exv10w16






Exhibit 10.16




OFFICE SPACE LEASE




BETWEEN




UTC PROPERTIES LLC




AND




UNITED BUSINESS HOLDINGS, INC.




 









 





OFFICE SPACE LEASE








     THIS
LEASE is made as of the 9th day of January, 2008, by
and between UTC PROPERTIES LLC, a Delaware limited liability company, hereafter called
“Landlord,” and UNITED BUSINESS HOLDINGS, INC., a Nevada corporation, hereafter called “Tenant.”







ARTICLE I. BASIC LEASE PROVISIONS




     Each reference in this Lease to the “Basic Lease Provisions” shall mean and refer to the
following collective terms, the application of which shall be governed by the provisions in the
remaining Articles of this Lease.




	1.	 	Tenant’s Trade Name: United Business Bank of California
	 
	2.	 	Premises: Suite Nos. 110 and 120 (the Premises are more particularly described in Section
2.1).
	 
	 	 	Address of Building: 4380 La Jolla Village Drive, San Diego, California 92122
	 
	 	 	Project Description: The Plaza at La Jolla Village
	 
	3.	 	Use of Premises: General office and retail banking and for no other use.
	 
	4.	 	Commencement Date: March 1, 2008
	 
	5.	 	Lease Term: The Term of the Lease shall expire at midnight on February 28, 2013.
	 
	6.	 	Basic Rent:





	 	 	 	 	 
	Months of Term or	 	Monthly Rate Per	 	 
	Period	 	Square Foot	 	Monthly Basic Rent
	3/1/08–2/28/09
	 	$3.05
	 	$23,204.00
	3/1/09-2/28/10
	 	$3.15
	 	$23,965.00
	3/1/10-2/28/11
	 	$3.25
	 	$24,726.00
	3/1/11-2/28/12
	 	$3.35
	 	$25,487.00
	3/1/12-2/28/13
	 	$3.45
	 	$26,248.00







	7.	 	Property Tax Base: The Property Taxes per rentable square foot incurred by Landlord and
attributable to the twelve month period ending June 30, 2008 (the “Base Year”).
	 
	 	 	Building Cost Base: The Building Costs per rentable square foot incurred by Landlord and
attributable to the Base Year.
	 
	 	 	Expense Recovery Period: Every twelve month period during the Term (or portion thereof during
the first and last Lease years) ending June 30.
	 
	8.	 	Floor Area of Premises: approximately 7,608 rentable square feet
	 
	9.	 	Security Deposit: $335,000.00, which may be in the form of cash or a letter of credit.
	 
	10.	 	Broker(s): Irvine Realty Company (“Landlord’s Broker”) and Lee & Associates/Newport Beach
(“Tenant’s Broker”)
	 
	11.	 	Plan Approval Date: December 31, 2007
	 
	12.	 	Parking: A minimum of ten (10), but no more than Twenty-seven (27) unreserved vehicle
parking spaces; provided that once Tenant elects to lease such parking spaces Tenant shall be
required to lease the spaces for the duration of the initial Term.




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	13.	 	Address for Payments and Notices:






	 	 	 	 
	 	LANDLORD	 	TENANT
	 	Payment Address:
	 	 
	 	 
	 	 
	 	UTC Properties LLC

	 	United Business Holdings, Inc.
	 	Department #6966

	 	4380 La Jolla Village Drive
	 	Los Angeles, CA 90084-6966

	 	Suite 110
	 	 

	 	San Diego, California 92122
	 	 
	 	 
	 	Notice Address:
	 	 
	 	 

	 	With a copy of notices to:
	 	 
	 	 
	 	UTC Properties LLC

	 	Friedman Goldberg LLP
	 	9255 Towne Centre Drive, Suite 800

	 	420 Aviation Blvd.,
	 	San Diego, CA 92121

	 	Suite 201
	 	Attn: Property Manager

	 	Santa Rosa, California 95403
	 	 
	 	 
	 	with a copy of notices to:
	 	 
	 	 
	 	 
	 	THE IRVINE COMPANY LLC
	 	 
	 	P.O. Box 6370
	 	 
	 	Newport Beach, CA 92658-6370
	 	 
	 	Attn: Vice President, Operations,
	 	 
	 	Office Properties/San Diego
	 	 









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ARTICLE II. PREMISES




     SECTION 2.1. LEASED PREMISES. Landlord leases to Tenant and Tenant rents from Landlord the
premises shown in Exhibit A (the “Premises”), containing approximately the floor area set forth in
Item 8 of the Basic Lease Provisions and known by the suite number identified in Item 2 of the
Basic Lease Provisions. The Premises are located in the building identified in Item 2 of the Basic
Lease Provisions (the “Building”), which is a portion of the project described in Item 2 (the
“Project”). If, upon completion of the space plans for the Premises, Landlord’s architect or space
planner determines that the rentable square footage of the Premises differs from that set forth in
the Basic Lease Provisions, then Landlord shall so notify Tenant and the Basic Rent (as shown in
Item 6 of the Basic Lease Provisions) shall be promptly adjusted in proportion to the change in
square footage. Within five (5) days following Landlord’s request, the parties shall memorialize
the adjustments by executing an amendment to this Lease prepared by Landlord.



     SECTION 2.2. ACCEPTANCE OF PREMISES. Tenant acknowledges that neither Landlord nor any
representative of Landlord has made any representation or warranty with respect to the Premises or
the Building or the suitability or fitness of either for any purpose, except as set forth in this
Lease. The taking of possession or use of the Premises by Tenant for any purpose other than
construction shall conclusively establish that the Premises and the Building were in satisfactory
condition and in conformity with the provisions of this Lease in all respects.



     SECTION 2.3. BUILDING NAME, ADDRESS AND DEPICTION. Tenant shall not utilize any name
selected by Landlord from time to time for the Building and/or the Project as any part of Tenant’s
corporate or trade name. Landlord shall have the right to change the name, number or designation
of the Building or Project without liability to Tenant. Tenant shall not use any picture of the
Building in its advertising, stationery or in any other manner, except that Tenant may include a
picture of the Building on its website, in communications with shareholders and regulators, or in
other materials for the express purpose of assisting visitors and licensees of Tenant in locating
the Building.



ARTICLE III. TERM




     SECTION 3.1. GENERAL. The Term shall be for the period shown in Item 5 of the Basic Lease
Provisions. The Term shall commence (“Commencement Date”) on the date set forth in Item 4 of the
Basic Lease Provisions and shall expire on the date set forth in Item 5 of the Basic Lease
Provisions (“Expiration Date”).



     SECTION 3.2. EARLY ENTRY. Following the full execution of this Lease, payment of all
deposits due hereunder and delivery of proper evidence of insurance pursuant to Exhibit D hereof,
Landlord shall permit Tenant and its agents to enter the Premises upon the full and final execution
of this Lease by Landlord and Tenant in order that Tenant may perform any work to be performed by
Tenant hereunder through its own contractors, subject to Landlord’s prior written approval, and
otherwise in accordance with the requirements of Section 7.3 of this Lease. The foregoing license
to enter the Premises prior to the Commencement Date is however, conditioned upon the compliance by
Tenant’s contractors with all requirements imposed by Landlord on third party contractors,
including without limitation the maintenance by Tenant and its contractors and subcontractors of
workers’ compensation and public liability and property damage insurance in amounts and with
companies and on forms satisfactory to Landlord, with certificates of such insurance being
furnished to Landlord prior to proceeding with any such entry. The entry shall be deemed to be
under all of the provisions of the Lease except as to the covenants to pay rent. Landlord shall
not be liable in any way for any injury, loss or damage which may occur to any such work being
performed by Tenant, the same being solely at Tenant’s risk. The failure of Tenant’s contractors
to complete any work in the Premises shall not extend the Commencement Date of the Lease, except if
the Tenant’s contractors do not complete work on time due to the fault of the Landlord to timely
notify Tenant of any approvals or Landlord prevents Tenant from entering the Premises to complete
such work, the Commencement Date of the Lease shall be extended by one day for each day of delay
solely caused by the Landlord. Landlord may withdraw such permission to enter the Premises prior to
the Commencement Date at any time that Landlord reasonably determines that such entry by Tenant is
causing a dangerous situation for Landlord, Tenant or their respective contractors or employees, or
if Landlord reasonably determines that such entry by Tenant is hampering or otherwise preventing
Landlord from proceeding with the completion of Tenant Improvements at the earliest possible date.



SECTION 3.3. RIGHT TO EXTEND THIS LEASE. Provided that Tenant is not in default under any
provision of this Lease at the time of exercise of the extension right granted herein, and provided
further that Tenant is occupying the entire Premises and has not assigned or sublet any of its
interest in this Lease (except in connection with an assignment of this Lease to a Tenant Affiliate
as described in Section 9.1(f) hereof), Tenant may extend the Term of this Lease for one (1) period
of sixty (60) months. Tenant shall exercise its right to extend the Term by and only by delivering
to Landlord, not less than nine (9) months nor more than twelve (12) months prior to the expiration
date of the Term, Tenant’s written notice of its irrevocable commitment to extend (the “Commitment
Notice”). Should Tenant fail timely to deliver the Commitment Notice, then this extension right
shall thereupon lapse and



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be of no further force or effect. The Basic Rent payable under the Lease during the extension of
the Term shall be at the prevailing market rental rate (including periodic adjustments) for
comparable and similarly improved space within the Plaza at La Jolla Village project as of the
commencement of the extension period, as determined by Landlord based on a reasonable extrapolation
of its then-current leasing rates. In no event shall the monthly Basic Rent payable for the
extension period be less than the Basic Rent payable during the month immediately preceding the
commencement of such extension period. Promptly following receipt of the Commitment Notice,
Landlord shall prepare an appropriate amendment to the Lease memorializing the extension of the
Term in accordance with the foregoing, and Tenant shall duly execute and return same to Landlord
within fifteen (15) days. Should Tenant fail timely to execute and deliver the amendment, then
Landlord may, at its sole written election, either specifically enforce the Commitment Notice or
extinguish Tenant’s right to extend the Term. Should Landlord elect the latter, then this Lease
shall terminate upon the scheduled date of expiration and Tenant’s rights under this paragraph
shall be of no further force or effect. Any attempt to assign or transfer any right or interest
created by this paragraph to other than a Tenant Affiliate shall be void from its inception.
Tenant shall have no other right to extend the Term beyond the single sixty (60) month extension
created by this paragraph. Unless agreed to in a writing signed by Landlord and Tenant, any
extension of the Term, whether created by an amendment to this Lease or by a holdover of the
Premises by Tenant, or otherwise, shall be deemed a part of, and not in addition to, any duly
exercised extension period permitted by this paragraph. Time is specifically made of the essence
of this paragraph.



ARTICLE IV. RENT AND OPERATING EXPENSES




     SECTION 4.1. BASIC RENT. From and after the Commencement Date, Tenant shall pay to Landlord
without deduction or offset a Basic Rent for the Premises in the total amount shown (including
subsequent adjustments, if any) in Item 6 of the Basic Lease Provisions. If the Commencement Date
is other than the first day of a calendar month, any rental adjustment shown in Item 6 shall be
deemed to occur on the first day of the next calendar month following the specified monthly
anniversary of the Commencement Date. The rent shall be due and payable in advance commencing on
the Commencement Date and continuing thereafter on the first day of each successive calendar month
of the Term, as prorated for any partial month. No demand, notice or invoice shall be required.
An installment of rent in the amount of one (1) full month’s Basic Rent at the initial rate
specified in Item 6 of the Basic Lease Provisions shall be delivered to Landlord concurrently with
Tenant’s execution of this Lease and shall be applied against the Basic Rent first due hereunder;
the next installment of Basic Rent shall be due on the first day of the second calendar month of
the Term, which installment shall, if applicable, be appropriately prorated to reflect the amount
prepaid for that calendar month.



     SECTION 4.2. OPERATING EXPENSE INCREASE.



          (a) Tenant shall compensate Landlord, as additional rent, for Tenant’s proportionate shares of
“Building Costs” and “Property Taxes,” as those terms are defined below, incurred by Landlord in
the operation of the Building and Project. Property Taxes and Building Costs are mutually
exclusive and may be billed separately or in combination as determined by Landlord. Tenant’s
proportionate share of Property Taxes shall equal the product of the rentable floor area of the
Premises multiplied by the difference of (i) Property Taxes per rentable square foot less (ii) the
Property Tax Base set forth in Item 7 of the Basic Lease Provisions. Tenant’s proportionate share
of Building Costs shall equal the product of the rentable floor area of the Premises multiplied by
the difference of (i) Building Costs per rentable square foot less (ii) the Building Cost Base set
forth in Item 7 of the Basic Lease Provisions. Tenant acknowledges Landlord’s rights to make
changes or additions to the Building and/or Project from time to time pursuant to Section 6.5
below, in which event the total rentable square footage within the Building and/or Project may be
adjusted. For convenience of reference, Property Taxes and Building Costs may sometimes be
collectively referred to as “Operating Expenses.” Notwithstanding the foregoing, Tenant shall not
be obligated to pay Tenant’s proportionate share of Building Costs and Property Tax increases
during the period commencing on March 1, 2008 and ending on February 28, 2009.




          (b) Commencing prior to the start of the first full “Expense Recovery Period” of the Lease (as
defined in Item 7 of the Basic Lease Provisions), and prior to the start of each full or partial
Expense Recovery Period thereafter, Landlord shall give Tenant a written estimate of the amount of
Tenant’s proportionate shares of Building Costs and Property Taxes for the Expense Recovery Period
or portion thereof. Tenant shall pay the estimated amounts to Landlord in equal monthly
installments, in advance, with Basic Rent. If Landlord has not furnished its written estimate for
any Expense Recovery Period by the time set forth above, Tenant shall continue to pay cost
reimbursements at the rates established for the prior Expense Recovery Period, if any; provided
that when the new estimate is delivered to Tenant, Tenant shall, at the next monthly payment date,
pay any accrued cost reimbursements based upon the new estimate. Landlord may from time to time
change the Expense Recovery Period to reflect a calendar year or a new fiscal year of Landlord, as
applicable, in which event Tenant’s share of Operating Expenses shall be equitably prorated for any
partial year.




          (c) Within one hundred twenty (120) days after the end of each Expense Recovery Period,
Landlord shall furnish to Tenant a statement setting forth the actual or prorated Property Taxes
and



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Building Costs attributable to that period, and the parties shall within thirty (30) days
thereafter make any payment or allowance necessary to adjust Tenant’s estimated payments, if any,
to Tenant’s actual proportionate shares as shown by the annual statement. If Tenant has not made
estimated payments during the Expense Recovery Period, any amount owing by Tenant pursuant to
subsection (a) above shall be paid to Landlord in accordance with Article XVI. If actual Property
Taxes or Building Costs allocable to Tenant during any Expense Recovery Period are less than the
Property Tax Base or the Building Cost Base, respectively, Landlord shall not be required to pay
that differential to Tenant, although Landlord shall refund any applicable estimated payments
collected from Tenant. Should Tenant fail to object in writing to Landlord’s determination of
actual Operating Expenses within sixty (60) days following delivery of Landlord’s expense
statement, Landlord’s determination of actual Operating Expenses for the applicable Expense
Recovery Period absent fraud by Landlord shall be conclusive and binding on Tenant.




          (d) Even though the Lease has terminated and the Tenant has vacated the Premises, when the
final determination is made of Tenant’s share of Property Taxes and Building Costs for the Expense
Recovery Period in which the Lease terminates, Tenant shall upon notice pay the entire increase due
over the estimated expenses paid; conversely, any overpayment made in the event expenses decrease
shall be rebated by Landlord to Tenant. However, in lieu thereof, Landlord may deliver a
reasonable estimate of the anticipated reconciliation amount to Tenant prior to the expiration of
the Term, in which event the appropriate party shall fund that amount by the termination date.




          (e) If, at any time during any Expense Recovery Period, any one or more of the Operating
Expenses are increased to a rate(s) or amount(s) in excess of the rate(s) or amount(s) used in
calculating the estimated expenses for the year, then Tenant’s estimated share of Property Taxes or
Building Costs, as applicable, shall be increased for the month in which the increase becomes
effective and for all succeeding months by an amount equal to Tenant’s proportionate share of the
increase. Landlord shall give Tenant written notice of the amount or estimated amount of the
increase, the month in which the increase will become effective, Tenant’s monthly share thereof and
the months for which the payments are due. Tenant shall pay the increase to Landlord as a part of
Tenant’s monthly payments of estimated expenses as provided in paragraph (b) above, commencing with
the month in which effective.




          (f) The term “Building Costs” shall include all charges and expenses pertaining to the
operation, management, maintenance and repair of the Building and the Project, together with all
appurtenant Common Areas (as defined in Section 6.2), and shall include the following charges by
way of illustration but not limitation: water and sewer charges; insurance premiums or reasonable
premium equivalents should Landlord elect to self-insure any risk or deductible that Landlord is
authorized to insure hereunder; license, permit, and inspection fees; heat; light; power;
janitorial services; the cost of equipping, staffing and operating an on-site and/or off-site
management office for the Building and Project; all labor and labor-related costs for personnel
applicable to the Building and Project, including both Landlord’s personnel and outside personnel;
a commercially reasonable Landlord overhead/management fee; reasonable fees for consulting
services; access control/security costs, inclusive of the reasonable cost of improvements made to
enhance access control systems and procedures; repairs; air conditioning; supplies; materials;
equipment; tools; tenant services; programs instituted to comply with transportation management
requirements; any expense incurred pursuant to Sections 6.1, 6.2, 6.4, 7.2, and 10.2 and Exhibits B
and C below; costs incurred (capital or otherwise) on a regular recurring basis every three (3) or
more years for normal maintenance projects (e.g., parking lot slurry coat or replacement of lobby,
corridor and elevator cab carpets and coverings); and the amortized cost of capital improvements
(as distinguished from replacement parts or components installed in the ordinary course of
business) which are intended to maintain the quality, appearance or safety of the Building and/or
Project, reduce other operating costs or increases thereof, or upgrade Building and/or Project
security, or which are required to bring the Building and/or Project into compliance with
applicable laws and building codes. Landlord shall amortize the cost of capital improvements on a
straight-line basis over the lesser of the Payback Period (as defined below) or the useful life of
the capital improvement as reasonably determined by Landlord. Any amortized Building Cost item may
include, at Landlord’s option, an actual or imputed interest rate that Landlord would reasonably be
required to pay to finance the cost of the item, applied on the unamortized balance. “Payback
Period” shall mean the reasonably estimated period of time that it takes for the cost savings, if
any, resulting from a capital improvement item to equal the total cost of the capital improvement.
It is understood that Building Costs shall include competitive charges for direct services provided
by any subsidiary or division of Landlord. If any Building Cost is applicable to one or more
buildings or properties in addition to the Building, then that cost shall be equitably prorated and
apportioned among the Building and such other buildings or properties. The term “Property Taxes”
as used herein shall include the following: (i) all real estate taxes or personal property taxes,
as such property taxes may be reassessed from time to time; and (ii) other taxes, charges and
assessments which are levied with respect to this Lease or to the Building and/or the Project, and
any improvements, fixtures and equipment and other property of Landlord located in the Building
and/or the Project, except that general net income and franchise taxes imposed against Landlord
shall be excluded; and (iii) any tax, surcharge or assessment which shall be levied in addition to
or in lieu of real estate or personal property taxes, other than taxes covered by Article VIII; and
(iv) costs and expenses incurred in contesting the amount or validity of any Property Tax by
appropriate
proceedings. A copy of Landlord’s unaudited statement of expenses shall be made
available to Tenant upon request. The



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Building Costs, inclusive of those for the Base Year, shall be extrapolated by Landlord to reflect
at least ninety-five percent (95%) occupancy of the rentable area of the Building.




     SECTION 4.3. SECURITY DEPOSIT. Concurrently with Tenant’s delivery of this Lease, Tenant
shall deposit with Landlord the sum, if any, stated in Item 9 of the Basic Lease Provisions (the
“Security Deposit”), to be held by Landlord as security for the full and faithful performance of
Tenant’s obligations under this Lease to pay any rental sums, including without limitation such
additional rent as may be owing under any provision hereof, and to maintain the Premises as
required by Sections 7.1 and 15.3 or any other provision of this Lease. For purposes of the
foregoing and notwithstanding any provision of Section 1950.7 of the California Civil Code to the
contrary, rental sums shall include prospective rent that would have been payable by Tenant but for
the early termination of this Lease due to Tenant’s default or insolvency. Upon any breach of the
foregoing obligations by Tenant, Landlord may apply all or part of the Security Deposit as full or
partial compensation. If any portion of the Security Deposit is so applied, Tenant shall within
five (5) days after written demand by Landlord deposit cash with Landlord in an amount sufficient
to restore the Security Deposit to its original amount. Landlord shall not be required to keep
this Security Deposit separate from its general funds, and Tenant shall not be entitled to interest
on the Security Deposit. In no event may Tenant utilize all or any portion of the Security Deposit
as a payment toward any rental sum due under this Lease. Any unapplied balance of the Security
Deposit shall be returned to Tenant or, at Landlord’s option, to the last assignee of Tenant’s
interest in this Lease within thirty (30) days following the termination of this Lease and Tenant’s
vacation of the Premises.



     SECTION 4.4. LETTER OF CREDIT. Landlord agrees that in lieu of a cash Security Deposit,
Tenant may deliver to Landlord, concurrently with Tenant’s execution of this Lease, a letter of
credit in the amount stated in Item 9 of the Basic Lease Provisions, which letter of credit shall
be in form and with the substance of Exhibit E attached hereto. The letter of credit shall be
issued by a financial institution acceptable to Landlord with a branch in San Diego County,
California, at which draws on the letter of credit will be accepted. The letter of credit shall
provide for automatic yearly renewals throughout the Term of this Lease and shall have an outside
expiration date (if any) that is not earlier than thirty (30) days after the expiration of the
Lease Term. In the event the letter of credit is not continuously renewed through the period set
forth above, or upon any breach under this Lease by Tenant, including specifically Tenant’s failure
to pay rent or to abide by its obligations under Sections 7.1 and 15.3 below, Landlord shall be
entitled to draw upon said letter of credit by the issuance of Landlord’s sole written demand to
the issuing financial institution. Any such draw shall be without waiver of any rights Landlord
may have under this Lease or at law or in equity as a result of any default hereunder by Tenant.
After the second anniversary of this Lease, Landlord shall authorize reductions to the Letter of
Credit (and the Security Deposit) in the amount equal to twenty percent (20%) of the value of the
Letter of Credit on the annual anniversary of the Commencement Date; provided that any such
reduction shall be conditioned upon (i) Tenant not having been in default under this Lease at any
time (ii) Tenant submitting to Landlord audited financials evidencing a net worth equal to or
greater than fifteen million dollars ($15,000,000) and (ii) a written request for such reduction
having been submitted to Landlord not earlier than thirty (30) days prior to the applicable
reduction date.



ARTICLE V. USES




     SECTION 5.1. USE. Tenant shall use the Premises only for the purposes stated in Item 3 of
the Basic Lease Provisions. The parties agree that any contrary use shall be deemed to cause
material and irreparable harm to Landlord and shall entitle Landlord to injunctive relief in
addition to any other available remedy. The uses prohibited under this Lease shall include,
without limitation, use of the Premises or a portion thereof for (i) offices of any agency or
bureau of the United States or any state or political subdivision thereof; (ii) offices or agencies
of any foreign governmental or political subdivision thereof; (iii) offices of any health care
professionals or service organization; (iv) schools, temporary employment agencies or other
training facilities which are not ancillary to corporate, executive or professional office use; (v)
retail or restaurant uses; or (vi) communications firms such as radio and/or television stations.
Tenant shall not do or permit anything to be done in or about the Premises which will in any way
interfere with the rights or quiet enjoyment of other occupants of the Building or the Project, or
use or allow the Premises to be used for any unlawful purpose, nor shall Tenant permit any nuisance
or commit any waste in the Premises or the Project. Tenant shall not do or permit to be done
anything which will invalidate or increase the cost of any insurance policy(ies) covering the
Building, the Project and/or their contents, and shall comply with all applicable insurance
underwriters rules. Tenant shall comply at its expense with all present and future laws,
ordinances and requirements of all governmental authorities that pertain to Tenant or its use of
the Premises, including without limitation all federal and state occupational health and safety and
handicap access requirements, whether or not Tenant’s compliance will necessitate expenditures or
interfere with its use and enjoyment of the Premises. Tenant shall not generate, handle, store or
dispose of hazardous or toxic materials (as such materials may be identified in any federal, state
or local law or regulation) in the Premises or Project without the prior written consent of
Landlord; provided that the foregoing shall not be deemed to proscribe the use by Tenant of
customary office supplies in normal quantities so long as such use comports with all applicable
laws. Tenant agrees that it shall promptly complete and deliver to Landlord any disclosure form
regarding hazardous or toxic materials that may be required by any governmental agency. Tenant
shall also, from time to time upon request by Landlord, execute such affidavits concerning Tenant’s
best knowledge and belief regarding the presence of hazardous or toxic



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materials in the Premises. Landlord shall have the right at any time to perform an assessment
of the environmental condition of the Premises and of Tenant’s compliance with this Section. As
part of any such assessment, Landlord shall have the right, upon reasonable prior notice to Tenant,
to enter and inspect the Premises and to perform tests, provided those tests are performed in a
manner that minimizes disruption to Tenant. Tenant will cooperate with Landlord in connection with
any assessment by, among other things, promptly responding to inquiries and providing relevant
documentation and records. The reasonable cost of the assessment/testing shall be reimbursed by
Tenant to Landlord if such assessment/testing determines that Tenant failed to comply with the
requirements of this Section. In all events Tenant shall indemnify each of the “Indemnified
Parties” (as defined in Section 10.3) in the manner elsewhere provided in this Lease from any
release of hazardous or toxic materials caused by Tenant, its agents, employees, contractors,
subtenants or licensees. The foregoing covenants shall survive the expiration or earlier
termination of this Lease.



     SECTION 5.2. SIGNS. Landlord shall affix and maintain a sign (restricted solely to Tenant’s
name as set forth herein or such other name as Landlord may consent to in writing) adjacent to the
entry door of the Premises, together with a directory listing of Tenant’s name as set forth herein
in the lobby directory of the Building. Any subsequent changes to that initial signage shall be at
Tenant’s sole expense. All signage shall conform to the criteria for signs established by Landlord
and shall be ordered through Landlord. Tenant shall not place or allow to be placed any other
sign, decoration or advertising matter of any kind that is visible from the exterior of the
Premises, unless any names or signage is required by federal law or regulation (but shall be
subject to the terms of this Section 5.2). Any violating sign or decoration may be immediately
removed by Landlord at Tenant’s expense without notice and without the removal constituting a
breach of this Lease or entitling Tenant to claim damages.



          SECTION 5.3. EXTERIOR SIGNAGE. Tenant shall have the right to install an exterior building
sign where “Charles Schwab” formerly existed (the “Exterior Signage”), which signage shall consist
only of the name “United Business Bank.” The type and design of such signage shall be subject to
the prior written approval of Landlord and the City of San Diego, and shall be consistent with
Landlord’s signage criteria for the Project. Fabrication, installation, insurance, and maintenance
of such signage shall be at Tenant’s sole cost and expense. Tenant understands and agrees that it
shall use Landlord’s designated contractor for installing the Exterior Signage. Should Tenant fail
to have the Exterior Signage installed on or prior to June 30, 2008, then Tenant’s right to install
same thereafter shall be deemed null and void. Except for the foregoing, no sign, advertisement or
notice visible from the exterior of the Premises shall be inscribed, painted or affixed by Tenant
on any part of the Premises without the prior consent of Landlord. Tenant’s signage right shall
belong solely to United Business Holdings, Inc. and may not be transferred or assigned (except in
connection with an assignment of this Lease to a Tenant Affiliate as described in Section 9.1(f)
hereof) without Landlord’s prior written consent which may be withheld by Landlord in Landlord’s
sole discretion. In the event Tenant, exclusive of any subtenant(s), fails to keep the Premises
open for business to the public during normal business hours on business days (excluding holidays),
then Tenant shall, within thirty (30) days following notice from Landlord, remove the Exterior
Signage at Tenant’s expense. Tenant shall also remove such signage promptly following the
expiration or earlier termination of the Lease. Any such removal shall be at Tenant’s sole
expense, and Tenant shall bear the cost of any resulting repairs to the Building that are
reasonably necessary due to the removal.




     SECTION 5.4. AUTOMATED TELLER MACHINE. Tenant shall have the right to install one (1) ATM
and night depository in the Premises (collectively referred to herein as (“ATM”). The location,
plans and specifications for the ATM (including the identifying signage) shall be subject to the
prior written approval of Landlord and are affixed hereto as Exhibit G. Tenant shall be solely
responsible for the cost of installation of the ATM, together with all maintenance and repairs of
the ATM and related equipment, cables and conduits. Tenant shall also be responsible for all
security pertaining to the ATM, and shall operate same in accordance with all applicable laws and
regulations. Tenant shall ensure that the ATM remains properly lighted during evening hours
utilizing lighting fixtures approved by Landlord. Tenant shall indemnify, defend and hold Landlord
harmless from any liability, loss or expense resulting from the operation of the ATM in accordance
with the provisions of Section 10.3 of the Lease. Any alterations to the ATM shall be subject to
Landlord’s prior written approval and the provisions of Section 7.3 of this Lease. Promptly
following the termination of this Lease, Tenant shall remove the ATM and restore the affected area
of the Building to its pre-existing condition, wear and tear excepted.



ARTICLE VI. LANDLORD SERVICES




     SECTION 6.1. UTILITIES AND SERVICES. Landlord shall furnish to the Premises the utilities
and services described in Exhibit B, subject to the conditions and payment obligations and
standards set forth in this Lease. Landlord shall not be liable for any failure to furnish any
services or utilities when the failure is the result of any accident or other cause beyond
Landlord’s reasonable control, nor shall Landlord be liable for damages resulting from power surges
or any breakdown in telecommunications facilities or services. Landlord’s temporary inability to
furnish any services or utilities shall not entitle Tenant to any damages, relieve Tenant of the
obligation to pay rent or constitute a constructive or other eviction of Tenant, except that
Landlord shall diligently attempt to restore the service or utility promptly. Tenant shall comply
with all rules and regulations which



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Landlord may reasonably establish for the provision of services and utilities, and shall
cooperate with all reasonable conservation practices established by Landlord. Landlord shall at
all reasonable times have free access to all electrical and mechanical installations of Landlord.



     SECTION 6.2. OPERATION AND MAINTENANCE OF COMMON AREAS. During the Term, Landlord shall
operate all Common Areas within the Building and the Project. The term “Common Areas” shall mean
all areas within the Building and other buildings in the Project which are not held for exclusive
use by persons entitled to occupy space, and all other appurtenant areas and improvements provided
by Landlord for the common use of Landlord and tenants and their respective employees and invitees,
including without limitation parking areas and structures, driveways, sidewalks, loading docks,
landscaped and planted areas, hallways and interior stairwells not located within the premises of
any tenant, common entrances and lobbies, elevators, and restrooms not located within the premises
of any tenant.



     SECTION 6.3. USE OF COMMON AREAS. The occupancy by Tenant of the Premises shall include the
use of the Common Areas in common with Landlord and with all others for whose convenience and use
the Common Areas may be provided by Landlord, subject, however, to compliance with all rules and
regulations as are prescribed from time to time by Landlord. Landlord shall at all times during
the Term have exclusive control of the Common Areas, and may restrain or permit any use or
occupancy, except as otherwise provided in this Lease or in Landlord’s rules and regulations.
Tenant shall keep the Common Areas clear of any obstruction or unauthorized use related to Tenant’s
operations. Landlord may temporarily close any portion of the Common Areas for repairs, remodeling
and/or alterations, to prevent a public dedication or the accrual of prescriptive rights, or for
any other reasonable purpose.



     SECTION 6.4. PARKING. Parking shall be provided in accordance with the provisions set forth
in Exhibit C to this Lease.



     SECTION 6.5. CHANGES AND ADDITIONS BY LANDLORD. Landlord reserves the right to make
alterations or additions to the Building or the Project, or to the attendant fixtures, equipment
and Common Areas. No change shall entitle Tenant to any abatement of rent or other claim against
Landlord, provided that the change does not deprive Tenant of reasonable access to or use of the
Premises.



ARTICLE VII. MAINTAINING THE PREMISES




     SECTION 7.1. TENANT’S MAINTENANCE AND REPAIR. Subject to Article XI, Tenant at its sole
expense shall make all repairs necessary to keep the Premises and all improvements and fixtures
therein in the condition as existed on the Commencement Date (or on any later date that the
applicable improvements may have been installed), excepting ordinary wear and tear.
Notwithstanding Section 7.2 below, Tenant’s maintenance obligation shall include without limitation
all appliances, non-building standard lighting/electrical systems, and plumbing fixtures and
installations located within the Premises, together with any supplemental HVAC equipment servicing
only the Premises. All repairs shall be at least equal in quality to the original work, shall be
made only by a licensed, bonded contractor approved in writing in advance by Landlord and shall be
made only at the time or times approved by Landlord. Any contractor utilized by Tenant shall be
subject to Landlord’s standard requirements for contractors, as modified from time to time.
Landlord may impose reasonable restrictions and requirements with respect to repairs, as provided
in Section 7.3, and the provisions of Section 7.4 shall apply to all repairs. Alternatively,
should Landlord or its management agent agree to make a repair on behalf of Tenant and at Tenant’s
request, Tenant shall promptly reimburse Landlord as additional rent for all costs incurred
(including the standard coordination fee of Landlord’s management agent) upon submission of an
invoice.



     SECTION 7.2. LANDLORD’S MAINTENANCE AND REPAIR. Subject to Article XI, Landlord shall
provide service, maintenance and repair with respect to the heating, ventilating and air
conditioning (“HVAC”) equipment of the Building (exclusive of any supplemental HVAC equipment
servicing only the Premises) and shall maintain in good repair the Common Areas, roof, foundations,
footings, the exterior surfaces of the exterior walls of the Building, and the structural,
electrical, mechanical and plumbing systems of the Building except as provided in Section 7.1
above. Landlord shall have the right to employ or designate any reputable person or firm,
including any employee or agent of Landlord or any of Landlord’s affiliates or divisions, to
perform any service, repair or maintenance function. Landlord need not make any other improvements
or repairs except as specifically required under this Lease, and nothing contained in this Section
shall limit Landlord’s right to reimbursement from Tenant for maintenance, repair costs and
replacement costs as provided elsewhere in this Lease. Tenant understands that it shall not make
repairs at Landlord’s expense or by rental offset. Except as provided in Sections 11.1 and 12.1
below, there shall be no abatement of rent and no liability of Landlord by reason of any injury to
or interference with Tenant’s business arising from the making of any repairs, alterations or
improvements to any portion of the Building, including repairs to the Premises, nor shall any
related activity by Landlord constitute an actual or constructive eviction; provided, however, that
in making repairs, alterations or improvements, Landlord shall interfere as little as reasonably
practicable with the conduct of Tenant’s business in the Premises.



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     SECTION 7.3. ALTERATIONS. Tenant shall make no alterations, additions or improvements to
the Premises without the prior written consent of Landlord. Landlord’s consent shall not be
unreasonably withheld as long as the proposed changes do not affect the structural, electrical or
mechanical components or systems of the Building, are not visible from the exterior of the
Premises, and utilize only building standard materials. Landlord may impose, as a condition to its
consent, any requirements that Landlord in its discretion may deem reasonable or desirable,
including but not limited to a requirement that all work be covered by a lien and completion bond
satisfactory to Landlord and requirements as to the manner, time, and contractor for performance of
the work. Without limiting the generality of the foregoing, Tenant shall use Landlord’s designated
mechanical and electrical contractors for all work affecting the mechanical or electrical systems
of the Building. Should Tenant perform any work that would necessitate any ancillary Building
modification or other expenditure by Landlord, then Tenant shall promptly fund the cost thereof to
Landlord. Tenant shall obtain all required permits for the work and shall perform the work in
compliance with all applicable laws, regulations and ordinances, and Landlord shall be entitled to
a supervision fee in the amount of five percent (5%) of the cost of the work. Under no
circumstances shall Tenant make any improvement which incorporates asbestos-containing construction
materials into the Premises. In no event shall Tenant prosecute any alteration work that results
in picketing or labor demonstrations in or about the Building or Project. Any request for
Landlord’s consent shall be made in writing and shall contain architectural plans describing the
work in detail reasonably satisfactory to Landlord. Landlord may elect to cause its architect to
review Tenant’s architectural plans, and the reasonable cost of that review shall be reimbursed by
Tenant. Should the work proposed by Tenant modify the internal configuration of the Premises, then
Tenant shall, at its expense, furnish Landlord with as-built drawings and CAD disks compatible with
Landlord’s systems. Unless Landlord otherwise agrees in writing, all alterations, additions or
improvements affixed to the Premises (excluding moveable trade fixtures and furniture) shall become
the property of Landlord and shall be surrendered with the Premises at the end of the Term, except
that Landlord may, by notice to Tenant given at the time of Landlord’s consent to the alteration or
improvement, require Tenant to remove by the Expiration Date, or sooner termination date of this
Lease, all or any alterations, decorations, fixtures, additions, improvements and the like
installed either by Tenant or by Landlord at Tenant’s request. Tenant shall repair any damage to
the Premises arising from that removal and restore the affected area to its pre-existing condition,
reasonable wear and tear excepted. Landlord may require Tenant to remove an improvement provided
as part of the initial build-out pursuant to Exhibit X, if any, if and only if the improvement is a
non-building standard item and Tenant is notified of the requirement prior to the build-out.
Except as otherwise provided in this Lease or in any Exhibit to this Lease, should Landlord make
any alteration or improvement to the Premises at the request of Tenant, Landlord shall be entitled
to prompt payment from Tenant of the cost thereof, inclusive of the standard coordination fee of
Landlord’s management agent.



     SECTION 7.4. MECHANIC’S LIENS. Tenant shall keep the Premises free from any liens arising
out of any work performed, materials furnished, or obligations incurred by or for Tenant. Upon
request by Landlord, Tenant shall promptly cause any such lien to be released by posting a bond in
accordance with California Civil Code Section 3143 or any successor statute. In the event that
Tenant shall not, within thirty (30) days following the imposition of any lien, cause the lien to
be released of record by payment or posting of a proper bond, Landlord shall have, in addition to
all other available remedies, the right to cause the lien to be released by any means it deems
proper, including payment of or defense against the claim giving rise to the lien. All expenses so
incurred by Landlord, including Landlord’s attorneys’ fees, shall be reimbursed by Tenant promptly
following Landlord’s demand, together with interest from the date of payment by Landlord at the
maximum rate permitted by law until paid. Tenant shall give Landlord no less than twenty (20)
days’ prior notice in writing before commencing construction of any kind on the Premises so that
Landlord may post and maintain notices of nonresponsibility on the Premises.



     SECTION 7.5. ENTRY AND INSPECTION. Landlord shall at all reasonable times (with 24 hours
prior notice, except in an emergency) have the right to enter the Premises to inspect them, to
supply services in accordance with this Lease, to protect the interests of Landlord in the
Premises, to make repairs and renovations as reasonably deemed necessary by Landlord, and to submit
the Premises to prospective or actual purchasers or encumbrance holders (or, during the final
twelve months of the Term or when an uncured Tenant default exists, to prospective tenants), all
without being deemed to have caused an eviction of Tenant and without abatement of rent except as
provided elsewhere in this Lease. Tenant shall be entitled to have an employee of Tenant accompany
the person(s) entering the Premises, provided Tenant makes such employee available at the time
Landlord or such other party desires to enter the Premises. Landlord shall at all times have and
retain a key which unlocks all of the doors in the Premises, excluding Tenant’s vaults and safes,
and Landlord shall have the right to use any and all means which Landlord may deem proper to open
the doors in an emergency in order to obtain entry to the Premises, and any entry to the Premises
obtained by Landlord shall not under any circumstances be deemed to be a forcible or unlawful entry
into, or a detainer of, the Premises, or any eviction of Tenant from the Premises.



     SECTION 7.6. SPACE PLANNING AND SUBSTITUTION. Landlord shall have the right, upon providing
not less than forty-five (45) days written notice, to move Tenant to other space of comparable size
and function in the Building or in the Project. The new space shall be provided with improvements
of comparable quality to those within the Premises. Landlord shall pay the reasonable
out-of-pocket costs to relocate and reconnect Tenant’s personal property and equipment within the
new space;



9









 




provided that Landlord may elect to cause such work to be done by its contractors. Landlord
shall also reimburse Tenant for such other reasonable out-of-pocket costs that Tenant may incur in
connection with the relocation, including without limitation necessary stationery revisions,
provided that a reasonable estimate thereof is given to Landlord within twenty (20) days following
Landlord’s notice. In no event, however, shall Landlord be obligated to incur or fund total
relocation costs, exclusive of tenant improvement expenditures, in an amount in excess of two (2)
months of Basic Rent at the rate then payable hereunder. Within ten (10) days following request by
Landlord, Tenant shall execute an amendment to this Lease prepared by Landlord to memorialize the
relocation. Should Tenant fail timely to execute and deliver the amendment to Landlord, or should
Tenant thereafter fail to comply with the terms thereof, then Landlord may at its option elect to
terminate this Lease upon not less than sixty (60) days prior written notice to Tenant. Upon the
effective date of any termination of this Lease, Tenant shall vacate the Premises in accordance
with Section 15.3.




ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT’S PROPERTY




     Tenant shall be liable for and shall pay before delinquency, all taxes and assessments levied
against all personal property of Tenant located in the Premises. When possible Tenant shall cause
its personal property to be assessed and billed separately from the real property of which the
Premises form a part. If any taxes on Tenant’s personal property are levied against Landlord or
Landlord’s property and if Landlord pays the same, or if the assessed value of Landlord’s property
is increased by the inclusion of a value placed upon the personal property of Tenant and if
Landlord pays the taxes based upon the increased assessment, Tenant shall pay to Landlord the taxes
so levied against Landlord or the proportion of the taxes resulting from the increase in the
assessment.



ARTICLE IX. ASSIGNMENT AND SUBLETTING




     SECTION 9.1. RIGHTS OF PARTIES.



          (a) Except as otherwise specifically provided herein, Tenant may not, either voluntarily or by
operation of law, assign, sublet, encumber, or otherwise transfer all or any part of Tenant’s
interest in this Lease, or permit the Premises to be occupied by anyone other than Tenant, without
Landlord’s prior written consent, which consent shall not unreasonably be withheld in accordance
with the provisions of Section 9.1(c). For purposes of this Lease, references to any subletting,
sublease or variation thereof shall be deemed to apply not only to a sublease effected directly by
Tenant, but also to a sub-subletting or an assignment of subtenancy by a subtenant at any level.
No assignment (whether voluntary, involuntary or by operation of law) and no subletting shall be
valid or effective without Landlord’s prior written consent and, at Landlord’s election, shall
constitute a material default of this Lease. Landlord shall not be deemed to have given its
consent to any assignment or subletting by any other course of action, including its acceptance of
any name for listing in the Building directory. To the extent not prohibited by provisions of the
Bankruptcy Code, 11 U.S.C. Section 101 et seq. (the “Bankruptcy Code”), including Section
365(f)(1), Tenant on behalf of itself and its creditors, administrators and assigns waives the
applicability of Section 365(e) of the Bankruptcy Code unless the proposed assignee of the Trustee
for the estate of the bankrupt meets Landlord’s standard for consent as set forth in Section 9.1(c)
of this Lease. If this Lease is assigned to any person or entity pursuant to the provisions of the
Bankruptcy Code, any and all monies or other considerations to be delivered in connection with the
assignment shall be delivered to Landlord, shall be and remain the exclusive property of Landlord
and shall not constitute property of Tenant or of the estate of Tenant within the meaning of the
Bankruptcy Code. Any person or entity to which this Lease is assigned pursuant to the provisions
of the Bankruptcy Code shall be deemed to have assumed all of the obligations arising under this
Lease on and after the date of the assignment, and shall upon demand execute and deliver to
Landlord an instrument confirming that assumption.




          (b) The sale of all or substantially all of the assets of Tenant (other than bulk sales in the
ordinary course of business) shall be deemed an assignment within the meaning and provisions of
this Article.




          (c) Except as otherwise specifically provided herein, if Tenant or any subtenant hereunder
desires to transfer an interest in this Lease, Tenant shall first notify Landlord and request in
writing Landlord’s consent to the transfer. Tenant shall also submit in writing to Landlord: (i)
the name and address of the proposed transferee; (ii) the nature of any proposed subtenant’s or
assignee’s business to be carried on in the Premises; (iii) the terms and provisions of any
proposed sublease or assignment (including without limitation the rent and other economic
provisions, term, improvement obligations and commencement date); (iv) evidence that the proposed
assignee or subtenant will comply with the requirements of Exhibit D to this Lease; and (v) any
other information requested by Landlord and reasonably related to the transfer. Except as provided
in Subsection (d) of this Section, Landlord shall not unreasonably withhold its consent, provided:
(1) the use of the Premises will be consistent with the provisions of this Lease and with
Landlord’s commitment to other tenants of the Building and Project; (2) any proposed subtenant or
assignee demonstrates that it is financially responsible by submission to Landlord of all
reasonable information as Landlord may request concerning the proposed subtenant



10









 






or assignee, including, but not limited to, a balance sheet of the proposed subtenant or
assignee as of a date within ninety (90) days of the request for Landlord’s consent and statements
of income or profit and loss of the proposed subtenant or assignee for the two-year period
preceding the request for Landlord’s consent; (3) the proposed subtenant or assignee is, in
Landlord’s good faith determination, appropriate for tenancy in a first class office project; (4)
the proposed assignee or subtenant is neither an existing tenant or occupant of the Building or
Project nor a prospective tenant with whom Landlord has been actively negotiating; and (5) the
proposed transferee is not an SDN (as defined below) and will not impose additional burdens or
security risks on Landlord. If Landlord consents to the proposed transfer, then the transfer may
be effected within ninety (90) days after the date of the consent upon the terms described in the
information furnished to Landlord; provided that any material change in the terms shall be subject
to Landlord’s consent as set forth in this Section. Landlord shall approve or disapprove any
requested transfer within thirty (30) days following receipt of Tenant’s written notice and the
information set forth above. Tenant shall pay to Landlord a transfer fee of Five Hundred Dollars
($500.00) if and when any transfer request submitted by Tenant is approved.




          (d) Notwithstanding the provisions of Subsection (c) above, in lieu of consenting to a
proposed assignment or subletting, Landlord may elect to (i) sublease the Premises (or the portion
proposed to be subleased), or take an assignment of Tenant’s interest in this Lease, upon the same
terms as offered to the proposed subtenant or assignee (excluding terms relating to the purchase of
personal property, the use of Tenant’s name or the continuation of Tenant’s business), or (ii)
terminate this Lease as to the portion of the Premises proposed to be subleased or assigned with a
proportionate abatement in the rent payable under this Lease, effective on the date that the
proposed sublease or assignment would have commenced. Landlord may thereafter, at its option,
assign or re-let any space so recaptured to any third party, including without limitation the
proposed transferee identified by Tenant.




          (e) Should any assignment or subletting occur, Tenant shall promptly pay or cause to be paid
to Landlord, as additional rent, seventy-five percent (75%) of any amounts paid by the assignee or
subtenant, however described and whether funded during or after the Lease Term, to the extent such
amounts are in excess of the sum of (i) the scheduled rental sums payable by Tenant hereunder (or,
in the event of a subletting of only a portion of the Premises, the rent allocable to such portion
as reasonably determined by Landlord) and (ii) the direct out-of-pocket costs, as evidenced by
third party invoices provided to Landlord, incurred by Tenant to effect the transfer, which costs
shall be amortized over the remaining Term of this Lease or, if shorter, over the term of the
sublease. Upon request by Landlord, Tenant and all other parties to the transfer shall memorialize
in writing the amounts to be paid pursuant to this paragraph.




          (f) Notwithstanding the foregoing, provided Tenant is not then in default hereunder, Tenant
may, without Landlord’s prior consent but with prior written notice to Landlord and subject to the
provisions of Section 9.2, assign or transfer its right, title and interest in this Lease or
sublease the Premises to any of the following: (i) any entity resulting from a merger or
consolidation with Tenant; (ii) any entity succeeding to the business and assets of Tenant; or
(iii) any entity controlling, controlled by, or under common control with, Tenant (collectively,
“Tenant Affiliate”). Promptly following the effectiveness of any such transfer, Tenant shall
provide to Landlord copies of all pertinent transfer documents and such other information
pertaining thereto as Landlord may reasonably request.




     SECTION 9.2. EFFECT OF TRANSFER. No subletting or assignment, even with the consent of
Landlord, shall relieve Tenant, or any successor-in-interest to Tenant hereunder, of its obligation
to pay rent and to perform all its other obligations under this Lease. Moreover, Tenant shall
indemnify and hold Landlord harmless, as provided in Section 10.3, for any act or omission by an
assignee or subtenant. Each assignee, other than Landlord, shall be deemed to assume all
obligations of Tenant under this Lease and shall be liable jointly and severally with Tenant for
the payment of all rent, and for the due performance of all of Tenant’s obligations, under this
Lease. Such joint and several liability shall not be discharged or impaired by any subsequent
modification or extension of this Lease. No transfer shall be binding on Landlord unless any
document memorializing the transfer is delivered to Landlord, both the assignee/subtenant and
Tenant deliver to Landlord an executed consent to transfer instrument prepared by Landlord and
consistent with the requirements of this Article, and the assignee/subtenant independently complies
with all of the insurance requirements of Tenant as set forth in Exhibit D and evidence thereof is
delivered to Landlord. The acceptance by Landlord of any payment due under this Lease from any
other person shall not be deemed to be a waiver by Landlord of any provision of this Lease or to be
a consent to any transfer. Consent by Landlord to one or more transfers shall not operate as a
waiver or estoppel to the future enforcement by Landlord of its rights under this Lease. In
addition to the foregoing, no change in the status of Tenant or any party jointly and severally
liable with Tenant as aforesaid (e.g., by conversion to a limited liability company or partnership)
shall serve to abrogate the liability of any person or entity for the obligations of Tenant,
including any obligations that may be incurred by Tenant after the status change by exercise of a
pre-existing right in this Lease.



     SECTION 9.3. SUBLEASE REQUIREMENTS. The following terms and conditions shall apply to any
subletting by Tenant of all or any part of the Premises and shall be included in each sublease:



          (a) Tenant hereby irrevocably assigns to Landlord all of Tenant’s interest in all rentals and
income arising from any sublease of the Premises, and Landlord may collect such rent and income



11









 






and apply same toward Tenant’s obligations under this Lease; provided, however, that until a
default occurs in the performance of Tenant’s obligations under this Lease, Tenant shall have the
right to receive and collect the sublease rentals. Landlord shall not, by reason of this
assignment or the collection of sublease rentals, be deemed liable to the subtenant for the
performance of any of Tenant’s obligations under the sublease. Tenant hereby irrevocably
authorizes and directs any subtenant, upon receipt of a written notice from Landlord stating that
an uncured default exists in the performance of Tenant’s obligations under this Lease, to pay to
Landlord all sums then and thereafter due under the sublease. Tenant agrees that the subtenant may
rely on that notice without any duty of further inquiry and notwithstanding any notice or claim by
Tenant to the contrary. Tenant shall have no right or claim against the subtenant or Landlord for
any rentals so paid to Landlord. In the event Landlord collects amounts from subtenants that
exceed the total amount then due from Tenant hereunder, Landlord shall promptly remit the excess to
Tenant.




          (b) In the event of the termination of this Lease, Landlord may, at its sole option, take over
Tenant’s entire interest in any sublease and, upon notice from Landlord, the subtenant shall attorn
to Landlord. In no event, however, shall Landlord be liable for any previous act or omission by
Tenant under the sublease or for the return of any advance rental payments or deposits under the
sublease that have not been actually delivered to Landlord, nor shall Landlord be bound by any
sublease modification executed without Landlord’s consent or for any advance rental payment by the
subtenant in excess of one month’s rent. The general provisions of this Lease, including without
limitation those pertaining to insurance and indemnification, shall be deemed incorporated by
reference into the sublease despite the termination of this Lease.




          (c) Tenant agrees that Landlord may, at its sole option, authorize a subtenant of the Premises
to cure a default by Tenant under this Lease. Should Landlord accept such cure, the subtenant
shall have a right of reimbursement and offset from and against Tenant under the applicable
sublease.




ARTICLE X. INSURANCE AND INDEMNITY




     SECTION 10.1. TENANT’S INSURANCE. Tenant, at its sole cost and expense, shall provide and
maintain in effect the insurance described in Exhibit D. Evidence of that insurance must be
delivered to Landlord prior to the Commencement Date.



     SECTION 10.2. LANDLORD’S INSURANCE. Landlord may, at its election, provide any or all of
the following types of insurance, with or without deductible and in amounts and coverages as may be
determined by Landlord in its discretion: property insurance, subject to standard exclusions,
covering the Building or Project, and such other risks as Landlord or its mortgagees may from time
to time deem appropriate, and commercial general liability coverage. Landlord shall not be
required to carry insurance of any kind on any tenant improvements or alterations in the Premises
installed by Tenant or its contractors or otherwise removable by Tenant (collectively, “Tenant
Installations”), as well as any trade fixtures, furnishings, equipment, interior plate glass, signs
and all items of personal property in the Premises, and Landlord shall not be obligated to repair
or replace any of the foregoing items should damage occur. All proceeds of insurance maintained by
Landlord upon the Building and Project shall be the property of Landlord, whether or not Landlord
is obligated to or elects to make any repairs.



     SECTION 10.3. TENANT’S INDEMNITY. To the fullest extent permitted by law, but subject to
Section 10.5 below, Tenant shall defend, indemnify and hold harmless Landlord, its agents, lenders,
and any and all affiliates of Landlord (collectively, the “Indemnified Parties”), from and against
any and all claims, liabilities, costs or expenses arising either before or after the Commencement
Date from Tenant’s use or occupancy of the Premises, the Building or the Common Areas, or from the
conduct of its business, or from any activity, work, or thing done, permitted or suffered by Tenant
or its agents, employees, subtenants, vendors, contractors, invitees or licensees in or about the
Premises, the Building or the Common Areas, or from any default in the performance of any
obligation on Tenant’s part to be performed under this Lease, or from any act or negligence of
Tenant or its agents, employees, subtenants, vendors, contractors, invitees or licensees. Landlord
may, at its option, require Tenant to assume Landlord’s defense in any action covered by this
Section through counsel reasonably satisfactory to Landlord.



     SECTION 10.4. LANDLORD’S NONLIABILITY. Landlord shall not be liable to Tenant, its
employees, agents and invitees, and Tenant hereby waives all claims against Landlord, its employees
and agents for loss of or damage to any property, or any injury to any person, or loss or
interruption of business or income, resulting from any condition including, but not limited to,
fire, explosion, falling plaster, steam, gas, electricity, 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 the pipes, sprinklers, wires, appliances, plumbing, air conditioning, electrical works or other
fixtures in the Building, whether the damage or injury results from conditions arising in the
Premises or in other portions of the Building. It is understood that any such condition may
require the temporary evacuation or closure of all or a portion of the Building. Should Tenant
elect to receive any service from a concessionaire, licensee or third party tenant of Landlord,
Tenant shall not seek recourse against Landlord for any breach or



12









 







liability of that service provider. Neither Landlord nor its agents shall be liable for
interference with light or other similar intangible interests. Tenant shall immediately notify
Landlord in case of fire or accident in the Premises, the Building or the Project and of defects in
any improvements or equipment.



     SECTION 10.5. WAIVER OF SUBROGATION. Landlord and Tenant each hereby waives all rights of
recovery against the other on account of loss and damage occasioned to the property of such waiving
party to the extent that the waiving party is entitled to proceeds for such loss and damage under
any property insurance policies carried or otherwise required to be carried by this Lease. By this
waiver it is the intent of the parties that neither Landlord nor Tenant shall be liable to any
insurance company (by way of subrogation or otherwise) insuring the other party for any loss or
damage insured against under any property insurance policies, even though such loss or damage might
be occasioned by the negligence of such party, its agents, employees, contractors or invitees. The
foregoing waiver by Tenant shall also inure to the benefit of Landlord’s management agent for the
Building.



ARTICLE XI. DAMAGE OR DESTRUCTION




     SECTION 11.1. RESTORATION.



          (a) If the Building of which the Premises are a part is damaged as the result of an event of
casualty, then subject to the provisions below, Landlord shall repair that damage as soon as
reasonably possible unless: (i) Landlord reasonably determines that the cost of repair would
exceed ten percent (10%) of the full replacement cost of the Building (“Replacement Cost”) and the
damage is not covered by Landlord’s fire and extended coverage insurance (or by a normal extended
coverage policy should Landlord fail to carry that insurance); or (ii) Landlord reasonably
determines that the cost of repair would exceed twenty-five percent (25%) of the Replacement Cost;
or (iii) Landlord reasonably determines that the cost of repair would exceed ten percent (10%) of
the Replacement Cost and the damage occurs during the final twelve (12) months of the Term. Should
Landlord elect not to repair the damage for one of the preceding reasons, Landlord shall so notify
Tenant in the “Casualty Notice” (as defined below), and this Lease shall terminate as of the date
of delivery of that notice.




          (b) As soon as reasonably practicable following the casualty event but not later than sixty
(60) days thereafter, Landlord shall notify Tenant in writing (“Casualty Notice”) of Landlord’s
election, if applicable, to terminate this Lease. If this Lease is not so terminated, the Casualty
Notice shall set forth the anticipated period for repairing the casualty damage. If the
anticipated repair period exceeds two hundred seventy (270) days and if the damage is so extensive
as to reasonably prevent Tenant’s substantial use and enjoyment of the Premises, then Tenant may
elect to terminate this Lease by written notice to Landlord within ten (10) days following delivery
of the Casualty Notice.




          (c) To the extent and for the period that Landlord is entitled to reimbursement from the
proceeds of rental interruption insurance carried by Landlord as part of Operating Expenses, the
rental to be paid under this Lease shall be abated in the same proportion that the floor area of
the Premises that is rendered unusable by the damage from time to time bears to the total floor
area of the Premises.




          (d) Notwithstanding the provisions of subsections (a), (b) and (c) of this Section, but
subject to Section 10.5, the cost of any repairs shall be borne by Tenant, and Tenant shall not be
entitled to rental abatement or termination rights, if the damage is due to the fault or neglect of
Tenant or its employees, subtenants, contractors, invitees or representatives. In addition, the
provisions of this Section shall not be deemed to require Landlord to repair any Tenant
Installations, fixtures and other items that Tenant is obligated to insure pursuant to Exhibit D or
any other provision of this Lease.




     SECTION 11.2. LEASE GOVERNS. Tenant agrees that the provisions of this Lease, including
without limitation Section 11.1, shall govern any damage or destruction and shall accordingly
supersede any contrary statute or rule of law.



ARTICLE XII. EMINENT DOMAIN




     SECTION 12.1. TOTAL OR PARTIAL TAKING. If all or a material portion of the Premises is
taken by any lawful authority by exercise of the right of eminent domain, or sold to prevent a
taking, either Tenant or Landlord may terminate this Lease effective as of the date possession is
required to be surrendered to the authority. In the event title to a portion of the Building or
Project, other than the Premises, is taken or sold in lieu of taking, and if Landlord elects to
restore the Building in such a way as to alter the Premises materially, either party may terminate
this Lease, by written notice to the other party, effective on the date of vesting of title. In
the event neither party has elected to terminate this Lease as provided above, then Landlord shall
promptly, after receipt of a sufficient condemnation award, proceed to restore the Premises to
substantially their condition prior to the taking, and a proportionate allowance shall be made to
Tenant for the rent corresponding to the time during which, and to the part of the Premises of
which, Tenant is deprived on account of the taking and restoration. In the event of a taking,
Landlord shall be entitled to the entire amount of the condemnation award



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without deduction for any estate or interest of Tenant; provided that nothing in this Section
shall be deemed to give Landlord any interest in, or prevent Tenant from seeking any award against
the taking authority for, the taking of personal property and fixtures belonging to Tenant or for
relocation or business interruption expenses recoverable from the taking authority.



     SECTION 12.2. TEMPORARY TAKING. No temporary taking of the Premises shall terminate this
Lease or give Tenant any right to abatement of rent, and any award specifically attributable to a
temporary taking of the Premises shall belong entirely to Tenant. A temporary taking shall be
deemed to be a taking of the use or occupancy of the Premises for a period of not to exceed ninety
(90) days.



     SECTION 12.3. TAKING OF PARKING AREA. In the event there shall be a taking of the parking
area such that Landlord can no longer provide sufficient parking to comply with this Lease,
Landlord may substitute reasonably equivalent parking in a location reasonably close to the
Building; provided that if Landlord fails to make that substitution within ninety (90) days
following the taking and if the taking materially impairs Tenant’s use and enjoyment of the
Premises, Tenant may, at its option, terminate this Lease by written notice to Landlord. If this
Lease is not so terminated by Tenant, there shall be no abatement of rent and this Lease shall
continue in effect.



ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE




     SECTION 13.1. SUBORDINATION. At the option of Landlord or any of its mortgagees/deed of
trust beneficiaries, this Lease shall be either superior or subordinate to all ground or underlying
leases, mortgages and deeds of trust, if any, which may hereafter affect the Building, and to all
renewals, modifications, consolidations, replacements and extensions thereof; provided, that so
long as Tenant is not in default under this Lease, this Lease shall not be terminated or Tenant’s
quiet enjoyment of the Premises disturbed in the event of termination of any such ground or
underlying lease, or the foreclosure of any such mortgage or deed of trust, to which this Lease has
been subordinated pursuant to this Section. In the event of a termination or foreclosure, Tenant
shall become a tenant of and attorn to the successor-in-interest to Landlord upon the same terms
and conditions as are contained in this Lease, and shall promptly execute any instrument reasonably
required by Landlord’s successor for that purpose. Tenant shall also, within ten (10) days
following written request of Landlord (or the beneficiary under any deed of trust encumbering the
Building), execute and deliver all instruments as may be required from time to time by Landlord or
such beneficiary (including without limitation any subordination, nondisturbance and attornment
agreement in the form customarily required by such beneficiary) to subordinate this Lease and the
rights of Tenant under this Lease to any ground or underlying lease or to the lien of any mortgage
or deed of trust; provided, however, that any such beneficiary may, by written notice to Tenant
given at any time, subordinate the lien of its deed of trust to this Lease. Tenant shall agree
that any purchaser at a foreclosure sale or lender taking title under a deed in lieu of foreclosure
shall not be responsible for any act or omission of a prior landlord, shall not be subject to any
offsets or defenses Tenant may have against a prior landlord, and shall not be liable for the
return of any security deposit not actually recovered by such purchaser or bound by any rent paid
in advance of the calendar month in which the transfer of title occurred; provided that the
foregoing shall not release the applicable prior landlord from any liability for those obligations.
Tenant acknowledges that Landlord’s mortgagees and successors-in-interest and all beneficiaries
under deeds of trust encumbering the Building are intended third party beneficiaries of this
Section.



     SECTION 13.2. ESTOPPEL CERTIFICATE. Tenant shall, within ten (10) days following written
notice from Landlord, execute, acknowledge and deliver to Landlord, in any form that Landlord may
reasonably require, a statement in writing in favor of Landlord and/or any prospective purchaser or
encumbrancer of the Building (i) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of the modification and certifying that this Lease, as
modified, is in full force and effect) and the dates to which the rental, additional rent and other
charges have been paid in advance, if any, and (ii) acknowledging that, to Tenant’s knowledge,
there are no uncured defaults on the part of Landlord, or specifying each default if any are
claimed, and (iii) setting forth all further information that Landlord may reasonably require.
Tenant’s statement may be relied upon by any prospective purchaser or encumbrancer of all or any
portion of the Building or Project. In addition to Landlord’s other rights and remedies, Tenant’s
failure to deliver any estoppel statement within the provided time shall be conclusive upon Tenant
that (i) this Lease is in full force and effect, without modification except as may be represented
by Landlord, (ii) there are no uncured defaults in Landlord’s performance, and (iii) not more than
one month’s rental has been paid in advance.



ARTICLE XIV. DEFAULTS AND REMEDIES




     SECTION 14.1. TENANT’S DEFAULTS. In addition to any other event of default set forth in this
Lease, the occurrence of any one or more of the following events shall constitute a default by
Tenant:



          (a) The failure by Tenant to make any payment of rent required to be made by Tenant, as and
when due, where the failure continues for a period of three (3) days after written notice from



14









 






Landlord to Tenant; provided, however, that any such notice shall be in lieu of, and not in
addition to, any notice required under California Code of Civil Procedure Section 1161 as amended.
For purposes of these default and remedies provisions, the term “additional rent” shall be deemed
to include all amounts of any type whatsoever other than Basic Rent to be paid by Tenant pursuant
to the terms of this Lease.




          (b) The assignment, sublease, encumbrance or other transfer of the Lease by Tenant, either
voluntarily or by operation of law, whether by judgment, execution, transfer by intestacy or
testacy, or other means, without the prior written consent of Landlord unless otherwise authorized
herein.




          (c) The discovery by Landlord that any financial statement provided by Tenant, or by any
affiliate, successor or guarantor of Tenant, was materially false.




          (d) The failure or inability by Tenant to observe or perform any of the covenants or
provisions of this Lease to be observed or performed by Tenant, other than as specified in any
other subsection of this Section, where the failure continues for a period of thirty (30) days
after written notice from Landlord to Tenant; provided, however, that any such notice shall be in
lieu of, and not in addition to, any notice required under California Code of Civil Procedure
Section 1161 as amended. However, if the nature of the failure is such that more than thirty (30)
days are reasonably required for its cure, then Tenant shall not be deemed to be in default if
Tenant commences the cure within thirty (30) days, and thereafter diligently pursues the cure to
completion.




          (e) (i) The making by Tenant of any general assignment for the benefit of creditors; (ii) the
filing by or against Tenant of a petition to have Tenant adjudged a Chapter 7 debtor under the
Bankruptcy Code or to have debts discharged or a petition for reorganization or arrangement under
any law relating to bankruptcy (unless, in the case of a petition filed against Tenant, the same is
dismissed within sixty (60) days); (iii) the appointment of a trustee or receiver to take
possession of substantially all of Tenant’s assets located at the Premises or of Tenant’s interest
in this Lease, if possession is not restored to Tenant within thirty (30) days; (iv) the
attachment, execution or other judicial seizure of substantially all of Tenant’s assets located at
the Premises or of Tenant’s interest in this Lease, where the seizure is not discharged within
thirty (30) days; or (v) Tenant’s convening of a meeting of its creditors for the purpose of
effecting a moratorium upon or composition of its debts. Landlord shall not be deemed to have
knowledge of any event described in this subsection unless notification in writing is received by
Landlord, nor shall there be any presumption attributable to Landlord of Tenant’s insolvency. In
the event that any provision of this subsection is contrary to applicable law, the provision shall
be of no force or effect.




     SECTION 14.2. LANDLORD’S REMEDIES.



          (a) In the event of any default by Tenant, then in addition to any other remedies available to
Landlord, Landlord may exercise the following remedies:




               (i) Landlord may terminate Tenant’s right to possession of the Premises by any lawful means,
in which case this Lease shall terminate and Tenant shall immediately surrender possession of the
Premises to Landlord. Such termination shall not affect any accrued obligations of Tenant under
this Lease. Upon termination, Landlord shall have the right to reenter the Premises and remove all
persons and property. Landlord shall also be entitled to recover from Tenant:



                    (1) The worth at the time of award of the unpaid rent and additional rent which had been
earned at the time of termination;



                    (2) The worth at the time of award of the amount by which the unpaid rent and additional rent
which would have been earned after termination until the time of award exceeds the amount of such
loss that Tenant proves could have been reasonably avoided;



                    (3) The worth at the time of award of the amount by which the unpaid rent and additional rent
for the balance of the Term after the time of award exceeds the amount of such loss that Tenant
proves could be reasonably avoided;



                    (4) Any other amount necessary to compensate Landlord for all the 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 from Tenant’s default, including, but not limited to, the cost of
recovering possession of the Premises, commissions and other expenses of reletting, including
necessary repair, renovation, improvement and alteration of the Premises for a new tenant,
reasonable attorneys’ fees, and any other reasonable costs; and



                    (5) At Landlord’s election, all other amounts in addition to or in lieu of the foregoing as
may be permitted by law. The term “rent” as used in this Lease shall be deemed to mean the Basic
Rent and all other sums required to be paid by Tenant to Landlord pursuant to the terms of this
Lease, including without limitation any sums that may be owing from Tenant pursuant to Section 4.3
of this Lease. Any sum, other than Basic Rent, shall be computed on the basis of the average
monthly amount accruing during the twenty-four (24) month period immediately prior to default,
except



15









 







that if it becomes necessary to compute such rental before the twenty-four (24) month period has
occurred, then the computation shall be on the basis of the average monthly amount during the
shorter period. As used in subparagraphs (1) and (2) above, the “worth at the time of award” shall
be computed by allowing interest at the rate of ten percent (10%) per annum. As used in
subparagraph (3) above, the “worth at the time of award” shall be computed by discounting the
amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus
one percent (1%).



               (ii) Landlord may elect not to terminate Tenant’s right to possession of the Premises, in
which event Landlord may continue to enforce all of its rights and remedies under this Lease,
including the right to collect all rent as it becomes due. Efforts by the Landlord to maintain,
preserve or relet the Premises, or the appointment of a receiver to protect the Landlord’s
interests under this Lease, shall not constitute a termination of the Tenant’s right to possession
of the Premises. In the event that Landlord elects to avail itself of the remedy provided by this
subsection (ii), Landlord shall not unreasonably withhold its consent to an assignment or
subletting of the Premises subject to the reasonable standards for Landlord’s consent as are
contained in this Lease.



          (b) The various rights and remedies reserved to Landlord in this Lease or otherwise shall be
cumulative and, except as otherwise provided by California law, Landlord may pursue any or all of
its rights and remedies at the same time. No delay or omission of Landlord to exercise any right
or remedy shall be construed as a waiver of the right or remedy or of any breach or default by
Tenant. The acceptance by Landlord of rent shall not be a (i) waiver of any preceding breach or
default by Tenant of any provision of this Lease, other than the failure of Tenant to pay the
particular rent accepted, regardless of Landlord’s knowledge of the preceding breach or default at
the time of acceptance of rent, or (ii) a waiver of Landlord’s right to exercise any remedy
available to Landlord by virtue of the breach or default. The acceptance of any payment from a
debtor in possession, a trustee, a receiver or any other person acting on behalf of Tenant or
Tenant’s estate shall not waive or cure a default under Section 14.1. No payment by Tenant or
receipt by Landlord of a lesser amount than the rent required by this Lease shall be deemed to be
other than a partial payment on account of the earliest due stipulated rent, nor shall any
endorsement or statement on any check or letter be deemed an accord and satisfaction and Landlord
shall accept the check or payment without prejudice to Landlord’s right to recover the balance of
the rent or pursue any other remedy available to it. Tenant hereby waives any right of redemption
or relief from forfeiture under California Code of Civil Procedure Section 1174 or 1179, or under
any other present or future law, in the event this Lease is terminated by reason of any default by
Tenant. No act or thing done by Landlord or Landlord’s agents during the Term shall be deemed an
acceptance of a surrender of the Premises, and no agreement to accept a surrender shall be valid
unless in writing and signed by Landlord. No employee of Landlord or of Landlord’s agents shall
have any power to accept the keys to the Premises prior to the termination of this Lease, and the
delivery of the keys to any employee shall not operate as a termination of the Lease or a surrender
of the Premises.




     SECTION 14.3. LATE PAYMENTS.



          (a) Any rent due under this Lease that is not paid to Landlord within five (5) days of the
date when due shall bear interest at the maximum rate permitted by law from the date due until
fully paid. The payment of interest shall not cure any default by Tenant under this Lease. In
addition, Tenant acknowledges that the late payment by Tenant to Landlord of rent will cause
Landlord to incur costs not contemplated by this Lease, the exact amount of which will be extremely
difficult and impracticable to ascertain. Those costs may include, but are not limited to,
administrative, processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any ground lease, mortgage or trust deed covering the Premises.
Accordingly, if any rent due from Tenant shall not be received by Landlord or Landlord’s designee
within five (5) days after the date due, then Tenant shall pay to Landlord, in addition to the
interest provided above, a late charge for each delinquent payment equal to the greater of (i) five
percent (5%) of that delinquent payment or (ii) One Hundred Dollars ($100.00). Acceptance of a
late charge by Landlord shall not constitute a waiver of Tenant’s default with respect to the
overdue amount, nor shall it prevent Landlord from exercising any of its other rights and remedies.




          (b) Following each second consecutive installment of Basic Rent that is not paid within five
(5) days following notice of nonpayment from Landlord, Landlord shall have the option (i) to
require that beginning with the first payment of Basic Rent next due, Basic Rent shall no longer be
paid in monthly installments but shall be payable quarterly three (3) months in advance and/or (ii)
to require that Tenant increase the amount, if any, of the Security Deposit by one hundred percent
(100%). Should Tenant deliver to Landlord, at any time during the Term, two (2) or more
insufficient checks, the Landlord may require that all monies then and thereafter due from Tenant
be paid to Landlord by cashier’s check.




     SECTION 14.4. RIGHT OF LANDLORD TO PERFORM. All covenants and agreements to be performed by
Tenant under this Lease shall be performed at Tenant’s sole cost and expense and without any
abatement of rent or right of set-off. If Tenant fails to pay any sum of money, or fails to
perform any other act on its part to be performed under this Lease, and the failure continues
beyond any applicable grace period set forth in Section 14.1, then in addition to any other
available remedies, Landlord may, at its election, make the payment or perform the other act on
Tenant’s part. Landlord’s



16









 







election to make the payment or perform the act on Tenant’s part shall not give rise to any
responsibility of Landlord to continue making the same or similar payments or performing the same
or similar acts. Tenant shall, promptly upon demand by Landlord, reimburse Landlord for all sums
paid by Landlord and all necessary incidental costs, together with interest at the maximum rate
permitted by law from the date of the payment by Landlord.



     SECTION 14.5. DEFAULT BY LANDLORD. Landlord shall not be deemed to be in default in the
performance of any obligation under this Lease unless and until it has failed to perform the
obligation within thirty (30) days after written notice by Tenant to Landlord specifying in
reasonable detail the nature and extent of the failure; provided, however, that if the nature of
Landlord’s obligation is such that more than thirty (30) days are required for its performance,
then Landlord shall not be deemed to be in default if it commences performance within the thirty
(30) day period and thereafter diligently pursues the cure to completion.



     SECTION 14.6. EXPENSES AND LEGAL FEES. Should either Landlord or Tenant bring any action in
connection with this Lease, the prevailing party shall be entitled to recover as a part of the
action its reasonable attorneys’ fees, and all other costs. The prevailing party for the purpose
of this paragraph shall be determined by the trier of the facts.



     SECTION 14.7. WAIVER OF JURY TRIAL/JUDICIAL REFERENCE.



          (a) LANDLORD AND TENANT EACH ACKNOWLEDGES THAT IT IS AWARE OF AND HAS HAD THE ADVICE OF
COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHT TO TRIAL BY JURY, AND EACH PARTY DOES HEREBY
EXPRESSLY AND KNOWINGLY WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER (AND/OR AGAINST ITS
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR SUBSIDIARY OR AFFILIATED ENTITIES) ON ANY MATTERS
WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, TENANT’S USE OR OCCUPANCY OF THE
PREMISES, AND/OR ANY CLAIM OF INJURY OR DAMAGE.




          (b) IN THE EVENT THAT THE JURY WAIVER PROVISIONS OF SECTION 14.7(a) ARE NOT ENFORCEABLE UNDER
CALIFORNIA LAW, THEN THE PROVISIONS OF THIS SECTION 14.7(b) SHALL APPLY. IT IS THE DESIRE AND
INTENTION OF THE PARTIES TO AGREE UPON A MECHANISM AND PROCEDURE UNDER WHICH CONTROVERSIES AND
DISPUTES ARISING OUT OF THIS LEASE OR RELATED TO THE PREMISES WILL BE RESOLVED IN A PROMPT AND
EXPEDITIOUS MANNER. ACCORDINGLY, EXCEPT WITH RESPECT TO ACTIONS FOR UNLAWFUL OR FORCIBLE DETAINER
OR WITH RESPECT TO THE PREJUDGMENT REMEDY OF ATTACHMENT, ANY ACTION, PROCEEDING OR COUNTERCLAIM
BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER (AND/OR AGAINST ITS OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS OR SUBSIDIARY OR AFFILIATED ENTITIES) ON ANY MATTERS WHATSOEVER ARISING OUT OF OR
IN ANY WAY CONNECTED WITH THIS LEASE, TENANT’S USE OR OCCUPANCY OF THE PREMISES AND/OR ANY CLAIM OF
INJURY OR DAMAGE, SHALL BE HEARD AND RESOLVED BY A REFEREE UNDER THE PROVISIONS OF THE CALIFORNIA
CODE OF CIVIL PROCEDURE, SECTIONS 638 – 645.1, INCLUSIVE (AS SAME MAY BE AMENDED, OR ANY SUCCESSOR
STATUTE(S) THERETO) (THE “REFEREE SECTIONS”). ANY FEE TO INITIATE THE JUDICIAL REFERENCE
PROCEEDINGS SHALL BE PAID BY THE PARTY INITIATING SUCH PROCEDURE; PROVIDED HOWEVER, THAT THE COSTS
AND FEES, INCLUDING ANY INITIATION FEE, OF SUCH PROCEEDING SHALL ULTIMATELY BE BORNE IN ACCORDANCE
WITH SECTION 14.6 ABOVE. THE VENUE OF THE PROCEEDINGS SHALL BE IN THE COUNTY IN WHICH THE PREMISES
ARE LOCATED. WITHIN TEN (10) DAYS OF RECEIPT BY ANY PARTY OF A WRITTEN REQUEST TO RESOLVE ANY
DISPUTE OR CONTROVERSY PURSUANT TO THIS SECTION 14.7(b), THE PARTIES SHALL AGREE UPON A SINGLE
REFEREE WHO SHALL TRY ALL ISSUES, WHETHER OF FACT OR LAW, AND REPORT A FINDING AND JUDGMENT ON SUCH
ISSUES AS REQUIRED BY THE REFEREE SECTIONS. IF THE PARTIES ARE UNABLE TO AGREE UPON A REFEREE
WITHIN SUCH TEN (10) DAY PERIOD, THEN ANY PARTY MAY THEREAFTER FILE A LAWSUIT IN THE COUNTY IN
WHICH THE PREMISES ARE LOCATED FOR THE PURPOSE OF APPOINTMENT OF A REFEREE UNDER CALIFORNIA CODE OF
CIVIL PROCEDURE SECTIONS 638 AND 640, AS SAME MAY BE AMENDED OR ANY SUCCESSOR STATUTE(S) THERETO.
IF THE REFEREE IS APPOINTED BY THE COURT, THE REFEREE SHALL BE A NEUTRAL AND IMPARTIAL RETIRED
JUDGE WITH SUBSTANTIAL EXPERIENCE IN THE RELEVANT MATTERS TO BE DETERMINED, FROM JAMS/ENDISPUTE,
INC., THE AMERICAN ARBITRATION ASSOCIATION OR SIMILAR MEDIATION/ARBITRATION ENTITY. THE PROPOSED
REFEREE MAY BE CHALLENGED BY ANY PARTY FOR ANY OF THE GROUNDS LISTED IN SECTION 641 OF THE
CALIFORNIA CODE OF CIVIL PROCEDURE, AS SAME MAY BE AMENDED OR ANY SUCCESSOR STATUTE(S) THERETO.
THE REFEREE SHALL HAVE THE POWER TO DECIDE ALL ISSUES OF FACT AND LAW AND REPORT HIS OR HER
DECISION ON SUCH ISSUES, AND TO ISSUE ALL RECOGNIZED REMEDIES AVAILABLE AT LAW OR IN EQUITY FOR ANY
CAUSE OF ACTION THAT IS BEFORE THE REFEREE, INCLUDING AN AWARD OF ATTORNEYS’ FEES AND COSTS IN
ACCORDANCE WITH CALIFORNIA LAW. THE REFEREE SHALL NOT, HOWEVER, HAVE THE POWER TO AWARD PUNITIVE
DAMAGES, AND THE PARTIES HEREBY WAIVE ANY RIGHT TO RECOVER ANY SUCH DAMAGES. THE REFEREE SHALL
OVERSEE DISCOVERY



17









 






AND MAY ENFORCE ALL DISCOVERY ORDERS IN THE SAME MANNER AS ANY TRIAL COURT JUDGE, WITH RIGHTS
TO REGULATE DISCOVERY AND TO ISSUE AND ENFORCE SUBPOENAS, PROTECTIVE ORDERS AND OTHER LIMITATIONS
ON DISCOVERY AVAILABLE UNDER CALIFORNIA LAW; PROVIDED, HOWEVER, THAT THE REFEREE SHALL LIMIT
DISCOVERY TO THAT WHICH IS ESSENTIAL TO THE EFFECTIVE PROSECUTION OR DEFENSE OF THE ACTION, AND IN
NO EVENT SHALL DISCOVERY BY EITHER PARTY INCLUDE MORE THAN ONE NON-EXPERT WITNESS DEPOSITION UNLESS
BOTH PARTIES OTHERWISE AGREE. THE REFERENCE PROCEEDING SHALL BE CONDUCTED IN ACCORDANCE WITH
CALIFORNIA LAW (INCLUDING THE RULES OF EVIDENCE), AND IN ALL REGARDS, THE REFEREE SHALL FOLLOW
CALIFORNIA LAW APPLICABLE AT THE TIME OF THE REFERENCE PROCEEDING. IN ACCORDANCE WITH SECTION 644
OF THE CALIFORNIA CODE OF CIVIL PROCEDURE, THE DECISION OF THE REFEREE UPON THE WHOLE ISSUE MUST
STAND AS THE DECISION OF THE COURT, AND UPON THE FILING OF THE STATEMENT OF DECISION WITH THE CLERK
OF THE COURT, OR WITH THE JUDGE IF THERE IS NO CLERK, JUDGMENT MAY BE ENTERED THEREON IN THE SAME
MANNER AS IF THE ACTION HAD BEEN TRIED BY THE COURT. THE PARTIES SHALL PROMPTLY AND DILIGENTLY
COOPERATE WITH ONE ANOTHER AND THE REFEREE, AND SHALL PERFORM SUCH ACTS AS MAY BE NECESSARY TO
OBTAIN A PROMPT AND EXPEDITIOUS RESOLUTION OF THE DISPUTE OR CONTROVERSY IN ACCORDANCE WITH THE
TERMS OF THIS SECTION 14.7(b). TO THE EXTENT THAT NO PENDING LAWSUIT HAS BEEN FILED TO OBTAIN THE
APPOINTMENT OF A REFEREE, ANY PARTY, AFTER THE ISSUANCE OF THE DECISION OF THE REFEREE, MAY APPLY
TO THE COURT OF THE COUNTY IN WHICH THE PREMISES ARE LOCATED FOR CONFIRMATION BY THE COURT OF THE
DECISION OF THE REFEREE IN THE SAME MANNER AS A PETITION FOR CONFIRMATION OF AN ARBITRATION AWARD
PURSUANT TO CODE OF CIVIL PROCEDURE SECTION 1285 ET SEQ. (AS SAME MAY BE AMENDED OR ANY SUCCESSOR
STATUTE(S) THERETO).




ARTICLE XV. END OF TERM




     SECTION 15.1. HOLDING OVER. This Lease shall terminate without further notice upon the
expiration of the Term, and any holding over by Tenant after the expiration shall not constitute a
renewal or extension of this Lease, or give Tenant any rights under this Lease, except when in
writing signed by both parties. If Tenant holds over for any period after the expiration (or
earlier termination) of the Term, Landlord may, at its option, treat Tenant as a tenant at
sufferance only, commencing on the first (1st) day following the termination of this
Lease. However, should Landlord accept the payment of monthly hold-over rent by Tenant, then a
month-to-month tenancy shall be deemed effected and neither party shall terminate this Lease
without thirty (30) days prior written notice to the other party. Any hold-over by Tenant shall be
subject to all of the terms of this Lease, except that the monthly rental shall be two hundred
percent (200%) of the total monthly rental for the month immediately preceding the date of
termination, subject to Landlord’s right to modify same upon thirty (30) days notice to Tenant.
The acceptance by Landlord of monthly hold-over rental in a lesser amount shall not constitute a
waiver of Landlord’s right to recover the full amount due unless otherwise agreed in writing by
Landlord. If Tenant fails to surrender the Premises upon the expiration of this Lease despite
demand to do so by Landlord, Tenant shall indemnify and hold Landlord harmless from all loss or
liability, including without limitation, any claims made by any succeeding tenant relating to such
failure to surrender. The foregoing provisions of this Section are in addition to and do not
affect Landlord’s right of re-entry or any other rights of Landlord under this Lease or at law.



     SECTION 15.2. MERGER ON TERMINATION. The voluntary or other surrender of this Lease by
Tenant, or a mutual termination of this Lease, shall terminate any or all existing subleases unless
Landlord, at its option, elects in writing to treat the surrender or termination as an assignment
to it of any or all subleases affecting the Premises.



     SECTION 15.3. SURRENDER OF PREMISES; REMOVAL OF PROPERTY. Upon the Expiration Date or upon
any earlier termination of this Lease, Tenant shall quit and surrender possession of the Premises
to Landlord in as good order, condition and repair as when received or as hereafter may be improved
by Landlord or Tenant, reasonable wear and tear and repairs which are Landlord’s obligation
excepted, and shall remove or fund to Landlord the cost of removing all wallpapering and voice
and/or data transmission cabling installed by or for Tenant, together with all personal property
and debris, except for any items that Landlord may by written authorization allow to remain.
Tenant shall repair all damage to the Premises resulting from the removal and restore the affected
area to its pre-existing condition, reasonable wear and tear excepted, provided that Landlord may
instead elect to repair any structural damage at Tenant’s expense. If Tenant shall fail to comply
with the provisions of this Section, Landlord may effect the removal and/or make any repairs, and
the cost to Landlord shall be additional rent payable by Tenant upon demand. If requested by
Landlord, Tenant shall execute, acknowledge and deliver to Landlord an instrument in writing
releasing and quitclaiming to Landlord all right, title and interest of Tenant in the Premises.



18









 





ARTICLE XVI. PAYMENTS AND NOTICES




     All sums payable by Tenant to Landlord shall be paid, without deduction or offset, in lawful
money of the United States to Landlord at its address set forth in Item 13 of the Basic Lease
Provisions, or at any other place as Landlord may designate in writing. Unless this Lease
expressly provides otherwise, as for example in the payment of rent pursuant to Section 4.1, all
payments shall be due and payable within five (5) days after demand. All payments requiring
proration shall be prorated on the basis of the number of days in the pertinent calendar month or
year, as applicable. Any notice, election, demand, consent, approval or other communication to be
given or other document to be delivered by either party to the other may be delivered to the other
party, at the address set forth in Item 13 of the Basic Lease Provisions, by personal service or
electronic facsimile transmission, or by any courier or “overnight” express mailing service, or may
be deposited in the United States mail, postage prepaid. Either party may, by written notice to
the other, served in the manner provided in this Article, designate a different address. If any
notice or other document is sent by mail, it shall be deemed served or delivered three (3) business
days after mailing or, if sooner, upon actual receipt. The refusal to accept delivery of a notice,
or the inability to deliver the notice (whether due to a change of address for which notice was not
duly given or other good reason), shall be deemed delivery and receipt of the notice as of the date
of attempted delivery. If more than one person or entity is named as Tenant under this Lease,
service of any notice upon any one of them shall be deemed as service upon all of them.



ARTICLE XVII. RULES AND REGULATIONS




     Tenant agrees to comply with the Rules and Regulations attached as Exhibit E, and any
reasonable and nondiscriminatory amendments, modifications and/or additions as may be adopted and
published by written notice to tenants by Landlord for the safety, care, security, good order, or
cleanliness of the Premises, Building, Project and/or Common Areas. Landlord shall not be liable
to Tenant for any violation of the Rules and Regulations or the breach of any covenant or condition
in any lease or any other act or conduct by any other tenant, and the same shall not constitute a
constructive eviction hereunder. One or more waivers by Landlord of any breach of the Rules and
Regulations by Tenant or by any other tenant(s) shall not be a waiver of any subsequent breach of
that rule or any other. Tenant’s failure to keep and observe the Rules and Regulations shall
constitute a default under this Lease. In the case of any conflict between the Rules and
Regulations and this Lease, this Lease shall be controlling.



ARTICLE XVIII. BROKER’S COMMISSION




     The parties recognize as the broker(s) who negotiated this Lease the firm(s) whose name(s) is
(are) stated in Item 10 of the Basic Lease Provisions, and agree that Landlord shall be responsible
for the payment of brokerage commissions to those broker(s) unless otherwise provided in this
Lease. It is understood that Landlord’s Broker represents only Landlord in this transaction and
Tenant’s Broker (if any) represents only Tenant. Each party warrants that it has had no dealings
with any other real estate broker or agent in connection with the negotiation of this Lease, and
agrees to indemnify and hold the other party harmless from any cost, expense or liability
(including reasonable attorneys’ fees) for any compensation, commissions or charges claimed by any
other real estate broker or agent employed or claiming to represent or to have been employed by the
indemnifying party in connection with the negotiation of this Lease. The foregoing agreement shall
survive the termination of this Lease.



ARTICLE XIX. TRANSFER OF LANDLORD’S INTEREST




     In the event of any transfer of Landlord’s interest in the Premises, the transferor shall be
automatically relieved of all obligations on the part of Landlord accruing under this Lease from
and after the date of the transfer, provided that Tenant is duly notified of the transfer. Any
funds held by the transferor in which Tenant has an interest shall be turned over, subject to that
interest, to the transferee. No holder of a mortgage and/or deed of trust to which this Lease is
or may be subordinate shall be responsible in connection with the Security Deposit unless the
mortgagee or holder of the deed of trust actually receives the Security Deposit. It is intended
that the covenants and obligations contained in this Lease on the part of Landlord shall, subject
to the foregoing, be binding on Landlord, its successors and assigns, only during and in respect to
their respective successive periods of ownership.



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ARTICLE XX. INTERPRETATION




     SECTION 20.1. GENDER AND NUMBER. Whenever the context of this Lease requires, the words
“Landlord” and “Tenant” shall include the plural as well as the singular, and words used in neuter,
masculine or feminine genders shall include the others.



     SECTION 20.2. HEADINGS. The captions and headings of the articles and sections of this
Lease are for convenience only, are not a part of this Lease and shall have no effect upon its
construction or interpretation.



     SECTION 20.3. JOINT AND SEVERAL LIABILITY. If more than one person or entity is named as
Tenant, the obligations imposed upon each shall be joint and several and the act of or notice from,
or notice or refund to, or the signature of, any one or more of them shall be binding on all of
them with respect to the tenancy of this Lease, including, but not limited to, any renewal,
extension, termination or modification of this Lease.



     SECTION 20.4. SUCCESSORS. Subject to Articles IX and XIX, all rights and liabilities given
to or imposed upon Landlord and Tenant shall extend to and bind their respective heirs, executors,
administrators, successors and assigns. Nothing contained in this Section is intended, or shall be
construed, to grant to any person other than Landlord and Tenant and their successors and assigns
any rights or remedies under this Lease.



     SECTION 20.5. TIME OF ESSENCE. Time is of the essence with respect to the performance of
every provision of this Lease in which time of performance is a factor.



     SECTION 20.6. CONTROLLING LAW/VENUE. This Lease shall be governed by and interpreted in
accordance with the laws of the State of California. Should any litigation be commenced between
the parties in connection with this Lease, such action shall be prosecuted in the applicable State
Court of California in the county in which the Building is located.



     SECTION 20.7. SEVERABILITY. If any term or provision of this Lease, the deletion of which
would not adversely affect the receipt of any material benefit by either party or the deletion of
which is consented to by the party adversely affected, shall be held invalid or unenforceable to
any extent, the remainder of this Lease shall not be affected and each term and provision of this
Lease shall be valid and enforceable to the fullest extent permitted by law.



     SECTION 20.8. WAIVER. One or more waivers by Landlord or Tenant of any breach of any term,
covenant or condition contained in this Lease shall not be a waiver of any subsequent breach of the
same or any other term, covenant or condition. Consent to any act by one of the parties shall not
be deemed to render unnecessary the obtaining of that party’s consent to any subsequent act. No
breach of this Lease shall be deemed to have been waived unless the waiver is in a writing signed
by the waiving party.



     SECTION 20.9. INABILITY TO PERFORM. In the event that either party shall be delayed or
hindered in or prevented from the performance of any work or in performing any act required under
this Lease by reason of any cause beyond the reasonable control of that party, then the performance
of the work or the doing of the act shall be excused for the period of the delay and the time for
performance shall be extended for a period equivalent to the period of the delay. The provisions
of this Section shall not operate to excuse Tenant from the prompt payment of rent.



     SECTION 20.10. ENTIRE AGREEMENT. This Lease and its exhibits and other attachments cover in
full each and every agreement of every kind between the parties concerning the Premises, the
Building, and the Project, and all preliminary negotiations, oral agreements, understandings and/or
practices, except those contained in this Lease, are superseded and of no further effect. Tenant
waives its rights to rely on any representations or promises made by Landlord or others which are
not contained in this Lease. No verbal agreement or implied covenant shall be held to modify the
provisions of this Lease, any statute, law, or custom to the contrary notwithstanding.



     SECTION 20.11. QUIET ENJOYMENT. Upon the observance and performance of all the covenants,
terms and conditions on Tenant’s part to be observed and performed, and subject to the other
provisions of this Lease, Tenant shall have the right of quiet enjoyment and use of the Premises
for the Term without hindrance or interruption by Landlord or any other person claiming by or
through Landlord.



     SECTION 20.12. SURVIVAL. All covenants of Landlord or Tenant which reasonably would be
intended to survive the expiration or sooner termination of this Lease, including without
limitation any warranty or indemnity hereunder, shall so survive and continue to be binding upon
and inure to the benefit of the respective parties and their successors and assigns.



20









 





ARTICLE XXI. EXECUTION AND RECORDING




     SECTION 21.1. COUNTERPARTS. This Lease may be executed in one or more counterparts, each of
which shall constitute an original and all of which shall be one and the same agreement.



     SECTION 21.2. CORPORATE AND PARTNERSHIP AUTHORITY. If Tenant is a corporation, limited
liability company or partnership, each individual executing this Lease on behalf of the entity
represents and warrants that he is duly authorized to execute and deliver this Lease and that this
Lease is binding upon the corporation, limited liability company or partnership in accordance with
its terms. Tenant shall, at Landlord’s request, deliver a certified copy of its organizational
documents or an appropriate certificate authorizing or evidencing the execution of this Lease.



     SECTION 21.3. EXECUTION OF LEASE; NO OPTION OR OFFER. The submission of this Lease to
Tenant shall be for examination purposes only, and shall not constitute an offer to or option for
Tenant to lease the Premises. Execution of this Lease by Tenant and its return to Landlord shall
not be binding upon Landlord, notwithstanding any time interval, until Landlord has in fact
executed and delivered this Lease to Tenant, it being intended that this Lease shall only become
effective upon execution by Landlord and delivery of a fully executed counterpart to Tenant.



     SECTION 21.4. 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.



     SECTION 21.5. AMENDMENTS. No amendment or mutual termination of this Lease shall be
effective unless in writing signed by authorized signatories of Tenant and Landlord, or by their
respective successors in interest. No actions, policies, oral or informal arrangements, business
dealings or other course of conduct by or between the parties shall be deemed to modify this Lease
in any respect.



ARTICLE XXII. MISCELLANEOUS




     SECTION 22.1. NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and agrees that the terms
of this Lease are confidential and constitute proprietary information of Landlord. Disclosure of
the terms could adversely affect the ability of Landlord to negotiate other leases and impair
Landlord’s relationship with other tenants. Accordingly, Tenant agrees that it, and its partners,
officers, directors, employees and attorneys, shall not intentionally and voluntarily disclose the
terms and conditions of this Lease to any other tenant or apparent prospective tenant of the
Building or Project, either directly or indirectly, without the prior written consent of Landlord,
provided, however, that Tenant may disclose the terms to prospective subtenants or assignees under
this Lease or pursuant to any legal requirement.



     SECTION 22.2. REPRESENTATIONS BY TENANT. The application, financial statements and tax
returns, if any, submitted and certified to by Tenant as an accurate representation of its
financial condition have been prepared, certified and submitted to Landlord as an inducement and
consideration to Landlord to enter into this Lease. The application and statements are represented
and warranted by Tenant to be correct and to accurately and fully reflect Tenant’s true financial
condition as of the date of execution of this Lease by Tenant. Tenant shall during the Term
promptly furnish Landlord with current annual financial statements accurately reflecting Tenant’s
financial condition upon written request from Landlord.



     SECTION 22.3. CHANGES REQUESTED BY LENDER. If, in connection with obtaining financing for
the Building, the lender shall request reasonable modifications in this Lease as a condition to the
financing, Tenant will not unreasonably withhold or delay its consent, provided that the
modifications do not materially increase the obligations of Tenant or materially and adversely
affect the leasehold interest created by this Lease.



     SECTION 22.4. MORTGAGEE PROTECTION. No act or failure to act on the part of Landlord which
would otherwise entitle Tenant to be relieved of its obligations hereunder or to terminate this
Lease shall result in such a release or termination unless (a) Tenant has given notice by
registered or certified mail to any beneficiary of a deed of trust or mortgage covering the
Building whose address has been furnished to Tenant and (b) such beneficiary is afforded a
reasonable opportunity to cure the default by Landlord, including, if necessary to effect the cure,
time to obtain possession of the Building by power of sale or judicial foreclosure provided that
such foreclosure remedy is diligently pursued.



     SECTION 22.5. SDN LIST. Tenant hereby represents and warrants that neither Tenant nor any
officer, director, employee, partner, member or other principal of Tenant (collectively, “Tenant
Parties”) is listed as a Specially Designated National and Blocked Person (“SDN”) on the list of
such persons and entities issued by the U.S. Treasury Office of Foreign Assets Control (OFAC). In
the event Tenant or any Tenant Party is or becomes listed as an SDN, Tenant shall be deemed in
breach of this Lease and Landlord shall have the right to terminate this Lease immediately upon
written notice to Tenant.



21









 





     SECTION 22.6. DISCLOSURE STATEMENT. Tenant acknowledges that it has read, understands and,
if applicable, shall comply with the provisions of Exhibit F to this Lease, if that Exhibit is
attached.



     SECTION 22.7. SATELLITE DISH. Tenant shall have the right to maintain and operate within an
area designated by Landlord on the roof of the Building (the “Licensed Area”), during the Term of
this Lease, one (1) satellite dish (the “Dish”) up to twenty-four (24) inches in diameter (of which
the height, appearance and installation procedures must be approved in writing by Landlord) in
accordance with and subject to the following terms. The height, appearance and visibility of the
Dish from the street are subject to Landlord’s approval. Landlord may impose a reasonable
architectural review fee in connection with its approval of the Dish, and Tenant shall pay same
promptly following demand. Tenant shall utilize a contractor acceptable to Landlord to install the
Dish, which contractor shall comply with Landlord’s construction rules for the Building, including
without limitation Landlord’s standard insurance requirements. Landlord reserves the right upon
reasonable notice to Tenant to require either (a) the relocation of all equipment installed by
Tenant to another location on the roof of the Building, or (b) the removal of any or all of such
equipment should Landlord determine that its presence may result in damage to the Building and that
Tenant has not made satisfactory arrangements to protect Landlord therefrom. During the initial
sixty (60) month Lease Term, Tenant shall pay to Landlord a license fee in the amount of One
Hundred Fifty Dollars ($150.00) per month; thereafter, unless otherwise agreed in writing by the
parties, Tenant shall pay a license fee in an amount as reasonably determined by Landlord from time
to time. The License Fee shall be payable in advance as additional rent hereunder on the first day
of each and every calendar month during the Lease Term, commencing upon the date of Tenant’s
installation of the Dish. Tenant shall use the Licensed Area only for the operation and maintenance
of the Dish and the necessary mechanical and electrical equipment to service the Dish. The right
to utilize the Dish and Licensed Area shall be limited solely to Tenant, and in no event may Tenant
assign or sublicense such right (except in connection with an assignment of this Lease to a Tenant
Affiliate as described in Section 9.1(f) hereof). Tenant shall not use or permit any other person
to use the Licensed Area for any improper use or for any operation which would constitute a
nuisance, and Tenant shall at all times conform to and cause all persons using any part of the
Licensed Area to comply with all public laws, ordinances and regulations from time to time
applicable thereto and to all operations thereon. Tenant shall require its employees, when using
the Licensed Area, to stay within the immediate confines thereof. In the event a cable television
system is operating in the area, Tenant shall at all times conduct its operations so as to ensure
that the cable television system shall not be subject to harmful interference as a result of such
operations by Tenant. Upon notification from Landlord of any such interference, Tenant agrees to
immediately take the necessary steps to correct such situation, and Tenant’s failure to do so shall
be deemed a default under the terms of this Lease. During the Lease Term, Tenant shall comply with
any standards promulgated by applicable governmental authorities or otherwise reasonably
established by Landlord regarding the generation of electromagnetic fields. Should Landlord
determine in good faith at any time that the Dish poses a health or safety hazard to occupants of
the Building, Landlord may require Tenant to remove the Dish or make other arrangements
satisfactory to Landlord. Any claim or liability resulting from the use of the Dish shall be
subject to Tenant’s indemnification obligation as set forth in Section 10.3 of the Lease. Upon the
expiration or earlier termination of this Lease, Tenant shall remove the Dish and all other
equipment installed by it and shall restore the Licensed Area to its original condition. Tenant
understands and agrees that should it fail to install the Dish within six (6) months following the
Commencement Date, then Tenant’s right to install same thereafter shall be null and void.



     SECTION 22.8.CONTINGENCY. The parties acknowledge that all or a portion of the Premises
currently is occupied by Charles Schwab & Co., Inc. (“Prior Tenant”) pursuant to a lease dated July
23, 1999, as amended (“Prior Lease”), by and between Landlord (as successor in interest to EOP-La
Jolla Limited Partnership, a Delaware limited partnership), and such Prior Tenant or its
predecessor in interest. This Lease specifically is contingent upon Landlord, on or before
November 30, 2007 (the “Contingency Date”), entering into an agreement with the Prior
Tenant to terminate the Prior Lease with respect to the Premises (the “Prior Tenant Agreement”).
Landlord is currently negotiating the terms of the Prior Tenant Agreement with the Prior Tenant.
If the Prior Tenant Agreement has not been fully executed, and if all contingencies relating
thereto have not been waived by Landlord or otherwise satisfied, on or before the Contingency Date,
then Landlord may terminate this Lease by notifying Tenant on or before the earlier of (i) 10 days
after the Contingency Date and (ii) execution of the Prior Tenant Agreement by the Prior Tenant,
whereupon, all security deposits and prepaid rental, if any, previously paid by Tenant in
connection with this Lease shall be returned to Tenant, this Lease shall be null and void and of no
force or effect.









	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	 	 	TENANT:	 	 
	 
	 	 	 	 	 	 	 	 
	UTC PROPERTIES LLC	 	 	 	UNITED BUSINESS HOLDINGS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	By

	 	/s/ Steven M. Case
 

	 	 
	 	By  /s/ Bob Adkins
 

	 	 
	 

	 	Steven M. Case
	 	 	 	Printed Name   Bob Adkins
 

	 	 
	 

	 	Senior Vice President, Leasing
	 	 	 	Title
 

	 	 









22









 











	 	 	 	 	 	 	 	 	 
	By

	 	/s/ Michael T. Bennett
 

	 	 
	 	By  /s/ Pamela T. Davis
 

	 	 
	 

	 	Michael T. Bennett
	 	 	 	Printed Name   Pamela T. Davis
 

	 	 
	 

	 	Vice President, Operations
	 	 	 	Title
 

	 	 









23









 






EXHIBIT A









4380 La Jolla Village Drive, Suite 110









Exhibit A





 









 








EXHIBIT B




UTILITIES AND SERVICES




     The following standards for utilities and services shall be in effect at the Building.
Landlord reserves the right to adopt nondiscriminatory modifications and additions to these
standards. In the case of any conflict between these standards and the Lease, the Lease shall be
controlling. Subject to all of the provisions of the Lease, including but not limited to the
restrictions contained in Section 6.1, the following shall apply:



     1. Landlord shall make available to the Premises during the hours of 8:00 a.m. to 6:00 p.m.,
Monday through Friday, and if requested by Tenant, from 9:00 a.m. to 1:00 p.m. on Saturdays
(“Building Hours”), generally recognized national holidays excepted, reasonable HVAC services.
Subject to the provisions set forth below, Landlord shall also furnish the Building with elevator
service (if applicable), reasonable amounts of electric current for normal lighting by Landlord’s
standard overhead fluorescent and incandescent fixtures and for the operation of office equipment
consistent in type and quantity with that utilized by typical office tenants of the Building and
Project, and water for lavatory purposes. Electricity used by Tenant in the Premises shall
separately metered and shall be paid for by Tenant by separate charge billed by the applicable
utility company and payable directly by Tenant. Tenant will not, without the prior written consent
of Landlord, connect any apparatus, machine or device with water pipes or electric current (except
through existing electrical outlets in the Premises) for the purpose of using electric current or
water. Because the Building systems have been designed for normal occupancy of approximately four
persons per one thousand usable square feet, Tenant understands that excess occupancy of the
Premises may result in excessive use of power and other services and may inhibit the efficient
cooling of the Premises. This paragraph shall at all times be subject to applicable governmental
regulations.



     2. Upon written request from Tenant delivered to Landlord at least 24 hours prior to the
period for which service is requested, but during normal business hours, Landlord will provide any
of the foregoing building services to Tenant at such times when such services are not otherwise
available. Tenant agrees to pay Landlord for those after-hour services at rates that Landlord may
establish from time to time. If Tenant requires electric current in excess of that which Landlord
is obligated to furnish under this Exhibit B, Tenant shall first obtain the consent of Landlord,
and Landlord may cause an electric current meter to be installed in the Premises to measure the
amount of electric current consumed. The cost of installation, maintenance and repair of the meter
shall be paid for by Tenant, and Tenant shall reimburse Landlord promptly upon demand for all
electric current consumed for any special power use as shown by the meter. The reimbursement shall
be at the rates charged for electrical power by the local public utility furnishing the current,
plus any additional expense incurred in keeping account of the electric current consumed.



     3. Landlord shall furnish water for drinking, personal hygiene and lavatory purposes only.
If Tenant requires or uses water for any purposes in addition to ordinary drinking, cleaning and
lavatory purposes, Landlord may, in its discretion, install a water meter to measure Tenant’s water
consumption. Tenant shall pay Landlord for the cost of the meter and the cost of its installation,
and for consumption throughout the duration of Tenant’s occupancy. Tenant shall keep the meter and
installed equipment in good working order and repair at Tenant’s own cost and expense, in default
of which Landlord may cause the meter to be replaced or repaired at Tenant’s expense. Tenant
agrees to pay for water consumed, as shown on the meter and when bills are rendered, and on
Tenant’s default in making that payment Landlord may pay the charges on behalf of Tenant. Any
costs or expenses or payments made by Landlord for any of the reasons or purposes stated above
shall be deemed to be additional rent payable by Tenant to Landlord upon demand.



     4. In the event that any utility service to the Premises is separately metered or billed to
Tenant, Tenant shall pay all charges for that utility service to the Premises and the cost of
furnishing the utility to tenant suites shall be excluded from the Operating Expenses as to which
reimbursement from Tenant is required in the Lease. If any utility charges are not paid when due
Landlord may pay them, and any amounts paid by Landlord shall immediately become due to Landlord
from Tenant as additional rent. If Landlord elects to furnish any utility service to the Premises,
Tenant shall purchase its requirements of that utility from Landlord as long as the rates charged
by Landlord do not exceed those which Tenant would be required to pay if the utility service were
furnished it directly by a public utility.



     5. Landlord shall provide janitorial services five days per week, equivalent to that
furnished in comparable buildings, and window washing as reasonably required; provided, however,
that Tenant shall pay for any additional or unusual janitorial services required by reason of any
nonstandard improvements in the Premises, including without limitation wall coverings and floor
coverings installed by or for Tenant, or by reason of any use of Premises other than exclusively as
offices. The cleaning services provided by Landlord shall also exclude refrigerators, eating
utensils (plates, drinking containers and silverware), and interior glass partitions. Tenant shall
pay to Landlord the cost of removal of any of Tenant’s refuse and rubbish, to the extent that they
exceed the refuse and rubbish usually attendant with general office usage.



1









 





     6. Tenant shall have access to the Building 24 hours per day, 7 days per week, 52 weeks per
year; provided that Landlord may install access control systems as it deems advisable for the
Building. Such systems may, but need not, include full or part-time lobby supervision, the use of
a sign-in sign-out log, a card identification access system, building parking and access pass
system, closing hours procedures, access control stations, fire stairwell exit door alarm system,
electronic guard system, mobile paging system, elevator control system or any other access
controls. In the event that Landlord elects to provide any or all of those services, Landlord may
discontinue providing them at any time with or without notice. Landlord may impose a reasonable
charge for access control cards and/or keys issued to Tenant. Landlord shall have no liability to
Tenant for the provision by Landlord of improper access control services, for any breakdown in
service, or for the failure by Landlord to provide access control services. Tenant further
acknowledges that Landlord’s access systems may be temporarily inoperative during building
emergency and system repair periods. Tenant agrees to assume responsibility for compliance by its
employees with any regulations established by Landlord with respect to any card key access or any
other system of building access as Landlord may establish. Tenant shall be liable to Landlord for
any loss or damage resulting from its or its employees use of any access system.



     7. The costs of operating, maintaining and repairing any supplemental air conditioning unit
serving only the Premises shall be borne solely by Tenant. Such costs shall include all metered
electrical charges as described above in this Exhibit, together with the cost, as reasonably
estimated by Landlord, to supply cooling water or other means of heat dissipation for the unit.
Should Tenant desire to install such a unit, the plans and specifications must be submitted in
advance to Landlord and approved in writing by Landlord. Such installation shall be at Tenant’s
sole expense and shall include installation of a separate meter for the operation of the unit.
Landlord may require Tenant to remove at Lease expiration any such unit installed by or for Tenant
and to repair any resulting damage to the Premises or Building.




2









 








EXHIBIT C




PARKING




     The following parking regulations shall be in effect at the Building. Landlord reserves the
right to adopt reasonable, nondiscriminatory modifications and additions to the regulations by
written notice to Tenant. In the case of any conflict between these regulations and the Lease, the
Lease shall be controlling.



     1. Landlord agrees to maintain, or cause to be maintained, an automobile parking area
(“Parking Area”) in reasonable proximity to the Building for the benefit and use of the visitors
and patrons and, except as otherwise provided, employees of Tenant, and other tenants and occupants
of the Building. The Parking Area shall include, whether in a surface parking area or a parking
structure, the automobile parking stalls, driveways, entrances, exits, sidewalks and attendant
pedestrian passageways and other areas designated for parking. Landlord shall have the right and
privilege of determining the nature and extent of the automobile Parking Area, whether it shall be
surface, underground or other structure, and of making such changes to the Parking Area from time
to time which in its opinion are desirable and for the best interests of all persons using the
Parking Area. Landlord shall keep the Parking Area in a neat, clean and orderly condition, and
shall repair any damage to its facilities. Landlord shall not be liable for any damage to motor
vehicles of visitors or employees, for any loss of property from within those motor vehicles, or
for any injury to Tenant, its visitors or employees, unless ultimately determined to be caused by
the sole active negligence or willful misconduct of Landlord. Unless otherwise instructed by
Landlord, every parker shall park and lock his or her own motor vehicle. Landlord shall also have
the right to establish, and from time to time amend, and to enforce against all users of the
Parking Area all reasonable rules and regulations (including the designation of areas for employee
parking) as Landlord may deem necessary and advisable for the proper and efficient operation and
maintenance of the Parking Area. Garage managers or attendants are not authorized to make or allow
any exceptions to these regulations.



     2. Landlord may, if it deems advisable in its sole discretion, charge for parking and may
establish for the Parking Area a system or systems of permit parking for Tenant, its employees and
its visitors, which may include, but not be limited to, a system of charges against nonvalidated
parking, verification of users, a set of regulations governing different parking locations, and an
allotment of reserved or nonreserved parking spaces based upon the charges paid and the identity of
users. In no event shall Tenant or its employees park in reserved stalls leased to other tenants
or in stalls within designated visitor parking zones, nor shall Tenant or its employees utilize
more than the number of parking stalls allotted in this Lease to Tenant. It is understood that
Landlord shall not have any obligation to cite improperly parked vehicles or otherwise attempt to
enforce reserved parking rules during hours when parking attendants are not present at the Parking
Area. Tenant shall comply with such system in its use (and in the use of its visitors, patrons and
employees) of the Parking Area, provided, however, that the system and rules and regulations shall
apply to all persons entitled to the use of the Parking Area, and all charges to Tenant for use of
the Parking Area shall be no greater than Landlord’s then current scheduled charge for parking.



     3. Tenant shall, upon request of Landlord from time to time, furnish Landlord with a list of
its employees’ names and of Tenant’s and its employees’ vehicle license numbers. Tenant agrees to
acquaint its employees with these regulations and assumes responsibility for compliance by its
employees with these parking provisions, and shall be liable to Landlord for all unpaid parking
charges incurred by its employees. Any amount due from Tenant shall be deemed additional rent.
Tenant authorizes Landlord to tow away from the Building any vehicle belonging to Tenant or
Tenant’s employees parked in violation of these provisions, and/or to attach violation stickers or
notices to those vehicles. In the event Landlord elects or is required to limit or control parking
by tenants, employees, visitors or invitees of the Building, whether by validation of parking
tickets, parking meters or any other method of assessment, Tenant agrees to participate in the
validation or assessment program under reasonable rules and regulations as are established by
Landlord and/or any applicable governmental agency.



     4. Landlord may establish an identification system for vehicles of Tenant and its employees
which may consist of stickers, magnetic parking cards or other parking access devices supplied by
Landlord. All such parking access devices shall remain the property of Landlord, shall be
displayed as required by Landlord or upon request and may not be mutilated or obliterated in any
manner. Those devices shall not be transferable and any such device in the possession of an
unauthorized holder shall be void and may be confiscated. Landlord may impose a reasonable fee for
access devices and a replacement charge for devices which are lost or stolen. Each access device
shall be returned to Landlord promptly following the Expiration Date or sooner termination of this
Lease. Loss or theft of parking access devices shall be reported to Landlord or its Parking Area
operator immediately and a written report of the loss filed if requested by Landlord or its Parking
Area operator.



     5. Persons using the Parking Area shall observe all directional signs and arrows and any
posted speed limits. Unless otherwise posted, in no event shall the speed limit of 5 miles per
hour be exceeded. All vehicles shall be parked entirely within painted stalls, and no vehicles
shall be



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parked in areas which are posted or marked as “no parking” or on or in ramps, driveways and
aisles. Only one vehicle may be parked in a parking space. In no event shall Tenant interfere
with the use and enjoyment of the Parking Area by other tenants of the Building or their employees
or invitees.



     6. Parking Areas shall be used only for parking vehicles. Washing, waxing, cleaning or
servicing of vehicles, or the parking of any vehicle on an overnight basis, in the Parking Area
(other than emergency services) by any parker or his or her agents or employees is prohibited
unless otherwise authorized by Landlord. Tenant shall have no right to install any fixtures,
equipment or personal property (other than vehicles) in the Parking Area, nor shall Tenant make any
alteration to the Parking Area.



     7. It is understood that the employees of Tenant and the other tenants of Landlord within
the Building and Project shall not be permitted to park their automobiles in the portions of the
Parking Area which may from time to time be designated for patrons of the Building and/or Project
and that Landlord shall at all times have the right to establish rules and regulations for employee
parking. Landlord shall lease to Tenant, and Tenant shall be obligated to lease from Landlord for
the Term of this Lease, the total number of vehicle parking spaces set forth in Item 12 of the
Basic Lease Provisions (the “Allotted Stalls”). Tenant shall pay to Landlord for the lease of the
Allotted Stalls the monthly amounts as Landlord shall from time to time determine; provided that
the monthly amount for each Allotted Stall shall be fixed for the period commencing on March 1,
2008 and ending on February 28, 2009 at seventy-five dollars ($75.00) per Allotted Stall. Should
any monthly parking charge not be paid within five (5) days following the date due, then a late
charge shall be payable by Tenant equal to the greater of (i) five percent (5%) of the delinquent
installment or (ii) One Hundred Dollars ($100.00), which late charge shall be separate and in
addition to any late charge that may be assessed pursuant to Section 14.3 of the Lease for other
than delinquent monthly parking charges. Landlord may authorize persons other than those described
above, including occupants of other buildings, to utilize the Parking Area. In the event of the
use of the Parking Area by other persons, those persons shall pay for that use in accordance with
the terms established above; provided, however, Landlord may allow those persons to use the Parking
Area on weekends, holidays, and at other non-office hours without payment.



     8. Notwithstanding the foregoing paragraphs 1 through 7, Landlord shall be entitled to pass
on to Tenant its proportionate share of any charges or parking surcharge or transportation
management costs levied by any governmental agency. The foregoing parking provisions are further
subject to any governmental regulations which limit parking or otherwise seek to encourage the use
of carpools, public transit or other alternative transportation forms or traffic reduction
programs. Tenant agrees that it will use its best efforts to cooperate, including registration and
attendance, in programs which may be undertaken to reduce traffic. Tenant acknowledges that as a
part of those programs, it may be required to distribute employee transportation information,
participate in employee transportation surveys, allow employees to participate in commuter
activities, designate a liaison for commuter transportation activities, distribute commuter
information to all employees, and otherwise participate in other programs or services initiated
under a transportation management program.



     9. Should any parking spaces be allotted by Landlord to Tenant, either on a reserved or
nonreserved basis, Tenant shall not assign or sublet any of those spaces, either voluntarily or by
operation of law, without the prior written consent of Landlord, except in connection with an
authorized assignment of this Lease or subletting of the Premises.




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EXHIBIT D




TENANT’S INSURANCE




     The following requirements for Tenant’s insurance shall be in effect at the Building, and
Tenant shall also cause any subtenant to comply with the requirements. Landlord reserves the right
to adopt reasonable nondiscriminatory modifications and additions to these requirements. Tenant
agrees to obtain and present evidence to Landlord that it has fully complied with the insurance
requirements.



     1. Tenant shall, at its sole cost and expense, commencing on the date Tenant is given
access to the Premises for any purpose and during the entire Term, procure, pay for and keep in
full force and effect: (i) commercial general liability insurance with respect to the Premises and
the operations of or on behalf of Tenant in, on or about the Premises, including but not limited to
coverage for personal injury, contractual liability, independent contractors, broad form property
damage, fire legal liability, products liability (if a product is sold from the Premises), and
liquor law liability (if alcoholic beverages are sold, served or consumed within the Premises),
which policy(ies) shall be written on an “occurrence” basis and for not less than $2,000,000
combined single limit (with a $50,000 minimum limit on fire legal liability) per occurrence for
bodily injury, death, and property damage liability, or the current limit of liability carried by
Tenant, whichever is greater, and subject to such increases in amounts as Landlord may determine
from time to time; (ii) workers’ compensation insurance coverage as required by law, together with
employers’ liability insurance coverage of at least $1,000,000; (iii) with respect to improvements,
alterations, and the like required or permitted to be made by Tenant under this Lease, builder’s
risk insurance, in an amount equal to the replacement cost of the work; (iv) insurance against
fire, vandalism, malicious mischief and such other additional perils as may be included in a
standard “special form” policy, insuring all Tenant Installations, trade fixtures, furnishings,
equipment and items of personal property in the Premises, in an amount equal to not less than
ninety percent (90%) of their actual replacement cost (with replacement cost endorsement), which
policy shall also include business interruption coverage in an amount sufficient to cover one (1)
year of loss. In no event shall the limits of any policy be considered as limiting the liability
of Tenant under this Lease.



     2. All policies of insurance required to be carried by Tenant pursuant to this Exhibit
shall be written by responsible insurance companies authorized to do business in the State of
California and with a general policyholder rating of not less than “A-” and financial rating of not
less than “VIII” in the most current Best’s Insurance Report. The deductible or other retained
limit under any policy carried by Tenant shall be commercially reasonable, and Tenant shall be
responsible for payment of such retained limit with full waiver of subrogation in favor of
Landlord. Any insurance required of Tenant may be furnished by Tenant under any blanket policy
carried by it or under a separate policy. A certificate of insurance, certifying that the policy
has been issued, provides the coverage required by this Exhibit and contains the required
provisions, together with endorsements acceptable to Landlord evidencing the waiver of subrogation
and additional insured provisions required below, shall be delivered to Landlord prior to the date
Tenant is given the right of possession of the Premises. Proper evidence of the renewal of any
insurance coverage shall also be delivered to Landlord not less than thirty (30) days prior to the
expiration of the coverage. In the event of a loss covered by any policy under which Landlord is
an additional insured, Landlord shall be entitled to review a copy of such policy.



     3. Each policy evidencing insurance required to be carried by Tenant pursuant to this
Exhibit shall contain the following provisions and/or clauses satisfactory to Landlord: (i) with
respect to Tenant’s commercial general liability insurance, a provision that the policy and the
coverage provided shall be primary and that any coverage carried by Landlord shall be excess of and
noncontributory with any policies carried by Tenant, together with a provision including Landlord,
The Irvine Company LLC, and any other parties in interest designated by Landlord as additional
insureds; (ii) except with respect to Tenant’s commercial general liability insurance, a waiver by
the insurer of any right to subrogation against Landlord, its agents, employees, contractors and
representatives which arises or might arise by reason of any payment under the policy or by reason
of any act or omission of Landlord, its agents, employees, contractors or representatives; and
(iii) a provision that the insurer will not cancel or change the coverage provided by the policy
without first giving Landlord thirty (30) days prior written notice. Tenant shall also name
Landlord as an additional insured on any excess or umbrella liability insurance policy carried by
Tenant.



     4. In the event that Tenant fails to procure, maintain and/or pay for, at the times and for
the durations specified in this Exhibit, any insurance required by this Exhibit, or fails to carry
insurance required by any governmental authority, Landlord may at its election procure that
insurance and pay the premiums, in which event Tenant shall repay Landlord all sums paid by
Landlord, together with interest at the maximum rate permitted by law and any related costs or
expenses incurred by Landlord, within ten (10) days following Landlord’s written demand to Tenant.


NOTICE TO TENANT: IN ACCORDANCE WITH THE TERMS OF THIS LEASE, TENANT MUST PROVIDE EVIDENCE OF THE
REQUIRED INSURANCE TO LANDLORD’S MANAGEMENT AGENT PRIOR TO BEING AFFORDED ACCESS TO THE PREMISES.





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EXHIBIT E




RULES AND REGULATIONS




     The following Rules and Regulations shall be in effect at the Building. Landlord reserves the
right to adopt reasonable nondiscriminatory modifications and additions at any time. In the case
of any conflict between these regulations and the Lease, the Lease shall be controlling.



     1. Except with the prior written consent of Landlord, or unless otherwise specifically
authorized in this Lease, Tenant shall not sell or permit the retail sale of goods or services in
or from the Premises, nor shall Tenant allow the Premises to be utilized for any manufacturing or
medical practice.



     2. The sidewalks, halls, passages, elevators, stairways, and other common areas shall not
be obstructed by Tenant or used by it for storage, for depositing items, or for any purpose other
than for ingress to and egress from the Premises. The halls, passages, entrances, elevators,
stairways, balconies and roof are not for the use of the general public, and Landlord shall in all
cases retain the right to control and prevent access to those areas of all persons whose presence,
in the judgment of Landlord, shall be prejudicial to the safety, character, reputation and
interests of the Building and its tenants. Should Tenant have access to any balcony or patio area,
Tenant shall not place any furniture or other personal property in such area without the prior
written approval of Landlord. Nothing contained in this Lease shall be construed to prevent access
to persons with whom Tenant normally deals only for the purpose of conducting its business on the
Premises (such as clients, customers, office suppliers and equipment vendors and the like) unless
those persons are engaged in illegal activities. Neither Tenant nor any employee or contractor of
Tenant shall go upon the roof of the Building without the prior written consent of Landlord.



     3. The sashes, sash doors, windows, glass lights, solar film and/or screen, and any lights
or skylights that reflect or admit light into the halls or other places of the Building shall not
be covered or obstructed. The toilet rooms, water and wash closets and other water apparatus shall
not be used for any purpose other than that for which they were constructed, and no foreign
substance of any kind shall be thrown in those facilities, and the expense of any breakage,
stoppage or damage resulting from the violation of this rule shall be borne by Tenant.



     4. No sign, advertisement or notice visible from the exterior of the Premises shall be
inscribed, painted or affixed by Tenant on any part of the Building or the Premises without the
prior written consent of Landlord. If Landlord shall have given its consent at any time, whether
before or after the execution of this Lease, that consent shall in no way operate as a waiver or
release of any of the provisions of this Lease, and shall be deemed to relate only to the
particular sign, advertisement or notice so consented to by Landlord and shall not be construed as
dispensing with the necessity of obtaining the specific written consent of Landlord with respect to
any subsequent sign, advertisement or notice. If Landlord, by a notice in writing to Tenant, shall
object to any curtain, blind, tinting, shade or screen attached to, or hung in, or used in
connection with, any window or door of the Premises, the use of that curtain, blind, tinting, shade
or screen shall be immediately discontinued and removed by Tenant. No awnings shall be permitted
on any part of the Premises. No antenna or satellite dish shall be installed by Tenant that is
either located or visible from outside the Premises without the prior written agreement of
Landlord.



     5. Tenant shall not do or permit anything to be done in the Premises, or bring or keep
anything in the Premises, which shall in any way increase the rate of fire insurance on the
Building, or on the property kept in the Building, or obstruct or interfere with the rights of
other tenants, or in any way injure or annoy them, or conflict with the regulations of the Fire
Department or the fire laws, or with any insurance policy upon the Building, or any portion of the
Building or its contents, or with any rules and ordinances established by the Board of Health or
other governmental authority.



     6. The installation and location of any unusually heavy equipment in the Premises,
including without limitation file storage units, safes and electronic data processing equipment,
shall require the prior written approval of Landlord. Landlord may restrict the weight and
position of any equipment that may exceed the weight load limits for the structure of the Building,
and may further require, at Tenant’s expense, the reinforcement of any flooring on which such
equipment may be placed and/or an engineering study to be performed to determine whether the
equipment may safely be installed in the Building and the necessity of any reinforcement. The
moving of large or heavy objects shall occur only between those hours as may be designated by, and
only upon previous written notice to, Landlord, and the persons employed to move those objects in
or out of the Building must be reasonably acceptable to Landlord. Without limiting the generality
of the foregoing, no freight, furniture or bulky matter of any description shall be received into
or moved out of the lobby of the Building or carried in any elevator other than the freight
elevator designated by Landlord unless approved in writing by Landlord.



     7. Landlord shall clean the Premises as provided in the Lease, and except with the written
consent of Landlord, no person or persons other than those approved by Landlord will be permitted
to enter the Building for that purpose. Tenant shall not cause unnecessary labor by reason of



1









 







Tenant’s carelessness and indifference in the preservation of good order and cleanliness.
Landlord shall not be responsible to Tenant or its employees for loss or damage to property in
connection with the provision of janitorial services by third party contractors.



     8. Tenant shall not sweep or throw, or permit to be swept or thrown, from the Premises any
dirt or other substance into any of the corridors or halls or elevators, or out of the doors or
windows or stairways of the Building, and Tenant shall not use, keep or permit to be used or kept
any foul or noxious gas or substance in the Premises, or permit or suffer the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or other occupants of the
Building by reason of noise, odors and/or vibrations, or interfere in any way with other tenants or
those having business with other tenants, nor shall any animals or birds be kept by Tenant in or
about the Building. Neither Tenant nor its employees, agents, contractors, invitees or licensees
shall bring any firearm, whether loaded or unloaded, into the Project at any time. Smoking or
carrying of lighted cigars, cigarettes, pipes or similar products anywhere within the Premises or
Building is strictly prohibited, and Landlord may enforce such prohibition pursuant to Landlord’s
leasehold remedies. Smoking is permitted outside the Building and within the project only in areas
designated by Landlord.



     9. No cooking shall be done or permitted by Tenant on the Premises, except pursuant to the
normal use of a U.L. approved microwave oven and coffee maker for the benefit of Tenant’s employees
and invitees, nor shall the Premises be used for the storage of merchandise or for lodging. Any
pipes or tubing used by Tenant to transmit water to an appliance or device in the Premises must be
made of copper or stainless steel, and in no event shall plastic tubing be used for that purpose.



     10. Tenant shall not use or keep in the Building any kerosene, gasoline, or inflammable
fluid or any other illuminating material, or use any method of heating other than that supplied by
Landlord.



     11. If Tenant desires telephone, telegraph, burglar alarm or similar connections, Landlord
will direct electricians as to where and how the wires are to be introduced. No boring or cutting
for wires or otherwise shall be made without directions from Landlord.



     12. Upon the termination of its tenancy, Tenant shall deliver to Landlord all the keys to
offices, rooms and toilet rooms and all access cards which shall have been furnished to Tenant or
which Tenant shall have had made.



     13. Tenant shall not mark, drive nails, screw or drill into the partitions, woodwork or
plaster or in any way deface the Premises, except to install normal wall hangings. Tenant shall
not affix any floor covering to the floor of the Premises in any manner except by a paste, or other
material which may easily be removed with water, the use of cement or other similar adhesive
materials being expressly prohibited. The method of affixing any floor covering shall be subject
to approval by Landlord. The expense of repairing any damage resulting from a violation of this
rule shall be borne by Tenant.



     14. On Saturdays, Sundays and legal holidays, and on other days between the hours of 6:00
p.m. and 8:00 a.m., access to the Building, or to the halls, corridors, elevators or stairways in
the Building, or to the Premises, may be refused unless the person seeking access complies with any
access control system that Landlord may establish. Landlord shall in no case be liable for damages
for the admission to or exclusion from the Building of any person whom Landlord has the right to
exclude under Rules 2 or 18 of this Exhibit. In case of invasion, mob, riot, public excitement, or
other commotion, or in the event of any other situation reasonably requiring the evacuation of the
Building, Landlord reserves the right at its election and without liability to Tenant to prevent
access to the Building by closing the doors or otherwise, for the safety of the tenants and
protection of property in the Building.



     15. Tenant shall be responsible for protecting the Premises from theft, which includes
keeping doors and other means of entry closed and securely locked. Tenant shall cause all water
faucets or water apparatus to be shut off before Tenant or Tenant’s employees leave the Building,
and that all electricity, gas or air shall likewise be shut off, so as to prevent waste or damage,
and for any default or carelessness Tenant shall make good all injuries sustained by other tenants
or occupants of the Building or Landlord.



     16. Tenant shall not alter any lock or install a new or additional lock or any bolt on any
door of the Premises without the prior written consent of Landlord. If Landlord gives its consent,
Tenant shall in each case promptly furnish Landlord with a key for any new or altered lock. Tenant,
shall not, however, be required to provide Landlord with a key to any new or altered lock that
would allow Landlord access to file rooms and other locations containing confidential information
or valuable assets of Tenant or Tenant’s banking customers and Landlord shall not be required to
provide janitorial services for such areas that Landlord does not have access to.



     17. Tenant shall not install equipment, such as but not limited to electronic tabulating or
computer equipment, requiring electrical or air conditioning service in excess of that to be
provided by Landlord under the Lease except in accordance with Exhibit B.



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     18. Landlord shall have full and absolute authority to regulate or prohibit the entrance to
the Premises of any vendor, supplier, purveyor, petitioner, proselytizer or other similar person
if, in the good faith judgment of Landlord, such person will be involved in general solicitation
activities, or the proselytizing, petitioning, or disturbance of other tenants or their customers
or invitees, or engaged or likely to engage in conduct which may in Landlord’s opinion distract
from the use of the Premises for its intended purpose. Notwithstanding the foregoing, Landlord
reserves the absolute right and discretion to limit or prevent access to the Buildings by any food
or beverage vendor, whether or not invited by Tenant, and Landlord may condition such access upon
the vendor’s execution of an entry permit agreement which may contain provisions for insurance
coverage and/or the payment of a fee to Landlord.



     19. Tenant shall, at its expense, be required to utilize the third party contractor
designated by Landlord for the Building to provide any telephone wiring services from the minimum
point of entry of the telephone cable in the Building to the Premises.



     20. Tenant shall, upon request by Landlord, supply Landlord with the names and telephone
numbers of personnel designated by Tenant to be contacted on an after-hours basis should
circumstances warrant.



     21. Tenant shall cause its employees and agents, and shall endeavor to instruct its
invitees, to wear attire suitable for a first class office project while such persons are in the
Building or Project.



     22. Landlord may from time to time grant tenants individual and temporary variances from
these Rules, provided that any variance does not have a material adverse effect on the use and
enjoyment of the Premises by Tenant.



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EXHIBIT E




IRREVOCABLE STANDBY LETTER OF CREDIT




	 	 	 	 	 	 	 
	 

	 	Number:	 	 

	 	 
	 

	 	Date:	 	 

	 	 
	 

	 	Amount:	 	 

	 	 
	 

	 	Expiration:	 	 

	 	 






	 	 	 	 	 
	 

	 	BENEFICIARY
	 	ACCOUNT PARTY
	 
	 	 	 	 
	 

	 	The Irvine Company	 	 
	 

	 	550 Newport Center Drive
	 	                                                            
	 

	 	Newport Beach, CA 92660
	 	                                                            
	 

	 	Attn: Vice President, Operations,
	 	                                                            
	 

	 	          Office Properties	 	 





We hereby issue our Irrevocable Letter of Credit No.                      in favor of UTC
Properties LLC (“Beneficiary”), its successors and assigns, for the account of                                         . We undertake to honor your sight draft, upon presentation at our
office in                     , California, for any sum or sums not to exceed a total
of                                          ($                    ) in favor of
Beneficiary when accompanied by the original of this Letter of Credit.



Partial and multiple drawings are permitted under this Letter of Credit. In the event of a partial
draw, the amount of the draft shall be endorsed on the reverse side hereof by the negotiating bank.



This Letter of Credit is transferable in its entire undrawn balance to a successor beneficiary upon
presentation by Beneficiary of the original of this Letter of Credit, together with a written
request for transfer executed by Beneficiary.



It is a condition of this Letter of Credit that it shall remain enforceable against us for a period
of from this date and further, that it shall be deemed automatically extended
for successive one-year periods without amendment thereafter unless thirty (30) days prior to the
expiration date set forth above, or within thirty (30) days prior to the end of any yearly
Anniversary Date thereafter, you shall receive our notice in writing by certified mail, return
receipt requested, that we elect not to renew this Letter of Credit for any subsequent year.



The draft must be marked “Drawn under                                          Letter of Credit No.
                     dated                     .”



There are no other conditions of this letter of credit. Except so far as otherwise stated, this
credit is subject to the International Standby Practices 1998, International Chamber of Commerce
Publication No. 590, and is otherwise governed by the law of the State of California.




	 	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 






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EXHIBIT G




DEPICTION OF BUILDING SIGN




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EXHIBIT X




WORK LETTER




I. TENANT IMPROVEMENTS





The tenant improvement work (“Tenant Improvements”) shall consist of any work required to
complete the Premises pursuant to approved plans and specifications. Tenant shall employ
its own architect and general contractor in constructing the Tenant Improvements. Landlord
hereby approves H2K and Maggetti Elam as Tenant’s architects. The general contractor shall
be selected and engaged by Tenant on the basis of a competitive bid involving one general
contractor designated by Landlord and up to two (2) other general contractors approved in
writing by Landlord or two (2) general contractors designated by Landlord and one (1)
general contractor designated by Tenant and approved in writing by Landlord.
Notwithstanding the foregoing, Landlord pre-approves Starrett Construction as the general
contractor. The work shall be undertaken and prosecuted in accordance with the following
requirements:




	 	A.	 	Concurrently with sign-off by Tenant, the space plans, construction drawings
and specifications for all improvements and finishes, together with any changes
thereto, shall be submitted to Landlord (with samples as required) for review and
approval by Landlord and its architect for the Project. In lieu of disapproving an
item, Landlord may approve same on the condition that Tenant pay to Landlord, prior to
the start of construction and in addition to all sums otherwise due hereunder, an
amount equal to the cost, as reasonably estimated by Landlord, of removing and
replacing the item upon the expiration or termination of the Lease. Should Landlord
approve work that would necessitate any ancillary Building modification or other
expenditure by Landlord, then except to the extent of any remaining balance of the
“Landlord Contribution” as described below, Tenant shall, in addition to its other
obligations herein, promptly fund the cost thereof to Landlord.
	 
	 	B.	 	All construction drawings prepared by Tenant’s architect shall follow
Landlord’s CAD standards, which standards shall be provided to Tenant or its architect
upon request.
	 
	 	C.	 	Landlord shall, subject to the foregoing, approve or disapprove any submittal
of plans or specifications by Tenant within five (5) business days following receipt
thereof by Landlord.
	 
	 	D.	 	Tenant shall use the electrical, mechanical, plumbing and fire/life safety
engineers and subcontractors designated by Landlord. All other subcontractors shall
be subject to Landlord’s reasonable approval, and Landlord may require that one or
more designated subtrades be union contractors.
	 
	 	E.	 	Tenant shall deliver to Landlord a copy of the final application for permit
and issued permit for the construction work.
	 
	 	F.	 	Tenant’s general contractor and each of its subcontractors shall comply with
Landlord’s requirements as generally imposed on third party contractors, including
without limitation all insurance coverage requirements and the obligation to furnish
appropriate certificates of insurance to Landlord prior to commencement of
construction.
	 
	 	G.	 	A construction schedule shall be provided to Landlord prior to commencement
of the construction work, and weekly updates shall be supplied during the progress of
the work.
	 
	 	H.	 	Tenant shall give Landlord ten (10) days prior written notice of the
commencement of construction so that Landlord may cause an appropriate notice of
non-responsibility to be posted.
	 
	 	I.	 	Tenant and its general contractor shall attend weekly job meetings with
Landlord’s construction manager for the Project.
	 
	 	J.	 	Upon completion of the work, Tenant shall cause to be provided to Landlord
(i) as-built drawings of the Premises signed by Tenant’s architect, (ii) CAD files of
the improved space compatible with Landlord’s CAD standards, (iii) a final punchlist
signed by Tenant, (iv) final and unconditional lien waivers from all contractors and
subcontractors, (v) a duly recorded Notice of Completion of the improvement work, and
(vi) a certificate of occupancy for the Premises (collectively, the “Close-out
Package”). Should Tenant fail to provide complete CAD files compatible with
Landlord’s standards as required herein, Landlord may cause its architect to




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	 	 	 	prepare same and the cost thereof shall be reimbursed to Landlord by Tenant within
ten (10) days of invoice therefor.
	 
	 	K.	 	The work shall be prosecuted at all times in accordance with all state,
federal and local laws, regulations and ordinances, including without limitation all
OSHA and other safety laws.
	 
	 	L.	 	All of the provisions of this Lease shall apply to any activity of Tenant,
its agents and contractors, in the Premises prior to the Commencement Date, except for
the obligation of Tenant to pay rent.






Landlord shall not be liable in any way for any injury, loss or damage which may occur to
any work performed by Tenant, nor shall Landlord be responsible for repairing any defective
condition therein. In no event shall Tenant’s failure to complete the Tenant Improvements
extend the Commencement Date of the Lease.



II. COST OF THE WORK





	 	A.	 	Landlord shall provide to Tenant a tenant improvement allowance in the amount
of One Hundred Seventy-Three Thousand Five Hundred Dollars ($173,500.00) (the
“Landlord Contribution”), with any excess cost to be borne solely by Tenant. The
Landlord Contribution shall also be utilized to fund space planning and other
architectural costs (including the reasonable cost charged by Landlord’s architect to
review Tenant’s drawings and CAD files), construction costs and plan check and permit
fees. It is understood that Landlord shall be entitled to a supervision/administrative
fee equal to five percent (5%) of such costs, which fee shall be paid from the
Landlord Contribution. If the actual cost of completion of the Tenant Improvements is
less than the maximum amount provided for the Landlord Contribution, such savings
shall inure to the benefit of Landlord and Tenant shall not be entitled to any credit
or payment or to apply the savings toward additional work. Tenant understands and
agrees that any portion of the Landlord Contribution not utilized by Tenant by June 30
,2008, shall inure to the benefit of Landlord and Tenant shall not be entitled to any
credit or payment.
	 
	 	B.	 	Landlord shall fund the Landlord Contribution (less deductions for the
above-described supervision fee and charges of Landlord’s architect) in installments
as and when costs are incurred and a payment request therefor is submitted by Tenant.
Each payment request shall include a copy of all supporting invoices, unconditional
progress payment lien waivers (in the form prescribed by the California Civil Code),
and pertinent back-up (including copies of Tenant’s payment checks to its contractors
and suppliers). Landlord shall fund the payment request within thirty (30) days
following receipt of the application and supporting materials; provided that a ten
percent (10%) retention shall be held on payments to Tenant until Landlord receives
the complete Close-out Package. The remaining balance of the Landlord Contribution
shall be funded when Landlord receives the complete Close-out Package. Prior to any
payment by Landlord hereunder, Tenant shall provide to Landlord in writing the address
to which such payment is to be delivered, together with a complete copy of the
construction contract(s) for the Tenant Improvements.






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