Document:

Exhibit
10.4

LINN ENERGY, LLC

LONG-TERM INCENTIVE PLAN

RESTRICTED UNIT GRANT AGREEMENT

This Restricted Unit grant agreement (“Grant Agreement”) is made and entered
into effective as of July 17, 2006, (the “Grant
Date”) by and between LINN ENERGY, LLC, a Delaware limited
liability company (together with its subsidiaries, the “Company”), and LISA D. ANDERSON (“Participant”).

WHEREAS, Section 3.3(b) of the
Employment Agreement dated July 7, 2006 (the “Employment Agreement”), between Linn Operating, Inc. and
Participant provides for a restricted unit award in the amount of Fifty
Thousand (50,000) Restricted Units of the Company as of the effective date of
such Employment Agreement; and

WHEREAS, the Company considers it
to be in its best interest that Participant be given a proprietary interest in
the Company and an added incentive to advance the interests of the Company; and

WHEREAS, the Company desires to
accomplish such objectives by granting Participant Restricted Units pursuant to
the Employment Agreement and the Linn Energy, LLC Long-Term Incentive Plan,
which is attached hereto as Appendix A and incorporated by reference herein
(the “Plan”);

NOW, THEREFORE, in consideration of
the mutual agreements hereinafter set forth, the parties hereby agree as
follows: 

1.             Grant of Restricted Units.  The Company hereby grants to Participant 50,000
Restricted Units, under and subject to the terms and conditions of this Grant
Agreement and the Plan. 

2.             Vesting
and Restricted Period. Subject to Sections 4, 5, 6 and 7, the
Restricted Period shall lapse with respect to one third (1/3) of the covered
Units on January 1, 2007, with respect to an additional one third (1/3) of the
covered Units on January 1, 2008 and with respect to the final one third (1/3)
of the covered Units on January 1, 2009. Upon the termination of the Restricted
Period with respect to a Restricted Unit, such Restricted Unit shall vest in
full and shall no longer be a Restricted Unit. 

3.             General
Restrictions. The Restricted Units shall not be assignable or
transferable except as expressly provided in the Plan or by the Committee in
its sole discretion. 

4.             Termination
by Company other than for Cause. Upon the termination by the
Company of Participant’s service relationship with the Company other than for
Cause (as defined herein and as determined by the Committee in its sole
discretion), all Restricted Periods established hereunder shall automatically
and immediately terminate and all outstanding Restricted Units granted hereby
shall automatically and immediately vest in full. “Cause” shall mean (a) Participant’s
conviction of, or plea of nolo contendere
to, any felony, any crime or offense causing substantial harm to the Company
(whether or not for personal gain) or involving 

 

acts of theft, fraud, embezzlement, moral turpitude or
similar conduct; (b) Participant’s repeated intoxication by alcohol or drugs
during the performance of his or her duties; (c) malfeasance in the conduct of
Participant’s duties, including, but not limited to, (i) willful and intentional
misuse or diversion of any Company funds, (ii) embezzlement or (iii) fraudulent
or willful and material misrepresentations or concealments on any written
reports submitted to the Company; (d) Participant’s material failure to perform
the duties of Participant’s employment or service relationship consistent with
Participant’s position or material failure to follow or comply with the
reasonable and lawful written directives of the Board of the Company; or (e) a
material breach by Participant of the written policies of the Company
concerning employee discrimination or harassment. 

5.             Termination
by Participant with Good Reason. Upon the termination by
Participant of Participant’s service relationship with the Company with Good
Reason (as defined herein), all Restricted Periods established hereunder shall
automatically and immediately terminate and all outstanding Restricted Units
granted hereby shall automatically and immediately vest in full. “Good Reason” shall mean any of the
following to which Participant does not consent in writing: (a) a reduction in
Participant’s base salary; or (b) a relocation of Participant’s primary place
of employment to a location more than 50 miles from Houston, Texas. 

6.             Death
or Disability. In the case of termination of Participant’s
service relationship with the Company due to death or Disability (as defined
herein), all Restricted Periods established hereunder shall automatically and
immediately terminate and all outstanding Restricted Units granted hereby shall
automatically and immediately vest in full. “Disability” shall mean the determination by a physician
selected by the Company that Participant has been unable to perform
substantially Participant’s usual and customary duties for a period of at least
one hundred twenty (120) consecutive days or a non-consecutive period of one
hundred eighty (180) days during any twelve-month period as a result of
incapacity due to mental or physical illness or disease.

7.             Change
of Control. Notwithstanding anything in the Plan to the contrary,
in the event of a Change of Control (as defined in the Employment Agreement),
all Restricted Periods established hereunder shall automatically and
immediately terminate and all outstanding Restricted Units granted hereby shall
automatically and immediately vest in full. 

8.             Termination
by Company for Cause or by Participant without Good Reason.
In the case of (a) termination by the Company of Participant’s service
relationship with the Company for Cause or (b) termination by Participant of
Participant’s service relationship with the Company without Good Reason and
other than due to Participant’s death or disability, all outstanding Restricted
Units granted hereby shall be automatically and immediately forfeited, and
Participant hereby agrees to undertake any action and execute any document,
instrument or papers reasonably requested by the Company to effect such
forfeiture of Restricted Units resulting from any such termination.

9.             Plan Controlling Document.
Unless otherwise defined herein, capitalized terms shall have the meaning given
such terms in the Plan. Participant agrees that the Plan is the 

 2
 

 

controlling instrument and that to the extent there is
any conflict between the terms of the Plan and this Grant Agreement, the Plan
shall control and be the governing document.

10.          Limited Liability Company Agreement.
Participant agrees to be bound by all applicable provisions of the Company’s
limited liability company agreement, as it may be amended from time to time.

11.          Taxes. The Company
and any affiliate thereof are authorized to withhold from any payment relating
to the Restricted Units granted hereby, or any payroll or other payment to
Participant, amounts of withholding and other taxes due or potentially payable
in connection with the Restricted Units granted hereby, and to take such other
action as the Committee may deem advisable to enable the Company, any
affiliate, and Participant to satisfy obligations for the payment of
withholding taxes and other tax obligations relating to the Restricted Units
granted hereby. This authority shall include authority to withhold or receive
Units or other property and to make cash payments in respect thereof in
satisfaction of Participant’s tax obligations, either on a mandatory or
elective basis in the discretion of the Committee.

12.          Issuance of Units.
The Company shall not be obligated to issue any Restricted Units at any time
when the Restricted Units have not been registered under the Securities Act of
1933, as amended, and such other state and federal laws, rules or regulations
as the Company or the Committee deems applicable and, in the opinion of legal
counsel for the Company, there is no exemption from the registration
requirements of such laws, rules or regulations available for the issuance of
such Restricted Units.

13.          Notices. Any notices
given in connection with this Grant Agreement shall, if issued to Participant,
be delivered to Participant’s current address on file with the Company, or if
issued to the Company, be delivered to the Company’s principal offices.

14.          Execution of Receipts and Releases.
Any payment of cash or any issuance or transfer of Restricted Units or other
property to Participant, or to Participant’s legal representatives, heirs,
legatees or distributees, in accordance with the provisions hereof, shall, to
the extent thereof, be in full satisfaction of all claims of such persons
hereunder. The Company may require Participant or Participant’s legal
representatives, heirs, legatees or distributees, as a condition precedent to
such payment or issuance, to execute a release and receipt therefor in such
form as it shall determine.

15.          Successors. This
Grant Agreement shall be binding upon Participant, Participant’s legal
representatives, heirs, legatees and distributees, and upon the Company, its
successors and assigns.

[Remainder of this page intentionally left blank.]

 3

 

IN WITNESS WHEREOF,
the parties hereto have executed this Grant Agreement to be effective as of the
day and year first above written.

 

	
  

  	
  LINN ENERGY, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Michael C. Linn

  
	
   

  	
  Name:

  	
  Michael C. Linn

  
	
   

  	
  Title:

  	
  President and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PARTICIPANT:

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Lisa D. Anderson

  
	
   

  	
  LISA D. ANDERSONExhibit 10.8

Southern California Chapter of the 

 Society of Industrial and Office
Realtors, Inc.

INDUSTRIAL
REAL ESTATE LEASE 

(MULTI-TENANT FACILITY)

ARTICLE ONE: BASIC
TERMS

This Article One contains the Basic Terms of this
Lease between the Landlord and Tenant named below. Other Articles, Sections and
Paragraphs of the Lease referred to in this Article One explain and define the
Basic Terms and are to be read in conjunction with the Basic Terms.

Section 1.01. Date of Lease: January 10, 2000

Section 1.02. Landlord (include legal entity): MAJESTIC
REALTY CO. AND PATRICIAN ASSOCIATES INC, both California corporations

Address of Landlord:                              13191 Crossroads Parkway
North, 6th Floor

City of Industry, CA 91746

Section 1.03.
Tenant(include legal entity): CHINO COMMERCIAL BANK, N.A., a National
Association 

Address of Tenant:                                        14335 Pipeline Avenue, Unit B

Chino, CA 91710

Section 1.04. Property: The Property is part of Landlord’s
multi-tenant real property development known as approximately 83,000 square
feet located in 5 buildings more commonly
known as 14245, 14275, 14335,
14351, 14355 and 14365 Pipeline Avenue, Chino, California and described or
depicted in Exhibit “A”(the “Project”). The Project includes the land, the
buildings and all other improvements located on the land, and the common areas
described in Paragraph 4.05(a). The
Property is part of that approximately 13,000 square foot building more
commonly known as 14335 Pipeline Avenue, Chino, California as depicted on
Exhibit “A” attached hereto (the “Building”). The Property is (include street address, approximate square
footage and description) that approximately 6,954 square foot portion of the
Building as outlined in red on Exhibit “A” attached hereto, and more commonly
known as 14335 Pipeline Avenue, Unit B. Chino, California subject to the
non—exclusive use of such area outlined in green on Exhibit “A”                                 I 

Section 1.05. Lease Term: 5 years - months beginning on April 15, 2000 or such other date as is specified
in this Lease, and ending on April
14, 2005

Section 1.06. Permitted Uses: (See Article Five) Only for commercial banking including general office and
administrative. See Addendum Section 1.06 

Section 1.07. Tenant’s Guarantor: (If none, so state)
None

Section 1.08. Brokers: (See Article Fourteen) (If none,
so state) 

Landlord’s Broker: Majestic
Realty Co.

Tenant’s Broker: Seapower
Carpenter Capital, Inc.

Section 1.09. Commission  Payable to Landlord’s Broker: (See Article Fourteen) $ per separate agreement    

Section 1.10. Initial  Security
Deposit: (See Section 3.03)
$ 6,261.43

Section 1.11. Vehicle
Parking Spaces Allocated to Tenant: (See Section 4.05) per   Exhibit “A”

Section 1.12. Rent and  Other
Charges Payable by Tenant: 

(a) BASE RENT: FIVE THOUSAND
FIVE HUNDRED SIXTY-THREE AND 20/100 Dollars ($ 5,563.20) per month for the
first twe1ve (12) months, as
provided in Section 3.01. See Addendum Section 1.12(a) 

(b) OTHER PERIODIC PAYMENTS:
(i) Real Property Taxes (See Section 4.02); (ii) Utilities (See Section 4.03);
(iii) Insurance Premiums (See Section 4.04); (iv) Tenant’s Initial Pro Rata
Share of Common Area Expenses 53.50% for Building Common Area Expenses, 8.41%
for Project Common Area Expenses, and 1.02% for the pump and main driveway (as
crosshatched in black on Exhibit “A” attached hereto is shared with 683,000
square feet of buildings). (See Section 4.05); (v) Impounds for Insurance
Premiums and Property Taxes (See Section 4.08); (vi) Maintenance, Repairs and
Alterations (See Article Six). 

Section 1.13. Landlord’s Share of Profit on Assignment or Sublease: (See
Section 9.05) fifty percent ( 50 %) of the Profit (the “Landlord’s Share”). 

Section 1.14. Riders: The following Riders are attached
to and made a part of this Lease:
(If none, so state) Addendum pages
1 through 7, Option to Extend Term Lease Rider, and Exhibits “A”, “B”, “C”, “D’’,
“E” and “F”.

ARTICLE
TWO: LEASE TERM

Section 2.01. Lease of Property For Lease Term. Landlord
leases the Property to Tenant and Tenant leases the Property from Landlord for
the Lease

 

Term.
The Lease Term is for the period stated in Section 1.05 above and shall begin
and end on the dates specified in Section 1.05 above, unless the beginning or
end of the Lease Term is changed
under any provision of this Lease. The “Commencement Date” shall be the date
specified in Section 1.05 above for the beginning of the Lease Term, unless
advanced or delayed under any provision of this Lease.

Section 2.02. Delay
in Commencement. Landlord shall not be liable to Tenant if Landlord
does not deliver possession of the Property to Tenant on the Commencement Date.
Landlord’s non-delivery of the Property to Tenant on that date shall not affect
this Lease or the obligations of Tenant under this Lease except that the
Commencement Date shall be delayed until Landlord delivers possession of the
Property to Tenant and the Lease Term shall be extended for a period equal to
the delay in delivery of
possession of the Property to Tenant, plus the number of days necessary to end
the Lease Term on the last day of a month. If Landlord does not deliver
possession of the Property to Tenant within sixty (60) days after the
Commencement Date, Tenant may elect to cancel this Lease by giving written
notice to Landlord within ten (10) days after the sixty (60) -day period ends.
If Tenant gives such notice, the Lease shall be cancelled and neither Landlord
nor Tenant shall have any further obligations to the other. If Tenant does not
give such notice, Tenant’s right to cancel the Lease shall expire and the Lease
Term shall commence upon the delivery of possession of the Property to Tenant.
If delivery of possession of the Property to Tenant is delayed, Landlord and
Tenant shall, upon such delivery, execute an amendment to this Lease setting
forth the actual Commencement Date and expiration date of the Lease. Failure to
execute such amendment shall not affect the actual Commencement Date and
expiration date of the Lease.

Section 2.03. Early
Occupancy. If Tenant occupies the Property prior to the Commencement
Date, Tenant’s occupancy of the Property shall be subject to all of the
provisions of this Lease. Early occupancy of the Property shall not advance the
expiration date of this Lease. Tenant shall pay Base Rent and all other charges
specified in this Lease for the early occupancy period.

Section 2.04. Holding
Over. Tenant shall vacate the Property upon the expiration or
earlier termination of this Lease. Tenant shall reimburse Landlord for and
indemnify Landlord against all damages which Landlord incurs from Tenant’s
delay in vacating the Property. If Tenant does not vacate the Property upon the
expiration or earlier termination of the Lease and Landlord thereafter accepts
rent from Tenant, Tenant’s occupancy of the Property shall be a “month-to-month”
tenancy ,subject to all of the terms of this Lease applicable to a
month-to-month tenancy, except that the Base Rent then in effect shall be
increased by twenty-five percent (25%).

ARTICLE
THREE: BASE RENT

Section 3.01. Time
and Manner of Payment. Upon execution of this Lease, Tenant shall
pay Landlord the Base Rent in the amount stated in Paragraph 1.12(a) above for
the first month of the Lease Term. On the first day of the second month of the
Lease Term and each month thereafter, Tenant shall pay Landlord the Base Rent,
in advance, without offset, deduction or prior demand. The Base Rent shall be
payable at Landlord’s address or at such other place as Landlord may designate
in writing.

Section 3.03. Security
Deposit; Increases.

(a)
Upon the execution of this Lease. Tenant shall deposit with Landlord a cash
Security Deposit in the amount set forth in Section 1.10 above, Landlord may
apply all or part of the Security Deposit to any unpaid rent or other charges
due from Tenant or to cure any other defaults of Tenant. If Landlord uses any
part of the Security Deposit, Tenant shall restore the Security Deposit to its
full amount within ten (10) days after Landlord’s written request. Tenant’s
failure to do so shall be a material default under this Lease. No interest
shall be paid on the Security Deposit. Landlord shall not be required to keep
the Security Deposit separate from its other accounts and no trust relationship
is created with respect to the Security Deposit.

(b)
Each time the Base Rent is increased, Tenant shall deposit additional funds
with Landlord sufficient to increase the Security Deposit to an amount which
bears the same relationship to the adjusted Base Rent as the initial Security
Deposit bore to the initial Base Rent.

Section 3.04. Termination;
Advance Payments. Upon termination of this Lease under Article Seven
(Damage or Destruction), Article Eight

 

(Condemnation) or any other termination not resulting from Tenant’s
default, and after Tenant has vacated the Property in the manner required by
this Lease, Landlord shall refund or credit to Tenant (or Tenant’s successor)
the unused portion of the Security Deposit, any advance rent or other advance
payments made by Tenant to Landlord, arid any amounts paid for real property
taxes and other reserves which apply to any time periods after termination of
the Lease.

 

ARTICLE
FOUR: OTHER CHARGES PAYABLE BY TENANT

Section 4.01.
Additional Rent. All charges payable by Tenant other than Base Rent
are called “Additional Rent.” Unless this Lease provides otherwise, Tenant
shall pay all Additional Rent then due with the next monthly installment of
Base Rent. The term “rent” shall mean Base Rent and Additional Rent.

Section 4.02. Property
Taxes.

(a) Real Property
Taxes. Tenant shall pay all real property taxes on the Property
(including any fees. taxes or assessments against, or as a result of, any
tenant improvements installed on the Property by or for the benefit of Tenant)
during the Lease Term. Subject to Paragraph 4.02(c) and Section 4.08 below,
such payment shall be made at least ten (10) days prior to the delinquency date
of the taxes. Within such ten (10) -day period, Tenant shall furnish Landlord
with satisfactory evidence that the real property taxes have been paid.
Landlord shall reimburse Tenant for any real property taxes paid by Tenant
covering any period of time prior to or after the Lease Term. If Tenant fails
to pay the real property taxes when due, Landlord may pay the taxes and Tenant
shall reimburse Landlord for the amount of such tax payment as Additional Rent.
Alternatively, Landlord
may elect to bill Tenant in advance for such
taxes and Tenant shall pay Landlord
the l amount of such taxes, as Additional Rent, at least
ten (10) days prior to delinquency. Landlord shall pay such taxes prior to delinquency provided Tenant
has timely made such payments to Landlord. Any penalty caused by Tenant’s failure to timely make
such payments shall also be Additional Rent owed by Tenant
immediately upon demand.

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

(c) Joint Assessment. If the
Property is not separately assessed, Landlord shall reasonably determine Tenant’s
share of the real property tax payable by Tenant under Paragraph 4.02(a) from
the assessor’s worksheets or other reasonably available information. Tenant
shall pay such share to Landlord within fifteen (15) days after
receipt of Landlord’s written statement.

(d) Personal
Property Taxes.

(i) Tenant shall pay all taxes charged against trade
fixtures, furnishings, equipment or any other personal property belonging to
Tenant. Tenant shall try to have personal property taxed separately from the
Property.

(ii) If any of Tenant’s personal property is taxed
with the Property, Tenant shall pay Landlord the taxes for the personal
property within fifteen (15) days after Tenant receives a written statement
from Landlord for such personal property taxes.

 

Section 4.03. Utilities.
Tenant shall pay, directly to the appropriate supplier, the cost of all natural gas, heat, light, power, sewer
service, telephone, water, refuse disposal and other utilities, and services
supplied to the Property. However, if any services or utilities are jointly
metered with other property, Landlord shall make a reasonable determination of
Tenant’s proportionate share of the cost of such utilities and services and
Tenant shall pay such share to Landlord within fifteen (15) days after receipt
of Landlord’s written statement.

Section 4.04.  Insurance Policies.

(a) Liability Insurance. During the Lease Term, Tenant shall
maintain a policy of commercial general liability insurance (sometimes known as
broad form comprehensive general liability insurance) insuring Tenant against
liability for bodily injury, property damage (including loss of use of
property) and personal injury arising out of the operation, use or occupancy of
the Property. Tenant shall name Landlord as an additional insured under such
policy. The initial amount of such insurance shall be One Million Dollars
(51.000.000) per occurrence and shall be subject to periodic increase based
upon inflation, increased liability awards, recommendation of Landlord’s professional
insurance advisers and other relevant factors. The liability insurance obtained
by Tenant under this Paragraph 4.04(a) shall (i) be primary and
non-contributing; (ii) contain cross-liability endorsements; and (iii) insure
Landlord against Tenant’s performance under Section 5.05. if the matters giving
rise to the indemnity under Section 5.05 result from the negligence of Tenant.
The amount and coverage of such insurance shall not limit Tenant’s liability
nor relieve Tenant of any other obligation under this Lease. Landlord may also
obtain comprehensive public liability insurance in an amount and with coverage
determined by Landlord insuring Landlord against liability arising out of
ownership, operation, use or occupancy of the Property. The policy obtained by
Landlord shall not be contributory and shall not provide primary insurance.

(b) Property and Rental Income Insurance. During the Lease Term,
Landlord shall maintain policies of insurance covering loss of or damage to the
Property in the full amount of its replacement value. Such policy shall contain
an Inflation Guard Endorsement and shall provide protection against all perils
included within the classification of fire, extended coverage, vandalism,
malicious mischief, special extended perils (all risk), sprinkler leakage and
any other perils which Landlord deems reasonably necessary. Landlord shall have
the right to obtain flood and earthquake insurance if required by any lender
holding a security interest in the Property. Landlord shall not obtain insurance
for Tenant’s fixtures or equipment or building improvements installed by Tenant
on the Property. During the Lease Term, Landlord shall also maintain a rental
income insurance policy, with loss payable to Landlord, in an amount equal to
one year’s Base Rent, plus estimated real property taxes and insurance
premiums. Tenant shall be liable for the payment of any deductible amount under
Landlord’s or Tenant’s insurance policies maintained pursuant to this Section
4.04, in an amount not to exceed Ten Thousand Dollars (510.000). Tenant shall
not do or permit anything to be done which invalidates any such insurance
policies.

(c) Payment of Premiums. Subject to Section 4.08, Tenant shall
pay all premiums for the insurance policies described in Paragraphs 4.04(a) and
(b) (whether obtained b Landlord or Tenant) within fifteen (‘15) days after
Tenant’s receipt of a copy of the premium statement or other evidence of the
amount due, except Landlord shall pay all premiums for non-primary
comprehensive public liability insurance which Landlord elects to obtain as
provided in Paragraph 4.04(a). For insurance policies maintained by’ Landlord
which cover improvements on the entire Project, Tenant shall pay Tenant’s
prorated share of the premiums, in accordance with the formula in Paragraph
4.05(e) for determining Tenant’s share of Common Area costs. If insurance
policies maintained by Landlord cover improvements on real property other than
the Project. Landlord shall deliver to Tenant a statement of the premium applicable
to the Property showing in reasonable detail how Tenant’s share of the premium
was computed. If the Lease Term expires before the expiration of an insurance
policy maintained by Landlord, Tenant shall be liable for Tenant’s prorated
share of the insurance premiums. Before the Commencement Date, Tenant shall,
deliver to Landlord a copy of any policy of insurance which Tenant is required
to maintain under this Section 4.04. At least thirty (30) days prior to the
expiration of any such policy. Tenant shall deliver to Landlord a renewal of
such policy. As an alternative to providing a policy of insurance, Tenant shall
have the right to provide Landlord a certificate of insurance, executed by an
authorized officer of the insurance company, showing that the insurance which
Tenant is required to maintain under this Section 4.04 is in full force and
effect and containing such other information which Landlord reasonably
requires.

 

(d) General Insurance Provisions.

(i) Any insurance which Tenant is required to maintain
under this Lease shall include a provision which requires the insurance carrier
to give Landlord not less than thirty (30) days’ written notice prior to any
cancellation or modification of such coverage.

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

(iii) Tenant shall maintain, all insurance required
under this Lease with companies holding a “General Policy Rating” of A-12 or
better, as set forth in the most current issue of “Best Key Rating Guide”.
Landlord and Tenant acknowledge the insurance markets are rapidly changing and
that insurance in the form and amounts described in this Section 4.04 may not
be available in the future. Tenant acknowledges that the insurance described in
this Section 4.04 is for the primary benefit of Landlord. If at any time during
the Lease Term, Tenant is unable to maintain the insurance required under the
Lease, Tenant shall nevertheless maintain insurance Coverage which is customary
and commercially reasonable in the insurance industry for Tenant’s type of
business, as that coverage may change from time to time. Landlord makes no
representation as to the adequacy of such insurance to protect Landlord’s or
Tenant’s interests. Therefore, Tenant shall obtain any such additional property
or liability insurance which Tenant deems necessary to protect Landlord and
Tenant.

(iv) Unless prohibited under any applicable insurance
policies maintained. Landlord and Tenant each hereby waive any and all rights
of recovery against the other, or against the officers, employees, agents or
representatives of the other, for loss of or damage to its property or the
property of others under its control, if such loss or damage is covered by any
insurance policy in force (whether or not described in this Lease) at the time
of such loss or damage. Upon obtaining the required policies of insurance,
Landlord and Tenant shall give notice to the insurance carriers of this mutual
waiver of subrogation.

Section 4.05.
Common Areas; Use, Maintenance and Costs.

(a) Common Areas.
As used in this Lease, “Common Areas” shall mean all areas within the Project
which are available for the common use of tenants of the Project and which are
not leased or held for the exclusive use of Tenant or other tenants, including,
but not limited to, parking areas, driveways, sidewalks, loading areas, access
roads, corridors, landscaping and planted areas. Landlord, from time to time, may
change the size, location, nature and use of any of the Common Areas, convert
Common Areas into leaseable areas, construct additional parking facilities
(including parking structures) in the Common Areas, and increase or decrease
Common Area land and/or facilities. Tenant acknowledges that such activities
may result in inconvenience to Tenant. Such activities and changes are
permitted if they do not materially affect Tenant’s use of the Property.

(b) Use of Common
Areas. Tenant shall have the nonexclusive right (in common with
other tenants and all others to whom Landlord has granted or may grant such
rights) to use the Common Areas for the purposes intended, subject to such
reasonable rules and regulations as Landlord may establish from time to time.
Tenant shall abide by such rules and regulations and shall use its best effort
to cause others who use the Common Areas with Tenant’s express or implied
permission to abide by Landlord’s rules and regulations. At any time, Landlord
may close any Common Areas to perform any acts in the Common Areas as, in
Landlord’s judgment, are desirable to improve the Project. Tenant shall not
interfere with the rights of Landlord, other tenants or any other person
entitled to use the Common Areas.

(c) Specific
Provision re: Vehicle Parking. Tenant shall be entitled to use the
number of vehicle parking spaces in the Project allocated to Tenant in Section
1.11 of the Lease without paying any additional rent. Tenant’s parking shall
not be reserved and shall be limited to vehicles no larger than standard size
automobiles or pickup utility vehicles. Tenant shall not cause large trucks or
other large vehicles to be parked within the Project or on the adjacent public
streets. Temporary parking of large delivery vehicles in the Project may be
permitted by the rules and regulations established by Landlord. Vehicles shall
be parked only in striped parking spaces and not in

 

driveways,
loading areas or other locations not specifically designated for parking.
Handicapped spaces shall only be used by those legally permitted to use them.
If Tenant parks more vehicles in the parking area than the number set forth in
Section 1.11 of this Lease, such conduct shall
be a material breach of this Lease. In addition to Landlord’s other remedies
under the Lease, Tenant shall pay a daily charge determined by Landlord for
each such additional vehicle.

(d) Maintenance of
Common Areas. Landlord shall maintain the Common Areas in good
order, condition and repair and shall operate the Project, in Landlord’s sole
discretion, as a first-class industrial/commercial real property development.
Tenant shall pay Tenant’s pro rata share (as determined below) of all costs
incurred by Landlord for the operation and maintenance of the Common Areas.
Common Area costs include, but are not limited to, costs and expenses for the
following: gardening and landscaping: utilities, water and sewage charges:
maintenance of signs (other than tenants’ signs); premiums for liability,
property damage, fire and other types of casualty insurance on the Common Areas
and worker’s compensation insurance; all property taxes and assessments levied
on or attributable to the Common Areas and all Common Area improvements; all
personal property taxes levied on or attributable to personal property used in
connection with the Common Areas; straight-line depreciation on personal
property owned by Landlord which is consumed in the operation or maintenance of
the Common Areas; rental or lease payments paid by Landlord for rented or
leased personal property used in the operation or maintenance of the Common
Areas; fees for required licenses and permits; repairing, resurfacing,
repaving, maintaining, painting, lighting, cleaning, refuse removal, security
and similar items; reserves for roof replacement and exterior painting and
other appropriate reserves; and a reasonable allowance to Landlord far Landlord’s
supervision of the Common Areas (not to exceed five percent (5%) of the gross
rents of the Project for the calendar year). Landlord may cause any or all of
such services to be provided by third parties and the cost of such services
shall be included in Common Area costs. Common Area costs shall not include
depreciation of real property which forms part of the Common Areas. 

(e) Tenant’s Share and Payment. Tenant shall pay Tenants annual pro rata share
of all Common Area costs prorated for any fractional month) upon written notice
from Landlord that such costs are due and payable, and in any event prior to delinquency. Tenant’s pro
rata share shall be calculated by dividing the square foot area of Property, as
set forth in Section 1.04 of the Lease, by the aggregate square foot area of
the Project: or Building (as applicable) which is leased or held for lease by
tenants, as of the date on which the computation is made. Tenant’s initial pro
rata share is set out in Paragraph 1.12(b). Any changes in the Common Area
costs and/or the aggregate area of the Project leased or held for lease during
the Lease Term shall be effective on the first day of the month after such
change occurs. Landlord may, at Landlord’s election, estimate in advance and
charge to Tenant as Common Area costs, all real property taxes for which Tenant
is liable under Section 4.02 of the Lease, all insurance premiums for which
Tenant is liable under Section 4.04 of the Lease, all maintenance and repair
costs for which Tenant is liable under Section 6.04 of the Lease, and all other
Common Area costs payable by Tenant hereunder. At Landlord’s election, such
statements of estimated Common Area costs shall be delivered monthly, quarterly
or at any other periodic intervals to be designated by Landlord. Landlord may
adjust such estimates at any time based upon Landlord’s experience and
reasonable anticipation of costs. Such adjustments shall be effective as of the
next rent payment date after notice to Tenant. Within sixty (60) days after the
end of each calendar year of the Lease Term, Landlord shall deliver to Tenant a
statement prepared in accordance with generally accepted accounting principles
setting forth, in reasonable detail, the Common Area costs paid or incurred by
Landlord during the preceding calendar year and Tenant’s pro rata share. Upon
receipt of such statement, there shall be an adjustment between Landlord and
Tenant, with payment to or credit given by Landlord (as the case may be) so
that Landlord shall receive the entire amount of Tenant’s share of such costs
and expenses for such period.

Section 4.06. Late Charges. Tenant’s failure to pay rent
promptly may cause Landlord to incur unanticipated costs. The exact amount of
such costs are impractical or extremely difficult to ascertain. Such costs may
include, but are not limited to, processing and accounting charges and late
charges which may be imposed on Landlord by any ground lease, mortgage or trust
deed encumbering the Property. Therefore, if Landlord does not receive any rent
payment within ten (10) days after it becomes due, Tenant shall pay Landlord a
late charge equal to ten percent (10%) of the overdue amount. The parties agree
that such late charge represents a fair and reasonable estimate of the costs
Landlord will incur by reason of such late payment.

Section 4.07. Interest on Past Due Obligations. Any amount owed by Tenant to Landlord which
is not paid when due shall bear interest at the rate of fifteen percent (15%)
per annum from the due date of such amount. However, interest shall not be
payable on late charges to be paid by Tenant under this Lease. The payment of
interest on such amounts shall not excuse or cure any default by Tenant under
this Lease. If the interest rate specified in this Lease is higher than the
rate permitted by law,

 

the interest rate is hereby decreased to the maximum
legal interest rate permitted by law.

Section 4.08. Impounds for Insurance Premiums and Real Property
Taxes. If requested by any ground lessor or lender to whom Landlord
has granted a security interest in the Property, or if Tenant is more than ten
(10) days late in the payment of rent more than once in any consecutive twelve
(12) -month period. Tenant small pay Landlord a sum equal to one-twelfth (1/12) of the annual real property taxes and
insurance premiums payable by Tenant under this Lease, together with each
payment of Base Rent. Landlord shall hold such payments in a non-interest bearing
impound account. If unknown, Landlord shall reasonably estimate the amount of
real property taxes and insurance premiums when due. Tenant shall pay any
deficiency of funds in the impound account to Landlord upon written request. If
Tenant defaults under this Lease, Landlord may apply any funds in the impound
account to any obligation then due under this Lease.

ARTICLE FIVE: USE OF PROPERTY

Section 5.01. Permitted Uses. Tenant may use the Property only for the
Permitted Uses set forth in Section 1.06 above.

Section 5.02. Manner of Use. Tenant shall not cause or permit the Property
to be used in any way which constitutes a violation of any law, ordinance, or governmental regulation or
order, which annoys or interferes with the rights of tenants of the Project, or
which constitutes a nuisance or waste. Tenant shall obtain and pay for all
permits, including a Certificate of Occupancy, required for Tenant’s occupancy
of the Property and shall promptly take all actions necessary to comply with
all applicable statutes, ordinances, rules, regulations, orders and
requirements regulating the use by Tenant of the Property, including the
Occupational Safety and Health Act.

Section 5.03. (See Addendum
Section 5.03)

Section 5.04. Signs and Auctions. Tenant shall not place
any signs on the Property without Landlord’s prior written consent.
Tenant shall not conduct or permit any auctions or sheriffs sales at the
Property. 

See Addendum Section 5.04

Section 5.05. Indemnity.
Tenant shall indemnify Landlord against and hold Landlord harmless from any and
all costs. claims or liability arising from:
(a) Tenant’s use of the Property; b) the conduct of Tenant’s
business or anything else done or permitted by Tenant to be done in or about
the Property, including any contamination of the Property or any other property
resulting from the presence or use
of Hazardous Material caused or permitted by Tenant; (c) any breach or default
in the performance of Tenant’s obligations under this Lease; (d) any
misrepresentation or breach of warranty by Tenant under this Lease; or (e)
other acts or omissions of Tenant. Tenant shall defend Landlord against any
such cost, claim or liability at Tenant’s expense with counsel reasonably
acceptable to Landlord or, at Landlord’s election, Tenant shall reimburse
Landlord for any legal fees or costs incurred by Landlord in connection with
any such claim. As a material part
of the consideration to Landlord, Tenant assumes all risk of damage to property
or injury to persons in or about the Property arising from any cause, and
Tenant hereby waives all claims in respect thereof against Landlord, except for
any claim arising out of Landlord’s gross negligence or willful misconduct. As
used in this Section, the term “Tenant” shall include Tenant’s employees, agents,
contractors and invitees, if applicable.

Section 5.06. Landlord’s
Access. Landlord or its agents may enter the Property at all
reasonable times to show the Property to potential buyers, investors or tenants
or other parties: to do any other act or to inspect and conduct tests in order
to monitor Tenant’s compliance with all applicable environmental laws and all
laws governing the presence and use of Hazardous Material; or for any other
purpose Landlord deems necessary. Landlord shall give Tenant prior notice of
such entry, except in the case of an emergency. Landlord may place customary
For Sale” or “For Lease” signs on the Property.

Section 5.07. Quiet Possession. If Tenant pays the rent
and complies with all other terms of this Lease, Tenant may occupy and enjoy
the Property for the full Lease Term, subject to the provisions of this Lease.

ARTICLE
SIX: CONDITION OF PROPERTY;
MAINTENANCE, REPAIRS AND ALTERATIONS

Section 6.01. Existing Conditions. Tenant accepts the
Property in its condition as of the execution of the Lease, subject to all
recorded matters, laws, ordinances, and governmental regulations and orders.
Except as provided herein, Tenant acknowledges that neither Landlord nor any
agent of Landlord has made any representation as to the condition of the
Property or the

 

suitability
of the Property for Tenant’s intended use. Tenant represents and warrants that
Tenant has ‘made its own inspection of and inquiry regarding the condition of
the Property and is not relying on any representations of Landlord or any
Broker with respect thereto. If Landlord or Landlord’s Broker has provided a
Property Information Sheet or other Disclosure Statement regarding the
Property, a copy is attached as an exhibit to the Lease.

Section 6.02. Exemption
of Landlord from Liability. Landlord shall not be liable for
any damage or injury to the person, business (or any loss of income therefrom),
goods, wares, merchandise or other property of Tenant. Tenant’s employees,
invitees, customers or any other person in or about the Property, whether such
damage or injury is caused by or results from: (a) fire, steam, electricity,
water, gas or rain; (b) the breakage, leakage, obstruction or other defects of
pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures
or any other cause: (c) conditions arising in or about the Property or upon
other portions of the Project, or from other sources or places; or (d) any act
or omission of any other tenant of the Project. Landlord shall not be liable
for any such damage or injury even though the cause of or the means of
repairing such damage or injury are not accessible to Tenant. The provisions of
this Section 6.02 shall riot, however, exempt Landlord from liability for
Landlord’s gross negligence or willful misconduct.

Section 6.03. Landlord’s
Obligations.

(a) Except as provided in Article Seven (Damage or
Destruction) and Article Eight (Condemnation). Landlord shall keep the
following in good order, condition and repair: the foundations, exterior walls
and roof of the Property (including painting the exterior surface of the
exterior walls of the Property not more often than once every five (5) years,
if necessary) and all components of electrical, mechanical, plumbing, heating
and air conditioning systems and facilities located in the Property which are
concealed or used in common by tenants of the Project. However,’ Landlord shall
not be obligated to maintain or repair windows, doors, plate glass or the
interior surfaces of exterior walls. Landlord shall make repairs under this
Section 6.03 within a reasonable time after receipt of written notice from
Tenant of the need for such repairs.

(b) Tenant shall pay or reimburse Landlord for all
costs Landlord incurs under Paragraph 6.03(a) above as Common Area costs as
provided for in Section 4.05 of
the Lease. Tenant waives the benefit of any statute in effect now or in the
future which might give Tenant the right to make repairs at Landlord’s expense
or to terminate this Lease due to Landlord’s failure to keep the Property in
good order, condition and repair. 

Section 6.04. Tenant’s Obligations.

(a) Except as provided in Section 6.03, Article Seven
(Damage or Destruction) and Article Eight (Condemnation). Tenant shall keep all
portions of the Property (including structural. nonstructural. interior.
systems and equipment) in good order, condition and repair (including interior
repainting and refinishing, as needed). If any portion of the Property or any
system or equipment in the Property which Tenant is obligated to repair cannot
be fully repaired or restored, Tenant shall promptly replace such portion of
the Property or system or equipment in the Property, regardless of whether the
benefit of such replacement extends beyond the Lease Term; but if the benefit
or useful life of such replacement extends beyond the Lease Term (as such term
may be extended by exercise of any options), the useful life of such
replacement shall be prorated over the remaining portion of the Lease Term (as
extended), and Tenant shall be
liable only for that
portion of the cost which is applicable to the Lease Term (as extended). Tenant
shall maintain a preventive maintenance contract providing for the regular
inspection and maintenance of the heating and air conditioning system by a
licensed heating and air conditioning contractor, unless Landlord maintains
such equipment under Section 6.03 above. If any part of the Property or the
Project is damaged by any act or omission of Tenant, Tenant shall pay Landlord
the cost of repairing or replacing such damaged property, whether or not
Landlord would otherwise be obligated to pay the cost of maintaining or
repairing such property. It is the intention of Landlord and Tenant that at all
times Tenant shall maintain the portions of the Property which Tenant is obligated
to maintain in an attractive, first-class and fully operative condition.

(b) Tenant shall fulfill all of Tenant’s obligations
under this Section 6.04 at Tenant’s sole expense. If Tenant fails to maintain,
repair or replace the Property as required by this Section 6.04, Landlord may,
upon ten (10)

 

days’
prior notice to Tenant (except that no notice shall be required in the case of
an emergency), enter the Property and perform such maintenance or repair
(including replacement. as needed) on behalf of Tenant. In such case, Tenant
shall reimburse Landlord for all costs incurred in performing such maintenance
or repair immediately upon demand.

Section 6.05. Alterations,
Additions, and Improvements.

(a) Tenant shall not make any alterations, additions,
or improvements to the Property without Landlord’s prior written consent.
except for non-structural alterations which do not exceed Ten Thousand Dollars
($10,000) in cost cumulatively over the Lease Term and which are not visible
from the outside of any building of which the Property is part. Landlord may
require Tenant to provide demolition and/or lien and completion bonds in form
and amount satisfactory to Landlord. Tenant shall promptly remove any
alterations, additions, or improvements constructed in violation of this
Paragraph 6.05(a) upon Landlord’s written request. All alterations, additions,
and improvements shall be done in a good and workmanlike manner, in conformity
with all applicable laws and regulations, and by a contractor approved by
Landlord. Upon completion of any such work, Tenant shall provide Landlord with “as
built” plans, copies of all construction contracts, and proof of payment for
all labor and materials.

(b) Tenant shall pay when due all claims for labor and
material furnished to the Property. Tenant shall give Landlord at least twenty
(20) days’ prior written notice of the commencement of any work on the
Property, regardless of whether Landlord’s consent to such work is required.
Landlord may elect to record and post notices of non-responsibility on the
Property.

(c) Section 6.05 (c) See Addendum

Section 6.06. Condition
upon Termination. Upon the termination of the Lease, Tenant shall
surrender the Property to Landlord, broom clean and in the same condition as
received except for ordinary wear and tear which Tenant was not otherwise
obligated to remedy under any provision of this Lease. However, Tenant shall
not be obligated to repair any damage which Landlord is required to repair
under Article Seven (Damage or Destruction). In addition, Landlord may require
Tenant to remove any alterations, additions or improvements (whether or not
made with Landlord’s consent) prior to the expiration of the Lease and to
restore the Property to its prior condition, all at Tenant’s expense. All
alterations, additions and improvements which Landlord has not required Tenant
to remove shall become Landlord’s property and shall be surrendered to Landlord
upon the expiration or earlier termination of the Lease, except that Tenant may remove any of Tenant’s machinery or
equipment which can be removed without material damage to the Property. Tenant
shall repair, at Tenant’s expense, any damage to the Property caused by the
removal of any such machinery or equipment. In no event, however, shall Tenant
remove any of the following materials or equipment (which shall be deemed
Landlord’s property) without Landlord’s prior written consent: any power wiring
or power panels; lighting or lighting fixtures; wall coverings; drapes, blinds
or other window coverings; carpets or other floor coverings; heaters, air
conditioners or any other heating or air conditioning equipment; fencing or
security gates; or other similar building operating equipment and decorations.

ARTICLE
SEVEN: DAMAGE OR DESTRUCTION

Section 7.01. Partial
Damage to Property.

(a) Tenant shall notify Landlord in writing
immediately upon the occurrence of any damage to the Property. If the Property
is only partially damaged (i.e., less than fifty percent (50%) of the Property
is untenantable as a result of such damage or less than fifty percent (50%) of
Tenant’s operations are materially impaired) and if the proceeds received
by Landlord from the insurance policies described in Paragraph 4.04(b) are
sufficient to pay for the necessary repairs, this Lease shall remain in effect
and Landlord shall repair the damage as
soon as reasonably possible.
Landlord may elect (but is not required) to repair any damage to Tenant’s
fixtures, equipment, or improvements. 

(b) If the insurance proceeds received by Landlord are
not sufficient to pay the entire cost of repair, or if the cause of the damage
is not covered by the insurance policies which Landlord maintains under
Paragraph 4.04(b), Landlord may elect either to (i) repair the damage as soon
as

 

reasonably
possible. in which case this Lease shall remain in full force and effect, or
(ii) terminate this Lease as of the date the damage occurred. Landlord shall
notify Tenant within thirty (30) days after receipt of notice of the occurrence
of the damage whether Landlord elects to repair the damage or terminate the
Lease. If Landlord elects to repair the damage, Tenant shall pay Landlord the “deductible
amount” (if any) under Landlord’s insurance
policies and, if the damage was due to an act or omission of Tenant, or Tenant’s
employees, agents, contractors or invitees, the difference between the actual
cost of repair and any insurance proceeds received by Landlord. If Landlord
elects to terminate this Lease, Tenant may elect to continue this Lease in full
force and effect, in which case Tenant shall repair any damage to the Property
and any building in which the Property is located. Tenant shall pay the cost of
such repairs, except that upon satisfactory completion of such repairs,
Landlord shall deliver to Tenant any insurance proceeds received by Landlord
for the damage repaired by Tenant. Tenant shall give Landlord written notice of
such election within ten (10) days after receiving Landlord’s termination
notice.

(c) If the damage to the Property occurs during the
last six (6) months of the Lease Term and such damage will require more than
thirty (30) days to repair, either Landlord or Tenant may elect to terminate
this Lease as of the date the damage occurred, regardless of the sufficiency of
any insurance proceeds. The party electing to terminate this Lease shall give
written notification to the other party of such election within thirty (30)
days after Tenant’s notice to Landlord of the occurrence of the damage.

Section 7.02. Substantial
or Total Destruction. If the Property is substantially or totally
destroyed by any cause whatsoever (i.e., the damage to the Property is greater
than partial damage as described in Section 7.01), and regardless of whether
Landlord receives any insurance proceeds, this Lease shall terminate the later
of (i) the date the destruction occurred and (ii) the date the Tenant ceases to
do business at the property. Notwithstanding the preceding sentence, if the
Property can be rebuilt within six (6) months after the date of destruction,
Landlord may elect to rebuild the Property at Landlord’s own expense, in which
case this Lease shall remain in full force and effect. Landlord shall notify
Tenant of such election within thirty (30) days after Tenant’s notice of the
occurrence of total or substantial destruction. If Landlord so elects, Landlord
shall rebuild the Property at Landlord’s sole expense, except that if the
destruction was caused by an act or omission of Tenant. Tenant shall pay
Landlord the difference between the actual cost of rebuilding, and any insurance
proceeds received by Landlord.

Section 7.03. Temporary
Reduction of Rent. If the Property is destroyed or damaged and
Landlord or Tenant repairs or restores the Property pursuant to the provisions
of this Article Seven, any rent payable during the period of such damage,
repair and/or restoration shall be reduced according to the degree, if any, to
which Tenant’s use of the Property is impaired. However, the reduction shall
not exceed the sum of one year’s payment of Base Rent, insurance premiums and
real property taxes. Except for such possible reduction in Base Rent, insurance
premiums and real property taxes, Tenant shall not be entitled to any
compensation, reduction, or reimbursement from Landlord as a result of any
damage, destruction, repair, or restoration of or to the Property.

Section 7.04. Waiver.
Tenant waives the protection of any statute, code or judicial
decision which grants a tenant the right to terminate a lease in the event of
the substantial or total destruction of the leased property. Tenant agrees that
the provisions of Section 7.02 above shall govern the rights and obligations of
Landlord and Tenant in the event of any substantial or total destruction to the
Property.

ARTICLE
EIGHT: CONDEMNATION

If all or any portion of the Property is taken under
the power of eminent domain or sold under the threat of that power (all of
which are called “Condemnation”), this Lease shall terminate as to the part
taken or sold on the date the condemning authority takes title or possession,
whichever occurs first. If more than twenty percent (20%) of the floor area of
the building in which the Property is located, or which is located on the
Property, is taken, either Landlord or Tenant may terminate this Lease as of
the date the condemning authority takes title or possession, by delivering
written notice to the other within ten (10) days after receipt of written
notice of such taking (or in the absence of such notice, within ten (10) days
after the condemning authority takes title or possession). If neither

 

Landlord
nor Tenant terminates this Lease, this Lease shall remain in effect as to the
portion of the Property not taken, except that the Base Rent and Additional
Rent shall be reduced in proportion to the reduction in the floor area of the
Property. Any Condemnation award or payment shall be distributed in the
following order: (a) first, to any ground lessor, mortgagee or beneficiary
under a deed of trust encumbering the Property, the amount of its interest in
the Property; (b) second, to Tenant, only the amount of any award specifically
designated for loss of or damage to Tenant’s trade fixtures or removable
personal property; and (c) third, to Landlord, the remainder of such award,
whether as compensation for reduction in the value of the leasehold, the taking
of the fee, or otherwise. If this Lease is not terminated, Landlord shall
repair any damage to the Property caused by the Condemnation, except that
Landlord shall not be obligated to repair any damage for which Tenant has been
reimbursed by the condemning authority. If the severance damages received by
Landlord axe not sufficient to pay for such repair, Landlord shall have the
right to either terminate this Lease or make such repair at Landlord’s expense.

ARTICLE
NINE: ASSIGNMENT AND SUBLETIING

Section 9.01. Landlord’s
Consent Required. No portion of the Property or of Tenant’s interest
in this Lease may be acquired by any other person or entity, whether by sale,
assignment, mortgage, sublease, transfer, operation of law, or act of Tenant,
without Landlord’s prior written consent, except as provided in Section 9.02
below. Landlord has the right to grant or withhold its consent as provided in
Section 9.05 below. Any attempted transfer without consent shall be void and
shall constitute a non-curable breach of this Lease. If Tenant is a
partnership, any cumulative transfer of more than twenty percent (20%) of the
partnership interests shall require Landlord’s consent. If Tenant is a
corporation, any change in the ownership of a controlling interest of the
voting stock of the corporation shall require Landlord’s consent.

Section 9.02. Tenant
Affiliate. Tenant may assign this Lease or sublease the Property,
without Landlord’s consent, to any corporation which controls, is controlled by
or is under common control with Tenant,
or to any corporation resulting from the merger of or consolidation with Tenant
(“Tenant’s Affiliate”). In such case, any Tenant’s Affiliate shall assume in
writing all of Tenant’s obligations under this Lease.

Section 9.03.  No  Release of Tenant. No transfer permitted by
this Article Nine, whether with or without Landlord’s consent, shall release
Tenant or change Tenant’s primary liability to pay the rent and to perform all
other obligations of Tenant under this Lease. Landlord’s acceptance of rent
from any other person is not a waiver of any provision of this Article Nine.
Consent to one transfer is not a consent to any subsequent transfer. If Tenant’s
transferee defaults under this Lease, Landlord may proceed directly against
Tenant without pursuing remedies against the transferee. Landlord may consent
to subsequent assignments or modifications of this Lease by Tenant’s
transferee, without notifying Tenant or obtaining its consent. Such action
shall not relieve Tenant’s liability under this Lease. . . -

Section 9.05. Landlord’s
Consent.

(a) Tenant’s request for consent to any transfer
described in Section 9.01 shall set forth in writing the details of the
proposed transfer, including the name, business and financial condition of the
prospective transferee, financial details of the proposed transfer (e.g., the
term of and the rent and security deposit payable under any proposed assignment
or sublease), and any other information Landlord deems relevant. Landlord shall
have the right to terminate this Lease or to withhold consent, if reasonable,
or to grant consent. based on the following factors: (i) the business of the
proposed assignee or subtenant and the proposed use of the Property; (ii) the
net worth and financial reputation of the proposed assignee or subtenant: (iii)
Tenant’s compliance with all of its obligations under the Lease; and (iv) such
other factors as Landlord may reasonably deem relevant. If Landlord objects to
a proposed assignment solely because of the net worth and/or financial
reputation of the proposed assignee, Tenant may nonetheless sublease (but not
assign), all or a portion of the Property to the proposed -transferee, but only
on the other terms of the proposed transfer.

(b) If Tenant assigns or subleases, the following
shall apply:

(i) Tenant shall pay to Landlord as Additional Rent
under the Lease the Landlord’s Share (stated in Section 1.13) of the Profit
(defined below) on such transaction as and when received by Tenant, unless
Landlord gives

 

written
notice to Tenant and the assignee or subtenant that Landlord’s Share shall be
paid by the assignee or subtenant to Landlord directly. The “Profit” means (A)
all amounts paid to Tenant for such assignment or sublease, including “key”
money, monthly rent in excess of the monthly rent payable under the Lease, and
all fees and other consideration paid for the assignment or sublease, including
fees under any collateral agreements, less (B) costs and expenses directly
incurred by Tenant in connection with the execution and performance of such
assignment or sublease for real estate broker’s commissions and costs of
renovation or construction of tenant improvements required under such
assignment or sublease. Tenant is entitled to recover such costs and expenses
before Tenant is obligated to pay the Landlord’s Share to Landlord. The Profit
in the case of a sublease of less than all the Property is the
rent allocable to the subleased space as a percentage on a square footage
basis.

(ii) Tenant shall provide Landlord a written statement
certifying all amounts to be paid from any assignment or sublease of the
Property within thirty (30) days after the transaction documentation is signed,
and Landlord may inspect Tenant’s books and records to verify the accuracy of
such statement. On written request, Tenant shall promptly furnish to Landlord
copies of all the transaction documentation, all of which shall be certified by
Tenant to be complete, true and correct. Landlord’s receipt of Landlord’s Share
shall not be a consent to any further assignment or subletting. The breach of
Tenant’s obligation under this Paragraph 9.05(b) shall be a material default of
the Lease.

(c) See Addendum Section 9.05(c)

Section 9.06. No Merger. No merger
shall result from Tenant’s sublease of the Property under this Article Nine,
Tenant’s surrender of this Lease or the termination of this Lease in any other
manner. In any such event, Landlord may terminate any or all subtenancies or
succeed to the interest of Tenant as sublandlord under any or all subtenancies.

ARTICLE TEN: DEFAULTS;
REMEDIES

Section 10.01. Covenants
and Conditions. Tenant’s performance of each of Tenant’s obligations
under this Lease is a condition as well as a covenant Tenant’s right to
continue in possession of the Property is conditioned upon such performance.
Time is of the essence in the performance of all covenants and conditions.

Section 10.02. Defaults.
Tenant shall be in material default under this Lease:

(a) If Tenant abandons the Property or if Tenant’s
vocation of the Property results in the cancellation of any insurance described
in Section 4.04;

(b) If Tenant fails to pay rent or any other charge
when due;

(c) If Tenant fails to perform any of Tenant’s
non-monetary obligations under this Lease for a period of thirty (30) days after written notice from Landlord;
provided that if more than thirty (30) days are required to complete such
performance. Tenant shall not be in default if Tenant commences such
performance within the thirty (30) -day period and thereafter diligently pursues
its completion. However, Landlord shall not be required to give such notice if
Tenant’s failure to perform constitutes a non-curable broach of this Lease. The
notice required by this Paragraph is intended to satisfy any and all notice
requirements imposed by law on Landlord and is not in addition to any such
requirement.

(d) (i) If Tenant makes a general assignment or
general arrangement for the benefit of creditors: (ii) if a petition for
adjudication of bankruptcy or for reorganization or rearrangement is filed by
or against Tenant and is not dismissed within thirty (30) days; (iii) if a
trustee or receiver is appointed to take possession of substantially all of
Tenant’s assets located at the Property or of Tenants interest in this Lease
and possession is not restored to Tenant within thirty (30) days; or (iv) if substantially all of
Tenant’s assets located at the Property or of Tenant’s interest in this Lease
is subjected to attachment, execution or other judicial seizure which is not
discharged within thirty (30) days.
If a court of competent jurisdiction determines that any of the acts described
in this subparagraph (d) is not a default under this Lease, and a trustee is
appointed to take possession (or

 

if
Tenant remains a debtor in possession) and such trustee or Tenant transfers
Tenant’s interest hereunder, then Landlord shall receive, as Additional Rent,
the excess, if any, of the rent (or any other consideration) paid in connection
with such assignment or sublease over the rent payable by Tenant under this
Lease.

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

Section 10.03. Remedies.
On the occurrence of any material default by Tenant, Landlord may, at any time
thereafter, with or without notice or demand and without limiting Landlord in
the exercise of any right or remedy which Landlord may have:

(a) Terminate Tenant’s right to possession of the
Property by any lawful means, in which case this Lease shall terminate and
Tenant shall immediately surrender possession of the Property to Landlord.*In
such event, Landlord shall be entitled to recover from Tenant all damages
incurred by Landlord by reason of Tenant’s default, including (i) the worth at
the time of the award of the unpaid Base Rent, Additional Rent and other
charges which Landlord had earned at the time of the termination; (ii) the
worth at the time of the award of the amount by which the unpaid Base Rent,
Additional Rent and other charges which Landlord would have earned after
termination until the time of the award exceeds the amount of such rental loss
that Tenant proves Landlord could have reasonably avoided; (iii) the worth at
the time of the award of the amount by which the unpaid Base Rent. Additional
Rent and other charges which Tenant would have paid for the balance of the
Lease term after the time of award exceeds the amount of such rental loss that
Tenant proves Landlord could have reasonably avoided; and (iv) any other amount
necessary to compensate Landlord for all the detriment proximately caused by
Tenant’s failure to perform its obligations under the Lease or which in the
ordinary course of things would be likely to result therefrom, including, but
not limited to, any costs or expenses Landlord incurs in maintaining or
preserving the Property after such default, the cost of recovering possession
of the Property, expenses of reletting, including necessary renovation or
alteration of the Property, Landlord’s reasonable attorneys’ fees incurred in
connection therewith, and any real estate commission paid or payable. As used
in subparts (i) and (ii) above, the “worth at the time of time award” is
computed by allowing interest on unpaid amounts at the rate of fifteen percent
(15%) per annum, or such lessor amount as may then be the maximum lawful rate.
As used in subpart (iii) above, the “worth at the time of the award” is computed
by discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of the award, plus one percent (1%). If Tenant has abandoned the Property,
Landlord shall have the option of (i) retaking possession of the Property and
recovering from Tenant the amount specified in this Paragraph 10.03(a) and/or
(ii) proceeding under Paragraph 10.03(b). 

(b) Maintain
Tenant’s right to possession, in which case this Lease shall continue in effect
whether or not Tenant has abandoned the Property. In such event, Landlord shall
be entitled to enforce all of Landlord’s rights and remedies under this Lease,
including the right to recover the rent as it becomes due; Landlord shall have
the remedy described in California Civil Code Section 1951.4 (lessor may
continue lease in effect after lessee’s breach and abandonment and recover rent
as it becomes due, if lessee has the right to sublet or assign, subject only to
reasonable limitations.

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

*If
Tenant shall be served with a demand for the payment of past due rent or any
other charge, any payments rendered hereafter to cure any default by Tenant
shall be made only by cashier’s check. 

Section 10.04.
Repayment of “Free” Rent. If this Lease provides for a postponement
of any monthly rental payments, a period of “free” rent or other rent
concession, such postponed rent or “free” rent is called the “Abated Rent”.
Tenant shall be credited with having paid all of the Abated Rent on the
expiration of the Lease Term only if Tenant
has fully, faithfully, and punctually performed all of Tenant’s obligations
hereunder, including the payment of all rent (other than the Abated Rent) and
all other monetary obligations and the surrender of the Property in the
physical condition required by this Lease. Tenant acknowledges that its right
to receive credit

 

for the
Abated Rent is absolutely conditioned upon Tenant’s full, faithful and punctual
performance of its obligations under this Lease. If Tenant defaults and does
not cure within any applicable grace period, the Abated Rent shall immediately
become due and payable in full and this Lease shall be enforced as if there
were no such rent abatement or other rent concession. In such case Abated Rent
shall be calculated based on the full initial rent payable under this Lease.

Section 10.05. Automatic
Termination. Notwithstanding any other term or provision hereof to
the contrary, the Lease shall terminate on the occurrence of any act which
affirms the Landlord’s intention to terminate the Lease as provided in Section
10.03 hereof, including the filing of an unlawful detainer action against
Tenant. On such termination, Landlord’s damages for default shall include all
costs and fees, including reasonable attorneys’ fees that Landlord incurs in
connection with the filing, commencement, pursuing and/or defending of any
action in any bankruptcy court or other court with respect to the Lease; the
obtaining of relief from any stay in bankruptcy restraining any action to evict
Tenant: or the pursuing of any action with respect to Landlord’s right to
possession of the Property. All such damages suffered (apart from Base Rent and
other rent payable hereunder) shall constitute pecuniary damages which must be
reimbursed to Landlord prior to assumption of the Lease by Tenant or any
successor to Tenant in any bankruptcy or other proceeding.

Section 10.06. Cumulative
Remedies. Landlord’s exercise of any right or remedy shall not
prevent it from exercising any other right or remedy.

ARTICLE
ELEVEN: PROTECTION OF LENDERS

Section 11.01. Subordination.
Landlord shall have the right to subordinate this Lease to any ground lease,
deed of trust or mortgage encumbering the Property, any advances made on the
security thereof and any renewals, modifications, consolidations, replacements
or extensions thereof, whenever made or recorded. Tenant shall cooperate with
Landlord and any lender which is acquiring a security interest in the Property
or the Lease. Tenant shall execute such further documents and assurances as
such lender may require in the form attached hereto as Exhibit “B” or such
other form as is then required by Landlord’s lender, provided that Tenant’s
obligations under this Lease shall not be increased in any material way (the
performance of ministerial acts shall not be deemed material), and Tenant shall
not be deprived of its rights under this Lease. Tenant’s right to quiet
possession of the Property during the Lease Term shall not be disturbed if
Tenant pays the rent and performs all of Tenant’s obligations under this Lease
and is not otherwise in default. If any ground lessor, beneficiary or mortgagee
elects to have this Lease prior to the lien of its ground lease, deed of trust
or mortgage and gives written notice thereof to Tenant. this Lease shall be
deemed prior to such ground lease, deed of trust or mortgage whether this Lease
is dated prior or subsequent to the date of said ground lease, deed of trust or
mortgage or the date of recording thereof. Tenant
waves the provisions of any
current or future statute, rule or law which may give or purport to give Tenant any right or election to terminate
or otherwise adversely affect this Lease and the obligations of the Tenant
hereunder in the event of any foreclosure proceeding or sale.

Section 11.02. Attornment.
If Landlord’s interest in the Property is acquired by any ground lessor,
beneficiary under a deed of trust, mortgagee, or purchaser at a foreclosure
sale, Tenant shall attorn to the transferee of or successor to Landlord’s
interest in the Property and recognize such transferee or successor as Landlord
under this Lease. Tenant waives the protection of any statute or rule of law
which gives or purports to give Tenant any right to terminate this Lease or
surrender possession of the Property upon the transfer of Landlord’s interest.

Section 11.03. Signing
of Documents. Tenant shall sign and deliver any instrument or
documents necessary or, appropriate to evidence any such attornment or
subordination or agreement to do so. If Tenant fails to do so within ten (10) days after written request, Tenant hereby
makes, constitutes and irrevocably appoints Landlord, or any transferee or
successor of Landlord, the attorney-in-fact of Tenant to execute and deliver
any such instrument or document.

Section 11.04. Estoppel
Certifcates.

(a) Upon Landlord’s written request, Tenant shall
execute, acknowledge and deliver to Landlord a written statement in the form
attached hereto as Exhibit “C” or such other form as in then required by
Landlord’s lender,

 

certifying:
(i) that none of the terms or provisions of this Lease have been changed (or if
they have been changed, stating how they have been changed); (ii) that this
Lease has not been cancelled or terminated: (iii) the last date of payment of
the Base Rent and other charges and the time period covered by such payment;
(iv) that Landlord is not in default under this Lease (or, if Landlord is
claimed to be in default, stating why); and (v) such other representations or information with respect to
Tenant or the Lease as Landlord may reasonably request or which any prospective
purchaser or encumbrancer of the Property may require. Tenant shall deliver
such statement to Landlord within ten (10) days
after Landlord’s request. Landlord may give any such statement by Tenant to any
prospective purchaser or encumbrancer of the Property. Such purchaser or
encumbrancer may rely conclusively upon such statement as true and correct.

(b) If Tenant does not deliver such statement to
Landlord within such ten (10) -day period, Landlord, and any prospective
purchaser or encumbrancer, may conclusively presume and rely upon the following
facts: (i) that the terms and provisions of this Lease have not been changed
except as otherwise represented by Landlord: (ii) that this Lease has not been
cancelled or terminated except as otherwise represented by Landlord; (iii) that
not more than one month’s Base Rent or other charges have been paid in advance;
and (iv) that Landlord is not in default under the Lease. In such event, Tenant
shall be estopped from denying the truth of such facts. 

Section 11.05. Tenant’s
Financial Condition. Within ten (10) days after written request from
Landlord. Tenant shall deliver to Landlord such financial statements as
Landlord reasonably requires to verify the net worth of Tenant or any assignee,
subtenant, or guarantor of Tenant. In addition, Tenant shall deliver to any
lender designated by Landlord any financial statements required by such lender
to facilitate the financing or refinancing of the Property. Tenant represents
and warrants to Landlord that each such financial statement is a true and
accurate statement as of the date of such statement. All financial statements
shall be confidential and shall be used only for the purposes set forth in this
Lease.

ARTICLE
TWELVE: LEGAL COSTS

Section 12.01 Legal
Proceedings. if Tenant or Landlord shall be in breach or default
under this Lease, such party (the “Defaulting Party”) shall reimburse the other
party (the “Nondefaulting Party”) upon demand for any costs or expenses that
the Nondefaulting Party incurs in connection with any breach or default of the
Defaulting Party under this Lease, whether or not suit is commenced or judgment
entered. Such costs shall include legal fees and costs incurred for the
negotiation of a settlement, enforcement of rights or otherwise. Furthermore,
if any action for breach of or to enforce the provisions of this Lease is
commenced, the court in such action shall award to the party in whose favor a
judgment is entered, a reasonable sum as attorneys’ fees and costs. The losing party in such action shall pay such attorneys’
fees and costs. Tenant shall also indemnify Landlord against and hold Landlord
harmless from all costs, expenses, demands and liability Landlord may incur if
Landlord becomes or is made a party to any claim or action (a) instituted by
Tenant against any third party, or by any third party against Tenant, or by or
against any person holding any interest under or using the Property by license
of or agreement with Tenant; (b) for foreclosure of any lien for labor or
material furnished to or for Tenant or such other person; (c) otherwise arising
out of or resulting from any act or transaction of Tenant or such other person;
or (d) necessary to protect Landlord’s interest under this Lease in a
bankruptcy proceeding, or other proceeding under Title 11 of the United States
Code, as amended. Tenant shall defend Landlord against any such claim or action
at Tenant’s expense with counsel reasonably acceptable to Landlord or, at
Landlord’s election. Tenant shall reimburse Landlord for any legal fees or
costs Landlord incurs in any such claim or action.

Section 12.02. Landlord’s Consent. Tenant shall pay
Landlord’s reasonable attorneys’ fees incurred in connection with Tenant’s
request for Landlord’s consent under Article Nine (Assignment and Subletting),
or in connection with any other act which Tenant proposes to do and which requires
Landlord’s consent.

ARTICLE
THIRTEEN: MISCELLANEOUS PROVISIONS

Section 13.01. Non-Discrimination.
Tenant promises, and it is a condition to the continuance of this Lease, that
there will be no discrimination against, or segregation of, any person or group
of persons on

 

the
basis of race, color, sex, creed, national origin or ancestry in the leasing,
subleasing, transferring, occupancy, tenure or use of the Property or any
portion thereof.

Section 13.02. Landlord’s
Liability; Certain Duties.

(a) As used in this Lease, the term “Landlord” means
only the current owner or owners of the fee title to the Property or Project or
the leasehold estate under a ground lease of the Property or Project at the
time in question. Each Landlord is obligated to perform the obligations of
Landlord under this Lease only during the time such Landlord owns such interest
or title. Any Landlord who transfers its title or interest is relieved of all
liability with respect to the obligations of Landlord under this Lease to be performed
on or after the date of transfer. However, each Landlord shall deliver to its
transferee all funds that Tenant previously paid if such funds have not yet
been applied under the terms of this Lease.

(b) Tenant shall give written notice of any failure by
Landlord to perform any of its obligations under this Lease to Landlord and to
any ground lessor, mortgagee or beneficiary under any deed of trust encumbering
the Property whose name and address have been furnished to Tenant in writing.
Landlord shall not be in default under this Lease unless Landlord (or such
ground lessor, mortgagee or beneficiary) fails to cure such non-performance
within thirty (30) days after receipt of Tenant’s notice. However, if such
non-performance reasonably requires more than thirty (30) days to cure,
Landlord shall not be in default if such cure is commenced within such thirty
(30) -day period and thereafter diligently pursued to completion.

(c) Notwithstanding any term or provision herein to
the contrary, the liability of Landlord for the performance of its duties and
obligations under this Lease is limited to Landlord’s interest in the Property
and the Project, and neither the Landlord nor its partners, shareholders,
officers or other principals shall have any personal liability under this
Lease.

Section 13.03. Severability.
A determination by a court of competent jurisdiction that any provision of this Lease or any part thereof is illegal or
unenforceable shall not cancel or invalidate the remainder of such provision or
this Lease, which shall remain in full force and effect.

Section 13.04. Interpretation.
The captions of the Articles or Sections of this Lease are to assist the
parties in reading this Lease and are not a part
of the terms or provisions of this Lease. Whenever required by the context of
this Lease, the singular shall include the plural and the plural shall include
the singular. The masculine, feminine and neuter genders shall each include the
other. In any provision relating to the conduct, acts or omissions of Tenant,
the term “Tenant” shall include Tenant’s agents, employees, contractors,
invitees, successors or others using the Property with Tenant’s expressed or
implied permission. 

Section 13.05. Incorporation
of Prior Agreements; Modifications. This Lease is the only agreement
between the parties pertaining to the lease of the Property and no other
agreements are effective. All amendments to this Lease shall be in writing and
signed by all parties. Any other attempted amendment shall be void.

Section 13.06. Notices.
All notices required or permitted under this Lease shall be in writing arid
shall be personally delivered or sent by certified mail, return receipt
requested, postage prepaid. Notices to Tenant shall be delivered to the address
specified in Section 1.03 above, except that upon Tenant’s taking possession of
the Property, the Property shall be Tenant’s address for notice purposes.
Notices to Landlord shall be delivered to the address specified in Section 1.02 above. All notices shall be effective upon
delivery. Either party may change its notice address upon written notice to the
other party.

Section 13.07. Waivers.
All waivers must be in writing and signed by the waiving party. Landlord’s
failure to enforce any provision of this Lease or its acceptance of rent shall
not be a waiver and shall not prevent Landlord from enforcing that provision or
any other provision of this Lease in the future. No statement on a payment
check from Tenant or in a letter accompanying a payment check shall be binding
on Landlord. Landlord may, with or without notice to Tenant, negotiate such
check without being bound to the conditions of such statement.

 

Section 13.08. No
Recordation. Tenant shall not record this Lease without prior
written consent from Landlord. However, either Landlord or Tenant may require
that a “Short Form” memorandum of this Lease executed by both parties be
recorded. The party requiring such recording shall pay all transfer taxes and
recording fees.

Section 13.09. Binding
Effect; Choice of Law. This Lease binds any party who legally
acquires any rights or interest in this Lease from Landlord or Tenant. However,
Landlord shall have no obligation to Tenant’s successor unless the rights or
interests of Tenant’s successor are acquired in accordance with the terms of
this Lease. The laws of the state in which the Property is located shall govern
this Lease.

Section 13.10. Corporate
Authority; Partnership Authority. If Tenant is a corporation, each
person signing this Lease on behalf of Tenant represents and warrants that he
has full authority to do so and that this Lease binds the corporation. Within
thirty (30) days after this Lease is signed, Tenant shall deliver to Landlord a
certified copy of a resolution of Tenant’s Board of Directors authorizing the
execution of this Lease or other evidence of such authority reasonably
acceptable to Landlord. If Tenant is a partnership, each person or entity
signing this Lease for Tenant represents and warrants that he or it is a
general partner of the partnership, that he or it has full authority to sign
for the partnership and that this Lease binds the partnership and all general
partners of the partnership. Tenant shall give written notice to Landlord of
any general partner’s withdrawal or addition. Within thirty (30) days after
this Lease is signed, Tenant shall deliver to Landlord a copy of Tenant’s
recorded statement of partnership or certificate of limited partnership.

Section 13.11. Joint
and Several Liability. All parties signing this Lease as Tenant
shall be jointly and severally liable for all obligations of Tenant.

Section 13.12. Force
Majeure. If Landlord cannot perform any of its obligations due to
events beyond Landlord’s control, the time provided for performing such
obligations shall be extended by a period of time equal to the duration of such
events. Events beyond Landlord’s control include, but are not limited to, acts
of God, war, civil commotion, labor disputes, strikes, fire, flood or other
casualty, shortages of labor or material, government regulation or restriction
and weather conditions.

Section 13.13. Execution
of Lease. This Lease may be executed in counterparts and, when all
counterpart documents are executed, the counterparts shall constitute a single
binding instrument. Landlord’s delivery of this Lease to Tenant shall not be
deemed to be an offer to lease and shall not be binding upon either party until
executed and delivered by both parties.

Section 13.14. Survival.
All representations and warranties of Landlord and Tenant shall survive the
termination of this Lease.

ARTICLE
FOURTEEN: BROKERS

Section 14.01. Broker’s
Fee. When this Lease is signed by and delivered to both Landlord and
Tenant. Landlord shall pay a real estate commission to Landlord’s Broker named
in Section 1.08 above, if any, as
provided in the written agreement
between Landlord and Landlord’s Broker, or the sum stated in Section 1.09 above for services rendered to Landlord by
Landlord’s Broker in this transaction. Landlord shall pay Landlord’s Broker a
commission if Tenant exercises any option to extend the Lease Term or to buy
the Property, or any similar option or right which Landlord may grant to
Tenant, or if Landlord’s Broker is the procuring cause of any other lease or
sale entered into between Landlord and Tenant covering the Property. Such
commission shall be the amount set forth in Landlord’s Broker’s commission
schedule in effect as of the
execution of this Lease. If a Tenant’s Broker is named in Section 1.08 above, Landlord’s Broker shall pay an
appropriate portion of its commission to Tenant’s Broker if so provided in any
agreement between Landlord’s Broker and Tenant’s Broker. Nothing contained in
this Lease shall impose any obligation on Landlord to pay a commission or fee
to any party other than Landlord’s Broker.

Section 14.02. Protection
of Brokers. If Landlord sells the Property,
or assigns Landlord’s interest in this Lease, the buyer or assignee shall, by accepting such conveyance of the
Property or assignment of the Lease, be conclusively
deemed to have agreed to make all payments to Landlord’s Broker thereafter
required of Landlord under this Article Fourteen, Landlord’s

 

Broker
shall have the right to bring a legal action to enforce or declare rights under
this provision. The prevailing party in such action shall be entitled to
reasonable attorneys’ fees to be paid by the losing party. Such attorneys’ fees
shall be fixed by the court in such action. This Paragraph is included in this
Lease for the benefit of Landlord’s Broker. 

Section 14.03. Broker’s
Disclosure of Agency. Landlord’s Broker hereby discloses to Landlord
and Tenant and Landlord and Tenant hereby consent to Landlord’s Broker acting
in this transaction as the agent of:

Landlord
exclusively 

Section 14.04. No
Other Brokers. Tenant represents and warrants to Landlord that the
brokers named in Section 1.08 above are the only agents, brokers, finders or
other parties with whom Tenant has dealt who are or may be entitled to any
commission or fee with respect to this Lease or the Property.

ADDITIONAL PROVISIONS MAY BE SET FORTH IN A RIDER OR
RIDERS ATTACHED HERETO OR IN THE BLANK SPACE BELOW. IF NO ADDITIONAL PROVISONS
ARE INSERTED, PLEASE DRAW A LINE THROUGH THE SPACE BELOW.

Landlord and Tenant have signed this Lease at the
place and on the dates specified adjacent to their signatures below and have
initialed all Riders which are attached to or incorporated by reference in this
Lease.

	
   

  	
   

  	
  “LANDLORD”

  
	
   

  	
   

  	
   

  
	
  Signed on 

  	
   

  	
  ,

  	
   

  	
   

  	
   

  	
  MAJESTIC REALTY CO, a California corporation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  At

  	
   

  	
  .

  	
   

  	
  By: /s/David Wheeler

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: /s/Edward P. Roski

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PATRICIAN ASSOCIATES, INC.,

  
	
   

  	
   

  	
  a California corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: /s/Michael D. Ripson

  
	
   

  	
   

  	
  Michael D.
  Ripson

  
	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “TENANT”

  
	
   

  	
   

  	
   

  
	
  Signed on 

  	
  March 25 

  	
  ,

  	
  2000

  	
   

  	
   

  	
  CHINO COMMERCIAL BANK,N.A.,

  	
   

  
	
   

  	
   

  	
  a National
  Association

  
	
   

  	
   

  	
   

  
	
  at

  	
  Chino, CA

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: /s/Dann H. Bowman

  
	
   

  	
   

  	
  Dann H. Bowman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:     President &
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: /s/Daniel R. Kallestad

  
	
   

  	
   

  	
  Daniel R.
  Kallestad

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:     Secretary

  
																	

 

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

 

THIS PRTINTED FORM LEASE HAS BEEN DRAFTED BY LEGAL
COUNSEL AT THE DIRECTION OF THE SOUTHERN CALIFORNIA CHAPTER OF THE SOCIETY OF
INDUSTRIAL AND OFFICE REALTORS, ®INC. NO REPRESENTATION OR RECOMMENDATION IS
MADE BY THE SOUTHERN CALIFORNIA CHAPTER OF THE SOCIETY OF INDUSTRIAL AND OFFICE
R.EALTORS, ® INC., ITS LEGAL COUNSEL, THE REAL ESTATE BROKERS NAMED HEREIN, OR
THEIR EMPLOYEES OR AGENTS, AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT OR TAX
CONSEQUENCES OF THIS LEASE OR OF THIS TRANSACTION. LANDLORD AND TENANT SHOULD
RETAIN LEGAL COUNSEL TO ADVISE THEM ON SUCH MATTERS AND SHOULD RELY UPON THE
ADVICE OF SUCH LEGAL COUNSEL. 

ADDENDUM
TO INDUSTRIAL REAL ESTATE LEASE

This Addendum (“Addendum”) is made and entered into by MAJESTIC REALTY CO.,
a California corporation and PATRICIAN ASSOCIATES, INC., a California
corporation (collectively, “Landlord”) and
CH1NO COMMERCIAL BANK, N.A., a California corporation (“Tenant”),
and is dated as of the date set forth on Section 1.01 of the Industrial Real
Estate Lease between Landlord and Tenant (“Lease”) to
which this Addendum is attached. The promises, covenants, 

 

agreements and
declarations made and set forth herein are intended to and shall have the same
force and effect as if set forth at length in the body of the Lease. To the
extent that the provisions of this Addendum are inconsistent with the terms and
conditions of the Lease, the terms and conditions of this Addendum shall
control.

SECTION 1.O6                                         PERMITTED USES

Section 1.06 is
hereby amended by adding the following at the end thereof:

“As long as the Tenant
named in Section 1.03 of this Lease (and not any assignee, sublessee or
transferee of Tenant’s interest in this Lease) (“Original
Tenant”) continues to use the Property as a commercial bank, arid
provided that the Original Tenant continues to itself occupy the entire
Property and has not been in default under this Lease, then Landlord agrees
that during the Lease Term Landlord shall not permit any other tenant of 14335
Pipeline Avenue, Chino, California to use its premises primarily for either a
check cashing business or a restaurant/bar. Landlord shall have no obligation
to enforce such use restrictions against any tenants of 14335 Pipeline Avenue,
Chino, California, provided that Tenant shall have the right to enforce such
restrictions against such tenants at Tenant’s sole cost and expense. The rights
contained in this Section 1.06 shall be personal to the Original Tenant
and may only be exercised by the Original Tenant.”

SECTION 1.12(a)                              BASE RENT

Commencing as of the
thirteenth (13th) “Lease Month,” as that term is defined below, and continuing
through the twenty-fourth (24th) Lease Month, the monthly Base Rent shall be an
amount equal FIVE THOUSAND SEVEN HUNDRED THIRTY AND 10/1 00 DOLLARS
($5,730.10). Commencing as of the twenty-fifth (25th) Lease Month and
continuing through the thirty-sixth (36th) Lease Month, the monthly Base Rent
shall be an amount equal to FIVE THOUSAND NINE HUNDRED TWO AND NO/100 DOLLARS
($5,902.00). Commencing as of the thirty-seventh (37th) Lease Month and
continuing through the forty-eighth (48th) Lease Month, the monthly Base Rent
shall be an amount equal to SIX THOUSAND SEVENTY-NINE AND 06/100 DOLLARS
($6,079.06). Commencing as of the forty-ninth (49th) Lease Month and continuing
through the end of the initial Lease Term, the monthly Base Rent shall be an
amount equal to SIX THOUSAND TWO HUNDRED SIXTY-ONE AND 43/1 00 DOLLARS
($6,261.43). The term “Lease Month” shall mean each consecutive month during
the Lease Term, with the first Lease Month commencing on the Lease Commencement
Date, and each consecutive Lease Month commencing on the same day of the month
as the Lease Commencement Date.

SECTION 5.03                                            HAZARDOUS MATERIALS

5.03.1 DEFINITIONS

A. “Hazardous
Material” means any substance, whether solid, liquid or gaseous in nature:

(i)            the presence of which requires
investigation or remediation under any federal, state or local statute,
regulation, ordinance, order, action, policy or common law; or

(ii)           which is or becomes defined as a “hazardous
waste,” “hazardous substance,” pollutant or contaminant under any federal,
state or local statute, regulation, rule or ordinance or amendments thereto
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. section 9601 et seq.) and/or the
Resource Conservation and Recovery Act (42 U.S.C. section 6901 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. section 1801 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. section 1251 et seq.), the Clean
Air Act (42 U.S.C. section 7401 et seq.), the Toxic Substances Control Act, as amended
(15 U.S.C. section 2601 et seq.), and the Occupational Safety and Health Act
(29 U.S.C. section 651 et seq.), as these laws have been amended or
supplemented; or

(iii)          which is toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise
hazardous or is or becomes regulated by any governmental authority, agency,
department, commission, board, agency or instrumentality of the United States,
the State of California or any political subdivision thereof; or

(iv)          the presence of which on the Property
causes or threatens to cause a nuisance upon the Property or to adjacent
properties or poses or threatens to pose a hazard to the health or safety of
persons on or about the Property; or

(v)           the presence of which on adjacent
properties could constitute a trespass by Tenant; or

 

(vi) without
limitation which contains gasoline, diesel fuel or other petroleum
hydrocarbons; or

(vii) without
limitation which contains polychiorinated biphenyls (PCBs), asbestos or urea
formaldehyde foam insulation; or

(viii) without
limitation which contains radon gas.

B. “Environmental
Requirements” means all applicable present and future:

(i)            statutes, regulations, rules,
ordinances, codes, licenses, permits, orders, approvals, plans, authorizations,
concessions, franchises, and similar items (including, but not limited to those
pertaining to reporting, licensing, permitting, investigation and remediation),
of all Governmental Agencies; and

(ii)           all applicable judicial,
administrative, and regulatory decrees, judgments, and orders relating to the
protection of human health or the environment, including, without limitation,
all requirements pertaining to emissions, discharges, releases, or threatened
releases of Hazardous Materials or chemical substances into the air, surface
water, groundwater or land, or relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
Hazardous Materials or chemical substances.

C.            “Environmental Damages” means all
claims, judgments, damages, losses, penalties, fines, liabilities (including
strict liability), encumbrances, liens, costs, and expenses (including the
expense of investigation and defense of any claim, whether or not such claim is
ultimately defeated, or the amount of any good faith settlement or judgment
arising from any such claim) of whatever kind or nature, contingent or
otherwise, matured or unmatured, foreseeable or unforeseeable (including
without limitation reasonable attorneys’ fees and disbursements and consultants’
fees) any of which are incurred at any time as a result of the existence of
Hazardous Material upon, about, or beneath the Property or migrating or
threatening to migrate to or from the Property, or the existence of a violation
of Environmental Requirements pertaining to the Property and the activities
thereon, regardless of whether the existence of such Hazardous Material or the
violation of Environmental Requirements arose prior to the present ownership or
operation of the Property. Environmental Damages include, without limitation:

(i)            damages for personal injury, or
injury to property or natural resources occurring upon or off of the Property,
including, without limitation, lost profits, consequential damages, the cost of
demolition and rebuilding of any improvements on real property, interest,
penalties and damages arising from claims brought by or on behalf of employees
of Tenant (with respect to which Tenant waives any right to raise as a defense
against Landlord any immunity to which it may be entitled under any industrial
or worker’s compensation laws);

(ii)           fees, costs or expenses incurred for
the services of attorneys, consultants, contractors, experts, laboratories and
all other costs incurred in connection with the investigation or remediation of
such Hazardous Materials or violation of such Environmental Requirements,
including, but not limited to, the preparation of any feasibility studies or
reports or the performance of any cleanup, remediation, removal, response,
abatement, containment, closure, restoration or monitoring work required by any
Governmental Agency or reasonably necessary to make full economic use of the
Property or any other property in a manner consistent with its current use or
otherwise expended in connection with such conditions, and including without
limitation any attorneys’ fees, costs and expenses incurred in enforcing the
provisions of this Lease or collecting any sums due hereunder;

(iii)          liability to any third person or
Governmental Agency to indemnify such person or Governmental Agency for costs
expended in connection with the items referenced in subparagraph (ii) above;
and

(iv)          diminution in the fair market value of
the Property including without limitation any reduction in fair market rental
value or life expectancy of the Property or the improvements located thereon or
the restriction on the use of or adverse impact on the marketing of the
Property or any portion thereof.

 

D.            “Governmental Agency” means all
governmental agencies, departments, commissions, boards, bureaus or
instrumentalities of the United States, states, counties, cities and political
subdivisions thereof.

E.             The “Tenant Group” means Tenant,
Tenant’s successors, assignees, guarantors, officers, directors, agents, employees,
invitees, permitees or other parties under the supervision or control of Tenant
or entering the Property during the term of this Lease with the permission or
knowledge of Tenant other than Landlord or its agents or employees.

5.03.2 PROHIBITIONS

A.            Other than normal quantities of
general office supplies and except as specified on Exhibit “D” attached hereto,
Tenant shall not cause, permit or suffer any Hazardous Material to be brought
upon, treated, kept, stored, disposed of, discharged, released, produced,
manufactured, generated, refined or used upon, about or beneath the Property by
the Tenant Group, or any other person without the prior written consent of
Landlord. From time to time during the term of this Lease, Tenant may request
Landlord’s approval of Tenant’s use of other Hazardous Materials, which
approval may be withheld in Landlord’s sole discretion. Tenant shall, prior to
the Commencement Date, provide to Landlord for those Hazardous Materials
described on Exhibit “D” (a) a description of handling, storage, use and
disposal procedures, and (b) all “community right to know” plans or disclosures
and/or emergency response plans which Tenant is required to supply to local
governmental agencies pursuant to any Environmental Requirements.

B.            Tenant shall not cause, permit or
suffer the existence or the commission by the Tenant Group, or by any other
person, of a violation of any Environmental Requirements upon, about or beneath
the Property.

C.            Tenant shall neither create or suffer
to exist, nor permit the Tenant Group to create or suffer to exist any lien,
security interest or other charge or encumbrance of any kind with respect to
the Property, including without limitation, any lien imposed pursuant to
section 107(f) of the Superfund Amendments and Reauthorization Act of 1986 (42
U.S.C. section 9607(l)) or any similar state statute.

D.            Tenant shall not install, operate or
maintain any above or below grade tank, sump, pit, pond, lagoon or other
storage or treatment vessel or device on the Property without Landlord’s prior
written consent.

5.03.3 INDEMNITY

A.            Tenant, its successors, assigns and
guarantors, agree to indemnify, defend, reimburse and hold harmless:

(i) Landlord; and

(ii) any other
person who acquires all or a portion of the Property in any manner (including
purchase at a foreclosure sale) or who becomes entitled to exercise the rights
and remedies of Landlord under this Lease; and

(iii) the
directors, officers, shareholders, employees, partners, agents, contractors,
subcontractors, experts, licensees, affiliates, lessees, mortgagees, trustees,
heirs, devisees, successors, assigns and invitees of such persons, from and
against any and all Environmental Damages which exist as a result of the
activities or negligence of the Tenant Group or which exist as a result of the
breach of any warranty or covenant or the inaccuracy of any representation of
Tenant contained in this Lease, or by Tenant’s remediation of the Property or
failure to meet its obligations contained in this Lease.

B. The obligations
contained in this Section 5.03 shall include, but not be limited to, the burden
and expense of defending all claims, suits and administrative proceedings, even
if such claims, suits or proceedings are groundless, false or fraudulent, and
conducting all negotiations of any description, and paying and discharging,
when and as the same become due, any and all judgments, penalties or other sums
due against such indemnified persons. Landlord, at its sole expense, may employ
additional counsel of its choice to associate with counsel representing Tenant.

 

C. Landlord shall have
the right but not the obligation to join and participate in, and control, if it
so elects, any legal proceedings or actions initiated in connection with Tenant’s
activities. Landlord may also negotiate, defend, approve and appeal any action
taken or issued by any applicable governmental authority with regard to
contamination of the Property by a Hazardous Material.

D. The obligations of
Tenant in this paragraph shall survive the expiration or termination of this
Lease.

E. The obligations of
Tenant under this paragraph shall not be affected by any investigation by or on
behalf of Landlord, or by any information which Landlord may have or obtain
with respect thereto.

5.03.4 OBLIGATION TO REMEDIATE

In addition to the
obligation of Tenant to indemnify Landlord pursuant to this Lease, Tenant
shall, upon approval and demand of Landlord, at its sole cost and expense and
using contractors approved by Landlord, promptly take all actions to remediate
the Property which are required by any Governmental Agency, or which are
reasonably necessary to mitigate Environmental Damages or to allow full
economic use of the Property, which remediation is necessitated from the
presence upon, about or beneath the Property, at any time during or upon
termination of this Lease, of a Hazardous Material or a violation of
Environmental• Requirements existing as a result of the activities or
negligence of the Tenant Group. Such actions shall include, but not be limited
to, the investigation of the environmental condition of the Property, the
preparation of any feasibility studies, reports or remedial plans, and the
performance of any cleanup, remediation, containment, operation, maintenance,
monitoring or restoration work, whether on or off the Property, which shall be
performed in a manner approved by Landlord. Tenant shall take all actions
necessary to restore the Property to the condition existing prior to the
introduction of Hazardous Material upon, about or beneath the Property,
notwithstanding any lesser standard of remediation allowable under applicable
law or governmental policies.

5.03.5 RIGHT TO INSPECT

Landlord shall
have the right in its sole and absolute discretion, but not the duty, to enter
and conduct an inspection of the Property, including invasive tests, at any
reasonable time to determine whether Tenant is complying with the terms of the
Lease, including but not limited to the compliance of the Property and the
activities thereon with Environmental Requirements and the existence of
Environmental Damages as a result of the condition of the Property or
surrounding properties and activities thereon. Landlord shall have the right,
but not the duty, to retain any independent professional consultant (the “Consultant”)
to enter the Property to conduct such an inspection or to review any report
prepared by or for Tenant concerning such compliance. The cost of the
Consultant shall be paid by Landlord unless such investigation discloses a
violation of any Environmental Requirement by the Tenant Group or the existence
of a Hazardous Material on the Property or any other property caused by the
activities or negligence of the Tenant Group (other than Hazardous Materials
used in compliance with all Environmental Requirements and previously approved
by Landlord), in which case Tenant shall pay the cost of the Consultant. Tenant
hereby grants to Landlord, and the agents, employees, consultants and
contractors of Landlord the right to enter the Property and to perform such
tests on the Property as are reasonably necessary to conduct such reviews and
investigations. Landlord shall use commercially reasonable efforts to minimize
interference with the business of Tenant.

5.03.6 NOTIFICATION

If Tenant shall
become aware of or receive notice or other communication concerning any actual,
alleged, suspected or threatened violation of Environmental Requirements, or
liability of Tenant for Environmental Damages in connection with the Property
or past or present activities of any person thereon, including but not limited
to notice or other communication concerning any actual or threatened
investigation,

 

inquiry, lawsuit, claim,
citation, directive, summons, proceeding, complaint, notice, order, writ, or
injunction, relating to same, then Tenant shall deliver to Landlord within ten
(10) days of the receipt of such notice or communication by Tenant, a written
description of said violation, liability, or actual or threatened event or
condition, together with copies of any documents evidencing same. Receipt of
such notice shall not be deemed to create any obligation on the part of
Landlord to defend or otherwise respond to any such notification.

If requested by
Landlord, Tenant shall disclose to Landlord the names and amounts of all Hazardous
Materials other than general office supplies referred to in Section 5.03.2 of
this Addendum, which were used, generated, treated, handled, stored or disposed
of on the Property or which Tenant intends to use, generate, treat, handle,
store or dispose of on the Property. The foregoing in no way shall limit the
necessity for Tenant obtaining Landlord’s consent pursuant to Section 5.03.2 of
this Addendum.

5.03.7 SURRENDER OF PROPERTY

In the ninety (90)
days prior to the expiration or termination of the Lease Term, and for up to
ninety (90) days after Tenant fully surrenders possession of the Property,
Landlord may have an environmental assessment of the Property performed in
accordance with Section 5.03.5 of this Addendum. Tenant shall perform, at its sole
cost and expense, any clean-up or remedial work recommended by the Consultant
which is necessary to remove, mitigate or remediate any Hazardous Materials
and/or contamination of the Property caused by the activities or negligence of
the Tenant Group.

5.03.8 ASSIGNMENT AND SUBLETTING

In the event the Lease
provides that Tenant may assign the Lease or sublet the Property subject to
Landlord’s consent and/or certain other conditions, and if the proposed
assignee’s or sublessee’s activities in or about the Property involve the use,
handling, storage or disposal of any Hazardous Materials other than those used
by Tenant and in quantities and processes similar to Tenant’s uses in
compliance with the Addendum, (i) it shall be reasonable for Landlord to
withhold its consent to such assignment or sublease in light of the risk of
contamination posed by such activities and/or (ii) Landlord may impose an
additional condition to such assignment or sublease which requires Tenant to
reasonably establish that such assignee’s or sublessee’s activities pose no
materially greater risk of contamination to the Property than do Tenant’s
permitted activities in view of (a) the quantities, toxicity and other
properties of the Hazardous Materials to be used by such assignee or sublessee,
(b) the precautions against a release of Hazardous Materials such assignee or
sublessee agrees to implement, (c) such assignee’s or sublessee’s financial
condition as it relates to its ability to fund a major clean-up and (d) such
assignee’s or sublessee’s policy and historical record respecting its
willingness to respond to the clean up of a release of Hazardous Materials.

5.03.9 SURVIVAL OF HAZARDOUS MATERIALS OBLIGATION

Tenant’s breach of any of
its covenants or obligations under this Addendum shall constitute a material
default under the Lease. The obligations of Tenant under this Addendum shall
survive the expiration or earlier termination of the Lease without any
limitation, and shall constitute obligations that are independent and severable
from Tenant’s covenants and obligations to pay rent under the Lease.

SECTION 5.04 SIGNS. 

Section 5.04 is
hereby amended by adding the following at the end thereof:

“Notwithstanding the foregoing, subject to Landlord’s
prior written approval, which shall not be unreasonably withheld, delayed or
conditioned, and provided all signs are in keeping with the quality, design and
style of the industrial park within which the Property is located, Tenant, at
its sole cost and expense, may install: (i) a ground mounted monument sign in
front of the Property, and (ii) identification signage on the facia of the
building; provided, however, that (i) the size, color, location, materials and
design of such sign shall be subject to Landlord’s prior written consent, which

 

shall
not be unreasonably withheld, delayed or conditioned; (ii) such sign shall
comply with all applicable governmental rules and regulations and the Project’s
covenants, conditions and restrictions; (iii) such sign shall be personal to
the Original Tenant; (iv) such sign shall not be painted directly on the
building or attached or placed on the roof or exterior of the building, except
for the signage provided for herein to be attached to the facia of the
building; (v) such sign shall only advertise Chino Commercial Bank, and its
banking business; (vi) such sign is consistent with Landlord’s signage program
attached hereto as Exhibit “F” and (vii) Tenant’s continuing signage
right shall be contingent upon the Original Tenant actually occupying the
entire Property. Tenant shall be responsible for all costs incurred in
connection with the design, construction, installation, repair and maintenance
of Tenant’s sign(s). Upon the expiration or earlier termination of this Lease,
Tenant shall cause Tenant’s sign(s) to be removed and shall repair any damage
caused by such removal. Any signs, notices, logos, pictures, names or
advertisements which are installed and that have not been separately approved
by Landlord may be removed by Landlord without notice by Landlord to Tenant at
Tenant’s sole cost and expense.”

SECTION 6.05

Tenant shall be granted the right, at Tenant’s sole
cost and expense, to move the trash enclosure from its current location
adjacent to the Building to a site mutually acceptable to Tenant and Landlord
along the east side of the Building. Tenant shall only exercise such right
pursuant to this Section 6.05 of
the Lease, subject to Landlord’s prior written consent which shall not be
unreasonably withheld, and subject to the prior written consent of the City of
Chino. Tenant shall be responsible for obtaining the consent of the City of
Chino.

SECTION 9.05 LANDLORD’S CONSENT. 

(c) If Landlord elects to terminate this Lease
pursuant to Section 9.05(a), Landlord
may, if it elects, enter into a new lease covering the Property with the
intended assignee or sublessee on such terms as Landlord and such person or
entity may agree or enter into a new lease covering the Property with any other
person or entity; in such event, Tenant shall not be entitled to any portion of
the profit, if any, which Landlord may realize on account of such termination
and reletting. From and after the date of such termination of this Lease,
Tenant shall have no further obligation to Landlord hereunder, except for
matters occurring or obligations arising hereunder prior to the date of such
termination and for such obligations as set forth herein that survive the
termination of this Lease.

ARTICLE
FIFTEEN 

REVENUE AND EXPENSE ACCOUNTING

Landlord and Tenant agree that, for all purposes (including
any determination under Section 467 of the Internal Revenue Code), rental
income will accrue to the Landlord and rental expenses will accrue to the
Tenant in the amounts and as of the dates rent is payable under the Lease.

ARTICLE
SIXTEEN 

LANDSCAPE, FIRE SYSTEM AND PUMP MAINTENANCE

Notwithstanding the provisions of Sections 6.03 and 6.04, Landlord shall
maintain, at Tenant’s expense: (i) the landscaping of the Property and, if
applicable, the common areas; and (ii) the ESFR fire system and pump (including
maintenance, monitoring and testing). Such landscape maintenance shall
include gardening, gopher control, tree trimming, replacement or repair of
landscaping, landscape irrigation systems and similar items and the sweeping
and cleaning of asphalt, concrete or other surfaces on the driveway, parking
areas, yard areas, loading areas or other paved or covered surfaces. In
connection with Landlord’s obligations under this Article, Landlord may enter
into a contract with a contractor/maintenance provider of Landlord’s choice to
provide some (but not necessarily all) of the maintenance services listed
above. Tenant’s monthly cost of such contract, hereinafter referred to as the “Maintenance
Fee” is currently TWO HUNDRED TEN AND 26/100 DOLLARS ($210.26). Landlord shall
use its commercially reasonable efforts to maintain competitive contracts and
shall promptly notify Tenant of any increase in the Maintenance Fee. Tenant
agrees to pay monthly to Landlord, as Additional Rent, the Maintenance Fee.
Tenant shall make such payment together with Tenant’s monthly rental payment,
without the necessity of notice from Landlord. It is the understanding of the
parties that the Maintenance Fee only, pertains to routine maintenance on the
Property and that Landlord may incur expenses in addition to the Maintenance
Fee in meeting its obligations set forth above.

 

Tenant shall pay to
Landlord, as Additional Rent, within ten (10) days after demand therefore, the
cost of such additional expenses.

ARTICLE
SEVENTEEN

RIGHT OF
FIRST REFUSAL

During the initial
Lease Term, Landlord hereby grants to Original Tenant a one-time right of first
refusal with respect to the adjacent approximately 6,046 square feet of space
located in the northern portion of the Building (the “First
Refusal Space”), as outlined in purple on Exhibit “A”
attached hereto.

17.1 Procedure for Offer. Landlord shall
notify Tenant (the “Refusal Notice”)
when Landlord receives a bona fide offer (which Landlord either intends to
accept or issue a counterproposal to) (the “Third Party
Offer”) from a third party (the “Third Party”)
to lease the First Refusal Space. Pursuant to such Refusal Notice, Landlord
shall offer to lease to Tenant the then available First Refusal Space. The
Refusal Notice shall describe the space so offered to Tenant and shall set
forth the economic terms of either the Third Party Offer, or if Landlord
intends to make a counterproposal, then the terms of Landlord’s intended
counterproposal, as applicable.

17.2 Procedure for Acceptance. If Tenant
wishes to exercise Tenant’s right of first refusal with respect to the entire
First Refusal Space then within five (5) business days of delivery of the
Refusal Notice to Tenant (the “Election Period”),
Tenant shall deliver notice to Landlord of Tenant’s intention to exercise its
right of first refusal with respect to the entire First Refusal Space on the
terms contained in such notice. If Tenant does not so notify Landlord within
the Election Period, then Landlord shall be free to lease the entire First
Refusal Space to anyone whom Landlord desires on any terms Landlord desires.
Notwithstanding anything to the contrary contained herein, Tenant must elect to
exercise its right of first refusal, if at all, with respect to all of the
First Refusal Space, and Tenant may not elect to lease only a portion thereof.

17.3 Construction in the First Refusal Space.
Tenant shall take the First Refusal Space in its “as is” condition.

17.4 Amendment to Lease. If Tenant
timely exercises Tenant’s right to lease the First Refusal Space as set forth
in this Article 17, Landlord and Tenant shall within fifteen (15) days
thereafter execute an amendment to this Lease adding such First Refusal Space
to the Property and upon the terms and conditions as set forth in the Refusal
Notice and this Article 17 Tenant shall commence payment of rent for the
First Refusal Space, and the term of the First Refusal Space shall commence
upon the date of delivery of the First Refusal Space to Tenant, as set forth in
the Refusal Notice, and terminate (the “First Refusal Expiration
Date”) on the later to occur of(i) the date set forth in the Refusal
Notice and (ii) this Lease termination date.

17.5 Termination of Right of First Refusal.
The right contained in this Article 17 shall be personal to Original
Tenant and may only be exercised by Original Tenant if Original Tenant occupies
the entire Property. The right of first refusal granted herein shall terminate
upon the failure by Tenant to exercise its right of first refusal with respect
to the First Refusal Space as offered by Landlord. Tenant shall not have the
right to lease the First Refusal Space, as provided in this Article 17,
if, as of the date of the attempted exercise of any right of first refusal by
Tenant, Tenant is in default of this Lease or as of the scheduled date of
delivery of such First Refusal Space to Tenant, Tenant is in default under this
Lease or Tenant has previously been in default of this Lease.

 

OPTION TO
EXTEND TERM 

LEASE RIDER

This Rider is attached to and made part of that
certain Lease (the “Lease”) dated January 10, 2000 between MAJESTIC REALTY CO.
AND PATRICIAN ASSOCIATES, INC., both California corporations , as Landlord and
CHINO COMMERCIAL BANK, N.A., a California corporation,
as Tenant covering the Property commonly known as 14335 Pipeline Avenue, Unit
B, Chino, California (the “Property”). The terms used herein shall have the
same definitions as set forth in the Lease. The provisions of this Rider shall
supersede any inconsistent or conflicting provisions of the Lease.

A.            Option(s)
to Extend Term.

1. Landlord hereby grants to Tenant one (1) option(s)
(the “Option(s)”) to extend the Lease Term for additional term(s) of five
(5) years each (the “Extension(s)”), on the same terms and conditions as
set forth in the Lease, but at an increased rent as set forth below. Each
Option shall be exercised only by written notice delivered to Landlord at least
one hundred eighty (180) but no more than two hundred forty (240) days before
the expiration of the Lease Term. If Tenant fails to deliver Landlord written
notice of the exercise of an Option within the prescribed time period, such
Option and any succeeding Options shall lapse, and there shall be no further
right to extend the Lease Term. Each Option shall be exercisable by Tenant on the
express conditions that (a) at the time of the exercise, and at all times prior
to the commencement of such Extension, Tenant shall not be in default under any
of the provisions of this Lease and (b) Tenant has not been ten (10) or more
days late in the payment of rent more than a total of three (3) times during
the Lease Term and all preceding Extensions, and (c) Tenant has been
continuously in possession of the Property during the entire Lease Term, is in
possession of the entire Property at the time Tenant exercises the Option, and
is in possession of the entire Property as of the commencement date of the
Extension.

 

2.
Personal Options.

The Option(s) are personal to the Tenant named in
Section 1.03 of the Lease or any Tenant’s Affiliate described in Section 9.02
of the Lease. If Tenant subleases any portion of the Property or assigns or
otherwise transfers any interest under the Lease to an entity other than a
Tenant Affiliate prior to the exercise of an Option (whether with or without
Landlord’s consent), such Option and any succeeding Options shall lapse. If
Tenant subleases any portion of the Property or assigns or otherwise transfers
any interest of Tenant under the Lease to an entity other than a Tenant
Affiliate after the exercise of an Option but prior to the commencement of the
respective Extension (whether with or without Landlord’s consent), then such
Option and any succeeding Options shall lapse, in Landlord’s sole discretion,
and the Lease Term shall expire as if such Option were not exercised. If Tenant
subleases any portion of the Property or assigns or otherwise transfers any
interest of Tenant under the Lease in accordance with Article 9 of the Lease
after the exercise of an Option and after the commencement of the Extension
related to such Option, then the term of the Lease shall expire upon the
expiration of the Extension during which such sublease or transfer occurred and
only the succeeding Options shall lapse.

B.            Calculation
of Rent.

The Base Rent during the
Extension(s) shall be determined by one or a combination of the following
methods (INDICATE YOUR CHOICE UPON EXECUTION OF THE LEASE):

3. Fixed Adjustment (Section B (3), below) 

EXHIBIT B 

Record and return to:

 

 

 

 

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

THIS
AGREEMENT, made and entered into as of the day of               ,
     , by and between                                              ,
a              with
its principal office at                                  (hereinafter
called “Mortgagee”),                   ,
a                    
with its principal office at                                           (hereinafter
called “Lessor”) and                                          (hereinafter
called “Lessee”):

WITNESSETH:

WHEREAS, Lessee has by a written lease dated                       ,and
all future amendments, modifications and extensions approved in writing by
Mortgagee (hereinafter called the “Lease”) leased from Lessor all or part of
certain real estate and improvements thereon located in the City of                   
as more particularly described in Exhibit A attached hereto (the “Demised
Premises”); and

WHEREAS, Lessor is encumbering the Demised Premises as security for a
loan (the “Loan”) from Mortgagee to Lessor (the “Mortgage”); and

WHEREAS, Lessee, Lessor and Mortgagee have agreed to the following with
respect to their mutual rights and obligations pursuant to the Lease and the
Mortgage;

NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00) paid by
each party to the other and the mutual covenants and agreements herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto do hereby covenant and agree as
follows:

(1) Lessee’s interest in the Lease and all rights of Lessee thereunder, including
any purchase option or right of first refusal in connection with a sale of the
Demised Premises, if any. shall be and are hereby declared subject and
subordinate to the Mortgage upon the Demised Premises and its terms, and the
term “Mortgage” as used herein shall also include any amendment, supplement,
modification, renewal, refinance or replacement thereof.

(2) In the event of any foreclosure of the Mortgage or any conveyance in
lieu of foreclosure, provided that the Lessee shall not then be in default
beyond any grace period under the Lease and that the Lease shall then be in
full force and effect, then

 

Mortgagee
shall neither terminate the Lease nor join Lessee in foreclosure proceedings,
nor disturb Lessee’s possession, and the Lease shall continue in full force and
effect as a direct lease between Lessee and Mortgagee.

(3) After the receipt by Lessee of notice from Mortgagee of any
foreclosure of the Mortgage or any conveyance of the Demised Premises in lieu
of foreclosure, Lessee will thereafter attorn to and recognize Mortgagee or any
purchaser at any foreclosure sale or otherwise as its substitute lessor on the
terms and conditions set forth in the Lease.

(4) Lessee has not and shall not prepay any of the rents under the Lease
more than one month in advance except with the prior written consent of
Mortgagee.

(5) In no event shall
Mortgagee be liable for the return of any security deposit, any act or omission
of the Lessor, nor shall Mortgagee be subject to any offsets or deficiencies
which Lessee may be entitled to assert against the Lessor as a result of any
act or omission of Lessor occurring prior to Mortgagee’s obtaining title to the
Demised Premises, it being understood that nothing in this clause shall be
deemed to exclude Mortgagee from responsibility for repairs and maintenance
required of the Lessor under the Lease from and after the date Mortgagee
acquires title to the Demised Premises, whether or not the need for such
repairs or maintenance accrued before or after such date; provided, however,
that in no event shall Mortgagee be responsible for consequential damages
resulting from the failure of Lessor to undertake such repairs and maintenance.

(6) So long as the Loan is outstanding, the Lease may not be amended,
modified, terminated, or subordinated without the prior written consent of
Mortgagee.

(7) There shall be no merger of the Lease or the leasehold estate
created thereby with any other estate in the Demised Premises, including,
without limitation, the fee estate, by reason of the same person or entity
acquiring or holding, directly or indirectly, the Lease and said leasehold
estate and any such other estate.

(8) All information, notices or requests provided for or permitted to be
given or made pursuant to this Agreement shall be deemed to be an adequate and
sufficient notice if given in writing and service is made by either (i)
registered or certified mail, postage prepaid, in which case notice shall be
deemed to have been received three (3) business days following deposit to the mail;
or (ii) nationally recognized overnight air courier, next day delivery,
prepaid, in which case such notice shall be deemed to have been received one
(1) business day following delivery to such courier. All notices shall be
addressed to the addresses set forth below, or to such other addresses as may
from time to time be specified in writing by Lessee, Lessor or Mortgagee to the
other parties hereto:

If
to Mortgagee: 

 

 

 

If
to Lessor: 

 

 

 

If
to Lessee: 

 

 

 

(9) This Agreement and its terms shall be governed by the laws of the
state where the Demised Premises are located and shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, including without limitation, any purchaser at any foreclosure sale or
otherwise. This Agreement may not be modified orally or in any manner other
than by an agreement, in writing, signed by the parties.

(10) This Agreement may be executed in counterparts, each of which shall
be deemed to be an original, and such counterparts when taken together shall
constitute but one agreement.

IN WITNESS WHEREOF, this Agreement has been fully executed under seal on
the day and year first above written.

 

	
  

  	
  ,

  
	
  Mortgagee

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ,

  
	
  Lessor

  	
   

  
					

 

 

 

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ,

  
	
  Lessee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					

 

 

EXHIBIT C 

ESTOPPEL CERTIFICATE 

The undersigned,                        ,
does hereby make the following statements:

1. They are the Tenant under a certain Lease dated                         
with                             ,
as Landlord, leasing the Property commonly known as                                            ,
California.

2. The Lease dated                        
is in full force and effect and the undersigned is aware of no defaults under
the terms and conditions of the Lease and has no offsets against rentals due
the Landlord or to become due the Landlord.

3. The undersigned accepted possession of the
Property on                            ,
the Lease Term began on                          ,
and ends on                       ,
and the obligation to pay Base Rent begins on                          ,
pursuant to the terms and conditions of the Lease.

4. The total Base Rent to be paid pursuant
to the terms of said Lease is not less than $                     
and no Base Rent has been paid more than one month in advance.

5. In the event of a default by the
Landlord under any of the terms and conditions of the Lease, the undersigned at
the same time notice thereof is given to the Landlord, will notify holder of
any first mortgage or deed of trust covering the Property, provided Landlord
has provided Tenant the address of such Mortgagee. In the event that the
default is not cured by the Landlord within the time provided for under the
terms and conditions of the Lease and provided the Mortgagee has given the
undersigned written notice of Mortgagee’s intention to cure such default, the
undersigned will allow the Mortgagee the opportunity and sufficient additional
time within which to correct Landlord’s default, provided the Mortgagee
diligently pursues such

 

cure.

 

	
  

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  
				

 

 

EXHIBIT D 

HAZARDOUS
MATERIALS 

(To be attached by Tenant prior to execution of Lease)

 

EXHIBIT E 

TENANT WORK LETTER 

This Tenant Work Letter shall
set forth the terms and conditions relating to the construction of the
Property. This Tenant Work Letter is essentially organized chronologically and
addresses the issues of the construction of the Property, in sequence, as such
issues will arise during the actual construction of the Property. All references
in this Tenant Work Letter to Articles or Sections of “this Lease” shall mean
the relevant portions of Articles 1 through 17 of the Industrial Real
Estate Lease (to which this Tenant Work Letter is attached as Exhibit E)
and the Rider attached to this Lease, and all references in this Tenant Work
Letter to Sections of “this Tenant Work Letter” shall mean the relevant
portions of Sections 1 through 5 of
this Tenant Work Letter.

SECTION
1 

DELIVERY
OF THE PROPERTY AND BASE BUILDFNG 

1 .1 Base Building as
Constructed by Landlord. Tenant acknowledges that Tenant has thoroughly
examined the Property. Upon the full execution and delivery of this Lease by
Landlord and Tenant, Landlord shall deliver the Property and Tenant shall
accept the Property from Landlord in its presently existing, “as-is” condition
as of the date of this Lease, except as provided in Section 1.2 below.

1.2 Landlord’s Work. Landlord
shall, at Landlord’s sole cost and expense, cause the construction or
installation of the items set forth in Schedule “1” hereto in the Building
(collectively, “Landlord’s Work”). Upon full execution and delivery of the
Lease, Landlord shall provide Tenant with a set of construction drawings for
Landlord’s Work.

SECTION
2 

TENANT
IMPROVEMENTS 

2.1 Tenant Improvement
Allowance. Tenant shall be responsible for all costs relating to the
initial design and construction of Tenant’s improvements, which are permanently
affixed to the Property (the “Tenant
Improvements”). In no
event shall Landlord be obligated to make disbursements pursuant to this Tenant
Work Letter for the Tenant Improvements.

2.2 Additional
Requirements. 

Tenant agrees to comply with the following procedures in connection with the
construction of the Tenant Improvements: (i) Tenant shall make progress
payments to the “Contractor” and “Tenant’s Agents” no more frequently than
monthly; (ii) in making any progress payments Tenant shall first procure
executed mechanic’s lien releases which comply with the appropriate provisions
of California Civil Code Section 3262(d); (iii) Tenant shall withhold from such
progress payments a ten percent (10%) retention (the aggregate amount of such
retentions to be known as the “Final Retention”); (iv) the Final Retention
payable to Contractor shall only be delivered by Tenant following the
completion of construction of the Tenant Improvements, provided that (a) Tenant
delivers to Landlord properly executed mechanics lien releases in compliance
with both California Civil Code Section 3262(d)(2) and either Section 3262(d)(3)
or Section 3262(d)(4), (b) Landlord has determined that no substandard work
exists which adversely affects the mechanical, electrical, plumbing, heating,
ventilating and air conditioning, life-safety or other systems of the Property,
the curtain wall of the Property, or the structure or exterior appearance of
the Property, and (c) Tenant’s completion of the “Tenant’s Completion
Requirements,” as that term is defined in Section 4.3 of this Tenant
Work Letter.

2.3 Standard Tenant
Improvement Package. Landlord has established a Standard Outline of
Specifications (the “Specifications”)
which Specifications are partially set forth on Schedule 2, attached
hereto, for some of the Property standard components to be used in the
construction of the Tenant Improvements in the Property

 

(collectively, the “Standard
Improvement Package”), The
quality of Tenant Improvements must at a minimum comply with the applicable
Specifications, provided that the Tenant Improvements shall comply with certain
Specifications as designated by Landlord. Landlord may make changes to the
Standard Improvement Package from time to time. Tenant’s noncompliance with the
Standard Improvement Package shall constitute a material default under this
Lease. 

SECTION 3 

CONSTRUCTION DRAWINGS 

3.1 Selection of
Architect/Construction Drawings. Tenant shall retain an architect
designated by Landlord (“the Architect”) and Landlord’s engineering consultants
(the “Engineers”) to pre5are the plans and drawings the ‘Construction
Drawings”. The Engineers shall prepare all plans and engineering working
drawings relating to the structural, mechanical, electrical, plumbing, HVAC,
lifesafety, and sprinkler work in the Property, which work is not part of the
Base Building. The plans and drawings to be prepared by Architect and the
Engineers hereunder shall be known collectively as the “Construction Drawings.”
All Construction Drawings shall comply with Landlord’s drawing format and
specifications, and shall be subject to Landlord’s approval. Tenant and
Architect shall verify, in the field, the dimensions and conditions as shown on
the relevant portions of the base building plans, and Tenant and Architect
shall be solely responsible for the same, and Landlord shall have no
responsibility in connection therewith. Landlord’s review of the Construction
Drawings as set forth in this Section 3, shall be for its sole purpose
and shall not imply Landlord’s review of the same, or obligate Landlord to
review the same, for quality, design, Code compliance or other like matters.
Accordingly, notwithstanding that any Construction Drawings are reviewed by
Landlord or its space planner, architect, engineers and consultants, and
notwithstanding any advice or assistance which may be rendered to Tenant by
Landlord or Landlord’s space planner, architect, engineers, and consultants,
Landlord shall have no liability whatsoever in connection therewith and shall
not be responsible for any omissions or errors contained in the Construction
Drawings, and Tenant’s waiver and indemnity set forth in this Lease shall
specifically apply to the Construction Drawings.

3.2 Final Space Plan.
Tenant shall supply Landlord with four (4) copies signed by Tenant of its final
space plan for the Premises before any architectural working drawings or
engineering drawings have been commenced. The final space plan (the “Final Space Plan”) shall include a layout and designation of
all offices, rooms and other partitioning, their intended use, and equipment to
be contained therein. Landlord may request clarification or more specific
drawings for special use items not included in the Final Space Plan. Landlord
shall advise Tenant within five (5) business
days after Landlord’s receipt of the Final Space Plan for the Premises if the
same is unsatisfactory or incomplete in any respect. If Tenant is so advised,
Tenant shall promptly cause the Final Space Plan to be revised to correct any
deficiencies or other matters Landlord may reasonably require.

3.3 Final Working Drawings.
Tenant shall promptly cause the Architect and the Engineers to complete the
architectural and engineering drawings for the Property, and Architect shall
compile a fully coordinated set of architectural, structural, mechanical,
electrical and plumbing working drawings in a form which is complete to allow
subcontractors to bid on the work and to obtain all applicable permits
(collectively, the “Final Working Drawings”) and shall submit the same to Landlord for
Landlord’s approval. Tenant shall supply Landlord with four (4) copies signed
by Tenant of such Final Working Drawings. Landlord shall advise Tenant within
five (5) business days after
Landlord’s receipt of the Final Working Drawings for the Property if the same
is unsatisfactory or incomplete in any respect. If Tenant is so advised, Tenant
shall immediately revise the Final Working Drawings in accordance with such
review and any disapproval of Landlord in connection therewith.

3.4 Approved Working
Drawings. The Final Working Drawings shall be approved by Landlord (the “Approved Working Drawings”) prior to the commencement of construction
of the Property by Tenant. After approval by Landlord of the Final Working
Drawings, Architect shall submit the same to City in which the Property is
located for all applicable building permits. Tenant hereby agrees that neither
Landlord nor Landlord’s consultants shall be responsible for obtaining any
building permit or certificate of occupancy for the property and that obtaining
the same shall be Tenant’s responsibility; provided, however, that Landlord
shall cooperate with Tenant in executing permit applications and performing
other ministerial acts reasonably necessary to enable Tenant to obtain any such
permit or certificate of occupancy. No changes, modifications or alterations in
the Approved Working Drawings may be made without the prior written consent of
Landlord, which consent may not be unreasonably withheld. 

 

Schedule 1 

Landlord’s
Work 

·                                   A modified
storefront and double entry doors facing south, the style and type to be
mutually agreed upon between Landlord and Tenant. Tenant shall be responsible
for the incremental cost increase of an above-standard building storefront and
entry doors.

·                                   A sidewalk leading to the new entry doors per
ADA requirements. 

·                                   The securing of the existing roll-up doors
with masonry block. 

·                                   Three (3) down-lights above new entry doors
per existing building standards. 

·                                   One (1) 400 amp 277/480 volt. 3 phase
electrical panel. 

·                                   Four (4) 5-ton HVAC units. (Ducting is not
included) 

·                                   Sewer stub-out inside the demised space. 

·                                   Domestic water meter and service. 

·                                   A floor to ceiling demising wall. The wall
will be insulated to ten (10) feet  from
finished floor.

 

Record
and return to:

Principal
Life lisurance Company 

c/o Principal Capital Management, LLC 

801 Grand Avenue 

Des Moines, Iowa 50392 

Attn: Donise Cannaday

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

THIS
AGREEMENT, made and entered into as of the     day of            20  ,
by and between PRINCIPAL LIFE INSURANCE COMPANY, an Iowa corporation, with its
principal office at 801 Grand Avenue, Des Moines, Iowa 50392 (hereinafter
called “Mortgagee”), MAJESTIC REALTY CO., and PATRICIAN ASSOCIATES, INC., both
California corporations, with its principal office at 13191 Crossroads Parkway
North, 6th Floor, City of Industry, California 91746 (hereinafter called “Lessor”)
and CHINO COMMERCIAL BANK, N.A., a National Association (hereinafter called “Lessee”);

WITNESSETH:

WHEREAS, Lessee has by a written lease dated January 10, 2000, and all
future amendments, modifications and extensions approved in writing by
Mortgagee (hereinafter called the “Lease”) leased from Lessor all or part of
certain real estate and improvements thereon located in the City of Chino as
more particularly described in Exhibit A attached hereto (the “Demised Premises”);
and

WHEREAS, Lessor is encumbering the Demised Premises as security for a
loan (the “Loan”) from Mortgagee to Lessor (the “Mortgage”); and

WHEREAS, Lessee, Lessor and Mortgagee have agreed to the following with
respect to their mutual rights and obligations pursuant to the Lease and the
Mortgage;

NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00) paid
by each party to the other and the mutual covenants and agreements herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto do hereby covenant and agree as
follows:

(1)           Lessee’s interest in
the Lease and all rights of Lessee thereunder, including any purchase option or
right of first refusal in connection with a sale of the Demised Premises, if
any, shall be and are hereby declared, subject and subordinate to the Mortgage
upon the Demised Premises and its terms, and the term “Mortgage” as used herein
shall also include any amendment, supplement, modification, renewal, refinance
or replacement thereof.

(2)           In the event of any
foreclosure of the Mortgage or any conveyance in lieu of foreclosure, provided
that the Lessee shall not then be in default beyond any grace period under the
Lease and that the Lease shall then be in full force and effect, then Mortgagee
shall neither terminate the Lease nor join Lessee in foreclosure proceedings,
nor disturb Lessee’s possession,

 

and the Lease shall continue
in full force and effect as a direct lease between Lessee and Mortgagee.

(3)           After the receipt by Lessee of notice from Mortgagee of any
foreclosure of the Mortgage or any conveyance of the Demised Premises in lieu
of foreclosure, Lessee will thereafter attorn to and recognize Mortgagee or any
purchaser at any foreclosure sale or otherwise as its substitute lessor on the
terms and conditions set forth in the Lease.

(4) Lessee has not and shall
not prepay any of the rents under the Lease more than one month in advance
except with the prior written consent of Mortgagee.

(5)           In
no event shall Mortgagee be liable for the return of any security deposit, any
act or omission of the Lessor, nor shall Mortgagee be subject to any offsets or
deficiencies which Lessee may be entitled to assert against the Lessor as a
result of any act or omission of Lessor occurring prior to Mortgagee’s
obtaining title to the Demised Premises, it being understood that nothing in
this clause shall be deemed to exclude Mortgagee from responsibility for
repairs and maintenance required of the Lessor under the Lease from and after
the date Mortgagee acquires title to the Demised Premises, whether or not the
need for such repairs or maintenance accrued before or after such date;
provided, however, that in no event shall Mortgagee be responsible for
consequential damages resulting from the failure of Lessor to undertake such
repairs and maintenance.

(6)           So long as the Loan is outstanding, the Lease may not be
amended, modified, terminated, or subordinated without the prior written
consent of Mortgagee.

(7)           There shall be no merger of the Lease or the leasehold
estate created thereby with any other estate in the Demised Premises,
including, without limitation, the fee estate, by reason of the same person or
entity acquiring or holding, directly or indirectly, the Lease and said
leasehold estate and any such other estate.

(8)           All information, notices or requests provided for or
permitted to be given or made pursuant to this Agreement shall be deemed to be
an adequate and sufficient notice if given in writing and service is made by
either (i) registered or certified mail, postage prepaid, in which case notice
shall be deemed to have been received three (3) business days following deposit
to the mail; or (ii) nationally recognized overnight air courier, next day
delivery, prepaid, in which case such notice shall be deemed to have been
received one (1) business day following delivery to such courier. All notices
shall be addressed to the addresses set forth below, or to such other addresses
as may from time to time be specified in writing by Lessee, Lessor or Mortgagee
to the other parties hereto:

 2
 

 

If to Mortgagee:

Principal Life Insurance Company 

801 Grand Avenue 

Des Moines, Iowa 50392

If to Lessor:

Majestic Realty Co. and Patrician Associates, Inc. 

13191 Crossroads Parkway North, 6th Floor 

City of Industry, California 91746

If to Lessee:

Chino Commercial Bank, N.A. 

14345 Pipeline Avenue, 

Chino, California 91710

(9)           This Agreement and its terms shall be governed by the laws
of the state where the Demised Premises are located and shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns, including without limitation, any purchaser at any foreclosure
sale or otherwise. This Agreement may not be modified orally or in any manner
other than by an agreement, in writing, signed by the parties.

(10)         This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, and such counterparts when taken together
shall constitute but one agreement.

(Signatures
on following page)

 3
 

 

IN WITNESS WHEREOF, this
Agreement has been fully executed under seal on the day and year first above
written.

	
  PRINCIPAL LIFE INSURANCE
  COMPANY,

  
	
  an Iowa
  corporation, Mortgagee

  
	
   

  
	
  By:

  	
  /s/Terrence
  M. Tobin

  	
   

  
	
  Name: Terrence M. Tobin

  
	
  Title: Counsel

  
	
   

  
	
   

  
	
  By:

  	
  /s/Stephen
  G. Skrivanek

  	
   

  
	
  Name: Stephen G. Skrivanek

  
	
  Title: Counsel

  
	
   

  
	
  MAJESTIC REALTY
  CO., a

  
	
  California
  corporation, Lessor

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  
	
   

  
	
  PATRICIAN
  ASSOCIATES, INC., a

  
	
  California
  corporation, Lessor

  
	
   

  
	
  By:

  	
  /s/Terrence
  M. Tobin

  	
   

  
	
  Name Terrence M. Tobin

  
	
  Title:Counsel and Assistant Secretary

  
	
   

  
	
  By:

  	
  /s/Stephen
  G. Skrivanek

  	
   

  
	
  Name: Stephen G. Skrivanek

  
	
  Title: Counsel and Assistant Secretary

  
	
   

  
	
  CHINO COMMERCIAL
  BANK, N.A.,

  
	
  a National
  Association, Lessee

  
	
   

  
	
   

  
	
  By:

  	
  /s/Dann
  H. Bowman

  	
   

  
	
  Name:

  	
  Dann H. Bowman

  	
   

  
	
  Title:

  	
  President/ CEO

  	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					

 

 4

 

ESTOPPEL CERTIFICATE 

The undersigned, Chino Commercial Bank, N.A., a
National Association, does hereby make the following statements:

1.             They
are the Tenant under a certain Lease dated January 10, 2000, with Majestic
Realty Co. and Patrician Associates, Inc., both California corporations, as
Landlord, leasing the Property commonly known as 14345 Pipeline Avenue,
Chino, California.

2.             The
Lease dated January 10, 2000, is in full force and effect and the undersigned
is aware of no defaults under the terms and conditions of the Lease and has no
offsets against rentals due the Landlord or to become due the Landlord.

3.             The
undersigned accepted possession of the Property on April 15, 2000, the Lease Term began on April 15, 2000,
and ends on June 30, 2005, and the obligation to pay Base Rent begins on April 15, 2000,
pursuant to the terms and conditions of the Lease.

4.             The
total Base Rent to be paid pursuant to the terms of said Lease is not less than
$5,730.10 and no Base Rent has been paid more than one
month in advance.

5.               In the event of a default by the Landlord
under any of the terms and conditions of the Lease, the undersigned at the same
time notice thereof is given to the Landlord, will notify holder of any first
mortgage or deed of trust covering the Property, provided Landlord has provided
Tenant the address of such Mortgagee. In the event that the default is not
cured by the Landlord within the time provided for under the terms and
conditions of the Lease and provided the Mortgagee has given the undersigned
written notice of Mortgagee’s intention to cure such default, the undersigned
will allow the Mortgagee the opportunity and sufficient additional time within
which to correct Landlord’s default, provided the Mortgagee diligently pursues
such cure.

	
   

  	
  CHINO COMMERCIAL BANK, N.A., a

  
	
   

  	
  National Association

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Dann H. Bowman

  
	
   

  	
  Title:

  	
  President/ CEO

  
	
   

  	
  Date:

  	
  January 22, 2002

  
				

 

 

FIRST AMENDMENT TO INDUSTRIAL REAL
ESTATE LEASE 

This FIRST AMENDMENT TO INDUSTRIAL REAL ESTATE LEASE (“First Amendment”) is made and entered into
as of October 27, 2004 (the “First Amendment
Date”), by and between MAJESTIC REALTY CO., a California corporation
and PATRICIAN ASSOCIATES, INC., a California corporation (collectively, “Landlord”), and CHINO COMMERCIAL BANK, N.A., a national association (“Tenant”).

RECITALS

A.            Tenant and Landlord entered into that certain Industrial
Real Estate Lease (the “Lease”),
dated January 10, 2000, whereby Landlord leased to Tenant and Tenant leased
from Landlord approximately 6,954 square feet of space (the “Property”) more commonly known as 14345
Pipeline Avenue, Chino, California and previously referred to as 14335 Pipeline
Avenue, Unit B, Chino, California.

B.            The parties desire to amend the Lease on the terms and
conditions set forth in this First Amendment.

AGREEMENT 

NOW, THEREFORE, in
consideration of the foregoing recitals and the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:

1. Terms.               All undefined terms when used herein shall
have the same respective meanings as are given such terms in the Lease unless
expressly provided otherwise in this First Amendment.

2. Extended Lease
Term.    The Lease Term is currently scheduled to
expire on June 30, 2005 (the “Lease
Expiration Date”). As of the First Amendment Date, the Lease
Term is extended to June 30, 2010 (the “Revised
Lease Expiration Date”), and, unless sooner terminated under the terms
of the Lease, as amended by this First Amendment, will expire on the Revised
Lease Expiration Date. The period of time beginning on the day following the
Lease Expiration Date and continuing through the Revised Lease Expiration Date
is the “Extended Lease Term.”

3. Base Rent.        Commencing as of July 1, 2005 and continuing
until through June 30, 2006, the monthly Base Rent shall be an amount equal to
SIX THOUSAND FOUR HUNDRED FORTY-NINE AND 27/100 DOLLARS ($6,449.27). Commencing
as of July 1, 2006 and continuing until through June 30, 2007, the monthly Base
Rent shall be an amount equal to SIX THOUSAND SIX HUNDRED FORTY-TWO AND 75/100
DOLLARS ($6,642.75). Commencing as of July 1, 2007 and continuing until through
June 30, 2008, the monthly Base Rent shall be an amount equal to SIX THOUSAND
EIGHT HUNDRED FORTY-TWO AND 03/100 DOLLARS ($6,842.03). Commencing as of July
1, 2008 and continuing until through June 30, 2009, the monthly Base Rent shall
be an amount equal to SEVEN THOUSAND FORTY-SEVEN AND 29/100 DOLLARS
($7,047.29). Commencing as of July 1, 2009 and continuing until through June
30, 2010, the monthly Base Rent shall be an amount equal to SEVEN THOUSAND TWO
HUNDRED FIFTY-EIGHT AND 71/100 DOLLARS ($7,258.71).

4. Security Deposit.             Concurrently with Tenant’s execution and
delivery of this First Amendment, Tenant shall deposit with Landlord an
additional Security Deposit in an amount equal to One Hundred Eighty-Seven and
84/100 ($187.84) as additional security for the performance by Tenant of its
obligations under the Lease, as amended by this First Amendment.

5. Tenant’s Acceptance of the Property.         Landlord
and Tenant acknowledge that Tenant has been occupying the Property pursuant to
the Lease, since on or about April 3, 2000, and therefore Tenant continues to
accept the Property in its presently existing, “as is” condition and Landlord
has made no representation or warranty with regard to the condition of the
Property or the suitability thereof for Tenant’s business, nor shall Landlord
be obligated to provide or pay for any improvement work or services related to
the improvement of the Property.

 1
 

 

6.
Deletions.          Effective as of the First Amendment
Date, Article 17 of the Lease and the Option to Extend Term Lease Rider
attached to the Lease are hereby deleted and shall be of no further force or
effect.

7. Brokers.           The parties recognize that the only
brokers involved in the negotiation of this First Amendment are Majestic Realty
Co. and Seapower Carpenter Capital, Inc. and agree that Landlord shall be
solely responsible for the payment of any “Brokerage Commission” to such
brokers. Each party represents and warrants to the other that they have not
dealt with any other broker in connection with the negotiation and consummation
of this First Amendment and they each know of no other real estate broker,
agent or finder who is, or might be, entitled to a commission or compensation
in connection with this First Amendment. Each party agrees to indemnify and
defend the other party against, and hold the other party harmless from, any and
all claims, demands, losses, liabilities, damages, lawsuits, judgments, and
costs and expenses (including, without limitation, reasonable attorneys’ fees
and costs) with respect to any leasing commission or equivalent compensation
alleged to be owing on account of the indemnifying party’s dealings with any
other real estate broker or agent.

8.
No Other Modifications.                Except
as otherwise provided herein, all other terms and provisions of the Lease shall
remain in full force and effect, unmodified by this First Amendment.

9.
Binding Effect.   The provisions of this First Amendment shall
be binding upon and inure to the benefit of the heirs, representatives,
successors and permitted assigns of the parties hereto.

10.
Authority.         The
parties represent and warrant that they have the requisite authority to bind
the entity on whose behalf they are signing.

11. Counterparts.  This First Amendment may be executed in any
number of original counterparts. Any such counterpart, when executed, shall
constitute an original of this First Amendment, and all such counterparts
together shall constitute one and the same First Amendment.

[Signatures
on next page.]

 2
 

 

IN WITNESS WHEREOF, the parties have entered into this First Amendment as of the date first
set forth above.

	
  

  	
   

  	
  “LANDLORD”

  
	
   

  	
   

  	
   

  
	
  Executed on

  	
  November 23

  	
  , 2004

  	
   

  	
   

  	
  MAJESTIC REALTY CO.,

  	
   

  
	
   

  	
   

  	
  a California corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/David Wheeler

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Jay Bradford

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Executed on

  	
  December 01

  	
  , 2004

  	
   

  	
   

  	
  PATRICIAN ASSOCIATES,
  INC.,

  	
   

  
	
   

  	
   

  	
  a California corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  PRINCIPAL REAL ESTATE

  
	
   

  	
   

  	
   

  	
  INVESTORS, LLC

  
	
   

  	
   

  	
   

  	
  a Delaware limited
  liability company,

  
	
   

  	
   

  	
   

  	
  its authorized signatory

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Troy A. Koerselman

  	
   

  
	
   

  	
   

  	
   

  	
  Troy A. Koerselman

  
	
   

  	
   

  	
   

  	
  Investment Director

  
	
   

  	
   

  	
   

  	
  Assest Management

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Executed on

  	
  November 10

  	
  , 2004

  	
   

  	
   

  	
  “TENANT”

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CHINO COMMERCIAL BANK,
  N.A.,

  
	
   

  	
   

  	
  a national association

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Dann H. Bowman

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
  President/ CEO

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
   

  	
   

  
														

 

 3

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