**Exhibit 10.1**

SUBLEASE

**7728Regents Road, La Jolla, California**

This Sublease, dated asof this 30 day of December,1999, is entered into by and between WASHINGTON MUTUAL BANK, FA, (“Sublandlord”),and 1ST PACIFIC BANK, a California state banking corporation (Proposed) and LAJOLLA ASSOCIATION (“Subtenant”) as a Sublease under a lease dated February 10,1987, as amended by Amendment No. 1 dated December 18, 1995 (the “Master Lease”),entered into by and between La Jolla Investors, as landlord (the “Landlord”),and California Federal Savings and Loan Association, the predecessor ininterest to Sublandlord, as tenant. Sublandlord represents that a true, correctand complete copy of the Master Lease and all amendments thereto are attachedhereto as Exhibit “A”. All terms not defined herein shall have the same meaningas in the Master Lease.

1.                           Premises.Sublandlord hereby leases to Subtenant, and Subtenant hereby leases fromSublandlord, the Premises leased by Sublandlord from Landlord under the MasterLease, as shown on Exhibit “A” attached thereto.

2.                           Term.The term of this Sublease shall commence on the day immediately following theRegulatory Date, as defined in Section 16 hereof (the “Commencement Date”).Unless earlier terminated under any provision of the Master Lease or thisSublease, the term shall continue until December 31, 2002 (the “Term”). Fromthe date of execution hereof (“Execution Date”) through and including theRegulatory Date, Subtenant shall be permitted to use the Premises, subject toall of the provisions of this Sublease and the performance of all covenantscontained herein. Such period shall be referred to herein as the “EarlyPossession Period.”

3.                           Rent.Rent during the Early Possession Period shall be a non-refundable, flat fee of$5,000 for the entire Early Possession Period, payable upon execution hereof,and during

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such time Subtenant shall not be liable for anyAdditional Rent, provided,however, that Subtenant shall pay forall gas and electrical services during such period. From the Commencement Dateuntil the Rent Commencement Date, as defined herein, no Base Rent shall be duebut Subtenant shall be subject to all of the provisions of this Sublease andshall perform all covenants contained herein, including payment of allAdditional Rent. The rent commencement date (“Rent Commencement Date”) shall bethe earlier of (A) the 61st day following the Regulatory Date, or (B) April 1,2000. From the Rent Commencement Date until the end of the Term, Base Rentshall be $6,000 per month, payable monthly in advance, the first of suchpayments payable on the Rent Commencement Date. In addition to the Base Rent,Subtenant shall pay as additional rent all sums payable under Sections 5 and 13of the Master Lease (“Additional Rent” and together with the Base Rent, the “Rent”).If the Landlord under the Master Lease requires payments under Sections 5 and13 of the Master Lease to be made into an impound account as provided inSection 42 of the Master Lease, Subtenant shall make such payments at the timesand in the manner required by such Section 42. The Rent payable for any portionof a calendar month shall be a pro rata portion of the Rent payable for a fullcalendar month. Such Rent shall be paid without deduction or offset, in lawfulmoney of the United States of America to Sublandlord at Sublandlord’s addressset forth in Section 14 hereof, or at such other place as Sublandlord maydesignate in writing.

4.                           SecurityDeposit. On execution of this Sublease, Subtenant shall deposit withSublandlord the sum of $6,000 as a security deposit (the “Security Deposit”)for the performance by Subtenant of the provisions of this Sublease. IfSubtenant is in default, Sublandlord may use the Security Deposit, or anyportion of it, to cure the default or to compensate the Sublandlord for alldamage sustained by Sublandlord resulting from Subtenant’s

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default. Subtenant shall immediately on demand pay toSublandlord a sum equal to the portion of the Security Deposit expended orapplied by Sublandlord as provided in this Section 4 so as to maintain theSecurity Deposit in the sum initially deposited with the Sublandlord. IfSubtenant is not in default at the expiration or termination of this Sublease,Sublandlord shall return the Security Deposit to Subtenant. Sublandlord’sobligations with respect to the Security Deposit are those of a debtor and nota trustee. Sublandlord may maintain the Security Deposit separate and apartfrom Sublandlord’s general and other funds or may commingle the SecurityDeposit with Sublandlord’s general and other funds. Sublandlord shall not berequired to pay Subtenant any interest on the Security Deposit.

5.                           Conditionof Premises. Subtenant understands that it will accept the Premises in itscurrent “as is” condition and that Subtenant will have full responsibility formaking any improvements or decorations to the Premises necessary for the usecontemplated hereunder (“Improvements”). Sublandlord shall provide a tenantimprovement allowance of Fifteen Thousand Dollars ($15,000) to be disbursed asprovided in the Work Letter attached hereto as Exhibit “B.” Any Improvements tobe installed by Subtenant shall be subject to the approval of Landlord andSublandlord and shall be constructed in accordance with the terms of the WorkLetter, the Master Lease and applicable laws, ordinances, rules andregulations, of any government body having jurisdiction over the Premises. Atthe expiration of the Term of this Sublease, Subtenant may (and, at Landlord’soption shall) remove from the Premises all Improvements and Subtenant’spersonal property and shall repair any damage and perform any restoration workcaused by such removal.

6.                           NoServices. Sublandlord shall have no obligation to provide any services toSubtenant, or to perform any repair or maintenance of the Premises. To theextent the Master

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Lease obligates Landlord to provide such services orperform such work, such obligation shall remain exclusively with Landlord, andshall not become the obligation of Sublandlord.

7.                           Compliancewith Laws. Subtenant shall comply promptly with all applicable statutes,ordinances, rules, regulations, orders and requirements in effect during theTerm regulating Subtenant’s particular use, occupancy or improvement of thePremises. Subtenant’s obligations under this Section shall also include, butonly to the extent made necessary by the particular use or improvement of thePremises by Subtenant, compliance with the Americans With Disabilities Act.Subtenant shall be fully responsible for the cost of complying with all of theforegoing.

8.                           Incorporationby reference. The following sections of the Master Lease are incorporatedherein by reference as terms and conditions of this Sublease as though eachreference therein to “Tenant” were a reference to Subtenant, each referencetherein to “Landlord” were a reference to Sublandlord, and each referencetherein to “Lease” were a reference to this Sublease:

(a)                                       Sections1, 5, 6, 9, 10, 12, 13, 15, 17, 18, 20-24, 26, 27, 29, 31-41, 43.

(b)                                      Sections8 and 11 (except that the term “Landlord” shall mean the Landlord under theMaster Lease, and not the Sublandlord, and provided that subsection (a) shallnot be applicable).

(c)                                       Section19 (except that the term “Landlord” shall refer to both the Landlord under theMaster Lease and the Sublandlord under this Sublease).

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(d)                                      Section14 (except that both Landlord under the Master Lease and Sublandlord shall benamed as additional insureds under insurance policies which Subtenant isrequired to obtain under this Section).

9.                           Signage.Subject to the Landlord’s prior written consent, Subtenant shall have the sameright to signage as the Sublandlord as provided by Section 16 of the MasterLease.

10.                     Approval.Prior to taking any action with respect to the Premises that would require theSublandlord to obtain the Landlord’s approval under the Master Lease, theSubtenant must first obtain approval from both the Sublandlord and theLandlord.

11.                     No RenewalOption. Nothing herein shall be construed as permitting Subtenant hereunderto exercise any extension or renewal rights or to exercise any right of firstrefusal to purchase the Premises or expand the Premises, if any such rightsexist, and in no event shall Sublandlord be obligated to extend the term of theMaster Lease for any reason.

12.                     Indemnity.Subtenant shall indemnify, protect, defend and hold harmless (collectively, to “indemnify”)the Premises, Landlord and Sublandlord and their agents, partners and lenders,from and against any and all claims, loss of rents and/or damages, liens,judgments, penalties, attorneys’ and consultants’ fees, expenses and/orliabilities (“Damages”) arising out of, involving, or in connection with, theuse and/or occupancy of the Premises by Subtenant, provided, however,that Subtenant shall not indemnify Landlord or Sublandlord with respect toDamages caused by Landlord’s or Sublandlord’s gross negligence or willfulmisconduct. If any action or proceeding is brought against Landlord orSublandlord by reason of any of the foregoing matters, Subtenant shall uponnotice defend the same at Subtenant’s expense by counsel reasonably satisfactory to Landlord and Sublandlord, andSublandlord shall cooperate

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with Subtenant in such defense. Landlord andSublandlord need not have first paid any such claim in order to be defended orindemnified.

Sublandlord shallindemnify, protect, defend and hold harmless the Subtenant and its agents,partners and lenders, from and against any and all Damages arising out of (i)events occurring prior to the date Subtenant first occupies the Premises, and(ii) Sublandlord’s failure to pay Rent under the Master Lease. If any action orproceeding is brought against Subtenant by reason of such Damages, Sublandlordshall upon notice defend the same at Sublandlord’s expense, and Subtenant shallcooperate with Subtenant in such defense. Subtenant need not have first paidany such claim in order to be defended or indemnified.

13.                     HazardousSubstances. Subtenant shall not use or allow the use of any substance whichconstitutes a hazardous substance under any applicable law, rule or regulation.Notwithstanding the foregoing, Subtenant may use any ordinary and customarymaterials reasonably required to be used in the normal course of its business,so long as such use is in compliance with all applicable laws, and does notexpose the Premises or neighboring properties to any risk of contamination ordamage or expose Landlord or Sublandlord to any liability therefor. IfSubtenant knows, or has reasonable cause to believe, that a hazardous substancehas come to be located in, on, under or about the Premises, Subtenant shallimmediately give written notice of such fact to Sublandlord, and provideSublandlord with a copy of any report, notice, claim or other documentationwhich it has concerning the presence of such hazardous substance.

14.                     Notices.Any notice required or desired to be given under this Sublease shall be inwriting and shall be addressed to the address of the party to be served, at theaddress provided in this Section. Each notice shall be deemed effective andgiven (i) upon receipt, if personally delivered (which shall include deliveryby courier or overnight delivery service), (ii)

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upon being telephonically confirmed as transmitted, ifsent by telegram, telefax or telecopy, and (iii) two (2) business days afterdeposit in the United States Mail, certified and postage prepaid, and properlyaddressed to the party to be served. Either party hereto may from time to time,by written notice to the other in accordance with this Section, designate adifferent address than that set forth below for the purpose of Notice.

If to Sublandlord:

Washington Mutual Bank, FA1201 Third Avenue, Suite 800Seattle, Washington 98101Attn: Corp. Property Services Manager

If to Subtenant:

Robert HildtAt the Premises

15.                     Broker’sFees. Each party represents and warrants to the other parties that it hasnot engaged any broker, finder or other person who would be entitled to anycommission or fees (other than CB Richard Ellis as Sublandlord’s broker), inrespect of the negotiation, execution or delivery of this Sublease and shallindemnify and hold harmless the other parties against any loss, cost, liabilityor expense incurred by such parties as a result of any claim asserted by anysuch broker, finder or other person on the basis of any arrangements oragreements made or alleged to have been made by or on behalf of such party.

16.                     Contingency.This Sublease is subject to and contingent upon (a) Landlord’s execution of theConsent to Sublease in substantially the form attached hereto within fifteen(15) days of the date hereof . In the event Landlord does not so execute suchConsent to Sublease within such time, either party may terminate this Subleaseupon written notice to the other. In addition, in the event Subtenant does notreceive approval from the applicable regulatory

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authorities to operate a banking business at thePremises on or before March 1, 2000, either Landlord or Subtenant may terminatethis Lease by written notice to the other, in which case the security depositpaid hereunder shall be refunded to Subtenant. The date upon which suchapproval is given shall be referred to herein as the “Regulatory Date.”

17.                     Ratificationof Sublease. As 1st Pacific Bank is, as of the date first written above, anentity that is incorporated and does not yet have the requisite approvals totransact business in its name, this Sublease is being executed by La JollaAssociation, its predecessor in interest, on behalf of 1st Pacific Bank. LaJolla Association and 1st Pacific Bank hereby agree that 1st Pacific Bank willexecute the Sublease in the space provided below once it is incorporated andreceives such approvals. La Jolla Association hereby agrees that it willindemnify Sublandlord for any and all damages, costs or expenses incurred bySublandlord in the event that 1st Pacific Bank fails to so execute thisSublease after the receipt of such approvals.

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IN WITNESS WHEREOF, the undersigned have executed thisSublease as of the day and date first written above.

 
|        | ** ** | **SUBLANDLORD:**                       |
|--------|------------|----------------------------------------|
|   | ** ** | ** **                             |
|   | ** ** | **WASHINGTON MUTUAL BANK, FA**         |
|   | ** ** | ** **                             |
|   | ** ** | ** **                             |
|   |       | By                                     |   | /s/ Craig Kennedy |   |
|   |       |                                   | Name: | Craig Kennedy |
|   |       |                                   | Title: |   VICE PRESIDENT |
|   | ** ** | ** **                             |
|   | ** ** |                                   |
|   | ** ** | **SUBTENANT:**                         |
|   | ** ** |                                   |
|   | ** ** | **LA JOLLA ASSOCIATION**               |
|   | ** ** | ** **                             |
|   | ** ** | ** **                             |
|   |       | By                                     |   | /s/ Donald W. McVay |   |
|   |       |                                   | Name: | Donald W. McVay |
|   |       |                                   | Title: | Member |
|   |       |                                   |
|   |       | AFTER RECEIPT OF APPROVALS:            |
|   |       |                                   |
|   | ** ** | **1ST PACIFIC BANK OF CALIFORNIA**     |
|   | ** ** | ** **                             |
|   | ** ** | ** **                             |
|   |       | By                                     |   | /s/ Robert B. Hildt |   |
|   |       |                                   | Name: |  Robert B. Hildt |
|   |       |                                   | Title: |  PRES/CEO |
|   |       |                                   |
|   |       | Date of execution by 1st Pacific Bank: |
|   |       |                                   |
|   |       | 06, 05, 2000.                          |
|        |            |                                        |  |  |  |  |  |  |  |

 

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**EXHIBIT “A”**

**LEASE**

**LA JOLLA,Regents/Arriba**

This Lease is entered into as of the 10th day ofFebruary, 1987, by and between LA JOLLA INVESTORS, a general partnership, (“Landlord”),and CALIFORNIA FEDERAL SAVINGS AND LOAN ASSOCIATION, (“Tenant”). Landlord andTenant are hereinafter sometimes referred to as a party or the parties.

WITNESSETH

1.                          USE.Landlord hereby leases to Tenant and Tenant hereby hires from Landlord, solelyfor the purpose of conducting thereon a savings and loan facility, and for noother purpose, those certain premises with appurtenances described ashereinafter set forth.

2.                          PREMISES.The premises leased to Tenant, together with appurtenances (the “Premises”),are situated in the City of San Diego, county of San Diego, State of California.The Premises are located in a Shopping Center (the “Shopping Center”). ThePremises are crosshatched on the site plan of the Shopping Center attachedhereto as Exhibit “A” (the “Site Plan”). The Premises shall have a frontage ofapproximately Fifty (50’) feet (said measurement being from center of partitionto center of partition with respect to interior stores and from center ofpartition to outside wall with respect to end locations), and a depth ofapproximately Sixty (60’) feet (outside dimensions).

3.                          TERM.The term of this Lease shall be for a period of Ten (10) years. The term ofthis Lease and Tenant’s obligation to pay rent, shall commence on the earlierof the following dates: (a) the date which is Ninety (90) days after Landlordnotifies Tenant in writing that the improvements to be provided by Landlord asset forth in Exhibit “B” attached hereto have been substantially completed, or(b) Landlord agrees to notify Tenant approximately sixty (60) days beforeLandlord’s improvements are substantially completed and Landlord agrees tocooperate with Tenant so that Tenant may commence Tenant’s improvement work assoon thereafter as possible. In the event the Premises are not substantiallycompleted and possession thereof delivered to Tenant on or before one (1) yearfrom the date of this Lease, then and in that event, this Lease shall be deemednull and void, have no further force or effect, and any security deposit madeherewith shall be promptly returned to Tenant, and the parties shall have nofurther obligation to each other. See Article 44.

4.                          RENTAL.

(a)                      GuaranteedMinimum Monthly Rental. Tenant shall pay to Landlord during the term ofthis Lease as guaranteed minimum monthly rental for the Premises the sum ofFive Thousand Eight Hundred Fifty and no/100 ($5,850.00) Dollars per month.Should the term of this Lease not commence on the first day of a calendarmonth, the term of this Lease shall be extended for such fractional month. Inthat event, Tenant shall pay rent in advance for such fractional month on a perdiem basis (calculated on the basis of a thirty (30) day month) until the firstday of the next month, and thereafter the guaranteed minimum monthly rentalshall be paid in equal installments on the first day of each and every month inadvance. All amount to be paid by Tenant to Landlord under this Lease shall bein lawful money of the United States of America and shall be paid withoutdeduction or offset, prior notice or demand at the address designated inArticle 30. Any payment due from Tenant to Landlord not paid within thirty (30)days of its due date shall be subject to a five percent (5%) late charge.

(b)                     Increasesin Guaranteed Minimum Monthly Rental. Effective on July 1, 1988, and onJuly 1st of each year thereafter during the term of this Lease, the guaranteedminimum monthly rental shall be adjusted by multiplying the guaranteed minimummonthly rental then if effect by a fraction (i) which fraction shall have asits numerator the Consumer Price Index for the preceding month of June and (ii)which fraction shall have as its denominator the Consumer Price Index for themonth of June for the prior year (except during the first year of the term of

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June of the prior year).  In noevent shall the guaranteed minimum monthly rental be decreased from theguaranteed minimum monthly rental in effect immediately before each suchadjustment, * The phrase “Consumer Price Index” shall mean the Consumer PriceIndex For All Urban Consumers – All Items, for the United States, as publishedmonthly by the United States Department of Labor, in which 1967 equals 100. Ifthe Consumer Price Index is no longer published at an adjustment date, then themost similar index published by any branch or department of the United StatesGovernment shall be used, and if none is so published, then anothernon-partisan index evaluating the information theretofore used in compiling theConsumer Price Index and generally recognized as authoritative on the impact ofcost of living increases on commercial property rentals shall be used.

5.                          REALESTATE TAXES AND RENTAL TAX. In addition to all rentals herein reserved,Tenant shall pay to Landlord as additional rent Tenant’s pro rata share of theannual real estate taxes and assessments levied upon the Premises and theparking and common areas of the Shopping Center. Such amount shall be paid byTenant within ten (10) days after receipt by Tenant of a semi-annual statementfrom Landlord setting forth the amount of such tax based upon the actual taxbill received by Landlord. Landlord, at its option, shall have the right toestimate the amount of taxes next due and to collect and impound from Tenant ona basis not more frequently than monthly the amount of Tenant’s estimated taxobligation, as described in Article 42.

*                    norshall said rental be increased by more than Three Percent (3%) at anyadjustment date. Said increase limitation shall not apply during the optionperiods.

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In the event the Premises and a pro rata share of theparking and common areas are not separately assessed, the real estate taxes andassessments with respect to the Premises and the parking and common areas shallbe determined by the ratio that the floor area of the Premises, excludingmezzanine, if any, bears to the total floor area, excluding mezzanines, of the buildingor buildings which includes the Premises and for which a separate assessment ismade. In the event such separate assessment does not reflect a pro rata shareof the parking and common areas based upon the ratio of building area toparking and common areas shown on the Site Plan, an appropriate adjustmentshall be made by Landlord in its reasonable discretion.

The real estate taxes and assessments for the year inwhich this Lease commences and ends shall be prorated. With respect to anyassessment which may be levied against or upon the Premises and which may beevidenced by improvement or other bonds, payable in installments, only theinstallment payments on said assessment shall be included in computing Tenant’sobligation for real estate taxes and assessments.

The term “real estate taxes and assessments” as usedherein shall be deemed to mean all taxes imposed upon the real property andimprovements constituting the Premises or the Shopping Center, and allassessments levied against or which encumber the Premises or the ShoppingCenter during the term of the Lease, but shall not include personal incometaxes, personal property taxes, inheritance taxes or franchise taxes leviedagainst Landlord, but not against the Premises or the Shopping Center, even thoughsuch taxes may become a lien against the Premises or the Shopping Center.

Tenant shall pay to Landlord any and all taxes andimpositions imposed in lieu of, or as a supplement to, real estate taxes andassessments, all excise, privilege and other taxes, other than net income andestate taxes, levied or assessed by any federal, state or local authority uponthe rent and other amounts payable by Tenant to Landlord hereunder, and Tenantshall bear any business or license tax imposed upon Landlord by anygovernmental authority which is based or measured in whole or in part byamounts charged or received by Landlord from Tenant under this Lease.

6.                          PERSONALPROPERTY TAXES. During the term of this Lease, Tenant shall pay prior todelinquency all taxes assessed against and levied upon trade fixtures,furnishings, equipment and all other personal property of Tenant located in thePremises, and when possible Tenant shall cause said trade fixtures,furnishings, equipment and other personal property of Tenant to be assessed andbilled separately from the real property of Landlord. In the event any or allof Tenant’s trade fixtures, furnishings, equipment and other personal propertyshall be assessed and taxed with Landlord’s real property, Tenant shall pay toLandlord Tenant’s share of such taxes within ten (10) days after delivery toTenant by Landlord of a state­ment in writing setting forth the amount of suchtaxes applicable to Tenant’s personal property.

7.                          CONSTRUCTION.After the execution of this Lease, Landlord shall at its sole cost and expensecommence and pursue to completion the construction of the Premises to theextent shown on Exhibit “B” attached hereto.

8.                          PARKINGAND COMMON AREAS. The parking and common areas of the Shopping Center shallbe available for the non-exclusive use of Tenant during the full term of thisLease and any extension of the term of this Lease; provided that thecondemnation or other taking by any public authority, or sale in lieu ofcondemnation, of any or all of the parking and common areas shall notconstitute a violation of this covenant. Landlord reserves the right to changethe entrances, exits, traffic lanes and the boundaries and locations of suchparking and common areas. This Lease shall be subordinate to any agreementexisting as of the date of this Lease, or to any agreement subsequentlyexecuted, which encumbers the real property of which the Premises are a part,which agreement provides for reciprocal easements and restrictions pertainingto the parking and common areas, and in the event of conflict between theprovisions of such agreement and this Lease, the provisions of said agreementshall prevail. Provided, however, nothing therein shall cause Tenant to pay agreater share of the parking and common areas maintenance cost than hereinprovided, and provided further that there shall at all times be maintainedparking and common areas of not less than two (2) square feet of parking andcommon areas for each square foot of ground floor building area within the ShoppingCenter.

(a)                      Priorto the date Tenant is to occupy the Premises, Landlord shall improve theparking and common areas.

(b)                     Landlordshall keep or cause to be kept the parking and common areas in a neat, cleanand orderly condition, properly lighted and landscaped, and shall maintain,repair and/or replace the facilities thereof as necessary in Landlord’sreasonable discretion. All costs incurred in connection with the parking andcommon areas shall be charged to the tenants of the Shopping Center and proratedin the manner hereinafter set forth. The phrase “costs incurred in connectionwith the parking and common areas” as used herein shall be construed toinclude, but not be limited to, all sums expended by landlord in connectionwith the parking and

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common areas for resurfacing, repaving,painting, restriping, cleaning, sweeping, janitorial services, planting,replanting and landscaping, electricity and other utilities, repair andreplacement of lighting standards, directional signs and other markers and bumpers;maintenance of facilities which support the Shopping Center which are notlocated in the Shopping Center; general maintenance and repairs; personnel toimplement such services and to police the parking and common areas; requiredfees or charges levied pursuant to any governmental requirements; maintenanceof common utility lines; public liability and property damage insurance on theparking and common areas, which shall be carried and maintained by Landlord andunder which Tenant shall be named as an additional insured, with limits asdetermined by Landlord from time to time; and a fee equal to ten (10%) percentof said costs to Landlord for Landlord’s supervision of the maintenance, repairand/or replacement of parking and common areas as hereinabove described.

Landlord shall periodicallysend to Tenant a statement, itemizing in reasonable detail, the total costsincurred in connection with the parking and common areas, and Tenant shall payto Landlord as additional rent, Tenant’s pro rata share of such costs withinten (10) days after receipt of said statement. Tenant’s pro rata share shall bedetermined by the ratio that the number of square feet of gross floor area inthe Premises bears to the total number of square feet of gross floor area ofall buildings in the Shopping Center which have been completed as of thecommencement of the billing period. There shall be appropriate adjustment ofTenant’s share of said expenses as of the commencement and expiration of theterm of this Lease. The term “gross floor area” shall mean floor area withmeasurements from the outside of exterior walls and from the center of interiorwalls, exclusive of mezzanines. Landlord may, at its option, estimate theamount of the costs incurred in connection with the parking and common areasnext due and collect and impound from Tenant, on a basis not more frequentlythan monthly, the amount of Tenant’s pro rata share as described in Article 42.

(c)                      Tenant,for the use and benefit of Tenant, its agents, employees, customers, licenseesand subtenants, shall have the non-exclusive right in common with Landlord, andother present and future owners, tenants, and their agents, employees,customers, licensees and subtenants of the Shopping Center, to use the parkingand common areas during the term of this Lease, and any extensions thereof, foringress and egress and automobile parking and pedestrian movement, provided,however, Tenant and Tenant’s employees shall park their automobiles in thoseareas designated by Landlord for employee parking, or at Landlord’s writtenrequest shall park their automobiles outside of the Shopping Center.

(d)                     Tenant,in the use of parking and common areas, shall comply with such reasonable rulesand regulations as Landlord may adopt from time to time for the orderly andproper operation of the parking and common areas.

(e)                      Tenantshall at its expense arrange for the collection of its trash, unless Landlordelects to provide trash collection as a part of the maintenance of the parkingand common areas, in which case trash collection shall be a cost incurred inconnection with the parking and common areas.

9.                          COMPLIANCEWITH INSURANCE REQUIREMENTS. Tenant shall not use, or permit the Premisesor any part thereof, to be used for any purpose or purposes other than thepurpose or purposes for which the Premises are hereby leased; and no use shallbe made or permitted to be made of the Premises, nor acts done, which willincrease the existing rate of insurance for the building in which the Premisesare located (once said rate is established), or cause a cancellation of anyinsurance policy covering said building or any part thereof, nor shall Tenantsell or permit to be kept, used or sold in or about the Premises any articlewhich may be prohibited by standard form of fire insurance policies. Tenantshall, at Tenant’s sole cost, comply with any and all requirements, pertainingto the use of the Premises, of any insurance organization or company necessaryfor the maintenance of reasonable fire and public liability insurance, coveringsaid building and appurtenances. In the event Tenant’s use of the Premises, asrecited in Article 1 hereof, results in a rate increase for the building ofwhich the Premises are a part, Tenant shall pay annually on the anniversarydate of this Lease, as additional rent, a sum equal to that of the additionalpremium occasioned by said rate increase.

10.                    FIXTURESAND ALTERATIONS. Tenant agrees to promptly fixturize the Premises in amanner comparable to Tenant’s other savings and loan branches. Tenant shall notthereafter make or suffer to be made, any alterations to the Premises, or anypart thereof, without the prior written consent of Landlord, and any additionsto, or alterations of, the Premises, except movable furniture, equipment andtrade fixtures, shall become at once a part of the realty and belong toLandlord. Any personal property belonging to Tenant and left at the Premisesafter the expiration or earlier termination of this Lease shall at the optionof Landlord be deemed abandoned.

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Any alteration of or improvement to the Premises shall be inconformance with the requirements of all municipal, state and federalauthorities.

11.                    MAINTENANCEAND REPAIR. Tenant shall, subject to Landlord’s obligations hereinafterprovided, at all times during the term hereof, and at Tenant’s sole cost andexpense, keep, maintain and repair the Premises and each part thereof ingood  and sanitary order and condition(except as hereinafter provided) including without limitation, the maintenanceand repair of any storefront, doors, window casements, glazing, plumbing, pipes,electrical wiring and conduits, and the heating, ventilating and airconditioning system, including the maintenance of a service contract with areputable heating and air conditioning contractor approved by Landlord. *Tenantshall repair any damage caused to any portion of the Premises as a result ofany criminal or attempted criminal activity such as robbery or burglary,** Tenantshall also at its sole cost and expense make all alterations or improvements tothe Premises necessitated as a result of the requirement of any municipal,state or federal authority. Tenant hereby waives any right which it may have tomake repairs at the expense of Landlord, and Tenant hereby waives all rightsprovided for by Section 1941 of the Civil Code of the State of California tomake such repairs. By entering into the Premises, Tenant shall be deemed tohave accepted the Premises as being in good and sanitary order, condition andrepair, and Tenant agrees upon the expiration or earlier termination of thisLease to surrender the Premises with appurtenances, in the same condition aswhen received (with the addition of fixtures and leasehold improvements whichhave become the property of Landlord), reasonable use and wear thereof anddamage by fire, act of God or by the elements excepted. Tenant shallperiodically sweep and clean the sidewalks adjacent to the Premises, as needed.

Landlord shall, subject toTenant’s reimbursement of Landlord as herein provided, maintain in good repairthe exterior walls and roof of the Premises, and sidewalks adjacent to thePremises. Tenant shall not, nor will it authorize any person to, go onto theroof of the building of which the Premises are a part, without the priorwritten consent of Landlord. Said consent will be given only upon Landlord’ssatisfaction that any repairs necessitated as a result of Tenant’s action willbe made by Tenant, at Tenant’s expense, and will be made in such a manner so asnot to invalidate any guarantee relating to said roof. Landlord shall not berequired to make any repairs to the exterior walls, roof and sidewalks unlessand until Tenant has notified Landlord in writing of the need for such repairsand Landlord shall have had a reasonable period of time thereafter to commenceand complete said repairs. In no event shall Tenant, without Landlord’s priorwritten consent, cut a hole in or other-wise penetrate the roof, floor or wallsof the Premises for any purpose. Tenant shall reimburse Landlord, as additionalrent, for Tenant’s pro rata share of the cost of all repairs and maintenanceincurred by Landlord in this Article, said pro rata share to be determinedaccording to the gross floor area of the Premises as it relates to the totalgross floor area of the building of which the Premises are a part.

12.                    COMPLIANCE WITH LAWS: WASTE AND NUISANCE. Tenant shall, at its sole cost and expense,comply with all of the requirements of all municipal, state and federalauthorities which now, may hereafter have jurisdiction over the use of the Premises,and shall faithfully observe in said use all municipal ordinances and state andfederal statutes now in force or**whichshall hereinafter be in force. The judgment of any court of competentjurisdiction, or the admission of Tenant in any action or proceeding againstTenant, whether Landlord be a party thereto or not, that Tenant has violatedany such order or statute in said use, shall be conclusive of that fact asbetween Landlord and Tenant.

Tenant shall not commit, or suffer to be committed,any waste upon the Premises, or any nuisance or other act or thing which maydisturb the quiet enjoyment of any other tenant in the Shopping Center.

13.                    INSURANCE. Landlord shall maintain fire and extended coverage insurancethroughout the term of this Lease in an amount equal to the full replacementcost of the building which includes the Premises, together with such otherinsurance as may be required by Landlord’s lender, around lessor and/or by anygovernmental agency. At Landlord’s option such insurance may include coveragefor loss of rents and/or the peril of earthquake.

Tenant hereby waives anyright of recovery from Landlord, and the fee owner of the Shopping Center andall intervening ground lessors (the “Prior Interest Holders”), their officers,shareholders, directors, partners, agents and employees, and Landlordhereby waives any right of recovery from Tenant, its officers, or employees,for any loss or damage (including incidental and consequential loss) resultingfrom any of the perils insured against pursuant to the terms of this Lease.

Tenantshall pay to Landlord, as additional rent, Tenant’s pro rata share of the costof said insurance, to be determined by the relationship that the gross floorarea of the Premises (excluding mezzanine) bears to the total gross floor areaof the building or buildings, excluding mezzanine for which such policyrelates. Landlord may estimate the cost of said insurance and collect andimpound Tenant’s share of said cost not more frequently than monthly asdescribed in Article 42.

*                    Notwithstandingthe foregoing, Landlord hereby acknowledges that Tenant shall have the right toutilize its own employees to maintain all hearing, ventilating and airconditioning systems located on the Premises and, if Tenant so utilizes itsemployees, Tenant will not be required to enter into a service contractcovering maintenance of these systems.

**             provided, however,that Landlord shall be liable to repair any damage resulting from such criminalactivity caused by the willful or negligent conduct of Landlord, its employeesor assigns.

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Tenant, if involved in food preparation andsales as a café, restaurant, or similar use, and/or food takeout service, shallinstall, at its expense, such improvements as are unique to said business asmay be required by any governmental authority, and shall install, at Tenant’sexpense, fire protective systems in grill, deep fry and cooking areas, and suchsystem when installed shall qualify for full fire protective credit allowed bythe fire insurance rating and regulatory body in whose jurisdiction thePremises are located.

14.                    INDEMNIFICATIONOF LANDLORD - LIABILITY INSURANCE BY TENANTS. Tenant, as a material part ofthe consideration to be rendered to Landlord under this Lease, hereby waivesall claims against Landlord and the Prior Interest Holders for damage to goods,wares and merchandise, in, upon or about the Premises and for injuries or deathto persons in or about the Premises, from any cause arising at any time. Tenantshall hold Landlord and the Prior Interest Holders free and harmless from deathor injury to any person, or damage to the goods, wares, merchandise or otherproperty of any person, arising from the use of the Premises by Tenant, or fromthe failure of Tenant to keep the Premises in good condition and repair, asherein provided.

During the term of this Lease, Tenant shall, at Tenant’ssole cost and expense, but for the mutual benefit of Landlord, the PriorInterest Holders and Tenant, maintain general public liability insuranceagainst claims for injury or death to persons or damage to property occurringin, upon or about the Premises and on any sidewalks directly adjacent to thePremises. The limitation of liability of such insurance shall be not less thanThree Hundred Thousand Dollars ($300,000) with respect to injury or death ofany one person and to the limit of not less than Five Hundred Thousand Dollars($500,000) with respect to any one accident and to the limit of not less thanOne Hundred Thousand Dollars ($100.000) with respect to property damage. All suchpolicies of insurance shall be written by an insurance company approved byLandlord, and shall be issued in the name of Landlord, the Prior InterestHolders and Tenant for the mutual and joint benefit and protection of suchparties, and such policies of insurance or copies thereof shall be delivered toLandlord.**

15.                    FREEFROM LIENS. Tenant shall keep the Premises and the Shopping Center freefrom any liens arising out of any work performed, materials furnished, orobligations incurred by Tenant whether incurred in connection with Tenant’soriginal fixturization, or subsequent alterations or repairs.

16.                    SIGNS.Tenant shall not place or permit to be placed any sign upon the exterior, or inthe windows (or within two (2) feet thereof), of the Premises without landlord’sprior written consent, nor shall Tenant change the color or exterior appearanceof the Premises without Landlord’s prior written consent. Landlord’s approvedsign criteria drawings are attached hereto as an Exhibit, or if not availableas of the execution of this Lease shall be provided to Tenant by Landlord priorto the commencement of the term hereof. Tenant shall at its sole cost andexpense prepare sign construction drawings, in accordance with said criteriadrawings, which shall be submitted to Landlord for Landlord’s written approval.Tenant shall install a sign in accordance with the approved sign constructiondrawings within thirty (30) days after the commencement of the term of thisLease.*

17.                    SPECIALSALES. Tenant shall not without Landlord’s prior written consent display orsell merchandise outside the defined exterior walls and permanent doorways ofthe Premises. Tenant shall not conduct or permit to be conducted any sale byauction in, upon or from the Premises, whether said auction be voluntary,involuntary, pursuant to any assignment for the benefit of creditors, orpursuant to any bankruptcy or other insolvency proceeding. Tenant shall notconduct a going out of business sale without Landlord’s prior written consent.

18.                    UTILITIES.Tenant shall pay before delinquency all charges for water, gas, heat,electricity, power, telephone service, and all other public services andservices of utilities used in, upon or about the Premises by Tenant or any ofits sub tenants, licensees or concessionaires during the term of this Lease. Ifany utility is not separately metered, Tenant shall reimburse Landlord forTenant’s pro rata cost of said service. In the event Tenant utilizes aninordinate amount of a utility which is not separately metered, Tenant’s sharewill be appropriately adjusted.

19.                    ENTRY ANDINSPECTION. Tenant shall permit Landlord, the Prior Interest Holders andtheir agents to enter into and upon the Premises at all reasonable times for thepurpose of inspecting the same or for the purpose of maintaining the buildingin which the Premises are located, or for the purpose of making repairs,alterations or additions to any other portion of said building, including theerection and maintenance of such scaffolding, canopies, fences and props as maybe required, or for the purpose of posting notices of non-responsibility foralterations, additions or repairs of Tenant, or for the purpose of placing uponthe property in which the Premises are located any usual or ordinary “For Sale”signs. Landlord and the Prior Interest Holders shall be permitted to do any ofthe above without any rebate of rent and without any liability to Tenant forany loss of occupation or quiet enjoyment of the Premises thereby occasioned.Tenant shall permit Landlord, at any time within ninety (90) days prior to theexpiration of this Lease, to place upon the Premises any usual or ordinary “ForLease” signs, and during such ninety (90) day period Landlord or its agentsmay, during normal business hours, enter the Premises and exhibit same toprospective lessees.

*                    Landlordagrees that Tenant, at Tenant’s own cost and expense, may install the ArribaStreet monument and all other building signs set forth on Exhibit “C” hereof.In addition, Tenant shall have the right to install window lettering or decalscustomary with other Cal-Fed locations. However, no signs shall be installeduntil all required governmental permits and approvals have been obtained andTenant has paid all fees pertaining thereto.

**             Notwithstandinganything herein contained. Landlord hereby acknowledges that Tenant shall havethe right to self-insure.

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20.                    DAMAGEAND DESTRUCTION OF THE PREMISES.  Inthe event (a) of partial or total destruction of the Premises or the buildingin which the Premises are located during the term of this Lease which requiresrepairs to either the Premises or said building, or (b) the Premises or thebuilding in which the Premises are located are declared unsafe or unfit foroccupancy by any authorized public authority for any reason other than Tenant’sacts, omissions, uses or occupation, which declaration requires repairs toeither the Premises or said building. Landlord shall forthwith make saidrepairs, provided Tenant gives to Landlord thirty (30) days prior writtennotice of necessity therefor. No such partial destruction (including anydestruction necessary in order to make repairs required by any declaration madeby any public authority) shall annul or void this Lease, except that Tenantshall be entitled to a proportionate reduction of guaranteed minimum monthlyrental while such repairs are being made, such proportionate reduction to bebased upon the extent to which the making of such repairs shall interfere withthe business carried on by Tenant in the Premises. However, if, (i) during thelast four (4) years of the term of this Lease the building in which thePremises are located is damaged as a result of fire or any other insuredcasualty to an extent in excess of twenty-five percent (25%) of its thenreplacement cost (excluding foundation(s)); or (ii) the building is so damagedat anytime by a casualty not insured against; or (iii) fifty percent (50%), ormore, of the total floor area of the buildings in the Shopping Center aredamaged or destroyed by any casualty, at anytime, Landlord or Tenant may withinthirty (30) days following the date such damage occurs terminate this Lease bywritten notice to Tenant. If Landlord, however, elects to make repairs, andprovided Landlord uses due diligence in making said repairs, this Lease shallcontinue in full force and effect, and the guaranteed minimum monthly rentalshall be proportionately reduced as hereinabove provided. If Landlord elects toterminate this Lease, all rentals shall be prorated between Landlord and Tenantas of the date of such destruction.

In respect to any partial or total destruction(including any destruction necessary in order to make repairs required by anysuch declaration of any authorized public authority) which Landlord isobligated to repair or may elect to repair under the terms of this Article 20,Tenant waives any statutory right Tenant may have other­wise had to cancel thisLease as a result of such destruction.

21.                    ASSIGNMENTAND SUBLETTING. Tenant shall not assign this Lease, or any interest therein(including but not limited to encumbering this Lease), and shall not sublet thePremises or any part thereof, or any right or privilege appurtenant thereto, orpermit any other person (the agents and servants of Tenant excepted) to occupyor use the Premises, or any portion thereof, without first obtaining thewritten consent of Landlord. Landlord shall not unreasonably withhold itsconsent to a sublease. Consent by Landlord to one assignment, subletting, occupationor use by another person shall not be deemed to be a consent of any subsequentassignment, subletting, occupation or use by another person. Consent to anassignment shall not release Tenant from liability for the continuedperformance of the terms and provisions on the part of Tenant to be kept andperformed, unless Landlord specifically releases Tenant from said liability inwriting. Any assignment or subletting without the prior written consent ofLandlord shall be void, and shall, at the option of Landlord, terminate thisLease. Neither this Lease nor any interest therein shall be assignable, as tothe interest of Tenant, by operation of law, without the prior written consentof Landlord.

22.                    DEFAULT.If Tenant fails to make any payment required by the provisions of this Lease,when due, or fails within thirty (30) days after written notice thereof tocorrect any breach or default of the other covenants, terms or conditions ofthis Lease, or if Tenant abandons the Premises before the end of the term,Landlord shall have the right at any time thereafter to elect to terminate thisLease and Tenant’s right to possession hereunder. Upon such termination,Landlord shall have the right to recover against Tenant:

(a)                      Theworth at the time of award of the unpaid rent which had been earned at the timeof termination;

(b)                     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 the Tenant proves could have been reasonably avoided;

(c)                      Theworth at the time of award of the amount by which the unpaid rent for thebalance of the term after the time of award exceeds the amount of such rentalloss that the Tenant proves could be reasonably avoided; and

(d)                     Anyother amount necessary to compensate Landlord for all the detriment proximatelycaused by Tenant’s failure to perform its obligations under the Lease or whichin the ordinary course of things would be likely to result therefrom.

The “worth at the time of award” of the amountsreferred to in subparagraphs (a) and (b) above shall be computed by allowinginterest at Union Bank’s prime rate in effect from time to time (i.e.floating), but not more than the maximum rate allowed by law. The worth at thetime of award of the amount referred to in subparagraph (c) shall be computedby discounting such amount at the discount rate of the Federal Reserve Bank ofSan Francisco at the time of award, plus one percent (1%).

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Such efforts as Landlord may make to mitigate thedamages caused by Tenant’s breach of this Lease shall not constitute a waiverof Landlord’s right to recover damages against Tenant hereunder, nor shallanything herein contained affect Landlord’s right to indemnification against Tenantfor any liability arising prior to the termination of this Lease for personalinjuries, wrongful death and/or property damage, and Tenant shall indemnify and hold Landlord harmless from anysuch injuries and damages, including all attorney’s fees and costs incurred byLandlord in defending any action brought against Landlord for any recoverythereof, and in enforcing the terms and provisions of this indemnificationagainst Tenant.

Notwithstanding any of the foregoing, the breach ofthis Lease by Tenant, or an abandonment of the Premises by Tenant, shall notconstitute a termination of this Lease, or of Tenant’s right of possessionhereunder, unless and until Landlord elects to do so, and until such timeLandlord shall have the right to enforce all of its rights and remedies underthis Lease, including the right to recover guaranteed minimum monthly rental,percentage rental, additional rent, and all other payments to be made by Tenanthereunder, as they become due; provided, however, that until such time asLandlord elects to terminate this Lease, and Tenant’s right of possessionhereunder, Tenant shall have the right to sublet the Premises, subject only tothe written consent of Landlord, which consent shall not be unreasonablywithheld.

As security for the performance by Tenant of all ofits duties and obligations hereunder, Tenant does hereby assign to Landlord theright, power and authority, during the continuance of this Lease, to collectthe rents, issues and profits of the Premises, reserving unto Tenant the right,prior to any breach or default by it hereunder, to collect and retain saidrents, issues and profits as they become due and payable. Upon any such breachor default, Landlord shall have the right at any time thereafter, withoutnotice except as provided for above, either in person, by agent or by areceiver to be appointed by a court, to enter and take possession of thePremises and collect such rents, issues and profits, including those past dueand unpaid, and apply the same, less costs and expenses of operation andcollection, including reasonable attorney’s fees, upon any indebtedness securedhereby, and in such order as Landlord may determine.

The parties hereto agree that acts of maintenance orpreservation or efforts to re-lease the Premises, or the appointment of areceiver upon the initiative of Landlord to protect the interests of Landlordunder this Lease shall not constitute a termination of Tenant’s right ofpossession for the purposes of this paragraph, unless accompanied by a writtennotice from Landlord to Tenant of Landlord’s election to so terminate.

23.                    INSOLVENCYOF TENANT. In the event all or substantially all of Tenant’s assets areplaced in the hands of a receiver or trustee, and in the event suchreceivership or trusteeship shall continue for a period of ten (10) days, orshould Tenant make an assignment for the benefit of creditors, or beadjudicated a bankrupt, or should Tenant institute any proceedings under anystate or federal bankruptcy act wherein Tenant seeks to be adjudicated abankrupt, or seeks to be discharged of its debts, or should any voluntaryproceeding be filed against Tenant under such bankruptcy laws and Tenantconsents thereto or acquiesces therein by pleading or default, then this Leaseor any interest in and to the Premises which Tenant may have shall not becomean asset in any of such proceedings and, in any of such events and in additionto any and all rights or remedies of Landlord hereunder or as provided by law,Landlord shall have the option to declare the term hereof ended, to re-enterthe Premises and take possession thereof and remove all persons therefrom, andTenant shall have no further claim therein or hereunder.

24.                    SURRENDEROF LEASE. The voluntary or other surrender of this Lease by Tenant, or amutual cancellation thereof, shall not work a merger unless so desired byLandlord, and shall, at the option of Landlord, terminate all or any existingsub leases or subtenancies (even though Landlord may have consented to same),or may, at the option of Landlord, operate as an assignment to him of any orall of such subleases or subtenancies.

25.                    SALEOF PREMISES BY LANDLORD. In the event of a sale by Landlord of the PremisesLandlord shall be released of all liability under each of its covenants andobligations contained in or derived from this Lease arising out of any act,occurrence or omission occurring after the consummation of such sale; and thepurchaser, at such sale or any subsequent sale of the Premises, shall be deemedwithout any further agreement between the parties or their successors ininterest or between the parties and any

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successors in interest to have assumed and agreed to carry out any andall of the covenants and obligations of Landlord under this Lease.

26.                    CONDUCTOF BUSINESS. Subject to the provisions of Article 20, hereof, Tenant shallcontinuously and uninterruptedly during the entire term hereof conduct andcarry on Tenant’s business in the Premises and shall keep the Premises open forbusiness and cause Tenant’s business to be conducted therein during the usualbusiness hours of each and every business day as is customary* to be open forbusiness; provided, however, that this provision shall not apply if thePremises should be closed and the business of Tenant temporarily discontinuedtherein on account of strikes, lockouts, or similar causes beyond thereasonable control of Tenant (financial inability excepted), or closed for notmore than three (3) days out of respect for the memory of any deceased officeror employee of Tenant, or the relative of any such officer or employee. In theevent Tenant fails to continuously and uninterruptedly conduct its business asrequired by this Section 26, Landlord shall have, in addition to any and allremedies herein provided, the right at its option to collect not only theguaranteed minimum monthly rental herein provided, but supplemental rent at therate of one thirtieth (1/30) of the minimum guaranteed monthly rent hereinprovided for each and every day that the Tenant shall fail to conduct itsbusiness. Tenant shall at all times conduct its business in a dignified,nonoffensive manner. The Premises shall be adequately stocked with merchandiseand shall be maintained in a neat, clean and orderly condition. No noise orvibrations shall be emitted outside of the Premises as a result of anyequipment installed or utilized by Tenant within the Premises or as a result ofTenant’s use of or operations at the Premises.

27.                    ATTORNEY’SFEES. If Landlord is involuntary made a party defendant to any litigationconcerning this Lease or the Premises by reason of any act or omission ofTenant, then Tenant shall hold Landlord harmless from all costs, liabilities,damages and expenses by reason thereof, including attorneys’ fees and all costsincurred by Landlord in such litigation.

If either Landlord or Tenant shall commence any legalproceedings against the other with respect to any of the terms and conditionsof this Lease, the non-prevailing party therein shall pay to the other allexpenses of said litigation, including attorneys’ fees and costs as may befixed by the court having jurisdiction over the matter. The parties heretoagree that the State of California is the proper jurisdiction for litigation ofany matters relating to this Lease, with venue in Orange County, and servicemailed to the address of Tenant set forth herein shall be adequate service forsuch litigation.

29.                    HOLDINGOVER. Any holding over after the expiration of the term of this Lease, withthe consent of Landlord, shall be construed to be a tenancy from month tomonth, cancellable upon thirty (30) days written notice, upon each of the termsand conditions as existed during the last year of the term of this Lease.

*                    forTenant’s other branches

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30.                    NOTICESAND CONSENTS.  Notice or demand shallbe given or served, and shall not be deemed to have been duly given or served,unless in writing and personally delivered, or forwarded by certified mailreturn receipt requested, address as follows:
| If to Landlord: |   | P. O. Box 3060                               |
|-----------------|--------|----------------------------------------------|
|            |   | Newport Beach, CA [Illegible] 92658          |
|            |   | 714-760-8591                                 |
|            |   |                                         |
| If to Tenant:   |   | 5670 Wilshire Blvd.                          |
|            |   | Los Angeles, CA 90036                        |
|            |   | ATTN: Property Management & Construction |

 

Either party may change such address by written noticeby certified mail to the other.

31.                    SUCCESSORSIN INTEREST. The covenants herein contained shall, subject to theprovisions as to assignment, apply to and bind the heirs, successors,executors, administrators and assigns of each party hereto; and if there ismore than one person or entity who is the tenant hereunder, all of such partiesshall be jointly andseverallyliable hereunder.

32.                    TENANT’SPERFORMANCE. Without affecting any other right or remedy of Landlordhereunder, in the event Tenant shall fail within any time limits which may beprovided herein to complete any work or perform any other requirements to beperformed by Tenant prior to the commencement of the term hereof, or in theevent Tenant shall cause a delay in the completion of any work, Landlord maysend Tenant written notice of said default and if said default is not correctedwithin ten (10) days thereafter, Landlord may, by written notice prior toTenant’s curing of said default, terminate this Lease. Landlord shall beentitled to retain as liquidated damages all deposits made hereunder and suchimprovements as Tenant may have annexed to the Premises which cannot be removedwithout damage thereto.*

33.                    FORCEMAJEURE. If either party hereto shall be delayed or prevented from theperformance of any act required hereunder by reason of acts of God, strikes,lock-outs, labor troubles, inability to procure materials, restrictivegovernmental laws or regulations or other cause without fault and beyond thecontrol of the party obligated (financial inability excepted), performance ofsuch act shall be excused for the period of the delay and the period for theperformance of any such act shall be extended for a period equivalent to theperiod of such delay; provided, however, nothing in this Article 33 containedshall excuse Tenant from the prompt payment of any rental or other amount whichTenant is required to pay Landlord hereunder, except as may be expresslyprovided elsewhere in this Lease.

34.                    PARTIALINVALIDITY. If any term, covenant, condition or provision of this Lease isheld by a court of competent jurisdiction to be invalid, void or unenforceable,the remainder of the provisions of this Lease shall remain in full force andeffect and shall in no way be affected, impaired or invalidated thereby.

35.                    MARGINALCAPTIONS. The various headings and numbers herein and the grouping of theprovisions of this Lease into separate articles and paragraphs are for thepurpose of convenience only and shall not be considered a pan hereof.

36.                    TIME.Time is of the essence of this Lease.

37.                    SUBORDINATION,ATTORNMENT. This Lease, at Landlord’s option, shall be subordinate to thelien of any deed of trust or mortgage subsequently placed upon the realproperty of which the Premises are a part, and to any and all advances made onthe security thereof, and to all renewals, modifications, consolidations,replacements and extensions thereof; provided, however, that as to the lien ofany such deed of trust or mortgage Tenant’s right to quiet possession of thePremises shall not be disturbed as a result of such subordination. If anymortgagee, trustee or ground lessor shall elect to have this Lease prior to thelien of its mortgage, deed of trust or ground lease, and shall give writtennotice thereof to Tenant, this Lease shall be deemed prior to such mortgage,deed of trust or ground lease, whether this Lease is dated prior or subsequentto the date of said mortgage, deed of trust or ground lease or the date ofrecording thereof.

In the event any proceedings are brought forforeclosure, or in the event of the exercise of the power of sale under anymortgage or deed of trust made by Landlord covering the Premises, Tenant shallattorn to the purchaser upon any such fore­closure or sale and recognize suchpurchaser as Landlord under this Lease.

If upon any sale,assignment, or hypothecation of the Shopping Center, the Premises or the landthereunder by Landlord, or at any other time, an estoppel certificate and/orfinancial statement shall be requested of Tenant, Tenant shall, within ten (10)days thereafter, deliver such financial statement, and such estoppel

*                    Tenant is inthe process of developing a set of working drawings for the initial interiorimprovements of the Premises that are necessary for Tenant to adequatelyconduct its business on the Premises. It will be the responsibility of Tenantto construct such tenant improvements and to install any trade fixtures setforth on such working drawings. Tenant agrees to furnish said working drawingsto Landlord within one hundred twenty (120) days of the date hereof and saidworking drawings shall be approved by Landlord in its reasonable discretion.

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certificate (inrecordable form) addressed to any such proposed mortgagee or purchaser or toLandlord, certifying the requested information, including among other thingsthe dates of commencement and termination of this Lease, the amount of thesecurity deposit, if any, and that this Lease is in full force and effect (ifsuch be the case) and that there are**nodifferences, offsets or defaults of Landlord, or noting such differences,offsets or defaults as actually exist. Tenant shall be liable for any loss orliability resulting from any incorrect information certified, and such mortgageeand purchaser shall have the right to rely on such estoppel certificate andfinancial statement. Tenant shall in the same manner acknowledge and executeany assignment of rights to receive rents as required by any mortgagee ofLandlord.

38.                     REVISIONOF SITE PLAN. Tenant acknowledges that the Site Plan may be preliminary andthat prior to the commencement of the term hereof Landlord may revise the SitePlan and change the location of the Premises; provided, however, relocation ofthe Premises shall be subject to Tenant’s approval, which approval shall not beunreasonably withheld. In the event Tenant does not approve said relocation,Tenant may cancel this Lease, in which event any security deposit or prepaidrent paid by Tenant shall be refunded to Tenant, and neither party shallthereafter have any further obligations to each other pursuant to this Lease.

39.                     CONDEMNATION.In the event of a condemnation, or a transfer in lieu thereof, in which twentypercent (20%) or more of the Premises is taken, or in the event as a result ofsuch taking or transfer in lieu thereof, Landlord is unable to provide theparking required by Article 8 hereof, either Landlord or Tenant may, uponwritten notice given within thirty (30) days after such taking or transfer in lieuThereof, terminate this Lease. Landlord shall receive the entire award in suchcondemnation proceeding. Tenant shall not be entitled to share in any portionof the award, and Tenant hereby expressly waives any right or claim to any partthereof. Tenant shall, however, have the right to claim and recover, only fromthe condemning authority (but not from Landlord), any amounts necessary toreimburse Tenant for the cost of removing stock, movable equipment and tradefixtures.

40.                     NOORAL AGREEMENTS. This Lease covers in full each and every agreement ofevery kind or nature whatsoever between the parties hereto concerning thisLease, and all preliminary negotiations and agreements of whatsoever kind ornature (including discussions with brokers, agents, attorneys and/or employeeof Landlord) are merged herein, and there are no oral agreements or impliedcovenants.

41.                     NEGOTIATEDTRANSACTION. The provisions of this Lease shall be deemed to have beendrafted by all of parties hereto.

42**.****                    **IMPOUNDFOR EXPENSES. As hereinbefore provided, Tenant is obligated to reimburseLandlord for Tenant’s share of certain costs and expenses, which reimbursementis payable as additional rent. Rather than bill and collect said reimbursementin arrears, Landlord may estimate Tenant’s share of said costs and expenses fora period not more than twelve (12) months in advance, and may collect andimpound Tenant’s estimated share in advance on a basis not more frequently thanmonthly. On or before August 15th of each year, Landlord shall provide toTenant a reconciliation of Tenant’s account for the twelve (12) month periodending the preceding June 30. Said reconciliation shall set forth in reasonabledetail the costs and expenses paid by Landlord, and shall include a computationas to Tenant’s pro rata share. In the event Tenant has overpaid its share ofsaid costs and expenses, Landlord shall accompany said reconciliation with arefund of said overpayment, and in the event of an underpayment, Tenant shallpay to Landlord said underpayment within ten (10) days after receipt of saidreconciliation.

43.                     RULESAND REGULATIONS. Except in connection with the operation of a pet store orveterinary office, no animals, birds, or pets shall be kept in or about thepremises. No video, electronic game machines, or vending machines shall beinstalled, maintained, or operated within the Premises without the writtenconsent of the Landlord. Landlord may from time to time adopt reasonablenon-discriminatory rules and regulations with respect to the Shopping Center.

44.                     OPTIONSTO EXTEND. See Addendum.

IN WITNESS WHEREOF, the parties have duly executedthis Lease on the date first above written at Newport Beach, California.
| LANDLORD: |   | LA JOLLA INVESTORS                   |
|-----------|--------|--------------------------------------|
|      |   | By:                                  | PACIFIC DEVELOPMENT GROUP |
|      |   |                                 |   |
|      |   |                                 | By: |   |   |
|      |   |                                 |   |   |
|      |   |                                 | By: |   |   |
|      |   |                                 |   |   |
|      |   |                                 |   |   |
| TENANT:   |   | CALIFORNIA FEDERAL SAVINGS  AND LOAN |
|      |   | ASSOCIATION                          |
|      |   |                                 |   |   |
|      |   | By:                                  | /s/ James C. Mears |   |
|      |   |                                 | James C. Mears – Sr. Vice President |   |
|      |   |                                 |   |   |
|      |   |                                 |   |   |
|      |   | By:                                  | /s/ Leslie A Lordon |   |
|      |   |                                 | Leslie A. Lordon – Asst. Secretary |

 

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ADDENDUM

44.                     OPTIONSTO EXTEND.

Provided that Tenant is not then in default under theterms of this Lease, Tenant shall have two (2) successive options to extend theterm hereof, each extension to be for a period of five (5) years. Each of saidoptions shall be exercised by written notice to Landlord, delivered not lessthan six (6) months prior to the expiration of said term. Each of the optionperiods shall be on the same terms and conditions contained herein except thatthe initial Guaranteed Minimum Monthly Rental during the initial option periodshall be an amount determined by multiplying the Guaranteed Minimum MonthlyRental in effect upon the commencement of the initial lease term by a fraction(i) which fraction shall have as its numerator the Consumer Price Index ineffect for the month preceding the commencement of the option period and (ii)which fraction shall have as its denominator the Consumer Price Index in effectfor the month preceding the commencement of the initial lease term. However, inno event shall the initial Guaranteed Minimum Monthly Rental during the initialoption period be less than the Guaranteed Minimum Monthly Rental in effectimmediately preceding the commencement of the option period.

Effective on July 1st of each year during the optionperiods of this Lease, the Guaranteed Minimum Monthly Rental shall be adjustedby multiplying the Guaranteed Minimum Monthly Rental then in effect by afraction, (i) which fraction shall have as its numerator the Consumer PriceIndex for the preceding month of June and (ii) which fraction shall have as itsdenominator the Consumer Price Index for the month of June for the prior year(except during the first year of the initial option period of this Lease, themonth during which the option period commences shall be used rather than Juneof the prior year). However, in no event shall the rent be reduced below thatGuaranteed Minimum Monthly Rental in effect immediately preceding suchadjustment.

The Consumer Price Index to be used is the ConsumerPrice Index for All Urban Consumers - All Items, for the United States,published monthly by the United States Department of Labor, in which 1967equals 100. If said Consumer Price Index is no longer published at theadjustment date, it shall be constructed by conversion tables included in suchnew Index.

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****

**EXHIBIT A**

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EXHIBIT “B”

Landlord shall provideTenant with a “shell building” consisting only of: exterior walls, notincluding the storefront (masonry and/or stud walls not including paint,drywall or insulation), foundations (not including concrete floor slab), roof,rear door at location to be approved by Landlord, and the following utilities:one (1) 200-amp service to be located in a separate electrical room and primaryelectrical conduits (without cable) to Tenant’s space; one (1) four inch (4”)sewer lateral stubbed to Tenant’s space, and one (1) one and one-half inch (1.5”)water service lateral (not including water meter or related fees). Allutilities will be stubbed and capped to the demised premises. Tenant shall beresponsible for furnishing and installing all secondary electrical conduitand/or wiring from the point of connection of Landlord’s work to the actualTenant electrical panel. Tenant shall be responsible for all fees, permits, orutilities charges necessitated by Tenant’s use of the Premises.

Tenant agrees to completeand fixturize said Premises in accordance with plans and specifications to beprepared by Tenant and approved by Landlord. Landlord shall pay to Tenant thesum of THIRTY THOUSAND DOLLARS ($30,000.00) as Landlord’s contribution to thecost of Tenant’s improve­ments, which sum shall be paid within ten (10) daysfollowing the commencement of the term hereof.

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**AMENDMENT NO. 1**

This AMENDMENT NO. 1 ismade this 18th day of December, 1995 (the “Effective Date”) of the Lease datedFebruary 10, 1987, by and between La Jolla/Youngman, a general partnership (“Landlord”)and Great Western Bank, a Federal Savings Bank (“Tenant”),

WHEREAS, the partiesdesire to amend the above referred Lease.

NOW, THEREFORE, saidLease is hereby amended as follows:

1.                          Thelanguage appearing as Article 3, page 1, lines 45 through 56 is hereby deletedand therefore substituted is the following language: “3. TERM. The termof this Lease shall commence on September 1, 1987 and shall expire on December31, 2002.” See Article 44.

2.                          Effectiveon January 1, 996, the Guaranteed Minimum Monthly Rental currently being paidshall be reduced to Five Thousand Eight Hundred Fifty Dollars ($5,850.00) permonth.

3.                          Thelanguage appearing as Article 4(b), pages 1 and 2 is hereby deleted in itsentirety and therefore substituted is the following language. “4(b) INCREASESIN GUARANTEED MINIMUM MONTHLY RENTAL. Effective on July 1, 1996 theGuaranteed Minimum Monthly Rental shall be increased to Six Thousand Dollars($6,000.00) per month. Effective July 1, 1997 the Guaranteed Minimum MonthlyRental shall be increased to Six Thousand Four Hundred Twenty Dollars($6,420.00). Effective July 1, 1998 and each July 1st thereafter during theterm of this Lease, the Guaranteed Minimum Monthly Rental shall be adjusted bymultiplying the Guaranteed Minimum Monthly Rental then in effect by a fraction(i) which fraction shall have as its numerator the Consumer Price Index for thepreceding month of April and (ii) and shall have as its denominator theConsumer Price Index for the month of April for the prior year. In no eventshall the Guaranteed Minimum Monthly Rental be decreased from the GuaranteedMinimum Monthly Rental in effect immediately before each adjustment, nor shallthe Guaranteed Minimum Monthly Rental be increased by more than three andone-half percent (3.5%) on any adjustment date (except as hereinaboveprovided). The phrase Consumer Price Index shall mean the Consumer Price Indexfor All Urban Consumers - All items for the United States as published monthlyby the United States Department of Labor in which 1982-84 equals 100. If theConsumer Price Index is no longer published at an adjustment date, then themost similar index published by any branch or department of the United StatesGovernment shall be used, and if none is published, then another non-partisanindex evaluating the information theretofore used in compiling the ConsumerPrice Index and generally recognized as authoritative on the impact of cost ofliving increases on commercial property rentals shall be used.”

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4.                          Thelanguage appearing as Article 44, page 12 is hereby deleted in its entirety andtherefore inserted is the following language: “44: OPTION TO EXTEND.Provided that Tenant is not then in default under the terms and conditionscontained in this Lease, Tenant shall have the option to extend the term ofthis Lease for two (2) five (5) year periods, by delivering written notice ofits election to extend the option not less than six (6) months prior to the expirationof the then unexpired term of this Lease. Each extended term shall be under thesame terms and conditions contained in this Lease, including specificallySection 4(b).”

5.                          Inaddition to the language set forth in the Master Lease, Item 21 Assignment andSubletting, the following language shall apply: Upon Tenant’s request forapproval and submittal of a sublease agreement, Landlord shall have up to 15days to review and approve Tenant’s sublease request. In the event Landlorddoes not response within the agreed upon 15 day period, then the request tosublease shall be deemed approved.

This AMENDMENT NO. 1 hasbeen executed on the date first hereinabove written.

 
| “LANDLORD”              |                                 |   |
|-----------------------------------|--------------------------------------|--------|
|                              |                                 |   |
| LA JOLLA  INVESTORS,              |                                 |   |
| a California  general partnership |                                 |   |
|                              |
| By:                               | /s/ Steven Park Grant                |   |   |   |
|                              | Steven Park Grant, Trustee           |   |   |
|                              | of the Grant Family Trust of 1991    |   |   |
|                              |
| By:                               | /s/ Steven Park Grant                |   |   |   |
|                              | Steven Park Grant, Trustee           |   |   |
|                              | of the Steven Park Grant, Jr. Trust, |   |   |
|                              | Dated January 27, 1986               |   |   |
|                              |
| By:                               | /s/ Steven Park Grant                |   |   |   |
|                              | Steven Park Grant, Trustee           |   |   |
|                              | of the Catherine Louise Grant Trust, |   |   |
|                              | Dated January 27, 1986               |   |   |
|                              |
| By:                               | /s/ Steven Park Grant                |   |   |   |
|                              | Steven Park Grant, Trustee           |   |   |
|                              | of the Robert Rollins Grant Trust,   |   |   |
|                              | Dated January 27, 1986               |   |   |
|                              |                                 |   |
|                              |                                 |   |
| YOUNGMAN TRUST                    |                                 |   |
|                              |                                 |   |
| /s/ Arn K.  Youngman              |                                 |   |   |
| Arn K. Youngman                   |                                 |   |
|                              |                                 |   |
|                              |                                 |   |
| TENANT                            |                                 |   |
|                              |                                 |   |
| GREAT WESTERN  BANK,              |                                 |   |
| a Federal  Savings Bank           |                                 |   |
|                              |                                 |   |
| By:                               | /s/ Sharon Driben               |   |   |   |
|                              | Regional V.P.                        |   |   |   |
|                                   |                                      |        |  |  |  |

 

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**EXHIBIT “B”**

**WORKLETTER AGREEMENT**

All capitalized terms herein that are defined in theSublease to which this Exhibit is attached shall have the meanings provided forthem in the Sublease. The term “Subtenant’s Work” shall mean any work performedby Subtenant, whether Subtenant’s work with respect to Initial Subtenant’sImprovements, if applicable, or work subsequent thereto. In addition to all therequirements herein, Subtenant’s Work shall comply in all respects with theMaster Lease.

**SECTION I**                                                                       DELIVERYOF PREMISES BY SUBLANDLORD

1.         Except asotherwise specifically set forth in the Sublease, Subtenant shall take thePremises in the presently existing “AS IS” condition and all work to beperformed at the Premises shall be performed by Subtenant at Subtenant’s solecost and expense.

2.         Sublandlorddoes not warrant any information Sublandlord may have furnished or will furnishSubtenant regarding the Premises. It shall be Subtenant’s responsibility toverify existing field conditions and measurements of the Premises, prior to theCommencement Date. Subtenant’s failure to verify the existing conditions andmeasurements of the Premises shall not relieve Subtenant of any expenses orresponsibilities resulting from such failure, nor shall Sublandlord have anyliability or obligations to Subtenant arising from such failure.

**SECTION II**                                                                   SUBTENANT’SWORK

1.         Subtenantshall perform Subtenant’s Work in accordance with all laws, rules andordinances (“Laws”) applicable to the Premises, including, without limitation,the building codes of the jurisdiction in which the Premises is located and allrequirements of the American With Disabilities Act.

2.         Subtenant’sWork and, except to the extent as may be specifically otherwise provided in theSublease, all subsequent work in the Premises which Subtenant may wish toperform, shall be subject to the advance written approval by Sublandlord, whichapproval shall not be unreasonably withheld, conditioned or delayed.

3.         Subtenantshall, prior to commencement of Subtenant’s Work and at Subtenant’s sole costand expense, obtain all required building and other permits and post saidpermits at the Premises as required.

4.         The loadsimposed by Subtenant’s Work (including dead and live loads) shall not exceedthe allowable load capacity of the existing structural systems and componentsthereof. Subtenant shall ensure at its sole cost that all floors in thePremises remain level at all times.

5.         Subtenantshall use only new or like-new materials for Subtenant’s Work, includingimprovements, equipment, trade fixtures and all other fixtures. Notwithstandingthe foregoing, Subtenant may reuse portions of existing improvements subject toSublandlord’s prior written approval, which approval not to be unreasonablywithheld, conditioned or delayed, provided that said approval shall in nomanner relieve Subtenant from the requirement that Subtenant’s Work comply withthis Sublease and all applicable laws. Sublandlord makes no warranty orrepresentation as to the condition or suitability of existing improvementsreused by Subtenant.

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6.         Subtenantshall make no marks or penetrations into the roof, upper floor decks, exteriorwalls, or floors, unless approved by Sublandlord in advance, which approvalshall not be unreasonably withheld, conditioned or delayed.

7.         If anySubtenant’s Work being performed by Subtenant to connect to utilities requiresaccess through space occupied by any other tenant or otherwise will affect anyother tenant and Sublandlord has approved such Subtenant’s Work, Subtenantshall be responsible for coordinating such Work with such other tenant,restoring said tenant’s premises to its original condition following such Work,repairing any damages to said Subtenant’s personal property and compensatingsaid other tenant for any costs or expenses incurred by it on account of suchWork.

8.         Subtenantshall retain Sublandlord’s and/or Master Lessor’s identification signs or, atSubtenant’s cost, provide new signs for Sublandlord’s and/or Master Lessor’sutilities, valves, and other such devices in the Premises.

9.         Sublandlordmay, at its election, require testing as to the affect of Subtenant’s Work onthe structural components of the building (the “Building”) and/or the Premisesand major Building systems (i.e., fire/life safety issues, code compliance, andplumbing and electrical systems), and Subtenant shall cooperate with anyreasonable testing procedure.

10.       No approvalfrom Sublandlord with respect to any aspect of Subtenant’s Work shall be validunless in writing and signed by an authorized representative of Sublandlord.

11.       Subtenantacknowledges that the Sublease Commencement Date shall not be delayed duesolely to the fact that Subtenant’s Work has not been completed by such datesor due solely to the fact that Subtenant is not open for business as of suchdates.

**SECTION III**                     PROCEDURESAND SCHEDULES FOR THE COMPLETION OF PLANS AND SPECIFICATIONS

1.         Subtenantshall submit to Sublandlord such information on Subtenant’s planned electricaland mechanical usages at the Premises as may be reasonably requested bySublandlord (herein referred to as “Plans”). Subtenant shall accuratelyindicate on the Plans any existing equipment or conditions that Subtenantproposes to reuse.

2.         Subtenantshall submit its Plans to Sublandlord prior to commencement of any work. ThePlans shall include interior floor plans, mechanical plans, electrical plans,plumbing plans, and signage design, size and location. Sublandlord shall usereasonable efforts to send notification to Subtenant that it approves ordisapproves the Plans within ten (10) business days after receipt thereof(Sublandlord’s approval not to be unreasonably withheld). If Sublandlorddisapproves, Subtenant shall within ten (10) days after receipt of Sublandlord’sdisapproval, send Sublandlord revised Plans addressing Sublandlord’s comments.This procedure shall be repeated until Sublandlord has approved the Plans.

3.         Theapproval by Sublandlord or Sublandlord’s agent of the Plans shall notconstitute an implication, representation or certification by Sublandlord orSublandlord’s agent that the Plans are accurate, sufficient, efficient or incompliance with insurance and indemnity requirements, or any Laws theresponsibility for which belongs solely to Subtenant.

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**SECTION IV**                                                              PERMITSAND APPROVALS

Subtenant, at Subtenant’s cost, shall apply for, seekand obtain all permits, licenses and approvals required for applicablegovernmental entities for construction of Subtenant’s Work. Copies of all suchpermits and approvals shall be submitted to Sublandlord before any constructionwork for Subtenant’s Work commences. Subtenant’s Work shall comply in allrespects with the following: (i) the Code and other state, federal, city orquasi-governmental laws, codes, ordinances and regulations, as each may applyaccording to the rulings of the controlling public official, agent or otherperson; (ii) applicable standards of the American Insurance Association(formerly, the National Board of Fire Underwriters) and the National ElectricalCode; and (iii) Project material manufacturer’s specifications.

**SECTION V**                                                                  CONSTRUCTION

1.         Subtenanthereby appoints Robert Hildt**(“Subtenant’sRepresentative”) to act on its behalf and represent its interests with respectto all matters requiring Subtenant actions in this Agreement. All mattersrequiring the consent, authorization or other actions by Subtenant with respectto matters set forth in this Agreement shall be in writing and signed by theSubtenant’s Representative. No consent, authorization, or other action bySubtenant with respect to the matters set forth in this Agreement shall bindSubtenant unless in writing and signed by the Subtenant’s Representative.Sublandlord hereby appoints                        to act on its behalf and represent its interests with respect to all mattersrequiring Sublandlord action in this Agreement (“Sublandlord’s Representative”).All matters requiring the consent, authorization or other actions bySublandlord with respect to matters set forth in this Agreement shall be inwriting and signed by the Sublandlord’s Representative. No consent,authorization, or other action by Sublandlord with respect to the matters setforth in this Agreement shall bind Sublandlord unless in writing and signed bythe Sublandlord’s Representative.

2.         Prior tocommencement of Subtenant’s Work at the Premises, Subtenant shall, in additionto complying with all other terms and conditions herein, furnish Sublandlordthe following:

a.        Evidenceof insurance evidencing the insurance required of Subtenant and Subtenant’sgeneral contractors as provided in this Exhibit.

b.        Acopy of the building permit(s), license(s) and approvals.

3.         Subtenantshall coordinate Subtenant’s Work with other construction work at the Building,if any.

4.         Prior tothe commencement of construction, Sublandlord shall have the right to post, ina conspicuous location, on the Premises, a notice of non-responsibility.

5.         Subtenantshall place all trash in trash containers at a pick-up area or areas designatedby Sublandlord. Subtenant shall furnish its own trash containers at its costunless Sublandlord elects to furnish the containers. Subtenant shall providetrash removal service at Subtenant’s own cost from the pick-up areas unlessSublandlord elects to provide the trash removal service. Subtenant shall notpermit trash to accumulate within the Premises or in the Common Areas orexterior areas of the Building. Subtenant shall be solely responsible forremoval from the

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Premises and legal disposal of any containers considered as hazardouswaste by applicable law and Subtenant shall take all precautions to assure thatsuch containers are not placed in Sublandlord’s disposal containers.

6.         AllSubtenant’s Work shall be performed so as to cause the least possibleinterference with Sublandlord’s existing business operations in the Buildingand other Subtenants of the Building, if applicable, and Sublandlord shall havethe right to impose reasonable requirements with respect to timing andperformance of the Work in order to minimize such interference. Subtenant’s Workcausing noise, odor or vibration at the Premises (e.g., concrete cutting) shallbe performed only during hours as directed by Sublandlord.

7.         Constructionequipment and materials are to be located in confined areas and truck trafficis to be routed to and from the site as directed by Sublandlord so as not toburden the construction or operation of the Building. All Work shall beconfined to the Premises.

8.         Subtenantshall cause its general contractor and all subcontractors to maintain duringthe construction period the following insurance: (i) commercial generalliability insurance, with limits of not less than $2,000,000 per occurrence(the portion of such coverage over $1,000,000 may be provided under an umbrellaor excess liability policy), for personal injury, bodily injury or death orproperty damage or destruction, arising out of or relating to the contractor’swork at or in connection with the Premises and completed operations for one (1)year following job completion and shall provide for a waiver of subrogation bythe insurance company; (ii) worker’s compensation insurance with respect toeach contractor’s workers at the site or involved in the Subtenant’s Work, inthe amount required by statute; (iii) employer’s liability insurance in theamount of at least $1,000,000 per accident and at least $1,000,000 for disease,each employee; (iv) comprehensive automobile liability insurance covering allowned, hired or non-owned vehicles, including the loading and unloadingthereof, with limits of not less than $2,000,000 per occurrence (the portion ofsuch coverage over $1,000,000 may be proved under an umbrella or excessliability policy); and (v) builder’s risk property insurance upon the entireSubtenant’s Work to the full replacement cost value thereof. Sublandlord,Sublandlord’s managing agent, Master Lessor and other such parties asdesignated by Sublandlord, shall be additional insureds under the insurancerequired under clause (i) of this paragraph, naming owner/Sublandlord,Subtenant, general contractor, and all subcontractors. All insurance requiredhereunder shall be provided by responsible insurers rated at least “A” and “VIII”in the then current edition of Best’s Key Rating Insurance Guide and shall belicensed in the State in which the Building is located. Subtenant shallprovide, or cause its contractors to provide, evidence of such insurance priorto any Subtenant’s Work being performed at the Premises. Such evidence shallstate that the coverage may not be changed or cancelled without at least thirty(30) day’s prior written notice to Sublandlord. Certificates for all insurancecarried pursuant to this section shall be delivered to Sublandlord before thecommencement of any of Subtenant’s Work and before any equipment is moved ontoor adjacent to the Premises for the purposes of such Subtenant’s Work.

9.         Uponsubstantial completion of Subtenant Improvements, as evidenced by a Subtenantcertificate of occupancy or a temporary certificate of occupancy for thePremises, Subtenant shall notify Sublandlord. Subtenant shall furnishSublandlord a copy of a certificate of occupancy for the Premises beforeSubtenant opens for business.

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10.       Costs of allSubtenant Work shall be paid promptly by Subtenant, and Subtenant shall have noauthority to cause liens or other encumbrances to attach as to the Premises.Subtenant shall reimburse Sublandlord for the reasonable fees and expensespayable by Sublandlord in connection with Sublandlord’s approvals andinspections hereunder. Prior to Subtenant’s opening for business, Subtenantshall deliver to Sublandlord mechanic’s lien reSubleases or other evidencereasonably satisfactory to Sublandlord that no liens have been filed inconnection with the Subtenant’s Work and that no liens can reasonably beexpected to be filed.

11.       Sublandlordshall have the right to inspect the Subtenant Work at all times, providedhowever, that Sublandlord’s failure to inspect the Subtenant Work shall in noevent constitute a waiver of any of Sublandlord’s rights hereunder nor shallSublandlord’s inspection of the Subtenant’s Work constitute Sublandlord’sapproval of the same. In addition, if the laws, ordinances, rules, regulationsor orders of any public authority having jurisdiction require any of theSubtenant’s work to be inspected, tested or approved, Subtenant shall giveSublandlord timely notice of its readiness and of the date arranged in orderthat Sublandlord may observe such inspection, testing or approval. Subtenantshall reimburse Sublandlord for the reasonable fees and expenses payable bySublandlord’s inspection hereunder. Should Sublandlord disapprove any portionof the Subtenant’s Work, Sublandlord shall notify Subtenant in writing of suchdisapproval and shall specify the items disapproved. Any defects or deviationsin, and/or disapproved by Sublandlord of, the Subtenant’s Work shall berectified by Subtenant at no expense to Sublandlord, provided however, that inthe event Sublandlord determines that a defect or deviation exists ordisapproves of any matter in connection with any portion of the Subtenant’sWork and such defect, deviation or matter might adversely affect themechanical, electrical, plumbing, heating, ventilating and air conditioning orlife-safety systems of the Project, the structure or exterior appearance of theProject or any other Subtenant’s use of such other Subtenant’s Subleasedpremises, Sublandlord may, take such action as Sublandlord deems necessary, atSubtenant’s expense and without incurring any liability on Sublandlord’s part,to correct any such defect, deviation and/or matter, including, withoutlimitation, causing the cessation of performance of the construction of theSubtenant’s Work until such tine as the defect, deviation and/or matter iscorrected to Sublandlord’s satisfaction.

12.       Subtenant’sindemnity of Sublandlord as set forth in the Sublease shall also apply withrespect to any and all costs, losses, damages, injuries and liabilities relatedin any way to any act or omission of Subtenant or Subtenant’s Agent, or anyonedirectly or indirectly employed by any of them, or in connection with Subtenant’snon-payment of any amount arising out of the Subtenant’s Work and/or Subtenant’sdisapproval of all or any portion of any request for payment. Such indemnity bySubtenant, as set forth in this Sublease, shall also apply with respect to anyand all costs, losses, damages, injuries and liabilities related in any way toSublandlord’s performance of any ministerial acts reasonably necessary (i) topermit Subtenant to complete the Subtenant Work, and (ii) to enable Subtenantto obtain any permit or certificate of occupancy for the Premises.

13.       Unlessotherwise indicated, all references herein to a “number of days” shall mean andrefer to calendar days. If any item requiring approval is timely disapproved bySublandlord, the procedure for preparation of the document and approval thereofshall be repeated until the document is approved by Sublandlord.

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14.       Notwithstandingany provision to the contrary contained in this Sublease, if an event of defaultas described in the Sublease or this Agreement has occurred at any time on orbefore the substantial completion of the Premises, then all other obligationsof Sublandlord under the terms of this Agreement shall be forgiven until suchtime as such default is cured pursuant to the terms of this Sublease (in whichcase, Subtenant shall be responsible for any delay in the substantialcompletion of the Premises caused by such inaction by Sublandlord).

15.       Sublandlordshall have no responsibility for the Subtenant’s Work and Subtenant willremedy, at Subtenant’s own expense, and be responsible for any and all defectsin the Subtenant’s Work that may appear during or after the completion thereofwhether the same shall affect the Subtenant’s Work in particular or any part ofthe Premises in general. Subtenant shall indemnify, hold harmless and reimburseSublandlord for any costs or expenses incurred by Sublandlord by reason of anydefect in any portion of the Subtenant’s Work constructed by Subtenant orSubtenant’s contractor or subcontractors, or by reason of inadequate cleanupfollowing completion of the Subtenant’s Work.

16.       All ofSubtenant’s contractors, subcontractors, employees, servants and agents mustwork in harmony with all shall not interfere with any labor employed bySublandlord, or Sublandlord’s contractors or by any other Subtenant or itscontractors with respect to any portion of the Project. Nothing in thisAgreement shall, however, require Subtenant to use union labor.

17.       Any work tobe performed in areas adjacent to the Premises shall be performed only afterobtaining Sublandlord’s express written permission, which shall not beunreasonably withheld, conditioned or delayed, and shall be done only if anagent or employee of Sublandlord is present; Subtenant will reimburseSublandlord for the expense of any such employee or agent.

18.       Subtenantagrees to be entirely responsible for the maintenance or the balancing of anyheating, ventilating or air conditioning system installed by Subtenant and/or maintenanceof the electrical or plumbing work installed by Subtenant and/or formaintenance of lighting fixtures, partitions, doors, hardware or any otherinstallations made by Subtenant.

Sublandlord will not check Subtenant drawings forbuilding code compliance. Approval of the Construction Drawings by Sublandlordis not a representation that the drawings are in compliance with therequirements of governing authorities, and it shall be Subtenant’sresponsibility to meet and comply with all federal, state, and local coderequirements. Approval of the Construction Drawings does not constituteassumption of responsibility by Sublandlord or its architect for theiraccuracy, sufficiency or efficiency, and Subtenant shall be solely responsiblefor such matters.

**SECTION VI**                                                              SUBTENANTIMPROVEMENT ALLOWANCE

Subtenant shall be entitled to a one-time payment bySublandlord of an allowance in the maximum amount of $15,000 (the “SubtenantImprovement Allowance”) for the costs related to the design and actual cost ofthe Subtenant’s Initial Improvements, but payment or nonpayment thereof shallnot relieve Subtenant of its responsibility and pay for all costs of theSubtenant’s Work. In no event shall Sublandlord have any obligation to disbursethe Subtenant Improvement Allowance to Subtenant for any purpose other thanSubtenant’s Work. In no event

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shall Sublandlord be obligated to make disbursements pursuant to thisWorkletter Agreement in an amount in a total amount which exceeds the SubtenantImprovement Allowance. No credit shall be given to Subtenant if the cost of theSubtenant’s Initial Improvements is less than the Subtenant ImprovementAllowance.

The Subtenant Improvement Allowance shall be paid toSubtenant within sixty (60) days after mutual execution hereof, provided thatSubtenant is not then in default and Subtenant has delivered to Sublandlord thefollowing:

a.        Copiesof any building permits required for the Subtenant’s Improvement Allowance;

b.        Policiesor evidences thereof of all insurance required to be maintained by Subtenantand its contractors;

c.        Reasonableevidence that Subtenant has theretofore performed, in accordance with the Plansand other provisions of this Sublease, costing an amount at least equal to theamount of the Subtenant Improvement Allowance;

d.        Copiesof invoices for such work marked “paid” by contractors and material suppliers;and

e.        Mechanic’slien reSubleases from the general and all other contractors to the extent ofthe Subtenant Improvement Allowance, along with other evidence reasonablysatisfactory to Sublandlord that no liens have been filed in connection withthe Subtenant’s Intial Improvements and that no liens can reasonably beexpected to be filed.

Within thirty (30) days after completion of Subtenant’sInitial Improvements, Subtenant shall provide the following to Sublandlord:

f.         Finalcopy of Subtenant’s As-Built Plans (with changes, if any, noted from the finalapproved Plans); and

g.        Certificateof Occupancy.

Sublandlord is authorized, at Sublandlord’s election,to disburse funds from the Subtenant Improvement Allowance on Subtenant’sbehalf to Subtenants Contractor, Subtenant’s architect, Subtenant’s engineer,or any subcontractor, materials supplier or other party entitled tocompensation in connection with Subtenant’s Work. Sublandlord shall provideSubtenant with a notice, together with copies of invoices and other appropriatedocumentation, identifying payments made from the Subtenant ImprovementAllowance and stating the amount remaining in the Subtenant Improvement Allowance.

Subtenant may apply for and may receive a certificateof occupancy or temporary certificate of occupancy for the Premises, andthereby obtain substantial completion of the Subtenant’s Work, at a time whenpunch list items have yet to be completed. The Subtenant’s Work shall be deemedto be substantially complete even though such “punch list” items still remainto be performed.

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At its option, Sublandlord, at any time within three(3) years after final disbursement of the Subtenant Improvement Allowance toSubtenant, and upon at least ten (10) days prior written notice to Subtenant,may cause an audit to be made of Subtenant’s books and records relating toSubtenant’s expenditures in connection with the construction of the Subtenant’sWork. Subtenant shall maintain complete and accurate books and records inaccordance with generally accepted accounting principles of these expendituresfor at least three (3) years. Subtenant shall make available to Sublandlord’sauditor at the Premises within ten (10) business days following Sublandlord’snotice requiring the audit, all books and records maintained by Subtenantpertaining to the construction and completion of the Subtenant’s Work. Inaddition to all other remedies which Sublandlord may have pursuant to theSublease, Sublandlord may recover from Subtenant the reasonable cost of itsaudit if the audit discloses that Subtenant falsely reported to Sublandlordexpenditures which were not in fact made or falsely reported a material amountof any expenditure or the aggregate expenditures.

8

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**EXHIBIT “A”**

**ASSIGNMENT OF LEASE**

This Assignment of Lease (the “Assignment”) is madeeffective November 8, 1992, by and among LA JOLLA INVESTORS, a generalpartnership (“Lessor”), CALIFORNIA FEDERAL BANK, A FEDERAL SAVINGS BANK (“Assignor”)and GREAT WESTERN BANK, A FEDERAL SAVINGS BANK (“Assignee”), which agree asfollows:

1.                          Recitals.This Assignment is made with reference to the following facts and objectives:

A.                     Lessorand Assignor did enter into a lease (the “Lease”) dated February 10, 1987 for acertain premises located in the La Jolla Colony Plaza in San Diego, California,which premises are more particularly described in the Lease.

B.                       Assignordesires to assign all its rights, title and interest in the Lease to Assignee.

C.                       Lessordesires to consent to the proposed Assignment on the conditions set forth inthis Agreement.

2.                          EffectiveDate of Assignment. This Assignment shall take effect and Assignor shallgive possession of the Premises to Assignee as of November 8, 1992.

3.                          Assignmentand Assumption. Assignor assigns and transfers to Assignee all its rights,title and interest in the Lease. Assignee accepts the assignment and assumesand agrees to perform, from the date the assignment becomes effective, as adirect obligation to Lessor, all provisions of the Lease, including but notlimited to the duty to pay rent and other charges as provided in the Lease.

4.                          Lessor’sConsent. Provided all of the obligations and duties of Assignor under theLease are current and not in default on the effective date of the assignment,Lessor hereby consents to the assignment on the terms and conditions set forthherein; provided, however such consent shall not release Assignor from itsduties under the Lease.

5.                          Indemnities.Assignee shall indemnify and hold Assignor harmless from any and all damages,losses and liabilities of any nature resulting from any and all claims arisingin connection with the Lease on or after the effective date of this Assignment,including, without limitation, (1) legal fees, costs and expenses of any natureresulting from any and all claims made in

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connection with the Lease on or after [Illegible] effective date orthis Assignment; and (2) any and all claims and/or demands for payment and/orperformance made by the Lessor against Assignor resulting from Assignee’sactual or alleged failure to perform or to comply with any provisions of theLease, regardless of the basis for the Assignee’s actual or alleged failure toperform or comply, provided that any such claims and/or demands arise in connectionwith the Lease arise on or after the effective date of this Assignment,including, without limitation, (1) legal fees, costs and expenses of any natureresulting from any and all claims made in connection with the Lease on or afterthe effective date of this Assignment; and (2) any and all claims and/ordemands for payment and/or performance made by the Lessor against Assignorresulting from Assignee’s actual or alleged failure to perform or to complywith any provisions of the Lease, regardless of the basis for the Assignee’sactual or alleged failure to perform or comply, provided that any such claimsand/or demands arise in connection with the Lease, arose prior to the effectivedate of Assignment.

6.                          PrepaidRent/Security Deposit. Assignor and Assignee acknowledge to each other thatno money has been paid as prepaid rent or security deposit. Rent shall beprorated between Assignor and Assignee not later than the effective datehereof.

Rent, for the purposes of this Assignment, shall mean minimum monthlyrent, percentage rent, prepaid rent, security deposit, real property taxes andassessments, common area charges, operating costs, insurance, advertisingcharges, utilities and similar charges payable by Assignor to Lessor.

7.                          Miscellaneous.

A.                     Attorneys’Fees. If any party commences an action against any of the parties arisingout of or in connection with this Assignment, the prevailing party or partiesshall be entitled to recover from the losing party or parties reasonableattorneys’ fees and costs of suit.

B.                       Notice.Any notice demand, request, consent, approval, or communication that eitherparty desires or is required to give to the other party or any other personshall be in writing either served personally or sent by prepaid, first classmail, and addressed to the other party at the address set forth below:
| Assignor: | California Federal Bank, F.S.B.  5700 Wilshire Boulevard  Suite 232B Los Angeles, CA 90036 |
|-----------|--------------------------------------------------------------------------------------------|
|      | Attn:                                                                                      | Edward S. Streeter  Vice President,  Branch Planning & Acquisitions |

 

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| Assignee: | **Great Western Bank, F.S.B**9200 Oakdale Avenue, Fourth FloorChatsworth, CA 91311Attn: Lease Administration |
|-----------|--------------------------------------------------------------------------------------------------------------|
|      |                                                                                                         |
| Lessor:   | **La Jolla Investors  P.O. Box 3060  Newport Beach, CA 92658  Attn: Steven P. Grant**                        |

 

Any party may change its address by notifying theother parties of the change of address. Notice shall be deemed communicatedwithin five (5) business days from the time of mailing if mailed as provided inthis paragraph, or upon delivery if served personally.

C.                       Successors.This Assignment shall, subject to any requirements of the Lease, be binding onand inure to the benefit of the parties and their successors and assigns.

D.                      Counterparts.This Assignment may be executed in one or more counterparts, all of which takentogether shall constitute an instrument.
|        | LESSOR:                         |
|--------|---------------------------------|
|   | LA JOLIA INVESTORS              |
|   |                            |
|   | By:                             | /s/ Steven Grant, Trustee |
|   |                            |   |
|   | Its:                            | General Partner |
|   |                            |   |
|   | Date:                           | 8/14/92 |
|   |                            |   |
|   | ASSIGNOR:                       |
|   | CALIFORNIA FEDERAL BANK, F.S.B. |
|   |                            |   |
|   | By:                             | /s/ Edward Streeter |
|   |                            |   |
|   | Its:                            | Vice President |
|   |                            |   |
|   | Date:                           | 8/4/92 |
|   |                            |   |
|   | ASSIGNEE:                       |
|   | GREAT WESTERN BANK. F.S.B.      |
|   |                            |   |
|   | By:                             | /s/ H. Arthur West |
|   |                            |   |
|   | Its:                            | Vice President |
|   |                            |   |
|   | Date:                           | 7 Aug. ’92 |

 

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