10-K

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2008
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                                  to

Commission file number 1-10521

CITY NATIONAL CORPORATION
(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	95-2568550 (I.R.S. Employer Identification No.)
City National Center 400 North Roxbury Drive, Beverly Hills, California (Address of principal executive offices)	90210 (Zip Code)
Registrant's telephone number, including area code (310) 888-6000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, $1.00 par value	New York Stock Exchange

No securities are registered pursuant to Section 12(g) of the Act

         Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý    No o

         Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes o    No ý

         Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

         Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý Accelerated filer o Non-accelerated filer o
(Do not check if a smaller reporting company) Smaller reporting company o

         Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o    No ý

         As of June 30, 2008, the aggregate market value of the registrant's common stock ("Common Stock") held by non-affiliates of the registrant was approximately $1,676,255,338 based on the June 30, 2008 closing sale price of Common Stock of $42.07 per share as reported on the New York Stock Exchange.

         As of January 31, 2009, there were 48,180,442 shares of Common Stock outstanding.

Documents Incorporated by Reference

The information required to be disclosed pursuant to Part III of this report either shall be (i) deemed to be incorporated by reference from selected portions of City National Corporation's definitive proxy statement for the 2009 annual meeting of stockholders, if such proxy statement is filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the Corporation's most recently completed fiscal year, or (ii) included in an amendment to this report filed with the Commission on Form 10-K/A not later than the end of such 120 day period.

TABLE OF CONTENTS

PART I
Item 1.	Business	2
Item 1A.	Risk Factors	15
Item 1B.	Unresolved Staff Comments	20
Item 2.	Properties	20
Item 3.	Legal Proceedings	20
Item 4.	Submission of Matters to a Vote of Security Holders	20
PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	21
Item 6.	Selected Financial Data	21
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	21
Item 8.	Financial Statements and Supplementary Data	22
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	22
Item 9A.	Controls and Procedures	22
Item 9B.	Other Information	22
PART III
Item 10.	Directors and Officers of the Registrant	23
Item 11.	Executive Compensation	23
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	23
Item 13.	Certain Relationships and Related Transactions	24
Item 14.	Principal Accountant Fees and Services	24
PART IV
Item 15.	Exhibits and Financial Statement Schedules	25

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PART I

Item 1.    Business

General

        City National Corporation (the "Corporation"), a Delaware corporation organized in 1968, is a bank holding company and a financial holding company under the Gramm-Leach-Bliley Financial Modernization Act of 1999 (the "GLB Act"). The Corporation provides a wide range of banking, investing and trust services to its clients through its wholly-owned banking subsidiary, City National Bank (the "Bank" and together with the Corporation, its subsidiaries and its asset management affiliates the "Company"). The Bank, which has conducted business since 1954, is a national banking association headquartered in Beverly Hills, California and operating through 62 offices, including 15 full-service regional centers, in Southern California, the San Francisco Bay area, Nevada and New York City. As of December 31, 2008, the Corporation had a majority ownership interest in eight asset management affiliates and a minority interest in one other asset management firm. At December 31, 2008, the Company had consolidated total assets of $16.46 billion, loan balances of $12.44 billion, and assets under management or administration (excluding the minority-owned asset manager) of $47.52 billion. The Company focuses on providing affluent individuals and entrepreneurs, their businesses and their families with complete financial solutions. The organization's mission is to provide this banking and financial experience through an uncommon dedication to extraordinary service, proactive advice and total financial solutions.

        On February 28, 2007, the Company completed its acquisition of Business Bank Corporation ("BBC"), the parent of Business Bank of Nevada ("BBNV") and an unconsolidated subsidiary, Business Bancorp Capital Trust I, in a cash and stock transaction valued at $167 million. BBNV operated as a wholly owned subsidiary of City National Corporation until after the close of business on April 30, 2007, at which time it was merged into the Bank. Refer to the "Management's Discussion and Analysis" section of this report for further details regarding this acquisition.

        On May 1, 2007, the Corporation completed its acquisition of Lydian Wealth Management in an all-cash transaction. The wealth and investment advisory firm is headquartered in Rockville, Maryland and currently manages or advises on client assets totaling $10.17 billion. Lydian Wealth Management changed its name to Convergent Wealth Advisors ("Convergent Wealth") and became a subsidiary of Convergent Capital Management LLC, the Chicago-based asset management holding company that the Company acquired in 2003. Refer to the "Management's Discussion and Analysis" section of this report for further details regarding this acquisition.

        On November 21, 2008, the Corporation entered into a letter agreement with the United States Department of the Treasury ("Treasury") pursuant to which the Corporation agreed to issue and sell 400,000 shares of the Corporation's Fixed Rate Cumulative Perpetual Preferred Stock, Series B, par value $1.00 per share and a warrant to purchase 1,128,668 shares of the Corporation's common stock, par value $1.00 per share at an exercise price of $53.16 per share, for an aggregate purchase price of $400 million in cash. See below under "Supervision and Regulation" and "Management's Discussion and Analysis" for further details regarding this investment,

        The Company has three reportable segments, Commercial and Private Banking, Wealth Management, and Other. All investment advisory affiliates and the Bank's Wealth Management Services are included in the Wealth Management segment. All other subsidiaries, the unallocated portion of corporate departments and inter-segment eliminations are included in the Other segment. Information about the Company's segments is provided in Note 22 to the Consolidated Financial Statements beginning on page A-58 of this report as well as in the "Management's Discussion and

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Analysis" beginning on page 34 of this report. In addition, the following information is provided to assist the reader in understanding the Company's business segments:

        The Bank's principal client base consists of small to mid-sized businesses, entrepreneurs, professionals, and affluent individuals. The Bank serves its clients through relationship banking. The Bank's value proposition is to provide the ultimate banking experience through depth of expertise, breadth of resources, focus and location, dedication to complete solutions, a relationship banking model and an integrated team approach. Through the use of private and commercial banking teams, product specialists and investment advisors, the Bank facilitates the use by the client, where appropriate, of multiple services and products offered by the Company. The Company offers a broad range of lending, deposit, cash management, international banking, equipment financing, and other products and services. The Company also lends, invests, and provides services in accordance with its Community Reinvestment Act ("CRA") commitments.

        The Bank's wealth management division and the Corporation's asset management subsidiaries make available the following investment advisory and wealth management resources and expertise to the Company's clients:

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investment management and advisory services and brokerage services, including portfolio management, securities trading and asset management;

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personal and business trust and investment services, including employee benefit trust services, 401(k) and defined benefit plans; and

•

estate and financial planning and custodial services.

        The Bank also advises and makes available mutual funds under the name of CNI Charter Funds. The Corporation's asset management subsidiaries and the Bank's wealth management division provide both proprietary and nonproprietary products to offer a full spectrum of asset classes and investment styles, including fixed-income instruments, mutual funds, domestic and international equities and alternative investments, such as hedge funds. Investment services are provided to institutional as well as individual clients.

        At December 31, 2008, the Company had 2,989 full-time equivalent employees.

Competition

        There is significant competition among commercial banks and other financial institutions in the Company's market areas. California, New York and Nevada are highly competitive environments for banking and other financial organizations providing private and business banking and wealth management services. The Bank faces competitive credit and pricing pressure as it competes with other banks and financial organizations. The Company's performance is also significantly influenced by California's economy. As a result of the GLB Act, the Company also competes with other providers of financial services such as money market mutual funds, securities firms, credit unions, insurance companies and other financial services companies. Furthermore, interstate banking legislation has promoted more intense competition by eroding the geographic constraints on the financial services industry.

        Our ability to compete effectively is due to our provision of personalized services resulting from management's knowledge and awareness of its clients' needs and its market areas. We believe this relationship banking approach and knowledge provide a business advantage in providing high client satisfaction and serving the small to mid-sized businesses, entrepreneurs, professionals and other affluent individuals that comprise the Company's client base. Our ability to compete also depends on our ability to continue to attract and retain our senior management and other key colleagues. Further, our ability to compete depends in part on our ability to continue to develop and market new and

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innovative products and services and to adopt or develop new technologies that differentiate our products and services.

Economic Conditions, Government Policies, Legislation, and Regulation

        The Company's earnings and profitability, like most financial institutions, are highly sensitive to general business and economic conditions. These conditions include the yield curve, inflation, available money supply, the value of the U.S. dollar as compared to foreign currencies, fluctuations in both debt and equity markets, and the strength of the U.S. economy and the local economies in which we conduct business. The Company's financial performance generally, and in particular the ability of borrowers to pay interest on and repay principal of outstanding loans and the value of collateral securing those loans, is highly dependent upon the business environment in the States of California, Nevada, and New York and in the United States as a whole. Since mid-2007 and particularly during the second half of 2008, the financial services industry and the securities markets generally were materially and adversely affected by significant declines in the values of nearly all asset classes and a serious lack of liquidity. This was initially triggered by declines in home prices and the values of subprime mortgages, but spread to nearly all asset classes, including mortgages and real estate asset classes, leveraged bank loans and equities. The Company is subject to the effects of the economic downturn. In particular, a continued decline in home values and other real estate asset classes in the Company's markets could have a further negative effect on the results of operations.

        In general, the difference between the interest rates paid by the Bank on interest-bearing liabilities, such as deposits and other borrowings, and the interest rates received by the Bank on its interest-earning assets, such as loans extended to its clients and securities held in its investment portfolio, comprise the major portion of the Company's earnings. These rates are highly sensitive to many factors that are beyond the Company's control, such as inflation, recession, and unemployment. Energy and commodity prices and the value of the dollar are additional primary sources of risk and volatility. The impact that future changes in domestic and foreign economic conditions might have on the Company cannot be predicted. See Item 1A—Risk Factors.

        The Company's business and earnings are affected by the monetary and fiscal policies of the federal government and its agencies, particularly the Board of Governors of the Federal Reserve System (the "Federal Reserve"). The Federal Reserve regulates the supply of money and credit in the United States. Among the instruments of monetary policy available to the Federal Reserve are its open-market operations in U.S. Government securities, including adjusting the required level of reserves for depository institutions subject to its reserve requirements, and varying the target federal funds and discount rates applicable to borrowings by depository institutions. The actions of the Federal Reserve in these areas influence the growth of bank loans, investments, and deposits and also affect interest rates earned on interest-earning assets and paid on interest-bearing liabilities. Changes in the policies of the Federal Reserve may have an effect on the Company's business, results of operations and financial condition.

        Proposals to change the laws and regulations governing the operations and taxation of banks, bank holding companies, and other financial institutions and financial services providers are frequently introduced in the U.S. Congress, in the state legislatures, and before various regulatory agencies. The likelihood and timing of any proposals or legislation and the impact they may have on the Company cannot be determined at this time.

Supervision and Regulation

General

        The Corporation, the Bank and the Corporation's non-banking subsidiaries are subject to extensive regulation under both federal and state law. This regulation is intended primarily for the protection of

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depositors, the deposit insurance fund, and the banking system as a whole, and not for the protection of shareholders of the Corporation. Set forth below is a summary description of the significant laws and regulations applicable to the Corporation and the Bank. The description is qualified in its entirety by reference to the applicable laws and regulations.

Regulatory Agencies

        The Corporation is a legal entity separate and distinct from the Bank and its other subsidiaries. As a financial holding company and a bank holding company, the Corporation is regulated under the Bank Holding Company Act of 1956 (the "BHC Act"), and is subject to supervision, regulation and inspection by the Federal Reserve. The Corporation is also under the jurisdiction of the Securities and Exchange Commission ("SEC") and is subject to the disclosure and regulatory requirements of the Securities Act of 1933 and the Securities Exchange Act of 1934, each administered by the SEC. The Corporation is listed on the New York Stock Exchange ("NYSE") under the trading symbol "CYN" and is subject to the rules of the NYSE for listed companies.

        The Bank, as a national banking association, is subject to broad federal regulation and oversight extending to all its operations by the Office of the Comptroller of the Currency ("OCC"), its primary regulator, and also by the Federal Reserve and the Federal Deposit Insurance Corporation.

        The Corporation's non-bank subsidiaries are also subject to regulation by the Federal Reserve and other federal and state agencies, including for those non-bank subsidiaries that are investment advisors, the SEC under the Investment Advisors Act of 1940. City National Securities, Inc. ("CNS") is regulated by the SEC, the Financial Industry Regulatory Authority ("FINRA") and state securities regulators.

        On November 21, 2008, as part of the Troubled Asset Relief Program's ("TARP") Capital Purchase Program ("CPP"), the Corporation entered into a Letter Agreement and Securities Purchase Agreement (collectively, the "Purchase Agreement") with the Treasury, pursuant to which the Corporation sold (i) 400,000 shares of the Corporation's Fixed Rate Cumulative Perpetual Preferred Stock, Series B (the "Series B Preferred Stock") and (ii) a warrant (the "Warrant") to purchase 1,128,668 shares of the Corporation's common stock ("the "Common Stock"), par value $1.00 per share, at an exercise price of $53.16 per share, for an aggregate purchase price of $400 million in cash. The Treasury has certain supervisory and oversight duties and responsibilities under the Emergency Economic Stabilization Act of 2008 ("EESA") and the CPP and pursuant to the Purchase Agreement, Treasury is empowered to unilaterally amend any provision of the Purchase Agreement to the extent required to comply with any changes in applicable federal statutes. The Special Inspector General for the TARP was established pursuant to EESA and has the duty, among other things, to conduct, supervise, and coordinate audits and investigations of the purchase, management and sale of assets by the Treasury under TARP and the CPP, including the shares of non-voting preferred shares purchased from the Corporation. See below under Recent Legislative and Regulatory Initiatives to Address Financial and Economic Crisis.

The Corporation

        The Corporation is a bank holding company and a financial holding company. In general, the BHC Act limits the business of bank holding companies to banking, managing or controlling banks and other activities that the Federal Reserve has determined to be so closely related to banking as to be a proper incident thereto. As a result of the GLB Act, which amended the BHC Act, bank holding companies that are financial holding companies may engage in any activity, or acquire and retain the shares of a company engaged in any activity, that is either (i) financial in nature or incidental to such financial activity (as determined by the Federal Reserve in consultation with the OCC) or (ii) complementary to a financial activity, and that does not pose a substantial risk to the safety and soundness of depository institutions or the financial system generally (as determined solely by the Federal Reserve). Activities

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that are financial in nature include securities underwriting and dealing, insurance underwriting and agency, and making merchant banking investments.

        If a bank holding company seeks to engage in the broader range of activities that are permitted under the BHC Act for financial holding companies, (i) all of its depository institution subsidiaries must be "well capitalized" and "well managed" and (ii) it must file a declaration with the Federal Reserve that it elects to be a financial holding company. A depository institution subsidiary is considered to be "well capitalized" if it satisfies the requirements for this status discussed in the section captioned "Capital Adequacy and Prompt Corrective Action," included elsewhere in this item. A depository institution subsidiary is considered "well managed" if it received a composite rating and management rating of at least "satisfactory" in its most recent examination. In addition, the subsidiary depository institution must have received a rating of at least "satisfactory" in its most recent examination under the Community Reinvestment Act. (See the section captioned "Community Reinvestment Act" included elsewhere in this item.)

        Financial holding companies that do not continue to meet all of the requirements for such status will, depending on which requirement they fail to meet, face not being able to undertake new activities or acquisitions that are financial in nature, or losing their ability to continue those activities that are not generally permissible for bank holding companies. In addition, failure to satisfy conditions prescribed by the Federal Reserve to comply with any such requirements could result in orders to divest banking subsidiaries or to cease engaging in activities other than those closely related to banking under the BHC Act.

        The BHC Act, the Federal Bank Merger Act, and other federal and state statutes regulate acquisitions of commercial banks. The BHC Act requires the prior approval of the Federal Reserve for the direct or indirect acquisition of control of a commercial bank or its parent holding company, whether by (i) the acquisition of 25 percent or more of any class of voting securities; (ii) controlling the election of a majority of the directors; or (iii) the exercise of a controlling influence over the management or policies of the banking organization, which can include the acquisition of as little as 5 percent of any class of voting securities together with other factors. Under the Federal Bank Merger Act, the prior approval of the OCC is required for a national bank to merge with another bank or purchase the assets or assume the deposits of another bank. In reviewing applications seeking approval of merger and acquisition transactions, the bank regulatory authorities will consider, among other things, the competitive effect and public benefits of the transactions, the capital position of the combined organization, the applicant's performance record under the Community Reinvestment Act (see the section captioned "Community Reinvestment Act" included elsewhere in this item), fair housing laws and the effectiveness of the subject organizations in combating money laundering activities.

Source of Strength Doctrine

        Federal Reserve policy requires a bank holding company to serve as a source of financial and managerial strength to its subsidiary banks and does not permit a bank holding company to conduct its operations in an unsafe or unsound manner. Under this "source of strength doctrine," a bank holding company is expected to stand ready to use its available resources to provide adequate capital funds to its subsidiary banks during periods of financial stress or adversity, and to maintain resources and the capacity to raise capital that it can commit to its subsidiary banks. Any capital loans by a bank holding company to any of its subsidiary banks are subordinate in right of payment of deposits and to certain other indebtedness of such subsidiary banks. The BHC Act provides that, in the event of a bank holding company's bankruptcy, any commitment by the bank holding company to a federal bank regulatory agency to maintain the capital of a subsidiary bank will be assumed by the bankruptcy trustee and entitled to priority of payment. In addition, under the National Bank Act, if the capital stock of the Bank is impaired by losses or otherwise, the OCC is authorized to require payment of the

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deficiency by assessment upon the Corporation. If the assessment is not paid within three months, the OCC could order a sale of the Bank stock held by the Corporation to make good the deficiency. Furthermore, the Federal Reserve has the right to order a bank holding company to terminate any activity that the Federal Reserve believes is a serious risk to the financial safety, soundness or stability of any subsidiary bank.

The Bank

        The OCC has extensive examination, supervision and enforcement authority over all national banks, including the Bank. If, as a result of an examination of a bank, the OCC determines that the financial condition, capital resources, asset quality, earnings prospects, management, liquidity, or other aspects of the bank's operations are unsatisfactory or that the bank or its management is violating or has violated any law or regulation, various remedies are available to the OCC. These remedies include the power to enjoin "unsafe or unsound" practices, to require affirmative action to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in capital, to restrict the growth of the Bank, to assess civil monetary penalties, to remove officers and directors, and ultimately to terminate the Bank's deposit insurance.

        The OCC, as well as other federal banking agencies, has adopted regulations and guidelines establishing safety and soundness standards, including but not limited to such matters as loan underwriting and documentation, risk management, internal controls and audit systems, interest rate risk exposure, asset quality and earnings and compensation and other employee benefits.

        Various other requirements and restrictions under the laws of the United States affect the operations of the Bank. Statutes and regulations relate to many aspects of the Bank's operations, including reserves against deposits, ownership of deposit accounts, interest rates payable on deposits, loans, investments, mergers and acquisitions, borrowings, dividends, locations of branch offices, and capital requirements.

Recent Legislative and Regulatory Initiatives to Address Financial and Economic Crisis

        The Congress, Treasury and the federal banking regulators, including the FDIC, have taken broad action since early September 2008 to address volatility in the U.S. financial system.

        In October 2008, EESA was enacted. EESA authorizes Treasury to purchase from financial institutions and their holding companies up to $700 billion in mortgage loans, mortgage-related securities and certain other financial instruments, including debt and equity securities issued by financial institutions and their holding companies under TARP. The purpose of TARP is to restore confidence and stability to the U.S. banking system and to encourage financial institutions to increase their lending to customers and to each other. Treasury has allocated $250 billion towards the TARP's CPP. Under the CPP, Treasury will purchase debt or equity securities from participating institutions. The TARP also will include direct purchases or guarantees of troubled assets of financial institutions. Participants in the CPP are subject to executive compensation limits and are encouraged to expand their lending and mortgage loan modifications. The American Recovery and Reinvestment Act of 2009 ("ARRA"), as described below, has further modified TARP and the CPP.

        On November 21, 2008, as part of the TARP CPP, the Corporation entered into the Purchase Agreement with Treasury, pursuant to which the Corporation sold the Series B Preferred Stock and the Warrant to purchase 1,128,668 shares of the Common Stock for an aggregate purchase price of $400 million in cash. The Series B Preferred Stock will qualify as Tier 1 capital and will pay cumulative dividends at a rate of 5% per annum for the first five years, and 9% per annum thereafter. The effective pre-tax cost to the Company for participating in the TARP CPP is approximately 9.5 percent, consisting of 8.6 percent for dividends and 0.9 percent for the accretion on preferred stock, and is

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based on the statutory tax rate. The Series B Preferred Stock may be redeemed by the Corporation after three years. Prior to the end of three years, subject to the provisions of ARRA described below, the Series B Preferred Stock may be redeemed by the Corporation only with proceeds from the sale of qualifying equity securities of the Corporation which results in aggregate gross proceeds to the Corporation of not less than 25% of the issue price of the Series B Preferred. The Warrant has a 10-year term and is immediately exercisable upon its issuance, with an exercise price, subject to anti-dilution adjustments, equal to $53.16 per share of the common stock. If the Company receives aggregate proceeds of at least $400 million from sales of Tier 1 qualifying perpetual preferred stock prior to December 31, 2009, the number of shares to be delivered upon settlement of the Warrant will be reduced by 50 percent. Please see our Current Report on Form 8-K filed on November 24, 2008, for additional information.

        ARRA was signed into law on February 17, 2009. ARRA contains a wide variety of programs intended to stimulate the economy and provide for extensive infrastructure, energy, health, and education needs. In addition, ARRA imposes certain new executive compensation and corporate expenditure limits on all current and future TARP recipients, including the Corporation, until the institution has repaid the Treasury, which is now permitted under ARRA without the need to raise new capital, subject to the Treasury's consultation with the recipient's appropriate regulatory agency. When the institution has repaid the Treasury, the Treasury is to liquidate the Warrant at the current market price.

        EESA also increased FDIC deposit insurance on most accounts from $100,000 to $250,000 through 2009.

        Following a systemic risk determination, the FDIC established a Temporary Liquidity Guarantee Program ("TLGP") on October 14, 2008. The TLGP includes the Transaction Account Guarantee Program ("TAGP"), which provides unlimited deposit insurance coverage through December 31, 2009 for noninterest-bearing transaction accounts (including all demand deposit checking accounts) and certain funds swept into noninterest-bearing savings accounts. Institutions participating in the TAGP pay a 10 basis points fee (annualized) on the balance of each covered account in excess of $250,000, while the extra deposit insurance is in place. The TLGP also includes the Debt Guarantee Program ("DGP"), under which the FDIC guarantees certain senior unsecured debt of FDIC-insured institutions and their holding companies. The unsecured debt must be issued on or after October 14, 2008 and not later than June 30, 2009, and the guarantee is effective through the earlier of the maturity date or June 30, 2012. The DGP coverage limit is generally 125% of the eligible entity's eligible debt outstanding on September 30, 2008 and scheduled to mature on or before June 30, 2009 or, for certain insured institutions, 2% of their liabilities as of September 30, 2008. Depending on the term of the debt maturity, the nonrefundable DGP fee ranges from 50 to 100 basis points (annualized) for covered debt outstanding until the earlier of maturity or June 30, 2012. The TAGP and DGP are in effect for all eligible entities, unless the entity opted out on or before December 5, 2008. The Corporation and the Bank participate in the TAGP and did not opt out of the DGP. As of February 23, 2009, the Company had not utilized the DGP by issuing senior unsecured debt.

        In late September 2008, the Treasury opened its Temporary Guarantee Program for Money Market Mutual Funds (the "Temporary Guarantee Program"). The Treasury will guarantee the share price of any publicly-offered eligible money market fund that satisfies certain conditions and applies for and pays a fee to participate in the Temporary Guarantee Program. The Temporary Guarantee Program provides coverage to shareholders for amounts that they held in participating money market funds at the close of business on September 19, 2008. The guarantee will be triggered if the market value of assets held in a participating fund falls below $0.995, the fund's sponsor chooses not to maintain the $1.00 share price, and the fund's board determines to liquidate the fund. The Temporary Guarantee Program is designed to address temporary dislocations in credit markets and is currently set to expire on April 30, 2009. The Secretary of the Treasury may further extend the Temporary Guarantee Program

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up to September 18, 2009, and continued insurance protection is contingent upon funds renewing their coverage and paying any additional required fee.

        The CNI Charter Funds participate in Treasury's Temporary Guarantee Program for Money Market Mutual Funds.

Anti-Money Laundering and OFAC Regulation

        A major focus of governmental policy on financial institutions in recent years has been aimed at combating money laundering and terrorist financing. The Bank Secrecy Act of 1970 ("BSA") and subsequent laws and regulations require the Bank to take steps to prevent the use of the Bank or its systems from facilitating the flow of illegal or illicit money and to file suspicious activity reports. Those requirements include ensuring effective Board and management oversight, establishing policies and procedures, developing effective monitoring and reporting capabilities, ensuring adequate training and establishing a comprehensive internal audit of BSA compliance activities. The USA Patriot Act of 2001 ("Patriot Act") significantly expanded the anti-money laundering ("AML") and financial transparency laws and regulations by imposing significant new compliance and due diligence obligations, creating new crimes and penalties and expanding the extra-territorial jurisdiction of the United States. Regulations promulgated under the Patriot Act impose various requirements on financial institutions, such as standards for verifying client identification at account opening and maintaining expanded records (including "Know Your Customer" and "Enhanced Due Diligence" practices) and other obligations to maintain appropriate policies, procedures and controls to aid the process of preventing, detecting, and reporting money laundering and terrorist financing. The Patriot Act also applies BSA procedures to broker-dealers. An institution subject to the Patriot Act must provide AML training to employees, designate an AML compliance officer and annually audit the AML program to assess its effectiveness. The OCC continues to issue regulations and new guidance with respect to the application and requirements of BSA and AML. The United States has imposed economic sanctions that affect transactions with designated foreign countries, nationals and others. Based on their administration by Treasury's Office of Foreign Assets Control ("OFAC"), these are typically known as the "OFAC" rules. The OFAC-administered sanctions targeting countries take many different forms. Generally, however, they contain one or more of the following elements: (i) restrictions on trade with or investment in a sanctioned country, including prohibitions against direct or indirect imports from and exports to a sanctioned country and prohibitions on "U.S. persons" engaging in financial transactions relating to making investments in, or providing investment-related advice or assistance to, a sanctioned country; and (ii) a blocking of assets in which the government or specially designated nationals of the sanctioned country have an interest, by prohibiting transfers of property subject to U.S. jurisdiction (including property in the possession or control of U.S. persons). Blocked assets (e.g., property and bank deposits) cannot be paid out, withdrawn, set off or transferred in any manner without a license from OFAC.

        Failure of a financial institution to maintain and implement adequate BSA, AML and OFAC programs, or to comply with all of the relevant laws or regulations, could have serious legal and reputational consequences for the institution.

Dividends and Other Transfers of Funds

        The Corporation is a legal entity separate and distinct from the Bank. Dividends from the Bank constitute the principal source of cash revenues to the Corporation. The Bank is subject to various statutory and regulatory restrictions on its ability to pay dividends to the Corporation. The prior approval of the OCC is required if the total of all dividends declared by a national bank in any calendar year would exceed the sum of the bank's net profits for that year and its retained net profits for the preceding two calendar years, less any required transfers to surplus. Federal law also prohibits national banks from paying dividends that would be greater than the bank's undivided profits after deducting statutory bad debt in excess of the bank's allowance for loan and lease losses. In addition,

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federal bank regulatory authorities can prohibit the Bank from paying dividends, depending upon the Bank's financial condition and compliance with capital and non-capital safety and soundness standards established under the Federal Deposit Insurance Act, as described below. Federal regulatory authorities have indicated that paying dividends that deplete a bank's capital base to an inadequate level would be an unsafe and unsound banking practice and that banking organizations should generally pay dividends only out of current operating earnings. See Note 20 of Notes to Consolidated Financial Statements for additional information.

        The terms of the Series B Preferred Stock include a restriction against increasing the Corporation's Common Stock dividends from levels at the time of the initial investment by the Treasury and prevents the Corporation from redeeming, purchasing or otherwise acquiring its Common stock or any trust preferred securities issued by the Corporation other than for certain stated exceptions. These restrictions will terminate on the earlier of (a) the third anniversary of the date of issuance of the Series B Preferred Stock and (b) the date on which the Series B Preferred Stock has been redeemed in whole or Treasury has transferred all of the Series B Preferred Stock to third parties. In addition, the Corporation will be unable to declare or pay dividends or distributions on, or repurchase, redeem or otherwise acquire for consideration, shares of its Common Stock and other stock ranking junior to, or in parity with, the Series B Preferred Stock if the Corporation fails to declare and pay full dividends (or declare and set aside a sum sufficient for payment thereof) on its Series B Preferred Stock. Under ARRA, the Company may repay the Treasury without penalty, and without the need to raise new capital, subject to Treasury's consultation with the appropriate regulating agency, in which event these restrictions would no longer apply.

        Federal law limits the ability of the Bank to extend credit to the Corporation or its other affiliates, to invest in stock or other securities thereof, to take such securities as collateral for loans, and to purchase assets from the Corporation or other affiliates. These restrictions prevent the Corporation and such other affiliates from borrowing from the Bank unless the loans are secured by marketable obligations of designated amounts. Further, such secured loans and investments by the Bank to or in the Corporation or to or in any other affiliate are limited individually to 10 percent of the Bank's capital stock and surplus and in the aggregate to 20 percent of the Bank's capital stock and surplus. See Note 20 of Notes to Consolidated Financial Statements on page A-54 of this report.

        Federal law also provides that extensions of credit and other transactions between the Bank and the Corporation or one of its non-bank subsidiaries must be on terms and conditions, including credit standards, that are substantially the same or at least as favorable to the Bank as those prevailing at the time for comparable transactions involving other non-affiliated companies, or, in the absence of comparable transactions, on terms and conditions, including credit standards, that in good faith would be offered to, or would apply to, non-affiliated companies. Further, a bank holding company and its subsidiaries are prohibited from engaging in certain tie-in arrangements in connection with any extension of credit, lease or sale of property, or furnishing of services.

Capital Adequacy and Prompt Corrective Action

        Each federal banking regulatory agency has adopted risk-based capital regulations under which a banking organization's capital is compared to the risk associated with its operations for both transactions reported on the balance sheet as assets as well as transactions which are off-balance sheet items, such as letters of credit and recourse arrangements. Under the capital regulations, the nominal dollar amounts of assets and the balance sheet equivalent amounts of off-balance sheet items are multiplied by one of several risk adjustment percentages, which range from 0 percent for asset categories with low credit risk, such as certain Treasury securities, to 100 percent for asset categories with relatively high credit risk, such as commercial loans.

        In addition to the risk-based capital guidelines, federal banking regulatory agencies require banking organizations to maintain a minimum amount of Tier 1 capital to total assets, referred to as the

10

leverage ratio. For a banking organization rated composite 1 under the "Composite Uniform Financial Institutions Rating System ("CAMELS")" for banks, which indicates the lowest level of supervisory concern of the five categories used by the federal banking agencies to rate banking organizations ("5" being the highest level of supervisory concern), the minimum leverage ratio is 3 percent. For all banking organizations other than those rated composite 1 under the CAMELS system, the minimum leverage ratio is 4 percent. Banking organizations with supervisory, financial, operational, or managerial weaknesses, as well as organizations that are anticipating or experiencing significant growth, are expected to maintain capital ratios above the minimum levels. In addition to these uniform risk-based capital guidelines and leverage ratios that apply across the industry, the federal banking agencies have the discretion to set individual minimum capital requirements for specific institutions at rates significantly above the minimum guidelines and ratios.

        At December 31, 2008, the Corporation and the Bank each exceeded the required risk-based capital ratios for classification as "well capitalized" as well as the required minimum leverage ratios. See "Management's Discussion and Analysis—Balance Sheet Analysis—Capital" on page 79 of this report.

        The Federal Deposit Insurance Act (FDICIA) requires federal bank regulatory agencies to take "prompt corrective action" with respect to FDIC-insured depository institutions that do not meet minimum capital requirements. A depository institution's treatment for purposes of the prompt corrective action provisions will depend on how its capital levels compare to various capital measures and certain other factors, as established by regulation. FDICIA imposes progressively more restrictive constraints on operations, management and capital distributions depending on the category in which an institution is classified. Failure to meet the capital guidelines could also subject a banking institution to capital raising requirements. An "undercapitalized" bank must develop a capital restoration plan and its parent holding company must guarantee that bank's compliance with the plan. The liability of the parent holding company under any such guarantee is limited to the lesser of five percent of the bank's assets at the time it become "undercapitalized" or the amount needed to comply with the plan. Furthermore, in the event of the bankruptcy of the parent holding company, such guarantee would take priority over the parent's general unsecured creditors. In addition, FDICIA requires the various regulatory agencies to prescribe certain non-capital standards for safety and soundness relating generally to operations and management, asset quality and executive compensation and permits regulatory action against a financial institution that does not meet such standards.

        The existing U.S. federal bank regulatory agencies' risk-based capital guidelines are based upon the 1988 capital accord ("Basel I") of the Basel Committee on Banking Supervision ("BIS"). The BIS is a committee of central banks and bank supervisors/regulators from the major industrialized countries that develops broad policy guidelines for use by each country's supervisors in determining the supervisory policies they apply.

        For several years, the U.S. bank regulators have been preparing to implement a new framework for risk-based capital adequacy developed by the Basel Committee on Banking Supervision, sometimes referred to as "Basel II." In July 2007, the U.S. bank regulators announced an agreement reflecting their current plan for implementing the most advanced approach under Basel II for the largest, most internationally active financial institutions. The agreement also provides that the regulators will propose rules permitting other financial institutions, such as the Corporation, to choose between the current method of calculating risked-based capital ("Basel I") and the "standardized" approach under Basel II. The standardized approach under Basel II would lower risk weightings for certain categories of assets (including mortgages) from the weightings reflected in Basel I, but would also require an explicit capital charge for operational risk, which is not required by Basel I. In connection with comments received on the prior proposal, in July 2008, the U.S. bank regulators proposed a new rule, which includes the previously mentioned methods to calculate risked-based capital, but for institutions using the "standardized" framework, modifies the method for determining the leverage ratio requirement.

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        At this time, the Corporation cannot predict the final form the Basel II standardized framework will take, when it will be implemented, the effect that it might have on the Bank's financial condition or results of its operations, or how these effects might impact the Corporation.

Premiums for Deposit Insurance

        The Bank's deposit accounts are insured by the Deposit Insurance Fund ("DIF"), as administered by the Federal Deposit Insurance Corporation (the "FDIC"), up to the maximum permitted by law. The Bank is also participating in the FDIC's TAGP, as discussed above. Insurance of deposits may be terminated by the FDIC upon a finding that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order, or condition imposed by the FDIC or the institution's primary regulator.

        The FDIC charges an annual assessment for the insurance of deposits, which as of December 31, 2008 ranged from 5 to 43 cents per $100 of insured deposits. The FDIC has announced new risk-based interim rates for the first quarter of 2009 that range from 12 to 50 cents per $100 of insured deposits, and proposed rates expected to take effect beginning April 1, 2009 that range from 8 to 77.5 cents per $100 of insured deposits, The FDIC's rates are based on the risk a particular institution poses to the DIF, based on an institution's capital group and supervisory subgroup assignment. An institution's capital group is based on the FDIC's determination of whether the institution is well capitalized, adequately capitalized, or less than adequately capitalized. An institution's supervisory subgroup assignment is based on the FDIC's assessment of the financial condition of the institution and the probability that FDIC intervention or other corrective action will be required. Starting in April 2009, the FDIC's rates may also be reduced up to 2 cents per $100 of insured deposits for an unsecured debt adjustment and increased up to 22.5 cents per $100 of insured deposits for a secured liability adjustment and up to 10 cents per $100 of insured deposits for a brokered deposit adjustment. In addition to its normal deposit insurance premium as a member of the DIF, the Bank must pay an additional premium toward the retirement of the Financing Corporation bonds ("FICO Bonds") issued in the 1980s to assist in the recovery of the savings and loan industry. In 2008, this premium was approximately $1.3 million, determined at the blended rate of 1.12 cents per $100 of insured deposits. This rate has increased to 1.14 cents per $100 of deposits effective January 1, 2009. Further increase in the assessment rates in future years could have an adverse effect on the Company's earnings, depending on the amount of the increase.

Depositor Preference

        The Federal Deposit Insurance Act provides that, in the event of the "liquidation or other resolution" of an insured depository institution, the claims of depositors of the institutions, including the claims of the FDIC as subrogee of insured depositors, and certain claims for administrative expenses of the FDIC as a receiver, will have priority over other general unsecured claims against the institution. If an insured depository institution fails, insured and uninsured depositors, along with the FDIC, will have priority in payment ahead of unsecured non-deposit creditors, including the parent bank holding company, with respect to any extensions of credit they have made to such insured depository institution.

Interstate Banking and Branching

        The Riegle-Neal Interstate Banking and Branching Act permits banks and bank holding companies from any state to acquire banks located in any other state, subject to certain conditions, including certain nationwide and state-imposed concentration limits. The Company also has the ability, subject to certain restrictions, to acquire branches outside its home state by acquisition or merger. The establishment of new interstate branches is also possible in those states with laws that expressly permit

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de novo branching. The Corporation has established or acquired banking operations outside its home state of California in the states of New York and Nevada.

Community Reinvestment Act

        Under the Community Reinvestment Act of 1977 ("CRA"), the Bank has a continuing and affirmative obligation consistent with safe and sound banking practices to help meet the credit needs of its entire community, including low and moderate income neighborhoods. CRA does not establish specific lending requirements or programs for financial institutions nor does it limit an institution's discretion to develop the types of products and services that it believes are best suited to its particular community, consistent with CRA. CRA generally requires the federal banking agencies to evaluate the record of a financial institution in meeting the credit needs of its local communities and to take that record into account in its evaluation of certain applications by such institution, such as applications for charters, branches and other deposit facilities, relocations, mergers, consolidations and acquisitions or engage in certain activities pursuant to the GLB Act. An unsatisfactory rating may be the basis for denying the application. Based on its most recent examination report from January 2006, the Bank received an overall rating of "satisfactory." In arriving at the overall rating, the OCC rated the Bank's performance levels under CRA with respect to lending (high satisfactory), investment (outstanding) and service (high satisfactory).

Consumer Protection Laws

        The Company is subject to a number of federal and state laws designed to protect borrowers and promote lending to various sectors of the economy and population. These laws include the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Home Mortgage Disclosure Act, and the Real Estate Settlement Procedures Act, and various state law counterparts.

        In addition, federal law and certain state laws (including California) currently contain client privacy protection provisions. These provisions limit the ability of banks and other financial institutions to disclose non-public information about consumers to affiliated companies and non-affiliated third parties. These rules require disclosure of privacy policies to clients and, in some circumstance, allow consumers to prevent disclosure of certain personal information to affiliates or non-affiliated third parties by means of "opt out" or "opt in" authorizations. Pursuant to the GLB Act and certain state laws (including California) companies are required to notify clients of security breaches resulting in unauthorized access to their personal information.

Securities and Exchange Commission

        The Sarbanes-Oxley Act of 2002 ("SOX") imposed significant new requirements on publicly-held companies such as the Corporation, particularly in the area of external audits, financial reporting and disclosure, conflicts of interest, and corporate governance at public companies. The Company, like other public companies, has reviewed and reinforced its internal controls and financial reporting procedures in response to the various requirements of SOX and implementing regulations issued by the SEC and the New York Stock Exchange. The Company emphasized best practices in corporate governance before SOX and has continued to do so in compliance with SOX.

        The SEC regulations applicable to the Company's investment advisers cover all aspects of the investment advisory business, including compliance requirements, limitations on fees, record-keeping, reporting and disclosure requirements and general anti-fraud prohibitions.

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Executive Officers of the Registrant

        Shown below are the names and ages of all executive officers of the Corporation and officers of the Bank who are deemed to be executive officers of the Corporation as of February 2, 2009, with indication of all positions and offices with the Corporation and the Bank.

Name	Age		Present principal occupation and principal occupation during the past five years
Russell Goldsmith (1)		58	President, City National Corporation since May 2005; Chief Executive Officer, City National Corporation and Chairman of the Board and Chief Executive Officer, City National Bank since October 1995; Vice Chairman of City National Corporation October 1995 to May 2005.
Bram Goldsmith		85	Chairman of the Board, City National Corporation
Christopher J. Carey		54	Executive Vice President and Chief Financial Officer, City National Corporation and City National Bank since July 2004; Executive Vice President and Chief Financial Officer, Provident Financial Group, November 1998 to June 2004.
Christopher J. Warmuth		54	Executive Vice President, City National Corporation and President, City National Bank since May 2005; Executive Vice President and Chief Credit Officer, City National Bank June 2002 to May 2005.
Michael B. Cahill		55	Executive Vice President, Corporate Secretary and General Counsel, City National Bank and City National Corporation since June 2001; Manager, Legal and Compliance Division since 2005.
Brian Fitzmaurice		48	Executive Vice President and Chief Credit Officer, City National Bank since February 2006; Senior Risk Manager, Citibank West, FSB successor to California Federal Bank, FSB, November 2002 to February 2006.
Olga Tsokova		35	Senior Vice President and Chief Accounting Officer, City National Corporation and City National Bank since July 2008 and SOX 404 Manager since March 2005; Controller, City National Bank, July 2008 to September 2008; Ernst & Young LLP, Assurance and Advisory Business Services, Financial Services Group, Senior Manager from October 2003 to March 2005.

(1)

Russell Goldsmith is the son of Bram Goldsmith.

Available Information

        The Company's home page on the Internet is www.cnb.com. The Company makes its web site content available for information purposes only. It should not be relied upon for investment purposes, nor is it incorporated by reference into this Form 10-K.

        The Company makes its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and proxy statement for its annual shareholder meetings, as well as any amendment to those reports, available free of charge through the Investor Relations page of its web site as soon as reasonably practicable after it electronically files such material with, or furnishes it to, the SEC. More information about the Company can be obtained by reviewing the Company's SEC filings on its web site. Information about the Corporation's Board of Directors (the "Board") and its committees and the Company's corporate governance policies and practices is available on the

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Corporate Governance section of the Investor Relations page of the Company's web site. The SEC also maintains a web site at www.sec.gov that contains reports, proxy statements and other information regarding SEC registrants, including the Corporation.

Item 1A—Risk Factors

Forward-Looking Statements

        This report and other reports and statements issued by the Company and its officers from time to time contain forward-looking statements that are subject to risks and uncertainties. These statements are based on the beliefs and assumptions of our management, and on information currently available to our management. Forward-looking statements include information concerning our possible or assumed future results of operations, and statements preceded by, followed by, or that include the words "will," "believes," "expects," "anticipates," "intends," "plans," "estimates," or similar expressions.

        Our management believes these forward-looking statements are reasonable. However, you should not place undue reliance on the forward-looking statements, since they are based on current expectations. Actual results may differ materially from those currently expected or anticipated. Forward-looking statements are not guarantees of performance. By their nature, forward-looking statements are subject to risks, uncertainties, and assumptions. These statements speak only as of the date they are made. The Company does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements are made or to update earnings guidance including the factors that influence earnings. A number of factors, many of which are beyond the Company's ability to control or predict, could cause future results to differ materially from those contemplated by such forward-looking statements. These factors include, without limitation, the significant factors set forth below.

Factors That May Affect Future Results

        General business and economic conditions may significantly affect our earnings.    Our business and earnings are sensitive to general business and economic conditions. A favorable business environment is generally characterized by, among other factors, economic growth, efficient capital markets, low inflation, high business and investor confidence and strong business earnings. Unfavorable or uncertain economic and market conditions can be caused by: declines in economic growth, business activity or investor or business confidence; limitations on the availability or increases in the cost of credit and capital; increases in volatility, inflation or interest rates; natural disasters; or a combination of these or other factors.

        Since December 2007, the United States has been in a recession. Business activity across a wide range of industries and regions is greatly reduced and local governments and many businesses are in serious difficulty due to the lack of consumer spending and the lack of liquidity in the credit markets. Unemployment has increased significantly. It is expected that the business environment will continue to deteriorate for the foreseeable future. There can be no assurance when these conditions will improve. The resulting economic pressure on consumers and lack of confidence in the financial market could adversely affect our business, financial condition and results of operations.

        Dramatic declines in the housing market over the past year, with falling home prices and increasing foreclosures, unemployment and under-employment, have negatively impacted the credit performance of real estate related loans and resulted in significant write-downs of asset values by financial institutions, including government sponsored entities. These write-downs, initially of asset-backed securities but spreading to other securities and loans, have caused many financial institutions to seek additional capital, to reduce or eliminate dividends, to merge with larger and stronger institutions and, in some cases, to fail. Reflecting concern about the stability of the financial markets generally and the strength of counterparties, many lenders and institutions investors have reduced or ceased providing

15

funding to borrowers, including to other financial institutions. This market turmoil and tightening of credit have led to an increased level of commercial and consumer delinquencies, lack of consumer confidence, increased market volatility and widespread reduction of business activity generally.

        The Corporation's financial performance generally, and the ability of borrowers to pay interest on and repay principal of outstanding loans and the value of collateral securing those loans, is highly dependent upon the business environment in the markets where the Corporation operates and in the United States as a whole. Declines in home values in the Company's markets in California, Nevada and New York, has adversely impacted results of operations. A continued decline in home values in the Company's markets could have a further negative effect on results of operations, and a significant decline in home values would likely lead to increased delinquencies and credit quality issues in the Company's residential mortgage loan portfolio and home-equity loan portfolio. In addition, a prolonged economic downturn coupled with increased unemployment and decreased consumer spending could have a further negative effect on results of the Company's operations through higher credit losses in the commercial loan, commercial real estate loan and commercial real estate construction loan portfolios. A continued slowdown in real estate can also adversely affect title and escrow deposit balances, a relatively low-cost source of funds.

        Current levels of market volatility are unprecedented.    The capital and credit markets have been experiencing volatility and disruption for more than 12 months. Recently, the volatility and disruption has reached unprecedented levels. In some cases, the markets have produced downward pressure on stock prices and credit availability for certain issuers without regard to those issuers' underlying financial strength. If current levels of market disruption and volatility continue or worsen, there can be no assurance that we will not experience an adverse effect, which may be material, on our ability to access capital and on our business, financial condition and results of operations.

        Significant changes in banking laws or regulations and federal monetary policy could materially affect our business.    The banking industry is subject to extensive federal and state regulations, and significant new laws or changes in, or repeals of, existing laws may cause results to differ materially. Also, federal monetary policy, particularly as implemented through the Federal Reserve System, significantly affects our credit conditions, primarily through open market operations in U.S. government securities, the discount rate for member bank borrowing, and bank reserve requirements. A material change in these conditions would affect our results. Parts of our business are also subject to federal and state securities laws and regulations. Significant changes in these laws and regulations would also affect our business. For further discussion of the regulation of financial services, including a description of significant recently-enacted legislation and other regulatory initiatives taken in response to the recent financial crisis, see "Supervision and Regulation" and the discussion under Item 1, Business, "Economic Conditions, Government Policies, Legislation and Regulation."

        These banking laws and regulations, including the recently-enacted legislation and other regulatory initiatives taken in response to the recent financial crisis, may have adverse effects upon us. We may face increased regulation of our industry. Compliance with such regulation may increase our costs. Also, participation in specific programs may subject us to additional restrictions. For example, our participation in the TARP Capital Purchase Program limits (without the consent of Treasury) our ability to increase our dividend and to repurchase our common stock for so long as any securities issued under such program remain outstanding. It also subjects us to additional executive compensation restrictions. Similarly, programs established by the FDIC may have an adverse effect on us. Expansion of FDIC deposit insurance coverage and participation in the FDIC Temporary Liquidity Guarantee Program are expected to require the payment of significant additional insurance premiums to the FDIC.

        There can be no assurance that recently enacted legislation will stabilize the U.S. financial system.    The failure of recently-enacted legislation and other regulatory initiatives taken in response to the

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recent financial crisis to stabilize the financial markets and a continuation or worsening of current financial market conditions could materially and adversely affect our business, financial condition, results of operations, access to credit or the trading price of our common stock. There can be no assurance as to the actual impact this legislation, these regulatory initiatives and any other governmental programs will have on the financial markets.

        Changes in interest rates affect our profitability.    We derive our income mainly from the difference or "spread" between the interest we earn on loans, securities, and other interest-earning assets, and interest we pay on deposits, borrowings, and other interest-bearing liabilities. In general, the wider this spread, the more we earn. When market rates of interest change, the interest we earn on our assets and the interest we pay on our liabilities fluctuate. This causes our spread to increase or decrease and affects our net interest income. We expect that we will periodically experience "gaps" in the interest rate sensitivities of our assets and liabilities, meaning that either our interest-bearing liabilities will be more sensitive to changes in market interest rates than our interest-earning assets, or vice versa. In either event, if market interest rates should move contrary to our position, this "gap" would work against us, and our earnings may be negatively affected. In addition, interest rates affect how much money we lend, and changes in interest rates may negatively affect deposit growth.

Our results would be adversely affected if we suffered higher than expected losses on our loans due to a slowing economy, real estate cycles or other economic events which could require us to increase our allowance for loan and lease losses. We assume credit risk from the possibility that we will suffer losses because borrowers, guarantors, and related parties fail to perform under the terms of their loans. We try to minimize and monitor this risk by adopting and implementing what we believe are effective underwriting and credit policies and procedures, including how we establish and review the allowance for loan and lease losses. We assess the likelihood of nonperformance, track loan performance, and diversify our credit portfolio. Those policies and procedures may still not prevent unexpected losses that could adversely affect our results. The Company continually monitors changes in the economy, particularly housing prices and unemployment rates. There are inherent risks in our lending activities, including flat or volatile interest rates and changes in the economics conditions in the markets in which we operate. Continuing weakening economic conditions could adversely impact the ability of borrowers to repay outstanding loans or the value of collateral securing those loans. If the value of real estate in the Company's market declines materially, a significant portion of the loan portfolio could become under-collateralized which could have a further negative effect on results of operations. We monitor the value of collateral, such as real estate, for loans made by us. Continuing deterioration in economic conditions affecting borrowers, new information regarding existing loans, identification of additional problem loans and other factors, both within and outside of the Company's control, may require an increase in the allowance for loan and lease losses. See the section captioned "Loan Portfolio" and "Asset Quality" in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations located elsewhere in this report for further discussion related to our loan portfolio and our process for determining the appropriate level of the allowance for possible loan losses.

        A portion of the income generated by our wealth management division and asset management affiliates is subject to market valuation risks.    A substantial portion of trust and investment fee income is based on equity, fixed income and other market valuations. As a result, volatility in these markets can positively or negatively impact noninterest income. In addition, because of the low interest rate environment, the off-balance sheet money market funds managed by our wealth management business may be at a greater risk of being moved by our clients to another company or to the Bank's on-balance sheet money market funds. As a result, this may have an unfavorable impact overall on our earnings. However, this could enhance the Company's overall liquidity position.

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        We may experience further write downs of our financial instruments and other losses related to volatile and illiquid market conditions.    Market volatility, illiquid market conditions and disruptions in the credit markets have made it extremely difficult to value certain of our securities. Subsequent valuations, in light of factors then prevailing, may result in significant changes in the values of these securities in future periods. In addition, at the time of any sales and settlements of these securities, the price we ultimately realize will depend on the demand and liquidity in the market at that time and may be materially lower than their current fair value. Any of these factors could require us to take further write downs in the value of our securities portfolio, which may have an adverse impact on our results of operations in future periods.

        Bank clients could move their money to alternative investments causing us to lose a lower cost source of funding.    Demand deposits can decrease when clients perceive alternative investments, such as those available in our wealth management business, as providing a better risk/return tradeoff. Technology and other changes have made it more convenient for bank customers to transfer funds into alternative investments or other deposit accounts offered by other financial institutions or non-bank service providers. When clients move money out of bank demand deposits and into other investments, we lose a relatively low cost source of funds, increasing our funding costs and reducing our net interest income.

        Increased competition from financial service companies and other companies that offer banking and wealth management services could negatively impact our business.    Increased competition in our market may result in reduced loans, deposits and/or assets under management. Many competitors offer the banking services and wealth management services that we offer in our service area. These competitors, both domestic and foreign, include national, regional, and community banks. We also face intense competition from many other types of financial institutions, including, without limitation, savings and loans, finance companies, brokerage firms, insurance companies, credit unions, private equity funds, mortgage banks, and other financial intermediaries. Banks, trust companies, investment advisors, mutual fund companies, multi-family offices and insurance companies compete with us for trust and asset management business. In addition, technological advances and the growth of e-commerce have made it possible for non-depository institutions to offer products and services that were traditionally offered only by banks.

        We also face intense competition for talent. Our success depends, in large part, on our ability to hire and retain key people. Competition for the best people in most businesses in which we engage can be intense. If we are unable to attract and retain talented people, our business could suffer. Pursuant to the terms of the TARP CPP described above, among other things, we agreed to institute certain restrictions on the compensation of certain senior executive management positions, which could have an adverse effect on our ability to hire or retain the most qualified senior management. As described above, the terms of the Purchase Agreement allowed the Treasury to impose additional requirements on us. The adoption of ARRA on February 17, 2009 imposed certain new executive compensation and corporation expenditure limits on all current and future TARP recipients, including the Company, until the institution has repaid the Treasury, which is now permitted under ARRA without penalty and without the need to raise new capital, subject to the Treasury's consultation with the recipient's appropriate regulatory agency. The executive compensation standards are more stringent than those currently in effect under the CPP or those previously proposed by the Treasury, but it is yet unclear how these executive compensation standards will relate to the similar standards announced by the Treasury in its guidelines on February 4, 2009, or whether the standards will be considered effective immediately or only after implementing regulations are issued by the Treasury. The resulting uncertainty and/or further restrictions could adversely affect our ability to hire or retain our talent.

        Our controls and procedures could fail or be circumvented.    Management regularly reviews and updates our internal controls, disclosure controls and procedures and corporate governance policies and

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procedures. Any system of controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, but not absolute, assurances of the effectiveness of these systems and controls, and that the objectives of these controls have been met. Any failure or circumvention of our controls and procedures, and any failure to comply with regulations related to controls and procedures could adversely affect our business, results of operations and financial condition.

        Changes in accounting standards or tax legislation.    Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. From time to time the Financial Accounting Standards Board ("FASB") and SEC change the financial accounting and reporting standards that govern the preparation of our financial statements or elected representatives approve changes to tax laws. These changes can be hard to predict and can materially impact how we record and report our financial condition and results of operations.

        Acquisition risks.    We have in the past and may in the future seek to grow our business by acquiring other businesses. We cannot predict the frequency, size or timing of our acquisitions, and we typically do not comment publicly on a possible acquisition until we have signed a definitive agreement. There can be no assurance that our acquisitions will have the anticipated positive results, including results related to: the total cost of integration; the time required to complete the integration; the amount of longer-term cost savings; continued growth; or the overall performance of the acquired company or combined entity. Integration of an acquired business can be complex and costly. If we are not able to integrate successfully past or future acquisitions, there is a risk that results of operations could be adversely affected.

        Impairment of goodwill or amortizable intangible assets associated with acquisitions would result in a charge to earnings.    Goodwill is evaluated for impairment at least annually, and amortizable intangible assets are evaluated for impairment annually or when events or circumstances indicate that the carrying value of those assets may not be recoverable. We may be required to record a charge to earnings during the period in which any impairment of goodwill or intangibles is determined.

        Operational risks.    The potential for operational risk exposure exists throughout our organization. Integral to our performance is the continued efficacy of our technology and information systems, operational infrastructure, and relationships with third parties and our colleagues in our day-to-day and ongoing operations. Failure by any or all of these resources subjects us to risks that may vary in size, scale and scope. This includes but is not limited to operational or systems failures, disruption of client operations and activities, ineffectiveness or exposure due to interruption in third party support as expected, as well as, the loss of key colleagues or failure on the part of key colleagues to perform properly.

        Negative public opinion could damage our reputation and adversely affect our earnings.    Reputational risk, or the risk to our earnings and capital from negative public opinion, is inherent in our business. Negative public opinion can result from the actual or perceived manner in which we conduct our business activities, including activities in our private and business banking operations and investment and trust operations; our management of actual or potential conflicts of interest and ethical issues; and our protection of confidential client information. Negative public opinion can adversely affect our ability to keep and attract clients and can expose us to litigation and regulatory action. We take steps to minimize reputation risk in the way we conduct our business activities and deal with our clients, communities and vendors.

        The soundness of other financial institutions could adversely affect us.    Financial services institutions are interrelated as a result of trading, clearing, counterparty or other relationships. We have exposure to many different industries and counterparties, and we routinely execute transactions with counterparties in the financial industry, including brokers and dealers, commercial banks, investment

19

banks, mutual and hedge funds, and other institutional clients. Many of these transactions expose us to credit risk in the event of default of our counterparty or client. In addition, our credit risk may be exacerbated when the collateral held by us cannot be realized upon or is liquidated at prices not sufficient to recover the full amount of the financial instrument exposure due us. Any such losses could have a material adverse effect on our financial condition and results of operations.

Item 1B—Unresolved Staff Comments

        The Company has no written comments regarding its periodic or current reports from the staff of the Securities and Exchange Commission that were issued 180 days or more preceding the end of its 2008 fiscal year and that remain unresolved.

Item 2.    Properties

        The Bank leases approximately 391,000 rentable square feet of commercial office space in downtown Los Angeles in the office tower located at 555 S. Flower Street ("City National Tower" including the branch adjacent to City National Tower at 525 S. Flower Street, "City National Plaza"). City National Tower serves as the Bank's administrative center, bringing together more than 24 departments. In addition, City National Plaza houses the Company's Downtown Los Angeles Regional Center, offering extensive private and business banking and wealth management capabilities.

        The principal offices of the Company are located at City National Center, 400 North Roxbury Drive, Beverly Hills, California 90210, which the Company owns and occupies. The property has a market value in excess of its depreciated value included in the Company's financial statements. As of December 31, 2008, the Bank owned four other banking office properties in Riverside and Sun Valley, California and in Cheyenne and Carson Valley, Nevada. In addition to the properties owned, the Company actively maintains operations in 62 banking offices and certain other properties.

        The remaining banking offices and other properties are leased by the Bank. Total annual rental payments (exclusive of operating charges and real property taxes) are approximately $26 million, with lease expiration dates for office facilities ranging from 2009 to 2022, exclusive of renewal options.

        The wealth management affiliates lease a total of 15 offices. Total annual rental payments (exclusive of operating charges and real property taxes) for all affiliates are approximately $3.5 million.

Item 3.    Legal Proceedings

        The Corporation and its subsidiaries are defendants in various pending lawsuits. Based on present knowledge, management, including in-house counsel, does not believe that the outcome of such lawsuits will have a material adverse effect upon the Company.

        The Corporation is not aware of any material proceedings to which any director, officer, or affiliate of the Corporation, any owner of record or beneficially of more than 5 percent of the voting securities of the Corporation as of December 31, 2008, or any associate of any such director, officer, affiliate of the Corporation, or security holder is a party adverse to the Corporation or any of its subsidiaries or has a material interest adverse to the Corporation or any of its subsidiaries.

Item 4.    Submission of Matters to a Vote of Security Holders

        There was no submission of matters to a vote of security holders during the fourth quarter of the year ended December 31, 2008.

20

PART II

Item 5.    Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

        The Corporation's common stock is listed and traded principally on the New York Stock Exchange under the symbol "CYN." Information concerning the range of high and low sales prices for the Corporation's common stock, and the dividends declared, for each quarterly period within the past two fiscal years is set forth below.

Quarter Ended	High		Low		Dividends Declared
2008
March 31	$	60.00	$	48.57	$	0.48
June 30		51.75		40.98		0.48
September 30		65.35		37.60		0.48
December 31		57.56		34.97		0.48
2007
March 31	$	75.39	$	68.00	$	0.46
June 30		78.39		72.30		0.46
September 30		78.00		69.00		0.46
December 31		72.97		59.10		0.46

        As of January 30, 2009, the closing price of the Corporation's stock on the New York Stock Exchange was $34.61 per share. As of that date, there were approximately 2,087 holders of record of the Corporation's common stock. On January 21, 2009, the Board of Directors authorized a regular quarterly cash dividend on its common stock at a rate of $0.25 per share payable on February 18, 2009 to all shareholders of record on February 4, 2009.

        For a discussion of dividend restrictions on the Corporation's common stock, see Note 20 of the Notes to Consolidated Financial Statements on page A-54 of this report.

        On January 24, 2008, the Board of Directors authorized the Corporation to repurchase 1 million additional shares of the Corporation's stock following the completion of its previously approved initiative. Unless terminated earlier by resolution of the Board of Director, the program will expire when the Corporation has repurchased all shares authorized for repurchase thereunder. There were no issuer repurchases of the Corporation's common stock in the fourth quarter of the year ended December 31, 2008. There are 1,140,400 shares remaining to be purchased as of December 31, 2008. The Corporation received no shares in payment for the exercise price of stock options.

Item 6.    Selected Financial Data

        The information required by this item appears on page 33, under the caption "Selected Financial Information," and is incorporated herein by reference.

Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations

        The information required by this item appears on pages 34 through 80, under the caption "Management's Discussion and Analysis," and is incorporated herein by reference.

Item 7A.    Quantitative and Qualitative Disclosures about Market Risk

        The information required by this item appears on pages 56 through 61, under the caption "Management's Discussion and Analysis," and is incorporated herein by reference.

21

Item 8.    Financial Statements and Supplementary Data

        The information required by this item appears on page 82 under the captions "2008 Quarterly Operating Results" and "2007 Quarterly Operating Results," and on page A-4 through A-64 and is incorporated herein by reference.

Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

        None.

Item 9A.    Controls and Procedures

Disclosure Controls and Procedures

        Under the supervision and with the participation of the Company's management, including its Chief Executive Officer and Chief Financial Officer, the Company has evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rules 13a-15(e) under the Securities and Exchange Act of 1934 (the "Exchange Act")). Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, the Company's disclosure controls and procedures were effective.

Internal Control over Financial Reporting

Management's Report on Internal Control over Financial Reporting.

        Management's Report on Internal Control Over Financial Reporting appears on page A-1 of this report. The Company's independent registered public accounting firm, KPMG LLP, has issued an audit report on the effectiveness of the Company's internal control over financial reporting. That report appears on page A-2.

Changes in Internal Controls

        There was no change in the Company's internal control over financial reporting that occurred during the Company's fourth fiscal quarter that has materially affected, or was reasonably likely to materially affect, the Company's internal control over financial reporting.

Item 9B.    Other Information.

        None.

22

PART III

Item 10.    Directors and Executive Officers of the Registrant

        Information regarding executive officers is included in Part I of this Form 10-K as permitted by General Instruction G (3).

        The additional information required by this item will appear in the Corporation's definitive proxy statement for the 2009 Annual Meeting of Stockholders (the "2009 Proxy Statement"), and such information either shall be (i) deemed to be incorporated herein by reference from that portion of the 2009 Proxy Statement, if filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the Corporation's most recently completed fiscal year, or (ii) included in an amendment to this report filed with the Commission on Form 10-K/A not later than the end of such 120 day period.

Item 11.    Executive Compensation

        The information required by this item will appear in the 2009 Proxy Statement, and such information either shall be (i) deemed to be incorporated herein by reference from the 2009 Proxy Statement, if filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the Corporation's most recently completed fiscal year, or (ii) included in an amendment to this report filed with the Commission on Form 10-K/A not later than the end of such 120 day period.

Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

        The following table summarizes information, as of December 31, 2008, relating to equity compensation plans of the Company pursuant to which equity securities of the Company are authorized for issuance.

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights			Weighted-average exercise price of outstanding options, warrants and rights			Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column)
Equity compensation plans approved by security holders		4,225,474	(1)(2)	$	52.05	(2)		4,130,250	(3)
Equity compensation plans not approved by security holders		638,608		$	45.41			—
Total		4,864,082	(2)	$	51.09	(2)		4,130,250	(3)

(1)

Includes 8,382 shares assumed in the acquisition of Business Bank Corporation ("BBC") with a weighted-average exercise price of $10.12. BBC shareholders had approved these stock option plans.

(2)

Includes 437,360 shares of outstanding restricted stock and restricted stock units. The weighted-average exercise price does not take into account awards that have no exercise price such as restricted stock and restricted stock units.

(3)

For every share subject to awards of restricted stock or restricted stock units under the 2008 Omnibus Plan ("Plan"), the shares available for grant under the Plan is required to be reduced by 3.3 shares (including the one share of restricted stock issued).

23

        In March 2001, the Board of Directors adopted the 2001 Stock Option Plan (the "2001 Plan"), which is a broadly-based stock option plan under which options were only granted to employees of the Corporation and subsidiaries who are neither directors or executive officers. The 2001 Plan contains a change of control provision similar to other stockholder approved plan. The 2001 Plan was not submitted to the stockholders for their approval. No further awards can be issued under the 2001 Plan.

        Other information required by this item will appear in the 2009 Proxy Statement, and such information either shall be (i) deemed to be incorporated herein by reference from the 2009 Proxy Statement, if filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the Corporation's most recently completed fiscal year, or (ii) included in an amendment to this report filed with the Commission on Form 10-K/A not later than the end of such 120 day period.

Item 13.    Certain Relationships and Related Transactions

        The information required by this item will appear in the 2009 Proxy Statement, and such information either shall be (i) deemed to be incorporated herein by reference from the 2009 Proxy Statement, if filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the Corporation's most recently completed fiscal year, or (ii) included in an amendment to this report filed with the Commission on Form 10-K/A not later than the end of such 120 day period. Also see Note 7 to Notes to Consolidated Financial Statements on page A-31 of this report.

Item 14.    Principal Accountant Fees and Services.

        The information required by this item will appear in the 2009 Proxy Statement, and such information either shall be (i) deemed to be incorporated herein by reference from the 2009 Proxy Statement, if filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the Corporation's most recently completed fiscal year, or (ii) included in an amendment to this report filed with the Commission on Form 10-K/A not later than the end of such 120 day period.

24

PART IV

Item 15.    Exhibits and Financial Statement Schedules

(a)

The following documents are filed as part of this report:

1.	Financial Statements:
	Management's Report on Internal Control Over Financial Reporting	A-1
	Report of Independent Registered Public Accounting Firm	A-2
	Report of Independent Registered Public Accounting Firm	A-3
	Consolidated Balance Sheets at December 31, 2008 and 2007	A-4
	Consolidated Statements of Income for each of the years in the three-year period ended December 31, 2008	A-5
	Consolidated Statements of Cash Flows for each of the years in the three-year period ended December 31, 2008	A-6
	Consolidated Statements of Changes in Shareholders' Equity and Comprehensive Income for each of the years in the three-year period ended December 31, 2008	A-7
	Notes to Consolidated Financial Statements	A-8
2.	All other schedules and separate financial statements of 50 percent or less owned companies accounted for by the equity method have been omitted because they are not applicable.
3.	Exhibits

3.1	Restated Certificate of Incorporation (This Exhibit is incorporated by reference from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2004).
3.2	Form of Certificate of Designations of Series A Junior Participating Cumulative Preferred Stock (This Exhibit is incorporated by reference from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2004).
3.3	Certificate of Designations of Fixed Rate Cumulative Perpetual Preferred Stock, Series B (This Exhibit is incorporated by reference from the Registrant's Current Report on Form 8-K filed November 24, 2008).
3.4	Bylaws, as amended to date (This Exhibit is incorporated by reference from the Registrant's Current Report on Form 8-K filed December 22, 2008).
4.1	Specimen Common Stock Certificate for Registrant. (This Exhibit is incorporated by reference from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2007).
4.2	6.75 percent Subordinated Notes Due 2011 in the principal amount of $150.0 million (This Exhibit is incorporated by reference from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2006).
4.3	Indenture dated as of February 13, 2003 between Registrant and U.S. Bank National Association, as Trustee pursuant to which Registrant issued its 5.125 percent Senior Notes due 2013 in the principal amount of $225.0 million and form of 5.125 percent Senior Note due 2013 (This Exhibit is incorporated by reference from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2007).
4.4	Certificate of Amendment of Articles of Incorporation of CN Real Estate Investment Corporation Articles of Incorporation (This Exhibit is incorporated by reference from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2007).
4.5	CN Real Estate Investment Corporation Bylaws (This Exhibit is incorporated by reference from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2006).

25

4.6	CN Real Estate Investment Corporation Servicing Agreement (This Exhibit is incorporated by reference from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2006).
4.7	CN Real Estate Investment Corporation II Articles of Amendment and Restatement (This Exhibit is incorporated by reference from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2007).
4.8	CN Real Estate Investment Corporation II Amended and Restated Bylaws (This Exhibit is incorporated by reference from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2007).
4.9	Form of Warrant to Purchase Common Stock issued by Registrant to the U.S. Treasury (This Exhibit is incorporated by reference from the Registrant's Current Report on Form 8-K filed November 24, 2008).
10.1*	Employment Agreement made as of May 15, 2003, by and between Bram Goldsmith, and the Registrant and City National Bank.
10.2*	Amendment to Employment Agreement dated as of May 15, 2005 by and between Bram Goldsmith, Registrant, and City National Bank (This Exhibit is incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005).
10.3*	Second Amendment to Employment Agreement for Bram Goldsmith dated as of May 15, 2007, among Bram Goldsmith, Registrant and City National Bank (This Exhibit is incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2007).
10.4*	Third Amendment to Employment Agreement, dated as of March 3, 2008, by and between Bram Goldsmith, Registrant and City National Bank (This Exhibit is incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2008).
10.5*	Fourth Amendment to Employment Agreement, dated as of December 22, 2008, by and between Bram Goldsmith, Registrant and City National Bank.
10.6*	Amended and Restated Employment Agreement made as of December 22, 2008 by and between Russell Goldsmith, the Registrant and City National Bank (This Exhibit is incorporated by reference from the Registrant's Current Report on Form 8-K filed December 23, 2008).
10.7*	1995 Omnibus Plan (This Exhibit is incorporated by reference from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2005).
10.8*	Amendment to 1995 Omnibus Plan regarding Section 7.6(a).
10.9*	Amended and Restated Section 2.8 of 1995 Omnibus Plan. (This Exhibit is incorporated by reference from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2007).
10.10*	Amendment to City National Corporation 1995 Omnibus Plan dated December 31, 2008.
10.11*	1999 Omnibus Plan (This Exhibit is incorporated by reference from the Registrants Annual Report on Form 10-K for the year ended December 31, 2004).
10.12*	Amended and Restated 2002 Omnibus Plan (This Exhibit is incorporated by reference from the Registrant's Proxy Statement filed with the SEC for the Annual Meeting of Shareholders held on April 28, 2004).
10.13*	First Amendment to the City National Corporation Amended and Restated 2002 Omnibus Plan (This Exhibit is incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005).
10.14*	Amendment to City National Corporation Amended and Restated 2002 Omnibus Plan dated December 31, 2008.

26

10.15*	Amended and Restated 1999 Variable Bonus Plan (This Exhibit is incorporated by reference from the Registrant's Proxy Statement filed with the SEC for the Annual Meeting of Shareholders held on April 28, 2004).
10.16*	City National Corporation 2008 Omnibus Plan (This Exhibit is incorporated by reference from the Registrant's Proxy Statement filed with the SEC for the Annual Meeting of Stockholders held on April 23, 2008).
10.17*	Amendment to City National Corporation 2008 Omnibus Plan dated December 31, 2008.
10.18*	Form of Indemnification Agreement for directors and executive officers of the Company (This Exhibit is incorporated by reference from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2004).
10.19*	2000 City National Bank Executive Deferred Compensation Plan. (This Exhibit is incorporated by reference from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2005.)
10.20*	Amendment Number 3 to 2000 City National Bank Executive Deferred Compensation Plan. (This Exhibit is incorporated by reference from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2007).
10.21*	Amendment Number 4 to 2000 City National Bank Executive Deferred Compensation Plan (As in Effect Immediately Prior to January 1, 2009).
10.22*	2000 City National Bank Executive Deferred Compensation Plan (Amended and Restated for Plan Years 2004/05 and Later Effective on January 1, 2009).
10.23*	City National Corporation Strategy and Planning Committee Change in Control Severance Plan.
10.24*	City National Corporation Executive Committee Change in Control Severance Plan.
10.25*	2000 City National Bank Director Deferred Compensation Plan (This Exhibit is incorporated by reference from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2005).
10.26*	Amendment Number 2 to 2000 City National Bank Director Deferred Compensation Plan (This Exhibit is incorporated by reference from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2007).
10.27*	Amendment Number 3 to 2000 City National Bank Director Deferred Compensation Plan (As In Effect Immediately Prior to January 1, 2009).
10.28*	2000 City National Bank Director Deferred Compensation Plan (Amended and Restated for Plan Years 2005 and Later Effective on January 1, 2009).
10.29*	Executive Management Incentive Compensation Plan (This Exhibit is incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2008).
10.30*	Key Officer Incentive Compensation Plan (This Exhibit is incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2008.).
10.31*	City National Corporation 2001 Stock Option Plan (This Exhibit is incorporated by reference from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2005).
10.32*	Form of Restricted Stock Unit Award Agreement Under the City National Corporation 2002 Amended and Restated Omnibus Plan (This Exhibit is incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).
10.33*	Form of Stock Option Award Agreement Under the City National Corporation 2002 Amended and Restated Omnibus Plan (Compensation Committee and Board Approval) (This Exhibit is incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).

27

10.34*	Form of Stock Option Award Agreement Under the City National Corporation 2002 Amended and Restated Omnibus Plan (Compensation Committee Approval)) (This Exhibit is incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).
10.35*	Form of Restricted Stock Award Agreement Under the City National Corporation 2002 Amended and Restated Omnibus Plan) (This Exhibit is incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).
10.36*	Form of Director Stock Option Agreement Under the City National Corporation Amended and Restated 2002 Omnibus plan (This Exhibit is incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2004).
10.37*	Form of Stock Option Award Agreement Under the City National Corporation Amended and Restated 2002 Omnibus Plan (2006 and later grants) (This Exhibit is incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2006).
10.38*	Form of Restricted Stock Award Agreement Under the City National Corporation Amended and Restated 2002 Omnibus Plan and Restricted Stock Unit Award Agreement Addendum (2006 and later grants) (This Exhibit is incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2006).
10.39*	Form of Restricted Stock Unit Award Agreement Under the City National Corporation Amended and Restated 2002 Omnibus Plan and Restricted Stock Unit Award Agreement Addendum (2006 and later grants). (This Exhibit is incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2006).
10.40*	Form of Restricted Stock Unit Award Agreement (Cash Only Award) Under the City National Corporation Amended and Restated 2002 Omnibus Plan and Restricted Stock Unit Award Agreement (Cash Only Award) Addendum (This Exhibit is incorporated by reference from the Registrant's Annual Report on Form 10-K for the year ended December 31, 2006).
10.41*	Form of Restricted Stock Award Agreement Under the City National Corporation 2008 Omnibus Plan (This Exhibit is incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2008).
10.42*	Form of Restricted Stock Unit Award Agreement and Restricted Stock Unit Award Agreement Addendum under the City National Corporation 2008 Omnibus Plan (This Exhibit is incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2008).
10.43*	Form of Stock Option Award Agreement Under the City National Corporation 2008 Omnibus Plan (This Exhibit is incorporated by reference from the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2008).
10.44	Lease dated September 30, 1996 between Citinational-Buckeye Building Co. and City National Bank, as amended by that certain First Lease Addendum dated as of May 1, 1998, by that certain Second Lease Addendum dated as of November 13, 1998, by that certain Third Lease Addendum dated as of November 1, 2002 and the 2003 Lease Supplement (as herein defined).
10.45	Lease dated August 1, 2000, between Citinational-Buckeye Building Co. and City National Bank, as amended by that certain First Lease Addendum dated as of November 1, 2002, and the 2003 Lease Supplement (as herein defined).
10.46	Lease Supplement, dated May 28, 2003 (the "2003 Lease Supplement"), by and between Citinational Buckeye Building Co and City National Bank).

28

10.47	Lease dated November 19, 2003 between TPG Plaza Investments and City National Bank (Portions of this exhibit have been omitted pursuant to a request for confidential treatment).
10.48	Letter Agreement dated November 21, 2008 by and between the Registrant and the U.S. Treasury (This Exhibit is incorporated by reference from the Registrant's Current Report on Form 8-K filed on November 24, 2008).
12	Statement Re: Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividend Requirements
21	Subsidiaries of the Registrant
23	Consent of KPMG LLP
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14 (a) or 15d-14 (a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14 (a) or 15d-14 (a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.0	Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*

Management contract or compensatory plan or arrangement

29

SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CITY NATIONAL CORPORATION (Registrant)
February 25, 2009	By:	/s/ RUSSELL GOLDSMITH Russell Goldsmith President and Chief Executive Officer

        Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ RUSSELL GOLDSMITH Russell Goldsmith (Principal Executive Officer)	President/Chief Executive Officer/Director	February 25, 2009
/s/ CHRISTOPHER J. CAREY Christopher J. Carey (Principal Financial Officer)	Executive Vice President and Chief Financial Officer	February 25, 2009
/s/ OLGA TSOKOVA Olga Tsokova (Principal Accounting Officer)	Senior Vice President and Chief Accounting Officer	February 25, 2009
/s/ BRAM GOLDSMITH Bram Goldsmith	Chairman of the Board/Director	February 25, 2009
/s/ CHRISTOPHER J. WARMUTH Christopher J. Warmuth	Executive Vice President/Director	February 25, 2009
/s/ RICHARD L. BLOCH Richard L. Bloch	Director	February 25, 2009

30

Signature	Title	Date
/s/ KENNETH L. COLEMAN Kenneth L. Coleman	Director	February 25, 2009
/s/ ASHOK ISRANI Ashok Israni	Director	February 25, 2009
/s/ LINDA M. GRIEGO Linda M. Griego	Director	February 25, 2009
/s/ MICHAEL L. MEYER Michael L. Meyer	Director	February 25, 2009
/s/ RONALD L. OLSON Ronald L. Olson	Director	February 25, 2009
/s/ BRUCE ROSENBLUM Bruce Rosenblum	Director	February 25, 2009
/s/ PETER M. THOMAS Peter M. Thomas	Director	February 25, 2009
/s/ KENNETH ZIFFREN Kenneth Ziffren	Director	February 25, 2009

31

FINANCIAL HIGHLIGHTS

(in thousands, except per share amounts)		2008			2007			Percent change
FOR THE YEAR
	Net income	$	104,956		$	222,713			(53	)%
	Net income available to common shareholders		102,511			222,713			(54	)
	Net income per common share, basic		2.14			4.62			(54	)
	Net income per common share, diluted		2.11			4.52			(53	)
	Dividends per common share		1.92			1.84			4
AT YEAR END
	Assets	$	16,455,515		$	15,889,290			4
	Securities		2,440,468			2,756,010			(11	)
	Loans and leases		12,444,259			11,630,638			7
	Deposits		12,652,124			11,822,505			7
	Common shareholders' equity		1,653,925			1,655,607			(0	)
	Total shareholders' equity		2,044,014			1,655,607			23
	Book value per common share		34.33			34.61			(1	)
AVERAGE BALANCES
	Assets	$	16,028,821		$	15,370,764			4
	Securities		2,398,285			2,833,489			(15	)
	Loans and leases		12,088,715			11,057,411			9
	Deposits		11,899,642			12,236,383			(3	)
	Common shareholders' equity		1,683,081			1,599,488			5
	Total shareholders' equity		1,726,989			1,599,488			8
SELECTED RATIOS
	Return on average assets		0.65	%		1.45	%		(55	)
	Return on average common shareholders' equity		6.09			13.92			(56	)
	Corporation's tier 1 leverage		10.44			7.97			31
	Corporation's tier 1 risk-based capital		11.71			9.31			26
	Corporation's total risk-based capital		13.40			11.27			19
	Period-end tangible common shareholders' equity to period-end tangible assets		7.23			7.39			(2	)
	Period-end common shareholders' equity to period-end assets		10.05			10.42			(4	)
	Period-end shareholders' equity to period-end assets		12.42			10.42			19
	Dividend payout ratio, per common share		88.50			40.13			121
	Net interest margin		4.20			4.45			(6	)
	Expense to revenue ratio (1)		66.77			58.21			15
ASSET QUALITY RATIOS
	Nonaccrual loans to total loans and leases		1.70	%		0.65	%		162
	Nonaccrual loans and OREO to total loans and leases and OREO		1.79			0.65			175
	Allowance for loan and lease losses to total loans and leases		1.80			1.45			24
	Allowance for loan and lease losses to nonaccrual loans		106.11			223.03			(52	)
	Net charge-offs to average loans		(0.57	)		(0.08	)		613
AT YEAR END
	Assets under management (2)	$	30,781,865		$	37,268,529			(17	)
	Assets under management or administration (2)		47,519,777			58,506,256			(19	)

(1)

The expense to revenue ratio is defined as noninterest expense excluding other real estate owned ("OREO") expense divided by total revenue (net interest income on a taxable-equivalent basis and noninterest income).

(2)

Excludes $4.67 billion and $12.44 billion of assets under management for an asset manager in which the Company held a minority ownership interest as of December 31, 2008 and December 31, 2007, respectively.

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SELECTED FINANCIAL INFORMATION

				As of or for the year ended December 31,
(in thousands, except per share data)				2008			2007			2006			2005			2004
Statement of Income Data:
	Interest income			$	784,688		$	894,101		$	826,315		$	716,166		$	602,180
	Interest expense				184,792			285,829			220,405			106,125			58,437
	Net interest income				599,896			608,272			605,910			610,041			543,743
	Provision for credit losses				127,000			20,000			(610	)		—			—
	Noninterest income				266,984			303,202			242,370			210,368			186,410
	Noninterest expense				582,141			529,245			476,046			438,178			395,410
	Minority interest				5,378			8,856			5,958			5,675			4,992
	Income before taxes				152,361			353,373			366,886			376,556			329,751
	Income taxes				47,405			130,660			133,363			141,821			123,429
		Net income		$	104,956		$	222,713		$	233,523		$	234,735		$	206,322
			Less: Dividends on preferred stock		2,445			—			—			—			—
		Net income available to common shareholders		$	102,511		$	222,713		$	233,523		$	234,735		$	206,322
Per Common Share Data:
	Net income per share, basic				2.14			4.62			4.82			4.77			4.21
	Net income per share, diluted				2.11			4.52			4.66			4.60			4.04
	Dividends per share				1.92			1.84			1.64			1.44			1.28
	Book value per share				34.33			34.61			31.39			29.55			27.39
	Shares used to compute net income per share, basic				47,930			48,234			48,477			49,159			48,950
	Shares used to compute net income per share, diluted				48,570			49,290			50,063			51,062			51,074
Balance Sheet Data—At Period End:
	Assets			$	16,455,515		$	15,889,290		$	14,884,309		$	14,581,809		$	14,231,500
	Securities				2,440,468			2,756,010			3,101,154			4,010,757			4,142,430
	Loans and leases				12,444,259			11,630,638			10,386,005			9,265,602			8,481,277
	Interest-earning assets				15,104,199			14,544,176			13,722,062			13,520,922			13,333,792
	Deposits				12,652,124			11,822,505			12,172,816			12,138,472			11,986,915
	Common shareholders' equity				1,653,925			1,655,607			1,490,843			1,457,957			1,348,522
	Total shareholders' equity				2,044,014			1,655,607			1,490,843			1,457,957			1,348,522
Balance Sheet Data—Average Balances:
	Assets			$	16,028,821		$	15,370,764		$	14,715,512		$	14,161,241		$	13,395,993
	Securities				2,398,285			2,833,489			3,488,005			4,028,332			3,641,615
	Loans and leases				12,088,715			11,057,411			9,948,363			8,875,358			8,106,657
	Interest-earning assets				14,670,167			14,054,123			13,568,255			13,047,244			12,322,193
	Deposits				11,899,642			12,236,383			11,869,927			11,778,839			11,275,017
	Common shareholders' equity				1,683,081			1,599,488			1,460,792			1,389,700			1,262,560
	Total shareholders' equity				1,726,989			1,599,488			1,460,792			1,389,700			1,262,560
Asset Quality:
	Nonaccrual loans			$	211,142		$	75,561		$	20,883		$	14,400		$	34,638
	OREO				11,388			—			—			—			—
		Total nonaccrual loans and OREO		$	222,530		$	75,561		$	20,883		$	14,400		$	34,638
Performance Ratios:
	Return on average assets				0.65	%		1.45	%		1.59	%		1.66	%		1.54	%
	Return on average common shareholders' equity				6.09			13.92			15.99			16.89			16.34
	Net interest spread				3.27			2.91			3.18			3.99			4.12
	Net interest margin				4.20			4.45			4.58			4.79			4.54
	Period-end common shareholders' equity to period-end assets				10.05			10.42			10.02			10.00			9.48
	Period-end tangible common shareholders' equity to period-end tangible assets				7.23			7.39			8.24			8.21			7.56
	Period-end shareholders' equity to period-end assets				12.42			10.42			10.02			10.00			9.48
	Dividend payout ratio, per common share				88.50			40.13			34.31			30.03			30.50
	Expense to revenue ratio				66.77			58.21			55.97			53.29			53.83
Asset Quality Ratios:
	Nonaccrual loans to total loans and leases				1.70	%		0.65	%		0.20	%		0.16	%		0.41	%
	Nonaccrual loans and OREO to total loans and leases and OREO				1.79			0.65			0.20			0.16			0.41
	Allowance for loan and lease losses to total loans and leases				1.80			1.45			1.50			1.66			1.75
	Allowance for loan and lease losses to nonaccrual loans				106.11			223.03			743.88			1,069.33			428.91
	Net (charge-offs)/recoveries to average total loans and leases				(0.57	)		(0.08	)		0.03			0.10			(0.07	)

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MANAGEMENT'S DISCUSSION AND ANALYSIS

OVERVIEW

        City National Corporation, through its primary subsidiary, City National Bank (the "Bank"), provides private and business banking services, including investment and trust services to mid-size businesses, entrepreneurs, professionals and affluent individuals. The Bank is the largest independent commercial bank headquartered in Los Angeles. For over 50 years, the Bank has served clients through relationship banking. The Bank seeks to build client relationships with a high level of personal service and tailored products through private and commercial banking teams, product specialists and investment advisors to facilitate clients' use, where appropriate, of multiple services and products offered by the Company. The Company offers a broad range of lending, deposit, cash management, international banking and other products and services. The Company also lends, invests and provides services in accordance with its Community Reinvestment Act commitment. Through the Company's asset management firms, subsidiaries of the Corporation, and Wealth Management Services, a division of the Bank, the Company offers 1) investment management and advisory services and brokerage services, including portfolio management, securities trading and asset management; 2) personal and business trust and investment services, including employee benefit trust services; 401(k) and defined benefit plan administration, and; 3) estate and financial planning and custodial services. The Bank also advises and markets mutual funds under the name of CNI Charter Funds.

        City National Corporation ("the Corporation") is the holding company for the Bank. References to the "Company" mean the Corporation and its subsidiaries including the Bank. The financial information presented herein includes the accounts of the Corporation, its non-bank subsidiaries, the Bank, and the Bank's wholly owned subsidiaries. All material transactions between these entities are eliminated.

        See "Cautionary Statement for Purposes of the 'Safe Harbor' Provision of the Private Securities Litigation Reform Act of 1995," on page 81 in connection with "forward-looking" statements included in this report.

        Over the last three years, the Company's total assets and loans have grown by 13 percent and 34 percent, respectively. The growth in loans occurred primarily in commercial and residential mortgage loans, and includes the acquisition of Business Bank of Nevada in the first quarter of 2007. Deposit balances grew 4 percent for the same period.

        On February 28, 2007, the Company completed the acquisition of Business Bank Corporation ("BBC"), the parent of Business Bank of Nevada ("BBNV") and an unconsolidated subsidiary, Business Bancorp Capital Trust I, in a cash and stock transaction valued at $167 million. BBNV operated as a wholly owned subsidiary of City National Corporation until after the close of business on April 30, 2007, at which time it was merged into the Bank. BBC had assets of $496 million, loans of $395 million and deposits of $441 million on the date of acquisition.

        On May 1, 2007, the Corporation completed the acquisition of Lydian Wealth Management in an all-cash transaction. The investment advisory firm is headquartered in Rockville, Maryland and now manages or advises on client assets totaling $10.17 billion. Lydian Wealth Management changed its name to Convergent Wealth Advisors ("Convergent Wealth") and became a subsidiary of Convergent Capital Management LLC, the Chicago-based asset management holding company that the Company acquired in 2003. All of the senior executives of Convergent Wealth signed employment agreements and acquired a significant minority ownership interest in Convergent Wealth.

CAPITAL ACTIVITY

        On April 26, 2006, the Board of Directors authorized the repurchase of 1.5 million additional shares of City National Corporation stock, following the completion of the March 24, 2004 buyback

34

initiative. The buyback was completed in August 2006 at an average cost of $69.04. On July 6, 2006, the Board of Directors authorized the repurchase of 1.5 million additional shares of City National Corporation stock, following the completion of the April 26, 2006 buyback initiative. In 2006, 442,300 shares were repurchased under this program at an average cost of $66.24. On August 7, 2007, the Company's Board of Directors authorized the Company to repurchase 1 million additional shares of the Company's stock following completion of its previously approved stock buyback initiative. The Company repurchased an aggregate of 1,495,800 shares of common stock in 2007 at an average price of $69.47. On January 24, 2008, the Board of Directors authorized the repurchase of an additional 1 million shares of City National Corporation stock, following the completion of the August 7, 2007 buyback initiative. The Company repurchased an aggregate of 421,500 shares of common stock in 2008 at an average price of $48.41. The shares purchased under the buyback programs may be reissued for acquisitions, upon the exercise of stock options, and for other general corporate purposes. At January 30, 2009, 1,140,400 additional shares could be repurchased under the existing authority.

        The Corporation paid dividends of $1.92 per share of common stock in 2008 and $1.84 per share of common stock in 2007. On January 21, 2009, the Board of Directors authorized a regular quarterly cash dividend on common stock at a rate of $0.25 per share (or $1.00 per common share for the year) to shareholders of record on February 4, 2009, payable on February 18, 2009.

        On November 21, 2008, City National Corporation received aggregate proceeds of $400 million from the United States Department of the Treasury ("Treasury") under the Troubled Asset Relief Program ("TARP") Capital Purchase Program in exchange for 400,000 shares of cumulative perpetual preferred stock and a 10-year warrant to purchase up to 1,128,668 shares of the Company's common stock at an exercise price of $53.16 per share. The preferred stock and warrant were recorded in equity on a relative fair value basis at the time of issuance. The preferred stock was valued by calculating the present value of expected cash flows and the warrant was valued using an option valuation model. The allocated values of the preferred stock and warrant were approximately $389.9 million and $10.1 million, respectively. The preferred stock will be accreted to the redemption price of $400 million over five years. Cumulative dividends on the preferred stock are payable quarterly at the rate of 5 percent for the first five years and increasing to 9 percent thereafter. The effective pre-tax cost to the Company for participating in the TARP Capital Purchase Program is approximately 9.5 percent, consisting of 8.6 percent for dividends and 0.9 percent for the accretion on preferred stock, and is based on the statutory tax rate. The preferred stock may be redeemed by the Corporation after three years. Prior to the end of three years, subject to the provisions of the American Recovery and Reinvestment Act of 2009 ("ARRA") described below, the preferred stock may be redeemed by the Corporation only with proceeds from the sale of qualifying equity securities of the Corporation which results in aggregate gross proceeds to the Corporation of not less than 25% of the issue price of the preferred stock. The warrant has a 10-year term and is immediately exercisable upon its issuance, with an exercise price, subject to anti-dilution adjustments, equal to $53.16 per share of the common stock. If the Company receives aggregate proceeds of at least $400 million from sales of Tier 1 qualifying perpetual preferred stock prior to December 31, 2009, the number of shares to be delivered upon settlement of the warrant will be reduced by 50 percent.

        ARRA was signed into law on February 17, 2009. ARRA contains a wide variety of programs intended to stimulate the economy and provide for extensive infrastructure, energy, health, and education needs. In addition, ARRA imposes certain new executive compensation and corporate expenditure limits on all current and future TARP recipients, including the Corporation, until the institution has repaid the Treasury, which is now permitted under ARRA without the need to raise new capital, subject to the Treasury's consultation with the recipient's appropriate regulatory agency. When the institution has repaid the Treasury, the Treasury is to liquidate the warrant at the current market price.

35

        Dividends on preferred stock will be paid on a quarterly basis, with the first payment scheduled on February 15, 2009. The Corporation accrued dividends of $2.2 million and accreted $0.2 million of discount on preferred stock as of December 31, 2008.

CRITICAL ACCOUNTING POLICIES

        The accounting and reporting policies of the Company conform with U.S. generally accepted accounting principles. The Company's accounting policies are fundamental to understanding management's discussion and analysis of results of operations and financial condition. The Company has identified seven policies as being critical because they require management to make estimates, assumptions and judgments that affect the reported amount of assets and liabilities, contingent assets and liabilities, and revenues and expenses included in the consolidated financial statements. The judgments and assumptions used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances. Circumstances and events that differ significantly from those underlying the Company's estimates, assumptions and judgments could cause the actual amounts reported to differ significantly from these estimates.

        The Company's critical accounting policies include those that address accounting for financial assets and liabilities reported at fair value, securities, allowance for loan and lease losses and reserve for off-balance sheet credit commitments, share-based compensation plans, goodwill and other intangible assets, derivatives and hedging activities and income taxes. The Company, with the concurrence of the Audit and Risk Committee, has reviewed and approved these critical accounting policies, which are further described in Management's Discussion and Analysis and Note 1 of the Notes to Consolidated Financial Statements included in this Form 10-K. Management has applied its critical accounting policies and estimation methods consistently in all periods presented in these financial statements.

Fair Value Measurements

        The Company adopted Financial Accounting Standards Board ("FASB") Statement No. 157, Fair Value Measurements ("SFAS 157") effective January 1, 2008 on a prospective basis. SFAS 157 defines fair value for financial reporting purposes as the price that would be received to sell an asset or paid to transfer a liability in an orderly market transaction between market participants at the measurement date (reporting date). Under the statement, fair value is based on an exit price in the principal market or most advantageous market in which the reporting entity could transact.

        The Company records securities available-for-sale, trading securities and derivative contracts at fair value on a recurring basis. Certain other assets such as impaired loans and OREO are recorded at fair value on a nonrecurring basis. Nonrecurring fair value measurements typically involve assets that are evaluated for impairment and for which any impairment is recorded in the period in which the remeasurement is performed. The value of assets and liabilities reported at fair value is based on an exit price (amount received to sell an asset or paid to transfer a liability at the reporting date) in the principal market or most advantageous market in which the Company could transact. The Company measures its assets and liabilities on a standalone basis, then aggregates assets and liabilities with similar characteristics for disclosure purposes. Management employs market standard valuation techniques in determining the fair value of assets and liabilities. Inputs used in valuation techniques are

36

based on assumptions that market participants would use in pricing an asset or liability and are prioritized in the fair value hierarchy as follows:

Level 1—	Quoted market prices in an active market for identical assets and liabilities.
Level 2—	Observable inputs including quoted prices (other than Level 1) in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability such as interest rates, yield curves, volatilities and default rates, and inputs that are derived principally from or corroborated by observable market data.
Level 3—	Unobservable inputs reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available.

        If the determination of fair value measurement for a particular asset or liability is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Management's assessment of the significance of a particular input to the fair value measurement requires judgment and considers factors specific to the asset or liability measured.

        A description of the valuation techniques applied the Company's major categories of assets and liabilities measured at fair value follows.

Securities—Fair values for U.S. Treasury securities, marketable equity securities and trading securities, with the exception of agency securities held in the trading account, are based on quoted market prices. Securities with fair values based on quoted market prices are classified in Level 1 of the fair value hierarchy. Level 2 securities include the Company's portfolio of federal agency, mortgage-backed, state and municipal securities for which fair values are calculated with models using quoted prices and other inputs directly or indirectly observable for the asset or liability. Prices for 99 percent of these securities are obtained through a third-party valuation source. Management reviewed the valuation techniques and assumptions used by the provider and determined that the provider utilizes widely accepted valuation techniques based on observable market inputs appropriate for the type of security being measured. Prices for the remaining securities are obtained from dealer quotes. Securities classified in Level 3 include collateralized debt obligation instruments for which the market has become inactive. Fair values for these securities were determined using internal models based on assumptions that are not observable in the market.

Loans—The Company does not record loans at fair value with the exception of impaired loans, which are measured for impairment in accordance with FASB Statement No. 114, Accounting by Creditors for Impairment of a Loan ("SFAS 114"). Under SFAS 114, loans measured for impairment based on the fair value of collateral or observable market prices are within the scope of SFAS 157. Loans reported at fair value were measured for impairment by valuing the underlying collateral based on third-party appraisals. These loans are classified in Level 2 of the fair value hierarchy.

Derivatives—The Company uses interest rate swaps to manage its interest rate risk. The fair value of these swaps is obtained through third-party valuation sources that use conventional valuation algorithms. The pricing model is a discounted cash flow model that relies on inputs, such as interest rate futures, from highly liquid and active markets. The Company also enters into interest rate risk protection products with certain clients. These contracts are offset by paired trades with derivative dealers. The fair value of these derivatives is obtained from a third-party valuation source that uses conventional valuation algorithms.

37

        To comply with the provisions of SFAS 157, the Company incorporates credit valuation adjustments to appropriately reflect nonperformance risk for both the Company and counterparties in the fair value measurements. Although the Company has determined that the majority of the inputs used to value derivative contracts fall within Level 2 of the fair value hierarchy, the credit valuation adjustments utilize Level 3 inputs, such as estimates of credit spreads. The Company has determined that the impact of the credit valuation adjustments is not significant to the overall valuation of these derivatives. As a result, the Company has classified the derivative contract valuations in their entirety in Level 2 of the fair value hierarchy.

        The fair value of foreign exchange options and transactions are derived from market spot and/or forward foreign exchange rates and are classified in Level 1 of the fair value hierarchy.

Other Real Estate Owned ("OREO")—The fair value of OREO is based on the appraised value of the properties performed in accordance with professional appraisal standards and Bank regulatory requirements under the Financial Institutions Reform Recovery and Enforcement Act of 1989. Appraisals are conducted, reviewed and approved by the Company's appraisal department. OREO is classified in Level 2 of the fair value hierarchy.

Securities

        All securities other than trading securities are classified as available-for-sale and are valued at fair value. Unrealized gains or losses on securities available-for-sale are excluded from net income but are included as separate components of comprehensive income, net of taxes. Premiums or discounts on securities available-for-sale are amortized or accreted into income using the interest method over the expected lives of the individual securities. Realized gains or losses on sales of securities available-for-sale are recorded using the specific identification method. Trading securities are valued at fair value with any unrealized gains or losses included in income.

        For the significant majority of the Company's debt securities, fair values are obtained from a third party pricing service. The prices provided by the pricing service are based on quoted market prices, where available, or on observable market inputs appropriate for the type of security. The fair value for certain debt securities for which the market has become inactive is determined using an internal cash flow model based on current anticipated cash flows. The discount rate used in the model is based on the long-term rate for similar securities when the markets were active adjusted for increases in credit and liquidity spreads reflecting current market conditions. The fair values of equity securities and mutual funds are based upon quoted prices.

        Impairment exists when the fair value of a security is less than its cost. Cost includes adjustments made to the cost basis of a security for accretion, amortization and previous other-than-temporary impairments. The Company performs a quarterly assessment of the debt and equity securities in its investment portfolio that have an unrealized loss to determine whether the decline in the fair value of these securities below their cost is other-than-temporary. Impairment is considered other-than-temporary when it becomes probable that an investor will be unable to recover the cost of an investment. The Company's impairment assessment takes into consideration factors such as the length of time and the extent to which the market value has been less than cost; the financial condition and near-term prospects of the issuer including events specific to the issuer or industry; defaults or deferrals of scheduled interest, principal or dividend payments; external credit ratings and recent downgrades; and the Company's intent and ability to hold the security for a period of time sufficient to allow for a recovery in fair value. If a decline in fair value is judged to be other than temporary, the cost basis of the individual security is written down to fair value which then becomes the new cost basis. The amount of the write down is included in Impairment loss on securities in the consolidated statements of income. The new cost basis is not adjusted for subsequent recoveries in fair value. See

38

Note 5 of Notes to Consolidated Financial Statements for discussion of impairments on securities available-for-sale.

Allowance for loan and lease losses and reserve for off-balance sheet credit commitments

        The Company accounts for the credit risk associated with lending activities through its allowance for loan and lease losses, reserve for off-balance sheet credit commitments and provision for credit losses. The provision is the expense recognized in the consolidated statements of income to adjust the allowance and reserve to the levels deemed appropriate by management, as determined through application of the Company's allowance methodology procedures. The provision for credit losses reflects management's judgment of the adequacy of the allowance for loan and lease losses and the reserve for off-balance sheet credit commitments. It is determined through quarterly analytical reviews of the loan and commitment portfolios and consideration of such other factors as the Company's loan and lease loss experience, trends in problem loans, concentrations of credit risk, underlying collateral values, and current economic conditions, as well as the results of the Company's ongoing credit review process. As conditions change, our level of provisioning and the allowance for loan and lease losses and reserve for off-balance sheet credit commitments may change.

        Nonperforming loans greater than $500,000 are individually evaluated for impairment based upon the borrower's overall financial condition, resources, and payment record, and the prospects for support from any financially responsible guarantors. In addition, the allowance for loan and lease losses attributed to these impaired loans considers all available evidence, including as appropriate, the probability that a specific loan will default, the expected exposure of a loan at default, an estimate of loss given default, the present value of the expected future cash flows discounted using the loan's contractual effective rate, the secondary market value of the loan and the fair value of collateral.

        For commercial, non-homogenous loans that are not impaired, the bank derives loss factors via a process that begins with estimates of probable losses inherent in the portfolio based upon various statistical analyses. These include migration analysis, in which historical delinquency and credit loss experience is applied to the current aging of the portfolio, as well as analyses that reflect current trends and conditions. Each portfolio of smaller balance homogeneous loans including residential first mortgages, installment, revolving credit and most other consumer loans is collectively evaluated for loss potential. Management also establishes a qualitative reserve that considers overall portfolio indicators, including current and historical credit losses; delinquent, nonperforming and criticized loans; trends in volumes and terms of loans; and an evaluation of overall credit quality and the credit process, including lending policies and procedures, economic, geographical, product and other environmental factors. Management also considers trends in internally risk-rated exposures, criticized exposures, cash-basis loans, and historical and forecasted write-offs; as well as a review of industry, geographic, and portfolio concentrations, including current developments within those segments. In addition, management considers the current business strategy and credit process, including credit-limit setting and compliance, credit approvals, loan underwriting criteria and loan workout procedures.

        The quantitative portion of the allowance for loan and lease losses is supplemented by qualitative factors to account for model imprecision and to incorporate the range of probable outcomes inherent in the estimates used for the allowance. The qualitative portion of the allowance attempts to incorporate the risks inherent in the portfolio, economic uncertainties, competition, regulatory requirements and other subjective factors including industry trends, changes in underwriting standards, decline in the value of collateral for collateral dependent loans and existence of concentrations. The reserve for off-balance sheet credit commitments is established by converting the off-balance sheet exposures to a loan equivalent amount and then applying the methodology used for loans described above.

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Goodwill and other intangible assets

        The Company accounts for acquisitions using the purchase method of accounting. Under the purchase method, assets acquired and liabilities assumed are recorded at their estimated fair values at the date of acquisition. Management utilizes various valuation techniques including discounted cash flow analyses to determine these fair values. Any excess of the purchase price over amounts allocated to acquired assets, including identifiable intangible assets, and liabilities assumed is recorded as goodwill.

        Goodwill and intangible assets are evaluated at least annually for impairment or more frequently if events or circumstances, such as changes in economic or market conditions, indicate that impairment may exist or that the carrying amount of an intangible asset may not be recoverable. Goodwill is tested for impairment at the reporting unit level. A reporting unit is an operating segment or one level below an operating segment for which discrete financial information is available and regularly reviewed by management. If the fair value of the reporting unit including goodwill is determined to be less than the carrying amount of the reporting unit, a further test is required to measure the amount of impairment. If an impairment loss exists, the carrying amount of the goodwill is adjusted to a new cost basis. For purposes of the goodwill impairment test, fair value techniques based on multiples of earnings or book value are used to determine the fair value of the Company's reporting units. The multiples used in these calculations are consistent with current industry practice for valuing similar types of companies.

        Intangible assets include core deposit intangibles and client advisory contract intangibles (combined, customer-relationship intangibles) originating from acquisitions of financial services firms. These assets are amortized over their estimated useful lives. Impairment testing of these assets is performed at the individual asset level. Impairment exists when the carrying amount of an intangible asset is not recoverable and exceeds its fair value. The carrying amount of an intangible asset is not recoverable when the carrying amount of the asset exceeds the sum of undiscounted cash flows (cash inflows less cash outflows) associated with the use and/or disposition of the asset. An impairment loss is measured as the amount by which the carrying amount of the asset exceeds its fair value. The fair value of core deposit intangibles is determined using market-based core deposit premiums from recent deposit sale transactions. The fair value of client advisory contracts is based on discounted expected future cash flows. Management makes certain estimates and assumptions in determining the expected future cash flows from customer-relationship intangibles including account attrition, expected lives, discount rates, interest rates, servicing costs and other factors. Significant changes in these estimates and assumptions could adversely impact the valuation of these intangible assets. If an impairment loss exists, the carrying amount of the intangible asset is adjusted to a new cost basis. The new cost basis is amortized over the remaining useful life of the asset. See Note 10 of Notes to Consolidated Financial Statements for further discussion.

Derivatives and hedging

        As part of its asset and liability management strategies, the Company uses interest-rate swaps to reduce cash flow variability and to moderate changes in the fair value of financial instruments. In accordance with FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended ("SFAS 133"), the Company recognizes derivatives as assets or liabilities on the consolidated balance sheets at their fair value. The treatment of changes in the fair value of derivatives depends on the character of the transaction.

        In accordance with SFAS 133, the Company documents its hedge relationships, including identification of the hedging instruments and the hedged items, as well as its risk management objectives and strategies for undertaking the hedge transaction at the time the derivative contract is executed. This includes designating each derivative contract as either (i) a "fair value hedge" which is a hedge of a recognized asset or liability, (ii) a "cash flow hedge" which hedges a forecasted transaction

40

or the variability of the cash flows to be received or paid related to a recognized asset or liability or (iii) an "undesignated hedge", a derivative contract not designated as a hedging instrument whose change in fair value is recognized directly in the consolidated statements of income. All derivatives designated as fair value or cash flow hedges are linked to specific hedged items or to groups of specific assets and liabilities on the consolidated balance sheets.

        Both at inception and at least quarterly thereafter, the Company assesses whether the derivatives used in hedging transactions are highly effective (as defined in SFAS 133) in offsetting changes in either the fair value or cash flows of the hedged item. Retroactive effectiveness is assessed, as well as the continued expectation that the hedge will remain effective prospectively.

        For cash flow hedges, in which derivatives hedge the variability of cash flows (interest payments) on loans that are indexed to U.S. dollar LIBOR or the Bank's prime interest rate, the effectiveness is assessed prospectively at the inception of the hedge, and prospectively and retrospectively at least quarterly thereafter. Ineffectiveness of the cash flow hedges is measured using the hypothetical derivative method described in Derivatives Implementation Group Issue G7, "Measuring the Ineffectiveness of a Cash Flow Hedge of Interest Rate Risk under Paragraph 30(b) When the Shortcut Method is not Applied." For cash flow hedges, the effective portion of the changes in the derivatives' fair value is not included in current earnings but is reported as Accumulated other comprehensive income (loss). When the cash flows associated with the hedged item are realized, the gain or loss included in Accumulated other comprehensive income (loss) is recognized on the same line in the consolidated statements of income as the hedged item, i.e., included in Interest income on loans and leases. Any ineffective portion of the changes of fair value of cash flow hedges is recognized immediately in Other noninterest income in the consolidated statements of income.

        For fair value hedges, the Company uses interest-rate swaps to hedge the fair value of certain certificates of deposits, subordinated debt and other long-term debt. The certificates of deposit are single maturity, fixed-rate, non-callable, negotiable certificates of deposit that pay interest only at maturity and contain no compounding features. The certificates cannot be redeemed early except in the case of the holder's death or under penalty. The interest-rate swaps are executed at the time the deposit transactions are negotiated. Interest-rate swaps are structured so that all key terms of the swaps match those of the underlying deposit or debt transactions, therefore ensuring there is no hedge ineffectiveness at inception. The Company ensures that the interest-rate swaps meet the requirements for utilizing the short cut method in accordance with paragraph 68 of SFAS 133 and maintains appropriate documentation for each interest-rate swap. On a quarterly basis, fair value hedges are analyzed to ensure that the key terms of the hedged items and hedging instruments remain unchanged, and the hedging counterparties are evaluated to ensure that there are no adverse developments regarding counterparty default, thus ensuring continuous effectiveness. For fair value hedges, the effective portion of the changes in the fair value of derivatives is reflected in current earnings, on the same line in the consolidated statements of income as the related hedged item. For both fair value and cash flow hedges, the periodic accrual of interest receivable or payable on interest rate swaps is recorded as an adjustment to net interest income for the hedged items.

        The Company discontinues hedge accounting prospectively when (i) a derivative is no longer highly effective in offsetting changes in the fair value or cash flows of a hedged item, (ii) a derivative expires or is sold, terminated or exercised, (iii) a derivative is un-designated as a hedge, because it is unlikely that a forecasted transaction will occur or (iv) the Company determines that designation of a derivative as a hedge is no longer appropriate. If a fair value hedge derivative instrument is terminated or the hedge designation removed, the previous adjustments to the carrying amount of the hedged asset or liability would be subsequently accounted for in the same manner as other components of the carrying amount of that asset or liability. For interest-earning assets and interest-bearing liabilities, such adjustments would be amortized into earnings over the remaining life of the respective asset or liability. If a cash flow derivative instrument is terminated or the hedge designation is removed, related amounts

41

reported in other comprehensive income are reclassified into earnings in the same period or periods during which the hedged forecasted transaction affects earnings.

        The Company also offers various derivatives products to clients and enters into derivatives transactions in due course. These transactions are not linked to specific Company assets or liabilities in the consolidated balance sheets or to forecasted transactions in an accounting hedge relationship and, therefore, do not qualify for hedge accounting. They are carried at fair value with changes in fair value recorded as part of Other noninterest income in the consolidated statements of income.

        Fair values are determined from verifiable third-party sources that have considerable experience with the derivative markets. The credit component of the fair value of the client derivative contracts is calculated using an internal model.

Share-based compensation

        The Company accounts for stock options and restricted stock in accordance with FASB Statement No. 123 (revised), Share Based Payment, ("SFAS 123R"). SFAS 123R requires the Company to measure the cost of employee services received in exchange for an award of equity instruments, such as stock options or restricted stock, based on the fair value of the award on the grant date. This cost must be recognized in the consolidated statements of income over the vesting period of the award.

        The Company grants stock options, restricted stock and restricted stock units to employees in order to leverage the success of the Company by providing a means of aligning employees' interests with the interests of shareholders in increasing shareholder value, and by attracting, motivating, retaining, and rewarding key employees. The share-based compensation plans are authorized and administered by the Compensation, Nominating & Governance Committee of the Board of Directors. Awards may be granted to eligible employees and non-employee directors. Stock option awards are granted with an exercise price equal to the market price of the Company's stock on the grant date. The options vest in four years, beginning on the first anniversary of the grant date, and have 10-year contractual terms. Certain options and stock awards provide for accelerated vesting if there is a change of control (as defined in the City National Corporation 2008 Omnibus Plan) or a termination of service, which may include disability or death. Unvested options are forfeited upon termination of employment, except for those instances noted above, and in the case of the retirement of a retirement-age employee for options granted prior to January 31, 2006. All unexercised options expire 10 years from the grant date.

        Since 2003, share-based compensation performance awards granted to colleagues of the Company have included grants of restricted stock or restricted stock units and fewer stock options. This reduced the total number of shares awarded but better aligned the interests of shareholders and colleagues. Restricted stock awards vest over a five-year period during which time the holder receives dividends and has full voting rights. Twenty-five percent of the restricted stock awards vest two years from the date of grant, then twenty-five percent vests on each of the next three consecutive grant anniversary dates. Restricted stock is valued at the closing price of the Company's stock on the date of award. The portion of the market value of the restricted stock related to the current service period is recognized as compensation expense.

        The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model that uses certain assumptions. The Company evaluates exercise behavior and values options separately for executive and non-executive employees. Expected volatilities are based on the historical volatility of the Company's stock. The Company uses historical data to predict option exercise and employee termination behavior. The expected term of options granted is derived from the actual historical exercise activity over the past 20 years and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield is equal to the

42

dividend yield of the Company's stock at the time of the grant. As a practice, the exercise price of the Company's stock option grants equals the closing market price of the common stock on the date of the grant.

        The actual value, if any, which a grantee may realize will depend upon the difference between the option exercise price and the market price of the Company's common stock on the date of exercise.

Income Taxes

        The calculation of the Company's income tax provision and related tax accruals requires the use of estimates and judgments. The provision for income taxes is based on amounts reported in the consolidated statements of income which are adjusted to reflect the permanent and temporary differences in the tax and financial accounting for certain assets and liabilities.

        Deferred income taxes represent the tax effect of the differences in tax and financial reporting basis arising from temporary differences in accounting treatment. On a quarterly basis, management evaluates its deferred tax assets to determine if these tax benefits are expected to be realized in future periods. This determination is based on facts and circumstances, including the Company's current and future tax outlook. To the extent a deferred tax asset is no longer considered "more likely than not" to be realized, a valuation allowance is established.

        Accrued income taxes represent the estimated amounts due or received from the various taxing jurisdictions where the Company has established a business presence. The balance also includes a contingent reserve for potential taxes, interest and penalties related to uncertain tax positions. On a quarterly basis, management evaluates the contingent tax accruals to determine if they are sufficient based on a probability assessment of potential outcomes. The determination is based on facts and circumstances, including the interpretation of existing law, new judicial or regulatory guidance and the status of tax audits. If a tax position which was previously recognized on the financial statements is no longer "more likely than not" to be sustained upon a challenge from the taxing authorities, the tax benefit from the tax position will be derecognized. The Company recognizes accrued interest and penalties relating to uncertain tax positions as an income tax provision expense.

RECENT DEVELOPMENTS

        Continued upheaval in the credit markets has negatively affected the nation's economy with significant impact on the commercial and for-sale housing sectors. Declines in the housing market, with falling home prices, increasing foreclosures and rising unemployment, will continue to have a negative impact on the credit performance of real estate loans. Market volatility and illiquid market conditions during 2008 resulted in the Company recognizing impairments in its securities available-for-sale portfolio. If these disruptions in the financial markets persist, the Company may take additional impairment charges. Refer to "Item 1A—Risk Factors" for further discussion of business and economic conditions.

2008 HIGHLIGHTS

•

Consolidated net income available to common shareholders for 2008 was $105.0 million, or $2.11 per diluted common share, compared with $222.7 million, or $4.52 per diluted common share, in 2007. Net income available to common shareholders reflects net income less dividends on preferred stock related to the Company's participation in the Treasury's Capital Purchase Program. The decrease in net income available to common shareholders is largely due to a $127.0 million, or $73.9 million after tax, provision for credit losses recorded during 2008 and $49.3 million, or $28.7 million after tax, of other-than-temporary impairments recognized on securities available-for-sale.

43

•

Full-year revenue, which consists of net interest income and noninterest income, decreased to $866.9 million, a decrease of 5 percent from $911.5 million for 2007.

•

Fully taxable-equivalent net interest income amounted to $616.4 million in 2008, down slightly from $625.0 million for 2007. The Company's prime lending rate averaged 5.09 percent for 2008 compared with 8.05 percent for 2007.

•

Noninterest income was $267.0 million for 2008, a decrease from $303.2 million for 2007. Excluding securities impairment charges, noninterest income totaled $316.3 million, an increase of 4 percent from 2007. Management believes that it is useful for investors to understand the impact of the impairment charges on the Company's results of operations. Noninterest income accounted for 31 percent of the Company's revenue in 2008, slightly down from 33 percent in 2007.

•

The Company's effective tax rate was 31.1 percent for the year, lower than the 36.9 percent rate in 2007. The decrease in effective tax rate is due to lower pre-tax income in the current year.

•

Total assets at December 31, 2008 reached $16.46 billion, up 4 percent from $15.89 billion at the end of 2007 due to strong loan growth that was partly offset by a decline in the securities portfolio.

•

Total average assets increased to $16.03 billion for 2008 from $15.37 billion for 2007, an increase of 4 percent.

•

The return on average assets was 0.65 percent for 2008 compared with 1.45 percent for 2007. The return on average common shareholders' equity was 6.09 percent for 2008 compared with 13.92 percent for the prior year.

•

Average loan balances grew by 9 percent to $12.09 billion for 2008 compared with $11.06 billion for 2007.

•

In the fourth quarter alone, the Company renewed approximately $1 billion of loans and made approximately $340 million of new loans to new and existing clients, including consumers, homeowners, entrepreneurs, and small and mid-size businesses.

•

The allowance for loan and lease losses increased to $224.0 million for 2008 from $168.5 million for 2007. The Company's allowance amounts to 1.80 percent of total loans and leases, compared with 1.45 percent at the end of 2007.

•

Nonaccrual loans totaled $211.1 million as of December 31, 2008, compared with $75.6 million at December 31, 2007. Net loan charge-offs were $68.5 million in 2008, compared with $8.5 million in 2007. The increase in nonaccruals and net charge-offs occurred primarily in the Company's for-sale housing construction portfolio and commercial loan portfolio.

•

Average securities for 2008 totaled $2.40 billion, a decrease of 15 percent from $2.83 billion for 2007. The average duration of the total available-for-sale securities portfolio at December 31, 2008 was 2.7 years, compared with 3.4 years at December 31, 2007.

•

Average deposits totaled $11.90 billion for 2008, a 3 percent decrease from average deposits of $12.24 billion in 2007. Average core deposits totaled $10.60 billion for 2008, a 2 percent increase from the prior year.

•

The Company is well capitalized. At December 31, 2008, its ratio of shareholders' equity to total assets was 12.4 percent, compared to 10.4 percent at the same time in 2007. This increase reflects the Treasury's $400 million Capital Purchase Program investment.

44

OUTLOOK

        The Company remains well-capitalized, adequately reserved and profitable. The Company has significant liquidity and is well-positioned to profitably weather current economic conditions and return to increased profitability when conditions improve. In the short-term, however, net income available to common shareholders and earnings per common share will continue to be significantly affected by a weak economy, low revenue growth, historically low interest rates, somewhat higher credit costs, declining equity values, higher FDIC premiums and the additional costs of participating in the Treasury's TARP Capital Purchase Program. Excluding the higher FDIC premiums, which all banks are bearing in 2009, noninterest expense will show virtually no growth in 2009.

        In spite of today's challenging business climate, management expects the Company to remain profitable in 2009, though earnings in 2009 are anticipated to be lower than they were in 2008.

RESULTS OF OPERATIONS

Summary

        A summary of the Company's results of operations on a fully taxable-equivalent basis for each of the last five years ended December 31 follows:

						Increase (Decrease)								Increase (Decrease)						Year Ended December 31,
				Year Ended 2008								Year Ended 2007
(in thousands, except per share amounts)						Amount			%					Amount			%			2006			2005		2004
Interest income (1)				$	801,176	$	(109,678	)		(12	)	$	910,854	$	69,099			8		$	841,755		$	730,937	$	618,060
Interest expense					184,792		(101,037	)		(35	)		285,829		65,424			30			220,405			106,125		58,437
Net interest income					616,384		(8,641	)		(1	)		625,025		3,675			1			621,350			624,812		559,623
Provision for credit losses					127,000		107,000			535			20,000		20,610			NM			(610	)		—		—
Noninterest income					266,984		(36,218	)		(12	)		303,202		60,832			25			242,370			210,368		186,410
Noninterest expense:
	Staff expense				357,015		25,924			8			331,091		35,940			12			295,151			263,398		239,583
	Other expense				225,126		26,972			14			198,154		17,259			10			180,895			174,780		155,827
		Total			582,141		52,896			10			529,245		53,199			11			476,046			438,178		395,410
Minority interest expense					5,378		(3,478	)		(39	)		8,856		2,898			49			5,958			5,675		4,992
Income before income taxes					168,849		(201,277	)		(54	)		370,126		(12,200	)		(3	)		382,326			391,327		345,631
Income taxes					47,405		(83,255	)		(64	)		130,660		(2,703	)		(2	)		133,363			141,821		123,429
Less: adjustments (1)					16,488		(265	)		(2	)		16,753		1,313			9			15,440			14,771		15,880
		Net income		$	104,956	$	(117,757	)		(53	)	$	222,713	$	(10,810	)		(5	)	$	233,523		$	234,735	$	206,322
			Less: Dividends on preferred stock		2,445		2,445			NM			—		—			NM			—			—		—
		Net income available to common shareholders		$	102,511	$	(120,202	)		(54	)	$	222,713	$	(10,810	)		(5	)	$	233,523		$	234,735	$	206,322
		Net income per common share, diluted		$	2.11	$	(2.41	)		(53	)	$	4.52	$	(0.14	)		(3	)	$	4.66		$	4.60	$	4.04

(1)

Includes amounts to convert nontaxable income to a fully taxable-equivalent yield. To compare tax-exempt asset yields to taxable yields, amounts are adjusted to pre-tax equivalents based on the marginal corporate federal tax rate of 35 percent.

NM—Not

Meaningful 

Net Interest Income

        Net interest income is the difference between interest income (which includes yield-related loan fees) and interest expense. Net interest income on a fully taxable-equivalent basis expressed as a percentage of average total earning assets is referred to as the net interest margin, which represents the average net effective yield on earning assets.

45

        The following table shows average balances, interest income and yields for the last five years:

Net Interest Income Summary

					2008								2007
(in thousands)					Average Balance			Interest income/ expense (1)(4)		Average interest rate			Average Balance			Interest income/ expense (1)(4)		Average interest rate
Assets (2)
	Interest-earning assets
		Loans and leases
			Commercial		$	4,662,641		$	252,911		5.42	%	$	4,279,523		$	310,869		7.26	%
			Commercial real estate mortgages			2,057,459			134,511		6.54			1,878,671			136,446		7.26
			Residential mortgages			3,293,166			184,818		5.61			3,020,316			166,823		5.52
			Real estate construction			1,406,181			76,039		5.41			1,291,708			110,483		8.55
			Equity lines of credit			503,428			22,340		4.44			404,493			30,456		7.53
			Installment			165,840			9,841		5.93			182,700			13,539		7.41
				Total loans and leases (3)		12,088,715			680,460		5.63			11,057,411			768,616		6.95
		Due from banks—interest-bearing				96,872			1,896		1.96			88,787			2,604		2.93
		Federal funds sold and securities purchased under resale agreements				10,037			161		1.61			13,066			686		5.25
		Securities available-for-sale				2,292,932			112,437		4.90			2,757,304			131,218		4.76
		Trading account securities				105,353			1,925		1.83			76,185			3,959		5.20
		Other interest-earning assets				76,258			4,297		5.63			61,370			3,771		6.14
				Total interest-earning assets		14,670,167			801,176		5.46			14,054,123			910,854		6.48
		Allowance for loan and lease losses				(178,587	)							(157,012	)
		Cash and due from banks				370,468								423,526
		Other non-earning assets				1,166,773								1,050,127
				Total assets	$	16,028,821							$	15,370,764
Liabilities and Shareholders' Equity (2)
	Interest-bearing deposits
		Interest checking accounts			$	851,029		$	5,688		0.67		$	784,293		$	4,739		0.60
		Money market accounts				3,760,516			72,212		1.92			3,654,508			111,827		3.06
		Savings deposits				137,779			556		0.40			147,764			715		0.48
		Time deposits—under $100,000				220,259			6,695		3.04			240,388			9,518		3.96
		Time deposits—$100,000 and over				1,299,462			37,840		2.91			1,876,184			87,881		4.68
				Total interest-bearing deposits		6,269,045			122,991		1.96			6,703,137			214,680		3.20
		Federal funds purchased and securities sold under repurchase agreements				1,098,731			27,591		2.51			662,928			32,491		4.90
		Other borrowings				1,068,491			34,210		3.20			644,633			38,658		6.00
				Total interest-bearing liabilities		8,436,267			184,792		2.19			8,010,698			285,829		3.57
	Noninterest-bearing deposits					5,630,597								5,533,246
	Other liabilities					234,968								227,332
	Shareholders' equity					1,726,989								1,599,488
				Total liabilities and shareholders' equity	$	16,028,821							$	15,370,764
Net interest spread											3.27	%							2.91	%
Fully taxable-equivalent net interest and dividend income								$	616,384							$	625,025
Net interest margin											4.20	%							4.45	%
Less: Dividend income included in other income									4,297								3,771
Fully taxable-equivalent net interest income								$	612,087							$	621,254

(1)

Net interest income is presented on a fully taxable-equivalent basis.

(2)

Certain prior period balances have been reclassified to conform to the current period presentation.

(3)

Includes average nonaccrual loans of $128,296, $28,512, $16,725, $22,495, and $39,266 for 2008, 2007, 2006, 2005, and 2004, respectively.

(4)

Loan income includes loan fees of $17,008, $15,684, $16,249, $24,894, and $20,354 for 2008, 2007, 2006, 2005, and 2004, respectively.

46     

Net Interest Income Summary

2006								2005								2004
Average Balance			Interest income/ expense (1)(4)		Average interest rate			Average Balance			Interest income/ expense (1)(4)		Average interest rate			Average Balance			Interest income/ expense (1)(4)		Average interest rate
$	3,882,466		$	268,364		6.91	%	$	3,306,277		$	202,672		6.13	%	$	3,042,167		$	158,738		5.22	%
	1,786,024			133,429		7.47			1,836,904			132,245		7.20			1,776,193			111,992		6.31
	2,764,599			147,573		5.34			2,481,122			129,314		5.21			2,138,365			115,042		5.38
	955,456			84,462		8.84			749,911			56,930		7.59			756,022			41,734		5.52
	364,744			27,938		7.66			298,751			18,029		6.03			216,206			9,649		4.46
	195,074			14,760		7.57			202,393			14,022		6.93			177,704			10,843		6.10
	9,948,363			676,526		6.80			8,875,358			553,212		6.23			8,106,657			447,998		5.53
	54,843			1,161		2.12			46,705			452		0.97			63,042			740		1.17
	30,417			1,525		5.01			50,287			1,617		3.22			463,979			6,884		1.48
	3,438,002			157,208		4.57			3,990,687			171,985		4.31			3,609,139			159,865		4.43
	50,003			2,803		5.61			37,645			1,396		3.71			32,476			331		1.02
	46,627			2,532		5.43			46,562			2,275		4.89			46,900			2,242		4.78
	13,568,255			841,755		6.20			13,047,244			730,937		5.60			12,322,193			618,060		5.02
	(157,433	)							(150,303	)							(153,266	)
	428,742								443,828								442,570
	875,948								820,472								784,496
$	14,715,512							$	14,161,241							$	13,395,993
$	758,164		$	2,427		0.32		$	828,530		$	1,067		0.13		$	792,424		$	697		0.09
	3,303,373			76,293		2.31			3,557,633			43,880		1.23			3,711,983			27,670		0.75
	168,853			685		0.41			196,590			540		0.27			249,081			533		0.21
	183,972			6,355		3.45			183,888			3,034		1.65			190,821			2,902		1.52
	1,721,292			73,264		4.26			1,013,486			27,524		2.72			849,489			12,456		1.47
	6,135,654			159,024		2.59			5,780,127			76,045		1.32			5,793,798			44,258		0.76
	541,671			26,463		4.89			278,576			8,583		3.08			119,251			1,422		1.19
	627,409			34,918		5.57			533,755			21,497		4.03			571,807			12,757		2.23
	7,304,734			220,405		3.02			6,592,458			106,125		1.61			6,484,856			58,437		0.90
	5,734,273								5,998,712								5,481,219
	215,713								180,371								167,358
	1,460,792								1,389,700								1,262,560
$	14,715,512							$	14,161,241							$	13,395,993
						3.18	%							3.99	%							4.12	%
			$	621,350							$	624,812							$	559,623
						4.58	%							4.79	%							4.54	%
				2,532								2,275								2,242
			$	618,818							$	622,537							$	557,381

              47

        Net interest income is impacted by the volume (changes in volume multiplied by prior rate), interest rate (changes in rate multiplied by prior volume) and mix of interest-earning assets and interest-bearing liabilities. The following table shows changes in net interest income on a fully taxable-equivalent basis between 2008 and 2007, as well as between 2007 and 2006 broken down between volume and rate:

Changes In Net Interest Income

		2008 vs 2007									2007 vs 2006
		Increase (decrease) due to									Increase (decrease) due to
								Net increase (decrease)									Net increase (decrease)
(in thousands) (1)		Volume			Rate						Volume			Rate
Interest earned on:
Loans and leases		$	67,106		$	(155,262	)	$	(88,156	)	$	76,878		$	15,212		$	92,090
Securities available-for-sale			(22,562	)		3,781			(18,781	)		(32,280	)		6,290			(25,990	)
Due from banks—interest-bearing			219			(927	)		(708	)		892			551			1,443
Trading account securities			1,151			(3,185	)		(2,034	)		1,374			(218	)		1,156
Federal funds sold and securities purchased under resale agreements			(132	)		(393	)		(525	)		(909	)		70			(839	)
Other interest-earning assets			858			(332	)		526			876			363			1,239
	Total interest-earning assets		46,640			(156,318	)		(109,678	)		46,831			22,268			69,099
Interest paid on:
Interest checking deposits			400			549			949			87			2,225			2,312
Money market deposits			3,158			(42,773	)		(39,615	)		8,764			26,770			35,534
Savings deposits			(46	)		(113	)		(159	)		(87	)		117			30
Time deposits			(23,111	)		(29,753	)		(52,864	)		9,329			8,451			17,780
Other borrowings			33,862			(43,210	)		(9,348	)		7,482			2,286			9,768
	Total interest-bearing liabilities		14,263			(115,300	)		(101,037	)		25,575			39,849			65,424
		$	32,377		$	(41,018	)	$	(8,641	)	$	21,256		$	(17,581	)	$	3,675

(1)

Certain prior period balances have been reclassified to conform to the current period presentation.

Comparison of 2008 with 2007

        Taxable-equivalent net interest income totaled $612.1 million in 2008, compared with $621.3 million for 2007. A substantial reduction in interest rates from 2007 to 2008 contributed to the decline in net interest income, lowering the yield on earning assets by 102 basis points compared to a 138 basis point decrease in the cost of interest-bearing liabilities. The net effect of these rate changes was a decrease in net interest income of $41.0 million, which was partially offset by the additional net interest income related to the increase in average earning assets and decrease of average interest-bearing liabilities. The impact of changes in interest-earning assets and interest-bearing liabilities caused net interest income to increase by $32.4 million. Net interest income for 2008 also includes $12.8 million in income from the net settlement of interest-rate swaps compared with $5.4 million of expense in 2007. Interest income recovered on charged-off loans included above was $1.2 million in 2008, compared with $1.7 million for 2007. The fully taxable-equivalent net interest margin in 2008 was 4.20 percent, compared with 4.45 percent for 2007.

        Average loans and leases for 2008 increased to $12.09 billion, a 9 percent increase from average loans and leases of $11.06 billion for 2007. Loan growth was led by a 9 percent increase in commercial real estate and construction loans to $3.46 billion, and a 9 percent increase in commercial loans to $4.66 billion compared with 2007. In addition, average single-family residential loans increased 9 percent from the prior year.

        Average total securities in 2008 were $2.40 billion, a decrease of $435.2 million, or 15 percent, from 2007.

48

        Average core deposits, which continued to provide substantial benefits to the Bank's cost of funds, increased 2 percent to $10.60 billion from $10.36 billion for 2007. Average core deposits, which do not include certificates of deposit of $100,000 or more, represented 89.1 percent of the total average deposit base for the year. Included in core deposits are specialty deposits. Average specialty deposits, primarily from title and escrow companies, were $0.94 billion in 2008, compared with $1.19 billion in 2007, a decrease of 21 percent. Specialty deposit balances declined due to a decline in residential and commercial real estate activity.

        Average interest-bearing core deposits increased to $4.97 billion in 2008 from $4.83 billion in 2007, an increase of $142.6 million, or 3 percent. Average noninterest-bearing deposits increased to $5.63 billion in 2008 from $5.53 billion in 2007, an increase of $97.4 million, or 2 percent. Average time deposits in denominations of $100,000 or more decreased by $576.7 million, or 31 percent, to $1.30 billion, between 2007 and 2008.

Comparison of 2007 with 2006

        Net interest income was negatively impacted by changes in interest rates during 2007. The carryover effect of interest rate increases in 2006 caused the cost of interest-bearing liabilities to increase by 55 basis points in 2007 compared to a 28 basis point rise in the yield on earning assets. The net effect of these rate changes was a decrease in net interest income of $17.2 million, which was more than offset by the additional interest income related to the increase in average earning assets. The impact of changes in interest-bearing assets and liabilities caused net interest income to increase by $20.9 million. This benefit was partially offset by reduced average noninterest-bearing deposit balances which declined by $201.0 million. Interest rate increases also had a positive effect on service charges and fees on deposits which increased slightly due to lower earnings credits on deposit balances. Together, these changes caused the net interest margin to decline by 13 basis points, despite the $3.7 million increase in net interest income.

        Taxable-equivalent net interest income totaled $621.3 million in 2007, compared with $618.8 million for 2006. Higher loan balances and a higher average prime lending rate in 2007 compared with 2006 contributed to the increase. Although the prime rate declined during the fourth quarter of 2007, the average rate for the year was slightly higher than it was in 2006. The average cost of interest-bearing deposits increased to 3.20 percent for 2007 compared with 2.59 percent for 2006. Net interest income for 2007 also includes $5.4 million in expense from the net settlement of interest-rate swaps compared with $9.6 million in 2006. Interest income recovered on charged-off loans included above was $1.7 million in 2007, compared with $2.0 million for 2006. The fully taxable-equivalent net interest margin in 2007 was 4.45 percent, compared with 4.58 percent for 2006.

        Average loans and leases for 2007 increased to $11.06 billion for 2007, an 11 percent increase from average loans and leases of $9.95 billion for 2006. Loan growth was led by a 16 percent increase in commercial real estate and construction loans to $3.17 billion, and a 10 percent increase in commercial loans to $4.28 billion compared with 2006. In addition, average single-family residential loans increased 9 percent from the prior year. Excluding the acquisition of the Business Bank of Nevada average loans grew by 7 percent in 2007.

        Average total securities in 2007 were $2.83 billion, a decrease of $654.5 million, or 19 percent, from 2006.

        Average core deposits, which continued to provide substantial benefits to the bank's cost of funds, increased 2 percent to $10.36 billion from $10.14 billion for 2006. Average core deposits, which do not include certificates of deposit of $100,000 or more, represented 84.7 percent of the total average deposit base for the year. Included in core deposits are specialty deposits. Average specialty deposits, primarily from title and escrow companies, were $1.19 billion in 2007, compared with $1.26 billion in

49

2006, a decrease of 6 percent. Specialty deposit balances declined due to the slowdown in the housing market.

        Average interest-bearing core deposits increased to $4.83 billion in 2007 from $4.41 billion in 2006, an increase of $412.6 million, or 9 percent. Average noninterest-bearing deposits decreased to $5.53 billion in 2007 from $5.73 billion in 2006, a decrease of $201.0 million, or 4 percent. Average time deposits in denominations of $100,000 or more increased by $154.9 million, or 9 percent, to $1.88 billion, between 2006 and 2007. The decrease in noninterest-bearing deposits and increase in time deposits occurred as some of the Bank's clients shifted funds to higher-yielding accounts.

Provision for Credit Losses

        The Company accounts for the credit risk associated with lending activities through its allowance for loan and lease losses, reserve for off-balance sheet credit commitments and provision for credit losses. The provision is the expense recognized in the consolidated statements of income to adjust the allowance and the reserve for off-balance sheet commitments to the levels deemed appropriate by management, as determined through its application of the Company's allowance methodology procedures (see "Critical Accounting Policies" on page 36).

        The Company recorded expense of $127.0 million and $20.0 million through the provision for credit losses in 2008 and 2007, respectively, and income of $0.6 million during 2006. The provision recorded in 2008 reflects management's ongoing assessment of the credit quality of the Company's portfolio, which is impacted by various economic trends, including continuing weakness in the housing sector. Additional factors affecting the provision include net loan charge-offs, increased nonaccrual loans, risk rating migration, growth in the loan portfolio and changes in the economic environment during the period. See "Balance Sheet Analysis—Asset Quality—Allowance for Loan and Lease Losses and Reserve for Off-Balance Sheet Credit Commitments" for further information on factors considered by the Company in assessing the credit quality of the loan portfolio and establishing the allowance for loan and lease losses.

        Total nonaccrual loans increased to $211.1 million at December 31, 2008, from $75.6 million at December 31, 2007 and $150.9 million at September 30, 2008. While a majority of new nonaccrual loans are centered in the homebuilder portfolio, there was an increase in the number of nonaccrual loans in the commercial portfolio.

        The Company has not originated nor purchased subprime or option adjustable-rate mortgages.

        Net loan charge-offs totaled $68.5 million for the year ended December 31, 2008 compared with net loan charge-offs of $8.5 million and net loan recoveries of $2.8 million for the years ended December 31, 2007 and 2006, respectively. Loans to homebuilders for residential loan acquisition, development and construction accounted for 46 percent of the 2008 net charge-offs. The remaining net-charge-offs relate to commercial loans and other construction loans.

        Credit quality will be influenced by underlying trends in the economic cycle, particularly in California, and other factors which are beyond management's control. Consequently, no assurances can be given that the Company will not sustain loan or lease losses, in any particular period, that are sizable in relation to the allowance for loan and lease losses.

Noninterest Income

        Noninterest income for the year totaled $267.0 million, a decrease of $36.2 million, or 12 percent, from 2007. Noninterest income increased $60.8 million, or 25 percent, between 2007 and 2006. Noninterest income represented 31 percent of total revenues in 2008, compared with 33 percent and 29 percent in 2007 and 2006, respectively.

50

        A breakdown of noninterest income by category is provided in the table below:

Analysis of Changes in Noninterest Income

						Increase (Decrease)									Increase (Decrease)
(in millions)			2008			Amount			%			2007			Amount			%			2006
Trust and investment fees			$	132.2		$	(8.5	)		(6.0	)	$	140.7		$	33.2			30.9		$	107.5
Brokerage and mutual fund fees				73.4			13.1			21.7			60.3			10.0			19.9			50.3
		Total wealth management fees		205.6			4.6			2.3			201.0			43.2			27.4			157.8
Cash management and deposit transaction fees
	transaction fees			48.3			13.0			36.8			35.3			3.7			11.7			31.6
International services fees				32.5			2.1			6.9			30.4			4.2			16.0			26.2
Bank-owned life insurance				2.8			0.1			3.7			2.7			(0.3	)		(10.0	)		3.0
Other service charges and fees				29.0			(0.2	)		(0.7	)		29.2			3.7			14.5			25.5
		Total noninterest income before (loss) gain		318.2			19.6			6.6			298.6			54.5			22.3			244.1
Impairment loss on securities				(49.3	)		(49.3	)		NM			—			—			NM			—
(Loss) gain on sale of other assets				(0.4	)		(6.4	)		(106.7	)		6.0			3.2			114.3			2.8
Loss on sale of securities				(1.5	)		(0.1	)		(7.1	)		(1.4	)		3.1			68.9			(4.5	)
		Total	$	267.0		$	(36.2	)		(11.9	)	$	303.2		$	60.8			25.1		$	242.4

NM—Not

meaningful. 

Wealth Management

        The Bank provides various trust, investment and wealth advisory services to its individual and business clients. The Company delivers these services through the Bank's wealth management division as well as through its wealth management affiliates. Trust services are provided only by the Bank. Trust and investment fee revenue includes fees from trust, investment and asset management, and other wealth advisory services. A portion of these fees is based on the market value of client assets managed, advised, administered or held in custody. The remaining portion of these fees is based on the specific service provided, such as estate and financial planning services, or may be fixed fees. For those fees based on market valuations, the mix of assets held in client accounts impacts how closely changes in trust and investment fee income correlate with changes in the financial markets. Changes in market valuations are reflected in fee income primarily on a trailing-quarter basis. Trust and investment fees decreased 6 percent from 2007 primarily as a result of lower market valuations and asset mix changes. The 22 percent increase in brokerage and mutual fund fees from the prior year is due to growth in money market funds and managed fixed income accounts as a result of a flight to safety by investors during a time of market volatility.

        Assets under management ("AUM") include assets for which the Company makes investment decisions on behalf of its clients and assets under advisement for which the Company receives advisory

51

fees from it clients. Assets under administration are assets the Company holds in a fiduciary capacity or for which it provides non-advisory services. The table below provides a summary of AUM:

			December 31,
							% Change
(in millions)			2008		2007
Assets Under Management			$	30,782	$	37,269		(17	)
Assets Under Administration
	Brokerage			5,600		7,593		(26	)
	Custody and other fiduciary			11,138		13,644		(18	)
		Subtotal		16,738		21,237		(21	)
Total assets under management or administration (1)			$	47,520	$	58,506		(19	)

(1)

Excludes $4.67 billion and $12.44 billion of assets under management for an asset manager in which the Company held a minority ownership interest as of December 31, 2008 and 2007, respectively.

        Assets under management fell 17 percent from 2007. Assets under management or administration fell 19 percent from 2007. Growth in the Company's money market funds and managed fixed income accounts, resulting from a flight to safety by investors during a time of market volatility, was offset by declines in equity AUM. The decline in equities was primarily due to lower market valuations.

        A distribution of AUM by type of investment is provided in the following table:

Investment	% of AUM December 31, 2008			% of AUM December 31, 2007
Equities		27	%		49	%
U.S. fixed income		22	%		18	%
Cash and cash equivalents		33	%		20	%
Other (1)		18	%		13	%
		100	%		100	%

(1)

Includes international equities, private equity and other alternative investments.

        Historically, the investment mix of assets generally does not change significantly on a year to year basis. The mix of assets has changed in 2008 compared to 2007 due to cash and money market investment inflows as well as significant decreases in the market value of equities as discussed above. The other investment category has increased due to client inflows to other alternative investments at Convergent Wealth.

Other Noninterest Income

        Cash management and deposit transaction fees increased $13.0 million, or 37 percent, in 2008, compared with a 12 percent increase in 2007 from 2006. The growth in deposit-related fee income from the prior year is due to the impact of declining interest rates on compensating deposit balances and the sale of additional cash management services.

        International services income for 2008 increased $2.1 million, or 7 percent, over 2007. In 2007, international services income increased $4.2 million, or 16 percent, over 2006. International services income includes foreign exchange fees, fees on commercial letters of credit and standby letters of credit, and foreign collection fees. The increase in 2008 and 2007 reflects the continuing growth in demand for both foreign exchange services and letters of credit.

52

        Other service charges and fees had a slight decrease of $0.2 million in 2008 over 2007, or 1 percent. Other service charges and fees increased $3.7 million in 2007 over 2006, or 15 percent, due to higher transaction volumes.

        Impairment loss on securities was $49.3 million in 2008 due to unprecedented disruptions in the financial markets. There was no impairment loss recognized in 2007 and 2006. See "Balance Sheet Analysis—Securities" for further discussion of impairment loss on securities.

        Losses on the sale of securities available-for-sale totaled $1.5 million and $1.4 million in 2008 and 2007, respectively. The Company also realized losses on the sale of securities available-for-sale of $4.5 million in 2006.

        Loss on sale of other assets for 2008 was $0.4 million relating mostly to losses recognized on sale of other real estate owned. Gain on sale of other assets for 2007 included a $5.1 million gain on the recovery of an investment in liquidation and a $0.6 million gain on the sale of an insurance policy.

Noninterest Expense and Minority Interest Expense

        Noninterest expense (including minority interest expense) was $587.5 million in 2008, an increase of $49.4 million, or 9 percent, over 2007. Noninterest expense increased $56.1 million, or 12 percent, in 2007 over 2006. The increase is largely due to a $7.9 million, net of minority interest, impairment of a contract intangible asset associated with an investment management affiliate, $4.7 million of additional expense for FDIC premiums, $1.6 million of legal settlement relating to licensing of check imaging and processing technology, and acquisitions of Business Bank of Nevada and Convergent Wealth during 2007. Excluding all of the above items, noninterest expense grew 4 percent from 2007. Management believes that it is useful for investors to understand the impact of these charges on the Company's results of operations.

        The following table provides a summary of noninterest expense by category:

Analysis of Changes in Noninterest Expense and Minority Interest Expense

						Increase (Decrease)								Increase (Decrease)
(in millions)				2008		Amount			%			2007		Amount		%		2006
Salaries and employee benefits				$	357.0	$	25.9			7.8		$	331.1	$	35.9		12.2	$	295.2
All other noninterest expense:
	Net occupancy of premises				49.5		6.0			13.8			43.5		3.3		8.2		40.2
	Legal and professional fees				32.8		(3.2	)		(8.9	)		36.0		1.0		2.9		35.0
	Information services				27.0		3.6			15.4			23.4		1.6		7.3		21.8
	Marketing and advertising				22.9		1.1			5.0			21.8		3.1		16.6		18.7
	Depreciation and amortization				22.2		1.3			6.2			20.9		1.8		9.4		19.1
	Office services				12.4		0.1			0.8			12.3		1.5		13.9		10.8
	Amortization of intangibles				17.7		8.8			98.9			8.9		3.6		67.9		5.3
	Equipment				3.1		(0.1	)		(3.1	)		3.2		0.4		14.3		2.8
	Other operating				37.5		9.4			33.5			28.1		0.9		3.3		27.2
		Total all other noninterest expense			225.1		27.0			13.6			198.1		17.2		9.5		180.9
			Total noninterest expense		582.1		52.9			10.0			529.2		53.1		11.2		476.1
	Minority interest expense				5.4		(3.5	)		(39.3	)		8.9		3.0		50.8		5.9
Total noninterest expense including minority interest				$	587.5	$	49.4			9.2		$	538.1	$	56.1		11.6	$	482.0

53

        Salaries and employee benefits expense increased to $357.0 million, or 8 percent in 2008 from $331.1 million in 2007 primarily due to the acquisition of Convergent Wealth in May 2007, higher performance-based compensation costs and staffing increases from prior year. Salaries and employee benefits expense for 2008 includes $14.7 million related to share-based compensation plans compared with $13.9 million for 2007 and $12.3 million for 2006. Salaries and employee benefits expense increased 12 percent in 2007 from 2006 largely due to the acquisition of BBNV and Convergent Wealth and to higher performance-based compensation costs. Full-time equivalent staff increased to 2,989 at December 31, 2008 from 2,914 at December 31, 2007 and 2,689 at December 31, 2006.

        The remaining noninterest expense categories increased $27.0 million or 14 percent, between 2007 and 2008. Occupancy costs increased $6.0 million and information services expenses increased by $3.6 million due to the acquisition of Convergent Wealth, as well as rent increases, new office locations and new software and systems. Amortization of intangible assets, which include customer-relationship intangibles, increased by $8.8 million due largely to a $9.4 million impairment of a contract intangible asset in 2008. Minority interest expense, representing minority shareholders' interests in the net income of affiliates, decreased by $3.5 million from 2007 primarily due to declining income at our other majority-owned affiliates.

        The remaining noninterest expense categories increased $17.2 million, or 10 percent, between 2006 and 2007 largely due to the acquisitions of BBNV and Convergent Wealth during 2007.

Segment Operations

        The Company's reportable segments are Commercial and Private Banking, Wealth Management and Other. For a more complete description of the segments, including summary financial information, see Note 22 on page A-58 of the Notes to Consolidated Financial Statements.

Commercial and Private Banking

Comparison of 2008 to 2007

        Net income for the Commercial and Private Banking segment decreased by $47.8 million, or 24 percent, to $155.4 million for 2008 from $203.2 million for 2007. The decrease in net income for 2008 compared to the year earlier is primarily due to the higher provision for credit losses. Refer to page 48 of this report for further discussion of the Provision for Credit Losses. Net interest income increased to $639.9 million for 2008 from $623.6 million for 2007. The increase in net interest income compared to the prior year was driven by loan growth across all major loan categories. Loan growth offset the impact of decreases in the prime rate and net interest margin compared to the year earlier. Average loan balances increased by 10 percent to $12.01 billion for 2008 from $10.96 billion for 2007. Average deposits decreased to $10.87 billion for 2008 from $11.05 billion for 2007. The decrease was primarily due to the planned maturity and non-renewal of higher cost promotional certificates of deposits and to a decline in title and escrow deposits resulting from the slowdown in the housing and commercial real estate industries. Noninterest income increased 24 percent to $187.6 million for 2008 from $151.3 million for 2007. The increase is primarily due to higher cash management and deposit transaction fees, and to increases in mutual fund and international services fees. Noninterest expense, including depreciation and amortization, was $41.2 million, or 10 percent, higher for 2008 compared to 2007. Noninterest expense for 2008 includes a full year of expenses for the Business Bank of Nevada acquired in May 2007. Noninterest expense for 2008 also reflects higher staffing and occupancy costs associated with new offices, growth in software costs associated with new data processing systems and an increase in FDIC premiums compared to the year earlier.

54

Comparison of 2007 to 2006

        Net income for the Commercial and Private Banking segment decreased by $6.4 million to $203.1 million for 2007 from $209.5 million for 2006. The decrease in net income for 2007 compared to the year earlier is primarily due to the $20.0 million provision for credit losses recorded in 2007. Net interest income increased to $623.6 million for 2007 from $600.0 million for 2006. The increase in net interest income compared to the prior year was driven by loan growth, primarily in commercial, residential mortgage and real estate construction loans. Loan growth offset the impact of a decrease in the net interest margin, largely due to higher deposit costs, compared to 2006. Average loan balances increased by 11 percent to $10.96 billion for 2007 from $9.84 billion for 2006. Average deposits increased to $11.05 billion for 2007 from $10.56 billion for 2006. Noninterest income increased 15 percent to $151.3 million for 2007 from $132.0 million for 2006. The increase is due to growth in trust and investment fees, brokerage and mutual fund fees, cash management and deposit transaction fees and international services fees compared to the prior year. Noninterest expense, including depreciation and amortization, was $29.8 million, or 7 percent, higher for 2007 compared to 2006 due to the acquisition of BBNV and higher staffing and occupancy costs associated with new offices.

Wealth Management

Comparison of 2008 to 2007

        The Wealth Management segment had net income of $35.9 million for 2008, a decrease of $2.4 million, or 6 percent, from $38.3 million for 2007. Noninterest income increased by $4.8 million to $208.7 million for 2008 from $203.9 million for 2007. Refer to page 51 of this report for a discussion of the factors impacting fee income for the Wealth Management segment. Noninterest expense, including depreciation and amortization, increased by 11 percent to $159.3 million for 2008 compared to $143.4 million for 2007. Noninterest expense for 2008 includes a $9.4 million impairment write down of a contract intangible, a full year of expenses for Convergent Wealth, compared with 8 months for 2007, and expenses related to the opening of the Los Angeles office of Convergent Wealth in 2008.

Comparison of 2007 to 2006

        The Wealth Management segment had net income of $38.3 million for 2007, an increase of $12.0 million, or 46 percent, from 2006. Noninterest income increased by $48.1 million to $203.9 million for 2007 from $155.8 million for 2006. The increase in net income and noninterest income compared to the year earlier is attributable to the acquisition of Convergent Wealth in 2007, a full year of results for Independence Investments and higher transaction volumes. Noninterest expense, including depreciation and amortization, was $143.4 million, or 24 percent, higher in 2007 than in 2006. The increase in noninterest expense compared to 2006 is due to the acquisition of Convergent Wealth and reflects a full year of expenses for Independence Investments.

Other

Comparison of 2008 to 2007

        The net loss in the Other segment increased to $86.3 million for 2008 compared to $18.7 million for 2007. The increase in the net loss for the year is largely due to $28.6 million, after tax, of impairment charges recorded on investment securities. Results for the segment were also impacted by higher net funding costs in the Asset Liability Funding Center, reflected as an increase in net interest expense, and an increase in inter-segment revenue, which is eliminated in this segment.

55

Comparison of 2007 to 2006

        The net loss in the Other segment increased to $18.7 million for 2007 compared to $2.3 million for 2006. Results for the segment were impacted by higher net funding costs and expense associated with interest-rate swaps in the Asset Liability Funding Center, and an increase in inter-segment revenue, which is eliminated in this segment.

Income Taxes

        The effective tax rate for 2008 was 31.1 percent, compared with 36.9 percent for 2007 and 36.4 percent for 2006. The effective tax rates differ from the applicable statutory federal and state tax rates due to various factors, including tax benefits from investments in affordable housing partnerships and tax-exempt income on municipal bonds and bank-owned life insurance. See Note 9 of the Notes to Consolidated Financial Statements on page A-35.

        The Internal Revenue Service has completed its audit of the Company's tax returns for the years 2002-2007 resulting in no material financial statement impact. The Company is currently being audited by the IRS for the year 2008 and by the Franchise Tax Board for the years 1998 through 2004. The potential financial statement impact, if any, resulting from the completion of the audits is not determinable at this time.

        From time to time, there may be differences in opinions with respect to the Company's tax treatment of certain transactions. A tax position which was previously recognized on the financial statements is not reversed unless it appears the benefits are no longer "more likely than not" to be sustained upon a challenge from the taxing authorities. The Company did not have any tax positions for which previously recognized benefits were reversed during the year ended December 31, 2008.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        Market risk results from the variability of future cash flows and earnings due to changes in the financial markets. These changes may also impact the fair values of loans, securities and borrowings. The values of financial instruments may fluctuate because of interest rate changes, foreign currency exchange rate changes, or other market changes. The Company's asset/liability management process entails the evaluation, measurement and management of interest rate risk, market risk and liquidity risk. The principal objective of asset/liability management is to optimize net interest income subject to margin volatility and liquidity constraints over the long term. Margin volatility results when the rate reset (or repricing) characteristics of assets are materially different from those of the Company's liabilities. The Board of Directors approves asset/liability policies and annually reviews and approves the limits within which the risks must be managed. The Asset/Liability Management Committee ("ALCO"), which is comprised of senior management and key risk management individuals, sets risk management guidelines within the broader limits approved by the Board, monitors the risks and periodically reports results to the Board.

Risk Management Framework

        Risk management oversight and governance is provided through the Board of Directors' Audit and Risk Committee and facilitated through multiple management committees. Consisting of four outside directors, the Audit and Risk Committee monitors the Company's overall aggregate risk profile as established by the Board of Directors including all credit, market, operational and regulatory risk management activities. The Committee reviews and approves the activities of key management governance committees that regularly evaluate risks and internal controls for the Company. These management committees include the Asset/Liability Management Committee, the Credit Policy Committee, the Senior Operations Risk Committee and the Risk Council, among others. The Risk Council reviews the development, implementation and maintenance of risk management processes from

56

a Company-wide perspective, and assesses the adequacy and effectiveness of the Company's risk management policies and the Enterprise Risk Management program. Other management committees, with representatives from the Company's various lines of business and affiliates, address and monitor specific risk types, including the Compliance Committee, the Wire Risk Committee, and the Information Technology Steering Committee, and report periodically to the key management committees. The Senior Risk Management Officer and the Internal Audit and Credit Risk Review units provide the Audit and Risk Committee with independent assessments of the Company's internal control structure and related systems and processes.

Liquidity Risk

        Liquidity risk results from the mismatching of asset and liability cash flows. Funds for this purpose can be obtained in cash markets, by borrowing, or by selling certain assets. The objective of liquidity management is to manage cash flow and liquidity reserves so that they are adequate to fund the Company's operations and meet obligations and other commitments on a timely and cost-effective basis. The Company achieves this objective through the selection of asset and liability maturity mixes that it believes best meet its needs. The Company's liquidity position is enhanced by its ability to raise additional funds as needed in the wholesale markets. Liquidity risk management is an important element in the Company's ALCO process, and is managed within limits approved by the Board of Directors and guidelines set by management. Attention is also paid to potential outflows resulting from disruptions in the financial markets or to unexpected credit events. These factors are incorporated into the Company's contingency funding analysis, and provide the basis for the identification of primary and secondary liquidity reserves.

        In recent years, the Company's core deposit base has provided the majority of the Company's funding requirements. This relatively stable and low-cost source of funds, along with shareholders' equity, provided 77 percent and 78 percent of funding for average total assets in 2008 and 2007, respectively. Strong core deposits are indicative of the strength of the Company's franchise in its chosen markets and reflect the confidence that clients have in the Company. The Company places a very high priority in maintaining this confidence through conservative credit and capital management practices and by maintaining significant on-balance sheet liquidity reserves.

        A significant portion of remaining funding of average total assets is provided by short-term federal fund purchases and, to a lesser extent, sales of securities under repurchase agreements. These funding sources, on average, totaled $1.10 billion and $662.9 million in 2008 and 2007, respectively. The Company also increased its funding from other longer-term borrowings to $1.07 billion on average in 2008 from $644.6 million in 2007. Market sources of funds comprise a relatively modest portion of total Bank funding and are managed within concentration and maturity guidelines reviewed by management and implemented by the Company's treasury department.

        Liquidity is further provided by assets such as federal funds sold and trading account securities, which may be immediately converted to cash at minimal cost. The aggregate of these assets averaged $115.4 million during 2008 compared with $89.3 million in 2007. In addition, the Company has a remaining borrowing capacity of $2.48 billion as of December 31, 2008, secured by collateral, from the Federal Home Loan Bank of San Francisco, of which the Bank is a member. The Company's investment portfolio also provides a substantial secondary liquidity reserve. The portfolio of securities available-for-sale averaged $2.29 billion and $2.76 billion in 2008 and 2007, respectively. The unpledged portion of securities available-for-sale at December 31, 2008 totaled $0.78 billion. These securities could be used as collateral for borrowing and in dire circumstances, a portion could be sold. Maturing loans provide additional liquidity, and $3.43 billion, or 28 percent, of the Company's loans are scheduled to mature in 2009.

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Interest Rate Risk

        Interest rate risk is inherent in financial services businesses. Interest rate risk results from assets and liabilities maturing or repricing at different times; assets and liabilities repricing at the same time but in different amounts or from short-term and long-term interest rates changing by different amounts (changes in the yield curve).

        The Company has established two primary measurement processes to quantify and manage exposure to interest rate risk: net interest income simulation modeling and present value of equity analysis. Net interest income simulations are used to identify the direction and severity of interest rate risk exposure across a 12 and 24 month forecast horizon. Present value of equity calculations are used to estimate the price sensitivity of shareholders' equity to changes in interest rates. The Company also uses gap analysis to provide insight into structural mismatches of asset and liability cash flows.

        Net Interest Income Simulation:    As part of its overall interest rate risk management process, the Company performs stress tests on net interest income projections based on a variety of factors, including interest rate levels, changes in the relationship between the prime rate and short-term interest rates, and the shape of the yield curve. The Company uses a simulation model to estimate the severity of this risk and to develop mitigation strategies, including interest-rate hedges. The magnitude of the change is determined from historical volatility analysis. The assumptions used in the model are updated periodically and reviewed and approved by ALCO. In addition, the Board of Directors has adopted limits within which interest rate exposure must be contained. Within these broader limits, ALCO sets management guidelines to further contain interest rate risk exposure.

        The Company is naturally asset-sensitive due to its large portfolio of rate-sensitive commercial loans that are funded in part by noninterest bearing and rate-stable core deposits. As a result, if there are no significant changes in the mix of assets and liabilities, the net interest margin increases when interest rates increase and decreases when interest rates decrease. The Company uses on and off-balance sheet hedging vehicles to manage risk. The Company uses a simulation model to estimate the impact of changes in interest rates on net interest income. The model projects net interest income assuming no changes in loans or deposit mix as it stood at December 31, 2008. Interest rate scenarios include stable rates and 100 and 200 basis point parallel shifts in the yield curve occurring gradually over a twelve-month period. Loan yields and deposit rates change over the twelve-month horizon based on current spreads and adjustment factors that are statistically derived using historical rate and balance sheet data.

        During 2008, the Company maintained a neutral to slightly asset-sensitive interest rate position. The average prime rate decreased 296 basis points in 2008 causing asset yields to decline. The cost of interest bearing liabilities declined more slowly than was expected due to competitive pricing pressures for deposits and to difficulties in the credit markets. As a result, the Company's net interest margin decreased by 25 basis points. The simulation model is based on the balance sheet as of year end, and projects net interest income assuming no change in loan or deposit mix. Interest rate scenarios include stable rates and 100 and 200 basis point parallel shifts in the yield curve occurring gradually over a twelve-month period. As of December 31, 2008, the Federal Funds target rate was at a range of zero percent to 0.25 percent. Further declines in interest rates are not expected to significantly reduce earning asset yields but are expected to lower interest expense somewhat thus improving net interest margin slightly. This compares to the results of the simulation model as of December 31, 2007, which indicated that a 100 basis point decline in the yield curve over a twelve-month horizon would result in a decrease in projected net interest income of approximately 0.1 percent while a 200 basis point decline would reduce projected net interest income by approximately 3.2 percent. At December 31, 2008, a gradual 100 basis point parallel increase in the yield curve over the next 12 months would result in an increase in projected net interest income of approximately 0.8 percent while a 200 basis point increase would increase projected net interest income by approximately 1.8 percent. This compares to an

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increase in projected net interest income of 1.4 percent with a 100 basis point increase and 2.6 percent with a 200 basis point increase at December 31, 2007. The Company's interest rate risk exposure remains within Board limits and ALCO guidelines.

        Market Value of Portfolio Equity:    The market value of portfolio equity ("MVPE") model is used to evaluate the vulnerability of the market value of shareholders' equity to changes in interest rates. The MVPE model calculates the expected cash flow of all of the Company's assets and liabilities under sharply higher and lower interest rate scenarios. The present value of these cash flows is calculated by discounting them using the interest rates for that scenario. The difference between the present value of assets and the present value of liabilities in each scenario is the MVPE. The assumptions about the timing of cash flows, level of interest rates and shape of the yield curve are the same as those used in the net interest income simulation. They are updated periodically and are reviewed by ALCO at least annually.

        The MVPE model indicates that MVPE is somewhat vulnerable to a sudden and substantial increase in interest rates. As of December 31, 2008, a 200 basis point increase in interest rates results in a 4.2 percent decline in MVPE. This compares to a 3.5 percent decline a year earlier. The higher sensitivity is due to changes in the deposit mix and a slight increase in the duration gap between earning assets and interest bearing liabilities. As noted above, measurement of a 200 basis point decrease in rates as of December 31, 2008 is not meaningful. As of December 31, 2007, a 200 basis point decrease in rates would improve MVPE by 1.4 percent.

        Gap Analysis:    The gap analysis is based on the contractual cash flows of all asset and liability balances on the Company's books. Contractual lives of assets and liabilities may differ substantially from their expected lives. For example, checking accounts are subject to immediate withdrawal. However, experience suggests that these accounts will have longer average lives. Also, certain loans, such as first mortgages, are subject to prepayment. The gap analysis may be used to identify periods in which there is a substantial mismatch between asset and liability cash flows. These mismatches can be moderated by investments or interest-rate derivatives. Gap analysis is used to support both interest rate risk and liquidity risk management.

        Interest-rate swaps are used to reduce cash flow variability and to moderate changes in the fair value of long-term financial instruments. Net interest income or expense associated with interest-rate swaps (the difference between the fixed and floating rates paid or received) is included in net interest income in the reporting periods in which they are earned. As discussed in "Critical Accounting Policies—Derivatives and hedging," all derivatives are recorded on the consolidated balance sheets at their fair value. The treatment of changes in the fair value of derivatives depends on the character of the transaction.

        Interest-rate swap agreements involve the exchange of fixed and variable-rate interest payments based upon a notional principal amount and maturity date. The Company's interest rate risk management instruments had $15.6 million of credit risk exposure at December 31, 2008 and $12.1 million as of December 31, 2007. The credit exposure represents the cost to replace, on a present value basis and at current market rates, all contracts outstanding by trading counterparty having an aggregate positive market value, net of margin collateral received. The Company's swap agreements require the deposit of cash or marketable debt securities as collateral for this risk if it exceeds certain market value thresholds. These requirements apply individually to the Corporation and to the Bank. As of December 31, 2008, collateral valued at $19.9 million had been received from swap counterparties. At December 31, 2007, collateral valued at $5.5 million had been received from swap counterparties.

        As of December 31, 2008, the Company had $715.9 million notional amount of interest-rate swaps designated as hedges, of which $390.9 million were designated as fair value hedges and $325.0 million were designated as cash flow hedges. The positive fair value of the fair value hedges, consisting of positive mark-to-market of $35.0 million and net interest receivable of $1.1 million, resulted in the

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recognition of other assets and an increase in hedged deposits and borrowings of $36.1 million. The positive fair value of $12.1 million on the cash flow hedges of variable-rate loans resulted in the recognition of other assets and an other comprehensive gain, and included a positive mark-to-market of $11.5 million, before taxes of $4.8 million, and net interest receivable of $0.6 million.

        The subordinated debt and other long-term debt consists of City National Bank 10-year subordinated notes with a face value of $150.0 million due on September 1, 2011 and City National Corporation senior notes with a face value of $220.9 million due on February 15, 2013. In addition, the Company has outstanding trust preferred debentures with a face value of $5.2 million due on November 23, 2034.

        Amounts to be paid or received on the cash flow hedge interest-rate swaps will be reclassified into earnings upon receipt of interest payments on the underlying hedged loans, including amounts totaling $5.5 million that increased net interest income during 2008. Comprehensive gains expected to be reclassified into net interest income within the next 12 months are $7.7 million.

				December 31, 2008							December 31, 2007						December 31, 2006
(in millions)				Notional Amount		Fair Value			Duration		Notional Amount		Fair Value		Duration		Notional Amount		Fair Value			Duration
Fair Value
	Interest Rate Swap
		Certificates of deposit		$	20.0	$	1.4			1.9	$	20.0	$	0.9		2.7	$	175.0	$	(0.1	)		0.2
		Long-term and subordinated debt			370.9		34.7			3.3		490.9		11.1		3.0		490.9		(2.5	)		3.8
			Total fair value hedge swaps		390.9		36.1			3.2		510.9		12.0		3.0		665.9		(2.6	)		2.8
Cash Flow Hedge
	Interest Rate Swap
		US Dollar LIBOR based loans			200.0		8.4			1.8		100.0		3.9		2.3		325.0		(1.8	)		0.6
		Prime based loans			125.0		3.7			1.3		250.0		0.8		0.4		375.0		(3.1	)		0.6
			Total cash flow hedge swaps		325.0		12.1			1.6		350.0		4.7		0.9		700.0		(4.9	)		0.6
Fair Value and Cash Flow Hedge
	Interest Rate Swaps			$	715.9	$	48.2	(1)		2.5	$	860.9	$	16.7		2.2	$	1,365.9	$	(7.5	)		1.7

(1)

Net fair value is the estimated net gain (loss) to settle derivative contracts. The net fair value is the sum of the mark-to-market asset (if applicable) and mark-to-market liability.

        The Company has not entered into any hedge transactions involving any other interest-rate derivative instruments, such as interest-rate floors, caps, and interest-rate futures contracts for its own portfolio. The Company could consider using such financial instruments in the future if they offered a significant advantage over interest-rate swaps.

        The table below shows the notional amounts of the Company's interest-rate swap maturities and average rates at December 31, 2008 and December 31, 2007. Average interest rates on variable-rate instruments are based upon the Company's interest rate forecast.

Interest Rate Swap Maturities and Average Rates
December 31, 2008

(in millions)	2009			2010			2011			2012		2013			Thereafter			Total			Fair Value
Notional amount	$	25.0		$	185.0		$	285.0		$	—	$	220.9		$	—		$	715.9		$	48.2
Weighted average rate received		7.97	%		5.41	%		4.79	%		—		4.38	%		—	%		4.93	%
Weighted average rate paid		3.25	%		1.59	%		1.61	%		—		2.15	%		—	%		1.83	%

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Interest Rate Swap Maturities and Average Rates
December 31, 2007

(in millions)	2008			2009			2010			2011		2012			Thereafter			Total			Fair Value
Notional amount	$	340.9		$	25.0		$	110.0		$	160.0	$	—		$	225.0		$	860.9		$	16.7
Weighted average rate received		6.99	%		7.97	%		5.31	%		5.57		—	%		4.38	%		5.86	%
Weighted average rate paid		6.62	%		7.25	%		4.66	%		5.11		—	%		4.87	%		5.65	%

Other Derivatives

        The Company also offers interest-rate swaps and interest-rate caps, floors and collars to its clients to assist them in hedging their cash flow and operations. These derivative contracts are offset by paired trades with unrelated third parties. They are not designated as hedges under SFAS 133, and the positions are marked to market each reporting period. As of December 31, 2008, the Company had entered into derivative contracts with clients (and offsetting derivative contracts with counterparties) having a notional balance of $302.2 million.

        The Company offers a certificate of deposit product which provides a return based on the performance of an equity index. Under SFAS 133, a rate of return tied to a market index represents an embedded derivative. The embedded derivative associated with the certificate of deposit is treated as a written option contract with the depositer. The Company purchased offsetting options from a counterparty bank. These positions are not designated as hedges under SFAS 133 and are marked to market each reporting period. As of December 31, 2008, the notional balance of both the written and purchased options was $2.0 million.

Market Risk-Foreign Currency Exchange

        The Company enters into foreign-exchange contracts with its clients and counterparty banks primarily for the purpose of offsetting or hedging clients' transaction and economic exposures arising out of commercial transactions. The Company's policies also permit taking proprietary currency positions within certain approved limits. The Company actively manages its foreign exchange exposures within prescribed risk limits and controls. At December 31, 2008, the Company's outstanding foreign exchange contracts, both proprietary and for customer accounts, totaled $373.4 million. All foreign exchange contracts outstanding at December 31, 2008 had remaining maturities of 12 months or less and the mark-to-market included in other assets and other liabilities totaled $4.6 million and $3.9 million, respectively.

BALANCE SHEET ANALYSIS

        Total assets were $16.46 billion at December 31, 2008, compared to $15.89 billion at December 31, 2007. Average assets were $16.03 billion for 2008, compared to $15.37 billion for 2007.

        Total average interest-earning assets for 2008 were $14.67 billion in 2008, compared to $14.05 billion in 2007.

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Securities

        Comparative period-end balances for available-for-sale securities are presented below:

Securities Available-for-Sale

		December 31, 2008				December 31, 2007
(in thousands)		Cost		Fair Value		Cost		Fair Value
U.S. Treasury		$	45,709	$	46,197	$	45,106	$	45,228
Federal agency			29,939		30,180		50,996		51,042
CMOs			956,460		875,085		1,041,692		1,027,439
Mortgage-backed			644,594		653,914		822,193		807,534
State and municipal			404,787		413,030		391,790		395,455
Other			98,419		74,343		65,437		63,977
	Total debt securities		2,179,908		2,092,749		2,417,214		2,390,675
Equity securities and mutual funds			59,276		52,121		67,689		71,980
	Total securities	$	2,239,184	$	2,144,870	$	2,484,903	$	2,462,655

        At December 31, 2008, the fair value of securities available-for-sale totaled $2.14 billion, a decrease of $317.8 million, or 13 percent from December 31, 2007. The decrease was due to securities impairments of $49.3 million, as well as scheduled maturities of $157.4 million, paydowns of $295.9 million, and the sale of $105.1 million of securities to fund loan growth, improve liquidity and reduce prepayment risk, offset in part by additional purchases of $362.7 million. The average duration of total available-for-sale securities at December 31, 2008 and December 31, 2007 was 2.7 and 3.4 years, respectively.

        At December 31, 2008, the securities available-for-sale portfolio had a net unrealized loss of $94.3 million, comprised of $28.9 million of unrealized gains and $123.2 million of unrealized losses. At December 31, 2007, the securities available-for-sale portfolio had a net unrealized loss of $22.2 million, comprised of $11.6 million of unrealized gains and $33.9 million of unrealized losses. The unrealized gain or loss on securities available-for-sale is reported on an after-tax basis as a component of other comprehensive income.

        Dividend income included in interest income on securities available-for-sale in the consolidated statements of income was $3.2 million and $1.6 million for the years ended December 31, 2008 and 2007, respectively.

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        The following table provides the expected remaining maturities of debt securities included in the securities portfolio at December 31, 2008, except for mortgage-backed securities which are allocated according to their average expected maturities. Average expected maturities will differ from contractual maturities because mortgage debt issuers may have the right to repay obligations prior to contractual maturity.

Debt Securities Available-for-Sale

(in thousands)		One year or less		Over 1 year thru 5 years		Over 5 years thru 10 years		Over 10 years		Total
U.S. Treasury		$	46,197	$	—	$	—	$	—	$	46,197
Federal agency			30,180		—		—		—		30,180
CMOs			35,597		659,713		179,775		—		875,085
Mortgage-backed			5,141		504,055		112,531		32,187		653,914
State and municipal			31,858		147,796		170,524		62,852		413,030
Other			—		14,967		51,672		7,704		74,343
	Total debt securities	$	148,973	$	1,326,531	$	514,502	$	102,743	$	2,092,749
	Amortized cost	$	166,059	$	1,349,326	$	560,748	$	103,775	$	2,179,908

Impairment Assessment

        Impairment exists when the fair value of a security is less than its cost. Cost includes adjustments made to the cost basis of a security for accretion, amortization and previous other-than-temporary impairments. The Company performs a quarterly assessment of the debt and equity securities in its investment portfolio that have an unrealized loss to determine whether the decline in the fair value of these securities below their cost is other-than-temporary. Impairment is considered other-than-temporary when it becomes probable that the Company will be unable to recover the cost of an investment. The Company's impairment assessment takes into consideration factors such as the length of time and the extent to which the market value has been less than cost; the financial condition and near-term prospects of the issuer including events specific to the issuer or industry; defaults or deferrals of scheduled interest, principal or dividend payments; external credit ratings and recent downgrades; and the Company's intent and ability to hold the security for a period of time sufficient to allow for a recovery in fair value. If a decline in fair value is judged to be other than temporary, the cost basis of the individual security is written down to fair value which then becomes the new cost basis. The amount of the write down is included in Impairment loss on securities in the consolidated statements of income. The new cost basis is not adjusted for subsequent recoveries in fair value, if any.

Securities Deemed to be Other-Than-Temporarily Impaired

        Through the impairment assessment process, the Company determined that the investments discussed below were other-than-temporarily impaired at December 31, 2008. The Company recorded a $49.3 million impairment loss on available-for-sale securities in 2008. No impairment losses were recorded in 2007 and 2006.

		For the year ended December 31,
(in thousands) Impairment Losses on Other-Than-Temporarily Impaired Securities		2008		2007		2006
Collateralized debt obligation income notes		$	18,088	$	—	$	—
Equity securities and mutual funds			31,192		—		—
	Total	$	49,280	$	—	$	—

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Collateralized Debt Obligation Income Notes

        The cost basis of the collateralized debt obligation income notes ("CDO Notes") was $11.7 million as of December 31, 2008. The CDO Notes are the non-rated first loss absorption tranche in a multi-class, cash flow collateralized bond obligation backed by a collection of Trust Preferred securities issued by financial institutions. The notes represent ownership of all residual cash flows from the asset pools after all fees have been paid and debt issues have been serviced. CDO Notes are collateralized by debt securities with stated maturities and are therefore reported as debt securities in the consolidated balance sheets. The market for CDO Notes has become increasingly inactive since the fourth quarter of 2007 with no visible trade activity in the past six months. The valuation of these securities requires substantial judgment and estimation of the factors used in the cash flow model that are not currently observable in the market. CDO Notes are classified as Level 3 in the fair value hierarchy. Refer to Note 4 of Notes to Consolidated Financial Statements for further discussion of fair value.

        The Company recorded an $18.1 million impairment loss in 2008 on its investments in CDO Notes. The fair value of these securities was determined using an internal discounted cash flow model that incorporates the Company's assumptions about risk-adjusted discount rates, prepayment expectations, projected cash flows and collateral performance. The Company considered a number of factors in determining the discount rate used in the valuation model including the implied rate of return at the last date the market for CDO Notes and similar securities was active, rates of return that market participants would consider in valuing the securities and indicative quotes from dealers. The Company determined that 25 percent is the appropriate rate to apply in discounting the projected cash flows of its CDO Notes.

Perpetual Preferred Stock

        The cost basis of the perpetual preferred stock is $1.8 million at December 31, 2008. The Company recorded a $21.9 million impairment loss in 2008 on its investment in perpetual preferred stock issued by the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association. The action taken by the Federal Housing Finance Agency on September 7, 2008 placing these Government-Sponsored Agencies into conservatorship and eliminating the dividends on their preferred shares led to the Company's determination that these securities are other-than-temporarily impaired.

Equity Securities and Mutual Funds

        The cost basis of total available-for-sale equity securities and mutual funds, excluding perpetual preferred stock, is $57.5 million at December 31, 2008. Of that amount, $17.8 million relate to fixed income funds and $39.7 million relate primarily to equity securities and equity mutual funds. The Company recorded a $9.3 million impairment loss in 2008 on its investments in equity securities and mutual funds. The fair value of these securities is based on observable market prices. Overall, the fair value of many of the securities held has declined in recent months. The Company attributes most of the decline to recent significant market volatility and believes that current valuations are not indicative of the underlying value of these investments. Securities have been determined to be other-than-temporarily impaired based on the magnitude and duration of the decline in fair value below cost, the likelihood of recovery and other qualitative factors specific to the individual securities.

        The following table provides a summary of the gross unrealized losses and fair value of investment securities that are not deemed to be other-than-temporarily impaired aggregated by investment

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category and length of time that the securities have been in a continuous unrealized loss position as of December 31, 2008:

		Less than 12 months				12 months or greater				Total
(in thousands)		Fair Value		Estimated Unrealized Loss		Fair Value		Estimated Unrealized Loss		Fair Value		Estimated Unrealized Loss
CMOs		$	202,032	$	50,742	$	173,859	$	37,599	$	375,891	$	88,341
Mortgage-backed			63,634		719		12,925		167		76,559		886
State and Municipal			39,974		1,275		4,769		211		44,743		1,486
Other			43,844		17,661		25,910		6,554		69,754		24,215
	Total debt securities		349,484		70,397		217,463		44,531		566,947		114,928
Equity securities and mutual funds			36,129		8,309		—		—		36,129		8,309
	Total securities	$	385,613	$	78,706	$	217,463	$	44,531	$	603,076	$	123,237

        At December 31, 2008, total securities available-for-sale had a fair value of $2.14 billion, which included the temporarily impaired securities of $603.1 million in the table above. The remaining securities in the portfolio had a fair value of $1.54 billion, which included an unrealized gain of $28.9 million. As of December 31, 2008, the Company had 109 debt securities in an unrealized loss position, including 29 CMO securities, 10 mortgage-backed securities, 55 state and municipal securities and 15 other debt securities. As of December 31, 2008, the Company had 2,012 equity securities and 5 mutual funds in an unrealized loss position. The largest component of the unrealized loss at December 31, 2008 was $88.3 million and related to collateralized mortgage obligations. The Company monitors the performance of the mortgages underlying these bonds. Although there has been some deterioration in collateral performance, the Company only holds the most senior tranches of each issue which provides protection against defaults. The Company attributes the unrealized loss on CMOs and other debt securities held largely to the current absence of liquidity in the credit markets and not to deterioration in credit quality. These securities remain highly rated by the rating agencies. The Company expects to receive all contractual principal and interest payments due on its debt securities and has the ability and intent to hold these investments until their fair value recovers or until maturity. The mortgages in these asset pools are relatively large and have been made to borrowers with strong credit history and significant equity invested in their homes. They are well diversified geographically. Nonetheless, significant further weakening of economic fundamentals coupled with significant increases in unemployment and substantial deterioration in the value of high end residential properties could extend distress to this borrower population. This could increase default rates and put additional pressure on property values. Should these conditions occur, the value of these securities could decline and trigger the recognition of an other-than-temporary impairment charge.

        Other debt securities includes the Company's investments in highly rated corporate debt and collateralized bond obligations backed by Trust Preferred Securities ("CDOs") issued by a geographically diverse pool of small- and medium-sized financial institutions. Liquidity pressures in 2008 caused a general decline in the value of corporate debt. Of the CDOs held at December 31, 2008, approximately 80% are the most senior tranches of each issue. CDO Notes that receive the residual cash flows from the asset pools comprise the remaining holdings. Refer to Collateralized Debt Obligation Income Notes above. The market for CDOs was inactive in 2008. The fair values of these securities were determined using an internal pricing model that incorporates assumptions about discount rates in an illiquid market, projected cash flows and collateral performance. The Company attributes the $24.2 million unrealized loss on CDOs at December 31, 2008 to the illiquid credit markets. The senior notes have collateral that exceeds the outstanding debt by over 35% and are rated AAA by the rating agencies. Security valuations reflect the current and prospective performance of the issuers whose debt is contained in these asset pools. The Company expects to receive all contractual principal and interest

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payments due on its CDOs and has the ability and intent to hold these investments until their fair value recovers or until maturity.

        The Company's evaluation of equity securities and mutual funds for other-then-temporary impairment included consideration of issuer specific factors and the length of time and extent to which fair value has been less than cost. The $8.3 million unrealized loss on equity securities and mutual funds at December 31, 2008 has existed for less than six months. The Company attributes the unrealized loss to the current conditions in the financial markets that have negatively impacted equity valuations rather than to specific issuer circumstances. The DJIA and S&P 500 market indices decreased by approximately 34% and 38%, respectively, in 2008. The Company has the ability to hold these securities until their value recovers, however, continued declines in equity market valuations could result in additional impairment losses in a future reporting period.

        The Company does not consider the debt and equity securities in the above table to be other than temporarily impaired at December 31, 2008.

        The following table provides a summary of the gross unrealized losses and fair value of investment securities that are not deemed to be other-than-temporarily impaired aggregated by investment category and length of time that the securities have been in a continuous unrealized loss position as of December 31, 2007:

		Less than 12 months				12 months or greater				Total
(in thousands)		Fair Value		Estimated Unrealized Loss		Fair Value		Estimated Unrealized Loss		Fair Value		Estimated Unrealized Loss
Federal agency		$	—	$	—	$	30,933	$	67	$	30,933	$	67
CMOs			51,989		279		875,376		14,432		927,365		14,711
Mortgage-backed			11,398		10		712,749		15,951		724,147		15,961
State and municipal			37,978		232		68,201		589		106,179		821
Other			22,781		1,328		8,220		541		31,001		1,869
	Total debt securities		124,146		1,849		1,695,479		31,580		1,819,625		33,429
Equity securities and mutual funds			17,654		437		—		—		17,654		437
	Total securities	$	141,800	$	2,286	$	1,695,479	$	31,580	$	1,837,279	$	33,866

        At December 31, 2007, total securities available-for-sale had a fair value of $2.46 billion, which included temporarily impaired securities of $1.84 billion in the table above. The remaining securities in the portfolio had a fair value of $625.4 million, which included an unrealized gain of $11.6 million.

Loan Portfolio

        Total loans were $12.44 billion, $11.63 billion, and $10.39 billion at December 31, 2008, 2007, and 2006, respectively. Total loans increased $0.81 billion during 2008. Commercial loans, including lease financing, increased $0.32 billion. Residential mortgage loans and commercial real estate loans grew $0.47 billion while construction loans decreased $0.18 billion.

        Total loans increased $1.24 billion during 2007 due to increased loan demand augmented by the acquisition of BBNV. Commercial loans, including lease financing, increased $0.37 billion. Residential mortgage loans grew $0.31 billion while construction loans and commercial real estate mortgages increased $0.56 billion.

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        The following table shows the Company's consolidated loans by type of loan and their percentage distribution:

	December 31,
(in thousands)	2008			2007			2006			2005			2004
Commercial	$	4,433,755		$	4,193,436		$	3,869,161		$	3,388,640		$	2,851,790
Residential mortgages		3,414,868			3,176,322			2,869,775			2,644,030			2,299,600
Commercial real estate mortgages		2,184,688			1,954,539			1,710,113			1,857,273			1,841,974
Real estate construction		1,252,034			1,429,761			1,115,958			724,879			834,445
Equity lines of credit		635,325			432,513			404,657			333,548			255,194
Installment loans		173,779			178,195			201,125			200,296			219,701
Lease financing		349,810			265,872			215,216			116,936			178,573
Total loans and leases	$	12,444,259		$	11,630,638		$	10,386,005		$	9,265,602		$	8,481,277
Commercial		35.6	%		36.1	%		37.3	%		36.6	%		33.6	%
Residential mortgages		27.4			27.3			27.6			28.5			27.1
Commercial real estate mortgages		17.6			16.8			16.5			20.0			21.7
Real estate construction		10.1			12.3			10.7			7.8			9.9
Equity lines of credit		5.1			3.7			3.9			3.6			3.0
Installment loans		1.4			1.5			1.9			2.2			2.6
Lease financing		2.8			2.3			2.1			1.3			2.1
Total loans and leases		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

        The Company's loan portfolio consists primarily of loans for business and real estate purposes. Generally, loans are made on the basis of an available cash-flow repayment source as the first priority, with collateral being a secondary source for loan qualification. Although the legal lending limit for any one borrowing relationship was $228.7 million at December 31, 2008, the Bank has established "house limits" for individual borrowings. These limits vary by internal risk rating.

Commercial and Lease Financing

        Commercial loans, including lease financing, were $4.78 billion at December 31, 2008, representing 38.4 percent of the loan portfolio compared with $4.46 billion, or 38.4 percent of the loan portfolio, at December 31, 2007. The average outstanding loan balance per borrower in the commercial loan portfolio at December 31, 2008 was $1.05 million. See also "Results of Operations—Net Interest Income."

        To grow and diversify its portfolio, the bank purchases and sells participations in loans. Included in this portfolio are purchased participations in shared national credits ("SNC"). As of December 31, 2008, purchased SNC commitments totaled $1.31 billion, or 7 percent of total loan commitments. Outstanding loan balances on purchased SNCs were $707.9 million, or 6 percent of total loans outstanding. At December 31, 2007, purchased SNC commitments totaled $1.31 billion, and outstanding balances totaled $495.5 million. The growth in the purchased SNC portfolio during 2008 was related to commercial credits.

        The commercial loan portfolio also includes $93.4 million of loans to borrowers in the for-sale housing industry not secured by real estate.

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        Following is a breakdown of commercial loans and lease financing to businesses engaged in the industries listed:

Commercial Loans and Leases by Industry

		December 31,
(in thousands)		2008			%		2007			%
Services (1)		$	1,000,811			20.9	$	908,755			20.4
Entertainment			853,239			17.8		795,281			17.8
Wholesale Trade			330,816			6.9		292,034			6.5
Manufacturing			419,527			8.8		375,580			8.4
Public Finance			240,665			5.0		187,322			4.2
Real estate owner/lessors (2)			494,832			10.3		541,702			12.1
Construction/development (2)			253,749			5.3		211,593			4.7
Finance and Insurance			598,117			12.5		525,290			11.8
Retail Trade			361,019			7.5		334,103			7.5
Other			230,790			5.0		287,648			6.6
	Total	$	4,783,565			100.0	$	4,459,308			100.0
Nonaccrual loans		$	46,238				$	17,103
Percentage of total commercial loans			0.97	%				0.38	%

(1)

Professional offices, hospitals, health providers, transportation, schools, recreation, religious, etc.

(2)

Not secured by real estate.

Residential Mortgage

        Residential mortgage loans, which comprised 27.4 percent of total loans in 2008, grew $238.5 million, or 8 percent, to $3.41 billion at December 31, 2008. In 2008, 100 percent of the portfolio was originated internally, primarily as an accommodation to existing clients. The Company has not purchased any loans since 1997, except for CRA purposes. The residential first mortgage loans originated internally have a weighted average loan-to-value ("LTV") ratio of 50 percent at origination. The average outstanding loan balance per borrower in the residential mortgage loan portfolio at December 31, 2008 was $0.9 million. At December 31, 2008, residential mortgage loans totaling approximately $3.2 million were on nonaccrual.

Commercial Real Estate Mortgage

        Commercial real estate mortgages, representing 17.6 percent of the loan portfolio, were comprised of 94.5 percent commercial properties and 5.5 percent multi-family condominium or apartment loans. The average outstanding loan balance per borrower in the commercial real estate mortgage portfolio at

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December 31, 2008 was $1.9 million. A breakdown of real estate mortgage loans by collateral type follows:

Commercial Real Estate Mortgage Loans by Collateral Type

		December 31,
(in thousands)		2008			%		2007			%
Industrial		$	959,854			43.9	$	887,669			45.4
Office buildings			443,545			20.3		331,872			17.0
Shopping centers			218,832			10.0		164,187			8.4
Land, agriculture			46,578			2.1		47,134			2.4
Non-Profit (religious/schools)			24,621			1.1		68,970			3.5
Auto dealership			50,486			2.3		95,725			4.9
Condominiums/apartments			119,117			5.5		79,639			4.1
Other			321,655			14.8		279,343			14.3
	Total	$	2,184,688			100.0	$	1,954,539			100.0
Nonaccrual loans		$	8,924				$	1,621
Percentage of total commercial real estate mortgage loans			0.41	%				0.08	%

Real Estate Construction

        The real estate construction portfolio includes land loans and loans to develop or construct and sell residential and commercial properties. These loans represent 10.1 percent of the Company's $12.44 billion loan portfolio and a significant majority of the loans are guaranteed. The real estate construction portfolio includes approximately $359.1 million of loans to borrowers in the for-sale housing industry. Real estate construction loans are made on the basis of the economic viability for the specific project, the cash flow resources of the developer, the developer's equity in the project, and the underlying financial strength of the borrower. The Company's policy is to monitor each loan with respect to the project's incurred costs, sales price and absorption. The average outstanding loan balance per borrower in the real estate construction loan portfolio at December 31, 2008 was $6.5 million. Following is a breakdown of real estate construction loans by collateral type:

Real Estate Construction Loans by Collateral Type

		December 31,
(in thousands)		2008			%		2007			%
Industrial		$	182,746			14.6	$	151,726			10.6
1-4 family			181,863			14.5		359,473			25.1
Office buildings			139,463			11.1		181,087			12.7
Land, commercial			233,513			18.7		240,273			16.8
Land, residential			177,269			14.2		164,090			11.5
Shopping centers			139,021			11.1		163,863			11.5
Condominiums/apartments			138,339			11.0		119,002			8.3
Other			59,820			4.8		50,247			3.5
	Total	$	1,252,034			100.0	$	1,429,761			100.0
Nonaccrual loans		$	149,536				$	55,632
Percentage of total real estate construction loans			11.94	%				3.89	%

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Equity Lines of Credit

        Equity lines of credit which comprised 5.1 percent of total loans at December 31, 2008 are made primarily to existing clients. The average LTV at origination for these loans was 54 percent. The average outstanding loan balance per borrower in the equity lines of credit portfolio at December 31, 2008 was $0.3 million. At December 31, 2008, equity lines of credit totaling approximately $1.9 million were on nonaccrual.

Installment

        Installment loans consist primarily of loans to individuals for personal purchases. At December 31, 2008 installment loans comprised 1.4 percent of total loans. The average outstanding loan balance per borrower in the installment loan portfolio at December 31, 2008 was $0.1 million. Installment loans totaling approximately $1.4 million were on nonaccrual.

Portfolio Characteristics

        The Company's lending activities are predominantly in California, and to a lesser extent, New York and Nevada. Concentrations of credit risk arise when a number of clients are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. Although the Company has a diversified loan portfolio, a substantial portion of the loan portfolio and credit performance depends on the economic stability of Southern California. Credit performance also depends, to a lesser extent, on economic conditions in the San Francisco Bay area, New York and Nevada.

        Inherent in any loan portfolio are risks associated with certain types of loans. The Company assesses and manages credit risk on an ongoing basis through diversification guidelines, lending limits, credit review and approval policies, and internal monitoring. As part of the control process, an independent credit risk review department regularly examines the Company's loan portfolio and other credit-related products, including unused commitments and letters of credit. In addition to this internal credit process, the Company's loan portfolio is subject to examination by external regulators in the normal course of business. Credit quality is influenced by underlying trends in the economic and business cycle. The Company also seeks to manage and control its risk through diversification of the portfolio by type of loan, industry concentration, and type of borrower as well as specific maximum loan-to-value guidelines at origination for various categories of real estate-related loans other than residential first mortgage loans. These ratios are as follows:

LTV Guidelines

Category of Real Estate Collateral	LTV Guidelines
1-4 family		75	%
Multi-family		75
Equity lines of credit		75
Industrial		75
Shopping centers		75
Churches/religious		65
Office building		70
Other improved property		65
Acquisition and development		65
Land, nonresidential		50

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        The Company's loan policy provides that any term loan on non-owner occupied properties should have minimum debt service coverage at origination ranging from 1.20 to 1 to 1.30 to 1 depending on property type. Any exception to these guidelines requires approval at higher levels of authority based on the type of exception. Exceptions are reviewed by the Credit Policy Committee of the Bank.

        The federal banking regulatory agencies issued final guidance on December 6, 2006 on risk management practices for financial institutions with high or increasing concentrations of commercial real estate ("CRE") loans on their balance sheets. The regulatory guidance reiterates the need for sound internal risk management practices for those institutions that have experienced rapid growth in CRE lending, have notable exposure to specific types of CRE, or are approaching or exceeding the supervisory criteria used to evaluate the CRE concentration risk, but the guidance is not to be construed as a limit for CRE exposure. The supervisory criteria are: total reported loans for construction, land development and other land represent 100 percent of the institution's total risk-based capital and both total CRE loans represent 300 percent or more of the institution's total risk-based capital and the institution's CRE loan portfolio and has increased 50 percent or more within the last 36 months. As of December 31, 2008, total loans for construction, land development and other land represented 86 percent of total risk-based capital; total CRE loans represented 204 percent of total risk-based capital and the total portfolio of loans for construction, land development, other land and CRE increased 53 percent over the last 36 months.

        The Company has no residential mortgage loans with high LTVs at origination (as defined in FDICIA as greater than 90 percent), loans with option ARM terms, as defined in SOP 94-6-1, "Terms of Loan Products that May Give Rise to a Concentration of Credit Risk," or that allow for negative amortization. The Company does offer interest-only loans. As of December 31, 2008, there were interest-only residential mortgages totaling approximately $873.7 million and home equity lines of credit totaling approximately $635.3 million. As of December 31, 2007, there were interest-only residential mortgages totaling approximately $612.9 million and home equity lines of credit totaling approximately $432.5 million.

        Floating-rate loans comprised 63.6 percent of the total loan portfolio at December 31, 2008 compared to 61.1 percent at December 31, 2007. At December 31, 2008, 75.3 percent of outstanding commercial loans, including lease financing, 36.0 percent of commercial real estate loans, 45.5 percent of residential real estate loans, and 64.1 percent of installment loans were floating-rate loans. Hybrid loans, which convert from fixed to floating rates, are included in floating-rate loans.

        One of the significant risks associated with real estate lending involves environmental hazards on or in property affiliated with the loan. The Company analyzes such risks through an evaluation performed by the Bank's Environmental Risk Management Unit for all loans secured by real estate. A Phase I Environmental Site Assessment ("ESA") report may be required if the evaluation determines it appropriate. Other reasons would include the industrial use of environmentally sensitive substances or the proximity to other known environmental problems. A more comprehensive Phase II ESA report is required in certain cases, depending on the outcome of the Phase I report.

        The loan maturities shown in the table below are based on contractual maturities. As is customary in the banking industry, loans that meet sound underwriting criteria can be renewed by mutual agreement between the Company and the borrower. Because the Company is unable to estimate the extent to which its borrowers will renew their loans, the table is based on contractual maturities.

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Loan Maturities

			December 31, 2008
(in thousands)			Commercial		Residential Mortgages		Commercial Real Estate Mortgages		Real Estate Construction		Equity Lines of Credit		Installment		Total
Aggregate maturities of balances due:
In one year or less
	Interest rate—floating		$	1,981,526	$	9,485	$	188,194	$	928,016	$	23,153	$	99,727	$	3,230,101
	Interest rate—fixed			166,579		2,486		11,526		15,780		—		644		197,015
After one year but within five years
	Interest rate—floating			1,281,901		19,001		250,525		270,372		55,868		5,248		1,882,915
	Interest rate—fixed			474,854		34,104		63,269		9,502		—		11,643		593,372
After five years
	Interest rate—floating			338,591		1,526,961		347,279		25,582		556,304		6,463		2,801,180
	Interest rate—fixed			540,114		1,822,831		1,323,895		2,782		—		50,054		3,739,676
		Total loans	$	4,783,565	$	3,414,868	$	2,184,688	$	1,252,034	$	635,325	$	173,779	$	12,444,259

Asset Quality

Allowance for Loan and Lease Losses and Reserve for Off-Balance Sheet Credit Commitments

        A consequence of lending activities is that losses may be experienced. The amount of such losses will vary from time to time depending upon the risk characteristics of the loan portfolio as affected by economic conditions, changing interest rates, and the financial performance of borrowers. The allowance for loan and lease losses and the reserve for off-balance sheet credit commitments which provide for the risk of losses inherent in the credit extension process, are increased by the provision for credit losses charged to operating expense and allowances acquired through acquisitions. The allowance for loan and lease losses is decreased by the amount of charge-offs, net of recoveries. There is no exact method of predicting specific losses or amounts that ultimately may be charged off on particular segments of the loan portfolio.

        The Company has an internal credit risk analysis and review staff that issues reports to the Audit and Risk Committee of the Board of Directors and continually reviews loan quality. This analysis includes a detailed review of the classification and categorization of problem loans, potential problem loans and loans to be charged off, an assessment of the overall quality and collectibility of the portfolio, consideration of the credit loss experience, trends in problem loans and concentration of credit risk, as well as current economic conditions, particularly in California. Management then evaluates the allowance, determines its appropriate level and the need for additional provisions, and presents its analysis to the Audit and Risk Committee which ultimately reviews and approves management's recommendation.

        The provision is the expense recognized in the consolidated statements of income to adjust the allowance and reserve to the level deemed appropriate by management, as determined through application of the Company's allowance methodology procedures. See "Critical Accounting Policies" on page 36.

        In accordance with the Company's allowance for loan and lease losses methodology, the Company recorded $127.0 million and $20.0 million of expense through the provision for credit losses for the years ended December 31, 2008 and 2007, respectively, and $0.6 million of income through the provision for credit losses for the year ended December 31, 2006. For additional discussion of the provision for credit losses see "Results of Operations—Provision for Credit Losses."

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        The following table summarizes the activity in the allowance for loan and lease losses and the reserve for off-balance sheet credit commitments for the five years ended December 31:

(in thousands)			2008			2007			2006			2005			2004
Loans and leases outstanding			$	12,444,259		$	11,630,638		$	10,386,005		$	9,265,602		$	8,481,277
Average amount of loans and leases outstanding			$	12,088,715		$	11,057,411		$	9,948,363		$	8,875,358		$	8,106,657
Balance of allowance for loan and lease losses, beginning of year			$	168,523		$	155,342		$	153,983		$	148,568		$	156,015
Loans charged-off:
	Commercial			(25,257	)		(7,768	)		(7,320	)		(6,575	)		(24,265	)
	Residential mortgages			—			—			—			—			(3	)
	Commercial real estate mortgages			(552	)		(297	)		(94	)		(1,898	)		(3,920	)
	Real estate construction			(44,097	)		(5,929	)		(684	)		—			—
	Equity lines of credit			—			(50	)		(11	)		—			—
	Installment			(1,116	)		(187	)		(62	)		(95	)		(337	)
		Total loans charged-off		(71,022	)		(14,231	)		(8,171	)		(8,568	)		(28,525	)
Recoveries of loans previously charged-off:
	Commercial			2,034			5,265			9,482			16,055			21,628
	Residential mortgages			62			—			—			3			14
	Commercial real estate mortgages			—			11			1,305			345			1,046
	Real estate construction			348			438			68			1,300			100
	Equity lines of credit			—			—			—			41			3
	Installment			100			40			113			84			67
		Total recoveries		2,544			5,754			10,968			17,828			22,858
Net loans (charged-off)/recovered				(68,478	)		(8,477	)		2,797			9,260			(5,667	)
Provision for credit losses				127,000			20,000			(610	)		—			—
Transfers to reserve for off-balance sheet credit commitments				(2,999	)		(2,855	)		(828	)		(3,845	)		(1,780	)
Allowance of acquired institution				—			4,513			—			—			—
Balance, end of year			$	224,046		$	168,523		$	155,342		$	153,983		$	148,568
Net (charge-offs)/recoveries to average loans and leases				(0.57	)%		(0.08	)%		0.03	%		0.10	%		(0.07	)%
Ratio of allowance for loan and lease losses to total period-end loans and leases				1.80	%		1.45	%		1.50	%		1.66	%		1.75	%
Reserve for off-balance sheet credit commitments
Balance, beginning of the year			$	19,704		$	16,424		$	15,596		$	11,751		$	9,971
Recovery of prior charge-off				—			(67	)		—			—			—
Reserve of acquired institution				—			492			—			—			—
Provision for credit losses/transfers				2,999			2,855			828			3,845			1,780
Balance, end of the year			$	22,703		$	19,704		$	16,424		$	15,596		$	11,751

        Net loan charge-offs for 2008 and 2007 were $68.5 million or 0.57 percent of average loans and leases and $8.5 million or 0.08 percent of average loans and leases, respectively. Net loan recoveries for 2006 were $2.8 million or 0.03 percent of average loans and leases. Loans to homebuilders for

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residential land acquisition, development and construction accounted for 46 percent of the 2008 net charge-offs.

        The allowance for loan and lease losses as a percentage of total loans and leases was 1.80 percent, 1.45 percent, and 1.50 percent at December 31, 2008, 2007, and 2006, respectively. The allowance for loan and lease losses as a percentage of nonperforming assets was 100.7 percent, 223.0 percent, and 743.9 percent at December 31, 2008, 2007, and 2006, respectively. See "Nonaccrual, Past Due, and Restructured Loans" below for additional discussion of nonperforming and restructured loans.

        Based on an evaluation of individual credits, previous loan and lease loss experience, management's evaluation of the current loan portfolio, and current economic conditions, management has allocated the allowance for loan and lease losses as shown for the past five years in the table below:

Allocation of Allowance for Loan and Lease Losses

		Allowance amount										Percent of loans to total loans
(in thousands)		2008		2007		2006		2005		2004		2008			2007			2006			2005			2004
Commercial		$	100,485	$	81,221	$	82,984	$	82,120	$	79,093		38	%		38	%		39	%		38	%		36	%
Residential mortgages			9,140		9,255		8,778		8,423		7,967		27			27			28			29			27
Commercial real estate mortgages			44,041		33,241		35,630		37,010		39,549		18			17			16			20			22
Real estate construction			62,901		38,455		17,309		15,082		14,994		10			12			11			8			10
Equity lines of credit			3,602		2,997		6,951		6,500		4,964		5			4			4			4			3
Installment			3,877		3,354		3,690		4,848		2,001		2			2			2			1			2
	Total	$	224,046	$	168,523	$	155,342	$	153,983	$	148,568		100	%		100	%		100	%		100	%		100	%

        While the allowance is allocated by loan type above, the allowance is general in nature and is available for the portfolio in its entirety. The increase in allowance for 2008 reflects the continued upheaval in the credit markets. Refer to the Recent Developments section of this report for further discussion of the credit markets. In 2007, increased allocations to real estate constructions loans were due to the ongoing weakness in the housing sector.

        At December 31, 2008, there were $204.5 million of impaired loans included in nonaccrual loans that had an allowance of $25.6 million allocated to them. On a comparable basis, at December 31, 2007, there were $71.4 million of impaired loans which had an allowance of $8.4 million allocated to them.

        Loans, other than those included in large groups of smaller-balance homogeneous loans, are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement, including scheduled interest payments. The assessment for impairment occurs when and while such loans are on nonaccrual, or when the loan has been restructured. When a loan with unique risk characteristics has been identified as being impaired, the amount of impairment will be measured by the Company using discounted cash flows, except when it is determined that the primary (remaining) source of repayment for the loan is the operation or liquidation of the underlying collateral. In these cases, the current fair value of the collateral, reduced by costs to sell, will be used in place of discounted cash flows. As a final alternative, the observable market price of the debt may be used to assess impairment. Impaired loans with commitments of less than $500,000 are aggregated for the purpose of measuring impairment using historical loss factors as a means of measurement.

        If the measurement of the impaired loan is less than the recorded investment in the loan (including accrued interest, net deferred loan fees or costs and unamortized premium or discount), an impairment allowance is recognized by creating or adjusting the existing allocation of the allowance for

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loan and lease losses. The Company's policy is to record cash receipts on impaired loans first as reductions in principal and then as interest income.

Nonaccrual, Past Due, and Restructured Loans

        Total nonperforming assets (nonaccrual loans and OREO) were $222.5 million, or 1.79 percent of total loans and OREO at December 31, 2008, compared with $75.6 million, or 0.65 percent of total loans and OREO, at December 31, 2007. The Company had an OREO balance of $11.4 million at December 31, 2008 and no OREO balance at December 31, 2007. At December 31, 2008 and 2007, the Company had no troubled debt restructured.

        The following table presents information concerning nonaccrual loans, OREO and loans which are contractually past due 90 days or more as to interest or principal payments and still accruing:

			December 31,
(in thousands)			2008			2007			2006			2005			2004
Nonaccrual loans:
	Commercial		$	46,238		$	17,103		$	2,977		$	5,141		$	30,334
	Residential mortgages			3,171			387			—			294			94
	Commercial real estate mortgages			8,924			1,621			4,849			923			2,255
	Real estate construction			149,536			55,632			12,678			7,650			790
	Equity lines of credit			1,921			679			—			21			380
	Installment			1,352			139			379			371			785
		Total		211,142			75,561			20,883			14,400			34,638
OREO				11,388			—			—			—			—
Total nonaccrual loans and OREO			$	222,530		$	75,561		$	20,883		$	14,400		$	34,638
Total nonaccrual loans as a percentage of total loans and leases				1.70	%		0.65	%		0.20	%		0.16	%		0.41	%
Total nonaccrual loans and OREO as a percentage of total loans and leases and OREO				1.79			0.65			0.20			0.16			0.41
Allowance for loan and lease losses to total loans and leases				1.80			1.45			1.50			1.66			1.75
Allowance for loan and lease losses to nonaccrual loans				106.1			223.0			743.9			1,069.3			428.9
Loans past due 90 days or more on accrual status:
	Commercial		$	—		$	—		$	—		$	—		$	142
	Residential mortgages			663			—			—			—			—
	Other			—			1			337			—			—
		Total	$	663		$	1		$	337		$	—		$	142

        Company policy requires that a loan be placed on nonaccrual status if either principal or interest payments are 90 days past due, unless the loan is both well secured and in process of collection, or if full collection of interest or principal becomes uncertain, regardless of the time period involved.

        In addition to loans disclosed above as past due or nonaccrual, management also identified $201.8 million of loans to 38 borrowers as of February 19, 2009, where the ability to comply with the present loan payment terms in the future is questionable. However, the inability of the borrowers to comply with repayment terms was not sufficiently probable to place the loan on nonaccrual status at December 31, 2008, and the identification of these loans is not necessarily indicative of whether the loans will be placed on nonaccrual status. This amount was determined based on analysis of information known to management about the borrowers' financial condition and current economic

75

conditions. Management's classification of credits as nonaccrual, restructured or problems does not necessarily indicate that the principal is uncollectible in whole or part.

        The table below summarizes the changes in nonaccrual loans for the years ended December 31, 2008 and 2007:

Nonaccrual Loans

(in thousands)	2008			2007
Balance, beginning of the year	$	75,561		$	20,883
Loans placed on nonaccrual		276,845			85,724
Loans from acquisitions		—			50
Charge-offs		(53,252	)		(10,815	)
Loans returned to accrual status		(450	)		(4,134	)
Repayments (including interest applied to principal)		(63,563	)		(16,147	)
Transfers to OREO		(23,999	)		—
Balance, end of the year	$	211,142		$	75,561

        The additional interest income that would have been recorded from nonaccrual loans, if the loans had not been on nonaccrual status was $7.6 million, $3.8 million, and $2.5 million for the years ended December 31, 2008, 2007, and 2006, respectively. Interest payments received on nonaccrual loans are applied to principal unless there is no doubt as to ultimate full repayment of principal, in which case the interest payments are recognized as interest income. Interest collected on nonaccrual loans and applied to principal was $2.4 million, $1.4 million, and $1.1 million for the years ended December 31, 2008, 2007, and 2006, respectively. Interest income not recognized on nonaccrual loans reduced the net interest margin by 5, 2, and 1 basis points for the years ended December 31, 2008, 2007, and 2006, respectively.

Goodwill and Intangibles

        The following table summarizes the Company's goodwill and other intangible assets as of December 31, 2008 and December 31, 2007:

(in thousands)		December 31, 2007			Additions			Reductions			December 31, 2008
Goodwill		$	486,461		$	9,808		$	(2,870	)	$	493,399
Accumulated amortization			(33,981	)		—			—			(33,981	)
	Net goodwill	$	452,480		$	9,808		$	(2,870	)	$	459,418
Customer-Relationship Intangibles
Core deposit intangibles		$	47,127		$	—		$	—		$	47,127
Accumulated amortization			(29,999	)		(5,729	)		—			(35,728	)
Client advisory contracts			59,360			—			(20,698	)		38,662
Accumulated amortization			(8,841	)		(3,541	)		2,940			(9,442	)
	Net intangibles	$	67,647		$	(9,270	)	$	(17,758	)	$	40,619

        During 2008, the Company recorded a purchase accounting adjustment related to its May 2007 acquisition of Convergent Wealth that resulted in a reclassification of $9.3 million from client advisory contract intangibles to goodwill. There was a corresponding reduction in accumulated amortization of $0.9 million. Additionally, goodwill increased due to contingent consideration related to the acquisition of Independence Investments in accordance with the terms of the purchase agreement. The reduction

76

in goodwill includes a $2.1 million purchase accounting adjustment related to the February 2007 acquisition of BBNV.

        In addition to the Convergent Wealth adjustment discussed above, client advisory contract intangibles and accumulated amortization were reduced by $11.4 million and $2.0 million, respectively, due to an impairment write down related to a wealth management affiliate. Refer to Impairment Assessment below. Additions to accumulated amortization on customer-relationship intangibles reflect recurring amortization net of the $0.9 million adjustment related to Convergent Wealth. Customer relationship intangibles are amortized over their estimated lives. At December 31, 2008, the estimated aggregate amortization of intangibles for the years 2009 through 2013 is $6.2 million, $5.8 million, $5.3 million, $3.2 million, and $2.8 million, respectively.

Impairment Assessment

        Management completed an assessment of goodwill and intangibles for impairment during the fourth quarter of 2008. The goodwill assessment was completed at a reporting unit level. Fair values were determined using methods consistent with current industry practices for valuing similar types of companies. A market multiple of net income was used to value the Bank reporting unit. The fair values of the wealth management affiliates were largely based on multiples of distributable revenue. Based upon the analysis performed, the fair values of the reporting units exceeded their carrying value (including goodwill), therefore, management concluded that no impairment of goodwill existed at December 31, 2008. In light of the recent continuing decline in the stock market performance of financial services companies, including many whose book value per share substantially exceeds the quoted market price per share, management believes it will be necessary to continue to evaluate goodwill for impairment on a quarterly basis. Should such declines continue and recent market and economic conditions persist, it is possible that a future conclusion could be reached that all or a portion of the Company's goodwill was impaired, in which case a non-cash charge for the amount of such impairment would be recorded in operations. Such a charge, if any, would have no impact on tangible capital and would not affect the Company's "well-capitalized" designation.

        The assessment of customer-relationship intangibles for impairment was completed at the individual asset level. The fair value of core deposit intangibles was determined using market-based core deposit premiums from recent deposit sale transactions. The fair value of core deposit intangibles exceeded their carrying amount at December 31, 2008. For client advisory contract intangibles recorded by the wealth management affiliates, the undiscounted projected future cash flows associated with the client contracts was compared to their carrying value to determine whether there was impairment. It was determined that the contract intangible for one wealth management affiliate was impaired due to the loss of client contracts, including the loss of a significant amount of assets managed for the prior owner of the affiliate, as well as a significant decrease in the market value of assets under management. This contract intangible was written down by $9.4 million to zero at December 31, 2008. Management concluded that no other impairment of customer-relationship intangibles existed at December 31, 2008.

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Other Assets

        Other assets include the following:

		December 31,
(in thousands)		2008		2007
Accrued interest receivable		$	59,206	$	70,660
Other accrued income			20,363		24,768
Deferred compensation fund assets			43,090		50,336
Stock in government agencies			54,163		48,828
Private equity and alternative investments			35,633		28,391
Mark to market on derivatives			67,487		18,515
Other			70,188		58,592
	Total other assets	$	350,130	$	300,090

Off-Balance Sheet

        In the normal course of business, the Company is a party to financial instruments with off-balance sheet risk. These financial instruments include commitments to extend credit, letters of credit, and financial guarantees. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount reflected in the consolidated balance sheets. Commitments to extend credit are agreements to lend to a client as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since a portion of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each client's creditworthiness on a case-by-case basis.

        The Company had off-balance sheet loan commitments aggregating $5.34 billion at December 31, 2008, an increase from $5.28 billion at December 31, 2007. In addition, the Company had $660.8 million outstanding in bankers' acceptances and letters of credit of which $647.6 million relate to standby letters of credit at December 31, 2008. At December 31, 2007, bankers' acceptances and letters of credit were $840.2 million of which $822.1 million related to standby letters of credit. Substantially all of the Company's loan commitments are on a variable-rate basis and are comprised of real estate and commercial loan commitments.

        As of December 31, 2008, the Company had private equity fund and alternative investment commitments of $63.7 million, of which $40.9 million was funded. As of December 31, 2007, the Company had private equity fund and alternative investment commitments of $62.7 million, of which $33.0 million was funded. In addition, the Company had unfunded Affordable Housing Fund commitments of $21.2 million and $30.3 million as of December 31, 2008 and 2007, respectively.

        In addition to the commitments described above, the Company enters into other contractual obligations in the ordinary course of business. Certain of these obligations, such as time deposits and long-term debt, are recorded as liabilities in the consolidated financial statements. Other items, such as operating leases and agreements to purchase goods or services are only required to be disclosed. The following table summarizes the Company's contractual obligations at December 31, 2008, and provides the expected cash payments (not including interest) to be made in future periods to settle these obligations. Expected cash payments associated with time deposits and long-term debt are based on deposit maturity and principal payment dates, respectively. Additional details regarding these obligations are provided in the footnotes to the financial statements as referenced in the table.

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Contractual Obligations

	Minimum Contractual Payments by Period
(in thousands)	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Time deposits (Note 13)	$	1,676,703	$	1,573,759	$	85,462	$	16,044	$	1,438
Long-term debt (Note 13)		376,429		—		150,334		220,940		5,155
Operating leases (Note 8)		233,228		32,165		60,241		48,184		92,638
Purchases of affiliate interests (Note 16)		20,614		3,409		5,835		4,023		7,347
Purchase obligations (1)		79,781		21,638		30,112		14,597		13,434
Contingent tax reserves (Note 9)		11,633		11,633		—		—		—
Total contractual obligations	$	2,398,388	$	1,642,604	$	331,984	$	303,788	$	120,012

(1)

Represents agreements to purchase data processing and software services.

Deposits and Borrowed Funds

        Core deposits, which include noninterest-bearing deposits and interest-bearing deposits excluding time deposits of $100,000 and over, provide a stable source of low cost funding. Average core deposits increased to $10.60 billion in 2008 compared with $10.36 billion in 2007. The increase in average deposits is largely due to the growth of interest-bearing and time deposits, offset by a decline in title and escrow deposits due to a slowdown in the housing and commercial real estate industries.

        Certificates of deposit of $100,000 or more totaled $1.44 billion at December 31, 2008, of which $474.0 million mature within three months, $885.2 million mature within four months to one year and $82.8 million mature beyond one year.

        At December 31, 2008 and 2007, the aggregate amount of deposits by foreign depositors in domestic offices totaled $441.2 million and $87.1 million, respectively. Brokered deposits were $20.2 million at December 31, 2008 and 2007.

        Borrowed funds provide an additional source of funding for loan growth. The average balance of short-term borrowings increased to $1.77 billion for 2008 from $816.0 million for 2007. Short-term borrowings include federal funds purchased, securities sold under agreements to repurchase, treasury tax and loan notes and FHLB borrowings. Short-term borrowings increased in 2008 to fund loan growth and to replace maturing higher cost certificates of deposits. The average balance of other borrowings was $398.6 million for 2008 compared with $491.5 million for 2007. Other borrowings include ten-year subordinated notes issued by the Bank and senior notes issued by the Corporation. The notes have maturity dates ranging from September 2011 to February 2013. The subordinated notes qualify as capital for purposes of determining the Company's risk-based capital ratios. Further information on borrowed funds is provided in Note 13 of the Consolidated Financial Statements on page A-44.

Capital

        At December 31, 2008, the Corporation's and the Bank's Tier 1 capital, which is comprised of common shareholders' equity as modified by certain regulatory adjustments, amounted to $1.63 billion and $1.22 billion, respectively. At December 31, 2007, the Corporation's and the Bank's Tier 1 capital amounted to $1.20 billion and $1.18 billion, respectively. The increase in the Corporation's Tier 1 capital compared with the prior year-end is largely due to the issuance of preferred stock under the Treasury's TARP Capital Purchase Program. The preferred stock qualified as Tier 1 capital for regulatory reporting purposes.

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        On November 21, 2008, City National Corporation received aggregate proceeds of $400 million from the Treasury under the TARP Capital Purchase Program in exchange for 400,000 shares of cumulative perpetual preferred stock and a 10-year warrant to purchase up to 1,128,668 shares of the Company's common stock at an exercise price of $53.16 per share. The preferred stock and warrant were recorded in equity on a relative fair value basis at the time of issuance. The preferred stock was valued by calculating the present value of expected cash flows and the warrant was valued using an option valuation model. The allocated values of the preferred stock and warrant were approximately $389.9 million and $10.1 million, respectively. The preferred stock will be accreted to the redemption price of $400 million over five years. Cumulative dividends on the preferred stock are payable quarterly at the rate of 5 percent for the first five years and increasing to 9 percent thereafter. The effective pre-tax cost to the Company for participating in the TARP Capital Purchase Program is approximately 9.5 percent, consisting of 8.6 percent for dividends and 0.9 percent for the accretion on preferred stock, and is based on the statutory tax rate. The preferred stock may be redeemed by the Corporation after three years. Prior to the end of three years, subject to the provisions of ARRA described below, the preferred stock may be redeemed by the Corporation only with proceeds from the sale of qualifying equity securities of the Corporation which results in aggregate gross proceeds to the Corporation of not less than 25% of the issue price of the preferred stock. The warrant has a 10-year term and is immediately exercisable upon its issuance, with an exercise price, subject to anti-dilution adjustments, equal to $53.16 per share of the common stock. If the Company receives aggregate proceeds of at least $400 million from sales of Tier 1 qualifying perpetual preferred stock prior to December 31, 2009, the number of shares to be delivered upon settlement of the warrant will be reduced by 50 percent.

        ARRA was signed into law on February 17, 2009. ARRA contains a wide variety of programs intended to stimulate the economy and provide for extensive infrastructure, energy, health, and education needs. In addition, ARRA imposes certain new executive compensation and corporate expenditure limits on all current and future TARP recipients, including the Corporation, until the institution has repaid the Treasury, which is now permitted under ARRA without the need to raise new capital, subject to the Treasury's consultation with the recipient's appropriate regulatory agency. When the institution has repaid the Treasury, the Treasury is to liquidate the warrant at the current market price.

        The following table presents the regulatory standards for well capitalized institutions and the capital ratios for the Corporation and the Bank at December 31, 2008, 2007, and 2006:

	Regulatory Well Capitalized Standards			December 31,
				2008			2007			2006
City National Corporation
Tier 1 leverage		N/A	%		10.44	%		7.97	%		8.81	%
Tier 1 risk-based capital		6.00			11.71			9.31			11.09
Total risk-based capital		10.00			13.40			11.27			13.60
City National Bank
Tier 1 leverage		5.00	%		7.87	%		7.95	%		9.04	%
Tier 1 risk-based capital		6.00			8.81			9.28			11.38
Total risk-based capital		10.00			10.50			11.24			13.89

        Shareholders' equity to period-end assets was 12.42 percent and 10.42 percent as of December 31, 2008 and 2007, respectively. Common shareholders' equity to period-end assets was 10.05 percent and 10.42 percent as of December 31, 2008 and 2007, respectively. Tangible common shareholders' equity to period-end tangible assets was 7.23 percent and 7.39 percent as of December 31, 2008 and 2007, respectively.

80

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

        We have made forward-looking statements in this document about the company, for which the company claims the protection of the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

        Forward-looking statements are based on management's knowledge and belief as of today and include information concerning the company's possible or assumed future financial condition, and its results of operations, business and earnings outlook. These forward-looking statements are subject to risks and uncertainties. A number of factors, some of which are beyond the company's ability to control or predict, could cause future results to differ materially from those contemplated by such forward-looking statements. These factors include (1) difficult and adverse conditions in the global and domestic capital and credit markets, (2) continued volatility and further deterioration of the capital and credit markets, (3) significant changes in banking laws or regulations, including, without limitation, as a result of the Emergency Economic Stabilization Act and the creation of and possible amendments to the Troubled Asset Relief Program (TARP), including the Capital Purchase Program and related executive compensation requirements, (4) continued uncertainty about the impact of TARP and other recent federal programs on the financial markets including levels of volatility and credit availability, (5) a more adverse than expected decline or continued weakness in general business and economic conditions, either nationally, regionally or locally in areas where the company conducts its business, which may affect, among other things, the level of nonperforming assets, charge-offs and provision expense, (6) unprecedented volatility in equity, fixed income and other market valuations, (7) changes in market rates and prices which may adversely impact the value of financial products including securities, loans, deposits, debt and derivative financial instruments, and other similar financial instruments, (8) changes in the interest rate environment and market liquidity which may reduce interest margins and impact funding sources, (9) increased competition in the company's markets, (10) changes in the financial performance and/or condition of the company's borrowers, (11) a substantial and permanent loss of either client accounts and/or assets under management at the company's investment advisory affiliates or its wealth management division, (12) soundness of other financial institutions which could adversely affect the company, (13) increases in Federal Deposit Insurance Corporation premiums due to market developments and regulatory changes, (14) protracted labor disputes in the company's markets, (15) earthquake, fire or other natural disasters affecting the condition of real estate collateral, (16) the effect of acquisitions and integration of acquired businesses and de novo branching efforts, (17) the impact of changes in regulatory, judicial or legislative tax treatment of business transactions, (18) changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies, and (19) the success of the company at managing the risks involved in the foregoing.

        Forward-looking statements speak only as of the date they are made, and the company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the statements are made, or to update earnings guidance, including the factors that influence earnings.

        For a more complete discussion of these risks and uncertainties, see Part I, Item 1A, titled "Risk Factors."

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QUARTERLY RESULTS

        The following table summarizes quarterly operating results for 2008 and 2007:

2008 Quarterly Operating Results (Unaudited)

		Quarter ended
(in thousands)		March 31,		June 30,			September 30,			December 31,			Total
Interest income		$	207,752	$	193,707		$	195,606		$	187,623		$	784,688
Interest expense			59,587		43,539			42,802			38,864			184,792
Net interest income			148,165		150,168			152,804			148,759			599,896
Provision for credit losses			17,000		35,000			35,000			40,000			127,000
Net interest income after provision for credit losses			131,165		115,168			117,804			108,759			472,896
Noninterest income			78,847		81,881			82,550			74,497			317,775
Impairment loss on securities			—		—			(31,936	)		(17,344	)		(49,280	)
Gain (loss) on sale of securities			969		(417	)		(536	)		(1,527	)		(1,511	)
Noninterest expense			139,841		139,256			144,597			158,447			582,141
Minority interest			3,306		2,262			1,160			(1,350	)		5,378
Income before taxes			67,834		55,114			22,125			7,288			152,361
Income taxes			23,847		19,630			5,574			(1,646	)		47,405
Net income		$	43,987	$	35,484		$	16,551		$	8,934		$	104,956
	Less: Dividends on preferred stock		—		—			—			2,445			2,445
Net income available to common shareholders		$	43,987	$	35,484		$	16,551		$	6,489		$	102,511
Net income per common share, basic		$	0.92	$	0.74		$	0.35		$	0.13		$	2.14
Net income per common share, diluted		$	0.91	$	0.73		$	0.34		$	0.13		$	2.11

2007 Quarterly Operating Results (Unaudited)

	Quarter ended
(in thousands)	March 31,		June 30,		September 30,			December 31,		Total
Interest income	$	214,241	$	225,825	$	230,066		$	223,969	$	894,101
Interest expense		66,972		72,921		76,340			69,596		285,829
Net interest income		147,269		152,904		153,726			154,373		608,272
Provision for credit losses		—		—		—			20,000		20,000
Net interest income after provision for credit losses		147,269		152,904		153,726			134,373		588,272
Noninterest income		65,679		72,822		83,749			82,326		304,576
Gain (loss) on sale of securities		269		866		(2,516	)		7		(1,374	)
Noninterest expense		121,713		130,315		135,186			142,031		529,245
Minority interest		2,076		2,325		2,211			2,244		8,856
Income before taxes		89,428		93,952		97,562			72,431		353,373
Income taxes		32,883		34,799		37,469			25,509		130,660
Net income	$	56,545	$	59,153	$	60,093		$	46,922	$	222,713
Net income per common share, basic	$	1.18	$	1.22	$	1.24		$	0.98	$	4.62
Net income per common share, diluted	$	1.15	$	1.19	$	1.22		$	0.96	$	4.52

82

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

        Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Company's internal control over financial reporting is designed by, or under the supervision of the Company's principal executive and principal financial officers and effected by the Company's Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company's internal control over financial reporting includes those policies and procedures that:

        (i)    pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

        (ii)   provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

        (iii)  provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

        Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

        The Company's management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2008, using the criteria for effective internal control over financial reporting set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control-Integrated Framework. Based on this assessment, management believes that, as of December 31, 2008, the Company's internal control over financial reporting is effective.

        KPMG LLP, the independent registered public accounting firm that audited the Company's consolidated financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2008, has issued an audit report on the effectiveness of the Company's internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board. That report appears on page A-2.

A-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of
City National Corporation:

        We have audited City National Corporation's (the Corporation) internal control over financial reporting as of December 31, 2008, based on criteria established in the Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Corporation's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Controls Over Financial Reporting. Our responsibility is to express an opinion on the Corporation's internal control over financial reporting based on our audit.

        We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

        A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

        Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

        In our opinion, City National Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008, based on criteria established in the Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

        We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of City National Corporation and subsidiaries as of December 31, 2008 and 2007, and the related consolidated statements of income, shareholders' equity and comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 2008, and our report dated February 26, 2009 expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

Los Angeles, California
February 26, 2009

A-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of
City National Corporation:

        We have audited the accompanying consolidated balance sheets of City National Corporation and subsidiaries (the Corporation) as of December 31, 2008 and 2007 and the related consolidated statements of income, shareholders' equity and comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 2008. These consolidated financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

        We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of City National Corporation and subsidiaries as of December 31, 2008 and 2007 and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2008, in conformity with U.S. generally accepted accounting principles.

        We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Corporation's internal control over financial reporting as of December 31, 2008, based on criteria established in the Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 26, 2009 expressed an unqualified opinion on the effectiveness of the Corporation's internal control over financial reporting,

        As discussed in Note 1 to the consolidated financial statements, in 2008 City National Corporation changed its method of accounting for fair value, and in 2007 City National Corporation changed its method of accounting for uncertainty in income taxes.

/s/ KPMG LLP

Los Angeles, California
February 26, 2009

A-3

CITY NATIONAL CORPORATION

CONSOLIDATED BALANCE SHEETS

				December 31,
(in thousands, except per share amounts)				2008			2007
Assets
	Cash and due from banks			$	279,921		$	365,918
	Due from banks—interest-bearing				144,344			88,151
	Securities available-for-sale—cost $2,239,184 and $2,484,903 at December 31, 2008 and December 31, 2007, respectively:
		Securities pledged as collateral			223,506			212,233
		Held in portfolio			1,921,364			2,250,422
	Trading account securities				295,598			293,355
	Loans and leases				12,444,259			11,630,638
	Less allowance for loan and lease losses				224,046			168,523
		Net loans and leases			12,220,213			11,462,115
	Premises and equipment, net				131,294			118,067
	Deferred tax asset				226,854			129,403
	Goodwill				459,418			452,480
	Customer-relationship intangibles, net				40,619			67,647
	Bank-owned life insurance				74,575			72,220
	Affordable housing investments				74,577			73,640
	Customers' acceptance liability				1,714			3,549
	Other real estate owned				11,388			—
	Other assets				350,130			300,090
		Total assets		$	16,455,515		$	15,889,290
Liabilities
	Demand deposits			$	6,140,619		$	5,858,497
	Interest checking deposits				988,313			879,062
	Money market deposits				3,699,900			3,421,691
	Savings deposits				146,590			135,519
	Time deposits-under $100,000				234,669			220,928
	Time deposits-$100,000 and over				1,442,033			1,306,808
		Total deposits			12,652,124			11,822,505
	Federal funds purchased and securities sold under repurchase agreements				908,157			1,544,411
	Other short-term borrowings				124,500			100,000
	Current portion of subordinated debt				—			115,850
	Subordinated debt				161,595			157,709
	Long-term debt				246,554			233,465
	Reserve for off-balance sheet credit commitments				22,703			19,704
	Other liabilities				262,923			204,814
	Acceptances outstanding				1,714			3,549
		Total liabilities			14,380,270			14,202,007
Minority interest in consolidated subsidiaries—includes redeemable minority interests with a redemption value of $20,614 and $26,065 at December 31, 2008 and December 31, 2007, respectively					31,231			31,676
Commitments and contingencies
Shareholders' Equity
	Preferred Stock; 5,000,000 shares authorized; 400,000 shares issued; aggregate liquidation preference of $400,000 as of December 31, 2008				390,089			—
	Common Stock, par value $1.00 per share; 75,000,000 shares authorized; 50,961,457 and 50,824,178 shares issued at December 31, 2008 and December 31, 2007, respectively				50,961			50,824
	Additional paid-in capital				428,098			420,168
	Accumulated other comprehensive loss				(48,022	)		(9,349	)
	Retained earnings				1,379,624			1,369,999
	Treasury shares, at cost—2,413,039 and 2,588,299 shares at December 31, 2008 and December 31, 2007, respectively				(156,736	)		(176,035	)
		Total common shareholders' equity			1,653,925			1,655,607
			Total shareholders' equity		2,044,014			1,655,607
		Total liabilities and shareholders' equity		$	16,455,515		$	15,889,290

See accompanying Notes to Consolidated Financial Statements.

A-4

CITY NATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

			For the year ended December 31,
(in thousands, except per share amounts)			2008			2007			2006
Interest Income
	Loans and leases		$	676,421		$	764,441		$	672,018
	Securities available-for-sale			104,356			122,545			148,896
	Trading account securities			1,854			3,825			2,715
	Due from banks—interest-bearing			1,896			2,604			1,161
	Federal funds sold and securities purchased under resale agreements			161			686			1,525
		Total interest income		784,688			894,101			826,315
Interest Expense
	Deposits			122,990			214,680			159,024
	Federal funds purchased and securities sold under repurchase agreements			27,592			32,491			26,463
	Subordinated debt			6,916			16,272			15,399
	Other long-term debt			9,295			14,728			12,989
	Other short-term borrowings			17,999			7,658			6,530
		Total interest expense		184,792			285,829			220,405
Net interest income				599,896			608,272			605,910
	Provision for credit losses			127,000			20,000			(610	)
	Net interest income after provision for credit losses			472,896			588,272			606,520
Noninterest Income
	Trust and investment fees			132,214			140,753			107,462
	Brokerage and mutual fund fees			73,446			60,279			50,358
	Cash management and deposit transaction charges			48,307			35,261			31,631
	International services			32,449			30,399			26,174
	Bank-owned life insurance			2,752			2,690			2,996
	(Loss) gain on sale of other assets			(353	)		5,989			2,750
	Loss on sale of securities			(1,511	)		(1,374	)		(4,500	)
	Impairment loss on securities			(49,280	)		—			—
	Other			28,960			29,205			25,499
		Total noninterest income		266,984			303,202			242,370
Noninterest Expense
	Salaries and employee benefits			357,015			331,091			295,151
	Net occupancy of premises			49,514			43,538			40,241
	Legal and professional fees			32,842			35,975			34,998
	Information services			26,969			23,364			21,830
	Depreciation and amortization			22,201			20,932			19,062
	Marketing and advertising			22,897			21,837			18,654
	Office services			12,404			12,295			10,751
	Amortization of intangibles			17,738			8,854			5,284
	Equipment			3,144			3,249			2,812
	Other real estate owned			569			—			—
	Other operating			36,848			28,110			27,263
		Total noninterest expense		582,141			529,245			476,046
Minority interest expense				5,378			8,856			5,958
	Income before income taxes			152,361			353,373			366,886
	Income taxes			47,405			130,660			133,363
Net income			$	104,956		$	222,713		$	233,523
		Less: Dividends on preferred stock		2,445			—			—
Net income available to common shareholders			$	102,511		$	222,713		$	233,523
	Net income per common share, basic		$	2.14		$	4.62		$	4.82
	Net income per common share, diluted		$	2.11		$	4.52		$	4.66
	Shares used to compute net income per common share, basic			47,930			48,234			48,477
	Shares used to compute net income per common share, diluted			48,570			49,290			50,063
	Dividends per common share		$	1.92		$	1.84		$	1.64

See accompanying Notes to Consolidated Financial Statements.

A-5

CITY NATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

			For the year ended December 31,
(in thousands)			2008			2007			2006
Cash Flows From Operating Activities
Net income			$	104,956		$	222,713		$	233,523
Adjustments to net income:
	Provision for credit losses			127,000			20,000			(610	)
	Amortization of intangibles			17,738			8,854			5,284
	Depreciation and amortization			22,201			20,932			19,062
	Amortization of cost and discount on long-term debt			587			708			707
	Stock-based employee compensation expense			14,956			13,949			12,251
	Loss (gain) on sale of other assets			353			(5,989	)		(2,750	)
	Loss on sales of securities			1,511			1,374			4,500
	Impairment loss on securities			49,280			—			—
	Other, net			(4,098	)		(9,506	)		(15,995	)
Net change in:
	Trading account securities			(2,243	)		(145,448	)		(88,563	)
	Deferred income tax benefit			(70,177	)		6,395			(817	)
	Other assets and other liabilities, net			49,764			(1,270	)		(27,260	)
		Net cash provided by operating activities		311,828			132,712			139,332
Cash Flows From Investing Activities
	Purchase of securities available-for-sale			(362,651	)		(211,479	)		(195,777	)
	Sales of securities available-for-sale			103,561			196,329			527,599
	Maturities and paydowns of securities			453,340			611,870			678,230
	Loan originations, net of principal collections			(901,208	)		(847,442	)		(1,115,555	)
	Net payments for premises and equipment			(35,428	)		(37,030	)		(30,939	)
	Acquisition of BBNV, net of cash acquired			—			(53,953	)		—
	Acquisition of Convergent Wealth, net of cash acquired			—			(101,292	)		—
	Other investing activities, net			(4,006	)		(15,508	)		(6,443	)
		Net cash used in investing activities		(746,392	)		(458,505	)		(142,885	)
Cash Flows From Financing Activities
	Net increase (decrease) in deposits			829,619			(791,429	)		34,344
	Net (decrease) increase in federal funds purchased and securities sold under repurchase agreements			(636,254	)		1,121,508			232,713
	Net increase (decrease) in short-term borrowings, net of transfers from long-term debt			24,500			2,475			(2,475	)
	Net (decrease) increase in other borrowings			(121,910	)		146			(283	)
	Proceeds from exercise of stock options			20,480			25,907			19,073
	Tax benefit from exercise of stock options			2,905			5,026			9,959
	Stock repurchases			(21,694	)		(105,450	)		(161,618	)
	Issuance of preferred stock			389,867			—			—
	Issuance of common stock warrants			10,133			—			—
	Cash dividends paid			(92,886	)		(89,375	)		(80,126	)
		Net cash provided by financing activities		404,760			168,808			51,587
Net (decrease) increase in cash and cash equivalents				(29,804	)		(156,985	)		48,034
Cash and cash equivalents at beginning of year				454,069			611,054			563,020
Cash and cash equivalents at end of period			$	424,265		$	454,069		$	611,054
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
	Interest		$	189,501		$	300,307		$	203,346
	Income taxes			109,197			92,602			156,343
Non-cash investing activities:
	Stock issued for acquisition		$	—		$	88,015		$	—
	Transfer of loans to other real estate owned			23,999			—			—

See accompanying Notes to Consolidated Financial Statements.

A-6

CITY NATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
AND COMPREHENSIVE INCOME

(in thousands)		Shares issued		Preferred stock		Common stock		Additional paid-in capital			Accumulated other comprehensive income (loss)			Retained earnings			Treasury stock			Total shareholders' equity
Balance, December 31, 2005			50,600,943	$	—	$	50,601	$	396,659		$	(51,602	)	$	1,121,474		$	(59,175	)	$	1,457,957
Adjustment to initially apply Staff Accounting Bulletin No. 108			—				—		—			—			(10,174	)		—			(10,174	)
Balance, January 1, 2006			50,600,943		—		50,601		396,659			(51,602	)		1,111,300			(59,175	)		1,447,783
Net income			—				—		—			—			233,523			—			233,523
Other comprehensive income net of tax
	Net unrealized gain on securities available-for-sale net of taxes of $5.8 million and reclassification of $3.8 million for net loss included in net income		—				—		—			8,038			—			—			8,038
	Net unrealized loss on cash flow hedges net of taxes of $2.6 million and reclassification of $6.0 million net loss included in net income		—		—		—		—			3,644			—			—			3,644
Total other comprehensive loss			—		—		—		—			11,682			—			—			11,682
Adjustment to initially apply FASB Statement No. 158			—		—		—		—			(1,539	)		—			—			(1,539	)
Issuance of shares for stock options			68,246		—		68		(6,425	)		—			—			25,430			19,073
Restricted stock grants, net of cancellations			49,605		—		50		(50	)		—			—			—			—
Stock-based employee compensation expense			—		—		—		12,106			—			—			—			12,106
Tax benefit from stock options			—		—		—		9,959			—			—			—			9,959
Cash dividends paid			—		—		—		—			—			(80,126	)		—			(80,126	)
Repurchased shares, net			—		—		—		—			—			—			(161,618	)		(161,618	)
Balance, December 31, 2006			50,718,794		—		50,719		412,249			(41,459	)		1,264,697			(195,363	)	$	1,490,843
Adjustment to initially apply FASB Interpretation 48			—		—		—		—			—			(28,036	)		—			(28,036	)
Balance, January 1, 2007			50,718,794		—		50,719		412,249			(41,459	)		1,236,661			(195,363	)		1,462,807
Net income			—				—		—			—			222,713			—			222,713
Other comprehensive income net of tax
	Amortization of prior service cost		—		—		—		—			218			—			—			218
	Pension liability adjustment		—		—		—		—			1,426			—			—			1,426
	Net unrealized gain on securities available-for-sale net of taxes of $17.5 million and reclassification of $2.0 million for net loss included in net income		—		—		—		—			24,116			—			—			24,116
	Net unrealized loss on cash flow hedges net of taxes of $4.0 million and reclassification of $2.7 million net loss included in net income		—		—		—		—			6,350			—			—			6,350
Total other comprehensive income			—		—		—		—			32,110			—			—			32,110
Issuance of shares for stock options			—		—		—		(18,767	)		—			—			44,674			25,907
Restricted stock grants, net of cancellations			105,384		—		105		(105	)		—			—			—			—
Stock-based employee compensation expense			—		—		—		13,854			—			—			—			13,854
Tax benefit from stock options			—		—		—		5,026			—			—			—			5,026
Cash dividends paid			—		—		—		—			—			(89,375	)		—			(89,375	)
Repurchased shares, net			—		—		—		—			—			—			(105,450	)		(105,450	)
Issuance of shares for acquisition			—		—		—		7,911			—			—			80,104			88,015
Balance, December 31, 2007			50,824,178		—		50,824		420,168			(9,349	)		1,369,999			(176,035	)		1,655,607
Net income			—		—		—		—			—			104,956			—			104,956
Other comprehensive income net of tax
	Amortization of prior service cost		—		—		—		—			52			—			—			52
	Pension liability adjustment		—		—		—		—			(347	)		—			—			(347	)
	Net unrealized loss on securities available-for-sale net of tax benefits of $30.1 million and reclassification of $0.5 million net gain included in net income		—		—		—		—			(41,920	)		—			—			(41,920	)
	Net unrealized gain on cash flow hedges net of taxes of $2.5 million and reclassification of $3.2 million net gain included in net income		—		—		—		—			3,542			—			—			3,542
Total other comprehensive income			—		—		—		—			(38,673	)		—			—			(38,673	)
Issuance of common shares for stock options			—		—		—		(20,513	)		—			—			40,993			20,480
Issuance of preferred stock			—		389,867		—		—			—			—			—			389,867
Issuance of common stock warrants			—		—		—		10,133			—			—			—			10,133
Preferred stock accretion			—		222		—		—			—			(222	)		—			—
Restricted stock grants, net of cancellations			137,279		—		137		(137	)		—			—			—			—
Share-based employee compensation expense			—		—		—		14,755			—			—			—			14,755
Tax benefit from stock options			—		—		—		2,905			—			—			—			2,905
Cash dividends
	Preferred		—		—		—		—			—			(2,223	)		—			(2,223	)
	Common		—		—		—		—			—			(92,886	)		—			(92,886	)
Repurchased shares, net			—		—		—		—			—			—			(21,694	)		(21,694	)
Net change in deferred compensation plans			—		—		—		787			—			—			—			787
Balance, December 31, 2008			50,961,457	$	390,089	$	50,961	$	428,098		$	(48,022	)	$	1,379,624		$	(156,736	)	$	2,044,014

See accompanying Notes to Consolidated Financial Statements.

A-7

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Summary of Significant Accounting Policies

Organization

        City National Corporation (the "Corporation") is the holding company for City National Bank (the "Bank"). City National Bank delivers banking, trust and investment services through 62 offices in Southern California, the San Francisco Bay area, Nevada and New York City. As of December 31, 2008, the Corporation had a majority ownership interest in eight investment advisory affiliates and a minority interest in one other firm. The Corporation also has an unconsolidated subsidiary, Business Bancorp Capital Trust I. Because the Bank comprises substantially all of the business of the Corporation, references to the "Company" mean the Corporation and the Bank together. The Corporation is approved as a financial holding company pursuant to the Gramm-Leach-Bliley Act of 1999.

        The Company's accounting and reporting policies conform to generally accepted accounting principles ("GAAP") and practices in the financial services industry. To prepare the financial statements in conformity with GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and income and expenses during the reporting period. Circumstances and events that differ significantly from those underlying our estimates and assumptions could cause actual financial results to differ from our estimates. The material estimates included in the financial statements relate to the allowance for loan and lease losses, the reserve for off-balance sheet credit commitments, valuation of stock options and restricted stock, income taxes, goodwill and intangible asset impairment, available-for-sale securities impairment and the valuation of financial assets and liabilities reported at fair value.

        The Company has applied its critical accounting policies and estimation methods consistently in all periods presented in these financial statements (to the periods in which they applied) and management has discussed these policies with our Audit and Risk Committee. The results of operations reflect any adjustments, all of which are of a normal recurring nature, and which, in the opinion of management, are necessary for a fair presentation of the results for the periods presented.

        The Company is on the accrual basis of accounting for income and expenses. In accordance with the usual practice of banks, assets and liabilities of individual trust, agency and fiduciary funds have not been included in the financial statements.

        Certain prior year balances have been reclassified to conform to the current year presentation.

Consolidation

        The consolidated financial statements of the Company include the accounts of the Corporation, its non-bank subsidiaries, the Bank and the Bank's wholly owned subsidiaries, after the elimination of all material intercompany transactions. Preferred stock and equity ownership of others is reflected as Minority interest in consolidated subsidiaries in the consolidated balance sheets. The related minority interest in earnings is included in Other noninterest expense in the consolidated statements of income.

        The Company holds ownership interests in certain special-purpose entities formed to provide affordable housing. These entities are variable interest entities ("VIEs"). A variable interest entity is an entity that has (1) an insufficient amount of equity to finance its principal activities without additional subordinated financial support; (2) equity investors that, as a group, lack the ability to make decisions about the entity's activities through voting or similar rights; (3) equity investors that, as group, do not have the obligation to absorb the entity's expected losses or receive the expected residual returns if

A-8

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Summary of Significant Accounting Policies (Continued)

they occur, or (4) voting rights of some investors that are not proportional to their obligation to absorb expected losses or receive residual returns and substantially all of the entity's activities are conducted on behalf of an investor that has disproportionate voting rights. If any of these characteristics is present, the entity is subject to consolidation based on variable interests, not on ownership of the entity's outstanding voting stock. Variable interests are defined as contractual, ownership or other monetary interest in an entity that changes with fluctuations in the fair value of the entity's net assets.

        The primary beneficiary is required to consolidate the VIE. The primary beneficiary is the entity that absorbs the majority (more than 50%) of the VIE's expected losses or receives the majority of the VIE's expected returns, or both. The Company evaluates its ownership interests in VIEs annually to determine whether these investments qualify for consolidation. None of the Company's investments in VIEs met the criteria for consolidation at either December 31, 2008 or 2007. The Company initially records its investments in these entities at cost, which approximates the maximum exposure to loss. Subsequently, the carrying value is amortized over the stream of available tax credits and benefits. The Company expects to recover its investments over time, through realization of federal low-income housing tax credits. Affordable housing VIEs are included in Affordable housing investments in the consolidated balance sheets with associated income reported in Other noninterest income in the consolidated statements of income.

        In addition, the Company, as a limited partner, holds an insignificant ownership percentage in certain private equity partnerships. While these entities may meet the definition of a VIE, the Company is not the primary beneficiary of any of these entities. The Company accounts for its interests in these partnerships under the cost method. These investments are included in Other assets in the consolidated balance sheets with associated income reported in Other noninterest income in the consolidated statements of income.

Wealth and Investment Advisory Affiliates

        The Company's investment management and wealth advisory affiliates are organized as limited liability companies. The Corporation generally owns a majority position in each affiliate and certain management members of each affiliate own the remaining shares. The Corporation has contractual arrangements with its affiliates whereby a percentage of revenue is allocable to fund affiliate operating expenses ("operating share") while the remaining portion of revenue ("distributable revenue") is allocable to the Corporation and the other affiliate owners. All majority-owned affiliates are consolidated. The Corporation's interest in one investment management affiliate in which it holds a minority share is accounted for using the equity method.

Cash and Due From Banks

        Cash on hand, cash items in the process of collection, and amounts due from correspondent banks and the Federal Reserve Bank are included in Cash and due from banks on the consolidated balance sheets.

Fair Value Measurements

        The Company adopted Financial Accounting Standards Board ("FASB") Statement No. 157, Fair Value Measurements ("SFAS 157") effective January 1, 2008 on a prospective basis. SFAS 157 defines fair value for financial reporting purposes as the price that would be received to sell an asset or paid to

A-9

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Summary of Significant Accounting Policies (Continued)

transfer a liability in an orderly market transaction between market participants at the measurement date (reporting date). Under the statement, fair value is based on an exit price in the principal market or most advantageous market in which the reporting entity could transact.

        For each asset and liability required to be reported at fair value, management has identified the unit of account and valuation premise to be applied for purposes of measuring fair value. The unit of account is the level at which an asset or liability is aggregated or disaggregated for purposes of applying SFAS 157. The valuation premise is a concept that determines whether an asset is measured on a standalone basis or in combination with other assets. For purposes of applying the provisions of SFAS 157, the Company measures its assets and liabilities on a standalone basis then aggregates assets and liabilities with similar characteristics for disclosure purposes.

Fair Value Hierarchy

        Management employs market standard valuation techniques in determining the fair value of assets and liabilities. Inputs used in valuation techniques are based on assumptions that market participants would use in pricing an asset or liability. SFAS 157 prioritizes inputs used in valuation techniques as follows:

Level 1—	Quoted market prices in an active market for identical assets and liabilities.
Level 2—	Observable inputs including quoted prices (other than Level 1) in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability such as interest rates, yield curves, volatilities and default rates, and inputs that are derived principally from or corroborated by observable market data.
Level 3—	Unobservable inputs reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available.

        If the determination of fair value measurement for a particular asset or liability is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Management's assessment of the significance of a particular input to the fair value measurement requires judgment and considers factors specific to the asset or liability measured.

        A description of the valuation techniques applied to the Company's major categories of assets and liabilities measured at fair value follows.

Securities—Fair values for U.S. Treasury securities, marketable equity securities and trading securities, with the exception of agency securities held in the trading account, are based on quoted market prices. Securities with fair values based on quoted market prices are classified in Level 1 of the fair value hierarchy. Level 2 securities include the Company's portfolio of federal agency, mortgage-backed, state and municipal securities for which fair values are calculated with models using quoted prices and other inputs directly or indirectly observable for the asset or liability. Prices for 99 percent

A-10

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Summary of Significant Accounting Policies (Continued)

of these securities are obtained through a third-party valuation source. Management reviewed the valuation techniques and assumptions used by the provider and determined that the provider utilizes widely accepted valuation techniques based on observable market inputs appropriate for the type of security being measured. Prices for the remaining securities are obtained from dealer quotes. Securities classified in Level 3 include collateralized debt obligation instruments for which the market has become inactive. Fair values for these securities were determined using internal models based on assumptions that are not observable in the market.

Loans—The Company does not record loans at fair value with the exception of impaired loans which are measured for impairment in accordance with FASB Statement No. 114, Accounting by Creditors for Impairment of a Loan ("SFAS 114"). Under SFAS 114, loans measured for impairment based on the fair value of collateral or observable market prices are within the scope of SFAS 157. Loans reported at fair value were measured for impairment by valuing the underlying collateral based on third-party appraisals. These loans are classified in Level 2 of the fair value hierarchy.

Derivatives—The Company uses interest-rate swaps to manage its interest rate risk. The fair value of these swaps is obtained through third-party valuation sources that use conventional valuation algorithms. The pricing model is a discounted cash flow model that relies on inputs, such as interest rate futures, from highly liquid and active markets. The Company also enters into interest-rate risk protection products with certain clients. These contracts are offset by paired trades with derivative dealers. The fair value of these derivatives is obtained from a third-party valuation source that uses conventional valuation algorithms.

        To comply with the provisions of SFAS 157, the Company incorporates credit valuation adjustments to appropriately reflect nonperformance risk for both the Company and counterparties in the fair value measurements. Although the Company has determined that the majority of the inputs used to value derivative contracts fall within Level 2 of the fair value hierarchy, the credit valuation adjustments utilize Level 3 inputs, such as estimates of credit spreads. The Company has determined that the impact of the credit valuation adjustments is not significant to the overall valuation of these derivatives. As a result, the Company has classified the derivative contract valuations in their entirety in Level 2 of the fair value hierarchy.

        The fair value of foreign exchange options and transactions are derived from market spot and/or forward foreign exchange rates and are classified in Level 1 of the fair value hierarchy.

Other Real Estate Owned ("OREO")—The fair value of OREO is based on third-party appraisals of the properties performed in accordance with professional appraisal standards and Bank regulatory requirements under the Financial Institutions Reform Recovery and Enforcement Act of 1989. Appraisals are reviewed and approved by the Company's appraisal department. OREO is classified in Level 2 of the fair value hierarchy.

        The Company records securities available-for-sale, trading securities and derivative contracts at fair value on a recurring basis. Certain other assets such as impaired loans and OREO are recorded at fair value on a nonrecurring basis. Nonrecurring fair value measurements typically involve assets that are evaluated for impairment and for which any impairment is recorded in the period in which the remeasurement is performed.

A-11

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Summary of Significant Accounting Policies (Continued)

Securities

        Securities are classified based on management's intention on the date of purchase. All securities other than trading securities are classified as available-for-sale and are presented at fair value. Unrealized gains or losses on securities available-for-sale are excluded from net income but are included as separate components of other comprehensive income, net of taxes. Premiums or discounts on securities available-for-sale are amortized or accreted into income using the interest method over the expected lives of the individual securities. On a quarterly basis, the Company makes an assessment to determine whether there have been any events or economic circumstances to indicate that a security on which there is an unrealized loss is impaired on an other-than-temporary basis. The recorded value of securities is reduced to its fair value when the declines are considered other-than-temporary, and a new cost basis is established for the securities. Any other-than-temporary loss is included in net income. Realized gains or losses on sales of securities available-for-sale are recorded using the specific identification method. Trading securities are valued at fair value with any unrealized gains or losses included in net income.

Loans

        Loans are generally carried at principal amounts less net deferred loan fees. Net deferred loan fees include deferred unamortized fees less direct incremental loan origination costs. Net deferred fees are amortized into interest income over the terms of the loans for all loans except residential mortgages. Net deferred fees on residential mortgage loans are amortized over the average expected life of the loans. The amortization is calculated using the effective yield method for all loans except revolving loans, for which the straight-line method is used. Premiums or discounts on loans are amortized or accreted into income using the effective interest method. Interest income is accrued as earned.

        Loans are placed on nonaccrual status when a loan becomes contractually past due 90 days with respect to interest or principal unless the loan is both well secured and in the process of collection, or if full collection of interest or principal becomes uncertain. When a loan is placed on nonaccrual status, the accrued and unpaid interest receivable is reversed and the accretion of net deferred loan fees ceases. Thereafter, interest collected on the loan is accounted for on the cash collection or cost recovery method until qualifying for return to accrual status. Generally, a loan may be returned to accrual status when the delinquent principal and interest are brought current in accordance with the terms of the loan agreement and certain ongoing performance criteria have been met.

        The Company considers a loan to be impaired when it is probable that it will be unable to collect all amounts due according to the contractual terms of the loan agreement. Once a loan is determined to be impaired, the impairment is measured based on the present value of the expected future cash flows discounted at the loan's effective interest rate, except that if the loan is collateral dependent, the impairment is measured by using the fair value of the loan's collateral. As a final alternative, the observable market price of the debt may be used to assess impairment. Nonperforming loans greater than $500,000 are individually evaluated for impairment based upon the borrower's overall financial condition, resources, and payment record, and the prospects for support from any financially responsible guarantors. Impairment on loans less than $500,000 is measured using historical loss factors, which approximates the discounted cash flows method.

A-12

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Summary of Significant Accounting Policies (Continued)

        When the measurement of the impaired loan is less than the recorded amount of the loan, an impairment is recognized by creating a valuation allowance with a corresponding charge to the allowance for loan and lease losses or by adjusting an existing valuation allowance for the impaired loan.

        The Company's policy is to record cash receipts received on impaired loans first as reductions to principal and then to interest income.

        Unfunded loan commitments are generally related to providing credit facilities to clients of the Bank, and are not actively traded financial instruments. These unfunded commitments are disclosed as off-balance sheet financial instruments in Note 21 in the Notes to Consolidated Financial Statements.

Allowance for Loan and Lease Losses and Reserve for Off-Balance Sheet Credit Commitments

        The Company accounts for the credit risk associated with lending activities through its allowance for loan and lease losses, reserve for off-balance sheet credit commitments and provision for credit losses. The provision is the expense recognized in the consolidated statements of income to adjust the allowance and reserve to the levels deemed appropriate by management, as determined through application of the Company's allowance methodology procedures. The provision for credit losses reflects management's judgment of the adequacy of the allowance for loan and lease losses and the reserve for off-balance sheet credit commitments. It is determined through quarterly analytical reviews of the loan and commitment portfolios and consideration of such other factors as the Company's loan and lease loss experience, trends in problem loans, concentrations of credit risk, underlying collateral values, and current economic conditions, as well as the results of the Company's ongoing credit review process. As conditions change, our level of provisioning and the allowance for loan and lease losses and reserve for off-balance sheet credit commitments may change.

        For commercial, non-homogenous loans that are not impaired, the Bank derives loss factors via a process that begins with estimates of probable losses inherent in the portfolio based upon various statistical analyses. These include migration analysis, in which historical delinquency and credit loss experience is applied to the current aging of the portfolio, as well as analyses that reflect current trends and conditions. Each portfolio of smaller balance homogeneous loans including residential first mortgages, installment, revolving credit and most other consumer loans is collectively evaluated for loss potential. Management also establishes a qualitative reserve that considers overall portfolio indicators, including current and historical credit losses; delinquent, nonperforming and criticized loans; trends in volumes and terms of loans; and, an evaluation of overall credit quality and the credit process, including lending policies and procedures, economic, geographical, product, and other environmental factors. Management also considers trends in internally risk-rated exposures, criticized exposures, cash-basis loans, and historical and forecasted write-offs; and, a review of industry, geographic, and portfolio concentrations, including current developments within those segments. In addition, management considers the current business strategy and credit process, including credit-limit setting and compliance, credit approvals, loan underwriting criteria and loan workout procedures.

        The allowance for loan and lease losses attributed to impaired loans considers all available evidence, including as appropriate, the probability that a specific loan will default, the expected exposure of a loan at default, an estimate of loss given default, the present value of the expected future cash flows discounted using the loan's contractual effective rate, the secondary market value of the loan and the fair value of collateral.

A-13

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Summary of Significant Accounting Policies (Continued)

        The quantitative portion of the allowance for loan and lease losses is adjusted for qualitative factors to account for model imprecision and to incorporate the range of probable outcomes inherent in the estimates used for the allowance. The qualitative portion of the allowance attempts to incorporate the risks inherent in the portfolio, economic uncertainties, competition, regulatory requirements and other subjective factors including industry trends, changes in underwriting standards, decline in the value of collateral for collateral dependent loans and existence of concentrations. The reserve for off-balance sheet credit commitments is established by converting the off-balance sheet exposures to a loan equivalent amount and then applying the methodology used for loans described above.

        The allowance for loan and lease losses and reserve for off-balance sheet credit commitments are increased by the provision for credit losses charged to operating expense and allowances acquired through acquisitions. The allowance for loan and lease losses is decreased by the amount of charge-offs, net of recoveries.

Other Real Estate Owned

        Other real estate owned is composed of real estate acquired in satisfaction of loans. Properties acquired by foreclosure or deed in lieu of foreclosure are transferred to OREO and are recorded at fair value less estimated costs to sell, at the date of transfer of the property. If the carrying value exceeds the fair value at the time of the transfer, the difference is charged to the allowance for loan and lease losses. The fair value of the OREO property is based upon a current appraisal. Losses that result from the ongoing periodic valuation of these properties are charged against OREO expense in the period in which they are identified. Expenses for holding costs are charged to OREO expense as incurred.

Premises and Equipment

        Bank premises and equipment are stated at cost less accumulated depreciation and amortization. Leasehold improvements are amortized over the terms of the respective leases. Depreciation is generally computed on a straight-line basis over the estimated useful life of each type of asset. Gains and losses on dispositions are reflected in current operations. Maintenance and repairs are charged to operating expenses.

Software

        Capitalized software is stated at cost, less accumulated amortization. Capitalized software includes purchased software and capitalizable application development costs associated with internally developed software. Amortization is computed on a straight-line basis and charged to expense over the estimated useful life of the software which is generally 5 years. Capitalized software is included in Premises and equipment, net in the consolidated balance sheets.

Goodwill and Intangibles

        The Company accounts for acquisitions using the purchase method of accounting. Under the purchase method, assets acquired and liabilities assumed are recorded at their estimated fair values at the date of acquisition. Management utilizes valuation techniques based on discounted cash flow analysis to determine these fair values. Any excess of the purchase price over amounts allocated to

A-14

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Summary of Significant Accounting Policies (Continued)

acquired assets, including identifiable intangible assets, and liabilities assumed is recorded as goodwill. Intangible assets include core deposit intangibles and client advisory contract intangibles (combined, customer-relationship intangibles) originating from acquisitions of financial services firms. Core deposit intangibles are amortized over a range of four to eight years and client advisory contract intangibles are amortized over various periods ranging from 12 to 20 years. The weighted-average amortization period for the contract intangibles is 18.6 years.

        Goodwill and intangible assets are evaluated at least annually for impairment or more frequently if events or circumstances, such as changes in economic or market conditions, indicate that potential impairment exists. Goodwill is tested for impairment at the reporting unit level. A reporting unit is an operating segment or one level below an operating segment for which discrete financial information is available and regularly reviewed by management. If the fair value of the reporting unit, including goodwill, is determined to be less than the carrying amount of the reporting unit, a further test is required to measure the amount of impairment. If an impairment loss exists, the carrying amount of the goodwill is adjusted to a new cost basis. Subsequent reversal of a previously recognized goodwill impairment loss is prohibited.

        Impairment testing of customer-relationship intangibles is performed at the individual asset level. Impairment exists when the carrying amount of an intangible asset is not recoverable and exceeds its fair value. The carrying amount of an intangible asset is not recoverable when the carrying amount of the asset exceeds the sum of undiscounted cash flows (cash inflows less cash outflows) associated with the use and/or disposition of the asset. An impairment loss is measured as the amount by which the carrying amount of the asset exceeds its fair value. The fair value of core deposit intangibles is determined using market-based core deposit premiums from recent deposit sale transactions. The fair value of client advisory contracts is based on discounted expected future cash flows. Management makes certain estimates and assumptions in determining the expected future cash flows from customer-relationship intangibles including account attrition, expected lives, discount rates, interest rates, servicing costs and other factors. Significant changes in these estimates and assumptions could adversely impact the valuation of these intangible assets. If an impairment loss exists, the carrying amount of the intangible asset is adjusted to a new cost basis. The new cost basis is amortized over the remaining useful life of the asset.

Private Equity Investments

        The Company has ownership interests in a limited number of private equity investments that are not publicly traded. These investments are carried at cost in the Other assets section of the consolidated balance sheets.

        Management reviews these investments quarterly for possible other-than-temporary impairment. This review includes consideration of the facts and circumstances associated with each investment, expectations for future cash flows and capital needs, the viability of the entity's business model and our exit strategy. If and when a decline in value occurs that is considered "other-than-temporary", the asset value would be reduced. The estimated loss would be recognized as a loss on other assets included in other noninterest income.

A-15

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Summary of Significant Accounting Policies (Continued)

Investment Fee Revenue

        Investment fee revenue consists of fees, commissions, and markups on securities transactions with clients and money market mutual fund fees.

International Services Income

        International services income includes foreign exchange fees, fees on commercial letters of credit and standby letters of credit, foreign collection and other fee income. International services fees are recognized when earned, except for the fees on commercial letters of credit and standby letters of credit which are deferred and recognized into income over the terms of the letters of credit.

Income Taxes

        The Company and its subsidiaries file a consolidated federal income tax return and also file income tax returns in various state jurisdictions. The provision for income taxes includes current and deferred income tax expense on net income adjusted for permanent and temporary differences such as affordable housing tax credits and interest income on state and municipal securities. Deferred tax assets and liabilities are recognized for the expected future tax consequences of existing temporary differences between the financial reporting and tax reporting basis of assets and liabilities, as well as for operating losses and tax credit carry forwards, using enacted tax laws and rates. On a quarterly basis, management evaluates deferred tax assets to determine if these tax benefits are expected to be realized in future periods. This determination is based on facts and circumstances, including the Company's current and future tax outlook. To the extent a deferred tax asset is no longer considered "more likely than not" to be realized, a valuation allowance is established.

        Accrued income taxes represent the estimated amounts due or received from the various taxing jurisdictions where the Company has established a business presence. The balance also includes a contingent reserve for potential taxes, interest and penalties related to uncertain tax positions. On a quarterly basis, management evaluates the contingent tax accruals to determine if they are sufficiently reserved based on a probability assessment of potential outcomes. The determination is based on facts and circumstances, including the interpretation of existing law, new judicial or regulatory guidance and the status of tax audits. If a tax position which was previously recognized on the financial statements is no longer "more likely than not" to be sustained upon a challenge from the taxing authorities, the tax benefit from the tax position will be derecognized. The Company recognizes accrued interest and penalties relating to uncertain tax positions as an income tax provision expense.

        From time to time, the Company engages in business strategies that may also have an effect on its tax liabilities. If the tax effects of a strategy are significant, the Company's practice is to obtain the opinion of advisors that the tax effects of such strategies should prevail if challenged.

Net Income per Common Share

        Basic earnings per common share are calculated based on the weighted average shares of common stock outstanding less unvested restricted shares and units. Diluted earnings per common share give effect to all potential dilutive common shares, which consist of stock warrants, stock options and restricted shares and units that were outstanding during part or all of the year. Dividends earned on

A-16

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Summary of Significant Accounting Policies (Continued)

cumulative preferred stock (whether or not paid) are deducted from net income for purposes of calculating earnings per common share.

Share-based Compensation Plans

        The Company accounts for stock options and restricted stock in accordance with FASB Statement No. 123 (revised), Share Based Payment ("SFAS 123R"). SFAS 123R requires the Company to measure the cost of employee services received in exchange for an award of equity instruments, such as stock options or restricted stock, based on the fair value of the award on the grant date. This cost must be recognized in the consolidated statements of income over the vesting period of the award.

        The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model into which the Company inputs its assumptions. The Company evaluates exercise behavior and values options separately for executive and non-executive employees. The Company uses historical data to predict option exercise and employee termination behavior. Expected volatilities are based on the historical volatility of the Company's stock. The expected term of options granted is derived from the actual historical exercise activity over the past 20 years and represents the period of time that options granted are expected to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield is equal to the dividend yield of the Company's stock at the time of the grant. As a practice, the exercise price of the Company's stock option grants equals the closing market price of the Company's common stock on the date of the grant.

        The Company issues restricted stock awards which vest over a five-year period during which time the holder receives dividends and has full voting rights. Twenty-five percent of the restricted stock awards vest two years from the date of grant, then twenty-five percent vests on each of the next three consecutive grant anniversary dates. Restricted stock is valued at the closing price of the Company's stock on the date of award. The portion of the market value of the restricted stock related to the current service period is recognized as compensation expense.

Derivatives and Hedging

        As part of its asset and liability management strategies, the Company uses interest-rate swaps to reduce cash flow variability and to moderate changes in the fair value of financial instruments. In accordance with FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended ("SFAS 133"), the Company recognizes derivatives as assets or liabilities on the consolidated balance sheets at their fair value. The treatment of changes in the fair value of derivatives depends on the character of the transaction.

        In accordance with SFAS 133, the Company documents its hedge relationships, including identification of the hedging instruments and the hedged items, as well as its risk management objectives and strategies for undertaking the hedge transaction at the time the derivative contract is executed. This includes designating each derivative contract as either (i) a "fair value hedge" which is a hedge of a recognized asset or liability, (ii) a "cash flow hedge" which hedges a forecasted transaction or the variability of the cash flows to be received or paid related to a recognized asset or liability or (iii) an "undesignated hedge", a derivative contract not designated as a hedging instrument whose change in fair value is recognized directly in the consolidated statements of income. All derivatives designated as fair value or cash flow hedges are linked to specific hedged items or to groups of specific assets and liabilities on the balance sheet.

A-17

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Summary of Significant Accounting Policies (Continued)

        Both at inception and at least quarterly thereafter, the Company assesses whether the derivatives used in hedging transactions are highly effective (as defined in SFAS 133) in offsetting changes in either the fair value or cash flows of the hedged item. Retroactive effectiveness is assessed, as well as the continued expectation that the hedge will remain effective prospectively.

        For cash flow hedges, in which derivatives hedge the variability of cash flows (interest payments) on loans that are indexed to U.S. dollar LIBOR or the Bank's prime interest rate, the effectiveness is assessed prospectively at the inception of the hedge, and prospectively and retrospectively at least quarterly thereafter.

        Ineffectiveness of the cash flow hedges is measured using the hypothetical derivative method described in Derivatives Implementation Group Issue G7, "Measuring the Ineffectiveness of a Cash Flow Hedge of Interest Rate Risk under Paragraph 30(b) When the Shortcut Method is not Applied." For cash flow hedges, the effective portion of the changes in the derivatives' fair value is not included in current earnings but is reported as Accumulated other comprehensive income (loss). When the cash flows associated with the hedged item are realized, the gain or loss included in Accumulated other comprehensive income (loss) is recognized on the same line in the consolidated statements of income as the hedged item, i.e., included in Interest income on loans and leases. Any ineffective portion of the changes of fair value of cash flow hedges is recognized immediately in Other noninterest income in the consolidated statements of income.

        For fair value hedges, the Company uses interest-rate swaps to hedge the fair value of certain certificates of deposits, subordinated debt and other long-term debt. The certificates of deposit are single maturity, fixed-rate, non-callable, negotiable certificates of deposit that pay interest only at maturity and contain no compounding features. The certificates cannot be redeemed early except in the case of the holder's death. The interest-rate swaps are executed at the time the deposit transactions are negotiated. The subordinated debt and other long-term debt consists of City National Bank 10-year subordinated notes with a face value of $150.0 million due on September 1, 2011, and City National Corporation senior notes with a face value of $220.9 million due on February 15, 2013. Interest-rate swaps are structured so that all key terms of the swaps match those of the underlying deposit or debt transactions, therefore ensuring there is no hedge ineffectiveness at inception. The Company ensures that the interest-rate swaps meet the requirements for utilizing the short cut method in accordance with paragraph 68 of SFAS 133 and maintains appropriate documentation for each interest-rate swap. On a quarterly basis, fair value hedges are analyzed to ensure that the key terms of the hedged items and hedging instruments remain unchanged, and the hedging counterparties are evaluated to ensure that there are no adverse developments regarding counterparty default, thus ensuring continuous effectiveness. For fair value hedges, the effective portion of the changes in the fair value of derivatives is reflected in current earnings, on the same line in the consolidated statements of income as the related hedged item. For both fair value and cash flow hedges, the periodic accrual of interest receivable or payable on interest rate swaps is recorded as an adjustment to net interest income for the hedged items.

        The Company also offers various derivatives products to clients and enters into derivatives transactions in due course. These transactions are not linked to specific Company assets or liabilities in the balance sheet or to forecasted transactions in an accounting hedge relationship and, therefore, do not qualify for hedge accounting. They are carried at fair value with changes in fair value recorded as part of Other noninterest income in the consolidated statements of income. Fair values are determined

A-18

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Summary of Significant Accounting Policies (Continued)

from verifiable third-party sources that have considerable experience with the derivative markets. The credit component of the fair value of these derivative contracts is calculated using an internal model.

        The Company discontinues hedge accounting prospectively when (i) a derivative is no longer highly effective in offsetting changes in the fair value or cash flows of a hedged item, (ii) a derivative expires or is sold, terminated or exercised, (iii) a derivative is un-designated as a hedge, because it is unlikely that a forecasted transaction will occur or (iv) the Company determines that designation of a derivative as a hedge is no longer appropriate. If a fair value hedge derivative instrument is terminated or the hedge designation removed, the previous adjustments to the carrying amount of the hedged asset or liability would be subsequently accounted for in the same manner as other components of the carrying amount of that asset or liability. For interest-earning assets and interest-bearing liabilities, such adjustments would be amortized into earnings over the remaining life of the respective asset or liability. If a cash flow derivative instrument is terminated or the hedge designation is removed, related amounts reported in other comprehensive income are reclassified into earnings in the same period or periods during which the hedged forecasted transaction affects earnings.

Recently Issued or Proposed Accounting Pronouncements

        During the year ended December 31, 2007, the following accounting pronouncements were issued with an effective date of January 1, 2009:

•

On December 4, 2007, the FASB issued FASB Statement No. 141(R) ("SFAS 141(R)"), Business Combinations and No. 160, Noncontrolling Interests in Consolidated Financial Statements ("SFAS 160"). SFAS 141(R) requires the acquiring entity in a business combination to recognize 100 percent of the assets acquired and liabilities assumed in the transaction; establishes acquisition date fair value as the measurement objective for the assets acquired and liabilities assumed; requires recognition of contingent consideration arrangements at their acquisition date fair values; and expands required disclosures regarding the nature and financial effect of the business combination. SFAS 141(R) also requires that acquisition-related costs be expensed when incurred. SFAS 160 requires that noncontrolling (minority) interests in subsidiaries be initially measured at fair value and classified as a separate component of equity in the consolidated financial statements. The Company currently reports minority interest in the mezzanine section of the balance sheet between liabilities and equity. Under SFAS 160, noncontrolling interests' share of subsidiary earnings will no longer be recognized as an expense by the parent entity. SFAS 141(R) and SFAS 160 are effective for annual periods beginning after December 15, 2008, and will be adopted by the Company effective January 1, 2009. The Company is evaluating the impact of adoption on its consolidated financial statements.

        During the year ended December 31, 2008, the following accounting pronouncements were issued or became effective:

•

The Company adopted SFAS 157 effective January 1, 2008. SFAS 157 defines fair value for financial reporting purposes, establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS 157 does not require new fair value measurements, but does apply under other accounting pronouncements where fair value is required or permitted. The provisions of the statement are being applied prospectively. The Company was not required to record a transition adjustment upon adoption of the Statement.

A-19

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Summary of Significant Accounting Policies (Continued)

•

On February 12, 2008, the FASB issued FASB Staff Position ("FSP") No. FAS 157-2, Effective Date of FASB Statement No. 157 ("FSP 157-2"). FSP 157-2 amends SFAS 157 to delay the effective date of SFAS 157 for all non-financial assets and non-financial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). Examples of non-financial assets for the Company include goodwill and intangible assets associated with acquisitions. FSP 157-2 defers the effective date of SFAS 157 for items within its scope to fiscal years beginning after November 15, 2008, and interim periods within those fiscal years.

•

The Company adopted FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities ("SFAS 159") as of January 1, 2008. SFAS 159 provides companies with an option to report selected financial assets and liabilities at fair value on an instrument-by-instrument basis. Unrealized gains and losses on instruments for which the fair value option has been elected are reported in earnings at each subsequent reporting date. The objective of the Statement is to reduce both complexity in accounting for financial instruments and the volatility in earnings caused by measuring related assets and liabilities differently. The Company has not elected the fair value option for any financial assets or liabilities previously reported at cost.

•

FSP FIN 39-1, which amends certain aspects of FASB Interpretation Number ("FIN") 39, Offsetting of Amounts Related to Certain Contracts—an interpretation of APB Opinion No. 10 and FASB Statement No. 105 ("FIN 39") became effective for the Company on January 1, 2008. The FSP amends paragraph 10 of FIN 39 to permit a reporting entity to offset fair value amounts recognized for the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) against fair value amounts, including amounts that approximate fair value, recognized for derivative instruments executed with the same counterparty under the same master netting arrangement. Derivative instruments permitted to be netted for the purposes of the FSP include those instruments that meet the definition of a derivative in SFAS 133, Accounting for Derivative Instruments and Hedging Activities, including those that are not included in the scope of SFAS 133. The FSP only impacts the presentation of the derivative's fair value and the related collateral on the balance sheet. From time to time the Company may require or accept cash collateral. As of December 31, 2008, the Company held no cash collateral from a counterparty. The Company has elected to offset fair value amounts recognized for derivative instruments (including interest receivable and payable) and the fair value amounts of the right to reclaim cash collateral or the obligation to return cash collateral arising from derivative instruments executed with the same counterparty under a master netting agreement.

•

Emerging Issues Task Force ("EITF") Issue No. 06-11, "Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards", that became effective for the Company on January 1, 2008, provides that realized income tax benefits from dividends or dividend equivalents that are charged to retained earnings and paid to employees for equity classified nonvested equity shares, nonvested equity share units, and outstanding equity share options are to be recognized as an increase to additional paid-in capital. The amount recognized in additional paid-in capital for the realized income tax benefit from dividends on those awards are to be included in the pool of excess tax benefits available to absorb tax deficiencies on share-based payment awards. The Company previously recognized tax benefits associated with dividend payments on unvested shares as a reduction of income tax expense. The change in accounting

A-20

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Summary of Significant Accounting Policies (Continued)

for these tax benefits under the EITF did not have a significant impact on the Company's financial statements.

•

On March 19, 2008, the FASB issued FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities ("SFAS 161"). The Statement expands disclosure requirements for derivative instruments and hedging activities. The new disclosures will address how derivative instruments are used, how derivatives and the related hedged items are accounted for under SFAS 133, how derivative instruments and related hedged items affect an entity's financial position, financial performance and cash flows. In addition, companies will be required to disclose the fair values of derivative instruments and their gains and losses in a tabular format. SFAS 161 is effective for fiscal years beginning after November 15, 2008.

•

On April 25, 2008, the FASB issued FSP No. 142-3, Determination of the Useful Life of Intangible Assets ("FSP 142-3"). FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, Goodwill and Other Intangible Assets ("SFAS 142"). The intent of the FSP is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under FASB Statement No. 141, Business Combinations, when the underlying arrangement includes renewal or extension terms. FSP 142-3 permits an entity to use its own assumptions, based on its historical experience, about the renewal or extension of an arrangement to determine the useful life of an intangible asset. These assumptions are to be adjusted for the entity-specific factors detailed in SFAS 142. FSP 142-3 is effective on a prospective basis for fiscal years beginning after December 15, 2008. The Company does not expect the adoption of FSP 142-3 to have a significant impact on its consolidated financial statements.

•

In May 2008, the FASB issued FASB Statement No. 162, The Hierarchy of Generally Accepted Accounting Principles ("SFAS 162"). SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. SFAS 162 became effective on November 15, 2008, 60 days following approval by the Securities and Exchange Commission. Adoption of SFAS 162 did not have a material effect on the Company's financial statements.

•

In June 2008, the FASB issued FSP EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities. FSP EITF 03-6-1 states that all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends are considered participating securities. As such, the issuing entity is required to apply the two-class method of computing basic and diluted earnings per share. This pronouncement will be effective for the Company for fiscal years beginning after December 15, 2008. The Company is assessing the impact of the adoption of FSP EITF 03-6-1 on its financial statements.

•

In June 12, 2008, the FASB issued EITF No. 07-5, Determining Whether an Instrument is Indexed to an Entity's Own Stock ("EITF 07-5"). EITF 07-5 will replace the guidance in EITF Issue 01-6, The Meaning of Indexed to a Company's Own Stock, when it becomes effective for fiscal years beginning after December 15, 2008 (and interim periods within those fiscal years). Both Issues 01-6 and 07-5 require an entity to evaluate an instrument's contingency provisions and the

A-21

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Summary of Significant Accounting Policies (Continued)

factors that affect its ultimate settlement amount (i.e., the payoff to the holder) when determining whether the instrument is indexed to the entity's own stock. Adoption of EITF 07-5 is not expected to have a material impact on the Company's financial statements.

•

On September 12, 2008, the FASB issued FSP No. 133-1 and FIN 45-4, Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161 ("the FSP"). The FSP expands disclosures about credit derivatives by requiring more information about the potential adverse effects of changes in credit risk on the financial position, financial performance and cash flows of the sellers of credit derivatives. It also amends FIN 45, Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others, to require additional disclosure about the current status of the payment/performance risk of a guarantee. Finally, the FSP clarifies the effective date of FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities. The provisions of the FSP that amend Statement 133 and FIN 45 are effective for reporting periods ending after November 15, 2008. The disclosures required by Statement 161 should be provided for any reporting period beginning after November 15, 2008. The Company does not expect the adoption of the FSP to have a material effect on its financial statements.

•

On October 10, 2008, the FASB issued FSP No. FAS 157-3, Determining the Fair Value of a Financial Asset in a Market that is Not Active ("FSP 157-3"). FSP 157-3 clarifies the application of SFAS 157, Fair Value Measurements, in an inactive market. The FSP is effective upon issuance, including prior periods for which financial statements have not been issued. The Company adopted FSP 157-3 effective September 30, 2008. Adoption of the FSP impacted the valuation of certain collateralized debt obligation securities for which the market has become inactive.

•

On November 13, 2008, the Task Force reached a consensus on the issues addressed in EITF issue 08-6, Equity Method Accounting Considerations ("EITF 08-6"). EITF 08-6 clarifies the accounting for certain transactions and impairment considerations involving equity method investments. The EITF applies to all investments accounted for under the equity method and is effective in fiscal years beginning on or after December 15, 2008, and interim periods within those fiscal years. The EITF is to be applied prospectively. The Company does not expect the adoption of EITF 08-6 to have a significant impact on its consolidated financial statements.

•

On December 11, 2008, the FASB issued FSP No. FAS 140-4 and FIN 46(R)-8, Disclosures by Public Entities about Transfers of Financial Assets and Interests in Variable Interest Entities. The FSP amends FAS 140 and FIN 46(R) to require additional disclosures regarding transfers of financial assets and interest in variable interest entities. The FSP is effective for reporting periods ending after December 15, 2008. Adoption of the FSP did not have an impact on the Company's financial statements.

•

On January 12, 2009, the FASB issued FSP EITF 99-20-1, Amendments to the Impairment Guidance of EITF Issue No. 99-20 ("FSP 99-20-1"). FSP 99-20-1 amends EITF Issue No. 99-20, Recognition of Interest Income and Impairment of Purchased Beneficial Interests and Beneficial Interests That Continue to be Held by a Transferor in Securitized Financial Assets. FSP 99-20-1 eliminates the requirement that a holder's best estimate of cash flows be based upon those that a market participant would use. Instead the FSP requires that other-than-temporary impairment be recognized as a realized loss through earnings when it is probable there has been an adverse

A-22

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1. Summary of Significant Accounting Policies (Continued)

change in the holder's estimated cash flows from the cash flows previously projected, which is consistent with the impairment model in FASB Statement No. 115, Accounting for Investments in Debt and Equity Securities. The FSP is effective for interim and annual reporting periods ending after December 15, 2008. Retroactive application to a prior interim or annual reporting period is not permitted. Adoption of the FSP did not have a significant impact on the Company's financial statements.

•

In December 2008, the FASB issued proposed FSP FAS 107-a ("FSP 107-a"), Disclosures about Certain Financial Assets: An Amendment of FASB Statement No. 107, to increase the comparability of information about certain financial assets that have related economic characteristics but have different reporting measurement attributes. The proposed FSP would be effective for interim periods ending after March 15, 2009. This FSP does not require disclosures for earlier periods presented for comparative purposes at initial application or in subsequent periods.

•

In February 2009, the FASB issued proposed FSP FAS 107-b and APB 28-a ("FSP 107-b"), Interim Disclosures about Fair Value of Financial Instruments. FSP 107 would amend FASB Statement No. 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about fair value of financial instruments in interim financial statements as well as in annual financial statements. The proposed FSP would also amend APB opinion No. 28, Interim Financial Reporting, to require those disclosures in all interim financial statements. As proposed, FSP 107-b would be effective for interim and annual reporting periods ending after March 15, 2009, and does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In periods after initial adoption, the proposed FSP would require comparative disclosures only for periods ending subsequent to initial adoption.

Note 2. Restrictions on Cash and Due from Banks

        Bank subsidiaries are required to maintain minimum average reserve balances with the Federal Reserve Bank. The amount of those reserve balances averaged approximately $51.9 million and $66.3 million during the year ended December 31, 2008 and December 31, 2007, respectively.

Note 3. Acquisitions

        On February 28, 2007, the Company completed its acquisition of Business Bank Corporation ("BBC"), the parent of Business Bank of Nevada ("BBNV") and an unconsolidated subsidiary, Business Bancorp Capital Trust I, in a cash and stock transaction valued at $167 million. BBNV operated as a wholly owned subsidiary of City National Corporation until after the close of business on April 30, 2007, at which time it was merged into the Bank. BBC had assets of $496 million, loans of $395 million and deposits of $441 million on the date of acquisition. As a result of the BBC merger, the Company acquired certain loans for which there was, at the time of the merger, evidence of deterioration of credit quality since origination and for which it was probable that all contractually required payments would not be collected. These loans were accounted for in accordance with SOP 03-3, Accounting for Certain Loans or Debt Securities Acquired in a Transfer, which requires that purchased impaired loans be recorded at fair value as of the merger date. This resulted in an insignificant, $50,000 adjustment to goodwill.

A-23

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 3. Acquisitions (Continued)

        On May 1, 2007, the Corporation completed its acquisition of Lydian Wealth Management in an all-cash transaction. The investment advisory firm is headquartered in Rockville, Maryland and now manages or advises on client assets totaling $10.17 billion. Lydian Wealth Management changed its name to Convergent Wealth Advisors ("Convergent Wealth") and became a subsidiary of Convergent Capital Management LLC, the Chicago-based asset management holding company that the Company acquired in 2003. Convergent Wealth provides wealth management and advisory services to individuals and families with considerable investable assets and net worth. All of the senior executives of Convergent Wealth signed employment agreements and acquired a significant minority ownership interest in Convergent Wealth.

Note 4. Fair Value Measurements

        A distribution of asset and liability fair values according to the fair value hierarchy at December 31, 2008 is provided in the table below. See Note 1 for a discussion of the Company's policies regarding this fair value hierarchy and valuation techniques.

				Fair Value Measurements at Reporting Date Using
(in thousands) Asset or Liability Measured at Fair Value		Balance as of December 31, 2008		Quoted Prices in Active Markets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3
Measured on a Recurring Basis
Assets
Securities available-for-sale
	Debt portfolio	$	2,092,749	$	46,197	$	2,014,133	$	32,419
	Equity securities		52,121		52,121		—		—
Trading account securities			295,598		291,809		3,789		—
Mark-to-market derivatives (1)			67,487		4,635		62,852
Total assets at fair value		$	2,507,955	$	394,762	$	2,080,774	$	32,419
Liabilities
Mark-to-market derivatives (2)		$	20,962	$	3,972	$	16,990	$	—
Total liabilities at fair value		$	20,962	$	3,972	$	16,990	$	—
Measured on a Nonrecurring Basis
Assets
Collateral dependent impaired loans (3)		$	84,588	$	—	$	84,588	$	—
Other real estate owned (4)			12,713		—		12,713		—
Total assets at fair value		$	97,301	$	—	$	97,301	$	—

(1)

Reported in Other assets in the consolidated balance sheet.

(2)

Reported in Other liabilities in the consolidated balance sheet.

(3)

Impaired loans for which fair value was calculated using the collateral valuation method.

A-24

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 4. Fair Value Measurements (Continued)

(4)

OREO balance of $11,388 in the consolidated balance sheet is net of estimated disposal costs.

        The changes in Level 3 assets measured at fair value on a recurring basis are summarized in the following table:

Level 3 Assets Measured on a Recurring Basis

(in thousands)			Securities Available-for-Sale
Balance of recurring Level 3 assets at January 1, 2008			$	32,977
	Total gains or losses (realized/unrealized):
		Included in earnings		(18,088	)
		Included in other comprehensive income		(5,392	)
	Purchases, sales, issuances and settlements, net			(2,855	)
	Transfers in and/or out of Level 3			25,777
Balance of recurring Level 3 assets at December 31, 2008			$	32,419

        There were no purchases or sales of Level 3 assets during the period. The $18.1 million loss included in earnings relates to impairment losses recognized on collateralized debt obligation income notes. Refer to Note 5 for further discussion of impairment. The $25.8 million transfer in to Level 3 includes AAA-rated collateralized debt obligations for which the market is inactive. The fair values of these instruments are determined using an internal model based on assumptions, such as the yield that would be required by market participants, that are not observable in the market. Unrealized gains and losses on Level 3 assets are reported as a component of other comprehensive income in the consolidated balance sheets.

        FSP 157-2 issued on February 12, 2008, amends SFAS 157, to delay its effective date for all non-financial assets and non-financial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). Therefore, the Company's goodwill and customer-relationship intangibles will be subject to the provisions of SFAS 157 effective January 1, 2009.

A-25

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 5. Securities Available-for-Sale

        The following is a summary of amortized cost and estimated fair value for the major categories of securities available-for-sale:

(in thousands)			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2008
	U.S. Treasury		$	45,709	$	488	$	—		$	46,197
	Federal agency			29,939		241		—			30,180
	CMOs			956,460		6,966		(88,341	)		875,085
	Mortgage-backed			644,594		10,206		(886	)		653,914
	State and municipal			404,787		9,729		(1,486	)		413,030
	Other			98,419		139		(24,215	)		74,343
		Total debt securities		2,179,908		27,769		(114,928	)		2,092,749
	Equity securities and mutual funds			59,276		1,154		(8,309	)		52,121
		Total securities	$	2,239,184	$	28,923	$	(123,237	)	$	2,144,870
December 31, 2007
	U.S. Treasury		$	45,106	$	122	$	—		$	45,228
	Federal agency			50,996		113		(67	)		51,042
	CMOs			1,041,692		742		(14,995	)		1,027,439
	Mortgage-backed			822,193		1,018		(15,677	)		807,534
	State and municipal			391,790		4,486		(821	)		395,455
	Other			65,437		409		(1,869	)		63,977
		Total debt securities		2,417,214		6,890		(33,429	)		2,390,675
	Equity securities and mutual funds			67,689		4,728		(437	)		71,980
		Total securities	$	2,484,903	$	11,618	$	(33,866	)	$	2,462,655

        Gross realized gains related to the sale of securities available-for-sale were $2.6 million, $2.9 million and $11.1 million during 2008, 2007 and 2006, respectively. Gross realized losses were $4.1 million, $4.3 million and $15.6 million during 2008, 2007 and 2006, respectively. The $1.5 million net loss on the sale of securities in 2008 primarily relates to the sale of equity securities. Proceeds from sales of securities were $103.6 million, $196.3 million and $527.6 million in 2008, 2007 and 2006, respectively.

Impairment Assessment

        Impairment exists when the fair value of a security is less than its cost. Cost includes adjustments made to the cost basis of a security for accretion, amortization and previous other-than-temporary impairments. The Company performs a quarterly assessment of the debt and equity securities in its investment portfolio that have an unrealized loss to determine whether the decline in the fair value of these securities below their cost is other-than-temporary. Impairment is considered other-than-temporary when it becomes probable that the Company will be unable to recover the cost of an investment. The Company's impairment assessment takes into consideration factors such as the length of time and the extent to which the market value has been less than cost; the financial condition

A-26

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 5. Securities Available-for-Sale (Continued)

and near-term prospects of the issuer including events specific to the issuer or industry; defaults or deferrals of scheduled interest, principal or dividend payments; external credit ratings and recent downgrades; and the Company's intent and ability to hold the security for a period of time sufficient to allow for a recovery in fair value. If a decline in fair value is judged to be other than temporary, the cost basis of the individual security is written down to fair value which then becomes the new cost basis. The amount of the write down is included in Impairment loss on securities in the consolidated statements of income. The new cost basis is not adjusted for subsequent recoveries in fair value, if any.

Securities Deemed to be Other-Than-Temporarily Impaired

        Through the impairment assessment process, the Company determined that the investments discussed below were other-than-temporarily impaired at December 31, 2008. The Company recorded a $49.3 million impairment loss on available-for-sale securities in 2008. No impairment losses were recorded in 2007 and 2006.

		For the year ended December 31,
(in thousands) Impairment Losses on Other-Than-Temporarily Impaired Securities
		2008		2007		2006
Collateralized debt obligation income notes		$	18,088	$	—	$	—
Equity securities and mutual funds			31,192		—		—
	Total	$	49,280	$	—	$	—

Collateralized Debt Obligation Income Notes

        The cost basis of the collateralized debt obligation income notes ("CDO Notes") was $11.7 million as of December 31, 2008. The CDO Notes are the non-rated first loss absorption tranche in a multi-class, cash flow collateralized bond obligation backed by a collection of Trust Preferred securities issued by financial institutions. The notes represent ownership of all residual cash flows from the asset pools after all fees have been paid and debt issues have been serviced. CDO Notes are collateralized by debt securities with stated maturities and are therefore reported as debt securities in the consolidated balance sheets. The market for CDO Notes has become increasingly inactive since the fourth quarter of 2007 with no visible trade activity in the past 6 months. The valuation of these securities requires substantial judgment and estimation of the factors used in the cash flow model that are not currently observable in the market. CDO Notes are classified as Level 3 in the fair value hierarchy. Refer to Note 4 for further discussion of fair value.

        The Company recorded an $18.1 million impairment loss in 2008 on its investments in CDO Notes. The fair value of these securities was determined using an internal discounted cash flow model that incorporates the Company's assumptions about risk-adjusted discount rates, prepayment expectations, projected cash flows and collateral performance. The Company considered a number of factors in determining the discount rate used in the valuation model including the implied rate of return at the last date the market for CDO Notes and similar securities was active, rates of return that market participants would consider in valuing the securities and indicative quotes from dealers. The Company determined that 25 percent is the appropriate rate to apply in discounting the projected cash flows of its CDO Notes.

A-27

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 5. Securities Available-for-Sale (Continued)

Perpetual Preferred Stock

        The cost basis of the perpetual preferred stock is $1.8 million at December 31, 2008. The Company recorded a $21.9 million impairment loss in 2008 on its investment in perpetual preferred stock issued by the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association. The action taken by the Federal Housing Finance Agency on September 7, 2008 placing these Government-Sponsored Agencies into conservatorship and eliminating the dividends on their preferred shares led to the Company's determination that these securities are other-than-temporarily impaired.

Equity Securities and Mutual Funds

        The cost basis of total available-for-sale equity securities and mutual funds, excluding perpetual preferred stock, is $57.5 million at December 31, 2008. Of that amount, $17.8 million relate to fixed income funds and $39.7 million relate primarily to equity securities and equity mutual funds. The Company recorded a $9.3 million impairment loss in 2008 on its investments in equity securities and mutual funds. The fair value of these securities is based on observable market prices. Overall, the fair value of many of the securities held has declined in recent months. The Company attributes most of the decline to recent significant market volatility and believes that current valuations are not indicative of the underlying value of these investments. Securities have been determined to be other-than-temporarily impaired based on the magnitude and duration of the decline in fair value below cost, the likelihood of recovery and other qualitative factors specific to the individual securities.

        The following table provides a summary of the gross unrealized losses and fair value of investment securities that are not deemed to be other-than-temporarily impaired aggregated by investment category and length of time that the securities have been in a continuous unrealized loss position as of December 31, 2008:

		Less than 12 months				12 months or greater				Total
(in thousands)		Fair Value		Estimated Unrealized Loss		Fair Value		Estimated Unrealized Loss		Fair Value		Estimated Unrealized Loss
CMOs		$	202,032	$	50,742	$	173,859	$	37,599	$	375,891	$	88,341
Mortgage-backed			63,634		719		12,925		167		76,559		886
State and municipal			39,974		1,275		4,769		211		44,743		1,486
Other			43,844		17,661		25,910		6,554		69,754		24,215
	Total debt securities		349,484		70,397		217,463		44,531		566,947		114,928
Equity securities and mutual funds			36,129		8,309		—		—		36,129		8,309
	Total securities	$	385,613	$	78,706	$	217,463	$	44,531	$	603,076	$	123,237

        At December 31, 2008, total securities available-for-sale had a fair value of $2.14 billion, which included the temporarily impaired securities of $603.1 million in the table above. The remaining securities in the portfolio had a fair value of $1.54 billion, which included an unrealized gain of $28.9 million. As of December 31, 2008, the Company had 109 debt securities in an unrealized loss position, including 29 CMO securities, 10 mortgage-backed securities, 55 state and municipal securities and 15 other debt securities. As of December 31, 2008, the Company had 2,012 equity securities and 5

A-28

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 5. Securities Available-for-Sale (Continued)

mutual funds in an unrealized loss position. The largest component of the unrealized loss at December 31, 2008 was $88.3 million and related to collateralized mortgage obligations. The Company monitors the performance of the mortgages underlying these bonds. Although there has been some deterioration in collateral performance, the Company only holds the most senior tranches of each issue which provides protection against defaults. The Company attributes the unrealized loss on CMOs held largely to the current absence of liquidity in the credit markets and not to deterioration in credit quality. These securities remain highly rated by the rating agencies. The Company expects to receive all contractual principal and interest payments due on its debt securities and has the ability and intent to hold these investments until their fair value recovers or until maturity. The mortgages in these asset pools are relatively large and have been made to borrowers with strong credit history and significant equity invested in their homes. They are well diversified geographically. Nonetheless, significant further weakening of economic fundamentals coupled with significant increases in unemployment and substantial deterioration in the value of high end residential properties could extend distress to this borrower population. This could increase default rates and put additional pressure on property values. Should these conditions occur, the value of these securities could decline and trigger the recognition of an other-than-temporary impairment charge.

        Other debt securities includes the Company's investments in highly rated corporate debt and collateralized bond obligations backed by Trust Preferred Securities ("CDOs") issued by a geographically diverse pool of small- and medium-sized financial institutions. Liquidity pressures in 2008 caused a general decline in the value of corporate debt. Of the CDOs held at December 31, 2008, approximately 80% are the most senior tranches of each issue. CDO Notes that receive the residual cash flows from the asset pools comprise the remaining holdings. Refer to Collateralized Debt Obligation Income Notes above. The market for CDOs was inactive in 2008. The fair values of these securities were determined using an internal pricing model that incorporates assumptions about discount rates in an illiquid market, projected cash flows and collateral performance. The Company attributes the $24.2 million unrealized loss on CDOs at December 31, 2008 to the illiquid credit markets. The senior notes have collateral that exceeds the outstanding debt by over 35% and are rated AAA by the rating agencies. Security valuations reflect the current and prospective performance of the issuers whose debt is contained in these asset pools. The Company expects to receive all contractual principal and interest payments due on its CDOs and has the ability and intent to hold these investments until their fair value recovers or until maturity.

        The Company's evaluation of equity securities and mutual funds for other-than-temporary impairment included consideration of issuer specific factors and the length of time and extent to which fair value has been less than cost. The $8.3 million unrealized loss on equity securities and mutual funds at December 31, 2008 has existed for less than six months. The Company attributes the unrealized loss to the current conditions in the financial markets that have negatively impacted equity valuations rather than to specific issuer circumstances. The DJIA and S&P 500 market indices decreased by approximately 34% and 38%, respectively, in 2008. The Company has the ability to hold these securities until their value recovers, however, continued declines in equity market valuations could result in additional impairment losses in a future reporting period.

        The Company does not consider the debt and equity securities in the above table to be other than temporarily impaired at December 31, 2008.

A-29

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 5. Securities Available-for-Sale (Continued)

        The following table provides a summary of the gross unrealized losses and fair value of investment securities that are not deemed to be other-than-temporarily impaired aggregated by investment category and length of time that the securities have been in a continuous unrealized loss position as of December 31, 2007:

		Less than 12 months				12 months or greater				Total
(in thousands)		Fair Value		Estimated Unrealized Loss		Fair Value		Estimated Unrealized Loss		Fair Value		Estimated Unrealized Loss
Federal agency		$	—	$	—	$	30,933	$	67	$	30,933	$	67
CMOs			51,989		279		875,376		14,432		927,365		14,711
Mortgage-backed			11,398		10		712,749		15,951		724,147		15,961
State and municipal			37,978		232		68,201		589		106,179		821
Other			22,781		1,328		8,220		541		31,001		1,869
	Total debt securities		124,146		1,849		1,695,479		31,580		1,819,625		33,429
Equity securities and mutual funds			17,654		437		—		—		17,654		437
	Total securities	$	141,800	$	2,286	$	1,695,479	$	31,580	$	1,837,279	$	33,866

        At December 31, 2007, total securities available-for-sale had a fair value of $2.46 billion, which included temporarily impaired securities of $1.84 billion in the table above. The remaining securities in the portfolio had a fair value of $625.4 million, which included an unrealized gain of $11.6 million.

        The following table provides the expected remaining maturities of debt securities included in the securities portfolio at December 31, 2008, except for mortgage-backed securities which are allocated according to their average expected maturities. Average expected maturities will differ from contractual maturities because mortgage debt issuers may have the right to repay obligations prior to contractual maturity.

                                                      Debt Securities Available-for-Sale

(in thousands)		One year or less		Over 1 year thru 5 years		Over 5 years thru 10 years		Over 10 years		Total
U.S. Treasury		$	46,197	$	—	$	—	$	—	$	46,197
Federal Agency			30,180		—		—		—		30,180
CMOs			35,597		659,713		179,775		—		875,085
Mortgage-backed			5,141		504,055		112,531		32,187		653,914
State and Municipal			31,858		147,796		170,524		62,852		413,030
Other			—		14,967		51,672		7,704		74,343
	Total debt securities	$	148,973	$	1,326,531	$	514,502	$	102,743	$	2,092,749
	Amortized cost	$	166,059	$	1,349,326	$	560,748	$	103,775	$	2,179,908

        Securities available-for-sale totaling $1.28 billion were pledged to secure trust funds, public deposits, repurchase agreements, or for other purposes required or permitted by law at December 31, 2008.

A-30

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 5. Securities Available-for-Sale (Continued)

        Interest income on available-for-sale securities is comprised of: (i) taxable interest income of $86.1 million, $105.8 million and $133.1 million for the years ended December 31, 2008, 2007, and 2006, respectively, (ii) nontaxable interest income of $15.1 million, $15.1 million and $13.6 million for the years ended December 31, 2008, 2007, and 2006, respectively, and (iii) dividend income of $3.2 million, $1.6 million and $2.2 million for the years ended December 31, 2008, 2007, and 2006, respectively.

Note 6. Federal Home Loan Bank and Federal Reserve Bank Stock

        The Company had $54.2 million and $48.8 million outstanding in government agency stock at December 31, 2008 and 2007, respectively. The Company records its investment in the stock of these government agencies at cost.

Note 7. Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments

        The following is a summary of the major categories of loans:

	December 31,
(in thousands)	2008		2007
Commercial	$	4,433,755	$	4,193,436
Residential mortgages		3,414,868		3,176,322
Commercial real estate mortgages		2,184,688		1,954,539
Real estate construction		1,252,034		1,429,761
Equity lines of credit		635,325		432,513
Installment loans		173,779		178,195
Lease financing		349,810		265,872
Total loans and leases	$	12,444,259	$	11,630,638

        The loan amounts above include net unamortized fees and costs of $6.8 million and $7.2 million as of December 31, 2008 and 2007, respectively.

        In the normal course of business, the Bank makes loans to executive officers and directors as well as loans to companies and individuals affiliated with or guaranteed by officers and directors of the Company and the Bank. These loans were made in the ordinary course of business at rates and terms no more favorable than those offered to others with a similar credit standing. The aggregate dollar amounts of these loans were $55.7 million and $33.2 million at December 31, 2008 and 2007, respectively. During 2008, new loans and advances totaled $53.9 million and repayments totaled $31.4 million. Interest income recognized on these loans amounted to $2.6 million, $4.4 million and $0.5 million during 2008, 2007, and 2006, respectively. At December 31, 2008, none of these loans was past due or on nonaccrual status. Based on analysis of information presently known to management about the loans to officers and directors and their affiliates, management believes all have the ability to comply with the present loan repayment terms.

        The Company has no residential mortgage loans with high LTVs (as defined in FDICIA as greater than 90 percent), loans with option ARM terms, as defined in SOP 94-6-1, Terms of Loan Products that May Give Rise to Concentration of Credit Risk, or that allow for negative amortization. The Company

A-31

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 7. Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Continued)

does offer interest-only loans. As of December 31, 2008 there were interest-only residential mortgages totaling approximately $873.7 million and home equity lines of credit totaling approximately $635.3 million. As of December 31, 2007, there were interest-only residential mortgages totaling approximately $612.9 million and home equity lines of credit totaling approximately $432.5 million.

        The Company's lending activities are predominantly in California, and to a lesser extent, New York and Nevada. Concentrations of credit risk arise when a number of clients are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. Although the Company has a diversified loan portfolio, a substantial portion of the loan portfolio and credit performance depends on the economic stability of Southern California. Credit performance also depends, to a lesser extent, on economic conditions in the San Francisco Bay area, New York and Nevada.

        Loans past due 90 days or more and still accruing interest were $663,000, $1,000 and $337,000 as of December 31, 2008, 2007 and 2006, respectively. There were no restructured loan balances at December 31, 2008, 2007, or 2006.

        The allowance for loan and lease losses and the reserve for off-balance sheet credit commitments are significant estimates that can and do change based on management's process in analyzing the loan and commitment portfolios and on management's assumptions about specific borrowers and applicable economic and environmental conditions, among other factors. The allowance for loan and lease losses and the reserve for off-balance sheet credit commitments which provide for the risk of losses inherent in the credit extension process, are increased by the provision for credit losses charged to operating expense and allowances acquired through acquisitions. The allowance for loan and lease losses is decreased by the amount of charge-offs, net of recoveries. There is no exact method of predicting specific losses or amounts that ultimately may be charged off on particular segments of the loan portfolio.

A-32

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 7. Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Continued)

        The following is a summary of activity in the allowance for loan and lease losses and reserve for off-balance sheet credit commitments:

		Year ended December 31,
(in thousands)		2008			2007			2006
Allowance for loan and lease losses
	Balance, beginning of the year	$	168,523		$	155,342		$	153,983
	Provision for credit losses		127,000			20,000			(610	)
	Transfers to reserve for off-balance sheet credit commitments		(2,999	)		(2,855	)		(828	)
	Allowance of acquired institution		—			4,513			—
	Charge-offs		(71,022	)		(14,231	)		(8,171	)
	Recoveries		2,544			5,754			10,968
Net loans (charged-off)/recovered			(68,478	)		(8,477	)		2,797
Balance, end of year		$	224,046		$	168,523		$	155,342
Reserve for off-balance sheet credit commitments
Balance, beginning of the year		$	19,704		$	16,424		$	15,596
Recovery of prior charge-off			—			(67	)		—
Provision for credit losses/transfers			2,999			2,855			828
Reserve of acquired institution			—			492			—
Balance, end of the year		$	22,703		$	19,704		$	16,424

        The following is a summary of nonaccrual loans and related interest foregone:

		December 31,
(in thousands)		2008		2007		2006
Nonaccrual loans		$	211,142	$	75,561	$	20,883
Contractual interest due		$	7,570	$	3,776	$	2,522
Interest collected and applied to principal			2,356		1,423		1,145
	Net interest foregone	$	5,214	$	2,353	$	1,377

        At December 31, 2008, there were $204.5 million of impaired loans included in nonaccrual loans, with an allowance allocation of $25.6 million. Impaired loans with an allocated allowance were $80.7 million and impaired loans without an allocated allowance were $123.8 million. The remaining $6.6 million of nonaccrual loans at December 31, 2008 are loans under $500,000 that are not individually evaluated for impairment. Impaired loans with commitments of less than $500,000 are aggregated for the purpose of measuring impairment using historical loss factors as a means of measurement. On a comparable basis, at December 31, 2007, there were $71.4 million of impaired loans which had an allowance of $8.4 million allocated to them. At December 31, 2007, impaired loans with an allocated allowance were $24.7 million and impaired loans without an allocated allowance were $46.7 million. For 2008, 2007, and 2006, the average balances of all impaired loans were $139.6 million, $33.7 million, and $14.4 million, respectively. During 2008, 2007, and 2006, no interest income was recognized on impaired loans until the principal balances of these loans were paid off.

A-33

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 7. Loans, Allowance for Loan and Lease Losses, and Reserve for Off-Balance Sheet Credit Commitments (Continued)

        The Company has pledged eligible residential first mortgages, equity lines of credit and commercial loans totaling $4.22 billion as collateral for its borrowing facility at the Federal Home Loan Bank of San Francisco.

Other Real Estate Owned

        The Company had an OREO balance of $11.4 million at December 31, 2008. In comparison, the Company had no OREO at December 31, 2007. During 2008, the Company sold OREO properties with a carrying value of $12.6 million for a net loss of $0.2 million. There were no OREO sales during the year ended December 31, 2007.

Note 8. Premises and Equipment

        The following is a summary of data for the major categories of premises and equipment:

(in thousands)			Cost		Accumulated Depreciation And Amortization		Carrying Value		Range of Lives
December 31, 2008
	Premises, including land of $3,586		$	136,391	$	74,381	$	62,010	0 to 39 years
	Furniture, fixtures and equipment			155,740		119,250		36,490	3 to 10 years
	Software			75,152		42,358		32,794	5 years
		Total	$	367,283	$	235,989	$	131,294
December 31, 2007
	Premises, including land of $3,586		$	127,211	$	67,296	$	59,915	0 to 39 years
	Furniture, fixtures and equipment			146,081		109,362		36,719	3 to 10 years
	Software			59,134		37,701		21,433	5 years
		Total	$	332,426	$	214,359	$	118,067

        Depreciation and amortization expense was $22.2 million in 2008, $20.9 million in 2007, and $19.1 million in 2006. Net rental payments on operating leases included in Net occupancy of premises in the consolidated statements of income were $41.8 million in 2008, $36.3 million in 2007, and $33.7 million in 2006.

A-34

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 8. Premises and Equipment (Continued)

        The future net minimum rental commitments were as follows at December 31, 2008:

(in thousands)	Net Minimum Rental Commitments
2009	$	32,165
2010		30,658
2011		29,583
2012		26,060
2013		22,124
Thereafter		92,638
	$	233,228

        The rental commitment amounts in the table above reflect the contractual obligations of the Company under all leases. Lease obligations related to acquisitions have been adjusted to current market values through purchase accounting adjustments. The allowance thus created is being accreted over the terms of the leases and reduces the total expense recognized by the Company in its operating expenses. At December 31, 2008, the Company is contractually entitled to receive minimum future rentals of $5.9 million under non-cancelable sub-leases with terms through 2038.

        A majority of the leases provide for the payment of taxes, maintenance, insurance, and certain other expenses applicable to the leased premises. Many of the leases contain extension provisions and escalation clauses.

Note 9. Income Taxes

        Income taxes (benefits) in the consolidated statements of income include the following amounts:

(in thousands)			Current		Deferred			Total
2008
	Federal		$	90,631	$	(58,541	)	$	32,090
	State			34,881		(19,566	)		15,315
		Total	$	125,512	$	(78,107	)	$	47,405
2007
	Federal		$	103,372	$	(5,012	)	$	98,360
	State			33,751		(1,451	)		32,300
		Total	$	137,123	$	(6,463	)	$	130,660
2006
	Federal		$	101,138	$	(1,388	)	$	99,750
	State			32,787		826			33,613
		Total	$	133,925	$	(562	)	$	133,363

        The Company had income taxes payable of $1.0 million and $14.3 million as of December 31, 2008 and 2007, respectively, and income taxes receivable of $19.2 million as of December 31, 2006.

A-35

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 9. Income Taxes (Continued)

        The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities at December 31, 2008 and 2007 are presented below:

			December 31,
(in thousands)			2008			2007
Deferred tax assets:
	Allowance for credit losses		$	132,041		$	78,118
	Accrued expenses			28,552			26,753
	Depreciation			8,515			5,911
	Unrealized gains on cash flow hedges			(4,232	)		(1,890	)
	Unrealized losses on available-for-sale securities			38,811			9,195
	Share-based compensation			10,887			10,885
	Basis difference in investments			29,217			5,319
	Other			10,198			6,396
		Total gross deferred tax assets		253,989			140,687
Deferred tax liabilities:
	Core deposit and other intangibles			5,641			8,516
	State income taxes			2,949			(3,721	)
	Deferred loan origination costs			4,910			2,368
	Prepaid expenses			1,012			1,287
	Other			12,623			2,834
		Total gross deferred tax liabilities		27,135			11,284
Net deferred tax assets			$	226,854		$	129,403

        The tax benefit of deductible temporary differences and tax carry forwards are recorded as an asset to the extent that management assesses the utilization of such temporary differences and carry forwards to be "more likely than not." As of any period end, the amount of the deferred tax asset that is considered realizable could be reduced if estimates of future taxable income are reduced. Management expects to have sufficient taxable income in future years to fully realize the deferred tax assets recorded at December 31, 2008, and has determined that a valuation reserve is not required for any of its deferred tax assets.

A-36

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 9. Income Taxes (Continued)

        Income taxes resulted in effective tax rates that differ from the statutory federal income tax rate for the following reasons:

	Percent of Pretax Income (Loss)
	2008			2007			2006
Statutory rate		35.0	%		35.0	%		35.0	%
Net state income tax		5.7			5.9			6.1
Tax exempt income		(5.8	)		(2.4	)		(2.3	)
Affordable housing investments		(2.6	)		(0.8	)		(1.3	)
All other, net		(1.2	)		(0.8	)		(1.1	)
Effective tax rate		31.1	%		36.9	%		36.4	%

        The Internal Revenue Service ("IRS") completed its audits of the Company for the tax years 2002-2007 resulting in no material financial statement impact. The Company is currently being audited by the IRS for the 2008 year and by the California Franchise Tax Board for the years 1998-2004. The potential financial statement impact, if any, resulting from completion of these audits cannot be determined at this time.

        From time to time, there may be differences in opinions with respect to the tax treatment accorded transactions. If a tax position which was previously recognized on the financial statements is no longer "more likely than not" to be sustained upon a challenge from the taxing authorities, the tax benefit from the tax position will be derecognized. As of December 31, 2008, the Company does not have any tax positions which dropped below a "more likely than not" threshold.

        The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, on January 1, 2007. Upon adoption, the Company recognized a cumulative effect adjustment of approximately $28.0 million, comprising a $25.2 million increase to its tax liability and $2.8 million increase in accrued interest. The adjustment was recorded as a charge to January 1, 2007 retained earnings and the contingent tax reserve. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

(in thousands)	2008			2007
Balance, beginning of the year	$	15,943		$	15,416
Additions based on tax positions related to the current year		—			433
Additions for tax positions of prior years		2,928			1,743
Reductions for tax positions of prior years		(1,201	)		(44	)
Settlements		(6,037	)		(1,605	)
Balance, end of the year	$	11,633		$	15,943

        As of December 31, 2008 and 2007, the total tax liabilities associated with unrecognized tax benefits that, if recognized, would impact the effective tax rate is $2.2 million and $10.8 million, respectively.

        The Company recognizes accrued interest and penalties related to unrecognized tax benefits as an income tax provision expense. The Company recognized approximately $1.7 million and $1.3 million of

A-37

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 9. Income Taxes (Continued)

interest and penalties expense for the years ended December 31, 2008 and 2007, respectively. The Company had approximately $6.3 million and $7.8 million of accrued interest and penalties as of December 31, 2008 and 2007, respectively.

Note 10. Goodwill and Intangibles

        The following table summarizes the Company's goodwill and other intangible assets as of December 31, 2008 and December 31, 2007:

(in thousands)		December 31, 2007			Additions			Reductions			December 31, 2008
Goodwill		$	486,461		$	9,808		$	(2,870	)	$	493,399
Accumulated amortization			(33,981	)		—			—			(33,981	)
	Net goodwill	$	452,480		$	9,808		$	(2,870	)	$	459,418
Customer-Relationship Intangibles
Core deposit intangibles		$	47,127		$	—		$	—		$	47,127
Accumulated amortization			(29,999	)		(5,729	)		—			(35,728	)
Client advisory contracts			59,360			—			(20,698	)		38,662
Accumulated amortization			(8,841	)		(3,541	)		2,940			(9,442	)
	Net intangibles	$	67,647		$	(9,270	)	$	(17,758	)	$	40,619

        During 2008, the Company recorded a purchase accounting adjustment related to its May 2007 acquisition of Convergent Wealth that resulted in a reclassification of $9.3 million from client advisory contract intangibles to goodwill. There was a corresponding reduction in accumulated amortization of $0.9 million. Additionally, goodwill increased due to contingent consideration related to the acquisition of Independence Investments in accordance with the terms of the purchase agreement. The reduction in goodwill includes a $2.1 million purchase accounting adjustment related to the February 2007 acquisition of BBNV.

        In addition to the Convergent Wealth adjustment discussed above, client advisory contract intangibles and accumulated amortization were reduced by $11.4 million and $2.0 million, respectively, due to an impairment write down related to a wealth management affiliate. Refer to Impairment Assessment below. Additions to accumulated amortization on customer-relationship intangibles reflect recurring amortization net of the $0.9 million adjustment related to Convergent Wealth. Customer relationship intangibles are amortized over their estimated lives. At December 31, 2008, the estimated aggregate amortization of intangibles for the years 2009 through 2013 is $6.2 million, $5.8 million, $5.3 million, $3.2 million, and $2.8 million, respectively.

Impairment Assessment

        Management completed an assessment of goodwill and intangibles for impairment during the fourth quarter of 2008. The goodwill assessment was completed at a reporting unit level. Fair values were determined using methods consistent with current industry practices for valuing similar types of companies. A market multiple of net income was used to value the Bank reporting unit. The fair values of the wealth management affiliates were largely based on multiples of distributable revenue. Based upon the analysis performed, the fair values of the reporting units exceeded their carrying value

A-38

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 10. Goodwill and Intangibles (Continued)

(including goodwill); therefore, management concluded that no impairment of goodwill existed at December 31, 2008. In light of the recent continuing decline in the stock market performance of financial services companies, including many whose book value per share substantially exceeds the quoted market price per share, management believes it will be necessary to continue to evaluate goodwill for impairment on a quarterly basis. Should such declines continue and recent market and economic conditions persist, it is possible that a future conclusion could be reached that all or a portion of the Company's goodwill was impaired, in which case a non-cash charge for the amount of such impairment would be recorded in operations. Such a charge, if any, would have no impact on tangible capital and would not affect the Company's "well-capitalized" designation.

        The assessment of customer-relationship intangibles for impairment was completed at the individual asset level. The fair value of core deposit intangibles was determined using market-based core deposit premiums from recent deposit sale transactions. The fair value of core deposit intangibles exceeded their carrying amount at December 31, 2008. For client advisory contract intangibles recorded by the wealth management affiliates, the undiscounted projected future cash flows associated with the client contracts was compared to their carrying value to determine whether there was impairment. It was determined that the contract intangible for one wealth management affiliate was impaired due to the loss of client contracts, including the loss of a significant amount of assets managed for the prior owner of the affiliate, as well as a significant decrease in the market value of assets under management. This contract intangible was written down by $9.4 million to zero at December 31, 2008. The impairment loss is recognized in Amortization of intangibles in the consolidated income statements. Management concluded that no other impairment of customer-relationship intangibles existed at December 31, 2008.

Note 11. Retirement Plans

        The Company has a profit sharing retirement plan with an Internal Revenue Code Section 401(k) feature covering eligible employees. Employer contributions are made on an annual basis into a trust fund and are allocated to the participants based on their salaries. The profit sharing contribution requirement is based on a percentage of annual operating income subject to a percentage of salary cap. For 2008, 2007, and 2006, the Company recorded total contributions expense of $16.2 million, $15.6 million, and $12.8 million, respectively.

        Eligible employees may contribute up to 50 percent of their salary to the 401(k) plan, but not more than the maximum allowed under Internal Revenue Service regulations. The Company matches 50 percent of the first 6 percent of covered compensation. For 2008, 2007, and 2006, the Company's matching contribution included in the total contribution above was $4.8 million, $3.5 million, and $3.1 million, respectively.

        During 2002, a Supplemental Executive Retirement Plan ("SERP") was created for one of the officers of the Company. The SERP meets the definition of a pension plan, per FASB Statement No. 87, Employers' Accounting for Pensions. The Company applies FASB Statement No. 158, Accounting for Defined Benefit Pension and Other Postretirement Plans ("SFAS 158"), in accounting for the SERP. At December 31, 2008, there was a $4.2 million unfunded pension liability. Total pension expense in each of the years ending December 31, 2008, 2007, and 2006 was $0.5 million, $0.8 million, and $0.8 million, respectively.

A-39

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 11. Retirement Plans (Continued)

        There is also a SERP covering three former executives of the Pacific Bank, which the Company acquired in 2000. At December 31, 2008, there was a $2.3 million unfunded pension liability for this SERP. Total pension expense was $0.2 million in each of the years ending December 31, 2008, 2007, and 2006.

        The Company does not provide any other post-retirement employee benefits beyond the profit sharing retirement plan and the SERPs.

Note 12. Share-Based Compensation Plans

        The Company applies SFAS 123R in accounting for share-based compensation plans. The Company uses a Black-Scholes model to determine share-based compensation expense.

        On December 31, 2008, the Company had one share-based compensation plan, the City National Corporation 2008 Omnibus Plan (the "Plan"), which was approved by the Company's shareholders on April 23, 2008. No new awards will be granted under predecessor plans. A description of the Plan is provided below. The compensation cost that has been recognized for all share-based awards was $14.7 million, $13.9 million and $12.3 million for 2008, 2007 and 2006, respectively. The Company received $20.5 million and $25.9 million in cash for the exercise of stock options during 2008 and 2007, respectively. The tax benefit recognized in equity for share-based compensation arrangements was $2.9 million and $5.0 million for the years ending December 31, 2008 and December 31, 2007, respectively.

Share-based Compensation Plan

        The Plan permits the grant of stock options, restricted stock, restricted stock units, performance shares, performance share units, performance units and stock appreciation rights, or any combination thereof, to the Company's eligible employees and non-employee directors. No grant of performance shares, performance share units, performance units or stock appreciation rights had been made as of December 31, 2008. The purpose of the Plan is to promote the success of the Company by providing an additional means to attract, motivate, retain and reward key employees of the Company with awards and incentives for high levels of individual performance and improved financial performance of the Company, and to link non-employee director compensation to shareholder interest through equity grants. Stock option awards are granted with an exercise price equal to the market price of the Company's stock at the date of grant. These awards vest in four years and have 10-year contractual terms. Restricted stock awards granted under the Plan vest over a period of at least three years, as determined by the Compensation, Nominating and Governance Committee (the "CNG Committee"). The participant is entitled to dividends and voting rights for all shares issued even though they are not vested. Restricted stock awards issued under predecessor plans vest over five years. The Plan provides for acceleration of vesting if there is a change in control (as defined in the Plan) or a termination of service, which may include disability or death. Unvested options are forfeited upon termination of employment, except for those instances noted above, and the case of the retirement of a retirement-age employee for options granted prior to January 31, 2006. All unexercised options expire 10 years from the grant date. At December 31, 2008, there were approximately 4.1 million shares available for future grants.

        The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model that uses the assumptions noted in the following table. The Company evaluates

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CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 12. Share-Based Compensation Plans (Continued)

exercise behavior and values options separately for executive and non-executive employees. Expected volatilities are based on the historical volatility of the Company's stock. As of February 2008, the Company began using a 20-year look back period to calculate the volatility factor. The longer look back period reduces the impact of the recent disruptions in the capital markets, and provides values that management believes are more representative of expected future volatility. Prior to this date, the Company used a look back period equal to the expected term of the options. The Company uses historical data to predict option exercise and employee termination behavior. The expected term of options granted is derived from the historical exercise activity over the past 20 years and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield is equal to the dividend yield of the Company's stock at the time of the grant.

        To estimate the fair value of stock option awards, the Company uses the Black-Scholes valuation method, which incorporates the assumptions summarized in the table below:

	December 31,
	2008			2007			2006
Weighted-average volatility		29.35	%		21.80	%		23.96	%
Dividend yield		3.57	%		2.54	%		2.29	%
Expected term (in years)		6.04			6.14			5.99
Risk-free interest rate		3.95	%		4.60	%		4.69	%

A-41

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 12. Share-Based Compensation Plans (Continued)

        A summary of stock option activity and related information for the years ended December 31, 2008, 2007, and 2006 are presented in the tables below:

Options	Number of Shares (in thousands)			Weighted Average Exercise Price		Aggregate Intrinsic Value (in thousands) (1)		Weighted Average Remaining Contractual Term
Outstanding at January 1, 2008		4,171		$	52.60
Granted		644			54.03
Exercised		(622	)		32.95
Forfeited or expired		(164	)		66.89
Outstanding at December 31, 2008		4,029		$	55.28	$	12,277		5.35
Exercisable at December 31, 2008		2,762		$	51.30	$	12,082		3.95

(1)

Includes in-the-money options only

	2007					2006
Options	Number of Shares (in thousands)			Weighted Average Exercise Price		Number of Shares (in thousands)			Weighted Average Exercise Price
Outstanding at January 1		4,295		$	49.54		4,375		$	45.98
BBNV acquisition		109			10.77		—			—
Granted		553			73.47		479			75.51
Exercised		(653	)		39.90		(471	)		40.41
Forfeited or expired		(133	)		68.31		(88	)		63.05
Outstanding at December 31		4,171		$	52.60		4,295		$	49.54
Exercisable		3,030		$	45.20		3,156		$	42.89

        Using the Black-Scholes model, the weighted-average grant-date fair values of options granted during the years ended December 31, 2008, 2007 and 2006 were $12.65, $16.62, and $19.53, respectively. The total intrinsic values of options exercised during the years ended December 31, 2008, 2007 and 2006 were $11.4 million, $13.2 million, and $14.5 million, respectively.

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CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 12. Share-Based Compensation Plans (Continued)

        A summary of changes in unvested option and related information for the year ended December 31, 2008 is presented below:

Unvested Shares	Number of Shares (In thousands)			Weighted-Average Grant-Date Fair Value
Unvested at January 1, 2008		1,141		$	17.29
Granted		644			12.65
Vested		(425	)		16.87
Forfeited		(93	)		16.35
Unvested at December 31, 2008		1,267		$	15.15

        The number of options vested during the year ended December 31, 2008 was 424,780. The total fair value of options vested during 2008 was $7.2 million. As of December 31, 2008, there was $13.0 million of unrecognized compensation cost related to unvested stock options granted under the Plan. That cost is expected to be recognized over a weighted-average period of 2.4 years.

        During 2008, the Company issued 621,606 treasury shares in connection with the exercise of stock options. The Company issued 653,369 and 470,924 treasury shares in connection with the exercise of stock options in 2007 and 2006, respectively.

        The detail of outstanding and exercisable options at December 31, 2008 is as follows:

	Options Outstanding						Options Exercisable
	Number of Shares Outstanding (In thousands)		Weighted Average Remaining Life (Yrs)		Weighted Average Outstanding Price		Number of Shares Exercisable (In thousands)		Weighted Average Exercise Price
Options issued at prices less than $19.99 per share		12		2.90	$	6.17		12	$	6.17
Options issued at prices between $20.00 and $35.99 per share		193		1.15		27.42		193		27.42
Options issued at prices between $36.00 and $44.99 per share		572		2.36		37.64		538		37.27
Options issued at prices between $45.00 and $69.99 per share		2,422		5.63		55.05		1,701		54.24
Options issued at prices between $70.00 and $74.99 per share		481		8.01		74.31		141		73.97
Options issued at prices between $75.00 and $84.99 per share		349		7.12		76.63		177		76.63
		4,029						2,762

        At December 31, 2008, 2,572,396 nonqualified stock options and 190,018 incentive stock options on the Company's common stock were exercisable under the plans.

        The Plan provides for granting of restricted shares of Company stock to employees. Twenty-five percent of the restricted stock vests two years from the date of grant, then twenty-five percent vests on

A-43

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 12. Share-Based Compensation Plans (Continued)

each of the next three consecutive grant anniversary dates. The restricted stock is subject to forfeiture until the restrictions lapse or terminate.

        Restricted stock is valued at the closing price of the Company's stock on the date of award. During 2008, the CNG Committee awarded 174,658 shares of restricted common stock having a market value of $9.5 million. During 2007, the CNG Committee awarded 145,139 shares of restricted common stock having a market value of $10.2 million and in 2006, 123,944 shares with a corresponding market value of $9.1 million were awarded. The portion of the market value of the restricted stock related to the current service period was recognized as compensation expense in 2008, 2007 and 2006. The portion of the market value relating to future service periods will be amortized over the remaining vesting period. The compensation expense related to restricted stock for 2008 was $7.5 million $5.7 million and $5.2 million in 2008, 2007 and 2006, respectively. As of December 31, 2008, the unrecognized compensation cost related to restricted shares granted under the plan was $17.4 million. There were 436,345 restricted shares that had not vested as of December 31, 2008.

Note 13. Deposits and Borrowed Funds

        The following table sets forth the maturity distribution of time deposits as of December 31, 2008:

(in millions)	2009		2010		2011		2012		2013		2014 and after		Total
Time deposits, $100,000 and over	$	1,359.2	$	56.9	$	13.3	$	6.2	$	5.1	$	1.3	$	1,442.0
Other Time Deposits		214.5		11.7		3.6		2.8		1.9		0.2		234.7
	$	1,573.7	$	68.6	$	16.9	$	9.0	$	7.0	$	1.5	$	1,676.7

        Details regarding federal funds purchased and securities sold under repurchase agreements as well as other short-term borrowings follow:

	2008							2007							2006
(in thousands)	Balances at Year-end		Average Balance		Average Rate			Balances at Year-end		Average Balance		Average Rate			Balances at Year-end		Average Balance		Average Rate
Overnight federal funds purchased and securities sold under repurchase agreements	$	708,157	$	898,731		2.18	%	$	1,344,411	$	566,080		4.99	%	$	422,903	$	541,671		4.89	%
Term securities sold under repurchase agreements		200,000		200,000		3.99			200,000		96,849		4.38			—		—		—
Other short-term borrowings		124,500		667,457		2.69			100,000		153,096		5.00			97,525		135,900		4.80

        The maximum amount of overnight federal funds purchased and securities sold under agreements to repurchase (both overnight and term) outstanding at any month-end was $1.56 billion, $1.54 billion, and $0.84 billion in 2008, 2007, and 2006, respectively. The average amount of securities sold under agreements to repurchase was $202.1 million, $101.0 million and $15.2 million during 2008, 2007, and 2006, respectively. At December 31, 2008, the Company had delivered securities with a fair value of $223.5 million as collateral for the term repurchase agreements and associated interest payable. The securities underlying the agreements to repurchase remain under the Company's control.

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CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 13. Deposits and Borrowed Funds (Continued)

        Additional detail on the components of other short-term borrowings and long-term debt is provided below:

			December 31,
(in thousands)			2008		2007
Other short-term borrowings:
	Treasury, tax and loan note		$	24,500	$	100,000
	Federal Home Loan Bank advances			100,000		—
		Total	$	124,500	$	100,000
Current portion of subordinated debt				—		115,850
Subordinated debt				161,595		157,709
		Total	$	161,595	$	273,559
Long-term debt:
	Senior notes		$	241,069	$	225,981
	Other long-term notes			5,485		7,484
		Total	$	246,554	$	233,465

        Short-term borrowings consist of funds with remaining maturities of one year or less, and long-term debt consists of borrowings with remaining maturities greater than one year. The maximum amount of other short-term borrowings at any month-end was $955.0 million, $359.3 million, and $505.3 million in 2008, 2007, and 2006, respectively.

        The Company has a remaining borrowing capacity of $2.48 billion as of December 31, 2008, secured by collateral, from the Federal Home Loan Bank of San Francisco, of which the Bank is a member.

        Subordinated debt consists of City National Bank 6.75 percent 10-year notes with a face value of $150.0 million due on September 1, 2011. Interest on the notes is payable semi-annually in arrears. The carrying value of the City National Bank subordinated notes is net of the impact of fair value hedge accounting and issuance costs which are being amortized into interest expense to yield an effective interest rate of 6.92 percent.

        Long-term debt consists of City National Corporation 5.125 percent ten-year senior notes with a face value of $220.9 million due on February 15, 2013, Business Bank Corporation trust preferred debentures with a face value of $5.2 million maturing on November 23, 2034, and notes payable described below. The carrying value of the senior notes is net of the impact of fair value hedge accounting and issuance costs which are being amortized into interest expense to yield an effective interest rate of 5.28 percent. The rate on the trust preferred debentures is LIBOR plus 1.965 percent.

        The remaining notes payable relate to the purchase of interests in various CCM affiliates. The CCM notes accrue interest at 7.5 percent and mature in 2010. Interest on the notes is payable semi-annually in arrears.

A-45

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 14. Derivative Financial Instruments

Interest Rate Risk Management

        The Company uses interest-rate swaps to reduce cash flow variability and to moderate changes in fair value of financial instruments. The following table presents the notional amount and fair value of interest-rate swaps:

				December 31, 2008					December 31, 2007
(in millions)				Notional Amount		Fair Value			Notional Amount		Fair Value
Fair Value
	Interest Rate Swap
		Certificates of deposit		$	20.0	$	1.4		$	20.0	$	0.9
		Long-term and subordinated debt			370.9		34.7			490.9		11.1
			Total fair value hedge swaps		390.9		36.1			510.9		12.0
Cash Flow Hedge
	Interest Rate Swap
		US Dollar LIBOR based loans			200.0		8.4			100.0		3.9
		Prime based loans			125.0		3.7			250.0		0.8
			Total cash flow hedge swaps		325.0		12.1			350.0		4.7
Fair Value and Cash Flow Hedge
	Interest Rate Swaps			$	715.9	$	48.2	(1)	$	860.9	$	16.7	(1)

(1)

Net fair value is the estimated net gain (loss) to settle derivative contracts. The net fair value is the sum of the mark-to-market asset (if applicable) and mark-to-market liability.

        As of December 31, 2008, the Company had $715.9 million notional amount of interest-rate swaps, of which $390.9 million were designated as fair value hedges and $325.0 million were designated as cash flow hedges. The positive fair value of the fair value hedges, consisting of positive mark-to-market of $35.0 million and net interest receivable of $1.1 million, resulted in the recognition of other assets and an increase in hedged deposits and borrowings of $36.1 million. The positive fair value of $12.1 million on the cash flow hedges of variable-rate loans resulted in the recognition of other assets and an other comprehensive gain, and included a positive mark-to-market of $11.5 million, before taxes of $4.8 million, and net interest receivable of $0.6 million.

        Amounts to be paid or received on the interest-rate swaps designated as cash flow hedges are reclassified into earnings upon receipt of interest payments on the underlying hedged loans, including amounts totaling $5.5 million that were reclassified into net interest income during 2008. Within the next 12 months, $7.7 million of other comprehensive gain is expected to be reclassified into net interest income.

        As of December 31, 2007, the Company had $860.9 million notional amount of interest-rate swaps, of which $510.9 million were designated as fair value hedges and $350.0 million were designated as cash flow hedges. The positive mark-to-market on the fair value hedges resulted in the recognition of other assets and an increase in hedged deposits and borrowings of $12.0 million. The positive

A-46

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 14. Derivative Financial Instruments (Continued)

mark-to-market on the cash flow hedges of variable-rate loans resulted in the recognition of other assets, other liabilities, and an other comprehensive gain of $4.7 million, before taxes of $2.0 million.

        Interest-rate swap agreements involve the exchange of fixed and variable-rate interest payments based upon a notional principal amount and maturity date. The Company's interest-rate swaps had $15.6 million of credit risk exposure at December 31, 2008 and $12.1 million as of December 31, 2007. The credit exposure represents the cost to replace, on a present value basis and at current market rates, all contracts by trading counterparty having an aggregate positive market value, net of margin collateral received. The Company enters into master netting agreements with swap counterparties to mitigate credit risk. The Company's swap agreements require the deposit of cash or marketable debt securities as collateral for this risk if it exceeds certain thresholds. These requirements apply individually to the Corporation and to the Bank. At December 31, 2008 collateral valued at $19.9 million had been received from swap counterparties. At December 31, 2007 collateral valued at $5.5 million had been received from swap counterparties.

        The following tables present the interest-rate swap maturities and average rates as of December 31, 2008 and 2007:

Interest-Rate Swap Maturities and Average Rates
December 31, 2008

(in millions)	2009			2010			2011			2012		2013			Thereafter			Total			Fair Value
Notional amount	$	25.0		$	185.0		$	285.0		$	—	$	220.9		$	—		$	715.9		$	48.2
Weighted average rate received		7.97	%		5.41	%		4.79	%		—		4.38	%		—	%		4.93	%
Weighted average rate paid		3.25	%		1.59	%		1.61	%		—		2.15	%		—	%		1.83	%

Interest-Rate Swap Maturities and Average Rates
December 31, 2007

(in millions)	2008			2009			2010			2011		2012			Thereafter			Total			Fair Value
Notional amount	$	340.9		$	25.0		$	110.0		$	160.0	$	—		$	225.0		$	860.9		$	16.7
Weighted average rate received		6.99	%		7.97	%		5.31	%		5.57		—	%		4.38	%		5.86	%
Weighted average rate paid		6.62	%		7.25	%		4.66	%		5.11		—	%		4.87	%		5.65	%

        The periodic net settlement of interest rate risk management instruments is recorded as an adjustment to net interest income. These fair value and cash flow swaps increased net interest income by $12.8 million in 2008 and decreased net income by $5.4 million in 2007. The fair value and cash flow swaps decreased net interest income by $9.6 million in 2006.

Other Derivatives

        The Company also offers interest-rate swaps and interest-rate caps, floors and collars to its clients to assist them in hedging their cash flow and operations. These derivative contracts are offset by paired trades with unrelated third parties. They are not designated as hedges under SFAS 133, and the positions are marked to market each reporting period. As of December 31, 2008, the Company had entered into swaps with clients (and offsetting derivative contracts with counterparties) having a notional balance of $302.2 million.

A-47

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 14. Derivative Financial Instruments (Continued)

        The Company offers a certificate of deposit product which provides a return based on the performance of an equity index. Under SFAS 133, a rate of return tied to a market index represents an embedded derivative. The embedded derivative associated with the certificate of deposit is treated as a written option contract with the depositer. The Company purchased offsetting options from a counterparty bank. These positions are not designated as hedges under SFAS 133 and are marked to market each reporting period. As of December 31, 2008, the notional balance of both the written and purchased options was $2.0 million.

Note 15. Variable Interest Entities

        The Company holds interests in certain special-purpose entities formed to provide affordable housing. The Company evaluates its interest in these entities to determine whether they meet the definition of a VIE and whether the company is required to consolidate the entities. The Company is not the primary beneficiary of the affordable housing VIEs in which it holds interests and is therefore not required to consolidate these entities. The investment in these entities is initially recorded at cost, which approximates the maximum exposure to loss as a result of the Company's involvement with these unconsolidated entities. Subsequently, the carrying value is amortized over the stream of available tax credits and benefits. The Company expects to recover its investments over time, primarily through realization of federal low-income housing tax credits. The balance of the investments in these entities was $74.6 million and $73.6 million at December 31, 2008 and December 31, 2007, respectively, and is included in Affordable housing investments in the consolidated balance sheets.

        At December 31, 2008, the Company had a significant variable interest in four affordable housing partnerships that meet the definition of VIE. These interests were acquired at various times from 1998 to 2001. The Company is not the primary beneficiary of these entities and is therefore, not required to consolidate these entities. The Company's maximum exposure to loss as a result of its involvement with these entities is limited to the $11.0 million aggregate carrying value of these investments as of December 31, 2008. There were no unfunded commitments for these affordable housing investments as of December 31, 2008.

        The Company also has ownership interests in several private equity investment funds that are VIEs. The Company is not a primary beneficiary and, therefore, is not required to consolidate these VIEs. The investment in these entities is carried at cost, which approximates the maximum exposure to loss as a result of the Company's involvement with these entities. The Company expects to recover its investments over time, primarily through the allocation of fund income or loss, gains or losses on the sale of fund assets, dividends, or interest income. The balance in these entities was $35.6 million and $28.4 million at December 31, 2008 and December 31, 2007, respectively, and is included in Other assets in the consolidated balance sheets. Income associated with these investments is reported in Other noninterest income in the consolidated statements of income. The Company reviews these assets at least quarterly for possible other-than-temporary impairment. The review typically includes an analysis of the facts and circumstances of each investment, the expectations for the investment's cash flows and capital needs, the viability of its business model and our exit strategy. If and when declines in value are considered to be other-than-temporary, the Company would reduce the asset value. The estimated loss would be recognized as a loss in Other noninterest income in the consolidated statements of income

A-48

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 15. Variable Interest Entities (Continued)

        In addition to the above, Convergent Wealth is the administrative manager of the Barlow Long-Short Equity Fund, a hedge fund that is a variable interest entity. Convergent Wealth is not a primary beneficiary and, therefore, is not required to consolidate this entity.

Note 16. Redeemable Minority Interests

        The Corporation holds a majority ownership interest in eight and a minority interest in one investment management and wealth advisory affiliates. In general, the management of each affiliate has a significant minority ownership position in their firm and supervises the day to day operations of the affiliate. The Corporation participates in quarterly board meetings with each affiliate and is in regular contact with each affiliate regarding their operations. In 2007, the Corporation acquired its newest wealth management affiliate, Convergent Wealth Advisors, formerly known as Lydian Wealth Management.

        The Corporation's investment in each affiliate is governed by operating agreements and other documents which provide the Corporation certain rights, benefits and obligations. Generally, these affiliate operating agreements direct a percentage of revenue allocable to fund affiliate operating expenses ("operating share") while the remaining portion of revenue ("distributable revenue") is allocable to profits to be distributed to the Corporation and other affiliate owners. The Corporation determines the appropriate method of accounting based upon these agreements and the factors contained therein. All majority-owned affiliates have met the criteria for consolidation and are accordingly included in the consolidated financial statements.

        For affiliate operations included in the consolidated financial statements, the portion of the income allocated to owners other than the Corporation is included in Minority interest expense in the consolidated statements of income. Minority interest on the consolidated balance sheets includes capital and undistributed income owned by the affiliate minority owners. All material intercompany balances and transactions have been eliminated. The Corporation applies the equity method of accounting to investments where it does not hold a majority equity interest. For equity method investments, the Corporation's share of income before taxes is included in Trust and investment fees.

        Most of the affiliate operating agreements provide the affiliate minority owners the conditional right to require the parent company to purchase a portion of their ownership interests at certain intervals ("put rights"). These agreements also provide the parent company a conditional right to require affiliate owners to sell their ownership interests to it upon their death, permanent disability or termination of employment, and also provide affiliate owners a conditional right to require the parent company to purchase such ownership interests upon the occurrence of specified events. Management is unable to predict when these specified events might occur. Additionally, in many instances the purchase of interests can be settled using a combination of cash and notes payable, and in all cases the parent company can consent to the transfer of these interests directly to other individuals.

        As of December 31, 2008, affiliate minority ownership interests with a redemption value of $20.6 million could be put to the Company over the next 10 years or longer under the put provisions in the affiliate operating agreements. The terms of the put provisions vary by agreement, but the value of the put is generally based on the application of multiples to distributable revenues. This estimate reflects the maximum obligation to purchase equity interests in the affiliates that may be put to the parent company by affiliate owners exercising their put rights under normal operating circumstances. The amount and timing of the obligation can be limited by various factors such as our ownership level,

A-49

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 16. Redeemable Minority Interests (Continued)

first rights of refusal by other minority owners and other factors contained in the affiliate operating agreements. In extraordinary circumstances, including but not limited to death or disability of affiliate minority owners, the estimated purchase obligations could be accelerated or be greater than the amounts shown. The parent company carries key man life insurance policies to fund a portion of the purchase obligations under certain circumstances.

Note 17. Disclosure about Fair Value of Financial Instruments

        The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash and due from banks—For these short-term instruments, the carrying amount is a reasonable estimate of fair value.

Securities available-for-sale and Trading account securities—For securities held as available-for-sale, the fair value is determined by quoted market prices, where available, or on observable market inputs appropriate for the type of security. If quoted market prices or observable market inputs are not available, discounted cash flows may be used to determine an appropriate fair value. For trading account securities, fair values are based on quoted market prices or dealer quotes.

Loans and leases—Loans are not recorded at fair value on a recurring basis. Nonrecurring fair value adjustments are periodically recorded on certain impaired loans that are measured for impairment based on the fair value of collateral. See Note 1, Fair Value Measurements. The fair value of loans for purposes of SFAS 107 is estimated by discounting future cash flows using discount rates that reflect our current pricing for loans with similar characteristics, such as loan type, credit risk and pricing (fixed or floating rate) and remaining maturity. The discount rates used in the valuation incorporate credit risk, prepayment assumptions appropriate for the type of loan being valued as well as an adjustment for a bid-offer spread to approximate an exit price. Due to the lack of a secondary market activity in these loan products, the Company has also incorporated a liquidity premium into the bid-offer spread for these products.

Derivative Contracts—The fair value of non-exchange traded (over-the-counter) derivatives consists of net unrealized gains or losses, accrued interest receivable or payable and any premiums paid or received.

Deposits—The fair value of demand and interest checking deposits, savings deposits, and certain money market accounts is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit is estimated using the rates currently offered for deposits of similar remaining maturities.

Federal funds purchased, Securities sold under repurchase agreements and Other short-term borrowings—The carrying amount is a reasonable estimate of fair value.

Structured repurchase agreements and Subordinated and long-term debt—The fair value of structured repurchase agreements and subordinated and long-term debt was estimated by discounting the future payments at current interest rates.

Commitments to extend credit—The fair value of these commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. The Company does not make

A-50

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 17. Disclosure about Fair Value of Financial Instruments (Continued)

fixed-rate loan commitments. The fair value of letters of guarantee and letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date.

Commitments to private equity and affordable housing funds—The fair value of commitments to invest in private equity and affordable housing funds is based on the estimated cost to terminate them or otherwise settle the obligation.

        The estimated fair values of financial instruments of the Company are as follows:

		December 31, 2008					December 31, 2007
(in millions)		Carrying Amount		Fair Value			Carrying Amount		Fair Value
Financial Assets:
	Cash and due from banks	$	279.9	$	279.9		$	365.9	$	365.9
	Due from banks—interest bearing		144.3		144.3			88.2		88.2
	Securities available-for-sale		2,144.9		2,144.9			2,462.7		2,462.7
	Trading account securities		295.6		295.6			293.4		293.4
	Loans and leases, net of allowance		12,220.2	$	12,515.8			11,462.1	$	11,695.3
	Derivative contracts		48.2		48.2			16.7		16.7
Financial Liabilities
	Deposits	$	12,652.1	$	12,663.7		$	11,822.5	$	11,826.5
	Federal funds purchased and securities sold under repurchase agreements		708.2		708.2			1,344.4		1,344.4
	Structured securities sold under repurchase agreements		200.0		218.0			200.0		205.3
	Other short-term borrowings		124.5		124.5			100.0		100.0
	Subordinated and long-term debt		408.1		369.6			507.0		533.8
	Commitments to extend credit		—		(13.1	)		—		(8.1	)
	Commitments to private equity and affordable housing funds		—		44.0			—		60.0

Note 18. Shareholders' Equity

        On August 7, 2007, the Company's Board of Directors authorized the Company to repurchase 1 million additional shares of the Company's stock following completion of its previously approved stock buyback initiative. Unless terminated earlier by resolution of the Board of Directors, the program will expire when the Company has repurchased all shares authorized for repurchase thereunder. On January 24, 2008, the Board of Directors authorized the Company to repurchase an additional 1 million shares of the Company's stock following completion of the August 7, 2007 buyback initiative. All purchases under the program are made in open market transactions and comply with the safe harbor provisions of SEC Rule 10B-18 regarding blackout periods and daily aggregate limits. The Company repurchased an aggregate of 421,500 shares of common stock in 2008, 1,495,800 shares in 2007 and 2,321,200 shares in 2006. The Company received no shares in payment for the exercise price of stock options.

A-51

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 18. Shareholders' Equity (Continued)

        The following table summarizes the Company's share repurchases for the year ended December 31, 2008:

Period	Total Number of Shares (or Units) Purchased		Average Price Paid per Share (or Unit)		Total number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
1/1/08 - 1/31/08		10,000	$	54.09		10,000		1,551,900
2/1/08 - 2/29/08		136,000	$	55.66		136,000		1,415,900
3/1/08 - 3/31/08		45,500	$	50.05		45,500		1,370,400
4/1/08 - 4/30/08		30,000	$	44.87		30,000		1,340,400
6/1/08 - 6/30/08		200,000	$	43.35		200,000		1,140,400
		421,500	$	48.41		421,500		1,140,400

        At December 31, 2008, the Corporation had 2.4 million shares of common stock reserved for issuance and 0.4 million shares of unvested restricted stock granted to employees and directors under share-based compensation programs.

        The components of accumulated other comprehensive loss are as follows:

	December 31,
(in thousands)	2008			2007
Net unrealized loss on securities available-for-sale	$	(54,861	)	$	(12,941	)
Net unrealized gain on cash flow hedges		7,029			3,487
Pension liability adjustment		(190	)		105
Total accumulated other comprehensive loss	$	(48,022	)	$	(9,349	)

        On November 21, 2008, City National Corporation received aggregate proceeds of $400 million from the United States Department of the Treasury ("Treasury") under the TARP Capital Purchase Program in exchange for 400,000 shares of cumulative perpetual preferred stock and a 10-year warrant to purchase up to 1,128,668 shares of the Company's common stock at an exercise price of $53.16 per share. The preferred stock and warrant were recorded in equity on a relative fair value basis at the time of issuance. The preferred stock was valued by calculating the present value of expected cash flows and the warrant was valued using an option valuation model. The allocated values of the preferred stock and warrant were approximately $389.9 million and $10.1 million, respectively. The preferred stock will be accreted to the redemption price of $400 million over five years. Cumulative dividends on the preferred stock are payable quarterly at the rate of 5 percent for the first five years and increasing to 9 percent thereafter. The effective pre-tax cost to the Company for participating in the TARP Capital Purchase Program is approximately 9.5 percent, consisting of 8.6 percent for dividends and 0.9 percent for the accretion on preferred stock, and is based on the statutory tax rate. The preferred stock may be redeemed by the Corporation after three years. Prior to the end of three years, subject to the provisions of the American Recovery and Reinvestment Act of 2009 ("ARRA") described below, the preferred stock may be redeemed by the Corporation only with proceeds from the

A-52

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 18. Shareholders' Equity (Continued)

sale of qualifying equity securities of the Corporation which results in aggregate gross proceeds to the Corporation of not less than 25% of the issue price of the preferred stock. The warrant has a 10-year term and is immediately exercisable upon its issuance, with an exercise price, subject to anti-dilution adjustments, equal to $53.16 per share of the common stock. If the Company receives aggregate proceeds of at least $400 million from sales of Tier 1 qualifying perpetual preferred stock prior to December 31, 2009, the number of shares to be delivered upon settlement of the warrant will be reduced by 50 percent.

        ARRA was signed into law on February 17, 2009. ARRA contains a wide variety of programs intended to stimulate the economy and provide for extensive infrastructure, energy, health, and education needs. In addition, ARRA imposes certain new executive compensation and corporate expenditure limits on all current and future TARP recipients, including the Corporation, until the institution has repaid the Treasury, which is now permitted under ARRA without the need to raise new capital, subject to the Treasury's consultation with the recipient's appropriate regulatory agency. When the institution has repaid the Treasury, the Treasury is to liquidate the warrant at the current market price.

        The preferred stock qualified as Tier 1 capital for regulatory reporting purposes.

A-53

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 19. Net Income per Common Share

        Calculations of basic and diluted net income per common share follow:

			For the year ended December 31,
(in thousands, except per share amounts)			2008			2007			2006
Basic
	Net income		$	104,956		$	222,713		$	233,523
	Dividends on preferred stock			(2,445	)		—			—
		Net income available to common shareholders	$	102,511		$	222,713		$	233,523
	Average common shares outstanding			50,934			50,783			50,720
	Average treasury shares outstanding			(2,553	)		(2,138	)		(1,852	)
	Average unvested restricted shares outstanding			(451	)		(411	)		(391	)
		Net average common shares outstanding		47,930			48,234			48,477
	Basic earnings per common share		$	2.14		$	4.62		$	4.82
Diluted
	Net income		$	104,956		$	222,713		$	233,523
	Dividends on preferred stock			(2,445	)		—			—
		Net income available to common shareholders	$	102,511		$	222,713		$	233,523
	Average common shares outstanding			50,934			50,783			50,720
	Average treasury shares outstanding			(2,553	)		(2,138	)		(1,852	)
		Net average common shares outstanding		48,381			48,645			48,868
	Stock option dilution adjustment			189			645			1,195
	Shares outstanding and equivalents			48,570			49,290			50,063
	Diluted earnings per common share		$	2.11		$	4.52		$	4.66

        Basic earnings per common share are calculated by dividing net income available to common shareholders by the weighted-average shares of common stock outstanding for the period less unvested restricted shares and units. Diluted earnings per common share give effect to all potential dilutive common shares, which consist of stock options and restricted shares and units that were outstanding during the period. Dividends earned on cumulative preferred stock (whether or not paid) are deducted from net income for purposes of calculating earnings per common share.

        The average price of the Company's common stock for the period is used to determine the dilutive effect of outstanding stock options utilizing the treasury stock method. Antidilutive stock options and common stock warrants are not included in the calculation of basic or diluted EPS. There were 3,275,644 outstanding stock options and 1,128,668 common stock warrants that were antidilutive at December 31, 2008. There were 1,701,091 and 509,749 outstanding stock options that were antidilutive at December 31, 2007 and 2006, respectively.

Note 20. Availability of Funds from Subsidiaries and Capital

        The Company is authorized to issue 5,000,000 shares of preferred stock. The Company's Board of Directors has the authority to issue the preferred stock in one or more series, and to fix the designations, rights, preferences, privileges, qualifications and restrictions, including dividend rights,

A-54

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 20. Availability of Funds from Subsidiaries and Capital (Continued)

conversion rights, voting rights, rights and terms of redemption, liquidation preferences, and sinking fund terms. On November 21, 2008, the Corporation received aggregate proceeds of $400 million from the Treasury under the TARP Capital Purchase Program in exchange for 400,000 shares of cumulative perpetual preferred stock and a 10-year warrant. See Note 18 for further discussion of the preferred stock issuance.

        During 2001, the Bank formed and funded CN Real Estate Investment Corporation ("CN"), a wholly-owned subsidiary of the Bank. City National Bank contributed cash and participation interest in certain loans in exchange for 100 percent of the common stock of CN. The net income and assets of CN are eliminated in consolidation for all periods presented. During 2001, CN sold 33,933 shares of 8.50 percent Series A Preferred Stock to accredited investors for $3.4 million which is included in Minority interest. During 2002, CN sold 6,828 shares of 8.5 percent Series B Preferred Stock to accredited investors for $6.8 million which is also included in minority interest. Dividends of $868,811, which are included in Minority interest expense, were paid in each of the years 2008, 2007 and 2006 on both of the preferred stock issues.

        During 2002, the Bank converted its former registered investment company, a wholly-owned subsidiary of the Bank, to a real estate investment trust to provide the Bank with flexibility in raising capital. The net income and assets of City National Real Estate Investment Corporation II ("CNII") are eliminated in consolidation for all periods presented. During 2002 and 2003, CNII sold 152,680 shares of 8.50 percent Series A Preferred Stock to accredited investors for $10.5 million which is included in Minority interest. Dividends of $1,297,780, which are included in Minority interest expense, were paid in each of the years 2008, 2007 and 2006.

        Historically, the majority of the funds for the payment of dividends by the Company have been obtained from the Bank. Dividends paid by the Bank to its parent company are subject to certain legal and regulatory limitations. In 2009, the Bank may pay dividends up to its net income for 2009, as defined by statute, through the date of any such dividend declaration, without prior regulatory approval. See Part I, Item 1 of the Form 10-K for a discussion of regulatory restrictions affecting the payment of dividends. Federal banking law also prohibits the Company from borrowing from the Bank on less than a fully secured basis. The Company had no borrowings from the Bank at either December 31, 2008 or December 31, 2007.

        The Corporation and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Corporation and the Bank must meet specific capital guidelines that involve quantitative measures of the Corporation's and Bank's assets, liabilities and certain off-balance sheet items as calculated under the regulatory accounting rules. The Corporation's and the Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

        Quantitative measures established by regulation to ensure capital adequacy require the Corporation and the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined). As of December 31, 2008, the Corporation and the Bank met and exceeded all capital adequacy requirements to which either is subject. Additionally, the regulatory agencies are required by law to take specific

A-55

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 20. Availability of Funds from Subsidiaries and Capital (Continued)

prompt action with respect to banks that do not meet minimum capital standards. As of December 31, 2008, the Bank was categorized as "well capitalized." There have been no events or circumstances that cause Management to believe that there would be a change in Corporation's and the Bank's category of "well capitalized."

        The Corporation's actual capital amounts and ratios are presented in the following table:

		Actual					Adequately Capitalized					Well Capitalized
(in millions)		Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2008
	Total capital (to risk weighted assets)	$	1,868.1		13.40	%	$	1,115.4		³ 8.0	%	$	1,394.3		³ 10.0	%
	Tier 1 capital (to risk weighted assets)		1,633.1		11.71	%		557.7		³ 4.0	%		836.6		³ 6.0	%
	Tier 1 capital (to average assets)		1,633.1		10.44	%		625.6		³ 4.0	%		—		—
As of December 31, 2007
	Total capital (to risk weighted assets)	$	1,452.5		11.27	%	$	1,030.9		³ 8.0	%	$	1,288.6		³ 10.0	%
	Tier 1 capital (to risk weighted assets)		1,199.4		9.31	%		515.4		³ 4.0	%		773.1		³ 6.0	%
	Tier 1 capital (to average assets)		1,199.4		7.97	%		601.8		³ 4.0	%		—		—

        The Bank's actual capital amounts and ratios are presented in the following table:

		Actual					Adequately Capitalized					Well Capitalized
(in millions)		Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2008
	Total capital (to risk weighted assets)	$	1,451.9		10.50	%	$	1,105.8		³ 8.0	%	$	1,382.2		³ 10.0	%
	Tier 1 capital (to risk weighted assets)		1,218.4		8.81	%		552.9		³ 4.0	%		829.3		³ 6.0	%
	Tier 1 capital (to average assets)		1,218.4		7.87	%		619.2		³ 4.0	%		—		—
As of December 31, 2007
	Total capital (to risk weighted assets)	$	1,430.6		11.24	%	$	1,018.5		³ 8.0	%	$	1,273.1		³ 10.0	%
	Tier 1 capital (to risk weighted assets)		1,181.5		9.28	%		509.2		³ 4.0	%		763.8		³ 6.0	%
	Tier 1 capital (to average assets)		1,181.5		7.95	%		594.8		³ 4.0	%		—		—

        Tier 1 capital ratios as of December 31, 2008 include the impact of $25.4 million of preferred stock issued by real estate investment trust subsidiaries of the Bank and $5.2 million of minority

A-56

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 20. Availability of Funds from Subsidiaries and Capital (Continued)

interest in wealth management affiliates, which are both included in minority interest in consolidated subsidiaries. Tier 1 capital ratios also include $5.2 million of trust preferred securities issued by an unconsolidated capital trust subsidiary of the holding company.

        The increase in the Corporation's Tier 1 capital ratio from 2007 to 2008 is a result of the $400 million in aggregate proceeds received in November 2008 from the Treasury's TARP Capital Purchase Program in exchange for shares of cumulative perpetual preferred stock and a 10-year warrant. The preferred stock qualified as Tier 1 capital for regulatory reporting purposes. See Note 18 for further discussion of the Company's participation in the Treasury's TARP Capital Purchase Program.

        The Company's shareholders' equity to assets was 12.42 percent as of December 31, 2008 and 10.42 percent at December 31, 2007. The Company's common shareholders' equity to assets was 10.05 percent as of December 31, 2008 and 10.42 percent at December 31, 2007. Tangible common shareholders' equity to period-end tangible assets was 7.23 percent and 7.39 percent as of December 31, 2008 and 2007, respectively.

Note 21. Commitments and Contingencies

        In the normal course of business, the Company is a party to financial instruments with off-balance sheet risk. These financial instruments include commitments to extend credit, letters of credit, and financial guarantees; and to invest in private equity and affordable housing funds. These instruments involve elements of credit, foreign exchange, and interest rate risk, to varying degrees, in excess of the amount reflected in the consolidated balance sheets.

        Exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit, letters of credit, and financial guarantees written is represented by the contractual notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

        Commitments to extend credit are agreements to lend to a client as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since a portion of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each client's creditworthiness on a case-by-case basis.

        The Company had outstanding off-balance sheet loan commitments aggregating $5.34 billion and $5.28 billion at December 31, 2008 and 2007, respectively, compared to outstanding loan balances of $12.44 billion and $11.63 billion, respectively. Substantially all of the Company's loan commitments are on a variable rate basis and are comprised of real estate and commercial loan commitments. In addition, the Company had $660.8 million and $840.2 million outstanding in bankers' acceptances and letters of credit at December 31, 2008 and 2007, respectively, of which $647.6 million and $822.1 million relate to standby letters of credit. Included in standby letters of credit were $618.2 million and $722.4 million of financial guarantees as of December 31, 2008 and 2007, respectively. Substantially all fees received from the issuance of financial guarantees are deferred and amortized on a straight-line basis over the terms of the guarantee. Collateral, generally in the form of

A-57

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 21. Commitments and Contingencies (Continued)

pledged certificates of deposit, is obtained on certain letters of credit in accordance with the Company's underwriting and credit approval policies.

        As of December 31, 2008, the Company had private equity fund and alternative investment commitments of $63.7 million of which $40.9 million was funded. As of December 31, 2007, the Company had private equity fund and alternative investment commitments of $62.7 million, of which $33.0 million was funded. At December 31, 2008 and 2007, the Company had Affordable Housing Fund commitments of $21.2 million and $30.3 million.

        In connection with the liquidation of an investment acquired in a previous bank merger, the Company has an outstanding long-term guarantee. The maximum liability under the guarantee is $23.0 million, but the Company does not expect to make any payments under the terms of this guarantee.

        The Company or its subsidiaries are defendants in various pending lawsuits claiming substantial amounts. Based upon present knowledge, management including in-house counsel does not believe that the final outcome of such lawsuits will have a material adverse effect on the Company.

Note 22. Segment Operations

        The Company has three reportable segments, Commercial and Private Banking, Wealth Management and Other. The factors considered in determining whether individual operating segments could be aggregated include that the operating segments: (i) offer the same products and services, (ii) offer services to the same types of clients, (iii) provide services in the same manner and (iv) they operate in the same regulatory environment. The management accounting process measures the performance of the operating segments based on the Company's management structure and is not necessarily comparable with similar information for other financial services companies. If the management structure and/or the allocation process changes, allocations, transfers and assignments may change.

        The Commercial and Private Banking reportable segment is the aggregation of the Commercial and Private Banking, Real Estate, Entertainment, Corporate Banking and Core Branch Banking operating segments. The Commercial and Private Banking segment provides banking products and services, including commercial and mortgage loans, lines of credit, deposits, cash management services, international trade finance and letters of credit to small and medium-sized businesses, entrepreneurs and affluent individuals. This segment primarily serves clients in California, New York and Nevada.

        The Wealth Management segment includes the Corporation's investment advisory affiliates and the Bank's Wealth Management Services. The asset management affiliates and the Wealth Management division of the Bank make the following investment advisory and wealth management resources and expertise available to individual and institutional clients: investment management, wealth advisory services, brokerage, estate and financial planning and personal, business, custodial and employee trust services. The Wealth Management segment also advises and makes available mutual funds under the name of CNI Charter Funds. Both the asset management affiliates and the Bank's Wealth Management division provide proprietary and nonproprietary products to offer a full spectrum of investment solutions in all asset classes and investment styles, including fixed-income instruments, mutual funds, domestic and international equities and alternative investments such as hedge funds.

A-58

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 22. Segment Operations (Continued)

        The Other segment includes all other subsidiaries of the Company, the portion of corporate departments, including the Treasury Department and the Asset Liability Funding Center, that have not been allocated to the other segments and inter-segment eliminations for revenue recognized in multiple segments for management reporting purposes. The Company uses traditional matched-maturity funds transfer pricing methodology. However, both positive and negative variances occur over time when transfer pricing non-maturing balance sheet items such as demand deposits. These variances, offset in the Funding Center, are evaluated annually by management and allocated back to the business segments as deemed necessary.

        Business segment earnings are the primary measure of the segment's performance as evaluated by management. Business segment earnings include direct revenue and expenses of the segment as well as corporate and inter-unit allocations. Allocations of corporate expenses, such as data processing and human resources, are calculated based on estimated activity levels for the fiscal year. Inter-unit support groups, such as Operational Services, are allocated based on actual expenses incurred. Capital is allocated using a methodology similar to that used for federal regulatory risk-based capital purposes. If applicable, any provision for credit losses is allocated based on various credit factors, including but not limited to, credit risk ratings, ratings migration, charge-offs and recoveries and loan growth. Income taxes are charged on unit income at the company's overall effective tax rate.

        Exposure to market risk is managed in the Company's Treasury department. Interest rate risk is removed from the units comprising the Commercial and Private Banking segment to the Funding Center through a funds transfer pricing ("FTP") model. The FTP model records a cost of funds or credit for funds using a combination of matched maturity funding for most assets and liabilities and a blended rate based on various maturities for the remaining assets and liabilities.

        The Bank's investment portfolio and unallocated equity are included in the Other segment. Amortization expense associated with customer-relationship intangibles is charged to the affected operating segments.

        Selected financial information for each segment is presented in the following tables. Commercial and Private Banking includes all revenue and costs from products and services utilized by clients of Commercial and Private Banking, including both revenue and costs for Wealth Management products and services. The revenues and costs associated with Wealth Management products and services that are allocated to Commercial and Private Banking for management reporting purposes are eliminated in the Other segment.

A-59

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 22. Segment Operations (Continued)

City National Corporation
Segment Results

		For the year ended December 31, 2008
(in thousands)		Commercial and Private Banking		Wealth Management		Other			Consolidated Company
Earnings Summary:
Net interest income		$	639,890	$	3,103	$	(43,097	)	$	599,896
Provision for credit losses			127,000		—		—			127,000
Noninterest income			187,569		208,668		(129,253	)		266,984
Depreciation and amortization			13,388		14,079		12,472			39,939
Noninterest expense and minority interest			462,334		145,257		(60,011	)		547,580
	Income (loss) before income taxes		224,737		52,435		(124,811	)		152,361
Provision (benefit) for income taxes			69,336		16,576		(38,507	)		47,405
	Net income (loss)	$	155,401	$	35,859	$	(86,304	)	$	104,956
Selected Average Balances:
Loans and leases		$	12,014,734	$	60	$	73,921		$	12,088,715
Total assets			12,249,028		547,471		3,232,322			16,028,821
Deposits			10,872,652		65,287		961,703			11,899,642
Goodwill			318,886		136,656		—			455,542
Customer-relationship intangibles, net			14,315		44,240		—			58,555

A-60

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 22. Segment Operations (Continued)

		For the year ended December 31, 2007
(in thousands)		Commercial and Private Banking		Wealth Management		Other			Consolidated Company
Earnings Summary:
Net interest income		$	623,641	$	1,916	$	(17,285	)	$	608,272
Provision for credit losses			20,000		—		—			20,000
Noninterest income			151,296		203,900		(51,994	)		303,202
Depreciation and amortization			12,358		4,924		12,504			29,786
Noninterest expense and minority interest			422,166		138,433		(52,284	)		508,315
Income (loss) before income taxes			320,413		62,459		(29,499	)		353,373
Provision (benefit) for income taxes			117,262		24,194		(10,796	)		130,660
	Net income (loss)	$	203,151	$	38,265	$	(18,703	)	$	222,713
Selected Average Balances:
Loans and leases		$	10,960,031	$	1,587	$	95,793		$	11,057,411
Total assets			11,311,107		454,664		3,604,993			15,370,764
Deposits			11,054,528		59,354		1,122,501			12,236,383
Goodwill			299,450		86,006		—			385,456
Customer-relationship intangibles, net			17,660		52,882		—			70,542

		For the year ended December 31, 2006
(in thousands)		Commercial and Private Banking			Wealth Management		Other			Consolidated Company
Earnings Summary:
Net interest income		$	599,969		$	2,228	$	3,713		$	605,910
Provision for credit losses			(610	)		—		—			(610	)
Noninterest income			131,994			155,780		(45,404	)		242,370
Depreciation and amortization			9,949			2,962		12,249			24,346
Noninterest expense and minority interest			394,757			112,418		(50,331	)		457,658
Income (loss) before income taxes			327,867			42,628		(3,609	)		366,886
Provision (benefit) for income taxes			118,343			16,322		(1,302	)		133,363
	Net income (loss)	$	209,524		$	26,306	$	(2,307	)	$	233,523
Selected Average Balances:
Loans and leases		$	9,843,055		$	85	$	105,224		$	9,948,364
Total assets			10,201,619			266,643		4,247,250			14,715,512
Deposits			10,557,479			57,960		1,254,488			11,869,927
Goodwill			204,009			48,097		—			252,106
Customer-relationship intangibles, net			7,029			32,952		—			39,981

A-61

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 23. Parent Company Only Condensed Financial Statements

        Condensed Parent Company financial statements, which include transactions with subsidiaries, follow:

CONDENSED BALANCE SHEETS

		December 31,
(in thousands)		2008		2007
Assets
Cash		$	423,529	$	24,156
Securities available-for-sale			69,851		127,145
Other assets			235,979		177,839
Investment in Bank			1,474,678		1,460,775
Investment in non-bank subsidiaries			96,768		111,369
	Total assets	$	2,300,805	$	1,901,284
Liabilities
Senior notes		$	219,615	$	225,981
Other liabilities			37,176		19,696
	Total liabilities		256,791		245,677
Shareholders' equity			2,044,014		1,655,607
	Total liabilities and shareholders' equity	$	2,300,805	$	1,901,284

Note: Certain prior period balances have been reclassified to conform to the current period presentation.

A-62

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 23. Parent Company Only Condensed Financial Statements (Continued)

CONDENSED STATEMENTS OF INCOME

				For the year ended December 31,
(in thousands)				2008			2007			2006
Income
	Dividends from Bank and non-bank subsidiaries			$	73,735		$	334,217		$	225,495
	Interest and dividend income and other income				15,045			22,579			7,001
	Impairment loss on securities				(27,397	)		—			—
	(Loss) gain on sale of securities				(2,714	)		1,099			6,264
		Total income			58,669			357,895			238,760
Interest on notes payable to Bank and non-affiliates					8,970			14,433			11,775
Other expenses					5,012			6,000			4,744
Total expenses					13,982			20,433			16,519
	Income before taxes and equity in undistributed income of Bank and non-bank subsidiaries				44,687			337,462			222,241
	Income tax benefit				(21,531	)		(3,560	)		(1,623	)
	Income before equity in undistributed income of Bank and non-bank subsidiaries				66,218			341,022			223,864
	Equity in undistributed income (losses) of Bank and non-bank subsidiaries				38,738			(118,309	)		9,659
	Net income			$	104,956		$	222,713		$	233,523
			Less: Dividends on preferred stock		2,445			—			—
	Net income available to common shareholders			$	102,511		$	222,713		$	233,523

Note: Certain prior period balances have been reclassified to conform to the current period presentation.

A-63

CITY NATIONAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 23. Parent Company Only Condensed Financial Statements (Continued)

CONDENSED STATEMENT OF CASH FLOWS

			For the year ended December 31,
(in thousands)			2008			2007			2006
Cash Flows From Operating Activities
Net income			$	104,956		$	222,713		$	233,523
Adjustments to net income:
	Equity in undistributed (income) loss of Bank and non-bank subsidiaries			(38,738	)		118,309			(9,659	)
	Other, net			29,709			(22,499	)		(2,459	)
		Net cash provided by operating activities		95,927			318,523			221,405
Cash Flows From Investing Activities
Purchase of securities available-for-sale				(37,292	)		(66,607	)		(76,317	)
Sales and paydowns of securities available-for-sale				49,347			39,526			76,781
Net advances to subsidiaries				(13,354	)		—			(679	)
Acquisitions, net of cash acquired				—			(148,172	)		—
		Net cash used in investing activities		(1,299	)		(175,253	)		(215	)
Cash Flows For Financing Activities
Cash dividends paid				(92,886	)		(89,375	)		(80,126	)
Issuance of preferred stock				389,867			—			—
Issuance of common stock warrants				10,133			—			—
Stock repurchases				(21,694	)		(105,450	)		(161,618	)
Proceeds from exercise of stock options				20,480			25,907			19,073
Other, net				(1,155	)		5,026			35
		Net cash provided by (used in) financing activities		304,745			(163,892	)		(222,636	)
Net increase (decrease) in cash and cash equivalents				399,373			(20,622	)		(1,446	)
Cash and cash equivalents at beginning of year				24,156			44,778			46,224
Cash and cash equivalents at end of year			$	423,529		$	24,156		$	44,778

Note:

Certain prior period balances have been reclassified to conform to the current period presentation.

A-64

EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT is made as of the 15th day of May, 2003 by and between BRAM GOLDSMITH (“Goldsmith”), on the one hand, and CITY NATIONAL CORPORATION, a Delaware corporation (“CNC”) and CITY NATIONAL BANK, a National Banking Association (“CNB”).  CNC and CNB are sometimes referred to collectively herein as “CNB” and “CNC”.

1. Employment. CNC hereby employs Goldsmith, and Goldsmith hereby accepts employment, under the terms and conditions hereafter set forth.

2. Duties. Goldsmith shall be employed as the Chairman of the Board of CNC and as an untitled officer of CNB, and his duties shall be consistent with such office and position. Substantially all of Goldsmith’s duties shall be performed in Los Angeles and Beverly Hills, California and unless mutually agreed upon by Goldsmith and CNC, Goldsmith shall be headquartered in Beverly Hills, California.

3. Term. Subject to the provisions for termination as hereinafter provided, the term of this Agreement shall be deemed to commence on May 15, 2003 and shall terminate two (2) years thereafter.

4. Annual Compensation. In addition to fringe benefits and reimbursement of expenses consistent with Goldsmith’s duties and position, CNC shall pay Goldsmith as annual compensation, payable in equal semimonthly payments, the sum of Three Hundred Fifty Thousand Dollars ($350,000) during the term hereof.  In addition, on May 15, 2003, CNC shall transfer title to Goldsmith of that certain 1987 Mercedes 560 SEL automobile with an approximate value of Six Thousand Dollars ($6,000), and, commencing May 15, 2003, CNC shall pay Goldsmith a car allowance of One Thousand Dollars ($1,000) per month during the term of this Agreement in lieu of providing Goldsmith with the use of any CNC-owned automobile.

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5. Incentive Bonus.  For the fiscal years 2003 and 2004, Goldsmith shall be eligible for an annual incentive bonus based upon company and individual performance, with a target of 55% of Goldsmith’s then annual salary, but in no event shall the bonus paid for these fiscal years exceed $150,000, nor shall the total amount paid to Mr. Goldsmith pursuant to Paragraphs 4 and 5 of this Agreement with respect to any fiscal year of CNC and CNB after 2003 exceed $500,000.  The parties hereto recognize that incentive bonuses paid for services rendered during a fiscal year are generally paid during the first quarter of the fiscal year following the fiscal year in which such services were performed. In such event, the annual compensation paid to Goldsmith with respect to each fiscal year after 2003 pursuant to Paragraph 4 of the Agreement will be added to the incentive bonus paid in the following fiscal year, for purposes of calculating whether the $500,000 limit has been reached. For the purpose of determining the amount of bonus to be paid Goldsmith for any calendar year, his then annual salary shall be an amount equal to twenty-four times the semimonthly salary paid to Goldsmith (exclusive of any incentive bonus) for the calendar year in question.

6. Life Insurance. CNB has previously provided Goldsmith with a whole life insurance policy on the joint lives of Goldsmith and Mrs. Elaine Goldsmith in an insured amount of Seven Million Dollars ($7,000,000) (the “Joint Policy”).  Nothing in this Agreement affects or modifies the parties’ rights and obligations with respect to the Joint Policy.

7. Extent of Service. Goldsmith shall devote his time, attention and energies to the business of CNC and CNB and shall not, during the term of this Agreement, be engaged in any other activity which will interfere with the performance of his duties hereunder. Time expended by Goldsmith on philanthropic activities and in connection with real estate investments shall be deemed not to interfere with the performance of his duties hereunder; provided however, that during the term hereof, Goldsmith shall not

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become an active participant (as opposed to a passive investor or consultant) in any real estate investment or venture in which he does not presently have a direct or indirect interest.

8. Termination of Employment.

(a) Termination by CNC for Good Cause. CNC may terminate the employment of Goldsmith for “good cause” by written notice to Goldsmith. For purposes of this Agreement, “good cause” shall mean only (i) conviction of a crime directly related to his employment hereunder, (ii) conviction of a felony involving moral turpitude, (iii) willful and gross mismanagement of the business and affairs of CNC or CNB, or (iv) breach of any material provision of this Agreement. In the event the employment of Goldsmith is terminated pursuant to this subparagraph 8(a), CNC and CNB shall have no further liability to Goldsmith other than for compensation accrued but not yet paid.  In the event CNC contends that it has good cause to terminate Goldsmith pursuant to clause (iii) or (iv) of this subparagraph 8(a), CNC shall provide Goldsmith with written notice specifying in reasonable detail the services or matters which it contends Goldsmith has not been adequately performing, or the material provisions of this Agreement of which Goldsmith is in violation, why CNC has good cause to terminate this Agreement, and what Goldsmith should do to adequately perform his obligations hereunder. If within thirty (30) days of receipt of the notice Goldsmith performs the required services or modifies his performance to correct the matters complained of, Goldsmith’s breach will be deemed cured, and Goldsmith’s employment shall not be terminated. However, if the nature of the service not performed by Goldsmith or the matters complained of are such that more than thirty (30) days are reasonably required to perform the required service or to correct the matters complained of, then his breach will be deemed cured if he commences to perform such service or to correct such matters within the thirty (30) day period and thereafter diligently prosecutes such performance or correction to completion. If Goldsmith does not perform the required services or modify his performance to correct the matter complained of within the thirty (30)

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day period or the extension thereof, CNC shall have the right to terminate this Agreement at the end of the thirty (30) day period or extension thereof. It is understood that Goldsmith’s performance hereunder shall not be deemed unsatisfactory solely on the basis of any economic performance of CNC because this performance will depend in part on a variety of factors over which Goldsmith has little control.

(b) Termination by CNC Without Good Cause. CNC may terminate the employment of Goldsmith without “good cause” (as defined in subparagraph 8(a) above) at any time by written notice to Goldsmith. In the event the employment of Goldsmith is terminated pursuant to this subparagraph 8(b), CNC shall continue to be obligated to pay to and compensate Goldsmith pursuant to Paragraphs 4 and 5 of this Agreement for the full term of this Agreement. Goldsmith shall have no duty to mitigate and CNC shall have no right to offset any other compensation paid to Goldsmith during the applicable time period.

(c) Termination by Death or Disability. CNC may terminate the employment of Goldsmith by written notice to Goldsmith if, during the term of this Agreement, Goldsmith shall become incapable of fulfilling his obligations hereunder because of injury or physical or mental illness which shall exist or may reasonably be anticipated to exist for a period of twelve (12) consecutive months or for an aggregate of twelve (12) months during any twenty-four (24) month period. The death of Goldsmith during the term of this Agreement shall likewise operate to terminate the Agreement, except that Goldsmith’s base salary shall continue in effect and be paid to his wife, if she is then living, and if she is not then living, to his Revocable Living Trust for a period equal to the lesser of two years or the remaining term of this Agreement. In the event the employment of Goldsmith is terminated by CNC pursuant to this subparagraph 8(c) because of injury, physical or mental illness, CNC shall continue to be obligated to pay Goldsmith while he is alive his base salary and Incentive Bonus which Goldsmith would otherwise have been entitled to receive pursuant to Paragraph 5 to the same extent and in the

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same manner as if Goldsmith had remained employed by CNC for the full term of this Agreement less any amount Goldsmith receives in lieu of salary while he is alive during the term of this Agreement from private or government insurance programs, exclusive of reimbursement of medical costs.

(d) Optional Termination by Goldsmith. Goldsmith shall have the right, at any time following a “Change of Control” (as that term is defined in the Agreement between Goldsmith and CNC dated as of March 3l, l997, a copy of which is attached hereto marked Exhibit “A” and incorporated by reference herein) (the “Change of Control Agreement”), to declare the Change of Control Agreement in effect, from which time forward, except for rights pursuant to this Agreement vested in Goldsmith, his spouse, designees, successors or representatives prior to the Effective Date, as that term is defined in the Change of Control Agreement (which rights will remain in full force and effect), from and after the Effective Date, in the event of inconsistencies or conflicts between this Agreement and the Change of Control Agreement, the terms of the Change of Control Agreement will govern.

9. Entire Agreement; Modification; Waiver. This Agreement and the agreements referred to in the Exhibits attached hereto constitute the entire agreement between the parties pertaining to the subject matter contained therein and supersedes all prior and contemporaneous agreements, representations and understandings of the parties, except for those contained in the Change of Control Agreement. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both parties. No waiver of any of the provisions of this Agreement shall be deemed, or shall constitute, a waiver of any other provisions, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party making the waiver.

10. Separability Clause. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision hereof.

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11. Benefit. Except as herein and otherwise specifically provided, this Agreement shall be binding upon and inure to the benefit of the parties, their personal representatives, heirs, administrators, executors, successors, and permitted assigns.

12. Notices. Any notice, request, or other communication required to be given pursuant to the provisions of this Agreement shall be in writing and shall be deemed to be duly given if delivered in person or mailed by registered or certified United States mail, postage prepaid, and mailed to the parties at the following addresses:

BRAM GOLDSMITH

Mr. Bram Goldsmith
City National Corporation
400 No. Roxbury Drive
Beverly Hills, California 90210

CITY NATIONAL CORPORATION/CITY NATIONAL BANK

City National Corporation/City National Bank
400 No. Roxbury Drive
Beverly Hills, CA 90210
Attn: General Counsel

The parties hereto may change the above addresses from time to time by giving notice thereof to each other in conformity with this Paragraph 12.

13. Non-Competition. Goldsmith agrees not to compete with CNC in any form whatsoever. Without limiting the generality of the foregoing, Goldsmith covenants and agrees with CNC that Goldsmith shall not, during or after the term of this Agreement, disclose to anyone any confidential information concerning the business or operations of CNC which Goldsmith may acquire in the course of or incident to the performance of his duties hereunder, including, without limitation, processes, customer lists, business or trade secrets, or methods or techniques used by CNC in its business or operations.

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Goldsmith covenants and agrees that he shall not, during the term of this Agreement, directly or indirectly (whether for compensation or otherwise), alone or as an agent, principal, partner, shareholder or in any other capacity, own, manage, operate, join, control or participate in the ownership, management, operation or control of or furnish any capital to or be connected in any manner with or provide any services for any business, operation or entity which competes with the business or operations of CNC.

14. Construction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California.

15. Captions. The paragraph headings and captions contained herein are for reference purposes and convenience only and shall not in any way affect the meaning or interpretation of this Agreement.

16. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

17. Amendments. This Agreement shall not be modified, amended, or in any way altered except by an instrument in writing and signed by both of the parties hereto.

18. Mandatory Arbitration. At the request of Goldsmith or City National Corporation, any dispute, claim, controversy of any kind (whether in contract or tort, statutory or common law, legal or equitable) now existing or hereafter arising out of, pertaining to or in connection with this Agreement and/or any renewals, extensions, or amendments thereto, shall be resolved through final and binding arbitration conducted at a location determined by the arbitrator in Los Angeles or Beverly Hills, California, and administered by the American Arbitration Association (“AAA”) in accordance with the Federal Arbitration Act, 9 U.S.C. §1, et seq., and the then existing Commercial Arbitration Rules of the AAA. Judgment upon any award rendered by the arbitrator(s) may be entered in any State or Federal courts having jurisdiction thereof.

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IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the date first above written at Beverly Hills, California.

CITY NATIONAL CORPORATION
By:	/s/ Frank P. Pekny	/s/ Bram Goldsmith
	Frank Pekny	Bram Goldsmith
	Executive Vice President
CITY NATIONAL BANK
By:	/s/ Frank P. Pekny
	Frank Pekny
	Vice Chairman

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EMPLOYMENT AGREEMENT

AGREEMENT by and between City National Corporation, a Delaware corporation (the “Company”) and             (the “Executive”), dated as of the 31st day of March, 1997.

The Board of Directors of the Company (the “Board”), has determined that it is in the best interest of the Company and its shareholders to assure that the Company will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined below) of the Company. The Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the Executive’s full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the Executive with compensation and benefits arrangements upon a Change of Control which ensure that the compensation and benefits expectations of the Executive will be satisfied and which are competitive with those of other corporations. Therefore, in order to accomplish these objectives, the Board has caused the Company to enter into this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. CERTAIN DEFINITIONS. (a) The “Effective Date” shall mean the first date during the Change of Control Period (as defined in Section 1(b)) on which a Change of Control (as defined in Section 2) occurs. Anything in this Agreement to the contrary notwithstanding, if a Change of Control occurs and if the Executive’s employment with the Company is terminated prior to the date on which the Change of Control occurs, and if it is reasonably demonstrated by the Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (ii) otherwise arose in connection with or anticipation of a Change of Control, then for all purposes of this Agreement the “Effective Date” shall mean the date immediately prior to the date of such termination of employment.

(b) The “Change of Control Period” shall mean the period commencing on the date hereof and ending on the second anniversary of the date hereof; provided, however that commencing on the date one year after the hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof shall be hereinafter referred to as the “Renewal Date”), unless previously terminated, the Change of Control Period shall be automatically extended so as to terminate two years from such Renewal Date, unless at least 60 days prior to the Renewal Date the Company shall give notice to the Executive that the Change of Control Period shall not be so extended.

2. CHANGE OF CONTROL. For the purpose of this Agreement, a “Change of Control” shall mean:

(a) The acquisition by any individual, entity or group (within the

9

meaning of Section 13(d) (3) or 14(d) (2) or the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% of more of either (i) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 2, or (v) any acquisition by the Goldsmith family or any trust or partnership for the benefit of any member of the Goldsmith family; or

(b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors of other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(c) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company of all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding

10

shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(d) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

3. EMPLOYMENT PERIOD. The Company hereby agrees to continue the Executive in its employ, and the executive hereby agrees to remain in the employ of the Company subject to the terms and conditions of this Agreement, for the period commencing on the Effective Date and ending on the second anniversary of such date (the “Employment Period”).

4. TERMS OF EMPLOYMENT. (a) POSITION AND DUTIES.

(i) During the Employment Period, (A) the Executive’s position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 120-day period immediately preceding the Effective Date and (B) the Executive’s services shall be performed at the location where the Executive was employed immediately preceding the Effective Date or any office or location less than 35 miles from such location.

(ii) During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive’s reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive’s responsibilities as an employee of the Company in accordance with this Agreement.

It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive’s responsibilities to the Company.

(b) COMPENSATION. (i) BASE SALARY. During the Employment Period, the Executive shall receive an annual base salary (“Annual Base Salary”), which shall be paid at a monthly rate, at least equal to twelve times the highest

11

monthly base salary paid or payable, including any base salary which has been earned but deferred, to the Executive by the Company and its affiliated companies in respect of the twelve-month period immediately preceding the month in which the Effective Date occurs. During the Employment Period, the Annual Base Salary shall be reviewed no more than 12 months after the last salary increase awarded to the Executive prior to the Effective Date and thereafter at least annually. Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement. Annual Base Salary shall not be reduced after any such increase and the term Annual Base Salary as utilized in this Agreement shall refer to Annual Base Salary as so increased. As used in this Agreement, the term “affiliated companies” shall include any company controlled by, controlling or under common control with the Company.

(ii) ANNUAL BONUS. In addition to Annual Base Salary, the Executive shall be awarded, for each fiscal year ending during the Employment Period, an annual bonus (the “Annual Bonus”) in cash at least equal to the Executive’s highest bonus under the Company’s annual incentive plans for the last three full fiscal years prior to the Effective Date (annualized in the event that the Executive was not employed by the Company for the whole of such fiscal year) (the “Recent Annual Bonus”). Each such Annual Bonus shall be paid no later that the end of the third month of the fiscal year next following the fiscal year for which the Annual Bonus is awarded, unless the Executive shall elect to defer the receipt of such Annual Bonus.

(iii) INCENTIVE, SAVINGS AND RETIREMENT PLANS.

During the Employment Period, the Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable generally to other executive of the Company and its affiliated companies, but in no event shall such plans, practice, policies and programs provide the Executive with incentive opportunities (measured with respect to both regular and special incentive opportunities, to the extent, if any, that such distinction is applicable), savings opportunities and retirement benefit opportunities, in each case, less favorable in the aggregate, than the most favorable of those provided by the Company and its affiliated companies for the Executive under such plans, practices, policies and programs as in effect at any time during the 120-day period immediately preceding the Effective Date or if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of the Company and its affiliated companies.

(iv) WELFARE BENEFIT PLANS. During the employment Period, the Executive and/or the Executive’s family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its affiliated companies (including, without limitation, medical, prescription, dental, disability, employee life, group life, accidental death and travel accident insurance plans and programs) to the extent applicable generally to other peer executives of the Company and its affiliated

12

companies, but in no event shall such plans, practices, policies and programs provide the Executive with benefits which are less favorable, in the aggregate, than the most favorable of such plans, practices, policies and programs in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time after the Effective Date to the other peer executive of the Company and its affiliated companies.

(v) EXPENSES. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the most favorable policies, practices and procedures of the Company and its affiliated companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(vi) FRINGE BENEFITS. During the Employment Period, the Executive shall be entitled to fringe benefits, including, without limitation, tax and financial planning services, payment of club dues, and if applicable, automobile allowance and/or use of an automobile and payment of related expenses, in a accordance with the most favorable plans, practices, programs and policies of the Company and its affiliated companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and it’s affiliated companies.

(vii) OFFICE AND SUPPORT STAFF. During the Employment Period, the Executive shall be entitled to an office or offices of a size and with furnishings and other appointments, and to exclusive personal secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Executive by the Company and its affiliated companies at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as provided generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

(viii) VACATION. During the Employment Period, the Executive shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company and its affiliated companies as in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, of more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

5. TERMINATION OF EMPLOYMENT. (a) DEATH OR DISABILITY. The Executive’s employment shall terminate automatically upon the Executive’s death during the Employment Period. If the Company determines in good faith that the Disability of the Executive has occurred during the Employment Period (pursuant to the definition of Disability set forth below), it may give to the Executive written notice in accordance with Section 12(b) of this

13

Agreement of its intention to terminate the Executive’s employment. In such event, the Executive’s employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the “Disability Effective Date”), provided that, within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive’s duties. For purposes of this Agreement, “Disability” shall mean the absence of the Executive from the Executive’s duties with the Company on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company of its insurers and acceptable to the Executive or the Executive’s legal representative.

(b) CAUSE. The Company may terminate the Executive’s employment during the Employment Period for Cause. For purposes of this Agreement, “Cause” shall mean:

(i) the willful and continued failure of the Executive to perform substantially the Executive’s duties with the Company or one of its affiliated (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Executive by the Board or the Chief Executive Officer of the Company which specifically identifies the manner in which the Board or Chief Executive Officer believes that the Executive has not substantially performed the Executive’s duties, or

(ii) the willful engaging by the Executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company

For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. The cessation of employment of the Executive shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Executive is guilty of the conduct described in subparagraph (i) or (ii) above, and specifying the particulars thereof in detail.

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(c) GOOD REASON. The Executive’s employment may be terminated By the Executive for Good Reason. For purpose of this Agreement, “Good Reason” shall mean:

(i) the assignment to the Executive of any duties inconsistent in any respect with the Executive’s position (including status, offices, titles and reporting requirement), authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

(ii) any failure by the Company to comply with any of the provisions of Section 4(b) of this Agreement, other than in isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

(iii) the Company’s requiring the Executive to be based at any office or location other than as provided in Section 4(a) (i) (B) hereof or the Company’s requiring the Executive to travel on Company business to a substantially greater extent than required immediately prior to the Effective Date;

(iv) any purported termination by the Company of the Executive’s employment otherwise than as expressly permitted by this Agreement; or

(v) any failure by the Company to comply with and satisfy Section 11 (c) of this Agreement.

For purposes of this Section 5 (c), any good faith determination of “Good Reason” made by the Executive shall be conclusive. Anything in the Agreement to the Contrary notwithstanding, a termination by the Executive for any reason during the 30-day period immediately following the first anniversary of the Effective Date shall be deemed to be a termination for Good Reason for all purposes of this Agreement.

(d) NOTICE OF TERMINATION. Any TERMINATION by the Company for Cause, or by the Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 12(b) of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies that termination date (which date shall be not more than thirty days after the giving of such notice). The failure by the Executive or the Company to set forth in the notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of

15

the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

(e) DATE OF TERMINATION. “Date of Termination” means (i) if the Executive’s employment is terminated by the Company for Cause, or by the Executive for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be, (ii) if the Executive employment is terminated by the Company other than for Cause or Disability, the Date of Termination shall be the date on which the Company notifies the Executive of such termination and (iii) if the Executive’s employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive or the Disability Effective Date, as the case may be.

6. OBLIGATIONS OF THE COMPANY UPON TERMINATION

(a) GOOD REASON; OTHER THAN FOR CAUSE, DEATH OR DISABILITY. If, during the Employment Period, the Company shall terminate the Executive’s employment other than for Cause or Disability or the Executive shall terminate employment for Good Reason:

(i) the Company shall pay to the Executive in a lump sum in cash within 30 days after the Date of Termination the aggregate of the following amounts:

A. the sum of (1) the Executive’s Annual Base Salary through the Date of Termination to the extent not theretofore paid, (2) the product of (x) the higher of

(i) the Recent Annual Bonus and (ii) the Annual Bonus paid or payable, including any bonus or portion thereof which has been earned but deferred (and annualized for any fiscal year consisting of less than twelve full months or during which the Executive was employed for less than twelve full months), for the most recently completed fiscal year during the Employment Period, if any (such higher amount being referred to as the “Highest Annual Bonus”) and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365 and (3) any compensation previously deferred by the Executive (together with any accrued interest or earnings thereon) and any accrued vacation pay, in each case to the extent not theretofore paid (the sum of the amounts described in clauses (1), (2), and (3) shall be hereinafter referred to as the “Accrued Obligations”); and

B. the amount equal to the product of (1)     and (2) the sum of (x) the Executive’s Annual Base Salary and (y) the Highest Annual Bonus; and

C. an amount equal to the contributions to the Executive’s account in the Company’s Profit Sharing Plan which the Executive would receive if the Executive’s employment continued for     years after the Date of Termination assuming for this purpose that all such contributions are fully vested, and, and assuming that the Company’s contribution to the Profit Sharing Plan in

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each such year is in an amount equal to the greatest amount contributed by the Company in any of the three years ending prior to the Effective Date.

(ii) for     years after the Executive’s Date of Termination, or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy, the Company shall continue benefits to the Executive and/or the Executive’s family at least equal to those which would have been provided to them in accordance with the plans, programs, practices and policies described in Section 4 (b)(iv) of the Agreement if the Executive’s employment has not been terminated or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies and their families, provided, however, that if the Executive becomes reemployed with another employer and is eligible to receive medical or other welfare benefits under another employer provided plan, the medical and other welfare benefits described herein shall be secondary to those provided under such other plan during such applicable period of eligibility.

(iii) the Company shall, at its sole expense as incurred, provide the Executive with out placement services the scope and provider of which shall be selected by the Executive in his sole discretion; and

(iv) to the extent not theretofore paid or provided, the Company shall timely pay or provide to the Executive any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company and its affiliated companies (such other amounts and benefits shall be hereinafter referred to as the “Other Benefits”).

(b) DEATH. If the Executive’s employment is terminated by reason of the Executive’s death during the Employment Period, this Agreement shall terminate without further obligations to the Executive’s legal representatives under this Agreement, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as utilized in this Section 6 (b) shall include, without limitation, and the Executive’s estate and/or beneficiaries shall be entitled to receive, benefits at least equal to the most favorable benefits provided by the Company and affiliated companies to the estates and beneficiaries of peer executives of the Company and such affiliated companies under such plans, programs, practices and policies relating to death benefits, if any, as in effect with respect to other peer executives and their beneficiaries at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive’s estate and/or the Executive’s beneficiaries, as in effect on the date of Executive’s death with respect to other peer

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executive of the Company and its affiliated companies and their beneficiaries.

(c) DISABILITY. If the Executive’s employment is terminated by reason of the Executive’s Disability during the Employment Period, this Agreement shall terminate without further obligations to the Executive, other than for payment of Accrued obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination. With respect to the provision of Other Benefits, the term Other Benefits as utilized in this Section 6(c) shall include, and the Executive shall be entitled after the Disability Effective Date to receive, disability and other benefits at least equal to the most favorable of those generally provided by the Company and its affiliated Companies to disabled executives and/or their families in accordance with such plans, programs, practices and policies relating to disability, if any, as in effect generally with respect to other peer executives and their families at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive and/or the Executive’s family, as in effect at any time thereafter generally with respect to other peer executives of the Company and its affiliated companies and their families.

(d) CAUSE; OTHER THAN FOR GOOD REASON. If the Executive’s employment shall be terminated for Cause during the Employment Period, this Agreement shall terminate without further obligations to the Executive other than the obligation to pay to the Executive (x) his Annual Base Salary through the Date of Termination, (y) the amount of any compensation previously deferred by the Executive, and (z) Other Benefits, in each case to the extent theretofore unpaid. If the Executive voluntarily terminates employment during the Employment Period, excluding a termination for Good Reason, this Agreement shall terminate without further obligations to the Executive, other than for Accrued Obligations and the timely payment or provision of Other Benefits. In such case, timely payment or provision of Other Benefits. In such case, all Accrued Obligations shall be paid to the Executive in a lump sum in cash within 30 days of the Date of Termination.

7. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or limit the Executive’s continuing or future participation in any plan, program, policy or practice provided by the Company or any of its affiliated companies and for which or otherwise affect such rights as the Executive may have under any contract or agreement with the Company or any of its affiliated companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company or any of its affiliated companies at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement.

8. FULL SETTLEMENT. The Company’s obligation to make the payment provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment,

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defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. The Company agrees to pay as incurred, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company, the Executive or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f) (2) (A) of the Internal Revenue Code of 1986, as amended (the “Code”).

9. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.

(a) Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 9) (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing provisions of this Section 9(a), if it shall be determined that the Executive is entitled to a Gross-Up Payment, but that the Payments do not exceed 110% of the greatest amount (the “Reduced Amount”) that could be paid to the Executive such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to the Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount.

(b) Subject to the provisions of Section 9(c), all determinations required to be made under this Section 9, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by KPMG Peat Marwick or such other certified public accounting firm as may be designated by the Executive (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Company. In the event that the Accounting Firm is serving as accountant or auditor for

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the individual, entity or group effecting the Change of Control, the Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 9, shall be paid by the Company to the Executive within five days of the receipt of the Accounting Firm’s determination. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 9 (c) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.

(c) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment.  Such notification shall be given as soon as practicable but no later than ten business days after the Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid.  The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due).  If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:

(i) give the Company any information reasonably requested by the Company relating to such claim,

(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company.

(iii) cooperate with the Company in good faith in order effectively to contest such claim, and

(iv) permit the Company to participate in any proceedings relating to such claim;

provide, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses.  Without limitation on the foregoing provisions of this Section 9(c), the Company shall control all proceedings

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taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount.  Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 9 (c), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject the Company’s complying with the requirements of Section 9 (c) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto).  If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 9 (c), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

10.  CONFIDENTIAL INFORMATION:  The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its affiliated companies, and their respective businesses, which shall have been obtained by the Executive during the Executive’s employment by the Company or any of its affiliated companies and which shall not be or become public knowledge (other than by acts by the Executive or representative of the Executive in violation of this Agreement).  After termination of the Executive’s employment with the Company, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it.  In no event shall an asserted violation of the provisions of this Section 10 constitute a basis for deferring or

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withholding any amounts otherwise payable to the Executive under this Agreement.

11. SUCCESSORS. (a) This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representative.

(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise

12. MISCELLANEOUS. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

(b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered certified mail, return receipt requested, postage prepaid, addressed as follows:

IF TO THE EXECUTIVE:

IF TO THE COMPANY:    City National Bank

400 North Roxbury Drive

Beverly Hills, CA 90210

Attention: General Counsel

or to such other address as either party shall have furnished to the other in

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writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

(c) The invalidity of unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

(d) The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

(e) The Executive’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason pursuant to Section 5(c)

(i) - (v) of this Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or right of the Agreement.

(f) The Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between the Executive and the Company, the employment of the Executive by the Company is “at will” and, subject to Section 1(a) hereof, prior to the Effective Date, the Executive’s employment and/or this Agreement may be terminated by either the Executive or the Company at any time prior to the Effective Date, in which case the Executive shall have no further rights under this Agreement. From and after the Effective Date of this Agreement shall supersede any other agreement between the parties with respect to the subject matter hereof.

IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name on its behalf, all as of the day and year first above written.

CITY NATIONAL CORPORATION

By /s/ RICHARD SHEEHAN, JR.

  Richard Sheehan, Jr.

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EX-10.5

EXHIBIT 10.5

FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT

THIS FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”) is dated as of December 22, 2008, by and between BRAM GOLDSMITH (“Goldsmith”), on the one hand, and CITY NATIONAL CORPORATION, a Delaware corporation (“CNC”) and CITY NATIONAL BANK, a national banking association (“CNB”), on the other hand.

WHEREAS, the parties have entered into that certain Employment Agreement, dated as of May 15, 2003, as amended (as amended, the “Agreement”);

WHEREAS, the initial term of the Agreement was two years from May 15, 2003 to May 15, 2005, as amended to extend the term for an additional two years to May 14, 2007, further amended to extend the term for an additional year to May 14, 2008, and further amended to extend the term for an additional year until May 14, 2009;

WHEREAS, the parties wish to amend the Agreement in recognition of the requirements of Internal Revenue Code Section 409A, and update it, and the Board of Directors of CNB and CNC have approved the amendment;

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.             All capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Agreement.

2.             Effective December 31, 2008, Goldsmith’s Employment Agreement dated as of March 31, 1997 (“CiC Agreement”) will be mutually rescinded by Goldsmith and CNC, and will be of no further effect, and neither Goldsmith not CNC will have any further duties, obligations, or benefits under the CiC Agreement.  In consideration of this rescission, Goldsmith will then become a Participant in the City National Corporation Strategy & Planning Committee Change in Control Severance Plan.

3.             Section 8(d) of the Agreement is hereby amended by substituting the following provision in place of the current language:

“(d) Change in Control.  In the event of a “Change in Control” on or after December 31, 2008 (as that term is defined in the City National Corporation Strategy & Planning Committee Change in Control Severance Plan, as amended from time to time (“Plan”), CNC and Goldsmith’s rights and obligations shall be governed by the Plan with respect to all matters covered therein.  If Goldsmith receives payments under the Plan as a result of the involuntary termination of his employment or his resignation for “Good Reason” (as defined in the Plan), neither he nor his spouse, beneficiary, heirs, trust(s), or estate shall be entitled to any

payments or compensation under Sections 8.(a), 8.(b), or 8.(c) of this Agreement.”

4.             Section 9 of the Agreement is hereby amended by deleting this portion of line 4 of Section 9: “, except for those contained in the Change in Control Agreement”.

5.             Section 5 of the Agreement is hereby amended by deleting the first sentence of Section 5 and substituting the following sentence in its place:

“For the fiscal year 2008, Goldsmith shall be eligible for an annual incentive bonus based upon company and individual performance in an amount not to exceed $150,000, and the total amount paid to Mr. Goldsmith pursuant to paragraphs 4 and 5 of this Agreement shall not exceed $500,000.”

6.             New Section 19 is added to the Agreement, and provides:

“All amounts which would be payable to Goldsmith (or his spouse, beneficiary, heirs, trust(s), or estate) after his termination of employment for any reason as payments of his Annual Compensation or Incentive Bonus shall be paid in a lump sum in cash, without any discount, within 30 days after Goldsmith’s “separation from service” for any reason within the meaning of Internal Revenue Code Section 409A, notwithstanding any provision in this Agreement that provides for such payments to be made in installments rather than a lump sum.

7.             The CiC Agreement is deleted as an Exhibit to the Agreement.

8.             Except as amended hereby, the Agreement shall remain in full force and effect.

9.             This Amendment shall be governed by, and construed in accordance with, the laws of the State of California.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment to Employment Agreement as of the date first written above.

/s/ Bram Goldsmith
Bram Goldsmith
CITY NATIONAL CORPORATION		CITY NATIONAL BANK
By:	/s/Michael Cahill	By:	/s/ Michael Cahill
Name: Michael B. Cahill		Name:		Michael B. Cahill
Title:  EVP, Secretary & General Counsel		Title:		EVP, Secretary & General Counsel

EX-10.8

Exhibit 10.8

AMENDMENT TO CITY NATIONAL CORPORATION

1995 OMINIBUS PLAN

WHEREAS, the Company has previously adopted the City National Corporation 1995 Omnibus Plan (the “Plan”) on February 22, 1995, and the Plan was approved by the shareholders of the Company on April 18, 1995, and the Plan was previously amended on April 16, 1997; and

WHEREAS, the Board is authorized to amend the Plan pursuant to Section 7.6(a) of the Plan; and

WHEREAS, the Board has been advised that shareholder approval of this Amendment to the Plan is not required by Rule 16b-3 or Section 424 of the Code or to comply with any other applicable law, and has determined that shareholder approval is not necessary or advisable for any other reason;

NOW, THEREFORE, pursuant to Section 7.6(a) of the Plan, the Plan is hereby amended as follows:

1.             Notwithstanding any other provision of the Plan, the Committee may grant to any Eligible Employee (including Other Eligible Persons) an Award (including, but not limited to restricted units or other deferred Awards) which will be payable in shares of Common Stock (a “Share Award”) and/or in Cash Only Awards on such terms as the Committee may determine in its sole discretion.  Such Awards may be made as additional compensation for services or may be in lieu of other compensation which the Eligible Employee is entitled to receive from the Company.  All such Share Awards and Cash Only Awards shall constitute Awards for all purposes of the Plan, and shall be subject to the limits on Awards which are payable in Shares and in cash which are contained in the Plan.

2.             Notwithstanding any other provision of the Plan, the Committee may grant Dividend Equivalents in connection with any Award which is made under the Plan on such terms as the Committee may determine in its sole discretion.

3.             All capitalized terms which are used herein shall have the same definitions which are contained in the Plan, unless otherwise defined herein.

EX-10.10

EXHIBIT 10.10

AMENDMENT TO

CITY NATIONAL CORPORATION

1995 OMNIBUS PLAN

WHEREAS, City National Corporation (the “Corporation”) maintains the City National Corporation 1995 Omnibus Plan (the “Plan”) to promote the success of the Corporation by providing an additional means through the grant of awards to attract, motivate, retain and reward key employees, including officers, whether or not directors, of the Corporation with awards and incentives for high levels of individual performance and improved financial performance of the Corporation;

WHEREAS, awards under the Plan may constitute nonqualified deferred compensation within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder (“Section 409A”);

WHEREAS, pursuant to Section 7.6(a) of the Plan, the Board of Directors of the Corporation has the right to amend the Plan; and

WHEREAS, it is desirable to amend the Plan in order to avoid a violation of Section 409A;

NOW, THEREFORE, the Plan is hereby amended, effective as of January 1, 2009, with approval by the Board of Directors of City National Corporation, as follows:

1.  The following sentence shall be added to the end of Section 5.3 of the Plan:

“No deferral shall be authorized pursuant to this Section 5.3 if such deferral would violate the requirements of Section 409A of the Code.”

2.  A new Section 7.13 shall be added to the Plan, which shall read in its entirety as follows:

“7.13.Compliance with Section 409A of the Code

(a)Plan Construction.

(i)Except to the extent specifically provided otherwise by the Committee, it is intended that the Plan and Awards issued thereunder will comply with Section 409A of the Code (and any Treasury Regulations and other guidance issued thereunder) to the extent the Awards are subject thereto, and the Plan and such Awards shall be interpreted on a basis consistent with such intent. For purposes of this Section 7.13, the terms specified herein shall have the respective meanings ascribed thereto under Section 409A of the Code and the Treasury Regulations thereunder. The Plan and any Award Agreements issued thereunder may be

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amended in any respect deemed by the Committee to be necessary in order to seek to preserve compliance with Section 409A of the Code.

(ii)Except to the extent specifically provided otherwise by the Committee, Awards under the Plan which are subject to Section 409A of the Code are intended to satisfy the requirements of Section 409A of the Code (and the Treasury Regulations and other guidance issued thereunder) so as to avoid the imposition of any additional taxes or penalties under Section 409A of the Code.  If the Committee determines that an Award, Award Agreement, payment, distribution, deferral election, transaction or any other action or arrangement contemplated by the provisions of the Plan would, if undertaken, cause a Participant to become subject to any additional taxes or other penalties under Section 409A of the Code, then unless the Committee specifically provides otherwise, such Award, Award Agreement, payment, distribution, deferral election, transaction or other action or arrangement shall not be given effect to the extent it causes such result and the related provisions of the Plan and/or Award Agreement will be deemed modified, or, if necessary, suspended in order to comply with the requirements of Section 409A of the Code to the extent determined appropriate by the Committee, in each case without the consent of or notice to the Participant.

(b)Distributions Under a Section 409A Award.

(i)Subject to paragraph (ii) below, if any Award (including without limitation any Award of restricted units) that constitutes, or provides for, a deferral of compensation within the meaning of Section 409A of the Code (a “Section 409A Award”) provides for a payment upon termination of employment or service, such payment shall not be made unless the termination is a separation from service within the meaning of Section 409A of the Code, as determined by the Corporation in accordance with Section 1.409A-1(h) of the Treasury Regulations, and shall be payable as soon as practical (but no later than 90 days) following such separation from service.  For purposes of determining whether a separation from service has occurred, a Participant shall be considered to have separated from service as an employee when the facts and circumstances indicate that the Participant and the Corporation reasonably anticipate that either (A) no further services will be performed for the Corporation after a certain date, or (B) that the level of bona fide services the Participant will perform for the Corporation after such date (whether as an employee or as an independent contractor) will permanently decrease to no more than 20% of the average level of bona fide services performed by such Participant (whether as an employee or as an independent contractor) over the immediately preceding 36-month period (or the full period of services to the Corporation if the Participant has been providing services to the Corporation less than 36 months).  For purposes of the preceding sentence, services performed for the Corporation shall include services performed for (A) any corporation which is a member of a controlled group of corporations (within the meaning of Section 414(b) of the Code, substituting the language “at least 20 percent” for “at least 80 percent” each place it appears in Section 

2

1563(a)(1), (2) and (3) of the Code) of which the Corporation is a component member, and (B) any entity (whether or not incorporated) which is under common control with the Corporation, as such common control is defined in Section 414(c) of the Code and the Treasury Regulations thereunder, substituting the language “at least 20 percent” for “at least 80 percent” each place it appears in Section 1.414(c)-2 of the Treasury Regulations.

(ii)To the extent that any Section 409A Award provides for payment upon disability, a change in control event, or the occurrence of an unforeseeable emergency (or any substantially similar event), such payment shall not be made unless such event is a disability, a change in the ownership or effective control of the Corporation or in the ownership of a substantial portion of the assets of the Corporation, or an unforeseeable emergency, respectively, in each case within the meaning of Section 409A of the Code and the Treasury Regulations thereunder.  For the avoidance of doubt, the foregoing sentence shall not limit the vesting provisions of the Plan or any Award Agreement.  Any payment upon the occurrence of an unforeseeable emergency shall be made only to the extent of the amount reasonably necessary to satisfy the emergency need, including amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such unforeseeable emergency is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship).

(iii)If, on the date of a Participant’s separation from service, (i) such Participant is a specified employee within the meaning of Section 409A of the Code, as determined annually by the Corporation in accordance with Section 1.409A-1(i) of the Treasury Regulations (using the methodology for identifying Key Employees under Paragraph A.2 of Article VIII of the City National Corporation Profit Sharing Plan, as amended from time to time, to the extent permitted by Section 409A of the Code), and (ii) the Committee shall make a good-faith determination that a payment or benefit under the Plan constitutes “deferred compensation” within the meaning of Section 409A of the Code the payment of which is required to be delayed for a six-month period in order to preserve the tax treatment intended for such payment or to avoid additional tax, interest, or penalties under Section 409A of the Code, then any payment otherwise due upon separation from service shall not be paid on the otherwise scheduled payment date, but shall instead be paid no later than 90 days following the end of such six-month period.  Such amount shall be paid without additional interest, unless otherwise determined by the Committee, in its sole discretion, or as otherwise provided in any applicable agreement between the Corporation and the Participant.

(c)Amendments to Awards; Acceleration of Benefits.  The time or schedule of any distribution or payment of any Shares, cash, or other property or amounts under a Section 409A Award shall not be modified in any manner that causes a violation

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of Section 409A of the Code, and shall not be accelerated except as otherwise permitted under Section 409A(a)(3) of the Code.

(d)No Representations or Covenants with Respect to Tax Qualification.  Although the Corporation may endeavor to avoid adverse tax treatment (e.g., under Section 409A of the Code), the Corporation makes no representation to that effect and expressly disavows any covenant to avoid unfavorable tax treatment.  A Participant shall be solely responsible and liable for the satisfaction of all taxes, interest, and penalties that may be imposed on such Participant or for such Participant’s account in connection with any payment or benefit under the Plan (including any taxes, interest, and penalties under Section 409A or any corresponding provision of state, local, or foreign law), and the Corporation shall have no obligation to indemnify or otherwise hold such Participant harmless from any or all of such taxes, interest, or penalties.”

3.  This Amendment shall not apply to any Award or any portion of an Award under the Plan that is outstanding as of the effective date hereof, to the extent that such Award or portion of an Award was vested on December 31, 2004.

4.  Except as provided herein, the terms of the Plan shall remain in full force and effect.

IN WITNESS WHEREOF, the Corporation has caused its duly authorized officer to execute this Amendment on this [      ] day of December, 2008.

CITY NATIONAL BANK

By:

Its:

4

EX-10.14

EXHIBIT 10.14

AMENDMENT TO

CITY NATIONAL CORPORATION

AMENDED AND RESTATED 2002 OMNIBUS PLAN

WHEREAS, City National Corporation (the “Corporation”) maintains the City National Corporation Amended and Restated 2002 Omnibus Plan (the “Plan”) to promote the success of the Corporation by providing an additional means through the grant of awards to attract, motivate, retain and reward key employees, including officers, whether or not directors, of the Corporation with awards and incentives for high levels of individual performance and improved financial performance of the Corporation, and to link Non-Employee Director compensation to shareholder interests through equity grants;

WHEREAS, awards under the Plan may constitute nonqualified deferred compensation within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder (“Section 409A”);

WHEREAS, pursuant to Section 6.6(a) of the Plan, the Board of Directors of the Corporation has the right to amend the Plan; and

WHEREAS, it is desirable to amend the Plan in order to avoid a violation of Section 409A;

NOW, THEREFORE, the Plan is hereby amended, effective as of January 1, 2009, with approval by the Board of Directors of City National Corporation, as follows:

1. The following sentence shall be added to the end of Section 5.2 of the Plan:

“No deferral shall be authorized pursuant to this Section 5.2 if such deferral would violate the requirements of Section 409A of the Code.”

2. A new Section 6.17 shall be added to the Plan, which shall read in its entirety as follows:

“6.17       Compliance with Section 409A of the Code.

(a)   Plan Construction.

(i)    Except to the extent specifically provided otherwise by the Committee, it is intended that the Plan and Awards issued thereunder will comply with Section 409A of the Code (and any Treasury Regulations and other guidance issued thereunder) to the extent the Awards are subject thereto, and the Plan and such Awards shall be interpreted on a basis consistent with such intent. For purposes of this Section 6.17, the terms specified herein shall have the respective meanings ascribed thereto under Section 409A of the Code and the Treasury Regulations thereunder. The Plan and any Award Agreements issued thereunder may be amended in any

1

respect deemed by the Committee to be necessary in order to seek to preserve compliance with Section 409A of the Code.

(ii)   Except to the extent specifically provided otherwise by the Committee, Awards under the Plan which are subject to Section 409A of the Code are intended to satisfy the requirements of Section 409A of the Code (and the Treasury Regulations and other guidance issued thereunder) so as to avoid the imposition of any additional taxes or penalties under Section 409A of the Code.  If the Committee determines that an Award, Award Agreement, payment, distribution, deferral election, transaction or any other action or arrangement contemplated by the provisions of the Plan would, if undertaken, cause a Participant to become subject to any additional taxes or other penalties under Section 409A of the Code, then unless the Committee specifically provides otherwise, such Award, Award Agreement, payment, distribution, deferral election, transaction or other action or arrangement shall not be given effect to the extent it causes such result and the related provisions of the Plan and/or Award Agreement will be deemed modified, or, if necessary, suspended in order to comply with the requirements of Section 409A of the Code to the extent determined appropriate by the Committee, in each case without the consent of or notice to the Participant.

(b)   Distributions Under a Section 409A Award.

(i)    Subject to paragraph (ii) below, if any Award (including without limitation any Award of restricted units) that constitutes, or provides for, a deferral of compensation within the meaning of Section 409A of the Code (a “Section 409A Award”) provides for a payment upon termination of employment or service, such payment shall not be made unless the termination is a separation from service within the meaning of Section 409A of the Code, as determined by the Corporation in accordance with Section 1.409A-1(h) of the Treasury Regulations, and shall be payable as soon as practical (but no later than 90 days) following such separation from service.  For purposes of determining whether a separation from service has occurred, a Participant shall be considered to have separated from service as an employee when the facts and circumstances indicate that the Participant and the Corporation reasonably anticipate that either (A) no further services will be performed for the Corporation after a certain date, or (B) that the level of bona fide services the Participant will perform for the Corporation after such date (whether as an employee or as an independent contractor) will permanently decrease to no more than 20% of the average level of bona fide services performed by such Participant (whether as an employee or as an independent contractor) over the immediately preceding 36-month period (or the full period of services to the Corporation if the Participant has been providing services to the Corporation less than 36 months).  For purposes of the preceding sentence, services performed for the Corporation shall include services performed for (A) any corporation which is a member of a controlled group of corporations (within the meaning of Section 414(b) of the Code, substituting the language “at least 20 percent” for “at least 80 percent” each place it appears in Section 1563(a)(1), (2) and (3) of the Code) of which the Corporation is a component member, and (B) any entity (whether or not incorporated) which is under common control with the Corporation, as such common control is defined in Section 414(c) of the Code and the Treasury Regulations thereunder, substituting the language “at least 20 percent” for “at least 80 percent” each place it appears in Section 1.414(c)-2 of the Treasury Regulations.

2

(ii)   To the extent that any Section 409A Award provides for payment upon disability, a change in control event, or the occurrence of an unforeseeable emergency (or any substantially similar event), such payment shall not be made unless such event is a disability, a change in the ownership or effective control of the Corporation or in the ownership of a substantial portion of the assets of the Corporation, or an unforeseeable emergency, respectively, in each case within the meaning of Section 409A of the Code and the Treasury Regulations thereunder.  For the avoidance of doubt, the foregoing sentence shall not limit the vesting provisions of the Plan or any Award Agreement.  Any payment upon the occurrence of an unforeseeable emergency shall be made only to the extent of the amount reasonably necessary to satisfy the emergency need, including amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such unforeseeable emergency is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship).

(iii)  If, on the date of a Participant’s separation from service, (i) such Participant is a specified employee within the meaning of Section 409A of the Code, as determined annually by the Corporation in accordance with Section 1.409A-1(i) of the Treasury Regulations (using the methodology for identifying Key Employees under Paragraph A.2 of Article VIII of the City National Corporation Profit Sharing Plan, as amended from time to time, to the extent permitted by Section 409A of the Code), and (ii) the Committee shall make a good-faith determination that a payment or benefit under the Plan constitutes “deferred compensation” within the meaning of Section 409A of the Code the payment of which is required to be delayed for a six-month period in order to preserve the tax treatment intended for such payment or to avoid additional tax, interest, or penalties under Section 409A of the Code, then any payment otherwise due upon separation from service shall not be paid on the otherwise scheduled payment date, but shall instead be paid no later than 90 days following the end of such six-month period.  Such amount shall be paid without additional interest, unless otherwise determined by the Committee, in its sole discretion, or as otherwise provided in any applicable agreement between the Corporation and the Participant.

(c)   Amendments to Awards; Acceleration of Benefits.  The time or schedule of any distribution or payment of any Shares, cash, or other property or amounts under a Section 409A Award shall not be modified in any manner that causes a violation of Section 409A of the Code, and shall not be accelerated except as otherwise permitted under Section 409A(a)(3) of the Code.

(d)   No Representations or Covenants with Respect to Tax Qualification.  Although the Corporation may endeavor to avoid adverse tax treatment (e.g., under Section 409A of the Code), the Corporation makes no representation to that effect and expressly disavows any covenant to avoid unfavorable tax treatment.  A Participant shall be solely responsible and liable for the satisfaction of all taxes, interest, and penalties that may be imposed on such Participant or for such Participant’s account in connection with any payment or benefit under the Plan (including any taxes, interest, and penalties under Section 409A or any corresponding provision of state, local, or foreign law), and the Corporation shall have no obligation to indemnify or otherwise hold such Participant harmless from any or all of such taxes, interest, or penalties.”

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3.  This Amendment shall not apply to any Award or any portion of an Award under the Plan that is outstanding as of the effective date hereof, to the extent that such Award or portion of an Award was vested on December 31, 2004.

4.  Except as provided herein, the terms of the Plan shall remain in full force and effect.

IN WITNESS WHEREOF, the Corporation has caused its duly authorized officer to execute this Amendment on this [      ] day of December, 2008.

CITY NATIONAL BANK

By:

Its:

4

EX-10.17

EXHIBIT 10.17

AMENDMENT TO

CITY NATIONAL CORPORATION

2008 OMNIBUS PLAN

WHEREAS, City National Corporation (the “Corporation”) maintains the City National Corporation 2008 Omnibus Plan (the “Plan”) to promote the success of the Corporation by providing an additional means through the grant of awards to attract, motivate, retain and reward key employees, including officers, whether or not directors, of the Corporation with awards and incentives for high levels of individual performance and improved financial performance of the Corporation, and to link Non-Employee Director compensation to shareholder interests through equity grants;

WHEREAS, awards under the Plan may constitute nonqualified deferred compensation within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder (“Section 409A”);

WHEREAS, pursuant to Section 6.6(a) of the Plan, the Board of Directors of the Corporation has the right to amend the Plan; and

WHEREAS, it is desirable to amend the Plan in order to avoid a violation of Section 409A;

NOW, THEREFORE, the Plan is hereby amended, effective as of January 1, 2009, with approval by the Board of Directors of City National Corporation, as follows:

1. Section 6.17(b) of the Plan shall be amended to read in its entirety as follows:

“(b)         Distributions Under a Section 409A Award.

(i)            Subject to paragraph (iv) below, the Award Agreement for any Section 409A Award shall provide that any Shares, cash, or other property or amounts to be paid or distributed upon the grant, issuance, vesting, exercise, or payment of such Award shall be distributed no earlier than any one or more of the following: (A) the Participant’s separation from service, as determined by the Corporation in accordance with Section 1.409A-1(h) of the Treasury Regulations and paragraph (iii) below; (B) the date on which the Participant becomes disabled, (C) the Participant’s death, (D) a specified time (or pursuant to a fixed schedule) specified under the Award Agreement on or before the date of the deferral of such compensation, (E) a change in the ownership or effective control of the Corporation, or in the ownership of a substantial portion of the assets of the Corporation, or (F) the occurrence of an unforeseeable emergency with respect to the Participant; in each case within the meaning of Section 409A of the Code and the Treasury Regulations thereunder.  Any payment upon the occurrence of an unforeseeable emergency shall be made only to the extent of the amount reasonably necessary to satisfy the emergency need, including amounts necessary to pay taxes reasonably anticipated as

1

a result of the distribution, after taking into account the extent to which such unforeseeable emergency is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship).

(ii)           Subject to paragraph (iv) below, if any Section 409A Award (including without limitation any Award of Restricted Stock Units, Performance Share Units, or Performance Units) provides for a payment upon termination of employment or service, such payment shall not be made unless the termination is a separation from service within the meaning of Section 409A of the Code, as determined by the Corporation in accordance with Section 1.409A-1(h) of the Treasury Regulations and paragraph (iii) below, and shall be payable as soon as practical (but no later than 90 days) following such separation from service.  To the extent that any Section 409A Award provides for payment upon disability, a change in control event, or the occurrence of an unforeseeable emergency (or any substantially similar event), such payment shall not be made unless such event is a disability, a change in the ownership or effective control of the Corporation or in the ownership of a substantial portion of the assets of the Corporation, or an unforeseeable emergency, respectively, in each case within the meaning of Section 409A of the Code and the Treasury Regulations thereunder.  For the avoidance of doubt, the foregoing sentence shall not limit the vesting provisions of the Plan or any Award Agreement.

(iii)          For purposes of determining whether a separation from service within the meaning of Section 409A has occurred, a Participant shall be considered to have separated from service as an employee when the facts and circumstances indicate that the Participant and the Corporation reasonably anticipate that either (A) no further services will be performed for the Corporation after a certain date, or (B) that the level of bona fide services the Participant will perform for the Corporation after such date (whether as an employee or as an independent contractor) will permanently decrease to no more than 20% of the average level of bona fide services performed by such Participant (whether as an employee or as an independent contractor) over the immediately preceding 36-month period (or the full period of services to the Corporation if the Participant has been providing services to the Corporation less than 36 months).  For purposes of the preceding sentence, services performed for the Corporation shall include services performed for (A) any corporation which is a member of a controlled group of corporations (within the meaning of Section 414(b) of the Code, substituting the language “at least 20 percent” for “at least 80 percent” each place it appears in Section 1563(a)(1), (2) and (3) of the Code) of which the Corporation is a component member, and (B) any entity (whether or not incorporated) which is under common control with the Corporation, as such common control is defined in Section 414(c) of the Code and the Treasury Regulations thereunder, substituting the language “at least 20 percent” for “at least 80 percent” each place it appears in Section 1.414(c)-2 of the Treasury Regulations.

(iv)          If, on the date of a Participant’s separation from service, (i) such Participant is a specified employee within the meaning of Section 409A of the Code, as determined annually by the Corporation in accordance with Section 1.409A-1(i) of the

2

Treasury Regulations (using the methodology for identifying Key Employees under Paragraph A.2 of Article VIII of the City National Corporation Profit Sharing Plan, as amended from time to time, to the extent permitted by Section 409A of the Code), and (ii) the Committee shall make a good-faith determination that a payment or benefit under the Plan constitutes “deferred compensation” within the meaning of Section 409A of the Code the payment (or, in the case of an installment payment, the commencement) of which is required to be delayed for a six-month period in order to preserve the tax treatment intended for such payment or to avoid additional tax, interest, or penalties under Section 409A of the Code, then any payment otherwise due upon separation from service shall not be paid (or, in the case of an installment payment, shall not commence) on the otherwise scheduled payment date, but shall instead be paid or shall commence no later than 90 days following the end of such six-month period, and, in the case of an installment payment, each subsequent installment shall be delayed by six months from the date such installment would otherwise have been paid (unless otherwise provided in an applicable Award Agreement that satisfies the requirements of Section 409A).  Such amount shall be paid without additional interest, unless otherwise determined by the Committee, in its sole discretion, or as otherwise provided in any applicable agreement between the Corporation and the Participant.

(v)           For purposes of this Section 6.17, the terms specified herein shall have the respective meanings ascribed thereto under Section 409A of the Code and the Treasury Regulations thereunder.”

2.             Section 6.17(c) of the Plan shall be amended to read in its entirety as follows:

“(c)         Amendments to Awards; Acceleration of Benefits.  The time or schedule of any distribution or payment of any Shares, cash, or other property or amounts under a Section 409A Award shall not be modified in any manner that causes a violation of Section 409A of the Code, and shall not be accelerated except as otherwise permitted under Section 409A(a)(3) of the Code.”

3.             Section 6.17(g) of the Plan shall be amended to read in its entirety as follows:

“(g)         No Representations or Covenants with Respect to Tax Qualification.  Although the Corporation may endeavor to (i) qualify an Award for favorable tax treatment (e.g., incentive stock options under Section 422 of the Code) or (ii) avoid adverse tax treatment (e.g., under Section 409A of the Code), the Corporation makes no representation to that effect and expressly disavows any covenant to maintain favorable or avoid unfavorable tax treatment.  A Participant shall be solely responsible and liable for the satisfaction of all taxes, interest, and penalties that may be imposed on such Participant or for such Participant’s account in connection with any payment or benefit under the Plan (including any taxes, interest, and penalties under Section 409A or any corresponding provision of state, local, or foreign law), and the Corporation shall have no obligation to indemnify or otherwise hold such Participant harmless from any or all of such taxes, interest, or penalties.”

4.             Except as provided herein, the terms of the Plan shall remain in full force and effect.

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IN WITNESS WHEREOF, the Bank has caused its duly authorized officer to execute this Amendment on this [      ] day of December, 2008.

CITY NATIONAL BANK

By:

Its:

4

EX-10.21

EXHIBIT 10.21

AMENDMENT NUMBER 4

TO

2000 CITY NATIONAL BANK

EXECUTIVE DEFERRED COMPENSATION PLAN

(As In Effect Immediately Prior to January 1, 2009)

WHEREAS, City National Bank (“Bank”) maintains the 2000 City National Bank Executive Deferred Compensation Plan (the “Plan”) to provide supplemental retirement income benefits for a select group of management and highly compensated employees through deferrals of salary and/or commissions and bonuses;

WHEREAS, amounts deferred and vested under the Plan on December 31, 2004, together with earnings on such amounts (collectively “Grandfathered Amounts”) are intended to be grandfathered under Section 409A of the Internal Revenue Code of 1986, as amended (“Code”) and remain subject to the terms of the Plan as in effect immediately prior to January 1, 2009;

WHEREAS, pursuant to Section 8.4 of the Plan, the Bank has the right to amend the Plan;

WHEREAS, it is desirable to amend the Plan with respect to the Grandfathered Amounts in order to avoid a violation of Section 409A; and

WHEREAS, this amendment is intended not to constitute a material modification, in accordance with Section 1.409A-6(a)(4)(i)(B) of the Treasury Regulations;

NOW, THEREFORE, the Plan is hereby amended, effective as of January 1, 2009, with approval by the Compensation, Nominating and Governance Committee of the Board of Directors of City National Corporation, as follows:

1.             The definition of “Beneficiary” in Section 1.2 of the Plan is amended to read as follows:

““Beneficiary” or “Beneficiaries” shall mean the person or persons last designated in writing by a Participant in accordance with procedures established by the Committee to receive the benefits specified hereunder (other than those benefits set forth in Section 6.5) in the event of the Participant’s death.  No beneficiary designation shall become effective until it is filed with the Committee.  If there is no Beneficiary designation in effect, or if there is no surviving designated Beneficiary, then the Beneficiary or Beneficiaries shall be, in order of priority: (a) the Participant’s surviving spouse, (b) if the Participant is not survived by a spouse, the revocable living trust established by the Participant during his or her lifetime, (c) the Participant’s children, per stirpes; or (d) the Participant’s estate.  The filing of a new beneficiary designation will cancel all beneficiary designations previously filed.  Any finalized divorce of a Participant subsequent to the date of filing of a beneficiary designation shall revoke such designation unless the

previous spouse was not designated as the Beneficiary.  In the event any amount is payable under the Plan to a minor, payment shall not be made to the minor, but instead shall be paid (i) to that person’s living parent(s) to act as custodian, (ii) if that person’s parents are then divorced, and one parent is the sole custodial parent, to such custodial parent, or (iii) if no parent of that person is then living, to a custodian selected by the Committee to hold the funds for the minor under the Uniform Transfers or Gifts to Minors Act in effect in the jurisdiction in which the minor resides.  If no parent is living and the Committee decides not to select another custodian to hold the funds for the minor, then payment shall be made to the duly appointed and currently acting guardian of the estate for the minor or, if no guardian of the estate for the minor is duly appointed and currently acting within 60 days after the date the amount becomes payable, payment shall be deposited with the court having jurisdiction over the estate of the minor.”

2.             The second sentence of Section 3.2(b) of the Plan is amended to read as follows:

“A Participant may change the designation made under this Section 3.2 with respect to any or all of his or her Plan Year Subaccounts by filing an election, on a form provided and in a manner specified by the Committee.”

3.             The fourth sentence of Section 6.2 of the Plan is amended to read as follows:

“Upon the payment of such withdrawal, (a) the Participant shall be ineligible to participate in the Plan (including, for the avoidance of doubt, under the terms of the Plan as amended for Plan Years 2004/05 and later) during the two Plan Years immediately following the Plan Year in which the withdrawal occurs, and (b) any deferral elections made by the Participant for such Plan Years shall terminate.”

4.             Except as provided herein, the terms of the Plan remain in full force and effect with respect to Grandfathered Amounts.

IN WITNESS WHEREOF, the Bank has caused its duly authorized officer to execute this Amendment on this     th day of December, 2008.

CITY NATIONAL BANK
By:
	Patti Fischer
Its:	Senior Vice President
	Human Resources

EX-10.22

Exhibit 10.22

2000 CITY NATIONAL BANK
EXECUTIVE DEFERRED COMPENSATION PLAN

(Amended and Restated for Plan Years 2004/05 and Later

Effective on January 1, 2009)

2000 City National Bank
Executive Deferred Compensation Plan

(Amended and Restated for Plan Years 2004/05 and Later

Effective on January 1, 2009)

TABLE OF CONTENTS

		Page
ARTICLE I
TITLE AND DEFINITIONS
1.1	Title	1
1.2	Definitions	1
ARTICLE II
PARTICIPATION
2.1	Participation	5
ARTICLE III
DEFERRAL ELECTIONS
3.1	Elections to Defer Compensation	6
3.2	Investment Elections	9
ARTICLE IV
ACCOUNTS
4.1	Deferral Account	12
4.2	Rollovers	13
4.3	Profit Sharing Make-Up Contributions	13
ARTICLE V
VESTING
5.1	Deferral Account	15

i

5.2	Profit Sharing Make-Up Contributions	15
ARTICLE VI
DISTRIBUTIONS
6.1	Distribution of Deferred Compensation	16
6.2	Nonscheduled In-Service Withdrawals	17
6.3	Hardship Withdrawals	17
6.4	Inability to Locate Participant	17
6.5	Death Benefit for Certain Participants	18
ARTICLE VII
ADMINISTRATION
7.1	Committee Action	19
7.2	Powers and Duties of the Committee	19
7.3	Construction and Interpretation	19
7.4	Information	20
7.5	Compensation, Expenses and Indemnity	20
7.6	Quarterly Statements	20
7.7	Claims Procedure	20
ARTICLE VIII
MISCELLANEOUS
8.1	Unsecured General Creditor	22
8.2	Restriction Against Assignment	22
8.3	Withholding	22
8.4	Amendment, Modification, Suspension or Termination	22
8.5	Governing Law	23
8.6	Receipt or Release	23
8.7	Payments on Behalf of Persons Under Incapacity	23
8.8	Headings, etc. Not Part of Agreement	23
8.9	Section 409A of the Code	23
8.10	Qualified Domestic Relations Orders	24

ii

2000 City National Bank
Executive Deferred Compensation Plan

(Amended and Restated for Plan Years 2004/05 and Later

Effective on January 1, 2009)

This 2000 City National Bank Executive Deferred Compensation Plan (the “Plan”), established by City National Bank effective as of January 1, 2000, to provide a tax-deferred capital accumulation opportunity to a select group of management and highly compensated employees through deferral of salary, bonuses and/or commissions, and subsequently amended on several occasions, is hereby amended and restated for Plan Years 2004/05 and later effective on January 1, 2009. The principal purpose of this amendment and restatement is to bring the Plan into compliance with Section 409A of the Code and the Treasury Regulations issued thereunder.  All amounts which were deferred and vested under this Plan on December 31, 2004, together with earnings on such amounts (collectively “Grandfathered Amounts”), are intended to be grandfathered under Section 409A of the Code. The Grandfathered Amounts shall not be subject to the terms of this amendment and restatement, but rather to the terms of the Plan as in effect immediately prior to January 1, 2009.  No prior amendments to the Plan subsequent to October 3, 2004 provided any new material benefits or rights or any material enhancement of any existing benefits or rights under the Plan with respect to the Grandfathered Amounts.

ARTICLE I
TITLE AND DEFINITIONS

1.1Title.

This Plan shall be known as the 2000 City National Bank Executive Deferred Compensation Plan.

1.2Definitions.

Whenever the following words and phrases are used in this Plan, with the first letter capitalized, they shall have the meanings specified below.

“Account” shall mean a Participant’s Deferral Account.

“Affiliate” shall mean (a) each corporation which is a member of a controlled group of corporations (within the meaning of Section 414(b) of the Code, substituting the language “at least 20 percent” for “at least 80 percent” each place it appears in Section 1563(a)(1), (2) and (3) of the Code) of which City National Bank is a component member and (b) each entity (whether or not incorporated) which is under common control with City National Bank, as such common control is defined in Section 414(c) of the Code and the Treasury Regulations issued thereunder, substituting the language “at least 20 percent” for “at least 80 percent” each place it appears in Section 1.414(c)-2 of the Treasury Regulations.

“Bank” shall mean City National Bank (or any successor corporation) and its Affiliates.

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“Beneficiary” or “Beneficiaries” shall mean the person or persons last designated in writing by a Participant in accordance with procedures established by the Committee to receive the benefits specified hereunder (other than those benefits set forth in Section 6.5) in the event of the Participant’s death.  No beneficiary designation shall become effective until it is filed with the Bank or its agent.  If there is no Beneficiary designation in effect, or if there is no surviving designated Beneficiary, then the Beneficiary or Beneficiaries shall be, in order of priority: (a) the Participant’s surviving spouse, (b) if the Participant is not survived by a spouse, the revocable living trust established by the Participant during his or her lifetime, (c) the Participant’s children, per stirpes; or (d) the Participant’s estate.  The filing of a new beneficiary designation will cancel all beneficiary designations previously filed.  Any finalized divorce of a Participant subsequent to the date of filing of a beneficiary designation shall revoke such designation unless the previous spouse was not designated as the Beneficiary.  In the event any amount is payable under the Plan to a minor, payment shall not be made to the minor, but instead shall be paid (i) to that person’s living parent(s) to act as custodian, (ii) if that person’s parents are then divorced, and one parent is the sole custodial parent, to such custodial parent, or (iii) if no parent of that person is then living, to a custodian selected by the Committee to hold the funds for the minor under the Uniform Transfers or Gifts to Minors Act in effect in the jurisdiction in which the minor resides.  If no parent is living and the Committee decides not to select another custodian to hold the funds for the minor, then payment shall be made to the duly appointed and currently acting guardian of the estate for the minor or, if no guardian of the estate for the minor is duly appointed and currently acting within 60 days after the date the amount becomes payable, payment shall be deposited with the court having jurisdiction over the estate of the minor.

“Board of Directors” shall mean the board of directors of the Bank.

“Bonus” shall mean any annual bonus payable to a Participant under any formal annual cash incentive compensation program maintained by the Bank in addition to the Participant’s Salary.

“CNC Profit Sharing Plan” shall mean the City National Corporation Profit Sharing Plan, as amended from time to time.

“CNC Stock” shall mean shares of City National Corporation Common Stock.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Commissions” shall mean any commissions payable to a Participant.

“Committee” shall mean the Bank’s Benefits Committee.

“Compensation” shall mean the Salary, Bonus and/or Commissions that the Participant is entitled to for services rendered to the Bank.

“Corporation” or “CNC” shall mean City National Corporation.

“Deferral Account” shall mean the bookkeeping account maintained by the Committee for each Participant that is credited with amounts equal to (a) the portion of the Participant’s Salary that he or she elects to defer, (b) the portion of the Participant’s Bonus that he or she

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elects to defer, (c) the portion of the Participant’s Commissions that he or she elects to defer, (d) the Participant’s Rollover Amount, if any, (e) the Profit Sharing Make-Up Contributions made on behalf of the Participant, and (f) earnings or losses pursuant to Section 4.1.

“Disability” shall mean an incapacity which has rendered the Participant eligible to commence receiving benefits under the Bank’s long-term disability plan and which constitutes a “disability” under Section 1.409A-3(i)(4) of the Treasury Regulations.

“Earnings Rate” shall mean, for each Fund, an amount equal to the net rate of gain or loss on the assets of such Fund during each business day.

“Eligible Employee” shall mean each officer of the Bank at the Senior Vice President level or above that is regularly scheduled to work thirty (30) or more hours per week or any other member of a select group of management and highly compensated employees of the Bank or its Affiliates that the Committee designates; provided, however, that no individual shall be an Eligible Employee until the first day of the calendar month coinciding with or following the date on which the individual first became such an officer or a member of such group.  Notwithstanding the foregoing, no employee of any Affiliate shall be an Eligible Employee unless such Affiliate has elected to participate in the Plan, and such participation shall be subject to approval by the Committee.

“Fund” or “Funds” shall mean one or more of the investment funds or portfolios selected by the Committee pursuant to Section 3.2(b).

“Grandfathered Amounts” shall mean all amounts which were deferred and vested under this Plan on December 31, 2004, together with earnings on such amounts.

“Initial Election Period” for an Eligible Employee shall mean the thirty-day period beginning on the date on which an individual first becomes an Eligible Employee.

“Participant” shall mean (a) any Eligible Employee who elects to defer Compensation in accordance with Section 3.1 and complies with the requirements of Section 2.1 and (b) any individual who is credited with a Rollover Amount pursuant to Section 4.2; and such Eligible Employee or individual shall remain a Participant until all amounts credited to his or her Plan Year Subaccounts under the Plan have been distributed or forfeited.

“Payment Eligibility Date” shall mean the date elected by the Participant pursuant to Section 3.1(h).

“Plan” shall mean the 2000 City National Bank Executive Deferred Compensation Plan set forth herein, now in effect, or as amended from time to time.

“Plan Year” shall mean the 12 consecutive month period beginning on January 1 and ending the following December 31.

“Plan Year Subaccounts” shall mean subaccounts of a Participant’s Deferral Account established to separately account for Compensation deferred (and earnings or losses thereon) for each Plan Year in which a Participant participates in the Plan and for any Rollover Amounts.

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“Prior Plan” shall mean the City National Bank Executive Deferred Compensation Plan.

“Profit Sharing Make-Up Contribution” shall mean an employer contribution made in accordance with Section 4.3.

“Rollover Amount” shall mean the amount determined in accordance with Section 4.2.

“Salary” shall mean the Participant’s base salary.

“Separation from Service” shall mean a “separation from service” within the meaning of Section 409A of the Code, as determined by the Committee in accordance with Section 1.409A-1(h) of the Treasury Regulations.  For purposes of determining whether a Separation from Service has occurred, a Participant shall be considered to have separated from service as an employee when the facts and circumstances indicate that the Participant and the Bank reasonably anticipate that either (i) no further services will be performed for the Bank (including any Affiliates) after a certain date, or (ii) that the level of bona fide services the Participant will perform for the Bank (including any Affiliates) after such date (whether as an employee or as an independent contractor) will permanently decrease to no more than 20% of the average level of bona fide services performed by such Participant (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services to the Bank if the Participant has been providing services to the Bank less than 36 months).

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ARTICLE II

PARTICIPATION

2.1Participation.

(a) Generally.  An Eligible Employee shall become a Participant in the Plan by (i) electing to defer Compensation in accordance with Section 3.1, (ii) if required by the Committee, filing a life insurance application form along with his or her deferral election form, and (iii) satisfying any medical underwriting requirement established by the Committee.

(b) Participants with Split-Dollar Life Insurance Agreements.  Notwithstanding the foregoing, unless the Committee provides otherwise, an Eligible Employee who has entered into a Split-Dollar Life Insurance Agreement with the Corporation must execute an “Agreement for Transfer of Policy and Termination of Split-Dollar Life Insurance Agreement” in order to defer Compensation under this Plan.  Notwithstanding anything contained herein to the contrary, (i) if an Eligible Employee is allowed to defer Compensation under this Plan without executing an “Agreement for Transfer of Policy and Termination of Split-Dollar Life Insurance Agreement” (a “Policy Transfer Agreement”), then no portion of such Participant’s account balance under the Prior Plan shall be transferred to his or her Account under this Plan and (ii) if an Eligible Employee is allowed to defer Compensation under this Plan prior to executing a Policy Transfer Agreement, then no portion of such Participant’s account balance under the Prior Plan shall be transferred to his or her Account under this Plan until such Participant executes a Policy Transfer Agreement.

(c) Duration of Participation.  Any deferral election of a Participant who ceases to be an Eligible Employee shall terminate effective as of December 31 of the Plan Year in which such cessation occurs (but shall apply to any Compensation earned during such Plan Year that becomes payable following the end of such Plan Year).

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ARTICLE III

DEFERRAL ELECTIONS

3.1Elections to Defer Compensation.

(a) Initial Election Period.  Subject to Section 2.1, each Eligible Employee may elect to defer Compensation by filing with the Bank or its agent an election that conforms to the requirements of this Section 3.1, using a form, method, or process approved by the Committee, no later than the last day of his or her Initial Election Period.  Such election shall be irrevocable as of the date it is filed with the Bank or its agent. An Eligible Employee who terminates employment and who is subsequently reemployed by the Bank, or who ceases to be an Eligible Employee and is subsequently reinstated as an Eligible Employee as a result of changes in the employee’s duties or title or otherwise, shall not be entitled to make an election pursuant to this Section 3.1(a) as a result of such reemployment or reinstatement.

(b) General Rule.  The amount of Compensation which an Eligible Employee may elect to defer is as follows, subject to the limitations in Section 3.1(d), if applicable:

(i)Any percentage or dollar amount of Salary up to 85%;

(ii)Any percentage or dollar amount of Bonus up to 100%; and/or

(iii)Any percentage or dollar amount of Commissions up to 100%;

provided, however, that no election shall be effective to reduce the Compensation paid to an Eligible Employee for a calendar year to an amount which is less than the amount that the Bank is required to withhold from such Eligible Employee’s Compensation for such calendar year for purposes of federal, state and local (if any) income tax and employment tax (including Federal Insurance Contributions Act (FICA) tax withholding), as permitted by Section 1.409A-3(j)(4)(vi) of the Treasury Regulations.

(c) Minimum Deferrals.  [Intentionally Omitted.]

(d) Effect of Initial Election.  The amount of Salary, Commissions and Bonus deferred pursuant to an election made during the Initial Election Period shall not exceed (i) with respect to Salary and/or Commissions, the amount of Salary and/or Commissions earned during the first full pay period beginning after the date on which the Participant’s election to defer Compensation is filed with the Bank or its agent and each subsequent pay period beginning in the same Plan Year; and (ii) with respect to Bonus, a portion of the Bonus paid with respect to services performed in the Plan Year for which the election is made determined by multiplying the amount of such Bonus by the ratio of (A) the number of calendar days remaining in the period to which the Bonus relates after the date on which the Participant’s election is filed with the Bank or its agent over (B) the total number of calendar days the Participant is employed by the Bank during the period to which the Bonus relates.

(e) Elections other than Elections during the Initial Election Period.  Subject to the requirements of Section 2.1, any Eligible Employee may participate for any Plan Year by filing  an election, using a form, method, or process approved by the Committee, to defer Compensation

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as described in paragraph (b) above.  An election to defer Compensation for a Plan Year must be filed on or before December 1 of the preceding Plan Year, or such other date as the Bank establishes, which date shall be no later than December 31 of the preceding Plan Year, and will be effective for Salary, Commissions and/or Bonus earned during pay periods beginning on or after January 1 of the Plan Year for which the election applies.

(f) Duration of Deferral Elections.  Any election made under this Plan to defer Compensation shall apply only to Compensation payable with respect to services performed during the Plan Year for which the election is made.  For each subsequent Plan Year, a Participant who remains an Eligible Employee may make a new election, subject to the limitations set forth in this Section 3.1, to defer a percentage of his or her Compensation.

(g) In-Service Distributions.  At the time of making an election to defer Compensation for a Plan Year pursuant to this Section 3.1, a Participant may elect (using a form, method, or process approved by the Committee) to receive an in-service distribution of the amount deferred under such election, together with earnings or losses credited with respect to such amounts pursuant to Article IV, in a lump sum payment, or in annual installments over 2, 3, 4, or 5 years, paid or commencing within 90 days following any January 1 that occurs after the second anniversary of the last day of the Plan Year in which the amount deferred was earned.  In addition, each Participant who has a Rollover Amount credited to his or her Account pursuant to Section 4.2 shall be permitted to elect, on or before December 31, 1999, to receive an in-service distribution of such Rollover Amount, together with earnings or losses, within 90 days following January 1 of 2003 or any later year.  A Participant who has timely elected an in-service distribution in accordance with this Section 3.1(g) may subsequently elect to defer the year of any such in-service distribution or to change the form of an in-service distribution by filing an election with the Bank or its agent, using a form, method, or process approved by the Committee, at least one year prior to the first day of the previously elected in-service distribution year; provided that pursuant to such election, the in-service distribution is deferred to the 90-day period following any subsequent January 1 that is at least five years from the prior scheduled distribution date.  The election to defer the year of an in-service distribution may be made no more than twice.  If a Participant elects an in-service distribution but fails to specify the form of payment, the Participant will be deemed to have elected a lump sum payment.  If a Participant fails to make a distribution election under this Section 3.1(g) for a Plan Year, or fails to specify the year in which the in-service distribution shall be made, the Compensation deferred for that Plan Year shall be distributed as set forth in Section 6.1(b).

(h) Elections for Alternative Time and Form of Distribution.  At the time of making an election to defer Compensation for a Plan Year pursuant to this Section 3.1, a Participant may elect (using a form, method, or process approved by the Committee) an alternative time or form of benefit for distribution of the Compensation deferred for that Plan Year pursuant to Section 6.1(b), as follows:

(i)The Participant may elect one of the following Payment Eligibility Dates:

(A)The first day of the first calendar quarter following the calendar quarter in which the Participant has a Separation from Service with the Bank, incurs a Disability or dies;

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(B)January 1 of the first calendar year following the calendar year in which the Participant has a Separation from Service with the Bank, incurs a Disability or dies; or

(C)January 1 of any one of the second, third, fourth, fifth, or sixth calendar years following the calendar year in which the Participant has a Separation from Service with the Bank, incurs a Disability or dies (which may otherwise be described in any enrollment forms or materials as the January that is 1-5 years following termination of employment, or 1-5 years following the anniversary of termination of employment).

(ii)The Participant may elect one of the following forms of benefit:

(A)A lump sum payment; or

(B)Payment in 20, 40, or 60 substantially equal quarterly installments.

Subject to the provisions of Section 6.1(b), this election will apply to the Compensation deferred for such Plan Year if (x) the Participant does not elect an in-service distribution with respect to such deferred Compensation pursuant to Section 3.1(g) or (y) the Participant elects an in-service distribution but the Participant’s Separation from Service, Disability or death occurs prior to commencement of such in-service distribution.  If the Participant does not elect a Payment Eligibility Date, the Participant will be deemed to have elected the Payment Eligibility Date set forth in clause (i)(A) of this Section 3.1(h).  If the Participant does not elect a form of benefit, the Participant will be deemed to have elected a lump sum payment.

A Participant who has elected a Payment Eligibility Date set forth in clause (i)(A) of this Section 3.1(h) may make a one-time election to change the Payment Eligibility Date to the date that is five years following the original Payment Eligibility Date or to the January 1 following such date, and a Participant who has elected the Payment Eligibility Date set forth in clause (i)(B) of this Section 3.1(h) may make a one-time election to change the Payment Eligibility Date to the date that is five years following the original Payment Eligibility Date, in each case by filing an election with the Bank or its agent, using a form, method, or process approved by the Committee, at least one year prior to the original Payment Eligibility Date; and a Participant making such change may at the Participant’s option also concurrently change the form of benefit.  No change to an election made under this Section 3.1(h) shall be permitted except as expressly permitted herein.

(i) Effect of Elections.  Each distribution election under Section 3.1(g) and Section 3.1(h) shall apply only to the Compensation deferred for the Plan Year for which the election is made.  For each subsequent Plan Year a Participant may make a separate election.  Any election filed pursuant to this Section 3.1 shall be irrevocable for any one Plan Year except to the extent provided in Section 3.1(g), Section 3.1(h), Section 6.1, Section 6.2 and Section 6.3.

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3.2Investment Elections.

(a) At the time of making each deferral election described in Section 3.1, the Participant shall designate, using a form, method, or process approved by the Committee, which Fund or Funds the Compensation deferred pursuant to such election will be deemed to be invested in for purposes of determining the amount of earnings or losses to be credited or debited to his or her Plan Year Subaccount that the Committee establishes pursuant to Section 4.1 to account for such deferred Compensation.

(b) In making the designation pursuant to this Section 3.2, the Participant must specify, in multiples of one (1), the percentage of his or her corresponding Plan Year Subaccount that shall be deemed to be invested in one or more Funds.  A Participant may change the designation made under this Section 3.2 with respect to any or all of his or her Plan Year Subaccounts by filing an election, using a form, method, or process approved by the Committee.  If a Participant fails to make an investment election for Compensation deferred in any Plan Year, the Participant’s most recent investment election for future deferrals shall apply to the Plan Year Subaccount established for such Plan Year and each Plan Year Subaccount established with respect to any subsequent Plan Year Subaccount(s) until the Participant files an election with the Bank or its agent in accordance with the provisions of this Section 3.2 with respect to such Plan Year Subaccount(s).  Notwithstanding the foregoing, if a Participant has not previously elected a Fund under this Section 3.2, he or she shall be deemed to have elected the money market option, or such other Fund that the Committee designates as the default fund for purposes of this Plan.

(c) The Committee shall select from time to time, in its sole discretion, the Funds in which Compensation deferred under this Plan will be deemed to be invested.  The Earnings Rate of each Fund shall be used to determine the amount of earnings or losses to be credited or debited to the Participant’s Deferral Account under Article IV.  The Bank reserves the right to change the Funds, and to increase or decrease the number of Funds, available as the Funds for purposes of this Plan.

(d) Notwithstanding the Participant’s ability to designate the Funds in which the Plan Year Subaccounts of his or her Deferral Account shall be deemed to be invested, the Bank shall have no obligation to invest any funds in accordance with any Participant’s election.  A Participant’s Deferral Account shall merely be a bookkeeping entry on the Bank’s books, and no Participant shall obtain any interest in any of the Funds.

(e) Effective as of January 1, 2008, the “CNC Stock” Fund will be added as a Fund available under the Plan, subject to the following conditions and such other conditions as the Committee which administers the Plan may determine:

(i)A Participant may designate, using a form, method, or process approved by the Committee, a percentage of his or her Plan Year Subaccount for any Plan Year that shall be deemed to be invested in the CNC Stock Fund.

(A)A Participant must make an election to designate the CNC Stock Fund for all or a specified percentage of his or her Plan Year Subaccount for any Plan Year beginning in 2008 or thereafter at the time when the Participant elects to defer compensation for such Plan Year.

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(B)A Participant will only be permitted to make a one-time election in 2007 to designate the CNC Stock Fund for all or specified percentages of his Plan Year Subaccounts for 2007 or earlier years.

(ii)Notwithstanding any other provision of the Plan, a Participant may not subsequently change his or her investment election (or diversify out of the CNC Stock Fund) for any amounts which the Participant has designated to be invested in the CNC Stock Fund.

(iii)Notwithstanding any other provision of the Plan, unless otherwise permitted by the Committee, no in-service distribution election may be made by a Participant for any Plan Year Subaccount if any portion of such Plan Year Subaccount is designated to be invested in the CNC Stock Fund.  The portion of any Plan Year Subaccount which is designated to be invested in the CNC Stock Fund will be distributed in a lump sum or installments following the Participant’s Separation from Service, Disability or death at the same time when other distributions are made from such Plan Year Subaccount pursuant to the distribution elections made by the Participant in accordance with the provisions of the Plan.

(A)A Participant may not designate the CNC Stock Fund for his or her Plan Year Subaccount for 2004 or any earlier year for which the Participant has previously elected to receive an in service distribution.

(B)A Participant may not designate the CNC Stock Fund for his or her Plan Year Subaccount for any Plan Year between 2004 and 2007 for which the Participant has previously elected to receive an in service distribution, unless the Participant makes a new election in 2007 for such Plan Year Subaccount to receive a distribution in a lump sum or installments following the Participant’s Separation from Service, Disability or death in accordance with the provisions of the Plan.

(iv)The CNC Stock Fund will be measured in number of shares of City National Corporation Common Stock (“CNC Stock”).  The number of shares of CNC Stock will be appropriately adjusted, as determined by the Committee, to reflect any stock splits, reverse stock splits, stock dividends, or similar events.

(v)Shares in the CNC Stock Fund do not convey the rights to ownership of shares of CNC Stock and do not have voting rights.  The Bank’s obligation with respect to the CNC Stock Fund is unfunded.  A Participant will only acquire ownership and voting rights when shares of CNC Stock are actually distributed to the Participant in accordance with the provisions of the Plan.

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(vi)All distributions from the CNC Stock Fund will be made solely in CNC Stock, except that any fractional shares will be paid in cash.  The number of shares distributed will be reduced to cover all taxes which are required to be withheld by Bank in respect to distributions of CNC Stock under the Plan.

(vii)All cash dividends which are paid on CNC Stock held in the CNC Stock Fund will not be deemed to be invested in the CNC Stock Fund, but will be credited in cash and will initially be deemed to be invested in the money market option or such other Fund that the Committee designates for this purpose, and thereafter may be reallocated by the Participant among Funds (other than the CNC Stock Fund) as permitted by the Committee.

(viii)All CNC Stock which is distributed to Participants pursuant to this Plan will be distributed under a plan which has been approved by the stockholders of the Corporation, if required to comply with any applicable federal or state law or applicable New York Stock Exchange listing standard.

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ARTICLE IV

ACCOUNTS

4.1Deferral Account.

The Committee shall establish and maintain a Deferral Account for each Participant under the Plan.  The Deferral Account shall be divided into Plan Year Subaccounts to separately account for deferrals made for each Plan Year.  A Participant’s Plan Year Subaccounts shall be divided into separate subaccounts (“investment subaccounts”), each of which corresponds to a Fund elected by the Participant pursuant to Section 3.2(a).  A Participant’s Plan Year Subaccount for a Plan Year shall be credited as follows:

(a) The Committee shall credit the investment subaccounts of the Plan Year Subaccount of the Participant’s Deferral Account with an amount equal to Salary deferred by the Participant during each pay period that begins in the Plan Year for which the Plan Year Subaccount is established on the day such Salary would have been paid, in accordance with the Participant’s election under Section 3.2(a); that is, the portion of the Participant’s deferred Salary that the Participant has elected to be deemed to be invested in a certain Fund shall be credited to the investment subaccount corresponding to that Fund; provided, however, that if a Participant has designated the CNC Stock Fund pursuant to Section 3.2(e) with respect to any Plan Year Subaccount or percentage thereof, then any amounts of Salary credited to the investment subaccounts of such Plan Year Subaccount pursuant to this Section 4.1(a) shall be credited on the last business day of the month in which such Salary would have been paid;

(b) The Committee shall credit the investment subaccounts of the Plan Year Subaccount of the Participant’s Deferral Account with an amount equal to the portion of the Bonus deferred by the Participant for the Plan Year for which the Plan Year Subaccount is established on the day the Bonus or partial Bonus would have been paid, in accordance with the Participant’s election under Section 3.2(a); that is, the portion of the Participant’s deferred Bonus that the Participant has elected to be deemed to be invested in a certain Fund shall be credited to the investment subaccount corresponding to that Fund;

(c) The Committee shall credit the investment subaccounts of the Plan Year Subaccount of the Participant’s Deferral Account with an amount equal to the portion of the Commissions deferred by the Participant earned during the Plan Year for which the Plan Year Subaccount is established on the day the Commissions would have been paid, in accordance with the Participant’s election under Section 3.2(a); that is, the portion of the Participant’s deferred Commission that the Participant has elected to be deemed to be invested in a certain Fund shall be credited to the investment subaccount corresponding to that Fund; and

(d) As of the close of each business day, each investment subaccount of a Participant’s Plan Year Subaccount of the Participant’s Deferral Account shall be credited with earnings or losses in an amount determined by multiplying the balance credited to such investment subaccount as of the beginning of the same business day by the Earnings Rate for the corresponding Fund; provided, however, that all cash dividends which are paid on CNC Stock held in the CNC Stock Fund shall be credited in accordance with Section 3.2(e)(vii) on the day such dividends would otherwise be paid.

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4.2Rollovers.

If an individual who was both an active employee of the Bank and a participant in the Prior Plan on December 31, 1999 either (a) executes an “Agreement for Transfer of Policy and Termination of Split-Dollar Life Insurance Agreement” or (b) did not own a life insurance policy that was subject to a Split-Dollar Life Insurance Agreement with the Corporation on December 31, 1999, then his or her account balance under the Prior Plan shall be transferred to an Account established for such individual under this Plan, shall be governed by the terms and conditions of this Plan and shall be referred to as the “Rollover Amount.”  A Participant’s Rollover Amount shall be credited to a separate Plan Year Subaccount.  A Participant may make separate distribution and investment elections applicable to his or her Rollover Amount in accordance with Articles III and VI of this Plan.

4.3Profit Sharing Make-Up Contributions.

(a) In the case of a Participant entitled to receive an allocation of Employer Contributions under Paragraph D.2 of Article IV of the CNC Profit Sharing Plan with respect to any Plan Year, such Participant’s Plan Year Subaccount for such Plan Year shall be credited with additional contributions by the Bank or the Corporation at such time and in such amount set forth in this Section 4.3 (“Profit Sharing Make-Up Contributions”); provided, however, that a Participant shall not be eligible to receive a Profit Sharing Make-Up Contribution for any Plan Year unless the Participant is an employee of the Bank or an Affiliate on the last business day of such Plan Year.

(b) The aggregate amount of Profit Sharing Make-Up Contributions to all Participants for a Plan Year shall be the excess, if any, of (i) the aggregate amount of the Employer Contribution under the CNC Profit Sharing Plan for such Plan Year, if such contribution were determined without giving effect to any deferrals by Participants under this Plan (but giving effect to any other limitations on the amount of the Employer Contribution pursuant to the CNC Profit Sharing Plan), over (ii) the aggregate amount of the actual Employer Contribution made under the CNC Profit Sharing Plan for such Plan Year.  For the avoidance of doubt, the actual Employer Contribution made under the CNC Profit Sharing Plan, together with the aggregate Profit Sharing Make-Up Contributions under this Plan, for any Plan Year shall not exceed the aggregate maximum limit allowed under the CNC Profit Sharing Plan.  No Profit-Sharing Make-Up Contributions shall be made for a Plan Year if the actual Employer Contribution is equal to the aggregate maximum limit allowed under the CNC Profit Sharing Plan

(c) Each Participant’s Profit Sharing Make-Up Contribution for such Plan Year shall be determined by multiplying the aggregate amount (if any) computed under Section 4.3(b) by the ratio of (i) the amount of Compensation (as such term is used in the CNC Profit Sharing Plan) that such Participant has elected to defer pursuant to this Plan for such Plan Year, over (ii) the aggregate amount of Compensation (as such term is used in the CNC Profit Sharing Plan) that each Participant who is eligible to receive a Profit Sharing Make-Up Contribution has elected to defer pursuant to this Plan for such Plan Year.  For purposes of the preceding sentence, the amount of Compensation (as such term is used in the CNC Profit Sharing Plan) deferred by any Participant for a Plan Year shall be determined by calculating the excess of such Participant’s Compensation (as such term is used in the CNC Profit Sharing Plan) for such Plan Year without

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giving effect to any deferral under this Plan over such Participant’s actual Compensation (as such term is used in the CNC Profit Sharing Plan) for such Plan Year.

(d) The Profit Sharing Make-Up Contribution shall be credited to the Participant’s Plan Year Subaccount for the Plan Year to which such Profit Sharing Make-Up Contribution relates, and shall be credited to such Plan Year Subaccount on the last business day of the month in which an Employer Contribution was made under the CNC Profit Sharing Plan with respect to such Plan Year (but in any event no later than the end of the first Plan Year following the Plan Year to which such Profit Sharing Make-Up Contribution relates).

(e) Each Profit Sharing Make-Up Contribution shall be subject to the deferral elections and investment elections under Article III of this Plan (other than any election under Section 3.1(g) of this Plan) applicable to the Plan Year Subaccount to which such Profit Sharing Make-Up Contribution was credited and shall be invested and distributed in accordance with such elections and Section 6.1(b) of this Plan.

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ARTICLE V

VESTING

5.1Deferral Account.

A Participant’s Deferral Account shall be 100% vested at all times, except as otherwise provided in Section 5.2 hereof.

5.2Profit Sharing Make-Up Contributions.

The portion of each Plan Year Subaccount attributable to Profit Sharing Make-Up Contributions shall vest in accordance with the vesting provisions for Employer Contribution Accounts under the CNC Profit Sharing Plan, as set forth in Article VI of the CNC Profit Sharing Plan.

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ARTICLE VI

DISTRIBUTIONS

6.1Distribution of Deferred Compensation.

(a) Distribution of the amount credited to each Plan Year Subaccount of the Participant’s Deferral Account that is subject to an in-service distribution election made by the Participant pursuant to Section 3.1(g) shall be made or shall commence within 90 days following January 1 of the year elected by the Participant in the form elected by the Participant, provided that the Participant is employed by the Bank on January 1 of such year.  In the event of the Participant’s Separation from Service with the Bank for any reason, Disability or death prior to January 1 of a year elected by the Participant for a Plan Year Subaccount pursuant to Section 3.1(g), the Participant’s in-service distribution election for such Plan Year Subaccount shall no longer be effective and all of the amounts credited to such Plan Year Subaccount shall be distributed as set forth in the following subsections of this Section 6.1 in accordance with any applicable election by the Participant.  In the event of the Participant’s Separation from Service, Disability or death while the Participant is receiving an in-service distribution from one or more Plan Year Subaccounts in the form of annual installments, such payments will continue as scheduled.

(b) In the event of a Participant’s Separation from Service for any reason, Disability, or death, the amounts credited to each Plan Year Subaccount that is not then in pay status pursuant to an in-service distribution election shall be distributed to the Participant (or his or her Beneficiary) in accordance with this Section 6.1(b) and the Participant’s elections under Section 3.1(h), as follows:

(i)If the Participant has elected a lump sum payment with respect to a Plan Year Subaccount, such payment will be made within 90 days following the Payment Eligibility Date.

(ii)If the Participant has elected payment in installments with respect to a Plan Year Subaccount, the first installment shall be paid within 90 days following the Payment Eligibility Date, and each subsequent quarterly installment shall be paid within 90 days following the first day of the applicable calendar quarter.

(iii)Notwithstanding anything contained in this Section 6.1(b) to the contrary, in the event that the total aggregate amount credited to a Participant’s Deferral Account is less than $25,000 as of the end of the month preceding the Participant’s Payment Eligibility Date for a Plan Year Subaccount, the amounts credited to such Plan Year Subaccount shall be paid in a cash lump sum payment within 90 days following the Payment Eligibility Date.

(c) [Intentionally Omitted.]

(d) The Participant’s Plan Year Subaccounts shall continue to be credited with earnings pursuant to Sections 4.1 and 4.2 of the Plan until all amounts credited to his or her Plan Year Subaccounts under the Plan have been distributed.

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(e) In the event that a former Participant dies while receiving installment payments under this Plan, any remaining installments shall be paid to the Participant’s Beneficiary as such installments would have otherwise been due to the Participant.

(f) [Intentionally Omitted.]

(g) A change in control of the Bank or the Corporation shall not accelerate the distribution of amounts credited to Participants’ Deferral Accounts.

6.2Nonscheduled In-Service Withdrawals.

No nonscheduled in-service withdrawals are permitted under the Plan.  In the event that a Participant elects a nonscheduled in-service withdrawal with respect to Grandfathered Amounts in accordance with the terms of the Plan as in effect immediately prior to January 1, 2009, (a) the Participant shall be ineligible to participate in the Plan during the two Plan Years immediately following the Plan Year in which the withdrawal occurs, and (b) any deferral elections made by the Participant for such Plan Years shall terminate.

6.3Hardship Withdrawals.

Upon written request of a Participant, the Committee may, in its sole discretion, make a lump sum payment to a Participant and/or accelerate the payment of installment payments due to the Participant in order to meet a severe financial hardship to the Participant resulting from (a) a sudden and unexpected illness or accident of the Participant or the Participant’s spouse, beneficiary, or dependent within the meaning of Section 1.409A-3(h)(3) of the Treasury Regulations, (b) loss of the Participant’s property due to casualty or (c) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.  However, no payment shall be made under this Section 6.3 to the extent that a hardship is or may be relieved (a) through reimbursement or compensation by insurance or otherwise, (b) by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship or (c) by cessation of deferrals under the Plan effective for the next Plan Year in accordance with Section 1.409A-3(j)(4)(viii) of the Treasury Regulations.  The amount of any hardship lump sum payment and/or accelerated amount under this Section 6.3 shall not exceed the lesser of (a) the amount reasonably necessary to meet the immediate financial need created by such hardship or (b) the entire amounts credited to the Participant’s Accounts.  The amount of any such payments shall be deducted from the amounts credited to the Participant’s Plan Year Subaccounts in such order and in such proportions as the Committee may determine in its sole discretion.  The remaining amounts credited to a Participant’s Plan Year Subaccounts shall be distributed in accordance with the Participant’s elections with respect to such Plan Year Subaccounts.  Any hardship withdrawals under this Section 6.3 shall comply with the requirements of Section 409A of the Code.

6.4Inability to Locate Participant.

In the event that the Committee is unable to locate a Participant or Beneficiary within two years following the Participant’s Payment Eligibility Date, the amounts allocated to the Participant’s Deferral Account shall be forfeited.  If, after such forfeiture, the Participant or

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Beneficiary later claims such benefits, such benefits shall be reinstated without interest or earnings, to the extent permitted by Section 409A of the Code.

6.5Death Benefit for Certain Participants.

(a) For each Participant who is named in the list attached hereto as Schedule 1, the Bank shall provide life insurance coverage in the amount set forth next to his or her name in Schedule 1, beginning on the date such Participant executes an “Agreement for Transfer of Policy and Termination of Split-Dollar Life Insurance Agreement” and ending on December 31, 2009 (the “Coverage Period”).  Such life insurance coverage shall remain in effect throughout the Coverage Period even if the Participant ceases to be employed by the Bank.

(b) The Bank shall provide such life insurance coverage by maintaining a life insurance policy (the “Policy”) on the life of each named Participant.  Each such Participant shall be entitled to name a beneficiary (which need not be his or her Beneficiary under this Plan) to receive the portion of the death benefit under the Policy that is equal to the amount set forth as his or her death benefit in Schedule 1 (his or her “Death Benefit”).  The Participant may make a beneficiary designation or change a beneficiary designation in writing in accordance with procedures established by the Committee.  No beneficiary designation will become effective until it is filed in accordance with the Committee’s procedures.  If no beneficiary designation is in effect, the Death Benefit shall be paid to the Participant’s Beneficiary under this Plan.  If the actual death benefit under the Policy exceeds the Death Benefit, the excess death benefit under the Policy shall be paid to the Bank.

(c) At the end of the Coverage Period, the Bank shall cease to provide the life insurance coverage described herein and the provisions of this Section 6.5 shall terminate and have no further effect.

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ARTICLE VII

ADMINISTRATION

7.1Committee Action.

The Committee shall act at meetings by affirmative vote of a majority of the members of the Committee.  Any action permitted to be taken at a meeting may be taken without a meeting if, prior to such action, a written consent to the action is signed by all members of the Committee and such written consent is filed with the minutes of the proceedings of the Committee.  A member of the Committee shall not vote or act upon any matter which relates solely to himself or herself as a Participant.  The Chairman or any other member or members of the Committee designated by the Chairman may execute any certificate or other written direction on behalf of the Committee.

7.2Powers and Duties of the Committee.

(a) The Committee, on behalf of the Participants and their Beneficiaries, shall enforce the Plan in accordance with its terms, shall be charged with the general administration of the Plan, and shall have all powers necessary to accomplish its purposes, including, but not by way of limitation, the following:

(i)To select the funds or portfolios to be the Funds in accordance with Section 3.2(b) hereof;

(ii)To construe and interpret the terms and provisions of this Plan;

(iii)To compute and certify to the amount and kind of benefits payable to Participants and their Beneficiaries;

(iv)To maintain all records that may be necessary for the administration of the Plan;

(v)To provide for the disclosure of all information and the filing or provision of all reports and statements to Participants, Beneficiaries or governmental agencies as shall be required by law;

(vi)To make and publish such rules for the regulation of the Plan and procedures for the administration of the Plan as are not inconsistent with the terms hereof; and

(vii)To appoint a plan administrator or any other agent, and to delegate to them such powers and duties in connection with the administration of the Plan as the Committee may from time to time prescribe.

7.3Construction and Interpretation.

The Committee shall have full discretion to construe and interpret the terms and provisions of this Plan, which interpretation or construction shall be final and binding on all

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parties, including but not limited to the Bank and any Participant or Beneficiary.  The Committee shall administer such terms and provisions in a uniform and nondiscriminatory manner and in full accordance with any and all laws applicable to the Plan.

7.4Information.

To enable the Committee to perform its functions, the Bank shall supply full and timely information to the Committee on all matters relating to the Compensation of all Participants, their death or other cause of termination, and such other pertinent facts as the Committee may require.

7.5Compensation, Expenses and Indemnity.

(a) The members of the Committee shall serve without compensation for their services hereunder.

(b) The Committee is authorized at the expense of the Bank to employ such legal counsel as it may deem advisable to assist in the performance of its duties hereunder.  Expenses and fees in connection with the administration of the Plan shall be paid by the Bank.

(c) To the extent permitted by applicable state law, the Bank shall indemnify and save harmless the Committee and each member thereof, the Board of Directors and each member thereof, and delegates of the Committee who are employees of the Bank against any and all expenses, liabilities and claims, including legal fees to defend against such liabilities and claims arising out of their discharge in good faith of responsibilities under or incident to the Plan, other than expenses and liabilities arising out of willful misconduct.  This indemnity shall not preclude such further indemnities as may be available under insurance purchased by the Bank or provided by the Bank under any bylaw, agreement or otherwise, as such indemnities are permitted under state law.

7.6Quarterly Statements.

Under procedures established by the Committee, a Participant shall receive a statement with respect to such Participant’s Account as of the last day of each calendar quarter.

7.7Claims Procedure.

(a) Claim.  A person who believes that he or she is being denied a benefit to which he or she is entitled under this Plan (hereinafter referred to as “Claimant”) may file a written request for such benefit with the Committee, setting forth his or her claim.  The request must be addressed to the Committee at the Bank’s principal place of business.

(b) Claim Decision.  Upon receipt of a claim, the Committee shall advise the Claimant that a reply will be forthcoming within ninety (90) days and shall, in fact, deliver such reply within such period.  The Committee may, however, extend the reply period for an additional ninety (90) days for special circumstances.  If the claim is denied in whole or in part, the Committee shall inform the Claimant in writing, using language calculated to be understood by the Claimant, setting forth:  (i) the specified reason or reasons for such denial; (ii) the specific

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reference to pertinent provisions of this Plan on which such denial is based; (iii) a description of any additional material or information necessary for the Claimant to perfect his or her claim and an explanation why such material or such information is necessary; (iv) appropriate information as to the steps to be taken if the Claimant wishes to submit the claim for review; and (v) the time limits for requesting a review under subsection (c).

(c) Request for Review.  Within sixty (60) days after the receipt by the Claimant of the written opinion described above, the Claimant may request in writing that the Committee review the determination.  Such request must be addressed to the Committee, at the Bank’s principal place of business.  The Claimant or his or her duly authorized representative may, but need not, review the pertinent documents and submit issues and comments in writing for consideration by the Committee.  If the Claimant does not request a review within such sixty (60) day period, he or she shall be barred and estopped from challenging the original determination.

(d) Review of Decision.  Within sixty (60) days after the Committee’s receipt of a request for review, after considering all materials presented by the Claimant, the Committee will inform the Claimant in writing, in a manner calculated to be understood by the Claimant, of its decision setting forth the specific reasons for the decision and containing specific references to the pertinent provisions of this Plan on which the decision is based.  If special circumstances require that the sixty (60) day time period be extended, the Committee will so notify the Claimant and will render the decision as soon as possible, but no later than one hundred twenty (120) days after receipt of the request for review.

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ARTICLE VIII

MISCELLANEOUS

8.1Unsecured General Creditor.

Participants and their Beneficiaries, heirs, successors, and assigns shall have no legal or equitable rights, claims, or interest in any specific property or assets of the Bank.  No assets of the Bank shall be held under any trust, or held in any way as collateral security for the fulfilling of the obligations of the Bank under this Plan, although the Bank may establish one or more grantor trusts subject to Code Section 671 to facilitate the payment of benefits hereunder.  Any and all of the Bank’s assets shall be, and remain, the general unpledged, unrestricted assets of the Bank.  The Bank’s obligation under the Plan shall be merely that of an unfunded and unsecured promise of the Bank to pay money in the future, and the rights of the Participants and Beneficiaries shall be no greater than those of unsecured general creditors.  It is the intention of the Bank that this Plan and any trust established to facilitate the payment of benefits hereunder be unfunded for purposes of the Code and for purposes of Title I of ERISA.

8.2Restriction Against Assignment.

The Bank shall pay all amounts payable hereunder only to the person or persons designated by the Plan and not to any other person or corporation.  No part of a Participant’s Account shall be liable for the debts, contracts, or engagements of any Participant, his or her Beneficiary, or successors in interest, nor shall a Participant’s Account be subject to execution by levy, attachment, or garnishment or by any other legal or equitable proceeding, nor shall any such person have any right to alienate, anticipate, sell, transfer, commute, pledge, encumber, or assign any benefits or payments hereunder in any manner whatsoever.  If any Participant, Beneficiary or successor in interest is adjudicated bankrupt or purports to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge any distribution or payment from the Plan, voluntarily or involuntarily, the Committee, in its discretion, may cancel such distribution or payment (or any part thereof) to or for the benefit of such Participant, Beneficiary or successor in interest in such manner as the Committee shall direct.

8.3Withholding.

There shall be deducted from each payment made under the Plan or any other compensation payable to the Participant (or Beneficiary) all taxes which are required to be withheld by the Bank in respect to such payment or this Plan.  The Bank shall have the right to reduce any payment (or other compensation) by the amount of cash sufficient to provide the amount of said taxes.

8.4Amendment, Modification, Suspension or Termination.

The Bank may amend, modify, suspend or terminate the Plan in whole or in part, except that no amendment, modification, suspension or termination shall have any retroactive effect to reduce any amounts allocated to a Participant’s Account.  In the event that this Plan is terminated, the distribution of the amounts credited to a Participant’s Deferral Account shall not be accelerated but shall be paid at such time and in such manner as determined under the terms of the Plan immediately prior to termination as if the Plan had not been terminated.  (Neither the

22

Policies themselves nor the death benefit described in Section 6.5 shall be treated as allocated to Accounts.)  Notwithstanding the foregoing, no amendment of the Plan shall apply to Grandfathered Amounts unless the amendment specifically provides that it applies to such amounts.

8.5Governing Law.

This Plan shall be construed, governed and administered in accordance with the laws of the State of California.

8.6Receipt or Release.

Any payment to a Participant or the Participant’s Beneficiary in accordance with the provisions of the Plan shall, to the extent thereof, be in full satisfaction of all claims against the Committee, and the Bank.  The Committee may require such Participant or Beneficiary, as a condition precedent to such payment, to execute a receipt and release to such effect within such time as may be specified by the Committee in accordance with applicable law, but in any event no later than 60 days after the first date on which such payment could otherwise be made pursuant to the terms of the Plan.

8.7Payments on Behalf of Persons Under Incapacity.

In the event that any amount becomes payable under the Plan to a person who, in the sole judgment of the Committee, is considered by reason of physical or mental condition to be unable to give a valid receipt therefor the Committee may direct that such payment be made to any person found by the Committee, in its sole judgment, to have assumed the care of such person.  Any payment made pursuant to such determination shall constitute a full release and discharge of the Committee and the Bank.

8.8Headings, etc. Not Part of Agreement.

Headings and subheadings in this Plan are inserted for convenience of reference only and are not to be considered in the construction of the provisions hereof.

8.9Section 409A of the Code.

(a) This Plan shall be interpreted in accordance with Section 409A of the Code and the Treasury Regulations and other Department of Treasury guidance issued thereunder. Notwithstanding any provision of the Plan to the contrary, in the event that the Committee determines that any payment or benefit under the Plan may be subject to Section 409A of the Code, the Committee may adopt such amendments to the Plan or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Committee determines are necessary or appropriate to comply with the requirements of Section 409A of the Code.

(b) Each payment or series of installments under this Plan for any particular Plan Year and Plan Year Subaccount shall be considered a single payment for purposes of Section 409A.

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(c) If, on the date of a Participant’s Separation from Service, (i) such Participant is a “specified employee” within the meaning of Section 409A of the Code, as determined annually by the Bank in accordance with Section 1.409A-1(i) of the Treasury Regulations (using the methodology for identifying Key Employees under Paragraph A.2 of Article VIII of the CNC Profit Sharing Plan, to the extent permitted by Section 409A of the Code), and (ii) the Committee shall make a good-faith determination that a payment or benefit under the Plan constitutes “deferred compensation” within the meaning of Section 409A of the Code the payment (or, in the case of an installment payment, the commencement) of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in order to preserve the tax treatment intended for such payment or to avoid additional tax, interest, or penalties under Section 409A of the Code, then the Bank shall not pay such amount or commence payment of such installments on the otherwise scheduled payment date, but shall instead pay such amount or commence payment of such installments within the calendar month following the last day of such six-month period and, in the case of an installment payment, shall delay each subsequent installment by six months from the date such installment would otherwise have been paid.  Such amount shall be paid without additional interest (other than any earnings or losses credited to the Participant’s Deferral Account pursuant to Section 4.1(d)), unless otherwise determined by the Committee, in its sole discretion, or as otherwise provided in any applicable agreement between the Bank and the Participant.

(d) A Participant shall be solely responsible and liable for the satisfaction of all taxes, interest, and penalties that may be imposed on such Participant or for such Participant’s account in connection with any payment or benefit under the Plan (including any taxes, interest, and penalties under Section 409A or any corresponding provision of state, local, or foreign law), and the Bank shall have no obligation to indemnify or otherwise hold such Participant harmless from any or all of such taxes, interest, or penalties.

(e) If any portion of a Participant’s Deferral Account is required to be included in income by the Participant prior to receipt due to a failure of this Plan to comply with the requirements of Section 409A of the Code, the Committee may determine that such Participant shall receive a distribution from the Plan in an amount equal to the lesser of (i) the portion of his or her Deferral Account required to be included in income as a result of the failure of the Plan to comply with the requirements of Section 409A of the Code or (ii) the unpaid vested portion of his or her Deferral Account, as permitted under Section 1.409A-3(j)(4)(vii) of the Treasury Regulations.

8.10Domestic Relations Orders.

If necessary to comply with a domestic relations order, as defined in Section 414(p)(1)(B) of the Code, the Committee shall have the right to make a distribution from the Participant’s Deferral Account to (or establish an account under the Plan for the benefit of) an individual other than the Participant and to accelerate the time of payment to the extent necessary to comply with the domestic relations order, as permitted under Section 409A of the Code and Section 1.409A-3(j)(4)(ii) of the Treasury Regulations.

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IN WITNESS WHEREOF, the Bank has caused its duly authorized officer to execute this document this     th day of December, 2008.

CITY NATIONAL BANK
By:
	Patti Fischer
Its:	Senior Vice President
	Human Resources

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EX-10.23

EXHIBIT 10.23

CITY NATIONAL CORPORATION

STRATEGY AND PLANNING COMMITTEE

CHANGE IN CONTROL SEVERANCE PLAN

Introduction

The Board of Directors of City National Corporation (the “Company”) recognizes that the possibility of a Change in Control of the Company, and the uncertainty it creates, may result in the loss or distraction of employees of the Company to the detriment of the Company and its stockholders.

The Board considers the avoidance of such loss and distraction to be essential to protecting and enhancing the best interests of the Company and its stockholders.  The Board also believes that when a Change in Control is perceived as imminent, or is occurring, the Board should be able to receive and rely on disinterested service from employees regarding the best interests of the Company and its stockholders without concern that employees might be distracted or concerned by the personal uncertainties and risks created by the perception of an imminent or occurring Change in Control.

In addition, the Board believes that it is consistent with the Company’s employment practices and policies and in the best interests of the Company and its stockholders to treat fairly its employees whose employment terminates in connection with or following a Change in Control.

Accordingly, the Board has determined that appropriate steps should be taken to assure the Company of the continued employment and attention and dedication to duty of its employees and to seek to ensure the availability of their continued service, notwithstanding the possibility or occurrence of a Change in Control.

Therefore, in order to fulfill the above purposes, the following plan has been developed and is hereby adopted.

1.Establishment of Plan.  As of the Effective Date, the Company hereby establishes the City National Corporation Strategy and Planning Committee Change in Control Severance Plan, as set forth in this document.

2.Definitions.  As used herein, the following words and phrases shall have the following respective meanings:

(a)Affiliated Company.  Any company controlled by, controlling or under common control with the Company.

(b)Annual Base Salary.  12 times the highest monthly base salary paid or payable, including any base salary that has been earned but deferred, to the Participant by the Company and the Affiliated Companies in respect of the one-year period immediately preceding the month in which the Change in Control occurs.

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(c)Board.  The Board of Directors of the Company.

(d)Cause.  “Cause” means (i) the willful and continued failure of the Participant to perform substantially the Participant’s duties with the Company or any Affiliated Company (other than any such failure resulting from incapacity due to physical or mental illness or following the Participant’s delivery of a Notice of Termination for Good Reason), after a written demand for substantial performance is delivered to the Participant by the Board or the Chief Executive Officer of the Company that specifically identifies the manner in which the Board or the Chief Executive Officer of the Company believes that the Participant has not substantially performed the Participant’s duties, or (ii) the willful engaging by the Participant in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company.  No act, or failure to act, on the part of the Participant shall be considered “willful” unless it is done, or omitted to be done, by the Participant in bad faith or without reasonable belief that the Participant’s action or omission was in the best interests of the Company.  Any act, or failure to act, based upon (A) authority given pursuant to a resolution duly adopted by the Board, or if the Company is not the ultimate parent corporation of the Affiliated Companies and is not publicly-traded, the board of directors of the ultimate parent of the Company (the “Applicable Board”), (B) the instructions of the Chief Executive Officer of the Company or a senior officer of the Company or (C) the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Participant in good faith and in the best interests of the Company.  The cessation of employment of the Participant shall not be deemed to be for Cause unless and until there shall have been delivered to the Participant a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Applicable Board (excluding the Participant, if the Participant is a member of the Applicable Board) at a meeting of the Applicable Board called and held for such purpose (after reasonable notice is provided to the Participant and the Participant is given an opportunity, together with counsel for the Participant, to be heard before the Applicable Board), finding that, in the good faith opinion of the Applicable Board, the Participant is guilty of the conduct described in this definition, and specifying the particulars thereof in detail.

(e)Change in Control.  A “Change in Control” means the first to occur of the following:

(i)The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14 (d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (A) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this sub-section (i), the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company; (B) any acquisition by the Company; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, (D) any acquisition by any corporation pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) of this section 2(e) or (E) any acquisition by the Goldsmith family or any trust or partnership for the benefit of any member of the Goldsmith family; or

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(ii)Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or contest by or on behalf of a Person other than the Board; or

(iii)Consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving the Company or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company (or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries (each, a “Business Combination”), in each case, unless, following such Business Combination (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors (or, for a non-corporate entity, equivalent governing body), as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that, which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding (x) any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination or (y) the Goldsmith family or any trust or partnership for the benefit of any member of the Goldsmith family) beneficially owns, directly or indirectly, 30% or more of, respectively, the then outstanding shares of common stock of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such entity except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the board of directors (or, for a non-corporate entity, equivalent governing body) of the Company resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(iv)Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

(f)Code.  The Internal Revenue Code of 1986, as amended from time to time.

(g)Committee.  Subject to Section 13, the Compensation, Nominating and Governance Committee of the Board, or its duly authorized designee.

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(h)Company.  City National Corporation, an Affiliated Company, and any successor(s) thereto or, if applicable, the ultimate parent of any such successor.

(i)Date of Termination.  The date of receipt of a Notice of Termination from the Company or the Participant, as applicable, or any later date specified in the Notice of Termination, which date shall not be more than 30 days after the giving of such notice.  The Company and the Participant shall take all steps necessary (including with regard to any post-termination services by the Participant) to ensure that any termination under this Plan constitutes a “separation from service” within the meaning of Section 409A of the Code, and notwithstanding anything contained herein to the contrary, the date on which such separation from service takes place shall be the “Date of Termination.”  If the Participant’s employment is terminated by reason of death, the Date of Termination shall be the date of death of the Participant.  If the Participant’s employment is terminated by reason of  Disability, the Date of Termination shall be the date of the Company determination as provided in Section 2.(j), below.

(j)Disability.  A termination for “Disability” shall have occurred if the Company determines in good faith that the Participant has been absent from his or her duties with the Company on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness that is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive’s legal representative (such agreement as to acceptability not to be unreasonably withheld).

(k)Effective Date.  December 31, 2008.

(l)Highest Annual Bonus.  The greater of (i) the Recent Annual Bonus and (ii) the annual bonus paid or payable, including any bonus or portion thereof that has been earned but deferred (and annualized for any fiscal year consisting of less than 12 full months or during which the Participant was employed for less than 12 full months), for the most recently completed fiscal year following the Change in Control, if any.

(m)Good Reason.  “Good Reason” means actions taken by the Company that result in a material negative change in the employment relationship.  For these purposes, a “material negative change in the employment relationship” shall include, without limitation:

(i)the assignment to the Participant of duties materially inconsistent with the Participant’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as in effect prior to the Change in Control, or a material diminution in such position, authority, duties or responsibilities or a material diminution in the budget over which the Participant retains authority;

(ii)a material diminution in the authorities, duties or responsibilities of the person to whom the Participant is required to report;

(iii)a reduction of ten (10) percent or greater of (A) the Participant’s Annual Base Salary, the Participant’s annual bonus or the Participant’s annual long-term incentive compensation, in each case, as in effect immediately prior to the Change in Control; (B) the other compensation and benefits, in the aggregate, provided to the Participant immediately prior to the Change in Control;

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(iv)the Company’s requiring the Participant (A) to be based at any office or location resulting in a material increase in the Participant’s commute to and from the Participant’s primary residence (for this purpose an increase in the Participant’s commute by 30 miles or more than required immediately prior to the Change in Control shall be deemed material) or (B) to be based at a location other than the principal executive offices of the Company if the Participant was employed at such location immediately preceding the Change in Control; or

(v)any other action or inaction that constitutes a material breach by the Company of this Plan, including the Company’s failure to require any successor to the Company to comply with the Plan.

In order to invoke a termination for Good Reason, the Participant shall provide written notice to the Company of the existence of one or more of the conditions described in clauses (i) through (v) within 90 days following the Participant’s knowledge of the initial existence of such condition or conditions, specifying in reasonable detail the conditions constituting Good Reason, and the Company shall have 30 days following receipt of such written notice (the “Cure Period”) during which it may remedy the condition.  In the event that the Company fails to remedy the condition constituting Good Reason during the applicable Cure Period, the Participant’s “separation from service” (within the meaning of Section 409A of the Code) must occur, if at all, within one year following the Change in Control in order for such termination as a result of such condition to constitute a termination for Good Reason.  The Participant’s mental or physical incapacity following the occurrence of an event described above in clauses (i) through (v) shall not affect the Participant’s ability to terminate employment for Good Reason and the Participant’s death following delivery of a Notice of Termination for Good Reason shall not affect the Participant’s estate’s entitlement to severance payments benefits provided hereunder upon a termination of employment for Good Reason.  A Participant’s failure to assert any right the Participant may have to terminate employment for Good Reason shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.  Anything in this Plan to the contrary notwithstanding, a termination by the Participant for any reason pursuant to a Notice of Termination given during the 30-day period immediately preceding the first anniversary of the Change in Control shall be deemed to be a termination for Good Reason for all purposes of this Plan and the foregoing notice and cure provisions shall not be applicable.

(n)Notice of Termination.  A written notice that (i) indicates the specific termination provision in this Plan relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Participant’s employment under the provision so indicated and (iii) if the Date of Termination (as defined herein) is other than the date of receipt of such notice, specifies the Date of Termination (which Date of Termination shall be not more than 30 days after the giving of such notice).  The failure by the Participant or the Company to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause shall not waive any right of the Participant or the Company, respectively, hereunder or preclude the Participant or the Company, respectively, from asserting such fact or circumstance in enforcing the Participant’s or the Company’s respective rights hereunder.

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(o)Participant.  A member of City National’s Strategy and Planning Committee, who meets the eligibility requirements set forth in Section 3 hereof.

(p)Plan.  This City National Corporation Strategy and Planning Committee Change in Control Severance Plan.

(q)Qualified Termination.  Any termination of a Participant’s employment, during the one-year period beginning on the date of a Change in Control, by the Participant for Good Reason or by the Company other than for Cause, death or Disability.  Notwithstanding the foregoing, if a Change in Control occurs and if the Participant’s employment with the Company is terminated prior to the date on which the Change in Control occurs, and if it is reasonably demonstrated by the Participant that such termination of employment (i) was at the request of a third party that has taken steps reasonably calculated to effect a Change in Control or (ii) otherwise arose in connection with or anticipation of a Change in Control, then a “Qualifying Termination” shall be deemed to have occurred on the Change in Control.

(r)Recent Annual Bonus.  The Participant’s highest bonus earned under the Company’s annual incentive plans for the last three full fiscal years prior to the Change in Control (or for such lesser number of full fiscal years prior to the Change in Control for which the Participant was eligible to earn such a bonus, and annualized in the case of any pro rata bonus earned for a partial fiscal year).  If the Participant has not been eligible to earn such a bonus for any fiscal year prior to the Change in Control, the “Recent Annual Bonus” shall mean the Participant’s target annual performance bonus for the year during which the Change in Control occurs.

3.Eligibility.  An employee shall be a Participant in the Plan if the employee (a) is a member of City National’s Strategy and Planning Committee as of immediately prior to a Change in Control; (b) is not party to a Change in Control Employment Agreement with the Company as of immediately prior to a Change in Control; (c) is not a participant in another Change in Control severance plan as of immediately prior to the Change in Control; and (d) does not have a separate written agreement with the Company providing that he or she will not be eligible to receive payments and/or benefits due to a Change in Control.

4.Separation Benefits.

(a)Qualified Termination.  In the event that a Participant suffers a Qualified Termination,

(i)the Company shall pay to the Participant, in a lump sum in cash within 30 days after the Date of Termination, the aggregate of the following amounts:

(A)the sum of (1) the Participant’s Annual Base Salary through the Date of Termination to the extent not theretofore paid, (2) the Participant’s business expenses that have not been reimbursed by the Company as of the Date of Termination; (3) the Participant’s annual bonus for the fiscal year immediately preceding the fiscal year in which the Date of Termination occurs, if such bonus has not been paid as of the Date of Termination; (4) any accrued vacation pay to the extent not theretofore paid (the sum of the amounts described in subclauses (1), (2), (3) and (4), the “Accrued Obligations”) and (5) an amount equal to the product

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of (x) the Highest Annual Bonus and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination and the denominator of which is 365 (the “Pro Rata Bonus”); provided, that notwithstanding the foregoing, if the Participant has made an irrevocable election under any deferred compensation arrangement subject to Section 409A of the Code to defer any portion of the Annual Base Salary or annual bonus described in clause (1) or (3) above, then for all purposes of this Section 4, such deferral election, and the terms of the applicable arrangement shall apply to the same portion of the amount described in such clauses (1) or (3), and such portion shall not be considered as part of the “Accrued Obligations” but shall instead be an “Other Benefit” (as defined below); and

(B)the amount equal to three  times the sum of (x) the Participant’s Annual Base Salary and (y) the Highest Annual Bonus; and

(C)an amount equal to the contributions to the Participant’s account in the Company’s Profit Sharing Plan which the Participant would receive if the Participant’s employment continued for three years after the Date of Termination assuming for this purpose that all such contributions are fully vested, and, assuming that the Company’s contribution to the Profit Sharing Plan in each such year is in an amount equal to the greatest amount contributed by the Company in any of the three years ending prior to the Effective Date.

(ii)Welfare Benefits.  For three years following the Date of Termination, or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy, (the “Benefits Period”), the Company shall provide the Participant and his eligible dependents with medical, prescription, vision and dental insurance coverage (the “Health Care Benefits”) and life insurance and disability benefits no less favorable to those which the Participant and his spouse and eligible dependents were receiving immediately prior to the Date of Termination or, if more favorable to such persons, as in effect generally at any time thereafter with respect to other peer executives of the Company and the Affiliated Companies; provided, however, that the Health Care Benefits shall be provided during the Benefits Period in such a manner that such benefits are excluded from the Participant’s income for federal income tax purposes; provided, further, however, that if the Participant becomes re-employed with another employer and is eligible to receive health care benefits under another employer-provided plan, the health care benefits provided hereunder shall be secondary to those provided under such other plan during such applicable period of eligibility.  The Company shall use its reasonable best efforts to ensure that, following the end of the Benefits Period, the Participant and the Participant’s spouse and eligible dependents shall be eligible to elect continued health coverage pursuant to Section 4980B of the Code or other applicable law (“COBRA Coverage”), as if the Participant’s employment with the Company had terminated as of the end of such period.  For purposes of determining eligibility (but not the time of commencement of benefits) of the Participant for retiree welfare benefits pursuant to the Company’s retiree welfare benefit plans, if any, the Participant shall be considered to have remained employed until the end of the Benefits Period and to have retired on the last day of such period.

(iii)  Outplacement Services.  The Company shall, at its sole expense as incurred, provide the Participant with outplacement services the scope and provider of which shall be selected by the Participant in the Participant’s sole discretion, provided that such outplacement

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benefits shall end not later than the last day of the second calendar year that begins after the Date of Termination.

(b)Death.  If the Participant’s employment is terminated by reason of the Participant’s death during the one-year period beginning on the date of a Change in Control, the Company shall provide the Participant’s estate or beneficiaries with the Accrued Obligations (subject to the proviso set forth in Section 4(a)(i)(A) to the extent applicable) and the Pro Rata Bonus and the timely payment or delivery of the Other Benefits (subject to the proviso set forth in Section 4(a)(i)(A) to the extent applicable), and shall have no other severance obligations under this Plan.  The Accrued Obligations and the Pro Rata Bonus shall be paid to the Participant’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days after the Date of Termination.  With respect to the provision of the Other Benefits, the term “Other Benefits” as utilized in this Section 4(b) shall include, without limitation, and the Participant’s estate and/or beneficiaries shall be entitled to receive, benefits at least equal to the most favorable benefits provided by the Company and the Affiliated Companies to the estates and beneficiaries of peer executives of the Company and the Affiliated Companies under such plans, programs, practices and policies relating to death benefits, if any, as in effect with respect to other peer executives and their beneficiaries at any time during the 120-day period immediately preceding the Change in Control or, if more favorable to the Participant’s estate and/or the Participant’s beneficiaries, as in effect on the date of the Participant’s death with respect to other peer executives of the Company and the Affiliated Companies and their beneficiaries.

(c)Disability.  If the Participant’s employment is terminated by reason of the Participant’s Disability during the one-year period beginning on a Change in Control, the Company shall provide the Participant with the Accrued Obligations and Pro Rata Bonus and the timely payment or delivery of the Other Benefits (subject to the proviso set forth in Section 4(a)(1)(A) to the extent applicable) in accordance with the terms of the underlying plans or agreements, and shall have no other severance obligations under this Plan.  The Accrued Obligations (subject to the proviso set forth in Section 4(a)(i)(A) to the extent applicable) and the Pro Rata Bonus shall be paid to the Participant in a lump sum in cash within 30 days of the Date of Termination.  With respect to the provision of the Other Benefits, the term “Other Benefits” as utilized in this Section 4(c) shall include, and the Participant shall be entitled after the Disability Effective Date to receive, disability and other benefits at least equal to the most favorable of those generally provided by the Company and the Affiliated Companies to disabled executives and/or their families in accordance with such plans, programs, practices and policies relating to disability, if any, as in effect generally with respect to other peer executives and their families at any time during the 120-day period immediately preceding the Change in Control or, if more favorable to the Participant and/or the Participant’s family, as in effect at any time thereafter generally with respect to other peer executives of the Company and the Affiliated Companies and their families.

(d)Cause; Other Than for Good Reason.  If the Participant’s employment is terminated for Cause during the one-year period beginning upon the occurrence of a Change in Control, the Company shall provide the Participant with the Participant’s Annual Base Salary through the Date of Termination, and the timely payment or delivery of the Other Benefits (disregarding the proviso set forth in Section 4(a)(i)(A) to the extent applicable), and shall have no other severance obligations under this Plan.  If the Participant voluntarily terminates

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employment during the one-year period following a Change in Control, excluding a termination for Good Reason, the Company shall provide to the Participant the Accrued Obligations and the Pro Rata Bonus and the timely payment or delivery of the Other Benefits, subject to the proviso set forth in Section 4(a)(i)(A) to the extent applicable, and shall have no other severance obligations under this Plan.  In such case, all the Accrued Obligations and the Pro Rata Bonus shall be paid to the Participant in a lump sum in cash within 30 days of the Date of Termination.

5.Certain Additional Payments by the Company.

(a)Anything in this Plan to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any Payment would be subject to the Excise Tax, then the applicable Participant shall be entitled to receive an additional payment (the “Gross-Up Payment”) in an amount such that, after payment by the Participant of all taxes (and any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, but excluding any income taxes and penalties imposed pursuant to Section 409A of the Code, the Participant retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.  Notwithstanding the foregoing provisions of this Section 5(a), if it shall be determined that the Participant is entitled to the Gross-Up Payment, but that the Parachute Value of all Payments does not exceed 110% of the Safe Harbor Amount, then no Gross-Up Payment shall be made to the Participant and the amounts payable under this Plan shall be reduced so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount.  The reduction of the amounts payable hereunder, if applicable, shall be made by reducing the payments and benefits under the following sections in the following order: (i) Section 4(a)(i)(B), (ii) Section 4(a)(ii), (iii) Section 4(a)(i)(A)(5) and (iv) Section 4(a)(iii).  For purposes of reducing the Payments to the Safe Harbor Amount, only amounts payable under this Plan (and no other Payments) shall be reduced.  If the reduction of the amount payable under this Plan would not result in a reduction of the Parachute Value of all Payments to the Safe Harbor Amount, no amounts payable under the Plan shall be reduced pursuant to this Section 5(a) and the Participant shall be entitled to the Gross-Up Payment.  The Company’s obligation to make Gross-Up Payments under this Section 5 shall not be conditioned upon a Participant’s termination of employment.

(b)Subject to the provisions of Section 5(c), all determinations required to be made under this Section 5, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by Ernst & Young LLP or such other nationally recognized certified public accounting firm as may be designated by the affected Participant (the “Accounting Firm”).  The Accounting Firm shall provide detailed supporting calculations both to the Company and the Participant within 15 business days of the receipt of notice from the Participant that there has been a Payment or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Participant may appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder).  All fees and expenses of the Accounting Firm shall be borne solely by the Company.  Any determination by the Accounting Firm shall be binding upon the Company and the Participant.  As a result of the uncertainty in

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the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments that will not have been made by the Company should have been made (the “Underpayment”), consistent with the calculations required to be made hereunder.  In the event the Company exhausts its remedies pursuant to Section 5(c) and the Participant thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Under-payment shall be promptly paid by the Company to or for the benefit of the Participant.

(c)The Participant shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment.  Such notification shall be given as soon as practicable, but no later than 10 business days after the Participant is informed in writing of such claim.  The Participant shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid.  The Participant shall not pay such claim prior to the expiration of the 30-day period following the date on which the Participant gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due).  If the Company notifies the Participant in writing prior to the expiration of such period that the Company desires to contest such claim, the Participant shall:

(i)give the Company any information reasonably requested by the Company relating to such claim,

(ii)take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company,

(iii)cooperate with the Company in good faith in order effectively to contest such claim, and

(iv)permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest, and shall indemnify and hold the Participant harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties) imposed as a result of such representation and payment of costs and expenses.  Without limitation on the foregoing provisions of this Section 5(c), the Company shall control all proceedings taken in connection with such contest, and, at its sole discretion, may pursue or forgo any and all administrative appeals, proceedings,hearings and conferences with the applicable taxing authority in respect of such claim and may, at its sole discretion, either pay the tax claimed to the appropriate taxing authority on behalf of the Participant and direct the Participant to sue for a refund or to contest the claim in any permissible manner, and the Participant agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that, if the Company pays such claim and directs

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the Participant to sue for a refund, the Company shall indemnify and hold the Participant harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties) imposed with respect to such payment or with respect to any imputed income in connection with such payment; and provided, further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Participant with respect to which such contested amount is claimed to be due is limited solely to such contested amount.  Furthermore, the Company’s control of the contest shall be limited to issues with respect to which the Gross-Up Payment would be payable hereunder, and the Participant shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d)If, after the receipt by the Participant of a Gross-Up Payment or payment by the Company of an amount on the Participant’s behalf pursuant to Section 5(c), the Participant becomes entitled to receive any refund with respect to the Excise Tax to which such Gross-Up Payment relates or with respect to such claim, the Participant shall (subject to the Company’s complying with the requirements of Section 5(c), if applicable) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto).  If, after payment by the Company of an amount on the Participant’s behalf pursuant to Section 5(c), a determination is made that the Participant shall not be entitled to any refund with respect to such claim and the Company does not notify the Participant in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then the amount of such payment shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

(e)Any Gross-Up Payment, as determined pursuant to this Section 5, shall be paid by the Company to the Participant within five days of the receipt of the Accounting Firm’s determination; provided that, the Gross-Up Payment shall in all events be paid no later than the end of the Participant’s taxable year next following the Participant’s taxable year in which the Excise Tax (and any income or other related taxes or interest or penalties thereon) on a Payment are remitted to the Internal Revenue Service or any other applicable taxing authority or, in the case of amounts relating to a claim described in Section 5(c) that does not result in the remittance of any federal, state, local and foreign income, excise, social security and other taxes, the calendar year in which the claim is finally settled or otherwise resolved.  Notwithstanding any other provision of this Section 5, the Company may, in its sole discretion, withhold and pay over to the Internal Revenue Service or any other applicable taxing authority, for the benefit of the Participant, all or any portion of any Gross-Up Payment, and the Participant hereby consents to such withholding.

(f)Definitions.  The following terms shall have the following meanings for purposes of this Section 5.

(i)“Excise Tax” shall mean the excise tax imposed by Section 4999 of the Code, together with any interest or penalties imposed with respect to such excise tax.

(ii)“Parachute Value” of a Payment shall mean the present value as of the date of the change of control for purposes of Section 280G of the Code of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2), as determined by the

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Accounting Firm for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.

(iii)A “Payment” shall mean any payment or distribution in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of the Participant, whether paid or payable pursuant to this Plan or otherwise.

(iv)The “Safe Harbor Amount” means 2.99 times the Participant’s “base amount,” within the meaning of Section 280G(b)(3) of the Code.

6.Full Settlement.  The Company’s obligation to make the payments provided for in this Plan and otherwise to perform its obligations hereunder shall be absolute and unconditional and shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against a Participant or others.  In no event shall a Participant be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to such Participant under any of the provisions of this Plan and no amounts received from other employment shall serve to mitigate the payments hereunder.  The Company agrees to pay as incurred (within 10 days following the Company’s receipt of an invoice from the Participant), to the full extent permitted by law, for all legal fees and expenses that the Participant may reasonably incur as a result of any contest by the Company, the Participant or others of the validity or enforceability of, or liability under, any provision of this Plan or any guarantee of performance thereof (including as a result of any contest by the Participant about the amount of any payment pursuant to this Plan) (each, a “Contest”), plus, in each case, interest.  In order to comply with Section 409A of the Code, in no event shall the payments by the Company under this Section 6 be made later than the end of the calendar year next following the calendar year in which such fees and expenses were incurred, provided, that the Participant shall have submitted an invoice for such fees and expenses at least 10 days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred.  The amount of such legal fees and expenses that the Company is obligated to pay in any given calendar year shall not affect the legal fees and expenses that the Company is obligated to pay in any other calendar year, and the Participant’s right to have the Company pay such legal fees and expenses may not be liquidated or exchanged for any other benefit.  Nothing in this Plan shall prevent or limit a Participant’s continuing or future participation in any plan, program, policy or practice provided by the Company or the Affiliated Companies and for which the Participant may qualify, nor shall anything herein limit or otherwise affect such rights as a Participant may have under any other contract or agreement with the Company or any of the Affiliated Companies.  Amounts that are vested benefits or that a Participant and/or a Participant’s dependents are otherwise entitled to receive under any plan, policy, practice, program, agreement or arrangement of the Company or any of the Affiliated Companies (“Other Benefits”) shall be payable in accordance with such plan, policy, practice, program, agreement or arrangement.  Without limiting the generality of the foregoing, the Participant’s resignation under this Plan with or without Good Reason, shall in no way affect the Participant’s ability to terminate employment by reason of the Participant’s “retirement” under, or to be eligible to receive benefits under, any compensation and benefits plans, programs or arrangements of the Company or the Affiliated Companies, including without limitation any retirement or pension plans or arrangements or substitute plans adopted by the Company, the Affiliated Companies or their respective successors, and any termination which otherwise qualifies as Good Reason shall

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be treated as such even if it is also a “retirement” for purposes of any such plan.  The payments provided pursuant to Section 4 shall be provided in addition to, and not in lieu of, all other accrued or vested or earned but deferred compensation, retention bonuses, rights, options or other benefits which may be owed to a Participant upon or following termination, including but not limited to accrued paid time off, amounts or benefits payable under any bonus or other compensation plans, stock option plan, stock ownership plan, stock purchase plan, life insurance plan, health plan, disability plan or similar or successor plan.  Notwithstanding the foregoing, if the Participant receives payments and benefits pursuant to Section 4(a) of this Plan, the Participant shall not be entitled to any severance pay or benefits under any severance plan, program or policy of the Company and the Affiliated Companies, unless otherwise specifically provided therein in a specific reference to this Plan.

7.Controlling Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws.

8.Amendments; Termination.  The Company reserves the right to amend, modify, suspend or terminate the Plan hereunder at any time by action of a majority of the Committee; provided that no such amendment, modification, suspension or termination that has the effect of reducing or diminishing the rights of any Participant shall be effective until the applicable Cutback Effective Date (as defined in the next sentence), except modifications to comply with legal requirements, including, without limitation Section 409A of the Internal Revenue Code.  Initially, the Cutback Effective Date shall be December 31, 2010; provided that commencing on December 31, 2009, and on each annual anniversary thereof (each of December 31, 2009 and each annual anniversary thereof shall be hereinafter referred to as the “Renewal Date”), the Cutback Effective Date shall be extended until the second anniversary of such Renewal Date, unless at least 60 days prior to such Renewal Date, the Company shall have given notice to the Participants that the Cutback Effective Date will not be so renewed.

9.Assignment.  The Company shall require any corporation, entity, individual or other person who is the successor (whether direct or indirect by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all the business and/or assets of the Company to expressly assume and agree to perform, by a written agreement in form and in substance satisfactory to the Company, all of the obligations of the Company under this Plan.  As used in this Plan, the term “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Plan by operation of law, written agreement or otherwise.  It is a condition of this Plan, and all rights of each person eligible to receive benefits under this Plan shall be subject hereto, that no right or interest of any such person in this Plan shall be assignable or transferable in whole or in part, except by operation of law, including, but not by way of limitation, lawful execution, levy, garnishment, attachment, pledge, bankruptcy, alimony, child support or qualified domestic relations order.

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10.Withholding.  The Company may withhold from any amount payable or benefit provided under this Plan such Federal, state, local, foreign and other taxes as are required to be withheld pursuant to any applicable law or regulation.

11.Gender and Plurals.  Wherever used in this Plan document, words in the masculine gender shall include masculine or feminine gender, and, unless the context otherwise requires, words in the singular shall include the plural, and words in the plural shall include the singular.

12.Plan Controls.  In the event of any inconsistency between this Plan document and any other communication regarding this Plan, this Plan document controls.

13.Post-Change in Control Committee.  This Plan shall be administered by the Committee, provided that in the event of an impending Change in Control, the Committee may appoint a person (or persons) independent of the third party effectuating the Change in Control to be the Committee effective upon the occurrence of a Change in Control (the “Independent Committee”) and the Independent Committee shall not be removed or modified following a Change in Control.

14.Benefits Claims and Appeals.  The Plan is not intended to be subject to ERISA. If, and only if, however, the Plan is determined to be subject to ERISA, the intention of the Company is that it shall be construed as a “welfare plan,” as defined in Section 3(1) of ERISA, and this Section 14 shall apply.  The Committee shall establish a claims and appeals procedure applicable to Participants under the Plan.  Unless otherwise required by applicable law, such procedures will provide that a Participant has not less than 60 days following receipt of any adverse benefit determination within which to appeal the determination in writing with the Committee, and that the Committee must respond in writing within 60 days of receiving the appeal, specifically identifying those Plan provisions on which the benefit denial was based and indicating what, if any, information the Participant must supply in order to perfect a claim for benefits.  Notwithstanding the foregoing, the claims and appeals procedure established by the Committee will be provided for the use and benefit of Participants who may choose to avail themselves of such procedures, but compliance with the provisions of these claims and appeals procedures by the Participant will not be mandatory for any Participant claiming benefits after a Change in Control.  It will not be necessary for any Participant to exhaust these procedures and remedies after a Change in Control prior to bringing any legal claim or action, or asserting any other demand, for payments or other benefits to which such Participant claims entitlement.

15.Grantor Trust.  The Committee may establish a trust with a bank trustee, for the purpose of paying benefits under this Plan.  If so established, the trust shall be a grantor trust subject to the claims of the Company’s creditors and shall, immediately prior to a Change in Control, be funded in cash or common stock of the Company or such other assets as the Committee deems appropriate with an amount equal to 100 percent of the aggregate benefits payable under this Plan assuming that all Participants in the Plan incurred a termination of employment entitling them to the benefits under Section 4 and, if applicable, Section 5, or such lesser amount as the Committee shall determine prior to the Change in Control; provided, however, that the trust shall not be funded with respect to a Participant if the funding thereof would result in taxable income to the Participant by reason of Section 409A(b) of the Code; and

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provided, further, that in no event shall any trust assets at any time be located or transferred outside of the United States, within the meaning of Section 409A(b) of the Code.  Notwithstanding the establishment of any such trust, a Participant’s rights hereunder will be solely those of a general unsecured creditor.

16.Indemnification.  To the extent permitted by law, the Company shall indemnify the Committee from all claims for liability, loss, or damage (including the payment of expenses in connection with defense against such claims) arising from any act or failure to act in connection with the Plan.

17.Section 409A of the Code.  The Plan is intended to comply with the requirements of Section 409A of the Code or an exemption or exclusion therefrom and, with respect to amounts that are subject to Section 409A of the Code, shall in all respects be administered in accordance with Section 409A of the Code.  Each payment under this Plan shall be treated as a separate payment for purposes of Section 409A of the Code.  In no event may a Participant, directly or indirectly, designate the calendar year of any payment to be made under this Plan.  If a Participant dies following the Date of Termination and prior to the payment of the any amounts delayed on account of Section 409A of the Code, such amounts shall be paid to the personal representative of the Participant’s estate within 30 days after the date of the Participant’s death.  All reimbursements and in-kind benefits provided under this Plan that constitute deferred compensation within the meaning of Section 409A of the Code shall be made or provided in accordance with the requirements of Section 409A of the Code, including, without limitation, that (i) in no event shall reimbursements by the Company under this Plan be made later than the end of the calendar year next following the calendar year in which the applicable fees and expenses were incurred, provided, that the Participant shall have submitted an invoice for such fees and expenses at least 10 days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred; (ii) the amount of in-kind benefits that the Company is obligated to pay or provide in any given calendar year shall not affect the in-kind benefits that the Company is obligated to pay or provide in any other calendar year; (iii) the Participant’s right to have the Company pay or provide such reimbursements and in-kind benefits may not be liquidated or exchanged for any other benefit; and (iv) in no event shall the Company’s obligations to make such reimbursements or to provide such in-kind benefits apply later than the Participant’s remaining lifetime (or if longer, through the 20th anniversary of the Change in Control).

18.The Participant and the Company acknowledge that, except as may otherwise be provided herein or under any other written agreement between the Participant and the Company, the employment of the Participant by the Company is “at will” and prior to a Change in Control, the Participant’s employment may be terminated by either the Participant or the Company at any time, in which case the Participant shall have no further rights under this Plan.

19.Notices.  (a) Any notice required to be delivered to the Company by a Participant hereunder shall be properly delivered to the Company when personally delivered to, or actually received through the U.S. mail by:

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City National

Attn.: HR Director

555 S. Flower Street, 18th Floor

Los Angeles, California 90071

(b)  Any notice required to be delivered to the Participant by the Company hereunder shall be properly delivered to the Participant when the Company delivers such notice personally or by placing said notice in the U.S. mail to that person’s last known address as reflected on the books and records of the Company.

20.The invalidity or unenforceability of any provision of this Plan shall not affect the validity or enforceability of any other provision of this Plan.

21.Compliance With Section 111 of EESA. Solely to the extent, and for the period, required by the provisions of Section 111 of the Emergency Economic Stabilization Act of 2008 (“EESA”) applicable to participants in the Capital Purchase Program under EESA and the regulation issued by the Department of the Treasury as published in the Federal Register on October 20, 2008: (a) each “Senior Executive Officer” within the meaning of Section 111 of EESA and the regulation issued by the Department of the Treasury as published in the Federal Register on October 20, 2008 who participates in this Plan or is a party to any agreement which includes benefits under this Plan shall be ineligible to receive compensation hereunder to the extent that the Compensation, Nominating & Governance Committee of the Board of Directors of the Company determines this Plan includes incentives for the Senior Executive Officer to take unnecessary and excessive risks that threaten the value of City National Corporation or City National Bank; (b) each Senior Executive Officer who participates in this Plan shall be required to forfeit any bonus or incentive compensation paid to the Senior Executive Officer hereunder during the period that the Department of the Treasury holds a debt or equity position in the Company based on statements of earnings, gains, or other criteria that are later proven to be materially inaccurate; and (c) the Company shall be prohibited from making to each Senior Executive Officer who participates in this Plan, and each such Senior Executive Officer shall be ineligible to receive hereunder, any “golden parachute payment” in connection with the Senior Executive Officer’s “applicable severance from employment,” in each case, within the meaning of Section 111 of EESA and the regulation issued by the Department of the Treasury as published in the Federal Register on October 20, 2008.

*    *    *

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EX-10.24

EXHIBIT 10.24

CITY NATIONAL CORPORATION

EXECUTIVE COMMITTEE

CHANGE IN CONTROL SEVERANCE PLAN

Introduction

The Board of Directors of City National Corporation (the “Company”) recognizes that the possibility of a Change in Control of the Company, and the uncertainty it creates, may result in the loss or distraction of employees of the Company to the detriment of the Company and its stockholders.

The Board considers the avoidance of such loss and distraction to be essential to protecting and enhancing the best interests of the Company and its stockholders.  The Board also believes that when a Change in Control is perceived as imminent, or is occurring, the Board should be able to receive and rely on disinterested service from employees regarding the best interests of the Company and its stockholders without concern that employees might be distracted or concerned by the personal uncertainties and risks created by the perception of an imminent or occurring Change in Control.

In addition, the Board believes that it is consistent with the Company’s employment practices and policies and in the best interests of the Company and its stockholders to treat fairly its employees whose employment terminates in connection with or following a Change in Control.

Accordingly, the Board has determined that appropriate steps should be taken to assure the Company of the continued employment and attention and dedication to duty of its employees and to seek to ensure the availability of their continued service, notwithstanding the possibility or occurrence of a Change in Control.

Therefore, in order to fulfill the above purposes, the following plan has been developed and is hereby adopted.

1.Establishment of Plan.  As of the Effective Date, the Company hereby establishes the City National Corporation Executive Committee Change in Control Severance Plan, as set forth in this document.

2.Definitions.  As used herein, the following words and phrases shall have the following respective meanings:

(a)Affiliated Company.  Any company controlled by, controlling or under common control with the Company.

(b)Annual Base Salary.  12 times the highest monthly base salary paid or payable, including any base salary that has been earned but deferred, to the Participant by the Company and the Affiliated Companies in respect of the one-year period immediately preceding the month in which the Change in Control occurs.

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(c)Board.  The Board of Directors of the Company.

(d)Cause.  “Cause” means (i) the willful and continued failure of the Participant to perform substantially the Participant’s duties with the Company or any Affiliated Company (other than any such failure resulting from incapacity due to physical or mental illness or following the Participant’s delivery of a Notice of Termination for Good Reason), after a written demand for substantial performance is delivered to the Participant by the Board or the Chief Executive Officer of the Company that specifically identifies the manner in which the Board or the Chief Executive Officer of the Company believes that the Participant has not substantially performed the Participant’s duties, or (ii) the willful engaging by the Participant in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company.  No act, or failure to act, on the part of the Participant shall be considered “willful” unless it is done, or omitted to be done, by the Participant in bad faith or without reasonable belief that the Participant’s action or omission was in the best interests of the Company.  Any act, or failure to act, based upon (A) authority given pursuant to a resolution duly adopted by the Board, or if the Company is not the ultimate parent corporation of the Affiliated Companies and is not publicly-traded, the board of directors of the ultimate parent of the Company (the “Applicable Board”), (B) the instructions of the Chief Executive Officer of the Company or a senior officer of the Company or (C) the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Participant in good faith and in the best interests of the Company.  The cessation of employment of the Participant shall not be deemed to be for Cause unless and until there shall have been delivered to the Participant a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Applicable Board (excluding the Participant, if the Participant is a member of the Applicable Board) at a meeting of the Applicable Board called and held for such purpose (after reasonable notice is provided to the Participant and the Participant is given an opportunity, together with counsel for the Participant, to be heard before the Applicable Board), finding that, in the good faith opinion of the Applicable Board, the Participant is guilty of the conduct described in this definition, and specifying the particulars thereof in detail.

(e)Change in Control.  A “Change in Control” means the first to occur of the following:

(i)The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14 (d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (A) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this sub-section (i), the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company; (B) any acquisition by the Company; (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, (D) any acquisition by any corporation pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) of this section 2(e) or (E) any acquisition by the Goldsmith family or any trust or partnership for the benefit of any member of the Goldsmith family; or

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(ii)Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or contest by or on behalf of a Person other than the Board; or

(iii)Consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving the Company or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company (or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries (each, a “Business Combination”), in each case, unless, following such Business Combination (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors (or, for a non-corporate entity, equivalent governing body), as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that, which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding (x) any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination or (y) the Goldsmith family or any trust or partnership for the benefit of any member of the Goldsmith family) beneficially owns, directly or indirectly, 30% or more of, respectively, the then outstanding shares of common stock of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such entity except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the board of directors (or, for a non-corporate entity, equivalent governing body) of the Company resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(iv)Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

(f)Code.  The Internal Revenue Code of 1986, as amended from time to time.

(g)Committee.  Subject to Section 13, the Compensation, Nominating and Governance Committee of the Board, or its duly authorized designee.

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(h)Company.  City National Corporation, an Affiliated Company, and any successor(s) thereto or, if applicable, the ultimate parent of any such successor.

(i)Date of Termination.  The date of receipt of a Notice of Termination from the Company or the Participant, as applicable, or any later date specified in the Notice of Termination, which date shall not be more than 30 days after the giving of such notice.  The Company and the Participant shall take all steps necessary (including with regard to any post-termination services by the Participant) to ensure that any termination under this Plan constitutes a “separation from service” within the meaning of Section 409A of the Code, and notwithstanding anything contained herein to the contrary, the date on which such separation from service takes place shall be the “Date of Termination.”  If the Participant’s employment is terminated by reason of death, the Date of Termination shall be the date of death of the Participant.  If the Participant’s employment is terminated by reason of  Disability, the Date of Termination shall be the date of the Company determination as provided in Section 2.(j), below.

(j)Disability.  A termination for “Disability” shall have occurred if the Company determines in good faith that the Participant has been absent from his or her duties with the Company on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness that is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive’s legal representative (such agreement as to acceptability not to be unreasonably withheld).

(k)Effective Date.  December 31, 2008.

(l)Highest Annual Bonus.  The greater of (i) the Recent Annual Bonus and (ii) the annual bonus paid or payable, including any bonus or portion thereof that has been earned but deferred (and annualized for any fiscal year consisting of less than 12 full months or during which the Participant was employed for less than 12 full months), for the most recently completed fiscal year following the Change in Control, if any.

(m)Good Reason.  “Good Reason” means actions taken by the Company that result in a material negative change in the employment relationship.  For these purposes, a “material negative change in the employment relationship” shall include, without limitation:

(i)the assignment to the Participant of duties materially inconsistent with the Participant’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as in effect prior to the Change in Control, or a material diminution in such position, authority, duties or responsibilities or a material diminution in the budget over which the Participant retains authority;

(ii)a material diminution in the authorities, duties or responsibilities of the person to whom the Participant is required to report;

(iii)a reduction of ten (10) percent or greater of (A) the Participant’s Annual Base Salary, the Participant’s annual bonus or the Participant’s annual long-term incentive compensation, in each case, as in effect immediately prior to the Change in Control; (B) the other compensation and benefits, in the aggregate, provided to the Participant immediately prior to the Change in Control;

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(iv)the Company’s requiring the Participant (A) to be based at any office or location resulting in a material increase in the Participant’s commute to and from the Participant’s primary residence (for this purpose an increase in the Participant’s commute by 30 miles or more than required immediately prior to the Change in Control shall be deemed material) or (B) to be based at a location other than the principal executive offices of the Company if the Participant was employed at such location immediately preceding the Change in Control; or

(v)any other action or inaction that constitutes a material breach by the Company of this Plan, including the Company’s failure to require any successor to the Company to comply with the Plan.

In order to invoke a termination for Good Reason, the Participant shall provide written notice to the Company of the existence of one or more of the conditions described in clauses (i) through (v) within 90 days following the Participant’s knowledge of the initial existence of such condition or conditions, specifying in reasonable detail the conditions constituting Good Reason, and the Company shall have 30 days following receipt of such written notice (the “Cure Period”) during which it may remedy the condition.  In the event that the Company fails to remedy the condition constituting Good Reason during the applicable Cure Period, the Participant’s “separation from service” (within the meaning of Section 409A of the Code) must occur, if at all, within one year following the Change in Control in order for such termination as a result of such condition to constitute a termination for Good Reason.  The Participant’s mental or physical incapacity following the occurrence of an event described above in clauses (i) through (v) shall not affect the Participant’s ability to terminate employment for Good Reason and the Participant’s death following delivery of a Notice of Termination for Good Reason shall not affect the Participant’s estate’s entitlement to severance payments benefits provided hereunder upon a termination of employment for Good Reason.  A Participant’s failure to assert any right the Participant may have to terminate employment for Good Reason shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.  Anything in this Plan to the contrary notwithstanding, a termination by the Participant for any reason pursuant to a Notice of Termination given during the 30-day period immediately preceding the first anniversary of the Change in Control shall be deemed to be a termination for Good Reason for all purposes of this Plan and the foregoing notice and cure provisions shall not be applicable.

(n)Notice of Termination.  A written notice that (i) indicates the specific termination provision in this Plan relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Participant’s employment under the provision so indicated and (iii) if the Date of Termination (as defined herein) is other than the date of receipt of such notice, specifies the Date of Termination (which Date of Termination shall be not more than 30 days after the giving of such notice).  The failure by the Participant or the Company to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause shall not waive any right of the Participant or the Company, respectively, hereunder or preclude the Participant or the Company, respectively, from asserting such fact or circumstance in enforcing the Participant’s or the Company’s respective rights hereunder.

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(o)Participant.  A member of City National’s Executive Committee, who meets the eligibility requirements set forth in Section 3 hereof.

(p)Plan.  This City National Corporation Executive Committee Change in Control Severance Plan.

(q)Qualified Termination.  Any termination of a Participant’s employment, during the one-year period beginning on the date of a Change in Control, by the Participant for Good Reason or by the Company other than for Cause, death or Disability.  Notwithstanding the foregoing, if a Change in Control occurs and if the Participant’s employment with the Company is terminated prior to the date on which the Change in Control occurs, and if it is reasonably demonstrated by the Participant that such termination of employment (i) was at the request of a third party that has taken steps reasonably calculated to effect a Change in Control or (ii) otherwise arose in connection with or anticipation of a Change in Control, then a “Qualifying Termination” shall be deemed to have occurred on the Change in Control.

(r)Recent Annual Bonus.  The Participant’s highest bonus earned under the Company’s annual incentive plans for the last three full fiscal years prior to the Change in Control (or for such lesser number of full fiscal years prior to the Change in Control for which the Participant was eligible to earn such a bonus, and annualized in the case of any pro rata bonus earned for a partial fiscal year).  If the Participant has not been eligible to earn such a bonus for any fiscal year prior to the Change in Control, the “Recent Annual Bonus” shall mean the Participant’s target annual performance bonus for the year during which the Change in Control occurs.

3.Eligibility.  An employee shall be a Participant in the Plan if the employee (a) is a member of City National’s Executive Committee as of immediately prior to a Change in Control; (b) is not party to a Change in Control Employment Agreement with the Company as of immediately prior to a Change in Control; (c) is not a participant in another Change in Control severance plan as of immediately prior to the Change in Control; and (d) does not have a separate written agreement with the Company providing that he or she will not be eligible to receive payments and/or benefits due to a Change in Control.

4.Separation Benefits.

(a)Qualified Termination.  In the event that a Participant suffers a Qualified Termination,

(i)the Company shall pay to the Participant, in a lump sum in cash within 30 days after the Date of Termination, the aggregate of the following amounts:

(A)the sum of (1) the Participant’s Annual Base Salary through the Date of Termination to the extent not theretofore paid, (2) the Participant’s business expenses that have not been reimbursed by the Company as of the Date of Termination; (3) the Participant’s annual bonus for the fiscal year immediately preceding the fiscal year in which the Date of Termination occurs, if such bonus has not been paid as of the Date of Termination; (4) any accrued vacation pay to the extent not theretofore paid (the sum of the amounts described in subclauses (1), (2), (3) and (4), the “Accrued Obligations”) and (5) an amount equal to the product

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of (x) the Highest Annual Bonus and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination and the denominator of which is 365 (the “Pro Rata Bonus”); provided, that notwithstanding the foregoing, if the Participant has made an irrevocable election under any deferred compensation arrangement subject to Section 409A of the Code to defer any portion of the Annual Base Salary or annual bonus described in clause (1) or (3) above, then for all purposes of this Section 4, such deferral election, and the terms of the applicable arrangement shall apply to the same portion of the amount described in such clauses (1) or (3), and such portion shall not be considered as part of the “Accrued Obligations” but shall instead be an “Other Benefit” (as defined below); and

(B)the amount equal to two times the sum of (x) the Participant’s Annual Base Salary and (y) the Highest Annual Bonus; and

(C)an amount equal to the contributions to the Participant’s account in the Company’s Profit Sharing Plan which the Participant would receive if the Participant’s employment continued for two years after the Date of Termination assuming for this purpose that all such contributions are fully vested, and, assuming that the Company’s contribution to the Profit Sharing Plan in each such year is in an amount equal to the greatest amount contributed by the Company in any of the three years ending prior to the Effective Date.

(ii)Welfare Benefits.  For two years following the Date of Termination, or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy, (the “Benefits Period”), the Company shall provide the Participant and his eligible dependents with medical, prescription, vision and dental insurance coverage (the “Health Care Benefits”) and life insurance and disability benefits no less favorable to those which the Participant and his spouse and eligible dependents were receiving immediately prior to the Date of Termination or, if more favorable to such persons, as in effect generally at any time thereafter with respect to other peer executives of the Company and the Affiliated Companies; provided, however, that the Health Care Benefits shall be provided during the Benefits Period in such a manner that such benefits are excluded from the Participant’s income for federal income tax purposes; provided, further, however, that if the Participant becomes re-employed with another employer and is eligible to receive health care benefits under another employer-provided plan, the health care benefits provided hereunder shall be secondary to those provided under such other plan during such applicable period of eligibility.  The Company shall use its reasonable best efforts to ensure that, following the end of the Benefits Period, the Participant and the Participant’s spouse and eligible dependents shall be eligible to elect continued health coverage pursuant to Section 4980B of the Code or other applicable law (“COBRA Coverage”), as if the Participant’s employment with the Company had terminated as of the end of such period.  For purposes of determining eligibility (but not the time of commencement of benefits) of the Participant for retiree welfare benefits pursuant to the Company’s retiree welfare benefit plans, if any, the Participant shall be considered to have remained employed until the end of the Benefits Period and to have retired on the last day of such period.

(iii)  Outplacement Services.  The Company shall, at its sole expense as incurred, provide the Participant with outplacement services the scope and provider of which shall be selected by the Participant in the Participant’s sole discretion, provided that such outplacement

7

benefits shall end not later than the last day of the second calendar year that begins after the Date of Termination.

(b)Death.  If the Participant’s employment is terminated by reason of the Participant’s death during the one-year period beginning on the date of a Change in Control, the Company shall provide the Participant’s estate or beneficiaries with the Accrued Obligations (subject to the proviso set forth in Section 4(a)(i)(A) to the extent applicable) and the Pro Rata Bonus and the timely payment or delivery of the Other Benefits (subject to the proviso set forth in Section 4(a)(i)(A) to the extent applicable), and shall have no other severance obligations under this Plan.  The Accrued Obligations and the Pro Rata Bonus shall be paid to the Participant’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days after the Date of Termination.  With respect to the provision of the Other Benefits, the term “Other Benefits” as utilized in this Section 4(b) shall include, without limitation, and the Participant’s estate and/or beneficiaries shall be entitled to receive, benefits at least equal to the most favorable benefits provided by the Company and the Affiliated Companies to the estates and beneficiaries of peer executives of the Company and the Affiliated Companies under such plans, programs, practices and policies relating to death benefits, if any, as in effect with respect to other peer executives and their beneficiaries at any time during the 120-day period immediately preceding the Change in Control or, if more favorable to the Participant’s estate and/or the Participant’s beneficiaries, as in effect on the date of the Participant’s death with respect to other peer executives of the Company and the Affiliated Companies and their beneficiaries.

(c)Disability.  If the Participant’s employment is terminated by reason of the Participant’s Disability during the one-year period beginning on a Change in Control, the Company shall provide the Participant with the Accrued Obligations and Pro Rata Bonus and the timely payment or delivery of the Other Benefits (subject to the proviso set forth in Section 4(a)(1)(A) to the extent applicable) in accordance with the terms of the underlying plans or agreements, and shall have no other severance obligations under this Plan.  The Accrued Obligations (subject to the proviso set forth in Section 4(a)(i)(A) to the extent applicable) and the Pro Rata Bonus shall be paid to the Participant in a lump sum in cash within 30 days of the Date of Termination.  With respect to the provision of the Other Benefits, the term “Other Benefits” as utilized in this Section 4(c) shall include, and the Participant shall be entitled after the Disability Effective Date to receive, disability and other benefits at least equal to the most favorable of those generally provided by the Company and the Affiliated Companies to disabled executives and/or their families in accordance with such plans, programs, practices and policies relating to disability, if any, as in effect generally with respect to other peer executives and their families at any time during the 120-day period immediately preceding the Change in Control or, if more favorable to the Participant and/or the Participant’s family, as in effect at any time thereafter generally with respect to other peer executives of the Company and the Affiliated Companies and their families.

(d)Cause; Other Than for Good Reason.  If the Participant’s employment is terminated for Cause during the one-year period beginning upon the occurrence of a Change in Control, the Company shall provide the Participant with the Participant’s Annual Base Salary through the Date of Termination, and the timely payment or delivery of the Other Benefits (disregarding the proviso set forth in Section 4(a)(i)(A) to the extent applicable), and shall have no other severance obligations under this Plan.  If the Participant voluntarily terminates

8

employment during the one-year period following a Change in Control, excluding a termination for Good Reason, the Company shall provide to the Participant the Accrued Obligations and the Pro Rata Bonus and the timely payment or delivery of the Other Benefits, subject to the proviso set forth in Section 4(a)(i)(A) to the extent applicable, and shall have no other severance obligations under this Plan.  In such case, all the Accrued Obligations and the Pro Rata Bonus shall be paid to the Participant in a lump sum in cash within 30 days of the Date of Termination.

5.Certain Additional Payments by the Company.

(a)Anything in this Plan to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any Payment would be subject to the Excise Tax, then the applicable Participant shall be entitled to receive an additional payment (the “Gross-Up Payment”) in an amount such that, after payment by the Participant of all taxes (and any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, but excluding any income taxes and penalties imposed pursuant to Section 409A of the Code, the Participant retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.  Notwithstanding the foregoing provisions of this Section 5(a), if it shall be determined that the Participant is entitled to the Gross-Up Payment, but that the Parachute Value of all Payments does not exceed 110% of the Safe Harbor Amount, then no Gross-Up Payment shall be made to the Participant and the amounts payable under this Plan shall be reduced so that the Parachute Value of all Payments, in the aggregate, equals the Safe Harbor Amount.  The reduction of the amounts payable hereunder, if applicable, shall be made by reducing the payments and benefits under the following sections in the following order: (i) Section 4(a)(i)(B), (ii) Section 4(a)(ii), (iii) Section 4(a)(i)(A)(5) and (iv) Section 4(a)(iii).  For purposes of reducing the Payments to the Safe Harbor Amount, only amounts payable under this Plan (and no other Payments) shall be reduced.  If the reduction of the amount payable under this Plan would not result in a reduction of the Parachute Value of all Payments to the Safe Harbor Amount, no amounts payable under the Plan shall be reduced pursuant to this Section 5(a) and the Participant shall be entitled to the Gross-Up Payment.  The Company’s obligation to make Gross-Up Payments under this Section 5 shall not be conditioned upon a Participant’s termination of employment.

(b)Subject to the provisions of Section 5(c), all determinations required to be made under this Section 5, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by Ernst & Young LLP or such other nationally recognized certified public accounting firm as may be designated by the affected Participant (the “Accounting Firm”).  The Accounting Firm shall provide detailed supporting calculations both to the Company and the Participant within 15 business days of the receipt of notice from the Participant that there has been a Payment or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Participant may appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder).  All fees and expenses of the Accounting Firm shall be borne solely by the Company.  Any determination by the Accounting Firm shall be binding upon the Company and the Participant.  As a result of the uncertainty in

9

the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments that will not have been made by the Company should have been made (the “Underpayment”), consistent with the calculations required to be made hereunder.  In the event the Company exhausts its remedies pursuant to Section 5(c) and the Participant thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Under-payment shall be promptly paid by the Company to or for the benefit of the Participant.

(c)The Participant shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment.  Such notification shall be given as soon as practicable, but no later than 10 business days after the Participant is informed in writing of such claim.  The Participant shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid.  The Participant shall not pay such claim prior to the expiration of the 30-day period following the date on which the Participant gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due).  If the Company notifies the Participant in writing prior to the expiration of such period that the Company desires to contest such claim, the Participant shall:

(i)give the Company any information reasonably requested by the Company relating to such claim,

(ii)take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company,

(iii)cooperate with the Company in good faith in order effectively to contest such claim, and

(iv)permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest, and shall indemnify and hold the Participant harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties) imposed as a result of such representation and payment of costs and expenses.  Without limitation on the foregoing provisions of this Section 5(c), the Company shall control all proceedings taken in connection with such contest, and, at its sole discretion, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the applicable taxing authority in respect of such claim and may, at its sole discretion, either pay the tax claimed to the appropriate taxing authority on behalf of the Participant and direct the Participant to sue for a refund or to contest the claim in any permissible manner, and the Participant agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that, if the Company pays such claim and directs

10

the Participant to sue for a refund, the Company shall indemnify and hold the Participant harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties) imposed with respect to such payment or with respect to any imputed income in connection with such payment; and provided, further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Participant with respect to which such contested amount is claimed to be due is limited solely to such contested amount.  Furthermore, the Company’s control of the contest shall be limited to issues with respect to which the Gross-Up Payment would be payable hereunder, and the Participant shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(d)If, after the receipt by the Participant of a Gross-Up Payment or payment by the Company of an amount on the Participant’s behalf pursuant to Section 5(c), the Participant becomes entitled to receive any refund with respect to the Excise Tax to which such Gross-Up Payment relates or with respect to such claim, the Participant shall (subject to the Company’s complying with the requirements of Section 5(c), if applicable) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto).  If, after payment by the Company of an amount on the Participant’s behalf pursuant to Section 5(c), a determination is made that the Participant shall not be entitled to any refund with respect to such claim and the Company does not notify the Participant in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then the amount of such payment shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

(e)Any Gross-Up Payment, as determined pursuant to this Section 5, shall be paid by the Company to the Participant within five days of the receipt of the Accounting Firm’s determination; provided that, the Gross-Up Payment shall in all events be paid no later than the end of the Participant’s taxable year next following the Participant’s taxable year in which the Excise Tax (and any income or other related taxes or interest or penalties thereon) on a Payment are remitted to the Internal Revenue Service or any other applicable taxing authority or, in the case of amounts relating to a claim described in Section 5(c) that does not result in the remittance of any federal, state, local and foreign income, excise, social security and other taxes, the calendar year in which the claim is finally settled or otherwise resolved.  Notwithstanding any other provision of this Section 5, the Company may, in its sole discretion, withhold and pay over to the Internal Revenue Service or any other applicable taxing authority, for the benefit of the Participant, all or any portion of any Gross-Up Payment, and the Participant hereby consents to such withholding.

(f)Definitions.  The following terms shall have the following meanings for purposes of this Section 5.

(i)“Excise Tax” shall mean the excise tax imposed by Section 4999 of the Code, together with any interest or penalties imposed with respect to such excise tax.

(ii)“Parachute Value” of a Payment shall mean the present value as of the date of the change of control for purposes of Section 280G of the Code of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2), as determined by the

11

Accounting Firm for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.

(iii)A “Payment” shall mean any payment or distribution in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of the Participant, whether paid or payable pursuant to this Plan or otherwise.

(iv)The “Safe Harbor Amount” means 2.99 times the Participant’s “base amount,” within the meaning of Section 280G(b)(3) of the Code.

6.Full Settlement.  The Company’s obligation to make the payments provided for in this Plan and otherwise to perform its obligations hereunder shall be absolute and unconditional and shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against a Participant or others.  In no event shall a Participant be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to such Participant under any of the provisions of this Plan and no amounts received from other employment shall serve to mitigate the payments hereunder.  The Company agrees to pay as incurred (within 10 days following the Company’s receipt of an invoice from the Participant), to the full extent permitted by law, for all legal fees and expenses that the Participant may reasonably incur as a result of any contest by the Company, the Participant or others of the validity or enforceability of, or liability under, any provision of this Plan or any guarantee of performance thereof (including as a result of any contest by the Participant about the amount of any payment pursuant to this Plan) (each, a “Contest”), plus, in each case, interest.  In order to comply with Section 409A of the Code, in no event shall the payments by the Company under this Section 6 be made later than the end of the calendar year next following the calendar year in which such fees and expenses were incurred, provided, that the Participant shall have submitted an invoice for such fees and expenses at least 10 days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred.  The amount of such legal fees and expenses that the Company is obligated to pay in any given calendar year shall not affect the legal fees and expenses that the Company is obligated to pay in any other calendar year, and the Participant’s right to have the Company pay such legal fees and expenses may not be liquidated or exchanged for any other benefit.  Nothing in this Plan shall prevent or limit a Participant’s continuing or future participation in any plan, program, policy or practice provided by the Company or the Affiliated Companies and for which the Participant may qualify, nor shall anything herein limit or otherwise affect such rights as a Participant may have under any other contract or agreement with the Company or any of the Affiliated Companies.  Amounts that are vested benefits or that a Participant and/or a Participant’s dependents are otherwise entitled to receive under any plan, policy, practice, program, agreement or arrangement of the Company or any of the Affiliated Companies (“Other Benefits”) shall be payable in accordance with such plan, policy, practice, program, agreement or arrangement.  Without limiting the generality of the foregoing, the Participant’s resignation under this Plan with or without Good Reason, shall in no way affect the Participant’s ability to terminate employment by reason of the Participant’s “retirement” under, or to be eligible to receive benefits under, any compensation and benefits plans, programs or arrangements of the Company or the Affiliated Companies, including without limitation any retirement or pension plans or arrangements or substitute plans adopted by the Company, the Affiliated Companies or their respective successors, and any termination which otherwise qualifies as Good Reason shall

12

be treated as such even if it is also a “retirement” for purposes of any such plan.  The payments provided pursuant to Section 4 shall be provided in addition to, and not in lieu of, all other accrued or vested or earned but deferred compensation, retention bonuses, rights, options or other benefits which may be owed to a Participant upon or following termination, including but not limited to accrued paid time off, amounts or benefits payable under any bonus or other compensation plans, stock option plan, stock ownership plan, stock purchase plan, life insurance plan, health plan, disability plan or similar or successor plan.  Notwithstanding the foregoing, if the Participant receives payments and benefits pursuant to Section 4(a) of this Plan, the Participant shall not be entitled to any severance pay or benefits under any severance plan, program or policy of the Company and the Affiliated Companies, unless otherwise specifically provided therein in a specific reference to this Plan.

7.Controlling Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws.

8.Amendments; Termination.  The Company reserves the right to amend, modify, suspend or terminate the Plan hereunder at any time by action of a majority of the Committee; provided that no such amendment, modification, suspension or termination that has the effect of reducing or diminishing the rights of any Participant shall be effective until the applicable Cutback Effective Date (as defined in the next sentence), except modifications to comply with legal requirements, including, without limitation Section 409A of the Internal Revenue Code.  Initially, the Cutback Effective Date shall be December 31, 2010; provided that commencing on December 31, 2009, and on each annual anniversary thereof (each of December 31, 2009 and each annual anniversary thereof shall be hereinafter referred to as the “Renewal Date”), the Cutback Effective Date shall be extended until the second anniversary of such Renewal Date, unless at least 60 days prior to such Renewal Date, the Company shall have given notice to the Participants that the Cutback Effective Date will not be so renewed.

9.Assignment.  The Company shall require any corporation, entity, individual or other person who is the successor (whether direct or indirect by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all the business and/or assets of the Company to expressly assume and agree to perform, by a written agreement in form and in substance satisfactory to the Company, all of the obligations of the Company under this Plan.  As used in this Plan, the term “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Plan by operation of law, written agreement or otherwise.  It is a condition of this Plan, and all rights of each person eligible to receive benefits under this Plan shall be subject hereto, that no right or interest of any such person in this Plan shall be assignable or transferable in whole or in part, except by operation of law, including, but not by way of limitation, lawful execution, levy, garnishment, attachment, pledge, bankruptcy, alimony, child support or qualified domestic relations order.

13

10.Withholding.  The Company may withhold from any amount payable or benefit provided under this Plan such Federal, state, local, foreign and other taxes as are required to be withheld pursuant to any applicable law or regulation.

11.Gender and Plurals.  Wherever used in this Plan document, words in the masculine gender shall include masculine or feminine gender, and, unless the context otherwise requires, words in the singular shall include the plural, and words in the plural shall include the singular.

12.Plan Controls.  In the event of any inconsistency between this Plan document and any other communication regarding this Plan, this Plan document controls.

13.Post-Change in Control Committee.  This Plan shall be administered by the Committee, provided that in the event of an impending Change in Control, the Committee may appoint a person (or persons) independent of the third party effectuating the Change in Control to be the Committee effective upon the occurrence of a Change in Control (the “Independent Committee”) and the Independent Committee shall not be removed or modified following a Change in Control.

14.Benefits Claims and Appeals.  The Plan is not intended to be subject to ERISA. If, and only if, however, the Plan is determined to be subject to ERISA, the intention of the Company is that it shall be construed as a “welfare plan,” as defined in Section 3(1) of ERISA, and this Section 14 shall apply.  The Committee shall establish a claims and appeals procedure applicable to Participants under the Plan.  Unless otherwise required by applicable law, such procedures will provide that a Participant has not less than 60 days following receipt of any adverse benefit determination within which to appeal the determination in writing with the Committee, and that the Committee must respond in writing within 60 days of receiving the appeal, specifically identifying those Plan provisions on which the benefit denial was based and indicating what, if any, information the Participant must supply in order to perfect a claim for benefits.  Notwithstanding the foregoing, the claims and appeals procedure established by the Committee will be provided for the use and benefit of Participants who may choose to avail themselves of such procedures, but compliance with the provisions of these claims and appeals procedures by the Participant will not be mandatory for any Participant claiming benefits after a Change in Control.  It will not be necessary for any Participant to exhaust these procedures and remedies after a Change in Control prior to bringing any legal claim or action, or asserting any other demand, for payments or other benefits to which such Participant claims entitlement.

15.Grantor Trust.  The Committee may establish a trust with a bank trustee, for the purpose of paying benefits under this Plan.  If so established, the trust shall be a grantor trust subject to the claims of the Company’s creditors and shall, immediately prior to a Change in Control, be funded in cash or common stock of the Company or such other assets as the Committee deems appropriate with an amount equal to 100 percent of the aggregate benefits payable under this Plan assuming that all Participants in the Plan incurred a termination of employment entitling them to the benefits under Section 4 and, if applicable, Section 5, or such lesser amount as the Committee shall determine prior to the Change in Control; provided, however, that the trust shall not be funded with respect to a Participant if the funding thereof would result in taxable income to the Participant by reason of Section 409A(b) of the Code; and

14

provided, further, that in no event shall any trust assets at any time be located or transferred outside of the United States, within the meaning of Section 409A(b) of the Code.  Notwithstanding the establishment of any such trust, a Participant’s rights hereunder will be solely those of a general unsecured creditor.

16.Indemnification.  To the extent permitted by law, the Company shall indemnify the Committee from all claims for liability, loss, or damage (including the payment of expenses in connection with defense against such claims) arising from any act or failure to act in connection with the Plan.

17.Section 409A of the Code.  The Plan is intended to comply with the requirements of Section 409A of the Code or an exemption or exclusion therefrom and, with respect to amounts that are subject to Section 409A of the Code, shall in all respects be administered in accordance with Section 409A of the Code.  Each payment under this Plan shall be treated as a separate payment for purposes of Section 409A of the Code.  In no event may a Participant, directly or indirectly, designate the calendar year of any payment to be made under this Plan.  If a Participant dies following the Date of Termination and prior to the payment of the any amounts delayed on account of Section 409A of the Code, such amounts shall be paid to the personal representative of the Participant’s estate within 30 days after the date of the Participant’s death.  All reimbursements and in-kind benefits provided under this Plan that constitute deferred compensation within the meaning of Section 409A of the Code shall be made or provided in accordance with the requirements of Section 409A of the Code, including, without limitation, that (i) in no event shall reimbursements by the Company under this Plan be made later than the end of the calendar year next following the calendar year in which the applicable fees and expenses were incurred, provided, that the Participant shall have submitted an invoice for such fees and expenses at least 10 days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred; (ii) the amount of in-kind benefits that the Company is obligated to pay or provide in any given calendar year shall not affect the in-kind benefits that the Company is obligated to pay or provide in any other calendar year; (iii) the Participant’s right to have the Company pay or provide such reimbursements and in-kind benefits may not be liquidated or exchanged for any other benefit; and (iv) in no event shall the Company’s obligations to make such reimbursements or to provide such in-kind benefits apply later than the Participant’s remaining lifetime (or if longer, through the 20th anniversary of the Change in Control).

18.The Participant and the Company acknowledge that, except as may otherwise be provided herein or under any other written agreement between the Participant and the Company, the employment of the Participant by the Company is “at will” and prior to a Change in Control, the Participant’s employment may be terminated by either the Participant or the Company at any time, in which case the Participant shall have no further rights under this Plan.

19.Notices.  (a) Any notice required to be delivered to the Company by a Participant hereunder shall be properly delivered to the Company when personally delivered to, or actually received through the U.S. mail by:

15

City National

Attn.: HR Director

555 S. Flower Street, 18th Floor

Los Angeles, California 90071

(b)  Any notice required to be delivered to the Participant by the Company hereunder shall be properly delivered to the Participant when the Company delivers such notice personally or by placing said notice in the U.S. mail to that person’s last known address as reflected on the books and records of the Company.

20.The invalidity or unenforceability of any provision of this Plan shall not affect the validity or enforceability of any other provision of this Plan.

21.Compliance With Section 111 of EESA. Solely to the extent, and for the period, required by the provisions of Section 111 of the Emergency Economic Stabilization Act of 2008 (“EESA”) applicable to participants in the Capital Purchase Program under EESA and the regulation issued by the Department of the Treasury as published in the Federal Register on October 20, 2008: (a) each “Senior Executive Officer” within the meaning of Section 111 of EESA and the regulation issued by the Department of the Treasury as published in the Federal Register on October 20, 2008 who participates in this Plan or is a party to any agreement which includes benefits under this Plan shall be ineligible to receive compensation hereunder to the extent that the Compensation, Nominating & Governance Committee of the Board of Directors of the Company determines this Plan includes incentives for the Senior Executive Officer to take unnecessary and excessive risks that threaten the value of City National Corporation or City National Bank; (b) each Senior Executive Officer who participates in this Plan shall be required to forfeit any bonus or incentive compensation paid to the Senior Executive Officer hereunder during the period that the Department of the Treasury holds a debt or equity position in the Company based on statements of earnings, gains, or other criteria that are later proven to be materially inaccurate; and (c) the Company shall be prohibited from making to each Senior Executive Officer who participates in this Plan, and each such Senior Executive Officer shall be ineligible to receive hereunder, any “golden parachute payment” in connection with the Senior Executive Officer’s “applicable severance from employment,” in each case, within the meaning of Section 111 of EESA and the regulation issued by the Department of the Treasury as published in the Federal Register on October 20, 2008.

*    *    *

16

EX-10.27

EXHIBIT 10.27

AMENDMENT NUMBER 3

TO

2000 CITY NATIONAL BANK

DIRECTOR DEFERRED COMPENSATION PLAN

(As In Effect Immediately Prior to January 1, 2009)

WHEREAS, City National Bank (“Bank”) maintains the 2000 City National Bank Director Deferred Compensation Plan (the “Plan”) to provide supplemental retirement income benefits for the outside directors of the Bank through deferrals of directors’ fees;

WHEREAS, amounts deferred and vested under the Plan on December 31, 2004, together with earnings on such amounts (collectively “Grandfathered Amounts”) are intended to be grandfathered under Section 409A of the Internal Revenue Code of 1986, as amended (“Code”) and remain subject to the terms of the Plan as in effect immediately prior to January 1, 2009;

WHEREAS, pursuant to Section 8.4 of the Plan, the Bank has the right to amend the Plan;

WHEREAS, it is desirable to amend the Plan with respect to the Grandfathered Amounts in order to avoid a violation of Section 409A; and

WHEREAS, this amendment is intended not to constitute a material modification, in accordance with Section 1.409A-6(a)(4)(i)(B) of the Treasury Regulations;

NOW, THEREFORE, the Plan is hereby amended, effective as of January 1, 2009, with approval by the Compensation, Nominating and Governance Committee of the Board of Directors of City National Corporation, as follows:

1.The definition of “Beneficiary” in Section 1.2 of the Plan is amended to read as follows:

““Beneficiary” or “Beneficiaries” shall mean the person or persons last designated in writing by a Participant in accordance with procedures established by the Committee to receive the benefits specified hereunder (other than those benefits set forth in Section 6.6) in the event of the Participant’s death. No beneficiary designation shall become effective until it is filed with the Committee. If there is no Beneficiary designation in effect, or if there is no surviving designated Beneficiary, then the Beneficiary or Beneficiaries shall be, in order of priority: (a) the Participant’s surviving spouse, (b) if the Participant is not survived by a spouse, the revocable living trust established by the Participant during his or her lifetime, (c) the Participant’s children, per stirpes; or (d) the Participant’s estate.  The filing of a new beneficiary designation will cancel all beneficiary designations previously filed.  Any finalized divorce of a Participant subsequent to the date of filing of a beneficiary designation shall revoke such designation unless the previous spouse was not designated as the Beneficiary. In the event any amount is payable under

the Plan to a minor, payment shall not be made to the minor, but instead shall be paid (i) to that person’s living parent(s) to act as custodian, (ii) if that person’s parents are then divorced, and one parent is the sole custodial parent, to such custodial parent, or (iii) if no parent of that person is then living, to a custodian selected by the Committee to hold the funds for the minor under the Uniform Transfers or Gifts to Minors Act in effect in the jurisdiction in which the minor resides. If no parent is living and the Committee decides not to select another custodian to hold the funds for the minor, then payment shall be made to the duly appointed and currently acting guardian of the estate for the minor or, if no guardian of the estate for the minor is duly appointed and currently acting within 60 days after the date the amount becomes payable, payment shall be deposited with the court having jurisdiction over the estate of the minor.”

2.The second sentence of Section 3.2(b) of the Plan is amended to read as follows:

“A Participant may change the designation made under this Section 3.2 with respect to any or all of his or her Plan Year Subaccounts by filing an election, on a form provided and in a manner specified by the Committee.”

3.The fourth sentence of Section 6.2 of the Plan is amended to read as follows:

“Upon the payment of such withdrawal, (a) the Participant shall be ineligible to participate in the Plan (including, for the avoidance of doubt, under the terms of the Plan as amended for Plan Years 2005 and later) during the two Plan Years immediately following the Plan Year in which the withdrawal occurs, and (b) any deferral elections made by the Participant for such Plan Years shall terminate.”

4.Except as provided herein, the terms of the Plan remain in full force and effect with respect to Grandfathered Amounts.

IN WITNESS WHEREOF, the Bank has caused its duly authorized officer to execute this Amendment on this       th day of December, 2008.

CITY NATIONAL BANK
By:
	Patti Fischer
Its:	Senior Vice President
	Human Resources

EX-10.28

Exhibit 10.28

2000 CITY NATIONAL BANK

DIRECTOR DEFERRED COMPENSATION PLAN

(Amended and Restated for Plan Years 2005 and Later

EFFECTIVE ON JANUARY 1, 2009)

ARTICLE I	TITLE AND DEFINITIONS	1
1.1	Title	1
1.2	Definitions	1
ARTICLE II	PARTICIPATION	5
2.1	Participation	5
ARTICLE III	DEFERRAL ELECTIONS	5
3.1	Elections to Defer Compensation	5
3.2	Investment Elections	8
ARTICLE IV	ACCOUNTS	12
4.1	Deferral Account	12
4.2	Rollovers	13
ARTICLE V	VESTING	13
5.1	Deferral Account	13
ARTICLE VI	DISTRIBUTIONS	13
6.1	Distribution of Deferred Compensation	13
6.2	Nonscheduled In-Service Withdrawals	14
6.3	Hardship Withdrawals	15
6.4	Inability to Locate Participant	15
6.5	Change in Control	16
6.6	Death Benefit for Certain Participants	16
ARTICLE VII	ADMINISTRATION	17
7.1	Committee Action	17
7.2	Powers and Duties of the Committee	17
7.3	Construction and Interpretation	18
7.4	Information	18
7.5	Compensation, Expenses and Indemnity	18
7.6	Quarterly Statements	19
7.7	Claims Procedure	19
ARTICLE VIII	MISCELLANEOUS	20
8.1	Unsecured General Creditor	20
8.2	Restriction Against Assignment	20
8.3	Withholding	21
8.4	Amendment, Modification, Suspension or Termination	21

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8.5	Governing Law	22
8.6	Receipt or Release	22
8.7	Payments on Behalf of Persons Under Incapacity	22
8.8	Headings, etc. Not Part of Agreement	22
8.9	Section 409A of the Code	22
8.10	Domestic Relations Orders	24

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2000 City National Bank
Director Deferred Compensation Plan

(Amended and Restated for Plan Years 2005 and Later

Effective on January 1, 2009)

This 2000 City National Bank Director Deferred Compensation Plan (the “Plan”), established by City National Bank effective as of January 1, 2000, to provide a tax-deferred capital accumulation opportunity to its outside directors through deferrals of directors’ fees, and subsequently amended on two occasions, is hereby amended and restated for Plan Years 2005 and later effective on January 1, 2009.  The principal purpose of this amendment and restatement is to bring the Plan into compliance with Section 409A of the Code and the Treasury Regulations issued thereunder.  All amounts which were deferred and vested under this Plan on December 31, 2004, together with earnings on such amounts (collectively “Grandfathered Amounts”), are intended to be grandfathered under Section 409A of the Code.  The Grandfathered Amounts shall not be subject to the terms of this amendment and restatement, but rather to the terms of the Plan as in effect immediately prior to January 1, 2009.  No prior amendments to the Plan subsequent to October 3, 2004 provided any new material benefits or rights or any material enhancement of any existing benefits or rights under the Plan with respect to the Grandfathered Amounts.

ARTICLE I
TITLE AND DEFINITIONS

1.1Title.

This Plan shall be known as the 2000 City National Bank Director Deferred Compensation Plan.

1.2Definitions.

Whenever the following words and phrases are used in this Plan, with the first letter capitalized, they shall have the meanings specified below.

“Account” shall mean a Participant’s Deferral Account.

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“Annual Award” shall mean the annual award to which a Director is entitled for service as a member of the board of directors of the Corporation or the Board of Directors of the Bank which is payable in cash in an amount equivalent to the value of a specified number of shares (currently 500) of Common Stock of the Corporation.

“Annual Retainer” shall mean the annual retainer fee for Committee Chairs to which a Director is entitled for service as a Chair of a board committee of the board of directors of the Corporation or the Board of Directors of the Bank.

“Bank” shall mean City National Bank and any successor corporation.

“Beneficiary” or “Beneficiaries” shall mean the person or persons last designated in writing by a Participant in accordance with procedures established by the Committee to receive the benefits specified hereunder (other than those benefits set forth in Section 6.6) in the event of the Participant’s death. No beneficiary designation shall become effective until it is filed with the Bank or its agent. If there is no Beneficiary designation in effect, or if there is no surviving designated Beneficiary, then the Beneficiary or Beneficiaries shall be, in order of priority: (a) the Participant’s surviving spouse, (b) if the Participant is not survived by a spouse, the revocable living trust established by the Participant during his or her lifetime, (c) the Participant’s children, per stirpes; or (d) the Participant’s estate.  The filing of a new beneficiary designation will cancel all beneficiary designations previously filed.  Any finalized divorce of a Participant subsequent to the date of filing of a beneficiary designation shall revoke such designation unless the previous spouse was not designated as the Beneficiary. In the event any amount is payable under the Plan to a minor, payment shall not be made to the minor, but instead shall be paid (i) to that person’s living parent(s) to act as custodian, (ii) if that person’s parents are then divorced, and one parent is the sole custodial parent, to such custodial parent, or (iii) if no parent of that person is then living, to a custodian selected by the Committee to hold the funds for the minor under the Uniform Transfers or Gifts to Minors Act in effect in the jurisdiction in which the minor resides. If no parent is living and the Committee decides not to select another custodian to hold the funds for the minor, then payment shall be made to the duly appointed and

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currently acting guardian of the estate for the minor or, if no guardian of the estate for the minor is duly appointed and currently acting within 60 days after the date the amount becomes payable, payment shall be deposited with the court having jurisdiction over the estate of the minor.

“Board of Directors” or “Board” shall mean the Board of Directors of City National Bank.

“CNC Stock” shall mean shares of City National Corporation Common Stock.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Committee” shall mean the Bank’s Benefits Committee.

“Compensation” shall mean the Participant’s Annual Award, Annual Retainer and Meeting Fees.

“Corporation” or “CNC” shall mean City National Corporation.

“Deferral Account” shall mean the bookkeeping account on the Bank’s books that is maintained by the Committee for each Participant that is credited with amounts equal to (a) the portion of the Participant’s Annual Award, Annual Retainer and Meeting Fees that he or she elects to defer, (b) the Participant’s Rollover Amount, if any, and (c) earnings or losses pursuant to Section 4.1.

“Director” shall mean a member of the Board of Directors of the Bank.

“Disability” shall mean an incapacity which has rendered the Participant unable to perform all of the material and substantial duties of a Director because of illness or injury.

“Earnings Rate” shall mean, for each Fund, an amount equal to the net rate of gain or loss on the assets of such Fund during each business day.

“Eligible Director” shall mean each Director who is not an employee of the Corporation, the Bank, any subsidiary of the Corporation or the Bank or any other entity affiliated with the Corporation or the Bank.

“Fund” or “Funds” shall mean one or more of the investment funds or portfolios selected by the Committee pursuant to Section 3.2(b).

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“Grandfathered Amounts” shall mean all amounts which were deferred and vested under this Plan on December 31, 2004, together with earnings on such amounts.

“Initial Election Period” for an Eligible Director shall mean the thirty-day period beginning on the date of the Eligible Director’s initial election or appointment to the Board of Directors of the Bank (or, if later, on the date such Director first becomes an Eligible Director).

“Meeting Fees” shall mean the amounts to which a Director is entitled for attending meetings of (a) the board of directors of the Corporation, (b) the Board of Directors of the Bank, (c) a committee of the board of directors of the Corporation or (d) a committee of the Board of Directors of the Bank.

“Participant” shall mean (a) any Eligible Director who elects to defer Compensation in accordance with Section 3.1 and complies with the requirements of Section 2.1 and (b) any individual who was a participant in the City National Corporation Director Deferred Compensation Plan and had a positive account balance on December 31, 1999; and such Eligible Director or individual shall remain a Participant until all amounts credited to his or her Plan Year Subaccounts under the Plan have been distributed or forfeited.

“Payment Eligibility Date” shall mean the first day of the month following the end of the calendar quarter in which a Participant has a Separation from Service with the Bank for any reason, including by reason of Disability or death, subject to the provisions of Section 3.1(h).

“Plan” shall mean the 2000 City National Bank Director Deferred Compensation Plan set forth herein, now in effect, or as amended from time to time.

“Plan Year” shall mean the 12 consecutive month period beginning on January 1 and ending the following December 31.

“Plan Year Subaccounts” shall mean subaccounts of a Participant’s Deferral Account established to separately account for Compensation deferred (and earnings or losses thereon) for each Plan Year in which a Participant participates in the Plan and for any Rollover Amounts.

“Prior Plan” shall mean the City National Corporation Director Deferred Compensation Plan.

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“Rollover Amount” shall mean the amount determined in accordance with Section 4.2.

“Separation from Service” shall mean the Participant’s “separation from service” as a Director, within the meaning of Section 409A of the Code, as determined by the Committee in accordance with Section 1.409A-1(h) of the Treasury Regulations.

ARTICLE II
PARTICIPATION

2.1Participation.

(a)Generally. An Eligible Director shall become a Participant in the Plan by (i) electing to defer Compensation in accordance with Section 3.1, (ii) if required by the Committee, filing a life insurance application form along with his or her deferral election form, and (iii) satisfying any medical underwriting requirement established by the Committee.

(b)Participants with Split-Dollar Life Insurance Agreements. Notwithstanding the foregoing, unless the Committee provides otherwise, an Eligible Director who has entered into a Split-Dollar Life Insurance Agreement with the Corporation must execute an “Agreement for Transfer of Policy and Termination of Split-Dollar Life Insurance Agreement” in order to defer Compensation under this Plan.

ARTICLE III
DEFERRAL ELECTIONS

3.1Elections to Defer Compensation.

(a)Initial Election Period. Subject to Section 2.1, each Eligible Director may elect to defer Compensation by filing with the Bank or its agent an election that conforms to the requirements of this Section 3.1, using a form, method, or process approved by the Committee, no later than the last day of his or her Initial Election Period, subject to Section 3.1(d).  Such election shall be irrevocable as of the date it is filed with the Bank or its agent. An Eligible Director who ceases to be a member of the Board of Directors of the Bank (or otherwise ceases to be an Eligible Director) and is subsequently re-elected, reappointed or reinstated as an Eligible

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Director shall not be entitled to make an election pursuant to this Section 3.1(a) as a result of such re-election, reappointment or reinstatement.

(b)General Rule. The amount of Compensation which an Eligible Director may elect to defer is as follows, subject to the limitations in Section 3.1(d), if applicable:

(i)Any percentage or dollar amount of Annual Retainer up to 100%; and/or

(ii)Any percentage or dollar amount of Meeting Fees up to 100%; and/or

(iii)100% of the Annual Award; provided that any Annual Award which is deferred must be designated to be invested in the CNC Stock Fund (as defined in Section 3.2(e)).

(c)Minimum Deferrals. [Intentionally Omitted.]

(d)Effect of Initial Election. The amount of Meeting Fees deferred pursuant to an election made during the Initial Election Period shall not exceed the amount of Meeting Fees paid with respect to services performed in the Plan Year in which such initial election is made on or after the date on which the election is filed with the Bank or its agent.  No Annual Award or Annual Retainer (or portion thereof) shall be deferred for the Plan Year in which such initial election is made unless the election is filed on or before the date of such Eligible Director’s initial election or appointment to the Board of Directors.

(e)Elections other than Elections during the Initial Election Period. Subject to the requirements of Section 2.1, any Eligible Director may participate for any Plan Year by filing an election, using a form, method, or process approved by the Committee, to defer Compensation as described in paragraph (b) above. An election to defer Compensation for a Plan Year must be filed on or before December 1 of the preceding Plan Year, or such other date as the Bank establishes, which date shall be no later than December 31 of the preceding Plan Year, and will be effective for Compensation earned on or after January 1 of the Plan Year for which the election applies.

(f)Duration of Deferral Election. Any election made under this Plan to defer Compensation shall apply only to Compensation payable with respect to services performed

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during the Plan Year for which the election is made. For each subsequent Plan Year, an Eligible Director may make a new election, subject to the limitations set forth in this Section 3.1, to defer a percentage of his or her Compensation.

(g)In-Service Distributions. At the time of making an election to defer Compensation for a Plan Year (other than Plan Years 2008 or later) pursuant to this Section 3.1, a Participant may elect (using a form, method, or process approved by the Committee) to receive an in-service distribution of the amount deferred under such election, together with earnings or losses credited with respect to such amounts pursuant to Article IV, in a lump sum payment or in annual installments over 2, 3, 4, or 5 years, paid or commencing within 90 days following any January 1 that occurs after the second anniversary of the last day of the Plan Year in which the amount deferred was earned. In addition, each Participant who has a Rollover Amount credited to his or her Account under Section 4.2 shall be permitted to elect, on or before December 31, 1999, to receive an in-service distribution of such Rollover Amount, together with earnings or losses, within 90 days following January 1 of 2003 or any later year. A Participant who has timely elected an in-service distribution in accordance with this Section 3.1(g) may subsequently elect to defer the year of any such in-service distribution or to change the form of an in-service distribution by filing an election with the Bank or its agent, using a form, method, or process approved by the Committee, at least one year prior to the first day of the previously elected in-service distribution year; provided that pursuant to such election, the in-service distribution is deferred to the 90-day period following any subsequent January 1 that is at least five years from the prior scheduled distribution date. The election to defer the year of an in-service distribution may be made no more than twice. If a Participant elects an in-service distribution but fails to specify the form of payment, the Participant will be deemed to have elected a lump sum payment.  If a Participant fails to make a distribution election under this Section 3.1(g) for a Plan Year, or fails to specify the year in which the in-service distribution shall be made, the Compensation deferred for that Plan Year shall be distributed as set forth in Section 6.1(b).  No election under this Section 3.1(g) may be made for Plan Years 2008 or later.

(h)Elections for Alternative Form of Distribution. At the time of making an election to defer Compensation for a Plan Year pursuant to this Section 3.1, a Participant may elect (using a form, method, or process approved by the Committee) an alternative form

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of benefit for distribution of the Compensation deferred for that Plan Year pursuant to Section 6.1(b), which may be either a lump sum payment or payment in 20, 40, or 60 substantially equal quarterly installments.  If the Participant does not elect a form of benefit, the Participant will be deemed to have elected a lump sum payment. Subject to the provisions of Section 6.1(b), this election will apply to the Compensation deferred for such Plan Year if (x) the Participant does not elect an in-service distribution with respect to such deferred Compensation pursuant to Section 3.1(g), or (y) the Participant elects an in-service distribution but the Participant’s Separation from Service occurs prior to commencement of such in-service distribution.  A Participant may make a one-time election to change the form of benefit elected pursuant to this Section 3.1(h) by filing a written election with the Bank or its agent, using a form, method, or process by the Committee, provided that any such election shall not be effective for 12 months and that such election shall also change the Payment Eligibility Date to the date that is five years following the original Payment Eligibility Date.  No change to an election made under this Section 3.1(h) shall be permitted except as expressly permitted herein.

(i)Effect of Elections. Each distribution election under Section 3.1(g) and Section 3.1(h) shall apply only to the Compensation deferred for the Plan Year for which the election is made. For each subsequent Plan Year a Participant may make a separate election. Any election filed pursuant to this Section 3.1 shall be irrevocable for any one Plan Year except to the extent provided in Section 3.1(g), Section 3.1(h), Section 6.1, Section 6.2 and Section 6.3.

3.2Investment Elections.

(a)At the time of making each deferral election described in Section 3.1, the Participant shall designate, using a form, method, or process approved by the Committee, which Fund or Funds the Compensation deferred pursuant to such election will be deemed to be invested in for purposes of determining the amount of earnings or losses to be credited or debited to his or her Plan Year Subaccount that the Committee establishes pursuant to Section 4.1 to account for such deferred Compensation.

(b)In making the designation pursuant to this Section 3.2, the Participant must specify, in multiples of one (1), the percentage of his or her corresponding Plan Year Subaccount

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that shall be deemed to be invested in one or more Funds. A Participant may change the designation made under this Section 3.2 with respect to any or all of his or her Plan Year Subaccounts by filing an election, using a form, method, or process approved by the Committee. If a Participant fails to make an investment election for Compensation deferred in any Plan Year, the Participant’s most recent investment election for future deferrals shall apply to the Plan Year Subaccount established for such Plan Year and each Plan Year Subaccount established with respect to any subsequent Plan Year Subaccount(s) until the Participant files an election with the Bank or its agent in accordance with the provisions of this Section 3.2 with respect to such Plan Year Subaccount(s). Notwithstanding the foregoing, if a Participant has not previously elected a Fund under this Section 3.2, he or she shall be deemed to have elected the money market option, or such other Fund that the Committee designates as the default fund for purposes of this Plan.

(c)The Committee shall select from time to time, in its sole discretion, the Funds in which Compensation deferred under this Plan will be deemed to be invested. The Earnings Rate of each Fund shall be used to determine the amount of earnings or losses to be credited or debited to the Participant’s Deferral Account under Article IV. The Bank reserves the right to change the Funds, and to increase or decrease the number of Funds, available as the Funds for purposes of this Plan.

(d)Notwithstanding the Participant’s ability to designate the Funds in which the Plan Year Subaccounts of his or her Deferral Account shall be deemed to be invested, the Bank shall have no obligation to invest any funds in accordance with any Participant’s election. A Participant’s Deferral Account shall merely be a bookkeeping entry on the Bank’s books, and no Participant shall obtain any interest in any of the Funds.

(e)Effective as of January 1, 2008, the “CNC Stock” Fund will be added as a Fund available under the Plan, subject to the following conditions and such other conditions as the Committee which administers the Plan may determine:

(i)A Participant may designate, using a form, method, or process approved by the Committee, a percentage of his or her Plan Year Subaccount for any Plan Year that shall be deemed to be invested in the CNC Stock Fund, subject to the following conditions:

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(A)A Participant must make an election to designate the CNC Stock Fund for the entire Annual Award which the Participant defers for any Plan Year beginning in 2008 or thereafter at the time when the Participant elects to defer Compensation for such Plan Year.

(B)A Participant will only be permitted to make a one-time election in 2007 to designate the CNC Stock Fund for all or specified percentages of his Plan Year Subaccounts for 2007 or earlier years or for Rollover Amounts.

(C)A Participant will not be permitted to designate the CNC Stock Fund for any Annual Retainer or Meeting Fees which are payable in 2008 or thereafter.

(ii)Notwithstanding any other provision of the Plan, a Participant may not subsequently change his or her investment election (or diversify out of the CNC Stock Fund) for any amounts which the Participant has designated to be invested in the CNC Stock Fund.

(iii)Notwithstanding any other provision of the Plan, unless otherwise permitted by the Committee, no in-service distribution election may be made by a Participant for any Plan Year Subaccount if any portion of such Plan Year Subaccount is designated to be invested in the CNC Stock Fund. The portion of any Plan Year Subaccount which is designated to be invested in the CNC Stock Fund will be distributed in a lump sum or installments following the Participant’s Separation from Service as a Director at the same time when other distributions are made from such Plan Year Subaccount pursuant to the distribution elections made by the Participant in accordance with the provisions of the Plan.

(A)A Participant may not designate the CNC Stock Fund for his or her Plan Year Subaccount for 2004 or any earlier year or his or her Rollover Amount for which the Participant has previously elected to receive an in service distribution.

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(B)A Participant may not designate the CNC Stock Fund for his or her Plan Year Subaccount for any Plan Year between 2004 and 2007 for which the Participant has previously elected to receive an in service distribution, unless the Participant makes a new election in 2007 for such Plan Year Subaccount to receive a distribution in a lump sum or installments following the Participant’s Separation from Service as a Director in accordance with the provisions of the Plan.

(iv)The CNC Stock Fund will be measured in number of shares of City National Corporation Common Stock (“CNC Stock”). The number of shares of CNC Stock will be appropriately adjusted, as determined by the Committee, to reflect any stock splits, reverse stock splits, stock dividends, or similar events.

(v)Shares in the CNC Stock Fund do not convey the rights to ownership of shares of CNC Stock and do not have voting rights. The Bank’s obligation with respect to the CNC Stock Fund is unfunded. A Participant will only acquire ownership and voting rights when shares of CNC Stock are actually distributed to the Participant in accordance with the provisions of the Plan.

(vi)All distributions from the CNC Stock Fund will be made solely in CNC Stock, except that any fractional shares will be paid in cash. The number of shares distributed will be reduced to cover all taxes, if any, which are required to be withheld by Bank in respect to distributions of CNC Stock under the Plan.

(vii)All cash dividends which are paid on CNC Stock held in the CNC Stock Fund will not be deemed to be invested in the CNC Stock Fund, but will be credited in cash and will initially be deemed to be invested in the money market option or such other Fund that the Committee designates for this purpose, and thereafter may be reallocated by the Participant among Funds (other than the CNC Stock Fund) as permitted by the Committee.

(viii)All CNC Stock which is distributed to Participants pursuant to this Plan will be distributed under a plan which has been approved by the stockholders of the

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Corporation, if required to comply with any applicable federal or state law or applicable New York Stock Exchange listing standard.

ARTICLE IV
ACCOUNTS

4.1Deferral Account.

The Committee shall establish and maintain a Deferral Account for each Participant under the Plan. The Deferral Account shall be divided into Plan Year Subaccounts to separately account for deferrals made for each Plan Year. A Participant’s Plan Year Subaccounts shall be divided into separate subaccounts (“investment subaccounts”), each of which corresponds to a Fund elected by the Participant pursuant to Section 3.2(a). A Participant’s Plan Year Subaccount for a Plan Year shall be credited as follows:

(a)The Committee shall credit the investment subaccounts of the Plan Year Subaccount of the Participant’s Deferral Account with an amount equal to the Compensation deferred by the Participant for the Plan Year for which the Plan Year Subaccount is established on the day such Compensation would have been paid, in accordance with the Participant’s election under Section 3.2(a); that is, the portion of the Participant’s deferred Compensation that the Participant has elected to be deemed to be invested in a certain Fund shall be credited to the investment subaccount corresponding to that Fund; and

(b)As of the close of each business day, each investment subaccount of a Participant’s Plan Year Subaccount of the Participant’s Deferral Account shall be credited with earnings or losses in an amount determined by multiplying the balance credited to such investment subaccount as of the beginning of the same business day by the Earnings Rate for the corresponding Fund; provided, however, that all cash dividends which are paid on CNC Stock held in the CNC Stock Fund shall be credited in accordance with Section 3.2(e)(vii) on the day such dividends would otherwise be paid.

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4.2Rollovers.

If a Participant was a participant in the Prior Plan, and had a positive account balance on December 31, 1999, that positive account balance, determined as of that date, shall be transferred to the Participant’s Account under this Plan, and shall be governed by the terms and conditions of this Plan and shall be referred to as the “Rollover Amount.” The Participant’s Rollover Amount shall be credited to a separate Plan Year Subaccount. The Participant may make separate distribution and investment elections applicable to such Rollover Amount in accordance with Articles III and VI of this Plan.

ARTICLE V
VESTING

5.1Deferral Account.

A Participant’s Deferral Account shall be 100% vested at all times.

ARTICLE VI
DISTRIBUTIONS

6.1Distribution of Deferred Compensation.

(a)Distribution of the amount credited to each Plan Year Subaccount of the Participant’s Deferral Account that is subject to an in-service distribution election made by the Participant pursuant to Section 3.1(g) shall be made or shall commence within 90 days following January 1 of the year elected by the Participant in the form elected by the Participant, provided that the Participant continues to serve as a Director on January 1 of such year. In the event of the Participant’s Separation from Service for any reason prior to January 1 of a year elected by the Participant for a Plan Year Subaccount pursuant to Section 3.1(g), the Participant’s in-service distribution election for such Plan Year Subaccount shall no longer be effective and all of the amounts credited to such Plan Year Subaccount shall be distributed as set forth in the following subsections of this Section 6.1 in accordance with any applicable election by the Participant. In the event of the Participant’s Separation from Service while receiving an in-service distribution from one or more Plan Year Subaccounts in the form of annual installments, such payments will continue as scheduled.

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(b)When a Participant has a Separation from Service for any reason including Disability or death, the amounts credited to each Plan Year Subaccount that is not then in pay status pursuant to an in-service distribution election shall be distributed to the Participant (or his or her Beneficiary) in accordance with this Section 6.1(b) and the Participant’s elections under Section 3.1(h), as follows:

(i)If the Participant has elected a lump sum payment with respect to a Plan Year Subaccount, such payment will be made within 90 days following the Payment Eligibility Date.

(ii)If the Participant has elected payment in installments with respect to a Plan Year Subaccount, the first installment shall be paid within 90 days following the Payment Eligibility Date, and each subsequent quarterly installment shall be paid within 90 days following the first day of the applicable calendar quarter.

(iii)Notwithstanding anything contained in this Section 6.1(b) to the contrary, in the event that the total aggregate amount credited to a Participant’s Deferral Account is less than $25,000 as of the end of the month preceding the Participant’s Payment Eligibility Date for a Plan Year Subaccount, the amounts credited to such Plan Year Subaccount shall be paid in a cash lump sum payment within 90 days following the Payment Eligibility Date.

(c)The Participant’s Plan Year Subaccounts shall continue to be credited with earnings pursuant to Sections 4.1 and 4.2 of the Plan until all amounts credited to his or her Plan Year Subaccounts under the Plan have been distributed.

(d)In the event that a former Participant dies while receiving installment payments under this Plan, any remaining installments shall be paid to the Participant’s Beneficiary as such installments would have otherwise been due to the Participant.

6.2Nonscheduled In-Service Withdrawals.

No nonscheduled in-service withdrawals are permitted under the Plan.  In the event that a Participant elects a nonscheduled in-service withdrawal with respect to Grandfathered Amounts

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in accordance with the terms of the Plan as in effect immediately prior to January 1, 2009, (a) the Participant shall be ineligible to participate in the Plan during the two Plan Years immediately following the Plan Year in which the withdrawal occurs, and (b) any deferral elections made by the Participant for such Plan Years shall terminate.

6.3Hardship Withdrawals.

Upon written request of a Participant, the Committee may, in its sole discretion, make a lump sum payment to a Participant and/or accelerate the payment of installment payments due to the Participant in order to meet a severe financial hardship to the Participant resulting from (a) a sudden and unexpected illness or accident of the Participant or the Participant’s spouse, beneficiary, or dependent within the meaning of Section 1.409A-3(h)(3) of the Treasury Regulations, (b) loss of the Participant’s property due to casualty or (c) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. However, no payment shall be made under this Section 6.3 to the extent that a hardship is or may be relieved (a) through reimbursement or compensation by insurance or otherwise, (b) by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship or (c) by cessation of deferrals under the Plan effective for the next Plan Year in accordance with Section 1.409A-3(j)(4)(viii) of the Treasury Regulations. The amount of any hardship lump sum payment and/or accelerated amount under this Section 6.3 shall not exceed the lesser of (a) the amount reasonably necessary to meet the immediate financial need created by such hardship or (b) the entire amounts credited to the Participant’s Accounts. The amount of any such payments shall be deducted from the amounts credited to the Participant’s Plan Year Subaccounts in such order and in such proportions as the Committee may determine in its sole discretion. The remaining amounts credited to a Participant’s Plan Year Subaccounts shall be distributed in accordance with the Participant’s elections with respect to such Plan Year Subaccounts.  Any hardship withdrawals under this Section 6.3 shall comply with the requirements of Section 409A of the Code.

6.4Inability to Locate Participant.

In the event that the Committee is unable to locate a Participant or Beneficiary within two years following the Participant’s Payment Eligibility Date, the amounts allocated to the

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Participant’s Deferral Account shall be forfeited. If, after such forfeiture, the Participant or Beneficiary later claims such benefits, such benefits shall be reinstated without interest or earnings, to the extent permitted by Section 409A of the Code.

6.5Change in Control.

A change in control of the Bank or the Corporation shall not accelerate the distribution of amounts credited to Participants’ Deferral Accounts (other than Grandfathered Amounts).

6.6Death Benefit for Certain Participants.

(a)For each Participant who is named in the list attached hereto as Schedule 1, the Bank shall provide life insurance coverage in the amount set forth next to his or her name in Schedule 1, beginning on the date such Participant executes an “Agreement for Transfer of Policy and Termination of Split-Dollar Life Insurance Agreement” and ending on December 31, 2009 (the “Coverage Period”). Such life insurance coverage shall remain in effect throughout the Coverage Period even if the Participant ceases to serve as an Eligible Director.

(b)The Bank shall provide such life insurance coverage by maintaining a life insurance policy (the “Policy”) on the life of each named Participant. Each such Participant shall be entitled to name a beneficiary (which need not be his or her Beneficiary under this Plan) to receive the portion of the death benefit under the Policy that is equal to the amount set forth as his or her death benefit in Schedule 1 (his or her “Death Benefit”). The Participant may make a beneficiary designation or change a beneficiary designation in writing in accordance with procedures established by the Committee. No beneficiary designation will become effective until it is filed in accordance with the Committee’s procedures. If no beneficiary designation is in effect, the Death Benefit shall be paid to the Participant’s Beneficiary under this Plan. If the actual death benefit under the Policy exceeds the Death Benefit, the excess death benefit under the Policy shall be paid to the Bank.

(c)At the end of the Coverage Period, the Bank shall cease to provide the life insurance coverage described herein and the provisions of this Section 6.6 shall terminate and have no further effect.

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ARTICLE VII
ADMINISTRATION

7.1Committee Action.

The Committee shall act at meetings by affirmative vote of a majority of the members of the Committee. Any action permitted to be taken at a meeting may be taken without a meeting if, prior to such action, a written consent to the action is signed by all members of the Committee and such written consent is filed with the minutes of the proceedings of the Committee. A member of the Committee shall not vote or act upon any matter which relates solely to himself or herself as a Participant. The Chairman or any other member or members of the Committee designated by the Chairman may execute any certificate or other written direction on behalf of the Committee.

7.2Powers and Duties of the Committee.

(a)The Committee, on behalf of the Participants and their Beneficiaries, shall enforce the Plan in accordance with its terms, shall be charged with the general administration of the Plan, and shall have all powers necessary to accomplish its purposes, including, but not by way of limitation, the following:

(i)To select the funds or portfolios to be the Funds in accordance with Section 3.2(b) hereof;

(ii)To construe and interpret the terms and provisions of this Plan;

(iii)To compute and certify to the amount and kind of benefits payable to Participants and their Beneficiaries;

(iv)To maintain all records that may be necessary for the administration of the Plan;

(v)To provide for the disclosure of all information and the filing or provision of all reports and statements to Participants, Beneficiaries or governmental agencies as shall be required by law;

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(vi)To make and publish such rules for the regulation of the Plan and procedures for the administration of the Plan as are not inconsistent with the terms hereof; and

(vii)To appoint a plan administrator or any other agent, and to delegate to them such powers and duties in connection with the administration of the Plan as the Committee may from time to time prescribe.

7.3Construction and Interpretation.

The Committee shall have full discretion to construe and interpret the terms and provisions of this Plan, which interpretation or construction shall be final and binding on all parties, including but not limited to the Bank and any Participant or Beneficiary. The Committee shall administer such terms and provisions in a uniform and nondiscriminatory manner and in full accordance with any and all laws applicable to the Plan.

7.4Information.

To enable the Committee to perform its functions, the Bank shall supply full and timely information to the Committee on all matters relating to the Compensation of all Participants, their death or other cause of termination, and such other pertinent facts as the Committee may require.

7.5Compensation, Expenses and Indemnity.

(a)The members of the Committee shall serve without compensation for their services hereunder.

(b)The Committee is authorized at the expense of the Bank to employ such legal counsel as it may deem advisable to assist in the performance of its duties hereunder. Expenses and fees in connection with the administration of the Plan shall be paid by the Bank.

(c)To the extent permitted by applicable state law, the Bank shall indemnify and save harmless the Committee and each member thereof, the Board of Directors and each member thereof, and delegates of the Committee who are employees of the Bank against any and all expenses, liabilities and claims, including legal fees to defend against such liabilities and claims,

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arising out of their discharge in good faith of responsibilities under or incident to the Plan, other than expenses and liabilities arising out of willful misconduct. This indemnity shall not preclude such further indemnities as may be available under insurance purchased by the Corporation or provided by the Bank under any bylaw, agreement or otherwise, as such indemnities are permitted under state law.

7.6Quarterly Statements.

Under procedures established by the Committee, a Participant shall receive a statement with respect to such Participant’s Account as of the last day of each calendar quarter.

7.7Claims Procedure.

(a)Claim. A person who believes that he or she is being denied a benefit to which he or she is entitled under this Plan (hereinafter referred to as “Claimant”) may file a written request for such benefit with the Committee, setting forth his or her claim. The request must be addressed to the Committee at the Bank’s principal place of business.

(b)Claim Decision. Upon receipt of a claim, the Committee shall advise the Claimant that a reply will be forthcoming within ninety (90) days and shall, in fact, deliver such reply within such period. The Committee may, however, extend the reply period for an additional ninety (90) days for special circumstances. If the claim is denied in whole or in part, the Committee shall inform the Claimant in writing, using language calculated to be understood by the Claimant, setting forth: (i) the specified reason or reasons for such denial; (ii) the specific reference to pertinent provisions of this Plan on which such denial is based; (iii) a description of any additional material or information necessary for the Claimant to perfect his or her claim and an explanation why such material or such information is necessary; (iv) appropriate information as to the steps to be taken if the Claimant wishes to submit the claim for review; and (v) the time limits for requesting a review under subsection (c).

(c)Request for Review. Within sixty (60) days after the receipt by the Claimant of the written opinion described above, the Claimant may request in writing that the Committee review the determination. Such request must be addressed to the Committee, at the Bank’s principal place of business. The Claimant or his or her duly authorized representative may, but

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need not, review the pertinent documents and submit issues and comments in writing for consideration by the Committee. If the Claimant does not request a review within such sixty (60) day period, he or she shall be barred and estopped from challenging the original determination.

(d)Review of Decision. Within sixty (60) days after the Committee’s receipt of a request for review, after considering all materials presented by the Claimant, the Committee will inform the Claimant in writing, in a manner calculated to be understood by the Claimant, of its decision setting forth the specific reasons for the decision and containing specific references to the pertinent provisions of this Plan on which the decision is based. If special circumstances require that the sixty (60) day time period be extended, the Committee will so notify the Claimant and will render the decision as soon as possible, but no later than one hundred twenty (120) days after receipt of the request for review.

ARTICLE VIII
MISCELLANEOUS

8.1Unsecured General Creditor.

Participants and their Beneficiaries, heirs, successors, and assigns shall have no legal or equitable rights, claims, or interest in any specific property or assets of the Bank. No assets of the Bank shall be held under any trust, or held in any way as collateral security for the fulfilling of the obligations of the Bank under this Plan, although the Bank may establish one or more grantor trusts subject to Code Section 671 to facilitate the payment of benefits hereunder. Any and all of the Bank’s assets shall be, and remain, the general unpledged, unrestricted assets of the Bank. The Bank’s obligation under the Plan shall be merely that of an unfunded and unsecured promise of the Bank to pay money in the future, and the rights of the Participants and Beneficiaries shall be no greater than those of unsecured general creditors. It is the intention of the Bank that this Plan and any trust established to facilitate the payment of benefits hereunder be unfunded for purposes of the Code and for purposes of Title I of ERISA.

8.2Restriction Against Assignment.

The Bank shall pay all amounts payable hereunder only to the person or persons designated by the Plan and not to any other person or corporation. No part of a Participant’s

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Account shall be liable for the debts, contracts, or engagements of any Participant, his or her Beneficiary, or successors in interest, nor shall a Participant’s Account be subject to execution by levy, attachment, or garnishment or by any other legal or equitable proceeding, nor shall any such person have any right to alienate, anticipate, sell, transfer, commute, pledge, encumber, or assign any benefits or payments hereunder in any manner whatsoever. If any Participant, Beneficiary or successor in interest is adjudicated bankrupt or purports to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge any distribution or payment from the Plan, voluntarily or involuntarily, the Committee, in its discretion, may cancel such distribution or payment (or any part thereof) to or for the benefit of such Participant, Beneficiary or successor in interest in such manner as the Committee shall direct.

8.3Withholding.

There shall be deducted from each payment made under the Plan or any other compensation payable to the Participant (or Beneficiary) any taxes which are required to be withheld by the Bank in respect to such payment. The Bank shall have the right to reduce any payment (or other compensation) by the amount of cash sufficient to provide the amount of said taxes.

8.4Amendment, Modification, Suspension or Termination.

The Bank may amend, modify, suspend or terminate the Plan in whole or in part, except that no amendment, modification, suspension or termination shall have any retroactive effect to reduce any amounts allocated to a Participant’s Account. In the event that this Plan is terminated, the distribution of the amounts credited to a Participant’s Deferral Account shall not be accelerated but shall be paid at such time and in such manner determined under the terms of the Plan immediately prior to termination as if the Plan had not been terminated. (Neither the Policies themselves nor the death benefit described in Section 6.6 shall be treated as allocated to Accounts.)  Notwithstanding the foregoing, no amendment of the Plan shall apply to Grandfathered Amounts unless the amendment specifically provides that it applies to such amounts.

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8.5Governing Law.

This Plan shall be construed, governed and administered in accordance with the laws of the State of California.

8.6Receipt or Release.

Any payment to a Participant or the Participant’s Beneficiary in accordance with the provisions of the Plan shall, to the extent thereof, be in full satisfaction of all claims against the Committee, the Corporation and the Bank. The Committee may require such Participant or Beneficiary, as a condition precedent to such payment, to execute a receipt and release to such effect within such time as may be specified by the Committee in accordance with applicable law, but in any event no later than 60 days after the first date on which such payment could otherwise be made pursuant to the terms of the Plan.

8.7Payments on Behalf of Persons Under Incapacity.

In the event that any amount becomes payable under the Plan to a person who, in the sole judgment of the Committee, is considered by reason of physical or mental condition to be unable to give a valid receipt therefor, the Committee may direct that such payment be made to any person found by the Committee, in its sole judgment, to have assumed the care of such person. Any payment made pursuant to such determination shall constitute a full release and discharge of the Committee, the Corporation and the Bank.

8.8Headings, etc. Not Part of Agreement.

Headings and subheadings in this Plan are inserted for convenience of reference only and are not to be considered in the construction of the provisions hereof

8.9Section 409A of the Code.

(a)This Plan shall be interpreted in accordance with Section 409A of the Code and the Treasury Regulations and other Department of Treasury guidance issued thereunder.  Notwithstanding any provision of the Plan to the contrary, in the event that the Committee determines that any payment or benefit under the Plan may be subject to Section 409A of the Code, the Committee may adopt such amendments to the Plan or adopt other policies and

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procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Committee determines are necessary or appropriate to comply with the requirements of Section 409A of the Code.

(b)Each payment or series of installments under this Plan for any particular Plan Year and Plan Year Subaccount shall be considered a single payment for purposes of Section 409A.

(c)If, on the date of a Participant’s Separation from Service, (i) such Participant is a “specified employee” within the meaning of Section 409A of the Code, as determined annually by the Bank in accordance with Section 1.409A-1(i) of the Treasury Regulations (using the methodology for identifying Key Employees under Paragraph A.2 of Article VIII of the City National Corporation Profit Sharing Plan, as amended from time to time, to the extent permitted by Section 409A of the Code), and (ii) the Committee shall make a good-faith determination that a payment or benefit under the Plan constitutes “deferred compensation” within the meaning of Section 409A of the Code the payment (or, in the case of an installment payment, the commencement) of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in order to preserve the tax treatment intended for such payment or to avoid additional tax, interest, or penalties under Section 409A of the Code, then the Bank shall not pay such amount or commence payment of such installments on the otherwise scheduled payment date, but shall instead pay such amount or commence payment of such installments within the calendar month following the last day of such six-month period and, in the case of an installment payment, shall delay each subsequent installment by six months from the date such installment would otherwise have been paid.  Such amount shall be paid without additional interest (other than any earnings or losses credited to the Participant’s Deferral Account pursuant to Section 4.1(b)), unless otherwise determined by the Committee, in its sole discretion, or as otherwise provided in any applicable agreement between the Bank and the Participant.

(d)A Participant shall be solely responsible and liable for the satisfaction of all taxes, interest, and penalties that may be imposed on such Participant or for such Participant’s account in connection with any payment or benefit under the Plan (including any taxes, interest, and penalties under Section 409A or any corresponding provision of state, local, or foreign law), and

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the Bank shall have no obligation to indemnify or otherwise hold such Participant harmless from any or all of such taxes, interest, or penalties.

(e)If any portion of a Participant’s Deferral Account is required to be included in income by the Participant prior to receipt due to a failure of this Plan to comply with the requirements of Section 409A of the Code, the Committee may determine that such Participant shall receive a distribution from the Plan in an amount equal to the lesser of (i) the portion of his or her Deferral Account required to be included in income as a result of the failure of the Plan to comply with the requirements of Section 409A of the Code or (ii) the unpaid vested portion of his or her Deferral Account, as permitted under Section 1.409A-3(j)(4)(vii) of the Treasury Regulations.

8.10Domestic Relations Orders.

If necessary to comply with a domestic relations order, as defined in Section 414(p)(1)(B) of the Code, the Committee shall have the right to make a distribution from the Participant’s Deferral Account to (or establish an account under the Plan for the benefit of) an individual other than the Participant and to accelerate the time of payment to the extent necessary to comply with the domestic relations order, as permitted under Section 409A of the Code and Section 1.409A-3(j)(4)(ii) of the Treasury Regulations.

IN WITNESS WHEREOF, the Bank has caused its duly authorized officer to execute this document this     th day of December, 2008.

CITY NATIONAL BANK
By:
	Patti Fischer
Its:	Senior Vice President
	Human Resources

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EX-10.44

Exhibit 10.44

1st, 3rd, 4th, 6th, 9th, 10th,

20th, & 21st

FLOORS

THIRD LEASE ADDENDUM

This THIRD LEASE ADDENDUM (“Addendum”) is made and entered into as of November 1, 2002 (the “Effective Date”) by and between CITINATIONAL-BUCKEYE BUILDING CO., a California limited partnership (“Landlord”), and CITY NATIONAL BANK, a national banking association (“Tenant”), to amend and supplement that certain Office Building Lease between Landlord and Tenant, dated as of September 30, 1996, as amended by that certain First Lease Addendum dated as of May 1, 1998, and by that certain Second Lease Addendum dated as of November 13, 1998 (collectively, the “Lease”).

1.Terms. All capitalized terms used in this Addendum that are not otherwise defined herein shall have the same meanings as in the Lease.

2.Amendment of Paragraph 1 of the Lease.  Notwithstanding anything to the contrary contained in Paragraph 1 of the Lease, Tenant shall be entitled to operate a bank branch in Suite 100 located on the Ground Floor.

3.Amendment of Paragraph 6 of the Lease.  Notwithstanding anything to the contrary contained in Paragraph 6 of the Lease, Tenant shall be entitled to one hundred (100) automobile parking permits per month notwithstanding how many parking permits Tenant has used at anytime during the Term.

4.Amendments of Paragraph 7 of the Lease.  (a) The first sentence of Paragraph 7 is hereby amended to read as follows:

“The leased premises shall not be altered, repaired or changed without the written consent of Landlord first had and obtained, except that Tenant shall have the right to perform non-structural improvements of the leased premises which do not affect the Building systems (as hereinafter defined) or substantially alter the layout of the leased premises up to a total expenditure which does not exceed the sum of $50,000 for any or all of such improvements within any twelve (12) month period, without Landlord’s prior written consent.”

(b) Notwithstanding anything to the contrary contained in Paragraph 7 of the Lease, in no event shall Landlord require any completion bond in connection with any Tenant improvements, alterations or repairs and in no event shall the administrative fee for Landlord’s administration of Tenant work under Paragraph 7 exceed 10% of the contract sum.

(c) Notwithstanding anything to the contrary contained in Paragraph 7 of the Lease, at the expiration of the terms of the Lease, Tenant shall not be obligated to remove any alterations made to any porting of the leased premises including, without limitation, any bank vault, and/or escalator installed in any portion of the leased premises.

5.Amendment of Paragraph 10 of the Lease.  The second sentence of Paragraph 10 of the Lease is hereby amended to read as follows:

“Notice shall be deemed effective upon receipt of personal delivery or three (3) days after deposit in any public depository of the United States mail or one (1) business day after delivery to an overnight courier service.”

6.Amendment of Paragraph 11 of the Lease.  Paragraph 11 of the Lease is hereby amended by adding the following:

“Landlord shall procure and obtain comprehensive public liability insurance naming Tenant as an additional insured in the minimum amount of $1,000,000 combined single limit.  In addition, Landlord shall procure and maintain 100% replacement cost insurance for the Building.”

7.Amendment of Paragraph 12 of the Lease.  Notwithstanding anything to the contrary contained in Paragraph 12 of the Lease, Landlord shall not change the address and/or name of the Building without sixty (60) days prior notice to Tenant and Tenant’s approval which shall not be unreasonably withheld, conditioned or delayed.

8.Amendment of Paragraph 13 of the Lease.  Paragraph 13 of the Lease is hereby amended in its entirety to read as follows:

“If said Building shall be totally destroyed, this Lease shall thereupon terminate.  If said Building or the leased premises shall be damaged by fire, earthquake or any other cause without fault or neglect of Tenant, so that the leased premises become untenable, then, if the leased premises cannot be made tenantable within one hundred twenty (120) working days after the date of such damage, this Lease may be terminated by Tenant; in the event the leased premises cannot be made tenantable within one hundred eighty (180) days after the date of such damage, this Lease may be terminated by either party.  In any event, if the leased premises is rendered partially and permanently untenantable by fire, earthquake or other caused without the fault or neglect of Tenant, the monthly rental shall be adjusted in the portion that the rental value of the untenantable portion of the leased premises bears to the rental value of the whole thereof.”

9.Amendment of Paragraph 22 of the Lease.  Notwithstanding anything to the contrary contained in the Lease, any subordination by Tenant to any lienholder affecting the leased premises shall be contingent upon Tenant receiving an acceptable non-disturbance agreement.

10.Amendment of Paragraph 29 of the Lease.  Paragraph 29A of the Lease is hereby amended in its entirety to read as follows:

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“It shall, at Landlord’s option, be deemed at breach of this Lease if (1) the Tenant defaults (a) in the making of any payment of money pursuant to this Lease within five (5) days after written notice thereof is given by Landlord to Tenant, or (b) in pursuing any other term, covenant, condition, provision of this Lease if said default under this Paragraph 29 continues to exist at the expiration of thirty (30) business days after notice thereof given by Landlord to Tenant, or (2) or Tenant shall default with respect to any other lease between (a) Landlord and Tenant or (b) any parent company or subsidiary company or affiliate or agent of Landlord and Tenant.”

11.Amendment of Paragraph 41 of the Lease.  Paragraph 41 of the Lease is hereby amended in its entirety to read as follows:

“During the Term of this Lease and any extensions thereof, so long as Tenant occupies at least 60,000 square feet of space within the Building, Tenant shall have the exclusive right to maintain the existing signs on the top of the Building exterior.  Notwithstanding the foregoing, Tenant shall have the right at any time to remove its existing signs on the top of the Building so long as it repairs any damage to the Building occasioned by such removal.  Moreover, Tenant shall have the right to change its top of the building signage by changing the lettering and/or logo at any time without the prior approval of Landlord.  Tenant shall be responsible for all expenses relating to the operation and maintenance of the signs, including but not limited to utilities, cleaning, repairs, permits, insurance, taxes and for any damage to the Building occasioned by the signs.  Upon the expiration or termination of this Lease, Landlord shall have the right and option, exercisable by written notice to Tenant, to require Tenant at its sole cost to remove the signs and repair any damage to the Building occasioned by such installation or removal and restore the Building to original condition less normal wear and tear.”

12.Amendment of Paragraph 43 of the Lease.  The first sentence of Paragraph 43 C of the Lease is hereby amended to read as follows:

“That Tenant shall pay as rent during the extended term the fair market rental value which shall be deemed to be the rental rate then offered to prospective tenants for new leases as of the date of commencement of the extended term for comparable premises in comparable buildings is downtown Los Angeles.”

13.Additional Paragraph 44 of the Lease.  The Lease is hereby amended to add the following as a new Paragraph 44:

“Landlord agrees to indemnify, protect, defend and hold Tenant and its agents, employees, invitees and representatives, free and

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harmless from and against any and all losses, damages, liabilities, judgments, costs, claims, expenses, penalties, fines and fees arising out of, relating to, or involving the storage or use of hazardous substances on the Property (i) by Landlord or (ii) by other tenants of the Building of which Landlord has actual notice and which Landlord fails to cause such other tenants to abate within a reasonable time.  Further, if a release of hazardous substances occurs in the Building due to the acts of Landlord, or other tenants of the Building which release is not abated within a reasonable time, then in addition to its rights under the foregoing indemnity, Tenant shall have the right to terminate any or all of its Leases for space in the Building upon sixty (60) days’ notice to Landlord without penalty or liability of any kind, and in such event Tenant shall not have to pay any early termination fee presently provided in the Leases.  Provided, however, the foregoing right of termination shall apply only if and to the extent that (i) Landlord has actual notice of the hazardous substance release and Landlord fails to cause an abatement thereof to occur within a reasonable time, and (ii) the release materially interferes with the continued occupation of the leased space by Tenant, its employees and its customers.”

14.Additional Paragraph 45 to the Lease.  The Lease is hereby amended to add the following as a new paragraph 45.

“Landlord shall not lease any space in the Building to the other tenants for purposes other than general office uses on the first 10 floors without Tenant’s prior written approval which shall not be unreasonably withheld or delayed.  In the event Landlord breaches its agreement to limit the use of the other tenants in the Building in accord with the restrictions outlined above, Tenant shall have the right at any time to terminate this Lease it has with Landlord upon sixty (60) days written notice without penalty or the payment of any termination fee, which right shall not be deemed waived by the failure of Tenant to exercise such right for any time period after such right arises.”

15.Additional Paragraph 46 to the Lease.  The Lease is hereby amended to add the following as a new paragraph 46.

“Landlord shall at all times operate, repair and maintain the Building and the parking garage serving the Building and shall provide services including janitorial, utilities, heating, ventilation and air conditioning in a manner consistent with and comparable to those being provided by owners of other first-class buildings of comparable size and age to the Building in downtown Los Angeles.”

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16.No Other Modifications.  All prior agreements, understandings, and discussions with respect to the subject matter set forth in this Addendum are hereby superseded by this Addendum.  Except as modified by the terms of this Addendum, all provisions of the Lease shall remain unchanged and are in full force and effect, and shall continue to be binding on the parties hereto.

IN WITNESS WHEREOF, Landlord and Tenant have entered into this Addendum as of Effective Date.

TENANT:	LANDLORD:
CITY NATIONAL BANK,	CITINATIONAL-BUCKEYE BUILDING CO.,
a national banking association	a California limited partnership
	By: Olive-Sixth Buckeye Co.,
	its general partner

By:	/s/ [ILLEGIBLE]			By:	/s/ Bram Goldsmith
Name:			[ILLEGIBLE]		Bram Goldsmith
Title:		[ILLEGIBLE]			General Partner

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Office Building Lease

This Lease, made and executed as of the 30th day of September, 1996, between: - CITINATIONAL-BUCKEYE BUILDING CO., a California limited partnership, 9100 Wilshire Boulevard, Suite 404, Beverly Hills, California 90212, hereinafter designated the LANDLORD, and CITY NATIONAL BANK, a national banking association, 400 North Roxbury Drive, Beverly Hills, California 90210, hereinafter designated the TENANT, consists of the following agreements:

1.  DEMISED PREMISES, USE AND TERM, EARLY OCCUPANCY.  For and in consideration of the covenants hereinafter mentioned, the Landlord leases to the Tenant and the Tenant hereby leases from the Landlord the premises consisting of Suite No. 100 located on the Ground Floor and the entire 2nd, 3rd, 6th, 9th and 20th Floors (as per attached plans, marked Exhibit “A”) in the CITY NATIONAL BANK BUILDING, 606 [ILLEGIBLE] Olive Street, City of Los Angeles, California, 90014 to be used by said Tenant as and for administrative offices for a bank or for general office purposes and for no other purpose, for the term of ten (10) years, commencing on the 1st day of January 1997, and ending on the 31st day of December 2006.  Landlord agrees that it shall not lease any other Premises in the Building to any other bank or savings and loan association for use as a home office bank or branch bank serving the general public without the prior consent of Tenant, which consent shall not be unreasonably withheld.  Landlord agrees that it shall not lease any other Premises on the Ground Floor of the Building to any other bank or savings and loan association for use as a home office bank or branch bank serving the general public.

On September 29, 1996, Landlord completed the construction and build-out of the 6th Floor premises in accordance with Tenant’s plans and specifications, and Tenant accepted and moved into the premises prior to the scheduled commencement date of this Lease on September 30, 1996.  Landlord and Tenant agree that Tenant’s occupancy from September 30, 1996 through December 31, 1996, and thereafter for the full ten (10) year Lease Term through December 31, 2006, is under the terms and conditions of this Lease.

On November 15, 1996, Landlord completed the construction and build-out of the 3rd Floor premises in accordance with Tenant’s plans and specifications and Tenant accepted and moved into the premises prior to the scheduled commencement date of this Lease on November 16, 1996.  Landlord and Tenant agree that Tenant’s occupancy from November 16, 1996 through December 31, 1996, and thereafter for thereafter for the full ten (10) year Lease Term through December 31, 2006 is under the terms and conditions of this Lease.

2.  RENT. The Tenant agrees to pay to the Landlord as rent for said leased premises, monthly installments, as follows:

From September 30, 1996 through November 15, 1996	$	13,712.00	per month
From November 16, 1996 through December 31, 1996	$	25,683.00	per month
From January 1, 1997 through December 31, 2001	$	80,456.00	per month
From January 1, 2002 through December 31, 2006	$	88,526.00	per month

Each installment shall be payable in advance on the 1st day of each and every calendar month during the term hereof, commencing on September 30, 1996, in lawful money of the United States of America, which the Tenant agrees to pay to Landlord without deduction or offset, prior notice or demand at the office of the building or such places as the LANDLORD may designate.  Said rent is subject to increases as provide in Articles 20, 36 and as otherwise hereinafter provided.  In the event the actual commencement date of this lease should fall on other than the 1st day of a calendar month, then the rental for the first and last month of the lease term will be prorated on a calendar month basis.  Parking charges are payable as additional rent.

3.  SUBLEASE AND ASSIGNMENT. Neither Tenant, nor Tenant’s legal representatives or successors shall mortgage, encumber, assign or transfer this lease or sublease, or use or occupy or permit the demised premises or any part thereof to be used or occupied by others, without the prior written consent of Landlord in each instance, which consent shall not be unreasonably withheld or delayed in accordance with the express terms and conditions of this Articles.  Any such mortgage, encumbrance, sublease or assignment or permission without such consent shall be voidable, at the option of Landlord and at the option of Landlord shall terminate this lease.  If the demised premises or any part thereof be occupied by any party other than Tenant, without Landlord’s consent.  Landlord may at its option, collect rent from the occupant and apply the net amount collected to the rent herein reserved but no such occupancy or collection shall be deemed a waiver of the conditions of this Article or the acceptance of the occupant as Assignee or Subtenant or a release of Tenant from the further performance by Tenant of the obligations on the part of Tenant under this lease.

No sublease or assignment may become effective unless and until Tenant has given Landlord at least thirty (30) days prior written notice of such proposed bonafide sublease or assignment, such notice to be received by Landlord at least thirty (30) days prior to the proposed commencement date of such proposed sublease or assignment.  Said notice shall state and include the following: the name of the proposed transferee; the status of the proposed transferee either as, an individual, partnership, corporation or the like: the present business address of the proposed transferee; a present financial statement of the proposed transferee; the stated use or purpose and business to be conducted under the proposed sublease or assignment; the proposed commencement and termination date of such proposed sublease or assignment: and whether all or portion of the leased premises is proposed to be subleased under such proposed sublease.

Tenant may sublease or assign all or a portion of the demised premises only upon the obtaining of Landlord’s written consent and subject to the following express conditions: A. That Tenant does not sublease or assign to more than a reasonable number of transferees which number shall be subject to Landlord’s approval; B. That each transferee shall be subject to the prior written approval of Landlord which approval shall not be unreasonably withheld, conditioned or delayed, but without limiting the generality of the foregoing, it shall be reasonable for Landlord to deny such approval if: (1) The use to be made of the demised premises by the proposed transferee is (a) not generally consistent with the character and nature of all other tenancies in the Building or with Landlord’s leasing policy, or (b) a use which conflicts with any so called “exclusive” then in favor of another tenant of the Building or of any of Landlord’s other Buildings which are in the same complex as the Building, or (c) any use which is the same as that stated in any percentage lease to another tenant of the Building or any of Landlord’s other Buildings which are in the same complex as the Building or (d) a use which would be prohibited by any other portion of

this lease (including but not limited to any rules and regulations then in effect); or (2) The character, moral stability, reputation and financial responsibility of the proposed transferee is not reasonably satisfactory to Landlord or in any event not at least equal to those which were possessed by Tenant as of the date of execution of this lease; C. That in no event shall the term of such sublease or assignment be for a longer period than the unexpired term of this lease; D. That each sublease or assignment shall expressly provide that it is subject and subordinate to this lease; E. That Tenant shall pay to Landlord, Landlord’s then standard processing fee, which as of the date of execution of this Lease is currently the sum of $1,000.00; F. That the proposed transferee shall execute an agreement on Landlord’s then standard form pursuant to which it shall agree to perform faithfully and be bound by all of the terms, covenants, conditions, provisions and agreements of this lease for the period covered by the sublease or assignment to the extent of the space subleased; G. That an executed duplicate original of each sublease or assignment and assumption agreement in a form acceptable to Landlord, together with all sums due, shall be delivered to Landlord within five (5) days after the execution thereof and any such sublease or assignment shall not be binding upon Landlord until the delivery of the foregoing to Landlord and the execution and delivery of Landlord’s consent thereto and; H. That Landlord shall have the right upon written demand to require the transferee to pay the rent under the sublease or assignment directly to the Landlord and/or to require Tenant to pay to Landlord a sum equal to (i) fifty per cent (50%) of any rent or other consideration paid to Tenant by any transferee which is in excess of the rent then being paid by Tenant to Landlord (to the extent of, and as apportionable to space sought to be subleased) pursuant to the terms of this lease, after reduction for the reasonable and necessary direct costs actually incurred by Tenant to obtain the sublease or assignment such as e.g., any brokerage fee and remodelling costs, but with no reduction for any indirect costs, such as e.g., rent and expenses paid by Tenant while the space sought to be subleased or assigned is vacant, and (ii) fifty per cent (50%) of any other profit or gain realized by Tenant from any such subleasing.  All sums payable hereunder by Tenant shall be paid to landlord as additional rent immediately upon receipt thereof by Tenant.  Any such rent, profit, gain or other consideration, or sum equal to same, as set forth herein, not so paid to Landlord as herein required, shall be and is deemed to be held and retained by Tenant in trust for the sole benefit of Landlord, and, whether actually held or retained by Tenant or not, shall be and is deemed to be held and retained by Tenant in trust for the sole benefit of Landlord, and whether actually held or retained by Tenant or not, shall be chargeable to Tenant and payable to Landlord upon demand.  Any failure or refusal by Tenant to pay Landlord same shall constitute a default and material breach of the terms, covenants and conditions of this lease subjecting Tenant to all the rights and remedies of Landlord under this lease and applicable law.

The consent by Landlord to a sublease or assignment shall not in any way be construed to relieve Tenant or the transferee from obtaining the express consent in writing of Landlord to any further transfer.  Any further transfer shall require the written consent of Tenant and any previous transferee except that Tenant and any transferee hereunder expressly waive their right to consent to any further transfer of the premises on their behalf by Landlord.  The consent by Landlord to a sublease or assignment shall not in any way be construed to release Tenant from any liability whether past, present or future under this lease or to release Tenant from any liability under this lease because of Landlord’s failure to give notice of default under or in respect to any of the terms, covenants, conditions, provisions or agreements of this lease.  Notwithstanding the consent of Landlord to an assignment or sublease, Tenant shall remain liable for payment of all bills rendered by Landlord for the rent and other charges incurred by the transferee for services and materials supplied to the demised premises.  If Tenant is a corporation which, under the then current guidelines published by the Commissioner or Corporations of the State of California, is not deemed a public corporation, or if Tenant is an unincorporated association or a partnership, the transfer, assignment, or hypothecation of any stock or interest in such corporation, association or partnership in excess of twenty-five (25%) percent shall be deemed a proposed transfer within the meaning of this Article, including the requirement of obtaining Landlord’s prior written consent.  Landlord hereby consents to the assignment, subletting, or transfer of this lease by Tenant to any corporation resulting from a consolidation, or to the surviving corporation in case of a merger, to which consolidation or merger Tenant shall be a party, or to any bank acquiring all or substantially all of the assets of Tenant, or to any corporation resulting from a reorganization of Tenant.

4.  EXPIRATION.   If Tenant shall hold-over after the expiration of the lease term with the written consent of Landlord, such holding shall be construed to be a tenancy only from month-to-to-month, but otherwise in accordance with the terms and conditions hereof insofar as they are applicable, but Tenant shall pay the rate Landlord is then offering to prospective tenants for the herein demised premises for such further time as Tenant may hold the same; but nothing in this Article shall be construed as consent by Landlord to the occupancy or possession of the demised premises by Tenant after the expiration of the term hereof.  If Tenant holds over after the termination of this lease without express written consent of the Landlord, Tenant shall pay to Landlord rent at the rate landlord is then offering to prospective tenants for the herein demised premises (but in no event less than two times the monthly rental which was payable for the last month of the lease term), plus sums payable under Article 20 and other sums payable as rent under this lease for the period during which Tenant retains possession of the premises.  Nothing herein shall be construed as a waiver of any of the Landlord’s rights or remedies to recover possession of the demised premises.  Tenant shall be liable to Landlord for any and all reasonably related damages suffered by Landlord including but not limited to any damages to the demised premises and any lost rentals, profits or leases suffered because of Tenant’s holdover of the premises without the written consent of the Landlord.  This lease shall terminate on the date set forth without the necessity of notice from either party.

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6.  AUTOMOBILE PARKING.   A. Invitee Parking. Automobile parking subject to availability, shall be extended to Tenant’s invitees, in common with the invitees of other tenants, at reasonable parking rates and upon other conditions established by Landlord from time to time in the parking area where designated by Landlord.  During the first five (5) years of the initial Lease Term, Landlord shall issue transient parking validations to Tenant allowing its retail banking customers and invitees to park on a transient basis at 80% of the then current posted validation rate.  As of the date of execution of this Lease, the current posted validation rate is $2.40 for each 20 minutes or portion thereof.  After the first five (5) years, Tenant shall pay the full amount of the then current

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posted validation rate for transient parking [ILLEGIBLE]. Landlord reserves the sole right and option as to [ILLEGIBLE] or not an attendant will be furnished for such automobile parking area or areas.  If no attendant is furnished, Landlord will provide suitable designation of the parking area to Tenant.  This right to park will be solely for the accommodation of the Tenant and Tenant expressly agrees that Landlord assumes no responsibility of any kind whatsoever in reference to such automobile parking areas or the use thereof by the Tenant, its employees or invitees.

B.  Employee Parking.  Commencing January 1, 1997 and on the 1st day of each month thereafter, Landlord will issue Tenant monthly parking permits for one hundred (100) automobiles at a discounted rate of $95.00 per car per month.  Tenant shall pay Landlord in advance on the 1st day of each and every calendar month during the Term hereof, commencing on January 1, 1997, in lawful money of the United States of America, the lump sum of $9,500.00 per month as additional Rent for said parking permits, without deduction or offset for any reason including whether the entire amount of authorized automobiles is being parked at any time, and without prior notice or demand; provided that the aforesaid lump sum rental rate of $9,500.00 per month is subject to increase by an additional $500.00 on the 1st day of January of each year during the Lease Term (so that during the tenth year of the Lease Term Tenant shall be paying at the rate of $140.00 per authorized automobile); provided further that in no event shall Tenant be required pay at a rate per authorized automobile in excess of Landlord’s posted parking rate at any time during the Lease Term.  Parking for any additional automobiles in excess of the authorized one hundred shall be subject to the availability of space and paid for at the Landlord’s posted parking rate.

C.   General.  All parking shall beon a non-reserved, self-park basis in a combination of single and tandem spaces in accordance with the procedures and directives of Landlord’s parking operator as issued from time to time to ensure the efficient and economical operation of the parking garage facility.  Parking shall be in common with other tenants and invitees during normal building business hours in the parking area inside the City National Bank Building or within a reasonable distance from said building.  The location for such parking may be as designated by the Landlord from time to time, but the Tenant shall not be entitled to have any specific parking stall or stalls designated for the Tenant’s exclusive use.  All parking shall be pursuant to the terms and considitons of the Supplementary Parking Agreement, attached hereto as Exhibit “B” and incorporated herein by this reference as if set forth in full.  Timely payment of the consideration herein provided shall expressly be a condition precedent to the Tenant’s continuing right to exercise the parking rights under this License.

7.  ALTERATIONS-FIXTURES.   The demised premises shall not be altered, repaired or changed without the written consent of Landlord first had and obtained, except that Tenant shall have the right to perform non-structural, cosmetic remodelling improvements of the Premises which does not affect the Building systems (as hereinafter defined) or substantially alter the layout of the Premises up to a total expenditure which does not exceed the sum of $15,000.00 for any or all of such improvements within any twelve (12) month period, without Landlord’s prior written consent.  All such alterations, improvements or changes shall be at the sole cost of Tenant, and Tenant shall hold Landlord and the demised premises harmless and free from any lien or claim therefore and all other liability, claims and demands arising out of any work done or material supplied to the demised premises at the instance of Tenant, and from all actions, suits and costs of suit by any person to enforce any such lien or claim of lien, liability, claims or demands, together with the costs of suit and attorney’s fees incurred by Landlord in connecting therewith.  Tenant shall cause any mechanic’s lien or other lien filed against the demised premises or the building of which the demised premises are a part to be released and removed within ten (10) days of such filling either by the satisfaction of such lien or by the posting of a bond.  Landlord may impose, as a condition of such consent, such requirements as Landlord in its sole and reasonable discretion may deem reasonable and desirable, including, but not limited to, the requirement that Tenant utilize for such purposes only contractors, materials, mechanics and materialmen approved by Landlord, and the requirement that Tenant shall furnish Landlord with a Completion Bond prior to the commencement of any work, Tenant shall construct such improvements, alterations or repairs in conformance with any and all applicable rules and regulations of any Federal, State, County or Municipal code or ordinance.  In any event, Landlord’s contractor shall perform all mechanical, electrical, plumbing, air conditioning, permanent partition and ceiling tile work (hereinabove referred to as the “Building systems”).  Tenant agrees to give Landlord written notice of the commencement date of any alterations, improvements or repairs to be made in, to or upon the premises not later than fifteen (15) days prior to the commencement of any such work, in order to give Landlord time to post notices of non-responsibility.  In the event any construction, alteration, decorating or repair work (including any engineering or architectural services or consultants employed by Landlord relative to tenant’s alterations or improvements) is performed by Landlord’s contractor, the charges for such work shall include an administrative fee for Landlord’s administration of the work in the amount of 20% of the contract sum(s) on each project administered by Landlord at a cost of $10,000.00 or less, and 15% of the contract sum(s) on each project administered by Landlord costing more than $10,000.00.  All charges for work performed by Landlord’s contractor shall be deemed additional rent under this lease, payable in advance prior to commencement of construction.  All such alterations, repairs, additions or improvements (including any alterations, repairs, additions or improvements installed during Tenant’s prior occupancy of the demised premises pursuant to any previous lease, sublease or otherwise, and including but not limited to the bank vault, vault door and pedestrian escalator installed between Suite 100 and the 2nd Floor Premises), shall, unless otherwise provided by written agreement, become the property of Landlord and shall remain upon and be surrendered with the premises upon the expiration of this lease or any sooner termination thereof; provided that upon expiration or termination of this Lease, Landlord shall have the right and option by written notice to Tenant to require Tenant at its sole cost to remove any of the alterations, repairs, additions or improvements installed by or for Tenant and repair any damage to the Premises occasioned by such installation or removal and restore the Premises to original condition, normal wear and tear excepted.

At the expiration of the term of this lease and provided that Tenant is not in default hereunder, all Tenant’s free-standing personal property not attached to the demised premises may be removed by Tenant, at Tenant’s sole expense, provided, however, Tenant shall pay for any damages caused to the demised premises by the removal of said items, so that after the removal of said items, the demised premises will be in the same condition as at the time prior to the said installations, if any, reasonable wear and tear excepted.  In any event, at the sole option of Landlord, Tenant at its expense, must remove said items and repair any damage to the premises occasioned by said installation and/or removal and restore the premises to original condition.  If Tenant shall fail to complete such removal or restoration and repair such damage, Landlord may do so and charge the reasonable cost thereof to Tenant which sum shall be deemed additional rent hereunder and shall be due and payable from Tenant to Landlord within ten (10) days after Landlord has rendered to Tenant a written statement therefor.  Any improvements, equipment or personal property not removed by Tenant from the premises upon the end of the term shall be conclusively presumed to have been abandoned by tenant, and the cost of removal, storage and/or sale of same shall be deemed additional rent hereunder, payable from Tenant to Landlord in the same manner as provided above with respect to restoration charges.  Any tenant improvements for which an allowance is given by Landlord to Tenant and all carpeting and/or window coverings installed in the premises shall become part of the realty and become the property of Landlord and remain in the demised premises upon expiration or sooner termination of the lease or Tenant’s vacating or abandonment of the demised premises.

The provisions of Articles 28 and 39 are incorporated herein by this reference as if set forth in full.

8.  ETHICS.  If Tenant is a member of any profession, he agrees to abide by the Code of Ethics of the association recognized as representing that particular profession in the County of Los Angeles, State of California.

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9.  UTILITIES.  Landlord agrees to supply for standard desk-furnished business offices, during the usual building business hours on business days, reasonable amounts of domestic water for drinking purposes, heat, air-conditioning, and electric current for lighting purposes and power for a reasonable number of fractional horsepower office machines, together with Landlord’s standard janitorial services five times each week, Saturdays, Sundays and recognized legal holidays excepted.  Landlord shall not supply any janitorial services or cleaning for any plumbing fixtures located in the demised premises.  Tenant shall have the obligation and responsibility for cleaning and maintaining any such plumbing fixtures.  Landlord shall provided the same services, maintenance and repairs for the demised premises at Landlord’s cost as Landlord provides to the other office space tenants  in the building (as distinguished from ground-floor tenants).

Tenant will not, without the written consent of Landlord, use any office equipment in the premises using current in excess of 110 volts, or which will in anyway generate heat or increase the amount of electricity, water or air-conditioning usually furnished or supplied for use of the premises as general office space; nor connect any apparatus or device for the purposes of using electric current except through existing electrical outlets or for the use of water except with existing water pipes in the premises.  If Tenant requires water or electric current in excess of that usually furnished or supplied for use of the premises as general office space, Tenant shall first procure the consent of Landlord, which Landlord may refuse, to the use thereof and Landlord may cause a water meter or electric current meter to be installed in the premises, to measure the amount of water and electric current consumed for any such other use.  The cost of any such meters and of installation, maintenance and repair thereof shall be paid for by Tenant and Tenant agrees to pay Landlord promptly upon demand therefor by Landlord for all such water and electric current consumed as shown by said meters, at the rates charged for such services by the City of Los Angeles or the local public utility, as the case may be, for furnishing the same, plus any additional expense incurred in keeping account of the water and electric current so consumed.

In the event Tenant utilizes of consumes utilities or services after usual building business hours or in amounts which are appreciably in excess of those utilized or consumed by the average office tenants in the building.  Tenant shall reimburse landlord, as additional rent, upon receipt of demand therefor, the cost of such excess consumption.  In the event Tenant utilizes heating, air conditioning or fan service after normal building business hours, Tenant shall reimburse Landlord its then current building standard rate for such services.   As of the date of execution of this Lease, Landlord’s current building standard rates for these services are: for heat or air conditioning — $175.00 per hour; for fan service — $75.00 per hour.

Landlord agrees to supply, for any storage areas leased hereunder, during usual building business hours on business days, reasonable amounts of electric current for lighting purposes only.  Landlord shall have no obligation to supply to storage areas, water, heat, air-conditioning or electric current for any purposes other than lighting.

The normal building business hours are from 6:00 A.M. to 6:00 P.M., Monday through Friday, recognized legal holidays excepted.  At any time during the term of this lease, normal building business hours for the furnishing of any utilities or services to the Building may be curtailed by Landlord without abatement of rent, due to any Energy or Natural Resource Conservation Act now or hereinafter enacted or the directive of any Energy or Natural Resource Agency or any other similar or dissimilar statute or directive of any federal, state or other governmental, or quasi-governmental agency, or public utility, or any other entity vested with the power to regulate utilities or services.

10.  NOTICES.  All notices to be given hereunder by Landlord to Tenant shall be in writing and may be served either personally or by depositing the same in the United States mail, postage prepaid, either by ordinary, registered or certified mail, and addressed to Tenant at 400 North Roxbury Drive, Beverly Hills, California 90210, with a copy addressed to the attention of the Senior Vice-President — Corporate Premises, at the same address.  Said notice shall be deemed effective upon deposit in any public depository of the United States mail.  If there be more than one tenant, then notice to any of them shall constitute notice to all and notice from any of them shall constitute notice from all.  If Tenant be a corporation, then such service upon any employee shall constitute service upon the corporation and in this regard Tenant specifically waives any rights as to methods of service as set out in Sections 1161 and 1162 of the California Code of Civil Procedure.  Tenant hereby waives all other methods of notice prescribed by the Codes of California.

Any notice desired to be served on Landlord by Tenant must be sent by prepaid United States registered or certified mail to Landlord at 9100 Wilshire Boulevard, Suite 404, Beverly Hills, California 90212, or at such other place as Landlord may from time to time designate in writing.

11.  INSURANCE.  Tenant shall at its sole expense, procure and maintain comprehensive public liability insurance naming Landlord as an additional insured for the demised premises during the term of this lease in minimum amounts of $1,000,000.00 combined single limit.  Tenant shall furnish Landlord with evidence of such insurance, in a form satisfactory to Landlord, which shall provide that the coverage shall not be canceled or reduced without ten (10) days prior written notice to Landlord.  The parties to this lease shall each procure an appropriate clause in, or an endorsement on, any policy of fire or extended coverage insurance covering the premises and the building of which the premises are a part, and the improvements, furniture, fixtures, and equipment located in or on the premises, pursuant to which the insurance companies waive subrogation or consent to a waiver of right of recovery, and having obtained such clauses or endorsements of waiver or subrogation or consent to a waiver of right of recovery, each party hereby agrees that it shall not make any claim against or seek to recover from the other for any loss or damage to its property, or the property of others, including consequential loss or damage resulting from fire or other hazards covered by such fire and extended coverage insurance including negligent acts.

12.  RIGHTS OF LANDLORD.  Landlord reserves the following rights: (a) upon prior notice to Tenant, to change the address and/or name of the building without liability to Tenant; (b) to designate all sources furnishing sign painting or lettering, ice, bottled water and toilet supplies used on the premises; (c) constantly to have pass keys to the premises; (d) to grant anyone the exclusive right to conduct any particular business or undertaking in the building in which the demised premises are situated; (e) to enter the demised premises at anytime whether or not Tenant is present to admit Landlord for inspections, repairs, alterations or additions to the premises or the building in which the premises are situated for window cleaning and janitorial services, to exhibit the premises to others, to affix and display “For Rent” signs, and for any purpose whatsoever related to the safety, protection, preservation or improvement of the premises, the said building or Landlord’s interest, without being deemed guilty of an eviction or disturbance of Tenant’s use and possession, and without being liable in any manner to Tenant on account thereof; (f) at any time, and from time to time, whether at the instance of Landlord or pursuant to governmental requirements, at Landlord’s expense, to make repairs, alterations, additions, improvements or decorating, whether structural or otherwise, in or to the building or any part thereof, including the demised premises.  Without limiting the generality of the foregoing rights, Landlord shall specifically have the right to remove, alter, improve or rebuild the lobby and all other public and rentable areas of the building as the same are presently or shall hereafter be constituted, or any part or parts thereof.  Landlord shall not be liable to Tenant for any expense, injury, loss or damage resulting from any work so done in or about the demised premises or the building or any adjacent or nearby buildings, land, street or alley, all claims against the Landlord for any and all such liability being hereby expressly released by Tenant, unless caused by Landlord’s or its agents negligence or willful misconduct.  In connection with making repairs, alterations, decorating, additions or improvements under the terms of this Article, Landlord shall have the right to access through the demised premises, as well as the right to take into and upon and through said premises or any other part of the building all material that may be required to make such repairs, alterations, decorating, additions or improvements, as well as the right in the course of such work to close entrances, doors, corridors, elevators, or other building facilities, or temporarily to abate the operation of such facilities, without being deemed or held guilty of an eviction of Tenant and without liability for damages to

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Tenant’s property, business or person and without liability to Tenant by reason of interference with the business of Tenant or inconvenience or annoyance to Tenant or the customers of Tenant.  The rent reserved herein shall in no way abate while said repairs, alterations, decorating, additions or improvement are being made, and Tenant shall not be entitled to maintain any set-off or counter-claim for damages of any kind against Landlord by reason thereof, all such claims being hereby expressly released by Tenant.  However, all such work shall be done in such manner as to cause Tenant the least inconvenience practicable. Landlord reserves and shall have the right to enter upon the demised premises for the purpose of posting and maintaining such notices on the premises as may be necessary to protect Landlord against mechanic’s, materialmen’s or other liens and any other notices that may be proper and necessary.

13.  DESTRUCTION-FIRE OR OTHER CAUSE.  If said building shall be totally destroyed, this lease shall thereupon terminate.  If said building or demised premises shall be damaged by fire, earthquake, or any other cause without fault or neglect of Tenant, so that the leased premises become untenantable, then, if the leased premises cannot be made tenantable within one hundred twenty (120) working days from the date of such damage, this lease may be terminated by Landlord in the event the leased premises cannot be made tenantable within one hundred eighty (180) days, this lease may be terminated by either party.  In any case where the leased premises are rendered partially and permanently untenantable by fire, earthquake, or other cause without the fault or neglect of Tenant, the monthly rental shall be adjusted in the proportion that the rental value of the untenantable portion of the demised premises bears to the rental value of the whole thereof.  In any case, where the leased premises are rendered partially but only temporarily untenantable by the aforementioned causes, there shall be no abatement of rental.

14.  RIGHT OF REPOSSESSION.  If, in compliance with any law, or ordinance now or hereafter enacted, or if required to comply with the directions or requirements of any public officer, board or commission, it becomes necessary for Landlord to acquire permanently all or any portion of the demised premises, Landlord or its assigns shall have the right to repossess the demised premises, or any portion thereof, at any time upon thirty days’ written notice to Tenant, and when said space shall have been so permanently repossessed, Landlord shall, in lieu of any and all claims for damages, allow Tenant a credit on Tenant’s rent in the proportion that the rental value of the space taken bears to the rental value of the whole of the demised premises; provided, however, that if the space taken is of  such an amount or size as to make the remaining space unusable to Tenant, then Landlord, upon thirty (30) days’ written notice from Tenant, will endeavor, if available, to furnish Tenant with comparable space elsewhere in the building and to place Tenant in such new space, and this lease and each and all of the terms, covenants and conditions thereof shall thereupon remain in full force and effect and be deemed applicable to such new space; provided, however, that if Landlord shall be unable to provide Tenant with such other space, then this lease shall thereupon cease and terminate.  No exercise by Landlord of any right herein reserved shall entitle Tenant to damages for any injury or inconvenience occasioned thereby, nor shall Tenant by reason thereof be entitled to any abatement in rent (except as above set forth in case of taking of space permanently.)

15.  EMINENT DOMAIN.  Should Landlord, at any time during the continuance in force of this lease, be deprived of the building in which the demised premises are situated, or any part thereof, or any part of the land on which the building or appurtenances are situated, by condemnation or eminent domain proceedings, this lease shall terminate, at Landlord’s option, on the date when Landlord is actually deprived of possession of said land or building, or some part thereof, and thereupon the parties hereto shall be released from all further obligations hereunder.  Should Tenant, at any time during the continuance in force of this lease, be deprived of the demised premises or any substantial part thereof preventing Tenant from using the remainder of the Premises for the purposes intended under this Lease, by condemnation or eminent domain proceedings, this lease shall terminate, at Tenant’s option, on the date when Tenant is actually deprived of possession of the Premises, or said substantial part thereof, and thereupon the parties hereto shall be released from all further obligations hereunder.  Upon the termination of this Lease as aforesaid, Landlord shall thereupon repay to Tenant any rental theretofore paid by Tenant and unearned at the date of such termination.  Tenant shall not be entitled to any compensation, allowance, claim or offset of any kind against the Landlord, as damages or otherwise, by reason of such condemnation or eminent domain proceedings or by reason of being deprived of the demised premises or the termination of this lease, and said Tenant does hereby waive, renounce and quit-claim to Landlord any right in any to any award, judgment, payment or compensation which shall or may be made or given because of the taking of said premises, or any portion thereof, by virtue of any such condemnation or eminent domain proceedings, whether received in any such action or in settlement or compromise thereof by Landlord, except that Tenant shall have the right to file a separate claim to recover the value of its personal property in the eminent domain proceedings.

16.  USE OF BUILDING.  Tenant shall not be allowed to use the name of the building in which the demised premises are located or words to that effect, in connection with any business carried on in said premises (except as Tenant’s address) without written consent of Landlord.  Tenant shall not engage in any advertising whatsoever, which in any way shall adversely affect the character of the building of which the demised premises are a part.  Tenant further covenants and agrees not to suffer or permit said premises, or any part thereof to be used in any manner that will injure to impair the structural strength of said building, and not to suffer or permit to be installed in said premises, any machinery or apparatus, the weight of vibration of which will tend to injure or impair the structural strength of said building.

17.  SUCCESSORS.  Subject to the aforementioned restrictions on assignment of this lease on the part of Tenant, the words “Landlord” and “Tenant” as used herein include, apply to, and bind and benefit the heirs, executors, administrators, assigns and successors of Landlord and Tenant.  In the event of any change of name, Tenant agrees to furnish Landlord with a change of business or corporate name with appropriate supporting documentation.

18.  CO-TENANTS. All persons comprising Tenant, together with all assignees and Subtenants, should Landlord elect to treat said assignees and Subtenants as Tenants, are to be held and hereby agree to be held jointly and severally responsible for the payment of rent and the faithful performance of all the terms, covenants and conditions of this lease.  Landlord shall have the right to proceed against any person liable under this lease without the necessity of first proceeding against any other person and without first pursuing any other remedy.  Payment or refund by Landlord to any person who is one of the Tenants hereunder of any sums, including but not limited to the security deposit due under this lease, shall constitute payment or refuse to any persons comprising Tenant.

19.  NON-LIABILITY OF LANDLORD.  Except in the event of Landlord’s negligence or willful misconduct, Landlord shall not liable to Tenant, or to any other person or persons whomsoever, and Tenant hereby waives any and all claims for any damages to the leased premises or for or on account of any loss, damage, theft, injury to any person or property in or about said premises, or the building of which the demised premises are a part, or the approaches

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or entrances thereto, or on the streets, [ILLEGIBLE], parking areas or corridors thereof, caused or occasioned by said premises being out of repair, by defects in said building or said premises or equipment contained therein, including but not limited to, any security system located in or about the demised premises whether or not installed by Landlord, or by the failure to keep the same in good order and  repair, or by fire, gas, water, electricity, failure or malfunction of the air-conditioning, or by the breaking, overflowing or leaking of roofs, pipes, or walls of said building, or for any other damage or injury caused by any acts or events whatsoever beyond the control of landlord, including, but not limited to, the acts and omissions of other Tenants and invitees of the building.  Landlord shall not be liable and Tenant hereby waives all claims for damages that may be caused by Landlord in re-entering and taking possession of the premises as herein provided.

20.  INCREASE OF TAXES AND OPERATING COSTS. Tenant shall pay all taxes assessed during the term of this lease against Tenant’s personal property and trade fixtures and against tenant improvements which exceed the building standard tenant improvements whether installed by Landlord or by Tenant, or in Tenant’s possession in, upon or about the demised premises.  Tenant shall also pay gross receipts tax or any excise or other taxes or licenses on or measured by or allocable to the rent payable hereunder (whether charged to Landlord or to Tenant, or to either or both of them, and whether or not now customary or within the contemplation of the parties hereto).  In the event any such taxes or licenses shall be or have been imposed against the Landlord or the real property of which the demised premises forms a part, then the amount of such taxes shall be paid by Tenant, as additional rent upon demand for payment by Landlord.  Said sum shall be payable in advance in equal monthly installments based upon Landlord’s estimate of the total amount due.  Said estimated monthly payments shall be adjusted annually to the actual tax or license due by payment by Tenant or credit by Landlord of any difference.

If, (a) in any property tax fiscal year during the term of this lease Taxes shall be increased above the Taxes for the base fiscal year, and/or (b) if in any calendar year during term of this lease Operating Costs shall be increased above those in effect during the base year, both as hereinafter defined, Tenant shall pay to Landlord, upon receipt of a statement therefor and in the manner hereinafter set forth, as additional rent, 24.82% of the amount of such increase in Taxes and 24.82% of the amount of increase in Operating Costs.

A.  Definitions.  (1) “Taxes” shall mean taxes and assessments upon or with respect to the building of which the demises premises forms a part, ancillary parking facilities servicing the building, and land upon which they are located including but not limited to drive-ways, landscaped areas and courtyard entrance areas (in this Article collectively referred to as the “land and/or improvements”), imposed by Federal, State or local governments.  If, because of any change in the method of taxation of real estate, any tax or assessment is imposed upon Landlord or upon the owner of the land and/or improvements, or upon or with respect to the land and/or improvements or the rents or income therefrom, in substitution of or in lieu of any tax or assessment which would otherwise be a real estate tax, such other tax or assessment shall be deemed to be a real estate tax.  In case there shall be a reduction of the assessed valuation on the land and/or improvements for any fiscal year which affects the taxes in any year for which a rent adjustment shall have been made, the rent adjustment shall be recalculated on the basis of the revised assessed valuation and Landlord will credit against the rent next becoming due from Tenant such sums as may be due to Tenant by reason of the recalculation, less the expenses and costs incurred in effecting such reduction, including but not limited to attorneys fees, Property Tax Consultants fee, and other professional fees provided that such rent adjustment shall not reduce the rent payable hereunder below the basic monthly rent payable as set forth in Article 2 of this lease.  During the first five (5) years of the Lease Term, “Taxes” shall not include any increase in property taxes resulting from any transfer or conveyance of the realty of which the demised premises forms a part or from any transfer or conveyance of any ownership interest in any entity owning said realty or any part thereof. During the last five (5) years of the lease Term, “Taxes” shall include any property taxes resulting from any transfer or conveyance of the realty of which the demised premises forms a part or from any transfer or conveyance of any ownership interest in any entity owning said realty or any part thereof, even if said transfer or conveyance occurs during the first five (5) years of the Lease Term. (2) “Operating Costs” shall mean (a) wage and labor costs applicable to persons engaged in the management, operations, maintenance, overhaul, improvement or repair of the land and/or improvements, whether said persons be employed by Landlord or by an independent contractor, with whom Landlord shall have contracted or may contract for such services.  It is hereby understood that any increase or decrease in the hours of employment or the number of paid holidays, or vacation days, social security taxes, unemployment insurance taxes and the costs, if any, of providing disability, hospitalization, medical welfare, pension, retirement or other employee benefits imposed by law or by any collective bargaining agreement, or any voluntary employee benefit plans, applicable with respect to such employees, shall correspondingly affect the wage and labor costs; and (b) cost of utilities, fuel, supplies, all insurance, service contracts, improvements (excluding the interior of tenant spaces) of or on the land and/or improvements, amortized over the useful life of such improvements in accordance with generally accepted accounting principles; and (c) such other items as are customarily included in the cost of managing (including but not limited to management fees), operating (including but not limited to ground rent), maintaining (including but not limited to cleaning and janitorial services), overhauling, improving and repairing the land and/or improvements in accordance with generally accepted accounting or management principles or practices.

Notwithstanding anything to the contrary in the definition of ‘Operating Costs’, Operating Costs shall not include the following:

(i)  Any ground lease rental (but rental and other access fees on the access tunnel to the Pershing Square Garage are included in operating costs);

(ii)  Capital expenditures required by Landlord’s failure to comply with laws enacted on or before the date the Building’s Temporary Certificate of Occupancy is validly issued;

(iii)  Costs incurred by Landlord with respect to goods and services (including utilities sold and supplied to tenants and occupants of the Building) to the extent that Landlord is entitled to reimbursement for such costs;

(iv)  Costs incurred by Landlord for the repair of damage to the Building to the extent that Landlord is reimbursed by insurance proceeds;

(v)  Costs, including permit, license and inspection costs, incurred with respect to the installation of tenant improvements made for new tenants in the Building or incurred in renovating or otherwise improving, decorating, painting or redecorating vacant suites for tenants or other occupants of the Building;

(vi)  Depreciation and amortization (except as otherwise provided herein to be includable in operating expenses);

(vii)  Leasing commissions, attorneys’ fees, and other costs and expenses incurred in connection with negotiations or disputes with present or prospective tenants or other occupants of the Building;

(viii)  Wages incurred in connection with the operation of the parking structure;

(ix)  Costs of a capital nature, including without limitation, costs incurred by Landlord for alterations which are considered capital improvements, (but capital repairs and capital replacements, and capital equipment and capital tools purchased by Landlord to enable Landlord to supply services Landlord might otherwise contract for with a third party, shall be included in operating expenses in accordance with generally accepted accounting principles, consistently applied);

(x)  Expenses in connection with services or other benefits which are not provided to Tenant or for which Tenant is charged for directly or which are selectively provided to another tenant or occupant of the Building;

(xi)  Interest, points and fees on debt or amortization on any mortgage or mortgages encumbering the Building or the land on which the Building

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is located;

(xii)  Expenses and costs not normally, in accordance with generally accepting accounting principles, included in Operating Costs by landlords of first-class institutional office Buildings;

(xiii)  Advertising and promotional expenditures;

(xiv)  Any bad debt loss, rent loss, or reserves for bad debts or rent loss;

The following shall also be excluded from the taxes and operating costs:  Federal and State income taxes imposed on Landlord’s net income and any and all costs of any expenses to procure tenants for the building, including but not limited to brokerage commissions, legal fees, and remodeling costs of suites. (3) “Base Year” shall mean (a) for computation of Tax increases, the fiscal tax year ended June 30th, 1997, and (b) for computation of Operating Cost increases, the calendar year 1997. (4) “Subsequent Year” shall mean each and every tax or calendar year, as the case may be, following the base year failing wholly or party within the term of this lease.

B.  Statements for TENANT.  On or about the 1st day of April, in each and every Subsequent Year, and within ninety (90) days after the expiration or earlier termination of the term of this lease, Landlord will furnish to Tenant a comparative statement which shall show a comparison of all pertinent costs, either actual or estimated, and information applicable to the Taxes in the Base Year and in the current tax year and applicable in Operating Costs in the Base Year and in the calendar year preceding the year in which the comparative statement is submitted, and the amount, if any, of the increased in Taxes and Operating Costs and the amount thereof to be paid by Tenant.  In the event that the Building is not at least ninety-five percent (95%) occupied during any Base Year or Subsequent Year, then the costs for such year, either actual or estimated, shall be adjusted and increased to reflect what expenses would have been, had such occupancy been ninety-five percent (95%) during such entire year.  The failure of Landlord to furnish a comparative statement for any year in accordance with this Paragraph B shall be without prejudice to the right of Landlord to furnish comparative statements in subsequent years.  In the event that Landlord shall, for any reason, be unable to furnish a comparative statement on or about April 1st of any year, or within ninety (90) days after the expiration or earlier termination of this lease, Landlord may furnish such statement as soon thereafter as practicable, with the same force and effect as a comparative statement would have had, if delivered as aforesaid.

C.  Payment of Increase in Rent.  (1) The payment of any additional rent on account of Taxes and Operating Cost increase, pursuant to the provisions of this Article 20 shall be made as follows:  On the first day of the month following the furnishing of a comparative statement, Tenant shall pay to landlord as additional rent (a) a sum equal to 1/12th of Tenant’s share of tax increase multiplied by the number of months then elapsed from the date commencing with the 1st day of the current fiscal tax year up to the date of the comparative statement (less and payments made in advance under the last previous comparative statement submitted, if any) plus (b) a sum equal to 1/12th of Tenant’s share of Operating Costs increase multiplied by the number of months then elapsed from the date commencing with the first day of the preceding calendar year up to the date of the comparative statement (less any payments made in advance under the last previous comparative statement submitted, if any), plus (c) in advance, 1/12th of such share of both Tax and Operating Cost increases with respect to the then current month, and each month thereafter as additional rent until a different comparative statement shall be submitted as above provided. (2) When the next comparative statement is submitted by Landlord to Tenant, in the event than such comparative statement shall show an increase in Taxes and/or Operating Costs which shall be different from the increase paid or which was to be paid in advance under the last previous comparative statement, then the additional rent that had been or was to be paid in advance on account of Taxes and Operating Cost increases, shall be increased or decreased accordingly. (3) The additional rent due to Landlord or any credit due to Tenant, as disclosed by the comparative statement furnished Tenant, shall be paid or credited within Ten (10) days after the furnishing of such comparative statement. (4) In the Event Tenant should dispute any cost items in any comparative statement furnished by Landlord pursuant to this Article, Landlord and Tenant specifically agree that provided Tenant is not otherwise in default in the payment of the basic monthly rent under this lease and Tenant first deposits with Landlord the total sum in dispute hereunder, the cost items in dispute shall be submitted to an independent Certified Public Accountant engaged by Landlord and reasonably approved by Tenant, for audit and verification of the cost items disputed, and the finding and determination of said independent Certified Public Accountant, shall be deemed conclusively correct, final and binding between parties hereto without further remedy or recourse to legal proceedings.  In the event such audit discloses that the aggregate of the true amount of such cost items as verified is within three per cent (3%) of the aggregate items disputed, Tenant shall pay the cost of such audit, which shall be in accordance with the reasonable charges generally prevailing for such work.  Sums payable under this Article are deemed independent additional rent and are payable in addition to the rental specified in Article 2 of this lease, any guaranteed minimum monthly rental, and any percentage rental payable under this lease.

D.  Arbitration.  Provided Tenant is not otherwise in default in the payment of the basic monthly rent under this lease, the interpretation, construction, performance, or breach of this Article 20, may be settled by arbitration pursuant to the rules and regulations of the American Arbitration Association.  Either party requesting arbitration under this Article 20 shall make a demand on the other party by registered or certified mail with a copy to the American Arbitration Association.  It is a condition precedent to Tenant’s right to arbitration that Tenant first deposit with Landlords the total amount of the sum in dispute.  The arbitration shall take place as noticed by the American Arbitration Association regardless of whether one of the parties fails or refuses to participate.  In no event shall any sum payable hereunder be withheld by Tenant pending completion of such arbitration.

21.  GENDER.  In this lease, whenever the context so requires, the masculine gender herein used shall include the feminine or neuter and the singular number shall include the plural.  The captions set forth in the various Articles of this lease are for identification and convenience only and are not intended to, and shall not be deemed to limit or expand the contents of the respective Article.  If Tenant is a corporation, Tenant agrees to provide Landlord, upon execution of this lease by Tenant, with a notarized copy of corporate resolution authorizing the Tenant corporation to execute this lease and any appurtenant documents.

22.  SUBORDINATION.  Tenant expressly agrees that at the sole option of Landlord, this lease shall be either subject and subordinate, or paramount, to all ground or underlying lease, mortgages.  Deeds of Trust, or any other encumbrances now placed or which may be placed in the future upon the real property of which the demised premises are a part by the owners thereof, and to all renewals, modifications, replacements or extensions thereof.  And Tenant further agrees that, whenever requested to do so by Landlord, Tenant will execute, sign and deliver any documents required to effectuate such subordination or superiority.  Tenant shall, upon request from Landlord, execute and deliver to Landlord any certificate or other instrument stating the date this lease will terminate, the date to which rent has been paid, that this lease is in full force and effect without modification, and that Tenant has no rights of deduction or offset hereunder or, if this lease has been modified or if Tenant claims a deduction or offset hereunder, stating the effect of such modification and/or the claimed deduction or offset.  Tenant hereby irrevocably constitutes and appoints Landlord as Tenants’ attorney in fact to execute (and to deliver to any third party) any documents required to effect such subordination or superiority and nay such certificate or instrument for an on behalf of Tenant.  If Tenant shall have failed to do so within ten (10) days after request therefore by Landlord, and in such event Landlord shall be conclusively deemed not in

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default under this lease.  Any right, either expressed or implied, to quiet enjoyment of the premises which Tenant may have under this lease shall be subject to any subordination of this lease under this Article.

Notwithstanding anything to the contrary in the foregoing, Landlord agrees that it shall reasonably cooperate with and assist Tenant in Tenant’s obtaining a lender’s standard form Non-Disturbance Agreement by requesting such an agreement from the lender on behalf of Tenant.  Any and all costs and expenses incurred in obtaining a Non-Disturbance Agreement shall be Tenant’s sole responsibility, including but not limited to any fees or costs imposed by the lender and any and all attorneys’ fees incurred by Tenant or Landlord.  Any negotiations or modifications of lender’s standard form Non-Disturbance Agreement shall be Tenant’s sole responsibility.

23.  DELAY IN OCCUPANCY.  Tenant, agrees that, in the event Landlord does not deliver to Tenant timely possession of the demised premises at the commencement of the term, due to failure of a previous tenant to promptly vacate the premises, or due to delays of Landlord or its contractor in completing the remodeling of the premises, or due to any other delays, Landlord shall not be liable for any damage caused thereby; nor shall this lease be void or voidable if possession is given to Tenant within one hundred twenty (120) days after the date set for commencement of this lease, but in no event shall Tenant be liable for rent until such time as Landlord offers to deliver possession of said  premises to Tenant.  However, the term hereof shall not be extended by such delay.  If Tenant, with Landlord’s consent, takes possession of the demised premises prior to the commencement of this lease, then Tenant shall be subject to all the covenants and conditions hereof and shall pay rent for the period ending with the commencement of said term at the monthly rate prescribed for the first month of the said term.  In the event that the delay in delivering to Tenant possession of said premises at the commencement of said term is caused by Tenant, rentals shall nevertheless commence on the date set out in this lease for the commencement of the term of this lease.

24.  CONDITIONS OF COVENANTS.  Each and all of the provisions of this lease are conditions precedent to be faithfully and fully performed and observed by Tenant to entitle Tenant to obtain and continue in possession of the premises hereunder, said conditions are also covenants on the part of Tenant and time of performance of each is of essence of this agreement.

25.  ATTORNEYS’ FEES  If any action or actions be commenced for the breach of any covenants or conditions of this lease, or for any rent, or any other action arising out of this lease, or for the possession of said premises, or if arbitration of Article 20 is requested by either party hereto, or if Landlord necessarily intervenes in, or becomes a party, or is made a party to, any action or actions accruing out of this lease in order to protect is rights, then losing party will pay to prevailing party a reasonable attorney’s fee in such action or actions, which fee shall be fixed by the court in such action.  As a further inducement to Landlord to make this lease and in consideration thereof, Landlord and Tenant covenant and agree that in any action or proceeding arising out of, under or by virtue of this lease, Landlord and Tenant do hereby waiver trial by jury.

26.  BUILDING RULES.  Tenant covenants that Tenant, together with all persons entering and/or occupying the demised premises shall keep and perform each and all of the rules and regulations of the building hereinafter set forth which are hereby referred to and made a part hereof.  Landlord shall have the right to amend said rules and to make other and different reasonable rules and regulations as in Landlord’s reasonable judgment may from time to time be necessary for the management, safety, care and cleanliness of the premises, and for the preservation of good order therein, as well as for the convenience of other occupants and tenants therein.  Such rules and regulations may reasonably limit, restrict and regulate the privileges of tenants in the said building, and all such rules and regulations so made by Landlord, after notice thereof to Tenant, shall be binding upon Tenant and become conditions of Tenant’s tenancy and covenants on the part of and to be performed by Tenant.  Violation of any such rules and regulations may be deemed a breach of this lease by Tenant.  Landlord shall not be responsible to Tenant or to any other person for the non-observance or violation of the rules and regulations by any other tenant or person.

27.  WAIVER.  No modification, alteration or waiver of any term, covenant or condition of this lease shall be valid unless in writing subscribed by the Landlord or by any officer of Landlord authorized in writing.  No waiver of a breach of any covenant or condition shall be valid unless in writing subscribed by the Landlord or by any officer of Landlord authorized in writing.  No waiver of a breach of any covenant or condition shall be construed to be a waiver of any succeeding breach.  Not act, delay or omission done, suffered or permitted by landlord shall be deemed to exhaust or impair any right, remedy or power of Landlord hereunder.  Landlord shall have the right to accept any rental payment tendered by Tenant for lesser amounts than the full rental due without waiver of the balance due from Tenant, and in this regard Landlord shall have the right to deposit any checks tendered by Tenant regardless of any restrictive notations or endorsements placed thereon by Tenant or set forth in any accompanying transmittal without waiver of the balance due Landlord.  Landlord’s acceptance of the keys to the premises shall not constitute a surrender or termination of this lease.  A surrender or termination of this lease can only be effected by way of written agreement between the parties.  This agreement contains the entire contract between the parties hereto, and there are no oral or other agreements between Tenant and Landlord with regard to this lease, except those expressly set out herein, and no representative or officer of Landlord has any power to change, modify or make any other terms or representations whatsoever than those herein set forth.  Tenant hereby waives the provisions of Sections 1932, 1941, 1942 and subdivision (4) of Section 1933 of the Civil Code of the State of California and any and all other statutes or laws permitting a tenant to make repairs at the expense of the landlord or to terminate a lease by reason of the condition of the premises or any part thereof.  Should any part, clause, provision or condition of this lease be held to be void, invalid or inoperative, such invalidity shall not affect any other clause, provision or condition hereof, but the remainder of this lease shall be effective as through such invalid clause, provision or condition had not been included herein.

28.  COVENANT BY TENANT.  HAZARDOUS MATERIALS.  Tenant covenants to hold Landlord free and harmless from all loss or damage resulting from Tenant’s violation of any term or provision of this lease, including but not limited to attorney fees and court costs.

Tenant further covenants to hold Landlord free and harmless from the use, misuse or neglect of said premises or appurtenances and expressly waives, in favor of Landlord, all claims arising out of any alleged defective or unsafe condition thereof, unless the same was caused by the negligence or willful misconduct of Landlord.

Tenant agrees to pay for all damages which may be caused to Landlord or the building in which the demised premises are situated or to any tenant or occupant thereof by any act or failure to act of Tenant or any of Tenant’s invitees, contractors, agents, guests, visitors or employees, and Tenant further agrees not to use or suffer to be used the demised premises in any manner which will increase the present rate of premium for insurance on said building, or cause a cancellation of any insurance policy relating to said building (Landlord acknowledges that Tenant’s existing banking operations do not violate this restriction on the use of the Premises), or keep or suffer to be kept therein any gasoline, distillate, petroleum, hazardous substances or explosive products.  Tenant agrees during the entire term to take good care of the demised premises and to keep the interior thereof in good order, repair and conditions, natural deterioration with careful use and injury by fire, the elements and acts of God excepted.

Tenant and Landlord hereby represent and warrant that no real estate broker nor any other person other than Landlord, its agents and employees, has been involved in the securing and negotiation of this lease, nor is any broker or any other person entitled to any commission, finder’s fee, nor any other

8

payment as a result of Tenant’s execution of this lease.

Tenant shall not use, generate, manufacture, produce, store, treat or dispose of on, under or about the Leased Premises or the Building, or any part thereof, any pesticides, fungicides, solvents, herbicides, flammable explosives, asbestos, radioactive materials, hazardous wastes, toxic substances or related injurious materials, whether injurious by themselves or in combination with other materials (collectively, “Hazardous Materials”).  As used in this Paragraph 7.C, Hazardous Materials shall include but not be limited to substances defined as “hazardous substances”, “hazardous materials”, or “toxic substances” in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.; and those substances defined as “hazardous wastes” in Section 25117 of the California Health & Safety Code or as “hazardous substances in section  20316 of the California Health and Safety Code; and in the regulations adopted and publications promulgated pursuant to said laws.  California Health and Safety Code Section 25359.7 (b) requires any tenant of real property who knows, or has reasonable cause to believe, that any release of a hazardous substance has come to be located in, on or beneath such real property to give written notice of such condition to the owner thereof.  Tenant shall comply with requirements of Section 25359.7 (b) and any successor statute thereto and with all other statutes, laws, ordinances, rules, regulations and orders of governmental authorities with respect to hazardous substances.

Tenant shall indemnify, defend (by counsel reasonably acceptable to Landlord), protect, and hold Landlord, and each of Landlord’s partners, employees, agents, attorneys, successors and assigns, free and harmless from and against any and all claims, liabilities, penalties, forfeitures, losses or expenses (including attorneys’ fees) or death of or injury to any person or damage to any property whatsoever, arising from or caused in whole or in part, directly or indirectly by (a) Tenant’s possession in, on, under or about the Leased Premises or discharge in or from the Leased Premises of any Hazardous Materials or Tenant’s use, analysis, storage, transportation, disposal, release, threatened release, discharge or generation of Hazardous Materials to, in on, under, about or from the Leased premises or the Building, or (b) Tenant’s failure to comply with any Federal, State, County, Municipal, local or other law, rule, ordinance and regulation now or hereafter in effect relating to the industrial hygiene, environmental protection, use, analysis, generation, manufacture, purchase, transportation, storage and disposal of hazardous, toxic, contaminated, polluting and radioactive matter, substances and wastes.  Tenant’s obligations hereunder shall include, without limitation, and whether foreseeable or unforeseeable, all costs of any required or necessary repair, cleanup, detoxification or decontamination of the Leased Premises or the Building, and the preparation and implementation of any closure, remedial action or other required plans in connection therewith, and shall survive the expiration or earlier termination of the Lease.  For purposes of the release and indemnity provisions hereof, any acts or omissions of Tenant, or by employees, agents, assignees, contractors or subcontractors of Tenant or others acting for or on behalf of Tenant (whether or not they are negligent, intentional, willful or unlawful) shall be strictly attributable to Tenant.

29.  DEFAULT.  A.  It shall, at Landlord’s option, be deemed a breach of this lease if (1) Tenant defaults (a) in the making of any payment of money pursuant to this lease, or (b) in fulfilling any other term, covenant, condition, provision, or agreement of this lease if said default under this Article 29 continues to exist at the expiration of thirty (30) days after notice thereof given by Landlord to Tenant, or (2) (Intentionally deleted.  Any references to this subparagraph 2 in this Lease shall be deemed to refer to subparagraph (3) which follows); (3) Tenant shall cease to occupy or conduct business in Suite 100 and/or the Second Floor Premises during customary banking hours, or if Tenant shall remove substantially all of Tenant’s furniture of furnishings therefrom, or (4) Tenant shall fail to move into or take possession of demised premises within fifteen (15) days after Landlord offers the premises for occupancy or (5) any execution or attachment shall be issued against Tenant or any of Tenant’s property or (6) the demised premises shall be taken or occupied or attempted to be taken or occupied by someone other than Tenant or (7) Tenant shall default with respect to any other lease between (a) Landlord and Tenant, or (b) any parent company or subsidiary company or affiliate or agent of Landlord or Tenant or (8) Tenant assigns or otherwise transfers substantially all of the assets used in connection with the business conducted in demised premises.

B.  In the event that Landlord elects, pursuant to paragraph A of this Article, to declare a breach of this lease, then Landlord shall have the right to give Tenant fifteen (15) days notice of intention to end the term of this lease and thereupon, at the expiration of said fifteen (15) days, the term of this lease shall expire as fully and completely as if that day were the day herein definitely fixed for the expiration of the term hereof and Tenant shall then quit and surrender the demised premises to Landlord, but Tenant shall remain liable as hereinafter provided.  If Tenant fails to so quit and surrender the demised premises as aforesaid, Landlord shall have the right, without notice to re-enter demised premises and dispossess Tenant and the legal representatives of Tenant and all other occupants of demised premises by unlawful detainer or other summary proceedings, or otherwise, and remove their effects and regain possession of demised premises (but Landlord shall not be obligated to effect such removal).

C.  In the event of any breach of this lease by Tenant (and regardless of whether or not Tenant has abandoned the demised premises), this lease shall not terminate unless Landlord, at Landlord’s option, elects at any time when Tenant is in breach of this lease to terminate Tenant’s right to possession as provided in Paragraph B and of this Article or, at Landlord’s further option, by the giving of any notice (including but not limited to any notice preliminary or prerequisite to the bringing of legal proceedings in unlawful detainer) terminating Tenant’s right to possession.  For so long as this lease so continues in effect, Landlord may enforce all of Landlord’s rights and remedies under this lease, including the right to recover all rent as it becomes due hereunder.  For the purposes of this Paragraph C, the following shall not constitute termination of Landlord’s right to possession; (1) acts of maintenance or preservation or efforts to relet demised premises, or (2) the appointment of a receiver upon initiative of Landlord to protect Landlord’s interest under this lease.

D.  In the event of termination of this lease or termination of Tenant’s right to possession (as the result of Tenant’s breach of this lease or pursuant to Article 30 (Bankruptcy), landlord shall have the right: (1) To remove any and all persons and property from demised premises pursuant to such rights and remedies as the laws of the State of California shall then provide or permit, but Landlord shall not be obligated to effect such removal.  Such property may, at Landlord’s option, be stored or otherwise dealt with as such laws may then provide or permit, including but not limited to the right of Landlord to store the same, or any part thereof, in a warehouse or elsewhere at the expense and risk of and for the account of Tenant, (2) To recover from Tenant damages which shall include but not be limited to: (a) The worth, at the time of award, of the unpaid rent (including but not limited to increases in rent pursuant to Article 20 even if determined at a later date) which have been earned at the time of termination; (b) The worth, at the time of award, by which the unpaid rent (including but not limited to increases in rent pursuant to Article 20 even if determined at a later date) which would have been earned after termination until the time of award exceeds the amount of such rental loss that the Tenant proves could have been reasonably avoided; (c) The worth, at the time of award, of the amount by which the unpaid rent (including but not limited to increases in rent pursuant to Article 20 even if determined at a later date) 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 for the same period; and (d) Such reasonable expenses as landlord may incur for legal actions, attorney’s fees, court costs, for reletting (including but not limited to advertising), brokerage fees, for putting demised premises in good order, condition and repair, for preparing the same for reletting (including but not limited to any remodeling, renovations or alterations of the premises), and for keeping demised premises in good order, condition and repair (before and after Landlord has prepared the same for reletting), and all reasonable costs (including but not limited to attorneys’ and receivers’ fees) incurred in connection with the appointment of and performance by any receiver and any other amount necessary to compensate Landlord for all the detriment approximately caused by Tenant’s failure to perform these obligations under the lease or which in the ordinary course of things would be likely to result therefrom.  The “worth of at the time or award” shall include interest at the maximum legal rate. (3) To enforce, to the extent permitted by the laws of the State of California then in force

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and effect, any other rights or remedies set forth in this lease or otherwise applicable hereto by operation of law or contract.

E.  In the event of a breach by Tenant of any of the terms, covenants, conditions, provisions or agreements of this lease Landlord shall additionally have the right of injunction.  Mention in this lease of any particular remedy shall not preclude Landlord from any other remedy, at law or in equity.

F.  Tenant hereby expressly waives any and all rights of redemption granted by or under any present or future law in the event of Tenant’s being evicted or dispossessed or any cause, or in the event of Landlord’s obtaining possession of demised premises, by reason of the violation by Tenant of any of the terms, covenants, conditions, provisions or agreements of this lease, or otherwise.

G.  Any amount due to Landlord not paid when due shall bear interest at the maximum rate then allowable by law from the date due.  On any amounts not paid within twenty-five (25) days from the date due, Tenant shall pay Landlord a late charge of five (5%) per month for Landlord’s administrative expenses, plus the amount of legal costs and attorney’s fees incurred by Landlord prior to trial for the collection of such delinquent rent.  Landlord shall have the right to apply the first monies received from Tenant to late charges and interest.  Payment of such interest and late charges shall not excuse or cure any default by Tenant under this lease.  Interest shall not be payable on late charges.

30.  BANKRUPTCY.  If, at any time during the term of this lease, in any judicial action proceeding in any court against Tenant, a receiver or other officer or agent abe appointed to take charge of said premises or the business conducted therein and shall be in possession thereof, or if this lease or the interest or estate created thereby vest in any other person or persons by operation of law or otherwise, except by consent of Landlord, or in the event of any action taken by or against Tenant under the federal bankruptcy laws or other applicable statutes of the United States, or any state, or if Tenant shall make an assignment for the benefit of creditors, or if an attachment or execution is levied upon Tenant’s property or interest under this lease which is not satisfied or released within thirty (30) days thereafter, the occurrence of any such event shall be deemed to be a breach of this lease by Tenant, and Landlord shall have the rights herein provided in the event of any such breach, including the right, at Landlord’s option, to terminate this lease immediately and enter said premises and remove all persons and property therefrom.  Notwithstanding the foregoing, in the event Tenant is ever subjected to the jurisdiction of the Federal Deposit Insurance Corporation or any other federal or state banking authority and pursuant thereto Tenant or such authority continues to pay the rent pursuant of this Lease, then this Lease shall not terminate pursuant to the provisions of this Article so long as the rental and other provisions of this Lease are performed.

31.  ACCEPTANCE.  Tenant agrees that, upon substantial completion of said premises and/or upon Landlord’s offer to deliver the same for occupancy by Tenant, Tenant will accept said premises and take possession thereof.  The entry of the Tenant into the possession of the demised premises shall be conclusive acknowledgement on Tenant’s part of Tenant’s acceptance of the premises and that they are in good and tenantable condition, except as to latent defects not apparent by reasonable visual inspection and reasonable punchlist items.  At the expiration or sooner termination of this Lease, Tenant shall deliver the demised premises to Landlord, clean and in a state of repair in which said premise existed at the commencement of the term hereof with tenant improvements accepted by Landlord under the provisions of Article 7, reasonable wear and tear excepted.  There are no representations or warranties of Landlord as to the condition or state of repair of the premises except as expressly stated in this lease.  Tenant’s failure to accept the premises upon Landlord’s offer of delivery shall in no way postpone the commencement of this lease or Tenant’s obligation to pay rental hereunder.

32.  COMPLIANCE.  Tenant shall, at Tenant’s expense, comply with all laws, rules, orders, ordinances, regulations and requirements or municipal, state and federal governments, boards and authorities relative to the Tenant’s occupancy of the demised premises or to the business to be conducted therein.  Landlord shall, at Landlord’s expense, comply with all laws, rules, orders, ordinances, regulations and requirements or municipal, state and federal governments, boards and authorities (herein collectively referred to as the “requirements and authorities”) relative to the leasing and general operations of the Building, exclusive of the requirements and authorities relative to each and all of the tenant’s occupancies of premises within the Building or to the business’s conducted by such tenants.  Tenant will keep the said premises in a clean and orderly condition and in accordance with all laws and ordinances and the direction of all public officers, and, as far as reasonably possible, shall keep all immoral and disreputable persons out of said premises to the end that the reputation of the demised premises and the said building as a first class office building may be preserved.  No trade, occupation, game or business shall be conducted upon said premises which shall be unlawful or of unethical character.  The demised premises shall not be used for cooking (except only for incidental microwave cooking of employees lunch and snacks in a non-public area of the Premises), lodging, sleeping or for immoral purposes and no objectionable noise, vibration or odor shall be permitted to escape from said premises.  Tenant shall not install not maintain vending machines on the demised premises without Landlord’s prior written permission, nor engage in any activity which landlord’s Certificate of Occupancy relating thereto.

33.  CALIFORNIA LAW.  The provisions of this lease shall be construed and interpreted in accordance with the laws of the State of California.  The language in all parts of this lease shall be construed in all cases according to its fair meaning and not strictly for or against either Landlord or Tenant.  This lease shall be deemed to jointly prepared by both of the parties hereto, and any ambiguities or uncertainties herein shall not be construed for or against either of the parties hereto.

34.  TRANSFER OF LANDLORD’S INTEREST.  The term “Landlord” as used in this lease, insofar as covenants or obligations on the part of Landlord are concerned, shall be limited to mean and include only the owner, or owners, at the time in question, of the fee or the ground lease on the demised premises and in the event of any transfer of the title to such Proprietary interest, the Landlord named herein (and in case of any subsequent transfers or conveyances, the then Grantor), their employees and agents shall be automatically freed and relieved from and after the date of such transfer or conveyance of all personal liability with respect to the performance of any covenants or obligations on the part of Landlord contained in this lease thereafter to be performed; provided, that any funds in the hands of such Landlord or the then Grantor at the time of such transfer in which Tenant has an interest shall be turned over to the Grantee, and any amount then due and payable to Tenant by Landlord or the then Grantor under any provision of this lease shall be paid to Tenant, it being intended hereby that the covenants and obligations contained in this lease on the part of Landlord shall, subject as aforesaid, be binding upon Landlord, its successors and assigns only during and in respect to their successive periods of ownership.  Any liability that arises form Landlord’s negligence during its period of ownership and that remains unsatisfied at the expiration of said period of ownership, shall survive the expiration of the period of ownership.

35.  FORCE MAJEURE.  Any act of the Landlord or Tenant required by this lease to be done within a specified time (except for the payment of rent and other sums deemed rent) shall be subject to excusable delays.  The term “excusable delays” shall be deemed to mean any delays caused by or due to fire, the elements of nature, casualties, strikes, lockouts or other labor troubles, governmental regulations, shortages of material, or supplies, or any cause, whether similar or dissimilar to the foregoing beyond the control of the performing party which affects the performance of that party.  Neither party shall be liable to the other, in damages or otherwise for any such excusable delays.  Landlord shall not be deemed in default hereunder, for any failure, suspension, stoppage or interruption of any public utility services, air conditioning or elevator service, caused by repairs, replacements, riots, strikes, labor disputes, fire explosion, earthquake, floods, rain storms, war, insurrection failure of any public utility to furnish service for any reason whatsoever (including, but not limited to any rationing or reduction in service due to any Energy or Natural Resource Conservation Act or Agency, or any Environmental Protection Act or Agency.

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or any other similar or dissimilar act, statute, ordinance, regulation or directive of any federal, state, county, municipality, or any other governmental or quasi-governmental agency, or of any public utility or any other public or private agency or entity vested with the power to curtail service as a means of conserving or controlling the consumption of water, gas, electricity or any other utility, or any other energy or energy product, or natural resource, or any product or service), act of God, accidents or any other similar or dissimilar causes beyond the reasonable control of Landlord; not shall such failure or reduction constitute an eviction.  There shall be no abatements of rent by reason of any such failure or reduction.

36.  TAXES, ASSESSMENTS AND OTHER CHARGES.  In addition to rental, operating cost increases and any charges for utilities or services payable under this lease.  Landlord may at any time during the term of this agreement increase the service or utilities charges payable as additional rent to reflect any and all expenses costs (including but not limited to costs to secure any alternate source of utilities, energy, products or service), improvements, taxes, assessments, charges, subcharges or penalties which Landlord is subject to or required to make after the execution date of this lease pursuant to any Energy or Natural Resource Conservation Act or Agency, or any Environmental Protection Act or Agency, or any other similar or dissimilar act, statute, ordinance, regulation or directive of any federal, state, county, municipality, or any other governmental or quasi-governmental agency, or any public utility of any other public or private agency or entity vested with the power to impose taxes, assessments, charges, surcharges or penalties as a means of conserving or controlling the consumption of water, gas, electricity or any other utility, or any other energy or energy product, or natural resource, or any product or service, whether or not such taxes, assessments, charges, surcharges or penalties are based upon or applied (either directly or indirectly) to any utility, product or service charge.  Such increase to Tenant shall be based upon a proportion of the sum due as determined by Landlord, to be reasonably applicable to Tenant and shall be due and payable within ten (10) days after billing by Landlord.  In any event, Tenant shall pay all such taxes, assessments, expenses, charges, or surcharges that are imposed directly against Tenant.

Tenant shall pay Tenant’s Percentage Share (as specified in Article 20) of any special assessment levied upon the building, improvements or real property upon which the demised premises are located by the Los Angeles Rapid Transit District (or any other governmental entity having the authority to impose such assessment) (the “Metrorail Assessment”).  Tenant shall pay Tenant’s Percentage Share of the Metrorail Assessment in equal monthly installments as the same are billed by Landlord to Tenant.  Landlord may require that the final installment be due and payable on the first day of the month in which the Metrorail Assessment is due.  Tenant’s obligation requires Tenant to pay Tenant’s Percentage Share of the entire Metrorail Assessment for each calendar year of the Term and is not limited to Tenant’s Percentage Share of any annual increases made, from time to time, to the Metrorail Assessment.  If the bill for the Metrorail Assessment specifies that it applies to a given period of time.  Tenant’s obligations shall be amortized to the extent the Term of this Lease does not include all such period.

Tenant shall pay Tenant’s Percentage Share (as specified in Article 20) of any special assessment, tax, levy, surcharge or fee levied upon the building, improvements or Real Property by the City or County of Los Angeles in connection with the development, improvement or beautification of Pershing Square or the area immediately adjacent thereto (the “Pershing Square Assessment”).  Tenant’s obligation requires Tenant to pay Tenant’s Percentage Share of the entire Pershing Square Assessment for each calendar year of the Term and is not limited to Tenant’s Percentage Share of any annual increases made, from time to time, to the Pershing Square Assessment.  If the bill for the Pershing Square Assessment specifies that it applies to a given period of time, Tenant’s obligations shall be amortized to the extent the Term of this Lease does not include all such period.

37.  

38.  CONDITION OF THE PREMISES.  Tenant agrees that the demised premises are being leased in an “as is” condition and Landlord is not obligated to perform any work of any kind to prepare the premises for Tenant’s occupancy, except that upon the written request of Tenant at any one time for each floor during the Lease Term, Landlord at its cost and expense shall repaint all painted surfaces and recarpet all carpeted surfaces in the premises located on the 1st, 2nd, 9th and 20th Floors with Landlord’s Building Standard carpet and paint in the same or similar colors.  All additional work and any over standard materials shall be furnished and/or paid for as an extra by Tenant and shall be performed by Landlord or in accordance with the provisions of Article 7 of this lease.  To the extent possible, Landlord shall endeavor to perform the aforesaid work outside Tenant’s business hours, in the evenings and on weekends.

The area of the leased premises is based upon the rentable area, which includes Tenant’s proportionate share of the public elevator lobby, toilet rooms, corridors and other public areas on the floor on which the demised premises are located.  A lease of a full floor includes the entire public area on the floor.

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39.  FIRE PROOFING AND INSULATING MATERIALS, ABATEMENT.  Tenant acknowledges that certain fire-proofing and insulating materials used in the construction of the Building contain asbestos and other hazardous substances (collectively “asbestos”).  If any governmental entity promulgates or revises a statute, ordinance, code, rule or regulation, or imposes mandatory or voluntary controls or guidelines with respect to such asbestos-containing materials or if Landlord otherwise so elects, Landlord may, in its sole and reasonable discretion, comply with such mandatory or voluntary controls or guidelines, or elect to make such alterations or remove such asbestos-containing materials.  Such compliance or the making of alterations, and the removal of all or a portion of such asbestos containing materials, whether in the Premises or elsewhere in the Building, shall not, in any event constitute a breach by Landlord of any provision of this Lease, relieve Tenant of the obligation to pay any Rent due under this Lease, constitute or be construed as a constructive or other eviction of Tenant, or constitute or be construed as a breach of Tenant’s quiet enjoyment.  In accordance with Proposition 65 (Assembly Bill No. 3713) and the regulations promulgated thereunder (California Health and Safety Code Sections 25249.6 et. seq.) which require that persons subject to “environmental exposure” to certain designated chemicals, such as asbestos, receive warning, you are advised that:

WARNING: THE BUILDING CONTAINS ASBESTOS
A CHEMICAL KNOWN TO THE STATE OF
CALIFORNIA TO CAUSE CANCER

Tenant also acknowledges that Landlord has promulgated building regulations and procedures governing the manner in which Tenant may undertake alterations, additions, modifications and improvements to the Premises in those areas where asbestos-containing materials may be located, and such regulations and procedures may be modified, amended or supplemented from time to time.  Prior to undertaking any physical work in or around the Premises, Tenant shall notify Landlord in writing of the exact nature and location of the proposed work and shall promptly supply such additional information regarding the proposed work as Landlord shall request.  After receipt of Tenant’s notice, Landlord shall, to the extent appropriate, supply Tenant with the Building regulations and procedures for working in areas where there is a risk of coming into contact with asbestos-containing materials.  Tenant shall, at Tenant’s sole cost and expense, strictly comply with all such Building regulations and procedures established by Landlord and with all applicable governmental statutes, ordinances, codes, rules, regulations, restrictions and guidelines (herein “governmental controls”).  Landlord shall have the right (but not the duty or obligation at all times to monitor the work for compliance with the Building regulations and procedures and governmental controls.  If Landlord determines that any of the Building regulations or procedures or governmental controls are not being strictly complied with, Landlord may immediately require the cessation of all work being performed in or around the Premises until such time as Landlord is satisfied that the applicable regulations, procedures and governmental controls will be observed.  Landlord’s monitoring of any work in or around the Premises shall not be deemed a certification by Landlord of compliance with any applicable governmental control or of the building regulations and procedures or a waiver by Landlord of its right to require strict by Tenant with such Building regulations and procedures and governmental controls, nor shall such monitoring relieve Tenant from any of its responsibilities and liabilities relating to such work.

40.  ABATEMENT OF FIREPROOFING AND INSULATING MATERIALS.  Landlord and Tenant shall cooperate with and accomodate one another in the performance of the following abatement work by Landlord during the term of this Lease:

A.  2nd Floor Abatement.  At any time during the Term of this Lease, Landlord shall have the right (but not the obligation) upon sixty (60) days prior written notice to Tenant to abate any asbestos containing materials located in the 2nd Floor Premises.  The abatement work shall be performed at night and on weekends under the supervision of a certified industrial hygienist, either (at the option of Landlord) (a) in segments in individual sections of the Premises as they are vacated, or (b) in the entire Premises.  If required by Landlord, Tenant shall temporarily relocate its employees to unoccupied portions of the 3rd Floor Premises and/or other available areas of Tenant’s Premises and/or other unoccupied areas in the Building for which Landlord will not charge any additional rent.  Landlord shall pay the reasonable costs of relocating Tenant’s furniture to the temporary space and back to the 2nd Floor Premises.  Whether performed in segments or in the entire Premises the work shall be performed in a manner which will interfere with Tenant’s banking operations to the least extent reasonably possible, in order to permit Tenant’s banking staff to generally perform their duties normal business hours during the period of the abatement of the 2nd Floor Premises.  In either case, the areas of abatement will be sealed by plastic barriers or other means as required, and the plastic barriers, scaffolding and other accouirements necessary for protection or inconvenient to remove during the course of the work shall remain continously in place throughout the course of the work.  Tenant shall continue to pay rent on the entire 2nd Floor Premises throughout the period of the abatement work.

B.  Suite 100 Abatement.  At any time during the Term of this Lease.  Landlord shall have the right (but not the obligation) upon sixty (60) days prior written notice to Tenant to abate any asbestos containing materials located Suite 100 on the 1st Floor.  The abatement work shall be performed at night and on weekends under the supervision of a certified industrial hygienist in a manner which will interfere with Tenant’s banking operations to the least extent reasonably possible, in order to permit Tenant’s branch bank to generally remain open during normal business hours during the period of the abatement.  The areas of a abatement will be sealed by plastic barriers or other means as required.  Plastic barriers, scaffolding and other accouirements necessary for protection or inconvenient to remove during the course of the work shall remain continously in place throughout the course of the work.  Tenant shall continue to pay rent on the entire 1st Floor Premises throughout the period of the abatement work.

41.  BUILDING IDENTITY SIGN.  During the Term of this Lease and any extensions thereof, Tenant shall have the exclusive right to maintain the existing signs on the top of the Building exterior identifying the name of the Building as “City National Bank Building”.  Tenant shall be responsible for all expenses relating to the operation and maintenance of the signs, including but not limited to utilities, cleaning repairs, permits, insurance, taxes and for any damage to the Building occasioned by the signs.  Upon the expiration or termination of this Lease or of these sign rights, Landlord shall have the right and option, exercisable by written notice to tenant, to (a) require Tenant at its sole cost to remove the signs and repair any damage to the Building occasioned by such installation or removal and restore the Premises to original condition, or (b) leave the signs in place and surrender them to the Landlord as Landlord’s property under the terms of this Lease, provided that Landlord shall thereupon modify said signs to no longer read “City National Bank”.

42.  OPTION TO TERMINATE.  Landlord hereby grants to Tenant a one-time option to terminate this Lease on the 30th day of June 2004, but only upon the following terms and conditions.

A.  That Tenant is not in material default under any of the terms, covenants and conditions of this Lease on the part of Tenant to be performed both at the time of the exercise of the option and on the termination date.

B.  That Tenant give Landlord twelve (12) months’ prior written notice of Tenant’s election to exercise the option, such notice to be actually received by Landlord at least twelve (12) months prior to date the opinion is to take effect.

C.  That Tenant pay to Landlord with the aforesaid notice the sum of Three Hundred Eighty-Nine Thousand and No/100 Dollars ($389,000.00) as

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consideration for this Lease termination.

D.  That Tenant and all persons claiming under or through Tenant vacate the demised premises not later than the termination date and return the premises to Landlord in good condition, normal wear and tear excepted.

E.  That all leasehold improvements which are Landlord’s property under this Lease remain in the premises as part of the realty as provided in Article 7 and other provisions of this Lease.  Tenant shall remove any alteration or improvements required to be removed by Tenant under the terms of this Lease and restore the premises as required not later than the termination date.

F.  That this option shall be self-operating and that, once exercised by Tenant no further documentation by the parties hereto shall be necessary in order to terminate this Lease.

G.  That time is expressly made of the essence of this option.

43.  OPTION TO EXTEND TERM.  Landlord hereby grants to Tenant the right to extend the term of this Lease for an additional five (5) year period commencing upon the expiration of the initial ten (10) year term on December 31, 2006, but nevertheless, only upon the following terms and conditions:

A.  That Tenant is not in material default under any of the terms, covenants and conditions of this Lease on the part of Tenant to be performed both at the time of the exercise of such option and at the commencement of the extended term.

B.  That Tenant give Landlord twelve (12) months’ prior written notice of Tenant’s election to exercise such option, such notice to be actually received by Landlord at least twelve (12) months prior to date the option is to take effect.

C.  That Tenant shall pay as rent during the extended term the fair market rental value which is deemed to be the rental rate then being offered to prospective tenants for new leases of the date of the commencement of the extended term for comparable premises in the City National Bank Building, or if no comparable premises in the Building are on the market at that time, the rate for comparable premises in comparable office Buildings in the downtown Los Angeles area, provided that in no event shall the rent for the extended term be less than the herein rental rate paid by Tenant for the premises for the last month of the initial ten (10) year term of this Lease.  The determination of such fair market rental value shall take into consideration all the elements which are generally and usually considered in the real estate industry to establish a fair market rental value for comparable premises, including but not limited to the size and location of the premises, the quality and extent of the improvements existing in the premises, operating cost and tax increases, cost of living and other rental adjustments, the location of the premises in the Building, the floor height of the premises and other economic factors generally allowed a tenant in such market for comparable premises, such as a free rent allowance, provided that the determination of fair market rental value shall not include any imputation of monetary value to fair market rental factors not a constituent part of the extension option, such as, for example, a reduction of rental for a brokerage commission where Landlord has no obligation to pay such commission, or a reduction for a relocation allowance, or a tenant improvement allowance based on unimproved or raw space.  In any event the fair market rental value of the premises shall be determined by employing sound business judgment and generally accepted appraisal practices, and shall be established in accordance with Landlord’s then standard leasing practices for premises based upon the rentable area.  Escalations under Article 20 for the taxes and operating expenses, and the Metrorail and Pershing Square Benefit Assessments, and any charges under other provisions of this Lease, shall be passed through to Tenant in addition to the base monthly rental.

In no event shall the rent for the extended term be less than the herein rental rate paid by Tenant for the premises for the last month of the initial ten (10) year term of this Lease.

D.  If the parties agree on the rent for the extended term, they shall immediately execute an amendment to this Lease stating the rent for the extended term.  If the parties are unable to agree on the rent for the extended term then within ninety (90) days prior to the commencement of the extended term, each party, as its cost and by giving notice to the other party, shall appoint a real estate appraiser with at least five (5) years full-time commercial appraisal experience in the area in which the Premises are located to appraise and set the rent for the extended term based upon the foregoing formula.  If a party does not appoint an appraiser within ten (10) days after the other party has given notice of the name of its appraiser, the single appraiser appointed shall be the sole appraiser and shall set the rent for the extended term.  If the two (2) appraisers are appointed by the parties as stated in this paragraph, they shall meet promptly and attempt to set the rent for the extended term.  If they are unable to agree within 30 days after the second appraiser has been appointed, they shall elect a third appraiser meeting the qualifications stated in this Paragraph within ten (10) days after the last day of the thirty (30) day period given the two appraisers to set the rent.  Each of the parties shall bear one-half (1/2) of the cost of appointing a third appraiser and of paying the third appraiser’s fee.  The third appraiser, however selected, shall be a person who has not previously acted in any capacity for either party.  Within thirty (30) days after selecting of third appraiser, a majority of the appraisers shall set the rent for the extended term.  If the majority of the appraisers are unable to set the rent within the stipulated period of time, the two (2) appraisals that are closest in amount shall be added together and their total divided by two (2); the resulting quotient shall be the fair market rental value for the premises.

E.  That Tenant shall execute an Addendum confirming the extension of the Term of this Lease and the rental, provided that this option shall be self-operating and that once exercised by Tenant no further documentation by the parties hereto shall be necessary in order to extend the Term of this Lease.

F.  That time is expressly made of the essence of this option.

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This lease consists of forty-three (43) Articles consecutively numbered.

Rules and regulations of the building referred to herein which constitute a part of this lease.

1.  The sidewalks, entrances, lobby, garage, elevators, stairways and public corridors shall be used only as a means of ingress and egress and shall remain unobstructed at all times.  The entrance and exit doors of all suites are to be kept closed at all times, except as required for orderly passage to and from a suite.  Loitering or congregating in any part of the building or obstruction of any means of ingress or egress shall not be permitted.  Doors and windows shall not be covered or obstructed except that Landlord shall have the right to require Tenant to keep the drapes closed at all times.

2.  Plumbing fixtures shall not be used for any purposes other than those for which they were constructed, and no rubbish, newspapers, trash or other substances of any kind shall be thrown into them.  Walls, floors and ceilings shall not be defaced in any way, and no one shall be permitted to mark, drive nail, screw or drill into, paint, or in any way mar any building surface, except that pictures, certificates, licenses and similar items normally used in Tenant’s business may be carefully attached to the walls of the demised premises by Tenant in a manner to be prescribed by Landlord.  Upon removal, of such items by Tenant, any damage to the walls or other surfaces, except minor nail holes, shall be repaired by Tenant.

3.  No awning, shade, sign, advertisement or notice shall be inscribed, painted, displayed or affixed on, in or to any window or door or any other part of the outside or inside of the building or the demised premises.  No window displays or other public displays shall be permitted, without the prior written consent of Landlord.  Tenant shall not solicit other tenants in the building.  Drapes may be installed by tenants provided they are of such color, material, construction and installation as may be prescribed by landlord.  All tenant identification on public corridor doors will be installed by Landlord for Tenant, but the cost shall be paid by Tenant.  No lettering or signs other than the name of the Tenant will be permitted on public corridor doors, with the size and type of letters to be prescribed by Landlord.  The bulletin board or directory of the building will be provided exclusively for the display of the name and location of Tenant only, and Landlord reserves the right to exclude all other names therefrom and to assess its Buildings Standard charge for each and every name other than the name of Tenant which Tenant may desire to be placed upon such bulletin board and to which Landlord may consent.  All requests for listing of Tenants on the Directory of Building Tenants must be submitted to the office of the building in writing.  Landlord reserves the right to approve all listing requests.

4.  Electric wiring of every kind and telephone outlets shall be installed in a manner as will be prescribed by Landlord.  The location of convenience outlets, electric light outlets, power outlets and telephone outlets shall be approved by Landlord, but the cost of installation thereof shall be borne by Tenant.

5.  The weight, size and position of all safes and other unusually heavy objects used or placed in the building shall be prescribed by Landlord and shall, in all cases, stand on metal plates of such size as shall be prescribed by Landlord.  The repair of any damage done to the building or property therein by putting in or taking out or maintaining such safes or other unusually heavy objects shall be paid by Tenant.

6.  All freight, furniture, fixtures and other personal property shall only be moved into, within and out of the building at times designated by and under the super vision of Landlord and in accordance with such regulations as may be posted in the office of the building.  In no event will Landlord be responsible for any loss or damage to such freight, furniture, fixtures or personal property from any cause.

7.  No improper noises, vibrations or odors will be permitted to bring or keep within the building, nor shall any person be permitted to interfere in any way with tenants or those having business with them.  No person will be permitted to bring or keep within the building any animal, bird or bicycle.  No person shall throw trash, refuse, cigarettes or other substances of any kind any place within or out of the building, except in the refuse containers provided therefor.  No person shall be employed by Tenant to do janitor work in any part of said building without the written consent of Landlord.  Landlord reserves the right to exclude or expel from the building 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 the rules and regulations of said building.

8.  The storage of goods, wares or merchandise on the premises will not be permitted except in areas specifically designated by Landlord for storage.  No auction, public or private, will be permitted in the premises.  Articles of unusual size or weight and articles which exceed the design floor weight of the building are not permitted in the building, unless permitted by Landlord in writing.

9.  The requirements of Tenant will be attended only upon application at the office of the building.  Landlord’s employees shall not perform any work or do anything outside of their regular duties unless under special instruction from the office of the building, and no such employee shall admit any person (Tenant or otherwise) to any office without specific instructions from the office of the building.

10.  All keys shall be obtained from Landlord, and all keys shall be returned to Landlord upon termination of this lease.  Tenant shall not change the locks or install other locks on the doors.

11.  Any Tenant using the premises after regular business hours or on non-business days shall lock any entrance doors to the building used by Tenant immediately after entering or leaving the building.  Tenant, his employees, agents or associates, or other persons entering or leaving the building when it is so locked may be required to sign the building register when so doing, and any watchman in charge may refuse to admit Tenant or any of Tenant’s employees, agents or associates, or any other person to the building while it is so locked without a pass previously arranged or other satisfactory identification showing such person’s right to access to the building at such time.  However, Landlord assumes no responsibility whatsoever in connection therewith and shall not be liable for any damage resulting from any error in regard to any such pass or identification or from the admission of or refusal to admit, any person to said building.

12.  Tenant shall be deemed to have read these rules and to have agreed to abide by them as a condition to his occupancy of the space herein leased.  THIS LEASE AGREEMENT WILL NOT BECOME EFFECTIVE OR A BINDING AGREEMENT BETWEEN THE PARTIES UNTIL IT HAS BEEN COUNTERSIGNED BY CITINATIONAL-BUCKEYE BUILDING CO. AND A COPY EXECUTED BY ALL THE PARTIES HERETO HAS BEEN RETURNED TO THE TENANT.

LANDLORD:		TENANT:
CITINATIONAL-BUCKEYE BUILDING CO.,		CITY NATIONAL BANK,
a California limited partnership		a national banking association
By: OLIVE-SIXTH BUCKEYE CO., General Partner
		By:	/s/ Frank P. Pekny
		Title:		VC & CFO
By:	/s/ Bram Goldsmith
	Bram Goldsmith General Partner
		By:	/s/ Richard Sheehan
		Title:			SVP General Counsel

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EXHIBIT A

[GRAPHIC]

		FLOOR 1	[GRAPHIC]
		City National Bank
FINAL		606 Olive Street Los Angeles, CA.
Suite #: 100 ID#: 1—02	Tenant:  City National Bank	STEVENSON SYSTEMS INC	[LOGO]
		CNB
Date: 7/8/91		© 1990 ALL RIGHTS RESERVED

[GRAPHIC]

		FLOOR 2		[GRAPHIC]
		City National Bank
FINAL		606 Olive Street Los Angeles, CA.
Suite #:  200 ID#: 2—00	Tenant:  City National Bank	STEVENSON SYSTEMS INC	[LOGO]
		CNB
Date: 10/3/91		© 1990 ALL RIGHTS RESERVED

[GRAPHIC]

		FLOOR 3	[GRAPHIC]
		City National Bank
FINAL		606 Olive Street Los Angeles, CA.
Suite #: 300 ID#: 3—08	Tenant:  City National Bank	STEVENSON SYSTEMS INC	[LOGO]
		CNB
Date: 10/3/91		© 1990 ALL RIGHTS RESERVED

[GRAPHIC]

	FLOOR 6	[GRAPHIC]
	City National Bank
	606 Olive Street Los Angeles, CA.
	STEVENSON SYSTEMS INC	[LOGO]
FLOOR PLATE
	CNB
	© 1990 ALL RIGHTS RESERVED

[GRAPHIC]

		FLOOR 9	[GRAPHIC]
		City National Bank
FINAL		606 Olive Street Los Angeles, CA.
Suite #: 900 ID#: 9—13	Tenant:  City National Bank	STEVENSON SYSTEMS INC	[LOGO]
		CNB
Date: 8/13/92		© 1990 ALL RIGHTS RESERVED

[GRAPHIC]

	FLOOR 20	[GRAPHIC]
	City National Bank
	606 Olive Street Los Angeles, CA.
	STEVENSON SYSTEMS INC	[LOGO]
FLOOR PLATE
	CNB
	© 1990 ALL RIGHTS RESERVED

Supplementary Parking Agreement

This Parking Agreement is made as of September 30, 1996, between CITINATIONAL BUCKEYE BUILDING CO., hereinafter designated the Landlord, and CITY NATIONAL BANK, a national banking association, hereinafter designated the Tenant, as a supplement to Article 6 of Tenant’s Lease of Premises in the City National Bank Building, of the same date, to which this Supplementary Parking Agreement is attached.

1. DESIGNATED AUTOMOBILES.  Only specifically designated automobiles shall be entitled to the use of the parking rights herein granted.  Such automobiles shall be designated by the Tenant to the Landlord and shall be clearly identified with parking identification stickers furnished by the Landlord or by other suitable means specified by the Landlord.  It is expressly understood that only such specifically designated and identified automobiles shall be entitled to park pursuant to this agreement and that the said identification stickers shall not be transferable from the designated automobile(s) to any other automobile.  Any automobile parked in the parking area without such identification sticker may be towed away at the expense of the owner, as provided by the applicable city or county ordinance.

2. OPERATIONS.  The rights herein granted are personal to the Tenant only and are not assignable or transferable in any manner whatsoever without Landlord’S written consent first had and obtained.  It is expressly understood that Tenant shall not have the right to allow any other person to exercise the rights herein granted, even though the Tenant is not himself exercising such right on a particular day or during any particular period of time.

Landlord expressly reserves the option as to whether or not an attendant will be furnished for the automobile parking area or areas.  If no attendant is furnished, the Landlord will provide suitable designation of the parking area to be utilized by Tenant.

3. NON-LIABILITY. Except for Landlord’S negligence as herein set forth, Landlord shall not be liable, and Tenant hereby waives any and all claims for personal injury and property damage of any kind, including but not limited to theft, fire damage, collision damage, vandalism and damage of any kind to any automobile of Tenant or its agents or employees while entering, leaving or parked under this agreement at any time either during normal building business hours or otherwise.  Further, under no circumstances shall Landlord be liable, and Tenant hereby waives any and all claims for theft, vandalism or damage of any kind to any equipment installed in any automobile including but not limited to stereos, radios, tape decks, compact disc players, CB radios and television sets, nor for any packages, clothing, briefcases (and the contents thereof or any other articles left in any automobile, whether in the passenger compartment, the trunk, the glove compartment or elsewhere.  Landlord shall only have limited and specific responsibility for any injuries or damages caused by the negligence of Landlord, its agents and employees while acting within the scope of their employment under this agreement.

Landlord shall not be liable to Tenant in damages or otherwise, nor shall the Landlord be deemed in default hereunder because of the Tenant’S inability to park the automobile(s) as hereinabove contemplated, due to force majeure, strikes, lockouts or other labor troubles, riots, war, insurrection, failure of any public utility to furnish service, accidents, insufficient vacant parking area, or any other similar or dissimilar causes beyond the control of the Landlord.  There shall be no reduction or abatement of the consideration payable hereunder by reason of any such failure or occurrence.  There shall be no abatement of consideration for vacations or holidays.

4.  RULES AND REGULATIONS.  Landlord shall have the right to promulgate, and from time to time amend, such non-discriminatory and reasonable rules and regulations as, in the sole judgment of the Landlord, are necessary for the efficient operation of the parking areas, limiting, restricting and regulating the parking privileges herein granted, and all such rules and regulations so made by the Landlord, after notice thereof to the Tenant, shall be binding upon the Tenant and become conditions precedent to the Tenant’s right to exercise the parking rights herein granted.  Violation of any such rules and regulations shall be deemed a material breach by Tenant of this agreement.

5.  RIGHT APPURTENANT.  Tenant and Landlord previously hereto, or concurrently herewith, have also entered into an Office Building Lease, whereby Landlord demised to Tenant certain office space in the building served by the aforesaid parking area or areas and the execution of this License constitutes the exercise of a right appurtenant to said Office Building Lease.  It is expressly a condition precedent to Tenant’S right to exercise the parking rights herein granted that Tenant be not in default under the aforesaid Office Building Lease and any default by Tenant’S under said Office Building Lease shall constitute a default under this Agreement precluding Tenant’S rights to park hereunder until such default be cured.  Any extension (or termination) of said Lease shall ipso facto extend (or terminate) this Agreement.

6.  Landlord’S PARKING OPERATOR.  Landlord may assign its interest under agreement to the parking operator with whom Landlord has contracted for the operation and management of the aforesaid parking area or areas.  Upon such assignment, the parking operator shall have all the rights and duties or Landlord hereunder, including, but not limited to, the right to enforce the terms, covenants and conditions of this agreement and to receive payment of the consideration provided herein.

7.  ATTORNEY’S FEES. In the event it becomes necessary for either party to file any action or actions for the enforcement of any of the terms, covenants or conditions of this agreement, or if either party necessarily intervenes in, or becomes a party, or is made a party  to any action or actions accruing out of this agreement in order to protect its rights, then losing party will pay to prevailing party a reasonable attorney’s fee in such action or actions, which fee shall be fixed by the court in such action.

Executed at Los Angeles, California on the date first above written.

Landlord:		Tenant:
CITINATIONAL-BUCKEYE BUILDING CO.,		CITY NATIONAL BANK
a California limited partnership		a national banking association
By:  OLIVE-SIXTH BUCKEYE CO.,
General Partner
By:	/s/ Bram Goldsmith	By:	/s/ Frank Pekny
	Bram Goldsmith, General Partner
		Title:		VC & CFO

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FIRST LEASE ADDENDUM

This First Lease Addendum (“Addendum”) dated as of May 1, 1998 is entered into by and between CITINATIONAL-BUCKEYE BUILDING CO., a California limited partnership, 606 South Olive Street, Suite 1800, Los Angeles, California 90014, hereinafter designated the LANDLORD, and CITY NATIONAL BANK., a national banking association, 400 North Roxbury Drive, Beverly Hills, California 90210, hereinafter designated the TENANT.

RECITALS

LANDLORD and TENANT have entered into that certain Office Building Lease, dated as of the 30th day of September, 1996 (the “Original Lease”) pursuant to which LANDLORD has leased to TENANT and TENANT has leased from LANDLORD the premises consisting of Suite 100 located on the Ground Floor and the entire 2nd, 3rd, 6th, 9th and 20th Floors in the CITINATIONAL BANK BUILDING, 606 South Olive Street, Los Angeles, California 90014 (the “Building”), as more particularly described in the Lease (the (“Demised Premises”).

In addition to the original Demised Premises, TENANT desires to lease from LANDLORD and LANDLORD desires to lease to TENANT the additional premises of 11,536 rentable square feet, consisting of a 5,760 square foot portion of the fourth floor, known as Suite 400, and a 5,776 square foot portion of the twenty-first floor, known as Suite 2110, as shown on the attached plan, marked Exhibit “A” (the “Additional Space”) on the terms and conditions set forth herein.  The original Demised Premises and the Additional Space are collectively referred to herein as the “Premises”.  The Original Lease together with this First Lease Addendum are collectively known as the “Lease”.

NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties agree subject to Paragraph 6 below, to amend the lease as follows:

1. DEMISED PREMISES.  Article 1 is amended to add additional premises of 11,536 rentable square feet, as shown on the attached plan, marked Exhibit “A” (the “Additional Space”) as “Additional Premises”, that 5,776 square foot portion of the twenty-first floor, known as Suite 2110, commencing upon May 1, 1998 with rent commencing on June 1, 1998, and that 5,760 square foot portion of the fourth floor, known as Suite 400, commencing upon August 1, 1998 for the balance of the lease term through the 31st day of December, 2006 (subject to TENANT’S option to extend the term for an additional five (5) years thereafter pursuant to the terms and conditions set forth in Article 43 of the Original Lease and subject to increases as otherwise

1

provided in the lease.

2. RENT.  Article 2 is amended to increase the total monthly base rent for the leased premises, based on base monthly rent for the Additional Premises of $7,220.00 (21st floor space) commencing June 1, 1998 and $5,760.00 (4th floor space) commencing August 1, 1998 and as follows:

From June 1, 1998 through July 31, 1998	$	87,676.00	per month
From August 1, 1998 through December 31, 2001	$	93,452.00	per month
From January 1, 2002 through December 31, 2006	$	102,822.00	per month

3. INCREASE OF TAXES AND OPERATING COSTS.  (a) Effective June 1, 1998, Article 20 is amended to increase the percentage to be paid by TENANT to LANDLORD as additional rent,, from 24.82% to 27.14% of the amount of such increase in Taxes over the base year and from 24.82% to 27.14% of the amount of such increase in Operating Costs over the base year, assessed under Article 20 of the lease.

(b) Effective August 1, 1998, Article 20 is amended to increase the percentage to be paid by TENANT to LANDLORD as additional rent, from 27.14% to 29.46% of the amount of such increase in Taxes over the base year and from 27.14% to 29.46% of the amount of such increase in Operating Costs over the base year, assessed under Article 20 of the lease.

4. OPTION TO TERMINATE.  Subsection C of Article 42 is amended to increase from $389,000.00 to $486,000.00, the amount to be paid by TENANT to LANDLORD, in the event of exercise of TENANT’S one-time option to terminate the lease, subject to all other terms and conditions of Article 42 of the lease, and that TENANT shall reimburse LANDLORD for the unamortized cost of the improvements to be paid for by LANDLORD.

5. TENANT IMPROVEMENTS.  (a) LANDLORD grants to TENANT (and agrees to provide to TENANT) a leasehold improvement allowance for the additional premises on the 21st floor (Suite 2110) in an amount not to exceed Fifty-seven thousand, seven hundred-sixty dollars ($57,760.00), for remodeling and construction of permanent improvements in and to the premises.  All work shall be performed in accordance with Article 7 of the “Original Lease”.

(b) LANDLORD agrees to provide to TENANT, the leasehold improvements for construction of the additional premises on the 4th floor (Suite 400) in accordance with the plans prepared for CNB by Murrie G. Alcorn & Assoc. drawing “CN-1”, Job No. 96075 plans, dated December 9, 1997, using building standard materials. CBBC will provide stub-up conduits for data and telephone cabling, CNB will install wiring, faceplates, and terminations.  CNB will furnish and install at its expense, its furniture systems shown on the plans.  In the event TENANT desires to make changes to such plans, TENANT shall pay for the cost of construction

2

of any and all changes to said plans, subject to the provisions of Article 7 of the Original Lease.

(c)  TENANT agrees that LANDLORD’S agreement to provide the Premises Leasehold Allowance as provided in subsections (a) and (b) of this Section is conditioned upon occurrence of no default on the part of TENANT under this Lease during the Term of this Lease.  If a default shall occur during the Term of this Lease then the aggregate amount of the Premises Leasehold Allowance provided to TENANT prior to such default shall become immediately due and owing as additional rent under this Lease.

6.  CONDITION OF THE PREMISES.  TENANT agrees that the “Additional Premises” are being leased in an “as-is” condition, except as provided in paragraph 5, herein.  TENANT agrees that TENANT’S obligation to pay the monthly base rent set forth in paragraph 2 herein shall commence on the dates provided therein, regardless of any delay in occupancy or in the event substantial completion of tenant improvements are not achieved by such dates.

7.  Except as amended hereinabove, all terms, covenants, conditions, of this lease are hereby confirmed and shall remain the same and unchanged, and shall apply to the Additional Leased Premises as well as the original demised premises.

Executed at Beverly Hills, California as May 1, 1998.

LANDLORD		TENANT
CITINATIONAL-BUCKEYE BUILDING CO.,		CITY NATIONAL BANK
a California Limited Partnership		a National Banking Association
By: OLIVE-SIXTH BUCKEYE CO.,
General Partner
By:	/s/ Bram Goldsmith	By:	/s/ Harry Topping
	Bram Goldsmith
	General Partner	Title:		SVP

3

SECOND LEASE ADDENDUM

This Second Lease Addendum (“Addendum”) dated as of November 13, 1998 is entered into by and between CITINATIONAL-BUCKEYE BUILDING CO., a California limited partnership, 606 South Olive Street, Suite 1010, Los Angeles, California 90014, hereinafter designated the LANDLORD, and CITY NATIONAL BANK, a national banking association, 400 North Roxbury Drive, Beverly Hills, California 90210, hereinafter designated the TENANT.

RECITALS

LANDLORD and TENANT have entered into that certain Office Building Lease, dated as of the 30th day of September, 1996 (the “Original Lease”) pursuant to which LANDLORD has leased to TENANT and TENANT has leased from LANDLORD the premises consisting of Suite 100 located on the Ground Floor and the entire 2nd, 3rd, 6th, 9th and 20th Floors in the CITINATIONAL BANK BUILDING, 606 South Olive Street, Los Angeles, California 90014 (the “Building”), as more particularly described in the Lease (the (“Demised Premises”).

In addition to the original Demised Premises, TENANT entered into that certain First Lease Addendum, dated May 1, 1998, whereby TENANT leased from LANDLORD and LANDLORD leased to TENANT the additional premises of 11,536 rentable square feet, consisting of a 5,760 square foot portion of the fourth floor, known as Suite 400, and a 5,776 square foot portion of the twenty-first floor, known as Suite 2110, as more particularly described in the First Lease Addendum (the “Additional Premises”).

In addition to the original Demised Premises, TENANT desires to lease from LANDLORD and LANDLORD desires to lease to TENANT the additional premises of 3,104 rentable square feet, consisting of a 3,104 square foot portion of the tenth floor, known as Suite 1020, as shown on the attached plan, marked Exhibit “A” (the “Additional Space”) on the terms and conditions set forth herein.  The original Demised Premises and the Additional Space are collectively referred to herein as the “Premises”.  The Original Lease together with the First Lease Addendum and this Second Lease Addendum are collectively known as the “Lease”.

1

NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties agree subject to Paragraph 6 below, to amend the lease as follows:

1. DEMISED PREMISES.  Article 1 is amended to add additional premises of 3,104 rentable square feet, as shown on the attached plan, marked Exhibit “A” (the “Additional Space”) as “Additional Premises”, that 3,104 square foot portion of the tenth floor, known as Suite 1020, commencing upon December 1, 1998 with rent commencing on December 1, 1998, for the balance of the lease term through the 31st day of December, 2006 (subject to TENANT’S option to extend the term for an additional five (5) years thereafter pursuant to the terms and conditions set forth in Article 43 of the Original Lease and subject to increases as otherwise provided in the lease.

2.  RENT. Article 2 is amended to increase the total monthly base rent for the leased premises, based on base monthly rent for the Additional Premises of $3,880.00 (Suite 1020) commencing December 1, 1998 as follows:

From December  1, 1998 through December 31, 2001	$	97,316.00	per month
From January  1, 2002 through December 31, 2006	$	107,077.00	per month

3.  INCREASE OF TAXES AND OPERATING COSTS.  Effective December 1, 1998, Article 20 is amended to increase the percentage to be paid by TENANT to LANDLORD as addtional rent,, from 29.46% to 30.71% of the amount of such increase in Taxes over the base year and from 29.46% to 30.71% of the amount of such increase in Operating Costs over the base year, assessed under Article 20 of the lease.

4.  CONDITION OF THE PREMISES.  TENANT agrees that the “Additional Premises” are being leased in an “as-is” condition, except that LANDLORD will repaint the “Additional Premises” (Suite 1020) with building standard paint to match the existing color of the premises.  TENANT agrees that TENANT’S obligation to pay the monthly base rent set forth in paragraph 2 herein shall commence on the dates provided therein, regardless of any delay in occupancy or in the event substantial completion of tenant improvements are not acheived by such dates.

2

5. Except as amended hereinabove, all terms, covenants, conditions, of this lease are hereby confirmed and shall remain the same and unchanged, and shall apply to the Additional Leased Premises as well as the original demised premises.

Executed at Beverly Hills, California as November 20, 1998.

LANDLORD		TENANT
CITINATIONAL-BUCKEYE BUILDING CO.,		CITY NATIONAL BANK
a California Limited Partnership		a National Banking Association
By: OLIVE-SIXTH BUCKEYE CO.,
General Partner
By:	/s/ Bram Goldsmith	By:	/s/ Harry Topping
Bram Goldsmith
General Partner		Title:		SVP

3

[GRAPHIC]

				FLOOR 10	[GRAPHIC]
				City National Bank
FINAL				606 Olive Street Los Angeles, CA.
Suite #: 1020 ID#: 10—15	Tenant:  Stevenson & DePasquale	Suite Usable: Corridor Ext:	2637 0	STEVENSON SYSTEMS INC	[LOGO]
	Current	Usable:	2637	CNB
				© 1990 ALL RIGHTS RESERVED

EX-10.45

Exhibit 10.45

5TH FLOOR

FIRST LEASE ADDENDUM

This FIRST LEASE ADDENDUM (“Addendum”) is made and entered into as of November 1, 2002 (the “Effective Date”) by and between CITINATIONAL-BUCKEYE BUILDING CO., a California limited partnership (“Landlord”), and CITY NATIONAL BANK, a national banking association (“Tenant”), to amend and supplement that certain Office Building Lease between Landlord and Tenant, dated as of August 1, 2000 (the “Lease”).

1.             Terms. All capitalized terms used in this Addendum that are not otherwise defined herein shall have the same meanings as in the Lease.

2.             Amendment of Paragraph 1 of the Lease.  Notwithstanding anything to the contrary contained in Paragraph 1 of the Lease, the term of the Lease shall terminate on December 31, 2006.

3.             Amendments of Paragraph 7 of the Lease.  Notwithstanding anything to the contrary contained in Paragraph 7 of the Lease, in no event shall Landlord require any completion bond in connection with any Tenant improvements, alterations or repairs and in no event shall the administrative fee for Landlord’s administration of Tenant work under Paragraph 7 exceed 10% of the contract sum.  Furthermore, notwithstanding anything to the contrary contained in Paragraph 7 of the Lease, at the expiration of the term of the Lease, Tenant shall not be obligated to remove any alterations made to any portion of the leased premises.

4.             Amendment of Paragraph 10 of the Lease.  The second sentence of Paragraph 10 of the Lease is hereby amended to read as follows:

“Notice shall be deemed effective upon receipt of personal delivery or three (3) days after deposit in any public depository of the United States mail or one (1) business day after delivery to an overnight courier service.”

5.             Amendment of Paragraph 11 of the Lease.  Paragraph 11 of the Lease is hereby amended by adding the following:

“Landlord shall procure and obtain comprehensive public liability insurance naming Tenant as an additional insured in the minimum amount of $1,000,000 combined single limit.  In addition, Landlord shall procure and maintain 100% replacement cost insurance for the Building.”

6.             Amendment of Paragraph 12 of the Lease.  Notwithstanding anything to the contrary contained in Paragraph 12 of the Lease, Landlord shall not change the address and/or name of the Building without sixty (60) days prior notice to Tenant and Tenant’s approval which shall not be unreasonably withheld, conditioned or delayed.

7.             Amendment of Paragraph 13 of the Lease.  Paragraph 13 of the Lease is hereby amended in its entirety to read as follows:

“If said Building shall be totally destroyed, this Lease shall thereupon terminate.  If said Building or the leased premises shall be damaged by fire, earthquake or any

1

other cause without fault or neglect of Tenant, so that the leased premises become untenable, then, if the leased premises cannot be made tenantable within one hundred twenty (120) working days after the date of such damage, this Lease may be terminated by Tenant; in the event the leased premises cannot be made tenantable within one hundred eighty (180) days after the date of such damage, this Lease may be terminated by either party.  In any event, if the leased premises is rendered partially and permanently untenantable by fire, earthquake or other caused without the fault or neglect of Tenant, the monthly rental shall be adjusted in the portion that the rental value of the untenantable portion of the leased premises bears to the rental value of the whole thereof.”

8.             Amendment of Paragraph 22 of the Lease.  Notwithstanding anything to the contrary contained in the Lease, any subordination by Tenant to any lienholder affecting the leased premises shall be contingent upon Tenant receiving an acceptable non-disturbance agreement.

9.             Amendment of Paragraph 29 of the Lease.  Paragraph 29A of the Lease is hereby amended in its entirety to read as follows:

“It shall, at Landlord’s option, be deemed at breach of this Lease if (1) the Tenant defaults (a) in the making of any payment of money pursuant to this Lease within five (5) days after written notice thereof is given by Landlord to Tenant, or (b) in pursuing any other term, covenant, condition, provision of this Lease if said default under this Paragraph 29 continues to exist at the expiration of thirty (30) business days after notice thereof given by Landlord to Tenant, or (2) or Tenant shall default with respect to any other lease between (a) Landlord and Tenant or (b) any parent company or subsidiary company or affiliate or agent of Landlord and Tenant.”

10.          Additional Paragraph 40 to the Lease.  The Lease is hereby amended to add the following as a new Paragraph 40:

“Landlord agrees to indemnify, protect, defend and hold Tenant and its agents, employees, invitees and representatives, free and harmless from and against any and all losses, damages, liabilities, judgments, costs, claims, expenses, penalties, fines and fees arising out of, relating to, or involving the storage or use of hazardous substances on the Property (i) by Landlord or (ii) by other tenants of the Building of which Landlord has actual notice and which Landlord fails to cause such other tenants to abate within a reasonable time. Further, if a release of hazardous substances occurs in the Building due to the acts of Landlord, or other tenants of the Building which release is not abated within a reasonable time, then in addition to its rights under the foregoing indemnity, Tenant shall have the right to terminate any or all of its Leases for space in the Building upon sixty (60) days’ notice to Landlord without penalty or liability of any kind, and in such event Tenant shall not have to pay any early termination fee presently provided in the Leases.  Provided, however, the foregoing right of termination shall apply only if and to the extent that (i) Landlord has actual notice of the hazardous substance release and Landlord fails to cause an abatement thereof to occur within a reasonable time, and (ii) the release materially interferes with the continued occupation of the leased space by Tenant, its employees and its customers.”

2

11.          Additional Paragraph 41 to the Lease.  The Lease is hereby amended to add the following as a new paragraph 41.

“Landlord shall not lease any space in the Building to the other tenants for purposes other than general office uses on the first 10 floors without Tenant’s prior written approval which shall not be unreasonably withheld or delayed.  In the event Landlord breaches its agreement to limit the use of the other tenants in the Building in accord with the restrictions outlined above, Tenant shall have the right at any time to terminate this Lease it has with Landlord upon sixty (60) days written notice without penalty or the payment of any termination fee, which right shall not be deemed waived by the failure of Tenant to exercise such right for any time period after such right arises.”

12.          Additional Paragraph 42 to the Lease.  The Lease is hereby amended to add the following as a new paragraph 42.

“Landlord shall at all times operate, repair and maintain the Building and the parking garage serving the Building and shall provide services including janitorial, utilities, heating, ventilation and air conditioning in a manner consistent with and comparable to those being provided by owners of other first-class buildings of comparable size and age to the Building in downtown Los Angeles.”

13.          Additional Paragraph 43 to the Lease.  The Lease is hereby amended to add the following as a new paragraph 43.

“Tenant shall have the one-time right to terminate this Lease on June 30, 2004 upon no less than twelve (12) months prior written notification to the Landlord.  Upon written notification, Tenant shall deliver to Landlord a termination fee in the amount of unamortized (over the remaining term of this Lease) tenant improvements, leasing commissions and three (3) months base rent.”

14.          No Other Modifications.  All prior agreements, understandings, and discussions with respect to the subject matter set forth in this Addendum are hereby superseded by this Addendum.  Except as modified by the terms of this Addendum, all provisions of the Lease shall remain unchanged and are in full force and effect, and shall continue to be binding on the parties hereto.

3

IN WITNESS WHEREOF, Landlord and Tenant have entered into this Addendum as of the Effective Date.

TENANT:				LANDLORD:
CITY NATIONAL BANK,				CITINATIONAL-BUCKEYE BUILDING CO.,
a national banking association				a California limited partnership
				By:	Olive-Sixth Buckeye Co.,
					its general partner
By:	/s/ Harry Topping			By:		/s/ Bram Goldsmith
Name:			Harry Topping			Bram Goldsmith,
Title:		SVP				General Partner

4

Office Building Lease

This Lease, made and executed as of the 1st day of August, 2000, between CITINATIONAL-BUCKEYE BUILDING CO., a California limited partnership, 606 South Olive Street, , Los Angeles, California 90014, hereinafter designated the LANDLORD, and CITY NATIONAL BANK, a national banking association, 400 North Roxbury Drive, Beverly Hills, California 90210, hereinafter designated the TENANT, consists of the following agreements:

1.  DEMISED PREMISES.  USE AND TERM.  EARLY OCCUPANCY.  For and in consideration of the covenants hereinafter mentioned, the Landlord leases to the Tenant and the Tenant hereby leases from the Landlord the premises known as Suite 500  located on a the 5th        Floor (as per the attached plan, marked Exhibit “A”) in the CITY NATIONAL BANK BUILDING, 606 South Olive Street, City of Los Angeles, California, 90014 to be used by said Tenant as and for administrative offices for a bank or for general office purposes and for no other purpose, for the term of 5 years commencing on October 15, 2000 and ending on October 14, 2005.

2.  RENT.  The Tenant agrees to pay to the Landlord as rent for said leased premises, monthly installments of Nineteen Thousand Five Hundred Dollars ($19,500.00), each installment payable in advance on the 1st day of each and every calendar month during the term hereof, commencing on October 15, 2000, in lawful money of the United States of America, which the Tenant agrees to pay to Landlord without deduction or offset, prior notice or demand, at the office of the building or such place as the LANDLORD may designate.  Said rent is subject to increases as provided in Articles 20, 36 and as otherwise hereinafter provided.  In the event the actual commencement date of this lease should fall on other than the 1st day of a calendar month, then the rental for the first and last month of the lease term will be prorated on a calendar month basis. Parking charges are payable as additional rent.

3.  SUBLEASE AND ASSIGNMENT.  Neither Tenant, nor Tenant’s legal representatives or successors shall mortgage,  encumber, assign or transfer this lease or sublease, or use or occupy or permit the demised premises or any part thereof to be used or occupied by others, without the prior written consent of Landlord in each instance, which consent shall not be unreasonably withheld or delayed in accordance with the express terms and conditions of this Article.  Any such mortgage, encumbrance, sublease or assignment or permission without such consent shall be voidable, at the option of Landlord and, at the option of Landlord, shall terminate this lease.  If the demised premises or any part thereof be occupied by any party other than Tenant, without Landlord’s consent, Landlord may at its option, collect rent from the occupant, and apply the net amount collected to the rent herein reserved but no such occupancy or collection shall be deemed a waiver of the conditions of this Article or the acceptance of the occupant as Tenant or Subtenant or a release of Tenant from the further performance by assignee of the obligations on the part of Tenant under this lease.

No sublease, or assignment may become effective unless and until Tenant has given Landlord at least thirty (30) days prior written notice of such proposed bonafide sublease or assignment, such notice to be received by Landlord at least thirty (30) days prior to the proposed commencement date of such proposed sublease or assignment.  Said notice shall state and include the following:  the name of the proposed transferee; the status of the proposed transferee either as, an individual, partnership, corporation or the like; the present business address of the proposed transferee; a present financial statement of the proposed transferee; the stated use or purpose and business to be conducted under the proposed sublease or assingment the proposed commencement and termination date of such proposed sublease or assingment: and whether all or portion of the leased premises is proposed to be subleased under such proposed sublease.

Tenant may sublease or assign all or a portion of the demised premises only upon the obtaining of Landlord’s written consent and subject to the following express conditions: A.  That Tenant does not sublease or assign to more than a reasonable number of transferees which number shall be subject to Landlord’s approval; B.  That each transferee shall be subject to the prior written approval of Landlord which approval shall not be unreasonably withheld, but without limiting the generality of the foregoing, it shall be reasonable for Landlord to deny such approval if: (1) The use to be made of the demised premises by the proposed transferee is (a) not generally consistent with the character and nature of all other tenancies in the Building or with Landlord’s leasing policy, or (b) a use which conflicts with any so called “exclusive” then in favor of another tenant of the Building or of any of Landlord’s other Buildings which are in the same complex as the Building, or (c) any use which is the same as that stated in any percentage lease to another tenant of the Building or any of Landlord’s other Buildings which are in the same complex as the Building or (d) a use which would be prohibited by any other portion of this lease (including but not limited to any rules and regulations then in effect): or (2) The character, moral stability, reputation and financial responsibility of the proposed transferee is not reasonably satisfactory to Landlord or in any event not at least equal to those which were possessed by Tenant as of the date of execution of this lease; C.  That in no event shall the term of such sublease or assingment be for a longer period than the unexpired term of this lease; D.  That each sublease or assignment shall expressly provide that it is subject and subordinate to this lease; E.  That Tenant shall pay to Landlord, Landlord’s then standard processing fee which as of the date of execution of this is currently the sum of$1,000.00 F.  That the proposed transferee shall execute an agreement on Landlord’s then standard form pursuant to which it shall agree to perform faithfully and be bound by all of the terms, covenants, conditions, provisions and agreements of this lease for the period covered by the sublease or assignment to the extent of the space subleased; G.  That an executed duplicate original of each sublease or assignment and assumption agreement in a form acceptable to Landlord, together with all sums due, shall be delivered to Landlord within five (5) days after the execution thereof and any such sublease or assignment shall not be binding upon Landlord until the delivery of the foregoing to Landlord and the execution and delivery of Landlord’s consent thereto and ; H.  That Landlord shall have the right upon written demand to require the transferee to pay the rent under the sublease or assignment directly to the Landlord and/or to require Tenant to pay to Landlord a sum equal to (i) Fifty percent (50%) of any rent or other consideration paid to Tenant by any transferee which is in excess of the rent then being paid by Tenant to Landlord to the extent of, and as apportionable to the space sought to be subleased pursuant to the terms of this lease, after reduction ofor the reasonable and necessary direct costs actually incurred by Tenant to obtain the sublease or assignment, such as e.g. any brokerage feee and remodeling cost, but with no reduction for any indirect costs, such as e.g. rent and expenses paid by Tenant while the space sought to be sublease or assigned is vacant, and (ii) fifty percent (50%) of any other profit or gain realized by Tenant from any such subleasing.  All sums payable hereunder by Tenant shall be paid to landlord as additional rent immediately upon receipt thereof by Tenant.  Any such rent, profit, gain or other consideration, or sum equal to same, as set forth herein, not so paid to Landlord as herein required, shall be and is deemed to be held and retained by Tenant in trust for the sole benefit of

Landlord, and, whether actually held or retained by Tenant or not, shall be and is deemed to be held and retained by Tenant in trust for the sole benefit of Landlord, and whether actually held or retained by Tenant or not, shall be chargeable to Tenant and payable to Landlord upon demand.  Any failure or refusal by Tenant to pay Landlord same shall constitute a default and material breach of the terms, covenants and conditions of this lease subjecting Tenant to all the rights and remedies of Landlord under this lease and applicable law.

The consent by Landlord to a sublease or assignment shall not in any way be construed to relieve Tenant or the transferee from obtaining the express consent in writing of Landlord to any further transfer.  Any further transfer shall require the written consent of Tenant and any previous transferee except that Tenant and any transferee hereunder expressly waive their right to consent to any further subleasing of the premises on their behalf by Landlord. The consent by Landlord to a sublease shall not in any way be construed to release Tenant from any liability whether past, present or future under this lease or to release Tenant from any liability under this lease because of Landlord’s failure to give notice of default under or in respect to any of the terms, covenants, conditions, provisions or agreements of this lease.  Notwithstanding the consent of Landlord to such sublease, Tenant shall remain liable for payment of all bills rendered by Landlord for the rent and other charges incurred by the transferee for services and materials supplied to the demised premises.  If Tenant is a corporation which, under the then current guidelines published by the Commissioner or Corporations of the State of California, is not deemed a public corporation, or if Tenant is an unincorporated association or a partnership, the transfer assignment, or hypothecation of any stock or interest in such corporation, association or partnership in the excess of twenty-five (25%) percent shall be deemed a proposed transfer within the meaning of this Article, including the requirement of obtaining Landlord’s prior written consent.  Landlord hereby consents to the assignment, subletting, or transfer of this lease by Tenant to any corporation resulting from a consolidation, or to the surviving corporation in case of merger, to which consolidation or merger Tenant shall be party, or to any bank acquiring all or substantially all of the assets of Tenant, or to any corporation resulting from a reorganization of Tenant.

4.  EXPIRATION.  If Tenant shall hold-over after the expiration of the lease term with the written consent of Landlord, such holding shall be construed to be a tenancy only from month-to-month, but otherwise in accordance with the terms and conditions hereof insofar as they are applicable, but Tenant shall pay the rate Landlord is then offering to prospective tenants for the herein demised premises for such further time as Tenant may hold the same; but nothing in this Article shall be construed as consent by Landlord to the occupancy or possession of the demised premises by Tenant after the expiration of the term hereof.  If Tenant holds over after the termination of this lease without express written consent of the Landlord, Tenant shall pay to Landlord rent at the rate landlord is then offering to prospective tenants for the herein demised premises (but in no event less than two times the monthly rental which was payable for the last month of the lease term), plus sums payable under Article 20 and other sums payable as rent under this lease for the period during which Tenant retains possession of the premises.  Nothing herein shall be construed as a waiver of any of the Landlord’s rights or remedies to recover possession of the demised premises.  Tenant shall be liable to Landlord for any and all reasonably related damages suffered by Landlord including but not limited to any damages to the demised premises and any lost rentals, profits or leases suffered because of Tenant’s holdover of the premises without the written consent of the Landlord.  This lease shall terminate on the date set forth without the necessity of notice from either party.

If at any time during the term of this lease, Tenant should fail to keep and perform all the terms, covenants and conditions of this lease to be kept and performed by Tenant, Landlord, at its option, may utilize said deposit, or any part thereof, for any damages or rents which may accrue or which may be payable to it by the Tenant (but Landlord shall not be required to do so) or Landlord may retain said deposit, or any part thereof, until this lease is terminated, and at such time appropriate and apply said sum or so much thereof as may abe necessary to compensate landlord for all loss or damage sustained or suffered by Landlord or for any unpaid rent due to any default on the part of Tenant.  In the event Landlord elects to utilize all or any part of the security deposit as aforesaid, Tenant shall, upon written notice from Landlord, forthwith deposit with Landlord such sum as is necessary to replenish the security deposit to its original amount, it being the express intent of Tenant and Landlord that Landlord shall hold a security deposit in the aforesaid amount at all times during the entire term of this lease and any extension or renewal thereof.  Tenant’s failure to so restore the full amount of the said security deposit within (5) days after written notice from Landlord shall constitute a material breach of this lease.  The parties agree that the provisions of this Article 5 shall not operate as a limitation upon the amount of damages to which Landlord may be entitled by virtue of any defaults by Tenant.

6.  AUTOMOBILE PARKING.  Automobile parking subject to availability, shall be extended to Tenant’s invitees, in common with the invitees of other tenants, at reasonable parking rates and upon other conditions established by Landlord from time to time in the parking area where designated by Landlord.  Landlord reserves the sole right and option as to whether or not an attendant will be furnished for such automobile parking area or areas.  If no attendant is furnished, Landlord will provide suitable designation of the parking area to Tenant.  This right to park will be solely for the accommodation of the Tenant and Tenant expressly agrees that Landlord assumes no responsibility of any kind whatsoever in reference to such automobile parking areas or the use thereof by the Tenant, its employees or invitees.

7.  ALTERATIONS-FIXTURES.  The premises shall not be altered, repaired or changed without the written consent of Landlord first had and obtained, , except that Tenant shall have the right to perform non-structural improvements of the leased premises which do not affect the Building systems (as hereinafter defined) or substantially alter the layout of the leased premises up to a total expenditure which does not exceed the sum of $15,000 for any or all of such improvements within any twelve (12) month period, without Landlord’s prior written consent.  All such alterations, improvements or changes shall be at the sole cost of Tenant and Tenant shall hold Landlord and the demised premises harmless and free from any lien or claim therefore and all other liability, claims and demands arising out of any work done or material supplied to the demised premises at the instance of Tenant, and from all actions, suits and costs of suit by any person to enforce any such lien or claim of lien, liability, claims or demands, together with the costs of suit and attorney’s fees incurred by Landlord in connecting therewith.  Tenant shall cause any mechanic’s lien or other lien filed against the demised premises or the building of which the demised premises are a part to be released and removed within ten (10) days of such filling either by the satisfaction of such lien or by the posting of a bond.  Landlord may impose, as a condition of such consent, such requirements as Landlord in its sole and reasonable discretion may deem reasonable and desirable, including, but not limited to, the requirement that Tenant utilize for such purposes only contractors, materials, mechanics and materialmen approved by Landlord, and the requirement that Tenant shall furnish Landlord with a Completion Bond prior to the commencement of any work,  Tenant shall construct such improvements, alterations or repairs in conformance with any and all applicable rules and regulations of any Federal, State, County or Municipal code or ordinance.  In any event, Landlord’s contractor shall perform all mechanical, electrical, plumbing, air conditioning, permanent partition and ceiling tile work (hereinabove referral to as the “Building systems”).  Tenant agrees to give Landlord written notice of the commencement date of any alterations, improvements or repairs to be made in, to or upon the premises not later than fifteen (15) days prior to the commencement of any such work, in order to give Landlord time to post notices of non-responsibility.  In the event any construction, alteration, decorating or repair work (including any engineering or architectural services or consultants employed by Landlord relative to tenant’s alterations or improvements) is performed by Landlord’s contractor, the charges for such work shall include an administrative fee for Landlord’s administration of the work in the amount of 20% of the contract sum(s) on each project administered by Landlord at a cost of $10,000.00 or less, and 15% of the contract sum(s) on each project administered by Landlord costing more than $10,000.00.  All charges for work performed by Landlord’s contractor shall be deemed additional rent under this lease, payable in advance prior to commencement of construction.  All such alterations, repairs, additions or improvements (including any alterations, repairs, additions or improvements installed during Tenant’s prior occupancy of the demised premises pursuant to any previous lease, sublease or otherwise and including but not limited to the bank vault, vault door and pedestrian escalator installed between Suite 100 and the 2nd Floor Prmises), shall, unless otherwise provided by written agreement, become the property of Landlord and shall remain upon and be surrendered with the premises upon the expiration of this lease or any sooner termination thereof; provided that upon expiration or termination of this

Lease, Landlord shall have the right and option by written notice to Tenant to require Tenant at its sole cost to remove any of the alterations, repairs, additions or improvements installed by or for Tenant and repair any damage to the Premises occasioned by such installation or removal and restore the Premises to original condition, normal wear and tear excepted.

At the expiration of the term of this lease and provided that Tenant is not in default hereunder, all Tenant’s free-standing personal property not attached to the demised premises may be removed by Tenant, at Tenant’s sole expense, provided, however, Tenant shall pay for any damages caused to the demised premises by the removal of said items, so that after the removal of said items, the demised premises will be in the same condition as at the time prior to the said installations, if any, reasonable wear and tear excepted.  In any event, at the sole option of Landlord, Tenant at its expense, must remove said items, and repair any damage to the premises occasioned by said installation and/or removal and restore the premises to original condition.  If Tenant shall fail to complete such removal or restoration and repair such damage, Landlord may do so and charge the reasonable cost thereof to Tenant, which sum shall be deemed additional rent hereunder and shall be due and payable from Tenant to Landlord within ten (10) days after Landlord has rendered to Tenant a written statement therefor.  Any improvements, equipment or personal property not removed by Tenant from the premises upon the end of the term shall be conclusively presumed to have been abandoned by Tenant, and the cost of removal, storage and/or sale of same shall be deemed additional rent hereunder, payable from Tenant to Landlord in the same manner as provided above with respect to restoration charges.  Any tenant improvements for which an allowance is given by Landlord to Tenant and all carpeting and/or ss installed in the premises shall become part of the realty and become the property of Landlord and remain in the demised premises upon expiration or sooner termination of the lease or Tenant’s vacating or abandonment of the demised premises.

The provisions of Articles 28 and 39 are incorporated herein by this reference as if set forth in full.

8.  ETHICS.  If Tenant is a member of any profession, he agrees to abide by the Code of Ethics of the association recognized as representing that particular profession in the County of Los Angeles, State of California.

9.  UTILITIES.  Landlord agrees to supply for standard desk-furnished business offices, during the usual building business hours on business days,  reasonable amounts of domestic water for drinking purposes, heat, air-conditioning, and electric current for lighting purposes and power for a reasonable number of fractional horsepower office machines, together with Landlord’s standard janitorial services five times each week, Saturdays, Sundays and recognized legal holidays excepted.  Landlord shall not supply any janitorial services or cleaning for any plumbing fixtures located in the demised premises.  Tenant shall have the obligation and responsibility for cleaning and maintaining any such plumbing fixtures.Landlord shall provide the same services, maintenance and repairs for the demised premises at Landlord’s sole cost as Landlord provides to the other office space tenants in the building (as distinguished from ground-floor tenants).

Tenant will not, without the written consent of Landlord, use any office equipment in the premises using current in excess of 110 volts, or which will in any way generate heat or increase the amount of electricity, water or air-conditioning usually furnished or supplied for use of the premises as general office space; nor connect any apparatus or device for the purposes of using electric current except through existing electrical outlets or for the use of water except with existing water pipes in the premises.  If Tenant requires water or electric current in excess of that usually furnished or supplied for use of the premises as general office space, Tenant shall first procure the consent of Landlord, which Landlord may refuse, to the use thereof all, Landlord may cause a water meter or electric current meter to be installed in the premises, to measure the amount of water and electric current consumed for any such other use.  The cost of any such meters and of installation, maintenance and repair thereof shall be paid for by Tenant and Tenant agrees to pay Landlord promptly upon demand therefor by Landlord for all such water and electric current consumed as shown by said meters, at the rates charged for such services by the City of Los Angeles or the local public utility, as the case may be, for furnishing the same, plus any additional expense incurred in keeping account of the water and electric current so consumed.

In the event Tenant utilizes or consumes utilities or services after usual building business hours or in amounts which are appreciably in excess of those utilized or consumed by the average office tenants in the building, Tenant shall reimburse Landlord, as additional rent, upon receipt of demand therefor, the cost of such excess consumption.  In the event Tenant utilizes heating, air conditioning or fan service after normal building business hours, Tenant shall reimburse Landlord its then current building standard rate for such services.  As of the date of execution of this Lease, Landlord’s current building standard rates for these services are: for ehat or air conditioning - $175.00 per hour; for fan service - $75.00 per hour.  Landlord agrees to supply, for any storage areas leased hereunder, during usual building business hours on business days, reasonable amounts of electric current for lighting purposes only.  Landlord shall have no obligation to supply to storage areas, water, heat, air-conditioning or electric current for any purposes other than lighting.

The normal building business hours are from 6:00 A.M. to 6:00 P.M., Monday through Friday, recognized legal holidays excepted.  At any time during the term of this lease, normal building business hours for the furnishing of any utilities or services to the Building may be curtailed by Landlord without abatement of rent, due to any Energy or Natural Resource Conservation Act now or hereinafter enacted or the directive of any Energy or Natural Resource Agency or any other similar or dissimilar statute or directive of any federal, state or other governmental, or quasi-governmental agency, or public utility, or any other entity vested with the power to regulate utilities or services.

10.  NOTICES.  All notices to be given hereunder by Landlord to Tenant shall be in writing and may be served either personally or by depositing the same in the United States mail, postage prepaid, either by ordinary, registered or certified mail, and addressed to Tenant at 400 North Roxbury Drive, Beverly Hills, California 90210, with a copy addressed to the attention of the Senior Vice-President – Corporate Premises, at the same address.  Said notice shall be deemed effective upon deposit in any public depository of the United States mail.  If there be more than one Tenant, then notice to any of them shall constitute notice to all and notice from any of them shall constitute notice from all.  If Tenant be a corporation, then such service upon any employee shall constitute service upon the corporation and in this regard Tenant specifically waives any rights as to methods of service as set out in Sections 1161 and 1162 of the California Code of Civil Procedure.  Tenant hereby waives all other methods of notice prescribed by the Codes of California.

Any notice desired to be served on Landlord by Tenant must be sent by prepaid United States registered or certified mail to Landlord: 9100 Wilshire Boulevard, Suite 404, Beverly Hills, California 90212, or at such other place as Landlord may from time to time designate in writing.

11.  INSURANCE.  Tenant shall, at its sole expense, procure and maintain comprehensive public liability insurance naming Landlord as an additional insured for the demised premises during the term of this lease in minimum amounts of $1,000,000.00 combined single limit.  Tenant shall furnish Landlord with evidence of such insurance, in a form satisfactory to Landlord, which shall provide that the coverage shall not be canceled or reduced without ten (10) days prior written notice to Landlord.  The parties to this lease shall each procure an appropriate clause in, or an endorsement on, any policy of fire or extended coverage insurance covering the premises and the building of which the premises are a part, and the improvements, furniture, fixtures, and equipment located in or on the premises, pursuant to which the insurance companies waive subrogation or consent to a waiver of right of recovery, and having obtained such clauses or endorsements of waiver or subrogation or consent to a waiver of right of recovery, each party hereby agrees that it shall not make any claim against or seek to recover from the other for any loss or damage to its property, or the property of others, including consequential loss or damage resulting from fire or other hazards covered by such fire and extended coverage insurance including negligent acts.

12.  RIGHTS OF LANDLORD.  Landlord reserves the following rights: (a) upon prior notice to Tenant, to change the address and/or name of the building without or liability to Tenant; (b) to designate all sources furnishing sign painting or lettering, ice, bottled water and toilet supplies used on the premises; (c) constantly to

have pass keys to the premises; (d) to grant anyone the exclusive right to conduct any particular business or undertaking in the building in which the demised premises are situated;  (e) to enter the demised premises anytime whether or not Tenant is present to admit Landlord for inspections, repairs, alterations or additions to the premises or the building in which the premises are situated for window cleaning and janitorial services, to exhibit the premises to others, to affix and display “For Rent” signs, and for any purpose whatsoever related to the safety, protection, preservation or improvement of the premises, the said building, or Landlord’s interest, without being deemed guilty of an eviction or disturbance of Tenant’s use and possession, and without being liable in any manner to Tenant on account thereof; (f) at any time, and from time to time, whether at the instance of Landlord or pursuant to governmental requirements, at Landlord’s expense, to make repairs, alterations, additions, improvements or decorating, whether structural or otherwise, in or to the building, or any part thereof, including the demised premises.  Without limiting the generality of the foregoing rights, Landlord shall specifically have the right to remove, alter, improve or rebuild the lobby and all other public and rentable areas of the building as the same are presently or shall hereafter be constituted, or any part or parts thereof.  Landlord shall not be liable to Tenant for any expense, injury, loss or damage resulting from any work so done in or about the demised premises or the building or any adjacent or nearby buildings, land, street or alley, all claims against the Landlord for any and all such liability being hereby expressly released by Tenant, unless caused by Landlord’s or its agents negligence or willful misconduct.  In connection with making repairs, alterations, decorating, additions or improvements under the terms of this Article.  Landlord shall have the right to access through the demised premises, as well as the right to take into and upon and through said premises or any other part of the building all material that may be required to make such repairs, alterations, decorating, additions or improvements, as well as the right in the course of such work to close entrances, doors, corridors, elevators, or other building facilities, or temporarily to abate the operation of such facilities, without being deemed or held guilty of an eviction of Tenant and without liability for damages to Tenant’s property, business or person and without liability to Tenant by reason of interference with the business of Tenant or inconvenience or annoyance to Tenant or the customers of Tenant.  The rent reserved herein shall in no wise abate while said repairs, alterations, decorating, additions or improvement are being made, and Tenant shall not be entitled to maintain any set-off or counter-claim for damages of any kind against Landlord by reason thereof all such claims being hereby expressly released by Tenant.  However, all such work shall be done in such manner as to cause Tenant the least inconvenience practicable.  Landlord reserves and shall have the right to enter upon the demised premises for the purpose of posting and maintaining such notices on the premises as may be necessary to protect Landlord against mechanic’s, materialmen’s or other liens and any other notices that may be proper and necessary.

13.  DESTRUCTION-FIRE OR OTHER CAUSE.  If said building shall be totally destroyed, this lease shall thereupon terminate.  If said building or demised premises shall be damaged by fire, earthquake, or any other cause without fault or neglect of Tenant, so that the leased premises become untenantable, then, if the leased premises cannot be made tenantable within one hundred twenty (120) working days from the date of such damage, this lease may be terminated by Landlord or tenant in the event the leased premises cannot be made tenantable within one hundred eighty (180) days, this lease may be terminated by either party.  In any case where the leased premises are rendered partially and permanently untenantable by fire, earthquake, or other cause without the fault or neglect of Tenant, the monthly rental shall be adjusted in the proportion that the rental value of the untenantable portion of the demised premises bears to the rental value of the whole thereof.  In any case, where theleased premises are rendered partially but only temporarily untenantable by the aforementioned causes, there shall be no abatement of rental.

14.  RIGHT OF REPOSSESSION.  If, in compliance with any law, or ordinance now or hereafter enacted, or if required to comply with the directions or requirements of any public officer, board or commission, it becomes necessary for Landlord to acquire permanently all or any portion of the demised premises, Landlord or its assigns shall have the right to repossess the demised premises, or any portion thereof, at any time upon thirty days’ written notice to Tenant, and when said space shall have been so permanently repossessed, Landlord shall, in lieu of any and all claims for damages, allow Tenant a credit on Tenant’s rent in the proportion that the rental value of the space taken bears to the rental value of the whole of the demised premises; provided, however, that if the space taken is of such an amount or size as to make the remaining space unusable to Tenant, then Landlord, upon thirty (30) days’ written notice from Tenant, will endeavor, if available, to furnish Tenant with comparable space elsewhere in the building and to place Tenant in such new space, and this lease and each and all of the terms, covenants and conditions thereof shall thereupon remain in full force and effect and be deemed applicable to such new space; provided, however, that if Landlord shall be unable to provide Tenant with such other space, then this lease shall thereupon cease and terminate.  No exercise by Landlord of any right herein reserved shall entitle Tenant to damages for any injury or inconvenienced occasioned thereby, nor shall Tenant by reason thereof be entitled to any abatement in rent (except as above set forth in case of taking of space permanently.)

15.  EMINENT DOMAIN.  Should Landlord, at any time during the continuance in force of this lease, be deprived of the building in which the demised premises are situated, or any part thereof, or any part of the land on which the building or appurtenances are situated, by condemnation or eminent domain proceedings, this lease shall terminate, at Landlord’s option, on the date when Landlord is actually deprived of possession of said land or building, or some part thereof, and thereupon the parties hereto shall be released from all further obligations hereunder.  Should Tenant, at any time during the continuance in force of this lease, be deprived of the demised premises or any substantial part thereof preventing Tenant from using the remainder of the Premises for the purposes intended under this Lease, by condemnation or eminent domain proceedings, this lease shall terminate, at Tenant’s option , on the date when Tenant is actually deproved of possession of the Premises, or said substantial part therof, and thereupon the parties hereto shall be released from all further obligations hereunder.  Upon termination of this Lease as aforesaid, Landlord shall thereupon repay to Tenant any rental theretofore paid by Tenant and unearned at the date of such termination.  Tenant shall not be entitled to any compensation, allowance, claim or offset of any kind against the Landlord, as damages or otherwise, by reason of such condemnation or eminent domain proceedings or by reason of being deprived of the demised premises or the termination of this lease, and said Tenant does hereby waive, renounce and quit-claim to Landlord any right in and to any award, judgment, payment or compensation which shall or may be made or given because of the taking of said premises, or any portion thereof, by virtue of any such condemnation or eminent domain proceedings, whether received in any such action or in settlement or compromise thereof by Landlord, except that Tenant shall have the right to file a separate claim to recover the value of its personal property in the eminent domain proceedings.

16.  USE OF BUILDING.  Tenant shall not be allowed to use the name of the building in which the demised premises are located, or words to that effect, in connection with any business carried on in said premises (except as Tenant’s address) without written consent of Landlord.  Tenant shall not engage in any advertising whatsoever, which in any way shall adversely affect the character of the building of which the demised premises are a part.    Tenant further covenants and agrees not to suffer or permit said premises, or any part thereof to be used in any manner that will injure or impair the structural strength of said building, and not to suffer or permit to be installed in said premises, any machinery or apparatus, the weight or vibration of which will tend to injure or impair the structural strength of said building.

17.  SUCCESSORS.  Subject to the aforementioned restrictions on assignment of this lease on the part of Tenant, the words “Landlord” and “Tenant” as used herein include, apply to, and bind and benefit the heirs, executors, administrators, assigns and successors of Landlord and Tenant.  In the event of any change of name, Tenant agrees to furnish Landlord with a change of business or corporate name with appropriate supporting documentation.

18.  CO-TENANTS.  All persons comprising Tenant, together with all assignees and Subtenants, should Landlord elect to treat said assignees and Subtenants as

Tenants, are to be held and hereby agree to be held jointly and severally responsible for the payment of rent and the faithful performance of all the terms, covenants and conditions of this lease.  Landlord shall have the right to proceed against any person liable under this lease without the necessity of first proceeding against any other person and without first pursuing any other remedy.  Payment or refund by Landlord to any person who is one of the Tenants hereunder of any sums, including but not limited to the security deposit due under this lease, shall constitute payment or refund to any persons comprising Tenant.

19.  NON-LIABILITY OF LANDLORD.  Except in the event of Landlord’s negligence or willful misconduct, Landlord shall not be liable to Tenant, or to any other person or persons whomsoever, and Tenant hereby waives any and all claims for any damages to the leased premises or for or on account of any loss, damage, theft, injury to any person or property in or about said premises, or the building of which the demised premises are a part, or the approaches or entrances thereto, or on the streets, sidewalks, parking areas or corridors thereof, caused or occasioned by said premises being out of repair, by defects in said building or said premises or equipment contained therein, including, but not limited to, any security system located in or about the demised premises whether or not installed by Landlord, or by the failure to keep the same in good order and repair, or by fire, gas, water, electricity, failure or malfunction of the air-conditioning, or by the breaking, overflowing or leaking of roofs, pipes, or walls of said building, or for any other damage or injury caused by any acts or events whatsoever beyond the control of Landlord, including, but not limited to, the acts and omissions of other Tenants and invitees of the building.  Landlord shall not be liable and Tenant hereby waives all claims for damages that may be caused by Landlord in re-entering and taking possession of the premises as herein provided.

20.  INCREASE OF TAXES AND OPERATING COSTS.  Tenant shall pay all taxes assessed during the term of this lease against Tenant’s personal property and trade fixtures and against tenant improvements which exceed the building standard tenant improvements whether installed by Landlord or by Tenant, or in Tenant’s possession in, upon or about the demised premises.  Tenant shall also pay gross receipts tax or any excise or other taxes or licenses on or measured by or allocable to the rent payable hereunder (whether charged to Landlord or to Tenant, or to either or both of them, and whether or not now customary or within the contemplation of the parties hereto).  In the event any such taxes or licenses shall be or have been imposed against the Landlord or the real property of which the demised premises forms a part, then the amount of such taxes shall be paid by Tenant, as additional rent upon demand for payment by Landlord.  Said sum shall be payable in advance in equal monthly installments based upon Landlord’s estimate of the total amount due.  Said estimated monthly payments shall be adjusted annually to the actual tax or license due by payment by Tenant or credit by Landlord of any difference.

If, (a) in any property tax fiscal year during the term of this lease Taxes shall be increased above the Taxes for the base fiscal year, and/or (b) if in any calendar year during the term of this lease Operating Costs shall be increased above those in effect during the base year, both as hereinafter defined, Tenant shall pay to Landlord, upon receipt of a statement therefor and in the manner hereinafter set forth, as additional rent, 5.11% of the amount of such increase in Taxes and 5.11% of the amount of increase in Operating Costs.

A.  Definitions.  (1) “Taxes” shall mean taxes and assessments upon or with respect to the building of which the demises premises forms a part, ancillary parking facilities servicing the building, and land upon which they are located including but not limited to drive-ways, landscaped areas and courtyard entrance areas (in this Article collectively referred to as the “land and/or improvements”), imposed by Federal, State or local governments.  If, because of any change in the method of taxation of real estate, any tax or assessment is imposed upon Landlord or upon the owner of the land and/or improvements, or upon or with respect to the land and/or improvements or the rents or income therefrom, in substitution of or in lieu of any tax or assessment which would otherwise be a real estate tax, such other tax or assessment shall be deemed to be a real estate tax.  In case there shall be a reduction of the assessed valuation on the land and/or improvements for any fiscal year which affects the taxes in any year for which a rent adjustment shall have been made, the rent adjustment shall be recalculated on the basis of the revised assessed valuation and Landlord will credit against the rent next becoming due from Tenant such sums as may be due to Tenant by reason of the recalculation, less the expenses and costs incurred in effecting such reduction, including but not limited to attorneys fees, Property Tax Consultants fee, and other professional fees provided that such rent adjustment shall not reduce the rent payable hereunder below the basic monthly rent payable as set forth in Article 2 of this lease.  “Taxes” shall include any property taxes resulting from any transfer or conveyance of the realty of which the demised premises forms a part or from any transfer or conveyance of any ownership interest in any entity owning said realty or any part thereof. (2) “Operating Costs” shall mean (a) wage and labor costs applicable to persons engaged in the management, operations, maintenance, overhaul, improvement or repair of the land and/or improvements, whether said persons be employed by Landlord or by an independent contractor, with whom Landlord shall have contracted or may contract for such services.  It is hereby understood that any increase or decrease in the hours of employment or the number of paid holidays, or vacation days, social security taxes, unemployment insurance taxes and the costs, if any, of providing disability, hospitalization, medical welfare, pension, retirement or other employee benefits imposed by law or by any collective bargaining agreement, or any voluntary employee benefit plans, applicable with respect to such employees, shall correspondingly affect the wage and labor costs; and (b) cost of utilities, fuel, supplies, all insurance, service contracts, improvements (excluding the interior of tenant spaces) of or on the land and/or improvements, amortized over the useful life of such improvements in accordance with generally accepted accounting principles; and (c) such other items as are customarily included in the cost of managing (including but not limited to management fees), operating (including but not limited to ground rent), maintaining (including but not limited to cleaning and janitorial services), overhauling, improving and repairing the land and/or improvements in accordance with generally accepted accounting or management principles or practices.

Notwithstanding anything to the contrary in the definition of ‘Operating Costs’, Operating Costs shall not include the following:

(i)  Any ground lease rental (but rental and other access fees on the access tunnel to the Pershing Square Garage are included in operating costs);

(ii)  Capital expenditures required by Landlord’s failure to comply with laws enacted on or before the date the Building’s Temporary Certificate of Occupancy is validly issued;

(iii)  Costs incurred by Landlord with respect to goods and services (including utilities sold and supplied to tenants and occupants of the Building) to the extent that Landlord is entitled to reimbursement for such costs;

(iv)  Costs incurred by Landlord for the repair of damage to the Building to the extent that Landlord is reimbursed by insurance proceeds;

(v)  Costs, including permit, license and inspection costs, incurred with respect to the installation of tenant improvements made for new tenants in the Building or incurred in renovating or otherwise improving, decorating, painting or redecorating vacant suites for tenants or other occupants of the Building;

(vi)  Depreciation and amortization (except as otherwise provided herein to be includable in operating expenses);

(vii)  Leasing commissions, attorneys’ fees, and other costs and expenses incurred in connection with negotiations or disputes with present or prospective tenants or other occupants of the Building;

(viii)  Wages incurred in connection with the operation of the parking structure;

(ix)  Costs of a capital nature, including without limitation, costs incurred by Landlord for alterations which are considered capital improvements, (but capital repairs and capital replacements, and capital equipment and capital tools purchased by Landlord to enable Landlord to supply services Landlord might otherwise contract for with a thrid party, shall be included in operating expenses in accordance with generally accepted accounting principles, consistently applied);

(x)  Expenses in connection with services or other benefits which are not provided to Tenant or for which Tenant is charged for directly or which are selectively provided to another tenant or occupant of the Building;

(xi)  Interest, points and fees on debt or amortization on any mortgage or mortgages encumbering the Building or the land on which the Building is located;

(xii)  Expenses and costs not normally, in accordance with generally accepting accounting principles, included in Operating Costs by landlords of first-class institutional office Buildings;

(xiii)  Advertising and promotional expenditures;

(xiv)  Any bad debt loss, rent loss, or reserves for bad debts or rent loss;

The following shall also be excluded from the taxes and operating costs:  Federal and State income taxes imposed on Landlord’s net income and any and all costs of any expenses to procure tenants for the building, including but not limited to brokerage commissions, legal fees, and remodeling costs of suites.  (3) “Base Year” shall mean (a) for computation of Tax increases, the fiscal tax year ended June 30th, 2000 and (b) for computation of Operating Cost increases, the calendar year 2000. (4) “Subsequent Year” shall mean each and every tax or calendar year, as the case may be following the base year failing wholly or partly within the term of the lease.

B.  Statements for TENANT.  On or about the 1st day of April, in each and every Subsequent Year, and within ninety (90) days after the expiration or earlier termination of the term of this lease, Landlord will furnish to Tenant a comparative statement which shall show a comparison of all pertinent costs, either actual or estimated, and information applicable to the Taxes in the Base Year and in the current tax year and applicable to Operating Costs in the Base Year and in the calendar year preceding the year in which the comparative statement is submitted, and the amount, if any, of the increase in Taxes and Operating Costs and the amount thereof to be paid by Tenant.  In the event that the Building is not at least ninety-five percent (95%) occupied during any Base Year or Subsequent Year, then the costs for such year, either actual or estimated, shall be adjusted and increased to reflect what expenses would have been, had such occupancy been ninety-five percent (95%) during such entire year.  The failure of Landlord to furnish a comparative statement for any year in accordance with this Paragraph B shall be without prejudice to the right of Landlord to furnish comparative statements in subsequent years.  In the event that Landlord shall, for any reason, be unable to furnish a comparative statement on or about April 1st of any year, or within ninety (90) days after the expiration or earlier termination of this lease, Landlord may furnish such statement as soon thereafter as practicable, with the same force and effect as a comparative statement would have had, if delivered as aforesaid.

C.  Payment of Increase in Rent.  (1) The payment of any additional rent on account of Taxes and Operating Cost increases, pursuant to the provisions of this Article 20 shall be made as follows: On the first day of the month following the furnishing of a comparative statement, Tenant shall pay to landlord as additional rent (a) a sum equal to 1/12th of Tenant’s share of tax increase multiplied by the number of months then elapsed from the date commencing with the 1st day of the current fiscal tax year up to the date of the comparative statement (less any payments made in advance under the last previous comparative statement submitted, if any), plus (b) a sum equal to 1/12th of Tenant’s share of Operating Costs increase multiplied by the number of months then elapsed from the date commencing with the first day of the preceding calendar year up to the date of the comparative statement (less any payments made in advance under the last previous comparative statement submitted, if any), plus (c) in advance, 1/12th of such share of both Tax and Operating Cost increases with respect to the then current month, and each month thereafter as additional rent until a different comparative statement shall be submitted as above provided. (2) When the next comparative statement is submitted by Landlord to Tenant, in the event that such comparative statement shall show an increase in Taxes and/or Operating Costs which shall be different from the increase paid or which was to be paid in advance under the last previous comparative statement, then the additional rent that had been or was to be paid in advance on account of Taxes and Operating Cost increases, shall be increased or decreased accordingly. (3) The additional rent due to Landlord or any credit due to Tenant, as disclosed by the comparative statement furnished Tenant, shall be paid or credited within Ten (10) days after the furnishing of such comparative statement. (4) In the Event Tenant should dispute any cost items in any comparative statement furnished by Landlord pursuant to this Article, Landlord and Tenant specifically agree that provided Tenant is not otherwise in default in the payment of the basic monthly rent under this lease and Tenant first deposits with Landlord the total sum in dispute hereunder, the cost items in dispute shall be submitted to an independent Certified Public Accountant engaged by Landlord and reasonably approved by Tenant, for audit and verification of the cost items disputed, and the finding and determination of said independent Certified Public Accountant, shall be deemed conclusively correct, final and binding between parties hereto without further remedy or recourse to legal proceedings.  In the event such audit discloses that the aggregate of the true amount of such cost items as verified is within three per cent (3%) of the aggregate items disputed, Tenant shall pay the cost of such audit, which shall be in accordance with the reasonable charges generally prevailing for such work.  Sums payable under this Article are deemed independent additional rental and are payable in addition to the rental specified in Article 2 of this lease, any guaranteed minimum monthly rental, and any percentage rental payable under this lease.

D.  Arbitration.  Provided Tenant is not otherwise in default in the payment of the basic monthly rent under this lease, the interpretation, construction, performance, or breach of this Article 20, may be settled by arbitration pursuant to the rules and regulations of the American Arbitration Association.  Either party requesting arbitration under this Article 20 shall make a demand on the other party by registered or certified mail with a copy to the American Arbitration Association.  It is a condition precedent to Tenant’s right to arbitration that Tenant first deposit with Landlord the total amount of the sum in dispute.  The arbitration shall take place as noticed by the American Arbitration Association regardless of whether one of the parties fails or refuses to participate.  In no event shall any sum payable hereunder be withheld by Tenant pending completion of such arbitration.

21.  GENDER.  In this lease, whenever the context so requires, the masculine gender herein used shall include the feminine or neuter and the singular number shall include the plural.  The captions set forth in the various Articles of this lease are for identification and convenience only and are not intended to, and shall not be deemed to limit or expand the contents of the respective Article.  If Tenant is a corporation, Tenant agrees to provide Landlord, upon execution of this lease by Tenant, with a notarized copy of a corporate resolution authorizing the Tenant corporation to execute this lease and any appurtenant documents.

22.  SUBORDINATION.  Tenant expressly agrees that, at the sole option of Landlord, this lease shall be either subject and subordinate, or paramount, to all ground or underlying leases, mortgages, Deeds of Trust, or any other encumbrances now placed or which may be placed in the future upon the real property of which the demised premises are a part by the owners thereof, and to all renewals, modifications, replacements or extensions thereof.  And Tenant further agrees that, whenever requested to do so by Landlord, Tenant will execute, sign and deliver any documents required to effectuate such subordination or superiority.  Tenant shall, upon request from Landlord, execute and deliver to Landlord any certificate or other instrument stating the date this lease will terminate, the date to which rent has been paid, that this lease is in full force and effect without modification, and that Tenant has no rights of deduction or offset hereunder or, if this lease has been modified or if Tenant claims a deduction or offset hereunder, stating the effect of such modification and/or the claimed deduction or offset.  Tenant hereby irrevocably constitutes and appoints Landlord as Tenants’ attorney in fact to execute (and to deliver to any third party) any documents required to effect such subordination or superiority and nay such certificate or instrument for and on behalf of Tenant, if Tenant shall have failed to do so within ten (10) days after request therefore by Landlord, and in such event Landlord shall be conclusively deemed not in default under this lease.  Any right, either expressed or implied, to quiet enjoyment of the premises which Tenant may have under this lease shall be subject to any subordination of this lease under this Article.  Notwhithstanding anything to the contrary in the foregoing, Landlord agrees that is shall reasonably cooperate with and assist Tenant in Tenant’s obtaining a lender’s standard form Non-Disturbance Agreement by requesting such an agreement from the lender on behalf of Tenant.  Any and all costs and expenses incurred in obtaining a Non-Disturbance Agreement shall be Tenant’s sole responsibility, including but not limited to any fees or costs imposed by the lender any any and all attorneys’ fees incurred by Tenant or Landlord.  Any negotiations or modifications of lender’s standard form Non-Disturbance Agreement shall be Tenant’s sole responsibility.

23.  DELAY IN OCCUPANCY.  Tenant, agrees that, in the event Landlord does not deliver to Tenant timely possession of the demised premises at the commencement of the term, due to failure of a previous tenant to promptly vacate the premises, or due to delays of Landlord or its contractor in completing the remodeling of the premises, or due to any other delays, Landlord shall not be liable for any damage caused thereby; nor shall this lease be void or voidable if possession is given to Tenant within one hundred twenty (120) days after the date set for commencement of this lease, but in no event shall Tenant be liable for rent until such time as Landlord offers to deliver possession of said premises to Tenant.  However, the term hereof shall not be extended by such delay.  If Tenant, with Landlord’s consent take possession of the

demised premises prior to the commencement of this lease, then Tenant shall be subject to all the covenants and conditions hereof and shall pay rent for the period ending with the commencement of said term at the monthly rate prescribed for the first month of said term.  In the event that the delay in delivering to Tenant possession of said premises at the commencement of said term is caused by Tenant, rentals shall nevertheless commence on the date set out in this lease for the commencement of the term of this lease.

24.  CONDITIONS OF COVENANTS.  Each and all of the provisions of this lease are conditions precedent to be faithfully and fully performed and observed by Tenant to entitle Tenant to obtain and continue in possession of the premises hereunder; said conditions are also covenants on the part of Tenant and time of performance of each is of essence of this agreement.

25.  ATTORNEYS’ FEES.  If any action or actions be commenced for the breach of any covenants or conditions of this lease, or for any rent, or any other action arising out of this lease, or for the possession of said premises, or if arbitration of Article 20 is requested by either party hereto, or if Landlord necessarily intervenes in, or becomes a party, or is made a party to, any action or actions accruing out of this lease in order to protect is rights, then losing party will pay to prevailing party a reasonable attorney’s fee in such action or actions, which fee shall be fixed by the court in such action.  As a further inducement to Landlord to make this lease and in consideration thereof, Landlord and Tenant covenant and agree that in any action or proceeding arising out of, under or by virtue of this lease, Landlord and Tenant do hereby waive trial by jury.

26.  BUILDING RULES.  Tenant covenants that Tenant, together with all persons entering and/or occupying the demised premises shall keep and perform each and all of the rules and regulations of the building hereinafter set forth which are hereby referred to and made a part hereof.  Landlord shall have the right to amend said rules and to make other and different reasonable rules and regulations as in Landlord’s reasonable judgment may from time to time be necessary for the management, safety, care and cleanliness of the premises, and for the preservation of good order therein, as well as for the convenience of other occupants and tenants therein.  Such rules and regulations may limit, restrict and regulate the privileges of tenants in the said building, and all such rules and regulations so made by Landlord, after notice thereof to Tenant, shall be binding upon Tenant and become conditions of Tenant’s tenancy and covenants on the part of and to be performed by Tenant.  Violation of any such rules and regulations shall be deemed a material breach of this lease by Tenant.  Landlord shall not be responsible to Tenant or to any other person for the non-observance or violation of the rules and regulations by any other tenant or person.

27.  WAIVER.  No modification, alteration or waiver of any term, covenant or condition of this lease shall be valid unless in writing subscribed by the Landlord or by any officer of Landlord authorized in writing.  No waiver of a breach of any covenant or condition shall be valid unless in writing subscribed by the Landlord or by any officer of Landlord authorized in writing.  No waiver of a breach of any covenant or condition shall be construed to be a waiver of any succeeding breach.  No act, delay or omission done, suffered or permitted by landlord shall be deemed to exhaust or impair any right, remedy or power of Landlord hereunder.  Landlord shall have the right to accept any rental payment tendered by Tenant for lesser amounts than the full rental due without waiver of the balance due from Tenant, and in this regard Landlord shall have the right to deposit any checks tendered by Tenant regardless of any restrictive notations or endorsements placed thereon by Tenant or set forth in any accompanying transmittal without waiver of the balance due Landlord.  Landlord’s acceptance of the keys to the premises shall not constitute a surrender or termination of this lease.  A surrender or termination of this lease can only be effected by way of written agreement between the parties.  This agreement contains the entire contract between the parties hereto, and there are no oral or other agreements between Tenant and Landlord with regard to this lease, except those expressly set out herein, and no representative or officer of Landlord has any power to change, modify or make any other terms or representations whatsoever than those herein set forth.  Tenant hereby waives the provisions of Sections 1932, 1941, 1942 and subdivision (4) of Section 1933 of the Civil Code of the State of California and any and all other statutes or laws permitting a tenant to make repairs at the expense of the landlord or to terminate a lease by reason of the condition of the premises or any part thereof.  Should any part, clause, provision or condition of this lease be held to be void, invalid or inoperative, such invalidity shall not affect any other clause, provision or condition hereof, but the remainder of this lease shall be effective as through such invalid clause, provision or condition had not been included herein.

28.  COVENANT BY TENANT.  HAZARDOUS MATERIALS.  Tenant covenants to hold Landlord free and harmless from all loss or damage resulting from Tenant’s violation of any term or provision of this lease, including but not limited to attorney fees and court costs.

Tenant further covenants to hold Landlord free and harmless from the use, misuse or neglect of said premises or appurtenances and expressly waives, in favor of Landlord, all claims arising out of any alleged defective or unsafe condition thereof, unless the same was caused by the negligence or willful misconduct of Landlord.

Tenant agrees to pay for all damages which may be caused to Landlord or the building in which the demised premises are situated or to any tenant or occupant thereof by any act or failure to act of Tenant or any of Tenant’s invitees, contractors, agents, guests, visitors or employees, and Tenant further agrees not to use or suffer to be used the demised premises in any manner which will increase the present rate of premium for insurance on said building, or cause a cancellation of any insurance policy relating to said building (Landlord acknowledges that Tenant’s existing banking operations do not violate this restriction on the use of the Premises) or keep or suffer to be kept therein any gasoline, distillate, petroleum, hazardous substances or explosive products.  Tenant agrees during the entire term to take good care of the demised premises and to keep the interior thereof in good order, repair and condition, natural deterioration with careful use and injury by fire, the elements and acts of God excepted.

Tenant and Landlord hereby represent and warrant that no real estate broker nor any other person other than Landlord, its agents and employees, has been involved in the securing and negotiation of this lease, nor is any broker or any other person entitled to any commission, finder’s fee, nor any other payment as a result of Tenant’s execution of this lease.

Tenant shall not use, generate, manufacture, produce, store, treat or dispose of on, under or about the Leased Premises or the Building, or any part thereof, any pesticides, fungicides, solvents, herbicides, flammable explosives, asbestos, radioactive materials, hazardous wastes, toxic substances or related injurious materials, whether injurious by themselves or in combination with other materials (collectively, “Hazardous Materials”).  As used in this Paragraph 7.C, Hazardous Materials shall include but not be limited to substances defined as “hazardous substances”, “hazardous materials”, or “toxic substances” in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.; and those substances defined as “hazardous wastes” in Section 25117 of the California Health & Safety Code or as “hazardous substances in section 20316 of the California Health and Safety Code; and in the regulations adopted and publications promulgated pursuant to said laws.  California Health and Safety Code Section 25359.7 (b) requires any tenant of real property who knows, or has reasonable cause to believe, that any release of a hazardous substance has come to be located in, on or beneath such real property to give written notice of such condition to the owner thereof.  Tenant shall comply with requirements of Section 25359.7 (b) and any successor statute thereto and with all other statutes, laws, ordinances, rules, regulations and orders of governmental authorities with respect to hazardous substances.

Tenant shall indemnify, defend (by counsel reasonably acceptable to Landlord), protect, and hold Landlord, and each of Landlord’s partners, employees, agents, attorneys, successors and assigns, free and harmless from and against any and all claims, liabilities, penalties, forfeitures, losses or expenses (including attorneys’ fees) or death of or injury to any person or damage to any property whatsoever, arising from or caused in whole or in part, directly or indirectly by (a) Tenant’s possession in, on, under or about the Leased Premises or discharge in or from the Leased Premises of any Hazardous Materials or Tenant’s use, analysis, storage, transportation, disposal, release, threatened release, discharge or generation of Hazardous Materials to, in, on, under, about or from the Leased premises or the Building, or (b) Tenant’s failure to comply with any Federal, State, County, Municipal, local or other law, rule, ordinance and regulation now or hereafter in effect relating to the industrial hygiene, environmental protection, use, analysis, generation, manufacture, purchase, transportation, storage and disposal of hazardous, toxic, contaminated, polluting and radioactive

matter, substances and wastes.  Tenant’s obligations hereunder shall include, without limitation, and whether foreseeable or unforeseeable, all costs of any required or necessary repair, cleanup, detoxification or decontamination of the Leased Premises or the Building, and the preparation and implementation of any closure, remedial action or other required plans in connection therewith, and shall survive the expiration or earlier termination of this Lease.  For purposes of the release and indemnity provisions hereof, any acts or omissions of Tenant, or by employees, agents, assignees, contractors or subcontractors of Tenant or others acting for or on behalf of Tenant (whether or not they are negligent, intentional, willful or unlawful) shall be strictly attributable to Tenant.

29.  DEFAULT.  A.  It shall, at Landlord’s option, be deemed a breach of this lease if (1) Tenant defaults (a) in the making of any payment of money pursuant to this lease or (b) in fulfilling any other term, covenant, condition, provision, or agreement of this lease if said default under this Article 29 continues to exist at the expiration of thirty (30) days after notice thereof given by Landlord to Tenant, or  (2) (Intentionally deleted.  Any references to this subparagraph 2 in this Lease shall be deemed to refer to subparagraph (3) which follows,; (3) Tenant shall cease to occupy or conduct business in Suite 100 and/or the Second Floor Premises during customary banking hours, or if Tenant shall remove substantially all of Tenant’s furniture or furnishings therefrom, or  (4) Tenant shall fail to move into or take possession of demised premises within fifteen (15) days after Landlord offers the premises for occupancy or (5) any execution or attachment shall be issued against Tenant or any of Tenant’s property or (6) the demised premises shall be taken or occupied or attempted to be taken or occupied by someone other than Tenant or (7) Tenant shall default with respect to any other lease between (a) Landlord and Tenant, or (b) any parent company or subsidiary company or affiliate or agent of Landlord or Tenant or (8) Tenant assigns or otherwise transfers substantially all of the assets used in connection with the business conducted in demised premises.

B.  In the event that Landlord elects, pursuant to paragraph A of this Article, to declare a breach of this lease, then Landlord shall have the right to give Tenant fifteen (15) days notice of intention to end the term of this lease and thereupon, at the expiration of said fifteen (15) days, the term of this lease shall expire as fully and completely as if that day were the day herein definitely fixed for the expiration of the term hereof and Tenant shall then quit and surrender the demised premises to Landlord, but Tenant shall remain liable as hereinafter provided.  If Tenant fails to so quit and surrender the demised premises as aforesaid, Landlord shall have the right, without notice to re-enter demised premises and dispossess Tenant and the legal representatives of Tenant and all other occupants of demised premises by unlawful detainer or other summary proceedings, or otherwise, and remove their effects and regain possession of demised premises (but Landlord shall not be obligated to effect such removal).

C.  In the event of any breach of this lease by Tenant (and regardless of whether or not Tenant has abandoned the demised premises), this lease shall not terminate unless Landlord, at Landlord’s option, elects at any time when Tenant is in breach of this lease to terminate Tenant’s right to possession as provided in Paragraph B and of this Article or, at Landlord’s further option, by the giving of any notice (including but not limited to any notice preliminary or prerequisite to the bringing of legal proceedings in unlawful detainer) terminating Tenant’s right to possession.  For so long as this lease so continues in effect, Landlord may enforce all of Landlord’s rights and remedies under this lease, including the right to recover all rent as it becomes due hereunder.  For the purposes of this Paragraph C, the following shall not constitute termination of Landlord’s right to possession; (1) acts of maintenance or preservation or efforts to relet demised premises, or (2) the appointment of a receiver upon initiative of Landlord to protect Landlord’s interest under this lease.

D.  In the event of termination of this lease or termination of Tenant’s right to possession (as the result of Tenant’s breach of this lease or pursuant to Article 30 (Bankruptcy), landlord shall have the right: (1) To remove any and all persons and property from demised premises pursuant to such rights and remedies as the laws of the State of California shall then provide or permit, but Landlord shall not be obligated to effect such removal.  Such property may, at Landlord’s option, be stored or otherwise dealt with as such laws may then provide or permit, including but not limited to the right of Landlord to store the same, or any part thereof, in a warehouse or elsewhere at the expense and risk of and for the account of Tenant. (2) To recover from Tenant damages which shall include but not be limited to: (a) The worth, at the time of award, of the unpaid rent (including but not limited to increases in rent pursuant to Article 20 even if determined at a later date) which have been earned at the time of termination; (b) The worth, at the time of award, by which the unpaid rent (including but not limited to increases in rent pursuant to Article 20 even if determined at a later date) which would have been earned after termination until the time of award exceeds the amount of such rental loss that the Tenant proves could have been reasonably avoided; (c) The worth, at the time of award, of the amount by which the unpaid rent (including but not limited to increases in rent pursuant to Article 20 even if determined at a later date) 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 for the same period; and (d) Such expenses as Landlord may incur for legal actions, attorney’s fees, court costs, for reletting (including but not limited to advertising), brokerage fees, for putting demised premises in good order, condition and repair, for preparing the same for reletting (including but not limited to any remodeling, renovations or alterations of the premises), and for keeping demised premises in good order, condition and repair (before and after Landlord has prepared the same for reletting), and all reasonable costs (including but not limited to attorneys’ and receivers’ fees) incurred in connection with the appointment of and performance by any receiver and any other amount necessary to compensate Landlord for all the detriment approximately caused by Tenant’s failure to perform these obligations under the lease or which in the ordinary course of things would be likely to result therefrom.  The “worth of at the time or award” shall include interest at the maximum legal rate. (3) To enforce, to the extent permitted by the laws of the State of California then in force and effect, any other rights or remedies set forth in this lease or otherwise applicable hereto by operation of law or contract.

E.  In the event of a breach or threatened breach by Tenant of any of the terms, covenants, conditions, provisions or agreements of this lease Landlord shall additionally have the right of injunction.  Mention in this lease of any particular remedy shall not preclude Landlord from any other remedy, at law or in equity.

F.  Tenant hereby expressly waives any and all rights of redemption granted by or under any present or future law in the event of Tenant’s being evicted or dispossessed or any cause, or in the event of Landlord’s obtaining possession of demised premises, by reason of the violation by Tenant of any of the terms, covenants, conditions, provisions or agreements of this lease, or otherwise.

G.  Any amount due to Landlord not paid when due shall bear interest at the maximum rate then allowable by law from the date due.  On any amounts not paid within twenty-five (25) days from the date due, Tenant shall pay Landlord a late charge of five (5%) per month for Landlord’s administrative expenses, plus the amount of legal costs and attorney’s fees incurred by Landlord prior to trial, for the collection of such delinquent rent.  Landlord shall have the right to apply the first monies received from Tenant to late charges and interest.  Payment of such interest and late charges shall not excuse or cure any default by Tenant under this lease.  Interest shall not be payable on late charges.

                30.  BANKRUPTCY.  If, at any time during the term of this lease, in any judicial action proceeding in any court against Tenant, a receiver or other officer or agent abe appointed to take charge of said premises or the business conducted therein and shall be in possession thereof, or if this lease or the interest or estate created thereby vest in any other person or persons by operation of law or otherwise, except by consent of Landlord, or in the event of any action taken by or against Tenant under the federal bankruptcy laws or other applicable statutes of the United States, or any state, or if Tenant shall make an assignment for the benefit of creditors, or if an attachment or execution is levied upon Tenant’s property or interest under this lease which is not satisfied or released within thirty (30) days thereafter, the occurrence of any such event shall be deemed to be a breach of this lease by Tenant, and Landlord shall have the rights herein provided in the event of any such breach, including the right, at Landlord’s option, to terminate this lease immediately and enter said premises and remove all persons and property therefrom.  Notwithstanding the foregoing, in the event Tenant is ever subjected to the jurisdiction of the Federal Deposit Insurance Corporation or any other federal or state banking authority and pursuant thereto Tenant or such authority continues to pay the rent pursuant to this Lease, then this Lease shall not terminate pursant to the provisions of this Article so laong as the rental and other provisions of this Lease are performed.

31.  ACCEPTANCE.  Tenant agrees that, upon substantial completion of said premises and/or upon Landlord’s offer to deliver the same for occupancy by Tenant, Tenant will accept said premises and take possession thereof.  The entry of the Tenant into the possession of the demised premises shall be conclusive acknowledgement on Tenant’s part of Tenant’s acceptance of the premises and that they are in good and tenantable condition, except as to latent defects not apparent by

reasonable visual inspection and reasonable punchlist items..  At the expiration or sooner termination of this Lease, Tenant shall deliver the demised premises to landlord, clean and in a state of repair in which said premise existed at the commencement of the term hereof with tenant improvements accepted by Lanldord under the provisions of Article 7, reasonable wear and tear excepted.  There are no representations or warranties of Landlord as to the condition or state of repair of the premises except as expressly stated in this lease.  Tenant’s failure to accept the premises upon Landlord’s offer of delivery shall in no way postpone the commencement of this lease or Tenant’s obligation to pay rental hereunder.

32.  COMPLIANCE.  Tenant shall, at Tenant’s expense, comply with all laws, rules, orders, ordinances, regulations and requirements or municipal, state and federal governments, boards and authorities relative to the Tenant’s occupancy of the demised premises or to the business to be conducted therein. Landlord shall, at Landlord’s expense, comply with all laws, rules, orders, ordinances, regulations and requirements or municipal, state and federal governments, boards and authoritites (herein collectively referred to as the “requirements and authorities”) relative to the leasing and general operations of the Building, exclusive of the requirements and authorities relative to each and all of the tenant’s occupancies of premises with the Building or to the business’s conducted by such tenants.Tenant will keep the said premises in a clean and orderly condition and in accordance with all laws and ordinances and the direction of all public officers, and, as far as reasonably possible, shall keep all immoral and disreputable persons out of said premises to the end that the reputation of the demised premises and the said building as a first class office building may be preserved.  No trade, occupation, game or business shall be conducted upon said premises which shall be unlawful or of unethical character.  The demised premises shall not be used for cooking (except only for incidental microwave cooking or employees lunch and snacks in a non-public are a of the Premises), lodging, sleeping or for immoral purposes and no objectionable noise, vibration or odor shall be permitted to escape from said premises.  Tenant shall not install nor maintain vending machines on the demised premises nor engage in any activity which violates landlord’s Certificate of Occupancy relating thereto.

33.  CALIFORNIA LAW.  The provisions of this lease shall be construed and interpreted in accordance with the laws of the State of California.  The language in all parts of this lease shall be construed in all cases according to its fair meaning and not strictly for or against either Landlord or Tenant.  This lease shall be deemed to be jointly prepared by both of the parties hereto, and any ambiguities or uncertainties herein shall not be construed for or against either of the parties hereto.

34.  TRANSFER OF LANDLORD’S INTEREST.  The term “Landlord” as used in this lease, insofar as covenants or obligations on the part of Landlord are concerned, shall be limited to mean and include only the owner, or owners, at the time in question, of the fee or the ground lease on the demised premises and in the event of any transfer of the title to such Proprietary interest, the Landlord named herein (and in case of any subsequent transfers or conveyances, the then Grantor), their employees and agents shall be automatically freed and relieved from and after the date of such transfer or conveyance of all personal liability with respect to the performance of any covenants or obligations on the part of Landlord contained in this lease thereafter to be performed; provided, that any funds in the hands of such Landlord or the then Grantor at the time of such transfer in which Tenant has an interest shall be turned over to the Grantee, and any amount then due and payable to Tenant by Landlord or the then Grantor under any provision of this lease shall be paid to Tenant, it being intended hereby that the covenants and obligations contained in this lease on the part of Landlord shall, subject as aforesaid, be binding upon Landlord, its successors and assigns only during and in respect to their successive periods of ownership. Any liability that arises from Landlord’s negligence during its period of ownership and that remains unsatisfied at the expiration of said period of ownership, shall survive the expiration of the period of ownership.

35.  FORCE MAJEURE.  Any act of the Landlord or Tenantrequired by this lease to be done within a specified time (except for the payment of renat and other sums deemed rent) shall be subject to excusable delays.  The term “excusable delays” shall be deemed to mean any delays caused by or due to fire, the elements of nature, casualties, strikes, lockouts or other labor troubles, governmental regulations, shortages of material, or supplies, or any cause, whether similar or dissimilar to the foregoing beyond the control of the performing party which affects the performance of that party.  Neither party shall be liable to the other , in damages or otherwise for any such excusable delays. Landlord shall not be deemed in default hereunder, for any failure, suspension, stoppage or interruption of any public utility services, air conditioning or elevator service, caused by repairs, replacements, riots, strikes, labor disputes, fire explosion, earthquake, floods, rain storms, war, insurrection failure of any public utility to furnish service for any reason whatsoever (including, but not limited to any rationing or reduction in service due to any Energy or Natural Resource Conservation Act or Agency, or any Environmental Protection Act or Agency, or any other similar or dissimilar act, statute, ordinance, regulation or directive of any federal, state, county, municipality, or any other governmental or quasi-governmental agency, or of any public utility or any other public or private agency or entity vested with the power to curtail service as a means of conserving or controlling the consumption of water, gas, electricity or any other utility, or any other energy or energy product, or natural resource, or any product or service), act of God, accidents or any other similar or dissimilar causes beyond the reasonable control of Landlord; nor shall such failure or reduction constitute an eviction.  There shall be no abatements of rent by reason of any such failure or reduction.

36.  TAXES, ASSESSMENTS AND OTHER CHARGES.  In addition to rental, operating cost increases and any charges for utilities or services payable under this lease.  Landlord may at any time during the term of this agreement increase the service or utilities charges payable as additional rent to reflect any and all expenses costs (including but not limited to costs to secure any alternate source of utilities, energy, products or service), improvements, taxes, assessments, charges, subcharges or penalties which Landlord is subject to or required to make after the execution date of this lease pursuant to any Energy or Natural Resource Conservation Act or Agency, or any Environmental Protection Act or Agency, or any other similar or dissimilar act, statute, ordinance, regulation or directive of any federal, state, county, municipality, or any other governmental or quasi-governmental agency, or any public utility of any other public or private agency or entity vested with the power to impose taxes, assessments, charges, surcharges or penalties as a means of conserving or controlling the consumption of water, gas, electricity or any other utility, or any other energy or energy product, or natural resource, or any product or service, whether or not such taxes, assessments, charges, surcharges or penalties are based upon or applied (either directly or indirectly) to any utility, product or service charge.  Such increase to Tenant shall be based upon a proportion of the sum due as determined by Landlord, to be reasonably applicable to Tenant and shall be due and payable within ten (10) days after billing by Landlord.  In any event, Tenant shall pay all such taxes, assessments, expenses, charges, or surcharges that are imposed directly against Tenant.

Tenant shall pay Tenant’s Percentage Share (as specified in Article 20) of any special assessment levied upon the building, improvements or real property upon which the demised premises are located by the Los Angeles Rapid Transit District (or any other governmental entity having the authority to impose such assessment) (the “Metrorail Assessment”).  Tenant shall pay Tenant’s Percentage Share of the Metrorail Assessment in equal monthly installments as the same are billed by Landlord to Tenant.  Landlord may require that the final installment be due and payable on the first day of the month in which the Metrorail Assessment is due.  Tenant’s obligation requires Tenant to pay Tenant’s Percentage Share of the entire Metrorail Assessment for each calendar year of the Term and is not limited to Tenant’s Percentage Share of any annual increases made, from time to time, to the Metrorail Assessment.  If the bill for the Metrorail Assessment specifies that it applies to a given period of time, Tenant’s obligations shall be amortized to the extent the Term of

this Lease does not include all such period.

Tenant shall pay Tenant’s Percentage Share (as specified in Article 20) of any special assessment, tax, levy, surcharge or fee levied upon the building, improvements or Real Property by the City or County of Los Angeles in connection with the development, improvement or beautification of Pershing Square or the area immediately adjacent thereto (the “Pershing Square Assessment”).  Tenant’s obligation requires Tenant to pay Tenant’s Percentage Share of the entire Pershing Square Assessment for each calendar year of the Term and is not limited to Tenant’s Percentage Share of any annual increases made, from time to time, to the Pershing Square Assessment.  If the bill for the Pershing Square Assessment specifies that it applies to a given period of time, Tenant’s obligations shall be amortized to the extent the Term of this Lease does not include all such period.

Tenant shall pay Tenant’s Percentage Share (as specified in Article 20) of any special assessment levied upon the building, improvements or real property upon which the demised premises are located by the Downtown Business Improvement District (or any other governmental entity having the authority to impose such assessment) (the “Downtown BID Assessment”).  Tenant shall pay Tenant’s Percentage Share of the Downtown BID Assessment in equal monthly installments as the same are billed by Landlord to Tenant.  Landlord may require that the final installment be due and payable on the first day of the month in which the Downtown BID Assessment is due.  Tenant’s obligation requires Tenant to pay Tenant’s Percentage Share of the entire Downtown BID Assessment for each calendar year of the Term and is not limited to Tenant’s Percentage Share of any annual increases made, from time to time, to the Downtown BID Assessment.  If thebill for the Downtown BID Assessment specifies that it applies to a given period of time, Tenant’s obligations shall be amortized to the extent the Term of this Lease does not include all such period.

37.

38.  CONDITION OF THE PREMISES.  Tenant agrees that the demised premises are being leased in an “as is” condition and Landlord is not obligated to perform any work of any kind to prepare the premises for Tenant’s occupancy.  The area of the leased premises is based upon the rentable area, which includes Tenant’s proportionate share of the public elevator lobby, toilet rooms, corridors and other public areas on the floor on which the demised premises are located.  A lease of a full floor includes the entire public area on the floor.  Landlord shall provide Tenant with an allowance of $25,000.00 to be used by Tenant in connection with Tenant’s remodeling and rennovation work contemplated to be undertaken by Tenant, at Tenant’s sole cost and expense and in accordance with Article 7 of this Lease, and including the building safety systems and the public restrooms.

39.  FIRE PROOFING AND INSULATING MATERIALS. ABATEMENT.  Tenant acknowledges that certain fire-proofing and insulating materials used in the construction of the Building contain asbestos and other hazardous substances (collectively “asbestos”).  If any governmental entity promulgates or revises a statute, ordinance, code, rule or regulation, or imposes mandatory or voluntary controls or guidelines with respect to such asbestos-containing materials or if Landlord otherwise so elects, Landlord may, in its sole discretion, comply with such mandatory or voluntary controls or guidelines, or elect to make such alterations or remove such asbestos-containing materials.  Such compliance or the making of alterations, and the removal of all or a portion of such asbestos containing materials, whether in the Premises or elsewhere in the Building, shall not, in any event constitute a breach by Landlord of any provision of this Lease, relieve Tenant of the obligation to pay any Rent due under this Lease, constitute or be construed as a constructive or other eviction of Tenant, or constitute or be construed as a breach of Tenant’s quiet enjoyment.  In accordance with Proposition 65 (Assembly Bill No. 3713) and the regulations promulgated thereunder (California Health and Safety Code Sections 25249.6 et. seq.) which require that persons subject to “environmental exposure” to certain designated chemicals, such as asbestos, receive warning, you are advised that:

WARNING:  THE BUILDING CONTAINS ASBESTOS

A CHEMICAL KNOWN TO THE STATE OF

CALIFORNIA TO CAUSE CANCER.

Tenant also acknowledges that Landlord has promulgated building regulations and procedures governing the manner in which Tenant may undertake alterations, additions, modifications and improvements to the Premises in those areas where asbestos-containing materials may be located, and such regulations and procedures may be modified, amended or supplemented from time to time.  Prior to undertaking any physical work in or around the Premises, Tenant shall notify Landlord in writing, of the exact nature and location of the proposed work and shall promptly supply such additional information regarding the proposed work as Landlord shall request.  After receipt of Tenant’s notice, Landlord shall, to the extent appropriate, supply Tenant with the Building regulations and procedures for working in areas where there is a risk of coming into contact with asbestos-containing materials.  Tenant shall, at Tenant’s sole cost and expense, strictly comply with all such Building regulations and procedures established by Landlord and with all applicable governmental statutes, ordinances, codes, rules, regulations, restrictions and guidelines (herein “governmental controls”).  Landlord shall have the right (but not the duty or obligation at all times to monitor the work for compliance with the Building regulations and procedures and governmental controls.  If Landlord determines that any of the Building regulations or procedures or governmental controls are not being strictly complied with, Landlord may immediately require the cessation of all work being performed in or around the Premises until such time as Landlord is satisfied that the applicable regulations, procedures and governmental controls will be observed.  Landlord’s monitoring of any work in or around the Premises shall not be deemed a certification by Landlord of compliance with any applicable governmental control or of the building regulations and procedures or a waiver by Landlord of its right to require strict compliance by Tenant with such Building regulations and procedures and governmental controls, nor shall such monitoring relieve Tenant from any of its responsibilities and liabilities relating to such work.

This lease consists of thirty nine (39) Articles consecutively numbered.

Rules and regulations of the building referred to herein which constitute a part of this lease

1.  The sidewalks, entrances, lobby, garage, elevators, stairways and public corridors shall be used only as a means of ingress and egress and shall remain unobstructed at all times.  The entrance and exit doors of all suites are to be kept closed at all times, except as required for orderly passage to and from a suite.  Loitering or congregating in any part of the building or obstruction of any means of ingress or egress shall not be permitted.  Doors and windows shall not be covered or obstructed except that Landlord shall have the right to require Tenant to keep the drapes closed at all times.

2.  Plumbing fixtures shall not be used for any purposes other than those for which they were constructed, and no rubbish, newspapers, trash or other substances of any kind shall be thrown into them.  Walls, floors and ceilings shall not be defaced in any way, and no one shall be permitted to mark, drive nail, screw or drill into, paint, or in any way mar any building surface, except that pictures, certificates, licenses and similar items normally used in Tenant’s business may be carefully attached to the walls of the demised premises by Tenant in a manner to be prescribed by Landlord.  Upon removal of such items by Tenant, any damage to the walls or other surfaces, except minor nail holes, shall be repaired by Tenant.

3.  No awning, shade, sign, advertisement or notice shall be inscribed, painted, displayed or affixed on, in or to any window or door or any other part of the outside or inside of the building or the demised premises.  No window displays or other public displays shall be permitted, without the prior written consent of Landlord.  Tenant shall not solicit other tenants in the building.  Drapes may be installed by tenants provided they are of such color, material, construction and installation as may be prescribed by landlord.  All tenant identification on public corridor doors will be installed by Landlord for Tenant, but the cost shall be paid by Tenant.  No lettering or signs other than the name of the Tenant will be permitted on public corridor doors, with the size and type of letters to be prescribed by Landlord.  The bulletin board or directory of the building will be provided exclusively for the display of the name and location of Tenant only, and Landlord reserves the right to exclude all other names therefrom and to assess its Building Standard charge for each and every name other than the name of Tenant which Tenant may desire to be placed upon such bulletin board and to which Landlord may consent.  All requests for listing of Tenants on the Directory of Building Tenants must be submitted to the office of the building in writing.  Landlord reserves the right to approve all listing requests.

4.  Electric wiring of every kind and telephone outlets shall be installed in a manner as will be prescribed by Landlord.  The location of convenience outlets, electric light outlets, power outlets and telephone outlets shall be approved by Landlord, but the cost of installation thereof shall be borne by Tenant.

5.  The weight, size and position of all safes and other unusually heavy objects used or placed in the building shall be prescribed by Landlord and shall, in all cases, stand on metal plates of such size as shall be prescribed by Landlord.  The repair of any damage done to the building or property therein by putting in or taking out or maintaining such safes or other unusually heavy objects shall be paid for by Tenant.

6.  All freight, furniture, fixtures and other personal property shall only be moved into, within and out of the building at times designated by and under the super vision of Landlord and in accordance with such regulations as may be posted in the office of the building.  In no event will Landlord be responsible for any loss or damage to such freight, furniture, fixtures or personal property from any cause.

7.  No improper noises, vibrations or odors will be permitted in the building, nor shall any person be permitted to interfere in any way with tenants or those having business with them.  No person will be permitted to bring or keep within the building any animal, bird or bicycle.  No person shall throw trash, refuse, cigarettes or other substances of any kind any place within or out of the building, except in the refuse containers provided therefor.  No person shall be employed by Tenant to do janitor work in any part of said building without the written consent of Landlord.  Landlord reserves the right to exclude or expel from the building 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 the rules and regulations of said building.

8.  The storage of goods, wares or merchandise on the premises will not be permitted except in areas specifically designated by Landlord for storage.  No auction, public or private, will be permitted in the premises.  Articles of unusual size or weight and articles which exceed the design floor weight of the building are not permitted in the building, unless permitted by Landlord in writing.

9.  The requirements of Tenant will be attended only upon application at the office of the building.  Landlord’s employees shall not perform any work or do anything outside of their regular duties unless under special instruction from the office of the building, and no such employee shall admit any person (Tenant or otherwise) to any office without specific instructions from the office of the building.

10.  All keys shall be obtained from Landlord, and all keys shall be returned to Landlord upon termination of this lease.  Tenant shall not change the locks or install other locks on the doors.

11.  Any Tenant using the premises after regular business hours or on non-business days shall lock any entrance doors to the building used by Tenant immediately after entering or leaving the building.  Tenant, his employees, agents or associates, or other persons entering or leaving the building when it is so locked may be required to sign the building register when so doing, and any watchman in charge may refuse to admit Tenant or any of Tenant’s employees, agents or associates, or any other person to the building while it is so locked without a pass previously arranged or other satisfactory identification showing such person’s right to access to the building at such time.  However, Landlord assumes no responsibility whatsoever in connection therewith and shall not be liable for any damage resulting from any error in regard to any such pass or identification or from the admission of or refusal to admit, any person to said building.

12.  Tenant shall be deemed to have read these rules and to have agreed to abide by them as a condition to his occupancy of the space herein leased.  THIS LEASE AGREEMENT WILL NOT BECOME EFFECTIVE OR A BINDING AGREEMENT BETWEEN THE PARTIES UNTIL IT HAS BEEN COUNTERSIGNED BY CITINATIONAL-BUCKEYE BUILDING CO. AND A COPY EXECUTED BY ALL THE PARTIES HERETO HAS BEEN RETURNED TO THE TENANT.

LANDLORD:	TENANT:
CITINATIONAL-BUCKEYE BUILDING CO.,	CITY NATIONAL BANK
a California limited partnership	a national banking association
By:  OLIVE-SIXTH BUCKEYE CO., General Partner
By:	By:
Bram Goldsmith, General Partner

[GRAPHIC]

EXHIBIT “A”	606 Olive Street
	Los Angeles, CA.
	STEVENSON SYSTEMS INC.	[LOGO]
	CNB

EX-10.46

Exhibit 10.46

LEASE SUPPLEMENT

DATE:	May 28, 2003
PARTIES:	CITINATIONAL BUCKEYE BUILDING CO. (“Landlord”)
	CITY NATIONAL BANK (“Tenant”)
BACKGROUND:	Landlord has heretofore leased to Tenant, the Ground Floor and floors 2, 3, 4, 5, 6, 9, 10, 11, 20 and 21 in the building commonly known as 606 South Olive Street, Los Angeles, California (the “Building”) pursuant to leases described on Exhibit “A” annexed hereto (the “Leases”).
	Landlord has entered into an agreement to sell the Building to Moses Hanasab, Yehouda Hanasab and Haroon Hanasab (collectively, the “Buyer”) pursuant to a Real Property Purchase Agreement dated March 19, 2003, as supplemented by a Supplemental Agreement and Escrow Instructions dated May 14, 2003 (collectively, the “Purchase Agreement”).
	One of the conditions to closing the Purchase Agreement is that the Leases be modified in certain particulars.  Landlord has requested Tenant, and Tenant, for good and valuable consideration has agreed, to modify the Leases in those particulars.

Accordingly, Landlord and Tenant hereby agree to modify the Leases as follows:

1.             The foregoing background information is hereby incorporated herein as if herein set forth verbatim.

2.             Landlord and Tenant hereby modify the Leases as follows:

A.            Tenant’s rights to cancel the Leases prior to their respective expiration dates are hereby terminated and waived, and, except as extended below, the Leases shall remain in full force and effect for their full terms as set forth on Exhibit “A”.

B.            The Lease dated as of September 30, 1996, as amended, for the ground floor portion of the Building now occupied by Tenant commonly known as Suite 100 is extended to December 31, 2011.  That Lease shall expire pursuant to its terms on December 31, 2006 with respect to floors 2, 3, 4, 6, 9, 10, 20 and 21 of the Building.

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From and after January 1, 2007, the rent for the ground floor portion of the Building under the extended lease shall be $16,628.00 per month, and Tenant’s share of any increase in Property Taxes and Operating Costs under Paragraph 20 of the extended ground floor lease shall be 3.10%.

C.            The Lease dated as of August 1, 2000, as amended, for the entire fifth floor of the Building now occupied by Tenant is extended to November 10, 2009.  From and after January 1, 2007, the rent for the fifth floor of the Building occupied by Tenant shall be $19,500.00 per month, and Tenant’s share of any increase in Property Taxes and Operating Costs under Paragraph 20 of the Lease shall be 5.11%.

D.            The Lease dated as of November 1, 2002 for 9696 square feet of space on the eleventh floor of the Building now occupied by Tenant is extended to November 10, 2009.  From and after January 1, 2007, the rent for the eleventh floor of the Building occupied by Tenant shall be $16,968.00 per month, and Tenant’s share of any increase in Property Taxes and Operating Costs under Paragraph 20 of the Lease shall be 3.44%.

E.             All of the foregoing extensions shall be on the same terms and conditions of Tenant’s existing leases for the space in question, except:

(i)            Tenant shall have the right to sublease any such leased space without the consent of Buyer or its successor owners so long as the sublessee shall utilize the subleased space for a purpose generally consistent with usage in other first class downtown Los Angeles multi-story office buildings, and so long as such sublessee is not an existing tenant of the Building.  In addition, there shall be no sublease to a consulate or a tenant that will add to utility, maintenance, security or other building costs above those of a normal office tenant.  There shall be no restaurant or club on the ground floor of the Building;

(ii)           Tenant shall be entitled to maintain its roof top identification sign as long as it remains the responsible (as contrasted to occupying) party under its leases for the ground floor, fifth floor and eleventh floor space in the Building;

(iii)          The right to maintain such roof top sign shall pass to any successor subtenant of Tenant for entire of such ground floor, fifth floor and eleventh floor space; and

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(iv)          Sixty (60) days prior to November 10, 2009, Tenant must either extend the maturity date of both the fifth floor and the eleventh floor leases to November 10, 2010, or extend one of the leases to November 10, 2011, in which event the other lease shall expire on November 10, 2009.  If Tenant fails to make such election, it shall be deemed to have elected to extend both the fifth floor and eleventh floor leases to November 10, 2010.  No lease extension will be provided for any other portion of the Tenant’s currently leased premises in the Property.

3.             Except as herein provided, the Leases remain unamended and in full force and effect.

CITINATIONAL BUCKEYE BUILDING CO.,
a California limited partnership
By:		Citinational Bancorporation one of its general partners
		By:	/s/ Frank Pekny
			Frank Pekny
By:		Olive-Sixth Buckeye Co. one of its general partners
		By:	/s/ Bram Goldsmith
			Bram Goldsmith
CITY NATIONAL BANK
By:	/s/ Frank Pekny
Its:	VC & CFO

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EXHIBIT “A”

SPACE LEASED	DATE OF LEASE (and any prior amendments)	TERM EXPIRES
Ground, 2nd, 3rd, 4th, 6th, 9th, 10th, 20th and 21st floors	9/30/96, amended 5/1/98, 11/13/98 and 11/1/02	December 31, 2006
5th floor	8/1/2000, amended 11/1/02	December 31, 2006
Part of 11th floor	11/1/02	December 31, 2006

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EX-10.47

Exhibit 10.47

* Material has been omitted pursuant to a request for confidential treatment and such omitted portion has been filed separately with the Securities and Exchange Commission.

CITY NATIONAL BANK

OFFICE LEASE

by and between

TPG PLAZA INVESTMENTS, LLC,

a Delaware limited liability company

(“Landlord”),

and

CITY NATIONAL BANK,

a national banking association

(“Tenant”)

525 S. Figueroa Street,

555 S. Figueroa Street,

Los Angeles, California 90071

NOVEMBER 19, 2003

TABLE OF CONTENTS

ARTICLE 1	- PREMISES
ARTICLE 2	- TERM
ARTICLE 3	- RENT; LATE CHARGES
ARTICLE 4	- ADDITIONAL RENTAL
ARTICLE 5	- ADDITIONAL TAXES
ARTICLE 6	- SECURITY DEPOSIT
ARTICLE 7	- USE OF PREMISES
ARTICLE 8	- UTILITIES AND SERVICES
ARTICLE 9	- MAINTENANCE AND REPAIRS
ARTICLE 10	- ALTERATIONS, ADDITIONS AND IMPROVEMENTS
ARTICLE 11	- INDEMNIFICATION AND INSURANCE
ARTICLE 12	- DAMAGE OR DESTRUCTION
ARTICLE 13	- CONDEMNATION
ARTICLE 14	- ARBITRATION
ARTICLE 15	- ASSIGNMENT AND SUBLETTING
ARTICLE 16	- DEFAULT AND REMEDIES
ARTICLE 17	- ATTORNEYS FEES; COSTS OF SUIT
ARTICLE 18	- SUBORDINATION AND ATTORNMENT
ARTICLE 19	- QUIET ENJOYMENT; NON-COMPETITION
ARTICLE 20	- PARKING
ARTICLE 21	- RULES AND REGULATIONS
ARTICLE 22	- ESTOPPEL CERTIFICATES
ARTICLE 23	- ENTRY BY LANDLORD
ARTICLE 24	- LANDLORD’S LEASE UNDERTAKINGS-EXCULPATION FROM PERSONAL LIABILITY TRANSFER OF LANDLORD’S INTEREST
ARTICLE 25	- HOLDOVER TENANCY
ARTICLE 26	- NOTICES
ARTICLE 27	- BROKERS
ARTICLE 28	- SIGNAGE AND PROJECT IDENTITY RIGHTS
ARTICLE 29	- STORAGE PREMISES
ARTICLE 30	- MISCELLANEOUS
EXHIBIT A	Depiction of the Premises
EXHIBIT A-1	Depiction of the South Side Space
EXHIBIT B	Notice of Lease Term Dates
EXHIBIT C	Work Letter Agreement
EXHIBIT D	Rules and Regulations
EXHIBIT E	Form of Tenant Estoppel Certificate
EXHIBIT F	Superior Right Holders
EXHIBIT G	Tenant’s Plaza Building ATM Location
EXHIBIT H	Tenant’s B-Level ATM Location
EXHIBIT I	ACM Notice
EXHIBIT J	Janitorial Specifications
EXHIBIT K	Intentionally Deleted
EXHIBIT L	South Tower Top Signs
EXHIBIT M	South Tower Eyebrow Signs
EXHIBIT N	South Tower Entrance Signs
EXHIBIT O	Plaza Building Sign and Bank Directional Signs
EXHIBIT P	Project Exterior Signage Program
EXHIBIT Q	Other Tenant Prior Rights
EXHIBIT R	Permitted Ground Floor Tenant Signage Areas
EXHIBIT S	Intentionally Deleted
EXHIBIT T	Designated Secondary Signs
EXHIBIT U	South Tower Building Envelope
EXHIBIT V	Intentionally Deleted
EXHIBIT W	Existing Security Instruments
EXHIBIT X	Form of Nondisturbance Agreement
EXHIBIT Y	Definition of the BofA Lease
EXHIBIT Z	Definition of the ARCO Lease
EXHIBIT AA	Other Tenant Leases
EXHIBIT BB	Rentable Area of Each Full Floor of the South Tower

City National Lease

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EXHIBIT CC	Project Upgrades
EXHIBIT DD	Depiction of Contemplated Changes to the Plaza Area
EXHIBIT EE	Depiction of Contemplated Conversion of South Tower Ground Floor Lobby
EXHIBIT FF	Depiction of Contemplated Conversion of North Tower Ground Floor Lobby
EXHIBIT GG	Depiction of the Pedestrian Passageways from and to Flower Street to and from the Building Entrances
EXHIBIT HH	Depiction of the Pedestrian Passageways from and to Figueroa Street to and from the Building Entrances
EXHIBIT H	Depiction of the Continuing Lobby Areas
EXHIBIT JJ	Depiction of the South Tower A-Level ATM Area
EXHIBIT KK	Depiction of the North Tower Ground Floor Lobby ATM area
EXHIBIT LL	Depiction of the South Tower Ground Floor Lobby ATM area
EXHIBIT MM	Depiction of the Portion of the Downtown Los Angeles Central Business District for location of Comparable Buildings
EXHIBIT NN	Operational Criteria for HVAC Service
EXHIBIT OO	Payment under any Declarations, Covenants, Conditions and Restrictions or Instruments
EXHIBIT PP	Future Pylon Signs
EXHIBIT QQ	Other Project Signs

ii

GLOSSARY OF DEFINED TERMS

AAA

Abatement Event

Abatement Event Termination Date

Abatement Event Termination Notice

ACM

ACM Notice

ACM Operations and Maintenance Program

Actual Costs

Added Hold Space

Additional Rent

Additional Validations

Adjustment Date

Adjustment Factors

Affected Area

Affiliate

After Hours HVAC

After Hours HVAC Rate

Aggregate Project Rentable Area

A-Level

A-Level ATM Area

A-Level Parking Reduction Notice

A-Level Valet Privileges

Alterations

Arbitration Notice

Arbitrator

Article 28 Rights

ATM Rights

ATMs

Attorneys’ Fees

Available for Lease

Available Space Acceptance Notice

Available Space Commencement Date

Available Space Construction Period

Available Storage Space

Award

Bank Directional Signs

Bank Space Option

Base Building

Base Rate Standard

Base Rent

Base Rent Rate

B-Level

Block of Space

BofA

BofA Lease

BOMA

Brokers

Building Structure

Building Systems

Buildings

Business Customers

Business Hours

CalSTRS

Capital Items

Casualty Damage

Central Fountain

Claims, Damages and Expenses

C-Level

CNB Inscription Visual Impact

CNB Project Inscription

Collective Obligations

Commission Agreement

Common Areas

Comparable Buildings

Comparable Transactions

Confirmation Variables

Consent Alterations

Consent Transfer

Contemplated Transfer Date

Contemplated Transfer Space

Contiguity Condition

Control

Cost Pool

Cost Savings Device

Customary CGL Policy

Customer Free Validations

Damage Termination Date

Damage Termination Notice

Default Rate

Delay Portion

Delivery Period

Delivery Window

Delivery Windows

Demising Work

Design Problem

Designated Eight Year Expansion Floor

Designated Eleven Year Expansion Floor

Designated Five Year Expansion Floor

Designated Secondary Signage

Designated Tenant Signage Field

Directory Inscription Rights

Disputed Items

Domestic Government Use

Effective Date

Eight Year Expansion Remainder Space

Eight Year Expansion Space

Eighth Floor Hold Space

Election A

Election B

Election C

Electric Service

Electricity Consumption Standard

Electronic South Tower Directory

Eleven Year Expansion Remainder Space

Eleven Year Expansion Space

Eligibility Period

Emergency

Environmental Laws

Estimated Expense Statement

Event of Default

Excess Electrical Requirements

Exclusive Signage Occupancy Requirement

Exclusive Terms

Existing Comparable Governmental Tenant

Existing Identity Tenant

Existing Lines

Existing Security Instrument

Expansion Designation Notice

Expansion Exercise Notice

Expansion Option

Expansion Options

Expansion Period

Expansion Rent

Expansion Space

Expansion Space Commencement Date

Expansion Space Construction Period

Expense Records

Expense Year

Expiration Date

Express Removal Items

Extension Option

Extension Option Leasing Requirement

Extension Premises

Extension Term

Extension Term Annual Base Rent

Extension Term Annual Base Rent Notice

Eyebrow Sign Relocation Notice

Eyebrow Sign Relocation Period

Finish Work

First Addressee

First Expansion Option

First Increment Commencement Date

First Increment Delivery Penalty Date

First Increment Delivery Window

First Increment Office Space

First Offer Rent

First Reduction Date

First Reduction Option

Five Year Expansion Remainder Space

Five Year Expansion Space

Flower Street Eyebrow Sign

Flower Street Eyebrow Sign Relocation Right

FMRR

Force Majeure

Force Majeure Delays

Foreign Government Use

Fourth Increment Commencement Date

Fourth Increment Delivery Penalty Date

Fourth Increment Delivery Window

Fourth Increment Office Space

Free Rent Credit

Full Pylon Substitute

i

Future Pylon Signs

Generator

Generator Space

Governmental Approvals and Entitlements

Handle

Handled

Handling

Hazardous Materials

High Consumption Equipment

Hold Space

Hold Space Commencement Date

Hold Space Option

Holidays

HVAC

HVAC Service

Identity Rights Termination Notice

Immediate Superior Right

Improvements

Increment of Space

Initial After Hours HVAC Rate

Initial Bank Location

Initial Expansion Notice

Initial Occupancy Requirement

Initial Premises

Initial Reduction Notice

Initial Reduction Option

Initial Reduction Space

Institutional Landlord Member

Institutional Owner Practices

Intention to Transfer Consent Notice

Interest Rate

J-2 Available Privileges

J-2 Parking Annex

J-2 Unreserved Parking Reduction Notice

J-2 Unreserved Privileges

Judgment

Landlord

Landlord Bank Space Recapture Right

Landlord Contribution

Landlord Parties

Landlord’s Insurance

Landlord’s Lease Undertakings

Landlord’s Project Signage Consultant

Landlord’s Statement

Late Charge

Late Charge Delinquency

Laws

Lease

Lease Documents

Lease Year

Leased RFO Space

Liens and Notices

LL Permitted Foreign GUse Premises

LL Permitted GUse Premises

Lost CNB Inscriptions

Management Space

Material Default

Maximum Electrical Amount

Memorandum of Lease

Nine Month Period

Non-Business Hours

Non-Renewal Space

North Eyebrow Sign

North Tower

Notice and Certification of Non Occupancy

Notice of Availability

Notices

Objectionable Name

Occupies

Occupy

Occupying

Offensive and Objectionable Entity

Offered Available Space

Operating Expenses

Operative Amendment

Other Improvements

Other Installations Items

Other Project Signs

Other Rent

Other Tenant Discussions

Other Tenant Lease

Other Tenant Prior Rights

Other Tenants

Outside Agreement Date

Outside Occupancy Threshold Date

Overlap Period

Owner Parties

Owner Party

Parking Facilities

Parking Fees

Parking Privileges

Parking Taxes

Partial CNB Set Pylons

Partial Extension Premises

Partial Floor Hold Space

Partial Floor Hold Space Floor

Partial Floor Size

Partial Lease Month Rent

Partial Pylon Sign Substitute

Partial Renewal Right

Pay Back Period

Permitted Assignee

Permitted Domestic Governmental Use

Permitted Foreign Governmental Use

Permitted Governmental Lease

Permitted Ground Floor Lobby Tenant

Permitted Other Reason

Permitted Parking Transferees

Permitted Plaza Building First Class Tenant

Permitted Plaza Building First Class Use

Plaza Area

Plaza Building

Plaza Building Commencement Date

Plaza Building Delivery Penalty Date

Plaza Building Delivery Window

Plaza Building Operating Requirement Failure

Plaza Building Parapet

Plaza Building Sign

Plaza Building Space

Plaza Extension Term Annual Base Rent

Plaza Trees

Possession Date

Possessory Interest Taxes

Potential First Offer Space

Premises

Prior Tenants’ Project Identity Rights Termination

Prohibited Uses

Project

Project Exterior Signage Program

Project Name

Project Name Rights

Project Upgrades

Property Taxes

Proposition 13 Protection Amount

Proposition 13 Purchase Price

Prospective Identity Tenant

Prospective North Eyebrow Sign Location

Protected Reassessment

Protected Sale

Protected Tax Increase

Protection Period

Public Entity

Qualifying Partial Floor

Qualifying Plaza Subtenant

Real Property Taxes

Reassessment

Recognition Agreement

Reduced Operating Amount

Reduced Operating Amount Credit

Reduction Amount

Reduction Date

Reduction Fee

Reduction Notice

Reduction Option

Reduction Space

Reimbursements

Relocated Bank Space

Remainder Space

Remaining Space

Remeasured RSF Notice

Remeasurement Notice

Remeasuring Party

Renewal Notice

ii

Renovation Work

Rent

Rent Concessions

Rentable Area

Request for Notice of Availability

Requesting Party

Required A-Level Privileges

Required J-2 Privileges

Reserved Parking Privileges

Responding Party

Restoration

Restore

Review Expenses

Revised Available Space Acceptance Notice

Revised Notice of Availability

RFO Rights

Riser

RSF Objection Notice

Rules and Regulations

Sale

Scheduled Available Space Commencement Date

Scheduled Expansion Designation Date

Scheduled Hold Space Delivery Date

Scheduled Offered Available Space Delivery Date

Scheduled Rent

Second Expansion Option

Second Increment Commencement Date

Second Increment Delivery Penalty Date

Second Increment Delivery Window

Second Increment Office Space

Second Parking Reduction Option

Second Reduction Date

Second Reduction Option

Secured Areas

Securities/Investment Firms

Security Instruments

Seventh Floor Hold Space

SNDAA

South Eyebrow Sign

South Side Space

South Tower

South Tower Building Envelope

South Tower Directory

South Tower Entrance Signs

South Tower Extension Premises

South Tower Extension Term Annual Base Rent

South Tower Eyebrow Signs

South Tower Occupancy Requirement

South Tower Premises

South Tower Signs

South Tower Top Signs

Special Risks

Standard Lease Provisions

Statutory Written Notices or Complaints

Storage Premises

Storage Premises Commitment Notice

Storage Rent

Subject Space

Sublease

Sublease Space

Subsequent Premises

Subsequent Sales

Substitute Credit Enhancements

Substitute J&C Contractor

Substitute Parking Area

Subtenant

Subterranean Garage

Subterranean Space

Successor

Superior Mortgagees

Superior Right

Superior Right Holders

Taking

Taking Date

Target Delivery Date

Target First Increment Commencement Date

Target Fourth Increment Commencement Date

Target Plaza Building Commencement Date

Target Second Increment Commencement Date

Target Third Increment Commencement Date

Tasteful

Telecommunications Equipment

Tenant

Tenant Competitor

Tenant CPA

Tenant Entity

Tenant Maintained Signs

Tenant Parties

Tenant Plaza Building Identification Rights

Tenant Project Identification Rights

Tenant Responsible Work

Tenant’s Additional ATM Right

Tenant’s Area Request

Tenant’s ATM Right

Tenant’s B-Level ATM Location

Tenant’s Contribution

Tenant’s Exterior Signs

Tenant’s Occupants

Tenant’s Occupants’ Maximum Amount

Tenant’s Percentage Share

Tenant’s Plaza Building ATM Location

Tenant’s Security System

Term

Third Expansion Option

Third Increment Commencement Date

Third Increment Delivery Penalty Date

Third Increment Delivery Window

Third Increment Office Space

Tower Name Rights

Transfer

Transfer Consent Notice

Transfer Costs

Transfer Profits

Transferee

Unfinished Space

Unoccupied Space

Upgrade Milestone

Usable Area

Useful Life

Utility Connections

Variable Expenses

worth at the time of award

iii

OFFICE LEASE

THIS OFFICE LEASE (“Lease”) is made and entered into by and between TPG PLAZA INVESTMENTS, LLC, a Delaware limited liability company (“Landlord”) and the Tenant described in Item 1 of the Basic Lease Provisions as of November 19, 2003 (the “Effective Date”).

BASIC LEASE PROVISIONS

1.	Tenant:  CITY NATIONAL BANK, a national banking association (“Tenant”).
2.	Description of Premises/Building/Project:
	2.1  Premises:	The “Premises” shall consist of, subject to the provisions of Section 1.1.2 of the Standard Lease Provisions, approximately 310,055 square feet of Rentable Area (defined in Item 2.2 of the Basic Lease Provisions below), consisting of the First Increment Office Space, the Second Increment Office Space, the Plaza Building Space, the Third Increment Office Space and the Fourth Increment Office Space, as follows:
		(i)	The “First Increment Office Space,” containing approximately 101,986 square feet of Rentable Area, and consisting of all of floors 21, 19, 18, and 16 of the South Tower (defined in Item 2.3 of the Basic Lease Provisions below) as more specifically shown in Exhibit “A” attached hereto;
		(ii)	The “Second Increment Office Space” containing approximately 51,062 square feet of Rentable Area, and consisting of all of floors 20 and 22 of the South Tower (with the parties hereto agreeing that floor 20 and floor 22 each contain 25,531 square feet of Rentable Area) as more specifically shown in Exhibit “A” attached hereto;
		(iii)	The “Plaza Building Space,” containing, subject to the provisions of Section 1.1.2 of the Standard Lease Provisions, approximately 6,644 square feet of Rentable Area on the north side of the ground floor of the Plaza Building (defined in Item 2.3 of the Basic Lease Provisions below) as more specifically shown cross hatched in Exhibit “A” attached hereto (the “Initial Bank Location”);
		(iv)	The “Third Increment Office Space,” containing approximately 50,447 square feet of Rentable Area, and consisting of all of floors 17 and 13 of the South Tower as more specifically shown in Exhibit “A”  attached hereto; and
		(v)	The “Fourth Increment Office Space,” containing approximately 99,916 square feet of Rentable Area, and consisting of all floors 9, 10, 11 and 12 of the South Tower as more specifically shown in Exhibit “A” attached hereto.
		That portion of the Premises contained in the South Tower is sometimes referred to herein as the “South Tower Premises.”
		Each of the five (5) increments of space described above (in subparagraphs (i), (ii), (iii), (iv) and (v) above, respectively) is referred to herein as an “Increment of Space.”
	2.2  Rentable Area of the Premises:	Approximately 310,055 square feet of Rentable Area, subject to the provisions of Section 1.1.2 of the Standard Lease Provisions.
	2.3  Buildings:	The building commonly known as and located at 555 South Flower Street, Los Angeles, California 90071 (the “South Tower”) and the three (3) level building commonly known as and located at 525 South Flower Street, Los Angeles, California 90071 (the “Plaza Building”) (collectively, the “Buildings”).
	2.4  Project:	That certain project more particularly described in Section 1.5 of the Standard Lease Provisions.
	2.5  Rentable Area of the Project:	Approximately 2,648,920 square feet of Rentable Area.
3.	Term:
	3.1  Initial Term:	The Initial Term shall be the period commencing on the First Increment Commencement Date (defined in Item 3.4(i) of the Basic Lease Provisions, below) and expiring on the last day of the calendar month in which the date that

1

	is one hundred eighty (180) calendar months after the Third Increment Commencement Date (defined in Item 3.4(iv) of the Basic Lease Provisions below) occurs (the “Expiration Date”);
3.2  Options to Extend the Term:	Four (4) options, each to extend the Lease for five (5) years (sixty (60) months) in accordance with Section 2.4 of the term of the Standard Lease Provisions, which, subject to certain restrictions, allows Tenant to extend the term of the Lease with respect to less than the entire Premises.
3.3  Delivery Windows:
		(i)	First Increment Office Space: Not before January 15, 2004 and not later than February 15, 2004 (“First Increment Delivery Window”).
		(ii)	Second Increment Office Space:  Not before January 15, 2004 and not later than March 15, 2004 (“Second Increment Delivery Window”).
		(iii)	Plaza Building Space:  Not before July 15, 2004 and not later than January 29, 2005 (“Plaza Building Delivery Window”).
		(iv)	Third Increment Office Space:  Not before August 15, 2004 and not later than October 15, 2004 (“Third Increment Delivery Window”).
		(v)	Fourth Increment Office Space:  Not before May 15, 2006 and not later than June 15, 2006 (“Fourth Increment Delivery Window”).
		The First Increment Delivery Window, the Second Increment Delivery Window, the Plaza Building Delivery Window, the Third Increment Delivery Window and the Fourth Increment Delivery Window may hereinafter be referred to collectively as “Delivery Windows” or each individually as a “Delivery Window.”
3.4  Commencement Date:
		(i)	First Increment Office Space:          The “First Increment Commencement Date” shall be the earlier to occur of (a) the date that is six (6) months following the later of the first day of the First Increment Delivery Window or the date on which Landlord delivers actual possession of the First Increment Office Space to Tenant in Delivery Condition (as defined in Section 1.1.1 of the Work Letter), which date shall be subject to extension for Commencement Date Delays (as defined in Section 5.1.1 of the Work Letter) incurred by Tenant in designing, permitting, constructing or moving into such Increment of Space or (b) the first date Tenant on which commences business occupancy of any portion of the First Increment Office Space.  The “Target First Increment Commencement Date” shall be July 15, 2004.  February 15, 2004 shall be the “First Increment Delivery Penalty Date”; provided, however, that notwithstanding the foregoing, the First Increment Delivery Penalty Date shall be extended one (1) day for each day of Force Majeure Delay (defined in Section 5.1.2 of the Work Letter) or Tenant Delay (defined in Section 5.5 of the Work Letter) suffered by Landlord (and/or Landlord’s contractor) in obtaining possession of the First Increment Office Space or designing, permitting and completing construction of the Minimum Base Building Work (as defined in Schedule 1-C attached to the Work Letter) to be performed therein.
		(ii)	Second Increment Office Space:      The “Second Increment Commencement Date” shall be the earlier to occur of (a) the date that is six (6) months following the later of the first day of the Second Increment Delivery Window or the date on which Landlord delivers actual possession of the Second Increment Office Space to Tenant in Delivery Condition, which date shall be subject to extension for Commencement Date Delays incurred by Tenant in designing, permitting, constructing or moving into such Increment of Space or (b) the first date on which Tenant commences business occupancy of any portion of the Second Increment Office Space.  The “Target Second Increment Commencement Date” shall be August 15, 2004. March 15, 2004 shall be the “Second Increment Delivery Penalty Date”; provided however, that the Second Increment Delivery Penalty Date shall be extended one (1) day for each day of Force Majeure Delay or Tenant Delay suffered by Landlord (and/or Landlord’s contractor) in obtaining possession of the Second Increment Office Space or in designing permitting and completing construction of the Minimum Base Building Work to be performed therein.

2

(iii)	Plaza Building Space:        The “Plaza Building Commencement Date” shall be the earlier to occur of (a) the date that is six (6) months following the later of the first day of the Plaza Building Delivery Window or the date on which Landlord delivers actual possession of the Plaza Building Space to Tenant in Delivery Condition, which date shall be subject to extension for Commencement Date Delays incurred by Tenant in designing, permitting, constructing or moving into such Increment of Space or (b) the first date Tenant on which commences business occupancy of any portion of the Plaza Building Space. The “Target Plaza Building Commencement Date” shall be March 15, 2005.  January 29, 2005 shall be the “Plaza Building Delivery Penalty Date;” provided, however, that the Plaza Building Delivery Penalty Date shall be extended one (1) day for each day of Force Majeure Delay or Tenant Delay suffered by Landlord (and/or Landlord’s contractor) in obtaining possession of the Plaza Building Space (and/or the Plaza Building) or in designing, permitting and completing construction of the Minimum Base Building Work to be performed therein.
(iv)	Third Increment Office Space:         The “Third Increment Commencement Date” shall be the earlier to occur of (a) the date that is five (5) months following the later of the first day of the Third Increment Delivery Window or the date on which Landlord delivers actual possession of the Third Increment Office Space to Tenant in Delivery Condition, which date shall be subject to extension for Commencement Date Delays incurred by Tenant in designing, permitting, constructing or moving into such Increment of Space or (b) the first date on which Tenant commences business occupancy of any portion of the Third Increment Office Space.  The “Target Third Increment Commencement Date” shall be March 15, 2005. October 15, 2004 shall be the “Third Increment Delivery Penalty Date”; provided, however that the Third Increment Delivery Penalty Date shall be extended one (1) day for each day of Force Majeure Delay or Tenant Delay suffered by Landlord (and/or Landlord’s contractor) in obtaining possession of the Third Increment Office Space or in designing, permitting and/or completing construction of the Minimum Base Building Work to be performed therein.
(v)	Fourth Increment Office Space:       The “Fourth Increment Commencement Date” shall be the earlier to occur of (a) the date that is five (5) months following the later of the first day of the Fourth Increment Delivery Window or the date on which Landlord delivers actual possession of the Fourth Increment Office Space to Tenant in Delivery Condition, which date shall be subject to extension for Commencement Date Delays incurred by Tenant in designing, permitting, constructing or moving into such Increment of Space or (b) the first date on which Tenant commences business occupancy of any portion of the Fourth Increment Office Space.  The “Target Fourth Increment Commencement Date” shall be November 15, 2006.  June 15, 2006 shall be the “Fourth Increment Delivery Penalty Date”; provided, however that the Fourth Increment Delivery Penalty Date shall be extended one (1) day for each day of Force Majeure Delay or Tenant Delay suffered by Landlord (and/or Landlord’s contractor) in obtaining possession of the Fourth Increment Office Space or in designing, permitting and/or completing construction of the Minimum Base Building Work to be performed therein.

4.Base Rent (Article 3):   The “Base Rent” shall be the sum of the First Increment Office Space Base Rent, the Second Increment Office Space Base Rent, the Plaza Building Space Base Rent, the Third Increment Office Space Base Rent and the Fourth Increment Office Space Base Rent (as such terms are defined below) as follows:

4.1First Increment Office Space Base Rent:*

Applicable Months	Monthly Base Rent	Annual Base Rent	Base Rental Rate Per RSF Per Year (“First Increment Base Rent Rate”)
*

3

The reference to “applicable months” in this Item 4.1 of the Basic Lease Provisions shall be measured from the First Increment Commencement Date.

*      Notwithstanding the foregoing, in the event that pursuant to Section 1.6.1.7 of the Standard Lease Provisions, Tenant shall exercise the Initial Reduction Option (defined in Section 1.6.1.1, below) so as to eliminate from the Premises two (2) full floors of space from the Premises (either the ninth (9th) and thirteenth (13th) floors or the ninth (9th) and tenth (10th) floors of the South Tower), effective upon the Fourth Increment Commencement Date (and for the remainder of the Term thereafter), the Base Rent rental rate (expressed as the amount of annual Base Rent per square foot of Rentable Area per year payable at any particular time during the Term) (“Base Rent Rate”) for that portion of the Premises attributable to the twenty-first (21st) floor of the South Tower (which the parties hereto stipulate contains 25,531 square feet of Rentable Area) shall be increased from the First Increment Base Rent Rate to equal the Fourth Increment Base Rent Rate (which is set forth in the fourth column of Item 4.5 of the Basic Lease Provisions, and is the Base Rent Rate which would have been applicable for the same time period with respect to the ninth (9th) floor of the South Tower had such floor not been eliminated from the Premises pursuant to Tenant’s exercise of the Initial Reduction Option as to said floor), and (b) accordingly, that portion of the monthly Base Rent payable under this Lease for any particular month during the Term following the Fourth Increment Commencement Date which is attributable to the twenty-first (21st) floor of the South Tower shall be increased to equal (i) the product of (A) 25,531 (the Rentable Area of the Twenty-First (21st) Floor) and (B) the Fourth Increment Base Rent Rate applicable to the month in question, (ii) divided by the number twelve (12)).  The parties acknowledge that in the event that Tenant shall exercise the Initial Reduction Option so as to eliminate from the Premises two (2) full floors, there shall also be an adjustment to the Base Rent Rate of the twenty-second (22nd) floor in accordance with the provisions of Item 4.2.

4.2   Second Increment Office Space Base Rent:

(i)    Base Rent For Twentieth (20th) Floor.

Applicable Months	Monthly Base Rent	Annual Base Rent	Base Rental Rate Per RSF Per Year (“20th Floor Base Rent Rate”)
*	*

The reference to “applicable months” in this Item 4.2(i) of the Basic Lease Provisions, to the extent that months are referred to by number, shall be measured from the Fourth Increment Commencement Date.

(ii)   Base Rent For Twenty-Second (22nd) Floor.*

Applicable Months	Monthly Base Rent	Annual Base Rent	Base Rental Rate Per RSF Per Year (“22nd Floor Base Rent Rate”)
*	*
ate

The reference to “applicable months” in this Item 4.2(ii) of the Basic Lease Provisions (to the extent that months are referred to by number) shall be measured from the First Increment Commencement Date.

*      Notwithstanding the foregoing, in the event that pursuant to Section 1.6.1 of the Standard Lease Provisions, Tenant shall exercise the Initial Reduction Option so as to eliminate from the Premises either two (2) full floors of space from the Premises (either the ninth (9th) and thirteenth (13th) floors or the ninth (9th) and tenth (10th) floors of the South Tower) or only one full floor of space (either the ninth (9th) floor or the thirteenth (13th) floor):

(a)   in the case where Tenant shall exercise the Initial Reduction Option so as to eliminate from the Premises only the thirteenth (13th) floor of the South Tower, effective upon the Third Increment

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Commencement Date (and for the remainder of the Term thereafter), the Base Rent Rate for that portion of the Premises attributable to the twenty-second (22nd) floor of the South Tower (which the parties hereto stipulate contains 25,531 square feet of Rentable Area) shall be increased from the 22nd Floor Base Rent Rate to equal the Third Increment Base Rent Rate (which is set forth in the fourth (4th) column of Item 4.4 of the Basic Lease Provisions, and is the Base Rent which would have been applicable for the same time period with respect to the thirteenth (13th) floor of the South Tower had such floor not been eliminated from the Premises pursuant to Tenant’s exercise of the Initial Reduction Option as to said floor), and accordingly, that portion of the monthly Base Rent payable under this Lease for any particular month during the Term following the Third Increment Commencement Date which is attributable to the twenty-second (22nd) floor of the South Tower shall be increased to equal (i) the product of (A) 25,531 (the Rentable Area of the twenty-second (22nd) floor) and (B) the Third Increment Base Rent Rate applicable to the month in question, (ii) divided by the number twelve (12));

(b)   in the case where Tenant shall exercise the Initial Reduction Option so as to eliminate from the Premises only the ninth (9th) floor of the South Tower, effective upon the Fourth Increment Commencement Date (and for the remainder of the Term thereafter), the Base Rent Rate for that portion of the Premises attributable to the twenty-second (22nd) floor of the South Tower (which the parties hereto stipulate contains 25,531 square feet of Rentable Area) shall be increased from the 22nd Floor Base Rent Rate to equal the Fourth Increment Base Rent Rate (which is set forth in the fourth (4th) column of Item 4.5 of the Basic Lease Provisions, and is the Base Rent Rate which would have been applicable for the same time period with respect to the ninth (9th) floor of the South Tower had such floor not been eliminated from the Premises pursuant to Tenant’s exercise of the Initial Reduction Option as to said floor), and accordingly, that portion of the monthly Base Rent payable under this Lease for any particular month during the Term following the Fourth increment Commencement Date which is attributable to the twenty-second (22nd) floor of the South Tower shall be increased to equal (i) the product of (A) 25,531 (the Rentable Area of the twenty-second (22nd) floor) and (B) the Fourth Increment Base Rent Rate applicable to the month in question, (ii) divided by the number twelve (12));

(c)   in the case where Tenant shall exercise the Initial Reduction Option so as to eliminate from the Premises the ninth (9th) floor and the thirteenth (13th) floor of the South Tower, effective upon the Third Increment Commencement Date (and for the remainder of the Term thereafter): (a) the Base Rent Rate for that portion of the Premises attributable to the twenty-second (22nd) floor of the South Tower (which the parties hereto stipulate contains 25,531 square feet of Rentable Area) shall be increased from the 22nd Floor Base Rent Rate to equal the Third Increment Base Rent Rate (which is set forth in the fourth (4th) column of Item 4.4 of the Basic Lease Provisions, and is the Base Rent Rate which would have been applicable for the same time period with respect to the thirteenth (13th) floor of the South Tower had such floor not been eliminated from the Premises pursuant to Tenant’s exercise of the Initial Reduction Option as to said floor), and accordingly, that portion of the monthly Base Rent payable under this Lease for any particular month during the term following the Third Increment Commencement Date which is attributable to the twenty-second (22nd) floor of the South Tower shall be increased to equal (i) the product of (A) 25,531 (the Rentable Area of the Twenty-Second (22nd) Floor) and (B) the Third Increment Base Rent Rate applicable to the month in question, (ii) divided by the number twelve (12); and

(d)   in the case where Tenant shall exercise the Initial Reduction Option so as to eliminate from the Premises the ninth (9th) floor and the tenth (10th) floor of the South Tower, effective upon the Fourth Increment Commencement Date (and for the remainder of the Term thereafter): (a) the Base Rent Rate for that portion of the Premises attributable to the twenty-second (22nd) floor of the South Tower (which the parties hereby stipulate contains 25,531 square feet of Rentable Area) shall be increased from the 22nd Floor Base Rent Rate to equal the Fourth Increment Base Rent Rate (which is set forth in the fourth column of Item 4.5 of the Basic Lease Provisions, and is the Base Rent Rate which would have been applicable for the same time period with respect to the tenth (10th) floor of the South Tower had such floor not been eliminated from the Premises pursuant to Tenant’s exercise of the Initial Reduction Option as to said floor), and accordingly, that portion of the monthly Base Rent payable under this Lease for any particular month during the Term following the Fourth Increment Commencement Date which is attributable to the twenty-second (22nd) floor of the South Tower shall be increased to equal (i) the product of (A) 25,531 (the Rentable Area of the Twenty-Second (22nd) Floor) and (B) the Fourth Increment Base Rent Rate applicable to the month in question, (ii) divided by the number twelve (12).

4.3   Plaza Building Space Base Rent:

Applicable Months	Monthly Base Rent	Annual Base Rent	Base Rental Rate Per RSF Per Year
*	*

The reference to “applicable months” in this Item 4.3 of the Basic Lease Provisions shall be measured from the Plaza Building Commencement Date.

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4.4   Third Increment Office Space Base Rent:

Applicable Months	Monthly Base Rent	Annual Base Rent	Base Rental Rate Per RSF Per Year (“Third Increment Base Rent Rate”)
*

The reference to “applicable months” in this Item 4.4 of the Basic Lease Provisions shall be measured from the Third Increment Commencement Date.

4.5   Fourth Increment Office Space Base Rent:

Applicable Months	Monthly Base Rent	Annual Base Rent	Base Rental Rate Per RSF Per Year (“Fourth Increment Base Rent Rate”)
*

The reference to “applicable months” in this Item 4.5 of the Basic Lease Provisions shall be measured from the Fourth Increment Commencement Date.

5.             Tenant’s Percentage Share: (Section 4.2)

5.1	Premises:	11.70	%
5.2	First Increment Office Space:	3.85	%
5.3	Second Increment Office Space:	1.93	%
5.4	Plaza Building Space:	0.25	%
5.5	Third Increment Office Space:	1.90	%
5.6	Fourth Increment Office Space:	3.77	%

6.             Security Deposit:  None (Article 6)

7.             Parking Privileges:  (Article 20)

7.1	A-Level Valet Privileges:	Subject to the provisions of Article 20 of the Standard Lease Provisions. * Subterranean [ILLEGIBLE] * Provisions, below) for every full floor of the South Tower leased by Tenant as follows:  (a) Commencing on the First Increment Commencement Date:  * (b)  commencing on the Second Increment Commencement Date: *
7.2	J-2 Unreserved Privileges:	Subject to the provisions of Article 20, commencing on the First Increment, Commencement Date, * * Standard Lease Provisions, below) for every 1,000 square feet of Rentable Area contained within the entire Premises) as follows: (a) with respect to the First Increment Office Space: * unreserved spaces in the J-2 Parking Annex; (c) with respect to the

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		Plaza Building Space: * Parking Annex: (d) with [ILLEGIBLE] increment office Space *
7.3	Validation Privileges:	Landlord shall provide, for each of Tenant’s customers who are visiting the Premises for the purpose of conducting business therein. *
		Validations may be used for parking on any particular calendar day (and any Customer * Validations not used on a particular calendar day shall not be usable on any other calendar day), (ii) Customer * Validations shall only be usable by Tenant’s customers visiting the Premises for the purpose of conducting business therein, and (iii) the Customer * Validations may not be used by Tenant’s employees, agents or visitors, or any other persons (other than Tenant’s customers visiting the Premises for the purpose of conducting business therein). *
		*
		customers and visitors to its Premises (and the parties hereto agree that, for purposes of application of this sentence only (but without application to Customer * Validations), Tenant’s visitors to the Premises shall include employees of Tenant who do not have offices (of an exclusive or shared basis) at the Project).

8.Tenant’s Broker is and notices to Tenant’s Broker shall be sent to :      Cushman & Wakefield of California, Inc. 601 South Figueroa Street, 47th Floor, Los Angeles, California 90017, Attn. Lynn A. Williams, representing Tenant exclusively.

Landlord’s Broker:             Thomas Partners, Inc., representing Landlord exclusively.

Tenant’s Broker and Landlord’s Broker are referred to herein collectively as “Brokers.”(Article 27)

9.Permitted Use:     (Section 7.1)

9.1	South Tower Premises:	General office use consistent with a first class high-rise office project (and any other use of the South Tower Premises permitted by Article 7 of the Standard Lease Provisions).
9.2	Plaza Building Space:	The operation of a retail banking branch office open to the general public, and for no other use with respect to Tenant; provided, however, that if Tenant subleases the Plaza Building Space to an independent third party subtenant in accordance with the provisions of Article 15 of the Standard Lease Provisions (and Landlord does not elect to recapture the Plaza Building Space by exercising its recapture rights under Section 15.2.4 of the Standard Lease Provisions with respect to such Transfer (defined in Section 15.1 of the Standard Lease Provisions, below)), such subtenant shall be permitted to use the Plaza Building Space for any “Permitted Plaza Building First Class Use” (defined in Section 28.9.3 of the Standard Lease Provisions, below) provided that such subtenant satisfies the requirements of being a “Permitted Plaza Building First Class Tenant” (defined in Section 28.9.3 of the Standard Lease Provisions, below).

10.Addresses for Notices (Article 26):

To:Tenant

Prior to the Commencement Date:	After the Commencement Date:
City National Bank	City National Bank
606 S. Olive Street	606 S. Olive Street
Suite 1100	Suite 1100
Los Angeles, CA 90014	Los Angeles, California 90014
Attn: Senior Vice President and Manager of Corporate Premises	Attn: Senior Vice President and Manager of Corporate Premises
(the “First Addressee”)	(the “First Addressee”)

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With a copy to:

City National Bank

400 N. Roxbury Drive

Beverly Hills, CA 90210

Attn: General Counsel

And with a copy to:

*

And with a copy to:

Cushman & Wakefield of California, Inc.

601 South Figueroa Street, 47th Floor

Los Angeles, CA 90017

Attn: Lynn A. Williams

To: Landlord

TPG Plaza Investments, LLC

c/o Thomas Properties Group, LLC

515 South Flower Street

6th Floor

Los Angeles, California 90071

Attn: John Sischo

With a copy to:

*

And with a copy to:

11.           Address for Payments:  All payments payable to Landlord under this Lease shall be sent to the following address or to such other address as Landlord may designate, or by wire transfer.

(a)           Address for Payment of Monthly Base Rent:

TPG Plaza Investments, LLC

*

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If By Wire Transfer:

:

*

(b)Address for Payment of Rent for Parking Privileges:

TPG Plaza Investments, LLC

*

This Lease shall consist of the foregoing Basic Lease Provisions, and the provisions of the Standard Lease Provisions (the “Standard Lease Provisions”) (consisting of Articles 1 through 30 which follow) and Exhibits “A” through “QQ” inclusive, all of which are incorporated herein by this references as of the Effective Date.  In the event of any conflict between the provisions of the Basic Lease Provisions and the provisions of the Standard Lease Provisions, the Standard Lease Provisions shall control.  Any initially capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Standard Lease Provisions.

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STANDARD LEASE PROVISIONS

ARTICLE 1 - PREMISES

1.1Lease of Premises.

1.1.1Generally.  Landlord hereby leases the Premises to Tenant, and Tenant hereby leases the Premises from Landlord, subject to and upon all of the terms, covenants and conditions contained in this Lease.

1.1.2Relocation of the Plaza Building Space.

1.1.2.1Landlord shall have the option (the “Bank Space Option”), exercisable at Landlord’s sole option, to relocate the location of the Plaza Building Space from the Initial Bank Location to a comparable location on the south side of the ground floor of the Plaza Building (“South Side Space”), as depicted on Exhibit “A-1”, attached hereto.  The Plaza Building Space as so relocated is referred to herein as the “Relocated Bank Space.”  The parties agree that the South Side Space shall have the dimensions and configuration shown on Exhibit “A-1”, except that in all cases the dimensions along the demising wall that is perpendicular to and closest to Figueroa Street shall be adjusted, as appropriate such as to provide an amount equal to 5,783 square feet of Usable Area (defined in Section 1.3.2, below) to be contained within the South Side Space.

1.1.2.2Landlord and Tenant hereby approve the location, configuration and Rentable Area of the South Side Space, as depicted on Exhibit A-1.

1.1.2.3The Bank Space Option shall be exercised by delivery of written notice of exercise by Landlord to Tenant no later than January 1, 2004.

1.1.2.4In the event Landlord duly elects to exercise the Bank Space Option, the parties shall execute an amendment of this Lease reflecting the substitution of the Relocated Bank Space for the Initial Bank Location.

1.2Acceptance of Premises.  Tenant acknowledges that (i) Landlord has not made any representation or warranty with respect to the condition of the “Premises” (as that term is defined in Item 2.1 of the Basic Lease Provisions), the Buildings or the Project with respect to the suitability or fitness of any of the same for the conduct of Tenant’s Permitted Use, its business or for any other purpose (provided, however, that such acknowledgement by Tenant shall not release Landlord from any of its obligations to Tenant under any covenants made by Landlord under this Lease, or otherwise decrease Landlord’s obligations under any such covenants) and (ii) the purpose of Exhibit “A” (and Exhibit “A-1”) is to show the approximate location of the Premises in the “Buildings,” as that term is defined in Item 2.3 of the Basic Lease Provisions, only, and that such Exhibit is not meant to constitute an agreement, representation or warranty as to the construction of the Premises, the precise area or the specific location of the “Common Areas,” as that term is defined in Section 1.4, below, or the elements thereof, or of the accessways to the Premises (or any portion thereof) or the “Project,” as that term is defined in Section 1.5, below.

1.3Measurement of the Rentable Area of Premises and the Building.

1.3.1For purposes of this Lease, subject to the provisions of this Section 1.3, the parties hereby stipulate that the number of square feet of Rentable Area (defined in Section 1.3.2, below) contained within (a) the Initial Premises (defined in Section 1.9.1, below) is as set forth in Item 2.2 of the Basic Lease Provisions, and (b) subject to Section 1.1.2, within each Increment of Space, is as set forth in Items 2.1(i), 2.1(ii), 2.1(iii), 2.1(iv) and 2.1(v), respectively of the Basic Lease Provisions.

1.3.2Each of Landlord and Tenant hereby acknowledge and agree that (a) the area in rentable square feet (the “Rentable Area”) and the area in usable square feet (the “Usable Area”) of each of the floors of the South Tower (on a full floor occupancy basis) is as set forth on Exhibit “BB” attached hereto and that the specification therein of such full floor Rentable Area (for each such floor) shall be binding upon Landlord and Tenant, and shall not be subject to re-measurement, and (b) the Usable Area of any Relocated Bank Space shall also be measured in accordance with the Standard Method for Measuring Floor Area in Office Buildings, ANSI 265.1-1996 (“BOMA”).

1.3.3In the event Tenant shall lease a partial floor of the South Tower pursuant to the Hold Space Option, any Expansion Option or the RPO Rights (as defined in Sections 1.6, 1.7 and 1.8, respectively, below), the parties shall (i) determine the Rentable Area of such partial floor by measuring the Usable Area of the space on such partial floor so leased by Tenant and the Usable Area of all other tenant spaces on such floor, in each case in accordance with BOMA (but shall not include as tenant space any space to be contained in the Common Area corridors on such floor) and (ii) determine the Rentable Area of such partial floor space so leased by Tenant by multiplying (A) the Rentable Area of such floor (on a full floor occupancy basis), as set forth on Exhibit “BB”, by (B) a fraction, the numerator of which is the Usable Area of such partial floor space so leased by Tenant (determined in accordance with BOMA), and the denominator of which is the total Usable Area of all tenant spaces on such floor (excluding Common Area corridors and other Common Areas), such that, when all rentable space on such floor has been leased, the total Rentable Area leased on such floor shall not exceed the Rentable Area on such floor if such floor had been leased to a single floor tenant.

1.3.4Within sixty (60) days after Landlord’s delivery to Tenant of any Hold Space, Expansion Space or First Offer Space, Landlord and/or Tenant (the “Remeasuring Party”) shall each have the right, at its option, upon notice (the “Remeasurement Notice”) to the other party, to remeasure such space in accordance with the foregoing standards set forth in Sections 1.3.2, or 1.3.3, as applicable, and to deliver notice (the “Remeasured RSF Notice”) of the results thereof to the non-Remeasuring Party.  In the event that such remeasurement shall indicate a rentable or usable square footage which is different than that set forth in the amendment governing Tenant’s lease of the applicable space (the “Operative Amendment”), then the non-Remeasuring Party may, at its option, upon notice

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(the “RSF Objection Notice”) to the Remeasuring Party within ten (10) business days following receipt of the Remeasured RSF Notice, object to the results set forth in such notice, in which event, the usable square footage and rentable square footage of the Hold Space, Expansion Space or First Offer Space (or the application portion thereof), as the case may be, shall be measured (in accordance with the provisions of this Section 1.3) by a qualified consultant or architect mutually selected by Landlord and Tenant, and the result of such remeasurement shall be binding upon both Landlord and Tenant.  In the event that a Remeasurement Notice is not timely delivered, the Rentable and Usable Area of the subject space shall be set forth in the Operative Amendment and shall not be subject to remeasurement or modification.  Further, in the event an RSF Objection Notice is not timely delivered, the Rentable and Usable Area shall be as set forth in the Remeasured RSF Notice and shall not be subject to remeasurement or modification.  In the event the Rentable Area or Usable Area of any Hold Space, Expansion Space or First Offer Space (or the applicable portion thereof), as the case may be, determined pursuant to the terms of this Section 1.3.4 shall be different from that set forth in the Operative Amendment, all amounts, percentages and figures appearing or referred to in the applicable Operative Amendment based upon such incorrect Rentable or Usable Area (including, without limitation, the amount of Tenant’s Percentage Share (defined in Section 4.2.5, below) with respect to such Hold Space, Expansion Space or First Offer Space as the case may be, the amount of any Tenant Improvement Allowance (defined in Section 2.1 of the Work Letter) or other allowance, and the amount of the Base Rent) shall be modified in accordance with such determination.

1.4Common Areas.

1.4.1Common Areas Generally. “Common Areas” shall mean those portions of the Project now designated as such by Landlord (but subject to such additions, modifications and/or deletions thereto as Landlord shall make from time to time in accordance with the provisions of this Section 1.4), including the lobbies, plaza and sidewalk areas, accessways, Subterranean Garage, J-2 Parking Annex and the area on individual floors of each Building devoted to corridors, fire vestibules, elevators, escalators, foyers, multi-tenant lobbies, electric and telephone closets, restrooms, mechanical rooms, janitor’s closets, and other similar facilities for the benefit of multiple or all tenants and invitees, and shall also mean those areas of the Buildings devoted to mechanical and service rooms servicing the Buildings or portions thereof.  The Common Areas shall be subject to the exclusive management and control of Landlord (provided that Landlord may, at its option, delegate operation and management of portions of the Common Area (such as the Parking Facilities (defined in Section 20.1, below)) from time to time), and Tenant shall comply with all Rules and Regulations (defined in Article 21, below) pertaining to the Common Areas.

1.4.2Contemplated Changes to the Common Areas.

1.4.2.1The Plaza Area.  Tenant acknowledges that Landlord is presently considering substantial modification to the area of the Project located on the Land depicted as the “Plaza Area” (the “Plaza Area”) on Exhibit “DD” attached hereto, including, without limitation, (i) modification, enhancement and/or elimination of the trees, monument signs, landscaping and hardscape in the “Curb Area” of the Plaza Area (the location of which is depicted on Exhibit “DD”); (ii) enhancement, reduction, redesign, modification, renovation of the central fountain (“Central Fountain”) area now located in the Plaza Area; (iii) erection, construction, modification, placement, and/or installation of trees, landscaping, canopies, kiosks, internet connections, tables, chairs, benches, raised dining and/or audience platforms, outdoor dining and/or cafes and related improvements over large portions of the Plaza Area on all sides of the Central Fountain and approaching each of the South Tower, North Tower (defined in Section 1.5.1, below) and Plaza Building, (iv) installation of new fountains, in the Curb Area and/or in other areas of the Plaza Area, and (v) various other improvements.  For illustrative purposes only, the parties have attached hereto as Exhibit “DD” certain elevations and artists’ renderings of certain proposed improvements to the Plaza Area now being considered (which Landlord may or may not install, as determined by Landlord in its sole discretion).

1.4.2.2The Plaza Building.  Currently, the Plaza Building is configured and constructed for occupancy by a single tenant, occupying all three floors of the Plaza Building and having additional operations on the “B” Level (defined in Section 1.5.1, below), with one main entrance on the Plaza Area level and one main entrance on the Figueroa Street level, and an interior escalator connecting the Figueroa Street level to the Plaza Area level.  To accommodate Tenant’s occupancy in the Plaza Building (which will be only in a portion of the Plaza level of the Plaza Building), Landlord will be redesigning and reconfiguring the Plaza Building to accommodate demising of the Plaza Building Space for the benefit of Tenant as well as for the creation of other tenant spaces within the interior of the Plaza Building (and/or immediately outside of the Plaza Building), which redesign and reconfiguration may include the alteration of the Plaza Area entrance to the Plaza Building, creation of a new Plaza Area entrance(s) into the Plaza Building and/or the Plaza Building Space and other modifications to the common elements and functions of the Plaza Building.

1.4.2.3The Tower Ground Floor Lobbies.  Tenant also acknowledges that Landlord is currently considering: (i) conversion to leasable tenant spaces (or to other uses, other than use as Common Area) of all or portions of the lobby spaces contained in the ground floor lobbies of the South Tower and North Tower shown on Exhibits “EE” and “FF” attached hereto (which areas currently constitute Common Areas), and (ii) conversion to leasable tenant spaces (or to uses other than Common Areas) of all or portions of the Common Areas immediately adjacent to the South and North Towers (which are not within such Buildings) and which are shown on Exhibits “EE” and “FF” attached hereto.

1.4.2.4The “B” Level.  Tenant also acknowledges that Landlord is also considering substantial renovation and/or redesign of all areas located on the “B” Level (including the Common Areas located on the “B” Level), which renovation and/or redesign may (but is not required to) include: (i) filling in the central open air and staircase area of the “B” Level (and eliminating such stairway access to the “C” Level (defined in Section 1.5.1, below)), (ii) redirection and redesign of public pedestrian passageways located on the “B” Level and (iii) reconfiguration and/or modification of both tenant spaces and Common Areas on the “B” Level.

1.4.2.5The “C” Level.  Tenant also acknowledges that Landlord is also considering redirecting, modifying, adding to and/or deleting the use, design, tenant spaces and Common Areas on the “C” Level, including, without limitation, (i) consolidation of existing tenant spaces and Common Areas into a higher concentration

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of tenant spaces, (ii) elimination of stairway access to the “B Level”, (iii) redirection or elimination of retail and/or service tenancies, and/or (iv) conversion of some or all of the “C” Level to reserved, valet and/or unreserved parking.

1.4.2.6Tenant Consent and Approval.  Subject to the provisions of this Section 1.4.2.6, in addition to the covenants and consents set forth elsewhere in this Section 1.4, Tenant hereby consents to and approves of (and agrees that Landlord may implement) such changes, additions, deletions modifications, reductions, relocations and changes in use with respect to the Project Common Areas generally as Landlord shall, from time to time during the Term, desire in good faith (and Tenant specifically consents as to all such changes, modifications, reductions, relocations and changes in use as are described as under consideration, possible, or otherwise contemplated by Sections 1.4.2.1 through 1.4.2.5 inclusive), so long as:

(i)Landlord shall continue to provide (subject to interruptions due to casualty, condemnation, temporary construction and Force Majeure) for generally unobstructed pedestrian passage from and to Flower Street to and from the Building entrances specifically identified on Exhibit “GG” attached hereto over the passageways shown on Exhibit “GG” (or such commercially reasonable substitutions for such passageways as Landlord may implement form time to time);

(ii)Landlord shall continue to provide (subject to interruptions due to casualty, condemnation, temporary construction and Force Majeure) for generally unobstructed pedestrian passage from and to Figueroa Street to and from the Building entrances specifically identified on Exhibit “HH” attached hereto over the passageways shown on Exhibit “HH”, which passageways, in part, involve the use of the staircases shown on Exhibit “HH” (or such commercially reasonable substitutions for such passageways as Landlord may implement form time to time).

(iii)Commercially reasonable (consistent with Institutional Owner Practices (defined in Section 4.3.2, below)) passageways in those areas of the ground floor lobbies of the North and South Towers shown as “Continuing Lobby Areas” on Exhibit “H” attached hereto shall continue to be maintained by Landlord (subject to interruptions due to casualty, condemnation, temporary construction, and Force Majeure and further subject to such access control measures as Landlord shall adopt and/or implement form time to time, consistent with Institutional Owner Practices);

(iv)Commercially reasonable access facilities (reasonably equivalent to the access facilities in existence on the Effective Date) providing pedestrian passage with access to and from the B-Level and the Subterranean Garage from and to and the ground floor lobbies of the South Tower and the North Tower shall continue to be maintained by Landlord (subject to interruptions due to casualty, condemnation, temporary construction and Force Majeure, and further subject to such access control measures as Landlord shall adopt and/or implement from time to time, consistent with Institutional Owner Practices;

(v)The essential nature of the Plaza Area as an outdoor area is maintained as an open area, and the parties hereto agree that the installation of uses such as outdoor dining areas, sitting areas or incidental outdoor retail uses, all with or without canopies, shall be deemed to be consistent with the maintenance of the Plaza Area as an open area; and

(vi)All such improvements and modifications to the Common Areas shall be made in a first-class manner consistent with Institutional Owner Practices, and once commenced, shall be diligently prosecuted to completion.

1.4.2.7General Rights of Modification.  Subject to the provisions of this Section 1.4.2, as to the Common Areas generally (not including the Common Areas described in Sections 1.4.2.1 through 1.4.2.5, inclusive, Landlord shall have the right to reasonably (in accordance with Institutional Owner Practices) designate, add to, delete, modify, relocate and/or limit the use of, particular areas or portions of the Project which are, or will be, designated as Common Areas.

1.5Project.

1.5.1The Project Generally.  The “Project” consists of: (i) the South Tower, (ii) the Plaza Building (iii) the building commonly known as and located at 515 South Flower Street, Los Angeles, California 90071 (the “North Tower”), (iv) subject to Section 1.4, certain subterranean retail and office areas including, but not limited to, space on the B-Level (defined in this Section 1.5, below) and on the C-Level (defined in this Section 1.5, below) (the “Subterranean Space”), (vi) the Subterranean Garage (defined in Section 20, below), (vii) the J-2 Parking Annex (defined in Section 20, below); and (viii) the Land (which is improved with landscaping and other improvements) upon which the South Tower, the North Tower, the Plaza Building, the Subterranean Garage, the Subterranean Space, the J-2 Parking Annex and the Common Areas are located.  The “A-Level” shall mean that level that is one (1) level below the ground floors of the South Tower and the North Tower.  The “B-Level” shall mean that level that is two (2) levels below the ground floors of the South Tower and the North Tower.  The “C-Level” shall mean that level that is three (3) levels below the ground floors of the South Tower and the North Tower.

1.5.2Project Upgrades.  Landlord is currently planning to construct, install and/or implement the upgrades to the Project described on Exhibit “CC” attached hereto (the “Project Upgrades”).  The Project Upgrades are only in the conceptual planning phase and actual implementation, construction and/or installation of each such Project Upgrade will be dependent on the successful confirmation by Landlord, as reasonably determined by Landlord, of the following factors (the “Confirmation Variables”): (i) confirmation, through additional analysis, design, engineering, testing and/or research, of the need for each particular Project Upgrade, (ii) confirmation, through reasonable and efficacious solution to the Project need described in clause (i) above, (iii) confirmation, through additional analysis, design, engineering, testing and/or research, that each proposed Project Upgrade is technically feasible, (iv) confirmation, through design, engineering, preparation of plans and specifications, submission of written

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applications, submissions, plans and specifications for issuance of required zoning amendments, variances, conditional use permits, building permits and other governmental approvals and/or entitlements (collectively, “Governmental Approvals and Entitlements”), processing, negotiation and procurement of Governmental Approvals and Entitlements, that each proposed Project Upgrade can be implemented, constructed and/or installed in accordance with all Laws (defined in Section 7.2.1, below), without material adverse modification and/or restriction of the Project, the existing operation of the Project and/or the existing access, use and other rights of Landlord and its tenants, (v) confirmation, through review of existing leases and other contractual obligations of the Project and/or of Landlord and negotiation of modifications of such obligations, as appropriate, that each Proposed Upgrade can be implemented, constructed and/or installed without violation of Landlord’s contractual and/or lease obligations or material adverse modification of Landlord’s rights, and (vi) as to those Project Upgrades which are designed to upgrade the aesthetic environments of the Project or otherwise may have a material impact on the aesthetics of the Project, the Common Areas or portions thereof, confirmation, through further design, engineering, analysis and/or research, that each such Project Upgrade shall have a reasonably effective positive impact on the aesthetics of the Project, taking into account the cost thereof and all other reasonably relevant factors. Landlord shall use commercially reasonable efforts, subject to successful confirmation of the Confirmation Variables, as reasonably determined by Landlord, to construct, implement and/or install, as appropriate, each such Project Upgrade within the time frame described on Exhibit “CC” attached hereto for such Project Upgrade; provided, however, that notwithstanding the foregoing, (a) Landlord specifically reserves the right to (1) modify the nature, design, scope, objective, and/or engineering of each Project Upgrade to reflect such determinations as Landlord shall reasonably make to reflect its review, analysis, and consideration of the Confirmation Variables from time to time and (2) modify the time frames provided in Exhibit “CC” for implementation, construction and/or installation of the Project Upgrades to reflect Landlord’s review, analysis and consideration of the Confirmation Variables (and any modifications to the Project Upgrades effected under Clause (1) above), as well as input received by Landlord from time to time from Landlord’s architects, engineers, consultants and contractors as to the feasibility of and timing required for implementation, construction and installation of the Project Upgrades and (b) in all cases (notwithstanding the provisions of the immediately preceding clauses) Landlord shall implement Project Upgrades (and/or other improvements and/or upgrades to the Building Systems (defined in Section 10.2. below) or the Building Structure (defined in the Section 9.2 below)) and having an aggregate cost to Landlord of not less than * which is December 31, 2008 (provided, further, however, that in the event that Landlord shall incur Force Majeure Delays (and/or Tenant Delays) in implementing such Project Upgrades, the Upgrade Milestone shall be extended one (1) day for each day of Force Majeure Delay or Tenant Delay incurred by Landlord in so implementing such Project Upgrades; provided, further, however that Project Upgrades shall in no case include any work directly pertaining to the abatement or treatment of ACM (expect as expressly permitted by Exhibit “CC”), the J-2 parking Annex, Base Building restrooms or work that is generally considered to be tenant improvement work.

1.6Initial Right to Reduce or Expand Premises.

1.6.1Reduction of Premises.

1.6.1.1Generally.  Tenant or any Qualified Tenant (defined in this Section 1.6.1, below) shall have the one-time right (the “Initial Reduction Option”) to reduce the Premises by deleting, at Tenant’s election (a) all of the thirteenth (13th) floor of the South Tower or all of the ninth (9th) floor of the South Tower, (b) all of the thirteenth (13th) floor of the South Tower and all of the ninth (9th) floor of the South Tower, or (c) all of the ninth (9th) and tenth (10th) floors of the South Tower; provided, however, that Tenant’s right to delete (under either clause (a) or (b) above) the thirteenth (13th) floor of the South Tower from the Premises shall be conditional upon Tenant’s delivery of an Initial Reduction Notice (defined in this Section 1.6.1, below) identifying the thirteenth (13th) floor of the South Tower as the Initial Reduction Space (defined in this Section 1.6.1, below) (or part of the Initial Reduction Space) (and exercising the Initial Reduction Option as to the same) on or before June 15, 2004.  Subject to the provisions of the immediately preceding sentence, the Initial Reduction Option may be exercised by Tenant only by the delivery by Tenant to Landlord, at any time on or before January 1, 2005, of written notice of exercise (the “Initial Reduction Notice”), which Initial Reduction Notice shall specifically reference this Section 1.6.1 and shall specifically identify the floor (or floors) of the South Tower Premises, which Tenant is electing to delete from the Premises pursuant to the provisions of this Section 1.6.1 (the “Initial Reduction Space”).

1.6.1.2Effect of Reduction.  In the event that Tenant timely delivers the Initial Reduction Notice, (a) this Lease shall automatically be amended so as to delete the Initial Reduction Space from the Premises, which deletion from the Premises of the Initial Reduction Space shall be effective upon Landlord’s receipt of the Initial Reduction Notice, and (b) all amounts, percentages and figures appearing or referred to in this Lease based upon the number of square feet of Rentable Area contained within the Premises (and within the Third Increment Office Space or the Fourth Increment Office Space, as applicable) (including, without limitation, the amount of the Tenant Improvement Allowance and the Base Rent) shall be appropriately and immediately reduced; provided, however, that notwithstanding any provision of this Lease to the contrary, for purposes of calculating Base Rent payable by Tenant hereunder:

(i)in the case where Tenant shall exercise the Initial Reduction Option so as to eliminate from the Premises the ninth (9th) floor of the South Tower only, for purposes of calculating the Base Rent payable for the Fourth Increment Office Space (which commences on the Fourth Increment Commencement Date), the ninth (9th) floor (and the Rentable Area of the ninth (9th) floor) shall be deleted from the Fourth Increment Office Space; provided, however, as of the Fourth Increment Commencement Date, the Base Rent attributable to the twenty-second (22nd) floor of the South Tower shall be adjusted as provided in Item 4.2 of the Basic Lease Provisions;

(ii)in the case where Tenant shall exercise the Initial Reduction Option so as to eliminate from the Premises the thirteenth (13th) floor of the South Tower only, for purposes of calculating the Base Rent payable for the Third Increment Office Space (which commences on the Third Increment Commencement Date), the thirteenth (13th) floor (and the Rentable Area of the thirteenth (13th) floor) shall be deleted from the Third Increment Office Space; provided, however, as of the Third Increment Commencement Date, the Base Rent attributable to the twenty-second (22nd) floor of the South Tower shall be adjusted as provided in Item 4.2 of the Basic Lease Provisions;

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(iii)in the case where Tenant shall exercise the Initial Reduction Option so as to eliminate from the Premises the ninth (9th) and thirteenth (13th) floors of the South Tower, (A) for purposes of calculating the Base Rent payable for the Third Increment Office Space (which commences on the Third Increment Commencement Date), the thirteenth (13th) floor (and the Rentable Area of the thirteenth (13th) floor) shall be deleted from the Third Increment Office Space; provided, however, as of the Third Increment Commencement Date, the Base Rent attributable to the twenty-second (22nd) floor of the South Tower shall be adjusted as provided in Item 4.2 of the Basic Lease Provisions, and (B) for purposes of calculating the Base Rent payable for the Fourth Increment Office Space (which commences on the Fourth Increment Commencement Date), the ninth (9th) floor (and the Rentable Area of the ninth (9th) floor) shall be deleted from the Fourth Increment Office Space; provided, however, as of the Fourth Increment Commencement Date, the Base Rent attributable to the twenty-first (21st) floor of the South Tower shall be adjusted as provided in Item 4.1 of the Basic Lease Provisions; and

(iv)in the case where Tenant shall exercise the Initial Reduction Option so as to eliminate from the Premises the ninth (9th) and tenth (10th) floors of the South Tower, (A) for purposes of calculating the Base Rent payable for the Fourth Increment Office Space (which commences on the Fourth Increment Commencement Date), the tenth (10th) floor (and the Rentable Area of the tenth (10th) floor) shall be deleted from the Fourth Increment Office Space; provided, however, as of the Fourth Increment Commencement Date, the Base Rent attributable to the twenty-second (22nd) floor of the South Tower shall be adjusted as provided Item 4.2 of the Basic Lease Provisions, and (B) for purposes of calculating the Base Rent payable for the Fourth Increment Office Space (which commences on the Fourth Increment Commencement Date), the ninth (9th) floor (and the Rentable Area of the ninth (9th) floor) shall be deleted from the Fourth Increment Office Space; provided, however, as of the Fourth Increment Commencement Date, the Base Rent attributable to the twenty-first (21st) floor of the South Tower shall be adjusted as provided in Item 4.1 of the Basic Lease Provisions.

1.6.2Hold Space Option.

(i)Hold Space.  As used in this Section 1.6.2 and elsewhere in this Lease, the term “Hold Space” shall mean, at Tenant’s election; (i) all or, subject to the provisions of this Section 1.6.2, any portion of the area on the eighth (8th) floor of the South Tower that equals at least fifth percent (50%) of the Rentable Area on the eighth (8th) floor of the South Tower (the “Eighth Floor Hold Space”); (ii) all or, subject to the provisions of this Section 1.6.2, any portion of the area on the seventh (7th) floor of the South Tower which equals at least fifty percent (50%) of the Rentable Area on the seventh (7th) floor of the South Tower (the “Seventh Floor Hold Space”); or (iii) any combination of such Eighth Floor Hold Space and the Seventh Floor Hold Space; provided, however that, in connection with its exercise of its rights to lease Hold Space pursuant to this Section 1.6.2: (a) Tenant shall be required to lease Hold Space consisting of one hundred percent (100%) of the Rentable Area on the eighth (8th) floor of the South Tower before leasing any Hold Space on the seventh (7th) floor of the South Tower, (b) Tenant shall have no right to lease less than fifty percent (50%) of the Rentable Area on either the eighth (8th) or the seventh (7th) floor of the South Tower, and (c) in the event that Tenant delivers an Initial Expansion Notice (defined in Section 1.6.2(ii), below) indicating that Tenant elects to lease less than one hundred percent (100%) of the Rentable Area on either the eighth (8th) or the seventh (7th) floor of the South Tower (any such space, the “Partial Floor Hold Space”), Landlord shall have the right: (i) to require that Tenant leave no less than eight thousand (8,000) square feet of Rentable Area not leased by Tenant on the floor on which such Partial Floor Hold Space is located (the “Partial Floor Hold Space Floor”) (which shall be either the eighth (8th) or the seventh (7th) floor of the South Tower), and (ii) to vary the size of the Hold Space to be leased by Tenant on the Partial Floor Hold Space Floor by up to two thousand (2,000) square feet of Rentable Area (so long as Landlord does not reduce the Rentable Area of the Partial Floor Hold Space to less than one-half of the Rentable Area on the Partial Floor Hold Space Floor).  In the case where Tenant shall exercise the Hold Space Option with respect to any Partial Floor Hold Space (either on the eighth (8th) or the seventh (7th) floor of the South Tower), Tenant shall reasonably designate the configuration of such Partial Floor Hold Space so leased; provided, however, that any such Partial Floor Hold space so designated by Tenant shall include only one elevator lobby entrance and shall be configured in a manner such that all of the space on the Partial Floor Hold Space Floor that is not leased by Tenant shall be of a commercially reasonable configuration.

(ii)Right to Lease Hold Space.  Any Qualified Tenant shall (subject to the all of the conditions and restriction of this Section 1.6, including, but not limited to Section 1.6.2(i), above) have the one-time right (the “Hold Space Option”), exercisable by delivering written notice (the “Initial Expansion Notice”) to Landlord at any time on or before January 1, 2005, to expand the Premises by the addition of the Eighth Floor Hold Space and/or the Seventh Floor Hold Space.  After January 1, 2005, Tenant shall have no right to lease any portion of the Hold Space pursuant to this Section 1.6.  In the event that Tenant elects to lease any Hold Space that includes any Partial Floor Hold Space, Landlord shall, at Landlord’s sole cost and expense, construct all walls and make all other alterations required to demise (the “Demising Work”) such Partial Floor Hold Space.

(iii)Initial Expansion Notice.  The Initial Expansion Notice, if delivered by Tenant, shall specifically indicate that Tenant is exercising its right to expand the Premises pursuant to this Section 1.6.2 (and shall specifically reference this Section 1.6.2) and shall specifically identify the Hold Space (i.e., the portion (expressed in approximate Rentable Area) located on the eighth (8th) and/or seventh (7th) floors in the South Tower) which Tenant is electing to lease.  The delivery by Tenant wishes to lease that does not conform to the conditions specified in Section 1.6.2(i) above shall, at the election of Landlord, exercised by notice to Tenant given within ten (10) business days of Landlord’s receipt of the Initial Expansion Notice, be rendered null and void and of no force or effect.

(iv)Terms of Lease Applicable to Hold Space.  Subject to the provisions of this Section 1.6, in the event that Tenant timely delivers an Initial Expansion Notice complying with the requirements of this Section 1.6.2, this Lease shall automatically be amended to add the Hold Space which Tenant has elected to lease pursuant to such Initial Expansion Notice (the “Added Hold Space”), which lease shall, expect as specifically specified to the contrary herein, be on the identical terms and conditions as Tenant’s lease of the Fourth Increment Office Space except that: (1) the monthly Base Rent payable for the Added Hold Space shall (at each point during the Term hereof after the Hold Space Commencement Date) be an amount equal to the product of the Rentable Area of such Added Hold Space and monthly Base Rental Rate (per square foot of Rentable Area per month) equal to the Third Increment Base Rental Rate as specified in the fourth (4th) column of Item 4.4 of the Basic Lease Provisions

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(i.e., the same rate payable for the same month for the Third Increment of Office Space), (2) all amounts, percentages and figures appearing or referred to in this Lease based upon the Rentable Area of the Premises shall be appropriately adjusted and (3) the amount of the Tenant Improvement Allowance for such Added Hold Space shall be equal to the product of. *

(v)Hold Space Delivery and Commencement Date.  Landlord shall use commercially reasonable efforts to deliver possession of any Added Hold Space to Tenant in Delivery Condition on or before the date that is the later to occur of (1) the date sixty (60) days after the date on which Tenant delivers the Initial Expansion Notice with respect thereto (the “Scheduled Hold Space Delivery Date”) and (2) the date thirty (30) days after the date on which the BofA Lease (defined in Exhibit “Y”, attached hereto) terminates and the Added Hold Space in question is vacated by all prior occupants; provided, however, without Tenant’s prior written consent the Delivery Date for any such Added Hold Space shall not occur prior to the date that is sixty (60) days following the date that Tenant delivers to Landlord the Initial Expansion Notice with respect thereto.  The Commencement Date for such Added Hold Space (the “Hold Space commencement Date”), shall be the earlier to occur of: (A) the date that is six (6) months following the date possession of such Added Hold Space in Delivery Condition is delivered to Tenant, as such date shall be extended on a day for day basis for each day of Commencement Date Delay suffered by Tenant in designing, permitting and constructing Tenant Improvements in the Added Hold Space (and in moving into such Added Hold Space) or (B) the date on which Tenant first commences business occupancy in such Added Hold Space.  Landlord shall use commercially reasonable efforts to deliver possession of any Added Hold Space to Tenant in the Delivery Condition required by the Work Letter for such Added Hold Space on or before the Scheduled Hold Space Delivery Date; provided, however, that in the event such delivery of possession of any portion of the Added Hold Space (in Delivery Condition) is delayed for any reason, this Lease shall not be void or voidable (or terminable by Tenant) in whole, in part or with respect to any part or portion of the Added Hold Space or the Premises, the Term of this Lease shall not be extended, and Landlord shall not (if and to the extent it has used commercially reasonable efforts to deliver the Added Hold Space to Tenant in Delivery Condition on or before the Scheduled Hold Space Delivery Date) be liable to Tenant for any loss or damage resulting from such delay or from the failure of the delivery of possession of such Added Hold Space (in Delivery Condition) to occur on any particular date; provided, further, however, that for purposes of this Section 1.6.2(v), “commercially reasonable efforts” shall include (x) appointment of a specific member of Landlord’s construction management staff to specifically monitor and supervise all efforts of Landlord in (A) coordinating with existing tenants who currently occupy any portion of any Increment of Space in question in order to facilitate the timely vacation of such occupied space by such tenants on a timely basis, (B) performing all Minimum Base Building Work, as that term is defined in the Work Letter so as to facilitate a timely completion of such work and (C) coordinating with Tenant to facilitate Tenant’s commencement of construction of tenant improvements in each such Added Hold Space and (y) the commencement and diligent prosecution of unlawful detainer proceedings against any holdover tenant or tenants holding over in any such Added Hold Space if any such holdover continues for more than sixty (60) days after the Scheduled Hold Space Delivery Date; provided, finally, however, that Landlord’s obligation to so commence and pursue unlawful detainer litigation shall be subject to compliance with the provisions, if any, in the lease or leases of any such holdover tenants which restrict or otherwise limit Landlord’s rights to pursue unlawful detainer litigation against such holdover tenants.

1.6.3No Right to Expand and Reduce.  Tenant shall have no right to deliver both an Initial Expansion Notice and an Initial Reduction Notice, and upon Tenant’s delivery of either such notice, Tenant shall be deemed to have waived its rights to deliver the other type of notice and such rights shall terminate and be of no further force or effect.

1.6.4Amendment to Lease.  If Tenant timely delivers an Initial Expansion Notice or an Initial Reduction Notice, Landlord and Tenant shall, within a reasonable period of time after Tenant’s delivery of any such notice, execute an amendment to this Lease (a) confirming either (i) the addition of the Added Hold Space to the Premises or (ii) the deletion of the Initial Reduction Space from the Third Increment Office Space or the Fourth Increment Office Space, as applicable, and (b) making any other modifications to this Lease which are appropriate under the circumstances (which shall, without limitation, in the event that Tenant shall exercise the Initial Reduction Option, include the conversion of the Base Rental Rate for one floor of space from the First Increment Office Space or the Second Increment Office Space, as applicable for each floor of space deleted from Premises pursuant to Tenant’s exercise of the Initial Reduction Option from the Base Rental Rate for the First Increment Office Space (as set forth in the fourth (4th) column of Item 4.1 of the Basic Lease Provisions), or Second Increment Office Space (as set forth in the fourth (4th) column of Item 4.2 of the Basic Lease Provisions) as applicable to the Third Increment Base Rent Rate (as set forth in the fourth (4th) column of Item 4.4 of the Basic Lease Provisions) or the Fourth Increment Base Rent Rate (as set forth in the fourth (4th) column of Item 4.5 of the Basic Lease Provisions)), as applicable.

1.7Expansion Space.  Landlord hereby grants to Original Tenant, any Qualified Tenant or any Permitted Assignee (as defined in Section 2.4.1, below), the right to lease additional space (“Expansion Space”) in the South Tower upon the terms and conditions set forth in this Section 1.7.

1.7.1Right to Lease Expansion Space.  Original Tenant, a Qualified Tenant or a Permitted Assignee only (and not any other assignee, sublessee or other Transferee (as defined in Section 15.1, below) of Tenant’s interest in this Lease) is hereby granted three (3) options (“Expansion Option” or “Expansion Options”) to lease Expansion Space (as that term is defined in Section 1.7.2, below), at the times set forth in Section 1.7.2, and in the manner (and subject to the conditions) set forth in this Section 1.7.  The time period during which Landlord shall deliver any Expansion space to Tenant shall be referred to as the “Delivery Period.”

1.7.2Expansion Space/Delivery Periods.  As used herein, the term “Expansion Space” shall refer, individually or collectively, as the context may require, to the Five Year Expansion Space, the Eight Year Expansion Space, and the Eleven Year Expansion Space, as those terms are defined below in Sections 1.7.2.1, 1.7.2.2 and 1.7.2.3, respectively.

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1.7.2.1Five Year Expansion Space.  The space in the South Tower which shall be the subject of the First Expansion Option (defined in Section 1.7.4, below), and which is to be leased upon exercise by Tenant of such option (the “Five Year Expansion space”):

(i)shall, in the event that: (A) Tenant shall have exercised its Hold Space Option or shall have exercised its RFO Rights as to only a portion of a floor, and at the time of Tenant’s exercise of the First Expansion Option, a portion of such floor shall remain unleased (“Five Year Expansion Remainder Space”) and (B) Tenant shall exercise the First Expansion Option as to a portion but not all of the then Designated Five Year Expansion Floor (defined in Section 1.7.2.1(iv) below), unless either: (1) such Five Year Expansion Remainder Space is not contiguous to another floor in the Premises or (2) some other tenant of the Project is then leasing space on the floor on which such Five Year Expansion Remainder Space is located, include all such Five Year Expansion Remainder Space

(ii)may, in addition to including, if Section 1.7.2.1(i) shall be applicable, all Five Year Expansion Remainder Space, include, at the election of Tenant (which election shall be set forth in Tenant’s Expansion Exercise Notice (defined in Section 1.7.4. below)), either: (A) all of the then Designated Five Year Expansion Floor (defined in Section 1.7.2.1(iv), below) or (B) fifty percent (50%) or more of the Designated Five Year Expansion Floor; provided, however, that if in Tenant’s Expansion Exercise Notice, Tenant elects to exercise the First Expansion Option as to less than all of the Designated Five Year Expansion Floor, Landlord shall have the right:

(A)to require that not less than eight thousand (8,000) square feet of Rentable Area be left unleased by Tenant on the Designated Five Year Expansion Floor; and

(B)if the Five Year Expansion Space is to be on the Designated Five Year Expansion Floor, Landlord shall have the right to specify the exact size of the Five Year Expansion Space to be leased on such floor (so long as it is not more than two thousand (2,000) square feet of Rentable Area larger or smaller than the Partial Floor Size (defined in Section 1.7.4, below) specified by Tenant in its Expansion Exercise Notice (provided that Landlord may never specify space which is less than one half of such Designated Five Year Expansion Floor).

(iii)In all cases where Tenant’s exercise of the First Expansion Option will leave space unleased on a floor, subject to Sections 1.7.2.1(i) and (ii), Tenant shall reasonably designate the configuration of the space on such floor to be so leased by Tenant: provided, however, that any such space so designated by Tenant shall include only one elevator lobby entrance and shall be configured in a manner such that all of the space on such floor not leased by Tenant shall be of a commercially reasonable configuration.

(iv)“Designated Five Year Expansion Floor” shall mean any floor in the South Tower which is designated by Landlord as the Five Year Expansion Space in an Expansion Designation Notice (defined in Section 1.7.5, below) and which must be contiguous to the Premises either (A) as it existed as of the Effective Date, (B) as it existed as of the date immediately following any exercise of the Hold Space Option or the Initial Reduction Option, (C) as of the date on which Landlord delivers the applicable Expansion Designation Notice, (D) as of any date on which Tenant shall exercise any of its RFO Rights, or (E) any of floors 8,7, 6 or 5 in the South Tower; provided, however, unless such floor is selected by virtue of clauses (A) through (D) above, such floor shall be at the time of designation in an Expansion Designation Notice the most contiguous of such of floors 8, 7, 6 and 5 which is also then unencumbered by leases or expansion or other rights of other tenants.

1.7.2.2Eight Year Expansion Space.  The space in the South Tower which shall be the subject of the Second Expansion Option (defined in Section 1.7.4, below) and which is to be leased upon exercise by Tenant of such option (the “Eight Year Expansion Space”):

(i)shall in the event that: (A) Tenant shall have exercised its Hold Space Option, its RFO Rights and/or its First Expansion Option with respect to only a portion of any floor in the South Tower such that, at the time of its exercise of the Second Expansion Option, Tenant shall be leasing only a portion of a floor in the South Tower, and a portion of such floor shall remain unleased (“Eight Year Expansion Remainder Space”) and (B) Tenant shall exercise the Second Expansion Option as to a portion, but not all, of the then Designated Eight Year Expansion Floor (defined in Section 1.7.2.2(iv) below), unless either: (1) such Eight Year Expansion Remainder Space is not contiguous to another floor in the Premises or (2) some other tenant of the Project is then leasing space on the floor on which such Eight Year Remainder Space is located, include all such Eight Year Expansion Remainder Space;

(ii)may, in addition to including, if Section 1.7.2.2(i) shall be applicable, all Eight Year Expansion Remainder Space, include, at the election of Tenant (which election shall be set forth in Tenant’s Expansion Exercise Notice), either: (A) all of the then Designated Eight Year Expansion Floor or (B) fifty percent (50%) or more of the Designated Eight Year Expansion Floor; provided, however, that if in Tenant’s Expansion Exercise Notice, Tenant elects to exercise the Second Expansion Option as to less than all of the Designated Eight Year Expansion Floor, Landlord shall have the right:

(A)to require that not less than eight thousand (8,000) square feet of Rentable Area be left unleased by Tenant on the Designated Eight Year Expansion Floor; and

(B)if the Eight Year Expansion space is to be on the Designated Eight Year Expansion Floor, Landlord shall have the right to specify the exact size of the Eight Year Expansion Space to be leased on such floor (so long as it is not more than two thousand (2,000) square feet of Rentable Area larger or smaller than the Partial Floor Size specified by Tenant in its Expansion Exercise Notice) (provided that in no case shall Landlord specify space that is less than one-half of the floor in question).

(iii)In all cases where Tenant’s exercise of the Second Expansion Option will leave space unleased on a floor, subject to Sections 1.7.2.2(i) and (ii).  Tenant shall reasonably designate the configuration of the space on such floor to be so leased by Tenant; provided, however, that any such space so designated by Tenant shall

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include only one elevator lobby entrance and shall be configured in a manner such that all of the space on such floor not leased by Tenant shall be of a commercially reasonable configuration.

(iv)“Designated Eight Year Expansion Floor” shall mean any floor in the South Tower which is designated by Landlord as the Eight Year Expansion Space in an Expansion Designation Notice and which must be contiguous to the Premises either (A) as it existed as of the Effective Date, (B) as it existed as of the date immediately following Tenant’s exercise of the Hold Space Option or the Initial Reduction Option, (C) as of the date on which Landlord delivers the applicable Expansion Designation Notice, (D) as of any date on which Tenant shall exercise its RFO Rights, or (E) as of the date on which Tenant shall exercise its First Expansion Option.

1.7.2.3Eleven Year Expansion Space.  The space in the South Tower which shall be the subject of the Third Expansion Option (defined in Section 1.7.4, below), and which is to be leased upon exercised by Tenant of such option (the “Eleven Year Expansion Space”):

(i)shall, in the event that: (A) Tenant shall have exercised its Hold Space Option, its RFO Rights, its First Expansion Option and/or its Second Expansion Option with respect to only a portion of any floor in the South Tower such that, at the time of its exercise of the Third Expansion Option (defined in Section 1.7.4, below), Tenant shall be leasing only a portion of a floor in the South Tower and a portion of such floor shall remain unleased (“Eleven Year Expansion Remainder Space”) and (B) Tenant shall exercise the Third Expansion Option as to a portion, but not all, of the then Designated Eleven Year Expansion Floor (defined in Section 1.7.2.3(iv)), unless either: (1) such Eleven Year Expansion Remainder space is not contiguous to another floor in the premises or (2) some other tenant of the Project is then leasing space on the floor on which such Eleven Year Remainder Space is located, include all such Eleven Year Expansion Remainder Space;

(ii)may, in addition to including, if Section 1.7.2.3(i) shall be applicable, all Eleven Year Expansion Remainder Space, include, at the election of Tenant (which election shall be set forth in Tenant’s Expansion Exercise Notice), either (A) all of then Designated Eleven Year Expansion Floor or (B) fifty percent (50%) or more of the Designated Eleven Year Expansion Floor; provided, however, that if in Tenant’s Expansion Executive Notice, Tenant elects to exercise the Third Expansion Option as to less than all of the Designated Eleven Year Expansion Floor, Landlord shall have the right:

(A)to require that not less than eight thousand (8,000) square feet of Rentable Area be left unleased by Tenant on the Designated Eleven Year Expansion Floor; and

(B)if the Eleven Year Expansion Space is to be on the Designated Eleven Year Expansion Floor, Landlord shall have the right to specify the exact size of the Eleven Year Expansion Space to be leased on such floor (so long as it is not more than two thousand (2,000) square feet of Rentable Area larger or smaller than the Partial Floor Size specified by Tenant in its Expansion Exercise Notice), provided that in no case shall Landlord specify space which is less than one-half of the floor in question.

(iii)In all cases where Tenant’s exercise of the Third Expansion Option will leave space unleased on the floor in question, subject to Sections 1.7.2.3(i) and (ii), Tenant shall reasonably designate the configuration of the space on such floor to be so leased by Tenant; provided, however, that any such space so designated by Tenant shall include only one elevator lobby entrance and shall be configured in a manner such that all of the space on such floor not leased by Tenant shall be of a commercially reasonable configuration.

(iv)“Designated Eleven Year Expansion Floor” shall mean any floor in the South Tower which is designated by Landlord as the Eleven Year Expansion Space in an Expansion Designation Notice and which must be contiguous to the Premises either (A) as it existed as of the Effective Date, (B) as it existed as of the date immediately following Tenant’s exercise of the Hold Space Option or the Initial Reduction Option, (C) as of the date on which Landlord delivers the applicable Expansion Designation Notice, (D) as of any date on which Tenant shall exercise its RFO Rights, (E) as of the date on which Tenant shall exercise its First Expansion Option, or (F) as of the date on which Tenant shall exercise its Second Expansion Option.

1.7.3Expansion Space Delivery Dates.

(i)The target delivery date (“Target Delivery Date”) for the Five Year Expansion Space shall be the first day of the sixth (6th) Lease Year (provided, that, notwithstanding anything to the contrary herein, for purposes of this Section 1.7.3(i), the first Lease Year shall commence on the Third Increment Commencement Date and shall end on the last day of the twelfth (12th) month thereafter, and the second Lease Year (and each succeeding Lease Year thereafter) shall commence on the first day of the next calendar month); provided, however, that Landlord shall have the right (but not the obligation) to change such Target Delivery Date to any date during the fifth (5th) or sixth (6th) Lease Year (with the first Lease Year commencing on the Third Increment Commencement Date) by delivery of written notice of such change to Tenant (so long as such notice is not delivered less than thirteen (13) months prior to the new Target Delivery Date described in such notice).

(ii)The Target Delivery Date for the Eight Year Expansion Space shall be the first day of the ninth (9th) Lease Year (provided, that, notwithstanding anything to the contrary herein, for purposes of this Section 1.7.3(ii), the first Lease Year shall commence on the Third Increment Commencement Date and shall end on the last day of the twelfth (12th) month thereafter, and the second Lease Year (and each succeeding Lease Year thereafter) shall commence on the first day of the next calendar month; provided, however, that Landlord shall have the right (but not the obligation) to change such Target Delivery Date to any date during the eighth (8th) or ninth (9th) Lease Year (with the first Lease Year commencing on the Third Office Increment Commencement Date) by delivery of written notice of such change to Tenant (so long as such notice is not delivered less than thirteen (13) months prior to the new Target Delivery Date described in such notice).

(iii) The Target Delivery Date for the Eleven Year Expansion Space shall be the first day of the twelfth (12th) Lease Year (provided, that, notwithstanding anything to the contrary herein, for purposes

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of this Section 1.7.3(iii), the first Lease Year shall commence on the Third Increment Commencement Date and shall end on the last day of the twelfth (12th) month thereafter, and the second Lease Year (and each succeeding Lease Year thereafter) shall commence on the first day of the next calendar month; provided, however, that Landlord shall have the right (but not the obligation) to change such Target Delivery Date to any date during the eleventh (11th) or twelfth (12th) Lease Year (with the first Lease Year commencing on the Third Office Increment Commencement Date) by delivery of written notice of such change to Tenant (so long as such notice is not delivered less than thirteen (13) months prior to the new Target Delivery Date described in such notice).

1.7.4Method of Exercise.  If Tenant desires to exercise (i) its Expansion Option with respect to the Five Year Expansion Space (the “First Expansion Option”), (ii) its Expansion Option with respect to the Eight Year Expansion Space (the “Second Expansion Option”), or (iii) its Expansion Option with respect to the Eleven Year Expansion Space (the “Third Expansion Option”), as set forth in this Section 1.7, Tenant shall, after Landlord delivers an Expansion Designation Notice with respect to such Expansion Space, and not less than nine (9) months and not more than twelve (12) months before the then effective Target Delivery Date (“Expansion Period”) for such Expansion Space specified by Landlord pursuant to Section 1.7.3, deliver written notice to Landlord (an “Expansion Exercise Notice”).  Tenant’s Expansion Exercise Notice: (i) shall expressly reference this Section 1.7 and indicate that Tenant is exercising its First Expansion Option, Second Expansion Option, or Third Expansion Option, as the case may be, (ii) shall specify and identify the Expansion Space which Tenant is electing to lease pursuant to its applicable Expansion Option, and (iii) in the event that such Expansion Space does not include all of the Rentable Area on the Designated Five Year Expansion Floor, Designated Eight Year Expansion Floor or Designated Eleven Year Expansion Floor, as applicable, shall identify the Rentable Area of the partial floor space (the “Partial Floor Size”) which Tenant is seeking to lease pursuant to its exercise of such Expansion Option (which Partial Floor Size shall include no less than fifty percent (50%) of the Rentable Area on any such floor) and shall otherwise be subject to the provisions of Section 1.7.2.1, Section 1.7.2.2, or Section 1.7.2.3, as applicable.  Any Expansion Exercise Notice delivered to Landlord by Tenant that does not comply with each of conditions (i), (ii) and (iii) above shall, at the election of Landlord, exercised by delivery of notice to Tenant within ten (10) business days of Landlord’s receipt of Tenant’s Expansion Exercise Notice, be null, void and of no force or effect.  If Tenant fails to deliver the Expansion Exercise Notice with respect to a particular Expansion Space within the time period specified above, Tenant shall have no further right to lease such Expansion Space pursuant to this Section 1.7.  If, within sixty (60) days after the date Tenant delivers an Expansion Exercise Notice to Landlord, Landlord and Tenant have not mutually agreed upon the Expansion Rent (as defined in Section 1.7.7, below) for the applicable Expansion Space, then the parties shall follow the procedure, and the Expansion Rent for such Expansion Space shall be determined as, set forth in Section 2.4.5 of this Lease.

1.7.5Designation of Expansion Space.  Landlord shall, on or before the date which is thirteen (13) months before the Target Delivery Date set forth in Section 1.7.3 hereof (the “Scheduled Expansion Designation Date”), with respect to the Five Year Expansion Space, Eight Year Expansion Space or the Eleven Year Expansion Space, as the case may be, deliver notice to Tenant (“Expansion Designation Notice”), which Expansion Designation Notice shall: (a) identify the Five Year Remainder Space, the Eight Year Remainder Space, or the Eleven Year Remainder Space, as the case may be, if any, (b) identify the Designated Five Year Expansion Floor, the Designated Eight Year Expansion Floor or the Designated Eleven Year Expansion Floor, as the case may be, (c) specify Landlord’s revision, if any, of the Target Delivery Date with respect to such Expansion Space, and (d) identify the Rentable Area of such Expansion Space (which Rentable Area shall have been determined by Landlord in accordance with Section 1.3 above), and (e) identify the applicable three (3) month Expansion Period.

1.7.6Delivery of Expansion Space.  Landlord shall use commercially reasonable, good faith efforts to deliver to Tenant (consistent with the requirements of Section 1.7.8) each Expansion Space upon the applicable Target Delivery Date; provided, however, that in the event that Landlord is not in a position to so deliver such Expansion Space because of a holdover in all or a portion of such Expansion Space by a prior tenant of such space or because of any Permitted Other Reason (defined in this Section 1.7.6, below), Landlord shall not be in breach under this Lease (and otherwise shall have no liability to Tenant), as long as with respect to (i) any delay in delivery of possession due to a holdover tenant, Landlord shall use commercially reasonable efforts to regain full possession of such Expansion Space (including, without limitation, if a holdover continues for more than sixty (60) days beyond the Target Delivery Date, filing of an unlawful detainer action against such holdover tenant) and (ii) any other form of delay in delivery of possession, Landlord uses commercially reasonable and good efforts to deliver such Expansion Space as soon as reasonably possible (and the parties hereto agree that Landlord shall be deemed not to have used commercially reasonable and good faith efforts to deliver any Expansion Space upon the applicable Target Delivery Date if Landlord shall fail to deliver any Expansion Space on such date because Landlord has leased such space to any other person (other than any prior lease where the prior tenant is a holdover tenant on such date)).  “Permitted Other Reason” shall mean any reason which is not within Landlord’s control; provided, however, that for purposes of the application and interpretation of this Section 1.7.6, any nonperformance of a reputable contractor engaged by Landlord shall be deemed to be a “Permitted Other Reason.”

1.7.7Expansion Rent.  The annual Base Rent (as defined in Item 4 of the Basic Lease Provisions), payable by Tenant for each Expansion Space leased by Tenant (the “Expansion Rent”) shall be equal to ninety-five percent (95%) of the FMRR (as defined in Section 2.4.3, below) as of the Target Delivery Date for such Expansion Space; provided, however, that in the case of an exercise of an Expansion Option by any Permitted Assignee (defined in Section 2.4.1, below) that is not a Qualified Tenant, the Expansion Rent shall be equal to one hundred percent (100%) of the FMRR as of the Target Delivery Date for such Expansion Space.  In addition to Base Rent, Tenant shall pay Additional Rent (defined in Section 3.2, below) for each Expansion Space as set forth in Article 4 of this Lease.

1.7.8Construction In Expansion Space.  Landlord shall deliver each Expansion Space to Tenant in accordance with the terms of Section 1.1.2 of the Work Letter.  The amount of any improvement allowance with respect to each Expansion Space leased by Tenant shall be determined as part of the FMRR for each such Expansion Space.

1.7.9Amendment to Lease.  If Tenant timely exercises its Expansion Option for a particular Expansion Space as set forth herein, then, reasonably promptly thereafter, Landlord and Tenant shall execute an

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amendment to this Lease adding such Expansion Space to the Premises upon the same terms and conditions as shall then apply to the Initial Premises, except as otherwise set forth in this Section 1.7.  All provisions of the Lease which vary based upon the rentable square footage and the usable square footage of the Premises shall be adjusted to reflect the addition of such Expansion Space to the Premises.  Subject to Section 1.3.4, the Rentable Area of any such Expansion Space shall be as specified in the applicable Expansion Designation Notice.  Tenant shall commence payment of the Expansion Rent to Landlord and the term of this Lease as to each Expansion Space shall commence upon that date (the “Expansion Space Commencement Date”) which is the earlier to occur of (i) the first date Tenant commences business occupancy of any portion of such Expansion Space, or (ii) the date that falls on the last day of the Expansion Space Construction Period (defined in this Section 1.7.9, below).  For purposes of this Lease, the “Expansion Space Construction Period” shall be the later to end of the period of: (a) one hundred twenty (120) days from the date on which Landlord actually delivers the Expansion Space to Tenant and (b) one hundred eighty (180) days from the date on which Landlord delivers to Tenant the Expansion Designation Notice with respect to such Expansion Space; provided, however, that in each case, the applicable Expansion Space Construction Period shall be extended on a day for day basis for each day of Force Majeure Delay or Landlord Delay (as defined in Section 5.1.3 of the Work Letter) incurred by Tenant in designing or achieving Substantial Completion (defined in Section 5.3 of the Work Letter) of the Expansion Space Improvements (as defined in Section 2.5 of the Work Letter) to be constructed by Tenant in such Expansion Space. *

1.7.10No Material Default; Termination of Expansion Rights.  The rights contained in this Section 1.7 shall be personal to Qualified Tenants and may only be exercised by a Qualified Tenant or a Permitted Assignee (and not by any other assignee, sublessee or other Transferee (as defined in Section 15.1, below), of Tenant’s interest in this Lease) on the condition (which condition may be waived by Landlord) that: (i) during the fifteen (15) month period preceding the date on which Tenant (or a Qualified Tenant or Permitted Assignee) delivers an Expansion Exercise Notice, Tenant (or the Qualified Tenant or Permitted Assignee) shall not have exercised any termination or space reduction right (including but not limited to, pursuant to Section 1.9, below) set forth in this Lease and (ii) as of the date on which Tenant (or a Qualified Tenant or Permitted Assignee) delivers an Expansion Exercise Notice, and as of the scheduled delivery date for the applicable Expansion Space, (a) there shall exist no uncured Event of Default by Tenant hereunder and (b) this Lease shall not have been otherwise terminated.

1.8Right of First Offer.

1.8.1First Offer Space.  Subject to Section 1.8.3.2 below, Tenant or a Qualified Tenant only (and not any other Transferee) shall have a continuing right of first offer

1.8.2Subordination to Superior Rights.  Notwithstanding the foregoing, all RFO Rights of Tenant set forth in this Section 1.8 shall be subordinate to (a) all expansion and/or renewal rights of any type which are set forth in all leases of space in the Project as of the Effective Date and (b) all expansion and/or renewal rights (which, for purposes of application of this clause (b) only, shall not include any rights of first offer) granted to any tenant leasing any space in the Project following the Effective Date (each such expansion and/or renewal right to which the RFO Rights of Tenant under this Section 1.8 shall be subordinate is referred to herein as a “Superior Right”); provided, however, that an extension of the term or expansion of the premises subject to a particular lease of another tenant shall be deemed both properly exercised and a “Superior Right” if: (i) there is an express grant of an expansion or renewal right (of any type) in the lease of such other tenant and due exercise thereof occurs, or (ii) an extension of the term or expansion of the premises of such other tenant is agreed to by Landlord and such other tenant in lieu of (or in substitution for) exercise of an express right to extent or expand (of any type) set forth in the lease of such other tenant in a binding document, prior to the date thirty (30) days following the deadline for exercise of the express right in question, without regard to whether (a) such Superior Right is exercised pursuant to an express written expansion or renewal provision in such existing lease, or (b) such extension or expansion is consummated pursuant to a lease amendment or a new lease.  The holders of such Superior Rights are referred to herein collectively, as the “Superior Right Holders.”  Tenant’s RFO Rights shall be on the terms and conditions set forth in this Section 1.8.  As of Effective Date, the Superior Rights and the Superior Right Holders with respect to the Potential First Offer Space are only as set forth in Exhibit “F” attached hereto.

1.8.3Procedure for Offer and Acceptance.

1.8.3.1Tenant’s Request For Notice of Availability.  At any time during the Term of this Lease, but not more frequently than (subject to Section 1.8.3.4) once during any six (6) month period.  Tenant may deliver to Landlord a written request (“Request for Notice of Availability”), which request shall: (i) expressly reference this Section 1.8 and Landlord’s requirement to respond in writing to such request within thirty (30) days of receipt as provided below; (ii) designate: (x) the number of floors of new office space requested by Tenant in full floor increments and/or (y) if Tenant desires less than a full floor, designate the amount (in approximate Rentable Area) so requested by Tenant (which in no case shall be less than fifty percent (50%) of the Rentable Area of a floor) (“Qualifying Partial Floor”) (“Tenant’s Area Request”); and (iii) request that Landlord identify all Potential First Offer Space that is Available for Lease (defined in this Section 1.8.3.1, below) in accordance with this Section 1.8.  Any Request for Notice of Availability delivered by Tenant that does not comply with each of conditions (i), (ii) and (iii) above shall, at the election of Landlord, exercised by notice given to Tenant by Landlord within ten (10) business days after Landlord’s receipt of Tenant’s Request for Notice of Availability, be rendered null, void and of no force or effect.  Potential First Offer Space shall be “Available for Lease” if, as of the date of Landlord’s Notice of Availability (defined in Section 1.8.3.2, below) (or Revised Notice of Availability (defined in Section 1.8.3.4, below)); (a) such space is either: (1) vacant (as a result of scheduled expiration or unscheduled termination of the lease previously encumbering such space or otherwise) and is not subject to any Superior Right which either: (A) requires that such Superior Right be satisfied prior to offering a lease of such space to Tenant (either specifically or to tenants or other third parties generally) or (B) contemplates occupancy of the space in question by the Superior Right Holder within twenty four (24) months of such date (an “Immediate Superior Right”) or (2) scheduled to become vacant within twelve (12) months of such date (as a result of the scheduled expiration of the term of the lease then currently

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encumbering such space) and is not subject to any Immediate Superior Right, and (b) such space is not then subject to Other Tenant Discussions (as defined in this Section 1.8.3.1). “Other Tenant Discussions” means ongoing discussions between Landlord and a prospective tenant, as evidenced by at least three (3) written communications (including at least one (1) communication from each party) delivered by one such party to the other (which must be in the form of a proposal, term sheet, lease draft, letter of intent, request for proposal or comparable document) (i.e., the sequence of delivery of a request for proposal by the prospective tenant, delivery of a proposal by the Landlord, and delivery of a proposal response or counterproposal by the prospective tenant would qualify as Other Tenant Discussions).

1.8.3.2Landlord’s Notice of Availability.  Within thirty (30) days of Landlord’s receipt from Tenant of a Request for Notice of Availability, Landlord shall, subject to the provisions of this Section 1.8.3.2, through delivery of a written notice delivered to Tenant (a “Notice of Availability”);

(i)Subject to paragraphs (ii) and (iii) below, offer to lease to Tenant all blocks of space (“Block of Space”) within the Potential First Offer Space that both (a) conform to Tenant’s Area Request (or are not more than two thousand (2,000) square feet of Rentable Area larger or smaller in size than Tenant’s Area Request specified in Tenant’s Request for Notice of Availability, but if smaller, are not less than one-half (1/2) of a floor and (b) are, as of the date of Landlord’s Notice of Availability, Available for Lease (each such offered Block of Space is referred to herein as “Offered Available Space,” and each Offered Available Space shall be only in any configuration in which Landlord is, at such time, in Landlord’s sole and absolute discretion, willing to lease such space; provided, however, that if Tenant requests any full floor of space in a Request for Notice of Availability and if Landlord has any full floor Available for Lease at such time, Landlord’s Notice of Availability must include one (1) full floor Block of Space as Offered Available Space);

(ii)Notwithstanding any provision of this Lease to the contrary, in the event that (a) Tenant’s Area Request is for less than a full floor, and (b) as of the date of Landlord’s Notice of Availability, Tenant shall be leasing less than all of the Rentable Area on any floor within the South Tower, (c) a portion of such floor shall remain unleased (“Remaining Space”) and (d) Tenant is the only tenant leasing space on such floor, Landlord may require (but shall not be obligated to require) Tenant to lease all of such Remaining Space prior to leasing any additional space pursuant to this Section 1.8;

(iii) If Landlord has more than one (1) Block of Space in the South Tower below the fortieth (40th) floor of the South Tower which is approximately the same size as (not more than two thousand (2,000) square feet of Rentable Area larger or smaller than) Tenant’s Area Request specified in Tenant’s Request for Notice of Availability, Landlord shall be entitled to offer just one of such Blocks of Space (selected by Landlord in its sole and absolute discretion) as the Offered Available Space to Tenant in its Notice of Availability (in satisfaction of its obligation to offer space under this Section 1.8.3.2); provided, however, if any such Blocks of Space are encumbered by Superior Rights (which are not Immediate Superior Rights) Landlord shall not offer to Tenant a Block of Space that is encumbered with more (or less favorable) Superior Rights than the other Block or Blocks of Space otherwise Available for Lease.

If Landlord’s Notice of Availability offers to Tenant any Offered Available Space (or Offered Available Spaces), subject to the provisions of this Section 1.8, such Notice of Availability shall also; (a) state the First Offer Rent (defined in Section 1.8.4, below), (b) state the lease term, (c) provide a general description of the other material terms upon which Landlord is willing to lease each such Offered Available Space to Tenant, (d) identify the estimated delivery date for each such Offered Available Space (each a “Scheduled Offered Available Space Delivery Date”), and (e) identify each such Superior Right that is then applicable to such space.

1.8.3.3Acceptance by Tenant.  Tenant shall have right, by delivering to Landlord a written notice (“Available Space Acceptance Notice”) within ten (10) business days after Landlord’s delivery of a Notice of Availability, to lease the Offered Available Space (or Offered Available Spaces) identified in such Notice of Availability on the terms contained in such notice (subject to the provisions of this Section 1.8) and subject to the Superior Rights applicable to each such space.  During such ten (10) business day period, Tenant shall have the right to reasonably inspect (at times and in a manner reasonably agreed between Landlord and Tenant) the Offered Available Spaces.  If, in any Available Space Acceptance Notice, Tenant notifies Landlord that it does not, at its option, accept the First Offer Rent set forth in the Notice of Availability, the parties shall follow the procedure, and the First Offer Rent shall be determined as set forth in Section 2.4.5 of this Lease.  In the event that Tenant does not deliver an Available Space Acceptance Notice to Landlord within such ten (10) business day period, Tenant shall be deemed to have waived its right to lease any of the Offered Available Spaces identified in the applicable Notice of Availability (provided, however, that any such Offered Available Space or Offer Available Spaces identified in any such Notice of Availability shall, at any time which is six (6) months after the expiration of such ten (10) day period, once again become Potential First Offer Space with respect to which Tenant may deliver a Request for Notice of Availability), and, subject to Section 1.8.3.4, below, Landlord shall be free to lease the spaces described in the Notice of Availability (and all other Potential First Offer Space) to anyone to whom Landlord desires on any terms Landlord desires, and any such tenant or occupant to whom Landlord leases such space shall be a Superior Right Holder, and any such lease, together with any renewal or expansion rights granted therein, shall be a Superior Right.  In the event that Tenant elects to lease any Offered Available Space that is a Qualifying Partial Floor, Landlord shall perform all required Demising Work with respect to such Offered Available Space, and Tenant shall, within thirty (30) days of receipt of Landlord’s request therefor, reimburse Landlord for Tenant’s pro-rata share of Landlord’s actual costs and expenses of performing such Demising Work (with Tenant’s pro rata share being equal to a fraction, the numerator of which is the Rentable Area within the applicable Offered Available Space and the denominator of which is the total Rentable Area of the floor on which such Offered Available Space is located).

1.8.3.4Revised Notice of Availability.  In the event that: (i) any Notice of Availability identifies only an Offered Available Space (or Offered Available Spaces) that is (or are) larger than (by more than two thousand (2,000) square feet of Rentable Area) the space that was requested by Tenant in its corresponding Request for Notice of Availability, (ii) Tenant does not lease any of such spaces pursuant to Section 1.8.3.3 and, (iii) within six (6) months following Landlord’s delivery of such Notice of Availability, Landlord

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determines that it will divide any Offered Available Space identified in such Notice of Availability into smaller blocks of space, Landlord shall, with respect to the first such break up of such space (and only the first such break up) deliver to Tenant a new notice (a “Revised Notice of Availability”) identifying the smaller blocks of space into which such Offered Available Space has been divided (and each such space shall be an Offered Available Space) and offering to lease such spaces to Tenant as Offered Available Space.  Subject to the provisions of this Section 1.8, any such Revised Notice of Availability shall also: (a) state the First Offer Rent, (b) state the lease term, (c) provide a general description of the other material terms upon which Landlord is willing to lease such Offered Available Spaces to Tenant, (d) identify the Scheduled Offered Available Space Delivery Date for each such Offered Available Space, and (e) provide all other information required for a Notice of Availability under Section 1.8.3.2).  Tenant shall have the right, by delivering to Landlord a written notice (“Revised Available Space Acceptance Notice”) within five (5) business days after Landlord’s delivery of a Revised Notice of Availability, to lease any Offered Available Space identified in the Revised Notice of Availability on the terms contained in such notice (subject to the provisions of this Section 1.8).  During such five (5) business day period, Tenant shall have the right to reasonably inspect (at times and in a manner reasonably agreed between Landlord and Tenant) each Offered Available Space that is being offered by such notice.  If, in any Revised Available Space Acceptance Notice, Tenant notifies Landlord that it does not, at its option, accept the First Offer Rent set forth in the Revised Notice of Availability, the parties shall follow the procedure, and the First Offer Rent shall be determined as, set forth in Section 2.4.5 of this Lease.  In the event that Tenant does not deliver a Revised Available Space Acceptance Notice to Landlord within such five (5) business day period, Tenant shall be deemed to have waived for six (6) months following the expiration of such five (5) business day period its right to lease any Offered Available Space identified in the applicable Revised Notice of Availability, and Landlord shall be free to lease the space described in the Revised Notice of Availability (and all other Potential First Offer Space) to anyone to whom Landlord desires on any terms Landlord desires, and any such tenant or occupant to whom Landlord leases such space shall be a Superior Right Holder, and any such lease, together with any renewal or expansion rights granted therein, shall be a Superior Right, and Tenant shall have no right to deliver any new Request for Notice of Availability for six (6) months following the expiration of such five (5) business day period

1.8.4First Offer Rent.  The base rent (the “First Offer Rent”) payable by Tenant for each Offered Available Space leased by Tenant pursuant to this Section 1.8 (“Leased RFO Space”) shall be

*

1.8.5Term.  The term of any lease with respect to any Leased RFO Space leased by Tenant pursuant to this Section 1.8 shall commence on the Available Space Commencement Date (defined in Section 1.8.7, below) with respect to such Leased RFO Space and shall expire on the earlier of: (a) the Expiration Date or (b) the date that Landlord reasonably determines it needs to require possession of such space be returned by Tenant to Landlord in order to deliver such Leased RFO Space to a Superior Right Holder (assuming such Superior Right Holder duly exercises its Superior Right and Tenant was correctly advised of such Superior Right at the time Tenant exercised its RFO Rights with respect to such Leased RFO Space); provided, however, that if the Scheduled Available Space Commencement Date (defined in Section 1.8.7, below) is less than sixty (60) months before the Expiration Date, Landlord may, at Landlord’s option, require that any lease by Tenant of such Offered Available Space be for a term of sixty (60) months, in which case, the term of the lease with respect to such Leased RFO Space shall expire on the date that is sixty (60) months after the Available Space Commencement Date with respect to such space.

1.8.6Construction in Leased RFO Space.  Tenant shall lease each Leased RFO Space in its “As Is,” “with all faults” condition, and the construction of improvements in the Leased RFO Space shall comply with the terms of Article 10 of this Lease.  The condition of any Leased RFO Space as of the delivery of such space to Tenant shall be a consideration in the determination of the FMRR for such space.  In the event that Landlord fails to deliver to Tenant possession of a particular portion of any Leased RFO Space within six (6) months after the Scheduled Offered Available Space Delivery Date for such Leased RFO Space (as identified in the Notice of Availability applicable to such space), Tenant shall have the option, by delivering written notice to Landlord within ten (10) business days after the end of such six (6) month period, to terminate Tenant’s lease of such particular Leased RFO Space.  If Tenant does not elect to terminate its lease of such Leased RFO Space during such ten (10) business day period, and Landlord fails to deliver the applicable Leased RFO Space during the calendar month following the end of such ten (10) business day period, then until such time as Landlord does deliver the applicable Leased RFO Space, Tenant shall continue to have the option, by delivering written notice to Landlord within ten (10) business days after the end of such first calendar month and of each successive calendar month thereafter, to terminate Tenant’s election (pursuant to this Section 1.8) to lease such particular Leased RFO Space.  Provided that Landlord uses commercially reasonable efforts to deliver any Leased RFO Space to Tenant in a timely manner, Landlord shall not be liable to Tenant for any loss or damage resulting from Landlord’s failure to deliver possession of such Leased RFO Space on any particular date; provided, however, that for purposes of this Section 1.8.6. “commercially reasonable efforts” shall include the commencement and diligent prosecution of unlawful detainer proceedings against any holdover tenants of such Leased RFO Space if any such holdover continues for more than sixty (60) days after the date on which any such tenants’ rights to occupy (pursuant to a lease or otherwise) any such Leased RFO Space expire; provided, further, however.  Landlord’s obligation to so commence and pursue unlawful detainer litigation shall be subject to compliance with the Provisions, if any, of the lease or leases of any such holdover tenants which restrict or otherwise limit Landlord’s rights to pursue unlawful detainer litigation against such holdover tenants (and the parties hereto agree that Landlord shall be deemed not to have used commercially reasonable efforts to deliver any Leased RFO Space in a timely manner if Landlord shall fail to deliver such Expansion Space because Landlord has leased such Leased RFO Space to another person at any time after Tenant delivers the applicable Request for Notice of Availability (other than any prior lease where the prior tenant is a holdover tenant on the Scheduled Offered Available Space Delivery Date).

1.87Amendment to Lease.  If Tenant timely exercise Tenant’s RFO Rights with respect to any particular Leased RFO Spaces as set forth herein, Landlord and Tenant shall reasonably promptly thereafter execute an amendment to this Lease for such Leased RFO Space upon the terms and conditions as set forth in the First Offer Notice, subject to the provisions of this Section 1.8.  Tenant shall commence payment of Rent for the Leased RFO Space in question, and the term of the lease of such Leased RFO Space shall commence upon the date (the “Available Space Commencement Date”) which is the earlier to occur of : (i) the first date on which Tenant commences business

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occupancy of any portion of such Leased RFO Space, or (ii) the date that falls on the last day of the Available Space Construction Period (defined in this Section 1.8.7, below).  For purposes of this Lease, “Available Space Construction Period” shall be the later to end of the period of: (a) one hundred eighty (180) days from the date of Tenant’s receipt of Landlord’s Notice of Availability or (b) one hundred twenty (120) days from the date on which Landlord delivers possession of the Leased RFO Space to Tenant (and the scheduled Available Space Commencement Date (“Scheduled Available Space Commencement Date”) with respect to any such space shall be one hundred twenty (120) days after the Scheduled Offered Available Space Delivery Date with respect to such space set forth in the applicable Notice of Availability); provided, however, that in each case the applicable Available Space Construction Period shall be extended on a day for day basis for each day of Force Majeure Delay or Landlord Delay incurred by Tenant in designing or achieving Substantial Completion of the Improvements (defined in Section 11.2.2, below) to be constructed by Tenant in any Leased RFO Space).  The Available Space Construction Period shall be a consideration in determining the FMRR of such Leased RFO Space incurred by Tenant in designing or achieving Substantial Completion of the tenant improvements to be constructed by Tenant in such Leased RFO Space.

1.8.8Termination of Right of First Offer.  The rights contained in this Section 1.8 shall be personal to Original Tenant and any Qualified Tenants and may only be exercised by Original Tenant or a Qualified Tenant (and not any other assignee, sublessee or other Transferee of Tenant’s interest in this Lease) on the condition (which condition may be waived by Landlord) that: (i) during the fifteen (15) month period preceding the date on which Tenant (or any Qualified Tenant) delivers a Request for Notice of Availability, Tenant (or any Qualified Tenant) shall not have exercised any termination or space reduction right (including but not limited to, pursuant to Section 1.9 below), (ii) unless Tenant shall have exercised an Extension Option (defined in Section 2.4.1, below) on or before the date on which Tenant (or any Qualified Tenant) delivers a Request for Notice of Availability, the Scheduled Available Space Commencement Date shall not occur on a date that is less than twenty-four (24) months before the Expiration Date and (iii) as of the date on which Tenant (or any Qualified Tenant) delivers a Request for Notice of Availability, and as of the Scheduled Offered Available Space Delivery Date for the applicable Leased RFO Space, (a) this Lease shall not have been terminated and (b) there shall exist no uncured Event of Default by Tenant.

1.9Options to Reduce South Tower Space.

1.9.1Subject to the provision of the Section 1.9, Tenant or any Qualified Tenant only (and not any other assignee, sublessee or other Transferee of Tenant’s interest in this Lease) shall have two (2) separate options (each a “Reduction Option”) to reduce the area of the Premises by deleting from the Premises one full floor of space in the South Tower (i.e., one South Tower full floor per each Reduction Option), as of: (i) in the case of the first Reduction Option (the “First Reduction Option”), the first day of the sixty-first (61st) calendar month of the Lease Term following the Third Increment Commencement Date (“First Reduction Date”), and (ii) in the case of the second Reduction Option (the “Second Reduction Option”), the first day of the ninety-seventh (97th) calendar month of the Lease Term following the Third Increment Commencement Date (the “Second Reduction Date”); provided, however, that the exercise and effectiveness of each such Reduction Option shall be subject to full compliance with the following terms and conditions, each of which shall be a condition precedent to Tenant’s right to exercise a Reduction Option:

(i)Notice.  Not less than nine (9) and not more than twelve (12) months prior to the First Reduction Date or the Second Reduction Date, as the case may be, Tenant shall deliver to Landlord written notice (a “Reduction Notice”) specifically referencing this Section 1.9 and stating that Tenant is exercising the First Reduction Option or the Second Reduction Option, as the case may be, and specifically identifying the floor within the South Tower which Tenant is deleting from the Premises (the “Reduction Space”) pursuant to its exercise of such Reduction Option.

(ii)Requirement for Contiguity of Remaining Space in Premises.  Following deletion of any Reduction Space from the Premises pursuant to this Section 1.9, the remainder of the Premises situated in the South Tower (the “Remainder Space”) must be comprised entirely of contiguous floors within the South Tower (the “Contiguity Condition”); provided, however, that: (a) any such Remainder Space shall be deemed to comply with the Contiguity Condition notwithstanding the presence between any floors included within the Remainder Space of any floors in the South Tower containing mechanical equipment and (b) if Tenant leases hereunder any South Tower Premises (“Subsequent Premises”) in addition to those portions of the Premises identified in Items 2.1(i), (ii), (iii), (iv) and (v) of the Basic Lease Provisions (collectively, “Initial Premises”), Tenant may select the Reduction Space from: (1) a portion of the Subsequent Premises, in which case Tenant shall not be required to comply with the Contiguity Condition or (2) the Initial Premises, in which case, the Subsequent Premises may, at Tenant’s option, be disregarded for purposes of determining compliance with the Contiguity Condition.  Any attempt by Tenant to exercise a Reduction Option by delivering a Reduction Notice identifying any Reduction Space that creates a Remainder Space that does not comply with the requirements of this Section 1.9.1 (ii) shall, at the election of Landlord, exercised by notice given to Tenant by Landlord within five (5) business days after Landlord’s receipt of any Reduction Notice, be null and void and of no force or effect; provided, however, in such case, Tenant shall be permitted an additional five (5) day period to cure any such noncompliance.

(iii)Reduction Fee.  In the case where Tenant shall exercise a particular Reduction Option, Tenant shall pay to Landlord prior to the applicable Reduction Date in question (First Reduction Date, or Second Reduction Date, as the case may be), an amount (the “Reduction Fee”) equal to the unamortized portion (as of the First Reduction Date or the Second Reduction Date, as applicable) of the sum of: (a) the Tenant Improvement Allowance (as defined in Section 2.1 of the Work Letter) allocable to the Reduction Space in question and (b) all amounts paid as commissions to the Brokers (both Tenant’s Broker and Landlord’s Broker) (as defined in Item 8 of the Basic Lease Provisions) allocable to the Reduction Space in question, For purposes of this Section 1.9.1, amortization of such amounts shall be determined (based upon the actual Base Rent previously paid by Tenant) utilizing an interest rate of nine percent (9%) per annum and a typical “mortgage rate” amortization of such amounts over the Initial Term of the Lease utilizing equal monthly payments of interest and principal.

(iv)No Default.  There shall be, as of the date on which Tenant delivers a Reduction Notice and as of the date of the First Reduction Date or the Second Reduction Date, as the case may be, no uncured Event of Default by Tenant under this Lease.

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1.9.2Effect of Exercise of Space Reduction Option.  Upon delivery by Tenant of a Reduction Notice:

(i)As of the First Reduction Date or the Second Reduction Date, as the case may be, and with respect to the Reduction Space identified in such Reduction Notice (but only with respect to such Reduction Space): (a) all of Tenant’s rights to Lease such Reduction Space pursuant to this Lease (including, without limitation, pursuant to Section 2.4 below) shall be cancelled and terminated, (b) the terms of this Lease shall be of no further force or effect, and (c) cash of Landlord and Tenant shall be relieved of the respective obligations under this Lease, except for those obligations set forth in this Lease which specifically survive the expiration or earlier termination of this Lease, including, without limitation, the payment by Tenant of all amounts owed by Tenant (including Additional Rent) under this Lease, and the return to Tenant of any overpayments of Additional Rent pursuant to Article 4, up to and including the First Reduction Date or the Second Reduction Date, as the case may be; provided, however, that notwithstanding any provision of this Lease to the contrary, for purposes of determining the reduction of Base Rent (payable by Tenant under this Lease) which shall be effected through exercise of any Reduction Option, such reduction shall equal, for each month during the remainder of the Term, an amount equal to the product of (A) the Rentable Area of the Reduction Space in question, multiplied by (B) the First Increment Base Rental Rate, as specified in the fourth (4th) column of Item 4.1 of the Basic Lease Provisions.

(ii)Tenant shall be deemed to have waived all of its rights to expand the Premises, including without limitation, its right to expand the Premises pursuant to Section 1.7 and/or Section 1.8 above for the period beginning on the date on which Tenant delivers any Reduction Notice and ending on the date that is fifteen (15) months following the First Reduction Date or the Second Reduction Date, as the case may be, and during any such period, (a) Tenant shall have no right to expand the Premises pursuant to this Lease and (b) all such expansion rights, including but not limited to, pursuant to Section 1.7 and/or Section 1.8 above, shall be null, void and of no force or effect.

1.10Tenant’s Right to Operate Automatic Teller Machines at Project.

1.10.1Grant of Tenant’s ATM Right.  Subject to the provisions of this Section 1.10, on the condition that, and for so long as Original Tenant (or a Successor of Original Tenant) shall continue to satisfy the Plaza Building Operating Requirement (as defined in Section 28.5.4(ii) below), and subject to Section 1.10.4, below, (a) Tenant shall have the right (“Tenant’s ATM Right”), to install, operate and maintain: (i) two (2) Automatic Teller Machines (“ATMs”) on the exterior of the east wall of the Plaza Building in the location indicated on Exhibit “G” attached hereto (“Tenant’s Plaza Building ATM Location”) and (ii) two (2) ATMs on the B-Level in the location indicated on Exhibit “H” attached hereto (“Tenant’s B-Level ATM Location”) and (b) such rights to locate ATMs shall be the only rights granted by Landlord to operate an ATM on the B-Level or in the Plaza Building, subject to any rights to do so on the Plaza Building or on the B-Level under any leases of space affecting the Project in effect as of the Effective Date; provided, however, that Landlord shall be permitted from time to time to permit retail, restaurant or other tenants located on the B-Level to operate ATMs within their respective premises (so long as such ATMs are not accessible by the public without entry into such tenant premises).

1.10.2Installation.  Tenant agrees to install (in operating condition), and to commence operation of, its two (2) ATMs on the B-Level and its two (2) ATMs on the Plaza Building prior to or on the date of its commencement of business operations in the Plaza Building Space.  *

installing maintaining, operating, repainting, replacing and removing each such ATM subject to the ATM Rights, including, without limitation, all taxes or assessments in any manner related to the existence, installation, income and/or operation of such ATMs and the cost of all utility services used in connection with the operation of the same.  The size, design, configuration and aesthetics of each such ATM shall be subject to the reasonable prior written consent of Landlord, which consent shall not be withheld, or conditioned if: (i) Tenant satisfies all of the requirements of Article 10 applicable to Consent Alterations (defined in Section 10.2, below) and (ii) the ATM in question conforms to Tenant’s then current design criteria for ATMs and is otherwise consistent with institutional custom and practice in the retail banking industry.  Once Tenant installs a particular ATM, Tenant shall continuously maintain such ATM, consistent with best practices in the retail banking industry and otherwise in clean and neat conditions.  Notwithstanding any provision of this Lease to the contrary, (a) upon termination of Tenant’s rights hereunder to operate a particular ATM at a particular location (and receipt by Tenant of Landlord’s request to remove such ATM), or in any event prior to the expiration or sooner termination of this Lease), Tenant shall, at its sole cost and expense, remove the ATM in question and restore the area of the Project affected by the ATM (and its removal) to a reasonable condition, and (b) Tenant shall comply, at Tenant’s sole cost and expense, with all Laws applicable to the installation, alteration or operation of any ATM installed by Tenant anywhere in the Project.

1.10.4Termination of Tenant’s ATM Right.  Subject to the provisions of Section 1.10.5, in the event that, at any time during the Term, Tenant ceases to satisfy the Plaza Building Operating Requirement, Tenant’s ATM Right pursuant to Section 1.10.1 and all of Tenant’s rights pursuant to Section 19.3, below shall be deemed to automatically terminate and to be of no further force or effect, and Landlord shall have the right to grant to any other tenant or occupant of the Project (or any other third party) the right to install, operate and maintain one or more ATMs in any location in the Project, including, but not limited to, in Tenant’s Plaza Building ATM Location and/or Tenant’s B-Level ATM Location.  Additionally, in the event that, at any time during the Term, Tenant ceases to operate any of its ATMs located at either: (a) Tenant’s Plaza Building ATM Location or (b) Tenant’s B-Level ATM Location, Landlord may, upon five (5) days written notice to Tenant, terminate Tenant’s ATM Right under Section 1.10.1 with respect to such ATM (or ATMs, if both ATMs at such location are not so operated) at such location and grant to any other tenant or occupant of the Project (or to any other third party), the right to install, operate and maintain an ATM at such location (or two ATMs at such location, if Tenant has ceased to operate both ATMs at such location).

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1.10.5Special Exceptions.  Notwithstanding any provision of Section 1.10.4 to the contrary, on the condition that and so long as Tenant continues to satisfy the South Tower Occupancy Requirement (as defined in Section 28.5.4, below), Tenant shall have the right (“Tenant’s Additional ATM Right”), but not the obligation, to install, operate and maintain one (1) ATM in that portion of the A-Level below the South Tower (the “A-Level ATM Area”) shown on Exhibit “JJ” attached hereto (and in a specific location mutually and reasonably agreed to by Landlord and Tenant).  Subject to Section 1.10.5, so long as Tenant continues to satisfy the South Tower Occupancy Requirement, such rights to locate an ATM in the A-Level ATM Area shall be the only rights granted by Landlord in such A-Level ATM Area.  In the event that at any time during the Term: (a) Tenant ceases to satisfy the South Tower Occupancy Requirement, Tenant’s Additional ATM Right pursuant to this Section 1.10.5 (and all other rights under this Section 1.10.5) shall be deemed to automatically terminate and to be of no further force or effect, Landlord shall have the right to require Tenant, at Tenant’s sole cost and expense, to immediately remove all ATMs installed pursuant to this Section 1.10 (and restore all areas of the Project affected by such installation and/or removal to their condition existing immediately before the installation of the ATMs in question, and Landlord shall have the right to grant to any third party the right to install, operate and maintain ATMs in such location (or anywhere on A-Level) and (b) if Tenant subleases the Plaza Building Space to an independent third party bank (and if Landlord shall not exercise its Section 15.2.4 Recapture Right (defined in Section 15.2.4, below), notwithstanding anything herein to the contrary, such bank subtenant of Tenant shall be permitted to install, maintain and operate (or continue to install, maintain and operate a maximum of two (2) ATMs located in the wall of the Plaza Building at the location shown on Exhibit “G” attached hereto (or another location in or on the Plaza Building proximate to the Plaza Building Space).  In the event that Landlord grants any other tenant of the Project or any third party any right to install and operate an ATM or ATMs in that portion of the ground floor lobby of the North Tower shown on Exhibit “KK” attached hereto, Tenant shall have a right to install an ATM or ATMs in the corresponding portion of the ground floor lobby of the South Tower shown on Exhibit “LL” attached hereto on the same terms and conditions as granted to such other tenant or person with respect to installation and operation of an ATM or ATMs in the ground floor lobby of the North Tower.

1.10.6Bank of America Rights.  Notwithstanding any provision of this Lease to the contrary, each and all of Tenant’s rights under this Section 1.10 shall be subordinate to the rights of Bank of America, NTSA (“BofA”) under that certain lease between Landlord’s predecessor-in-interest, and BofA, as described in Exhibit “Y”, attached hereto (the “BofA Lease”), until BofA’s occupancy in the Project under such lease shall terminate (and such lease shall terminate), and until such time, none of Tenant’s rights under this Section 1.10 shall be effective; provided, however, that Landlord agrees that Landlord will not amend the BofA Lease in any manner, or otherwise agree to an extension of the BofA Lease, which will extend any right of BofA with respect to the Project in any manner that will further delay the commencement of Tenant’s rights under this Section 1.10.  The BofA Lease is scheduled, by its terms, to expire on September 15, 2004.

ARTICLE 2 - TERM

2.1Term.

2.1.1Initial Term; Term.  Unless earlier terminated in accordance with the provisions hereof, the Initial Term of this Lease shall be the period shown in Item 3.1 of the Basic Lease Provisions.  As used herein, “Term” shall refer to the Initial Term and any Extension Term(s) (as defined in Section 2.4, below) duly exercised by Tenant.

2.1.2Lease Year.  For purpose of this Lease, the term “Lease Year” shall mean each consecutive twelve (12) month period during the Lease Term; provided, however, that the first Lease Year shall commence on the First Increment Commencement Date and shall end on the last day of the twelfth (12th) month thereafter, and the second Lease Year (and each succeeding Lease Year thereafter) shall commence on the first day of the next calendar month.

2.2Commencement.

The Term shall commence on the First Increment Commencement Date as defined in Item 3.4 of the Basic Lease Provisions; provided, however, that in the event the Term with respect to any Increment of Space shall commence on a day other than (following the Commencement Date for each Increment of Space) the first day of any calendar month, for purposes of calculating all scheduled increases in Base Rent during the Term with respect to such Increment of Space, the First Increment Commencement Date, the Second Increment Commencement Date, the Plaza Building Commencement Date, the Third Increment Commencement Date or the Fourth Increment Commencement Date, as applicable, shall be deemed to occur on the first day of the calendar month following such Commencement Date for such Increment of Space.  This Lease shall be a binding contractual obligation effective upon execution hereof by Landlord and Tenant notwithstanding the later commencement of the Term of this Lease.  At any time during the Lease Term, Landlord may deliver to Tenant a notice in the form as set in Exhibit “B” attached hereto, as a confirmation only of the information set forth therein, which Tenant shall execute and return to Landlord within fifteen (15) days of receipt thereof; provided that if such notice is not factually correct, then Tenant shall make such changes as are necessary to make such notice factually correct and shall thereafter return such notice to Landlord with said fifteen (15) day period.

2.3Delay in Delivery.

2.3.1Generally.  Landlord shall use commercially reasonable efforts to deliver possession of each floor within each Increment of Space to Tenant in the Delivery Condition required by the Work Letter for such Increment of Space during the Delivery Window for such Increment of Space as specified in Item 3.3 of the Basic Lease Provisions; provided, however, that in the event such delivery of possession of any floor within any Increment of Space is delayed for any reason, this Lease shall not be void or voidable (or terminable by Tenant) in whole, in part or with respect to any part or portion of the Increment of Space or the Premises, the Term of this Lease shall not be extended, and subject to the provisions of Sections 2.3.2 through 2.3.6 inclusive, Landlord shall not be liable to Tenant for any loss or damage resulting from such delay or from the failure of the delivery of possession of such Increment of Space to occur on any particular date; provided, however, that for purposes of this Section 2.3, “commercially

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reasonable efforts” shall include: (i) appointment of a specific member of Landlord’s construction management staff to specifically monitor and supervise all efforts of Landlord in: (A) coordinating with existing tenants who currently occupy any portion of any Increment of Space in question in order to facilitate the timely vacation of such occupied space by such tenants on a timely basis, (B) performing all Base Building Work, as that term is defined in the Work Letter so as to facilitate a timely completion of such work, and (C) coordinating with Tenant to facilitate Tenant’s commencement of construction of tenant improvements in each such Increment of Space and (ii) the commencement and diligent prosecution of unlawful detainer proceedings against any holdover tenant or tenants holding over in any such Increment of Space if any such holdover continues for more than sixty (60) days after the commencement of a particular Delivery Window; provided, however, that Landlord’s obligation to so commence and pursue unlawful detainer litigation shall be subject to compliance with the provisions, if any, of the lease or leases of any such holdover tenants which restrict or otherwise limit Landlord’s rights to pursue unlawful detainer litigation against such holdover tenants.

2.3.2First Increment Office Space.  Notwithstanding anything to the contrary set forth in Section 2.3.1, above, in the event that Landlord shall fail to deliver possession of any floor of space within the First Increment Office Space on or prior to the First Increment Delivery Penalty Date, which First Increment Delivery Penalty Date shall be extended on a day for day basis for each day or partial day of Force Majeure Delay and/or Tenant Delay incurred by Landlord in obtaining possession such floor or completing the Minimum Base Building Work (or otherwise achieving Delivery Condition) with respect thereto.  *

2.3.3Second Increment Office Space.  Notwithstanding anything to the contrary set forth in Section 2.3.1, above, in the event that Landlord shall fail to deliver possession of any floor of space within the Second Increment Office Space on or prior to the Second Increment Delivery Penalty Date, which Second Increment Delivery Penalty Date shall be extended on a day for day basis for each day or partial day of Force Majeure Delay and/or Tenant Delay incurred by Landlord in obtaining possession of such floor or completing the Minimum Base Building Work (or otherwise achieving Delivery Condition) with respect thereto.  *

2.3.4Plaza Building Space.  Notwithstanding anything to the contrary set forth in Section 2.3.1, above, in the event that Landlord shall fail to deliver possession of the Plaza Building Space on or prior to the Plaza Building Delivery Penalty Date, which Plaza Building Delivery Penalty Date shall be extended on a day for day basis for each day or partial day of Force Majeure Delay and/or Tenant Delay incurred by Landlord in obtaining possession of the Plaza Building Space or in completing the Minimum Base Building Work (or otherwise achieving Delivery Condition) with respect thereto, *

2.3.5Third Increment Office Space.  Notwithstanding anything to the contrary set forth in Section 2.3.1, above, in the event that Landlord shall fail to deliver possession of any floor of space within the Third Increment Office Space on or prior to the Third Increment Delivery Penalty Date, which Third Increment Delivery Penalty Date shall be extended on a day for day basis for each day or partial day of Force Majeure Delay and/or Tenant Delay incurred by Landlord in obtaining possession of such floor or completing the Minimum Base Building Work (or otherwise achieving Delivery Condition) with respect thereto, *

2.3.6Fourth Increment Office Space.  Notwithstanding anything to the contrary set forth in Section 2.3.1, above, in the event that Landlord shall fail to deliver possession of any floor of space within the Fourth Increment Office Space on or prior to the Fourth Increment Delivery Penalty Date, which Fourth Increment Delivery Penalty Date shall be extended on a day for day basis for each day or partial day of Force Majeure Delay and/or Tenant Delay incurred by Landlord in obtaining possession of such floor or completing the Minimum Base Building Work (or otherwise achieving Delivery Condition) with respect thereto, *

2.4Options to Extend.

2.4.1Grant of Options.  Subject to the provisions of this Section 2.4, Landlord hereby grants to Tenant, for exercise only by the Original Tenant or a Permitted Assignee (defined in this Section 2.4.1, below), four (4) options to extend the Term (each an “Extension Option”) for a period of sixty (60) months in each case (each, an “Extension Term”) with respect to the Premises subject to this Lease immediately prior to such Extension Term.Each such Extension Option shall be exercisable by written notice (a “Renewal Notice”) delivered by Tenant to Landlord as provided in Section 2.4.4, provided that, as of the date of delivery of such Renewal Notice, there is not then outstanding a Material Default (defined in this Section 2.4.1. below) by Tenant, which remains uncured.Subject

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to the provisions of this Lease, upon the exercise of an Extension Option, the Term, as it applies to the Premises being extended pursuant to such exercise (“Extension Premises”), shall be extended for a period of sixty (60) months.The rights contained in this Section 2.4 shall be personal to the Original Tenant and any Permitted Assignee, and may not be exercised by any other assignee, sublessee or transferee of Tenant’s interest in this Lease and then only if Original Tenant or such Permitted Assignee then Occupies (defined in this Section 2.4.1, below) at least four (4) full floors of the South Tower.Any attempted exercise of any Extension Option under any other circumstances shall, at the election of Landlord, exercised by notice to Tenant given within ten (10) business days after Landlord’s receipt of a Renewal Notice, be null and void and of no force or effect.In connection with Tenant’s exercise of each Extension Option, Tenant shall have the right (the “Partial Renewal Right”), at Tenant’s sole option, to reduce the size of the Premises, by deleting from the Premises then subject to this Lease, all of and/or a portion of the South Tower Premises and/or all of the Plaza Building Space for such Extension Term (and for all subsequent Extension Terms), in accordance with the terms of (and to the extent permitted by) Section 2.4.4.2 below.As used in this Section 2.4, a “Material Default” shall mean any Event of Default under Sections 16.1.1 or 16.1.2 of this Lease or any material Event of Default under Section 16.1.3 of this Lease.For Purposes of this Lease, a “Permitted Assignee” shall mean any assignee of all of Tenant’s interest in the Lease which is either properly approved by Landlord in accordance herewith, or is otherwise the subject of an assignment which is permitted without the approval of Landlord in accordance with, the terms of Section 15.8, below.For purposes of this Lease, “Occupy,” “Occupies,” and “Occupying” shall mean, as to each part or portion of the Premises, that as of a particular date: (i) Tenant shall have leased such portion of the Premises, (ii) Tenant shall not have assigned this Lease or any part thereof to anyone other than a Successor or Affiliate of Tenant and (iii) Tenant shall not then be subleasing such portion of the Premises (so that, for example, in the case of the South Tower Occupancy Requirement set forth in Section 28.5.4(i), below. *

2.4.2Extension Term Annual Base Rent.

2.4.2.1South Tower Premises.  The annual base rent payable for the South Tower Extension Premises (defined in this Section 2.4.2.1, below) during any Extension Term (the “South Tower Extension Term Annual Base Rent”) shall be equal to: (i) in the case of an exercise of an Extension Option by Tenant or any Qualified Tenant, the Rentable Area of the South Tower Expansion Premises, multiplied by * * or the South Tower Extension Premises as of the first day of the applicable Extension term (each an “Adjustment Date”), as determined in accordance with this Section 2.4 or (ii) in the case of an exercise of an Extension Option by any Permitted Assignee that is not a Qualified Tenant, the Rentable Area of the South Tower Extension Premises then subject to this Lease, multiplied by * (for the South Tower Extension Premises as of the applicable Adjustment Date. The “South Tower Extension Premises” shall mean, with respect to any particular Extension Option, that portion of the South Tower Premises (as the same exists on the date of exercise of such Extension Option) as to which such Extension Option is exercised by Tenant.

2.4.2.2Plaza Building Space.  The annual base rent payable for the Plaza Building Space during any Extension Term (the “Plaza Extension Term Annual Base Rent”) shall be equal to: (a) in the case of exercise of any Extension Option by Tenant or any Qualified Tenant, the Rentable Area of the Plaza Building Space multiplied by * for the Plaza Building Space as of the applicable Adjustment Date, as determined in accordance with this Section 2.4, or (b) in the case of the exercise of an Extension Option by a Permitted Assignee that is not a Qualified Tenant, the Rentable Area of the Plaza Building Space, multiplied by * for the Plaza Building Space as of the applicable Adjustment Date, as determined in accordance with this Section 2.4.

2.4.3Definition of FMRR.

(a)The “FMRR” of the South Tower Extension Premises for a particular Extension Term (or with respect to any Expansion Space or Leased RFO Space) shall be equal to the annual base rental rate per square foot of Rentable Area at which willing sophisticated tenants and willing sophisticated landlords are leasing, as of a particular time in arms-length transactions, non-sublease, non-encumbered, non-equity, non-expansion (unless pursuant to a comparable definition of FMRR), non-renewal space (unless pursuant to a comparable definition of FMRR) comparable in size (or, with respect to the determination of the South Tower Extension Term Annual Base Rent only, transactions of between 100,000 and 300,000 rentable square feet of space), location, floor height and quality to the South Tower Extension Premises, Expansion Space or Leased RFO Space (or other premises) in question, as the case may be, with a commencement date not more than fourteen (14) months prior to the Commencement Date, as applicable (the “Comparable Transactions”) in the Project or, if there are not sufficient Comparable Transactions in the Project, in the Comparable Buildings (as defined in this Section 2.4.3, below), with appropriate adjustments to account for differences in the Adjustment Factors (defined in this Section 2.4.3, below) and all other factors reasonably relevant to a fair market rent determination.In any determination of FMRR, appropriate consideration should be given to any reasonably relevant factor (or difference in the subject transaction or Comparable Transactions used for purposes of comparison), including, without limitation, the following factors (the “Adjustment Factors”): (a) monthly base rental rates per rentable square foot, (b) abatement provisions reflecting free rent during the lease term (but in connection with determining the Extension Term Annual Base Rent (defined in Section 2.4.5, below) only, not including construction time preceding the commencement of business by tenants in the Comparable Transactions); (c) the size, location and floor height of the premises being leased; (d) the condition and market value of the existing tenant improvements, if any, (and accompanying base building condition) from a general market perspective to a business office user (and without regard to their value, usability or function to Tenant (or to any tenant in any Comparable Transaction)) (and without regard to the fact that Tenant is occupying the Premises), and the existence and amount of any tenant improvement or comparable allowance; (e) the existence and amount of any other cash payment or other equivalent concession including, without limitation, moving allowances, lease takeover allowances (or where a lease assumption is applicable the value thereof) and any comparable tenant inducement; (f) the existence of favorable expansion and/or extension options, and the value thereof; (g) any special parking rights, rates or concessions; (h) whether the lease transaction in question grants to the tenant any protection from increases in

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any component or all of real property taxes, and operating expenses (or alternatively the exposure to increases in the same), and if so, the amount, value or cost associated therewith; and (i) in connection with determination of the South Tower Extension Term Annual Base Rent only, the existence, extent and value of, to the extent still retained by Tenant, (1) exterior signage and Building and/or Project identity rights and (2) any exclusive use provisions or other protections granted vis-à-vis the competitors of the tenant in question.Notwithstanding any contrary provision hereof, in determining the FMRR for the South Tower Extension Premises, no consideration shall be given to whether Landlord or other landlords are or are not paying tenant broker brokerage commissions in any transaction hereunder or in the Comparable Transactions.If it is determined that in the Comparable Transactions used to determine FMRR, free rent or cash allowances has been granted (collectively, “Rent Concessions”), Landlord may elect either to: (A) grant some or all of such concessions in cash (“Election A”), (B) to adjust the installments of monthly Base Rent during the term of the transaction hereunder in question to be an effective rental rate which takes into consideration and reduces monthly rent by the amortized amount of the total dollar value of such Rent Concessions, amortized (with an interest factor, equal to the Interest Rate plus one percent (1%) over such term (in which case the Rent Concessions so amortized shall not be granted to Tenant) (“Election B”), or (C) provide such concessions or the equivalent thereof via combination of Election A and Election B (“Election C”).During each Extension Term, Tenant shall pay Additional Rent in accordance with the terms of Article 4, below. “Comparable Buildings” shall mean all comparable, high-rise office projects containing 650,000 or more square feet of Rentable Area located in that portion of the downtown Los Angeles Central Business District depicted on Exhibit “MM” attached hereto, as determined by the Arbitrator (as defined in Section 14.2, below) as of the date of a particular FMRR determination to be reasonably comparable to the Project in terms of attractiveness and functional utility to a sophisticated tenant of a size (in terms of Rentable Area) comparable to that of Tenant.

2.4.3.2The “FMRR” of the Plaza Building Space for a particular Extension Term shall be equal to the annual base rental rate per square foot of Rentable Area at which willing sophisticated tenants and willing sophisticated landlords are leasing, as of a particular time, in arm’s-length transactions, non-sublease, non-encumbered, non-equity, non-expansion, non-renewal (unless pursuant to a comparable definition of FMRR), non-restaurant ground floor retail space comparable in size and quality to the Plaza Building Space in the Project, or if there are not sufficient comparable transactions, in the Comparable Buildings, with appropriate adjustments to account for differences in the Adjustment Factors and all other factors reasonably relevant to a fair market rent determination, as applied to the Plaza Building Space.The provisions of this Section 2.4.3 concerning: (i) application of the Adjustment Factors (with appropriate adjustments for the difference in types of space and difference in signage and identity rights attaching to the South Tower Premises, as opposed to the Plaza Building Space), (ii) the lack of consideration of the presence or absence of brokerage commissions, and (iii) the adjustments and Landlord elections as to Rent Concessions shall also be applicable to a FMRR determination with respect to the Plaza Building Space.

2.4.4Exercise of Option.

2.4.4.1In General.  Each Extension Option contained in this Section 2.4 shall be exercised by Tenant, if at all, only by Original Tenant or any Permitted Assignee, as the case may be, delivering a Renewal Notice to Landlord not more than twenty (20) months nor less than fifteen (15) months prior to the then scheduled expiration of the Term.Not later than the fourteenth (14th) month prior to the scheduled expiration of the Term, Landlord shall deliver to Tenant notice (the “Extension Term Annual Base Rent Notice”) setting forth its proposed Extension Term Annual Base Rent (defined in Section 2.4.5, below) (with separate FMRR amounts for the South Tower Extension Premises, and if applicable, the Plaza Building Space).Within thirty (30) days thereafter, if Tenant does not notify Landlord, that it accepts the Extension Term Annual Base Rent set forth in the Extension Term Annual Base Rent Notice, the parties shall follow the procedure, and the Extension Term Annual Base Rent shall be determined, as set forth below in Section 2.4.5.

2.4.4.2Partial Renewal.  Tenant may exercise the Partial Renewal Right, by delivering to Landlord an Option Exercise Notice which specifically indicates such election (and references this Section 2.4.4.2, and that specifies the portion of the then existing Premises with respect to which Tenant is interested in extending the Term of the Lease (the “Partial Extension Premises”) and the portion of the then existing Premises not included within the Partial Extension Premises (the “Non-Renewal Space”); provided, however, that Tenant shall have no right to exercise the Partial Renewal Right with respect to any Partial Extension Premises that includes: (a) any space on any floor of the South Tower that includes less than all of the Rentable Area of the Premises on such floor, (b) any non-contiguous floors on the South Tower (provided, however, that any two (2) floors separated by any floor in the South Tower including only mechanical equipment and not including any Rentable Area shall be deemed contiguous for purposes of this Section 2.4.4.2), (c) any block of contiguous floors that does not include either the lowest or the highest floor in the Premises as of the date on which Tenant delivers a Renewal Notice, (d) less than four (4) full, above ground floors in the South Tower (“Extension Option Leasing Requirement”), or (e) any space in the Plaza Building that is less than one hundred percent (100%) of the Plaza Building Space (i.e., there shall be no Partial Renewal Right with respect to the Plaza Building Space).If Tenant elects to exercise the Partial Renewal Right, then each of Landlord and Tenant shall be relieved of all of their respective obligations under this Lease with respect to the applicable Non-Renewal Space as of the first (1st) day of the applicable Extension Term, except for all of those obligations under this Lease with respect to the Non-Renewal Space that specifically survive the expiration or earlier termination of this Lease, including, without limitation, the payment by Tenant of all accrued but unpaid amounts owed by Tenant under this Lease (including, but not limited to, Additional Rent) and all refunds owed to Tenant under Article 4 and the other provisions of this Lease, through the day immediately preceding the first (1st) day of the applicable Extension Term.In the event that Tenant fails to vacate, and surrender and deliver to Landlord exclusive possession of any of the Non-Renewal Space, free of all subleases, and otherwise in the condition required pursuant to the terms of this Lease, prior to the first (1st) day of the applicable Extension Term, then the provisions of Article 25 of this Lease shall apply to such Non-Renewal Space.

2.4.4.3Plaza Building.  Notwithstanding anything to the contrary contained herein, Tenant shall have no right to extend the Term of this Lease with respect to the Plaza Building Space except on the condition that, as of the date on which Tenant delivers a Renewal Notice, and on the date on which an Extension Term commences: (a) Tenant shall satisfy the Extension Option Leasing Requirement and (b) Tenant shall be Occupying (or a subtenant of Tenant shall be Occupying) and shall be operating a retail bank branch office in and from one hundred percent (100%) of the Rentable Area in the Plaza Building Space.

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2.4.5Determination of FMRR.  The FMRR for each of the South Tower Extension Premises and, if applicable, the Plaza Building Space shall be determined separately.  For purposes of application of this Section 2.4.5, each shall be considered a separate form of “Extension Term Annual Base Rent.” In the event Tenant does not accept the Expansion Rent pursuant to Section 1.7.6, above, or the First Offer Rent pursuant to Section 1.8.3 of this Lease or the Extension Term Annual Base Rent set forth in the Extension Term Annual Base Rent Notice, Landlord and Tenant shall attempt to agree upon the Expansion Rent, First Offer Rent or Extension Term Annual Base Rent, as the case may be, using their best good-faith efforts.  If Landlord and Tenant fail to reach agreement within twenty (20) days following Tenant’s objection to the Expansion Rent, First Offer Rent or Extension Term Annual Base Rent (the “Outside Agreement Date”), then each party shall make a separate determination of the Expansion Rent, First Offer Rent or Extension Term Annual Base Rent, as the case may be, within five (5) business days of the Outside Agreement Date, and such determinations shall be submitted to arbitration in accordance with Section 2.4.5(i) through 2.4.5(vii) below.

(i)Landlord and Tenant shall each appoint one arbitrator who shall by profession be a real estate broker or lawyer who shall have been active over the five (5) year period ending on the date of such appointment in the leasing of commercial high-rise properties in the downtown Los Angeles, California area, exclusive of any broker or lawyer any brokerage firm or law firm currently representing (or who has previously represented within the preceding two (2) year period) either party.  The determination of the arbitrators shall be limited solely to the issue of whether Landlord’s or Tenant’s submitted Expansion Rent, First Offer Rent or Extension Term Annual Base Rent, as the case may be, is the closest to the actual Expansion Rent, First Offer Rent or Extension Term Annual Base Rent, as the case may be, as determined by the arbitrators, taking into account the requirements of Section 2.4.3 of this Lease.  Each such arbitrator shall be appointed within fifteen (15) days after the applicable Outside Agreement Date.

(ii)The two arbitrators so appointed shall, within ten (10) days 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 in Section 2.4.5(i), above for qualification of the initial two (2) arbitrators.

(iii)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 Expansion Rent, First Offer Rent or Extension Term Annual Base Rent, as the case may be, and shall notify Landlord and Tenant thereof.

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

(v)If either Landlord or Tenant fails to appoint an arbitrator within fifteen (15) days after the applicable Outside Agreement Date, 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.

(vi)If the two (2) arbitrators appointed by Landlord and Tenant shall fail to agree upon and appoint a third arbitrator, or if both parties shall fail to appoint an arbitrator, then the appointment of the third arbitrator, or of 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 instructions set forth in this Section 2.4.5.

(vii)The cost of arbitration shall be paid by the party whose determination of the FMRR is not selected.

2.4.6Lease Terms for Extended Term.  On each occasion in which Tenant exercises an Extension Option as set forth in Section 2.4.4 of this Lease, Landlord and Tenant shall execute an amendment reflecting the terms and conditions set forth in this Section 2.4, including without limitation, that except as otherwise provided in Section 2.4, the Lease Term shall be extended on the same terms and conditions as applicable immediately preceding the commencement of such Extension Term.

2.4.7Conditions to Exercise of Each Option.  Notwithstanding any provision of this Section 2.4 to the contrary, at the election of Landlord, any attempted exercise by Tenant of an Extension Option shall be invalid and ineffective if, on the date of such attempted exercise of the Extension Term or on the date on which the Extension Term is scheduled to commence; (a) there is an uncured Event of Default by Tenant under this Lease (which has not been waived in writing by Landlord) or (b) Tenant does not satisfy the Extension Option Leasing Requirement.  If Tenant does not timely send the Extension Notice for an Extension Option pursuant to the provisions of this Section 2.4 within the applicable time period, time being of the essence, then, at the election of Landlord, Tenant shall be deemed to have forever waived and relinquished such Extension Option, and any other options or rights to renew or extend the Term effective after the then applicable Expiration Date shall terminate and shall be of no further force or effect.

ARTICLE 3 - RENT; LATE CHARGES

3.1Base Rent; Rent.

3.1.1Tenant shall pay, except as expressly provided to the contrary herein, during each Lease Year of the Term of this Lease as Base Rent (as defined in Item 4 of the Basic Lease Provisions) for the Premises (as defined in Item 2.1 of the Basic Lease Provisions) the sums shown for such periods specified in Item 4 of the Basic Lease Provisions.

3.1.2Except as expressly provided to the contrary herein, Annual Base Rent shall be payable in equal consecutive monthly installments, in advance, without abatement, deduction or offset, commencing on the

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First Increment Commencement Date and continuing thereafter throughout the Term on the first (1st) day of each calendar month thereafter.  If the First Increment Commencement Date (or the Second Increment Commencement Date, the Plaza Building Commencement Date, the Third Increment Commencement Date or the Fourth Increment Commencement Date) is a day other than the first (1st) day of the calendar month, then the Base Rent for the partial Lease month (the “Partial Lease Month Rent”) for the Premises (or such Increment of Space) shall be calculated on a per diem basis determined by dividing the initial Monthly Base Rent shown in Item 4 of the Basic Lease Provisions by the actual number of days in the subject calendar month and multiplying such amount by the number of remaining days of such month from and including the First Increment Commencement Date (or the Second Increment Commencement Date, the Plaza Building Commencement Date, the Third Increment Commencement Date or the Fourth Increment Commencement Date).  Base Rent, all forms of Additional Rent (defined in Section 3.3, below) payable hereunder by Tenant and all other amounts, fees, payments or charges payable hereunder by Tenant: (i) shall each constitute rent payable hereunder (and shall sometimes collectively be referred to herein as “Rent”), (ii) except as otherwise set forth in this Lease, shall be payable to Landlord when due without any prior notice or demand therefor in lawful money of the United States and without any abatement, offset or deduction whatsoever and (iii) shall be payable to Landlord at the address of Landlord described in Item 11 of the Basic Lease Provisions or to such other person or to such other place as Landlord may from time to time designate in writing to Tenant.

3.2Late Charge: Interest.  If any monthly installment of Base Rent, Parking Fees (defined in Section 20.3, below), or estimated monthly installments of Tenant’s Percentage Share of Operating Expenses (defined in Section 4.2.3, below) and Property Taxes (defined in Section 4.2.2, below) for the Project hereunder (collectively “Scheduled Rent”) any other form of Rent hereunder (“Other Rent”) is not received by Landlord (or Landlord’s designee) when due, and such Scheduled Rent or Other Rent shall remain unpaid for three (3) business days after Landlord notifies Tenant that such Rent is past due (collectively, a “Late Charge Delinquency”), Tenant shall pay to Landlord a late charge (“Late Charge”) equal to *  [ILLEGIBLE] amount of Rent (Scheduled Rent or Other Rent, as the case may be) then delinquent (which Late Charge shall be due and payable to Landlord within five (5) days of Landlord’s demand therefore).  In addition, in the event that any Late Charge Delinquency shall continue uncured for thirty (30) days, all forms of Rent then delinquent under this Lease shall automatically bear interest (payable to Landlord within five (5) days of Landlord’s demand therefor) at an annual interest rate equal to * * ).  The Late Charge (and any interest on any overdue amount payable pursuant to this Section 3.2) shall be deemed Additional Rent hereunder and the right to require it shall be in addition to all of Landlord’s other rights and remedies hereunder or at law or in equity and shall not be construed as liquidated damages or as limiting Landlord’s remedies in any manner.

3.3Additional Rent.  For purposes of this Lease, all amounts (other than Base Rent) payable by Tenant to Landlord pursuant to this Lease, whether or not denominated as such, shall constitute additional rent (“Additional Rent”) hereunder.

ARTICLE 4 - ADDITIONAL RENTAL

4.1Payment of Tenant’s Percentage Share of Operating Expenses and Property Taxes.

4.1.1Payment of Operating Expenses.  Subject to the provisions of this Lease, in addition to paying Base Rent pursuant to Article 3 of this Lease, with respect to each Expense Year (defined in Section 4.2.1, below) Tenant shall also pay as Additional Rent under this Lease, Tenant’s Percentage Share (defined in Section 4.2.5, below) of Operating Expenses (defined below) for the Project allocable hereunder to such Expense Year.

4.1.2Payment of Property Taxes.  Subject to the provisions of this Lease, in addition to paying Base Rent pursuant to Article 3 of this Lease, with respect to each Expense Year, Tenant shall also pay as Additional Rent, Tenant’s Percentage Share of Property Taxes (defined in Section 4.2.2, below) for the Project allocable hereunder to such Expense Year.

4.2Definitions.

4.2.1Expense Year.  “Expense Year” shall mean each calendar year in which any portion of the Term of this Lease falls, through and including the calendar year in which the Term of this Lease expires.

4.2.2Property Taxes.  “Property Taxes” shall mean, subject to the exclusions set forth in this Section 4.2.2, below, all real property taxes, assessments, fees, charges, or impositions and other similar governmental or quasi-governmental ad valorem or other charges levied on or attributable to the Project or its ownership, operation or transfer of any and every type, kind, category or nature, whether direct or indirect, general or special, ordinary or extraordinary, and all taxes, assessments, fees, charges or similar impositions imposed in lieu or substitution (partially or totally) of the same including, without limitation, all taxes, assessments, levies, charges or impositions: (i) on any interest of Landlord or (pursuant to a law enacted after September 1, 2003) on any interest of any mortgage of Landlord in the Project, the Buildings, the Premises or in this Lease, or on the occupancy or use of space in the Project, the Building or the Premises; (ii) on the gross or net rentals or income from the Project, Buildings and/or the Premises, including, without limitation, any excise tax, sales tax or gross receipts tax levied by any federal, state or local governmental entity with respect to the receipt of Rent; (iii) on any transit taxes or charges, Metrorail assessments, business or license fees or taxes, annual or periodic license or use fees, park and/or school fees, arts charges, parks charges, housing fund charges; (iv) imposed for street, refuse, police, sidewalks, fire protection and/or similar services and/or maintenance, whether previously provided without charge or for a different charge, whether provided by governmental agencies or private parties, and whether charged directly or indirectly through a funding mechanism designed to enhance or augment benefits and/or services provided by governmental or quasi-governmental agencies; (v) on any possessory taxes charged or levied in lieu of real estate taxes; and (vi) any costs or expenses incurred or expended by Landlord consistent with Institutional Owner Practices (as defined in Section 4.3.2, below) in investigating, calculating, protesting, appealing or otherwise attempting to reduce or minimize such taxes.  Notwithstanding anything to the contrary contained herein, there shall be excluded from Property Taxes: (a) all capital stock, inheritance, estate, gift, or any other taxes imposed upon or measured by Landlord’s gross income or profits unless the same is specifically included within the definition of Property Taxes above or to the extent otherwise

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imposed in lieu of any form of real estate taxes or other ad valorem taxes,  (b) any assessments assessed against the Project pursuant to an assessment district under circumstances where (1) participation in the assessment district is wholly voluntary and no assessments would be payable with respect thereto had Landlord (or its predecessor in interest) not voluntarily elected to participate, and (2) the assessments imposed under the assessment district are primarily used to finance (or reimburse Landlord for) capital improvements to the Project which would not be recoverable (through amortization or otherwise) as Operating Expenses pursuant to the provisions of this Lease (with Tenant agreeing that any taxes or assessments under any existing or future “Business Improvement District” are not covered by this clause (b) (and thus shall be includable under Property Taxes)) (c) all Property Taxes allocable to the J-2 Parking Annex and (iv) all state and federal income taxes.  Notwithstanding the foregoing, at all times that the Project is owned by a state public retirement system, the State of California, any local public entity, or any entity in which any of the same hold an interest (collectively, “Public Entity”); (A) 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 such interest (“Possessory Interest Taxes”), (B) such property taxes shall be based upon the full cash value of the possessory interest which will equal the greater of (1) the full cash value of the possessory interest or (2) if Tenant has leased less than all of the Project, Tenant’s Percentage Share of the full cash value which would have been enrolled if the entire Project had been subject to property tax upon acquisition by the entity and (C) in the event possessory interest taxes are applicable, Landlord shall have the right to make such adjustments to the foregoing as Landlord shall determine in good faith from time to time are required to most closely approximate the amount of Property Taxes which would be payable hereunder under circumstances where the Project is not owned by a Public Entity; provided, however, notwithstanding the foregoing, in no case shall any such Possessory Interest Taxes include (x) any taxes or assessments that are in excess of the amount of Property Taxes which would have been assessed if the Project were not owned in whole or in a part by a Public Entity or (y) any Possessory Interest Taxes not actually assessed or paid by or on behalf of Landlord.

4.2.3Operating Expenses.  “Operating Expenses”  shall mean, subject to Section 4.2.4 below, all costs, fees, amounts, disbursements and expenses of every kind and nature paid or incurred by Landlord with respect to any Expense Year, on an accrual basis and without duplication (with each other or with Property Taxes), in connection with the operation, ownership, maintenance, insurance, restoration, management, replacement or repair of the South Tower, the Plaza Building, the Common Areas or the Project in a first class manner, including, without limitation, any amounts paid or incurred with respect to:

(i)Premiums for property, casualty, liability, rent interruption, earthquake, terrorism flood or other types of insurance carried by Landlord from time to time, and all amounts actually paid by Landlord with respect to the Project or any portion thereof (or any costs or Restoration (defined in Section 12.1, below) thereof or any liabilities with respect to the Project) to cover deductibles under any such insurance; provided, however, that the maximum amount of deductible under any earthquake and/or terrorism insurance in force with respect to the Project which shall be includable in Operating Expenses for the Project for any calendar year shall be an amount equal to (a) *  b) the number or square feet of Rentable Area contained in the Project.

(ii)Salaries, wages and other amounts paid or payable for personnel (including, without limitation, the Project manager, superintendent, operation and maintenance staff, the Parking Facilities manager, concierge (if any) and other employees of Landlord) involved in the maintenance and operation of the Buildings or the Project, including contributions and premiums towards fringe benefits, unemployment taxes and insurance, social security taxes, disability and worker’s compensation insurance, pension plan contributions and similar premiums and contributions which may be levied on such salaries, wages, compensation and benefits and the total charges of any independent contractors or property managers engaged in the operation, repair, care, maintenance and cleaning of any portion of the Buildings or the Project; provided, however, in the case where such amounts are included (on an accrual basis) if and to the extent such salaries, wages and other amounts are not paid within the next twelve (12) months following the conclusion of such subsequent Expense Year, then to such extent such salaries, wages and other amounts were included within such prior Expense Year (on the basis of being payable (but not paid) (any such amount, is referred to herein as the “Reduction Amount”), the same shall be deducted from Operating Expenses for such Expense Year; provided, however, that if the Lease shall have been previously terminated, Landlord shall issue Tenant a check in the amount of Tenant’s Percentage Share of the Reduction Amount.

(iii)Cleaning expenses, including without limitation, janitorial services, window cleaning, and garbage and refuse removal.

(iv)Landscaping and hardscape expenses, including without limitation, irrigating, trimming, mowing, fertilizing, seeding, and replacing plants, trees and hardscape.

(v)The cost of fuel, gas, electricity, water, sewer, telephone, steam and other utility services provided to the Project.

(vi)The cost of maintaining, operating, restoring, renovating, managing, repairing and replacing components of equipment or machinery, including, without limitation, heating, refrigeration, ventilation, electrical, plumbing, mechanical, elevator, escalator, sprinklers, fire/life safety, security and energy management systems, including service contracts, maintenance contracts, supplies and parts with respect thereto.

(vii)The costs of access control and/or security for, and supervision of, the Project.

(viii)Rental, supplies and other costs with respect to the operation of the management office for the Project and all Project Management storage areas.

(ix)All cost and fees for licenses, certificates, permits and inspections, and the cost incurred in connection with the implementation of a transportation system management program or similar program.

(x)The cost of replacement, repair, acquisition, installation and modification of: (A) materials, tools, supplies and equipment purchased by Landlord which are used in the maintenance, operation and

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repair of the Project (and do not exceed, on an aggregate basis each year, * ), and (B) any other form of improvements, additions, repairs, or replacements to the Project or the equipment or machinery used in connection with the Project; provided, however, that with respect to the items described in clauses (A) and (B) above which constitute a capital item, replacement, repairs, addition or improvement (collectively “Capital Items”) under sound accounting and property management principles consistently applied, in each case the cost of such Capital Items shall be amortized (with interest at the Interest Rate (defined in this Section 4.2.3(x), below) over the useful life (the “Useful Life”) of such Capital Item, as determined in accordance with sound accounting and property management principles consistently applied; provided, further, however, that with respect to Capital Items described in clause (B) above only, such items shall be included in Operating Expenses only if the implementation of such items is intended to reduce Operating Expenses or to effect other economies in the operation or maintenance of the Project (a “Cost Savings Device”), or is required under any Law (defined in Section 7.2.1, below) enacted after the date on which Landlord delivers the First Increment Office Space to Tenant; provided, finally, however, that the cost of any Cost Savings Device shall be amortized (with interest at the Interest Rate) over the lesser of (x) the Useful Life of such Capital Item or (y) the Pay Back Period (defined below) associated with such Cost Savings Device.  The “Pay Back Period” shall be the period of time within which the projected aggregate annual savings in Operating Expenses resulting from the installation of a particular Cost Savings Device will equal the cost of the Cost Savings Device, as determined by the Landlord in accordance with sound accounting principles consistently applied.

*

(xi)Attorneys’, accountants’ and consultants’ fees and expenses in connection with the management, operation, administration, maintenance and repair of the Project (consistent with Institutional Owner Practices), including, but not limited to, such expenses that relate to seeking or obtaining reductions in or refunds of Property Taxes, or components thereof, or the costs of contesting the validity or applicability of any governmental enactments which may affect Operating Expenses.

(xii)Fees for the property management of the Project in an amount equal to three percent (3%) of the gross revenues of the Project (which shall be grossed up by Landlord to reflect ninety-five percent (95%) occupancy of the entire Project on an annual basis), without regard to whether actual fees so paid are greater or less than such amount.

(xiii)Sales, use and excise taxes on goods and services purchased by Landlord for the management, maintenance, administration or operation of the Project.

(xiv)Fees for local civic organizations and dues for professional trade associations.

(xv)Payments under any declarations, covenants, conditions and restrictions or instruments pertaining to the operation of the Project or the maintenance of any easement, license or operating agreement or similar instrument which affects the Project (and any of the same pertaining to the sharing of costs by the Project) to the extent listed on Exhibit “O?” (or otherwise approved by Tenant, which approval Tenant shall not unreasonably withhold, condition or delay).

(xvi)Subject to Sections 4.2.4 (xxvi) and (xxix), costs and expenses of investigating, testing, documenting, monitoring, responding to, abating and remediating Hazardous Materials (defined in Section 7.3.3, below), other than abatement and remediation costs with respect to Hazardous Materials actually known by Landlord (on the Effective Date) to require abatement and/or remediation under applicable Laws (defined in Section 7.2.1, below).

(xvii)The cost of providing insurance which is not unique to a parking garage (such as garage keepers insurance) and the cost of any access control services provided with respect to the Parking Facilities.

(xviii)The cost of maintenance and replacements of curbs, walkways and security barriers at the Project.

(xix)The cost of contesting any governmental enactments which may affect Operating Expenses.

(xx)Any costs, fees, amounts, disbursements and expenses which are generally included within Operating Expenses under Institutional Owner Practices.

4.2.4Operating Expenses Exclusions.  Notwithstanding any provision of this Lease to the contrary, for purposes of this Lease, Operating Expenses shall not include:

(i) Property Taxes;

(ii)any costs relating to the design and construction of tenant improvements to the Premises or to the premises of other tenants;

(iii)except as specifically set forth in Section 4.2.3 above, depreciation, amortization, interest, principal and other payments on mortgages and any other form of monetary encumbrance or any form of financing of Landlord relating to the Project, and any other cost or expenses relating or required pursuant to or on account of any such mortgage, encumbrance or financing, if any;

(iv)any marketing costs, legal fees, space planners’ fees, advertising and promotional expenses, and brokerage fees and expenses incurred in connection with the original development, subsequent improvement, or original or future leasing, financing or sale of the Project; or in connection with any assignment, sublease, renewal, expansion or similar transactions in the Project;

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(v)any costs for which the Landlord is reimbursed by insurance by its carrier or any tenant’s carrier or by anyone else; Landlord shall use commercially reasonable, good faith efforts to obtain the foregoing reimbursements;

(vi)any bad debt loss, rent loss, or any reserves for bad debts or rent loss, or similar losses;

(vii)any expense relating to services or other benefits provided to other tenants in the Project at no cost which are made available to Tenant at a charge or which are not available to Tenant;

(viii)any cost associated with the operation of the business of the partnership or entity which constitutes the Landlord (or of which Landlord is a direct or indirect subsidiary, parent or Affiliate (defined in Section 15.8, below)), as the same are distinguished from the costs of operation of the Project, including partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except to the extent the same are directly attributable to the actions of the Tenant and such actions are in violation of this Lease), costs of selling, syndicating, financing, mortgaging or hypothecating any interest in the Project or any porting thereof, and costs incurred in connection with any disputes between Landlord and its partners and/or Landlord affiliates, between Landlord and its employees, between Landlord and any other owner or interest holder in the Project or any adjacent landowner, between constituent partners of Landlord, between Landlord and Project management or its employees, or between Landlord and other tenants or occupants;

(ix)any wages, benefits or related expenses of any employee who does not devote substantially all of his or her employed time to the management, operation or maintenance of the Project unless such wages, benefits and expenses are reasonably and equitably prorated to reflect time spent on operating and managing the Project vis-à-vis time spent on matters unrelated to operating and managing the Project (and such proration is consistent throughout the Lease Term); provided however, that in no event shall Operating Expenses include wages and/or benefits attributable to personnel above the level of Project manager;

(x) any penalties and, except as specifically set forth in Section 4.2.3(x), above, interest;

(xi)any amount paid as ground rental for the Project or any portion thereof;

(xii)any costs, including, without limitation, permit, license and inspection costs, incurred with respect to the installation of improvements for the exclusive use or benefit of a tenant or tenants in the Project or otherwise incurred in renovating or otherwise improving, decorating, painting or redecorating vacant space for tenants or other occupants of the Project;

(xiii)expenses in connection with services or other benefits which are provided to another tenant or occupant of the Project (of the same area of the Project as Tenant (i.e., the South Tower or the Plaza Building)), and for which such other tenant or occupant is not charged directly, and that are not offered to Tenant in any portion of its Premises or for which Tenant is charged a separate charge;

(xiv)any expense related to all items and services (the cost of which would otherwise be includable in Operating Expenses) for which Landlord seeks reimbursement from Tenant or any other tenant in the Project to the extent of the reimbursement billings Landlord delivers to Tenant or such other tenants;

(xv)any payments paid to Landlord (or any member, manager, partner or other constituents thereof) or to subsidiaries or Affiliates thereof for goods or services (including utility services) in the Project to the extent the same exceeds the cost of such goods or services if rendered on a competitive basis by qualified, first-class unaffiliated third parties;

(xvi)any compensation paid to clerks, attendants or other persons in commercial concessions operated or subsidized by Landlord or operated by others in the Project (including people collecting parking fees, performing valet services, performing parking attendant duties, washing or otherwise servicing vehicles in, on or in connection with the Parking Facilities);

(xvii)any rentals and other related expenses incurred in leasing air conditioning systems, elevators or other equipment, which if purchased, the cost of which would be excluded from Operating Expenses as a capital cost, except for reasonable amounts of equipment not affixed to the Project which is used in providing janitorial or similar services and, further excepting from this exclusion such equipment rented or leased to remedy or ameliorate an emergency condition in the Project, but only to the extent required in connection with such emergency;

(xviii)any costs of electric power or other services for which any tenant directly contracts with the local public service or utility company or other provider;

(xix)any cost, interest or tax penalty incurred as a result of Landlord’s negligence, inability or unwillingness to make tax payments (or to file tax filings or returns) when due;

(xx)any costs of acquisition or maintenance of signs in or on the Buildings or the Project identifying other tenants (provided that costs of maintaining signs identifying the Project shall not be excluded from Operating Expenses pursuant to this Section 4.2.4(xx));

(xxi)any costs incurred by Landlord due to the violation by Landlord or any affiliate thereof of the terms and conditions of any lease of space in the Project;

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(xxii)any costs expressly excluded from Operating Expenses elsewhere in this Lease;

(xxiii)any rent or related expenses for any office space occupied by Project management personnel above the Project Manager’s level (“Management Space”) to the extent (1) the size of such office space exceeds the size of the Management Space as of the First Increment Commencement Date or (2) the rental rate applicable to such space exceeds the fair market rental value of the Management Space or (3) such office space is used to market or lease the Project or any portion thereof;

(xxiv)any expenses relating to the general corporate overhead and the general and administrative expenses of Landlord or any Landlord affiliate;

(xxv)any cost or expenses incurred in connection with disputes with past, present or prospective tenants or other occupants of the Project;

(xxvi)any cost or expenses arising from the gross negligence or willful misconduct of Landlord;

(xxvii)costs incurred: (a) to comply with Laws relating to the removal of hazardous material (as defined under applicable law) which was in existence in the Buildings or on the Project on the Effective Date, and was of such a nature that a federal, state or municipal governmental authority, if it had then had knowledge of the presence of such hazardous material, in the state, and under the conditions that it then existed in the Buildings or on the Project, would have then required the removal of such hazardous material or other remedial or containment action with respect thereto; (b) to remove, remedy, contain, or treat hazardous material, which hazardous material is brought into the Buildings or ?nto the project after the date hereof by Landlord or one or more of Landlord’s agents, employees or contractors, and is of such a nature that, at that time, a federal, state or municipal governmental authority, if it then had knowledge of the presence of such hazardous material in the state and under the conditions that then existed in the Buildings or on the Project, would have then required the removal of such hazardous material or other remedial or containment action with respect thereto;

(xxviii)any costs arising from any charitable or political contributions in excess of *  in any Expense Year;

(xxix)any costs or expenses incurred in connection with the management, existence, monitoring, reporting, containment, remediation, or removal or abatement of ACM (as defined in Section 7.3.3 below) from the Project or any portion thereof;

(xxx)any reserves of any kind, including, without limitation, replacement reserves, operating reserves, reserves required by lenders or partners, reserves for bad debts or lost rent or any similar charge;

(xxxi)any costs, fees, dues, contributions or similar expenses for industry associations or similar organizations in excess of *  any Expense Year;

(xxxii)any costs or expenses incurred in removing and storing the property of former tenants or occupants of the Project;

(xxxiii)any costs or expenses of installing, operating and maintaining any, broadcasting facility, luncheon club, spa, athletic or recreational club or child-care facility;

(xxxiv)any Landlord’s work or comparable work performed in connection with improvements for other tenants or prospective tenants;

(xxxv) any advertising expenditures;

(xxxvi)any costs or expenses reimbursed to Landlord under any warranty, rebate, guarantee or service contract (which shall not prohibit Landlord from passing through the costs of any such service contract if otherwise includable in Operating Expenses);

(xxxvii)any costs or expenses arising from claims, disputes or potential disputes in connection with potential or actual claims, litigation or arbitrations pertaining to the business of Landlord, or the ownership or title to the Buildings or the Project or any portion thereof (including, without limitation, attorneys’ fees, settlements, judgments or payments in lieu thereof);

(xxxviii)any entertainment and travel costs or expenses of Landlord, any Affiliate of Landlord, any management agent of Landlord and their respective employees, agents, partners and Affiliates (except for travel costs (not to exceed *  ) in any Expense Year) required for training of Landlord’s management personnel);

(xxxix)except as set forth in Section 4.2.3(i) and 4.2.3(x) above, costs of capital repairs, replacements and alterations, capital additions, capital improvements and equipment, as determined in accordance with sound real estate accounting principles, consistently applied;

(xi)assessments and related charges relating to the City of Los Angeles Fire Safety Improvements Assessment District created pursuant to LA Municipal Ordinance 91.8604;

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(xii)any costs or expenses related to any governmental, quasi governmental, utility company or similar program or plan for waste, traffic, hazardous waste, environmental or handicapped access management, mitigation, enhancement or remediation in which participation is voluntary;

(xiii)the cost of furnishing and installing non-Project standard replacement bulbs and ballasts in tenant spaces;

(xiiii)“takeover” costs or expenses, including, but not limited to, the expenses incurred by Landlord with respect to space located in another building of any kind or nature in connection with the leasing of space in the Project;

(xiiv)any payments under any declarations, covenants, conditions and restrictions pertaining to the Project or any easement, license or operating agreement or similar instrument which affects the Project, other than any amounts expressly included in Operating Expenses under Section 4.2.3(xv);

(xiv)any Operating Expenses or Property Taxes specifically relating to the J-2 Parking Annex, other than any Operating Expenses expressly included in Operating Expenses under Section 4.2.3(xvii);

(xivi)any items expressly excluded from Operating Expenses pursuant to Article 5; or

(xivii)any costs of: (a) rec?lking the perimeter walls of the Project and/or replacing or repairing exterior windows or the skin of the Building, and (b) major refurbishment to, or replacement of, air handlers (inclusive of coils, condensate plates, vibration isolation, and mister), chilled water pipes, and heating equipment (inclusive of heat exchangers and piping, cooling towers clutters and central pumping system), but only to the extent that all such costs described in this Section 4.2.4(xivii) exceed in the aggregate, *  *  ) in any Expense Year; provided, however, that any costs expressly authorized to be included within Operating Expenses under Section 4.2.3(x) shall not be subject to the provisions of this Section 4.2.4(xivii) and shall not be taken into account in determining whether there are any costs covered by this Section 4.2.4(xivii) *  per Expense Year threshold described above.

Operating Expenses shall be reduced by all cash discounts, trade discounts, or quantity discounts received by Landlord or Landlord’s managing agent in the purchase of any goods, utilities, or services (the cost of which is includable in Operating Expenses) in connection with the operation of the Project.  Landlord will not collect or be entitled to collect for any Expense Year Operating Expenses or Property Taxes from all of its tenants (whether as a portion of such tenants’ payments of base rent as a result of such tenants’ base year or expense stop amount or otherwise) in an amount which is in excess of one hundred percent (100%) of the Operating Expenses and Property Taxes actually paid by Landlord in connection with the operation of the Project for (and allocable to) such Expense Year.

4.2.5Tenant’s Percentage Share.  “Tenant’s Percentage Share” shall mean, with respect to the Premises, the percentage set forth in Item 5.1 of the Basic Lease Provisions; and with respect to each of the First Increment Office Space, the Second Increment Office Space, the Plaza Building Space, the Third Increment Office Space and the Fourth Increment Office Space, the percentages set forth in Items 5.2, 5.3, 5.4, 5.5, and 5.6 respectively, of the Basic Lease Provisions (and each such percentage is equal to a fraction, which has as its numerator the Rentable Area of the applicable Increment of Space and as its denominator, the Aggregate Project Rentable Area (defined in this Section 4.2.5, below), with each such fraction expressed as a percentage).  With respect to each of the Hold Space, the Expansion Space and/or the First Offer Space, Tenant’s Percentage Share shall mean a fraction which has as its numerator the Rentable Area of the applicable Hold Space, Expansion Space or First Offer Space, as the case may be, and which has as its denominator the Aggregate Project Rentable Area, and expressing such quotient in the form of a percentage.  For purposes of this Lease, the parties hereto stipulate that the “Aggregate Project Rentable Area” shall mean 2,648,920 square feet of Rentable Area.

4.3Calculation Methods and Adjustments.

4.3.1Gross Up of Variable Expenses.  The variable components of Operating Expenses (“Variable Expenses”) for all or any portion of any Expense Year during which actual occupancy of all of the Project is less than ninety-five percent (95%) of the Rentable Area of the Project (as if all tenants are paying full rent, as contrasted with free rent, half rent and the like such that those Variable Expenses which are dependent on the amount of rent payable are fully grossed up) shall be adjusted by Landlord on a basis consistent with Institutional Owner Practices, applying sound accounting and property management principles (and the provisions of this Lease) to reflect ninety-five percent (95%) occupancy of the Rentable Area of the Project (as if all tenants are paying full rent, as contrasted with free rent, half rent and the like such than Variable Expenses which are dependent on the amount of rent payable are fully grossed up) during such period.

4.3.2Cost Pools; Reimbursements.  Subject to the provisions of this Section 4.3, all calculations, determinations, allocations and decisions to be made hereunder with respect to Operating Expenses or Property Taxes shall be made in accordance with the good faith determination of Landlord applying sound accounting and property management principles consistently applied which are consistent with the practices of the majority of the institutional owners of Comparable Buildings (“Institutional Owner Practices”).  Landlord shall have the right to equitably allocate some or all of Operating Expenses and Property Taxes among particular classes or groups of tenants or occupants in the Project (for example, retail tenants and office tenants) (each such group a “Cost Pool”) to reflect Landlord’s good faith determination, consistent with Institutional Owner Practices, that measurably different amounts or types of services, work or benefits associated with Operating Expenses are being provided to or conferred upon different Cost Pools.  Subject to the provisions of this Section 4.3, from time to time Landlord shall have the right to expand or contract the amount, scope, level or types of services, work, items or benefits, the cost of which is included within Operating Expenses, so long as Landlord’s treatment of the same for purposes of the calculation of Operating

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Expenses is generally consistent with Institutional Owner Practices.  All discounts, reimbursements, rebates, refunds, or credits (collectively, “Reimbursements”) attributable to Operating Expenses or Property Taxes received by Landlord in a particular Expense Year shall be deducted from Operating Expenses or Property Taxes in the Expense Year the same are received, unless the Reimbursement (or a group of related Reimbursements) shall total in excess of $50,000 in any particular Expense Year, in which case such Reimbursements shall be applied to the Expense Year in which they were charged.  If deduction or application of Reimbursements hereunder shall result in credits in favor of Tenant, the same shall be credited against Rents next due and payable under this Lease, or if this Lease has been terminated, paid to Tenant within thirty (30) days of receipt by Landlord.  All assessments, premiums and other amounts of Operating Expenses or Property Taxes which can be paid by Landlord in periodic installments shall be paid by Landlord in the maximum number of periodic installments permitted by Law; provided, however, that if the then prevailing Institutional Owner Practice is to pay such assessments or premiums on a different basis, then except as expressly prohibited in this Lease, Landlord may utilize such different basis of payment.

4.3.3Separately Billed Expenses.  If in any Expense Year, Landlord elects to or is required by Law to bill separately from Operating Expenses, one or more utility services provided to tenants in the Project, Tenant shall pay to Landlord, within ten (10) days of delivery of Landlord’s invoice therefor, Landlord’s charges for such utility services provided to Tenant (which charges shall be calculated by Landlord reasonably and in good faith on a basis consistent with Institutional Owner Practices), and in such case, there shall be excluded from Operating Expenses all such utility services so billed separately (provided to all spaces which are leased, or available for leasing, to other tenants, or prospective tenants in the Project).  Subject to applicable Laws, Landlord shall solely determine all decisions with respect to the method and manner by which all utility services, including, without limitation, electricity, fuel, gas, water and sewerage services, shall be billed and provided in the Project, which determinations shall be made by Landlord in good faith and on a basis consistent with Institutional Owner Practices (including, without limitations, the right to allocate utility expenses based upon studies which allocate utility usages among the tenants or occupants of the Project based upon the estimated use by the respective tenants).

4.3.4If, not less than thirty (30) days prior to an entire calendar month, Tenant has given to Landlord a factually correct notice (“Notice and Certification of Non-Occupancy”) certifying that:  (i) Tenant has ceased to occupy (but still leases) one or more full floors of the Building (or the entire Premises, which in all events shall comprise not less than one full floor of the Building) (“Unoccupied Space”), (ii) there are no occupants (including without limitation, Tenant’s employees, subtenants and Tenant’s Occupants) occupying the Unoccupied Space, then for each such entire calendar month occurring during an Expense Year, Landlord shall make a determination, in the exercise of its good faith judgment, of the net Actual Costs (defined in Section 8.1.9, below) of electricity, janitorial service, and HVAC (defined in Section 10.2, below) (taking into account any administrative or other costs actually incurred by Landlord as a result of the application of this Section 4.3.4) which actually were not incurred by Landlord as a result of such non-occupancy of the Unoccupied Space by Tenant during such calendar month and which is includable in Operating Expenses (“Reduced Operating Amount”).  At the conclusion of each Expense Year during which Tenant shall deliver to Landlord a Notice and Certification of Non-Occupancy for one or more months during such Expense Year, Landlord shall calculate the total of Reduced Operating Amounts for such month or months during such Expense Year (which total is referred to herein as the “Reduced Operating Amount Credit”) and, Landlord shall, at Landlord’s option, either:  (A) give Tenant a credit in the amount of the Reduced Operating Amount Credit for such Expense Year against Tenant’s Percentage Share of Operating Expenses otherwise payable by Tenant to Landlord for such Expense Year (or give Tenant a credit in the amount of such Reduced Operating Amount Credit against Tenant’s Percentage Share of Operating Expenses for the subsequent Expense Year), or (B) issue a check payable to Tenant in an amount equal to the Reduced Operating Amount Credit (which Landlord must do if the Lease has been previously terminated).  Tenant acknowledges that, by virtue of the operation of Section 4.3.1 (and with all Unoccupied Space under Section 4.3.1), Operating Expenses corresponding to the Reduced Operating Amount Credit shall continue to be included in Operating Expenses for the Expense Year in question for purposes of calculation of Tenant’s Percentage Share of Operating Expenses.  The provisions of this paragraph shall not preclude Landlord from including in the leases of other tenants of the Project the Reduced Operating Amount Credit in accordance with any gross up provision, and Tenant specifically acknowledges and agrees that any other Rent credits or deductions (or other payments) given to any other Tenant in the Project under any comparable provision shall automatically be included in any gross-up of Variable Expenses hereunder.

4.4Payment Procedure; Estimates.  Tenant’s Percentage Share of Property Taxes and Operating Expenses payable under Section 4.1 shall be determined and paid as follows:

4.4.1Estimates.  During each Expense Year, Landlord shall give Tenant written notice (on a line-item by line-item primary category basis) of its reasonable and good faith estimate of Tenant’s Percentage Share of Operating Expenses and Property Taxes for that Expense Year (“Estimated Expense Statement”).  On or before the first (1st) day of each calendar month during such Expense Year, Tenant shall pay to Landlord one-twelfth (1/12th) of such estimated amounts; provided, however, that Tenant may elect;  (i) to pay Tenant’s Percentage Share of estimated ad valorem property taxes levied by the Los Angeles County Tax Assessor (“Real Property Taxes”) specified in any Estimated Expense Statement on a biannual basis on the condition that:  (a) Landlord has not notified Tenant in writing that its financing for the Project requires periodic impounds of Real Property Taxes that are inconsistent with a biannual payment schedule by Tenant and (b) each such biannual installment of fifty percent (50%) of Tenant’s Percentage Share of estimated Real Property Taxes shall be paid to Landlord (and received by Landlord) not less than twenty (20) days before the delinquency date for the corresponding payment of a Real Property Tax installment by Landlord and (ii) to pay Tenant’s Percentage Share of the cost of Landlord’s Insurance (defined in Section 11.3, below) upon demand therefor from Landlord, on the condition that each such payment by Tenant of Tenant’s Percentage Share of the cost of Landlord’s Insurance shall be paid to Landlord (and received by Landlord) no later than ten (10) days after Landlord’s delivery of its demand for payment for such amount from Tenant.  Not more often than once per year, Landlord may, by written notice to Tenant, revise its estimates for Operating Expenses and Property Taxes (including, but not limited to Real Property Taxes) for such Expense Year, and all subsequent payments under this Section 4.4 by Tenant for such Expense Year shall be based upon such revised estimate (provided that any such revised estimate shall set forth in reasonable detail the basis of any material increase in any primary Property Tax or Operating Expense category).

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4.4.2Landlord’s Statement.  Landlord shall employ commercially reasonable efforts to deliver to Tenant within one hundred fifty (150) days after the close of each Expense Year, or as soon thereafter as is practicable, a statement (which statement shall be reasonably detailed on a line-item by line-item basis) of that year’s Property Taxes and Operating Expenses, and Tenant’s Percentage Share of actual Property Taxes and actual Operating Expenses payable for such Expense Year pursuant to Section 4.1, as determined by Landlord in accordance with the terms of this Lease (the “Landlord’s Statement”).  Landlord’s Statement shall be binding upon Landlord and Tenant, except as provided in Section 4.5.  If the amount of Tenant’s Percentage Share of actual Property Taxes and Operating Expenses for any Expense Year is more than the estimated payments with respect thereto made by Tenant for such Expense Year, Tenant shall pay the deficiency to Landlord, together with interest thereon at the Interest Rate, within thirty (30) days after Landlord’s delivery of Landlord’s Statement.  If the amount of Tenant’s Percentage Share of actual Property Taxes and Operating Expenses for any Expense Year is less than the estimated payments for such Expense Year made by Tenant, any such excess, together with interest thereon at the Interest Rate, shall be credited against Rent next payable by Tenant under this Lease or, if the Term of this Lease has expired, any such excess, together with interest thereon at the Interest Rate, shall be paid to Tenant within thirty (30) days after Landlord’s delivery of Landlord’s Statement.  No delay in providing any Landlord’s Statement described in this Section 4.4.2 shall act as a waiver of Landlord’s right to receive payment from Tenant under Section 4.1 above with respect to Tenant’s Percentage Share of Property Taxes and/or Operating Expenses for the period covered thereby (provided that in the event that any such failure continues for a period in excess of six calendar months following Landlord’s receipt of notice of such failure from Tenant, Tenant may elect to seek specific performance).  Notwithstanding anything contained in this Article 4 to the contrary, in no event shall Tenant be obligated to pay any Property Taxes or Operating Expenses which are first billed to Tenant more than two (2) years following the delivery by Landlord of Landlord’s Statement for the Expense Year to which such amounts relate, except to the extent the same relates to Property Taxes and utilities, which may be billed to Tenant at a later date (but in no event later than four (4) years after the Expiration Date or any earlier date of termination of this Lease).

4.4.3Proration of Partial Years.  If this Lease shall expire or terminate on a day other than the end of a calendar year, the amount of Tenant’s Percentage Share of actual Property Taxes and actual Operating Expenses payable under Section 4.1 that is applicable to the calendar year in which such termination occurs shall be prorated on the basis that the number of days from January 1st of such calendar year to the Expiration Date or termination date, as the case may be, bears to the number three hundred sixty-five (365).  The expiration or early termination of this Lease shall not affect the obligations of Landlord and Tenant pursuant to this Section 4.4 that are to be performed after such expiration or early termination.

4.5Review of Landlord’s Statement.

4.5.1Upon Tenant’s written request, given not more than thirty-six (36) months after Tenant’s receipt of Landlord’s Statement for a particular Expense Year, and provided that there does not then exist any uncured Event of Default (after applicable notice and cure periods) under this Lease by Tenant, Tenant shall have the right to conduct a review of the Landlord’s Statement and of Landlord’s books and records with respect to Tenant’s Percentage Share of Operating Expenses and Tenant’s Percentage Share of Property Taxes allocable to the Expense Year covered by such Landlord’s Statement.  In connection with the foregoing review, Landlord shall provide Tenant with access to Landlord’s books and records relevant thereto (“Expense Records”) within thirty (30) days after Tenant’s written request therefor.  Subject to the provisions of this Section 4.5, the right of Tenant under this Section 4.5 to review the Expense Records covered by, and dispute particular amounts billed under, a Landlord’s Statement may only be exercised once for each Expense Year covered by any Landlord’s Statement, and Tenant’s failure to dispute (by delivery of a written notice) the amount of Tenant’s Percentage Share of Operating Expenses and/or Property Taxes for a particular Expense Year set forth in a particular Landlord’s Statement within thirty-six (36) months of Tenant’s receipt of such Landlord’s Statement shall be deemed to be Tenant’s approval of such Landlord’s Statement, and each and all of Tenant’s rights (under this Section 4.5 or otherwise) to review the Expense Records for the Expense Year covered by such Landlord’s Statement, to dispute any amount billed to Tenant pursuant to (or otherwise described in) such Landlord’s Statement, or to otherwise make any claim with respect to the calculation of Operating Expenses or Property Taxes in such Landlord’s Statement shall automatically be deemed forever waived by Tenant.  Tenant shall hire an independent, nationally, regionally or locally recognized certified public accounting firm (“Tenant CPA”) which Tenant CPA shall:  (i) be paid on a non-contingency fee basis, (ii) not be an ex-employee of Landlord or any affiliate of Landlord, to conduct Tenant’s review of Landlord’s Statement and the Expense Records (provided that Tenant may alternatively use its own personnel to perform such review).  Following any review of Landlord’s Expense Records by the Tenant CPA, the Tenant CPA shall provide Landlord with a comprehensive, written list of any disputed items or issues (“Disputed Items”).  In the event that the parties are unable to resolve any dispute concerning Tenant’s obligation to pay Tenant’s Percentage Share of Operating Expenses and/or Property Taxes within six (6) months after the end of Tenant’s review as set forth above, either party shall have the right to submit the dispute to binding arbitration in accordance with the terms of Article 14, below; provided, however, that any such dispute submitted to arbitration shall be specifically limited to the Disputed Items.  Any amount of Operating Expenses or Property Taxes determined to have been overpaid by Tenant shall be promptly returned to Tenant, together with interest thereon at the Interest Rate, (or at Landlord’s election, if this Lease has not terminated, credited against Rent thereafter coming due hereunder), and any amounts determined to have been underpaid by Tenant shall be paid to Landlord, together with interest thereon at the Interest Rate within ten (10) days.  If it is determined that the Operating Expenses and Property Taxes for any Expense Year in dispute, collectively, have been overstated by more than three percent (3%), then all of Tenant’s reasonable costs in connection with such review, dispute and the arbitration shall be paid for by Landlord within thirty (30) days of receipt of the arbitration award or other conclusion of such dispute; in all cases where it is determined that the Operating Expenses and Property Taxes for the Expense Year in dispute have not been overstated, Tenant shall be liable for and shall reimburse Landlord for, all of Landlord’s actual fees, costs and expenses incurred in connection with such review, dispute and arbitration, within thirty (30) days of receipt of the arbitration award or other conclusion of such dispute.

4.5.2Tenant acknowledges and agrees that any Expense Records of Landlord reviewed under this Section 4.5 (and the information contained therein) constitute confidential information of Landlord, which Tenant shall not disclose, nor permit to be disclosed by the Tenant CPA, to anyone other than the Tenant CPA performing the review, Tenant’s lawyers and consultants, Tenant’s subtenants and the principals of Tenant who receive the results of the review (and that, as a condition of commencement of any review of Landlord’s Expense Records, Landlord may

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require each of Tenant, the Tenant CPA, Tenant’s lawyers and consultants and each of Tenant’s subtenants to whom Tenant desires to disclose the results of such review, to execute and deliver to Landlord, a commercially reasonable confidentiality agreement).

4.6Proposition 13 Protection.

4.6.1Defined Terms

4.6.1.1“Sale” means a sale or other conveyance of the Project constituting a “change in ownership” of the Project for purposes of the California Revenue and Taxation Code (in effect as of the Effective Date) or any successor California statute.

4.6.1.2“Reassessment” means a reassessment of the Project for real property tax purposes by the appropriate governmental authority.

4.6.1.3“Protected Sale” means each Sale during the Protection Period (defined in Section 4.6.1.4, below).

4.6.1.4“Protected Reassessment” means each Reassessment of the Project as a result of a Protected Sale.

4.6.1.5“Protection Period” means the period commencing on the First Increment Commencement Date and expiring on the date that is sixty (60) calendar months after the First Increment Commencement Date.

4.6.1.6“Protected Tax Increase” means as to each Expense Year, all or part of which occurs during the Protection Period, that portion of the Property Taxes for that portion of the Expense Year within the Protection Period which is attributable solely to (and would not otherwise be applicable but for) a Protected Reassessment, if any; provided, however, that notwithstanding any provision of this Section 4.6 to the contrary, Protected Tax Increase shall in no event include any Property Taxes which:

(a)would have been assessed in any case in the Expense Year in question (even under circumstances where there had not been any Sale);

(b)are attributable to assessments pending immediately prior to the applicable first Reassessment which were included in the applicable Protected Reassessment or any assessments which were rendered unnecessary by or following the applicable First Reassessment; or

(c)are attributable to the annual inflationary increase in real property taxes (excluding that portion of any increase attributable to the incremental increase in the assessed value of the Project solely resulting from the applicable Protected Reassessment) provided by Law.

4.6.2Protection.

(i)This Section 4.6.2 shall apply only if a Protected Sale occurs during the Protection Period.  If no Protected Sale occurs during the Protection Period, this Section 4.6 shall have no force or effect.  In all cases, this Section 4.6.2 shall expire and shall be of no force or effect on the date that is sixty (60) calendar months after the First Increment Commencement Date.

(ii)If a Protected Sale occurs during the Protection Period then, in connection with any Protected Reassessment, during and with respect to the Protection Period, Tenant shall not be obligated to pay any portion of any Protected Tax Increase allocable to the Premises.

4.6.3Impact of Subsequent Sales.

(i)During the Protection Period.  In the event that following the first Protected Sale, there is one or more subsequent Protected Sales(s) (“Subsequent Sales”) during the Protection Period, which result(s) in a Reassessment of the Project at a value higher than the first Protected Reassessment this Section 4.6.3 shall continue to apply as to each Protected Tax Increase.

(ii)After the Protection Period.  Tenant shall, commencing on the date that is sixty (60) months after the First Increment Commencement Date and continuing for the remainder of the Term (including any applicable Extension Term), pay the full amount of Tenant’s Percentage Share of all Property Taxes for the Project.

4.6.4Landlord’s Right to Purchase the Proposition 13 Protection Amount.  The amount of Tenant’s Percentage Share of Property Taxes which, as of any particular date during the Protection Period, Tenant shall not be obligated to pay with respect to the remainder of the Protection Period pursuant to the provisions of this Section 4.6 shall be referred to herein as the “Proposition 13 Protection Amount.”  Landlord shall have the right to purchase (and to eliminate) all or any portion of any Proposition 13 Protection Amount at any time prior to the date that is twenty-four (24) months after any Protected Reassessment by paying to Tenant an amount equal to the Proposition 13 Purchase Price (defined in this Section 4.6.4, below) with respect thereto.  As used herein, “Proposition 13 Purchase Price”  shall mean the present value of the Proposition 13 Protection Amount then remaining (or if less than all of the same is to be purchased by Landlord, the portion to be so purchased) as of the date of payment (by Landlord to Tenant) of the Proposition 13 Purchase Price, as determined by Landlord utilizing a discount rate equal to the Interest Rate.

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ARTICLE 5 - ADDITIONAL TAXES

In addition to the Base Rent and all other forms of Additional Rent payable by Tenant hereunder, Tenant shall reimburse Landlord within ten (10) days of Landlord’s demand therefor, as Additional Rent, for any and all taxes, impositions or similar fees or charges (other than any of the same actually included by Landlord in Property Taxes with respect to the Expense Year in question) payable by or imposed or assessed upon Landlord upon or with respect to (or measured by or otherwise attributable to the cost or value of): (i) any fixtures, equipment or other personal property located in or about the Premises; (ii) any leasehold improvements made in or to the Premises by or for Tenant (without regard to ownership of such improvements if and to the extent the original cost, replacement cost or value thereof * foot or Rentable Area contained in the Premises; (iii) the Rent payable hereunder, including, without limitation, any gross receipts tax, license fee or excise tax levied by any governmental authority; (iv) the leasing or use of Tenant’s parking privileges in accordance with the terms of this Lease; (vii) any rights to signage and/or identity rights held from time to time by Tenant under this Lease; or (viii) Tenant’s installation, operation or maintenance of ATMs at the Project pursuant to the ATM Rights.  Landlord shall enforce the provisions of this Article 5 in a nondiscriminatory manner, and to the extent Landlord requires Tenant to pay directly (pursuant and this Article 5) a particular type or category of Property Tax, Landlord shall not include in Property Taxes or Operating Expenses any Property Taxes of the same type of category during the same Expense Year attributable to the same activities of any other tenant or attributable to any other premises in the Project which are then leased or available for lease.

ARTICLE 6 - SECURITY DEPOSIT

[Intentionally omitted].

ARTICLE 7 - -  USE OF PREMISES

7.1Tenant’s Permitted Use.

7.1.1General.  Subject to the provisions of this Section 7, Tenant shall use:  (a) the South Tower Premises only for Tenant’s Permitted Use as set forth in Item 9.1 of the Basic Lease Provisions (and for training rooms, in-house kitchen, cafeteria and food service operations and reproduction facilities, if and to the extent the same are only incidental to Tenant’s business operations in the Premises and are not to be used, in any material way, for the provision of training, food and/or reproduction of goods and/or services to the public) and shall not use the South Tower Premises or permit the South Tower Premises to be used for any other purpose and (b) the Plaza Building Space only for Tenant’s Permitted Use set forth in Item 9.2 of the Basic Lease Provisions and shall not use the Plaza Building Space (or permit the Plaza Building Space to be used) for any other purpose.  Tenant shall, at its sole cost and expense, obtain and maintain in full force and effect all governmental licenses, approvals and permits required to allow Tenant to conduct Tenant’s Permitted Use for each of the South Tower Premises and the Plaza Building Space.  Landlord disclaims any warranty that the Premises (including the South Tower Premises and the Plaza Building Space) are suitable for Tenant’s use, and Tenant acknowledges that it has had a full opportunity to make its own determination in this regard; provided, however, that nothing contained in this Section 7.1.1 shall reduce Landlord’s obligation to deliver the Plaza Building Space to Tenant in the condition specified in Section 1.2 of the Work Letter.  In no case shall Tenant use any portion of the Premises for: (i) offices of any division, agency or bureau of the United States or any state or local government (“Domestic Government Use”), (ii) offices of any division, agency or bureau of any foreign government or subdivision thereof, (“Foreign Government Use”), (iii) offices of any health care professionals or for the provision of any health care services, (iv) any school, educational, or other training facility, (v) any retail or restaurant uses (provided, that during such periods as Tenant is permitted to use the Plaza Building Space for a Permitted Plaza Building First Class Use by a Permitted Plaza Building First Class Tenant if and to the extent a retail of restaurant use shall qualify as a Permitted Plaza Building First Class Tenant, this restriction shall not apply to the Plaza Building Space, (vi) any residential use, (vii) any operational offices for communications uses (such as broadcasting radio and/or television stations), (viii) “executive suite” type uses where office suites are maintained for individual rental, (ix) temporary employment agencies (except and where exclusively used for hiring for Tenant) or (x) any use of the Premises or any portion thereof for any occupancy density which is greater than the average occupancy density associated with the occupancies of the other tenants of the Project (collectively, “Prohibited Uses”); provided, however, that: (a) if at any point during the Term of this Lease Landlord has, within the five (5) year period prior to such date, entered into a direct lease (a “Permitted Governmental Lease”) with a tenant which is a governmental entity expressly permitting such governmental tenant to use its premises (the “LL Permitted GUse Premises”) for a Domestic Government Use, and such LL Permitted GUse Premises is actually used for a period in excess of one hundred eighty (180) consecutive days for such Domestic Government Use, Tenant may then convert a portion of the South Tower Premises to a Domestic Government Use; provided, further, however, that Tenant’s rights to convert (and use) a portion of the South Tower Premises for a Domestic Government Use shall be strictly limited in all cases to a Domestic Governmental Use which; (1) is not larger in Rentable Area than the LL Permitted GUse Premises and (2) in Landlord’s good faith and reasonable judgment is not more intrusive upon (in comparison to the Domestic Government Use permitted in the LL Permitted GUse Premises) and/or more in conflict with Landlord’s objectives (in comparison to the Domestic Government Use permitted in the LL Permitted GUse Premises) as to the nature, size, intensity, reputation and/or impacts upon security, use of Common Areas, reputation of the Project and/or desirability of the Project to other tenants (and all other reasonably relevant characteristics specified by Landlord with respect to the Domestic Government Use (a “Permitted Domestic Governmental Use”) and (b) if at any point during the Term of this Lease Landlord has, within the five (5) year period prior to such date, entered into a Permitted Governmental Lease with a tenant which is a foreign governmental entity expressly permitting such foreign governmental tenant to use its premises (the “LL Permitted Foreign GUse Premises”) for a Foreign Government Use, and such LL Permitted Foreign GUse Premises is actually used for a period in excess of one hundred eighty (180) consecutive days for such Foreign Government Use, Tenant may then convert a portion of the South Tower Premises to a Foreign Government Use; provided, further, however, that Tenant’s rights to convert (and use) a portion of the South Tower Premises for a Foreign Government Use shall be strictly limited in all cases to a Foreign Governmental Use which: (1) is not larger in Rentable Area than the LL Permitted Foreign GUse Premises and (2) in Landlord’s good faith and reasonable judgment is not more intrusive upon (in comparison to the Foreign Government Use permitted in the LL Permitted Foreign GUse Premises) and/or more in conflict with Landlord’s objectives (in comparison to the Foreign Government Use permitted in the LL Permitted Foreign GUse Premises) as to the nature, size, intensity, reputation and/or impacts upon security,

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use of Common Areas, reputation of the Project and/or desirability of the Project to other tenants (and all other reasonably relevant characteristics specified by Landlord with respect to the Foreign Government Use (a “Permitted Foreign Governmental Use”).  For example, if the LL Permitted GUse Premises is a premises of two thousand (2,000) square feet of Rentable Area, is an office for executives and/or legal staff for a governmental agency and is reasonably viewed by the public (and other tenants) as being comparable to the other first class tenants in the Building, Tenant’s rights to a government use in the Premises would be limited only to government uses of two thousand (2,000) square feet of Rentable Area or less of a comparable nature to such Domestic Government Use.

7.1.2Landlord’s Right to Recapture Plaza Building Space.  In the event that Tenant shall fail to use and operate the Plaza Building Space as a retail bank for any period in excess of sixty (60) consecutive days, and such failure shall continue (other than due to good faith construction activities following casualty or a condemnation event or for remodeling purposes) for a period of thirty (30) days following delivery of written notice of Landlord’s intent to recapture such portion of the Premises, Landlord shall have the right, upon five (5) days written notice to Tenant, to recapture the Plaza Building Space from Tenant (through termination of this Lease as to the Plaza Building Space, effective as of the date of such notice) (“Landlord Bank Space Recapture Right”), and following such recapture, to lease such space to any other entity in Landlord’s sole and absolute discretion (provided in all such cases, such other entity shall be a retail bank or a Permitted Plaza Building First Class Tenant).  In the event that Landlord shall exercise the Landlord Bank Space Recapture Right: (a) this Lease shall automatically be amended to delete the Plaza Building Space from the Premises, and all amounts, percentages and figures appearing or referred to in this Lease based upon the square footage of the Premises (including, without limitation, the amount of the Rent) shall be appropriately and immediately reduced, (b) all of Tenant’s Tenant Plaza Building Identification Rights (defined in Section 28.5.4(ii), below) and all of Tenant’s rights under Section 28.9.3 shall terminate and shall be of no further force or effect and (c) Landlord and Tenant shall, within a reasonable period of time thereafter, execute an amendment to this Lease that shall: (i) confirm the deletion of the Plaza Building Space from the Premises, (ii) confirm the termination of all of Tenant’s Tenant Plaza Building Identification Rights and all of Tenant’s rights under Section 28.9.3, below, and (iii) make any other necessary and appropriate modification to this Lease.

7.2Compliance With Laws and Other Requirements.

7.2.1 Subject to the provisions of this Section 7.2.1, Tenant shall not do anything in or about the Premises, the Buildings or the Project which will in any way conflict with any law, statute, ordinance or other governmental or judicial rule, regulation requirement or order now in force or which may hereafter be enacted, promulgated or ordered (collectively, “Laws”).  Subject to the provisions of the Work Letter and this Section 7.2.1, Tenant shall, at its sole cost and expense, comply with all Laws which relate to: (i) Tenant’s use of the Premises, (ii) the Alterations (as defined in Section 10.2) or the Improvements (as defined in Section 11.2.2), (iii) the Base Building (defined in this Section 7.2.1, below), but, as to the Base Building, only to the extent such obligations are triggered by Tenant’s non-general office Alterations, non-general office Improvements, or non-general office use of the Premises and (iv) Other Installations Items (defined in Section 9.1, below).  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 with such standards or regulations, provided that, in no event, shall Tenant be required to comply with Laws with respect to the Base Building as a result of such occupational, health or safety standards except to the extent required pursuant to the second sentence of this Section 7.2.1.  Landlord shall comply with all Laws relating to the Base Building (including the Base Building in the Common Areas) if and to the extent (a) each such compliance with Laws obligation is not the responsibility of Tenant under the second sentence of this Section 7.2.1, and otherwise is not required as the result of the misconduct, breach, fault or negligence of Tenant or of any Tenant Party, and (b) Landlord’s failure to comply with such Laws would prohibit Tenant from obtaining or maintaining a certificate of occupancy for the Premises, or would unreasonably and materially affect the safety of Tenant’s employees or the operation of Tenant’s business or would create a significant health hazard for Tenant’s employees.  Landlord shall be permitted to include in Operating Expenses any costs or expenses incurred by Landlord under this Section 7.2.1 to the extent consistent with the terms of Section 4.2 above.  The “Base Building” shall include the Building Structure and the Building Systems.

7.2.2Tenant shall not use the Premises, or permit the Premises to be used, in any manner, or do or suffer any act in or about the Premises, which:  (i) violates or conflicts with any applicable Law; (ii) causes or is reasonably likely to cause material damage to the Project, any Building, any portion of the Premises or the Building Systems; (iii) violates a requirement or condition of any policy of insurance covering the Project, the Buildings, and/or the Premises, or increases the cost of such policy unless Tenant agrees in a writing reasonably satisfactory to Landlord to pay for all such increased costs (provided that in no event shall the terms of this item (iii) prohibit Tenant’s use of the South Tower Premises for general office purposes or prohibit Tenant’s use of the Plaza Building Space for operation of a retail bank branch office); (iv) constitutes or is reasonably likely to constitute a substantial nuisance, annoyance or inconvenience to other tenants or occupants of any building or the Project or its equipment, facilities or systems; (v) interferes with, or is reasonably likely to interfere with, the transmission or reception of microwave, television, radio, telephone, or other communication signals by antennae or other facilities located in the Project; or (vi) violates the Rules and Regulations described in Article 21.

7.3Hazardous Materials.

7.3.1No Hazardous Materials (defined in Section 7.3.2, below) shall be Handled (defined in Section 7.3.3, below) upon, about, in, at, above or beneath the Premises or any portion of the Buildings or the Project by or on behalf of Tenant, its subtenants or its assignees, or their respective contractors, clients, officers, directors, employees, agents, or invitees (each, a “Tenant Entity”).  Notwithstanding the foregoing, normal quantities of those Hazardous Materials customarily used in the conduct of general administrative and executive office activities (e.g., copier fluids and normal office cleaning supplies) may be used and stored at the Premises without Landlord’s prior written consent, but only in compliance with all applicable Environmental Laws (defined in Section 7.3.1, below) and in a manner consistent with Institutional Owner Practices.

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7.3.2“Environmental Laws” shall mean and include all now and hereafter existing Laws regulating, relating to, or imposing liability or standards of conduct concerning public health and safety or the environment.

7.3.3“Hazardous Materials” shall mean and include:  (a) any material or substance: (i) which is defined or becomes defined as a “hazardous substance,” “hazardous waste,” “infectious waste,” “chemical mixture or substance,” or “air pollutant” under Environmental Laws; (ii) containing petroleum, crude oil or any fraction thereof; (iii) containing polychlorinated biphenyls (PCB’s); (iv) asbestos, asbestos-containing materials or presumed asbestos-containing materials (collectively, “ACM”); (v) which is radioactive; (vi) which is infectious; or (b) any other material or substance displaying toxic, reactive, ignitable or corrosive characteristics, and are defined, or become defined by any Environmental Law.

7.3.4“Handle,” “Handled,” or “Handling” shall mean any installation, handling, generation, storage, treatment, use, disposal, discharge, release, manufacture, refinement, presence, migration, emission, abatement, removal, transportation, or any other activity of any type in connection with or involving Hazardous Materials.

7.4Existence of Asbestos.

7.4.1Pursuant to the provisions of Exhibit “I” attached hereto (the “ACM Notice”), a copy of which Tenant acknowledges it has read, Landlord has notified Tenant of the presence of ACM in or about portions of the Premises and other portions of the Project.

7.4.2Landlord has established, and shall maintain during the Term, an ACM operations and maintenance program (the “ACM Operations and Maintenance Program”) consistent with Institutional Owner Practices with respect to the existence of ACM in the Project.  Tenant shall comply with all requirements of the ACM Notice and Landlord’s ACM Operations and Maintenance Program.  In addition, during the Term, Tenant shall comply with all disclosure, notification (with respect to its employees, contractors, subtenants and others) and other matters relating to the existence of ACM in or about the Project or the Premises imposed on employers and tenants by applicable federal state or local Laws.

ARTICLE 8 - UTILITIES AND SERVICES

8.1Building Services.  Landlord agrees to furnish or cause to be furnished, subject to the provisions of this Lease, as part of Operating Expenses, the following utilities and services, twenty-four (24)-hours per day, three hundred sixty-five (365) days per year (unless otherwise stated below), subject to the conditions and standards set forth herein:

8.1.1Subject to all Laws, Landlord shall provide HVAC to the Premises (“HVAC Service”) for the comfortable use and occupancy of the Premises (and shall operate the Project HVAC Service so as to operate on a basis substantially consistent with the operational criteria therefor set forth on Exhibit “NN” attached hereto) from 8:00 a.m. to 6:00 p.m. Monday through Friday, and 9:00 a.m. to 1:00 p.m. Saturdays (collectively, the “Business Hours”), except for the date of observation of New Year’s Day, Presidents’ Day, Martin Luther King Day Independence Day, Labor Day, Memorial Day, Thanksgiving Day, and Christmas Day (collectively, the “Holidays”); provided, however, that if Tenant desires to use HVAC during hours (“Non-Business Hours”) other than Business Hours (“After Hours HVAC”), Tenant shall provide Landlord with prior fax or email notice of Tenant’s desired After Hours HVAC use.  In all cases, Tenant shall pay to Landlord the “After Hours HVAC Rate” for all After Hours HVAC ordered or requested by Tenant or any Tenant Party, within thirty (30) days of receipt of a reasonably detailed bill therefor.  “After Hours HVAC Rate” shall mean, as of the First Increment Commencement Date, Eighty-Five Dollars ($85.00) (the “Initial After Hours HVAC Rate”) per floor, per hour of After Hours HVAC requested or ordered by Tenant; provided, however, that (a) Landlord shall have the right to increase the After Hours HVAC Rate following the First Increment Commencement Date to reflect any increase in the cost of utility service and/or the cost of labor related to the provision of After Hours HVAC experienced by Landlord from and after the First Increment Commencement Date and (b) if at any time the actual cost (without inclusion of any administrative overhead or profit or cost for wear and tear or depreciation) of utility services and/or the labor and materials related to the provision of After Hours HVAC actually experienced by Landlord shall be less than the Initial After Hours HVAC Rate, Landlord shall appropriately reduce the Initial After Hours HVAC Rate to reflect such lower cost.  Notwithstanding the foregoing, the After Hours HVAC Rate shall not include a start-up charge or minimum usage requirement (other than the fact that After Hours HVAC is provided on a full floor basis only).

8.1.2Electricity.

8.1.2.1At all times, Landlord shall provide electric current as required for Building standard lighting and fractional horsepower office machines and adequate electrical wiring and facilities for connection to the lighting fixtures and incidental use equipment of Tenant (“Electric Service”); provided, however, that notwithstanding any provision of this Lease to the contrary the total connected electrical load for all of the lighting and incidental use equipment located in the Premises shall in no case exceed eight (8) watts per rentable square foot of the Premises (the “Maximum Electrical Amount”).  Without Landlord’s consent, Tenant shall not install, or permit the installation in the Premises of any computers, word processors, electronic data processing equipment or other type of equipment or machines which will increase Tenant’s use of electric current in excess of that which Landlord is obligated to provide pursuant to this Section 8.1.2 (“Excess Electrical Requirements”).  If Tenant shall desire to utilize electric current in excess of the Maximum Electrical Amount, Tenant’s request for changes in the Maximum Electrical Amount shall be treated as a request for a Base Building Change under Section 3.7 of the Work Letter; provided, however, that Landlord may condition its consent upon Tenant’s payment in advance of Landlord’s total, direct, out-of-pocket costs of designing, permitting, installing, maintaining and providing any additional facilities reasonably and in good faith determined by Landlord to be required to satisfy such Excess Electrical Requirements (or otherwise related to the additional wear and tear on Building Systems associated therewith);

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8.1.2.2If Tenant’s actual electricity consumption for any portion of the Premises (excluding therefrom electricity consumption related to HVAC), as determined on a nondiscriminatory basis in good faith by Landlord pursuant to such measurement method or methods as Landlord shall employ from time to time (including, without limitation, the use of submeters and/or pulse meters, electrical surveys and/or engineer’s estimates (provided, however, that Landlord shall use commercially reasonable efforts to use all other commercially reasonable estimating or measurement techniques before utilizing submeters)), exceeds the Electricity Consumption Standard (defined in this Section 8.1.2.2, below) for any reasonable calculation period determined by Landlord, Tenant shall pay to Landlord, as Additional Rent, the sum of:  (a) Landlord’s actual direct cost of supplying such excess consumption, including, without limitation, all taxes thereon and (b) all of Landlord’s actual costs of monitoring and measuring such excess consumption; provided, however, that notwithstanding any provision of this Lease to the contrary, in the event that Tenant shall install and/or operate in the Premises any equipment: (X) which is equipment which has an electrical consumption higher than the electrical consumption of equipment used for general office use (including without limitation, high volume copying equipment and Tenant HVAC equipment), (Y) which, consistent with Institutional Owner Practices applied by Landlord in a non discriminatory manner, is considered high electricity consumption equipment, or (Z) which is any other equipment with the potential for consuming similar quantities of electricity (collectively, “High Consumption Equipment”), Landlord shall have the right to separately bill Tenant for and receive reimbursement (within ten (10) days of Landlord’s written demand therefor) (utilizing such electrical consumption measurement and/or estimating methods as Landlord shall in good faith adopt) for all of Landlord’s actual costs (including utility charges and taxes) relating to electricity usage by all such High Consumption Equipment.  The “Electricity Consumption Standard” shall mean the greater of: (i) the monthly electrical power consumption that would exist if Tenant consumed an average of four (4) watts per square foot of Rentable Area during Business Hours and (ii) the monthly electrical power consumption that would exist if Tenant’s average electrical power consumption during Business Hours was equal to Landlord’s reasonable estimate of 107% of an average project tenant’s (averaging all tenants in the Project) consumption of electricity during Business Hours (expressed on a watt per square foot of Rentable Area basis).

8.1.2.3If Tenant’s increased electrical requirements described in Section 8.1.2.1 will materially affect the temperature level in the Premises or any Building, Landlord’s consent may be conditioned upon Tenant’s payment of all direct, actual costs of installation and operation of any machinery or equipment necessary to restore the temperature level to that otherwise required to be provided by Landlord, including, but not limited to, the cost of modifications to the Building Systems.  Subject to the provisions of Section 16.8.2, below, Landlord shall not, in any way, be liable or responsible to Tenant for any loss or damage or expense which Tenant may incur or sustain if, for any reasons beyond Landlord’s reasonable control, either the quantity, quality or character of electric service is changed or is no longer available or suitable for Tenant’s requirements.

8.1.3Landlord shall provide reasonably sufficient amounts of cold and tepid city water to the Premises from the regular outlets in the Buildings for drinking, lavatory, toilet, kitchen and other purposes consistent with office use.

8.1.4Landlord shall provide full, nonexclusive, non-attended automatic passenger elevator service to and from the South Tower Premises during the Business Hours in a manner and at a level consistent with Institutional Owner Practices (and the standards of the Comparable Buildings) and from not less than four (4) elevators serving the South Tower Premises at all times, provided, however, that during such times as Landlord shall be servicing, repairing and/or refurbishing the elevators serving the South Tower Premises, Landlord shall only be required to provide elevator service to the South Tower Premises from not less than two (2) elevators.

8.1.5Landlord shall provide at all times and at no cost to Tenant, nonexclusive freight elevator service to and from the South Tower Premises, which service shall be subject to service of conflicting demands of the other tenants in the Building on a reasonable and nondiscriminatory basis.

8.1.6Janitorial and Cleaning.

8.1.6.1Landlord shall provide reasonable janitorial and cleaning services conforming to the specifications set forth in Exhibit “J” (or such janitorial specification as Landlord shall adopt from time to time consistent with the standards of the Comparable Buildings) and window washing in a manner and with such frequency as is consistent with window washing at the Comparable Buildings (but in no event less than three (3) times per year).  Landlord shall not be required to provide janitorial services for portions of the Premises used for preparing or consuming food or beverages, for storage, as a mailroom, or for a lavatory (other than the Common area lavatory rooms) other than normal “light” janitorial services such as emptying of waste containers, standard vacuuming, mopping and sweeping.  Landlord shall not be responsible for more extensive lunch room cleaning such as the washing of dishware or cleaning any refrigerator located therein.  In all events, Tenants shall pay to Landlord the cost of removal of Tenant’s refuse and rubbish, to the extent that the same exceeds the refuse and rubbish attendant to normal office usage.

8.1.6.2Subject to the requirements of this Section 8.1.6.2, at any time during the Term, upon thirty (30) days prior notice to Landlord, Tenant may elect to have Landlord cease providing janitorial and cleaning services to its Plaza Building Space and/or to its Premises in the South Tower.  In such event, Tenant shall retain the services of another qualified janitorial and cleaning contractor (“Substitute J&C Contractor”), to provide janitorial and cleaning services of a scope and quality not less than that then being provided by Landlord to tenants in the Project generally.  Each Substitute J&C Contractor shall be subject to Landlord’s approval, which approval shall not to be unreasonably withheld, delayed or conditioned; provided, however, that Tenant shall have no right to (and shall not) employ or engage (or otherwise contract with) as a Substitute J&C Contractor, any contractor that shall not be providing all of its services within the Project as a union contractor (and the parties hereto agree that it shall not be unreasonable for Landlord to refuse to approve any Substitute J&C Contractor proposed by Tenant that is a non-union contractor).  To the extent that Tenant so elects to provide such janitorial and cleaning services to its Premises under this Section 8.1.6.2, Tenant shall receive a credit against Tenant’s Percentage Share of Operating Expenses, for each Expense Year during which Tenant (for one of more calendar months) provides janitorial and cleaning services to the Premises under this Section 8.1.6.2, equal to the difference between: (i) the Actual Costs that would have been

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incurred by Landlord in providing janitorial and cleaning services to the Premises and at the Project during such Expense Year had Tenant not so elected to provide such janitorial and cleaning services to the Premises and (ii) the Actual Costs that were actually incurred by Landlord in providing janitorial and cleaning services at the Project during such Expense Year.

8.1.7Landlord shall provide reasonable access control services for the South Tower and in the J-2 Parking Annex seven (7) days per week, twenty-four (24) hours per day, in a manner consistent with Comparable Buildings.  Notwithstanding the foregoing, Landlord shall in no case be liable for personal injury or property damage for any error with regard to the admission to or exclusion of any person from any Building or the Project.  Tenant may, at its own cost and expense, install its own security system (including, without limitation, any card key access system regulating elevator assisted entry into the Premises) (“Tenant’s Security System”) in the Premises (and the elevators serving the Premises) pursuant to the terms of Article 9, below and Landlord shall reasonably cooperate with Tenant, at no charge to Tenant, to allow Tenant, at Tenant’s sole cost and expense, to have Tenant’s Security System interface with Landlord’s security system; provided, however, that Tenant shall coordinate the installation and operation of Tenant’s Security System with Landlord to assure that Tenant’s Security System is compatible with Landlord’s security system and/or with the Building Systems, and to the extent that Tenant’s Security System is not compatible with Landlord’s security system and/or with the Building Systems, Tenant shall not be entitled to have the Tenant’s Security System interface with Landlord’s security system, but so long as and to the extent that the same shall; (i) have no negative impacts on the operation of Landlord’s security system or fire/life safety system (or other Building Systems) or on the operation and management of the Project and (ii) shall fully comply with all Laws, Tenant may have such aspects of Tenant’s Security System operate independently from Landlord’s security system.  Tenant shall be solely responsible, at Tenant’s sole cost and expense, for the monitoring, operation, maintenance, repair and removal at the expiration or sooner termination of this Lease of Tenant’s Security System.  Subject to availability (which shall be consistent with the standards of the Comparable Buildings) and upon request from Tenant, between the hours of 8:30 p.m. and 5:30 a.m.  Landlord’s access control personnel will accompany any employee or visitor of Tenant from the South Tower to the vehicle of such employee or visitor at the level of the J-2 Parking Annex.

8.1.8At all times during the Term, Landlord shall provide to Tenant free of charge; (i) a reasonable quantity of riser space (not inclusive of new conduit, such that Tenant may elect to use Landlord’s existing conduit or may elect to have Landlord remove existing conduit so as to allow Tenant to install new conduit at Tenant’s sole expense) in the riser (“Riser”) for the South Tower and the Plaza Building (free and clear of other claims) for Tenant’s use for Tenant’s telecommunications and data lines (including Tenant’s “T-1” data lines, voice lines and other fiber lines) and (ii) the use of copper wire and other telecommunications, data and voice lines (if any) presently existing in the Riser (“Existing Lines”); provided, however, that: (a) Tenant shall pay all third-party costs, fees, expenses or charges in connection with the use of Existing Lines which are not owned by Landlord and (b) Tenant shall pay (or cause its service provider to pay) to Landlord all nondiscriminatory Riser access fees required to be charged by Landlord (by the California Public Utilities Commission or any successor thereto) in connection with installation and placement by a telecommunications or data service provider not currently providing such services in the South Tower and/or the Plaza Building of new telecommunications and data lines installed or placed at Tenant’s direction in a separate conduit placed in the Riser.  Tenant acknowledges that Landlord has made no representations or warranties as to the adequacy or reliability (for any purpose) of the Existing Lines or the Riser.

8.1.9Whatever Tenant requires utilities and/or services (in excess of that which Landlord is otherwise obligated to provide as set forth in this Lease) which are generally made available to tenants by the landlords of the Comparable Buildings (and is generally made available by Landlord to its tenants in the Project) (which utilities and services or construction management services Landlord and Tenant stipulate shall not include architectural, design, engineering or general contracting services or construction management services), Landlord shall provide such excess services and utilities at a cost which is equal to the incremental out of pocket costs paid to third parties without a markup for administration, profit, overhead or depreciation (“Actual Costs”); provided, however, that the foregoing shall not apply to the After Hours HVAC Rate or any other service or utility for which an express cost (or cost formula) is provided in this Lease.

Any amounts which Tenant is required to pay to Landlord pursuant to this Section 8.1 shall be payable within thirty (30) days following written demand by Landlord and shall constitute Additional Rent.  From time to time during the Term, Landlord shall have the right to modify the services provided to Tenant hereunder (excluding, however, the standards for HVAC service, HVAC specifications, electric service, the Maximum Electrical Amount and standards specified in Section 8.1.7, above, none of which shall be modified, other than as required by applicable Laws); provided such modified services are consistent with Institutional Owner Practices for ground floor bank branch space in the Comparable Buildings (to the extent applicable to the Plaza Building Space) and for general office use (to the extent applicable to the South Tower Premises).

8.2Interruption of Services.  Landlord shall not be liable for any failure to furnish, stoppage of, interruption of, or other problem related to furnishing any of the services or utilities described in Section 8.1 when such failure is caused by accident, breakage, repairs, strikes, lockouts, labor disputes, labor disturbances, governmental regulation, civil disturbances, acts of war, moratorium or other governmental action, or any other cause beyond Landlord’s reasonable control, and, in such event, Tenant shall not be entitled to any damages nor shall any failure or interruption abate or suspend Tenant’s obligation to pay Base Rent and Additional Rent required under this Lease (except as specifically set forth in this Lease) or constitute or be construed as a constructive or other eviction of Tenant.  In the event any governmental or quasi-governmental authority or public utility promulgates or revises any Law or issues mandatory controls relating to the use or conservation of energy, water, gas, light or electricity, the reduction of automobile or other emissions, or the provision of any other utility or service, Landlord may take any reasonably appropriate action to comply with such Law or mandatory control without affecting Tenant’s obligations hereunder.  Notwithstanding any provision of this Agreement to the contrary, under no circumstances shall Landlord be responsible for, and Tenant waives any and all of its rights and remedies with respect to any death, bodily injury or property damage or loss suffered by Tenant (or any agent, employee, invitee, visitor or customer of Tenant) on account of any criminal activity occurring in or around the Premises or any portion of the Project, without regard to the adequacy or sufficiency of any security or access control services or system provided or implemented by Landlord from time to time and notwithstanding any negligence, gross negligence or other form of negligence on the part of Landlord or any Agent, employee or contractor thereof.  Landlord acknowledges that the foregoing waiver shall not waive the rights of parties other than Tenant; provided, however, that Tenant acknowledges and agrees that Landlord has not undertaken

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any duty whatsoever (hereunder or otherwise) with respect to such other parties.  Landlord makes no representation with respect to the adequacy or fitness of the Project’s HVAC system to maintain temperatures as may be required for the operation of any computer, data processing or other special equipment.

ARTICLE 9 - - MAINTENANCE AND REPAIRS

9.1Tenant Repairs.  Tenant shall, at Tenant’s sole cost and expense, pursuant to the terms of this Lease, including without limitation, Article 10 hereof, keep the Improvements in the Premises, and all other Alterations, tenant fixtures and furnishings in the Premises (except the Base and Building) and all Other Installation Items (defined in this Section 9.1. below), in good order, repair and condition at all times during the Lease Term, subject to reasonable wear and tear, and (subject to Article 12, below) damage by casualty event or the negligence or misconduct of Landlord or any Landlord Party.  Except as specifically set forth in Section 9.3, below, Tenant hereby waives the right to make repairs and any and all rights under and benefits of subsection 1 of Section 1932 and Sections 1941 and 1942 of the California Civil Code or under any similar Law now or hereafter in effect.  Otherwise, except as provided in this Lease, there shall be no abatement of Rent, nor shall there be any liability of Landlord, by reason of any injury to, or damage suffered by Tenant, including without limitation, any incovenience to, or interference with, Tenant’s business or operations arising from the making of, or failure to make, any maintenance or repairs, alterations or improvements in or to any portion of the Buildings or the Project.  No provision of this Lease shall be construed as obligating Landlord to perform any repairs, Alterations or decorations to the Premises or the Project except as otherwise expressly agreed to be performed by Landlord pursuant to the provisions of this Lease.  For purposes of this Lease, “Other Installations Items” means any installation, equipment, tangible personal property or fixture owned or erected by Tenant outside the Premises (such as signs, security systems ATMs, generators, etc.) pursuant to the provisions of this Lease.

9.2Landlord Repairs.  Landlord shall operate and maintain in a first class manner in accordance with Institutional Owner Practices and otherwise shall comply with all Laws (if and to the extent Landlord is required to do so under the provisions of Section 7.2.1 above) applicable to: (i) the structural portions of the Premises, Buildings and Project, including the foundation, floor/ceiling slabs, roof, curtain wall, exterior glass and mullions, columns, beams, shafts (including elevator shafts), stairs (except internal stairways installed within the Premises), parking areas, landscaping, fountains, elevator cabs, plazas, Common Areas, art work and sculptures, public men’s and women’s washrooms (collectively, the “Building Structure”), (ii) the Building Systems, and (iii) the Common Areas (including, without limitation, the Parking Facilities).

9.3Tenant’s Right to Make Repairs.  Notwithstanding the provisions of Section 9.1, above, in the event that Tenant provides notice to Landlord of an event or circumstance which requires the action of Landlord with respect to repair and/or maintenance required:  (i) pursuant to Section 9.2 of this Lease, (ii) in connection with Landlord’s obligations to provide utilities or services in accordance with the terms of Section 8.1. of this Lease, or (iii) in connection with Landlord’s compliance with law obligations under Section 7.2.1 of this Lease, and such required action relates to any full floor of the South Tower Premises or all of the Plaza Building Space, and Landlord fails to commence to provide the required action within a reasonable period of time, given the circumstances, after the receipt of such notice, but not in any event later than twenty-one (21) days after receipt of such notice (or within two (2) business days in the case of an Emergency (defined in this Section 9.3, below)), Tenant may proceed to take the required action upon delivery of an additional ten (10) business days notice (or one (1) business day notice in the event of an Emergency) to Landlord specifying that Tenant is taking such required action, and if such action was required under the terms of this Lease to be taken by Landlord, then Tenant shall be entitled to prompt reimbursement by Landlord of Tenant’s reasonable costs and expenses in taking such action, together with interest on such amount at the Interest Rate, from the date such costs are expended by Tenant to the date of payment of such amount by Landlord.  In the event Tenant takes such action, and such work will affect the Building Systems, or the structural integrity of the South Tower or the Plaza Building, Tenant shall use only those contractors used by Landlord in the Project for work on the Building Systems or Building Structure unless (after not less than five (5) business days written notice to Landlord) such contractors are unwilling or unable to perform such work at a commercially reasonable rate, in which event Tenant may utilize the services of any other qualified contractor which normally and regularly performs similar work in the Comparable Buildings.  Further, if Landlord does not deliver a detailed written objection to Tenant, within thirty (30) days after Landlord’s receipt of an invoice from Tenant of its costs of taking action, which Tenant claims should have been taken by Landlord, and if such invoice from Tenant sets forth a reasonably particularized breakdown of its costs and expenses in connection with taking such action on behalf of Landlord, then Tenant shall be entitled to deduct from Rent payable by Tenant under this Lease, the amount set forth in such invoice, together with interest at the Interest Rate on such amount, from the date such costs are expended by Tenant through the date of such deduction from Rent.  If, however, Landlord delivers to Tenant within thirty (30) days after Landlord’s receipt of Tenant’s invoice, a written objection to the payment of such invoice, setting forth with reasonable particularity Landlord’s reasons for its claim that such action did not have to be taken by Landlord pursuant to the terms of this Lease or that the charges are excessive (in which case Landlord shall pay the amount it contends would not have been excessive), then Tenant shall not be entitled to such deduction from Rent, but as Tenant’s sole remedy, Tenant may submit such dispute to arbitration in accordance with the terms of Article 14, below.  If Tenant prevails in the Arbitration and receives an award in its favor (with all awards to the prevailing party to include an award of attorneys’ fees), Tenant shall be permitted to deduct the amounts of the award, together with interest at the Interest Rate on its then unpaid repair costs, computed from the date of expenditure to the date of offset or payment from Rents next due and owing under this Lease.  As used in this Section 9.3, an “Emergency” shall be a situation in which there is an immediate and material threat to life, safety, or to operation of Tenant’s business in the Premises.

ARTICLE 10 - - ALTERATIONS, ADDITIONS AND

IMPROVEMENTS

10.1Landlord’s Work.   Except as otherwise expressly set forth in this Lease, and except with respect to Landlord’s repair and maintenance obligations under this Lease, Landlord’s sole construction obligation under this Lease is set forth in the Work Letter attached hereto as Exhibit “C”.

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10.2Landlord’s Consent; Conditions.  Tenant may, without the need to obtain the consent or approval of Landlord, make any improvements, alterations, additions or changes to the South Tower Premises or the Plaza Building Space (collectively, the “Alterations”) desired by Tenant which do not require a Permit (as defined in Section 3.5 of the Work Letter) and which are minor or purely cosmetic Alterations, such as painting, installation or replacement of floor and wall coverings, hanging of pictures, cabinets and the like (“Finish Work”), by providing Landlord with written notice not less than ten (10) days prior to the proposed commencement thereof.  Except for such Finish Work, Tenant shall not make any Alterations to the South Tower Premises or the Plaza Building Space (collectively, “Consent Alterations”), without first procuring the prior written consent of Landlord to such Alterations, which consent shall be requested by Tenant not less than ten (10) days prior to the commencement thereof, and which consent shall not be withheld or conditioned by Landlord for any reason which is not a Design Problem (defined in this Section 10.2, below).  For purposes of this Lease, a “Design Problem” shall be deemed to exist if any portion of any Alterations (including, but not limited to the Tenant Improvements (as defined in the Preamble to the Work Letter)); (i) affects the exterior appearance of the Project or of any Building in the Project (except with respect to signage and antennae which shall be subject to separate criteria under this Lease), (ii) affects the exterior appearance of any of the Common Areas or any views from any of the Common Areas (but not including views from; (A) the Common Areas through the exterior windows of the Plaza Building Space of customary, temporary, non-electrified retail bank signage in the interior of the Plaza Building Space that is comparable to that located in retail bank branch offices of other first-class banks located in the ground floors of Comparable Buildings in the downtown Los Angeles Central Business District or (B) the interior of South Tower elevator cabs, or the views from Common Area corridors on multi-tenant South Tower floors into the Premises), (iii) materially and adversely affects the Building Systems or the Building Structure, (iv) requires Landlord to provide additional services (above and beyond those normally provided) to the Premises or to any other portion of the Project, or otherwise creates special maintenance problems at the Project (but, in each case, only to the extent Tenant is unwilling to agree (in a written agreement reasonably satisfactory to Landlord) to pay all incremental costs incurred by Landlord as a result thereof), (v) only in the context of Base Building Changes (as defined in Section 3.7 of the Work Letter) outside of the Premises, could result in a higher frequency of (or more severe) injuries to persons and/or damage to property, (vi) fails to comply with any Laws, or (vii) unreasonably interferes with the normal or customary business office operations of any other business office tenant or occupant of the South Tower or North Tower or with the normal or customary operations of any other tenant or occupant of the Plaza Building.  In the event Tenant proposes to make any Consent Alterations, shall include the plans and specifications for such proposed Alterations.  Landlord shall grant or withhold its consent to any Consent Alterations so requested within fifteen (15) business days of receipt of Tenant’s notice (provided that, if Landlord grants its consent to any such Consent Alteration, Landlord, concurrently with such grant of its consent shall notify Tenant whether Landlord requires (but only to the extent that Landlord has the right, pursuant to Section 10.6.2, below, to require Tenant to remove such Consent Alterations) Tenant, on or before the expiration or earlier termination of this Lease, to remove such Consent Alterations, at Tenant’s sole cost and expense, and otherwise in accordance with the provisions of Section 10.6).  Landlord’s failure to respond within such fifteen (15) business day period shall conclusively be deemed to evidence Landlord’s approval with respect to such Consent Alteration if Landlord shall continue to fail to respond after three (3) business days’ additional written notice delivered by Tenant at any time after the twelfth (12th) business day following Tenant’s original submission for such approval.  For purposes of this Lease, “Building Systems” shall mean all basic electrical, mechanical, heating, ventilation and air conditioning (“HVAC”) systems, security, plumbing, fire/life safety, telecommunications, elevator, escalator and sprinkling systems and equipment serving the Buildings and/or the Project, other than any supplemental systems or equipment over and above the Buildings’ (or the Project’s) primary electrical, mechanical, HVAC, telecommunications, plumbing, life safety, elevator and sprinklering systems, which may be installed by or at Tenants’ request in the Premises to service Tenant’s special needs.  All Alterations shall be subject to; (a) Landlord’s prior written approval (pursuant to a nondiscriminatory standard consistent with Institutional Owner Practices) of the time or times when the Alterations are to be performed; (b) Landlord’s prior written approval (pursuant to a standard consistent with Institutional Owner Practices) of the contractors and subcontractors performing work in connection with the Alterations; (c) Tenant’s receipt of all necessary permits and approvals from all governmental authorities having jurisdiction over the Premises prior to the construction of the Alterations; (d) Tenant’s written notice of whether the Alterations include the Handling of any Hazardous Materials, pursuant to Section 7.3; (e) Tenant’s delivery to Landlord of such insurance as Landlord shall customarily require, provided that the same shall be consistent with Institutional Owner Practices; (f) Tenant’s payment to Landlord, within thirty (30) days of Landlord’s delivery of a written invoice therefore, of all out-of-pocket costs and expenses actually incurred in good faith by Landlord in connection with any matter which requires review by or consultation with third party consultants; and (g) Tenant’s (and Tenant’s contractors’) compliance with such nondiscriminatory construction rules and regulations and building standards as Landlord may promulgate from time to time (and which are consistent with Institutional Owner Practices), including, but not limited to those Contractor Rules and Regulations attached to the Work Letter as Schedule “5”, as such Contractor Rules and Regulations may be amended from time to time.

10.3Performance of Alterations Work.  Landlord may impose as a condition to its approval of any proposed Consent Alteration, the requirement that, subject to the provisions of Section 10.6.2, upon Landlord’s request, Tenant shall, at Tenant’s sole cost and expense, remove such Consent Alteration upon the expiration of or any early termination of the Term.  Subject to the provisions of Section 7.2.1, Tenant shall construct all Alterations in a first-class, good and workmanlike manner, in conformance with any and all applicable Laws and, where the same is required pursuant to applicable Laws with respect to such Alteration, pursuant to and in conformance with a valid building permit issued by the City of Los Angeles.  Subject to the provisions of Section 7.2.1 and the provisions of Section 2 of Schedules 1-B and 1-D of the Work Letter, in the event Tenant performs any Alterations in the Premises which require or give rise to governmentally required changes to the Base Building, then Landlord shall, at Tenant’s sole cost and expense (to the extent of Landlord’s actual cost in connection therewith), promptly make such changes to the Base Building; provided, however, that in such case, at Tenant’s request, Landlord shall use commercially reasonable efforts to expedite the performance of any such changes so as to not delay any efforts by Tenant to quickly commence and complete such Alterations.  In performing the work of any Alterations, Tenant shall have the work performed in such manner so as not to unreasonably obstruct or interfere with access to any portion of the Project, by any other tenant or occupant of the Project, and so as not to unreasonably obstruct or disturb the business of other tenants or occupants in the Project.  Provided Landlord enforces such requirement on non-discriminatory basis among all tenants in the Project (and itself acts consistently with such requirement), Tenant shall not use (and upon notice from Landlord shall cease using) contractors, services, workmen, labor, materials or equipment that, in Landlord’s reasonable judgment, would disturb labor harmony with the workforce or trades engaged in performing other work,

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labor or services in or about the Project.  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 except as to Finish Work, within a reasonable period following completion of particular Alterations. Tenant shall deliver to the Project management office a copy of the “as built” drawings of the Alterations with respect to those portions of the Premises affected (or at Tenant’s election, a copy of Tenant’s plans or drawings for such Alterations, with field changes shown thereon).  All work shall be performed by Tenant at Tenant’s sole cost and expense and shall be prosecuted to completion in a diligent, first-class manner and so as not to unreasonably interfere with any other tenants or occupants of the Project.  Subject to the provisions of Sections 2.5 and 3.1.3 of the Work Letter (which shall apply to all Alterations) without Landlord’s prior written consent, which shall not be unreasonably (based upon Institutional Owner Practices) withheld, Tenant shall not use any portion of the Common Areas (or any area of the Project outside of the Premises) in connection with the making of any Alterations, and Tenant shall not modify or alter any improvements or components of the Project outside of the Premises.  If Tenant (in its sole and absolute discretion) orders any work directly from Landlord, Tenant shall pay to Landlord a percentage of the cost of such work (such percentage to be established on a uniform basis for the Buildings and/or Project) sufficient to compensate Landlord for all overhead, general conditions, fees and other costs and expenses arising from Landlord’s involvement with such work.

10.4Construction Insurance.  Prior to the commencement of any Alterations, Tenant shall provide Landlord with reasonable evidence that Tenant carries “Builder’s All Risk” (or comparable) insurance in a commercially reasonable amount covering the construction of such Alterations to the extent customarily required given the scope of such Alterations, it being understood and agreed that all such Alterations shall be insured by Tenant pursuant to Article 11 of this Lease immediately upon completion thereof.  In addition, Tenant shall cause to be carried by its contractors and subcontractors Workers’ Compensation insurance (if and to the extent required to be so carried by such contractors and subcontractors under applicable laws) in connection with the construction of any Alterations.

10.5Liens.  Tenant shall pay when due all costs for work performed and materials supplied to the Premises.  If the Premises, the Buildings and the Project are levied or otherwise encumbered by any liens, stop notices and/or violation notices (collectively, “Liens and Notices”) relating to any Alterations or any other work performed for, materials furnished to or obligations incurred by, Tenant (collectively, “Tenant Responsible Work”), to the extent such Liens and Notices are not the result of the misconduct of Landlord (or any agent of Landlord), then Tenant shall indemnify, defend and hold harmless Landlord, the Premises and the Project from and against any and all claims, actions, losses, damages, liabilities, obligations, fines, penalties, interest, costs and expenses, including, without limitation, attorneys fees, court costs, and litigation consultant fees and expenses (whether incurred prior to, during or after, trail and any appeal) (collectively, “Claims, Damages and Expenses”) asserted or incurred in connection with, arising out of, or related to any and all such Liens and Notices.  Tenant shall give Landlord not less than seven (7) business days prior written notice before commencing any Alterations in or about the Premises to permit Landlord to post appropriate notices of non-responsibility.  Tenant shall satisfy or otherwise discharge or bond over all liens, stop notices or other claims or encumbrances related to Tenant Responsible Work (to the extent the same are not the result of the misconduct of Landlord or its agents) within ten (10) days after Landlord notifies Tenant in writing that any such lien, stop notice, claim or encumbrance has been filed.  If Tenant fails to pay and remove or bond over such lien, claim or encumbrance within such ten (10) day period, Landlord, at its election, may (but shall not be obligated to) pay and satisfy the same, and in such event the sums so paid by Landlord, with interest thereon from the date of payment at the Interest Rate, shall be deemed to be Additional Rent due and payable by Tenant within ten (10) days following demand therefor.

10.6Surrender.

10.6.1Subject to the provisions of this Lease, all Alterations, improvements, fixtures, equipment and/or appurtenances which may be affixed to the Premises, from time, to time, shall be at the sole cost and expense of Tenant and shall be and become the property of Landlord at the expiration or sooner termination of this Lease, except that Tenant shall have the right to remove any such Alterations, improvements, fixtures and/or equipment which are not permanently installed in the Premises, provided that Tenant fully repairs any damage to the Premises, the Buildings and/or the Project caused by such removal.  Furthermore, (i) subject to the provisions of this Lease, if Landlord, as a condition to Landlord’s consent to any Consent Alteration or to any initial Tenant Improvement (as defined in the Work letter), shall notify Tenant that Landlord requires Tenant to remove such Alterations upon the expiration of or early termination of the Term, Tenant shall, at Tenant’s sole cost and expense, remove such Consent Alteration or Initial Tenant Improvement and (ii) on or before the expiration or earlier termination of this Lease, Tenant shall (except as provided in Section 10.6.2, below) remove each improvement or feature installed by or on behalf of Tenant in the Premises specifically required to be so removed on or before the expiration or sooner termination of this Lease by the express provisions of this Lease (including without limitation Tenant’s Security System, Other Installations Items, and those other improvements or features which are Alterations which do not meet all of the requirements of Section 10.6.2, below) (“Express Removal Items”), and in all such cases, Tenant shall repair any damage to the Premises, the Buildings and/or the Project caused by such removal and return the affected portion of the Premises, the Buildings and/or the Project to:  (a) substantially the same condition as existed prior to  the installation of such Consent Alterations or Tenant Improvements, reasonable wear and tear excepted or (b) building standard condition.  All business and trade fixtures, machinery and equipment, furniture, movable partitions and items of personal property owned by Tenant or installed by Tenant at its expense in the Premises shall be and shall remain the property of Tenant, and upon the expiration or earlier termination of this Lease, Tenant shall, at its sole cost and expense, remove all such items from the Premises and the Project and shall repair any damage to the Premises, the Buildings and/or the Project caused by such removal.  If Tenant fails to remove any such items upon the expiration or earlier termination of this Lease and such failure continues for five (5) business days after receipt of notice thereof from Landlord, Tenant shall be deemed to have abandoned the same, in which case Landlord may store the same at Tenant’s sole cost and expense (and Tenant shall pay Landlord the cost thereof within ten (10) days after Landlord’s demand therefor), or may appropriate the same for itself, and/or sell the same in its discretion, with no liability to Tenant.

10.6.2.Notwithstanding any provision of this Lease to the contrary, except for Other Installations Items (which Tenant shall always be required to remove at Tenant’s sole cost and expense unless Landlord shall specifically notify Tenant to the contrary in writing), in no case and at no time (including, without limitation, upon the expiration or the early termination of this Lease) shall Landlord have the right to require Tenant to remove or

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restore (and Tenant shall be entitled to leave the same in place in the Premises at the expiration or early termination of this Lease) any Alteration which both: (i) constitutes an improvement which is normal and customary for general business use in a first-class office building, and (ii) is not an internal stairway, fountain, waterfall, aquarium, raised computer flooring or other non-typical tenant improvement.

ARTICLE 11 - - INDEMNIFICATION AND INSURANCE

11.1Waiver of Liability and Indemnification.

11.1.1Waiver.  Tenant hereby assumes all risk of damage to personal property or injury to persons in or upon the Premises or the Storage Premises (defined in Article 29, below), from any cause whatsoever and agrees that Landlord, its constituent direct or indirect partners, managers, members, and/or interest holders and their respective officers, directors, managers, agents, servants, and employees (collectively, the “Landlord Parties”) 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 to the extent caused by the negligence or willful misconduct of Landlord.

11.1.2Indemnity.

11.1.2.1Tenant Indemnity.  Tenant shall indemnify, defend, protect, and hold harmless Landlord and the Landlord Parties from any and all Claims, Damages and Expenses asserted or incurred in connection with or arising from or relating to: (1) any cause in or on the Premises or Storage Premises during the Lease Term or any holdover period (to the extent covered by Tenant’s insurance policies carried pursuant to the terms of Section 11.2, below), (2) any negligent acts or omissions or willful misconduct of Tenant or any person claiming by, through or under Tenant, its partners, and their respective officers, agents, servants or employees of Tenant or any such person (collectively, the “Tenant Parties”), in or on or about the Premises, the Storage Premises, the Common Areas, or the Project, during the Lease Term, any construction period or any holdover period, or any other period of Tenant’s occupancy of the Premises, or (3) Tenant’s Telecommunications Equipment (defined in Section 30.31, below) or Other Installations Items, provided that, except as set forth below, the terms of the foregoing indemnity shall not apply to the extent such Claims, Damages and Expenses arise from the negligent acts (except with respect to Tenant’s Telecommunications Equipment or Other Installations Items) or willful misconduct of the Landlord Parties in connection with the Landlord Parties’ activities in, on or about the Project, including the Premises. Notwithstanding the foregoing, because Tenant must carry property insurance pursuant to Section 11.2.2, below to cover its personal property and all office furniture, trade fixtures, office equipment and merchandise within the Premises and the Storage Premises and the Tenant Improvements and Alterations within the Premises, Tenant hereby agrees to protect, defend, indemnify and hold Landlord harmless from any Claims, Damages and Expenses with respect to any such property (and the Tenant Improvements and Alterations) within the Premises, to the extent such Claims Damages and Expenses are covered by Tenant’s property insurance, even if resulting from the negligence or willful misconduct of any of Landlord or the Landlord Parties.

11.1.2.2Landlord Indemnity.  Landlord shall indemnify, defend, protect, and hold harmless Tenant and the Tenant Parties from any Claims, Damages and Expenses asserted or incurred in connection with, arising from or relating to the negligent acts or omissions or willful misconduct of any of the Landlord Parties in, on, or about the Premises or Storage Premises (subject to the terms of the last sentence of Section 11.1.2, above), the Common Areas or the Project, either prior to, during, or after the expiration of the Lease Term, provided that, except as set forth below, the terms of the foregoing indemnity shall not apply to the extent such Claims, Damages or Expenses arise from the negligence or willful misconduct of any of the Tenant Parties in connection with the Tenant Parties’ activities in, on, or about the Project. Notwithstanding the foregoing indemnity shall not apply to the extent such Claims, Damages or Expenses arise from the negligence or willful misconduct of any of the Tenant Parties in connection with the Tenant Parties’ activities in, on, or about the Project. Notwithstanding the foregoing, because Landlord is required to maintain pursuant to the terms of Section 11.3, below, property damage insurance on the Building and Project, Landlord hereby agrees to protect, defend, indemnify and hold Tenant harmless from any Claims, Damages and Expenses with respect to the Project (including the Base Building) and the Building Systems (other than tenant improvements or any form of personal property) to the extent such Claims, Damages and Expenses are covered by Landlord’s property damage insurance, even if resulting from the negligent acts or willful misconduct of any of Tenant or the Tenant Parties.

11.1.3The provisions of this Section 11.1 shall survive the expiration or sooner termination of this Lease with respect to any claims or liability arising in connection with any event occurring prior to such expiration or termination.

11.2Tenant’s Insurance.  Tenant shall maintain the following coverages in the following amounts:

11.2.1Standard ISO Commercial General Liability Insurance (in a form customarily available from time to time) covering the insured (and all additional insureds) against claims of bodily injury, personal injury and property damage (including loss of use thereof) arising out of Tenant’s operations, and covering Tenant’s contractual obligations under this Lease owed to Landlord with respect to tort liability for bodily injury or property damage (to the extent the same is customarily covered under a then standard commercial general liability insurance policy) (collectively, a “Customary CGL Policy”) hereunder, for limits of liability not less than: *

*

11.2.2Physical Damage Insurance covering: (i) all office furniture, business and trade fixtures, office equipment, free-standing cabinet work, movable partitions, merchandise and all other items of Tenant’s property on the Premises installed by, for, or at the expense of Tenant, and (ii) all improvements, alterations (including, but not limited to, any Alterations and the Tenant Improvements) and additions to the Premises (other than the Base Building) (collectively, the “Improvements”). Such insurance shall be written on an “all risks” of physical loss or damage basis, for the full replacement cost value (subject to reasonable deductible amounts) new without deduction for depreciation of the covered items and in amounts that meet any co-insurance clauses of the policies of insurance and shall include coverage for damage or other loss caused by fire or other peril including, but not limited to, vandalism and malicious mischief, theft, water damage of any type, including sprinkler leakage, bursting or stoppage of pipes, and explosion.

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11.2.3Worker’s Compensation and Employer’s Liability or other similar insurance to the extent required of Tenant pursuant to all applicable state and local statutes and regulations. Provided that each such requirement is commonly imposed on comparable tenants in Comparable Buildings and is non-discriminatorily applied to all tenants in the Project, Tenant shall, at Tenant’s expense, comply with all reasonable insurance company requirements pertaining to the use the Premises, shall comply with all rules, orders, regulations or requirements of the American Insurance Association (formerly the National Board of Fire Underwriters) and with any similar body. If Tenant’s nongeneral office conduct or use of the Premises causes any increase in the premium for such insurance policies then Tenant shall reimburse Landlord for any such increase or discontinue such conduct.

11.2.4Tenant Self-Insurance. Tenant shall have the right to elect to self-insure all or any portion of its insurance obligations under this Lease (other than its obligations under Section 11.2.3, above), on the condition that, and so long as Tenant: [ILLEGIBLE] satisfaction that Tenant initially has a net worth in excess of * and holds cash reserves in excess of five (5) times the self-insurance amount (and all of Tenant’s other self-insurance requirements), (b) shall have executed and delivered to Landlord Landlord’s form of Self-Insurance Undertaking, (c) shall have delivered to Landlord annually (on the first day of each Expense Year) annual, audited financial statements and a certificate certifying to Landlord that, as of such date, Tenant has a net worth in excess of * holds cash reserves in excess of five (5) times the self-insurance amount (and all of Tenant’s other self-insurance requirements), and (d) shall, at the request of Landlord following the announcement of any material event relating  to Tenant, have delivered to Landlord within thirty (30) days of Landlord’s request therefor, evidence reasonably satisfactory to Landlord and a certificate certifying to Landlord that, as of the date of such certificate, Tenant has a net worth in excess of * cash reserves in excess of five (5) times the self-insurance amount (and all of Tenant’s other self-insurance requirements).

11.3Landlord’s Insurance.  Landlord shall carry commercial general liability insurance with respect to the Project during the Lease Term, and shall further insure the Project during the Lease Term against loss or damage due to fire and other casualties covered within the classification of fire and extended coverage, vandalism coverage and malicious mischief, sprinkler leakage, water damages and special extended coverage (“Landlord’s Insurance”). Such coverage shall be in such amounts, from such companies, and on such other terms and conditions, as Landlord may from time to time reasonably determine; provided, however, that in all cases Landlord shall be permitted to utilize any self-insurance and/or self-insured retention program as shall be consistent with Institutional Owner Practices given the risks involved and the financial and/or credit backing involved. Additionally, at the option of Landlord, such insurance coverage may include and the risks of earthquakes, terrorism and/or flood damage and additional hazards, a rental loss endorsement and one or more loss payee endorsements in favor of the holders of any mortgages or deeds of trust encumbering the interest of Landlord in the Project, or any portion thereof, or the ground lessors or underlying lessors of the Project, or any portion thereof or any other form of insurance or endorsement required to be carried under the requirements of any institutional publicly held or pension fund which holds directly or indirectly a fifty percent (50%) or more membership or other interest in Landlord (“Institutional Landlord Member”). Notwithstanding the foregoing provisions of this Section 11.3, the coverage and amounts of insurance carried by Landlord in connection with the Project shall, at a minimum, be comparable to the coverage and amounts of insurance which are carried by reasonably prudent landlords of Comparable Buildings, provided that in no event shall Landlord be required to carry earthquake or terrorism insurance.

11.4Form of Policies.  Subject to the express provisions of the Lease, the minimum limits of policies of insurance required of Tenant under this Lease shall in no event limit the liability of Tenant under this Lease. Such insurance shall (other than that described in Sections 11.2.2 and 11.2.3): (i) name as an additional insured Landlord, and any other party the Landlord so specifies, including Landlord’s managing agent, if any; (ii) be issued by an [ILLEGIBLE] thereunder and provide that any insurance carried by Landlord is excess and is non-contributing with any insurance requirement of Tenant; (v) be in form content reasonably acceptable to Landlord; and (vi) provide that said insurer shall give not less than thirty (30) days prior written notice to Landlord and any mortgagee of Landlord of any cancellation or reduction in the amount of coverage. Tenant shall deliver said policy or policies or certificates thereof to Landlord on or before the First Increment Commencement Date and at least thirty (30) days before the expiration dates thereof. In the event Tenant shall fail to procure such insurance, or to deliver such policies or certificate, within two (2) business days after written notice of such failure to Tenant, Landlord may, at its option, procure such policies on the account of Tenant, and the cost thereof shall be paid by Tenant to Landlord within thirty (30) days after delivery to Tenant of bills therefor.

11.5Subrogation.  Landlord and Tenant intend that their respective property damage loss risks shall be borne by their respective insurance carriers to the extent above provided, and Landlord and Tenant hereby agree to look solely to, and seek recovery only from, their respective property damage insurance carriers in the event of a property loss to the extent that such coverage is agreed to be insured hereunder. As long as such waivers of subrogation are reasonably available, the parties each hereby waive all rights and claims against each other for such losses, waive all rights of subrogation of their respective property damage insurers, provided such waiver of subrogation shall not affect the right of the insured to recover thereunder. The parties agree that their respective insurance policies are now, or shall be, endorsed such that the waiver of subrogation shall not affect the right of the insured to recover thereunder, so long as no material additional premium is charged therefor. If either party fails to carry the amounts and types of insurance required to be carried by it pursuant to this Article 11, in addition to any remedies the other party may have under this Lease, such failure shall be deemed to be a covenant and agreement by such party to self-insure with respect to the type and amount of insurance which such party so failed to carry, with full waiver of subrogation with respect thereto.

11.6Additional Insurance Obligations.  Tenant shall carry and maintain during the entire Term, at Tenant’s sole cost and expense, such increased amounts of the insurance required to be carried by Tenant pursuant to this Article 11 and such other types of insurance coverage in such amounts covering the Premises and Tenant’s operations therein, as may be non-discriminatorily requested by Landlord in a manner consistent with Institutional Owner Practices; provided, however, that notwithstanding any provision of the foregoing to the contrary, (i) Landlord shall not be permitted to increase the scope or amount of insurance to be carried by Tenant hereunder more than once

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during any one (1) year period, and (ii) any new requirements imposed by Landlord shall be required by Landlord’s first lender or be consistent with respect to the insurance required of comparably sized tenants by the owners of the Comparable Buildings.

11.7Failure to Insure.  If Tenant fails to maintain any insurance which Tenant is required to maintain pursuant to this Article 11, Tenant shall be liable to Landlord for any loss or cost resulting from such failure to maintain. Landlord shall have the right, in its sole discretion, to procure and maintain such insurance which Tenant is required to maintain hereunder and the cost thereof shall be deemed Additional Rent due and payable by Tenant. Tenant may not self-insure against any risks required to be covered by insurance provided by Tenant hereunder.

11.8Miscellaneous.  Landlord makes no representation that the insurance coverage specified to be carried by Tenant pursuant to this Article 11 is adequate to protect Tenant against Tenant’s undertaking under the terms of this Lease of otherwise, and in the event Tenant believes that any such insurance coverage called for under this Lease is insufficient, Tenant shall provide, at its sole cost and expense, such additional insurance as Tenant deems adequate. Tenant shall not keep, use, sell or offer for sale in or upon the Premises any article which may be prohibited by any insurance policy periodically in force covering the Premises, the Buildings or the Project. If any of Landlord’s insurance policies shall be cancelled or cancellation shall be threatened or the coverage thereunder reduced or threatened to be reduced in any way because of the use of the Premises or any part thereof by Tenant or any assignee, subtenant, licensee or invitee of Tenant and, if Tenant fails to remedy the condition giving rise to such cancellation, threatened cancellation, reduction of coverage, or threatened reduction of coverage, within forty-eight (48) hours after notice thereof, Landlord may, at its option, enter upon the Premises and attempt to remedy such condition, and Tenant shall pay the cost thereof to Landlord as Additional Rent within ten (10) days of Landlord’s demand therefor. Landlord shall not be liable for any damage or injury caused to any property of Tenant or of others located on the Premises resulting from such entry. Tenant shall not do or permit to be done any act or things upon or about the Premises, the Buildings or the Project, which will: (i) result in the assertion of any defense by any insurer of any claim under (ii) invalidate or be in conflict with, the insurance policies of Landlord or Tenant covering the Project, the Buildings or the Premises or the Tenant Improvements or personal property therein, or (iii) increase the rate of fire insurance applicable to the Buildings or the Project to an amount higher than it otherwise would be; and Tenant shall neither do nor permit to be done any act or thing upon or about the Premises or the Buildings or the Project which shall or might subject Landlord to any liability or responsibility for injury to any person or persons or to property. If, as a result of any act or omission by or on the part of Tenant or violation of this Lease, whether or not Landlord has consented to the same, the rate of “All Risk” or other type of insurance maintained by Landlord on or with respect to the Buildings or the Project and fixtures and property therein, shall be increased to an amount higher than it otherwise would be, Tenant shall, within ten (10) days after delivery of written demand therefor by Landlord, reimburse Landlord for all increases of Landlord’s insurance premiums so caused. In any action or proceeding wherein Landlord and Tenant are parties, a schedule or “make-up” of rates for the Project or the Premises issued by the body making fire insurance rates or established by any insurance carrier providing coverage for the Project, the Buildings or the demised premises shall be presumptive evidence of the facts stated therein including the items and charges taken into consideration in fixing the “All Risk” insurance rate then applicable to the Project, the Buildings or the Premises.

11.9Insurance Not Available On A Commercially Reasonably Basis.  To the extent, and for such periods of time, that the insurance required to be obtained by Landlord and/or Tenant ceases to be available on a commercially reasonable basis, then to such extent and for such periods of time, Tenant and Landlord shall be relieved of the obligation to obtain such insurance and will be deemed to have self-insured for the risks covered by such insurance.

ARTICLE 12 - - DAMAGE OR DESTRUCTION

12.1Repair of Damage to Premises by Landlord. Except in the case where Landlord or its agents are already aware of the same, Tenant shall promptly notify Landlord of any material damage to the Premises resulting from fire or any other casualty (“Casualty Damage”) promptly following the date Tenant’s management actually becomes aware of the same. If the Project, the Buildings, the Premises or any Common Areas (or any improvements contained in any of the same) serving, providing access to, or otherwise affecting Tenant’s use and enjoyment of the Premises shall be damaged by fire or other casualty, Landlord shall promptly and diligently, subject to delays for insurance adjustment or other matters beyond Landlord’s control, and subject to all other terms of this Article 12, repair and restore (collectively “Restore” or “Restoration”) the Project, the Buildings, and such Common Areas (other than Tenant Improvements and Alterations within the Premises). Such Restoration shall be to materially the same condition of the Project, the Buildings and the Common Areas as the condition thereof existing immediately prior to the Casualty Damage, except for modifications required by zoning and building codes and/or other Laws or any other modifications to the Common Areas or the Project (outside of the Premises) deemed desirable by Landlord that are consistent with a first-class project, provided that the primary access to the Premises and any common restrooms serving the Premises shall not be materially and adversely affected. Promptly following the occurrence of any Casualty Damage thereto, Tenant shall, at its sole cost and expense (using contractors and subcontractors approved by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed) to Restore the Tenant Improvements in the Premises to a commercially reasonable condition (which shall not be required to have the same value or configuration as the earlier Tenant Improvements). Prior to the commencement of such Restoration of the Tenant Improvements, Tenant shall submit to Landlord, for Landlord’s review and approval (not to be unreasonably withheld, conditioned or delayed consistent with the standards of Article 10), all plans, specifications and working drawings relating to such Restoration to be conducted by Tenant. Subject to the provisions of this Lease, Landlord shall not be liable for any inconvenience or annoyance to Tenant or its visitors, or injury to Tenant’s business resulting in any way from such damage or the repair thereof.

12.2Landlord and Tenant Termination Rights.

12.2.1Landlord’s Option to Terminate. Notwithstanding any provision of this Article 12 to the contrary, in the event of any Casualty Damage to the Project, Landlord may elect not to rebuild and/or Restore the South Tower Premises, the South Tower, the Plaza Building, the Plaza Building Space and/or the Project, and instead, subject to the terms of this Section 12.2, terminate this Lease with respect to the Premises (including the South Tower

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Premises and the Plaza Building Space), by notifying Tenant in writing of such termination within one hundred twenty (120) days after the date of Landlord’s discovery of the Casualty Damage in question (and such notice shall include a termination date giving Tenant ninety (90) days to vacate the Premises, which ninety (90) day period shall be subject to extension for delays due to Force Majcure (as that term is defined in Section 30.5, below)), provided, however, that Landlord may so elect to terminate this Lease only if a material portion of the South Tower Premises shall be materially damaged by Casualty Damage and one or more of the following conditions is present; (i) Restoration of the South Tower Premises and/or the South Tower cannot reasonably be completed within twelve (12) months after the date of commencement of Restoration of the Casualty Damage (when such Restoration is made without the payment of overtime or other premiums); (ii) where the primary cause of the Casualty Damage in question is earthquake, terrorism or war (“Special Risks”) and the costs of Restoration of the Casualty Damage to the South Tower (and rental abatement resulting therefrom) not covered by Landlord’s insurance (or by the type of property damage insurance Landlord is required to carry under this Lease) exceeds the Landlord Contribution (defined in this Section 12.2.l, below) and Tenant does not agree within fifteen (15) business days of receipt of Landlord’s notice of termination to fund the amount in excess of Landlord’s contribution required to complete the appropriate Restoration; or (iii) unless Tenant has exercised an Extension Option pursuant to Section 2.4 of this Lease to extend the Term beyond such fifteen (15) month period, the Casualty Damage occurs during the last fifteen (15) months of the Lease Term and the Restoration cannot, in the reasonable opinion of a contractor reasonably selected by Landlord, be completed within one hundred twenty (120) days after being commenced. At any time, from time to time, after the date occurring ninety (90) days after the date any Casualty Damage is discovered by the parties, Tenant may request that Landlord provide Tenant with a certificate from the architect or contractor described above setting forth such architect’s or contractor’s reasonable opinion of the date of completion of the Restoration and Landlord shall respond to such request within thirty (30) business days. For purposes of this Section 12.2, the “Landlord Contribution” shall mean *

12.2.2Tenant Termination Right.  If Landlord does not elect to terminate this Lease with respect to the Premises pursuant to Landlord’s termination right as provided in Section 12.2.1, above, and: (a) the Restoration of: (i) a material portion of the South Tower Premises or (ii) those portions of the Common Areas, the loss of which materially impairs Tenant’s business occupancy of the South Tower Premises or (iii) both of the areas covered in the foregoing clauses (i) and (ii), cannot be completed within twelve (12) months after being commenced, (b) where the primary cause of the Casualty Damage in question is a Special Risk and the costs of Restoration of Improvements not covered by Tenant’s insurance (or by the type of property damage insurance Tenant is required to carry under the Lease) exceeds the Tenant’s Contribution (defined in this Section 12.2.2, below) and Landlord does not agree (within fifty (15) business days of Tenant’s notice of termination) to fund the amount in excess of Tenant’s Contribution required to complete the appropriate Restoration of the Improvements in the Premises, or (c) the casualty Damage in question occurs during the last fifteen (15) months of the Lease Term and the Restoration cannot, in the reasonable opinion of an architect or contractor reasonably selected by Landlord, be completed within one hundred twenty (120) days after being commenced, Tenant may elect, no earlier than sixty (60) days after the date of Tenant’s discovery of the Casualty Damage in question and not later than ninety (90) days after the date of such discovery, to terminate this Lease with respect to the Premises (including both the South Tower Premises and the Plaza Building Space) by written notice to Landlord effective as of the date specified in the notice, which date shall not be less than thirty (30) days nor more than ninety (90) days after the date on which such notice is given by Tenant. In addition, if neither Landlord nor Tenant shall elect to terminate this Lease with respect to the Premises as set forth in this Section 12.2, and there is material Casualty Damage to the South Tower Premises, and either: (i) Restoration of the Casualty Damage with respect to the South Tower Premises which is to be performed by Landlord under Section 12.1 has not been commenced within eight (8) months after the date of Landlord’s discovery of the Casualty Damage in question, or (ii) a material portion of the Restoration of the Casualty Damage to the South Tower Premises which is Landlord’s responsibility under Section 12.1 has not been satisfactorily completed within eighteen (18) months after the date of discovery of damage (which dates shall be subject to extension for Force Majeure and delays caused by Tenant), then Tenant shall have the right, within five (5) business days of the end of either such period, and thereafter during the first five (5) business days of the first day of each such calendar month following the end of such period until such time as such Restoration by Landlord is commenced or completed, as applicable, to terminate this Lease by notice to Landlord (the “Damage Termination Notice”), effective as of a date set forth in the Damage Termination Notice (the “Damage Termination Date”), which Damage Termination Date shall not be less than five (5) business days following the end of such period or each such month, as the case may be. Notwithstanding the foregoing, if Tenant delivers a Damage Termination Notice to Landlord, then Landlord shall have the right to suspend the occurrence of the Damage Termination Date for a period ending thirty (30) days after the delivery by Tenant of the Damage Termination Notice by delivering to Tenant, within five (5) business days of Landlord’s receipt of the Damage Termination Notice, a certificate of Landlord’s contractor responsible for the Restoration of the damage certifying that it is such contractor’s good faith judgment that the repairs shall either be commenced or shall be substantially completed, as applicable, within thirty (30) days after delivery by Tenant of the Damage Termination Notice. If repairs shall be commenced or shall be substantially completed, as applicable, prior to the expiration of such thirty (30)-day period, then the Damage Termination Notice shall be of no force or effect, but if the repairs are not commenced or substantially completed, as applicable, within such thirty (30) day period, then this Lease shall terminate upon the expiration of such thirty (30)-day period. For purposes of this Section 12.2.2, the “Tenant’s Contribution” shall be equal to *

*

12.3Rent Abatement.  If Tenant is prevented from using (and does not actually conduct business operations in) the Premises or any portion thereof as a result of any Casualty Damage to the Buildings, Project or Premises, then Tenant’s Rent (which for purposes of this Section 12.3 shall include Base Rent, Additional Rent, Parking Fees and all similar periodic changes contemplated hereunder) shall be abated or reduced (as the case may be) from the date of discovery of such Casualty Damage for such time as Tenant is prevented from using, and actually does not conduct business operations in, the Premises (or if only of a portion thereof, such abatement shall be in the proportion that the Rentable Area of the portion of the Premises that Tenant is prevented from using (and actually does not conduct business operations in) bears to the total Rentable Area of the Premises). However, if Tenant is prevented from conducting Tenant’s business in any portion of the Premises and the remaining portion of the Premises is not sufficient to allow (or otherwise does not permit) Tenant to effectively conduct Tenant’s business in the Premises (and Tenant actually does not conduct any business from any portion of the Premises), then Tenant’s Rent for the entire Premises shall be abated for such time during which Tenant is so prevented from effectively conducting Tenant’s business in the Premises (and actually does not conduct business in the entire Premises). If Tenant’s right to abatement

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occurs during a free rent period of other period during which Tenant’s Rent hereunder is abated or subject to another rent credit provision under this Lease or the Work Letter (“Overlap Period”), Tenant shall be entitled to an additional free rent credit (applicable to the rent next due and payable) equal to the free rent to which Tenant was otherwise entitled during the Overlap Period but which was not used by virtue of application of this Section 12.3.  In any case where this Lease is not terminated pursuant to this Article 12, to the extent the repair and Restoration of the damage involves work within the Premises by Tenant pursuant to the provisions of this Article 12, Tenant’s abatement period shall continue until Tenant has been provided a reasonable period to rebuild the portion of the Premises it is required to rebuild under this Article 12 (subject to extension for Force Majeure), to install Tenant’s property, furniture, fixtures, and equipment, and to move in over one (1) weekend.

12.4Waiver of Statutory Provisions.  The provisions of this Lease, including this Article 12, 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 Buildings or the Project, and any statute or regulation of the state of California, 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 statute or regulation, now or hereafter in effect, shall have no application to this Lease or any damage or destruction to all or any part of the Premises, the Buildings or the Project.  Notwithstanding anything to the contrary contained in this Lease, in the event of any termination of this Lease pursuant to Articles 12 or 13 hereof, Tenant shall assign and deliver to Landlord (or to any party designated by Landlord) all insurance proceeds payable under such insurance policies (and payable to Tenant), covering damage to the Tenant Improvements together with the full amount of any deductibles payable by Tenant under such insurance polices; provided, however, that such amount to be assigned and delivered to Landlord shall not exceed the unamortized portion (based upon a straight-line amortization of the Tenant Improvement Allowance over the Initial Term and all Base Rent paid through the date of termination) of the Tenant Improvement Allowance (as defined in Section 2.1 of the Work Letter) granted to Tenant by Landlord under this Lease for that portion of the Premises subject to the damage in question.

ARTICLE 13 - - CONDEMNATION

If the whole or any substantial portion of the Premises shall be permanently taken for any public or quasi-public use or purpose as a result of any taking by the power of eminent domain or condemnation by, any competent authority (or any transfer in lieu of such taking) (collectively, a “Taking”), Landlord shall have the option to terminate this Lease (as to the entire Premises effective as of the date possession is required to be surrendered to the authority (the “Taking Date”).  If, as a result of any Taking of any portion of the Premises, the Building or the Project, there is a substantial interference in Tenant’s use or occupancy of the whole or a substantial portion of the Premises for a period of time in excess of one hundred eighty (180) days, Tenant shall have option to terminate this Lease by delivery of written notice to Landlord prior to the date (“Possession Date”) possession of the portion of the Project affected is required to be surrendered to the authority (in which case this Lease shall terminate on the Possession Date).  Subject to the provisions hereof, Tenant shall not, because of such Taking assert any claim against Landlord or the authority for any compensation because of such Taking, and Landlord shall be entitled to the entire award or payment in connection therewith, except that Tenant shall have the right to pursue and receive an award for: (i) fifty percent (50%) of the value of its leasehold interest hereunder, (ii) its relocation expenses and (iii) damages to Tenant’s personal property, trade fixtures and goodwill.  All Rent shall be apportioned as of the date of such termination.  Subject to the provisions of this Lease, Tenant hereby waives any and all rights it might otherwise have pursuant to Section 1265, 130 of the California code of Civil Procedure.  Notwithstanding anything to the contrary contained in this Article 13, in the event of a Taking of all or any portion of the Premises for a period of time of less than one hundred eighty (180) days, then this Lease shall not terminate, but the Base Rent and the Additional Rent shall be abated during the time and to the extent Tenant is prevented from using (and actually does not use) the Premises or portions thereof on the same basis as provided in Article 12 above.  In the case of any Taking where this Lease is not terminated pursuant to the provisions hereof, Landlord shall, promptly following the Taking Date or Possession Date, as applicable, restore the Premises (and all Tenant Improvements contained therein), and the Project to a complete improvement, in a condition, size, configuration, location and of a quality and with amenities as close as reasonably possible to the condition of the Premises, Building and Project in effect immediately prior to such Taking; provided that Landlord shall not be required to expand more than that portion of the award applicable to such purposes.

ARTICLE 14 - - ARBITRATION

14.1General Submittals to Arbitration.  The submittal of all matters to arbitration in accordance with the terms of this Article 14 is the sole and exclusive method, means and procedure to resolve any and all claims, disputes or disagreements arising under this Lease, including, but not limited to any matter relating to Landlord’s failure to approve an assignment, sublease or other transfer of Tenant’s interest in the Lease under Article 15 of this Lease, any other defaults by Landlord, or any default by Tenant, except for (i) all claims by either party which (a) seek anything other than enforcement of rights under this Lease, or (b) are primarily founded upon matters of fraud, willful misconduct, bad faith or any other allegations of tortious action, and seek the award of punitive or exemplary damages, (ii) claims relating to Landlord of any unlawful detainer rights pursuant to California law or rights or remedies used by Landlord to gain possession of the Premises or terminate Tenant’s right possession to the Premises, or (c) any action by Landlord’s exercise for equitable relief and/or specific performance, which disputes shall be resolved by suit field in the Superior Court of Los Angeles County, California, the decision of which court shall be subject to appeal pursuant to applicable Law.  The parties hereby irrevocably waive any and all rights to the contrary and shall at all times conduct themselves in strict, full, complete and timely accordance with the terms of this Article 14, and all attempts to circumvent the terms of this Article 14 shall be absolutely null and void and of no force or effect whatsoever.  Notwithstanding the foregoing, nothing contained herein shall limit Tenant’s rights to act in accordance with the terms of Section 9.3, above.  As to any matter submitted to arbitration (except with respect to the payment of money) to determine whether a matter would, with the passage of time, constitute an Event of Default, such passage of time shall not commence to run until any such affirmative arbitrated determination, as long as it is simultaneously determined in such arbitration that the challenge of such matter as a potential Event of Default was made in good faith.  As to any matter submitted to arbitration with respect to the payment of money, to determine whether a matter would, with the passage of time, constitute and Event of Default, such passage of time shall not commence to run in the event that the party which is obligated to make the payment does in fact make the payment to the other party.  Such payment can be made “under protest,” which shall occur when such payment is accompanied by

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a good faith notice stating the reasons that the party has elected to make a payment under protest.  Such protest will be deemed waived unless the subject matter identified in the protest is submitted to arbitration as set forth in this Article 14.

14.2AAA.  Any dispute to be arbitrated pursuant to the provisions of this Article 14 shall be determined by binding arbitration before a real estate lawyer with significant experience in the area of office leases (the “Arbitrator”) under the auspices of the American Arbitration Association (“AAA”) under the AAA’s commercial arbitration rules then in effect.  Such arbitration shall be initiated by the parties, either of them, within ten (10) days after either party sends written notice (the “Arbitration Notice”) of a demand to arbitrate by registered or certified mail to the other party and to AAA.  The Arbitration Notice shall contain a description of the subject matter of the arbitration, the dispute with respect thereto, the amount involved, if any, and the remedy or determination sought.  The parties may agree on any Arbitrator that is listed as an active Arbitrator (but not any lawyer who is then representing, or has previously represented within the immediately preceding five (5) year period, either party (or any lawyer in any firm that is then representing, or has previously represented within the immediately preceding five (5) year period, either party).  If they are unable to agree upon the Arbitrator within five (5) days, AAA will provide a list of three Arbitrators who are real estate lawyers and who have significant experience in the area of office leases and each party may strike one.  The remaining Arbitrator (or if there are two, the one selected by AAA) will serve as the Arbitrator.  The parties agree that discovery may occur in accordance with California Code of Civil Procedure Section 1283.05, subject to Section 14.3.1, below.

14.3Arbitration Procedure.

14.3.1Pre-Decision Actions.  The Arbitrator shall schedule a pre-hearing conference to resolve procedural matters, arrange for the exchange of information, obtain stipulations, and narrow the issues.  The parties will submit proposed discovery schedules to the Arbitrator at the pre-hearing conference.  The scope and duration of discovery will be within the sole discretion of the Arbitrator.  The Arbitrator shall have the discretion to order a pre-hearing exchange of information by the parties, including, without limitation, production of requested documents, exchange of summaries of testimony of proposed witnesses, and examination by deposition of parties and third-party witnesses.  This discretion shall be exercised in favor of discovery reasonable under the circumstances.

14.3.2The Decision.  The arbitration shall be conducted in the City of Los Angeles, California.  Any party may be represented by counsel or any other authorized representative.  In rendering an award, the Arbitrator shall determine the rights and obligations of the parties according to the substantive and procedural laws of the State of California and the terms and provisions of this Lease.  The Arbitrator’s award shall be based on the evidence introduced at the hearing, including all logical and reasonable inferences therefrom.  The Arbitrator may make any determination, and/or grant any remedy or relief that is just and equitable.  The award must be based on, and accompanied by, a written statement of award explaining the factual and legal basis for the award as to each of the principal controverted issues.  The award shall be conclusive and binding, and it may thereafter be confirmed as a judgment by the Superior Court of the State of California, subject only to challenge on the grounds set forth in the California Code of Civil Procedure Section 1286.2.  The Arbitrator shall award costs, including without limitation Attorneys’ Fees (defined in Article 17), and expert and witness costs, to the prevailing party, if any, as determined by the Arbitrator in his discretion.  The Arbitrator’s fees and costs shall be paid by the non-prevailing party as determined by the Arbitrator in his discretion.

ARTICLE 15 - - ASSIGNMENT AND SUBLETTING

15.1Restriction.  Subject to the terms of this Article 15, without the prior written consent of Landlord, which may not be withheld except as provided in this Article 15, Tenant shall not, either involuntarily or voluntarily or by operation of law or otherwise, assign, mortgage, pledge, hypothecate, encumber or permit any lien to attach to; of transfer this Lease or any interest herein, or sublet the Premises or any part thereof, or permit the Premises to be occupied by anyone other than Tenant, its Affiliates and Successors (defined in Section 15.8, below) and their employees (each a “Transfer” and any person or entity to whom a Transfer is made or sought to be made is referred to herein as a “Transferee”).  Any Transfer with respect to which Landlord’s consent is required under this Article 15, and with respect to which such consent requirement is not exempted under this Article 15 is referred to herein as a “Consent Transfer.”  Subject to the provisions of this Article 15, any Consent Transfer made without Landlord’s prior written consent shall, at Landlord’s option, be null, void and of no force or effect.

15.2Notice to Landlord.  Subject to Section 15.3, below, if Tenant desires to enter into a Consent Transfer then at least twenty (20) days (but no more than one hundred eighty (180) days) prior to the effective date of the proposed Transfer, Tenant shall submit to Landlord a written request (a “Transfer Consent Notice”) for Landlord’s consent, which notice shall include:

15.2.1A statement containing: (i) the name and address of the proposed Transferee; (ii) current financial statements of the proposed Transferee; (iii) the proposed effective date of the Transfer; (iv) a description of the portion of the Premises subject to the proposed Transfer (the “Subject Space”); (v) all of the principal terms of the proposed Transfer (including a calculation of the Transfer Profits (defined in Section 15.4, below)); (vi) reasonably detailed information as to the proposed Transferor’s proposed use of the Subject Space; and (vii) any other good faith information customarily required by landlords of Comparable Buildings in connection with the review of similar Transfers.

15.2.2Four (4) originals of the proposed assignment or sublease or other Transfer and four (4) originals of executed copies of Landlord’s form of “Landlord’s Consent to Sublease” or “Assignment and Assumption of Lease and Consent” (or some other commercially reasonable form of such documents) executed by Tenant and the proposed Transferee.

15.2.3If following Tenant’s submission of a Transfer Consent Notice.  Tenant modifies any of the material terms and conditions relevant to a proposed Transfer specified in the Transfer Consent Notice, Tenant shall

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re-submit such transfer Consent Notice to Landlord for its consent pursuant to all of the terms and conditions of this Article 15.

Subject to the provisions of Section 15.3 below, Landlord shall either grant its consent or withhold or condition its consent (pursuant to the criteria set forth in Section 15.3, below) within twenty (20) days (provided that the applicable time period shall be fifteen (15) days if the applicable Transfer involves two (2) full South Tower floors (or less space)) following Landlord’s receipt of a Transfer Consent Notice conforming to the requirements of this Section 15.2; provided, however, that notwithstanding the foregoing, the applicable time period shall be within sixty (60) days with respect: (i) to any required Landlord response to a Tenant request for a Recognition Agreement (defined in Section 15.10 below) under Section 15.10, (ii) to any circumstance where Tenant and/or the proposed Transferee shall request any amendment to the provisions of this Lease, or (iii) to any circumstance where the proposed Transferee is proposing to provide substitute Credit Enhancements (defined in Section 15.3.5 below) to satisfy the requirements of Section 15.3.5.

15.2.4Landlord’s Recapture Rights.  Notwithstanding anything to the contrary contained in this Article 15, subject to the terms hereof, in the event Tenant contemplates a Consent Transfer:  (a) of all or a portion of the Premises for substantially all of the then remaining portion of the Initial Term (or then effective Extension Term), (b) of the Plaza Building Space or (c) with respect to more than one (1) full floor of the South Tower Premises after the seventh (7th) anniversary of the First Increment Commencement Date, Tenant shall give Landlord thirty (30) days prior written notice (the “Intention to Transfer Consent Notice”) of such contemplated Consent Transfer (whether or not the contemplated Transferee or the terms of such contemplated Consent Transfer have been identified or determined).  Any Intention to Transfer Consent Notice shall specify the location and amount of square feet of Rentable Area of the Premises which Tenant intends to Transfer (the “Contemplated Transfer Space”), the contemplated date for the commencement of the contemplated Transfer (the “Contemplated Transfer Date”) and the contemplated length of the term of such contemplated Transfer, and shall specify that such Intension to Transfer Consent Notice is delivered to Landlord pursuant to this Section 15.2.4 in order to allow Landlord to elect to recapture the contemplated Transfer Space for the term set forth in the Intention to Transfer Consent Notice.  Thereafter, Landlord shall have the option, by giving written notice to Tenant within twenty (20) days after receipt of any Intention to Transfer Consent Notice, to recapture the Contemplated Transfer Space.  Such recapture shall cancel and terminate or when appropriate suspend this Lease with respect to such Contemplated Transfer Space as of the Contemplated Transfer Date until the last day of the term of the contemplated Transfer Space.  Such recapture shall cancel and terminate or when appropriate suspend this Lease with respect to such Contemplated Transfer Space as of the Contemplated Transfer Date until the last day of the term of the contemplated Transfer as set forth in the Intention to Transfer Consent Notice (provided, however, that: (i) if such last day of the contemplated Transfer is within the last twenty (20) months of the Initial Lease Term, Landlord may elect to have such recapture continue for the remainder of the Term and (ii) if the Contemplated Transfer Space is the Plaza Building Space, such recapture shall apply (in all cases) to the remainder of the Term), at which time, if the Term  has not then expired and this Lease remains in full force and effect, Landlord shall redeliver such Contemplated Transfer Space in substantially the same condition as of the date of cancellation, termination, or suspension, reasonable wear and tear excepted (or in the same condition in which Tenant would have permitted a Transferee to return such Contemplated Transfer Space) whereupon, such space shall be deemed to be part of the premises once again. Tenant acknowledges and agrees that in the event that Landlord shall recapture the Plaza Building Space pursuant to this Section 15.2.4, all of Tenant’s Tenant Plaza Building Identification Rights (defined in Section 28.5.4(ii), below) shall terminate and from such date forward shall be of no force or effect.  In the event of a recapture by Landlord, if this Lease shall be cancelled and terminated, or when appropriate, suspended, with respect to less than the entire South Tower Premises, the Rent reserved herein shall be reduced to eliminate the Base Rent and Additional Rent attributable to the Contemplated Transfer Space that has been Transferred, and this Lease, as so amended, shall continue thereafter in full force and effect, and upon request of either party, the parties shall execute a written confirmation of the same and Landlord shall, at its sole costs and expense, construct or cause to be constructed any demising walls that are necessary with respect to the Contemplated Transfer Space.  If Landlord declines, or fails to elect in a timely manner, to recapture any Contemplated Transfer Space identified in any Intention to Transfer Consent Notice under this Section 15.2.4, then, subject to the other terms of this Article 15, for a period of nine (9) months (the “Nine Month Period”) commencing on the last day of such twenty (20) day period, Landlord shall not have any right to recapture such Contemplated Transfer Space in connection with any Consent Transfer for which Tenant delivers to Landlord a Transfer Consent Notice during the Nine Month Period, provided that any such Transfer is for the Contemplated Transfer Space and for the area described in, and otherwise is substantially on the terms set forth in the Intention to Transfer Consent Notice; provided, further, however, that any such Transfer shall be subject to the remaining terms of this Article 15.  Tenant may send additional Intention to Transfer Notices to Landlord with respect to a Contemplated Transfer space or other portions of the Premises during the Nine Month Period, and in the event that Tenant does so, Landlord shall again have a right to recapture such Contemplated Transfer Space and all of the procedures set forth herein shall be repeated, including a new start to the Nine month Period.  If such a Transfer is not so consummated, within the Nine Month Period (or if a Transfer is so consummated then upon the expiration of the term of any Transfer of such Contemplated Transfer Space that is consummated within such Nine Month Period), Tenant shall again be required to submit a new Intention to Transfer Consent Notice to Landlord with respect any contemplated Consent Transfer, as provided above in the Section 15.2.4.

15.3Landlord’s Consent; Standards; Remedies.  Subject to Section 15.2.4, Landlord’s consent to any proposed Consent Transfer shall not be withheld or conditioned except when such withholding or conditioning of consent is based upon one or more of the following reasons (provided, however, that any withholding or conditioning of Landlord’s consent, when based upon one or more of the following reasons, shall be deemed reasonably withheld or conditioned:

15.3.1The Transferee is of a character or demonstrated reputation or engaged in a business which is materially inconsistent with quality of the Project (as judged with reference to the then existing direct tenants in the project);

15.3.2The Transferee intends to use the subject Space for purposes which are not permitted under this Lease;

15.3.3The Transferee is either a governmental agency or instrumentality thereof (provided, however, that Landlord shall not be entitled to disapprove a Transfer of space in the south Tower by the terms of this Section 15.3.3 if: (i) the Transfer is to a Transferee that is a governmental entity that is comparable to a governmental

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entity with which Landlord has voluntarily entered into a direct lease of office space in the above ground areas of the Project within the sixty (60) month period prior to the date on which Tenant delivers a Transfer Consent Notice (an “Existing comparable Governmental Tenant”), and (ii) Tenant’s Transfer of the applicable Subject Space (and the proposed use of such Subject Space by the proposed Transferee) shall comply with the requirements of Section 7.1.1, above, such that: (a) the use proposed by the Transferee is a Permitted Domestic Government Use or a Permitted Foreign Governmental Use, (b) the characteristics of the proposed Transferee are such that, the occupancy by such Transferee of space in the Project will not, in Landlord’s good faith and reasonable discretion, be more intrusive upon and/or more in conflict with the nature, size, intensity, reputation and/or impacts upon security, use of Common Areas, reputation of the Project and/or desirability of the Project to other tenants (and all other reasonably relevant characteristics specified by Landlord with respect to the use by any Existing comparable Governmental Tenant of its premises), and (c) the Subject Space to be Transferred is no larger than the above ground premises at the Project occupied by Existing Comparable Governmental Tenants as of the date on which Tenant delivers a Transfer Consent Notice (so that if, for example, the premises leased to Existing Comparable Governmental Tenants is a premises of two thousand (2,000) square feet of Rentable Area, is used as an office for executives and/or legal staff for a governmental agency and is reasonably viewed by the public (and other tenants) as being comparable to the other first class tenants in the South Tower, Tenant’s rights to Transfer any Subject Space to a Transferee that is a governmental entity proposing a Permitted Domestic Governmental Use or a Permitted Foreign Governmental Use, as the case may be, in such Subject Space shall be limited to Domestic Government Use or a Foreign Governmental Use, as applicable, of two thousand (2,000) square feet of Rentable Area or less of a comparable nature to such Domestic Government Use or Foreign Governmental Use or a Foreign Governmental Use, as the case may be, by such Comparable Existing Governmental Tenant);

15.3.4The proposed Transfer would cause a violation of another lease for space in the Project, or would give an occupant of the Project a right to cancel its lease;

15.3.5In the event that there has been a substantial decline in Tenant’s financial strength, the proposed Transferee does not have the financial strength (taking into account all of the Transferee’s other actual or potential obligations and liabilities) to perform its obligations with respect to the proposed Transfer or, otherwise does not satisfy Landlord’s standards for financial standing with respect to tenants under direct leases of comparable economic scope or is not a party of reasonable financial worth and/or financial stability in light of the responsibilities to be undertaken in connection with the Transfer on the date consent is requested and such proposed Transferee is not willing to provide credit enhancements (“Substitute Credit Enhancements”) (such as security deposits, letters of credit and/or guaranties) to Landlord of substantially the same type and magnitude (with the form and substance of all documentation) as those which Landlord has accepted from other tenants of the Project of similar creditworthiness and financial strength to such Transferee with which Landlord has entered into direct leases within the twelve (12) month period prior thereto with respect to space of a Rentable Area comparable to the Rentable Area of the Subject Space for a term equal to the remaining Lease Term, and pursuant to which such tenant has assumed monetary obligations equal to those to be assumed under the Transfer;

15.3.6In the event that Tenant proposes any Transfer on or before the date that is forty-eight (48) months after the Third Increment Commencement Date;

(i)either the proposed Transferee, or any person which directly or indirectly controls, is controlled by, or is under common control with the proposed Transferee, is currently in discussions with Landlord to lease space in the Project or has been in such discussions within the preceding sixty (60) days;

(ii)either the proposed Transferee, or any person which directly or indirectly controls, is controlled by, or is under common control with, the proposed Transferee, is currently a tenant or a subtenant in the Project; or

(iii)the proposed Transfer would be on economic terms (based upon the effective rental rates) more favorable to the Transferee than the economic terms then being accepted by Landlord for comparable direct leasing transactions in the Project.

Notwithstanding anything to the contrary in this Section 15.3.6, the provisions of this Section 15.3.6 shall not apply if the proposed Transfer (and all other Transfers then in effect) cover aggregate Subject Spaces (expressed in a number of aggregate square feet of Rentable Area) which does not exceed the number of square feet of Rentable Area, If any, by which [ILLEGIBLE] then effective area of the Premises (expressed in number of square feet of Rentable Area) is greater than *

*

15.3.7In the event that Tenant proposes to Transfer the Plaza Building Space:

(i)The proposed Transfer is for less than * Building Space; or

(ii)The proposed Transferee is not a Permitted Plaza Building First Class Tenant (defined in Section 28.9.3 below).

15.3.8Landlord agrees that it shall be unreasonable for Landlord to withhold its consent to a Consent Transfer on the grounds that such Consent Transfer is a sublease or assignment of a subleasehold interest.

15.3.9Notwithstanding anything to the contrary in this Lease, if Tenant or any proposed Transferee claims that Landlord has unreasonably withheld or delayed its consent or otherwise acted in a manner not permitted under this Article 15, then the sole remedy of Tenant and such proposed Transferee, if such claim is determined by the Arbitrator or by a court of competent jurisdiction to be successful, shall be declaratory judgment

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and an injunction for the relief sought together with (x) a recovery of attorneys’ fees and costs pursuant to Article 17 and (y) any direct monetary damages or other monetary relief.  Tenant and each proposed Transferee hereby waive to the maximum extent permitted by Law any and all other remedies, including, without limitation, any right at law or equity to terminate this Lease with respect to any such claim.

15.3.10  Tenant acknowledges that Tenant’s rights under this Article 15 satisfy the conditions set forth in Section 1951.4 of the California Civil Code with respect to the availability to Landlord of certain remedies for a default by Tenant under this Lease.

15.4Transfer Profits.  Subject to the provisions of this Article 15, if Landlord consents to any Transfer, Tenant shall pay to Landlord *       of any Transfer Profits (defined below); provided, however, that Tenant shall have no obligation to pay to Landlord any portion of any Transfer Profits allocable to any period of occupancy by the Transferee under the Transfer occurring prior to July 1, 2008.  “Transfer Profits” shall mean all rent, additional rent or other material consideration received by Tenant in connection with the Transfer in excess of the Rent and Additional Rent payable by Tenant under this Lease during the term of the Transfer, on a per square foot of Rentable Area basis if less than all of the Premises is transferred (unless all or a portion of the subject space is subject to different Rent and Additional Rent terms, in which case, to the extent applicable, such different terms shall be applicable), after first deducting the expenses incurred or to be incurred by Tenant for the following (collectively, the “Transfer Costs”):  (i) any changes, alterations and improvements to the Subject Space in connection with the Transfer, (ii) any space planning, architectural or design fees or expenses incurred in marketing the Subject Space or in connection with such Transfer, (iii) any improvement allowance or other monetary concessions actually provided to the Transferee with respect to the Subject Space, (iv) any brokerage commissions actually paid by Tenant, or paid to Landlord, in connection with Transfer, (v) any good faith, out-of-pocket attorneys’ fees actually incurred by Tenant, or paid to Landlord, in connection with the Transfer, (vi) any lease takeover costs incurred by Tenant in connection with the Transfer, (vii) any actual, out-of-pocket costs of advertising the Subject Space, (viii) the amount of any Base Rent and Additional Rent paid by Tenant to Landlord with respect to the Subject Space during the period commencing on the later of (a) the date Tenant contracts with a reputable broker to market the Subject Space and notifies the Landlord in writing of such contract (or commences negotiations with the Transferee), and (b) the date Tenant actually vacates the entire Subject Space, until the commencement of the term of the Transfer, and (ix) any other economic concessions actually given to the Transferee.  The determination of the amount of Landlord’s applicable share of the Transfer Profits shall be made on a monthly basis as rent or other consideration is received by Tenant under the Transfer.  For purposes of calculating the Transfer Profits on a monthly basis, the Transfer Costs shall be allocated to the earliest portion of the term of such Transfer until such Transfer Costs are exhausted (such that Transfer Profits shall not be payable with until respect to a Transfer until Tenant has first recovered all of its Transfer Costs applicable to the applicable Subject Space).  Transfer Profits shall also include, but not be limited to, key money, bonus money or other cash consideration paid by the Transferee to Tenant in connection with such Transfer, but shall exclude any payment which is not in excess of fair market value for (1) services rendered by Tenant to Transferee or (2) non-lease assets, inventory, equipment, or furniture transferred by Tenant to Transferee in connection with such Transfer.

15.5Landlord’s Costs.  With respect to each Transfer proposed to be consummated by Tenant, whether or not Landlord shall grant its consent thereto, Tenant shall pay Landlord’s actual review and processing fees, as well as any reasonable professional fees (including, without limitation, attorneys’, accountants’, architects’, engineers’ and consultants’ fees) (collectively, “Review Expenses”) incurred by Landlord, within thirty (30) days after written request by Landlord to do so; provided, however, that in no event shall such Review Expenses exceed: (a) *       [ILLEGIBLE] respect to subleases of not more than 2,500 rentable square feet or space in the Premises or (b) *             other transactions, for a Consent Transfer in the ordinary course of business; provided, further, however, that none of the above dollar limitations shall apply to (A) any Consent Transfer with respect to which Tenant shall request a Recognition Agreement under Section 15.10, (B) any Transfer involving more than seventy-five thousand (75,000) square feet of Rentable Area; or (C) any Consent Transfer with respect to which Tenant or the prospective Transferee shall request documentation in addition to, or material modification of, Landlord’s standard form of “Consent to Sublease” or “Assignment and Assumption of Lease and Consent” for granting such consent.

15.6Continuing Liability of Tenant.  Notwithstanding the consummation or attempted consummation of any Transfer under this Article 15, Tenant shall remain as fully and primarily liable for the payment of Rent and for the performance of all other obligations of Tenant contained in this Lease to the same extent as if the Transfer had not occurred; provided, however, that any act or omission of any Transferee, other than Landlord, that violates the provisions of this Lease shall be deemed a breach of this Lease by Tenant.  If any Transferee defaults beyond applicable cure and grace periods in the performance of any of the provisions hereof, such default shall constitute an Event of Default hereunder, and Landlord may proceed directly against Tenant with respect thereto without the necessity of exhausting its remedies against such Transferee.  Landlord may consent to subsequent Transfers of this Lease by Transferees of Tenant, upon notice to Tenant, but without obtaining its or their consent thereto, and such action shall not relieve Tenant of any of its liability or obligations under this Lease.  Landlord agrees to provide Tenant with copies of any notices that Landlord delivers to Tenant’s subtenants and/or assignees pertaining to breaches or defaults under the Lease and agrees that Tenant shall have the right to cure (concurrently with such subtenants’ and/or assignees’ rights to cure) such breaches within the time periods applicable for cures under this Lease.

15.7Non-Waiver.  The consent by Landlord to any Transfer shall not relieve Tenant, or any person claiming through or by Tenant, of the obligation to obtain the consent of Landlord, pursuant to this Article 15, to any further Transfer.  In the event of a Transfer, Landlord may collect rent from the Transferee when the Transferee is an assignee, or from a Subtenant if an Event of Default by Tenant is then in existence; provided, however, that Landlord shall have no right to make a “double recovery” of rent.  By collecting any such rent from a Transferee, Landlord shall not be deemed to have waived any of Landlord’s rights hereunder, and the collection of the rent from a person other than Tenant shall not be deemed a waiver of any of Landlord’s rights under this Article 15, an acceptance of any Transferee as Tenant, or a release of Tenant from the performance of Tenant’s obligations under this Lease.

15.8Affiliates.  Except as specifically set forth otherwise herein, this Lease may be assigned or all or any portion of the South Tower Premises and/or the entire Plaza Building Space may be sublet, in fact or by operation of law, by Tenant to any Affiliate of Tenant or to any Successor of Tenant without the consent of Landlord (i.e., such

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Transfers shall be exempt from such Landlord consent requirements under this Article 15) and without being subject to the provisions of Section 15.2.4, 15.3, 15.4, and 15.5); provided, however, that any Transfer of the Plaza Building Space to an Affiliate (as opposed to a Successor) shall be subject to all of the provisions of this Article 15.  An “Affiliate” means, as to any designated person or entity, any other person or entity which Control with, such designated person or entity, or the parent of any such designated entity.  A “Successor” means any person or entity of reasonable financial standing which acquires in good faith in a single transaction or in a series of related transaction (by merger, consolidation, transfer of assets or otherwise) this Lease and all or substantially all of the other property and assets of Tenant, and/or Tenant’s parent, and which assumes by written instrument all of Tenant’s liabilities hereunder.  “Control,” as used in this Section 15.8, shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person or entity or the parent of such designated entity, and ownership, directly or indirectly, of a least fifty percent (50%) of the voting securities of, or at least fifty percent (50%) of the voting interest in, any person or entity or the parent of such entity.

15.9Occupancy By Others.  Except as specifically set forth otherwise herein, Tenant shall have the right, without the payment of any Transfer Profits to Landlord and without the need to obtain Landlord’s consent (i.e., such Transfers shall be exempt from such Landlord consent requirements), and without prior notice to Landlord, to permit the occupancy of portions of the South Tower Premises to any individual(s) or entities providing services onsite (exclusively) to Tenant (but not to the general public) (“Tenant’s Occupants”) on and subject to the following conditions: (i) all such individuals or entities shall be of a character and reputation consistent with the quality of the Project; (ii) the space occupied by such Tenant’s Occupants shall not be separately demised from the Premises and shall not have a separate entrance from the Premises, and (iii) in the aggregate, such Tenant’s Occupants shall not occupy more than *                 rentable square feet of space in the South Tower Premises (“Tenant’s Occupants’ Maximum Amount”); provided, however, that no occupancy of any portion of the Plaza Building Space by any Tenant Occupant (or any other individual or entity) shall be permitted pursuant to this Section 15.9 without Landlord’s prior written consent.  Tenant shall, within five (5) days, notify Landlord of any occupancy by any Tenant Occupant of any portion of the Premises pursuant to this Section 15.9 and shall supply Landlord with any documents or information reasonably requested by Landlord regarding any such Tenant Occupant within ten (10) days of Landlord’s request therefor.  Any occupancy permitted under this Section 15.9 shall not be deemed a Transfer under this Article 15.  Notwithstanding the foregoing, no such occupancy shall relieve Tenant from any liability or any obligations under this Lease.

15.10Landlord’s Recognition of Transfers Upon Termination of Lease.  At Tenant’s request, Landlord shall execute a commercially reasonable recognition agreement (a “Recognition Agreement”), on Landlord’s form of Recognition Agreement, in favor of a Transferee under a Consent Transfer who is a subtenant of Tenant (a “Subtenant”), which provides that, in the event this Lease shall be terminated, Landlord shall recognize the sublease between such Subtenant and Tenant (the “Sublease”) and shall not disturb such Subtenant’s possession of the Premises or applicable portion thereof (the “Sublease Space”), due to such termination on the condition that: (i) at the time of Tenant’s request for Landlord’s execution of the Recognition Agreement, such Sublease shall contain the same economic terms and conditions set forth in this Lease, subject to equitable modifications based on the Rentable Area of the Sublease Space; provided, however, that: (a) the Recognition Agreement shall provide that, in the event of the termination of Tenant’s leasehold interest in the Sublease Space, the monthly base rent payable to Landlord by such Subtenant shall be the greater of: (1) the base rent rate specified in the Sublease, or (2) the Base Rent specified herein (on a per square foot of Rentable Area basis) and (b) such Subtenant shall not be entitled exercise any of Tenant’s rights with respect to Sections (or Articles) 1.3.4, 1.5.2, 1.6, 1.7, 1.8, 1.9, 1.10 (unless such Subtenant is subleasing the entire Plaza Building Space, in which case all of the provisions of Section 1.10 (except for Tenant’s Additional ATM Right) shall apply to such Subtenant), 2.4, 4.3.4, 4.4.1 (but only to the extent that it permits Tenant to pay Tenant’s Percentage Share of Landlord’s estimate of Property Taxes and of the cost of Landlord’s Insurance on anything other than a monthly basis), 4.5.1, 4.6, 6, 7.1.1 (but only to the extent that it permits Tenant to use Premises for a Permitted Domestic Government Use or a Permitted Foreign Governmental Use), 8.1.1 (but only to the extent that it specifies the After Hours HVAC Rate), 8.1.5, 8.1.7 (but only to the extent that it allows Tenant to install a security system that is not compatible with Landlord’s security system), 8.1.9, 9.3, 15.3.3 (but only to the extent that it permits Tenant to make a Transfer to a governmental entity), 15.9, 15.10, 19.2, 19.3, 20.2.3, 20.2.4, 20.2.5, 20.3, 20.4, 20.5, 28.3 (but only to the extent that it permits Tenant to require Landlord to include a reference to “City National Plaza” (or any other name) on the South Tower directory (defined in Section 28.3, below), or within the Electronic South Tower Directory (defined in Section 28.3, below)), 28.5, 28.6, 28.7, 28.8, 28.9, 29, 30.9, 30.30, or 30.31, and the provisions of such Sections or Articles (or the provisions of such Sections or Articles providing such rights) shall in no event be applicable to such Subtenant; (ii) the Sublease Space shall consist of the entire Plaza Building Space or of full floors of the Premises which are not located in between two (2) full or partial floors of the Premises; (iii) Landlord shall not be liable for any act or omission of Tenant; (iv) Landlord shall not be subject to any offsets or defenses which Subtenant might have as to Tenant or to any claims for damages against Tenant, nor shall Landlord be obligated to fund to, or for the benefit of, Subtenant, any undisbursed tenant improvement or refurbishment allowance or other allowances or monetary concessions; (v) Landlord shall not be required or obligated to credit Subtenant with any rent, additional rent, security deposits, security or other amounts delivered or paid by Subtenant to Tenant; (vi) Landlord shall not be bound by any terms or conditions of the Sublease which are inconsistent with the terms and conditions of this Lease; (vii) such recognition shall be effective upon, and Landlord shall be responsible for performance of only those covenants and obligations of Tenant pursuant to the Sublease accruing after the termination of this Lease which would be obligations of Landlord if Subtenant were the tenant under this Lease; (viii) as a condition to Landlord’s obligation to enter into a Recognition Agreement with a particular Subtenant, Landlord shall have the right to reasonably approve the creditworthiness and financial strength of Subtenant, which reasonable approval shall be based upon the creditworthiness and financial strength then generally required by Landlord of a new tenant which is leasing space of a Rentable Area in the Project comparable to the Rentable Area of the Sublease Space for a term equal to the remaining Lease Term, and who is assuming the monetary obligations equal to those to be assumed under the Sublease (which may also be met by such Subtenant providing Substitute Credit Enhancements of the same type and magnitude which Landlord has accepted from other tenants of the Project of similar creditworthiness and financial strength to such Subtenant with which Landlord has entered into direct leases with respect to space of a Rentable Area comparable to the Rentable Area of the Sublease Space for a term equal to the remaining Lease Term, and pursuant to which such tenant has assumed monetary obligations equal to those to be assumed under the Sublease); and (ix) Subtenant shall make full and complete attornment to Landlord, as lessor, pursuant to written agreement executed by Landlord and

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Subtenant, so as to establish direct privity of contract between Landlord and Subtenant with the same force and effect as though Sublease was originally made directly between Landlord and Subtenant.  At Landlord’s election, upon Landlord’s written request given at any time after the termination of this Lease, Subtenant shall execute a lease for the Sublease Space subject to the applicable Sublease upon the same terms and conditions as set forth in the applicable Recognition Agreement.  In the event Landlord enters into a Recognition Agreement with any particular Subtenant pursuant to the terms of this Section 15.10.  Tenant hereby acknowledges and agrees that, for purposes of calculating the damages due Landlord following Tenant’s breach and Landlord’s termination of this Lease, with respect to any such Sublease Space, Landlord shall be deemed to have adequately mitigated its damages in accordance with applicable Law.

ARTICLE 16 - - DEFAULT AND REMEDIES

16.1Events of Default By Tenant.  The occurrence of any of the following shall constitute a material default and breach of this Lease by Tenant (an “Event of Default”);

16.1.1Any failure by Tenant to pay any Rent or any other charge required to be paid under this Lease, or any part thereof, within five (5) business days of notice from Landlord to Tenant of such failure.

16.1.2Any failure by Tenant to execute and deliver any statement or document described in Article 18 (Subordination and Attornment) and 22 (Estoppel Certificates) requested by Landlord within the time periods specified therein, where such failure continues for three (3) business days after delivery by Landlord to Tenant of written notice of such failure; which written notice shall reference this Section 16.1.2 and state that an Event of Default will be deemed to occur if Tenant shall continue to fail to execute and deliver such statement or document.

16.1.3The failure by Tenant to observe or perform any other provision of this Lease to be observed or performed by Tenant, other than those described in Sections 16.1.1 and 16.1.2, above, if such failure continues for thirty (30) days after written notice thereof from Landlord to Tenant; provided that if the nature of such default is such that the same cannot reasonably be cured within a thirty (30) day period, an Event of Default by Tenant shall not be deemed to have occurred if Tenant: (a) agrees in a written notice delivered to Landlord within twenty (20) days after written notice of default from Landlord that it will cure such default, (b) diligently commences such cure within such twenty (20) day period and (c) thereafter diligently proceeds to rectify and cure such default in full.

The notice periods provided herein are in addition to and not in lieu of the notice requirements of California Code of Civil Procedure §1161, et seq.

16.2Remedies Upon Default.  Upon the occurrence of any Event of Default by Tenant, Landlord shall have, in addition to any other remedies available to Landlord at law or in equity, the option to pursue any one or more of the following remedies, each and all of which shall, subject to applicable Law, be cumulative and nonexclusive, without any notice or demand whatsoever.

16.2.1Landlord’s Right To Terminate Upon Tenant Default.  Upon the occurrence of an Event of Default by Tenant as provided in Section 16.1 above, Landlord shall have the right to terminate this Lease and recover possession of the Premises by giving written notice to Tenant of Landlord’s election to terminate this Lease (subject to and in accordance with applicable Laws), in which event Landlord shall be entitled to receive from Tenant:

(i)The worth at the time of award of any unpaid Rent which had been earned at the time of such termination; plus

(ii)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 Tenant proves could have been reasonably avoided; plus

(iii)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 be reasonably avoided; plus

(iv)Any other amount reasonably 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; and

(v)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.

As used in Sections 16.2.1(i) and 16.2.1(ii) above, “worth at the time of award” shall be computed by allowing interest at ten percent (10%) per year.  As used in Section 16.2.1(iii) above, “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%).

16.2.2Landlord’s Right To Continue Lease Upon Tenant Default.  Upon the occurrence of an Event of Default under this Lease and abandonment of the Premises by Tenant, if Landlord does not elect to terminate this Lease as provided in Section 16.2.1 above, Landlord may from time to time, without terminating this Lease, enforce all of its rights and remedies under this Lease.  Without limiting the foregoing, Landlord shall have the remedy described in California Civil Code Section 1951.4 (Landlord may continue this Lease in effect after Tenant’s breach and abandonment and recover Rent as it becomes due, if Tenant has the right to sublet or assign, subject only to reasonable limitations).

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16.2.3Right of Landlord to Perform.     All covenants and agreements to be performed by Tenant under this Lease shall be performed by Tenant at Tenant’s sole cost and expense, except as expressly provided to the contrary under this Lease.  If Tenant shall fail to perform any obligation under this Lease, and such failure shall continue in excess of thirty (30) days (except that there shall be no notice and cure period with respect to emergencies, and for purposes of this Section 16.2.3, such notice and cure period shall be ten (10) business days with respect to failures by Tenant to perform Tenant’s obligations with respect to compliance with Laws or pursuant to Article 11), Landlord may, but shall not be obligated to, make any such payment or perform any such act on Tenant’s part without waiving its rights based upon any such failure of Tenant and without releasing Tenant from any of its obligations hereunder.  Any sums so paid by Landlord and all incidental costs, together with interest thereon at the lesson of: (i) the maximum rate permitted by Law and (ii) fifteen percent (15%) per annum (the “Default Rate”), calculated from the date of such payment by Landlord, shall be payable to Landlord as Additional Rent within thirty (30) days following Landlord’s demand therefor.

16.3Subleases of Tenant.  If Landlord elects to terminate this Lease on account of any Event of Default by Tenant, as set forth in this Article 16, subject to any Recognition Agreement granted under Section 15.10, Landlord shall have right to terminate any and all subleases, licenses, concessions or other consensual arrangements for possession entered into by Tenant and affecting the Premises.

16.4Efforts to Relet.  For the purposes of this Article 16, Tenant’s right to possession shall not be deemed to have been terminated by efforts of Landlord to relet the Premises, by its acts of maintenance or preservation with respect to the Premises, or by appointment of a receiver to protect Landlord’s interests hereunder.  The foregoing enumeration is not exhaustive, but merely illustrative of acts which may be performed by Landlord without terminating Tenant’s right to possession.

16.5Non-Waiver.  Nothing in this Article 16 shall be deemed to affect Landlord’s rights to indemnification for liability or liabilities arising prior to termination of this Lease for personal injury or property damages under the indemnification clause or clauses contained in this Lease.  No acceptance by Landlord of a lesser sum than the Rent then due shall be deemed to be other than on account of the earliest installment of such rent due, nor shall nay endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such installment or pursue any other remedy provided in this Lease.  The delivery of keys to any employee of Landlord or to Landlord’s agent or any employee thereof shall not operate as a termination of this Lease or a surrender of the Premises.

16.6WAIVER OF TRIAL BY JURY.    LANDLORD AND TENANT EACH EXPRESSLY WAIVE THEIR RIGHT TO TRIAL BY JURY IN ANY TRIAL HELD AS A RESULT OF A CLAIM ARISING OUT OF OR IN CONNECTION WITH THIS LEASE IN WHICH LANDLORD AND TENANT ARE ADVERSE PARTIES.  THE FILING OF A CROSS-COMPLAINT BY ONE AGAINST THE OTHER IS SUFFICIENT TO MAKE THE PARTIES “ADVERSE.”

16.7Cumulative Remedies.  In addition to the other remedies provided in this Lease, subject to applicable Law, and except as provided otherwise herein, each of Landlord and Tenant shall be entitled to a restraint by injunction of the violation or attempted or threatened violation of any of the covenants, conditions or provisions of this Lease or to a decree compelling specific performance of any such covenants, conditions or provisions.

16.8Default by Landlord.

16.8.1In General.  Notwithstanding anything to the contrary set forth in this Lease, but subject to the provisions of Section 9.3, Landlord shall not be in default in the performance of any obligation required to be performed by Landlord pursuant to this Lease unless Landlord fails to perform such obligation within thirty (30) days after the receipt of notice from Tenant specifying in detail Landlord’s failure to perform; provided, however, if the nature of Landlord’s obligation is such that more than thirty (30) days are reasonably required for its performance, then Landlord shall not be in default under this Lease if it shall commence such performance within such thirty (30) day period and thereafter shall diligently pursue the same to completion.  Upon any such default by Landlord under this Lease, Tenant may, except as otherwise specifically provided in this Lease to the contrary, exercise any of its rights provided at law or in equity.

16.8.2Abatement of Rent.  In the event that Tenant is prevented from using, and does not use, the Premises or any portion thereof, as a result of: (i) any entry by Landlord into the Premises, or alteration or construction in the Common Areas or affecting the Building Structure, or the Building Systems, or any other repair, maintenance or alteration performed by Landlord, or which Landlord failed to perform, after the First Increment Commencement Date and which is required to be performed by Landlord under the Lease, which materially interferes with Tenant’s use or occupancy of the Premises, (ii) any failure due to a reason within Landlord’s reasonable control to provide services, utilities or access to the Premises, or, unless Landlord provides reasonable replacement parking areas or spaces, the Parking Facilities, or (iii) the presence at, in, on, under or about the Project of Hazardous Materials not brought onto, into, or to the Premises or the Project by any of the Tenant Parties (any such set of circumstances as set forth in items (i), (ii) or (iii), above, to be known as an “Abatement Event”), then Tenant shall give Landlord notice of such Abatement Event, and if such Abatement Event continues for four (4) consecutive business days after Landlord’s receipt of any such notice or for nine (9) non-consecutive business days in the twelve (12) month period after Landlord’s receipt of any such notice  (the “Eligibility Period”), the Base Rent and Tenant’s Percentage Share of Operating Expenses and Property Taxes and all other periodic Rent payable by Tenant hereunder, and Tenant’s obligation to pay for parking shall be abated or reduced, as the case may be, after expiration of the Eligibility Period for such time that Tenant continues to be so prevented from using, and actually does not use, the Premises or a portion thereof, in the proportion that the Rentable Area of the portion of the Premises that Tenant is prevented from using, and does not use, bears to the total Rentable Area of the Premises; provided, however, that in the event Tenant is prevented from using, and does not use, a portion of the Premises for a period of time in excess of the Eligibility Period and the remaining portion of the Premises is not sufficient to allow Tenant to effectively conduct its business therein, and if Tenant does not conduct its business from such remaining portion, then for such time after expiration of the Eligibility

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Period during which Tenant is so prevented from effectively conducting its business therein, the Base Rent and Tenant’s Percentage Share of excess Operating Expenses and Property Taxes and all other periodic Rent payable hereunder and all of Tenant’s obligation to pay for parking for the entire Premises shall be abated for such time as Tenant continues to be so prevented from using, and actually does not use, the entire Premises.  If, however, Tenant reoccupies any portion of the Premises during such period, the Rent allocable to such reoccupied portion, based on the proportion that the Rentable Area of such reoccupied portion of the Premises bears to the total Rentable Area of the Premises, shall be payable by Tenant from the date Tenant reoccupies such portion of the Premises.  Such right to abate Base Rent and Tenant’s Percentage Share of Operating Expenses and Property Taxes (and other Rent) shall be Tenant’s sole and exclusive remedy at law or in equity for an Abatement Event; provided, however, that if Landlord has not cured such Abatement Event within two hundred seventy (270) days after the later of: (a) receipt of written notice of the Abatement Event from Tenant, and (b) Tenant’s actual vacation of the area (the “Affected Area”) of the Premises directly affected by the Abatement Event, Tenant shall have the right to terminate this Lease as to the Affected Area during the first five (5) business days of each calendar month following the end of such two hundred seventy (270) day period and continuing until such time as Landlord shall have cured the Abatement Event, which right may be exercised only by delivery of notice to Landlord (the “Abatement Event Termination Notice”) during such five (5) business-day period, and shall be effective as of a date set forth in the Abatement Event Termination Notice (the “Abatement Event Termination Date”), which Abatement Event Termination Date shall not be less than (30) days, and not more than six (6) months, following the date on which Tenant delivers to Landlord an Abatement Event Termination Notice.  References in this Section 16.8.2 to “do not use” shall mean does not conduct business operations in or from.

ARTICLE 17 - - ATTORNEYS FEES; COSTS OF SUIT

If either Landlord or Tenant shall commence any action or other proceeding against the other proceeding against the other arising out of, or relating to, this Lease, and such action or other proceeding results in an arbitration award (an “Award”) or a judgment by a court of competent jurisdiction (a “Judgment”) the prevailing party shall be entitled to recover from the losing party, in addition to any other relief, its actual attorneys fees, filing fees, court costs, reasonable copying costs, and process server costs (collectively “Attorneys’ Fees”) and expert and witness costs and fees irrespective of any court schedule of reasonable attorneys’ fees.

ARTICLE 18 - - SUBORDINATION AND ATTORNMENT

18.1Landlord represents, and warrants to Tenant that, as of the date hereof, the only ground leases, deeds of trust, mortgages or security interests (collectively, “Security Instruments”) affecting the Project, or any part thereof, is the deed of trust held by the California State Teachers’ Retirement System, a public entity (“CalSTRS”) described on Exhibit “W” attached hereto (the “Existing Security Instrument”).  As a condition precedent of Tenant’s obligations under this Lease, Landlord shall deliver to Tenant, a non-disturbance and attornment agreement in the form of Exhibit “X” (an “SNDAA”) in favor of Tenant executed by the current holder of the Existing Security Instrument within ten (10) business days following Landlord’s and Tenant’s execution and delivery of this Lease.  In the event landlord does not deliver to Tenant such SNDAA executed by CalSTRS within such ten (10) business day period, Tenant shall have the right to terminate this Lease, exercisable at any time thereafter upon ten (10) additional business days’ written notice to Landlord, which termination shall be effective if Landlord does not provide Tenant with the applicable executed and acknowledged non-disturbance agreement within such ten (10) additional business day period.

18.2Subject to the terms of this Article 18, this Lease shall be subject and subordinate to all future Security Instruments hereafter in force against the Project, if any, and to all renewals, extensions, modifications, consolidations and replacements thereof, and to all advances made or hereafter to be made upon the security of such mortgages or trust deeds, unless the holders of such mortgages or trust deeds, or the lessors under such ground lease or underlying leases (collectively, “Superior Mortgagees”), require in writing that this Lease be superior thereto, Landlord’s delivery to Tenant of commercially reasonable SNDAA(s) in favor of Tenant from any such Superior Mortgagees of Landlord who later come into existence at any time prior to the expiration of the Lease Term shall be in consideration of, and a condition precedent to, Tenant’s agreement to be bound by the terms of this Article 18.  Each such commercially reasonable SNDAA shall include the obligation of any such successor ground lessor, mortgage holder or lien holder to recognize Tenant’s rights specifically set forth in this Lease to offset amounts against Rent due hereunder.  Subject to the SNDAAs described above, Tenant covenants and agrees in the event any proceedings are brought for the foreclosure (or deed in lieu thereof) of any such mortgage, or if any ground or underlying lease is terminated, to attorn, to the lien holder or purchaser or any successors thereto upon any such foreclosure sale (or deed in lieu thereof), or to the lessor of such ground or underlying lease, as the case may be, if so requested to do so by such purchaser or lessor, and to recognize such purchaser or lessor as the lessor under this Lease.  Tenant shall, within twenty (20) days of request by Landlord, execute such further instruments or assurances as Landlord may reasonably and in good faith deem necessary to evidence or confirm the subordination or superiority of this Lease to any such mortgages, trust deeds, ground leases or underlying leases, subject to the terms of this Article 18.

ARTICLE 19 - - QUIET ENJOYMENT; NON-COMPETITION

19.1Quiet Enjoyment.  Provided that an Event of Default by Tenant is not then in existence, Tenant shall have and peaceably enjoy the Premises during the Term of this Lease, subject to all of the terms and conditions contained in this Lease, from and against all persons holding an interest in the Project from and through Landlord.

19.2Non-Competition South Tower Ground Floor.  On the condition that, and so long as Original Tenant (or a Successor of Original Tenant) shall not be subleasing *             [ILLEGIBLE] of the Premises (or more) (and shall not have assigned this Lease to any party other than to a successor or an Affiliate of Tenant), Landlord shall not lease any premises in the ground floor lobby of the South Tower to any Tenant Competitor (defined below).  Original Tenant’s right, pursuant to this Section 19.2, to restrict Landlord’s rights to lease space in the ground floor lobby of the South Tower shall be personal to Original Tenant and to any Successor of Original Tenant.  For purposes of this Lease, “Tenant Competitor” as used in this Lease shall mean:  (a) any entity which has the word “bank,” “savings,” “loan,” “trust,” or “bankcorp” or any derivation or combination thereof (such as “banking”) in its formal name, (b) any traditional bank or savings and loan association (such as Citibank, Wells Fargo, U.S. Bank, and Bank of America) or (c) any entity which actually accepts deposits at its premises in the Project, whose deposits are

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insured by the Federal Deposit Insurance Corporation and whose primary government regulator is not the Securities Exchange Commission.  Notwithstanding any provision of this Lease to the contrary, each of Landlord and Tenant hereby acknowledge and agree that: (i) entities such as Schwab, Merrill Lynch, UBS Paine Webber and Dean Witter Morgan Stanley, and comparable securities brokerage firms and/or investment banks (collectively, “Securities/Investment Firms”), shall in no case constitute, or be treated as, Tenant Competitors under this Lease, as long as such Securities/Investment Firm (which is a tenant in the Plaza Building) does not conduct traditional banking activities (as such activities are commonly known as of the Effective Date) as its primary business activity in its Plaza Building premises and  (ii) traditional banking activities (as used in the context of this Section 19.2) are only an incidental part of the business (and are not the primary activity) of the business operations of Schwab, Merrill Lynch, UBS Paine Webber, and Dean Witter Morgan Stanley as of the Effective Date.

19.3Non-Competition Plaza Building.  On the condition that, and so long as there is not outstanding a Plaza Building Operating Requirement Failure (as defined in Section 28.5.4(ii) below) and Landlord has not recaptured the Plaza Building Space pursuant to Section 7.1.2 or Section 15.2.4, Landlord shall not lease any premises in the Plaza Building to any entity which is a Tenant Competitor on the date the lease in question (with the Tenant Competitor) is executed by Landlord.  Each lease executed by Landlord after the Effective Date with any tenant of the plaza Building shall contain a restriction providing that, for so long as Tenant continues to comply with the Plaza Building Operating Requirement, such tenant, and any subtenant of such tenant, shall not conduct traditional banking activities as its primary business activities from the Plaza Building.  Original Tenant’s rights to restrict Landlord’s rights to lease space in the Plaza Building under this Section 19.3 shall be personal to Original Tenant and to any Successor of Original Tenant.

ARTICLE 20 - - PARKING

20.1General.  The Parking Privileges (defined in Section 20.3, below) are with respect to use of the following Project parking facilities (the “Parking Facilities”): (i) the Project’s subterranean garage located on the “A” Level (the “Subterranean Garage”) and (ii) the parking annex facility located at 400 South Flower Street and commonly known as the “J-2” garage (the “J-2 Parking Annex”).  Subject to the terms and conditions of this Lease, the specific location of and areas within the Parking Facilities in which Tenant may use the Parking Privileges shall be specified by, and may, from time to time, be relocated by landlord in the exercise of its reasonable, non-discriminatory discretion.  Subject to the provisions of Section 1.4, Landlord shall have the right to modify, change, add to or delete the design, configuration, layout, size, ingress, egress, areas, method of operation, and other characteristics of or relating to the Parking Facilities at any time, and/or to make repairs or provide, on a temporary basis for, the nonuse, partial use or restricted use of portions thereof as long as Tenant’s parking rights are not materially and substantially adversely affected thereby; or if Tenant’s parking rights shall be materially and substantially adversely affected thereby; (a) as long as Landlord provides reasonable parking facilities for Tenant elsewhere (but as close to the Project as reasonably possible) (“Substitute Parking Area”), and (b) if such Substitute Parking Area is in excess of two (2) blocks from the Project, as long as Landlord provides, or agrees to pay the cost of providing, reasonable shuttle or transportation services to transport Tenant’s employees from the location of such Substitute Parking Area to the Project, and (c) so long as Landlord employs commercially reasonable efforts to make the Parking Facilities available to Tenant as soon as reasonably practical.  In the event that Landlord shall provide a Substitute Parking Area for use by Tenant, there shall be a reasonable downward adjustment of Parking Fees (defined in Section 20.3, below) payable by Tenant hereunder.

20.2Grant of Parking Privileges.  Landlord hereby grants to Tenant the following parking rights:

20.2.1A-Level Valet Parking Privileges.  Subject to Sections 20.2.3 and 20.2.5, below, as to each Increment of Space, commencing on the commencement date for such Increment of Space and continuing throughout the Term (including any applicable Extension Terms), Tenant shall rent from Landlord no less than the number of valet served parking privileges for use in the Subterranean Garage (the “A-Level Valet Privileges”) as are described in Item 7.1 of the Basic Lease Provisions with respect to such Increment of Space.  Tenant shall additionally have the right, but not the obligation, subject to availability, to rent, on a month-to-month basis, additional A-Level Valet Privileges at the Parking Fee for A-Level Valet Privileges specified herein.

20.2.2J-2 Unreserved Parking Privileges.  Subject to Sections 20.2.4 and 20.2.5, below, commencing on the First Increment Commencement Date and continuing throughout the Term (including any applicable Extension Terms), Tenant shall rent from Landlord that number of unreserved parking privileges for use of parking spaces in the J-2 Parking Annex (the “J-2 Unreserved Privileges”) which is equal to the total number of J-2 Unreserved Privileges that is described in Item 7.2 of the Basic Lease Provisions; provided, however that at any time after the First Increment Commencement Date and prior to the Fourth Increment Commencement Date, Tenant may, at its option, elect to rent hereunder a total number of J-2 Unreserved Privileges which is not more than the number of J-2 Unreserved Privileges set forth in Item 7.2 of the Basic Lease Provisions and which is not less than the number of J-2 Unreserved Privileges which, on the basis of *          -2 Unreserved Privilege per each 1000 square feet of Rentable Area leased, shall be attributable to all the Increments of Space within the Initial Premises for which there has then occurred, as of such date, an Increment Commencement Date.

20.2.3Initial Right to Reduce A-Level Parking at Commencement Date of each Increment of Space.  Notwithstanding any provision to the contrary contained herein, as to the A-Level Valet Privileges that are allocable to each Increment of Space, Tenant may, at Tenant’s option, elect to reduce the number of A-Level Valet Privileges *    [ILLEGIBLE]   ) per floor) Tenant is required to rent with respect to such increment of space (“Required A-Level Privileges”) by delivering to Landlord, prior to the date that is ninety (90) days after the commencement date with respect to such Increment of Space, written notice (“A-Level Parking Reduction Notice”) specifying: (a) the Increment of Space and that Tenant is electing to reduce the number of Required A-Level Privileges for such Increment of Space, and (b) the lesser number of Required A-Level Privileges (if any) which Tenant is electing to rent during the Term in connection with its Lease of such Increment of Space.  In the even that Tenant should fail to deliver an A-Level Parking Reduction Notice prior to the date that is ninety (90) days after the commencement date for a particular Increment of Space, Tenant shall have no

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further right under this Section 20.2.3 to reduce the number of such A-Level Valet Privileges to which it is committed to rent for such Increment of Space.

20.2.4Initial Right to Reduce J-2 Parking at Commencement Date of each Increment of Space.  Notwithstanding any provision to the contrary contained herein, as to the J-2 Unreserved Privileges that are allocable to each Increment of Space.  Tenant may, at Tenant’s option, elect to reduce the number of J-2 Unreserved Privileges *                            feet of Rentable Area to any number less *                       ) per 1,000 square feet of Rentable Area) Tenant is required to rent with respect to such Increment of Space (“Required J-2 Privileges”) by delivering to Landlord, prior to the date that in ninety (90) days after the commencement date with respect to such Increment of Space, written notice (“J-2 Unreserved Parking Reduction Notice”) specifying: (a) the Increment of Space and that Tenant is electing to reduce the number of Required J-2 Privileges for such Increment of Space, and (b) the lesser number of Required J-2 Privileges which Tenant is electing to Lease during the Term in connection with its lease of such Increment of Space.  In the event that Tenant should fail to deliver a J-2 Unreserved Parking Reduction Notice prior to the date that is ninety (90) days after the commencement date for a particular Increment of Space, Tenant shall have no further right under this Section 20.2.4 to reduce the number of such J-2 Unreserved Privileges to which it is committed to rent for such Increment of Space.

20.2.5Eight Year Right to Reduce Parking Commitment.  Tenant shall also have a one-time option (the “Second Parking Reduction Option”) to reduce the number of J-2 Unreserved Privileges that Tenant is obligated to rent hereunder as of the first (1st) day of the ninety-seventh (97th) calendar month of the Lease Term following the First Increment Commencement Date (the “Reduction Date”), subject to the following terms and conditions, each of which shall be a condition precedent to Tenant’s right to exercise its Second Parking Reduction Option: (i) Tenant shall, following any exercise of the Second Parking Reduction Option, be renting no less that *           J-2 Unreserved Parking Privileges per ten thousand (10,000) square feet of Rentable Area within the Premises *         *          ; (ii) Tenant shall deliver to Landlord, on or before the date that is sixty (60) days before the Reduction Date, a written notice (the “Reduction Notice”), which Reduction Notice shall: (a) indicate that Tenant is electing to exercise the Second Parking Reduction Option (and shall specifically reference this Section 20.2.5) and (b) specify the number of Required J-2 Unreserved Privileges which Tenant is electing to rent following its exercise of the Second Parking Reduction Option; provided, however, that Tenant shall have no right under this Section 20.2.5 to reduce the total number of Required J-2 Unreserved Privileges it rents to less than *             J-2 Unreserved Privileges per ten thousand (10,000) square feet of Rentable Area within the Premises; and (iii) as of the date on which Tenant delivers the Reduction Notice and as of the Reduction Date, there shall be no uncured Event of Default by Tenant under this Lease.  Any attempt by Tenant to exercise the Second Parking Reduction Option that does not satisfy all of the foregoing conditions shall, at the election of Landlord, be deemed null, void and of no force or effect and shall terminate Tenant’s right to exercise the Second Parking Reduction Option.  The Second Parking Reduction Option shall be personal to Original Tenant and its Successors.

20.3Parking Fees.  Commencing on the First Increment Commencement Date and continuing throughout the Term (including any applicable Extension Terms) Tenant shall pay to Landlord on the first day of each calendar month during the Term, as Additional Rent hereunder, parking fees (the “Parking Fees”) at Landlord’s then prevailing rate charged to tenants of the Project for each type of parking privilege (A-Level Valet Privileges, or J-2 Unreserved Privileges (collectively, the “Parking Privileges”)) for all of the Parking Privileges rented by Tenant for such calendar month.  Notwithstanding anything to the contrary herein, the parties acknowledge and agree that, (i) the Parking Fees charged for a particular type of Parking Privilege (A-Level Valet Privileges or J-2 Unreserved Privileges, as the case may be) from time to time during the Term shall in no case exceed the parking fee generally in force for such type of Parking Privilege as of the Effective Date (which the parties hereto stipulate to be *                   [ILLEGIBLE] Parking Privilege per month for A-Level Valet Privileges, or *                       *                   per Parking Privilege per month for J-2 Unreserved privileges), increased at a rate *                  *    per year, compounded annually, for each twelve (12) month period following the First Increment Commencement Date (the “Base Rate Standard”) and (ii) the Parking Fee charged as of any particular date during the Term for each J-2 Unreserved Privilege shall not exceed an amount equal to *                              the Base Rate Standard as of such date for a J-2 Unreserved Privilege.  Accordingly, the parties stipulate that, ([ILLEGIBLE]) as of the First Increment Commencement Date, the Parking Fees to be paid by Tenant (not including any taxes, assessments or other impositions imposed by any governmental entity) shall be: (a) *                     *                     per month for A-Level Valet Privileges and (b) *                     *      per Parking Privilege per month for J-2 Unreserved Privileges, and (2) acknowledge and agree that that such Parking Fees may be increased, from time to time during the Term, only in accordance with and subject to the limitations set forth in clauses (i) and (ii) of the immediately preceding sentence.  Landlord further agrees that the Parking Fees charged hereunder as of a particular date for each of the A-Level Valet Privileges and J-2 Unreserved Privileges shall never exceed the prevailing rate charged to tenants of the Project for such Parking Privileges as of such date.

All such Parking Fees payable by Tenant under this Section 20.3 shall be in addition to all taxes, assessments or other impositions imposed by any governmental entity (“Parking Taxes”) in connection with Tenant’s use of such Parking Privileges, which Parking Taxes shall also be paid by Tenant when due, or if required to be paid by Landlord, shall be reimbursed to Landlord by Tenant (in either case as Additional Rent) concurrently with the payment of the Parking Fees described above.

20.4Validated Parking.  Tenant’s business visitors may park in the Subterranean Garage on a space-available basis, upon payment of the prevailing fee for parking charged to visitors to the Project.  Commencing as of the earlier of the Plaza Building Commencement Date or the date on which Tenant commences business operations from its temporary retail bank branch in that certain area of the southwest portion of the South Tower ground floor lobby described as the “License Premises” in that certain Temporary Use License Agreement” [MISSING BEGINNING QUOTES] of even date herewith by and between Landlord (as licensor) and Tenant (as licensee), and continuing throughout the Term (including any applicable Extension Terms), so long as Tenant continues to comply with, and on the condition that Tenant continues to comply with the Plaza Building Operating Requirement (as defined in Section 28.5.4(ii), below) Landlord shall provide, at no cost to Tenant, up to *                           Validations each day during the Term; provided, however, that: (i) *                           by Tenant’s customers who are visiting the Premises for the specific purpose of conducting business at the Premises

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(the “Business Customers”), (ii) the Bank Customer Free Validations shall not be used by or provided to any persons other than the Business Customers, including, but not limited to Tenant’s employees, agents or visitors, or any other person who visits or occupies the Premises for any other reason,  (iii) each such Business Customer visiting the *                      Validation on any particular calendar day, *                      may be used for parking at the Project on any particular calendar day (and any portion of such *                     ? Customer Validations allocable to any particular calendar day that are not used on such calendar day may not be used on any other calendar day).  Tenant shall additionally have the right to purchase an unlimited number of additional visitor validations (“Additional Validations”) at a rate equal to *                     ? of Landlord’s then-prevailing rate charged for validations at the Building Parking Facilities; provided, however, that such Additional Validations shall be used only by Tenant’s customers (including, but not limited to, its Business Customers) and visitors to its Premises (and the parties hereto agree that, for purposes of use of the Additional Validations only (and not for purposes of use of the Customer Free Validations), Tenant’s visitors to the Premises shall include employees of Tenant who do not have offices (on an exclusive or shared basis) at the Project), and may not be used by or provided to any other persons, including, but not limited to, any to Tenant’s agents or employees who have offices (on an exclusive or shared basis) at the Premises.

20.5After Hours Use of Subterranean Garage.  Landlord agrees that after the hour of 6:00 p.m. on each business day, it will allow up to *                      Tenant’s employees then renting J-2 Unreserved Privileges to relocate their cars from the J-2 Parking Annex to the Subterranean Garage for the remainder of the evening (through 5:30 a.m. the next day) at no additional charge; provided, however, that the parties hereto acknowledge and agree that such right of Tenant’s employees to relocate cars from the J-2 Parking Annex to the Subterranean Garage shall be subject to the availability of parking spaces in the Subterranean Garage.

20.6After Hours Escorts to J-2 Parking Facilities.  Subject to availability (which shall be consistent with the standards of the Comparable Buildings) and upon request from Tenant, between the hours of 7:00 p.m. and 6:00 a.m., Landlord’s access control personnel will accompany any employee of Tenant from the ground floor lobby of the South Tower to his vehicle at the J-2 Parking Annex.

20.7Month to Month Privileges.  In addition to the Parking Privileges granted to Tenant pursuant to Section 20.2, Tenant shall have the right to rent, upon delivery of not less than forty-five (45) days advance written notice to Landlord, on a month to month basis, any “J-2 Available Privileges” (defined below).  The monthly Parking Fee payable for each J-2 Available Privilege rented by Tenant shall be the same rate applicable to each J-2 Unreserved Privilege under Section 20.3. “J-2 Available Privileges” means, as to any particular calendar month, any monthly privileges for unreserved parking in the J-2 Parking Annex which Landlord has available to lease for such month after satisfaction of all rights to rent such privileges granted to all other tenants in the Project.  Tenant acknowledges and agrees that Landlord shall have the right (exercisable in Landlord’s sole and absolute discretion and without liability to Tenant) to reduce at any time, on thirty (30) days advance written notice to Tenant, the number of J-2 Available Privileges it permits Tenant to rent under this Section 20.7 for any month in order to grant rights to such privileges to other actual or prospective Project tenants or to satisfy the rights of other Project tenants.

20.8Rules; Transfer.  Tenant shall employ commercially reasonable efforts to cause the group of its employees and occupants utilizing Tenant’s Parking Privileges to abide by all commercially reasonable, non-discriminatory rules and regulations for the use of the Parking Facilities prescribed from time to time by Landlord.  If any individual using one of Tenant’s Parking Privileges materially violates any of the terms and conditions of this Article 20 or of such parking rules and regulations on two (2) or more occasions during any twelve (12) month period, then following notice to Tenant, Landlord may suspend for ten (10) days the license granted hereunder with respect to the particular violating party’s use of the Parking Facilities, and in the event that, within twelve (12) months after any such suspension, such individual again materially violates any of the terms and conditions of this Article 20 or of such parking rules and regulations, Landlord may, following notice to Tenant, suspend for twenty (20) days the license granted hereunder with respect to the particular violating party’s use of the Parking Facilities; provided, however, that if any individual shall, willfully, repeatedly or habitually violate any of the material terms and conditions of this Article 20 or such parking rules and regulations, then following notice to Tenant, Landlord may suspend for ninety (90) days the license granted hereunder with respect to the particular violating Party’s use of the Parking Facilities.  Landlord may delegate its responsibilities hereunder to a parking operator in which case such parking operator shall have all the rights of control allocated hereunder to the Landlord, but such delegation shall not relieve Landlord of its liabilities hereunder.  The Parking Privileges rented by Tenant pursuant to this Article 20 are provided to Tenant solely for use by officers, directors, and employees of Tenant, its Affiliates, Successors, Permitted Transferees, Tenant’s Occupants and/or any other tenant of the Project (collectively, the “Permitted Parking Transferees”) and such Parking Privileges shall not otherwise be transferred, assigned, subleased or otherwise alienated by Tenant to any other type of transferee without Landlord’s prior written approval, which approval Landlord may withhold in Landlord’s sole and absolute discretion.  Notwithstanding any transfer of Parking Privileges to any Permitted Parking Transferee, Tenant shall continue to pay to Landlord, as Additional Rent hereunder, the Parking Fees; provided, however, that notwithstanding anything to the contrary herein, if and to the extent Tenant shall transfer any Parking Privileges to any person or entity that is not an Affiliate or Successor of Tenant, a Permitted Transferee, a subtenant or assignee of Tenant under a Consent Transfer consented to by Landlord pursuant to Article 15, or one of Tenant’s Occupants, Tenant shall pay, as part of the Parking Fees, for each such Parking Privilege so transferred, the prevailing rate charged to tenants of the Projects for such Parking Privileges.

20.9Reserved Parking Spaces.  In the event that Landlord shall, at any time during the Term, create or designate parking spaces in the Parking Facilities that are reserved for the use of particular tenants or occupants at the Project (“Reserved Parking Privileges”), and if Landlord shall make such Reserved Parking Privileges available for rental by tenants or occupants of the Project generally (as opposed to making the same available to a few tenants of occupants in the Project).  Landlord shall offer to Tenant the right to rent up to a pro rata portion (based upon Tenant’s then effective Percentage Share of the Project) of all such Reserved Parking Privileges Landlord has elected to make available to all tenants in the Project generally, at Landlord’s prevailing Parking Fee from time to time therefor, and otherwise on the same terms, and subject to the same conditions, on which Landlord offers such Reserved Parking Privileges to the other tenants and occupants of the Project generally.  In the event that (and to the extent that) Tenant elects to rent (by notice to Landlord delivered not more than thirty (30) days after Landlord offers to rent such Reserved Parking Privileges to Tenant) any such Reserved Parking Spaces offered to Tenant by Landlord, Tenant’s rental of such

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Reserved Parking Privileges shall be in addition to (and not in lieu of) Tenant’s obligations to rent Parking Privileges (both A-Level Valet Parking Privileges and J-2 Unreserved Parking Privileges) under this Lease.

ARTICLE 21 - - RULES AND REGULATIONS

The “Rules and Regulations” attached hereto as Exhibit “D” are hereby incorporated by reference herein and made a part hereof.  Tenant shall comply with the Rules and Regulations and, to the extent they are not inconsistent with the rights granted to Tenant under this Lease, with any reasonable and non-discriminatory amendments, modifications and/or additions thereto as may hereafter be adopted and published by written notice to tenants by Landlord for the safety, care, security, good order and/or cleanliness of the Premises, any Building and/or the Project, provided all future modifications of such Rules and Regulation shall be reasonable, and further provided such Rules and Regulations are not modified or enforced to unreasonably interfere with the Permitted Uses and are not discriminatorily enforced against Tenant.  Landlord shall make good faith efforts to enforce the Rules and Regulations on a consistent basis against all tenants in the Project.

ARTICLE 22 - - ESTOPPEL CERTIFICATES

At any time and from time to time upon not less than fifteen (15) business days’ prior written notice by either party (the “Requesting Party”) (but no more frequently than two (2) times in any twelve (12) month period), the other party (the “Responding Party”) shall execute, acknowledge and deliver to the Requesting Party an estoppel certificate, which, as submitted by the Requesting Party, shall be substantially in the form of Exhibit “E” attached hereto (or such other form as may be reasonably required by any prospective mortgagee or purchaser of the Project or Transferee of Tenant’s interests, or any portion thereof, provided that the provisions thereof shall bear only on factual issues relating to this Lease and Tenant’s occupancy of the Premises), indicating therein to the actual knowledge of the Responding Party, without any duty of inquiry or investigation, any exceptions thereto that may exist at that time, and shall also contain any other factual information reasonably requested by the Requesting Party.  Any statement delivered pursuant to this Article 22 may be relied upon by any prospective transferee of Tenant’s interest or Landlord’s purchaser of the fee of Buildings or the Project (or any portion thereof) or any mortgagee, ground lessor or other like encumbrancer thereof or any assignee of any such encumbrance upon the Buildings or the Project (or any portion thereof).

ARTICLE 23 - - ENTRY BY LANDLORD

23.1In General.  Subject to the provisions of Section 16.8.2 of this Lease, and provided that Landlord uses efforts consistent with Institutional Owner Practices to minimize any interference with Tenant’s use of the Premises, Landlord may enter the Premises at all reasonable times upon reasonable notice to Tenant (provided, however, that no such notice shall be required in the case of an emergency) to: make any repairs to the Premises or the Building reasonably required or deemed reasonably necessary (consistent with Institutional Owner Practices) by Landlord and to erect such equipment, including scaffolding, as is reasonably necessary to effect such repairs (provided that such right of entry for such repairs shall also apply to Landlord’s contractors); inspect the Premises; exhibit the Premises to prospective purchasers, lenders or, during the last twelve (12) months of the Term, tenants; determine whether Tenant is complying with all of its obligations under this Lease; supply janitorial and other services to be provided by Landlord to Tenant under this Lease; post notices of non-responsibility; and make repairs or improvements in or to the Project or the Premises; provided, however, that all work associated with such repairs or improvements shall be done as promptly as reasonably possible and so as to cause as little interference to Tenant as reasonably possible.  Subject to the terms of Section 16.8.2, Tenant hereby waives any claim for damages for any injury or inconvenience to, or interference with, Tenant’s business, any loss of occupancy or quiet enjoyment of the Premises or any other loss occasioned by such entry; provided, however, that nothing contained herein shall be construed to waive any liability of Landlord for personal injury and/or property damage resulting from Landlord’s gross negligence or willful misconduct.  Landlord shall at all times have and retain a key with which to unlock all of the doors in, on or about the Premises (excluding Tenant’s vaults, safes and similar areas designated by Tenant in writing in advance pursuant to Section 23.2, below), and Landlord shall have the right to use any and all means by which Landlord may in good faith deem proper to open such doors to obtain entry to the Premises, and any entry to the Premises obtained by Landlord by any such means, or otherwise, shall not under any circumstances be deemed or construed to be a forcible or unlawful entry into or a detainer of the Premises or an eviction, actual or constructive, of Tenant from any part of the Premises.  Such entry by Landlord shall not act as a termination of Tenant’s duties under this Lease.  In connection with any entry by Landlord into the Premises, Landlord shall take action consistent with Institutional Owner Practices under the circumstances to avoid and minimize damage to the Premises and to Tenant’s property and shall, if Landlord’s entry into the Premises will materially interfere with the conduct or operation of Tenant’s business from the Premises, be performed on weekends and/or after normal business hours on weekdays, and Landlord shall clean up any mess and repair any damage to the Premises caused by Landlord and/or Landlord’s agents during such entry.  If Landlord shall be required to obtain entry in an emergency by means other than a key provided by Tenant, the cost of such entry shall be payable by Tenant to Landlord as Additional Rent.

23.2Secured Areas.  Tenant may, by written notice to Landlord, designate portions of the Premises as “Secured Areas” should Tenant require such areas for the purpose of securing certain valuable property or confidential information.  Landlord and Landlord’s Agents may not enter such Secured Areas, except:  (a) in the event of an emergency or  (b) to perform an inspection, or perform any of Landlord’s duties or work required hereunder (unless Tenant advises Landlord that it is unnecessary to perform such duties or work and that the failure to do so does not and will not present a threat to the safety or security of the Project or the people working at or visiting the Premises, in which case Landlord shall provide Tenant with reasonable notice of the date and time of entry (except in the case of an emergency).

ARTICLE 24 - - LANDLORD’S LEASE UNDERTAKINGS-EXCULPATION FROM PERSONAL

LIABILITY TRANSFER OF LANDLORD’S INTEREST

24.1Landlord’s Lease Undertakings.  Notwithstanding anything to the contrary contained in this Lease or in any exhibits, riders or addenda hereto attached (collectively the “Lease Documents”), it is expressly understood and agreed by and between the parties hereto that:  (a) the recourse of Tenant or its successors or assigns

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against Landlord (and the liability of Landlord to Tenant, its successors and assigns) with respect to:  (i) any actual or alleged breach or breaches by or on the part of Landlord of any representation, warranty, covenant, undertaking or agreement contained in any of the Lease Documents or (ii) any matter relating to Tenant’s occupancy of the Premises (collectively, “Landlord’s Lease Undertakings”) shall be limited solely to Landlord’s equity interest in the Project and all available insurance proceeds: (b) Tenant shall have no recourse against any other assets of Landlord ?

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partners, members, managers or interest holders or any of their respective directors, officers, shareholders, members, employees, agents, partners, beneficiaries, trustees or representatives (each an “Owner Party” and collectively, the “Owner Parties”); (c) except to the extent of Landlord’s interest in the Project, no personal liability or personal responsibility of any sort with respect to any of Landlord’s Lease Undertakings or any alleged breach thereof is assumed by, or shall at any time be asserted or enforceable against, Landlord or any Owner Parties; and (d) at no time shall Landlord or any Owner Party be responsible or liable to Tenant for any lost profits, lost economic opportunities or any form of Consequential Damages as the result of any actual or alleged breach by Landlord of Landlord’s Lease Undertakings.  In addition, with the exception of claims of fraud, willful misconduct or bad faith by Tenant, claims arising under the terms of Article 25, or Tenant’s actions under Section 9.3, above, Tenant shall not be liable under any circumstances for injury or damage to, or interference with, Landlord’s business, including but not limited to, loss of profits, loss of business opportunity, or loss of goodwill, in each case, however occurring.

24.2Transfer of Landlord’s Interest.  Tenant acknowledges that Landlord has the right to transfer all or any portion of its interest in the Project or Building and in this Lease, and Tenant agrees that in the event of any such transfer to a bona fide transferee in good faith who agrees to assume the obligations of Landlord under this Lease, Landlord shall automatically be released from all liability under this Lease attributable to the period of time prior to the date of the transfer and Tenant agrees to look solely to such transferee for the performance of Landlord’s obligations hereunder attributable to the period of time after the date of transfer, and such transferee shall be deemed to have fully assumed and be liable for all obligations of this Lease to be performed by Landlord thereafter.  Tenant shall attorn to any such transferee.

ARTICLE 25 - - HOLDOVER TENANCY

Subject to the terms of this Article 25, if Tenant holds possession of the Premises after the expiration or termination of the Term of this Lease, by lapse of time or otherwise, without the express consent of Landlord, Tenant shall become a tenant at sufferance upon all of the terms contained herein, except as to Term and Base Rent.  During any such holdover period, Tenant shall pay to Landlord (in addition to all other Rent payable hereunder), commencing on the first (1st) day of such holdover period and continuing through the ninetieth (90th) day of such holdover period, a monthly Base Rent in an amount equal to one hundred twenty-five percent (125%) of the Base Rent applicable during the last monthly rental period of the Lease Term prior to such holdover period, and commencing on the ninety-first (91st) day of the holdover period, a monthly Base Rent in an amount equal to one hundred fifty percent (150%) of the Base Rent applicable during the last monthly rental period of the Lease Term prior to such holdover period.  The monthly Base Rent payable for such holdover period shall in no event be construed as a penalty or as liquidated damages for such retention of possession.  Neither any provision hereof nor any acceptance by Landlord of any Rent after any such expiration or earlier termination shall be deemed a consent to any holdover hereunder or result in a renewal of this Lease or an extension of the Term, or any waiver of any of Landlord’s rights or remedies with respect to such holdover.  Notwithstanding any provision to the contrary contained herein:  (a) Landlord expressly reserves the right to require Tenant to surrender possession of the Premises upon the expiration of the Term of this Lease or upon the earlier termination hereof or at any time during any holdover, and, except as provided in (b) below, the right to assert any remedy at law or in equity to evict Tenant and collect damages in connection with any such holdover (provided, however, that Landlord shall not commence any such proceedings to evict Tenant on the basis of such holdover during the thirty (30) day period following the expiration date of this Lease), and (b) if Tenant fails to surrender the Premises within thirty (30) days following the termination or expiration of this Lease.  Tenant shall indemnify, defend and hold Landlord harmless from and against any and all Claims, Damages and Expenses, including, without limitation, all lost profits and other Consequential Damages, attorney’s fees, consultants’ fees and court costs incurred or suffered by or asserted against Landlord by reason of Tenant’s failure to so surrender the Premises in accordance with the provisions of this Lease pertaining to the period of time commencing thirty (30) days following the expiration or termination of this Lease.

ARTICLE 26 - - NOTICES

All notices, demands, statements, designations, approvals, consents or other communications (collectively, “Notices”) given or required to be given by either party to the other hereunder or by law shall be in writing, shall be: (a) delivered by a nationally recognized overnight courier service which provides evidence of delivery, or (b) delivered personally, addressed to the Landlord at the address for Landlord set forth in Item 10 of the Basic Lease Provisions and to Tenant at the address for Tenant set forth in Item 10 of the Basic Lease Provisions, or, from and after the Commencement Date, to the Tenant at the Premises, whether or not Tenant has departed from, abandoned or vacated the Premises, or addressed to such other address or addresses as either Landlord or Tenant may from time to time designate to the other in writing.  Any Notice will be deemed given:  (i) the date the overnight courier delivery is made, or (ii) the date personal delivery is made.  Notwithstanding any provision of this Lease to the contrary, in the case where California statutory law requires that any notice, notice to quit or pay rent, summons or complaint (or any other form of writing required in connection with the assertion of rights against Tenant, the enforcement of Tenant’s obligations under this Lease or the termination of Tenant’s rights hereunder) (collectively, “Statutory Written Notices or Complaints”) must be delivered or served in a particular form, delivered to or served on Tenant through delivery to or service on a particular representative of Tenant, delivered or served in a particular manner (or by a particular method), for purposes of determining compliance with such applicable statutory requirements, the time, manner or method of delivery of all such Statutory Written Notices or Complaints delivered to or served on all of the Tenant addresses for notices listed in Item 10 of the Basic Lease Provisions (other than the timing, manner and/or method of delivery of the Statutory Written Notice or Complaint to the First Addressee listed in Item 10) shall be disregarded (so long as copies of such Statutory Written Notice or Complaint are delivered to all such other Tenant addresses in accordance with the first sentence of this Article 26 within two (2) business days of delivery to the First Addressee listed in Item 10), and if the timing, manner and, method of delivery and form of the Statutory Written Notice or

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Complaint delivered to the First Addressee listed in Item 10 shall satisfy the applicable statutory requirements, then such statutory requirements shall be deemed satisfied with respect to the timing, manner, and method of delivery and form with respect to all Tenant addresses as of the date of delivery to the First Addressee.

ARTICLE 27 - - BROKERS

The parties recognize as the broker(s) who procured this Lease the firm(s) specified in Item 8 of the Basic Lease Provisions (the “Brokers”) and agree that Landlord shall be responsible for the payment of the brokerage commission (a) to Tenant’s Broker required under the separate written agreement between Tenant’s Broker and Landlord (“Commission Agreement”) and (b) to Landlord’s Broker required under the separate written agreement between Landlord and Landlord’s Broker, and that Tenant shall have no responsibility therefor.  Subject to the foregoing, if Tenant or Landlord has dealt with any other person or real estate broker (other than the Brokers) in respect to leasing, subleasing or renting space in the Building, Tenant or Landlord, as the case may be, shall be solely responsible for the payment of any fee due said person or firm claiming to represent Tenant or Landlord, as appropriate, and shall protect, indemnify, hold harmless and defend the other party from any liability in respect thereto.  If Landlord fails to pay any amounts due under the Commission Agreement, Tenant’s Broker may send written notice to Landlord and Tenant of such failure, and if Landlord fails to pay such amounts within sixty (60) days after Landlord receives said notice, Tenant shall be entitled (but not obligated) to pay any such amounts to Tenant’s Broker, and offset such amounts paid to Tenant’s Broker by Tenant against Tenant’s next rental obligations which may become due under this Lease together with interest at the Interest Rate from the date such amounts are paid to Tenant’s Broker to the date of the offset.  Any amounts so offset from Tenant’s rental obligations hereunder shall no longer be owed from Landlord to such Broker.

ARTICLE 28 - - SIGNAGE AND PROJECT IDENTITY RIGHTS

28.1Tenant Signs On Full Floors.  On each full floor of the South Tower Premises, Tenant may, at its sole cost and expense, install identification signage in the elevator lobby of such floor as shall reasonably be determined by Tenant.

28.2Tenant Signs On Multi-Tenant Floors.  If other tenants occupy space on a floor of the South Tower on which a portion of the Premises is located, Tenant’s identifying signage in the elevator lobby on such floor shall be provided by Landlord, at Tenant’s sole cost and expense, and such signage shall be comparable to that used by Landlord for other similar, multi-tenant floors in the Project, and shall be consistent with the locational and other standards (consistent with Institutional Owner Practices) for multi-tenant floor tenant signage in the Project, as the same may exist and/or be modified from time to time by Landlord; provided, however, that if Tenant is leasing fifty percent (50%) or more of (but not all of) the Rentable Area on any such floor:  (a) in the case where Tenant and one other tenant shall each lease one-half (1/2) of the Rentable Area on the floor in question, each of Tenant and such other tenant shall be permitted to install (at their respective sole cost and expense) prominent elevator lobby signage (of equal size) in a form and design reasonably approved in advance by Landlord and (b) in the case where Tenant shall lease more than fifty percent (50%) of the Rentable Area on the floor in question, Tenant shall be granted the right to install (at Tenant’s sole cost and expense) a prominent identity sign in the elevator lobby of such floor in a form and design reasonably approved in advance by Landlord, and any other elevator lobby identity sign granted by Landlord to any other tenant located on such floor shall proportionally reflect (in terms of size and prominence) the smaller Rentable Area leased by such other tenant on such floor (in comparison to the Rentable Area leased by Tenant.)

28.3Directory Signage.  Tenant shall be permitted, at Tenant’s sole cost and expense, to use, at Tenant’s option, up to *                      per each 1,000 square feet in the South Tower Premises on or in the South Tower tenant directory located in the ground floor lobby of the South Tower (the “South Tower Directory”), if any, for the installation of Tenant’s name and the names of its Permitted Assignees, and each of the foregoing entities’ departments, officers and employees.  Notwithstanding the foregoing, Landlord may, at Landlord’s option, elect to (i) remove the existing South Tower Directory and replace the same with a computerized, electronic directory (the “Electronic South Tower Directory”) which shall be located in the ground floor lobby of the South Tower, in which case:  (a) all of Tenant’s rights to space or lines in the South Tower Directory, if any, shall terminate and be of no further force or effect and (b) Tenant shall be permitted to use up to *                     per each 1,000 square feet in the South Tower Premises in the Electronic South Tower Director, for display or Tenant’s name and the names of its Permitted Assignees, and each of the foregoing entities’ departments, officers and employees or (ii) so long as the failure to provide any tenant directory in the South Tower ground floor lobby shall be consistent with then effective Institutional Owner Practices, remove the existing South Tower Directory and not provide any replacement (electronic or otherwise) for the South Tower Directory.  Subject to the provisions of Section 28.5.3, in the event that there is a South Tower Directory or an Electronic South Tower Directory provided by Landlord in the South Tower ground floor lobby, on the condition that Tenant’s Project Name Rights shall not have terminated hereunder, effective upon the effectiveness of the grant to Tenant of the Project Name Rights (defined in Section 28.7, below) pursuant to Section 28.7, and subject to Tenant satisfying the Initial Occupancy Threshold (defined in Section 28.7, below), Landlord shall include a Tasteful (defined in this Section 28.3, below) reference to the name of the Project as “City National Plaza” on such South Tower Directory or in such Electronic South Tower Directory (and in the case of any Electronic South Tower Directory, such sign designating the name of the Project as City National Plaza may appear at any location on the screen of such Electronic South Tower Directory (or may appear only on the first “page” of such Electronic South Tower Directory)).  If following any such inclusion to “City National Plaza” on the South Tower Directory or within the Electronic South Tower Directory, Tenant’s Project Name Rights shall terminate pursuant to the provisions of Section 28.7, all rights of the Tenant under this Section 28.3 to require Landlord to include a reference to “City National Plaza” on the South Tower Directory (or within the Electronic South Tower Directory) shall also automatically terminate.  For purposes of this Article 28, signage shall be “Tasteful” only if and to the extent that such signage is approved as such by Landlord’s Project Signage Consultant (defined in this Section 28.3, below); provided, however, that Landlord’s Project Signage Consultant shall agree that at least one sign (which is large enough to be observed) designating the name of the Project as “City National Plaza” on any South Tower Directory or Electronic South Tower Directory shall be Tasteful.  The parties hereto agree, that for purposes of this Lease, “Landlord’s Project Signage Consultant” shall be Sussman/Prezja or any similarly qualified architectural or design firm selected from time to time by Landlord to replace Sussman/Prezja as Landlord’s Project Signage Consultant.  Notwithstanding any provision to the contrary contained in this Lease, the parties hereto hereby agree that Landlord shall not be required to have or maintain a South

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Tower Directory or an Electronic South Tower Directory in the South Tower Lobby to the extent that the failure to have or to maintain a South Tower Directory or an Electronic South Tower Directory shall not be inconsistent with Institutional Owner Practices, and that, in the event that Landlord shall properly elect and shall continue to elect not to have or maintain a South Tower Directory or an Electronic South Tower Directory in the South Tower ground floor lobby, Tenant shall have no rights under this Section 28.3 to any lines on or in any South Tower Directory or on or in any Electronic South Tower Directory.

28.4Prohibited Tenant Signage and Other Items.  Except as specifically set forth in this Article 28, Tenant may not install any signs on the exterior or roof of the Project or in any area which is a part of (or is visible from) the Common Areas or from the exterior of the Premises or from the exterior of any Building in the Project.  Except as otherwise provided in this Article 28, any signs or other items visible from the Common Areas or from the exterior of the Premises or from the exterior of any Building in the Project shall be subject to the prior approval of Landlord, which approval may be withheld in Landlord’s sole and absolute discretion.  Any such signs, notices, logos, pictures, names or advertisements which are installed in the Premises and that have not been separately approved by Landlord may be removed by Landlord upon two (2) business days notice by Landlord to Tenant, at the sole cost and expense of Tenant; provided, however, that the foregoing restrictions shall not apply to customary, non-electrified retail bank signage located in the interior of the Plaza Building Space that is comparable to that installed in retail bank branch offices of other first-class banks located in the ground floors of Comparable Buildings in the downtown Los Angeles Central Business District.

28.5Tenant’s Exterior Signage.

28.5.1Tenant’s Exterior Signage Rights.  Subject to the provisions of this Article 28, commencing on the First Increment Commencement Date, and, continuing throughout the Term, including any Extension Terms, Tenant shall be entitled to install, operate and maintain the following exterior signs in connection with Tenant’s lease of the Premises (collectively “Tenant’s Exterior Signs”):

(i)South Tower.  Tenant shall have the right to:  (a) designate the name of the South Tower as “City National Tower” (the “Tower Name Rights”) and (b) to install, operate and maintain the following signs on the physical exterior of the South Tower (all such signage is collectively referred to herein as the “South Tower Signs”):

(a)   Two (2) signs identifying Tenant’s name as “City National Bank,” together with Tenant’s logo, located at the top of the South Tower (the “South Tower Top Signs”), in the locations and having the dimensions, color, illumination and composition as more specifically described on Exhibit “L” attached hereto, but otherwise, if and to the extent not otherwise described on Exhibit “L”, of a composition reasonably designated by Tenant and reasonably approved by Landlord in advance in accordance with this Article 28 (taking into account the Project Exterior Signage Program (defined in Section 28.5.2, below));

(b)   Three (3) eyebrow signs identifying Tenant’s name as “City National Bank,” together with Tenant’s logo, located on the exterior granite face of the South Tower above the level of the pillar openings at the base of the South Tower and below the third (3rd) floor windows of the South Tower, on, subject to the provisions of Section 28.9.6, below, the east, south and west sides of the South Tower, and facing Flower Street, 6th Street and Figueroa Street, respectively, in the locations and having the dimensions, color, illumination and composition as more particularly set forth on Exhibit “M” attached hereto, but otherwise, if and to the extent not otherwise described on Exhibit “M”, of the composition reasonably designated by Tenant and reasonably approved by Landlord in advance in accordance with this Article 28 (taking into account the Project Exterior Signage Program) (the “South Tower Eyebrow Signs”); and

(c)   Three (3) signs reading “City National Tower” located above the main entrance door on the north side of the South Tower and above the northernmost entrance doors on the east and west sides of the South Tower in the exact locations and having the dimensions, color, and composition as more particularly set forth on Exhibit “N” attached hereto, but otherwise, if and to the extent such characteristic or characteristics are not otherwise described on Exhibit “N”, of the composition reasonably designated by Tenant and reasonably approved by Landlord in advance in accordance with this Article 28 (taking into account the Project Exterior Signage Program) (the “South Tower Entrance Signs”).

(ii)Plaza Building.  Tenant shall also have the right, subject to the provisions of this Article 28, to install, operate and maintain one (1) sign identifying Tenant’s name as “City National Bank,” together with Tenant’s logo, located on the exterior of the Plaza Building (the “Plaza Building Sign”) on the east (Flower Street) side of the Plaza Building, in the location and having the dimensions, colors, illumination and composition as more specifically described on Exhibit “O” attached hereto, but otherwise, if and to the extent not otherwise described on Exhibit “O”, of the composition reasonably designated by Tenant and reasonably approved by Landlord in accordance with this Article 28 (taking into account the Project Exterior Signage Program).

(iii)Bank Directional Signage.  Tenant shall have the right, so long as there is not an outstanding Plaza Building Operating Requirement Failure and Landlord has not recaptured the Plaza Building Space pursuant to Section 7.1.2 or Section 15.2.4 and Tenant is Occupying the Plaza Building Space, to require Landlord to install directional signs (“Bank Directional Signs”) (providing directional assistance) for passage to the Plaza Building Space from:  (a) the valet portion of the parking area in the Subterranean Garage and (b) Figueroa Street, to the Plaza Building Space, in the locations described on Exhibit “O” attached hereto.

(iv)Future Pylon Signs.  Tenant shall have the right, subject to the provisions of this Article 28, effective upon the effectiveness of the grant to Tenant of the Project Name Rights pursuant to Section 28.7, and subject to Tenant’s satisfaction of the Initial Occupancy Threshold, to require Landlord to install an inscription prominently identifying the Projects as “City National Plaza” (a “CNB Project Inscription”) within the lowest of the designated signage fields (the “Designated Tenant Signage Field”), in the manner indicated on Exhibit “PP” attached hereto, on those certain four (4) pylon signs at the location shown on Exhibit “P” which

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Landlord may construct (but shall not be obligated to construct) in the future at the four (4) corners of the Project (the “Future Pylon Signs”) (when and if such Future Pylon Signs are installed).  The parties hereto acknowledge and agree that:  (a) Exhibits “PP” and “P” is provided for purposes of illustration only and is not intended to and does not constitute a representation or warranty by Landlord as to the future construction, configuration, or size of the Future Pylon Signs, (b) that the locations and dimensions of the Future Pylon Signs shall be determined by Landlord in Landlord’s sole and absolute discretion, and shall be subject to modification by Landlord in Landlord’s sole and absolute discretion (provided that in all cases the CNB Project Inscription shall be a prominent inscription in the lowest Designated Tenant Signage Field of each Future Pylon Sign), and (c) that except for Tenant’s rights pursuant to this Section 28.5.1(iv) to have Landlord install the CNB Project Inscriptions on the Future Pylon Signs, Tenant shall have no rights under this Lease (or otherwise) with respect to such Future Pylon Signs, and Landlord shall have the right to grant to any other tenant or occupant of the Project identity or signage rights on such Future Pylon Signs.  If by December 31, 2008, Landlord:  (x) has not installed all of the four (4) the Future Pylon Signs in the Project, Tenant shall have the right to require Landlord to install at Tenant’s sole cost and expense additional signage or identity presentation at the Project containing a reference or inscription identifying the Project as “City National Plaza” (the “Full Pylon Substitute”), which Full Pylon Substitute (when considered together with the CNB Project Inscription(s), if any, which have been inscribed on the Future Pylon Signs, if any, that have been installed) shall be designed and located by Landlord, but shall be of such nature and in such location in the Project, and shall have such dimensions, composition, design, coloring, and illumination such that the CNB Project Inscription on the Full Pylon Substitute shall have equivalent visual impact and prominence (from the perspective of third party visitors to the Project) as the CNB Project Inscriptions would have had if all four (4) Future Pylon Signs had been constructed, and/or installed by Landlord (with each such Future Pylon Sign having had “City National Plaza” so inscribed in the lowest Designated Tenant Signage Field of each such Future Pylon Sign) (collectively, the “CNB Inscription Visual Impact”), and (y) in the event that the four (4) Future Pylon Signs are installed by Landlord in the Project, but as of December 31, 2008, due to the existence of Other Tenant Prior Rights, (defined in Section 28.5.3, below) and the operation of Section 28.5.3, a CNB Project Inscription is not located on all of the Future Pylon Signs (with the cumulative reference to all such inscriptions not installed being referred to as the “Lost CNB Inscriptions,” and with the cumulative reference to those Future Pylon Signs having CNB Project Inscriptions under circumstances where one or more Future Pylon Signs do not have CNB Project Inscriptions being referred to herein as “Partial CNB Set Pylons”), Tenant shall have the right to require Landlord to provide at Tenant’s sole cost and expense such other signage and/or identity presentation at the Project containing a reference to the Project as “City National Plaza” (the “Partial Pylon Sign Substitute”), which Partial Pylon Sign Substitute shall be designed and located by Landlord, but shall be of such a nature, in such a location in the Project, and shall have such dimensions, composition, design, coloring, and illumination such that the CNB Project Inscription on such Partial Pylon Sign Substitute, together with the CNB Project Inscriptions on the Partial CNB Set Pylons, shall have equivalent visual impact and prominence (from the perspective of third party visitors to the Project) as the CNB Project Inscriptions on the four (4) Future Pylons Signs would have had if a CNB Project Inscription had been installed on each of the four (4) Future Pylon Signs.  If at any time subsequent to the installation of the Full Pylon Substitute or the Partial Pylon Sign Substitute, Landlord is permitted to install CNB Project Inscriptions on all four (4) Future Pylon Signs (without violating other Tenant Prior Rights), Tenant shall have the right to require Landlord to install a CNB Project Inscription on each then existing Future Pylon Sign that is then without a CNB Project Inscription (provided that Landlord shall be permitted to remove the Full Pylon Substitute or the Partial Pylon Substitute, as the case may be, (and all of Tenants’ rights thereto shall terminate)), with Tenant to reimburse Landlord for all of Landlord’s Actual Costs incurred in installing the new CNB Project Inscriptions and removing the Full Pylon Substitute or the Partial Pylon Sign Substitute, as the case may be.

(v)Other Project Signs.  Tenant shall have the right, subject to the provisions of this Article 28 and subject to Tenant’s satisfaction of the Initial Occupancy Threshold, to require Landlord to install (at Tenant’s sole cost and expense) a Tasteful (as determined by Landlord’s Project Signage Consultant) inscription identifying the Project as “City National Plaza” on those certain other existing signs and/or signs to be constructed in the future by Landlord at the Project as shown on Exhibit “OO” attached hereto (if and when such signs are constructed), which signs shall have such other purposes, and/or shall include the signs and/or logos of such other Project tenants as is described on (and otherwise shall have such Project locations as are identified on) Exhibit “OO” attached hereto (collectively, the “Other Project Signs”), in accordance with the Project Exterior Signage Program.  The parties hereto acknowledge and agree that:  (a) that the locations and dimensions of such Other Project Signs shall be determined by Landlord in Landlord’s sole and absolute discretion and shall be subject to modification by Landlord in Landlord’s sole and absolute discretion, and (b) that except for Tenant’s rights described in this Section 28.5.1(v) to have Landlord install inscriptions identifying the Project as “City National Plaza” on the Other Project Signs, Tenant shall have no rights under this Lease with respect to such Other Project Signs.

Each of Landlord and Tenant hereby acknowledge that, to the extent that (a) Tenant’s logo is permitted to be included hereunder on, and is included on, the South Tower Top Signs, the Eyebrow Signs and/or the Plaza Building Sign, and (b) Exhibit “L” (with respect to the South Tower Top Signs), Exhibit “M” (with respect to the Eyebrow Signs), and/or Exhibit “O” (with respect to the Plaza Building Sign) attached hereto does not specify the dimensions of that portion of the South Tower Top Signs, or the Plaza Building Sign which shall include Tenant’s logo, the portion of each such sign containing the Tenant’s logo shall be of a color, illumination and composition that shall be consistent with the remainder of the South Tower Top Signs, the Eyebrow Signs or the Plaza Building Sign, as applicable, and shall be of the composition reasonably designated by Tenant and reasonably approved by Landlord in accordance with this Article 28 (taking into account the Project Exterior Signage Program).

28.5.2Landlord’s Approval Specifications and Permits.  Except as otherwise set forth on Exhibits “L”, “M”, “N”, and “O”, the graphics, materials, color, design, lettering, lighting, size, illumination, specifications and location of each of Tenant’s Exterior Signs shall (a) in all cases be consistent with the requirements of Landlord’s Project signage program attached hereto as Exhibit “P” (the “Project Exterior Signage Program”) and (b) otherwise, to the extent not specifically set forth in the Project Exterior Signage Program, shall be subject to the prior written approval of Landlord, which approval shall not be unreasonably withheld, conditioned or delayed, based upon the consistency of each such Tenant Exterior Sign with the standards for architectural compatibility of Landlord and the Comparable Buildings.  In addition, all of Tenant’s rights to install, operate and maintain each Tenant Exterior Sign shall be subject to and conditional upon (i) Tenant obtaining, at its sole cost and expense, all required governmental permits and approvals for (and applicable to) each such Tenant Exterior Sign and (ii) the continuing

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compliance (at Tenant’s sole cost and expense) of each of Tenant’s Exterior Signs with all applicable Laws.  Landlord shall reasonably cooperate (at no cost to Landlord (unless Tenant shall agree in writing to reimburse Landlord for its costs and shall so reimburse Landlord within ten (10) business days of Landlord’s request therefor) with Tenant in seeking to obtain all such permits and approvals.

28.5.3Superior Signage and Identity Rights.  Tenant acknowledges and agrees that, notwithstanding any provision of this Lease to the contrary:  (a) each and all of Tenant’s rights under this Article 28 (including without limitation, each and all of Tenant’s rights to the South Tower Signs, the Plaza Building Sign, the Bank Directional Signs, the Future Pylon Signs (and/or the Full Pylon Substitute or the Partial Pylon Sign Substitute), the Other Project Signs, the Tower Name Rights, the Project Name Rights (defined in Section 28.7, below)) and all of Tenant’s rights (the “Directory Inscription Rights”) under Section 28.3 to require Landlord to include a reference to “City National Plaza” on the South Tower Directory (or within the Electronic South Tower Directory) (collectively, the “Article 28 Rights”) shall be subject and subordinate to the “Other Tenant Prior Rights” (“Other Tenant Prior Rights”) described on Exhibit “O” attached hereto, (b) Tenant’s rights to Tenant’s Exterior Signs, the Tower Name Rights, and the Directory Inscription Rights shall not apply to the extent they are inconsistent with the rights of the tenant under the BofA Lease (as defined in Exhibit “Y”), until the expiration or the sooner termination of the BofA Lease, which, as indicated on Exhibit “Y”, is scheduled to expire on September 15, 2004, (c) Tenant’s Tower Name Rights, Project Name Rights (as defined in Section 28.7, below), Directory Inscription Rights, and rights with respect to the Future Pylon Signs and the Other Project Signs shall not apply to the extent they are inconsistent with the rights of the tenant under the ARCO Lease (as defined in Exhibit “Z”) until the expiration or sooner termination of the ARCO Lease, which as indicated in Exhibit “Z”, is scheduled to expire on August 31, 2005, (d) so long as Landlord does not cause the Other Tenant Prior Rights set forth in the Lease (“Other Tenant Lease”) held by any “Other Tenant” (defined in Exhibit “AA” attached hereto) (collectively, the “Other Tenants”) to become greater in any sense that materially conflicts with Tenant’s Article 28 Rights, Landlord shall have the right to renew or extend the term of any such Other Tenant Lease and/or to modify the rights and obligations of any such Other Tenant under any such Other Tenant Lease without the need to obtain Tenant’s consent or approval, and (e) Landlord shall not, in any case, be required to take any action under this Article 28 (or otherwise relating to the rights granted to Tenant under this Article 28) which would in Landlord’s good faith judgment violate any Other Tenant Prior Right, and any failure, inability and/or delay of Landlord in providing to Tenant the benefit of any of the Article 28 Rights which is due in any way to the existence and/or superiority of any such Other Tenant Prior Rights shall not constitute any form of breach or default by Landlord under this Lease, shall not subject Landlord to any liability to Tenant, and shall not give rise to any other right or remedy in favor of Tenant under this Lease, at law or in equity.

28.5.4Occupancy Requirements.

(i)Generally.  Notwithstanding any provision of this Lease to the contrary, by notice (“Identity Rights Termination Notice”) delivered to Tenant, Landlord, at its option, may elect to terminate all of Tenant’s rights:  (a) with respect to the South Tower Signs, (b) with respect to the Tower Name Rights, (c) with respect to the Future Pylon Signs (and/or the Full Pylon Substitute or the Partial Sign Substitute), (d) with respect to the Other Project Signs, (e) with respect to the Project Name Rights as set forth in Section 28.7, below, and (f) with respect to the Directory Inscription Rights (collectively, the “Tenant Project Identification Rights”), at any time that Original Tenant (or any successor of Original Tenant) and its Affiliates are no longer Occupying at least *              *                                         Square feet of Rentable Area (not including any storage space) in the South Tower (the “South Tower Occupancy Requirement”); provided, however, that: (x) Landlord may only terminate Tenant’s rights to the South Tower Signs if Landlord, at the time of such termination:  (1) has granted or intends to grant to an existing   *

Prospective Identity Tenant”), rights which are inconsistent with (in whole or in part) Tenant’s rights to the South Tower Signs, and pursuant to such rights, such existing or prospective tenant is intended to place its name and/or logo on the exterior of the South Tower, including on the South Tower parapet, and (y) in the case involving a Prospective Identity Tenant where under the preceding clause (x)(2), at the time of the termination of the Tenant Project Identification Rights, Landlord has not yet executed a lease for space in the Project covering *                                            )) square feet of Rentable Area, such termination of the Tenant Project Identification Rights shall be conditional upon Landlord executing a lease for space in the Project covering *                                                square feet of Rentable Area with such Prospective Identity Tenant (or an Affiliate thereof) within six (6) months following delivery to Tenant of the Identity Rights Termination Notice.  So long as Landlord is granting Project Name Rights (or its equivalent) or rights to South Tower Top Signs to such Existing Identity Tenant or Prospective Identity Tenant, subject to the provisions of the preceding sentence, immediately upon delivery of any Identity Rights Termination Notice, all of Tenant’s Project Identification Rights shall automatically terminate, and Landlord shall be permitted to grant to one or more subsequent tenants any remaining parts of the Tenant Project Identification Rights.  Following any such termination of the Tenant Project Identification Rights:  (a) Landlord shall have the right, from that time forward, to rename the Project, (b) Landlord shall have the right, from that time forward, to rename the South Tower, (c) Landlord shall have the right to require Tenant to remove all of the South Tower Signs in accordance with the terms of Section 28.6, below (and Landlord shall have the right to remove the names “City National Plaza” and “City National Tower” from all Project signs), and (d) Landlord shall have the right to install and operate and maintain (or allow any third party to install and operate and maintain) additional signage on the South Tower and/or the Plaza Building, without being restricted by the terms of this Article 28.

(ii)Plaza Building Operating Requirement.  Notwithstanding the terms of this Section 28.5, by written notice delivered to Tenant, Landlord, at its option, may elect to terminate:  (a) all of the Tenant’s rights to the Plaza Building Sign and the Bank Directional Signs and (b) Tenant’s rights to enforce the restrictions set forth in Section 28.9.3 below (collectively, the “Tenant Plaza Building Identification Rights”), in the event that:  (i) Landlord exercises its recapture rights with respect to the Plaza Building Space pursuant to Section 7.1.2 (a “Plaza Building Operating Requirement Failure”), or (ii) Landlord exercises its recapture rights with respect to the Plaza Building Space pursuant Section 15.2.4 hereof.  Following any such recapture of the Plaza Building Space and termination of the Tenant Plaza Building Identification Rights, Landlord shall have the right, from that time forward:  (a) to require Tenant to remove the Plaza Building Signage in accordance with the terms of Section 28.6,

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below, and (b) to place and maintain additional signage in, on and around the Plaza Building, without being restricted by any of the terms of this Article 28 or any of the terms of Section 19.3.

28.6Cost and Maintenance.

28.6.1 All costs and expenses relating to the actual signs comprising Tenant’s South Tower Top Signs, the South Tower Eyebrow Signs, the South Tower Entrance Signs, the Plaza Building Sign, and the Bank Directional Signs (collectively, the “Tenant Maintained Signs”), including, without limitation, to the extent related to such signage, all installation, design, operation, alteration, removal, construction, fabrication, and permitting costs and expenses and any and all other costs to the extent associated with such Tenant Maintained Signs, including, without limitation, the cost of removing and disposing (or covering, as the case may be) ( both at the expiration or sooner termination of this Lease and/or of the Plaza Building Space and at the termination of any Tenant rights under this Article 28) of any existing signage in the locations to be occupied by the Tenant Maintained Signs.  Utility charges and book-up fees, permits, and maintenance and repairs with respect to all of the Tenant Maintained Signs, shall be the sole responsibility of Tenant; provided, however, that (a) Landlord shall reasonably cooperate (at Tenant’s sole cost and responsibility of Tenant’s use of the Project Common Areas and Building Systems (including subject to the provisions of Article 10, cooperating to provide (at Tenant’s sole cost and expense) reasonable enhancements of electricity connections and sign supports with respect to the South Tower Top Signs, the South Tower Eyebrow Signs and the Plaza Building Sign) to allow Tenant to install, operate, maintain and repair (and when appropriate, remove) the Tenant Maintained Signs; and (b) Landlord shall, on or before the First Increment Commencement Date, or as soon thereafter as is reasonably possible (and permissble under the Other Tenant Prior Rights) with respect to all signs which are subject to Other Tenant Prior Rights, at Landlord’s sole cost and expense, remove all signs existing on the Effective Date on the South Tower, the Plaza Building and the Project which are inconsistent with the signage and Project Name Rights granted to Tenant in this Article 28, and repair any damage to the Project caused by such removal and cause the areas from which all such signage was removed to be restored to a condition commensurate with a first-class office building.  Tenant shall be required to construct, maintain and operate each and all of the tenant Maintained Signs in conformity with such standards as Landlord may reasonably prescribe, consistent with the standards for sign design, operation and maintenance of the Comparable Buildings, to the extent not inconsistent with the rights granted to Tenant under this Lease.  Should any of the Tenant Maintained Signs (including any lighting with respect thereto) require repairs and/or maintenance under the foregoing standards, Landlord shall have the right to provide notice thereof to Tenant, and Tenant (except as set forth above) shall cause such repairs and/or maintenance to commence and to be performed, at Tenant’s sole cost and expense, within five (5) days after receipt of such notice from Landlord; provided, however, that if such repairs and/or maintenance are reasonably expected to require longer than five (5) day to perform, Tenant shall commence such repairs and/or maintenance within such five (5) days period and shall thereafter diligently prosecute such repairs and maintenance to completion at Tenant’s sole cost and expense.  Should Tenant fail to perform or commence such repair and/or maintenance obligations within the time periods described in the immediately preceding sentence, time being of the essence, Landlord shall have the right to cause such work to be performed for the account of Tenant and to charge Tenant as Additional Rent for the Actual Cost of such work, plus interest at the Interest Rate from the date of Landlord’s payment of such Actual Costs to the date of Tenant’s reimbursement of Landlord of such Actual Costs and interest.  Within ten (10) days following the expiration or earlier termination of this Lease, Tenant shall complete the removal of all of the Tenant Maintained Signs from the Project, including, but not limited to, from the South Tower and from the Plaza Building, and shall cause the areas in which all such Tenant Maintained Sign were located to be restored to the condition existing (to the extent commercially reasonable) immediately prior to the placement of such Tenant Maintained Signs.  If Tenant fails to timely remove all such Tenant Maintained Signs or to restore the areas in which such Tenant Maintained Signs were located, as provided in the immediately preceding sentence, then Landlord may perform such work, and all Actual Costs reasonably incurred by Landlord in so performing such work, plus interest at the Interest Rate from the date of Landlord’s payment of such costs to the date of Tenant’s reimbursement of Landlord, shall be reimbursed by Tenant to Landlord within thirty (30) days after Tenant’s receipt of an invoice therefor.  The terms of this Section 28.6 shall survive the expiration or earlier termination of this Lease, or of the Lease of the Plaza Building Space or the termination of Tenant’s rights under this Article 28 (as the same relates to the signs in question).

28.6.2Except as provided otherwise herein, Tenant shall reimburse to Landlord, within ten (10) days of Landlord’s demand therefor, Tenant’s pro rata share of the Actual Costs incurred by Landlord relating to the Future Pylon Signs and the Other Project Signs, including, without limitation, to the extent related to such signage, all installation, design, operation, alteration, removal, construction, fabrication and permitting costs and expenses and any and all other costs to the extent associated with such Future Pylon Signs and/or Other Project Signs.  For purposes of this Section 28.6.2, Tenant’s pro rate share of such costs and expenses relating to the Future Pylon Signs and/or the Other Project Signs shall be equal to the portion of the area on such Future Pylon Signs and/or Other Project Signs that is designated to receive or display signage and that is devoted to signage identifying Tenant or identifying the Project as City National Plaza.

28.7Project Name.  Effective upon the date of the Prior Tenants’ Project Identity Rights Termination (defined in this Section 28.7, below), and otherwise subject to all of the provisions of this Article 28 (including, but not limited to the provisions of Section 28.5.4), Tenant is hereby granted the right to designate the “name” of the Project (the “Project Name”) as “City National Plaza” (the “Project Name Rights”); provided, however, that Tenant’s rights to continue to enjoy and enforce the Project Name Rights hereby shall be conditional upon Tenant leasing, having completed construction of Tenant Improvements in, having commenced business operations (for at least one (1) day) in, and otherwise Occupying, on or before the date that is twelve (12) calendar months (subject to extension for Commencement Date Delays) after the date on which Landlord delivers the Fourth Increment Office Space to Tenant in Delivery Condition (the “Outside Occupancy Threshold Date”), *                                        * feet of Rentable Area (or more) in the South Tower Premises (the “Initial Occupancy Threshold”), provided, further, however, that if, on or before the Outside Occupancy Threshold Date, Tenant shall not have satisfied the Initial Occupancy Threshold, but, as of such date:  (a) the Tenant Improvements in the Fourth Increment Office Space (the “Unfinished Space”) are under construction, (b) Tenant shall have completed construction of the Tenant Improvements in, shall have commenced business operations (for at least one (1) day) in, and shall then be Occupying the entirety of the remainder of the Initial Premises (other than such Unfinished Space), and (c) for so long as (and only for so long as) Tenant shall continue to diligently prosecute construction of such Tenant Improvements in such Unfinished Space to completion, the Outside Occupancy Threshold Date shall be extended on a day for day basis for

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each additional day required to complete construction of such Tenant Improvements in such Unfinished Space.  In the event that, as of the Outside Occupancy Threshold Date (as such date may be extended pursuant to this Section 28.7), Tenant shall not have satisfied the Initial Occupancy Threshold, all of Tenant’s rights to the Project Name Rights shall automatically terminate, and as of such date, shall be of no further force or effect.  Subject to the provisions of this Article 28 (and after the date of the Prior Tenants’ Project Identity Rights Termination), after the initial designation of the Project Name, Tenant shall, in connection with any change in the Tenant’s Exterior Signs specifically permitted under Section 28.8, change such Project Name (and the name of the South Tower) to match or to be a direct, recognizable derivative of the new name of Tenant’s Successor on Tenant’s Exterior Signs.  Except as specifically set forth in this Article 28, Tenant shall have no rights to designate the name of any other portion of the Project (including, but not limited to, the North Tower and the Plaza Building), and, subject to the Other Tenant Prior Rights and to the rights of Tenant hereunder, Landlord shall retain the right to designate and/or to redesignate the name of the North Tower and the Plaza Building.  Landlord acknowledges and agrees that, subject to the provisions of this Article 28, including, but not limited to, such provisions relating to the Other Tenant Prior Rights, from and after the date of the Prior Tenants’ Project Identity Rights Termination, the Project Name and the identity of the Project is to be “City National Plaza.”  Accordingly, Landlord agrees that, as part of Tenant’s Project Name Rights, following the Effective Date, Landlord will not grant any signage rights to any other tenant or occupant of the Project (or to any other party) that would, in the good faith opinion of Landlord’s Project Signage Consultant, undermine the designation of the Project as “City National Plaza.” For Purposes of application of this Lease, subject to Tenant’s satisfaction of the Initial Occupancy Threshold, the “Project Name Rights” shall also include Tenant’s rights under this Section 28.7 to require Landlord to, commencing upon the day after the date on which the rights of the tenant under the ARCO Lease terminate (and if such rights terminate prior to the expiration of the BofA Lease, commencing on the day after the date on which the rights of the tenant under the BofA Lease terminate) (the “Prior Tenants’ Project Identity Rights Termination”), and continuing until such time as Tenant shall no longer satisfy the South Tower Occupancy Requirement (or until such time as such rights shall otherwise terminate under the provisions of this Section 28.7), to: (i) endeavor to cause its employees and agents to refer to the Project as “City National Plaza,” (ii) cause a substantial portion of its stationery, announcements and advertisements to identify the Project as “City National Plaza,” (iii) cause any tape recorded welcome (or expression of thanks upon departure) provided to vehicular visitors to the Project that is in existence and is being broadcast at the entrance to or the exit from the Subterranean Garage as of the Effective Date, to refer to the Project as “City National Plaza” for so long as such tape recorded welcome or expression shall continue to be provided to such visitors, and (iv) cause any security access cards provided to employees of tenants of the Project to, where reasonably possible to do so (taking into account the requirements of the card and security access system in question), hear the inscription “City National Plaza” (provided, however, that Tenant agrees that, as to the obligation of Landlord under this clause (iv), in any case where any particular Project tenant or occupant requests that such security access cards issued to the employees of such tenant or occupant not bear the inscription “City National Plaza,” Landlord shall have no obligation to provide such inscriptions on the security access cards issued to the employees of such tenant or occupant (or to any other person related to such tenant or occupant)).  For purposes of application of this Lease, subject to Tenant’s satisfaction of the Initial Occupancy Threshold, the “Project Name Rights” shall additionally include, Tenant’s rights under this Section 28.7 to require Landlord to, commencing on the Prior Tenants’ Project Identity Rights Termination and continuing until such time as Tenant shall no longer satisfy the South Tower Occupancy Requirement (or such rights shall otherwise terminate under the provisions of this Section 28.7), not to grant any tenant of the Project, other than Tenant, any right to have its name or logo displayed in any manner upon the uniforms of the Project Common Areas concierge, janitorial, maintenance and/or access control personnel (provided, however, that this obligation (and restriction) shall not apply to any uniforms worn by any personnel employed by an entity or an Affiliate of any entity: (x) which is in the business of providing such services, (y) which is a tenant at the Project, and (z) which Landlord in good faith retains to provide any of such services at the Project).

28.8Transferability and Changes.  All of the Tenant Project Identification Rights and Tenant Plaza Building Identification Rights (and Article 28 Rights) shall be personal to the Original Tenant and shall not be transferable to (or inure to the benefit of) any third party; provided, however, that: (i) Original Tenant may assign all, but not less than all, of the Tenant Project Identification Rights to a Successor and (ii) Original Tenant and any subsequent Qualifying Plaza Subtenant (as defined in this Section 28.8, below) may assign all, but not less than all, of the Tenant Plaza Building Identification Rights to a Successor or to a subtenant of Tenant which has been duly approved by Landlord pursuant to Article 15 hereof and which subleases and Occupies one hundred percent (100%) of the Plaza Building Space (a “Qualifying Plaza Subtenant”); provided, further, however, that Original Tenant may only effectuate a transfer of its Tenant Project Identification Rights and/or its Tenant Plaza Building Identification Rights to a Successor or to a Qualifying Plaza Subtenant, as applicable, if and to the extent: (a) such assignment would not violate the terms (“Exclusive Terms”) of any then existing lease for space in the Project that grants an occupant an “exclusive” as to a particular business (provided that Tenant shall have the right to modify its use of Tenant’s Exterior Signs so as not to violate any such Exclusive Terms) and (b) such assignee does not have a name or logo which relates to an entity which is of a character or reputation, or is associated with a political faction or orientation, which would be objectionable to a majority of landlords of Comparable Buildings (an “Objectionable Name”).  Following any such assignment (or following any change in the name, tradename or logo of Tenant), Tenant shall have the right to use a different name on the Tenant’s Exterior Signs (and to redesignate the name of South Tower and the Project) provided such different name is the new name, tradename or logo of Original Tenant or a Successor thereof, is not an Objectionable Name, and is otherwise in substantial conformance with all of the requirements of this Article 28.  Notwithstanding any provision of this Lease to the contrary, in the event the South Tower Name and/or the Project Name is changed by Tenant pursuant to this Section 28.8, Tenant shall reimburse Landlord for all of its reasonable out of pocket expenses in modifying all Project and Building identification signage (including, but not limited to, the Future Pylon Signs and the other project signs), literature and stationery.

28.9Additional Signage Provisions.

28.9.1South Tower Exclusivity; Exclusive Signage Occupancy Requirement.  Subject to the provisions of this Section 28.9.1 and to the provisions of Section 28.5.4, on the condition that, and for so long as Original Tenant (or a Successor of Original Tenant) and its Affiliates continue to Occupy more than *             *                         rentable square feet in the South Tower (the “Exclusive Signage Occupancy Requirement”), except as provided otherwise herein, Landlord shall not grant or permit any other tenant or occupant in the South Tower or any other third party the right to affix or install any sign to any portion of the exterior surface of the South Tower, including its exterior cladding and windows, (which shall be deemed to include the walls of the ground floor

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lobby, but which does not include the South Tower Building Envelope outside of the South Tower itself).  Notwithstanding the foregoing, Landlord may, provided that such signage is consistent with comparable signage granted in accordance with Institutional Owner Practices:  (i) grant or permit any Permitted Ground Floor Lobby Tenant (defined below) the right to affix or install signage or advertising media, and Landlord may install or affix any such Permitted Ground Floor Lobby Tenants’ signage or advertising media, to any portion of the exterior of the South Tower (including its exterior cladding and windows) in the area shown on Exhibit “R” attached hereto, but below the area which is generally referred to as the “eyebrow level,” (ii) install or affix signage identifying the street address of the South Tower, (iii) in addition to the signage permitted under clause (i) above, grant or permit two (2) or more other tenants or occupants in the Project to affix or install any signage, and Landlord may install or affix any such tenants’ or occupants’ signage, to those two (2) areas of the exterior walls of the South Tower designated in Exhibit “1” attached hereto as locations for a multi-tenant sign (the “Designated Secondary Signage”), (iv) provide for one (1) or two (2) customary fixed or electronic tenant directory (or directories) within the ground floor lobby of the South Tower, and/or (v) install the “Retail Identity and Major Retail Sign” to be located by the escalator in the ground floor lobby of the South Tower.  If Tenant shall, at any time, cease to satisfy the Exclusive Signage Occupancy Requirement, all of Tenant’s rights under this Section 28.9.1 shall automatically terminate and shall be of no further force or effect.  For purposes of this Section 28.91, “Permitted Ground Floor Lobby Tenant” shall mean any tenant of South Tower ground floor space that is not a Tenant Competitor.  Notwithstanding any provisions of this Lease (including, without limitation, any provision of Section 28.9.1 and Section 28.9.2) to the contrary, in all cases Landlord shall be permitted to place (i) any sign or inscription and/or logo of a Tenant Competitor on any Future Pylon Sign, and (ii) the sign and/or logo of one (1) Tenant Competitor on the Designated Secondary Signage.  Provided, further, however, that until the South Tower is fifty percent (50%) leased, Landlord may have less than two (2) names on the Designated Secondary Signage.

28.9.2South Tower Building Envelope Exclusivity.  Subject to the provisions of this Section 28.9.2, on the condition that, and for so long as, Original Tenant (or a Successor) and its Affiliates continue to comply with the Exclusive Signage Occupancy Requirement, Landlord shall not grant or permit any Tenant Competitor the right to affix or install any signage or advertising media, and Landlord shall not install or affix any Tenant Competitor’s signage or advertising media within any area (or in any manner) within the South Tower Building Envelope (defined in this Section 28.9.2, below).  If Tenant shall, at any time, cease to satisfy the Exclusive Signage Occupancy Requirement, all of Tenant’s rights under this Section 28.9.2 shall automatically terminate and shall be of no further force or effect.  For purposes of this Section 28.9.2, “South Tower Building Envelope” shall mean the area that is shown on Exhibit “U” attached hereto.

28.9.3Plaza Building.  Subject to the provisions of this Section 28.9.3 and the remainder of this Article 28, on the condition that, and for so long as Tenant continues to comply with the Exclusive Signage Occupancy Requirement, there is no outstanding Plaza Building Operating Requirement Failure, and Landlord has not recaptured the Plaza Building Space pursuant to Section 7.1.2 or Section 15.2.4, except as provided otherwise herein, Landlord shall not grant or permit any other tenant or occupant in the Plaza Building or the Project or any other third party the right to affix or install any signage or advertising media, and Landlord shall not install or affix any such party’s signage or advertising media to any portion of the exterior of the Plaza Building (including its exterior cladding and windows).  Notwithstanding the above, provided that such signage is not granted to any Tenant Competitor, Landlord may: (i) grant or permit any Permitted Plaza Building First Class Tenant the right to affix or install signage or advertising media, and Landlord may install any such Permitted Plaza Building First Class Tenants’ signage or advertising media, to any portion of the exterior of the Plaza Building (including its exterior cladding and windows) and/or (ii) grant or permit any tenant or occupant of the Project or any other third party (other than any Tenant Competitor), the right to affix or install any signage or advertising media, and Landlord may install or affix any such parties’ signage or advertising media, to the parapet of the Plaza Building (“Plaza Building Parapet”) or any other portion of the Plaza Building; provided, however, that Landlord agrees that Landlord shall have no right to grant to any party any right to install any such signage on the Plaza Building Parapet if and to the extent that Landlord’s Project Signage Consultant in good faith determines that such signage is not Tasteful.  If Tenant shall, at any time, cease to satisfy the Exclusive Signage Occupancy Requirement, or if Landlord shall recapture the Plaza Building Space pursuant to Section 7.1.2 or Section 15.2.4, all of Tenant’s rights under this Section 28.9.3 shall automatically terminate and shall be of no further force or effect.  “Permitted Plaza Building First Class Tenant” shall mean any tenant of any space on the ground floor of the Plaza Building which is of a quality, character, reputation and use which is consistent with the standards for office, service, restaurant (such as California Pizza Kitchen, Cheesecake Factory, McCormick & Schmitt’s, El Torito Grill, II Fornaio, Broadway Deli, Houston’s, P.F. Chang’s, The Daily Grill, and Morton’s), banking and/or other tenants of primary ground floor space with prominent visibility in the common areas of (or space which is considered to be in the main floor lobby area of) the Comparable Buildings in downtown Los Angeles (and with such use of any such Permitted Plaza Building First Class Tenant constituting a “Permitted Plaza Building Class Use”)

28.9.4Project; North Tower.  Except as specifically set forth in this Section 28.9, and subject to Section 28.7, there shall be no restrictions on the name given to the Project, the Plaza Building or the North Tower, or on the installation of any other signage at the Project, including, but not limited to, at the North Tower, in the Plaza, or in the subterranean levels of the Project.

28.9.5First Class Project Signage.  Landlord agrees that Landlord shall not grant any rights to any signage at the Project which is not consistent with signage rights granted at other first-class office projects.

28.9.6Offensive and Objectionable Entities.  Subject to the provisions of this Article 28, Landlord shall not grant any rights to any identity signage on any exterior surface of the South Tower, the North Tower, or of the Plaza Building (or in the ground floor lobby of the South Tower or of the North Tower) or in the Plaza Area, to any tenant in the Project which constitutes an Offensive and Objectionable Entity (defined in this Section 28.9.6, below) as of the date of execution of the lease for such tenant.  An entity shall constitute an “Offensive and Objectionable Entity” on a particular date if, on such date, such entity is known to Landlord to be identified by a majority of adult American citizens as an entity that either: (a) is synonymous with the propagation of racist violence or racist hatred (and holds itself out to the general public as doing so), such as the American Nazi Party or the Ku Klux Klan, or (b) as its primary business, creates and distributes to the general public pornographic materials, such as Hustler magazine.

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28.9.7Relocation of Eyebrow Sign.  Subject to the provisions of this Section 28.9.7, if, the trees (“Plaza Trees”) that would currently obstruct the view from Flower Street of an eyebrow sign located on the exterior granite face of the north (Plaza Area) side of the South Tower above the level of the pillar openings and below the third (3rd) floor windows of the South Tower (the “Prospective North Eyebrow Sign Location”) are removed, cut back or trimmed by Landlord during the three (3) year period following the Effective Date (the “Eyebrow Sign Relocation Period”), and Tenant determines that it would prefer (or for any reason (with or without the removal, cutting, and/or trimming of the Plaza Trees), Tenant determines that it would prefer) to relocate the South Tower Eyebrow Sign which is to be installed on the east (Flower Street) side of the South Tower (the “Flower Street Eyebrow Sign”) to the Prospective North Eyebrow Sign Location, then Tenant shall have the right (the “Flower Street Eyebrow Sign Relocation Right”) to elect to require Landlord to relocate the Flower Street Eyebrow Sign (at Tenant’s sole cost and expense) to the Prospective North Eyebrow Sign Location.  The Flower Street Eyebrow Sign Relocation Right may be exercised only by the delivery by Tenant to Landlord during the Eyebrow Sign Relocation Period of a notice (the “Eyebrow Sign Relocation Notice”) specifically referencing this Section 28.9.7 and notifying Landlord that Tenant is exercising the Flower Street Eyebrow Sign Relocation Right.  In the event that Tenant duly exercises the Flower Street Eyebrow Sign Relocation Right: (a) the eyebrow sign which is to be located in the Prospective North Eyebrow Sign Location (the “North Eyebrow Sign”) shall: (i) identify Tenant’s name as “City National Bank,” together with Tenant’s logo, and (b) shall be in the location and have the dimensions, color, illumination and composition as more particularly set forth on Exhibit “M” (with respect to the Eyebrow Sign which is to be located on the south (Sixth Street) side of the South Tower (the “South Eyebrow Sign”), except that the directional orientation of the applicable portion of Exhibit “M” shall be rotated one hundred eighty (180) degrees (such that north is south, south is north, east is west, and west is east), but otherwise, if and to the extent not otherwise described on Exhibit “M”, shall be of the composition reasonably designated by Tenant and reasonably approved by Landlord in advance in accordance with this Article 28 (taking into account the Project Exterior Signage Program), and (c) Tenant shall, at Tenant’s sole cost and expense, remove the Flower Street Eyebrow Sign, repair any damage to the Building caused by the removal of such sign, and cause the area in which the Flower Street Eyebrow Sign was located to be restored to the condition required under Section 28.6, above.

28.10Use of Tenant’s Tradename, Logo or Trademark.  Neither Landlord nor any tenant shall acquire any right, title or interest in any trademark, logo or tradename of Tenant by virtue of this Lease.  Landlord may not, except as specifically required under this Lease, use Tenant’s tradename, logo, or trademark in any manner otherwise prohibited by any Law.

28.11Use of Exterior Portion of South Tower for Promotional and Advertising Purposes.  Landlord agrees that, except for bona fide identity signage and/or logos installed on the South Tower for the benefit of bona fide tenants in the South Tower (to the extent not prohibited or restricted by this Article 28), Landlord shall not grant any rights to any tenant or other third party to utilize the exterior surfaces (or any material portion thereof) of the South Tower portion of the Project to be utilized for the purpose of advertising, promoting or identifying a person, sign, cause, project, product, service or the like by the placement of a billboard or similar advertising on the walls of the South Tower.

28.12Arbitration of Disputes.  Any disputes or disagreements or disputes between Landlord and Tenant related to any matter arising out of, in connection with, or otherwise related to the rights and obligations of Landlord and Tenant under this Article 28 shall be subject to arbitration in accordance with Article 14, above.

ARTICLE 29 - - STORAGE PREMISES

Subject to the provisions of this Article 29, at all times during the Term, Tenant shall have the right to lease from Landlord up to five thousand (5,000) usable square feet of storage space in one or more locations designated by Landlord (the “Storage Premises”); provided, however, that notwithstanding the foregoing, such right shall be conditional upon Tenant’s delivery to Landlord of written notice (a “Storage Premises Commitment Notice”) committing to the immediate leasing of such storage space pursuant to this Article 29 and stating the approximate amount of storage space (subject to the size maximum stated above) not later than June 1, 2004.  Subject to the provisions of this Article 29, Tenant shall be required to pay storage rent (“Storage Rent”), and no other rent, for Storage Premises leased by Tenant in the applicable amounts set forth below.  Subsequent to June 1, 2004, Tenant shall, to the extent that it has not already exercised its right to lease such Storage Premises, have a further right to lease the unleased portions of the Storage Premises by delivering a Storage Premises Commitment Notice to Landlord, but with respect to Storage Premises Commitment Notices received by Landlord after June 1, 2004, Landlord’s obligation to lease such Storage Premises to Tenant shall be conditioned on Landlord having such Storage Premises available for lease at such time (“Available Storage Space”).  Available Storage Space shall be defined as storage space not then subject to another tenant’s rights.  If, subsequent to June 1, 2004, at the time Landlord receives the Storage Premises Commitment Notice, there is no Available Storage Space, Landlord shall so advise Tenant, and when Available Storage Space comes into existence, Landlord shall deliver such Available Storage Space to Tenant within thirty (30) days after such space qualifies as Available Storage Space.  Subject to the provisions of this Article 29, Tenant shall be required to pay storage rent (“Storage Rent”), and no other rent, for Storage Premises leased by Tenant in the applicable amounts set forth below.

Month of Term	Monthly Storage Rent/usable square foot
*	*

Upon the commencement of any Option Term, if applicable, Landlord shall have the right, upon notice to Tenant within thirty (30) days following each such date, to increase the Storage Rent to the prevailing per square foot rate charged by Landlord to tenants for storage space.  Tenant shall give prompt notice to Landlord in case of fire or accidents in or about the Storage Premises or of defects therein or in the fixtures or equipment related thereto.  Tenant acknowledges and agrees that Landlord shall have no obligation to provide any security for the Storage Premises.  All Storage Premises rental amounts shall be due on a monthly basis concurrent with Tenant’s payment of the Base Rent

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due with respect to the Premises, and shall constitute Rent under the Lease.  No Additional Rent shall be payable by Tenant to Landlord in connection with the lease of the Storage Premises; provided, however, that in the event any governmental tax shall be imposed on the storage space transaction contemplated hereunder, on the Storage Rent to be received by Tenant or on any similar basis, Tenant shall be responsible for the timely payment of the same.  All Storage Premises (to the extent there exists Available Storage Space) leased by Tenant shall be delivered to Tenant within thirty (30) days after Landlord’s receipt of the Storage Premises Commitment Notice, and shall be leased by Tenant in its present existing, “As-Is” condition and, subject to the terms of Article 12, above, Tenant shall be fully responsible for repairing any damage to the Storage Premises resulting from or relating to Tenant’s use thereof; provided, however, that such Storage Premises shall be demised, have a lockable door, have reasonably sufficient lighting, and be accessible without going up or down stairs.  Tenant shall comply with such reasonable rules and regulations as promulgated by Landlord and delivered to Tenant from time to time pertaining to the use of such Storage Premises.  Tenant’s insurance obligations under the Lease shall also pertain to Tenant’s use of the Storage Premises.  Once the Storage Premises is leased, Tenant shall have the right to terminate the Lease as to the entire Storage Premises, or if the Storage Premises is comprised of more than one separately demised unit of space, then as to one or more of such separately demised units of space within the Storage Premises, on thirty (30) days prior written notice to Landlord.

ARTICLE 30 - - MISCELLANEOUS

30.1Entire Agreement.  This Lease contains all of the agreements and understandings relating to the leasing of the Premises and the obligations of Landlord and Tenant in connection with such leasing.  Neither Landlord nor Tenant has made, and neither Tenant nor Landlord is relying upon, any warranties, or representations, promises of statements made by the other party or by any agent of the other party, except as expressly set forth herein.  This Lease supersedes any and all prior agreements and understandings between Landlord and Tenant and alone expresses the agreement of the parties.

30.2Amendments.  This Lease shall not be amended, changed or modified in any way unless in writing executed by Landlord and Tenant.  Neither party shall have waived or released any of its rights hereunder unless in writing and executed by such party.

30.3Successors.  Except as expressly provided herein, this Lease and the obligations of Landlord and Tenant contained herein shall bind or inure to the benefit of Landlord and Tenant and their respective successors and assigns, provided this clause shall not permit any Transfer by Tenant contrary to the provisions of Article 15.

30.4Sale by Landlord.  An arm’s length sale or conveyance by Landlord of the Project shall operate to release Landlord from any future liability upon any of the agreements, obligations, covenants or conditions, express or implied, herein contained in favor of Tenant (the “Collective Obligations”), and Tenant agrees to look solely to the responsibility of the successor in interest of Landlord in and to this Lease except for Collective Obligations of Landlord hereunder that are attributable to the period of time prior to such sale or conveyance; provided such successor in interest agrees in writing to assume the Collective Obligations of Landlord hereunder.  This Lease shall not be affected by any such sale, however, and Tenant agrees to attorn to the purchaser or assignee, with such attornment to be effective and self-operative without the execution of any further instruments by any of the parties to this Lease.

30.5Force 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 therefor (or delays substantially beyond normal, regular and customary periods of time to obtain the same), governmental actions, civil commotions, terrorist acts, fire, earthquake or other casualty, and other causes beyond the reasonable control of the party obligated to perform (collectively, a “Force Majeure”) shall excuse the performance of such party (except with respect to the obligations imposed with regard to Rent and other charges to be paid by Tenant pursuant to this Lease; provided, however, that the provisions of this Section 30.5 shall not operate to affect in any manner the operation or application of any provision of this Lease that expressly grants to Tenant an abatement of Rent under particular circumstances) 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; provided, however, that: (i) the provisions of this Section 30.5 shall not apply to the provisions of Sections 9.3, 12.3, or 16.8.2 (which provide for rent abatement), unless and only to the extent specific reference is made to Force Majeure therein, (ii) all references continued in this Lease or in the Work Letter to “Force Majeure Delays” shall refer to such term as defined in the Work Letter and (iii) in no case shall the provisions of this Section 30.5 apply to the determination of when a “Commencement Date” has occurred or shall occur, the commencement of or expiration of the Term, or the commencement of any form of Rent hereunder, with the parties hereto agreeing that such determination shall be governed by the terms of the Work Letter and the provisions of this Lease which specifically address such determination.

30.6Survival of Obligations.  Any obligations of Tenant or Landlord accruing prior to the expiration of this Lease shall survive the termination of this Lease, and Tenant and Landlord shall each perform all of their respective obligations in a timely manner whether or not this Lease has expired.

30.7Light and Air.  No diminution or shutting off of any light, air or view by any structure now or hereafter erected shall in any manner affect this Lease or the obligations of Tenant hereunder, or increase any of the obligations of Landlord hereunder.

30.8Governing Law.  This Lease shall be governed by, and construed in accordance with, the laws of the state of California, without regard to its conflict of laws rules and principles.

30.9Qualified Prohibition Against Recording.  This Lease shall not be recorded by Tenant or by anyone acting through, under or on behalf of Tenant.  Landlord agrees that it will execute a short form memorandum of Lease (“Memorandum of Lease”), with its signatures notarized, and allow Tenant to record the same so as to place other parties on notice as to the Premises leased, Tenant’s renewal and expansion rights, and Tenant’s signage and naming rights hereunder.  Tenant agrees that, in the event that Tenant elects to record a Memorandum of Lease pursuant to this Section 30.9, immediately following the expiration or earlier termination of this Lease (or the Project

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Identification Rights or the Plaza Building Identification Rights), Tenant shall take all actions requested of by Landlord (including, without limitation, the execution and notarization of documents) to cause all record of such Memorandum of Lease to be removed from the chain of title for the Project or appropriately modified.

30.10.Severability.  In the event any provision of this Lease is found to be unenforceable, the remainder of this Lease shall not be affected, and any provision found to be invalid shall be enforceable to the extent permitted by law.  The parties agree that in the event two different interpretations may be given to any provision hereunder, one of which will render the provision unenforceable, and one of which will render the provision enforceable, the interpretation rendering the provision enforceable shall be adopted.

30.11Captions.  All captions, headings, titles, numerical references and computer highlighting are for convenience only and shall have no effect on the interpretation of this Lease.

30.12Interpretation.  Tenant acknowledges that it has read and reviewed this Lease and that it has had the opportunity to confer with counsel in the negotiation of this Lease.  Accordingly, this Lease shall be construed neither for nor against Landlord or Tenant, but shall be given a fair and reasonable interpretation in accordance with the meaning of its terms and the intent of the parties.

30.13Independent Covenants.  Except as specified to the contrary herein, each covenant, agreement, obligation or other provision of this Lease to be performed by Tenant and Landlord are separate and independent covenants of Tenant and Landlord, and not dependent on any other provision of this Lease.

30.14Number and Gender.  All terms and words used in this Lease, regardless of the number or gender in which they are used, shall be deemed to include the appropriate number and gender, as the context may require.

30.15Time is of the Essence.  Time is of the essence of this Lease and the performance of all obligations hereunder.

30.16[INTENTIONALLY OMITTED]

30.17No Offer to Lease.  The submission of this Lease to Tenant, Landlord or their respective Brokers or other agents, shall not constitute an offer to Tenant or by Tenant to lease the Premises.  This Lease shall have no force and effect until it is executed and delivered by both parties.

30.18No Counterclaim; Choice of Laws.  It is mutually agreed that in the event Landlord commences any summary proceeding for non-payment of Rent, Tenant will not interpose any counterclaim of whatever nature or description, unless it is a compulsory counterclaim, in any such proceeding.  In addition, each of Landlord and Tenant hereby submit to local jurisdiction in the State of California and agrees that, subject to Article 14, any action by Tenant against Landlord or by Landlord against Tenant shall be instituted in the State of California and that each of Landlord and Tenant shall have personal jurisdiction over the other for any action brought by either Landlord or Tenant against the other in the State of California.

30.19Rights Reserved by Landlord.  Subject to Article 28 (and any other provisions of this Lease which expressly limit the rights reserved by Landlord in this Section 30.19), Landlord reserves the following rights exercisable without notice (except as otherwise expressly provided to the contrary in this Lease) and without being, deemed an eviction or disturbance of Tenant’s use or possession of the Premises or giving rise to any claim for set-off or abatement of Rent (except as otherwise provide for in this Lease):  (i) to change the name or street address of the Buildings and/or the Project; (ii) to install, affix and maintain all signs on the exterior and/or interior of the Building and/or the Project; (iii) subject to the terms of this Lease, to designate and/or approve prior to installation, all types of signs, window shades, blinds, drapes, awnings or other similar items; (iv) to display the Premises and/or the Project to mortgagees, prospective mortgagees purchasers and ground lessors at reasonable hours upon reasonable advance notice to Tenant; (v) to change the arrangement of entrances, doors, corridors, elevators and/or stairs in the Buildings, provided no such change shall materially adversely affect primary access to the Premises; (vi) to grant any party the exclusive right to conduct any business or render any service in the Buildings, provided such exclusive right shall not operate to prohibit Tenant from using the Premises for the purposes permitted under this Leases; (vii) to prohibit the placement of vending or dispensing machines of any kind in or about the Premises other than for use by Tenant’s employees and visitors; (viii) to discontinue any mail chute business in the Building; (ix) to close the Buildings after normal business hours, except that Tenant and its employees and invitees shall be entitled to admission at all times under such nondiscriminatory rules and regulations as Landlord prescribes for security purposes; (x) to install and maintain pipes, ducts, conduits, wires and structural elements located in the Premises which serve other parts or other tenants of the Buildings, provided that the same do not materially and adversely interfere with Tenant’s use or improvement of the Premises as permitted by this Lease; and (xii) subject to the terms of this Lease, to retain at all times master keys or pass keys to the Premises.

30.20Reasonable Consent. Except for matters for which there is a standard of consent or approval specifically set forth in this Lease (other than a reasonableness standard), and except for matters which could materially and adversely affect: (i) the Building Systems, (ii) the Building Structure, or (iii) the exterior appearance of the Project or any Building, in which case Landlord shall have the right to act in its sole and absolute discretion as to the matters described in items (i), (ii) and (iii) above, any time the consent or approval of Landlord or Tenant is required under this Lease, such consent or approval shall not be unreasonably withheld, conditioned or delayed.

30.21Authority.  If Landlord or Tenant signs as a corporation or a partnership, each of the persons executing this Lease on behalf of Landlord or Tenant, as the case may be, does hereby covenant and warrant that Landlord or Tenant, as the case may be, is a duly authorized and existing entity, that Landlord or Tenant, as the case may be, has and is qualified to do business in California, that such party has full right and authority to enter into this Lease, and that each of both of the persons signing on behalf of such party are authorized to do so.

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30.22Transportation Management.  Tenant shall comply with all governmentally mandated present or future programs intended to manage parking, transportation or traffic in and around the Project.

30.23The Other Improvements.  If portions of the Project or property adjacent to the Project (collectively, the “Other Improvements”) are owned by an entity other than Landlord, Landlord, at its option, in its good faith discretion, may enter into an agreement with the owner or owners of any or all of the Other Improvements to provide: (i) for reciprocal rights of access and/or use of the Project and the Other Improvements, (ii) for the common management, operation, maintenance, improvement and/or repair of all or any portion of the Project and the Other Improvements, (iii) for the allocation of a portion of the Operating Expenses to the Other Improvements and the operating expenses and taxes for the Other Improvements to the Project, and (iv) for the use or improvement of the Other Improvements and/or the Project in connection with the improvement, construction, and/or excavation of the Other Improvements and/or the Project.  Nothing contained herein shall be deemed or construed to limit or otherwise affect Landlord’s right to convey all or any portion of the Project or any other of Landlord’s rights described in this Lease.

30.24Renovation of the Project and Other Improvements.  Tenant acknowledges that portions of the Project and/or the Other Improvements may be under construction following Tenant’s occupancy of the Premises, and that such construction may result in levels of noise, dust, obstruction of access, etc. which are in excess of that present in a fully constructed project.  Except as specifically set forth in this Lease to the contrary, it is expressly understood and agreed that Landlord has no obligation to alter, remodel, improve, renovate, repair or decorate the Premises, the South Tower, Plaza Building or the Project or any portion thereof.  It is further agreed and acknowledged that, except as specifically set forth in this Lease, no representations or warranties respecting the condition of the Premises, the South Tower, Plaza Building or the Project have been made by Landlord to Tenant.  Tenant acknowledges and agrees that Landlord may alter, remodel, improve and/or renovate (collectively, the “Renovation Work”) the South Tower, Plaza Building, and/or the Project, including without limitation the Parking Facilities, Common Areas, Building Systems, and Building Structure, which Renovation Work may include, without limitation (and in addition to the contemplated changes to the Common Areas identified in Section 1.4, above, and the Project Upgrades identified in Section 1.5, above): (i) the installation of sprinklers in the Project Common Areas and tenant spaces (other than the Premises), (ii) the alteration of the Common Areas and tenant spaces to comply with Laws (including Laws relating to the physically disabled, seismic conditions, and building safety and security); and (iii) the installation of new floor and wall coverings, and lighting in the South Tower and Plaza Building Common Areas, and in connection with any Renovation Work, Landlord may, among other things, erect scaffolding or other necessary structures in the South Tower and/or Plaza Building, or the Project, reasonably restrict access to portions of the Project, including portions of the Common Areas, or perform work in the South Tower, the Plaza Building and/or the Project.  Subject to the terms of this Lease, Tenant hereby agrees that such Renovation Work and Landlord’s actions in connection with such Renovation Work shall, if performed in compliance with the requirements of this Lease, in no way constitute a constructive eviction of Tenant nor entitle Tenant to any abatement of Rent (except as specifically set forth in this Lease).  Subject to Landlord’s performance of its obligations under this Section 30.24, and subject to the express provisions of this Lease, Landlord shall have no responsibility or liability to Tenant for any injury to or interference with Tenant’s business arising from any such Renovation Work, and Tenant shall not be entitled to any damages from Landlord for loss of use of the Premises, in whole or in part, or for loss of Tenant’s personal property or improvements, resulting from the Renovation Work or Landlord’s actions in connection therewith or for any inconvenience occasioned by such Renovation Work or Landlord’s actions in connection therewith.  Notwithstanding any provision of this Lease to the contrary, Landlord shall use commercially reasonable efforts, consistent with the Institutional Owner Practices applied to comparable tenants, to minimize any adverse impact on Tenant’s use of the Premises and Tenant’s business operations in the Premises in connection with any actions taken by Landlord under this Section 30.24, and shall perform such work on weekends and/or after normal business hours on weekdays if and to the extent that the performance of such work at other times would materially interface with the conduct or operation of Tenant’s business from the Premises.

30.25No Partnership or Joint Venture.  Nothing contained in this Lease shall be deemed or construed to create the relationship of principal and agent, or partnership, or joint venturer, or any other relationship between Landlord and Tenant other than that of landlord and tenant.

30.26Right to Lease.  Subject to the terms of Sections 1.6, 1.7, 1.8, 2.4, 19.2, and 19.3 and Article 28 of this Lease, Landlord reserves the absolute right to lease space in the Project and to create such other tenancies in the Project as Landlord, in its sole business judgment, shall determine is in the best interests of the Project.  Landlord does not represent and Tenant does not rely upon any specific type or number of tenants occupying any space in the Project during the Term of this Lease.

30.27Project Name and Signage.  Subject to the provisions of this Lease, Landlord shall have the right, at any time and from time to time, to change the name of the South Tower, North Tower, Plaza Building and/or the Project and to install, affix and maintain any and all signs on the exterior and on the interior of the Building and/or the Project as Landlord may so desire, in its sole and absolute discretion.

30.28Press Release.  Each of Landlord and Tenant agree to: (a) reasonably and mutually agree on the content of any public announcement and/or press release to be issued or released by either party (or any of their respective Affiliates, contractors or agents) relating to or concerning the execution of this Lease, the tenancy of Tenant within the Project or the grant of any rights to Tenant hereunder (including, without limitation, concerning and/or relating to signage rights and/or Tenant Project Identification Rights and (b) not to issue or release (or permit the issuance or release of any such public announcement or press release by any of such party’s contractors, agent and/or Affiliates) without the prior written consent of the other party hereto (which consent may be withheld in the exercise of the sole and absolute discretion of such other party).

30.29Window Washing Equipment.  In the event that Landlord or Landlord’s agents store and/or operate any window washing equipment along certain portions of the ledges surrounding the floor(s) of the Building on which the Premises are located, Landlord agrees that during all times that such equipment is not in use, such equipment shall be concealed from view from any and all employees, invitees and guests of Tenant from any portion of the

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Premises.  Landlord further agrees that no window washing personnel shall enter the Premises in order to access the exterior of the Building, except in the event of any emergency.  Otherwise, Landlord agrees that the operation of such window washing equipment shall be conducted in a manner (and during times) consistent with the practices of Comparable Buildings.

30.30Generator.  Landlord shall provide Tenant with approximately one hundred (100) rentable square feet of space (“Generator Space”) on the D-Level of the Project for the purpose of installing and operating an auxiliary electrical generator (the “Generator”). The Generator Space shall be considered part of the Premises, except that: (i) Tenant shall not be required to pay Rent for such Generator Space; (ii) such space shall be used only for purposes relating to the Generator; (iii) no services shall be provided to the Generator Space; and (iv) access to the Generator Space shall be reasonably limited by Landlord. Within twelve (12) years following the actual execution and delivery of this Lease, Tenant must request in writing that Landlord deliver the Generator Space and Landlord shall deliver such requested space to Tenant within sixty (60) days of such notice. If Tenant fails to deliver such request within such twelve (12) year period, Tenant’s rights under this Section 30.30 shall terminate and be of no further force or effect. Landlord shall deliver the Generator Space “As-Is,” with all faults and with no representations or warranties with respect to the quality or suitability of such space for Tenant’s purposes. Tenant shall be solely responsible for all costs and expenses and for the performance or any work required to comply with applicable Laws as may be applicable to Tenant’s installation of the Generator and the use of the Generator Space. Landlord shall use commercially reasonable efforts to provide Tenant with reasonable access to the Risers in the South Tower and/or the Plaza Building and other parts of the Project and to Building Systems for the purpose of connections (“Utility Connections”) necessary to connect the Generator with the portions of the Premises to be serviced by such Generator. No such Utility Connections shall interfere with Landlord’s operation of the Building Systems for the Project. The installation and removal of such Utility Connections shall be performed by Tenant at Tenant’s sole cost and expense in a good and workmanlike manner using quality materials and following Landlord’s reasonable approval of the plans and specifications for such work. At the end of the Lease Term, Tenant shall surrender the Generator Space to Landlord with the Generator and the Utility Connections removed and all affected areas of the South Tower, the Plaza Building and the Project restored to the condition existing prior to the installation of the Generator. Tenant, at its sole cost and expense, shall submeter the electricity, water and other Utility Connections to the Generator and shall be solely responsible for all such utility costs, and any and all taxes relating thereto.

30.31Telecommunications Equipment.  At any time during the Lease Term, subject to the terms of this Section 30.31; Tenant may install, at Tenant’s sole cost and expense, telecommunications equipment, including satellite dishes and/or antennae (the “Telecommunications Equipment”) in up to one hundred (100) square feet of space upon the roof of the South Tower or on the South Tower mechanical floors, as selected by Landlord. The physical appearance, specifications and the size of the Telecommunications Equipment shall be subject to Landlord’s reasonable approval, the location of any such installation of the Telecommunications Equipment shall be designated by Landlord and Landlord may require Tenant to install screening around such Telecommunications Equipment, at Tenant’s sole cost and expense, as reasonably designated by Landlord. Tenant shall maintain such Telecommunications Equipment, at Tenant’s sole cost and expense. In the event Tenant elects to exercise its right to install the Telecommunication Equipment, then Tenant shall give Landlord prior written notice thereof and Landlord and Tenant shall execute a commercially reasonable amendment to this Lease covering the payment for installation costs, if any, of the Telecommunications Equipment, the installation and maintenance of such Telecommunications Equipment, Tenant’s indemnification of Landlord with respect thereto, Tenant’s obligation to remove such Telecommunications Equipment upon the expiration or earlier termination of this Lease, and other related matters.

30.32Time Periods for Performance.  Whenever the Landlord or Tenant is required to perform any obligation but a specific period of time for such performance or date for payment is not set forth, then: (a) with respect to payments, regardless of the use of words such as “promptly” or “on demand,” payment shall be due within thirty (30) days of demand and (b) with respect to performance subject to the concept of commercial reasonableness requirements, performance shall be started as soon as reasonably possible and shall be diligently prosecuted to completion.

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IN WITNESS WHEREOF, this Lease is hereby executed as of the Effective Date.

LANDLORD:
TPG PLAZA INVESTMENTS, LLC
a Delaware limited liability company
By:	TPGA, LLC
	a Delaware limited liability company, its Managing Member
	By:	TPG/CALSTRS, LLC
		a Delaware limited liability company, its Managing Member
		By:	THOMAS PROPERTIES GROUP, LLC
			a Delaware limited liability company, its Managing Member
			By:	/s/ James A. Thomas
			Print Name:	James A. Thomas
			Title:	President & CEO

TENANT:
CITY NATIONAL BANK,
a national banking association
By:	/s/ Russell Goldsmith
Print Name:	Russell Goldsmith
Title:	Chairman of the Board & CEO
By:	/s/ Frank P. Pekny
Print Name:	Frank P. Pekny
Title:	CFO

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DEPICTION OF

THE PLAZA BUILDING SPACE

[GRAPHIC]

EXHIBIT “A”

DEPICTION OF THE PREMISES

[GRAPHIC]

[GRAPHIC]	Arco Plaza South Tower – Floor S9	© 1985-2003 Stevenson Systems, Inc.
	555 S. Flower St., Los Angeles, CA 90071	All Rights Reserved / www.stevensonsystems.com

[GRAPHIC]

[GRAPHIC]	Arco Plaza South Tower – Floor S10	© 1985-2003 Stevenson Systems, Inc.
	555 S. Flower St., Los Angeles, CA 90071	All Rights Reserved / www.stevensonsystems.com

[GRAPHIC]

[GRAPHIC]	Arco Plaza South Tower – Floor S11	© 1985-2003 Stevenson Systems, Inc.
	555 S. Flower St., Los Angeles, CA 90071	All Rights Reserved / www.stevensonsystems.com

[GRAPHIC]

[GRAPHIC]	Arco Plaza South Tower – Floor S12	© 1985-2003 Stevenson Systems, Inc.
	555 S. Flower St., Los Angeles, CA 90071	All Rights Reserved / www.stevensonsystems.com

[GRAPHIC]

[GRAPHIC]	Arco Plaza South Tower – Floor S13	© 1985-2003 Stevenson Systems, Inc.
	555 S. Flower St., Los Angeles, CA 90071	All Rights Reserved / www.stevensonsystems.com

[GRAPHIC]

[GRAPHIC]	Arco Plaza South Tower – Floor S16	© 1985-2003 Stevenson Systems, Inc.
	555 S. Flower St., Los Angeles, CA 90071	All Rights Reserved / www.stevensonsystems.com

[GRAPHIC]

[GRAPHIC]	Arco Plaza South Tower – Floor S17	© 1985-2003 Stevenson Systems, Inc.
	555 S. Flower St., Los Angeles, CA 90071	All Rights Reserved / www.stevensonsystems.com

[GRAPHIC]

[GRAPHIC]	Arco Plaza South Tower – Floor S18	© 1985-2003 Stevenson Systems, Inc.
	555 S. Flower St., Los Angeles, CA 90071	All Rights Reserved / www.stevensonsystems.com

[GRAPHIC]

[GRAPHIC]	Arco Plaza South Tower – Floor S19	© 1985-2003 Stevenson Systems, Inc.
	555 S. Flower St., Los Angeles, CA 90071	All Rights Reserved / www.stevensonsystems.com

[GRAPHIC]

[GRAPHIC]	Arco Plaza South Tower – Floor S20	© 1985-2003 Stevenson Systems, Inc.
	555 S. Flower St., Los Angeles, CA 90071	All Rights Reserved / www.stevensonsystems.com

[GRAPHIC]

[GRAPHIC]	Arco Plaza South Tower – Floor S21	© 1985-2003 Stevenson Systems, Inc.
	555 S. Flower St., Los Angeles, CA 90071	All Rights Reserved / www.stevensonsystems.com

[GRAPHIC]

[GRAPHIC]	Arco Plaza South Tower – Floor S22	© 1985-2003 Stevenson Systems, Inc.
	555 S. Flower St., Los Angeles, CA 90071	All Rights Reserved / www.stevensonsystems.com

EXHIBIT “A-1”

DEPICTION OF THE SOUTH SIDE SPACE

[GRAPHIC]

City National Lease

EXHIBIT “B”

NOTICE OF LEASE TERM DATES

To:

Re:          Office Lease dated November 19, 2003 between TPG PLAZA INVESTMENTS, LLC, a Delaware limited liability company (“Landlord”), and CITY NATIONAL BANK, a national banking association (“Tenant”) concerning Suite            on floor             of the office buildings located at 525 and 555 S. Flower, Los Angeles, California.

Ladies and Gentlemen:

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

1.             Commencement of Term:

(a)The First Increment Office Space is substantially completed, and, with respect to the First Increment Office Space, the Term shall commence on or has commenced on                               for a term of                                (          ) months ending on                                                .

(b)The Second Increment Office Space is substantially completed, and, with respect to the Second Increment Office Space, the Term shall commence on or has commenced on                                for a term of                            (          ) months ending on                                   .

(c)The Plaza Building Space is substantially completed, and, with respect to the Plaza Building Space, the Term shall commence on or has commenced on                                for a term of                                (          ) months ending on                                       .

(d)The Third Increment Office Space is substantially completed, and, with respect to the Third Increment Office Space, the Term shall commence on or has commenced on                                for a term of                                (          ) months ending on                                     .

(e)The Fourth Increment Office Space is substantially completed, and, with respect to the Fourth Increment Office Space, the Term shall commence on or has commenced on                               for a term of                             (          ) months ending on                            .

2.Rent Commencement:

(a)With respect to the First Increment Office Space, Rent commenced to accrue on                                , in the amount of  $                               .

(b)With respect to the Second Increment Office Space, Rent commenced to accrue on                             , in the amount of $                               .

(c)With respect to the Plaza Building Space, Rent commenced to accrue on                       , in the amount of $                               .

(d)With respect to the Third Increment Office Space, Rent commenced to accrue on                                , in the amount of $                               .

(e)With respect to the Fourth Increment Office Space, Rent commenced to accrue on                         , in the amount of  $                               .

3.If any 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 TPG Plaza Investments, LLC.

5.Premises:

(a)The exact number of stipulated rentable square feet within the First Increment Office Space is                                 square feet.

(b)The exact number of stipulated rentable square feet within the Second Increment Office Space is                                 square feet.

(c)The exact number of stipulated rentable square feet within the Plaza Building Space is                                square feet

(d)The exact number of stipulated rentable square feet within the Third Increment Office Space is                                square feet

(e)The exact number of stipulated rentable square feet within the Fourth Increment Office Space is                     square feet.

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

(a)With respect to the First Increment Office Space,                          %.

(b)With respect to the Second Increment Office Space,                          %.

(c)With respect to the Plaza Building Space,                          %.

(d)With respect to the Third Increment Office Space,                          %.

(e)With respect to the Fourth Increment Office Space,                          %.

LANDLORD:

TPG PLAZA INVESTMENTS, LLC

a Delaware limited liability company

By:	TPGA, LLC
	a Delaware limited liability company, its Managing Member
	By:	TPG/CALSTRS, LLC
		a Delaware limited liability company, its Managing Member
		By:	THOMAS PROPERTIES GROUP, LLC
			a Delaware limited liability company, its Managing Member
			By:
			Print Name:
			Title:

Agreed to and Accepted as

of                               , 20         .

TENANT:

CITY NATIONAL BANK,

a national banking association

By:

Print Name:

Title:

By:

Print Name:

Title:

EXHIBIT “C”

WORK LETTER

EXHIBIT “C”

525-555 SOUTH FLOWER STREET

WORK LETTER

PREAMBLE

This Work Letter (“Work Letter”) sets forth the terms, covenants and conditions relating to the construction of Tenant’s improvements in the Premises including for each of the First Increment Office Space (the “First Increment Tenant Improvements”), the Second Increment Office Space (the “Second Increment Tenant Improvements”), the Third Increment Office Space (the “Third Increment Tenant Improvements”), the Fourth Increment Office Space (the “Fourth Increment Tenant Improvements”) the Added Hold Space, if any, is added to the Premises (the “Hold Space Tenant Improvements”) (collectively, the “South Tower Tenant Improvements”), and the Plaza Building Space (the “Plaza Building Tenant Improvements”) (the First Increment Tenant Improvements, the Second Increment Tenant Improvements, the Third Increment Tenant Improvements, the Fourth Increment Tenant Improvements, the Hold Space Tenant Improvements (if any) and the Plaza Building Tenant Improvements, are each referred to herein as a “Tenant Improvements Increment,” and are collectively referred to herein as the “Tenant Improvements”), and to the extent that other portions of the Lease specifically refer to specific Sections of this Work Letter, the same shall apply. All references in this Work Letter to Articles or Sections of this “Lease” or the “Lease” shall mean the relevant portions of the Office Lease to which this Work Letter is attached as Exhibit “C.” and all references in this Work Letter (or in the Lease) to Sections of this “Work Letter” shall mean the relevant portions of all Sections of this Work Letter. Except as defined to the contrary, all terms used in initial capitals in this Work Letter without definition herein shall have the same definitions provided for those terms in the Lease.

SECTION 1

DELIVERY OF THE PREMISES AND PERFORMANCE OF THE BASE BUILDING WORK

1.lSouth Tower Premises.

1.1.1Initial South Tower Premises. Subject to the provisions of this Work Letter, with respect to each Increment of Space (and any Added Hold Space) located in the South Tower, Landlord has constructed, or will cause to be constructed, prior to the date on which Landlord shall actually tender delivery of possession to Tenant (the “Delivery Date”) of such Increment of Space (or Added Hold Space, as the case may be), at Landlord’s sole cost and expense, and without deduction from the Tenant Improvement Allowance (as that term is defined in Section 2.1, below), and without charge to Tenant, the “South Tower Base Building Work” (as defined in Schedule 1-B attached hereto).  With respect to each Increment of Space, Landlord shall provide to Tenant a set of Background Plans (defined in this Section 1.1.1, below) for the South Tower Base Building Work in such Increment of Space (or floors therein) (each such set of Background Plans is referred to herein as a set of “South Tower Increment Background Plans”) on or before the date specified for delivery of Background Plans for such Increment of Space (or the floors therein) in Part 1 of Schedule 1-A attached hereto. For purposes of this Work Letter, “Background Plans” shall mean complete plans and specifications in customary form for the portion of the Premises in question in shell, unoccupied condition but with all “Base Building Work” (which shall refer to South Tower Base Building Work for all increments of Space and Added Hold Space in the South Tower and to Plaza Building Base Building Work (as defined in Schedule 1-D attached hereto) the Plaza Building Space (specifically excluding the plans and specifications for reconstruction of the restrooms on each Floor to be constructed by Landlord), but without adjustment for any existing conditions thereafter discovered by Landlord (or for any changes in such Base Building Work (or such space) thereafter required by any governmental agency and/or official) in performing the Base Building Work for such space. The South Tower Base Building Work contains, or shall contain, the items and work set forth on Schedule 1-B. Notwithstanding any provision to the contrary set forth in this Work Letter (or in the Lease) (but subject to Sections 5.1.3 and 5.1.4) , with the exception of (a) the “South Tower ACM Abatement Work” (as defined in Section l(b)(i) of Schedule 1-B, below) within such Increment of Space (or Added Hold Space) and (b) the remainder of the Minimum Base Building Work (defined in Schedule 1-C attached hereto) within such Increment of Space (or Added Hold Space), Landlord shall not be required to complete construction of any item or portion of the South Tower Base Building Work in (or with respect to) such Increment of Space (or Added Hold Space) prior to the date which is sixty (60) days following the Delivery Date for such Increment of Space (or Added Hold Space), but Landlord nevertheless shall be required to substantially complete all such South Tower Base Building Work within each such Increment of Space (not including any Punch List Items (as defined in Section 5.3, below) or any window coverings described in Section l(c)(xvi) of Schedule 1-B) within sixty (60) days following the Delivery Date for such Increment of Space; provided, however, that notwithstanding any provision of the Lease or this Work Letter to the contrary, (i) with respect to each of the Second Increment Office Space, Third Increment Office Space, and Fourth Increment Office Space (and the Added Hold Space, if any) and with respect to all floors within the First Increment Office Space except for the sixteenth (16th) floor, Tenant shall have the option (the “Special Restroom Allowance Option”), exercisable by delivery of written notice to Landlord at any time prior to December 15, 2003, (June 15, 2004, in the case of the Third Increment Office Space and the Fourth Increment Office Space), to elect to receive a special tenant improvement allowance (the “Special Restroom Allowance”) to be disbursed as part of the Tenant Improvement Allowance for such Increment of Space equal to * ) per floor included in the applicable Increment of Space (i.e., if Tenant were to elect to receive the special Restroom Allowance for the entire Second Increment Office Space, the Special Restroom Allowance shall equal $ * or such floors) in lieu of having Landlord perform any work under Section l(c)(xii) (and any work under Sections l(c)(ii), (iii), (iv), (v), (viii) or (ix) specifically applicable to the restroom space on any such floor) of Schedule 1-B attached hereto or any work under Section 2 of

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Schedule 1-B attached hereto to the extent specifically applicable to the restrooms located on such floors (collectively, as to each such Floor, “Restrooms Renovation,”), (ii) in any case where Tenant shall elect to exercise the Special Restroom Allowance Option (which shall only be exercisable on a full floor by full floor basis) as to any floors in a particular Increment of Space, Tenant alone shall be obligated to perform the Restrooms Renovation with respect to such floors (for which Tenant has elected the Special Restroom Allowance Option), and Landlord shall have no obligation to perform any of the Restrooms Renovation with respect to such floors (for which Tenant has elected the Special Restroom Allowance Option), (iii) in the event Tenant shall not exercise the Special Restroom Allowance Option with respect to any floor contained in the First Increment Office Space (other than Floor 16), the Second Increment Office Space, the Third Increment Office Space or the Fourth Increment Office Space on or before December 15, 2003, (or June 15, 2004, as applicable), the Special Restroom Allowance Option shall automatically lapse as to such floor or floors, and Landlord shall perform such Restrooms Renovation with respect to such floors, and (iv) in all cases for each Base Building Work Punch List Item, Landlord shall be given a commercially reasonable period of time to perform each such Base Building Work Punch List Item. The condition in which Landlord is required to deliver a particular Increment of Space (or Added Hold Space) under this Section 1 (and Schedule 1-C) on the Delivery Date for such Increment of Space (taking into account the provisions of Schedule 1-C) is referred to herein as the “Delivery Condition” of such Increment of Space (or Added Hold Space, if any).  Tenant acknowledges and agrees that, subject to Landlord’s obligation to complete the ACM Abatement Work and the Minimum Base Building Work in (or with respect to) any Increment of Space (or Added Hold Space) (and to otherwise put the Increment of Space in question in Delivery Condition), before tendering delivery of possession of such Increment of Space (or Added Hold Space) to Tenant, following the Delivery Date for such Increment of Space (or Added Hold Space), Landlord, and/or Landlord’s contractors, agents and employees shall be permitted to have reasonable access to such Increment of Space (or Added Hold Space) for the purpose of prosecuting and completing any remaining Landlord’s South Tower Base Building Work for such Increment of Space (or Added Hold Space) at all times following the Delivery Date for such Increment of Space (or Added Hold Space).

1.1.2Expansion Space.  Subject to the provisions of this Work Letter, with respect to any Expansion Space leased by Tenant pursuant to Section 1.7 of the Lease, (i) Landlord has constructed, or will cause to be constructed, prior to the Delivery Date for such Expansion Space, at Landlord’s sole cost and expense, and without charge to Tenant, the South Tower Base Building Work for such Expansion Space and (ii) on or before the date that is sixty (60) days before the then scheduled Delivery Date for any such Expansion Space leased by Tenant, Landlord shall provide to Tenant a set of Background Plans for the South Tower Base Building Work in such Expansion Space (each such set of Background Plans is referred to herein as “Expansion Space Increment Background Plans”). The South Tower Base Building Work contains, or shall contain, the items and work set forth on Schedule 1-B; provided, however, that notwithstanding any provision to the contrary set forth in this Work Letter (or in the Lease), with the exception of, (a) the South Tower ACM Abatement Work within or pertaining to any such Expansion Space, and (b) the Minimum Base Building Work within or pertaining to any such Expansion Space, Landlord shall not be required to complete construction of any item or portion of the South Tower Base Building Work for any Expansion Space prior to the Expansion Space Commencement Date for such Expansion Space, but Landlord nevertheless shall be required to substantially complete all such South Tower Base Building Work within each such Expansion Space (not including any Punch List Items (as defined in Section 5.3, below) or any window coverings described in Section l(c)(xvi) of Schedule 1-B) within sixty (60) days following the Delivery Date for such Expansion Space.  Tenant acknowledges and agrees that, subject to Landlord’s obligation to complete the ACM Abatement Work and the Minimum Base Building Work in (or with respect to) any such Expansion Space before tendering delivery possession of such Expansion Space to Tenant, following the Delivery Date for any such Expansion Space, Landlord, and/or Landlord’s contractors, agents and employees shall be permitted to have reasonable access to such Expansion Space for the purpose of prosecuting and completing any remaining Base Building Work for such Expansion Space.

1.2Plaza Building Space.  Subject to the provisions of this Work Letter, with respect to the Plaza Building Space, (i) Landlord has constructed, or will cause to be constructed, prior to the Delivery Date for the Plaza Building Space, at Landlord’s sole cost and expense, without deduction from the Tenant Improvement Allowance for the Plaza Building Space and without charge to Tenant, the “Plaza Building Base Building Work” (as defined in Schedule 1-D, attached hereto) and (ii) on or before May 15, 2004, Landlord shall provide to Tenant a set of complete Background Plans for the Plaza Building Base Building Work to be performed within the Plaza Building Space (the “Plaza Building Space Background Plans”). The Plaza Building Base Building Work contains, or shall contain, the items and work set forth on Schedule 1-D; provided, however, that notwithstanding any provision to the contrary set forth in this Work Letter (or in the Lease), with the exception of, (a) the “Plaza Building ACM Abatement Work” (as defined in Section l(b)(i) of Schedule 1-D, below) within the Plaza Building Space and (b) the Minimum Base Building Work within the Plaza Building Space, Landlord shall not be required to complete construction of any item or portion of the Plaza Building Base Building Work in (or with respect to) the Plaza Building Space prior to the Plaza Building Commencement Date, but Landlord nevertheless shall be required to substantially complete all such Plaza Building Base Building Work within the Plaza Building Space (not including any Punch List Items (as defined in Section 5.3, below), any Plaza Building Base Building Work located outside the Plaza Building Space, or any window coverings described in Section l(c)(xvii) of Schedule 1-D) sixty (60) days following the Delivery Date for the Plaza Building Space.  Tenant acknowledges and agrees that, subject to Landlord’s obligation to complete the Plaza Building ACM Abatement Work and the Minimum Base Building Work before tendering delivery of the Plaza Building Space to Tenant on the Delivery Date therefor, following the Delivery Date for the Plaza Building Space, Landlord, and/or Landlord’s contractors, agents and employees shall be permitted to have reasonable access to the Plaza Building Space for the purpose of prosecuting and completing any remaining Landlord’s Plaza Building Base Building Work.

1.3Substitutions For Base Building Work.  Subject to the provisions of Section 3.7 of this Work Letter, Tenant may, on delivery of ten (10) business days’ advance written notice (a “Base Building Substitution Notice”) to Landlord, elect to have Landlord, to the extent permitted by applicable Laws, with respect to any of the

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Base Building Substitution Items (defined in this Section 1.3, below), construct or install, as a substitute for any such Base Building Substitution Item, an item or component of equal or greater quality (each such substituted item or component is referred to herein as a “Tenant Substituted Base Building Item”), and if Tenant so elects to substitute a Tenant Substituted Base Building Item for a Base Building Substitution Item, Tenant shall pay to Landlord an amount equal to all costs and expenses actually incurred by Landlord for, and/or in connection with, the design, permitting, construction, substitution and/or installation of each such Tenant Substituted Base Building Item (on an installed basis), as reasonably estimated by Landlord (less the full cost which would have otherwise been incurred by Landlord with respect to the construction and installation of the Base Building Substitution Item for which Tenant substituted the Tenant Substituted Base Building Item). Within ten (10) business days of receipt of Tenant’s written request to do so, Landlord shall consult with Landlord’s consultants and agents (and/or contractors) and cause to be delivered to Tenant a good faith (but nonbinding) estimate of the cost of designing, engineering and installing any particular Tenant Substituted Base Building Item. For purposes of this Work Letter, the “Base Building Substitution Items” shall, as to each Increment of Space, (i) only mean any portion (or item or component) of the Base Building Work for such Increment of Space which has not been ordered, installed, performed and/or constructed by Landlord (or by any of Landlord’s contractors or subcontractors), in whole or in part, as of the date the Base Building Substitution Notice with respect to such Base Building Substitution Item is actually received by Landlord, and (ii) shall not include any of the items, components or other work described on Schedule 1-E attached hereto (the “No Substitution Items”). Notwithstanding any provision of this Work Letter or the Lease to the contrary, Tenant acknowledges and agrees that any delays in the design, permitting, commencement and/or completion of any portion of the Base Building Work and/or in the commencement, prosecution and/or completion of the design, permitting and/or construction of any portion of the Tenant Improvements hereunder resulting in any manner from any Tenant request to substitute any Tenant Substituted Base Building Item for any Base Building Substitution Item shall be the sole responsibility of Tenant hereunder (and at the sole cost of Tenant), shall (if any such Tenant requested substitution for any Base Building Substitution Item shall result in any delay in the design, permitting, commencement and and/or completion of any Base Building Work) constitute a “Tenant Delay” under Section 5.5 below, and shall in no event be the basis of any claim of Commencement Date Delay hereunder by Tenant.

SECTION 2

TENANT IMPROVEMENTS

2.1Tenant Improvement Allowance.   Tenant shall be entitled to a tenant improvement allowance with respect to each Increment of Space as follows:

2.1.1in an amount equal to * per square foot of Rentable Area stipulated in the Lease to be attributable to the First Increment Office Space (the “First Increment Tenant Improvement Allowance”);

2.1.2in an amount equal to * per square foot of Rentable Area stipulated in the Lease to be attributable to the Second Increment Office Space (the “Second Increment Tenant Improvement Allowance”);

2.1.3in an amount equal to * per square foot of Rentable Area stipulated in the Lease to be attributable to the Plaza Building Space (the “Plaza Building Tenant Improvement Allowance”);

2.1.4in an amount equal to * ) per square foot of Rentable Area stipulated in the Lease to be attributable to the Third Increment Office Space (the “Third Increment Tenant Improvement Allowance”);

2.1.5in an amount equal to * per square foot of Rentable Area stipulated in the Lease to be attributable to the Fourth Increment Office Space (the “Fourth Increment Tenant Improvement Allowance”); provided, however that in the event that Tenant shall delete any portion of the Initial Reduction Space from the Fourth Increment Office Space pursuant to Section 1.6.1 of the Lease, the Fourth Increment Tenant Improvement Allowance shall be reduced by an amount equal to the product of Forty Dollars ($40.00) and the number of square feet of Rentable Area contained in the Initial Reduction Space so deleted from the Premises by Tenant pursuant to Section 1.6.1.

Each of the First Increment Tenant Improvement Allowance, the Plaza Building Tenant Improvement Allowance, the Second Increment Tenant Improvement Allowance, the Third Increment Tenant Improvement Allowance and the Fourth Increment Tenant Improvement Allowance may be referred to, individually, hereinafter as an “Increment Tenant Improvement Allowance,” and collectively (and in the aggregate) hereinafter as the “Tenant Improvement Allowance.”

Subject to Tenant’s right to receive the Tenant Improvement Allowance, and subject to the Lease and the provisions of this Work Letter, (a) with respect to each Increment of Space, Tenant shall bear all of the costs of designing, constructing, installing, fixturing, furnishing and completing the Tenant Improvements Increment (and all Tenant Improvements) for such Increment of Space in accordance with the provisions of this Work Letter, and (b) except for the South Tower Base Building Work and the Plaza Building Base Building Work, and except as otherwise set forth in this Work Letter or in the Lease, Landlord shall not be obligated to make any payments or disbursements pursuant to or related to this Work Letter in a total amount which exceeds the amount of the Increment Tenant Improvement Allowance (nor shall Landlord be obligated to make such payments or disbursements pursuant to this Work Letter) for such Increment of Space.

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2.2Use of the Tenant Improvement Allowance.    Except as otherwise set forth in this Work Letter (including in Section 2.4, below), the Increment Tenant Improvement Allowance for each Increment of Space shall be disbursed by Landlord (which disbursement shall be made pursuant to Landlord’s disbursement process set forth in Section 2.3, below) only for the following items and costs (collectively the “Tenant Improvement Allowance Items” or “Tenant Improvement Allowance Costs”) requested and approved in writing by Tenant for disbursement:

2.2.1Payment of the fees of (i) the “Architect” and the “Engineers” (as those terms are defined in Section 3.1 of this Work Letter), and (ii) any consultants engaged by Tenant in connection with Tenant’s design, permitting, installation and/or construction of the Tenant Improvements for such Increment of Space;

2.2.2The payment of plan check, permit and license fees relating to construction of the Tenant Improvements in such Increment of Space;

2.2.3The cost of constructing the Tenant Improvements in such Increment of Space, including costs for carpet and floor coverings;

2.2.4The cost of any Base Building Changes (defined in Section 3.7, below) to the South Tower and/or the Plaza Building and/or the Project (to the extent that, pursuant to this Work Letter, such costs are not required to be paid for and absorbed by Landlord without deduction from the Tenant Improvement Allowance), with such cost to include all architectural and/or engineering fees and expenses incurred in connection therewith (where the cost of such changes is to be borne by Tenant pursuant to the provisions of this Work Letter);

2.2.5The cost of any changes to the Construction Drawings (defined in Section 3.1.1, below) or any portion of the Tenant Improvements for such Increment of Space required by applicable Laws;

2.2.6Sales and use taxes and Title 24 fees in connection with the construction of the Tenant Improvements for such Increment of Space;

2.2.7The cost of furniture, fixtures, freestanding work stations, reception desks, telecommunications and other equipment and related wiring, audiovisual equipment, and security systems for such Increment of Space with respect to which Tenant seeks reimbursement hereunder.

All disbursements of the Tenant Improvement Allowance shall be made by Landlord only following request by Tenant for disbursement of the same under Section 2.3.  In addition to the foregoing, Tenant shall reimburse Landlord’s direct, actual, out-of-pocket costs incurred in good faith by Landlord and paid by Landlord to a third-party in connection with Landlord’s review and approval of the Construction Drawings in accordance with Institutional Owner Practices.  By written notice to Landlord, Tenant may also elect to have such costs deducted from the Tenant Improvement Allowance.

2.3Disbursement of Tenant Improvement Allowance.   Prior to, during and following the design, permitting, and/or construction of the Tenant Improvements for each Increment of Space, as the case may be, and with respect to the payment of any other items contemplated by Section 2.2 above, Landlord shall make monthly disbursements of the Tenant Improvement Allowance with respect to such Increment of Space for Tenant Improvement Allowance Items as follows:

2.3.1Monthly Disbursements.

(a)Request for Payment.   With respect to each Increment of Space, on or before the twenty-fifth (25th) day (the “Submittal Date”) of each calendar month commencing with the first calendar month following the full execution and delivery of this Lease), Tenant shall deliver to Landlord a request for payment (“Request for Payment”): (i) summarizing and enclosing invoices from all of Tenant’s agents, contractors, materialmen, laborers and suppliers which are retained by Tenant (collectively, “Tenant’s Agents”), for Tenant Improvement Allowance Items and/or labor rendered and materials delivered to (or with respect to) the applicable Increment of Space (and covered by the Request for Payment) for the applicable payment period, and, (ii) in addition to the requirements of clause (i) above, Tenant shall deliver to Landlord executed conditional mechanic’s lien releases from all subcontractors and Tenant’s Agents (who have potential mechanic’s lien rights under applicable Law), as applicable, which shall comply with the provisions of California Civil Code Section 3262(d)(1) or Section 3262(d)(3), as applicable, for all work requested to be paid for from the Tenant Improvement Allowance for the applicable Increment of Space under such Request for Payment. Landlord’s receipt from Tenant of a Request for Payment signed by Tenant shall be deemed to constitute Tenant’s authorization for Landlord to disburse the amounts requested to Tenant as set forth in the Request for Payment and to deduct such amounts from the applicable Increment Tenant Improvement Allowance. Landlord’s receipt from tenant of a Request for Payment (or of invoices from Tenant’s Agents) shall be deemed Tenant’s acceptance and approval of the work furnished and/or the materials supplied to the Premises as set forth in Tenant’s Request for Payment vis-à-vis Landlord (but not vis-à-vis Tenant’s Agents).

(b)Payment.   On or before the date which is twenty-three (23) days after the date on which Landlord receives a Request for Payment from Tenant (the “Payment Date”), and on the condition that Landlord shall receive the applicable information and/or materials described in subparagraphs (i) and (ii) of Section 2.3.1(a), above, and for all work requested to be paid for from the applicable Increment Tenant Improvement Allowance for the Increment of Space in question under such Request for Payment, and unconditional lien releases, if applicable, for all work paid for from such Increment Tenant Improvement Allowance on the previous Payment Date (and to the extent not previously received for any work in the Project paid for from any

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portion of the Tenant Improvement Allowance), Landlord shall deliver a check to Contractor or to Tenant, as directed by Tenant, in payment of the lesser of: (A) the amounts so requested in the Request for Payment, as set forth in Section 2.3.1(a), above, and (B) subject to the provisions of Section 2.3.2, below, the balance of any remaining available portion of the applicable Tenant Improvement Allowance for the Increment of Space in question, less (subject to the provisions of this Section 2.3.1.2) a ten percent (10%) retention (the aggregate amount of such retentions for each Increment of Space to be known as the “Final Retention” for such Increment of Space). The foregoing ten percent (10%) retention on disbursements shall be calculated so as to not be duplicative of any retention separately imposed by Tenant with respect to any payment to a Contractor.

2.3.2Final Retention.   Tenant shall submit for Landlord’s records, copies of all requests for payments received by Tenant from the Contractor and Tenant’s Agents, through the Contractor’s final application for payment. Subject to the provisions of this Work Letter, checks for the Final Retention for each Increment of Space payable to Tenant for construction of a particular Tenant Improvements Increment shall be delivered by Landlord to Tenant within forth-five (45) days of the date following Substantial Completion (defined in Section 5.3, below) of such Tenant Improvements Increment on which Contractor or Tenant shall have delivered to Landlord properly executed copies of all unconditional mechanics lien releases (which unconditional mechanics lien releases shall comply with both California Civil Code Section 3262(d)(2) and either Section 3262(d)(3) or Section 3262(d)(4) (as applicable)) from all Subcontractors and Tenant’s Agents (who have potential mechanics’ lien rights under applicable Laws) and a copy of a final invoice from the Contractor requesting payment of the amount of the Final Retention in question.

2.3.3Rental Offset Right.   In the event that Landlord fails to fulfill its obligation to disburse an Increment Tenant Improvement Allowance in accordance with the provisions of this Section 2.3, and such failure continues for ten (10) days after written notice of such failure is delivered by Landlord to Tenant, Tenant shall have the right, in addition to any other rights or remedies available to Tenant under the Lease, or at Law or in equity, to offset against Tenant’s obligations to pay Rent next coming due under the Lease, the amount of the Increment Tenant Improvement Allowance that Landlord so fails to disburse to Tenant (“Nondisbursed Amount”), together with interest at the Interest Rate computed from the date such amount should have been disbursed by Landlord to Tenant under this Section 2.3 until the earlier of: (i) the date of the offset or (ii) the date Landlord pays such amount to Tenant.

2.4Rent Credit.   If and to the extent the entire amount of any Increment Tenant Improvement Allowance has not been disbursed by Landlord to Tenant pursuant to Section 2.3 (or offset against Rent under Section 2.3.3), on or before the date that is sixty (60) days after Substantial Completion of the Tenant Improvements Increment for a particular Increment of Space, Tenant shall have the right to elect, in its sole discretion, exercisable by written notice given to Landlord, to apply the then remaining balance of the applicable Increment Tenant Improvement Allowance against Tenant’s obligations to pay Base Rent and Additional Rent next becoming due and payable under the provisions of the Lease.

2.5Standard Tenant Improvement Package.   Landlord has established certain mandatory specifications (the “Specifications”) for Building standard components to be used in the construction of the Tenant Improvements (and/or other Alterations or Improvements) in the Premises, which Specifications are set forth on Schedule 2 attached hereto. The Tenant Improvements (and all Alterations and other Improvements) shall comply with such Specifications; provided, however, that: (a) except as is specifically described on Schedule 2, attached hereto (and subject to clause (b) below), Tenant may, at Tenant’s option, substitute for any item or component required under the Specifications, an item or component of substantially equal or greater quality and (b) Tenant shall have no right to (and shall not) install any locks within the Premises that are not compatible with (and do not work with) Landlord’s master key system for the Project; provided, further, however, that Tenant may: (i) cause such locks to be operated by any other mechanism or system (including key card systems) in addition to by keys that are compatible with Landlord’s master key system for the Project and (ii) install locks of any kind on any of Tenant’s Secured Areas without regard to the compatibility (or incompatibility) of such locks with Landlord’s master key system for the Project. In the event that, at any time during the Term, Tenant leases or otherwise occupies any partial floor in the South Tower or in the Plaza Building, and in connection with such lease or occupancy of such partial floor, Tenant desires to construct or perform modifications to the improvements contained within the Common Areas (the “Partial Floor Common Areas”) on such partial floor (including, but not limited to, the restrooms on such partial floor), (i) any such modifications shall require Landlord’s prior written approval under Section 3.7, below, and (ii) notwithstanding any provision of Section 3.7 to the contrary: (A) if Tenant is not leasing more than fifty percent (50%) of the Rentable Area on such floor, or if any other tenant’s tenancy on such floor predates Tenant’s tenancy on such floor and such other tenant’s lease restricts or otherwise prohibits modifications to such Common Areas (such that Tenant’s proposed modifications would violate such other tenant’s lease), Landlord may withhold such approval in the exercise of its sole and absolute discretion, and (B) in any event, such modifications shall be of a quality and quantity at least equal to Landlord’s Specifications then in effect.

2.6          Expansion Space.   If and to the extent that any allowance for construction of Expansion Space Improvements is provided for any Expansion Space leased by Tenant (any such allowance is referred to herein as an “Expansion Space Improvement Allowance”), such Expansion Improvement Allowance shall be: (i) used only for Tenant Improvement Allowance Items and (ii) shall be disbursed to Tenant by Landlord only in accordance with the provisions of Section 2.3 of this Work Letter.

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SECTION 3

CONSTRUCTION DRAWINGS

3.1Selection of Architect/Construction Drawings.

3.1.1Initial Premises.   Tenant shall retain an architect or space planner approved by Landlord (the “Architect”), which approval shall not be unreasonably withheld, conditioned or delayed (and Landlord hereby approves the use by Tenant of each of * , with respect to the entire Premises (or for any Increment of Space therein (or any Added Hold Space or Expansion Space leased by Tenant)) and * with respect to the Plaza Building Space only), to prepare the Construction Drawings for each Increment of Space (and any Added Hold Space or other space leased by Tenant). Tenant shall select and retain engineering consultants approved by Landlord (the “Engineers”), which approval shall not be unreasonably withheld, conditioned or delayed, to prepare all plans and engineered working drawings relating to the structural, mechanical, electrical, plumbing, HVAC, lifesafety, and sprinkler work for each Increment of Space (or other space) to be located within the Premises, to the extent such work is not part of the South Tower Base Building Work or the Plaza Building Base Building Work; provided, however, that notwithstanding any provision of this Work Letter to the contrary, (a) in connection with the preparation of that portion of any such Construction Drawings relating to the mechanical, electrical, and plumbing systems (“MEP Systems”), Tenant shall select * * , as the MEP Systems Engineer; (b) in connection with the preparation of that portion of the Construction Drawings (including any Expansion Space Construction Drawings) relating to structural items, Tenant shall select one of * as the Structural Engineer; and (c) with respect to design and engineering of all portions of the Tenant Improvements (including, without limitation, Expansion Space Improvements) relating to life/safety systems, Tenant shall cause its life/safety improvements to be compatible with, and fully programmable in connection with, the Base Building life/safety system, (which is a Pyrotronics XLR-63). The plans, drawings and specifications to be prepared by the Architect and the Engineers hereunder for the Tenant Improvements for the First Increment Office Space (the “First Increment Construction Drawings”), the Plaza Building Space (the “Plaza Building Construction Drawings”), the Second Increment Office Space (the “Second Increment Construction Drawings”), the Third Increment Office Space (the “Third Increment Construction Drawings”), the Fourth Increment Office Space (the “Fourth Increment Construction Drawings”),and the Added Hold Space, if any (the “Hold Space Construction Drawings”), (each, a set of “Increment Construction Drawings”), and collectively, the “Construction Drawings”. All construction Drawings shall be in a drawing format reasonably acceptable to Landlord and subject to the provisions of Section 3.4.1, all Construction Drawings and each component thereof may be submitted at one or more times and at one or more parts as to each such Increment.  Landlord’s review of the Construction Drawings for each Increment of Space as set forth in this Section 3 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 the fact that any Construction Drawings are reviewed by Landlord or its architect, engineers or any other Landlord consultants, and notwithstanding any advice or assistance which may be rendered to Tenant by Landlord or Landlord’s architect, engineers, or other consultants, Landlord shall have no liability whatsoever in connection therewith, shall not be responsible for any omissions or errors contained in the Construction Drawings, and Tenant’s waiver and indemnity set forth in Section 11.1 of the Lease shall specifically apply to any such matter relating to the Construction Drawings. Furthermore, Tenant and Architect shall verify, in the field, the dimensions and conditions as shown on the relevant portions of the Background Plans for the South Tower Base Building Work and the Plaza Building Base Building Work, as applicable, for each Increment of Space, and Tenant and Architect shall be solely responsible for the same (and Landlord shall have no responsibility in connection therewith) to the extent such verification can be made by an architect’s visual inspection of the Premises (without invasive testing or penetration of columns or any of the core walls of the applicable portion of the Premises); provided, however, that if and to the extent the actual conditions behind any column or Building core wall within the Premises (which are not observable or discoverable by Tenant’s Architect without penetrating and providing for invasive testing behind any such Building column or core wall) are inconsistent with the conditions for such area (behind any such column or core wall) as indicated by the Background Plans for such portion of the Premises, Landlord shall promptly reimburse Tenant for any additional direct, out of pocket costs payable by Tenant to independent third party suppliers and/or consultants incurred in good faith by Tenant in connection with the design and/or engineering, permitting and/or construction of the Tenant Improvements for the Increment of Space in question on account of such inconsistency between such actual conditions and the conditions indicated by the Background Plans in question (which additional direct costs would not have been incurred by Tenant had the Background Plans in question not been so materially inconsistent).

3.1.2Expansion Space.   In the event that Tenant leases any Expansion Space, the Architect shall prepare the Expansion Space Construction Drawings (defined in this Section 3.1.2, below) and the Engineers shall prepare all plans and engineering working drawings relating to the structural, mechanical, electrical, plumbing, HVAC, lifesafety, and sprinkler work in the Expansion Space, as applicable, to the extent such work is not part of the South Tower Base Building Work and/or the Plaza Building Base Building Work for such Expansion Space. The plans and drawings to be prepared by the Architect and the Engineers hereunder for the Expansion Space Improvements to be constructed or installed in any such Expansion Space shall be referred to herein as the “Expansion Space Construction Drawings.” All Expansion Space Construction Drawings shall be in a drawing format reasonably acceptable to Landlord. Landlord’s review of any Expansion Space Construction Drawings as set forth in this Section 3 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 the fact that any Expansion Space Construction Drawings are reviewed by Landlord or its architect, engineers or any other Landlord consultants, and notwithstanding any advice or assistance which may be rendered to Tenant by Landlord or Landlord’s architect, engineers, or other consultants, Landlord shall have no liability whatsoever in connection therewith, shall not be responsible for any omissions or errors contained in any Expansion Space Construction Drawings, and Tenant’s waiver and indemnity set forth in Section 11.1 of the Lease shall

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specifically apply to any such matter relating to the Expansion Space Construction Drawings.  Furthermore, Tenant and Architect shall verify, in the field, the dimensions and conditions as shown on the relevant portions of the South Tower Base Building drawings and the Plaza Building Base Building drawings, and Tenant and Architect shall be solely responsible for the same, and Landlord shall have no responsibility in connection therewith to the extent such verification can be made without testing or penetrating columns or the Building core walls components of the applicable Building.

3.1.3Consents.   Each time Landlord is granted the right under this Work Letter to review, consent or approve the Construction Drawings, or any Expansion Space Construction Drawings, or any part or component thereof, or any Tenant Change (defined in Section 3.6, below) thereto (each such approval is referred to herein as a “Consent”), such Consent shall, except as specifically specified otherwise in this Work Letter, not be withheld by Landlord unless (and only to the extent) a Design Problem (defined in this Section 3.13, below) exists.  For purposes of this Work Letter (and the Lease), a “Design Problem” shall be deemed to exist if any portion of any Tenant Improvements (or any Expansion Space Improvements) (or other improvements by Tenants, as specified by this Work Letter): (i) affects the exterior appearance of the Project or of any Building in the Project (except with respect to signage and antennae which shall be subject to separate criteria under the Lease), (ii) affects the exterior appearance of any of the Common Areas or any views from any of the Common Areas (but not including views from (A) the Common Areas through the exterior windows or doors of the Plaza Building Space of improvements which are consistent with the improvements provided in prominent ground floor retail or other tenancies (with comparable windows and glass doors) in first class Comparable Buildings in the downtown Los Angeles Central Business District or (B) the interior of South Tower elevator cabs, or the views from Common Area corridors on multi-tenant South Tower floors into the Premises), (iii) materially and adversely affects the Building Systems or the Building Structure, (iv) requires Landlord to provide additional services (above and beyond those normally provided) to the Premises or to any other portion of the Project, or otherwise creates special maintenance problems at the Project (but, in each case, only to the extent Tenant is unwilling to agree (in a written agreement reasonably satisfactory to Landlord) to pay all incremental Actual Costs incurred by Landlord as a result thereof), (v) only in the context of Base Building Changes (defined in Section 3.7, below) outside of the Premises, could result in a higher frequency of (or more severe) injuries to persons and/or damage to property, (vi) fails to comply with any Laws, (vii) unreasonably interferes with the normal or customary business office operations of any other business office tenant or occupant of the South Tower or North Tower or with the normal or customary operations of any other tenant or occupant of the Plaza Building, (vii) reduces or affects the size or function of the Premises (or any Project installation (such as antennas or generators)) of any other tenant in the Project; (viii) adversely affects the function of any Common Area, or (ix) results in the increase in insurance costs of Landlord and/or other tenants (but, in each case, only to the extent Tenant is unwilling to agree (in a written agreement reasonably satisfactory to Landlord) to pay all incremental costs incurred by Landlord or such other tenants as a result thereof).

3.2Preliminary Space Plans.

3.2.1Increment Preliminary Space Plans.   Tenant and the Architect shall prepare a preliminary space plan for each Increment of Space (and any Added Hold Space) (each an “Increment Preliminary Space Plan”) and shall deliver each such Increment Preliminary Space Plan to Landlord for Landlord’s approval.  Each Increment Preliminary Space Plan shall show the contemplated layout of all Tenant Improvements in the applicable Increment of Space, or Added Hold Space, as the case may be (including, but not limited to, the approximate, contemplated locations of internal and external offices within the applicable Increment of Space (or Added Hold Space), paths of travel within the applicable Increment of Space (or Added Hold Space), and modes of ingress and egress to and from the applicable Increment of Space (or Added Hold Space)).

3.2.2Expansion Space Preliminary Space Plan.   Tenant and the Architect shall prepare a preliminary space plan for each increment of Expansion Space leased by Tenant (each an “Expansion Space Preliminary Space Plan”), and shall deliver each such Expansion Space Preliminary Space Plan to Landlord for Landlord’s approval.  Each such Expansion Space Preliminary Space Plan shall show the contemplated layout of all Expansion Space Improvements in the applicable Expansion Space (including, but not limited to, the approximate, contemplated locations of internal and external offices within such space, paths of travel within such space, and modes of ingress and egress to and from such space).

3.2.3Landlord Approval of Preliminary Space Plans.   Landlord shall, within five (5) business days after Landlord’s receipt of each Preliminary Space Plan (defined in this Section 3.2.3, below): (i) approve such Preliminary Space Plan, (ii) approve such Preliminary Space Plan subject to specified conditions to be complied with to eliminate a Design Problem when a Final Space Plan (defined in Section 3.3.3, below) for such Increment of Space (or other space leased by Tenant under the Lease), is submitted by Tenant to Landlord, or (iii) disapprove such Preliminary Space Plan and return the same to Tenant with a description in commercially reasonable detail of the Design Problem(s) on which such disapproval is based.  If Landlord disapproves any such Preliminary Space Plan, Tenant may resubmit such Preliminary Space Plan to Landlord at any time, and Landlord shall approve, approve with conditions or disapprove of the resubmitted Preliminary Space Plan, based upon the criteria set forth in this Section 3.2, within three (3) business days after Landlord receives such resubmitted Preliminary Space Plan.  Such procedures shall be repeated until the applicable Preliminary Space Plan is approved.  For purposes of this Work Letter, “Preliminary Space Plan” shall mean, and shall refer to each of (and any of) the Increment Preliminary Space Plans, and any Expansion Space Preliminary Space Plans.

3.3Final Space Plan.

3.3.1Increment Final Space Plan.   Tenant and the Architect shall prepare a final space plan for each Increment of Space (and any Added Hold Space) (each an “Increment Final Space Plan”) and shall deliver each such Increment Final Space Plan to Landlord for Landlord’s approval.  Each Increment Final Space

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Plan shall show all corridors, internal and external offices and partitions, paths of travel, and exiting within the applicable Increment of Space (or Added Hold Space).

3.3.2Expansion Space.   Tenant and the Architect shall prepare the final space plan for any Expansion Space (the “Expansion Space Final Space Plan”) leased by Tenant, and shall deliver each such Expansion Space Final Space Plan to Landlord for Landlord’s approval.  Each such Expansion Space Final Space Plan shall show all corridors, internal and external offices and partitions, paths of travel, and exiting within the applicable Expansion Space.

3.3.3Landlord Approval of Final Space Plans.   Landlord shall, within five (5) business days after Landlord’s receipt of each Final Space Plan (defined in this Section 3.3.3, below): (i) approve such Final Space Plan, (ii) approve such Final Space Plan subject to specified conditions to be complied with in order to avoid a Design Problem when the Construction Drawings for such Increment of Space (or other space leased by Tenant under the Lease), are submitted by Tenant to Landlord, or (iii) disapprove such Final Space because a Design Problem exists and return the same to Tenant with a description in commercially reasonable detail of the Design Problem(s) in question.  If Landlord disapproves any such Final Space Plan, Tenant may resubmit such Final Space Plan to Landlord at any time, and Landlord shall approve, approve with conditions to eliminate a Design Problem or disapprove of such resubmitted Final Space Plan (but such conditions or disapproval must specify in commercially reasonable detail why a Design Problem continues to exist) within three (3) business days after Landlord receives such resubmitted Final Space Plan.  Such procedures shall be repeated until the applicable Final Space Plan is approved.  For purposes of this Work Letter, “Final Space Plan” shall mean, and shall refer to each of (and any of) the Increment Final Space Plans or any Expansion Space Final Space Plans.

3.4Completion of Construction Drawings.

3.4.1Submission of Construction Drawings.   Tenant, the Architect and the Engineers shall complete the Increment Construction Drawings for each Increment of Space (or other leased space), in a form which is sufficient to obtain applicable permits for the Tenant Improvements to be constructed therein, and Tenant shall submit such Increment Construction Drawings (or any portion thereof) to Landlord for Landlord’s prior written approval; provided, however, that Tenant shall submit to Landlord only one (1) set of Increment Construction Drawings (or any portion thereof) at any one time, and shall not submit any additional sets of Increment Construction Drawings to Landlord which are duplicative in any material respect of any other Increment Construction Drawings which Landlord is then reviewing hereunder.  Tenant shall supply Landlord with four (4) completed copies of each such set of Construction Drawings, all of which shall be signed by Tenant.

3.4.2Landlord Approval of Construction Drawings.   Landlord shall, within ten (10) business days after Landlord’s receipt of each set of Increment Construction Drawings: (i) approve such Increment Construction Drawings, (ii) approve such Increment Construction Drawings subject to specified conditions to be complied with in order to avoid a Design Problem, or (iii) disapprove such Increment Construction Drawings because a Design Problem Exists and return such Increment Construction Drawings to Tenant with a commercially reasonable description of the Design Problem(s) in question.  If Landlord disapproves any Increment Construction Drawings because a Design Problem exists, Tenant may resubmit such Increment Construction Drawings to Landlord at any time, and Landlord shall approve or disapprove such resubmitted Increment Construction Drawings, based upon the criteria set forth in this Section 3.4, within five (5) business days after Landlord receives such resubmitted Increment Construction Drawings.  Such procedure shall be repeated until the applicable Increment Construction Drawings (for the applicable Increment of Space or for any Added Hold Space or Expansion Space leased by Tenant) are approved.  Following approval by Landlord pursuant to this Section 3.4, each such set of Increment Construction Drawings so approved shall be deemed to be “Approved Increment Construction Drawings.” Each of (and any of) the Approved Increment Construction Drawings may be referred to herein individually or collectively (as the context may require) as the “Approved Construction Drawings.”

3.5Approved Construction Drawings.   Subject to performance of Landlord’s obligations under this Work Letter, Tenant shall cause to be obtained all applicable building and other permits required in connection with the construction or installation of: (a) the Tenant Improvements in each Increment of Space (and in any Added Hold Space) or (b) any Expansion Space Improvements in any Expansion Space leased by Tenant (collectively “Permits”).  Tenant hereby acknowledges and agrees that, subject to Landlord’s obligations with respect to Landlord’s South Tower Base Building Work and Landlord’s Plaza Building Base Building Work, which are to be completed by Landlord in accordance with the terms of Article 1, above: (i) neither Landlord nor Landlord’s consultants shall be responsible for obtaining any Permits, approvals or certificates of occupancy for any Increment of Space (or for any Added Hold Space, Expansion Space leased by Tenant and/or for the Premises generally) and (ii) Tenant shall be responsible for obtaining any and all required Permits, approvals and certificates of occupancy for each and every Increment of Space (and for each and every Added Hold Space, Expansion Space leased by Tenant and/or for the Premises generally); provided, however, that Landlord shall reasonably cooperate with Tenant (at no cost to Landlord) in the performance of ministerial acts that are reasonably necessary to enable Tenant to obtain any such Permits, approvals or certificates of occupancy.  No material changes, modifications or alterations in or to any set of Approved Construction Drawings shall be made by Tenant without the prior written consent of Landlord, which consent shall not be withheld, except to the extent necessary to eliminate or avoid a Design Problem, as provided in Section 3.6.

3.6Change Orders.   In the event Tenant desires to materially change any set of Approved Construction Drawings (or the Tenant Improvements constructed, or to be constructed thereunder), Tenant shall deliver a notice (a “Drawing Change Notice”) of such proposed change to Landlord, which Drawing Change Notice shall set forth in detail all changes (the “Tenant Changes”) Tenant desires to make to the applicable set of Approved Construction Drawings.  Landlord shall, within five (5) business days of Landlord’s receipt of any

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Drawing Change Notice either: (i) approve the Tenant Changes in question, or (ii) disapprove such Tenant Change or Changes and deliver a notice to Tenant specifying in reasonably sufficient detail the reasons for Landlord’s disapproval; provided, however, that Landlord may only disapprove of the Tenant Change if (and to the extent) the Tenant Change causes or results in a Design Problem.

3.7Base Building Changes.   Subject to the provisions of this Work Letter, if Tenant requests work to be done in any Increment of Space (or in any other space in the Project, including, but not limited to in any other space in the Project leased by Tenant) that necessitates revisions, alterations or changes in the design or construction of the South Tower Base Building Work (including, without limitation, any portion of the exterior of the South Tower), the Plaza Building Base Building Work (including, without limitation, any portion of the exterior of the Plaza Building), the Building Structure, the Common Areas or the Building Systems, any such changes (collectively, “Base Building Changes”) shall be subject to the prior written approval of Landlord, which approval shall, subject to the provisions of Section 3.1.3, not be withheld unless a Design Problem shall exist with respect to the proposed Base Building Change in question; provided, however, that if a Design Problem shall exist with respect to a Base Building Change proposed by Tenant, Landlord may withhold its consent thereto in its sole and absolute discretion; provided, further, however, that notwithstanding the foregoing, if a Design Problem exists because: (i) a Base Building Change could result in a higher level of maintenance by Landlord of any portion of the Premises or of the Common Areas, then Landlord may condition its consent to such Base Building Change Upon Tenant’s agreement in writing (in a form and substance reasonably acceptable to Landlord) to absorb, at Tenant’s cost, the entirety of such increased, incremental costs of maintenance and (ii) any such Base Building Change could result in a higher frequency of (or more severe) injuries to persons and/or damage to property, Landlord shall advise Tenant of such problem and Tenant shall, where such requested Base Building Change could result in a higher frequency of (or more severe) injuries to (a) persons, withdraw such request or (b) property, redesign such requested Base Building Change so as to eliminate the greater likelihood of (or likelihood of greater severity of) damage to property.  Notwithstanding any provision of this Work Letter or the Lease to the contrary, Landlord may, in the exercise of its sole and absolute discretion, withhold its consent to any Base Building Change proposed by Tenant if such Base Building Change may interfere with the exercise or enjoyment of any access or other express or implied rights of other tenants in the Project or adversely impact the quality of the Project.  In all events, except as provided herein to the contrary, Tenant shall be responsible for: (i) all costs resulting from such design revisions or construction changes, including architectural and engineering charges, as such costs become due and payable, (ii) all delays resulting from such design revisions or construction changes shall constitute “Tenant Delays” under Section 5.5 and no such delays shall be deemed a Commencement Date Delay (or extend the Expansion Space Construction Period or the Available Space Construction Period), (iii) obtaining any special permits and/or paying any fees attributed thereto and (iv) all costs incurred by Landlord in restoring the Base Building Change (and the area of the Project affected thereby) to its original condition upon the expiration or sooner termination of the Term of the Lease.  Landlord understands that Tenant will need to install various supplemental HVAC systems which may require Base Building Changes and Landlord agrees that, subject to all of the terms of the Lease and of this Work Letter (including, but not limited to, this Section 3.7), Tenant may install such supplemental HVAC systems.

SECTION 4

CONSTRUCTION OF THE TENANT IMPROVEMENT

4.1Tenant’s Selection of Contractors.

4.1.1The Contractors.   Tenant shall retain a licensed general contractor (i) with respect to the construction of the First Increment Tenant Improvements (the “First Increment Contractor”); (ii) with respect to the construction of the Plaza Building Tenant Improvements (the “Plaza Building Contractor”); (iii) with respect to the construction of the Second Increment Tenant Improvements, collectively, (the “Second Increment Contractor”); (iv) with respect to the construction of the Third Increment Tenant Improvements, (the “Third Increment Contractor”); (v) with respect to construction of the Fourth Increment Tenant Improvements (the “Fourth Increment Contractor”), (vi) with respect to the construction of the Hold Space Tenant improvements, if any, (the “Hold Space Contractor”), and (vii) with respect to the construction of the Expansion Space Improvements, if any, (each, an “Expansion Space Contractor”) (each a “Contractor,” and collectively, the “Contractors”).  Each of the Contractors shall be approved by Landlord, which approval shall not be unreasonably withheld and shall be granted or withheld within five (5) business days of Landlord’s receipt of Tenant’s written request for such approval; provided, however, that each of general contractors listed in Schedule 4, attached hereto, are hereby approved by Landlord.

4.1.2.Tenant’s Agents.   Except as specified to the contrary in this Work Letter (including, but not limited to in Section 3.1.1, above, with respect to the required installation of certain aspects of the lifesafety system in the Premises), all other contractors, laborers, materialmen, and suppliers (in addition to the Contractors) used by Tenant (or any of its Contractors) in constructing each Tenant Improvements Increment (or in constructing any Expansion Space Improvements) must be approved in writing by Landlord, which approval shall not be unreasonably withheld or delayed and shall be granted or withheld within five (5) business days of Landlord’s receipt of Tenant’s written request for such approval.  Tenant hereby waives all claims against Landlord, and Landlord shall have no responsibility or liability to Tenant, on account of any nonperformance or any misconduct of any Contractor (or any subcontractor thereof) for any reason.  The subcontractors, laborers, materialmen or suppliers used by Tenant in connection with the construction of each Tenant Improvements Increment (and with the construction of the Hold Space Tenant Improvements (if any) or Expansion Space Improvements (if any)), as well as the Engineers, project manager, broker, Architect, laborers, materialmen, and suppliers, Contractors and all of Tenant’s employees engaged in the review of the design and construction of each Tenant Improvements Increment (and of all Hold Space Tenant Improvements (if any) or Expansion Space Improvements (if any)), shall hereafter be known collectively as “Tenant’s Agents.” The Contractors and the Contractors’ subcontractors (collectively

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“Tenant’s Contractors”) and all of their respective workers shall conduct their activities in and around the Premises, Buildings and Project in a harmonious relationship with all other subcontractors, laborers, materialmen and suppliers performing work in, on or about the Premises, Buildings and Project.

4.2Construction of Tenant Improvements by Tenant’s Agents.

4.2.1Construction Contract.

(a)Initial Premises.   Tenant shall enter into a construction contract and general conditions with respect to each of: (i) the First Increment Contractor (the “First Increment Contract”); (ii) the Plaza Building Contractor (the “Plaza Building Contract”); (iii) the Second Increment Contractor (the “Second Increment Contract”); and (iv) the Third Increment Contractor (the “Third Increment Contract”), (v) the Fourth Increment Contractor (the “Fourth Increment Contract”), and (vi) if applicable, the Hold Space Contractor (the “Hold Space Contract”) (each a “Contract” collectively, the “Contracts”). Promptly following Tenant’s execution of each such Contract, Tenant shall submit such Contract to Landlord for its records.

(b)Expansion Space.   If and to the extent that  any Expansion Space Improvement Allowance is provided for any Expansion Space Leased by Tenant pursuant to Section 1.7 of the Lease, Tenant shall enter into a construction contract and general conditions with an Expansion Space Contractor for any such Expansion Space leased by Tenant (each an “Expansion Space Contract”). Promptly following Tenant’s execution of any such Expansion Space Contract, Tenant shall submit such Expansion Space Contract to Landlord for its records.

4.2.2Tenant’s Agents.

(a)Landlord’s General Conditions for Tenant’s Agents and Tenant Improvement Work. Tenant’s and Tenant’s Agents’ construction of each of the Tenant Improvements Increments (or of any Expansion Space Improvements) (“Tenant’s Work”) shall comply with all of the following conditions: (i) each of the Tenant Improvements Increments (or of any Expansion Space Improvements) shall be constructed in conformance with the applicable Approved Increment Construction Drawings (or with the applicable Approved Expansion Space Construction Drawings); (ii) prior to commencement of construction of any Tenant Improvements Increment (or of any Expansion Space Improvement, as applicable), Tenant and Tenant’s Agents shall use commercially reasonable efforts not to interfere with, obstruct, or delay, the work of Landlord’s South Tower and/or Plaza Building Base Building contractor and subcontractors; (iii) Tenant’s Contractors shall submit their schedules for all of their work relating to each Tenant Improvements Increment (or to any Expansion Space Improvements) to Landlord, and Landlord shall, within five (5) business days of Landlord’s receipt thereof, inform Tenant and Tenant’s Contractors of any changes (“Schedule Revisions”) which are reasonably necessary thereto (a “Revised Schedule”), in order to avoid (consistent with the Construction Rules (defined in this Section 4.2.2(a), below)) disruption of existing tenants and/or disruption of work elsewhere in the Project being performed by Landlord or any contractor thereof, and Tenant’s Contractors shall adhere to such Revised Schedule (provided, however, that if and to the extent the cumulative delay suffered by Tenant in achieving Substantial Completion of the Tenant Improvements for a particular Increment of Space as a result of Schedule Revisions required by Landlord under this Section 4.2.2(a) with respect to a particular Increment of Space exceeds a total of three (3) full days of such delay, such cumulative delay (in excess of three (3) full days per Increment of Space) shall, subject to the provisions of Section 5.13, constitute a Landlord Delay (a “Schedule Revision LL Delay”)); and (iv) Tenant shall abide by the Project Construction Rules attached hereto as Schedule 5 (the “Construction Rules”).

(b)Indemnity. Tenant’s indemnity of Landlord and Landlord’s Indemnity of Tenant, both as set forth in Section 11.1 of this Lease shall also apply with respect to matters arising in connection with the construction of each of the Tenant Improvements Increments (and all of the Tenant Improvements) and the construction of any Expansion Space Improvements.

(c)Insurance Requirements.

(i)General Coverages. All of Tenant’s Agents who are one of Tenant’s Contractors shall carry worker’s compensation insurance covering all of their respective employees to the extent required by applicable Laws, and shall also carry public liability insurance, including property damage, all with limits, in form and with companies as are required to be carried by Tenant as set forth in Article 11 of this Lease.  The policies therefor shall insure Landlord and Tenant, as their interests may appear, as well as each Contractors and all of its subcontractors.

(ii)Special Coverages. Subject (if and to the extent applicable) to Tenant’s rights to provide for self-insurance under Section 11.2.4 of this Lease, each Contractor (or Tenant) shall carry “Builder’s All Risk” insurance, in an amount reasonably specified by Landlord, covering the construction of the applicable Tenant Improvements Increment (or Expansion Space Improvements), it being understood and agreed that each Tenant Improvements Increment (and all Expansion Space Improvements) shall be insured (or if and to the extent applicable, self-insured to the extent permitted by Section 11.2.4 of the Lease) by Tenant Pursuant to Article 11 of this Lease immediately upon completion thereof.

(iii)General Terms. Certificates for all insurance carried by each Contractor and/or by Tenant pursuant to this Section 4.2.2(c) shall be delivered to Landlord before the commencement of construction of the applicable Tenant Improvements Increment for each Increment of Space (or of any Expansion Space Improvements) and before such Contractor’s equipment is moved onto or into the project. All such policies of insurance must contain a provision that the company writing said policy will provide Landlord

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and Tenant with thirty (30) days prior notice of any cancellation, modification or lapse of the policy. In the event that any Tenant Improvements Increment (or any Expansion Space Improvements) is damaged by any cause during the course of the construction thereof, Tenant shall immediately repair the same at Tenant’s sole cost and expense. Each of Tenant’s Contractors shall maintain all of the foregoing insurance coverage in full force and effect until the Substantial Completion of the applicable Tenant Improvements Increment (or of any Expansion Space Improvements), except for any “Products” and “Completed Operation Coverage” insurance (which is to be carried by a Contractor only) required by Landlord, which coverage is to be maintained for the term of the policy period following Substantial Completion of the applicable Tenant Improvements Increment (or Expansion Space Improvements). The Builder’s All Risk policy maintained by each Contractor (or by Tenant) shall preclude subrogation claims by the insurer against anyone insured thereunder, and shall additionally provide that such policy is primary insurance with respect to Landlord and that any other insurance maintained by Landlord is excess and noncontributing with the insurance required hereunder.

4.2.3Governmental Compliance. Subject to the performance of Landlord’s obligations under this Work Letter (including Landlord’s obligations with respect to Base Building Work), each of the Tenant Improvements Increments (and all of the Tenant Improvements) and any all Expansion Space Improvements shall comply in all respects with all of the following: (i) all applicable Laws, including , but not limited to, building codes and other state, federal, city or quasi-governmental laws, codes, ordinances and regulations, as each may apply according to the rulings of the controlling public official, agent or other person; and (ii) all applicable standards of the American Insurance Association (formerly, the National Board of Fire Underwriters) and the National Electrical Code.

4.2.4Inspection by Landlord. Landlord shall have the right, upon reasonable notice to Tenant, at reasonable times, to inspect each portion of any Tenant Improvements Increment (and any Expansion Space Improvements) being constructed for or on behalf of Tenant at a particular time; provided, however, that Landlord’s failure to inspect any Tenant Improvements Increment (or any Expansion Space  Improvements) shall in no event constitute a waiver of any of Landlord’s rights hereunder nor shall Landlord’s inspection of any Tenant Improvements Increment (or of any Expansion Space Improvements) constitute Landlord’s approval of the same.

4.2.5Meetings.

(a)Initial Premises. Commencing upon the execution of this Lease, Tenant shall hold regular meetings at a reasonable time, with the Architect and the Contractor regarding the progress of the preparation of each of the Increment Construction Drawings and the construction of each of the Tenant Improvements Increments, which meetings shall be held at the Project (provided, however, that prior to (but not after) the date on which construction of the Tenant Improvements commences, Tenant may, by delivering written notice to Landlord no less than five (5) days prior to the date of any such meeting, insist that such meeting be held in Tenant’s downtown Los Angeles office, in which case such meeting will be held in Tenant’s downtown Los Angeles office), and Landlord and/or its agents shall receive prior notice of, and shall have the right to attend, all such meetings.

(b)Expansion space. Commencing upon the delivery of Tenant of any Expansion Exercise Notice with respect to any Expansion Space, Tenant shall hold regular meetings at a reasonable time, with the Architect and the Contractor regarding the progress of the preparation of the Expansion Space Construction Drawings, as the case may be, and the construction of any Expansion Space Improvements, which meetings shall be  held at the Project (provided, however, that prior to (but not after) the date on which construction of the Tenant Improvements commences, Tenant may, by delivering written notice to Landlord no less than five (5) days prior to the date of any such meeting, insist that such meeting be held in Tenant’s downtown Los Angeles office, in which case such meeting will be held in Tenant’s downtown Los Angeles office), and Landlord and/or its agents shall receive prior notice of, and shall have the right to attend, all such meetings.

4.3Completion; Copy of Updated Approved Construction Drawings. Within ten (10) days after the completion of construction of each Tenant Improvements Increment (or of any Expansion Space Improvements), Tenant shall prepare, or cause to be prepared, a Notice of Completion with respect to such Tenant Improvements Increment (or Expansion Space Improvements), which, if factually correct, Landlord shall execute, and Tenant shall thereafter cause such 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 shall furnish a copy thereof to Landlord upon such recordation. If Tenant fails to do so, and if such failure continues for five (5) business days after receipt of notice from Landlord of such failure, Landlord may, at Tenant’s sole cost and expense, execute and file the same on behalf of Tenant as Tenant’s agent for such purpose. At the completion of construction of each Tenant Improvements Increment (or of any Expansion Space Improvements), Tenant: (i) shall promptly deliver to Landlord a copy of all warranties, and guaranties relating to the Tenant Improvements (or the applicable Expansion Space Improvements); and (ii) shall cause the applicable Contractor: (a) to update the applicable Approved Increment Construction Drawings (or the Approved Expansion Space Construction Drawings) as to the mechanical and structural drawing portions thereof, and to provide field-grade mark-ups of the remaining portion of the applicable Approved Increment Construction Drawings (the “Updated Approved Increment Construction Drawings”) (or of the applicable Approved Expansion Space Construction Drawings (the “Updated Approved Expansion Space Construction Drawings”)) so as to reflect on such Updated Approved Increment Construction Drawings (or Updated Approved Expansion Space Construction Drawings) all changes made to the applicable Approved Increment Construction Drawings (or Approved Expansion Space Construction Drawings) during the course of construction of the applicable Tenant Improvements Increment (or Expansion Space Improvements), and (b) within thirty (30) days following issuance of a certificate of occupancy for the applicable Increment of Space (or the applicable Expansion Space), to deliver to Landlord two (2) sets of reproducible copies (and one (1) complete set of Autocad .dwg (release 13 or higher) files) of such Updated

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Approved Increment Construction Drawings (or Updated Approved Expansion Space Construction Drawings), together with any Permits, approvals, inspection reports, certificates of occupancy or similar documents issued by governmental agencies in connection with the construction of the Tenant Improvements (or the applicable Expansion Space Improvements).

SECTION 5

DELAY OF COMMENCEMENT DATE

5.1Commencement Date Delays.

5.1.1Commencement Date; Delays. As specified in Section 2.2 of the Lease, the Term of the Lease shall commence on the First Increment Commencement Date.  Each of the First Increment Commencement Date, the Second Increment Commencement Date, the Plaza Building Commencement Date, the Third Increment Commencement Date and the Fourth Increment Commencement Date shall occur as provided in Item 3.4(i), Item 3.4(ii), Item 3.4(iii), Item 3.4(iv) and Item 3.4(v) of the Basic Lease Provisions, respectively, and each Expansion Space Commencement Date shall occur as provided in Section 1.7.9 of the Lease respectively; provided, however, that for purpose of determining each such Commencement Date, the Construction Period applicable to each such Increment of Space (or Expansion Space) shall be extended on a day-for-day basis for each day of delay in the design or Substantial Completion of the applicable Tenant Improvements Increment (or of the applicable Expansion Space Improvements) or Tenant’s move into the applicable Increment of Space (or Expansion Space) that is caused by a Commencement Date Delay (defined  in this Section 5.1.1, below). As used herein,  the term “Commencement Date Delay” shall mean only a Force Majeure Delay (defined in Section 5.1.2, below) or a Landlord Delay (defined in Section 5.1.3, below).

5.1.2Force Majeure Delay.

(a)As used herein, subject to the provisions of Section 3.7, the term “Force Majeure Delay” shall mean only an actual delay resulting from; strikes; fire; wind; terrorist acts; damage or destruction to the Project; explosion; casualty; flood; hurricane; tornado; the elements; acts of God or the public enemy; sabotage; war; invasion; insurrection; rebellion; civil unrest; riots; or earthquakes and delays in obtaining permits or other governmental approvals to the extent caused by and industry-wide, recognized delay in the issuance or processing of permits or other approvals by the applicable governmental agencies generally (for example, where due to budgetary problems, Los Angeles Department of Building and Safety reduces the hours of its staff by 50% without any compensating increase in available staffing), and not relating to the specifics of any construction Drawings, or any act or omission of Tenant (or any Tenant’s Agent) in attempting to obtain such permits or approvals.

(b)In the case where the term “Force Majeure Delay” is used in the Lease or in this Work Letter in the context of any delay suffered or incurred by Landlord in the design, permitting, engineering, commencement, prosecution and/or substantial completion of any Base Building Work under this Lease or under this Work Letter, “Force Majeure Delay” shall, in addition to the meaning set forth in Section 5.1.2 (a), also mean any actual delay resulting from (i) any holdover in any space in the Project by any tenant (provided that to the extent Landlord does not substantially perform its obligations under Section 2.3.1 of the Lease with respect to the Commencement and prosecution of unlawful detainer proceedings with respect to such holdover tenant and such failure of performance extends the duration of such holdover, the same shall not constitute a Force Majeure Delay with respect to that portion of the holdover period which would not have occurred had Landlord substantially performed its obligations under Section 2.3.1 with respect thereto), (ii) any existing conditions in any space in the Project which becomes part of the Premises which is not actually known by Landlord’s executive management as of the date hereof, or (iii) the inability of Landlord (or its contractor) to procure services and/or materials within normal periods, other than due to the lack of credit of the Landlord (or any failure to pay by Landlord).

5.1.3Landlord Delay. As used in this Work Letter, subject to the provisions of Section 3.7, “Landlord Delay” shall mean any actual delay that results directly from: (i) the failure of Landlord to timely approve or disapprove any Preliminary Space Plan (or Expansion Space Preliminary Space Plan), Final Space Plan (or Expansion Space Final Space Plan), Increment Construction Drawings (or Expansion Space Construction Drawings) or Change Orders or other matters which Landlord is required to approve under this Work Letter; (ii) the failure of Landlord to have removed and remediated any Pre-Delivery Hazardous Materials or Pre-Commencement Hazardous Materials (each term is define in Section 6.5.1, below) located in the Premises (or in any Expansion Space) which are required to be removed or remediated by Landlord under the provisions of Section 6.5.1 prior to the applicable Delivery Date; (iv) the existence of ACM in any particular Increment of Space, if and to the extent such delay constitutes a “Landlord Delay” under the provisions of Section 6.5.2; (v) the failure of Landlord to timely perform Base Building Work in accordance with the timing provisions of this Work Letter (and Schedule 1-B and Schedule 1-D, attached hereto) applicable thereto; (vi) any actual delays in Substantial Completion of the Tenant Improvements for any Increment of Space caused by any material errors and/or omissions in the Background Plans for such Increment of Space with respect to areas inside columns or behind core walls which are verifiable only by invasive testing or penetration; provided, however, that no Landlord Delay shall be deemed to have occurred to the extent that such errors and omissions in such Background Plans could reasonably have been discovered by Tenant or Tenant’s Architect pursuant to such parties’ verification of the applicable portion of the Background Plans pursuant to Section 3.1.1, above (the delays which constitute Landlord Delays under this clause (vi) are referred to herein as “Non-Verifiable Background Plans Conditions Delays”), (vii) the performance by Landlord of any Base Building Work within any Increment of Space following the Delivery Date (and before the Commencement Date) for such Increment of Space, which performance actually interferes with and causes an actual delay (despite the good faith efforts of Tenant and its Contractors to cooperate (which good faith cooperation shall not involve incurring any

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additional cost) with such performance) in the completion of any critical path task (as indicated on the applicable construction schedule prepared by Tenant’s Contractor with respect to such Increment of Space), but only to the extent that any such delay in the completion of any critical path task (or tasks) does in fact cause the Substantial Completion of the Tenant Improvements for such Increment of Space to be delayed beyond the scheduled Commencement Date for such Increment of Space (the delays which constitute Landlord Delays under this clause (vii) are referred to herein as “Base Building Interference Delays”), (viii) the failure of any Increment of Space to be in compliance with Laws to the extent required under Section 2 of Schedule 1-B, attached hereto, or Section 2 of Schedule 1-D attached hereto, as applicable, or (ix) and Schedule Revision LL Delay, if and to the extent provided in Section 4.2.2(a).

5.1.4Reimbursement of Additional Tenant Design and Construction Costs Caused by Landlord Delays.

Landlord shall reimburse Tenant for any additional, incremental, out-of-pocket design and/or construction costs actually incurred by Tenant (through payment to independent, third-party contractors, suppliers, consultants or service providers) with respect to the design and construction of the Tenant Improvements for each Increment of Space as the direct result of the following forms of Landlord Delay (and if and to the extent such additional incremental out-of-pocket design and/or construction costs would not have been so incurred had there been no such Landlord Delays):

(a)The failure of the Base Building Work for such Increment of Space to comply with the requirements of Section 2 of Schedule 1-B or Schedule 1-D, as applicable;

(b)Non-Verifiable Background Plans Condition Delays;

(c)Any amounts reimbursable under Section 6.5.1 (but only to the extent reimbursable thereunder) on account of any Pre-delivery Hazardous Materials or Pre-Commencement Hazardous Materials discovered in such Increment of Space (provided, however, that no amounts reimbursed under this Section 5.1.4(c) shall also be reimbursable under Section 6.5.1 (and vice versa));

(d)Any amounts reimbursable under Section 6.5.2 (but only to the extent reimbursable thereunder) on account of any ACM discovered in such Increment of Space following the Delivery Date therefor (but prior to the Commencement Date therefor) which is required to be abated by Landlord hereunder) (provided, however, that no amounts reimbursed under this Section 5.1.4(d) shall also be reimbursable under Section 6.5.2 (and vice versa));

(e)Base Building Interference Delays with respect to such Increment of Space; and

(f)Schedule Revision LL Delays (provided, however that any such reimbursement of costs under this Section 5.1.4(f) with respect to a particular Increment of Space shall be limited to any actual increase in “general conditions” resulting therefrom paid to the Contractor for such Increment of Space by Tenant on account of such Schedule Revision LL Delays.)

5.2Determination of Commencement Date Delay.  If Tenant contends that a Commencement Date Delay has occurred, Tenant shall notify Landlord in writing (the “Delay Notice”), and such Delay Notice shall specifically identify the event or events which constitutes such Commencement Date Delay.  If such actions, inaction or circumstance described in the Delay Notice are not cured by Landlord on or before the end of the next business day after the day on which Landlord actually receives the Delay Notice, and if such action, inaction or circumstance otherwise qualifies as a Commencement Date Delay, then a Commencement Date Delay shall be deemed to have occurred commencing as of the date of Landlord’s receipt of the Delay Notice and ending as of the date such delay ends; provided, however, that, notwithstanding the above, with respect to the construction of any particular Increment of Space, at any time after which Tenant shall have correctly delivered ten (10) Delay Notices with respect to such Tenant Improvements Increment prior to the Substantial Completion of such Tenant

Improvements Increment, and if such actions, inactions or circumstances described in the Delay Notice are not cured by Landlord within the same business day of Landlord’s receipt of the Delay Notice in question, then a commencement Date Delay shall be deemed to have occurred commencing as of the date of Landlord’s receipt of the Delay Notice and ending as of the date such delay ends.

5.3Definition of Substantial Completion. For purposes of this Work Letter, and with respect to any Tenant Improvements Increment (or any Expansion Space Improvements) (or Base Building Work or Minimum Base Building Work), “Substantial Completion” shall mean substantial completion of construction of such Tenant Improvements Increment (or Expansion Space Improvements) (or Base Building Work or Minimum Base Building Work) within the applicable Increment of Space (or Expansion Space), pursuant to the applicable set of Approved Construction Drawings (or Background Plans, as applicable) therefor, sufficient to allow occupany of such Increment of Space (or Expansion Space) by Tenant, as well as issuance of a certificate of occupany or a temporary certificate of occupany (or the equivalent of either) for such Increment of Space (or Expansion Space) so as to allow legal occupany of such Increment of Space (or Expansion Space) by Tenant (provided that such occupancy and certificate of occupancy requirements shall not apply in the case of Base Building Work or Minimum Base Building Work).  Substantial Completion shall not include and shall not require the completion of any Punch List Items (defined in this Section 5.3, below), but such Punch List Items shall nevertheless be completed as soon as reasonably possible.  For purposes of this Work Letter, “Punch List Items” shall mean (a) with respect to Tenant Improvements, all items of construction which entail one or more details of construction, decoration, mechanical adjustment or installation that (in the case of Tenant Improvements or Expansion Space Improvements only) do not materially and adversely affect the use and occupancy of any portion of an Increment of Space for the normal conduct

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of Tenant’s business, or (b) with respect to Base Building Work to be provided by Landlord pursuant to Schedule 1-B or Schedule 1-D, all items of construction required to correct deficiencies in the Base Building Work noted by the Landlord in its customary “punch list” review of the Base Building Work (as the same shall occur from time to time) or communicated to Landlord by Tenant during the parties, Punch List Inspection (defined in this Section 5.3, below) for the Increment of Space in question or thereafter discovered by Tenant communicated to Landlord by Tenant during the construction of the Tenant Improvements for the Increment of Space in question.  Prior to, or reasonably promptly following, the Delivery Date for each Increment of Space, Landlord, Tenant and Tenant’s Architect shall jointly conduct a customary visual punch list inspection of the Base Building Work for such Increment of Space (the “Punch List Inspection”).  Landlord shall complete all Punch List Items indicated by the Punch List Inspection for a particular Increment of Space within sixty (60) days of the Delivery Date for such Increment of Space.

5.4Landlord’s Right to Remedy Commencement Date Delays.  Notwithstanding anything contained in this Section 5 to the contrary, Landlord and Tenant agree that, to the extent that Landlord is able (through the payment of overtime wages to Tenant’s Agents, the hiring of additional contractors, subcontractors or other work force, or other incentives) to eliminate, and does in fact eliminate (and Tenant will cooperate with Landlord to achieve such result) any actual delay in the Substantial Completion of any Tenant Improvements Increment (or any Expansion Space Improvements), which delay would otherwise be deemed to be a Commencement Date Delay pursuant to the terms of this Section 5, a Commencement Date Delay shall not be deemed to have occurred.

5.5Tenant Delay.  For purposes of the Lease and this Work Letter, “Tenant Delay” shall mean any actual delay incurred by Landlord as a result of (i) a Tenant request for a Base Building Change or for substitution of a Tenant Substituted Base Building Item for a Base Building Substitution Item, (ii) breach of this Work Letter by Tenant, or (iii) any other event specified to be a Tenant Delay in this Work Letter (including, but not limited to in Section 6.4, below).

SECTION 6

MISCELLANEOUS

6.1Tenant’s Representative.  Tenant has designated *                                         as its sole representative with respect to the matters set forth in this Work Letter, who, until further notice to Landlord, shall have full authority and responsibility to act on behalf of Tenant as required in this Work Letter.

6.2Landlord’s Representative.  Landlord has designated *                                         is its sole representative with respect to the matters set forth in this Work Letter, who, until further notice to Tenant, shall have full authority and responsibility to act on behalf of Landlord as required in this Work Letter.

6.3Time of the Essence in This Work Letter.  Unless otherwise indicated, all references in this Work Letter to a “number of days” shall mean and refer to calendar days.  If any item requiring approval is timely disapproved by Landlord, the procedure for preparation of the document and approval there of shall be repeated until the document is approved by Landlord.

6.4Tenant Work Letter Default.  Notwithstanding anything to the contrary contained in this Lease, (a) if at any time on or before the Substantial Completion of any Tenant Improvements Increment (or any Expansion Space Improvements), an Event of Default shall have occurred under the Lease, then: (i) in addition to all other rights and remedies granted to Landlord pursuant to the Lease, Landlord shall have the right to cause the applicable Contractor to cease construction of all Tenant Improvements then under construction (in which case, such work stoppage shall not be deemed a Commencement Date Delay), and (ii) all other obligations of Landlord under this Work Letter shall be suspended until such time as such Event of Default is cured pursuant to the provisions of the Lease (and/or any amendments to the Lease in connection with any election by Tenant to lease any Expansion Space), in which case, Tenant shall be responsible for any delay (as a Tenant Delay) in the Substantial Completion of the applicable Tenant Improvements Increment that is caused by such inaction by Landlord, and (b) if at any time prior to Substantial Completion of the Tenant Improvements for a particular Increment of Space, Landlord shall fail to disburse to Tenant under Section 2.3.1 or Section 2.3.2 an amount or amounts which are properly disbursable to Tenant under Section 2.3 from the Tenant Improvement Allowance for such Increment of Space aggregating to              ), and such failure to disburse shall continue for sixty (60) days or longer following delivery by Tenant to Landlord of written notice of such failure, Tenant shall have the right to cease construction of the Tenant Improvements for such Increment of Space.  Notwithstanding any other provisions of this Lease, if an Event of Default is cured, forgiven or waived, Landlord’s suspended obligations under this Work Letter shall be fully reinstated and resumed, effective immediately.

6.5Presence of Hazardous Materials.

6.5.1Hazardous Materials Other than ACM.

Landlord shall:   (i) cause all Pre-Delivery Hazardous Materials located within a particular Increment of Space to be remediated in accordance with all Laws then in effect applicable to such remediation prior to delivery of possession of such Increment of Space to Tenant for commencement of Tenant Improvements construction, and (ii) cause all Pre-Commencement Hazardous Materials located within a particular increment of Space to be promptly remediated in accordance with all Laws then in effect applicable to such remediation; provided, however, that notwithstanding any provision of the Lease or this Work Letter to the contrary, (i) the obligations of Landlord under this Section 6.5.1 shall not apply to any Hazardous Materials: (x) which were brought into (or otherwise introduced into) such Increment of Space by Tenant, any Contractor of Tenant, any Tenant’s Agent or any Tenant Party or (y) the need for remediation of which under applicable Laws was caused by the acts or

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omissions of Tenant, any Contractor of Tenant, any Tenant’s Agent or any Tenant Party following notice by Landlord to Tenant of the existence and location of such Hazardous Materials (under circumstances where the Hazardous Materials in question were of a nature and condition which prior to such acts or omissions did not require remediation under applicable Laws) (collectively, “Tenant Caused HazMat Problems”).  Landlord agrees:  (i) to bear any increased, out-of-pocket Actual Costs actually incurred by Tenant (through payments to independent third-party contractors, suppliers, consultants or service providers) in the design or construction of any Tenant Improvements Increment to the extent such increased Actual Costs result from (and would not have been otherwise incurred by Tenant without);  (A) the presence of any Pre-Delivery Hazardous Materials in a particular Increment of Space as of the date on which Tenant commences construction of such Tenant Improvements Increment or (B) the presence of any Pre-Commencement Hazardous Materials ( or the existence of which was the subject of a written notice delivered by Tenant to Landlord) during the construction of Tenant Improvements (and prior to the Increment Commencement Date for the Increment of Space in question) (with Tenant agreeing that it shall notify Landlord of the existence of such Hazardous Materials with reasonable promptness  following its discovery of the same), but only if and to the extent such incurred out-of-pocket costs (under clause (A) or (B)) shall not relate in any manner to any Tenant Caused HazMat Problems in, on, at, under or upon any part of the Project and (ii) to reimburse Tenant for any additional, out-of-pocket Actual Costs actually incurred by Tenant in the construction of any Tenant Improvements Increment that result directly from the presence of any Pre-Commencement Hazardous Materials in such Increment of Space during the period following the date on which Tenant commences construction of such Tenant Improvements Increment, but only if and to the extent such Actual Costs shall not relate in any manner to any Tenant Caused HazMat Problems in, on, at, under or upon any part of the Project.  Any reimbursement of Tenant by Landlord under this Section 6.5.1 shall be payable by Landlord to Tenant within thirty (30) days of Landlord’s receipt from Tenant of: (A) Tenant’s written itemization and reasonable description of the Actual Costs involved and the basis for Tenant’s right to reimbursement under this Section 6.5.1 and (B) reasonable evidence of such Actual Costs.  For purposes of this Lease, “Pre-Delivery Hazardous Materials” means any Hazardous Materials (other than ACM) which: (1) are discovered to exist within a particular Increment of Space by Landlord (or written notice of which is received by Landlord from Tenant) prior to the Delivery Date for such Increment of space and (2) is known to Landlord to require remediation under applicable Laws as of the Delivery Date for such Increment of Space.  For Purposes of this Lease, “Pre-Commencement Hazardous Materials” means any Hazardous Materials (other than ACM) which: (1) is discovered to exist within a particular Increment of Space by Landlord (or written notice of which is received by Landlord from Tenant) following the Delivery Date for a particular Increment of Space and (2) is known to Landlord to require remediation under applicable Laws as of a date prior to the Commencement Date for such Increment of Space.

6.5.2ACM.

(a)Landlord shall cause to be abated and/or remediated in accordance with Landlord’s Asbestos Abatement Plan and applicable Laws, all ACM (other than any Permissible Residual ACM (defined in Section 1(b)(i) of Schedule 1-B) or any Permitted ACM (defined in this Section 6.5.2, below)) discovered by Landlord (or written notice of which is received by Landlord from Tenant) in a particular Increment of Space following the Delivery Date for such Increment of Space; provided, however, that Landlord shall have no obligation whatsoever under this Section 6.5.2 with respect to any ACM which:  (i) constitutes Permissible Residual ACM or Permitted ACM or (ii) becomes located in another area of such Increment of Space or otherwise is disturbed or made friable (under circumstances where such ACM was Permitted ACM and not friable prior to such disturbance) as the result of any act or omission of Tenant, any Contractor or Tenant, any Tenant’s Agent or any Tenant Party affecting the Known Encapsulation/Enclosure Areas (defined in Section 1(b)(ii) of Schedule 1-B, attached hereto) (included in the South Tower known Encapsulation/Enclosure Areas (defined in Section 1(b)(ii) of Schedule 1-B, attached hereto) and the Plaza Building Known Encapsulation/Enclosure Areas (defined in Section 1(b)(ii) of Schedule 1-D attached hereto)) (collectively, “Tenant Disturbed ACM”).  For purposes of this Lease, “Permitted ACM” is any ACM present at any location in the Project which constitutes a “Known Encapsulation/Enclosure Area” under Schedule 1-B or Schedule 1-D, as applicable.

(b)Landlord agrees:  (i) to bear any increased out-of-pocket Actual Costs in the design or construction of any Tenant Improvements Increment actually incurred by Tenant (through payments to independent, third-party contractors, suppliers, consultants or service providers) as the direct result of the existence of any ACM (other than Permissible Residual ACM, Permitted ACM or Tenant Disturbed ACM) within a particular Increment of Space following the Delivery Date for such Increment of Space that is discovered by Landlord prior to the Commencement Date for such Increment of Space or is discovered by Tenant and described in a written notice delivered by Tenant to Landlord (which Tenant agrees to promptly deliver) prior to the Substantial Completion of the initial Tenant Improvements Increment constructed by Tenant), which increased, out-of-pocket Actual Costs would not have been incurred had such ACM not existed (“LL ACM Costs”); and (ii) to reimburse Tenant for any LL ACM Costs actually incurred by Tenant in the construction of any Tenant Improvements Increment; provided, however, that Landlord shall have no obligation to bear or reimburse Tenant for any increased or additional costs if such increased or additional costs are related to:  (a) the presence of ACM at the Project as a result of the introduction of ACM into, onto or about the Project by Tenant, any Contractor of Tenant, any Tenant’s Agent or any Tenant Party, (b) the presence of any Permissible Residual ACM, Permitted ACM or Tenant Disturbed ACM, (c) any desire by Tenant to remove or abate any Permitted ACM, or (d) the disturbance (either intended or unintended) by Tenant, any Contractor of Tenant, any Tenant’s Agent, or any Tenant Party of any Permitted ACM during the construction and/or installation of any Tenant Improvements (or Expansion Space Improvements).  Landlord further agrees that any delays encountered by Tenant in the Substantial Completion of any Tenant Improvements Increment that result directly from the presence of any ACM in such Increment of Space (other than Permissible Residual ACM, Permitted ACM or Tenant Disturbed ACM) as of the date on which Tenant commences construction of such Tenant Improvements Increments shall, subject to the provisions of Article 5, be deemed a Landlord Delay; provided, however, that no Commencement Date Delay shall be deemed to have occurred if such delay relates to:  (a) all presence of ACM at the Project as a result of the introduction of ACM into, onto or about the Project by Tenant, any Contractor of Tenant, any Tenant’s Agent, or any Tenant Party, (b) the presence of

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Permissible Residual ACM, Permitted ACM or Tenant Disturbed ACM at any location in the Project, (c) any desire by Tenant to remove or abate any Permitted ACM, or (d) the disturbance (either intended or unintended) by Tenant, any Contractor of Tenant, any Tenant’s Agent, or any Tenant Party of any Permitted ACM during the construction and/or installation of any Tenant Improvements (or Expansion Space Improvements).  In the event that any increase in the cost of the design, construction or installation of any Tenant Improvements Increment or any delay in the Substantial Completion of any Tenant Improvements Increment is caused  by:  (a) the presence of ACM at the Project as a result of the introduction of ACM into, onto or about the Project by Tenant, any Contractor of Tenant, any Tenant’s Agent, or any Tenant Party, (b) the presence of Permitted ACM (or Tenant Disturbed ACM) at any location in the Project, (c) any desire by Tenant to remove or abate any Permitted ACM, or (d) the disturbance (either intended or unintended) by Tenant, any Contractor of Tenant, any Tenant’s Agent,  or any Tenant Party of any Permitted ACM during the construction and/or installation of any Tenant Improvements (or Expansion Space Improvements), then to such extent, such increased costs shall be borne by Tenant (at Tenant’s sole cost and expense) and no such delays shall, to such extent, be deemed to be any form of Commencement Date Delay.

6.6Cleaning.    Each Increment of Space (and by Expansion Space leased by Tenant) shall be periodically cleaned by (and shall be kept clean by) Tenant’s Contractors during the construction of each Tenant Improvements Increment (or the Expansion Space Improvements), and upon Substantial Completion of any Tenant Improvements Increment (or of any Expansion Space Improvements), the applicable Contractor shall cause all construction related debris and materials to be removed from the applicable Increment of Space (or Expansion Space) and shall further cause such Increment of Space (or Expansion Space) to be in a broom clean condition.  Upon the completion of such cleaning by Tenant’s Contractor, and upon commencement of the Lease with respect to each Increment of Space (or Expansion Space), each such Increment of Space (or Expansion Space)  shall be customarily cleaned by Landlord in conformance with Landlord’s then effective janitorial specifications immediately following Tenant’s move into such Increment of Space (or Expansion Space).  The costs of the cleaning provided by Landlord pursuant  to this Section 6.6 shall not be deducted from the Tenant Improvement Allowance (or from the applicable Expansion Allowance, if any).

6.7Services During Construction.   During the Construction of each Tenant Improvements Increment (or of any Expansion Space Improvements), and during Tenant’s move into any Increment of Space (or any Expansion Space), Landlord shall provide, in the applicable Increment of Space, and only in such Increment of Space (or in the applicable Expansion Space, and only in such Expansion Space), and neither Tenant nor Tenant’s Agents shall be charged for: (i) HVAC service during Business Hours, (ii) freight elevator service to such Increment of Space (including freight elevator service) during Normal Construction Hours (defined in this Section 6.7, below), (iii) electricity, (iv) water and (v) access to Project loading docks during Normal Construction Hours.  Landlord shall provide on reasonable advance notice, freight elevator service to any Increment of Space (or to any Expansion Space) after Normal Construction Hours, subject to reimbursement on demand by Tenant to Landlord for all of Landlord’s actual, out-of-pocket costs (as reasonably estimated by Landlord) incurred by Landlord in so providing such freight elevator services.  Except as expressly set forth in this Work Letter or in the Lease (or any amendment thereto), Landlord shall not charge Tenant any overhead, profit or other fees in connection with Tenant’s construction of Tenant Improvements (or of any Expansion Space Improvements).  For purposes of this Work Letter, “Normal Construction Hours” shall mean 6:00 a.m to 6:00 p.m, on Monday through Friday and 9:00 a.m. through 6:00 p.m. on Saturdays.

6.8Consistency.   In the event of any inconsistency between the provisions of this Work Letter and the provisions of the Construction Rules, the provisions of this Work Letter shall control.

6.9Move-In Priority.   During Tenant’s move into each Increment of Space (or into any Expansion Space), Landlord shall grant Tenant reasonable priority in usage of the Project freight elevators, subject to Landlord’s reasonable requirements in accommodating other Tenants and occupants of the South Tower and/or Plaza Building, and Landlord’s general maintenance and operation requirements in the South Tower and/or Plaza Building.

6.10Access to Premises Prior to Construction.   Except to the extent such space is not accessible due to the nature of ongoing Base Building Work, Tenant and its Architect, Engineers, consultants and Contractors shall have full access to the First Increment Office Space at all times prior to the First Increment Delivery Date for the purposes of planning Tenant’s Work in such space.

6.11Staging Area.   During the period following December 31, 2003 and prior to the Substantial Completion by Tenant of all of its Tenant Improvements in the Fourth Increment Office Space, Tenant shall have the right, without the obligation to pay Rent (except as expressly otherwise provided in this Section 6.11), to use, and Landlord shall provide, subject to availability, one (1) full floor in the South Tower (or on “D” level) selected by Landlord in its sole discretion (the “Staging Area”) for the sole purpose of storing and staging Tenant’s furniture and equipment in such Staging Area (and for no other purpose).  With respect to this free Staging Area, Tenant shall be responsible for providing all insurance and for providing any necessary fencing, security or other protective facilities, Tenant shall defend, and hold Landlord harmless and shall indemnify Landlord from and against any and all Claims, Damages and Expenses in any manner arising out of or incurred by Landlord in connection with the use of such Staging Area by Tenant.  In addition, all of the provisions of the Lease as to insurance and indemnification to be provided by Tenant shall apply (as if such Staging Area were part of the Premises); provided, however, that notwithstanding any provision of the Lease or this Work Letter to the contrary, in no case whatsoever (including, without limitation any circumstance involving any form of negligence by Landlord or any Landlord Party) shall Landlord have any liability to Tenant in the event any of Tenant’s furniture and/or equipment stored in the Staging Area shall be damaged, lost or stolen, and Tenant hereby waives all Claims, Damages and Expenses it may now or hereafter hold against Landlord on account of such loss, damage or theft.  Tenant shall be obligated to remove all of the stored materials and its fencing and other facilities from the Staging Area within ten (10) days of Tenant’s

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receipt of written notice from Landlord stating that such Staging Area is needed by Landlord for any reason, in which event comparable space in the South Tower, to the extent such space is available, shall be made available by Landlord to Tenant as a substitute Staging Area.  Landlord shall not be required to provide any security or other services (other than elevator service) or utilities (other than electricity) to the Staging Area, but Landlord shall be promptly reimbursed by Tenant for any and all costs incurred by Landlord on account of any use by Tenant of the Staging Area hereunder.  Upon the date five (5) days following the Fourth Increment Commencement Date, all of Tenant’s rights under this Section 6.11 shall automatically terminate.

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SCHEDULE 1-A TO EXHIBIT C

Part I

Delivery Dates for Delivery of Background Plans

1.	First Increment Office Space:	November 15, 2003
2.	Second Increment Office Space:	December 15, 2003
3.	Third Increment Office Space:	December 31, 2003
4.	Fourth Increment Office Space:	December 31, 2003
5.	Plaza Building Space:	May 15, 2004

Part II

Delivery Dates for Delivery of Restroom Plans

1.	First Increment Office Space (provided, that no Restroom Plans shall be delivered for Floor 16):	December 15, 2003
2.	Second Increment Office Space:	December 15, 2003
3.	Third Increment Office Space:	May 15, 2004
4.	Fourth Increment Office Space:	May 15, 2004
5.	Plaza Building Space:	Not applicable

All Restroom Plans will be “permit ready” and provide for a level of quality and quantity for the restrooms which shall be equal to, or better than, the restrooms reflected described in the Standard Restroom Plans defined in Section 1cc) (xii) of Schedule 1-B to Exhibit C.

SCHEDULE 1-A TO
EXHIBIT C

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SCHEDULE 1-B TO EXHIBIT C

SOUTH TOWER BASE BUILDING WORK

1.Base Building Work.

With respect to each Increment of Space (and any Added Hold Space (if any)) located in the South Tower, Landlord shall perform the following work in a first class manner and in accordance with Section 2 hereof (the “South Tower Base Building Work”) with respect to such Increment of Space.

(a)Demolition Work.

(i)First Increment Office Space.  Landlord shall complete the demolition and removal of existing tenant improvements (so as to return each such floor to core and shell condition in accordance with and to the extent provided in the South Tower Increment Background Plans for the First Increment Office Space) on Floors 16, 18, 19, and 21, as well as the demolition of the existing restrooms on Floors 18, 19, and 21.

(ii)Second Increment Office Space.  Landlord shall complete the demolition and removal of existing tenant improvements (so as to return each such floor to core and shell condition in accordance with and to the extent provided in the South Tower Increment Background Plans for the Second Increment Office Space) (as well as the demolition of the existing restrooms on Floors 20 and 22) on Floors 20 and 22.

(iii)Third Increment Office Space.  Landlord shall complete the demolition and removal of existing tenant improvements (so as to return each such floor to core and shell condition in accordance with and to the extent provided in the South Tower Increment Background Plans for the Third Increment Office Space) (as well as the demolition of the existing restrooms and Floors 13 and 17) on Floors 13 and 17.

(iv)Fourth Increment Office Space.  Landlord shall complete the demolition and removal of existing tenant improvements (so as to return each such floor to core and shell condition in accordance with and to the extent provided in the South Tower Increment Background Plans therefor) (as well as demolition of existing restrooms on Floors 12, 11, 10 and 9) on Floors 12, 11, 10 and 9.

(v)Added Hold Space.  In the event that Tenant elects to lease any Hold Space pursuant to Section 1.6 of the Lease, Landlord shall complete the demolition and removal of existing tenant improvements (so as to return each such floor to core and shell condition in accordance with and to the extent provided in the South Tower Increment Background Plans for any such Added Hold Space) (as well as demolition of any existing Restrooms) in such Added Hold Space.

(b)Asbestos Abatement.

(i)If and to the extent such work has not already been performed as of the date hereof, as part of the South Tower Base Building Work for each Increment of Space (and each portion of each Increment of Space), Landlord shall, prior to the Delivery Date for each Increment of Space cause all ACM in such Increment of Space to be abated in accordance with Landlord’s Asbestos Abatement Plan (defined in this Section 1(b)(i), below) (or, subject to subparagraph (b)(ii) below, if and to the extent Landlord’s Asbestos Abatement Plan calls for enclosure and/or encapsulation of ACM in particular locations, to be enclosed and/or encapsulated) in accordance with Landlord’s Asbestos Abatement Plan, the ACM Scope and all applicable Laws such that following such abatement, no ACM shall remain in the applicable Increment of Space  (or Added Hold Space) other than ACM enclosed and/or encapsulated in accordance with Landlord’s Asbestos Abatement (c) Plan (and residual airborne ACM (“Permissible Residual ACM”) at levels which are permissible (and do not require abatement) under either applicable Laws or Landlord’s Asbestos Abatement Plan) (such work to be so performed is referred to herein as the “South Tower ACM Abatement Work”).  For purposes of this work Letter, as to any particular portion of the Premises with respect to which ACM is to be abated therefrom following the Effective Date, “ACM Scope” shall mean (i) removal and disposal of all accessible ACM and ACM fireproofing from the following south Tower floor core areas: toilet rooms, janitor’s rooms, telephone rooms, storage/vending rooms, freight lobbies and passenger lobbies, (ii)  removal of fireproofing from the South Tower floor decking, I-bearns, spandrel beams, cross bracing and interior columns, (iii) removal of al ACM floor tile and mastic, all carpet glue containing ACM and all TSI piping and elbow material, (iv) installation of perimeter sheet metal panels at the void between existing columns at the window pockets (where the ACM cannot feasible be removed) and (v) compliance with the requirements of Attachment I-B(1) attached hereto (entitled  “Project Closeout”, “Work Area Clearance” and “Removal of Asbestos-containing Materials”.

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(ii)In addition, prior to the Delivery Date for each Increment of Space, Landlord shall provide Tenant with an asbestos abatement report (“South Tower Asbestos Abatement Report”) in form and substance consistent with customary commercial practices, which report shall state the locations (the “Known Encapsulation/Enclosure Areas”) of any ACM in such Increment of Space that has been enclosed or encapsulated in accordance with Landlord’s Asbestos Abatement Plan.  As used herein, “Landlord’s Asbestos Abatement Plan” is that certain asbestos abatement plan in effect from time to time and available for review by Tenant at the Project Management Office; provided, however, that in all cases of South Tower ACM Abatement Work, Landlord’s Asbestos Abatement Plan shall mean, at a minimum: (A) removal of all ACM from the ceiling and exposed interior core columns, (B) enclosure of all ACM contained on window columns and (C) encapsulation of all ACM located under or behind the perimeter HVAC induction units.  Those areas of each floor of the South Tower Premises where, pursuant to Landlord’s ACM Abatement Plan, ACM (other than Permissible Residual ACM) shall remain (in an enclosed or encapsulated state) are:  (1) the exterior window columns described in clause (B) of the preceding sentence, (2) under and/or behind the perimeter HVAC induction units, (3) behind core walls, (4) on the interior side of all beams running through the stairwells, elevator shafts and the main air/mechanical shafts and (5) on the outer aspect of the spandrel beams (collectively, “South Tower Known Encapsulation/Enclosure Areas”).

(c)Base Building/Systems and Equipment.

Subject to the provisions hereof, as part of the South Tower Base Building Work, for each Increment of Space, Landlord shall, on or before the applicable Commencement Date (subject to Sections 1.1.1) and cause the following items to be in place in and about such Increment of Space, and as appropriate, in and about the South Tower (all of which shall be considered part of the South Tower Base Building Work).  In addition, where such items are within (or are intended to service) a particular Increment of Space and are intended to operate or function in a particular manner, such items shall be placed in good working condition.

(i)South Tower Shell.      The South Tower shell and exterior, including perimeter window frames, seals, mullions and glazing in good condition.

(ii)South Tower Core.      The South Tower core, including, without limitation, mechanical, electrical, fire sprinkler, plumbing, and/or life-safety systems in accordance with applicable Codes (defined in Section 2, below) and as required for connection of Tenant’s distribution in such Increment of Space.

(iii)Drywall. Drywall (fire taped, unpainted and ready for paint) at core and perimeter walls and columns and in conformance with applicable fire ratings.

(iv)Doors.  Project standard door, frame and hardware assemblies at core locations including stairwells, restrooms, and electrical, telephone, mechanical, and janitorial rooms (“Core Service Rooms”). The Core Service Rooms shall have concrete or finished floors (per Project Standards) and lighting and convenience electrical power as specified in the South Tower Increment Background Plans for each Increment of Space.

(v)Public Access.  Public stairwells and associated legal paths of egress shall be as required under the Codes, and shall be delivered clean and well lighted.

(vi)Core Electrical Rooms.  Core electrical rooms shall be complete with all required feeders, transformers, panels, and associated equipment as required to provide electrical service in accordance with the Lease, suitable for distribution by Tenant within such Increment of Space.  Each floor of such Increment of Space shall have at least two (2) 277/480 volt, 42 circuit and two (2) 120/208 volt, 42 circuit panelboards and one (1) 75 KVA transformer in good working condition to provide service on such floor; provided, however, that Landlord shall not demolish (and shall leave in place) any additional panels or transformers located in or about such Increment of Space.

(vii)Fire Sprinkler System.  Primary fire sprinkler system consisting of main piping, control valves, and lateral piping and sprinkler heads as required to meet Codes for an unoccupied premises and capable of accommodating Tenant’s distribution within such Increment of Space, subject to the terms of Section 2, below.

(viii)Fire/Life Safety System.  Life safety systems as required by applicable building codes on a core only basis, including all required exit signs; alarm and communication systems within the janitor’s closet, telephone and electrical rooms, service elevator lobby area, stairwells, toilet rooms; life safety terminal cabinets, with terminal cabinets ready for book-up by Tenant; and electrical power necessary for Tenant’s strobes, speakers and smoke detectors, etc. to the extent the quantity of such devices is consistent with that found in tenant spaces in Comparable Buildings.

SOUTH TOWER
BASE BUILDING
WORK

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(ix)Floors.   Concrete floors, level to one-quarter (1/4) inch variation per ten linear feet on a non-cumulative basis (the “Level Standard”), prepared to accept installation of standard tenant improvement floor finishes without further treatment (and areas of significant damage to the floor shall be patched so as to prepare such areas to accept standard tenant improvement floor finishes).  Subject to the provisions of this subparagraph, if Tenant shall, during its inspection of an Increment of Space (or Added Hold Space or Expansion Space) identify any areas of any concrete floor within such Increment of Space (or Added Hold Space or Expansion Space) with significant, material deviations from the Level Standard, and if Tenant shall within ten (10) days following the Delivery Date for such Increment of Space (or Expansion Space) correctly notify Landlord in writing of the existence of such material variation (a “Floor Variation Notice”), then Landlord shall, at Landlord’s expense, perform the work necessary to cause such concrete floor in such area to be leveled to a standard of one-quarter (1/4) inch variation per twenty feet (the “Floor Leveling Work”).  Notwithstanding any provision of the Lease or this Work Letter to the contrary, Tenant’s failure to deliver a Floor Variation Notice for a particular Increment of Space (or any such significant material variation contained therein) within such ten (10) day period shall automatically and conclusively be deemed to be a waiver by Tenant of any further rights of Tenant under this subparagraph (ix) with respect to such Increment of Space; provided, however, that notwithstanding the above, if Tenant shall deliver a Floor Variation Notice after such ten (10) day period notifying Landlord: (a) of the presence of an area (or areas) of any concrete floor within any Increment of Space (or Expansion Space) where there is a significant, material deviation from the Level Standard and (b) that such materially deviation will unreasonably interfere with Tenant’s construction or installation of its Tenant Improvements in such Increment of Space (or Expansion Space), then Landlord shall, at Landlord’s expense, within a commercially reasonable time after Landlord’s receipt of such Floor Variation Notice, perform the Floor Leveling Work with respect to such area and, except to the extent that Landlord does not perform such Floor Leveling Work within a commercially reasonable time following Landlord’s receipt of such Floor Leveling Notice, no Commencement Date Delay shall be deemed to have occurred and Landlord shall not be responsible for any increased construction or other costs incurred by Tenant with respect to such Tenant Improvements Increment (or Expansion Space Improvements) as a result of Landlord’s performance of the Floor Leveling Work in such Increment of Space (or Expansion Space).

(x)HVAC Interior Systems.   Multiple supply air ducts within such increment of Space, capable of supplying cooled and heated air to tenant space; supply and return air for elevator lobby; and supply and exhaust air for toilet rooms.  Pneumatic control loop around core for control of tenant spaces.

(xi)Common Elevator Lobbies.  Common elevator lobbies for each floor within such Increment of Space, including finished elevator doors, emergency egress signage, Braille floor numbering signs, call lanterns, call buttons fire alarm devices, and fire department connections.

(xii)Restrooms.  Mens’ and Womens’ restrooms on each floor of such Increment of Space completed in accordance with those certain restroom renovation drawings and specification for Floor 44 of the South Tower (a copy of which Tenant acknowledges has been provided to Tenant) (“Standard Restroom Plans”), with plumbing fixtures, ceramic tile floors, recessed accessories, partitions/dividers, ceiling and lighting, and running warm and cold water, all modified to provide for full compliance with all applicable Codes; provided, however, that Landlord reserves the right to substitute (for purposes of the Standard Restroom Plan) finishes and/or fixtures and other equipment of equal or greater quality than that shown on the Standard Restroom Plans delivered to Tenant.

(xiii)Exit Signage.  Illuminated exit signage at stairwells and elevator lobbies (with not less than two (2) power sources for each exit sign) and otherwise as required for compliance with all applicable Codes for an unoccupied premises.

(xiv)HVAC Induction Units.  For all portions of such Increment of Space with HVAC perimeter induction units, the HVAC perimeter induction units shall be in good working order.  In addition to the foregoing (for those portions of any Increment of Space not intended to be served by the HVAC perimeter induction units), the internal space HVAC system, inclusive of control loops and control systems, shall be in good working order.

(xv)Telecommunications.  As to such Increment of Space, telecommunications riser capacity reasonably sufficient and available for normal office tenant telecommunications cable use (without further charge by Landlord) from the MPOE (minimum point of entry) as to the South Tower to the main telephone terminal located in the telephone/electrical room on each floor of such Increment of Space and available for branching by Tenant of lines throughout such Increment of Space.

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(xvi)Window Coverings.  Window coverings for each floor within each Increment of Space of the type specified in the Specifications (Schedule 2).  Notwithstanding any provision to the contrary contained in the Work Letter or this Schedule to the contrary, Tenant acknowledges and agrees that Landlord shall not be required to install the window coverings until after Tenant has finished construction of all partitions (and related work) but not before the installation of Tenant’s floor finishes within a particular Increment of Space and Landlord’s work with respect to window coverings may proceed without interference or the possibility of a claim of Landlord Delay.

(xvii)Core Service Room Signage.  All Base Building core service rooms shall contain such signage as is required by all applicable Laws.

2.Compliance with Law.

For each increment of Space (and any Added Hold Space) located in the South Tower, the South Tower Base Building, as constructed by Landlord, shall be in compliance with applicable building codes, life-fire safety codes, physical disability codes, and other applicable laws (collectively, “Codes”) applicable to the South Tower Base Building Work, to the extent that such compliance is required (or would be required) to comply with Codes in effect (and as enforced) (for unoccupied space, without tenant improvements) as of the date of Substantial Completion of the Tenant Improvements in each such Increment of Space (or Added Hold Space) (or the Commencement Date for such Increment of Space, whichever date is earlier) as required to obtain a certificate of occupancy, a temporary certificate of occupancy, or any writing permitting legal occupancy of such Increment of Space by Tenant; provided, however, that (with respect to any obligation of Landlord for compliance with Codes or Laws set forth in this Work Letter) Landlord may utilize any exemptions, variances and/or grandfather provisions contained in any Code to effect compliance therewith; provided, further, however, that to the extent that Landlord utilizes any such exemptions, variances and/or grandfather provisions to effect compliance with Codes applicable to the South Tower Base Building Work in any Increment of Space (or Added Hold Space), and Tenant is, in the future, required to perform remedial work (because Tenant is going to make subsequent Alterations or repairs, or because of a governmental requirement) with respect to any of the South Tower Base Building Work (“Remedial South Tower Base Building Work”) in such Increment of Space (or Added Hold Space) in order to comply with applicable Codes  which were in effect as of the date of Substantial Completion of the Tenant Improvements in such Increment of Space (or Added Hold Space), and which Tenant would not otherwise have been required to perform but for the use by Landlord of such exemptions, variances and/or grandfather provisions, Landlord shall, at Landlord’s election, (a) perform such Remedial South Tower  Base Building Work or (b) reimburse Tenant (after receipt of reasonably detailed invoices therefor) for Tenant’s reasonable, out-of-pocket costs incurred in performing such Remedial South Tower Base Building Work.  In addition, Landlord shall, at Landlord’s expense, perform any modifications required to the vertical penetrations in the South Tower core and in the South Tower Base Building and Common Areas on floors of the South Tower on which any Increment of Space in the South Tower Premises is located, to the extent such modifications are required to obtain a certificate of occupancy, a temporary certificate of occupancy, or its equivalent for each such Increment of Space as of the date of Substantial Completion of the Tenant Improvements in such Increment of Space.  Landlord shall not be required to make upright any fire sprinkler heads or to replace any elevator fire doors removed by Tenant.

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SCHEDULE 1-C TO EXHIBIT C

Minimum Base Building Work

1.All Space.

As to each Increment of Space and all Added Hold Space, “Minimum Base Building Work” shall mean (a) all South Tower ACM Abatement Work (as to the South Tower Space in question) and all Plaza Building ACM Abatement Work (as to all Plaza Building Space), and (b) demolition of existing tenant improvements in the Increment of Space (or Added Hold Space) in question substantially in accordance with the Background Plans for such space.

2.Restroom Renovation.

With respect to the First Increment Office Space only, Minimum Base Building Work shall also include the renovation of the restrooms with respect to all floors (other than Floor 16) within such First Increment Office Space described in Section (c)(xii) of Schedule 1-B attached to the Work Letter.

3.Specific Exceptions to Minimum Base Building Work.

Notwithstanding any provision of the Lease, the Work Letter or this Schedule to the contrary, Minimum Base Building Work shall specifically not include any of the following:

(a)Except as provided in Paragraph 2 above, any Restroom Renovation;

(b)Window covering installation (subject to the provisions of Schedule 1-B Section 1(c)(xvi) and Schedule 1-D Section 1(c)(xvii)); and

(c)Closure of any stairwell openings on floors within any such Increment of Space deemed unnecessary by Tenant.  Stairwell openings will be closed unless Tenant notifies Landlord that it desires to keep one or more open stairwells prior to the Delivery Date with respect thereto.

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SCHEDULE 1-D TO EXHIBIT C

PLAZA BUILDING BASE BUILDING

1.Base Building Work.

With respect to the Plaza Building Space, Landlord shall perform the following work in a first class manner and in accordance with Section 2 hereof (the “Plaza Building Base Building Work”) with respect to the Plaza Building Space:

(a)Demolition Work in the Plaza Building Space.  Landlord shall complete the demolition and removal of existing improvements in the Plaza Building Space (so as to return the Plaza Building Space to core and shell condition in accordance with and to the extent provided in the Plaza Building Space Background Plans).

(b)Asbestos Abatement.

(i)Landlord shall, prior to the Plaza Building Delivery Date, cause all ACM in the Plaza Building Space to be abated (or, subject to subparagraph (b)(ii) below, if and to the extent Landlord’s Asbestos Abatement Plan calls for enclosure or encapsulation of ACM in particular locations, to be enclosed and/or encapsulated) in accordance with Landlord’s Asbestos Abatement Plan, and all applicable Laws such that following such abatement, no ACM shall remain in or about the Plaza Building Space other than Permissible Residual ACM or ACM enclosed or encapsulated in accordance with Landlord’s Asbestos Abatement Plan.  Landlord’s Asbestos Abatement Plan shall (A) be consistent with the ACM Scope for the South Tower Premises set forth in Schedule 1-B (to the extent, such standards would be applicable under ACM abatement best practices, taking into account the differences in the nature of the Plaza Building Space and the differences, if any, in the location of the ACM in the Plaza Building Space with all areas of ACM selected for enclosure and/or encapsulation to be selected on a basis consistent with such selection under the South Tower Asbestos Abatement Plan and the ACM Scope and (B) to the extent applicable to conditions and/or ACM locations which are not comparable to that found in the South Tower Premises, shall reflect the same level of best ACM industry and compliance with Laws as is provided the ACM Scope.  Landlord shall identify with precision All Known Encapsulation/Enclosure Areas in (as with respect to) the Plaza Building Space (the “Plaza Building Space Known Encapsulation/Enclosure Areas”) in a written notice (“Known ACM Areas Notice”) delivered to Tenant not later than thirty (30) days prior to the Delivery Date for the Plaza Building Space.

(ii)In addition, prior to the date that is thirty (30) days prior to the Plaza Building Space Delivery Date, Landlord shall provide Tenant with (in addition to the Known ACM Areas Notice) an asbestos abatement report (the “Plaza Building Asbestos Abatement Report”) in form and substance consistent with customary commercial practices, which report shall state in reasonable detail the location of any ACM in or adjacent to the Plaza Building Space that has been encapsulated in accordance with Landlord’s Asbestos Abatement Plan (and which shall be consistent with the Known ACM Area Notice).

(c)Base Building/Systems and Equipment.  As part of the Plaza Building Base Building Work, Landlord shall cause the Plaza Building Space to have the following items in place in and about the Plaza Building Space; In addition, where such items are within the Plaza Building and are intended to operate or functions in a particular manner, such items shall be placed in good working condition.

(i)Plaza Building Shell.  The Plaza Building shell and exterior, including perimeter window frames, seals, mullions and glazing in good condition.

(ii)Demising Walls.  All walls and all other alterations required to demise the Plaza Building Space, which shall, where applicable, will include slab to slab metal studs with rated, double dry wall or drywall as required by applicable Codes.

(iii)Plaza Building Core Areas.  The Plaza Building core areas, including, without limitation, mechanical, electrical, fire sprinkler, plumbing, and/or life-safety systems in accordance with applicable Codes and as required for connection of Tenant’s distribution within the Plaza Building Space.

(iv)Drywall.  Drywall (fire taped, unpainted and ready for paint) at core, demising and perimeter walls and columns and in conformance with applicable fire ratings.

(v)Doors.  Project standard door, frame and hardware assemblies at core locations including stairwells, restrooms, and electrical, telephone, mechanical, and janitorial rooms (“Core Service Rooms”), and leading from the interior of the Plaza Building Space directly to the outside Plaza Area.

(vi)Core Service Room.  The Core Service Rooms shall have concrete or finished floors (per Project Standards) and lighting and convenience electrical power.

(vii)Public Access.  Public stairwells and associated legal paths of egress shall be as required under the Codes, and shall be delivered clean, well lighted and with a fresh coat of paint.

(viii)Core Electrical Rooms.  The common core electrical room shall be complete with all required feeders, transformers, panels, and associated equipment as required to provide electrical service in accordance with the Lease, suitable for distribution by Tenant within the Plaza Building Space.  The common core

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electrical room shall have 277/480 volt panelboards and 120/208 volt panelboards.  Emergency power will be available to provide for Code required lighting.

(ix)Fire Sprinkler System.  Primary fire sprinkler system consisting of main piping, control valves, and lateral piping and sprinkler heads as required to meet Codes for an unoccupied premises and capable of accommodating Tenant’s distribution within the Plaza Building Space, subject to the terms of Section 2, below.

(x)Fire/Life Safety System.  Life safety systems as required by applicable building codes on a core only basis, including all required exit signs; alarm and communication systems within the telephone and electrical rooms, stairwells, toilet rooms; life safety terminal cabinets, which terminal cabinets shall be ready for hook-up by tenant; and electrical power necessary for tenant’s strobes, speakers and smoke detectors, etc. to the extent the quantity of such devices is consistent with that found in tenant spaces in Comparable Buildings.

(xi)Floors.  Concrete floors level to within one-quarter (1/4) inch variation per ten (10) linear feet on a non-cumulative basis, prepared to accept installation of normal tenant improvement floor finishes without further treatment (except that areas of significant damage to the floor shall be patched so as to prepare such areas to accept normal tenant improvement floor finishes); provided, however, that Tenant acknowledges that (a) in all cases Landlord shall be permitted to leave in place (and shall not be required to perform any floor leveling work with respect to those portions of the Plaza Building Space which are currently covered with granite floor covering and (b) following demolition of the other floor coverings in the Plaza Building Space (other than the granite floor covering), there shall remain a difference in floor level between the area covered by the granite floor and all other areas, which difference in level Tenant agrees to accept (and to not require work by Landlord to equalize).

(xii)HVAC.  Existing air-conditioning unit AC-87 supplied cooling to the Plaza Level northeast portion branch bank space.  Unit has a maximum air handling capacity of 26,700 cfm and nominal 90 tons of cooling capacity.  Unit includes supply fan, chilled water cooling coil, and 85% efficiency filters.  Additionally, the ventilation outside air has charcoal filters for removal of pollutants in the ventilation air.  Heating is by hot water reheat coils in the tenant furnished terminal air units.  Source of hot water is building heating hot water boilers.  Hot water supply and return pipes are provided within the tenant space.  Main supply air ducts are existing in the space.  Control is pneumatic.

(xiii)Restrooms.  Restrooms shall not be part of the Plaza Building Base Work; Tenant has agreed to construct necessary restrooms within its Plaza Building Space as part of its Tenant Improvements therein.

(xiv)Exit Signage.  Illuminated exit signage at stairwells (with not less than two (2) power sources for each exit sign) and otherwise as required for compliance with all applicable Codes for an unoccupied premises.

(xv)Telecommunications.  As to the Plaza Building Space, telecommunications riser capacity reasonably sufficient and available for Tenant’s telecommunications cable use (in accordance with SBC standards and without further charge by Landlord) from the MPOE (minimum point of entry) to the main telephone terminal locations in the Plaza Building Space and available for branching by Tenant of lines throughout the Plaza Building Space.

(xvi)Entry Doors.  Double door glass entry doors conforming to the specifications for the adjacent Plaza Building’s entry doors.

(xvii)Window Coverings.  Window coverings for the Plaza Building Space of the type specified in the Specifications (Schedule 2).  Notwithstanding any provision to the contrary contained in the Work Letter on this Schedule to the contrary, Landlord shall not be required to install the window coverings until after Tenant has finished construction of all partitions (and related work), but not before the installation of Tenant’s floor finishes within the Plaza Building Space, and Landlord’s work with respect to window coverings may proceed without interference or the possibility of a claim of Landlord Delay.

2.Compliance with Law.

The Plaza Building Space, as constructed by Landlord, shall be in compliance with applicable Codes applicable to the Plaza Building Base Building Work, to the extent that such compliance is required (or would be required) to comply with Codes (for unoccupied space, without tenant improvements) in effect (and as enforced) as of the date of Substantial Completion of the Plaza Building Tenant Improvements (or the Commencement Date therefore, if earlier) as required to obtain a certificate of occupancy, a temporary certificate of occupancy or any writing permitting legal occupancy of such Plaza Building Space by Tenant; provided, however, that (with respect to any obligation of Landlord for compliance with Codes or Laws set forth in this Work Letter) Landlord may utilize any exemptions, variances and/or grandfather provisions contained in any Code to effect compliance therewith; provided, further, however, that to the extent that Landlord utilizes any such exemptions, variances and/or grandfather provisions to effect compliance with Codes applicable to the Plaza Building Base Building Work, and Tenant is, in the future, required to perform remedial work (because Tenant is going to make subsequent Alterations or repairs or because of a government requirement) with respect to any of the Plaza Building Base Building Work (“Remedial Plaza Building Base Building Work”) in the Plaza Building Space in order to comply with applicable Codes which were in effect as of the date of Substantial Completion of the Plaza Building Tenant Improvements, and which Tenant would not otherwise have been required to perform but for the use by Landlord of such exemptions, variances and/or grandfather provisions, Landlord shall, at Landlord’s election, (a) perform such Remedial Plaza Building Base Building Work or (b) reimburse Tenant (after receipt of reasonably detailed invoices therefor) for Tenant’s reasonable, out-of-pocket costs incurred in performing such Remedial Plaza Building Base

PLAZA BUILDING
BASE BUILDING

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Building Work.  In addition, Landlord shall, at Landlord’s expense, perform any modifications required to the vertical penetrations in the Plaza Building and in the Plaza Building Base Building and Common Areas on the ground floor of the Plaza Building, to the extent such modifications are required to obtain a certificate of occupancy, a temporary certificate of occupancy, or its equivalent for the Plaza Building Space as of the date of Substantial Completion of the Plaza Building Tenant Improvements.  Landlord shall not be required to make upright any fire sprinkler heads or to replace any elevator fire doors removed by Tenant.

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SCHEDULE 2 TO EXHIBIT C

TENANT IMPROVEMENT SPECIFICATIONS

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Thomas Properties Group, LLC

TENANT IMPROVEMENT SPECIFICATIONS

FOR THE SOUTH TOWER

CAUTION — ARCO Plaza contains asbestos.  Any work, which may come in contact with asbestos, must be coordinated through the Office of the Building.  An independent air monitoring company and a building approved asbestos removal contractor must be present during all work in asbestos-containing areas.

1.Demising Partition

1.21/2” – 25 gauge metal studs at 24” on center from floor slab to slab above.

2.5/8” drywall.  One layer on each side.

3.11/2” batt insulation between studs (R-8 rated).

4.Partition taped, mudded, and sanded smooth to receive paint or wall covering (three-coat application).

5.Partition to be fire taped to underside of ceiling to slab above.

6.All demising walls will need access opening for return air.  Contractor shall frame as required.  Air flow quantities through the return air openings/sound traps should include all air that must get to the main R.A. shafts and be sized at 500 F.P.M. free area.

7.All return air openings will have a sound trap supplied and installed by the HVAC contractor.

2.Interior Partition

1.21/2” - 25 gauge metal studs at 24” on centers.

2.5/8” drywall.  One layer on each side.

3.Partition taped and sanded smooth to receive paint or wall covering.

4.Height from floor slabs to ceiling grid approximately 8’-10”.  Floors 13, 37, 49, 50 & 51 are higher.

5.Partitions to be diagonally braced per code.

6.Any partition that butts into the exterior window walls must be finished on the side that meets the window glass to match the existing dark anodized aluminum window mullions.

3.Corridor and Interior Door Assembly

1.3’ x full height x 13/4” solid core white oak rift cut door, 20-minute fire rating (UL labeled).  Landlord shall permit in “back of the house” areas (which are not expected to be used for public traffic or for normal customer contact) “p-lam” doors to be substituted for Building Standard doors.

2.3’ x full height anodized bronze frame.  Western Integrated Materials, Inc., 9859 E. Alpac, South El Monte, CA 91733, (818) 443-0715 with 20 minute fire rating (UL labeled).

3.HINGES Two pair of 41/2” x 4” ball bearing butt hinges.  McKinney #TA 2731, 613 finish Interior door hinges to be two pair 41/2” x 4” McKinney #T-2731, 613 finish.

4.ENTRY LOCK SET to be SCHLAGE #L9453, lever 06, finish 613.

5.INTERIOR LOCKSETS to be SCHLAGE L9050, 613 finish, lever 06, 33/4” backset.

6.LOCK KEYWAYS to be: (SCHLAGE)

7.FIRE EXIT STAIRWAY DOOR LOCKSETS to be SCHLAGE L9060, 613 finish, lever 06.

8.LATCHSETS to be SCHLAGE L9010, 613 finish, lever.

9.Restroom doors to have SCHLAGE L9060 LOCKSET, 613 finish, lever 06.

10.DOOR CLOSERS to be LCN 4040 smoothie, 613 finish.  DOOR CLOSERS for handicap doors to be LCN 4041 smoothie, 613 finish.

11.Door stop. Quality #331 ES, 10B finish.

12.The BUILDING LOCKSMITH will do all keying of lock cylinders.  Contractor must have all lock cylinders and key/tenant drawing information in the hands of the building locksmith at least 10 working days prior to move in of tenants.

4.Magnetically Held Doors (which form part of the fire rated existing corridors)

Revised November 18, 2003

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1.All magnetically held doors throughout the entire tenant space must release when any alarm device is activated on the floor.  All doors held open by magnetic devices shall be acceptance tested by AHJ.  Fire exit doors along the egress path of travel, require special attention to this detail.

2.Contractor responsible for furnishing and installing wiring, conduit and boxes required for item 1 above and shall coordinate the door closure with the Building’s Fire Alarm contractor.  Door holders shall be suitable for connection with the base building fire alarm system.

5.Ceiling System

1.Donn Fineline with Armstrong Cirrus Travertone #9760 24” x 24” tiles.

2.Hard Ceilings:
Hard Ceilings may not be installed without written permission from the Office of the Building.

3.Access doors are required at all Damper Motors, VAV boxes, Fire Life Safety junction boxes, A/C duct access doors, duct damper handles, etc.

If Hard Ceilings are approved by the Office of the Building, all mechanical or electrical equipment including mixing dampers, VAV boxes, electrical junction boxes, Life Safety Speakers, etc. must be moved out of the area above the Hard Ceiling or access doors must be installed at all of the above mentioned locations.

The Office of the Building must inspect all areas above the Hard Ceiling area before any Hard Ceiling areas can be installed.

6.Painting

1.Flat finish interior latex paint by Sinclair Colors to be selected from Building Standards.

2.All paints and stain must be water-based materials only.

3.All painting is to be done after normal business hours to contain odors.  Prior written approval by the Owner will be required to paint during normal business hours.

7.Wall Base

1.4” vinyl base (Roppe or Burke).

2.Colors to be selected from Building Standards.

8.Floor Covering (Building Standard)

1.Vinyl composition tile 3/22” Axrock or Kentile.

2.Carpet - Bentley Winchester 32 oz.  Ultron 3D Premium yarn either glue down or padding.

3.Color to be selected from Owner’s standard samples.

4.It is strongly suggested that Carpet Tiles be used over the Walker Duct areas to allow for access.

9.Window Coverings

1.Roller Shades –

a.Screencloth – 3G Mermet, Super twill 300, Charcoal - Pewter

b.Mechanism/Clutch – Nysan Chain Operator, lift assist, stainless steel chain

10.Glass Sections and Sidelights

1.Use Western Integrated Materials, Inc.  Part numbers 315–1 through 315–7 x, as needed.  All glass to be safety glass per code.

11.Lighting Fixtures

1.Building Standard Fluorescent Fixtures:

a.2’ x 4’ recessed fixture with 3” high, 18 cell, low iridescent, diffuse parabolic louver; with two or three F32T8, 3500 degree K lamps, CRI 90 or higher; electronic ballast with 10% THD.  Metalux Cat. No. 2EP3S (2 or 3) 32T8S361EB or equivalent products of Columbia, Lightolier or Lithonia.

b.2’x2’ recessed fixture with 3” high, 9 cell, low iridescent diffuse parabolic louver; with two or three F32T8-U6, 3500 degree K lamps, CRI 90 or higher; electronic ballast with 10% THD.

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Metalux Cat. No. 2EP3SX (2 or 3) U6T8S33IEB or equivalent products of Columbia, Lightolier or Lithonia.

c.Compact fluorescent recessed downlight with 7-3/8 inch aperture, 32 watt triple fluorescent lamp and electronic ballast.  Halo No. C7032-7050 or equivalent products of Lightolier or Lithonia.

d.Compact fluorescent recessed wall wash fixture with 7-3/8 inch aperture, 32 watt triple fluorescent lamp and electronic ballast.  Halo No. C7032-7010 or equivalent products of Lightolier or Lithonia.

2.Emergency lighting shall be provided as required by code and connected to building emergency circuits.

3.Non-standard fluorescent fixtures shall have T-8 lamps and electronic ballasts.  The building is not responsible for maintaining non-standard lighting or replacing lamps in non-standard fixtures.

4.Where 2’x4’ recessed building standard fixtures are visible from outside the building, they shall be placed with the four foot dimension in the east-west direction.

5.Building standard exit signs shall be Lithonia Precise, edge lighted, with 6-inch high green letters on clear background, LED lamps, two-circuit for connection to building normal and emergency power systems.

12.Light Switching

1.Lighting in all areas shall be controlled by occupancy sensors.  Wall mounted sensors shall be Novitas #01-400 single or dual level; ceiling mounted sensors shall be Novitas of the required type.

13.Receptacle and Telephone Outlets

1.Duplex wall receptacles shall be 20 amp, 120 volt, NEMA 5-20R, Leviton No. 16362-HGW, white decora with white plastic plate.

2.Pedestal service fittings on cellular decking system shall be Wiremold of the desired configuration.

3.Receptacles shall be installed in 4/S box, minimum size.

4.Telephone outlets shall be installed in minimum 4/S box with EMT conduit, 3/4 inch minimum size, up to ceiling space.  Cover plates shall be white plastic.

14.Electrical Wiring System

1.All wiring shall be installed in code-approved conduit system, except that wiring for recessed lighting in demountable ceilings may be relocatable, plug-in type of a manufacturer approved by the building.

2.Conduit installed above demountable ceilings shall be supported independent from the ceiling system.

3.New panelboards and transformers if required shall be G.E. to match existing.

4.Existing cellular decking system may be used for tenant power and telephone wiring if desired.

5.No tenant electrical or telephone equipment can be installed in building electrical or telephone rooms.

6.No tenant equipment other than required emergency lighting and exit signs can be connected to the building emergency system.

15.Fire Alarm System Additions shall be Pyrotronics equipment and installed by the building approved contractor.  All fire alarm wiring shall be installed in conduit, except that wiring for speakers and strobes may be installed with approved plenum rated cable.

16.Power Metering

1.Power for all over-standard equipment such as computers, telephone switches, supplementary air condition, food service equipment, etc., shall be separately metered by the Tenant.

2.Meters shall be E-MON D-MON with meters located in the building electrical room.

17.HVAC Tenant Design Criteria

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1.General:  The design of the tenant HVAC system shall comply with the Uniform Building code as amended by the City of Los Angeles, City of Los Angeles Fire Code, California Title 24 Energy Conservation Code for office buildings and other applicable codes and industrial safety orders.

2.Tenant Zones – (Typical Floors excluding Ground Floor):

a.Private offices and open office areas are not to be connected to the same zone.  Applicable to interior zones.

b.If there is a high heat loan for a room, it shall have a separate zone and a supplementary cooling system, if needed.

c.Lunch rooms, pantry and coffee rooms shall have separate zones and ducted exhaust.

d.Do not locate acoustically sensitive areas next to duct shafts or elevator.

3.Design Conditions:

	Summer	Winter
a.Outside Dry Bulb:	99°F	41°F
Outside Wet Bulb:	72°F	—
Inside Dry Bulb:	75°F	70°F
Inside Relative Humidity:	30%-60%	30%-60%
Mean Daily Range:	21°F	—

b.Minimum Ventilation: Per ASHRAE Standard 62-1989 or 15.0 CFM/100 square feet, whichever is higher.

c.Maximum Air Supply: Maximum average air supply rate of 0.8 CFM/square foot of conditioned space in interior zones.

4.Interior Loads:

a.Lights:  1.5 watts/square foot maximum.  1.2 watts/square foot average.

b.Miscellaneous Equipment:  Maximum continuous heat output equal to 2.0 watts/square foot (6.6 BTU/square foot of conditioned space.)

c.People:  150 square feet/person.

5.Air Handling System:

a.Perimeter zones of building – induction units: Each unit with a thermostatically controlled valve for cooling and heating control.  Ventilation outdoor air to these units is from the primary air system.  Induction units will provide cooling and heating to offset solar, transmission, lighting, power and people load for a perimeter zone depth of 15 feet maximum.

b.Interior zones of building: Multiple central station air handler units located in mechanical equipment floors.  Each unit has duct riser serving multiple floors.  Total of five riser outlets per floor.  Tenant HVAC designer to ensure uniform loading of each riser takeoff on each tenant floor.

6.Return Air:

a.Any room with a door, which is larger than a 4’ X 6’ closet, must have a Return Air grill; in exterior rooms, this must be a 11/2 “ wide continuous slot or 2’ X 2’ return grills as close as possible to the windows.  In concealed-spline ceilings and lay-in tile ceilings, Return Air grills shall be 2’ X 2’ minimum.

b.No rooms adjacent to the areas of the core that have main Return Air stubs or intake opening are allowed to have the walls that go slab-to-slab.  Additionally, communication, telephone, computer and data rooms are prohibited in these locations.

c.If exterior room or interior room walls are slab-to-slab, the drywall may not go above the ceiling on the door side.  Alternatively, a Return Air opening from the room ceiling plenum to the common ceiling plenum shall be provided.  The opening shall be sized at no more than 300 fpm return air velocity.  Where an acoustical boot is required at the Return Air opening, size the boot at no more than 0.01” wg pressure loss.

18.Mechanical Air Conditioning Specifications: Demolition and Removal

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1.All unused or abandoned ductwork and piping within the tenant remodel areas shall be removed back to the next tap upstream and blanked off or capped.  Use sheet metal screws to secure cap and duct sealer, duct tape not allowed.  Unwanted fire dampers and other devices in re-used existing ductwork shall be removed and ductwork put back together and sealed airtight.

19.Ductwork: Shall Be Galvanized Sheet Metal, meeting ASTM 526 64T

1.All ducts shall be constructed and installed according to the latest “SMACNA” manual, or Chapter 10 of the Uniform Mechanical Code, whichever is the most stringent.  Ductwork downstream of terminals shall be 2” wg class.  Ductwork upstream of terminal units shall be 3” wg class.

2.Flexible ducts:

a.General: Factory pre-insulated, spiral helix spring permanently bonded to an interior liner and sheathed in an exterior vapor barrier-jacket.

a.Thermal Rating: R4 minimum

b.Fire Rating: U.L. 181, Class I.

b.Low Pressure Type: Thermaflex M-KA, Johns Manville Micro-Aire J/FLX SL, Owens-Coming fiberglass Valuflex, CertainTeed flexible air duct, or Casco flex.

a.Rating: Up to 1-1/2” w.g. positive or 1/2” w.g. negative pressure, 2,500 FPM maximum velocity.

b.Application: Final connection to diffusers or grilles.

c.Maximum Length: Not to exceed 7 feet.

c.High-Pressure Type: Johns Manville Micro-Aire J/FLX SL with high-pressure attachments; CertainTeed, Certaflex or Thermaflex M-KC.

a.Rating: Up to 6” w.g. positive or 1-1/2” w.g. negative pressure, 4,000 FPM maximum velocity

b.Application: Upstream connections to air terminal units.

c.Maximum Length: Not to exceed 5 feet.

3.Elbows for ducts with a width or 12 inches and less shall be radius type with the throat radius equal to the duct width.

4.Ductwork Accessories:

a.Hardware: Ventlok or equal.

b.Access Doors and Panels:

c.Large Doors: Fabricate per SMACNA details for double wall insulated type where used in insulated systems; single wall type in non-insulated systems.

d.Small Doors or Panels: Same as for large doors or Ventlok, Air Balance, Inc., or United Sheet Metal pre-manufactured type with transparent vision element.

e.Duct Tape: Not allowed.

f.Duct Sealant: Tuff-Bond No. 12, United McGill Corporation “Uni-Grip” duct sealant, or equal.

g.Flexible Connectors: Neoprene coated glass fabric having flame spread rating of 20 and smoke development rating of 40.  Ventglas-LA or equal.  Minimum clearance 2” between metal parts.

5.Duct Materials:

a.Ductwork: Galvanized sheet steel.  Use of rigid fiberglass duct is strictly prohibited.  Do not submit for approval.

b.Bracings, Angles, Bars and Straps: Galvanized steel.

c.Screws and Bolts: Cadmium plated.

d.Round Ductwork and Fittings: Spiral or seam welded construction, manufactured by United Sheet Metal, Peabody and Wind, Spiromatic, or approved equal.

e.Corrugated, Flexible Metal Duct: Strictly prohibited.

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20.Miscellaneous HVAC Specifications

1.All duct tape to be removed from joints and connections on existing ducts, Tuff-Bond No. 12, United McGill Corporation “Uni-Grip” duct sealant, Teledyne-105, or equivalent to be used in lieu of said duct tape, except on duct troffers connections.

2.On existing ductwork, all joints are to be inspected and sealed with specified duct sealant if there is any indication of a leak.  Existing high-pressure access doors at the mechanical shafts to have new seals installed if existing are leaking.

3.All hangers shot to the slab above are to be one piece construction forming a trapeze to support the duct and screwed to the duct and sealed.  Hanger wires may be used to support the duct if two 12 GA.  wires with clips are shot to slab and attached to each side of the duct with standard hanger straps.

4.Where metal ducts are touching, insulation shall be placed between the ducts to insure against vibration and noise.

5.Where flex duct joins the metal duct, spin-ins, or other metal fittings, these ducts shall be screwed, banded and sealed with Air-Bol, Teledyne-105 or equivalent.  Nylon bands not allowed.  Spin-ins allowed on 2” wg class ducts only.

6.Where flex duct is hung, a larger piece of metal shall be used as a sleeve between the flex duct and the hanger strap to insure against collapsing of the flex duct.

7.Two pieces of flex duct joined together is not acceptable.

8.All ductwork is to be supported independently with hangers’ shot to the slab above, and no ductwork is to be supported from another duct, conduit, pipe, or other handy piece or equipment.

9.Room thermostats to be Johnson T4002-201, two pipe, direct acting fully proportional type, and equipped with concealed set point covers.  Where 1-pipe stats were used reused mixing boxes must be converted from 1 pipe to 2-pipe operation.

10.All a/c zone control boxes must be controlled in the NORMALLY CLOSED position.

11.Controls contractor shall submit a control drawing for approval.  All pneumatic control lines on the floor must be connected as per the approved control drawing.

12.Thomas Properties Group, LLC to be notified of any variance form the plans prior to construction.  Any variance from the plans are to be clearly and accurately noted on a plan and to be given to the Chief Engineer upon job completion this drawing to be marked “as-built”.

13.For tenant auxiliary air conditioning, use air-cooled condensers or dry coolers with circulating pumps, located in mechanical equipment rooms.  Locating air-cooled condensers in ceiling space of tenant floors is not allowed.

14.All conference rooms shall have their own zone and thermostat.

15.Manual dampers with handles are to be provided in all supply ducts before attaching flex duct to air troffers.

16.No combustible materials are allowed in ceiling return air plenums as per code.

17.All supply ductwork in the ceiling plenum area is to be insulated with 2” glass fiber flexible blanket insulation with vapor barrier facing of UL rated aluminum foil scrim Kraft.  Insulation 0.75 PCF, J. M. “Microlite”.

18.Pipe insulation is required on all chilled water; hot water and condensate drain piping.  1” thick glass fiber heavy density sectional pipe insulation with factory applied all-purpose vapor barrier jacket or equal must be used.

19.Sufficient clearance must be left in front of all window induction air units to allow for periodic maintenance and repairs of the equipment.

21.Linear Diffusers

1.Ceiling supply diffusers (LD): Titus Series ML-38.  Frame to match ceiling.

2.Ceiling return: to match supply.  Every room must have a return grille and a return air path.  Acoustic boots, where required, shall be low velocity (300 fpm maximum) and low pressure drop 0.03” wg.

22.Return Air Exhaust Fan

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1.Penn inline model TDA’s Zephyr’s with speed control and timer.

23.Auxiliary Air Conditioning Units

1.The Landlord prior to any work being started must specifically approve the use of auxiliary air conditioning units in tenant spaces.

2.Auxiliary air conditioning units must be electrically sub-metered with a meter installed in the main electrical room.

3.Tenant must maintain auxiliary air conditioning units at tenant’s expense with a service contract through a LA CITY Licensed HVAC contractor.

4.Auxiliary HVAC units must have an access panel large enough for the routine service (such as filter and belt replacement) and removable access to drop the unit down per code.

5.All ceiling hung auxiliary air conditioning units are to be provided with separate secondary condensate pans, larger than air handler unit itself, suspended independently of the air handler.  Air handler drain to drain into an indirect waste line with condensate piping sized per code and with insulation.  Secondary pan drain to spill to visible location.

6.Cabinet: Cabinet shall be horizontal console type fabricated of continuous galvanized steel and finished with paint.  All panels shall be insulated with 1” neoprene coated glass fiber insulation.  Discharge angle shall be equipped with duct collar.  Back panel shall have a 2” filter frame with bottom filter across and be complete with duct collar.

7.Fans: Fans shall be DWDI, forward curved, centrifugal type dynamically balanced and mounted on solid steel fan shaft.  Shaft bearings to be grease able from the exterior of the cabinet.

8.Coils: Coils shall be of the extended surface plate fin and staggered tube type construction of 1/2” OD seamless copper tubing and rippled aluminum fins.

9.Drain Pan: Drain pan shall be fabricated of continuous galvanized steel, insulated with closed cell insulation.

10.Motor and Drive: Motor mount shall be a hinged type for simple belt tension adjustment and be securely fastened to unit frame.  Motor to be supplied with ball bearings.

11.Supply air and return Air Smoke Detectors are required for all fan coil units.  All air handling devices must have automatic contorls connected to the Fire Life Safety system to enable automatic shut off upon any floor alarm.  (See Fire Alarm Section.)

12.Auxiliary air conditioning units to have vibration isolators and seismic restraints.

13.Do not locate return grilles close to auxiliary air-conditioning units.

24.Air Terminal Units (VAV Boxes)

1.The noise criteria (NC) ratings shall not be more than NC35.  The units shall be capable of 100% shut-off.

2.Furnish and install Titus ESV-3000 or Tempmaster single duct, variable volume air distribution assemblies with attenuates and normally closed action.  Velocity controllers shall be Stafa Controls VCV 2500-300 controllers.  No reversing relays on normally open boxes will be excepted.

3.The assemblies shall be pressure independent and shall operate between zero and the maximum catalogued CFM, at an inlet velocity of 2000 FPM, the differential static pressure for any size shall not exceed 0.15” WG for the basic assembly or .25” with factory furnished attenuates.

4.All VAV boxes must operate NORMALLY CLOSED.

5.All VAV boxes flexible supply duets shall not exceed five (5) feet in length and shall be one size larger than box inlet size.  Provide three diameters length of rigid straight duct; same size as box inlet size at box inlet.  Provide concentric reducer between flexible duct and rigid duct.

25.Testing and Balancing Air Distribution Systems

1.Contractor shall procure the services of an independent air balance and testing agency, which is a member of the Associated Air Balance Council, to balance, adjust, and test all equipment, relating to the air distribution and exhaust systems.

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2.Perform testing and balancing in accordance with AABC National standards for field measurement and instrumentation.

3.Balance and testing shall not begin until systems have been completed and is in full working order.

4.Compile test data upon completion, and submit one copy of complete test data to contractor for forwarding to Office of the Building for approval.

5.Air Balancing: Perform following tests, and balancing system in accordance with following requirements:

a.Adjust all main supply and return air ducts to design CFM.

b.Adjust all zones to design CFM, supply and return.

c.Test and adjust each diffuser, grill, and register to within 5% of design requirements.

d.Modify, as needed any existing boxes for 0 minimum air, including blanking of minimum air valves as needed.

6.Air balance reports are to be in the Chief Engineer’s office within 10 days after job completion.

26.Piping Materials

1.Condense Drain: Type “M” hard drawn copper tubing with wrought copper fittings.

2.Hot & Cold Water: Type “L” hard drawn copper tubing with wrought copper fittings.

3.Soil, Waste & Vent: No hub cast iron soil pipe and fittings.

4.Chilled Water or condenser water: Type “L” hard drawn copper tubing with wrought copper fittings.

5.Do not connect tenant chilled water piping to building chilled water system.  Tenant hot water reheat coil piping may be connected to building hot water system only upon Landlord approval.

27.Values

1.Ball Valves – 2 1/2” and Smaller: Nibco T-580-M bronze ball value, screwed.

2.Abandoned plumbing must be removed back to the source or to where it enters the area under construction and capped.

3.Check Values - 2” and Smaller: Nibco T413-Y bronze swing check, screwed.

28.Piping Specialties

1.Strainers: Muessco #11 for 2” and smaller, Muessco #751 and #752 for 21/2”and larger, Sarco, Bailey, Zurn, Armstrong or Muessco.

29.Fire Sprinkler System

1.ARCO Plaza has had its basic fire fighting water supply system upgraded to conform to current retrofit codes.  These systems were completed in 1989.

30.Fire Extinguisher

1.2A/40 BC rated Dry Chemical or Halon, UL Listed and rechargeable.

2.Fire extinguisher enclosures to be semi-recessed or recessed.

31.Plumbing

1.Drinking Fountains – If drinking fountains are to be used on a floor, they must be HAWS Model #1118 handicap drinking fountains.

2.All plumbing fixtures installed in the building must comply with all WATER CONSERVATION REGULATIONS.

32.Freight Elevators

1.All material stocking or demo removal must be coordinated between contractor and the Building Office.

2.Freight elevator lobby doors should not be blocked at any time nor should combustibles be stored in the lobby.

3.All large deliveries that require the use of the freight elevator (such as carpet, drywall, studs, furniture,

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etc.) must be delivered and moved after hours.

4.Contractor is responsible for placing “walk-off carpet mats”, keeping them wetted, in the freight elevator lobby to prevent the tracking of drywall dust in the freights and throughout other areas of the building.

5.Contractor is responsible for cleaning up the loading dock in the area where contractor is doing any work or is loading or disposing of miscellaneous materials.

33.Demolition and Corridor Protection

1.Contractor to coordinate with the Office of the building on the Building requirements for demolition procedures.

2.Contractor to coordinate through the Office of the Building for trash removal and containers.

3.All deemed materials remain the property of the Owner.  The contractor shall provide for removal of all items or building reserves the right to keep any deemed material, such as, but not limited to, aluminum, phone and electrical wire, lead sheeting, etc.

4.Deliver to the Owner’s designated location such items as may be salvageable.

5.Carpet floors are to be lined with fire retardant poly and then Masonite is to be installed on all public corridor carpets from the freight elevator lobby to construction entrance points.  The sheets of Masonite are to be taped together, stopping their movement.  Floor to the restrooms must be covered.

6.Walls of public corridors are to be covered with fire retardant poly taped from top to bottom.

7.Freight elevator lobby entrance doors are to be covered with Masonite.

8A tall corridor and change in direction of the walls and corners shall be protected with poly and Masonite.

9.No materials, tools or carts are to be stored in any public corridor, passenger elevator lobby or freight elevator lobby at any time.

10.All public corridors, passenger elevators and freight elevator lobbies must be kept clean at all times.

11.Contractor to supply fire extinguishers on job site while construction is in progress.

12.When doing a complete demo, caution must be taken not to demo the existing Fire/Life Safety System devices or their conduits.

13.Contractor to notify Chief Engineer 24 hours prior to commencement of demo, so return air filters can be installed and smoke detectors can be disabled.

14.When a full floor is to be deemed, all passenger elevators are to be sealed with fire retardant poly and Masonite.

15.Passenger elevators are not permitted to be used for access to or from construction floors.  If any construction workers or personnel use the passenger elevators for transportation of materials, said contractors will be banned from the Building until such time as the Owner may decide.

16.Stairwell doors are not to be blocked open nor the operation of the magnetic door releases inhibited in any way.

17.Prior to any demolition within your suite, please notify the Office of the Building so an all clear can be granted if hazardous materials are present, i.e., lighting ballasts, asbestos, lead.

34.Plans

1.At the completion of the project, provide to the Office of the Building, two (2) complete sets of blue line as-built drawings and one (1) complete set of AutoCAD .dwg (release 13 or higher) as-built files, of architectural, specifications and engineered plans.

END OF SECTION

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Thomas Properties Group, LLC

TENANT IMPROVEMENT SPECIFICATIONS

FOR THE PLAZA BUILDING

CAUTION – ARCO Plaza contains asbestos.  Any work, which may come in contact with asbestos, must be coordinated through the Office of the Building.  An independent air monitoring company and a building approved asbestos removal contractor must be present during all work in asbestos-containing areas.

1.Demising Partition

1.51/2” - 20 gauge metal studs at 24” on center from floor slab to slab above.

2.5/8” drywall. two layers on each side.

3.11/2” batt insulation between studs (R-8 rated).

4.Partition taped, mudded, and sanded smooth to receive paint or wall covering (three-coat application).

5.Partition to be fire taped to underside of ceiling to slab above.

6.All demising walls will need access opening for return air.  Contractor shall frame as required.  Air flow quantities through the return air openings/sound traps should include all air that must get to the main R.A. shafts and be sized at 500 F.P.M. free area.

7.All return air openings will have a sound trap supplied and installed by the HVAC contractor.

2.Interior Partition

1.21/2” - 25 gauge metal studs at 24” on centers.

2.5/8” drywall. One layer on each side.

3.Partition taped and sanded smooth to receive paint or wall covering.

4.Height from floor slabs to ceiling grid approximately 8’-10”, Floors 13, 37, 49, 50 & 51 are higher.

5.Partitions to be diagonally braced per code.

6.Any partition that butts into the exterior window walls must be finished on the side that meets the window glass to match the existing dark anodized aluminum window mullions.

3.Corridor and Interior Door Assembly

1.3’ x full height x 13/4” solid core white oak rift cut door, 20-minute fire rating (UL labeled).  Landlord shall permit in “back of the house” areas (which are not expected to be used for public traffic or for normal customer contact) “p-lam” doors to be substituted for Building Standard doors.

2.3’ x full height anodized bronze frame.  Western Integrated Materials, Inc., 9859 E. Alpac, South El Monte, CA 91733, (818) 443-0715 with 20 minute fire rating (UL labeled).

3.HINGES Two pair of 41/2” x 4” ball bearing butt hinges.  McKinney #TA 2731, 613 finish Interior door hinges to be two pair 41/2” x 4” McKinney #T-2731, 613 finish.

4.ENTRY LOCK SET to be SCHLAGE #L9453, lever 06, finish 613.

5.INTERIOR LOCKSETS to be SCHLAGE L9050, 613 finish, lever 06, 33/4” backset.

6.LOCK KEYWAYS to be: (SCHLAGE)

7.FIRE EXIT STAIRWAY DOOR LOCKSETS to be SCHLAGE L9060, 613 finish, lever 06.

8.LATCHSETS to be SCHLAGE L9010, 613 finish, lever.

9.Restroom doors to have SCHLAGE L9060 LOCKSET, 613 finish, lever 06.

10.DOOR CLOSERS to be LCN 4040 smoothie, 613 finish.  DOOR CLOSERS for handicap doors to be LCN 4041 smoothie, 613 finish.

11.Door stop.  Quality #331 ES, 10B finish.

12.The BUILDING LOCKSMITH will do all keying of lock cylinders.  Contractor must have all lock cylinders and key/tenant drawing information in the hands of the building locksmith at least 10 working days prior to move in of tenants.

Revised November 18, 2003

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4.Ceiling System

1.Donn Fineline with Armstrong Cirrus Travertone #9760 24” x 24” tiles.

2.Hard Ceilings:

Hard Ceilings may not be installed without written permission from the Office of the Building.

3.Access doors are required at all Damper Motors, VAV boxes, Fire Life Safety junction boxes, A/C duct access doors, duct damper handles, etc.

If Hard Ceilings are approved by the Office of the Building, all mechanical or electrical equipment including mixing dampers, VAV boxes, electrical junction boxes, Life Safety Speakers, etc. must be moved out of the area above the Hard Ceiling or access doors must be installed at all of the above mentioned locations.

The Office of the Building must inspect all areas above the Hard Ceiling area before any Hard Ceiling areas can be installed.

5.Painting

1.Flat finish interior latex paint by Sinclair Colors to be selected from Building Standards.

2.All paints and stain must be water-based materials only.

3.All painting is to be done after normal business hours to contain odors.  Prior written approval by the Owner will be required to paint during normal business hours.

6.Wall Base

1.4” vinyl base (Roppe or Burke).

2.Colors to be selected from Building Standards.

7.Floor Covering (Building Standard)

1.Vinyl composition tile 3/22” Axrock or Kentile.

2.Carpet - Bentley Winchester 32 oz.  Ultron 3D Premium yarn either glue down or padding.

3.Color to be selected from Owner’s standard samples.

4.It is strongly suggested that Carpet Titles be used over the Walker Duct areas to allow for access.

8.Window Coverings

1.Roller Shades –

a.Screencloth – 3G Mermet, Super twill 300, Charcoal - Pewter

b.Mechanism/Clutch – Nysan Chain Operator, lift assist, stainless steel chain

9.Glass Sections and Sidelights

1.Use Western Integrated Materials, Inc. Part numbers 315–1 through 315–7 x, as needed.  All glass to be safety glass per code.

10.Lighting Fixtures

1.Lighting fixtures shall utilize F32T8 lamps where possible.  All fluorescent fixtures shall have electronic ballasts with 10% THD.

2.Emergency lighting shall be provided as required by code and connected to building emergency circuits.

3.Building standard exit signs shall be Lithonia Precise, edge lighted, with 6-inch high green letters on clear background, LED lamps, two-circuit for connection to building normal and emergency power systems.

11.Light Switching

1.Lighting in all areas shall be controlled by occupancy sensors.  Wall mounted sensors shall be Novitas #01-400 single or dual level; ceiling mounted sensors shall be Novitas of the required type.

12.Receptacle and Telephone Outlets

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1.Duplex wall receptacles shall be 20 amp, 120 volt, NEMA 5-20R, Leviton No. 16362-HGW, white decora with white plastic plate.

2.Pedestal service fittings on cellular decking system shall be Wiremold of the desired configuration.

3.Receptacles shall be installed in 4/S box, minimum size.

4.Telephone outlets shall be installed in minimum 4/S box with EMT conduit, 3/4 inch minimum size, up to ceiling space.  Cover plates shall be white plastic.

13.Electrical Wiring System

1.All wiring shall be installed in code-approved conduit system, except that wiring for recessed lighting in demountable ceilings may be relocatable, plug-in type of a manufacturer approved by the building.

2.Conduit installed above demountable ceilings shall be supported independent from the ceiling system.

3.New panelboards and transformers if required shall be G.E. to match existing.

4.No tenant electrical or telephone equipment can be installed in building electrical or telephone rooms.

5.No tenant equipment other than required emergency lighting and exit signs can be connected to the building emergency system.

14.Fire Alarm System Additions shall be Pyrotronics equipment and installed by the building approved contractor.  All fire alarm wiring shall be installed in conduit, except that wiring for speakers and strobes may be installed with approved plenum rated cable.

15.Power Metering

1.All electrical service, including power for air conditioning equipment, shall be sub-metered.

2.Meters shall be E-MON D-MON with meters located in the building electrical room.

16.HVAC Tenant Design Criteria

1.General:   The design of the tenant HVAC system shall comply with the Uniform Building code as amended by the City of Los Angeles, City of Los Angeles Fire Code, California Title 24 Energy Conservation Code for office buildings and other applicable codes and industrial safety orders.

2.Tenant Zones

a.Private offices and open office areas are not to be connected to the same zone.

b.If there is a high heat load for a room, it shall have a separate zone and a supplementary cooling system, if needed.

c.Lunch rooms, pantry and coffee rooms shall have separate zones and ducted exhaust.

d.Do not locate acoustically sensitive areas next to duct shafts or elevator.

3.Design Conditions:

	Summer	Winter
a.Outside Dry Bulb:	99ºF	41ºF
Outside Wet Bulb:	72ºF	—
Inside Dry Bulb:	75ºF	70ºF
Inside Relative Humidity:	30%-60%	30%-60%
Mean Daily Range:	21ºF	—

b.Minimum Ventilation:  Per ASHRAE Standard 62-1989 or 15.0 CFM/100 square feet, whichever is higher.

c.Maximum Air Supply:  Maximum average air supply rate of 0.8 CFM/square foot of conditioned space in interior zones.

4.Interior Loads:

a.Lights:  1.5 watts/square foot maximum.  1.2 watts/square foot average.

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b.Miscellaneous Equipment:  Maximum continuous heat output equal to 2.0 watts/square foot (6.6 BTU/square foot of conditioned space.)

c.People:  150 square feet/person.

5.Air Handling System:

a.A dedicated air handling unit provides supply and return air for the tenant demised bank branch.

4.Return Air:

a.Any room with a door, which is larger than a 4’ X 6’ closet, must have a Return Air grill; in exterior rooms, this must be a 11/2” wide continuous slot or 2’ X 2’ return grills as close as possible to the windows.  In concealed-spline ceilings and lay-in tile ceilings, Return Air grills shall be 2’ X 2’ minimum.

b.No rooms adjacent to the areas of the core that have main Return Air stubs or intake opening are allowed to have the walls that go slab-to-slab.  Additionally, communication, telephone, computer and data rooms are prohibited in these locations

c.If exterior room or interior room walls are slab-to-slab, the drywall may not go above the ceiling on the door side.  Alternatively, a Return Air opening from the room ceiling plenum to the common ceiling plenum shall be provided.  The opening shall be sized at no more than 300 fpm return air velocity.  Where an acoustical boot is required at the Return Air opening, size the boot at no more than 0.01” wg pressure loss.

17.Mechanical Air Conditioning Specifications: Demolition and Removal

1.All unused or abandoned ductwork and piping within the tenant remodel areas shall be removed back to the next tap upstream and blanked off or capped.  Use sheet metal screws to secure cap and duct sealer, duct tape not allowed.  Unwanted fire dampers and other devices in re-used existing ductwork shall be removed and ductwork put back together and sealed airtight.

18.Ductwork: Shall Be Galvanized Sheet Metal, meeting ASTM 526 64T

1.All ducts shall be constructed and installed according to the latest “SMACNA” manual, or Chapter 10 of the Uniform Mechanical Code, whichever is the most stringent.  Ductwork downstream of terminals shall be 2” wg class.  Ductwork upstream of terminal units shall be 3” wg class.

2.Flexible ducts:

a.General:  Factory pre-insulated, spiral helix spring permanently bonded to an interior liner and sheathed in an exterior vapor barrier-jacket

a.Thermal Rating:  R4 minimum

b.Fire Rating:  U.L. 181, Class I.

b.Low Pressure Type:  Thermaflex M-KA, Johns Manville Micro-Aire J/FLX SL, Owens-Corning fiberglass Valuflex, CertainTeed flexible air duct, or Casco flex.

a.Rating:  Up to 1-1/2” w. g. positive or 1/2” w. g. negative pressure, 2,500 FPM maximum velocity.

b.Application:  Final connection to diffusers or grilles.

c.Maximum Length:  Not to exceed 7 feet.

c.High-Pressure Type:  Johns Manville Micro-Aire J/FLX SL with high-pressure attachments; CertainTeed, Certaflex or Thermaflex M-KC.

a.Rating:  Up to 6” w. g. positive or 1-1/2” w. g . negative pressure, 4,000 FPM maximum velocity

b.Application:  Upstream connections to air terminal units.

c.Maximum Length:  Not to exceed 5 feet.

3.Elbows for ducts with a width of 12 inches and less shall be radius type with the throat radius equal to the duct width.

4.Ductwork Accessories:

a.Hardware:  Ventlok or equal.

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b.Access Doors and Panels:

c.Large Doors:  Fabricate per SMACNA details for double wall insulated type where used in insulated systems; single wall type in non-insulated systems.

d.Small Doors or Panels:  Same as for large doors or Ventlok, Air Balance, Inc., or United Sheet Metal pre-manufactured type with transparent vision element.

e.Duct Tape:  Not allowed.

f.Duct Sealant:  Tuff-Bond No. 12, United McGill Corporation “Uni-Grip” duct sealant, or equal.

g.Flexible Connectors:  Neoprene coated glass fabric having flame spread rating of 20 and smoke development rating of 40.  Ventglas-LA or equal.  Minimum clearance 2” between metal parts.

5.Duct Materials:

a.Ductwork:  Galvanized sheet steel.  Use of rigid fiberglass duct is strictly prohibited.  Do not submit for approval.

b.Bracings, Angles, Bars and Straps:  Galvanized steel.

c.Screws and Bolts:  Cadmium plated.

d.Round Ductwork and Fittings:  Spiral or seam welded construction, manufactured by United Sheet Metal, Peabody and Wind, Spiromatic, or approved equal.

e.Corrugated, Flexible Metal Duct:  Strictly prohibited.

19.Miscellaneous HVAC Specifications

1.All duct tape to be removed from joints and connections on existing ducts, Tuff-Bond No. 12, United McGill Corporation “Uni-Grip” duct sealant, Teledyne-105, or equivalent to be used in lieu of said duct tape, except on duct troffers connections.

2.On existing ductwork, all joints are to be inspected and sealed with specified duct sealant if there is any indication of a leak.  Existing high-pressure access doors at the mechanical shafts to have new seals installed if existing are leaking.

3.All hangers shot to the slab above are to be one piece construction forming a trapeze to support the duct and screwed to the duct and sealed.  Hanger wires may be used to support the duct if two 12 GA. wires with clips are shot to slab and attached to each side of the duct with standard hanger straps.

4.Where metal ducts are touching, insulation shall be placed between the ducts to insure against vibration and noise.

5.Where flex duct joins the metal duct, spin-ins, or other metal fittings, these ducts shall be screwed, banded and sealed with Air-Bol, Teledyne-105 or equivalent.  Nylon bands not allowed.  Spin-ins allowed on 2” wg class ducts only.

6.Where flex duct is hung, a larger piece of metal shall be used as a sleeve between the flex duct and the hanger strap to insure against collapsing of the flex duct.

7.Two pieces of flex duct joined together is not acceptable.

8.All ductwork is to be supported independently with hangers’ shot to the slab above, and no ductwork is to be supported from another duct, conduit, pipe, or other handy piece of equipment.

9.Room thermostats to be Johnson T4002-201, two pipe, direct acting fully proportional type, and equipped with concealed set point covers.  Where 1-pipe stats were used reused mixing boxes must be converted from 1 pipe to 2-pipe operation.

10.All a/c zone control boxes must be controlled in the NORMALLY CLOSED position.

11.Controls contractor shall submit a control drawing for approval.  All pneumatic control lines on the floor must be connected as per the approved control drawing.

12.Thomas Properties Group, LLC to be notified of any variance from the plans prior to construction.  Any variance from the plans are to be clearly and accurately noted on a plan and to be given to the Chief Engineer upon job completion this drawing to be marked “as-built”.

13.For tenant auxiliary air conditioning, use air-cooled condensers or dry coolers with circulating pumps, located in mechanical equipment rooms.  Locating air-cooled condensers in ceiling space of tenant floors is not allowed.

14.All conference rooms shall have their own zone and thermostat.

15.Manual dampers with handles are to be provided in all supply ducts before attaching flex duct to air troffers.

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16.No combustible materials are allowed in ceiling return air plenums as per code.

17.All supply ductwork in the ceiling plenum area is to be insulated with 2” glass fiber flexible blanket insulation with vapor barrier facing of UL rated aluminum foil scrim Kraft.  Insulation 0.75 PCF, J. M. “Microlite”.

18.Pipe insulation is required on all chilled water; hot water and condensate drain piping.  1” thick glass fiber heavy density sectional pipe insulation with factory applied all-purpose vapor barrier jacket or equal must be used.

19.Sufficient clearance must be left in front of all window induction air units to allow for periodic maintenance and repairs of the equipment.

20.Linear Diffusers

1.Ceiling supply diffusers (LD): Titus Series ML-38.  Frame to match ceiling.

2.Ceiling return: to match supply.  Every room must have a return grille and a return air path.  Acoustic boots, where required, shall be low velocity (300 fpm maximum) and low pressure drop 0.03” wg.

21.Return Air Exhaust Fan

1.Penn inline model TDA’s Zephyr’s with speed control and timer.

22.Auxiliary Air Conditioning Units

1.The Landlord prior to any work being started must specifically approve the use of auxiliary air conditioning units in tenant spaces.

2.Auxiliary air conditioning units must be electrically sub-metered with a meter installed in the main electrical room.

3.Tenant must maintain auxiliary air conditioning units at tenant’s expense with a service contract through a LA CITY Licensed HVAC contractor.

4.Auxiliary HVAC units must have an access panel large enough for the routine service (such as filter and belt replacement) and removable access to drop the unit down per code.

5.All ceiling hung auxiliary air conditioning units are to be provided with separate secondary condensate pans, larger than air handler unit itself, suspended independently of the air handler.  Air handler drain to drain into an indirect waste line with condensate piping sized per code and with insulation.  Secondary pan drain to spill to visible location.

6.Cabinet:  Cabinet shall be horizontal console type fabricated of continuous galvanized steel and finished with paint.  All panels shall be insulated with 1” neoprene coated glass fiber insulation.  Discharge angle shall be equipped with duct collar.  Back panel shall have a 2” filter frame with bottom filter across and be complete with duct collar.

7.Fans:  Fans shall be DWDI, forward curved, centrifugal type dynamically balanced and mounted on solid steel fan shaft.  Shaft bearings to be grease able from the exterior of the cabinet.

8.Coils:  Coils shall be of the extended surface plate fin and staggered tube type construction of 1/2” OD seamless copper tubing and rippled aluminum fins.

9.Drain Pan:  Drain pan shall be fabricated of continuous galvanized steel, insulated with closed cell insulation.

10.Motor and Drive:  Motor mount shall be a hinged type for simple belt tension adjustment and be securely fastened to unit frame.  Motor to be supplied with ball bearings.

11.Supply air and return Air Smoke Detectors are required for all fan coil units.  All air handling devices must have automatic controls connected to the Fire Life Safety system to enable automatic shut off upon any floor alarm.  (See Fire Alarm Section.)

12.Auxiliary air conditioning units to have vibration isolators and seismic restraints.

13.Do not locate return grilles close to auxiliary air-conditioning units.

23.Air Terminal Units (VAV Boxes)

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1.The noise criteria (NC) ratings shall not be more than NC35.  The units shall be capable of 100% shutoff.

2.Furnish and install Titus ESV-3000 or Tempmaster single duct, variable volume air distribution assemblies with attenuates and normally closed action.  Velocity controllers shall be Stafa Controls VCV 2500-300 controllers.  No reversing relays on normally open boxes will be excepted.

3.The assemblies shall be pressure independent and shall operate between zero and the maximum catalogued CFM, at an inlet velocity of 2000 FPM, the differential static pressure for any size shall not exceed 0.15” WG for the basic assembly or .25” with factory furnished attenuates.

4.All VAV boxes must operate NORMALLY CLOSED.

5.All VAV boxes flexible supply duets shall not exceed five (5) feet in length and shall be one size larger than box inlet size.  Provide three diameters length of rigid straight duct; same size as box inlet size at box inlet.  Provide concentric reducer between flexible duct and rigid duct.

24.Testing and Balancing Air Distribution Systems

1.Contractor shall procure the services of an independent air balance and testing agency, which is a member of the Associated Air Balance Council, to balance, adjust, and test all equipment, relating to the air distribution and exhaust systems.

2.Perform testing and balancing in accordance with AABC National standards for field measurement and instrumentation.

3.Balance and testing shall not begin until systems have been completed and is in full working order.

4.Compile test data upon completion, and submit one copy of complete test data to contractor for forwarding to Office of the Building for approval.

5.Air Balancing:  Perform following test, and balancing system in accordance with following requirements:

a.Adjust all main supply and return air ducts to design CFM.

b.Adjust all zones to design CFM, supply and return.

c.Test and adjust each diffuser, grill, and register to within 5% of design requirements.

d.Modify, as needed any existing boxes for 0 minimum air, including blanking of minimum air values as needed.

6.Air balance reports are to be in the Chief Engineer’s office within 10 days after job completion.

25.Piping Materials

1.Condense Drain:  Type “M” hard drawn copper tubing with wrought copper fittings.

2.Hot & Cold Water:  Type “L” hard drawn copper tubing with wrought copper fittings.

3.Soil, Waste & Vent: No hub cast iron soil pipe and fittings.

4.Chilled Water or condenser water:  Type “L” hard drawn copper tubing with wrought copper fittings.

5.Do not connect tenant chilled water piping to building chilled water system.  Tenant hot water reheat coil piping may be connected to building hot water system only upon Landlord approval.

26.Valves

1.Ball Valves – 21/2” and Smaller:  Nibco T-580-M bronze ball value, screwed.

2.Abandoned plumbing must be removed back to the source or to where it enters the area under construction and capped.

3.Check Valves - 2” and Smaller:  Nibco T413-Y bronze swing check, screwed.

27.Piping Specialties

1.Strainers:  Muessco #11 for 2” and smaller, Muessco #751 and #752 for 21/2” and larger, Sarco, Bailey, Zurn, Armstrong or Muessco.

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28.Fire Sprinkler System

1.ARCO Plaza has had its basic fire fighting water supply system upgraded to conform to current retrofit codes.  These systems were completed in 1989.

29.Fire Extinguisher

1.2A/40 BC rated Dry Chemical or Halon, UL Listed and rechargeable.

2.Fire extinguisher enclosures to be semi-recessed or recessed.

30.Plumbing

1.Drinking Fountains – If drinking fountains are to be used on a floor, they must be HAWS Model # 1118 handicap drinking fountains.

2.All Plumbing fixtures installed in the building must comply with all WATER CONSERVATION REGULATIONS.

31.Freight Elevators

1.All material stocking or demo removal must be coordinate between contractor and the Building Office.

2.Freight elevator lobby doors should not be blocked at any time nor should combustibles be stored in the lobby.

3.All large deliveries that require the use of the freight elevator (such as carpet, drywall, studs, furniture, etc.) must be delivered and moved after hours.

4.Contractor is responsible for placing “Walk-off carpet mats”, keeping them wetted, in the freight elevator lobby to prevent the tracking of drywall dust in the freights and throughout other areas of the building.

5.Contractor is responsible for cleaning up the loading dock in the area where contractor is doing any work or is loading or disposing of miscellaneous materials.

32.Demolition and Corridor Protection

1.Contractor to coordinate with the Office of the Building on the building requirements for demolition procedures.

2.Contractor to coordinate through the Office of the Building for trash removal and containers.

3.All deemed materials remain the property of the Owner.  The contractor shall provide for removal of all items or building reserves the right to keep any deemed material, such as, but not limited to, aluminum, phone and electrical wire, lead sheeting, etc.

4.Deliver to the Owner’s designated location such items as may be salvageable.

5.Carpet floors are to be lined with fire retardant poly and then Masonite is to be installed on all public corridor carpets from the freight elevator lobby to construction entrance points.  The sheets of Masonite are to be taped together, stopping their movement.  Floor to the restrooms must be covered.

6.Walls of public corridors are to the covered with fire retardant poly taped from top to bottom.

7.Freight elevator lobby entrance doors are to be covered with Masonite.

8.A tall corridor and change in direction of the walls and corners shall be protected with poly and Masonite.

9.No Materials, tools or carts are to be stored in any public corridor, passenger elevator lobby or freight elevator lobby at any time.

10.All public corridors, passenger elevators and freight elevator lobbies must be kept clean at all times.

11.Contractor to supply fire extinguishers on job site while construction is in progress.

12.When doing a complete demo, caution must be taken not to demo the existing Fire/Life Safety System devices or their conduits.

13.Contractor to notify Chief Engineer 24 hours prior to commencement of demo, so return air filters can be installed and smoke detectors can be disabled.

14.When a full floor is to be deemed, all passenger elevators are to be sealed with fire retardant poly and Mansonite.

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15.Passenger elevators are not permitted to be used for access to or from construction floors.  If any construction workers or personnel use the passenger elevators for transportation of materials, said contractor will be banned from the Building until such time as the Owner may decide.

16.Stairwell doors are not to be blocked open nor the operation of the magnetic door releases inhibited in any way.

17.Prior to any demolition within your suite, please notify the Office of the Building so an all clear can be granted if hazardous materials are present, i.e., lighting ballasts, asbestos, lead.

33.Plans

1.At the completion of the project, provide to the Office of the Building, two (2) complete sets of blue line as-built drawings and one (1) complete set of AutoCAD .dwg (release 13 or higher) as-built files, of architectural, specifications and engineered plans.

END OF SECTION

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SCHEDULE 3 TO EXHIBIT C

INTENTIONALLY DELETED

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SCHEDULE 4 TO EXHIBIT C

APPROVED CONTRACTORS

Environmental Contracting Corp.

Illig Construction

Swinerton & Walberg

Turner Construction Co.

Innerspace Construction

McCarthy Construction

Webcor Construction

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SCHEDULE 5 TO EXHIBIT C

CONSTRUCTION RULES

1.Prior to Start of Construction

(a)Provide the Office of the Building with drawings as required by the Work Letter.  Prints to include the following plans, as applicable:

(i)DEMOLITION

(ii)CONSTRUCTION

(iii)ELECTRICAL

(iv)PLUMBING

(v)HVAC

(vi)REFLECTED CEILING

(vii)FINISH

(viii)CABINET ELEVATIONS AND SECTIONS

(ix)FIRE SPRINKLERS

(x)FIRE & LIFE SAFETY SYSTEMS

(xi)OTHER

(b)Construction “Kick-Off Meeting” with tenant, general contractor, building staff and key sub-contractors, no less than five (5) working days prior to start of construction, to review the following:

(i)Review approved plans, work letter, building standards and building construction regulations.

(ii)Receive list of sub-contractors, foreman of job and telephone numbers.

(iii)Receive start date and work schedule.

(iv)Receive a delivery schedule of materials.

(v)Discuss the protection of common corridors and elevators.

(vi)Receive CERTIFICATE OF INSURANCE from general contractor and all subcontractors naming additionally insured as follows:  TPG Plaza Investments, LLC as Owner, Thomas Properties Group, and California State Teachers’ Retirement System (without this correctly completed certificate, no site presence is allowed).

(vii)Provide a copy of the construction permit.

2.During Construction

(a)At start of construction, provide walk-off mats at entrance to construction area as well as entrance to all elevators & in all other area’s where tracking of dirt & dust is possible.  Mats shall be kept damp at all times.  Footprint clean ups will be back charged to the contractor.

(b)Job foreman to contact Chief Engineer/Locksmith at the start of construction for instructions on the building key and hardware schedule.

(c)Debris boxes/roll-off bins may be delivered only after permission from Building Manager or Dockmaster.

(d)All material delivery/debris removal will be made at the loading dock through the Dock Manager as expeditiously as possible.

(e)Any work involving any exposure or possible exposure to asbestos must be coordinated and approved through the Building Construction Manager and in accordance with the building asbestos procedures, prior to starting.

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(f)Isolate the construction site from the adjacent occupied areas.  You may use fire retardant plastic, drywall or Masonite as conditions indicate or allow.  The objective is to prevent dust from entering other tenant occupied areas.

(g)All work is to be performed in accordance with all applicable city, county, state and federal laws, regulations and codes and to building standards and restrictions.

(h)Any materials, tools, boxes, equipment, etc., are subject to inspection by Security when entering and being removed from specific areas within the facility.

(i)The Owner reserves the right to inspect the job site at any time.

(j)The Owner must approve any changes from the originally approved working drawings.  Drawings must be submitted as required.

(k)The Owner with Contractor will conduct periodic progress walk-through.

(l)All lighting ballasts removed form the building must be disposed of as hazardous materials unless they are marked “This ballast does not contain PCB’s.”

(m)All lighting fluorescent lamps removed from the building must be disposed of as hazardous materials.

3.General Building Rules

(a)Smoking is not permitted at the Project, this includes the job-site.

(b)Roof hatches in freight elevators will not be opened without prior approval from the Office of the Building and the cost for elevator mechanics assistance shall be borne by the tenant/Contractor.

(c)All work requiring an open flame, cutting, welding, sawing, spark producing or any other work that could possibly set off a fire alarm must be coordinated through security dispatch located on “D” level.  Some of the fire alarm systems on your construction floor must be taken out of service and the contractor will be required to act as a fire watch during the time when the alarms are offline.  The contractor must go to security dispatch on “D” level and sign a logbook to remove the fire alarms from service.  The contractor is required to promptly return to security dispatch and sign the logbook at the completion of its work so the engineers can put the system back into service.

(d)All heating, ventilation and air conditioning controls to be building standard.  The Building Management Office must approve any variation.

(e)All hardware is to be building standard.  The Building Management Office must approve any variation.

(f)All electrical panel labeling is to be performed in accordance to acceptable industry standards.  Exterior plastic labels with 1/2” high letter shall be provided.  Interior circuit I.D. cards shall be typewritten.  Existing I.D. Cards are not to be removed from the building.

(g)All fluorescent light tubes must be F-34, warm white, supersavers, with two (2) tubes per fixture if existing fixtures are reused or (3) tubes per fixture on all new fixtures.  T-8 lighting is acceptable, however, all ballets must be magnetic, or Howard Electronic #EL-323-IS-277, EL-332-IS-277 or EL-432-IS-277.

(h)All oil base painting, staining and other similar odor producing applications must be done after Business Hours.  The contractor will schedule all such work with the Office of the Building no less than 3 working days prior to the date the scheduled work is to take place.  Prior to the start of this work, the contractor must provide the building construction department with a copy of the material safety data sheets (MSDS) for all chemicals, paints, solvents, glues or any other products that will be used for this job.

(i)Workmen are to use freight elevators only.  No material deliveries are to be done via passenger elevators.

(j)Construction sites are to be kept clean and free of debris.

(k)All major demolition is to be done after normal building working hours.

(l)Any work requiring entry into another tenant’s suite must be coordinated through the Building Management Office.

(m)Any work causing offensive odors, dust, or noise, must be done after normal operating hours.

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4.At Completion of Construction

(a)Clean inside of all exterior windows.

(b)Clean inside and outside of all light fixtures and lenses.

(c)Completely rebalance heating, ventilation and air conditioning systems.  Provide written balance report to the Building Management Office.

(d)Clean and vacuum lint screen and coil of perimeter air handler (induction units).

(e)Provide two (2) full size sets of as-built prints and one (1) set of Mylar as built reproducible to be forwarded to the Building Management Office.

(f)Contractor is responsible for cleaning, reworking, repairing, and re-hanging all existing window coverings in the construction area.

(g)Job superintendent to walk the completed construction with the Building Construction Manager and tenant and Owner, and tenant and Owner will produce a deficiency list.

(h)Contractor to complete all deficiencies item on list and request re-confirmation.

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CONTRACTOR RULES & REGULATIONS

(CONTRACTOR TO POST SIGNED-OFF COPY OF THIS IN ITS ENTIRETY IN THE SUITE/AREA UNDER CONSTRUCTION)

Owner:  TPG Plaza Investments, LLC

Project:

Property Manager:  Thomas Properties Group

Suite/Work Location:

The General Contractor/Contractor/Vendor/Supplier (“Contractor”) must assemble and submit prior to obtaining building permits when required and commencing construction, the following for review by Owner:

a.Certificate of Insurance naming Thomas Properties Group in addition to the Owner above (general liability & workman’s compensation).

b.List of Trades and corresponding subcontractors.

c.Schedule of construction.

d.Complete and current set of the approved construction/contract documents.

e.Building Permits and other Governmental clearances.

f.Name and Emergency telephone number(s) of the responsible Project Manager for the project.

g.Foreman/Field Superintendent’s home phone and pager number.

Contractor shall advise all subcontractors, suppliers, etc., of the following building rules and regulations concerning their proper conduct within the building.  It is the Contractor’s responsibility to ensure everyone reads and understands these rules and regulations.  Ignorance of it is not a waiver of liability or responsibility.  Failure to comply with any of these rules may result in your contract being canceled, your people being asked to leave the job site and/or fines given to the Contractor.  The Contractor is ultimately responsible for the conduct of its subcontractors, suppliers, employees, etc.

1.No one shall be allowed to endanger the Project or Building, its premises or its occupants in any manner whatsoever.  If such a situation occurs, the Contractor, Subcontractor, Supplier, etc. shall immediately take steps to correct and eliminate the hazardous condition.  In the event that the Contractor’s personnel fail to perform in a satisfactory manner, the Owner reserves the right to immediately take steps to remedy the hazard at the Contractor’s expense.  All work shall be performed after normal business hours of 6:00 AM to 6:00 PM unless approved in advanced by the Building Management Office.

2.In the event that the building is equipped with a freight elevator to serve all floors, all Contractors and Contractor personnel are to use only the freight elevator for transportation of men, materials and equipment.  No personnel or equipment are permitted within the finished passenger cabs (unless written permission is given); these are reserved for occupants of the Project or Buildings and their guests.  If any Contractor personnel are found in the passenger cars with tool belts, material, equipment or tool chests, the elevators will be immediately inspected for damage and Contractor shall be required to repair such damage.  The individual may be required to leave the site.

3.All Contractors and all personnel shall enter and exit through the loading dock at all times or other locations as determined by Building Property Management.  All Contractors shall sign in at the Security Desk located in the lobby upon entering the Building.

4.All deliveries are to be accepted, moved and delivered to the work area by 6:00 a.m.  When accepting deliveries, masonite must be laid to protect floor finishes.  It is the Contractor’s responsibility to keep public areas clean at all times.

5.All material deliveries shall be made at the loading/service dock.  Contractor, where applicable, shall coordinate any and all deliveries with the Building Management Office.  Contact Security if you have any concerns regarding the size of the vehicle.  Material will be brought through the loading dock to the freight elevator.  Hazardous material is not allowed on site, without prior written notification of type and quantity and authorization by the Building Management Office.  All deliveries consisting of bulk material must be made between the hours of 6:00 p.m. and 6:00 a.m., and must be scheduled with the Building Management Office.  If deliveries are to be made at other times, approval must be obtained from the Building Management Office.  At no time will material be transported through the building lobby or public areas unless specifically authorized in writing.

6.All construction waste and debris shall be removed via the freight elevator to the loading dock.  Construction waste and debris shall only be removed between the hours of 6:00 p.m. to 6:00 a.m.  No construction waste or debris may be placed in the building dumpster/compactor.  The Contractor will provide for removal of waste and debris from the building at its own expense.  If a dumpster is required (space allowing), the location shall be authorized by Building Management office.  The Contractor will keep the loading dock free from debris.

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7.Construction personnel shall, at all times, maintain the highest level of project cleanliness.  All construction debris shall be removed through the service elevator on a daily basis and shall never be allowed to produce a fire hazard.  In the event that the Contractor fails or refuses to keep the demised premises free of accumulated waste, the Building Management Office reserves the right to enter said premises and remove the debris at the Contractor’s expense.  In addition, all public areas, i.e., corridors, restrooms, janitor’s closets, etc. shall be maintained and kept free of construction debris, dust, etc.  Contractor shall provide moistened walk-off mat at all exits from the construction site to the common corridor.  Any flammable or hazardous materials (i.e., paint) may only be stored on the premises with prior permission of the building management office that shall designate an area for such storage.

8.Pre-filters shall be installed over regular air filters on all return air openings on floors under construction.  Pre-filters will be replaced every 14 days.  If building filters or equipment requires replacement or cleaning due to construction dust, the Contractor will be charged.  Contractor will temporarily install filters in any demising firewall damper.  Contractor is to remove these filters at the end of the job, prior to final punch list walk.

9.All entrance and exit doors are to be kept closed to restrict the movement of dust, dirt, and noise.  Close off temporary openings with polyurethane.   Due to local fire codes, no openings may be made on an occupied floor to the corridor unless the premise is “firewatched.”  See Nos. 15 and 16 for firewatch procedures and penalties.  All corridor doors must remain closed unless materials are being delivered to the construction site.  All HVAC filters in fan rooms shall also be delivered in operable condition at time of completion (thus a temporary filter should be added to the existing filter).

10.Specific Restrooms will be designated for Contractor use.  Anyone found using Restrooms (other than those specified), or janitorial closets, will be subject to dismissal.  Said restroom, any/all sinks and/or drinking fountains will NOT be used for disposing of anything or washing of anything.  Contractor will be fined $300.00 per offense, and the person will be asked to leave the project.  No one is permitted to use the janitorial closets without management’s permission.  Upon completion of each Owner improvement, the Contractor will be responsible for restoring the facility to its original state.

INITIAL

11.All corrective work or work performed in occupied spaces at any time must be scheduled and approved by the Building Management Office and must be immediately cleaned up by the workmen prior to their leaving the job or at the end of the business day if the project is on-going.  The Contractor shall be responsible for all costs incurred by the Building Management Office if this clean-up work is not performed satisfactorily.

12.All traffic control, flagmen, barricades, etc., as may be necessary or required by any agency having jurisdiction, shall be the sole responsibility of and at the expense of Contractor.

13.All Contractors are to take precautions to prevent the accidental tripping of the fire alarm system.  False alarms shall be fined to the Contractor at $ 300.00 each offense.

INITIAL

14.No gasoline-operated devices, i.e., concrete saws, coring machines, welding machines, etc., shall be permitted within the Project and Building premises.  All work requiring such devices shall be by means of electrically operated substitutes.

15.All welding equipment (gas and oxygen canisters), will be pre-approved by Building Management Office, and shall be properly chained and supported to eliminate all potential hazards.  Welding will only be done with a qualified, properly equipped firewatch present.  Violation of this will result in a $1,000.00 fine to Contractor.  All area around any welding will be protected from spark.  Contractor is to notify Building Management Office 24 hours in advance to any welding.  At the completion of use, said containers shall be removed from the building.

INITIAL

16.Please contact the Building Management Office 24 hours in advance to schedule work on the following building systems:  (Any disruption of services will be scheduled at the Building Management Office’s discretion.)

(a)Domestic water.

(b)Fire Life Safety System (alarm, speaker, or strobe) installation, tie-ins or testing.  All FLS final ties-ins will be done by Building Owners approved FLS contractor at Contractors expense.  Twenty-four hours notice to the Building Management Office is required.  Testing will be done between 6:00 pm and 6:00 am.

(c)Electrical tie-ins to base building or the addition of equipment to any area other than the Owner suite except sub panels located within the Owner premises.

(d)Sprinkler system.

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(e)Telecommunication and Satellite Dish.

(f)Any work that will take place outside the demised space (i.e., floor coring, electrical, etc.) requires 48 hours advance notice.

(g)Any tie-ins that may affect other spaces.

(h)Noise or odor producing work.

Note:  If a utility or building alarm is to be turned off for Contractor’s work, Contractor must notify the Building Management Office so security can disarm the system.  Any system that is turned off will need a person to stand guard as firewatch.  If it is discovered that a firewatch is not posted, the Building Management Office will post a security guard at market rate around the clock.  Said expense will be deducted from the Contractors contract along with a $1,000.00 penalty.

INITIAL

17.Construction personnel are not permitted to block open any entry door, stairway doors and electrical room doors.  These doors provide the fire protection required by code.  Continued violation of this provision shall be subject to a $200.00 fine and/or removal of subcontractor from site.  Janitorial doors shall be kept closed at all times on occupied floors.

INITIAL

18.Contractors shall provide and keep available the required amount, based upon square footage, of fire extinguishers, within the demised premises during construction.

19.Contractor/Subcontractor shall inaugurate and maintain an accident prevention program and an employee safety-training program.

20.All employees on the job, regardless of whose direct payroll they are on, shall be required to respond to safety and emergency (i.e., evacuation) instructions, including alarms, from the Contractor’s supervision.  Persons who do not respond shall be removed from the job.

21.Respect must be shown to the Building Tenants and personnel at all times.  Rude and obscene behavior, including foul and abusive language, will not be tolerated.  All clothing will be appropriate and non-offensive.  Offenders will be asked to remove themselves from the premises and shall not be permitted to return.

22.Any persons not on the approved Contractor list will be denied access to the property - no exceptions.  All Contractors, vendors, employees, guests, invitees, agents, etc., must sign in with Security at their desk in the main lobby.

23.All workers are required, when and where applicable, to wear on their person the Building Management Office approved vendor badges.  These badges can be checked out on a daily basis from the Building Management Office.  Contractor will be charged $25.00 for each badge not returned from his trades.

24.No tobacco smoking or chewing will be permitted in the building.

25.No radios or other sound producing equipment will be permitted in the building or parking structure.

INITIAL

26.“Wet Paint” signs must be posted in all public areas when appropriate.

27.All exterior/site and interior common areas, near or adjacent to Construction area(s), shall be protected from all damage during the course of construction.  The Contractor shall erect barriers and take other practical measures to assure protection of these areas.  Areas to protect include, but are not limited to:

(a)Paved parking areas, sidewalks, planters, or landscaping.

(b)Building shell surfaces, building entries/exits, building systems service rooms.

(c)Building lobby, corridors, elevators, elevator lobbies, and stairways.

(d)Building toilet facilities, telephone access rooms, signage/directories.

Soiled surfaces and/or damages occurring as a result of negligence or carelessness, on part of construction personnel, shall be immediately remedied or returned to it’s original condition at the Contractor’s sole expense.

28.Contractor shall provide temporary electrical devices within the demised premises for their Subcontractor’s use.  Contractor will not be permitted to run extension cords through public space (i.e., across corridors) on occupied floors or through occupied spaces.

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29.The Contractor shall use reasonable measures to minimize energy consumption in the construction area when possible.  The Building shall pay for normal electrical consumption during the construction process.  All lights and equipment must be extinguished at the end of the Contractor’s business day.  In the event that the Contractor continues to leave lights and equipment on during off-hours, the Building Management Office reserves the right to receive just compensation for excessive electrical consumption.

30.Loading Dock parking will only be used for temporary loading or unloading of equipment and supplies.  Any vehicles found in unauthorized spaces will be subject to posted parking rates/regulations.

31.No Contractor shall be allowed to start any work at the Project or in any Building without having a current Certificate of Insurance on file with the Building Management Office.  Contractor must keep current insurance certificates on all Subcontractors.  Any Contractor or Subcontractor performing work without a current insurance certificate will be immediately ordered off the premises.  Contractors shall list the following, in addition to the building owner as additionally insured:  It’s agents, employees, partners, and shareholders.

32.Contractor/Subcontractor shall obtain and pay for a City Business License, if required.

33.The Contractor/Subcontractor shall obtain at its own expense, all permits and licenses necessary to perform the work and shall comply with all laws, ordinances, and regulations of the state and federal government, and/or of any agency, board or commission or other duly qualified body.

34.All work shall be performed in accordance with all applicable laws and the rules and regulations of all City, State and Federal agencies having jurisdiction over the work.

35.Loading Dock doors may only be opened for delivery of material after hours, otherwise, the dock doors will be locked down.

36.The Owner and/or the Building Management Office reserves the right to inspect work, stop work and/or have a worker removed from the job at any time during the contract.

37.No work is to be performed, nor materials stored in any area other than the premises under construction without prior written authorization.  Any material found in any location, other than the premises under construction, will be confiscated and disposed (this includes electrical and telephone rooms).  No staging of trucks or materials will be allowed in areas, which may affect traffic flow to the adjoining properties.

38.Ceiling spaces shall be left clear of all debris.  No debris, equipment, or materials shall be allowed to rest on the ceiling grid or tiles.  Contractor shall inspect for and remove any debris found on the ceiling grid or tiles.  This shall include residual ceiling tiles or cuttings.

39.Access to the roof and electrical rooms of the building shall be permitted only with prior consent of the Building Management Office.

40.Any penetrations of the drywall below or above the ceiling shall be patched in such a manner as to maintain the fire rating of the wall and to leave no opening.  Any penetration through fire rated areas must be sealed with an approved fire rated sealant and conduit intended for that application.

41.All space above the ceiling is an HVAC return air plenum.  As such, PVC and other flammable material that does not display a factory label stating an intended use in such an area or an acceptable flame/smoke rating shall not be installed in that space.  Therefore, only plenum rated wire or cabling will be allowed in this area.  Rating must be factory stamped and must read “CMP 4 with 100% FEP wire insulation” or equivalent on the insulation jacket.  The only acceptable alternative is to provide EMT conduit and encase the non-rated cable within.

42.Exposed plenum rated cabling shall not rest on ceiling tile, fire sprinkler lines, ductwork, VAV boxes, air conditioning units, or electrical conduit.  Subject cabling shall be supported from the deck above by properly anchored hangers.  Under no circumstances will cabling run through dampers.  Cabling shall not penetrate rated walls without conduit enclosure and rated caulking or approved fire block.

43.All equipment or conduit in the ceiling spaces that can be viewed through a return air grill shall be painted flat black.  Ensure all HVAC controls are properly masked off during texturing and painting.

44.Service access to existing equipment shall not be hampered or obstructed by added equipment or newly constructed numbers.

45.Contractor is responsible for implementing Indoor Air Quality (IAQ) as set forth by the Building Management Office.  All return air to the building air system shall be covered with proper filter media prior to any construction and removed after all construction is completed.

46.Building Management’s selected roofing contractor shall seal all roof penetrations.  Contractor shall remain responsible for watertight integrity of any penetration until sealed.

47.EMT conduit is not to contact or to be supported by HVAC units, dusts, or piping.

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48.If hazardous material or dangerous conditions are suspected, the Contractor is required to advise the Building Management Office before disturbing the subject material.

49.Should there be a need to deviate from any of the regulations contained in this document, only the Building Management office is authorized to allow such changes.

50.All Contractors working over the weekend and after the normal hours shall provide the building management office a list of workers 24 hours prior to any workers being on site or they will be denied access.  The list should also include an estimated time the Contractors will be working, the location of the work to be done, the number of employees and the working Supervisor who will be present in the building during the performance of the work.

51.Rubber, non-marking wheels are required on all vehicles transporting materials in the Building or floors shall be protected.  Said wheels and vehicles will be kept clean and free of debris that could be tracked onto common areas.

52.The Contractor will be required to furnish the building management office with a list of Subcontractors prior to commencement of the job.  This list will include phone numbers and contacts for each Contractor/Subcontractor, including home and emergency telephone numbers.

Corporate Officer	Home/Emergency Phone No.
General Superintendent		Home/Emergency Phone No.
Project Superintendent		Home/Emergency Phone No.

53.Contractor and Subcontractor are not allowed to smoke, eat, or drink in the premises under construction or in any part of the building, unless written permission is given.  Contractor shall not bother or remove any personal items from the Tenant’s desk, furniture, etc., unless instructed by the Building Management Office.  Contractor shall not enter into any Tenant’s refrigerator or use any appliances such as microwave ovens, toasters, coffee machines, etc., nor should they consume any food or beverage that is the property of the Tenant.

54.The Contractor, or his agent, shall provide safety barricades or cables at floor penetrations.  Such penetrations will be firewatched as described in No. 15.

55.Any existing vertical and/or horizontal area separation is required to remain intact during construction.  If any separations are compromised and not immediately sealed, a fire watch will be required.  See Nos. 15 and 16 for firewatch procedures and penalties.

56.Contractor will exercise construction noise and abatement by the use of proper scheduling practices.  The peaceful enjoyment of existing, adjacent tenants and occupants (in premises above, below, or to the sides) shall not be disturbed as a result of the contractors work.  Noisy and odor producing work, (such as, but not limited to hammer or drilling, core drilling, shooting of studs, carpet tack strips, painting, wall covering, or other disturbances.), will only be allowed between the hours of 6:00 p.m. to 6:00 a.m., Monday through Friday.  All work of this nature must be selected twenty-four (24) hours in advance with the Building Management Office.  Contractor will be asked to leave if this is violated.

57.Prior to the commencement of work, this guideline must be initialed and signed by Contractor.

Signature: Date: .

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GENERAL INFORMATION

Company Name:

Address

City  State  Zip Code

Telephone Number
o                              Fax Number o

Ownership Structure (Please check one)

o  Sole Proprietorship  o  Partnership  o  Corporation  o  Joint Venture  o  Other:

Description of Service(s) Provided

Contractor’s License #

RESPONSIBLE CONTRACTOR STATUS (Refer to definitions on next page)

Please check one of the following boxes:

1. o  Meets all Responsible Contractor requirements

2. o  Meets none of the Responsible Contractor requirements

3. o  Meets certain of the Responsible Contractor requirements (provide explanation below)

If you have checked box 3 above, please provide an explanation below (attach additional pages if necessary):

Explanation:

OWNER’S CERTIFICATION OF RESPONSIBLE CONTRACTOR STATUS

On behalf of the above-named company, the undersigned certifies that the information and response provided therein are true, complete and accurate as of this date, and he/she is aware that any intentionally misrepresented or falsified information may result in disqualification from future contracting opportunities.

Signature	Date
Name (please print)	Title

This form was prepared for use in compliance with the Responsible Contractor Program Policy of the California State Teachers’ Retirement System (“CalSTRS”).

Any contractor or subcontractor with a minimum contract size of $25,000 should complete this form.

DEFINITIONS:

Responsible Contractor:A contractor or subcontractor who pays workers a fair wage and a fair benefit as evidenced by payroll and employee record.  “Fair Benefits” are defined as including, but not limited to, employer paid family health care coverage, pension benefits, and apprenticeship programs.  What constitutes a “fair wage” and “fair benefit” depends on the wages and benefits paid on comparable real estate projects based upon local market factors, that include the nature of the project (e.g., residential or commercial, public or private) comparable job or trade classification, and the scope and complexity of the services provided.

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PUBLIC CORRIDOR PROTECTION

It is a Project and Building requirement that all Contractors and their sub-contractors protect the Building and the Project when construction work is conducted on a specific floor.  The Building Management Office requires the Contractor to protect all public corridors and any and all other areas in the Project and all Buildings that are used by their sub-contractors.

Public Corridor Protection Requirements:

1.Full width, wet walk-off mats are to be placed in front of each freight elevator door and corridor exits from all construction areas.  The walk-off mats are to be cleaned daily and kept wet.

2.Carpet floors are to be lined with paper and then masonite is to be installed on all public corridor entrance points and to men’s bathrooms.  The sheets of masonite are to be taped together, stopping their movement.

3.Walls of public corridors are to be covered with fire retardant plastic, taped from top to bottom.

4.Freight elevator lobby entrance doors are to be covered with Masonite.

5.At all corridor/lobby changes in direction, the walls and corners shall be protected with Masonite and poly.

6.No materials, tools or carts are to be stored in any public corridor, passenger elevator lobbies or freight elevator lobbies at any time.

7.All public corridors, passenger elevators and freight elevator lobbies must be kept clean at times.

8.No fire exit stairwell doors shall be propped or shimmed open for any reason.

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LOADING DOCK & FREIGHT ELEVATORS RULES

Loading Dock hours:	Monday – Friday 5:00 a.m. – 9:00 p.m.
Freight Elevators hours:	Monday – Friday 6:00 a.m. – 6:00 p.m.

Requests for use of facilities outside of the above listed hours will be handled on a case by case basis.  As a reminder, any access to the building or use of the facilities, outside of normal operating hours (6 a.m. - - 6 p.m., Monday-Friday), will require submitting a request for after hours access/facility use.  Holiday schedule will be the same as the Sunday schedule.

The Building Management Office must receive all requests for access and facility use no later than 2:00 p.m. Office hours are 8:00 a.m. - 5:00 p.m., Monday through Friday.  All facility use requests will be handled on a first come, first serve basis.  You should follow up with the Loading Dock Manager to assure approval.

We require that any large deliveries such as furniture, drywall, ceiling tile, and floor tile deliveries at the loading dock not be made between the hours of 6:00 a.m. and 6:00 p.m.

DOCK RESTRICTIONS

1.Loading dock access restrictions are 13’ high and 40’ maximum length.

2.All vehicles will be given a one (1) hour time restriction for loading and unloading at all docking locations; any extension of time will be at the discretion of the Loading Dock Manager.

3.Extended docking privileges will be given only after the Building Management Office has granted written permission.

4.Moving vans under contract of office tenants will be scheduled in advance by the Loading Dock Manager to avoid congestion in the Loading Dock.

Moving vans, contractors and vendors must exercise extreme care so as to protect the Project’s common areas, work and service corridors.  Specifically, such companies are to provide protection for existing carpets and wall coverings in the public corridor between the freight elevators and the work area.  Carpets shall be completely covered with Masonite or similar material.  Moving vans, contractors and vendors shall be responsible for all damages resulting from any damages/work performed at the Project.

5.All delivery truck operators will leave ignition keys with loading dock personnel to enable every vehicle to be relocated by the Dock Jockey.

6.All delivery truck operators will be responsible to furnish their own dollies, carts, and man power to load and unload cargo and remove all pallets, cartons, shipping material from dock area.

7.We request that construction deliveries at the Loading Dock NOT be made between the hours of 10:00 a.m. and 2:00 p.m.

8.Loading and unloading on the Loading dock during normal business hours (6:00 a.m. to 5 p.m.) is restricted to one vehicle per company/vendor at a time up to one hour (unless prior written permission has been given by the Loading Dock Manager).

9.All deliveries, which require Dock parking in excess of one hour, must be scheduled between the hours of 6:00 p.m. and 6:00 a.m. and must be approved in writing by the Loading Dock Manager.

10.All correspondence and request for approval must be forwarded to the attention of the Loading Dock Manager.

11.No Motorcycle are allowed in the loading Dock

12.Anyone working in the building for a one (1) week period, or longer, must contact the Loading Dock Manager for a Project identification badge.

NOTE:DOCK PRIVILEGES MAY BE REVOKED FROM ANYONE NOT FOLLOWING THESE POLICIES.

If you have any questions, please call of the Office of the Building at (213) 485-9595.

Thomas Properties Group, LLC
Ellisa Irving	Temika Stewart
Property Manager	Loading Dock Manager
Plaza

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Gentlemen:

You have requested our approval for the performance of certain work in the Premises in the Building as shown on plans and specifications submitted by you.  We hereby consent to your proceeding with the work, subject to the following conditions:

1.All costs and expenses in connection with or arising out of the performance of the work shall be borne by you and all payments therefor shall be made by you promptly as they become due, and evidence of such payments shall be furnished to us on request.  At no time shall you do or permit anything to be done whereby the Project, the Building or the land upon which it is located may by subjected to any mechanic’s or other liens or encumbrances arising out of work, and our consent herein shall not be deemed to constitute any consent or permission to do anything which may create or be the basis of any such lien or charge.  You shall notify us in writing not less than ten (10) days prior to the commencement of any work in order to afford us an opportunity to post and record appropriate notices of non-responsibility with reference to all aspects of such work.  Prior to the commencement of any work, and from time to time during the work whenever requested by us, and promptly upon completion of work, by each original contractor and each sub-contractor, you will deliver to us waivers of mechanic’s liens duly executed by all contractors and all laborers or material men concerned with said work.  At any time so requested by us you will, at your expense, and as we require, provide and furnish to us either:  (a) surety company bond, or (b) court order discharging lien, or (c) other form of protection against any such liens or encumbrances which may be filed, or (d) secure the release and/or discharge of any claim alleged to constitute such lien or encumbrance, and will hold us harmless against the same.

2.All materials as well as methods and processes used in the performance of the work shall conform to the standards of the Project of the Building and you hereby assure us that each of your contractors is or will be entirely familiar with such requirements prior to commencement of any work.

3.You will perform this work in a safe and lawful manner, using only contractors approved by us, and complying with applicable laws and all regulations and requirements of municipal or other governmental or duly constituted bodies exercising authority, and this compliance shall include the filing of plans and other documents as required, and the procuring of any required licensor permits at your sole cost and expense.  You shall notify us in writing not less than ten(10) days prior to the commencement of any work as to name, telephone number and responsible party for each and every contractor and/or sub-contractor who is about to commence work.

4.You hereby indemnify and agree to defend and hold us harmless from and against any and all suits, claims, actions, loss, cost or expense (including claims for workmen’s compensation) based on personal injury or property damage caused in or contract claims (including but not limited to claims for breach of warranty) arising for the performance of this work by you, your employees, agents, servants, or contractors engaged by you; and you will repair or replace, or at our election, reimburse us for the cost of repairing or replacing, any portion of the Project or the Building or item of its equipment, or any of our real or personal property so damaged, lost or destroyed in the performance of this work.

5.Insurance.  During the entire term of this Agreement, Contractor shall maintain, at its sole cost and expense, insurance as set forth below with a licensed insurer qualified to conduct business in the state in which the property is located, with a minimum Best Rating of AVII or better, and otherwise reasonably acceptable to TPG Plaza Investments, LLC (“Owner”), and shall deliver to owner certificates of insurance in form satisfactory to Owner concurrently with the execution of this Agreement and shall deliver to Owner certificates of insurance or renewals thereof at least thirty (30) days before the expiration of any such policies.

(a)Commercial General Liability Insurance against bodily and personal injuries and death and property damage with a combined single limit of not less than *    per occurrence, *    general aggregate, *    products/completed operations aggregate, and *    personal injury and advertising injury, including contractual liability insurance specifically insuring the indemnifying portions of this Agreement, naming Owner and Thomas Properties Group as additional named insured (to the extent of the indemnification set forth in Section 9 hereof);

(b)Umbrella Liability Insurance in the amount of *    excess over the primary Comprehensive Liability Insurance of *    the following form endorsement naming Owner and Thomas Properties Group as additional named insured (to the extent of the indemnification set forth in Section 9 hereof);

(c)Worker’s Compensation Insurance in limits of not less than *    bodily injury by accident – each accident, $*    bodily injury by disease — each employee, and $*injury by disease – policy limit, and Employers Liability Insurance with limits of not less than $*

(d)Comprehensive Automobile Liability Insurance covering owned, non-owned and hired vehicles against personal and bodily injury and death and property damage with a combined single limit of not less than $*    per occurrence, naming Owner and Thomas Properties Group as additional named insured (to the extent of the indemnification set forth in Section 9 hereof);

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(e)Comprehensive Crime Bond in limits of not less than *    per occurrence covering all dishonest acts of servants, employees, agents and representatives of Contractor while performing services hereunder; and

(f)In the event that Contractor is to park motor vehicles as a part of the Services herein, Contractor shall continuously maintain Garage Keeper’s Legal Liability Insurance in an amount of not less than *   ) and Garage Liability Insurance in an amount not less than *    ) (plus the *    ) Umbrella Liability Insurance required above) naming Owner and Thomas Properties Group as additional named insured (to the extent of the indemnification set forth in Section 9 hereof) in both such policies, which insurance may be subject to a deductible provision not to exceed *    ? occurrence.

The certificates of insurance to be provided by Contractor pursuant to this Section 8 shall be endorsed to provide that such policies shall not be materially changed or cancelled until at least thirty (30) days prior notice thereof by Registered Mail is given to Owner.  Contractor agrees that the provisions set forth herein above and in Section 6 shall be imposed upon, assumed and performed by each of its subcontractors, if any.

6.Indemnification.  Contractor shall indemnify and save harmless Owner and Thomas Properties Group, and Owner’s and Thomas Properties Group’s officers, directors, shareholders, partners, agents, employees and contractors from and against any and all losses, expenses (including, without limitation, reasonable attorneys’ fees and costs), damages, costs, liabilities and claims asserted against or suffered by Owner or Thomas Properties Group arising from or in any manner related to the negligence, misconduct or other fault of Contractor, its servants, agents, contractors or employees (i) because of bodily or personal injuries, including death at any time resulting therefrom (“injuries”), sustained by any employee of Contractor while at the Property, or elsewhere, while engaged in the performance of the Services under this Agreement, or (ii) because of injuries sustained by any person or persons other than employees of Contractor while at the Property, or elsewhere, or (iii) because of injury to or destruction or loss of property; provided that Contractor shall not be required to indemnify Owner or Thomas Properties Group to the extent any such losses, expenses, damages, costs, liabilities and claims are caused by the negligence or willful misconduct of Owner or Thomas Properties Group.  Contractor, without limiting the generality of the foregoing, agrees that the policies of insurance referred to in Section 5, above, shall each (where applicable) contain clauses insuring Owner and Thomas Properties Group against any loss resulting from a breach by Contractor and covering Contractor’s liability to Owner in respect to any and all of the foregoing indemnification.  Owner waives any claims it may hereafter have against Contractor for damage, loss or injury to the Property to the extent such damage, loss or injury is covered by insurance covering the Property; and Owner’s policy of casualty insurance covering the Property shall be endorsed to provide that the insurer waives its rights of subrogation against Contractor.

Contractor agrees to completely defend (or cause its insurance companies to completely defend) promptly and diligently, at its or their sole cost and expense, any claim, action, demand or proceeding brought against any of the persons referred to in this Section 6 by any person or entity with respect to any of the matters contained in Section 5 and/or Section 6 (the legal counsel for which must be reasonably satisfactory to Owner) and to pay, upon demand, any and all attorneys’ fees, investigation costs, and all other costs, expenses and liabilities to the extent that the same is not actually paid by one or more of Contractor’s insurance companies.  It is expressly understood and agreed that the provisions of this Section 6 and of Section 5 shall survive the termination of this Agreement.

7.We shall have no responsibility for or in connection with the work and you will remedy at your own expense and be responsible for any and all defects in all such work that may appear during or after the completion thereof whether the same shall affect the premises in particular or any parts of the building in general.

8.If the performance of this work shall require that additional services or facilities (including but not limited to extra elevator services, hoisting, cleanup or other cleaning services, trash removal, field supervision or ordering of materials) be provided, you shall pay us a reasonable charge therefor, together with 20% for our supervision and overhead.  If you employ us at your expense to perform any portion of the work and thereafter elect to yourself (through a sub-contractor selected by you but approved by us) perform any component of such portion (including, but without limiting the generality of the foregoing, finishes or over-standard items), then you shall pay us 10% of such sub-contractors total bill as and for our supervision and overhead.

9.All of your sub-contractors, employees, servants and agents must work in harmony with, and shall not interfere with, any labor employed by us, or our mechanics, engineers or contractors or by any other tenant or its contractors.

10.All work shall be performed on weekdays, Monday through Friday.  Any work to be performed at other times shall be performed only after submitting an after-hours access form to the Office of the Building.

11.All Contractors and their personnel, workmen and agents are to use the freight elevator only.

12.All demolition of partitions or removal of rubbish, or both, shall be done between the hours of 7:00 p.m. and 6:00 a.m.  All such materials shall be taken to “B” level by use of the freight elevator and from there removed from the Building through the loading dock.

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13.All electrical and power panel balancing shall be maintained during the entire work period.

14.All core drilling and concrete cutting shall be performed between the hours of 7:00 p.m. and 6:00 a.m.

15.An employee or agent of ours must accompany all workmen performing work in adjacent tenant areas or entering adjacent tenant areas.  You shall reimburse us for the cost of any such employee or agent.

16.If any shut down or plumbing, electrical, or air conditioning equipment becomes necessary, you shall notify us and we will determine when such shut down may be made, and any such shut down shall be done only if an agent or employee of ours is present.  You will reimburse us for the expense of any such employee or agent.

17.You agree neither to demolish nor to remove any structural element of the Building without our prior written approval.

18.Smoking is not permitted in the Project, including the job site.  Smoking is only permitted outside of the building.

19.Supplementing Paragraph 8 hereof, you will provide for and pay all costs and expenses of cleaning that construction area and for any clean-up required in adjacent areas as a result of the construction work.

20Any noise from adjacent space areas or smell complaints by tenants shall be remedied immediately or all operations are to cease until said noise or smell is abated.

21.You agree to be entirely responsible for the maintenance of the balancing of any heating, ventilating or air conditioning system or equipment installed by you and/or for maintenance of lighting fixtures, partitions, doors, hardware, or any other installations made by you.  Only a contractor or sub-contractor, approved in writing, in advance, by the Building Management Office shall perform such maintenance.

22.Any hardware, light fixtures, or any heating, ventilating or air conditioning installations now installed in the premises which you remove and not reinstall, shall be stored by you where directed by us in our premises.  No such removal may be made unless shown on the plans and specifications approved by us.

23.You shall follow all Building Rules and Regulations during construction.

24.Contractor must have a current Injury & Illness Prevention Plan (IIPP) in force as required by state law.

25.We expressly reserve the right to revoke this consent upon notice to you in the event of the breach of any of the terms or conditions hereof, in which event all work shall immediately cease (except as otherwise directed by us).

26.Nothing herein contained shall be constructed as:  (i) constituting you as our agent (you to do the work herein as principal) or (ii) a waiver by us of any of the terms or provisions of any related lease, our consent and approval as aforesaid being hereby expressly made subject thereto.  However, any default by you with respect to any portion of this letter shall, at our option, be deemed a breach of said lease and as to which we shall have all remedies as in the case of a breach of the applicable lease.

CONTRACTORS ARE REQUIRED BY LAW TO BE LICENSED AND REGULATED BY, THE CONTRACTORS’ STATE LICENSE BOARD.  ANY QUESTIONS CONCERNING A CONTRACTOR MAY BE REFERRED TO THE REGISTER OF THE BOARD WHOSE ADDRESS IS:

CONTRACTORS’ STATE LICENSE BOARD

1020 “N” STREET

SACRAMENTO, CALIFORNIA 95814

This consent shall have no force or effect unless and until you have signed and returned to us the enclosed copy acknowledging your agreement with the foregoing within (5) days from the date hereof.

Sincerely,

Confirmed and Agreed:

                           Plaza

By:
	(Title)

Date:

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Tenant/Contractor:

By:
	(Title)

Date:

Please sign and return to:

Thomas Properties Group

515 South Flower Street, Suite 1100

Los Angeles, CA 90071

Attn:  Ellisa Irvin

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EXHIBIT “D”

RULES AND REGULATIONS

Tenant shall observe and comply with the following Rules and Regulations.  Subject to Article 21 of the Lease, 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.  To the extent any part of these Rules and Regulations are contrary to, or inconsistent with, any provision of the Lease, the provisions of the Lease shall, to such extent, supercede these Rules and Regulations.

1.The sidewalks, driveways, entrances, passages, courts, elevators, vestibules, stairways, corridors or halls shall not be obstructed or used for any purpose other than ingress and egress.  Provided, however, Tenant may use of the South Tower staircases to travel between the floors of its South Tower Premises (and only between such floors) and (subject to the terms of the Lease, including, without limitation, paragraph 8 of these Rules and Regulations and Section 2.5 of the Work Letter) may install special access control systems for the doors leading to its Premises to the extent a Design Problem is not created and no applicable laws are violated.

2.No awnings or other projection shall be attached to the outside walls of the Project without Landlord’s prior written consent.

3.The sashes, sash doors, windows and doors that reflect or admit light and air into the halls, passageways or other public places in the Project shall not be covered or obstructed, nor shall any objects or articles be placed on the windowsills or in the windows, except as permitted under the Lease.  The window coverings must be of such uniform shapes, colors, materials and makes as may be designated by Landlord as “Building Standard” in the Work Letter.  Neither the interior nor the exterior of any windows shall be coated or otherwise sunscreened without Landlord’s prior written consent.

4.Except as expressly provided, permitted or conditioned by Article 28 of the Lease (including, with respect to signs that may be placed in the Plaza Building Space in accordance with Section 28.4 of the Lease), no sign, advertisement or notice shall be exhibited, painted or affixed by Tenant or any part of, or so as to be seen from the outside of, its Premises or the Project without Landlord’s prior written consent.  In the event of Tenant’s violation of the foregoing, which violation remains uncured for five (5) days after notice to Tenant from Landlord, Landlord may remove the same without any liability and may charge the expense incurred in such removal to Tenant.  All signs whether on doors, directory tablets or elsewhere, shall be inscribed, painted or affixed for Tenant by Landlord at the expense of Tenant, and shall be of a size, color and style acceptable to Landlord.

5.Any of Tenant’s rights pursuant to the Lease, to use the South Tower Directory or the Electronic South Tower Directory in the ground floor lobby of the South Tower, if any, will be provided exclusively for the display of the name and location of Tenant and Tenant’s Permitted assignees and subtenants only; and Landlord reserves the right to exclude any other names therefrom, and each and every name in addition to the name of Tenant placed upon the South Tower Directory or in the Electronic South Tower Directory, shall be subject to Landlord’s prior written consent (and if approved by Landlord, all costs therefor shall be paid by Tenant).  Provided, however, that, subject to Section 28.3 of the Lease, Tenant shall be allocated one (1) line on any such South Tower Directory or Electronic South Tower Directory for each 1,000 rentable square feet in its South Tower Premises (“Minimum Allotment”), and subject to, in accordance with, and to the extent permitted under Section 28.3 of the Lease, a reference to “City National Plaza” shall be placed on the South Tower Directory, if any (or in the Electronic South Tower Directory, if any).  Any such listings or representations, once installed (or input), shall be subject to relocation or removal upon Landlord’s written request for any nondiscriminatory reason uniformly applicable to all tenants of the South Tower (except that any such relocations or removals at Landlord’s request, unless such request is based upon Tenant’s breach of the Lease, of which these Rules and Regulations are a part, shall be paid for by Landlord and no such removal shall permanently reduce the number of lines allocated to Tenant below the Minimum Allotment), and Tenant shall pay for the removal of any such listings or representations upon its departure from its Premises.  Pursuant to Section 28.3 of the Lease, in the event that Landlord replaces the South Tower Directory with an Electronic South Tower Directory, Tenant shall be afforded the same number of lines in the Electronic South Tower Directory as it is entitled to on the South Tower Directory.

6.All doors opening onto public corridors shall be kept closed, except when being used for ingress and egress.

7.Subject to Articles 9 and 10 of the Lease and to the Work Letter, Tenant shall not drill or bore into, cut or string wires in, lay linoleum or other floor coverings in, or in any way deface any part of its Premises or the Project, except with Landlord’s prior written consent and as Landlord may direct.

8.All security access keys or cards to the Parking Facilities and entrances to the Project and Buildings shall be obtained from Landlord, and shall, subject to requirements of, and to the extent required by Section 28.7 of the Lease (and all of the provisions of Article 28 of the Lease), include a reference to the name of the Project as “City National Plaza” for so long as Tenant shall retain the Project Name Rights.  Tenant may install locks of any kind upon any of the doors to the Premises on the condition that such locks shall be compatible with (and shall work with) Landlord’s master key system for the Project; provided, however, that Tenant may install locks of any kind on any of Tenant’s Secured Areas without regard to the compatibility (or incompatibility) of such locks with Landlord’s master key system for the Project.  Tenant shall provide extra keys to the non-secured parts of its Premises to Landlord.  Tenant must, upon the termination of its tenancy, give to Landlord all keys pertaining to the Premises and the Project, and in the event of the loss of any keys so furnished, Tenant shall pay Landlord the cost of replacing the same or changing the lock or locks opened by such lost key(s) if Landlord shall deem it necessary to make such change.

9.Subject to Articles 9 and 10 of the Lease and to the Work Letter, no window or other air conditioning or heating units or other similar apparatus shall be installed or used by Tenant without Landlord’s prior written consent.

10.The water and wash closets and other plumbing fixtures shall not be used for any purpose other than those for which they were constructed and no sweepings, rubbish, rags or other substances shall be thrown therein.

11.Subject to the Work Letter, all removals from, or carrying in or out of, the Project of any safes, freight, furniture, heavy or bulky matter of any description, must take place only between the hours of 9:00 and 11:00 a.m., and 2:00 and 4:00 p.m. of days other than Saturdays, Sundays and holidays (no moving being permitted on Saturdays, Sundays or holidays without special permission) and must be made upon previous written notice to Landlord and under its supervision, and the persons employed by Tenant for such work must be acceptable to Landlord.  Tenant shall be responsible for any damage to the Project caused by any such activity.  Landlord reserves the right to inspect all heavy or bulky equipment or articles to be brought into the Project and to exclude from the Project all such heavy or bulky equipment or articles, the weight of which may exceed the floor load for which the Project is designed (unless Tenant reinforces such floors, at Tenant’s sole cost and expense, to the extent deemed reasonably necessary by Landlord), or such equipment or articles as may violate any of the provisions of the Lease of which these Rules and Regulations are a part.  Tenant shall not use any machinery or other bulky articles in the Premises, even though its installation may have been permitted, which causes any noise, or jar, or tremor to the floors or walks which unreasonably interferes with the normal business office operations of other tenants or occupants of the South Tower and/or North Tower or with the normal business operations of any tenant or occupant of the Plaza Building, or which by its weight might cause injury to the floor of the Project (unless Tenant reinforces such floors, at Tenant’s sole cost and expense, to the extent deemed reasonably necessary by Landlord).

12.Neither Tenant nor its employees, agents, visitors or licensees shall at any time bring or keep upon the Premises any flammable, combustible or explosive fluid, chemical or substance, except for a reasonable quantity of such material that is reasonably necessary for the conduct of Tenant’s business.

13.Tenant’s Premises shall not be used for manufacturing or for the storage of merchandise except as such storage may be incidental to the permitted use of such Premises.  Tenant shall not, without Landlord’s prior written consent, occupy or permit any portion of its Premises to be occupied or used for the manufacture or sale of liquor or tobacco in any form, or as a barber or manicure shop, or (except to hire its own employees for employment at the Premises) as an employment bureau.  The Premises shall not be used for lodging or sleeping or for any immoral or illegal purposes.

14.Tenant shall not make, or permit to be made, any loud disturbing noises, or disturb or interfere with occupants of the Project or neighboring buildings or premises or those having business with it by the use of any musical instrument, radio, phonographs or unusual noise.  Neither Tenant nor its servants, employees, agents, visitors or licensees shall throw anything out of doors, windows or down the passageways.

15.No bicycles, vehicles or animals (except for seeing eye dogs that are trained or are in the process of being trained) of any kind shall be brought into or kept in or about Tenant’s Premises, and no cooking shall be done or permitted by Tenant in its Premises, except that the preparation of coffee, tea, hot chocolate and similar items (and to the extent contemplated by the Lease, the cooking and service of food) for Tenant, its employees and visitors shall be permitted; provided, however, that such activities shall be permitted only if and to the extent that they do not otherwise violate the Lease of which these Rules and Regulations are part.  Tenant shall not cause or permit any unusual or objectionable odors to emanate from its Premises.

16.These shall not be used in any space, or in the public halls of the building, any hand trucks except those equipped with rubber tires and side guards.

17.No vending or coin operated machines (except for ATMs (as permitted by the Lease) or machines that count coins) shall be placed by Tenant within the Premises without Landlord’s prior written consent, except for those that serve Tenant’s employees and visitors.

18.No person shall be employed by Tenant to do janitorial work in the Project (except in Tenant’s retail banking branch office located in the Plaza Building Space or in Tenant’s Secured Areas or except as otherwise specifically permitted by the Lease), or maintenance, construction or similar work in any part of the Project without Landlord’s prior written consent.  Any person employed by Tenant to do janitorial, maintenance or similar work with Landlord’s consent shall, while in the Project, be subject to reasonable rules imposed by Landlord or its agent or representative, and Tenant shall be responsible for all acts of such persons.

19.Landlord shall have the right to prohibit any advertising by Tenant (except to the extent that such advertising is specifically permitted by the Lease) which identifies the Project or which, in Landlord’s good faith opinion, tends to impair (i) the reputation of the Project or (ii) the Project’s desirability as an office building, and upon written notice from Landlord, Tenant shall refrain from or discontinue such advertising.

20.Canvassing, soliciting and peddling in the Project are prohibited and Tenant shall cooperate to prevent the same; provided, however, that this rule shall not prohibit Tenant from seeking to obtain the retail banking business of tenants or occupants of the Project by normal advertising or promotional programs which are comparable to those generally used by first class retail banking institutions and which are conducted solely in and from Tenant’s retail bank branch office in the Plaza Building Space.

21.Landlord reserves the right to control access to the Project by all persons after reasonable hours or generally recognized business days and at all hours on Sundays and legal holidays.  Tenant shall be responsible for all persons for whom it requests after hours access and shall be liable to Landlord for all acts of such persons.  Landlord assumes no responsibility and shall not be liable for any damage resulting from the admission of any unauthorized person to the Project; except to the extent that the admission of any such person to the Project shall constitute gross negligence on the part of Landlord.

22.Landlord reserves the right to exclude or expel from the Project, (a) any person who, in the judgment of Landlord, is intoxicated or under the influence of liquor or drugs, or (b) (to the extent that Landlord in good faith believes there is a potential for damage to property or injury to person) who shall in any manner do any act in violation of the Rules and Regulations of the Project.

23.It is understood and agreed between Landlord and Tenant that no assent or consent to any waiver of any part hereof by Landlord in spirit or letter shall be deemed or taken as made except if same is done in a writing signed by Landlord.  Any such waiver shall not constitute a waiver of any other rule or regulation or any subsequent application thereof to Tenant.

24.Subject to Article 21 of the Lease, Landlord reserves the right, at any time, to change or rescind any one of 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 and Project, and for the prevention of good order therein, as well as for the convenience of other occupants and tenants therein.  Landlord shall not be responsible to Tenant herein or to any other person for the nonobservance of the Rules and Regulations by any other tenant or other person.  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.

25.Tenant shall not suffer or permit smoking or carrying of lighted cigars or cigarettes in areas reasonably designated by Landlord or by applicable governmental agencies as nonsmoking areas.

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

27.Tenant assumes all risks from theft or vandalism and agrees to keep the Premises locked as may be required.

PARKING RULES

The following parking rules and regulations (“Parking Rules”) shall be in effect at the Project.  Landlord reserves the right to adopt reasonable, nondiscriminatory modifications and additions to the Parking Rules by written notice to Tenant.  In the case of any conflict between these Parking Rules and the Lease, the Lease shall control.

1.Parking areas shall be used only for parking vehicles no larger than full size, passenger automobiles (including vehicles commonly known as “SUVs” (which SUVs shall include Mercedes Benz G500 wagons and GMC Hummers); provided, however, that no such SUVs shall park in any parking spaces in the Parking Facilities designated as parking for “compact” vehicles) herein called “Permitted Size Vehicles.”  Vehicles other than Permitted Size Vehicles are herein referred to as “Oversized Vehicles.”

2.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 by Landlord for such activities.  Tenant shall instruct Tenant’s employees, suppliers, shippers, customers, or invitees that vehicles that belong to, or that are controlled by such parties shall not be unloaded, or parked in areas other than those designated by Landlord for such activities.

3.Parking stickers, access cards or identification devices shall be the property of Landlord and be returned to Landlord by the holder thereof upon termination of the holder’s parking privileges.  Tenant shall pay to Landlord refundable deposits on such devices as reasonably established by Landlord from time to time.  Tenant will pay such replacement charge as is reasonably established by Landlord for the loss of such devises.

4.Landlord reserves the right to suspend the privilege to park in the Parking facilities granted to any person who refuses or complies with the applicable rules, regulations, laws and/or agreements relating to the uses of the Parking Facilities, and subject to the provisions of the Section 20.8 of the Lease, in the case of persons who willfully, repeatedly or habitually violate such rules, regulations, laws and/or agreements, further reserves the right to revoke such persons’ privileges to park in the Parking Facilities (and to refuse the sale of monthly identification devices and/or parking access cards to such persons).

5.Landlord reserves the right:  (a) to the extent permitted by the Lease, to relocate, on a reasonable and non-discriminatory basis, all or a part of the Parking Privileges:  (i) from one location within the Project to another location within the Project and/or (ii) to reasonably adjacent offsite location(s), and (b) to reasonably allocate the parking spaces within the Parking Facilities between compact and standard size spaces, so long as the same complies with applicable laws, ordinances and regulations.

6.Users of the parking area will obey all posted signs and park only in the areas designated for vehicle parking.

7.Unless otherwise instructed, every person using the parking area is required to park and lock his or her own vehicle.  Landlord will be responsible or liable to Tenant for any damage to vehicles, injury to persons or loss of property, except to the extent such damage or injuries are caused by the gross negligence of Landlord.

8.Parking validation, will be permissible only by such method or methods as Landlord and/or its licensee may establish, and at the rates specified in the Lease.

9.The Parking Facilities shall be used only for parking Permitted Size Vehicles.  The maintenance, washing, waxing or cleaning of vehicles in the parking structure or Common Areas of the Project is prohibited.  Tenant shall have no right to install any fixtures, equipment or personal property (other than vehicles) in the Parking Facilities, nor shall Tenant make any alteration to the Parking Facilities.

10.Tenant shall employ commercially reasonable efforts to cause the group of all of its employees, agents and invitees to comply with all applicable parking rules, regulations, laws and agreements.

11.Such parking use as is herein provided is intended only as a license, and no bailment is intended or shall be created hereby.

12.In no event shall Tenant or its employees park in any reserved spaces leased to other tenants or in any stalls within the designated visitor parking zones.

13.Tenant shall, upon request of Landlord from time to time, furnish Landlord with a list of its employees’ names and of Tenant’s and its employees’ vehicle license numbers.  Tenant agrees to notify its employees of these Parking Rules as the same are modified from time to time.  Subject to compliance with applicable Laws, Landlord may tow away from the Project and/or the Parking Facilities any vehicle belonging to any person that is parked in violation of these Parking Rules, and/or may attach violation stickers or notices to any such vehicles.

14.Persons using the Parking Facilities shall observe all directional signs and arrows and any posted speed limits.  Unless otherwise posted, in no event shall the speed limit of five (5) miles per hour be exceeded in the Parking Facilities.  All vehicles shall be parked entirely within painted stalls, and no vehicles shall be parked in areas which are posted or marked as “no parking” or on ramps, driveways and aisles.  Only one (1) vehicle may be parked in a parking space.  In no event shall Tenant interfere with the use and enjoyment of the Parking Facilities by other tenants of the Building or their employees or invitees.

15.Should any parking spaces be allotted by Landlord or Tenant, either on a reserved or unreserved basis, Tenant shall not assign or sublet any of those spaces, either voluntarily or by operation of law, without the prior written consent of Landlord, except in connection with an authorized assignment of this Lease or

subletting of the Premises, or subject to the terms of the Lease (including, without limitation, Section 20.8, by granting a license to others to use Parking Privileges that Tenant is obligated to lease but cannot use).

16.Landlord reserves the right to modify these rules and regulations and to adopt such other reasonable and non-discriminatory rules and regulations as it may from time to time deem necessary for the proper operation and safety of the parking area.  Tenant agrees to abide by these and any such other rules and regulations.

Landlord reserves the right, at any time, to reasonably 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 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 (and, to the extent required herein, to instruct or employ commercially reasonable efforts to cause its employees, agents, suppliers, shippers, customers, visitors, and/or invitees to comply with these Rules and Regulations) as a condition of its occupancy of the Premises.

EXHIBIT “E”

FORM OF TENANT ESTOPPEL CERTIFICATE

The undersigned as [Tenant] [Landlord] under that certain Office Lease dated November 19, 2003 (the “Lease”) between TPG PLAZA INVESTMENTS, LLC, a Delaware limited liability company, as landlord, and CITY NATIONAL BANK, a national banking association, as tenant, for Premises located on a portion of (i) the first (1st) floor of the Office Building located at 525 South Flower Street, Los Angeles, California and (ii) floors [       ,       ,       ,       ,       ,       ,       ,       ,       ,       and      ] of the Office Building located at 555 South Flower Street, Los Angeles, California, certifies as follows:

1.True, correct and complete copies of the Lease and all amendments, modifications and supplements thereto are attached hereto and the Lease, as so amended, modified and supplemented, is in full force and effect, and represents the entire agreement between Tenant and Landlord with respect to the Premises and the Property (all terms in initial capitals herein not otherwise defined herein shall have the meanings ascribed to such terms in the Lease).  There are no amendments, modifications or supplements to the Lease, whether oral or written, except as follows (include the date of such amendment, modification or supplement)

                                            .

2.Occupancy and Commencement:

a.Tenant commenced occupancy of the First Increment Office Space described in the Lease, currently occupies the First Increment Office Space, and the First Increment Commencement Date occurred on                            , 200   .

b.Tenant commenced occupancy of the Second Increment Office Space described in the Lease, currently occupies the Second Increment Office Space, and the Second Increment Commencement Date occurred on                            , 200   .

c.Tenant commenced occupancy of the Plaza Building Space described in the Lease, currently occupies the Plaza Building Space, and the Plaza Building Commencement Date occurred on                            , 200   .

d.Tenant commenced occupancy of the Third Increment Office Space described in the Lease, currently occupies the Third Increment Office Space, and the Third Increment Commencement Date occurred on                            , 200   .

e.Tenant commenced occupancy of the Fourth Increment Office Space described in the Lease, currently occupies the Fourth Increment Office Space, and the Fourth Increment Commencement Date occurred on                            , 200   .

3.Tenant has not transferred, assigned, or sublet any portion of the Premises nor entered into any license or concession agreements with respect thereto except as follows:

.

4.Base Rent:

a.With respect to the First Increment Office Space, became payable on                            , 200   .

b.With respect to the Second Increment Office Space, became payable on                            , 200   .

c.With respect to the Plaza Building Space, became payable on                            , 200   .

d.With respect to the Third Increment Office Space, became payable on                             , 200   .

e.With respect to the Fourth Increment Office Space, became payable on                            , 200   .

5.Rent Commencement:

a.In accordance with the Lease, Rent for the First Increment Office Space commenced to accrue on                            , 20     .

b.In accordance with the Lease, Rent for the Second Increment Office Space commenced to accrue on                            , 20     .

City National Lease

c.In accordance with the Lease, Rent for the Plaza Building Space commenced to accrue on                            , 20     .

d.In accordance with the Lease, Rent for the Third Increment Office Space commenced to accrue on                            , 20     .

e.In accordance with the Lease, Rent for the Fourth Increment Office Space commenced to accrue on                            , 20     .

6.The Term of the Lease expires on                                  .

7.The Lease provides for four (4) options to extend the term of the Lease, each for five (5) years, for all of or a certain minimum portion of the Premises pursuant to Section 2.4.1 of the Lease.  The rental rate for such extension term is as follows: * [ILLEGIBLE] Extension Premises in the event of any extension of the Term by Tenant and * [ILLEGIBLE] or the Extension Premises in the event of any extension of the Term by any Permitted Assignee.  Except as expressly provided in the Lease, and other documents attached hereto, Tenant does not have any right or option to renew or extend the term of the Lease, to lease other space at the Property, nor any preferential right to purchase all or any part of the Premises or the Property.

8.To the best of the undersigned’s actual knowledge, with no duty of inquiry or investigation with respect to the other party’s conduct, all conditions of the Lease to be performed by [Landlord][Tenant] necessary to the enforceability of the Lease have been satisfied and [Landlord][Tenant] is not in default thereunder.  All space and improvements leased by Tenant have been completed and furnished and all of Landlord’s Work has been completed in accordance with the provisions of the Lease, except as noted below, and Tenant has accepted and taken possession of the Premises.

9.To the best of the undersigned’s actual knowledge, with no duty of inquiry or investigation with respect to the other party’s conduct, there are no offsets or credits against rentals currently due and payable or scheduled under the Lease and no free periods or rental concessions have been granted to Tenant, except as follows:

                                                                                                                                                                      .

10.All monthly installments of Base Rent, all Additional Rent and all monthly installments of estimated Additional Rent have been paid when due through                             .  The current monthly installment of Base Rent is $                             .

11.The undersigned acknowledges that this Estoppel Certificate may be delivered to [Landlord’s prospective mortgagee, or a prospective purchaser, or to an entity that may acquire, merge with or consolidate with Landlord] [a prospective assignee or sublessee of Tenant or an entity that may acquire, merge with or consolidate with Tenant] and acknowledges that it recognizes that if same is done, said [mortgagee, prospective mortgagee, or prospective purchaser or entity] [assignee, sublessee or entity] will be relying upon the statements contained herein in [making the loan or acquiring the property of which the Premises are a part and accepting an assignment of the Lease as collateral security, or in acquiring, merging with or consolidating with Landlord] [accepting an assignment of the Lease from Tenant, subleasing the Premises (or any portion thereof) from Tenant or acquiring, merging, with or consolidating with Tenant], and that receipt by it of this certificate is a condition of [the making of such loan, such acquisition of such property or of such acquisition, merger or consolidation] [the accepting of such assignment or sublease or of such acquisition, merger or consolidation].

12.Each individual executing this Estoppel Certificate on behalf of the undersigned hereby represents and warrants that the undersigned is a duly formed and existing entity qualified to do business in California and that the undersigned has full right and authority to execute and deliver this Estoppel Certificate and that each person signing on behalf of the undersigned is authorized to do so.

Executed at                         on the                             day of                                     , 20   .

[“Tenant”:

CITY NATIONAL BANK,

a national banking association

By:
Name:
Its:
By:
Name:
Its:	]

[“Landlord”

TPG PLAZA INVESTMENTS, LLC

a Delaware limited liability company

By:	TPGA, LLC
	a Delaware limited liability company, its Managing Member

By:	TPG/CALSTRS, LLC
	a Delaware limited liability company, its Managing Member

By:	THOMAS PROPERTIES GROUP, LLC
	a Delaware limited liability company, its Managing Member

By:
Name:
Its:	]

EXHIBIT “F”

SUPERIOR RIGHT AND SUPERIOR RIGHT HOLDERS
WITH RESPECT TO THE POTENTIAL FIRST RIGHT SPACE

1.         BofA

[GRAPHIC]

EXHIBIT “G”

TENANT’S PLAZA BUILDING ATM LOCATION

EXHIBIT “H”

TENANT’S B-LEVEL ATM LOCATION

The location of Tenant’s ATMs on the B-Level shall be in a high visibility location on the reconfigured B-Level where there is significant pedestrian traffic as reasonably and mutually agreed by Tenant and Landlord.  Tenant shall have the right to initially install its ATMs at the current location of the BofA ATMs; provided, however, that (i) Landlord shall have the right upon delivery of reasonable advance written notice to Tenant, to relocate any such location to another location (or locations) conforming to the requirements of this Exhibit “H”, and (ii) in the case where Landlord shall require relocation of such ATMs pursuant to the preceding clause (i), Landlord shall reimburse Tenant for Tenant’s Actual Costs incurred by Tenant in physically removing such ATMs, transporting such ATMs to the new ATM location, designing the new ATM location and installing the ATMs in the new location.

EXHIBIT “I”

CALIFORNIA ASBESTOS NOTICE

In 1988, California enacted Legislation (specifically, Chapter 10.4 of the Health and Safety Code, Section 25915 et seq.) requiring landlords and tenants of commercial buildings constructed prior to 1979 to notify certain people, including each other and their respective employees working within such building, of any knowledge they may have regarding any ACM (as defined in Section 7.3.2 of the Lease) in the Building.  This notification is being given to provide the information required under this Legislation in order to help you avoid any unintentional contact with ACM, to assure that appropriate precautionary measures are taken before disturbing any ACM, and to assist you in making appropriate disclosures to your employees and others.

1.             Background Information.   Structural steel fireproofing and other building materials containing asbestos were widely used in construction from the 1950’s through the mid-1970’s.  This Building was built before 1979 and certain asbestos-containing materials are located in the Building.

2.             ACM Survey and Operations Plan.   We have engaged qualified ACM consultants to survey the property for ACM and to assist in implementing an ACM management plan that includes, among other things, periodic inspection and surveillance, air monitoring, information and training programs for building engineering and maintenance staff, cleaning procedures, emergency fiber release procedures, work procedures and other measures to minimize potential fiber release occurrences.

3.             Information Regarding Exposure.   We have no reason to believe that the ACM in the Building is currently in a condition to release asbestos fibers which would pose a significant health hazard to the Building’s occupants; this should remain so if such ACM is properly handled and remains undisturbed.  You should take into consideration that our knowledge as to the absence of health risks is based solely upon general information, and that we have no special knowledge concerning potential health risks resulting from exposure to ACM in the Building.  We are therefore required by the above-mentioned legislation to encourage you to contact the County Departments of Health Services, the Federal or State Occupational Safety and Health Administration, or other public agencies if you wish to obtain a better understanding of the potential impacts resulting from exposure to ACM.

4.             Notification Procedures for Construction Activities.   Because any tenant alterations or other work at the property could disturb ACM and possibly release asbestos fibers into the air, we must require that you obtain our written approval prior to beginning such projects.  This includes not only major alterations, but also such activities as drilling or boring holes, installing electrical, telecommunications or computer lines, sanding floors or walls, removing ceiling tiles or other work which might disturb ACM.  In many cases, such activities will not affect ACM, but you are required to notify the Property Management Office in advance at the address set forth on Schedule 1, and receive approval, in each and every case.  The Property Management Office will make available such instructions as may be required.  Any such work shall not be attempted by an individual or contractor who is not qualified to handle ACM.  In the areas specified in Schedule 1, you must avoid touching or disturbing the ACM in any way.  If you observe any activity which has the potential to disturb ACM, you should report the same to the property manager immediately.

5.             Building Safety Rules Pertaining to ACM.   In connection with the foregoing, we have adopted the following policies (which shall be considered rules under tenant leases):

(1)           The owner, and representatives of the owner, including, without limitation, the owner’s ACM consultant, are entitled upon reasonable prior notice, except in emergencies (in which event no prior notice is required), to enter into the premises of any tenant to inspect for ACM, perform air tests and abatement; and

(2)           Any tenant, contractor, subcontractor or other party must obtain the owner’s prior written approval before performing any alterations on any tenant space, or performing any other work at the property that might disturb ACM or involve exposure to asbestos fibers as described above.

6.             Further Information.   At this time, we are unaware of specific handling restrictions or procedures which might be necessary in any particular situation to avoid exposure to the ACM in the Building.  We are therefore required by the above-mentioned legislation to encourage you to contact local, state or federal public health agencies if you wish to obtain further information regarding handling procedures and restrictions.

SCHEDULE 1

TO

EXHIBIT “I”
CALIFORNIA ASBESTOS NOTICE

BUILDING:	525-555 South Flower Street, Los Angeles, California
PROPERTY MANAGER:	Thomas Properties Group, LLC
ADDRESS OF BUILDING	515 South Flower Street
OFFICE:
	Sixth Floor
	Los Angeles, CA 90071
	Telephone: (213) 613-1900

SPECIFIC LOCATIONS WHERE ACM MAY BE PRESENT IN ANY QUANTITY

1.Sprayed-on fireproofing on the structural steel and overspray on the ceiling above the suspended ceilings.

2.Floor tiles and associated mastic.

3.Drywall joint compound.

4.Thermal systems insulation.

5.Encapsulated in window column enclosures.

6.Underneath HVAC induction units between structural floor slabs.

EXHIBIT “J”

Cleaning and Janitorial Specifications

1.              Nightly Services.

All nightly services shall be performed Monday through Friday, fifty-two (52) weeks per year, except on holidays.

Janitorial Specifications.

1.1   Janitorial Service Specifications for Tenant Suite and Common Areas on Tenant Floors.

Nightly Services.

1.1.1.1.   Secure all lights as soon as possible each night.

1.1.1.2.   Vacuum all carpets as required.

1.1.1.3.   Dust mop all resilient and composition floors with treated dust mops.  Damp mop to remove spills and water stains as required.

1.1.1.4.   Dust all horizontal surfaces on desks and office furniture.  (Papers, folders and personal items on desks are not to be removed.)

1.1.1.5.   Spot clean doors, frames, glass partitions, light switches, wipeable walls and surfaces.  (Flat paint cannot be cleaned.)

1.1.1.6.   Empty all waste paper baskets and wipe clean if necessary.

1.1.1.7.   Remove all trash from floors.

1.1.1.8.   Return chairs and waste baskets to proper positions.

1.1.1.9.   Clean drinking fountains (if applicable).

1.1.1.10. Hand dust and clean tenant stairwells interconnecting floors and hand rails weekly.

1.1.1.11. Clean and remove debris from all metal door thresholds weekly.

1.1.1.12. Wipe clean smudged bright work weekly.

1.1.1.13. Spot clean all carpets, resilient and composition floors weekly.

1.1.1.14. Vacuum under and around all desks and office furniture weekly.

1.1.1.15. Dust all vinyl base weekly.

Monthly Services.

1.1.2.1.   Wipe clean and polish all common area bright work.

1.1.2.2.   Edge all carpeted areas.

1.1.2.3.   Dust all high-reach areas including, but not limited to, tops of door frames, furniture ledges, tops of partitions, picture frames, graphs and similar wall hangings.

1.1.2.4.   Dust all low-reach areas including, but not limited to, chair rungs, furniture ledges, baseboards, wood paneling moldings, etc.

1.1.2.5.   Clean and spray buff all flooring.

1.1.2.6.   Brush or vacuum upholstered furniture.

Periodic Services.

1.1.3.1.   Scrub or otherwise recondition all resilient or composition flooring to provide a level of appearance equivalent to a completely refinished floor twice per year.

1.1.3.2.   Dust or vacuum window blinds or curtains as required, but not less than once per year.

1.1.3.3.   Dust light fixtures inside and out when replacing lamps or not less than once per year.

2.   Restroom Service Specifications.

2.1.   Nightly Services.

Restock all restrooms with supplies, including paper towels, toilet tissue, seat covers and hand soap as required.

Restock all sanitary napkin dispensers as required.

Clean all mirrors, dispensers, faucets, flushometers and bright work.

Wash and sanitize all toilets, toilet seats, urinals and sinks.  Wipe dry all sinks.

Mop all restroom floors with disinfectant germicidal solution.

Empty all waste and sanitary napkin receptacles.

Remove all restroom trash.

Spot clean finger prints, marks and graffiti from walls, partitions, glass, aluminum and light switches where required.

2.2.   Weekly Services.

Dust all low reach and high reach areas including, but not limited to, ledges, mirror tops, partition tops and edges.

2.3   Periodic Services.

Wipe down all tile walls and metal partitions.  Partitions shall be left in an unstreaked condition after this work.

Thoroughly clean all ceramic tile floors when required.

3.   Day-Cleaning Services.

3.1  Vacuum clean elevator cab floors daily.

3.2  Wipe clean and remove finger marks from all metal bright work throughout public areas and up to hand reach daily.

3.3.   Check men’s washrooms for toilet tissue replacement.

3.4.   Check ladies’ washrooms for toilet tissue and sanitary napkin replacements.

4.   General.

4.1.   Clean and treat as necessary interior and exterior of elevator car including hatch doors (and saddles) serving Premises.

4.2  Wipe all interior window frames, mullions and other painted or unpainted interior metal surfaces of the perimeter walls of the Building each time the interior of the windows is washed.

4.3.   Wipe down mail depositories nightly.

4.4.   Wipe clean and polish all metal hardware fixtures and other bright work as needed.

4.5.   Keep in a clean condition all public telephones and their enclosures.

4.6.   Clean all directory boards as required, remove fingerprints and smudges nightly.

4.7.   Maintain Building lobby, corridors and other public areas in a clean condition.

5.   Window Cleaning.

5.1.   Exterior surfaces of exterior windows shall be cleaned three times per year.

5.2.   Interior surface of exterior windows shall be cleaned once per year.

EXHIBIT “K”

INTENTIONALLY DELETED

NOTE: Use GE Plastics (tel 800-451-3147)
Lexan® UV- Resistant extruded
polycarbonate sheeting #SG-300-112
with UV protective coating for sign surface.
Front-lit 9” deep channel letter sign.

[GRAPHIC]

CITY NATIONAL BANK  NAMING RIGHTS STUDY  North Elevation-Top of Building  11.12.03

1/32” = 1’-0” [S P LOGO]

EXHIBIT “L”

SOUTH TOWER TOP SIGNS

1

NOTE: Use GE Plastics (tel 800-451-3147)
Lexan® UV- Resistant extruded
polycarbonate sheeting #SG-300-112
with UV protective coating for sign surface.
Front-lit 9” deep channel letter sign.

[GRAPHIC]

CITY NATIONAL BANK  NAMING RIGHTS STUDY  South Elevation      Top of Building  11.12.03

1/32” = 1’-0” [S P LOGO]

2

NOTE: Use Sepp leaf Products, Inc.
German Leaf - 24kt Finegold for sign surface.
6” deep back-lit channel letter sign.

[GRAPHIC]

CITY NATIONAL BANK  NAMING RIGHTS STUDY  Figueroa Elevation  11.12.03

1/16” = 1’-0” [S P LOGO]

EXHIBIT “M”

SOUTH TOWER EYEBROW SIGNS

1

NOTE: Use Sepp leaf Products, Inc.
German Leaf - 24kt Finegold for sign surface.
6” deep back-lit channel letter sign.

[GRAPHIC]

CITY NATIONAL BANK  NAMING RIGHTS STUDY  6TH STREET Elevation  11.12.03

1/32” = 1’-0” [S P LOGO]

2

NOTE: Use Sepp leaf Products, Inc.
German Leaf - 24kt Finegold for sign surface.
6” deep back-lit channel letter sign.

[GRAPHIC]

CITY NATIONAL BANK   NAMING RIGHTS STUDY   Flower Elevation  11.12.03

1/16” = 1’-0” [S P LOGO]

3

NOTE: The dimentional letters should match
the depth and finish of the gold-plated
existing entry signs

[GRAPHIC]

CITY NATIONAL BANK   NAMING RIGHTS STUDY   Plaza Elevation  11.12.03

1/4” = 1’-0” [S P LOGO]

EXHIBIT “N”

SOUTH TOWER ENTRANCE SIGNS

NOTE: Use Sepp leaf Products, Inc.
German Leaf - 24kt Finegold for sign surface.
6” deep back-lit channel letter sign.

[GRAPHIC]

CITY NATIONAL BANK   NAMING RIGHTS STUDY   Flower Elevation  11.12.03

3/32” = 1’-0” [S P LOGO]

EXHIBIT “O”

PLAZA BUILDING SIGNS

AND BANK DIRECTIONAL SIGNS

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Bank Directional Signs:  See Exhibit “P”, pages A2-4.

EXHIBIT “O”

PLAZA BUILDING SIGNS

AND BANK DIRECTIONAL SIGNS

2

EXHIBIT “P”

PROJECT EXTERIOR SIGNAGE PROGRAM

City National Lease

[GRAPHIC]

EXHIBIT “P”

PROJECT EXTERIOR
SIGNAGE PROGRAM

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[GRAPHIC]

4

[GRAPHIC]

5

[GRAPHIC]

6

[GRAPHIC]

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*30 Pages Omitted

EXHIBIT “R”

PERMITTED GROUND FLOOR TENANT SIGNAGE AREAS

The areas where signage may be placed for a Permitted Ground Floor Tenant signage shall be:

(i)Any area on the east, south and west facing exterior walls of the South Tower below the level of Tenant’s Eyebrow Signs; and

(ii)Any portion of the South Tower Building Envelope (outside of the South Tower footprint).

City National Lease

EXHIBIT “S”

INTENTIONALLY DELETED

City National Lease

EXHIBIT “T”

DEPICTION OF LOCATIONS FOR

DESIGNATED SECONDARY SIGNAGE

See Exhibit “P”, where the Designated Secondary Signage are described as “Tenant Directory” (and on which the two (2) locations on the South Tower are shown).

City National Lease

EXHIBIT U: SOUTH TOWER BUILDING ENVELOPE

[GRAPHIC]

EXHIBIT “V”

INTENTIONALLY DELETED

EXHIBIT “W”

EXISTING SECURITY INSTRUMENTS

Deed of Trust, Security Agreement, Assignment of Rents, and Fixture Filing dated as of January 28, 2003, by and between TPG Plaza Investments, LLC, as borrower and as trustor, California State Teachers’ Retirement System, a public entity, as lender and as beneficiary, and Stewart Title Guaranty Company, as trustee, recorded on January 28, 2003 in the official records of Los Angeles County, California as Document No. 03-0253759.

City National Lease

EXHIBIT “X”

FORM OF NONDISTURBANCE AGREEMENT

City National Lease

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL TO:

California State Teachers’ Retirement System

c/o Cox, Castle & Nicholson LLP

2049 Century Park East

Suite 2800

Los Angeles, California 90067

Attention:  Amy H. Wells, Esq.

(Space Above This Line for Recorder’s Use)

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

This Subordination, Non-Disturbance and Attornment Agreement (this “Agreement”), is dated as of November     , 2003, among CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM, a public entity (“Lender”), CITY NATIONAL BANK, a national banking association (“Tenant”), and TPG PLAZA INVESTMENTS, LLC, a Delaware limited liability company (“Borrower” or “Landlord”).

W I T N E S S E T H:

WHEREAS, Borrower is the owner of certain real property situated in the City of Los Angeles, County of Los Angeles, State of California more particularly described on Exhibit “A” attached hereto (the “Property”);

WHEREAS, pursuant to that certain Promissory Note (“Note”) in the principal amount of One Hundred Seventy-Five Million Dollars ($175,000,000.00) (“Principal Amount”) dated January 28, 2003 made by Borrower in favor of Lender, as amended by that certain Amendment to Promissory Note dated August 1, 2003 made by Borrower in favor of Lender, and secured by that certain Deed of Trust, Security Agreement, Assignment of Rents, and Fixture Filing dated as of January 28, 2003, by and between Borrower, as trustor, Lender, as beneficiary, and Stewart Title Guaranty Company, as trustee (the “Deed of Trust”), recorded on January 28, 2003 in the Official Records of Los Angeles County, California as Document No. 03-0253759, the Lender has made a loan (“Loan”) to the Borrower in the Principal Amount, upon the terms and subject to the conditions set forth in the Note (as amended) and the Deed of Trust;

WHEREAS, TENANT is concurrently with the execution of this Agreement entering into a lease of certain space in the project located at the Property as more particularly described on Exhibit “B” attached hereto (“Premises”) from Borrower pursuant to that certain Office Lease (“Lease”), dated as of November     , 2003 by and between Borrower, as landlord, and Tenant, as tenant;

WHEREAS, Lender has required that the Lease and all rights of Tenant thereunder be subordinated to the Deed of Trust and all of the rights of Lender thereunder as provided herein; and

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WHEREAS, Tenant wishes to obtain a non-disturbance agreement from Lender so as to be assured of continued possession of the Premises if the Deed of Trust is foreclosed.

NOW, THEREFORE, for valuable consideration, Lender, Borrower and Tenant agree as follows:

1.Incorporation of Recitals.  The parties hereto agree that the recitals set forth above are incorporated into this Agreement by this reference for all purposes.  Except as expressly provided herein, capitalized terms not defined herein shall have the respective meanings set forth in the Lease.

2.Subordination.  Tenant’s rights and interests under the Lease in the Premises and the Property are and shall continue to be subject and subordinate in all respects to the lien of the Deed to Trust, to all of the terms thereof, to all advances made or to be made thereunder and any renewals, modifications, consolidations, replacements, increases, substitutions and extensions thereof and/or thereto, subject to the terms and conditions of this Agreement.

3.Nondisturbance.  If foreclosure proceedings (each, a “Foreclosure”) are instituted under the Deed of Trust (or if Borrower’s interest in the Property is transferred to Lender as the result of foreclosure, deed or assignment in lieu of foreclosure, or otherwise) and an Event of Default under Section 16.1 of the Lease is not then in existence, then:  (a) the Lease shall not be terminated; (b) the Lease shall remain in full force and effect; and (c) Tenant’s right of possession of the Premises shall not be affected or disturbed by such Foreclosure.

4.Attornment.  Upon the completion of a Foreclosure and the sale of the Property, or if Lender should otherwise acquire possession of the Property, Tenant shall attorn to the purchaser at foreclosure or to Lender (such successor to Borrower, together with its successor and assigns, being collectively referred to as the “New Landlord”), as the case may be, and shall recognize (and be bound to) the New Landlord as Tenant’s landlord under the Lease (subject to the terms and conditions of this Agreement) and New Landlord shall recognize (and be bound to) the Tenant as the New Landlord’s tenant under the Lease.  The foregoing provisions shall be self-operative and effective without the execution of any further instruments on the part of any party hereto.  Tenant agrees, however, from time to time upon the request of the New Landlord, to execute and deliver any instrument reasonably requested by New Landlord to confirm such attornment.

5.Waiver/Payment of Rent.  Tenant waives the provisions of any statute or rule of law now or hereafter in effect, which accords Tenant any right of election to terminate the Lease or to surrender possession of the Premises if foreclosure proceedings are instituted.  Tenant shall, upon demand of any receiver in foreclosure, pay such receiver all base rent, additional rent and all other charges becoming due under the Lease after such demand.

6.Rights of New Landlord/Limitation of Liability.  Upon the occurrence of an event of default under the Deed of Trust, New Landlord (either acting directly or through an agent or representative or a receiver appointed by a court of competent jurisdiction at the request of New Landlord) shall be entitled to exercise the claims, rights, powers, privileges, options and remedies of the Borrower, as landlord, under the Lease and shall be further entitled to the

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benefits of, and to receive and enforce performance of, all of the covenants to be performed by Tenant under the Lease.  Unless or until Lender (or a New Landlord) takes title to the Property, and then, only to the extent provided herein, Lender shall not, by virtue of the Deed of Trust or this Agreement, or by virtue of any actions taken hereunder, thereunder or otherwise, be or become subject to any liability or obligation to Tenant under the Lease or otherwise.  Lender shall not be deemed a mortgagee in possession for any purpose.

7.New Lease and Further Instruments.  If the Lease is rejected pursuant to Section 365 of the Bankruptcy Code, 11 U.S.C § 101, et seq. or any similar provisions of law, or in any legal action or proceeding whatsoever, immediately upon request by the New Landlord or by the Tenant, Tenant and New Landlord shall enter into (i) a new written lease (the “New Lease”) for the remainder of the term of the Lease (as it may be extended pursuant to the terms of the Lease) on the same terms and conditions as the Lease, except for any changes made necessary because of the substitution of New Landlord in place of Borrower, as landlord, and (ii) a new written subordination agreement in substance comparable to this Agreement whereby Tenant agrees to subordinate the New Lease to the liens of the Deed of Trust which continue to encumber the Property and New Landlord and its lender agree that so long as an Event of Default by Tenant is not in existence under the New Lease, Tenant’s possession of the Premises will not be disturbed.

8.Continuation of Lease:  Upon attornment by Tenant pursuant to Section 4 of this Agreement, the Lease shall continue in full force and effect as a direct lease between the New Landlord and Tenant, upon all of the terms of the Lease, except that:  (a) notwithstanding anything to the contrary contained herein or in the Lease, in the event of foreclosure of the Deed of Trust or if Lender should otherwise acquire possession of the Property, the liability of the New Landlord shall be limited to its or their interest in the Property; and (b) the New Landlord shall not:

(i)be liable for any previous act, omission or default of the landlord under the Lease except to the extent specifically set forth in Section 11 of this Agreement; or

(ii)except as specifically set forth in Section 11 of this Agreement, be subject to any offset or defenses which shall have theretofore accrued to Tenant against the landlord under the Lease; or

(iii)be bound by any prepayment of more than one month’s base rent, additional rent or other charges due under the Lease unless such prepayment shall have been approved, in writing, by New Landlord, and such prepayment shall have been actually received by New Landlord; or

(iv)Except with respect to amendments or modifications to the Lease documenting Tenant’s unilateral exercise of its rights (collectively, “Space/Extension Rights”) with respect to (A) the reduction options under Section 1.6.1 and 1.9.1 of the Lease, (B) the Hold Space Option (as defined in Section 1.7.1 of the Lease), (D) the RFO Rights (as defined in Section 1.8.1 of the Lease), and (E) the Extension Options (as defined in Section 2.4.1 of the Lease), be bound by any modification or

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amendment of the Lease or by any cancellation or surrender of the Lease, unless the same shall have been approved, in writing, by New Landlord; or

(v)be liable to Tenant for any deposit, rental security or any other sums deposited with the landlord under the Lease and not delivered to New Landlord at foreclosure; or

(vi)be liable to Tenant for any work required to be performed to prepare the Property or Premises for Tenant’s occupancy or for payment of any allowances or contributions to the cost of any such work; or

(vii)be liable to Tenant for construction or restoration, or delays in construction or restoration, of the Property, or any part thereof resulting from a fire or other casualty occurring prior to the date that the New Landlord shall have acquired title to the Property; or

(viii)be liable to Tenant for any Lease buy-out agreements or obligations; or

(ix)be bound by any warranty or representation relating to work performed by the landlord under the Lease or to title to the Property.

9.Collection of Rent.  Tenant acknowledges that pursuant to the Deed of Trust, Borrower has granted to Lender, as Borrower’s assignee, the right to direct Tenant to pay to Lender (or Lender’s designee) the rents due under the Lease.  Tenant shall, within two (2) business days after receipt of a notice from Lender directing Tenant to pay such rentals to Lender (or Lender’s designee), pay all base rent, additional rent or other charges payable under the Lease to Lender (or Lender’s designee) until five (5) business days after Lender notifies Tenant to resume payment to Borrower.  Borrower joins in the execution of this Agreement for the purpose of irrevocably directing Tenant to make such rental payments in accordance with Lender’s directions, as set forth in this Section 9.  In complying with the provisions of this Section 9, Tenant shall be entitled to rely solely upon the notices given by Lender which are referred to in this Section 9.  Tenant shall be entitled to full credit under the Lease for any rents paid to Lender (or its designee) in accordance with the provisions of this Section 9 to the same extent as if such rents were paid directly to Borrower.

10.Certification and Estoppel.  Tenant and Landlord each hereby certify to Lender that as of the date hereof, (i) to their actual knowledge, there are no breaches or defaults on the part of the other party under the Lease and no event has occurred that but for the giving of notice or passage of time, or both, would constitute a breach or default under the Lease; (ii) the Lease is a complete statement of the agreement of the parties thereto with respect to the leasing of the Premises and there are no other agreements or understandings (including, without limitation, side letters or oral agreements) between Landlord and Tenant with respect to the Lease or the Premises; (iii) the Lease is in full force and effect; (iv) all conditions to the effectiveness and continuing effectiveness of the Lease required to be satisfied as of the date hereof (other than execution and delivery of this Agreement) have been satisfied; (v) no rent under the Lease has been paid more than thirty (30) days in advance of its due date under the Lease; and (vi) the Lease has not been

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amended, modified, or assigned.  Lender, however, acknowledges that this Agreement is being entered into concurrently with the execution of the Lease.

11.Tenant’s Offset Rights.  If New Landlord shall have acquired title to the Property, then, if, as between Tenant, as tenant under the Lease, and Borrower, as landlord under the Lease (i) Tenant shall, pursuant to the provisions of Section 9.3 of the Lease, be entitled to offset against payment of rental obligations next due and owning under the Lease, certain unpaid repair costs (together with interest at the Interest Rate), (ii) Tenant shall, pursuant to the provisions of Article 27 of the Lease, be entitled to offset against payment of rental obligations next due and owing under the Lease, certain amounts paid by Tenant to Tenant’s Broker (together with interest at the Interest Rate) or (iii) Tenant shall, pursuant to the provisions of Section 2.3.3 of the Work Letter attached to the Lease as Exhibit “C”, be entitled to offset against payment of rental obligations next due and owing under the Lease, certain Nondisbursed Amounts (as defined in Section 2.3.3 of the Work Letter) (together with interest at the Interest Rate), New Landlord shall recognize the rights of offset referenced in this Section 11 (provided that the parties hereto acknowledge that, except as specifically set forth in this Section 11, New Landlord shall not be required to recognize or otherwise give effect to any other rights of offset which Tenant may have against Borrower attributable to the period of time prior to the date New Landlord shall have required title to the Property, whether under the Lease or otherwise).

12.Amendments of Lease.  Except as provided in Section 8(iv) hereof, Borrower and Tenant each agree that any amendment, modification, surrender and/or cancellation taken without Lender’s written approval shall not be effective, except for cancellation or termination (i) on account of an Event of Default by Tenant or (ii) pursuant to the express provisions of Article 12 of the Lease, in the case of a casualty event, or of Article 13 of the Lease, in the case of a Taking; provided, however, that nothing contained herein shall reduce any rights of Tenant or Borrower under applicable laws or at equity to terminate the Lease on account of the default of the other party.

13.Notice to Lender.  Tenant agrees that if there occurs a default by the landlord under the Lease, a copy of each notice given to the landlord pursuant to the Lease shall also be given to Lender, and no such notice shall be effective for any purpose under the Lease unless so given to Lender.  Tenant shall permit Lender to cure any such default by the Landlord under the Lease, subject to the cure period set forth in the Lease.

14.Amendment/Entirety of Agreement/Binding Nature of Agreement.  This Agreement may not be modified orally or in a manner other than by an agreement in writing signed by the parties hereto or their respective successors in interest.  This Agreement contains the entire understanding between Borrower, Lender and Tenant, and may not be changed except by an instrument signed by the party to be charged.  This Agreement shall be binding upon and inure to the benefit of Borrower, Lender and Tenant and their respective successors and assigns.

15.Notices.  All notices, demands, statements, designations, approvals or other communications (collectively, “Notices”) given or required to be given by either party to the other hereunder or by law shall be in writing, shall be (a) delivered by a nationally recognized overnight courier or (b) delivered personally.  Any Notice shall be sent, transmitted, or delivered, as the case may be, to Lender, Tenant or Borrower, as the case may be, at the addresses set forth

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below, or to such other place as Lender, Tenant or Borrower may from time to time designate in a Notice to the other parties hereto at the addresses set forth herein, or to such other places as a party hereto may from time to time designate in a Notice to the other parties hereto.  Any Notice will be deemed given (i) the date the overnight courier delivery is made or (ii) the date personal delivery is made.

To Lender:

California State Teachers’ Retirement System

7667 Folsom Boulevard, Suite 250

Sacramento, California 95826

Attention: Mr. Michael Thompson and Douglas C. Wills, Esq.

With a copy to:

California State Teachers’ Retirement System

c/o Cox, Castle & Nicholson LLP

2049 Century Park East

Suite 2800

Los Angeles, California 90067

Attention: Amy H. Wells, Esq.

To Tenant:

City National Bank

555 South Flower Street

Suite 1100

Los Angeles, California 90071

Attention: Senior Vice President and Manager of Corporate Real Estate

With a copy to:

City National Bank

400 N. Roxbury Drive

Beverly Hills, California 90210

Attention: General Counsel

And with a copy to:

Pillsbury Winthrop LLP

725 S. Figueroa Street

Suite 2800

Los Angeles, California 90017

Attention: Michael Meyer, Esq.

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To Borrower:

TPG Plaza Investments, LLC

c/o Thomas Properties Group, LLC

515 South Flower Street

6th Floor

Los Angeles, California 90071

Attention: John Sischo

With a copy to:

Paul, Hastings, Janofsky & Walker LLP

515 South Flower Street

25th Floor

Los Angeles, CA 90071-2228

Attention: Patrick A. Ramsey, Esq.

16,Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. Signature and acknowledgment pages may be detached from the counterparts and attached to a single copy of this Agreement to physically form one document, which may be recorded.

17.Attorneys’ Fees.  In the event any legal proceeding is commenced to interpret or enforce the terms of this Agreement, or to recover damages for the breach hereof, the party prevailing in any such action or proceeding shall be entitled to recover from the non-prevailing party all reasonable attorneys’ fees, charges, costs and expenses incurred by the prevailing party.

18.Interpretation.  In the event any provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.  The headings hereof are for convenience only and are not intended to affect the meaning or interpretation of this Agreement.  This Agreement shall be governed by and construed in accordance with California law applicable to contracts made and to be performed entirely with such state.

[Signatures on following page]

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IN WITNESS WHEREOF, Lender, Borrower and Tenant have executed this Agreement as of the day and year first above written.

LENDER:

CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM

a public entity

By:

Name:

Title:

TENANT:

CITY NATIONAL BANK

a national banking association

By:

Name:

Title:

BORROWER:

TPG PLAZA INVESTMENTS, LLC

a Delaware limited liability company

By:	TPGA, LLC
	a Delaware limited liability company, its Managing Member
	By:	TPG/CALSTRS, LLC
		a Delaware limited liability company, its Managing Member
		By:	THOMAS PROPERTIES GROUP, LLC
			a Delaware limited liability company, its Managing Member
			By:
			Print Name:
			Title:

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EXHIBIT “A”

Legal Description

That certain real property located in the City of Los Angeles, County of Los Angeles, State of California, more particularly described as follows:

PARCEL 1:

LOTS 4, 5, 8, 9, 10, 13 TO 19 IN BLOCK 104 OF BELLEVUE TERRACE TRACT, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 2 PAGE 585 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPT THEREFROM THE NORTHERLY PORTION OF LOT 10 INCLUDED WITHIN THE LINES OF FIFTH STREET, AS NOW ESTABLISHED (60 FEET WIDE), AS CONDEMNED FOR THE OPENING AND WIDENING OF SAID FIFTH STREET, BY FINAL DECREE OF CONDEMNATION ENTERED IN CASE NO. B-94954, SUPERIOR COURT OF SAID COUNTY, BEING A STRIP OF LAND APPROXIMATELY 48/100THS FOOT WIDE AT THE EASTERLY END AND 28/100THS FOOT WIDE AT THE WESTERLY END THEROF, A CERTIFIED COPY OF SAID DECREE BEING RECORDED IN BOOK 5179 PAGE 357, OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

PARCEL 2:

THAT PORTION OF LOT 20 IN BLOCK 104 OF BELLEVUE TERRACE, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 2 PAGE 585 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:

BEGINNING AT THE MOST WESTERLY CORNER OF SAID LOT 20 IN THE SOUTHEASTERLY LINE OF FIGUEROA STREET; THENCE SOUTHEASTERLY ALONG THE SOUTHWESTERLY LINE OF SAID LOT 20, 165 FEET, MORE OR LESS, TO THE MOST SOUTHERLY CORNER OF SAID LOT; THENCE NORTHEASTERLY ALONG THE SOUTHEASTERLY LINE OF SAID LOT, 59.72 FEET TO THE SOUTHWESTERLY LINE OF PROPOSED FIFTH STREET, AS DESCRIBED IN THE INTERLOCUTORY DECREE OF CONDEMNATION IN LOS ANGELES COUNTY, SUPERIOR COURT CASE NO. B-94954; THENCE NORTHWESTERLY ANONG SAID SOUTHWESTERLY LINE, 165 FEET, MORE OR LESS, TO THE SOUTHEASTERLY LINE OF FIGUEROA STREET; THENCE SOUTHWESTERLY ALONG FIGUEROA STREET, 59.92 FEET TO THE POINT OF BEGINNING.

PARCEL 3:

THE EASTERLY 75.04 FEET OF LOTS 1 AND 2, THE EASTERLY 75.04 FEET OF THE SOUTHERLY 10 FEET OF LOT 3 AND THE NORTHERLY 50 FEET OF SAID LOT 3,

A-1

BLOCK 104 OF BELLEVUE TERRACE TRACT, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 2 PAGE 585 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY; ALSO LOT “B” OF TRACT NO. 3084, IN SAID CITY, COUNTY AND STATE, AS PER MAP RECORDED IN BOOK 31 PAGE 57 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS A WHOLE AS FOLLOWS:

BEGINNING AT THE MOST SOUTHERLY CORNER OF SAID LOT 1; THENCE NORTHERLY ALONG THE EASTERLY LINE OF SAID LOTS 1, 2, 3, 180 FEET TO THE MOST EASTERLY CORNER OF SAID LOT 3; THENCE WESTERLY ALONG THE NORTHERLY LINE OF SAID LOT 3, 165 FEET, MORE OR LESS, TO THE MOST NORTHERLY CORNER THEREOF; THENCE SOUTHERLY ALONG THE WESTERLY LINE OF SAID LOT 3, 50 FEET, TO THE MOST NORTHERLY CORNER OF LOT “A”, 46.31 FEET TO THE MOST NORTHERLY CORNER OF LOT “B” OF SAID TRACT; THENCE SOUTHERLY ALONG THE WESTERLY LINE OF SAID LOT “B”, 130 FEET TO THE MOST WESTERLY CORNER THEREOF, THENCE EASTERLY ALONG THE SOUTHERLY LINE OF SAID LOT “B” AND SAID LOT 1, 121.35 TO THE PLACE OF BEGINNING.

EXCEPT THEREFROM THE SOUTHERLY 5 FEET THEREOF CONDEMNED BY THE CITY OF LOS ANGELES FOR WIDENING OF SIXTH STREET.

PARCEL 4:

PART OF LOT 12, BLOCK 104 OF BELLEVUE TERRACE TRACT, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 1 PAGE 462, OF MISCELLANEOUS RECORDS AND IN BOOK 2 PAGE 585 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT IN THE EASTERLY LINE OF FIGUEROA STREET, DISTANT NORTHERLY ALONG THE SAME, 80 FEET FROM ITS INTERSECTION WITH THE NORTHERLY LINE OF SIXTH STREET, SAID POINT BEING THE MOST NORTHERLY CORNER OF SAID LAND CONVEYED TO A.C. LOCKWOOD, BY DEED RECORDED IN BOOK 193 PAGE 443 OF DEEDS; THENCE EASTERLY ALONG THE NORTHERLY LINE OF SAID LAND CONVEYED TO SAID LOCKWOOD AND ITS EXTENSION EASTERLY, 82.5 FEET, MORE OR LESS, TO THE WESTERLY LINE OF THE LAND CONVEYED TO OLIVER E. ROBERTS AND EMMA ROBERTS, BY DEED RECORDED IN BOOK 1549 PAGE 76 OF DEEDS; THENCE NORTHERLY ALONG SAID LAST MENTIONED LINE, 40 FEET, MORE OR LESS, TO THE NORTHERLY LINE OF SAID LOT 12; THENCE WESTERLY ALONG SAID NORTHERLY LINE OF SAID LOT 12, 82.5 FEET, MORE OR LESS, TO THE EASTERLY LINE OF FIGUEROA STREET; THENCE SOUTHERLY ALONG SAID EASTERLY LINE OF FIGUEROA STREET, 40 FEET, MORE OR LESS, TO THE POINT OF BEGINNING.

A-2

PARCEL 5:

LOTS “A” AND “B” OF TRACT NO. 2026, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 29 PAGES 22 AND 23 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPT THEREFROM THE SOUTHERLY 5 FEET THEREOF CONDEMNED BY THE CITY OF LOS ANGELES FOR WIDENING OF SIXTH STREET.

PARCEL 6:

THAT PORTION OF BLOCK 104 OF BELLEVUE TERRACE TRACT, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 1 PAGE 462 OF MISCELLANEOUS RECORDS AND IN BOOK 2 PAGE 585 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:

BEGINNING AT THE MOST SOUTHERLY CORNER OF LOT “B” OF TRACT NO. 2026, AS RECORDED IN BOOK 29 PAGES 22 AND 23 OF MAPS, RECORDS OF SAID COUNTY; THENCE NORTH 37 DEGREES 51 MINUTES EAST, ALONG THE SOUTHEASTERLY LINE OF SAID LOT “B”, 120 FEET, TO THE MOST EASTERLY CORNER OF SAID LOT “B”; THENCE SOUTH 52 DEGREES 06 MINUTES 00 SECONDS EAST, ALONG THE SOUTHEASTERLY PROLONGATION OF THE NORTHEASTERLY LINE OF LOT “B”, 45.09 FEET TO THE NORTHWESTERLY LINE OF LOT “A” OF TRACT NO. 3084, SHOWN ON MAP RECORDED IN BOOK 31 PAGE 87 OF MAPS, RECORDS OF SAID COUNTY; THENCE SOUTH 37 DEGREES 50 MINUTES 43 SECONDS WEST, ALONG SAID NORTHWESTERLY LINE, 120 FEET TO THE MOST WESTERLY CORNER OF SAID LOT “A”, THENCE NORTH 52 DEGREES 06 MINUTES WEST 45.09 FEET TO THE POINT OF BEGINNING.

EXCEPT THEREFROM THE SOUTHERLY 5 FEET THEREOF CONDEMNED BY THE CITY OF LOS ANGELES FOR WIDENING OF SIXTH STREET.

PARCEL 7:

LOT “A” OF TRACT NO.3084, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 31 PAGE 87 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPT THEREFROM THE SOUTHERLY 5 FEET AS CONDEMNED BY THE CITY OF LOS ANGELES FOR WIDENING OF SIXTH STREET.

PARCEL 8:

LOTS 6 AND 7, IN BLOCK 104, BELLEVUE TERRACE TRACT, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP

A-3

RECORDED IN BOOK 2 PAGES 585 OF MISCELLANEOUS RECORDS , IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

PARCEL 9:

PARCEL 2, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS SHOWN ON PARCEL MAP L.A. NO. 1896, FILED IN BOOK 24 PAGE 21 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPT THEREFROM, THOSE BUILDINGS AND IMPROVEMENTS ON PORTIONS OF SAID LAND MORE PARTICULARLY DESCRIBED AS PARCEL B IN A DIAGRAM ATTACHED TO A PURCHASE AGREEMENT AND A SALE AGREEMENT, RECORDED AUGUST 28, 1985 AS INSTRUMENT NOS. 85-997376 AND 85-997377, BOTH OFFICIAL RECORDS, RESPECTIVELY; TOGETHER WITH THE RIGHT TO USE AND OCCUPY AIRSPACE PORTION OF SAID LAND, AS DESCRIBED IN A MEMORANDUM OF AGREEMENT AFFECTING REAL PROPERTY, AND AN UNRECORDED ENABLING AGREEMENT DISCLOSED THEREIN, RECORDED FEBRUARY 25, 1985 AS INSTRUMENT NO. 85-210026.

ALSO, EXCEPT THEREFROM ANYAND ALL PORTIONS OF FLOWER STREET, FOURTH STREET AND OF HOPE STREET, ALL AS SHOWN ON SAID PARCEL MAP L.A. NO. 1896, WHICH MIGHT OTHERWISE PASS WITH A CONVEYANCE OF SAID PARCEL 2.

ALSO, EXCEPT FROM THAT PORTION OF SAID LAND LYING WITHIN THE BOUNDARIES OF THE PARCEL OF LAND DESCRIBED IN THE DEED NEXT HEREINAFTER REFERRED TO ALL OIL, GAS AND MINERAL SUBSTANCES TOGETHER WITH THE RIGHT TO EXTRACT SUCH SUBSTANCES PROVIDED THAT THE SURFACE OPEINING OF ANY WELL, HOLE, SHAFT, OR OTHER MEANS OF REACHING OR REMOVING SUCH SUBSTANCES SHALL NOT BE LOCATED WITHIN THE BUNKER HILL URBAN RENEWAL PROJECT AREA, AS RECORDED IN BOOK M-335 PAGE 106, OFFICIAL RECORDS, AND SHALL NOT PENETRATE ANY PART OR PORTION OF SAID PROJECT AREA WITHIN 500 FEET OF THE SURFACE THEREOF, AS RESERVED BY MARIE A. HUNTER, A WIDOW, IN DEED RECORDED JANUARY 31, 1964, AS INSTRUMENT NO. 2086 IN BOOK D-2343 PAGE 324, OFFICIAL RECORDS.

ALSO, EXCEPT FROM THAT PORTION OF SAID LAND LYING WITHIN THE BOUNDARIES OF THE PARCEL OF LAND DESCRIBED IN THE DEED NEXT HEREINAFTER REFERRED TO, ALL OIL, GAS AND MINERAL SUBSTANCES TOGETHER WITH THE RIGHT TO EXTRACT SUCH SUBSTANCES PROVIDED THAT THE SURFACE OPENING OF ANY WELL, HOLE, SHAFT OR OTHER MEANS OF REACHING OR REMOVING SUCH SUBSTANCES SHALL NOT BE LOCATED WITHIN THE BUNKER HILL URBAN RENEWAL PROJECT AREA, AS RECORDED IN BOOK M-335 PAGE 106, OFFICIAL RECORDS, AND SHALL NOT PENETRATE ANY PART OR PORTION OF SAID PROJECT OF SAID PROJECT AREA WITHIN 500 FEET OF THE SURFACE

A-4

THEREOF, AS RESERVED BY EVA AREVALO AND LEON J. AREVALO, IN DEED RECORDED OCTOBER 9, 1961, AS INSTRUMENT NO. 1288 IN BOOK D-1380 PAGE 795, OFFICIAL RECORDS.

ALSO, EXCEPT FROM THAT PORTION OF SAID LAND LYING WITHIN THE BOUNDARIES OF THE PARCEL OF LAND DESCRIBED IN THE DEED NEXT HEREINAFTER REFERRED TO ALL OIL, GAS AND MINERAL SUBSTANCES TOGETHER WITH THE RIGHT TO EXTRACT SUCH SUBSTANCES PROVIDED THAT THE SURFACE OPENING OF ANY WELL, HOLE, SHAFT OR OTHER MEANS OF REACHING OR REMOVING SUCH SUBSTANCES SHALL NOT BE LOCATED WITHIN THE BUNKER HILL URBAN RENEWAL PROJECT AREA, AS RECORDED IN BOOK M-335 PAGE 106 OFFICIAL RECORDS, AND SHALL NOT PENETRATE ANY PART OR PORTION OF SAID PROJECT AREA WITHIN 500 FEET OF THE SURFACE THEREOF, AS RESERVED BY SUNKIST GROWERS, INC., A CORPORATION, WHICH ACQUIRED TITLE AS CALIFORNIA FRUIT GROWERS EXCHANGE, A CORPORATION, IN DEED RECORDED JUNE 1, 1964, AS INSTRUMENT NO. 1248 IN BOOK D-2492 PAGE 255, OFFICAL RECORDS.

ALSO, EXCEPT FROM THAT PORTION OF SAID LAND LYING WITHIN THE BOUNDARIES OF THE PARCEL OF LAND DESCRIBED IN THE DEED NEXT HEREINAFTER REFERRED TO ALL OIL, GAS AND MINERAL SUBSTANCES TOGETHER WITH THE RIGHT TO EXTRACT SUCH SUBSTANCES PROVIDED THAT THE SURFACE OPENING OF ANY WELL, HOLE, SHAFT, OR OTHER MEANS OF REACHING OR REMOVING SUCH SUBSTANCES SHALL NOT BE LOCATED WITHIN THE BUNKER HILL URBAN RENEWAL PROJECT AREA, AS RECORDED IN BOOK M-335 PAGE 106, OFFICIAL RECORDS, AND SHALL NOT PENETRATE ANY PART OR PORTION OF SAID PROJECT AREA WITHIN 500 FEET OF THE SURFACE THEREOF, AS RESERVED BY PACIFIC ELECTRIC RAILWAY COMPANY, A CORPORATION, IN DEED RECORDED JUNE 15, 1962 IN BOOK D-1650 PAGE 756, OFFICIAL RECORDS, AS INSTRUMENT NO. 2623.

ALSO EXCEPT FROM THAT PORTION OF SAID LAND LYING WITHIN THE BOUNDARIES OF THE PARCEL OF LAND DESCRIBED IN THE DEED NEXT HEREINAFTER REFERRED TO, ALL OIL, GAS AND MINERAL SUBSTANCES TOGETHER WITH THE RIGHT TO EXTRACT SUCH SUBSTANCES PROVIDED THAT THE SURFACE OPENING OF ANY WELL, HOLE, SHAFT OR OTHER MEANS OF REACHING OR REMOVING SUCH SUBSTANCES SHALL NOT BE LOCATED WITHIN THE BUNKER HILL URBAN RENEWAL PROJECT AREA, AS RECORDED IN BOOK M-355 PAGE 106, OFFICIAL RECORDS, AND SHALL NOT PENETRATE ANY PART OR PORTION OF SAID PROJECT AREA WITHIN 500 FEET OF THE SURFACE THEREOF, AS EXCEPTED IN DECREE OF CONDEMNATION LOS ANGELES COUNTY, SUPERIOR COURT CASE NO. 838425, A CERTIFIED COPY THEREOF BEING RECORDED MARCH 10, 1966, AS INSTRUMENT NO. 3385 IN BOOK D-3233 PAGE 383, OFFICIAL RECORDS.

ALSO EXCEPT FROM THAT PORTION OF SAID LAND LYING WITHIN THE BOUNDARIES OF THE PARCEL OF LAND DESCRIBED IN THE DEED NEXT

A-5

HEREINAFTER REFERRED TO ALL OIL, GAS, WATER OR MINERAL RIGHTS, BUT WITHOUT ANY RIGHT TO PENETRATE, USE OR DISTURB THE PROPERTY WITHIN 500 FEET OF THE SURFACE THEREOF, AS RESERVED BY THE CITY OF LOS ANGELES, A MISSOURI CORPORATION, IN DEED RECORDED JANUARY 30, 1969, AS INSTRUMENT NO. 123 IN BOOK D-4263 PAGE 544, OFFICAL RECORDS.

ALSO EXCEPT FROM THAT PORTION OF SAID LAND LYING WITHIN THE BOUNDARIES OF THE PARCEL OF LAND DESCRIBED IN THE DEED NEXT HEREINAFTER REFERRED TO, ALL OIL, GAS AND MINERAL SUBSTANCES TOGETHER WITH THE RIGHT TO EXTRACT SUCH SUBSTANCES PROVIDED THAT THE SURFACE OPENING OF ANY WELL, HOLE, SHAFT, OR OTHER MEANS OF REACHING OR REMOVING SUBSTANCES SHALL NOT BE LOCATED WITHIN THE BUNKER HILL URBAN RENEWAL PROJECT AREA, AS RECORDED IN BOOK M-335 PAGE 106, OFFICIAL RECORDS, AND SHALL NOT PENETRATE ANY PART OR PORTION OF SAID PROJECT AREA WITHIN 500 FEET OF THE SURFACE THEREOF, AS RESERVED BY GREATER LOS ANGELES PLANS, INC. A NON-PROFIT ORGANIZATION, IN DEED RECORDED MAY 16, 1961, AS INSTRUMENT NO. 1598 IN BOOK D-1222 PAGE 589, OFFICAL RECORDS.

ALSO EXCEPT FROM THE REMAINDER OF SAID PARCEL 2, ALL OIL, GAS AND MINERAL SUBSTANCES TOGETHER WITH THE RIGHT TO EXTRACT SUCH SUBSTANCES PROVIDED THAT THE SURFACE OPENING OF ANY WELL, HOLE, SHAFT, OR OTHER MEANS OF REACHING OR REMOVING SUCH SUBSTANCES SHALL NOT BE LOCATED WITHIN THE BUNKER HILL URBAN RENEWAL PROJECT AREA, AS RECORDED IN BOOK M-335 PAGE 106, OFFICIAL RECORDS, AND SHALL NOT PENETRATE ANY PART OR PORTION OF SAID PROJECT AREA WITHIN 500 FEET OF THE SURFACE THEREOF AS RESERVED BY UNITED CALIFORNIA BANK FORMERLY CALIFORNIA BANK, A CORPORATION, IN DEED RECORDED OCTOBER 5, 1961 AS INSTRUMENT NO. 1664 IN BOOK D-1377 PAGE 996, OFFICIAL RECORDS.

A-6

EXHIBIT “B”

Description of the Premises

That certain Premises as more specifically described in the Lease by and between Landlord and Tenant.

1

EXHIBIT “Y”

DEFINITION OF BofA LEASE

Plaza Pavilion Lease dated on or about September 16, 1986 (the “Original Plaza Lease”) by and between Shuwa Investments Corporation, a California corporation (“Shuwa”), predecessor-in-interest to Landlord, as landlord, and Bank of America National Trust and Savings Association, a national banking association (“BofA”), as tenant, as amended by that certain First Amendment to Plaza Pavilion Lease dated on or about September 15, 1992 (the “Plaza First Amendment”) by and between Shuwa and BofA. The Original Plaza Lease as amended by the Plaza First Amendment are collectively referred to herein as the “BofA Plaza Lease.”

Office Building Lease dated on or about September 16, 1986 (the “Original South Tower Lease”) by and between Shuwa, as landlord, and BofA, as tenant, as amended by that certain (i) First Amendment to Office Building Lease and First Amendment to Guaranty Agreement (Short Term Space) dated on or about September 13, 1989 (the “South Tower First Amendment”) by and between Shuwa and BofA, (ii) Second Amendment to Office Building Lease and Second Amendment to Guaranty Agreement (Short Term Space) dated on or about December 26, 1989 (the “South Tower Second Amendment”) by and between Shuwa and BofA, (iii) Third Amendment to Office Building Lease and Third Amendment to Guaranty Agreement (Short Term Space) dated on or about January 19, 1990 (the “South Tower Third Amendment”) by and between Shuwa and BofA, (iv) Fourth Amendment to Office Building Lease dated on or about September 15, 1992 (the “South Tower Fourth Amendment”) by and between Shuwa and BofA, and (v) fifth Amendment to Lease dated on or about December 11, 1998 (the “South Tower Fifth Amendment”) by and between Shuwa and BofA. The Original South Tower Lease as amended by the South Tower First Amendment, the South Tower Second Amendment, the South Tower Third Amendment, the South Tower Fourth Amendment and the South Tower Fifth Amendment are collectively referred to herein as the “BofA South Tower Lease.”

The BofA Plaza Lease and the BofA South Tower Lease are collectively referred to herein as the “BofA Lease.”

EXHIBIT “Z”

DEFINITION OF THE ARCO LEASE

Office Building Lease dated on or about September 16, 1986 (the “Original Lease”) by and between Shuwa Investments Corporation, a California corporation (“Shuwa”), predecessor-in-interest to Landlord, as landlord, and Atlantic Richfield Company, a Delaware corporation (“ARCO”), as tenant, as amended by that certain (i) Amendment to Office Lease dated on or about May 31, 1995 (the “First Amendment”) by and between Shuwa and ARCO, (ii) Second Amendment to Lease dated on or about March 5, 1997 (the “Second Amendment”) by and between Shuwa and ARCO, (iii) Third Amendment to Leased dated on or about June 13, 2001 (the “Third Amendment”) by and between Shuwa and ARCO, and (iv) Fourth Amendment dated on or about June 21, 2001 (the “Fourth Amendment”) by and between Shuwa and ARCO. The Original Lease as amended by the First Amendment, the Second Amendment, the Third Amendment and the Fourth Amendment are collectively referred to herein as the “ARCO Lease.”

EXHIBIT “AA”

OTHER TENANT LEASES

1.BofA Lease (as defined in Exhibit “Y”);

2.ARCO Lease (as defined in Exhibit “Z”);

3.Paul Hastings Lease (as defined in Exhibit “Q”);

4.US Trust Lease (as defined in Exhibit “Q”); and

5.DMJM Lease (as defined in Exhibit “Q”).

EXHIBIT BB

Rentable Area of Full Floors

South Tower

Floor	USF	RSF
SOUTH TOWER
South 3	21,713	24,979
South 4	21,713	24,979
South 5	21,713	24,979
South 6	21,713	24,979
South 7	21,713	24,979
South 8	21,713	24,979
South 9	21,713	24,979
South 10	21,713	24,979
South 11	21,713	24,979
South 12	21,713	24,979
South 13	21,687	24,962
Mechanical Floors
South 16	22,186	25,485
South 17	22,186	25,485
South 18	22,186	25,485
South 19	22,186	25,485
South 20	22,224	25,531
South 21	22,224	25,531
South 22	22,224	25,531
South 23	22,224	25,531
South 24	22,224	25,537
South 25	22,224	25,531
South 26	22,224	25,531
South 27	21,891	25,129
South 28	21,891	25,075
South 29	23,027	26,386
South 30	23,027	26,386
South 31	23,027	26,386
South 32	23,027	26,386
South 33	23,027	26,386
South 34	23,027	26,386
South 35	23,027	26,386
South 36	23,027	26,386
South 37	23,027	26,386
Mechanical Floors
South 40	23,885	27,280
South 41	23,885	27,280
South 42	23,885	27,280
South 43	23,885	27,280
South 44	23,885	27,280
South 45	23,885	27,280
South 46	23,885	27,280
South 47	23,885	27,280
South 48	23,885	27,280
South 49	23,885	27,280
South 50	23,885	27,280
South 51	23,851	27,243
South Tower Totals	1,020,747	1,170,416

EXHIBIT “CC”

Project Upgrades

1.             Upgrade Project Name: Main Ground Floor Lobby Upgrades at the North South Towers.

(a)Estimated Start Date:           May 2003; Estimated completion date: December 2004

(b)Project Description:             This Project Upgrade includes, without limitation, in both North South Tower main building ground lobbies, installation of securtiy barriers using card reader controlled optical turnstiles and two new security consoles. These security upgrades will allow Landlord to reopen the existing entrances on the plaza side of each Tower ground floor lobby. The new security consoles are designed to wrap around the existing granite consoles to minimize the demolition of the original building design. The new visitor access management check-in system has been incorporated into the consoles that will extend wider than the originals to accommodate security personnel and provide better check-in for visitors to the building. Recoat Main Lobby ground floor window mullions at exterior surfaces. Additionally, lighting upgrades are being evaluated to enhance the overall lobby appearance.

2.             Upgrade Project Name: Lower Level Lobbies and Valet Drop Off Area Upgrade Project.

(a)Estimated start date:            April 2003; estimated completion date: December 2005.

(b)Project Description:             This Project Upgrade includes, without limitation, the upgrade of the driveways in and to the A Level garage with the introduction of new way finding and lighting treatments to assist with directional and visual enhancements. The valet drop off area will be upgraded with new signage and way finding graphics.

3.             Upgrade Project Name: Plaza Upgrade Program

(a)Estimate start date: January 2004; Estimated completion date: December 2007.

(b)Project Description: This Project Upgrade includes, without limitation, installation of large pylon signage elements at the four corners of the property. These elements will be lit at night. The pylons will accommodate future major and secondary tenant signage as well as plaza identification signage at the bottom of each pylon. The pylon portion of this Project Upgrade shall be limited to * conceptual design of the Plaza also includes upgrades to the existing fountain, as well as the introduction of new shade canopies, seating and wireless interned access. An architectural light installation by a selected artist is being considered to bring the two Towers together visually.

4.             Upgrade Project Name: Retail Renovation Project

(a)Estimated start date: January 2004; Estimated completion date: December 2008.

(b)Project Description: This Project Upgrade includes, without limitation consolidation of all “C” Level retail stores onto the B-Level. The existing atrium opening between levels B and C will be closed. Selective areas will be upgraded with new storefronts, lighting, graphics and floor materials. This Project Upgrade shall be limited to*

5.             Intentionally Omitted.

6.             Upgrade Project Name: Elevator Modernization Program

(a)Estimated start date: December 2003; Estimated completion date: December 2006.

(b)Project Description: This Project Upgrade includes, without limitation, renovation of elevator cab interiors and installation of new security card readers. To the extent appropriate, upgrade controls, realign vertical rails and adjust timing and floor stop leveling. Such Project Upgrade may include ACM abatement specifically related to said work.

7.             Intentionally Omitted.

8.             Upgrade Project Name: Visitor Management System

(a)Estimated start date: September 2003; Estimated completion date:  November 2003.

(b)Project Description: This Project Upgrade includes, without limitation, a new security access management system to control card reader points of entry. The system is compatible with the existing HID card access system at the garage entries and will be extended into the future optical turn-styles at the main building lobbies. This system upgrade will allow tenants to prearrange visitor access through a website in order to expedite the check-in process more efficiently.

9.             Intentionally Omitted.

10.           Intentionally Omitted.

11.           Upgrade Project Name: Domestic Water Riser Replacement Project

(a)Estimated start date:  June 2004; Estimated completion date: December 2006

(b)Project Description:  This Project Upgrade includes, without limitation, upgrading the domestic water supply main vertical risers and domestic water pumps in both towers.

12.           Upgrade Project Name: Central Plant Upgrade Program

(a)Estimated start date:  July 2004; Estimated completion date: December 2008.

(b)Project Description:  This Project Upgrade includes, without limitation, chiller retrofits to provide power cost savings and reduce the actual cost of providing after-hours HVAC.

[GRAPHIC]

EXHIBIT “DD”

DEPICTION OF CONTEMPLATED CHANGES
TO THE PLAZA AREA

2

[GRAPHIC]

3

[GRAPHIC]

4

EXHIBIT EE

[GRAPHIC]

[GRAPHIC] CONTEMPLATED CONVERSION AREA

EXHIBIT FF

[GRAPHIC]

[GRAPHIC] CONTEMPLATED CONVERSION AREA

EXHIBIT GG

[GRAPHIC]

[GRAPHIC] PEDESTRIAN PASSAGEWAYS

EXHIBIT HH

[GRAPHIC]

[GRAPHIC] PEDESTRIAN PASSAGEWAYS

[GRAPHIC]

[GRAPHIC]	= Continuing Lobby Areas
	PLAZA LEVEL SOUTH TOWER
	PROJECT:	DATE:
[DMJM DESIGN LOGO]	ARCO PLAZA	11/10/03
515 SOUTH FLOWER STREET, 8TH FLOOR, LOS ANGELES, CA 90071
[ILLEGIBLE] 213. 593.8100 F; 213. 593.8608  www.dmjm.com	SCALE:  1" = 30'– 0"

EXHIBIT “II”

DEPICTION OF THE CONTINUING
LOBBY AREAS

1

[GRAPHIC]

[GRAPHIC]	= Continuing Lobby Areas
	PLAZA LEVEL SOUTH TOWER
	PROJECT:	DATE:
[DMJM DESIGN LOGO]	ARCO PLAZA	11/10/03
515 SOUTH FLOWER STREET, 8TH FLOOR, LOS ANGELES, CA 90071
[ILLEGIBLE] 213. 593.8100 F; 213. 593.8608  www.dmjm.com	SCALE:  1" = 30'– 0"

2

EXHIBIT “JJ”

TENANT’S SOUTH TOWER A-LEVEL ATM AREA

The South Tower A-Level ATM Area shall be any area in the lobby/vestibule of the A-Level directly below the South Tower, as mutually and reasonably agreed to by Tenant and Landlord.

[GRAPHIC]

[GRAPHIC]	= North Tower Ground Floor Lobby ATM Area
	PLAZA LEVEL NORTH TOWER
	PROJECT:	DATE:
[DMJM DESIGN LOGO]	ARCO PLAZA	11/10/03
515 SOUTH FLOWER STREET, 8TH FLOOR, LOS ANGELES, CA 90071
[ILLEGIBLE] 213. 593.8100 F; 213. 593.8608  www.dmjm.com	SCALE: 1" = 30'– 0"

EXHIBIT “KK”

DEPICTION OF THE
NORTH TOWER GROUND FLOOR LOBBY
ATM AREA

[GRAPHIC]

[GRAPHIC]	= South Tower Ground Floor Lobby ATM Area
	PLAZA LEVEL NORTH TOWER
	PROJECT:	DATE:
[DMJM DESIGN LOGO]	ARCO PLAZA	11/10/03
515 SOUTH FLOWER STREET, 8TH FLOOR, LOS ANGELES, CA 90071
[ILLEGIBLE] 213. 593.8100 F; 213. 593.8608  www.dmjm.com	SCALE: 1" = 30'– 0"

EXHIBIT “LL”

DEPICTION OF THE
SOUTH TOWER GROUND FLOOR LOBBY
ATM AREA

[GRAPHIC]

EXHIBIT “MM”

DEPICTION OF THE PORTION OF THE
DOWNTOWN LOS ANGELES CENTRAL BUSINESS DISTRICT
FOR LOCATION OF COMPARABLE BUILDING

EXHIBIT “NN”

OPERATIONAL CRITERIA FOR HVAC SERVICE

Base Building HVAC System Design and Performance Criteria

1.             Design Conditions:

	Summer	Winter
a.Outside Dry Bulb:	99°F	41°F
Outside Wet Bulb:	72°F	—
Inside Dry Bulb:	75°F	70°F
Inside Relative Humidity:	30%-60%	30%-60%
Mean Daily Range:	21°F	—

b.     Minimum Ventilation: Per ASHRAE Standard 62-1989 but not less than 15.0 CFM/100 square feet.

c.     Air Supply Rate:

a.Maximum air supply rate of 0.8 cfm/square foot of air-conditioned space in the interior areas.

b.Primary air supply rate of 0.7 cfm/square foot in the perimeter zones at the induction units.  Total air movement from induction units including the primary air and induced air will be close to 1.5 cfm square feet or higher.

2.             Interior Loads:

a.     Lights: 1.5 watts/square foot maximum. 1.2 watts/square foot average.

b.Miscellaneous Equipment: Maximum continuous heat output equal to 2.0 watts/square foot (6.6 BTU/square foot of conditioned space.)

c.People: 150 square feet/person.

3.             Air Handling System:

a.Perimeter zones of building–induction units: Each unit with a thermostatically controlled valve for cooling and heating control. Ventilation outdoor air to these units is from the primary air system. Induction units will provide cooling and heating to offset solar, transmission, lighting power and people load for a perimeter zone depth of 15 feet maximum.

b.Sixty-eight induction units per floor around the build perimeter.

c.Unit  cooling capacity and heating capacity varies for each exposure. Capacities vary from 6,000 BTU/hour to 9,000 BTU/hour per unit.

d.Interior zones of building: Multiple central station air handler units located in mechanical equipment floors. Each unit has duct riser serving multiple floors. Total of five riser outlets per floor. Tenant HVAC designer to ensure uniform loading of each riser takeoff on each tenant floor.

e.Units shall supply cooled air at 55°F minimum to 65°F maximum as needed to meet the interior space cooling loads.

4.             Cooling Capacity per Floor:

a.Total cooling capacity per floor which includes the perimeter induction units and interior system shall be no less than 80 tons per floor.

5.             Refrigeration System:

a.Building has four water chillers, two chillers rated at 3100 tons each, one chiller rated at 2200 tons and one rated at 1600 tons. Chillers are located in the basement chiller room. Chillers produce chilled water at 42°F for distribution to the air handling system.

6.             Building Heating System:

a.Building’s heating is by hot water with steam to hot water heat exchangers. Primary source of heat is two steam boilers located in basement boiler room.

b.Hot water is distributed to air -handler units and reheat coils throughout the building. Total installed boiler capacity is slightly more that 1000 HP.

7.             Tenant Supplementary Cooling:

a.Base building does not have provisions to supply chilled water to tenants for supplementary cooling or 24 hours cooling at this time.

1

EXHIBIT “NN”

OPERATIONAL CRITIERA FOR HVAC SERVICE

b.Mechanical equipment rooms on the 14-15 floors or 38-39 floors can accommodate tenant supplementary cooling equipment, such as dry coolers, cooling towers or chillers subject to space availability.

END OF SECTION

2

EXHIBIT “OO”

PAYMENTS UNDER ANY DECLARATIONS, COVENANTS, CONDITIONS
AND RESTRICTIONS OR INSTRUMENTS PERTAINING TO THE OPERATION
OF THE PROJECT OR THE MAINTENACE OF ANY EASEMENT,
LICENSE OR OPERATING AGREEMENT OR SIMILAR
INSTRUMENT WHICH AFFECTS THE PROJECT

None.

[GRAPHIC]

CITY NATIONAL BANK NAMING RIGHTS STUDY OPTION A2 11.12.03 1/4" = 1' -0" [SP LOGO]

EXHIBIT “PP”

FUTURE PYLON SIGNS

EXHIBIT “QQ”

LOCATION OF OTHER PROJECT SIGNS

The location of the “Other Project Signs” are generally shown on:

(i)  Page A3-1(a) of Exhibit “P” as “City National Plaza Parking ID” and “City National Plaza Parking Information”;

(ii)  Page A2-4 of Exhibit “P” as “City National Plaza – Parking ID and Info” and “City National Tower”;

(iii)  Page A2-3 of Exhibit “P” (all signs shown); and

(iv)  Page A2-6 of Exhibit “P” (all signs shown).

EX-12

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Exhibit 12

Computation of Ratio of Earnings to Fixed Charges
and Preferred Stock Dividend Requirements
(in thousands, except ratios)

			Year Ended December 31,
			2008			2007			2006			2005			2004
Excluding interest on deposits
Income before income taxes			$	152,361		$	353,373		$	366,886		$	376,556		$	329,751
Minority interest expense				5,378			8,856			5,958			5,675			4,992
Equity investee income				(3,633	)		(6,983	)		(5,647	)		(2,068	)		(1,168	)
Equity investee distributions				3,914			6,629			4,844			2,234			1,337
Preferred dividends of consolidated subsidiaries				(3,145	)		(3,434	)		(3,407	)		(3,478	)		(3,462	)
Fixed charges:
	Interest expense (1)			62,958			72,416			63,700			32,712			16,607
	Interest within rental expense			11,913			10,300			9,644			8,439			8,535
	Preferred dividends of consolidated subsidiaries			3,145			3,434			3,407			3,478			3,462
		Total fixed charges	$	78,016		$	86,150		$	76,751		$	44,629		$	28,604
Total earnings and fixed charges			$	232,891		$	444,591		$	445,385		$	423,548		$	360,054
Fixed charges, as above			$	78,016		$	86,150		$	76,751		$	44,629		$	28,604
Preferred stock dividends				3,225			—			—			—			—
Fixed charges including preferred stock dividends			$	81,241		$	86,150		$	76,751		$	44,629		$	28,604
Ratio of earnings to fixed charges and preferred stock dividend requirements				2.87			5.16			5.80			9.49			12.59
Including interest on deposits
Total earnings and fixed charges, as above			$	232,891		$	444,591		$	445,385		$	423,548		$	360,054
Add: Interest on deposits				122,990			214,680			159,024			76,045			44,258
	Total earnings, fixed charges and interest on deposits		$	355,881		$	659,271		$	604,409		$	499,593		$	404,312
Fixed charges, including preferred stock dividends, as above			$	81,241		$	86,150		$	76,751		$	44,629		$	28,604
Add: Interest on deposits				122,990			214,680			159,024			76,045			44,258
	Total fixed charges including preferred stock dividends and interest on deposits		$	204,231		$	300,830		$	235,775		$	120,674		$	72,862
Ratio of earnings to fixed charges and preferred stock dividend requirements				1.74			2.19			2.56			4.14			5.55

(1)

Includes interest expense on uncertain tax positions

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Exhibit 12

Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividend Requirements (in thousands, except ratios)

EX-21

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Exhibit 21

Parent and subsidiaries

City National Corporation
        City National Bank (100%)

City National Corporation ("Registrant") is a corporation organized under the laws of the State of Delaware. City National Bank is a national banking association organized under the laws of the United States of America. Registrant owns 100 percent of the outstanding capital stock of City National Bank ("Bank").

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Exhibit 21

EX-23

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Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors
City National Corporation:

        We consent to the incorporation by reference in the registration statements (Nos. 333-01993, 333-87719, 333-61854, 333-88118, 33-56632, 333-151375 and 333-139215) on Form S-8, (No. 333-104395) on Form S-4 and (No. 333-156275) on Form S-3ASR of City National Corporation of our reports dated February 26, 2009, with respect to the consolidated balance sheets of City National Corporation and subsidiaries as of December 31, 2008 and 2007, and the related consolidated statements of earnings, shareholders' equity and comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 2008, and the effectiveness of internal control over financial reporting as of December 31, 2008, which reports appear in the December 31, 2008 annual report on Form 10-K of City National Corporation.

        Our report on the consolidated financial statements refers to changes in 2008 in City National Corporation's method of accounting for fair value, and in 2007 City National Corporation changed its method of accounting for uncertainty in income taxes.

KPMG LLP

Los Angeles, California
February 26, 2009

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Exhibit 23

EX-31.1

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Exhibit 31.1

CHIEF EXECUTIVE OFFICER SECTION 302 CERTIFICATION

I, Russell Goldsmith, certify that:

1.

I have reviewed this annual report on Form 10-K of City National Corporation;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.

All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

DATE: February 27, 2009 /s/ RUSSELL GOLDSMITH
RUSSELL GOLDSMITH
Chief Executive Officer

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Exhibit 31.1

EX-31.2

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Exhibit 31.2

CHIEF FINANCIAL OFFICER SECTION 302 CERTIFICATION

I, Christopher Carey, certify that:

1.

I have reviewed this annual report on Form 10-K of City National Corporation;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a.

All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

DATE: February 27, 2009 /s/ CHRISTOPHER J. CAREY
CHRISTOPHER J. CAREY
Chief Financial Officer

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Exhibit 31.2

EX-32.0

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Exhibit 32.0

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Annual Report of City National Corporation (the "Company") on Form 10-K for the period ending December 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), we, Russell Goldsmith, Chief Executive Officer of the Company, and Christopher J. Carey, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge, based on a review of the Report of the Company, and except as corrected or supplemented in a subsequent report:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

DATE: February 27, 2009	/s/ RUSSELL GOLDSMITH RUSSELL GOLDSMITH Chief Executive Officer
DATE: February 27, 2009	/s/ CHRISTOPHER J. CAREY CHRISTOPHER J. CAREY Chief Financial Officer

        A signed original of this written statement required by Section 906 has been provided to City National Corporation and will be retained by City National Corporation and furnished to the Securities and Exchange Commission upon request.

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Exhibit 32.0