**OFFICE
BUILDING LEASE**
 
  This
Lease between OLEN COMMERCIAL REALTY CORP., A NEVADA CORPORATION (“Landlord”),
and PACIFIC COAST NATIONAL BANCORP, A CALIFORNIA CORPORATION (“Tenant”), is
dated July 15, 2004.
 
 **1.
LEASE OF PREMISES**
  In
consideration of the rent (as defined at Section 5.3) and the provisions of this
Lease, Landlord leases to Tenant and Tenant leases from Landlord the Premises
shown by diagonal lines on the floor plan attached hereto as Exhibit “A”, and
further described at Section 2.1. The Premises are located within the Building
and Project described in Section 2.m. Tenant shall have the nonexclusive right
(unless otherwise provided herein) in common with Landlord, other tenants,
subtenants and invitees, to use of the Common Area (as defined at Section
2.e).
  **2.
DEFINITIONS**
  As used
in this Lease, the following terms shall have the following
meanings:
  a. Base
Rent (initial): $170,469.00 per year
  b. Base
year: The calendar year of 2005
  c.
Broker(s)
  Landlords:
    Jeff
      Carr - CB Richard EllisTenants:
    Jim
      Shute - JW Shute International
 d.
Commencement Date: Ninety (90) days after Landlord’s notice to Tenant of
substantial completion and final inspection of Tenant Improvements by the City
of San Clemente.* *(See Addendum A, Item 4 for Start Date Amendment and Item 5
for Early Possession Agreement.)
  e. Common
Areas: The building lobbies, common corridors and hallways, restrooms, garage
and parking areas, stairways, elevators and other generally understood public or
common areas. Landlord shall have the right to regulate or restrict the use of
the Common Areas.
  f.
Expiration Date: Ten (10) years after the Commencement Date* unless otherwise
sooner terminated in accordance with the provisions of this Lease.
  g.
Landlord’s Mailing Address: Olen
Commercial Realty Corp.,
 7
Corporate Plaza, Newport Beach, CA 92660
 
 Tenant’s
Mailing
Address: 905 Calle
Amanecer, Suite 100,
 San
Clemente, CA 92673
  h.
Monthly Installments of Base Rent (initial): **$14,205.75** per
month.
  **Rent
      Payments.**
    **Rent
      payments are due on the first of each month, made payable to Olen
      Commercial Realty Corp. Please remit Rent Payments to: Olen Commercial
      Realty Corp., Unit Q, P. O. Box 51915, Los Angeles, CA
      90051-6215.**
  LANDLORD
      DOES NOT INVOICE ON A MONTHLY BASIS.
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  i.
Security Deposit (Article 7): $14,205.75
  j. **Upon
execution hereof Tenant shall pay Landlord $33,411.50;** $14,205.75 as rent for the first month, $14,205.75 Security Deposit equal to
first month’s remittance pursuant to Article 7 herein, $5,000.00 for staircase
Tenant Improvements as noted in Addendum E. A $300,000.00 Letter of Credit shall
be deposited within the Landlord with thirty (30) days of mutual execution of
the Lease pursuant to Addendum A, Item 11 herein.
  k.
Parking: Tenant shall be permitted, upon payment of the then prevailing monthly
rate (as set by Landlord from time to time) to park 4:1,000 cars on a
nonexclusive basis in the area(s) designated by Landlord for parking, which
shall include three (3) ATM parking stalls on the East side of the Building for
Tenant’s exclusive use (see Exhibit A). The cost for fabrication and
installation of signage for said dedicated ATM parking stalls shall be at the
Tenant’s expense and shall be submitted in writing to Landlord for approval,
which shall not be unreasonably withheld. Additionally, Landlord will designate
ten (10) twenty (20) minute visitor parking stalls for the use of the Building.
Tenant shall abide by any and all parking regulations and rules established from
time to time by Landlord or Landlord’s parking operator. Landlord reserves the
right to separately charge Tenant’s guests and visitors for OVERNIGHT PARKING
SHALL BE ALLOWED; AT LESSOR’S DISCRETION, VIOLATORS MAY BE TOWED AT VEHICLE
OWNER’S EXPENSE. However, it is acknowledged by Tenant and Landlord that Tenant
shall have the right to park one (1) vehicle in the lot overnight (and Landlord
shall have the right to designate where said vehicle shall be parked in the
lot), providing same is kept in clean condition and does not remain parked for
more than ninety-six consecutive hours without being moved. In this event, it is
the responsibility of Tenant to notify Landlord of said overnight vehicle
parking and to have the ability to move said vehicle any time upon the
reasonable request of Landlord should Landlord require same for purposes of
parking lot maintenance or any other reason. Tenant may utilize more than their
prorata share of common area parking for the Building for occasional special
events, provided Tenant directs attendees to park on the North and West sides of
the Building (see Addendum A), provided Tenant is not infringing on the other
tenants’ rights to their prorata share of parking, and provided Tenant presents
a written request per occasion for Landlord’s approval, which shall not be
unreasonably withheld.
  l.
Premises: That portion of the Building containing approximately 7,285 square
feet of Rentable Area, shown by diagonal lines on Exhibit “A”, located on the
first floor of the Building and known as Suite(s) 100-140.
  m.
Project: The building of which the Premises are a part (the “Building”) and any
other buildings or improvements on the real property (the “Property”) located at
905 Calle Amanecer, San Clemente, CA, 92673 and further described on Exhibit
“A”. The Project is known as Pacific Pointe Corporate Centre.
  n.
Rentable Area: As to both the Premises and the Project, the respective
measurements of floor area as may from time to time be subject to lease by
Tenant and all tenants of the Project, respectively, as determined by Landlord
and applied on a consistent basis throughout the Project.
  o. State:
The State of California.
  p.
Tenant’s Proportionate Share: 8.57%. Such share is a fraction, the numerator of
which is the Rentable Area of the Premises, and the denominator of which is the
Rentable Area of the Project, as determined by Landlord from time to time. The
Project consists of two building(s) containing a total Rentable Area of 85,000
square feet.
  q.
Tenant’s Use Clause (Article 8): Banking and related services approved by the
City of San Clemente.
  r. Term:
The period commencing on the Commencement Date and expiring at midnight on the
Expiration Date.
  **3.
EXHIBITS AND ADDENDA**
  See
Addenda: A, B, C, D, E, Exhibits A, B and C attached hereto and made a part
hereof by reference.
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 **4.
DELIVERY OF POSSESSION**
  If for
any reason Landlord does not deliver possession of the Premises to Tenant on the
Commencement Date, Landlord shall not be subject to any liability for such
failure, the Expiration Date shall not change and the validity of this Lease
shall not be impaired, but Rent shall be abated until delivery of possession. If
Landlord permits Tenant to enter into possession of the Premises before the
Commencement Date, such possession shall be subject to the provisions of this
Lease, including, without limitation, the payment of Rent.
  **5.
RENT**
  5.1.
Payment of Base Rent. Tenant agrees to pay the Base Rent for the Premises.
Monthly Installments of Base Rent shall be payable in advance on the first day
of each calendar month of the Term. If the Term begins (or ends) on other than
the first (or last) day of a calendar month, the Base Rent for the partial month
shall be prorated on a per diem basis. Tenant shall pay Landlord the first
Monthly Installment of Base Rent when Tenant executes the Lease.
  5.2.
Project Operating Costs
  a. In
order that the Rent payable during the Term reflect any increase in Project
Operating Costs, Tenant agrees to pay to Landlord as Rent, Tenant’s
Proportionate Share of all increases in costs, expenses and obligations
attributable to the Project and its operation, all as provided
below.
  b. If,
during any calendar year during the Term, Project Operating Costs exceed the
Project Operating Costs for the Base Year, Tenant shall pay to Landlord, in
addition to the Base Rent and all other payments due under this Lease, an amount
equal to Tenant’s Proportionate Share of such excess Project Operating Costs in
accordance with the provisions of this Section 5.2b.
  (1) The
term “Project Operating Costs” shall include all those items described in the
following subparagraphs (a) and (b).
  (a) All
taxes, assessments, water and sewer charges and other similar governmental
charges levied on or attributable to the Building or Project or their operation,
including without limitation, (i) real property taxes or assessments levied or
assessed against the Building or Project, (ii) assessments or charges levied or
assessed against the Building or Project by any redevelopment agency, (iii) any
tax measured by gross rentals received from the leasing of the Premises,
Building or Project, excluding any net income, franchise, capital stock, estate
or inheritance taxes imposed by the State or Federal government or their
agencies, branches or departments; provided that if at any time during the Term
any governmental entity levies, assesses or imposes on Landlord any (1) general
or special, ad valorem or specific, excise, capital levy or other tax,
assessment, levy or charge directly on the Rent received under this Lease or on
the rent received under any other leases of space in the Building or Project, or
(2) any license fee, excise or franchise tax, assessment, levy or charge
measured by or based, in whole or in part, upon such rent, or (3) any transfer,
transaction, or similar tax, assessment, levy or charge based directly or
indirectly upon the transaction represented by this Lease or such other leases,
or (4) any occupancy, use, per capita or other tax, assessment, levy or charge
based directly or indirectly upon the use or occupancy of the Premises or other
premises within the Building or Project, then any such taxes, assessments,
levies and charges shall be deemed to be included in the term Project Operating
Costs. If at any time during the Term the assessed valuation of, or taxes on,
the Project are not based on a completed Project having at least ninety-five
percent (95%) of the Rentable Area occupied, then the “taxes” component of
Project Operating Costs shall be adjusted by Landlord to reasonably approximate
the taxes which would have been payable if the Project were completed and at
least ninety-five percent (95%) occupied.
  (b)
Operating costs incurred by Landlord in maintaining and operating the Building
and Project, including without limitation the following: costs of (1) utilities;
(2) supplies; (3) insurance (including public liability, property damage,
earthquake, and fire and extended coverage insurance for the full replacement
cost of tie Building and Project as required by Landlord or its lenders for the
Project); (4) services of independent contractors; (5) compensation (including
employment taxes and fringe benefits) of all persons who perform duties
connected with the operation, maintenance, repair or overhaul of the Building or
Project, and equipment, improvements and facilities located within the Project,
including without limitation engineers, janitors, painters, floor waxers, window
washers, security and parking personnel and gardeners (but excluding persons
performing services not uniformly available to or
 
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  performed
for substantially all Building or Project tenants); (6)
operation and maintenance of a room for delivery and distribution of mail to
tenants of the Building or Project as required by the U.S. Postal Service
(including, without limitation, an amount equal to the fair market rental value
of the mail room premises); (7) management of the Building or Project, whether
managed by Landlord or an independent contractor (including, without limitation,
an amount equal to the fair market value of any on-site manager’s office); (8)
rental expenses for (or a reasonable depreciation allowance on) personal
property used in the maintenance, operation or repair of the Building or
Project; (9) costs, expenditures or charges (whether capitalized or not)
required by any governmental or quasi-governmental authority; (10) amortization
of capital expenses (including financing costs) (i) required by a governmental
entity for energy conservation or life safety purposes, or (ii) made by Landlord
to reduce Project Operating Costs; and (11) any other costs or expenses incurred
by Landlord under this Lease and not otherwise reimbursed by tenants of the
Project. If at any time during the Term, less than ninety-five percent (95%) of
the Rentable Area of the Project is occupied, the “operating costs” component of
Project Operating Costs shall be adjusted by Landlord to reasonably approximate
the operating costs which would have been incurred if the Project had been at
least ninety-five percent (95%) occupied.
  (2)
Tenant’s Proportionate Share of Project Operating Costs shall be payable by
Tenant to Landlord as follows:
  (a)
Beginning with the calendar year following the Base Year and for each calendar
year thereafter (“Comparison Year”), Tenant shall pay Landlord an amount equal
to Tenant’s Proportionate Share of the Project Operating Costs incurred by
Landlord in the Comparison Year which exceeds the total amount of Project
Operating Costs payable by Landlord for the Base Year. This excess is referred
to as the “Excess Expenses”.
  (b) To
provide for current payments of Excess Expenses, Tenant shall, at Landlord’s
request, pay as additional rent during each Comparison Year, an amount equal to
Tenant’s Proportionate Share of the Excess Expenses payable during such
Comparison Year, as estimated by Landlord from time to time. Such payments shall
be made in monthly installments, commencing on the first day of the month
following the month in which Landlord notifies Tenant of the amount it is to pay
hereunder and continuing until the first day of the month following the month in
which Landlord gives Tenant a new notice of estimated Excess Expenses. It is the
intention hereunder to estimate from time to time the amount of the Excess
Expenses for each Comparison Year and Tenant’s Proportionate Share thereof, and
then to make an adjustment in the following year based on the actual Excess
Expenses incurred for that Comparison Year.
  (c) On or
before April 1 of each Comparison Year after the first Comparison Year (or as
soon thereafter as is practical), Landlord shall deliver to Tenant a statement
setting forth Tenant’s Proportionate Share of the Excess Expenses for the
preceding Comparison Year. If Tenant’s Proportionate Share of the actual Excess
Expenses for the previous Comparison Year exceeds the total of the estimated
monthly payments made by Tenant for such year, Tenant shall pay Landlord the
amount of the deficiency within ten (10) days of the receipt of the statement.
If such total exceeds Tenant’s Proportionate Share of the actual Excess Expenses
for such Comparison Year, then Landlord shall credit against Tenant’s next
ensuing monthly installment(s) of additional rent an amount equal to the
difference until the credit is exhausted. If a credit is due from Landlord on
the Expiration Date, Landlord shall pay Tenant the amount of the credit. The
obligations of Tenant and Landlord to make payments required under this Section
5.2 shall survive the Expiration Date.
  (d)
Tenant’s Proportionate Share of Excess Expenses in any Comparison Year having
less than 365 days shall be appropriately prorated.
  (e) If
any dispute arises as to the amount of any additional rent due hereunder, Tenant
shall have the right after reasonable notice and at reasonable times to inspect
Landlord’s accounting records at Landlord’s accounting office and, if after such
inspection Tenant still disputes the amount of additional rent owed, a
certification as to the proper amount shall be made by Landlord’s certified
public accountant, which certification shall be final and conclusive. Tenant
agrees to pay the cost of such certification unless it is determined that
Landlord’s original statement overstated Project Operating Costs by more than
five percent (5%).
  5.3.
Definition of Rent. All costs and expenses which Tenant assumes or agrees to pay
Landlord under this Lease shall be deemed additional rent (which, together with
the Base Rent is sometimes referred to as the “Rent”). The Rent shall be paid to
the Building manager (or other person) and at such place, as Landlord may from
time to time designate in writing, without any prior demand therefor and without
deduction or offset, in lawful money of the United States of
America.
 
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  5.4 Rent
Control. If the amount of Rent or any other payment due under this Lease
violates the terms of any governmental restrictions on such Rent or payment,
then the Rent or payment due during the period of such restrictions shall be the
maximum amount allowable under those restrictions. Upon termination of the
restrictions, Landlord shall, to the extent it is legally permitted, recover
from Tenant the difference between the amounts received during the period of the
restrictions and the amounts Landlord would have received had there been no
restrictions.
  5.5 Taxes
Payable by Tenant. In addition to the Rent and any other charges to be paid by
Tenant hereunder, Tenant shall reimburse Landlord upon demand for any and all
taxes payable by Landlord (other than net income taxes) which are not otherwise
reimbursable under this Lease, whether or not now customary or within the
contemplation of the parties, where such taxes are upon, measured by or
reasonably attributable to (a) the cost or value of Tenant’s equipment,
furniture, fixtures and other personal property located in the Premises, or the
cost or value of any leasehold improvements made in or to the Premises by or for
Tenant, other than Building Standard Work made by Landlord, regardless of
whether title to such improvements is held by Tenant or Landlord; (b) the gross
or net Rent payable under this Lease, including, without limitation, any rental
or gross receipts tax levied by any taxing authority with respect to the receipt
of the Rent hereunder; (c) the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises or
any portion thereof; or (d) this transaction or any document to which Tenant is
a party creating or transferring an interest or an estate in the Premises. If it
becomes unlawful for Tenant to reimburse Landlord for any costs as required
under this Lease, the Base Rent shall be revised to net Landlord the same net
Rent after imposition of any tax or other charge upon Landlord as would have
been payable to Landlord but for the reimbursement being unlawful.
  **6.
INTEREST AND LATE CHARGES**
  If Tenant
fails to pay when due any Rent or other amounts or charges which Tenant is
obligated to pay under the terms of this Lease, the unpaid amounts shall bear
interest at the maximum rate then allowed by law. Tenant acknowledges that the
late payment of any Monthly Installment of Base Rent will cause Landlord to lose
the use of that money and incur costs and expenses not contemplated under this
Lease, including without limitation, administrative and collection costs and
processing and accounting expenses, the exact amount of which is extremely
difficult to ascertain. Therefore, in addition to interest, if any such
installment is not received by Landlord within ten (10) days from the date it is
due, Tenant shall pay Landlord a late charge equal to ten percent (10%) of such
installment. Landlord and Tenant agree that this late charge represents a
reasonable estimate of such costs and expenses and is fair compensation to
Landlord for the loss suffered from such nonpayment by Tenant. Acceptance of any
interest or late charge shall not constitute a waiver of Tenant’s default with
respect to such nonpayment by Tenant nor prevent Landlord from exercising any
other rights or remedies available to Landlord under this Lease.
  **7.
SECURITY DEPOSIT**
  Tenant
agrees to deposit with Landlord the Security Deposit set forth at Article 2.i
upon execution of this Lease, as security for Tenant’s faithful performance of
its obligations under this Lease. Landlord and Tenant agree that the Security
Deposit may be commingled with funds of Landlord and Landlord shall have no
obligation or liability for payment of interest on such Deposit. Tenant shall
not mortgage, assign, transfer or encumber the Security Deposit without the
prior written consent of Landlord and any attempt by Tenant to do so shall be
void, without force or effect and shall not be binding upon Landlord. If Tenant
fails to pay any Rent or other amount when due and payable under this Lease, or
fails to perform any of the terms hereof, Landlord may appropriate and apply or
use all or any portion of the Security Deposit for rent payments or any other
amount then due and unpaid, for payment of any amount for which Landlord has
become obligated as a result of Tenant’s default or breach, and for any loss or
damage sustained by Landlord as a result of Tenant’s default or breach, and
Landlord may so apply or use this deposit without prejudice to any other remedy
Landlord may have by reason of Tenant’s default or breach. If Landlord so uses
any of the Security Deposit, Tenant shall, within ten (10) days after written
demand therefor, restore the Security Deposit to the full amount originally
deposited; Tenant’s failure to do so shall constitute an act of default
hereunder and Landlord shall have the right to exercise any remedy provided for
at Article 27 hereof. Within fifteen (15) days after the Term (or any extension
thereof) has expired or Tenant has vacated the Premises,
 
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 whichever
shall last occur, and provided Tenant is not then in default on any of its
obligations hereunder, Landlord shall return the Security Deposit to Tenant, or,
if Tenant has assigned its interest under this Lease, to the last assignee of
Tenant. If Landlord sells its interest in the Premises, Landlord may deliver
this deposit to the purchaser of Landlord’s interest and thereupon be relieved
of any further liability or obligation with respect to the Security Deposit. **NOTE:
Security Deposit shall not be applied toward the last month’s rent.** The
Security Deposit on hand shall remain equal to the first month’s rent for the
term of the Lease.
  **8.
TENANTS USE OF THE PREMISES**
  Tenant
shall use the Premises solely for the purposes set forth in Tenant’s Use Clause.
Tenant shall not use or occupy the Premises in violation of law or any covenant,
condition, or restriction affecting the Building or Project or the certificate
of occupancy issued for the Building or Project, and shall, upon notice from
Landlord, immediately discontinue any use of the Premises which is declared by
any governmental authority having jurisdiction to be a violation of law or the
certificate of occupancy. Tenant, at Tenant’s own expense, shall comply with all
laws, ordinances, regulations, rules and/or any directions of any governmental
agencies or authorities having jurisdiction which shall, by reason of the nature
of Tenant’s use or occupancy of the Premises, impose any duty upon Tenant or
Landlord with respect to the Premises or its use or occupation. A judgment of
any court of competent jurisdiction or the admission by Tenant in any action or
proceeding against Tenant that Tenant has violated any such laws, ordinances,
regulations, rules and/or directions in the use of the Premises shall be deemed
to be a conclusive determination of that fact as between Landlord and Tenant.
Tenant shall not do or permit to be done anything which will invalidate or
increase the cost of any fire, extended coverage or other insurance policy
covering the Building or Project and/or property located therein, and shall
comply with all rules, orders, regulations, requirements and recommendations of
the Insurance Services Office or any other organization performing a similar
function. Tenant shall promptly upon demand reimburse Landlord for any
additional premium charged for such policy by reason of Tenant’s failure to
comply with the provisions of this Article. Tenant shall not do or permit
anything to be done in or about the Premises which will in any way obstruct or
interfere with the rights of other tenants or occupants of the Building or
Project, or injure or annoy them, or use or allow the Premises to be used for
any improper, immoral, unlawful or objectionable purpose, nor shall Tenant
cause, maintain or permit any nuisance in, on or about the Premises. Tenant
shall not commit or suffer to be committed any waste in or upon the
Premises.
  **9.
SERVICES AND UTILITIES**
  Provided
that Tenant is not in default hereunder, Landlord agrees to furnish to the
Premises during generally recognized business days, and during hours determined
by Landlord in its sole discretion(? 30 a.m. - 6:30 p.m. Monday through Friday
and 8:00 a.m. - 1:00 p.m. Saturday), and subject to the Rules and Regulations of
the Building or Project, electricity for normal desk top office equipment and
normal copying equipment, and heating, ventilation and air conditioning (“HVAC”)
as required in Landlord’s judgment for the comfortable use and occupancy of the
Premises. If Tenant desires HVAC at any other time, Landlord shall use
reasonable efforts to furnish such service upon reasonable notice from Tenant
and Tenant shall pay Landlord’s charges therefor on demand (Current charges are
$55.00 per hour). Landlord shall also maintain and keep lighted the common
stairs, common entries and restrooms in the Building. Landlord shall not be in
default hereunder or be liable for any damages directly or indirectly resulting
from, nor shall the Rent be abated by reason of (i) the installation, use or
interruption of use of any equipment in connection with the furnishing of any of
the foregoing services, (ii) failure to furnish or delay in furnishing any such
services where such failure or delay is caused by accident or any condition or
event beyond the reasonable control of Landlord, or by the making of necessary
repairs or improvements to the Premises, Building or Project, or (iii) the
limitation, curtailment or rationing of, or restrictions on, use of water,
electricity, gas or any other form of energy serving the Premises, Building or
Project. Landlord shall not be liable under any circumstances for a loss of or
injury to property or business, however occurring, through or in connection with
or incidental to failure to furnish any such services. If Tenant uses heat
generating machines or equipment in the Premises which affect the temperature
otherwise maintained by the HVAC system, Landlord reserves the right to install
supplementary air conditioning units in the Premises and the cost thereof,
including the cost of installation, operation and maintenance thereof, shall be
paid by Tenant to Landlord upon demand by Landlord.
 
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 Tenant
shall not, without the written consent of Landlord, use any apparatus or device
in the Premises, including without limitation, electronic data processing
machines, punch card machines or machines using in excess of 120 volts, which
consumes more electricity than is usually furnished or supplied for the use of
premises as general office space, as determined by Landlord. Tenant shall not
connect any apparatus with electric current except through existing electrical
outlets in the Premises. Tenant shall not consume water or electric current in
excess of that usually furnished or supplied for the use of premises as general
office space (as determined by Landlord), without first procuring the written
consent of Landlord, which Landlord may refuse, and in the event of consent,
Landlord may have installed a water meter or electrical current meter in the
Premises to measure the amount of water or electrical current consumed. The cost
of any such meter and of its installation, maintenance and repair shall be paid
for by the Tenant and Tenant agrees to pay to Landlord promptly upon demand for
all such water and electric current consumed as shown by said meters, at the
rates charged for such services by the local public utility plus any additional
expense incurred in keeping account of the water and electric current so
consumed. If a separate meter is not installed, the excess cost for such water
and electric current shall be established by an estimate made by a utility
company or electrical engineer hired by Landlord at Tenant’s
expense.
  Nothing
contained in this Article shall restrict Landlord’s right to require at any time
separate metering of utilities furnished to the Premises. In the event utilities
are separately metered, Tenant shall pay promptly upon demand for all utilities
consumed at utility rates charged by the local public utility plus any
additional expense incurred by Landlord in keeping account of the utilities so
consumed. Tenant shall be responsible for the maintenance and repair of any such
meters at its sole cost
  Landlord
shall furnish elevator service, lighting replacement for building standard
lights, restroom supplies, window washing and janitor services in a manner that
such services are customarily furnished to comparable office buildings in the
area.
  **10.
CONDITION OF THE PREMISES**
  Tenant’s
taking possession of the Premises shall be deemed conclusive evidence that as of
the date of taking possession the Premises are in good order and satisfactory
condition, except for such matters as to which Tenant gave Landlord notice on or
before the Commencement Date. No promise of Landlord to alter, remodel, repair
or improve the Premises, the Building or the Project and no representation,
express or implied, respecting any matter or thing relating to the Premises,
Building, Project or this Lease (including, without limitation, the condition of
the Premises, the Building or the Project) have been made to Tenant by Landlord
or its Broker or Sales Agent, other than as may be contained herein or in a
separate exhibit or addendum signed by Landlord and Tenant.
  **11.
CONSTRUCTION, REPAIRS AND MAINTENANCE**
  a.
Landlord’s Obligations. Landlord shall maintain in good order, condition and
repair the Building and all other portions of the Premises not the obligation of
Tenant or of any other tenant in the Building.
  b.
Tenant’s Obligations
  (1)
Tenant at Tenant’s sole expense shall, except for services furnished by Landlord
pursuant to Article 9 hereof, maintain the Premises in good order, condition and
repair, including the interior surfaces of the ceilings, walls and floors, all
doors, all interior windows, all plumbing, pipes and fixtures, electrical
wiring, switches and fixtures, Building Standard furnishings and special items
and equipment installed by or at the expense of Tenant.
  (2)
Tenant shall be responsible for all repairs and alterations in and to the
Premises, Building and Project and the facilities and systems thereof, the need
for which arises out of (i) Tenant’s use or occupancy of the Premises, (ii) the
installation, removal, use or operation of Tenant’s Property (as defined in
Article 13) in the Premises, (iii) the moving of Tenant’s Property into or out
of the Building, or (iv) the act, omission, misuse or negligence of Tenant, its
agents, contractors, employees or invitees.
  (3) If
Tenant fails to maintain the Premises in good order, condition and repair,
Landlord shall give Tenant notice to do such acts as are reasonably required to
so maintain the Premises. If Tenant fails to promptly commence such work and
diligently prosecute it to completion, then Landlord shall have the right to do
such acts and expend such funds at the expense of Tenant as are reasonably
required to perform such work. Any amount so expended by Landlord shall be paid
by Tenant promptly after demand with interest at the prime commercial rate then
being charged by Bank of America NT & SA plus two percent (2%) per annum,
from the date of such work, but not to exceed the maximum rate then allowed by
law. Landlord shall have no liability to Tenant for any damage, inconvenience,
or interference with the use of the Premises by Tenant as a result of performing
any such work.
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 c.
Compliance with Law. Landlord and Tenant shall each do all acts required to
comply with all applicable laws, ordinances, and rules of any public authority
relating to their respective maintenance obligations as set forth
herein.
  d. Waiver
by Tenant. Tenant expressly waives the benefits of any statute now or hereafter
in effect which would otherwise afford the Tenant the right to make repairs at
Landlord’s expense or to terminate this Lease because of Landlord’s failure to
keep the Premises in good order, condition and repair.
  e. Load
and Equipment Limits. Tenant shall not place a load upon any floor of the
Premises which exceeds the load per square foot which such floor was designed to
carry, as determined by Landlord or Landlord’s structural engineer. The cost of
any such determination made by Landlord’s structural engineer shall be paid for
by Tenant upon demand. Tenant shall not install business machines or mechanical
equipment which cause noise or vibration to such a degree as to be objectionable
to Landlord or other Building tenants.
  f. Except
as otherwise expressly provided in this Lease, Landlord shall have no liability
to Tenant nor shall Tenant’s obligations under this Lease be reduced or abated
in any manner whatsoever by reason of any inconvenience, annoyance, interruption
or injury to business arising from Landlord’s making any repairs or changes
which Landlord is required or permitted by this Lease or by any other tenant’s
lease or required by law to make in or to any portion of the Project, Building
or the premises. Landlord shall nevertheless use reasonable efforts to minimize
any interference with Tenant’s business in the Premises.
  g. Tenant
shall give Landlord prompt notice of any damage to or defective condition in any
part or appurtenance of the Building’s mechanical, electrical, plumbing, HVAC or
other systems serving, located in, or passing through the Premises.
  h. Upon
the expiration or earlier termination of this Lease, Tenant shall return the
Premises to Landlord clean and in the same condition as on the date Tenant took
possession, except for normal wear and tear. Any damage to the Premises,
including any structural damage, resulting from Tenant’s use or from the removal
of Tenant’s fixtures, furnishings and equipment pursuant to Section 13b shall be
repaired by Tenant at Tenant’s expense.
  **12.
ALTERATIONS AND ADDITIONS**
  a. Tenant
shall not make any additions, alterations or improvements to the Premises
without obtaining the prior written consent of Landlord. Landlord’s consent may
be conditioned on Tenant’s removing any such additions, alterations or
improvements upon the expiration of the Term and restoring the Premises to the
same condition as on the date Tenant took possession. All work with respect to
any addition, alteration or improvement shall be done in a good and workmanlike
manner by properly qualified and licensed personnel approved by Landlord, and
such work shall be diligently prosecuted to completion. Landlord may, at
Landlord’s option, require that any such work be performed by Landlord’s
contractor, in which case the cost of such work shall be paid for before
commencement of the work. Tenant shall pay to Landlord upon completion of any
such work by Landlord’s contractor, an administrative fee of fifteen percent
(15%) of the cost of the work.
  b. Tenant
shall pay the costs of any work done on the Premises pursuant to Section 12a,
and shall keep the Premises, Building and Project free and clear of liens of any
kind. Tenant shall indemnify, defend against and keep Landlord free and harmless
from all liability, loss, damage, costs, attorneys’ fees and any other expense
incurred on account of claims by any person performing work or furnishing
materials or supplies for Tenant or any person claiming under
Tenant.
  Tenant
shall keep Tenant’s leasehold interest, and any additions or improvements which
are or become the property of Landlord under this Lease, free and clear of all
attachment or judgment liens. Before the actual commencement of any work for
which a claim or lien may by filed, Tenant shall give Landlord notice of the
intended commencement date a sufficient time before teat date to enable Landlord
to post notices of non-responsibility or any other notices which Landlord deems
necessary for the proper protection of Landlord’s interest in the Premises,
Building or the Project, and Landlord shall have the right to enter the Premises
and post such notices at any reasonable time.
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 c.
Landlord may require, at Landlord’s sole option, that Tenant provide to
Landlord, at Tenant’s expense, a lien and completion bond in an amount equal to
at least one and one-half (1 ‘‘A) times the total estimated cost of any
additions, alterations or improvements to be made in or to the Premises, to
protect Landlord against any liability for mechanic’s and materialmen’s liens
and to insure timely completion of the work. Nothing contained in this Section
12c shall relieve Tenant of its obligation under Section 12b to keep the
Premises, Building and Project free of all liens.
  d. Unless
their removal is required by Landlord as provided in Section 12a, all additions,
alterations and improvements made to the Premises shall become the property of
Landlord and be surrendered with the Premises upon the expiration of the Term;
provided, however, Tenant’s equipment, machinery and trade fixtures which can be
removed without damage to the Premises shall remain the property of Tenant and
may be removed, subject to the provisions of Section 13b.
  **13.
LEASEHOLD IMPROVEMENTS; TENANT’S PROPERTY**
  a. All
fixtures, equipment, improvements and appurtenances attached to or built into
the Premises at the commencement of or during the Term, whether or not by or at
the expense of Tenant (“Leasehold Improvements”), shall be and remain a part of
the Premises, shall be the property of Landlord and shall not be removed by
Tenant, except as expressly provided in Section 13b.
  b. All
movable partitions, business and trade fixtures, machinery and equipment,
communications equipment and office equipment located in the Premises and
acquired by or for the account of Tenant, without expense to Landlord, which can
be removed without structural damage to the Building, and all furniture,
furnishings and other articles of movable personal property owned by Tenant and
located in the Premises (collectively “Tenant’s Property”) shall be and shall
remain the property of Tenant and may be removed by Tenant at any time during
the Term; provided that if any of Tenant’s Property is removed, Tenant shall
promptly repair any damage to the Premises or to the Building resulting from
such removal.
  **14.
RULES AND REGULATIONS**
  Tenant
agrees to comply with (and cause its agents, contractors, employees and invitees
to comply with) the rules and regulations attached hereto as Addendum B and with
such reasonable modifications thereof and additions thereto as Landlord may from
time to time make. Landlord shall not be responsible for any violation of said
rules and regulations by other tenants or occupants of the Building or
Project.
  **15.
CERTAIN RIGHTS RESERVED BY LANDLORD**
  Landlord
reserves the following rights, exercisable without liability to Tenant for (a)
damage or injury to property, person or business, (b) causing an actual or
constructive eviction from the Premises, or (c) disturbing Tenant’s use or
possession of the Premises:
  a. To
name the Building and Project and to change the name or street address of the
Building or Project;
  b. To
install and maintain all signs on the exterior and interior of the Building and
Project;
  c. To
have pass keys to the Premises and all doors within the Premises, excluding
Tenant’s vaults and safes. Access to the Premises by Landlord during
non-business hours shall be limited to emergency access only unless other
arrangements have been made by the Tenant;
  d. At any
time during the Term, and on reasonable prior notice to Tenant, to inspect the
Premises, and to show the Premises to any prospective purchaser or mortgagee of
the Project, or to any assignee of any mortgage on the Project, or to others
having an interest in the Project or Landlord, and during the last six months of
the Term, to show the Premises to prospective tenants thereof; and
 
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  e. To
enter the Premises for the purpose of making inspections, repairs, alterations,
additions or improvements to the Premises of the Building (including, without
limitation, checking, calibrating, adjusting or balancing controls and other
parts of the HVAC system), and to take all steps as may be necessary or
desirable for the safety, protection, maintenance or preservation of the
Premises or the Building or Landlord’s interest therein, or as may be necessary
or desirable for the operation or improvement of the Building or in order to
comply with laws, orders or requirements of governmental or other authority.
Landlord agrees to use its best efforts (except in an emergency) to minimize
interference with Tenant’s business in the Premises in the course of any such
entry.
  **16.
ASSIGNMENT AND SUBLETTING**
  No
assignment of this Lease or sublease of all or any part of the Premises shall be
permitted, except as provided in this Article 16.
  a. Tenant
shall not, without the prior written consent of Landlord, assign or hypothecate
this Lease or any interest herein or sublet the Premises or any part thereof, or
permit the use of the Premises by any party other than Tenant. Any of the
foregoing acts without such consent shall be void and shall, at the option of
Landlord, terminate this Lease. This Lease shall not, nor shall any interest of
Tenant herein, be assignable by operation of law without the written consent of
Landlord.
  b. If at
any time or from time to time during the Term Tenant desires to assign this
Lease or sublet all or any part of the Premises, Tenant shall give notice to
Landlord setting forth the terms and provisions of the proposed assignment or
sublease, and the identity of the proposed assignee or subtenant. Tenant shall
promptly supply Landlord with such information concerning the business
background and financial condition of such proposed assignee or subtenant as
Landlord may reasonably request. Landlord shall have the option, exercisable by
notice given to Tenant within twenty (20) days after Tenant’s notice is given,
either to sublet such space from Tenant at the rental and on the other terms set
forth in this Lease for the term set forth in Tenant’s notice, or, in the case
of an assignment, to terminate this Lease. If Landlord does not exercise such
option, Tenant may assign the Lease or sublet such space to such proposed
assignee or subtenant on the following further conditions:
  (1)
Landlord shall have the right to approve such proposed assignee or subtenant,
which approval shall not be unreasonably withheld;
  (2) The
assignment or sublease shall be on the same terms set forth in the notice given
to Landlord;
  (3) No
assignment or sublease shall be valid and no assignee or sublessee shall take
possession of the Premises until an executed counterpart of such assignment or
sublease has been delivered to Landlord;
  (4) No
assignee or sublessee shall have a further right to assign or sublet except on
the terms herein contained; and
  (5) Any
sums or other economic consideration received by Tenant as a result of such
assignment or subletting, however denominated under the assignment or sublease,
which exceed, in the aggregate, (i) the total sums which Tenant is obligated to
pay Landlord under this Lease (prorated to reflect obligations allocable to any
portion of the Premises subleased), plus (ii) any real estate brokerage
commissions or fees payable in connection with such assignment or subletting,
shall be paid to Landlord as additional rent under this Lease without affecting
or reducing any other obligations of Tenant hereunder.
  c.
Notwithstanding the provisions of paragraphs a and b above, Tenant may assign
this Lease or sublet the Premises or any portion thereof, without Landlord’s
consent and without extending any recapture or termination option to Landlord,
to any corporation which controls, is controlled by or is under common control
with Tenant, or to any corporation resulting from a merger or consolidation with
Tenant, or to any person or entity which acquires all the assets of Tenant’s
business as a going concern, provided that (i) the assignee or sublessee
assumes, in full, the obligations of Tenant under this Lease, (ii) Tenant
remains fully liable under this Lease, and (iii) the use of the Premises under
Article 8 remains unchanged.
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  d. No
subletting or assignment shall release Tenant of Tenant’s obligations under this
Lease or alter the primary liability of Tenant to pay the Rent and to perform
all other obligations to be performed by Tenant hereunder. The acceptance of
Rent by Landlord from any other person shall not be deemed to be a waiver by
Landlord of any provision hereof. Consent to one assignment or subletting shall
not be deemed consent to any subsequent assignment or subletting. In the event
of default by an assignee or subtenant of Tenant or any successor of Tenant in
the performance of any of the terms hereof, Landlord may proceed directly
against Tenant without the necessity of exhausting remedies against such
assignee, subtenant or successor. Landlord may consent to subsequent assignments
of the Lease or sublettings or amendments or modifications to the Lease with
assignees of Tenant, without notifying Tenant, or any successor of Tenant, and
without obtaining its or their consent thereto and any such actions shall not
relieve Tenant of liability under this Lease.
  e. If
Tenant assigns the Lease or sublets the Premises or requests the consent of
Landlord to any assignment or subletting or if Tenant requests the consent of
Landlord for any act that Tenant proposes to do then Tenant shall, upon demand,
pay Landlord an administrative fee of One Hundred Fifty and No/100ths Dollars
($150.00) plus any attorneys’ fees reasonably incurred by Landlord in connection
with such act or request.
  **17.
HOLDING OVER**
  If after
expiration of the Term, Tenant remains in possession of the Premises with
Landlord’s permission (express or implied), Tenant shall become a tenant from
month to month only, upon all the provisions of this Lease (except as to term
and Base Rent), but the “Monthly Installments of Base Rent” payable by Tenant
shall be increased to one hundred fifty percent (150%) of the Monthly
Installments of Base Rent payable by Tenant at the expiration of the Term. Such
monthly rent shall be payable in advance on or before the first day of each
month. If either party desires to terminate such month to month tenancy, it
shall give the other party not less than thirty (30) days advance written notice
of the date of termination.
  **18.
SURRENDER OF PREMISES**
  a. Tenant
shall peaceably surrender the Premises to Landlord on the Expiration Date, in
broom-clean condition and in as good condition as when Tenant took possession,
except for (i) reasonable wear and tear, (ii) loss by fire or other casualty,
and (iii) loss by condemnation. Tenant shall, on Landlord’s request, remove
Tenant’s Property on or before the Expiration Date and promptly repair all
damage to the Premises or Building caused by such removal.
  b. If
Tenant abandons or surrenders the Premises, or is dispossessed by process of law
or otherwise, any of Tenant’s Property left on the Premises shall be deemed to
be abandoned, and, at Landlord’s option, title shall pass to Landlord under this
Lease as by a bill of sale. If Landlord elects to remove all or any part of such
Tenant’s Property, the cost of removal, including repairing any damage to the
Premises or Building caused by such removal, shall be paid by Tenant. On the
Expiration Date Tenant shall surrender all keys to the Premises.
  **19.
DESTRUCTION OR DAMAGE**
  a. If the
Premises or the portion of the Building necessary for Tenant’s occupancy is
damaged by fire, earthquake, act of God, the elements or other casualty,
Landlord shall, subject to the provisions of this Article, promptly repair the
damage, if such repairs can, in Landlord’s opinion, be completed within ninety
(90) days. If Landlord determines that repairs can be completed within ninety
(90) days, this Lease shall remain in full force and effect, except that if such
damage is not the result of the negligence or willful misconduct of Tenant or
Tenant’s agents, employees, contractors, licensees or invitees, the Base Rent
shall be abated to the extent Tenant’s use of the Premises is impaired,
commencing with the date of damage and continuing until completion of the
repairs required of Landlord under Section 19d.
  b. If in
Landlord’s opinion, such repairs to the Premises or portion of the Building
necessary for Tenant’s occupancy cannot be completed within ninety (90) days,
Landlord may elect upon notice to Tenant given within thirty (30) days after the
date of such fire or other casualty, to repair such damage, in which event this
Lease shall continue in full force and effect, but the Base Rent shall be
partially abated as provided in Section 19a. If Landlord does not so elect to
make such repairs, this Lease shall terminate as of the date of such fire or
other casualty.
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 c. If any
other portion of the Building or Project is totally destroyed or damaged to the
extent that in Landlord’s opinion repair thereof cannot be completed within
ninety (90) days, Landlord may elect upon notice to Tenant given within thirty
(30) days after the date of such fire or other casualty, to repair such damage,
in which event this Lease shall continue in full force and effect, but the Base
Rent shall be partially abated as provided in Section 19a. If Landlord does not
elect to make such repairs, this Lease shall terminate as of the date of such
fire or other casualty.
  d. If the
Premises are to be repaired under this Article, Landlord shall repair at its
cost any injury or damage to the Building and Building Standard Work in the
Premises. Tenant shall be responsible at its sole cost and expense for the
repair, restoration and replacement of any other Leasehold Improvements and
Tenant’s Property. Landlord shall not be liable for any loss of business,
inconvenience or annoyance arising from any repair or restoration of any portion
of the Premises, Building or Project as a result of any damage from fire or
other casualty.
  e. This
Lease shall be considered an express agreement governing any case of damage to
or destruction of the Premises, Building or Project by fire or other casualty,
and any present or future law which purports to govern the rights of Landlord
and Tenant in such circumstances in the absence of express agreement, shall have
no application.
  **20.
EMINENT DOMAIN**
  a. If the
whole of the Building or Premises is lawfully taken by condemnation or in any
other manner for any public or quasi-public purpose, this Lease shall terminate
as of the date of such taking, and Rent shall be prorated to such date. If less
than the whole of the Building or Premises is so taken, this Lease shall be
unaffected by such taking, provided that (i) Tenant shall have the right to
terminate this Lease by notice to Landlord given within ninety (90) days after
the date of such taking if twenty percent (20%) or more of the Premises is taken
and the remaining area of the Premises is not reasonably sufficient for Tenant
to continue operation of its business, and (ii) Landlord shall have the right to
terminate this Lease by notice to Tenant given within ninety (90) days after the
date of such taking. If either Landlord or Tenant so elects to terminate this
Lease, the Lease shall terminate on the thirtieth (30th) day after either such
notice. The Rent shall be prorated to the date of termination. If this Lease
continues in force upon such partial taking, the Base Rent and Tenant’s
Proportionate Share shall be equitably adjusted according to the remaining
Rentable Area of the Premises and Project.
  b. In the
event of any taking, partial or whole, all of the proceeds of any award,
judgment or settlement payable by the condemning authority shall be the
exclusive property of Landlord, and Tenant hereby assigns to Landlord all of its
right, title and interest in any award, judgment or settlement from the
condemning authority. Tenant, however, shall have the right, to the extent that
Landlord’s award is not reduced or prejudiced, to claim from the condemning
authority (but not from Landlord) such compensation as may be recoverable by
Tenant in its own right for relocation expenses and damage to Tenant’s personal
property.
  c. In the
event of a partial taking of the Premises which does not result in a termination
of this Lease, Landlord shall restore the remaining portion of the Premises as
nearly as practicable to its condition prior to the condemnation or taking, but
only to the extent of Building Standard Work. Tenant shall be responsible at its
sole cost and expense for the repair, restoration and replacement of any other
Leasehold Improvements and Tenant’s Property.
  **21.
INDEMNIFICATION**
  a. Tenant
shall indemnify and hold Landlord harmless against and from liability and claims
of any kind for loss or damage to property of Tenant or any other person, or for
any injury to or death of any person, arising out of: (1) Tenant’s use and
occupancy of the Premises, or any work, activity or other things allowed or
suffered by Tenant to be done in, on or about the Premises; (2) any breach or
default by Tenant of any of Tenant’s obligations under this Lease; or (3) any
negligent or otherwise tortious act or omission of Tenant, its agents,
employees, invitees or contractors. Tenant shall at Tenant’s expense, and by
counsel satisfactory to Landlord, defend Landlord in any action or proceeding
arising from any such claim and shall indemnify Landlord against all costs,
attorneys’ fees, expert witness fees and any other expenses incurred in such
action or proceeding. As a material part of the consideration for Landlord’s
execution of this Lease, Tenant hereby assumes all risk of damage or injury to
any person or property in, on or about the Premises from any cause.
 
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  b.
Landlord shall not be liable for injury or damage which may be sustained by the
person or property of Tenant, its employees, invitees or customers, or any other
person in or about the Premises, caused by or resulting from fire, steam,
electricity, gas, water or rain which may leak or flow from or into any part of
the Premises, or from the breakage, leakage, obstruction or other defects of
pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting
fixtures, whether such damage or injury results from conditions arising upon the
Premises or upon other portions of the Building or Project or from other
sources. Landlord shall not be liable for any damages arising from any act or
omission of any other tenant of the Building or Project.
  **22.
TENANTS INSURANCE**
  a. All
insurance required to be carried by Tenant hereunder shall be issued by
responsible insurance companies acceptable to Landlord and Landlord’s lender and
qualified to do business in the State. Each policy shall name Landlord, and at
Landlord’s request any mortgagee of Landlord, as an additional insured, as their
respective interests may appear. Each policy shall contain (i) a cross-liability
endorsement, (ii) a provision that such policy and the coverage evidenced
thereby shall be primary and non-contributing with respect to any policies
carried by Landlord and that any coverage carried by Landlord shall be excess
insurance, and (iii) a waiver by the insurer of any right of subrogation against
Landlord, its agents, employees and representatives, which arises or might arise
by reason of any payment under such policy or by reason of any act or omission
of Landlord, its agents, employees or representatives. A copy of each paid up
policy (authenticated by the insurer) or certificate of the insurer evidencing
the existence and amount of each insurance policy required hereunder shall be
delivered to Landlord before the date Tenant is first given the right of
possession of the Premises, and thereafter within thirty (30) days after any
demand by Landlord therefor. Landlord may, at any time and from time to time,
inspect and/or copy any insurance policies required to be maintained by Tenant
hereunder. No such policy shall be cancelable except after twenty (20) days
written notice to Landlord and Landlord’s lender. Tenant shall furnish Landlord
with renewals or “binders” of any such policy at least ten (10) days prior to
the expiration thereof. Tenant agrees that if Tenant does not take out and
maintain such insurance, Landlord may (but shall not be required to) procure
said insurance on Tenant’s behalf and charge the Tenant the premiums together
with a twenty-five percent (25%) handling charge, payable upon demand. Tenant
shall have the right to provide such insurance coverage pursuant to blanket
policies obtained by the Tenant, provided such blanket policies expressly afford
coverage to the Premises, Landlord, Landlord’s mortgagee and Tenant as required
by this Lease.
  b.
Beginning on the date Tenant is given access to the Premises for any purpose and
continuing until expiration of the Term, Tenant shall procure, pay for and
maintain in effect policies of casualty insurance covering (i) all Leasehold
Improvements (including any alterations, additions or improvements as may be
made by Tenant pursuant to the provisions of Article 12 hereof), and (ii) trade
fixtures, merchandise and other personal property from time to time in, on or
about the Premises, in an amount not less than one hundred percent (100%) of
their actual replacement cost from time to time, providing protection against
any peril included with the classification “Fire and Extended Coverage” together
with insurance against sprinkler damage, vandalism and malicious mischief. The
proceeds of such insurance shall be used for the repair or replacement of the
property so insured. Upon termination of this Lease following a casualty as set
forth herein, the proceeds under (i) shall be paid to Landlord, and the proceeds
under (ii) above shall be paid to Tenant.
  c.
Beginning on the date Tenant is given access to the Premises for any purpose and
continuing until expiration of the Term, Tenant shall procure, pay for and
maintain in effect workers’ compensation insurance as required by law and
comprehensive public liability and property damage insurance with respect to the
construction of improvements on the Premises, the use, operation or condition of
the Premises and the operations of Tenant in, on or about the Premises,
providing personal injury and broad form property damage coverage for not less
than One Million Dollars ($1,000,000.00) combined single limit for bodily
injury, death and property damage liability.
  d. Not
less than every three (3) years during the Term, Landlord and Tenant shall
mutually agree to increases in all of Tenant’s insurance policy limits for all
insurance to be carried by Tenant as set forth in this Article. In the event
Landlord and Tenant cannot mutually agree upon the amounts of said increases,
then Tenant agrees that all insurance policy limits as set forth in this Article
shall be adjusted for increases in the cost of living.
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 **23.
WAIVER OF SUBROGATION**
  Landlord
and Tenant each hereby waive all rights of recovery against the other and
against the officers, employees, agents and representatives of the other, on
account of loss by or damage to the waiving party of its property or the
property of others under its control, to the extent that such loss or damage is
insured against under any fire and extended coverage insurance policy which
either may have in force at the time of the loss or damage. Tenant shall, upon
obtaining the policies of insurance required under this Lease, give notice to
its insurance carrier or carriers that the foregoing mutual waiver of
subrogation is contained in this Lease.
  **24.
SUBORDINATION AND ATTORNMENT**
  Upon
written request of Landlord, or any first mortgagee or first deed of trust
beneficiary of Landlord, or ground lessor of Landlord, Tenant shall, in writing,
subordinate its rights under this Lease to the lien of any first mortgage or
first deed of trust, or to the interest of any lease in which Landlord is
lessee, and to all advances made or hereafter to be made thereunder. However,
before signing any subordination agreement, Tenant shall have the right to
obtain from any lender or lessor or Landlord requesting such subordination, an
agreement in writing providing that, as long as Tenant is not in default
hereunder, this Lease shall remain in effect for the full Term. The holder of
any security interest may, upon written notice to Tenant, elect to have this
Lease prior to its security interest regardless of the time of the granting or
recording of such security interest.
  In the
event of any foreclosure sale, transfer in lieu of foreclosure or termination of
the lease in which Landlord is lessee, Tenant shall attorn to the purchaser,
transferee or lessor as the case may be, and recognize that party as Landlord
under this Lease, provided such party acquires and accepts the Premises subject
to this Lease.
  **25.
TENANT ESTOPPEL CERTIFICATES**
  Within
ten (10) days after written request from Landlord, Tenant shall execute and
deliver to Landlord or Landlord’s designee, a written statement certifying (a)
that this Lease is unmodified and in full force and effect, or is in full force
and effect as modified and stating the modifications; (b) the amount of Base
Rent and the date to which Base Rent and additional rent have been paid in
advance; (c) the amount of any security deposited with Landlord; and (d) that
Landlord is not in default hereunder or, if Landlord is claimed to be in
default, stating the nature of any claimed default. Any such statement may be
relied upon by a purchaser, assignee or lender. Tenant’s failure to execute and
deliver such statement within the time required shall at Landlord’s election be
a default under this Lease and shall also be conclusive upon Tenant that: (1)
this Lease is in full force and effect and has not been modified except as
represented by Landlord; (2) there are no uncured defaults in Landlord’s
performance and that Tenant has no right of offset, counter-claim or deduction
against Rent; and (3) not more than one month’s Rent has been paid in
advance.
  **26.
TRANSFER OF LANDLORD’S INTEREST**
  In the
event of any sale or transfer by Landlord of the Premises, Building or Project,
and assignment of this Lease by Landlord, Landlord shall be and is hereby
entirely freed and relieved of any and all liability and obligations contained
in or derived from this Lease arising out of any act, occurrence or omission
relating to the Premises, Building, Project or Lease occurring after the
consummation of such sale or transfer, providing the purchaser shall expressly
assume all of the covenants and obligations of Landlord under this Lease. If any
security deposit or prepaid Rent has been paid by Tenant, Landlord may transfer
the security deposit or prepaid Rent to Landlord’s successor and upon such
transfer, Landlord shall be relieved of any and all further liability with
respect thereto.
  **27.
DEFAULT**
  27.1.
Tenant’s Default. The occurrence of any one or more of the following events
shall constitute a default and breach of this Lease by Tenant:
  a. If
Tenant abandons or vacates the Premises accompanied by non-payment of Rent;
or
 
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 b. If
Tenant fails to pay any Rent or any other charges required to be paid by Tenant
under this Lease and such failure continues for five (5) days after such payment
is due and payable; or
  c. If
Tenant fails to promptly and fully perform any other covenant, condition or
agreement contained in this Lease and such failure continues for thirty (30)
days after written notice thereof from Landlord to Tenant; or
  d. If a
writ of attachment or execution is levied on this Lease or on any of Tenant’s
Property; or
  e. If
Tenant makes a general assignment for the benefit of creditors, or provides for
an arrangement, composition, extension or adjustment with its creditors;
or
  f. If
Tenant files a voluntary petition for relief or if a petition against Tenant in
a proceeding under the federal bankruptcy laws or other insolvency laws is filed
and not withdrawn or dismissed within forty-five (45) days thereafter, or if
under the provisions of any law providing for reorganization or winding up of
corporations, any court of competent jurisdiction assumes jurisdiction, custody
or control of Tenant or any substantial part of its property and such
jurisdiction, custody or control remains in force unrelinquished, unstayed or
unterminated for a period of forty-five (45) days; or
  g. If in
any proceeding or action in which Tenant is a party, a trustee, receiver, agent
or custodian is appointed to take charge of the Premises or Tenant’s Property
(or has the authority to do so) for the purpose of enforcing a lien against the
Premises or Tenant’s Property; or
  h. If
Tenant is a partnership or consists of more than one (1) person or entity, if
any partner of the partnership or other person or entity is involved in any of
the acts or events described in subparagraphs d through g above.
  27.2.
Remedies. In the event of Tenant’s default hereunder, then in addition to any
other rights or remedies Landlord may have under any law, Landlord shall have
the right, at Landlord’s option, without further notice or demand of any kind to
do the following:
  a.
Terminate this Lease and Tenant’s right to possession of the Premises and
reenter the Premises and take possession thereof, and Tenant shall have no
further claim to the Premises or under this Lease; or
  b.
Continue this Lease in effect, reenter and occupy the Premises for the account
of Tenant, and collect any unpaid Rent or other charges which have or thereafter
become due and payable; or
  c.
Reenter the Premises under the provisions of subparagraph b, and thereafter
elect to terminate this Lease and Tenant’s right to possession of the
Premises.
  If
Landlord reenters the Premises under the provisions of subparagraphs b or c
above, Landlord shall not be deemed to have terminated this Lease or the
obligation of Tenant to pay any Rent or other charges thereafter occurring,
unless Landlord notifies Tenant in writing of Landlord’s election to terminate
this Lease. In the event of any reentry or retaking of possession by Landlord,
Landlord shall have the right, but not the obligation, to remove all or any part
of Tenant’s Property in the Premises and to place such property in storage at a
public warehouse at the expense and risk of Tenant. If Landlord elects to relet
the Premises for the account of Tenant, the rent received by Landlord from such
reletting shall be applied as follows: first, to the payment of any indebtedness
other than Rent due hereunder from Tenant to Landlord; second, to the payment of
any costs of such reletting; third, to the payment of the cost of any
alterations or repairs to the Premises; fourth, to the payment of Rent due and
unpaid hereunder; and the balance, if any, shall be held by Landlord and applied
in payment of future Rent as it becomes due. If that portion of rent received
from the reletting which is applied against the Rent due hereunder is less than
the amount of the Rent due, Tenant shall pay the deficiency to Landlord promptly
upon demand by Landlord. Such deficiency shall be calculated and paid monthly.
Tenant shall also pay to Landlord, as soon as determined, any costs and expenses
incurred by Landlord in connection with such reletting or in making alterations
and repairs to the Premises, which are not covered by the rent received from the
reletting.
  Should
Landlord elect to terminate this Lease under the provisions of subparagraph a or
c above, Landlord may recover as damages from Tenant the following:
 
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  1. Past
Rent. The worth at the time of the award of any unpaid Rent which had been
earned at the time of termination; plus
  2. Rent
Prior to Award. The worth at the time of the award of the amount by which the
unpaid Rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
  3. Rent
After Award. The worth at the time of the award of the amount by which the
unpaid Rent for the balance of the Term after the time of award exceeds the
amount of the rental loss that Tenant proves could be reasonably avoided;
plus
  4.
Proximately Caused Damages. Any other amount necessary to compensate Landlord
for all detriment proximately caused by Tenant’s failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including, but not limited to, any costs or expenses
(including attorneys’ fees), incurred by Landlord in (a) retaking possession of
the Premises, (b) maintaining the Premises after Tenant’s default, (c) preparing
the Premises for reletting to a new tenant, including any repairs or
alterations, and (d) reletting the Premises, including broker’s
commissions.
  “The
worth at the time of the award” as used in subparagraphs 1 and 2, is to be
computed by allowing interest at the rate of ten percent (10%) per annum. “The
worth at the time of the award” as used in subparagraph 3 above, is to be
computed by discounting the amount at the discount rate of the Federal Reserve
Bank situated nearest to the Premises at the time of the award plus one percent
(1 %).
  The
waiver by Landlord of any breach of any term, covenant or condition of this
Lease shall not be deemed a waiver of such term, covenant or condition or of any
subsequent breach of the same or any other term, covenant or condition.
Acceptance of Rent by Landlord subsequent to any breach hereof shall not be
deemed a waiver of any preceding breach other than the failure to pay the
particular Rent so accepted, regardless of Landlord’s knowledge of any breach at
the time of such acceptance of Rent. Landlord shall not be deemed to have waived
any term, covenant or condition unless Landlord gives Tenant written notice of
such waiver.
  27.3.
Landlord’s Default. If Landlord fails to perform any covenant, condition or
agreement contained in this Lease within thirty (30) days after receipt of
written notice from Tenant specifying such default, or if such default cannot
reasonably be cured within thirty (30) days, if Landlord fails to commence to
cure within that thirty (30) day period, then Landlord shall be liable to Tenant
for any damages sustained by Tenant as a result of Landlord’s breach; provided,
however, it is expressly understood and agreed that if Tenant obtains a money
judgment against Landlord resulting from any default or other claim arising
under this Lease, that judgment shall be satisfied only out of the rents,
issues, profits, and other income actually received on account of Landlord’s
right, title and interest in the Premises, Building or Project, and no other
real, personal, or mixed property of Landlord (or of any of the partners which
comprise Landlord, if any) wherever situated, shall be subject to levy to
satisfy such judgment. If, after notice to Landlord of default, Landlord (or any
first mortgagee or first deed of trust beneficiary of Landlord) fails to cure
the default as provided herein, then Tenant shall have the right to cure that
default at Landlord’s expense. Tenant shall not have the right to terminate this
Lease or to withhold, reduce or offset any amount against any payments of Rent
or any other charges due and payable under this Lease except as otherwise
specifically provided herein.
  **28.
BROKERAGE FEES**
  Tenant
warrants and represents that it has not dealt with any real estate broker or
agent in connection with this Lease or its negotiation except Broker(s) listed
in Article 2.c. of this Lease. Tenant shall indemnify and hold Landlord harmless
from any cost, expense or liability (including costs of suit and reasonable
attorneys’ fees) for any compensation, commission or fees claimed by any other
real estate broker or agent in connection with this Lease or its negotiation by
reason of any act of Tenant.
  **29.
NOTICES**
  All
notices, approvals and demands permitted or required to be given under this
Lease shall be in writing and deemed duly served or given if personally
delivered or sent by certified or registered U.S. mail, postage prepaid, and
addressed as follows: (a) if to Landlord, to Landlord’s Mailing Address and to
the Building manager, and (b) if to Tenant, to Tenant’s Mailing Address;
provided, however, notices to Tenant shall be deemed duly served or given if
delivered or mailed to Tenant at the Premises. Landlord and Tenant may from time
to time by notice to the other designate another place for receipt of future
notices.
 
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 ****
 **30.
GOVERNMENT ENERGY OR UTILITY CONTROLS**
  In the
event of imposition of federal, state or local government controls, rules,
regulations or restrictions on the use or consumption of energy or other
utilities during the Term, both Landlord and Tenant shall be bound thereby. In
the event of a difference in interpretation by Landlord and Tenant of any such
controls, the interpretation of Landlord shall prevail, and Landlord shall have
the right to enforce compliance therewith, including the right of entry into the
Premises to effect compliance.
  **31.
QUIET ENJOYMENT**
  Tenant,
upon paying the Rent and performing all of its obligations under this Lease,
shall peaceably and quietly enjoy the Premises, subject to the terms of this
Lease and to any mortgage, lease or other agreement to which this Lease may be
subordinate.
  **32.
OBSERVANCE OF LAW**
  Tenant
shall not use the Premises or permit anything to be done in or about the
Premises which will in any way conflict with any law, statute, ordinance or
governmental rule or regulation now in force or which may hereafter be enacted
or promulgated. Tenant shall, at its sole cost and expense, promptly comply with
all laws, statutes, ordinances and governmental rules, regulations or
requirements now in force or which may hereafter be in force, and with the
requirements of any board of fire insurance underwriters or other similar bodies
now or hereafter constituted, relating to, or affecting the condition, use or
occupancy of the Premises, excluding structural changes not related to or
affected by Tenant’s Improvements or acts. The judgment of any court of
competent jurisdiction or the admission of Tenant in any action against Tenant,
whether Landlord is a party thereto or not, that Tenant has violated any law,
ordinance or governmental rule, regulation or requirement, shall be conclusive
of that fact as between Landlord and Tenant.
  **33.
FORCE MAJEURE.**
  Any
prevention, delay or stoppage of work to be performed by Landlord or Tenant
which is due to strikes, labor disputes, inability to obtain labor, materials,
equipment or reasonable substitutes therefor, acts of God, governmental
restrictions or regulations or controls, judicial orders, enemy or hostile
government actions, civil commotion, fire or other casualty, or other causes
beyond the reasonable control of the party obligated to perform hereunder, shall
excuse performance of the work by that party for a period equal to the duration
of that prevention, delay or stoppage. Nothing in this Article 34 shall excuse
or delay Tenant’s obligation to pay Rent or other charges under this
lease.
  **34.
CURING TENANTS DEFAULTS.**
  If Tenant
defaults in the performance of any of its obligations under this Lease, Landlord
may (but shall not be obligated to) without waiving such default, perform the
same for the account at the expense of Tenant. Tenant shall pay Landlord all
costs of such performance promptly upon receipt of a bill therefor.
  **35.
SIGN CONTROL**
  Tenant
shall not affix, paint, erect or inscribe any sign, projection, awning, signal
or advertisement of any kind to any part of the Premises, Building or Project,
including without limitation, the inside or outside of windows or doors, without
the written consent of Landlord. Tenant shall be allowed to display required
regulatory decals for it’s use (i.e. FDIC) with written consent of the Landlord,
which shall not be unreasonably withheld. Landlord shall have the right to
remove any signs or other matter, installed without Landlord’s permission,
without being liable to Tenant by reason of such removal, and to charge the cost
of removal to Tenant as additional rent hereunder, payable within ten (10) days
of written demand by Landlord.
  **36.
MISCELLANEOUS.**
  a. Accord
and Satisfaction; Allocation of Payments. No payment by Tenant or receipt by
Landlord of a lesser amount than the Rent provided for in this Lease shall be
deemed to be other than on account of the earliest due Rent, nor shall any
endorsement or statement on any check or letter accompanying any check or
payment as Rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord’s right to recover the
balance of the Rent or pursue any other remedy provided for in this Lease. In
connection with the foregoing, Landlord shall have the absolute right in its
sole discretion to apply any payment received from Tenant to any account or
other payment of Tenant then not current and due or delinquent.
  b.
Addenda. If any provision contained in an addendum to this Lease is inconsistent
with any other provision herein, the provision contained in the addendum shall
control, unless otherwise provided in the addendum.
  c.
Attorneys’ Fees. If any action or proceeding is brought by either party against
the other pertaining to or arising out of this Lease, the finally prevailing
party shall be entitled to recover all costs and expenses, including reasonable
attorneys’ fees, incurred on account of such action or proceeding.
  d.
Captions, Articles and Section Numbers. The captions appearing within the body
of this Lease have been inserted as a matter of convenience and for reference
only and in no way define, limit or enlarge the scope or meaning of this Lease.
All references to Article and Section numbers refer to Articles and Sections in
this Lease.
  e.
Changes Requested by Lender. Neither Landlord or Tenant shall unreasonably
withhold its consent to changes or amendments to this Lease requested by the
lender on Landlord’s interest, so long as these changes do not alter the basic
business terms of this Lease or otherwise materially diminish any rights or
materially increase any obligations of the party from whom consent to such
change or amendment is requested.
 
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 f. Choice
of Law. This Lease shall be construed and enforced in accordance with the laws
of the State of California.
  g.
Consent. Notwithstanding anything contained in this Lease to the contrary,
Tenant shall have no claim, and hereby waives the right to any claim against
Landlord for money damages by reason of any refusal, withholding or delaying by
Landlord of any consent, approval or statement of satisfaction and in such
event, Tenant’s only remedies therefor shall be an action for specific
performance, injunction or declaratory judgment to enforce any right to such
consent, etc.
  h.
Corporate Authority. If Tenant is a corporation, each individual signing this
Lease on behalf of Tenant represents and warrants that he is duly authorized to
execute and deliver this Lease on behalf of the corporation, and that this Lease
is binding on Tenant in accordance with its terms. Tenant shall, at Landlord’s
request, deliver a certified copy of a resolution of its board of directors
authorizing such execution.
  i.
Counterparts. This Lease may be executed in multiple counterparts, all of which
shall constitute one and the same Lease.
  j.
Execution of Lease; No Option. The submission of this Lease to Tenant shall be
for examination purposes only, and does not and shall not constitute a
reservation of or option for Tenant to lease, or otherwise create any interest
of Tenant in the Premises or any other premises within the Building or project.
Execution of this Lease by Tenant and its return to Landlord shall not be
binding on Landlord notwithstanding any time interval, until Landlord has in
fact signed and delivered this Lease to Tenant.
  k.
Furnishing of Financial Statements; Tenant’s Representation. In order to induce
Landlord to enter into this Lease Tenant agrees that it shall promptly furnish
Landlord, from time to time, upon Landlord’s written request, with financial
statements reflecting Tenant’s current financial condition. Tenant represents
and warrants that all financial statements, records and information furnished by
Tenant to Landlord in connection with this Lease are true, correct and complete
in all respects.
  l.
Further Assurances. The parties agree to promptly sign all documents reasonably
requested to give effect to the provisions of this Lease.
  m.
Mortgage Protection. Tenant agrees to send by certified or registered mail to
any first mortgagee or first deed of trust beneficiary of Landlord whose address
has been furnished to Tenant, a copy of any notice of default served by Tenant
on Landlord. If Landlord fails to cure such default within the time provided for
in this Lease, such mortgagee or beneficiary shall have an additional thirty
(30) days to cure such default; provided that if such default cannot reasonably
be cured within that thirty (30) day period, then such mortgagee or beneficiary
shall have such additional time to cure the default as is reasonably necessary
under the circumstances.
  n. Prior
Agreements; Amendments. This Lease contains all of the agreements of the parties
with respect to any matter covered or mentioned in this Lease, and no prior
agreement or understanding pertaining to any such matter shall be effective for
any purpose. No provisions of this Lease may be amended or added to except by an
agreement in writing signed by the parties or their respective successors in
interest.
  o.
Recording. Tenant shall not record this Lease without the prior written consent
of Landlord. Tenant, upon the request of Landlord, shall execute and acknowledge
a “short form” memorandum of this Lease for recording purposes.
  p.
Severability. A final determination by a court of competent jurisdiction that
any provision of this Lease is invalid shall not affect the validity of any
other provision, and any provision so determined to be invalid shall, to the
extent possible, be construed to accomplish its intended effect.
  q.
Successors and Assigns. This Lease shall apply to and bind the heirs, personal
representatives, and permitted successors and assigns of the
parties.
  r. Time
of the Essence. Time is of the essence of this Lease.
  s.
Waiver. No delay or omission in the exercise of any right or remedy of Landlord
upon any default by Tenant shall impair such right or remedy or be construed as
a waiver of such default.
 
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 t.
Terminology. For purposes of this Lease the term “Landlord” shall be
interchangeable with “Lessor” and the term “Tenant” shall be interchangeable
with “Lessee”.
  The
receipt and acceptance by Landlord of delinquent Rent shall not constitute a
waiver of any other default; it shall constitute only a waiver of timely payment
for the particular Rent payment involved.
  No act or
conduct of Landlord, including, without limitation, the acceptance of keys to
the Premises, shall constitute an acceptance of the surrender of the Premises by
Tenant before the expiration of the Term. Only a written notice from Landlord to
Tenant shall constitute acceptance of the surrender of the Premises and
accomplish a termination of the Lease.
  Landlord’s
consent to or approval of any act by Tenant requiring Landlord’s consent or
approval shall not be deemed to waive or render unnecessary Landlord’s consent
to or approval of any subsequent act by Tenant.
  Any
waiver by Landlord of any default must be in writing and shall not be a waiver
of any other default concerning the same or any other provision of the
Lease.
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 The
Parties hereto have executed this Lease as of the dates set forth
below.
  Date:___________________________
    Date:______________________Landlord: OLEN COMMERCIAL REALTY
    Tenant: PACIFIC COAST NATIONAL
    BANCORP,A
      CALIFORNIA CORPORATIONBy:_____________________________
    By:_________________________Name: Andrei Olenicoff
    Name:
      Michael S. HahnTitle:Vice
      President
    Title:PresidentBy:___________________________Name:
      R. W. GrinyerTitle:SecretaryLandlord’s Mailing Address:
    Tenant’s
      Mailing Address:7 Corporate Plaza
    905
      Calle Amenacer, Suite 100Newport Beach, CA 92660
    San Clemente, CA 92673**Rent
      Payment Address:****Olen
      Commercial Realty Corp. Unit Q****P.
      0. Box 51915****Los
      Angeles, CA 90051-6215**Telephone/Facsimile: 949.644.6536
      / 949.719.7200
    Telephone/Facsimile: 949.361.4300/949.361.4366Federal ID No.88-0309052
    Federal
      ID No._________________________
 
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