# LEASE
AGREEMENTSPECIAL NET

1.
Parties. This Lease, dated, for reference purposes only, February 10, 2004  is made by
and between BEI-SCOTT COMPANY (herein called Lessor) and Community  Bank (herein called
Lessee).

2.
Premises. Lessor hereby leases to Lessee and Lessee leases from Lessor for the
term, at the rental, and upon all of the conditions set forth herein, that
certain real property and improvements situated in the County of Santa Cruz,
State of California commonly known as 3110 A Mission Dr. Santa Cruz, Ca. 95062
consisting of approximately 3617 sq.ft. APN# 025-082-26. Lessee by executing
this lease agrees that he has had adequate time to measure and investigate the
subject premises and have them inspected by experts of his choice. In deciding
to enter into this Lease, Lessee is relying solely on the results of his
experience and own investigations and is not relying on any representations or
promises of Lessor or Broker excepting any which may be contained herein. Other
than any improvements or repairs agreed herein to be performed by Lessor, Lessee
hereby accepts the subject premises in their current condition.

Said
real property, including the land and all improvements therein, shall herein be
called the Premises.

3.
Term.

3.1
Term. The term of this Lease shall be for two (2) years commencing on April 15,
2004 (the Commencement Date), and ending on April 14, 2006 unless
sooner terminated pursuant to any provisions hereof.

3.2
Option to Renew. Provided that Lessee is not in default hereunder, either at the
time of exercise or at the time the extended terra commences, Lessee shall have
two (2) options to extend the initial Term of this Lease for two additional five
(5) year terms under terms and conditions to be set by Lessor. Lessee shall
exercise their option by giving Lessor written notice at least sixty (60) days
but not more than one hundred eighty (180) days prior to the expiration of the
initial term of this Lease. Lessor will send Lessee a reminder letter of his
time to renew option within the sixty (60) day period.

3.3  Delay in Possession. Notwithstanding said commencement date, if for any
reason Lessor cannot deliver possession of the Premises to Lessee on said date,
Lessor shall not be subject to any liability therefor, nor shall such failure
affect the validity of this Lease or the obligations of Lessee hereunder or
extend the term hereof, but in such case, Lessee shall not be obligated to pay
rent until possession of the Premises is tendered to Lessee; provided, however,
that if Lessor shall not have delivered possession of the Premises within sixty
(60) days from said commencement date, Lessee may, at Lessees option by
notice in writing to Lessor within ten (10) days thereafter, cancel this Lease,
in which event the parties shall be discharged from all obligations hereunder;
provided further, however, that if such written notice of Lessee is not received
by Lessor within said ten (10) day period, Lessees right to cancel this
Lease hereunder shall terminate and be of no further force or effect.

3.4
Early Possession. If Lessee occupies the Premises prior to said commencement
date, such occupancy shall be subject to all provisions hereof, such occupancy
shall not advance the termination date, and Lessee shall pay rent for such
period at the initial monthly rates set forth as follows:

4.
Rent

4.1
Rent. Lessee shall pay to Lessor as base rent for the Premises, monthly
payments, in advance, on the fifteenth (15th) day of each month of the term
hereof in accordance with the following:

April
15, 2004 to April 14, 2005......$6200.00 per month

April
15, 2005 to increase by currant CPI not to exceed 6%.

Lessee
to pay real property taxes as outlined in Paragraph 10. Lessee to pay
water/sewer, garbage charges as outlined in Paragraph 11.

4.2
Special Net Lease. This Lease is what is commonly called a Net, Net, Net
Lease, it being understood that the Lessor shall receive the rent set
forth in Paragraph 4.1 free and clear of any and all other impositions, taxes
andliens connected with the ownership and operation of the
Premises. It is the intention of the parties hereto that this Lease shall not be
terminable for any reason by the Lessee, and that Lessee shall in no event be
entitled to any abatement of or reduction in rent payable under this Lease,
except as herein expressly provided. Any present or future law to the contrary
shall not alter this agreement of the parties.

5.
Security Deposit. Lessee shall deposit with Lessor upon execution hereof  $10,000.00 as
security for Lessees faithful performance of Lessees  obligations hereunder.
If lessee fails to pay rent or other charges due  hereunder, or otherwise defaults with
respect to any provision of this Lease,  Lessor may use, apply or retain all or any
portion of said deposit for the  payment of any rent or other charge in default or for
the payment of any other  sum to which Lessor may become obligated by reason of Lessees
default, or  to compensate Lessor for any loss or damage which Lessor may suffer thereby.
If  Lessor so uses or applies all or any portion of said deposit, Lessee shall  within
ten (10) days after written demand therefor deposit cash with Lessor in  an amount
sufficient to restore said deposit to the full amount hereinafter  stated and Lessees
failure to do so shall be a material breach of this  Lease. Lessor shall not be required
to keep said deposit separate from its  general accounts. If Lessee performs all of Lessees
obligations hereunder,  said deposit, or so much thereof as has not theretofore been
applied by Lessor,  shall be returned, without payment of interest or other increments
for its use,  to Lessee (or, at Lessors option, to the last assignee, if any, or
Lessees interest hereunder) at the expiration of the term hereof, and  after Lessee
has vacated the Premises. No trust relationship is created herein  between Lessor and
Lessee with respect to said Security Deposit.

6.
Use.

6.1
Use. The Premises shall be used and occupied only for use as a Bank and Savings
& Loan Office and for no other purpose.

6.2
Compliance with Law.

(a)
Lessee shall, at Lessees expense, comply promptly with all applicable
statutes, ordinances, rules, regulations, orders, covenants arid restrictions of
record, and requirements in effect during the term or any part of the term
hereof, regulating the use by Lessee of the Premises. Lessee
shall not use nor permit the use of the Premises in any manner that will tend to
create waste or a nuisance of, if there shall be more than one tenant in the
building containing the Premises, shall tend to disturb such other tenants.

6.3
Condition of Premises. Lessee hereby accepts the Premises in its condition
existing as of the Lease commencement date or the date that Lessee takes
possession of the Premises, whichever is earlier, subject to all applicable
zoning, municipal, county and state laws, ordinances and regulations governing
and regulating the use of the Premises, and any covenants or restrictions of
record, and accepts this Lease subject thereto and to all matters disclosed
thereby and by any exhibits attached hereto. Lessee acknowledges that neither
the Lessor, the Broker nor Lessors agent has made any representation or
warranty as to the present or future suitability of the Premises for the conduct
of Lessee s business.

7.
Maintenance, Repairs and Alterations.

7.1
Lessees Obligations. Lessee shall keep in good order the condition and
repair by repairing any damage due to his usage and/or neglect of the Premises
including, all plumbing, heating, air conditioning, ventilating, electrical,
lighting facilities and equipment within the Premises, fixtures, walls
(interior), ceilings, floors, windows, doors, plate glass, skylights, mirrors
located within the Premises, and all signs located on the Premises. Lessee shall
have any cracked and/or broken glass or mirrors replaced within five (5) days
from occurrence of such at their sole cost and liability.

Lessee
is not responsible for roof repairs/maintenance under the following conditions:
1) Lessee shall notify Lessor as soon as discovered of any leak in the roof. If
Lessee fails to notify Lessor of any leak as outlined, then the repair shall be
the responsibility of the Lessee. Lessor will make an attempt to repair the leak
promptly. 2) Lessor shall be held harmless of any damage caused by roof
leak/repairs to Premises or its contents.

7.2
Surrender. On the last day of the term hereof, or on any sooner termination,
Lessee shall surrender the Premises to Lessor in at least the same condition as
when possession was received, and clean and free of debris. Lessee shall repair
any damage to the Premises occasioned by the installation or removal of
Lessees trade fixtures, furnishings and equipment. Notwithstanding
anything to the contrary otherwise stated in this Lease, Lessee shall leave the
air lines, power panels, electrical distribution systems, lighting fixtures,
space heaters, air conditioning, plumbing, and hot water heaters on the Premises
in the same condition as when possession was received and keys returned to
Lessor at 410 May Ave, #1, Santa Cruz, CA 95060. The surrendered premises shall
be in the same condition as when received by Lessee.

7.3
Lessors Rights. If Lessee fails to perform Lessees obligations under
this Paragraph 7, or under any other paragraph of this Lease, Lessor may at its
option (but shall not be required to) enter upon the Premises after ten (10)
days prior written notice to Lessee (except in the case of an emergency),
in which case no notice shall be required), perform such obligations on
Lessees behalf and put the same in good order, condition and repair, and
the cost thereof together with interest thereon at the maximum rate than
allowable by law shall become due and payable as additional rental to Lessor
together with Lessee s next rental installment.

7.4
Lessors Obligations. Lessee expressly waives the benefit of any statute
now or hereinafter in effect which would otherwise afford Lessee the right to
make repairs at Lessors expense or to terminate this Lease because of
Lessors failure to keep the Premises in good order, condition and repair.

7.5
Alterations and Additions.

(a)
Lessee shall not, without Lessors prior written consent make any
alterations, improvements, additions, or Utility Installations in, on or about
the Premises, except for nonstructural alterations not exceeding $2,500.00 in
cumulative costs during the term of this Lease. In any event, whether or not in
excess of $2,500.00 in cumulative cost, Lessee shall make no change or
alteration to the exterior of the Premises nor the exterior of the building (s)
on the Premises without Lessors prior written consent. As used in this
Paragraph 7.5 the term Utility Installation shall mean carpeting,
window coverings, air lines, power panels, electrical distribution systems,
lighting fixtures, space heaters, air conditioning, plumbing, and fencing.

Lessor
may require that Lessee remove any or all of said alterations, improvements,
additions or Utility Installations at the expiration of the term, and restore
the Premises to their prior condition. Lessor may require Lessee to provide
Lessor, at Lessees sole cost and expense, a lien and completion bond in an
amount equal to one and one-half times the estimated cost of such improvements,
to insure Lessor against any liability for mechanics and
materialmens liens and to insure completion of the work. Should Lessee
make any alterations, improvements, additions or Utility Installations without
prior written approval of Lessor, Lessor may require that Lessee remove any or
all of the same.

(b)
Any alterations, improvements, additions or Utility Installations in, or about
the Premises that Lessee shall desire to make and which requires the
consent of the Lessor shall be presented to Lessor in written form, with
proposed detailed plans. If Lessor shall give its consent, the consent shall be
deemed conditioned upon Lessee acquiring a permit to do so from appropriate
governmental agencies, the furnishing of a copy thereof to Lessor prior to the
commencement of the work and the compliance by Lessee of all conditions of said
permit in a prompt and expeditious manner.

(c)
Lessee shall pay, when due, all claims for labor or materials furnished or
alleged to have been furnished to or for Lessee at or for use in the Premises,
which claims are or may be secured by any mechanics or materialmens
lien against the Premises or any interest therein. Lessee shall give
Lessor not less than ten (10) days notice prior to the commencement of any
work in the Premises, and Lessor shall have the right to post notices of
non-responsibility in or on the Premises as provided by law. If Lessee shall, in
good faith, consent the validity of any such lien, claim or demand, then

Lessee
shall, at its sole expense defend itself and Lessor against the same and shall
pay and satisfy any such adverse judgement that may be rendered thereon before
the enforcement thereof against the Lessor or the Premises, upon the condition
that if Lessor shall require, Lessee shall furnish to Lessor a surety bond
satisfactory to Lessor in an amount equal to such contested lien claim or demand
indemnifying Lessor against liability for the same and holding the Premises free
from the effect of such lien or claim. In addition, Lessor may require Lessee to
pay Lessors attorneys fees and costs in participating in such action
if Lessor shall decide it is to its best interest to do so.

(d)
Unless Lessor requires their removal as set forth in Paragraph 7.5 (a), all
alterations, improvements, additions and Utility Installations (whether or not
such Utility Installations constitute trade fixtures of Lessee), which may be
made on the Premises, shall become the property of Lessor
and remain upon and be surrendered with the Premises at the expiration of the
term. Notwithstanding the provisions of this Paragraph 7.5(d), Lessees
machinery and equipment, other than that which is affixed to the Premises, shall
remain the property of Lessee and may be removed by Lessee subject to the
provisions of Paragraph 7.2.

8.
Insurance and Indemnity.

8.1
Indemnity. Lessee covenants with Lessor that Lessor shall not be liable for any
damage or liability of any kind or for any injury to or death of persons or
damage to property of Lessee or any other person during the term of this Lease,
from any cause whatsoever by reason of the use, occupancy and enjoyment of the
Premises by the Lessee or any person thereon or holding under said Lessee and
that Lessee will indemnify and save harmless the Lessor from all liability
whatsoever, on account of any such real or claimed damage or injury and from all
liens, claims and repairs or alterations which the lessee may make upon said
Premises, but the Lessee shall not be liable for damage or injury occasioned by
the negligence of the Lessor and/or its designated agents, servants or employees
unless covered by insurance Lessee is required to provide.

This
obligation to indemnify shall include reasonable attorneys fees and
investigation costs and all other reasonable costs, expenses and liabilities
actually incurred by Lessor from the first notice that any claim or demand is to
be made or may be made.

8.2
Subrogation. The Lessor and Lessee hereby waive any rights each may have against
the other on account of any loss or damage occasioned to Lessor or Lessee, as
the case may be, their respective property, the Premises, or its contents or to
other portions of the multiple tenant building, arising from any risk generally
covered by fire and extended coverage insurance, and the parties each, on behalf
of their respective insurance companies insuring the property of either Lessor
or Lessee against any such loss, waive any right of subrogation that it may have
against Lessor or Lessee, as the case may be, if such waiver is permitted by, or
obtainable from, the respective insurance company.

8.3
Lessee Insurance. Lessee further covenants and agrees from and after the
delivery of the Premises from Lessor to Lessee, Lessee will carry and maintain,
at its sole cost and expense, the following types of insurance, in the amounts
specified and in the form hereinafter provided for:

(1)
COMPREHENSIVE GENERAL LIABILITY INSURANCE: Public liability and property
damage insurance with a combined single limit of not less than Two Million
Dollars ($2,000,000.00) insuring against any and all bodily injury and not less
than Two Million Dollars ($2,000,000.00) for property damage (not to be
construed as Fire Insurance) with respect to said Premises or arising out of the
maintenance, use or occupancy thereof. All such bodily injury liability
insurance and property damage liability insurance shall specifically insure the
performance by Lessee of the indemnity provisions as to liability for injury to
or death of persons and injury or damage to property in this Article 8
contained.

(2)
Fixture & Equipment: Lessee shall have insurance covering all
leasehold improvements, trade fixtures, merchandise and personal property from
time to time in, on or upon the Premises, and personal property of others in
Lessees possession, in an amount not less than the full replacement cost
without deduction for depreciation from time to time during the term of this
Lease, providing protection against any peril included within the classification
Fire and Extended Coverage, together with insurance against
sprinkler damage, vandalism and malicious mischief. Any policy proceeds shall be
used for the repair or replacement of the property damaged or destroyed in or
about the leasehold premises.

(3)
Policy Form: All policies of insurance provided for herein shall be
issued by insurance companies with general policyholders rating of not
less than A and a financial rating of AAA as rated in the most current available
Bests Insurance Reports, and qualified to do business in the
State of California, and shall be issued in the names of Lessor, Lessee and such
other persons or firms as Lessor specifies from time to time. Such policies
shall be for the mutual and joint benefit and protection of Lessor, Lessee and
others hereinabove mentioned, and executed copies of such policies of insurance
or certificates thereof shall be delivered to the Lessor within ten (10) days
after delivery of possession of the Premises to Lessor and thereafter within
thirty (30) days prior to the expiration of the term of each such policy. All
public liability and property damage policies shall contain a provision that the
Lessor, although names as an insured, shall nevertheless be entitled to recovery
under said policies for any loss occasioned to it, its servants, agents and
employees by reason of the negligence of the Lessee. As often as any such policy
shall expire or terminate, renewal or additional policies shall be procured and
maintained by the Lessee in like manner and to like extent. All policies of
insurance delivered to the Lessor must contain a provision that the company
writing said policy will give to the Lessor twenty (20) days notice in
writing in advance of any cancellation or lapse or the effective date of any
reduction in the amounts of insurance. All public liability, property damage and
other casualty policies shall be written as primary policies, not contributing
with and not in excess of coverage which the Lessor may carry.

(4)
Failure of Lessee to Obtain: In the event that Lessee fails to procure
and/or maintain any insurance required by this Article, or fails to carry
insurance required by law or governmental regulation. Lessor may (but without
obligation to do so) at any time or from time to time, and without notice,
procure such insurance and pay the premiums therefor, in which event Lessee
shall repay the Lessor all sums so paid by Lessor, together with interest
thereon as provided in Article 5 hereof, and any incidental costs or expenses
incurred by Lessor in connection therewith including an Administrative charge of
One Hundred Dollars ($100.00), within ten (10) days following Lessors
written demand to Lessee for such payment.

8.4
Blanket Policy. Notwithstanding anything to the contrary contained within this
Article 8, Lessees obligations to carry the insurance provided for herein
may be brought within the coverage of a so-called blanket policy or policies of
insurance carried and maintained by Lessee; provided, however, that Lessor and
others hereinabove mentioned shall be named as an additional assured thereunder
as their interests may appear and that the coverage afforded the Lessor will not
be reduced or diminished by reason of the use of such blanket policy of
insurance, and provided further that the requirements set forth herein are
otherwise satisfied. Lessee agrees to permit the Lessor at all reasonable times
to inspect the policies of insurance of the Lessee covering risks upon the
Premises for which policies or copies thereof are not required to be delivered
to Lessor.

8.5
Fire Insurance.

(1)
Fire Insurance: Lessor shall at Lessees expense during the term
hereof, procure and maintain in force and effect a policy or policies of
standard form of fire with extended coverage insurance covering, or which
covers, the Premises and the improvements thereon (excepting, however, property
to be insured by Lessee as herein provided). At Lessors option, Lessor may
procure endorsements thereon for flood, earthquake, theft and collapse, may
procure business interruption insurance. Lessor shall be the named assured (and
at Lessors option, and any other persons, firms or corporations designated
by Lessor shall be the additionally named assured) under each such policy or
Lessors said insurance. Anything herein contained to the contrary
notwithstanding, Lessor may, at its option bring its insurance requirements
under this Paragraph 8.5 (1) within the coverage of any so-called blanket policy
or policies of fire with extended coverage insurance, in amounts not less than
are required hereunder, covering all or any property or properties wheresoever
situated in which Lessor may have an insurable interest.

(2)
Increased Insurance Risks: Lessee agrees that it will not at any time,
during the term of this Lease, carry any stock or goods or do anything in
or about the Premises which will in any way tend to increase the insurance
rates upon the building of which the Premises are a part. Lessee agrees to
pay to the Lessor forthwith upon demand the amount of any increase in premiums
for insurance against loss by fire that may be charged during the term of this
Lease on the amount of insurance to be carried by Lessor on the building of
which the Premises are a part resulting from the foregoing or from Lessee doing
any act in or about said Premises which does so increase the insurance rates,
whether or not the Lessor shall have consented to such act on the part of the
Lessee. If Lessee installs upon the Premises any electrical equipment which
constitutes an overload on the electrical lines of the Premises, Lessee shall at
its own expense make whatever changes are necessary to comply with the
requirements of the insurance underwriters and any governmental authority having
jurisdiction thereover, but nothing herein contained shall be deemed to
constitute Lessors consent to such overloading.

9.
Termination/Waiver.

9.1
Termination  Advance Payments. Upon termination of this Lease pursuant to
the terms and conditions of this Lease, an equitable adjustment shall be made
concerning advance rent and any advance payments made by Lessee to Lessor.
Lessor shall, in addition, return to Lessee so much of Lessees security
deposit as has not theretofore been applied by Lessor.

9.2
Waiver. Lessee waives the provisions of any statutes which relate to termination
of leases when the space leased is destroyed and agrees that such event shall be
governed by the terms of this Lease.

10.
Taxes. Lessee shall pay prior to delinquency all taxes assessed against and
levied upon trade fixtures, furnishings, equipment and all other personal
property of Lessee contained in the Premises or elsewhere (which may affect the
Premises). When possible, Lessee shall cause said trade fixtures, furnishings,
equipment and all other personal property to be assessed and billed separately
from the real property of Lessor.

If
any of Lessees said personal property shall be assessed with Lessors
real property, Lessee shall pay Lessor the taxes attributable to Lessee within
10 days after receipt of a written statement setting forth the taxes applicable
to Lessees property.

10.1
Real Property Taxes.

Payment
of Taxes. Lessee shall pay the real property tax, as defined in Paragraph 10.2,
applicable to the Premises during the term of this Lease. All such payments
shall be made at least ten (10) days prior to the delinquency date of such
payment. Lessee shall pay Lessor (Lessor will bill Lessee for payment of Real
Property Taxes), and if the amount billed is not received by Lessor at least
ten (10) days prior to the delinquency date, the Lessee shall pay a late charge
of ten percent (10%). If the Lessee gives the Lessor a check that is dishonored
by the bank, the Lessee will pay within three (3) days from receipt of notice by
Lessor of the dishonored bank check the amount owed, a $20.00 dishonored bank
check charge, and the ten percent (10%) late charge will be assessed if the Real
Property Taxes are considered late due to the dishonored bank check. If Lessee
shall fail to pay any such taxes, Lessor shall have the right to pay the same,
in which case Lessee shall repay such amount to Lessor with Lessees next
rent installment together with the interest at the maximum rate then allowable
by law, plus the late charge(s).

Definition
of Real Property Tax. As used herein, the term Real property
tax shall include any form of real estate tax or assessment, general,
special, ordinary or extraordinary, and any license fee, commercial rental tax,
improvement bond or bonds, levy or tax (other than inheritance, personal income
or estate taxes) imposed on the Premises by any authority having the direct or
indirect power to tax including any city, state or federal government, or any
school, agricultural, sanitary, fire, street, drainage
or other improvement district thereof, as against any legal or equitable
interest of Lessor in the Premises or in the real property of which the Premises
are a part, as against Lessors right to rent or other income therefrom,
and as against Lessors business of leasing the Premises. The term
real property tax shall also include any tax, fee, levy, assessment
or charge (i) in substitution of, partially or totally, any tax, fee, levy,
assessment or charge hereinabove included within the definition of real
property tax or (ii) the nature of which was hereinbefore included within the
definition of real property tax or (iii) which is imposed for a
service or right not charged prior to June 1, 1978, or if previously charged,
has been increased since June 1, 1978, or (iv) which is imposed as a result of a
transfer, either partial or total, of Lessors interest in the Premises or
which is added to a tax or charge hereinbefore included with the definition of
real property tax by reason of such transfer, or (v) which is imposed by reason
of this transaction, any modifications or changes hereto, or any transfers
hereof. Notwithstanding anything to the contrary contained herein, special
assessments shall be payable in the maximum legally permissible number of
installments and amortized over the term of this Lease. Notwithstanding anything
to the contrary contained herein, special assessments shall be payable in the
maximum legally permissible number of installments and amortized over the term
of this Lease.

10.2
Joint Assessment. If the Premises are not separately assessed, Lessees
liability shall be an equitable proportion of real property taxes for all of the
land and improvements included within the tax parcel assessed, such proportion
to be determined by Lessor from the respective valuations assigned in the
assessor s work sheets or such other information as may be reasonably
available. Lessors reasonable determination thereof, in good faith, shall
be conclusive.

11.
Utilities. Lessee shall pay for all water, gas, heat, light, power, telephone,
and the removal and disposal of refuse and any other utilities and services
supplied to the Premises, janitorial costs, together with any taxes thereon. If
any such services are not separately metered to Lessee, Lessee shall pay a
reasonable proportion to be determined by Lessor of all charges jointly metered
with other premises.

12.
Assignment and Subletting.

12.1
Lessors Consent Required. (a) Lessee shall not assign this lease or any
right under this lease, nor sublet the premises or any part of the premises,
without Lessors prior written consent, which Lessor shall not unreasonably
withhold. No consent to any assignment of this Lease or to any subletting of the
premises shall constitute a waiver or discharge of the provisions of this
paragraph or a consent to any other assignment of subletting, not shall any such
consent, assignment, or subletting release Lessee from any of Lessees
obligations under this Lease, whether or not performance is then due. None of
Lessees rights or interests under this Lease shall be assignable by any
action of law, including, without limitation, involuntary or voluntary
bankruptcy, and no trustee, sheriff, creditor, purchaser at a judicial sale,
officer of any court, or receiver (unless appointed at Lessors request)
shall acquire any right or interest under this Lease or any right to the
possession or use of the premises or any part thereof, without Lessors
prior written consent. As with the other provisions of this Lease, any violation
of the terms of this paragraph shall constitute a breach of this Lease.

(b)
A request by Lessee for Lessors consent to any assignment of this Lease or
a subletting of the premises shall be made in writing to Lessor at least 60 days
before the proposed effective date of the proposed transfer and shall identify
the proposed transfer as being an assignment or a subletting (also, in the
latter case, describing exactly the premises to be sublet); specify the
proposed effective date; identify each proposed transferee,
including all principals of a corporate or partnership transferee; state all
material terms of the proposed transfer; and specify in detail the kind of
business operation that the proposed transferee intends to operate on the
premises. This notice shall be accompanied by (1) a copy of the proposed
document for effecting the transfer, which shall include, in the case of an
assignment, each transferees express assumption of, and promise to Lessor
to perform, all of the Lessees obligations under the Lease; (2) payment to
Lessor of $500.00 as a deposit towards reimbursement of Lessors costs,
including attorneys fees, an Administrative fee of $50.00 incurred each
time that Lessee requests a transfer, (3) such reasonable financial information
as Lessor may request concerning the proposed subtenant or assignee. Lessee
shall promptly furnish to Lessor any additional information reasonably requested
by Lessor in connection with the proposed transfer. Lessee shall reimburse
Lessor for all costs, including attorneys fees, incurred by reason of the
proposed transfer, and Lessor may withhold Lessors consent to the proposed
transfer until such reimbursement has been made.

13.
Defaults; remedies.

13.1
Defaults. The occurrence of any one or more of the following events shall
constitute a material default and breach of this Lease by Lessee:

(a)
The vacating or abandonment of the Premises by Lessee.

(b)
The failure by Lessee to make any payment of rent or any other payment required
to be made by Lessee hereunder, as and when due, where such failure shall
continue for a period of three days after written notice thereof from Lessor to
Lessee. In the event that Lessor serves Lessee with a Notice to Pay Rent or Quit
pursuant to applicable Unlawful Detainer statutes such Notice to Pay Rent or
Quit shall also constitute the notice required by this subparagraph.

(c)
The failure by Lessee to observe or perform any of the covenants, conditions or
provisions of this Lease to be observed or performed by Lessee, other than
described in Paragraph (b) above, where such failure shall continue for a period
of 30 days after written notice thereof from Lessor to Lessee; provided,
however, that if the nature of Lessees default is such that more than 30
days are reasonably required for its cure, then Lessee shall not be deemed to be
in default if Lessee commenced such cure within said 30-day period and
thereafter diligently prosecutes such cure to completion.

(d)
(i)  The making by Lessee of any general arrangement or assignment for the benefit of
creditors; (ii) Lessee becomes a debtor as  defined in 11 U.S.C. S101 or any
successor statute thereto (unless, in the case  of a petition filed against Lessee, the
same is dismissed within 60days); (iii) the appointment of a trustee or
receiver to take possession of  substantially all of Lessees assets located at the
Premises or of  Lessees interest in this Lease, where possession is not restored to
Lessee  within 3 0 days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Lessees assets located at the Premises or of  Lessees
interest in this Lease, where such seizure is not discharged  within 3 0 days. Provided,
however, in the event that any provision of this  Paragraph 13.1(d) is contrary to any
applicable law, such provision shall be of  no force or effect.

(e)
The discovery by Lessor that any financial statement given to Lessor by Lessee,
any assignee of Lessee, any subtenant of Lessee, any successor in interest of
Lessee or any guarantor of Lessees obligation hereunder, and any of them,
was materially false.

13.2
Remedies. In the event of any such material default or breach by Lessee, Lessor
may at any time thereafter, with or without notice or demand and without
limiting Lessor in the exercise of any right or remedy which Lessor may have by
reason of such default or breach:

(a)
Terminate Lessees right to possession of the Premises by any lawful means,
in which case this Lease shall terminate and Lessee shall immediately surrender
possession of the Premises to Lessor. In such event Lessor shall be entitled to
recover from Lessee all damages incurred by Lessor by reason of Lessees
default including, but not limited to, the cost of recovering possession of the
Premises; expenses of reletting, including necessary renovation and alteration
of the Premises, reasonable attorneys fees, and any real estate commission
actually paid; the worth at the time of award by the court having jurisdiction
thereof of the amount by which the unpaid rent for the balance of the term after
the time of such award exceeds the amount of such rental loss for the same
period that Lessee proves could be reasonably avoided; that portion of the
leasing commission paid by Lessor pursuant to Paragraph 15 applicable to the
unexpired term of this Lease.

(b)
Maintain Lessee's right to possession in which case this Lease  shall continue in effect
whether or not Lessee shall have abandoned the Premises. In  such event Lessor shall be
entitled to enforce all of Lessors rights and  remedies under this Lease, including
the right to recover the rent as it becomes  due hereunder.

(c)
Pursue any other remedy now or hereafter available to Lessor under  the laws or judicial
decisions of the state wherein the Premises are located.  Unpaid installments of rent and
other unpaid monetary obligations of Lessee  under the terms of this Lease shall bear
interest from the date due at the  maximum rate then allowable by law.

13.3
Default by Lessor. Lessor shall not be in default unless Lessor fails to perform
obligations required of Lessor within a reasonable time, but in no event later
than thirty (3 0) days after written notice by Lessee to Lessor and to the
holder of any first mortgage or deed of trust covering the Premises whose name
and address shall have theretofore been furnished to Lessee in writing,
specifying wherein Lessor has failed to perform such obligation; provided,
however, that if the nature of Lessors obligation is such that more than
thirty (30) days are required for performance then Lessor shall not be in
default if Lessor commences performance .within such 30-day period and
thereafter diligently prosecutes the same to completion.

13.4
Late Charges. Lessee hereby acknowledges that late payment by Lessee to Lessor
of rent and other sums due hereunder will cause Lessor to incur costs not
contemplated by this Lease, the exact amount of which may be imposed on Lessor
by the terms of any mortgage or trust deed covering the Premises.  Accordingly,
if any installment of rent or any other sum due from Lessee shall not be  received by
Lessor or Lessors designee on the due date, then, without any  requirement for
notice to Lessee, Lessee shall pay to Lessor a late charge equal  to ten percent (10%) of
such overdue amount. The parties hereby agree that such  late charge represents a fair
and reasonable estimate of the costs Lessor will  incur by reason of late payment by
Lessee. Acceptance of such late charge by  Lessor shall in no event constitute a waiver
of Lessees default with  respect to such overdue amount, nor prevent Lessor from
exercising any of the  other rights and remedies granted hereunder. In the event that a late charge is payable
hereunder, whether or not collected, for three (3) installments of rent, then
rent shall automatically become due and payable quarterly in advance, rather
than monthly, notwithstanding Paragraph 4 or any other provision of this Lease
to the contrary. If the Lessee gives the Lessor a check that is dishonored by
the bank, the Lessee will pay within three (3 days) from receipt of notice by
Lessor of the dishonored bank check the amount owed, a dishonored bank check
charge of $20.00, and a ten percent (10%) late charge if the payment is
considered late due to the dishonored bank check.

13.5
Impounds. In the event that a late charge is payable hereunder, whether or not
collected, for three (3) installments of rent or any other monetary obligation
of Lessee under the terms of this Lease, Lessee shall pay to Lessor, if Lessor
shall so request, in addition to any other payments required under this Lease, a
monthly advance installment, payable at the same time as the monthly rent, as
estimated by Lessor, for insurance expenses on the Premises which are payable by
Lessee under the terms of this Lease. Such fund shall be established to insure
payment when due, before delinquency, of any or all such insurance premiums. If
the amounts paid to Lessor by Lessee under the provisions of this paragraph are
insufficient to discharge the obligations of Lessee to pay such insurance
premiums as the same become due, Lessee shall pay to Lessor, upon Lessors
demand, such additional sums necessary to pay such obligations. All moneys paid
to Lessor under this paragraph may be intermingled with other moneys of Lessor
and shall not bear interest. In the event of a default in the obligations of
Lessee to perform under this Lease, then any balance remaining from funds paid
to Lessor under the provisions of this paragraph may, at the option of Lessor,
be applied to the payment of any monetary default of Lessee in lieu of being
applied to the payment of insurance premiums.

14.
Condemnation. If the Premises or any portion thereof are taken under the power of
eminent domain, or sold under the threat of the exercise of said power (all
of which are herein called condemnation), this Lease shall terminate  as to
the part so taken as of the date the condemning authority takes title or  possession, as
of the date the condemning authority takes title or possession,  whichever first occurs.
If more than 10% of the floor area of the building on  the Premises, or more than 25% of
the land area of the Premises which is not  occupied by any building, is taken by
condemnation, Lessee may, at Lessees  option, to be exercised in writing only
within ten (10) days after Lessor shall  have given Lessee written notice of such taking
(or in the absence of such  notice, within ten (10) days after the condemning authority
shall have taken  possession) terminate this Lease as of the date the condemning
authority takes  such possession. If Lessee does not terminate this Lease in accordance
with the  foregoing, this Lease shall remain in full force and effect as to the portion
of  the Premises remaining, except that the rent shall be reduced in the proportion  that
the floor area of the building taken bears to the total floor area of the  building
situated on the Premises. No reduction of rent shall occur if the only  area taken is
that which does not have a building located thereon. Any award for  the taking of all or
any part of the Premises under the power of eminent domain  or any payment made under
threat of the exercise of such power shall be the  property of Lessor, whether such award
shall be made as compensation for  diminution in value of the leasehold or made as
compensation for diminution in value of the leasehold or for taking of the fee, or as severance damages; provided,
however, that Lessee shall be entitled to any award for loss of or damage to
Lessees trade fixtures and removable personal property. In the event that
this Lease is not terminated by reason of such condemnation, Lessor shall to the
extent of severance damages received by Lessor in connection with such
condemnation, repair any damage to the Premises caused by such condemnation
except to the extent that Lessee has been reimbursed therefor by the condemning
authority.

15.
Estoppel Certificate.

(a)
Lessee shall at any time upon not less than ten (10) days prior written
notice from Lessor execute, acknowledge and deliver to Lessor a statement
in writing (i) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of such modification and certifying
that this Lease, as so modified, is in full force and effect) and the date to
which the rent and other charges are paid in advance, if any, and (ii)
acknowledging that there are not, to Lessees knowledge, any uncured
defaults on the part of Lessor hereunder, or specifying such defaults if any are
claimed. Any such statement may be conclusively relied upon by any prospective
purchaser or encumbrancer of the Premises.

(b)
At Lessors option, Lessees failure to deliver such statement within
such time shall be a material breach of this Lease or shall be conclusive upon
Lessee (i) that this Lease is in full force and effect, without modification
except as may be represented by Lessor, (ii) that there are no uncured defaults
in Lessors performance, and (iii) that not more than one months rent
has been paid in advance or such failure may be considered by Lessor as a
default by Lessee under this Lease.

16.
Lessor's Liability. The term "Lessor" as used herein shall mean only the  owner
or owners at the time in question of the fee title or a Lessee's interest  in a ground
lease of the Premises, and except as expressly provided in Paragraph  15, in the event of
any transfer of such title or interest, Lessor herein named  (and in case of any
subsequent transfers then the grantor) shall be relieved from  and after the date of such
transfer of all liability as respects Lessor's  obligations thereafter to be performed,
provided that any funds in the hands of  Lessor or the then grantor at the time of such
transfer, in which Lessee has an  interest, at the time of such transfer, in which Lessee
has an interest, shall  be delivered to the grantee.  The obligations contained in this
Lease to be  performed by Lessor shall,  subject as aforesaid, be binding on Lessor's
successors and assigns, only during their respective periods of ownership.

17.
Severability.  The invalidity of any provision of this Lease as  determined by a court of
competent jurisdiction, shall in no way affect the validity of any  other provision
hereof.

18.
Interest on Past-due Obligations.  Except as expressly herein provided,  any amount due
to Lessor not paid when due shall bear interest at the maximum  rate then allowable by
law from the due date. Payment of such interest shall not  excuse or cure any default by
Lessee under this Lease, provided, however, that interest shall not be payable on late
charges incurred by Lessee nor on any amounts upon which late charges are paid by Lessee.

19.
Time of Essence.  Time is of the essence.

20.
Additional Rent.  Any monetary obligations of Lessee to Lessor under the  terms of this
Lease shall be deemed to be rent.

21.
Incorporation of Prior Agreements; Amendments.  This Lease contains all  agreements of
the parties with respect to any matter mentioned herein. No prior  agreement or
understanding pertaining to any such matter shall be effective.  This Lease may be
modified in writing only, signed by the parties in interest at  the time of the
modification.  Except as otherwise stated in this Lease, Lessee  hereby acknowledges that
the Lessor or any employees or agents of any of said  persons has made any oral or
written warranties or representations to Lessee  relative to the condition or use by
Lessee of said Premises and Lessee  acknowledges that Lessee assumes all responsibility
regarding the Occupational  Safety Health Act, the legal use and adaptability of the
Premises and the  compliance thereof with all applicable laws and regulations in effect
during the  term of this Lease except as otherwise specifically stated in the Lease.

22.
Notices. Any notice required or permitted to be given hereunder shall be  in
writing and may be given by personal delivery or by first-class mail, and if  given
personably or by mail, shall be deemed sufficiently given if addressed to  Lessee or to
Lessor at the address noted below the signature of the respective  parties, as the case
may be. Either party may by notice to the other specify a  different address for notice
purposes except that upon Lessee s taking  possession of the Premises, the Premises
shall constitute Lessees address  for notice purposes.

23.  Waivers.
No waiver by Lessor or any provision hereof shall be deemed a waiver of  any other
provision hereof or of any subsequent breach by Lessee of the same or  any other
provision. Lessors consent to, or approval of, any act shall not  be deemed to
render unnecessary the obtaining of Lessors consent to or  approval of any
subsequent act by Lessee. The acceptance of rent hereunder by  Lessor shall not be a
waiver of any preceding breach by Lessee of any provision  hereof, other than the failure
of Lessee to pay the particular rent so accepted,  regardless of Lessors knowledge
of such preceding breach at the time of  acceptance of such rent.

24.
Recording.  Lessee shall not record this Lease.

25.  Holding
Over. If Lessee, with Lessors consent, remains in possession of  the Premises or
any part thereof after the expiration of the term hereof, such  occupancy shall be a
tenancy from month to month upon all the provisions of this  Lease pertaining to the
obligations of Lessee, but all options and rights of  first refusal, if any, granted
under the terms of this Lease shall be deemed  terminated and be of no further effect
during said month to month tenancy.

26.
Cumulative Remedies.  No remedy or election hereunder shall be deemed  exclusive but
shall, wherever possible, be cumulative with all other remedies at law or in equity.

27.
Covenants and Conditions.  Each provision of this Lease performable by Lessee shall be
deemed both a covenant and a condition.

28.
Binding Effect; Choice of Law. Subject to any provisions hereof restricting
assignment or subletting by Lessee and subject to the provisions of Paragraph
17, this Lease shall bind the parties, their personal representatives,
successors and assigns. This Lease shall be governed by the laws of the State
wherein the Premises are located.

29.
Subordination.

(a)
This Lease, at Lessors option, shall be subordinate to any ground lease,
mortgage, deed of trust, or any other hypothecation or security now or hereafter
placed upon the real property of which the Premises are a part and to any and
all advances made on the security thereof and to all renewals, modifications,
consolidations, replacements and extensions thereof. Notwithstanding such
subordination, Lessees right to quiet possession of the Premises shall not
be disturbed if Lessee is not in default and so long as Lessee shall pay the
rent and observe and perform all of the provisions of this Lease, unless this
Lease is otherwise terminated pursuant to its terms. If any mortgagee, trustee
or ground lessor shall elect to have this Lease prior to the lien of its
mortgage, deed of trust or ground lease, and shall give written notice thereof
to Lessee, this Lease shall be deemed prior to such mortgage, deed of trust, or
ground lease, whether this Lease is dated prior or subsequent to the date of
said mortgage, deed of trust, or ground lease, whether this Lease is dated prior
or subsequent to the date of said mortgage, deed of trust or ground lease or the
date of recording thereof.

(b)
Lessee agrees to execute any documents required to effectuate an attornment, a
subordination or to make this Lease prior to the lien of any mortgage, deed of
trust or ground lease, as the case may be. Lessees failure to execute such
documents within ten (10) days after written demand shall constitute a material
default by Lessee hereunder, or, at Lessors option, Lessor shall execute
such documents on behalf of Lessee as Lessees attorney-in-fact. Lessee
does hereby make, constitute and irrevocably appoint Lessor as Lessees
attorney-in-fact and in Lessees name, place and stead, to execute such
documents in accordance with this Paragraph 29(b).

30.
Attorneys Fees.  Should either party hereto institute any action or proceeding
at law or in equity to enforce or to interpret any provision hereof or for
damages or other relief by reason of an alleged breach of any provision hereof,
the prevailing party shall be entitled to receive from the losing party, in
addition to allowable court cost, such amount as the court may adjudge to be
reasonable as attorney fees for the services rendered the prevailing party in
such action or proceeding, and such amount may be made a part of the judgment
against the losing party.

31.
Lessors Access. Lessor and Lessors agents shall have the right to
enter the Premises at reasonable times for the purposes of inspecting the same,
showing the same to prospective purchasers, lender, or lessees, and making such
alteration, repairs, improvements or additions to the Premises or to the
building of which they are part as Lessor may deem necessary or desirable.
Lessor may at any time place on or about the Premises any ordinary For
Sale signs and Lessor may at any time during the last 60 days of the term
hereof place on or about the Premises any ordinary For Lease signs,
all without rebate of rent or liability to Lessee.

32.
Auctions. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without first having
obtained Lessors prior written consent. Notwithstanding anything to the
contrary in this Lease, Lessor shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent if the request is
for an Auction(s) that is being held by some one else then the Lessee, or are to
auction items for an unrelated type of business (example: automobile/vehicle
auction, etc.).

33.
Signs.  Lessee shall not place any sign upon the Premises without Lessor's  prior written
consent except that Lessee shall have the right, without the prior  permission of Lessor
to place ordinary and usual for rent or sublet signs  thereon.

34.
Merger. The voluntary or other surrender of this Lease by Lessee, or a mutual
cancellation thereof, or a termination by Lessor, shall not work a merger, and
shall, at the option of Lessor, terminate all or any existing subtenancies or
may, at the option of Lessor, operate as an assignment to Lessor of any or all
of such subtenancies.

35.
Consents.  Wherever in this Lease the consent of one party is required to  an' act of the
other party, such consent shall not be unreasonably withheld.

36.
Guarantor.  In the event that there is a guarantor of this Lease, said  guarantor shall
have the same obligations as Lessee under this Lease.

37.
Quiet Possession. Upon Lessee paying the rent for the Premises and  observing and
performing all of the covenants, conditions and provisions on  Lessee's part to be
observed and performed hereunder, Lessee shall have quiet  possession of the Premises for
the entire term hereof subject to all of the  provisions of this Lease.  The individuals
executing this Lease on behalf of  Lessor represent and warrant to Lessee that they; are
fully authorized and  legally capable of executing this Lease on behalf of Lessor and
that such  execution is binding upon all parties holding an ownership interest in the
Premises.

38.
Multiple Tenant Building.  In the event that the Premises are part of a  larger building
or group of buildings/land then Lessee agrees that it will abide  by, keep and observe
all reasonable rules and regulations which Lessor may make  from time to time for the
management, safety, care, and cleanliness of the building  and grounds, the parking of
vehicles and the preservation of good order therein  as well as for the convenience of
other occupants and tenants of the building.  The violations of any such rules and
regulations shall be deemed a material  breach of this Lease by Lessee.

39.
Security Measures. Lessee hereby acknowledges that the rental payable to Lessor hereunder
does not include the  cost of guard service or other security measures, and that Lessor
shall have no  obligation whatsoever to provide same. Lessee assumes all responsibility
for the protection of Lessee, its agents and invites from acts of third parties.

40.
Reservation of Rights.  Lessor reserves the following rights:

(1)
To use the driveways, walkways, and means of ingress and egress over the subject
properties to the adjoining properties owned by Lessor.

(2)
To install and maintain on the subject properties subsurface  utilities to serve the
adjoining properties owned by Lessor.

41.
Easements. Lessor reserves to itself the right, from time to time, to grant such
easements, rights and dedications that Lessor deems necessary or desirable, and
to cause the recordation of Parcel Maps and restrictions, so long as such
easements, rights, dedications, maps and restrictions do not unreasonably
interfere with the use of the Premises by Lessee. Lessee shall sign any of the
aforementioned documents upon request of Lessor and failure to do so shall
constitute a material breach of this Lease.

42.
Performance Under Protest. If at any time a dispute shall arise as to any amount
or sum of money to be paid by one party to the other under the provisions
hereof, the party against whom the obligation to pay the money is asserted shall
have the right to make payment under protest and such payment shall
not be regarded as a voluntary payment, and there shall service the right on the
part of said party to institute suit for recovery of such sum. If it shall be
adjudged that there was no legal obligation on the part of said party to pay
such sum or any part thereof as it was not legally required to pay under the
provisions of this Lease.

43.
Authority.  If Lessee is a corporation, trust, or general or limited  partnership, each
individual executing this Lease on behalf of such entity  represents and warrants that he
or she is duly authorized to execute and deliver  this Lease on behalf of said entity.
If Lessee is a corporation, trust or  partnership. Lessee shall, within thirty (30) days
after execution of this Lease,  deliver to Lessor evidence of such authority satisfactory
to Lessor.

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

45.
Parking.  Lessee and his employees/independent contractors cannot park  any vehicle
on/in the Premises that is not in working order, or that displays For  Sale sign(s).  No
vehicle maintenance/repairs shall occur at any time on the  Premises. The entire parking
lot adjacent is for the exclusive use of the lessee.

46.
Hazardous Materials Indemnification. Lessor agrees to indemnify, defend and hold
Lessee and its officers, partners, directors, shareholders, employees and agents
harmless from any claims, judgments, damages, fines penalties, costs (including
attorney, consultant and expert fees), liabilities (including sums paid in
settlement of claims) or loss which arise during or after the Primary Term or
any extension term, in connection with the presence or suspected presence of
Hazardous Materials in the soil, groundwater, or soil vapor on or under the
Center cause to be present by Lessor, its agents, contractors, officers or
employees.

Lessee
agrees to indemnify, defend and hold Lessor and its officers, employees and
agents (including Broker) harmless from any claims, judgments, damages, fines,
penalties, costs, liabilities (including sums paid in settlement of claims) or
loss including attorneys fees, consultants fees, and expert fees
which arise during or after the Primary Term or any Renewal Term, in connection
with the presence of toxic or hazardous materials in the soil, groundwater, or
soil vapor on or under the Shopping Center if and to the extent the presence of
such Hazardous Materials is caused by Lessee, its officers, employees or agents.

47.
Miscellaneous. The rent on the Premises includes a credit for telephone line
insurance which Lessee understands is their responsibility to keep and pay all
Premiums for during their tenancy, and Lessor shall not be held liable for
repairs and/or maintenance or the cost of such.

If
Lessee breaks or damages the locks or brackets on the curbstop to get water
illegally, or cause any problems with damage to water utility agency facilities
such as a stripped or broken curbstop, vandalized meter, broken meter box or
other general damage, the Lessee will be legally and financially responsible.

Each
party represents to the other that no Broker or Agent has been involved in the
negotiation of this Lease and that no commissions are due to any Broker. Each
party agrees to hold the other harmless from any claim for a Brokers
commission which may have resulted from the conduer on representations of the
other.

Lessee
shall adhere to all Fire Marshalls requests and shall hang a fire
extinguisher on the wall in plain sight and shall maintain it according to
manufacturers directions.

LESSOR
AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED
AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS
LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND
EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.

The
parties hereto have executed this Lease at the place on the dates specified
immediately adjacent to their respective signatures.

Confirmation.
The Existing Lease is confirmed.

Dated:
2/12/04

|                            | 
|--------------------------- | 
|LESSOR:                     | 
|Bei-Scott Company           | 
|Address: 410 May Ave, #1    | 
|Santa Cruz, CA 95060        | 
|                            | 
|                            | 
|By:  /s/ LISA DEWEY         | 
|Lisa Dewey-Property Manager |