Document:

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                                                                    EXHIBIT 10.5

                              OFFICE SPACE LEASE

                                    BETWEEN

                              THE IRVINE COMPANY

                                      AND

                            PACIFIC MERCANTILE BANK
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                              OFFICE SPACE LEASE

     THIS LEASE is made as of the 8th day of December, 1999, by and between THE
IRVINE COMPANY, hereafter called "Landlord," and PACIFIC MERCANTILE BANK, a
California corporation, hereinafter called "Tenant."

                      ARTICLE I.  BASIC LEASE PROVISIONS

     Each reference in this Lease to the "Basic Lease Provisions" shall mean and
refer to the following collective terms, the application of which shall be
governed by the provisions in the remaining Articles of this Lease.

1.   Tenant's Trade Name:  N/A

2.   Premises:  Suite No.  360 (the Premises are more particularly described in
     Section 2.1).

     Address of Building:  450 Newport Center Drive, Newport Beach, CA  92660

     Project Description (if applicable):  Newport Center Block 400

3.   Use of Premises:  General Office and for no other use.

4.   Commencement Date:  December 9, 1999

5.   Lease Term:  Twelve (12) months, plus such additional days as may be
     required to cause this Lease to terminate on the final day of the calendar
     month.

6.   Basic Rent:  Five Thousand One Hundred Ninety-Six Dollars ($5,196.00) per
     month.

     Rental Adjustments:  None

7.   Property Tax Base: The Property Taxes per rentable square foot incurred by
     Landlord and attributable to the twelve month period ending  N/A.
                                                                 ----

     Building Cost Base: The Building Costs per rentable square foot incurred by
     Landlord and attributable to the twelve month period ending  N/A.
                                                                 ----

     Expense Recovery Period:  Every twelve month period during the Term (or
     portion thereof during the first and last Lease years) ending N/A.
                                                                   ---

8.   Floor Area of Premises:  approximately 1,551 rentable square feet

9.   Security Deposit:  $5,715.00

10.  Broker(s):  SZ Real Estate Management Services

11.  Plan Approval Date:  N/A

12.  Parking: Five (5) unreserved vehicle parking spaces.

13.  Address for Payments and Notices:

            LANDLORD                                 TENANT

     The Irvine Company                      Pacific Mercantile Bank
     c/o PM Realty Group                     450 Newport Center Drive
     630 Newport Center Drive, Suite 100     Suite 360
     Newport Beach, CA  92660                Newport Beach, CA  92660
     Attn:  Property Manager

     with a copy of notices to:

     THE IRVINE COMPANY
     P.O. Box 6370
     Newport Beach, CA  92658-6370
     Attn:  Vice President, Operations - Office Properties

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                             ARTICLE II.  PREMISES

     SECTION 2.1.  LEASED PREMISES.  Landlord leases to Tenant and Tenant rents
from Landlord the premises shown in Exhibit A (the "Premises"), containing
approximately the floor area set forth in Item 8 of the Basic Lease Provisions
and known by the suite number identified in Item 2 of the Basic Lease
Provisions.  The Premises are located in the building identified in Item 2 of
the Basic Lease Provisions (the "Building"), which is a portion of the project
described in Item 2 (the "Project").  If, upon completion of the space plans for
the Premises, Landlord's architect or space planner determines that the rentable
square footage of the Premises differs from that set forth in the Basic Lease
Provisions, then Landlord shall so notify Tenant and the Basic Rent (as shown in
Item 6 of the Basic Lease Provisions) shall be promptly adjusted in proportion
to the change in square footage.  Within five (5) days following Landlord's
request, the parties shall memorialize the adjustments by executing an amendment
to this Lease prepared by Landlord.

     SECTION 2.2.  ACCEPTANCE OF PREMISES.  Tenant acknowledges that neither
Landlord nor any representative of Landlord has made any representation or
warranty with respect to the Premises or the Building or the suitability or
fitness of either for any purpose, except as set forth in this Lease.  The
taking of possession or use of the Premises by Tenant for any purpose other than
construction shall conclusively establish that the Premises and the Building
were in satisfactory condition and in conformity with the provisions of this
Lease in all respects, except for those matters which Tenant shall have brought
to Landlord's attention on a written punch list.  The list shall be limited to
any items required to be accomplished by Landlord under the Work Letter (if any)
attached as Exhibit X, and shall be delivered to Landlord within thirty (30)
days after the term ("Term") of this Lease commences as provided in Article III
below.  If there is no Work Letter, or if no items are required of Landlord
under the Work Letter, by taking possession of the Premises Tenant accepts the
improvements in their existing condition, and waives any right or claim against
Landlord arising out of the condition of the Premises.  Nothing contained in
this Section shall affect the commencement of the Term or the obligation of
Tenant to pay rent.  Landlord shall diligently complete all punch list items of
which it is notified as provided above.

     SECTION 2.3.  BUILDING NAME AND ADDRESS.  Tenant shall not utilize any name
selected by Landlord from time to time for the Building and/or the Project as
any part of Tenant's corporate or trade name.  Landlord shall have the right to
change the name, number or designation of the Building or Project without
liability to Tenant.

                              ARTICLE III.  TERM

     SECTION 3.1.  GENERAL.  The Term shall be for the period shown in Item 5 of
the Basic Lease Provisions.  The Term shall commence ("Commencement Date") on
the Commencement Date as set forth  in Item 4 of the Basic Lease Provisions and
shall end upon the expiration of the period set forth in Item 5 of the Basic
Lease Provisions ("Expiration Date").

                   ARTICLE IV.  RENT AND OPERATING EXPENSES

     SECTION 4.1.  BASIC RENT.  From and after the Commencement Date, Tenant
shall pay to Landlord without deduction or offset a Basic Rent for the Premises
in the total amount shown (including subsequent adjustments, if any) in Item 6
of the Basic Lease Provisions.  Any rental adjustment shown in Item 6 shall be
deemed to occur on the specified monthly anniversary of the Commencement Date,
whether or not that date occurs at the end of a calendar month.  The rent shall
be due and payable in advance commencing on the Commencement Date and continuing
thereafter on the first day of each successive calendar month of the Term, as
prorated for any partial month.  No demand, notice or invoice shall be required.
An installment of rent in the amount of one (1) full month's Basic Rent at the
initial rate specified in Item 6 of the Basic Lease Provisions shall be
delivered to Landlord concurrently with Tenant's execution of this Lease and
shall be applied against the Basic Rent first due hereunder; the next
installment of Basic Rent shall be due on the first day of the second calendar
month of the Term, which installment shall, if applicable, be appropriately
prorated to reflect the amount prepaid for that calendar month.

     SECTION 4.2.  OPERATING EXPENSE INCREASE.

          (a) Tenant shall compensate Landlord, as additional rent, for Tenant's
proportionate shares of "Building Costs" and "Property Taxes," as those terms
are defined below, incurred by Landlord in the operation of the Building and
Project.  Property Taxes and Building Costs are mutually exclusive and may be
billed separately or in combination as determined by Landlord.  Tenant's
proportionate share

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of Property Taxes shall equal the product of the rentable floor area of the
Premises multiplied by the difference of (i) Property Taxes per rentable square
foot less (ii) the Property Tax Base set forth in Item 7 of the Basic Lease
Provisions.  Tenant's proportionate share of Building Costs shall equal the
product of the rentable floor area of the Premises multiplied by the difference
of (i) Building Costs per rentable square foot less (ii) the Building Cost Base
set forth in Item 7 of the Basic Lease Provisions.  Tenant acknowledges
Landlord's rights to make changes or additions to the Building and/or Project
from time to time pursuant to Section 6.5 below, in which event the total
rentable square footage within the Building and/or Project may be adjusted.  For
convenience of reference, Property Taxes and Building Costs may sometimes be
collectively referred to as "Operating Expenses."

          (b) Commencing prior to the start of the first full "Expense Recovery
Period" of the Lease (as defined in Item 7 of the Basic Lease Provisions), and
prior to the start of each full or partial Expense Recovery Period thereafter,
Landlord shall give Tenant a written estimate of the amount of Tenant's
proportionate shares of Building Costs and Property Taxes for the Expense
Recovery Period or portion thereof.  Tenant shall pay the estimated amounts to
Landlord in equal monthly installments, in advance, with Basic Rent.  If
Landlord has not furnished its written estimate for any Expense Recovery Period
by the time set forth above, Tenant shall continue to pay cost reimbursements at
the rates established for the prior Expense Recovery Period, if any; provided
that when the new estimate is delivered to Tenant, Tenant shall, at the next
monthly payment date, pay any accrued cost reimbursements based upon the new
estimate.  Landlord may from time to time change the Expense Recovery Period to
reflect a calendar year or a new fiscal year of Landlord, as applicable, in
which event Tenant's share of Operating Expenses shall be equitably prorated for
any partial year.

          (c) Within one hundred twenty (120) days after the end of each Expense
Recovery Period, Landlord shall furnish to Tenant a statement setting forth the
actual or prorated Property Taxes and Building Costs attributable to that
period, and the parties shall within thirty (30) days thereafter make any
payment or allowance necessary to adjust Tenant's estimated payments, if any, to
Tenant's actual proportionate shares as shown by the annual statement.  If
Tenant has not made estimated payments during the Expense Recovery Period, any
amount owing by Tenant pursuant to subsection (a) above shall be paid to
Landlord in accordance with Article XVI.  If actual Property Taxes or Building
Costs allocable to Tenant during any Expense Recovery Period are less than the
Property Tax Base or the Building Cost Base, respectively, Landlord shall not be
required to pay that differential to Tenant, although Landlord shall refund any
applicable estimated payments collected from Tenant.  Should Tenant fail to
object in writing to Landlord's determination of actual Operating Expenses
within sixty (60) days following delivery of Landlord's expense statement,
Landlord's determination of actual Operating Expenses for the applicable Expense
Recovery Period shall be conclusive and binding on Tenant.

          (d) Even though the Lease has terminated and the Tenant has vacated
the Premises, when the final determination is made of Tenant's share of Property
Taxes and Building Costs for the Expense Recovery Period in which the Lease
terminates, Tenant shall upon notice pay the entire increase due over the
estimated expenses paid; conversely, any overpayment made in the event expenses
decrease shall be rebated by Landlord to Tenant.  However, in lieu thereof,
Landlord may deliver a reasonable estimate of the anticipated reconciliation
amount to Tenant prior to the expiration of the Term, in which event the
appropriate party shall fund that amount by the termination date.

          (e) If, at any time during any Expense Recovery Period, any one or
more of the Operating Expenses are increased to a rate(s) or amount(s) in excess
of the rate(s) or amount(s) used in calculating the estimated expenses for the
year, then Tenant's estimated share of Property Taxes or Building Costs, as
applicable, shall be increased for the month in which the increase becomes
effective and for all succeeding months by an amount equal to Tenant's
proportionate share of the increase.  Landlord shall give Tenant written notice
of the amount or estimated amount of the increase, the month in which the
increase will become effective, Tenant's monthly share thereof and the months
for which the payments are due.  Tenant shall pay the increase to Landlord as a
part of Tenant's monthly payments of estimated expenses as provided in paragraph
(b) above, commencing with the month in which effective.

          (f) The term "Building Costs" shall include all expenses of operation
and maintenance of the Building and the Project, together with all appurtenant
Common Areas (as defined in Section 6.2), and shall include the following
charges by way of illustration but not limitation:  water and sewer charges;
insurance premiums or reasonable premium equivalents should Landlord elect to
self-insure any risk or deductible that Landlord is authorized to insure
hereunder; license, permit, and inspection fees; heat; light; power; janitorial
services; repairs; air conditioning; supplies; materials; equipment; tools;
tenant services; programs instituted to comply with transportation management
requirements; amortization of capital investments reasonably intended to produce
a reduction in operating charges or energy conservation; amortization of capital
investments necessary to bring the Building into compliance with applicable laws
and building codes enacted subsequent to the completion of construction of the
Building; labor; reasonably allocated wages and salaries, fringe benefits, and
payroll taxes for administrative and other personnel directly applicable to the
Building and/or Project, including both Landlord's personnel and outside
personnel; any expense incurred pursuant to Sections 6.1, 6.2, 6.4, 7.2, and
10.2 and Exhibits B and C below; and a reasonable overhead/management fee.  It
is understood that

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Building Costs shall include competitive charges for direct services provided by
any subsidiary or division of Landlord.  The term "Property Taxes" as used
herein shall include the following:  (i) all real estate taxes or personal
property taxes, as such property taxes may be reassessed from time to time; and
(ii) other taxes, documentary transfer fees, charges and assessments which are
levied with respect to this Lease or to the Building and/or the Project, and any
improvements, fixtures and equipment and other property of Landlord located in
the Building and/or the Project, except that general net income and franchise
taxes imposed against Landlord shall be excluded; and (iii) any tax, surcharge
or assessment which shall be levied in addition to or in lieu of real estate or
personal property taxes, other than taxes covered by Article VIII; and (iv)
costs and expenses incurred in contesting the amount or validity of any Property
Tax by appropriate proceedings.  A copy of Landlord's unaudited statement of
expenses shall be made available to Tenant upon request.  The Building Costs may
be extrapolated by Landlord to reflect at least ninety-five percent (95%)
occupancy of the rentable area of the Building.

          (g) Notwithstanding the foregoing, Landlord hereby agrees that Tenant
shall not be obligated to reimburse Landlord for Operating Expenses accruing
during the initial twelve (12) month Lease Term.

     SECTION 4.3.  SECURITY DEPOSIT.  Concurrently with Tenant's delivery of
this Lease, Tenant shall deposit with Landlord the sum, if any, stated in Item 9
of the Basic Lease Provisions (the "Security Deposit"), to be held by Landlord
as security for the full and faithful performance of Tenant's obligations under
this Lease to pay any rent as and when due, including without limitation such
additional rent as may be owing under any provision hereof, and to maintain the
Premises as required by Sections 7.1 and 15.3 or any other provision of this
Lease.  Upon any breach of those obligations by Tenant, Landlord may apply all
or part of the Security Deposit as full or partial compensation.  If any portion
of the Security Deposit is so applied, Tenant shall within five (5) days after
written demand by Landlord deposit cash with Landlord in an amount sufficient to
restore the Security Deposit to its original amount.  Landlord shall not be
required to keep this Security Deposit separate from its general funds, and
Tenant shall not be entitled to interest on the Security Deposit.  In no event
may Tenant utilize all or any portion of the Security Deposit as a payment
toward any rental sum due under this Lease.  If Tenant fully performs its
obligations under this Lease, the Security Deposit or any balance thereof shall
be returned to Tenant or, at Landlord's option, to the last assignee of Tenant's
interest in this Lease.

                               ARTICLE V. USES

     SECTION 5.1.  USE.  Tenant shall use the Premises only for the purposes
stated in Item 3 of the Basic Lease Provisions.  The parties agree that any
contrary use shall be deemed to cause material and irreparable harm to Landlord
and shall entitle Landlord to injunctive relief in addition to any other
available remedy.  Tenant shall not do or permit anything to be done in or about
the Premises which will in any way interfere with the rights or quiet enjoyment
of other occupants of the Building or the Project, or use or allow the Premises
to be used for any  unlawful  purpose, nor shall Tenant permit any nuisance or
commit any waste in the Premises or the Project.  Tenant shall not allow
occupancy of the Premises (exclusive of transient visitors) at a level in excess
of four persons per one thousand usable square feet of the Premises.  Tenant
shall not do or permit to be done anything which will invalidate or increase the
cost of any insurance policy(ies) covering the Building, the Project and/or
their contents, and shall comply with all applicable insurance underwriters
rules.  Tenant shall comply at its expense with all present and future laws,
ordinances and requirements of all governmental authorities that pertain to
Tenant or its use of the Premises, including without limitation all federal and
state occupational health and safety and handicap access requirements, whether
or not Tenant's compliance will necessitate expenditures or interfere with its
use and enjoyment of the Premises.  Tenant shall not generate, handle, store or
dispose of hazardous or toxic materials (as such materials may be identified in
any federal, state or local law or regulation) in the Premises or Project
without the prior written consent of Landlord; provided that the foregoing shall
not be deemed to proscribe the use by Tenant of customary office supplies in
normal quantities so long as such use comports with all applicable laws.  Tenant
agrees that it shall promptly complete and deliver to Landlord any disclosure
form regarding hazardous or toxic materials that may be required by any
governmental agency.  Tenant shall also, from time to time upon request by
Landlord, execute such affidavits concerning Tenant's best knowledge and belief
regarding the presence of hazardous or toxic materials in the Premises.
Landlord shall have the right at any time to perform an assessment of the
environmental condition of the Premises and of Tenant's compliance with this
Section. As part of any such assessment, Landlord shall have the right, upon
reasonable prior notice to Tenant, to enter and inspect the Premises and to
perform tests, provided those tests are performed in a manner that minimizes
disruption to Tenant. Tenant will cooperate with Landlord in connection with any
assessment by, among other things, promptly responding to inquiries and
providing relevant documentation and records. The reasonable cost of the
assessment/testing shall be reimbursed by Tenant to Landlord if such
assessment/testing determines that Tenant failed to comply with the requirements
of this Section. In all events Tenant shall indemnify Landlord in the manner
elsewhere provided in this Lease from any release of hazardous or toxic
materials caused by Tenant, its agents,

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employees, contractors, subtenants or licensees. The foregoing covenants shall
survive the expiration or earlier termination of this Lease.

     SECTION 5.2.  SIGNS.  Landlord shall, upon request by Tenant and at
Tenant's expense, affix and maintain a sign (restricted solely to Tenant's name
as set forth herein or such other name as Landlord may consent to in writing)
adjacent to the entry door of the Premises, together with a directory strip in
any applicable lobby directory of the Building.  The signage shall conform to
the criteria for signs established by Landlord and shall be ordered through
Landlord.  Tenant shall not place or allow to be placed any other sign,
decoration or advertising matter of any kind that is visible from the exterior
of the Premises.  Any violating sign or decoration may be immediately removed by
Landlord at Tenant's expense without notice and without the removal constituting
a breach of this Lease or entitling Tenant to claim damages.

                        ARTICLE VI.  LANDLORD SERVICES

     SECTION 6.1.  UTILITIES AND SERVICES.  Landlord shall furnish to the
Premises the utilities and services described in Exhibit B, subject to the
conditions and payment obligations and standards set forth in this Lease.
Landlord shall not be liable for any failure to furnish any services or
utilities when the failure is the result of any accident or other cause beyond
Landlord's reasonable control, nor shall Landlord be liable for damages
resulting from power surges or any breakdown in telecommunications facilities or
services.  Landlord's temporary inability to furnish any services or utilities
shall not entitle Tenant to any damages, relieve Tenant of the obligation to pay
rent or constitute a constructive or other eviction of Tenant, except that
Landlord shall diligently attempt to restore the service or utility promptly.
Tenant shall comply with all rules and regulations which Landlord may reasonably
establish for the provision of services and utilities, and shall cooperate with
all reasonable conservation practices established by Landlord.  Landlord shall
at all reasonable times have free access to all electrical and mechanical
installations of Landlord.

     SECTION 6.2.  OPERATION AND MAINTENANCE OF COMMON AREAS.  During the Term,
Landlord shall operate all Common Areas within the Building and the Project.
The term "Common Areas" shall mean all areas within the Building and other
buildings in the Project which are not held for exclusive use by persons
entitled to occupy space, and all other appurtenant areas and improvements
provided by Landlord for the common use of Landlord and tenants and their
respective employees and invitees, including without limitation parking areas
and structures, driveways, sidewalks, landscaped and planted areas, hallways and
interior stairwells not located within the premises of any tenant, common
entrances and lobbies, elevators, and restrooms not located within the premises
of any tenant.

     SECTION 6.3.  USE OF COMMON AREAS.  The occupancy by Tenant of the Premises
shall include the use of the Common Areas in common with Landlord and with all
others for whose convenience and use the Common Areas may be provided by
Landlord, subject, however, to compliance with all rules and regulations as are
prescribed from time to time by Landlord.  Landlord shall at all times during
the Term have exclusive control of the Common Areas, and may restrain or permit
any use or occupancy, except as otherwise provided in this Lease or in
Landlord's rules and regulations.  Tenant shall keep the Common Areas clear of
any obstruction or unauthorized use related to Tenant's operations.  Landlord
may temporarily close any portion of the Common Areas for repairs, remodeling
and/or alterations, to prevent a public dedication or the accrual of
prescriptive rights, or for any other reasonable purpose.

     SECTION 6.4.  PARKING.  Parking  shall be provided in accordance with the
provisions set forth in Exhibit C to this Lease.

     SECTION 6.5.  CHANGES AND ADDITIONS BY LANDLORD.  Landlord reserves the
right to make alterations or additions to the Building or the Project, or to the
attendant fixtures, equipment and Common Areas.  No change shall entitle Tenant
to any abatement of rent or other claim against Landlord, provided that the
change does not deprive Tenant of reasonable access to or use of the Premises.

                    ARTICLE VII.  MAINTAINING THE PREMISES

     SECTION 7.1.  TENANT'S MAINTENANCE AND REPAIR.  Subject to Article XI,
Tenant at its sole expense shall make all repairs necessary to keep the Premises
and all improvements and fixtures therein in the condition as existed on the
Commencement Date (or on any later date that the applicable improvements may
have been installed), excepting ordinary wear and tear.  Notwithstanding Section
7.2 below, Tenant's maintenance obligation shall include without limitation all
appliances, non-building standard lighting/electrical systems, and plumbing
fixtures and installations located within or servicing only the Premises.  All
repairs shall be at least equal in quality to the original work, shall be made
only by a licensed, bonded contractor approved in writing in advance by Landlord
and shall be made only at the time or times approved by Landlord.  Any
contractor utilized by Tenant shall be subject to Landlord's standard

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requirements for contractors, as modified from time to time.  Landlord may
impose reasonable restrictions and requirements with respect to repairs, as
provided in Section 7.3, and the provisions of Section 7.4 shall apply to all
repairs.  Alternatively, should Landlord or its management agent agree to make a
repair on behalf of Tenant and at Tenant's request, Tenant shall promptly
reimburse Landlord as additional rent for all costs incurred (including the
standard coordination fee of Landlord's management agent) upon submission of an
invoice.

     SECTION 7.2.  LANDLORD'S MAINTENANCE AND REPAIR.   Subject to Article XI,
Landlord shall provide service, maintenance and repair  with respect to the
heating, ventilating and air conditioning ("HVAC") equipment of the Building
(exclusive of any supplemental HVAC equipment servicing only the Premises) and
shall maintain in good repair the Common Areas, roof, foundations, footings, the
exterior surfaces of the exterior walls of the Building, and the structural,
electrical, mechanical and plumbing systems of the Building except as provided
in Section 7.1 above.  Landlord shall have the right to employ or designate any
reputable person or firm, including any employee or agent of Landlord or any of
Landlord's affiliates or divisions, to perform any service, repair or
maintenance function.  Landlord need not make any other improvements or repairs
except as specifically required under this Lease, and nothing contained in this
Section shall limit Landlord's right to reimbursement from Tenant for
maintenance, repair costs and replacement costs as provided elsewhere in this
Lease.  Tenant understands that it shall not make repairs at Landlord's expense
or by rental offset.  Except as provided in Sections 11.1 and 12.1 below, there
shall be no abatement of rent and no liability of Landlord by reason of any
injury to or interference with Tenant's business arising from the making of any
repairs, alterations or improvements to any portion of the Building, including
repairs to the Premises, nor shall any related activity by Landlord constitute
an actual or constructive eviction; provided, however, that in making repairs,
alterations or improvements, Landlord shall interfere as little as reasonably
practicable with the conduct of Tenant's business in the Premises.

     SECTION 7.3.  ALTERATIONS.  Tenant shall make no alterations, additions or
improvements to the Premises without the prior written consent of Landlord.
Landlord's consent shall not be unreasonably withheld as long as the proposed
changes do not affect the structural, electrical or mechanical components or
systems of the Building, are not visible from the exterior of the Premises, and
utilize only building standard materials.  Landlord may impose, as a condition
to its consent, any requirements that Landlord in its discretion may deem
reasonable or desirable, including but not limited to a requirement that all
work be covered by a lien and completion bond satisfactory to Landlord and
requirements as to the manner, time, and contractor for performance of the work.
Without limiting the generality of the foregoing, Tenant shall use Landlord's
designated mechanical and electrical contractors for all work affecting the
mechanical or electrical systems of the Building.  Should Tenant perform any
work that would necessitate any ancillary Building modification or other
expenditure by Landlord, then Tenant shall promptly fund the cost thereof to
Landlord.  Tenant shall obtain all required permits for the work and shall
perform the work in compliance with all applicable laws, regulations and
ordinances, and Landlord shall be entitled to a supervision fee in the amount of
five percent (5%) of the cost of the work.  Under no circumstances shall Tenant
make any improvement which incorporates asbestos-containing construction
materials into the Premises.  Any request for Landlord's consent shall be made
in writing and shall contain architectural plans describing the work in detail
reasonably satisfactory to Landlord.  Landlord may elect to cause its architect
to review Tenant's architectural plans, and the reasonable cost of that review
shall be reimbursed by Tenant.  Should the work proposed by Tenant modify the
internal configuration of the Premises, then Tenant shall, at its expense,
furnish Landlord with as-built drawings and CADD disks compatible with
Landlord's systems.  Unless Landlord otherwise agrees in writing, all
alterations, additions or improvements affixed to the Premises (excluding
moveable trade fixtures and furniture) shall become the property of Landlord and
shall be surrendered with the Premises at the end of the Term, except that
Landlord may, by notice to Tenant given at the time of Landlord's consent to the
alteration or improvement, require Tenant to remove by the Expiration Date, or
sooner termination date of this Lease, all or any alterations, decorations,
fixtures, additions, improvements and the like installed either by Tenant or by
Landlord at Tenant's request and to repair any damage to the Premises arising
from that removal.  Landlord may require Tenant to remove an improvement
provided as part of the initial build-out pursuant to Exhibit X, if any, if and
only if the improvement is a non-building standard item and Tenant is notified
of the requirement prior to the build-out. Except as otherwise provided in this
Lease or in any Exhibit to this Lease, should Landlord make any alteration or
improvement to the Premises at the request of Tenant, Landlord shall be entitled
to prompt payment from Tenant of the cost thereof, inclusive of the standard
coordination fee of Landlord's management agent.

     SECTION 7.4.  MECHANIC'S LIENS.  Tenant shall keep the Premises free from
any liens arising out of any work performed, materials furnished, or obligations
incurred by or for Tenant.  Upon request by Landlord, Tenant shall promptly
cause any such lien to be released by posting a bond in accordance with
California Civil Code Section 3143 or any successor statute.  In the event that
Tenant shall not, within thirty (30) days following the imposition of any lien,
cause the lien to be released of record by payment or posting of a proper bond,
Landlord shall have, in addition to all other available remedies, the right to
cause the lien to be released by any means it deems proper, including payment of
or defense against the claim giving rise to the lien.  All expenses so incurred
by Landlord, including Landlord's attorneys' fees, shall be reimbursed by Tenant
promptly following Landlord's demand, together with interest from the date of
payment by Landlord at the maximum rate permitted by law until paid.  Tenant
shall give Landlord no less than twenty (20) days' prior notice in writing
before commencing construction of any kind on the Premises so that Landlord may
post and maintain notices of nonresponsibility on the Premises.

     SECTION 7.5.  ENTRY AND INSPECTION.  Landlord shall at all reasonable times
have the right to enter the Premises to inspect them, to supply services in
accordance with this Lease, to protect the interests of Landlord in the
Premises, to make repairs and renovations as reasonably deemed

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necessary by Landlord, and to submit the Premises to prospective or actual
purchasers or encumbrance holders (or, during the final twelve months of the
Term or when an uncured Tenant default exists, to prospective tenants), all
without being deemed to have caused an eviction of Tenant and without abatement
of rent except as provided elsewhere in this Lease.  Landlord shall at all times
have and retain a key which unlocks all of the doors in the Premises, excluding
Tenant's vaults and safes, and Landlord shall have the right to use any and all
means which Landlord may deem proper to open the doors in an emergency in order
to obtain entry to the Premises, and any entry to the Premises obtained by
Landlord shall not under any circumstances be deemed to be a forcible or
unlawful entry into, or a detainer of, the Premises, or any eviction of Tenant
from the Premises.

     SECTION 7.6.  SPACE PLANNING AND SUBSTITUTION.  Landlord shall have the
right, upon providing not less than forty-five (45) days written notice, to move
Tenant to other space of comparable size in the Building or in the Project.  The
new space shall be provided with improvements of comparable quality to those
within the Premises.  Landlord shall pay the reasonable out-of-pocket costs to
relocate and reconnect Tenant's personal property and equipment within the new
space; provided that Landlord may elect to cause such work to be done by its
contractors.  Landlord shall also reimburse Tenant for such other reasonable
out-of-pocket costs that Tenant may incur in connection with the relocation,
including without limitation necessary stationery revisions, provided that a
reasonable estimate thereof is given to Landlord within twenty (20) days
following Landlord's notice.  In no event, however, shall Landlord be obligated
to incur or fund total relocation costs, exclusive of tenant improvement
expenditures, in an amount in excess of two (2) months of Basic Rent at the rate
then payable hereunder.  Within ten (10) days following request by Landlord,
Tenant shall execute an amendment to this Lease prepared by Landlord to
memorialize the relocation.  Should Tenant fail timely to execute and deliver
the amendment to Landlord for any reason (including without limitation the
inability of the parties to reach an agreement on the proposed relocation), or
should Tenant thereafter fail to comply with the terms thereof, then Landlord
may at its option elect to terminate this Lease upon not less than ninety (90)
days prior written notice to Tenant.  In the event of such termination, Tenant's
obligation to pay Basic Rent during the final two (2) months of the Term shall
be waived.  Upon the effective date of any termination of this Lease, Tenant
shall vacate the Premises in accordance with Section 15.3.

           ARTICLE VIII.  TAXES AND ASSESSMENTS ON TENANT'S PROPERTY

     Tenant shall be liable for and shall pay before delinquency, all taxes and
assessments levied against all personal property of Tenant located in the
Premises.  When possible Tenant shall cause its personal property to be assessed
and billed separately from the real property of which the Premises form a part.
If any taxes on Tenant's personal property are levied against Landlord or
Landlord's property and if Landlord pays the same, or if the assessed value of
Landlord's property is increased by the inclusion of a value placed upon the
personal property of Tenant and if Landlord pays the taxes based upon the
increased assessment, Tenant shall pay to Landlord the taxes so levied against
Landlord or the proportion of the taxes resulting from the increase in the
assessment.

                    ARTICLE IX.  ASSIGNMENT AND SUBLETTING

     SECTION 9.1.  RIGHTS OF PARTIES.

          (a) Tenant may not, either voluntarily or by operation of law, assign,
sublet, encumber, or otherwise transfer all or any part of Tenant's interest in
this Lease, or permit the Premises to be occupied by anyone other than Tenant,
without Landlord's prior written consent, which consent shall not unreasonably
be withheld in accordance with the provisions of Section 9.1.(c). For purposes
of this Lease, references to any subletting, sublease or variation thereof shall
be deemed to apply not only to a sublease effected directly by Tenant, but also
to a sub-subletting or an assignment of subtenancy by a subtenant at any level.
No assignment (whether voluntary, involuntary or by operation of law) and no
subletting shall be valid or effective without Landlord's prior written consent
and, at Landlord's election, shall constitute a material default of this Lease.
Landlord shall not be deemed to have given its consent to any assignment or
subletting by any other course of action, including its acceptance of any name
for listing in the Building directory. To the extent not prohibited by
provisions of the Bankruptcy Code, 11 U.S.C. Section 101 et seq. (the
"Bankruptcy Code"), including Section 365(f)(1), Tenant on behalf of itself and
its creditors, administrators and assigns waives the applicability of Section
365(e) of the Bankruptcy Code unless the proposed assignee of the Trustee for
the estate of the bankrupt meets Landlord's standard for consent as set forth in
Section 9.1(c) of this Lease. If this Lease is assigned to any person or entity
pursuant to the provisions of the Bankruptcy Code, any and all monies or other
considerations to be delivered in connection with the assignment shall be
delivered to Landlord, shall be and remain the exclusive property of Landlord
and shall not constitute property of Tenant or of the estate of Tenant within
the meaning of the Bankruptcy Code. Any person or entity to which this Lease is
assigned pursuant to the provisions of the Bankruptcy Code shall be deemed to
have assumed all of the obligations arising under this Lease on and after the
date of the assignment, and shall upon demand execute and deliver to Landlord an
instrument confirming that assumption.

          (b) If Tenant is a corporation, limited liability company,
unincorporated association or partnership, the transfer of any stock or interest
in the entity which results in a change in voting control shall be deemed an
assignment within the meaning and provisions of this Article.  In addition, any
change in the status of the entity, such as, but not limited to, the withdrawal
of a general partner, shall be deemed an assignment within the meaning of this
Article.

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<PAGE>

          (c) If Tenant or any subtenant hereunder desires to transfer an
interest in this Lease, Tenant shall first notify Landlord and request in
writing Landlord's consent to the transfer.  Tenant shall also submit in writing
to Landlord:  (i) the name and address of the proposed transferee; (ii) the
nature of any proposed subtenant's or assignee's business to be carried on in
the Premises; (iii) the terms and provisions of any proposed sublease or
assignment; (iv) evidence that the proposed assignee or subtenant will comply
with the requirements of Exhibit D to this Lease; and (v) any other information
requested by Landlord and reasonably related to the transfer.  Except as
provided in Subsection (d) of this Section, Landlord shall not unreasonably
withhold its consent, provided:  (1) the use of the Premises will be consistent
with the provisions of this Lease and with Landlord's commitment to other
tenants of the Building and Project; (2) any proposed subtenant or assignee
demonstrates that it is financially responsible by submission to Landlord of all
reasonable information as Landlord may request concerning the proposed subtenant
or assignee, including, but not limited to, a balance sheet of the proposed
subtenant or assignee as of a date within ninety (90) days of the request for
Landlord's consent and statements of income or profit and loss of the proposed
subtenant or assignee for the two-year period preceding the request for
Landlord's consent; (3) any proposed subtenant or assignee demonstrates to
Landlord's reasonable satisfaction a record of successful experience in
business; (4) the proposed assignee or subtenant is neither an existing tenant
of the Building or Project nor a prospective tenant with whom Landlord is then
actively negotiating; and (5) the proposed transfer will not impose additional
burdens or adverse tax effects on Landlord.  If Landlord consents to the
proposed transfer, then the transfer may be effected within ninety (90) days
after the date of the consent upon the terms described in the information
furnished to Landlord; provided that any material change in the terms shall be
subject to Landlord's consent as set forth in this Section.  Landlord shall
approve or disapprove any requested transfer within thirty (30) days following
receipt of Tenant's written notice and the information set forth above.  Tenant
shall pay to Landlord a transfer fee of Five Hundred Dollars ($500.00) if and
when any transfer request submitted by Tenant is approved.

          (d) Notwithstanding the provisions of Subsection (c) above, in lieu of
consenting to a proposed assignment or subletting, Landlord may elect to (i)
sublease the Premises (or the portion proposed to be subleased), or take an
assignment of Tenant's interest in this Lease, upon the same terms as offered to
the proposed subtenant or assignee (excluding terms relating to the purchase of
personal property, the use of Tenant's name or the continuation of Tenant's
business), or (ii) terminate this Lease as to the portion of the Premises
proposed to be subleased or assigned with a proportionate abatement in the rent
payable under this Lease, effective on the date that the proposed sublease or
assignment would have become effective.  Landlord may thereafter, at its option,
assign or re-let any space so recaptured to any third party, including without
limitation the proposed transferee identified by Tenant.

          (e) Should any assignment or subletting occur, Tenant shall promptly
pay or cause to be paid to Landlord, as additional rent, seventy-five percent
(75%) of any amounts paid by the assignee or subtenant, however described and
whether funded during or after the Lease Term, to the extent such amounts are in
excess of the sum of (i) the Basic Rent payable by Tenant hereunder (or, in the
event of a subletting of only a portion of the Premises, the Basic Rent
allocable to such portion as reasonably determined by Landlord) and (ii) the
direct out-of-pocket costs, as evidence by third party invoices provided to
Landlord, incurred by Tenant to effect the transfer, which costs shall be
amortized over the remaining Term of this Lease or, if shorter, over the term of
the sublease.  Upon request by Landlord, Tenant and all other parties to the
transfer shall memorialize in writing the amounts to be paid pursuant to this
paragraph.

     SECTION 9.2.  EFFECT OF TRANSFER.  No subletting or assignment, even with
the consent of Landlord, shall relieve Tenant, or any successor-in-interest to
Tenant hereunder, of its obligation to pay rent and to perform all its other
obligations under this Lease.  Moreover, Tenant shall indemnify and hold
Landlord harmless, as provided in Section 10.3, for any act or omission by an
assignee or subtenant. Each assignee, other than Landlord, shall be deemed to
assume all obligations of Tenant under this Lease and shall be liable jointly
and severally with Tenant for the payment of all rent, and for the due
performance of all of Tenant's obligations, under this Lease.  Such joint and
several liability shall not be discharged or impaired by any subsequent
modification or extension of this Lease.  No transfer shall be binding on
Landlord unless any document memorializing the transfer is delivered to Landlord
and both the assignee/subtenant and Tenant deliver to Landlord an executed
consent to transfer instrument prepared by Landlord and consistent with the
requirements of this Article.  The acceptance by Landlord of any payment due
under this Lease from any other person shall not be deemed to be a waiver by
Landlord of any provision of this Lease or to be a consent to any transfer.
Consent by Landlord to one or more transfers shall not operate as a waiver or
estoppel to the future enforcement by Landlord of its rights under this Lease.
In addition to the foregoing, no change in the status of Tenant or any party
jointly and severally liable with Tenant as aforesaid (e.g., by conversion to a
limited liability company or partnership) shall serve to abrogate the liability
of any person or entity for the obligations of Tenant, including any obligations
that may be incurred by Tenant after the status change by exercise of a pre-
existing right in this Lease.

     SECTION 9.3.  SUBLEASE REQUIREMENTS.  The following terms and conditions
shall apply to any subletting by Tenant of all or any part of the Premises and
shall be included in each sublease:

          (a) Tenant hereby irrevocably assigns to Landlord all of Tenant's
interest in all rentals and income arising from any sublease of the Premises,
and Landlord may collect such rent and income and apply same toward Tenant's
obligations under this Lease; provided, however, that until a default occurs in
the performance of Tenant's obligations under this Lease, Tenant shall have the
right to receive and collect the sublease rentals.  Landlord shall not, by
reason of this assignment or the collection of sublease rentals, be deemed
liable to the subtenant for the performance of any of Tenant's obligations under
the sublease.  Tenant hereby irrevocably authorizes and directs any subtenant,
upon receipt of a written notice from Landlord stating that an uncured default
exists in the performance of Tenant's

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<PAGE>

obligations under this Lease, to pay to Landlord all sums then and thereafter
due under the sublease.  Tenant agrees that the subtenant may rely on that
notice without any duty of further inquiry and notwithstanding any notice or
claim by Tenant to the contrary.  Tenant shall have no right or claim against
the subtenant or Landlord for any rentals so paid to Landlord.  In the event
Landlord collects amounts from subtenants that exceed the total amount then due
from Tenant hereunder, Landlord shall promptly remit the excess to Tenant.

          (b) In the event of the termination of this Lease, Landlord may, at
its sole option, take over Tenant's entire interest in any sublease and, upon
notice from Landlord, the subtenant shall attorn to Landlord.  In no event,
however, shall Landlord be liable for any previous act or omission by Tenant
under the sublease or for the return of any advance rental payments or deposits
under the sublease that have not been actually delivered to Landlord, nor shall
Landlord be bound by any sublease modification executed without Landlord's
consent or for any advance rental payment by the subtenant in excess of one
month's rent.  The general provisions of this Lease, including without
limitation those pertaining to insurance and indemnification, shall be deemed
incorporated by reference into the sublease despite the termination of this
Lease.

          (c) Tenant agrees that Landlord may, at its sole option, authorize a
subtenant of the Premises to cure a default by Tenant under this Lease.  Should
Landlord accept such cure, the subtenant shall have a right of reimbursement and
offset from and against Tenant under the applicable sublease.

                      ARTICLE X.  INSURANCE AND INDEMNITY

     SECTION 10.1.  TENANT'S INSURANCE.  Tenant, at its sole cost and expense,
shall provide and maintain in effect the insurance described in Exhibit D.
Evidence of that insurance must be delivered to Landlord prior to the
Commencement Date.

     SECTION 10.2.  LANDLORD'S INSURANCE.  Landlord may, at its election,
provide any or all of the following types of insurance, with or without
deductible and in amounts and coverages as may be determined by Landlord in its
discretion:  "all risk" property insurance, subject to standard exclusions,
covering the Building or Project, and such other risks as Landlord or its
mortgagees may from time to time deem appropriate, and commercial general
liability coverage.  Landlord shall not be required to carry insurance of any
kind on improvements, trade fixtures, furnishings, equipment, interior plate
glass, signs and all items of personal property in the Premises, and shall not
be obligated to repair or replace that property should damage occur.  All
proceeds of insurance maintained by Landlord upon the Building and Project shall
be the property of Landlord, whether or not Landlord is obligated to or elects
to make any repairs.

     SECTION 10.3.  TENANT'S INDEMNITY.  To the fullest extent permitted by law,
Tenant shall defend, indemnify and hold harmless Landlord, its agents, lenders,
and any and all affiliates of Landlord,  from and against any and all claims,
liabilities, costs or expenses arising either before or after the Commencement
Date from Tenant's use or occupancy of the Premises, the Building or the Common
Areas, or from the conduct of its business, or from any activity, work, or thing
done, permitted or suffered by Tenant or its agents, employees, subtenants,
vendors, contractors, invitees or licensees in or about the Premises, the
Building or the Common Areas, or from any default in the performance of any
obligation on Tenant's part to be performed under this Lease, or from any act or
negligence of Tenant or its agents, employees, subtenants, vendors, contractors,
invitees or licensees. Landlord may, at its option, require Tenant to assume
Landlord's defense in any action covered by this Section through counsel
reasonably satisfactory to Landlord.

     SECTION 10.4.  LANDLORD'S NONLIABILITY.  Landlord shall not be liable to
Tenant, its employees, agents and invitees, and Tenant hereby waives all claims
against Landlord, its employees and agents for loss of or damage to any
property, or any injury to any person, or loss or interruption of business or
income, resulting from any condition including, but not limited to, fire,
explosion, falling plaster, steam, gas, electricity, 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 the pipes, sprinklers, wires,
appliances, plumbing, air conditioning, electrical works or other fixtures in
the Building, whether the damage or injury results from conditions arising in
the Premises or in other portions of the Building.  It is understood that any
such condition may require the temporary evacuation or closure of all or a
portion of the Building.  Should Tenant elect to receive any service from a
concessionaire, licensee or third party tenant of Landlord, Tenant shall not
seek recourse against Landlord for any breach or liability of that service
provider.  Neither Landlord nor its agents shall be liable for interference with
light or other similar intangible interests.  Tenant shall immediately notify
Landlord in case of fire or accident in the Premises, the Building or the
Project and of defects in any improvements or equipment.

                      ARTICLE XI.  DAMAGE OR DESTRUCTION

     SECTION 11.1.  RESTORATION.

          (a) If the Building of which the Premises are a part is damaged as the
result of an event of casualty, then subject to the provisions below, Landlord
shall repair that damage as soon as reasonably possible unless:  (i) Landlord
reasonably determines that the cost of repair would exceed ten percent (10%) of
the full replacement cost of the Building ("Replacement Cost") and the damage is
not

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<PAGE>

covered by Landlord's fire and extended coverage insurance (or by a normal
extended coverage policy should Landlord fail to carry that insurance); or (ii)
Landlord reasonably determines that the cost of repair would exceed twenty-five
percent (25%) of the Replacement Cost; or (iii) Landlord reasonably determines
that the cost of repair would exceed ten percent (10%) of the Replacement Cost
and the damage occurs during the final twelve (12) months of the Term.  Should
Landlord elect not to repair the damage for one of the preceding reasons,
Landlord shall so notify Tenant in the "Casualty Notice" (as defined below), and
this Lease shall terminate as of the date of delivery of that notice.

          (b) As soon as reasonably practicable following the casualty event but
not later than sixty (60) days thereafter, Landlord shall notify Tenant in
writing ("Casualty Notice") of Landlord's election, if applicable, to terminate
this Lease.  If this Lease is not so terminated, the Casualty Notice shall set
forth the anticipated period for repairing the casualty damage.  If the
anticipated repair period exceeds two hundred seventy (270) days and if the
damage is so extensive as to reasonably prevent Tenant's substantial use and
enjoyment of the Premises, then Tenant may elect to terminate this Lease by
written notice to Landlord within ten (10) days following delivery of the
Casualty Notice.

          (c) To the extent and for the period that Landlord is entitled to
reimbursement from the proceeds of rental interruption insurance carried by
Landlord as part of Operating Expenses, the rental to be paid under this Lease
shall be abated in the same proportion that the floor area of the Premises that
is rendered unusable by the damage from time to time bears to the total floor
area of the Premises.

          (d) Notwithstanding the provisions of subsections (a), (b) and (c) of
this Section, the cost of  any repairs shall be borne by Tenant, and Tenant
shall not be entitled to rental abatement or termination rights, if the damage
is due to the fault or neglect of Tenant or its employees, subtenants,
contractors, invitees or representatives.  In addition, the provisions of this
Section shall not be deemed to require Landlord to repair any improvements,
fixtures and other items that Tenant is obligated to repair or insure pursuant
to Article VII, Exhibit D, or any other provision of this Lease; provided,
however, that if and to the extent Landlord receives insurance proceeds for
damage to interior leasehold improvements, as reasonably determined by Landlord
after first applying any proceeds to damage in areas other than tenant suites,
then Landlord shall, subject to the rights of any mortgagee or ground lessor,
make those excess proceeds available for repair of the affected leasehold
improvements.

     SECTION 11.2.  LEASE GOVERNS.  Tenant agrees that the provisions of this
Lease, including without limitation Section 11.1, shall govern any damage or
destruction and shall accordingly supersede any contrary statute or rule of law.

                         ARTICLE XII.  EMINENT DOMAIN

     SECTION 12.1.  TOTAL OR PARTIAL TAKING.  If all or a material portion of
the Premises is taken by any lawful authority by exercise of the right of
eminent domain, or sold to prevent a taking, either Tenant or Landlord may
terminate this Lease effective as of the date possession is required to be
surrendered to the authority.  In the event title to a portion of the Building
or Project, other than the Premises, is taken or sold in lieu of taking, and if
Landlord elects to restore the  Building in such a way as to alter the Premises
materially, either party may terminate this Lease, by written notice to the
other party, effective on the date of vesting of title.  In the event neither
party has elected to terminate this Lease as provided above, then Landlord shall
promptly, after receipt of a sufficient condemnation award, proceed to restore
the Premises to substantially their condition prior to the taking, and a
proportionate allowance shall be made to Tenant for the rent corresponding to
the time during which, and to the part of the Premises of which, Tenant is
deprived on account of the taking and restoration.  In the event of a taking,
Landlord shall be entitled to the entire amount of the condemnation award
without deduction for any estate or interest of Tenant; provided that nothing in
this Section shall be deemed to give Landlord any interest in, or prevent Tenant
from seeking any award against the taking authority for, the taking of personal
property and fixtures belonging to Tenant or for relocation or business
interruption expenses recoverable from the taking authority.

     SECTION 12.2.  TEMPORARY TAKING.  No temporary taking of the Premises shall
terminate this Lease or give Tenant any right to abatement of rent, and any
award specifically attributable to a temporary taking of the Premises shall
belong entirely to Tenant.  A temporary taking shall be deemed to be a taking of
the use or occupancy of the Premises for a period of not to exceed ninety (90)
days.

     SECTION 12.3.  TAKING OF PARKING AREA.  In the event there shall be a
taking of the parking area such that Landlord can no longer provide sufficient
parking to comply with this Lease, Landlord may substitute reasonably equivalent
parking in a location reasonably close to the Building; provided that if
Landlord fails to make that substitution within ninety (90) days following the
taking and if the taking materially impairs Tenant's use and enjoyment of the
Premises, Tenant may, at its option, terminate this Lease by written notice to
Landlord.  If this Lease is not so terminated by Tenant, there shall be no
abatement of rent and this Lease shall continue in effect.

              ARTICLE XIII.  SUBORDINATION; ESTOPPEL CERTIFICATE

     SECTION 13.1.  SUBORDINATION.   At the option of Landlord or any of its
mortgagees/deed of trust beneficiaries, this Lease shall be either superior or
subordinate to all ground or underlying leases, mortgages and deeds of trust, if
any, which may hereafter affect the Building, and to all renewals,

                                      10
<PAGE>

modifications, consolidations, replacements and extensions thereof; provided,
that so long as Tenant is not in default under this Lease, this Lease shall not
be terminated or Tenant's quiet enjoyment of the Premises disturbed in the event
of termination of any such ground or underlying lease, or the foreclosure of any
such mortgage or deed of trust, to which this Lease has been subordinated
pursuant to this Section.  In the event of a termination or foreclosure, Tenant
shall become a tenant of and attorn to the successor-in-interest to Landlord
upon the same terms and conditions as are contained in this Lease, and shall
promptly execute any instrument reasonably required by Landlord's successor for
that purpose.  Tenant shall also, within ten (10) days following written request
of Landlord (or the beneficiary under any deed of trust encumbering the
Building), execute and deliver all instruments as may be required from time to
time by Landlord or such beneficiary (including without limitation any
subordination, nondisturbance and attornment agreement in the form customarily
required by such beneficiary) to subordinate this Lease and the rights of Tenant
under this Lease to any ground or underlying lease or to the lien of any
mortgage or deed of trust; provided, however, that any such beneficiary may, by
written notice to Tenant given at any time, subordinate the lien of its deed of
trust to this Lease.  Tenant shall agree that any purchaser at a foreclosure
sale or lender taking title under a deed in lieu of foreclosure shall not be
responsible for any act or omission of a prior landlord, shall not be subject to
any offsets or defenses Tenant may have against a prior landlord, and shall not
be liable for the return of any security deposit not actually recovered by such
purchaser or bound by any rent paid in advance of the calendar month in which
the transfer of title occurred; provided that the foregoing shall not release
the applicable prior landlord from any liability for those obligations.  Tenant
acknowledges that Landlord's mortgagees and successors-in-interest and all
beneficiaries under deeds of trust encumbering the Building are intended third
party beneficiaries of this Section.

     SECTION 13.2.  ESTOPPEL CERTIFICATE.     Tenant shall, within ten (10) days
following written notice from Landlord, execute, acknowledge and deliver to
Landlord, in any form that Landlord may reasonably require, a statement in
writing in favor of Landlord and/or any prospective purchaser or encumbrancer of
the Building (i) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of the modification and certifying
that this Lease, as modified, is in full force and effect) and the dates to
which the rental, additional rent and other charges have been paid in advance,
if any, and (ii) acknowledging that, to Tenant's knowledge, there are no uncured
defaults on the part of Landlord, or specifying each default if any are claimed,
and (iii) setting forth all further information that Landlord may reasonably
require.  Tenant's statement may be relied upon by any prospective purchaser or
encumbrancer of all or any portion of the Building or Project.  In addition to
Landlord's other rights and remedies, Tenant's failure to deliver any estoppel
statement within the provided time shall be conclusive upon Tenant that (i) this
Lease is in full force and effect, without modification except as may be
represented by Landlord, (ii) there are no uncured defaults in Landlord's
performance, and (iii) not more than one month's rental has been paid in
advance.

                      ARTICLE XIV.  DEFAULTS AND REMEDIES

     SECTION 14.1.  TENANT'S DEFAULTS.  In addition to any other event of
default set forth in this Lease, the occurrence of any one or more of the
following events shall constitute a default by Tenant:

          (a) The failure by Tenant to make any payment of rent required to be
made by Tenant, as and when due, where the failure continues for a period of
three (3) days after written notice from Landlord to Tenant; provided, however,
that any such notice shall be in lieu of, and not in addition to, any notice
required under California Code of Civil Procedure Section 1161 and 1161(a) as
amended.  For purposes of these default and remedies provisions, the term
"additional rent" shall be deemed to include all amounts of any type whatsoever
other than Basic Rent to be paid by Tenant pursuant to the terms of this Lease.

          (b) The assignment, sublease, encumbrance or other transfer of the
Lease by Tenant, either voluntarily or by operation of law, whether by judgment,
execution, transfer by intestacy or testacy, or other means, without the prior
written consent of Landlord unless otherwise authorized herein.

          (c) The discovery by Landlord that any financial statement provided by
Tenant, or by any affiliate, successor or guarantor of Tenant, was materially
false.

          (d) The failure or inability by Tenant to observe or perform any of
the  covenants or provisions of this Lease to be observed or performed by
Tenant, other than as specified in any other subsection of this Section, where
the failure continues for a period of thirty (30) days after written notice from
Landlord to Tenant; provided, however, that any such notice shall be in lieu of,
and not in addition to, any notice required under California Code of Civil
Procedure Section 1161 and 1161(a) as amended. However, if the nature of the
failure is such that more than thirty (30) days are reasonably required for its
cure, then Tenant shall not be deemed to be in default if Tenant commences the
cure within thirty (30) days, and thereafter diligently pursues the cure to
completion.

          (e) (i) The making by Tenant of any general assignment for the benefit
of creditors; (ii) the filing by or against Tenant of a petition to have Tenant
adjudged a Chapter 7 debtor under the Bankruptcy Code or to have debts
discharged or a petition for reorganization or arrangement under any law
relating to bankruptcy (unless, in the case of a petition filed against Tenant,
the same is dismissed within sixty (60) days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease, if possession is
not restored to Tenant within thirty (30) days; (iv) the attachment, execution
or other judicial seizure of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, where the

                                      11
<PAGE>

seizure is not discharged within thirty (30) days; or (v) Tenant's convening of
a meeting of its creditors for the purpose of effecting a moratorium upon or
composition of its debts.  Landlord shall not be deemed to have knowledge of any
event described in this subsection unless notification in writing is received by
Landlord, nor shall there be any presumption attributable to Landlord of
Tenant's insolvency.  In the event that any provision of this subsection is
contrary to applicable law, the provision shall be of no force or effect.

     SECTION 14.2.  LANDLORD'S REMEDIES.

          (a) In the event of any default by Tenant, then in addition to any
other remedies available to Landlord, Landlord may exercise the following
remedies:

              (i)  Landlord may terminate Tenant's right to possession of the
Premises by any lawful means, in which case this Lease shall terminate and
Tenant shall immediately surrender possession of the Premises to Landlord.  Such
termination shall not affect any accrued obligations of Tenant under this Lease.
Upon termination, Landlord shall have the right to reenter the Premises and
remove all persons and property.  Landlord shall also be entitled to recover
from Tenant:

                   (1) The worth at the time of award of the unpaid rent and
additional rent which had been earned at the time of termination;

                   (2) The worth at the time of award of the amount by which the
unpaid rent and additional rent which would have been earned after termination
until the time of award exceeds the amount of such loss that Tenant proves could
have been reasonably avoided;

                   (3) The worth at the time of award of the amount by which the
unpaid rent and additional rent for the balance of the Term after the time of
award exceeds the amount of such loss that Tenant proves could be reasonably
avoided;

                   (4) Any other amount necessary to compensate Landlord for all
the detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely to
result from Tenant's default, including, but not limited to, the cost of
recovering possession of the Premises, commissions and other expenses of
reletting, including necessary repair, renovation, improvement and alteration of
the Premises for a new tenant, reasonable attorneys' fees, and any other
reasonable costs; and

                   (5) At Landlord's election, all other amounts in addition to
or in lieu of the foregoing as may be permitted by law. The term "rent" as used
in this Lease shall be deemed to mean the Basic Rent and all other sums required
to be paid by Tenant to Landlord pursuant to the terms of this Lease. Any sum,
other than Basic Rent, shall be computed on the basis of the average monthly
amount accruing during the twenty-four (24) month period immediately prior to
default, except that if it becomes necessary to compute such rental before the
twenty-four (24) month period has occurred, then the computation shall be on the
basis of the average monthly amount during the shorter period. As used in
subparagraphs (1) and (2) above, the "worth at the time of award" shall be
computed by allowing interest at the rate of ten percent (10%) per annum. As
used in subparagraph (3) above, the "worth at the time of award" shall be
computed by discounting the amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%).

              (ii) Landlord may elect not to terminate Tenant's right to
possession of the Premises, in which event Landlord may continue to enforce all
of its rights and remedies under this Lease, including the right to collect all
rent as it becomes due. Efforts by the Landlord to maintain, preserve or relet
the Premises, or the appointment of a receiver to protect the Landlord's
interests under this Lease, shall not constitute a termination of the Tenant's
right to possession of the Premises. In the event that Landlord elects to avail
itself of the remedy provided by this subsection (ii), Landlord shall not
unreasonably withhold its consent to an assignment or subletting of the Premises
subject to the reasonable standards for Landlord's consent as are contained in
this Lease.

          (b) The various rights and remedies reserved to Landlord in this Lease
or otherwise shall be cumulative and, except as otherwise provided by California
law, Landlord may pursue any or all of its rights and remedies at the same time.
No delay or omission of Landlord to exercise any right or remedy shall be
construed as a waiver of the right or remedy or of any default by Tenant.  The
acceptance by Landlord of rent shall not be a (i) waiver of any preceding breach
or default by Tenant of any provision of this Lease, other than the failure of
Tenant to pay the particular rent accepted, regardless of Landlord's knowledge
of the preceding breach or default at the time of acceptance of rent, or (ii) a
waiver of Landlord's right to exercise any remedy available to Landlord by
virtue of the breach or default.  The acceptance of any payment from a debtor in
possession, a trustee, a receiver or any other person acting on behalf of Tenant
or Tenant's estate shall not waive or cure a default under Section 14.1.  No
payment by Tenant or receipt by Landlord of a lesser amount than the rent
required by this Lease shall be deemed to be other than a partial payment on
account of the earliest due stipulated rent, nor shall any endorsement or
statement on any check or letter be deemed an accord and satisfaction and
Landlord shall accept the check or payment without prejudice to Landlord's right
to recover the balance of the rent or pursue any other remedy available to it.
Tenant hereby waives any right of redemption or relief from forfeiture under
California Code of Civil Procedure Section 1174 or 1179, or under any other
present or future law, in the event this Lease is terminated by reason of any
default by Tenant.  No act or thing done by Landlord or Landlord's agents during
the Term shall be deemed an acceptance of a surrender of the Premises, and no
agreement to accept a surrender shall be valid unless in writing and signed by
Landlord.  No employee of Landlord or of Landlord's agents shall have any power
to accept the keys to the Premises

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<PAGE>

prior to the termination of this Lease, and the delivery of the keys to any
employee shall not operate as a termination of the Lease or a surrender of the
Premises.

     SECTION 14.3.  LATE PAYMENTS.

          (a) Any rent due under this Lease that is not paid to Landlord within
five (5) days of the date when due shall bear interest at the maximum rate
permitted by law from the date due until fully paid.  The payment of interest
shall not cure any default by Tenant under this Lease.  In addition, Tenant
acknowledges that the late payment by Tenant to Landlord of rent will cause
Landlord to incur costs not contemplated by this Lease, the exact amount of
which will be extremely difficult and impracticable to ascertain.  Those costs
may include, but are not limited to, administrative, processing and accounting
charges, and late charges which may be imposed on Landlord by the terms of any
ground lease, mortgage or trust deed covering the Premises.  Accordingly, if any
rent due from Tenant shall not be received by Landlord or Landlord's designee
within five (5) days after the date due, then Tenant shall pay to Landlord, in
addition to the interest provided above, a late charge in the amount of two
hundred and fifty dollars ($250.00) for each delinquent payment.  Acceptance of
a late charge by Landlord shall not constitute a waiver of Tenant's default with
respect to the overdue amount, nor shall it prevent Landlord from exercising any
of its other rights and remedies.

          (b) Following each second consecutive installment of rent that is not
paid within five (5) days following notice of nonpayment from Landlord, Landlord
shall have the option (i) to require that beginning with the first payment of
rent next due, rent shall no longer be paid in monthly installments but shall be
payable quarterly three (3) months in advance and/or (ii) to require that Tenant
increase the amount, if any, of the Security Deposit by one hundred percent
(100%).  Should Tenant deliver to Landlord, at any time during the Term, two (2)
or more insufficient checks, the Landlord may require that all monies then and
thereafter due from Tenant be paid to Landlord by cashier's check.

     SECTION 14.4.  RIGHT OF LANDLORD TO PERFORM.  All covenants and agreements
to be performed by Tenant under this Lease shall be performed at Tenant's sole
cost and expense and without any abatement of rent or right of set-off.  If
Tenant fails to pay any sum of money, or fails to perform any other act on its
part to be performed under this Lease, and the failure continues beyond any
applicable grace period set forth in Section 14.1, then in addition to any other
available remedies, Landlord may, at its election make the payment or perform
the other act on Tenant's part. Landlord's election to make the payment or
perform the act on Tenant's part shall not give rise to any responsibility of
Landlord to continue making the same or similar payments or performing the same
or similar acts. Tenant shall, promptly upon demand by Landlord, reimburse
Landlord for all sums paid by Landlord and all necessary incidental costs,
together with interest at the maximum rate permitted by law from the date of the
payment by Landlord.

     SECTION 14.5.  DEFAULT BY LANDLORD.  Landlord shall not be deemed to be in
default in the performance of any obligation under this Lease unless and until
it has failed to perform the obligation within thirty (30) days after written
notice by Tenant to Landlord specifying in reasonable detail the nature and
extent of the failure; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for its
performance, then Landlord shall not be deemed to be in default if it commences
performance within the thirty (30) day period and thereafter diligently pursues
the cure to completion.

     SECTION 14.6.  EXPENSES AND LEGAL FEES.  Should either Landlord or Tenant
bring any action in connection with this Lease, the prevailing party shall be
entitled to recover as a part of the action its reasonable attorneys' fees, and
all other costs.  The prevailing party for the purpose of this paragraph shall
be determined by the trier of the facts.

     SECTION 14.7.   WAIVER OF JURY TRIAL/RIGHT TO ARBITRATE.

                (a)  LANDLORD AND TENANT EACH ACKNOWLEDGES THAT IT IS AWARE OF
AND HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHT TO
TRIAL BY JURY, AND EACH PARTY DOES HEREBY EXPRESSLY AND KNOWINGLY WAIVE AND
RELEASE ALL SUCH RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER (AND/OR AGAINST
ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR SUBSIDIARY OR AFFILIATED
ENTITIES) ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH
THIS LEASE, TENANT'S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM OF
INJURY OR DAMAGE.

                (b)  SHOULD A DISPUTE ARISE BETWEEN THE PARTIES REGARDING ANY
MATTER DESCRIBED ABOVE, THEN EXCEPT WITH RESPECT TO ACTIONS FOR UNLAWFUL OR
FORCIBLE DETAINER EITHER PARTY MAY CAUSE THE DISPUTE TO BE SUBMITTED TO
JAMS/ENDISPUTE OR ITS SUCCESSOR ("JAMS") IN THE COUNTY IN WHICH THE BUILDING IS
SITUATED FOR BINDING ARBITRATION BEFORE A SINGLE ARBITRATOR. HOWEVER, EACH PARTY
RESERVES THE RIGHT TO SEEK A PROVISIONAL REMEDY BY JUDICIAL ACTION. NO
ARBITRATION ELECTION BY EITHER PARTY PURSUANT TO THIS SUBSECTION SHALL BE
EFFECTIVE IF MADE LATER THAN THIRTY (30) DAYS FOLLOWING SERVICE OF A JUDICIAL
SUMMONS AND COMPLAINT BY OR UPON SUCH PARTY CONCERNING THE DISPUTE. THE
ARBITRATION SHALL BE CONDUCTED IN ACCORDANCE WITH THE RULES OF PRACTICE AND
PROCEDURE OF JAMS AND OTHERWISE PURSUANT TO THE CALIFORNIA ARBITRATION ACT (CODE
OF CIVIL PROCEDURE SECTIONS 1280 ET SEQ.). NOTWITHSTANDING THE FOREGOING, THE
ARBITRATOR IS SPECIFICALLY DIRECTED TO LIMIT DISCOVERY TO THAT WHICH IS

                                      13
<PAGE>

ESSENTIAL TO THE EFFECTIVE PROSECUTION OR DEFENSE OF THE ACTION, AND IN NO EVENT
SHALL SUCH DISCOVERY BY EITHER PARTY INCLUDE MORE THAN ONE NON-EXPERT WITNESS
DEPOSITION UNLESS BOTH PARTIES OTHERWISE AGREE. THE ARBITRATOR SHALL, TO THE
EXTENT APPLICABLE, FOLLOW THE SUBSTANTIVE LAW OF CALIFORNIA AND SHALL RENDER A
REASONED WRITTEN DECISION WITHIN TWENTY DAYS FOLLOWING THE HEARING. THE
ARBITRATOR SHALL APPORTION THE COSTS OF THE ARBITRATION, TOGETHER WITH THE
ATTORNEYS' FEES OF THE PARTIES, IN THE MANNER DEEMED EQUITABLE BY THE
ARBITRATOR, IT BEING THE INTENTION OF THE PARTIES THAT THE PREVAILING PARTY
ORDINARILY BE ENTITLED TO RECOVER ITS REASONABLE COSTS AND FEES. JUDGMENT UPON
ANY AWARD RENDERED BY THE ARBITRATOR MAY BE ENTERED BY ANY COURT HAVING
JURISDICTION; PROVIDED THAT SUCH AWARD SHALL BE VACATED IN ACCORDANCE WITH THE
CALIFORNIA ARBITRATION ACT SHOULD THE COURT DETERMINE, UPON TIMELY PETITION,
THAT THE ARBITRATOR EXCEEDED HIS/HER POWERS BY RENDERING A DECISION INCONSISTENT
WITH CALIFORNIA LAW OR THAT OTHER GOOD AND SUFFICIENT CAUSE FOR VACATION EXISTS.

                           ARTICLE XV.  END OF TERM

     SECTION 15.1.  HOLDING OVER.  This Lease shall terminate without further
notice upon the expiration of the Term, and any holding over by Tenant after the
expiration shall not constitute a renewal or extension of this Lease, or give
Tenant any rights under this Lease, except when in writing signed by both
parties.  If Tenant holds over for any period after the expiration (or earlier
termination) of the Term, Landlord may, at its option, treat Tenant as a tenant
at sufferance only, commencing on the first (1st) day following the termination
of this Lease.  Any hold-over by Tenant shall be subject to all of the terms of
this Lease, except that the monthly rental shall be two hundred percent (200%)
of the total monthly rental for the month immediately preceding the date of
termination, subject to Landlord's right to modify same upon thirty (30) days
notice to Tenant. If Tenant fails to surrender the Premises upon the expiration
of this Lease despite demand to do so by Landlord, Tenant shall indemnify and
hold Landlord harmless from all loss or liability, including without limitation,
any claims made by any succeeding tenant relating to such failure to surrender.
Acceptance by Landlord of rent after the termination shall not constitute a
consent to a holdover or result in a renewal of this Lease. The foregoing
provisions of this Section are in addition to and do not affect Landlord's right
of re-entry or any other rights of Landlord under this Lease or at law.

     SECTION 15.2.  MERGER ON TERMINATION.  The voluntary or other surrender of
this Lease by Tenant, or a mutual termination of this Lease, shall terminate any
or all existing subleases unless Landlord, at its option, elects in writing to
treat the surrender or termination as an assignment to it of any or all
subleases affecting the Premises.

     SECTION 15.3.  SURRENDER OF PREMISES; REMOVAL OF PROPERTY.  Upon the
Expiration Date or upon any earlier termination of this Lease, Tenant shall quit
and surrender possession of the Premises to Landlord in as good order, condition
and repair as when received or as hereafter may be improved by Landlord or
Tenant, reasonable wear and tear and repairs which are Landlord's obligation
excepted, and shall remove or fund to Landlord the cost of removing all
wallpapering and voice and/or data transmission cabling installed by or for
Tenant, together with all personal property and debris, except for any items
that Landlord may by written authorization allow to remain.  Tenant shall repair
all damage to the Premises resulting from the removal, which repair shall
include the patching and filling of holes and repair of structural damage,
provided that Landlord may instead elect to repair any structural damage at
Tenant's expense.  If Tenant shall fail to comply with the provisions of this
Section, Landlord may effect the removal and/or make any repairs, and the cost
to Landlord shall be additional rent payable by Tenant upon demand.  If
requested by Landlord, Tenant shall execute, acknowledge and deliver to Landlord
an instrument in writing releasing and quitclaiming to Landlord all right, title
and interest of Tenant in the Premises.

                      ARTICLE XVI.  PAYMENTS AND NOTICES

     All sums payable by Tenant to Landlord shall be paid, without deduction or
offset, in lawful money of the United States to Landlord at its address set
forth in Item 13 of the Basic Lease Provisions, or at any other place as
Landlord may designate in writing.  Unless this Lease expressly provides
otherwise, as for example in the payment of rent pursuant to Section 4.1, all
payments shall be due and payable within five (5) days after demand.  All
payments requiring proration shall be prorated on the basis of the number of
days in the pertinent calendar month or year, as applicable.  Any notice,
election, demand, consent, approval or other communication to be given or other
document to be delivered by either party to the other may be delivered to the
other party, at the address set forth in Item 13 of the Basic Lease Provisions,
by personal service or electronic facsimile transmission, or by any courier or
"overnight" express mailing service, or may be deposited in the United States
mail,  postage prepaid.  Either party may, by written notice to the other,
served in the manner provided in this Article, designate a different address.
If any notice or other document is sent by mail, it shall be deemed served or
delivered three (3) business days after mailing or, if sooner, upon actual
receipt.  The refusal to accept delivery of a notice, or the inability to
deliver the notice (whether due to a change of address for which notice was not
duly given or other good reason), shall be deemed delivery and receipt of the
notice as of the date of attempted delivery.  If more than one person or entity
is named as Tenant under this Lease, service of any notice upon any one of them
shall be deemed as service upon all of them.

                                      14
<PAGE>

                     ARTICLE XVII.  RULES AND REGULATIONS

     Tenant agrees to comply with the Rules and Regulations attached as Exhibit
E, and any reasonable and nondiscriminatory amendments, modifications and/or
additions as may be adopted and published by written notice to tenants by
Landlord for the safety, care, security, good order, or cleanliness of the
Premises, Building, Project and/or Common Areas.  Landlord shall not be liable
to Tenant for any violation of the Rules and Regulations or the breach of any
covenant or condition in any lease or any other act or conduct by any other
tenant, and the same shall not constitute a constructive eviction hereunder.
One or more waivers by Landlord of any breach of the Rules and Regulations by
Tenant or by any other tenant(s) shall not be a waiver of any subsequent breach
of that rule or any other.  Tenant's failure to keep and observe the Rules and
Regulations shall constitute a default under this Lease.  In the case of any
conflict between the Rules and Regulations and this Lease, this Lease shall be
controlling.

                      ARTICLE XVIII.  BROKER'S COMMISSION

     The parties recognize as the broker(s) who negotiated this Lease the
firm(s), if any, whose name(s) is (are) stated in Item 10 of the Basic Lease
Provisions, and agree that Landlord shall be responsible for the payment of
brokerage commissions to those broker(s) unless otherwise provided in this
Lease.  Each party warrants that it has had no dealings with any other real
estate broker or agent in connection with the negotiation of this Lease, and
agrees to indemnify and hold the other party harmless from any cost, expense or
liability (including reasonable attorneys' fees) for any compensation,
commissions or charges claimed by any other real estate broker or agent employed
or claiming to represent or to have been employed by the indemnifying party in
connection with the negotiation of this Lease. The foregoing agreement shall
survive the termination of this Lease.

                 ARTICLE XIX.  TRANSFER OF LANDLORD'S INTEREST

     In the event of any transfer of Landlord's interest in the Premises, the
transferor shall be automatically relieved of all obligations on the part of
Landlord accruing under this Lease from and after the date of the transfer,
provided that Tenant is duly notified of the transfer.  Any funds held by the
transferor in which Tenant has an interest shall be turned over, subject to that
interest, to the transferee. No holder of a mortgage and/or deed of trust to
which this Lease is or may be subordinate shall be responsible in connection
with the Security Deposit unless the mortgagee or holder of the deed of trust
actually receives the Security Deposit.  It is intended that the covenants and
obligations contained in this Lease on the part of Landlord shall, subject to
the foregoing, be binding on Landlord, its successors and assigns, only during
and in respect to their respective successive periods of ownership.

                          ARTICLE XX.  INTERPRETATION

     SECTION 20.1.  GENDER AND NUMBER.  Whenever the context of this Lease
requires, the words "Landlord" and "Tenant" shall include the plural as well as
the singular, and words used in neuter, masculine or feminine genders shall
include the others.

     SECTION 20.2.  HEADINGS.  The captions and headings of the articles and
sections of this Lease are for convenience only, are not a part of this Lease
and shall have no effect upon its construction or interpretation.

     SECTION 20.3.  JOINT AND SEVERAL LIABILITY.  If more than one person or
entity is named as Tenant, the obligations imposed upon each shall be joint and
several and the act of or notice from, or notice or refund to, or the signature
of, any one or more of them shall be binding on all of them with respect to the
tenancy of this Lease, including, but not limited to, any renewal, extension,
termination or modification of this Lease.

     SECTION 20.4.  SUCCESSORS.  Subject to Articles IX and XIX, all rights and
liabilities given to or imposed upon Landlord and Tenant shall extend to and
bind their respective heirs, executors, administrators, successors and assigns.
Nothing contained in this Section is intended, or shall be construed, to grant
to any person other than Landlord and Tenant and their successors and assigns
any rights or remedies under this Lease.

     SECTION 20.5.  TIME OF ESSENCE.  Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor.

     SECTION 20.6.  CONTROLLING LAW/VENUE.  This Lease shall be governed by and
interpreted in accordance with the laws of the State of California.  Should any
litigation be commenced between the parties in connection with this Lease, such
action shall be prosecuted in the applicable State Court of California in the
county in which the Building is located.

     SECTION 20.7.  SEVERABILITY.  If any term or provision of this Lease, the
deletion of which would not adversely affect the receipt of any material benefit
by either party or the deletion of which is consented to by the party adversely
affected, shall be held invalid or unenforceable to any extent, the

                                      15
<PAGE>

remainder of this Lease shall not be affected and each term and provision of
this Lease shall be valid and enforceable to the fullest extent permitted by
law.

     SECTION 20.8.  WAIVER.  One or more waivers by Landlord or Tenant of any
breach of any term, covenant or condition contained in this Lease shall not be a
waiver of any subsequent breach of the same or any other term, covenant or
condition.  Consent to any act by one of the parties shall not be deemed to
render unnecessary the obtaining of that party's consent to any subsequent act.
No breach of this Lease shall be deemed to have been waived unless the waiver is
in a writing signed by the waiving party.

     SECTION 20.9.  INABILITY TO PERFORM.  In the event that either party shall
be delayed or hindered in or prevented from the performance of any work or in
performing any act required under this Lease by reason of any cause beyond the
reasonable control of that party, then the performance of the work or the doing
of the act shall be excused for the period of the delay and the time for
performance shall be extended for a period equivalent to the period of the
delay.  The provisions of this Section shall not operate to excuse Tenant from
the prompt payment of rent.

     SECTION 20.10. ENTIRE AGREEMENT.  This Lease and its exhibits and other
attachments cover in full each and every agreement of every kind between the
parties concerning the Premises, the Building, and the Project, and all
preliminary negotiations, oral agreements, understandings and/or practices,
except those contained in this Lease, are superseded and of no further effect.
Tenant waives its rights to rely on any representations or promises made by
Landlord or others which are not contained in this Lease. No verbal agreement or
implied covenant shall be held to modify the provisions of this Lease, any
statute, law, or custom to the contrary notwithstanding.

     SECTION 20.11.   QUIET ENJOYMENT.  Upon the observance and performance of
all the covenants, terms and conditions on Tenant's part to be observed and
performed, and subject to the other provisions of this Lease, Tenant shall have
the right of quiet enjoyment and use of the Premises for the Term without
hindrance or interruption by Landlord or any other person claiming by or through
Landlord.

     SECTION 20.12.    SURVIVAL.  All covenants of Landlord or Tenant which
reasonably would be intended to survive the expiration or sooner termination of
this Lease, including without limitation any warranty or indemnity hereunder,
shall so survive and continue to be binding upon and inure to the benefit of the
respective parties and their successors and assigns.

                     ARTICLE XXI.  EXECUTION AND RECORDING

     SECTION 21.1.  COUNTERPARTS.  This Lease may be executed in one or more
counterparts, each of which shall constitute an original and all of which shall
be one and the same agreement.

     SECTION 21.2.  CORPORATE AND PARTNERSHIP AUTHORITY.  If Tenant is a
corporation, limited liability company or partnership, each individual executing
this Lease on behalf of the entity represents and warrants that he is duly
authorized to execute and deliver this Lease and that this Lease is binding upon
the corporation, limited liability company  or partnership in accordance with
its terms.  Tenant shall, at Landlord's request, deliver a certified copy of its
organizational documents or an appropriate certificate authorizing or evidencing
the execution of this Lease.

     SECTION 21.3.  EXECUTION OF LEASE; NO OPTION OR OFFER.  The submission of
this Lease to Tenant shall be for examination purposes only, and shall not
constitute an offer to or option for Tenant to lease the Premises.  Execution of
this Lease by Tenant and its return to Landlord shall not be binding upon
Landlord, notwithstanding any time interval, until Landlord has in fact executed
and delivered this Lease to Tenant, it being intended that this Lease shall only
become effective upon execution by Landlord and delivery of a fully executed
counterpart to Tenant.

     SECTION 21.4.  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.

     SECTION 21.5.  AMENDMENTS.  No amendment or mutual termination of this
Lease shall be effective unless in writing signed by authorized signatories of
Tenant and Landlord, or by their respective successors in interest.  No actions,
policies, oral or informal arrangements, business dealings or other course of
conduct by or between the parties shall be deemed to modify this Lease in any
respect.

                         ARTICLE XXII.  MISCELLANEOUS

     SECTION 22.1.  NONDISCLOSURE OF LEASE TERMS.  Tenant acknowledges and
agrees that the terms of this Lease are confidential and constitute proprietary
information of Landlord.  Disclosure of the terms could adversely affect the
ability of Landlord to negotiate other leases and impair Landlord's relationship
with other tenants.  Accordingly, Tenant agrees that it, and its partners,
officers, directors, employees and attorneys, shall not intentionally and
voluntarily disclose the terms and conditions of this Lease to any other tenant
or apparent prospective tenant of the Building or Project, either directly or
indirectly, without the prior written consent of Landlord, provided, however,
that Tenant may disclose the terms to prospective subtenants or assignees under
this Lease.

                                      16
<PAGE>

     SECTION 22.2.  REPRESENTATIONS BY TENANT.  The application, financial
statements and tax returns, if any, submitted and certified to by Tenant as an
accurate representation of its financial condition have been prepared, certified
and submitted to Landlord as an inducement and consideration to Landlord to
enter into this Lease.  The application and statements are represented and
warranted by Tenant to be correct and to accurately and fully reflect Tenant's
true financial condition as of the date of execution of this Lease by Tenant.
Tenant shall during the Term promptly furnish Landlord with current annual
financial statements accurately reflecting Tenant's financial condition upon
written request from Landlord.

     SECTION 22.3.  CHANGES REQUESTED BY LENDER.  If, in connection with
obtaining financing for the Building, the lender shall request reasonable
modifications in this Lease as a condition to the financing, Tenant will not
unreasonably withhold or delay its consent, provided that the modifications do
not materially increase the obligations of Tenant or materially and adversely
affect the leasehold interest created by this Lease.

     SECTION 22.4.  MORTGAGEE PROTECTION.  No act or failure to act on the part
of Landlord which would otherwise entitle Tenant to be relieved of its
obligations hereunder or to terminate this Lease shall result in such a release
or termination unless (a) Tenant has given notice by registered or certified
mail to any beneficiary of a deed of trust or mortgage covering the Building
whose address has been furnished to Tenant and (b) such beneficiary is afforded
a reasonable opportunity to cure the default by Landlord, including, if
necessary to effect the cure, time to obtain possession of the Building by power
of sale or judicial foreclosure provided that such foreclosure remedy is
diligently pursued.

     SECTION 22.5.  DISCLOSURE STATEMENT.  Tenant acknowledges that it has read,
understands and, if applicable, shall comply with the provisions of Exhibit F to
this Lease, if that Exhibit is attached.

LANDLORD:                                TENANT:

THE IRVINE COMPANY                       PACIFIC MERCANTILE BANK

By  /s/ Craig D. Brashier                By  /s/ John J. McCauley
  ------------------------------------     ------------------------------------
  Craig D. Brashier, Vice President,     Printed Name  J. McCauley
  Operations, Irvine Office Company,                 --------------------------
  a division of The Irvine Company       Title  EVP
                                              ---------------------------------

By  /s/ Vincent P. Hayes                 By  /s/ Daniel L. Erickson
  ------------------------------------     ------------------------------------
  Vicent P. Hayes                        Printed Name  Daniel L. Erickson
  Assistant Secretary                                --------------------------
                                         Title  EVP/CFO
                                              ---------------------------------

                                      17<PAGE>

                                                                    EXHIBIT 10.6

                                   SUBLEASE
                                  (AU #90188)

                                By and Between

                            WELLS FARGO BANK, N.A.

                                      and

                            PACIFIC MERCANTILE BANK

                          Subleased Premises Known As

                             501 N. El Camino Real
                           San Clemente, California
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                                                                          ----
<S>                                                                       <C>
1.   Basic Sublease Provisions; Definitions.............................   1
     1.1    Building....................................................   1
     1.2    Subleased Premises..........................................   1
     1.3    Area of Subleased Premises..................................   1
     1.4    Subtenant's Percentage Share................................   1
     1.5    Sublease Term...............................................   2
     1.6    Rent Commencement Date......................................   2
     1.7    Basic Monthly Rent..........................................   2
     1.8    Rental Adjustments..........................................   2
     1.9    Permitted Use...............................................   2
     1.10   Late Charges................................................   2
     1.11   Acceptance of Subleased Premises............................   2
     1.12   Address for Payment of Rent and Notices.....................   4
     1.13   Security Deposit............................................   4
     1.14   Parking.....................................................   5
     1.15   Brokers.....................................................   5
     1.16   Tax ID Form.................................................   5
     1.17   Option to Extend............................................   5
     1.18   Subtenant Improvement Allowance.............................   5

2.   Demise; Conditions.................................................   5
     2.1    Demise......................................................   5
     2.2    Conditions Precedent........................................   5
     2.3    Failure of Conditions.......................................   6
     2.4    Compliance with Laws........................................   6

3.   Lease..............................................................   7
     3.1    Incorporation By Reference; Assumption......................   7
     3.2    Assumption of Lease Obligations.............................   7
     3.3    No Assumption by Sublandlord................................   7
     3.4    Performance Directly to Landlord............................   7
     3.5    Landlord Default; Consents..................................   7
     3.6    Termination of Lease........................................   7

4.   Covenant Of Quiet Enjoyment........................................   8

5.   Hazardous Substances...............................................   8
     5.1    Definitions.................................................   8
     5.2    Compliance with Environmental Laws..........................   8
     5.3    Response to Environmental Claims............................   9
</TABLE>

                                       i
<PAGE>

<TABLE>
<CAPTION>
                                                                          Page
                                                                          ----
<S>                                                                       <C>
6.   Artwork.............................................................   9

7.   Indemnity...........................................................   9

8.   Attorneys' Fees.....................................................   9

9.   No Encumbrance......................................................   9

10.  Assignment and Subletting...........................................  10
     10.1   Restriction on Assignment and Subletting.....................  10
     10.2   Determining Factors..........................................  10
     10.3   Consents.....................................................  10
     10.4   Profit Sharing...............................................  11

11.  Alterations; Signs..................................................  11
     11.1  Alterations and Improvements By Subtenant.....................  11
     11.2  Signs.........................................................  12
     11.3  Disposition on Termination....................................  12

12.  Removal of Personal Property........................................  12

13.  Holding Over........................................................  12

14.  Liens...............................................................  13

15.  Maintenance and Repairs.............................................  13

16.  Insurance...........................................................  13
     16.1   Coverage.....................................................  13
     16.2   Policies.....................................................  14
     16.3   Subrogation..................................................  14
     16.4   Primary Coverage.............................................  14

17.  Events of Default...................................................  14

18.  Remedies of Sublandlord on Default..................................  15
     18.1   Termination of Sublease......................................  15
     18.2   Continue Sublease in Effect..................................  16
     18.3   Other Remedies...............................................  16
</TABLE>

                                       ii
<PAGE>

<TABLE>
<CAPTION>
                                                                          Page
                                                                          ----
<S>                                                                      <C>
19.  Estoppel Certificates..............................................  16
     19.1   Obligation to Provide.......................................  16
     19.2   Failure to Provide..........................................  16
     19.3   Financial Information.......................................  17
     19.4   Sublandlord Estoppel........................................  17

20.   Real Estate Brokers...............................................  17

21.  Miscellaneous......................................................  17
     21.1   Counterparts................................................  17
     21.2   Construction................................................  17
     21.3   Notices.....................................................  17
     21.4   Governing Law...............................................  17
     21.5   Exhibits....................................................  18
     21.6   Waiver of Trial by Jury.....................................  18
     21.7   Prohibition on Solicitation of Sublandlord's Customers......  18
</TABLE>

CONSENT OF LANDLORD

EXHIBIT A LEASE
EXHIBIT B DRAWING OF SUBLEASED PREMISES
EXHIBIT C TAX ID FORM
EXHIBIT D WORK LETTER AGREEMENT

                                      iii
<PAGE>

                  SUBTENANT HAS NO RIGHTS OF ACCESS OR RIGHTS
                  -------------------------------------------
               OF POSSESSION TO THE SUBLEASED PREMISES PRIOR TO
               ------------------------------------------------
                             THE COMMENCEMENT DATE.
                             ---------------------

                                   SUBLEASE

                                  (AU #90188)

          THIS SUBLEASE, dated as of August 3, 1999 for reference purposes only,
is entered into by and between WELLS FARGO BANK, N.A., a national banking
association ("Sublandlord") and Pacific Mercantile Bank, a California banking
corporation ("Subtenant").

                                   RECITALS
                                   --------

      A.  Earl E. Miller and Karen L. Miller, Trustees of the Miller Family
Trust ("Landlord") and First Interstate Bank of California, a California
corporation, predecessor in interest to Sublandlord, as tenant, entered into a
written lease dated October 10, 1995, a copy of which is attached hereto as
Exhibit A ("Lease") covering premises described in Section 1.3 of the Lease.

      B.  Subtenant desires to sublet the entire premises described in the Lease
from Sublandlord on the terms and conditions contained in this Sublease.

      NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein contained, Sublandlord and Subtenant agree as follows:

1.   Basic Sublease Provisions; Definitions.
     --------------------------------------

     1.1  Building:           501 N. El Camino Real
          --------            San Clemente, California 92672

     1.2  Subleased Premises: The Subleased Premises is the entire premises
          ------------------
          leased to Sublandlord under the Lease as depicted on Exhibit B hereto.

     1.3  Area of Subleased Premises:  Approximately 4,193 square feet.  In
          --------------------------
          the event of any discrepancy between the square footage set forth in
          the Lease and the square footage set forth herein, this Paragraph 1.3
          shall govern.

     1.4  Subtenant's Percentage Share:  Subtenant will pay 100% of all
          ----------------------------
          operating expenses and taxes and assessments payable by Sublandlord
          under the Lease ("Operating Expenses and Taxes").
<PAGE>

      1.5  Sublease Term: Approximately seventy-eight (78) months commencing
           -------------
           on the date this Sublease is fully executed by both Sublandlord and
           Subtenant and Landlord's consent to the Sublease has been obtained
           ("Commencement Date") and ending, unless earlier terminated pursuant
           to the terms hereof, on January 31, 2006.

      1.6  Rent Commencement Date: September 1, 1999.
           ----------------------

      1.7  Basic Monthly Rent: $5,870.20. Except as otherwise provided in the
           ------------------
           Lease, all rent must be paid without demand, deduction, set-off or
           counter claim, in advance, on the first day of each calendar month
           during the Sublease Term, and in the event of a partial rental month,
           rent will be prorated on the basis of a thirty (30) day month.
           Notwithstanding the foregoing, Basic Monthly Rent will be abated from
           the Commencement Date until the Rent Commencement Date. Monthly
           payments hereunder will commence on September 1, 1999. Such abatement
           will be conditioned upon the performance by Subtenant of all of its
           obligations under this Sublease. If a default by Subtenant under this
           Sublease or under the Lease as incorporated herein occurs at any time
           during the Sublease Term, all amounts abated hereunder, in addition
           to all other amounts then payable to Sublandlord, will be due and
           payable to Sublandlord as a result of such default. The foregoing
           rental abatement will apply to Basic Monthly Rent and Subtenant's
           Percentage Share of Operating Expenses and Taxes.

      1.8  Rental Adjustments:
           ------------------

           Adjustment Date                                    Adjusted Rent
           ---------------                                    -------------

           Thirty-first (31st) month of Sublease Term         $6,310.47

           Sixty-first (61st) month of Sublease Term          $6,783.76

      1.9  Permitted Use: As provided in Section 1.7 of the Lease.
           -------------

      1.10 Late Charges: The parties agree that late payments by Subtenant to
           ------------
           Sublandlord of rent will cause Sublandlord to incur costs not
           contemplated by this Sublease, the amount of which is extremely
           difficult to ascertain. Therefore, the parties agree that if any
           installment of Basic Monthly Rent or Operating Expenses and Taxes is
           not received by Sublandlord within 10 days after due, Subtenant will
           pay to Sublandlord a late charge equal to 5% of the late payment.
           Interest on any amounts payable by Subtenant under this Sublease
           shall accrue at the rate of 12% per annum from the date delinquent
           until paid in full.

      1.11 Acceptance of Subleased Premises  :  Subtenant agrees to accept the
           --------------------------------
           Subleased Premises in an "as is" condition.  Without limiting the
           foregoing, Subtenant's rights in the Subleased Premises are subject
           to all local, state and federal laws, regulations and ordinances
           governing and regulating the use and occupancy of the Subleased
           Premises and subject

                                       2
<PAGE>

           to all matters now or hereafter of record. Subtenant acknowledges
           that except as may be set forth in Section 4 herein, neither
           Sublandlord nor Sublandlord's agent has made any representation or
           warranty as to:

                     (i) the present or future suitability of the Subleased
                Premises for the conduct of Subtenant's business;

                     (ii) the physical condition of the Subleased Premises;

                     (iii)  the expenses of operation of the Subleased Premises;

                     (iv) the safety of the Subleased Premises, whether for the
                use of Subtenant or any other person, including Subtenant's
                employees, agents, invitees or customers;

                     (v) the compliance of the Subleased Premises with any
                applicable laws, regulations or ordinances; or

                     (vi) any other matter or thing affecting or related to the
                Subleased Premises.

           Subtenant acknowledges that no rights, easements or licenses are
           acquired by Subtenant by implication or otherwise except as expressly
           set forth herein.  Subtenant will, prior to delivery of possession of
           the Subleased Premises, inspect the Subleased Premises and become
           thoroughly acquainted with their condition.  Subtenant acknowledges
           that the taking of possession of the Subleased Premises by Subtenant
           will be conclusive evidence that the Subleased Premises were in good
           and satisfactory condition at the time such possession was taken.
           Subtenant specifically agrees that, except as specifically provided
           by laws in force as of the date hereof, Sublandlord has no duty to
           make any disclosures concerning the condition of the Building and the
           Subleased Premises and/or the fitness of the Building and the
           Subleased Premises for Subtenant's intended use and Subtenant
           expressly waives any duty which Sublandlord might have to make any
           such disclosures.  Subtenant further agrees that, in the event
           Subtenant subleases all or any portion of the Subleased Premises,
           Subtenant will indemnify and defend Sublandlord (in accordance with
           Paragraph 7 hereof) for, from and against any matters which arise as
           a result of Subtenant's failure to disclose any relevant information
           about the Building or the Subleased Premises to any subtenant or
           assignee.  Subtenant will comply with all laws and regulations
           relating to the use or occupancy of the Subleased Premises and to the
           common areas, including, without limitation, making structural
           alterations or providing auxiliary aids and services to the Subleased
           Premises as required by the Americans with Disabilities Act of 1990,
           42 U.S.C. (S) 12101 et seq. (the "ADA").  Subtenant further agrees
                               -- ---
           that all telephone and other communication installation and use
           requirements will be compatible with the Building and that Subtenant
           will be solely responsible for all of its telephone and communication
           installation and usage costs.

                                       3
<PAGE>

     1.12  Address for Payment of Rent and Notices:
           ---------------------------------------

           Sublandlord:                        Subtenant:

           Wells Fargo Bank, N.A.              Pacific Mercantile Bank
           Corporate Properties Group          501 N. El Camino Real
           333 S. Grand Avenue                 San Clemente, CA 92672
           Suite 700, MAC #2064-072            Attn: Branch Manager
           Los Angeles, CA 90071               Tel:__________________
           Attn:  Asset Manager
                  (AU #90188)

           with a copy to:                     with a copy to:

           Wells Fargo Bank, N.A.              Pacific Mercantile Bank
           Corporate Properties Group          450 Newport Center Drive
           333 S. Grand Avenue                 Suite 100
           Suite 700, MAC #2064-079            Newport Beach, CA 92660
           Los Angeles, CA 90071               Attn:  Chief Financial Officer
           Attn:  Real Estate Manager          (949) 644-8040
                  (AU #90188)
                                               with a copy to:

                                               Ben A. Frydman, Esq.
                                               Stradling, Yocca, Carlson & Rauth
                                               660 Newport Center Drive
                                               Suite 1600
                                               Newport Beach, CA 92660-6441
                                               (949) 640-7035

     1.13  Security Deposit: Subtenant shall deposit with Sublandlord upon
           ----------------
           Subtenant's execution hereof Five Thousand Eight Hundred Seventy and
           20/100 Dollars ($5,870.20) ("Deposit") as security for Subtenant's
           faithful performance of Subtenant's obligations hereunder. If
           Subtenant fails to pay rent or other charges due hereunder, or
           otherwise defaults with respect to any provision of this Sublease,
           Sublandlord may use, apply or retain all or any portion of the
           Deposit for the payment of any rent or other charge in default, or
           for the payment of any other sum which Sublandlord incurs by reason
           of Subtenant's default, or to compensate Sublandlord for any loss or
           damage which Sublandlord may suffer thereby. If Sublandlord uses or
           applies all or any portion of the Deposit, Subtenant must within
           fifteen (15) days after written demand therefor deposit cash with
           Sublandlord in an amount sufficient to restore the Deposit to its
           full amount and Subtenant's failure to do so will be a material
           breach of this Sublease. Sublandlord will not be required to keep the
           Deposit separate from its general accounts. If Subtenant performs all
           of Subtenant's obligations hereunder, the Deposit, or so much thereof
           as has not been used or applied by Sublandlord, will be returned to
           Subtenant (or at Sublandlord's option, to the last assignee, if any,
           of Subtenant's interest hereunder) at the expiration of the Sublease
           Term, and after Subtenant has vacated the Subleased Premises. No
           trust relationship is created herein between Sublandlord and
           Subtenant with

                                       4
<PAGE>

           respect to the Deposit. Any deposit under the Lease which may be
           returned by the Landlord will be the property of Sublandlord.

     1.14 Parking: Subtenant shall have all of the rights and obligations with
          -------
           respect to parking as Sublandlord has under the Lease.

     1.15  Brokers: CB Richard Ellis for Sublandlord; Grubb & Ellis for
           -------
           Subtenant.

     1.16  Tax ID Form: Attached hereto as Exhibit C is a Tax ID form to be
           -----------
           completed and executed by Subtenant concurrently herewith.

     1.17  Option to Extend:  None.
           ----------------

     1.18  Subtenant Improvement Allowance: Twenty Thousand Nine Hundred and
           -------------------------------
           Sixty-Five Dollars ($20,965.00). The Subtenant Improvement Allowance
           shall be used to construct the Subtenant Improvements in accordance
           with the Work Letter Agreement attached hereto and incorporated
           herein as Exhibit D. All Subtenant Improvements shall be and remain
           the property of Sublandlord.

2.    Demise; Conditions.
      ------------------

      2.1  Demise.  Sublandlord hereby subleases to Subtenant and Subtenant
           ------
hereby hires from Sublandlord the Subleased Premises for the Sublease Term,
subject to the terms, covenants and conditions set forth herein.  Subtenant
covenants that, as a material part of the consideration for this Sublease, it
shall keep and perform each and all of such terms, covenants and conditions by
it to be kept and performed, and that this Sublease is made upon the condition
of such performance.  Subtenant acknowledges that Sublandlord's obligation to
perform services, provide utilities, make repairs and carry insurance shall be
satisfied only to the extent that the Landlord under the Lease satisfies those
same obligations.  Subtenant assumes and agrees to perform the tenant's
obligations under the Lease during the Sublease Term to the extent such
obligations are applicable to the Subleased Premises, except to the extent
specifically contradicted herein.  Subtenant shall not commit or suffer any act
or omission that will violate any of the provisions of the Lease.

      2.2  Conditions Precedent.  The parties' obligations hereunder are
           --------------------
expressly conditioned upon the satisfaction of the following conditions
precedent; provided, however, that if Subtenant has taken possession of the
Subleased Premises prior to the satisfaction of such conditions, Subtenant shall
be fully obligated under the terms and conditions of this Sublease, including,
without limitation, the indemnity provisions set forth in Paragraph 7 and the
insurance provisions set forth in Paragraph 16 during the period prior to the
satisfaction of such conditions or if such conditions are not satisfied, to the
date of failure of such conditions and termination of this Sublease:

          (a) Landlord's Written Consent.  Within ten (10) business days after
              --------------------------
execution of this Sublease, Landlord's execution of a written consent to this
Sublease, and satisfaction of any conditions Landlord may impose upon Subtenant
as a condition to this Sublease.

                                       5
<PAGE>

          (b) Sublandlord's Approval.  Within ten (10) days after execution of
              ----------------------
this Sublease, approval of the terms and conditions of this Sublease by the
appropriate officers in Sublandlord's corporate office, unless waived in writing
by Sublandlord; provided that if such approval is not obtained within such time
period, the Sublease shall be deemed approved.

          (c) Subtenant's Approval.  Within ten (10) days after execution of
              --------------------
this Sublease, authorization of this Sublease by Subtenant's Board of Directors.

          (d) Financial Information.  Within five (5) days after execution of
              ---------------------
this Sublease, if not already delivered, delivery of Subtenant's following
financial information as applicable:  (i) copy of most recent annual report;
(ii) audited or certified financial statements for the last two (2) years or
federal and state tax returns for the last two (2) years; (iii) financial
statements for the current year; (iv) a list of Subtenant's banking references;
and (v) any other information reasonably requested by Sublandlord; and within
ten (10) days after receipt of the foregoing, Sublandlord's written approval
thereof.

          (e) Authority.  If requested by Sublandlord, within ten (10) days
              ---------
after execution of this Sublease, delivery to Sublandlord of certified copies of
Subtenant's Articles of Incorporation, Certificate of Good Standing and a
resolution of Subtenant's Board of Directors, certified by the corporate
secretary of Subtenant, authorizing or ratifying the execution of this Sublease
by Subtenant.

          (f) Governmental Approval.  By September 1, 1999, approval by the
              ---------------------
Federal Reserve Bank, the Federal Deposit Insurance Corporation and the
California Department of Financial Institutions for the establishment and
operation of a bank at the Subleased Premises.

      2.3  Failure of Conditions.  The conditions precedent specified in
           ---------------------
Paragraphs 2.2(b), (d) and (e) run to the benefit of Sublandlord.  The
conditions precedent specified in Paragraphs 2.2(c) and (f) run to the benefit
of Subtenant.  The condition precedent specified in Paragraph 2.2(a) runs to the
benefit of both parties, unless waived by Sublandlord.  If any condition
precedent is not satisfied by the date specified in and in accordance with
Paragraph 2.2, and the time period for the satisfaction of the condition is not
extended or waived in writing by the party or parties to whom the benefit of the
condition runs, then the party or parties to whom the benefit of the condition
runs, shall have the right to terminate this Sublease by written notice to the
other party within fifteen (15) days following the end of such time period and,
upon such termination, neither Sublandlord nor Subtenant shall have any further
obligations hereunder (except for Subtenant's indemnity obligations hereunder),
and Sublandlord shall return the Deposit to Subtenant, less any amount owing
from Subtenant to Sublandlord.

      2.4  Compliance with Laws.  At its own expense, Subtenant will procure,
           --------------------
maintain in effect and comply with all conditions of any and all permits,
licenses and other governmental and regulatory approvals required for
Subtenant's use of the Subleased Premises.

                                       6
<PAGE>

3.    Lease.
      -----

      3.1  Incorporation By Reference; Assumption.  All of the Sections of the
           --------------------------------------
Lease are incorporated into this Sublease as if fully set forth in this Sublease
except for the following:  4.4, 14, 18.3, 20, 25.2.2, 31, 36 (except as to the
matters for which arbitration is mandatory under the Lease).  Subject to
Paragraph 3.3 and where applicable, references in the Lease to Landlord will
mean Sublandlord and to Tenant will mean Subtenant; provided, however, if any
provisions of this Sublease conflict in any manner with any provisions of the
Lease which are incorporated herein, the terms of this Sublease will govern.

      3.2  Assumption of Lease Obligations.  Subtenant will assume and perform
           -------------------------------
to Sublandlord the tenant's obligations under the Lease during the Sublease Term
to the extent such obligations are applicable to the Subleased Premises.
Subtenant will pay to Sublandlord Subtenant's Percentage Share of Operating
Expenses and Taxes and any other sums payable by Sublandlord under the Lease not
later than ten (10) days prior to the date any such amounts are due and payable
by Sublandlord.  Subtenant will not commit or suffer any act or omission that
will violate any of the provisions of the Lease.

      3.3  No Assumption by Sublandlord.  Sublandlord does not assume the
           ----------------------------
obligations of the Landlord under the Lease.  Subtenant acknowledges that
Sublandlord's obligation to perform services, provide utilities, make repairs
and carry insurance shall be satisfied only to the extent that the Landlord
under the Lease satisfies those same obligations.  With respect to the
performance by Landlord of its obligations under the Lease, Sublandlord's sole
obligation with respect thereto will be to request the same, on request in
writing by Subtenant, and to use reasonable efforts to obtain the same from
Landlord; provided, however, Sublandlord will have no obligation to institute
legal action against Landlord.

      3.4  Performance Directly to Landlord.  At any time and on reasonable
           --------------------------------
prior notice to Subtenant, Sublandlord can elect to require Subtenant to perform
its obligations under this Sublease directly to Landlord, in which event
Subtenant will send to Sublandlord from time to time copies of all notices and
other communications it sends to and receives from Landlord.

      3.5  Landlord Default; Consents.  Notwithstanding any provision of this
           --------------------------
Sublease to the contrary, (a) Sublandlord will not be liable or responsible in
any way for any loss, damage, cost, expense, obligation or liability suffered by
Subtenant by reason or as the result of any breach, default or failure to
perform by the Landlord under the Lease, and (b) whenever the consent or
approval of Sublandlord and Landlord is required for a particular act, event or
transaction (i) any such consent or approval by Sublandlord will be subject to
the consent or approval of Landlord, and (ii) should Landlord refuse to grant
such consent or approval, under all circumstances, Sublandlord will be released
from any obligation to grant its consent or approval.

      3.6  Termination of Lease.  If the Lease terminates under the specific
           --------------------
provisions under the Lease, this Sublease will terminate, unless the Landlord
elects to accept this Sublease as a direct lease between Landlord and Subtenant,
and the parties will be relieved from all liabilities and obligations under this
Sublease excepting obligations which have accrued as of the date of termination;
except that if this Sublease terminates as a result of a default of one of the
parties under this Sublease or by

                                       7
<PAGE>

Sublandlord under the Lease, the defaulting party will be liable to the non-
defaulting party for all damage suffered by the non-defaulting party as a result
of the termination.

4.    Covenant Of Quiet Enjoyment.  Sublandlord represents that the Lease is
      ---------------------------
in full force and effect and that there are no defaults on Sublandlord's part
under it as of the Commencement Date.  Sublandlord further represents that to
Sublandlord's Actual Knowledge, as of the date of this Sublease:  (i) the
Subleased Premises are not under threat of condemnation, (ii) there is no
pending litigation to which Sublandlord is a party or of which Sublandlord has
received notice related to the Subleased Premises and (iii) Sublandlord has not
received notice from any governmental agency of an existing violation of
Environmental Laws (hereinafter defined) at the Subleased Premises.  Subject to
this Sublease terminating in the event the Lease is terminated, if Subtenant
performs all the provisions in this Sublease to be performed by Subtenant,
Subtenant will have and enjoy throughout the Sublease Term the quiet and
undisturbed possession of the Subleased Premises.  Sublandlord covenants to pay
all Base Monthly Rent and all other amounts as and when due under the Lease and
to faithfully perform its obligations under the Lease so as to avoid a default
under the Lease, and to send to Subtenant copies of all notices of default
received by Sublandlord from Landlord promptly upon receipt thereof.  Subtenant
shall have the right, but not the obligation, to cure a default on the part of
Sublandlord as Tenant under the Lease.  Sublandlord will have the right to enter
the Subleased Premises at any time, in the case of an emergency, and otherwise
at reasonable times, for the purpose of inspecting the condition of the
Subleased Premises and for verifying compliance by Subtenant with this Sublease
and the Lease and permitting Sublandlord to perform its obligations under this
Sublease and the Lease.  For purposes of this Section 4, "Sublandlord's Actual
Knowledge" shall mean the actual knowledge of Debra A. Broido, Vice President of
Corporate Properties, without investigation or inquiry.

5.    Hazardous Substances.
      --------------------

      5.1  Definitions.  For the purposes of this Sublease, the following
           -----------
terms have the following meanings:

           (a) "Environmental Laws" means any and all laws, statutes, ordinances
      or regulations pertaining to health, industrial hygiene or the environment
      including, without limitation, CERCLA (Comprehensive Environmental
      Response Compensation and Liability Act of 1980) and RCRA (Resources
      Conservation and Recovery Act of 1976).

           (b) "Hazardous Substances" means asbestos and any other substance,
      material or waste which is or becomes designated, classified or regulated
      as being "toxic" or "hazardous" or a "pollutant" or which is or becomes
      similarly designated, classified or regulated under any federal, state or
      local law, regulation or ordinance.

      5.2  Compliance with Environmental Laws.  Subtenant will, in all
           ----------------------------------
respects, handle, treat, deal with and manage any and all Hazardous Substances
in, on, under or about the Subleased Premises in total conformity with all
applicable Environmental Laws and prudent industry practices regarding
management of such Hazardous Substances.  Upon expiration or earlier termination
of the Sublease Term, Subtenant will cause all

                                       8
<PAGE>

Hazardous Substances placed in, on, under or about the Subleased Premises by
Subtenant or at Subtenant's direction to be removed and transported for use,
storage or disposal in accordance and compliance with all applicable
Environmental Laws.

      5.3  Response to Environmental Claims.  Subtenant will not take any
           --------------------------------
remedial action in response to the presence of any Hazardous Substances in, on,
under or about the Subleased Premises, nor enter into any settlement agreement,
consent decree or other compromise in respect to any claims relating to any
Hazardous Substances in any way connected with the Subleased Premises without
first notifying Landlord and Sublandlord of Subtenant's intention to do so and
affording Landlord and Sublandlord ample opportunity to appear, intervene or
otherwise appropriately assert and protect Landlord's and Sublandlord's
interests with respect thereto.

6.    Artwork.  To assure compliance with California laws regarding rights of
      -------
artists, Subtenant will not (i) alter or modify any piece of artwork which is
currently installed within the Subleased Premises without Sublandlord's express
written consent, which Sublandlord may withhold in its sole discretion or (ii)
install any artwork of any nature in the Subleased Premises which cannot be
removed without damage or destruction to the artwork.

7.    Indemnity.  Subtenant will indemnify, defend (by counsel reasonably
      ---------
acceptable to Sublandlord), protect and hold Sublandlord harmless from and
against any and all liabilities, claims, demands, losses, damages, costs and
expenses (including attorneys' fees and litigation and court costs) arising out
of or relating to (i) the death of or injury to any person or damage to any
property on or about the Subleased Premises or (ii) Subtenant's breach or
default under this Sublease (including, without limitation, Subtenant's breach
or default under Paragraph 5 above) or, to the extent incorporated herein, the
Lease, except for any of the foregoing to the extent caused by the gross
negligence or willful misconduct of Sublandlord or any of its agents,
contractors or employees.

8.    Attorneys' Fees.  If there is any legal action or proceeding between
      ----------------
Sublandlord and Subtenant to enforce any provision of this Sublease or to
protect or establish any right or remedy of either Sublandlord or Subtenant
hereunder, the non-prevailing party to such action or proceeding will pay to the
prevailing party all reasonable costs and expenses, including reasonable
attorneys' fees incurred by such prevailing party in such action or proceeding
and in any appearance in connection therewith, and if the prevailing party
recovers a judgment in any such action, proceeding or appeal, such costs,
expenses and attorneys' fees will be determined by the court or arbitration
panel handling the proceeding and will be included in and as a part of the
judgment.

9.    No Encumbrance.  Subtenant will not voluntarily, involuntarily or by
      --------------
operation of law mortgage or otherwise encumber all or any part of Subtenant's
interest in the Sublease or the Subleased Premises.

                                       9
<PAGE>

10.   Assignment and Subletting.
      -------------------------

      10.1  Restriction on Assignment and Subletting.    Subtenant will not
            ----------------------------------------
voluntarily, involuntarily or by operation of law assign this Sublease or any
interest therein and will not sublet the Subleased Premises or any part thereof,
or any right or privilege appurtenant thereto, without first obtaining the
written consent of Sublandlord, which consent will not be unreasonably withheld.
The transfer of more than a fifty percent (50%) partnership interest in
Subtenant, if Subtenant is a partnership, or more than fifty percent (50%) of
the stock of Subtenant, if Subtenant is a corporation, or more than a fifty
percent (50%) membership interest in Subtenant, if Subtenant is a limited
liability company, will be deemed to be an assignment for purposes of this
Paragraph 10.1.

      10.2  Determining Factors.    In determining whether or not to consent to
            -------------------
a proposed assignment or subletting, Sublandlord may consider the following
factors, among others, all of which are deemed reasonable:

           (a) whether the proposed sublessee or assignee has a net worth
      sufficient to discharge its obligations under this Sublease;

           (b) whether the proposed use of the Subleased Premises by the
      proposed sublessee or assignee is consistent with the Permitted Use set
      forth in Paragraph 1.9 of this Sublease;

           (c) whether the experience and business reputation of the proposed
      sublessee or assignee is adequate to operate its business;

           (d) whether Sublandlord's consent will result in a breach of the
      Lease or any other lease or agreement to which Sublandlord is a party
      affecting the Building or Subleased Premises; and

           (e) whether the Landlord has consented in writing to the proposed
      assignment or subletting (in accordance with the standards set forth in
      the Lease).

Further, it shall not be deemed unreasonable for Sublandlord to withhold its
consent to the assignment or subletting to a financial institution providing
retail banking services.

      10.3  Consents.  Any attempted assignment or subletting, without
            --------
Sublandlord's consent will be null and void and of no effect.  No permitted
assignment or subletting of Subtenant's interest in this Sublease, will relieve
Subtenant of its obligations to pay the rent or other sum or charge due
hereunder and to perform all the other obligations to be performed by Subtenant
hereunder.  The acceptance of rent by Sublandlord from any other person will not
be deemed to be a waiver by Sublandlord of any provision of this Sublease or to
be a consent to any subletting or assignment.  Consent to one sublease or
assignment will not be deemed to constitute consent to any subsequent attempted
subletting or assignment.

                                       10
<PAGE>

      10.4  Profit Sharing.
            --------------

           (a) Within thirty (30) days following the date received by Subtenant
      from any assignee or sublessee, Subtenant will pay to Sublandlord as
      additional rent a percentage of any appreciated rent as follows: (i) if
      the rent payable by Subtenant to Sublandlord hereunder is less than the
      rent paid by Sublandlord to Landlord under the Lease, one hundred percent
      (100%) of the amount by which the rent payable by the assignee or
      sublessee to Subtenant exceeds the rent payable by Subtenant to
      Sublandlord under this Sublease until the rent paid by Subtenant to
      Sublandlord equals the amount paid by Sublandlord to Landlord under the
      Lease; and (ii) thereafter or if the rent payable by Subtenant hereunder
      is the same or greater than the rent paid by Sublandlord to Landlord under
      the Lease, fifty percent (50%) of the amount by which the rent payable by
      the assignee or sublessee to Subtenant throughout the Sublease Term
      exceeds the rent paid by Subtenant to Sublandlord under this Sublease.  If
      the premises subleased is less than the entire Subleased Premises, the
      rent payable by Subtenant hereunder shall be prorated based upon the
      square footage of the premises subleased to the square footage of the
      entire Subleased Premises.  If Subtenant receives a lump sum payment in
      connection with an assignment, the amount of the payment will be allocated
      between Subtenant and Sublandlord, in the same manner taking into account
      the total rents payable during the remaining terms of the Lease and
      Sublease.

           (b) Notwithstanding the provisions set forth in subparagraph (a)
      above, Subtenant will not be obligated to pay Sublandlord any portion of
      appreciated rents until Subtenant has recovered any costs it has
      reasonably incurred in connection with the subletting of the Subleased
      Premises to any third party broker or for improvements to the Subleased
      Premises.  Any costs to be deducted from appreciated rents will be
      submitted to Sublandlord and will be subject to Sublandlord's reasonable
      approval.

           (c) The profit-sharing provision set forth in subparagraph (a) above
      is a freely negotiated agreement between Subtenant and Sublandlord
      respecting the allocation of appreciated rents.  This covenant will
      survive the expiration of the Sublease Term.

11.   Alterations; Signs.
      ------------------

      11.1  Alterations and Improvements By Subtenant.    Subtenant will not
            -----------------------------------------
make any alterations, additions or improvements to the Subleased Premises
("Alterations") without obtaining the prior written consent of Sublandlord
thereto (and, if required, by Landlord in accordance with the Lease), which
Sublandlord may grant or reasonably withhold, and to which Sublandlord may
impose any commercially reasonable conditions, in Sublandlord's reasonable
discretion.  The term "Alterations" includes any alterations, additions or
improvements made by Subtenant to comply with the ADA as required by Paragraph
1.11 above.  All Alterations must be constructed (i) in a good and workmanlike
manner using materials of a quality comparable to those on the Subleased
Premises, (ii) in conformance with all relevant codes, regulations and
ordinances and (iii) only after necessary permits, licenses and approvals have
been obtained by Subtenant from appropriate governmental agencies.  All
Alterations will be made at Subtenant's sole cost (including all costs relating
to the removal of asbestos, if any, in connection

                                       11
<PAGE>

with the Alterations) and diligently prosecuted to completion. Any contractor or
other person making any Alterations must first be approved in writing by
Sublandlord, and Sublandlord may require that all work be performed under
Sublandlord's supervision.

      11.2  Signs.    Subtenant shall not place on any portion of the Subleased
            -----
Premises any sign, placard, lettering in or on windows, banners, displays or
other advertising or communicative material which is visible from the exterior
of the Subleased Premises without the prior written approval of Sublandlord,
which consent shall not be unreasonably withheld or delayed, and, if required,
from Landlord in accordance with the Lease.  All such approved signs shall
strictly conform to all legal requirements and the Lease and shall be installed
at Subtenant's sole expense.  Subtenant shall maintain such signs in good
condition and repair.  If Subtenant fails to remove such signs upon the
expiration or earlier termination of this Sublease, or if and when required
pursuant to the terms of the Lease, this Sublease or the rules and regulations
regarding signage established by the City of San Clemente, and repair any damage
caused by such removal, Sublandlord may do so at Subtenant's expense, which
expense, together with interest thereon at the rate for late payments set forth
in Paragraph 1.10 shall be paid by Subtenant to Sublandlord upon demand.

      11.3  Disposition on Termination.  Upon the expiration of the Sublease
            --------------------------
Term or earlier termination of this Sublease, Sublandlord may elect to have
Subtenant either (i) surrender with the Subleased Premises any or all of the
Alterations as Sublandlord may determine (except personal property as provided
in Paragraph 12 below), which Alterations will become the property of
Sublandlord, or (ii) promptly remove any or all of the Alterations designated by
Sublandlord to be removed, in which case Subtenant must, at Subtenant's sole
cost, repair and restore the Subleased Premises to their condition as of the
Commencement Date, reasonable wear and tear excepted.

12.   Removal of Personal Property.  All articles of personal property, and
      ----------------------------
all business and trade fixtures, machinery and equipment, cabinet work,
furniture and movable partitions (including, but not limited to, cameras,
telephone systems, and special equipment), if any, owned or installed by
Subtenant at its expense in the Subleased Premises will be and remain the
property of Subtenant and may be removed by Subtenant at any time, provided that
Subtenant, at its expense, must repair any damage to the Subleased Premises
caused by such removal or by the original installation.  Sublandlord may elect
to require Subtenant to remove all or any part of Subtenant's personal property
at the expiration of the Sublease Term or sooner termination of this Sublease,
in which event the removal will be done at Subtenant's expense and Subtenant,
prior to the end of the Sublease Term or upon sooner termination of this
Sublease, will repair any damage to the Subleased Premises caused by its
removal.

13.   Holding Over.  If Subtenant holds over after the expiration of the
      ------------
Sublease Term or earlier termination of this Sublease, with or without the
express or implied consent of Sublandlord, then at the option of Sublandlord,
Subtenant will become and be only a month-to-month tenant at a rent equal to one
hundred and fifty percent (150%) of the rent payable by Subtenant immediately
prior to such expiration or termination, and otherwise upon the terms, covenants
and conditions herein specified.  Notwithstanding any provision to the contrary
contained herein, (i) Sublandlord expressly reserves the right to require
Subtenant to surrender possession of the Subleased Premises upon the expiration
of Sublease Term or upon the earlier termination of this Sublease and the right
to assert

                                       12
<PAGE>

any remedy at law or in equity to evict Subtenant and/or collect damages in
connection with any holding over, and (ii) Subtenant will indemnify, defend and
hold Sublandlord harmless from and against any and all liabilities, claims,
demands, actions, losses, damages, obligations, costs and expenses, including,
without limitation, attorneys' fees (including the allocated costs of
Sublandlord's in-house attorneys) incurred or suffered by Sublandlord by reason
of Subtenant's failure to surrender the Subleased Premises on the expiration of
the Sublease Term or earlier termination of this Sublease.

14.   Liens.  Subtenant will keep the Subleased Premises and the Building free
      -----
from any liens arising out of any work performed, materials furnished, or
obligations incurred by Subtenant.  If a lien is filed, Subtenant will discharge
the lien or post a bond within ten (10) days after the date of filing.
Sublandlord has the right to post and keep posted on the Subleased Premises any
notices that may be provided by law or which Sublandlord may deem to be proper
for the protection of Sublandlord, the Subleased Premises and the Building from
such liens.

15.   Maintenance and Repairs.  At all times during the Sublease Term,
      -----------------------
Subtenant, at its sole cost, will maintain the Subleased Premises and every part
thereof and all equipment, fixtures and improvements therein in good condition
and repair. At the end of the Sublease Term, Subtenant will surrender the
Subleased Premises in as good condition as when received, reasonable wear and
tear excepted. Subtenant will be responsible for all repairs required to be
performed by the Tenant under the Lease.

16.   Insurance.
      ---------

      16.1  Coverage.  At all times during the Sublease Term, Subtenant will,
            --------
at its sole cost, procure and maintain the following types and amounts of
insurance coverage (but in no event less than the types and amounts of amounts
of coverage required from time to time under the Lease):

           (a) Comprehensive general liability insurance against any and all
      damages and liability, including attorneys' fees on account or arising out
      of injuries to or the death of any person or damage to property, however
      occasioned, in, on or about the Subleased Premises with at least a single
      combined liability and property damage limit of $2,000,000.

           (b) Insurance on all plate or tempered glass in or enclosing the
      Subleased Premises, for the full replacement cost of such glass.

           (c) Insurance adequate in amount to cover damage to the Subleased
      Premises including, without limitation, Subtenant's leasehold
      improvements, trade fixtures, furnishings, equipment, goods and inventory.

           (d) Rent insurance in an amount equal to all rent and other sums or
      charges payable under this Sublease for a period of at least twelve (12)
      months commencing with the date of loss.

           (e) Employer's liability insurance and worker's compensation
      insurance as required by applicable law.

                                       13
<PAGE>

           (f) Any other insurance required under the Lease to the extent not
      covered in subsections (a)-(e) above.

      16.2  Policies.  All insurance required to be carried by Subtenant must
            --------
be in a form reasonably satisfactory to Sublandlord and carried with companies
reasonably acceptable to Sublandlord.  Subtenant must provide Sublandlord with a
certificate of insurance (or, at Sublandlord's request, a copy of the policy)
showing Sublandlord (and Landlord, if requested) as additional insureds on all
policies of insurance excluding the insurance required under Paragraph 16.1(e).
The certificate must provide for a thirty (30) day written notice to Sublandlord
in the event of cancellation or material change of coverage.

      16.3  Subrogation.  Sublandlord and Subtenant will each obtain from
            -----------
their respective insurers under all policies of insurance maintained by either
of them at any time during the Sublease Term pursuant to this Sublease insuring
or covering loss of or damage to the parties, their property or the Subleased
Premises (to the extent such loss or damage is covered by insurance) a waiver of
all rights of subrogation which the insurer of one party might otherwise have,
if at all, against the other party.

      16.4  Primary Coverage.    All insurance to be maintained by Subtenant
            ----------------
shall be primary, without right of contribution from any insurance maintained by
Sublandlord.

17.   Events of Default.    If one or more of the following events ("Event of
      -----------------
Default") occurs, such occurrence constitutes a breach of this Sublease by
Subtenant:

           (a) Subtenant abandons or vacates the Subleased Premises; or

           (b) Subtenant fails to pay any installment of Basic Monthly Rent or
      Operating Expenses and Taxes, if applicable, as and when the same become
      due and payable, and such failure continues for more than five (5) days
      after Sublandlord gives written notice thereof to Subtenant; or

           (c) Subtenant fails to pay any other sum or charge payable by
      Subtenant hereunder as and when the same becomes due and payable, and such
      failure continues for more than fifteen (15) days after Sublandlord gives
      written notice thereof to Subtenant; or

           (d) Subtenant fails to perform or observe any other agreement,
      covenant, condition or provision of this Sublease to be performed or
      observed by Subtenant as and when performance or observance is due, and
      such failure continues for more than thirty (30) days after Sublandlord
      gives written notice thereof to Subtenant, or if the default cannot be
      cured within said thirty (30) day period and Subtenant fails within said
      period to commence with due diligence and dispatch the curing of such
      default or, having so commenced, thereafter fails to prosecute or complete
      with due diligence and dispatch the curing of such default; or

           (e) Subtenant (i) files or consents by answer or otherwise to the
      filing against it of a petition for relief or reorganization or
      arrangement or any other petition in bankruptcy or liquidation or to take
      advantage of any bankruptcy or insolvency law of any jurisdiction; (ii)
      makes an assignment for the benefit of its

                                       14
<PAGE>

      creditors; (iii) consents to the appointment of a custodian, receiver,
      trustee or other officer with similar powers of itself or of any
      substantial part of its property; or (iv) takes action for the purpose of
      any of the foregoing; or

           (f) A court or governmental authority of competent jurisdiction,
      without consent by Subtenant, enters an order appointing a custodian,
      receiver, trustee or other officer with similar powers with respect to it
      or with respect to any substantial portion of its property, or
      constituting an order for relief or approving a petition for relief or
      reorganization or any other petition in bankruptcy or insolvency law of
      any jurisdiction, or ordering the dissolution, winding up or liquidation
      of Subtenant, or if any such petition is filed against Subtenant and such
      petition is not dismissed within sixty (60) days; or

           (g) This Sublease or any estate of Subtenant hereunder is levied upon
      under any attachment or execution and such attachment or execution is not
      vacated within sixty (60) days.

18.   Remedies of Sublandlord on Default.
      ----------------------------------

      18.1  Termination of Sublease.  In the event of any breach of this
            -----------------------
Sublease by Subtenant, Sublandlord may, at its option, terminate the Sublease
and recover from Subtenant:

           (a) the worth at the time of award of the unpaid rent which had been
      earned at the time of termination; plus

           (b) the worth at the time of award of the amount by which the unpaid
      rent which would have been earned after termination until the time of the
      award exceeds the amount of such rental loss that Subtenant proves could
      have been reasonably avoided; plus

           (c) the worth at the time of award of the amount by which the unpaid
      rent for the balance of the Sublease Term after the time of award exceeds
      the amount of such rental loss that Subtenant proves could be reasonably
      avoided; plus

           (d) any other amount necessary to compensate Sublandlord for all
      detriment proximately caused by Subtenant's failure to perform its
      obligations under this Sublease or which in the ordinary course of things
      would be likely to result therefrom (specifically including, without
      limitation, the unamortized portion of any brokerage commissions paid by
      Sublandlord for this Sublease, brokerage commissions and advertising
      expenses incurred for a new sublease, expenses of remodeling the Subleased
      Premises or any portion thereof for a new subtenant, whether for the same
      or a different use, and any special concessions made to obtain a new
      subtenant); and

           (e) at Sublandlord's election, such other amounts in addition to or
      in lieu of the foregoing as may be permitted from time to time under the
      laws and judicial decisions of the State in which the Subleased Premises
      are located.

                                       15
<PAGE>

The term "rent" as used in this Paragraph 18.1 will be deemed to be and to mean
all sums of every nature required to be paid by Subtenant pursuant to the terms
of this Sublease, whether to Sublandlord or to others.  As used in subparagraphs
(a) and (b) above, the "worth at the time of the award" will be computed by
allowing interest at the rate of 12% per annum.  As used in subparagraph (c)
above, the "worth at the time of the award" will be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of the award plus one percent (1%).  If Sublandlord terminates this
Sublease or Subtenant's right to possession, Sublandlord will use reasonable
efforts to mitigate Sublandlord's damages, and Subtenant will be entitled to
submit proof of Sublandlord's failure to mitigate as a defense to Sublandlord's
claims hereunder, if mitigation of damages by Sublandlord is required by
applicable law.

      18.2  Continue Sublease in Effect.  Sublandlord will have the remedy
            ---------------------------
described in California Civil Code Section 1951.4 (a lessor may continue lease
in effect after lessee's breach and abandonment and recover rent as it becomes
due, if lessee has the right to sublet or assign, subject only to reasonable
limitations).  Accordingly, if Sublandlord does not elect to terminate this
Sublease on account of any default by Subtenant, Sublandlord may, from time to
time, without terminating this Sublease, enforce all of its rights and remedies
under this Sublease, including the right to recover all rent as it becomes due.
If the default continues, Sublandlord may, at any time thereafter, elect to
terminate the Sublease.  Sublandlord will not be deemed to have terminated this
Sublease or the liability of Subtenant to pay rent or any other amounts due
hereunder by any reentry or by any action in unlawful detainer, unless
Sublandlord has specifically notified Subtenant in writing that Sublandlord has
elected to terminate this Sublease.

      18.3  Other Remedies.  Sublandlord will at all times have the rights and
            --------------
remedies (which will be cumulative with each other and cumulative and in
addition to those rights and remedies available under Paragraphs 18.1 and 18.2
above, or under any law or other provision of this Sublease), without prior
demand or notice except as required by applicable law, to seek any declaratory,
injunctive or other equitable relief, and specifically enforce this Sublease, or
restrain or enjoin a violation or breach of any provision hereof.

19.   Estoppel Certificates.
      ---------------------

      19.1  Obligation to Provide.  Subtenant will at any time upon not less
            ---------------------
than ten (10) days' prior written notice from Sublandlord execute, acknowledge
and deliver to Sublandlord a statement in writing (i) certifying that this
Sublease is unmodified and in full force and effect (or, if modified, stating
the nature of such modification and certifying that this Sublease, as so
modified, is in full force and effect), the amount of any security deposit, and
the date to which the rent and other charges are paid in advance, if any, and
(ii) acknowledging that there are not, to Subtenant's knowledge, any uncured
defaults on the part of Sublandlord hereunder or of Landlord under the Lease, or
specifying such defaults if any are claimed.  Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Subleased Premises.

      19.2  Failure to Provide.  At Sublandlord's option, Subtenant's failure
            ------------------
to deliver a statement within the time required by Paragraph 19.1 above, will be
conclusive upon Subtenant (i) that this Sublease is in full force and effect,
without modification except as may be represented by Sublandlord, (ii) that
there are no uncured defaults in Sublandlord's performance hereunder or in
Landlord's performance under the Lease, and

                                       16
<PAGE>

(iii) that not more than one month's rent has been paid in advance, or such
failure may be considered by Sublandlord as a material default by Subtenant
under this Sublease.

      19.3  Financial Information.  If the Landlord desires to finance,
            ---------------------
refinance, or sell the Subleased Premises, or any part thereof, Subtenant hereby
agrees to deliver to any lender or purchaser designated by Landlord such
financial statements of Subtenant as may be reasonably required by such lender
or purchaser including, without limitation, the past three years' financial
statements of Subtenant.

      19.4  Sublandlord Estoppel.  If required by a regulatory or governmental
            --------------------
agency, Sublandlord will upon not less than fifteen (15) days' prior written
notice from Subtenant execute, acknowledge and deliver to Subtenant a statement
in writing (i) certifying that this Sublease is unmodified and in full force and
effect (or, if modified, stating the nature of such modification and certifying
that this Sublease, as so modified, is in full force and effect), the amount of
any security deposit, and the date to which the rent and other charges are paid
in advance, if any, and (ii) acknowledging that there are not, to Sublandlord's
knowledge, any uncured defaults on the part of Subtenant hereunder or of
Landlord under the Lease, or specifying such defaults if any are claimed.

20.   Real Estate Brokers.  Each party warrants to the other that there are no
      -------------------
brokerage commissions or fees payable in connection with this Sublease except to
the Brokers identified in Paragraph 1.15.  Each party further agrees to
indemnify and hold the other party harmless, from any cost, liability and
expense (including attorneys' fees and litigation and court costs) which the
other party may incur as the result of any breach of this Paragraph 20.

21.   Miscellaneous.
      -------------

      21.1  Counterparts.  This Sublease may be executed in one (1) or more
            ------------
counterparts, and all of the counterparts shall constitute but one and the same
agreement, notwithstanding that all parties hereto are not signatory to the same
or original counterpart.

      21.2  Construction.  The parties acknowledge that each party and its
            ------------
counsel have reviewed and revised this Sublease and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Sublease or
any amendment or exhibits hereto.

      21.3  Notices. All notices or other communications required or permitted
            -------
hereunder must be in writing, and be personally delivered (including by means of
professional messenger service) or sent by registered or certified mail, postage
prepaid, return receipt requested to the addresses set forth in Paragraph 1.12.
All notices will be deemed received on the date sent.

      21.4  Governing Law.  This Sublease shall be governed by and construed
            -------------
in accordance with the laws of the State of California.

                                       17
<PAGE>

      21.5  Exhibits.  All exhibits and any schedules or riders attached to
            --------
this Sublease are incorporated herein by this reference and made a part hereof,
and any reference in the body of the Sublease or in the exhibits, schedules or
riders to the Sublease shall mean this Sublease, together with all exhibits,
schedules and riders.

      21.6  Waiver of Trial by Jury.  Subtenant and Sublandlord hereby waive
            -----------------------
any and all rights they may have under applicable law to trial by jury with
respect to any dispute arising directly or indirectly in connection with this
Sublease, the Lease, or the Subleased Premises.

      21.7 Prohibition on Solicitation of Sublandlord's Customers.
           ------------------------------------------------------
Subtenant hereby acknowledges that Sublandlord or First Interstate Bank operated
a branch banking facility at the Subleased Premises ("Sublandlord's Branch
Bank") prior to Sublandlord's decision to consolidate its bank business at the
Subleased Premises into another location within the geographical proximity of
the Subleased Premises and to market the Subleased Premises for sublease. As
material consideration for Sublandlord entering into this Sublease, Subtenant
covenants and agrees that neither Subtenant nor any potential sub-subtenant (or
other user) of Subtenant shall engage in any of the following activities: (a) at
any time prior to the Commencement Date, any activities that are specifically
directed at prior customers of Sublandlord's Branch Bank for the purpose of
soliciting the banking business of such prior customers including without
limitation (i) install, distribute, broadcast or otherwise display or
disseminate any signs, brochures, advertising leaflets, promotional displays,
broadcasts, banners, flashing or blinking lights, press releases, news
conferences, or other marketing material, devices, tactics or information at the
Subleased Premises or relating to or referring to the Subleased Premises or any
proprietary property or within the same market area; or (ii) use or advertise
the Subleased Premises address; and (b) at any time whether prior to or on or
after the Commencement Date use the trade or service name, logo or marks of WFB,
Wells Fargo, Wells Fargo Bank, Wells Fargo & Company, the Wells Fargo
stagecoach, the stagecoach, First Interstate Bank, First Interstate, FIB or any
combination of the foregoing at any time without Sublandlord's consent, which
may be withheld in its sole discretion. The breach of the covenant set forth in
this Paragraph 21.7 by Subtenant or any potential sub-subtenant (or other user)
of Subtenant shall be a non-curable Event of Default under this Sublease and, in
addition to any other remedies available to Sublandlord at law or in equity,
Sublandlord shall have the right to terminate this Sublease in accordance with
Paragraph 18.1 above. Sublandlord shall be entitled to recover reasonable
attorneys' fees and litigation and court costs related to its enforcement of the
terms of this Paragraph 21.7.

                              (Signature page follows)

                                       18
<PAGE>

      IN WITNESS WHEREOF, Sublandlord and Subtenant have executed this Sublease
as of the date(s) set forth below.

                            SUBLANDLORD

                            Wells Fargo Bank, N.A., a national banking
                            association

                            By:   /s/ Debra A. Broido
                               ---------------------------------

                            Name: Debra A. Broido
                                 -------------------------------

                            Title:   Vice President
                                  ------------------------------

                            Date:     8/9/99
                                 -------------------------------

                            By:   /s/ Judy Fishman
                               ---------------------------------

                            Name:    Judy Fishman
                                 -------------------------------

                            Title:     Vice President
                                  ------------------------------

                            Date:      8/9/99
                                 -------------------------------

                            SUBTENANT

                            Pacific Mercantile Bank, a California banking
                            corporation

                            By:   /s/ John McCauley
                               ---------------------------------

                            Name:     John McCauley
                                 -------------------------------

                            Title:   Executive Vice President
                                  ------------------------------

                            Date:      8/5/99
                                 -------------------------------

                            By:   /s/ Raymond E. Dellerba
                               ---------------------------------

                            Name:    Raymond E. Dellerba
                                 -------------------------------

                            Title:     President & CEO
                                  ------------------------------

                            Date:      8-5-99
                                 -------------------------------

                                       19
<PAGE>

                              CONSENT OF LANDLORD
                              -------------------

          Earl E. Miller and Karen L. Miller, Trustees of the Miller Family
Trust ("Landlord"), hereby consents to the subletting of the Subleased Premises
pursuant to the foregoing Sublease and represents and warrants to Sublandlord
and Subtenant that no other consents to the foregoing Sublease are required,
including, without limitation, the consent of any lender on the Subleased
Premises.  Landlord agrees that in the event of a default by Sublandlord as
Tenant under the Lease, Landlord will provide concurrent notice of such default
to Subtenant.

Date:  8/25/99              LANDLORD
     --------------

                            By:   /s/ Earl E. Miller, Trustee
                               ------------------------------------------------
                               Earl E. Miller, Trustee of the Miller Family
                               Trust

                            By:   /s/ Karen L. Miller, Trustee
                               -------------------------------------------------
                               Karen L. Miller, Trustee of the Miller Family
                               Trust

                                       20

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