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EXHIBIT 10.13    
  

 
 

Office Lease Between American Brewing Company, Ltd. and
  Pacific Crest Bank, dated October 17, 2000
  (San Diego SBA Loan Production Office)    
  

 
 
 

[LOGO]
STANDARD MULTI-TENANT OFFICE LEASE—GROSS
  AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION    

1.  Basic Provisions ("Basic Provisions").  

1.1  Parties:  This Lease ("Lease"), dated for reference purposes only,
October 17, 2000, is made by and between American Brewing Company, LTD., a Hawaii Corporation ("Lessor") and Pacific Crest Bank, a California State
Chartered Commercial Bank ("Lessee"), (collectively the "Parties," or individually a
"Party"). 

1.2(a)  Premises:  That certain portion of the Project (as defined below), known as Suite Number(s) 320,
         floor(s), consisting of approximately 3,176 rentable square feet and approximately 2,836 useable square feet
("Premises"). The Premises are located at: 1550 Hotel Circle North, #320, in the City of San Diego, County of San Diego, State of California, with zip
code 92108. 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 66,140
rentable square feet. (Also see Paragraph 2.) 

1.2(b)  Parking:  12 unreserved and 0 reserved vehicle parking spaces at a monthly cost of $0 per unreserved space and $0
per reserved space. (See Paragraph 2.6.) 

1.3  Term:  three (3) years and one-half (1/2) months ("Original Term")
commencing November 15, 2000 ("Commencement Date") and ending November 30, 2003 ("Expiration Date").
(See also Paragraph 3.) 

1.4  Early Possession:  N/A ("Early Possession Date"). (See also
Paragraphs 3.2 and 3.3.) 

1.5  Base Rent:  $5,558.00 per month ("Base Rent"), payable on the 1st day
of each month commencing November 15, 2000. (See also Paragraph 4.) 

	/
	/  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 point eight percent (4.8%) ("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: $5,558.00 for the first months rent. 

    (b) Security Deposit: $5,875.60 ("Security Deposit"). (See also
Paragraph 5) 

    (c) Parking: $0 for the period 0. 

    (d) Other: $0 for             . 

    (e) Total Due Upon Execution of this Lease: $11,433.60. 

1.8  Agreed Use:  administrative office of bank, financial institution, or general office. (See also Paragraph 6) 

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1.9  Base Year; Insuring Party.  The Base Year is 2001. 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): 

	/x/
	Grub
& Ellis Company represents Lessor exclusively ("Lessor's Broker");

	/x/
	San
Diego Commercial Real Estate represents Lessee exclusively ("Lessee's Broker"); or

	/
	/              
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 said Brokers the
brokerage fee agreed to in a separate written agreement (or if there is no such agreement, the sum of per separate agreement of ____% of the total Base Rent for brokerage services rendered by said
Brokers). 

1.11  Guarantor.  The obligations of the Lessee under this Lease shall be guaranteed by N/A
("Guarantor"). (See also Paragraph 37.) 

1.12  Business Hours for the Building:  7:00 a.m. to 6:00 p.m., Mondays through Fridays (except Building Holidays) and
8:00 a.m. to 12:00 p.m. on Saturdays (except Building Holidays). "Building Holidays" shall mean the dates of observation of New Year's Day, President's
Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day, and N/A. 

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

	/
	/  Janitorial
Services

	/
	/  Electricity

	/
	/  Other
(specify):________________________________________________ 

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

	/x/
	an
Addendum described as Exhibit "A"

	/
	/  a
plot plan depicting the Premises;

	/x/
	a
current set of the Rules and Regulations;

	/
	/  a
Work Letter;

	/
	/  a
janitorial schedule;

	/
	/  other
(specify):________________________________________________

	____________________________________________________________
	

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 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.  

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 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. 

2.3  Compliance.  Lessor warrants that any improvements compromising the Premises and the Common Area 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. 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 

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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 of the Premises then, and in that event,
Lessee shall be fully responsible for the cost thereof, and Lessee shall not have any right to terminate this Lease. 

2.4  Acknowledgements.  Lessee hereby 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. 

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 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 non-exclusive right to use, in common with others entitled to such use, the Common Areas as they exist from
time to time, subject to any rights, powers, and privileges reserved by Lessor under the terms hereof or under the terms of any 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. 

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   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 to cause its employees,
suppliers, shippers, customers, contractors and invitees to so abide and conform. Lessor shall not be responsible to Lessee for the non-compliance with said Rules and Regulations by other 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; see Exhibit "A" 

    (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, however, be in effect during such period. Any such early possession shall not affect the Expiration Date. 

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 business days after the end of such 60 day period, cancel this Lease, in which event the
Parties shall be discharged 

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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. *See Exhibit "A" 

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; 

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    (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 Expenditure 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 Expenditure 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 the
same or some of them. 

    (f)  Lessee's
Share of Operating Expense Increase shall be payable by Lessee within 30 days after a reasonably detailed statement of actual expenses is presented to
Lessee by Lessor. At Lessor's option, however, an amount may be estimated by Lessor from time to time in advance of Lessee's Share of the Operating Expense Increase for any Comparison Year, and the
same shall be payable monthly during each Comparison Year of the Lease term, on the same day as the Base Rent is due hereunder. In the event that Lessee pays Lessor's estimate of Lessee's Share of
Operating Expense Increase as aforesaid, Lessor shall deliver to Lessee within 90 days after the expiration of each Comparison Year a reasonably detailed statement showing Lessee's Share of the actual
Operating Expense Increase incurred during such year. If Lessee's payments under this paragraph (f) during said Comparison Year exceed Lessee's Share as indicated on said statement, Lessee shall be
entitled to credit the amount of such overpayment against Lessee's Share of Operating Expense Increase next falling due. If Lessee's payments under this paragraph during said Comparison Year were less
than Lessee's Share as indicated on said statement, Lessee shall pay to Lessor the amount of the deficiency within 30 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 within 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. 

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    (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). 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. Payments will be applied first to accrued late charges and attorney's fees, second to accrued interest, then to Base Rent and Operating Expense Increase, 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. 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. 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 

8

 

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 

9

 

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. *See Exhibit "A" 

    (f)  Investigations and Remediations. Lessor shall retain the responsibility and pay for any investigations or
remediation measures required by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises 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
90 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 

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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. 

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, 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. 

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. 

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, plumbing in or on
the 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). 

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    (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 as built 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. 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. 

    (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 migration from areas outside of the Project) even if such removal 

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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. 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 costs 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, an "Additional Insured-Managers or Lessors of Premises Endorsement" and contain the "Amendment of the Pollution Exclusion Endorsement" for 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. All insurance carried by Lessee 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 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 Alternations 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 

13

 

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 as Lessee deems adequate for its business purposes. 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
Lessee deems adequate for its business purposes. 

    (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 B+, V, 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 10 days prior to the expiration of such policies, furnish Lessor with evidence of renewals or "insurance
binders" evidencing renewal thereof, or Lessor may order such insurance and charge the cost thereof to Lessee,
which amount shall be payable by Lessee to Lessor upon demand. Such policies shall be for a term of at least one year, or the length of the remaining term of this Lease, whichever is less. If either
Party shall fail to procure and maintain the insurance required to be carried by it, the other Party may, but shall not be required to, procure and maintain the same. 

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 

14

 

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 noticed 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 from Liability.  Lessor shall not be liable for 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, 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. Lessor shall not be liable for
any damages arising from any act or neglect of any other tenant of Lessor nor from the failure of Lessor to enforce the provisions of any other lease in the Project. Notwithstanding Lessor's
negligence or breach of this Lease, Lessor shall under no circumstances be liable for injury to Lessee's business or for any loss of income or profit therefrom. 

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. 

15

 

    (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. Notwithstanding the foregoing, if the required insurance was not in force or the insurance proceeds are not sufficient to effect such repair, the Issuing 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 

16

 

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 

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, 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 or any portion thereof or a
change in the improvements thereon. 

17

   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 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. 

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  Lessee's 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 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 

18

 

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.  "See Exhibit "A" 

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 agreement
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. 

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. 

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    (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. 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 or entering into such sublease, 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. 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 such 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 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. 

20

 

    (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. 

13. Default; Breach; Remedies.  

13.1  Default; Breach.  A "Default" is defined as a failure by 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 by 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
failure by Lessee to provide (i) reasonable written evidence of compliance with Applicable Requirements, (ii) the service contracts,
(iii) the recission 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 (easements), or (viii) 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. 

    (d) 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. 

    (e) 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 (e) is contrary to any applicable law, such provision shall be of no force
or effect, and not affect the validity of the remaining provisions. 

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

    (g) 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 

21

 

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. The costs and expenses of any such performance by Lessor shall be due and payable by Lessee upon receipt of invoice therefor.
If any check given to Lessor by Lessee shall not be honored by the bank upon which it is drawn, Lessor, at its option, may require all future payments to be made by Lessee to be by cashier's check. 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 the 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 

22

 

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 10 days after such amount shall be due, then, without any requirement for notice to Lessee,
Lessee shall 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 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, 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. 

23

 
    (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. 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 30 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.  

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. In addition, Lessee's Broker shall be deemed to be a third party beneficiary of any commission agreement entered into 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 

24

 

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 business 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 American Industrial 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 business 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 encumbrances 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 any 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 thereof. 

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, 

25

 

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, 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 transmitted to such party or parties at such addresses as Lessor may from time to time hereafter 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. Notices delivered by United States Express Mail or overnight courier that guarantees next day
delivery shall be deemed given 24 hours after delivery of the same to the Postal Service or courier. 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 any other term, covenant or condition hereof. Lessor's consent to, or
approval of, any such 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 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 

26

 

not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties as 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 as 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 liability (including court costs and attorneys' fees), of any
Broker with respect to any breach of duty, error or omission relating to this Lease 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. 

27

 

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 the Lease is subordinated (i) Lessee shall, subject to the nondisturbance 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 such new owner,
this Lease shall automatically become a new Lease between Lessee and such new owner, upon all of the terms and conditions hereof, for the remainder of the term hereof, and (ii) Lessor shall
thereafter be relieved of any further obligations hereunder and such new owner shall assume all of Lessor's obligations hereunder, 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, or (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 senior lien mortgages, ground leases, deeds of trust or other now existing or
subsequent liens entered into by and between Landlord and any Lender or beneficiary of any deed of trust or other such lien granted by Landlord (collectively referred to as "Landlord's Mortgagee"),
Landlord shall make its best effort to secure and deliver to Tenant a non-disturbance agreement from, and executed by, Landlord's Mortgagee for the benefit of Tenant. 

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 Premises, Lessee and Lessor shall execute such further
writings as may be reasonably required to separately document any such 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 found in tort,
contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such
fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The term "Prevailing
Party" shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement,
judgment, or the abandonment by the other Party or Broker of its claim or defense. The attorneys' fees award shall not be computed in accordance with any court fee schedule, but shall be such as to
fully reimburse all attorneys' fees reasonably incurred. In addition, Lessor shall be entitled to attorneys' fees, costs and expenses incurred in the preparation and 

28

 

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 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 to Lessee's use of the Premises. All such activities shall be without abatement of rent or liability to Lessee. Lessor may at any time place on
the Premises any ordinary "For Sale" signs and Lessor may during the last 6 months of the term hereof place on the Premises any ordinary
"For Lease" signs. In addition, Lessor shall have the right to retain keys to the Premises and to unlock all doors in or upon the Premises other than to
files, vaults and safes, and in the case of emergency to enter the Premises by any reasonably appropriate means, and any such entity shall not be deemed a forcible or unlawful entry or detainer of the
Premises or an eviction. Lessee waives any charges, damages or injuries or interference with Lessee's property or businesses connection therewith. 

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.  Lessee shall not place any sign upon the Project without Lessor's prior written consent. 

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. 

29

   37.  Guarantor.  

37.1  Execution.  The Guarantors, if any, shall each execute a guaranty in the form most recently published by the
American Industrial 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. 

30

 

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. 

    (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. 

43.  Authority.  

    (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. 

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. 

31

 

47.  Multiple Parties.  If more than one person or entity is named herein as either Lessor or Lessee, such multiple
Parties shall have joint and several responsibility to comply with the terms of this Lease. 

48.  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.  

 49.  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 / / is /X/ is not attached to this Lease. 

50.  Americans with Disabilities Act.  In the event that as a result of Lessee's use, or intended use, of the Premises the
Americans with Disabilities Act or any similar law requires modifications or the construction or installation of improvements in or to the Premises, Building, Project and/or Common Areas, the Parties
agree that such modifications, construction or improvements shall be made at: / / Lessor's expense /X/ Lessee's expense. Any ADA issues or conditions that are not a result of Lessee's use or intended
use shall be at Lessor's sole cost. 

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 AMERICAN INDUSTRIAL 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. 

32

 

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

	Executed at: Honolulu, Hi.	 	Executed at: Agoura Hills, CA
	on: November 2, 2000	 	on: October 26, 2000
	

By LESSOR:	
 	

By LESSEE:
	American Brewing Company, a Hawaii Corporation	 	Pacific Crest Bank, a California State Chartered Commercial Bank
	

By: /s/ Randall Chun	
 	

By: /s/ Gonzalo Fernandez
	Name Printed: Randall Chun	 	Name Printed: Gonzalo Fernandez
	Title: President	 	Title: Executive Vice President
	

By:	
 	

By:
	Name Printed:	 	Name Printed:
	Title:	 	Title:
	Address:	 	Address: 30343 Canwood Street

               Suite 100

               Agoura Hills, CA 91301
	 	 	(818)865-3240 / (818)865-3262
	Telephone / Facsimile No.	 	Telephone / Facsimile No.
	Federal ID No.	 	Federal ID No. 95-2891733
	
LESSOR'S

BROKER:	
 	

LESSOR'S

BROKER:
	Grubb & Ellis Company	 	San Diego Commercial
	Attn: Don Agan / Jack Kruger	 	Attn: Chip Rome
	Address: 8880 Rio San Diego Drive

Suite 200

San Diego, CA 92108

619-297-5500/619-298-6897	 	Address: 1565 Hotel Circle South

Suite 390

San Diego, CA 92108

619-497-2255/619-497-2265
	Telephone / Facsimile	 	Telephone / Facsimile

These forms are often modified to meet changing requirements of law and needs of the industry. Always write or call to make sure you are utilizing the most
current form: American Industrial Real Estate Association, 700 South Flower Street, Suite 600, Los Angeles, CA 90017. (213) 687-8777

©Copyright 1999-By American Industrial Real Estate Association.

All rights reserved.

No part of these works may be reproduced in any form without permission in writing. DA/AmBrew-PacCr NT Lease GR-2  

	                        	 	                        
	

 	
 	

[ILLEGIBLE]
	                        	 	                        
	Initials	 	Initials
	

© 1999 - American Industrial Real Estate Association	
 	

FORM OFG-1-9/99E

33

 
 

RULES AND REGULATIONS FOR
  STANDARD OFFICE LEASE
  [LOGO]    
  

Dated:
October 17, 2000 

By
and Between American Brewing Company, a Hawaii Corporation, as Lessor, and Pacific Crest Bank, a California State Chartered Commercial Bank, as 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 6:00 P.M. and 7:00 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. Lessee shall be permitted use of microwave oven, refrigerator, and
standard coffee service supplies. 

    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. 

	                        	 	                        
	

 	
 	

[ILLEGIBLE]
	                        	 	                        
	Initials	 	Initials

 
 

EXHIBIT "A"    
  

ADDENDUM
TO LEASE DATED OCTOBER 17, 2000 BY AND BETWEEN AMERICAN BREWING COMPANY, LTD., A HAWAII CORPORATION, AS LESSOR, AND PACIFIC CREST BANK, AS LESSEE. 

Paragraph 1.5 Base Rent:  

This
paragraph shall read to also include the following: 

Base Rent: The monthly Base Rental Rate schedule shall be as follows: 

	Months 1 - 12:	 	$5,558.00
	Months 13 - 24:	 	$5,716.80
	Months 25 - 36:	 	$5,875.60

Paragraph 2.10(d) Premises — Common Area Changes:  

This
paragraph shall also read to include the following: 

"Lessee's
percentage share as per Paragraph 1.6 to be amended to reflect change as appropriate." 

Paragraph 3.3 Term — Delay in Possession:  

This
paragraph shall read to also include the following: 

"If
pursuant to this Paragraph, the possession of the Premises is not delivered to Lessee, all funds advanced by Lessee to Lessor, including but not limited to those funds in Paragraph 1.7
shall be returned to Lessee within 10 days of termination of lease, subject to Paragraph 3.4." 

Paragraph 6.2(e) Use — Hazardous Substance — Lessor Indemnification:  

This
paragraph shall read to also include the following: 

"Lessor
shall indemnify, defend and hold Lessee, its agents, employees, 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 Lessor, or any third party. Lessor'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 Lessor, and the cost of investigation, removal, remediation, restoration and/or
abatement, and shall survive the expiration or termination of the 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 in writing by Lessee at the time of such agreement." 

Paragraph 12 — Assignment and Subletting:  

Wherever
Lessor's consent is required under this paragraph, Lessor's consent shall not be unreasonably withheld or delayed. 

Other
Terms and Conditions: 

	1.
	Janitorial:  Original
Lease language notwithstanding Lessor, at Lessor's expense, shall clean Lessee's Premises five (5) days a week, nationally recognized holidays
excepted. The janitor vendor shall be bonded for a minimum $250,000.00 and have liability insurance of $1,000,000.00 per occurrence/$2,000,000 aggregate. 
	2.
	Operating
Expenses:  Original Lease language notwithstanding Building Operating Expenses shall be calculated using the Base Year method. The Base Year shall be
calendar year 2001, and shall be grossed up to reflect 95% occupancy, and the building being fully assessed for tax purposes. Operating Expenses passthroughs shall be capped at five percent
(5%) annually on a non-cumulative basis. 

	3.
	Option
to Renew:  Lessee shall have one (1) three (3) year option to renew this lease at the then current market rate for the project, but not less than
the rent for the last month of the initial lease term. Lessee shall give Lessor six (6) months prior written notice, and shall have thirty (30) days to negotiate and agree to lease terms
with Lessor for the extension. If no agreement is reached within thirty (30) days, this Option shall become null and void. 
	4.
	First
Right of Refusal:  Lessee may have a one (1) time right of first refusal subject to prior existing first rights of refusal held by current tenants.
Lessee, upon written notification by Lessor, shall have five (5) business days to exercise said first right. If Lessee does not exercise its right, the first right of refusal shall become null
and void and have no further effect. 
	5.
	Tenant
Improvements:  Lessor shall provide, at its sole cost, the Premises satisfactory for Lessee to operate its business. Tenant Improvements, upon completion,
shall be turnkey and satisfactory to Lessee. Tenant Improvements shall include Lessee's choice of building standard carpet, tile and paint,
as well as removal of the existing reception desk. Lessor agrees that all work shall be done in a workmanlike manner. 

Lessor
acknowledges and provides its approval that Lessee, at its sole expense, may install the necessary telephone and wire cabling into the Premises for Lessee's use. Should Lessor require an
as-built floor plan of the wiring/cabling installation, Lessor shall provide Lessee with a copy of the floor plan. Lessor agrees to provide Lessee, its agents or vendors with access to wiring or cable
rooms, telephone rooms, walls, ceilings, etc. in order for Lessee to complete the installation. Lessee shall not be required to obtain a performance bond or remove the wiring/cabling at Lease
termination. At Lease termination, Lessee grants Lessor ownership of said improvements. 

	6.
	Sublease
and Assignment:  Original Lease language notwithstanding, any consent required of Lessor under Paragraph 12 of the Lease shall not be unreasonably
withheld or delayed. Any profits derived from said sublease or assignment shall be split equally between Lessor and Lessee, after deducting Lessee's reasonable leasing costs. 
	7.
	Hazardous
Substances:  Original Lease language notwithstanding, Lessor warrants that to the actual knowledge of Lessor, the Project, Building and Premises are free of
all Hazardous Substances, including, but not limited to PCB's and asbestos, with the exception of asbestos in the roof material of the mechanical penthouse. 
	8.
	Structural
Defects:  Original Lease language notwithstanding, Lessor shall, at Lessor's sole cost and expense be responsible for the repair of all latent or patent
defects in the Project, Building or Premises, if any over the term of the Lease. 

	

LESSOR: AMERICAN BREWING COMPANY, LTD, A HAWAII CORPORATION
	

By:	
 	

/s/ [ILLEGIBLE]   
 President	
 	

 
	

Date:	
 	

November 2, 2000
	
 	

 
	

LESSEE: PACIFIC CREST BANK, A CALIFORNIA STATE CHARTERED COMMERCIAL BANK
	

By:	
 	

/s/ GONZALO FERNANDEZ   
 Gonzalo Fernandez,

Executive Vice President	
 	

 
	

Date:	
 	

October 26, 2000
	
 	

 

QuickLinks

EXHIBIT 10.13

Office Lease Between American Brewing Company, Ltd. and Pacific Crest Bank, dated October 17, 2000 (San Diego SBA Loan Production Office)

[LOGO]  STANDARD MULTI-TENANT OFFICE LEASE—GROSS AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

RULES AND REGULATIONS FOR STANDARD OFFICE LEASE [LOGO]

GENERAL RULES

PARKING RULES

EXHIBIT "A"Prepared by MERRILL CORPORATION

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 -- Click here to rapidly navigate through this document

 
 

EXHIBIT 10.14.1    
  

PACIFIC CREST CAPITAL, INC.  

 JUNE 30, 2001 10-Q  

 Employment Agreement Between The Company and Gary Wehrle  

  

 
 

EMPLOYMENT AGREEMENT    
  

    This Employment Agreement ("Agreement") is made and entered into by and between Gary L. Wehrle ("Wehrle") and Pacific Crest Capital Inc., a Delaware
corporation ("Employer"), collectively "the parties." As soon as it is signed by both parties, it shall become effective January 1, 2000 (the "Effective Date"). This Agreement supersedes and
terminates the Employment Agreement dated December 23, 1993 by and between Employer and Wehrle. 

	1)
	Position:
During the term of this Agreement, Wehrle shall be employed by Employer as its Chairman, President and Chief Executive Officer; and shall be
eligible to serve as a director of the Employer and Chairman of Employer's Board of Directors (the "Board").

	2)
	Term:

	(a)
	The
term shall commence on the Effective Date and continue until December 31, 2002. Beginning on January 1, 2000, the Agreement shall
automatically renew every day for a three year period, so that while this feature is in effect the remaining term shall always be exactly three years; provided, no renewals shall occur after any of
the following:

	(i)
	at
any time, Employer provides written notice to Wehrle of its decision to cancel the automatic renewal feature at least 45 days before the
effective date of cancellation;

	(ii)
	at
any time, Employer terminates Wehrle's employment; or

	(iii)
	at
any time, Wehrle terminates his employment. 

	3)
	Employment
Period: The Employer hereby agrees to employ Wehrle on a full time exclusive basis, and Wehrle hereby agrees to be employed by the
Employer, for the period commencing on the Effective Date of this Agreement ending on the termination of this agreement (the "Employment Period") to exercise such authorities and powers, and perform
such duties and functions, as are commensurate with the authorities and powers being exercised, and duties and functions being
performed, by Wehrle immediately prior to the effective date of this Agreement, which services shall be performed at the location where Wehrle was employed immediately prior to the effective date of
this Agreement or at such other location within a twenty-five (25) mile radius of Wehrle's principal place of employment as of the Effective Date at 30343 Canwood Street,
Agoura Hills, California 91301. Wehrle agrees that during the employment period he shall devote his full business time exclusively to his duties as described herein and perform such duties faithfully
and efficiently.

	4)
	Annual
Salary: From the Effective Date through December 31, 2002, Wehrle's annual salary shall be no less than three hundred four thousand five
hundred dollars ($304,500.00), paid in accordance with Employer's standard payroll practices. After December 31, 2000, it may be increased in the discretion of the Board, but cannot be reduced
below $304,500.00.

	5)
	Bonuses:

	(a)
	Commencing
with the bonus period that ends on December 31, 2000, Wehrle shall be eligible to receive an annual performance bonus based on the terms
and provisions of Employer's bonus plan effective as of the date of performance bonus consideration (the "Bonus Plan").

	(b)
	The
Board shall have discretion to award additional bonuses to Wehrle, as it may deem appropriate. 

	6)
	Group/Executive
Benefits: Except as otherwise specifically provided herein, so long as they meet applicable eligibility requirements, Wehrle and his
family shall participate, on the same terms with other employees and officers, in any group and/or executive life including supplemental split dollar life insurance, hospitalization or disability
insurance plan, health program, pension, profit sharing, 

1

 

401(k),
vacation, and similar benefit plans (qualified, non-qualified and supplemental) that Employer sponsors for its officers or employees, and in other fringe benefits including
automobile allowance at an annual level no less than $12,000, club memberships and dues, income tax preparation and similar programs existing as of the Effective Date of this Agreement (collectively
referred to as the "Benefits"). It is understood that participating on the "same terms" means the same rules and/or policies apply, recognizing that the result upon applying them can be affected by
additional credited years of service, among other things. 

	7)
	Supplemental
Retirement Benefits: So long as he meets applicable eligibility requirements, Wehrle will participate on the same terms as other
employees and officers, in any and all retirement benefits to which Wehrle is entitled to receive under any qualified or non-qualified defined benefit plans of Employer, including the
Pacific Crest Capital, Inc. Supplemental Executive Retirement Plan. It is
understood that participating on the "same terms" means the same rules and/or policies apply, recognizing that the result upon applying them can be affected by additional credited years of service,
among other things.

	8)
	Equity
Based Incentive Compensation:

	(a)
	So
long as he meets applicable eligibility requirements, Wehrle will participate on the same terms as other senior executives of Employer in the
1993 Equity Incentive Plan and any replacement plan and receive option awards consistent with Employer's then-current practices and with awards made to other senior executives of Employer.

	(b)
	If
there are options or restricted shares granted to all other senior executives of Employer other than the annual award of options under the Equity
Incentive Plan, Wehrle shall participate in such award(s) on terms consistent with Employer's then-current practices and on a level similar to awards made to other senior executives.

	(c)
	In
the event of a Change in Control of Employer, as that term is defined in section 9(d)(iii) below, all of Wehrle's awards of stock options,
restricted shares or similar equity-based interests which have not already vested shall immediately vest in full in accordance with Employer's then-existing stock option plan(s). 

	9)
	Events
Triggering Severance Benefits: Upon the termination of Wehrle's employment for any of the reasons described in subsections (a)—(c)
below, he will be entitled to receive the severance benefits described in section 10, below:

	(a)
	Employer
terminates Wehrle's employment without Cause (as defined in subsection (d)(i) below).

	(b)
	Wehrle
resigns from employment with Employer for Good Reason within six months of any event that constitutes Good Reason, as defined in
subsection (d)(ii) below (the phrase "Without Good Reason" means any resignation by Wehrle other than within six months of an event constituting Good Reason).

	(c)
	Wehrle
resigns With or Without Good Reason during the 30-day periods following the first or second year anniversaries of a Change in Control of
Employer, after providing written notice of his intent to resign 90 days prior to the effective date of his resignation; however, if Wehrle remains employed through the second anniversary of
the Change in Control by the Employer or any successors and assigns Wehrle shall not be entitled to any severance benefits under this subsection (c).

	(d)
	Definitions:

	(i)
	"Cause"
for termination by Employer will exist under the following circumstances: 

2

 

	(a)
	Wehrle's
employment will be considered to have been terminated for Cause if Wehrle is terminated by reason of the conditions described in either
subsection (i) or (ii) below.

	(i)
	Wehrle
willfully fails to substantially perform his duties for the Employer after a written demand for substantial performance is delivered to
Wehrle by the Board, which demand specifically identifies the manner in which the Board believes that Wehrle has not substantially performed his duties. However, the provisions of this
subsection (i) shall not apply to any such failure—

	(A)
	Resulting
from Wehrle's incapacity due to serious physical or mental illness except if such illness results fully or in part from the abuse of
controlled substances, or

	(B)
	Occurring
after Wehrle has resigned for Good Reason.

	(ii)
	Wehrle
engages in conduct involving personal dishonesty, willful misconduct, breach of fiduciary duty involving potential profit to himself or
others besides Employer or willful violation of any law, rule, or regulation, or final notice relating to the performance of his duties for the Employer.

	(A)
	For
purposes of this subparagraph (ii), Wehrle's conduct shall not be deemed "willful" unless it was done or omitted in bad faith and/or
without reasonable belief that this action or omission was in the best interest of the Employer. 

	(b)
	Notwithstanding
the foregoing, Wehrle shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to him
a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the membership of the Board of Directors, excluding Wehrle: 

This
resolution must be adopted at a meeting of the Board of Directors called and held for such purpose after reasonable notice to Wehrle. 

There
must be an opportunity for Wehrle, to be heard before the Board. 

The
resolution must find that, in the opinion of the Board of Directors, Wehrle engaged in the conduct set forth in Paragraphs (a)(i) or (a)(ii) above and must specify the particulars thereof
in detail. 

	(ii)
	"Good
Reason" for Wehrle to resign shall exist if any of the following events occur without his consent.

	(a)
	Employer
assigns to Wehrle any duties inconsistent with his status with the Employer or substantially impairs the nature of his responsibilities on
a recurring basis, continuing after written objection by Wehrle;

	(b)
	The
Employer reduces Wehrle's annual total compensation excluding any reduction which may occur as a result of Employer's changes in benefit plans
in which other employees and officers participate or benefit;

	(c)
	The
Employer requires Wehrle to be based anywhere outside the greater Los Angeles metropolitan area, other than an office of the Employer
within a fifty (50) mile radius of Wehrle's principal place of employment by the Employer, except for travel on Employer business to an extent substantially as specified in section 3 above
consistent with Wehrle's business travel obligations prior to the Effective Date;

	(d)
	The
Employer's failure to pay within seven (7) days of the due date of any portion of 

3

 

	(i)
	Wehrle's
current total compensation, or 

	(ii)
	An
installment of deferred compensation as provided under any deferred compensation plan of the Employer; 

	(e)
	The
Employer discontinues any compensation or benefit plan in which Wehrle participates that is material to his total compensation to the extent
that compensation or benefit plans are continued for the benefit of other employees and/or officers of Employer, including but not limited to the plans referenced in sections 5, 6, 7, and 8
above or any similar plans later adopted. This provision shall not apply if a mutually acceptable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such
plan;

	(f)
	The
Employer discontinues Wehrle's participation in any plan described in section (e) above on a basis not materially less favorable, both in
terms of—

	(i)
	The
amount of benefits provided, and

	(ii)
	The
level of Wehrle's participation in the plan (relative to that of the other participants), 

	(g)
	The
Employer discontinues providing Wehrle with benefits substantially similar to those Wehrle enjoyed under any of the Employer's pension, life
insurance, medical, health and accident, disability plans, or other material fringe benefit plans (including vacation benefits) in which he was participating as of the Effective Date.

	(iii)
	"Change
in Control" shall exist upon the occurrence of any one (or more) of the following events: 

	(a)
	Any
person, including a group as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, becomes the beneficial owner
of shares of the Employer with respect to which twenty percent (20%) or more of the total number of votes for the election of the Board of Directors may be cast;

	(b)
	As
a result of, or in connection with, any cash tender offer, exchange offer, merger or other business combination, sale of assets, or contested
election for the Board of Directors, or combination of the foregoing, persons who were directors of the Employer just prior to such event(s) shall cease to constitute a majority of the Board of
Directors;

	(c)
	The
stockholders of the Employer shall approve an agreement providing for (i) A transition in which the Employer will cease to be an
independent publicly-owned corporation, or (ii) sale or other disposition of all or substantially all the assets of the Employer; or

	(d)
	A
tender offer or exchange offer is made for 5% or more of the Employer's common stock (other than one made by the Employer) and 5% or more shares
of common stock are acquired thereunder

	(iv)
	"Notice
of Termination" shall mean a written notice which (A) states the type of termination under this Agreement (e.g., for Cause) and
cites the applicable provision of this Agreement, (B) briefly describes the facts and circumstances claimed to provide a basis for the stated type of termination, if applicable, and
(C) specifies the date of termination from service. 

	(e)
	Termination
because of Wehrle's death or disability to work will not require payment of the severance benefits described in section 10, nor
will termination for Cause or resignation by Wehrle Without Good Reason. 

	10)
	Severance
Benefits: If Wehrle qualifies for severance benefits under section 9, then the following terms and conditions shall apply: 

4

 

	(a)
	Employer
shall pay Wehrle all Accrued Obligations, as defined below, in a lump sum in cash within thirty (30) days following his last day of
service; provided, however, that any portion of the Accrued Obligations which consists of bonus, deferred compensation, or incentive compensation shall be determined and paid in accordance with the
terms of the relevant plan or provision. "Accrued Obligations" shall mean, as of Wehrle's last day of service, the sum of:

	(i)
	his
Annual Salary under section 4 through the date of termination from service, to the extent not already paid;

	(ii)
	the
amount of any bonus, incentive compensation, deferred compensation and other cash compensation accrued by Wehrle as of his last day of service,
to the extent not already paid; and

	(iii)
	any
vacation pay, expense reimbursements and other cash entitlements accrued by Wehrle as of his last day of service, to the extent not already
paid. For purposes of this section, amounts shall be
deemed to accrue ratably over the period during which they are earned, but no discretionary compensation shall be deemed earned or accrued until it is specifically approved by the Board in accordance
with the applicable plan, program or policy. 

	(b)
	In
addition, within thirty (30) days after Wehrle's last day of service, Employer shall pay him a lump sum equal to the amount that results
when the number described in subsection (i) below is multiplied times the sum described in subsection (ii) below (i.e., full payment of the salary and bonus that would have been due
during the remainder of the term of this Agreement):

	(i)
	2.99;

5

  

	(ii)
	The
sum of his: (A) annual salary and (B) his average annual bonus payment over the prior 3 bonus payments. The annual salary for
purposes of this calculation shall be the amount of annual salary Wehrle was receiving immediately prior to termination, or if greater, not less than his annual salary immediately prior to any Change
in Control of the Employer which may have occurred. 

	(c)
	In
addition, within thirty (30) days after Wehrle's last day of service, Employer shall pay him a lump sum that represents a pro-rated annual
bonus for the year of termination. This amount shall be calculated by taking his target bonus for the year of termination and multiplying it times a fraction (i) whose numerator is the number
of days elapsed in the current calendar year from January 1 of that year through his final day of active service, and (ii) whose denominator is 365 (e.g., if his last day of active
service was February 5, then this fraction would be .10, calculated as follows: 36 days elapsed in year divided by 365 days).

	(d)
	Following
Wehrle's last day of service and continuing through the last day of the term of this Agreement, Employer shall treat him as an employee
not providing employment services to Employer and, thus, shall continue to credit him with service time and shall provide him and his dependents with all welfare benefits that are provided to
employees of the Employer, as determined by the plan provisions in effect on the Effective Date or his final day of service, whichever results in greater benefits. Thereafter, Wehrle will be treated
as a retired senior officer for purposes of benefits Employer provides to such retirees.

	(e)
	All
options and restricted stock (including both shares and units) that were granted before the date of termination but have not yet vested shall
immediately vest upon Wehrle's final day of service. All such options, including ones that previously vested but have not yet been exercised, shall remain exercisable in accordance with 1993 Equity
Incentive Plan's terms for retirees.

	(f)
	The
severance allowance to be provided pursuant to this Section 10 shall be in addition to, and shall not be reduced by, any other amounts or
benefits provided by separate agreement with Wehrle, or plan or arrangement of the Employer or its subsidiaries, unless specifically stipulated in an agreement which constitutes an amendment to this
Agreement. 

	11)
	Obligations
Of Employer Upon Termination By Death, Disability, Discharge For Cause, or Resignation Without Good Reason: In the event this Agreement
terminates due to the death or disability of Wehrle, or due to termination for Cause or resignation without Good Reason, Employer shall pay to Wehrle all Accrued Obligations in a lump sum in cash
within thirty (30) days after his last day of active service; provided, however, that any portion of the Accrued Obligations which consists of bonus, deferred compensation, or incentive
compensation shall be determined and paid in accordance
with the terms of the relevant plan or provision. Nothing in this section shall limit or otherwise adversely affect any rights Wehrle may have under applicable law, under any other agreement with
Employer, or under any compensation or benefit plan or policy of Employer.

	(a)
	Provided,
however, that if Employer terminates the employment relationship as a result of Wehrle's disability, then Wehrle shall be entitled to
receive, as disability compensation, payments at the annual salary rate set forth in section 4 above for the remaining term of this Agreement payable not less frequently than monthly. Any
obligation on the part of the Employer to pay Wehrle any payments under this subsection (a) shall be credited with the amount of any payments to Wehrle under any disability income policy of the
Employer, but not any payments to Wehrle under any state disability insurance plan.

	(i)
	For
purposes of this Agreement, Wehrle will be deemed to be disabled from performing his duties upon the earlier of: (A) the end of any 120
consecutive day period during 

7

 

which,
for any reason, he has been unable to substantially perform each of his usual and customary duties as Chairman, President and/or Chief Executive Officer; or (B) the date when it becomes
apparent that, for any reason, he will be unable to substantially perform each of his usual and customary duties as Chairman, President and/or Chief Executive Officer for a period of at least 120
consecutive days, provided, in the case of a physical or mental injury or disease, his disability must be confirmed in writing by a reputable physician or psychologist, selected jointly by the Board
and Wehrle (or his personal representative). If any question arises as to whether Wehrle is physically or mentally disabled, upon written request by the Board, Wehrle shall promptly submit to a
reasonable medical or psychological examination for the purpose of determining the existence, nature and extent of such disability. Employer shall promptly give Wehrle written notice of any
determination that Wehrle is disabled from working and of any decision by the Board to terminate his employment by reason thereof. 

	(b)
	In
the event that Wehrle should die during the term hereof, this Agreement will terminate at the time of death if not previously terminated. In such
event, Wehrle's personal representative shall be entitled to receive, as a death benefit, in addition to any other payments which Wehrle's personal representative may be entitled to receive under any
benefit plans, payments for a period of twelve (12) months at the annual salary rate set forth in section 4 above that would have then been payable to Wehrle under this Agreement payable
not less frequently than monthly. 

	12)
	In
the event that Wehrle resigns from employment with Employer Without Good Reason or Employer terminates Wehrle's employment without Cause, Wehrle
agrees to resign immediately as Director of the Employer's Board of Directors.

	13)
	Maximum
Amount of Payments: If it is determined that any payment Employer makes to or for the benefit of Wehrle, under this Agreement or otherwise,
is subject to the federal excise taxes imposed on golden parachute payments, the Employer will reduce such total payments subject to federal excise taxes until such payments are no longer subject to
federal excise taxes.

	(a)
	If
any amount payable to Wehrle by the Employer or any subsidiary or affiliate thereof, whether under this Agreement or otherwise (a "Payment"), is
subject to any tax under Section 4999 of the Internal Revenue Code of 1986, as amended, (the "code"), or any similar federal or state law (an "Excise Tax"), the Employer shall reduce such
payments to Wehrle until such payments are no longer subject to any tax under Section 4999 of the Internal Revenue Code of 1986, as amended.

	(b)
	All
calculations under this section 13 shall be made initially by the Employer and the Employer's tax advisor and shall provide prompt
written notice thereof to Wehrle. Upon request of Wehrle, the Employer shall provide Wehrle with sufficient tax and compensation data to enable Wehrle or his tax advisor to independently make the
calculations described in subsection (a) above and the Employer shall reimburse Wehrle for reasonable fees and expenses incurred for any such verification.

	(c)
	If
Wehrle provides written notice to the Employer of any objection to the results of the Employer's calculations within sixty (60) days of
Wehrle's receipt of written notice thereof, the dispute shall be referred for determination to tax counsel selected by the independent auditors of the Employer ("Tax Counsel"). The Employer shall pay
all fees and expenses of such Tax Counsel. 

	14)
	Mitigation
and Set Off: Wehrle shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment
or otherwise. The Employer shall not be entitled to set off against the amounts payable to Wehrle under this Agreement any amounts 

8

 

owed
to the Employer by Wehrle, any amounts earned by Wehrle in other employment after termination of his employment with the Employer, or any amounts which might have been earned by Wehrle in other
employment had he sought such other employment. 

	15)
	Consulting
Agreement: In the event this Agreement terminates as a result of Wehrle's resignation With or Without Good Reason or Wehrle's termination
by Employer Without Cause, Wehrle shall consult with the Employer ("Consulting Agreement") to a maximum of six (6) days per month until the first anniversary of the Consulting Agreement and
thereafter at five (5) days per month until the second anniversary of the Consulting Agreement.

	(a)
	The
Consulting Agreement will commence on the termination of the Agreement and will continue in effect for a period of two years or until sooner
terminated by Wehrle upon 30 days' written notice to the Employer.

	(b)
	As
a condition of the Employer's obligations under this Consulting Agreement, during its term Wehrle agrees to not, without the written permission
of the Employer, engage in any activity that is directly or indirectly in competition with any activity of the Employer or any subsidiary or in conduct that is inimical to the best interests of the
Employer, and will hold in confidence proprietary information which Wehrle may have concerning the Employer.

	(c)
	In
consideration of this Consulting Agreement, the Employer will, during the term of the Consulting Agreement, pay Wehrle at the rate of $16,000 per
month until the first anniversary of the Consulting Agreement and $13,000 per month until the second anniversary of the Consulting Agreement, payable monthly; reimburse Wehrle for travel-related
expenses incurred in connection with work performed under this Consulting Agreement; and provide Wehrle with an office within the Employer's principal offices and a secretary assigned to that office. 

	16)
	Business
Related Expenses: Wehrle shall be reimbursed for his reasonable and actual out-of-pocket expenses incurred by Wehrle in performance of his
duties and responsibilities, provided Wehrle shall first furnish appropriate vouchers and expense accounts setting forth the information required by the governmental tax authorities for deductible
business expenses. 

Employer
may at any time discharge Wehrle from service without advance notice, by providing a Notice of Termination; nothing in this Agreement shall be construed as requiring Employer to allow him to
continue performing the duties of Chairman, President or CEO. Regardless of the reason for such termination or whether it constitutes a breach by Employer, Wehrle's exclusive remedy shall be the
severance benefits described in subsections 10(a)—10(e); he shall not be entitled to reinstatement, nor to any other remedy or damages for wrongful termination; nor, after his
termination from service, shall he be entitled to any other salary, benefits or other compensation. 

	17)
	Termination
By Wehrle: Wehrle shall have no personal liability for damages to Employer for voluntarily terminating his employment at any time, with
or Without Good Reason, so long as he gives at least ninety (90) days prior written notice.

	18)
	Choice
Of Law And Forum:

	(a)
	This
Agreement shall be governed by and construed in accordance with the laws of California, without regard to choice of law principles.

	(b)
	The
parties hereby consent to submit to personal jurisdiction in California for purposes of arbitration of any dispute over enforcement, breach or
interpretation of this Agreement as provided in section 22 below. 

9

 

	(c)
	The
Agreement shall be construed and enforced according to the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended, and the laws
of the State of California, other than its laws respecting choice of law, to the extent not pre-empted by ERISA. 

	19)
	Indemnification:
To the fullest extent permitted by law and Employer's by-laws, Employer shall indemnify Wehrle (including the advancement of
expenses) for any judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys' fees, incurred by Wehrle in connection with the defense of any lawsuit or other claim to
which he is made a party by reason of being an officer, director or employee of Employer or any of its subsidiaries for acts committed in the course and scope of his employment.

	20)
	Binding
Effect: This Agreement shall be binding on and inure to the benefit of the heirs and representatives of Wehrle and the successors and assigns
of Employer. Employer shall require any successor (whether direct or indirect, by purchase, merger, reorganization, consolidation, acquisition of property or stock, liquidation or otherwise) to all or
a substantial portion of its assets to assume and agree to perform this Agreement in the same manner and to the same extent that Employer would be required to perform it if no such succession had
taken place; provided, Wehrle shall have the same obligations to the successor as he would have had to Employer. Regardless of whether such an assumption agreement is executed, this Agreement shall be
binding on any successor of Employer in accordance with the operation of law, and such successor shall be deemed "Employer" for all purposes under this Agreement.

	21)
	Notices:
All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been given if delivered
anywhere by hand to the applicable party, or if delivered by recognized commercial delivery service or if mailed within the continental United States by first class certified mail, return receipt
requested, postage prepaid, addressed as follows:

	(a)
	If
to the Board of Employer, addressed to: Pacific Crest Capital Inc., 30343 Canwood Street, Agoura Hills, California 91301

	(b)
	If
to Wehrle, addressed to: 24317 Sylvan Glen Road, Calabasas, California 9130. Such addresses may be changed by written notice sent to the other
party at the last recorded address of that party. Failure
to send a copy to the applicable attorney shall not render a Notice ineffective, so long as it is actually received by Employer or Wehrle, as applicable. 

	22)
	Arbitration
of All Disputes: Any controversy or claim arising out of or relating to this Agreement or the breach thereof shall be settled by
arbitration in the County of Los Angeles in accordance with the laws of the State of California by three arbitrators appointed by the parties. If the parties cannot agree on the appointment, one
arbitrator shall be appointed by the Employer and one by Wehrle, and the third shall be appointed by the first two arbitrators. If the first two arbitrators cannot agree on the appointment of a third
arbitrator, then the third arbitrator shall be appointed by the Chief Judge of the United States Court of Appeals for the Ninth Circuit. The arbitration shall be conducted in accordance with the rules
of the American Arbitration Association, except with respect to the selection of arbitrators which shall be as provided in this section 21. Judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof. Any award of the arbitrators shall include interest at a rate or rates considered just under the circumstances by the arbitrators.

	23)
	Attorney
Fees And Other Expenses: If the case of arbitration, the party which prevails shall be entitled to reimbursement of all reasonable
arbitration costs and expenses, including attorney fees. If each party prevails on one or more arbitrated issues, the arbitrators shall exercise their equitable judgment to determine which, if either,
should be considered the prevailing party and the percentage of that party's expenses which should be reimbursed, taking into account such factors as the significance of the issue(s) on which each
party prevailed, the reasonableness of each party's 

10

 

position(s),
and ability to pay. Notwithstanding the foregoing, in the event that it shall be necessary or desirable for Wehrle to retain legal counsel or incur other costs and expenses in connection
with the enforcement of his rights under this Agreement, Wehrle shall be entitled to an advance from Employer of his reasonable attorneys fees and costs and expenses in connection with the enforcement
of his rights (including the enforcement of any arbitration award in Court). Payment shall be made to Wehrle by Employer at time the attorneys' fees and costs and expenses are incurred by Wehrle. If,
however, the arbitrator should later determine that under the circumstances Wehrle could have had no reasonable expectation of prevailing on the merits at the time he initiated the arbitration based
on the information then available to him, he shall repay any such payments to Employer in accordance with the order of the arbitrators. 

	24)
	Non-Alienation.
Wehrle shall not have any right to pledge, hypothecate, anticipate or in any way create a lien upon any amounts provided under this
Agreement; and no benefits payable hereunder shall be assignable in anticipation of payment either by voluntary of involuntary acts, or by operation of law. Nothing in this paragraph shall limit
Wehrle's rights or powers which his executor or administrator would otherwise have.

	25)
	Amendment.
This Agreement may be amended or canceled by mutual agreement of the parties in writing and, so long as Wehrle lives, no person, other
than the parties hereto, shall have any rights under or interest in this Agreement or the subject matter hereof.

	26)
	Scope
of Agreement:

	(a)
	This
Agreement supersedes any other document or oral agreement that conflicts with it regarding any of the matters set forth herein with the
exception of benefit and compensation plan documents. It is not intended to pre-empt or supersede other documents, including plan documents, that provide additional, non-conflicting rules or terms.

	(b)
	No
promises or inducements have been made by either party other than those reflected herein. This Agreement cannot be amended except by a written
agreement signed by the parties, and only the Board has authority to authorize such an amendment on behalf of Employer. 

	27)
	Severability:
Each term of this Agreement is deemed severable, in whole or in part, and if any provision of this Agreement or its application in any
circumstance is found to be unlawful or invalid, the remaining terms and provisions shall remain in full force and effect. In addition, a court may re-write the invalid provision(s) so as to be
consistent with the applicable law and still, to the extent possible, achieve the intended effect of this Agreement.

	28)
	Execution
In Counterparts: This Agreement may be executed by the parties hereto in two (2) fullest extent permissible under the laws and
public policies of each state and jurisdiction in which such enforcement is sought, and that the unenforceability (or the modification to conform to such laws or public policies) of any provision of
such paragraph shall not render unenforceable, or impair, the remainder of the provisions of such paragraph. Accordingly, if any provisions of such paragraph shall be determined to be invalid or
unenforceable, either in whole or in part, under the laws or public policies of any state or jurisdiction in which enforcement is sought, as to such state or jurisdiction the provisions of such
paragraph shall be deemed amended to delete or modify, as necessary, the offending provision and to alter the balance hereof in order to render it valid and enforceable in such state or jurisdiction. 

11

 

	(e)
	Notwithstanding
any termination of Employee's employment, all of the covenants and agreements of Employee under this Section 28 shall
continue in full force and effect in accordance with the terms hereof, even if such termination is for cause. 

	 	 	PACIFC CREST CAPITAL, INC.
	

 	
 	

By:	
 	

/s/ MARTIN J. FRANK
 Martin J. Frank

Dated: March 29, 2000
	

 	
 	

 	
 	

/s/ GARY L. WEHRLE
 Gary L. Wehrle

Dated: March 29, 2000

12

QuickLinks

EXHIBIT 10.14.1

EMPLOYMENT AGREEMENT

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