Addendum To Lease

TORREY RESERVE
ADDENDUM TO LEASE


This Addendum to Lease ("Addendum") is made to the Lease dated as of June 16, 1997 ("Lease"), by and between AMERICAN ASSETS, INC., A CALIFORNIA CORPORATION ("Landlord") and ACC CONSUMER FINANCE CORPORATION, A DELAWARE CORPORATION ("Tenant").


Landlord and Tenant hereby agree that notwithstanding anything contained in the Lease to the contrary, the provisions set forth below shall be deemed to be a part of the Lease and shall supersede, to the extent appropriate, any contrary provision in the Lease. All references in the Lease and in this Addendum to "Lease" shall be construed to mean the Lease as amended and supplemented by this Addendum. All capitalized terms used in this Addendum unless specifically defined in this Addendum shall have the same meaning as the terms used in the Lease.


AGREEMENT


1. Option to Extend Term.


1.1 Grant of Option. Landlord hereby grants to Tenant two (2) options ("Extension Options") to extend the initial Lease Term for additional periods of five (5) years each (the "First Extension Term and Second Extension Term"). The First Extension Term and the Second Extension Term are sometimes referred to herein collectively and individually as an "Extension Term." Each Extension Option must be exercised, if at all, by written notice ("Option Notice") delivered by Tenant to Landlord not later than twelve (12) months prior to the end of the initial Lease Term or First Extension Term, as the case may be. Further, each Extension Option shall not be deemed to be properly exercised if, as of the date of the Option Notice or at the end of the initial Lease Term or the First Extension Term, Tenant (i) is in default under the Lease, (ii) has assigned this Lease or its interest therein or (iii) has sublet all or substantially all of the Premises. Provided Tenant has properly and timely exercised the Extension Option in question, the initial Lease Term or First Extension Term, as the case may be, shall be extended for an additional period of five (5) years, and all terms, covenants and conditions of the Lease shall remain unmodified and in full force and effect, except that the Basic Rent shall be modified as set forth below.


1.2 Basic Rent During Extension Term(s). Basic Rent shall be payable during each Extension Term in accordance with Section 4.1 of this Lease, except that the monthly Basic Rent payable for the first twelve (12) months of each Extension Term shall be equal to one-twelfth (1/12) of that amount determined by multiplying the rentable area of the Premises by the "Fair Market Rental Value" for the Premises at the time Tenant delivers its Option Notice to Landlord. The "Fair Market Rental Value" shall mean 95% of the prevailing rental rate, on a rentable per square foot per year basis, then being obtained by Landlord in the Building and Project for space similar in size and quality to that of the Premises; provided, however, in no event shall the Fair Market Rental Value be less than the annual rate per rentable square foot at which the Basic Rent was payable during the last year of the initial Term or the First Extension Term, as the case may be. Once determined, the Basic Rent payable for the first twelve (12) months of the Extension Term in question shall be increased on each anniversary date of such Extension Term by an amount equal to the rentable area of the Premises multiplied by $.05. The Base Year for each Extension Term shall be the calendar year immediately preceding commencement of the Extension Term in question and Tenant shall pay, as Additional Rent hereunder, Tenant's Share of the annual Direct Expenses that are in excess of the amount of Direct Expenses applicable to such Base Year commencing with the first year of such Extension Term.


1.2.1 Negotiating Period. Provided the conditions to Tenant's right to exercise the applicable Option to Extend hereunder are satisfied, Landlord shall, within ten (10) business days after receipt of Tenant's Option Notice, deliver to Tenant a written determination of the then Fair Market Rental Value as determined by Landlord using the


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2 criteria set forth above ("Landlord's Determination"). Tenant shall have ten (10) business days from the date of Landlord's delivery to notify Landlord in writing of Tenant's acceptance of Landlord's Determination or deliver to Landlord Tenant's written determination of the then Fair Market Rental Value using the criteria set forth above ("Tenant's Determination"). If Tenant does not deliver to Landlord the Tenant's Determination within such 10-day period, Tenant shall be deemed to have accepted the Landlord's Determination and the rental rate set forth in the Landlord's Determination shall be the Fair Market Rental Value used to determine the Basic Rent payable for the first twelve (12) months of the applicable Extension Term. If Tenant does deliver the Tenant's Determination within such 10-day period, then Landlord and Tenant will have ten (10) days from the date of delivery of Tenant's Determination to negotiate a Fair Market Rental Value acceptable to both Landlord and Tenant (the "Negotiating Period").


1.2.2 Arbitration. If no agreement can be reached as to the Fair Market Rental Value within the Negotiating Period, then, within seven (7) days after the Negotiating Period expires, Tenant and Landlord shall mutually appoint a certified M.A.I. appraiser that has at least five (5) years full-time commercial appraisal experience. If Landlord and Tenant are unable to agree on an appraiser, either of the parties to this Lease, after giving five (5) days prior written notice to the other party, may apply to the then President of the San Diego Board of Realtors for the selection of an appraiser who meets the foregoing qualifications, which selection shall be made within three (3) days. The appraiser selected by the President of the Board of Realtors shall be a person who has not previously acted in any capacity for either party. The appraiser shall, within ten (10) days of his appointment, review the original Landlord's Determination and Tenant's Determination of the Fair Market Rental Value and such other information as he shall deem necessary and shall determine which of the two is closer to the actual Fair Market Rental Value. The appraiser shall be instructed, in deciding whether the Landlord's Determination or the Tenant's Determination of the Fair Market Rental Value is closer to the actual Fair Market Rental Value, to use the criteria as to Fair Market Rental Value set forth above. The appraiser shall not establish his own Fair Market Rental Value, and must select either Landlord's or Tenant's Determination and shall immediately notify the parties of his selection. The Fair Market Rental Value determined by Landlord or Tenant and selected as the one closer to the actual Fair Market Rental Value by the appraiser shall be the Fair Market Rental Value used to determine the Basic Rent payable during the first twelve (12) months of the Extension Term in question and such Basic Rent shall be subject to annual adjustment as et forth in Subsection 1.2 above. Each of the parties shall bear one-half the cost of the appraiser. If the Fair Market Rental Value shall not have been determined by the commencement of the applicable Extension Term, Tenant shall continue to pay the Basic Rent payable as of the month immediately preceding such commencement until the Fair Market Rental Value is established at which time there shall be an adjustment between the parties so that the Basic Rent established for the Extension Term using the Fair Market Rental Value shall be retroactive to the commencement of the applicable Extension Term.


2. Right of First Offer.


2.1 Right of First Offer. If at anytime after the Lease Commencement Date any leased space becomes available on the second floor of the Building or on a floor designated by Landlord in Building 1 or 2, Torrey Reserve - - North Court, or if a prospective tenant expresses interest in any unleased space on the second floor of the Building or on a floor designated by Landlord in Building 1 or 2, Torrey Reserve - North Court (collectively, the "First Offer Space"), Landlord shall give Tenant written notice thereof, and if, within three (3) business days thereafter, Tenant shall give Landlord written notice that Tenant elects to negotiate for a lease of the First Offer Space, Landlord shall not offer the First Offer Space for rent to a third party for a ten (10) calendar day period after Landlord receives Tenant's notice of a desire to negotiate for the First Offer Space. If Tenant elects to negotiate for a lease of the First Offer Space, the rental rate and other terms then being offered to other prospective tenants of the Building and Project shall be used by the parties as a guideline for their negotiations. If within such ten (10) calendar day period, the parties


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3 fail to agree on the terms of a lease thereof, Landlord may offer such space to a third party. If the third-party lease shall not be made, Tenant's rights hereunder shall apply to any subsequent third-party offer.


2.2 Restrictions on Right of First Offer. The Right of First-Offer shall be personal to the originally named Tenant and shall be exercisable only by the originally named Tenant (and not any assignee, sublessee, or other transferee of Tenant's interest in this Lease). The originally named Tenant may exercise the Right of First Offer only if that Tenant occupies the entire Premises as of the date of Tenant's election to negotiate for a lease for the First Offer Space. Tenant shall not have the right to lease the First Offer Space if Tenant is in default under this Lease as of the date of the attempted exercise of the Right of First Offer by Tenant or as of the scheduled date of delivery of the First Offer Space to Tenant.


3. Substitution of Other Premises (Subsection 2.1). Subsection 2.1 is deemed deleted in its entirety.


4. Delay in Delivery of the Premises (Section 3.4). The following are deemed added as Subsections 3.4.1 and 3.4.2:


3.4.1 Outside Delivery Date/Rent Abatement for Late Delivery
of Premises/Tenant's Right to Terminate. Notwithstanding
anything contained to the contrary herein, provided this Lease
is executed by Landlord and Tenant on or before April 9, 1997,
and except for delays caused by events Force Majeure (as
defined in Section 31.12 of this Lease) or Tenant's failure to
timely and completely comply with all terms and conditions of
this Lease, Tenant shall be entitled to and shall receive one
(1) day of abated Basic Rent (at the rate payable as of the
Commencement Date) for each day Landlord is delayed in
delivering possession of the Premises to Tenant after November
1, 1997. Such abated Basic Rent shall be applied to the first
due and owing Basic Rent accruing after the Commencement Date.
Furthermore, except for delays caused by events Force Majeure
(as defined in Section 31.12 of this Lease) or Tenant's
failure to timely and completely comply with all terms and
conditions of this Lease, and provided Tenant is not in
default under this Lease, if Landlord has not delivered
possession of the Premises to Tenant on or before January 1,
1998, Tenant shall have the right to terminate this Lease,
which right shall be exercised by Tenant, if at all, on or
before 5:00 p.m. on the next business day following January 1,
1998.


3.4.2 Pre-delivery Status Reports. Landlord agrees, without
liability for failing to do so, to provide Tenant with written
status updates regarding completion of the Tenant Improvements
and the actual Commencement Date at intervals of ninety (90),
sixty (60) and thirty (30) days prior to the date Landlord
expects to tender possession of the Premises to Tenant.


5. Application of Payments (Section 4.3). Section 4.3 is deemed deleted and the following is deemed inserted in place thereof:


4.3 Application of Payments. All payments of Basic Rent and
Additional Rent received by Landlord from Tenant shall be
applied to the oldest payment of Basic Rent or Additional Rent
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.


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6. Certified Funds (Section 4.4). Section 4.4 is deemed deleted and the following is deemed inserted in place thereof:


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
for any reason other than such bank or other institution's
fault or inadvertence, 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.


7. Additional Rent; Rent (Lease, Subsection 5.1); Statement of Actual Direct Expenses and Payment by Tenant (Lease, Subsection 5.3.2). Notwithstanding anything contained to the contrary in Subsection 5.1 or Subsection 5.3.2 of the Lease, Tenant's Share of annual "Operating Expenses" which are controllable by Landlord (i.e., all Operating Expenses except Building and Project Common Area utilities, Building and Project Tax Expenses, and Building and Project insurance premiums including any deductible amount paid by Landlord) ("Controllable Operating Expenses"), shall not increase by an amount per square foot which is more than six percent (6%) per calendar year of the amount of Tenant's Share of Controllable Operating Expenses per square foot for the immediately preceding calendar year, on a cumulative basis (Annual Cap). Any increase in Tenant's Share of Controllable Operating Expenses, which exceeds the Annual Cap, shall hereinafter be referred to as the "Carry Over Increase". The Carry Over Increase shall be carried over to subsequent years and applied to increases in Tenant's Share of Controllable Operating Expenses where the increase in Tenant's Share of Controllable Operating Expenses does not exceed the Annual Cap.


For example, assume Tenant's Share of Controllable Operating Expenses for the Base Year (1998) is determined to be $4.00 per square foot per year and Tenant's Share of actual Controllable Operating Expenses for calendar year 1999 is determined to be $4.40 per square foot per year (i.e., an increase of 10%). In such case, Tenant's Share of Controllable Operating E ...