Document:

Exhibit 10.24

 

COMMERCIAL 

LEASE

 

1.                                       Basic Provisions
(“Basic Provisions”).

 

A.                                   Parties: This Lease (“Lease”), dated January 21st,
2010 (“Effective Date”), is made by and between System II, LLC, a California limited liability company (“Lessor”) and
Wilshire State Bank, a
California Corporation (“Lessee”) and collectively the “Parties” or individually a “Party”.

 

B.                                     Premises: That certain
portion of the Project (as defined below), including all improvements therein
or to be provided by Lessor under the terms of this Lease, in the Project
located at the Southeast corner of Carmenita Road and Artesia Boulevard with an
address of 17500 Carmenita Road, Cerritos, California, 90703, containing 5,702
square feet of floor area, and further illustrated on Exhibit A (“Site Plan”) attached
hereto (“Premises”)
and in the building containing the Premises (“Building”). In addition to Lessee’s
rights to use and occupy the Premises as hereinafter specified, Lessee shall
have non-exclusive rights to any utility raceways of the Building and to the
Common Areas (as defined in Section 2.7), but shall not have any rights to
the roof (other than as described in Section 7.2). The Premises, the
Building, the Common Areas, the land upon which they are located, along with
all other buildings and improvements thereon, are herein collectively referred
to as the “Project.”

 

C.                                     Parking: Lessee shall be
entitled to the non-exclusive use of vehicle parking spaces at no charge to
Lessee (“Parking
Spaces”) as shown on Exhibit A
(Site Plan)  and further defined in Section 2.5.

 

D.                                    Original Term: Subject to
extension pursuant to Section 3.4 below, Seven (7) Years (“Original Term”) commencing upon the Rent
Commencement Date. The Original Term shall expire on January 31, 2017 (“Expiration Date”).

 

The Lease Commencement Date (“Commencement Date”) and Base Rent
shall commence on February 1, 2010. (“Rent Commencement Date”).

 

E.                                      Anticipated Possession Date: (“Anticipated Possession Date”). Not applicable.

 

F.                                      Initial Base Rent: Minimum
Monthly Rent for the Premises shall be as follows:

 

	
  MONTHS

  	
   

  	
  RENT

  	
   

  
	
  1-24

  	
   

  	
  $

  	
  9,000.00/mo/NNN

  	
   

  
	
  25-48

  	
   

  	
  $

  	
  10,500.00/mo/NNN

  	
   

  
	
  49-60

  	
   

  	
  $

  	
  10,815.00/mo/NNN

  	
   

  
	
  61-72

  	
   

  	
  $

  	
  11,139.45/mo/NNN

  	
   

  
	
  73-84

  	
   

  	
  $

  	
  11,473.65/mo/NNN

  	
   

  

 

(“Base Rent”), payable on the first day of each month
commencing on the Rent Commencement Date in addition to Lessee’s Share of
Operating Expenses, Real Estate Taxes, and Insurance Costs (as further
described in Section G below).

 

G.                                     Lessee’s Percentage Share for
purposes of calculating Operating Expenses, Real Estate Taxes, and Insurance
Costs: (“Lessee’s Share”). Lessee’s Share has
been calculated by dividing the approximate square footage of the Premises by
the leasable square footage contained in that portion of the Project for which
Lessor is paying Operating Costs, property taxes as defined herein (“Property Taxes”), and
insurance premiums for property and liability insurance required to be carried
by Lessor (“Insurance
Costs”) (collectively
those actions being the “Services”)  and
Lessee shall be responsible to Lessor for the costs of such Services according
to Lessee’s Share.

 

Lessee’s Share as a percentage for determining Common
Area Operating Costs is estimated to be 13.76%.

 

H.                                    Base Rent and Other Monies
Paid Upon Execution: Intentionally deleted.

 

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I.                                         Guarantor: Intentionally
deleted.

 

J.                                        Attachments. Attached hereto
are the following Addendum and Exhibits, all of which  constitute a part of this
Lease:

 

Addendum #1 consisting of Sections 50 through 51;

Exhibit A consisting of a site plan depicting
the Premises and the Project;

Exhibit B consisting of a current set of the Rules and
Regulations for the Project;

 

K.                                    Renewal Options. Two (2) Renewal
Options for Five (5) Lease Years (see Section 3.4)

 

2.                           Premises.

 

(1)                      Letting. Lessor
hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises,
for the term, at the rental, and upon all of the terms, covenants and
conditions set forth in this Lease. Unless otherwise provided herein, any
statement of size set forth in this Lease, or that may have been used in
calculating Rent, is an approximation.

 

Within thirty (30) days following Lessee’s initial opening for business
in the Premises, Lessee shall have the right to have its architect or
contractor re-measure the Premises from the exterior surface of exterior walls
and from the center line of any common demising walls, and if the square
footage of the Premises is less or more than that provided herein, the parties
shall amend the Lease and reduce or increase Lessee’s rental obligations
proportionately. If Lessee does not complete such remeasurement and provide the
results to Lessor within said thirty (30) day period, Lessee shall be deemed to
have waived its right to do so hereunder.

 

(2)                      Condition. Lessor shall deliver
the Premises to Lessee broom clean and free of debris with Lessor’s Work
substantially complete on the Delivery Date (as defined in Section 3.3), and
Lessee agrees to accept the Premises except for the presence of any Hazardous
Materials (hereinafter defined), latent defects in the structural portions of
the Premises, which are reported by Lessee in writing to Lessor. Provided the
required service contracts described in Section 7.1(b) below are obtained
by Lessee and in effect within thirty (30) days following the Commencement Date,
Lessor warrants that the existing electrical, plumbing, fire sprinkler,
lighting, heating, ventilating and air conditioning systems (“HVAC”), and all other such elements in the Premises, other
than those constructed by Lessee, shall be in good operating condition on said
date and for a period of six (6) months thereafter, that the structural
elements of the roof, bearing walls and foundation of the Premises shall be
free of material defects, and that the Premises does not contain any mold or
fungi at levels defined as toxic under applicable state or federal law. If a non-compliance
with such warranty exists as of the Commencement Date, Lessor shall, as Lessor’s
sole obligation with respect to such matter, except as otherwise provided in
this Lease, promptly after receipt of written notice from Lessee setting forth
with specificity the nature and extent of such non-compliance, malfunction or
failure, rectify same at Lessor’s expense. The warranty periods shall be as
follows: (i) six (6) months as to the HVAC systems, and (ii) one
hundred and eighty (180) days as to the remaining systems and other elements of
the Premises. If Lessee does not give Lessor the required notice within the
appropriate warranty period, correction of any such non-compliance, malfunction
or failure shall be the obligation of Lessee at Lessee’s sole cost and expense
(except for the repairs to the fire sprinkler systems, roof, foundations,
and/or bearing walls or other repairs for which Lessor is responsible under
this Lease).

 

The term “Substantially Complete” shall
mean the date the project architect has certified that Lessor’s Work is
substantially complete and that Lessee can physically occupy or take possession
of the space, subject to the minor punch-list items, items which constitute
Lessee’s work, and the Premises are in clean and operating condition. The
project architect shall determine said “Substantial Completion” based upon the
generally accepted professional standards of the American Institute of
Architects, and not as an advocate, consultant, or agent for either Lessee or
Lessor.

 

Notwithstanding Lessee’s acceptance of delivery of the Premises
hereunder, Lessee shall have the right to provide Lessor with a so-called “punch list” of defects or deficiencies in
Lessor’s work (if any is to be performed under this Lease prior to delivery of
possession to Lessee), or latent defects in the Building and/or the Premises
which require repair, completion, correction or revision to satisfy Lessor’s
obligations under this Lease. Lessor shall promptly commence the necessary
work, and shall diligently and continuously pursue same to completion, within
thirty (30) days from the date of Lessee’s notice. If such items are not cured
within said time period, unless such items

 

2

 

cannot
be reasonably cured within such time frame but are being diligently and in good
faith pursued to completion by Lessor, Lessee (in addition to any and all other
rights and remedies to which Lessee may be entitled at law or in equity) shall
have the right, but not the obligation, to cure such items at Lessor’s expense
and on Lessor’s behalf. In such event, Lessor shall reimburse Lessee for all
reasonable costs and expenses incurred by Lessee in curing such items within
thirty (30) days of Lessor’s receipt of written demand by Lessee, which shall
be accompanied by supporting documentation sufficient for Lessor to verify the
nature, scope and cost of the work performed. If Lessor fails to reimburse
Lessee within said period, Lessee shall thereafter have the right to offset and
deduct such amounts from fifty percent (50%) of the payments next coming due
from Lessee to Lessor, until such amounts have been recovered by Lessee.

 

(3)                      Compliance. Lessor warrants
that to the best of its knowledge the improvements on the Premises and the
Common Areas comply with the building codes that were in effect at the time
that each such improvement, or portion thereof, was constructed, and also with
all applicable laws, covenants or restrictions of record, regulations, and
ordinances in effect on the Commencement Date (“Applicable Requirements”). Lessee
shall be responsible for determining whether or not the Applicable Requirements
and especially the zoning are appropriate for Lessee’s intended use, and
acknowledges that past uses of the Premises may no longer be allowed. Said
warranty does not apply to the use to which Lessee will put in the Premises,
modifications which may be required by the Americans with Disabilities Act or
any similar laws as a result of Lessee’s use or to any Alterations or Utility
Installations [as defined in Section 7.3(a)] made or to be made by Lessee.
If the Premises do not comply with said warranty, Lessor shall, except as
otherwise provided, promptly after receipt of written notice from Lessee
setting forth with specificity the nature and extent of such non-compliance
rectify the same at Lessor’s expense. If Lessee does not give Lessor written
notice of non-compliance with this warranty within twelve (12) months following
the Commencement Date, correction of that non-compliance shall be the
obligation of Lessee at Lessee’s sole cost and expense. If the Applicable
Requirements are hereafter changed so as to require during the term of this Lease
the construction of an addition to or an alteration of the Premises, Premises
and/or Building, the remediation of any Hazardous Substance, or the
reinforcement or other physical modification of the Premises, Premises and/or
Building (“Capital
Expenditure”), Lessor
and Lessee shall allocate the cost of such work as follows:

 

(a) Subject to Section 2.3(c) below,
if such Capital Expenditures are required as a result of the specific and
unique use of the Premises by Lessee as compared with uses by Lessees in
general, Lessee shall be fully responsible for the cost thereof, provided,
however, that if such Capital Expenditure is required during the last two (2) years
of this Lease and the cost thereof exceeds nine (9) months’ Base Rent,
Lessee may instead terminate this Lease unless Lessor notifies Lessee, in
writing, within ten (10) days after receipt of Lessee’s termination notice
that Lessor has elected to pay the difference between the actual cost thereof
and the amount equal to nine (9) months’ Base Rent. If Lessee elects
termination, Lessee shall immediately cease the use of the Premises that
requires such Capital Expenditure and deliver to Lessor written notice
specifying a termination date no more than ninety (90) days thereafter. Such
termination date shall, however, in no event be earlier than the last day that
Lessee could legally utilize the Premises without commencing such Capital
Expenditure.

 

(b) If such Capital Expenditure is not the
result of the specific and unique use of the Premises by Lessee (such as,
governmentally mandated seismic modifications), then Lessor and Lessee shall
allocate the obligation to pay for the portion of such costs reasonably
attributable to the Premises provided, however, that if such Capital
Expenditure is required during the last two (2) years of this Lease or if
Lessor reasonably determines that it is not economically feasible to pay its
share thereof, Lessor shall have the option to terminate this Lease upon ninety
(90) days prior written notice to Lessee unless Lessee notifies Lessor, in
writing, within ten (10) days after receipt of Lessor’s termination notice
that Lessee will pay for such Capital Expenditure. If Lessor does not elect to
terminate, and fails to tender its share of any such Capital Expenditure after thirty
(30) days prior written notice, Lessee may advance such funds and deduct same,
with Interest, from fifty percent (50%) of the Base Rent until Lessor’s share
of such costs have been fully paid. If Lessee is unable to finance Lessor’s
share, or if the balance of the Base Rent due and payable for the remainder of
this Lease is not sufficient to fully reimburse Lessee on an offset basis,
Lessee shall have the right to terminate this Lease upon thirty (30) days
written notice to Lessor.

 

(c) Notwithstanding the above, the provisions
concerning Capital Expenditures are intended to apply only to non-voluntary,
unexpected, and new Applicable Requirements. If the Capital Expenditures are
instead triggered by Lessee as a result of an actual or proposed change in

 

3

 

use, change in intensity of use, or modification to
the Premises then, and in that event, Lessee shall either: (i) immediately
cease such changed use or intensity of use and/or take such other steps as may
be necessary to eliminate the requirement for such Capital Expenditure, or (ii) complete
such Capital Expenditure at its own expense. Lessee shall not have any right to
terminate this Lease.

 

(4)                      Acknowledgements. Lessee
acknowledges that: (a) it has been advised by Lessor and/or Brokers to
satisfy itself with respect to the condition of the Premises (including but not
limited to the electrical, HVAC and fire sprinkler systems, security,
environmental aspects, and compliance with Applicable Requirements and the
Americans with Disabilities Act), and their suitability for Lessee’s intended
use, (b) Lessee has made such investigation as it deems necessary with
reference to such matters and assumes all responsibility therefor as the same
relate to its occupancy of the Premises, and (c) neither Lessor, Lessor’s
agents, nor Brokers have made any oral or written representations or warranties
with respect to said matters other than as set forth in this Lease. In
addition, Lessor acknowledges that: (i) Brokers have made no
representations, promises or warranties concerning Lessee’s ability to honor
the Lease or suitability to occupy the Premises.

 

(5)                      Vehicle Parking. Lessee shall
be entitled to the non-exclusive use of Parking Spaces as described in Section 1(c) on
those portions of the parking area as further described in Exhibit A.
The Parking Spaces shall be used for parking by vehicles no larger than
full-size passenger automobiles or pick-up trucks, herein called “Permitted Size Vehicles.” Lessor may
regulate the loading and unloading of vehicles by adopting Rules and
Regulations as provided in Section 2(9). No vehicles other than Permitted
Size Vehicles may be parked in the Parking Spaces without the prior written
permission of Lessor. In addition:

 

(a) Lessee shall not permit or allow any vehicles
that belong to or are controlled by Lessee or Lessee’s employees, suppliers,
shippers, customers, contractors or invitees to be loaded, unloaded, or parked
in areas other than those designated by Lessor for such activities.

(b) Lessee shall not service or store any
vehicles on the Parking Spaces.

(c) If Lessee permits or allows any of the
prohibited activities described in this Section 2.5, then Lessor shall
have the right, without notice, in addition to such other rights and remedies
that it may have, to remove or tow away the vehicle involved and charge the
cost to Lessee, which cost shall be immediately payable upon demand by Lessor.

 

(6) Common Areas - Definition. The term “Common Areas” is defined as all areas and
facilities outside the Premises and within the exterior boundary line of the
Project and interior utility raceways and installations within the Premises
that are provided and designated by the Lessor from time to time for the
general non-exclusive use of Lessor, Lessee and other Lessees of the Project
and their respective employees, suppliers, shippers, customers, contractors and
invitees, including parking areas, loading and unloading areas, trash areas,
roadways, walkways, driveways and landscaped areas.

 

(7) Common Areas - Lessee’s Rights. Lessor
grants to Lessee, for the benefit of Lessee and its employees, suppliers,
shippers, contractors, customers and invitees, during the term of this Lease,
the non-exclusive right to use, in common with others entitled to such use, the
Common Areas as they exist from time to time, subject to any rights, powers,
and privileges reserved by Lessor under the terms hereof or under the terms of
any reasonable and non-discriminatory rules and regulations or
restrictions governing the use of the Project. Under no circumstances shall the
right herein granted to use the Common Areas be deemed to include the right to
store any property, temporarily or permanently, in the Common Areas. Only the
prior written consent of Lessor or Lessor’s designated agent, which consent may
be revoked at any time, shall permit any such storage. In the event that any
unauthorized storage shall occur, then Lessor shall have the right, without
notice, in addition to such other rights and remedies that it may have, to
remove the property and charge the cost to Lessee, which cost shall be
immediately payable upon demand by Lessor.

 

(8) Common Areas - Rules and Regulations.
Lessor or such other person(s) as Lessor may appoint shall have the
exclusive control and management of the Common Areas and shall have the right,
from time to time, to establish, modify, amend and enforce reasonable rules and
regulations (“Rules and Regulations”) for the management, safety,
care, and cleanliness of the grounds, the parking and unloading of vehicles and
the preservation of good order, as well as for the convenience of other
occupants or Lessees of the Building and the Project and their invitees. Lessee
agrees to abide by and conform to all such reasonable and non-discriminatory Rules and
Regulations, and to use reasonable efforts cause its employees, suppliers,
shippers, customers,

 

4

 

contractors
and invitees to so abide and conform. Lessor shall not be responsible to Lessee
for the non-compliance with said Rules and Regulations by other Lessees of
the Project, but Lessor shall use reasonable efforts to enforce same uniformly
and in a non-discriminatory fashion.

 

(9) Common Areas - Changes. Lessor shall have
the right, in Lessor’s sole discretion, from time to time:

 

(a) To make changes to the Common Areas,
including, without limitation, changes in the location, size, shape and number
of driveways, entrances, parking spaces, parking areas, loading and unloading
areas, ingress, egress, direction of traffic, landscaped areas, walkways and
utility raceways;

(b) To close temporarily any of the Common
Areas for maintenance purposes so long as reasonable access to the Premises
remains available, provided that Lessee shall have access to the Premises
twenty-four (24) hours per day, three hundred sixty-five (365) days per year;

(c) To designate other land outside the
boundaries of the Project to be a part of the Common Areas;

(d) To add additional buildings and
improvements to the Common Areas;

(e) To use the Common Areas while engaged in
making additional improvements, repairs or alterations to the Project, or any
portion thereof; and

(f) To do and perform such other acts and make
such other changes in, to or with respect to the Common Areas and Project as
Lessor may, in the exercise of sound business judgment, deem to be appropriate.

 

Lessor
shall not make or permit any changes, improvements or utilization of the
Project or any premises therein which would (i) adversely affect visibility
of the Premises or Lessee’s signage therein or thereon, (ii) adversely
affect Lessee’s ability to utilize the Premises for the purposes permitted
under this Lease and to conduct Lessee’s business therein, or (iii) reduce
the number or convenience of those parking spaces located in commercial
proximity to the Premises. In event of a violation of the foregoing, Lessee’s
rental obligations under this Lease shall abate in proportion to the degree of
interference, such abatement to continue until the interference is cured. If
such interference is material, and is not cured within sixty (60) days of the
date of Lessor’s receipt of Lessee’s notice of such violation, Lessee shall
have the right, at Lessee’s sole discretion and in addition to any and all
other remedies to which Lessee may be entitled at law or in equity, to
terminate this Lease upon written notice to Lessor.

 

In exercising any of the rights granted to it under this Lease,
including without limitation this Section 2(9), Lessor shall use its best
efforts to eliminate any interference with Lessee’s business operations in the
Premises. If, as a result of Lessor’s exercise of any of its rights under this
Lease, Lessee is unable to conduct its normal business operations in the
Premises within ten (10) days of written notice from Lessor, all rent and
additional rent payable to Lessor under this Lease shall abate in proportion to
the degree of interference, until such interference has been cured.

 

3.                                                               Term.

 

(1) Term. The Commencement Date, the Rent
Commencement Date, the Expiration Date and Original Term of this Lease are as
specified in Section 1(D) of this Lease.

 

(2) Early Possession. Intentionally deleted.

 

(3) Delay in Possession. Intentionally
deleted.

 

(4) Options to Extend Term. Provided
Lessee shall not at the time of exercise then be in default under the terms and
conditions of the Lease, Lessee shall have the right to exercise an option
(individually “Option” and
collectively, “Options”)  to
extend the Term for up to two (2) consecutive additional periods of five (5) years
each (each an “Option Term”). Such Options shall apply only to
Lessee’s entire Premises, shall each be for a term that shall begin immediately
following Lessee’s then Term and shall be exercised by Lessee by giving written
notice to Lessor not less than six (6) months prior to the expiration of
the then current Term of this Lease. If Lessee exercises any Option to extend
the Term, Lessee shall continue to lease the Premises for such Option Term upon
the same terms and conditions set forth in this Lease except that the Minimum
Monthly Rent payable by Lessee to Lessor during each such Option Term shall be
adjusted as follows:

 

5

 

(a) On the First
Adjustment Date, the Minimum Monthly Rent payable during the first year of the
first Option Term shall be increased to one hundred three percent (103%) of the
Minimum Monthly Rent applicable immediately preceding the expiration of
Lessee’s then term.

 

(b) On each subsequent annual Adjustment Date, the Minimum Monthly
Rent shall be adjusted to an amount equal to one hundred three percent (103%)
of the Minimum Monthly Rent applicable immediately preceding the expiration of
Lessee’s then term.

 

(c) Notwithstanding any other provisions of this
Lease, the Minimum Monthly Rent shall increase by three percent (3%) per year.

 

(d) The term “Adjustment
Date” as used in this Lease shall mean February 1, 2017, (“First Adjustment
Date”), and each
succeeding anniversary of the First Adjustment Date.

 

4.                                                                 Rent.

 

(1) Rent Defined. All monetary obligations of
Lessee to Lessor under the terms of this Lease (except for the Security
Deposit) are deemed to be rent (“Rent”).

 

Included as part of Rent, Lessor shall provide Lessee
with the Services which shall include twenty-four (24) hour access to and use
of the Premises and Common Areas reasonably necessary for use of the Premises;
reasonable quantities of electric current for receptacles; standard fluorescent
lighting; heat, ventilation, and air-conditioning (M-F: 8:00 a.m. to 6:00 p.m.,
Sat: 8:00 a.m. to 1:00 p.m.) for the comfortable use and occupation of the
Premises during Business Hours; reasonable access to and use of intra-Building
telephone network cabling; Notwithstanding the foregoing, Lessor may change the
Services, provided such changes are reasonable and nondiscriminatory, or are
made to comply with any government restriction, requirement or standard. Lessor
may restrict Services as Lessor deems reasonable during any invasion, mob,
riot, public excitement or other similar circumstance.

 

The Services (which include the costs associated
therewith) shall also include:

 

1.         All costs incurred by Lessor relating to the
ownership and operation of the Project other than janitorial costs for the
Premises.

2.         The Base Real Property Taxes (as defined in Section 10).

3.             Insurance Costs (as defined in Section 8).

4.          The cost of water, gas, electricity and telephone to
service the Common Areas.

5.          The cost of any capital repair or replacement to the
Building or the Project not covered under the provisions of Section 2(3) provided;
however, that Lessor shall allocate the cost of any such capital improvement
over the reasonable useful service life of the item in question.

6.          Any other services to be provided by Lessor that are
stated elsewhere in this Lease to be an Operating Expense.

 

Lessee
shall have the right, provided that Lessee is not then in default of this Lease
past the expiration of the applicable notice and cure period, to audit and
inspect the books and records of Lessor with respect to any cost or item which
is passed through to Lessee, upon ten (10) days advance, written notice by
Lessee to Lessor. Lessor shall cooperate with Lessee in providing Lessee
reasonable access to its books and records during normal business hours at
Landlord’s headquarters for this purpose. If the results of the audit show an
overcharge to Lessee of more than five percent (5%) of the actual amount owed
by Lessee, then Lessor shall pay the reasonable costs of such audit, and in any
case, whether or not Lessee is entitled to reimbursement of its audit costs,
Lessor shall credit or refund to Lessee any overcharge of such items as
discovered by the audit within thirty (30) days of completion of such audit. In
the event such audit discloses an undercharge of such items as billed to
Lessee, Lessee shall pay Lessor the amount of such undercharge within thirty
(30) days of completion of such audit.

 

(2) Payment

 

Lessor
shall, throughout the Term and any extensions thereof, pay one hundred percent
(100%) of the cost of the Services. Lessee shall, throughout the Term or any
extensions thereof, reimburse Lessor for the cost of the Services multiplied by
Lessee’s Share.

 

6

 

Lessee shall reimburse Lessor’s reasonable charge for any Services not
required to be provided to the Premises but requested by Lessee. Modifications
to Services or Leasehold improvements (including Metering) required due to
concentration of personnel or office equipment, or the use of office equipment
that generates unusual heat or consumes unusual amounts of electricity shall be
made at Lessee’s sole cost and expense.

 

Lessee
shall cause payment of Rent to be received by Lessor in lawful money of the
United States, without offset or deduction (except as specifically permitted in
this Lease), on or before the day on which it is due. All monetary amounts
shall be rounded to the nearest whole dollar. In the event that any statement
or invoice prepared by Lessor is inaccurate such inaccuracy shall not
constitute a waiver and Lessee shall be obligated to pay the amount set forth
in this Lease. Rent for any period during the term hereof which is for less
than one (1) full calendar month shall be prorated based upon the actual
number of days of said month. Payment of Rent shall be made to Lessor at its
address stated herein or to such other persons or place as Lessor may from time
to time designate in writing. Acceptance of a payment that is less than the
amount then due shall not be a waiver of Lessor’s rights to the balance of such
Rent, regardless of Lessor’s endorsement of any check so stating. In the event
that any check, draft, or other instrument of payment given by Lessee to Lessor
is dishonored for any reason, Lessee agrees to pay to Lessor the sum of Twenty
Five Dollars and No Cents ($25.00) in addition to any Late Charge and Lessor,
at its option, may require all future Rent be paid by cashier’s check. Payments
will be applied first to accrued late charges and attorney’s fees, second to accrued
interest, then to Base Rent and Common Area Operating Expenses, and any
remaining amount to any other outstanding charges or costs.

 

5.                                                               Security
Deposit. Intentionally deleted.

 

6.                                                               Use.

 

Lessee shall be permitted to use and occupy the for
the sole purpose of operating a banking business and for no other purpose
without Lessor’s consent (the “Agreed Use”).

 

Lessee shall not use or permit the use of the Premises in a manner that
is unlawful, creates damage, waste or a nuisance or that disturbs occupants of
or causes damage to neighboring premises or properties. Other than guide,
signal and Seeing Eye dogs, Lessee shall not keep or allow in the Premises any
pets, animals, birds, fish, or reptiles. Lessor shall not unreasonably withhold
or delay its consent to any written request for a modification of the Agreed
Use, so long as the same will not impair the structural integrity of the
Building or the mechanical or electrical systems therein, and/or is not
significantly more burdensome to the Project. If Lessor elects to withhold
consent, Lessor shall within seven (7) days after such request give
written notification of same, which notice shall include an explanation of
Lessor’s objections to the change in the Agreed Use. Lessee shall not use the
Premises, or permit anything to be done in or about the Premises, which will in
any way conflict with any law, statute, ordinance or governmental rule or
regulation now in force or which may hereafter be enacted or promulgated.
Lessee shall, at its sole cost and expense, promptly comply with all laws,
statutes, ordinances and governmental rules, regulations or requirements now in
force or which may hereafter be in force and with the requirements of any board
of fire underwriters or other similar bodies now or hereafter constituted
relating to or affecting the condition, use or occupancy of the Premises,
excluding structural changes or other alterations not related to or affected by
Lessee’s improvements or acts. The judgment of any court of competent
jurisdiction or the admission of Lessee in any action against Lessee, whether
Lessor be a party thereto or not, that Lessee has violated any law, statute,
ordinance or governmental rule, regulation or requirement, shall be conclusive
of that fact as between the Lessor and Lessee.

 

(2) Hazardous Substances.

 

(a) Reportable Uses
Require Consent. The term “Hazardous
Substance” as used in this Lease shall mean any product, substance,
or waste whose presence, use,  manufacture, disposal. transportation, or release, either by itself or
in combination with other materials expected to be on the Premises, is either: (i) potentially
injurious to the public health, safety or welfare, the environment or the
Premises, (ii) regulated or monitored by any governmental authority, or (iii) a
basis for potential liability of Lessor to any governmental agency or third
party under any applicable statute or common law theory. Hazardous Substances
shall include, but not be limited to, hydrocarbons, petroleum, gasoline, and/or
crude oil or any products, by-products or fractions thereof. Lessee shall not
engage in any activity in or on the Premises that constitutes a Reportable Use
of Hazardous Substances without the express prior written consent of Lessor and
timely compliance (at Lessee’s expense) with all Applicable Requirements. “Reportable Use”
shall mean (i) the installation

 

7

 

or use of any above or below ground storage tank, (ii) the
generation, possession, storage, use, transportation, or disposal of a
Hazardous Substance that requires a permit from, or with respect to which a
report, notice, registration or business plan is required to be filed with, any
governmental authority, and/or (iii) the presence at the Premises of a
Hazardous Substance with respect to which any Applicable Requirements requires
that a notice be given to persons entering or occupying the Premises or
neighboring properties. Notwithstanding the foregoing, Lessee may use any
ordinary and customary materials reasonably required to be used in the normal
course of the Agreed Use, ordinary office supplies (copier toner, liquid paper,
glue, etc.) and common household cleaning materials, so long as such use is in
compliance with all Applicable Requirements, is not a Reportable Use, and does
not expose the Premises or neighboring property to any meaningful risk of
contamination or damage or expose Lessor to any liability therefore. In
addition, Lessor may condition its consent to any Reportable Use upon receiving
such additional assurances as Lessor reasonably deems necessary to protect
itself, the public, the Premises and/or the environment against damage,
contamination, injury and/or liability, including, but not limited to, the
installation (and removal on or before Lease expiration or termination) of
protective modifications (such as concrete encasements) and/or increasing the
Security Deposit.

 

(b) Duty to Inform
Lessor. If Lessee knows, or has reasonable cause to believe, that a Hazardous
Substance has come to be located in, on, under or about the Premises, other
than as previously consented to by Lessor, Lessee shall immediately give
written notice of such fact to Lessor, and provide Lessor with a copy of any
report, notice, claim or other documentation which it has concerning the presence
of such Hazardous Substance.

 

(c) Lessee Remediation.
Lessee shall not cause or permit any Hazardous Substance to be spilled or
released in, on, under, or about the Premises (including through the plumbing
or sanitary sewer system) and shall promptly, at Lessee’s expense, comply with
all Applicable Requirements and take all investigatory and/or remedial action
reasonably recommended, whether or not formally ordered or required, for the
cleanup of any contamination of, and for the maintenance, security and/or
monitoring of the Premises or neighboring properties, that was caused or
materially contributed to by Lessee, or pertaining to or involving any
Hazardous Substance brought onto the Premises during the term of this Lease, by
or for Lessee, or any third party.

 

(d) Lessee
Indemnification. Lessee shall indemnify, defend and hold Lessor, its agents,
employees, lenders and ground lessor, if any, harmless from and against any and
all loss of rents and/or damages, liabilities, judgments, claims, expenses, penalties,
and attorneys’ and consultants’ fees arising out of or involving any Hazardous
Substance brought onto the Premises by or for Lessee, its agents, employees, or
contractors or any third party (provided, however, that Lessee shall have no
liability under this Lease with respect to underground migration of any
Hazardous Substance under the Premises from areas outside of the Project not
caused or contributed to by Lessee, or other contamination outside the Premises
caused by third (3rd) parties not
acting on Lessee’s behalf). Lessee’s obligations shall include, but not be
limited to, the effects of any contamination or injury to person, property or
the environment created or suffered by Lessee, and the cost of investigation,
removal, remediation, restoration and/or abatement, and shall survive the
expiration or termination of this Lease. No termination, cancellation or
release agreement entered into by Lessor and Lessee shall release Lessee from
its obligations under this Lease with respect to Hazardous Substances, unless
specifically so agreed by Lessor in writing at the time of such agreement.

 

(e) Lessor
Indemnification. Lessor and its successors and assigns shall indemnify, defend,
reimburse and hold Lessee, its employees and lenders, harmless from and against
any and all environmental damages, including the cost of remediation, which
suffered as a direct result of Hazardous Substances on the Premises prior to
Lessee taking possession or which are caused by the negligence or willful
misconduct of Lessor, its agents or employees. Lessor’s obligations, as and
when required by the Applicable Requirements, shall include, but not be limited
to, the cost of investigation, removal, remediation, restoration and/or
abatement, and shall survive the expiration or termination of this Lease.

 

(f) Investigation and
Remediation. Lessor shall retain the responsibility and pay for any
investigations or remediation measures required by governmental entities having
jurisdiction with respect to the existence of Hazardous Substances on the
Premises, unless such remediation measure is required as a result of Lessee’s
use (including “Alterations”, as defined in Section 7.3(a))
of the Premises, in which event Lessee shall be responsible for

 

8

 

such payment. Lessee shall cooperate fully in any
such activities at the request of Lessor, including allowing Lessor and
Lessor’s agents to have reasonable access to the Premises at reasonable times
in order to carry out Lessor’s investigative and remedial responsibilities.

 

(g) Lessor Termination
Option. If a Hazardous Substance Condition [see Section 9.1(e)] occurs
during the term of this Lease, unless Lessee is legally responsible therefore
(in which case Lessee shall make the investigation and remediation thereof
required by the Applicable Requirements and this Lease shall continue in full
force and effect, but subject to Lessor’s rights under Section 6(2)(d) and
Section 13), Lessor may, at Lessor’s option, either (i) investigate
and remediate such Hazardous Substance Condition, if required, as soon as
reasonably possible at Lessor’s expense, in which event this Lease shall
continue in full force and effect, or (ii) if the estimated cost to
remediate such condition exceeds twelve (12) times the then monthly Base Rent
or One Hundred Thousand Dollars and No Cents ($100,000.00), whichever is less,
give written notice to Lessee, within thirty (30) days after receipt by Lessor
of knowledge of the occurrence of such Hazardous Substance Condition, of
Lessor’s desire to terminate this Lease as of the date sixty (60) days
following the date of such notice. In the event Lessor elects to give a
termination notice, Lessee may, within ten (10) days thereafter, give
written notice to Lessor of Lessee’s commitment to pay the amount by which the
cost of the remediation of such Hazardous Substance Condition exceeds an amount
equal to twelve (12) times the then monthly Base Rent or One Hundred Thousand
Dollars and No Cents ($100,000.00), whichever is less. Lessee shall provide
Lessor with said funds or satisfactory assurance thereof within thirty (30)
days following such commitment. In such event, this Lease shall continue in
full force and effect, and Lessor shall proceed to make such remediation, as
soon as reasonably possible after the required funds are available. If Lessee
does not give such notice and provide the required funds or assurance thereof
within the time provided, this Lease shall terminate as of the date specified
in Lessor’s notice of termination. Lessor shall not terminate this Lease
hereunder unless Lessor also terminates the leases of all other
similarly-situated or similarly-affected Lessees.

 

(3) Lessee’s Compliance with Applicable
Requirements. Except as otherwise provided in this Lease, Lessee shall, at
Lessee’s sole expense, fully, diligently and in a timely manner, materially
comply with all Applicable Requirements, the requirements of any applicable
fire insurance underwriter or rating bureau, and the recommendations of
Lessor’s engineers and/or consultants which relate in any manner to such
Requirements, without regard to whether said Requirements are now in effect or
become effective after the Commencement Date. Lessee shall, within ten (10) days
after receipt of Lessor’s written request, provide Lessor with copies of all
permits and other documents, and other information evidencing Lessee’s
compliance with any Applicable Requirements specified by Lessor, and shall
immediately upon receipt, notify Lessor in writing (with copies of any documents
involved) of any threatened or actual claim, notice, citation, warning,
complaint or report pertaining to or involving the failure of Lessee or the
Premises to comply with any Applicable Requirements. Likewise, Lessee shall
immediately give written notice to Lessor of: (i) any water damage to the
Premises and any suspected seepage, pooling, dampness or other condition
conducive to the production of mold; or (ii) any mustiness or other odors
that might indicate the presence of mold in the Premises.

 

(4) Inspection; Compliance. Lessor and
Lessor’s “Lender” (as defined in Section 30) and
consultants shall have the right to enter into Premises at any time, in the
case of an emergency, and otherwise at reasonable times after reasonable
notice, for the purpose of inspecting the condition of the Premises and for
verifying compliance by Lessee with this Lease. Lessor shall pay the cost of
any such inspections unless a violation of Applicable Requirements, or a
Hazardous Substance condition (see Section 9.1) is found to exist or be
imminent, or the inspection is requested or ordered by a governmental authority
as a result of Lessee’s specific use. In such case, Lessee shall, upon request,
reimburse Lessor for the cost of such inspection, so long as such inspection is
reasonably related to the violation or contamination. In addition, Lessee shall
provide copies of all relevant material safety data sheets (MSDS) to Lessor
within ten (10) days of the receipt of written request therefore.

 

9

 

7.
Maintenance; Repairs; Utility Installations; Trade Fixtures and Alterations.

 

(1) Lessor’s Obligations

 

(a) In General. Subject to the provisions of Section 2.2
(Condition), 2.3 (Compliance), 6.3(Lessee’s Compliance with Applicable
Requirements), 7.2 (Lessor’s Obligations), 9 (Damage or Destruction), and 14
(Condemnation), Lessor, subject to Section 4.2, shall keep in good order,
condition and repair the foundations, roof and roof surface structural ceiling,
floor slab, exterior walls, structural condition of interior bearing walls,
exterior roof, fire sprinkler system, Common Area fire alarm and/or smoke
detection systems, fire hydrants, parking lots, walkways, parkways, driveways,
landscaping, fences, signs and utility systems serving the Common Areas and all
parts thereof, as well as providing the Services pursuant to Section 4.2
including, but not limited to, all equipment or facilities which serve the
Premises, such as plumbing, HVAC equipment, electrical, lighting facilities, boilers,
pressure vessels, fixtures, interior walls, interior surfaces of exterior
walls, ceilings, floors, windows, doors, plate glass, and skylights but
excluding any items which are the responsibility of Lessee pursuant to Section 7.2.
Lessor shall not be obligated to paint the interior surfaces of exterior walls
but shall be obligated to maintain, repair or replace windows, doors or plate
glass of the Premises. Lessee expressly waives the benefit of any statute now
or hereafter in effect to the extent it is inconsistent with the terms of this
Lease.

 

Lessor shall also be responsible for maintaining, repairing and (when
needed) replacing the drains, gutters and downspouts, building facade, any
mechanical, electrical, plumbing or life safety systems which either (i) do
not exclusively serve the Premises, or (ii) are embedded or concealed
within walls or below the floor surface and were not so installed by Lessee.

 

(2) Lessee’s Obligations

 

Lessee shall, at Lessee’s sole expense, keep the Premises, Utility Installations
(intended for Lessee’s exclusive use, no matter where located including but not
limited to additional HVAC or other Utility Installations), and Alterations in
good order, condition and repair (whether or not the portion of the Premises
requiring repairs, or the means of repairing the same, are reasonably or
readily accessible to Lessee, and whether or not the need for such repairs
occurs as a result of Lessee’s use, any prior use, the elements or the age of
such portion of the Premises). Lessee, in keeping the Premises in good order,
condition and repair, shall exercise and perform good maintenance practices,
specifically including the procurement and maintenance of the service contracts
required by Section 7.1(b). Lessee’s obligations shall include
restorations, replacements or renewals when necessary to keep the Premises and
all improvements thereon or a part thereof in good order, condition and state
of repair.

 

(3) Utility Installations; Trade Fixtures; Alterations.

 

(a) Definitions. The term “Utility Installations” refers to all floor
and window coverings, air and/or vacuum lines, power panels, electrical
distribution, security and fire protection systems, communication cabling,
lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises.
The term “Trade Fixtures” shall
mean Lessee’s machinery and equipment that can be removed without doing
material damage to the Premises. The term “Alterations”
shall mean any modification of the improvements, other than Utility
Installations or Trade Fixtures, whether by addition or deletion. “Lessee Owned
Alterations and/or Utility Installations” are defined as Alterations and/or
Utility Installations made by Lessee that are not yet owned by Lessor pursuant
to Section 7.4(a).

 

(b) Consent. Lessee has
previously built out and currently occupies the Premises, but shall not make
any further Alterations or Utility Installations to the Premises without
Lessor’s prior written consent, which shall not be unreasonably withheld.
Lessee may, however, make non-structural Utility Installations to the interior
of the Premises (excluding the roof) without such consent but upon notice to
Lessor, as long as they do not involve puncturing, relocating or removing the
roof or any existing structural walls, will not adversely affect the electrical,
plumbing, HVAC, and/or life safety systems, and the cumulative cost thereof
does not exceed Two Hundred Fifty Thousand Dollars and No Cents ($250,000.00)
in any instance (“Alteration Cap”). Notwithstanding
the foregoing, Lessee shall not make or permit any roof penetrations and/or
install anything on the roof without the prior written approval of Lessor,
which shall not be unreasonably withheld. Lessor may, as a precondition to
granting such approval for roof work, require Lessee to utilize a contractor
chosen and/or

 

10

 

reasonably approved by Lessor, provided the costs are competitive and
reasonable. Any Alterations or Utility Installations that Lessee shall desire
to make and which require the consent of the Lessor shall be presented to
Lessor in written form with detailed plans. Consent shall be deemed conditioned
upon Lessee’s: (i) acquiring all applicable governmental permits, (ii) furnishing
Lessor with copies of both the permits and the plans and specifications prior
to commencement of the work, and (iii) compliance with all conditions of
said permits and other Applicable Requirements in a prompt and expeditious
manner.

 

(c) Signage.                               Lessee shall
have the right to continue to utilize its existing signage on the exterior wall
of the Premises and on the Project’s monument and pylon sign.

 

(d) Liens; Bonds. 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 on the Premises, which
claims are or may be secured by any mechanic’s or materialmen’s lien against
the Premises or any interest therein. Lessee shall give Lessor not less than 10
days notice prior to the commencement of any work in, on or about the Premises,
and Lessor shall have the right to post notices of non-responsibility. If
Lessee shall contest the validity of any such lien, claim or demand, then
Lessee shall, at its sole expense defend and protect itself, Lessor and the
Premises against the same and shall pay and satisfy any such adverse judgment
that may be rendered thereon before the enforcement thereof. If Lessor shall
require, Lessee shall furnish a surety bond in an amount equal to one hundred
fifty percent (150%) of the amount of such contested lien, claim or demand,
indemnifying Lessor against liability for the same. If Lessor elects to
participate in any such action, Lessee shall pay Lessor’s attorneys’ fees and
costs.

 

Any Alterations or Utility Installations, or Signage shall
be performed in a workmanlike manner with good and sufficient materials. Lessee
shall promptly upon completion furnish Lessor with as-built plans and
specifications. For work which costs exceed the Alteration Cap, Lessor may
condition its consent upon Lessee providing a lien and completion bond in an
amount equal to one hundred fifty percent (150%) of the estimated cost of such
Alteration or Utility Installation

 

(4) Ownership; Removal; Surrender; and
Restoration.

 

(a) Ownership. All
Alterations and Utility Installations made by Lessee shall be the property of
Lessee, but considered a part of the Premises. Lessor may, at any time, elect
in writing to be the owner of all or any specified part of the Lessee Owned
Alterations and Utility Installations. All Lessee Owned Alterations and Utility
Installations shall, at the expiration or termination of this Lease, become the
property of Lessor and be surrendered by Lessee with the Premises.

 

(b) Removal. Lessor may
require the removal at any time of all or any part of any Lessee Owned
Alterations or Utility Installations made without the required consent.

 

(c) Surrender;
Restoration. Lessee shall surrender the Premises by the Expiration Date or any
earlier termination date, with all of the improvements, parts and surfaces
thereof broom clean and free of debris, and in good operating order, condition
and state of repair, ordinary wear and tear excepted. “Ordinary wear and tear” shall not include
any damage or deterioration that would have been prevented by good maintenance
practice. Lessee shall repair any damage occasioned by the installation,
maintenance or removal of Trade Fixtures, Lessee owned Alterations and/or
Utility Installations, furnishings, and equipment as well as the removal of any
storage tank installed by or for Lessee. Lessee shall also completely remove
from the Premises any and all Hazardous Substances brought onto the Premises by
or for Lessee, (except Hazardous Substances which were deposited via
underground migration from areas outside of the Premises or caused by any third
party not acting on Lessee’s behalf) even if such removal would require Lessee
to perform or pay for work that exceeds statutory requirements. Trade Fixtures
shall remain the property of Lessee and shall be removed by Lessee. Any
personal property of Lessee not removed on or before the Expiration Date or any
earlier termination date shall be deemed to have been abandoned by Lessee and
may be disposed of or retained by Lessor as Lessor may desire. The failure by
Lessee to timely vacate the Premises pursuant to this Section 7.4(c) without
the express written consent of Lessor shall constitute a holdover under the
provisions of Section 26.

 

11

 

8.                                                                Insurance;
Indemnity.

 

(1) Payment of Insurance Costs.

 

(a) As used herein, the term “Insurance Costs” is defined as any actual
costs of the insurance applicable to the Building and/or the Project and
required to be carried by Lessor, pursuant to Sections 8.2(b), 8.3(a) and
8.3(b), (“Required
Insurance”) calculated on an annual basis. Insurance Costs shall
include, but not be limited to, requirements of the holder of a mortgage or
deed of trust covering the Premises, Building and/or Project, increased valuation
of the Premises, Building and/or Project, prorata share of the total deductible
paid by Lessor in the event of a claim provided that the total deductible in no
event is greater than Five Thousand Dollars and No Cents ($5000.00), and/or a
general premium rate increase. The term Insurance Costs shall not, however,
include any premium increases resulting from the nature of the occupancy of any
other Lessee of the Building.

 

(b) Lessee shall pay Lessee’s
Share of the Insurance Costs as part of Services to Lessor pursuant to Section 4.
Premiums for policy periods commencing prior to, or extending beyond, the term
of this Lease shall be prorated to coincide with the corresponding Commencement
Date or Expiration Date.

 

(2) Liability Insurance.

 

(a) Carried by Lessee. Lessee
shall obtain and keep in force a Commercial General Liability policy of
insurance protecting Lessee and Lessor as an additional insured against claims
for bodily injury, personal injury and property damage based upon or arising
out of the ownership, use, occupancy or maintenance of the Premises and all
areas appurtenant thereto. Such insurance shall be on an occurrence basis
providing single limit coverage in an amount not less than $2,000,000 per
occurrence with an annual aggregate of not less than $2,000,000. Lessee shall
add Lessor as an additional insured by means of an endorsement at least as
broad as the Insurance Service Organization’s “Additional
Insured-Managers or Lessors of Premises” Endorsement and coverage
shall also be extended to include damage caused by heat, smoke or fumes from a
hostile fire. The policy shall not contain any intra-insured exclusions as
between insured persons or organizations, but shall include coverage for
liability assumed under this Lease as an “insured contract” for the performance
of Lessee’s indemnity obligations under this Lease. The limits of said insurance
shall not, however, limit the liability of Lessee nor relieve Lessee of any
obligation hereunder. Lessee shall provide an endorsement on its liability
policy(ies) which provides that its insurance shall be primary to and not
contributory with any similar insurance carried by Lessor, whose insurance
shall be considered excess insurance only.

 

(b) Carried by Lessor. Lessor
shall maintain liability insurance as described in Section 8.2(a), in
addition to, and not in lieu of, the insurance required to be maintained by Lessee.
Lessee shall not be named as an additional insured therein.

 

(3) Property Insurance - Building,
Improvements.

 

(a) Building and Improvements.
Lessor shall obtain and keep in force a policy or policies of insurance in the
name of Lessor, with loss payable to Lessor, any ground-lessor, and to any
Lender insuring loss or damage to the Premises, the Building, and the common
areas. The amount of such insurance shall be equal to the full insurable
replacement cost of the same, as the same shall exist from time to time, or the
amount required by any Lender, but in no event more than the commercially
reasonable and available insurable value thereof. Lessee Owned Alterations and
Utility Installations, Trade Fixtures, and Lessee’s personal property shall be
insured by Lessee under Section 8.4. If the coverage is available and
commercially appropriate, such policy or policies shall insure against all
risks of direct physical loss or damage (except the perils of flood and/or
earthquake unless required by a Lender), including coverage for debris removal
and the enforcement of any Applicable Requirements requiring the upgrading,
demolition, reconstruction or replacement of any portion of the Premises as the
result of a covered loss. Said policy or policies shall also contain an agreed
valuation provision in lieu of any coinsurance clause, waiver of subrogation,
and inflation guard protection causing an increase in the annual property
insurance coverage amount by a factor of not less than the adjusted U.S.
Department of Labor Consumer Price Index for All Urban Consumers for the city
nearest to where the Premises are located. If such insurance coverage has a
deductible clause, the deductible amount shall not exceed Five Thousand Dollars
and No Cents ($5,000.00) per occurrence.

 

12

 

(b) Lessee’s
Improvements. Lessor shall not be required to insure Lessee Owned Alterations
and Utility Installations unless the item in question has become the property
of Lessor under the terms of this Lease.

 

(4) Lessee’s Property; Business Interruption
Insurance.

 

(a) Property Damage. Lessee
shall obtain and maintain insurance coverage on all of Lessee’s personal
property, Trade Fixtures, and Lessee Owned Alterations and Utility
Installations. Such insurance shall be full replacement cost coverage with a
deductible of not to exceed Ten Thousand Dollars and No Cents ($10,000.00) per
occurrence. Lessee shall use the proceeds from any such insurance for the
replacement of personal property, Trade Fixtures and Lessee Owned Alterations
and Utility Installations. Lessee shall provide Lessor with written evidence
that such insurance is in force.

 

(b) Business Interruption.
Lessee shall obtain and maintain loss of income and extra expense insurance in
amounts that will reimburse Lessee for direct or indirect loss of earnings
attributable to all perils commonly insured against by prudent lessees in the
business of Lessee or attributable to loss of access to the Premises as a
result of such perils.

 

(c) No Representation of
Adequate Coverage. Lessor makes no representation that the limits or forms of
coverage of insurance specified herein are adequate to cover Lessee’s property,
business operations or obligations under this Lease.

 

(5) Insurance Policies. Insurance required
herein shall be by companies duly licensed or admitted to transact business in
the state where the Premises are located, and maintaining during the policy
term a “General Policyholders Rating” of
at least A-, VI, as set forth in the most current issue of “Best’s Insurance Guide” or such other
rating as may be required by a Lender. Lessee shall not do or permit to be done
anything that invalidates the required insurance policies. Lessee shall, prior
to the Delivery Date, deliver to Lessor certified copies of policies of such
insurance or certificates evidencing the existence and amounts of the required
insurance. No such policy shall be cancelable or subject to modification except
after thirty (30) days prior written notice to Lessor. Lessee shall, at least
10 days prior to the expiration of such policies, furnish Lessor with evidence
of renewals or “insurance binders” evidencing renewal thereof, or Lessor may
order such insurance and charge the cost thereof to Lessee, which amount shall
be payable by Lessee to Lessor upon demand. Such policies shall be for a term
of at least one year, or the length of the remaining term of this Lease,
whichever is less. If either Party shall fail to procure and maintain the
insurance required to be carried by it, the other Party may, but shall not be
required to, procure and maintain the same.

 

(6) Waiver of Subrogation. Without affecting any
other rights or remedies, Lessee and Lessor each hereby release and relieve the
other, and waive their entire right to recover damages against the other, for
loss of or damage to its property arising out of or incident to the perils
required to be insured against herein. The effect of such releases and waivers
is not limited by the amount of insurance carried or required or by any
deductibles applicable hereto. The Parties agree to have their respective
property damage insurance carriers waive any right to subrogation that such
companies may have against Lessor or Lessee, as the case may be, so long as the
insurance is not invalidated thereby.

 

(7) Indemnity. Except for Lessor’s gross
negligence or willful misconduct, Lessee shall indemnify, protect, defend and
hold harmless the Premises, Lessor and its agents, Lessor’s master or ground
lessor, partners and Lenders, from and against any and all claims, loss of
rents and/or damages, liens, judgments, penalties, attorneys’ and consultants’
fees, expenses and/or liabilities arising out of, involving, or in connection
with, the use and/or occupancy of the Premises or Common Areas by Lessee. If
any action or proceeding is brought against Lessor by reason of any of the
foregoing matters without any actual fault by Lessor, Lessee shall upon notice
defend the same at Lessee’s expense by counsel reasonably satisfactory to
Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need not
have first paid any such claim in order to be defended or indemnified.

 

Notwithstanding the
foregoing, (i) Lessee shall not be obligated to indemnify or defend Lessor
in any action arising out of the gross negligence or willful misconduct of
Lessor, its agents, employees or contractors, and (ii) Lessor shall
indemnify, hold harmless and defend Lessee from and against any and all claims
arising out of incidents occurring in the Common Areas which are not the result
of the negligence or misconduct of Lessee.

 

13

 

(8) Exemption of Lessor and its Agents from
Liability. Unless caused by the negligence, willful misconduct or breach of
this Lease by Lessor or its agents, neither Lessor nor its agents shall be
liable under any circumstances for: (i) injury or damage to the person or
goods, wares, merchandise or other property of Lessee, Lessee’s employees,
contractors, invitees, customers, or any other person in or about the Premises,
whether such damage or injury is caused by or results from fire, steam,
electricity, gas, water or rain, indoor air quality, the presence of mold or
from the breakage, leakage, obstruction or other defects of pipes, fire
sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any
other cause, whether the said injury or damage results from conditions arising
upon the Premises or upon other portions of the Building, or from other sources
or places, (ii) any damages arising from any act or neglect of any other
Lessee of Lessor or from the failure of Lessor or its agents to enforce the
provisions of any other lease in the Project, or (iii) injury to Lessee’s
business or for any loss of income or profit therefrom. Instead, it is intended
that Lessee’s sole recourse in the event of such damages or injury be to file a
claim on the insurance policy (ies) that Lessee is required to maintain
pursuant to the provisions of Section 8.

 

(9) Failure to Provide Insurance. Lessee
acknowledges that any failure on its part to obtain or maintain the insurance
required herein will expose Lessor to risks and potentially cause Lessor to
incur costs not contemplated by this Lease, the extent of which will be
extremely difficult to ascertain. Accordingly, for any month or portion thereof
that Lessee does not maintain the required insurance and/or does not provide Lessor
with the required binders or certificates evidencing the existence of the
required insurance, the Base Rent shall be automatically increased, without any
requirement for notice to Lessee, by an amount equal to ten percent (10%) of
the then existing Base Rent. The parties agree that such increase in Base Rent
represents fair and reasonable compensation for the additional risk/costs that
Lessor will incur by reason of Lessee’s failure to maintain the required
insurance. Such increase in Base Rent shall in no event constitute a waiver of
Lessee’s Default or Breach with respect to the failure to maintain such
insurance, prevent the exercise of any of the other rights and remedies granted
hereunder, nor relieve Lessee of its obligation to maintain the insurance
specified in this Lease.

 

9.                                                                 Damage or
Destruction.

 

(1) Definitions.

 

(a)            “Premises
Partial Damage” shall mean damage or destruction to the improvements
on the Premises, other than Lessee Owned Alterations and Utility Installations,
which can reasonably be repaired in six (6) months or less from the date
of the damage or destruction. Lessor shall notify Lessee in writing within
thirty (30) days from the date of the damage or destruction as to whether or
not the damage is Partial or Total. Notwithstanding the foregoing, Premises
Partial Damage shall not include damage to windows, doors, and/or other similar
items that Lessee has the responsibility to repair or replace pursuant to the
provisions of Section 7.1.

 

(b)           “Premises
Total Destruction” shall mean damage or destruction to the improvements
on the Premises, other than Lessee Owned Alterations and Utility Installations
and Trade Fixtures, which cannot reasonably be repaired in twelve (12) months
but not less than 6 months from the date of the damage or destruction. Lessor
shall notify Lessee in writing within thirty (30) days from the date of the
damage or destruction as to whether or not the damage is Partial or Total.

 

(c)            “Insured
Loss” shall mean damage or destruction to improvements on the Premises, other
than Lessee Owned Alterations and Utility Installations and Trade Fixtures,
which was caused by an event actually covered or required to be covered by the
insurance described in Section 8.3 (a), irrespective of any deductible
amounts or coverage limits involved.

 

(d)           “Replacement
Cost” shall mean the cost to repair or rebuild the improvements owned by
Lessor at the time of the occurrence to their condition existing immediately
prior thereto, including demolition, debris removal and upgrading required by
the operation of Applicable Requirements, and without deduction for
depreciation.

 

(e)            “Hazardous
Substance Condition” shall mean the occurrence or discovery of a
condition involving the presence of, or a contamination by, a Hazardous
Substance as defined in Section 6.2 (a), in, on, or under the Premises
which requires repair, remediation, or restoration.

 

(2) Partial Damage -
Insured Loss. If a Premises Partial Damage that is an Insured Loss occurs, then
Lessor shall, at Lessor’s expense, repair such damage (but not Lessee’s Trade
Fixtures or Lessee Owned Alterations and Utility Installations) as soon as
reasonably possible and

 

14

 

this
Lease shall continue in full force and effect; provided, however, that Lessee
shall, at Lessor’s election, make the repair of any damage or destruction the
total cost to repair of which is Ten Thousand Dollars and No Cents ($10,000.00)
or less, and, in such event, Lessor shall make any applicable insurance
proceeds available to Lessee on a reasonable basis for that purpose.
Notwithstanding the foregoing, if the required insurance was not in force or
the insurance proceeds are not sufficient to affect such repair, the Party
responsible for providing such insurance shall promptly contribute the shortage
in proceeds as and when required to complete said repairs. In the event,
however, such shortage was due to the fact that, by reason of the unique nature
of the improvements, full replacement cost insurance coverage was not commercially
reasonable and available, Lessor shall have no obligation to pay for the
shortage in insurance proceeds or to fully restore the unique aspects of the
Premises unless Lessee provides Lessor with the funds to cover same, or
adequate assurance thereof, within 10 days following receipt of written notice
of such shortage and request therefore. If Lessor receives said funds or
adequate assurance thereof within said ten (10) day period, the party
responsible for making the repairs shall complete them as soon as reasonably
possible and this Lease shall remain in full force and effect. If such funds or
assurance are not received, Lessor may nevertheless elect by written notice to
Lessee within ten (10) days thereafter to: (i) make such restoration
and repair as is commercially reasonable with Lessor paying any shortage in
proceeds, in which case this Lease shall remain in full force and effect, or (ii) have
this Lease terminate thirty (30) days thereafter. Lessee shall not be entitled
to reimbursement of any funds contributed by Lessee to repair any such damage
or destruction. Premises Partial Damage due to flood or earthquake shall be
subject to Section 9.3, notwithstanding that there may be some insurance
coverage, but the net proceeds of any such insurance shall be made available
for the repairs if made by either Party.

 

(3) Partial Damage -
Uninsured Loss. If a Premises Partial Damage that is not an Insured Loss
occurs, unless caused by a negligent or willful act of Lessee (in which event
Lessee shall make the repairs at Lessee’s expense), Lessor may either: (i) repair
such damage as soon as reasonably possible at Lessor’s expense, in which event
this Lease shall continue in full force and effect, or (ii) terminate this
Lease by giving written notice to Lessee within thirty (30) days after receipt
by Lessor of knowledge of the occurrence of such damage. Lessor shall not
terminate this Lease hereunder unless Lessor also terminates the leases of all
other similarly-situated or similarly-affected Lessees. Such termination shall
be effective thirty (30) days following the date of such notice. In the event
Lessor elects to terminate this Lease, Lessee shall have the right within ten (10) days
after receipt of the termination notice to give written notice to Lessor of
Lessee’s commitment to pay for the repair of such damage without reimbursement
from Lessor. Lessee shall provide Lessor with said funds or satisfactory
assurance thereof within thirty (30) days after making such commitment. In such
event this Lease shall continue in full force and effect, and Lessor shall
proceed to make such repairs as soon as reasonably possible after the required
funds are available. If Lessee does not make the required commitment, this
Lease shall terminate as of the date specified in the termination notice.

 

(4) Total Destruction.
Notwithstanding any other provision hereof, if a Premises Total Destruction
occurs, this Lease shall terminate thirty (30) days following such Destruction.
If the damage or destruction was caused by the negligence or willful misconduct
of Lessee, Lessor shall have the right to recover Lessor’s damages from Lessee,
except as provided in Section 8.6.

 

(5) Damage Near End of Term.
If at any time during the last 6 months of this Lease there is damage for which
the cost to repair exceeds six (6) month’s Base Rent, whether or not an
Insured Loss, Lessor or Lessee may terminate this Lease effective thirty (30)
days following the date of occurrence of such damage by giving a written
termination notice to Lessee within thirty (30) days after the date of
occurrence of such damage. Notwithstanding the foregoing, if Lessee at that
time has an exercisable option to extend this Lease, then Lessee may preserve
this Lease by, (a) exercising such option and (b) providing Lessor with any
shortage in insurance proceeds (or adequate assurance thereof) needed to make
the repairs on or before the earlier of (i) the date which is ten (10) days
after Lessee’s receipt of Lessor’s written notice purporting to terminate this
Lease, or (ii) the day prior to the date upon which such option expires. If
Lessee duly exercises such option during such period and provides Lessor with
funds (or adequate assurance thereof) to cover any shortage in insurance
proceeds, Lessor shall, at Lessor’s commercially reasonable expense, repair
such damage as soon as reasonably possible and this Lease shall continue in
full force and effect. If Lessee fails to exercise such option and provide such
funds or assurance during such period, then this Lease shall terminate on the
date specified in the termination notice and Lessee’s option shall be
extinguished.

 

15

 

Notwithstanding anything to the contrary contained in this Lease, Lessee
shall have the right to cancel this Lease upon written notice to Lessor in the
event any damage to the Premises cannot be repaired within twelve (12) months
from the date of loss.

 

(6) Abatement of Rent; Lessee’s Remedies.

 

(a) Abatement. In the event
of Premises Partial Damage or Premises Total Destruction or a Hazardous
Substance Condition for which Lessee is not responsible under this Lease, the
Rent payable by Lessee for the period required for the repair, remediation or restoration
of such damage shall be equitably abated in proportion to the degree to which Lessee’s
use of the Premises is impaired, but not to exceed the proceeds received from
the Rental Value insurance. Lessee shall perform all other obligations of
Lessee, and Lessor shall have no liability for any such damage, destruction,
remediation, repair or restoration except as provided herein.

 

(b) Remedies. If Lessor shall
be obligated to repair or restore the Premises and does not commence, in a
substantial and meaningful way, such repair or restoration within 90 days after
such obligation shall accrue, Lessee may, at any time prior to the commencement
of such repair or restoration, give written notice to Lessor and to any Lenders
of which Lessee has actual notice, of Lessee’s election to terminate this Lease
on a date not less than sixty (60) days following the giving of such notice. If
Lessee gives such notice and such repair or restoration is not commenced within
thirty (30) days thereafter, this Lease shall terminate as of the date
specified in said notice. If the repair or restoration is commenced within such
thirty (30) days, this Lease shall continue in full force and effect. “Commence” shall mean either the
unconditional authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever first occurs.

 

(7) Termination; Advance
Payments. Upon termination of this Lease pursuant to Section 6.2(g) or
Section 9, an equitable adjustment shall be made concerning advance Base
Rent and any other advance payments made by Lessee to Lessor. Lessor shall, in
addition, return to Lessee so much of Lessee’s Security Deposit as has not
been, or is not then required to be, used by Lessor.

 

(8) Waive Statutes. Lessor
and Lessee agree that the terms of this Lease shall govern the effect of any
damage to or destruction of the Premises with respect to the termination of
this Lease and hereby waive the provisions of any present or future statute to
the extent inconsistent herewith.

 

10.                                                          Real Property
Taxes.

 

(1) Definitions.

 

(a) “Real Property Taxes.” As used
herein, the term “Real Property Taxes” shall include any form of assessment;
real estate, general, special, ordinary or extraordinary, or rental levy or tax
(other than inheritance, personal income or estate taxes); improvement bond;
and/or license fee imposed upon or levied against any legal or equitable
interest of Lessor in the Project, by any authority having the direct or
indirect power to tax and where the funds are generated with reference to the
Project address and where the proceeds so generated are to be applied by the
city, county or other local taxing authority of a jurisdiction within which the
Project is located. The term “Real Property Taxes” shall also include any tax,
fee, levy, assessment or charge, or any increase therein: (i) imposed by
reason of events occurring during the term of this Lease, including but not
limited to, a change in the ownership of the Project, (ii) a change in the
improvements thereon, and/or (iii) levied or assessed on machinery or
equipment provided by Lessor to Lessee pursuant to this Lease.

 

Lessee shall not be required to pay its share of any penalties,
interest, late payments or the like resulting from Lessor’s late payment of
taxes. In the event any taxes or assessments are payable over time without
penalty to Lessor, Lessee’s pro rata share thereof shall be calculated as if
such assessments were being paid by Lessor over the longest period of time
permitted by applicable law. In no event shall Lessee be responsible to pay any
rent taxes (except to the extent the same are directly assessed against Lessee
by the taxing authority), gross sales taxes, franchise taxes, capital stock
taxes, inheritance, estate, succession, transfer, gift or other tax which is
measured in any manner by the income or profit of Lessor, or any portion of any
special assessment first assessed prior to the Commencement Date to fund, in
whole or in part, the construction, development, redevelopment or renovation of
the Project.

 

16

 

(2) Payment of Taxes. Except as otherwise
provided in Section 10.3, Lessor shall pay the Real Property Taxes
applicable to the Project and said payments shall be included in the
calculation of Lessee’s Share with respect to the costs for Services in accordance
with the provisions of Section 4.

 

(3) Additional Improvements. Costs for
Services shall not include Real Property Taxes specified in the tax assessor’s
records and work sheets as being caused by additional improvements placed upon
the Project by other lessees or by Lessor for the exclusive enjoyment of such
other lessees. Notwithstanding Section 10(2) hereof, Lessee shall,
however, pay to Lessor at the time the costs for Services are payable under Section 4,
the entirety of any increase in Real Property Taxes if assessed solely by
reason of Alterations, Trade Fixtures or Utility Installations placed upon the
Premises by Lessee or at Lessee’s request or by reason of any alterations or
improvements to the Premises made by Lessor subsequent to the execution of this
Lease by the Parties.

 

(4) Joint Assessment. If the Building is not
separately assessed, Real Property Taxes allocated to the Building shall be an
equitable proportion of the 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, absent a
good-faith objection by Lessee.

 

(5) Personal Property Taxes. Lessee shall pay
prior to delinquency all taxes assessed against and levied upon Lessee Owned
Alterations and Utility Installations, Trade Fixtures, furnishings, equipment
and all personal property of Lessee contained in the Premises. When possible,
Lessee shall cause its Lessee Owned Alterations and Utility Installations,
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 property shall be assessed with Lessor’s real property, Lessee
shall pay Lessor the taxes attributable to Lessee’s property within ten (10) days
after receipt of a written statement setting forth the taxes applicable to
Lessee’s property.

 

11.                                                          Utilities and
Services.

 

Lessee shall pay for all commercially reasonable amounts of water, gas,
heat, light, power supplied to the Premises, together with any taxes thereon.
Notwithstanding the provisions of Section 4, if at any time in Lessor’s
sole judgment, Lessor determines that Lessee is generating such a large volume
of trash as to require an increase in the size of the trash receptacle and/or
an increase in the number of times per month that it is emptied, then Lessor
may increase Lessee’s Base Rent by an amount equal to such increased costs.
Lessor shall not be liable in any respect whatsoever (other than providing the
equitable abatement of rent) for the inadequacy, stoppage, interruption or
discontinuance of any utility or service due to riot, strike, labor dispute,
breakdown, accident, repair or other cause beyond Lessor’s reasonable control
or in cooperation with governmental request or directions.

 

Notwithstanding anything to the contrary contained in this Lease, in the
event of any interruption in any utility service due to the negligence or
willful misconduct of Lessor, its agents, employees or contractors, which
interruption renders the Premises wholly or partially unusable for the
reasonable operation of Lessee’s business therein for a period of forty-eight
(48) consecutive hours, Rent shall thereafter equitably abate during such
period in proportion to the degree to which Lessee’s use of the Premises is
impaired.

 

Lessee, at its sole option and discretion and at Lessee’s sole cost and
expense, shall have the right to install separate check meters to measure
utilities actually consumed at the Premises, and if Lessee does so, from and
after the date of such installation, Lessee’s utility charges shall be based
upon actual consumption of utilities as measured by Lessee’s check meter(s).

 

12.                                                          Assignment and
Subletting.

 

(1) Lessor’s Consent Required.

 

(a) Lessee shall not
voluntarily or by operation of law assign, transfer, mortgage or encumber
(collectively, “assign or assignment”) or sublet all or any part of
Lessee’s interest in this Lease or in the Premises without Lessor’s prior
written consent, which shall not be unreasonably withheld, delayed or
conditioned.

 

(b) So long as the Premises
continue to be operated according to Article 6, no change in the control
of Lessee shall constitute an assignment requiring consent.

 

17

 

(c) Intentionally Deleted

 

(d) An assignment or
subletting without consent shall, be a Default curable after notice per Section 13.1(c).
Further, in the event such Default is not timely cured, Lessor, at Lessor’s
option may either 1) terminate the Lease without necessity of any notice or
grace period, or 2) provide that all fixed and non-fixed rental adjustments
scheduled during the remainder of the Lease term shall be increased to one
hundred ten percent (110%) of the scheduled adjusted rent.

 

(e) Lessee’s remedy for any
breach of Section 12.1 by Lessor shall be limited to compensatory damages
and/or injunctive relief,

 

(f) Lessor may reasonably
withhold consent to a proposed assignment or subletting if Lessee is in Default
at the time consent is requested.

 

(g) Notwithstanding the
foregoing, allowing a diminimus portion of the Premises, ie. 20 square feet or
less, to be used by a third party vendor in connection with the installation of
a vending machine or payphone shall not constitute a subletting.

 

(2) Terms and Conditions Applicable to Assignment and Subletting.

 

(a) Regardless of Lessor’s
consent, no assignment or subletting shall: (i) be effective without the
express written assumption by such assignee or sublessee of the obligations of
Lessee under this Lease, (ii) release Lessee of any obligations hereunder,
or (iii) alter the primary liability of Lessee for the payment of Rent or
for the performance of any other obligations to be performed by Lessee.

 

(b) Lessor may accept Rent or
performance of Lessee’s obligations from any person other than Lessee pending
approval or disapproval of an assignment. Neither a delay in the approval or
disapproval of such assignment nor the acceptance of Rent or performance shall
constitute a waiver or estoppel of Lessor’s right to exercise its remedies for
Lessee’s Default or Breach.

 

(c) Lessor’s consent to any
assignment or subletting shall not constitute a consent to any subsequent
assignment or subletting.

 

(d) In the event of any
Default or Breach by Lessee, Lessor may proceed directly against Lessee, any
Guarantors or anyone else responsible for the performance of Lessee’s
obligations under this Lease, including any assignee or sublessee, without
first exhausting Lessor’s remedies against any other person or entity
responsible therefore to Lessor, or any security held by Lessor.

 

(e) Each request for consent
to an assignment or subletting shall be in writing, accompanied by information
relevant to Lessor’s determination as to the financial and operational
responsibility and appropriateness of the proposed assignee or sublessee, including
but not limited to the intended use and/or required modification of the
Premises, if any, together with a fee of Five Hundred Dollars and No Cents
($500.00) as consideration for Lessor’s considering and processing said
request. Lessee agrees to provide Lessor with such other or additional
information and/or documentation as may be reasonably requested.

 

(f) Any assignee of, or
sublessee under, this Lease shall, by reason of accepting such assignment,
entering into such sublease, or entering into possession of the Premises or any
portion thereof, be deemed to have assumed and agreed to conform and comply
with each and every term, covenant, condition and obligation herein to be
observed or performed by Lessee during the term of said assignment or sublease,
other than such obligations as are contrary to or inconsistent with provisions
of an assignment or sublease to which Lessor has specifically consented to in
writing.

 

(g) Lessor’s consent to any
assignment or subletting shall not transfer to the assignee or sublessee any
Option granted to the original Lessee by this Lease unless such transfer is specifically
consented to by Lessor in writing in Lessor’s sole and absolute discretion.

 

Notwithstanding anything to
the contrary in this Lease, Lessee shall have the right, without need of
Lessor’s prior consent, to assign this Lease or to sublet all or any portion of

 

18

 

the Premises to (i) any person or entity acquiring all or
substantially all of Lessee’s corporate stock or assets, (ii) the
surviving entity in any merger, reorganization or consolidation, (iii) any
parent, affiliate, subsidiary of Lessee, or to any duly authorized, bona-fide
franchisee, licensee, agent or distributor of either of them, or (iv) if
this Lease has been assigned to such franchisee, licensee, agent or
distributor, such party may assign this Lease to its franchisor, licensor, or
supplier. The foregoing are hereinafter collectively referred to as “Permitted
Transferees”, and an assignment or sublease to or with a Permitted Transferee
is hereinafter referred to as a “Permitted
Transfer”. Any and all options granted to Lessee under any of the
provision(s) of this Lease may be exercised by a Permitted Transferee.
Lessee’s right to enter into a Permitted Transfer shall be subject to the
following conditions:

 

(a)        Lessee shall provide Lessor
with a fully-executed copy of the applicable sublease or assignment upon the
closing of such transaction;

 

(b)       Lessee’s Permitted Transferee
shall (in the case of an assignment of this Lease) assume in writing for
benefit of Lessor, in a form and substance reasonably acceptable to Lessor, all
obligations imposed under this Lease upon Lessee, and any sublease to a
Permitted Transferee shall be subordinate and subject to the terms, covenants
and conditions of this Lease;

 

(c)        All past due sums owing under
this Lease shall be paid to Lessor concurrent with the closing of any Permitted
Transfer;

 

(d)       Lessee shall promptly provide
Lessor with such business and financial information on the Permitted Transferee
as Lessor may reasonably request;

 

(e)        No Permitted Transfer shall
relieve Lessee of Lessee’s ongoing primary liability and responsibility for
performance of all of the terms, covenants and conditions of this Lease.

 

All proceeds received by Lessee in connection with any assignment or
subletting shall belong to Lessee. Lessee shall be entitled to retain all
consideration paid to Lessee on account of Lessee’s good will, fixtures,
furnishings, equipment, inventory, and intangibles such as trademarks,
intellectual property, receivables, etc. Any and all rights granted to Lessee
under this Lease may be exercised by a Permitted Transferee, or by any assignee
or sublessee who has been approved by Lessor.

 

If Lessor does not respond to any request for Lessor’s consent hereunder
within thirty (30) days of Lessor’s receipt thereof, and any additional
information reasonably requested by Lessor to consider Lessee’s request, Lessor
shall be deemed to have consented to the proposed transfer, assignment or
subletting.

 

(3) Additional Terms and
Conditions Applicable to Subletting. The following terms and conditions shall
apply to any subletting by Lessee of all or any part of the Premises and shall
be deemed included in all subleases under this Lease whether or not expressly
incorporated therein:

 

(a) Lessee hereby
assigns and transfers to Lessor all of Lessee’s interest in all Rent payable on
any sublease, and Lessor may collect such Rent and apply same toward Lessee’s
obligations under this Lease; provided, however, that until a Breach shall
occur in the performance of Lessee’s obligations, Lessee may collect said Rent.
In the event that the amount collected by Lessor exceeds Lessee’s then
outstanding obligations any such excess shall be refunded to Lessee. Lessor
shall not, by reason of the foregoing or any assignment of such sublease, nor
by reason of the collection of Rent, be deemed liable to the sublessee for any
failure of Lessee to perform and comply with any of Lessee’s obligations to
such sublessee. Lessee hereby irrevocably authorizes and directs any such
sublessee, upon receipt of a written notice from Lessor stating that a Breach
exists in the performance of Lessee’s obligations under this Lease, to pay to
Lessor all Rent due and to become due under the sublease. Sublessee shall rely
upon any such notice from Lessor and shall pay all Rents to Lessor without any
obligation or right to inquire as to whether such Breach exists, notwithstanding
any claim from Lessee to the contrary.

 

(b) In the event of a
Breach by Lessee, Lessor may, at its option, (i) require sublessee to
attorn to Lessor, in which event Lessor shall undertake the obligations of the sublessor
under such sublease from the time of the exercise of said option to the
expiration of such sublease or (ii) terminate the sublease and provided,
however, Lessor shall not be liable for any prepaid rents or security deposit
paid by such sublessee to such sublessor or for any prior Defaults or Breaches
of such sublessor.

 

19

 

(c) (Any matter
requiring the consent of the sublessor under a sublease shall also require the
consent of Lessor.

 

(d) No sublessee shall
further assign or sublet all or any part of the Premises without first
complying with the provisions of this Article 12.

 

Lessee
shall continue to be primarily obligated for all rentals and other charges for
the term of the Lease and pursuant to such other terms and conditions contained
in the Lease and shall continue to be primarily obligated for all rentals and
other charges for the term of any sublease which Lessee executes for the entire
term of such sublease in the event Lessee’s guarantee obligations under this
Lease expire prior to the expiration of such sublease term.

 

13.                                                         Default; Breach;
Remedies.

 

(1) Default; Breach. A “Default” is defined as a failure by the
Lessee to comply with or perform any of the terms, covenants, conditions or Rules and
Regulations under this Lease. A “Breach” is defined as the occurrence of one or
more of the following Defaults, and the failure of Lessee to cure such Default
within any applicable grace period:

 

(a) The abandonment of
the Premises; or the vacating of the Premises without providing a commercially
reasonable level of security, or where the coverage of the property insurance
described in Section 8(3) is jeopardized as a result thereof, or
without providing reasonable assurances to minimize potential vandalism. Lessee
shall not be deemed to have abandoned the Premises nor shall Lessee be in
violation of this Lease in the event that the Premises are closed (i) for
repairs, renovation or remodeling, or (ii) by reason of Force Majeure,
casualty or condemnation, or (iii) when such absence is excused under any
provision of this Lease, or (iv) at any time that Lessee is in good faith
negotiations for a potential assignment of this Lease or a subletting of the
Premises.

 

(b) The failure of
Lessee to make any payment of Rent or any Security Deposit required to be made
by Lessee hereunder, whether to Lessor or to a third party, when due, to
provide reasonable evidence of insurance or surety bond, or to fulfill any
obligation under this Lease which endangers or threatens life or property,
where such failure continues for a period of 3 business days following written
notice to Lessee.

 

(c) The commission of
waste act or acts constituting public or private nuisance, and/or an illegal
activity on the Premises by Lessee, where such actions continue for a period of
10 business days following written notice to Lessee.

 

(d) The failure by
Lessee to provide (i) reasonable written evidence of compliance with
Applicable Requirements, (ii) the service contracts, (iii) the
rescission of an unauthorized assignment or subletting, (iv) an Estoppel
Certificate, (v) a requested subordination, (vi) evidence concerning
any guaranty and/or Guarantor, (vii) any document requested under Section 41,
(viii) material data safety sheets (MSDS), or (ix) any other
documentation or information which Lessor may reasonably require of Lessee
under the terms of this Lease, where any such failure continues for a period of
ten (10) days following written notice to Lessee.

 

(e) A Default by Lessee as to
the terms, covenants, conditions or provisions of this Lease, or of the rules adopted
under Section 2.9 hereof, other than those described in subsections 13(1)(a),
(b), (c) or (d), above, where such Default continues for a period of 30 days
after written notice; provided, however, that if the nature of Lessee’s Default
is such that more than thirty (30) days are reasonably required for its cure,
then it shall not be deemed to be a Breach if Lessee commences such cure within
said thirty (30) day period and thereafter diligently prosecutes such cure to
completion.

 

(f) The occurrence of
any of the following events: (i) the making of any general arrangement or
assignment for the benefit of creditors; (ii) becoming a “debtor” as defined in 11 U.S.C. § 101 or
any successor statute thereto (unless, in the case of a petition filed against
Lessee, the same is dismissed within sixty (60) days); (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 thirty (30) 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 thirty (30) days; provided,
however, in

 

20

 

the event that any provision of this subsection is
contrary to any applicable law, such provision shall be of no force or effect,
and not affect the validity of the remaining provisions.

 

(g) The discovery that
any financial statement of Lessee or of any Guarantor given to Lessor was
materially false.

 

(h) If the performance
of Lessee’s obligations under this Lease is guaranteed: (i) the death of a
Guarantor, (ii) the termination of a Guarantor’s liability with respect to
this Lease other than in accordance with the terms of such guaranty, (iii) a
Guarantor’s becoming insolvent or the subject of a bankruptcy filing, (iv) a
Guarantor’s refusal to honor the guaranty, or (v) a Guarantor’s breach of
its guaranty obligation on an anticipatory basis, and Lessee’s failure, within
sixty (60) days following written notice of any such event, to provide written
alternative assurance or security, which, when coupled with the then existing
resources of Lessee, equals or exceeds the combined financial resources of
Lessee and the Guarantors that existed at the time of execution of this Lease.

 

(2) Remedies. If Lessee fails to perform any of
its affirmative duties or obligations, within ten (10) days after written
notice (or in case of an emergency, without notice), Lessor may, at its option,
perform such duty or obligation on Lessee’s behalf, including but not limited
to the obtaining of reasonably required bonds, insurance policies, or governmental
licenses, permits or approvals. Lessee shall pay to Lessor an amount equal to
one hundred fifteen percent (115%) of the costs and expenses incurred by Lessor
in such performance upon receipt of an invoice therefore. In the event of a
Breach, Lessor may, with or without further notice or demand, and without
limiting Lessor in the exercise of any right or remedy that Lessor may have by
reason of such 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 to
Lessor. In such event Lessor shall be entitled to recover from Lessee: (i) the
unpaid Rent which had been earned at the time of termination; (ii) the
worth at the time of award of the amount by which the unpaid rent which would
have been earned after termination until the time of award exceeds the amount
of such rental loss that the Lessee proves could have been reasonably avoided; (iii) the
worth at the time of award of the amount by which the unpaid rent for the
balance of the term after the time of award exceeds the amount of such rental
loss that the Lessee proves could be reasonably avoided; and (iv) any
other amount necessary to compensate Lessor for all the detriment proximately
caused by the Lessee’s failure to perform its obligations under this Lease or
which in the ordinary course of things would be likely to result therefrom,
including but not limited to the cost of recovering possession of the Premises,
expenses of reletting, including necessary renovation and alteration of the
Premises, reasonable attorneys’ fees, and that portion of any leasing
commission paid by Lessor in connection with this Lease applicable to the
unexpired term of this Lease. The worth at the time of award of the amount
referred to in provision (iii) of the immediately preceding sentence shall
be computed by discounting such amount at the discount rate of the Federal
Reserve Bank of the District within which the Premises are located at the time
of award plus one percent. Efforts by Lessor to mitigate damages caused by
Lessee’s Breach of this Lease shall not waive Lessor’s right to recover damages
under Section 12. If termination of this Lease is obtained through the
provisional remedy of unlawful detainer, Lessor shall have the right to recover
in such proceeding any unpaid Rent and damages as are recoverable therein, or
Lessor may reserve the right to recover all or any part thereof in a separate
suit. If a notice and grace period required under Section 13(.)was not
previously given, a notice to pay rent or quit, or to perform or quit given to
Lessee under the unlawful detainer statute shall also constitute the notice
required by Section 13.1. In such case, the applicable grace period
required by Section 13.1 and the unlawful detainer statute shall run
concurrently, and the failure of Lessee to cure the Default within the greater
of the two such grace periods shall constitute both an unlawful detainer and a
Breach of this Lease entitling Lessor to the remedies provided for in this
Lease and/or by said statute.

 

(b) Continue the Lease
and Lessee’s right to possession and recover the Rent as it becomes due, in
which event Lessee may sublet or assign, subject only to reasonable
limitations. Acts of maintenance, efforts to relet, and/or the appointment of a
receiver to protect the Lessor’s interests, shall not constitute a termination
of the Lessee’s right to possession.

 

(c) Pursue any other
remedy now or hereafter available under the laws or judicial decisions of the
State of California. The expiration or termination of this Lease and/or the

 

21

 

termination of Lessee’s right to possession shall not
relieve Lessee from liability under any indemnity provisions of this Lease as
to matters occurring or accruing during the term hereof or by reason of
Lessee’s occupancy of the Premises.

 

(3)    Inducement Recapture. Intentionally Deleted

 

(4) Late Charges. Lessee hereby acknowledges
that late payment by Lessee of Rent will cause Lessor to incur costs not
contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges that may be imposed upon Lessor by any
Lender. Accordingly, if any Rent shall not be received by Lessor within 5 days
after such amount shall be due, then, without any requirement for notice to
Lessee, Lessee shall immediately pay to Lessor a one-time late charge equal to
five percent (5%) of each 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 such late payment. Acceptance of such late charge by
Lessor shall in no event constitute a waiver of Lessee’s Default or Breach with
respect to such overdue amount, nor prevent the exercise of 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) consecutive
installments of Base Rent, then notwithstanding any provision of this Lease to
the contrary, Base Rent shall, at Lessor’s option, become due and payable
quarterly in advance.

 

Said late charge shall not be
payable in connection with the first instance of late payment in any calendar
year, so long as all past due amounts are paid in full within five (5) days
of Lessee’s receipt of written notice from Lessor.

 

(5) Interest. Any monetary payment due
Lessor hereunder, other than late charges, not received by Lessor, when due as
to scheduled payments (such as Base Rent) or within thirty (30) days following
the date on which it was due for non-scheduled payment, shall bear interest
from the date when due, as to scheduled payments, or the thirty-first (31st) day after it was due as to
non-scheduled payments. The interest (“Interest”) charged shall be
computed at the rate of ten percent (10%) per annum but shall not exceed the
maximum rate allowed by law. Interest is payable in addition to the potential
late charge provided for in Section 13.4.

 

(6) Breach by Lessor.

 

(a) Notice of Breach. Lessor
shall not be deemed in breach of this Lease unless Lessor fails within a
reasonable time to perform an obligation required to be performed by Lessor.
For purposes of this Section, a reasonable time shall in no event be less than
for (30) days after receipt by Lessor, and any Lender whose name and address
shall have been furnished Lessee in writing for such purpose, of written notice
specifying wherein such obligation of Lessor has not been performed; provided,
however, that if the nature of Lessor’s obligation is such that more than
thirty (30) days are reasonably required for its performance, then Lessor shall
not be in breach if performance is commenced within such 30 day period and
thereafter diligently pursued to completion.

 

(b) Performance by Lessee on
Behalf of Lessor. In the event that neither Lessor nor Lender cures said breach
within thirty (30) days after receipt of said notice, or if having commenced said
cure they do not diligently pursue it to completion, then Lessee may elect to
cure said breach at Lessee’s expense and offset from Rent the actual and
reasonable cost to perform such cure, provided however, that such offset shall
not exceed an amount equal to fifty percent (50%) of one month’s Base Rent
until cured, reserving Lessee’s right to reimbursement from Lessor for any such
expense in excess of such offset. Lessee shall document the cost of said cure
and supply said documentation to Lessor.

 

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
(collectively “Condemnation”), this Lease shall terminate as to
the part taken as of the date the condemning authority takes title or
possession, whichever first occurs. If so much of the Premise is taken by
Condemnation that the remainder is unsuited for the operation of Lessee’s
business therein, in Lessee’s reasonable business judgment, Lessee may, at Lessee’s
option, to be exercised in writing 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

 

22

 

the
Premises remaining, except that the Base Rent shall be reduced in proportion to
the reduction in utility of the Premises caused by such Condemnation.
Condemnation awards and/or payments shall be the property of Lessor, provided
that Lessee shall be entitled to initiate its own independent action to seek
separate compensation from the condemning authority for the value of its leasehold estate. Lessee’s relocation expenses,
loss of business goodwill and/or fixtures, Trade Fixtures and equipment,
without regard to whether or not this Lease is terminated pursuant to the
provisions of this Section. In addition, all Alterations and Utility
Installations made to the Premises by Lessee, for purposes of Condemnation
only, shall be considered the property of the Lessee and Lessee shall be
entitled to any and all compensation which is payable therefore. In the event
that this Lease is not terminated by reason of the Condemnation, Lessor shall
repair any damage to the Premises caused by such Condemnation.

 

15.                                                         Brokerage Fees.
Intentionally deleted.

 

16.                                                         Representations
and Indemnities of Broker Relationships.

 

Lessee and Lessor each represent and warrant to the other that it has
had no dealings with any person, firm, broker or finder in connection with this
Lease, and that no one is entitled to any commission or finder’s fee in
connection herewith. Lessee and Lessor do each hereby agree to indemnify,
protect, defend and hold the other harmless from and against liability for
compensation or charges which may be claimed by any such unnamed broker, finder
or other similar party by reason of any dealings or actions of the indemnifying
Party, including any costs, expenses, attorneys’ fees reasonably incurred with
respect thereto.

 

17.                                                         Estoppel
Certificates.

 

(a) Each Party (as “Responding Party”) shall within fifteen (15) days after written notice from the
other Party (the “Requesting Party”) execute, acknowledge and deliver to
the Requesting Party a statement in writing in form similar to the then most
current “Estoppel Certificate” form
published by the AIR Commercial Real Estate Association, plus such additional
information, confirmation and/or statements as may be reasonably requested by
the Requesting Party.

 

(b) If the Responding Party
shall fail to execute or deliver the Estoppel Certificate within such fifteen
(15) day period, the Responding Party shall be deemed to have agreed that: (i) the
Lease is in full force and effect without modification except as may be
represented by the Requesting Party, (ii) there are no uncured defaults in
the Requesting Party’s performance, and (iii) if Lessor is the Requesting
Party, not more than one (1) month’s rent has been paid in advance.
Prospective purchasers and encumbrancers may rely upon the Requesting Party’s
Estoppel Certificate, and the Responding Party shall be estopped from denying
the truth of the facts contained in said Certificate.

 

(c) If Lessor desires to
finance, refinance, or sell the Premises, or any part thereof, Lessee and all
Guarantors shall deliver to any potential lender or purchaser designated by
Lessor such financial statements as may be available to Lessee and Guarantors
and reasonably required by such lender or purchaser, including but not limited
to Lessee’s financial statements for the past three (3) years. All such
financial statements shall be received by Lessor and such lender or purchaser
in confidence and shall be used only for the purposes herein set forth.

 

18.                                                         Definition of
Lessor.

 

The term “Lessor” as used
herein shall mean the owner or owners at the time in question of the fee title
to the Premises, or, if this is a sublease, of the Lessee’s interest in the
prior lease. In the event of a transfer of Lessor’s title or interest in the
Premises or this Lease, Lessor shall deliver to the transferee or assignee (in
cash or by credit) any unused Security Deposit held by Lessor. Except as
provided in Section 15, upon such transfer or assignment and delivery of
the Security Deposit, as aforesaid, the prior Lessor shall be relieved of all
liability with respect to the obligations and/or covenants under this Lease
thereafter to be performed by the Lessor. Subject to the foregoing, the
obligations and/or covenants in this Lease to be performed by the Lessor shall
be binding only upon the Lessor as hereinabove defined.

 

19.                                                         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.

 

23

 

20.                                                           Days.

 

Unless otherwise specifically indicated to the contrary, the word “days” as used in this Lease shall mean and
refer to calendar days.

 

21.                                                           Limitation on
Liability.

 

The obligations of Lessor under this Lease shall not constitute personal
obligations of Lessor, or its partners, members, directors, officers or
shareholders, and Lessee shall look to Lessor’s interest in and to the Project,
and to no other assets of Lessor, for the satisfaction of any liability of
Lessor with respect to this Lease, and shall not seek recourse against Lessor’s
partners, members, directors, officers or shareholders, or any of their
personal assets for such satisfaction.

 

22.                                                           No Prior or
Other Agreements; Broker Disclaimer.

 

This
Lease contains all agreements between the Parties with respect to any matter
mentioned herein, and no other prior or contemporaneous agreement or
understanding shall be effective. Lessor and Lessee each represents and
warrants to the Brokers that it has made, and is relying solely upon, its own investigation
as to the nature, quality, character and financial responsibility of the other
Party to this Lease and as to the use, nature, quality and character of the
Premises. Brokers have no responsibility with respect thereto or with respect
to any default or breach hereof by either Party. The liability (including court
costs and attorneys’ fees), of any Broker with respect to negotiation,
execution, delivery or performance by either Lessor or Lessee under this Lease
or any amendment or modification hereto shall be limited to an amount up to the
fee received by such Broker pursuant to this Lease; provided, however, that the
foregoing limitation on each Broker’s liability shall not be applicable to any
gross negligence or willful misconduct of such Broker.

 

23.                                                           Notices.

 

(1) Notice Requirements. All
notices required or permitted by this Lease or applicable law shall be in
writing and may be delivered in person (by hand or by courier) or may be sent
by regular, certified or registered mail or U.S. Postal Service Express Mail,
with postage prepaid, return receipt requested, and shall be deemed given on
the date of delivery or refusal to accept delivery, as the case may be, if
served in a manner specified in this Section 23. The addresses noted
adjacent to a Party’s signature on this Lease shall be that Party’s address for
delivery or mailing of notices. Either Party may by written notice to the other
specify a different address for notice. A copy of all notices to Lessor shall
be concurrently transmitted to such party or parties at such addresses as
Lessor may from time to time hereafter designate in writing.

 

(2) Date of Notice. Any
notice sent by registered or certified mail, return receipt requested, shall be
deemed given on the date of delivery or refusal to accept delivery or inability
to deliver, as shown on the receipt card. Notices delivered by United States
Express Mail or overnight courier that guarantee next day delivery shall be
deemed given upon the date of receipt or refusal to accept delivery or inability
to deliver, as the case may be, as evidenced by the delivery receipt. If notice
is received on a Saturday, Sunday or legal holiday, it shall be deemed received
on the next business day.

 

(3) Notice Addresses.

 

For purposes of Notices to LANDLORD:

 

Systems II LLC

C/O Excel Property Management

9034 W. Sunset Blvd.

West Hollywood, CA 90069

 

For purposes of Notices to TENANT: 

 

Wilshire State Bank

 

24

 

3200 Wilshire Boulevard 

Los Angeles, CA 90010

 

24.                                                           Waivers.

 

No
waiver by Lessor of the Default or Breach of any term, covenant or condition
hereof by Lessee, shall be deemed a waiver of any other term, covenant or
condition hereof, or of any subsequent Default or Breach by Lessee of the same
or of any other term, covenant or condition hereof. 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 or similar act by Lessee,
or be construed as the basis of an estoppel to enforce the provision or
provisions of this Lease requiring such consent. The acceptance of Rent by
Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by
Lessee may be accepted by Lessor on account of monies or damages due Lessor,
notwithstanding any qualifying statements or conditions made by Lessee in
connection therewith, which such statements and/or conditions shall be of no
force or effect whatsoever unless specifically agreed to in writing by Lessor
at or before the time of deposit of such payment.

 

25.                                                           Disclosures
Regarding the Nature of a Real Estate Agency Relationship. Intentionally
deleted.

 

26.                                                           No Right To
Holdover.

 

Lessee has no right to retain possession of the Premises or any part
thereof beyond the expiration or termination of this Lease. In the event that
Lessee holds over, then the Base Rent shall be increased to one hundred twenty
five percent (125%) of the Base Rent applicable immediately preceding the
expiration or termination. Nothing contained herein shall be construed as
consent by Lessor to any holding over by Lessee.

 

27.                                                           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.

 

28.                                                           Covenants and
Conditions; Construction of Agreement.

 

All provisions of this Lease to be observed or performed by Lessee are
both covenants and conditions. In construing this Lease, all headings and
titles are for the convenience of the Parties only and shall not be considered
a part of this Lease. Whenever required by the context, the singular shall
include the plural and vice versa. This Lease shall not be construed as if
prepared by one of the Parties, but rather according to its fair meaning as a
whole, as if both Parties had prepared it.

 

29.                                                           Binding Effect;
Choice of Law.

 

This Lease shall be binding upon the parties, their personal
representatives, successors and assigns and be governed by the laws of the
State of California. Any litigation between the Parties hereto concerning this
Lease shall be initiated in the county in which the Premises are located.

 

30.                                                           Subordination;
Attornment; Non-Disturbance.

 

(1) Subordination. This Lease
and any Option granted hereby shall be subject and subordinate to any ground
lease, mortgage, deed of trust, or other hypothecation or security device (collectively,
“Security Device”), now or hereafter placed upon the
Premises, to any and all advances made on the security thereof, and to all
renewals, modifications, and extensions thereof. Lessee agrees that the holders
of any such Security Devices (in this Lease together referred to as “Lender”)
shall have no liability or obligation to perform any of the obligations of
Lessor under this Lease. Any Lender may elect to have this Lease and/or any
Option granted hereby superior to the lien of its Security Device by giving
written notice thereof to Lessee, whereupon this Lease and such Options shall
be deemed prior to such Security Device, notwithstanding the relative dates of the
documentation or recordation thereof.

 

(2) Attornment. In the event
that Lessor transfers title to the Premises, or the Premises are acquired by
another upon the foreclosure or termination of a Security Devise to which this
Lease is subordinated (i) Lessee shall, subject to the non-disturbance
provisions of Section 30.3, attorn to such new owner, and upon request,
enter into a new lease, containing all of the terms and

 

25

 

provisions
of this Lease, with such new owner for the remainder of the term hereof, or, at
the election of the new owner, this Lease will automatically become a new lease
between Lessee and such new owner, and (ii) Lessor shall thereafter be
relieved of any further obligations hereunder and such new owner shall assume
all of Lessor’s obligations, except that such new owner shall not: (a) be
liable for any act or omission of any prior lessor or with respect to events
occurring prior to acquisition of ownership; (b) be subject to any offsets
or defenses which Lessee might have against any prior lessor, (c) be bound
by prepayment of more than one month’s rent, or (d) be liable for the
return of any security deposit paid to any prior lessor.

 

(3) Non-Disturbance. With
respect to Security Devices entered into by Lessor after the execution of this
Lease, Lessee’s subordination of this Lease shall be subject to receiving a
commercially reasonable non-disturbance agreement (a “Non-Disturbance Agreement”) from the Lender which Non-Disturbance Agreement provides that
Lessee’s possession of the Premises, and this Lease, including any options to
extend the term hereof, will not be disturbed so long as Lessee is not in
Breach hereof and attorns to the record owner of the Premises. Further, within
sixty (60) days after the execution of this Lease, Lessor shall use its
commercially reasonable efforts to obtain a Non-Disturbance Agreement from the
holder of any pre-existing Security Device that is secured by the Premises. In
the event that Lessor is unable to provide the Non-Disturbance Agreement within
said sixty (60) days, then Lessee may, at Lessee’s option, directly contact
Lender and attempt to negotiate for the execution and delivery of a
Non-Disturbance Agreement.

 

(4) Self-Executing. The
agreements contained in this Section 30 shall be effective without the
execution of any further documents; provided, however, that, upon written
request from Lessor or a Lender in connection with a sale, financing or
refinancing of the Premises, Lessee and Lessor shall execute such further
writings as may be reasonably required to separately document any
subordination, attornment and/or Non-Disturbance Agreement provided for herein.

 

31.                                                          Attorneys’ Fees.

 

If any Party or Broker brings an action or proceeding involving the
Premises whether founded in tort, contract or equity, or to declare rights
hereunder, the Prevailing Party (as hereafter defined) in any such proceeding,
action, or appeal thereon, shall be entitled to reasonable attorneys’ fees.
Such fees may be awarded in the same suit or recovered in a separate suit,
whether or not such action or proceeding is pursued to decision or judgment.
The term, “Prevailing Party” shall include, without limitation, a Party or
Broker who substantially obtains or defeats the relief sought, as the case may
be, whether by compromise, settlement, judgment, or the abandonment by the
other Party or Broker of its claim or defense. The attorneys’ fees award shall
not be computed in accordance with any court fee schedule, but shall be such as
to fully reimburse all attorneys’ fees reasonably incurred. In addition, Lessor
shall be entitled to attorneys’ fees, costs and expenses incurred in the
preparation and service of notices of Default and consultations in connection
therewith, whether or not a legal action is subsequently commenced in
connection with such Default or resulting Breach [Three Hundred Dollars and No
Cents ($300.00) is a reasonable minimum per occurrence for such services and
consultation].

 

32.                                                           Lessor’s Access;
Showing Premises; Repairs.

 

Lessor and Lessor’s agents shall have the right to enter the Premises at
any time, in the case of an emergency, and otherwise at reasonable times after
reasonable prior notice for the purpose of showing the same to prospective
purchasers, lenders, or Lessees, and making such alterations, repairs,
improvements or additions to the Premises as Lessor may deem necessary or
desirable and the erecting, using and maintaining of utilities, services, pipes
and conduits through the Premises and/or other premises as long as there is no
material adverse effect on Lessee’s use of the Premises. All such activities
shall be without abatement of rent or liability to Lessee.

 

In exercising any of the rights granted to it under this Lease,
including without limitation this Section 32, Lessor shall use its best
efforts to eliminate any interference with Lessee’s business operations in the
Premises. If, as a result of Lessor’s exercise of any of its rights under this
Lease, Lessee is unable to conduct its normal business operations in the
Premises for a period in excess of twenty-four (24) hours, all rent and
additional rent payable to Lessor under this Lease shall equitably abate in
proportion to the degree of interference, until such interference has been cured.

 

Such entry shall be upon reasonable prior notice to
Lessee, and shall be done at such times and in such a manner as to minimize any
interference with Lessee’s business operations in the Premises. If Lessor’s
entry or work hereunder prevents Lessee from opening in the Premises or
materially interferes with Lessee for a period in excess of twenty-four (24)
hours, then Lessee’s rental

 

26

 

obligations hereunder shall be abated in proportion to the degree of interference,
until such interference ceases.

 

Notwithstanding the foregoing, or anything to the contrary contained in
this Lease, Lessor shall not exercise its rights hereunder in a manner which
materially and adversely affects or interferes with Lessee’s use, occupancy or
quiet enjoyment of the Premises, or which materially and adversely interferes
with visibility of the Premises or Lessee’s signage thereon, or with access to
or from the Premises.

 

33.                                                          Force Majeure

 

In
the event that Lessor or Lessee, cannot commence and/or complete the work or
perform any other obligation of such party hereunder by the date specified
therefore because of strikes, lockouts, labor disputes, acts of God, war, civil
commotion, acts of terrorism, fire or other casualty, or other cause beyond the
reasonable control of such party, other than financial inability (collectively,
“Uncontrollable Events”), the time for the commencement
and/or the completion of the work or the performance of such obligation shall
be automatically extended for the period of delay due to the Uncontrollable
Event. Included in the definition of Uncontrollable Events shall be the
following: (a) delays to Lessor’s or Lessee’s obligations that are solely
caused by the action or inaction of the other party (e.g., if Lessee fails to
approve Lessor’s plans within the time period provided in this Section 33,
this period of delay would be considered an Uncontrollable Event and Lessor’s
construction deadlines would be increased by the number of days beyond Lessee’s
allotted approval period); (b) all atypical and unusual weather-caused
delays (e.g. record setting rains); and (c) all unreasonable or unusual
delays caused solely by governmental authorities. However, usual or typical
amounts of rainfall for the particular month or the customary time estimated
for governmental approval of plans, issuing of permits, conducting inspections,
etc., shall not be considered Uncontrollable Events. Notwithstanding anything
to the contrary contained in this Lease, in no event shall this Section 33
be construed to excuse or delay the performance of a monetary obligation by
either party or require Lessee to accept delivery of the Premises prior to the
end of the occurrence of any Uncontrollable Events. In order for either Lessor
or Lessee to avail itself of the rights granted in this Section 33,
that party must notify the other party in writing within ten (10) days
after the beginning of such event and again ten (10) days after the end of
the occurrence of an Uncontrollable Event. If the Uncontrollable Events last
for ten (10) consecutive days or less, then only one notice provided
within ten (10) days after the end of such occurrence will be required.

 

34.                                                          Signs.

 

Lessor may place on the Premises ordinary “For Sale” signs at any time and ordinary “For Lease” signs
during the last six (6) months of the term hereof. Lessee shall not place
any sign upon the Project without Lessor’s prior written consent. All signs
must comply with all Applicable Requirements.

 

35.                                                          Termination;
Merger.

 

Unless specifically stated otherwise in writing by Lessor, the voluntary
or other surrender of this Lease by Lessee, the mutual termination or
cancellation hereof, or a termination hereof by Lessor for Breach by Lessee,
shall automatically terminate any sublease or lesser estate in the Premises;
provided, however, that Lessor may elect to continue any one or all existing
sub tenancies. Lessor’s failure within ten (10) days following any such
event to elect to the contrary by written notice to the holder of any such
lesser interest shall constitute Lessor’s election to have such event
constitute the termination of such interest.

 

36.                                                          Consents.

 

Except as otherwise provided herein, wherever in this Lease the consent
of a Party is required to an act by or for the other Party, such consent shall
not be unreasonably withheld or delayed. Lessor’s actual reasonable costs and
expenses (including but not limited to architects’, attorneys’, engineers’ and
other consultants’ fees) incurred in the consideration of, or response to, a
request by Lessee for any Lessor consent, including but not limited to consents
to an assignment, a subletting or the presence or use of a Hazardous Substance,
shall be paid by Lessee upon receipt of an invoice and supporting documentation
therefore. Lessee shall not be obligated to reimburse Lessor more than One
Thousand Dollars and No Cents ($1,000.00) in connection with any assignment or
subletting requiring Lessor’s consent. Lessor’s consent to any act, assignment
or subletting shall not constitute an acknowledgment that no Default or Breach
by Lessee of this

 

27

 

With
the exception of fire, casualty or Lessor approved remodel of Lessee’s
Premises, if Lessee fails to open to the public or stay open to the public and
operate its business within the Premises for a period of sixty (60) days or
longer (“Goes Dark”), then, anytime thereafter, Lessor,
including all other rights and remedies under law and/or equity, shall have the
right to terminate this Lease and recapture the Premises by giving sixty (60)
days written notice to Lessee of Lessor’s intent to do so. In the event Lessor
recaptures the Premises as set forth in this Section 40, Lessee shall have
no further liabilities or obligations to Lessor. Furthermore, in no event shall
Lessee be liable to Lessor for damages as a result of operating other stores in
the area surrounding the Project, or any other area, nor shall Lessee be
limited or restricted in any way from opening or operating other stores in the
area surrounding the Project, or any other area

 

41.                                                           Security
Measures.

 

Lessee hereby acknowledges that the Rent 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 the Premises, Lessee, its agents and
invitees and their property from the acts of third parties.

 

42.                                                          Reservations.

 

Lessor reserves the right: (i) to grant, without the consent or
joinder of Lessee, such easements, rights and dedications that Lessor deems
necessary, (ii) to cause the recordation of parcel maps and restrictions,
and (iii) to create and/or install new utility raceways, so long as such
easements, rights, dedications, maps, restrictions, and utility raceways do not
unreasonably interfere with the use of the Premises by Lessee. Lessee agrees to
sign any documents reasonably requested by Lessor to effectuate such rights.

 

43.                                                          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 survive 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, said Party shall be entitled to recover such sum or so much thereof as
it was not legally required to pay. A Party who does not initiate suit for the
recovery of sums paid “under protest” within six (6) months shall be
deemed to have waived its right to protest such payment.

 

44.                                                          Authority.
Multiple Parties; Execution.

 

(a) If either Party
hereto is a corporation, trust, Limited Liability Company, partnership, or
similar entity, 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 its behalf. Each Party shall, within thirty (30) days
after request, deliver to the other Party satisfactory evidence of such
authority.

 

(b) If this Lease is executed
by more than one person or entity as “Lessee”,  each
such person or entity shall be jointly and severally liable hereunder. It is
agreed that any one of the named Lessees shall be empowered to execute any
amendment to this Lease, or other document ancillary thereto and bind all of
the named Lessees, and Lessor may rely on the same as if all of the named
Lessees had executed such document.

 

(c) This Lease may be
executed by the Parties in counterparts, each of which shall be deemed an
original and all of which together shall constitute one and the same
instrument.

 

45.                                                            Conflict.

 

The provisions of the Addendum #1 (if any) shall control over any
conflict between this Lease and the Addendum #1 attached hereto.

 

29

 

46.                                                            Offer.

 

Preparation of this Lease by either party or their agent and submission
of same to the other Party shall not be deemed an offer to lease to the other
Party. This Lease is not intended to be binding until executed and delivered by
all Parties hereto.

 

47.                                                           Amendments.

 

This Lease may be modified only in writing, signed by the Parties in
interest at the time of the modification. As long as they do not materially
change Lessee’s obligations hereunder, Lessee agrees to make such reasonable
non-monetary modifications to this Lease as may be reasonably required by a
Lender in connection with the obtaining of normal financing or refinancing of
the Premises.

 

48.                                                           Americans with
Disabilities Act.

 

Since
compliance with the Americans with Disabilities Act (“ADA”)
is dependent upon Lessee’s specific use of the Premises, Lessor makes no
warranty or representation as to whether or not the Premises comply with ADA or
any similar legislation except as otherwise provided elsewhere in this Lease.
In the event that Lessee’s use of the Premises requires modifications or
additions to the Premises in order to be in ADA compliance, Lessee agrees to
make any such necessary modifications and/or additions at Lessee’s expense,
except as otherwise provided elsewhere in this Lease.

 

49.                                                           TIME OF THE
ESSENCE.

 

Time shall be of the essence in interpreting the provisions of this
Lease.

 

30

 

LESSOR
AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE 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.

 

IN
WITNESS WHEREOF, Lessor and Lessee have caused their duly authorized
representatives to execute and deliver this Lease as of the Effective Date.

 

LESSOR:

 

Systems II, LLC, a California limited liability company

	
  By:

  	
  Sancam, Inc., it’s managing member

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Mark Gabay

  	
   

  	
   

  
	
   

  	
  Mark
  Gabay; President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January
  21, 2010

  	
   

  	
   

  
	
  Date of execution

  	
   

  	
   

  

 

 

Lessee:

WILSHIRE STATE BANK, a California corporation

 

 

	
  By:

  	
  /s/
  David Kim

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Print Name:

  	
  David
  Kim, Sr. V.P.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January
  19, 2010

  	
   

  	
   

  
	
  Date of execution

  	
   

  	
   

  
					

 

 

	
  By:

  	
  /s/
  Paul Lee

  	
   

  	
   

  

 

	
  Print Name:

  	
  Paul
  Lee

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January
  19, 2010

  	
   

  	
   

  
	
  Date of execution

  

 

31

 

Addendum #1
to that certain Lease dated January 21st, 2010 by and between SYSTEMS II
LLC, a California limited liability company (“Lessor”) WILSHIRE STATE BANK, a
California corporation (“Lessee”) for the Premises located at 17500 Carmenita
Road, Cerritos, California, 90703, and further described on Exhibit A
(Site Plan) attached hereto (“Premises”)

 

Not
withstanding the terms of the Lease, the following additions and modifications
to the Lease contained in this Addendum #1 shall be made a part thereof and
attached thereto. Unless otherwise provided herein, In the event of a conflict
between this Addendum #1 and the Lease, the provisions of this Addendum #1
shall prevail.

 

50.                                 LESSOR’S
WORK: None

 

51.                                 LESSEE’S
WORK: Lessee’s Work, which shall be
constructed at Lessee’s sole cost and expense except as provided for herein,
may include, but not be limited to, such items as all interior and exterior
signage, floor coverings, wall finishes, high quality fixtures, counters,
displays, and anything Lessee desires for its Premises. The build-out shall be
designed, constructed, furnished, and decorated in compliance with the Lessee
design criteria and final plans approved by Lessor and the City of Cerritos.

 

IN
WITNESS WHEREOF, Lessor and Lessee have caused their duly authorized representatives
to execute and deliver this Addendum #1 as of the Effective Date.

 

LESSOR:

 

Systems II, LLC, a California limited liability company 

	
  By:

  	
  Sancam, Inc., it’s managing member

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Mark Gabay

  	
   

  	
   

  
	
   

  	
  Mark
  Gabay; President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 21, 2010

  	
   

  	
   

  
	
  Date of execution:

  	
   

  	
   

  

 

 

Lessee:

WILSHIRE STATE BANK, a California corporation

 

 

	
  By:

  	
  /s/
  David Kim

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Print Name:

  	
  David
  Kim, SENIOR V.P.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  JANUARY 19, 2010

  	
   

  	
   

  
	
  Date of execution

  	
   

  	
   

  
					

 

 

	
  By:

  	
  /s/ Paul Lee

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Print Name:

  	
  PAUL LEE, FACILITIES
  OFFICER

  	
   

  	
   

  
					

 

	
  JANUARY 19, 2010

  	
   

  	
   

  
	
  Date
  of execution

  	
   

  	
   

  

 

32

 

Exhibit A-1 (Premises Plan)

 

 

 

EXHIBIT B

 

(SHOPPING
CENTER RULES AND REGULATIONS)

PREMISES:

 

A.                        All floor areas of the
premises (including vestibules, entrances, and air returns), doors, fixtures,
windows, and plate glass shall be maintained in a safe and good condition.

 

B.                          All trash, refuse, and waste
materials shall be stored in adequate containers and regularly removed from the
premises. These containers shall not be visible to the general public and shall
not constitute a health or fire hazard or nuisance to any Lessee.

 

C.                          No portion of
the premises shall be used for lodging purposes.

 

D.                         Neither sidewalks nor
walkways shall be used to display; store, or place any merchandise, equipment,
or devices.

 

E.                           Lessee shall not install any
curtains, blinds, shades, or screens on any window or door of the premises
without Lessor’s consent.

 

COMMON AREAS:

 

A.                        Lessee and its authorized
representatives and invitees shall use any roadway, walkway, or mall only for
ingress to or egress from the stores in the shopping center. Use of the common areas
shall be in an orderly manner in accordance with directional or other signs or
guides. Roadways shall not be used at a speed in excess of ten miles per hour
and shall not be used for parking or stopping, except for immediate loading or
unloading of passengers. Walkways and malls shall be used for pedestrian travel
only.

 

B.                          Lessee and its authorized
representatives and invitees shall not use the parking areas for anything but
parking motor vehicles. All motor vehicles shall be parked in an orderly manner
within the painted lines defining the individual parking places. During peak
periods of business activity, Lessor may impose limitations in all or parts of
the parking area as to length of time for parking use.

 

C.                          During normal business hours,
the use of the parking area shall be limited to customers, employees and
vendors of the Lessees of the shopping center, and no others.

 

D.                         No person shall use any
utility area, truck loading area, or other area reserved for use in conducting
business, except for the specific purpose for which permission to use these areas
has been given.

 

E.                           Without the
consent of the Lessor, no person shall use any of the common areas for:

 

(1)                     Vending, peddling, or
soliciting orders for sale or distributing of any merchandise, device, service,
periodical, book, pamphlet, or other matter;

 

(2)                     Exhibiting any
sign, placard, banner, notice, or other written material;

 

(3)                     Distributing any
circular, booklet, handbill, placard, or other material;

 

(4)                     Soliciting membership in any
organization, group, or association, or soliciting contributions for any
purpose;

 

(5)                     Parading, patrolling, picketing,
demonstrating, or engaging in conduct that might interfere with the use of the
common areas or be detrimental to any of the other Lessees;

 

(6)                     Any purposes when none of the
business establishments in the shopping center is open for business;

 

(7)                     Discarding any paper, glass,
or extraneous matter of any kind, except in designated receptacles;

 

35

 

(8)                     Using a sound
device of any kind or making or permitting any noise that is  annoying, unpleasant, or distasteful;

 

(9)                     Damaging any sign, light
standard, or fixture, landscaping material, or other improvement or property
within the shopping center.

 

The listing of specific prohibitions is not intended
to be exclusive, but to indicate the manner in which the right to use the
common areas solely as a means of access and convenience in shopping at the
business establishments in the shopping center is limited and controlled by
Lessor.

 

36Exhibit 10.25

 

FIRST
AMENDMENT TO LEASE

 

THIS FIRST AMENDMENT TO
LEASE (the “Amendment”) is made and entered into as of March 31, 2009, by
and between SAN PEDRO PROPERTIES, a California limited partnership (“Lessor”)
and WILSHIRE STATE BANK, a California corporation (“Lessee”).

 

RECITALS

 

A.                                  Lessor and
Lessee are parties to that certain lease dated October 20, 2003 (the “Lease”). Pursuant to the Lease, Lessor has leased to Lessee space
currently containing approximately 3,208 rentable
square feet (the “Premises”) described as Suite No. 200
on the second (2nd) floor of the
building located at 1300 S. San Pedro Street, Los Angeles, California (the “Building”).

 

B.                                    The Lease
contains inconsistencies with respect to its expiration.

 

C.                                    Regardless of
such inconsistencies, Lessor and Lessee, pursuant to the terms of this Amendment,
hereby agree to extend the Expiration Date as defined in the Lease so that the
Lease shall now expire on March 31, 2014.

 

NOW, THEREFORE, in consideration of the
above recitals which by this reference are incorporated herein, the mutual
covenants and conditions contained herein and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee
agree as follows:

 

1.                                      Expiration Date.  “Expiration Date” as defined in Section 1.3
of the Lease shall be modified and amended so that the Lease
shall now expire on March 31, 2014.

 

2.                                      Extension.  The Term of the Lease is
hereby extended and shall expire on March 31,
2014 (“Extended Termination Date”),  unless sooner terminated in
accordance with the terms of the Lease. That portion of the Term commencing on April 1,
2009 (the “Effective Date”) and ending on the Extended Termination Date shall
be referred to herein as the “Extended Term”.

 

3.                                      Base Rent.

 

3.01.                     Base Rent for the Extended Term.  As of the Effective Date,
the schedule of Base Rent payable with respect to the Premises during the
Extended Term is the following:

 

	
  Period

  	
   

  	
  Annual Rate Per

  Square Foot

  	
   

  	
  Monthly Base Rent

  	
   

  
	
  April 1, 2009
  through March 31, 2010

  	
   

  	
  $

  	
  26.28

  	
   

  	
  $

  	
  7,025.52

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  April 1, 2010
  through March 31, 2011

  	
   

  	
  $

  	
  26.28

  	
   

  	
  $

  	
  7,025.52

  	
   

  

 

Wilshire State Bank

First Amendment To Lease (March 30, 2009)

 

1

 

On April 1, 2011, and annually thereafter, the Monthly Base Rent
shall be increased by the year-over-year increase in the Consumer Price Index
of the Bureau of Labor Statistics (1982-84 = 100) of the U.S. Department of
Labor for CPI (all items for Urban Wage Earners and Clerical Workers, for Los Angeles-Riverside-Orange
County). Accordingly, an increase in the Consumer Price Index is computed by
dividing the Consumer Price Index for the calendar month immediately preceding
the adjustment by the Consumer Price Index for the calendar month immediately
preceding the prior 12 month period. The resulting increases in Monthly Base
Rent however, shall be at least two percent (2%) per annum over the prior
Monthly Base Rent, but shall not exceed three percent (3%) per annum over the
prior Monthly Base Rent.

 

3.02                          Abated Rent for the Term.  Lessee shall be entitled to
an abatement of Base Rent in the amount of $7,025.52
applicable to May, 2009 (the “Abated
Rent”).

 

3.03.                       Tenant Improvement Allowance/ Base Rent Credit.  Lessee shall be entitled to
an additional abatement of Base Rent in the amount of $50,000.00 in lieu of a
tenant improvement allowance (the “Tenant Improvement Allowance Credit”). The
Tenant Improvement Allowance Credit shall be applied in fifty-eight (58)
installments at a rate of $862.07 per month against the Monthly Base Rent
beginning on June 1, 2009 and continuing through the Extended Termination
Date.

 

4.                                      Operating Expenses.  For the period commencing on
the Effective Date and ending on the Extended Termination Date, Lessee shall
pay for Lessee’s Share of Operating Expense Increase in accordance with the
terms of the Lease, provided, however, during such period, (a) the Base
Year for the computation of Lessee’s Share of Operating Expense Increase is
amended from calendar year 2004 to calendar year 2009, and (b) in the
event Real Property Taxes are increased due to a sale, change in ownership, or
reassessment of the Building, during the first five (5) years of the
Extended Term, any such increase shall be excluded from Lessee’s Share of
Operating Expense Increase. During the Extended Term, Tenant shall have no
payment or other obligations to Landlord with respect to Operating Expenses
prior to January 1, 2010.

 

5.                                      Other Pertinent Provisions.  Lessor and Lessee agree
that, effective as of the date of this Amendment (unless different effective
date(s) is/are specifically referenced in this Section), the Lease shall
be amended in the following additional respects:

 

5.01.                       Security and Parking Improvements.  Lessor agrees, at Lessor’s
sole cost and expense, to install or implement the following security measures
and other improvements within Three (3) months of the Effective Date: a)
Installation of a security camera in front of Building’s parking garage
elevator on parking level where Lessee’s current reserved spaces are located,
b) Installation of additional lighting around starewell and near Lessee’s
current reserved spaces, and c) Installation of a security mirror at the
landing of starewell. Lessor shall also use commercially reasonable efforts to
implement a system to direct traffic on the Building’s parking ramp. Until the
implementation of said traffic light system, Lessor shall provide additional
parking attendants to manually direct traffic on the parking ramp.

 

2

 

5.02.                       Option to Extend.  Upon expiration of the
Extended Term, Lessee and its permitted assignee(s) shall have two (2) Options
to Extend the Lease each for an additional term of five (5) years at a
base rent equal to 90% of Fair Market Rental for comparable retail projects in
the area. Lessee shall provide notice to Lessor no less than six (6) months
prior to the Extended Termination Date and any subsequent expiration date of
its intent to exercise its option. Lessor and Lessee will have thirty (30) days
after Lessor receives the option notice within which to agree on the then Fair
Market Rental value of the Premises. If no agreement is reached by the parties
regarding Fair Market Rental value, Lessor and Lessee shall immediately appoint
a mutually acceptable appraiser or broker to establish the new Fair Market
Rental value within the next thirty (30) days. The decision of the mutually
acceptable appraiser or broker shall be binding on the parties. Any fees or
costs of the appraiser or broker will be split equally between the parties. The
Fair Market Rental value of the Premises means what a landlord under no
compulsion to lease the Premises and a tenant under no compulsion to lease the
Premises would determine as rent as of the commencement of the option period,
taking into consideration the uses permitted under the Lease, the quality,
size, design, and location of the Premises, the rent for comparable buildings
located in the vicinity of the Building, and any lease concessions (such as free
rent and tenant improvements).

 

5.03.                       Parking.  For the period commencing on
the Effective Date and ending on the Extended Termination Date, Lessee’s
monthly parking rate shall not exceed $60.00 per
month per parking space during the Extended Term and any extensions.
Furthermore Lessee shall be entitled to retain all seven (7) of Lessee’s currently reserved parking spaces (“Reserved Customer
Parking”) during the Extended Term and any extensions. Lessor agrees
that Lessee’s Reserved Customer Parking shall not be relocated nor shall the
size of the individual parking spaces be reduced in size during the Extended
Term or during any extensions. Furthermore, Lessor agrees to maintain a minimum
five (5) foot wide walkway from the Reserved Customer Parking to the
adjacent stairwell and elevator during the Extended Term and any extensions.

 

5.04.                       Exclusive
Use.  So long as
Tenant occupies the entire Premises, Lessor agrees that no other portion of the
Building shall be used or operated for retail banking during the Extended Term
and any extensions. Banking services include without limit making loans,
accepting deposits, cashing checks, trust services, safe deposit boxes,
issuance of letters of credit, cash management, ATM’s and other services
customarily associated with retail banks.

 

5.05.                       Sublease and Assignment.  Lessee shall have the right
to sublet, assign, or transfer all or any portion of the Premises after having
received Lessor’s prior written approval, which shall not be unreasonably
withheld, conditioned, or delayed. Any net profits realized (after deducting
leasing costs) shall accrue to Lessee and Lessor on a 50%/50% basis.
Notwithstanding anything to the contrary in the Lease, Lessee shall be
permitted to sublease space or assign the Lease to an affiliate entity
controlling, under common control with, or controlled by Lessee, including an
entity resulting from a merger or consolidation by Lessee, without Lessor’s
approval.

 

3

 

5.06.                       Nondisturbance.  Lessor shall provide Lessee
with a commercially reasonable and mutually acceptable non-disturbance
agreement within thirty (30) days after mutual execution of this First
Amendment to Lease.

 

5.07.                       Broker Representation.  Lessee hereby represents to
Lessor that Lessee has dealt with no broker, other than Transwestern in
connection with this Amendment. Lessee agrees to indemnify and hold Lessor, its
members, principals, beneficiaries, partners, officers, directors, employees,
mortgagee(s) and agents, and the respective principals and members of any
such agents (collectively, the “Lessor Related Parties”) harmless
from all claims of any brokers, other than Transwestern, claiming to have
represented Lessee in connection with this Amendment. Lessor shall pay
Transwestern a brokerage commission equal to four percent (4%) of the total
Base Rent for the Extended Term (“Brokerage Commission”), due one
hundred percent (100%) upon mutual execution of this Amendment. Lessee shall
have the right to offset its rent if Lessor fails to pay the Brokerage
Commission.

 

5.08.                       Address  for Notices.  Any notices to be sent to
Lessee shall be sent to the following addresses:

 

Wilshire State Bank

3200 Wilshire Boulevard

Los Angeles, CA 90010

Attention: David Kim, Chief Operations Administrator

 

6.                                      Miscellaneous.

 

6.01.                       This Amendment
sets forth the entire agreement between the parties with respect to the matters
set forth herein. There have been no additional oral or written representations
or agreements.

 

6.02.                       Except as
herein modified or amended, the provisions, conditions and terms of the Lease
shall remain unchanged and in full force and effect.

 

6.03.                       In the case of
any inconsistency between the provisions of the Lease and this Amendment, the
provisions of this Amendment shall govern and control.

 

6.04.                       The capitalized
terms used in this Amendment shall have the same definitions as set forth in
the Lease to the extent that such capitalized terms are defined therein and not
redefined in this Amendment.

 

6.05.                       Each signatory
of this Amendment represents hereby that he or she has the authority to execute
and deliver the same on behalf of the party hereto for which such signatory is
acting.

 

4

 

IN WITNESS WHEREOF,  Lessor and
Lessee have duly executed this Amendment as of the day and year first above
written.

 

 

	
   

  	
   

  	
  LESSOR:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SAN PEDRO PROPERTIES,

  
	
   

  	
   

  	
  a California limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  [ILLEGIBLE]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  [ILLEGIBLE]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LESSEE:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WILSHIRE STATE BANK,

  
	
   

  	
   

  	
  a California banking corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Joanne Kim

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Joanne
  Kim

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President &
  C.E.O.

  

 

5

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