Office Lease

TORREY RESERVE


OFFICE LEASE


Between


American Assets, Inc.,
a California corporation


(LANDLORD)


and


ACC Consumer Finance Corporation,
a Delaware corporation


(TENANT)


Date: April 7, 1997


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2


TABLE OF CONTENTS


SUBJECT MATTER PAGE Article 1 PROJECT, BUILDING, AND PREMISES 1 Article 2 SUBSTITUTION OF OTHER PREMISES 1 Article 3 LEASE TERM 2 Article 4 BASIC RENT 2 Article 5 ADDITIONAL RENT 2 Article 6 SECURITY DEPOSIT 5 Article 7 USE 6 Article 8 COMPLIANCE WITH LAWS 6 Article 9 HAZARDOUS MATERIAL 6 Article 10 UTILITIES AND SERVICES 7 Article 11 REPAIRS AND MAINTENANCE 8 Article 12 ALTERATIONS AND ADDITIONS 9 Article 13 COVENANT AGAINST LIENS 10 Article 14 EXCULPATION, INDEMNIFICATION, AND INSURANCE 10 Article 15 DAMAGE AND DESTRUCTION 14 Article 16 CONDEMNATION 15 Article 17 ASSIGNMENT AND SUBLEASING 16 Article 18 SURRENDER OF PREMISES 19 Article 19 HOLDING OVER 19 Article 20 ESTOPPEL CERTIFICATES 19 Article 21 SUBORDINATION, NONDISTURBANCE, AND ATTORNMENT 20 Article 22 DEFAULTS AND REMEDIES 20 Article 23 LANDLORD'S RIGHT TO PERFORM TENANT'S OBLIGATIONS 21 Article 24 LATE PAYMENTS 22 Article 25 NONWAIVER 22 Article 26 WAIVER OF RIGHT TO JURY TRIAL; DISPUTE RESOLUTION 22 Article 27 ATTORNEY FEES AND COSTS 23 Article 28 LANDLORD'S ACCESS TO PREMISES 23 Article 29 SIGNS 23 Article 30 TENANT PARKING 23 Article 31 MISCELLANEOUS 24


Exhibit A DIAGRAM OF PREMISES Exhibit B SITE PLAN OF PROJECT Exhibit C TENANT WORK LETTER AGREEMENT Exhibit D NOTICE OF BASIC LEASE INFORMATION Exhibit E RULES AND REGULATIONS Exhibit F ESTOPPEL CERTIFICATE


3


Part I


SUMMARY OF BASIC LEASE INFORMATION


The basic terms of this Lease are:


1. Date of Lease: April 7, 1997
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2. Landlord: American Assets, Inc., a California corporation
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3. Tenant: ACC Consumer Finance Corporation, a Delaware corporation
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4. Premises, Building and Project:


(a) Building Address (Section 1.1): 11452 El Camino Real
San Diego, CA 92130
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(b) Number of Rentable Square Feet in Building (Section 1.1): 75,043
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(c) Premises (Section 1.1): Approximately 36,980 Rentable Square Feet of
space located on the 3rd & 4th floor(s), as set forth in Exhibit A,
known as Suite(s) 300 and 400.


5. Lease Term:


(a) Duration (Section 3.1): Seven (7) years and zero months;
----------------- --------
*SEE ADDENDUM


(b) Lease Commencement Date (Section 3.1): The earlier of (1) the date on
which Tenant occupies all or part of the Premises (other than in
connection with the construction of the Premises) and (2) the date on
which the Tenant Improvements are Substantially Complete subject to
acceleration due to Tenant delays;


The anticipated Lease Commencement Date is October 1, 1997


(c) Lease Expiration Date (Section 3.1): The last day of the month in which
the Eighty-fourth (84th) anniversary of the Lease Commencement Date
occurs;


6. Basic Rent (Section 4.1):


Lease Year Monthly Basic Rent Basic Rent/RSF/Mo.
---------- ------------------ ------------------

1 $61,017.00 $1.65
2 $62,866.00 $1.70
3 $64,715.00 $1.75
4 $66,564.00 $1.80
5 $68,413.00 $1.85
6 $70,262.00 $1.90
7 $72,111.00 $1.95


7. Additional Rent (Article 5):


(a) Base Year (Subsection 5.2.1): The calendar year of 1998
---------------------


(b) Tenant's Share of Direct Expenses (Subsection 5.2.6): Approximately
49.28 percent.


8. Security Deposit (Section 6.1): $61,017.00
-------------------------------------------- 9. Permitted Use (Section 7.1): Administrative offices for consumer finance
company


10. Parking (Section 30.1): Tenant shall be entitled to the use of 103 parking
spaces on an unreserved basis and 29 under building parking spaces on a
reserved basis.


11. Addresses for notices:


(a) Landlord's address (Subsection 31.11.3): American Assets, Inc.
11455 El Camino Real, Suite 200
San Diego, CA 92130-2045
Attn: Property Manager


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(b) Tenant's address (Subsection 31.11.3):


(1) Before Lease Commencement Date: ACC Consumer Finance Corp.
12750 High Bluff Drive, Suite 320
San Diego, CA 92130-2045
Attn: Mr. Gary S. Burdick


(2) After Lease Commencement Date: ACC Consumer Finance Corp.
11452 El Camino Real, Suite 400
San Diego, CA 92130-2045
Attn: Mr. Gary S. Burdick


(c) Address of Landlord's lender (Subsection 31.11.4):
Wells Fargo Bank
401 B Street, Suite 304
San Diego, CA 92101
Attn: Mr. Jeff Stitez


12. Brokers (Section 31.23): CB Commercial (Dick Balestri) representing Landlord
and Business Real Estate Brokerage Co. (Joe Anderson) representing Tenant.


Each reference in this Lease to any provision in this Summary shall be construed to incorporate all the terms provided under that provision of the Summary. In the event of any conflict between a provision in this Summary and a provision in the balance of the Lease, the latter shall control.


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Part II


LEASE PROVISIONS


Article 1
PROJECT, BUILDING, AND PREMISES


1.1. Lease of Premises. Landlord leases to Tenant and Tenant leases from Landlord the premises described in Summary of Basic Lease Information Section 4 (c) (Premises), which are located in the building described in Summary Section 4 (a) (Building), reserving to Landlord the rights described in Lease Section 1.3. The outline of the Premises is set forth in Exhibit A. The Rentable Area and Usable Area of the Premises and the Rentable Area of the Building are set forth in Summary Sections 4 (b) and 4 (c). The Building, the areas servicing the Building (including any adjacent parking structure and parking area), and the land on which the Building and those areas are located (as shown on the site plan attached to this Lease as Exhibit B are sometimes collectively referred to as the "Project". Tenant acknowledges that Landlord has made no representation or warranty regarding the condition of the Premises, Building and/or Project except as specifically stated in this Lease.


1.2. Appurtenant Rights. Tenant is granted the right at all times during the Lease Term to the nonexclusive use of the main lobby of the Building, common corridors and hallways, stairwells, elevators, restrooms, sidewalks, driveways, parking areas, landscaped areas and other public or common areas located on the Project. Landlord, however, has the sole discretion to determine the manner in which those public and common areas are maintained and operated, and the use of those areas shall be subject to the Rules and Regulations, as defined in Section 7.2.


1.3. Landlord's Reservation of Rights. The following rights are reserved to Landlord: (a) the right to all of the Building, except for the space within the Premises; (b) the right to change all elements of the Project; (c) the rights reserved to Landlord by provisions of this Lease or by operation of law; (d) the exclusive right to consent to the use or occupancy of the Premises by anyone other than Tenant; and (e) all rights in the economic value of the leasehold estate in the Premises, as stated in Articles 16 and 17.


1.4. Preparation of Premises; Acceptance. The rights and obligations of the parties regarding the construction of the Premises before the commencement of the Lease Term are stated in the Tenant Improvement Agreement attached to this Lease as Exhibit C. If this Lease conflicts with the Tenant Improvement Agreement, the Tenant Improvement Agreement shall prevail.


1.5. Rentable Area and Usable Area.


1.5.1. Standard of Calculation. For purposes of this Lease, "Rentable Area", "Rentable Square Feet", "Rentable Square Footage", "Usable Area", "Usable Square Feet", and "Usable Square Footage" shall be calculated under the American National Standard Method for Measuring Floor Area in Office Buildings, ANSI Z65.1C1996 (revised and adopted June 7, 1996) or successor standard(s), adopted by the Building Owners and Managers Association International (BOMA).


1.5.2. Verification of Rentable Area of Premises and Building. The Rentable Area of the Premises and the Building is subject to verification from time to time by Landlord's space planner or architect. That verification shall be made in accordance with this Section 1.5. Tenant's space planner or architect may consult with Landlord's space planner or architect regarding that verification. The determination of Landlord's space planner or architect, however, shall be conclusive and binding on the parties.


1.5.3. Adjustment of Rent. If Landlord's space planner or architect determines that the Rentable Area of the Premises or the Building is different from that stated in this Lease, all Rent that is based on that incorrect amount shall be modified in accordance with that determination. If that determination is made, it shall be confirmed in writing by Landlord to Tenant.


Article 2
SUBSTITUTION OF OTHER PREMISES


2.1. Substitution of Other Premises. Landlord shall have the right to relocate Tenant to other space in the Building or Project comparable to the Premises in accordance with the following: (a) Landlord shall give Tenant at least sixty (60) days' notice of Landlord's intention to relocate the Premises; (b) the new premises shall be converted at Landlord's expense to substantially the same size, dimensions, configuration, decor, and nature as the Premises described in this Lease; (c) the physical relocation of the Premises shall be accomplished by Landlord at its expense on a weekend. If the relocation has not been completely accomplished before the Monday immediately following that weekend, Rent shall abate in full from the time that the physical relocation commences to the time that it is completed; (d) all costs incurred by Tenant as a result of the relocation (including costs incurred in changing addresses on stationery, business cards, directories, advertising, and other such items) shall be paid by Landlord in a sum not to exceed One Thousand Dollars; (e) Landlord shall not have the right to relocate the Premises more than once during the Lease Term; (f) if the new premises are smaller than the Premises as they existed before the relocation, Basic Rent shall be reduced to an amount computed by multiplying the Basic Rent specified in Section 4.1 by a fraction, the numerator of which shall be the Rentable Area of the new premises and the denominator of which shall be the Rentable Area of the Premises immediately before the relocation; (g) if the Rentable Area of the new premises is larger than the Rentable Area of the Premises immediately before the relocation, Tenant's Share of


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Direct Expenses shall not increase but shall continue to be based on the Rentable Area of the Premises immediately before the relocation; (h) the parties shall execute an amendment to this Lease stating the relocation of the Premises and the reduction, if any, in Basic Rent. After the date on which Tenant is relocated to the new premises, the term "Premises" in this Lease shall refer to the new premises; (i) if a dispute arises in connection with this Section, the dispute shall be resolved by arbitration under Section 26.2, except that: (1) if the dispute concerns the recalculation of Rent under subparagraph (f) or the reduction of Tenant's Share of Direct Expenses under Subsection 5.2.6, the/each arbitrator must be a licensed architect with a minimum of five (5) years' space planning experience in office buildings similar to the Building; and (2) the arbitrator(s) must render a final decision within thirty (30) days after the date on which the arbitrator(s) is/are selected. *SEE ADDENDUM


Article 3
LEASE TERM


3.1. Lease Term. The provisions of this Lease shall be effective as of the date of this Lease. The term of this Lease (Lease Term) shall be the period stated in Summary of Basic Lease Information Section 5 (a). The Lease Term shall commence on the date (Lease Commencement Date) stated in Summary Section 5 (b) and shall expire on the date (Lease Expiration Date) stated in Summary Section 5 (c) unless this Lease is sooner terminated as provided in this Lease.


3.2. Confirmation of Lease Information. At any time during the Lease Term, Landlord may deliver to Tenant a notice in the form set forth in Exhibit D, attached to this Lease, which Tenant shall execute and return to Landlord within five (5) days after receipt.


3.3. Lease Year. For purposes of this Lease, the term "Lease Year" means each consecutive twelve month (12 month) period during the Lease Term as long as: (a) the first Lease Year commences on the Lease Commencement Date and ends on the last day of the eleventh (11th) calendar month thereafter; (b) the second (2nd) and each succeeding Lease Year commences on the first day of the next calendar month; and (c) the last Lease Year ends on the Lease Expiration Date or earlier date of termination.


3.4. Delay in Delivery of Premises. If Landlord is unable to deliver possession of the Premises to Tenant on or before the Lease Commencement Date, Landlord shall not be subject to any liability for its failure to do so. This failure shall not affect the validity of this Lease or the obligations of Tenant under it, but the Lease Term shall commence on the date on which Landlord delivers possession of the Premises to Tenant. *SEE ADDENDUM


Article 4
BASIC RENT


4.1. Definition of "Basic Rent"; No Set off. Tenant shall pay to Landlord basic rent (Basic Rent) in equal monthly installments as set forth in Summary of Basic Lease Information Section 6 in advance on or before the first day of every calendar month during the Lease Term, without any set-off or deduction. Payment must be in United States dollars and shall be made at the management office of the Building or at any other place that Landlord may from time to time designate in writing.


4.2. Initial Payment; Proration. The Basic Rent for the first full calendar month of the Lease Term shall be paid when Tenant executes this Lease. If any payment date (including the Lease Commencement Date) for "Rent", as defined in Section 5.1, falls on a day other than the first day of that calendar month, or if any Rent payment is for a period shorter than one calendar month, the Rent for that fractional calendar month shall accrue on a daily basis for each day of that fractional month at a daily rate equal to 1/365 of the total annual Rent. All other payments or adjustments that are required to be made under the terms of this Lease and that require proration on a time basis shall be prorated on the same basis.


4.3. Application of Payments. All payments received by Landlord from Tenant shall be applied to the oldest payment obligation owed by Tenant to Landlord. No designation by Tenant, either in a separate writing or on a check or money order, shall modify this clause or have any force or effect. *SEE ADDENDUM


4.4. Certified Funds. If any non-cash payment made by Tenant is not paid by the bank or other institution on which it is drawn, Landlord shall have the right, exercised by notice to Tenant, to require that Tenant make all future payments by certified funds or cashier's check. *SEE ADDENDUM


Article 5
ADDITIONAL RENT


5.1. Additional Rent; Rent. In addition to paying the Basic Rent specified in Article 4, Tenant shall pay as additional rent Tenant's Share of the annual Direct Expenses (as defined in subsections 5.2.2 and 5.2.6) that are in excess of the amount of Direct Expenses applicable to the Base Year (as defined in Subsection 5.2.1). That additional rent, together with other amounts of any kind (other than Basic Rent) payable by Tenant to Landlord under the terms of this Lease, shall be collectively referred to in this Lease as "Additional Rent". Basic Rent and Additional Rent are collectively referred to in this Lease as "Rent". All amounts due under this Article 5 as Additional Rent are payable for the same periods and in the same manner, time, and place as the Basic Rent. Without limitation on other obligations of Tenant that survive the expiration of the Lease Term, Tenant's obligations to


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pay the Additional Rent provided for in this Article 5 survive the expiration of the Lease Term. *SEE ADDENDUM


5.2. Definitions. The following definitions apply in this Article 5:


5.2.1. Base Year. "Base Year" means the period stated in Summary of Basic Lease Information Section 7 (a).


5.2.2. Direct Expenses. "Direct Expenses" mean Operating Expenses plus Tax Expenses.


5.2.3. Expense Year. "Expense Year" means each calendar year in which any portion of the Lease Term falls, through and including the calendar year in which the Lease Term expires.


5.2.4. Operating Expenses. "Operating Expenses" means all expenses, costs, and amounts of every kind that Landlord pays or incurs during any Expense Year because of or in connection with the ownership, operation, management, maintenance, or repair of the Common Areas of the Building and the Project. Operating Expenses includes an allocable percentage of Direct Expenses Landlord pays or incurs in operating, maintaining and repairing those portions of the Project other than the Building including any owner's association or similar fees, assessments or dues presently or hereafter established for the Project.


5.2.4.1. Examples of Operating Expenses. The definition of "Operating Expenses" includes any amounts paid or incurred for: (a) the cost of supplying any utilities to the Common Areas of the Building and the Project, (b) the cost of operating, managing, maintaining, and repairing the following systems: utility, mechanical, sanitary, storm drainage, escalator, and elevator, (c) the cost of supplies and tools and of equipment, maintenance, and service contracts in connection with those systems, (d) the cost of licenses, certificates, permits, and inspections, (e) the cost of contesting the validity or applicability of any government enactments that may affect the Operating Expenses, (f) the costs incurred in connection with the implementation and operation of a parking or transportation management program or similar program, (g) the cost of insurance carried by Landlord, in amounts reasonably determined by Landlord, (h) fees, charges, and other costs including management fees (or amounts in lieu of such fees), consulting fees, legal fees, and accounting fees of all persons engaged by Landlord or otherwise reasonably incurred by Landlord in connection with the operation, management, maintenance, and repair of the Building and the Project, (i) the cost of parking area maintenance, repair, and restoration, including resurfacing, repainting, restriping, and cleaning, (j) wages, salaries, and other compensation and benefits of all persons engaged in the operation, maintenance, or security of the Building and the Project plus employer's Social Security taxes, unemployment taxes, insurance, and any other taxes imposed on Landlord that may be levied on those wages, salaries, and other compensation and benefits. If any of Landlord's employees provide services for more than one project of Landlord, only the prorated portion of those employees' wages, salaries, other compensation and benefits, and taxes reflecting the percentage of their working time devoted to the Project shall be included in Operating Expenses, (k) payments under any easement, license, operating agreement, declaration, restrictive covenant, or instrument relating to the sharing of costs by the Building or the Project, (l) 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 as its prime rate plus two (2) percentage points per annum) of the cost of acquiring or renting personal property used in the maintenance, repair, and operation of the Building and the Project, (m) the cost of capital improvements or other costs incurred in connection with the Building or the Project that (1) are intended as a labor saving device or to effect other economies in the maintenance or operation of all or part of the Building or the Project or (2) are required under any government law or regulation but that were not required in connection with the Building or the Project when permits for the construction of the Building or the Project were obtained. All permitted capital expenditures shall be amortized (including interest on the unamortized cost at the rate stated in subparagraph (l)) over their useful life, as reasonably determined by Landlord.


5.2.4.2. Adjustment of Operating Expenses. Operating Expenses shall be adjusted as follows:


5.2.4.2.1. Gross Up Adjustment When Building Is Less Than Fully Occupied. If the occupancy of the Building during any part of any Expense Year (including the Base Year) is less than 95%, Landlord shall make an appropriate adjustment of the variable components of Operating Expenses for that Expense Year, as reasonably determined by Landlord using sound accounting and management principles, to determine the amount of Operating Expenses that would have been incurred had the Building been 95% occupied. This amount shall be considered to have been the amount of Operating Expenses for that Expense Year. For purposes of this Subsection 5.2.4.2.1, "variable components" include only those component expenses that are affected by variations in occupancy levels.


5.2.4.2.2. Adjustment When Landlord Does Not Furnish a Service to All Tenants. If, during any part of any Expense Year (including the Base Year), Landlord is not furnishing a particular service or work (the cost of which, if furnished by Landlord, would be included in Operating Expenses) to a tenant (other than Tenant) that has undertaken to perform such service or work in lieu of receiving it from Landlord, Operating Expenses for that Expense Year shall be considered to be increased by an amount equal to the additional Operating Expenses that Landlord would reasonably have incurred during this period if Landlord had furnished such service or work to that tenant.


5.2.4.3. Exclusions From Operating Expenses. Despite any other provision of Subsection 5.2.4, Operating Expenses shall not include: (a) depreciation, interest, and amortization on mortgages or ground


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lease payments, except as otherwise stated in this Section 5.2, (b) legal fees incurred in negotiating and enforcing tenant leases, (c) real estate brokers' leasing commissions, (d) initial improvements or alterations to tenant spaces, (e) the cost of providing any service directly to and paid directly by any tenant, (f) any costs expressly excluded from Operating Expenses elsewhere in this Lease, (g) costs of any items for which Landlord receives reimbursement from insurance proceeds or a third party. Insurance proceeds shall be excluded from Operating Expenses in the year in which they are received, except that any deductible amount under any insurance policy shall be included within Operating Expenses, (h) costs of capital improvements, except as otherwise stated in this Section 5.2.


5.2.5. Tax Expenses. "Tax Expenses" means all federal, state, county, or local government or municipal taxes, fees, charges, or other impositions of every kind (whether general, special, ordinary, or extraordinary) that are paid or incurred by Landlord during any Expense Year (without regard to any different fiscal year used by any government or municipal authority) because of or in connection with the ownership, leasing, and operation of the Building and the Project. These expenses include taxes, fees, and charges such as real property taxes, gener ...