Document:

Exhibit 10.2

 

STANDARD MULTI-TENANT OFFICE LEASE - GROSS

AIR
COMMERCIAL REAL ESTATE ASSOCIATION

 

1.                                       Basic Provisions (“Basic
Provisions”).

1.1                                 Parties: This Lease (“Lease”), dated for reference purposes only February 27,
2006, is made by and between Scriba Enterprises, Inc., a California
corporation (“Lessor”) and 1st Century Bank, National Association (“Lessee”), (collectively
the “Parties”, or individually a “Party”).

1.2(a)                   Premises: That certain portion of the Project (as
defined below), known as Suite Numbers(s) 225, second (2nd) floor(s), consisting of approximately 3,111 rentable square feet (“Premises”). The Premises are located at: 1025 West 190th Street, in the City of Los Angeles (Gardena Post Office), County of Los Angeles, State of California, with zip code 90248. In addition to Lessee’s rights to use and
occupy the Premises as hereinafter specified, Lessee shall have non-exclusive
rights to the Common Areas (as defined in Paragraph 2.7 below) as hereinafter
specified, but shall not have any rights to the roof, the exterior walls, the
area above the dropped ceilings, or the utility raceways of the building
containing the Premises (“Building”)
or to any other buildings in the Project. The Premises, the Building, the
Common Areas, the land upon which they are located, along with all other
buildings and improvements thereon, are herein collectively referred to as the “Project.” The Project consists of
approximately 68,326 rentable square feet. (See also Paragraph 2)

1.2(b)                  Parking: eleven
(11) unreserved and zero (0) reserved vehicle parking spaces for Lessee and Lessee’s visitors at a monthly cost of $0.00 (free) per unreserved. (See Paragraph 2.6) All “Project” parking is surface parking in common with all the Lessees
in the building and is accessible twenty-four (24) hours per day, seven (7) days
per week. (See Addendum Paragraph 52.)

1.3                                 Term: Five (5) years and zero (0) months (“Original Term”)
commencing April 1, 2006 (“Commencement
Date”) and ending March 31,
2011 (“Expiration Date”). (See also Paragraph 3)

1.4                                 Early Possession: March 15,
2006 (“Early Possession Date”). (See also Paragraphs 3.2 and 3.3)

1.5                                 Base Rent: $5,755.00 per month (“Base Rent)”, payable on the first (1st) day of each month commencing on the commencement date.
(See also Paragraph 4)

o If this box is checked, there are provisions
in this Lease for the Base Rent to be adjusted.

1.6                                 Lessee’s Share of Operating
Expense Increase: Four and fifty-five hundredths percent (4.55%) (“Lessee’s Share”). Lessee’s Share has been
calculated by dividing the approximate rentable square footage of the Premises
by the total approximate square footage of the rentable space contained in the
Project and shall not be subject to revision except in connection with an
actual change in the size of the Premises or a change in the space available
for lease in the Project.

1.7                                 Base Rent and Other Monies
Paid Upon Execution:

(a)                                  Base Rent: $5,755.00 for the period April 1, 2006 - April 30, 2006.

(b)                                 Security Deposit: $6,377.00 (“Security Deposit”). (See also Paragraph 5)

(c)                                  Parking: $0.00 for the period initial sixty (60) month Lease term.

(d)                                 Other: $0.00 for NA.

(e)                                  Total Due Upon Execution of
this Lease: $12,132.00.

1.8                                 Agreed Use: General
office use and operation of a bank, including services associated with banking,
such as but not limited to transactions with customers. (See also Paragraph 6)

1.9                                 Base Year; Insuring Party. The Base Year is 2006 (01-01-06 to 12-31-06). Lessor is the “Insuring Party”. (See also Paragraphs 4.2 and 8)

1.10                           Real Estate Brokers: (See also Paragraph 15)

(a)     Representation: The following real estate brokers ( the “Brokers”) and brokerage relationships exist
in this transaction (check applicable boxes):

o NAI Capital, Inc. represents
Lessor exclusively (“Lessor’s Broker”);

o Trammell Crow Company represents
Lessee exclusively (“Lessee’s Broker”);
or

o represents both Lessor and Lessee (“Dual
Agency”).

(b)    Payment to Brokers: Upon execution and delivery of this Lease by
both Parties, Lessor shall pay to the Brokers the brokerage fee agreed to in a
separate written agreement - the Standard Owner-Agency Agreement for Sale or Lease of
Real Property dated April 11, 2005 by and between Scriba Enterprises, Inc.
and NAI Capital, Inc.

1.12                           Business Hours for the
Building: 7:30 a.m. to 6:00 p.m., Mondays
through Fridays (except Building Holidays) “Building
Holidays” shall mean the dates of observation of New

 

	
   

  	
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Year’s Day, President’s Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day, and
any other nationally recognized
holiday. Building and Elevator hours
are subject to change at the Lessor’s discretion. Lessee shall have access to
the building twenty-four (24) hours per day, seven (7) days per week via
card key. Card key access is available to Lessee before and after building
standard hours. Only Lessees located on the upper floors will have after hours
access via their building access card key and only to the specific floor where
the Lessee’s suite is located.

1.13                           Lessor Supplied Services. Notwithstanding the provisions of Paragraph
11.1, Lessor is NOT obligated to provide the following:

o Janitorial
services

o Electricity

o Other
(specify):

1.14                           Attachments. Attached hereto are the following, all of which
constitute a part of this Lease:

x an
Addendum consisting of Paragraphs 51
through 63;

o  a plot
plan depicting the Premises;

x a current set of the Rules and
Regulations;

x a Work Letter;

o  a
janitorial schedule;

x other (specify): a floor plan for suite 225.

2.                                       Premises.

2.1                                 Letting. Lessor hereby leases to Lessee, and Lessee
hereby leases from Lessor, the Premises, for the term, at the rental, and upon
all of the terms, covenants and conditions set forth in this Lease. Unless
otherwise provided herein, any statement of size set forth in this Lease, or that
may have been used in calculating Rent, is an approximation which the Parties
agree is reasonable and any payments based thereon are not subject to revision
whether or not the actual size is more or less. Note: Lessee is advised to verify the actual size prior to executing this
Lease.

2.2                                 Condition. Lessor shall deliver the Premises to Lessee
in a clean condition on the Commencement Date or the Early Possession Date,
whichever first occurs (“Start Date”),
and warrants that the existing electrical, plumbing, fire sprinkler, lighting,
heating, ventilating and air conditioning systems (“HVAC”), and all other items which the Lessor is obligated to
construct pursuant to the Work Letter attached hereto, if any, other than those
constructed by Lessee, shall be in good operating condition on said date, that
the structural elements of the roof, bearing walls and foundation of the Unit
shall be free of material defects, and that the Premises do not contain hazardous
levels of any mold or fungi defined as toxic under applicable state or federal
law.

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

(a) Subject
to Paragraph 2.3(c) below, if such Capital Expenditures are required as a
result of the specific and unique use of the Premises by Lessee as compared
with uses by tenants in general, Lessee shall be fully responsible for the cost
thereof, provided, however that if such Capital Expenditure is required during
the last 2 years of this Lease and the cost thereof exceeds 6 months’ Base
Rent, Lessee may instead terminate this Lease unless Lessor notifies Lessee, in
writing, within 10 days after receipt of Lessee’s termination notice that
Lessor has elected to pay the difference between the actual cost thereof and
the amount equal to 6 months’ Base Rent. If Lessee elects termination, Lessee
shall immediately cease the use of the Premises which requires such Capital
Expenditure and deliver to Lessor written notice specifying a termination date
at least 90 days thereafter. Such termination date shall, however, in no event
be earlier than the last day that Lessee could legally utilize the Premises
without commencing such Capital Expenditure.

(b) If
such Capital Expenditure is not the result of the specific and unique use of
the Premises by Lessee (such as, governmentally mandated seismic
modifications), then Lessor and Lessee shall allocate the cost of such Capital
Expenditure as follows: Lessor shall advance the funds necessary for such
Capital Expenditure but Lessee shall be obligated to pay, each month during the
remainder of the term of this Lease, on the date on which Base Rent is due, an
amount equal to the product of multiplying Lessee’s share of the cost of such
Capital Expenditure (the percentage specified in Paragraph 1.6 by a fraction,
the numerator of which is one, and the denominator of which is 144 (ie. 1/144th
of the cost per month). Lessee shall pay interest on the unamortized balance of
Lessee’s share at a rate that is commercially reasonable in the judgment of
Lessor’s accountants. Lessee may, however, prepay its obligation at any time.
Provided, however, that if such Capital Expenditure is required during the last
2 years of this Lease or if Lessor reasonably determines that it is not
economically feasible to pay its share thereof, Lessor shall have the option to
terminate this Lease upon 90 days prior written notice to Lessee unless Lessee
notifies Lessor, in writing, within 10 days after receipt of Lessor’s
termination notice that Lessee will pay for such Capital Expenditure. If Lessor
does not elect to terminate, and fails to tender its share of any such Capital
Expenditure, Lessee may advance such funds and deduct same, with Interest, from
Rent until Lessor’s share of such costs have been fully paid. If Lessee is
unable to finance Lessor’s share, or if the balance of the Rent due and payable
for the remainder of this Lease is not sufficient to fully reimburse Lessee on
an offset basis, Lessee shall have the right to terminate this Lease upon 30
days written notice to Lessor. 

(c) Notwithstanding
the above, the provisions concerning Capital Expenditures are intended to apply
only to nonvoluntary, unexpected, and new Applicable Requirements. If the
Capital Expenditures are instead triggered by Lessee as a result of an actual
or proposed change in use, change in intensity of use, or modification to the
Premises then, and in that event, Lessee shall either: (i) immediately
cease such changed use or intensity of use and/or take such other steps as may
be necessary to eliminate the requirement for such Capital Expenditure, or (ii) complete
such Capital Expenditure at its own expense. Lessee shall not have any right to
terminate this Lease.

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

occupy the Premises, and (ii) it
is Lessor’s sole responsibility to investigate the financial capability and/or
suitability of all proposed tenants.

2.5                                 Lessee as Prior
Owner/Occupant. The warranties
made by Lessor in Paragraph 2 shall be of no force or effect if immediately prior
to the Start Date, Lessee was the owner or occupant of the Premises. In such
event, Lessee shall be responsible for any necessary corrective work.

2.6                                 Vehicle Parking. So long as Lessee is not in default, and
subject to the Rules and Regulations attached hereto, and as established by
Lessor from time to time, Lessee shall be entitled to rent and use the number
of parking spaces specified in Paragraph 1.2(b) at the rental rate applicable
from time to time for monthly parking as set by Lessor and/or its licensee.

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

(b) With the exception of the
initial Lease term, the  monthly rent per parking space specified in
Paragraph 1.2(b) is subject to change upon 30 days prior written notice to
Lessee. The rent for the parking is payable one month in advance prior to the
first day of each calendar month.

2.7                                 Common Areas - Definition. The term “Common
Areas” is defined as all areas and facilities outside the Premises
and within the exterior boundary line of the Project and interior utility
raceways and installations within the Premises that are provided and designated
by the Lessor

 

	
   

  	
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from time to time for the
general nonexclusive use of Lessor, Lessee and other tenants of the Project and
their respective employees, suppliers, shippers, customers, contractors and
invitees, including, but not limited to, common entrances, lobbies, corridors,
stairwells, public restrooms, elevators, parking areas, loading and unloading
areas, trash areas, roadways, walkways, driveways and landscaped areas.

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

2.9                                 Common Areas - Rules and
Regulations. Lessor or such
other person(s) as Lessor may appoint shall have the exclusive control and
management of the Common Areas and shall have the right, from time to time, to
adopt, modify, amend and enforce reasonable rules and regulations (“Rules and Regulations”) for the
management, safety, care, and cleanliness of the grounds, the parking and
unloading of vehicles and the preservation of good order, as well as for the
convenience of other occupants or tenants of the Building and the Project and
their invitees. The Lessee agrees to abide by and conform to all such Rules and
Regulations, and shall use its best efforts to cause its employees, suppliers,
shippers, customers, contractors and invitees to so abide and conform. Lessor
shall not be responsible to Lessee for the noncompliance with said Rules and
Regulations by other tenants of the Project.

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

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

(b)                                 To close temporarily any of the Common Areas
for maintenance purposes so long as reasonable access to the Premises remains
available;

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

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

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

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

3.                                       Term.

3.1                                 Term. The Commencement Date, Expiration Date and
Original Term of this Lease are as specified in Paragraph 1.3.

3.2                                 Early Possession. If Lessee totally or partially occupies the
Premises prior to the Commencement Date, the obligation to pay Base Rent shall
be abated for the period of such early possession. All other terms of this
Lease (including but not limited to the obligations to pay Lessee’s Share of
the Operating Expense Increase) shall be in effect during such period. Any such
early possession shall not affect the Expiration Date. The early possession period
shall not exceed fifteen (15) calendar days.

3.3                                 Delay In Possession. Lessor agrees to use its best commercially
reasonable efforts to deliver possession of the Premises to Lessee by the
Commencement Date. If, despite said efforts, Lessor is unable to deliver
possession by such date, Lessor shall not be subject to any liability therefor,
nor shall such failure affect the validity of this Lease. Lessee shall not,
however, be obligated to pay Rent or perform its other obligations until Lessor
delivers possession of the Premises and any period of rent abatement that
Lessee would otherwise have enjoyed shall run from the date of delivery of
possession and continue for a period equal to what Lessee would otherwise have
enjoyed under the terms hereof, but minus any days of delay caused by the acts
or omissions of Lessee. If possession is not delivered within 60 days after the
Commencement Date, as the same may be extended under the terms of any Work
Letter executed by Parties, Lessee may, at its option, by notice in writing
within 10 days after the end of such 60 day period, cancel this Lease, in which
event the Parties shall be discharged from all obligations hereunder. If such
written notice is not received by Lessor within said 10 day period, Lessee’s
right to cancel shall terminate. If possession of the Premises is not delivered
within 120 days after the Commencement Date, this Lease shall terminate unless
other agreements are reached between Lessor and Lessee, in writing.

3.4                                 Lessee Compliance. Lessor shall not be required to deliver
possession of the Premises to Lessee until Lessee complies with its obligation
to provide evidence of insurance (Paragraph 8.5). Pending delivery of such
evidence, Lessee shall be required to perform all of its obligations under this
Lease from and after the Start Date, including the payment of Rent,
notwithstanding Lessor’s election to withhold possession pending receipt of
such evidence of insurance. Further, if Lessee is required to perform any other
conditions prior to or concurrent with the Start Date, the Start Date shall
occur but Lessor may elect to withhold possession until such conditions are
satisfied.

4.                                       Rent.

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

4.2                                 Operating Expense Increase. Lessee shall pay to Lessor during the term
hereof, in addition to the Base Rent, Lessee’s Share of the amount by which all
Operating Expenses for each Comparison Year exceeds the amount of all Operating
Expenses for the Base Year, such excess being hereinafter referred to as the “Operating Expense Increase”, in accordance
with the following provisions:

(a)                                  “Base Year”
is as specified in Paragraph 1.9.

(b)                                 “Comparison
Year” is defined as each calendar year during the term of this Lease
subsequent to the Base Year; provided, however, Lessee shall have no obligation
to pay a share of the Operating Expense Increase applicable to the first 12
months of the Lease Term (other than such as are mandated by a governmental
authority, as to which government mandated expenses Lessee shall pay Lessee’s
Share, notwithstanding they occur during the first twelve (12) months). Lessee’s
Share of the Operating Expense Increase for the first and last Comparison Years
of the Lease Term shall be prorated according to that portion of such
Comparison Year as to which Lessee is responsible for a share of such increase.

(c)                                  “Operating
Expenses” include all costs incurred by Lessor relating to the
ownership and operation of the Project, calculated as if the Project was at
least 95% occupied, including, but not limited to, the following:

(i)                                     The operation, repair, and maintenance in
neat, clean, safe, good order and condition, but not the replacement (see
subparagraph (g)), of the following:

(aa)                            The Common Areas, including their surfaces,
coverings, decorative items, carpets, drapes and window coverings, and
including parking areas, loading and unloading areas, trash areas, roadways,
sidewalks, walkways, stairways, parkways, driveways, landscaped areas,
striping, bumpers, irrigation systems, Common Area lighting facilities, building
exteriors and roofs, fences and gates;

(bb)                          All heating, air conditioning, plumbing,
electrical systems, life safety equipment,

communication systems and
other equipment used in common by, or for the benefit of, lessees or occupants
of the Project, including elevators and escalators, tenant directories, fire
detection systems including sprinkler system maintenance and repair.

(ii)                               Trash disposal, janitorial and security
services, pest control services, and the costs of any environmental inspections;

(iii)                            Any other service to be provided by Lessor
that is elsewhere in this Lease stated to be an “Operating Expense”;

(iv)                            The cost of the premiums for the insurance
policies maintained by Lessor pursuant to paragraph 8 and any deductible
portion of an insured loss concerning the Building or the Common Areas;

(v)                               The amount of the Real Property Taxes payable
by Lessor pursuant to paragraph 10;

(vi)                           The cost of water, sewer, gas, electricity,
and other publicly mandated services not separately metered;

(vii)                        Labor, salaries, and applicable fringe
benefits and costs, materials, supplies and tools, used in maintaining and/or
cleaning the Project and accounting and management fees attributable to the
operation of the Project;

(viii)                     The cost of any capital improvement to the
Building or the Project not covered under the provisions of Paragraph 2.3
provided; however, that Lessor shall allocate the cost of any such capital
improvement over a 12 year period and Lessee shall not be required to pay more
than Lessee’s Share of 1/144th of the cost of such Capital Expenditure in any
given month;

(ix)                             Replacement of equipment or improvements that
have a useful life for accounting purposes of 5 years or less.

(d)                                 Any item of Operating Expense that is
specifically attributable to the Premises, the Building or to any other
building in the Project or to the operation, repair and maintenance thereof,
shall be allocated entirely to such Premises, Building, or other building.
However, any such item that is not specifically attributable to the Building or
to any other building or to the operation, repair and maintenance thereof,
shall be equitably allocated by Lessor to all buildings in the Project.

(e)                                  The inclusion of the improvements, facilities
and services set forth in Subparagraph 4.2(c) shall not be deemed to
impose an obligation upon Lessor to either have said improvements or facilities
or to provide those services unless the Project already has the same, Lessor already
provides the services, or Lessor has agreed elsewhere in this Lease to provide
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(f)                                    Lessee’s Share of Operating Expense Increase
is payable monthly on the same day as the Base Rent is due hereunder. The
amount of such payments shall be based on Lessor’s estimate of the Operating
Expense Expenses. Within 60 days after written request (but not more than once
each year) Lessor shall deliver to Lessee a reasonably detailed statement
showing Lessee’s Share of the actual Common Area Operating Expenses incurred
during the preceding year.a reasonably detailed statement showing Lessee’s
Share of the actual Operating Expense Increase incurred during such year. If
Lessee’s payments during such Year exceed Lessee’s Share, Lessee shall credit
the amount of such over-payment against Lessee’s future payments. If Lessee’s
payments during such Year were less than Lessee’s Share, Lessee shall pay to
Lessor the amount of the deficiency within 10 days after delivery by Lessor to
Lessee of said statement. Lessor and Lessee shall forthwith adjust between them
by cash payment any balance determined to exist with respect to that portion of
the last Comparison Year for which Lessee is responsible as to Operating Expense
Increases, notwithstanding that the Lease term may have terminated before the
end of such Comparison Year.

(g)                                 Operating Expenses shall not include the costs
of replacement for equipment or capital components such as the roof, foundations,
exterior walls or a Common Area capital improvement, such as the parking lot
paving, elevators, fences that have a useful life for accounting purposes of 5
years or more unless it is of the type described in paragraph 4.2(c) (viii),
in which case their cost shall be included as above provided.

(h)                                 Operating Expenses shall not include any
expenses paid by any tenant directly to third parties, or as to which Lessor is
otherwise reimbursed by any third party, other tenant, or by insurance
proceeds.

4.3                                 Payment. Lessee shall cause payment of Rent to be
received by Lessor in lawful money of the United States on or before the day on
which it is due, without offset or deduction (except as specifically permitted
in this Lease). All monetary amounts shall be rounded to the nearest whole
dollar. In the event that any invoice prepared by Lessor is inaccurate such
inaccuracy shall not constitute a waiver and Lessee shall be obligated to pay
the amount set forth in this Lease. Rent for any period during the term hereof
which is for less than one full calendar month shall be prorated based upon the
actual number of days of said month. Payment of Rent shall be made to Lessor at
its address stated herein or to such other persons or place as Lessor may from
time to time designate in writing. Acceptance of a payment which is less than
the amount then due shall not be a waiver of Lessor’s rights to the balance of
such Rent, regardless of Lessor’s endorsement of any check so stating. In the
event that any check, draft, or other instrument of payment given by Lessee to
Lessor is dishonored for any reason, Lessee agrees to pay to Lessor the sum of
$25 in addition to any Late Charge and Lessor, at its option, may require all
future Rent be paid by cashier’s check. Payments will be applied first to
accrued late charges and attorney’s fees, second to accrued interest, then to
Base Rent and Common Area Operating Expenses, and any remaining amount to any
other outstanding charges or costs.

5.                                       Security Deposit. Lessee shall deposit with Lessor upon
execution hereof the Security Deposit as security for Lessee’s faithful
performance of its obligations under this Lease. If Lessee fails to pay Rent,
or otherwise Defaults under this Lease, Lessor may use, apply or retain all or
any portion of said Security Deposit for the payment of any amount due Lessor
or to reimburse or compensate Lessor for any liability, expense, loss or damage
which Lessor may suffer or incur by reason thereof. If Lessor uses or applies
all or any portion of the Security Deposit, Lessee shall within 10 days after written
request therefor, deposit monies with Lessor sufficient to restore said
Security Deposit to the full amount required by this Lease. If the Base Rent increases
during the term of this Lease, Lessee shall, upon written request from Lessor,
deposit additional moneys with Lessor so that the total amount of the Security
Deposit shall at all times bear the same proportion to the increased Base Rent
as the initial Security Deposit bore to the initial Base Rent. Should the
Agreed Use be amended to accommodate a material change in the business of
Lessee or to accommodate a sublessee or assignee, Lessor shall have the right
to increase the Security Deposit to the extent necessary, in Lessor’s
reasonable judgment, to account for any increased wear and tear that the Premises
may suffer as a result thereof. If a change in control of Lessee occurs during
this Lease and following such change the financial condition of Lessee is, in
Lessor’s reasonable judgment, significantly reduced, Lessee shall deposit such
additional monies with Lessor as shall be sufficient to cause the Security
Deposit to be at a commercially reasonable level based on such change in
financial condition. Lessor shall not be required to keep the Security Deposit
separate from its general accounts. Within 14 days after the expiration or
termination of this Lease, if Lessor elects to apply the Security Deposit only
to unpaid Rent, and otherwise within 30 days after the Premises have been
vacated pursuant to Paragraph 7.4(c) below, Lessor shall return that portion of
the Security Deposit not used or applied by Lessor. No part of the Security
Deposit shall be considered to be held in trust, to bear interest or to be
prepayment for any monies to be paid by Lessee under this Lease.

6.                                       Use.

6.1                                 Use. Lessee shall use and occupy the Premises
only for the Agreed Use, or any other legal use which is reasonably comparable thereto,
and for no other purpose. Lessee shall not use or permit the use of the
Premises in a manner that is unlawful, creates damage, waste or a nuisance, or
that disturbs occupants of or causes damage to neighboring premises or
properties. Other than guide, signal and seeing eye dogs, Lessee shall not keep
or allow in the Premises any pets, animals, birds, fish, or reptiles. Lessor
shall not unreasonably withhold or delay its consent to any written request for
a modification of the Agreed Use, so long as the same will not impair the
structural integrity of the improvements of the Building, will not adversely
affect the mechanical, electrical, HVAC, and other systems of the Building,
and/or will not affect the exterior appearance of the Building. If Lessor
elects to withhold consent, Lessor shall within 7 days after such request give
written notification of same, which notice shall include an explanation of
Lessor’s objections to the change in the Agreed Use.

6.2                                 Hazardous Substances.

(a) Reportable Uses Require Consent. The term “Hazardous Substance” as used in this Lease
shall mean any product, substance, or waste whose presence, use, manufacture,
disposal, transportation, or release, either by itself or in combination with
other materials expected to be on the Premises, is either: (i) potentially
injurious to the public health, safety or welfare, the environment or the
Premises, (ii) regulated or monitored by any governmental authority, or (iii) a
basis for potential liability of Lessor to any governmental agency or third
party under any applicable statute or common law theory. Hazardous Substances
shall include, but not be limited to, hydrocarbons, petroleum, gasoline, and/or
crude oil or any products, byproducts or fractions thereof. Lessee shall not
engage in any activity in or on the Premises which constitutes a Reportable Use
of Hazardous Substances without the express prior written consent of Lessor and
timely compliance (at Lessee’s expense) with all Applicable Requirements. “Reportable Use” shall mean (i) the
installation or use of any above or below ground storage tank, (ii) the
generation, possession, storage, use, transportation, or disposal of a
Hazardous Substance that requires a permit from, or with respect to which a
report, notice, registration or business plan is required to be filed with, any
governmental authority, and/or (iii) the presence at the Premises of a
Hazardous Substance with respect to which any Applicable Requirements requires
that a notice be given to persons entering or occupying the Premises or
neighboring properties. Notwithstanding the foregoing, Lessee may use any
ordinary and customary materials reasonably required to be used in the normal
course of the Agreed Use such as ordinary office supplies (copier toner, liquid
paper, glue, etc.) and common household cleaning materials, so long as such use
is in compliance with all Applicable Requirements, is not a Reportable Use, and
does not expose the Premises or neighboring property to any meaningful risk of
contamination or damage or expose Lessor to any liability therefor. In
addition, Lessor may condition its consent to any Reportable Use upon receiving
such additional assurances as Lessor reasonably deems necessary to protect
itself, the public, the Premises and/or the environment against damage,
contamination, injury and/or liability, including, but not limited to, the
installation (and removal on or before Lease expiration or termination) of protective
modifications (such as concrete encasements) and/or increasing the Security
Deposit.

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

concerning the presence of
such Hazardous Substance.

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

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

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

(f) Investigations and Remediations. Lessor
shall retain the responsibility and pay for any investigations or remediation
measures

 

	
   

  	
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required by governmental
entities having jurisdiction with respect to the existence of Hazardous
Substances on the Premises prior to Lessee’s occupancy, unless such remediation
measure is required as a result of Lessee’s use (including “Alterations”, as
defined in paragraph 7.3(a) below) of the Premises, in which event Lessee
shall be responsible for such payment. Lessee shall cooperate fully in any such
activities at the request of Lessor, including allowing Lessor and Lessor’s
agents to have reasonable access to the Premises at reasonable times in order
to carry out Lessor’s investigative and remedial responsibilities.

(g) Lessor Termination Option. If a Hazardous
Substance Condition (see Paragraph 9.1(e)) occurs during the term of this
Lease, unless Lessee is legally responsible therefor (in which case Lessee
shall make the investigation and remediation thereof required by the Applicable
Requirements and this Lease shall continue in full force and effect, but
subject to Lessor’s rights under Paragraph 6.2(d) and Paragraph 13),
Lessor may, at Lessor’s option, either (i) investigate and remediate such
Hazardous Substance Condition, if required, as soon as reasonably possible at Lessor’s
expense, in which event this Lease shall continue in full force and effect, or (ii) if
the estimated cost to remediate such condition exceeds 12 times the then
monthly Base Rent or $100,000, whichever is greater, give written notice to
Lessee, within 30 days after receipt by Lessor of knowledge of the occurrence
of such Hazardous Substance Condition, of Lessor’s desire to terminate this
Lease as of the date 60 days following the date of such notice. In the event
Lessor elects to give a termination notice, Lessee may, within 10 days
thereafter, give written notice to Lessor of Lessee’s commitment to pay the
amount by which the cost of the remediation of such Hazardous Substance
Condition exceeds an amount equal to 12 times the then monthly Base Rent or $100,000,
whichever is greater. Lessee shall provide Lessor with said funds or
satisfactory assurance thereof within 30 days following such commitment. In
such event, this Lease shall continue in full force and effect, and Lessor
shall proceed to make such remediation as soon as reasonably possible after the
required funds are available. If Lessee does not give such notice and provide
the required funds or assurance thereof within the time provided, this Lease
shall terminate as of the date specified in Lessor’s notice of termination.

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

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

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

7.1                                 Lessee’s Obligations. Notwithstanding Lessor’s obligation to keep
the Premises in good condition and repair, Lessee shall be responsible for
payment of the cost thereof to Lessor as additional rent for that portion of
the cost of any maintenance and repair of the Premises, or any equipment
(wherever located) that serves only Lessee or the Premises, to the extent such
cost is attributable to causes beyond normal wear and tear. Lessee shall be
responsible for the cost of painting, repairing or replacing wall coverings,
and to repair or replace any improvements with the Premises. Lessor may, at its
option, upon reasonable notice, elect to have Lessee perform any particular
such maintenance or repairs the cost of which is otherwise Lessee’s
responsibility hereunder.

7.2                                 Lessor’s Obligations. Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance), 4.2 (Operating Expenses), 6 (Use), 7.1 (Lessee’s
Obligations), 9 (Damage or Destruction) and 14 (Condemnation), Lessor, subject
to reimbursement pursuant to Paragraph 4.2, shall keep in good order, condition
and repair the foundations, exterior walls, structural condition of interior
bearing walls, exterior roof, fire sprinkler system, fire alarm and/or smoke
detection systems, fire hydrants, and the Common Areas. Lessee expressly waives
the benefit of any statute now or hereafter in effect to the extent it is
inconsistent with the terms of this Lease.

7.3                                 Utility Installations; Trade
Fixtures; Alterations.

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

(b) Consent. Lessee shall not make any
Alterations or Utility Installations to the Premises without Lessor’s prior
written consent. Lessee may, however, make non-structural Utility Installations
to the interior of the Premises (excluding the roof) without such consent but
upon notice to Lessor, as long as they are not visible from the outside, do not
involve puncturing, relocating or removing the roof, ceilings, floors or any
existing walls, will not affect the electrical, plumbing, HVAC, and/or life
safety systems, and the cumulative cost thereof during this Lease as extended
does not exceed $2000. Notwithstanding the foregoing, Lessee shall not make or
permit any roof penetrations and/or install anything on the roof without the
prior written approval of Lessor. Lessor may, as a precondition to granting
such approval, require Lessee to utilize a contractor chosen and/or approved by
Lessor. Any Alterations or Utility Installations that Lessee shall desire to
make and which require the consent of the Lessor shall be presented to Lessor
in written form with detailed plans. Consent shall be deemed conditioned upon
Lessee’s: (i) acquiring all applicable governmental permits, (ii) furnishing
Lessor with copies of both the permits and the plans and specifications prior
to commencement of the work, and (iii) compliance with all conditions of said
permits and other Applicable Requirements in a prompt and expeditious manner.
Any Alterations or Utility Installations shall be performed in a workmanlike
manner with good and sufficient materials. Lessee shall promptly upon
completion furnish Lessor with asbuilt plans and specifications. For work which
costs an amount in excess of one month’s Base Rent, Lessor may condition its
consent upon Lessee providing a lien and completion bond in an amount equal to
150% of the estimated cost of such Alteration or Utility Installation and/or
upon Lessee’s posting an additional Security Deposit with Lessor.

(c) Liens; Bonds. Lessee shall pay, when due,
all claims for labor or materials furnished or alleged to have been furnished
to or for Lessee at or for use on the Premises, which claims are or may be
secured by any mechanic’s or materialmen’s lien against the Premises or any
interest therein. Lessee shall give Lessor not less than 10 days notice prior
to the commencement of any work in, on or about the Premises, and Lessor shall have
the right to post notices of non-responsibility. If Lessee shall contest the
validity of any such lien, claim or demand, then Lessee shall, at its sole expense
defend and protect itself, Lessor and the Premises against the same and shall
pay and satisfy any such adverse judgment that may be rendered thereon before
the enforcement thereof. If Lessor shall require, Lessee shall furnish a surety
bond in an amount equal to 150% of the amount of such contested lien, claim or 

demand, indemnifying Lessor
against liability for the same. If Lessor elects to participate in any such
action, Lessee shall pay Lessor’s attorneys’ fees and costs.

7.4                                 Ownership; Removal;
Surrender; and Restoration.

(a) Ownership. Subject to Lessor’s right to
require removal or elect ownership as hereinafter provided, all Alterations and
Utility Installations made by Lessee shall be the property of Lessee, but
considered a part of the Premises. Lessor may, at any time, elect in writing to
be the owner of all or any specified part of the Lessee Owned Alterations and
Utility Installations. Unless otherwise instructed per paragraph 7.4(b) hereof,
all Lessee Owned Alterations and Utility Installations shall, at the expiration
or termination of this Lease, become the property of Lessor and be surrendered by
Lessee with the Premises.

(b) Removal. By delivery to Lessee of written
notice from Lessor not earlier than 90 and not later than 30 days prior to the
end of the term of this Lease, Lessor may require that any or all Lessee Owned
Alterations or Utility Installations be removed by the expiration or
termination of this Lease. Lessor may require the removal at any time of all or
any part of any Lessee Owned Alterations or Utility Installations made without
the required consent.

(c) Surrender; Restoration. Lessee shall
surrender the Premises by the Expiration Date or any earlier termination date,
with all of the improvements, parts and surfaces thereof clean and free of
debris, and in good operating order, condition and state of repair, ordinary
wear and tear excepted. “Ordinary wear and tear” shall not include any damage
or deterioration that would have been prevented by good maintenance practice. Notwithstanding
the foregoing, if this Lease is for 12 months or less, then Lessee shall
surrender the Premises in the same condition as delivered to Lessee on the
Start Date with NO allowance for ordinary wear and tear. Lessee shall repair
any damage occasioned by the installation, maintenance or removal of Trade
Fixtures, Lessee owned Alterations and/or Utility Installations, furnishings,
and equipment as well as the removal of any storage tank installed by or for
Lessee. Lessee shall also completely remove from the Premises any and all
Hazardous Substances brought onto the Premises by or for Lessee, or any third
party (except Hazardous Substances which were deposited via underground
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if such removal would require
Lessee to perform or pay for work that exceeds statutory requirements. Trade
Fixtures shall remain the property of Lessee and shall be removed by Lessee.
Any personal property of Lessee not removed on or before the Expiration Date or
any earlier termination date shall be deemed to have been abandoned by Lessee
and may be disposed of or retained by Lessor as Lessor may desire. The failure
by Lessee to timely vacate the Premises pursuant to this Paragraph 7.4(c) without
the express written consent of Lessor shall constitute a holdover under the
provisions of Paragraph 26 below.

8.                                       Insurance; Indemnity.

8.1                                 Insurance Premiums. The cost of the premiums for the insurance
policies maintained by Lessor pursuant to paragraph 8 are included as Operating
Expenses (see paragraph 4.2 (c)(iv)). Said costs shall include increases in the
premiums resulting from additional coverage related to requirements of the
holder of a mortgage or deed of trust covering the Premises, Building and/or
Project, increased valuation of the Premises, Building and/or Project, and/or a
general premium rate increase. Said costs shall not, however, include any
premium increases resulting from the nature of the occupancy of any other
tenant of the Building. If the Project was not insured for the entirety of the
Base Year, then the base premium shall be the lowest annual premium reasonably
obtainable for the required insurance as of the Start Date, assuming the most
nominal use possible of the Building and/or Project. In no event, however,
shall Lessee be responsible for any portion of the premium cost attributable to
liability insurance coverage in excess of $2,000,000 procured under Paragraph
8.2(b).

8.2                                 Liability Insurance.

(a) Carried by Lessee. Lessee shall obtain and
keep in force a Commercial General Liability policy of insurance protecting
Lessee and Lessor as an additional insured against claims for bodily injury,
personal injury and property damage based upon or arising out of the ownership,
use, occupancy or maintenance of the Premises and all areas appurtenant
thereto. Such insurance shall be on an occurrence basis providing single limit
coverage in an amount not less than $1,000,000 per occurrence with an annual
aggregate of not less than $2,000,000. Lessee shall add Lessor as an additional
insured by means of an endorsement at least as broad as the Insurance Service
Organization’s “Additional Insured-Managers or Lessors of Premises” Endorsement
and coverage shall also be extended to include damage caused by heat, smoke or
fumes from a hostile fire. The policy shall not contain any intra-insured
exclusions as between insured persons or organizations, but shall include
coverage for liability assumed under this Lease as an “insured contract” for the performance of
Lessee’s indemnity obligations under this Lease. The limits of said insurance
shall not, however, limit the liability of Lessee nor relieve Lessee of any
obligation hereunder. Lessee shall provide an endorsement on its liability
policy(ies) which provides that its insurance shall be primary to and not
contributory with any similar insurance carried by Lessor, whose insurance
shall be considered excess insurance only.

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

8.3                                 Property Insurance - Building,
Improvements and Rental Value.

(a) Building and Improvements. Lessor shall
obtain and keep in force a policy or policies of insurance in the name of
Lessor, with loss payable to Lessor, any ground-lessor, and to any Lender
insuring loss or damage to the Building and/or Project. The amount of such
insurance shall be equal to the full insurable replacement cost of the Building
and/or Project, as the same shall exist from time to time, or the amount
required by any Lender, but in no event more than the commercially reasonable
and available insurable value thereof. Lessee Owned Alterations and Utility Installations,
Trade Fixtures, and Lessee’s personal property shall be insured by Lessee under
Paragraph 8.4. If the coverage is available and commercially appropriate, such
policy or policies shall insure against all risks of direct physical loss or
damage (except the perils of flood and/or earthquake unless required by a
Lender), including coverage for debris removal and the enforcement of any
Applicable Requirements requiring the upgrading, demolition, reconstruction or
replacement of any portion of the Premises as the result of a covered loss.
Said policy or policies shall also contain an agreed valuation provision in
lieu of any coinsurance clause, waiver of subrogation, and inflation guard
protection causing an increase in the annual property insurance coverage amount
by a factor of not less than the adjusted U.S. Department of Labor Consumer
Price Index for All Urban Consumers for the city nearest to where the Premises
are located. If such insurance coverage has a deductible clause, the deductible
amount shall not exceed $1,000 per occurrence.

(b) Rental Value. Lessor shall also obtain and
keep in force a policy or policies in the name of Lessor with loss payable to
Lessor and any Lender, insuring the loss of the full Rent for one year with an
extended period of indemnity for an additional 180 days (“Rental Value insurance”).  Said
insurance shall contain an agreed valuation provision in lieu of any
coinsurance clause, and the amount of coverage shall be adjusted annually to
reflect the projected Rent otherwise payable by Lessee, for the next 12 month
period.

(c) Adjacent Premises. Lessee shall pay for any
increase in the premiums for the property insurance of the Building and for the
Common Areas or other buildings in the Project if said increase is caused by
Lessee’s acts, omissions, use or occupancy of the Premises.

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

8.4                                 Lessee’s Property; Business
Interruption Insurance.

(a) Property Damage. Lessee shall obtain and
maintain insurance coverage on all of Lessee’s personal property, Trade
Fixtures, and Lessee Owned Alterations and Utility Installations. Such
insurance shall be full replacement cost coverage with a deductible of not to
exceed $1,000 per occurrence. The proceeds from any such insurance shall be
used by Lessee for the replacement of personal property, Trade Fixtures and Lessee
Owned Alterations and Utility Installations. Lessee shall provide Lessor with
written evidence that such insurance is in force.

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

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

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

8.6                                 Waiver of Subrogation. Without affecting any other rights or
remedies, Lessee and Lessor each hereby release and relieve the other, and
waive their entire right to recover damages against the other, for loss of or
damage to its property arising out of or incident to the perils required to be
insured against herein. The effect of such releases and waivers is not limited
by the amount of 

insurance carried or
required, or by any deductibles applicable hereto. The Parties agree to have
their respective property damage insurance carriers waive any right to
subrogation that such companies may have against Lessor or Lessee, as the case
may be, so long as the insurance is not invalidated thereby. 

8.7                                 Indemnity. Except for Lessor’s gross negligence or
willful misconduct, Lessee shall indemnify, protect, defend and hold harmless the
Premises, Lessor and its agents, Lessor’s master or ground lessor, partners and
Lenders, from and against any and all claims, loss of rents and/or damages,
liens, judgments, penalties, attorneys’ and consultants’ fees, expenses and/or
liabilities arising out of, involving, or in connection with, the use and/or
occupancy of the Premises by Lessee. If any action or proceeding is brought
against Lessor by reason of any of the foregoing matters, Lessee shall upon
notice defend the same at Lessee’s expense by counsel reasonably satisfactory
to Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need
not have first paid any such claim in order to be defended or indemnified.

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

8.9                                 Failure to Provide Insurance.
Lessee acknowledges that any
failure on its part to obtain or maintain the insurance required herein will
expose Lessor to risks and potentially cause Lessor to incur costs not
contemplated by this Lease, the extent of which will be extremely difficult to ascertain.
Accordingly, for any month or portion thereof that Lessee does not maintain the
required insurance and/or does not provide Lessor with the required binders or
certificates evidencing the existence of the required insurance, the Base Rent
shall be automatically increased, without any 

 

	
   

  	
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requirement for notice to
Lessee, by an amount equal to 10% of the then existing Base Rent or $100,
whichever is greater. The parties agree that such increase in Base Rent
represents fair and reasonable compensation for the additional risk/costs that
Lessor will incur by reason of Lessee’s failure to maintain the required
insurance. Such increase in Base Rent shall in no event constitute a waiver of
Lessee’s Default or Breach with respect to the failure to maintain such
insurance, prevent the exercise of any of the other rights and remedies granted
hereunder, nor relieve Lessee of its obligation to maintain the insurance
specified in this Lease.

9.             Damage or Destruction.

9.1           Definitions.

(a) “Premises Partial Damage” shall mean damage
or destruction to the improvements on the Premises, other than Lessee Owned Alterations
and Utility Installations, which can reasonably be repaired in 3 months or less
from the date of the damage or destruction, and the cost thereof does not
exceed a sum equal to 6 month’s Base Rent. Lessor shall notify Lessee in
writing within 30 days from the date of the damage or destruction as to whether
or not the damage is Partial or Total.

(b) “Premises Total Destruction” shall mean
damage or destruction to the improvements on the Premises, other than Lessee Owned
Alterations and Utility Installations and Trade Fixtures, which cannot
reasonably be repaired in 3 months or less from the date of the damage or destruction
and/or the cost thereof exceeds a sum equal to 6 month’s Base Rent. Lessor
shall notify Lessee in writing within 30 days from the date of the damage or
destruction as to whether or not the damage is Partial or Total.

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

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

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

9.2           Partial Damage - Insured Loss. If a Premises Partial Damage that is an
Insured Loss occurs, then Lessor shall, at Lessor’s expense, repair such damage
(but not Lessee’s Trade Fixtures or Lessee Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect; provided, however, that Lessee shall, at Lessor’s
election, make the repair of any damage or destruction the total cost to repair
of which is $5,000 or less, and, in such event, Lessor shall make any
applicable insurance proceeds available to Lessee on a reasonable basis for
that purpose. Notwithstanding the foregoing, if the required insurance was not
in force or the insurance proceeds are not sufficient to effect such repair, the
Insuring Party shall promptly contribute the shortage in proceeds as and when
required to complete said repairs. In the event, however, such shortage was due
to the fact that, by reason of the unique nature of the improvements, full
replacement cost insurance coverage was not commercially reasonable and
available, Lessor shall have no obligation to pay for the shortage in insurance
proceeds or to fully restore the unique aspects of the Premises unless Lessee
provides Lessor with the funds to cover same, or adequate assurance thereof,
within 10 days following receipt of written notice of such shortage and request
therefor. If Lessor receives said funds or adequate assurance thereof within
said 10 day period, the party responsible for making the repairs shall complete
them as soon as reasonably possible and this Lease shall remain in full force
and effect. If such funds or assurance are not received, Lessor may
nevertheless elect by written notice to Lessee within 10 days thereafter to: (i) make
such restoration and repair as is commercially reasonable with Lessor paying
any shortage in proceeds, in which case this Lease shall remain in full force
and effect, or (ii) have this Lease terminate 30 days thereafter. Lessee
shall not be entitled to reimbursement of any funds contributed by Lessee to
repair any such damage or destruction. Premises Partial Damage due to flood or
earthquake shall be subject to Paragraph 9.3, notwithstanding that there may be
some insurance coverage, but the net proceeds of any such insurance shall be
made available for the repairs if made by either Party.

9.3           Partial Damage - Uninsured
Loss. If a Premises Partial
Damage that is not an Insured Loss occurs, unless caused by a negligent or
willful act of Lessee (in which event Lessee shall make the repairs at Lessee’s
expense), Lessor may either: (i) repair such damage as soon as reasonably
possible at Lessor’s expense, in which event this Lease shall continue in full
force and effect, or (ii) terminate this Lease by giving written notice to
Lessee within 30 days after receipt by Lessor of knowledge of the occurrence of
such damage. Such termination shall be effective 60 days following the date of
such notice. In the event Lessor elects to terminate this Lease, Lessee shall
have the right within 10 days after receipt of the termination notice to give
written notice to Lessor of Lessee’s commitment to pay for the repair of such
damage without reimbursement from Lessor. Lessee shall provide Lessor with said
funds or satisfactory assurance thereof within 30 days after making such
commitment. In such event this Lease shall continue in full force and effect,
and Lessor shall proceed to make such repairs as soon as reasonably possible
after the required funds are available. If Lessee does not make the required
commitment, this Lease shall terminate as of the date specified in the
termination notice.

9.4           Total Destruction. Notwithstanding any other provision hereof,
if a Premises Total Destruction occurs, this Lease shall terminate 60 days
following such Destruction. If the damage or destruction was caused by the
gross negligence or willful misconduct of Lessee, Lessor shall have the right
to recover Lessor’s damages from Lessee, except as provided in Paragraph 8.6.

9.5           Damage Near End of Term. If at any time during the last 6 months of
this Lease there is damage for which the cost to repair exceeds one month’s
Base Rent, whether or not an Insured Loss, Lessor may terminate this Lease
effective 60 days following the date of occurrence of such damage by giving a
written termination notice to Lessee within 30 days after the date of
occurrence of such damage. Notwithstanding the foregoing, if Lessee at that
time has an exercisable option to extend this Lease or to purchase the
Premises, then Lessee may preserve this Lease by, (a) exercising such
option and (b) providing Lessor with any shortage in insurance proceeds
(or adequate assurance thereof) needed to make the repairs on or before the
earlier of (i) the date which is 10 days after Lessee’s receipt of Lessor’s
written notice purporting to terminate this Lease, or (ii) the day prior to the
date upon which such option expires. If Lessee duly exercises such option
during such period and provides Lessor with funds (or adequate assurance
thereof) to cover any shortage in insurance proceeds, Lessor shall, at Lessor’s
commercially reasonable expense, repair such damage as soon as reasonably
possible and this Lease shall continue in full force and effect. If Lessee
fails to exercise such option and provide such funds or assurance during such
period, then this Lease shall terminate on the date specified in the
termination notice and Lessee’s option shall be extinguished.

9.6           Abatement of Rent; Lessee’s
Remedies.

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

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

“Commence” shall mean either
the unconditional authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever first occurs.

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

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

10.           Real Property Taxes.

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

10.2         Payment of Taxes. Except as otherwise provided in Paragraph
10.3, Lessor shall pay the Real Property Taxes applicable to the Project, and
said payments shall be included in the calculation of Operating Expenses in
accordance with the provisions of Paragraph 4.2.

10.3         Additional Improvements. Operating Expenses shall not include Real
Property Taxes specified in the tax assessor’s records and

 

	
   

  	
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work sheets as being caused
by additional improvements placed upon the Project by other lessees or by
Lessor for the exclusive enjoyment of such other lessees. Notwithstanding
Paragraph 10.2 hereof, Lessee shall, however, pay to Lessor at the time
Operating Expenses are payable under Paragraph 4.2, the entirety of any
increase in Real Property Taxes if assessed solely by reason of Alterations,
Trade Fixtures or Utility Installations placed upon the Premises by Lessee or
at Lessee’s request or by reason of any alterations or improvements to the
Premises made by Lessor subsequent to the execution of this Lease by the
Parties.

10.4         Joint Assessment. If the Building is not separately assessed,
Real Property Taxes allocated to the Building shall be an equitable proportion
of the Real Property Taxes for all of the land and improvements included within
the tax parcel assessed, such proportion to be determined by Lessor from the
respective valuations assigned in the assessor’s work sheets or such other
information as may be reasonably available. Lessor’s reasonable determination
thereof, in good faith, shall be conclusive.

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

11.           Utilities and Services.

11.1         Services Provided by Lessor.  Lessor shall provide heating, ventilation, air conditioning, reasonable
amounts of electricity for normal lighting and office machines, water for
reasonable and normal drinking and lavatory use in connection with an office,
and replacement light bulbs and/or fluorescent tubes and ballasts for standard
overhead fixtures. Lessor shall also provide janitorial services only to the Premises and Common Areas 5 times per
week, excluding Building Holidays, or pursuant to the attached janitorial
schedule, if any. Lessor shall not, however, be required to provide janitorial
services to kitchens or storage areas included within the Premises.

11.2         Services Exclusive to Lessee.  Lessee shall pay for all water, gas, heat, light, power, telephone and
other utilities and services specially or exclusively supplied and/or metered
exclusively to the Premises or to Lessee, together with any taxes thereon. If a
service is deleted by Paragraph 1.13 and such service is not separately metered
to the Premises, Lessee shall pay at Lessor’s option, either Lessee’s Share or
a reasonable proportion to be determined by Lessor of all charges for such
jointly metered service.

11.3         Hours of Service.  Said services and utilities shall be provided during times set forth in
Paragraph 1.12. Utilities and services required at other times shall be subject
to advance request and reimbursement by Lessee to Lessor of the cost thereof.

11.4         Excess Usage by Lessee.  Lessee shall not make connection to the utilities except by or through
existing outlets and shall not install or use machinery or equipment in or
about the Premises that uses excess water, lighting or power, or suffer or
permit any act that causes extra burden upon the utilities or services,
including but not limited to security and trash services, over standard office
usage for the Project. Lessor shall require Lessee to reimburse Lessor for any
excess expenses or costs that may arise out of a breach of this subparagraph by
Lessee. Lessor may, in its sole discretion, install at Lessee’s expense
supplemental equipment and/or separate metering applicable to Lessee’s excess
usage or loading.

11.5         Interruptions.  There shall be no abatement of rent and Lessor shall not be liable in
any respect whatsoever for the inadequacy, stoppage, interruption or
discontinuance of any utility or service due to riot, strike, labor dispute,
breakdown, accident, repair or other cause beyond Lessor’s reasonable control
or in cooperation with governmental request or directions.

12.           Assignment and Subletting.

12.1         Lessor’s Consent Required.

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

(b) Unless
Lessee is a corporation and its stock is publicly traded on a national stock
exchange, a change in the control of Lessee shall constitute an assignment
requiring consent. The transfer, on a cumulative basis, of 25% or more of the
voting control of Lessee shall constitute a change in control for this purpose.

(c) The
involvement of Lessee or its assets in any transaction, or series of
transactions (by way of merger, sale, acquisition, financing, transfer,
leveraged buyout or otherwise), whether or not a formal assignment or
hypothecation of this Lease or Lessee’s assets occurs, which results or will
result in a reduction of the Net Worth of Lessee by an amount greater than 25%
of such Net Worth as it was represented at the time of the execution of this
Lease or at the time of the most recent assignment to which Lessor has
consented, or as it exists immediately prior to said transaction or
transactions constituting such reduction, whichever was or is greater, shall be
considered an assignment of this Lease to which Lessor may withhold its consent.
“Net Worth of Lessee” shall mean
the net worth of Lessee (excluding any guarantors) established under generally
accepted accounting principles.

(d) An
assignment or subletting without consent shall, at Lessor’s option, be a
Default curable after notice per Paragraph 13.1(c), or a noncurable Breach
without the necessity of any notice and grace period. If Lessor elects to treat
such unapproved assignment or subletting as a noncurable Breach, Lessor may
either: (i) terminate this Lease, or (ii) upon 30 days written
notice, increase the monthly Base Rent to 110% of the Base Rent then in effect.
Further, in the event of such Breach and rental adjustment, (i) the
purchase price of any option to purchase the Premises held by Lessee shall be
subject to similar adjustment to 110% of the price previously in effect, and (ii) all
fixed and non-fixed rental adjustments scheduled during the remainder of the
Lease term shall be increased to 110% of the scheduled adjusted rent.

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

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

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

12.2         Terms and Conditions Applicable
to Assignment and Subletting.

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

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

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

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

(e) Each
request for consent to an assignment or subletting shall be in writing,
accompanied by information relevant to Lessor’s determination as to the
financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, 

including but not limited to the
intended use and/or required modification of the Premises, if any, together
with a fee of $500 as consideration for Lessor’s considering and processing
said request. Lessee agrees to provide Lessor with such other or additional
information and/or documentation as may be reasonably requested. (See also
Paragraph 36)

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

(g) Lessor’s
consent to any assignment or subletting shall not transfer to the assignee or
sublessee any Option granted to the original Lessee by this Lease unless such
transfer is specifically consented to by Lessor in writing. (See Paragraph
39.2)

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

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

(b) In
the event of a Breach by Lessee, Lessor may, at its option, require sublessee
to attorn to Lessor, in which event Lessor shall

 

	
   

  	
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undertake the obligations of
the sublessor under such sublease from the time of the exercise of said option
to the expiration of such sublease; provided, however, Lessor shall not be
liable for any prepaid rents or security deposit paid by such sublessee to such
sublessor or for any prior Defaults or Breaches of such sublessor.

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

(d) No
sublessee shall further assign or sublet all or any part of the Premises
without Lessor’s prior written consent.

(e) Lessor
shall deliver a copy of any notice of Default or Breach by Lessee to the
sublessee, who shall have the right to cure the Default of Lessee within the
grace period, if any, specified in such notice. The sublessee shall have a
right of reimbursement and offset from and against Lessee for any such Defaults
cured by the sublessee.

(f) Lessee and Lessor shall share any profits from a
sublease or assignment fifty-fifty (50:50). Profits shall be defined as base
rent and additional rent received by sublessor/assignor over and above the base
rental rate at the time of the full execution of the sublease/assignment agreement.

13.           Default; Breach; Remedies.

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

(a) The
abandonment of the Premises; or the vacating of the Premises without providing
a commercially reasonable level of security, or where the coverage of the
property insurance described in Paragraph 8.3 is jeopardized as a result
thereof, or without providing reasonable assurances to minimize potential
vandalism.

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

(c) The
commission of waste, act or acts constituting public or private nuisance,
and/or an illegal activity on the Premises by Lessee, where such actions continue
for a period of 3 business days following written notice to Lessee.

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

(e) A
Default by Lessee as to the terms, covenants, conditions or provisions of this
Lease, or of the rules adopted under Paragraph 2.9 hereof, other than
those described in subparagraphs 13.1(a), (b) or (c), above, where such
Default continues for a period of 30 days after written notice; provided,
however, that if the nature of Lessee’s Default is such that more than 30 days
are reasonably required for its cure, then it shall not be deemed to be a
Breach if Lessee commences such cure within said 30 day period and thereafter
diligently prosecutes such cure to completion.

(f) The
occurrence of any of the following events: (i) the making of any general
arrangement or assignment for the benefit of creditors; (ii) becoming a “debtor” as defined in 11 U.S.C. § 101 or
any successor statute thereto (unless, in the case of a petition filed against
Lessee, the same is dismissed within 60 days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of Lessee’s assets
located at the Premises or of Lessee’s interest in this Lease, where possession
is not restored to Lessee within 30 days; or (iv) the attachment,
execution or other judicial seizure of substantially all of Lessee’s assets
located at the Premises or of Lessee’s interest in this Lease, where such
seizure is not discharged within 30 days; provided, however, in the event that
any provision of this subparagraph is contrary to any applicable law, such
provision shall be of no force or effect, and not affect the validity of the
remaining provisions.

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

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

13.2         Remedies. If Lessee fails to perform any of its
affirmative duties or obligations, within 10 days after written notice (or in
case of an emergency, without notice), Lessor may, at its option, perform such
duty or obligation on Lessee’s behalf, including but not limited to the
obtaining of reasonably required bonds, insurance policies, or governmental
licenses, permits or approvals. Lessee shall pay to Lessor an amount equal to
115% of the costs and expenses incurred by Lessor in such performance upon
receipt of an invoice therefor. In the event of a Breach, Lessor may, with or without
further notice or demand, and without limiting Lessor in the exercise of any
right or remedy which Lessor may have by reason of such Breach:

(a) Terminate
Lessee’s right to possession of the Premises by any lawful means, in which case
this Lease shall terminate and Lessee shall immediately surrender possession to
Lessor. In such event Lessor shall be entitled to recover from Lessee: (i) the
unpaid Rent which had been earned at the time of termination; (ii) the
worth at the time of award of the amount by which the unpaid rent which would
have been earned after termination until the time of award exceeds the amount
of such rental loss that the Lessee proves could have been reasonably avoided; (iii) the
worth at the time of award of the amount by which the unpaid rent for the
balance of the term after the time of award exceeds the amount of such rental
loss that the Lessee proves could be reasonably avoided; and (iv) any
other amount necessary to compensate Lessor for all the detriment proximately
caused by the Lessee’s failure to perform its obligations under this Lease or
which in the ordinary course of things would be likely to result therefrom,
including but not limited to the cost of recovering possession of the Premises,
expenses of reletting, including necessary renovation and alteration of the
Premises, reasonable attorneys’ fees, and that portion of any leasing
commission paid by Lessor in connection with this Lease applicable to the
unexpired term of this Lease. The worth at the time of award of the amount
referred to in provision (iii) of the immediately preceding sentence shall
be computed by discounting such amount at the discount rate of the Federal
Reserve Bank of the District within which the Premises are located at the time
of award plus one percent. Efforts by Lessor to mitigate damages caused by
Lessee’s Breach of this Lease shall not waive Lessor’s right to recover damages
under Paragraph 12. If termination of this Lease is obtained through the
provisional remedy of unlawful detainer, Lessor shall have the right to recover
in such proceeding any unpaid Rent and damages as are recoverable therein, or
Lessor may reserve the right to recover all or any part thereof in a separate suit.
If a notice and grace period required under Paragraph 13.1 was not previously
given, a notice to pay rent or quit, or to perform or quit given to Lessee
under the unlawful detainer statute shall also constitute the notice required
by Paragraph 13.1. In such case, the applicable grace period required by
Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and
the failure of Lessee to cure the Default within the greater of the two such
grace periods shall constitute both an unlawful detainer and a Breach of this
Lease entitling Lessor to the remedies provided for in this Lease and/or by
said statute.

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

(c) Pursue
any other remedy now or hereafter available under the laws or judicial
decisions of the state wherein the 

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

13.3         Inducement Recapture. Any agreement for free or abated rent or
other charges, or for the giving or paying by Lessor to or for Lessee of any
cash or other bonus, inducement or consideration for Lessee’s entering into
this Lease, all of which concessions are hereinafter referred to as “Inducement Provisions”, shall be deemed
conditioned upon Lessee’s full and faithful performance of all of the terms,
covenants and conditions of this Lease. Upon Breach of this Lease by Lessee,
any such Inducement Provision shall automatically be deemed deleted from this
Lease and of no further force or effect, and any rent, other charge, bonus,
inducement or consideration theretofore abated, given or paid by Lessor under
such an Inducement Provision shall be immediately due and payable by Lessee to
Lessor, notwithstanding any subsequent cure of said Breach by Lessee. The acceptance
by Lessor of rent or the cure of the Breach which initiated the operation of
this paragraph shall not be deemed a waiver by Lessor of the provisions of this
paragraph unless specifically so stated in writing by Lessor at the time of
such acceptance.

13.4         Late Charges. Lessee hereby acknowledges that late payment
by Lessee of Rent will cause Lessor to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to ascertain. Such
costs include, but are not limited to, processing and accounting charges, and
late charges which may be imposed upon Lessor by any Lender. Accordingly, if
any Rent shall not be received by Lessor within 5 days after such amount shall
be due, then, without any requirement for notice to Lessee, Lessee shall
immediately pay to Lessor a one-time late charge equal to 10% of each such
overdue amount or $100, whichever is greater. The parties hereby agree that
such late charge represents a fair and reasonable estimate of the costs Lessor
will incur by reason of such late payment. Acceptance of such late charge by
Lessor shall in no event constitute a waiver of Lessee’s Default or Breach with
respect to such overdue amount, nor prevent the exercise of any of the other
rights and remedies granted hereunder. In the event that a late charge is
payable hereunder, whether or not collected, for 3 consecutive installments of
Base Rent, then notwithstanding any provision of this Lease to the contrary,
Base Rent shall, at Lessor’s option, become due and payable quarterly in
advance.

13.5         Interest. Any monetary payment due Lessor hereunder,
other than late charges, not received by Lessor, when due as to scheduled

 

	
   

  	
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payments (such as Base Rent)
or within 30 days following the date on which it was due for nonscheduled
payment, shall bear interest from the date when due, as to scheduled payments,
or the 31st day after it was due as to nonscheduled payments. The interest

(“Interest”) charged shall be computed
at the rate of 10% per annum but shall not exceed the maximum rate allowed by
law. Interest is payable in addition to the potential late charge provided for
in Paragraph 13.4.

13.6         Breach by Lessor.

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

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

14.           Condemnation. If the Premises or any portion thereof are
taken under the power of eminent domain or sold under the threat of the
exercise of said power (collectively “Condemnation”),
this Lease shall terminate as to the part taken as of the date the condemning
authority takes title or possession, whichever first occurs. If more than 10%
of the rentable floor area of the Premises, or more than 25% of Lessee’s
Reserved Parking Spaces, if any, are taken by Condemnation, Lessee may, at
Lessee’s option, to be exercised in writing within 10 days after Lessor shall
have given Lessee written notice of such taking (or in the absence of such
notice, within 10 days after the condemning authority shall have taken
possession) terminate this Lease as of the date the condemning authority takes
such possession. If Lessee does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and effect as to the portion
of the Premises remaining, except that the Base Rent shall be reduced in proportion
to the reduction in utility of the Premises caused by such Condemnation.
Condemnation awards and/or payments shall be the property of Lessor, whether
such award shall be made as compensation for diminution in value of the
leasehold, the value of the part taken, or for severance damages; provided,
however, that Lessee shall be entitled to any compensation for Lessee’s
relocation expenses, loss of business goodwill and/or Trade Fixtures, without
regard to whether or not this Lease is terminated pursuant to the provisions of
this Paragraph. All Alterations and Utility Installations made to the Premises
by Lessee, for purposes of Condemnation only, shall be considered the property
of the Lessee and Lessee shall be entitled to any and all compensation which is
payable therefor. In the event that this Lease is not terminated by reason of
the Condemnation, Lessor shall repair any damage to the Premises caused by such
Condemnation.

15.           Brokerage Fees. Lessor shall pay to the brokers the brokerage fee
agreed to in a separate written agreement - the Standard Owner-Agency Agreement
dated April 11, 2005 by and between Scriba Enterprises, Inc. and NAI
Capital, Inc.

15.1         Additional Commission. In addition to the payments owed pursuant to
Paragraph 1.10 above, and unless Lessor and the Brokers otherwise agree in
writing, Lessor agrees that: (a) if Lessee exercises any Option,
(b) if Lessee acquires from Lessor any rights to the Premises or other
premises owned by Lessor and located within the Project, (c) if Lessee
remains in possession of the Premises, with the consent of Lessor, after the
expiration of this Lease, or (d) if Base Rent is increased, whether by
agreement or operation of an escalation clause herein, then, Lessor shall pay
Brokers a fee in accordance with the schedule of the Brokers in effect at the
time of the execution of this Lease.

15.2         Assumption
of Obligations. Any buyer or transferee of Lessor’s interest in this
Lease shall be deemed to have assumed Lessor’s obligation hereunder. Brokers
shall be third party beneficiaries of the provisions of Paragraphs 1.10, 15, 22
and 31. If Lessor fails to pay to Brokers any amounts due as and for brokerage
fees pertaining to this Lease when due, then such amounts shall accrue
Interest. In addition, if Lessor fails to pay any amounts to Lessee’s Broker
when due, Lessee’s Broker may send written notice to Lessor and Lessee of such
failure and if Lessor fails to pay such amounts within 10 days after said
notice, Lessee shall pay said monies to its Broker and offset such amounts
against Rent. In addition, Lessee’s Broker shall be deemed to be a third party
beneficiary of any commission agreement entered into by and/or between Lessor
and Lessor’s Broker for the limited purpose of collecting any brokerage fee
owed.

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

16.           Estoppel Certificates.

(a) Each
Party (as “Responding Party”)
shall within 10 days after written notice from the other Party (the “Requesting Party”) execute, acknowledge and
deliver to the Requesting Party a statement in writing in form similar to the
then most current “Estoppel Certificate”
form published by the AIRCommercial Real Estate Association, plus such
additional information, confirmation and/or statements as may be reasonably requested
by the Requesting Party.

(b) If
the Responding Party shall fail to execute or deliver the Estoppel Certificate
within such 10 day period, the Requesting Party may execute an Estoppel
Certificate stating that: (i) the Lease is in full force and effect
without modification except as may be represented by the Requesting Party, (ii) there
are no uncured defaults in the Requesting Party’s performance, and (iii) if
Lessor is the Requesting Party, not more than one month’s rent has been paid in
advance. Prospective purchasers and encumbrancers may rely upon the Requesting
Party’s Estoppel Certificate, and the Responding Party shall be estopped from
denying the truth of the facts contained in said Certificate.

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

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

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

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

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

21.           Time of Essence. Time is of the essence with respect to the
performance of all obligations to be performed or observed by the Parties under
this Lease.

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

23.           Notices.

23.1         Notice Requirements. All notices required or permitted by this
Lease or applicable law shall be in writing and may be delivered in person (by
hand or by courier) or may be sent by regular, certified or registered mail or
U.S. Postal Service Express Mail, with postage prepaid, or by facsimile
transmission, and shall be deemed sufficiently given if served in a manner
specified in this Paragraph 23. The addresses noted adjacent to a Party’s
signature on this Lease shall be that Party’s address for delivery or mailing
of notices. Either Party may by written notice to the other specify a different
address for notice, except that upon Lessee’s taking possession of the
Premises, the Premises shall constitute Lessee’s address for notice. A copy of
all notices to Lessor shall be concurrently transmitted to such party or
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designate in writing.

23.2         Date of Notice. Any notice sent by registered or certified
mail, return receipt requested, shall be deemed given on the date of delivery shown
on the receipt card, or if no delivery date is shown, the postmark thereon. If
sent by regular mail the notice shall be deemed given 72 hours after the same
is addressed as required herein and mailed with postage prepaid. Notices
delivered by United States Express Mail or overnight courier that guarantee
next day delivery shall be deemed given 24 hours after delivery of the same to
the Postal Service or courier. Notices transmitted by facsimile transmission or
similar means shall be deemed delivered upon telephone confirmation of receipt
(confirmation report from fax machine is sufficient), provided a copy is also
delivered via delivery or mail. If notice is received on a Saturday, Sunday or
legal holiday, it shall be deemed received on the next business day.

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

25.           Disclosures Regarding The
Nature of a Real Estate Agency Relationship.

(a) When
entering into a discussion with a real estate agent regarding a real estate
transaction, a Lessor or Lessee should from the outset understand what type of
agency relationship or representation it has with the agent or agents in the
transaction. Lessor and Lessee acknowledge being advised by the Brokers in this
transaction, as follows:

(i) Lessor’s
Agent. A Lessor’s agent under a listing agreement with the Lessor acts as the
agent for the Lessor only. A Lessor’s agent or subagent has the following
affirmative obligations: To the Lessor: A fiduciary duty of utmost care,
integrity, honesty, and loyalty in dealings with the Lessor. To the Lessee and
the Lessor: a. Diligent exercise of reasonable skills and care in performance
of the agent’s duties. b. A duty of honest and fair dealing and good faith. c.
A duty to disclose all facts known to the agent materially affecting the value
or desirability of the property that are not known to, or within the diligent
attention and observation of, the Parties. An agent is not obligated to reveal
to either Party any confidential information obtained from the other Party
which does not involve the affirmative duties set forth above.

(ii) Lessee’s
Agent. An agent can agree to act as agent for the Lessee only. In these
situations, the agent is not the Lessor’s agent, even if by agreement the agent
may receive compensation for services rendered, either in full or in part from
the Lessor. An agent acting only for a Lessee has the following affirmative
obligations. To the Lessee: A fiduciary duty of utmost care, integrity,
honesty, and loyalty in dealings with the Lessee. To the Lessee and the Lessor:
a. Diligent exercise of reasonable skills and care in performance of the
agent’s duties. b. A duty of honest and fair dealing and good faith. c. A duty
to disclose all facts known to the agent materially affecting the value or
desirability of the property that are not known to, or within the diligent
attention and observation of, the Parties. An agent is not obligated to reveal
to either Party any confidential information obtained from the other Party
which does not involve the affirmative duties set forth above.

(iii) Agent
Representing Both Lessor and Lessee. A real estate agent, either acting
directly or through one or more associate licenses, can legally be the agent of
both the Lessor and the Lessee in a transaction, but only with the knowledge
and consent of both the Lessor and the Lessee. In a dual agency situation, the
agent has the following affirmative obligations to both the Lessor and the
Lessee: a. A fiduciary duty of utmost care, integrity, honesty and loyalty in
the dealings with either Lesser or the Lessee. b. Other duties to the Lessor
and the Lessee as stated above in subparagraphs (i) or (ii). In
representing both Lessor and Lessee, the agent may not without the express
permission of the respective Party, disclose to the other Party that the Lessor
will accept rent in an amount less than that indicated in the listing or that
the Lessee is willing to pay a higher rent than that offered. The above duties
of the agent in a real estate transaction do not relieve a Lessor or Lessee
from the responsibility to protect their own interests. Lessor and Lessee
should carefully read all agreements to assure that they adequately express
their understanding of the transaction. A real estate agent is a person
qualified to advise about real estate. If legal or tax advise is desired,
consult a competent professional.

(b) Brokers
have no responsibility with respect to any default or breach hereof by either
Party. The Parties agree that no lawsuit or other legal proceeding involving
any breach of duty, error or omission relating to this Lease may be brought
against Broker more than one year after the Start Date and that the liability
(including court costs and attorneys’ fees), of any Broker with respect to any
such lawsuit and/or legal proceeding shall not exceed the fee received by such
Broker pursuant to this Lease; provided, however, that the foregoing limitation
on each Broker’s liability shall not be applicable to any gross negligence or
willful misconduct of such Broker.

(c) Buyer
and Seller agree to identify to Brokers as “Confidential” any communication or
information given Brokers that is considered by such Party to be confidential.

26.           No Right To Holdover. Lessee has no right to retain possession of
the Premises or any part thereof beyond the expiration or termination of this
Lease. In the event that Lessee holds over, then the Base Rent shall be
increased to 150% of the Base Rent applicable immediately preceding the expiration
or termination. Nothing contained herein shall be construed as consent by
Lessor to any holding over by Lessee.

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

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

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

30.           Subordination; Attornment;
Non-Disturbance.

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

30.2         Attornment. In the event that Lessor transfers title to
the Premises, or the Premises are acquired by another upon the foreclosure or
termination of a Security Device to which this Lease is subordinated (i) Lessee
shall, subject to the non-disturbance provisions of Paragraph 30.3, attorn to
such new owner, and upon request, enter into a new lease, containing all of the
terms and provisions of this Lease, with such new owner for the remainder of
the term hereof, or, at the election of the new owner, this Lease will
automatically become a new lease between Lessee and such new owner, and (ii) Lessor
shall thereafter be relieved of any further obligations hereunder and such new
owner shall assume all of Lessor’s obligations, except that such new owner
shall not: (a) be liable for any act or omission of any prior lessor or
with respect to events occurring prior to acquisition of ownership; (b) be
subject to any offsets or defenses which Lessee might have against any prior
lessor, (c) be bound by prepayment of more than one month’s rent, or (d) be
liable for the return of any security deposit paid to any prior lessor.

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

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

31.           Attorneys’ Fees. If any Party or Broker brings an action or
proceeding involving the Premises whether founded in tort, contract or equity,
or to declare rights hereunder, the Prevailing Party (as hereafter defined) in
any such proceeding, action, or appeal thereon, shall be entitled to reasonable
attorneys’ fees. Such fees may be awarded in the same suit or recovered in a
separate suit, whether or not such action or proceeding is pursued to decision
or judgment. The term, “Prevailing Party”
shall include, without limitation, a Party or Broker who substantially obtains
or defeats the relief sought, as the case may be, whether by compromise,
settlement, judgment, or the abandonment by the other Party or Broker of its
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The attorneys’ fees award
shall not be computed in accordance with any court fee schedule, but shall be
such as to fully reimburse all attorneys’ fees reasonably incurred. In
addition, Lessor shall be entitled to attorneys’ fees, costs and expenses
incurred in the preparation and service of notices of Default and consultations
in connection therewith, whether or not a legal action is subsequently
commenced in connection with such Default or resulting Breach ($200 is a
reasonable minimum per occurrence for such services and consultation).

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

33.           Auctions. Lessee shall not conduct, nor permit to be
conducted, any auction upon the Premises without Lessor’s prior written
consent. Lessor shall not be obligated to exercise any standard of
reasonableness in determining whether to permit an auction.

34.           Signs. Lessor may place on the Premises ordinary
“For Sale” signs at any time and ordinary “For Lease” signs during the last 6
months of the term hereof.

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

36.           Consents. Except as otherwise provided herein,
wherever in this Lease the consent of a Party is required to an act by or for
the other Party, such consent shall not be unreasonably withheld or delayed.
Lessor’s actual reasonable costs and expenses (including but not limited to
architects’, attorneys’, engineers’ and other consultants’ fees) incurred in
the consideration of, or response to, a request by Lessee for any Lessor
consent, including but not limited to consents to an assignment, a subletting
or the presence or use of a Hazardous Substance, shall be paid by Lessee upon
receipt of an invoice and supporting documentation therefor. Lessor’s consent
to any act, assignment or subletting shall not constitute an acknowledgment
that no Default or Breach by Lessee of this Lease exists, nor shall such
consent be deemed a waiver of any then existing Default or Breach, except as
may be otherwise specifically stated in writing by Lessor at the time of such
consent. The failure to specify herein any particular condition to Lessor’s
consent shall not preclude the imposition by Lessor at the time of consent of
such further or other conditions as are then reasonable with reference to the particular
matter for which consent is being given. In the event that either Party
disagrees with any determination made by the other hereunder and reasonably
requests the reasons for such determination, the determining party shall
furnish its reasons in writing and in reasonable detail within 10 business days
following such request.

37.           Guarantor.

37.1         Execution. The Guarantors, if any, shall each execute a
guaranty in the form most recently published by the AIR Commercial Real Estate
Association.

37.2         Default. It shall constitute a Default of the Lessee
if any Guarantor fails or refuses, upon request to provide: (a) evidence
of the execution of the guaranty, including the authority of the party signing
on Guarantor’s behalf to obligate Guarantor, and in the case of a corporate Guarantor,
a certified copy of a resolution of its board of directors authorizing the
making of such guaranty, (b) current financial statements, (c) an Estoppel
Certificate, or (d) written confirmation that the guaranty is still in
effect.

38.           Quiet Possession. Subject to payment by Lessee of the Rent and
performance of all of the covenants, conditions and provisions on Lessee’s part
to be observed and performed under this Lease, Lessee shall have quiet
possession and quiet enjoyment of the Premises during the term hereof.

39.           Options. If Lessee is granted an Option, as defined
below, then the following provisions shall apply.

39.1         Definition. “Option”
shall mean: (a) the right to extend the term of or renew this Lease or to
extend or renew any lease that Lessee has on other property of Lessor; (b) the
right of first refusal or first offer to lease either the Premises or other
property of Lessor; (c) the right to purchase or the right of first
refusal to purchase the Premises or other property of Lessor.

39.2         Options Personal To Original
Lessee. Any Option granted to
Lessee in this Lease is personal to the original Lessee, and cannot be assigned
or exercised by anyone other than said original Lessee and only while the
original Lessee is in full possession of the Premises and, if requested by
Lessor, with Lessee certifying that Lessee has no intention of thereafter
assigning or subletting.

39.3         Multiple Options. In the event that Lessee has any multiple
Options to extend or renew this Lease, a later Option cannot be exercised
unless the prior Options have been validly exercised.

39.4         Effect of Default on Options.

(a) Lessee
shall have no right to exercise an Option: (i) during the period
commencing with the giving of any notice of Default and continuing until said
Default is cured, (ii) during the period of time any Rent is unpaid (without
regard to whether notice thereof is given Lessee), (iii) during the time Lessee
is in Breach of this Lease, or (iv) in the event that Lessee has been
given 3 or more notices of separate Default, whether or not the Defaults are
cured, during the 12 month period immediately preceding the exercise of the
Option.

(b) The
period of time within which an Option may be exercised shall not be extended or
enlarged by reason of Lessee’s inability to exercise an Option because of the
provisions of Paragraph 39.4(a).

(c) An
Option shall terminate and be of no further force or effect, notwithstanding
Lessee’s due and timely exercise of the Option, if, after such exercise and
prior to the commencement of the extended term or completion of the purchase, (i) Lessee
fails to pay Rent for a period of 30 days after such Rent becomes due (without
any necessity of Lessor to give notice thereof), or (ii) if Lessee commits
a Breach of this Lease.

40.           Security Measures. Lessee hereby acknowledges that the Rent
payable to Lessor hereunder does not include the cost of guard service or other
security measures, and that Lessor shall have no obligation whatsoever to
provide same. Lessee assumes all responsibility for the protection of the
Premises, Lessee, its agents and invitees and their property from the acts of
third parties. In the event, however, that Lessor should elect to provide security
services, then the cost thereof shall be an Operating Expense.

41.           Reservations.

(a) Lessor
reserves the right: (i) to grant, without the consent or joinder of
Lessee, such easements, rights and dedications that Lessor deems necessary, (ii) to
cause the recordation of parcel maps and restrictions, (iii) to create
and/or install new utility raceways, so long as such easements, rights, dedications,
maps, restrictions, and utility raceways do not unreasonably interfere with the
use of the Premises by Lessee. Lessor may also: change the name, address or
title of the Building or Project upon at least 90 days prior written notice;
provide and install, at Lessee’s expense, Building standard graphics on the
door of the Premises and such portions of the Common Areas as Lessor shall
reasonably deem appropriate; grant to any lessee the exclusive right to conduct
any business as long as such exclusive right does not conflict with any rights
expressly given herein; and to place such signs, notices or displays as Lessor
reasonably deems necessary or advisable upon the roof, exterior of the Building
or the Project or on pole signs in the Common Areas. Lessee agrees to sign any
documents reasonably requested by Lessor to effectuate such rights. The
obstruction of Lessee’s view, air, or light by any structure erected in the
vicinity of the Building, whether by Lessor or third parties, shall in no way
affect this Lease or impose any liability upon Lessor.

(b) Lessor
also reserves the right to move Lessee to other space of comparable size in the
Building or Project. Lessor must provide at least 45 days prior written notice
of such move, and the new space must contain improvements of comparable quality
to those contained within the Premises. Lessor shall pay the reasonable out of
pocket costs that Lessee incurs with regard to such relocation, including the
expenses of moving and necessary stationary revision costs. In no event,
however, shall Lessor be required to pay an amount in excess of two months Base
Rent. Lessee may not be relocated more than once during the term of this Lease.

(c) Lessee
shall not: (i) use a representation (photographic or otherwise) of the Building
or Project or their name(s) in connection with Lessee’s business; or (ii) suffer
or permit anyone, except in emergency, to go upon the roof of the Building.

42.           Performance Under Protest. If at any time a dispute shall arise as to
any amount or sum of money to be paid by one Party to the other under the
provisions hereof, the Party against whom the obligation to pay the money is
asserted shall have the right to make payment “under protest” and such payment
shall not be regarded as a voluntary payment and there shall survive the right
on the part of said Party to institute suit for recovery of such sum. If it
shall be adjudged that there was no legal obligation on the part of said Party
to pay such sum or any part thereof, said Party shall be entitled to recover
such sum or so much thereof as it was not legally required to pay. A Party who
does not initiate suit for the recovery of sums paid “under protest” within 6
months shall be deemed to have waived its right to protest such payment.

43.           Authority; Multiple Parties;
Execution

(a) If
either Party hereto is a corporation, trust, limited liability company,
partnership, or similar entity, each individual executing this Lease on behalf
of such entity represents and warrants that he or she is duly authorized to
execute and deliver this Lease on its behalf. Each Party shall, within 30 days
after request, deliver to the other Party satisfactory evidence of such
authority.

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

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

 

	
   

  	
  PAGE 12  OF 13

  	
   

  

 

 

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

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

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

47.           Waiver of Jury Trial. THE
PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT.

48.           Mediation and Arbitration of
Disputes. An Addendum
requiring the Mediation and/or the Arbitration of all disputes between the
Parties and/or Brokers arising out of this Lease o is o is not attached to this Lease.

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

 

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

 

ATTENTION: NO REPRESENTATION
OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCIATION OR BY
ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF
THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO:

1.
         SEEK ADVICE OF COUNSEL AS TO THE
LEGAL AND TAX CONSEQUENCES OF THIS LEASE.

2.
         RETAIN APPROPRIATE CONSULTANTS TO
REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD
INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES,
THE ZONING AND SIZE OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF
THE ROOF AND OPERATING SYSTEMS, COMPLIANCE WITH THE AMERICANS WITH DISABILITIES
ACT AND THE SUITABILITY OF THE PREMISES FOR LESSEE’S INTENDED USE.

 

WARNING: IF THE PREMISES ARE
LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE LEASE MAY NEED
TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES ARE
LOCATED.

The parties hereto have
executed this Lease at the place and on the dates specified above their
respective signatures.

 

	
  Executed at:

  	
  Los Angeles, California

  	
   

  	
  Executed at:

  	
  Los Angeles, California

  
	
  On:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By LESSOR:

  	
   

  	
  By LESSEE:

  
	
   

  	
   

  	
   

  
	
  Scriba
  Enterprises, Inc., a California corporation

  	
   

  	
  1st Century Bank, National
  Association

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Ralph Scriba

  	
   

  	
  By:

  	
  /s/ Richard S. Cupp

  
	
  Name Printed:

  	
  Ralph Scriba

  	
   

  	
  Name Printed: 

  	
  Richard S. Cupp

  
	
  Title:

  	
  President

  	
   

  	
  Title: 

  	
  President & Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By: 

  	
  /s/ Jeffrey M. Watson

  
	
  Name Printed:

  	
   

  	
   

  	
  Name Printed:

  	
  Jeffrey M. Watson

  
	
  Title:

  	
   

  	
   

  	
  Title: 

  	
  EVP/COO

  
	
  Address:

  	
  35 Malaga Cove Plaza

  	
   

  	
  Address: 

  	
  1875 Century Park East,
  Suite 1400

  
	
  Palos Verdes Estates, CA
  90274

  	
   

  	
  Los Angeles, CA 90067

  
	
  Telephone:

  	
  (310) 373-9889

  	
   

  	
  Telephone:

  	
  (310) 270-9500

  
	
  Facsimile:

  	
  (310) 373-8036

  	
   

  	
  Facsimile:

  	
  (310) 270-9520

  
	
   

  	
   

  	
   

  
	
  LESSOR’S
  BROKER:

  	
   

  	
  LESSEE’S
  BROKER:

  
	
   

  	
   

  	
   

  
	
  NAI Capital, Inc.

  	
   

  	
  Trammell Crow Company

  
	
   

  	
   

  	
   

  
	
  Attn: 

  	
  Bob Morris, SIOR

  	
   

  	
  Attn: 

  	
  Steve Soloman

  
	
   

  	
  Randy Matusoff, CCIM, SIOR

  	
   

  	
  Address:

  	
  2041 Rosecrans Avenue,
  Suite 300

  
	
  Address:

  	
  970 West 190th Street,
  Suite 100

  	
   

  	
  El Segundo, CA 90245

  
	
  Torrance, CA 90502

  	
   

  	
  Telephone:

  	
  (310) 765-2600

  
	
  Telephone:

  	
  (310) 532-9080

  	
   

  	
  Facsimile:

  	
  (310) 765-2651

  
	
  Facsimile:

  	
  (310) 327-6259

  	
   

  	
   

  
																														

 

	
   

  	
  PAGE 13  OF 13

  	
   

  

 

 

ADDENDUM SUMMARY

STANDARD
MULTI-TENANT OFFICE LEASE - GROSS

	
   

  	
  Dated: 

  	
  February 27, 2006

  	
   

  
	
   

  	
   

  
	
  By and Between (Lessor) 

  	
  Scriba
  Enterprises, Inc., a California corporation

  
	
  (Lessee)  

  	
  1st Century Bank, National
  Association

  
	
   

  	
   

  
	
   

  	
   

  
	
  Address of Premises: 

  	
  1025 West 190th Street,
  Suite 225

  
	
   

  	
  Gardena, CA 90248

  
							

 

 

 

50.      OPTION TO EXTEND

 

51.      RENT ADJUSTMENTS

 

52.      PARKING

 

53.      RENTAL ABATEMENT

 

54.      TENANT IMPROVEMENT ALLOWANCE

 

55.      DIRECTORY BOARD

 

56.      SUITE IDENTITY

 

57.      MONUMENT SIGNAGE

 

58.      HEATING, VENTILATING, AND AIR CONDITIONING

 

59.      PROPERTY MANAGEMENT

 

60.      L ESSEE NOTICES

 

61.      RIGHT TO TERMINATE

 

62.      CONFIDENTIALITY

 

63.      INDEMNIFICATION FOR LEASE PREPARATION

 

PAGE 1 OF 1

 

 

OPTION
TO EXTEND

STANDARD LEASE ADDENDUM

 

	
   

  	
  Dated

  	
   

  	
  February 27, 2006

  
	
   

  	
   

  	
   

  
	
   

  	
  By and Between (Lessor)

  	
  Scriba
  Enterprises, Inc., a California corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By and Between (Lessee)

  	
  1st Century Bank, National
  Association

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address of Premises:

  	
  1025 West 190th Street,
  Suite 225

  
	
   

  	
  Gardena, CA 90248

  
						

 

Paragraph 50             

 

A.    OPTION(S) TO EXTEND:

Lessor hereby grants to
Lessee the option to extend the term of this Lease for one (1) additional three (3) year period(s)
commencing when the prior term expires upon each and all of the following terms
and conditions:

 

(i)  In order to exercise an option to
extend, Lessee must give written notice of such election to Lessor and Lessor
must receive the same at least nine
(9) but not more than twelve (12) months prior to the date
that the option period would commence, time being of the essence. If proper
notification of the exercise of an option is not given and/or received, such
option shall automatically expire.

 

(ii)  The provisions of paragraph 39,
including those relating to Lessee’s Default set forth in paragraph 39.4 of
this Lease, are conditions of this Option.

 

(iii)  Except for the provisions of this Lease
granting an option or options to extend the term, all of the terms and
conditions of this Lease except where specifically modified by this option
shall apply.

 

(iv)  This Option is personal to the original
Lessee, and cannot be assigned or exercised by anyone other than said original
Lessee and only while the original Lessee is in full possession of the Premises
and without the intention of thereafter assigning or subletting.

 

(v)  The monthly
rent for each month of the option period shall be calculated as follows, using
the method(s) indicated below: 

(Check Method(s) to be
Used and Fill in Appropriately)

 

þ    II.    Market Rental Value Adjustment(s) (MRV)

a.      On the beginning of the first (1st) month after completion of the initial
sixty (60) month Lease term the Base Rent shall be adjusted to the “Market
Rental Value” of the property as follows: for comparable office space in the 190th
Street Corridor area.

 

2) Notwithstanding the
foregoing, the new MRV shall not be less than a three percent
(3%) increase over the total the
rent payable for the month immediately preceding the rent adjustment which is the last
month of the initial sixty (60) month Lease term.

 

b.     Upon the establishment of each New Market Rental Value:

 

1) the new MRV will
become the new “Base Rent” for the purpose of calculating any further
Adjustments, and

 

2) the first month of
each Market Rental Value term shall become the new “Base Month” for the purpose
of calculating any further Adjustments.

 

 

RENT
ADJUSTMENT(S)

STANDARD LEASE ADDENDUM

 

 

	
   

  	
  Dated

  	
   

  	
  February 27, 2006

  
	
   

  	
   

  	
   

  
	
   

  	
  By and Between

  	
  (Lessor)

  	
  Scriba
  Enterprises, Inc., a California corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Lessee)

  	
  1st Century Bank, National
  Association

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address of Premises:

  	
  1025 West 190th Street,
  Suite 225

  
	
   

  	
  Gardena, CA 90248

  
							

 

Paragraph 51          

 

A.            RENT ADJUSTMENTS:

The monthly rent for each
month of the adjustment period(s) specified below shall be increased using
the method(s) indicated below: (Check Method(s) to be Used and Fill
in Appropriately)

 

þ    III.   Fixed Rental Adjustment(s) (FRA)

 

The Base Rent shall be
increased to the following amounts on the dates set forth below:

 

	
  On
  (Fill in FRA Adjustment Date(s)):

  	
   

  	
  The
  New Base Rent shall be:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Beginning month thirteen
  (13)

  	
   

  	
   

  	
   

  
	
   

  	
  of the initial Lease term

  	
   

  	
  $5,910.00 per month

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Beginning month
  twenty-five

  	
   

  	
   

  	
   

  
	
   

  	
  (25) of the initial Lease
  term

  	
   

  	
  $6,066.00 per month

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Beginning month
  thirty-seven

  	
   

  	
   

  	
   

  
	
   

  	
  (37) of the initial Lease
  term

  	
   

  	
  $6,222.00 per month

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Beginning month forty-nine

  	
   

  	
   

  	
   

  
	
   

  	
  (49) of the initial Lease
  term

  	
   

  	
  $6,377.00 per month

  	
   

  

 

B.            NOTICE:

Unless specified otherwise
herein, notice of any such adjustments, other than Fixed Rental Adjustments,
shall be made as specified in paragraph 23 of the Lease.

 

C.            BROKER’S FEE:

The Brokers shall be paid a
Brokerage Fee for each adjustment specified above in accordance with paragraph
15 of the Lease.

 

 

ADDENDUM

TO
STANDARD MULTI-TENANT OFFICE LEASE - GROSS

 

	
  Date:

  	
  February 27, 2006

  
	
   

  	
   

  
	
  By and Between (Lessor)

  	
  Scriba
  Enterprises, Inc., a California corporation

  
	
  (Lessee)  

  	
  1st Century Bank, National
  Association

  
	
   

  	
   

  
	
   

  	
   

  
	
  Address of Premises:

  	
  1025 West 190th Street,
  Suite 225

  
	
   

  	
  Gardena, CA 90248

  
				

 

THIS ADDENDUM TO STANDARD
MULTI-TENANT OFFICE LEASE-GROSS (“Addendum”) modifies that certain Standard Multi-Tenant
Office Lease-Gross dated February 27, 2006 (“Lease”) by and between Lessor
and Lessee. In the event of any conflict or inconsistency between the terms of
this Addendum and the terms of the Lease, this Addendum shall control.

 

52.           PARKING:

 

Lessee hereby acknowledges
that the eleven (11) unreserved parking space as set forth in Section 1.2 (b) are
to accommodate both Lessee’s employees and its visitors and invitees. In the
event that Lessor, in its reasonable discretion, determines that Lessee’s
visitors and invitees exceed this allotment, then Lessor may at its option
designate certain parking spaces as “ Bank Visitors Only” whereby Lessee shall
instruct its visitors and invitees to park only in these designated spaces. Any
reserved parking spaces for Lessee’s visitors and invitees shall be deducted
from Lessee’s allotment of eleven (11) total parking spaces as set forth in Section 1.2
(b).

 

53.           RENTAL ABATEMENT:

 

Months two (2), three (3) and
four (4) of the initial sixty (60) month Lease term shall be one hundred
percent (100%) abated (free).

 

Months five (5), six (6),
seven (7) and eight (8) of the initial sixty (60) month Lease term
shall be fifty percent (50%) abated (one-half (1/2) rent - $2,955.00).

 

54.           TENANT IMPROVEMENT
ALLOWANCE:

 

The Lessor will provide a
not to exceed tenant improvement allowance of Twenty-two Thousand Dollars
($22,000.00) per the 12-08-05 plan as provided by BOLE Planning &
Design and attached hereto as STANDARD OFFICE LEASE FLOORPLAN.  Lessee
shall have the right to use said allowance for the reimbursement of the cost of
construction, demolition, architectural
fees, and mechanical and electrical engineering costs. Said cash allowance
shall be paid by Lessor to Lessee thirty
(30) days after completion of tenant improvement work. The Lessee shall have
the right to use licensed and bonded contractors of its choice, subject to Lessor’s approval, which shall
not be withheld or delayed.

 

55.           DIRECTORY BOARD:

 

Lessor, at Lessor’s sole
cost and expense, shall furnish up to three (3) one (1) line/building
standard directory strips on the  directory in the lobby of the building.

 

56.           SUITE IDENTITY:

 

Lessor, at Lessor’s sole
cost and expense, shall install building standard suite identity signage
outside Lessee’s entry door  consistent
and compatible with the building’s design, signage, graphics program and city
codes.

 

57.           MONUMENT SIGNAGE:

 

The Lessee, at the Lessee’s
sole cost and expense, shall be entitled to install prominent and appropriate
signage on the  existing
lighted monument sign on 190th Street. The exact location, size, material,
coloring, lettering, and lighting shall be mutually agreed upon by the Lessor and the Lessee and shall be
consistent and compatible with the building’s design, signage, graphics program and city codes.
Lessor will not charge Lessee a monthly fee/rent for the sign space on the monument.

 

58.           HEATING,
VENTILATING, AND AIR CONDITIONING:

 

The Lessor, at the Lessor’s
expense, shall furnish heating, ventilating, and air conditioning Monday
through Friday 7:30 am  to
6:00 pm and hours are subject to change at the Lessor’s discretion. Current
HVAC costs are Sixty Dollars ($60.00) 
per hour and subject to change
due to increased utility costs and at Lessor’s discretion.

 

59.           PROPERTY
MANAGEMENT:

 

The property manager is
located at 35 Malaga Cove Plaza, Palos Verdes Estates, California 90274.
Mail all correspondence  and
rent checks to: Scriba Enterprises, Inc.  

 

60.           LESSEE NOTICES:

 

The Lessee requests all
notices and invoices be sent to 1st Century Bank located at 1875
Century Park East,  Suite 1400,  Los Angeles  , California 90067 ATTN: Jeff Watson.

 

61.           RIGHT TO TERMINATE:

 

Lessee shall have a one (1) time
right to cancel said Lease after the first thirty-six (36) months of occupancy
of the initial  Lease term
by giving Lessor one hundred eighty (180) days prior written notice of its
intention to terminate. Lessee shall pay Lessor upon vacating the premises a Lease Termination Fee equal to
two (2) months rent at the time of cancellation, unamortized tenant improvement costs, and
unamortized Leasing Commissions.

 

62.           CONFIDENTIALITY:

 

This lease is confidential
and is intended only for the benefit of 1st Century Bank, NA. Terms and
conditions of this lease are  not to be discussed or relayed to those not directly associated with
this project, including building tenants, owners, agents, or representatives of competing buildings
and/or projects.

 

63.           INDEMNIFICATION FOR
LEASE PREPARATION:

 

NAI Capital, Inc. has
prepared this Standard Multi-Tenant Office Lease - Gross, Addendum, and all
attachments at the  request
of Lessor and Lessee. Lessor and Lessee agree to indemnify and hold harmless
NAI Capital, Inc. and its respective agents and employees for any liability or loss, including without
limitation, reasonable attorney fees and costs that may be occasioned, as a result of completing these
documents. Lessor and Lessee acknowledge NAI Capital, Inc. has advised
them to have their legal
counsels review this Standard Multi-Tenant Office Lease - Gross, Addendum, and
all attachments.

 

	
   

  	
  Lessor Initials: 

  	
          s/s
  RS              
  

  	
   

  	
  Lessee Initials:

  	
          /s/
  JW

  

 

The parties hereto have
executed this Addendum at the place and on the dates specified above their
respective signatures.

 

	
  By LESSOR:

  	
   

  	
  By LESSEE:

  
	
  Scriba
  Enterprises, Inc. a California corporation

  	
   

  	
  1st Century Bank, National
  Association

  
	
   

  	
   

  	
   

  
	
  Executed at: 

  	
  Los Angeles,
  California  

  	
   

  	
  Executed at: 

  	
  Los Angeles, California

  	
   

  
	
  On:

  	
   

  	
   

  	
  On:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
             /s/
  Ralph Scriba

  	
   

  	
  By:

  	
  /s/ Richard S. Cupp

  	
   

  
	
  Name Printed:

  	
  Ralph Scriba

  	
   

  	
  Name Printed:

  	
  Richard S. Cupp

  	
   

  
	
  Title:

  	
  President

  	
   

  	
  Title: 

  	
  President & Chief
  Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Jeffrey M Watson

  	
   

  
	
   

  	
   

  	
  Name Printed:

  	
  Jeffrey M. Watson

  	
   

  
	
   

  	
   

  	
  Title: 

  	
  EVP/COO

  	
   

  
	
  Address: 

  	
  35 Malaga Cove Plaza

  	
   

  	
  Address:

  	
  1875 Century Park East,
  Suite 1400 

  	
   

  
	
   

  	
  Palos Verdes Estates,
  CA90274

  	
   

  	
   

  	
  Los Angeles, CA 90067

  	
   

  
	
  Telephone:

  	
  (310)

  	
  373-9889

  	
   

  	
  Telephone: 

  	
  (310)

  	
  270-9500

  	
   

  
	
  Facsimile: 

  	
  (310)

  	
  373-8036

  	
   

  	
  Facsimile: 

  	
  (310)

  	
  270-9520

  	
   

  
																						

 

PAGE 1 OF 1

 

RULES
AND REGULATIONS FOR

STANDARD
OFFICE LEASE

 

	
  Dated:

  	
  February 27, 2006

  	
   

  
	
   

  	
   

  
	
  By and Between

  	
  Scriba
  Enterprises, Inc., a California corporation (Lessor) and 1st Century

  	
   

  
	
   

  	
  Bank, National Association
  (Lessee)

  	
   

  
					

 

GENERAL RULES

 

1.     Lessee shall not suffer or permit the obstruction of any Common
Areas, including driveways, walkways and stairways.

2.     Lessor reserves the right to refuse access to any persons Lessor
in good faith judges to be a threat to the safety and reputation of the Project
and its occupants.

3.     Lessee shall not make or permit any noise or odors that annoy or
interfere with other lessees or persons having business within the Project.

4.     Lessee shall not keep animals or birds within the Project, and
shall not bring bicycles, motorcycles or other vehicles into areas not
designated as authorized for same.

5.     Lessee shall not make, suffer or permit litter except in
appropriate receptacles for that purpose.

6.     Lessee shall not alter any lock or install new or additional
locks or bolts.

7.     Lessee shall be responsible for the inappropriate use of any
toilet rooms, plumbing or other utilities. No foreign substances of any kind
are to be inserted therein.

8.     Lessee shall not deface the walls, partitions or other surfaces
of the Premises or Project.

9.     Lessee shall not suffer or permit anything in or around the
Premises or Building that causes excessive vibration or floor loading in any
part of the Project.

10.   Furniture, significant freight and equipment shall be moved into
or out of the building only with the Lessor’s knowledge and consent, and subject
to such reasonable limitations, techniques and timing, as may be designated by
Lessor. Lessee shall be responsible for any damage to the Office Building
Project arising from any such activity.

11.   Lessee shall not employ any service or contractor for services or
work to be performed in the Building, except as approved by Lessor.

12.   Lessor reserves the right to close and lock the Building on
Saturdays, Sundays and Building Holidays. , and on other days, between the hours
of P.M. and A.M. of the following day. If Lessee uses the Premises
during such periods, Lessee shall be responsible for securely locking any doors
it may have opened for entry.

13.   Lessee shall return all keys at the termination of its tenancy and
shall be responsible for the cost of replacing any keys that are lost.

14.   No window coverings, shades or awnings shall be installed or used
by Lessee.

15.   No Lessee, employee or invitee shall go upon the roof of the
Building.

16.   Lessee shall not suffer or permit smoking or carrying of lighted
cigars or cigarettes in areas reasonably designated by Lessor or by applicable governmental
agencies as non-smoking areas.

17.   Lessee shall not use any method of heating or air conditioning
other than as provided by Lessor.

18.   Lessee shall not install, maintain or operate any vending machines
upon the Premises without Lessor’s written consent.

19.   The Premises shall not be used for lodging or manufacturing, cooking
or food preparation with
the exception of reasonable microwave oven use by Lessee’s employees .

20.   Lessee shall comply with all safety, fire protection and
evacuation regulations established by Lessor or any applicable governmental
agency.

21.   Lessor reserves the right to waive any one of these rules or
regulations, and/or as to any particular Lessee, and any such waiver shall not constitute
a waiver of any other rule or regulation or any subsequent application
thereof to such Lessee.

22.   Lessee assumes all risks from theft or vandalism and agrees to
keep its Premises locked as may be required.

23.   Lessor reserves the right to make such other reasonable rules and
regulations as it may from time to time deem necessary for the appropriate
operation and safety of the Project and its occupants. Lessee agrees to abide
by these and such rules and regulations.

 

PARKING
RULES

 

1.     Parking areas shall be used only for parking by vehicles no
longer than full size, passenger automobiles herein called “Permitted Size Vehicles.”
Vehicles other than Permitted Size Vehicles are herein referred to as “Oversized
Vehicles.”

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

3.     Parking stickers or identification devices shall be the property
of Lessor and be returned to Lessor by the holder thereof upon termination of the
holder’s parking privileges. Lessee will pay such replacement charge as is
reasonably established by Lessor for the loss of such devices.

4.     Lessor reserves the right to refuse the sale of monthly
identification devices to any person or entity that willfully refuses to comply
with the applicable rules, regulations, laws and/or agreements.

5.     Lessor reserves the right to relocate all or a part of parking
spaces from floor to floor, within one floor, and/or to reasonably adjacent
offsite location(s), and to reasonably allocate them between compact and
standard size spaces, as long as the same complies with applicable laws,
ordinances and regulations.

6.     Users of the parking area will obey all posted signs and park
only in the areas designated for vehicle parking.

7.     Unless otherwise instructed, every person using the parking area
is required to park and lock his own vehicle. Lessor will not be responsible for
any damage to vehicles, injury to persons or loss of property, all of which
risks are assumed by the party using the parking area.

8.     Validation, if established, will be permissible only by such
method or methods as Lessor and/or its licensee may establish at rates
generally applicable to visitor parking.

9.     The maintenance, washing, waxing or cleaning of vehicles in the
parking structure or Common Areas is prohibited.

10.   Lessee shall be responsible for seeing that all of its employees,
agents and invitees comply with the applicable parking rules, regulations, laws
and agreements.

11.   Lessor reserves the right to modify these rules and/or adopt
such other reasonable and non-discriminatory rules and regulations as it
may deem necessary for the proper operation of the parking area.

12.   Such parking use as is herein provided is
intended merely as a license only and no bailment is intended or shall be
created hereby.

PAGE 1 OF 1

 

STANDARD OFFICE
LEASE FLOOR PLAN

 

 

[Floor plan]Exhibit 10.3

 

LEASE AMENDMENT #1

 

This Lease
Amendment #1 (“Amendment”) dated , June 9, 2006 is by and between 1875/1925
CENTURY PARK EAST COMPANY, a California general partnership (“Landlord”), and 1ST
CENTURY BANK, N.A. (“Tenant”).

 

RECITALS

 

WHEREAS, 1875/1925
CENTURY PARK EAST COMPANY, a California general partnership, as Landlord, and 1ST
CENTURY BANK, N.A., as Tenant, entered into that certain lease agreement dated
November 5, 2003 (the “Lease”), wherein there was demised to Tenant by
Landlord the Premises consisting of:  1)
Premises A, known as Suite D, consisting of 3,626 rentable square feet
(3,158 usable square feet) on the ground floor of the building situated at 1875
Century Park East, Los Angeles, California; and 2) Premises B, known as
Suite 1400, consisting of 9,316 rentable square feet (8,108 usable square
feet) on the 14th floor of the building situated at 1875 Century
Park East, Los Angeles, California for a term of approximately ten
(10) years commencing June 2, 2004 and terminating June 30,
2014; and

 

WHEREAS,
Landlord and Tenant desire to amend the Lease to provide for changes and
modifications as mutually agreed upon effective June 1, 2006; and

 

NOW,
THEREFORE, in consideration of the terms, covenants, conditions and agreements
set forth in the Lease and in this Amendment, the parties hereto agree as
follows:

 

1.                                       That the
Rentable Area of Premises B as set forth under Paragraphs A(1) and 1.4 of
the Lease shall be increased by 3,142 rentable square feet (“Additional
Premises”) shown crosshatched on the plan marked Exhibit “A-1” attached
hereto and made a part hereof, 

 

1

 

thereby increasing the total rentable area of Premises B from 9,316
rentable square feet to 12,458 rentable square feet.  The usable area of Premises B shall be
increased by 2,735 usable square feet from 8,108 usable square feet to 10,843
usable square feet.

 

The Rentable
Area of Premises A shall remain the same.

 

2.                                       That
the following Rental schedule shall be applicable during the Lease periods
shown below and such figures shall be read in Paragraphs A(3), 3.1 and 3.2 of
the Lease during the applicable Lease periods.

 

	
  Lease Period

  	
   

  	
  Annual Rental

  	
   

  	
  Monthly Rental

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  June 1, 2006 – August 31, 2006

  	
   

  	
  $

  	
  375,282.00

  	
   

  	
  $

  	
  31,273.50

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  September 1, 2006 – December 31,
  2006

  	
   

  	
  $

  	
  455,312.40

  	
   

  	
  $

  	
  37,942.70

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2007 – August 31, 2007

  	
   

  	
  $

  	
  478,613.40

  	
   

  	
  $

  	
  39,884.45

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  September 1, 2007 – August 31,
  2008

  	
   

  	
  $

  	
  481,629.72

  	
   

  	
  $

  	
  40,135.81

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  September 1, 2008 – June 30, 2009

  	
   

  	
  $

  	
  484,646.04

  	
   

  	
  $

  	
  40,387.17

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  July 1, 2009 – August 31, 2009

  	
   

  	
  $

  	
  500,180.04

  	
   

  	
  $

  	
  41,681.67

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  September 1, 2009 – August 31,
  2010

  	
   

  	
  $

  	
  503,196.36

  	
   

  	
  $

  	
  41,933.03

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  September 1, 2010 – August 31,
  2011

  	
   

  	
  $

  	
  506,589.72

  	
   

  	
  $

  	
  42,215.81

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  September 1, 2011 – December 31,
  2011

  	
   

  	
  $

  	
  509,606.04

  	
   

  	
  $

  	
  42,467.17

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2012 – August 31, 2012

  	
   

  	
  $

  	
  532,907.04

  	
   

  	
  $

  	
  44,408.92

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  September 1, 2012 – August 31,
  2013

  	
   

  	
  $

  	
  536,300.40

  	
   

  	
  $

  	
  44,691.70

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  September 1, 2013 – June 30, 2014

  	
   

  	
  $

  	
  540,070.80

  	
   

  	
  $

  	
  45,005.90

  	
   

  

 

3.                                       That
the Base Year as set forth in Paragraph A(5) of the Lease for the
Additional Premises portion of Premises B only shall be the calendar year 2006.

 

4.                                       That
Lessee’s Proportionate Share of the excess Building Operating Costs as set
forth under Paragraph A(4) of the Lease shall be increased by 0.36605%
from 1.08516% to 1.45121%.

 

2

 

5.                                       That
the Security Deposit as set forth in Paragraphs A(6) and 5 of the Lease
shall be increased by $10,054.40 from $34,951.50 to $44,005.90.

 

6.                                       That
reference to “Julien J. Studley” in Paragraph 37.5 of the Lease shall be
deleted and “None” shall be inserted.

 

7.                                       That
Exhibit “A-1” of the Lease shall be deleted and Exhibit “A-1”
attached hereto shall be added.

 

8.                                       That
Tenant accepts the Additional Premises in their “as is” condition, except
Landlord shall provide Tenant with an allowance of $62,840.00 (“Allowance”) for
Landlord-approved permanent Tenant Improvements to the Additional
Premises.  All Tenant Improvements shall
be made in accordance with Exhibit “C” and Paragraph 7 of the Lease.

 

9.                                       That
the number “39” as set forth in Paragraph A(10) and Exhibit “G” of
the Lease shall be deleted and the number “48” shall be inserted.

 

10.                                 That
this Amendment shall be read with and construed with the aforesaid Lease and
all of the terms, covenants, conditions, agreements and limitations set forth
in the Lease except as specifically mentioned herein, shall remain and be in
full force and effect.  In the event a
conflict exists between the terms and conditions of this Amendment and the
terms and conditions of the Lease, the terms and conditions of this Amendment
shall control.

 

3

 

IN WITNESS
WHEREOF the parties have executed this Amendment the day and year first above
written.

 

“TENANT”

 

1ST CENTURY BANK, N.A.

 

 

	
  By:

  	
  /s/ Richard S. Cupp

  	
   

  
	
   

  	
   

  
	
  Print Name:

  	
  Richard S. Cupp

  	
   

  
	
   

  	
   

  
	
  Its:

  	
  President & CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Print Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  
								

 

“LANDLORD”

 

1875/1925 CENTURY PARK EAST COMPANY,

a California general partnership

 

	
  By:

  	
  WP Twin Towers, Inc.,

  	
   

  
	
   

  	
  a California corporation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Nadine Watt

  	
   

  
	
   

  	
   

  	
  Nadine Watt, President

  	
   

  

 

4

 

EXHIBIT
“A-1”

 

	
  Additional Premises

  	
   

  	
  Expansion Area

  

 

 

“Floorplan”

 

 

WATT
PLAZA

1875 CENTURY PARK EAST

Suite 1400

 

 

1st Century Bank, N.A.

 

 12,458 rentable square feet

(10,843 usable square feet)

 

 

5

 

WATT PLAZA

OFFICE SUBLEASE

 

1.                                       PARTIES:

 

                                                This
Sublease is entered into as of the 1ST day of JUNE, 2006 by and between  1ST CENTURY BANK, N.A, (“Sublessor”),
and SPORTS BUSINESS VENTURES, (“Sublessee”), with reference to the following:

 

                                                Sublessor
as Lessee/Tenant, and 1875/1925 CENTURY PARK EAST COMPANY, a California general
partnership, as Lessor/Landlord, entered into a Lease Agreement dated November 5,
2003. [The Lease Agreement was subsequently amended by Amendment #1 between
Lessee/Tenant and Lessor/Landlord dated June 1, The Lease Agreement
[Amendment #1] shall hereinafter, collectively, be known as the “Master Lease”,

 

2.                                       PROVISIONS
CONSTITUTING SUBLEASE:

 

                                                This
Sublease shall be of no force and effect unless and until the Lessor/Landlord
under the Master Lease shall grant its consent in writing thereto and this
Sublease is subject to all of the terms and conditions of the Master Lease
except as specifically exempted herein and Sublessee shall assume and perform
the obligations of Sublessor as Lessee/Tenant in said Master Lease to the
extent said terms and conditions are applicable to the Premises subleased
pursuant to this Sublease.  Sublessee
shall not commit or permit to be committed on the subleased Premises any act or
omission which shall violate any term or condition of the Master Lease.  In the event of the termination of Sublessor’s
interest as Lessee/Tenant under the Master Lease for any reason, then 

 

 

this Sublease shall terminate coincidentally therewith without any
liability of Sublessor to Sublessee.  All
of the terms and conditions contained in the Master Lease are incorporated
herein except in paragraph 12 as terms and conditions of this Sublease (with
each reference therein to Lessor/Landlord and Lessee/Tenant to be deemed to refer
to Sublessor and Sublessee) and along with all of the following paragraphs set
out in this Sublease, shall be the complete terms and conditions of this
Sublease.  In cases of any conflicts
between the terms of this Sublease and the terms of the Master Lease, the terms
of the Master Lease shall prevail.

 

3.                                       PREMISES:

 

                                                Sublessor
leases to Sublessee and Sublessee leases from Sublessor, but not by way of
assignment, those certain Premises constituting a portion of the 14th
floor and containing approximately 3,142 square feet, designated as Suite 1460,
in the building located at 1875 Century Park East, Los Angeles, California
90067 (“Premises”).  Sublessee agrees to
accept the Premises in an “as is” condition and Sublessor shall not be required
to perform any work in the Premises at its expense unless otherwise herein
provided.

 

4.                                       TERM:

 

                        4a.  The term of this Sublease shall be for a
period commencing on JUNE 1, 2006, (“Commencement Date”), and will continue on
a MONTH TO MONTH  basis.

 

                                                4b.  Notwithstanding said Commencement Date, if
for any reason Sublessor cannot deliver possession of the Premises to Sublessee
on said date, Sublessor shall not be subject to 

 

6

 

any liability therefore, nor shall such failure affect the validity of
this Sublease or the obligations of Sublessee hereunder or extend the term
hereof, but in such case Sublessee shall not be obligated to pay rent until
possession of the Premises is tendered to Sublessee; provided, however, that if
Sublessor shall not have delivered possession of the Premises within ninety
(90) days from said Commencement Date, Sublessee may, at Sublessee’s option, by
notice in writing to Sublessor within ten (10) days thereafter, cancel
this Sublease.  If this Sublease is
cancelled as herein provided, Sublessor shall return any monies previously
deposited by Sublessee and the parties shall be discharged from all obligations
hereunder.

 

                                                4c.  In the event that Sublessor shall permit
Sublessee to occupy the Premises prior to the Commencement Date of the term,
such occupancy shall be subject to all of the provisions of this Sublease.  Said early possession shall not advance the
termination date of this Sublease.

 

5.                                       RENT:

 

                                                5a.  BASIC RENT:  Sublessee shall pay to Sublessor as basic
rent for the Premises an equal monthly installment of TWO THOUSAND AND 00/100
DOLLARS ($2,000.00), in advance, on the first day of each month of the term
hereof.

 

                                                Rent
for any period during the term hereof which is for less than one month shall be
a pro rata portion of the monthly installment. 
Rent shall be payable without notice or demand and without any
deduction, offset, or abatement in lawful money of the United States of America
to Sublessor at the address stated herein or to such other person or at such
other places as Sublessor may designate in writing.

 

                                                5b.  RENT ADJUSTMENT: Sublessee shall pay
to Sublessor as additional rent as negotiated on a mutually agreeable basis as
requested by Sublessor.

 

7

 

6.                                       SECURITY
DEPOSIT:

 

                                                Sublessee
shall deposit with Sublessor upon execution hereof the sum of ZERO DOLLARS ($0)
as Security Deposit for Sublessee’s faithful performance of Sublessee’s
obligations hereunder.  If Sublessee
fails to pay rent or other charges due hereunder, or otherwise defaults with
respect to any provision of this Sublease, Sublessor may use, apply or retain
all or any portion of said deposit for the payment of any rent or other charge
in default or for the payment of any other sum to which Sublessor may become
obligated by reason of Sublessee’s default, or to compensate Sublessor for any
loss or damage which Sublessor may suffer thereby.  If Sublessor so uses or applies all or any
portion of said deposit, Sublessee shall within ten (10) days after
written demand deposit cash with Sublessor in an amount sufficient to restore
said deposit to the full amount hereinabove stated and Sublessee’s failure to
do so shall be a breach of the Sublease, and Sublessor may at its option
terminate this Sublease.  Sublessor shall
not be required to keep said deposit separate from its general accounts. Within
ten (10) days after the expiration of the term hereof, on condition
Sublessee has vacated the Premises and has fully and faithfully performed every
provision of this Sublease to be performed by it, the security deposit or any
balance thereof shall be returned to Sublessee (or, at Sublessor’s option, to
the last assignee, if any, of Sublessee’s interest hereunder) provided however
that Sublessor may retain one-half of the security deposit until such time as
any amount due from Sublessee in accordance with the rental adjustment
provision of this Sublease  has been
determined and paid in full.

 

8

 

7.                                       PARKING:

 

                                                Sublessor
hereby grants to Sublessee for its own use its ZERO (0) unassigned parking
spaces in the Building of which the Premises form a part, which Sublessee may
rent at parking rates as charged by the parking garage operator and subject to
the parking agreement of the Master Lease.

 

8.                                       USE:

 

The Premises shall be used and
occupied only as executive offices for general purposes.

 

9.                                       DEFAULT:

 

                                                In
the event of default by Sublessee of the payment of rents or in the performance
of any other terms and conditions of this Sublease, Sublessor shall have, in
addition to whatever other rights and remedies it may have at law or in equity,
the same rights and remedies against Sublessee as the Lessor has against
Sublessor as Lessee under the Master Lease.

 

10.                                 ASSIGNMENT
AND SUBLETTING:

 

Neither Sublessee nor Sublessor shall assign
this Sublease or any interest therein or further sublet any portion of the
Premises or any right or privilege appurtenant thereto without the prior
written consent of Lessor/Landlord first had and obtained.

 

11.                                 NOTICE:

 

                                                Any
notice required and permitted to be given hereunder must be in writing and may
be given by personal delivery or by mail, and if given by mail shall be deemed
sufficiently given if 

 

9

 

sent by registered or certified mail addressed to Sublessee at the
Premises or served upon Sublessee or its representative at the Premises, and
Sublessor 1875 CENTURY PARK EAST, SUITE 1400, LOS ANGELES, CA 90067.  Either party may by written notice to the
other specify a different address for notice purposes except that the Sublessor
may in any event use the Premises as Sublessee’s address for notice purposes.

 

 

	
  “SUBLESSEE”

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
  1ST CENTURY BANK, N.A.

  	
   

  	
  1875 CENTURY PARK EAST, 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SUITE 1400

  
	
   

  	
   

  	
   

  
	
  By:

  	
       /S/ RICHARD S. CUPP

  	
   

  	
  LOS ANGELES, CA 90067

  
	
   

  	
   

  	
   

  	
   

  
	
  Print Name: Richard S. Cupp

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Its:   President & CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “SUBLESSOR”

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
  SPORTS BUSINESS VENTURES

  	
   

  	
  1875 CENTURY PARK EAST, 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SUITE 1400

  
	
   

  	
   

  	
   

  
	
  By: 

  	
         /S/ JEFF MARKS

  	
   

  	
  LOS ANGELES, CA 90067

  
	
   

  	
   

  	
   

  	
   

  
	
  Its:   Managing Director

  	
   

  	
   

  
					

 

10

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