STANDARD FORM OFFICE LEASE BETWEEN CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM, a public entity, the Landlord, AND PACIFIC MERCANTILE BANK, a California corporation the Tenant Dated: March 9, 2001 For Premises Located At 9720 Wilshire Boulevard,...

EXHIBIT 10.11

EXECUTION ORIGINAL

STANDARD FORM OFFICE LEASE

BETWEEN

CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM,

a public entity,

the Landlord,

AND

PACIFIC MERCANTILE BANK,

a California corporation

the Tenant

Dated: March 9, 2001

For Premises Located

At 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx

TABLE OF CONTENTS

		Page
1.	DEFINED TERMS	1
2.	PREMISES DEMISED	3
3.	INITIAL TERM/OPTION TERM	3
4.	SECURITY	5
5.	RENT	7
6.	INITIAL CONSTRUCTION	11
7.	REPAIRS & ALTERATIONS	12
8.	FIRE OR CASUALTY DAMAGE	14
9.	INSURANCE	16
10.	WAIVER AND INDEMNIFICATION	18
11.	USE OF PREMISES	19
12.	SIGNS	21
13.	ASSIGNMENT AND SUBLETTING	23
14.	EMINENT DOMAIN	25
15.	WAIVER AND SEVERABILITY	25
16.	USE OF COMMON FACILITIES	25
17.	SERVICES	26
18.	ENTRY OF LANDLORD	27
19.	INTENTIONALLY OMITTED	27
20.	SUBORDINATION AND ATTORNMENT	27
21.	ESTOPPEL CERTIFICATES	28
22.	BUILDING RULES AND REGULATIONS	28
23.	NOTICES	28
24.	EVENTS OF XXXXXXX	00
00.	LANDLORD’S REMEDIES	29
26.	RIGHT OF LANDLORD TO CURE TENANT’S XXXXXXX	00
00.	COMPLIANCE WITH LAW	30
28.	BENEFIT	31
29.	PROHIBITION AGAINST RECORDING	31
30.	TRANSFER OF LANDLORD’S INTEREST	31
31.	FORCE MAJEURE	31
32.	LANDLORD EXCULPATION	32
33.	BUILDING RENOVATIONS	32
34.	ATTORNEYS’ FEES	33
35.	SURRENDER OF THE PREMISES	33
36.	HOLDING OVER	33
37.	JOINT AND SEVERAL	34
38.	GOVERNING LAW	34
39.	SUBMISSION OF LEASE	34
40.	BROKERS	34
41.	HAZARDOUS MATERIALS	34
42.	LANDLORD’S RESERVATIONS	35
43.	PARKING	35
44.	INTENTIONALLY OMITTED	35

(i)

		Page
45.	CONFIDENTIALITY	36
46.	INTERPRETATION OF LEASE	36
47.	ACKNOWLEDGMENT, REPRESENTATION AND WARRANTY REGARDING PROHIBITED TRANSACTIONS	36

EXHIBITS AND ATTACHMENTS

Exhibit A Outline of Premises

Exhibit B Tenant Work Letter

Exhibit C Notice of Lease Term Dates

Exhibit D Rules and Regulations

Exhibit E Form of Certificate of Deposit

(ii)

STANDARD FORM OFFICE LEASE

This Standard Form Office Lease (this “Lease”) is made as of March 9, 2001 (the “Lease Date”), by CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM, a public entity (“Landlord”), and PACIFIC MERCANTILE BANK, a California corporation (“Tenant”).

Landlord and Tenant, intending to be legally bound, and in consideration of their mutual covenants and all conditions of this Lease, covenant and agree as follows.

BASIC LEASE PROVISIONS

1. DEFINED TERMS

In this Lease the following terms have the meanings set forth below.

1.1 Premises. Approximately 4,564 rentable (4,193 usable) square feet, consisting of the ground floor of the Building, Suite 100, as outlined on Exhibit A attached to and a part of this Lease.

1.2 Building. The building containing approximately 54,779 rentable square feet, and all future alterations, additions, improvements, restorations or replacements, with an address of 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000.

1.3 Term. Five (5) years.

1.4 Commencement Date. May 16, 2001, subject to adjustment as set forth in Article 3.

1.5 Expiration Date. May 15, 2006, subject to adjustment as set forth in Article 3.

1.6 Base Rent.

Lease Year	Monthly Installment of Base Rent		Annual Base Rent
1	$	16,202.20	$	194,426.40
2	$	16,704.24	$	200,450.88
3	$	17,206.28	$	206,475.36
4	$	17,708.32	$	212,499.84
5	$	18,256.00	$	219,072.00

1.7 Security Deposit.

1.7.1	Cash Security Deposit	$	18,256.00

1.7.2	Certificate of Deposit (Subject to Section 4.2)	$	100,000.00

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1.8 Base Year. The Base Year for calculation of Operating Costs shall be calendar year 2001.

1.9 Tenant’s Proportionate Share of Operating Costs. 8.33% of the Operating Costs as defined in Article 5 allocable to the Building, based upon the rentable square feet of the Premises, compared to the total rentable square feet of the Building.

1.10 Permitted Use. General office or retail banking use only, consistent with a first class office building.

1.11 Tenant’s Trade Name. Pacific Mercantile Bank.

1.12 Broker(s). Landlord’s: CB Xxxxxxx Xxxxx Investors.

Tenant’s: American Safety Financial Corp.

1.13 Guarantor(s): None.

1.14 Hours of Service (Section 17.1). The hours of service for the Building shall be between 8:00 a.m. and 6:00 p.m., Monday through Friday, and between 9:00 a.m. and 1:00 p.m. on Saturday.

1.15 Landlord’s Address.

CB Xxxxxxx Xxxxx Investors

000 Xxxxx Xxxxxxxx Xxxxxx

Xxxxx 0000

Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000

Attention: Portfolio Manager

1.16 Tenant’s Address.

Before and after occupancy:

Pacific Mercantile Bank

000 Xxxxxxx Xxxxxx Xxxxx

Xxxxx 000

Xxxxxxx Xxxxx, Xxxxxxxxxx 00000

Attention: Chief Financial Officer

With a copy to:

Xxxxxxx Xxxxx, Esq.

000 Xxxxxxx Xxxxxx Xxxxx

Xxxxx 000

Xxxxxxx Xxxxx, Xxxxxxxxxx 00000

1.17 Parking. Not less than ten (10) nor more than fifteen (15) unreserved spaces, and four (4) reserved spaces.

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1.18 Amount due on Execution of Lease. Upon Tenant’s execution of this Lease, Tenant shall pay the following amount to Landlord:

Monthly Rent: (For the First Month of the Term)	$	16,202.20
Security Deposit:	$	18,256.00

TOTAL DUE ON EXECUTION OF LEASE	$	34,458.20

2. PREMISES DEMISED

Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the premises described in Section 1.1 (“Premises”) on the terms and conditions set forth in this Lease (including all exhibits and attachments hereto, which are incorporated herein by reference). Tenant’s obligations under this Lease shall commence as of the Lease Date, except as otherwise expressly provided in this Lease. As used in this Lease, the term “Project” includes the Building, adjoining parking areas and garages, if any, and the surrounding land and air space which are the site and grounds for the Building and parking areas and garages.

3. INITIAL TERM/OPTION TERM

3.1 Initial Term. The Term, Commencement Date and Expiration Date shall be as specified in Sections 1.3, 1.4, and 1.5, respectively. However, the Commencement Date shall be adjusted if necessary, and documented in the form of Exhibit C attached hereto, to the earlier of: (a) the date the “Tenant Improvements” are “Substantially Complete” as those terms are defined in the Tenant Work Letter, attached hereto as Exhibit B; or (b) the date Tenant takes possession of the Premises, and the Expiration Date shall be adjusted accordingly. For purposes of this Lease, the term “Lease Year” shall mean each consecutive twelve (12) month period during the Term, commencing on the Commencement Date. The terms and provisions of this Lease shall be effective as of the Lease Date.

3.2 Option Term.

3.2.1 Option Right. Landlord hereby grants the Tenant named in the Summary (the “Original Tenant”) one (1) option to extend the Term for a period of five (5) years (the “Option Term”), which option shall be exercisable only by written notice delivered by Tenant to Landlord as provided below, provided that, as of the date of delivery of such notice, Tenant is not in default under this Lease and Tenant has not previously been in default under this Lease. Upon the proper exercise of such option to extend, and provided that, as of the end of the initial Term, Tenant is not in default under this Lease and Tenant has not previously been in default under this Lease, the Term, for the entire Premises then being leased by Tenant, shall be extended for a period of five (5) years. The rights contained in this Section 3.2 shall be personal to Original Tenant and may only be exercised by Original Tenant (and not any assignee, sublessee or other transferee of the Original Tenant’s interest in this Lease) if Original Tenant occupies the entire Premises.

3.2.2 Option Rent. The Rent payable by Tenant during the Option Term (the “Option Rent”) shall be equal to one hundred percent (100%) of the base rent (plus any additional rent applicable thereto), including all escalations, at which tenants, as of the commencement of the Option Term, are leasing non-sublease, non-encumbered space comparable in size, location and quality to the Premises for a comparable term, which

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comparable space is located in the Building and in comparable first-class buildings in the area of Beverly Hills, California, bounded on the north by Santa Xxxxxx Boulevard, on the south and west by Wilshire Boulevard, and on the east by Xxxxxxx Drive (“Comparable Buildings”), taking into consideration the following concessions: (a) rental abatement concessions, if any, being granted such tenants in connection with such comparable space and (b) tenant improvements or allowances provided or to be provided for such comparable space, taking into account, and deducting the value of, the existing improvements in the Premises, such value to be based upon the age, quality and layout of the improvements and the extent to which the same could be utilized by Tenant based upon the fact that the precise tenant improvements existing in the Premises are specifically suitable to Tenant.

3.2.3 Exercise of Option. The option contained in this Section 3.2 shall be exercised by Tenant, if at all, and only in the following manner: (i) Tenant shall deliver written notice to Landlord not less than twelve (12) months prior to the expiration of the initial Term stating that Tenant is interested in exercising its option; (ii) Landlord, after receipt of Tenant’s notice, shall deliver notice (the “Option Rent Notice”) to Tenant not less than ten (10) months prior to the expiration of the initial Term setting forth the Option Rent; and (iii) if Tenant wishes to exercise such option, Tenant shall, on or before the earlier of (A) the date occurring nine (9) months prior to the expiration of the initial Term and (B) the date occurring thirty (30) days after Tenant’s receipt of the Option Rent Notice, exercise the option by delivering written notice thereof to Landlord and upon, and concurrent with, such exercise, Tenant may, at its option, object to the Option Rent contained in the Option Rent Notice, in which case the parties shall follow the procedure, and the Option Rent shall be determined, as set forth in Section 3.2.4 below.

3.2.4 Determination of Option Rent. In the event Tenant timely and appropriately objects to the Option Rent, Landlord and Tenant shall attempt to agree upon the Option Rent using their best good-faith efforts. If Landlord and Tenant fail to reach agreement within ten (10) business days following Tenant’s objection to the Option Rent (the “Outside Agreement Date”), then each party shall make a separate determination of the Option Rent within five (5) business days after the applicable Outside Agreement Date, and such determinations shall be submitted to arbitration in accordance with Sections 3.2.4.1 through 3.2.3.7 below.

3.2.4.1 Landlord and Tenant shall each appoint one arbitrator who shall be a real estate broker who shall have been active over the five (5) year period ending on the date of such appointment in the leasing of Comparable Buildings. The determination of the arbitrators shall be limited solely to the issue of whether Landlord’s or Tenant’s submitted Option Rent, is the closest to the actual Option Rent, as determined by the arbitrators, taking into account the requirements of Section 3.2.2 of this Lease. Each such arbitrator shall be appointed within fifteen (15) days after the applicable Outside Agreement Date.

3.2.4.2 The two (2) arbitrators so appointed shall within ten (10) days of the date of the appointment of the last appointed arbitrator agree upon and appoint a third arbitrator who shall be qualified under the same criteria set forth hereinabove for qualification of the initial two (2) arbitrators.

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3.2.4.3 The three (3) arbitrators shall within thirty (30) days of the appointment of the third arbitrator reach a decision as to whether the parties shall use Landlord’s or Tenant’s submitted Option Rent and shall notify Landlord and Tenant thereof.

3.2.4.4 The decision of the majority of the three (3) arbitrators shall be binding upon Landlord and Tenant.

3.2.4.5 If either Landlord or Tenant fails to appoint an arbitrator within fifteen (15) days after the applicable Outside Agreement Date, then the arbitrator appointed by one of them shall reach a decision, notify Landlord and Tenant thereof, and such arbitrator’s decision shall be binding upon Landlord and Tenant.

3.2.4.6 If the two (2) arbitrators fail to agree upon and appoint a third arbitrator, or if both parties fail to appoint an arbitrator, then the appointment of the third arbitrator or any arbitrator shall be dismissed and the matter to be decided shall be forthwith submitted to arbitration under the provisions of the American Arbitration Association, but subject to the instruction set forth in this Section 3.2.4.

3.2.4.7 The cost of the arbitration shall be paid by Landlord and Tenant equally.

4. SECURITY

4.1 Cash Security Deposit. Concurrently with Tenant’s execution of this Lease, Tenant shall deposit with Landlord in the amount set forth in Section 1.7, a cash security deposit for the performance of all of Tenant’s obligations under this Lease. Upon expiration of the Term, Landlord shall (provided that Tenant is not in default under this Lease) return the cash security deposit to Tenant, less such portion as Landlord shall have appropriated to make good any default by Tenant. Landlord shall have the right, but not the obligation, to apply all or any portion of the cash security deposit to cure any Tenant default at any time, in which event Tenant shall be obligated to restore the security deposit to its original amount within ten (10) business days receipt of after written notice from Landlord, and Tenant’s failure to do so shall be deemed to be a material default of this Lease. Tenant hereby waives the provisions of Section 1950.7 of the California Civil Code, and all other provisions of law, now or hereafter in force, which provide that Landlord may claim from a security deposit only those sums reasonably necessary to remedy defaults in the payment of rent, to repair damage caused by Tenant or to clean the Premises, it being agreed that Landlord may, in addition, claim those sums reasonably necessary to compensate Landlord for any other loss or damage, foreseeable or unforeseeable, caused by the act or omission of Tenant or any officer, employee, agent or invitee of Tenant.

4.2 Certificate of Deposit.

4.2.1 Delivery of Certificate of Deposit. Tenant shall deliver to Landlord, concurrent with Tenant’s and Landlord’s execution and delivery of this Lease, a certificate of deposit from Sanwa Bank or another bank reasonably acceptable to Landlord (an “Approved Bank”) made payable to Landlord, in the form attached hereto as Exhibit E (the “C-D”), which C-D shall be in the minimum amount of One Hundred Thousand and No/100 Dollars ($100,000.00) (the “C-D Amount”). Tenant shall pay all expenses, points

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and/or fees incurred by Tenant in obtaining the C-D. The total amount of the C-D shall be sufficient that when cashed or drawn by Landlord, less any penalties for early withdrawal, shall be equal to the C-D Amount. Interest on the C-D shall be payable to the account of Tenant. During the Term of the Lease during which Tenant is required to maintain the C-D, Tenant shall have the right to replace the C-D with another C-D from an Approved Bank, so long as, at all times, the aggregate amount of the C-D (including any penalties for early withdrawal of any certificate of deposit), is equal to the C-D Amount. Landlord agrees to accompany Tenant and present the C-D at the applicable Approved Bank as reasonably necessary to allow Tenant to acquire a replacement certificate of deposit from that bank or from another Approved Bank. Tenant acknowledges that the C-D shall be the property of Landlord, however, in the event that the C-D is deemed not to be the property of Landlord, then Tenant acknowledges that Landlord has a security interest in the C-D in accordance with Article 9 of the California Commercial Code. In the event that Landlord is required by any lender with an interest in the Project to cause the C-D to be issued in the name of such lender or transferred to such lender, or in the event of a sale of the Project or of Landlord’s interest in the Project, Tenant shall cooperate with Landlord in order to cause the C-D to be transferred to such lender or purchaser, or reissued in the name of such lender or purchaser, provided that such lender or purchaser recognizes and agrees to recognize Tenant’s rights under this Section 4.2. Tenant acknowledges that neither the C-D nor the C-D Security Deposit (defined below) shall constitute a security deposit.

4.2.2 Application of Certificate of Deposit. The C-D delivered by Tenant pursuant to this Section 4.2 shall be held by Landlord as security for the faithful performance by Tenant of all the terms, covenants, and conditions of this Lease to be kept and performed by Tenant during the first Lease Year, subject to the provisions of Section 4.2.3 below. The C-D shall not be mortgaged, assigned or encumbered in any manner whatsoever by Tenant without the prior written consent of Landlord. If Tenant is in default with respect to any provisions of this Lease, including, but not limited to, the provisions relating to the payment of Rent, Landlord may, but shall not be required to, cash or draw upon any C-D held by Landlord. Additionally, if Tenant fails to reasonably cooperate with Landlord to transfer the C-D to Landlord’s lender or a subsequent purchaser of the Project, as set forth in this Section 4.2, Landlord shall have the right to cash or draw all or any portion of the C-D, and hold such amounts as the C-D Security Deposit, in order to transfer such C-D Security Deposit to such subsequent purchaser.

4.2.3 C-D Security Deposit. To the extent any amounts drawn under Section 4.2.2, above, are not applied to the particular Event of Default by Tenant, the remainder shall be held by Landlord as the “C-D Security Deposit”, as such term is defined below. In the event of an Event of Default by Tenant, Landlord shall not first be required to proceed against the C-D and Tenant’s provision of the C-D shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled. Any amount of the C-D which is drawn upon by Landlord, but is not used or applied by Landlord, shall be held by Landlord in an interest bearing account with interest accruing to the benefit of Tenant and deemed a security deposit (the “C-D Security Deposit”). If any portion of the C-D is drawn upon and used, Tenant shall, within ten (10) business days after written demand therefor by Landlord, as Tenant shall choose, either (i) deposit cash (which cash shall be applied by Landlord to the C-D Security Deposit), or an additional C-D with Landlord in an amount sufficient to cause the sum of (a) C-D Security Deposit, (b) the amount of the remaining C-D and (c) the additional amount so deposited, to be equivalent to the amount of the C-D Amount, or (ii) reinstate the C-D to the C-D Amount (in which event the sum of the C-D Security Deposit shall be returned to Tenant). If any portion of the C-D Security Deposit is used or applied to cure a particular Event of Default, Tenant shall, within ten (10) business days after written demand by Landlord therefor, deposit cash with

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Landlord (which cash shall be applied by Landlord to the C-D Security Deposit) in an amount sufficient to restore the sum of the C-D Security Deposit, and the C-D to the C-D Amount. Tenant’s failure to so restore the sum of the C-D Security Deposit, and the C-D to the C-D Amount, which continues for ten (10) business days following notice from Landlord, shall be an Event of Default under this Lease. Tenant acknowledges that Landlord has the right to transfer or mortgage its interest in the Project and the Building and in this Lease and Tenant agrees that in the event of any such transfer or mortgage, Landlord shall have the right to transfer or assign the C-D Security Deposit and/or the C-D (with any bank charges or interest penalties incurred due to Landlord’s transfer to be paid by Landlord) to such transferee or mortgagee, and in the event of such transfer, Tenant shall look solely to such transferee (as the new Landlord hereunder) or to Landlord (in the case of a transfer to mortgagee) for the return of the C-D Security Deposit and/or the C-D. Tenant shall, within fifteen (15) business days of request by Landlord, execute such further instruments or assurances as Landlord may reasonably deem necessary to evidence or confirm Landlord’s transfer or assignment of the C-D Security Deposit, the and/or the C-D, to such transferee or mortgagee. Notwithstanding anything to the contrary in this Section 4.2, and provided that Tenant is not then in default under this Lease, Landlord shall return the C-D and any C-D Security Deposit then held by Landlord within ten (10) days following the expiration of the first Lease Year, and shall execute all documents and take all acts necessary for the transfer of the interest in the C-D back to Tenant, including accompanying Tenant and presenting the C-D to the bank for purposes of such transfer.

5. RENT

5.1 Tenant agrees to pay the Base Rent set forth in Section 1.6 for each month of the Term, payable in advance on the first day of each month (and shall be delinquent and subject to late charges if not received by Landlord within five (5) days following the date due), commencing with the Commencement Date, without any deduction or setoff whatsoever. All payments of Rent (as defined in Section 5.4) shall be payable in lawful U.S. money. Payments shall not be deemed received until actual receipt thereof by Landlord. If the Commencement Date is not the first day of a month, or if the Expiration Date is not the last day of a month, a prorated monthly installment shall be paid at the then current rate for the fractional month during which this Lease commences or terminates. At the time of execution of this Lease by Tenant, Tenant shall pay all money due to Landlord as set forth in Article 1.

5.2 Intentionally deleted.

5.3 Intentionally deleted.

5.4 In addition to Base Rent, for each calendar year beginning after the Base Year, Tenant shall pay to Landlord on the first day of each and every month of this Lease, one-twelfth (l/12th) of the Landlord’s reasonable estimate of Tenant’s Proportionate Share of the Operating Costs for that calendar year in excess of the actual Base Year Operating Costs. The rentable area in the Building and the rentable area in the Premises, and Tenant’s Proportionate

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Share of the Operating Costs are set forth in Article 1. Any discrepancy discovered after the Lease Date in connection with the square footages stated in Sections 1.1 and 1.2 shall not be a basis for a reduction or increase in the Base Rent, unless otherwise agreed in writing by Landlord and Tenant. Base Rent, Tenant’s Proportionate Share of Operating Costs, and all other amounts payable by Tenant under this Lease whether to Landlord or to others are collectively defined as the “Rent.”

5.5 “Operating Costs” shall be determined for each calendar year by taking into account on a consistent basis all costs of management, maintenance, and operation of the Project. Operating Costs shall include but not be limited to: (i) the cost of supplying all utilities, the cost of operating, maintaining, repairing, renovating and managing the utility systems, mechanical systems, sanitary and storm drainage systems, and escalator and elevator systems, and the cost of supplies and equipment and maintenance and service contracts in connection therewith; (ii) the cost of licenses, certificates, permits and inspections and the cost of contesting the validity or applicability of any governmental enactments which may affect Operating Costs, and the costs incurred in connection with the implementation and operation of a governmentally mandated transportation system management program or similar program; (iii) the cost of insurance carried by Landlord, in such amounts as Landlord may reasonably determine, including, without limitation, insurance premiums and insurance deductibles paid or incurred by Landlord; (iv) fees, charges and other costs, including management fees, consulting fees, legal fees and accounting fees, of all persons engaged by Landlord or otherwise reasonably incurred by Landlord in connection with the management, operation, maintenance and repair of the Project; (v) wages, salaries and other compensation and benefits of all persons engaged in the operation, maintenance or security of the Building, and employer’s Social Security taxes, unemployment taxes or insurance, and any other taxes which may be levied on such wages, salaries, compensation and benefits; provided, that if any employees of Landlord provide services for more than one building of Landlord, then a prorated portion of such employees’ wages, benefits and taxes shall be included in Operating Costs based on the portion of their working time devoted to the Building; (vi) payments under any easement, license, operating agreement, declaration, restrictive covenant, or instrument pertaining to the sharing of costs by the Building; (vii) operation, repair, maintenance and replacement of all systems, equipment, components or facilities which serve the Building in the whole or in part; (viii) amortization (including interest on the unamortized cost at a rate equal to the floating commercial loan rate announced from time to time by Bank of America, a national banking association, as its prime rate, plus 2% per annum) of the cost of acquiring or the rental expense of personal property used in the maintenance, operation and repair of the Building and Project; and (ix) all federal, state, county, or local governmental or municipal taxes, fees, charges or other impositions of every kind and nature, whether general, special, ordinary or extraordinary because of or in connection with the ownership, leasing and operation of the Project, including, without limitation, any assessment, tax, fee, levy or charge in addition to, or in substitution, partially or totally, of any assessment, tax, fee, levy or charge previously included within the definition of real property tax, it being acknowledged by Tenant and Landlord that Proposition 13 was adopted by the voters of the State of California in the June 1978 election and that assessments, taxes, fees, levies and charges may be imposed by governmental agencies for such services as fire protection, street, sidewalk and road maintenance, conservation, refuse removal and for other governmental services formerly provided without charge to property owners or occupants; (x) costs incurred in connection with the parking areas servicing the Project; and (xi) the cost of capital improvements

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or other costs incurred in connection with the Project (A) which are intended as a labor-saving device or to effect other economies in the operation or maintenance of the Project, or any portion thereof, or (B) that are required under any governmental law or regulation but which were not so required in connection with the Project at the time that permits for the construction of the Building were obtained provided, however, that each such permitted capital expenditure shall be amortized (including interest on the unamortized cost) over its useful life as Landlord shall reasonably determine. Landlord shall have the right, but not the obligation, from time to time, to equitably allocate some or all of the Operating Costs among different tenants of the building (the “Cost Pools”). Such Cost Pools may include, but shall not be limited to, the office space tenants of the Building and the retail space tenants of the Building. The amount of all taxes payable under this Lease for the Base Year attributable to the valuation of the Project, inclusive of tenant improvements, shall be known as “Base Taxes.” If in any comparison year subsequent to the Base Year, the amount of taxes decreases below the level of Base Taxes, then for purposes of all subsequent comparison years, including the comparison year in which such decrease in all taxes payable under this Lease occurred, the Operating Costs in Base Year shall be decreased by an amount equal to the decrease in taxes below the amount of the Base Taxes. If the Building is less than ninety-five percent (95%) occupied during all or a portion of the Base Year or a subsequent calendar year, the variable components of the Operating Costs as determined by Landlord shall be calculated as if the Building had been 95% occupied for the full calendar year. If Landlord is not furnishing any particular work or service (the cost of which, if performed by Landlord, would be included in Operating Costs) to a tenant who has undertaken to perform such work or service in lieu of the performance thereof by Landlord, Operating Costs shall be deemed to be increased by an amount equal to the additional Operating Costs which would reasonably have been incurred during such period by Landlord if it had, at its own expense, furnished such work or service to such tenant. Anything contained in the Lease to the contrary notwithstanding, Tenant acknowledges and agrees that for so long as the Project is owned by the State of California or any local public entity of government, including without limitation a state public retirement system, this Lease and the Tenant’s interest hereunder may constitute a possessory interest subject to property taxation and as a result may be subject to the payment of property taxes levied on that interest. In addition, for so long as the Project is owned by a state public retirement system, the full cash value, as defined in Sections 110 and 110.1 of the California Revenue and Taxation Code, of the possessory interest upon which property taxes will be based will equal the greater of (A) the full cash value of the possessory interest, or (B) if Tenant has leased less than all of the Project, Tenant’s Proportionate Share of the full cash value of the Project that would have been enrolled if the Project had been subject to property tax upon acquisition by the state public retirement system. “Operating Costs” shall not include any of the following, for purposes of calculating the portion of Operating Costs payable by Tenant: (1) leasing commissions in connection with leases at the Building, (2) the cost of construction of tenant improvements for a specific tenant of the Building in connection with such tenant’s occupancy of premises in the Building, if such improvements are not part of a program of improvements made to other premises or portions of the Building, (3) additions to the Project, (4) advertising, (5) depreciation deductions taken by the Landlord for tax purposes, (6) payment of interest or principal on loans secured by the Project, (7) income taxes of Landlord, (8) rent paid by Landlord under a ground lease for the Project, (9) costs of services or other benefits which are not available to Tenant but which are provided to other tenants of the Building, including but not limited to, janitorial services, and (10) except as set forth in items (viii) and (xi)

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above, depreciation, interest and principal payments on mortgages and other debt costs, if any, penalties and interest, costs of capital repairs and alterations, and costs of capital improvements and equipment.

5.6 Within one hundred twenty (120) days after December 31 of each calendar year, or as soon thereafter as practicable, the total of the Operating Costs for said calendar year just completed shall be determined by Landlord. Landlord shall give Tenant notice of such determination, and Tenant within thirty (30) days thereafter shall pay to Landlord Tenant’s Proportionate Share of the Operating Costs for such calendar year in excess of the Base Year Operating Costs, less the payments made by Tenant to Landlord during such calendar year for Operating Costs in excess of the Base Year Operating Costs, or, if Tenant has overpaid such amount, Landlord shall credit any excess paid toward Tenant’s next rental payment due. During the first and last years of the Term, Tenant’s Proportionate Share of the Operating Costs shall be adjusted in proportion to the number of days of that calendar year during which this Lease is in effect over the total days in that calendar year.

5.7 Tenant’s Dispute of Operating Costs.

5.7.1 In the event Tenant disputes the actual amount due as Tenant’s Proportionate Share of Operating Costs and/or the actual amount due as Operating Costs, Tenant may give written notice to Landlord (the “Inspection Request Notice”) of Tenant’s desire to review a summary of accounts prepared by Landlord applicable to Landlord’s determination of the Operating Costs (“Accounts Summary”). Such notice shall be given by Tenant no later than ninety (90) days after Tenant’s receipt of Landlord’s determination of the Operating Costs for the previous calendar year. Provided that Tenant has given Landlord the Inspection Request Notice, Tenant may, at reasonable times, inspect the Accounts Summary at Landlord’s office or at such other office as may be designated by Landlord, provided however, Tenant shall have the rights contained in this Section 5.7.1 only if (a) there is then no Event of Default, as defined in Article 24, which remains uncured beyond the applicable cure period in this Lease, and (b) for the year for which Tenant disputes the amount due as Tenant’s Proportionate Share of Operating Costs, the percentage increase thereof over the previous year exceeds four percent (4%).

5.7.2 The review by Tenant of the Accounts Summary shall be commenced no later than ten (10) business days after the date of Landlord’s receipt of the Inspection Request Notice (subject to coordination of the timing with Landlord), and shall be completed no later than thirty (30) days after the beginning of such review. If, after such inspection, Tenant continues to dispute the amount due as Tenant’s Proportionate Share of Operating Costs, Tenant shall, within ten (10) business days after the end of such review, give written notice to Landlord (the “Dispute Notice”) of the particular costs or expenses included in the Operating Costs which Tenant disputes, and the basis for Tenant’s dispute thereof. In the event that an error has been made in Landlord’s determination of Tenant’s Proportionate Share of Operating Costs, then the parties shall make such appropriate payments or reimbursements, as the case may be, to each other as are determined to be owing, provided that any reimbursements payable by Landlord to Tenant may, at Landlord’s option, instead be credited against the Base Rent next coming due under this Lease, unless the Term has expired, in which event Landlord shall refund (or credit against any other amounts then owing by Tenant) the appropriate amount to Tenant.

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5.7.3 If Landlord informs Tenant that Landlord disputes any of the matters contained in the Dispute Notice, then, within fourteen (14) days after Tenant is informed of Landlord’s dispute of any of the matters contained in the Dispute Notice, Tenant shall hire a regionally recognized accounting firm (“CPA Firm”) to review the Accounts Summary. Such review of the Accounts Summary by the CPA Firm shall be completed not later than thirty (30) days after Landlord informs Tenant that Landlord disputes any of the matters contained in the Dispute Notice. The CPA Firm shall produce a written report (the “CPA Firm Report”) describing its review and conclusions in detail, a copy of which shall be given to Landlord, but shall not be binding on Landlord. If, in Landlord’s sole discretion, Landlord agrees to be bound by the CPA Firm Report, and the CPA Firm Report accurately, and with appropriate supporting documentation, indicates that Landlord’s determination of Operating Costs overstated the Operating Costs by at least four percent (4%), then provided that Tenant is not then in breach of this Lease, Landlord shall give Tenant a credit against future rental amounts for an amount equal to the reasonable cost of the CPA Firm Report. If Tenant does not give Landlord the Inspection Request Notice, the Dispute Notice or the CPA Firm Report within the respective required period, it shall be conclusively deemed that Tenant has approved Landlord’s determination of the Operating Costs and Tenant’s Proportionate Share thereof.

5.7.4 Tenant agrees that neither Tenant nor any of Tenant’s employees, agents or representatives (including, without limitation, the CPA Firm) shall use or disclose to any person or entity other than Tenant, any information or documents obtained by Tenant or such other persons during inspection of Landlord’s accounting records, provided however, this sentence shall not apply to, or bar or limit any legal action between Tenant and Landlord to enforce this Lease. Except as expressly provided in this paragraph, Tenant shall have no rights to inspect, copy, review, or audit the records of Landlord relating to Operating Costs, nor to dispute any portion of Operating Costs charged by Landlord to Tenant. Notwithstanding any claim or dispute regarding Operating Costs which may arise, in no event shall Tenant be entitled to deduct, offset or reduce any Rent otherwise payable by Tenant under this Lease. All reviews of, and reports concerning the Accounts Summary shall be at Tenant’s sole cost and expense, subject to the provisions of Section 5.7.3.

5.8 In addition to Tenant’s Proportionate Share of Operating Costs, Tenant shall reimburse Landlord upon demand for any and all taxes required to be paid by Landlord when such taxes are measured by or reasonably attributable to the cost or value of Tenant’s equipment, furniture, fixtures and other personal property located in the Premises.

6. INITIAL CONSTRUCTION

Construction, if any, to be completed by Landlord will be in accordance with the plans, specifications and agreements approved by both parties, attached to and made a part of this Lease as Exhibit B. Landlord will not be obligated to construct or install any improvements or facilities of any kind other than those called for in Exhibit B. All improvements shall be the property of Landlord, subject to Section 7.4, and upon termination of this Lease, Tenant shall deliver the Premises to Landlord in the condition required by Article 35.

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7. REPAIRS & ALTERATIONS

7.1 Subject to reimbursement pursuant to Section 5.4, and subject to the provisions of Section 7.2, and Articles 8 and 14, Landlord agrees to keep in good condition the foundations, exterior walls, structural portions of the Project, the roof, the elevators and the HVAC, mechanical, electrical and plumbing systems installed in the original construction of the Building, (excluding, however, any plumbing in the Premises or any above Building-standard heating, air conditioning or lighting equipment in the Premises requested by Tenant or required by Tenant’s Alterations, the Tenant Improvements or Tenant’s particular use of the Premises for other than non-general office use, which repair shall be Tenant’s sole responsibility) but Landlord shall not be liable or responsible for breakdowns or temporary interruptions in service where reasonable efforts are used to restore service, and provided that Landlord shall not be responsible for any repair or maintenance which is caused in whole or in part by the negligence or wilful misconduct of Tenant or its agents, contractors, employees, or guests; in the event of such repair or maintenance caused by the negligence or willful misconduct of Tenant, Tenant shall pay for such repair or maintenance upon demand from Landlord and shall indemnify, defend, protect and hold harmless Landlord against any and all loss, cost or liability in connection therewith. Landlord shall have a reasonable time after written notice from Tenant to perform necessary repairs or maintenance. Tenant hereby waives and releases its right to make repairs at Landlord’s expense under Sections 1941 and 1942 of the California Civil Code or under any similar law, statute, or ordinance now or hereafter in effect.

7.2 Subject to the provisions of Section 7.1, and Articles 8 and 14, Tenant shall keep and maintain the Premises in first class condition and repair, and shall make all necessary repairs thereto at Tenant’s sole cost and expense. Except as provided in the Tenant Work Letter attached hereto as Exhibit B with respect to construction of the initial improvements in the Premises, Tenant is responsible for all redecorating, remodeling, alteration and painting required by Tenant during the Term. Tenant covenants and agrees not to suffer or permit any lien of mechanics or materialmen or others to be placed against the Project, the Building or the Premises with respect to work or services claimed to have been performed for or materials claimed to have been furnished to Tenant or the Premises under this Article 7 or otherwise, and, in case of any such lien attaching or notice of any lien, Tenant covenants and agrees to cause it to be immediately released and removed of record or Landlord, at its sole option, may immediately take all action necessary to release and remove such lien, and Tenant shall, upon demand, immediately reimburse Landlord for all costs and expenses relating thereto incurred by Landlord.

7.3 Tenant may not make any improvements, alterations, additions or changes to the Premises (collectively, the “Alterations”) without first procuring the written consent of Landlord to such Alterations, which consent shall be requested by Tenant not less than thirty (30) days prior to the commencement thereof, and which consent shall not be unreasonably withheld by Landlord. Notwithstanding the foregoing, Tenant shall be permitted to make Alterations following ten (10) business days notice to Landlord, but without Landlord’s prior consent, to the extent that (i) the cost of such Alterations do not exceed, in the aggregate, Five Thousand and No/100 Dollars ($5,000.00) per year, and (ii) such Alterations do not adversely affect the systems and equipment of the Building, the exterior appearance of the Building or the structural aspects of the Building. Landlord may condition its consent on, among other things, the installation of additional risers, feeders and other appropriate equipment as well as utility meters.

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The installation, maintenance, repair and replacement, as well as all charges in connection with all such meters and equipment shall be at Tenant’s sole cost and expense. The construction of the initial improvements to the Premises shall be governed by the terms of the Tenant Work Letter, and not the terms of this Article 7.

7.4 Provided Landlord so designates at the time Landlord approves such Alterations, all or any part of any Alterations, made with the consent of Landlord, shall, at the election of Landlord, be removed by Tenant at its expense before the expiration of the Term and any Alterations made without Landlord’s consent shall be removed by Tenant at its expense before the expiration of the Term. All other Alterations shall remain upon the Premises and be surrendered therewith at the Expiration Date or earlier termination of this Lease as the property of Landlord without disturbance or injury. If all or part of any Alterations, are required to be removed by Tenant in accordance with the terms of this Section 7.4, Tenant, at its expense, shall repair any damage to the Premises or the Building caused by such removal. If Tenant fails to remove the Alterations upon Landlord’s request, then Landlord may (but shall not be obligated to) remove them and the cost of removal and repair of any damage together with all other damages which Landlord may suffer by reason of the failure of Tenant to remove Alterations, shall be paid by Tenant to Landlord upon demand. Tenant shall not be entitled to any compensation from Landlord for any Alterations removed by Landlord or at Landlord’s direction.

7.5 Tenant shall construct such Alterations and perform such repairs in conformance with any and all applicable rules and regulations of any federal, state, county or municipal code or ordinance and pursuant to a valid building permit, issued by the applicable municipality, in conformance with Landlord’s construction rules and regulations. Landlord’s consent to such Alterations or Landlord’s approval of the plans, specifications, and working drawings for such Alterations will create no responsibility or liability on the part of Landlord for the completeness, design, sufficiency or compliance with all laws, rules and regulations of governmental agencies or authorities (including without limitation the Americans With Disabilities Act of 1990 and the provisions of that Act applicable to the Project or any part of it) with respect to such Alterations. All work with respect to any Alterations must be done in a good and workmanlike manner and diligently prosecuted to completion to the end that the Premises shall at all times be a complete unit except during the period of work. In performing the work of any such Alterations, Tenant shall have the work performed in such manner as not to obstruct access to the Building or the Common Areas for any other tenant of the Building, and as not to obstruct the business of Landlord or other tenants in the Building, or interfere with the labor force working in the Building. Not less than fifteen nor more than twenty days prior to commencement of any Alterations, Tenant shall notify Landlord in writing of the work commencement date so that Landlord may post notices of nonresponsibility about the Premises. Upon completion of any Alterations, Tenant agrees to cause a Notice of Completion to be recorded in the office of the Recorder of the County of Los Angeles in accordance with Section 3093 of the Civil Code of the State of California or any successor statute, and Tenant shall deliver to the Building management office a reproducible copy of the “as built” drawings of the Alterations.

7.6 The charges for work performed by a contractor selected by Landlord shall be deemed Rent under this Lease, payable upon billing therefor, either periodically during construction or upon the substantial completion of such work, at Landlord’s option. Upon

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completion of such work, Tenant shall deliver to Landlord evidence of payment, contractors’ affidavits and full and final waivers of all liens for labor, services or materials. Tenant shall pay to Landlord four percent (4%) of the cost of such work to compensate Landlord for all overhead, general conditions, fees and other costs and expenses arising from Landlord’s involvement with such work.

7.7 In the event that Tenant makes any Alterations, Tenant agrees to carry “Builder’s All Risk” insurance in an amount approved by Landlord covering the construction of such Alterations, and such other insurance as Landlord may require, it being understood and agreed that all of such Alterations shall be insured by Tenant pursuant to Article 9 of this Lease immediately upon completion thereof.

8. FIRE OR CASUALTY DAMAGE

8.1 Repair of Damage to Premises by Landlord. If the Premises or any portion of the Project is damaged by fire or other cause (the “Occurrence”) without the negligence or willful act of Tenant or its partners, trustees, officers, directors, shareholders, members, beneficiaries, licensees, invitees, or any subtenants or subtenants’ agents, employees, contractors, or invitees, servants, guests, or independent contractors (collectively, “Tenant Persons”), Landlord shall diligently, and as soon as practicable, repair the damage; provided, however, that Landlord may elect not to rebuild or restore the Premises or any portion of the Project, and instead terminate this Lease, by notifying Tenant in writing of such termination within ninety (90) days after the date on which Landlord has actually discovered the full extent and nature of such damages, such notice to include a lease termination date and a date for Tenant to vacate the Premises. Landlord may so elect to terminate this Lease only if the Building shall be damaged by fire or other cause, whether or not the Premises are affected, and one or more of the following conditions is present: (i) repairs cannot reasonably be completed within two hundred (200) days after the Occurrence; (ii) the Occurrence occurs during the last Lease Year; (iii) the holder of any mortgage on the Building or ground lessor with respect to the Project shall require that the insurance proceeds or any portion thereof be used to retire all or a portion of the mortgage debt, or shall terminate the ground lease, as the case may be; (iv) Landlord’s insurer has not agreed that the damage is fully covered, except for deductible amounts, by Landlord’s insurance policies; or (v) in Landlord’s sole discretion, twenty percent (20%) or more of the rentable floor area of the Project is unusable, unmarketable, damaged or destroyed. If Landlord terminates this Lease, the Base Rent and Tenant’s Proportionate Share of increases in Operating Costs (collectively, “Periodic Rent”) shall be apportioned and paid to the date of termination (subject to abatement as provided below). Such repair or restoration by Landlord shall be to substantially the same condition of the base, shell, and core of the Premises and common areas prior to the casualty, except for modifications required by zoning and building codes and other laws or by the holder of a mortgage on the Building, or the lessor of a ground or underlying lease with respect to the Project or portion thereof, or any other modifications to the common areas reasonably deemed desirable by Landlord, which are consistent with the character of the Project, provided access to the Premises and any common restrooms serving the Premises shall not be materially impaired. Notwithstanding any other provision of this Lease, upon the occurrence of any damage to the Premises, Tenant shall assign to Landlord (or to any party designated by Landlord) all insurance proceeds payable to Tenant under Tenant’s insurance required under Section 9.1 of this Lease, and Landlord shall repair any injury or damage to the tenant

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improvements installed in the Premises and shall return such tenant improvements to their condition prior to the Occurrence; provided that if the cost of such repair by Landlord exceeds the amount of insurance proceeds received by Landlord from Tenant’s insurance carrier, as assigned by Tenant, the cost of such repairs in excess of the insurance proceeds received by Landlord shall be paid by Tenant to Landlord prior to Landlord’s repair of the damage. In connection with such repairs and replacements, Tenant shall, prior to the commencement of construction, submit to Landlord, for Landlord’s review and approval, all plans, specifications and working drawings relating thereto, and Landlord shall select the contractors to perform such improvement work.

8.2 Termination By Either Party

8.2.1 If Landlord does not elect to terminate this Lease under the terms of Section 8.1, but the damage required to be repaired by Landlord is not repaired by the end of the 200 Day Period, then either Landlord or Tenant (subject to Section 8.2.2), within thirty (30) days after the end of the 200 Day Period, may terminate this Lease by written notice to the other party, in which event this Lease shall terminate as of the date of receipt of the notice, and the Periodic Rent shall be apportioned and paid to the date of termination (subject to abatement as provided below). The “200 Day Period” shall mean the period beginning on the date of the Occurrence and ending two hundred (200) days from the date of the Occurrence. Notwithstanding the preceding provisions of Section 8.2.1, if (a) Landlord has not elected to terminate this Lease pursuant to the terms of Section 8.1, and (b) Landlord is proceeding to complete the repairs, then neither party shall have the right to terminate this Lease if, before the end of the 200 Day Period, Landlord, at Landlord’s sole option, gives written notice to Tenant that the repairs will be completed within thirty (30) days after the end of the 200 Day Period, and the repairs are actually completed within such thirty day period. If the repairs are not completed within thirty days after the end of the 200 Day Period, then either party may terminate this Lease by written notice to the other party. Such notice of termination shall be given within sixty (60) days after the end of the 200 Day Period, and shall be effective upon receipt thereof by the other party to this Lease.

8.2.2 Notwithstanding the provisions of Section 8.2.1, Tenant shall have the right to terminate this Lease under Section 8.2.1 only if each of the following conditions is satisfied: (a) the damage to the Project by fire or other casualty was not caused by the gross negligence or intentional act of Tenant Persons; (b) there is then no Default by Tenant; (c) as a result of the damage, Tenant cannot reasonably conduct business from the Premises; and, (d) as a result of the damage to the Project, Tenant does not occupy or use the Premises at all.

8.3 Rent Abatement. Subject to the last sentence of this Section 8.3, during the period that the damaged portion of the Premises is rendered untenantable by the damage, Periodic Rent shall be reduced by the ratio that the rentable square footage of the Premises thereby rendered untenantable bears to the total rentable square footage of the Premises, provided that (i) Tenant does not occupy or use such untenantable portion of the Premises during such rent abatement period, and (ii) Tenant shall, as soon as reasonably practicable after the event purportedly giving rise to rent abatement, give written notice to Landlord of Tenant’s claim for rent abatement and the basis therefor, including the date when Tenant vacated the Premises or portion thereof as a result of the Occurrence. Notwithstanding the preceding sentence, if the

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damage was the consequence of the fault or negligence of any of the Tenant Persons, then the Periodic Rent shall be abated only to the extent Landlord actually receives rental or business interruption proceeds allocated to the Periodic Rent for the Premises. If the rent abatement period expressly provided in this Section 8.3 is for a period of less than five days, then Periodic Rent for the first such five days shall be abated only to the extent that Landlord actually receives rental or business interruption proceeds allocable to such Periodic Rent to be abated.

8.4 Tenant Liability for Damages. Subject to Section 8.5, all injury or damage to the Premises or the Building resulting from the gross negligence or intentional acts of any Tenant Persons shall be repaired at the sole cost of Tenant, payable on demand by Landlord, or at Landlord’s option, Landlord may require Tenant to perform such repairs or portion thereof and Periodic Rent shall not xxxxx. If Landlord shall so elect, Landlord shall have the right to make repairs to the standard tenant improvements, not including any tenant extras, Alterations, or personal property, and any expense incurred by Landlord, together with interest thereon at the rate of ten percent (10%) per year shall be paid by Tenant upon demand.

8.5 Release to Extent of Insurance Proceeds. Notwithstanding any other provisions of this Lease, and provided that any applicable insurance coverage is not thereby invalidated, limited, or made more expensive, Tenant shall be relieved from the obligation to repair or pay for physical injury or damage to the Project resulting from the negligence, gross negligence or intentional act of any of Tenant Persons only to the extent that Landlord actually receives insurance proceeds for complete payment in full for such repairs from Tenant’s or Landlord’s insurance.

8.6 Insurance Deductible. Notwithstanding the preceding provisions in this Article 8 concerning abatement of Periodic Rent, Tenant shall not be relieved from its obligation to pay Tenant’s Proportionate Share of the insurance deductibles under insurance policies carried by Landlord.

8.7 Waiver of Statutes. The provisions of this Lease, including this Article 8, constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any part of the Premises, the Building, or any other portion of the Project, and any statute or regulation of the State in which the Building is located, including, without limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with respect to any rights or obligations concerning damage or destruction in the absence of an express agreement between the parties, and any other such statute or regulation which may hereafter be in effect, shall have no application to this Lease or any damage or destruction to all or any part of the Premises, the Building, or any other portion of the Project.

9. INSURANCE

9.1 Tenant shall during the entire Term maintain the following insurance coverage:

9.1.1 Commercial General Liability Insurance for personal injury and property damage claims arising out of Tenant’s occupation or use of the Premises and from its business operations, and including liability arising under any indemnity set forth in this Lease in amounts of not less than $1 million for each occurrence and $2 million for all occurrences each year.

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9.1.2 Property damage insurance covering all Tenant’s furniture, trade fixtures, office equipment, merchandise and other property in the Premises and all original and later-installed tenant improvements in the Premises. This insurance shall be an “all risk” policy covering the full replacement cost of the items covered and including vandalism, malicious mischief and sprinkler leakage coverages.

9.1.3 The Tenant will maintain in force all required workers’ compensation or other similar insurance pursuant to all applicable state and local statutes and regulations.

9.2 All insurance provided by Tenant under this Lease shall be coordinated with any preceding, concurrent or subsequent, occurrence or claims made insurance, in such a manner as to avoid any gap in coverage against claims arising out of occurrences, conduct or events which take place during the period beginning on the Lease Date and ending on termination of this Lease.

9.3 Landlord makes no representation that the insurance coverage required of Tenant provides adequate coverage for Tenant’s needs or for its obligations under this Lease. Tenant shall not do or permit to be done anything which shall cause the cancellation of, invalidate, increase the rate of, or otherwise adversely affect, the insurance policies referred to in this Article 9.

9.4 Landlord shall not be deemed to have waived or reduced any of the insurance coverage requirements for Tenant except by an express written agreement to that effect. The receipt by Landlord or its contractors or agents of insurance policies, certificates, letters, or other correspondence, documents or information which do not conform to the insurance requirements of this Lease, or the failure of Landlord to receive policies, certificates, or other documentation required by this Article 9, shall not be deemed to be Landlord’s consent to a waiver or reduction of any such requirements, despite any failure by Landlord to object to same at the time of receipt (or lack of receipt), or thereafter. Any reduction, modification, or waiver of any of Tenant’s insurance requirements under this Lease may be made only by a written document signed by Landlord and Tenant which expressly amends the pertinent described portions of this Lease.

9.5 Landlord shall have the right and option, but not the obligation, to maintain any or all of the insurance which is required in Section 9.1 to be provided by the Tenant if Tenant fails to maintain the insurance required of Tenant in this Article 9. All costs of Tenant’s insurance provided by the Landlord shall be obtained at Tenant’s expense.

9.6 The minimum insurance requirements set forth in this Lease shall not limit the liability of Tenant under this Lease. The Landlord, and any parties specified by the Landlord, shall be named as additional insureds under the Tenant’s insurance. All insurance companies providing insurance pursuant to this Article shall be rated at least A-XII in Best’s Key Rating Guide and shall be otherwise reasonably acceptable to Landlord and licensed and

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qualified to do business in the State of California. Insurance provided by the Tenant shall be primary as to all covered claims and any insurance carried by Landlord is excess and is non-contributing. Each Tenant’s insurance policy must not be cancelable or modifiable except upon thirty (30) days prior written notice to Landlord and any specified mortgagee of Landlord. The insurance must also contain a severability of interest clause acceptable to Landlord. Copies of policies or original certificates of insurance with respect to each policy shall be delivered to the Landlord prior to the Commencement Date, and thereafter, at least thirty (30) days before the expiration of each existing policy. Any insurance required hereunder of Tenant may be provided with blanket insurance policy(ies) insuring Tenant at locations in addition to the Premises, so long as such blanket policy(ies) expressly affords the coverage required of Tenant under this Lease. Tenant shall take all necessary steps so as to prevent the actual effective aggregate coverage of such blanket policy(ies) from ever being eroded at any time by claims, or reserves therefor established by the insurer, so that the minimum coverage afforded to Landlord required by this Lease shall at all times remain in effect.

9.7 Landlord has the right at any time, but not the obligation, to reasonably change, cancel, decrease or increase any insurance required or specified under this Lease, provided, in no event shall Landlord require insurance in excess of the amounts and types of insurance then being currently required by landlords of other Comparable Buildings. Landlord at its option may obtain any of the required insurance directly or through umbrella policies covering the Building and other assets owned by Landlord.

9.8 Landlord and Tenant agree to request that their respective insurance companies issuing property damage insurance waive any rights of subrogation that such companies may have against Landlord or Tenant, as the case may be, so long as the insurance carried by Landlord or Tenant, respectively, is not invalidated thereby. As long as such waivers of subrogation are contained in their respective insurance policies, Landlord and Tenant hereby waive any right that either may have against the other on account of any loss or damage to their respective property to the extent such loss or damage is actually insured under policies of insurance for fire and all risk coverage, theft, public liability, or other similar insurance.

10. WAIVER AND INDEMNIFICATION

To the extent not prohibited by law, Landlord, its partners, trustees, ancillary trustees and their respective officers, directors, shareholders, members, beneficiaries, agents, servants, employees, and independent contractors (collectively, “Landlord Persons”) shall not be liable for any damage either to person or property or resulting from the loss of use thereof, which damage is sustained by Tenant or by other persons claiming through Tenant except for damage arising solely from the gross negligence or intentional misconduct of Landlord Persons. Tenant agrees to indemnify, defend, and hold Landlord harmless from all claims and all costs, including reasonable attorneys’ fees, expenses and liabilities, except those caused solely by Landlord’s negligence, arising or resulting from (a) any accident, injury, death, loss or damage to any person or to any property including the person and property of Tenant and its employees, agents, officers, guests, and all other persons at any time in the Building or the Premises or the Common Areas, (b) the occupancy or use of the Premises by the Tenant, or (c) any act or omission or negligence of Tenant or any agent, licensee, or invitee of Tenant, or its contractors, employees, or any subtenant or subtenant’s agents, employees, contractors, or invitees. Landlord shall

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indemnify, defend, protect, and hold harmless Tenant, its partners, and their respective officers, agents, servants, employees, and independent contractors (collectively, “Tenant Persons”) from any and all loss, cost, damage, expense and liability (including without limitation court costs and reasonable attorneys’ fees) arising from the negligence or wilful misconduct of Landlord in, on or about the Project, and Landlord’s breach of the terms of this Lease, except to the extent caused by the negligence or wilful misconduct of the Tenant Persons. Notwithstanding anything to the contrary set forth in this Lease, either party’s agreement to indemnify the other party as set forth in this Section 10 shall be ineffective to the extent the matters for which such party agreed to indemnify the other party are covered by insurance required to be carried by the non-indemnifying party pursuant to this Lease. Further, Tenant’s agreement to indemnify Landlord and Landlord’s agreement to indemnify Tenant pursuant to this Section 10 are not intended to and shall not relieve any insurance carrier of its obligations under policies required to be carried pursuant to the provisions of this Lease, to the extent such policies cover, or if carried, would have covered the matters, subject to the parties’ respective indemnification obligations; nor shall they supersede any inconsistent agreement of the parties set forth in any other provision of this Lease. Notwithstanding anything to the contrary contained in this Lease, nothing in this Lease shall impose any obligations on Tenant or Landlord to be responsible or liable for, and each hereby releases the other from all liability for, consequential damages other than those consequential damages incurred by Landlord in connection with a holdover of the Premises by Tenant after the expiration or earlier termination of this Lease. The indemnification obligations of Landlord and Tenant under this Lease shall survive the expiration or earlier termination of this Lease.

11. USE OF PREMISES

11.1 The Premises are leased to Tenant for the sole purpose set forth in Section 1.10 and Tenant shall not use or permit the Premises to be used for any other purposes without the prior written consent of Landlord, which consent may be withheld in Landlord’s sole and absolute discretion. Tenant shall not allow occupancy density of use of the Premises which is greater than the density permitted by applicable governmental regulations. Tenant further covenants and agrees that it shall not use, or permit any person or persons to use, the Premises or any part thereof for any use or purpose contrary to the rules and regulations, attached hereto as Exhibit D (“Rules and Regulations”), or in violation of the laws of the United States of America, the State of California, or the ordinances, regulations or requirements of the local municipal or county governing body or other lawful authorities having jurisdiction over the Building. Landlord shall not be responsible to Tenant for the nonperformance of any of such rules and regulations by or otherwise with respect to the acts or omissions of any other tenants, guests or occupants of the Building.

11.2 Landlord and Tenant acknowledge that Landlord’s primary concern is with the quality and reputation of the retail operations located in the Project and, therefore, the character and quality of Tenant’s operation are of paramount concern to Landlord and have strongly influenced Landlord’s selection of Tenant. Accordingly, Tenant agrees, as a material part of this Lease, that Tenant shall, throughout the Lease Term, maintain its quality and reputation, consistent with a first class retail bank branch. At all times during the Lease Term, Tenant shall utilize and operate its business and the Premises (or cause such utilization and operation) prudently and in a manner consistent with sound business practices. Tenant agrees

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that Tenant will use best efforts to be fully staffed, stocked and open for the Permitted Use no later than thirty (30) days following the Commencement Date. Tenant shall use portions of the Premises for office purposes only to the extent reasonably required for Tenant’s primary business.

11.3 Because of the location of the Premises in the Project and the critical importance of maintaining the Premises in a first-class condition so as not to detract from the appearance and condition of the Project, Landlord shall have the right during the Lease Term to approve the concept, plans and specifications, and all improvements, including furniture and fixtures, for the Premises. Once approved, Tenant agrees not to allow the improvements in the Premises to deteriorate beyond the standard approved by Landlord and to keep the same in a first-class condition, reasonable wear and tear excepted. Tenant agrees to keep the interior and exterior of the Premises in a neat, clean, safe and sanitary condition.

11.4 Tenant acknowledges that the name of Tenant’s business establishment in the Premises is of utmost concern and importance to Landlord. Landlord shall therefore have the right to approve, in Landlord’s reasonable discretion, the name of Tenant’s business establishment to be located in the Premises. Landlord hereby approves Tenant’s name set forth in Section 1.11 of this Lease and the name of Tenant’s “Permitted Transferee” (defined in Section 13.1 below).

11.5 Tenant covenants and agrees that Tenant shall not use, or suffer or permit any person or persons to use the Premises or any part thereof for any use or purpose contrary to the provisions of the Rules and Regulations, attached hereto, or any other reasonable rules and regulations which Landlord may make from time to time. In addition to the Rules and Regulations and the other provisions of this Lease, Tenant hereby covenants not to: (i) use any area of the Project outside of the Premises (a) to display signs, except as expressly provided in this Lease, (b) for any other business purposes other than the Permitted Use, or (c) for public meetings or entertainment; (ii) use, or permit to be used, any sound broadcasting or amplifying device or any video or vending machine that can be heard outside of the Premises; (iii) perform, or allow any employee or agent to perform, any act or carry on any practice that may, in Landlord’s sole discretion, (a) damage the Premises or any other part of the Project, or (b) disturb any other tenant or other person in the Project; or (iv) leave the entrance doors to the Premises open or closed other than as Landlord in its sole discretion shall direct, excepting only the normal use and operation of such entrance doors by Tenant’s employees, customers and invitees during normal business hours.

11.6 Tenant shall keep the Premises open for business during customary banking hours maintained by state-wide or national banking institutions located in the City of Beverly Hills, California.

11.7 Tenant covenants and agrees that it will open for business in the Premises within thirty (30) days following the Commencement Date, and thereafter operate and conduct within the Premises, continuously and uninterruptedly during the Term in accordance with Section 11.6 above, the business which it is required to operate and conduct under the provisions hereof, and that it will at all times keep and maintain within and upon the Premises sufficient personnel to service and supply the usual and ordinary demands and requirements of its customers.

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11.8 Notwithstanding anything in this Lease to the contrary, Tenant shall have the right, at Tenant’s sole cost and expense, except to the extent provided in the Tenant Work Letter, during the Term to install, operate, and maintain one (1) automated teller machine and night drop (“ATM”) in the Project. Tenant hereby acknowledges and agrees that (i) Tenant shall be fully responsible, at Tenant’s sole cost and expense, for the installation, maintenance, repair, replacement, and insuring of the ATM, (ii) Tenant shall comply with all laws, ordinances and regulations applicable to the ATM, including, specifically, all lighting requirements, and (iii) Tenant shall keep the ATM in good working order, and the area surrounding the ATM in a neat and orderly condition. Prior to the expiration or earlier termination of this Lease, Tenant shall, at its sole cost and expense, remove the ATM and shall repair any and all damage to the Premises, Building and Project resulting from such removal, and restore the affected portion(s) thereof to their original condition prior to the installation of the ATM. In the event Tenant does not timely remove the ATM, and/or repair any damage caused thereby, Landlord shall have the right, at Tenant’s sole cost and expense, to remove the ATM and to repair any and all damage to the Project caused by such removal, and restore the same to its original condition prior to the installation of the ATM. All aspects of the ATM, including, but not limited to, the design, size installation and location thereof, shall be subject to Landlord’s approval in its reasonable discretion. Notwithstanding anything to the contrary in the foregoing, Tenant’s obtaining of any governmental approvals for the ATM or any aspects thereof shall, in no event, be considered a condition precedent to Tenant’s obligations under this Lease.

11.9 Tenant shall comply with all recorded covenants, conditions, and restrictions now or hereafter affecting the real property underlying the Project. Tenant shall, at its expense, obtain any governmental permits or approvals required for Tenant’s intended use of the Premises except as may be expressly provided in Exhibit B. The obtaining of any such permits or approvals is not a condition to any of Tenant’s obligations under this lease. Tenant acknowledges that except as expressly stated in this Lease, neither Landlord nor Landlord’s agent has made any representation or warranty, whether express or implied, as to the Premises, including, without limitation, the suitability of the Premises for the conduct of Tenant’s business. Except as otherwise expressly provided in this Lease, Tenant accepts the Premises in their AS IS condition as of the Lease Date, with all faults and defects. Tenant has been advised by Landlord to conduct its own investigation of the suitability of the Premises for Tenant’s intended use, including, without limitation, a careful inspection of the Premises, a review of all applicable laws and ordinances, and inquiries of all applicable government agencies before executing this Lease.

12. SIGNS

12.1 General. Landlord retains absolute control over the exterior appearance of the Building and Project and the exterior appearance of the Premises as viewed from the public halls and public areas. Tenant will not install, or permit to be installed, any drapes, furnishings, signs, lettering, designs, advertising or any items that will in any way alter the exterior appearance of the Building or the exterior appearance of the Premises as viewed from the public halls and public areas. Any sign, advertising, design, or lettering installed by Tenant shall be considered an Alteration (as defined in Section 7.3) and shall be subject to the provisions of

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Article 7. All signage rights granted to Tenant under this Lease are personal, and may not be assigned or transferred without Landlord’s prior written consent, which consent Landlord may withhold in its sole discretion. Further, notwithstanding anything to the contrary in this Article 12, Tenant’s obtaining of any governmental approval for any of Tenant’s signage permitted under this Article 12 or any aspect thereof shall, in no event, be considered a condition precedent to Tenant’s obligations under this Lease.

12.2 Monument Sign. Tenant shall, at Tenant’s sole cost and expense, have the right to install a monument sign on the southwest corner of Wilshire Boulevard and XxXxxxx Boulevard (the “Monument Sign”), provided that all aspects of the Monument Sign, including but not limited to, graphics, materials, color, style, design, lettering, size, quality, specifications and exact position shall at all times be consistent with Landlord’s standard signage program for the Project, and shall be subject to all applicable governmental laws, rules, regulations, codes and approvals, and to Landlord’s prior written approval, in Landlord’s sole discretion. Tenant shall be responsible, at Tenant’s sole cost and expense, for all costs relating to the design, installation, repair, maintenance, and replacement of the Monument Sign. In addition, Tenant shall, at Tenant’s sole cost and expense, pay for any modifications to the Monument Sign or any replacement of the Monument Sign during the Term. The rights contained in this Section 12.2 shall be personal to the Original Tenant, and may only be exercised by the Original Tenant (and not any assignee, sublessee or transferee of Tenant’s interest in this Lease) so long as the Original Tenant occupies the Premises or a portion thereof; provided however, that so long as Tenant’s Permitted Transferee occupies a portion of the Premises as a subtenant or assignee of Tenant, such Permitted Transferee shall have the right to install its identification signage on the Monument Sign, in addition to Tenant’s identification signage thereon, subject and subordinate to all terms and conditions of this Section 12.2. Prior to the expiration or earlier termination of this Lease, or upon the expiration of Tenant’s signage rights as set forth in this Section 12.2, Tenant shall be responsible, at Tenant’s sole cost and expense, for the removal of the Monument Sign, the repair of all damage to the Project caused by such removal, and the restoration of the affected portion of the Project to its original condition prior to the installation of the Monument Sign. In the event Tenant does not timely remove the Monument Sign, and/or repair any damage caused thereby, Landlord shall have the right, at Tenant’s sole cost and expense, to remove the Monument Sign and to repair any and all damage to the Project caused by such removal, and restore the same to its original condition prior to the installation of the Monument Sign. Nothing in this Section 12.2 or in Section 12.3 below shall derogate from Landlord’s right to maintain any existing, or install any new, monument signs outside of the Building, any eyebrow signs on the Building or any other signs on the Building or Project in places other than the location of the Monument Sign and Tenant’s “Eyebrow Signage” (defined below).

12.3 Building Eyebrow Signage. Subject to the terms and conditions set forth in this Section 12.3, Landlord hereby grants to the Original Tenant the non-exclusive right, at Tenant’s sole cost and expense, to install one (1) eyebrow identification sign on the “rainbow eyebrow” of the Building facing Wilshire Boulevard (the “Eyebrow Signage”). Tenant shall be responsible, at Tenant’s sole cost and expense, for all costs relating to the design, installation, repair, maintenance, and replacement of the Eyebrow Signage. The Eyebrow Signage shall be subject to all applicable governmental laws, rules, regulations, codes and approvals. All aspects of the Eyebrow Signage, including, but not limited to, the size, design, style, specifications, lettering, quality, graphics, materials, and colors of the Eyebrow Signage shall be subject to

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Landlord’s prior written approval, which approval may be withheld in Landlord’s sole discretion, and shall be consistent with the design, materials and appearance of the Building. Landlord shall designate the location of the Eyebrow Signage in Landlord’s sole discretion. Tenant’s signage rights set forth in this Section 12.3 shall be personal to the Original Tenant and may only be exercised by the Original Tenant (and not any assignee, sublessee or transferee of Tenant’s interest in this Lease). Prior to the expiration or earlier termination of this Lease or upon the expiration of Tenant’s signage rights as set forth in this Section 12.3, Tenant shall be responsible, at Tenant’s sole cost and expense, for the removal of the Eyebrow Signage, and for the repair of all damage to the Building caused by such removal and restoration of the Building to its original condition prior to the installation of the Eyebrow Signage. In the event Tenant does not timely remove the Eyebrow Signage, Landlord shall have the right, at Tenant’s sole cost and expense, to remove the Eyebrow Signage and to repair any and all damage to the Building caused by such removal and restore the Building to its original condition prior to the installation of the Eyebrow Signage.

12.4 Building Directory. A building directory will be located in the lobby of the Building. Tenant shall be provided five (5) lines on such directory, at Tenant’s sole cost and expense, to display Tenant’s name and location in the Building, and the names of select bank groups of Tenant within the Building and/or of Tenant’s principal employees.

13. ASSIGNMENT AND SUBLETTING

13.1 Tenant acknowledges that the economic concessions and rental rates set forth in this Lease were negotiated by Landlord and Tenant in consideration of, and would not have been granted by Landlord but for (i) the high quality, first class, reputation of the Tenant in retail banking operations (it being acknowledged that Landlord’s primary concern is with the quality and reputation of the retail operations located in the Project and, therefore, the character and quality of Tenant’s operation are of paramount concern to Landlord and have strongly influenced Landlord’s selection of Tenant), and (ii) the specific nature of the leasehold interest granted to Tenant hereunder, as such interest is limited and defined by various provisions throughout this Lease, including, but not limited to, the provisions of this Article 13 which define and limit the transferability of such leasehold interest. Accordingly, based upon the foregoing, Landlord and Tenant have agreed to the provisions of this Article 13 and have agreed that Tenant shall not have the right or power to assign, transfer, mortgage or otherwise encumber this Lease or sublet or rent (or permit a third party to occupy or use) (collectively, a “Transfer”) the Premises, or any part thereof, nor shall any Transfer of this Lease or the right of occupancy be effected by operation of law or otherwise, without the prior written consent of Landlord which may be withheld in Landlord’s sole and absolute discretion. Notwithstanding the foregoing, however, neither an assignment of the Premises to a transferee which is the resulting entity of a merger or consolidation of Tenant with another entity, nor an assignment or subletting of all or a portion of the Premises to an affiliate of Tenant (an entity which is controlled by, controls, or is under common control with, Tenant), shall be deemed a Transfer, provided (i) that such transferee intends to use the Premises for the Permitted Use only, (ii) that Tenant notifies Landlord in writing at least thirty days in advance of any such assignment or sublease, and promptly supplies Landlord with any documents or information reasonably requested by Landlord regarding such Transfer or transferee, and (iii) that such assignment or sublease is not a subterfuge by Tenant to avoid its obligations under this Lease. Further, notwithstanding

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anything in the foregoing to the contrary, Landlord hereby consents to sublease of or a portion of the Premises (not to exceed 25% of the rentable square feet of the Premises) by Tenant to The American Safety Financial Corporation (the “Permitted Transferee”) subject and subordinate to all terms and conditions of this Lease, including, specifically this Article 13, except that Tenant shall not be required to pay any excess Rent received from the Permitted Transferee as required by this Section 13.1. If Landlord consents to the proposed Transfer, (a) the initial Tenant, subsequent transferees, and all guarantors shall remain liable under this Lease, and Tenant shall obtain the prior written consent of any guarantor to such Transfer in a form acceptable to Landlord; and (b) each of the transferees shall agree in a writing acceptable to Landlord to assume and be bound by all of the terms and conditions of this Lease. Any Transfer without Landlord’s written consent shall be voidable by Landlord and, at Landlord’s election, constitute an “Event of Default,” as that term is defined in Article 24 of this Lease. Neither the consent by Landlord to any Transfer nor the collection or acceptance by Landlord of Rent from any assignee, subtenant or occupant shall be construed as a waiver or release of the initial Tenant or any guarantor from the terms and conditions of this Lease or relieve Tenant or any subtenant, assignee or other party from obtaining the consent in writing of Landlord to any further Transfer. Tenant hereby assigns to Landlord the Rent and other sums due from any subtenant, assignee or other occupant of the Premises and hereby authorizes and directs each such subtenant, assignee or other occupant to pay such rent or other sums directly to Landlord; provided, however, that until the occurrence of an Event of Default, Tenant shall have the license to continue collecting such rent and other sums.

If Landlord consents to a Transfer under this Section 13.1, Tenant will pay Landlord’s processing costs and attorneys’ fees incurred in giving such consent, not to exceed One Thousand Five Hundred and No/100 Dollars ($1,500.00). If, for any proposed Transfer, Tenant contracts to receive total Rent or other consideration exceeding the total Rent called for hereunder (prorated by the ratio that the assignment or sublease term and square footage bears to the term and square footage of this Lease) after deduction (amortized over the term of the assignment or sublease) of Tenant’s reasonable costs for tenant improvements, Tenant will pay fifty percent (50%) of the excess to Landlord as additional Rent promptly upon receipt.

13.2 In the event of a proposed assignment or subletting of any portion of the Premises that would cause fifty percent (50%) or more of the Premises, in the aggregate, to be subleased or assigned, Landlord shall also have the right, by notice to Tenant, to terminate this Lease and to require that the Premises be surrendered to Landlord for the balance of the Term (collectively “Recapture the Lease”). Notwithstanding the previous sentence, if, before entering into a proposed assignment or sublease, Tenant gives written notice to Landlord of Tenant’s intention to sublease or assign, and Landlord does not, within fifteen business days after Landlord’s actual receipt of such written notice and all information requested by Landlord relating to such proposed assignment or subletting, inform Tenant that Landlord intends to Recapture the Lease, then Landlord may not Recapture the Lease by reason of such proposed assignment or subletting, provided that: (i) if Landlord consents to the proposed assignment or subletting, Tenant shall complete such assignment or sublease within one hundred twenty (120) days after the end of such 15 day period, and (ii) nothing contained in this Section 13.2 shall be deemed to waive any of Landlord’s rights to approve or disapprove a Transfer as provided in Section 13.1 of this Lease.

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14. EMINENT DOMAIN

In the event any portion of the Premises is taken from Tenant under eminent domain proceedings, Tenant shall have no right, title or interest in any award made for such taking, except for any separate award for fixtures and improvements installed by Tenant and which have not become the property of Landlord, together with the value of Tenant’s leasehold interest, if any. If ten percent (10%) or more of the Premises or Building shall be taken by power of eminent domain or condemned by any competent authority for any public or quasi-public use or purpose, or if Landlord shall grant a deed or other instrument in lieu of such taking by eminent domain or condemnation, Landlord shall have the option to terminate this Lease upon ninety (90) days notice, provided such notice is given no later than one hundred eighty (180) days after the date of such taking, condemnation, reconfiguration, vacation, deed or other instrument. Tenant hereby waives any and all rights it might otherwise have pursuant to Section 1265.130 of the California Code of Civil Procedure.

15. WAIVER AND SEVERABILITY

15.1 The consent of Landlord in any instance to any variation of the terms of this Lease, or the receipt of Rent with knowledge of any breach, shall not be deemed to be a waiver as to any breach of any Lease covenant or condition, nor shall any waiver occur to any provision of this Lease except in writing, signed by Landlord or Landlord’s authorized agent. The waiver or relinquishment by Landlord of any right or power contained in this Lease at any one time or times shall not be considered a waiver or relinquishment of any right or power at any other time or times. If Tenant tenders payment to Landlord of an amount which is less than the Rent then due to Landlord, at Landlord’s option, Landlord may reject such tender, and such tender shall be void and of no effect, or Landlord may accept such tender, without prejudice to Landlord’s right to demand the balance due. This Lease constitutes the entire agreement of the parties and supersedes any and all prior or contemporaneous written or oral negotiations, correspondence, understandings and agreements between the parties respecting the subject matter hereof. No supplement, modification or amendment to this Lease shall be binding unless executed in writing by both parties.

15.2 If any term or provision of this Lease or any application shall be invalid or unenforceable, then the remaining terms and provisions of this Lease shall not be affected.

16. USE OF COMMON FACILITIES

As used in this Lease, “Common Areas” shall mean all areas within the Project which are available for the common use of tenants of the Project and which are not leased or held for the exclusive use of Tenant or any other tenant. Common Areas include without limitation parking areas and driveways, sidewalks, loading areas, lobbies, stairways, elevators, access road, corridors, landscaped and planted areas. Use of the Common Areas may be restricted by Landlord from time to time for purposes of repairs or renovations, provided Landlord shall use commercially reasonable efforts to not materially interfere with Tenant’s use of or access to the Premises.

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17. SERVICES

17.1 Landlord shall furnish to the Premises throughout the Term (i) electricity, heating and air conditioning appropriate for the Tenant’s use during the hours specified in Section 1.14, except for legal holidays, observed by the federal government, (ii) hot and cold water from points of supply, and (iii) Common Area restrooms as required by applicable code. Notwithstanding the preceding, water and electricity shall be available at all times, with adjustments as deemed appropriate by Landlord. The cost of all services provided by Landlord shall be included within Operating Costs, unless charged directly (and not as a part of Operating Costs) to Tenant or another tenant of the Building. Landlord agrees to furnish landscaping and grounds maintenance for the areas used in common by the tenants of the Building. Services shall be furnished by Landlord and reimbursed by Tenant as part of Operating Costs; however, Landlord shall be under no responsibility or liability for failure or interruption in such services caused by breakage, accident, strikes, repairs or for any other causes beyond the control of Landlord, nor in any event for any indirect or consequential damages; and failure or omission on the part of Landlord to furnish service shall not be construed as an eviction of Tenant, nor work an abatement of Rent, nor render Landlord liable in damages, nor release Tenant from prompt fulfillment of any of the covenants under this Lease.

17.2 If Tenant requires or requests that the services to be furnished by Landlord (except Building standard electricity) be provided during periods in addition to the periods set forth in Section 1.14, then Tenant shall obtain Landlord’s consent and, if consent is granted, shall pay upon demand the cost of such excess consumption, the cost of the installation, operation, and maintenance of equipment which is installed in order to supply or meter such excess consumption, and the cost of the increased wear and tear on existing equipment caused by such excess consumption. Landlord may, from time to time during the Term, set a per hour charge for after-hours service which shall include the cost of utility service, labor costs, administrative costs and a cost for depreciation of the equipment used to provide after-hours service.

17.3 All telephone, electricity, gas, heat and other utility service furnished to the Premises shall be paid for by Tenant except to the extent the cost is included within Operating Costs. Landlord reserves the right to separately meter or monitor the utility services provided to the Premises. The cost of any meter shall be borne by Tenant if, in Landlord’s judgment, Tenant may be using a disproportionate share of one or more utilities.

17.4 Landlord shall not provide janitorial services for the Premises. Tenant shall be solely responsible for performing all janitorial services and other cleaning of the Premises appropriate to maintain the Premises in a manner consistent with a first class office building, including without limitation the following.

17.4.1 Tenant shall cause the carpets or other floor coverings in the Premises to be professionally cleaned as needed to maintain the Premises as required by this Lease.

17.4.2 Tenant shall cause to be provided (i) monthly interior window washing and (ii) sweeping and cleaning of the Premises Monday through Friday.

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17.4.3 Tenant shall deposit trash daily in the area designated by Landlord from time to time.

17.4.4 If requested by Landlord, Tenant shall promptly present a cleaning and maintenance schedule to Landlord for approval, and shall clean and maintain the Premises in accordance with such schedule. Landlord shall have the right to inspect the Premises upon reasonable notice to Tenant and to require Tenant to provide additional cleaning if necessary. In the event Tenant fails to provide any of the service described above in this Section 17.4 within five (5) business days after notice from Landlord, which notice shall not be required in event of an emergency, Landlord shall have the right to provide such services and any charge or cost incurred by Landlord in connection therewith shall be deemed to be Additional Rent due and payable by Tenant upon receipt by Tenant of a written statement of cost from Landlord. Failure of Tenant to comply with any one or more of the foregoing provisions shall be deemed to be an Event of Default under this Lease.

18. ENTRY OF LANDLORD

Landlord reserves the right, upon reasonable prior notice (except in an emergency when no prior notice shall be required), to enter upon the Premises at all reasonable times and reserves the right, during the last nine (9) months of the Term, upon reasonable prior notice, to show the Premises at reasonable times to prospective tenants and to affix for lease/rent signs to the Building at the Landlord’s discretion. Without limiting the foregoing, Landlord may, upon reasonable prior notice (except in an emergency when no prior notice shall be required), enter the Premises at any time for purposes of repair or maintenance of the Premises or any portion of the Project, or for the health, safety or protection of any person or property, provided, however, Landlord shall not have keys or access to Tenant’s vault(s), wire or data processing rooms or desks, and Landlord shall have no obligation for the protection, repair or maintenance of such items or areas. If deemed appropriate by Landlord for the health, safety or protection of person or property, Tenant shall, upon notice from Landlord, vacate the Premises as Landlord directs.

19. INTENTIONALLY OMITTED

20. SUBORDINATION AND ATTORNMENT

Landlord shall deliver to Tenant commercially reasonable non-disturbance agreement(s) in favor of Tenant for any ground lessors, mortgage holders or lien holders of Landlord who come into existence with respect to the Building at any time prior to the expiration of the Lease Term, and such delivery shall be a condition precedent to Tenant’s agreement to be bound by the terms of this Article 20. Subject to the foregoing, this Lease is subject and subordinate to all ground or underlying leases and to any first mortgage(s) which may now or hereafter affect those leases or the land and to all renewals, modifications, consolidations, replacements and extensions thereof. This subordination shall be self-operative; however, Tenant shall execute promptly any instrument that Landlord or any first mortgagee may request confirming subordination. Tenant hereby constitutes and appoints Landlord as Tenant’s attorney-in-fact to execute any such instrument on behalf of Tenant. Before any foreclosure sale under a mortgage, the mortgagee shall have the right to subordinate the mortgage to this Lease, and, in the event of a foreclosure, this Lease may continue in full force and effect and Tenant shall attorn to and recognize as its

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landlord the purchaser of Landlord’s interest under this Lease. Tenant shall, upon the request of a mortgagee or purchaser at foreclosure, execute, acknowledge and deliver any instrument that has for its purpose and effect the subordination of the lien of any mortgage to this Lease or Tenant’s attornment to the purchaser.

21. ESTOPPEL CERTIFICATES

Tenant shall at any time upon not less than ten (10) days prior written notice from Landlord execute, acknowledge and deliver to Landlord a statement in writing (i) certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect) and the date to which the Periodic Rent is paid in advance, if any, and (ii) acknowledging that there are not, to Tenant’s knowledge, any uncured Landlord defaults, or specifying such defaults if any are claimed. Any such statement may be conclusively relied upon by a prospective purchaser or encumbrancer of the Premises. Tenant’s failure to deliver this statement within such time shall be conclusive upon Tenant (i) that this Lease is in full force, without modification except as may be represented by Landlord, (ii) that there are no uncured defaults in Landlord’s performance, and (iii) that not more than one month’s Base Rent has been paid in advance. If Landlord desires to finance or refinance the Project, or any part thereof, Tenant agrees to deliver to any lender designated by Landlord such financial statements or other information concerning Tenant as may be reasonably required by that lender, including the past three years’ financial statements. All such financial statements shall be received by Landlord in confidence and shall be used only for the specified purposes.

22. BUILDING RULES AND REGULATIONS

Tenant agrees to abide by all reasonable rules and regulations of the Building imposed by Landlord. These regulations, presented as Exhibit D, are imposed for the cleanliness, good appearance, proper maintenance, good order and reasonable use of the Premises and the Building, and as may be reasonably necessary for the proper enjoyment of the Building by all tenants and their clients, customers and employees. The rules and regulations may be changed from time to time by the Landlord on reasonable notice to Tenant.

23. NOTICES

All notices or other communications between the parties shall be in writing and shall be deemed duly given, (i) on the date of delivery, if delivered in person, (ii) upon the earlier of receipt, if mailed by certified or registered mail, or five (5) days after certified or registered mailing, return receipt requested, postage prepaid, addressed and sent to the parties at their addresses set forth in Sections 1.15 and 1.16, or (iii) on the date of delivery, if delivered to the parties at their addresses set forth in Sections 1.15 and 1.16 by a nationally recognized overnight courier. Landlord and Tenant may from time to time by written notice to the other designate another address for receipt of future notices.

24. EVENTS OF DEFAULT

Each of the following shall constitute an “Event of Default:” (i) Tenant fails to pay Rent when due, (ii) Tenant fails to observe or perform any other Lease term, condition, obligation or

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covenant binding upon, or required of Tenant, within ten (10) days after notice from Landlord, (iii) Tenant abandons the Premises; (iv) Tenant or any guarantor of this Lease makes or consents to a general assignment for the benefit of creditors or a common law composition of creditors, or a receiver of the Premises or all or substantially all of Tenant’s or guarantor’s assets is appointed, (v) Tenant or any guarantor files a voluntary petition in any bankruptcy or insolvency proceeding, or an involuntary petition in any bankruptcy or insolvency proceeding is filed against Tenant or any guarantor, and is not discharged by Tenant or the guarantor within sixty (60) days, (vi) any guarantor repudiates or breaches its guaranty in any way, (vii) there is a Transfer (as defined in Article 13) of the Premises or the Lease by Tenant, without the prior written consent of Landlord as required by Article 13, or (viii) Tenant fails to occupy the Premises within thirty (30) business days following the date of Substantial Completion of the Premises.

25. LANDLORD’S REMEDIES

25.1 Upon the occurrence of an Event of Default, Landlord, at its option, without further notice or demand to Tenant, shall have in addition to all other rights and remedies provided in this Lease, at law or in equity, the option to pursue any one or more of the following remedies, each and all of which shall be cumulative and nonexclusive, without any notice or demand whatsoever.

25.1.1 Terminate this Lease, in which event Tenant shall immediately surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any other remedy which it may have for possession or arrearages in Rent, enter upon and take possession of the Premises and expel or remove Tenant and any other person who may be occupying the Premises or any part thereof, without being liable for prosecution or any claim or damages therefor; and Landlord may recover from Tenant the following:

25.1.1.1 The worth at the time of award of any unpaid rent which has been earned at the time of such termination; plus

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

25.1.1.3 The worth at the time of award of the amount by which the unpaid rent for the balance of the Term after the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus

25.1.1.4 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 therefrom, specifically including but not limited to, brokerage commissions and advertising expenses incurred, expenses of remodeling the Premises or any portion thereof for a new tenant, whether for the same or a different use, and any special concessions made to obtain a new tenant; and

25.1.1.5 At Landlord’s election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable law.

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The term “rent” as used in this Section 25.1 shall be deemed to be and to mean all sums of every nature required to be paid by Tenant pursuant to the terms of this Lease, whether to Landlord or to others, including, without limitation, late charges and interest. As used in Sections 25.1.1(i) and (ii), above, the “worth at the time of award” shall be computed by allowing interest at the rate set forth in Section 25.3, below, but in no case greater than the maximum amount of such interest permitted by law. As used in Section 25.1.1(iii) above, the “worth at the time of award” shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).

25.1.2 Landlord shall have the remedy described in California Civil Code Section 1951.4 (lessor may continue lease in effect after lessee’s breach and abandonment and recover rent as it becomes due, if lessee has the right to sublet or assign, subject only to reasonable limitations). Accordingly, if Landlord does not elect to terminate this Lease on account of any default by Tenant, Landlord may, from time to time, without terminating this Lease, enforce all of its rights and remedies under this Lease, including the right to recover all rent as it becomes due.

25.2 Whether or not Landlord elects to terminate this Lease on account of any default by Tenant, as set forth in this Article 25, Landlord shall have the right to terminate any and all subleases, licenses, concessions or other consensual arrangements for possession entered into by Tenant and affecting the Premises or may, in Landlord’s sole discretion, succeed to Tenant’s interest in such subleases, licenses, concessions or arrangements. In the event of Landlord’s election to succeed to Tenant’s interest in any such subleases, licenses, concessions or arrangements, Tenant shall, as of the date of notice by Landlord of such election, have no further right to or interest in the rent or other consideration receivable thereunder.

25.3 If Tenant fails to pay any Rent within five (5) days after the Rent becomes due and payable, Tenant shall pay to Landlord a late charge of five percent (5%) of the amount of overdue Rent. In addition, any late Rent payment shall bear interest from the date that Rent became due and payable to the date of payment by Tenant at the interest rate of ten percent (10%) per annum, provided that in no case shall such rate be higher than the highest rate permitted by applicable law. Late charges and interest shall be due and payable within two (2) days after written demand from Landlord.

26. RIGHT OF LANDLORD TO CURE TENANT’S DEFAULT

If an Event of Default occurs, then Landlord may (but shall not be obligated to) make such payment or do such act to cure the Event of Default, and charge the expense, together with interest, at the interest rate set forth in Section 25.3, to Tenant. Payment for the cure shall be due and payable by the Tenant upon demand; however, the making of any payment or the taking of such action by Landlord shall not be deemed to cure the Event of Default or to stop Landlord from the pursuit of any remedy to which Landlord would otherwise be entitled.

27. COMPLIANCE WITH LAW

Tenant shall not do anything or suffer anything to be done in or about the Premises which will in any way conflict with any law, statute, ordinance or other governmental rule, regulation

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or requirement now in force or which may hereafter be enacted or promulgated. At its sole cost and expense, Tenant shall promptly comply with all such governmental measures, other than the making of structural changes or changes to the Building’s life safety system. Should any standard or regulation now or hereafter be imposed on Landlord or Tenant by a state, federal or local governmental body charged with the establishment, regulation and enforcement of occupational, health or safety standards for employers, employees, landlords or tenants, then Tenant agrees, at its sole cost and expense, to comply promptly with such standards or regulations. The judgment of any court of competent jurisdiction or the admission of Tenant in any judicial action, regardless of whether Landlord is a party thereto, that Tenant has violated any of said governmental measures, shall be conclusive of that fact as between Landlord and Tenant. Landlord hereby represents and warrants that to the best of Landlord’s knowledge (defined as the actual knowledge of Xxxxx Xxxxxx, manager of the Building, without any independent investigation or inquiry), the access ways at the main entrances of the ground floor level of the Building comply with the requirements of the American with Xxxxxxxxxxxx Xxx, 00 X.X.X. 00000, et seq., including Title III thereof, and with Title 24 of the State of California.

28. BENEFIT

Subject to the provisions of Article 13 hereof, the rights, duties and liabilities created hereunder shall inure to the benefit of and be binding upon the parties hereto, their heirs, personal representatives, successors and assigns.

29. PROHIBITION AGAINST RECORDING

Except as provided in this Lease, neither this Lease, nor any memorandum, affidavit or other writing with respect thereto, shall be recorded by Tenant or by anyone acting through, under, or on behalf of Tenant, and the recording thereof in violation of this provision shall make this Lease null and void at Landlord’s election.

30. TRANSFER OF LANDLORD’S INTEREST

Tenant acknowledges that Landlord has the right to transfer all or any portion of its interest in the Project and Building and in this Lease, and Tenant agrees that in the event of any such transfer and a transfer of the security deposit, provided the transferee assumes, in writing, all of Landlord’s obligations hereunder, Landlord shall be released from all liability under this Lease and Tenant agrees to look solely to such transferee for the performance of Landlord’s obligations hereunder after the date of transfer. Tenant further acknowledges that Landlord may assign its interest in this Lease to a mortgage lender as additional security and agrees that such an assignment shall not release Landlord from its obligations hereunder and that Tenant shall continue to look to Landlord for the performance of its obligations hereunder.

31. FORCE MAJEURE

Any prevention, delay or stoppage due to strikes, lockouts, labor disputes, acts of God, inability to obtain services, labor or materials or reasonable substitutes therefore, governmental actions, civil commotions, fire or other casualty, and other causes beyond the reasonable control of the party obligated to perform (collectively, the “Force Majeure”), except with respect to the obligations imposed with regard to Rent and other charges to be paid by Tenant pursuant to this

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Lease (subject to the provisions of Article 8), and Tenant’s obligations under Articles 10, 11 and 27 of this Lease notwithstanding anything to the contrary contained in this Lease, shall excuse the performance of such party for a period equal to any such prevention, delay, or stoppage and, therefore, if this Lease specifies a time period for performance of an obligation of either party, that time period shall be extended by the period of any delay in such party’s performance caused by a Force Majeure.

32. LANDLORD EXCULPATION

It is expressly understood and agreed that notwithstanding anything in this Lease to the contrary, and notwithstanding any applicable law to the contrary, the liability of Landlord hereunder (including any successor landlord) and any recourse by Tenant against Landlord shall be limited solely and exclusively to the interest of Landlord in and to the Project and Building, and neither Landlord, nor any of its constituent partners, shall have any personal liability therefor, and Tenant hereby expressly waives and releases such personal liability on behalf of itself and all persons claiming by, through or under Tenant. Under no circumstances shall Landlord be liable for injury to Tenant’s business or for any loss of income or profit therefrom.

This Lease is being executed by CB Xxxxxxx Xxxxx Investors LLC (“CB Xxxxxxx Xxxxx”) on behalf of Landlord. No present or future officer, director, employee, trustee, partner, member, manager, retirant, beneficiary, internal investment contractor, investment manager or agent of Landlord shall have any personal liability, directly or indirectly, and recourse shall not be had against any such officer, director, employee, trustee, partner, member, manager, retirant, beneficiary, internal investment contractor, investment manager or agent under or in connection with this Lease or any other document or instrument heretofore or hereafter executed in connection with this Lease. Tenant hereby waives and releases any and all such personal liability and recourse. The limitations of liability provided in this Article 32 are in addition to, and not in limitation of, any limitation on liability applicable to Landlord provided by law or in any other contract, agreement or instrument. Tenant further acknowledges that CB Xxxxxxx Xxxxx has entered into this Lease as investment manager to Landlord and Tenant agrees that all persons dealing with CB Xxxxxxx Xxxxx must look solely to Landlord (for which CB Xxxxxxx Xxxxx is acting as investment manager) for the enforcement of any claims arising under this Lease (subject to the limitations upon Landlord’s liability set forth above), as neither CB Xxxxxxx Xxxxx nor any of its affiliated entities (including, but not limited to CB Xxxxxxx Xxxxx, Inc. and CB Xxxxxxx Xxxxx Services, Inc.) nor any of their respective officers, directors, agents, managers, trustees, employees, members, investment managers, partners or shareholders assume any personal, corporate, partnership, limited liability company, or other liability for any of the obligations entered into by CB Xxxxxxx Xxxxx as investment manager for Landlord.

33. BUILDING RENOVATIONS

Tenant hereby acknowledges that Landlord is currently renovating or may during the Term renovate, improve, alter, or modify (collectively, the “Renovations”) the Building and/or the Premises, which Renovations may include, without limitation, (i) installing sprinklers in the Common Areas and tenant spaces, (ii) modifying the Common Areas and tenant spaces to comply with applicable laws and regulations, including regulations relating to the physically disabled, and (iii) installing new carpeting, lighting, and wall coverings in the Common Areas.

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Tenant hereby agrees that such Renovations shall in no way constitute a constructive eviction of Tenant nor entitle Tenant to any abatement of Rent. Landlord shall have no responsibility, or for any reason be liable, to Tenant for any injury to or interference with Tenant’s business arising from the Renovations, nor shall Tenant be entitled to any compensation or damages from Landlord for loss of the use of the whole or any part of the Premises or of tenant’s personal property or improvements resulting from the Renovations, or for any inconvenience or annoyance occasioned by such Renovations, provided Landlord shall use commercially reasonable efforts to not materially interfere with Tenant’s use of or access to the Premises.

34. ATTORNEYS’ FEES

If either party commences litigation against the other for the specific performance of this Lease, for damages for breach hereof or otherwise for enforcement of any remedy hereunder, the parties hereto agree to, and hereby do waive any right to a trial by jury and, in the event of any such commencement of litigation, the prevailing party shall be entitled to recover from the other party such costs and reasonable attorney’s fees as may have been incurred, as well as reasonable attorneys’ fees and costs incurred in enforcing any judgment against the non-prevailing party.

35. SURRENDER OF THE PREMISES

Tenant shall peaceably surrender the Premises to Landlord on the Expiration Date or earlier termination of this Lease, in broom-clean condition and in as good condition as when Tenant took possession, including, without limitation, the repair of any damage to the Premises caused by the removal of any of Tenant’s personal property or trade fixtures from the Premises, except for reasonable wear and tear and loss by fire or other casualty not caused by Tenant or its agents, and subject to Section 7.4. Subject to Section 7.4, any of Tenant’s personal property left on or in the Premises, the Building or the Common Areas after the Expiration Date or earlier termination of this Lease shall be deemed to be abandoned without any further notice whatsoever to Tenant by Landlord, and, at Landlord’s option, Landlord may dispose of said property in any manner it deems appropriate, without compensation to Tenant, and title shall pass to Landlord under this Lease. Landlord reserves the right to charge Tenant for the removal, storage and disposition of any of Tenant’s personal property left within any portion of the Project. Tenant hereby waives any rights it may have under Sections 1980 through 1991 of the California Civil Code, or any other statutes of similar import.

36. HOLDING OVER

In the event that Tenant shall not immediately surrender the Premises to Landlord on the Expiration Date or earlier termination of this Lease, Tenant shall be deemed to be a month to month tenant upon all of the terms and provisions of this Lease, provided however, the monthly Base Rent shall be one hundred fifty percent (150%) of the monthly Base Rent in effect during the last month of the Term (except that if for such last month of the Term, there was a rent credit or abatement, then the month immediately prior thereto for which there was no such rent credit or abatement, shall be used instead). The provisions of this Article 36 shall not be deemed to limit or constitute a waiver of any other rights or remedies of Landlord provided herein or at law. If Tenant shall hold over after the Expiration Date or earlier termination of this Lease, and Landlord shall desire to regain possession of the Premises, then Landlord may forthwith re-enter

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and take possession of the Premises without process, or by any legal process in force in the State of California, and Tenant shall protect, defend, indemnify and hold Landlord harmless from all loss, costs (including reasonable attorneys’ fees) and liability resulting from Tenant’s holding over, including, without limiting the generality of the foregoing, any claims made by any succeeding tenant founded upon such failure to surrender and any lost profits to Landlord resulting therefrom.

37. JOINT AND SEVERAL

If there is more than one Tenant, the obligations imposed upon Tenant under this Lease shall be joint and several.

38. GOVERNING LAW

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

39. SUBMISSION OF LEASE

Submission of this instrument for examination or signature by Tenant does not constitute a reservation of or an option for lease, and it is not effective as a lease or otherwise until execution and delivery by both Landlord and Tenant.

40. BROKERS

Landlord and Tenant hereby warrant to each other that they have had no dealings with any real estate broker or agent in connection with the negotiation of this Lease, excepting only the real estate brokers or agents specified in Section 1.12 (the “Brokers”), and that they know of no other real estate broker or agent who is entitled to a commission in connection with this Lease. Each party agrees to indemnify and defend the other party against and hold the other party harmless from any and all claims, demands, losses, liabilities, lawsuits, judgments, and costs and expenses (including without limitation reasonable attorneys’ fees) with respect to any leasing commission or equivalent compensation alleged to be owing on account of the indemnifying party’s dealings with any real estate broker or agent other than the Brokers. The terms of this Article 40 shall survive the expiration or earlier termination of the Term.

41. HAZARDOUS MATERIALS

41.1 As used in this Lease, the term “Hazardous Material” means any flammable items, explosives, radioactive materials, hazardous or toxic substances, material or waste or related materials, including any substances defined as or included in the definition of “hazardous substances”, “hazardous wastes,” “infectious wastes,” “hazardous materials” or “toxic substances” now or subsequently regulated under any federal, state or local laws or regulations including, without limitation, petroleum-based products, printing inks, acids, pesticides, asbestos, PCBs and similar compounds, and including any different products and materials which are subsequently found to have adverse effects on the environment or the health and safety of persons.

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41.2 Tenant shall not cause or permit any Hazardous Material to be generated, produced, brought upon, used, stored, treated or disposed of in or about the Premises or the Project by Tenant, its agents, employees, contractors, affiliates, sublessees or invitees, except Tenant may use and store normal and customary general office use supplies and cleaning materials, provided the same are used, stored and/or disposed of in accordance with the manufacturers instructions and applicable laws. Tenant shall indemnify, defend and hold Landlord harmless from all actions (including, without limitation, remedial or enforcement actions of any kind, and administrative or judicial proceedings and orders or judgments), costs, claims, damages (including punitive damages), expenses (including, attorneys’, consultants’ and experts’ fees, court costs) amounts paid in settlement, fines, forfeitures or other civil, administrative or criminal penalties, injunctive or other relief, liabilities or losses arising from a breach of this prohibition by Tenant, its agents, employees, contractors, affiliates, sublessees or invitees. Upon expiration or earlier termination of this Lease, Tenant shall cause any Hazardous Materials arising out of or related to the use or occupancy of the Premises by Tenant or its agents, affiliates, customers, employees, business associates or assigns to be removed from the Premises and the Project and properly transported for use, storage or disposal in accordance with all applicable laws, regulations and ordinances. Landlord hereby represents and warrants that to the best of Landlord’s knowledge (defined as the actual knowledge of Xxxxx Xxxxxx, manager of the Building, without any independent investigation or inquiry), there are currently no existing violations of any Hazardous Materials laws with respect to the Building or Project.

42. LANDLORD’S RESERVATIONS

In addition to the other rights of Landlord under this Lease, Landlord reserves the right to change the street address and/or name of the Building without being deemed to be guilty of an eviction, actual or constructive, or a disturbance or interruption of the business of Tenant or Tenant’s use or occupancy of the Premises, provided, Landlord shall reimburse Tenant for Tenant’s actual reasonable expenses incurred by Tenant to replace any of Tenant’s then existing supplies of stationery and business cards and, if required, to alter Tenant’s signage to reflect the new address or name.

43. PARKING

Tenant shall have the right to rent the number of parking spaces set forth in Section 1.17 upon Tenant’s compliance with all parking rules and regulations and upon payment of prevailing parking rates as in effect from time to time. Tenant may change the number of unreserved or reserved parking spaces rented pursuant to this Article 43 upon at least thirty (30) days prior written notice to Landlord, provided that in no event shall Tenant be entitled to rent more than the maximum amount of unreserved or reserved parking spaces set forth in Section 1.17 of the Summary. Tenant shall have the right to lease from Landlord for the Tenant’s use, additional spaces at the prevailing market rates established from time to time by Landlord, as and when made available to Tenant by Landlord. Tenant’s parking rights and privileges are personal, and may not be assigned or transferred without Landlord’s prior written consent, which consent Landlord may withhold in its reasonable discretion.

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44. INTENTIONALLY OMITTED

45. CONFIDENTIALITY

Tenant acknowledges and agrees that the terms of this Lease and any future amendments or other agreements in connection with 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, agents, representatives, officers, directors, employees and attorneys, shall not disclose, either directly or indirectly, any of the terms or conditions of this Lease or any future amendments or other agreements in connection with this Lease, to any person or entity, except to personnel employed by Tenant, as reasonably necessary for Tenant’s performance of its obligations under this Lease or for tax reporting purposes, and to prospective subtenants or assignees under this Lease. The preceding provisions of this paragraph shall not apply to, or bar or limit any legal action between Tenant and the Landlord to enforce this Lease.

46. INTERPRETATION OF LEASE

Landlord and Tenant have had the opportunity to review and revise this Lease. As such, this Lease shall be construed and interpreted as the joint work product of Landlord and Tenant and/or their attorneys. The rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in any interpretation of this Lease. This Lease and all of its terms shall be construed equally as to Landlord and Tenant.

47. ACKNOWLEDGMENT. REPRESENTATION AND WARRANTY REGARDING PROHIBITED TRANSACTIONS

Tenant hereby acknowledges that Landlord is a unit of the California State and Consumer Services Agency established pursuant to Title I, Division 1, Part 13 of the California Education Code, Sections 22000 et seq., as amended (the “Ed Code”). As a result, Landlord is prohibited from engaging in certain transactions with a “school district or other employing agency” or a “member, retirant or beneficiary” (as those terms are defined in the Ed Code). In addition, Landlord may be subject to certain restrictions and requirements under the Internal Revenue Code, 26 U.S.C. Section 1 et seq. (the “Code”). Accordingly, Tenant represents and warrants to Landlord that (a) Tenant is neither a school district or other employing agency nor a member, retirant or beneficiary; (b) has not made any contribution or contributions to Landlord; (c) neither a school district or other employing agency, nor a member, retirant or beneficiary, nor any person who has made any contribution to Landlord, nor any combination thereof, is related to Tenant by any relationship described in Section 267(b) of the Code; (d) neither CB Xxxxxxx Xxxxx, its affiliates, related entities, agents, officers, directors or employees, nor any State Teachers’ trustee, agent, related entity, affiliate, employee or internal investment contractor (both groups collectively, “Landlord Affiliates”) has received or will receive, directly or indirectly, any payment, consideration or other benefit from, nor does any Landlord Affiliate have any agreement or arrangement with Tenant or any person or entity affiliated with Tenant relating to the transactions contemplated by this Lease; and (e) no Landlord Affiliate has any direct or indirect ownership interest in Tenant or any person or entity affiliated with Tenant.

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IN WITNESS WHEREOF, the parties hereto have executed or caused this Lease to be executed by their authorized agents as of the Lease Date.

“Landlord”:

CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM, a public entity

By:	CB Xxxxxxx Xxxxx Investors LLC, as Investment Manager

	By:	[SIGNATURE APPEARS HERE]
		Authorized Signatory

	By:	[SIGNATURE APPEARS HERE]
		Authorized Signatory

“Tenant”:

PACIFIC MERCANTILE BANK, a California corporation

By:	[SIGNATURE APPEARS HERE]
	Authorized Signatory

By:	[SIGNATURE APPEARS HERE]
	Authorized Signatory

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EXHIBIT A

OUTLINE OF PREMISES

[GRAPHIC APPEARS HERE]

EXHIBIT A

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EXHIBIT A

OUTLINE OF PREMISES

EXHIBIT A

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EXHIBIT B

0000 XXXXXXXX XXXXXXXXX

TENANT WORK LETTER

This Tenant Work Letter shall set forth the terms and conditions relating to the construction of the tenant improvements in the Premises. This Tenant Work Letter is essentially organized chronologically and addresses the issues of the construction of the Premises, in sequence, as such issues will arise during the actual construction of the Premises. All references in this Tenant Work Letter to Articles or Sections of “this Lease” shall mean the relevant portion of Articles 1 through 47 of the Standard Form Office Lease to which this Tenant Work Letter is attached as Exhibit B and of which this Tenant Work Letter forms a part, and all references in this Tenant Work Letter to Sections of “this Tenant Work Letter” shall mean the relevant portion of Sections 1 through 5 of this Tenant Work Letter.

SECTION 1

TENANT IMPROVEMENTS

1.1 Tenant Improvement Allowance. Tenant shall be entitled to a one-time tenant improvement allowance (the “Tenant Improvement Allowance”) in the amount of Fifty-Four Thousand Five Hundred Nine and No/100 Dollars ($54,509.00) (i.e. $13.00 per usable square foot of the Premises times 4,193 usable square feet) for the costs relating to the initial design and construction of Tenant’s improvements which are permanently affixed to the Premises (the “Tenant Improvements”). In addition, and not as a deduction from the Tenant Improvement Allowance, Landlord shall pay the costs related to the preparation of one (1) preliminary space plan for the Premises (the “Space Plan Allowance”) provided Landlord’s space planner prepares the preliminary space plan for the Premises. Notwithstanding, the foregoing, in the event Tenant elects to use Tenant’s space planner to prepare the preliminary space plan for the Premises, Landlord shall have the right, in Landlord’s reasonable discretion, to approve the space planner selected by Tenant, and in such event, the Space Plan Allowance payable by Landlord shall be limited to a maximum of $.10 per usable square foot of the Premises. In no event shall Landlord be obligated to make disbursements pursuant to this Tenant Work Letter in a total amount which exceeds the total of the Tenant Improvement Allowance and the Space Plan Allowance. All Tenant Improvements for which the Tenant Improvement Allowance has been made available shall be deemed Landlord’s property under the terms of Article 6 of the Lease.

1.2 Disbursement of the Tenant Improvement Allowance. Except as otherwise set forth in this Tenant Work Letter, the Tenant Improvement Allowance shall be disbursed by Landlord (each of which disbursements shall be made pursuant to Landlord’s disbursement process) for costs related to the construction of the Tenant Improvements and for the following items and costs (collectively, the “Tenant Improvement Allowance Items”): (i) payment of the fees of the “Architect” and the “Engineers,” as those terms are defined in Sections 2.1 of this Tenant Work Letter, and payment of the fees incurred by, and the cost of documents and materials supplied by, Landlord and Landlord’s consultants in connection with the preparation

EXHIBIT B

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and review of the “Construction Drawings,” as that term is defined in Section 2.1 of this Tenant Work Letter; (ii) the cost of any changes in the base, shell and core work of the Building (the “Base Building”) or in the condition of the Premises existing as of the date at this Lease when such changes are required by the Construction Drawings; (iii) the cost of any changes to the Construction Drawings or Tenant Improvements required by applicable building codes (the “Code”); (iv) the “Landlord Supervision Fee”, as that term is defined in Section 3.3.2 of this Tenant Work Letter; and (v) the costs of the ATM, if so elected by Tenant.

1.3 Standard Tenant Improvement Package. Landlord has established specifications (the “Specifications”) for the Building standard components to be used in the construction of the Tenant Improvements in the Premises (collectively, the “Standard Improvement Package”), which Specifications shall be supplied to Tenant by Landlord. The quality of Tenant Improvements shall be equal to or of greater quality than the quality of the Specifications, provided that Landlord may, at Landlord’s option, require the Tenant Improvements to comply with certain Specifications. Landlord may make changes to the Specifications for the Standard Improvement Package from time to time.

SECTION 2

CONSTRUCTION DRAWINGS

2.1 Selection of Architect/Construction Drawings. Tenant shall retain the architect/space planner reasonably approved by Landlord (the “Architect”) to prepare the Construction Drawings. Tenant shall retain the engineering consultants designated by Landlord (the “Engineers”) to prepare all plans and engineering working drawings relating to the structural, mechanical, electrical, plumbing, HVAC, lifesafety, and sprinkler work of the Tenant Improvements. The plans and drawings to be prepared by Architect and the Engineers hereunder shall be known collectively as the “Construction Drawings.” All Construction Drawings shall comply with the drawing format and specifications as determined by Landlord, and shall be subject to Landlord’s approval. Tenant and Architect shall verify, in the field, the dimensions and conditions as shown on the relevant portions of the Base Building plans, and Tenant and Architect shall be solely responsible for the same, and Landlord shall have no responsibility in connection therewith. Landlord’s review of the Construction Drawings as set forth in this Section 2, shall be for its sole purpose and shall not imply Landlord’s review of the same, or obligate Landlord to review the same, for quality, design, Code compliance or other like matters. Accordingly, notwithstanding that any Construction Drawings are reviewed by Landlord or its space planner, architect, engineers and consultants, and notwithstanding any advice or assistance which may be rendered to Tenant by Landlord or Landlord’s space planner, architect, engineers, and consultants, Landlord shall have no liability whatsoever in connection therewith and shall not be responsible for any omissions or errors contained in the Construction Drawings, and Tenant’s waiver and indemnity set forth in Article 10 of this Lease shall specifically apply to the Construction Drawings.

2.2 Final Space Plan. On or before the date set forth in Schedule 1, attached hereto, Tenant and the Architect shall prepare the final space plan for Tenant Improvements in the Premises (collectively, the “Final Space Plan”), which Final Space Plan shall include a layout and designation of all offices, rooms and other partitioning, their intended use, and equipment to be contained therein, and shall deliver the Final Space Plan to Landlord for Landlord’s approval.

EXHIBIT B

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2.3 Final Working Drawings. On or before the date set forth in Schedule 1, Tenant, the Architect and the Engineers shall complete the architectural and engineering drawings for the Premises, and the final architectural working drawings in a form which is complete to allow subcontractors to bid on the work and to obtain all applicable permits (collectively, the “Final Working Drawings”) and shall submit the same to Landlord for Landlord’s approval.

2.4 Permits. The Final Working Drawings shall be approved by Landlord (the “Approved Working Drawings”) prior to the commencement of the construction of the Tenant Improvements. Tenant shall immediately submit the Approved Working Drawings to the appropriate municipal authorities for all applicable building permits necessary to allow “Contractor,” as that term is defined in Section 3.1, below, to commence and fully complete the construction of the Tenant Improvements (the “Permits”), and, in connection therewith, Tenant shall coordinate with Landlord in order to allow Landlord, at its option, to take part in all phases of the permitting process and shall supply Landlord, as soon as possible, with all plan check numbers and dates of submittal. Notwithstanding anything to the contrary set forth in this Section 2.4, Tenant hereby agrees that neither Landlord nor Landlord’s consultants shall be responsible for obtaining any building permit or certificate of occupancy for the Premises and that the obtaining of the same on or before the date set forth on Schedule 1 shall be Tenant’s responsibility; provided however that Landlord shall, in any event, cooperate with Tenant in executing permit applications and performing other ministerial acts reasonably necessary to enable Tenant to obtain any such permit or certificate of occupancy. No changes, modifications or alterations in the Approved Working Drawings may be made without the prior written consent of Landlord, provided that Landlord may withhold its consent, in its sole discretion, to any change in the Approved Working Drawings if such change would directly or indirectly delay the “Substantial Completion” of the Premises as that term is defined in Section 4.1 of this Tenant Work Letter.

2.5 Time Deadlines. Tenant shall use its best, good faith, efforts and all due diligence to cooperate with the Architect, the Engineers, and Landlord to complete all phases of the Construction Drawings and the permitting process and to receive the permits, and with Contractor for approval of the “Cost Proposal,” as that term is defined in Section 3.2 of this Tenant Work Letter, as soon as possible after the execution of the Lease, and, in that regard, shall meet with Landlord on a scheduled basis to be determined by Landlord, to discuss Tenant’s progress in connection with the same. The applicable dates for approval of items, plans and drawings as described in this Section 2, Section 3, below, and in this Tenant Work Letter are set forth and further elaborated upon in Schedule 1 (the “Time Deadlines”), attached hereto. Tenant agrees to comply with the Time Deadlines.

SECTION 3

CONSTRUCTION OF THE TENANT IMPROVEMENTS

3.1 Contractor. A contractor reasonably approved by Landlord (“Contractor”) shall construct the Tenant Improvements, provided, however, in selecting the Contractor, Landlord

EXHIBIT B

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shall conduct a competitive bidding process and shall solicit bids from a minimum of three (3) qualified contractors, and shall select the lowest bid, which bid shall be adjusted for any inconsistent assumptions.

3.2 Cost Proposal. After the Approved Working Drawings are signed by Landlord and Tenant, Landlord shall provide Tenant with a cost proposal in accordance with the Approved Working Drawings, which cost proposal shall include, as nearly as possible, the cost of all Tenant Improvement Allowance Items to be incurred by Tenant in connection with the construction of the Tenant Improvements (the “Cost Proposal”). Tenant shall approve and deliver the Cost Proposal to Landlord within five (5) business days of the receipt of the same, and upon receipt of the same by Landlord, Landlord shall be released by Tenant to purchase the items set forth in the Cost Proposal and to commence the construction relating to such items. The date by which Tenant must approve and deliver the Cost Proposal to Landlord shall be known hereafter as the “Cost Proposal Delivery Date”.

3.3 Construction of Tenant Improvements by Contractor under the Supervision of Landlord.

3.3.1 Over-Allowance Amount. On the Cost Proposal Delivery Date, Tenant shall deliver to Landlord cash in an amount (the “Over-Allowance Amount”) equal to the difference between (i) the amount of the Cost Proposal and (ii) the amount of the Tenant Improvement Allowance (less any portion thereof already disbursed by Landlord, or in the process of being disbursed by Landlord, on or before the Cost Proposal Delivery Date). The Over-Allowance Amount shall be disbursed by Landlord prior to the disbursement of any then remaining portion of the Tenant Improvement Allowance, and such disbursement shall be pursuant to the same procedure as the Tenant Improvement Allowance. In the event that, after the Cost Proposal Delivery Date, any revisions, changes, or substitutions shall be made to the Construction Drawings or the Tenant Improvements, any additional costs which arise in connection with such revisions, changes or substitutions or any other additional costs shall be paid by Tenant to Landlord immediately upon Landlord’s request as an addition to the Over-Allowance Amount.

3.3.2 Landlord’s Retention of Contractor. Landlord shall independently retain Contractor, on behalf of Tenant, to construct the Tenant Improvements in accordance with the Approved Working Drawings and the Cost Proposal and Landlord shall supervise the construction by Contractor, and Tenant shall pay a construction supervision and management fee (the “Landlord Supervision Fee”) to Landlord in an amount equal to the product of (i) four percent (4%) and (ii) an amount equal to the Tenant Improvement Allowance plus the Over-Allowance Amount (as such Over-Allowance Amount may increase pursuant to the terms of this Tenant Work Letter).

3.3.3 Contractor’s Warranties and Guaranties. Landlord hereby assigns to Tenant all warranties and guaranties by Contractor relating to the Tenant Improvements, and Tenant hereby waives all claims against Landlord relating to, or arising out of the construction of, the Tenant Improvements.

EXHIBIT B

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3.3.4 Tenant’s Covenants. Tenant hereby indemnifies Landlord for any loss, claims, damages or delays arising from the actions of Architect on the Premises or in the Building. Within ten (10) days after completion of construction of the Tenant Improvements, Tenant shall cause Contractor and Architect to cause a Notice of Completion to be recorded in the office of the Recorder of the County of Los Angeles in accordance with Section 3093 of the Civil Code of the State of California or any successor statute and furnish a copy thereof to Landlord upon recordation, failing which, Landlord may itself execute and file the same on behalf of Tenant as Tenant’s agent for such purpose. In addition, immediately after the Substantial Completion of the Premises, Tenant shall have prepared and delivered to the Building a copy of the “as built” plans and specifications (including all working drawings) for the Tenant Improvements.

SECTION 4

COMPLETION OF THE TENANT IMPROVEMENTS;

COMMENCEMENT DATE

4.1 Substantial Completion. For purposes of this Lease, “Substantial Completion” of the Premises shall occur upon the completion of construction of the Tenant Improvements in the Premises pursuant to the Approved Working Drawings, notwithstanding the fact that minor details of construction, mechanical adjustments or decorations which do not materially interfere with Tenant’s use of the Premises remain to be performed (items normally referred to as “Punch List Items”), and any tenant fixtures, telephones and computers and any cabling related thereto, photocopy machines, and work-stations, built-in furniture, or equipment, the purchase and installation of which shall be Tenant’s sole responsibility, and the issuance of a certificate of occupancy or legal equivalent thereof allowing Tenant’s occupancy of the Premises.

4.2 Delay of the Substantial Completion of the Premises. Except as provided in this Section 4.2, the Commencement Date shall occur as set forth in Article 3 of the Lease and Section 4.1, above. If there shall be a delay or there are delays in the Substantial Completion of the Premises or in the occurrence of any of the other conditions precedent to the Commencement Date, as set forth in Article 3 of the Lease, as a direct, indirect, partial, or total result of:

4.2.1 Tenant’s failure to comply with the Time Deadlines;

4.2.2 Tenant’s failure to timely approve any matter requiring Tenant’s approval;

4.2.3 A breach by Tenant of the terms of this Tenant Work Letter or the Lease;

4.2.4 Changes in any of the Construction Drawings after disapproval of the same by Landlord or because the same do not comply with Code or other applicable laws;

4.2.5 Tenant’s request for changes in the Approved Working Drawings;

Tenant’s requirement for materials, components, finishes or improvements which are not available in a commercially reasonable time given the anticipated date of Substantial Completion of the Premises, as set forth in the Lease, or which are different from, or not included in, the Standard Improvement Package;

EXHIBIT B

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4.2.6 Changes to the Base Building work required by the Approved Working Drawings; or

4.2.7 Any other acts or omissions of Tenant, or its agents, or employees;

then, notwithstanding anything to the contrary set forth in the Lease or this Tenant Work Letter and regardless of the actual date of the Substantial Completion of the Premises, the Commencement Date shall be deemed to be the date the Commencement Date would have occurred if no Tenant delay or delays, as set forth above, had occurred.

SECTION 5

MISCELLANEOUS

5.1 Tenant’s Entry Into the Premises Prior to Substantial Completion. Provided that Tenant and its agents do not interfere with Contractor’s work in the Building and the Premises, Contractor shall allow Tenant access to the Premises prior to the Substantial Completion of the Premises for the purpose of Tenant installing overstandard equipment or fixtures (including Tenant’s data and telephone equipment) in the Premises. Prior to Tenant’s entry into the Premises as permitted by the terms of this Section 5.1, Tenant shall submit a schedule to Landlord and Contractor, for their approval, which schedule shall detail the timing and purpose of Tenant’s entry. Tenant shall hold Landlord harmless from and indemnify, protect and defend Landlord against any loss or damage to the Building or Premises and against injury to any persons caused by Tenant’s actions pursuant to this Section 5.1.

5.2 Freight Elevators. Landlord shall, consistent with its obligations to other tenants of the Building, make the freight elevator reasonably available to Tenant in connection with initial decorating, furnishing and moving into the Premises.

5.3 Tenant’s Representative. Tenant has designated Xxxxx Xxxxxxxx, or in his absence, Xxxxxxx Xxxxxx, as its sole representative(s) with respect to the matters set forth in this Tenant Work Letter, who, until further notice to Landlord, shall have full authority and responsibility to act on behalf of the Tenant as required in this Tenant Work Letter.

5.4 Landlord’s Representative. Landlord has designated Xxxxx Kodak as its sole representative with respect to the matters set forth in this Tenant Work Letter, who, until further notice to Tenant, shall have full authority and responsibility to act on behalf of the Landlord as required in this Tenant Work Letter.

5.5 Tenant’s Agents. All subcontractors, laborers, materialmen, and suppliers retained directly by Tenant shall all be union labor in compliance with the master labor agreements existing between trade unions and the Southern California Chapter of the Associated General Contractors of America.

5.6 Time of the Essence in This Tenant Work Letter. Unless otherwise indicated, all references herein to a “number of days” shall mean and refer to calendar days. In all instances where Tenant is required to approve or deliver an item, if no written notice of approval is given or the item is not delivered within the stated time period, at Landlord’s sole option, at the end of such period the item shall automatically be deemed approved or delivered by Tenant and the next succeeding time period shall commence.

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5.7 Tenant’s Lease Default. Notwithstanding any provision to the contrary contained in this Lease, if an event of default as described in Article 24 of the Lease, or a default by Tenant under this Tenant Work Letter, has occurred at any time on or before the Substantial Completion of the Premises, then (i) in addition to all other rights and remedies granted to Landlord pursuant to the Lease, Landlord shall have the right to withhold payment of all or any portion of the Tenant Improvement Allowance and/or Landlord may cause Contractor to cease the construction of the Premises (in which case, Tenant shall be responsible for any delay in the Substantial Completion of the Premises caused by such work stoppage as set forth in Section 4 of this Tenant Work Letter), and (ii) all other obligations of Landlord under the terms of this Tenant Work Letter shall be forgiven until such time as such default is cured pursuant to the terms of the Lease.

EXHIBIT B

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SCHEDULE 1

Time Deadlines

	Dates	Actions to be Performed
A.	March 30, 2001	Final Space Plan to be completed by Tenant and delivered to Landlord

B.	March 30, 2001	Tenant to deliver Final Working Drawings to Landlord.

C.	April 7, 2001	Tenant to deliver Permits to Contractor

D.	Five (5) business days after the receipt of the Cost Proposal by Tenant.	Tenant to approve Cost Proposal and deliver Cost Proposal to Landlord.

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EXHIBIT C

NOTICE OF LEASE TERM DATES

To:		______________________
		______________________
		______________________
		______________________

Re:

Standard Form Office Lease dated , 19 between , a (“Landlord”), and , a (“Tenant”) concerning Suite on floor(s) of the office building located at , , California.

Gentlemen:

In accordance with the Standard Form Office Lease (the “Lease”), we wish to advise you and/or confirm as follows:

1. The Premises are substantially completed, and the Term shall commence on or has commenced on for a term of ending on .

2. Rent commenced to accrue on , in the amount of .

3. If the Commencement Date is other than the first day of the month, the first billing will contain a pro rata adjustment. Each billing thereafter, with the exception of the final billing, shall be for the full amount of the monthly installment as provided for in the Lease.

4. Your rent checks should be made payable to at .

5. The exact number of rentable square feet within the Premises is square feet.

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6. Tenant’s Proportionate Share as adjusted based upon the exact number of rentable square feet within the Premises is %.

“Landlord”:


a

By:

Its:

By:

Its:

Agreed to and Accepted as

of , 19 .

“Tenant”:



a

By:

Its:

EXHIBIT C

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EXHIBIT D

RULES AND REGULATIONS

Tenant shall faithfully observe and comply with the following Rules and Regulations. Landlord shall not be responsible to Tenant for the nonperformance of any of said Rules and Regulations by or otherwise with respect to the acts or omissions of any other tenants or occupants of the Project.

1. Tenant shall not alter any lock or install any new or additional locks or bolts on any doors or windows of the Premises without obtaining Landlord’s prior written consent. Tenant shall bear the cost of any lock changes or repairs required by Tenant. Two keys will be furnished by Landlord for the Premises, and any additional keys required by Tenant must be obtained from Landlord at a reasonable cost to be established by Landlord.

2. All doors opening to public corridors shall be kept closed at all times except for normal ingress and egress to the Premises.

3. Landlord reserves the right to close and keep locked all entrance and exit doors of the Building during such hours as are customary for comparable buildings in the greater Los Angeles area. Tenant, its employees and agents must be sure that the doors to the Building are securely closed and locked when leaving the Premises if it is after the normal hours of business for the Building. Any tenant, its employees, agents or any other persons entering or leaving the Building at any time when it is so locked, or any time when it is considered to be after normal business hours for the Building, may be required to sign the Building register. Access to the Building may be refused unless the person seeking access has proper identification or has a previously arranged pass for access to the Building. Landlord and his agents shall in no case be liable for damages for any error with regard to the admission to or exclusion from the Building of any person. In case of invasion, mob, riot, public excitement, or other commotion, Landlord reserves the right to prevent access to the Building or the Project during the continuance thereof by any means it deems appropriate for the safety and protection of life and property.

4. No furniture, freight or equipment of any kind shall be brought into the Building without prior notice to Landlord. All moving activity into or out of the Building shall be scheduled with Landlord and done only at such time and in such manner as Landlord designates. No service deliveries (other than messenger services) will be allowed between hours of 4:00 p.m. to 6:00 p.m., Monday through Friday. Landlord shall have the right to prescribe the weight, size and position of all safes and other heavy property brought into the Building and also the times and manner of moving the same in and out of the Building. Safes and other heavy objects shall, if considered necessary by Landlord, stand on supports of such thickness as is necessary to properly distribute the weight. Landlord will not be responsible for loss of or damage to any such safe or property in any case. Any damage to any part of the Building, its contents, occupants or visitors by moving or maintaining any such safe or other property shall be the sole responsibility and expense of Tenant.

5. Tenant shall not place or install in the Premises any file cabinets, equipment or other property which may cause damage to the structure of the Project or any portion thereof. If

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Tenant wishes to place or install file cabinets, equipment or other property which may cause damage to the structure of the Project or portion thereof, such placement or installation shall be deemed to be “Alterations” as defined in Article 7 of the Lease, and Tenant shall obtain the prior written consent of Landlord, and Tenant shall be responsible for, and shall pay all associated costs and expenses with respect to all structural engineering and modifications required to prevent any potential damage to the structure of the Project.

6. No furniture, packages, supplies, equipment or merchandise will be received in the Building or carried up or down in the elevators, except between such hours and in such specific elevator as shall be designated by Landlord.

7. At no time shall Tenant bring onto, or permit to exist within, any portion of the Premises or the Project, any firearm, explosive device, bomb, or other weapon or dangerous object or device.

8. The requirements of Tenant will be attended to only upon application at the management office for the Project or at such office location designated by Landlord. Employees of Landlord shall not perform any work or do anything outside their regular duties unless under special instructions from Landlord.

9. Tenant shall not disturb, solicit, or canvass any occupant of the Project and shall cooperate with Landlord and its agents of Landlord to prevent the same.

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

11. Tenant shall not overload the floor of the Premises, nor xxxx, drive nails or screws, or drill into the partitions, woodwork or plaster or in any way deface the Premises or any part thereof without Landlord’s prior written consent.

12. Except for vending machines intended for the sole use of Tenant’s employees and invitees, no vending machine or machines other than fractional horsepower office machines shall be installed, maintained or operated upon the Premises without the written consent of Landlord.

13. Tenant shall not use or keep in or on the Premises, the Building, or the Project any kerosene, gasoline or other inflammable or combustible fluid or material.

14. Tenant shall not without the prior written consent of Landlord use any method of heating or air conditioning other than that supplied by Landlord.

15. Tenant shall not use, keep or permit to be used or kept, any foul or noxious gas or substance in or on the Premises, or permit or allow the Premises to be occupied or used in a manner offensive or objectionable to Landlord or other occupants of the Project by reason of noise, nuisance, odors, or vibrations, or interfere in any way with other tenants or those having business therein. Neither shall Tenant commit waste to the Premises or the Project, or impair or interfere with the proper and economic maintenance, operation and repair of the Project or any portion thereof.

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16. Unless otherwise agreed in writing by Landlord, Tenant shall not use or allow any part of the Premises to be used for the storage, manufacturing or sale of food or beverages or for the manufacture, retail sale or auction of merchandise, goods or property of any kind, or as a school or classroom, or for any unlawful or objectionable purpose.

17. Tenant shall not bring into or keep within the Project, the Building or the Premises any animals, birds, bicycles or other vehicles.

18. No cooking shall be done or permitted on the Premises, nor shall the Premises be used for the storage of merchandise, for lodging or for any improper, objectionable or immoral purposes. Notwithstanding the foregoing, Underwriters’ laboratory-approved equipment and microwave ovens may be used in the Premises for heating food and brewing coffee, tea, hot chocolate and similar beverages for employees and visitors, provided that such use is in accordance with all applicable federal, state and city laws, codes, ordinances, rules and regulations.

19. Landlord will approve where and how telephone and telegraph wires are to be introduced to the Premises. No boring or cutting for wires shall be allowed without the consent of Landlord. The location of telephone, call boxes and other office equipment affixed to the Premises shall be subject to the approval of Landlord.

20. Landlord reserves the right to exclude or expel from the Project any person who, in the judgment of Landlord, is intoxicated or under the influence of liquor or drugs, or who shall in any manner do any act in violation of any of these Rules and Regulations.

21. Tenant, its employees and agents shall not loiter in or on the entrances, corridors, sidewalks, lobbies, halls, stairways, elevators, or any Common Areas for the purpose of smoking tobacco products or for any other purpose, nor in any way obstruct such areas, and shall use them only as a means of ingress and egress for the Premises.

22. Tenant shall not waste electricity, water or air conditioning and agrees to cooperate fully with Landlord to ensure the most effective operation of the Building’s heating and air conditioning system, and shall refrain from attempting to adjust any controls.

23. Tenant shall store all its trash and garbage within the interior of the Premises. No material shall be placed in the trash boxes or receptacles if such material is of such nature that it may not be disposed of in the ordinary and customary manner of removing and disposing of trash in the vicinity of the Building without violation of any law or ordinance governing such disposal. All trash, garbage and refuse disposal shall be made only through entry-ways and elevators provided for such purposes at such times as Landlord shall designate.

24. Tenant shall comply with all safety, fire protection and evacuation procedures and regulations established by Landlord or any governmental agency.

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25. Tenant shall assume any and all responsibility for protecting the Premises from theft, robbery and pilferage, which includes keeping doors locked and other means of entry to the Premises closed.

26. No awnings or other projection shall be attached to the outside walls of the Building without the prior written consent of Landlord. No curtains, blinds, shades or screens shall be attached to or hung in, or used in connection with, any window or door of the Premises without the prior written consent of Landlord. All electrical ceiling fixtures hung in offices or spaces along the perimeter of the Building must be fluorescent and/or of a quality, type, design and bulb color approved by Landlord. Tenant shall abide by Landlord’s regulations concerning the opening and closing of window coverings which are attached to the windows in the Premises, if any, which have a view of any interior portion of the Building or Common Areas.

27. The sashes, sash doors, skylights, windows, and doors that reflect or admit light and air into the halls, passageways or other public places in the Building shall not be covered or obstructed by Tenant, nor shall any bottles, parcels or other articles be placed on the windowsills.

28. Tenant must comply with requests by Landlord concerning the informing of their employees of items of importance to Landlord.

29. Tenant shall not permit or allow any vehicles that belong to or are controlled by Tenant to be loaded, unloaded or parked in areas other than those designated for such activities. Parking is prohibited in all areas not designated therefor. Tenant shall comply with all directional signs and arrows in the parking facility, and with all parking regulations and rules of the parking service operator for the Project. Tenant acknowledges and agrees that the parking service operator is a contractor and not an agent of Landlord. No vehicle may be washed, serviced or repaired within the parking facility except in an area (if any) specifically designated for such use. No inoperable vehicles shall be kept in the parking facility.

Landlord reserves the right at any time to change or rescind any one or more of these Rules and Regulations, or to make such other and further reasonable Rules and Regulations as in Landlord’s judgment may from time to time be necessary for the management, safety, care and cleanliness of the Premises, Building, and the Project, and for the preservation of good order therein, as well as for the convenience of other occupants and tenants therein. Landlord may waive any one or more of these Rules and Regulations for the benefit of any particular tenants, but no such waiver by Landlord shall be construed as a waiver of such Rules and Regulations in favor of any other tenant, nor prevent Landlord from thereafter enforcing any such Rules or Regulations against any or all tenants of the Project. Tenant shall be deemed to have read these Rules and Regulations and to have agreed to abide by them as a condition of its occupancy of the Premises.

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EXHIBIT E

FORM OF CERTIFICATE OF DEPOSIT

[GRAPHIC APPEARS HERE]

EXHIBIT E

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STANDARD FORM OFFICE LEASE BETWEEN CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM, a public entity, the Landlord, AND PACIFIC MERCANTILE BANK, a California corporation the Tenant Dated: March 9, 2001 For Premises Located At 9720 Wilshire Boulevard,...

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