more of the following conditions ispresent: (i) repairs cannot reasonably be completed within one hundred twenty(120) days of the date of damage (when such repairs are made without thepayment of overtime or other premiums); (ii) the holder of any mortgage on theReal Property or ground or underlying lessor with respect to the Real Propertyand/or the Building shall require that the insurance proceeds or any portionthereof be used to retire the mortgage debt, or shall terminate the ground orunderlying lease, as the case may be; or (iii) the damage is not fully covered,except for deductible amounts, by Landlord’s insurance policies unless Tenantagrees in writing to pay the amount not covered and timely provides such fundsat the time Landlord requests the same from Tenant to cover such uninsuredcosts. In addition, if the Premises or the Building is destroyed or damaged toany substantial extent during the last twelve (12) months of the Lease Term,then notwithstanding anything contained in this Article 11, Landlord shall havethe option to terminate this Lease by giving written notice to Tenant of theexercise of such option within thirty (30) days after such damage ordestruction, in which event this Lease shall cease and terminate as of the dateof such notice. Upon any such termination of this Lease pursuant to thisSection 11.2, Tenant shall pay the Base Rent and Additional Rent, properlyapportioned up to such date of termination, and both parties hereto shallthereafter be freed and discharged of all further obligations hereunder, exceptas provided for in provisions of this Lease which by their terms survive theexpiration or earlier termination of the Lease Term.

11.3                           Waiverof Statutory Provisions. The provisions of this Lease, including thisArticle 11, constitute an express agreement between Landlord and Tenant withrespect to any and all damage to, or destruction of, all or any part of thePremises, the Building or any other portion of the Real Property, and anystatute or regulation of the state in which the Real Property is located,including, without limitation, Sections 1932(2) and 1933(4) of the CaliforniaCivil Code, with respect to any rights or obligations concerning damage ordestruction in the absence of an express agreement between the parties, and anyother statute or regulation, now or hereafter in effect, shall have noapplication to this Lease or any damage or destruction to all or any part ofthe Premises, the Building or any other portion of the Real Property.

**ARTICLE 12**

**CONDEMNATION**

12.1                           PermanentTaking. If the whole or any part of the Premises, Building or Real Propertyshall be taken by power of eminent domain or condemned by any competentauthority for any public or quasi-public use or purpose, or if any adjacentproperty or street shall be so taken or condemned, or reconfigured or vacatedby such authority in such manner as to require the use, reconstruction orremodeling of any part of the Premises, Building or Real Property, or ifLandlord shall grant a deed or other instrument in lieu of such taking by eminentdomain or condemnation, Landlord shall have the option to terminate this Leaseupon ninety (90) days’ notice, provided such

13

----

notice is given no later than one hundred eighty (180)days after the date of such taking, condemnation, reconfiguration, vacation,deed or other instrument. If more than twenty-five percent (25%) of therentable square feet of the Premises is taken, or if access to the Premises issubstantially impaired, Tenant shall have the option to terminate this Leaseupon ninety (90) days’ notice, provided such notice is given no later than onehundred eighty (180) days after the date of such taking. Landlord shall beentitled to receive the entire award or payment in connection therewith, exceptthat Tenant shall have the right to file any separate claim available to Tenantfor any taking of Tenant’s personal property and fixtures belonging to Tenantand removable by Tenant upon expiration of the Lease Term pursuant to the termsof this Lease, and for moving expenses, so long as such claim does not diminishthe award available to Landlord, its ground lessor with respect to the RealProperty or its mortgagee, and such claim is payable separately to Tenant. AllRent shall be apportioned as of the date of such termination, or the date of suchtaking, whichever shall first occur. If any part of the Premises shall betaken, and this Lease shall not be so terminated, the Base Rent and Tenant’sShare of Operating Expenses, Tax Expenses and Utilities Costs shall beproportionately abated. Tenant hereby waives any and all rights it mightotherwise have pursuant to Section 1265.130 of The California Code of CivilProcedure.

12.2                           TemporaryTaking. Notwithstanding anything to the contrary contained in this Article12, in the event of a temporary taking of all or any portion of the Premisesfor a period of one hundred and eighty (180) days or less, then this Leaseshall not terminate but the Base Rent and Tenant’s Share of Operating Expenses,Tax Expenses and Utilities Costs shall be abated for the period of such takingin proportion to the ratio that the amount of rentable square feet of thePremises taken bears to the total rentable square feet of the Premises.Landlord shall be entitled to receive the entire award made in connection withany such temporary taking.

**ARTICLE 13**

**COVENANT OF QUIETENJOYMENT**

Landlord covenants thatTenant, on paying the Rent, charges for services and other payments hereinreserved and on keeping, observing and performing all the other terms,covenants, conditions, provisions and agreements herein contained on the partof Tenant to be kept, observed and performed, shall, during the Lease Term,peaceably and quietly have, hold and enjoy the Premises subject to the terms,covenants, conditions, provisions and agreements hereof without interference byany persons lawfully claiming by or through Landlord. The foregoing covenant isin lieu of any other covenant express or implied.

**ARTICLE 14**

**ASSIGNMENT AND SUBLETTING**

14.1                           Transfers.Tenant shall not, without the prior written consent of Landlord, assign,mortgage, pledge, hypothecate, encumber, or permit any lien to attach to, orotherwise transfer, this Lease or any interest hereunder, permit any assignmentor other such foregoing transfer of this Lease or any interest hereunder by operationof law, sublet the Premises or any part thereof, or permit the use of thePremises by any persons other than Tenant and its employees (all of theforegoing are hereinafter sometimes referred to collectively as “**Transfers**” and any person to whom anyTransfer is made or sought to be made is hereinafter sometimes referred to as a“**Transferee**”). If Tenant shalldesire Landlord’s consent to any Transfer, Tenant shall notify Landlord inwriting, which notice (the “**Transfer Notice**”)shall include (i) the proposed effective date of the Transfer, which shall notbe less than thirty (30) days nor more than one hundred eighty (180) days afterthe date of delivery of the Transfer Notice, (ii) a description of the portionof the Premises to be transferred (the “**SubjectSpace**”), (iii) all of the terms of the proposed Transfer, the nameand address of the proposed Transferee, and a copy of all existing and/orproposed documentation pertaining to the proposed Transfer, including allexisting operative documents to be executed to evidence such Transfer or theagreements incidental or related to such Transfer, (iv) current financialstatements of the proposed Transferee certified by an officer, partner or ownerthereof, and (v) such other information as Landlord may reasonably require. AnyTransfer made without Landlord’s prior written consent shall, at Landlord’soption, be null, void and of no effect, and shall, at Landlord’s option,constitute a default by Tenant under this Lease. Whether or not Landlord shallgrant consent, within thirty (30) days after written request by Landlord,Tenant shall pay to Landlord Two Thousand Five Hundred Dollars ($2,500.00) toreimburse Landlord for its review and processing fees, and Tenant shall alsoreimburse Landlord for any reasonable legal fees incurred by Landlord inconnection with Tenant’s proposed Transfer.

14.2                           Landlord’sConsent. Landlord shall not unreasonably withhold its consent to anyproposed Transfer of the Subject Space to the Transferee on the terms specifiedin the Transfer Notice. The parties hereby agree that it shall be reasonableunder this Lease and under any applicable law for Landlord to withhold consentto any proposed Transfer where one or more of the following apply, withoutlimitation as to other reasonable grounds for withholding consent:

14.2.1                  The Transfereeis of a character or reputation or engaged in a business which is notconsistent with the quality of the Building or Real Property;

14.2.2                  The Transfereeintends to use the Subject Space for purposes which are not permitted underthis Lease;

14.2.3                  The Transfereeis either a governmental agency or instrumentality thereof;

14

----

14.2.4                  The Transferwill result in more than a reasonable and safe number of occupants per floorwithin the Subject Space;

14.2.5                  The Transfereeis not a party of reasonable financial worth and/or financial stability inlight of the responsibilities involved under the Lease on the date consent isrequested;

14.2.6                  The proposedTransfer would cause Landlord to be in violation of another lease or agreementto which Landlord is a party, or would give an occupant of the Real Property aright to cancel its lease; or

14.2.7                  Either theproposed Transferee, or any person or entity which directly or indirectly,controls, is controlled by, or is under common control with, the proposedTransferee, (i) occupies space in the Project at the time of the request forconsent, (ii) is negotiating with Landlord to lease space in the Project atsuch time, or (iii) has negotiated with Landlord during the twelve (12) monthperiod immediately preceding the Transfer Notice.

If Landlord consents toany Transfer pursuant to the terms of this Section 14.2 (and does not exerciseany recapture rights Landlord may have under Section 14.4 of this Lease),Tenant may within six (6) months after Landlord’s consent, but not later thanthe expiration of said six-month period, enter into such Transfer of thePremises or portion thereof, upon substantially the same terms and conditionsas are set forth in the Transfer Notice furnished by Tenant to Landlordpursuant to Section 14.1 of this Lease, provided that if there are any changesin the terms and conditions from those specified in the Transfer Notice (i)such that Landlord would initially have been entitled to refuse its consent tosuch Transfer under this Section 14.2, or (ii) which would cause the proposedTransfer to be more favorable to the Transferee than the terms set forth inTenant’s original Transfer Notice, Tenant shall again submit the Transfer toLandlord for its approval and other action under this Article 14 (includingLandlord’s right of recapture, if any, under Section 14.4 of this Lease).

14.3                           TransferPremium. If Landlord consents to a Transfer, as a condition thereto whichthe parties hereby agree is reasonable, Tenant shall pay to Landlord fiftypercent (50%) of any “Transfer Premium,” as that term is defined in thisSection 14.3, received by Tenant from such Transferee. “**Transfer Premium**” shall mean all rent,additional rent or other consideration payable by such Transferee in excess ofthe Rent and Additional Rent payable by Tenant under this Lease on a perrentable square foot basis if less than all of the Premises is transferred,after deducting the reasonable expenses incurred by Tenant for (i) any reasonablechanges, alterations and improvements to the Premises in connection with theTransfer (but only to the extent approved by Landlord), and (ii) any reasonablebrokerage commissions in connection with the Transfer (collectively, the “**Subleasing Costs**”). “Transfer Premium”shall also include, but not be limited to, key money and bonus money paid byTransferee to Tenant in connection with such Transfer, and any payment inexcess of fair market value for services rendered by Tenant to Transferee orfor assets, fixtures, inventory, equipment, or furniture transferred by Tenantto Transferee in connection with such Transfer.

14.4                           Landlord’sOption as to Subject Space. Notwithstanding anything to the contrarycontained in this Article 14, Landlord shall have the option, by giving writtennotice to Tenant within thirty (30) days after receipt of any Transfer Notice,to recapture the Subject Space; provided, however, in no event shall thisSection 14.4 apply to a transfer pursuant to Section 14.7 below. Such recapturenotice shall cancel and terminate this Lease with respect to the Subject Spaceas of the date stated in the Transfer Notice as the effective date of theproposed Transfer until the last day of the term of the Transfer as set forthin the Transfer Notice. If this Lease shall be canceled with respect to lessthan the entire Premises, the Rent reserved herein shall be prorated on thebasis of the number of rentable square feet retained by Tenant in proportion tothe number of rentable square feet contained in the Premises, and this Lease asso amended shall continue thereafter in full force and effect, and upon requestof either party, the parties shall execute written confirmation of the same. IfLandlord declines, or fails to elect in a timely manner to recapture theSubject Space under this Section 14.4, then, provided Landlord has consented tothe proposed Transfer, Tenant shall be entitled to proceed to transfer theSubject Space to the proposed Transferee, subject to provisions of the lastparagraph of Section 14.2 of this Lease.

14.5                           Effectof Transfer. If Landlord consents to a Transfer, (i) the terms andconditions of this Lease shall in no way be deemed to have been waived ormodified, (ii) such consent shall not be deemed consent to any further Transferby either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord,promptly after execution, an original executed copy of all documentationpertaining to the Transfer in form reasonably acceptable to Landlord, and (iv)no Transfer relating to this Lease or agreement entered into with respectthereto, whether with or without Landlord’s consent, shall relieve Tenant orany guarantor of the Lease from liability under this Lease. Landlord or itsauthorized representatives shall have the right at all reasonable times toaudit the books, records and papers of Tenant relating to any Transfer, andshall have the right to make copies thereof. If the Transfer Premium respectingany Transfer shall be found understated, Tenant shall, within thirty (30) daysafter demand, pay the deficiency and Landlord’s costs of such audit.

14.6                           AdditionalTransfers. Except as otherwise provided in Section 14.7 below, for purposesof this Lease, the term “Transfer” shall also include (i) if Tenant is apartnership, the withdrawal or change, voluntary, involuntary or by operationof law, of fifty percent (50%) or more of the partners, or transfer oftwenty-five percent or more ofpartnership interests, within a twelve (12)-month period, or the dissolution ofthe partnership without immediate reconstitution thereof, and (ii) ifTenant is a closely held corporation (i.e., whose stock is not publicly heldand not traded through an exchange or over the counter), (A) the dissolution,merger, consolidation or other reorganization of Tenant, (B) the sale or othertransfer of more than an aggregate of fifty percent (50%) of the voting sharesof Tenant (other than to immediate family members by reason of gift or death),within a twelve (12)-month period, or (C) the sale, mortgage, hypothecation orpledge of more than an aggregate of fifty percent (50%) of the value of theunencumbered assets of Tenant within a twelve (12) month period.

15

----

14.7                           AffiliatedCompanies/Restructuring of Business Organization. The assignment orsubletting by Tenant of all or any portion of this Lease or the Premises to (i)a parent or subsidiary of Tenant, or (ii) any person or entity which controls,is controlled by or under common control with Tenant, or (iii) any entity whichpurchases all or substantially all of the assets of Tenant, or (iv) any entityinto which Tenant is merged or consolidated (all such persons or entitiesdescribed in (i), (ii), (iii) and (iv) being sometimes hereinafter referred toas “Affiliates”) shall not be deemed a Transfer under this Article 14 (andshall not entitle Landlord to exercise its recapture right pursuant to Section14.4 above), provided that:

14.7.1                  Any suchAffiliate was not formed as a subterfuge to avoid the obligations of thisArticle 14;

14.7.2                  Tenant givesLandlord prior written notice of any such assignment or sublease to anAffiliate;

14.7.3                  Any suchAffiliate has, as of the effective date of any such assignment or sublease, atangible net worth and net income, in the aggregate, computed in accordancewith generally accepted accounting principles (but excluding goodwill as anasset), sufficient, in Landlord’s reasonable good faith opinion, to meet theobligations imposed by the assignment or sublease;

14.7.4                  Any suchassignment or sublease shall be subject to all of the terms and provisions ofthis Lease, and such assignee or sublessee shall assume, in a written documentreasonably satisfactory to Landlord and delivered to Landlord upon or prior tothe effective date of such assignment or sublease, all the obligations ofTenant under this Lease; and

14.7.5                  Tenant and anyguarantor shall remain fully liable for all obligations to be performed byTenant under this Lease.

**ARTICLE 15**

**SURRENDER; OWNERSHIP ANDREMOVAL OF TRADE FIXTURES**

15.1                           Surrenderof Premises. No act or thing done by Landlord or any agent or employee ofLandlord during the Lease Term shall be deemed to constitute an acceptance byLandlord of a surrender of the Premises unless such intent is specificallyacknowledged in a writing signed by Landlord. The delivery of keys to thePremises to Landlord or any agent or employee of Landlord shall not constitutea surrender of the Premises or effect a termination of this Lease, whether ornot the keys are thereafter retained by Landlord, and notwithstanding such deliveryTenant shall be entitled to the return of such keys at any reasonable time uponrequest until this Lease shall have been properly terminated. The voluntary orother surrender of this Lease by Tenant, whether accepted by Landlord or not,or a mutual termination hereof, shall not work a merger, and at the option ofLandlord shall operate as an assignment to Landlord of all subleases orsubtenancies affecting the Premises.

15.2                           Removalof Tenant Property by Tenant. Upon the expiration of the Lease Term, orupon any earlier termination of this Lease, Tenant shall, subject to theprovisions of this Article 15, quit and surrender possession of the Premises toLandlord in as good order and condition as when Tenant took possession and asthereafter improved by Landlord and/or Tenant, reasonable wear and tear andrepairs which are specifically made the responsibility of Landlord hereunderexcepted. Upon such expiration or termination, Tenant shall, without expense toLandlord, remove or cause to be removed from the Premises all debris andrubbish, and such items of furniture, equipment, free-standing cabinet work,and other articles of personal property owned by Tenant or installed or placedby Tenant at its expense in the Premises, and such similar articles of anyother persons claiming under Tenant, as Landlord may, in its sole discretion,require to be removed, and Tenant shall repair at its own expense all damage tothe Premises and Building resulting from such removal.

**ARTICLE 16**

**HOLDING OVER**

If Tenant holds overafter the expiration of the Lease Term hereof, with or without the express orimplied consent of Landlord, such tenancy shall be from month-to-month only,and shall not constitute a renewal hereof or an extension for any further term,and in such case Base Rent shall be payable at a monthly rate equal to twohundred percent (200%) of the Base Rent applicable during the last rentalperiod of the Lease Term under this Lease. Such month-to-month tenancy shall besubject to every other term, covenant and agreement contained herein. Landlordhereby expressly reserves the right to require Tenant to surrender possessionof the Premises to Landlord as provided in this Lease upon the expiration orother termination of this Lease. The provisions of this Article 16 shall not bedeemed to limit or constitute a waiver of any other rights or remedies ofLandlord provided herein or at law. If Tenant fails to surrender the Premisesupon the termination or expiration of this Lease, in addition to any otherliabilities to Landlord accruing therefrom, Tenant shall protect, defend,indemnify and hold Landlord harmless from all loss, costs (including reasonableattorneys’ fees) and liability resulting from such failure, including, withoutlimiting the generality of the foregoing, any claims made by any succeedingtenant founded upon such failure to surrender, and any lost profits to Landlordresulting therefrom. Notwithstanding anything set forth in this Article 16 tothe contrary. Tenant shall have the one-time right to extend the initial LeaseTerm for a period of up to three (3) months thereafter (“**Temporary Extension Term**”) by deliveringwritten notice of the exercise of such right at least three (3) months prior tothe expiration of the initial Lease Term, which notice shall specify the

16

----

period of the Temporary Extension Term Tenant shallselect (which period shall be not less than one (1) month nor more than three(3) months), and provided that all of the following conditions are satisfied:(i) Tenant shall not have exercised its renewal right under the ExtensionOption Rider; (ii) at Landlord’s option, in addition to all remedies availableto Landlord under this Lease, at law or in equity, Tenant is not in defaultunder this Lease (after expiration of any applicable notice and cure period) asof the date Tenant delivers such notice to Landlord or the commencement of theTemporary Extension Term; and (iii) such renewal right is personal to theoriginal Tenant executing this Lease (“**OriginalTenant**”) and any assignee that is an Affiliate of the OriginalTenant’s entire interest in this Lease pursuant to Section 14.7 of this Lease,and may only be exercised by the Original Tenant or such Affiliate assignee, asthe case may be (and not by any other assignee, sublessee or other transfereeof Original Tenant’s interest in this Lease). If Tenant timely exercises suchrenewal right, all of the terms and conditions of this Lease shall apply duringthe Temporary Extension Term, provided, however, that (i) the monthly Base Rentpayable by Tenant during the Temporary Extension Term shall be equal to onehundred fifty percent (150%) of monthly Base Rent applicable during the lastrental period of the Lease Term, and (ii) Tenant shall reimburse to Landlordall actual, documented and reasonable legal fees and costs incurred inconnection with the documentation of such Temporary Extension Term

**ARTICLE 17**

**ESTOPPEL CERTIFICATES**

Within ten (10) daysfollowing a request in writing by Landlord, Tenant shall execute and deliver toLandlord an estoppel certificate, which shall be substantially in the form of **Exhibit E,** attached hereto (or suchother form as may be required by any prospective mortgagee or purchaser of theProject, or any portion thereof) indicating therein any exceptions thereto thatmay exist at that time, and shall also contain any other information reasonablyrequested by Landlord or Landlord’s mortgagee or prospective mortgagee orpurchasers Tenant shall execute and deliver whatever other instruments may bereasonably required for such purposes. Failure of Tenant to execute and deliversuch estoppel certificate within such ten (10) day period shall constitute anacknowledgment by Tenant that statements included in the estoppel certificatedelivered to Tenant by Landlord are true and correct, without exception. Inaddition, at any time during the Lease Term, Landlord may require Tenant toprovide Landlord with a current financial statement and financial statements ofthe two (2) years prior to the current financial statement year. Suchstatements shall be prepared in accordance with generally accepted accountingprinciples and, if such is the normal practice of Tenant, shall be audited byan independent certified public accountant.

**ARTICLE 18**

**SUBORDINATION**

18.1                           Subordination.This Lease is subject and subordinate to all present and future ground orunderlying leases of the Real Property and to the lien of any mortgages ortrust deeds, now or hereafter in force against the Real Property, if any, andto all renewals, extensions, modifications, consolidations and replacementsthereof, and to all advances made or hereafter to be made upon the security ofsuch mortgages or mist deeds, unless the holders of such mortgages or trustdeeds, or the lessors under such ground lease or underlying leases, require inwriting that this Lease be superior thereto. Tenant covenants and agrees in theevent any proceedings are brought for the foreclosure of any such mortgage, orif any ground or underlying lease is terminated, to attorn, without any deductionsor set-offs whatsoever, to the purchaser upon any such foreclosure sale, or tothe lessor of such ground or underlying lease, as the case may be, if sorequested to do so by such purchaser or lessor and/or if required to do sopursuant to any SNDA executed by the Current Lender as defined in and pursuantto Section 18.2 below, and to recognize such purchaser or lessor as the lessorunder this Lease. Tenant shall, within five (5) days of request by Landlord,execute such further instruments or assurances as Landlord may reasonably deemnecessary to evidence or confirm the subordination or superiority of this Leaseto any such mortgages, trust deeds, ground leases or underlying leases. Tenanthereby irrevocably authorizes Landlord to execute and deliver in the name ofTenant any such instrument or instruments if Tenant fails to do so, providedthat such authorization shall in no way relieve Tenant from the obligation ofexecuting such instruments of subordination or superiority. Tenant waives theprovisions of any current or future statute, rule or law which may give orpurport to give Tenant any right or election to terminate or otherwiseadversely affect this Lease and the obligations of the Tenant hereunder in theevent of any foreclosure proceeding or sale.

18.2                           ExistingAgreement. Tenant hereby acknowledges that as of the date of execution ofthis Lease, there is a deed of trust encumbering the Real Property in favor ofCorns Bank, N.A. (the “**Current Lender**”).Concurrently with Tenant’s execution of this Lease, Tenant shall sign, notarizeand deliver to Landlord a subordination, non-disturbance and attornmentagreement substantially in the form of **ExhibitE** attached hereto (the “**SNDA**”).Landlord shall endeavor to cause the Current Lender to execute, notarize anddeliver to Tenant the SNDA, but Landlord shall not be in default under thisLease and shall have no liability to Tenant whatsoever if Landlord is unable toobtain and deliver to Tenant the SNDA executed by the Current Lender.

17

----

**ARTICLE 19**

**TENANT’S DEFAULTS;LANDLORD’S REMEDIES**

19.1                           Eventsof Default by Tenant. All covenants and agreements to be kept or performedby Tenant under this Lease shall be performed by Tenant at Tenant’s sole costand expense and without any reduction of Rent. The occurrence of any of thefollowing shall constitute a default of this Lease by Tenant:

19.1.1                  Any failure byTenant to pay any Rent or any other charge required to be paid under thisLease, or any part thereof, when due, where such failure continues for four (4)calendar days after written notice thereof by Landlord to Tenant; provided,however, that any such notice shall be in lieu of, and not in addition to, anynotice required under California Code of Civil Procedure Section 1161 or anysimilar or successor law; or

19.1.2                  Any failure byTenant to observe or perform any other provision, covenant or condition of thisLease to be observed or performed by Tenant where such failure continues forfifteen (15) days after written notice thereof from Landlord to Tenant; providedhowever, that any such notice shall be in lieu of, and not in addition to, anynotice required under California Code of Civil Procedure Section 1161 or anysimilar or successor law; and provided further that if the nature of suchdefault is such that the same cannot reasonably be cured within a fifteen(15)-day period, Tenant shall not be deemed to be in default if it diligentlycommences such cure within such period and thereafter diligently proceeds torectify and cure said default as soon as possible; or

19.1.3                  Abandonment orvacation of the Premises by Tenant. Abandonment is herein defined to include,but is not limited to, any absence by Tenant from the Premises for three (3)business days or longer while in default of any provision of this Lease.

19.2                           Landlord’sRemedies Upon Default. Upon the occurrence of any such default by Tenant,Landlord shall have, in addition to any other remedies available to Landlord atlaw or in equity, the option to pursue any one or more of the followingremedies, each and all of which shall be cumulative and nonexclusive, withoutany notice or demand whatsoever.

19.2.1                  Terminate thisLease, in which event Tenant shall immediately surrender the Premises toLandlord, and if Tenant fails to do so, Landlord may, without prejudice to anyother remedy which it may have for possession or arrearages in rent, enter uponand take possession of the Premises and expel or remove Tenant and any otherperson who may be occupying the Premises or any part thereof, without beingliable for prosecution or any claim or damages therefor; and Landlord mayrecover from Tenant the following:

(i)                                     Theworth at the time of award of any unpaid rent which has been earned at the timeof such termination; plus

(ii)                                  Theworth at the time of award of the amount by which the unpaid rent which wouldhave been earned after termination until the time of award exceeds the amountof such rental loss that Tenant proves could have been reasonably avoided; plus

(iii)                               Theworth at the time of award of the amount by which the unpaid rent for thebalance of the Lease Term after the time of award exceeds the amount of suchrental loss that Tenant proves could have been reasonably avoided; plus

(iv)                              Anyother amount necessary to compensate Landlord for all the detriment proximatelycaused by Tenant’s failure to perform its obligations under this Lease or whichin the ordinary course of things would be likely to result therefrom,specifically including but not limited to, brokerage commissions andadvertising expenses incurred, expenses of remodeling the Premises or anyportion thereof for a new tenant, whether for the same or a different use, andany special concessions made to obtain a new tenant; and

(v)                                 AtLandlord’s election, such other amounts in addition to or in lieu of theforegoing as may be permitted from time to time by applicable law.

The term “rent” as used in this Section 19.2 shall bedeemed to be and to mean all sums of every nature required to be paid by Tenantpursuant to the terms of this Lease, whether to Landlord or to others. As usedin Sections 19.2.1(i) and (ii), above, the “worth at the time of award” shallbe computed by allowing interest at the Interest Rate set forth in Section 4.5of this Lease. As used in Section 19.2.1(iii) above, the “worth at the time ofaward” shall be computed by discounting such amount at the discount rate of theFederal Reserve Bank of San Francisco at the time of award plus one percent(1%).

19.2.2                  Landlord shallhave the remedy described in California Civil Code Section 1951.4 (lessor maycontinue lease in effect after lessee’s breach and abandonment and recover rentas it becomes due, if lessee has the right to sublet or assign, subject only toreasonable limitations). Accordingly, if Landlord does not elect to terminatethis Lease on account of any default by Tenant, Landlord may, from time totime, without terminating this Lease, enforce all of its rights and remediesunder this Lease, including the right to recover all rent as it becomes due.

19.2.3                  Landlord may,but shall not be obligated to, make any such payment or perform or otherwisecure any such obligation, provision, covenant or condition on Tenant’s part tobe observed or performed (and may enter the Premises for such purposes). In theevent of Tenant’s failure to perform any of its obligations or

18

----

covenants under this Lease, and such failure toperform poses a material risk of injury or harm to persons or damage to or lossof property, then Landlord shall have the right to cure or otherwise performsuch covenant or obligation at any time after such failure to perform byTenant, whether or not any such notice or cure period set forth in Section 19.1above has expired. Any such actions undertaken by Landlord pursuant to theforegoing provisions of this Section 19.2.3 shall not be deemed a waiver ofLandlord’s rights and remedies as a result of Tenant’s failure to perform andshall not release Tenant from any of its obligations under this Lease.

19.3                           Paymentby Tenant. Tenant shall pay to Landlord, within fifteen (15) days afterdelivery by Landlord to Tenant of statements therefor: (i) sums equal toexpenditures reasonably made and obligations incurred by Landlord in connectionwith Landlord’s performance or cure of any of Tenant’s obligations pursuant tothe provisions of Section 19.2.3 above; and (ii) sums equal to all expendituresmade and obligations incurred by Landlord in collecting or attempting tocollect the Rent or in enforcing or attempting to enforce any rights ofLandlord under this Lease or pursuant to law, including, without limitation,all legal fees and other amounts so expended. Tenant’s obligations under thisSection 19.3 shall survive the expiration or sooner termination of the LeaseTerm.

19.4                           Sublesseesof Tenant. Whether or not Landlord elects to terminate this Lease onaccount of any default by Tenant, as set forth in this Article 19, Landlordshall have the right to terminate any and all subleases, licenses, concessionsor other consensual arrangements for possession entered into by Tenant andaffecting the Premises or may, in Landlord’s sole discretion, succeed to Tenant’sinterest in such subleases, licenses, concessions or arrangements. In the eventof Landlord’s election to succeed to Tenant’s interest in any such subleases,licenses, concessions or arrangements, Tenant shall, as of the date of noticeby Landlord of such election, have no further right to or interest in the rentor other consideration receivable thereunder.

19.5                           Waiverof Default. No waiver by Landlord of any violation or breach by Tenant ofany of the terms, provisions and covenants herein contained shall be deemed orconstrued to constitute a waiver of any other or later violation or breach byTenant of the same or any other of the terms, provisions, and covenants hereincontained. Forbearance by Landlord in enforcement of one or more of theremedies herein provided upon a default by Tenant shall not be deemed orconstrued to constitute a waiver of such default. The acceptance of any Renthereunder by Landlord following the occurrence of any default, whether or notknown to Landlord, shall not be deemed a waiver of any such default, exceptonly a default in the payment of the Rent so accepted.

19.6                           Effortsto Relet. For the purposes of this Article 19, Tenant’s right to possessionshall not be deemed to have been terminated by efforts of Landlord to relet thePremises, by its acts of maintenance or preservation with respect to thePremises, or by appointment of a receiver to protect Landlord’s interestshereunder. The foregoing enumeration is not exhaustive, but merely illustrativeof acts which may be performed by Landlord without terminating Tenant’s rightto possession.

**ARTICLE 20**

**SECURITY DEPOSIT**

Concurrent with Tenant’sexecution of this Lease, Tenant shall deposit with Landlord a security deposit(the “**Security Deposit**”) in theamount set forth in Section 10 of the Summary. The Security Deposit shall beheld by Landlord as security for the faithful performance by Tenant of all theterms, covenants, and conditions of this Lease to be kept and performed byTenant during the Lease Term. If Tenant defaults with respect to any provisionsof this Lease, including, but not limited to, the provisions relating to thepayment of Rent, Landlord may, but shall not be required to, use, apply orretain all or any part of the Security Deposit for the payment of any Rent orany other sum in default, or for the payment of any amount that Landlord mayspend or become obligated to spend by reason of Tenant’s default, or tocompensate Landlord for any other loss or damage that Landlord may suffer byreason of Tenant’s default. If any portion of the Security Deposit is so usedor applied, Tenant shall, within five (5) days after written demand therefor,deposit cash with Landlord in an amount sufficient to restore the SecurityDeposit to its original amount, and Tenant’s failure to do so shall be adefault under this Lease. If Tenant shall fully and faithfully perform everyprovision of this Lease to be performed by it, the Security Deposit, or anybalance thereof, shall be returned to Tenant, or, at Landlord’s option, to thelast assignee of Tenant’s interest hereunder, within sixty (60) days followingthe expiration of the Lease Term. Tenant shall not be entitled to any intereston the Security Deposit. Tenant hereby waives the provisions of Section 1950.7of the California Civil Code, and all other provisions of law, now or hereafterin force, which provide that Landlord may claim from a security deposit onlythose sums reasonably necessary to remedy defaults in the payment of rent, torepair damage caused by Tenant or to clean the Premises, it being agreed thatLandlord may, in addition, claim those sums reasonably necessary to compensateLandlord for any other loss or damage, foreseeable or unforeseeable, caused bythe act or omission of Tenant or any officer, employee, agent or invitee ofTenant.

**ARTICLE 21**

**COMPLIANCE WITH LAW**

Tenant shall not doanything or suffer anything to be done in or about the Premises which will inany way conflict with any applicable laws now in force or which may hereafterbe enacted or promulgated. At its sole cost and expense, Tenant shall promptlycomply and promptly cause the Premises to comply with all such applicable laws,including, without limitation, the making of any improvements and alterationsto the Premises (including those considered to be capital improvements) andthose laws pertaining to Hazardous Materials; provided, however, that

19

----

the making of structural changes to the Building orchanges to the common areas of the Building or Real Property which are notnecessitated by any improvements and Alterations to the Premises installed byor on behalf of Tenant, by any specific act or negligence of Tenant or Tenant’sagents, employees, licensees or invitees, and/or by Tenant’s specific manner oruse of the Premises, shall be performed by Landlord and the cost thereof shallbe included in Operating Expenses except to the extent specifically excluded inSection 4.2.4 of this Lease. In addition, Tenant shall fully comply with allpresent or future programs intended to manage parking, transportation ortraffic in and around the Real Property, and in connection therewith, Tenantshall take responsible action for the transportation planning and management ofall employees located at the Premises by working directly with Landlord, anygovernmental transportation management organization or any othertransportation-related committees or entities. The judgment of any court ofcompetent jurisdiction or the admission of Tenant in any judicial action,regardless of whether Landlord is a party thereto, that Tenant has violated anyof said governmental measures, shall be conclusive of that fact as betweenLandlord and Tenant.

**ARTICLE 22**

**ENTRY BY LANDLORD**

Landlord reserves the rightat all reasonable times and upon reasonable notice to Tenant to enter thePremises to: (i) inspect them; (ii) show the Premises to prospectivepurchasers, mortgagees or tenants, or to the ground or underlying lessors;(iii) to post notices of nonresponsibility; or (iv) alter, improve or repairthe Premises or the Building if necessary to comply with current building codesor other applicable laws, or for structural alterations, repairs orimprovements to the Building, or as Landlord may otherwise reasonably desire ordeem necessary. Notwithstanding anything to the contrary contained in thisArticle 22, Landlord may enter the Premises at any time, without notice toTenant, in emergency situations and/or to perform janitorial or other servicesrequired of Landlord pursuant to this Lease. Subject to Section 6.4 above, anysuch entries shall be without the abatement of Rent and shall include the rightto take such reasonable steps as required to accomplish the stated purposes;provided, however, that Landlord agrees to use commercially reasonable effortsto minimize any material, adverse interference with Tenant’s normal businessfunctions within the Premises during any such entry in the Premises. Tenanthereby waives any claims for damages or for any injuries or inconvenience to orinterference with Tenant’s business, lost profits, any loss of occupancy orquiet enjoyment of the Premises, and any other loss occasioned thereby. Foreach of the above purposes, Landlord shall at all times have a key with which tounlock all the doors in the Premises, excluding Tenant’s vaults, safes andspecial security areas designated in advance by Tenant. In an emergency,Landlord shall have the right to enter without notice and use any means thatLandlord may deem proper to open the doors in and to the Premises. Any entryinto the Premises in the manner hereinbefore described shall not be deemed tobe a forcible or unlawful entry into, or a detainer of, the Premises, or anactual or constructive eviction of Tenant from any portion of the Premises.

**ARTICLE 23**

**TENANT PARKING**

Tenant shall rentthroughout the Lease Term the number of unreserved parking passes set forth inSection 11 of the Summary, located in those portions of the Parking Facilitiesas may be designated by Landlord from time to time. Tenant shall pay toLandlord for the use of such parking passes, on a monthly basis, the prevailingrate charged from time to time by Landlord or Landlord’s parking operator forparking passes in the Parking Facilities where such parking passes are located.Notwithstanding the foregoing to the contrary, Tenant shall not be required topay any parking charges for the use of Tenant’s unreserved, uncovered parkingpasses during the initial Lease Term (but Tenant shall be liable for any tax orother charges described below), but during the Option Term (if exercisedpursuant to the Extension Option Rider), Tenant shall pay to Landlord for theuse of such unreserved, uncovered parking passes, on a monthly basis, theprevailing rate charged from time to time by Landlord or Landlord’s parkingoperator for unreserved, uncovered parking passes in the Parking Facilitieswhere such unreserved, uncovered parking passes are located. Tenant’s continuedright to use the parking passes is conditioned upon Tenant abiding by all rulesand regulations which are prescribed from time to time for the orderlyoperation and use of the Parking Facilities and upon Tenant’s cooperation inseeing that Tenant’s employees and visitors also comply with such rules andregulations. In addition, Landlord may assign any parking spaces and/or makeall or a portion of such spaces reserved or institute an attendant-assistedtandem parking program and/or valet parking program if Landlord determines inits sole discretion that such is necessary or desirable for orderly andefficient parking. Landlord specifically reserves the right, from time to time,to change the size, configuration, design, layout, location and all otheraspects of the Parking Facilities (including, but not limited to, the locationof Tenant’s parking passes), and Tenant acknowledges and agrees that Landlord,from time to time, may, without incurring any liability to Tenant and withoutany abatement of Rent under this Lease temporarily close-off or restrict accessto the Parking Facilities, or temporarily relocate Tenant’s parking spaces toother parking structures and/or surface parking areas within a reasonabledistance from the Parking Facilities, for purposes of permitting orfacilitating any such construction, alteration or improvements or toaccommodate or facilitate renovation, alteration, construction or othermodification of other improvements or structures located on the Real Property.Landlord may delegate its responsibilities hereunder to a parking operator inwhich case such parking operator shall have all the rights of controlattributed hereby to Landlord. The parking rates charged by Landlord for Tenant’sparking passes shall be exclusive of any parking tax or other charges imposedby governmental authorities in connection with the use of such parking, whichtaxes and/or charges shall be paid directly by Tenant or the parking users, or,if directly imposed against Landlord, Tenant shall reimburse Landlord for allsuch taxes and/or charges within ten (10) days after Tenant’s receipt of theinvoice from Landlord. The parking passes provided to Tenant pursuant to thisArticle 23 are provided solely for use by Tenant’s own personnel and suchpasses may not be transferred, assigned,

20

----

subleased or otherwise alienated by Tenant withoutLandlord’s prior approval. Landlord agrees to provide at least ten (10) visitorparking spaces in the location depicted on **ExhibitG**, which visitor parking spaces shall be provided on anon-exclusive basis (vis-a-vis Tenant and the other tenants of the Project).

**ARTICLE 24**

**MISCELLANEOUS PROVISIONS**

24.1                           Terms;Captions. The necessary grammatical changes required to make the provisionshereof apply either to corporations or partnerships or individuals, men orwomen, as the case may require, shall in all cases be assumed as though in eachcase fully expressed. The captions of Articles and Sections are for convenienceonly and shall not be deemed to limit, construe, affect or alter the meaning ofsuch Articles and Sections.

24.2                           BindingEffect. Each of the provisions of this Lease shall extend to and shall, asthe case may require, bind or inure to the benefit not only of Landlord and ofTenant, but also of their respective successors or assigns, provided thisclause shall not permit any assignment by Tenant contrary to the provisions ofArticle 14 of this Lease.

24.3                           NoWaiver. No waiver of any provision of this Lease shall be implied by anyfailure of a party to enforce any remedy on account of the violation of suchprovision, even if such violation shall continue or be repeated subsequently,any waiver by a party of any provision of this Lease may only be in writing,and no express waiver shall affect any provision other than the one specifiedin such waiver and that one only for the time and in the manner specificallystated. No receipt of monies by Landlord from Tenant after the termination ofthis Lease shall in any way alter the length of the Lease Term or of Tenant’sright of possession hereunder or after the giving of any notice shallreinstate, continue or extend the Lease Term or affect any notice given Tenantprior to the receipt of such monies, it being agreed that after the service ofnotice or the commencement of a suit or after final judgment for possession ofthe Premises, Landlord may receive and collect any Rent due, and the payment ofsaid Rent shall not waive or affect said notice, suit or judgment.

24.4                           Modificationof Lease. Should any current or prospective mortgagee or ground lessor forthe Real Property require a modification or modifications of this Lease, whichmodification or modifications will not cause an increased cost or expense toTenant or in any other way materially and adversely change the rights andobligations of Tenant hereunder, then and in such event, Tenant agrees thatthis Lease may be so modified and agrees to execute whatever documents arerequired therefor and deliver the same to Landlord within ten (10) daysfollowing the request therefor. Should Landlord or any such current orprospective mortgagee or ground lessor require execution of a short form ofLease for recording, containing, among other customary provisions, the names ofthe parties, a description of the Premises and the Lease Term, Tenant agrees toexecute such short form of Lease and to deliver the same to Landlord within ten(10) days following the request therefor.

24.5                           Transferof Landlord’s Interest. Tenant acknowledges that Landlord has the right totransfer all or any portion of its interest in the Real Property, the Buildingand/or in this Lease, and Tenant agrees that in the event of any such transfer,Landlord shall automatically be released from all liability under this Leasearising after the date of the Transfer and Tenant agrees to look solely to suchtransferee for the performance of Landlord’s obligations hereunder after thedate of transfer. The liability of any transferee of Landlord shall be limitedto the interest of such transferee in the Real Property and such transfereeshall be without personal liability under this Lease, and Tenant herebyexpressly waives and releases such personal liability on behalf of itself andall persons claiming by, through or under Tenant. Tenant further acknowledgesthat Landlord may assign its interest in this Lease to a mortgage lender asadditional security and agrees that such an assignment shall not releaseLandlord from its obligations hereunder and that Tenant shall continue to lookto Landlord for the performance of its obligations hereunder.

24.6                           ProhibitionAgainst Recording. Except as provided in Section 24.4 of this Lease,neither this Lease, nor any memorandum, affidavit or other writing with respectthereto, shall be recorded by Tenant or by anyone acting through, under or onbehalf of Tenant, and the recording thereof in violation of this provisionshall make this Lease null and void at Landlord’s election.

24.7                           Landlord’sTitle; Air Rights. Landlord’s title is and always shall be paramount to thetitle of Tenant. Nothing herein contained shall empower Tenant to do any actwhich can, shall or may encumber the title of Landlord. No rights to any viewor to light or air over any property, whether belonging to Landlord or anyother person, are granted to Tenant by this Lease.

24.8                           Tenant’sSigns.

24.8.1                  InteriorSigns. Tenant shall be entitled, at Landlord’s initial cost and expense, to(i) one (1) identification sign on or near the entry doors of the Premises, and(ii) for multi-tenant floors, one (1) identification or directional sign, asdesignated by Landlord, in the elevator lobby on the floor on which thePremises are located; provided, however, that any Landlord approved changes tosuch identification signage shall be at Tenant’s sole cost and expense. Suchsigns shall be installed by a signage contractor designated by Landlord. Thelocation, quality, design, style, lighting and size of such signs shall beconsistent with the Landlord’s Building standard signage program and shall besubject to Landlord’s prior written approval, in its reasonable discretion.Upon the expiration or earlier termination of this Lease, Tenant shall beresponsible, at its sole cost and expense, for the removal of such signage andthe repair of all damage to the Building caused by such removal. Except forsuch identification signs, Tenant may not install any signs on the exterior orroof of the Building or the common areas of the Building or the Real Property.Any signs, window coverings, or blinds (even if the same are located behind the

21

----

Landlord approved window coverings for the Building),or other items visible from the exterior of the Premises or Building aresubject to the prior approval of Landlord, in its sole and absolute discretion.

24.8.2                  Monument Sign.Subject to the approval of all applicable governmental and quasi-governmentalentities, and subject to all applicable governmental and quasi-governmentallaws, rules, regulations and codes, Landlord hereby grants Tenant thenon-exclusive right to have one (1) identification sign (“**Tenant’s Name Sign**”) containing the name “1st Pacific Bank of California” on a position tobe determined by Landlord on the Building’s monument sign located adjacent toEvening Creek Drive in front of the Project (the “**Monument Sign**”). The design, size, specifications, graphics,materials, manner of affixing, colors and lighting (if applicable) of Tenant’sName Sign shall be (i) consistent with the project sign criteria attachedhereto as **Exhibit F** andconsistent with other signs to be placed on the Monument Sign and the qualityand appearance of the Real Property and (ii) subject to the approval of allapplicable governmental authorities, and Landlord’s reasonable approval.Landlord shall install Tenant’s Name Sign at Tenant’s cost. In addition, Tenantshall pay to Landlord, within thirty (30) days after demand, from time to time,all other costs attributable to the fabrication, installation, insurance,lighting (if applicable), maintenance and repair of Tenant’s Name Sign on theMonument Sign. The signage right granted to Tenant under this Section 24.8.2 ispersonal to the Original Tenant and any assignee that is an Affiliate ofOriginal Tenant’s entire interest in this Lease pursuant to Section 14.7 ofthis Lease (but any name change Tenant’s Name Sign to reflect the name of suchAffiliate assignee shall be subject to Landlord’s approval, which shall not beunreasonably withheld or delayed) and may not be exercised or used by orassigned to any other person or entity. In addition, Original Tenant (or suchAffiliate assignee, as the case may be) shall no longer have any right toTenant’s Name Sign on the Monument Sign if at any time during the Lease Termthe Original Tenant (or such Affiliate assignee, as the case may be) does notlease and occupy the entire Premises. Upon the expiration or sooner terminationof this Lease, or upon the earlier termination of Tenant’s signage right underthis Section 24.8.2, Landlord shall have the right to permanently remove Tenant’sName Sign from the Monument Sign and to repair all damage to the Monument Signresulting from such removal and restore the affected area to its originalcondition existing prior to the installation of Tenant’s Name Sign, and Tenantshall reimburse Landlord for the costs thereof.

24.9                           Relationshipof Parties. Nothing contained in this Lease shall be deemed or construed bythe parties hereto or by any third party to create the relationship ofprincipal and agent, partnership, joint venturer or any association betweenLandlord and Tenant, it being expressly understood and agreed that neither themethod of computation of Rent nor any act of the parties hereto shall be deemedto create any relationship between Landlord and Tenant other than therelationship of landlord and tenant.

24.10                     Applicationof Payments. Landlord shall have the right to apply payments received fromTenant pursuant to this Lease, regardless of Tenant’s designation of suchpayments, to satisfy any obligations of Tenant hereunder, in such order andamounts as Landlord, in its sole discretion, may elect.

24.11                     Time ofEssence. Time is of the essence of this Lease and each of its provisions.

24.12                     PartialInvalidity. If any term, provision or condition contained in this Leaseshall, to any extent, be invalid or unenforceable, the remainder of this Lease,or the application of such term, provision or condition to persons orcircumstances other than those with respect to which it is invalid orunenforceable, shall not be affected thereby, and each and every other term,provision and condition of this Lease shall be valid and enforceable to thefullest extent possible permitted by law.

24.13                     NoWarranty. In executing and delivering this Lease, Tenant has not relied onany representation, including, but not limited to, any representationwhatsoever as to the amount of any item comprising Additional Rent or theamount of the Additional Rent in the aggregate or that Landlord is furnishingthe same services to other tenants, at all, on the same level or on the samebasis, or any warranty or any statement of Landlord which is not set forthherein or in one or more of the Exhibits attached hereto.

24.14                     LandlordExculpation. It is expressly understood and agreed that notwithstandinganything in this Lease to the contrary, and notwithstanding any applicable lawto the contrary, the liability of Landlord and the Landlord Parties hereunder(including any successor landlord) and any recourse by Tenant against Landlordor the Landlord Parties shall be limited solely and exclusively to an amountwhich is equal to the interest of Landlord in the Real Property, and neither Landlord,nor any of the Landlord Parties shall have any personal liability therefor, andTenant hereby expressly waives and releases such personal liability on behalfof itself and all persons claiming by, through or under Tenant.

24.15                     EntireAgreement. It is understood and acknowledged that there are no oralagreements between the parties hereto affecting this Lease and this Leasesupersedes and cancels any and all previous negotiations, arrangements,brochures, agreements and understandings, if any, between the parties hereto ordisplayed by Landlord to Tenant with respect to the subject matter thereof, andnone thereof shall be used to interpret or construe this Lease. This Lease andany side letter or separate agreement executed by Landlord and Tenant inconnection with this Lease and dated of even date herewith contain all of theterms, covenants, conditions, warranties and agreements of the parties relatingin any manner to the rental, use and occupancy of the Premises, shall beconsidered to be the only agreement between the parties hereto and theirrepresentatives and agents, and none of the terms, covenants, conditions orprovisions of this Lease can be modified, deleted or added to except in writingsigned by the parties hereto. All negotiations and oral agreements acceptableto both parties have been merged into and are included herein. There are noother representations or warranties between the parties, and all reliance withrespect to representations is based totally upon the representations and agreementscontained in this Lease.

24.16                     Right toLease. Landlord reserves the absolute right to effect such other tenanciesin the Buildings, Adjacent Building (if and when constructed) and/or in anyother building and/or any other portion of the

22

----

Real Property as Landlord in the exercise of its solebusiness judgment shall determine to best promote the interests of the RealProperty. Tenant does not rely on the fact, nor does Landlord represent, thatany specific tenant or type or number of tenants shall, during the Lease Term,occupy any space in the Building or Real Property.

24.17                     ForceMajeure. Any prevention, delay or stoppage due to strikes, lockouts, labordisputes, acts of God, inability to obtain services, labor, or materials orreasonable substitutes therefor, governmental actions, civil commotions, fireor other casualty, and other causes beyond the reasonable control of the partyobligated to perform, except with respect to the obligations imposed withregard to Rent and other charges to be paid by Tenant pursuant to this Leaseand except with respect to Tenant’s obligations under the Tenant Work Letter(collectively, the “**Force Majeure**”),notwithstanding anything to the contrary contained in this Lease, shall excusethe performance of such party for a period equal to any such prevention, delayor stoppage and, therefore, if this Lease specifies a time period forperformance of an obligation of either party, that time period shall beextended by the period of any delay in such party’s performance caused by aForce Majeure.

24.18                     Waiver ofRedemption by Tenant. Tenant hereby waives for Tenant and for all thoseclaiming under Tenant all right now or hereafter existing to redeem by order orjudgment of any court or by any legal process or writ, Tenant’s right ofoccupancy of the Premises after any termination of this Lease.

24.19                     Notices.All notices, demands, statements or communications (collectively, “**Notices**”) given or required to be given byeither party to the other hereunder shall be in writing, shall be sent byUnited States certified or registered mail, postage prepaid, return receiptrequested, or delivered personally (i) to Tenant at the appropriate address setforth in Section 5 of the Summary, or to such other place as Tenant may fromtime to time designate in a Notice to Landlord; or (ii) to Landlord at theaddresses set forth in Section 3 of the Summary, or to such other firm or tosuch other place as Landlord may from time to time designate in a Notice toTenant. Any Notice will be deemed given on the date it is mailed as provided inthis Section 24.19 or upon the date personal delivery is made. If Tenant isnotified of the identity and address of Landlord’s mortgagee or ground orunderlying lessor, Tenant shall give to such mortgagee or ground or underlyinglessor written notice of any default by Landlord under the terms of this Leaseby registered or certified mail, and such mortgagee or ground or underlyinglessor shall be given a reasonable opportunity to cure such default prior to Tenant’sexercising any remedy available to Tenant.

24.20                     Joint andSeveral. If there is more than one Tenant, the obligations imposed uponTenant under this Lease shall be joint and several.

24.21                     Authority.If Tenant is a corporation or partnership, each individual executing this Leaseon behalf of Tenant hereby represents and warrants that Tenant is a duly formedand existing entity qualified to do business in the state in which the RealProperty is located and that Tenant has full right and authority to execute anddeliver this Lease and that each person signing on behalf of Tenant isauthorized to do so.

24.22                     JuryTrial; Attorneys’ Fees. IF EITHER PARTY COMMENCES LITIGATION AGAINST THEOTHER FOR THE SPECIFIC PERFORMANCE OF THIS LEASE, FOR DAMAGES FOR THE BREACHHEREOF OR OTHERWISE FOR ENFORCEMENT OF ANY REMEDY HEREUNDER, THE PARTIES HERETOAGREE TO AND HEREBY DO WAIVE ANY RIGHT TO A TRIAL BY JURY. In the event of anysuch commencement of litigation, the prevailing party shall be entitled torecover from the other party such costs and reasonable attorneys’ fees as mayhave been incurred, including any and all costs incurred in enforcing,perfecting and executing such judgment.

24.23                     GoverningLaw. This Lease shall be construed and enforced in accordance with the lawsof the state in which the Real Property is located.

24.24                     Submissionof Lease. Submission of this instrument for examination or signature byTenant does not constitute a reservation of or an option for lease, and it isnot effective as a lease or otherwise until execution and delivery by bothLandlord and Tenant.

24.25                     Brokers.Landlord and Tenant hereby warrant to each other that they have had no dealingswith any real estate broker or agent in connection with the negotiation of thisLease, excepting only the real estate brokers or agents specified in Section 12of the Summary (the “**Brokers**”),and that they know of no other real estate broker or agent who is entitled to acommission in connection with this Lease. Each party agrees to indemnify and defendthe other party against and hold the other party harmless from any and allclaims, demands, losses, liabilities, lawsuits, judgments, and costs andexpenses (including without limitation reasonable attorneys’ fees) with respectto any leasing commission or equivalent compensation alleged to be owing onaccount of the indemnifying party’s dealings with any real estate broker oragent other than the Brokers.

24.26                     IndependentCovenants. This Lease shall be construed as though the covenants hereinbetween Landlord and Tenant are independent and not dependent and Tenant herebyexpressly waives the benefit of any statute to the contrary and agrees that ifLandlord fails to perform its obligations set forth herein, Tenant shall not beentitled to make any repairs or perform any acts hereunder at Landlord’sexpense or to any setoff of the Rent or other amounts owing hereunder againstLandlord; provided, however, that the foregoing shall in no way impair theright of Tenant to commence a separate action against Landlord for anyviolation by Landlord of the provisions hereof so long as notice is first givento Landlord and any holder of a mortgage or deed of trust covering theBuilding, Real Property or any portion thereof, of whose address Tenant hastheretofore been notified, and an opportunity is granted to Landlord and suchholder to correct such violations as provided above.

24.27                     BuildingName and Signage. Landlord shall have the right at any time to change thename(s) of the Buildings and Real Property and to install, affix and maintainany and all signs on the exterior and on the interior

23

----

of the Buildings and any portion of the Real Propertyas Landlord may, in Landlord’s sole discretion, desire. Tenant shall not usethe names of the Buildings or Real Property or use pictures or illustrations ofthe Buildings or Real Property in advertising or other publicity, without theprior written consent of Landlord.

24.28                     BuildingDirectory. At Tenant’s cost, Landlord shall include Tenant’s name andlocation in the Building on one (1) line on the Building directory.

24.29                     Confidentiality.Tenant acknowledges that the content of this Lease and any related documentsare confidential information. Tenant shall keep such confidential informationstrictly confidential and shall not disclose such confidential information toany person or entity other than Tenant’s financial, legal, and space planningconsultants.

24.30                     Landlord’sConstruction. It is specifically understood and agreed that Landlord has noobligation and has made no promises to alter, remodel, improve, renovate,repair or decorate the Premises, Buildings, Real Property, or any part thereofand that no representations or warranties respecting the condition of thePremises, the Buildings or the Real Property have been made by Landlord toTenant, except as specifically set forth in this Lease. Tenant acknowledgesthat prior to and during the Lease Term, Landlord (and/or any common areaassociation) will be completing construction and/or demolition work pertainingto various portions of the Buildings, Premises, and/or Real Property, includingwithout limitation the Parking Facilities, landscaping and tenant improvementsfor premises for other tenants and, at Landlord’s sole election, such otherbuildings (including the Adjacent Building), parking facilities, improvements,landscaping and other facilities within or as part of the Project as Landlord(and/or such common area association) shall from time to time desire(collectively, the “**Construction**”).In connection with such Construction, Landlord may, among other things, erectscaffolding or other necessary structures in the Building, limit or eliminateaccess to portions of the Real Property, including portions of the commonareas, or perform work in the Building and/or Real Property, which work maycreate noise, dust or leave debris in the Building and/or Real Property. Tenanthereby agrees that such Construction and Landlord’s actions in connection withsuch Construction shall in no way constitute a constructive eviction of Tenantnor entitle Tenant to any abatement of Rent. Landlord shall have noresponsibility or for any reason be liable to Tenant for any direct or indirectinjury to or interference with Tenant’s business arising from suchConstruction, nor shall Tenant be entitled to any compensation or damages fromLandlord for loss of the use of the whole or any part of the Premises or ofTenant’s personal property or improvements resulting from such Construction orLandlord’s actions in connection with such Construction, or for anyinconvenience or annoyance occasioned by such Construction or Landlord’sactions in connection with such Construction.

IN WITNESS WHEREOF,Landlord and Tenant have caused this Lease to be executed the day and datefirst above written.
|        | “Landlord”:                                              |                                                                              |
|--------|--------------------------------------------------------------------|-----------------------------------------------------------------------------------|
|   |                                                               |
|   | LEGACY SABRE SPRINGS, LLC, a California limited  liability company |
|   |                                                               |
|   | By:                                                                | Legacy Partners 2343 L.P., a California limited  partnership, its managing member |
|   |                                                               |                                                                              |
|   |                                                               | By:                                                                               | /s/ Gary Rossi |
|   |                                                               |                                                                              | Name: | Gary Rossi |
|   |                                                               |                                                                              | Its: |   |
|   |                                                               |                                                                              |   |   |
|   | “Tenant”:                                                |                                                                              |
|   |                                                               |                                                                              |
|   | 1ST PACIFIC  BANK OF CALIFORNIA,  a California corporation    |
|   |                                                               |
|   | By:                                                                | /s/ A. Vincent Siciliano                                                          |
|   |                                                               | Name:                                                                             | A. Vincent Siciliano |
|   |                                                               | Its:                                                                              | CEO |
|   |                                                               |                                                                              |   |
|   | By:                                                                |                                                                              |   |
|   |                                                               | Name:                                                                             |   |
|   |                                                               | Its:                                                                              |   |
|        |                                                                    |                                                                                   |  |  |  |  |  |

 

*** If Tenant is a CORPORATION, the authorized officers must sign onbehalf of the corporation and indicate the capacity in which they are signing.The Lease must be executed by the president or vice president and the secretaryor assistant secretary, unless the bylaws or a resolution of the board ofdirectors shall otherwise provide, in which event, the bylaws or a certifiedcopy of the resolution, as the case may be, must be attached to this Lease.

24

----

**EXHIBIT A**

**OUTLINE OF FLOOR PLAN OFPREMISES**

A-1

----

**EXHIBIT A-1**

**CONCEPTUAL SITE PLAN OFREAL PROPERTY**

****

A-1-1

----

**EXHIBITB**

**TENANTWORK LETTER**

This Tenant WorkLetter (“**Tenant Work Letter**”) setsforth the terms and conditions relating to the construction of improvements forthe Premises. All references in this Tenant Work Letter to the “**Lease**” shall mean the relevant portions ofthe Lease to which this Tenant Work Letter is attached as **Exhibit B**.

**SECTION1**

**BASE,SHELL AND CORE**

Landlord haspreviously constructed the base, shell and core (i) of the Premises and (ii) ofthe floor(s) of the Building on which the Premises are located (collectively,the “**Base, Shell and Core**”), andTenant shall accept the Base, Shell and Core in its current “As-Is” conditionexisting as of the date of the Lease and the Lease Commencement Date. Exceptfor the Tenant Improvement Allowance set forth below, Landlord shall not beobligated to make or pay for any alterations or improvements to the Premises,the Building or the Real Property.

**SECTION2**

**TENANTIMPROVEMENTS**

2.1               TenantImprovement Allowance. Tenant shall be entitled to a one-time tenantimprovement allowance (the “**TenantImprovement Allowance**”) in the amount of up to, but not exceedingForty Dollars ($40.00) per usable square foot of the Premises (ie., upto One Hundred Eighty-Six Thousand Five Hundred Sixty Dollars ($186,560.00),based on 4,664 usable square feet in the Premises), for the costs relating tothe initial design and construction of Tenant’s improvements which arepermanently affixed to the Premises (the “**TenantImprovements**”). In no event shall Landlord be obligated to makedisbursements pursuant to this Tenant Work Letter in a total amount whichexceeds the Tenant Improvement Allowance. Tenant shall not be entitled toreceive any cash payment or credit against Rent or otherwise for any portion ofthe Tenant Improvement Allowance which is not used to pay for the TenantImprovement Allowance Items (as such term is defined below).

2.2               Disbursement ofthe Tenant Improvement Allowance. Except as otherwise set forth in thisTenant Work Letter, the Tenant Improvement Allowance shall be disbursed byLandlord (each of which disbursement shall be made pursuant to Landlord’sstandard disbursement process), only for the following items and costs(collectively, the “**Tenant ImprovementAllowance Items**”):

2.2.1        payment of the fees of the“**Architect**” and the “**Engineers**,” as those terms are defined inSection 3.1 of this Tenant Work Letter (provided, however, that only an amountnot to exceed Three Dollars ($3.00) per usable square foot of the Premises(i.e., up to Thirteen Thousand Nine Hundred Ninety-Two Dollars ($13,992.00)based on 4,664 usable square feet of the Premises) may be deducted from theTenant Improvement Allowance to pay for such fees), and payment of the feesincurred by, and the cost of documents and materials supplied by, Landlord andLandlord’s consultants in connection with the preparation and review of the “**Construction Drawings**,” as that term isdefined in Section 3.1 of this Tenant Work Letter;

2.2.2        the payment of plan check,permit and license fees relating to construction of the Tenant Improvements;

2.2.3        the cost of constructionof the Tenant Improvements, including, without limitation, contractors’ feesand general conditions, testing and inspection costs, costs of utilities, trashremoval, parking and hoists, and the costs of after-hours freight elevatorusage;

2.2.4        the cost of any changes inthe Base, Shell and Core when such changes are required by the ConstructionDrawings (including if such changes are due to the fact that such work isprepared on an unoccupied basis), such cost to include all direct architecturaland/or engineering fees and expenses incurred in connection therewith;

2.2.5        the cost of any changes tothe Construction Drawings or Tenant Improvements required by applicable laws;

2.2.6        sales and use taxes andTitle 24 fees;

2.2.7        the “Landlord SupervisionFee,” as that term is defined in Section 4.3.2 of this Tenant Work Letter; and

2.2.8        all other costs to beexpended by Landlord in connection with the construction of the TenantImprovements.

B-1

----

2.3               Specificationsfor Building Standard Components. Landlord has established specifications(the “**Specifications**”) for theBuilding standard components to be used in the construction of the TenantImprovements in the Premises, which Specifications have been received byTenant. Unless otherwise agreed to by Landlord, the Tenant Improvements shallcomply with the Specifications. Landlord may make changes to the Specificationsfrom time to time.

**SECTION3**

**CONSTRUCTIONDRAWINGS**

3.1               Selection ofArchitect/Construction Drawings. Tenant shall retain en studio InteriorDesign as its architect/space planner (the “**Architect**”)to prepare the Construction Drawings, which Architect is hereby approved byLandlord. Tenant shall retain engineering consultants designated by Landlord(the “**Engineers**”) to prepare allplans and engineering working drawings relating to the structural, mechanical,electrical, plumbing, HVAC, lifesafety, and sprinkler work in the Premises. Theplans and drawings to be prepared by Architect and the Engineers hereundershall be known collectively as the “**ConstructionDrawings**.” All Construction Drawings shall comply with the drawingformat and specifications determined by Landlord, and shall be subject toLandlord’s approval. Tenant and Architect shall verify, in the field, thedimensions and conditions as shown on the relevant portions of the basebuilding plans, and Tenant and Architect shall be solely responsible for thesame, and Landlord shall have no responsibility in connection therewith.Landlord’s review of the Construction Drawings as set forth in this Section 3,shall be for its sole purpose and shall not imply Landlord’s review of thesame, or obligate Landlord to review the same, for quality, design, compliancewith applicable laws or other like matters. Accordingly, notwithstanding thatany Construction Drawings are reviewed by Landlord or its space planner,architect, engineers and consultants, and notwithstanding any advice orassistance which may be rendered to Tenant by Landlord or Landlord’s spaceplanner, architect, engineers, and consultants, Landlord shall have noliability whatsoever in connection therewith and shall not be responsible forany omissions or errors contained in the Construction Drawings.

3.2               Final Space Plan.On or before the date set forth in Schedule 1, attached hereto, Tenant andArchitect shall prepare the final space plan for Tenant Improvements in thePremises (the “**Final Space Plan**”),which Final Space Plan shall include a layout and designation of all offices,rooms and other partitioning, their intended use, and equipment to be containedtherein, and shall deliver the Final Space Plan to Landlord for Landlord’sapproval.

3.3               Final WorkingDrawings. On or before the date set forth in Schedule 1, Tenant, Architectand the Engineers shall complete the architectural and engineering drawings forthe Premises, and Architect shall compile a fully coordinated set ofarchitectural, structural, mechanical, electrical and plumbing working drawingsin a form which is complete to allow subcontractors to bid on the work and toobtain all applicable permits (collectively, the “**Final Working Drawings**”), and shall submit the same toLandlord for Landlord’s approval.

3.4               Approved WorkingDrawings. On or before the date set forth therefor in Schedule 1, Tenantshall submit the Final Working Drawings approved by Landlord (the “**Approved Working Drawings**”) to theapplicable local governmental agency for all applicable building permitsnecessary to allow “Contractor,” as that term is defined in Section 4.1 of thisTenant Work Letter, to commence and fully complete the construction of theTenant Improvements (collectively, the “**Permits**”),and, in connection therewith, Tenant shall coordinate with Landlord in order toallow Landlord, at Landlord’s option, to take part in all phases of thepermitting process, and shall supply Landlord, as soon as possible, with allplan check numbers and dates of submittal. Notwithstanding the foregoing,Tenant hereby agrees that neither Landlord nor Landlord’s consultants shall beresponsible for obtaining any building permit or certificate of occupancy forthe Premises and that the obtaining of the same shall be Tenant’sresponsibility; provided, however, that Landlord shall, in any event, cooperatewith Tenant in executing permit applications and performing other ministerialacts reasonably necessary to enable Tenant to obtain any such permit orcertificate of occupancy. No changes, modifications or alterations in theApproved Working Drawings may be made without the prior written consent ofLandlord, provided that Landlord may withhold its consent, in its solediscretion, to any change in the Approved Working Drawings, if such changewould directly or indirectly delay the Substantial Completion of the Premises and/orwould result in an Over-Allowance Cap (as defined below).

3.5               Time Deadlines.Tenant shall cooperate with Architect, the Engineer, and Landlord to completeall phases of the Construction Drawings and the permitting process and toreceive the permits, and with Contractor, for approval of the “Cost Proposal,”as that term is defined in Section 4.2, below, in accordance with the dates setforth in Schedule 1. Tenant shall meet with Landlord on a weekly (or such otherbasis as Landlord shall determine) to discuss Tenant’s progress in connectionwith the same. Certain of applicable dates for approval of items, plans anddrawings as described in this Section 3, Section 4, below, and in this TenantWork Letter are set forth and further elaborated upon in Schedule 1 (the “**Time Deadlines**”), attached hereto. Tenantagrees to comply with the Time Deadlines.

B-2

----

**SECTION4**

**CONSTRUCTIONOF THE TENANT IMPROVEMENTS**

4.1               Contractor.A contractor, under the supervision of and selected by Landlord, shallconstruct the Tenant Improvements (the “**Contractor**).”

4.2               Cost Proposal.After the Approved Working Drawings are signed by Landlord and Tenant, Landlordshall provide Tenant with a cost proposal in accordance with the ApprovedWorking Drawings, which cost proposal shall include, as nearly as possible, thecost of all Tenant Improvement Allowance Items to be incurred by Tenant inconnection with the construction of the Tenant Improvements (the “**Cost Proposal**”). Notwithstanding theforegoing, portions of the cost of the Tenant Improvements may be delivered toTenant as such portions of the Tenant Improvements are priced by Contractor (onan individual item-by-item or trade-by-trade basis), even before the ApprovedWorking Drawings are completed (the “**PartialCost Proposal**”). Tenant shall approve and deliver the Cost Proposalto Landlord within five (5) business days of the receipt of the same (or, as toa Partial Cost Proposal, within two (2) business days of receipt of the same).The date by which Tenant must approve and deliver the Cost Proposal, or thelast Partial Cost Proposal to Landlord, as the case may be, shall be knownhereafter as the “**Cost Proposal DeliveryDate.**” The total of all Partial Cost Proposals, if any, shall beknown as the Cost Proposal. Notwithstanding anything above to the contrary, ifupon Landlord’s delivery of any Partial or final Cost Proposal to Tenant, theOver-Allowance Amount (as defined below) is determined to be greater than anamount equal to twenty- five percent (25%) of the Tenant Improvement Allowance(the “**Over-Allowance Cap**”), thenLandlord, in Landlord’s sole discretion, shall have the right to revise theApproved Working Drawings and/or any other Construction Drawings (and resubmitthe same to Tenant for Tenant’s approval to be provided pursuant to theapproval procedures and standards set forth in Section 3.3 above) to reduce theOver-Allowance Amount to an amount less than the Over-Allowance Cap andLandlord may refuse to sign any construction contract until such revisions tothe Approved Working Drawings and/or any other Construction Drawings areapproved by Tenant.

4.3               Construction ofTenant Improvements by Landlord’s Contractor under the Supervision of Landlord.

4.3.1        Over-Allowance Amount.On the Cost Proposal Delivery Date, Tenant shall deliver to Landlord cash in anamount (the “**Over-Allowance Amount**”) equal tothe difference between (i) the amount of the Cost Proposal and (ii) the amountof the Tenant Improvement Allowance (less any portion thereof already disbursedby Landlord, or in the process of being disbursed by Landlord, on or before theCost Proposal Delivery Date). The Over-Allowance Amount shall be disbursed byLandlord prior to the disbursement of any then remaining portion of the TenantImprovement Allowance, and such disbursement shall be pursuant to the sameprocedure as the Tenant Improvement Allowance. In the event that, after theCost Proposal Date, any revisions, changes, or substitutions shall be made tothe Construction Drawings or the Tenant Improvements, any additional costswhich arise in connection with such revisions, changes or substitutions shallbe added to the Cost Proposal and shall be paid by Tenant to Landlordimmediately upon Landlord’s request to the extent such additional costsincrease any existing Over-Allowance Amount or result in an Over-AllowanceAmount. Following completion of the Tenant Improvements, Landlord shall deliverto Tenant a final cost statement which shall indicate the final costs of theTenant Improvement Allowance Items, and if such cost statement indicates thatTenant has underpaid or overpaid the Over-Allowance Amount, then within ten(10) business days after receipt of such statement, Tenant shall deliver toLandlord the amount of such underpayment or Landlord shall return to Tenant theamount of such overpayment, as the case may be.

4.3.2        Landlord Supervision.After Landlord selects the Contractor, Landlord shall independently retainContractor to construct the Tenant Improvements in accordance with the ApprovedWorking Drawings and the Cost Proposal and Landlord shall supervise theconstruction by Contractor, and Tenant shall pay a construction supervision andmanagement fee (the “**Landlord Supervision Fee**”)to Landlord in an amount equal to the product of (i) four percent (4%) and (ii)an amount equal to the Tenant Improvement Allowance plus the Over-AllowanceAmount (as such Over-Allowance Amount may increase pursuant to the terms ofthis Tenant Work Letter).

4.3.3        Contractor’s Warrantiesand Guarantees. Landlord hereby assigns to Tenant all warranties andguarantees by Contractor relating to the Tenant Improvements, which assignmentshall be on a non-exclusive basis such that the warranties and guarantees maybe enforced by Landlord and/or Tenant, and Tenant hereby waives all claims againstLandlord relating to, or arising out of the construction of, the TenantImprovements.

4.3.4        Tenant’s Covenants.Tenant hereby indemnifies Landlord for any loss, claims, damages or delaysarising from the actions of Architect and the Engineers on the Premises or inthe Building. Within ten (10) days after completion of construction of theTenant Improvements, Tenant shall cause Contractor and Architect to cause aNotice of Completion to be recorded in the office of the Recorder of the Countyin which the Building is located in accordance with Section 3093 of the CivilCode of the State of California or any successor statute and furnish a copythereof to Landlord upon recordation, failing which, Landlord may itselfexecute and file the same on behalf of Tenant as Tenant’s agent for suchpurpose. In addition, Tenant, immediately after the Substantial Completion ofthe Premises, shall have prepared and delivered to the Building managementoffice a copy of the “as built” plans and specifications (including all workingdrawings) for the Tenant Improvements, together with a computer disk containingthe Approved Working Drawings in AutoCAD format.

B-3

----

**SECTION5**

**SUBSTANTIALCOMPLETION:**

**LEASECOMMENCEMENT DATE**

5.1               SubstantialCompletion. For purposes of the Lease, including for purposes ofdetermining the Lease Commencement Date (as set forth in Section 7.2 of theSummary), the Premises shall be “**Ready forOccupancy**” upon Substantial Completion of the Premises. For purposesof this Lease, “**Substantial Completion**”of the Premises shall occur upon the completion of construction of the TenantImprovements in the Premises pursuant to the Approved Working Drawings, withthe exception of any punchlist items and any tenant fixtures, work-stations,built-in furniture, or equipment to be installed by Tenant or under thesupervision of Contractor.

5.2               Tenant Delays.If there shall be a delay or there are delays in the Substantial Completion ofthe Premises (as a direct, indirect, partial, or total result of any of thefollowing (collectively, “**Tenant Delays**”):

5.2.1        Tenant’s failure to timelyapprove any matter requiring Tenant’s approval, including a Partial CostProposal or the Cost Proposal and/or Tenant’s failure to timely perform anyother obligation or act required of Tenant hereunder;

5.2.2        a breach by Tenant of theterms of this Tenant Work Letter or the Lease;

5.2.3        Tenant’s request forchanges in the Construction Drawings after disapproval of the same by Landlordor because the same do not comply with applicable laws;

5.2.4        Tenant’s requirement formaterials, components, finishes or improvements which are not available in areasonable time (based upon the anticipated date of the Lease CommencementDate) or which are different from, or not included in, the Specifications;

5.2.5        changes to the Base, Shelland Core required by the Approved Working Drawings;

5.2.6        any changes in theConstruction Drawings and/or the Tenant Improvements required by (i) applicablelaws if such changes are directly attributable to Tenant’s use of the Premisesor Tenant’s specialized tenant improvement(s) (as determined by Landlord),and/or (ii) Landlord pursuant to Section 4.2 above;

5.2.7        Tenant’s failure to complywith the Time Deadlines; or

5.2.8        any other acts oromissions of Tenant, or its agents, or employees;

then, notwithstandinganything to the contrary set forth in the Lease and regardless of the actualdate of the Substantial Completion of the Premises, the Lease Commencement Date(as set forth in Section 7.2 of the Summary) shall be deemed to be the date theLease Commencement Date would have occurred if no Tenant Delay or Delays, asset forth above, had occurred.

**SECTION6**

**MISCELLANEOUS**

6.1               Tenant’s EntryInto the Premises Prior to Substantial Completion. Subject to the termshereof and provided that Tenant and its agents do not interfere with, or delay,Contractor’s work in the Building and the Premises, at Landlord’s reasonablediscretion, Contractor shall allow Tenant access to the Premises prior to theSubstantial Completion of the Premises for the purpose of Tenant installingoverstandard equipment or fixtures (including Tenant’s data and telephoneequipment) in the Premises. Prior to Tenant’s entry into the Premises aspermitted by the terms of this Section 6.1, Tenant shall submit a schedule toLandlord and Contractor, for their approval, which schedule shall detail thetiming and purpose of Tenant’s entry. In connection with any such entry, Tenantacknowledges and agrees that Tenant’s employees, agents, contractors,consultants, workmen, mechanics, suppliers and invitees shall fully cooperate,work in harmony and not, in any manner, interfere with Landlord or Landlord’sContractor, agents or representatives in performing work in the Building andthe Premises, or interfere with the general operation of the Building and/orthe Real Property. If at any time any such person representing Tenant shall notbe cooperative or shall otherwise cause or threaten to cause any suchdisharmony or interference, including, without limitation, labor disharmony,and Tenant fails to immediately institute and maintain corrective actions asdirected by Landlord, then Landlord may revoke Tenant’s entry rights upontwenty-four (24) hours’ prior written notice to Tenant. Tenant acknowledges andagrees that any such entry into and occupancy of the Premises or any portionthereof by Tenant or any person or entity working for or on behalf of Tenantshall be deemed to be subject to all of the terms, covenants, conditions andprovisions of the Lease, excluding only the covenant to pay Rent (until theoccurrence of the Lease Commencement Date). Tenant further acknowledges andagrees that Landlord shall not be liable for any injury, loss or damage whichmay occur to any of Tenant’s work made in or about the Premises in connectionwith such entry or to any property placed therein prior to the LeaseCommencement Date, the same being at Tenant’s sole risk and liability. Tenantshall be liable to Landlord for any damage to any portion of the Premises,including the Tenant Improvement work, caused by Tenant or any of Tenant’semployees, agents, contractors, consultants, workmen, mechanics, suppliers andinvitees. In the event that the performance of Tenant’s work in connection withsuch entry causes extra costs to be incurred by Landlord or

B-4

----

requires the useof any Building services, Tenant shall promptly reimburse Landlord for suchextra costs and/or shall pay Landlord for such Building services at Landlord’sstandard rates then in effect. In addition, Tenant shall hold Landlord harmlessfrom and indemnify, protect and defend Landlord against any loss or damage tothe Building or Premises and against injury to any persons caused by Tenant’sactions pursuant to this Section 6.1.

6.2               Tenant’sRepresentative. Tenant has designated Vincent Siciliano as its solerepresentative with respect to the matters set forth in this Tenant WorkLetter, who shall have full authority and responsibility to act on behalf ofthe Tenant as required in this Tenant Work Letter.

6.3               Landlord’sRepresentative. Landlord has designated Mike Nelson as its solerepresentative with respect to the matters set forth in this Tenant WorkLetter, who, until further notice to Tenant, shall have full authority andresponsibility to act on behalf of the Landlord as required in this Tenant WorkLetter.

6.4               Time of theEssence in This Tenant Work Letter. Unless otherwise indicated, allreferences herein to a “number of days” shall mean and refer to calendar days.In all instances where Tenant is required to approve or deliver an item, if nowritten notice of approval is given or the item is not delivered within thestated time period, at Landlord’s sole option, at the end of said period theitem shall automatically be deemed approved or delivered by Tenant and the nextsucceeding time period shall commence.

6.5               Tenant’s LeaseDefault. Notwithstanding any provision to the contrary contained in theLease, if an event of default by Tenant as described in Section 19.1 of theLease or any default by Tenant under this Tenant Work Letter has occurred atany time on or before the Substantial Completion of the Premises, then (i) inaddition to all other rights and remedies granted to Landlord pursuant to theLease, at law and/or in equity, Landlord shall have the right to withhold paymentof all or any portion of the Tenant Improvement Allowance and/or Landlord maycause Contractor to cease the construction of the Premises (in which case,Tenant shall be responsible for any delay in the Substantial Completion of thePremises caused by such work stoppage as set forth in Section 5.2 of thisTenant Work Letter), and (ii) all other obligations of Landlord under the termsof this Tenant Work Letter shall be forgiven until such time as such default iscured pursuant to the terms of the Lease (in which case, Tenant shall beresponsible for any delay in the Substantial Completion of the Premises causedby such inaction by Landlord). In addition, if the Lease is terminated prior tothe Lease Commencement Date, for any reason due to a default by Tenant asdescribed in Section 19.1 of the Lease or under this Tenant Work Letter, inaddition to any other remedies available to Landlord under the Lease, at lawand/or in equity, Tenant shall pay to Landlord, as Additional Rent under theLease, within five (5) days of receipt of a statement therefor, any and allcosts incurred by Landlord (including any portion of the Tenant ImprovementAllowance disbursed by Landlord) and not reimbursed or otherwise paid by Tenantthrough the date of such termination in connection with the Tenant Improvementsto the extent planned, installed and/or constructed as of such date oftermination, including, but not limited to, any costs related to the removal ofall or any portion of the Tenant Improvements and restoration costs relatedthereto.

B-5

----

**SCHEDULE 1**

**TIME DEADLINES**
| **Dates** | ** ** | **Actions to be Performed**                                                                                            |
|-----------|------------|------------------------------------------------------------------------------------------------------------------------|
|      |       |                                                                                                                   |   |   |
| 1.        |       | September 27, 2004.                                                                                                    |   | Landlord to provide CAD drawings to Tenant of the  Premises. |
|      |       |                                                                                                                   |   |   |
| 2.        |       | October 4, 2004.                                                                                                       |   | Final Space Plan to be completed by Tenant and  delivered to Landlord. |
|      |       |                                                                                                                   |   |   |
| 3.        |       | October 6, 2004.                                                                                                       |   | Landlord to provide Tenant with approval or  disapproval of the Final Space Plan. |
|      |       |                                                                                                                   |   |   |
| 4.        |       | October 20, 2004, subject, however, to delays to the  extent Landlord requested changes to the Final Space Plan.       |   | Tenant to deliver Final Working Drawings to  Landlord. |
|      |       |                                                                                                                   |   |   |
| 5.        |       | October 25, 2004.                                                                                                      |   | Landlord to provide Tenant with approval or  disapproval of the Final Working Drawings. |
|      |       |                                                                                                                   |   |   |
| 6.        |       | October 27, 2004, subject, however, to delays to the  extent Landlord requested changes to the Final Working Drawings. |   | Tenant to submit Approved Working Drawings to the  City of San Diego for all applicable building permits. |
|      |       |                                                                                                                   |   |   |
| 7.        |       | Five (5) business days after the receipt of the Cost  Proposal by Tenant.                                              |   | Tenant to approve Cost Proposal and deliver Cost Proposal  to Landlord. |
|      |       |                                                                                                                   |   |   |
| 8.        |       | Two (2) business days after the receipt of a Partial  Cost Proposal by Tenant.                                         |   | Tenant to approve Partial Cost Proposal and deliver  same to Landlord. |

 

S-1

----

**EXHIBIT C**

**AMENDMENT TO LEASE**

This AMENDMENT TO LEASE (“**Amendment**”) is made and entered intoeffective as of                ,20   , by and between LEGACY SABRE SPRINGS, LLC, a Californialimited liability company (“**Landlord**”)and           , a                          (“**Tenant**”).

RECITALS:

A.                Landlord and Tenant entered intothat certain Office Lease dated as of                          (the“**Lease**”) pursuant to whichLandlord leased to Tenant and Tenant leased from Landlord certain “Premises”,as described in the Lease, in that certain Building located at         , San Diego, California.

B.                 Except as otherwise set forth herein, allcapitalized terms used in this Amendment shall have the same meaning as suchterms have in the Lease.

C.                 Landlord and Tenant desire to amend the Lease toconfirm the commencement and expiration dates of the term, as hereinafterprovided.

NOW, THEREFORE, inconsideration of the foregoing Recitals and the mutual covenants containedherein, and for other good and valuable consideration, the receipt andsufficiency of which are hereby acknowledged, the parties hereto agree asfollows:

1.                 Confirmation of Dates. The parties herebyconfirm that the term of the Lease commenced as of                          (the“**Lease Commencement Date**”) for aterm of sixty (60) months ending on                          (unlesssooner terminated or extended as provided in the Lease.

2.                 NoFurther Modification. Except as set forth in this Amendment, all of theterms and provisions of the Lease shall remain unmodified and in full force andeffect.

IN WITNESS WHEREOF, thisAmendment to Lease has been executed as of the day and year first abovewritten.
|        |   | “Landlord”:                  |
|--------|--------|----------------------------------------|
|   |   |                                   |
|   |   | LEGACY SABRE SPRINGS, LLC,             |
|   |   | a California limited liability company |
|   |   |                                   |
|   |   | By:                                    | Legacy Partners 2343 L.P., a California limited |
|   |   |                                   | partnership, its managing member |
|   |   |                                   |   |
|   |   |                                   | By: |   |   |
|   |   |                                   |   | Name: |   |   |
|   |   |                                   |   | Its: |   |   |
|   |   |                                   |   |   |   |
|   |   | “Tenant”:                    |
|   |   |                                   |   |   |   |
|   |   |                                   |   | , |   |
|   |   | a                                      |   |   |   |
|   |   |                                   |   |   |   |
|   |   |                                   | By: |   |   |
|   |   |                                   |   | Name: |   |   |
|   |   |                                   |   | Its: |   |   |
|   |   |                                   |   |   |   |   |
|   |   |                                   | By: |   |   |
|   |   |                                   |   | Name: |   |   |
|   |   |                                   |   | Its: |   |   |
|        |        |                                        |  |  |  |  |  |  |

 

C-1

----

**EXHIBIT D**

**RULES AND REGULATIONS**

Tenant shall faithfullyobserve and comply with the following Rules and Regulations. Landlord shall notbe responsible to Tenant for the nonperformance of any of said Rules andRegulations by or otherwise with respect to the acts or omissions of any othertenants or occupants of the Building or Real Property.

1.                 Tenant shall notalter any lock or install any new or additional locks or bolts on any doors orwindows of the Premises without obtaining Landlord’s prior written consent.Tenant shall bear the cost of any lock changes or repairs required by Tenant.Two keys will be furnished by Landlord for the Premises, and any additionalkeys required by Tenant must be obtained from Landlord at a reasonable cost tobe established by Landlord.

2.                 All doors openingto public corridors shall be kept closed at all times except for normal ingressand egress to the Premises, unless electrical hold backs have been installed.

3.                 Landlord reservesthe right to close and keep locked all entrance and exit doors of the Buildingduring such hours as are customary for comparable buildings in the vicinity ofthe Building. Tenant, its employees and agents must be sure that the doors tothe Building are securely closed and locked when leaving the Premises if it isafter the normal hours of business for the Building. Any tenant, its employees,agents or any other persons entering or leaving the Building at any time whenit is so locked, or any time when it is considered to be after normal business hoursfor the Building, may be required to sign the Building register when so doing.After-hours access by Tenant’s authorized employees may be provided by card-keyaccess or other procedures adopted by Landlord from time to time; Tenant shallpay for the costs of all access cards provided to Tenant’s employees and allreplacements thereof for lost, stolen or damaged cards. Access to the Buildingand/or Real Property may be refused unless the person seeking access has properidentification or has a previously arranged, pass for such access. Landlord andits agents shall in no case be liable for damages for any error with regard tothe admission to or exclusion from the Building and/or Real Property of anyperson. In case of invasion, mob, riot, public excitement, or other commotion,Landlord reserves the right to prevent access to the Building and/or RealProperty during the continuance of same by any means it deems appropriate forthe safety and protection of life and property.

4.                 Landlord shallhave the right to prescribe the weight, size and position of all safes andother heavy property brought into the Building. Safes and other heavy objectsshall, if considered necessary by Landlord, stand on supports of such thicknessas is necessary to properly distribute the weight. Landlord will not beresponsible for loss of or damage to any such safe or property in any case. Alldamage done to any part of the Building, its contents, occupants or visitors bymoving or maintaining any such safe or other property shall be the soleresponsibility of Tenant and any expense of said damage or injury shall beborne by Tenant.

5.                 No furniture,freight, packages, supplies, equipment or merchandise will be brought into orremoved from the Building or carried up or down in the elevators, except uponprior notice to Landlord, and in such manner, in such specific elevator, andbetween such hours as shall be designated by Landlord. Tenant shall provideLandlord with not less than 24 hours prior notice of the need to utilize an elevatorfor any such purpose, so as to provide Landlord with a reasonable period toschedule such use and to install such padding or take such other actions orprescribe such procedures as are appropriate to protect against damage to theelevators or other parts of the Building.

6.                 Landlord shallhave the right to control and operate the public portions of the Building andReal Property, the public facilities, the heating and air conditioning, and anyother facilities furnished for the common use of tenants, in such manner as iscustomary for comparable buildings in the vicinity of the Building.

7.                 The requirementsof Tenant will be attended to only upon application at the management office ofthe Real Property or at such office location designated by Landlord. Employeesof Landlord shall not perform any work or do anything outside their regularduties unless under special instructions from Landlord.

8.                 Tenant shall notdisturb, solicit, or canvass any occupant of the Building or Real Property andshall cooperate with Landlord or Landlord’s agents to prevent same.

9.                 The toilet rooms,urinals, wash bowls and other apparatus shall not be used for any purpose otherthan that for which they were constructed, and no foreign substance of any kindwhatsoever shall be thrown therein. The expense of any breakage, stoppage ordamage resulting from the violation of this rule shall be borne by the tenantwho, or whose employees or agents, shall have caused it.

10.               Tenant shall notoverload the floor of the Premises. Tenant shall not mark, drive nails orscrews, or drill into the partitions, woodwork or plaster or in any way defacethe Premises or any part thereof without Landlord’s consent first had andobtained; provided, however, Landlord’s prior consent shall not be requiredwith respect to Tenant’s placement of pictures and other normal office wallhangings on the interior walls of the Premises (but at the end of the Term,Tenant shall repair any holes and other damage to the Premises resultingtherefrom).

11.               Except for vendingmachines intended for the sole use of Tenant’s employees and invitees, no vending machine or machines of any descriptionother than fractional horsepower office machines shall be installed, maintainedor operated upon the Premises without the written consent of Landlord.

D-1

----

12.               Tenant shall notuse any method of heating or air conditioning other than that which may besupplied by Landlord, without the prior written consent of Landlord.

13.               Tenant shall notuse or keep in or on the Premises, the Building or Real Property any kerosene,gasoline or other inflammable or combustible fluid or material. Tenant shallnot use, keep or permit to be used or kept, any foul or noxious gas orsubstance in or on the Premises, or permit or allow the Premises to be occupiedor used in a manner offensive or objectionable to Landlord or other occupantsof the Building or Real Property by reason of noise, odors, or vibrations, orinterfere in any way with other tenants or those having business therewith.

14.               Tenant shall notbring into or keep within the Real Property, the Building or the Premises anyanimals, birds, bicycles or other vehicles.

15.               No cooking shall bedone or permitted by Tenant on the Premises, nor shall the Premises be used forthe storage of merchandise, for lodging or for any improper, objectionable orimmoral purposes. Notwithstanding the foregoing, Underwriters’laboratory-approved equipment and microwave ovens may be used in the Premisesfor heating food and brewing coffee, tea, hot chocolate and similar beverages,provided that such use is in accordance with all applicable federal, state andcity laws, codes, ordinances, rules and regulations, and does not cause odorswhich are objectionable to Landlord and other tenants.

16.               Landlord willapprove where and how telephone and telegraph wires are to be introduced to thePremises. No boring or cutting for wires shall be allowed without the consentof Landlord. The location of telephone, call boxes and other office equipmentaffixed to the Premises shall be subject to the approval of Landlord.

17.               Landlord reservesthe right to exclude or expel from the Building and/or Real Property any personwho, in the judgment of Landlord, is intoxicated or under the influence ofliquor or drugs, or who shall in any manner do any act in violation of any ofthese Rules and Regulations.

18.               Tenant, itsemployees and agents shall not loiter in the entrances or corridors, nor in anyway obstruct the sidewalks, lobby, halls, stairways or elevators, and shall usethe same only as a means of ingress and egress for the Premises.

19.               Tenant shall notwaste electricity, water or air conditioning and agrees to cooperate fully withLandlord to ensure the most effective operation of the Building’s heating andair conditioning system, and shall refrain from attempting to adjust anycontrols.

20.               Tenant shall storeall its trash and garbage within the interior of the Premises. No materialshall be placed in the trash boxes or receptacles if such material is of suchnature that it may not be disposed of in the ordinary and customary manner ofremoving and disposing of trash and garbage in the city in which the RealProperty is located without violation of any law or ordinance governing suchdisposal. All trash, garbage and refuse disposal shall be made only throughentry-ways and elevators provided for such purposes at such times as Landlordshall designate.

21.               Tenant shall complywith all safety, fire protection and evacuation procedures and regulationsestablished by Landlord or any governmental agency.

22.               Tenant shall assumeany and all responsibility for protecting the Premises from theft, robbery andpilferage, which includes keeping doors locked and other means of entry to thePremises closed, when the Premises are not occupied.

23.               No awnings or otherprojection shall be attached to the outside walls of the Building without theprior written consent of Landlord. No curtains, blinds, shades or screens shallbe attached to or hung in, or used in connection with, any window or door ofthe Premises without the prior written consent of Landlord. The sashes, sashdoors, skylights, windows, and doors that reflect or admit light and air intothe halls, passageways or other public places in the Building shall not becovered or obstructed by Tenant, nor shall any bottles, parcels or otherarticles be placed on the windowsills. All electrical ceiling fixtures hung inoffices or spaces along the perimeter of the Building must be fluorescentand/or of a quality, type, design and bulb color approved by Landlord.

24.               The washing and/ordetailing of or, the installation of windshields, radios, telephones in orgeneral work on, automobiles shall not be allowed on the Real Property.

25.               Food vendors shallbe allowed in the Building upon receipt of a written request from the Tenant.The food vendor shall service only the tenants that have a written request onfile in the management office of the Real Property. Under no circumstance shallthe food vendor display their products in a public or common area includingcorridors and elevator lobbies. Any failure to comply with this rule shallresult in immediate permanent withdrawal of the vendor from the Building.

26.               Tenant must complywith requests by the Landlord concerning the informing of their employees ofitems of importance to the Landlord.

27.               Tenant shall complywith any non-smoking ordinance adopted by any applicable governmentalauthority.

D-2

----

28.               Landlord may waiveany one or more of these Rules and Regulations for the benefit of anyparticular tenant or tenants, but no such waiver by Landlord shall be construedas a waiver of such Rules and Regulations in favor of any other tenant ortenants, nor prevent Landlord from thereafter enforcing any such Rules orRegulations against any or all tenants of the Building and/or Real Property.Landlord reserves the right at any time to change or rescind any one or more ofthese Rules and Regulations, or to make such other and further reasonable Rulesand Regulations as in Landlord’s judgment may from time to time be necessaryfor the management, safety, care and cleanliness of the Premises, Building andReal Property, and for the preservation of good order therein, as well as forthe convenience of other occupants and tenants therein. Landlord shall not beresponsible to Tenant or to any other person for the nonobservance of the Rulesand Regulations by another tenant or other person. Tenant shall be deemed tohave read these Rules and Regulations and to have agreed to abide by them as acondition of its occupancy of the Premises.

D-3

----

**EXHIBIT E**

Prepared by and after Recording Return to:

James DowCorus Bank, N.A. 3959 N. Lincoln AvenueChicago, Illinois 60613

**SUBORDINATION,NON-DISTURBANCEAND ATTORNMENT AGREEMENT**

THIS SUBORDINATION,NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this “Agreement”) made by and among1ST PACIFIC BANK OF CALIFORNIA, a California corporation (“Tenant”), CorusBank, N.A. (“Lender”), and Legacy Sabre Springs, LLC, a California limitedliability company (“Landlord”).

**RECITALS:**

A.                By a certainOffice Lease dated as of           (the“Lease”), Landlord, as lessor, demised and leased to Tenant, as lessee, certainleased premises (the “Leased Premises”) which represents part of theimprovements located or to be located on the land legally described on ExhibitA attached hereto and by this reference incorporated herein, upon the terms andconditions and for the rental, as more fully set forth in the Lease.

B.                 Landlord, by itsDeed of Trust (the “Deed of Trust”) recorded in the Office of the Recorder ofDeeds of San Diego County, California, grants and conveys unto Lender, all ofits right, title and interest in and to the Leased Premises to secure thepayment of its promissory note in the aggregate maximum principal amount of$41,330,000 payable to Lender, with principal and interest payable as thereinprovided, and as provided under the terms of that certain Construction LoanAgreement by and between Landlord and Lender (the “Loan Agreement”) dated as ofAugust    , 2001. All references in this Agreement to theDeed of Trust, the Loan Agreement and each and every other agreement, documentand instrument shall mean the Deed of Trust, the Loan Agreement and each otheragreement, document and instrument and all modifications, amendments,supplements, extensions, replacements or restatements thereof or thereto.

C.                 Lender, as acondition to making and continuing to make advances on the loan has requiredthe execution of this Agreement.

NOW, THEREFORE, inconsideration of the mutual covenants and agreements herein contained and toinduce Lender to make said loan, the parties do hereby covenant and agree asfollows:

1.                  The Lease andall right and title of Tenant thereunder are and shall be subject andsubordinate to the lien of the Deed of Trust and to all renewals,modifications, consolidations, replacements, and extensions thereof, to thefull extent of the principal sum secured thereby, interest thereon, and allother amounts and sums secured thereby, subject to the terms and conditionsstated herein. Tenant further waives all rights and claims to assert that theLease or any provision thereof is superior to the lien of or to any otherprovision of the Deed of Trust or any renewal, increase, replacement,consolidation, modification or extension thereof.

2.                  Notwithstandingsuch subordination, Tenant agrees that any action by Lender to enforce the Deedof Trust by reason of default thereunder will not terminate the Lease (unlessLender elects to terminate the Lease in the event of a default by Tenant whichis not cured within any applicable cure period), invalidate or constitute abreach of any of the terms thereof, nor give rise to any right of Tenant toterminate the Lease, nor constitute a breach or invalidation of the Lease. Ifthe Deed of Trust shall be foreclosed, or a voluntary conveyance in lieu offoreclosure shall be delivered, or a sale of the Leased Premises pursuant tothe rights granted to Lender in the Deed of Trust, Tenant does hereby attorn tothe successors and assigns of the Landlord (successors and assigns being hereindefined to include the Lender, Lender’s nominee, assignee and/or purchaser atany sale of the Leased Premises) provided Tenant’s attornment shall be to suchsuccessor landlord upon the same terms, covenants and conditions as provided inthe Lease and such successor landlord shall be deemed to have assumed all ofthe obligations of Landlord to Tenant set forth in the Lease, except asprovided herein.

3.                  Tenant’sattornment by these presents is effective and self-operative without theexecution of any other instruments on the part of the parties hereto.

4.                  If the Lender(or any other party) shall acquire title to the Leased Premises or shallsucceed to Landlord’s interest in the Lease, whether through foreclosure of theDeed of Trust, conveyance in lieu of foreclosure, or otherwise, Lender (or suchother party) shall (a) not disturb Tenant’s possession of the Leased Premisesand all right and title of Tenant under the Lease and all amendments ormodifications thereto approved in writing by Lender (the “ApprovedModifications”) shall continue in full force and effect in accordance withtheir terms and Lender (or such other party) shall recognize the Lease and theApproved Modifications provided Tenant is not in default in the payment of anysums due from Tenant under the Lease or performance of any material obligationof Tenant under the Lease (beyond any period expressly given Tenant to curesuch default); and (b) except as may be required or necessary under the termsof any applicable law or statute, not name Tenant in any action for foreclosureof the Deed of Trust. Lender (or such other party) shall thereupon, and withoutthe necessity of further attornment or other act or agreement, be substitutedas Tenant’s landlord under the Lease, and shall be entitled to the rights andbenefits

E-1

----

and subject to the obligations thereof; provided thatneither Lender nor any other party (other than Landlord) shall be:

(a)            liable for any act oromission of any prior landlord under the Lease (including the Landlord) ordamages (actual, punitive or consequential) arising therefrom; or

(b)           subject to any offsetsor defenses which Tenant might have against any prior landlord under the Lease(including the Landlord); or

(c)            bound by anyamendments or modification of the Lease made without Lender’s written consent;or

(d)           bound by or required tocredit Tenant with any prepayment of rent more than thirty (30) days in advanceor any deposit, rental security or any other sums deposited with any priorlandlord under the Lease (including the Landlord) unless said sum is actuallyreceived by Lender; or

(e)            liable for thecompletion of any construction of the Leased Premises or tenant improvements tothe Leased Premises commenced or agreed to by any prior landlord (includingLandlord); or

(f)            liable for the paymentof any damages, fees or penalties payable by any landlord (including Landlord)to Tenant, including but not limited to fees or penalties, for failure todeliver the Leased Premises in a timely fashion.

5.                 Tenant willdeliver to Lender a copy of any notice of default served upon Landlord byTenant.

6.                 Tenantagrees that from and after the date hereof in the event of any default underthe Lease which would give Tenant the right, either immediately or after thelapse of a period of time, to terminate the Lease, to claim a partial or totaleviction, or claim for abatement of rent, offset or other remedy,notwithstanding any provision of the Lease to the contrary, Tenant will notexercise any such right (a) until it has given written notice of such defaultto Lender in accordance with both Sections 5 and 18 of this Agreement, and (b)until and unless Lender fails to remedy such act or omission within thirty (30)days after receipt of Tenant’s notice, or in the case of any other act or omissionwhich cannot reasonably be remedied within said thirty (30) day period, thenLender shall have as long as reasonably necessary to remedy such act oromission, provided that, (i) Lender commences such remedy and notifies Tenantwithin said 30-day period of Lender’s desire to remedy, and (ii) Lender pursuescompletion of such remedy with due diligence following such giving of noticeand following the time when Lender shall have become entitled under the Deed ofTrust to remedy the same. It is specifically agreed that Tenant shall not, asto Lender, be entitled to require cure of any default which is personal toLandlord, and therefore not susceptible of cure by Lender, or which isspecified in Section 4 of this Agreement, and that no such uncured defaultshall entitle Tenant to exercise any rights under the Lease with respect toLender, including, without limitation any rights of set-off, off-set, rentabatement or termination, but that the Lease shall remain in full force andeffect as between Lender and Tenant, except with respect to the provisionswhich are personal as to Landlord.

7.                 Notwithstandinganything to the contrary contained in the Lease, Landlord hereby irrevocablydirects Tenant to make all payments of rent to Landlord to an account at CorusBank, N.A., 3959 North Lincoln Avenue, Chicago, Illinois 60613, if designatedby Lender to Tenant by written notice to Tenant and Landlord.

8.                 Tenant covenantsand agrees as follows for the benefit and reliance of Lender:

(a)            That it will not,without the express written consent of Lender: (i) cancel, terminate orsurrender the Lease, except as expressly provided therein, and then only afterLender has failed to or unsuccessfully attempted to pursue its rights andremedies as provided herein; (ii) alter, amend or modify any term of the Lease;(iii) enter into any agreement with Landlord, its successors or assigns, whichgrants any concession with respect to the Lease or which reduces the rentcalled for thereunder; or (iv) consent to the release of any party havingliability under the Lease.

(b)           That- Tenant shall,except to the extent prohibited by law or legal proceedings, make rentalpayments under the Lease to Lender pursuant to and upon written demand byLender, if such demand states that a default has occurred under the Deed ofTrust, and Landlord agrees that any payments so made to Lender shall be deemedto have been made in accordance with and in satisfaction of Tenant’s obligationto pay rent under the Lease.

9.                 Landlord andTenant hereby jointly and severally, agree for the benefit and reliance ofLender, as follows:

(a)            That neither thisAgreement, the Deed of Trust, nor anything to the contrary in the Lease, priorto Lender’s acquisition of Landlord’s interest in and possession of the LeasedPremises, operate to give rise to or create any responsibility or liability forthe control, care, management or repair of the Leased Premises upon Lender, orimpose responsibility for the carrying out by Lender of any of the covenants,terms and conditions of the Lease, nor shall said instruments operate to makeLender responsible or liable for any waste committed on the Leased Premises byany party whatsoever, or for dangerous or defective condition of the LeasedPremises, or for any negligence in the management, upkeep, repair or control ofsaid Leased Premises resulting in loss, injury or death to any lessee,licensee, invitee, guest, employee, agent or stranger. Notwithstanding anythingto the contrary in the Lease, Lender, its successors and assigns or a purchaserunder the terms of the Deed of Trust, shall, subject to

E-2

----

the terms of this Agreement, be responsible forperformance of only those covenants and obligations of the Lease accruing afterLender’s acquisition of Lessor’s interest in and possession of the LeasedPremises. In no event shall Lender be personally liable as Landlord under theLease, either by virtue of any assignment of the Lease, the exercise of anyright thereunder or hereunder, the foreclosure of its lien on the LeasedPremises, the acquisition of the Leased Premises or the collection of any rentunder the Lease as owner or beneficiary under the Deed of Trust, and Tenantshall look solely to the real estate that is the subject of the Lease and to noother assets of Lender for satisfaction of any liability in respect of theLease; but Tenant shall have reserved to it all other remedies available to itat law or in equity, against Landlord.

(b)           That in the eventLender gains title to the Leased Premises and becomes substitute lessor, it isagreed that Lender may assign its interest as substitute lessor without noticeto or the consent of Tenant or any other party hereto; provided that, no suchassignment shall be binding upon Tenant until written notice thereof isdelivered to Tenant.

10.               Nothing containedin this Agreement shall in any way impair or affect the lien created by theDeed of Trust or any modifications, amendments, extensions or renewals thereof.

11.               Tenant agrees thatthis Agreement satisfies any condition or requirement in the Lease relating tothe granting of a non-disturbance agreement.

12.               Tenant covenantsand acknowledges that, as of the date hereof, it has no right or option of anynature whatsoever, whether pursuant to the Lease or otherwise, to purchase theLeased Premises or the real property described on Exhibit A hereto or anyportion thereof or any interest therein.

13.               The foregoingprovisions shall be self-operative. However, Tenant agrees to execute anddeliver to Lender, or any person to whom Tenant herein agrees to attorn, suchother instrument which is reasonably necessary to effectuate such provisionsprovided such documents in no way diminish Tenant’s rights or increases Tenant’sobligations hereunder or under the Lease.

14.               Tenant herebyrepresents and warrants to Lender that it has not subordinated the Lease or anyof its rights under the Lease to any lien, mortgage, deed of trust or deed tosecure debt prior to the date hereof and that it will not subordinate the Leaseor the rights of the Lessee thereunder to any lien, mortgage, deed of trust ordeed to secure debt other than the Deed of Trust without the prior writtenconsent of Lender or until the lien of the Deed of Trust has been released byLender.

15.               This Agreement maynot be modified orally or in any other manner than by an agreement in writingsigned by the parties hereto, or their respective successors in interest. ThisAgreement shall inure to the benefit of and be binding upon the parties hereto,and their successors and assigns.

16.               This Agreement maybe signed in one or more counterparts, each of which shall be an original, butall of which together shall constitute one agreement, binding on all of theparties hereto notwithstanding that all of the parties hereto are notsignatories to the same counterpart. Each of the undersigned parties authorizesthe assembly of one or more original copies of this Agreement through thecombination of the several executed counterpart signature pages with one ormore bodies of this Agreement, including the Exhibits, if any, to thisAgreement. Each such compilation of this Agreement shall constitute oneoriginal of this Agreement.

17.               Tenant agrees thatthe Deed of Trust and the promissory note evidencing the indebtedness securedthereby may be increased, replaced, renewed, extended and/or modified from timeto time by agreement between Landlord and Lender and Lender may exercise anyone or more of its rights under the Deed of Trust from time to time at Lender’sdiscretion, all without notice to or consent of Tenant, and this Agreementshall continue in full force and effect as to all such renewals, extensionsand/or modifications and all such exercise of rights.

18.               Any and all noticesgiven in connection with this Agreement shall be deemed adequately given onlyif in writing and addressed to the party for whom such notices are intended atthe address set forth below. All notices shall be sent by personal delivery,Federal Express or other overnight messenger service, first class registered orcertified mail, postage prepaid, return receipt requested or by other means atleast as fast and reliable as first class mail. A written notice shall bedeemed to have been given to the recipient party on the earlier of (a) the dateit shall be delivered to the address required by this Agreement; (b) the datedelivery shall have been refused at the address required by this Agreement; or(c) with respect to notices sent by mail, the date as of which the postalservice shall have indicated such notice to be undeliverable at the addressrequired by this Agreement. Any and all notices referred to in this Agreement,or which either party desires to give to the other, shall be addressed asfollows:
| If to Landlord: |   | Legacy Sabre Springs, LLC                   |
|-----------------|--------|---------------------------------------------|
|            |   | 4000 East Third Avenue                      |
|            |   | Suite 600                                   |
|            |   | Foster City, California 94404-4810          |
|            |   | Attn: Paul Meyer                            |
|            |   |                                        |
| With a copy to: |   | Allen Matkins Leck Gamble & Mallory LLP |
|            |   | 515 South Figueroa Street, 7th Floor        |
|            |   | Los Angeles, California 90071               |
|            |   | Attn: Neil N. Gluck, Esq.                   |

 

E-3

----

 
| To Lender:      |   | Corus Bank, N.A.                          |
|-----------------|--------|-------------------------------------------|
|            |   | 10 S. Riverside Plaza                     |
|            |   | Chicago, Illinois 60606                   |
|            |   | Attn: James J. Dow, Vice President        |
|            |   |                                      |
| With a copy to: |   | Joel Solomon, Esq.                        |
|            |   | General Counsel and Senior Vice-President |
|            |   | Corus Bank, N.A.                          |
|            |   | 3959 N. Lincoln Avenue                    |
|            |   | Chicago, Illinois 60613                   |
|            |   |                                      |
| and             |   | Sachnoff & Weaver                     |
|            |   | 30 South Wacker Drive, 29h Floor          |
|            |   | Chicago, Illinois 60606                   |
|            |   | Attn: Cynthia Jared, Esq.                 |
|            |   |                                      |
| If to Tenant:   |   | 1ST Pacific  Bank of California      |
|            |   | 13500 Evening Creek Drive, Suite 100      |
|            |   | San Diego, California 92128               |
|            |   | Attn: Vincent Siciliano                   |

 

Any party hereto may, by notice given hereunder,designate any further or different addresses to which subsequent notices,certificates or other communications shall be sent.

The provisions of this Agreement shall bind, and inureto the benefit of, the parties hereto and their respective heirs, successorsand assigns.

IN WITNESS WHEREOF, the parties hereto have set theirhands and seals on the date set forth below.
|        |   | TENANT:                                |
|--------|--------|----------------------------------------|
|   |   |                                   |
|   |   | 1ST PACIFIC BANK OF  CALIFORNIA,  |
|   |   | a California corporation               |
|   |   |                                   |
|   |   | By:                                    |   |   |
|   |   |                                   | Name: |   |   |
|   |   |                                   | Its: |   |   |
|   |   |                                   |   |   |
|   |   | By:                                    |   |   |
|   |   |                                   | Name: |   |   |
|   |   |                                   | Its: |   |   |
|   |   |                                   |   |   |
|   |   | LENDER:                                |
|   |   |                                   |
|   |   | CORUS BANK, N.A.                       |
|   |   |                                   |
|   |   | By:                                    |   |
|   |   |                                   | James J. Dow, Vice President |   |
|   |   |                                   |   |   |
|   |   | LANDLORD:                              |   |
|   |   |                                   |   |
|   |   | LEGACY SABRE SPRINGS, LLC,             |   |
|   |   | a California limited liability company |   |
|   |   |                                   |   |   |
|   |   | By:                                    | Legacy Partners 2343 L.P., a California limited |
|   |   |                                   | partnership, its managing member |
|   |   |                                   |   |   |   |   |
|   |   |                                   | By: |   |
|   |   |                                   | Name: |   |
|   |   |                                   | Its: |   |
|        |        |                                        |  |  |  |  |  |  |  |  |  |

 

E-4

----

**EXHIBIT A**

**LEGAL DESCRIPTION**

Lots 10, 11 and 12 of the map of Sabre SpringsIndustrial Park, Unit Number 3, according to Map Number 11547, recorded in theOffice of the County Recorder of San Diego County on June 19, 1986, located inthe City of San Diego, County of San Diego, State of California

E-5

----

 
| STATE OF ILLINOIS | )     |
|-------------------|-------|
|              | ) ss: |
| COUNTY OF COOK    | )     |

 

I,                 ,a Notary Public within and for said County, in the State aforesaid, dulycommissioned and acting, do hereby certify that on this     dayof              personallyappeared before me     , the                      Presidentof Corus Bank, N.A., to me personally well known and known to be the person whosigned the foregoing instrument, and who, being by me duly sworn, stated andacknowledged that he is the                     Presidentof said Corus Bank, N.A., and that he signed and delivered the same in behalfof Corus Bank, N.A., with authority, as his and its free and voluntary act anddeed for the uses and purposes therein mentioned and set forth.

WITNESS my hand and seal as such Notary Public the dayand year in this certificate above written.
|        |   |                   |   |
|--------|--------|------------------------|--------|
|   |   | Notary Public          |
|   |   | My commission expires: |

 
| STATE OF CALIFORNIA | )     |
|---------------------|-------|
|                | ) ss. |
| COUNTY OF           | )     |

 

On                      ,before me,                      ,a Notary Public in and for said state, personally appeared                                             ,personally known to me (or proved to me on the basis of satisfactory evidence)to be the person whose name is subscribed to the within instrument andacknowledged to me that he/she executed the same in his/her authorizedcapacity, and that by his/her signature on the instrument, the person, or theentity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.
|        |   |                                |   |
|--------|--------|-------------------------------------|--------|
|   |   | Notary Public in and for said State |

 

(SEAL)

E-6

----

 
| STATE OF CALIFORNIA | )     |
|---------------------|-------|
|                | ) ss. |
| COUNTY OF           | )     |

 

On                         ,before me,                         ,a Notary Public in and for said state, personally appeared                                                   ,personally known to me (or proved to me on the basis of satisfactory evidence)to be the person whose name is subscribed to the within instrument andacknowledged to me that he/she executed the same in his/her authorizedcapacity, and that by his/her signature on the instrument, the person, or theentity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.
|        |   |                                |   |
|--------|--------|-------------------------------------|--------|
|   |   | Notary Public in and for said State |

 

(SEAL)
| STATE OF CALIFORNIA | )     |
|---------------------|-------|
|                | ) ss. |
| COUNTY OF           | )     |

 

On                        ,before me,                        ,a Notary Public in and for said state, personally appeared                                                 ,personally known to me (or proved to me on the basis of satisfactory evidence)to be the person whose name is subscribed to the within instrument andacknowledged to me that he/she executed the same in his/her authorizedcapacity, and that by his/her signature on the instrument, the person, or theentity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.
|        |   |                                |   |
|--------|--------|-------------------------------------|--------|
|   |   | Notary Public in and for said State |

 

(SEAL)

E-7

----

**EXHIBIT F**

**PROJECT SIGN CRITERIA**

**Legacy Sabre Springs13500-13520 Evening Creek Drive NorthSan Diego, CA 92128**

# **TenantSignage Criteria**

INTENT: The intent of these criteria is toestablish standards for the design and fabrication of identification signage fortenants of Legacy Sabre Springs. The requirements herein provide individualexpression for each tenant and an attractive, unified Business Center for all.

REQUIREMENTS: Tenant’s signature on a leaseagreement for space at Legacy Sabre Springs is evidence that the tenantacknowledges and agrees to the following requirements:

1.        TheLandlord shall have the exclusive right to determine which Tenants may displaySign Types A, B, C and D. See the attached Exhibits. All tenant signage shallconform to these criteria, specifically and in detail.

2.        Toconform to these criteria, the Tenant shall engage a sign design &fabrication company that is approved in writing by the Landlord.

3.        Signagewithin Legacy Sabre Springs is to identify, not advertise. Product names maynot be displayed.

4.        Signsshall be designed in a manner and with materials and colors that are compatiblewith and complementary to the overall project and associated buildingarchitecture. Tenants may adapt established typestyles, logos, images andcolors that are in use on similar buildings operated by the Tenant inCalifornia, provided that said images are architecturally compatible andapproved by the Landlord.

5.        Allsign fabrication work shall be of excellent quality. All logo images and typestylesshall be accurately reproduced. Lettering that approximates typestyles shallnot be acceptable. The Landlord reserves the right to reject any fabricationwork deemed to be below standard.

6.        Signsshall be made of permanent rust-inhibiting materials that are appropriate andcomplimentary to the associated building. Dissimilar metals shall bemechanically separated to prevent electrolysis. Stainless steel fasteners shallbe used to secure dissimilar metals.

7.        Sizesand quantities for signs shall be as outlined in the attached exhibits for eachsign type.

F-1

----

8.        TheTenant shall maintain all signs in like-new condition. The Landlord may, atTenant’s expense, replace, refurbish or remove any sign that has deteriorated.

9.        TheTenant is responsible for all expenses related to their signs, including designfees, cost of fabrication and installation, and cost of eventual sign removal,including repair of any damage to the building.

APPROVALS:

The Tenant must provide sign design drawings for the Landlord’s reviewand approval. The design drawings submitted to the Landlord will be drawn toscale and will indicate copy sizes, colors and materials.Drawings for approval should be submitted to:

Michael Nelson, Senior Property ManagerLegacy Partners Commercial, Inc.13520 Evening Creek Dr. North, Suite 130San Diego, CA 92128

Office: (858) 385-2600 Fax: (858)385-2620

CONFORMANCE: At the Tenant’s expense, the Landlordmay replace, remove or correct any sign installed without written approval, orany sign that does not conform with the design drawings as submitted.

SIGN ACCEPTABILITY: Only those sign types and signlocations specifically described herein are acceptable. There will be noexceptions without specific written approval by the Landlord. Temporary signswill not be allowed.

APPROVED SIGN DESIGN AND FABRICATION COMPANY:

The company referenced below has been approved by the Landlord todesign, produce and install the signs specified herein for Legacy SabreSprings.

Clear Sign & Design, Inc.170 Navajo Street · San Marcos, CA92069Phone: 760-736-8111 · Fax: 760-736-8121

Or other sign company approved by Landlord.

F-2

----

** **

F-3

----

 

F-4

----

 

F-5

----

 

F-6

----

 

F-7

----

 

F-8

----

**EXHIBIT G**

**VISITORPARKING LOCATION**

****

G-1

----

**RIDER**

**EXTENSIONOPTION RIDER**

ThisExtension Option Rider (“**Extension Rider**”)is made and entered into by and between LEGACY SABRE SPRINGS, LLC, a Californialimited liability company (“**Landlord**”),and 1ST PACIFIC BANK OF CALIFORNIA, a California corporation (“**Tenant**”), and is dated as of the date ofthe Office Lease (“**Lease**”) by andbetween Landlord and Tenant to which this Extension Rider is attached. Theagreements set forth in this Extension Rider shall have the same force andeffect as if set forth in the Lease. To the extent the terms of this ExtensionRider are inconsistent with the terms of the Lease, the terms of this ExtensionRider shall control.

1. OptionRight. Landlord hereby grants Tenant two (2) options to extend the LeaseTerm for a period of five (5) years each (each, an “**Option Term**”), which options shall be exercisable only bywritten Exercise Notice (as defined below) delivered by Tenant to Landlord asprovided below. Upon the proper exercise of an option to extend, the Lease Termshall be extended for the applicable Option Term. Notwithstanding theforegoing, at Landlord’s option, in addition to any other remedies available toLandlord under the Lease, at law and/or in equity, Tenant shall not have theright to extend the Lease Term for the applicable Option Term if as of the dateof delivery of the Exercise Notice by Tenant, or as of the end of the LeaseTerm (or prior Option Term, if applicable), Tenant is in default under theLease after expiration of any applicable notice and cure period. The rightscontained in this Extension Rider shall be personal to the Original Tenant andany Affiliate of Original Tenant to which Original Tenant’s entire interest inthe Lease has been assigned pursuant to Section 14.7 of the Lease and may onlybe exercised by the Original Tenant or such Affiliate assignee, as the case maybe (and not any other assignee, sublessee or other transferee of the OriginalTenant’s interest in the Lease) if the Original Tenant or such Affiliateassignee, as the case may be, occupies the entire Premises as of the date ofthe Exercise Notice.

2. OptionRent. The annual Base Rent payable by Tenant during the applicable OptionTerm (the “**Option Rent**”) shall beequal to the “Fair Market Rental Rate” for the Premises. As used herein, the “**Fair Market Rental Rate**” for purposes ofdetermining the annual Base Rent for the Option Term shall mean the annual BaseRent at which tenants, as of the commencement of the applicable Option Term,will be leasing non-sublease space comparable in size, location and quality tothe Premises for a comparable term, which comparable space is located in theBuilding, the Adjacent Building and in other comparable first class officebuildings in the Central San Diego County area, taking into consideration allfree rent and other out-of-pocket concessions generally being granted at suchtime for such comparable space for the applicable Option Term (including,without limitation, any tenant improvement allowance provided for suchcomparable space, with the amount of such tenant improvement allowance to beprovided for the Premises during the applicable Option Term to be determinedafter taking into account the age, quality and layout of the tenantimprovements in the Premises as of the commencement of the applicable OptionTerm with consideration given to the fact that the improvements existing in thePremises are specifically suitable to Tenant). All other terms and conditionsof the Lease shall apply throughout the applicable Option Term; however, Tenantshall, in no event, have the option to extend the Lease Term beyond the lastOption Term described in Section 1 above.

3. Exerciseof Options. Each of the options contained in this Extension Rider shall beexercised by Tenant, if at all, only in the following manner: (i) Tenant shalldeliver written notice (“**Interest Notice**”)to Landlord not more than ten (10) months nor less than nine (9) months priorto the expiration of the initial Lease Term (or first Option Term, asapplicable) stating that Tenant may be interested in exercising its option;(ii) Landlord, after receipt of Tenant’s Interest Notice, shall deliver notice(the “**Option Rent Notice**”) toTenant not less than seven (7) months prior to the expiration of the initialLease Term (or first Option Term, as applicable) setting forth the Option Rent;and (iii) if Tenant wishes to exercise such option, Tenant shall, on or beforethe date (the “**Exercise Date**”)which is six (6) months prior to the expiration of the initial Lease Term (orfirst Option Term, as applicable), exercise the option by delivering writtennotice (“**Exercise Notice**”) thereofto Landlord. Tenant’s failure to deliver the Interest Notice or Exercise Noticeon or before the applicable delivery dates therefor specified hereinabove shallbe deemed to constitute Tenant’s waiver of its extension right hereunder.Tenant’s failure to timely and properly exercise the first extension optionshall render all subsequent extension options (if any) null and void and of nofurther force or effect.

4. Determinationof Option Rent. Tenant shall have no right to object to the Option Rentprovided by Landlord, and if Tenant disagrees with Landlord’s determination ofthe Option Rent but Landlord and Tenant are unable to resolve such disagreementas to the Option Rent prior to the Exercise Date, then either (i) Tenant shallaccept Landlord’s determination of the Option Rent by exercising its option toextend the Lease Term by delivering Tenant’s Exercise Notice to Landlord on orbefore the Exercise Date, or (ii) Tenant shall be deemed to have relinquishedits option to extend the Lease Term, in which event Tenant’s option to extendthe Lease Term (and any subsequent right to extend the Lease Term) shall benull and void as of the Exercise Date, and Landlord and Tenant shall have nofurther liability to the other under this Extension Rider.

1

----

 
|        |   | “Landlord”:                  |
|--------|--------|----------------------------------------|
|   |   |                                   |
|   |   |                                   |
|   |   | LEGACY SABRE SPRINGS, LLC,             |
|   |   | a California limited liability company |
|   |   |                                   |
|   |   | By:                                    | Legacy Partners 2343 L.P., a California limited  partnership, its managing member |
|   |   |                                   |   |
|   |   |                                   | By: | /s/ Gary Rossi |
|   |   |                                   | Name: | Gary Rossi |
|   |   |                                   | Its: |   |
|        |        |                                        |  |  |  |  |

 
|        |   | “Tenant”:                   |
|--------|--------|---------------------------------------|
|   |   |                                  |
|   |   |                                  |
|   |   | 1ST PACIFIC BANK OF  CALIFORNIA, |
|   |   | a California corporation              |
|   |   |                                  |
|   |   | By:                                   | /s/ A. Vincent Siciliano |
|   |   |                                  | Name: | A. Vincent Siciliano |
|   |   |                                  | Its: | CEO |
|   |   |                                  |   |
|   |   |                                  |   |
|   |   | By:                                   |   |
|   |   |                                  | Name: |   |
|   |   |                                  | Its: |   |
|        |        |                                       |  |  |  |

 

2

----