Document:

Exhibit 10.3

ASSUMPTION, AFFIRMATION AND AMENDMENT TO LEASE

THIS ASSUMPTION, AFFIRMATION AND AMENDMENT TO LEASE
(the “Agreement”) is entered into as of the 26th day of March,
2001 by and between La Jolla Investors, a general partnership, as to
an undivided 50% interest and Larry Tucker as Trustee of Larry Tucker Separate
Property Trust dated September 17, 1987 as to an undivided 50% interest
(together, “Landlord”) and 1st Pacific Bank of California, a California
Corporation (the “Bank”).

RECITALS

A. Landlord is the owner of certain real property
located in the City of San Diego commonly known as 7728 Regents Road in the La
Jolla Colony Plaza shopping center located at the northwest corner of Regents
Road and Arriba Street and more particularly described as Parcel 5 of Parcel
Map 13620 recorded December 27, 1984 as file # 84-480860 in the official
records of San Diego County, California (the “Property”).

B. The Property has been improved with a retail shop
building which among other things includes 3,000 square feet of space presently
occupied by the Bank (the “Original Premises”), as well as an adjoining 920
square feet space to the west of the Original Premises (the “Adjoining Space”).

C. Landlord’s predecessor and the predecessor of
Washington Mutual Bank FA (“Tenant”) entered into a Lease Agreement dated as of
February 10, 1987 for the Original Premises which lease was amended by
Amendment No. 1 dated December 18, 1995

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(collectively, the “Lease”).

D. The Bank occupies the Original Premises pursuant to
a sublease dated as of December 30, 1999 between Tenant and the Bank (which at
that time was a proposed organization) and La Jolla Association (the “Sublease”).

E. The Sublease expires on December 31, 2002 and the
Bank desires to have all the rights and obligations of the Tenant under the
Lease remain in effect through and including December 31, 2007, with the
additional right to extend such rights and obligations for an additional five
(5) years through and including December 31, 2012, as if the Bank were the Tenant
under the Lease.

F. Landlord has informed the Bank that Landlord does
not intend to extend the lease of the existing lessee of the Adjoining Space
and the Bank has expressed a desire to lease the Adjoining Space as well.
Landlord is willing to lease the Adjoining Space to the Bank provided that the
Bank (i) leases both the Original Premises and the Adjoining Space pursuant to
the terms of the Lease from January 1, 2003 through December 31, 2007 and (ii)
enters into a lease for the Adjoining Space for the period of time commencing
August 1, 2001 through December 31, 2002, in form attached hereto as Exhibit A
and by this reference incorporated herein, concurrently with the execution
hereof.

G. The duties of Landlord hereunder are expressly
conditioned upon the Bank obtaining the written agreement from Tenant not to
exercise its options under the Lease, since Landlord

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does not want to be in the position of leasing the Original Premises to
two tenants for the same period of time.

Now therefore in consideration of these Recitals and the conditions and
covenants hereinafter contained it is agreed as follows:

1. Effective with and from and after January 1, 2003,
the Bank assumes the Lease and agrees to act as tenant thereunder, affirms all
the terms and conditions of the Lease and hereby exercises the option to extend
the term of Lease through and including December 31, 2007.

2. The Bank agrees that effective January 1, 2003, the
term “Premises” as defined in the Lease shall be expanded to include the
Adjoining Space and that the rent rate per square foot of the Original Premises
under the Lease as of December 31, 2002 shall be used as the rent rate for the
Premises including the Adjoining Space on January 1, 2003. That rent rate shall
be adjusted on July 1, 2003 and each July 1 thereafter during the remainder of
the term of the Lease as provided in the Lease.

3. A lease between Landlord and the Bank for the
Adjoining Space shall be entered into concurrently with this Agreement in the
form of Exhibit A attached hereto.

4. Nothing herein shall be construed to amend or
affect the Sublease or the rights and duties of the Bank under the Sublease
through and including December 31, 2002.

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5. Each party hereto warrants to the other that it has
used no real estate broker in connection with the transaction set forth herein.

 

THE PARTIES HAVE EXECUTED THIS AGREEMENT at San Diego, California.

 

	
  

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  
	
   

  	
  LA JOLLA INVESTORS,

  a California General Partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven Park Grant

  
	
   

  	
   

  	
  Steven Park Grant, as Trustee of the Grant

  Family Trust of 1991, General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Larry Tucker

  
	
   

  	
  Larry Tucker, as Trustee of the Larry Tucker

  Separate Property Trust dated September 17, 1987,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  The Bank:

  
	
   

  	
   

  	
   

  
	
   

  	
  1st Pacific Bank of California,

  a California Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert B. Hildt

  
	
   

  	
   

  	
  Robert B. Hildt

  
	
   

  	
   

  	
   

  
	
   

  	
  Its President

  

 

 4Exhibit 10.4

	
  

  	
  SHOPPING CENTER
  LEASE

  

  BROKERAGE AND MANAGEMENT

  LICENSED REAL ESTATE BROKER

  

 

TABLE OF
CONTENTS

	
  

  	
   

  	
  PAGE

  
	
  Article 1

  	
  LEASE OF PREMISES

  	
  1

  
	
  Article 2

  	
  LEASE REVIEW OBLIGATIONS OF LANDLORD AND TENANT

  	
  1

  
	
  Article 3

  	
  DEFINITIONS

  	
  1

  
	
  Article 4

  	
  EXHIBITS AND ADDENDA

  	
  2

  
	
  Article 5

  	
  SHOPPING CENTER PLAN

  	
  3

  
	
  Article 6

  	
  OTHER TENANCIES

  	
  3

  
	
  Article 7

  	
  DELIVERY OF POSSESSION

  	
  3

  
	
  Article 8

  	
  TENANT’S WORK

  	
  3

  
	
  Article 9

  	
  RENT

  	
  3

  
	
  Article 10

  	
  NET SALES

  	
  4

  
	
  Article 11

  	
  POSSESSION AND USE

  	
  5

  
	
  Article 12

  	
  UTILITIES SERVICES

  	
  5

  
	
  Article 13

  	
  INDEMNITY BY TENANT

  	
  6

  
	
  Article 14

  	
  INSURANCE – WAVER OF SUBROGATION

  	
  6

  
	
  Article 15

  	
  TITLE OF LANDLORD

  	
  7

  
	
  Article 16

  	
  TENANT’S RIGHT TO MAKE ALTERATIONS

  	
  7

  
	
  Article 17

  	
  MECHANICS’ LIENS

  	
  8

  
	
  Article 18

  	
  ADVERTISING MEDIA

  	
  8

  
	
  Article 19

  	
  FIXTURES AND PERSONAL PROPERTY

  	
  8

  
	
  Article 20

  	
  ASSIGNING, MORTGAGING, SUBLETTING, CHANGE IN
  OWNERSHIP

  	
  9

  
	
  Article 21

  	
  TENANT’S CONDUCT OF BUSINESS

  	
  10

  
	
  Article 22

  	
  REPAIR AND MAINTENANCE OF THE PREMISES

  	
  10

  
	
  Article 23

  	
  CASUALTY DAMAGE AND RECONSTRUCTION

  	
  11

  
	
  Article 24

  	
  EMINENT DOMAIN

  	
  11

  
	
  Article 25

  	
  COMMON AREAS

  	
  12

  
	
  Article 26

  	
  DEFAULTS BY TENANT

  	
  13

  
	
  Article 27

  	
  DEFAULTS BY LANDLORD

  	
  14

  
	
  Article 28

  	
  ATTORNEYS’ FEES

  	
  15

  
	
  Article 29

  	
  SUBORDINATION – ATTORNMENT

  	
  15

  
	
  Article 30

  	
  QUIET POSSESSION

  	
  15

  
	
  Article 31

  	
  MERCHANTS’ ASSOCIATION

  	
  15

  
	
  Article 32

  	
  CAPTIONS; JOINT AND SEVERAL LIABILITY

  	
  15

  
	
  Article 33

  	
  NOTICES

  	
  16

  
	
  Article 34

  	
  OBLIGATIONS OF SUCCESSORS

  	
  16

  
	
  Article 35

  	
  CONSENT OF LANDLORD AND TENANT

  	
  16

  
	
  Article 36

  	
  SECURITY DEPOSIT

  	
  16

  
	
  Article 37

  	
  MISCELLANEOUS

  	
  16

  
	
  Article 38

  	
  BROKERS

  	
  18

  

 

 

	
  

  	
  SHOPPING CENTER
  LEASE

  

  Richard Ellis, Inc.

  BROKERAGE AND MANAGEMENT

  LICENSED REAL ESTATE BROKER

  

 

This Lease between College Plaza, Ltd, a California
Limited Partnership (“Landlord”), and 1st Pacific Bank, a State Banking
Organization and La Jolla Association (“Tenant”), is dated November 1, 1999.

1.        LEASE OF PREMISES.

In consideration of the Rent (as defined at Section
9.5) to be paid by Tenant and the provisions of this Lease, Landlord leases to
Tenant and Tenant leases from Landlord the Premises shown by diagonal lines on
the plan attached hereto as Exhibit “A”, and further described at Section 3.j.
The Premises are located within the Shopping Center described in Section 3.l.
Tenant shall have the non-exclusive right (unless otherwise provided herein) in
common with Landlord and other tenants, subtenants and invitees of the Shopping
Center, to use of the Common Areas (as defined at Section 3.d.).

2.        LEASE REVIEW OBLIGATIONS OF LANDLORD AND
TENANT.

Landlord and Tenant acknowledge and agree that each
has the responsibility to personally review and approve the contents of this
Lease and to have this Lease reviewed, approved, and modified as needed by its
attorneys before the Lease is signed.

3.        DEFINITIONS.

As used in this Lease, the following terms shall have the following
meanings:

b.        Broker(s)

Landlord’s Broker: CB Richard Ellis, Inc.

Tenant’s Broker: CB Richard Ellis, Inc.

Commision Payable to Landlord’s Broker (Section 38.1):
$ per agreement.

Landlord’s Broker hereby discloses to Landlord and
Tenant that Landlord’s Broker is acting in this transaction as the agent of
(check applicable box below):

o
Landlord exclusively; or 

x both Landlord and Tenant.

Landlord and Tenant each consent to such representation by Landlord’s
Broker.

c.         Commencement Date: The
date following Tenant’s waiver of its contingency. (Letter dated 1/27/00)

d.        Common Areas:  All areas, structural portions, facilities
and equipment of the Shopping Center outside the Premises and the premises of
other tenants, but within the exterior boundaries of the Shopping Center that
are provided and designated by Landlord from time to time for the general use,
benefit and/or convenience of Tenant and/or other tenants of the Shopping
Center and/or their respective authorized representatives and invitees. Common
Areas include without limitation, pedestrian walkways and patios, landscaped
areas, sidewalks, service corridors, public restrooms, stairways, roofs, walls,
plazas, malls (including any enclosed malls where climate control is provided),
throughways, loading areas, parking areas, and roads, all as generally shown on
the plan attached hereto as Exhibit “A”. Landlord shall have the right to
regulate or restrict the use of the Common Areas.

e.         Floor Area: As to
both the Premises and the Shopping Center, the respective measurements of floor
area as are from time to time subject to lease by Tenant and all tenants of the
Shopping Center, respectively, as determined and applied by Landlord on a
consistent basis throughout the Shopping Center.

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g.        Landlord’s Mailing Address: 9466 Black Mountain Road, Suite
230, San Diego, CA 92126

Tenant’s Mailing
Address:
______________________________________________________

_____________________________________________________________________________
..

h.        Minimum Annual Rent (Initial)
(Section 9.1):  $72,000
per year, payable in twelve (12) equal monthly installments each year. Minimum rent shall commence March 1, 2000.

i.          _________________________________________________________________________________
..

j.          Premises:  That portion of the Shopping Center
containing approximately 2838 square feet of Floor Area, shown by diagonal lines on Exhibit “A”.

k.         Security Deposit (Article 36):  $6,000 which shall be payable upon waiver
of Tenant’s Contingency.

l.          Shopping Center:  The building of which the Premises is a
part (the “Building”) and any other buildings and improvements on the real
property (the “Property”) located at 3500 College Boulevard, Oceanside, CA  and further described on Exhibit “A”. The
Shopping Center is known as College Plaza.

m.        Tenant’s First Adjustment Date
(Section 9.2):  The
first day of the calendar month following the Commencement Day plus 12 months.
(i.e. 2/1/01)

n.        Tenant’s Proportionate Share
(initial): 3.6%.

Such share is a fraction, the numerator of which is the Floor Area of
the Premises, and the denominator of which is the Floor Area of the buildings
in the Shopping Center available for exclusive use and occupancy by tenants
(excluding the Floor Area of those areas, if any, designated by Landlord on Exhibit
“A” as “Major Stores”), as determined by Landlord from time to time on a
consistent basis. As of the date of this Lease the Shopping Center contains a
total Floor Area of 79,109 square feet.

o.        Tenant’s Radius

p.        ________________________.

q.        Tenant’s Trade
Name (Article 11):  1st Pacific Bank.

r.         Tenant’s Use Clause (Article 11):  The Premises shall be used and occupied
only for the purpose of the operation of a bank and general office uses related
thereto, and for no other use or purpose.

s.         Term:  The Term of this Lease shall begin as of
the date of waiver of contingency and shall continue thereafter for a period of
5 years and  0 months (plus any
partial month) following the Commencement Date. The Commencement Date and
expiration date of the Lease shall be set forth in Landlord’s Notice of Lease
Term Dates (the “Notice”), which shall be substantially in the form set forth
at Exhibit “F”. The Notice shall be served on Tenant promptly following
determination of the Commencement Date under Section 3.c.

t.         CONTINGENCY: See Addendum

4.        EXHIBITS AND
ADDENDA.

The exhibits and addenda listed below (unless lined out) are
incorporated by reference in this Lease:

a.         Exhibit “A”
— Plan Showing the Premises and Shopping Center (See Sections 3.j, 3.i and
Article 5)

c.         Exhibit “C”
— Landlord’s Work and Tenant’s Work

f.         Exhibit “F”
— Landlord’s Notice of Lease Term Dates (See Section 3.s)

i.          Addenda:

_______________________________________________________________________________________

_______________________________________________________________________________________

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5.        SHOPPING CENTER PLAN

The plan of the Shopping Center attached as Exhibit “A”
shows, among other things, the principal improvements which initially comprise
or will initially comprise the Shopping Center. Tenant agrees that Landlord may
at any time and from time to time, change the shape, size, location, number,
and extent of the improvements now shown on Exhibit “A” and may eliminate or
add any improvements to any portion of the Shopping Center, but Landlord agrees
(i) not to materially change the size or location of the Premises without
Tenant’s consent, and (ii) that any such changes will not materially adversely
affect ingress to and egress from the Premises, visibility of the Premises or
parking availability in the Shopping Center.

6.        OTHER TENANCIES.

Landlord reserves the absolute right to effect such
other tenancies and uses in the Shopping Center as Landlord, in its sole
business judgment, determines best promotes the interests of the Shopping Center.
Landlord and Landlord’s Broker do not represent, and Tenant does not rely on
the possibility, that any specific tenant or number of tenants will occupy
space in the Shopping Center during the Term.

7.        DELIVERY OF POSSESSION.

Following Tenant waiving its contingency Landlord
agrees to deliver to Tenant and Tenant agrees to accept from Landlord
possession of the Premises. If
for any reason Landlord does not deliver possession of the Premises to Tenant
with Landlord’s Work substantially complete at least 30 days before Tenant’s
Tentative Commencement Date, Landlord shall not be subject to any liability for
such failure, and the validity of this Lease shall not be impaired, but the
Commencement Date shall be delayed by the number of days delivery is delayed and
Rent shall be abated until 30 days following the date of substantial completion
of Landlord’s Work in the Premises. Notwithstanding anything to the contrary
contained herein, if Landlord does not deliver possession of the Premises to
Tenant on or before the Outside Date for Delivery of Possession, this Lease
shall terminate and be of no further force or effect, and Landlord and Tenant
shall have no further obligations hereunder.

8.        TENANT’S WORK.

Tenant shall commence construction of Tenant’s Work as defined in
Exhibit “C”.

9.        RENT.

9.1       Payment of Minimum Annual Rent.  Tenant agrees to pay the Minimum Annual
Rent during the Term for its use and occupancy of the Premises. Minimum Annual
Rent shall be payable in advance on the first day of each calendar month of the
Term without notice, setoff or deduction, in twelve (12) equal monthly
installments during each year of the Term. If the Term begins (or ends) on
other than the first (or last) day of a calendar month, the Minimum Annual Rent
for the partial month shall be prorated on a daily basis, based on a 30 day
month. Tenant shall pay Landlord the first installment of Minimum Annual Rent
when Tenant executes this Lease, which shall be held and applied or disposed of
as provided in the section entitled Non-refundable Deposit set forth in
Addendum to Lease attached hereto.

9.2       Adjusted Minimum Annual Rent.  Minimum
Rent shall increase annually by four (4%) percent on the anniversary date of
Tenant’s waiver of its contigency.

9.3       Property Taxes.

a. Beginning with the Commencement Date and for the
balance of the Term, Tenant shall pay to Landlord as “additional rent” the
amount of taxes and assessments levied and assessed for any year upon the
Premises and the underlying Property (the “Premises Property Taxes”). Such sum
shall be prorated for any partial year of the Term on a daily basis, based on a
360 day year. Tenant shall also pay 5.28% of the taxes and assessments for tax
parcel 168-012-32

If the Premises and the underlying Property are not
separately assessed, but are assessed as part of the land and improvements on a
larger parcel (hereinafter the “Larger Parcel”), Tenant’s share of Premises
Property Taxes shall be a fractional portion of the property taxes on the
Larger Parcel, the numerator of which is the Floor Area of the Premises and the
denominator of which is the Floor Area of all the areas available for exclusive
use and occupancy by tenants of the Larger Parcel. Tenant shall pay Premises
Property Taxes to Landlord as part of Common Area Costs at the times and in the
manner provided for the payment of Common Area Costs at Section 25.3 of this
Lease. For purposes hereof, an equitable adjustment shall be made for buildings
which are only partially completed on the date such property taxes become a
lien.

If any Premises Property Taxes (including any
assessments which may be evidenced by improvement or other bonds) due hereunder
may be paid in annual installments, only the amount of such annual installment
(with an appropriate

 3
 

proration for any partial year) and statutory interest
thereon shall be included in the computation of annual Premises Property Taxes.

b. The term “Premises Property Taxes” shall mean: (i)
any fee, license fee, license tax, business license fee, commercial rental tax,
levy, charge, assessment, penalty or tax imposed by any taxing authority
against the Premises, Property or the Shopping Center; (ii) any tax on Landlord’s
right to receive, or the receipt of, rent or income from the Premises, Property
or the Shopping Center or against Landlord’s business of leasing space in the
Shopping Center; (iii) any tax or charge for fire protection, streets,
sidewalks, road maintenance, refuse or other services provided to the Premises,
Property or Shopping Center by or through any governmental agency; (iv) any tax
imposed upon this transaction or based upon a re-assessment of the Premises,
Property or Shopping Center due to a change in ownership or transfer of all or
part of Landlord’s interest in the Premises, Property or Shopping Center; and
(v) any charge or fee replacing any tax previously included within the
definition of real property tax. “Premises Property Taxes” do not, however,
include Landlord’s federal or state income, franchise, inheritance or estate
taxes.

9.4       Percentage Rental.

9.5       Additional Rent.  Upon waiver of Tenant’s Contingency,
Tenant shall pay, as additional rent, all sums of money required to be paid
pursuant to the terms of this Article 9, the sums to be paid pursuant to
Articles 12, 22, 25 and Exhibit “C”, and all other sums of money or charges
required to be paid by Tenant under this Lease, whether or not such sums are
specifically designated as “additional rent.” All amounts required to be paid
by Tenant hereunder are sometimes collectively referred to as “Rent.”

9.6       Interest and Late Charges. If
Tenant fails to pay when due and payable, any Rent, additional rent, or other
sums due from Tenant under this Lease, the unpaid amounts shall bear interest
at the rate of 10% per annum commencing 30 days after the delinquency occured.

Tenant acknowledges that its late payment of any
monthly installment of Minimum Annual Rent will cause Landlord to incur certain
costs and expenses not contemplated under this Lease, the exact amount of which
is extremely difficult or impractical to fix. Such costs and expenses will
include, without limitation, loss of use of money, administrative and
collection costs, and processing and accounting expenses. Therefore, if any
Installment of Minimum Annual Rent is not received by Landlord from Tenant by
the fifth (5th) business day of the month for which such installment is due,
Tenant shall immediately pay to Landlord a late charge equal to 10% of such
installment. Such late charge is in addition to any interest due pursuant to
the preceding paragraph of this Section 9.6. Landlord and Tenant agree that
this late charge represents a reasonable estimate of costs and expenses
incurred by Landlord from, and is fair compensation to Landlord for its loss
suffered by, such nonpayment by Tenant. Acceptance of this late charge shall
not constitute a waiver of Tenant’s default with respect to such nonpayment by
Tenant nor prevent Landlord from exercising any other rights and remedies
available to Landlord under this Lease.

9.7       Payment of Rent.  All Rent and other payments due under
this Lease shall be paid by Tenant to Landlord at Landlord’s management office
in the Shopping Center, or at such other place as may from time to time be
designated by Landlord in writing at least 10 days prior to the next ensuing
payment date.

10.      NET SALES.

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11.      POSSESSION AND USE.

11.1     Permitted Uses and Prohibited
Conduct.  Possession of the Premises shall be
delivered to Tenant free and clear of all tenants and occupants and the rights
of either, and free of liens and encumbrances other than those specified in
Article 15 hereof. Tenant shall use the Premises solely for the purposes set
forth in Tenant’s Use Clause and shall operate its business only under the
trade name specified as Tenant’s Trade Name. Tenant shall not use or permit the
Premises to be used for any other purposes or under any other trade name.
Tenant shall not, without the prior written consent of Landlord, sell
merchandise from vending machines or allow any coin operated vending or gaming
machines on the Premises. Tenant shall not use or permit any person to use the
Premises for conducting a second-hand store, auction, distress or fire sale or
bankruptcy or going-out-of-business sale, or for any use or purpose in
violation of the laws, ordinances, regulations and requirements of the United
States or the State, County and City where the Shopping Center is located, or
any other lawful authority. Tenant shall, during the Term, keep the Premises in
a clean and wholesome condition, free of any objectionable noises, odors or
nuisances, and shall comply with all health and police regulations. All trash
and rubbish of Tenant shall be deposited only in receptacles provided by
Landlord and no other trash receptacles shall be permitted to remain outside
the Premises or Building. Landlord shall cause such receptacles to be emptied
and trash removed at Tenant’s expense. Tenant shall not cause or permit waste
to occur in the Premises and shall not overload any floor or abuse the plumbing
in the Premises.

Tenant may not display or sell merchandise or allow
carts, portable signs, devices or any other objects to be stored or to remain
outside the defined exterior walls, roof or permanent doorways of the Premises,
or in Building hallways. No aerials or antennae shall be erected on the roof or
exterior walls of the Premises or Building without first obtaining, in each
instance, the written consent of Landlord. Any aerial or antenna so installed
without Landlord’s written consent may be removed without notice at any time,
at Tenant’s expense. Tenant shall not solicit or distribute materials in any
manner in any of the Common Areas (including automobile parking facilities and
any enclosed mall of the Shopping Center).

11.2     Insurance Coverage Use Restrictions.  Tenant shall not carry any stock or goods
or do anything in or about the Premises which tends to increase the
insurance rates on the Building or Shopping Center or impairs Landlord’s
ability to maintain insurance coverage on the Building or Shopping Center.
Tenant agrees to pay to Landlord promptly upon demand the amount of any
increases in Landlord’s insurance premiums caused by Tenant’s violation of
these restrictions, whether or not Landlord has consented to such act(s) by
Tenant. If Tenant installs any electrical equipment in the Premises which overloads
the electrical lines of the Premises, Tenant shall, at its expense, make any
changes and install any fire extinguishing equipment required by Landlord’s
insurance underwriters or applicable fire, safety and building codes and
regulations. Nothing herein contained constitutes Landlord’s consent to such
overloading.

11.3     Deliveries.  Tenant shall use its best efforts to
complete all deliveries, loading, unloading and services to the Premises before
10:00 a.m. each day. Tenant shall attempt to prevent any delivery trucks or
other vehicles servicing the Premises from parking or standing in front of, or
at the rear of, the Premises from 10:00 a.m. to 9:00 p.m. of each day. Landlord
reserves the right to further regulate the activities of Tenant in regard to
deliveries to and servicing of the Premises, and Tenant agrees to abide by such
further non-discriminatory regulations of Landlord. Notwithstanding the foregoing,
there shall be no limitation on the times for delivery by any armored car
service.

12.      UTILITIES SERVICES.

12.1     Utilities Installation.  Landlord agrees that to the extent
provided for in Exhibit “C” hereof, it will initially make available to Tenant
(i) facilities for the removal of sewage and the delivery to and distribution
within the Premises of water, electricity, telephone service and natural gas
(which shall be used by Tenant for cooking and demonstration of gas operated
sales items only) [these facilities are collectively referred to in this
Article 12 as “utilities”], and (ii) a heating, ventilation and air
conditioning

 5
 

system (the “HVAC system”). Unless Landlord agrees
otherwise, Tenant shall use only those utilities and any HVAC system provided
for under Exhibit “C” to Serve the Premises. If required under Exhibit “C” a
separate meter shall measure the consumption of utilities and/or the HVAC
system.

If not required to be furnished by Landlord under
Exhibit “C”, Tenant shall be responsible for obtaining any utilities and/or
HVAC system required for Tenant’s business operations in the Premises.

12.2     Utilities and HVAC System Charges.  Tenant shall pay for all utilities used
by Tenant on the Premises from and after substantial completion of Landlord’s
Work in the Premises. If Tenant’s utilities and/or HVAC system are separately
metered, Tenant shall pay directly to the appropriate utility company the cost
of all such utilities used on the Premises. If any of Tenant’s utilities and/or
HVAC system are furnished by Landlord without separate metering, then during
the Term Tenant shall pay as additional rent, monthly in advance, a utilities
charge to reimburse Landlord for any such utilities furnished by Landlord to
the Premises. This utilities charge shall, at Landlord’s election, be
established (a) by an estimate of usage made from time to time by Landlord’s
engineer or the appropriate utility company, and initially based on a typical
store layout comparable to Tenant’s proposed use of the Premises, or (b) a
percentage of such total utility costs equal to a fraction, the numerator of
which is the Floor Area of the Premises, and the denominator of which is the
Floor Area of Shopping Center actually being furnished with utility service by
Landlord at the time of billing. If Tenant’s Premises is not separately
metered, such utilities and/or HVAC charges may be billed with Tenant’s share
of Common Area Costs under Section 25.3. The utilities charge to Tenant
hereunder for utilities furnished by Landlord shall be based on utility rates
which do not exceed those charged by the local public utility company for
services it would otherwise furnish directly to Tenant. If the Premises are not
initially separately metered, Landlord shall have the right, at its expense, to
install separate meters for the Premises at any time during the Term.

12.3     Failure to Pay.  If Tenant fails to pay any amount due to
Landlord hereunder within 10 days after receipt by Tenant of a bill therefor,
Landlord may (in addition to all other rights and remedies provided herein for
breach of this Lease and if permitted by law) cut off and discontinue, upon 5
days’ advance notice to Tenant and opportunity to cure, any such utilities
furnished to the Premises by Landlord until all such amounts are paid in full.

12.4     No Landlord Liability.  Landlord shall not be liable in damages
or otherwise for any failure or interruption of (i) any utility service being
furnished to the Premises, or (ii) operation of the HVAC system, if any. No
such failure or interruption shall entitle Tenant to terminate this Lease or
stop making any Rent or other payments due hereunder.

13.      INDEMNITY BY TENANT.

Tenant shall indemnify and hold Landlord harmless from
any and all costs, claims or liability of any kind arising out of: (a) Tenant’s
use and occupancy of the Premises, (b) the conduct of Tenant’s business or any
work, activity or other things allowed or permitted by Tenant to be done in or
on the Premises; (c) any breach or default in the performance of any of Tenant’s
obligations under this Lease; (d) any misrepresentation or breach of warranty
by Tenant under this Lease; and/or (e) any other acts or omissions of Tenant,
its agents, employees, invitees or contractors. Tenant shall, at Tenant’s
expense, and by counsel satisfactory to Landlord, defend Landlord in any action
or proceeding arising from any such claim or liability and shall indemnify
Landlord from and against all costs, attorney’s fees, expert witness fees and
any other expenses incurred in such action or proceeding. As a material part of
the consideration for Landlord’s execution of this Lease, Tenant hereby assumes
all risk of damage to property or injury to persons in, on or about the
Premises from any cause, and Tenant hereby waives all claims in respect thereof
against Landlord, except for any claim arising out of Landlord’s gross
negligence or willful misconduct.

14.      INSURANCE — WAIVER OF SUBROGATION.

14.1     Tenant’s Insurance Obligations.  Tenant shall, from and after the earlier
of (a) substantial completion of Landlord’s Work in the Premises, or (b)
commencement of any of Tenant’s Work in the Premises, and for the reminder of
the Lease Term maintain, at its expense, the following types of insurance
coverage, in the amounts specified and in the forms hereinafter provided for:

(i)        LIABILITY
INSURANCE. Commercial general liability insurance (sometimes known as
comprehensive general liability insurance) insuring Tenant against liability
for bodily injury, property damage (including loss of use of property) and
personal injury arising out of the operation, use or occupancy of the Premises.
Such policy shall be an occurrence form and shall include Owner’s and
Contractor’s Protective Liability with respect to construction of improvements
by Tenant on the Premises. Tenant shall name Landlord as an additional insured
under such policy. The initial amount of such insurance shall be not less than
$1,000,000 per occurrence. The liability insurance obtained by Tenant under
this Section 14.1 (i) shall (1) be primary and non-contributing; (2) contain
cross-liability endorsements; and (3) Insure Landlord against Tenant’s
performance under Article 13(a), (b) and (e) if the matters giving rise to the
indemnity under Article 13 result from the negligence of Tenant. The amount and
coverage of such insurance shall not limit Tenant’s liability nor relieve
Tenant of any other obligation under this Lease.

(ii)       PLATE
GLASS. Insurance covering the full replacement cost of all plate glass on the
Premises. Tenant shall have the option to self-insure this risk.

(iii)      TENANT IMPROVEMENTS. Insurance covering all of
the items specified as “Tenant’s Work” in Exhibit “C”, Tenant’s leasehold
improvements, alterations, additions or improvements permitted under Article
16, and trade fixtures, merchandise and personal property from time to time in,
on or upon the Premises. Such insurance shall cover not less than 100% of the
full replacement cost of the foregoing from time to time during the Term, and
shall provide protection against any peril included within the classification
of fire, extended coverage, sprinkler leakage, vandalism, theft, malicious
mischief and special extended perils (all risk). Any policy proceeds shall be
used for the repair or replacement of the property damaged or destroyed unless
this Lease is terminated under the provisions of Article 23 hereof.

(iv)      GENERAL
INSURANCE PROVISIONS.

(a) Any insurance required to be maintained by Tenant
hereunder shall include a provision which requires the insurance carrier to
give Landlord not less than thirty (30) days’ written notice prior to any
cancellation or modification of such coverage.

(b) A certificate of the
insurer or the insurer’s legal representative evidencing the existence and
amount of each insurance policy required of Tenant hereunder shall be delivered
to Landlord before the date Tenant is first given the right of possession of
the Premises, and thereafter at least 30 days prior to the expiration of any
such policy. Landlord may, at any time and from time to time, inspect and/or
copy any insurance policies required to be maintained by Tenant hereunder. No
such policy shall be cancellable except after 30 days’ written notice to
Landlord. If Tenant fails to deliver any such

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evidence of insurance to Landlord required under this
Lease within the prescribed time period or if any such policy is cancelled or
modified during the Lease Term without Landlord’s consent, Landlord may obtain
such insurance coverage, in which case Tenant shall reimburse Landlord for the
cost of such insurance within fifteen (15) days after receipt of a statement
therefor.

(c) All insurance shall be maintained with companies
holding a “General Policy Rating” of A-XII or better, as set forth in the most
current issue of “Best’s Key Rating Guide.” Landlord and Tenant acknowledge the
insurance markets are rapidly changing and that insurance in the form and amounts
described in this Section 14.1 may not be available in the future. Tenant
acknowledges that the insurance described in this Section 14.1 is for the
primary benefit of Landlord. If at any time during the Lease Term, Tenant is
unable to maintain the insurance required under the Lease, Tenant shall
nevertheless maintain insurance coverage which is customary and commercially
reasonable in the insurance industry for Tenant’s type of business, as that
coverage may change from time to time. Landlord makes no representation as to
the adequacy of such insurance to protect Landlord’s or Tenant’s interests.
Therefore, Tenant shall be responsible for obtaining any such additional
property or liability insurance which Tenant deems necessary to protect
Landlord and Tenant.

14.2     Landlord’s Insurance Obligations.  Landlord shall, in connection with its
ownership and operation of the Shopping Center, at all times from and after
commencement of Landlord’s Work in the Premises, maintain in effect policies of
insurance providing protection against the following liabilities and/or risks:
(a) commercial general liability insurance in an amount not less than
$1,000,000.00 combined single limit for bodily injury and property damage, and
(b) fire and extended coverage insurance (including coverage for Common Area
sprinkler damage, vandalism and malicious mischief, and, if required by any
lender holding a security interest in the Shopping Center or if deemed
necessary by Landlord, flood and earthquake insurance) on the Building and Shopping
Center in an amount not less than their full replacement cost (exclusive of the
cost of excavations, foundations and footings) from time to time during the
Term. The types and coverages of insurance maintained by Landlord hereunder
shall be subject to such further requirements as may be imposed by Landlord’s
lender. Landlord shall also have the right to maintain such additional types
and coverages of insurance (including business interruption insurance) as are
customary, prudent or reasonable for shopping centers similar to the Shopping
Center. Landlord’s obligation to carry the insurance provided for herein may be
satisfied by blanket policies if the coverage required hereunder is satisfied.

14.3     Waiver of Subrogation.  Landlord and Tenant (for themselves and
their insurers) each hereby waive all rights of recovery against the other and
against the officers, employees, agents and representatives of the other,
against any of the parties to the REA referred to in Article 15 hereof (the “Parties”)
and against other tenants of the Shopping Center (provided such Parties and
other tenants have waived such rights against Landlord and Tenant), on account
of any loss by or damage to the waiving party or its property or the property
of others under its control (including as to Tenant the Premises and its
contents, and as to Landlord the other portions of the Shopping Center),
arising from any risk generally covered by fire and extended coverage
insurance. The foregoing waivers of subrogation shall be required hereunder
only if (a) then available in the State where the Shopping Center is located,
and (b) such waiver does not invalidate the applicable policy.

15.      TITLE OF LANDLORD.

Landlord’s estate in the Shopping Center and Tenant’s
leasehold estate in the Premises is subject to the liens or restrictions of (a)
any matters or documents of record (the “Matters of Record”), including the
effect of any covenants, conditions, restrictions, easements, mortgages or
deeds of trust, ground leases, rights of way or any construction, operation and
reciprocal easement agreement (the “REA”); and (b) the effect of any zoning
laws of the City, County and State where the Shopping Center is located. Tenant
agrees that (i) Tenant and all persons in possession of Tenant’s leasehold estate
or holding under Tenant will conform to and will not violate the terms of any
REA or any other Matters of Record, and (ii) this Lease is subordinate to the
REA, if any, and any amendments or modifications thereto. If the REA, if any,
is not of record as of the date of this Lease, then this Lease shall
automatically become subordinate to the REA upon recordation of the REA. Tenant
agrees to execute and return to Landlord within 10 days after written demand
therefor by Landlord, an agreement in recordable form satisfactory to Landlord
subordinating this Lease to the REA. Any REA shall not prevent Tenant from
using the Premises for the purposes set forth in Tenant’s Use Clause.

16.      TENANT’S RIGHT TO MAKE ALTERATIONS.

16.1     Permitted Improvements.  Subject to the terms of this Article 16,
Tenant may from time to time after completion of Tenant’s Work and at its own
expense, make alterations, additions, Improvements and changes (individually
and collectively referred to in this Article 16 as “improvement(s)” In and to
the interior of the Premises after first giving notice to Landlord of the improvement
work proposed to be done and providing Landlord with all plans for such
proposed improvement work. Tenant may not make any improvement which reduces
the value of the Premises or is of a structural nature. No single improvement
costing more than $500.00 may be made without first obtaining the written
approval of Landlord. In addition, no improvement shall be made to any
storefront, mechanical system, or exterior wall or to the roof of the Premises,
nor shall Tenant erect any mezzanine or increase the size of an existing
mezzanine, unless and until the written consent and approval of Landlord is
first obtained.

No penetration into or through the roof or floor of
the Premises may be made without Landlord’s prior written approval of the
reason for such penetration and the method by which it is to be done. If
Landlord approves any such penetration, Landlord shall have the absolute right
to select and supervise the contractor performing such penetration. Tenant
shall be liable for any damage caused by any such penetration, whether or not
so approved by Landlord.

Tenant shall reimburse Landlord for all costs incurred
by Landlord (including architect’s and/or engineer’s fees) in approving Tenant’s
plans for improvements and for reasonable costs incurred by Landlord in
supervising any improvement work required to be approved by Landlord hereunder.

16.2     Construction Requirements.  All improvements to be made to the
Premises which require the approval of Landlord shall be performed under the
supervision of a competent architect or competent licensed structural engineer
and shall be made in accordance with plans and specifications first approved in
writing by Landlord before the commencement of work. All improvements shall be
constructed in a good and workmanlike manner in accordance with all applicable
laws (including any laws relating to the use of hazardous materials, such as
asbestos containing materials) and diligently completed. Before commencement of
any construction, Tenant shall deliver a copy of the building permit to
Landlord and shall provide Landlord with a list of all contractors or
subcontractors being used. Upon completion of such improvements, Tenant shall
file a Notice of Completion for record in the office of the County Recorder
where the Shopping Center is located, as required or permitted

 7
 

by law. Tenant shall provide Landlord with “as built”
plans, copies of all construction contracts, and proof of payment for all labor
and materials in connection with any improvements made to the Premises. Upon
expiration or earlier termination of this Lease, such improvements shall become
a part of the Premises and shall not be removed by Tenant. In constructing such
improvements, Tenant shall have the work performed in such a manner as not to
obstruct access to the premises of any other tenant in the Shopping Center.

16.3     Insurance Requirements.  If Tenant makes any permitted
improvements to the Premises under the provisions of this Article 16, Tenant
shall carry insurance covering any such improvements satisfying the
requirements of Section 14.1(III). It is expressly understood and agreed that
no such improvements will be insured by Landlord under the insurance it may
carry upon the Building or Shopping Center, nor shall Landlord be required to
reinstall any such improvements made by Tenant under any provision of Article
23 for reconstruction of the Premises.

17.      MECHANICS’ LIENS.

17.1     Tenant’s Covenants.  Tenant shall pay all costs for work done
by or for Tenant in the Premises (other than Landlord’s Work), and Tenant shall
keep the Premises, Building and Shopping Center free of all mechanics’ liens
and other liens on account of work done for Tenant. Tenant shall indemnify,
defend and hold Landlord harmless from and against any and all liability, loss,
damage, costs, attorneys’ fees and all other expenses on account of claims of
lien of laborers or materialmen or others for work performed or materials or
supplies furnished to or for Tenant or persons claiming under Tenant. In
addition, Tenant shall keep Tenant’s leasehold interest and any of those
improvements to the Premises which are or become property of Landlord pursuant
to this Lease free of all attachment or judgment liens. Prior to commencing any
work in or to the Premises (including the supply of any labor, services or
materials for the construction of improvements in the Premises under Article 16
or Exhibit “C”), Landlord may require Tenant to provide demolition and/or lien and
completion bonds in form and amount satisfactory to Landlord.

17.2     Tenant’s Contest of Lien.  If Tenant desires to contest any claim of
lien arising from work done by or for Tenant in the Premises, Tenant shall
first furnish Landlord adequate security in the amount of the claim, plus
estimated costs and interest, or a bond of a responsible corporate surety in
such amount, conditioned on the discharge of the lien. If a final judgment
establishing the validity or existence of any such lien for any amount is
entered. Tenant shall immediately pay and satisfy such judgment.

17.3     Landlord’s Right to Cure.  If Tenant is in default in paying any
charge for which a lien claim and suit to foreclose the lien have been filed,
and Tenant has not given Landlord adequate security to protect the Premises,
the property therein, and the Building, Shopping Center and Landlord from
liability for such claim of lien, Landlord may (but shall not be required to)
pay the claim and any associated costs, and the amount so paid, together with
reasonable attorneys’ fees incurred in connection with such payment shall be
immediately due and owing from Tenant to Landlord. Tenant shall pay the amounts
so owed to Landlord with interest at the maximum lawful rate from the date of
Landlord’s payment.

17.4     Notice of Lien.  If any claim of lien is filed against the
Premises or any action affecting the title to the Premises or the property
therein is commenced, the party receiving notice of such lien or action shall
immediately give the other party written notice thereof.

17.5     Notice of Non-Responsibility.  Landlord or its representatives shall
have the right to enter and inspect the Premises at all reasonable times and
shall have the right to post and keep posted thereon notices of
non-responsibility, or such other notices which Landlord deems proper for the
protection of Landlord’s interest in the Premises. Tenant shall, before
commencing any work which might result in the filing of a lien, give Landlord
written notice of its intention to so commence work in sufficient time to
enable Landlord to post such notices.

18.      ADVERTISING MEDIA.

19.      FIXTURES AND PERSONAL PROPERTY.

19.1     Removal and Replacement.  All of Tenant’s trade fixtures,
furnishings, furniture, signs and other personal property not permanently
affixed to the Premises (collectively referred to as “Personal Property”) shall
be in good condition when installed in or attached to the Premises by Tenant
and shall remain the property of Tenant. If Tenant is not then in default under
the terms of this Lease, Tenant shall have the right to remove its Personal
Property from the Premises, including without limitation, counters, shelving,
showcases, mirrors and other movable Personal Property, but prior to the
expiration of the Term Tenant may not remove so much of its Personal Property
without immediately replacing it with comparable or better quality Personal
Property, as to render the Premises unsuitable for conducting the business
specified in Tenant’s Use Clause. Tenant shall, at its expense, immediately
repair any damage to the Premises resulting from removal of its Personal
Property, and on the expiration or earlier termination of the Term shall leave
the Premises in a neat and clean condition, free of debris.

19.2     Fixtures.  All improvements to the Premises made by
or for Tenant, excluding Tenant’s Personal Property, but including mechanical
systems, light fixtures, floor coverings and partitions and all other items
comprising Tenant’s Work pursuant to Exhibit “C” (collectively referred to as “Fixtures”),
shall become the property of Landlord upon expiration or earlier termination of
this Lease.

19.3     Personal Property Taxes.  Tenant shall pay before delinquency all
taxes (including sales and use taxes), assessments, license fees and public
charges levied, assessed or imposed upon its business operations, merchandise,
trade fixtures and/or Personal Property. If any such items of property are
assessed with any Larger Parcel as defined in Section 9.3, Tenant shall pay
Landlord the taxes attributable to Tenant’s personal property within 15 days
after Tenant’s receipt of a written statement from Landlord setting forth such
personal property taxes. Landlord shall reasonably determine the basis of
prorating any such

 8
 

assessments and such determination shall be binding on
Landlord and Tenant.  No taxes,
assessments, fees or charges referred to and billed to Tenant under this
paragraph shall be considered to be taxes under the provisions of Section 9.3
hereof.

20.      ASSIGNING, MORTGAGING, SUBLETTING, CHANGE IN OWNERSHIP.

20.1     One Year Prohibition Against
Transfer.  Landlord and Tenant acknowledge that the
Shopping Center is an interdependent enterprise and that each party’s
realization of the benefits of this Lease depends upon Tenant’s creating and
maintaining a successful and profitable retail operation in the Premises.
Landlord and Tenant further acknowledge that the character and quality of
Tenant’s operation, and of the Shopping Center, will be enhanced by Tenant’s
use of its best efforts, for a reasonable period of time, to establish a
successful business and business image. Landlord and Tenant further agree that
one year is a reasonable period of time to attempt to achieve this goal.
Accordingly, Tenant agrees that for a period of one year from the date Tenant initially
opens to the public for business in the Premises (the “Occupancy Period”),
Tenant shall not, and shall not have the power to, transfer or assign this
Lease, sublet the Premises, enter into license or concession agreements, or
change ownership (such transactions are hereinafter individually and
collectively referred to as a “Transfer”), without first procuring the written
consent of Landlord, which may be given or withheld in Landlord’s sole
discretion. After the expiration of the Occupancy Period, Landlord’s consent to
any Transfer shall not be unreasonably withheld, subject to the terms,
covenants and conditions contained below.

20.2     Restrictions on Transfer.  If after expiration of the Occupancy
Period Tenant desires to effect a Transfer to anyone (a “Transferee”) other
than a successor, subsidiary, affiliated or controlling corporation of Tenant
(an “Affiliate”), Tenant shall give written notice (“Transfer Notice”) to
Landlord at least 60 days before the effective date of any such proposed
Transfer. The Transfer Notice shall state (a) whether Tenant proposes to assign
the Lease, sublet the Premises, enter into a license or concession agreement or
change ownership, (b) the proposed effective date of the Transfer, (c) the
identity of the proposed Transferee, (d) all other material terms of the
proposed Transfer, and (e) in detail the type of business operation the
proposed Transferee Intends to conduct on the Premises. The Transfer Notice
shall be accompanied by a copy of the proposed agreement documenting the
Transfer, or if none, a copy of any offers, draft agreements, letters of
commitment or intent and other documents pertaining to the proposed Transfer.
In addition, the Transfer Notice shall be accompanied by the proposed
Transferee’s income statements and balance sheets covering the preceding
36-month period, and each shall be certified as accurate by the Transferee.
Landlord may, at any time within 30 days after its receipt of Transfer Notice,
grant or withhold consent to such proposed Transfer (which consent shall not be
unreasonably withheld under the business judgment standards set forth in
Section 20.3 below) by mailing written notice to Tenant of its decision (“Decision
Notice”). If Landlord consents to the proposed Transfer Tenant may thereafter
promptly effect a Transfer in accordance with the terms of Tenant’s Transfer
Notice.

If Landlord consents to the proposed Transfer and
Tenant does not consummate the proposed Transfer within 30 days after receipt
of Decision Notice, the provisions of the first paragraph of this Section 20.2
shall again apply.

20.3     Grounds for Withholding Consent.  Landlord may withhold consent to a
proposed Transfer if, in Landlord’s reasonable business judgment, any of the
following is the case: (i) the proposed Transfer may result in deterioration in
the quality of merchandising operation conducted in the Premises, as compared
to the merchandising operation conducted by Tenant prior to the date of
Transfer Notice; (ii) the proposed Transferee lacks a good business reputation
or sufficient relevant business experience; (iii) the financial worth of the
proposed Transferee as of the date of Transfer Notice is less than the combined
financial worth of Tenant and Tenant’s guarantor (if any) as of either the date
of this Lease or the date of Transfer Notice; (iv) the proposed Transferee’s
proposed use of the Premises conflicts with Tenant’s Use Clause or is otherwise
incompatible with the tenant mix of the Shopping Center; (v) the annual
percentage rent Landlord reasonably anticipates receiving from the proposed
Transferee is significantly less than the annual percentage rent Landlord could
reasonably anticipate receiving from Tenant; or (vi) the proposed Transfer
would breach any covenant of Landlord respecting radius restrictions, use or
exclusivity rights in any other lease, or any financing or other agreement
relating to the Shopping Center. Any attempted or purported Transfer without
Landlord’s written consent shall be void and of no force or effect.

20.4     No Release from Liability.  No Transfer, whether with or without
Landlord’s consent, shall relieve Tenant or any guarantor of Tenant’s
obligations under this Lease, from its covenants and obligations hereunder
during the Term. Tenant shall, promptly upon demand, reimburse Landlord for
Landlord’s reasonable attorneys’ fees incurred in conjunction with the
processing and documentation of any requested Transfer. Landlord’s cost for
consent shall not exceed $750.00.

20.5     Transferee’s Obligations.  Each Transfer to which Landlord has
consented shall be evidenced by a written instrument in form satisfactory to
Landlord, and executed by Tenant and the Transferee. Each such Transferee shall
agree in writing for the benefit of Landlord to assume, be bound by, and
perform the terms, covenants and conditions of this Lease to be performed, kept
or satisfied by Tenant, including the obligation to pay to Landlord all amounts
coming due under this Lease. One fully executed copy of such written instrument
shall be delivered to Landlord. Failure to obtain in writing Landlord’s prior
consent or otherwise comply with the provisions of this Article 20 shall
prevent any Transfer from becoming effective.

20.6     Division of Profit Between Landlord
and Tenant.  Any
sums or other economic consideration received by Tenant as a result of a
Transfer, however denominated, which exceed, in the aggregate, (i) the total
sums which Tenant is obligated to pay Landlord under this Lease (prorated to
reflect obligations allocable to any portion of the Premises subleased), plus
(ii) the unamortized value of leasehold improvements to the Premises paid for
by Tenant prior to the date of Transfer Notice, depreciated on a straight-line
basis over the Term, plus (iii) any real estate brokerage commissions or fees
payable by Tenant in connection with such Transfer, plus (iv) costs of
renovation or construction of improvements to the Premises for the benefit of
the Transferee required to be paid for by Tenant as a part of the Transfer,
shall be divided equally between Landlord and Tenant. Landlord’s share of such
profit shall be paid to Landlord promptly following its receipt, as additional
rent under this Lease. Such payments shall not affect or reduce any other
obligations of Tenant hereunder. Landlord shall have the right to audit Tenant’s
books and records during normal business hours at either the Premises or Tenant’s
principal place of business upon 48 hours’ advance written notice for the
purpose of verifying Tenant’s compliance with its obligations hereunder.
Notwithstanding the foregoing, no profit shall be due Landlord for a sublease
of 200sf or less.

20.7     Further Restrictions.  Tenant shall not, without the prior
written consent of Landlord (which consent may be granted or withheld in
Landlord’s sole discretion), mortage or hypothecate this Lease or any interest
herein. Tenant shall not permit the Premises to be used by any party other than
Tenant or a permitted Transferee. Any of the foregoing acts without such
consent shall be void and shall, at the option of Landlord, terminate this
Lease. For purposes of this Article 20, if Tenant is a partnership, any
withdrawal(s) or change(s) of partners cumulatively owning a 50% or more
interest in the partnership, or if Tenant is a corporation, any transfer(s)
cumulating 50% or more of its stock, shall constitute a voluntary Transfer and
shall be subject to the provisions hereof. This Lease shall not, nor shall any
interest of Tenant herein, be assignable by operation of law without the
written consent of Landlord.

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21.      TENANT’S CONDUCT OF BUSINESS.

21.1     Tenant’s Operating Covenants.  Tenant agrees that from and after its initial
opening for business it shall, subject to the provisions of Section 23.5
hereof, operate and conduct its business in the Premises during all Shopping
Center Business Hours (as hereinafter defined) and in accordance with the
provisions of this Lease. Tenant shall at all times keep and maintain in the
Premises an adequate stock of merchandise and trade fixtures to satisfy the
usual and ordinary demands and requirements of its customers and shall keep the
Premises in a neat, clean and orderly condition.

21.2     Hours and Days of Operation.  Tenant shall
maintain hours of operation which are customary in the banking industry.

21.3     Radius Provision.

22.      REPAIR AND MAINTENANCE OF THE
PREMISES.

22.1     Tenant’s Obligations. Tenant shall, at its expense and at all times
from and after substantial completion of the Premises, repair, replace and
maintain in good and tenantable condition, the Premises and every part thereof
(except portions of the Premises to be maintained by Landlord under Section
22.2), including without limitation, the utility meters, pipes and conduits
serving the interior of the Premises, all fixtures, the storefront, plate
glass, all signs, locks and closing devices, all window sashes, casements or
frames, doors and door frames, security grilles or similar enclosures, floor
coverings, including carpeting, terrazzo or other special flooring, all other
equipment installed in the Premises, and all such items of repair, maintenance,
alteration and improvement or reconstruction to the Premises as may at any time
or from time to time be required by any governmental agency having jurisdiction
thereof. All exterior and interior glass in the Premises shall be maintained by
Tenant and any glass broken shall be promptly replaced by Tenant at its expense
with glass of the same kind, size and quality.

Tenant  shall, at Tenant’s expense, contract with
a qualified service company for the monthly maintenance of the HVAC system serving
the Premises. Promptly after entering into a maintenance contract with a
qualified HVAC system service company, Tenant shall deliver to Landlord a true
and correct copy of such maintenance contract.

Upon surrender of the
Premises, Tenant shall deliver the Premises to Landlord in good order,
condition and repair, but Tenant shall not be responsible for ordinary wear and
tear to the Premises, damage due to insured casualty losses covered by Article
23 or for any items of repair which are Landlord’s obligation under Section
22.2.

22.2     Landlord’s Obligations.  Subject to Tenant’s obligations under Section
22.1 and Landlord’s further obligations, if any, under Section 25.2, Landlord
shall, at the expense of Tenant and all other tenants of the Shopping Center,
repair and maintain in good and tenantable condition the roof, exterior walls,
structural parts of the Premises and Building (including the structural floor)
serving the Premises. Landlord shall bill Tenant for Tenant’s Proportionate
Share of the cost of such repairs and maintenance as a part of Common Area
Costs under Article 25 hereof, except for any costs or expenses relating to
HVAC.

Notwithstanding anything to
the contrary contained herein, (1) Tenant shall be responsible for the cost of
repairs to the HVAC system serving the Premises (which Landlord may bill to
Tenant as a part of Common Area Costs under Article 25 hereof), and (2) Tenant
shall be responsible at its expense for making any repairs necessitated by
reason of the negligence of Tenant, or by reason of the failure of Tenant to
perform or observe any of its obligations under this Lease or by reason of
alterations, additions, or improvements to the Premises made by Tenant.
Notwithstanding the foregoing, Landlord shall have the right (but shall not be
required to) make such repairs so necessitated by Tenant. If Landlord elects to
make such repairs on Tenant’s behalf, Tenant shall pay to Landlord any such
costs incurred by Landlord promptly following receipt of a bill therefor.

It is understood and agreed
that Landlord is under no obligation to make any repairs, alterations,
replacements or improvements to the Premises or the mechanical equipment
exclusively serving the Premises at any time except as expressly set forth in
this Lease.

Notwithstanding anything to
the contrary contained in this Lease, Landlord shall not be liable to Tenant
for failure to make repairs required of Landlord hereunder unless Tenant has
previously notified Landlord in writing of the need for such repairs and
Landlord has failed to commence and complete those repairs within a reasonable
period of time following receipt of Tenant’s notice.

22.3     Tenant’s Failure to Maintain Premises.  If Tenant fails to repair or maintain the
Premises, or any part thereof, in a manner reasonably satisfactory to Landlord,
Landlord shall have the right (in addition to all other rights and remedies
provided herein for breach of this Lease), upon giving Tenant reasonable
written notice of its election to do so (and opportunity to cure), to make

 10
 

such repairs or perform such maintenance on behalf of
and for the account of Tenant. In such event the cost of such work shall be
paid to Landlord by Tenant promptly following receipt of a bill therefore.

22.4     Landlord’s Right of Entry.  Landlord or its authorized
representatives may enter the Premises at all times during Shopping Center
Business Hours to inspect the Premises, make repairs to the Premises authorized
hereunder or perform any work therein (i) needed to comply with any laws,
ordinances, rules or regulations of any public authority or the Insurance
Services Office or any similar body, (ii) that Landlord deems necessary to
prevent waste or deterioration in or to the Premises if Tenant fails to make
repairs or perform required work promptly after receipt of written demand from
Landlord, or (iii) that Landlord deems necessary in connection with the
expansion, reduction, remodeling, or renovation of any portion of the Shopping
Center. Nothing herein implies any duty of Landlord to do any such work which,
under any provision of this Lease, Tenant is required to do, nor shall Landlord’s
performance of any repairs on behalf of Tenant constitute a waiver of Tenant’s
default in failing to do such work. No exercise by Landlord of any rights
hereunder shall entitle Tenant to any compensation, damages or abatement of
Rent for any injury or inconvenience occasioned by such exercise. If Landlord
makes or performs any repairs provided for in (i) or (ii) above, Tenant shall
pay the cost thereof to Landlord as additional rent promptly upon receipt of a
bill therefor. SEE ADDENDUM.

23.      CASUALTY DAMAGE AND
RECONSTRUCTION.

23.1     Insured Casualty.  If the Premises are damaged by fire or
other perils covered by Landlord’s fire and extended coverage insurance, then
within 90 days after the date of such damage Landlord shall commence repair,
reconstruction and restoration of the Premises and diligently complete such
repairs, in which event this Lease shall continue in full force and effect.
Notwithstanding the foregoing, if there is partial or total destruction of the
Premises during the last 1 year of the Term, Landlord and Tenant shall each
have the option to terminate this Lease by written notice to the other given
within 30 days after such destruction. For purposes of this option “partial
destruction” shall mean destruction to the extent of 50% or more of the full
replacement cost of the Premises as of the date of destruction.

23.2     Uninsured Casualty.  If the Premises are damaged to any extent
by act of war, nuclear reaction, nuclear radiation or radioactive
contamination, or from any other casualty not covered by Landlord’s fire and
extended coverage insurance (including flood or earthquake damage if not
covered under insurance maintained by Landlord), Landlord may within 90 days
following the date of such damage, either (a) commence repair, reconstruction
or restoration of the Premises and diligently complete it, in which event this
Lease shall continue in full force and effect, or (b) elect not to repair,
reconstruct or restore the Premises, in which event this Lease shall cease and
terminate as of the date of destruction. In either such event Landlord shall
give Tenant written notice of its election hereunder within said 90 day period.

23.3     Reconstruction Responsibilities.  Any reconstruction of the Premises under
this Article 23 shall conform to the provisions of Exhibit “C” and shall cover
all work set forth therein as “Landlord’s Work” and “Tenant’s Work”. Landlord
shall reconstruct the Premises only to the extent of Landlord’s Work. Tenant,
at its expense, shall reconstruct all items set forth as Tenant’s Work, and
shall replace its merchandise, trade fixtures, furniture, furnishings and
equipment. SEE ADDENDUM Tenant shall commence reconstruction of Tenant’s Work
promptly upon delivery to it of possession of the Premises by Landlord with
Landlord’s Work substantially completed and shall diligently complete Tenant’s
Work, replace its merchandise, trade fixtures, furniture, furnishings and
equipment, and resume normal business operations in the Premises.

23.4     Release from Liability.  Upon any termination of this Lease under
any of the provisions of this Article 23 each party shall be released from
further obligations to the other party under this Lease, except for any
obligations which have previously accrued. In the event of termination of this
Lease, all proceeds from Tenant’s fire and extended coverage insurance under
Section 14.1 covering the items set forth as “Tenant’s Work” in Exhibit “C” and
Tenant’s leasehold improvements, but excluding proceeds for trade fixtures,
furnishings, furniture, merchandise, signs and other personal property, shall
be paid to Landlord.

23.5     Abatement of Rent.  In the event of reconstruction of the
Premises under this Article 23, the Minimum Annual Rent otherwise payable under
this Lease shall be abated proportionately with the degree to which Tenant’s
use of the Premises is impaired. Such abatement shall commence on the date of
destruction and continue during any period of reconstruction and replacement
provided for in Section 23.3. Tenant shall continue to operate its business on
the Premises during any such abatement period to the extent practical as a
matter of prudent business management, and the obligation of Tenant to pay
percentage rental and additional rent hereunder shall remain in full force and
effect. Tenant shall not be entitled to any compensation or damages from
Landlord for loss of the use of the whole or any part of the Premises,
Building, Shopping Center or Tenant’s personal property, or for any
inconvenience or annoyance suffered by reason of damage or destruction thereto,
or the reconstruction or replacement thereof.

23.6     Waiver of Statutory Rights of
Termination.  Tenant hereby waives any statutory rights
of termination which may arise by reason of any partial or total destruction of
the Premises, Building or Shopping Center which Landlord is obligated to
restore or may restore under any of the provisions of this Lease.

24.      EMINENT DOMAIN.

24.1     Takings Resulting in Termination.  If the entire Premises is appropriated or
taken (a “taking”) under the power of eminent domain by any public or
quasi-public authority (an “authority”), this Lease shall terminate as of the
date of such taking. SEE ADDEND

If 25% or more of the Floor Area of the Premises is
taken under the power of eminent domain by any authority, or if by reason of
any taking, regardless of the amount taken, the remainder of the Premises is
not one undivided parcel of property, either Landlord or Tenant may terminate
this Lease as of the date Tenant is required to vacate a portion of the
Premises, upon giving notice in writing of such election within 30 days after
receipt by Tenant from Landlord of written notice that the Premises have been
so taken. Landlord shall promptly give Tenant notice in writing of any taking
after learning of it.

If more than 25% of the Floor Area of the Shopping
Center or of the Common Areas is taken (whether or not the Premises are so
taken) under the power of eminent domain by any authority, Landlord shall have
the right to terminate this Lease as of the date any such areas are to be
initially vacated by giving Tenant written notice of such election within 30
days of the date of such taking.

If this Lease is terminated as provided in this
Section 24.1 Landlord and Tenant shall each be released from any further
obligations to the other party under this Lease, except for any obligations
which have previously accrued.

24.2     Takings Not Resulting In Termination. If both Landlord and Tenant elect not to
exercise any right granted hereunder to terminate this Lease in connection with
a taking, or the Lease is not terminable in connection with a taking, Tenant
shall continue to occupy that portion of the Premises which was not taken, and
(a) at Landlord’s cost and expense and as soon as reasonably possible, Landlord
will restore the Premises on the land remaining to a complete unit of like
quality and character as existed

 11
 

prior to such taking; and (b) the Minimum Annual
Rental provided for in Section 3.h. and Article 9 shall be reduced on an
equitable basis, taking into account the relative value of the portion of the
Premises taken as compared to the portion remaining. Tenant hereby waives any
statutory rights of termination which may arise by reason of any partial taking
of the Premises under the power of eminent domain.

24.3     Award.  If this Lease is terminated under Section
24.1, or modified under Section 24.2, Landlord shall be entitled to receive the
entire condemnation award for the taking of all real property interests in the
Premises except to the extent any portion of the award may be allocable to
Tenant’s Work or any property of Tenant. The Rent and other charges for the
last month of Tenant’s occupancy shall be prorated and Landlord shall refund to
Tenant any Rent or other charges paid in advance. Notwithstanding the foregoing
and provided Tenant’s award does not reduce or affect Landlord’s award, Tenant’s
right to receive a condemnation award for the taking of its merchandise,
Personal Property, goodwill, relocation expenses and/or interests in other than
the real property taken shall not be affected in any manner by the provisions
of this Section 24.3. 

24.4     Transfer Under Threat of Taking.  For the purposes of this Article 24, a
voluntary sale or conveyance under threat of and in lieu of condemnation shall
be deemed a taking under the power of eminent domain.

25.      COMMON AREAS.

25.1     Use of Common Areas.  Tenant and its employees and invitees
are, except as otherwise specifically provided in this Lease or the Shopping
Center rules and regulations or as otherwise designated from time to time by
Landlord, authorized to use the Common Areas in common with other persons
during the Term. Landlord agrees that the Common Areas shall be initially
constructed on the areas generally shown on Exhibit “A”, and, subject to
the preceding sentence, shall be maintained and operated at all times following
completion thereof for the benefit and/or use of the customers and patrons of
Tenant and of other tenants, owners and occupants of the Shopping Center. The
original construction and installation of the Common Areas shall be at Landlord’s
expense.

25.2     Landlord’s Maintenance
Responsibilities; Common Area Costs.  Landlord shall keep the Common Areas and Shopping Center
neat, clean and orderly, properly lighted and landscaped, and shall repair any
damage to Common Area and Shopping Center facilities. Notwithstanding the
foregoing, all expenses incurred by Landlord in connection with the operation,
repair, cleaning and maintenance of the Common Areas and the Shopping Center (“Common
Area Costs”) shall be charged and prorated in the manner set forth in this
Article 25.

Common Area Costs shall include without limitation,
all sums expended in connection with the Common Areas and Shopping Center for:
general maintenance and repairs; resurfacing; painting; restriping; cleaning;
trash removal; snow and ice removal; sweeping and janitorial services;
lighting, HVAC and other utility expenses; maintenance, repair, cleaning and
replacement of public toilets, music program equipment and loudspeakers,
sidewalks, stairways, curbs, Shopping Center signs, sprinkler systems, planting
and landscaping, floors, walls, ceilings, roofs, skylights, windows,
directional signs, markers and bumpers, fire protection systems and equipment
(including fire sprinklers), security systems, lighting systems and fixtures
(including replacement of tubes and bulbs), storm drainage systems, plumbing,
electrical, HVAC and other utility systems which do not exclusively serve the
interior of tenants’ premises, and all mechanical equipment (including
automatic door openers, escalators and elevators); personnel to implement the
foregoing services, including, if Landlord deems necessary, the cost of
security guards; all on-site costs and personnel expenses of Landlord incurred
to manage the Shopping Center (which may be contracted for with third parties);
all real (as generally defined in Section 9.3b of this Lease) and personal (as
generally defined in Section 19.3 of this Lease) property taxes and assessments
on the improvements and land comprising the Common Areas and Shopping Center or
any personality in use on the Common Areas or Shopping Center; any sums paid to
third parties for the purpose of seeking reduction of property taxes; any
governmental imposition or surcharge imposed upon Landlord or assessed against
any portion of the Common Areas or Shopping Center; depreciation on maintenance
and operating machinery and equipment (if owned) and rental paid for such
machinery and equipment (if rented); and premiums for adequate comprehensive
general liability and property damage insurance covering Landlord’s ownership
and operation of the Common Areas and Shopping Center, fire and extended
coverage insurance on the Common Areas and the Shopping Center (which may
include earthquake and flood damage endorsements) and vandalism and plate glass
insurance covering the Common Areas and Shopping Center. Common Area Costs
shall also include a charge for appropriate reserves for the costs of
repainting, re-roofing and resurfacing Common Areas. In addition, Common Area
Costs shall include a sum to be payable to Landlord for supervision of the
Common Areas and for accounting, bookkeeping and collection of Common Area
Costs, in an amount equal to 10% of the total of all of the foregoing Common
Area Costs incurred in each calendar year. Landlord may have any or all
services and management performed in connection with the Common Areas and
Shopping Center provided by an independent contractor(s). Landlord represents that
it does not presently carry earthquake insurance. If in the future earthquake insurance
is required by law or lender, premiums shall be prorated as set forth herein. 

If Landlord acquires, constructs or makes available
for Common Area purposes land or improvements not shown as part of the Shopping
Center on Exhibit “A”, then Common Areas Costs shall also include all of the
expenses itemized above incurred and paid in connection with such additional
land or improvements.

25.3     Method of Payment.  Portions of the Shopping Center may be
owned or leased by the occupants of those buildings designated by Landlord as a
“Major Store” on Exhibit “A” (hereinafter referred to as the “Major Store
Occupants”). The contributions of the Major Store Occupants towards the Common
Area Costs shall be credited toward payment of the entirety of the Common Area
Costs and the balance of the Common Area Costs shall be prorated among the
other tenants of the Shopping Center in the following manner:

(i)        From
and after the date Rent has commenced, and thereafter during the Term, Tenant
shall pay to Landlord, on the first day of each calendar month, an amount
estimated by Landlord to be Tenant’s Proportionate Share of Common Area Costs
for the period covered by such estimate. This estimated monthly charge may be
adjusted by Landlord at the end of any calendar month on the basis of Landlord’s
experience and reasonably anticipated Common Area Costs.

(ii)       Within
60 days following the end of each calendar year (or as soon thereafter as
possible), Landlord shall furnish Tenant with a statement showing the actual
total of Common Area Costs for the preceding year, the actual amount of Tenant’s
Proportionate Share of Common Area Costs for that year and the payments made by
Tenant for that year under subparagraph (i) above. If Tenant’s Proportionate
Share of Common Area Costs exceeds the estimated payments made by Tenant under
subparagraph (i) above, Tenant shall pay Landlord the deficiency within 10 days
after receipt of such statement. If Tenant’s estimated payments exceed Tenant’s
Proportionate Share of Common Area Costs, Tenant may offset the excess against
payments thereafter coming due under subparagraph (i) above or receive a refund
following the expiration of the Term. There shall be an appropriate adjustment
of Tenant’s Proportionate Share of Common Area Costs as of the commencement of
Rent and expiration of the Term. Landlord’s and Tenant’s obligations hereunder
shall survive expiration of the Term.

 12
 

Tenant’s failure to pay any sums due hereunder shall
constitute a default under this Lease equivalent to a failure to pay Minimum
Annual Rent when due.

 

25.4     Control of Common Areas.  Landlord shall have the right at all
times to determine the nature and extent of the Common Areas and to make
changes from time to time which in Landlord’s opinion are desirable and in the
best interests of all persons using the Common Areas. Landlord’s rights
hereunder include without limitation, the right to install, remove, relocate
and change driveways, entrances, exits, automobile parking spaces, the
direction and flow of traffic, prohibited areas, landscaped areas, utilities
and all facilities of the foregoing.

Landlord shall have exclusive control of the Common
Areas, and may, without limitation, lease space within the Common Areas to
tenants for the sale of merchandise or services, and permit advertising
displays, educational displays and entertainment in the Common Areas; provided,
however, none of the foregoing shall materially adversely affect the visibility
or accessibility of the Premises. Landlord may at any time and from time to
time during the Term exclude and restrain any person from use or occupancy of
the Common Areas, except for bona fide customers, patrons and service suppliers
of Tenant and other tenants and occupants of the Shopping Center who use the
Common Areas in accordance with the rules and regulations then established by
Landlord. The rights of Tenant under this Article 25 shall at all times be
subject to the rights of Landlord, the other tenants of Landlord and the other
owners and occupants of the Shopping Center to use the Common Areas in common
with Tenant. Tenant shall not create or permit any obstructions in the Common
Areas and shall permit its customers, patrons and service suppliers to use the
Common Areas only for normal parking and ingress and egress to and from the
Building occupied by Tenant.

25.5     Rules and Regulations.  Landlord shall have the right to
establish, and from time to time change, alter and amend, and to enforce
against Tenant and the other users of the Common Areas, such reasonable rules
and regulations (including the exclusion of employees’ parking from Common
Areas) as Landlord may deem necessary or advisable for the proper and efficient
operation and maintenance of the Common Areas and Shopping Center. The rules
and regulations may include, without limitation, the hours during which the
Common Areas, including any enclosed mall, shall be open for use. If
incorporated as a part of this Lease as of the effective date of this Lease,
Tenant shall comply with the Rules and Regulations attached to this Lease as
Exhibit “B”.

25.6     Employee Parking. Landlord shall at all times have the
right to designate a particular parking area to be used by employees of Tenant
and other occupants of the Shopping Center and any such designation may be
changed by Landlord from time to time. Tenant and its employees shall park
their cars only in those portions of the Common Areas, if any, designated for
that purpose by Landlord. Tenant shall furnish Landlord from time to time with
an accurate current list of its and all its employees’ automobile license plate
numbers within 15 days after taking possession of the Premises and thereafter
within 5 days after any change in the accuracy of the list. If Tenant or its
employees fail to park their cars in designated parking areas, Landlord may
charge Tenant $25.00 per day per car for each such violation and shall have the
right to have any such car towed away. All amounts due under the provisions of
this Section 25.6 shall be payable by Tenant within 10 days after demand by
Landlord.

26.      DEFAULTS BY TENANT.

26.1     Events of Default.  Each of the following shall constitute a
material default and breach under this Lease:

(a)       If
Tenant is at any time in default of its obligation to pay any Rent or other
charges, and such default continues for more than 10 days after written notice
of such default;

(b)       If
Tenant is in default in the prompt and full performance of any other of its
obligations under this Lease and such default continues more than 30 days after
written notice specifying the particulars of such default;

(c)       If
Tenant vacates or abandons the Premises or otherwise fails to occupy and
operate the Premises in accordance with Article 21;

(d)       (i)
If Tenant or any guarantor of this Lease makes a general assignment or general
arrangement for the benefit of creditors; or (ii) if a petition for
adjudication of bankruptcy or for reorganization or rearrangement is filed by
or against Tenant or any guarantor and is not dismissed within thirty (30)
days; or (iii) if a trustee or receiver is appointed to take possession of
substantially all of Tenant’s assets located at the Premises or of Tenant’s
interest in this Lease and possession is not restored to Tenant within thirty
(30) days; or (iv) if substantially all of Tenant’s assets located at the
Premises or of Tenant’s interest in this Lease is subjected to attachment,
execution or other judicial seizure which is not discharged within thirty (30)
days. If a court of competent jurisdiction determines that any of the acts
described in this subparagraph (d) is not a default under this Lease, and a
trustee is appointed to take possession of Tenant’s assets or if Tenant remains
a debtor in possession and such trustee or Tenant transfers Tenant’s interest
in this Lease, then Landlord shall receive, as additional rent, the excess, if
any, of the rent (or any other consideration) paid in connection with such
assignment or sublease over the Rent payable by Tenant hereunder; or

(e)       If
any guarantor of the Lease revokes or otherwise terminates, or purports to
revoke or otherwise terminate, any guaranty of all or any portion of Tenant’s
obligations under the Lease. Unless otherwise expressly provided, no guaranty
of the Lease is revocable.

26.2     Remedies Upon Breach of Lease.  On the occurrence of any breach of this
Lease by Tenant, Landlord may, at any time thereafter, with or without notice
or demand and without limiting Landlord in the exercise of any right or remedy
which Landlord may have:

(a)       Terminate
Tenant’s right to possession of the Premises and reenter the Premises by any
lawful means, in which case this Lease shall terminate. In such case Tenant
shall immediately surrender possession of the Premises to Landlord; or

(b)       Maintain
Tenant’s right to possession of the Premises, in which case this Lease shall
continue in effect whether or not Tenant has abandoned the Premises. In such
event Landlord shall be entitled to enforce all Landlord’s rights and remedies
under this Lease, including the right to recover the Rent as it becomes due and
Landlord shall have the right to occupy or re-let the whole or any part of the
Premises for the account of Tenant; or

(c)       Pursue
any other remedy now or hereafter available to Landlord under the laws or
judicial decisions of the state in which the Shopping Center is located.

If Landlord reenters the
Premises under the provisions of subparagraph (b) above, Landlord shall not be
deemed to have terminated this Lease, or the liability of Tenant to pay any
Rent or other charges that are due or thereafter accruing, or Tenant’s
liability for damages under any of the provisions hereof. In the event of any
entry or taking possession of the Premises as

 13
 

aforesaid, Landlord shall have in addition to its
rights under Section 26.4 hereof, the right, but not the obligation, to remove
from the Premises any personal property located therein and to place it in
storage at a public warehouse at the expense and risk of Tenant.

Notwithstanding any other term or provision hereof to
the contrary, this Lease shall terminate on the occurrence of any act which
affirms Landlord’s intention to terminate this Lease as provided in this
Section 26.2, including the filing of an unlawful detainer action against
Tenant. On such termination, Landlord’s damages for default shall include all
costs and fees, including reasonable attorneys’ fees, incurred by Landlord in
connection with the filing, commencement, pursuing or defending of any action
in any bankruptcy court or other court with respect to the Lease, the obtaining
of relief from any stay in bankruptcy restraining any action to evict Tenant,
or the pursuing of any action with respect to Landlord’s right to possession of
the Property. All such damages suffered (apart from Minimum Annual Rent and
other Rent payable hereunder) shall constitute pecuniary damages which must be
reimbursed to Landlord prior to assumption of the Lease by Tenant or  any successor to Tenant in any bankruptcy
or other proceeding.

Landlord’s exercise of any right or remedy shall not
prevent it from exercising any other right or remedy.

It is understood and agreed that this Lease is a lease
of real property in a shopping center within the meaning of 11 U.S.C. Section
365(b)(3) of the Bankruptcy Code.

26.3     Landlord’s Damages.  If Landlord elects to terminate this
Lease and Tenant’s right to possession of the Premises in accordance with the
provisions of this Lease, Landlord may recover from Tenant as damages, all of
the following:

(i)        The
worth at the time of award of any unpaid Rent and other charges which has been
earned at the time of such termination; plus

(ii)       The
worth at the time of award of the amount by which the unpaid Rent and other
charges which would have been earned after termination until the time of award
exceeds the amount of such rental loss Tenant proves Landlord could have
reasonably avoided; plus

(iii)      The worth at the time of award of the amount by
which the unpaid Rent and other charges which Tenant would have paid for the
balance of the Term after the time of award exceeds the amount of such rental
loss that Tenant proves Landlord could have reasonably avoided; plus

(iv)      Any
other amount necessary to compensate Landlord for all the detriment proximately
caused by Tenant’s failure to perform its obligations under this Lease or which
in the ordinary course of things would be likely to result therefrom, including
without limitation, any costs or expenses incurred by Landlord in (a)
maintaining or preserving the Premises after such default, (b) recovering
possession of the Premises, including reasonable attorneys’ fees therefor, (c)
expenses of reletting the Premises to a new tenant, including necessary
renovations or alterations of the Premises, reasonable attorneys’ fees incurred,
and leasing commissions incurred; plus

(v)       Such
other amounts in addition to or in lieu of the foregoing as may be permitted
from time to time by the laws of the State where the Shopping Center is
located.

As used in subparagraphs (i) and (ii) above, the “worth
at the time of award” is computed by allowing interest on unpaid amounts at the
rate of 10% per annum. As used in subparagraph (iii) above, the “worth at the
time of award” is computed by discounting such amount at the discount rate of
the Federal Reserve Bank located nearest to the Shopping Center in effect at
the time of award, plus 1%.

For purposes of this Article 26, all Rent other than
Minimum Annual Rent, shall, for purposes of calculating any amount due under
the provisions of subparagraph (iii) above, be computed on the basis of the
average monthly amount of Rent payable by Tenant during the immediately
preceding 36 month period, except that if it becomes necessary to compute such
rental before such 36 months of the Term has expired, then such Rent shall be
computed on the basis of the average monthly amount of Rent payable during such
shorter period.

26.4     Fixtures and Personal Property. In the event of
Tenant’s default, all of Tenant’s merchandise, Fixtures and other Personal
Property shall remain on the Premises, and during the period of default
Landlord shall have the right to take the exclusive possession of such items
and to use them free of charge until all defaults are cured, or, at Landlord’s
option, to require Tenant to forthwith remove such items.

The rights and remedies given to Landlord in this
Article shall be in addition and supplemental to all other rights or remedies
which Landlord may have under the laws in force when the default occurs.

26.5     No  Waiver.  The waiver by Landlord of any breach by Tenant of any term,
covenant or condition contained in this Lease shall not be deemed to be a
waiver of such term, covenant or condition, of any subsequent breach thereof,
or of any other term, covenant or condition of this Lease. The subsequent
acceptance of Rent hereunder by Landlord shall not be deemed to be a waiver of
any preceding breach by Tenant of any term, covenant or condition of this Lease
or of any right of Landlord to a forfeiture of the Lease by reason of such
breach, regardless of Landlord’s knowledge of such preceding breach at the time
of acceptance of such Rent. No term, covenant or condition of this Lease shall
be deemed to have been waived by Landlord unless such waiver is in writing and
signed by Landlord.

27.      DEFAULTS BY LANDLORD.

If Landlord fails to
perform any covenant, condition, or agreement contained in this Lease within 30
days after receipt of written notice from Tenant specifying such failure (or if
such failure cannot reasonably be cured within 30 days, if Landlord does not
commence to cure the failure within that 30 day period), then such failure
shall constitute a default hereunder and Landlord shall be liable to Tenant for
any damages sustained by Tenant as a result of Landlord’s default; provided,
however, it is expressly understood and agreed that if Tenant obtains a money
judgment against Landlord resulting from any default or other claim arising
under this Lease, that judgment shall be satisfied only out of the rents,
issues, profits, and other income actually received on account of Landlord’s
right, title and interest in the Premises, Building and/or Shopping Center, and
no other real, personal or mixed property of Landlord (or of any of the
partners which comprise Landlord, or of partners or principals of such partners
comprising Landlord, if any, or of Landlord’s officers, shareholders or
directors, if any) wherever situated, shall be subject to levy, attachment or
execution, or otherwise used to satisfy any such judgment. Tenant hereby waives
any right to satisfy a judgment against Landlord except from the rents, issues,
profits and other income actually received on account of Landlord’s right,
title and interest in the Premises, Building and/or Shopping Center.

 14
 

If, after notice to Landlord of default, Landlord (or any first
mortgagee or first deed of trust beneficiary of Landlord) fails to cure the
default as provided below, then (subject to the provisions of Section 22.2.
hereof) Tenant shall have the right to cure that default at Landlord’s expense.
In such case Landlord shall pay the reasonable cost of such cure promptly
following receipt of a bill from Tenant itemizing the cost of such cure. Tenant
shall not have the right to terminate this Lease or to withhold, reduce or
offset any cost of such cure against any payments of Rent or any other charges
due and payable to Landlord under this Lease, except as otherwise specifically
provided in this Lease.

Tenant agrees to send by certified or registered mail to any mortgagee
or deed of trust beneficiary of the Shopping Center whose address has been
furnished to Tenant, a copy of any notice of default served by Tenant on
Landlord. If Landlord fails to cure such default within the time provided for
in this Lease, Tenant shall provide any such mortgagee or beneficiary with
notice of such failure and such mortgagee or beneficiary shall have an
additional 30 days following receipt of such notice to cure such default;
provided that if such default cannot reasonably be cured within that additional
30 day period, then such mortgagee or beneficiary shall have such additional
time to cure the default as is reasonably necessary under the circumstances.

28.      ATTORNEYS’ FEES.

If at any time after the date hereof either Landlord or Tenant
institutes any action or proceeding against the other relating to the
provisions of this Lease or any default hereunder, the losing party in such
action or proceeding shall reimburse the winning party for its reasonable
expenses of attorneys’ fees and all costs and disbursements incurred, including,
without limitation, any such fees, costs or disbursements incurred on any
appeal from such action or proceeding. Subject to the provisions of local law,
the winning party shall recover all such fees, costs or disbursements as costs
taxable by the court or arbiter in the action or proceeding itself without the
necessity for a cross-action by the winning party.

29.      SUBORDINATION — ATTORNMENT.

29.1     Subordination.  Within 10 days after receipt of a written
request from Landlord, any first mortgagee or first deed of trust trustee or
beneficiary of Landlord, or any lessor of Landlord, Tenant shall, in writing,
subordinate its rights under this Lease to the lien or security interest of the
first mortgage or deed of trust (including all future advances made thereunder
subsequent to the effective date of this Lease), the interest of any lease in
which Landlord is the lessee, or any REA that may burden the Premises,
Building, Shopping Center, Property or any future improvements made to the
Property.

29.2     Attornment.  If Landlord’s interest in the Premises is
acquired by any ground lessor, beneficiary under a deed of trust, mortgagee or
purchaser at a foreclosure sale, then Tenant shall upon request, attorn to such
transferee of or successor to Landlord’s interest in the Premises and recognize
such transferee or successor as Landlord under this Lease, provided such
transferee or successor accepts the Premises subject to this Lease.

29.3     Estoppel Certificate.  Tenant shall, at any time and from time
to time, upon not less than 10 days’ prior written notice from Landlord,
execute, acknowledge and deliver to Landlord a written statement substantially
in the form of Exhibit “D” certifying (i) that this Lease represents the entire
agreement between Landlord and Tenant, and is unmodified and in full force and
effect (or, if modified, stating the nature of such modification and certifying
that this Lease, as so modified, is in full force and effect), (ii) the dates
to which the Rent and other charges are paid in advance, If any; (iii) the
Commencement Date and expiration date of the Lease Term, (iv) whether Tenant
has assigned or transferred this Lease or any interest of Tenant therein; and
(v) that there are not, to Tenant’s knowledge, any uncured defaults on the part
of Landlord hereunder and that Tenant has no right of offset, counterclaim or
deduction against Rent, or specifying such defaults if any are claimed together
with the amount of any offset, counterclaim or deduction alleged by Tenant. Any
such statement may be relied upon by any prospective purchaser or lender upon
the security of the real property of which the Building and the Premises are a
part. Tenant’s failure to deliver such statement within the time required shall
be conclusive and binding upon Tenant that (a) this Lease is in full force and
effect, without modification except as may be represented by Landlord, (b)
there are no uncured defaults in Landlord’s performance and that Tenant has no
right of offset, counterclaim or deduction against Rent, and (c) no more than
one month’s Rent has been paid in advance.

30.      QUIET POSSESSION.

Landlord agrees that Tenant, upon paying the Rent and timely performing
its obligations under this Lease, may quietly have, hold and enjoy the Premises
during the Term or any extension thereof; subject, however, to any rights of
entry specifically granted to Landlord hereunder, any REA and any mortgages,
deeds of trust, ground or underlying leases, agreements, encumbrances and/or
other Matters of Record to which this Lease is subordinate.

31.      MERCHANTS’ ASSOCIATION.

31.2     Grand Opening Promotional Fund.  Tenant shall separately pay when billed
its prorata share, not to exeed $2,838 to provide Landlord with funds to
promote the “grand opening” of the Shopping Center, and/or Tenant’s business.
Tenant shall only incurr this cost one time. Also, SEE ADDENDUM.

32.      CAPTIONS; JOINT AND SEVERAL
LIABILITY.

32.1.    Captions.  The captions of the Articles and Sections
of this Lease are for convenience only, are not operative parts of this Lease
and do not in any way limit or amplify the terms and provisions of this Lease.

 15
 

32.2     Joint and Several Liability. If two
or more persons or entities execute this Lease as Landlord or Tenant then such persons
or entities shall be jointly and severally liable for compliance with and
performance of all the terms, covenants and provisions of this Lease.

33.      NOTICES.

Wherever this Lease requires or permits notice or demand to be given by
either party to the other, such notice or demand shall be in writing and given
or served either personally or in writing forwarded by certified mail, return
receipt requested, addressed to the parties at the addresses specified in
Section 3.g. hereof. Either party may change such address by written notice to
the other as herein provided.

34.      OBLIGATIONS OF SUCCESSORS.

Except as otherwise provided herein, all of the provisions of this
Lease shall bind and inure to the benefit of the parties hereto, and their
respective heirs, legal representatives, successors and assigns.

35.      CONSENT OF LANDLORD AND
TENANT.

Wherever in this Lease consent or approval is required from either
party to any action by the other, such consent or approval shall be given in
writing and shall not be unreasonably withheld, unless otherwise expressly
permitted in this Lease. Landlord shall not be deemed to have withheld its
consent unreasonably where Landlord’s right to give its consent is dependent on
Landlord obtaining the consent of any other person, agency or authority having
the right to withhold its consent pursuant to any agreement or law and such
person, agency or authority does withhold its consent.

If Landlord or Tenant unreasonably fails to give any such consent, the
other party shall be entitled to specific performance in equity and shall have
such other remedies as are reserved to it under this Lease, but in no event
shall Landlord or Tenant be responsible in monetary damages for failure to give
consent unless such consent is withheld maliciously or in bad faith.

36.      SECURITY DEPOSIT.

36.1     Payment of Security Deposit.  Tenant has deposited with Landlord the
sum specified in Section 2.k. hereof as the “Security Deposit”, receipt of
which is hereby acknowledged. The Security Deposit shall be held by Landlord
without liability for interest as security for the faithful performance by
Tenant of all of its obligations under this Lease. The Security Deposit shall
not be mortgaged, assigned, transferred or encumbered by Tenant without the
prior written consent of Landlord and any such action by Tenant without such
consent shall be without force and effect and not binding on Landlord.

36.2     Application of Security Deposit.  If any Rent herein reserved or any other
sum payable by Tenant to Landlord is overdue and unpaid or paid by Landlord on
Tenant’s behalf, or if Tenant fails to perform any of its obligations under
this Lease, then Landlord may, at its option and without prejudice to any other
remedy which Landlord may have, appropriate and apply the entire Security
Deposit or so much as is necessary to compensate Landlord for loss of Minimum
Annual Rent or additional rent, or other damages sustained by Landlord due to
such default by Tenant. Tenant shall forthwith upon demand restore the Security
Deposit to the original sum deposited. If Tenant complies with all of the terms
of the Lease and promptly pays when due all Rent and all other sums payable by
Tenant under this Lease, the Security Deposit (or the balance thereof
remaining) shall be returned in full to Tenant not later than 14 days following
the end of the Term and delivery of possession of the Premises to Landlord.

36.3     Bankruptcy. In the
event of bankruptcy or other debtor-creditor proceedings against Tenant, the
Security Deposit shall be deemed to be applied first to the payment of Rent and
other charges due Landlord for the earliest periods prior to the filing of such
proceedings.

36.4     Transfer of Landlord’s Interest.  Landlord may deliver the funds deposited
hereunder by Tenant to the purchaser of Landlord’s interest in the Premises and
Landlord shall thereupon be discharged from any further liability to Tenant for
the Security Deposit. This provision shall also apply to any subsequent
transfers of Landlord’s interest in the Premises. In the case of such transfer
of the Security Deposit, Landlord shall give written notice to Tenant of any
existing claims against the Security Deposit and of the name and address of
Landlord’s successor.

37.      MISCELLANEOUS.

37.1     Relationship of the Parties.  Nothing contained in this Lease shall be
deemed or construed to create a partnership or joint venture between Landlord
and Tenant or between Landlord and any other party, or cause Landlord to be
responsible in any way for the debts or obligations of Tenant or anyone else.

37.2     Severability.  If any provision of this Lease is
determined to be void by any court of competent jurisdiction, such
determination shall not affect any other provision of this Lease and all such
other provisions shall remain in full force and effect. It is the intention of
the parties that if any provision of this Lease is capable of two
constructions, one of which would render the provision void and the other of
which would render the provision valid, then the provision shall have the
meaning which renders it valid.

37.3     Corporate Authority; Partnership
Authority.  If
Tenant is a corporation, each person signing this Lease on behalf of Tenant
represents and warrants that he has full authority to do so and that this Lease
binds the corporation. Within thirty (30) days after this Lease is signed, Tenant
shall deliver to Landlord a certified copy of a resolution of Tenant’s Board of
Directors authorizing the execution of this Lease or other evidence of such
authority reasonably acceptable to Landlord. If Tenant is a partnership, each
person or entity signing this Lease for Tenant represents and warrants that he
or it is a general partner of the partnership, that he or it has full authority
to sign for the partnership and that this Lease binds the partnership and all
general partner’s of the partnership. Tenant shall give written notice to
Landlord of any general partner’s withdrawal or addition. Within thirty (30)
days after this Lease is signed, Tenant shall deliver to Landlord a copy of
Tenant’s recorded statement of partnership, certificate of limited partnership
or other evidence of partnership satisfactory to Landlord.

37.4     Entire Agreement.  It is understood that there are no oral
or written agreements or representations between the parties hereto affecting
this Lease, and that this Lease supersedes and cancels any and all previous
negotiations, arrangements, representations, brochures, displays, projections,
estimates, agreements and understandings, If any, made by or between Landlord
and Tenant with respect to the subject mailer thereof, and none thereof shall
be used to Interpret, construe, supplement or contradict this Lease. This
Lease, and all amendments hereto, are the only agreement between the parties
hereto. All negotiations and oral agreements acceptable to both parties have
been merged into and are included in this Lease.

 16
 

There are no other representations, covenants or warranties between the
parties and any reliance on representations of a party is based solely upon the
express representations, covenants and warranties contained in this Lease.
Although the printed provisions of this Lease were drawn by Landlord, the
parties agree that this circumstance alone shall not create any presumption,
canon of construction or implication favoring the position of either Landlord
or Tenant. The parties agree that any deletion of language from this Lease
prior to its mutual execution by Landlord and Tenant shall not be construed to
have any particular meaning or to raise any presumption, canon of construction
or implication, including, without limitation, any implication that the parties
intended thereby to state the converse, obverse or opposite of the deleted
language.

37.5     Governing Law.  The laws of the state where the Shopping
Center is located shall govern the validity, performance and enforcement of this
Lease.

37.6     Waiver or Consent Limitations.  A waiver of any breach or default under
the Lease shall not be a waiver of any other breach or default. Landlord’s
consent to or approval of any act by Tenant requiring Landlord’s consent or
approval shall not be deemed to waive or render unnecessary Landlord’s consent
to or approval of any subsequent similar act by Tenant.

37.7     Force Majeure.  The occurrence of any of the following
events shall excuse performance of such obligations of Landlord or Tenant as are
rendered impossible or reasonably impracticable to perform while such event
continues: strikes; lockouts; labor disputes; acts of God; inability to obtain
labor, materials or reasonable substitutes therefor; governmental restrictions,
regulations or controls; judicial orders; enemy or hostile governmental action;
civil commotion; fire or other casualty; and other causes beyond the reasonable
control of the party obligated to perform. Notwithstanding the foregoing, the
occurrence of such events shall not excuse Tenant’s obligations to pay Minimum
Annual Rent and additional rent (unless the provisions of Article 23 apply) or
excuse such obligations as this Lease may nevertheless otherwise impose on the
party to obey, remedy or avoid, despite such event. If any work performed by
Tenant or Tenant’s contractor results in a strike, lockout and/or labor
dispute, such strike, lockout and/or labor dispute shall not excuse Tenant’s
performance hereunder.

37.8     Waiver of Redemption Rights.  Tenant hereby expressly waives any and
all rights of redemption granted by or under any present or future laws in the
event Tenant is evicted from or dispossessed of the Premises for any cause, or
in the event Landlord obtains possession of the Premises by reason of the
violation by Tenant of any of the covenants and conditions of this Lease or
otherwise. The rights given to Landlord herein are in addition to any rights
that may be given to Landlord by any statute or otherwise.

37.9     Amendments.  To be effective and binding on Landlord and
Tenant, any amendment, modification, addition or deletion to the provisions of
this Lease must be in writing and executed by both parties in the same manner
as the Lease itself.

37.10   Right to Enter.  Landlord and/or its authorized
representatives shall have the right to enter the Premises at all reasonable
times for the purpose of showing the Premises to prospective purchasers or
lenders.

37.11   Definition of Landlord.  As used in this Lease, the term “Landlord”
means only the current owner of the fee title to the Shopping Center or the
leasehold estate under a ground lease of the Shopping Center at the time in
question. Each Landlord is obligated to perform the obligations of Landlord
under this Lease only during the time such Landlord owns such interest or
title. Any Landlord who transfers its title or interest in the Shopping Center
is relieved of all liabilities for the obligations of Landlord under this Lease
to be performed on or after the date of transfer.

37.12   Tenant’s Financial Condition.  Within ten (10) days after written
request from Landlord, Tenant shall deliver to Landlord such financial
statements as Landlord reasonably requires to verify the net worth of Tenant or
any guarantor of Tenant. In addition, Tenant shall deliver to any lender designated
by Landlord any financial statements required by such lender to facilitate the
financing or refinancing of the Shopping Center. Tenant represents and warrants
to Landlord that each such financial statement is a true and accurate statement
as of the date of such statement. All financial statements shall be
confidential and shall be used only for the purposes set forth in this Lease.

 17
 

38.      BROKERS.

38.1     Broker’s  Commission. Upon
execution and delivery of this Lease by Landlord and Tenant, Landlord shall pay
to Landlord’s Broker the commission set forth at Section 3.b hereof, if any, or
the commission provided for in the written agreement (the “Agreement”) between
Landlord and Landlord’s Broker covering brokerage services rendered in this
transaction. Landlord shall also pay Landlord’s Broker a further commission as
provided in the Agreement if Tenant exercises any option to extend the Term of
this Lease or to renew the Lease or to expand the Premises. If a Tenant’s
Broker is named at Section 3.b, Landlord’s Broker shall pay an appropriate
portion of its commission to Tenant’s Broker if Landlord’s Broker and Tenant’s
Broker have so agreed between them. Landlord shall have no obligation to pay a
commission or fee to anyone other than Landlord’s Broker in connection with
this Lease.

38.2     Protection of Brokers. If
Landlord sells its interest in the Premises or assigns Landlord’s interest in
this Lease, the buyer or assignee shall, by accepting such conveyance of the
Premises or assignment of the Lease, be conclusively deemed to have agreed to
make all payments to Landlord’s Broker thereafter required of Landlord under
this Article 38 or the Agreement. Landlord’s Broker shall have the right to
bring a legal action to enforce or declare rights under this Article 38. The
prevailing party in such action shall be entitled to reasonable attorneys’ fees
to be paid by the losing party. Such attorneys’ fees shall be fixed by the
court in such action. This Section is included in this Lease for the benefit of
Landlord’s Broker.

38.3     No Other Brokers. Tenant
represents and warrants to Landlord that the brokers named in Section 3.b of
this Lease are the only agents, brokers, finders or other parties with whom
Tenant has dealt who are or may be entitled to any commission or fee with
respect to this Lease.

39.      COMPLIANCE.

The parties hereto agree to comply with all applicable
federal, state and local laws, regulations, codes, ordinances and
administrative orders having jurisdiction over the parties, property or the
subject matter of this Agreement, including, but not limited to, the 1964 Civil
Rights Act and all amendments thereto, the Foreign Investment in Real Property
Tax Act, the Comprehensive Environmental Response Compensation and Liability
Act, and The Americans With Disabilities Act.

40.      RATIFICATION OF LEASE - SEE ADDENDUM

LANDLORD AND TENANT have signed this Lease on the dates set forth
below.

	
  Date: 

  	
  1/5/2000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  After Receipt of Approvals:

  
	
  Landlord: 

  	
  95, College Plaza, Ltd.

  	
   

  	
  Tenant: 1st Pacific Bank,

  
	
   

  	
   

  	
   

  	
   

  
	
  a California Limited Partnership

  	
   

  	
  a State Banking Organization

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Cal. Diego Builders, Inc.

  	
   

  	
  By:

  	
   

  
	
   

  	
  a California Corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Its: 

  	
  General Partner

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Harki Parekh

  	
   

  	
  Title:

  	
   

  
	
   

  	
  Harki Parekh

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  La Jolla Association

  
	
  Its:

  	
  President

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Print Name:

  	
   

  	
   

  	
  Print Name:

  	
  Rob Hildt

  
	
   

  	
   

  	
   

  	
  Rob Hildt

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
  Co-Manager

  
	
   

  	
   

  	
   

  	
   

  	
  /s/ Donald McVay

  
	
   

  	
   

  	
   

  	
   

  	
  Donald McVay

  
												

 

SEE YOUR ATTORNEY —
THIS LEASE IS TO BE GIVEN TO YOUR ATTORNEY FOR REVIEW AND APPROVAL BEFORE YOU
SIGN IT. BECAUSE EACH LEASE TRANSACTION IS UNIQUE, AND THE BUSINESS AND LEGAL
CONCERNS OF EACH PART ARE UNIQUE, CB COMMERCIAL CANNOT AND DOES NOT MAKE ANY
REPRESENTATION OR RECOMMENDATION CONCERNING THE LEGAL EFFECT, LEGAL
SUFFICIENCY, OR TAX CONSEQUENCES OF THIS LEASE. THESE ARE QUESTIONS FOR YOUR
ATTORNEY AND FINANCIAL ADVISORS.

IN ANY REAL ESTATE TRANSACTION IT IS RECOMMENDED THAT
YOU CONSULT WITH A PROFESSIONAL, SUCH AS A CIVIL ENGINEER, INDUSTRIAL HYGIENIST
OR OTHER PERSON WITH EXPERIENCE IN EVALUATING THE CONDITION OF THE PROPERTY,
INCLUDING THE POSSIBLE PRESENCE OF ASBESTOS, HAZARDOUS MATERIALS AND
UNDERGROUND STORAGE TANKS.

 18

ADDENDUM TO LEASE

ADDENDUM TO LEASE DATED NOVEMBER 1, 1999, BY AND
BETWEEN COLLEGE PLAZA, LTD., A CALIFORNIA LIMITED PARTNERSHIP (“LANDLORD”) AND 1ST PACIFIC
BANK, A STATE BANKING ORGANIZATION AND LA JOLLA ASSOCIATES (“TENANT”) FOR THE
PROPERTY LOCATED AT 3500 COLLEGE BOULEVARD, OCEANSIDE, CA.

3.                          DEFINITIONS:

1.                         Contingency:  This lease shall be contingent upon
Tenant’s receipt of all regulatory approvals to operate Tenant’s business in
the premises from any and all authorities from which approval may be necessary.
This contingency shall expire January 31, 2000. Tenant’s waiver of this
contingency on or before January 31, 2000 shall cause this lease to commence
and the obligations of Landlord and Tenant shall be binding. Tenant shall
deliver written notice of its waiver to landlord in writing on or before 5:00
PM, January 31, 2000. Failure to deliver timely written waiver of its
contingency shall be deemed non-waiver, and this lease shall be deemed to have
never commenced, and Landlord and Tenant shall have no obligation to the other.
This contingency for Tenant is solely for receipt of any and all regulatory
approvals. Upon receipt of same, Tenant shall immediately waive its contingency
and the term shall commence. Nothing herein shall prevent Tenant from waiving
this contingency regardless of whether all regulatory approvals have been
obtained by January 31, 2000.

NON-REFUNDABLE DEPOSIT:

In consideration for Landlord not entering into any
binding lease with any other tenant during Tenant’s contingency period, Tenant
shall pay to Landlord ten thousand dollars ($10,000) upon execution of this
lease. Said deposit shall be non-refundable to Tenant. In the event Tenant
fails to timely waive its contingency, the deposit shall be forfeited by Tenant
and retained by Landlord as its sole compensation for not having previously
entering into a lease with any other tenant. In the event Tenant timely waives
its contingency, its deposit shall apply to rent as it becomes due.

OPTION TO EXTEND:

Provided Tenant is not in default and is in possession
of the premises, Tenant shall have the option to extend the term of this lease
for one additional five (5) year period. Tenant shall exercise this option by
providing Landlord not less than one hundred eighty (180) days prior written notice.
Rent during the option period shall be established based on comparable
free-standing building within the market. Rent during the option period shall
adjust annually as set forth in the primary term based upon re-established
market rent. In no event shall minimum rent be decreased below the last year of
the Lease Term as a result of the exercise of option.

22.4              LANDLORD’S RIGHT OF ENTRY (continued):

To the greatest extent practicable, whenever Landlord
desires to enter the Premises for the purposes described in this paragraph,
Landlord shall contact Tenant prior to such entry and coordinate Tenant
providing Landlord such access at mutually agreeable times so as to minimize
interference with Tenant’s business.

23.3              RECONSTRUCTION RESPONSIBILITIES (continued):

To the extent necessary to put the Premises in the
condition existing at the commencement of the Term of this Lease so that Tenant’s
Work may be commenced and completed.

24.1              TAKINGS RESULTING IN TERMINATION
(continued):

If 25% or more of the Floor Area of the Premises or of
the Floor Area of the Shopping Center or of the Common Area is taken under
power of eminent domain by any person, and such taking results in the
substantial dinimution of the use of the Premises by Tenant for the purposes
leased under this Lease, then Tenant may terminate this Lease upon giving
Landlord 30 days notice of termination of this Lease within 30 days of receipt
by Tenant of notice from Landlord of any such taking.

31.2              GRAND OPENING PROMOTIONAL FUND (continued):

Said contribution by Tenant shall be in connection
with the renovation of the center to include not less than 20,000 square feet
of new Tenant’s. In the event Tenant is prohibited from participating by
banking regulators, it shall not be required to do so.

40.                  RATIFICATION
OF LEASE (continued):

As 1st Pacific Bank is,
as of the date first written above, an entity that does not yet have the
requisite approvals to transact business in its name, this sublease is being
executed by La Jolla Association, its precursor entity, on behalf of 1st Pacific Bank. La Jolla
Association and 1st Pacific Bank hereby agree that lst Pacific Bank will execute the Lease in
the space provided below once it receives such approvals. La Jolla Association
hereby agrees that it will indemnify Landlord for any and all damages, costs or
expenses incurred by Landlord in the event that 1st Pacific Bank fails to so execute this Lease
after the receipt of such approvals.

	
   

  	
   

  	
   

  	
   

  
	
  Landlord

  	
  Tenant

  

 

EXHIBIT “A”

	
   

  	
   

  	
   

  	
   

  
	
  Landlord

  	
  Tenant

  

EXHIBIT “F”

LANDLORD’S NOTICE OF
LEASE TERM DATES

A.       Date of Tenant’s waiver
of contingency: ______________________________________________________

B.        Date of Lease
Commencement (next day following “A” above):      ___________________________________

C.        Date of Commencement of
Minimum Rent: March 1, 2000

D.        Date of Annual Minimum
Rent increase (one year following “A” above): ____________________________

E.        Date of Expiration of
Lease Term (5 years following “A” above): __________________________________

F.        Date of Notice of
Exercise of Option (54 months following “A” above):
_____________________________

	
   

  	
   

  	
   

  	
   

  
	
  Landlord

  	
  Tenant

  

 

EXHIBIT
C

LANDLORD’S
WORK AND TENANT’S WORK

The Premises shall be
delivered in its “as is, where is, with all faults” condition. Landlord is not
obligated to make any repairs or contribution to the Building. All work to be
dome in the Premises shall be completed by Tenant. In the event Tenant’s
improvements require Landlord’s consent as set forth in Article 16, Tenant
shall submit its plans to Landlord for consent of Landlord, which consent shall
not be unreasonably withheld. Tenant may install such business signage as may
be permitted by local ordinances and building codes, subject to obtaining such
permits and other governmental approvals as may be required and further subject
to Landlord’s consent, which shall not be unreasonably withheld.

CB RICHARD ELLIS, INC. SALE/LEASE DISCLOSURES

Property: 3500 College Blvd., Oceanside, CA

Flood Zones.
According to Federal Emergency Management Agency. (Fidelity National Flood
Map No. Map #6073C-766F dated 6/19/97)  [specify
source], the Property o is / x
may or may not be located in an A or V flood zone and/or a dam inundation zone
(Government Code Section 8589.5). Many lenders require flood insurance for
properties located in flood zones, and government authorities may regulate
development and construction in flood zones. Whether or not located in a flood
zone, properties can be subject to flooding and moisture problems, especially
properties on a slope or in low-lying areas. Buyers and tenants should have
their experts confirm whether the Property is in a flood zone and otherwise
investigate and evaluate these matters. Flood Zone Designation: Zone X

Earthquakes.
Earthquakes occur throughout California. According to Alquist-Priolo
Earthquake Fault Zoning Act Fault-Rupture Hazard Zones in Calfornia
(Publication 42, revised 1994)  [specify
source], the Property o
is / x may or may not be situated in an Earthquake
Fault Zone and/or a Seismic Hazard Zone (Sections 2621 et seq. and Sections
2690 et seq. of the Public Resources Code, respectively). Property development
and construction in such zones generally are subject to the findings of a
geologic report prepared by a state-registered geologist. Whether or not
located in such a zone, all properties in California are subject to earthquake
risks and may be subject to a variety of state and local earthquake-related
requirements, including retrofit requirements. Among other items, all new and
existing water heaters must be braced, anchored or strapped to resist falling
or horizontal displacement, and in sales transactions, sellers must execute a
written certification that the water heaters are so braced, anchored or
strapped (Health and Safety Code Section 19211). If this is the sale of an
unreinforced masonry building or a precast or reinforced masonry building with
wood frame floors or roofs built before 1975, the buyer must be given a copy of
The Commercial Property Owner’s Guide to Earthquake Safety (Government Code
Sections 8875.6 and 8893.2). Buyers and tenants should have their experts
confirm whether the Property is in any earthquake zone and otherwise
investigate and evaluate these matters.

Hazardous Materials and Underground
Storage Tanks. Due to prior or current uses of the
Property or in the area or the construction materials used, the Property may
have hazardous or undesirable metals (including lead-based paint), minerals
(including asbestos), chemicals, hydrocarbons, petroleum-related compounds, or
biological or radioactive/emissive items (including electrical and magnetic
fields) in soils, water, building components, above or below-ground
tanks/containers or elsewhere in areas that may or may not be accessible or
noticeable. Such Items may leak or otherwise be released. Asbestos has been
used in items such as fireproofing, heating/cooling systems, insulation,
spray-on and tile acoustical materials, floor tiles and coverings, roofing,
drywall and plaster. If the Property was built before 1978 and has a
residential unit, sellers/landlords must disclose all reports, surveys and
other information known to them regarding lead-based paint to buyers and
tenants and allow for inspections (42 United States Code Sections 4851 et
seq.). Sellers/landlords are required to advise buyers/tenants if they have any
reasonable cause to believe that any hazardous substance has come to be located
on or beneath the Property (Health and Safety Code Section 25359.7), and sellers/landlords
must disclose reports and surveys regarding asbestos to certain persons,
including their employees, contractors, buyers and tenants (Health and Safety
Code Sections 25915 et seq.); buyers/tenants have similar obligations. Have
your experts investigate and evaluate these matters.

Americans with Disabilities Act (ADA).
The Americans With Disabilities Act (42 United States Code Sections 12101 et
seq.) and other federal, state and local requirements may require changes to
the Property. Have your experts investigate and evaluate these matters.

Taxes. Sales,
leases and other real estate transactions can have federal, state and local tax
consequences. In sales transactions, Internal Revenue Code Section 1446
requires buyers to withhold and pay to the IRS 10% of the gross sales price
within 10 days of the date of a sale unless the buyers can establish that the
sellers are not foreigners, generally by having the sellers sign a Non-Foreign
Seller Affidavit. Depending on the structure of the transaction, the tax
withholding liability can exceed the net cash proceeds to be paid to the
sellers at closing. California imposes an additional withholding requirement
equal to 3 1/3% of the gross sales price not only on foreign sellers but also
out-of-state sellers and sellers leaving the state if the sales price exceeds
$100,000. Withholding generally is required if the last known address of a
seller is outside California, if the proceeds are disbursed outside of
California or if a financial intermediary is used. Have your experts
investigate and evaluate these mattes.

Fires.
California Public Resources Codes Sections 4125 et seq. require sellers of real
property located within state responsibility areas to advise buyers that the
property is located within such a wildland zone, that the state does not have
the responsibility to provide fire protection services to any structure within
such a zone and that such zones may contain substantial forest/wildland fire
risks. Government Code Sections 51178 et seq. require sellers of real property
located within certain fire hazard zones to disclose that the property is
located in such a zone. Sellers must disclose that a property located in a
wildland or fire hazard zone is subject to the fire prevention requirements of
Public Resources Code Section 4291 and Government Code Section 51182,
respectively. Sellers must make such disclosures if either the sellers have
actual knowledge that a property is in such a zone or a map showing the
property to be in such a zone has been provided to the county assessor.
Properties, whether or not located in such a zone, are subject to fire/life
safety risks and may be subject to state and local fire/life safety-related
requirements, including retrofit requirements. Have your experts investigate
and evaluate these matters.

Broker Representation.
CB Richard Ellis, inc. is a national brokerage firm representing a variety of
clients. Depending on the circumstances, CB Richard Ellis, Inc. may represent
both the seller/landlord and the buyer/tenant in a transaction, or you may be
interested in a property that may be of interest to other CB Richard Ellis, Inc.
clients. If CB Richard Ellis, Inc. represents more than one party with respect
to a property, CB Richard Ellis, Inc. will not disclose the confidential
information of one principal to the other.

Seller/Landlord Disclosure, Delivery
of Reports, Pest Control Reports and Compliance with Laws.
Sellers/landlords are hereby requested to disclose directly to buyers/tenants
all information known to sellers/landlords regarding the Property, including
but not limited to, hazardous materials, zoning, construction, design,
engineering, soils, title; survey, fire/life safety, and other matters, and to
provide buyers/tenants with copies of all reports in the possession of or
accessible to sellers/landlords regarding the Property. Sellers/landlords and
buyers/tenants must comply with all applicable federal, state and local laws,
regulations, codes, ordinances and administrative orders, including, but not
limited to, the 1964 Civil Rights Act and all amendments thereto, the Foreign Investment
in Real Property Tax Act, the Comprehensive Environmental Response Compensation
and Liability Act, and The Americans With Disabilities Act. If a pest control
report is a condition of the purchase contract, buyers are entitled to receive
a copy of the report and any certification and notice of work completed.

Property Inspections and Evaluations.
Buyers/tenants should have the Property thoroughly inspected and all parties
should have the transaction thoroughly evaluated by the experts of their
choice. Ask your experts what investigations and evaluations may be appropriate
as well as the risks of not performing any such investigations or evaluations.
Information regarding the Property supplied by the real estate brokers has been
received from third party sources and has not been independently verified by
the brokers. Have your experts verify all information regarding the Property,
including any linear or area measurements and the availability of all
utilities. All work should be inspected and evaluated by your experts, as they
deem appropriate. Any projections or estimates are for example only, are based
on assumptions that may not occur and do not represent the current or future performance
of the property. Real estate brokers are not experts concerning nor can they
determine if any expert is qualified to provide advice on legal, tax, design,
ADA, engineering, construction, zoning building code, soils, title, survey,
fire/life safety, insurance, hazardous materials, or other such matters. Such
areas require specia education and, generally, special licenses not possessed
by real estate brokers. Consult with the experts of your choice regarding these
matters.

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