Document:

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Exhibit 10.7 Stock Purchase Agreement

                            STOCK PURCHASE AGREEMENT

         This Stock Purchase Agreement dated as of December 1, 2000, is by and
among Centennial First Financial Services, a California corporation
("Centennial"), Community West Bancshares, a California corporation
("Community"), Community's wholly-owned subsidiary, Palomar Community Bank, a
California banking corporation ("Palomar") and Richard Sanborn, President and
Chief Executive Officer of Palomar ("Sanborn").

                                    RECITALS:

         WHEREAS, Sanborn has entered into a letter of intent dated as of
September 15, 2000, with Community which letter of intent provides for Sanborn's
acquisition of Palomar from Community;

         WHEREAS, the Parties agree that such letter of intent is terminated
with the execution of this Agreement;

         WHEREAS, Centennial wishes to acquire all of the outstanding stock of
Palomar from Community under the terms of the letter of intent as amended by
this Agreement;

         WHEREAS, the respective Boards of Directors of Palomar, Community and
Centennial have determined that it is in the best interests of Palomar,
Community and Centennial and their respective shareholders for Centennial to
purchase the outstanding shares of Palomar from Community, upon the terms and
subject to the conditions set forth in this Agreement and in accordance with the
California Corporations Code and other applicable laws (the "Stock Purchase");

         WHEREAS, each of the Boards of Directors of Community, Centennial and
Palomar have approved this Agreement and the transactions contemplated hereby;
and

         WHEREAS, upon the consummation of the Stock Purchase, Palomar shall
become a wholly-owned subsidiary of Centennial.

         NOW THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and other agreements set forth herein,
and intending to be legally bound hereby, Centennial, Community, Palomar and
Sanborn hereby agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

         1.1 DEFINITIONS. Capitalized terms contained in this Agreement and not
defined in the preamble or the recitals above shall have the meanings set forth
in this+ Section 1.1:

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         "AUDITED FINANCIAL STATEMENTS" means Palomar's audited balance sheet,
cash flow statement and statement of shareholders' equity, with footnotes,
prepared in accordance with GAAP, as of December 31, 2000 and December 31, 1999
and for the year then ended, as audited by Palomar's independent auditors, and
income statement for the three years ending December 31, 2000, as audited by
Palomar's independent auditors.

         "ACCOUNTING LETTER" shall have the meaning set forth in Section 5.2.10.

         "AFFILIATE" shall mean, with respect to any Person, any other Person
controlling, controlled by or under common control with such Person, or a
Principal Shareholder of such Person. As used in this definition, "control"
(including with its correlative meanings, "controlled by" and "under common
control with") means the possession, directly or indirectly, of power to direct
or cause the direction of the management and policies of a Person whether
through the ownership of voting securities, by contract or otherwise.

         "AGREEMENT" means this Stock Purchase, including the Disclosure
Schedules and all Exhibits hereto, as the same may be hereafter amended.

         "ASSOCIATE" shall have the meaning ascribed thereto in Rule 14a-1 under
the Exchange Act.

         "BALANCE SHEET DATE" means September 30, 2000.

         "BENEFIT PLAN" means any employee benefit plan (including any "employee
benefit plan" as defined in Section 3(3) of ERISA) maintained or contributed to
by the applicable entity.

         "BORROWER GROUP OBLIGATIONS" means, as the context requires, all loans
from Palomar and other obligations to Palomar of, (a) the applicable borrower,
(b) all guarantors of such borrower, and (c) all affiliates and associates of
such borrower and guarantors.

         "BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday or
Friday that banks in the State of California are not required by Law to be
closed.

         "CAPITAL RAISING DATE" means June 15, 2001, if Centennial receives the
Audited Financial Statements on or before February 28, 2001, or June 15, 2001
plus that number of days which elapse after February 28, 2001 until the date on
which Centennial receives the Audited Financial Statements.

         "CENTENNIAL" means Centennial First Financial Services, a California
corporation.

         "CENTENNIAL GOVERNMENTAL APPROVALS" means the approvals listed on
DISCLOSURE SCHEDULE SECTION 3.2.4.

         "CENTENNIAL MINIMUM NEW CAPITAL" means $5,500,000 of equity capital.

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         "CLASSIFIED ASSET" means (a) any loan or lease asset that is classified
on the books and records of the applicable entity as "Substandard," "Doubtful"
or "Loss," and (b) any property classified on the books and records of the
applicable entity as OREO.

         "CLOSING" means the closing of the Stock Purchase, to be held on the
Closing Date at a location fixed pursuant to Section 7.1.

         "CLOSING DATE" shall mean the date as of which the Closing of the Stock
Purchase occurs, as the same may be fixed pursuant to Section 7.1.

         "CODE" shall mean the Internal Revenue Code of 1986, as amended.

         "COMMON STOCK CONSIDERATION" shall mean $10,500,000.

         "COMMUNITY" means Community West Bancshares.

         "COMMUNITY GOVERNMENTAL APPROVALS" means the approvals listed on
DISCLOSURE SCHEDULE SECTION 3.1.7.

         "CRITICIZED ASSET" means any Classified Asset and any other loan or
lease asset of the applicable Party classified on the books and records of the
applicable Party as Other Loans Especially Mentioned, Special Mention,
Classified, Criticized, Credit Risk Assets, Concerned Loans or by words of
similar import.

         "DFI" means the California Department of Financial Institutions.

         "DIRECTOR AGREEMENT" shall mean an agreement in substantially the form
of EXHIBIT 3.1.5.

         "DISCLOSURE SCHEDULE" means the schedule delivered prior to the
execution of this Agreement by Community to Centennial, as supplemented
hereafter from time to time in accordance with Section 4.5.

         "EFFECTIVE TIME" means the time of the Closing of the Stock Purchase.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

         "EXCHANGE AGENT" means U.S. Stock Transfer or a banking institution,
corporate trust company or entity regularly engaged in a stock transfer business
that Centennial shall appoint to act as exchange agent hereunder with the
approval of Community.

         "EXPENSES" means all legal, accounting, consulting, investment banking
and other fees and expenses incurred by the applicable Party in connection with
the Stock Purchase (including expenses incurred in connection with the
preparation of this Agreement and all negotiations, due diligence and other
activities conducted prior hereto, including all broker's, finder's and similar
fees and severance

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expenses), not to exceed $250,000 and excluding any costs or expenses of
enforcing this Agreement otherwise payable under Section 7.14.

         "EXPIRATION DATE" means the close of business on the date that is
fifteen (15) days following the Capital Raising Date.

         "FDIC" means the Federal Deposit Insurance Corporation.

         "FINAL APPROVAL DATE" means the date on which the final Governmental
Approval is received.

         "GAAP" means generally accepted accounting principles as in effect in
the United States, consistently applied.

         "GOVERNMENTAL APPROVAL" means the approval of, or effectiveness of a
filing or registration with, a Governmental Entity necessary or desirable for
the consummation of the Stock Purchase (including the expiration of any waiting
period imposed thereby), including the Community Governmental Approvals and
Centennial Governmental Approvals.

         "GOVERNMENTAL ENTITY" means any administrative agency, commission,
court or other governmental authority or instrumentality, domestic or foreign,
including any government sponsored corporation having regulatory authority under
law.

         "HAZARDOUS MATERIAL" means any pollutant, contaminant, waste or
hazardous or toxic substance regulated by Law as such, and petroleum or
petroleum products.

         "INTERIM FINANCIAL STATEMENTS" means the Palomar unaudited balance
sheet, income statement and cash flow statement, prepared in accordance with
GAAP, as of September 30, 2000 and for the nine months then ended.

         "LAW" means any statute, law, ordinance, rule or regulation of any
Governmental Entity that is applicable to the referenced Person.

         "LOANS" shall have the meaning set forth in Section 3.1.11(1).

         "MATERIAL ADVERSE EFFECT" means, with respect to any Person, a material
adverse effect on the business, properties, assets, liabilities, results of
operations or financial condition of such Person (including such an effect
caused indirectly through any of its subsidiaries), or on the ability of such
Person to consummate the Stock Purchase on the terms hereof; PROVIDED, HOWEVER,
that a Material Adverse Effect does not include a change with respect to, or
effect on, such Person resulting from a change in Law, GAAP, RAP, or a change
with respect to, or effect on, such Person resulting from any other matter
having a comparable effect on financial institutions generally.

         "OLEM ASSET" means any loan or lease asset of the applicable entity
classified on the books and records of the applicable entity as "Other Loans
Especially Mentioned," "Special Mention," "Criticized," "Credit Risk Assets,"
"Concerned Loans" or by words of similar import.

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         "PALOMAR" means Palomar Community Bank, a California state-chartered
bank and wholly owned subsidiary of Community.

         "PALOMAR COMMON STOCK" means the no par value common stock of Palomar.

         "PALOMAR EMPLOYEE PLAN" shall have the meaning set forth in Section
3.1.18(1).

         "PALOMAR REGULATORS" means any and all Federal or state Governmental
Entities charged with the supervision or regulation of Palomar.

         "PALOMAR TANGIBLE MINIMUM SHAREHOLDERS' EQUITY" means $6,300,000.

         "PALOMAR TANGIBLE SHAREHOLDERS' EQUITY" means the shareholders' equity
of Palomar as of the month end prior to the Closing Date, determined in
accordance with RAP and this Agreement, excluding all goodwill and intangibles
on the books of Palomar.

         "PARTIES" means, collectively, Centennial, Community, Palomar and
Sanford.

         "PERSON" means any natural person, corporation, limited liability
company, general or limited partnership, limited liability partnership, joint
venture, joint stock company, trust, unincorporated organization, association,
sole proprietorship, governmental body, or agency or political subdivision of
any government.

         "PRINCIPAL SHAREHOLDER" means a holder of five percent (5%) or more of
the outstanding common stock of a Person.

         "QUALILFYING STRATEGIC TRANSACTION PROPOSAL" shall have the meaning
given the term in Section 4.1.2.

         "RAP" means Regulatory Accounting Principles, as interpreted by the
applicable entity's principal Federal Bank Regulator.

         "RECORDS" means all books, records and original documents in
Community's or Palomar's possession which pertain to and are utilized by
Community, Palomar or any of their respective subsidiaries to administer,
reflect, monitor, evidence or record information respecting the business and
operations of Palomar, including but not limited to all books, records and
documents relating to (a) corporate, regulatory, supervisory and litigation
matters of Palomar, (b) tax planning and payment of taxes of Palomar, (c)
personnel and employment matters of Palomar, and (d) the business or conduct of
the business of Palomar.

         "REGULATORY AGREEMENT" means any regulatory agreement, memorandum of
understanding or similar agreement with, any cease and desist or similar order
or directive entered or issued by, commitment letter or similar undertaking to,
any extraordinary supervisory letter from, any Palomar Regulator.

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         "REPRESENTATIVES" means each of the applicable Person's directors,
officers, employees, agents, representatives and advisors.

         "RETURNS" shall have the meaning set forth in Section 3.1.16(1).

         "SBA LOANS" mean loans originated by or through or with the assistance
of or the repayment of which is guaranteed, in whole or in part, by the Small
Business Administration.

         "SECURITIES ACT" means the Securities Act of 1933, as amended.

         "STOCK PURCHASE" means the purchase by Centennial of all the
outstanding shares of Palomar Common Stock from Community, as more particularly
described in Section 2.1.

         "STRATEGIC TRANSACTION" means (a) any acquisition or purchase after
December 1, 2000 of all or a significant (i.e., more than 10%) portion of the
assets of, or a more than 10% equity interest in, Palomar, (b) the acquisition
or purchase after December 1, 2000 by a shareholder or shareholders acting in
concert and owning as of December 1, 2000, 10% or more of the outstanding
Palomar Common Stock, or (c) any merger or other business combination involving
Palomar or any recapitalization involving Palomar.

         "STRATEGIC TRANSACTION PROPOSAL" means any proposal regarding a
Strategic Transaction.

         "TAX" means, except where the context otherwise requires, all Federal,
state, local and foreign income, profits, franchise, gross receipts, payroll,
sales, employment, use, property, withholding, excise, ad valorem, transfer,
license, occupancy, stamp and other taxes, duties or assessments of any nature
whatsoever, together with all interest, penalties and additions imposed with
respect to such amounts.

         "VIOLATION" means a conflict with, violation of, default under,
creation of a right of termination under, cancellation of, acceleration of any
obligation under, loss of a material benefit under, or creation of any lien,
pledge, security interest, charge or other encumbrance on assets under, the
referenced Law, organic document, agreement or other instrument, in each case
with or without notice or lapse of time, or both.

         1.2 RULES OF CONSTRUCTION.  The following rules of construction shall
apply to the interpretation of this Agreement:

                  1.2.1 Any reference to any event, change or effect being
"material" with respect to any Person means an event, change or effect which is
material in relation to the condition (financial or otherwise), properties,
assets, liabilities, businesses or operations of such entity and its
subsidiaries taken as a whole.

                  1.2.2 Disclosure of any matter in the Disclosure Schedule
hereto shall not be deemed to imply that such matter is or is not material, and
shall not constitute an admission or raise any inference that such matter
constitutes a violation of law or an admission of liability or facts supporting
liability.

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                  1.2.3 Whenever used in this Agreement, the word "including"
shall be nonexclusive and shall mean "including without limitation."

                  1.2.4 All references to Sections, Articles and sections of the
Disclosure Schedule shall, unless another agreement is expressly referenced,
mean the applicable sections or articles of, or section of the Disclosure
Schedule to, this Agreement.

                  1.2.5 The section titles and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of any provisions of this Agreement.

                  1.2.6 The terms "herein," "hereunder," and terms of similar
import refer to this Agreement as a whole and not to the specific Section or
Article in which they are used.

                  1.2.7 The phrase "to the knowledge" of a Party (and phrases of
similar import) shall mean to the actual knowledge, after reasonable inquiry, of
the executive officers of Centennial and Community, as applicable.

                  1.2.8 This Agreement is the joint product of Centennial and
Community, and each provision hereof has been subject to the mutual
consultation, negotiation and agreement of such Parties, and shall not be
construed for or against any Party.

                                   ARTICLE II
                               THE STOCK PURCHASE

         2.1 THE STOCK PURCHASE. Centennial and Community shall be the
constituent corporations to the Stock Purchase. Subject to the terms and
conditions of this Agreement, at the Effective Time, the Stock Purchase shall be
effected by means of the payment by Centennial in cash of the Common Stock
Consideration for all of the outstanding shares of Palomar Common Stock to
Community.

         2.2 CORPORATE DOCUMENTS, DIRECTORS AND OFFICERS. From and after the
Effective Time and thereafter until amended as provided by law, the Articles of
Incorporation of Palomar shall be the Articles of Incorporation of Palomar as in
effect immediately prior to the Effective Time and the Bylaws of Palomar shall
be the Bylaws of Palomar as in effect immediately prior to the Effective Time.
At the Effective Time, such individuals as may be selected by Centennial shall
be the directors of Palomar, and the officers of Palomar shall be those officers
appointed to offices of Palomar by the Board of Directors of Centennial. Each
such director or officer shall serve until his or her successor has been duly
elected or appointed and qualified or until his or her earlier death,
resignation or removal in accordance with the terms of Palomar's Articles of
Incorporation and Bylaws.

         2.3 DELIVERY OF CASH AND PALOMAR COMMON STOCK TO EXCHANGE AGENT.
Subject to the terms and conditions hereof, immediately prior to the Closing
Centennial shall issue and deliver

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to the Exchange Agent cash in the amount of the Common Stock Consideration and
Community shall deliver the outstanding shares of Palomar Common Stock to the
Exchange Agent.

         2.4 EXCHANGE PROCEDURES. At the Effective Time, the Exchange Agent
shall deliver the cash payment for the Common Stock Consideration to Community
and deliver the share certificate for all of the outstanding shares of Palomar
Stock to Centennial.

         2.5 CLOSING OF PALOMAR TRANSFER BOOKS. At the Effective Time, the
transfer books for Palomar Common Stock shall be closed, and no transfer of
shares of Palomar Common Stock shall thereafter be made on such books.

         2.6 ALTERNATIVE STRUCTURE. Notwithstanding anything to the contrary in
this Agreement, Centennial or Community may specify, with the approval of the
other Parties, that Centennial, Community, Palomar or an affiliate or subsidiary
of the Parties shall enter into transactions other than those described in this
Article II in order to effect the Stock Purchase of Palomar by Centennial, and
the Parties shall take or cause to be taken all actions necessary or appropriate
to effect such transactions; PROVIDED, however, that no such transaction may (a)
alter the form or change the amount of the Common Stock Consideration; (b)
diminish the benefits to be received or impose additional obligations upon the
directors, officers or employees of Community; or (c) materially delay the
receipt of any necessary Governmental Approval.

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

         3.1 BY PALOMAR AND COMMUNITY. Palomar and Community represent and
warrant as follows, except as specifically disclosed in the Disclosure Schedule
and Community does not represent and warrant anything for Palomar prior to
December 31, 1997 and concerning Sections 3.1.9, 3.1.11, 3.1.14 and 3.1.15:

                  3.1.1 ORGANIZATION, STANDING AND POWER. Community is a
California corporation duly organized, validly existing and in good standing
under the laws of the State of California. Community has all requisite power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted, and is duly qualified and in good standing to do
business in each jurisdiction in which a failure to be so qualified could
reasonably be expected to have a Material Adverse Effect on Community.

                  Palomar is a California banking corporation duly organized,
validly existing and in good standing under the laws of the State of California,
and is authorized to conduct a general banking business by the DFI. The deposit
accounts of Palomar are insured by the FDIC, and all premiums and assessments
required in connection therewith have been paid by Palomar as the same have
become due. Palomar has all requisite power and authority to own, lease and
operate its properties and to carry on its business as now being conducted, and
is duly qualified and in good standing to do business in each jurisdiction in
which a failure to be so qualified could reasonably be expected to have a
Material Adverse Effect on Palomar. Copies of the Articles of Incorporation and
Bylaws of Palomar, including all amendments thereto as of the date of this
Agreement, have been

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delivered to Centennial and are complete and correct. The minute books of
Palomar accurately reflect in all material respects all corporate actions held
or taken by Community as Palomar's sole shareholder and Palomar's Board of
Directors, including all committees of such Board of Directors.

                  3.1.2 CAPITAL STRUCTURE. As of the date hereof, the authorized
capital stock of Palomar consists of 5,000,000 shares of Palomar Common Stock,
of which 648,186 shares are issued and outstanding and 5,000,000 shares of
Serial Preferred Stock, of which no shares are issued and outstanding. No shares
are held in treasury by Palomar, and no shares are reserved for future issuance.
All outstanding shares of Palomar Common Stock and preferred stock have been
duly authorized and validly issued and are fully paid and nonassessable, and are
not subject to preemptive rights. All of the issued and outstanding shares of
Palomar Common Stock and preferred stock have been offered, issued and sold by
Palomar in compliance in all material respects with applicable federal and state
securities laws and regulations and in compliance with any preemptive right held
by any Person. Community is the only shareholder of Palomar. There are no
options, warrants, calls, rights, commitments or agreements of any character,
outstanding or in existence as of the date hereof to which Palomar is a party or
by which Palomar is bound obligating it to issue, deliver or sell, or cause to
be issued, delivered or sold, additional shares of capital stock or other
securities of Palomar or obligating Palomar to grant, extend or enter into any
such option, warrant, call, right, commitment or agreement. There are no
outstanding contractual obligations of Palomar to repurchase, redeem or
otherwise acquire any shares of capital stock of Palomar. There are no bonds,
debentures, notes or other instruments evidencing indebtedness of Palomar issued
or outstanding that entitle the holders thereof to vote on any matters on which
Community, as Palomar's sole shareholder, may vote.

                  3.1.3 INTERESTS IN OTHER ENTITIES. Except as disclosed in
DISCLOSURE SCHEDULE SECTION 3.1.3, Palomar has no subsidiaries and does not
otherwise hold any outstanding equity securities of any corporation or other
entity, is not a member of any partnership, joint venture or similar entity, and
is not a party to any partnership agreement or joint venture agreement, however
named.

                  3.1.4 AUTHORITY AND RELATED MATTERS. Subject only to the
approval of the Stock Purchase and this Agreement by the Community and
Centennial Governmental Approvals, Palomar and Community (a) have all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby (including the Stock Purchase), and (b) have
duly authorized the execution and delivery of this Agreement, and the
consummation of such transactions (including the Stock Purchase) by all
necessary corporate action on the part of Palomar's and Community's Boards of
Directors. This Agreement has been duly executed and delivered by Palomar and
Community and assuming due authorization, execution and delivery by Centennial,
constitutes the valid and binding obligation of Palomar and Community,
enforceable in accordance with its terms subject only to laws regarding
bankruptcy, insolvency, reorganization, moratorium or otherwise affecting
creditors' rights generally, to the application of general principles of equity
(whether considered in a proceeding in law or at equity), and to the provisions
of 12 U.S.C. Section 1818(b)(6)(D) and the powers of the FDIC thereunder.

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                  3.1.5 PALOMAR  AGREEMENTS.  Each  executive  officer and
director of Palomar has  executed and delivered to Centennial an agreement,
covering the matters described therein,  in substantially the form of EXHIBIT
3.1.5.

                  3.1.6 CONFLICTS. Neither the execution and delivery of this
Agreement, nor consummation of the transactions contemplated hereby (including
the Stock Purchase) nor compliance by Palomar and Community with any of the
provisions hereof, (a) conflict with or result in a breach of any provisions of
the Articles of Incorporation or Bylaws of Palomar or Community (b) except as
set forth in DISCLOSURE SCHEDULE SECTION 3.1.6, violate, conflict with or result
in a breach of any term, condition or provision of, or constitute a default (or
an event which, with notice or lapse of time, or both, would constitute a
default) under, or give rise to any right of termination, cancellation or
acceleration with respect to, or result in the creation of any lien, charge or
encumbrance upon any property or asset of Palomar or Community pursuant to, any
note, bond, mortgage, indenture, deed of trust, lease, agreement or other
instrument or obligation to which Palomar or Community is a party, or by which
any of its respective properties or assets may be bound or affected, or (c)
subject to receipt of all required governmental and shareholder approvals,
violate any law, rule or regulation or any judgment, decree, order, governmental
permit or license applicable to Palomar or Community, excluding from the
foregoing clauses (b) and (c) conflicts, breaches, defaults or violations which,
either individually or in the aggregate, would not have a Material Adverse
Effect on Palomar or Community, respectively.

                  3.1.7 CONSENTS. Except as disclosed on DISCLOSURE SCHEDULE
SECTION 3.1.7 (collectively, the "COMMUNITY GOVERNMENTAL APPROVALS"), no
consent, approval, order or authorization of, or registration, declaration or
filing with, any Governmental Entity or other Person is required in connection
with Palomar's and Community's execution and delivery of this Agreement or its
consummation of the Stock Purchase, as to which the failure to obtain the same
could reasonably be expected to have a Material Adverse Effect on Palomar or
Community or materially interfere with Palomar's or Community's ability to
consummate the Stock Purchase.

                  3.1.8 FINANCIAL STATEMENTS; RECORDS. Palomar has provided to
Centennial the unaudited financial statements for the years ended December 31,
1999 and December 31, 1998 and the Interim Financial Statements, as well as
audited financial statements for Palomar for the year ended December 31, 1997,
audited by Peat Marwick. Community and Palomar will use their best efforts to
deliver to Centennial the Audited Financial Statements on or before February 28,
2001. All such financial statements comply, and the Audited Financial
Statements, as audited and when delivered, will comply in all material respects,
with applicable accounting requirements and have been prepared in accordance
with GAAP, and fairly present the financial position of Palomar as of the dates
thereof and the results of its operations and cash flows for the periods then
ended. The Records of Palomar accurately and fairly reflect, in all material
respects, the business and activities of Palomar.

                  3.1.9 REGULATORY FILINGS AND AGREEMENTS. Except as set forth
in DISCLOSURE SCHEDULE SECTION 3.1.9, Palomar has timely filed all reports,
registrations and statements, together with any amendments required to be made
with respect thereto, that it was required to file since December 31, 1995 with
any Palomar Regulator, and has paid all fees and assessments due and payable in
connection therewith. Except as set forth on DISCLOSURE SCHEDULE SECTION 3.1.9,
and
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except for normal examinations conducted by a Palomar Regulator in the regular
course of the business of Community, (a) no Palomar Regulator has initiated any
proceeding or investigation or, to the best knowledge of Community, has
threatened to initiate any proceeding or investigation, into the business or
operations of Palomar or Community since December 31, 1995; (b) Palomar is not
a party to or subject to, and since December 31, 1995 has not been a party to
or subject to, any Regulatory Agreement with or from, and has not adopted any
board resolutions at the request of, any Palomar Regulator that restricts the
conduct of Palomar's business or in any manner relates to its business or
financial condition, including without limitation its capital adequacy, credit
policies, loan origination practices or management; (c) to the best knowledge
of Palomar and Community, no Palomar Regulator is contemplating issuing or
requesting (or considering the appropriateness of issuing or requesting) any
such Regulatory Agreement; (d) there is no material unresolved violation,
criticism, or exception by any Palomar Regulator with respect to any report or
statement relating to any examination of Palomar; (e) the most recent
Regulatory Rating given to Palomar respecting both CRA and other compliance
matters is "satisfactory;" and (f) to the best knowledge of Palomar and
Community, since the date of Palomar's last compliance examination it has not
received any complaints regarding its compliance with CRA, Regulation B of the
Federal Reserve Board or other similar Laws.

                  3.1.10 UNDISCLOSED LIABILITIES. Except as and to the extent
reflected in the Interim Financial Statements or set forth on DISCLOSURE
SCHEDULE SECTION 3.1.10, Palomar has no liabilities, commitments or obligations
of any nature, whether absolute, accrued, contingent or otherwise, and whether
due or to become due, and which would be required under GAAP to be shown in such
balance sheet or referenced in the notes thereto, other than (a) obligations
(including guarantees and letters of credit) not required by GAAP to be
reflected, reserved against or disclosed in its Interim Financial Statements,
all of which are set forth on DISCLOSURE SCHEDULE SECTION 3.1.10 and none of
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect on Palomar and (b) those incurred in the ordinary course
of business consistent with past practice since the Balance Sheet Date.

                  3.1.11   LOANS, CLASSIFIED AND OLEM ASSETS, RESERVES.

                           (1) All  currently  outstanding  loans of, or
current  extensions  of credit or credit commitments by, Palomar (the "LOANS")
were solicited, originated and currently exist in material compliance with all
applicable requirements of Federal and state law and regulations promulgated
thereunder and applicable loan policies of Palomar, except (i) for such changes
to the circumstances of the obligor thereunder or the collateral occurring
subsequent to the origination thereof, (ii) as set forth in DISCLOSURE SCHEDULE
SECTION 3. l.11 or (iii) where the failure to so comply would not result in a
Material Adverse Effect on Palomar. Except as set forth in DISCLOSURE SCHEDULE
SECTION 3.1.11, to Palomar's knowledge the Loans are adequately documented and
each note evidencing a Loan or loan or credit agreement or security instrument
related to the Loans constitutes a valid, legal and binding obligation of the
obligor thereunder, enforceable in accordance with the terms thereof, except
that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting enforcement of
creditors' rights generally and except that enforcement thereof may be subject
to general principles of equity (regardless of whether enforcement is considered
in a proceeding of law or in equity) and the availability of equitable remedies.
Except as set forth in DISCLOSURE SCHEDULE SECTION 3.1.11, no claims of defense

                                       11
<PAGE>

as to the enforcement of any Loan have been asserted against Palomar for which
there is a reasonable possibility of an adverse determination, and neither
Palomar nor Community is aware of any acts or omissions which would give rise to
any claim or right of rescission, set-off, counterclaim or defense for which
there is a reasonable possibility of an adverse determination to Palomar, where
such adverse determination could be expected to have a Material Adverse Effect
on Palomar.

                           (2) As of the Balance Sheet Date, the only assets of
Palomar that were (a) Classified Assets or OLEM Assets on Palomar's Records, or
(b) over 90 days delinquent in payment of principal or interest whether or not
the same are Classified Assets or OLEM Assets, are those listed on Part A of
DISCLOSURE SCHEDULE SECTION 3.1.11 hereto (which Disclosure Schedule Section
identifies the asset by loan number or other designation and sets forth the
original principal amount, the current book balance, the amount of any reserve
(or portion of the general reserve) allocated thereto, and the loan
classification). The loan and other asset classification procedures utilized by
Palomar are in accordance with RAP and prudent banking practice, and are
consistently applied. Part B of DISCLOSURE SCHEDULE SECTION 3.1.11 sets forth a
complete list of all existing or pending Loans or other agreements or
understandings between Palomar and directors, Principal Shareholders, officers,
employees or Affiliates of Palomar and Community, or their related interests all
of which comply, in all respects, with all provisions of applicable Law.

                           (3)      Palomar currently  maintains,  and shall
continue to maintain, an allowance for loan losses allocable to the Loans which
is adequate to provide for all known and estimable losses, net of any recoveries
relating to such extensions of credit previously charged off, on the Loans, such
allowance for loan losses complying in all material respects with all applicable
loan loss reserve requirements established in accordance with GAAP and by any
Governmental Authority having jurisdiction with respect to Palomar.

                  3.1.12 INVESTMENT SECURITIES. DISCLOSURE SCHEDULE SECTION
3.1.12 describes all of the investment securities owned by Palomar as of the
date hereof, including identification of the type of security, CUSIP numbers,
pool face values (where applicable), book values, market values and coupon
rates. Except as identified on such schedule, Palomar does not hold any forward
contracts, futures, options on futures, swaps or other derivative instruments.

                  3.1.13 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set
forth in DISCLOSURE SCHEDULE SECTION 3.1.13, since December 31, 1999, (a)
Palomar has conducted it business in the ordinary and usual course and (b) no
event has occurred or circumstance arisen that, individually or in the
aggregate, has had or is reasonably likely to have a Material Adverse Effect on
Palomar.

                  3.1.14 COMPLIANCE WITH APPLICABLE LAWS. Except as set forth in
DISCLOSURE SCHEDULE SECTION 3.1.14, the business of Palomar is, and at all times
since December 31, 1995 has been, conducted in compliance with all Laws
(including those relating to equal credit, fair lending, fair housing and
community reinvestment), except where a failure to so comply individually or in
the aggregate could not reasonably be expected to have a Material Adverse Effect
on Palomar, and (b) Palomar holds all permits, licenses, variances, exemptions,
orders and approvals of all Governmental Entities that are material to the
operation of the business of Palomar, and is in compliance with the terms of the
same except where the failure so to comply individually or in the aggregate
could not reasonably be expected to have a Material Adverse Effect on Palomar.

                                       12
<PAGE>

                  3.1.15 LITIGATION AND OTHER DISPUTES. Except as disclosed on
DISCLOSURE SCHEDULE SECTION 3.1.15, (a) there is no suit, action, or proceeding
(including any cross- or counter-claim) pending or, to the knowledge of Palomar
and Community, threatened, against or affecting Palomar, or any of its assets,
nor is there any judgment, decree, injunction, rule or order of any Governmental
Entity or arbitrator outstanding against Palomar the obligations under which
have not heretofore been fully performed; (b) Palomar has not accrued or set
aside any reserves relating to any suit, action, or proceeding (including any
cross- or counter-claim) pending or, to the knowledge of Palomar, threatened,
against or affecting Palomar or any of its respective assets; (c) since December
31, 1995, Palomar has not been a defendant, either directly or as
defendant-in-counterclaim or cross-claim, in any litigation in which any "lender
liability" cause of action was asserted against it; and (d) there are no claims
pending by any director, officer, employee or agent of Palomar for
indemnification under any outstanding indemnification agreement, arrangement or
understanding respecting indemnification or under applicable laws relating to
indemnification.

                  3.1.16   TAXES.

                           (1)      Palomar  has  (i)   correctly   prepared
and timely filed all returns, declarations, estimates, reports, claims for
refund, information returns and statements ("RETURNS") required to be filed with
respect to all Taxes, (ii) timely and properly paid all Taxes that are due and
payable, (iii) established on its Records reserves that are adequate for the
payment of all Taxes accrued but not yet due and payable and (iv) complied with
all Laws relating to the withholding and payment of all Taxes with respect to
employees' wages.

                           (2)      There  are  no  actual  or  proposed  Tax
deficiencies, assessments, or adjustments for Taxes with respect to Palomar or
any of its respective assets, property or operations. Except as set forth in
DISCLOSURE SCHEDULE SECTION 3.1.16, (i) there are no liens for Taxes upon the
assets of Palomar (other than liens for taxes not yet due and payable), (ii)
Community or Palomar has not requested any extension of time within which to
file any Return which has not since been filed, (iii) there are no waivers or
consents given by Community or Palomar regarding the application of the statute
of limitations with respect to any Taxes or Returns of Palomar, and (iv) no
federal, state, local or foreign audits or other administrative proceedings or
court proceedings are pending against Palomar with regard to any Taxes or
Returns.
                           (3)      Palomar has not made any  payments and is
not obligated under any contract to make any payments that will be
nondeductible, in whole or in part, under Section 280G or 162(m) of the Code.

                  3.1.17   CERTAIN AGREEMENTS.

                           (1)      Except as disclosed on DISCLOSURE SCHEDULE
SECTION 3.1.17, Palomar is not a party to, is bound or affected by, or receives
or is obligated to pay, benefits under (i) any agreement, arrangement or
commitment, including without limitation any agreement, indenture or other
instrument, relating to the borrowing of money by Palomar (other than in the
case of deposits, federal funds purchased and securities sold under agreements
to repurchase in the ordinary course of business) or the guarantee by Palomar of
any obligation; (ii) any agreement, arrangement or commitment relating to the
employment of a consultant or the employment, election or retention in

                                       13
<PAGE>

office of any present or former director, officer or employee of Palomar, other
than any agreement, arrangement or commitment terminable at will and without the
payment of any penalty by Palomar, or the termination of which otherwise would
not have a Material Adverse Effect on Palomar; (iii) any agreement, arrangement
or understanding pursuant to which any payment (whether of severance pay or
otherwise) became or may become due to any director, officer or employee of
Palomar upon execution of this Agreement or upon or following consummation of
the transactions contemplated by this Agreement (either alone or in connection
with the occurrence of any additional acts or events); (iv) any deposit account
held by any director or Affiliate of any director or by any officer or employee
of Palomar or Community; (v) any agreement, arrangement or understanding
pursuant to which Palomar is obligated to indemnify any director, officer,
employee or agent of Palomar; (vi) any agreement, arrangement or understanding
to which Palomar is a party or by which either of the same is bound which limits
the freedom of Palomar to compete in any line of business or with any person or
entity; (vii) any supervisory agreement, memorandum of understanding, consent
order, cease and desist order or condition of any regulatory order or decree
with or by an applicable federal or state regulatory agency; (viii) any lease of
real or personal property requiring payments of annual rental in excess of
$5,000, whether as lessor or lessee; or (ix) any other agreement, arrangement or
understanding which involves an annual payment of more than $5,000. A complete
copy of each such agreement, arrangement or understanding has been delivered to
Centennial or, if oral, is described in DISCLOSURE SCHEDULE SECTION 3.1.17.

                           (2)      Palomar  is  not  in  default  or  in
noncompliance, which default or noncompliance could reasonably be expected to
have a Material Adverse Effect on Palomar, under any contract, agreement,
commitment, arrangement, lease, insurance policy or other instrument to which it
is a party or by which its assets, business or operations may be bound or
affected, whether entered into in the ordinary course of business or otherwise
and whether written or oral, and there has not occurred any event that with the
lapse of time or the giving of notice, or both, would constitute such a default
or noncompliance.

                  3.1.18   EMPLOYEES AND EMPLOYEE BENEFIT PLANS.

                           (1)      DISCLOSURE  SCHEDULE  SECTION  3.1.18 sets
forth all Benefit Plans and any agreement, understanding, practice or
commitment, formal or informal, sponsored, maintained or contributed to by
Palomar for the benefit of the current or former directors, officers, employees
or independent contractors of Palomar (collectively, with the Benefits Plans,
(the "PALOMAR EMPLOYEE PLANS"). Palomar and Community has previously furnished
or made available to Centennial accurate and complete copies of the Palomar
Employee Plans together with (i) the most recent actuarial and financial reports
prepared with respect to any such plans that are qualified plans, (ii) the most
recent annual reports filed with any Governmental Entity with respect to each
such plan and (iii) all rulings and determination letters and any open requests
for rulings or letters that pertain to any such plan that is a qualified plan.

                           (2)      Except as set forth in DISCLOSURE  SCHEDULE
SECTION 3.1.18, none of Palomar, any pension plan maintained by it and qualified
under Section 401 of the Code or, to the best of Palomar's knowledge, any
fiduciary of such plan has incurred any liability to the PBGC, the Department of
Labor or the Internal Revenue Service with respect to the coverage of any
employees of Palomar under any Palomar Employee Plan that has not been satisfied
in full and that would have

                                       14
<PAGE>

a Material Adverse Effect on Palomar. To the best of Palomar's and Community's
knowledge, no reportable event under Section 4043(b) of ERISA has occurred with
respect to any Palomar Employee Plan that is a pension plan.

                           (3)      Palomar does  not participate  in nor has
incurred any liability under Section 4201 of ERISA for a complete or partial
withdrawal from a multi-employer plan (as such term is defined in ERISA).

                           (4)      A favorable  determination  letter has been
issued by the Internal Revenue Service with respect to each Palomar Employee
Plan that is an "employee pension benefit plan" (as defined in Section 3(2) of
ERISA) (a "PALOMAR PENSION PLAN") which is intended to qualify under Section 401
of the Code to the effect that (i) such plan is qualified under Section 401 of
the Code and (ii) the trust associated with such employee pension plan is tax
exempt under Section 501 of the Code. No such letter has been revoked or, to the
best of Palomar's knowledge, is threatened to be revoked and Palomar does not
know of any grounds on which such revocation may be based. Palomar does not have
any material liability under any such plan that is not reflected on the balance
sheet of Palomar at December 31, 1999 included in the Palomar 1999 Financial
Statements, other than liabilities incurred in the ordinary course of business
in connection therewith subsequent to the date thereof.

                           (5)      Except as set forth in DISCLOSURE SCHEDULE
SECTION 3.1.18, no prohibited transaction (which shall mean any transaction
prohibited by Section 406 of ERISA and not exempt under Section 408 of ERISA or
Section 4975 of the Code) has occurred with respect to any Palomar Employee Plan
which would result in the imposition, directly or indirectly, of a material
excise tax on Palomar under Section 4975 of the Code or otherwise have a
Material Adverse Effect on Palomar.

                           (6)      Except as set forth in DISCLOSURE  SCHEDULE
SECTION 3.1.18, full payment has been made (or proper accruals have been
established to the extent required by generally accepted accounting principles)
of all contributions which are required for periods prior to the date hereof,
and full payment will be so made (or proper accruals will be so established to
the extent required by generally accepted accounting principles) of all
contributions which are due and payable after the date hereof and prior to the
Effective Time, under the terms of each Palomar Employee Plan or ERISA; no
accumulated funding deficiency (as defined in Section 302 of ERISA or Section
412 of the Code), whether or not waived, exists with respect to any Palomar
Pension Plan, and there is no "unfunded current liability" (as defined in
Section 412 of the Code) with respect to any Palomar Pension Plan.

                           (7)      Except as set forth in  DISCLOSURE  SCHEDULE
SECTION 3.1.18, the Palomar Employee Plans have been operated in compliance in
all material respects with the applicable provisions of ERISA, the Code, all
regulations, rulings and announcements promulgated or issued thereunder and all
other applicable governmental laws and regulations.

                           (8)      Except as set forth in  DISCLOSURE  SCHEDULE
SECTION  3.1.18,  there are no pending or, to the best knowledge of Palomar,
threatened claims (other than routine claims for

                                       15
<PAGE>

benefits) by, on behalf of or against any of the Palomar Employee Plans or any
trust related thereto or any fiduciary thereof.

                           (9)      No work stoppage  involving  Palomar is
pending or, to the best knowledge of Palomar, threatened. Palomar is not
involved in, or to the best knowledge of Palomar threatened with or affected by,
any labor dispute, arbitration, lawsuit or administrative proceeding involving
the employees of Palomar which could reasonably be expected to have a Material
Adverse Effect on Palomar. Employees of Palomar are not represented by any labor
union nor are any collective bargaining agreements otherwise in effect with
respect to such employees, and to the best of Palomar's knowledge, there have
been no efforts to unionize or organize any employees of Palomar.

                  3.1.19 PROPERTIES. All real and personal property owned by
Palomar or presently used by it in its business is in condition (ordinary wear
and tear excepted) sufficient to carry on the business of Palomar in the
ordinary course of business consistent with its past practices. Palomar has good
and marketable title free and clear of all liens, encumbrances, charges,
defaults or equities (other than equities of redemption under applicable
foreclosure laws or of lessors respecting any leased property) to all of the
material properties and assets, real and personal, reflected on the Interim
Financial Statements or acquired after such date, other than properties sold by
Palomar in the ordinary course of business, except (i) liens for current taxes
not yet due or payable, (ii) pledges to secure deposits and other liens incurred
in the ordinary course of its banking business and (iii) such imperfections of
title, easements and encumbrances, if any, as are not material in character,
amount or extent. All real and personal property which is material to Palomar's
business and leased or licensed by Palomar is held pursuant to leases or
licenses which are valid and enforceable in accordance with their respective
terms and such leases will not terminate or lapse prior to the Effective Time.
DISCLOSURE SCHEDULE SECTION 3.1.19 sets forth a brief description of each
material real property owned or leased by Palomar and used in the conduct of its
business, and Palomar has provided Centennial with a current title report dated
within 30 days of the date hereof for each such property owned by Palomar.

                  3.1.20 ENVIRONMENTAL. Except as set forth on DISCLOSURE
SCHEDULE SECTION 3.1.20, Palomar and all real property (including OREO) in the
possession of Palomar or over which Palomar exercises control are, and at all
times while in the possession or control of Palomar each property at any time
since December 31, 1995 owned, possessed or controlled by Palomar has been, in
compliance with all applicable Laws relating to pollution or protection of human
health or the environment (including Laws relating to emissions, discharges,
releases or threatened releases of Hazardous Material or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Material), except for any violations of Law
that, either individually or in the aggregate, have not had and cannot
reasonably be expected to have a Material Adverse Effect on Palomar. Except as
set forth on DISCLOSURE SCHEDULE SECTION 3.1.20 to the best knowledge of Palomar
there has not occurred any release of Hazardous Material on, under or affecting
any real property during the period of Palomar's ownership, possession or
operation of such property (including its participation in the management of any
business located on such property) or during any prior period except for
releases that, individually or in the aggregate, have not had and cannot
reasonably be expected to have a Material Adverse Effect on Palomar. To the
knowledge of Palomar, Palomar has no property now or heretofore in its
possession is or has ever

                                       16
<PAGE>

been a defendant in or the subject of any suit, claim, action, proceeding,
investigation or notice before any Governmental Entity or other forum relating
to an alleged violation (including by any predecessor) of any environmental Law
or any Law relating to the release or threatened release into the environment of
any Hazardous Material, whether or not occurring at or on a site owned, leased
or operated by Palomar.

                  3.1.21 INTELLECTUAL PROPERTY. Except as set forth in
Disclosure Schedule Section 3.1.21, Palomar owns, or possesses valid and binding
licenses and other rights to use without payment (other than payments for
software licenses incurred in the ordinary course of business), all material
trademarks, trade names, service marks, copyrights, trade secrets and patents
used in its businesses, and Palomar has not received any challenge of the same
by any Person or any notice of alleged conflict between the same and the rights
of any other Person. Palomar has, in all material respects, performed all of its
obligations under, is not materially in default under, and has not created any
right of termination under, cancellation of, acceleration of any obligation
under, or loss of a material benefit under, any contract, agreement, arrangement
or commitment relating to any of the foregoing.

                  3.1.22 INSURANCE. Palomar is insured, and during each of the
past three calendar years has been insured, for reasonable amounts with
financially sound and reputable insurance companies against such risks as
companies engaged in a similar business would, in accordance with good business
practice, customarily be insured and has maintained all insurance required by
applicable laws and regulations, with the exception of directors' and officers'
liability insurance. DISCLOSURE SCHEDULE SECTION 3.1.22 contains a list
identifying all insurance policies maintained by it as of the date hereof, and
describing all claims made since January 1, 1997. All of the policies and bonds
maintained by Palomar are in full force and effect and all claims thereunder
have been filed in a due and timely manner and no such claim has been denied.

                  3.1.23 BROKERS. Palomar has not employed any broker, finder or
similar Person in connection with the Stock Purchase, and neither has incurred
or will incur any broker's, finder's or similar fees, commissions or expenses in
connection with the Stock Purchase except as set forth in DISCLOSURE SCHEDULE
SECTION 3.1.23.

                  3.1.24 DISCLOSURE OF ALL MATERIAL MATTERS. None of the
representations and warranties of Palomar and Community or any of the written
information or documents which are furnished by Palomar and Community to
Centennial pursuant to this Agreement or in connection with the transactions
contemplated hereby, when considered as a whole, contains or will contain any
untrue statement of a material fact, or omits or will omit to state any material
fact required to be stated or necessary to make any such information or
document, at the time and in light of the circumstances (including without
limitation the nature and scope of the information described in the
representation, warranty, information or document), not misleading. Copies of
all documents previously provided to Centennial or made available to Centennial
pursuant to this Article III are true, correct and complete copies thereof and
include all amendments, supplements and modifications thereto and all waivers
thereunder.

                  3.1.25 REGULATORY MATTERS. Palomar and Community know of no
reason that any Governmental Entity will not approve the transactions
contemplated by this Agreement. Palomar

                                       17
<PAGE>

and Community shall cooperate with Centennial in pursuing and filing all
applications with all Governmental Entities required to approve the
transactions.

                  3.1.26   COMMUNITY'S  AGREEMENT.  Community  has  executed
and delivered to Centennial an agreement, covering the matters described
therein, in substantially the form of EXHIBIT 3.1.26.

         3.2      BY CENTENNIAL.  Centennial represents and warrants as follows:

                  3.2.1 ORGANIZATION, STANDING AND POWER. Centennial is a
California corporation duly organized, validly existing and in good standing
under the laws of the State of California. Centennial has all requisite power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted, and is duly qualified and in good standing to
do business in each jurisdiction in which a failure to be so qualified could
reasonably be expected to have a Material Adverse Effect on the ability of
Centennial to complete the Stock Purchase.

                  3.2.2 AUTHORITY AND RELATED MATTERS. Subject only to the
Community and Centennial Governmental Approvals, Centennial (a) has all
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby (including the Stock Purchase),
and (b) has duly authorized the execution and delivery of this Agreement, and
the consummation of such transactions (including the Stock Purchase) by all
necessary corporate action on the part of Centennial's Board of Directors. This
Agreement has been duly executed and delivered by Centennial and, assuming due
authorization, execution and delivery by Community, constitutes the valid and
binding obligation of Centennial, enforceable in accordance with its terms
subject only to laws regarding bankruptcy, insolvency, reorganization,
moratorium or otherwise affecting creditors' rights generally, to the
application of general principles of equity (whether considered in a proceeding
in law or at equity).

                  3.2.3 CONFLICTS. Neither the execution and delivery of this
Agreement, nor consummation of the transactions contemplated hereby (including
the Stock Purchase) nor compliance by Centennial with any of the provisions
hereof, (a) conflict with or result in a breach of any provisions of the
Articles of Incorporation or Bylaws of Centennial (b) except as set forth in
DISCLOSURE STATEMENT SCHEDULE 3.2.3, violate, conflict with or result in a
breach of any term, condition or provision of, or constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a default)
under, or give rise to any right of termination, cancellation or acceleration
with respect to, or result in the creation of any lien, charge or encumbrance
upon any property or asset of Centennial pursuant to, any note, bond, mortgage,
indenture, deed of trust, lease, agreement or other instrument or obligation to
which Centennial is a party, or by which any of its properties or assets may be
bound or affected, or (c) subject to receipt of all required governmental
approvals, violate any law, rule or regulation or any judgment, decree, order,
governmental permit or license applicable to Centennial, excluding from the
foregoing clauses (b) and (c) conflicts, breaches, defaults or violations which,
either individually or in the aggregate, would not have a Material Adverse
Effect on Centennial.

                3.2.4 CONSENTS. Except as disclosed on DISCLOSURE SCHEDULE
SECTION 3.2.4, (collectively, the "CENTENNIAL GOVERNMENTAL APPROVALS"), no
consent, approval, order or

                                       18
<PAGE>

authorization of, or registration, declaration or filing with, any Governmental
Entity or other Person is required in connection with Centennial's execution and
delivery of this Agreement or its consummation of the Stock Purchase, as to
which the failure to obtain the same could reasonably be expected to have a
Material Adverse Effect on Centennial or materially interfere with Centennial's
ability to consummate the Stock Purchase.

                  3.2.5 ACCESS TO FUNDS. All Parties recognize that Centennial
currently does not have the funds to consummate the Stock Purchase and must
raise equity and debt to consummate the Stock Purchase. Centennial will raise on
or before the Capital Raising Date not less than the Centennial Minimum New
Capital and have on the Capital Raising Date, all funds necessary to consummate
the Stock Purchase and pay the Common Stock Consideration due to Community as
the sole shareholder of Palomar Common Stock.

                  3.2.6 LEGAL PROCEEDINGS. There are no existing or, to the best
knowledge of Centennial, threatened, legal, administrative, arbitration or other
proceedings, claims, actions, controversies or governmental investigations of
any nature against or involving Centennial which could reasonably be expected to
have a Material Adverse Effect on the ability of Centennial to consummate the
transactions contemplated hereby.

                  3.2.7 DISCLOSURE OF ALL MATERIAL MATTERS. None of the
representations and warranties of Centennial or any of the written information
or documents which are furnished by Centennial to Community pursuant to this
Agreement or in connection with the transactions contemplated hereby, when
considered as a whole, contains or will contain any untrue statement of a
material fact, or omits or will omit to state any material fact required to be
stated or necessary to make any such information or document, at the time and in
light of the circumstances (including without limitation the nature and scope of
the information described in the representation, warranty, information or
document), not misleading.

                  3.2.8 REGULATORY MATTERS. Centennial knows of no reason that
any Governmental Entity will not approve the transactions contemplated by this
Agreement. Centennial shall diligently pursue the filing of all applications
with all Governmental Entities required to approve the transactions.

                  3.2.9    STRATEGIC  TRANSACTIONS.   Centennial  is  not
presently  considering  any  business combination or acquisition of another
financial entity.

                  3.2.10 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of
its formation, (a) Centennial has conducted it business in the ordinary and
usual course and (b) no event has occurred or circumstances arisen that,
individually or in the aggregate, has had or is reasonably likely to have a
Material Adverse Effect on Centennial.

                                       19
<PAGE>

                                   ARTICLE IV
                              ADDITIONAL AGREEMENTS

         4.1      DISCUSSIONS WITH THIRD PARTIES.

                  4.1.1 Palomar and Community (a) shall not, and shall instruct
and cause each of their Representatives not to, solicit or encourage, directly
or indirectly, inquiries or proposals with respect to any Strategic Transaction
Proposal, and, (b) shall not, and shall instruct and cause each of their
Representatives not to, furnish any nonpublic information relating to or
participate in any negotiations, discussions or other activities concerning, any
Strategic Transaction with any Person other than Centennial. Palomar and
Community shall notify Centennial promptly after any Strategic Transaction
Proposal is received by, or any negotiations or discussions regarding a
Strategic Transaction Proposal are sought to be initiated with, directly or
indirectly, Community or any of its Representatives, and shall disclose to
Centennial the identity of the third party making or seeking to make such
Strategic Transaction Proposal, the terms and conditions thereof and such other
information as Centennial reasonably may request.

                  4.1.2 Not withstanding Section 4.1.1, following receipt of a
Qualifying Strategic Transaction Proposal, neither Palomar, Community nor any of
their Representatives shall be prohibited from (a) engaging in discussions or
negotiations with a third party which has made a proposal that satisfies the
requirements of a Qualifying Strategic Transaction Proposal and thereafter
providing to such third party information previously provided or made available
to Centennial, provided the third party shall have entered into a
confidentiality agreement substantially similar to the confidentiality
provisions of Section 4.2.3 hereof, (b) taking and disclosing to the Community
Shareholders a position contemplated by Rule 14e-2(a) under the Exchange Act or
otherwise making disclosure of the Qualifying Strategic Transaction Proposal to
its shareholders, or (c) subject to the terms of Section 6.4.2 of this
Agreement, terminating this Agreement. A "QUALIFYING STRATEGIC TRANSACTION
PROPOSAL" shall mean a bona fide written Strategic Transaction Proposal with
respect to which the Board of Directors shall have determined, after
consultation with Community's counsel, that the action by Community contemplated
under either clause (a), (b) or (c), as applicable, of the immediately preceding
sentence is required under the fiduciary duties owed by the Board of Directors
to the Community Shareholders, which determination has been made acting in good
faith and on the basis of a written opinion from a financial advisor retained by
Community to the effect that the financial terms of such Strategic Transaction
Proposal are, from such shareholders' perspective, financially superior to the
Common Stock Consideration.

                  4.1.3 In the event that Palomar or Community receives a
Qualifying Strategic Transaction Proposal, it shall, with 15 Business Days of it
is receipt thereof, give notice to Centennial either (i) reaffirming Palomar's
and Community's intent to proceed under this Agreement and to consummate the
Stock Purchase, or (ii) terminating this Agreement pursuant to Section 6.4.2. If
Palomar or Community does not, within such 15 Business Day period, either
expressly reaffirm its intent to proceed under this Agreement or terminate this
Agreement pursuant to Section 6.4.2, Centennial may at any time within 15
Business Days thereafter terminate this Agreement pursuant to Article VI.

                                       20
<PAGE>

         4.2      ACCESS.

                  4.2.1 WITH RESPECT TO PALOMAR. Palomar shall make available to
Centennial all information regarding Palomar that Centennial reasonably may
request other than information prohibited to be disclosed to Centennial by
confidentiality or privacy laws, rules or regulations, and shall authorize, upon
reasonable notice, visits to its premises with such staff, consultants and
experts as Centennial reasonably may request. Centennial agrees to coordinate
closely all such activities with Palomar's President and to conduct any such
inquiries with appropriate discretion and sensitivity to Palomar's relationships
with its employees, customers and suppliers.

                  4.2.2    WITH  RESPECT  TO  CENTENNIAL.   Centennial  shall
make available to Palomar and Community all information regarding itself and its
principals that Palomar and Community reasonably may request.

                  4.2.3 CONFIDENTIALITY. Each Party acknowledges that certain of
the information made available to it pursuant to this Section 4.2 and otherwise
in connection with the Stock Purchase may be confidential, proprietary or
otherwise nonpublic, and each Party agrees, for itself and for each of its
Representatives, that it (a) shall hold in confidence all confidential
information received by it from or with regard to the other Party ("CONFIDENTIAL
INFORMATION") subject to the terms of this Section 4.2, (b) shall disclose such
Confidential Information only to those of its Representatives, in each case
having a need to know the same for purposes of evaluating, negotiating or
implementing the Stock Purchase, and (c) shall inform each Representative to
whom Confidential Information is disclosed that such information is confidential
and direct such Representative not to disclose the same. Each Party shall remain
responsible for any disclosure of Confidential Information by any of its
Representatives. Each Party further agrees that, upon the request of the other
Party given following any termination of this Agreement, the receiving Party and
each of its Representatives either shall return to the requesting Party all
Confidential Information received by the receiving Party and its Representatives
(including all compilations, analyses or other documents prepared by it that
contain Confidential Information) or shall certify that the same has been
destroyed. As used herein, Confidential Information shall not include (w)
information that is or becomes generally available to the public other than as a
result of a breach of this Agreement, (x) information that the receiving Party
demonstrates was known to it on a nonconfidential basis prior to receiving such
information from the other Party, (y) information that the receiving Party
develops independently without relying on Confidential Information, and (z)
information that becomes available to the receiving Party on a non-confidential
basis from another source if the source was not known to or not reasonably
believed by the receiving Party to be subject to any prohibition against
disclosing such information. The foregoing provisions shall also extend to any
Confidential Information previously provided under any written confidentiality
agreement between the Parties.

         4.3 PROSECUTION OF REGULATORY FILINGS; COOPERATION. The Parties shall
cooperate with each other and use all commercially reasonable efforts to prepare
and file as promptly as practicable, all necessary documentation, to effect all
applications, notices, petitions and filings, and to obtain as promptly as
practicable all permits, consents, approvals and authorizations of all third
parties and Governmental Entities which are necessary or advisable to consummate
the Stock Purchase. The Parties agree that they will consult with each other
with respect to the obtaining of all permits, consents, approvals and
authorizations of all third parties and Governmental Entities necessary or

                                       21
<PAGE>

advisable to consummate the Stock Purchase and each Party will keep the other
apprized of the status of matters relating to completion of the Stock Purchase.
Each Party shall, upon request, furnish the other Party with all information
concerning itself as may be reasonably necessary or advisable in connection with
any filing or application made by or on behalf of such Party to any Governmental
Entity in connection with the Stock Purchase. Each Party shall promptly advise
the other Party upon receiving any communication from any Governmental Entity
whose consent or approval is required for consummation of the Stock Purchase
which causes such Party to believe that there is a reasonable likelihood that
any required Governmental Approval will not be obtained or that the receipt of
any such Governmental Approval will be materially delayed. Subject to the terms
and conditions herein provided, each of the Parties hereto agrees to use all
reasonable efforts to, as promptly as practicable, take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement. In case at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and directors of each party to
this Agreement shall take all such reasonable action.

         4.4 ADVICE OF CHANGES. Each Party shall promptly advise the other Party
of any change or event having a Material Adverse Effect on it or which it
believes would or may be reasonably likely to cause or constitute a material
breach of any of its representations, warranties or covenants contained herein
or to preclude the satisfaction of one or more of the conditions set forth in
Article V. From time to time prior to the Closing Date, each Party will promptly
supplement or amend the Disclosure Schedules delivered by it in connection with
the execution of this Agreement to reflect any matter which, if existing,
occurring or known at the date of this Agreement, would have been required to be
set forth or described in such Disclosure Schedules, or which is necessary to
correct any information in such Disclosure Schedules which has been rendered
inaccurate thereby; PROVIDED, however, that no such supplement or amendment to
the Disclosure Schedules shall have any effect for the purpose of determining
the accuracy of any representation or warranty when made, for determining
satisfaction of the conditions set forth in Article V, or for determining the
compliance by any Party with any other provision of this Agreement.

         4.5 CURRENT INFORMATION. During the period from the date of this
Agreement to the Closing Date, Community will cause one or more of its
designated representatives to confer on a regular and frequent basis (not less
than monthly) with representatives of Centennial and to report the general
status of Palomar's ongoing operations. Community will promptly notify
Centennial of any material change in the normal course of Palomar's or its
business or in the operation of Palomar's or its properties and of any
governmental complaint, investigation or hearing (or communications indicating
that the same may be contemplated), or the institution or the threat of
significant litigation involving it, and will keep Centennial fully informed of
such events. A representative of Centennial shall be entitled to be present at
all meetings of the Board of Directors of Palomar, excluding any portion thereof
relating to Community's or Centennial's compliance with the terms of this
Agreement.

         4.6 DELIVERY OF FINANCIAL STATEMENTS. Palomar and/or Community shall
use their best efforts to deliver to Centennial the Audited Financial Statements
on or before February 28, 2001. As soon as reasonably available, but in no event
more than 30 days after the end of each fiscal

                                       22
<PAGE>

quarter ending after the date of this Agreement and prior to the Closing Date,
Palomar will deliver to Centennial Palomar's call reports as filed with Palomar
Regulators. Palomar will deliver to Centennial all other information provided to
Palomar's and its Boards of Directors, including monthly financial statements
prepared in accordance with GAAP (excepting only by the absence of footnotes and
other presentation items and subject to normal year-end adjustments) and
otherwise in the form delivered to the members of their respective Boards of
Directors, no later than the time at which such financial statements are
delivered to such directors but in no event later than the twenty-first calendar
day of the month immediately following the month to which such financial
statements relate.

         4.7 CONDUCT OF BUSINESS. Palomar shall (a) conduct its business in the
usual, regular and ordinary course of business consistent with the past practice
(except as required by applicable Law or as required by this Agreement), (b) use
all commercially reasonable efforts to maintain and preserve intact its business
organization, employees and advantageous business relationships and retain the
services of its officers and key employees (including by causing its current
insurance policies not to be canceled or terminated or any of the coverage
thereunder to lapse, unless simultaneously with such event replacement policies
providing substantially similar coverage for substantially similar (or lesser)
premiums are in full force and effect), (c) conduct relations with its
employees, including hiring and terminating practices, only in the ordinary
course of business and consistent with past practice, and (d) take no action
which would adversely affect or delay the ability of Community or Centennial to
obtain any necessary approvals of any Governmental Entity required for the Stock
Purchase or for the transactions contemplated in connection therewith, or to
perform its covenants and agreements under this Agreement. Through the Effective
Time, Palomar and Community will maintain their respective Records in the same
manner and with the same care that the Records have been maintained prior to the
execution of this Agreement. Centennial may, at its own expense, make such
copies of and excerpts from the Records as it may deem desirable.

         4.8      CERTAIN OPERATING COVENANTS OF PALOMAR. Without Centennial's
prior written consent (which consent shall not be unreasonably withheld or
delayed), Palomar shall not:

                  4.8.1 declare or make any payment or distribution with respect
to its capital stock or other securities, whether by way of payment of interest
or principal, redemption, dividend or otherwise;

                  4.8.2 (a) create, authorize, issue, sell or deliver any of its
capital stock, bonds or other of its securities (whether authorized and unissued
or held in treasury) or any instrument convertible into any of them; (b) grant
or otherwise issue any options, warrants or other rights with respect thereto;
(c) amend the terms of any rights with regard to the Palomar securities; or (d)
split up, combine or reclassify any of its outstanding stock;

                  4.8.3 acquire, by merging or consolidating with, by purchasing
a substantial equity interest in or a substantial portion of the assets of, or
by any other manner, any business, including any corporation, partnership,
association or other business organization or division thereof;

                  4.8.4 excepting those matters identified on DISCLOSURE
SCHEDULE 4.8.4, (a) create, renew, amend or terminate, or give notice of a
proposed renewal, amendment or termination of, any

                                       23
<PAGE>

material contract, agreement or lease for goods, services or office space to
which Palomar is a party or by which Palomar or any of its properties is bound,
excepting only contracts, agreements and leases under which the aggregate annual
payments by either party do not exceed $10,000, (b) make any single capital
expenditure exceeding $10,000 or any capital expenditures exceeding $25,000 in
the aggregate, or (c) relocate or terminate, or file any application to relocate
or terminate the operations of any of its banking offices;

                  4.8.5    enter into any new line of business;

                  4.8.6 change its methods of accounting in effect at December
31, 1999, except as required by changes in GAAP or RAP as concurred with by
Palomar's and Community's independent auditors;

                  4.8.7 commit any act or omission which constitutes a Violation
of any Law, Regulatory Agreement or any material contract or license to which
Palomar is a party or by which it or any of its properties is bound which
Violation, individually or in the aggregate, has or reasonably could be expected
to have a Material Adverse Effect on Palomar;

                  4.8.8 make any equity investment, including any equity
investment in any real estate or real estate development project, other than in
connection with foreclosures, settlements in lieu of foreclosure or troubled
loan or debt restructuring in the ordinary course of business consistent with
prudent banking practices;

                  4.8.9 sell, lease, assign, transfer or otherwise dispose of
any property or asset, except for (a) investment portfolio transactions in the
ordinary course of business and substantially consistent with past practice, and
which past practice shall be deemed to include any sale of any investment
carried as available-for-sale by Palomar on market terms; (b) sales of assets
having a gross book value not in excess of $10,000 individually or $25,000 in
the aggregate; and (c) sales of real estate acquired by foreclosure or by a deed
in lieu thereof;

                  4.8.10 Except for entering into a new employment agreement
with Sanborn which shall become effective at the Effective Time (a) enter into
any agreement with any labor union or association representing any employee, (b)
institute, amend or terminate any Benefit Plan, (c) pay any pension or
retirement allowance to any Person not required by an existing plan or
agreement, (d) increase in any manner the compensation or fringe benefits
(including any insurance benefits) of, or pay any bonus to, any officer,
director or employee, or (e) change in any material respect the existing
responsibilities of any officer of Palomar, or hire or terminate (other than for
cause) any Palomar officer.

                  4.8.11 (a) make or enter into any commitment to make any new
loan if, as a result of the disbursement of the proceeds of such loan, the total
Borrower Group Obligations (including accrued and unpaid interest) of the
borrower to the applicable Party would exceed $50,000 with respect to unsecured
loans or $500,000 with respect to secured loans, except that if Centennial does
not grant or refuse its consent or reasonably request additional information
regarding such proposed loan within two Business Days of Centennial's receipt of
Community's request for consent, then

                                       24
<PAGE>

Centennial shall be deemed to have granted its consent; or (b) amend or renew,
or enter into any commitment to amend or renew, any Criticized Asset;

                  4.8.12 incur any indebtedness for borrowed money, or assume,
guarantee, endorse or otherwise as an accommodation become responsible for the
obligations of any other individual, corporation or other entity, in each case
except in the usual, regular and ordinary course of business consistent with the
past practice, it being understood and agreed that purchase of federal funds,
and the creation of deposit liabilities and entering into repurchase agreements
(in each case with maturities of not more than six months) shall be deemed to be
in the ordinary course of business;

                  4.8.13 make, amend or compromise any loan or advance (whether
in cash or other property) to any officer, to any director, or to any Principal
Shareholder or Affiliate thereof, except advances made to employees in the
usual, regular and ordinary course of business consistent with the past
practice;

                  4.8.14 restructure or materially change its investment
securities portfolio through purchases, sales or otherwise, or the manner in
which the portfolio is classified or reported, or invest in any securities other
than obligations of the United States Treasury with maturities of not more than
six months, or agency securities or other investments approved by Centennial;

                  4.8.15   file  any  applications  or make any  contract  with
respect  to  branching  or site location or relocation;

                  4.8.16 enter into any futures contract, option contract,
interest rate caps, interest rate floors, interest rate exchange agreement or
other agreement for purposes of hedging the exposure of its interest-earning
assets and interest-bearing liabilities to changes in market rates of interest;

                  4.8.17 enter or agree to enter into any agreement or
arrangement granting any preferential right to purchase any of its assets or
rights or requiring the consent of any party to the transfer and assignment of
any such assets or rights;

                  4.8.18 take any action, or enter into any agreement or
commitment to take any action, that will result in any of the representations or
warranties of Community contained in this Agreement not to be true and correct
in any material respect as of the Effective Time or that could reasonably result
in any material delay in consummation of the transactions contemplated hereby;
or

                  4.8.19   enter into any agreement or commitment to do any of
the foregoing.

         4.9 OPERATING COVENANTS OF CENTENNIAL. Without Palomar's and
Community's prior written consent, Centennial shall not take any action, or
enter into any agreement or commitment to take any action, inclusive of
acquiring another company or entering into a business combination involving
Centennial or its subsidiaries, that will result in any of the representations
or warranties of Centennial contained in this Agreement not to be true and
correct in any material respect as of the Effective Time or that could
reasonably result in any material delay in consummation of the transactions
contemplated hereby.

                                       25
<PAGE>

         4.10     COVENANTS REGARDING EMPLOYEES, DIRECTORS AND OFFICERS.

                  4.10.1    EMPLOYEE BENEFIT PLANS.

                           (1)      PALOMAR  AGREEMENTS.  All current executive
officer and directors of Palomar concurrent with the execution and delivery of
this Agreement by the Parties shall execute and deliver to Centennial an
agreement in the form of EXHIBIT 3.1.5 hereto.

                           (2)      CONTINUATION OF PLANS.  Notwithstanding
anything to the contrary contained herein, Centennial shall have sole discretion
with respect to the determination as to whether to terminate, merge or continue
any employee Benefit Plans and programs of Palomar to the extent permitted by
and in accordance with the terms of such plans and programs and Palomar shall
cause to be taken all actions reasonably required to terminate such plans and
programs as Centennial may specify as of the Closing. Without limiting the
foregoing, the Boards of Directors of Palomar and Community shall promptly adopt
resolutions required to cause any plan or agreement providing shares of Palomar
Common Stock or equity-based rights to any Person to be terminated as of the
Effective Time.

         4.11 RESERVES. Palomar and Community agree that Palomar will establish
such reserves and to take such charge-offs respecting loans and other assets and
operations as may be requested by Centennial immediately prior to the Closing;
PROVIDED, that any such action taken solely by reason of such request shall not
be deemed to constitute a Material Adverse Effect respecting Palomar for
purposes of this Agreement and shall not be considered for purposes of the
shareholders' equity determination to be made pursuant to Section 5.2.9.

         4.12 TERM POLICY. The Parties agree that Centennial will be entitled to
place a term life insurance policy on Sanborn in an amount not less than
$500,000 paid by Centennial with Centennial as the beneficiary of such policy.
Sanborn agrees to complete any and all applications concerning the issuance of
such policy including submitting to a physical examination.

                                    ARTICLE V
                              CONDITIONS TO CLOSING

         5.1      CONDITIONS TO OBLIGATIONS OF BOTH PARTIES.  The obligations
of Centennial and Palomar and Community to consummate the Stock Purchase are
subject to the satisfaction of each of the following conditions:

                  5.1.1 REGULATORY APPROVALS. All necessary approvals of any
Governmental Entity required for the consummation of the Stock Purchase
(including the Community Governmental Approvals and Centennial Governmental
Approvals) shall have been obtained and shall remain in full force and effect;
all statutory or other required waiting periods in respect thereof shall have
expired; and no approval of any Governmental Entity shall have imposed any
condition or requirement which, in the reasonable opinion of Centennial, would
so materially adversely affect the economic or business benefits to Centennial
of the Stock Purchase so as to render inadvisable the consummation thereof.

                                       26
<PAGE>

                  5.1.2 NO PROHIBITION; NO PENDING OR THREATENED CLAIMS. None of
the Parties shall be subject to any law or order of any court or other
Governmental Entity which prohibits, restricts or makes illegal the consummation
of the Stock Purchase; and there shall be no claim, action, suit, investigation
or other proceeding pending or overtly threatened before any Governmental Entity
that presents a substantial risk of restraint or prohibition of the Stock
Purchase, or the obtaining of material damages from Palomar, Community or
Centennial or their respective officers or directors in connection therewith;
and no such restraint or prohibition shall be effective as of the Closing,
whether or not the action in which the same was entered shall remain pending.

         5.2 CONDITIONS TO THE OBLIGATIONS OF CENTENNIAL. The obligations of
Centennial to consummate the Stock Purchase are further subject to the
satisfaction of, or Centennial's written waiver of, each of the following
conditions:

                  5.2.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES; COMPLIANCE
WITH COVENANTS. Palomar's and Community's representations and warranties
contained in this Agreement shall have been true and correct as of the dates
when made, and Palomar and Community shall have performed, satisfied and
complied with, in all material respects, each of their agreements and covenants
contained in Articles II and IV and elsewhere in this Agreement.

                  5.2.2 BRINGDOWN OF REPRESENTATIONS AND WARRANTIES. Palomar's
and Community's representations and warranties contained in this Agreement
remain true and correct as of the Closing as though made at and as of the
Closing, excepting only representations and warranties which speak expressly as
of an earlier specified date.

                  5.2.3 NO MATERIAL ADVERSE EFFECT. No change, in facts,
circumstances or events has occurred since the date of this Agreement that has
had or could reasonably be expected to have a Material Adverse Effect on
Palomar.

                  5.2.4 OFFICERS CERTIFICATE. Palomar and Community shall have
delivered to Centennial a certificate, dated as of the date of Closing and
signed by its respective chief executive officer and chief financial officer, to
the effect that the conditions set forth in Sections 5.2.1., 5.2.2 and 5.2.3
have been satisfied, and containing and certifying to the accuracy of, the same
information required to be included on Part A of SCHEDULE 3.1.11 had such
Schedule been delivered as of the date of such certificate, compiled as of a
date within five Business Days of the Closing.

                  5.2.5 PALOMAR COMMON STOCK OUTSTANDING. There shall be no
shares of Palomar Common Stock or other Palomar securities issued and
outstanding as of the Effective Time other than the 648,186 shares of Palomar
Common Stock issued and outstanding on the date hereof.

                  5.2.6 THIRD PARTY CONSENTS. The consent, approval or waiver of
each Person (other than the Governmental Entities referred to in Section 5.1.2)
whose consent, approval or waiver shall be required in order to permit the
consummation of the Stock Purchase or the preservation of the contractual rights
of Palomar with respect to its business shall have been obtained except where
the failure to obtain any such consent, approval or waiver would not,
individually or in the aggregate, have a Material Adverse Effect on Centennial
or Palomar or materially adversely affect the ability of Centennial, Palomar and
Community to consummate the Stock Purchase.

                                       27
<PAGE>

                  5.2.7    PALOMAR  AGREEMENTS.  Each  executive  officer  and
director of Palomar shall have executed and delivered to Centennial an agreement
in substantially the form of EXHIBIT 3.1.5.

                  5.2.8    LEGAL OPINION.  Centennial shall have received an
opinion of Horgan, Rosen, Beckham & Coren, L.L.P., respecting the matters set
forth in EXHIBIT 5.2.8.

                  5.2.9 PALOMAR MINIMUM TANGIBLE SHAREHOLDERS' EQUITY.
Centennial shall have received a letter (the "ACCOUNTING LETTER") from
Hutchinson & Bloodgood, LLP, certified public accountants for Centennial that,
as of a date no more than five (5) Business Days prior to the Effective Time
(the "DETERMINATION DATE") setting forth Palomar's Tangible Shareholders'
Equity. The Palomar Tangible Shareholders' Equity will be determined in
accordance with RAP, excluding all goodwill and intangibles on the books of
Palomar, and this Agreement as of the end of the month preceding the month in
which the Closing shall occur in accordance with such limitations and standards
of review as may be specified in such letter but without the performance of such
procedures as are necessary in order for such firm to express an opinion with
respect thereto, and reflect an adequate loan loss reserve which in any case
will be not less than $572,706 plus an amount equal to the sum of (a) $10,000
multiplied by (b) the number of months from December 1, 2000 through the month
end prior to the Closing Date, after deducting therefrom all reserves allocated
to specific loans on the books of Palomar. The cost of such account's letter
shall be paid by Centennial. In addition, no Expenses of Palomar or Community
shall be capitalized in making such determination of shareholders' equity.

                  5.2.10 DOCUMENTS AND INSTRUMENTS IN SATISFACTORY FORM. All
corporate and other proceedings in connection with this Agreement and with the
Stock Purchase and all documents and instruments incidental to the Stock
Purchase shall be reasonably satisfactory in substance and form to Centennial
and its counsel, and Centennial and its counsel shall have received all such
counterpart originals or certified or other copies of such documents as they may
reasonably request.

                  5.2.11   COMMUNITY  AGREEMENT.  Community  shall have
executed and delivered to Centennial an agreement in substantially the form of
EXHIBIT 3.1.26.

                  5.2.12 EMPLOYMENT AGREEMENT. Subject to the approval of the
Parties, Palomar and Sanborn shall have entered into an employment agreement
providing for Sanborn to serve as the President/Chief Executive Officer of
Palomar to be effective as of the Effective Time in a form acceptable to
Centennial.

                  5.2.13 SBA LOANS. Community shall have repurchased from
Palomar all of the nonguaranteed portions of the SBA Loans pooled and sold to
Palomar identified by Centennial for repurchase by Community at a price equal to
the actual principle balance of the loans as of the repurchase date as reflected
on Palomar's books less any reserves as of the repurchase date plus all accrued
but unpaid interest.

         5.3 CONDITIONS TO THE OBLIGATIONS OF PALOMAR AND COMMUNITY. The
obligations of Palomar and Community to consummate the Stock Purchase are
further subject to the satisfaction of, or Palomar's and Community's written
waiver of, each of the following conditions:

                                       28
<PAGE>

                  5.3.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES; COMPLIANCE
WITH COVENANTS. Centennial's representations and warranties contained in this
Agreement shall have been true and correct as of the dates when made, and
Centennial shall have performed, satisfied and complied with, in all material
respects, each of its agreements and covenants contained in Articles II and IV
and elsewhere in this Agreement.

                  5.3.2 BRINGDOWN OF REPRESENTATIONS AND WARRANTIES.
Centennial's representations and warranties contained in this Agreement remain
true and correct as of the Closing as though made at and as of the Closing,
excepting only representations and warranties which speak expressly as of an
earlier specified date.

                  5.3.3 OFFICER CERTIFICATE. Centennial shall have delivered to
Palomar and Community a certificate, dated the date of Closing and signed by its
chief executive officer and chief financial officer, to the effect that the
conditions set forth in Sections 5.3.1 and 5.3.2 of the Agreement have been
satisfied.

                  5.3.4 RAISING CAPITAL AND DELIVERY OF CASH TO EXCHANGE AGENT.
Centennial shall have raised not less than the Centennial Minimum New Capital on
or before the Capital Raising Date, and shall have delivered to the Exchange
Agent the Common Stock Consideration.

                  5.3.5    LEGAL  OPINION.  Community  shall have  received an
opinion of Gary Steven Findley & Associates respecting the matters set forth in
EXHIBIT 5.3.5.

                  5.3.6 DOCUMENTS AND INSTRUMENTS IN SATISFACTORY FORM. All
corporate and other proceedings in connection with this Agreement and with the
Stock Purchase and all documents and instruments incidental to the Stock
Purchase shall be reasonably satisfactory in substance and form to Community and
its counsel, and Community and its counsel shall have received all such
counterpart originals or certified or other copies of such documents as they may
reasonably request.

                  5.3.7 ASSIGNMENT OF RIGHTS. Palomar shall have assigned to
Community all of its rights, title and interests in and to any recovery to the
pending litigation involving Community, Palomar and Deloitte & Touche, LLP
entitled COMMUNITY WEST BANCSHARES v. DELOITTE & TOUCHE LLP, Case No. BC238189,
pending before the Superior Court for the County of Los Angeles, provided that
Community shall agree to indemnify Palomar and/or Centennial for any
cross-complaints associated with that litigation.

                                   ARTICLE VI

                          TERMINATION: TERMINATION FEE

         This Agreement may be terminated, and the Stock Purchase abandoned,
prior to the Closing by the following means and with the following effects:

         6.1      BY MUTUAL  AGREEMENT.  Palomar and Community,  on the one
hand, and Centennial, on the other hand, may terminate this Agreement by mutual
written consent at any time.

                                       29
<PAGE>

         6.2 REGULATORY IMPEDIMENT. Either Centennial or Community and Palomar
may unilaterally terminate this Agreement at any time prior to the Closing if
(a) a Governmental Entity shall have made a final determination denying an
application of either Party the granting of which is essential to the
consummation of the Stock Purchase, or (b) the occurrence of the Closing would
violate any final order, decree or judgment of any court having competent
jurisdiction.

         6.3      BY CENTENNIAL.  Centennial may unilaterally terminate this
Agreement:

                  6.3.1 if Palomar or Community has breached any representation
or warranty contained in this Agreement, or has failed to perform, satisfy or
comply with in any material respect any of its agreements and covenants
contained in this Agreement (other than as described in Section 6.4.2), and such
breach or failure would or could reasonably be expected to have a Material
Adverse Effect on Palomar or Centennial; such termination to take effect five
(5) Business Days following notice to Palomar and Community identifying such
breach if such breach has not been cured prior to the expiration of such period;
PROVIDED, that in the case of a termination under this Section 6.3.1 or Section
6.2, , where a breach or failure giving rise to such termination shall have been
caused in whole or in part by any action or inaction on the part of Palomar,
Community or any of its respective directors or officers or any Palomar or
Community Affiliates, Centennial shall be entitled to receive from Palomar or
Community the Termination Fee. The Termination Fee, if due under this Section
6.3.1, shall be $500,000 plus Centennial's Expenses up to a maximum of $100,000.

                  6.3.2 upon notice to Community if Community and Palomar have
not reaffirmed their intent to proceed with the Stock Purchase pursuant to
Section 4.1.3 following its receipt of a Qualifying Strategic Transaction
Proposal. In the case of a termination under this Section 6.3.2, Centennial
shall be entitled to receive from Palomar or Community a Termination Fee of
$500,000 plus Centennial's expenses up to a maximum of $100,000.

                  6.3.3 upon notice to Palomar and Community if any of the
conditions to the obligations of Centennial contained in Section 5.2 has not
been satisfied as of the earlier of the date required by this Agreement or the
Expiration Date; or

                  6.3.4 upon notice to Palomar and Community after the
Expiration Date, if the Closing shall not have occurred by such date, unless
such failure results primarily from Centennial breaching any of its
representations, warranties, covenants or agreements contained in this
Agreement.

         6.4      BY PALOMAR  AND  COMMUNITY.  Palomar  and  Community  jointly
or  Community  unilaterally  may terminate this Agreement:

                  6.4.1 if Centennial has breached any representation or
warranty contained in this Agreement, or has failed to perform, satisfy or
comply with in any material respect any of its agreements and covenants
contained in this Agreement, and such breach or failure would or could
reasonably be expected to have a Material Adverse Effect on the ability of
Centennial to complete the Stock Purchase; such termination to take effect five
(5) Business Days following notice to Centennial identifying such breach if such
breach has not been cured prior to the expiration of such period; PROVIDED, that
in the case of a termination under this Section 6.4.1 or Section 6.2, where a

                                       30
<PAGE>

breach or failure giving rise to such termination shall have been caused in
whole or in part by any action or inaction on the part of Centennial or any of
its directors or officers or any Centennial Affiliates, Palomar and Community
shall be entitled to receive from Centennial the Termination Fee. The
Termination Fee, if due under this Section 6.4.1, shall be $500,000 plus
Palomar's and Community's Expenses up to a maximum of $100,000, unless the
termination is due to Centennial's failure to raise the funds necessary to
consummate the Stock Purchase as required by this Agreement, in which case the
Termination Fee shall be $200,000 plus Palomar's and Community's Expenses up to
a maximum of $100,000;

                  6.4.2 Upon notice to Centennial if Palomar or Community
receives a Qualifying Strategic Transaction Proposal; provided however, that a
consideration to the effectiveness of any termination pursuant to this Section
6.4.2 is the payment to Centennial by either Palomar or Community of a
Termination Fee of $500,000 plus Centennial's Expenses up to a maximum of
$100,000;

                  6.4.3 upon notice to Centennial if any of the conditions to
the obligations of Community contained in Section 5.3 has not been satisfied as
of the earlier of the date required by this Agreement or the Expiration Date; or

                  6.4.4 upon notice to Centennial after the Expiration Date, if
the Closing shall not have occurred prior to such date and time, unless the
failure results primarily from Community breaching any of its representations,
warranties, covenants or agreements contained in this Agreement.

         6.5 TERMINATION FEE. The Termination Fee means either $200,000 or
$500,000, and, in all cases, the Expenses of the Party entitled to the
Termination Fee, subject to the expense limitations identified above, payable in
same day funds, as set forth herein. The Termination Fee is an attempt by the
Parties to calculate the reasonable compensation for the loss to a Party,
including but not limited to the Party's administrative time, in the event of
termination and as a liquidated damage and not as a penalty or as a forfeiture.

         6.6 EFFECT OF TERMINATION; REMEDIES. In the event this Agreement is
terminated pursuant to this Article VI, this Agreement shall become void and of
no effect and neither Party shall have any liabilities or other obligations
whatsoever hereunder, except that the provisions of Section 4.2 relating to
Confidential Information, Article VI and Section 7.2 shall survive such
termination. In each case where a Termination Fee is payable, the payment of
such fee shall be the sole and exclusive remedy, at law or in equity, of the
Party receiving the Termination Fee, for any such breach, failure or default of
the other party.

                                   ARTICLE VII
                                  MISCELLANEOUS

         7.1 CLOSING. Unless the Parties shall mutually fix another date, the
Closing Date shall be on such Business Day as Centennial shall select that is
not more than five (5) Business Days after the Final Approval Date or such later
date on which the latest to occur of the conditions set forth in

                                       31
<PAGE>

Section 5.1 is satisfied. Subject to the fulfillment or waiver of those
conditions and the other conditions set forth in Article V, the Closing of the
Stock Purchase shall take place at the offices of Centennial's counsel in
Anaheim, California, at 10:00 a.m. (local time) on the Closing Date. Except as
otherwise provided herein, all proceedings to be taken and all documents to be
executed at the Closing shall be deemed to have been taken, delivered and
executed simultaneously as of the Effective Time, and no proceeding shall be
deemed taken nor documents deemed executed or delivered until all have been
taken, delivered and executed.

         7.2      EXPENSES.  Each Party shall be responsible for its own
Expenses.

         7.3 PUBLICITY. Promptly following the execution and delivery of this
Agreement, Palomar, Community and Centennial shall issue a joint press release
in a form mutually to be agreed upon. Palomar, Community and Centennial shall
not, and shall instruct their Representatives not to, issue or cause the
publication of any press release or other public announcement with respect to,
or otherwise make any public statement concerning, this Agreement or the Stock
Purchase without the consent of the other Party, which consent shall not be
unreasonably withheld. Notwithstanding the foregoing, in the event that either
Centennial or Palomar and Community determines, based upon the advice of
counsel, that a press release, disclosure in a public filing, or other public
disclosure of, or reference to, this Agreement, the Stock Purchase or Centennial
is required by law, such Party shall first notify the other of the potential
disclosure, afford the other Party a reasonable opportunity to review and
comment on the proposed disclosure, and obtain the other Party's approval of
such disclosure, which approval shall not be withheld or delayed in any manner
that is unreasonable under the circumstances.

         7.4 NOTICES. All notices, approvals, requests, claims, demands and
other communications hereunder shall be in writing and shall be deemed to have
been duly given when delivered in person or by electronic facsimile transmission
(with confirmation) or on the next business day after dispatch by an overnight
courier of national reputation to the respective Parties as follows:

         IF TO CENTENNIAL, TO IT AT:

                  Centennial First Financial Services
                  218 East State Street
                  Redlands, California 92373
                  Attention:  Douglas C. Spencer
                  Fax:  (909) 798-1872

         WITH A COPY TO:

                  Gary Steven Findley & Associates
                  1470 North Hundley Street
                  Anaheim, California 92806
                  Attention:  Gary Steven Findley, Esq.
                  Fax:  (714) 630-7910

                                       32
<PAGE>

         IF TO PALOMAR AND COMMUNITY, TO IT AT:

                  Community West Bancshares
                  445 Pine Street
                  Goleta, California 93117
                  Attention:  Llewellyn W. Stone
                  Fax:  (805) 692-5835

                  Palomar Community Bank
                  355 West Grand Avenue
                  Escondido, California  92025
                  Attention:  Richard Sanborn
                  Fax:  (760) 745-9513

         WITH A COPY TO:

                  Horgan, Rosen, Beckham & Coren, LLP
                  21700 Oxnard Street, Suite 1400
                  Woodland Hills, California  91365-4335
                  Attention:  Arthur A. Coren, Esq.
                  Fax:  (818) 340-6190

or to such other address as the Person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).

         7.5 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the Parties and, supersedes all prior agreements, understandings,
negotiations and discussions, both written and oral, among the Parties with
respect to the subject matter hereof.

         7.6 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. None of
the representations, warranties, covenants and agreements contained herein or in
any instrument delivered pursuant to this Agreement shall survive the Effective
Time except those covenants and agreements that by their express terms apply in
whole or in part to periods after the Effective Time.

         7.7 BENEFITS; BINDING EFFECT; ASSIGNMENT AND DESIGNATION. This
Agreement shall be for the benefit of and binding upon the Parties, their
respective successors and, where applicable, assigns. No Party may assign this
Agreement or any of its rights, interests or obligations hereunder without the
prior written consent of the other Party. Notwithstanding any assignment or
delegation of any Party's rights, interests or obligations, each Party shall
nonetheless remain responsible for the performance of all of its obligations
provided hereunder.

         7.8 WAIVER. No waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall any such waiver constitute a continuing waiver unless
otherwise expressly so provided.

                                       33
<PAGE>

         7.9 NO THIRD PARTY BENEFICIARY. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any Person
other than the Parties and their respective successors and permitted assigns any
rights or remedies under or by reason of this Agreement.

         7.10 SEVERABILITY. The invalidity of any one or more of the words,
phrases, sentences, clauses, Sections or Articles contained in this Agreement
shall not affect the enforceability of the remaining portions of the Agreement
or any part hereof, all of which are inserted conditionally on their being valid
in law. In the event any one or more of the words, phrases, sentences, clauses,
sections or subsections contained in this Agreement shall be declared invalid,
this Agreement shill be construed as if such invalid word or words, phrase or
phrases, sentence or sentences, clause or clauses, section or sections, or
subsection or subsections, had not been inserted; provided, however, that if any
provision is declared to be unenforceable because it is determined to be
overbroad, then, to the extent possible, in lieu of deletion such provision
shall be modified to the minimum extent necessary to render such provision
enforceable.

         7.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the several Parties in separate counterparts, each of which
shall be deemed to be one and the same instrument.

         7.12 APPLICABLE LAW; CONSENT TO JURISDICTION. This Agreement shall be
governed by the laws of the State of California and all questions concerning the
validity and construction hereof shall be determined in accordance with the laws
of said State. Each Party hereby irrevocably submits to the exclusive
jurisdiction of the courts sitting in the state of California in any action or
proceeding arising out of or relating to this Agreement and hereby irrevocably
agrees, on behalf of itself and on behalf of such Party's successors and
permitted assigns, that all claims in respect of such action or proceeding may
be heard and determined in any such court and irrevocably waives any objection
such person may now or hereafter have as to the venue of any such suit, action
or proceeding brought in such a court or that such court is an inconvenient
forum.

         7.13 WAIVER OF JURY TRIAL. The Parties hereto hereby waive trial by
jury in any judicial proceeding involving, directly or indirectly, any matter
(whether in tort, contract or otherwise) in any way arising out of, related to,
or connected with this Agreement, the related documents or the relationship
established hereunder.

         7.14 ATTORNEYS' FEES. In the event that any action or proceeding,
including arbitration, is commenced by any Party hereto for the purpose of
enforcing any provision of this Agreement, the Parties to such action,
proceeding or arbitration shall be entitled to receive as part of any award,
judgment, decision or other resolution of such action, proceeding or arbitration
their costs and reasonable attorneys' fees as determined by the person or body
making such award, judgment, decision or resolution.

                                       34
<PAGE>

IN WITNESS WHEREOF, the Parties have each executed and delivered this Agreement
as of the day and year first above written.

                                            CENTENNIAL FIRST FINANCIAL SERVICES

                                            By: /s/ Douglas C. Spencer
                                                ----------------------
                                                Douglas C. Spencer, President

                                            By: /s/ Sally Flanders
                                                ------------------
                                                Sally Flanders, Secretary

                                            COMMUNITY WEST BANCSHARES

                                            By: /s/ Llewellyn W. Stone
                                                ----------------------
                                                Llewellyn W. Stone, President

                                            By: Christina M. Fabrizio
                                                ---------------------
                                                Christina M. Fabrizio, Secretary

                                            PALOMAR COMMUNITY BANK

                                            By: /s/ Richard Sanborn
                                                -------------------
                                                Richard Sanborn, President

                                            By: /s/ Flo Lindsey
                                                ---------------
                                                Flo Lindsey, Secretary

                                            RICHARD SANBORN

                                            /s/ Richard Sanborn
                                            -------------------
                                       35<PAGE>

Exhibit 10.8 Brea branch lease

                              OFFICE BUILDING LEASE

This Lease between OLEN COMMERCIAL REALTY CORP., A NEVADA CORPORATION
(Landlord), and REDLANDS CENTENNIAL BANK, A CALIFORNIA CORPORATION, (Tenant), is
dated September 20, 2000.

1. LEASE OF PREMISES

In consideration of the rent (as defined at Section 5.3) and the provisions of
this Lease, Landlord leases to Tenant and Tenant leases from Landlord the
Premises shown by diagonal lines on the floor plan attached hereto as Exhibit
"A-1", and further described at Section 2l. The Premises are located within the
Building and Project described in Section 2.m. Tenant shall have the
nonexclusive right (unless otherwise provided herein) in common with Landlord,
other tenants, subtenants and invitees, to use of the Common Area (as defined at
Section 2e).

2. DEFINITIONS

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

a. Base Rent (initial): $128,751.84 per year

b. Base year: The calendar year of 2001

c. Broker(s)
     Landlord's: Greg Brown, Cushman & Wakefield of California, Inc.
     Tenant's: Daniel Richards and David Neault, Steven Daniels Commercial
     Brokerage

d. Commencement Date: January 1, 2001 with Early Possession effective upon
execution of lease documents for the purpose of construction of Tenant
Improvements (see Addendum A, Item 3 for Early Possession Agreement).

e. Common Areas: The building lobbies, common corridors and hallways, restrooms,
garage and parking areas, stairways, elevators and other generally understood
public or common areas. Landlord shall have the right to regulate or restrict
the use of the Common Areas.

f. Expiration Date: December 31, 2005, unless otherwise sooner terminated in
accordance with the provisions of this Lease.

g. Landlord's Mailing Address: 7 Corporate Plaza, Newport Beach, CA 92660

   Tenant's Mailing Address: 10 Pointe Drive, Suite 130-140, Brea, CA 92821

                                       1

<PAGE>

h. Monthly Installments of Base Rent (initial): $10,729.32 per month.

Rent Payments. Rent payments are due on the first of each month, made payable to
Olen Commercial Realty Corp. Please remit to: Olen Commercial Realty Corp., 7
Corporate Plaza, Newport Beach, CA 92660.

                   LESSOR DOES NOT INVOICE ON A MONTHLY BASIS.

i. Security Deposit (Article 7): $10,729.32

j. Upon execution hereof Lessee shall pay Lessor: $21,458.64; $10,729.32 as rent
for January, 2001 and $10,729.32 Security Deposit .

k. Parking: Tenant shall be permitted, upon payment of the then prevailing
monthly rate (as set by Landlord from time to time) to park 4:1,000 in common
cars on a nonexclusive basis in the area(s) designated by Landlord for parking.
Tenant shall abide by any and all parking regulations and rules established from
time to time by Landlord or Landlord's parking operator. Landlord reserves the
right to separately charge Tenants guests and visitors for parking. NO OVERNIGHT
PARKING SHALL BE ALLOWED; AT LESSOR'S DISCRETION, VIOLATORS MAY BE TOWED AT
VEHICLE OWNER'S EXPENSE.

l. Premises: That portion of the Building containing approximately 5,061 square
feet of Rentable Area, shown by diagonal lines on Exhibit "A-1", located on the
first floor of the Building and known as Suite(s) 130-140.

m. Project: The building of which the Premises are a part (the "Building") and
any other buildings or improvements on the real property (the "Property")
located at 6 and 10 Pointe Drive, Brea, CA 92821 and further described on
Exhibit "A". The Project is known as Olen Pointe-Brea III.

n. Rentable Area: As to both the Premises and the Project, the respective
measurements of floor area as may from time to time be subject to lease by
Tenant and all tenants of the Project, respectively, as determined by Landlord
and applied on a consistent basis throughout the Project.

o. State: The State of California.

p. Tenant's Proportionate Share: 2.41%. Such share is a fraction, the numerator
of which is the Rentable Area of the Premises, and the denominator of which is
the Rentable Area of the Project, as determined by Landlord from time to time.
The Project consists of one (1) building(s) containing a total Rentable Area of
210,441 square feet.

q. Tenant's Use Clause (Article 8): General office and ancillary uses for a bank
as approved by the City of Brea.

r. Term: The period commencing on the Commencement Date and expiring at midnight
on the Expiration Date.

                                       2
<PAGE>

3. EXHIBITS AND ADDENDA

     See Addenda: A, B, C, D, E and Exhibits A, A-1, A-2 and B attached hereto
and made a part hereof by reference.

4. DELIVERY OF POSSESSION

If for any reason Landlord does not deliver possession of the Premises to Tenant
on the Commencement Date, Landlord shall not be subject to any liability for
such failure, the Expiration Date shall not change and the validity of this
Lease shall not be impaired, but Rent shall be abated until delivery of
possession. If Landlord permits Tenant to enter into possession of the Premises
before the Commencement Date, such possession shall be subject to the provisions
of this Lease, including, without limitation, the payment of Rent.

5. RENT

5.1. Payment of Base Rent. Tenant agrees to pay the Base Rent for the Premises.
Monthly Installments of Base Rent shall be payable in advance on the first day
of each calendar month of the Term. If the Term begins (or ends) on other than
the first (or last) day of a calendar month, the Base Rent for the partial month
shall be prorated on a per diem basis. Tenant shall pay Landlord the first
Monthly Installment of Base Rent when Tenant executes the Lease.

5.2.  Project Operating Costs

a. In order that the Rent payable during the Term reflect any increase in
Project Operating Costs, Tenant agrees to pay to Landlord as Rent, Tenant's
Proportionate Share of all increases in costs, expenses and obligations
attributable to the Project and its operation, all as provided below.

b. If, during any calendar year during the Term, Project Operating Costs exceed
the Project Operating Costs for the Base Year, Tenant shall pay to Landlord, in
addition to the Base Rent and all other payments due under this Lease, an amount
equal to Tenant's Proportionate Share of such excess Project Operating Costs in
accordance with the provisions of this Section 5.2b.

(1) The term "Project Operating Costs" shall include all those items described
in the following subparagraphs (a) and (b).

(a) All taxes, assessments, water and sewer charges and other similar
governmental charges levied on or attributable to the Building or Project or
their operation, including without limitation, (i) real property taxes or
assessments levied or assessed against the Building or Project, (ii) assessments
or charges levied or assessed against the Building or Project by any
redevelopment agency, (iii) any tax measured by gross rentals received from the
leasing of the Premises, Building or Project, excluding any net income,
franchise, capital stock, estate or inheritance taxes imposed by the State or
Federal government or their agencies, branches or departments; provided that if
at any time during the Term any governmental entity levies, assesses or imposes
on Landlord any (1) general or special, ad valorem or specific, excise, capital
levy or other tax, assessment, levy or charge directly on the Rent received
under this Lease or on

                                       3
<PAGE>

the rent received under any other leases of space in the Building or Project, or
(2) any license fee, excise or franchise tax, assessment, levy or charge
measured by or based, in whole or in part, upon such rent, or (3) any transfer,
transaction, or similar tax, assessment, levy or charge based directly or
indirectly upon the transaction represented by this Lease or such other leases,
or (4) any occupancy, use, per capita or other tax, assessment, levy or charge
based directly or indirectly upon the use or occupancy of the Premises or other
premises within the Building or Project, then any such taxes, assessments,
levies and charges shall be deemed to be included in the term Project Operating
Costs. As of the date of this Lease, there are no taxes, assessments or similar
governmental charges levied upon rentals received by Landlord, or upon the use
or occupancy of the Premises. If at any time during the Term the assessed
valuation of, or taxes on, the Project are not based on a completed Project
having at least ninety-five percent (95%) of the Rentable Area occupied, then
the "taxes" component of Project Operating Costs shall be adjusted by Landlord
to reasonably approximate the taxes which would have been payable if the Project
were completed and at least ninety-five percent (95%) occupied.

(b) Operating costs incurred by Landlord in maintaining and operating the
Building and Project, including without limitation the following: costs of (1)
utilities; (2) supplies; (3) insurance (including public liability, property
damage, earthquake, and fire and extended coverage insurance for the full
replacement cost of the Building and Project as required by Landlord or its
lenders for the Project); (4) services of independent contractors; (5)
compensation (including employment taxes and fringe benefits) of all persons who
perform duties connected with the operation, maintenance, repair or overhaul of
the Building or Project, and equipment, improvements and facilities located
within the Project, including without limitation engineers, janitors, painters,
floor waxers, window washers, security and parking personnel and gardeners (but
excluding persons performing services not uniformly available to or performed
for substantially all Building or Project tenants); (6) maintenance of a room
for delivery and distribution of mail to tenants of the Building or Project as
required by the U.S. Postal Service (7) the prorata share of the cost of
management of the Building or Project, whether managed by Landlord or an
independent contractor (including, without limitation, an amount equal to the
fair market value of any on-site manager's office) attributable to the "Project"
herein; (8) rental expenses for (or a reasonable depreciation allowance on)
personal property used in the maintenance, operation or repair of the Building
or Project; (9) costs, expenditures or charges (whether capitalized or not)
required by any governmental or quasi-governmental authority; (10) amortization
of capital expenses (including financing costs) (i) required by a governmental
entity for energy conservation or life safety purposes, or (ii) made by Landlord
to reduce Project Operating Costs; and (11) any other costs or expenses incurred
by Landlord under this Lease and not otherwise reimbursed by tenants of the
Project. If at any time during the Term, less than ninety-five percent (95%)of
the Rentable Area of the Project is occupied, the "operating costs" component of
Project Operating Costs shall be adjusted by Landlord to reasonably approximate
the operating costs which would have been incurred if the Project had been at
least ninety-five percent (95%) occupied.

(2) Tenant's Proportionate Share of Project Operating Costs shall be payable by
Tenant to Landlord as follows:

                                       4
<PAGE>

(a) Beginning with the calendar year following the Base Year and for each
calendar year thereafter ("Comparison Year"), Tenant shall pay Landlord an
amount equal to Tenant's Proportionate Share of the Project Operating Costs
incurred by Landlord in the Comparison Year which exceeds the total amount of
Project Operating Costs payable by Landlord for the Base Year. This excess is
referred to as the "Excess Expenses".

(b) To provide for current payments of Excess Expenses, Tenant shall, at
Landlord's request, pay as additional rent during each Comparison Year, an
amount equal to Tenant's Proportionate Share of the Excess Expenses payable
during such Comparison Year, as estimated by Landlord from time to time. Such
payments shall be made in monthly installments, commencing on the first day of
the month following the month in which Landlord notifies Tenant of the amount it
is to pay hereunder and continuing until the first day of the month following
the month in which Landlord gives Tenant a new notice of estimated Excess
Expenses. It is the intention hereunder to estimate from time to time the amount
of the Excess Expenses for each Comparison Year and Tenant's Proportionate Share
thereof, and then to make an adjustment in the following year based on the
actual Excess Expenses incurred for that Comparison Year.

(c) On or before April 1 of each Comparison Year after the first Comparison Year
(or as soon thereafter as is practical), Landlord shall deliver to Tenant a
statement setting forth Tenant's Proportionate Share of the Excess Expenses for
the preceding Comparison Year. If Tenant's Proportionate Share of the actual
Excess Expenses for the previous Comparison Year exceeds the total of the
estimated monthly payments made by Tenant for such year, Tenant shall pay
Landlord the amount of the deficiency within ten (10) days of the receipt of the
statement. If such total exceeds Tenant's Proportionate Share of the actual
Excess Expenses for such Comparison Year, then Landlord shall credit against
Tenant's next ensuing monthly installment(s) of additional rent an amount equal
to the difference until the credit is exhausted. If a credit is due from
Landlord on the Expiration Date, Landlord shall pay Tenant the amount of the
credit. The obligations of Tenant and Landlord to make payments required under
this Section 5.2 shall survive the Expiration Date.

(d) Tenant's Proportionate Share of Excess Expenses in any Comparison Year
having less than 365 days shall be appropriately prorated.

(e) If any dispute arises as to the amount of any additional rent due hereunder,
Tenant shall have the right after reasonable notice and at reasonable times to
inspect Landlord's accounting records at Landlord's accounting office and, if
after such inspection Tenant still disputes the amount of additional rent owed,
a certification as to the proper amount shall be made by a mutually-approved
certified public accountant, which certification shall be final and conclusive.
Tenant agrees to pay the cost of such certification unless it is determined that
Landlord's original statement overstated Project Operating Costs by more than
five percent (5%), in which case the Landlord shall pay for said certification.

5.3. Definition of Rent. All costs and expenses which Tenant assumes or agrees
to pay Landlord under this Lease shall be deemed additional rent (which,
together with the Base Rent is sometimes referred to as the "Rent"). The Rent
shall be paid to the Building manager (or other person) and at such place, as
Landlord may from time to time designate in writing, without any

                                       5
<PAGE>

prior demand therefor and without deduction or offset, in lawful money of
the United States of America.

5.4 Rent Control. If the amount of Rent or any other payment due under this
Lease violates the terms of any governmental restrictions on such Rent or
payment, then the Rent or payment due during the period of such restrictions
shall be the maximum amount allowable under those restrictions. Upon termination
of the restrictions, Landlord shall, to the extent it is legally permitted,
recover from Tenant the difference between the amounts received during the
period of the restrictions and the amounts Landlord would have received had
there been no restrictions.

5.5 Taxes Payable by Tenant. In addition to the Rent and any other charges to be
paid by Tenant hereunder, Tenant shall reimburse Landlord upon demand for any
and all taxes payable by Landlord (other than net income taxes) which are not
otherwise reimbursable under this Lease, whether or not now customary or within
the contemplation of the parties, where such taxes are upon, measured by or
reasonably attributable to (a) the cost or value of Tenant's equipment,
furniture, fixtures and other personal property located in the Premises, or the
cost or value of any leasehold improvements made in or to the Premises by or for
Tenant, other than Building Standard Work made by Landlord, regardless of
whether title to such improvements is held by Tenant or Landlord; (b) the gross
or net Rent payable under this Lease, including, without limitation, any rental
or gross receipts tax levied by any taxing authority with respect to the receipt
of the Rent hereunder (there is no such tax at the time of lease execution); (c)
the possession, leasing, operation, management, maintenance, alteration, repair,
use or occupancy by Tenant of the Premises or any portion thereof; or (d) this
transaction or any document to which Tenant is a party creating or transferring
an interest or an estate in the Premises. If it becomes unlawful for Tenant to
reimburse Landlord for any costs as required under this Lease, the Base Rent
shall be revised to net Landlord the same net Rent after imposition of any tax
or other charge upon Landlord as would have been payable to Landlord but for the
reimbursement being unlawful.

6. INTEREST AND LATE CHARGES

If Tenant fails to pay when due any Rent or other amounts or charges which
Tenant is obligated to pay under the terms of this Lease, the unpaid amounts
shall bear interest at the maximum rate then allowed by law. Tenant acknowledges
that the late payment of any Monthly Installment of Base Rent will cause
Landlord to lose the use of that money and incur costs and expenses not
contemplated under this Lease, including without limitation, administrative and
collection costs and processing and accounting expenses, the exact amount of
which is extremely difficult to ascertain. Therefore, in addition to interest,
if any such installment is not received by Landlord within ten (10) days from
the date it is due, Tenant shall pay Landlord a late charge equal to ten percent
(10%) of such installment. Landlord and Tenant agree that this late charge
represents a reasonable estimate of such costs and expenses and is fair
compensation to Landlord for the loss suffered from such nonpayment by Tenant.
Acceptance of any interest or late charge shall not constitute a waiver of
Tenant's default with respect to such nonpayment by Tenant nor prevent Landlord
from exercising any other rights or remedies available to Landlord under this
Lease.

                                       6
<PAGE>

7. SECURITY DEPOSIT

Tenant agrees to deposit with Landlord the Security Deposit set forth at Article
2.i upon execution of this Lease, as security for Tenant's faithful performance
of its obligations under this Lease. Landlord and Tenant agree that the Security
Deposit may be commingled with funds of Landlord and Landlord shall have no
obligation or liability for payment of interest on such Deposit. Tenant shall
not mortgage, assign, transfer or encumber the Security Deposit without the
prior written consent of Landlord and any attempt by Tenant to do so shall be
void, without force or effect and shall not be binding upon Landlord. If Tenant
fails to pay any Rent or other amount when due and payable under this Lease, or
fails to perform any of the terms hereof, Landlord may appropriate and apply or
use all or any portion of the Security Deposit for rent payments or any other
amount then due and unpaid, for payment of any amount for which Landlord has
become obligated as a result of Tenant's default or breach, and for any loss or
damage sustained by Landlord as a result of Tenant's default or breach, and
Landlord may so apply or use this deposit without prejudice to any other remedy
Landlord may have by reason of Tenant's default or breach. If Landlord so uses
any of the Security Deposit, Tenant shall, within ten (10) days after written
demand therefor, restore the Security Deposit to the full amount originally
deposited; Tenant's failure to do so shall constitute an act of default
hereunder and Landlord shall have the right to exercise any remedy provided for
at Article 27 hereof. Within fifteen (15) days after the Term (or any extension
thereof) has expired or Tenant has vacated the Premises, whichever shall last
occur, and provided Tenant is not then in default on any of its obligations
hereunder, Landlord shall return the Security Deposit to Tenant, or, if Tenant
has assigned its interest under this Lease, to the last assignee of Tenant. If
Landlord sells its interest in the Premises, Landlord may deliver this deposit
to the purchaser of Landlord's interest and thereupon be relieved of any further
liability or obligation with respect to the Security Deposit. NOTE: Security
Deposit shall not be applied toward the last month's rent. In no event shall the
Security Deposit on hand be less than an amount equal to the then current
month's rent.

8. TENANT'S USE OF THE PREMISES

Tenant shall use the Premises solely for the purposes set forth in Tenant's Use
Clause. Tenant shall not use or occupy the Premises in violation of law or any
covenant, condition, or restriction affecting the Building or Project or the
certificate of occupancy issued for the Building or Project, and shall, upon
notice from Landlord, immediately discontinue any use of the Premises which is
declared by any governmental authority having jurisdiction to be a violation of
law or the certificate of occupancy. Tenant, at Tenant's own expense, shall
comply with all laws, ordinances, regulations, rules and/or any directions of
any governmental agencies or authorities having jurisdiction which shall, by
reason of the nature of Tenant's use or occupancy of the Premises, impose any
duty upon Tenant or Landlord with respect to the Premises or its use or
occupation. A judgment of any court of competent jurisdiction or the admission
by Tenant in any action or proceeding against Tenant that Tenant has violated
any such laws, ordinances, regulations, rules and/or directions in the use of
the Premises shall be deemed to be a conclusive determination of that fact as
between Landlord and Tenant. Tenant shall not do or permit to be done anything
which will invalidate or increase the cost of any fire, extended coverage or
other insurance policy covering the Building or Project and/or property located
therein, and shall comply with all rules, orders, regulations, requirements and
recommendations of the Insurance

                                       7
<PAGE>

Services Office or any other organization performing a similar function. Tenant
shall promptly upon demand reimburse Landlord for any additional premium charged
for such policy by reason of Tenant's failure to comply with the provisions of
this Article. Tenant shall not do or permit anything to be done in or about the
Premises which will in any way obstruct or interfere with the rights of other
tenants or occupants of the Building or Project, or injure or annoy them, or use
or allow the Premises to be used for any improper, immoral, unlawful or
objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance
in, on or about the Premises. Tenant shall not commit or suffer to be committed
any waste in or upon the Premises.

9. SERVICES AND UTILITIES

Provided that Tenant is not in default hereunder, Landlord agrees to furnish to
the Premises during generally recognized business days, and during hours 7:00
a.m. to 6:00 p.m. Monday through Friday and 8:00 a.m. to 1:00 p.m. on Saturdays,
excluding nationally recognized holidays, determined by Landlord in its sole
discretion, and subject to the Rules and Regulations of the Building or Project,
electricity for normal desk top office equipment and normal copying equipment,
and heating, ventilation and air conditioning ("HVAC") as required in Landlord's
judgment for the comfortable use and occupancy of the Premises. If Tenant
desires HVAC at any other time, Landlord shall use reasonable efforts to furnish
such service upon reasonable notice from Tenant and Tenant shall pay Landlord's
charges therefor on demand. Landlord shall also maintain and keep lighted the
common stairs, common entries and restrooms in the Building. Landlord shall not
be in default hereunder or be liable for any damages directly or indirectly
resulting from, nor shall the Rent be abated by reason of (i) the installation,
use or interruption of use of any equipment in connection with the furnishing of
any of the foregoing services, (ii) failure to furnish or delay in furnishing
any such services where such failure or delay is caused by accident or any
condition or event beyond the reasonable control of Landlord, or by the making
of necessary repairs or improvements to the Premises, Building or Project, or
(iii) the limitation, curtailment or rationing of, or restrictions on, use of
water, electricity, gas or any other form of energy serving the Premises,
Building or Project. Landlord shall not be liable under any circumstances for a
loss of or injury to property or business, however occurring, through or in
connection with or incidental to failure to furnish any such services. If Tenant
uses heat generating machines or equipment in the Premises which affect the
temperature otherwise maintained by the HVAC system, Landlord reserves the right
to install supplementary air conditioning units in the Premises and the cost
thereof, including the cost of installation, operation and maintenance thereof,
shall be paid by Tenant to Landlord upon demand by Landlord.

Tenant shall not, without the written consent of Landlord, use any apparatus or
device in the Premises, including without limitation, electronic data processing
machines, punch card machines or machines using in excess of 120 volts, which
consumes more electricity than is usually furnished or supplied for the use of
premises as general office space, as determined by Landlord. Tenant shall not
connect any apparatus with electric current except through existing electrical
outlets in the Premises. Tenant shall not consume water or electric current in
excess of that usually furnished or supplied for the use of premises as general
office space (as determined by Landlord), without first procuring the written
consent of Landlord, which Landlord may refuse, and in the event of consent,
Landlord may have installed a water meter or electrical

                                       8
<PAGE>

current meter in the Premises to measure the amount of water or electrical
current consumed. The cost of any such meter and of its installation,
maintenance and repair shall be paid for by the Tenant and Tenant agrees to pay
to Landlord promptly upon demand for all such water and electric current
consumed as shown by said meters, at the rates charged for such services by the
local public utility plus any additional expense incurred in keeping account of
the water and electric current so consumed. If a separate meter is not
installed, the excess cost for such water and electric current shall be
established by an estimate made by a utility company or electrical engineer
hired by Landlord at Tenant's expense.

Nothing contained in this Article shall restrict Landlord's right to require at
any time separate metering of utilities furnished to the Premises. In the event
utilities are separately metered, Tenant shall pay promptly upon demand for all
utilities consumed at utility rates charged by the local public utility plus any
additional expense incurred by Landlord in keeping account of the utilities so
consumed. Tenant shall be responsible for the maintenance and repair of any such
meters at its sole cost.

Landlord shall furnish elevator service, lighting replacement for building
standard lights, restroom supplies, window washing and janitor services in a
manner that such services are customarily furnished to comparable office
buildings in the area.

10. CONDITION OF THE PREMISES

Tenant's taking possession of the Premises shall be deemed conclusive evidence
that as of the date of taking possession the Premises are in good order and
satisfactory condition, except for such matters as to which Tenant gave Landlord
notice on or before the Commencement Date. No promise of Landlord to alter,
remodel, repair or improve the Premises, the Building or the Project and no
representation, express or implied, respecting any matter or thing relating to
the Premises, Building, Project or this Lease (including, without limitation,
the condition of the Premises, the Building or the Project) have been made to
Tenant by Landlord or its Broker or Sales Agent, other than as may be contained
herein or in a separate exhibit or addendum signed by Landlord and Tenant.

11. CONSTRUCTION, REPAIRS AND MAINTENANCE

a. Landlord's Obligations. Landlord shall maintain in good order, condition and
repair the Building and all other portions of the Premises not the obligation of
Tenant or of any other tenant in the Building.

b. Tenant's Obligations

(1) Tenant at Tenant's sole expense shall, except for services furnished by
Landlord pursuant to Article 9 hereof, maintain the Premises in good order,
condition and repair, including the interior surfaces of the ceilings, walls and
floors, all doors, all interior windows, all plumbing, pipes and fixtures,
electrical wiring, switches and fixtures, Building Standard furnishings and
special items and equipment installed by or at the expense of Tenant.

                                       9
<PAGE>

(2) Tenant shall be responsible for all repairs and alterations in and to the
Premises, Building and Project and the facilities and systems thereof, the need
for which arises out of (i) Tenant's use or occupancy of the Premises, (ii) the
installation, removal, use or operation of Tenant's Property (as defined in
Article 13) in the Premises, (iii) the moving of Tenant's Property into or out
of the Building, or (iv) the act, omission, misuse or negligence of Tenant, its
agents, contractors, employees or invitees.

(3) If Tenant fails to maintain the Premises in good order, condition and
repair, Landlord shall give Tenant notice to do such acts as are reasonably
required to so maintain the Premises. If Tenant fails to promptly commence such
work and diligently prosecute it to completion, then Landlord shall have the
right to do such acts and expend such funds at the expense of Tenant as are
reasonably required to perform such work. Any amount so expended by Landlord
shall be paid by Tenant promptly after demand with interest at the prime
commercial rate then being charged by Bank of America NT & SA plus two percent
(2%) per annum, from the date of such work, but not to exceed the maximum rate
then allowed by law. Landlord shall have no liability to Tenant for any damage,
inconvenience, or interference with the use of the Premises by Tenant as a
result of performing any such work.

c. Compliance with Law. Landlord and Tenant shall each do all acts required to
comply with all applicable laws, ordinances, and rules of any public authority
relating to their respective maintenance obligations as set forth herein.

d. Waiver by Tenant. Tenant expressly waives the benefits of any statute now or
hereafter in effect which would otherwise afford the Tenant the right to make
repairs at Landlord's expense or to terminate this Lease because of Landlord's
failure to keep the Premises in good order, condition and repair.

e. Load and Equipment Limits. Tenant shall not place a load upon any floor of
the Premises which exceeds the load per square foot which such floor was
designed to carry, as determined by Landlord or Landlord's structural engineer.
The cost of any such determination made by Landlord's structural engineer shall
be paid for by Tenant upon demand. Tenant shall not install business machines or
mechanical equipment which cause noise or vibration to such a degree as to be
objectionable to Landlord or other Building tenants.

f. Except as otherwise expressly provided in this Lease, Landlord shall have no
liability to Tenant nor shall Tenant's obligations under this Lease be reduced
or abated in any manner whatsoever by reason of any inconvenience, annoyance,
interruption or injury to business arising from Landlord's making any repairs or
changes which Landlord is required or permitted by this Lease or by any other
tenant's lease or required by law to make in or to any portion of the Project,
Building or the premises. Landlord shall nevertheless use reasonable efforts to
minimize any interference with Tenant's business in the Premises.

g. Tenant shall give Landlord prompt notice of any damage to or defective
condition in any part or appurtenance of the Building's mechanical, electrical,
plumbing, HVAC or other systems serving, located in, or passing through the
Premises.

                                       10
<PAGE>

h. Upon the expiration or earlier termination of this Lease, Tenant shall return
the Premises to Landlord clean and in the same condition as on the date Tenant
took possession, except for normal wear and tear. Any damage to the Premises,
including any structural damage, resulting from Tenant's use or from the removal
of Tenant's fixtures, furnishings and equipment pursuant to Section 13b shall be
repaired by Tenant at Tenant's expense.

12. ALTERATIONS AND ADDITIONS

a. Tenant shall not make any additions, alterations or improvements to the
Premises without obtaining the prior written consent of Landlord. Landlord's
consent may be conditioned on Tenant's removing any such additions, alterations
or improvements upon the expiration of the Term and restoring the Premises to
the same condition as on the date Tenant took possession. All work with respect
to any addition, alteration or improvement shall be done in a good and
workmanlike manner by properly qualified and licensed personnel approved by
Landlord, and such work shall be diligently prosecuted to completion. Landlord
may, at Landlord's option, require that any such work be performed by Landlord's
contractor, in which case the cost of such work shall be paid for before
commencement of the work. Tenant shall pay to Landlord upon completion of any
such work by Landlord's contractor, an administrative fee of fifteen percent
(15%) of the cost of the work.

b. Tenant shall pay the costs of any work done on the Premises pursuant to
Section 12a, and shall keep the Premises, Building and Project free and clear of
liens of any kind. Tenant shall indemnify, defend against and keep Landlord free
and harmless from all liability, loss, damage, costs, attorneys' fees and any
other expense incurred on account of claims by any person performing work or
furnishing materials or supplies for Tenant or any person claiming under Tenant.

Tenant shall keep Tenant's leasehold interest, and any additions or improvements
which are or become the property of Landlord under this Lease, free and clear of
all attachment or judgment liens. Before the actual commencement of any work for
which a claim or lien may by filed, Tenant shall give Landlord notice of the
intended commencement date a sufficient time before that date to enable Landlord
to post notices of non-responsibility or any other notices which Landlord deems
necessary for the proper protection of Landlord's interest in the Premises,
Building or the Project, and Landlord shall have the right to enter the Premises
and post such notices at any reasonable time.

c. Landlord may require, at Landlord's sole option, that Tenant provide to
Landlord, at Tenant's expense, a lien and completion bond in an amount equal to
at least one and one-half (1 1/2) times the total estimated cost of any
additions, alterations or improvements to be made in or to the Premises, to
protect Landlord against any liability for mechanic's and materialmen's liens
and to insure timely completion of the work. Nothing contained in this Section
12c shall relieve Tenant of its obligation under Section 12b to keep the
Premises, Building and Project free of all liens.

d. Unless their removal is required by Landlord as provided in Section 12a, all
additions, alterations and improvements made to the Premises shall become the
property of Landlord and be surrendered with the Premises upon the expiration of
the Term; provided, however, Tenant's

                                       11
<PAGE>

equipment, machinery and trade fixtures which can be removed without damage to
the Premises shall remain the property of Tenant and may be removed, subject to
the provisions of Section 13b.

13. LEASEHOLD IMPROVEMENTS; TENANT'S PROPERTY

a. All fixtures, equipment, improvements and appurtenances attached to or built
into the Premises at the commencement of or during the Term, whether or not by
or at the expense of Tenant ("Leasehold Improvements"), shall be and remain a
part of the Premises, shall be the property of Landlord and shall not be removed
by Tenant, except as expressly provided in Section 13b.

b. All movable partitions, business and trade fixtures, machinery and equipment,
communications equipment and office equipment located in the Premises and
acquired by or for the account of Tenant, without expense to Landlord, which can
be removed without structural damage to the Building, and all furniture,
furnishings and other articles of movable personal property owned by Tenant and
located in the Premises (collectively "Tenant's Property") shall be and shall
remain the property of Tenant and may be removed by Tenant at any time during
the Term; provided that if any of Tenant's Property is removed, Tenant shall
promptly repair any damage to the Premises or to the Building resulting from
such removal.

14. RULES AND REGULATIONS

Tenant agrees to comply with (and cause its agents, contractors, employees and
invitees to comply with) the rules and regulations attached hereto as Addendum B
and with such reasonable modifications thereof and additions thereto as Landlord
may from time to time make. Landlord shall not be responsible for any violation
of said rules and regulations by other tenants or occupants of the Building or
Project.

15. CERTAIN RIGHTS RESERVED BY LANDLORD

Landlord reserves the following rights, exercisable without liability to Tenant
for (a) damage or injury to property, person or business, (b) causing an actual
or constructive eviction from the Premises, or (c) disturbing Tenant's use or
possession of the Premises:

a. To name the Building and Project and to change the name or street address of
the Building or Project;

b. To install and maintain all signs on the exterior and interior of the
Building and Project;

c. To have pass keys to the Premises and all doors within the Premises,
excluding Tenant's vaults and safes;

d. At any time during the Term, and on reasonable prior notice to Tenant, to
inspect the Premises, and to show the Premises to any prospective purchaser or
mortgagee of the Project, or to any assignee of any mortgage on the Project, or
to others having an interest in the Project or

                                       12
<PAGE>

Landlord, and during the last six months of the Term, to show the Premises to
prospective tenants thereof; and

e. To enter the Premises for the purpose of making inspections, repairs,
alterations, additions or improvements to the Premises of the Building
(including, without limitation, checking, calibrating, adjusting or balancing
controls and other parts of the HVAC system), and to take all steps as may be
necessary or desirable for the safety, protection, maintenance or preservation
of the Premises or the Building or Landlord's interest therein, or as may be
necessary or desirable for the operation or improvement of the Building or in
order to comply with laws, orders or requirements of governmental or other
authority. Landlord agrees to use its best efforts (except in an emergency) to
minimize interference with Tenant's business in the Premises in the course of
any such entry.

16. ASSIGNMENT AND SUBLETTING

No assignment of this Lease or sublease of all or any part of the Premises shall
be permitted, except as provided in this Article 16.

a. Tenant shall not, without the prior written consent of Landlord, assign or
hypothecate this Lease or any interest herein or sublet the Premises or any part
thereof, or permit the use of the Premises by any party other than Tenant. Any
of the foregoing acts without such consent shall be void and shall, at the
option of Landlord, terminate this Lease. This Lease shall not, nor shall any
interest of Tenant herein, be assignable by operation of law without the written
consent of Landlord.

b. If at any time or from time to time during the Term Tenant desires to assign
this Lease or sublet all or any part of the Premises, Tenant shall give notice
to Landlord setting forth the terms and provisions of the proposed assignment or
sublease, and Landlord shall have the first right to sublease same for a period
of thirty (30) days from the date of said notice at no more than the same terms
and conditions as set forth in this Lease. In the absence of Landlord exercising
said first right to lease, Tenant shall then identity any subsequent assignee or
subtenant to Landlord. Tenant shall promptly supply Landlord with such
information concerning the business background and financial condition of such
proposed assignee or subtenant as Landlord may reasonably request. Landlord
shall have the option, exercisable by notice given to Tenant within twenty (20)
days after Tenant's notice is given, either to sublet such space from Tenant at
the rental and on the other terms set forth in this Lease for the term set forth
in Tenant's notice, or, in the case of an assignment, to terminate this Lease.
If Landlord does not exercise such option, Tenant may assign the Lease or sublet
such space to such proposed assignee or subtenant on the following further
conditions:

(1) Landlord shall have the right to approve such proposed assignee or
subtenant, which approval shall not be unreasonably withheld;

(2) The assignment or sublease shall be on the same terms set forth in the
notice given to Landlord;

                                       13
<PAGE>

(3) No assignment or sublease shall be valid and no assignee or sublessee shall
take possession of the Premises until an executed counterpart of such assignment
or sublease has been delivered to Landlord;

(4) No assignee or sublessee shall have a further right to assign or sublet
except on the terms herein contained; and

(5) Any sums or other economic consideration received by Tenant as a result of
such assignment or subletting, however denominated under the assignment or
sublease, which exceed, in the aggregate, (i) the total sums which Tenant is
obligated to pay Landlord under this Lease (prorated to reflect obligations
allocable to any portion of the Premises subleased), plus (ii) any real estate
brokerage commissions or fees payable in connection with such assignment or
subletting, shall be paid to Landlord as additional rent under this Lease
without affecting or reducing any other obligations of Tenant hereunder.

c. Notwithstanding the provisions of paragraphs a and b above, Tenant may assign
this Lease or sublet the Premises or any portion thereof, without Landlord's
consent and without extending any recapture or termination option to Landlord,
to any corporation which controls, is controlled by or is under common control
with Tenant, or to any corporation resulting from a merger or consolidation with
Tenant, or to any person or entity which acquires all the assets of Tenant's
business as a going concern, provided that (i) the assignee or sublessee
assumes, in full, the obligations of Tenant under this Lease, (ii) Tenant
remains fully liable under this Lease, and (iii) the use of the Premises under
Article 8 remains unchanged.

d. No subletting or assignment shall release Tenant of Tenant's obligations
under this Lease or alter the primary liability of Tenant to pay the Rent and to
perform all other obligations to be performed by Tenant hereunder. The
acceptance of Rent by Landlord from any other person shall not be deemed to be a
waiver by Landlord of any provision hereof. Consent to one assignment or
subletting shall not be deemed consent to any subsequent assignment or
subletting. In the event of default by an assignee or subtenant of Tenant or any
successor of Tenant in the performance of any of the terms hereof, Landlord may
proceed directly against Tenant without the necessity of exhausting remedies
against such assignee, subtenant or successor. Landlord may consent to
subsequent assignments of the Lease or sublettings or amendments or
modifications to the Lease with assignees of Tenant, without notifying Tenant,
or any successor of Tenant, and without obtaining its or their consent thereto
and any such actions shall not relieve Tenant of liability under this Lease.

e. If Tenant assigns the Lease or sublets the Premises or requests the consent
of Landlord to any assignment or subletting or if Tenant requests the consent of
Landlord for any act that Tenant proposes to do then Tenant shall, upon demand,
pay Landlord an administrative fee of One Hundred Fifty and No/100ths Dollars
($150.00) plus any attorneys' fees reasonably incurred by Landlord in connection
with such act or request.

                                       14
<PAGE>

17. HOLDING OVER

If after expiration of the Term, Tenant remains in possession of the Premises
with Landlord's permission (express or implied), Tenant shall become a tenant
from month to month only, upon all the provisions of this Lease (except as to
term and Base Rent), but the "Monthly Installments of Base Rent" payable by
Tenant shall be increased to one hundred fifty percent (150%) of the Monthly
Installments of Base Rent payable by Tenant at the expiration of the Term. Such
monthly rent shall be payable in advance on or before the first day of each
month. If either party desires to terminate such month to month tenancy, it
shall give the other party not less than thirty (30) days advance written notice
of the date of termination.

18. SURRENDER OF PREMISES

a. Tenant shall peaceably surrender the Premises to Landlord on the Expiration
Date, in broom-clean condition and in as good condition as when Tenant took
possession, except for (i) reasonable wear and tear, (ii) loss by fire or other
casualty, and (iii) loss by condemnation. Tenant shall, on Landlord's request,
remove Tenant's Property on or before the Expiration Date and promptly repair
all damage to the Premises or Building caused by such removal.

b. If Tenant abandons or surrenders the Premises, or is dispossessed by process
of law or otherwise, any of Tenant's Property left on the Premises shall be
deemed to be abandoned, and, at Landlord's option, title shall pass to Landlord
under this Lease as by a bill of sale. If Landlord elects to remove all or any
part of such Tenant's Property, the cost of removal, including repairing any
damage to the Premises or Building caused by such removal, shall be paid by
Tenant. On the Expiration Date Tenant shall surrender all keys to the Premises.

19. DESTRUCTION OR DAMAGE

a. If the Premises or the portion of the Building necessary for Tenant's
occupancy is damaged by fire, earthquake, act of God, the elements or other
casualty, Landlord shall, subject to the provisions of this Article, promptly
repair the damage, if such repairs can, in Landlord's opinion, be completed
within ninety (90) days. If Landlord determines that repairs can be completed
within ninety (90) days, this Lease shall remain in full force and effect,
except that if such damage is not the result of the negligence or willful
misconduct of Tenant or Tenant's agents, employees, contractors, licensees or
invitees, the Base Rent shall be abated to the extent Tenant's use of the
Premises is impaired, commencing with the date of damage and continuing until
completion of the repairs required of Landlord under Section 19d.

b. If in Landlord's opinion, such repairs to the Premises or portion of the
Building necessary for Tenant's occupancy cannot be completed within ninety (90)
days, Landlord may elect upon notice to Tenant given within thirty (30) days
after the date of such fire or other casualty, to repair such damage, in which
event this Lease shall continue in full force and effect, but the Base Rent
shall be partially abated as provided in Section 19a. If Landlord does not so
elect to make such repairs, this Lease shall terminate as of the date of such
fire or other casualty or if Tenant notifies Landlord in writing within thirty
(30) days after the date of fire or other casualty and

                                       15
<PAGE>

prior to Landlord commencing any repairs that it elects to terminate the lease
because repairs cannot be completed within ninety (90) days.

c. If any other portion of the Building or Project is totally destroyed or
damaged to the extent that in Landlord's opinion repair thereof cannot be
completed within ninety (90) days, Landlord may elect upon notice to Tenant
given within thirty (30) days after the date of such fire or other casualty, to
repair such damage, in which event this Lease shall continue in full force and
effect, but the Base Rent shall be partially abated as provided in Section 19a.
If Landlord does not elect to make such repairs, this Lease shall terminate as
of the date of such fire or other casualty.

d. If the Premises are to be repaired under this Article, Landlord shall repair
at its cost any injury or damage to the Building and Building Standard Work in
the Premises. Tenant shall be responsible at its sole cost and expense for the
repair, restoration and replacement of any other Leasehold Improvements and
Tenant's Property. Landlord shall not be liable for any loss of business,
inconvenience or annoyance arising from any repair or restoration of any portion
of the Premises, Building or Project as a result of any damage from fire or
other casualty.

e. This Lease shall be considered an express agreement governing any case of
damage to or destruction of the Premises, Building or Project by fire or other
casualty, and any present or future law which purports to govern the rights of
Landlord and Tenant in such circumstances in the absence of express agreement,
shall have no application.

20.  EMINENT DOMAIN

a. If the whole of the Building or Premises is lawfully taken by condemnation or
in any other manner for any public or quasi-public purpose, this Lease shall
terminate as of the date of such taking, and Rent shall be prorated to such
date. If less than the whole of the Building or Premises is so taken, this Lease
shall be unaffected by such taking, provided that (i) Tenant shall have the
right to terminate this Lease by notice to Landlord given within ninety (90)
days after the date of such taking if twenty percent (20%) or more of the
Premises is taken and the remaining area of the Premises is not reasonably
sufficient for Tenant to continue operation of its business, and (ii) Landlord
shall have the right to terminate this Lease by notice to Tenant given within
ninety (90) days after the date of such taking. If either Landlord or Tenant so
elects to terminate this Lease, the Lease shall terminate on the thirtieth
(30th) day after either such notice. The Rent shall be prorated to the date of
termination. If this Lease continues in force upon such partial taking, the Base
Rent and Tenant's Proportionate Share shall be equitably adjusted according to
the remaining Rentable Area of the Premises and Project.

b. In the event of any taking, partial or whole, all of the proceeds of any
award, judgment or settlement payable by the condemning authority shall be the
exclusive property of Landlord, and Tenant hereby assigns to Landlord all of its
right, title and interest in any award, judgment or settlement from the
condemning authority. Tenant, however, shall have the right, to the extent that
Landlord's award is not reduced or prejudiced, to claim from the condemning
authority (but not from Landlord) such compensation as may be recoverable by
Tenant in its own right for relocation expenses and damage to Tenant's personal
property.

                                       16
<PAGE>

c. In the event of a partial taking of the Premises which does not result in a
termination of this Lease, Landlord shall restore the remaining portion of the
Premises as nearly as practicable to its condition prior to the condemnation or
taking, but only to the extent of Building Standard Work. Tenant shall be
responsible at its sole cost and expense for the repair, restoration and
replacement of any other Leasehold Improvements and Tenant's Property.

21.  INDEMNIFICATION

a. Except for events caused by gross negligence or intentional misconduct by
Landlord, its employees or agents, Tenant shall indemnify and hold Landlord
harmless against and from liability and claims of any kind for loss or damage to
property of Tenant or any other person, or for any injury to or death of any
person, arising out of: (1) Tenant's use and occupancy of the Premises, or any
work, activity or other things allowed or suffered by Tenant to be done in, on
or about the Premises; (2) any breach or default by Tenant of any of Tenant's
obligations under this Lease; or (3) any negligent or otherwise tortious act or
omission of Tenant, its agents, employees, invitees or contractors. Tenant shall
at Tenant's expense, and by counsel satisfactory to Landlord, defend Landlord in
any action or proceeding arising from any such claim and shall indemnify
Landlord against all costs, attorneys' fees, expert witness fees and any other
expenses incurred in such action or proceeding. As a material part of the
consideration for Landlord's execution of this Lease, Tenant hereby assumes all
risk of damage or injury to any person or property in, on or about the Premises
from any cause.

b. Landlord shall not be liable for injury or damage which may be sustained by
the person or property of Tenant, its employees, invitees or customers, or any
other person in or about the Premises, caused by or resulting from fire, steam,
electricity, gas, water or rain which may leak or flow from or into any part of
the Premises, or from the breakage, leakage, obstruction or other defects of
pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting
fixtures, whether such damage or injury results from conditions arising upon the
Premises or upon other portions of the Building or Project or from other
sources. Landlord shall not be liable for any damages arising from any act or
omission of any other tenant of the Building or Project.

22. TENANT'S INSURANCE

a. All insurance required to be carried by Tenant hereunder shall be issued by
responsible insurance companies acceptable to Landlord and Landlord's lender and
qualified to do business in the State. Each policy shall name Landlord, and at
Landlord's request any mortgagee of Landlord, as an additional insured, as their
respective interests may appear. Each policy shall contain (i) a cross-liability
endorsement, (ii) a provision that such policy and the coverage evidenced
thereby shall be primary and non-contributing with respect to any policies
carried by Landlord and that any coverage carried by Landlord shall be excess
insurance, and (iii) a waiver by the insurer of any right of subrogation against
Landlord, its agents, employees and representatives, which arises or might arise
by reason of any payment under such policy or by reason of any act or omission
of Landlord, its agents, employees or representatives. A copy of each paid up
policy (authenticated by the insurer) or certificate of the insurer evidencing
the existence and amount of each insurance policy required hereunder shall be
delivered to Landlord before the date Tenant is first given the right of
possession of the Premises, and thereafter within

                                       17
<PAGE>

thirty (30) days after any demand by Landlord therefor. Landlord may, at any
time and from time to time, inspect and/or copy any insurance policies required
to be maintained by Tenant hereunder. No such policy shall be cancelable except
after twenty (20) days written notice to Landlord and Landlord's lender. Tenant
shall furnish Landlord with renewals or "binders" of any such policy at least
ten (10) days prior to the expiration thereof. Tenant agrees that if Tenant does
not take out and maintain such insurance, Landlord may (but shall not be
required to) procure said insurance on Tenant's behalf and charge the Tenant the
premiums together with a twenty-five percent (25%) handling charge, payable upon
demand. Tenant shall have the right to provide such insurance coverage pursuant
to blanket policies obtained by the Tenant, provided such blanket policies
expressly afford coverage to the Premises, Landlord, Landlord's mortgagee and
Tenant as required by this Lease.

b. Beginning on the date Tenant is given access to the Premises for any purpose
and continuing until expiration of the Term, Tenant shall procure, pay for and
maintain in effect policies of casualty insurance covering (i) all Leasehold
Improvements (including any alterations, additions or improvements as may be
made by Tenant pursuant to the provisions of Article 12 hereof), and (ii) trade
fixtures, merchandise and other personal property from time to time in, on or
about the Premises, in an amount not less than one hundred percent (100%) of
their actual replacement cost from time to time, providing protection against
any peril included with the classification "Fire and Extended Coverage" together
with insurance against sprinkler damage, vandalism and malicious mischief. The
proceeds of such insurance shall be used for the repair or replacement of the
property so insured. Upon termination of this Lease following a casualty as set
forth herein, the proceeds under (i) shall be paid to Landlord, and the proceeds
under (ii) above shall be paid to Tenant.

c. Beginning on the date Tenant is given access to the Premises for any purpose
and continuing until expiration of the Term, Tenant shall procure, pay for and
maintain in effect workers' compensation insurance as required by law and
comprehensive public liability and property damage insurance with respect to the
construction of improvements on the Premises, the use, operation or condition of
the Premises and the operations of Tenant in, on or about the Premises,
providing personal injury and broad form property damage coverage for not less
than One Million Dollars ($1,000,000.00) combined single limit for bodily
injury, death and property damage liability.

d. Not less than every three (3) years during the Term, Landlord and Tenant
shall mutually agree to increases in all of Tenant's insurance policy limits for
all insurance to be carried by Tenant as set forth in this Article. In the event
Landlord and Tenant cannot mutually agree upon the amounts of said increases,
then Tenant agrees that all insurance policy limits as set forth in this Article
shall be adjusted for increases in the cost of living.

23. WAIVER OF SUBROGATION

Landlord and Tenant each hereby waive all rights of recovery against the other
and against the officers, employees, agents and representatives of the other, on
account of loss by or damage to the waiving party of its property or the
property of others under its control, to the extent that such loss or damage is
insured against under any fire and extended coverage insurance policy which

                                       18
<PAGE>

either may have in force at the time of the loss or damage. Tenant shall, upon
obtaining the policies of insurance required under this Lease, give notice to
its insurance carrier or carriers that the foregoing mutual waiver of
subrogation is contained in this Lease.

24. SUBORDINATION AND ATTORNMENT

Upon written request of Landlord, or any first mortgagee or first deed of trust
beneficiary of Landlord, or ground lessor of Landlord, Tenant shall, in writing,
subordinate its rights under this Lease to the lien of any first mortgage or
first deed of trust, or to the interest of any lease in which Landlord is
lessee, and to all advances made or hereafter to be made thereunder. However,
before signing any subordination agreement, Tenant shall have the right to
obtain from any lender or lessor or Landlord requesting such subordination, an
agreement in writing providing that, as long as Tenant is not in default
hereunder, this Lease shall remain in effect for the full Term. The holder of
any security interest may, upon written notice to Tenant, elect to have this
Lease prior to its security interest regardless of the time of the granting or
recording of such security interest.

In the event of any foreclosure sale, transfer in lieu of foreclosure or
termination of the lease in which Landlord is lessee, Tenant shall attorn to the
purchaser, transferee or lessor as the case may be, and recognize that party as
Landlord under this Lease, provided such party acquires and accepts the Premises
subject to this Lease.

25.  TENANT ESTOPPEL CERTIFICATES

Within ten (10) days after written request from Landlord, Tenant shall execute
and deliver to Landlord or Landlord's designee, a written statement certifying
(a) that this Lease is unmodified and in full force and effect, or is in full
force and effect as modified and stating the modifications; (b) the amount of
Base Rent and the date to which Base Rent and additional rent have been paid in
advance; (c) the amount of any security deposited with Landlord; and (d) that
Landlord is not in default hereunder or, if Landlord is claimed to be in
default, stating the nature of any claimed default. Any such statement may be
relied upon by a purchaser, assignee or lender. Tenant's failure to execute and
deliver such statement within the time required shall at Landlord's election be
a default under this Lease and shall also be conclusive upon Tenant that: (1)
this Lease is in full force and effect and has not been modified except as
represented by Landlord; (2) there are no uncured defaults in Landlord's
performance and that Tenant has no right of offset, counter-claim or deduction
against Rent; and (3) not more than one month's Rent has been paid in advance.

26. TRANSFER OF LANDLORD'S INTEREST

In the event of any sale or transfer by Landlord of the Premises, Building or
Project, and assignment of this Lease by Landlord, Landlord shall be and is
hereby entirely freed and relieved of any and all liability and obligations
contained in or derived from this Lease arising out of any act, occurrence or
omission relating to the Premises, Building, Project or Lease occurring after
the consummation of such sale or transfer, providing the purchaser shall
expressly assume all of the covenants and obligations of Landlord under this
Lease. If any security deposit or prepaid

                                       19
<PAGE>

Rent has been paid by Tenant, Landlord may transfer the security deposit or
prepaid Rent to Landlord's successor and upon such transfer, Landlord shall be
relieved of any and all further liability with respect thereto.

27. DEFAULT

27.1. Tenant's Default. The occurrence of any one or more of the following
events shall constitute a default and breach of this Lease by Tenant:

a. If Tenant abandons or vacates the Premises accompanied by non-payment of
rent; or

b. If Tenant fails to pay any Rent or any other charges required to be paid by
Tenant under this Lease and such failure continues for five (5) days after such
payment is due and payable; or

c. If Tenant fails to promptly and fully perform any other covenant, condition
or agreement contained in this Lease and such failure continues for thirty (30)
days after written notice thereof from Landlord to Tenant; or

d. If a writ of attachment or execution is levied on this Lease or on any of
Tenant's Property accompanied by non-payment of rent; or

e. If Tenant makes a general assignment for the benefit of creditors, or
provides for an arrangement, composition, extension or adjustment with its
creditors; or

f. If Tenant files a voluntary petition for relief or if a petition against
Tenant in a proceeding under the federal bankruptcy laws or other insolvency
laws is filed and not withdrawn or dismissed within forty-five (45) days
thereafter accompanied by non-payment of rent, or if under the provisions of any
law providing for reorganization or winding up of corporations, any court of
competent jurisdiction assumes jurisdiction, custody or control of Tenant or any
substantial part of its property and such jurisdiction, custody or control
remains in force unrelinquished, unstayed or unterminated for a period of
forty-five (45) days accompanied by non-payment of rent; or

g. Except for actions by the FDIC, if in any proceeding or action in which
Tenant is a party, a trustee, receiver, agent or custodian is appointed to take
charge of the Premises or Tenant's Property (or has the authority to do so) for
the purpose of enforcing a lien against the Premises or Tenant's Property; or

h. If Tenant is a partnership or consists of more than one (1) person or entity,
if any partner of the partnership or other person or entity is involved in any
of the acts or events described in subparagraphs d through g above.

27.2. Remedies. In the event of Tenant's default hereunder, then in addition to
any other rights or remedies Landlord may have under any law, Landlord shall
have the right, at Landlord's option, without further notice or demand of any
kind to do the following:

                                       20
<PAGE>

a. Terminate this Lease and Tenant's right to possession of the Premises and
reenter the Premises and take possession thereof, and Tenant shall have no
further claim to the Premises or under this Lease; or

b. Continue this Lease in effect, reenter and occupy the Premises for the
account of Tenant, and collect any unpaid Rent or other charges which have or
thereafter become due and payable; or

c. Reenter the Premises under the provisions of subparagraph b, and thereafter
elect to terminate this Lease and Tenant's right to possession of the Premises.

If Landlord reenters the Premises under the provisions of subparagraphs b or c
above, Landlord shall not be deemed to have terminated this Lease or the
obligation of Tenant to pay any Rent or other charges thereafter occurring,
unless Landlord notifies Tenant in writing of Landlord's election to terminate
this Lease. In the event of any reentry or retaking of possession by Landlord,
Landlord shall have the right, but not the obligation, to remove all or any part
of Tenant's Property in the Premises and to place such property in storage at a
public warehouse at the expense and risk of Tenant. If Landlord elects to relet
the Premises for the account of Tenant, the rent received by Landlord from such
reletting shall be applied as follows: first, to the payment of any indebtedness
other than Rent due hereunder from Tenant to Landlord; second, to the payment of
any costs of such reletting; third, to the payment of the cost of any
alterations or repairs to the Premises; fourth, to the payment of Rent due and
unpaid hereunder; and the balance, if any, shall be held by Landlord and applied
in payment of future Rent as it becomes due. If that portion of rent received
from the reletting which is applied against the Rent due hereunder is less than
the amount of the Rent due, Tenant shall pay the deficiency to Landlord promptly
upon demand by Landlord. Such deficiency shall be calculated and paid monthly.
Tenant shall also pay to Landlord, as soon as determined, any costs and expenses
incurred by Landlord in connection with such reletting or in making alterations
and repairs to the Premises, which are not covered by the rent received from the
reletting.

Should Landlord elect to terminate this Lease under the provisions of
subparagraph a or c above, Landlord may recover as damages from Tenant the
following:

1. Past Rent. The worth at the time of the award of any unpaid Rent which had
been earned at the time of termination; plus

2. Rent Prior to Award. The worth at the time of the award of the amount by
which the unpaid Rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that Tenant proves could
have been reasonably avoided; plus

3. Rent After Award. The worth at the time of the award of the amount by which
the unpaid Rent for the balance of the Term after the time of award exceeds the
amount of the rental loss that Tenant proves could be reasonably avoided; plus

4. Proximately Caused Damages. Any other amount necessary to compensate Landlord
for all detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including, but not

                                       21
<PAGE>

limited to, any costs or expenses (including attorneys' fees), incurred by
Landlord in (a) retaking possession of the Premises, (b) maintaining the
Premises after Tenant's default, (c) preparing the Premises for reletting to a
new tenant, including any repairs or alterations, and (d) reletting the
Premises, including broker's commissions.

"The worth at the time of the award" as used in subparagraphs 1 and 2, is to be
computed by allowing interest at the rate of ten percent (10%) per annum. "The
worth at the time of the award" as used in subparagraph 3 above, is to be
computed by discounting the amount at the discount rate of the Federal Reserve
Bank situated nearest to the Premises at the time of the award plus one percent
(1%).

The waiver by Landlord of any breach of any term, covenant or condition of this
Lease shall not be deemed a waiver of such term, covenant or condition or of any
subsequent breach of the same or any other term, covenant or condition.
Acceptance of Rent by Landlord subsequent to any breach hereof shall not be
deemed a waiver of any preceding breach other than the failure to pay the
particular Rent so accepted, regardless of Landlord's knowledge of any breach at
the time of such acceptance of Rent. Landlord shall not be deemed to have waived
any term, covenant or condition unless Landlord gives Tenant written notice of
such waiver.

27.3. Landlord's Default. If Landlord fails to perform any covenant, condition
or agreement contained in this Lease within thirty (30) days after receipt of
written notice from Tenant specifying such default, or if such default cannot
reasonably be cured within thirty (30) days, if Landlord fails to commence to
cure within that thirty (30) day period, then Landlord shall be liable to Tenant
for any damages sustained by Tenant as a result of Landlord's breach; provided,
however, it is expressly understood and agreed that if Tenant obtains a money
judgment against Landlord resulting from any default or other claim arising
under this Lease, that judgment shall be satisfied only out of the rents,
issues, profits, and other income actually received on account of Landlord's
right, title and interest in the Premises, Building or Project, and no other
real, personal, or mixed property of Landlord (or of any of the partners which
comprise Landlord, if any) wherever situated, shall be subject to levy to
satisfy such judgment. If, after notice to Landlord of default, Landlord (or any
first mortgagee or first deed of trust beneficiary of Landlord) fails to cure
the default as provided herein, then Tenant shall have the right to cure that
default at Landlord's expense. Tenant shall not have the right to terminate this
Lease or to withhold, reduce or offset any amount against any payments of Rent
or any other charges due and payable under this Lease except as otherwise
specifically provided herein.

28. BROKERAGE FEES

Tenant warrants and represents that it has not dealt with any real estate broker
or agent in connection with this Lease or its negotiation except Broker(s)
listed in Article 2.c. of this Lease. Tenant shall indemnify and hold Landlord
harmless from any cost, expense or liability (including costs of suit and
reasonable attorneys' fees) for any compensation, commission or fees claimed by
any other real estate broker or agent in connection with this Lease or its
negotiation by reason of any act of Tenant.

                                       22
<PAGE>

29. NOTICES

All notices, approvals and demands permitted or required to be given under this
Lease shall be in writing and deemed duly served or given if personally
delivered or sent by certified or registered U.S. mail, postage prepaid, and
addressed as follows: (a) if to Landlord, to Landlord's Mailing Address and to
the Building manager, and (b) if to Tenant, to Tenant's Mailing Address;
provided, however, notices to Tenant shall be deemed duly served or given if
delivered or mailed to Tenant at 218 E. State Street, Redlands, CA, Attn: C.F.O.
(Beth Sanders). Landlord and Tenant may from time to time by notice to the other
designate another place for receipt of future notices.

30. GOVERNMENT ENERGY OR UTILITY CONTROLS

In the event of imposition of federal, state or local government controls,
rules, regulations or restrictions on the use or consumption of energy or other
utilities during the Term, both Landlord and Tenant shall be bound thereby. In
the event of a difference in interpretation by Landlord and Tenant of any such
controls, the interpretation of Landlord shall prevail, and Landlord shall have
the right to enforce compliance therewith, including the right of entry into the
Premises to effect compliance.

31. (section stricken).

32. QUIET ENJOYMENT

Tenant, upon paying the Rent and performing all of its obligations under this
Lease, shall peaceably and quietly enjoy the Premises, subject to the terms of
this Lease and to any mortgage, lease or other agreement to which this Lease may
be subordinate.

33. OBSERVANCE OF LAW

Tenant shall not use the Premises or permit anything to be done in or about the
Premises which will in any way conflict with any law, statute, ordinance or
governmental rule or regulation now in force or which may hereafter be enacted
or promulgated. Tenant shall, at its sole cost and expense, promptly comply with
all laws, statutes, ordinances and governmental rules, regulations or
requirements now in force or which may hereafter be in force, and with the
requirements of any board of fire insurance underwriters or other similar bodies
now or hereafter constituted, relating to, or affecting the condition, use or
occupancy of the Premises, excluding structural changes not related to or
affected by Tenant's Improvements or acts. The judgment of any court of
competent jurisdiction or the admission of Tenant in any action against Tenant,
whether Landlord is a party thereto or not, that Tenant has violated any law,
ordinance or governmental rule, regulation or requirement, shall be conclusive
of that fact as between Landlord and Tenant.

34. FORCE MAJEURE.

Any prevention, delay or stoppage of work to be performed by Landlord or Tenant
which is due to strikes, labor disputes, inability to obtain labor, materials,
equipment or reasonable substitutes

                                       23
<PAGE>

therefor, acts of God, governmental restrictions or regulations or controls,
judicial orders, enemy or hostile government actions, civil commotion, fire or
other casualty, or other causes beyond the reasonable control of the party
obligated to perform hereunder, shall excuse performance of the work by that
party for a period equal to the duration of that prevention, delay or stoppage.
Nothing in this Article 34 shall excuse or delay Tenant's obligation to pay Rent
or other charges under this lease.

35. CURING TENANT'S DEFAULTS.

If Tenant defaults in the performance of any of its obligations under this
Lease, Landlord may (but shall not be obligated to) without waiving such
default, perform the same for the account at the expense of Tenant. Tenant shall
pay Landlord all costs of such performance promptly upon receipt of a bill
therefor.

36. SIGN CONTROL.

Tenant shall not affix, paint, erect or inscribe any sign, projection, awning,
signal or advertisement of any kind to any part of the Premises, Building or
Project, including without limitation, the inside or outside of windows or
doors, without the written consent of Landlord. Landlord shall have the right to
remove any signs or other matter, installed without Landlord's permission,
without being liable to Tenant by reason of such removal, and to charge the cost
of removal to Tenant as additional rent hereunder, payable within ten (10) days
of written demand by Landlord.

37. MISCELLANEOUS.

a. Accord and Satisfaction; Allocation of Payments. No payment by Tenant or
receipt by Landlord of a lesser amount than the Rent provided for in this Lease
shall be deemed to be other than on account of the earliest due Rent, nor shall
any endorsement or statement on any check or letter accompanying any check or
payment as Rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of the Rent or pursue any other remedy provided for in this Lease. In
connection with the foregoing, Landlord shall have the absolute right in its
sole discretion to apply any payment received from Tenant to any account or
other payment of Tenant then not current and due or delinquent.

b. Addenda. If any provision contained in an addendum to this Lease is
inconsistent with any other provision herein, the provision contained in the
addendum shall control, unless otherwise provided in the addendum.

c. Attorneys' Fees. If any action or proceeding is brought by either party
against the other pertaining to or arising out of this Lease, the finally
prevailing party shall be entitled to recover all costs and expenses, including
reasonable attorneys' fees, incurred on account of such action or proceeding.

                                       24
<PAGE>

d. Captions, Articles and Section Numbers. The captions appearing within the
body of this Lease have been inserted as a matter of convenience and for
reference only and in no way define, limit or enlarge the scope or meaning of
this Lease. All references to Article and Section numbers refer to Articles and
Sections in this Lease.

e. Changes Requested by Lender. Neither Landlord or Tenant shall unreasonably
withhold its consent to changes or amendments to this Lease requested by the
lender on Landlord's interest, so long as these changes do not alter the basic
business terms of this Lease or otherwise materially diminish any rights or
materially increase any obligations of the party from whom consent to such
change or amendment is requested.

f. Choice of Law. This Lease shall be construed and enforced in accordance with
the laws of the State of California.

g. Consent. Notwithstanding anything contained in this Lease to the contrary,
Tenant shall have no claim, and hereby waives the right to any claim against
Landlord for money damages by reason of any refusal, withholding or delaying by
Landlord of any consent, approval or statement of satisfaction and in such
event, Tenant's only remedies therefor shall be an action for specific
performance, injunction or declaratory judgment to enforce any right to such
consent, etc.

h. Corporate Authority. If Tenant is a corporation, each individual signing this
Lease on behalf of Tenant represents and warrants that he is duly authorized to
execute and deliver this Lease on behalf of the corporation, and that this Lease
is binding on Tenant in accordance with its terms. Tenant shall, at Landlord's
request, deliver a certified copy of a resolution of its board of directors
authorizing such execution.

i. Counterparts. This Lease may be executed in multiple counterparts, all of
which shall constitute one and the same Lease.

j. Execution of Lease; No Option. The submission of this Lease to Tenant shall
be for examination purposes only, and does not and shall not constitute a
reservation of or option for Tenant to lease, or otherwise create any interest
of Tenant in the Premises or any other premises within the Building or project.
Execution of this Lease by Tenant and its return to Landlord shall not be
binding on Landlord notwithstanding any time interval, until Landlord has in
fact signed and delivered this Lease to Tenant.

k. Furnishing of Financial Statements; Tenant's Representation. In order to
induce Landlord to enter into this Lease Tenant agrees that it shall promptly
furnish Landlord, from time to time, upon Landlord's written request, with
financial statements reflecting Tenant's current financial condition. Tenant
represents and warrants that all financial statements, records and information
furnished by Tenant to Landlord in connection with this Lease are true, correct
and complete in all respects.

l. Further Assurances. The parties agree to promptly sign all documents
reasonably requested to give effect to the provisions of this Lease.

                                       25
<PAGE>

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

n. Prior Agreements; Amendments. This Lease contains all of the agreements of
the parties with respect to any matter covered or mentioned in this Lease, and
no prior agreement or understanding pertaining to any such matter shall be
effective for any purpose. No provisions of this Lease may be amended or added
to except by an agreement in writing signed by the parties or their respective
successors in interest.

o. Recording. Tenant shall not record this Lease without the prior written
consent of Landlord. Tenant, upon the request of Landlord, shall execute and
acknowledge a "short form" memorandum of this Lease for recording purposes.

p. Severability. A final determination by a court of competent jurisdiction that
any provision of this Lease is invalid shall not affect the validity of any
other provision, and any provision so determined to be invalid shall, to the
extent possible, be construed to accomplish its intended effect.

q. Successors and Assigns. This Lease shall apply to and bind the heirs,
personal representatives, and permitted successors and assigns of the parties.

r. Time of the Essence. Time is of the essence of this Lease.

s. Waiver. No delay or omission in the exercise of any right or remedy of
Landlord upon any default by Tenant shall impair such right or remedy or be
construed as a waiver of such default.

t. Terminology. For purposes of this Lease the term "Landlord shall be
interchangeable with "Lessor" and the term "Tenant" shall be interchangeable
with "Lessee".

The receipt and acceptance by Landlord of delinquent Rent shall not constitute a
waiver of any other default; it shall constitute only a waiver of timely payment
for the particular Rent payment involved.

No act or conduct of Landlord, including, without limitation, the acceptance of
keys to the Premises, shall constitute an acceptance of the surrender of the
Premises by Tenant before the expiration of the Term. Only a written notice from
Landlord to Tenant shall constitute acceptance of the surrender of the Premises
and accomplish a termination of the Lease.

Landlord's consent to or approval of any act by Tenant requiring Landlord's
consent or approval shall not be deemed to waive or render unnecessary
Landlord's consent to or approval of any subsequent act by Tenant.

                                       26
<PAGE>

Any waiver by Landlord of any default must be in writing and shall not be a
waiver of any other default concerning the same or any other provision of the
Lease.

The Parties hereto have executed this Lease as of the dates set forth below.
<TABLE>
<S>                                                           <C>
Date:  October 4, 2000                                        Date:  September 28, 2000
Landlord: OLEN COMMERCIAL REALTY CORP.                        Tenant::REDLANDS
                                                              CENTENNIAL BANK, A
                                                              CALIFORNIA CORPORATION

By: /s/ Charles C. Aufhammer                                  By: /s/ Timothy P. Wallbridge
   -------------------------------------------------             ------------------------------------
Name:  Charles C. Aufhammer                                   Name: Timothy P. Walbridge
Title:  Vice President, Marketing                             Title: Executive Vice President
</TABLE>

                                       27
<PAGE>

                                   ADDENDUM A

     TO LEASE DATED: SEPTEMBER 20, 2000
     BY AND BETWEEN: OLEN COMMERCIAL REALTY CORP.,
     A NEVADA CORPORATION AS LESSOR; AND: REDLANDS CENTENNIAL BANK,
     A CALIFORNIA CORPORATION AS LESSEE

1.   SIGN CRITERIA

     These regulations are established in order to ensure that all signs comply
     with the signing ordinances of the City of Brea, and in order to maintain a
     continuity in appearance throughout Olen Pointe-Brea. Conformance with the
     following regulations will be strictly enforced:

     A.   MASTER LOBBY DIRECTORY:

     (1) Each suite shall be entitled to one line of copy on the lobby
directory.

     (2) Copy to be at Lessor's expense.

     B.   SUITE DOOR SIGNS:

     (1) Each suite shall be allowed one identity sign on same side as door knob
on front door of the premises.

     (2) The sign shall be a 9" x 9" plaque. Material : 1/4" clear acrylic with
beveled and polished edges. Graphics: subsurface back screened field leaving
copy clear which is backed with polished brass plate. Left margin justified.
Black plexiglass on base floated 1/4" off wall and permanently screwed on.

     (3) The sign shall be installed at Lessor's expense.

     (4) Except as provided herein, no electrical or audible signs, advertising
placards, banners, pennants, names, insignias, trademarks, or other descriptive
material shall be affixed or maintained upon the glass panes, doors, exterior
walls, or interior common area walls of the Premises.

     (5) Lessee shall contact Lessor with Lessee's directory and suite door
requirements at (949)719-7206.

     BUILDING SIGN:

Lessee shall be allowed to place an "eyebrow" level sign on the Building where
shown on Exhibit "A-2" herein subject to the City of Brea's approval. The design
of said signage shall be mutually-approved by Landlord and Tenant. All costs
associated with the installation, maintenance and removal of such signage shall
be at Lessee's sole cost and expense.

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<PAGE>

2.   NO TELEMARKETING

     Lessee warrants to Lessor that its use of the subject Premises shall NOT be
     for the operation of a telemarketing business, although some
     business-to-business targeted marketing involving the use of telephone
     research, surveying and prospecting techniques may be employed. Lessee
     acknowledges that Lessor does not allow boiler-room telemarketing
     businesses as an acceptable use for this or any other location in Lessors
     properties and Lessee therefore understands and agrees its total number of
     employees shall not adversely impact the Project parking, or usage of the
     common areas, or exceed that which would be reasonably expected for normal
     general office use in a facility of this size, and that non-compliance of
     these issues shall constitute a material breach of this Lease.

3.   EARLY POSSESSION

Lessor agrees to grant Lessee early occupancy of said Premises, the date to be
upon execution of lease documents for the purpose of construction of Tenant
Improvements. Lease payments shall not commence until January 1, 2001. Lessee
agrees to hold Lessor harmless from any liability or responsibility for damages
to any of Lessee's personal property, or for any loss suffered by Lessee through
vandalism, theft, or destruction of said personal property by fire or other
causes. It is agreed by Lessee and Lessor that all the terms and conditions of
the lease are to be in full force and effect except as to rent, as of the date
of Lessee's possession of subject Premises.

ATM

Lessee shall have the right to install one (1) ATM machine where shown on
Exhibit "A-1" subject to Lessor's approval of specific design and method of
installation. Lessee agrees to remove said ATM upon its vacation of the Premises
and restore the building exterior to its original condition, all at Lessee's
sole expense.

                                       2
<PAGE>

                                   ADDENDUM B

     BY AND BETWEEN: OLEN COMMERCIAL REALTY CORP., A NEVADA CORPORATION AS
     LESSOR; AND REDLAND CENTENNIAL BANK, A CALIFORNIA CORPORATION AS LESSEE

     TO LEASE DATED:SEPTEMBER 20, 2000

1.   No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside or
inside of the Building without the written consent of Lessor first had and
obtained and Lessor shall have the right to remove and destroy any such sign,
placard, picture, advertisement, name or notice without notice to and at the
expense of Lessee.

All approved signs or lettering on doors shall be printed, painted, affixed or
inscribed at the expense of Lessee by a person approved by the Lessor.

Lessee shall not place anything or allow anything to be placed near the glass of
any window, door, partition or wall which may appear unsightly from outside the
Premises; provided, however, that the Lessor may furnish and install a Building
standard window covering at all exterior windows. Lessee shall not without prior
written consent of Lessor cause or otherwise install sunscreen on any window.

2.   The sidewalks, halls, passages, exits, entrances, elevators and stairways,
driveways, and parking areas shall not be obstructed by Lessees or used by them
for any purpose other than for ingress and egress from their respective
Premises.

3.   Lessee shall not alter any lock or install any new or additional locks or
bolts on any doors or windows of the Premises, without prior written consent of
Lessor and subsequent delivery of a duplicate key to Lessor.

4.   The toilet rooms, urinals, wash bowls and other apparatus shall not be used
for any purpose other than that for which they were constructed and no foreign
substance of any kind whatsoever shall be thrown therein and the expense of any
breakage, stoppage, or damage resulting from the violation of this rule shall be
borne by the Lessee who, or whose employees or invitees shall have caused it.

5.   Lessee shall not overload the floor of the Premises or in any way deface
the Premises or any part thereof.

6.   Lessee shall not use, keep or permit to be used or kept any foul or noxious
gas or substances in the Premises, or permit or suffer the Premises to be
occupied or used in a manner offensive or objectionable to the Lessor or other
occupants of the Building by reason of noise, odors and/or vibrations, or
interfere in any way with other Lessees or those having business therein, nor
shall any animals or birds be brought in or kept in or about the Premises or the
Building

                                       1
<PAGE>

7.   No cooking except for normal employee meal preparation shall be done or
permitted by any Lessee on the Premises, nor shall the Premises be used for
washing clothes, for lodging, or for any improper, objectionable or immoral
purpose.

8.   Lessee shall not keep in the Premises or the Building any kerosene,
gasoline or inflammable or combustible fluid or material, or use any method of
heating or air conditioning other than that supplied or approved in writing by
the Lessor.

9.   Lessor will direct electricians as to where and how telephone and telegraph
wires are to be introduced. No boring or cutting for wires will be allowed
without the consent of the Lessor. The locations of telephones, call boxes and
other office equipment affixed to the Premises shall be subject to the approval
of Lessor.

10.  Lessor reserves the right to exclude or expel from the Building any person
who, in the judgment of Lessor, is intoxicated or under the influence of liquor
or drugs, or who shall in any manner do any act in violation of any of the rules
and regulations of the Building.

11. Lessee shall not disturb, solicit, or canvass any occupant of the Building
and shall cooperate to prevent same.

12. Without the written consent of Lessor, Lessee shall not use the name of the
building in connection with or in promoting or advertising the business of
Lessee except as Lessees address.

13. Lessor shall have the right to control and operate the public portions of
the Building, and the public facilities, and heating and air conditioning, as
well as facilities furnished for the common use of the Lessees, in such manner
as it deems best for the benefit of the Lessees generally.

14. All garbage and refuse shall be placed by Lessee in the containers at the
location prepared by Lessor for refuse collection, in the manner and at the
times and places specified by Lessor. Lessee shall not burn any trash or garbage
of any kind in or about the Leased Premises or the Business Park. All cardboard
boxes must be broken down prior to being placed in the trash container. All
Styrofoam chips must be bagged or otherwise contained prior to placement in the
trash container, so as not to constitute a nuisance. Pallets may not be disposed
of in the trash bins or enclosures. It is the Lessees responsibility to dispose
of pallets by alternative means.

Should any garbage or refuse not be deposited in the manner specified by Lessor,
Lessor may after three (3) hours verbal notice to Lessee, take whatever action
necessary to correct the infraction at Lessees expense.

15. No aerial antenna shall be erected on the roof or exterior walls of the
Leased Premises, or on the grounds, without in each instance, the written
consent of Lessor first being obtained. Any aerial or antennae so installed
without such written consent shall be subject to removal by Lessor at any time
without notice.

                                       2
<PAGE>

16. No loud speakers, televisions, phonographs, radios or other devices shall be
used in a manner so as to be heard or seen outside of the Leased Premises or in
neighboring space without the prior written consent of Lessor.

17. The outside areas immediately adjoining the Leased Premises shall be kept
clean and free from dirt and rubbish by the Lessee, to the satisfaction of the
Lessor, and Lessee shall not place or permit any obstruction or materials in
such areas. No exterior storage shall be allowed.

18. Lessee shall use at Lessees cost such pest extermination contractors as
Lessor may direct and at such intervals as Lessor may require.

19. These common types of damages will be charged back to the Lessee if they are
not corrected PRIOR TO VACATING the Premises:

-    Keys not returned to Lessor for ALL locks, requiring the service of a
     locksmith and rekeying.
-    Removal of all decorator painting, wallpapering and paneling, or Lessor?s
     prior consent to remain. Electrical conduit and receptacles on the surface
     of walls.
-    Phone outlets, wiring, or phone equipment added on wall surfaces.
-    Security tape/magnetic tape switches for burglar alarm systems added to
     windows and door surfaces.
-    Penetration of roof membrane in any manner.
-    Holes in walls, doors, and ceiling surfaces.
-    Addition or change of standard door hardware.
-    Painting or gluing of carpet or tile on warehouse floors.
-    Glass damage.
-    Damage to warehouse ceiling insulation.
-    Stains or damage to carpeting beyond normal wear-and-tear.
-    Damaged, inoperative, or missing electrical, plumbing, or HVAC equipment.
-    Debris and furniture requiring disposal.
-    Damaged or missing mini-blinds, draperies, and baseboards.
-    Installation of additional improvements without Lessors prior written
     approval or obtainment of required City building permits.

Lessee agrees to comply with all such rules and regulations upon notice from
Lessor. Should Lessee not abide by these Rules and Regulations, Lessor may serve
a three (3) day notice to correct deficiencies. If Lessee has not corrected
deficiencies by the end of the notice period, Lessee will be in default of
lease.

Lessor reserves the right to amend or supplement the foregoing rules and
regulations and to adopt and promulgate additional rules and regulations
applicable to the leased premises. Notice of such rules and regulations and
amendments and supplements thereto, if any, shall be given to the Lessee.

                                       3
<PAGE>

                                   ADDENDUM C

     TO LEASE DATED:SEPTEMBER 20, 2000
     BY AND BETWEEN: OLEN COMMERCIAL REALTY CORP., A NEVADA CORPORATION AS
     LESSOR; AND: REDLANDS CENTENNIAL BANK, A CALIFORNIA CORPORATION AS LESSEE

                             ANNUAL RENT ADJUSTMENT

The minimum Base Monthly Rent set forth in Paragraph 2.h. of this Lease shall be
adjusted as follows:

Beginning on January 1, 2002 through December 31, 2002, the minimum Base Monthly
Rent shall be $11,158.49*.
Beginning on January 1, 2003 through December 31, 2003, the minimum Base Monthly
Rent shall be $11,604.83*.
Beginning on January 1, 2004 through December 31, 2004, the minimum Base Monthly
Rent shall be $12,069.03*.
Beginning on January 1, 2005 through December 31, 2005, the minimum Base Monthly
Rent shall be $12,551.79*.

* Note: The Security Deposit shall be subject to adjustment pursuant to
Paragraph 7 of the Lease.

                                       1
<PAGE>

                                   ADDENDUM D

     TO LEASE DATED: SEPTEMBER 20, 2000
     BY AND BETWEEN: OLEN COMMERCIAL REALTY CORP., A NEVADA CORPORATION AS
     LESSOR; AND:REDLANDS CENTENNIAL BANK, A CALIFORNIA CORPORATION AS LESSEE

                        OPTION TO EXTEND/LEASE EXTENSION

Providing Lessee is not in default under any of the terms of this Lease, Lessee
shall have the Option to Extend the term of this Lease for TWO (2) FIVE-YEAR
periods (the "Option Terms") on all the same terms and conditions as contained
in this Lease, except that the minimum base monthly rent commencing with the
first month of each Lease Extension shall beat ninety-five percent (95%) of the
THEN MARKET RATE for equivalent space in City of Brea.

To exercise this Option to Extend, Lessee must give notice IN WRITING to Lessor
by Certified mail, return receipt requested at least ONE HUNDRED AND EIGHTY DAYS
prior to the expiration of the previous term.

The "Then Market Rate" of the Premises shall be determined as follows: Lessee
and Lessor shall agree upon a then Market Rate and if unable to agree, then
Lessor and Lessee will each appoint one independent real estate broker who has
been active in the leasing of comparable commercial properties located in the
City of Brea over the five (5) year period ending on the date of such
appointment. The determination of said brokers will be limited solely to the
issue of whether Lessor's or Lessee's submitted fair market rental rate for the
leased area is the closest to the actual Fair Market Rental Rate for such area
as determined by the brokers, taking into account the requirements below. The
two (2) brokers so appointed will, within fifteen (15) days of the date of the
appointment of the last appointed broker, agree upon and appoint a third broker.
The three (3) brokers will within thirty (30) days of the appointment of the
third broker reach a decision as to whether the parties will use Lessor's or
Lessee's submitted Fair Market Rental Rate for purposes of establishing the Base
Rent for the Option Term in question, which shall be based upon the Fair Market
Rental Rate, and will notify Lessor and Lessee thereof. The decision of the
majority of the three (3) brokers will be binding upon Lessor and Lessee. If
either Lessor or Lessee fails to appoint a broker within the time period
specified above, the broker appointed by one of them will, within thirty (30)
days following the date on which the party failing to appoint a broker could
have last appointed such broker, reach a decision based upon the procedures set
forth above (i.e. by selecting either Lessor's or Lessee's submitted Fair Market
Rental Rate) and notify Lessor and Lessee thereof, and such broker's decision
will be binding upon Lessor and Lessee. If the process described hereinabove has
not resulted in the determination of a Fair Market Rental Rate by the
commencement of the Option Term in question, then the Fair Market Rental Rate
estimated by Lessor will be used until the brokers reach a decision, with an
appropriate rental adjustment when a decision is reached. The term "Fair Market
Rental Rate" for purposes of this Lease shall mean the monthly amounts of Base
Rent per square foot of Rentable Floor Area for the Option Term, that a willing,
non-renewal new lessee (excluding sublease and assignment transactions) would
pay, and a willing lessor of a comparable premises located in the City of Brea
(the "Market") would accept, at arm's length, for space of comparable size and
quality as the Premises.

                                       1
<PAGE>

                                   ADDENDUM E

     TO LEASE DATED: SEPTEMBER 20, 2000
     BY AND BETWEEN: OLEN COMMERCIAL REALTY CORP., A NEVADA CORPORATION AS
     LESSOR; AND:REDLANDS CENTENNIAL BANK, A CALIFORNIA CORPORATION AS LESSEE

CONSTRUCTION OF TENANT IMPROVEMENTS

In consideration of Lessees agreement to enter into this Lease, Lessor agrees
grant Lessee the right to contract directly with a licensed general contractor
of Lessees choice to complete tenant improvements as set forth hereinbelow and
substantially in accordance with Exhibit "B" attached hereto, said contractor to
be approved in advance by Lessor, said approval not to be unreasonably withheld.

Lessor agrees to pay to Lessee a total sum of $123,093.00 upon substantial
completion and final inspection by the City of Brea of all Tenant Improvements
as set forth hereinbelow and depicted on Exhibit "B" attached hereto, and
delivery of all applicable lien releases to Lessor as Lessors contribution
toward the cost of said Tenant Improvements. Lessee agrees to complete the
Tenant Improvements substantially in accordance with the attached Exhibit Busing
materials and finishes equal to or better than Lessors building standards and
Lessee agrees to have all materials and finishes approved by Lessor in advance
of construction:

1.   All drywall partitions taped, textured and painted;
2.   All air-conditioning and heating distribution and return air ducts as
     required to provide industry standard office HVAC (VAV and all controls and
     ties into existing Energy Management System). Lessor provides HVAC unit(s)
     and Static Pressure Loop to the Premises);
3.   Carpet and/or vinyl composition tile throughout improved area;
4.   Building standard vertical blinds on all exterior windows in improved area;
5.   Building standard doors, frames and lever-type door hardware;
6.   Building standard 2'x2' grid dropped ceiling with 2'x4' fluorescent office
     lighting in improved area;
7.   Building standard electrical throughout improved area per a mutually agreed
     upon plan;
8.   Building standard telephone/computer pull-string and plaster rings;
9.   Kitchen and coffee bar plumbing and fixtures as shown;
10.  All necessary working drawings, including mechanical and electrical, and
     permits.

Lessee agrees to provide Lessor with final working drawings PRIOR TO
COMMENCEMENT OF WORK and Lessor reserves the right to approve same, said
approval not to be unreasonably withheld; all plans and specifications are
subject to approval by the City of Brea.

Further, Lessee agrees all work shall be completed by a licensed building
contractor in a workmanlike manner and shall be constructed in accordance with
all applicable building codes and ordinances, including but not limited to all
applicable ADA codes and requirements. Lessee shall

                                       1
<PAGE>

use materials of a quality the same or better than Lessor building standards for
office buildings in Olen Pointe-Brea. All finishes shall be submitted to Lessor
for approval PRIOR TO PURCHASE OR INSTALLATION, said approval not to be
unreasonably withheld. All Tenant Improvements constructed by Lessee shall
remain the property of Lessor at end of the lease term.

Lessor reserves the right to periodically inspect Premises during construction
to ensure Lessee is completing work in accordance with all applicable building
codes and ordinances and Lessors building standards for construction.

Lessee shall be fully responsible for all applicable building permits from the
City of Brea. Lessee understands and agrees that any delays caused by obtaining
said permits, or any delays in construction shall not change the Commencement
Date of this Lease. Lessee agrees to commence payment of Rent January 1, 2001,
whether or not Tenant Improvements as set forth herein are substantially
complete or the building is occupiable.

Promptly following Lessees receipt of a building permit to construct Tenants
improvements on the Premises, Lessee shall perform and complete all construction
improvements to the Premises as set forth hereinabove as required to prepare the
Premises for Lessees Permitted Use in a form reasonably satisfactory to and
reasonably approved by Lessor. None of Lessees work shall be commenced unless
and until final written plans and specifications have been submitted to and
approved by Lessor, in Lessors reasonable discretion and the City of Brea. Said
plans and specifications shall include a full set of working drawings, including
but not necessarily limited to floor plan, electrical plan, lighting plan,
electrical panel schedules, load calculations and specifications for all
proposed finishes. Lessee shall prepare and submit its final plans and
specifications to Lessor within two (2) weeks from the date of mutual Lease
execution. Lessor shall have a maximum of fifteen (15) days from receipt thereof
to disapprove of such plans and specification. No material variation from the
approved plans and specifications shall be made without the prior written
approval of Lessor. All work shall be completed in compliance with all codes,
ordinances, rules and regulations of any applicable governmental authority, in a
good and workmanlike manner by licensed contractors with appropriate building
permits, and in such a manner as to cause a minimum of interference with the
transaction of business in Olen Pointe-Brea. Lessee shall indemnify and hold
harmless Lessor from all expense, liens, claims or damages to either persons or
property arising out of or resulting from any such construction and Lessee
agrees that all contractors performing work on the Premises shall maintain
public liability insurance of at least One Million and No/100 Dollars
($1,000,000.00). All entries on the Premises after the date of mutual Lease
execution and work done by or on behalf of the Lessee shall be at Lessees sole
risk.

                                       2

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