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HomeMy WebLinkAboutMaterials received after packet deliveryMaterial(s) received after the Planning Commission packets were distributed, or received at the meeting. These material(s) were distributed to staff, Commissioners and made available to the public. Page 1 of 1 Varin, Ginger From: Denise MacMurray [dmacmurray @bremerandwhyte.com) Sent: Thursday, July 17, 2008 11:10 AM To: arburns @harperburns.com; eaton727 @earthlink.net; rhawkins@earthlink.net; soott.peotter @taxfighter.com; strataland @earthlink.net; bhillgren @highrhodes.00m; emcdaniel @metropacificbank.com; cwunsworth @roadrunner.com; Varin, Ginger; jailin @awattorneys.com; Alford, Patrick; Lepo, David Cc: christineoverstreet @mac.com; Christopher Thomas Subject: 3400 Via Lido Use Permit Attachments: Ailin- Bums001 with attachments.pdf Attached please find correspondence from Christopher Thomas regarding the use permit at 3400 Via Lido. Denise Macmurray Bremer Whyte Brown & O'Meara, LLP 20320 S.W. Birch Street 2nd Floor Newport Beach, CA 92660 949.221.1000 949.221.1001 fax BWBO is going Green! We prefer communication and attachments via a -mail. B'REME H'"TE 18 jt Vn Fl IV & 0 A UX CONFIDENTIALITY NOTICE: This E -mail may contain confidential information that is legally privileged. Do not read this e-mail if you are not the intended recipient. This e-mail transmission, and any documents, files or previous e-mail messages attached to it may contain confidential information that is legally privileged. If you are not the intended recipient, or a person responsible for delivering it to the intended recipient, you are hereby noted that any disclosure, copying, distribution or use of any of the information contained in or attached to this transmission is STRICTLY PROHIBITED. 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Note that our letters and a -mails are not intended to meet the "Covered Opinion" test. * Please note, this statement shall not be construed as an agreement to accept service of court documents /filings or discovery related items via electronic service. 07/17/2008 P ! P - -k"-L,P1 7 -i-i -ate MEM a Ak-p" Exhibit A Letter to Counsel June S. Ailin, Esq. dated July 17, 2008, A -1 thru A -3 from Christopher L. Thomas, Es q. Letters of Support from: Exhibit B Gondola Company of Newport B -1 thru B -4 A Square LLC Charlie's Locker D. Kruse Exhibit C Email Correspondence from Arthur Stockton to Christine C -1 thru C-4 and Dennis Overstreet Exhibit D Conditional Use Permit Compliance Efforts D -1 thru D -19 Exhibit in 2002 CUP Proceedings: Exhibit E Overstreet's Wine Bar Menu E -1 thru E -11 Exhibit F CA Department of Alcoholic Beverage Control License F -1 thru F -2 Summary - Se'our LLC Exhibit G Notice of Final Approval CUP Amendment and G -1 thru G -7 Conditions, dated 12/9/2002 State Bar {CA, AZ} Information: Exhibit H Arthur F. Stockton H -1 thru H -6 Carolyn C. Stockton NV Secretary of State Information: Svelte Body Centers, Inc. Doc cnC i fy 1 s NICq.EwH e KERH Q aRHAffR' GYMWV�I.8YR1R' Pfi'IS V. 0MNT1' lONN v, aM3AA,A' &018 KTICKN®.' WYMM ID M QpFlBNHAV58R' TAIpM 8ffi!0{rA6NAar" NBL &MHHBN DAWD K1niMWM J A x MOLIUA81' mHNNMAV KA1 M.ti KARBNM, BAVT931P MDN19V80. LM CHO STePHAN18 cARPurI.' GP WEP. CA8P0lIER' 9HO0.9a1. HAND, R" ANCIIHW CRANFA^ A0.ASHS.A LANHYfA 0.W.R W.0.HJ0M0.Y WHMTEGMWW ?AM & AH8R L11PoMAP M AFA(e em YN�wUme A KHN88V' Idm130 m e 6611 K 8ARKBe 0 A V. CO)' c08MTLBodc88P' GPf N34 8V018rrL O .M1 M o )AaPASmwast4 MICXA®.A SANGS1alIM1f aHa0.�wltME113IXfP' REMER WHYTE BROWN & O'AIEARA LLP. - BREMER W1IYTE — ATTORNEYS 2W20 S.W. BIRCH STREET SECOND FLOOR NEWPORT BEACH, CALIFORNIA 92660 (949)221 -1000 (949)221 -1001 FAX www.broma dwhyta.wm July 17, 2008 Jude S. Ailin, Esq. Allen R. Burns ALESHIRE WYNDER, LLP HARPER & BURNS, LLP 1515 West 190th Street 453 South Glassell Street Suite 565 Orange, CA 92866 Gardena, CA 90248 Re: 3400 Via Lido Newport Beach Planning Commission Agenda Item No. 4 July 17, 2008 B &W Client: Dennis & Christine Overstreet B &W Rile No.: 3506,001 Dear Ladies and Gentlemen: hill aH8a3UX RLW N 110 wOWLAiH)HHJd,GUI ) w ml wP3F lROAB�IAV aura 1 m SA (61' GFS101 n1ryE F (6U1])8Wll AX „,. S Tww uvH0.81uK GUifw n!1)1) D141A1 ]NaiN PA% 11 U Al1SllH1 wAY Slmn 1 H011S Unw UMI %NUM31 UR1 U8iwYFA% yam we3ri�MW Su6H m LAE VBaAR MBVAW 61M Wend F Fran iw�P3w FFA ®% JNU' .Y81'a0i1' 38118 Mu FN�nMH nun rm iml nRnli AMFAX PAULHBMtYH31W3de Ilse -iuy In reference to the above, we represent Christine and Dennis Overstreet, the owners of 3400 Via Lido, Newport Beach. This property was leased to Arthur Stockton dba Sejour European Bistro and Lounge by the Overstreets. As the owners of the property, the Overstreets had nothing to do with their tenants alleged violations of the use permit which brought us to the point of this modification hearing. In fact, the modification of the instrument which takes away the amendment allowing the sale of D==mt4 i June S. Ailin, Esq. Allen R. Bums BWB &O File No.: 3506.001 July 17, 2008 Page 2 distilled spirits is in essence a revocation of the permit. As you know, the Overstreets object to the revocation of the Type 47 license. It is their position that they were given no notice in a timely manner of the alleged violations which would have allowed them to go to their tenant and remedy the situation. The Overstreets operated the 3400 Via Lido location for 3 %z years without any citation from the City for any violations. It is unfortunate that this entire situation was brought about by a tenant who is no longer operating in the property. In substance there is no reason for a modification or a revocation of the permit, as it is no longer in use. It would be an unjustified negative stigma to the Overstreets. As you are aware, the Overstreets have been very active in negotiations to attempt to lease the property as office space. They have also been attempting to in good faith to reach some resolution of this matter with the City Planning Department. We have been involved in active discussions with David Lepo and Patrick Alford. We received your proposed findings of fact, and if the matter cannot be resolved short of a full revocation hearing, then we would object to any such findings. Finally, I am enclosing the exhibits which we have distributed which we think are relevant to the issues in the event of the hearing. Thank you very much for your professional courtesy and cooperation. Very truly yours, cthomas @bremerandwhyte.com CLT:dsm H: 135D610011CorAAilin- BumsODl.don m x x W AL January 17, 2006 To Whom it May Concern* GONDOLA COMPANY Beach Quroraia We have been merchants in Lido Marina Village for 15 years. We have no objection to the Overstreets operating a quiet wine bar across the street from our offices in accordance with the use permet When they first opened, their business, Overstreet's Wine Bar, was an asset to our area and there were no problems with their patrons. It was only when they ceased their operation and new operators turned the establishment into a bar /nightclub that big problems began in our area: vandalism, loud music, unruly crowds, fights, etc. As long as the use permit is not amended to allow the building to be turned into. a nightclub again, we would support the continuation of the existing use permit. �"tinoerely, C James Mahoney Gondola Co. of Newport & . Gondola Romance {949} 675 -4730 lido Marina Villiage •3400 Via Oporto, Suite 103 • Newport Beach, CA 92663 • 949- 675 -1212 • Fax 949 -675 -9812 E -mail: gondolaNB@aol,com Web site: www.goodolas.com M 148QUWI"L.LC 3404T"I✓ILIDO .'VWW POATBr"3C ' G:4 92663 (949) 673 0098 city ooiewport Beach Newport Beach, CA 92668 Attn: City Manager RE: Overstreet's Wine Merchant & Bar Dear Sir, We welcome the opportunity to embrace Overstreet's Wine Merchant & Bar in our community once again. Daring the• more than three year period in which the Overstreet's operated their facility as our next door neighbor we never had any issue with them, their staff or their enstomer's. We frequented their store often and recommended it highly to Amiily, friends and customers. The same cannot not be said for Sejour - Good Riddance! Sincerely, y . Diana Thomas Managing Member IM i i qlj 4 i . 1 4 /s�6P COt^'1 7 Tcd vtl /O . �� 0,4 HEW Wr QE•ACM C4 IOxr2I r-re— T# A' OC 4 -7esN OF 77V E uS� I � ���N� 7-�,� C,'7-�/, rsMo✓� Ncrr AEL O4E T-HE OvE/2St"L 7X r t CE . to-rAP'17- l 4A -64 FD 0- 04A r r k/ 7 -/� THE ©,rFasrnFF_T_c /mil- AT 7- 7�4is_- ff4Fcr--1 T� 13E Aq AZT 7-0 7-#E- 1-1470 Cot^-lrKL/ff/ 3410 AD Lido • Newport Beoch, CA 92663 • 949 675 -6230 Fax: 949 675 -6335 M. e a �I f RESIOENTIpI 6 CeaNfACIAI IH1ERIaR RESIGN To whom It moU Enmmrn, It hos come to my alleriUm that the city dMewpwt Bud mug reEOka theme parmt Pop the ou mUmts at 3400 Via lido. i think ftshlakt not happea.me Ove Ulets have been an feat For mong years to the lido Map. Vk would web= the Ove sire is back to the mobwW at any tmle. 1 Oee 3412 V lido Newport Beach, CA 9`£r 63 Tel 949,6731302 Fax 949.6x3.1306 www.d-Iaw n M Christine Overstreet Feam: Arthur Stockton [arthurstockton @sboglobal.net] Tuesday, September 27, 2005 9:56 AM r,.. coverstmet @adelphia.net Chris: One other quick note, 1 do not and have not in any way questioned your integrity. in fact, I found both of you quite refreshingly honest and that is,a major incentive for me to move forward, as nobody can ever anticipate all the issues which might arise in a transaction and the good faith and integrity of the parties is ultimately what makes a transaction successful. I did receive the use permit. Isimply believe that Renetta's interpretation' Of it is (as it should be when she.represents you) aggressive. Paragraph 10 requires any liquor license transferee to notify the City that they accept the terms of the Use permit as amended. the terms of the permit specifically reference the locations in what is designated Unit A -1 and A- aai tc separate the retail store from the, bar. Than the permit says any change n the character of occupancy requires approval. Given that the permit is for a. Retail Wine store primarily with the on -site consumption limited and adjunct, putting the medical practice in the retail wine store space and combining the retail wine/ bar into one is likely a change in the character of occupancy requiring approval.. While we all believe it would be approved as the business is downsizing, you don't have the time for us to pursue this before we sign a lease. Without pursuing this, we cannot covenant to maintain the liquor licenses if the City pulls the use permit and we cannot compromise so far to maintain the permit that the issue prevents us from doing our core-business. our solution is that we will purchase the Liquor Licenses but if the City pulls the permit and /or makes the requirements to maintain it such that we cannot do our core business :(this is a space issue), then we would no longer have the obligation to maintain the liquor licenses and you have the right (but not the obligation) to buy them.back. Ihope- this helps you understand what the issue was and i hope the solution is satisfactory. etta will advise you accordingly. c C I C -1 Cm: Arthur Stockton jerthurstockton @sbcglobai.net] t: Saturday, October 01, 2005 11:2 1 AM �. coverstreet @adelphia.net Subject: landscaping Dear Chris and Dennis: In getting ready for the 15th, would it be alright if we had our people (at our expense) address the overgrown landscaping? In addition to normal trimming, we would like to trim back the trees out fron_U_M -T;de �bse the sign. Also, we may eventually want to put nice flowers where the existing non - flowering green foliage is along the side. lhrrther, who owns /maintains the pots along the sidewalk? Once again, we would like to upscale fhe flowers, etc. (and maintain them in good condition at all times) if that is possible. Frankly, we would like to upscale the pots tool Also, if we wanted to use some other decorative pots along the sidewalk on the street side, is that possible? One other thing we are examining is a Ltet;,or: j,f gtll inq. we might want to wash the walls (artistically) with very upscale lighting, and outline the roof perimeter in fine white band lighting. we are having a lighting expert look at the situation and give us an illustration/ proposal. I just wanted you to be thinking about it. Again, everything is being considered on a R tz- Carleton type of Approach. The general idea of all of this is to make the exterior appearance and maintenance every bit as important as the interior. . The signs have been ordered and will be ready on the 15th. They will just replace the existing.signs so they will go up in just a few minutes. Unfortunately (or fortunately) entire canvas out front had to be replaced for the new signs. At least everything will . ind look brand new. I am also now understanding that there is no stoves in the ki d, Of course, Iwe have to serve some kind of food to maintain the liquor license and I have.no problem purchasing a stove for this purpose. However, there is no hos„d or vent. , Again, we have no problem installing a hood or vent, but is there a reason why there isn't one now, i.e. it is not permitted,. etc.? Thanks and I hope you are•experiencing some relief now. i nis being very helpful and appears to be capable of maintaining the status quo while we work out the logistics and perndt. issues so that we can opA'tI th 'v�n$eT�. "16'gye`guusiness. My contacts at the City are `advising me to move cautiong,by, 4A4 A9t`maEeriaTl,-y; cfianfe file current operations until we a o "feel for -the City's attit "So we will no£'be putting up a sigT" or i• th'e E ndermologie u e confident in our � position. Because we want to guard your reputation zealously, and people may ask about the change, you like us to say to anyone who might inquire?, Art I f A c -z RESOLUTION NO. 1579 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF NEWPORT BEACH APPROVING AMENDMENT TO USE PERMIT . NO. 2001 -005 (PA2002 -167) FOR PROPERTY LOCA'T'ED AT 3400 VIA LIDO THE PLANNING COVNIISSION OF THE CITY OF NEWPORT BEACH HEREBY FIND$, RESOLVES AND ORDERS AS FOLLOWS: ec 'on Is An application was filed by Dennis and Christine Overstreet with respect to property located at 3400 Via Lido and legally described as Lot 2 of Tract 1235, requesting approval of Amendment to Use Permit No. 2001 -005 pursuant to the Alcoholic Beverage Outlet Ordinance (ABO) to authorize a Type 47 ABC license for on -site consumption of general alcoholic beverages, live entertainment, and expansion of hours of operation. Section I A public hearing was held on November 7, 2002 in the City Hall Council Chambers, 3300 Newport Boulevard, Newport Beach, California. A notice of time, place and purpose of the aforesaid meeting was given. Evidence, both written and oral, was presented to and considered by the Planning Commission at this meeting. , Section 3. The Planning Commission finds as follows: L The proposed location of the alcoholic .sates establishment needing this use perm#, and the proposed conditions under which it would be operated or maintained, is consistent with the General Plan and the purpose of the district in which the site is located; will not be detrimental to the public health, safety, peace, morals, comfort, or'welfare of persons residing or working in or adjacent to the neighborhood of such use; and will not be detrimental to the properties or improvements in the vicinity or to the general welfare of the city. The structure that the proposed use will occupy is legal, nonconforming with respect to the maximum floor area ratio, however, the proposed changes in the use do not increase the gross floor area of the building. The amended use permit pertains to the on -site consumption of alcoholic beverages in conjunction with retail alcoholic beverage sales in a building that is designated and zoned for this activity. The use has been conditioned in such a manner to minimize the impacts associated with the sale of alcoholic beverages. The plans, as conditioned, meet the design and development standards for alcoholic sales. . 2. The operational characteristics of the proposed use, including the hours of operation, are consistent with Municipal Code requirements. Any change in the operational characteristics, including a change in the hours of operation, would require an amendment to the Use Permit, reviewed by the Planning Commission. 3. The proposed project is consistent with the purpose and intent of Chapter 20.89 of the Municipal Code (Alcoholic. Beverage Outlets Ordinance) for the following reasons: ` a The convenience of the public can be served by the sale of desired beverages in j conjunction with a full s�n?}t e, s�C -down -rw autaltC -Shat is complementary to surrounding f 1 City of Newport Beach Planning Commission Resolution No. 1579 Page 2 of 6 uses within the Lido Village area. Alcohol service is typical and expected by the public in a, �ukl�saY� 'CCe.tesFaura�t�setfietgi:;; b. The crime rate in the police reporting district and adjacent reporting districts is not likely to increase as a restrlt of the proposed use provided that the use is operated as an eating and drinking establishment, with the on -site consumption of alcohol incidental to taumnt •;use';` ..... __... C. The number of alcohol licenses within the report districts and adjacent reporting districts is high given the nature of the land uses in the district and when compared with County-wide data, but the change in the license classification of a Type 42 to a Type 47 will not result in an increase in licenses within the report district. d. The percentage of alcohol - related arrests in the police reporting district in which the project is proposed is higher than the percentage citywide. However, on -site consumption is not expected to increase alcoholic related crime in that the use is incidental to the use of the site as.an eating and drinking establishment e. There are no sensitive uses such as residences, day care centers, schools, or park and recreation facilities in the vicinity of the project site. 4. The project has been reviewed, and it qualifies for a categorical exemption pursuant to the California Environmental Quality Act under Class 1 (Minor alteration of existing structures). Section 4. Based on the aforementioned findings, the Planning Commission hereby approves Amendment to Use Permit No. 2001 -005, subject to the Conditions set forth in Exhibit "A." Section 5. This action shall become final and effective fourteen days after the adoption of this Resolution unless within such time an appeal is filed with the City Clerk or this action is called for review by the.City Council in accordance with the provisions of Title 20, Planning and Zoning, of the Newport Beach Municipal Code. PASSED, APPROVED AND ADOPTED THIS 7th DAY OF NOVEMBER 2002. M Chairman Secretary AYES:. Agaianian, Gifford, Tiser McDaniel, Selich. Toeree and Tucker NOES: None City of Newport Beach Planning Commission Resolution No. 1579 Page 3 of 6 EXHIBIT "A" CONDITIONS OF APPROVAL USE PERMIT NO. 2001-005 1. The development shall be in substantial conformance with the approved plot plan, floor plan, and elevations dated January 22, 2001. 2. This Use Permit for an alcoholic beverage outlet granted in accordance with the terms'of this chapter (Chapter 20.89 of the Newport Beach Municipal Code) shall expire within 12 months from the date of approval unless a license has been issued or transferred by the California State Department of Alcoholic Beverage Control prior to the expiration date. 3. That any change in operational characteristics, hours of operation, expansion in area, or operation characteristics; or other modification to the floor plan, shall require an amendment to this Use Permit or the processing of a new Use Permit, 4. Should this business be sold or otherwise come under different ownership, any future owners or assignees shall be notified of the conditions of this approval by either the current business owner, property owner or the leasing ap$rit Future owners, operators or assignees shall submit, — within 30. days of transfer or sale of tAe business or alcohol license, a letter to the Planning Department acknowledging their receipt and acceptance of the limitations and conditions of approval of this Use Permit. 5. The applicant shall comply with all federal, state, and local laws. Material violation of any of those laws in connection with the use will be cause for revocation Gf this permit. 6. This use permit may be reviewed, modified or revoked by the Planning Commission or City Council should they determine that the proposed uses or conditions under which it is being operated or maintained is detrimental to the public health, welfare or materially injurious to property or improvements in the vicinity or if the property is operated or maintained so as to constitute a public nuisance. 7. Trash generated by the business shall be screened from view froni adjoining properties except when placed for pick -up by refuse collection agencies. Trash receptacles for patrons shall be conveniently located both inside and outside the proposed facility, 8. No outdoor loudspeaker or paging system shall be permitted in conjunction with the operation. 9. All signs shall conform to the provisions of Chapter 20.67 of the Municipal Code. No temporary "sandwich" signs or similar temporary signs shall be petniiued, either on -site or off-site, to ao. verttse the:resta .' - 10. The alcoholic beverage outlet is defined as a retail establishment for the sale of general alcoholic beverages for off -site consumption as the primary and principal use of the project site. On -site consumption of alcoholic beverages shall be accessory and subordinate to the principal retail use and alcoholic beverages sales for on -site consumption shall not exceed 20 percent of gross sales for the business. The applicant or operator shall maintain adequate records to determine i City of Newport Beach Planning Commission Resolution No. 1579 Pa e6of6 29. A handicapped' assessable public restrooms are. required. The restrooms must be in compliance with the Uniform Plumbing Code and all applicable Uniform Building Code requirements. 30, The Owner /operator of the use shall enter into an agreement to provide and maintain a minimum of 21 parking spaces within the Lido Marina Village parking garage to be accessible at all times during the operation of the use. 31. The applicant or operator of the facility may provide valet attendant service for the use in conjunction with the Lido Marina Village parking garage. The applicant or operator shall prepare a valet operated parking plan to be reviewed and approved by the City Traffic Engineer prior to the commencement of the valet service use. 32. Delivery vehicles shall not park within the public right -of -way of Via Lido and Via Oporto. 33. The operator of y9 "" `l'if i `. •shall be responsible for the control of noise generated by the subject facility. Th °nt5 MOM by the Proposed use shall--comply with the provisions of, Chapter 10.26 of the Newport Beach Municipal Code: The maximum noise shall be limited to no more than depicted below for the specified time periods unless the ambient noise level is higher. 34. Upon evidence that noise .generated by the project exceeds the noise standards established by Chapter 20.26'(Community Noise Control) of the Municipal Code, the Planning Director may require that the applicant or successor retain a qualified engineer specializing in noise/acoustics to monitor the sound generated b3i fiesta . t fae,)lit ,tip develo a set of corrective measures necessary in order to insure compliance. p )Between the hours of Between the hours of 7:OOAM and l O:00PM 7:00AM and 10:00F1A Location Interior Exterior Interior Exterior Residential Property 45dBA 55dBA 44dBA 50dBA Residential Property located within 100 feet of a conupercial 45dBA 60dBA 45dBA 5OdBA property Mixed Use Property 45dBA 60dBA ' 45dBA 5OdBA Commercial Pro a N/A 65dBA N/A 6OdBA 34. Upon evidence that noise .generated by the project exceeds the noise standards established by Chapter 20.26'(Community Noise Control) of the Municipal Code, the Planning Director may require that the applicant or successor retain a qualified engineer specializing in noise/acoustics to monitor the sound generated b3i fiesta . t fae,)lit ,tip develo a set of corrective measures necessary in order to insure compliance. p City of Newport Beach Planning Commission Resolution No. 15779 Page 4 of 6 compliance with this condition and shall provide the City said records when requested. The time period for the purposes of conducting this review shall be in accordance with Alcoholic Beverage Control Board standards. 11. The sale of distilled spirits for off -site consumption shall not exceed 15 percent of gross receipts of all off -site alcohol sales. The sale of distilled spirits for on -site consumption shall not exceed 10% Of the total sales for on -site consumption of all alcoholic beverages. The applicant or operator shall maintain adequate records to detemilue compliance with this condition and shall provide the City said records when requested The time period for the purposes of conducting this review shall be 6 months. 12. Gross receipts shall be reviewed by the City for purposes of compliance with the requirements of the Zoning Code and Use Permit if the use is believed to be operating in non - compliance. If the sales percentages review finds that the applicant is not hi compliance, this application shall be brought forward to the Planning Commission for review. 13. Approval .does not permi the premises o operate as an eating and drinking establishment, restaurant, bar, tavern, cock ounge or night club as defined by the Municipal Code,, unless the Planning Commission first approves a Use Permit. 14. The interior area authorized for on -site alcoholic beverage consumption in conjunction with a Type 47 license shall be limited to 1;263 sq, ft as delineated on the approved floor plans as "Unit A2" with a maximum of 29 seats.. The intbrior area authorized for the retail sales for general alcoholic beverages for off -site consumption shall be limited to 1,328 sq. ft. as delineated on the approved floor plans as "Unit Al" with a maximum of 3 seats. On -site consumption of alcoholic beverages shall be prohibited in Unit Al. Substantial changes to the floor plans shall require prior approval by the Planning Commission. Any increase in area of either Unit Al or Unit A2 shall be deemed substantial for the purposes of requiring review by the Planning Commission. y�. I 15. Hours of operation shall be from 10:00 AM to 11:00 PM, daily for the retail portion of the project, and. I:00 PM to 12:00 midnight Fridays and Saturdays and 1:00 p.m, to 11:00 p.m. Sunday through Thursday for the eating and drinking portion of the project. Organized educational seminars shall not be conducted more than 3 days per week. 16. Live entertainment may occur subject to the approval of a Live Entertainment Permit and dancing is prohibited. Live entertainment shall not occur more than 3 days per week. Music T shall be limited.to indoor areas only and all windows and doors shall remain closed during performances except for incidental ingress and egress of patrons. Management of the business shall make every effort to keep the doors closed during performances. 17. The sale of beer, whether for on -site or off-site consumption, shall be prohibited. 18. A Special Events Permit is required for any event.oi promotional activity. outside the normal operational characteristics of this retail business that would increase the expected occupancy beyond 29 patrons and 6 einpIoyees at any one time or any other activities as specified in the Newport Beach-Municipal Code to require such special events permit. City of Newport Beach Planning Coimnission Resolution No. 1579 Page 5, of 6 19. The exterior of the alcoholic beverage outlet shall be maintained free of Titter and graffiti at all times. The owner or operator shall provide for daily removal of trash, litter debris and graffiti from the premises and on all abutting sidewalks within 20 feet of the premises. 20. The alcoholic beverage outlet operator shall take reasonable steps to discourage and correct objectionable conditions that constitute a nuisance in parking areas, sidewalks and areas surrounding the alcoholic beverage outlet and adjacent properties during business hours, if directly related to the patrons of the subject alcoholic beverage outlet. If the operator fails to discourage or correct nuisances, the Planning Commission may review, modify or revoke this Use Permit in accordance with Chapter 20.96 of the Zoning Code, 21. Alcoholic beverage sale from drive -up or walk -up windows shall be prohibited. 22. Any event or activity staged by an outside promoter or entity, where the business owner or his employees or representatives share in any profits, or pay any percentage or commission to a promoter or any other person based upon money collected as a door charge, cover charge or any other form of admission charge, including minimum drink orders or, sale -of drinks is prohibited. 23. loitering, open container, and other sigiis specified by the Alcoholic Beverage Control Act shall be posted as required by the State Department of ABC. 24. All owners, managers and employees seliidg alcoholic beverages shall undergo and successfully complete a certified training program in responsible methods and skills for selling alcoholic beverages. The certified program must meet the standards of the California Coordinating Council on Responsible Beverage Service or other certifying/licensing body, which the State may designate.-The establishment shall comply with the requirements of this section within 180 days of the issuance of the certificate of occupancy. Records of each owner's, manager's and employee's successful 'completion of -the required certified training program shall be maintained on the premises and shall be presented upon request by a representative of the City of Newport Beach. 25. The applicant is required to obtain all applicable permits from the City Building and Fire Departments..The construction plans must comply with the most recent, City- adopted version of the California Building Code. Adequate access and exiting must be provided in accordance with the Building Code. 26. The facility and related off - street parking shall conform to the requirements of the Uniform Building Code. The project shall comply with S tate Disabled Access requirements. 27. Where,Iwase may be introduced into the drainage systems, grease interceptors shall be installed on all'fiztures as required by the Uniform Plumbing Code, unless otherwise approved by the Building'Depm ment and the Utilities Department. 28. Health Department approval is required for any changes to the kitchen and other portions of the building that require a Building Permit. M � Pagel oft Christine Overstreet From:, Arthur Stockton [arthurstoGdon@sbcglobal.netj Sent: Tuesday, October 04, 2005 10:45 AM To: coverstreet @adelphia.nst Subject; Re: more Christine: Again, than for the information. You can drop off at the post office until we get a dedicated fax in The funny thing is that we have a fax at the house, but these computers search phone lines for fax tones and before you know it someone has taken over your fax for their own personal advertising. Then I wonder why they do it because I am so offended that I would never buy their products. Anyway, we can turn on the fax manually if you want to call me. I am at home this am - 949 - 675 -6074. I was hoping we could keep the old phone number so that we might be able to book some of the private Parties you mentioned if they became available. Jamie thought it important At the same time, I understand and do not want to preclude any of the opportunities you earned and built there. Maybe you could send us any events that you cannot handle at your new places, likewise, I hope we can feed customers to your new restaurants as well. We will just have to evaluate the efficacy /advisability of the cooking situation. We will likely reach the same conclusions you did. I do still want the names of those permit helpers you mentioned. I remain quite paranoid about changing ANYTHH11dG without the City in the loop and happy. It would be nice to Save someone help us who is wired into the politics. We will change the locks to secure everything. We use Balport as 'well Have you had an theft problems with the wine over the years? I would appreciate any input you have on any theft issues - bar or wine: We remain interested in purchasing the building. I know you have a lot on your plate and, as I told you before, nobody understands your position better than Carolyn. To this very day she has not forgiven me for the position I put her in with the businesses when the kids were young. She was beside herself most of the time and I made it worse with my travel schedule. Worst of ail, I missed a lot with the kids when they were growing up. I don't think any amount of money is worth that and I would do things quite differently if given another chance. If it would be helpful and your plate has room, would you and Dennis like to discuss the sale of the building? Art The pot around the perimeter are taken care of by Lido Marina Village. They belong to them. Donna is your contact. The phone number is one the wall directly across Via Oporto. She handles all of the leases for the waterfront and manages the Village. Sony, I don't recall her phone number. Fine of the Olive Trees C -3 10/4/2005 Page 2 of 2 Yes SBC is the phone line. We will arrange to remove our phone numbers as of 10/14. We will keep our main line and refer our customers to our Beverly Hills store since we have a lot of overlap between stores. Yes, Kyle is confidential to Jamie. Thank you. Kyle leaves for Maui on Thursday anyway. Horn do you want me to get the information to you since you don t have a fax Shall (drop it at your mail box on Riverside? Hood - we looked at it and didn't want to deal with a Grease Trap so we dropped the matter. Video Taping on Saturday 10/15 Is fine with me. I'll video tape on Friday 10114 when my kids are In school. I Are you changing the looks? Balport is familiar with the Building. If you dcxYt want to you can simply change the entry codes on the Alarm System which is Bay Security. Contact is Janet Garinger 650 -6560. As mentioned, the cost is $345.00 per months which is pretty reasonable. They also send you a monthly report of in/out per code. You can have. up to 6 individual codes. C. Chris O. r' 1 10/4/2005 C -4 m an i SE10UR, LLC 3400 Via Lido Newport Beach, CA 92660 NEWPORT BEACH ,.A" Amot'JL.L VE SERVICES Revenue Division May 15, 2007 PERMIT TOCONDU TLIVEENTER A[N the City of Newp .Z. ort Beach N does hereby authorize live entertainment activities to be conducted at 3400 Via Lido, Newport Beach, CA, 92660 and this permit must be Pernut is issued to Sejoar, LLC and is not transferable to another location or entity. Thetan. 'fins of this permit is contingent on the compliance with the regulations for operation as deitncd by Newport' Beach Municipal Code Section 5.28.041 and the following approval g specific conditions: 1) Hours of live entertainment shall be limited to: 1:00 p.m to 11:00 p_m. Thurs. 2) Live ettertainment is permitted 1:00 p.m. to 12:00 a.m. Fri., Sat., & Sun. Thursdays, Fridays, Saturdays and Sundays, On alternate weeks, ys and Saturdays.' 3) The live entertainment shall be litnitedand confined to the inferior of the structure. 4) Dancing is prohibited in conjtmction with this facility. 5) Comply with all conditions of the Use permit. This permit may be revoked for any of the following reasons: 1) Failure to comply with the above stated conditions, 2) the permttee has ceased to meet the requirements for issuance of the permit, 3) The establishment has been operated in an illegal or disorderly manner or in violation of any of the regulations set forth in Section 5.28.04, 4} Music or noise from the establishment for which the permit was i peace and quietness of the neighborhood. ssued interferes with the 5) The Permittee or any person associated with him as principal or partner, or in a positi capacity involving total Or Partial control over the establishment for on or which this permit is issued, has been convicted of a criminal offense involving moral turpitude Approved by :/ lJ _ bate: Permit Conditions Acknowledged by /(S ��� Date: . cc: City Manager ( _. „Police Department D -1 3300 Newport Boulevard • Post Office Box 1768 • Newport Beach California 92658 -8915 Telephone: (949) 644 -3141 • Fax: (949) 644 -3073 - www. c! V newport- beach. Ca. US ��W� i�r'Vth�h�C- '�G(kV {LILr71�YG` CITY OF NEWPORT BEACH... RECREATION & SENIOR SERVICES <�Faa+t�P Wes Morgan, Director May 17, 2007 Sejour /Arthur Stockton 3400 Via Lido Newport Beach, CA 92663 Mr. Stockton, On Wednesday, May 16s' you submitted 3 Special Event Permits for events planned on May 17, May 18, an May 19 at Sejour (3400 Via Lido). You bad been previously . advised that Level 1 Special Event Permits are required to be submitted a minimum of 6 calendar days prior to the event dates. Therfore, the permits you submitted for May 17th, 18th, and 19th, 2007 are hereby denied and you are not authorized to hold these events. the we Will be happy to process your permit requests if they are submitted with at least 6 calendar days police. If you should have any questions, you can contact our office at (949) 644 -3151. Sincerely, rin.../ Matt Dingwall Recreation Supervisor Cc: Sean Levin, Recreation Superintendent . Jay Garcia, Senior Planner Patrick Alford, Senior Planner Charles Spence, Code and Water Quality D-2 3300 Newport Boulevard. post Office Box 1768 • Newport Beach, California 92658 -8915 Telephone: (949) 644 -3151 • Fax: (949) 644-3155 • www.city.newport- beach.ca.us 7 Page I of I Christine Overstreet From: Arthur Stockton [art@se]our.us] Sent: Friday, June 15, 2007 2:49 PM To: coverstrest (§adelphia.not Subject: itkfy tUse Permit Dear Dennis and Christine: I Plan to file for a Use Permit Amendmant on Monday. Will either of you be available fora signature as property owner on Monday? We are going to file for the ability to have an integrated refail wine store and reatauran #. We will work our way back from there. Business continues to be vary strong. Unfortwrately, we are turr xrg away more than 100 people per weekend because of our operating limits. Everyone at the City seems tc have a good attitude. t am optimistic that we can get most of whet wa need. i cortinue to appreciate your indulgence to this difficuit time. Art C 2/25/2008 Ill -3 Christine Overstreet From: Arthur S to- cdon [art@sejour.us) Sent: Friday, June 29, 2007 1:36 PM To: coverstreet@adelphia.net Subject: Miscellaneous Items Hi Dennis and Christine: We wilt have the rent check on Monday. We will put It In your mailbox across the street unless otherwise instructed. I have received several notices now of a pending Forcible Entry end Detainer in Orange County Superior Court. In my conversation with Christine last Friday, she told me it had been withdrawn. I am operating in reliance on that statement. The roof is still an open item that needs to be addressed. The roof has leaked every time it has rained since we took possession ort the building. Accordingly, we are not responsible for these repairs or consequences. The roof still leaks In the women's restroom and lately even leaks when the air conditioner sweats. The drywall also needs to be repalred on the ceiling. I am simply too busy to address these items and read you to take care of it i will make myself available to meet the repairmen. It is my strong opinion that the roof needs to be replaced. The damages that could ensue if it keeps leaking are considerable. Also, there is a strong risk of black mold. Finally, I should havethe use permit amendment finalized this coming weak. 1 was able to get the radius map and address labels. 1 wig try to have this to you Monday or Tuesday and would like to file with the City by Friday. It appears that the worst is behind us. Business is very strong, even though we are operating with our hands tied oshind our backs. Sincerely, Arthur Stockton A -4 7/1/2007 Sejour, LLC 3400 Via Lido Newport Beach, California 92663 % (949) 310 -.7698 August 1, 2007 Planning Department . City of Newport i3each 3300 Newport Boulevard Newport Death, California 92658 Amendment to Use Permit Number 2001- 005 — 3400 Via Lido Ladies and Gentlemen: r Attached is the proposed rent to the above -rte nse-pmak Because there M no PhYsital changes Whatsoever proposed to the structure, we rem are fiat the regtriremerrt to subanit complete sets ofbhi¢ prints be waived. We have enclosed the blueprint relevant to the space utr'h"za8on issues as well as an which should be adequate for the decision making Prceaa, explaaato'ry illustration As YOU already know, this has been a very difficult and challenging experience for out business We would appreciate you expediting this process to the extent our business has the best chance to survive. our so that 3' �Azthur F. StmktDu D -5 CITY OF NEWPORT BEACH ' COMMUNMANDECONOMICDEV=pMEpR' Application: • KANNING DEPARTMENT `.i,�'... 3300 NEWPORT BOULEVARD . NEWPORT BE&CH. CA 92658 (949) 644 -320; FAX (949) 644 -3250 PART I: Cover Page Proisct Corrrmorr Name rif anolicahtP�, r Mailing Address: -All yLU7 O Y t L&�p . Phone: 64'6 3 i Mailing LLL 311 V0 Y. « L. -3 0 74 IF( Fax (J td) &-7S- Owner (ifdifferent fan aha ev 1ev 1 © vd' PROJECT ADDRESS: V S'i're -(.- -' ❑ Use Permit No. Q Planning Director's Use Permit No. Q G.P.AJAmendment No. Q Variance No. Q FEES: Mailing Address:_ Phone: ( ) .S' k"- . Fax ( a Z ( ) CiC> Vr.0 'Lr6.v Project Description (If applyutg for a variance, also complete attached form for xegtiired 5ndin gs -): k" GM PROPERTY OWNER'S AFFIDAVIT. (1) (We) property(ies) involved in this application; depose and say that (I arm) (we are) the owners) of the (Ij (We} further certify, er penalty of that the forgoing statements and . answers herein contained and the information herewith submittecJ a n all respects co to tjte best of knowledge and belief. /f (my) (our) Signature(s) j p /I i 4 1 If NOTE: An agent.may sigh for the owner if Written authorization from ire record owner is filed with the application. D-6 i } a Ih f C DO NOT COMPLETE APPLICATION BELOW TMS LINE FOR PLANNING DEPARTMENT IISE ONLY: Indicate Previous Modifications, Use Permits, Specialty Food Service Permits, etc. General Plan Designation: Zoning District: Coastal Zone: YES or NO ##################################### # # # # # # # # # # # # # # # # # # # # # # # # # # # # # ## Date Filed: Fee Pd Receipt No: Date Deemed Complete: Hearing Dane:. Posing Date Mailing Date: Planning Director Action Date P:C. Hearin C.C. Hearing_ t. JsMLgPLN%ffARED1F0RMS1 SE -A"ZCC Appeal P.C: Action Appeal C.C. Action D -7 PART H: Project Data Sheet Project Common Name: Projact Address/Locatien: Application Number(a): Assessors Pared Num"s): Legal Description (Attach on separate sheet, it uecesaaryk Existing Land Use: Proposed Land Use: Zoning District: Land Use Designation: 3 Regdirement ' N/A M Lot Area (sl) Lot Width (ft) . Lot Depth (ft) Setback Yards. CFront (ft) Side (ft) Side (ft) , Rear (ft) Gross Floor Area (st) Floor Area Ratio Building Coverage (44 I Building Height (ft) Landscaping (%) Paving ( %) - Parking Number of Employees Hours of Operation Number of seats, Dwelling Units 3 Regdirement ' N/A M PART III: Plans Each application shall be accompanied by 20 sets of plot plans, floor plans, and elevations; 8 sets shall be drawn to scale on 24 inch by 36 inch sheets with margins not less than 1!2 inch and 12 sets shall reduced to I t inches by 17 inches. The required number of plans to be submitted for a Planning Director's Use Permit application is 12 sets; 4 sets drawn to scale and 8 sets reduced. All plans shall be collated, stapled and folded to a size of 8%" by 14", maximum. ,a�.uo..es a ce eo su o the anplication, ecess to A. Plot Plan PIot plans shall be folly dimensioned and show the following infomtation on the subject property and to a minimum of 20.feet on contiguous properties; • vicinity Map. • North arrow. • Scale of the plan. • Existing and proposed 'property lines + Required and proposed Yard setback lines. • Locations, names, dimensions, and descriptions of all existing and proposed right of way Clines, dedications and easements, • Locations ofexisting and proposed structures, additions, utilities, driveways walks, and open spaces. • Any structures to be relocated, removed or demolished. • Locations, heights, and materials of existing and proposed walls and fences. • Locations, dimensions and descriptions of parking areas. • Location, heights, size and materials of signs. • Existing and proposed grade elevations and any significant natural features. • An Information block containing the name and telephone number of the contact person and calculations in tabular form showing compliance with applicable property developutent.regniatiops (i.e., density, floor area limits, height, parking, etc.) D -9 N y„ B. Floor Plans F j Floor plans shall be iblly dimensioned and show the following information: • Overall building and individual room dimensions, including square footage calculations. • All Proposed interior walls and partitions. • Room identification. • Window and door locations. C. Elevation Elevations shall be fully dimensioned and show the following information; • Exterior wall openings. Exterior matmials and finisbes. • Roof pitches. • All roof mounted equipment and screening. • Heights above grade of all Boors; eaves, and ridges. D. Qptional Maferlat� • Materials board (specifications and samples of type, color and texture of proposed construction materials). • ColorphotograPhs of the subject and adjacent properties. Part IV. Other Information and Materials Each application shall be accompanied by the following: A Property Owners' IList and Assessor's Pargel Mans 1. One 'Of gummed address '.lebels (Avery 5160 or equivalent) containing the names and addresses of owners of the subject property and properties within a radius of three hundred (300) feet of the exterior boundaries of the subject property excludin and terwa for copmercial erties onl shall be submitted. The list shall also contain the addresses of occupants of residentially -zoned property within the required prescribed radius only if the Planning Department makes the - determination that the project is of significant public interest. Additional sets of gummed labels shall be required if the proposed development is appealed or called up for review. Z• An assessor's parcel maps) indicating the 300 -foot radius line and the subject property shall also ( be submitted. 5 D -10 I This information shall be prepared by a title company or an ownership listing service doing business in Orange County, utilizing names and addresses from the last most recent assessor's m eked assessment roll and utilizing the maps, or alternatively, from such other records as contain more recent names, addresses or maps. The information shall be verified by the title company or ownership listing service and be accompanied by a written affidavit. $. project Description and Justiilcation A statement describing the proposed project in detail. This will serve as the formal statement to the approving authority on what the project is and why it should be approved. please include any relevant information which supports the application. Particular attention should be given relating this information to any findings that must be made in order to approve the application (see table below). Trattcporttttion Demagd Management Ordinance 20.64:040 Establishment of grade hY the Platming Commission 20.65.030 (13-3) Sign Exception Permits 20:67.045 (B) Accessory Outdoor Dining 20.82.050 (B) Waiver of location 'nstrictions for massage 20.97.025 (B) Cestablishments ModlScation permits (Ge nrl 20.93.040 For condominium conversions 20.83 .025, 20.$3.035 ()3). Use Permits (General) 20.9 1.035 (A) To exceed:base development allocations 20.63.040 (B or C) To allow mated use developments with less than 0,25 FAR for commercial development 20.63.040 . (E) To restore of damage or Destroyed 20.62.070 nonconforming structures Conversion of a Maxitnum FAR use to a Base FAR use or to a Reduced FAR use, or conver- 20,63.050 (B) Sio n of a Base FAR use to a Reduced FAR use To transfer development intensity 20.63.080 (1) To modify or waive of off-street parking and loading requirements 20.66- 100 (A) For bars and cocktail lounges 20.82.020 (B) For take�utsertice, limited 20.82.020 (C) (` Variances (See Page 8 of application) 20.91.035 (B) 6 D -11 Environmental Information Form; ? / The Environmental Information Form is intended to provide the basis information necessary for the evaluation of your project to determine its potential environmental effects. This review provides the basis for determining whether the project may have a significant effect on the environment, as required by state law. A$er this information has been evaluated by the Planning Department, a determination will be made regarding the appropriate environmental documentation for your j project. C.. 7 D -1Z Variances: R.eaw_�d phidina: f • That because of special circumstances applicable to the property, including size, shape, topography, location or surroundings, the strict application of this code deprives such classification. Property of privileges enjoyed by other property in the vicinity and under identical zoning 2. That the granting of the application is necessary for the preservation and enjoyment of substantial property rights of the applicant. 3. That the granting of the application is consistent with the purposes of this code and will not constitute a grant of special privilege inconsistent with the limitations on other properties in the vicinity and in the same zoning district. 4. That the granting of such application will not, under the circumstances of the particular case, materially affect adversely the health or safety of persons residing or woridcu is the neighborhood of the property of the applicant and will not under the circumstances n the Particular case be materially detrimental to the public welfare or injurious to property, or improvements in the neighborhood. To aid staff in determining that the finding can be made in this particular case please answer the following questions with regard to your request. (please attach on separate sheet, if necessary.) I. What exceptional circumstances apply to the property, including size„ shape, topography, location or surroundinns4 2. Why is a variance necessary to preserve property rights? 3. Why will the proposal not be detrimental to the neighborhood? D -13. f hOject 2agi ration and Justification, The Purpose of this amendment is to permit Sejour to operate as a fully integrated Art Gallery, Wine St(X% Tapas, Wine and Martini Bistro PomPal goat of the amendmatt is to Permit 84OW to utilize its entire facility for thew . purposes, rather than have the space VPortiaGW for these uses as currently exists under Use Permit No. 2001- 005 - Conditions of Approval- The ProPoaed operation is illustrated on Exhibit A attached hereto. Sejour is nearly two years old and anchors the corner of Lido Marina Village. The Village cuaentiy is in state of deterioration. R is hoped that there will be redevelopment, but the timing is far from certain and still may be five years away. In the meantime, the Village is ro longer a significant pedekdan destination..Aeconiingly, after five years of effort both by the prior owner and Sejom, the operation as currently permitted has been unprofitable. However, what has been generally, wocesdW and has bolster retail sales of wine, cordials and accessories has been to utilize the facility as a romantic evening destination as well as for special events focusing on win:, oorddia.1% martinis, scotches and the Mce as centerpieces. These events include food airing eves, engagement parties, corporate events, wedding receptions, birthday parties, charitable events, etc. Some of these events occur in eonjum Lion with haaiwr crutises which originate in the Village. Sejour is a very desirable location for these events due to its rm qm European ambiance, which will only be enhanced by the integration of a fine art pew gallery. Under the current use however, Sejour is not allowed to serve alcohol or food in the largest rooms most logical for these events. specifically. Sejour is requesting the following adjustments to the Conditions of Approval for Use Permit No. 2001 -005 (attached hereto as Exhibit B): 1. Revise condition number 10 to give equal emphasis to on -site and off -site alcohol sales. I Revise condition mmrber 11 to read that the majority (51 %) of on -site and off -site sales will be wine. 3. Revise oon&dm number I3 to permit Sejour to operate as a fully integrated Art Gallery, Wine Stop, Tapas, Wine and Martini Bistro. 4. Eliminate condition number 14 segregating space strictly for retail. 5. Revise condition number 13 to reflect integrated lours of operation from 11:00 AM until Midnight sundry through Wednesday and fmm 11:00 AM until 1:00 AM Thursday — Saturday and on any day before a f6daully iecoguized holiday. 6. 'Eliminate Condition 17 prohibiting the sale of beer. 7., Eliminate Condition 18 and permit Sejour's occupancy to be increased to the maximum number of people allowable as determined by the Building Department (recently estimated by the fire department to be about 85 people). i D-14 4 3 CIt is our sincere belief that Sejour will remain an asset to the community and Liao Marina Village under these conditions. It is also our sincere belief that there is more than adequate Parking available in the existing parking garage and accommodate Sejoues needs without being a burden to the surrounding community Sejour can obtain additional parking from the garage depending on the occupancy determinations described above. C D -15 Exhibit A Operation Blueprint C. D -16 ,a E I tiara uy, j2-,, V,Kl (�) H• i N 3 pr l" Z O� a IR<.S+ 6Df- I R - Sjr -oti f q S - sP�cc�l EVCNA4., (Zoar, 1 r �p 6�� V {-c C� X s� �b.`Y yr 2b� f o �o D -17 Exhibit B ' Use Pemiit 2001 -00S Conditions of Approval C D -18 Page 1 of I Christine Overstreet From: l Arthur Stockton [arthursiockton @sbcglobat.net] Sent: Thursday, August 02, 200710:23 AM To: coverstreet@adelphia.net Subject:. Re: Check and Use Permit Amendment Attachments: Project Description and Justification. doc c Hi Christine: I have the rent check and the completed Use Permit Amendment Would like to coordinate with you and drop off today. !Left you a phone message, You can reach me at (949) 310 -7698. 9 at all possible, would like to get your signature and possibly file this today. Attached is the project description attached to the Use Permit. Please let me know it you have any suggestions or revislons. Thanks, Art 2/25/2008 D -19 m x x m a m 1 C Overstreet's Wine Bar 3400 Via Lido, Newport Beach, CA 92660 (949 )566 -9463 The Menu at Overstreet's When food and wine find a perfect marriage, it's a magical moment, an unforgettable seasaal exper[ewe. — Dennis Overstreet Overstreet Is New Wine Guide Small Plates Malpeque Oysters on the Half Shell / champagne mignonette / fleur de sel 1.25each Cured Olives / candied walnuts / coriander / lemon 3.00 01,ive Tap enade / shallots / creme fraiche / toasted baguette 4.00 Croque Madame / bacon -anion marmalade / gruyere /5eid greens 6.00 Wild Mushroom Sautee / creamy polenta / bleu cheese / balsamic reduction 10.00 S —al adS Grilled Figs / bleu cheese / parsley / shallots. 6.00 Kenter Greens Salad / sherry vinaigrette / pine nuts / parmesan 6.00 English Cucumber Salad / cherry tomatoes / basil /balsamic vinegar 6.00 Heirloom Tomato Salad / basil / cltevre 1 citrus vinaigrette 7.A0 Chicken Ancho Chile Grilled Chicken 1 sweet corn salad / red onions / parsley 8.00 Five Spice Chicken / coconut steamed rice / ginger broth / bamboo shoots 9.00 Pan Roasted Chicken Breast / wild mushroom / cous cous / pine nuts 9.00 0206 �' E -2 Overstreer's Wine Bar 3400 Via Lido, Newport Beach, CA 92660 (949) 566 -9463 From he Sea Cold Smoked Tasmanian Salmon / dill crime fraicbe / vodka / mesclun mix 8,00 Steamed Mussels /.White wine / garlic / shallots 9.00 Ginger -Soy Marinated Prawns / star anise panna- cotta / scallions I0.00 Ahi Tuna Tartare / Asian aioli ! guacamole / ponzu sauce 12.00 Pan Roasted Alaskan Halibut / lava beans / tomatoes /English peas 12.00 Pan Seared Sea Bass / celery root puree / English pea emulsion / black sesame 12.00 Traditional loz. Service of Caviar / chives / egg / shallots / capers / toast points Sevruga 55.00 Ossetra 65.00 Beluga 75.00 Frorn The Land Roasted Lamb Chops / cranberries / cous coos / mustard jus 14.00 Seared Foie Gras / caramelized figs / balsamic gastrique ! frisee 22;DO For Dessert All Desserts, 7.50 Berry Trifle / raspberries / bIackberries / whipped cream Franjelico- infused Chocolate Mousse / single- estate chocolate / whipped cream Black & White Sundae/ chocolate sauce / marshmallow cream / vanilla bean ice -cream Tapioca Brulee / caramelized sugar / mint / blueberries E-3 y Overstreet's Wine Bar 3400 Via Lido, Newport Beach, CA 92660 (949) 566 -9463 The Cheese Deciusta #ion. There are more than 2,000 cheeses in the world. Here, Chef Jason has selected a few of his current favorites. What's more, to frilly explore the cheese's full range of flavor, he has paired each cheese with key ingredients. Much like wine, cheese can be described in terms beyond the obvious. Seldom does someone say, `°This wine tastes like grapes." More often one hears, "This wine kinda tastes like ... grass /vanilla/wood/smoke/pears." The same can be said for cheese. Close your eyes, take a bite and ... enjoy] Our Current Compositions Goats Milk Gouda, raspberries C - peppery / tangy / from Holland Pave du Morin, Whisky- smoked pecans soft / refreshing / creamy (cream is actually added!) French cow's milk Point Reyes Blue, walnuts, honey - California's only classic-style blue cheese Rochebaron, candied cashews, blackberries soft French cow's milk cheese / swathed in ash Crottin de ChavignoI, peach, balsamic reduction -'salty yet sweet French goat's cheese One Cheese Composition 7.00 Three Cheeses 12.00 Artisan Cheese Board, the entire selection of five cheeses 15.00 Please Note: All cheese served at Overstreet's Wine Bar can be purchased at our retail counter. Take home a little wedge of heaven! ffi C. Overstreet's Wine Bar 3400 Via Lido, Newport Beach, CA 92660 (949) 566 -9463 The Prix Fixe The Prix Fixe menu is the crux of the Overstreet's mission. Here, we've paired some of our favorite plates with wines that offer both balance and symmetry. Certain pairings help to accentuate or highlight a flavor, while other pairings are simply to counteract or tame an unruly ingredient. Always changing and always fun, the Overstreet's Prix Fixe is a total- dining- azpertence. Kick up 'yer' heels and settle in! Prix Fixe # 37 Three Courses Paired With Three Glasses of Wine 45.00 English Cucumber Salad // Chateau Haut Riau, Bordeaux Ahl Tuna Tartare // Torii Mor, Plnot Blanc Cheese Composition: Pave du Morin, whisky - smoked pecans /! Dehesa Gago Prix Fixe #12 Three Courses Paired With Three Glasses of Wine 45.00 Kenter Greens Salad // Tetuzai & Puthod, Terre dl Tuff Ginger-Soy Marinated Prawns // Gerhard, Riesling Cheese Composition: Rochebaron, cashews and blackberries # Baileyana, Pinot Noir Prix Fixe #82 Five Courses Paired With Five % Glasses of Wine 65.00 Heirloom Tomatoes /I Bouvet Pan Roasted Chicken // Chateau Montelena, Chardonnay Grilled Figs // Byington "AI &age," Californian Bordeaux -style blend Cheese Composition: Croton de Chavignol, peach and balsamic reduction!! Echevorria- Berry Trifle // Chateau Coutet, Barsac Prix Fixe #61 Five Courses Paired With Five Y, Glasses of Wine 65.00 Kenter.Greens Salad // Colombelle Cold Smoked Tasmanian Salmon i/ Sokol Blosser, Evolution #9 Roasted Lamb Chops # Downing Family, Cabernet Sauvignon Cheese Composition: Point Reyes Blue, walnuts and honey // Fusee, Syrah Tapioca Brulee // Chateau Coutet, Barsac Please Note: Prix Fixe dinners are carefully planned for your enjoyment. Please, No Substitutions. E -5 �; J Oversfreer's Wine Bar 3400 Via Lido, Newport Beach, CA 92660 (949) 566 -9463 ...bubbles . Wine is the world's most intriguing beverage. It begets.an endlessly fascinating conversation that involves mathematics, science, art, music, opinion, romance, speculation, desire... Dennis Overstreet Overstreel s, New line Guide pour bottle NV Bouvet, Ladubay Signature, Loire Valley, France 4.00 17.00 delicate, perfume vanilla, candy, roses '99 Varichon & Clere, Brut Blanc dQ Blancs, France 6.50 20.00 poignant, lively, creamy, toasty, citrus NV Piper- Heidsieck, Brut Champagne, France (split- bottle w /straw) 14.00 electrifying, fun, oyster shell, hazelnut, toast NV Lansou, Brut Champagne BIack Label!, France 12.00 SODA proud, consistent, dough, honey, pepper . NV Mumm de Cramant, Brut Blanc de Blaucs, Champagne, Fraaee 20.00 65.00 determined, solid, crisp eithrs, rare mineral '93 Dom Perignon, Brut Champagne, France 100.00 dignified, chic, toast, coffee, hazelnut '95 Louis Roederer, Cristal, Champagne, France 150.00 dazzling, opulent, rich, citrus, dough Don't see anything you like? Just ask! Our salon and cellar is Merl with the best the world has to offer. Overstreet's Wine Bar bottle prices are based upon on -site consumption only. Wines from the salon and cellar may require a $15.00 corkage fee, Ask your server for details. E -6 i i i i 1 Overstreet's PRne Bar 3400 Via Lido, Newport Beach, CA 92660 / (949) 566 -9463 l .:.white R -7 demi >> our hQftia !slit '01 ColombelN Cotes de Gas cogne, France 1.25 3.50 15.00 vivid, appealing, green peach, lemon, minaret 100 Heather Ranch, Chardonnay, Russian River Valley 3.75 7.50 25.00 brooding, smoky pear, toast, butterscotch, melon '00 Torii Mor, Pinot Blanc, Oregon 5.00 10.00 25.00 graceful, peach, pear, melon, spice medium '01 Chateau Haut Man, Bordeaux, France 3,00 6.00 20.00 ( surprising, rogue, grass, nuts, fruit '01 Gabriel Meffre, "Fat Bastard" Chardonnay, France 3.25 6.50 20.00 "get in my belly," butter, pear, citrus, monkey elbow 102 Isabel, Sauvignon Blanc, New Zealand 3.50 7.00 20.00 waif- runway - strut, pear, grapefruit, celery? '99 Kamen River, Chardonnay, New Zealand 7.50 15.00 45.00 debonair, refined, apple, spice, peach full - '99 Teruzsi & Putbod, Terre di Tuft, Italy 2.25 5.50 20.00 graceful, darling, lemon, apple, vanilla '00 Gerhard, Riesling- Kabinett, Germany 3.00 6.00 25.00 brilliant, dense, nectarine, mineral, passion NV Sokol - Blosser, Evolution No. 9, Oregon 3.25 6.50 25.00 ...uncanny, complex, floral, sweet, dry {, '00 Chateau Montelena, Chardonnay, Napa Valley 4.00_ 8,00 28,00 stalwart, oak, apricot, fig, vanilla Don't see anything you lice? lust askl Our salon and cellar is filled with the best the world has to offer. Overstreet': `fine Bar bottle prices are based upon on -site consumption only, Wines from the salon and cellar may require a S 15.00 corkage fee. Ask your server for details. R -7 C Overstreet's Wine Bar 3400 Via Lido, Newport Beach, CA 92660 (949) 566 -9463 ...red full de ml p2ur tgjjLq I 4.00 8.00 30.00 '98 Pascal Avril, Cabernet Franc, Chinon, Loire Valley, France 3.50. 7.00 20.00 gentle, velvety, plurhs, spite, leather 4.00 8.00 30.00 '99 Baileyana, Pinot Noir, Edna Valley 4.00 8.00 30.00 silky, suave, cherry, plum, sage 4.25 8.50 35.00 '00 Elk Cove, Pinot Noir, Willamette Valley 5.00 10.00 32.00 prize- fighter, symmetric, strawberry, vanilla 5.50 11.00 35.00 medium '00 Bodegas Toresams, Dehesa Gago, Toro, Spain 225 4.50 20.00 aggressive, wild, plum, blackberry, rustic spice '98 Chateau Ctvzeau,Pessae- L€ognan 4.50 9.Op 32.00 berry, leaf, chocolate, tobacco, suede Puma's E -8 t99 Canoe Ridge, Merlot, Washington 4.75 9.50 35.00 smooth, chillin', black cherry; currant chocolate full '99 Byington, "Alliage," Sonoma County 4.00 8.00 30.00 steadfast, blackberry, currant, smoke, mint NV Fusee, Syrah, California 4.00 8.00 30.00 shotgun blast, truckload of fie, currant, pepper, meat '99 Rex Hill, Plant Noir, Willamette Valley 4.25 8.50 35.00 funky- fresh -fly, raspberry; chocolate, mingling licorice 199 Downing Family, Cabernet Sauvignon, Rutherford Valley 5.50 11.00 35.00 inky, anise, black currant, mocha, bee's knees '98 Vitginie de Valandraud, St: Emilion, Bordeaux 9.00 18.00 70.00 kinky, smoky, vanilla - chocolate -love, berries Don't see anything you like? lust askl Our salon and cellar is filled with the best the world has to offer. Oversftet's Wine Bar bottle prices are based upon on -site consumption only. Wines from the salon and cellar may require a S 15.00 oetttage fee. Ask your server for details E -8 Overstreet 's Wine Bar 3400 Via Lido, Newport Beach, CA 92660 (949)566.9463 ...confection The only problem with so-called dessert wines, in my opinion, is dessert. Hemingway is supposed to have said thatany man who eats dessert is not drinking enough. -play McInerney Bacchus &.Me, Adventures in the Wine Cellar 100 Robert Mondavi Winery, Moscato d'Oro, Napa Valley austere, simple, sweet, litchi, pear NV Osbourne, Ruby Porto, Portugal poised, lengthy, candy, dancing nancies; gorilla NV Bodegas Dios Baco, Sherry- "Oloroso," Spain dapper, rich, hazelnut, semi- sweet, olel '97 Chateau Coutet, Barsac, France siren- esque, boundless, lemon, pineapple, honey NV Jean Fillioux, Pineau des Charentes, France esoteric, heavenly, almond, caramel, a sweet bite pour bottle 6.50 28.00 8.00 30.00 8.00. 30.00 14.00 50.00 14.00. 50.00 Don't see anything you like? Just ask! Our salon and cellar is filled with the best the world has to offer. Overstreet s Kne Bar bottle prices are based upon on -site consumption only. Wines from the salon and cellar may require a $15.00 corkage fee. Ask your server for details. E-9 Overstreet's Wine Bar 3400 Via Lido, Newport Beach, CA 92660 (949)566.9463 ...flights three 2.5oz. ipours 1. Chardounay: A lesson in terroir (climate, microcllmate, and soil composition) 15100 —A diverse grape variety that, from one wine to the next, shows a complex range of character. The wines of this flight are all made from the exact same grape, but you'll soon taste the differences in climate, soil, and winemaking. Most interesting will be the major differences between the two Californian wines (a and c.) a. '00 Heather Ranch, Chardonnay, Russian River Valley b. '99 Kumeu River, Chardomtay, New Zealand c. '00 Chateau Mdnteiena, Chardom:ay, Napa Valley 2. Pinot Noir: Terroir with the world's most finicky grape. 15.00 Just when things couldn't get say more difficult ... Pinot Noir comes along! Not only does the vigneron (winemaker) have to deal with terroir, but also he or she must contend with a grape variety that doesn't follow the rules! This genetically unstable grape has problems at every stage. Offspring grapes are often nothing like their parents. And due to a rare presence of 18 different amino acids, the grape can "act up" during its sometimes- violent fermentation. All this being true —a great Pinot is like no other wine in the world! Ahl The sexy rewards of complexityl C_ a. '99 Baileyana, Pinot Noir, Edna Valley b. '00 Elk Cove, Pinot Noir, Willamette Valley. c. '99 Rex Hill, Pinot Noir, Willamette Valley 3. Bordeaux and Bordeaux - style. It's all about the blendingl 19.00 — France's Bordeaux region has long been at the pinnacle of winemaking excellence. Simply, in 1855 France built a classification tier for all of the major Chateaux; rust through fifth growths. The Chateaux of the premier crus (first growths) produce the most sought after wines in the world. The "Big - Red - Guns:" Zafife - Rothschild, Margaux, Latour, Haut- Brion, Mouton - Rothschild But beyond the history, beyond the terroir, and beyond the hundreds of years of knowledge... there is the blending. Usually, Bordeaux -style wine is driven by one of two grapes: Merlot or Cabernet Sauvignon. Then the two are balanced and rounded by several other grapes, namely Cabernet Franc, Petit Verdot, and Malbec..In this flight we offer one New World Bordeaux (a.) and two true Bordeaux's (b and c.), from one of the most famous St: Emillion estates, and a lesser known but respectable Pessac- lAognan offering. a. '99 Byington, "Aliiage," Sonoma County b. '98 Chateau Cruzeau, Pessac- L6ognan c. '98 Virginie de Valandiaud, St.- Emilion, Bordeaux i 4. Build your own flight! Use our by- the-glass list to create your own tasting! Varies Don't see anything you like? Just ask! Our salon and cellar is filled with the best the world has to offer, Overstreet's Wine Bar bottle prices are based upon on -site consumption only. Wines from the salon and cellar may require a $15.00 corkage fee. Ask your server for details. F�10 Overstreet's Wine Bar 3400 Via Lido, Newport Beach, CA 92660 (949) 566 -9463 ...limited engagement Throughout the course of the week the staff wildly cracks open random bottles for the sake of "education and evaluation." (Ahem.) The wines here will eventually run out but while the bottle is cracked.., we thought we'd be nice and share. All Pours, $5.00 '99 Tahbilk Estate, Marsanne, Australia '0I Nautilus, Sauvignon Blanc, New Zealand - '0l Seresin, Sauvignon Blanc, New Zealand '00 Wairau River, Sauvingnon Blanc, New Zealand. '01 Livio Felluga, Pinot Grigio, Italy '.00 Coastal Ridge, Chardonnay, California fed 'O1 Chateau De Segries, Rhone '00 "Fat Bastard," Shiraz, France '99 Cecchetti Sebastiani, Merlot, Italy '00 Ross Estate, Australia Don't see anything you like? Just ask! Our salon and cellar is filled with the best the world has to offer. Overstreer's Wine Bar bottle prices are based upon on -site consumption only. Wines from the salon and cellar may rcquim a $15.00 corkage fee. Ask your server for details. E -11 m x x w m Zin ' 1 D! 11 1 l i l Beverage Control �Jiee4tRP �+1, \'i License Query System Summary G pts:: as of 317012008 'tense Information' icense Number: 433267 Status: ACTIVE rime Owner: SEJOUR LLC [ABC Office of Application: SANTA ANA Business Name [going Business As: SEJOUR usiness Address ddress: 3400 VIA LIDO Census Tract: 0635. i : NEWPORT BEACH Count :ORANGE iate: CA Zi Code: 92663 icensee Information icensee• SEJOUR LLC Go n O kerInformation Officer: STOCKTQN OLYN CHRISTINE MANAGING MEMBER .e Types 1 icense iVoZ 47 - ON- ALE GENERAL EATING PLACE Livens e $ta :ACTIVE Status JAN -2006 Term: M Original Issue Date: 30- JAN -2006 Expiration Date: 31- DEC -2008 Master: Y Duplicate: 0 Fee Code: P40 Condition: OPERATING RESTRICTIONS License o-was Tr sferred On: From: 78 2 License T, e'--21 - Q P -SALE GENERAL Liceu 2&*: ACTIVE Sta : 30- JAN -2006 Term: Month (s) Ori al Issue Date: 30-JAN -2006 Ex iration Date:3I- DEC -2008 Master: Y Duplicate: 0 Fee Code: NA Condition: OPERATING RESTRICTIONS License Type was Transferred On: From 978 3 License Type: 30 - TEMPORARY PERMIT License lype Status: ISSUE Status Date: 28 -OCT -2005 Term: Mon s 7rWnal Issue bate: Expiration Date: �•_-- Aaster: Y Duplicate: 1 Fee Code: NA urrent Disciplinary Action .. No Active Disci linar fiction found .. . F rage t Ga . I: p'' F -1 1 --- End of Report - - - For a definition of codes, view our ZLOSSRO�. C_ ttp: / /www.abc.ca.gov /datDort/LOSData air, ?7n= '?ms'7ncnm Page 2 F -2 }° CITY OF NEWPORT BEACH r u P.O, BQX.1768, NEWPORTBEACH CA 92659 -1768 ( �trwo aT'�r C PLANNING DEPARTMENT (949) 644 -3210 NOTICE OF FINAL APPROVAL DATE. December 9, 2002 TO; Dennis Overstreet and Christine Overstreet FROM: Planning Director SUBJECT: UP2002 -034 (PA2002 -167) FILE COPY Please be advised that UP2002 -034 (PA2002 -167) was reviewed and approved by the Planning Commission at Its meeting of November 7, 2002 and became effective November 21, 2002. Any deviation from the applications and plans on Ble In the Planning Department may require an amendment to the applicatlon(s) mentioned above for the project. Applicant; Dennis Overstreet and Christine Overstreet Location; 3400 Via Udo Description: Request for an amendment to a previously- approved use permit to include the sale of distilled splriits (Type 47: beer, wine & spirits) for on -site consumption, to permit live entertainment, and to expand the hours of operation from 11:00 pm to I2:00 midnight on Fridays and Saturdays at an existing retail Alcoholic Beverage Outlet IoGated In Udo Village, Should you have any questions, please contact our office, Very truly yours, PLANNING DEPARTMENT Pc3tdclq L Tempi Director By r 4.z4t . G#iQer Varin Executive Secretary Planning Commission Enclosure: Approved Resolution with Findings and Conditions of Approval Approved Planning Commission minutes with Final Findings and Conditions of Approval cc: Properly Owner (if not applicant) Gv ari nTIanCommin[cefftpc. doc G -1 l RESOLUTION NO, 1579 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF NEWPORT BEACH APPROVING AMENDMENT TO USE PERMIT NO. 2001 -005 (PA2002 -167) FOR PROPERTY LOCATED AT 3400 VIA LIDO THE PLANNING COMMISSSION OF THE CITY OF NEWPORT BEACH HEREBY FINDS, RESOLVES AND ORDERS AS FOLLOWS: Section 1. An application was filed by Dennis and Christine Overstreet with respect to property located at 3400 Via Lido and legally described as Lot 2 of Tract 1235, requesting approval of Amendment to Use Permit No. 2001 -005 pursuant to the Alcoholic Beverage Oudet.Ordinance (ABO) to authorize a Type. 47 ABC license for on consumption of general alcoholic beverages, live entertainment, and expansion of hours of operation. Section 2. A public hearing was held on November 7,'2002 in the City Hall Council Chambers, 3300 Newport Boulevard, Newport Beach, California. A notice of time, place and purpose of the aforesaid meeting was given. Evidence, both written and oral, was presented to and considered by the Planning Commission at this meeting. Section 3. The Planning Commission finds as follows: I. The proposed location of the alcoholic.sales establishment needing this use permit, and the Proposed conditions under which it would be operated or maintained, is consistent with the General Plan and the purpose of the, district in which the site is located; will not be detrimental to the public health, safety, peace, morals, comfort, or'welfare of persons residing or working in or adjacent Co the neighborhood of such use; and will not be detrimental to the properties or. improvements in the vicinity or to the general welfare of the city. The structure that the proposed use will occupy is legal, nonconforming with respect to the maximum floor area ratio, however, the proposed changes in the use do not increase the gross floor area of the building. The amended use permit pertains to the on -site consumption of alcoholic beverages in conjunction with retail alcoholic beverage sales in a building that is designated and zoned for this activity. The use has been conditioned in such a manner to minimize the impacts associated with the sale of alcoholic beverages. The plans, as conditioned, meet the design and development standards for alcoholic sales. 2. The operational characteristics of the proposed use, including the hours of operation, are consistent with Municipal Code requirements. Any change in the operational characteristics, including a change in the hours of operation, would require an amendment to the Use Permit, reviewed by the Planning Commission. 3. The proposed project is consistent with the purpose and intent of Chapter 20.89 of the Municipal Code (Alcoholic Beverage Outlets Ordinance) for the following reasons: a. The convenience of the public can be served by the sale of desired beverages in conjunction with a full- service, sit -down restaurant that is complementary to surrounding G-2! City of Newport Beach Planning Commission Resolution No. 1574 Page 2 of 6 uses within the Lido Village area. Alcohol service is typical and expected by the public in a full- service restaurant setting. b. The crime rate in the police reporting district and adjacent reporting districts is not likely to increase as a result of the proposed use provided that the use is operated as an eating and drinking establishment, with the on -site consumption of alcohol incidental to the restaurant use. . c. The number of alcohol licenses within the report districts and adjacent reporting districts is high given the nature of the land uses in the district and when compared with County -wide data, but the change in the license classification of a Type 42 to a Type 47 will not result in an increase in licenses within the report district. d. The percentage of alcohol- related arrests in the police reporting district in which the project is proposed is higher than the percentage citywide. However, on -site consumpti iot expected to increase alcoholic related crime in that the use is incidental to the use s the on s n site as an eating and drinking establishment, e. There are. no sensitive uses such as residences, day care centers, schools, of park and recreation facilities in the vicinity of the project site. ( 4- The project has been reviewed, and it qualifies for a categorical exemption pursuant to the l . California Environmental Quality Act under Class 1 (Minor alteration of existing structures). . Section 4. Based on the aforementioned findings, the Planning Commission hereby approves Amendment to Use I?ermit No. 2001 -005, subject to the Conditions set forth in Exhibit "A." Section 5. This action shall become final and effective fourteen days after the adoption of this Resolution unless within such time an appeal is filed with the City Clerk or this action is called for review by the City Council in accordance with. the provisions of Title 20, Planning and Zoning, of the Newport Beach Municipal Code. PASSED, APPROVED AND ADOPTED THLS 7th DAY OF NOVEMBER 2002. 10 Chairman Secretary AYES: Agaianian Gifford Kiser McDaniel Selieh Toerge and Tneker NOES: one G3 City of Newport Beach Planning Commission Resolution No. 1579 Page 3 of 6 ` EXHIBIT "A" CONDITIONS OF APPROVAL USE PERMIT NO. 2001-065 I. The development shall be in substantial conformance with the approved plot plan, floor plan, and elevations dated January 22, 2001. 2. This Use Permit for an alcoholic beverage outlet granted in accordance with the terms of this chapter (Chapter. 20.89 of the Newport Beach Municipal Code) shall expire within 12 months from the date of pproval unless a license has been issued or transferred by the California State Department of Alcoholic Beverage Control prior to the expiration date. 3. That any change in operational characteristics, hours of 'operation, expansion in area, or operation characteristics; or other modification to the floor plan, shall require an amendment to this Use Permit or the processing of a new Use Permit. 4. Should this business be sold or otherwise come under different ownership, any future owners or assignees shall be notified of the conditions of this approval by either the current business owner, property owner or the leasing agent. Future owners, operators or assignees shall submit, within 30 days of transfer or sale of the business or alcohol license, a letter to the Planning Department acknowledging their receipt and acceptance of the lirnitations and conditions of approval of this Use Permit. C. 5. ' The applicant shall comply with all federal, state, and local laws. Material violation of any of those laws in.connection with the use will be cause for revocation bf this permit. 6. This use pen-nit may be reviewed, modified or revoked by the Planning Commission or City Council should they determine that the proposed uses or conditions under which it is being operated or maintained is detrimental to the public health, welfare or materially injurious. to property or improvements in the vicinity or if the property is operated or maintained so as to constitute a public nuisance. 7. Trash generated by the business shall be screened from view from adjoining properties except when placed for pick -up by refuse collection agencies. Trash receptacles for patrons shall be conveniently located both inside and outside the proposed facility. 8. No outdoor loudspeaker or paging system shall be permitted in conjunction with the operation. 9. All signs shall conform to the provisions of Chapter 20.67 of the Municipal Code, No temporary "sandwich" signs or similar temporary signs shall be permitted, either on -site or off:site, to advertise the restaurant. 10. The alcoholic beverage outlet is defined as a retail establishment for the sale of general alcoholic beverages for off -site consumption as the primary and principal use of the project site. On -site { consumption of alcoholic beverages shall be accessory and subordinate to the principal retail use and.alcoholic beverages sales for on -site consumption shall not exceed 20 percent of gross sates for the business. The applicant or operator shall maintain adequate records to determine G-A City of Newport Beach Planning Commission Resolution No. 1579 i Page 4 of 6 (.' compliance with this condition and'shall provide the City said records when requested. The time period for the purposes of conducting this review shall be in accordance with Alcoholic Beverage Control Board standards. 11. The sale of distilled spirits for off -site consumption shall not exceed 15 percent of gross receipts of all off -site alcohol sales. The sale of distilled spirits for on -site consumption shall not exceed 10% of the total sales for on -site consumption of all alcoholic beverages. The applicant or operator shall maintain adequate records to determine compliance with this condition and shall provide the City. said records when requested. The time period for the purposes of conducting this review shall be 6 months. 12. Gross receipts shall be reviewed by the City, for purposes of compliance with the requirements of the Zoning Code and Use Permit if the use is believed to be operating in non - compliance. If the sales percentages review funds that the applicant is not in compliance, this application shall be brought forward to the Planning Commission for review. 13. Approval does not permit the premises to operate as an eating and drinking establishment, restaurant, bar, tavern, cocktail lounge or night club as defined by the Municipal Code, unless the Planning Commission lust approves a Use Permit. 14. The interior area authorized for on -site alcoholic. beverage consumption in conjunction with a Type 47 license shall be limited to 1,263 sq. ft. as delineated on the approved floor plans as "Unit A2" with a maximum of 29 seats. The interior area authorized for the retail sales for general alcoholic beverages for off -site consumption shall be limited to 1,328 sq. ft. as delineated on the approved floor plans as "Unit Al" with a maximum of 3 seats, OnIsite consumption of alcoholic beverages shall be prohibited in Unit Al. Substantial changes to the floor plans shall require prior approval by the Planning Commission. Any increase in area of either Unit Al or Unit A2 shall be deemed substantial for the purposes of requiring review by the Planning Commission, 15. Hours of operation shall be from 10:00 AM to 11:00 PM, daily for the retail portion of the project, and. 1:00 PM to 12:00. midnight Fridays and Saturdays and 1:00 p.m. to 11:00 p.m. Sunday through 'Thursday for the eating and drinking portion of the project. Organized educational seminars shall not be conducted more than 3 days per.week. 16. Live entertainment may occur subject to the approval of.a Live Entertainment Permit and dancing is prohibited. Live entertainment shall not occur more than 3 days, per week. Music shall be limited to indoor areas only and all windows and doors shall remain closed during performances except for incidental ingress and egress 'of patrons. Management of the business shall make every effort to keep the doors closed during performances. 17. The sale of beer, whether for on -site or off -site consumption, shall be prohibited. 18. A Special Events Permit is required for any event or promotional activity outside the normal operational characteristics of this retail business that would increase the expected occupancy Cbeyond 29 patrons and 6 employees at any one time or any other activities as specified in the Newport Beach Municipal Code to require such special events permit. G -5 City.of Newport Beach Planning Commission Resolution No. 1379 Pa c 5 of 6 I9. The exterior of the alcoholic beverage outlet shall be maintained free of litter and graffiti at all times. The owner or operator shall provide for daily removal of trash, litter debris and graffiti from the premises and on all abutting sidewalks within 20 feet of the premises. 20. The alcoholic beverage outlet operator shall take reasonable steps to discourage and correct objectionable conditions that constitute a nuisance in parking areas, sidewalks and areas surrounding the alcoholic beverage outlet and adjacent properties during business hours, if directly related to the patrons of the subject alcoholic beverage outlet. If the operator fails to discourage or correct nuisances, the Planning Commission may review, modify or revoke this Use Permit in accordance with Chapter 20.96 of the Zoning Code. 21. Alcoholic beverage sale from drive-up or walk -up windows shall be prohibited. 22. Any event or activity staged by an outside promoter or entity; where the business owner or his employees or representatives share in any profits, or pay any percentage or comunission to a promoter or any other person based upon money collected as a door. charge, cover charge or Any other form of admission charge, including minimum drink orders or. sale of drinks is prohibited. 23. Loitering, open container, and other signs specified by the Alcoholic Beverage Control Act shall be posted as required by the State Department of ABC. 24. Ail owners, managers and employees selling alcoholic beverages shall undergo and successfully complete a certified training program in responsible methods and skills for selling alcoholic beverages. The certified program must meet the standards of the California Coordinating Council on Responsible Beverage Service or other . certifying/licensing body, which the State may designate. The establishment shall comply with the requirements of this section within 180 days of the issuance of- the certificate of occupancy. Records of each owner's, manager's and employee's successful completion of the required certified training program shall be maintained on the premises and shall be presented upon request by a representative of the City of Newport Beach. 25. The applicant is required to obtain all applicable permits from the City Building and Fire Departments. -The construction plans must comply with the most recent, City- adopted version of the California Building Code. Adequate access and exiting must be provided in accordance with the Building Code. 26. The facility and related off - street parking shall conform to the requirements of the. Uniform Building Code. The project shall comply with State Disabled Access requirements. 27. Where grease may be introduced into the drainage systems, grease interceptors shall be installed on all fixtures as required by the Uniform Plumbing Code, unless otherwise approved by the Building Department and the Utilities Department. 28. Health Department approval is required for any changes to the kitchen and other portions of the building that require a Building Permit. l G -6 ■ City of Newport Beach Planning Commission Resolution No. 1579 Page 6 of 6 29. A handicapped assessable public resttooms are required. The restrooms must be in compliance with the Uniform Plumbing Code and all applicable Uniform Building Code requirements. 30. The owner /operator of the use shall enter into an agreement to provide and maintain a minimum of 21 parking spaces within the Lido Marina Village parking garage to be accessible at all rimes during the operation of the use. 31. The applicant or operator of the facility may provide valet attendant service for the use in conjunction with the Lido Marina Village parking garage. The applicant or operator shall prepare a valet operated parking plan to be reviewed and approved by the City Traffic Engineer prior to the commencement of the valet service use. 32. Delivery vehicles shall not park within the public right -of -way of via Lido and Via Oporto. 33. The operator of the restaurant facility shall be responsible for the control of noise generated by the subject facility. The noise generated by the proposed use shall 'comply with the provisions of Chapter 14.26 of the Newport Beach Municipal Code: The maximum noise shall be limited to no more than depicted below for the specified time periods unless the ambient noise level is higher, 34. Upon evidence that noise generated by the project exceeds the noise standards established by Chapter 20.26 (Community Noise Control) of the Municipal Code, the Planning Director may require that the applicant or successor retain a qualified engineer specializing in noise/acoustics to monitor the sound generated by the restaurant facility to develop a set of corrective measures . necessary in order to insure compliance. G -7 Between the hours of Between ttie hours of 7:OOAM and 10:00PM 7:OOAM and 10:00PM Location Interior Exterior Interior Exterior Residential Pro rty 45dBA 55dBA 4OdBA 50dBA Residential Property located within 100 feet of a commercial 45dBA 60dBA 45iiBA 50dBA ro rt Mixed Use Rro y 45dBA 60dBA ' 45dBA 5OdBA Commercial Property N/A 65d13A NIA 6OdBA 34. Upon evidence that noise generated by the project exceeds the noise standards established by Chapter 20.26 (Community Noise Control) of the Municipal Code, the Planning Director may require that the applicant or successor retain a qualified engineer specializing in noise/acoustics to monitor the sound generated by the restaurant facility to develop a set of corrective measures . necessary in order to insure compliance. G -7 State Bar of CA:: Attomey Search r =1 SAXT19 Thursday, March 20, 2000 Home a Attorney Search ATTORNEY 9F-ARCH Page l of 1 Attorney Name or Bar Number A*th F Stockton - _ _ Advanced Search o U Include similarly sounding names and alternate spellings Your search for Arthur F Stockton returned no results. Would you like to search for names that sound Ike Arthur F Stockton? Contact Ud Site Map Privacy Policy Notice$ ®2008 The State Bar of CakforNa H -1 http : / /merab=.calbar.mgov /searchh nember _search.aspx ?ms= Axthurl-F. +Stockton 3/20/2008 Mr. Arthur F Stockton Mailing Address: 9030 W Sahara Ave Suite 137 /• _ Les Vegas, NV 89117 -0001 l Telephone: Fax: Law School: V OF A Admitted to Practice: 1985 Admitted to AZ Bar: November 9, 1985 3urisc!"on: ARIZONA Professional !lability Insurances, Mat reoulred to report Status: Inactive Activity+: CEk here to close lawyer activity. Date Activity Detail Page 1 of I 02127/05 inactive Membership Status Change - 11/29/01 AWy Membership Status Change 03102/01 Retired Membership Status Change 1 This Web site displays changes in membership status and disciplinary actions taken against a lawyer. It does not include pending disciplinary proceedings._ This Web site does not display all lawyer sanctions, such as informal reprimands. Contact the State Bar of Arizona at 602 -340 -7384 or use this automated form to confirm the lawyees entire record of activity. H -2 i http:// www .azbar.org/LegaiResources/lH— Detail .cfm ?ID =46325 &SearchPageOffset=1 3119/2068. C Contact Us Site Map Privacy Policy Notices ® 260S The State &arof Wlifomia http: / /members.calbar.ca.gov /search/ member_ search.aspx?ms = Carolyn +C. +Stockton 3/20/2008 H -3 Page 1 of 1 Ms. Carolyn C Stockton Mailing Address: 31761 Peppertree $end San Juan Capistrano, CA 92675 Telephone: 520 -476 -2200 Law School: ASU Admitted to Practice: 1985 Admitted to AZ Bar. November 9, 1985 3urisdicUon- ARIZDNA Professionaf Liability insurance: Not reouired to repo Status: Retired Activity: Click here to close lawyer activity. Date Activity Detail 01/181.05 Retired Membership Status Change 01/10/03 Inactive Membership Status Change 03/07/01 Retired r Membership Status Change 1 This Web site displays changes In membership status and disciplinary actions taken against a lawyer. it does not include pending disciplinary proceedings. _ This Web site does not display all lawyer sanctions, such as informaf reprimands. Contact the State Bar of Arrcone at 602 -340 -7384 or use this automated farm to confirm the IawyeNs entire record of activity. http:// Www.azbar.orgILegalResource&llvT DetaR.vfm ?ID= 40344 &SearchpageOffsei =l 3/19/2008 H-4 Entity Details - Secretary of State, Nevada 1 Page 1 of HOME 1 ABOUT ROSS NEWS FAQ CO Information Center Election Center Business Center Licensing Center Securities Center O My Data Reports I Business Entity Search I Fee Schedule (Data Reports) I SVELTE BODY CENTERS, INC. Business Entity Information Status: Revoked on 61112007 Type: Domestic Corporatio Qualibdng State: NV M ad Bv: .. .�. r. Resident Agent Information. Name: ARTHUR F STOCKTON Address 1: 19M W SAHARA' Address 2:. Par Share Court C-tty: LAS VEGAS State: NV Zip Code: 89120 Phone: Faic Email: Marling Address 1: Mailing Address 2: Mailing City: Marring State: Maalling Zip Code: View all business; entities under ftipaderit agent Financial Information No Par Share Count 0 Capital Amount: $100.00 Par Share Court 100.00 Par Shar a Value: $1.00 Zip Code: Officers C Include Inactive President- ARTHUR STOCKTON Address 1: 2255 E SUNSET RD #2070 -A Address 2: City: LAS VEGAS State: NV Zip Code: 89119 Country . H -$ https: / /esos.state.nv.us/SO S Services/ AnonymousAccess/ CorpSearch /CorpDetails.aspx ?lx8... 3/19/2008 Entity Details - Secretary of State, Nevada . , Page 2 of 2 Status: I Active Emat Secretary - ARTHUR STOCKTON Address 1: 12256 E SUNSET RD #2070 -A Address 2: City: LAS VEGAS State: NV Zip Code: 89119 �6jw. Slafus: Active EtnaO: Treasurer - ARTHUR STOCKTON Address 1: 2255 E SUNSET RD #2070x4 Address 2 City: LAS VEGAS Sys; NV Zip Code: 89119 Country: Status: Active. E- ActionslAmendments You are currently not logged in Nevada Secretary of State, Rose Miller. copyright 2007. AN rights reserved. C. { H -6 https: / /esos. state. nv. us/ SOSServices/ AnonymousAccess/ CorpSearch /CoTpDetails.aspx ?lx8... 3/19/2008. i tit- u�.�+l.�� cc�f -- %✓1w»+.rx�.Jw -� � � 7 -c�� ap AIR COMMERCIAL REAL ESTATE ASSOCIATION STANDARD INDUSTRIAL /COMMERCIAL SINGLE- TENANT LEASE -- NET (DO NOT USE THIS FORM FOR MULTI - TENANT BUILDINGS) 1. Basic Provisions ( "Basic Provisions "). 1.1 Parties: This Lease ( "Lease "), dated for reference purposes only July 16, 2008 , Is made by and between Dennis and Chris Overstreet, individuals ( "Lessor") and HOM Real Estate Group, a California corporation ( "Lessee "), (collectively the "Parties," or Individually a "Party "). 1.2 Premises: That certain real property, including all improvements therein or to be provided by Lessor under the terms of this Lease, and commonly known as 3400 Via Lido, Newport Beach located in the County of Orange , State of California and generally described as (describe briefly the nature of the property and, if applicable, the "Project ", if the property is located within a Project) a freestanding, single—story, 2,696 square foot office /retail building ( "Premises "). (See also Paragraph 2) 1.3 Tenn:5 years and -0— months ("Original Term ") commencing October 1, 2008 ( "Commencement Date ") and ending September 30, 2012 ( "Expiration Date "). (See also Paragraph 3) 1.4 Early Possession: Seven (7) days prior to commencement ( "Early Possession Date "). (See also Paragraphs 3.2 and 3.3) 1.5 Base Rent: $10,004.67 per month ("Base Rent "), payable on the f r s t day of each month commencing October 1, 2008 or upon completion of tenant improvements but no later than December 1, 2008 or no later than three (3) months after the issuance of city permits -, whichever is sooner .(See also Paragraph 4) R1 If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted. 1.6 Base Rent and Other Monies Paid Upon Execution: (a) Base Rent: $10, 004. 67 for the period October 1 -31, 2008 (b) (s) Security Deposit: $44, 000. 67 Asseeiatien Fees; $ ( "Security Deposit"). for the (See also Paragraph 5) (d) Other: $983.29 period for October 1 -31, 2008 taxes and insurance (e) Total Due Upon Execution of this Lease: $54, 988.63 (see paragraph 55 of Addendum 1) 1.7 Agreed Use: Residential real estate office . (See also Paragraph 6) 1.8 Insuring Party: Lessor is the "Insuring Party" unless otherwise stated herein. (See also Paragraph 8) 1.9 Real Estate Brokers: (See also Paragraph 15) (a) Representation: The following real estate brokers (the "Brokers ") and brokerage relationships exist in this transaction (check applicable boxes): e RI Grubb & Ellis represents both Lessor and Lessee ( "Dual Agency"). (b) Payment to Brokers: Upon execution and delivery of this Lease by both Parties, Lessor shall pay to the Broker the fee agreed to in their separate written agreement (or if there is no such agreement, the sum Of er f ive (5) % of the total Base Rent) for the brokerage services rendered by the Brokers. 1.10 Guarantee. The obligations of the Lessee under- this- Lease aFe -to be quaFan eed by 1.11 Attachments. Attached hereto are the following, all of which constitute a part of this Lease: EI an Addendum consisting of Paragraphs 51 through 57 ❑ a plot plan depicting the Premises; m a current set of the Rules and Regulations; ❑ a Work Letter, ❑ other (specify): Premises. 2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for the term, at PAGE 1 OF 16 02001 • AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM upon all of the terms, covenants and conditions set forth in this Lease. Unless otherwise provided herein, any statement of size set forth In this Lease, or that may have been used in calculating Rent, is an approximation which the Parties agree is reasonable and any payments based thereon are not subject to revision whether or not the actual size Is more or less. Note: Lessee Is advised to verify the actual size prior to executing this Lease. 2.2 Condition. Lessor shall deliver the Premises to Lessee broom clean and free of debris on the Commencement Date or the Early Possession Date, whichever first occurs ( "Start Date "), and, warrants that the existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning systems ( "HVAC "), loading doors, sump pumps, if any, and all other such elements in the Premises, other than those constructed by Lessee, shall be in good operating condition on said date, that the structural elements of the roof, bearing walls and foundation of any buildings on the Premises (the "Building ") shall be free of material defects, and that the Premises do not contain hazardous levels of any mold or fungi defined as toxic under applicable state or federal law. If a non - compliance with said warranty exists as of the Start Date, or If one of such systems or elements should malfunction or fall within the appropriate warranty period, Lessor shall, as Lessor's sole obligation with respect to such matter, except as otherwise provided in this Lease, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent of such non - compliance, malfunction or failure, rectify same at Lessor's expense. The warranty periods shall be as follows: (1) 6 months as to the HVAC systems, and (ii) 30 days as to the remaining systems and other elements of the Building. If Lessee does not give Lessor the required notice within the appropriate warranty period, correction of any such non - compliance, malfunction or failure shall be the obligation of Lessee at Lessee's sole cost and expense. 2.3 Compliance. Lessor warrants that to the best of its knowledge the improvements on the Premises comply with the building codes, applicable laws, covenants or restrictions of record, regulations, and ordinances ( "Applicable Requirements ") that were in effect at the time that each improvement, or portion thereof, was constructed. Said warranty does not apply to the use to which Lessee will put the Premises, modifications which may be required by the Americans with Disabilities Act or any similar laws as a result of Lessee's use (see Paragraph 50), or to any Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or to be made by Lessee. NOTE: Lessee is responsible for determining whether or not the Applicable Requirements, and especially the zoning, are appropriate for Lessee's intended use, and acknowledges that past uses of the Premises may no longer be allowed. If the Premises do not comply with said warranty. Lessor shall, except as otherwise provided, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent of such non - compliance, rectify the same at Lessor's expense. If Lessee does not give Lessor written notice of a non - compliance with this warranty within 6 months following the Start Date, correction of that non - compliance shall be the obligation of Lessee at Lessee's sole cost and expense. If the Applicable Requirements are hereafter changed so as to require during the term of this Lease the construction of an addition to or an alteration of the Premises and/or Building, the remediation of any Hazardous Substance, or the reinforcement or other physical modification of the Unit, Premises and/or Building ( "Capital Expenditure"), Lessor and Lessee shall allocate the cost of such work as follows: (a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures are required as a result of the spec andunique use of the Premises by Lessee as compared with uses by tenants In general, Lessee shall be fully responsible for the reasonable cost thereof, provided, however that if such Capital Expenditure is required during the last 2 years of this Lease and the cost thereof exceeds 6 months' Base Rent, Lessee may instead terminate this Lease unless Lessor notes Lessee, in writing, within 10 days after receipt of Lessee's termination notice that Lessor has elected to pay the difference between the actual cost thereof and an amount equal to 6 months' Base Rent. If Lessee elects termination, Lessee shall Immediately cease the use of the Premises which requires such Capital Expenditure and deliver to Lessor written notice specifying a termination date at least 90 days thereafter. Such termination date shall, however, in no event be earlier than the last day that Lessee could legally utilize the Premises without commencing such Capital Expenditure. (b) If such Capital Expenditure is not the result of the specific and unique use of the Premises by Lessee (such as, governmentally mandated seismic modifications), then Lessor shall pay for such Capital Expenditure and Lessee shall only be obligated to pay, each month during the remainder of the term of this Lease, on the date that on which the Base Rent is due, an amount equal to 144th of the portion of such costs reasonably attributable to the Premises. Lessee shall pay Interest on the balance but may prepay its obligation at any time. If, however, such Capital Expenditure is required during the last 2 years of this Lease or if Lessor reasonably determines that it is not economically feasible to pay its share thereof, Lessor shall have the option to terminate this Lease upon 90 days prior written notice to Lessee unless Lessee notifies Lessor, in writing, within 10 days after receipt of Lessor's termination notice that Lessee will pay for such Capital Expenditure. If Lessor does not elect to terminate, and falls to tender its share of any such Capital Expenditure, Lessee may advance such funds and deduct same, with Interest, from Rent until Lessor's share of such costs have been fully paid. If Lessee is unable to finance Lessor's share, or if the balance of the Rent due and payable for the remainder of this Lease is not sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the right to terminate this Lease upon 30 days written notice to Lessor. (c) Notwithstanding the above, the provisions concerning Capital Expenditures are intended to apply only to non - voluntary, unexpected, and new Applicable Requirements. If the Capital Expenditures are instead triggered by Lessee as a result of an actual or proposed change in use, change in intensity of use, or modification to the Premises then, and in that event, Lessee shall either. (i) immediately cease such changed use or Intensity of use and/or take such other steps as may be necessary to eliminate the requirement for such Capital Expenditure, or (ii) complete such Capital Expenditure at its own expense. Lessee shall not, however, have any right to terminate this Lease. (see Addendum paragraph 57 - Rider to Paragrapho, 2.3) 2.4 Acknowledgements. Lessee acknowledges that: (a) it has been advised by Lessor and /or Brokers to satisfy itself with respect to the condition of the Premises (including but not limited to the electrical, HVAC and fire sprinkler systems, security, environmental aspects, and compliance with Applicable Requirements and the Americans with Disabilities Act), and their suitability for Lessee's intended use, (b) Lessee has made such investigation as it deems necessary with reference to such matters and assumes all responsibility therefor as the same relate to its occupancy of the Premises, and (c) neither Lessor, Lessor's agents, nor Brokers have made any oral or written representations or warranties with respect to said matters other than as set forth in this Lease. In addition, Lessor acknowledges that: (i) Brokers have made no representations, promises or warranties concerning Lessee's ability to honor the Lease or suitability to occupy the Premises, and (ii) it is Lessor's sole responsibility to Investigate the financial capability and /or suitability of all proposed tenants. 2.5 Lessee as Prior OwneNOccupant. The warranties made by Lessor in Paragraph 2 shall be of no force or effect if immediately prior to too Start Date Lessee was the owner or occupant of the Premises. In such event, Lessee shall be responsible for any necessary corrective PAGE 2 OF 18 M01 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM 3.1 Term. The Commencement Date, Expiration Date and Original Term of this Lease are as specified in Paragraph 1.3. 3.2 Early Possession. If Lessee totally or partially occupies the Premises prior to the Commencement Date, the obligation to pay Base Rent shall be abated for the period of such early possession. All other terms of this Lease (including but not limited to the obligations to pay Real Property Taxes and insurance premiums and to maintain the Premises) shall be in effect during such period. Any such early possession shall not affect the Expiration Date. 3.3 Delay In Possession. Lessor agrees to use its best commercially reasonable efforts to deliver possession of the Premises to Lessee by the Commencement Date. If, despite said efforts, Lessor is unable to deliver possession by such date, Lessor shall not be subject to any liability therefor, nor shall such failure affect the validity of this Lease. Lessee shall not, however, be obligated to pay Rent or perform Its other obligations unfil Lessor delivers possession of the Premises and any period of rent abatement that Lessee would otherwise have enjoyed shall run from the date of delivery of possession and continue for a period equal to what Lessee would otherwise have enjoyed under the terms hereof, but minus any days of delay caused by the acts or omissions of Lessee. If possession Is not delivered within 60 days after the Commencement Date, Lessee may, at its option, by notice in writing within 10 days after the end of such 60 day period, cancel this Lease, in which event the Parties shall be discharged from all obligations hereunder. If such written notice Is not received by Lessor within said 10 day period, Lessee's right to cancel shall terminate. If possession of the Premises is not delivered within 120 days after the Commencement Date, this Lease shall terminate unless other agreements are reached between Lessor and Lessee, in writing. 3.4 Lessee Compliance. Lessor shall not be required to deliver possession of the Premises to Lessee until Lessee complies with its obligation to provide evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee shall be required to perform all of its obligations under this Lease from and after the Start Date, including the payment of Rent, notwithstanding Lessor's election to withhold possession pending receipt of such evidence of insurance. Further, if Lessee is required to perform any other conditions prior to or concurrent with the Start Date, the Start Date shall occur but Lessor may elect to withhold possession until such conditions are satisfied. 4. Rent. 4.1. Rent Defined. All monetary obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are deemed to be rent ( "Rent "). 4.2 Payment. Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States, without offset or deduction (except as specifically permitted in this Lease), on or before the day on which it is due. All monetary amounts shall be rounded to the nearest whole dollar. In the event that any invoice prepared by Lessor is inaccurate such inaccuracy shall not constitute a waiver and Lessee shall be obligated to pay the amount set forth in this Lease. Rent for any period during the term hereof which is for less than one full calendar month shall be prorated based upon the actual number of days of said month. Payment of Rent shall be made to Lessor at Its address stated herein or to such other persons or place as Lessor may from time to time designate in writing. Acceptance of a payment which is less than the amount then due shall not be a waiver of Lessor's rights to the balance of such Rent, regardless of Lessor's endorsement of any check so stating. In the event that any check, draft, or other instrument of payment given by Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to Lessor the sum of $25 in addition to any Late Charge and Lessor, at its option, may require all future Rent be paid by cashier's check. Payments will be applied first to accrued late charges and attorney's fees, second to accrued interest, then to Base Rent and Common Area Operating Expenses, and any remaining amount to any other outstanding charges or costs. 4.3 Association Fees. In addition to the Base Rent, Lessee shall pay to Lessor each month an amount equal to any owner's association or condominium fees levied or assessed against the Premises. Said monies shall be paid at the same time and in the same manner as the Base Rent. 5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the Security Deposit as security for Lessee's faithful performance of its obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain all or any portion of said Security Deposit for the payment of any amount due already due Lessor, for Rents which will be due in the future, and/ or to reimburse or compensate Lessor for any liability, expense, loss or damage which Lessor may suffer or incur by reason thereof. If Lessor uses or applies all or any portion of the Security Deposit, Lessee shall within 10 days after written request therefor deposit monies with Lessor sufficient to restore said Security Deposit to the full amount required by this Lease. If the Base Rent increases during the term of this Lease, Lessee shall, upon written request from Lessor, deposit additional monies with Lessor so that the total amount of the Security Deposit shall at all times bear the same proportion to the increased Base Rent as the initial Security Deposit bore to the initial Base Rent. Should the Agreed Use be amended to accommodate a material change in the business of Lessee or to accommodate a sublessee or assignee,. Lessor shall have the right to increase the Security Deposit to the extent necessary, in Lessor's reasonable judgment, to account for any increased wear and tear that the Premises may suffer as a result thereof. If a Change in control of Lessee occurs during this Lease and following such change the financial condition of Lessee is, in Lessor's reasonable judgment, significantly reduced, Lessee shall deposit such additional monies with Lessor as shall be sufficient to cause the Security Deposit to be at a commercially reasonable level based on such change In financial condition. Lessor shall not be required to keep the Security Deposit separate from its general accounts. Within 90 days after the expiration or termination of this Lease, Lessor shall return that portion of the Security Deposit not used or applied by Lessor. No part of the Security Deposit shall be considered to be held in trust, to bear interest or to be prepayment for any monies to be paid by Lessee under this Lease. 6. Use. 6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use, or any other legal use which Is reasonably comparable thereto, and for no other purpose. Lessee shall not use or permit the use of the Premises in a manner that is unlawful, creates damage, waste or a nuisance, or that disturbs occupants of or causes damage to neighboring premises or properties. Other than guide, signal and seeing eye dogs, Lessee shall not keep or allow in the Premises any pets, animals, birds, fish, or reptiles. Lessor shall not unreasonably withhold or delay its consent to any written request for a modification of the Agreed Use, so long as the same will not Impalr the structural Integrity of the Improvements on the Premises or the mechanical or electrical systems therein, and/or Is not significantly more burdensome to the Premises. If Lessor elects to withhold consent, Lessor shall w//'lthi days after such request give written notification of same, which notice shall Include an explanation of Lessor's objections to the change in the A6i d se. Hazardous Substances. PAGE 3 OF 18 02001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION I A FORM STN- 10 -6/0TE (a) Reportable Uses Require Consent. The term "Hazardous Substance" as used in this Lease shall mean any product, substance, or waste whose presence, use, manufacture, disposal, transportation, or release, either by Itself or in combination with other materials expected to be on the Premises, Is either: (i) potentially injurious to the public health, safety or welfare, the environment or the Premises, (it) regulated or monitored by any governmental authority, or (Iii) a basis for potential liability of Lessor to any governmental agency or third party under any applicable statute or common law theory. Hazardous Substances shall include, but not be limited to, hydrocarbons, petroleum, gasoline, and /or crude oil or any products, by- products or fractions thereof. Lessee shall not engage in any activity in or on the Premises which constitutes a Reportable Use of Hazardous Substances without the express prior written consent of Lessor and timely compliance (at Lessee's expense) with all Applicable Requirements. "Reportable Use" shall mean (i) the installation or use of any above or below ground storage tank, (ii) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, notice, registration or business plan is required to be filed with, any governmental authority, and/or (lil) the presence at the Premises of a Hazardous Substance with respect to which any Applicable Requirements requires that a notice be given to persons entering or occupying the Premises or neighboring properties. Notwithstanding the foregoing, Lessee may use any ordinary and customary materials reasonably required to be used In the normal course of the Agreed Use, ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household cleaning materials, so long as such use is in compliance with all Applicable Requirements, is not a Reportable Use, and does not expose the Premises or neighboring property to any meaningful risk of contamination or damage or expose Lessor to any liability therefor. In addition, Lessor may condition its consent to any Reportable Use upon receiving such additional reasonable assurances as Lessor reasonably deems necessary to protect itself, the public, the Premises and /or the environment against damage, contamination, injury and /or liability, including, but not limited to, the installation (and removal on or before Lease expiration or termination) of protective modifications (such as concrete encasements) and /or increasing the Security Deposit. (b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to believe, that a Hazardous Substance has come to be located in, on, under or about the Premises, other than as previously consented to by Lessor, Lessee shall immediately give written notice of such fact to Lessor, and provide Lessor with a copy of any report, notice, claim or other documentation which it has concerning the presence of such Hazardous Substance. (c) Lessee Rmediation. Lessee shall not cause or permit any Hazardous Substance to be spilled or released in, on, under, or about the Premises (including through the plumbing or sanitary sewer system) and shall promptly, at Lessee's expense, comply with all Applicable Requirements and take all investigatory and /or remedial action reasonably recommended, whether or not formally ordered or required, for the cleanup of any contamination of, and for the maintenance, security and /or monitoring of the Premises or neighboring properties, that was caused or materially contributed to by Lessee, or pertaining to or involving any Hazardous Substance brought onto the Premises during the term of this Lease, by or for Lessee, OF any th rd party or by any third party invitee of Lcooee. (d) Lessee Indemnification. Lessee shall indemnify, defend and hold Lessor, Its agents, employees, lenders and ground lessor, if any, harmless from and against any and all loss of rents and /or damages, liabilities, judgments, claims, expenses, penalties, and attorneys' and consultants' fees arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee, or any third party (provided, however, that Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance under the Premises from adjacent properties not caused or contributed to by Lessee). Lessee's obligations shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Lessee, and the reasonable cost of investigation, removal, remediation, restoration and /or abatement, and shall survive the expiration or termination of this Lease. No termination, cancellation or release agreement entered Into by Lessor and Lessee shall release Lessee from its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor In writing at the time of such agreement. (See Addendum paragraph 57 - Rider to Paragraph 5.2d) (e) Lessor Indemnification. Lessor and its successors and assigns shall Indemnify, defend, reimburse and hold Lessee, its employees and lenders, harmless from and against any and all environmental damages, including the cost of remediation, which result from Hazardous Substances which existed on the Premises prior to Lessee's occupancy or which are caused by the gross negligence or willful misconduct of Lessor, its agents or employees. Lessor's obligations, as and when required by the Applicable Requirements, shall Include, but not be limited to, the cost of investigation, removal, remediation, restoration and /or abatement, and shall survive the expiration or termination of this Lease. (see Addendum paragraph 57- Rider to Paragraph 6.2e) (f) Investigations and Remadlatlons. Lessor shall retain the responsibility and pay for any investigations or remediation measures required by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to Lessee's occupancy, unless such remediation measure is required as a result of Lessee's use (including "Alterations ", as defined in paragraph 7.3(s) below) of the Premises, in which event Lessee shall be responsible for such payment. Lessee shall cooperate fully in any such activities at the request of Lessor, Including allowing Lessor and Lessors agents to have reasonable access to the Premises at reasonable times in order to carry out Lessor's investigative and remedial responsibilities. (g) Lessor Termination Option. If a Hazardous Substance Condition (see Paragraph 9.1(a)) occurs during the term of this Lease, unless Lessee Is legally responsible therefor (in which case Lessee shall make the investigation and remediation thereof required by the Applicable Requirements and this Lease shall continue in full force and effect, but subject to Lessor's rights under Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessors option, either (1) investigate and remediate such Hazardous Substance Condition, if required, as soon as reasonably possible at Lessors expense, in which event this Lease shall continue in full force and effect, or (ii) if the estimated cost to remedlate such condition exceeds 12 times the then monthly Base Rent or $100,000, whichever is greater, give written notice to Lessee, within 30 days after receipt by Lessor of knowledge of the occurrence of such Hazardous Substance Condition, of Lessor's desire to terminate this Lease as of the date 60 days following the date of such notice. In the event Lessor elects to give a termination notice, Lessee may, within 10 days thereafter, give written notice to Lessor of Lessee's commitment to pay the amount by which the cost of the remediation of such Hazardous Substance Condition exceeds an amount equal to 12 times the then monthly Base Rent or $100,000, whichever is greater. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days following such commitment. In such event, this Lease shall continue in full force and effect, and Lessor shall proceed to make such remediation as soon reasonably possible after the required funds are available. If Lessee does not give such notice and provide the required funds or assurance the, w hin the time provided, this Lease shall terminate as of the date specified in Lessor's notice of termination. 6.3 Lessee's Compliance with Applicable Requirements. Except as otherwise provided in this Lease, Lessee shall, at Lessee's sol x ense, fully, diligently and in a timely manner, materially comply with all Applicable Requirements, the requirements of any applicable fire PAGE 4 OF 18 INITIALS V1OE @2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM ST insurance underwriter or rating bureau, and the recommendations of Lessor's engineers and/or consultants which relate in any manner to the such Requirements, without regard to whether such Requirements are now in effect or become effective after the Start Date. Lessee shall, within 10 days after receipt of Lessor"s written request, provide Lessor with copies of all permits and other documents, and other information evidencing Lessee's compliance with any Applicable Requirements specified by Lessor, and shall immediately upon receipt, notify Lessor in writing (with copies of any documents involved) of any threatened or actual claim, notice, citation, warning, complaint or report pertaining to or involving the failure of Lessee or the Premises to comply with any Applicable Requirements. Likewise, Lessee shall immediately give written notice to Lessor of., (1) any water damage to the Premises and any suspected seepage, pooling, dampness or other condition conducive to the production of mold; or (ii) any mustiness or other odors that might indicate the presence of mold in the Premises. 6.4 Inspection; Compliance. Lessor and Lessor "s "Lender" (as defined in Paragraph 30) and consultants shall have the right to enter Into Premises at any time, in the case of an emergency, and otherwise during bU5ine65 hours upon 24 hours prior notice at for the purpose of inspecting the condition of the Premises and for verifying compliance by Lessee with this Lease. The cost of any such inspections shall be paid by Lessor, unless a violation of Applicable Requirements, or a Hazardous Substance Condition (see paragraph 9.1) is found to exist or be imminent, or the inspection is requested or ordered by a governmental authority. In such case, Lessee shall upon request reimburse Lessor for the reasonable cost of such inspection, so long as such inspection is reasonably related to the violation or contamination. In addition, Lessee shall provide copies of all relevant material safety data sheets ( MSDS) to Lessor within 10 days of the receipt of a written request therefor. 7. Maintenance; Repairs, Utility Installations; Trade Fixtures and Alterations. (a) in General- Subject to the PMVISIGRS Gf PaFagFaph 2.2 (Gendit on), 2 3 (Gamp! anee), 6.3 (Lessee's Gamplianse with Applisable Requipe!T18RIB), 7-:2 (LeSSOeS ()bI1gatI0A8), 9 (Damage or DestruGden), aAd 14 (GandemnatieR), Lessee shall, at Lessee's sale expense, keep the , Ad— whether and p6q the PFemises in good epdef, condition and mpali;, and Lessee shall prtimptly pay is Lessep a sum equal to 445% i RGludiRS, but net I Fnited to- all equ liment or faGilitiSS, suGh as plumbing, HVAG equipment, eleGIF sail, 119MIA9 faGil tdeS, bOileFSo PPOSSUFe V986916, fiFe proteGtion SYSteM, RAUFS8, Walls (WONGIF and exleroo, feuRdatlens, WilingS, Feefs, roof dFainageillsystems, fieeFs, windows, deem, plate glass, skylights, landscaping, drimways, paF!qing leis, fences, Fetaining walls, signs, sidewaiiiis and Parkways i9eated in, an, OF adjael)Fll is the PreffliseS. Lessee, in keep! .-- I" P---: -88 1- -1--d-GFdeF, sendition and tape F, shall exemise and fieFferm good FRaintenange pFaGtiGes, speelfiGaily inaluding the PMGUFement and FnaintenAnsp of the saw Ge e9ntFaGtS FOqUired by PaFa@FaPh 7.4(b) below. Lessee's obilgat * oRs shall iRGIUde 1`06110FatigRS, Feplasements OF Feneivals when neRPR-RAFY to keep the PFeFAises and all imppevements theMOR OF a paft theme! In good eFdeF, GoRditieR and state of Fepair-. Lessee shall, duNng the teFm eflhis Lease, keep the exteFlei: appeaFanse ef the Building la a fiFet elass eenifitien (ineluding, e.g. gFAtI removal) (b) ServiGe Gentracts- Lessee shall, at Lessee's Gale expense, pFeeuFo and maintain eenti;asts, with sepies is Le--- impFayaments, if any, if and when natall 41AAG equipment, (N) belleF, and picesswe vessels, (iii) IfFe e)AIngulshing systems, Inducing fire alaFR; aRNeF 6make deteation. (,,) InRFIgeggin-R RF� IFFFgation systems, (;,) reg saysFing and dFains, and (vi) slarifism. Hewevs�, Lessor demand, f9F the Gast theFeOf. (G) Failure to Peftpm. If Lessee falls to perform Lessee!s obligations undeF this Paragraph 7.1, LeSSOF May ePAeF UPOR the after 10 days' pFi9F written Aetlee to Lessee (emeept In the ease of an emeigeriGy, R W;iah Gas@ no Relies shall be Fsq&ed), peFIQFFR BLIGh �hereaf'- behalf, of the rest 9f FBplaowR@ sush item, then suoh item she!' be Feplased by L8669F, and the Gast of !'ability resulting fmFA Lessee's fallum t9 BXeFdse and PeFfeFFA geed maintenanse finsiatiGes, if an Item described In PaFagraph 7.11(b) earmot be thereof shall be pFgFated between the Parties nAd Lamas RhRil grily be obligated to pay, eash moRth durlR9 the FamaipideF of the te� of this I ease, on the date an whqeh Base Rent is due, an arneunt equal t9 the PFaduat Of Multiply Rg the Gast Of SUGh mplasement by a fsast on, the RumelFRIPF of Whigh 1A ene, and the denerninatoF ef wh Gh is 14 4 (io. V! 4 4t]; of the east psF menth). Lessee shall pay IntpFest on the ungmaFtized balanse bul may pirepay its obligatign at any limp- 0 7.2 Lessor's Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 9 (Damage or Destruction) and 14 (Condemnation), it is intended by the Parties hereto that Lessor have no obligation, in any manner whatsoever, to repair and maintain the Premises, or the equipment therein, all of which obligations are Intended to be that of the Lessee. It is the intention of the Parties that the terms of this Lease govern the respective obligations of the Parties as to maintenance and repair of the Premises, and they expressly waive the benefit of any statute now or hereafter in effect to the extent it is inconsistent with the terms of this Lease. 7.3 Utility Installations; Trade Fixtures; Alterations. (a) Definitions. The term "Utility Installations" refers to all floor and window coverings, air and/or vacuum lines, power panels, electrical distribution, security and fire protection systems, communication cabling, lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises. The term "Trade Fixtures" shall mean Lessee's machinery and equipment that can be removed without doing material damage to the Premises. The term "Alterations" shall mean any modification of the improvements, other than Utility Installations or Trade Fixtures, whether by addition or deletion. "Lessee Owned Alterations and/or Utility Installations " are defined as Alterations and /or Utility Installations made by Lessee that are n4,At owned by Lessor pursuant to Paragraph 7.4(a). (b) Consent. Lessee shall not make any Alterations or Utility Installations to the Premises without Lessor's prior written consent. Lesse however, make non - structural Utility Installations to the interior of the Premises (excluding the roof) without such consent but upon notice to s s long as they are not visible from the outside, do not involve puncturing, relocating or removing the roof or any existing walls, will not affect PAGE 5OF 18 nom^ — 02001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STN•10.6 107E the electrical, plumbing, HVAC, and /or life safety systems, and the cumulative cost thereof during this Lease as extended does not exceed a sum equal to 3 month's Base Rent in the aggregate or a sum equal to one month's Base Rent in any one year. Notwithstanding the foregoing, Lessee shall not make or permit any roof penetrations and/or install anything on the roof without the prior written approval of Lessor. Lessor may, as a. precondition to granting such approval, require Lessee to utilize a contractor chosen and/or approved by Lessor. Any Alterations or Utility Installations that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor in written form with detailed plans. Consent shall be deemed conditioned upon Lessee's: (i) acquiring all applicable governmental permits, (ii) furnishing Lessor with copies of both the permits and the plans and specifications prior to commencement of the work, and (Iii) compliance with all conditions of said permits and other Applicable Requirements In a prompt and expeditious manner. Any Alterations or Utility Installations shall be performed in a workmanlike manner with good and sufficient materials. Lessee shall promptly upon completion furnish Lessor with as -built plans and specifications. For work which costs an amount in excess of one (1) month's Base Rent, Lessor may condition its consent upon Lessee providing a lien and completion bond in an amount equal to 46M 125% of the estimated cost of such Alteration or Utility Installation and /or upon Lessee's posting an additional Security Deposit with Lessor. (c) Lions; Bonds. Lessee shall pay, when due, all claims for labor or materials fumished or alleged to have been fumished to or for Lessee at or for use on the Premises, which claims are or may be secured by any mechanic's or matenalmen's lien against the Premises or any interest therein. Lessee shall give Lessor not less than 10 days notice prior to the commencement of any work in, on or about the Premises, and Lessor shall have the right to post notices of non - responsibility. If Lessee shall contest the validity of any such lien, claim or demand, then Lessee shall, at its sole expense defend and protect itself, Lessor and the Premises against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof. If Lessor shall require, Lessee shall fumish a surety bond in an amount equal to 469?k 125 of the amount of such contested lien, claim or demand, indemnifying Lessor against liability for the same. If Lessor elects to participate In any such action, Lessee shall pay Lessor's reaOOnaHc attorneys' fees and costs. 7.4 Ownership; Removal; Surrender, and Restoration. (a) Ownership. Subject to Lessor's right to require removal or elect ownership as hereinafter provided, all Alterations and Utility Installations made by Lessee shall be the property of Lessee, but considered a part of the Premises. Lessor may, at any time, elect in writing to be the owner of all or any specified part of the Lessee Owned Alterations and Utility Installations. Unless otherwise instructed per paragraph 7.4(b) hereof, all Lessee Owned Alterations and Utility Installations shall, at the expiration or termination of this Lease, become the property of Lessor and be surrendered by Lessee with the Premises. (b) Removal. By delivery to Lessee of written notice from Lessor not earler than 90 and not later than 30 days prior to the end of the term of this Lease, Lessor may require that any or all Lessee Owned Alterations or Utility Installations be removed by the expiration or termination of this Lease. Lessor may require the removal at any time of all or any part of any Lessee Owned Alterations or Utility Installations made without the required consent. (c) Surrender; Restoration. lessee shall surrender the Premises by the Expiration Date or any earlier termination date, with all of the improvements, parts and surfaces thereof broom clean and free of debris, and in good operating order, condition and state of repair, ordinary wear and tear excepted. "Ordinary weer and tear" shall not include any damage or deterioration that would have been prevented by good maintenance practice. Notwithstanding the foregoing, If this Lease is for 12 months or less, then Lessee shall surrender the Premises in the same condition as delivered to Lessee on the Start Date with NO allowance for ordinary wear and tear. Lessee shall repair any damage occasioned by the Installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations and /or Utility Installations, furnishings, and equipment as well as the removal of any storage tank installed by or for Lessee. Lessee shall completely remove from the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee, or * any third party invitee of Le55ee or any - third -pagy (except Hazardous Substances which were deposited via underground migration from areas outside of the Premises, or if applicable, the Premises) even if such removal would require Lessee to perform or pay for work that exceeds statutory requirements. Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee. Any personal property of Lessee not removed on or before the Expiration Date or any earlier termination date shall be deemed to have been abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may desire. The failure by Lessee to timely vacate the Premises pursuant to this Paragraph 7.4(c) without the express written consent of Lessor shall constitute a holdover under the provisions of Paragraph 26 below. 8. Insurance; Indemnity. - 8.1 Payment For Insurance. Lessee shall pay for all insurance required under Paragraph 8 except to the extent of the cost attributable to liability Insurance carried by Lessor under Paragraph 8.2(b) In excess of $2,000,000 per occurrence. Premiums for policy periods commencing prior to or extending beyond the Lease term shall be prorated to correspond to the Lease term. Payment shall be made by Lessee to Lessor within 10 days following receipt of an invoice. 8.2 Liability Insurance. (a) Carried by Lessee. Lessee shall obtain and keep in force a Commercial General Liability policy of insurance protecting Lessee and Lessor as an additional insured against claims for bodily injury, personal Injury and property damage based upon or arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be on an occurrence basis providing single limit coverage in an amount not less than $1,000,000 per occurrence with an annual aggregate of not less than $2,000,000. Lessee shall add Lessor as an additional insured by means of an endorsement at least as broad as the Insurance Service Organization's "Additional Insured- Managers or Lessors of Premises" Endorsement. The policy shall not contain any intra- insured exclusions as between Insured persons or organizations, but shall include coverage for liability assumed under this Lease as an " insured contract" for the performance of Lessee's indemnity obligations under this Lease. The limits of said insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation hereunder. Lessee shall provide an endorsement on its liability policy(ies) which provides that its insurance shall be primary to and not contributory with any similar insurance carried by Lessor, whose insurance shall be considered excess insurance only. (b) Carried by Lessor. Lessor shall maintain liability insurance as described in Paragraph 8.2(a), in addition to, and not in lieu of, the insurance required to be maintained by Lessee. Lessee shall not be named as an additional Insured therein. dfuin 3 Property Insurance - Building, Improvements and Rental Value. (a) Building and Improvements. The Insuring Party shall obtain and keep in force a policy or policies in the name of Lessor, with to Lessor, any ground - lessor, and to any Lender insuring loss or damage to the Premises. The amount of such insurance shall be equal to able repl acement cost of the Premises, as the same shall exist from time to time, or the amount required by any Lender, but in no event PAGE 6 OF 18 INITIALS IN 02001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STN - 10.6107E more than the commercially reasonable and available insurable value thereof. If Lessor is the Insuring Party, however, Lessee Owned Alterations and Utility Installations, Trade Fixtures, and Lessee's personal property shall be Insured by Lessee under Paragraph 8.4 rather than by Lessor. If the coverage is available and commercially appropriate, such policy or policies shall insure against all risks of direct physical loss or damage (except the perils of flood and/or earthquake unless required by a Lender), including coverage for debris removal and the enforcement of any Applicable Requirements requiring the upgrading, demolition, reconstruction or replacement of any portion of the Premises as the result of a covered loss. Said policy or policies shall also contain an agreed valuation provision in lieu of any coinsurance clause, walver of subrogation, and inflation guard protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers for the city nearest to where the Premises are located. If such insurance coverage has a deductible clause, the deductible amount shall not exceed $1,000 per occurrence, and Lessee shall be liable for such deductible amount in the event of an Insured Loss. (b) Rental Value. The Insuring Party shall obtain and keep in force a policy or policies in the name of Lessor with loss payable to Lessor and any Lender, insuring the loss of the full Rent for one year with an extended period of Indemnity for an additional 180 days ( "Rental Value Insurance"). Said insurance shall contain an agreed valuation provision in lieu of any coinsurance clause, and the amount of coverage shall be adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next 12 month period. Lessee shall be liable for any deductible amount in the event of such loss. (c) Adjacent Premises. If the Premises are part of a larger building, or of a group of buildings owned by Lessor which are adjacent to the Premises, the Lessee shall pay for any Increase in the premiums for the property insurance of such building or buildings if said increase is caused by Lessee's acts, omissions, use or occupancy of the Premises. 8.4 Lessee's Property; Business Interruption Insurance. (a) Property Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee's personal property, Trade Fixtures, and Lessee Owned Alterations and Utility Installations. Such insurance shall be full replacement cost coverage with a deductible of not to exceed $1,000 per occurrence. The proceeds from any such insurance shall be used by Lessee for the replacement of personal property, Trade Fixtures and Lessee Owned Alterations and Utility Installations. Lessee shall provide Lessor with written evidence that such Insurance is in force. (b) Business Interruption. Lessee shall obtain and maintain loss of income and extra expense Insurance in amounts as will reimburse Lessee for direct or indirect loss of earnings attributable to all perils commonly insured against by prudent lessees in the business of Lessee or attributable to prevention of access to the Premises as a result of such perils , provided that Such insurance Shall not exceed one (1) year of loss. (c) No Representation of Adequate Coverage. Lessor makes no representation that the limits or forms of coverage of Insurance specified herein are adequate to cover Lessee's property, business operations or obligations under this Lease. 8.5 Insurance Policies. Insurance required herein shall be by companies duly licensed or admitted to transact business in the state where the Premises are located, and maintaining during the policy term a "General Policyholders Rating" of at least A-, VI, as set forth in the most current issue of "Best's Insurance Guide ", or such other rating as may be required by a Lender. Lessee shall not do or permit to be done anything which invalidates the required insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor certified copies of policies of such insurance or certificates evidencing the existence and amounts of the required insurance. No such policy shall be cancelable or subject to modification except after 30 days prior written notice to Lessor. Lessee shall, at least 10 days prior to the expiration of such policies, furnish Lessor with evidence of renewals or "insurance binders" evidencing renewal thereof, or Lessor may order such insurance and charge the cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon demand. Such policies shall be for a term of at least one year, or the length of the remaining term of this Lease, whichever is less. If either Party shall fail to procure and maintain the insurance required to be carried by It, the other Party may, but shall not be required to, procure and maintain the same. 8.6 Waiver of Subrogation. Without affecting any other rights or remedies, Lessee and Lessor each hereby release and relieve the other, and waive their entire right to recover damages against the other, for loss of or damage to its property arising out of or Incident to the perils required to be insured against herein. The effect of such releases and waivers is not limited by the amount of insurance carried or required, or by any deductibles applicable hereto. The Parties agree to have their respective property damage insurance carders waive any right to subrogation that such companies may have against Lessor or Lessee, as the case may be, so long as the Insurance Is not Invalidated thereby. 8.7 Indemnity. Except for Lessor's gross negligence or willful misconduct, Lessee shall Indemnify, protect, defend and hold harmless the Premises, Lessor and its agents, Lessor's master or ground lessor, partners and Lenders, from and against any and all claims, loss of rents and /or damages, liens, judgments, penalties, attorneys' and consultants' fees, expenses and /or liabilities arising out of, involving, or in connection with, the use and /or occupancy of the Premises by Lessee. If any action or proceeding is brought against Lessor by reason of any of the foregoing matters, Lessee shall upon notice defend the same at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need not have first paid any such claim in order to be defended or indemnified. 8.8 Exemption of Lessor and its Agents from Liability. Notwithstanding the negligence or breach of this Lease by Lessor or its agents, neither Lessor nor its agents shall be liable under any circumstances for: (1) Injury or damage to the person or goods, wares, merchandise or other property of Lessee, Lessee's employees, contractors, Invitees, customers, or any other person in or about the Premises, whether such damage or Injury Is caused by or results from fire, steam, electricity, gas, water or rain, indoor air quality, the presence of mold or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing. HVAC or lighting fixtures, or from any other cause, whether the said injury or damage results from conditions arising upon the Premises or upon other portions of the building of which the Premises are a part, or from other sources or places, (ii) any damages arising from any act or neglect of any other tenant of Lessor or from the failure of Lessor or its agents to enforce the provisions of any other lease in the Project, or (iii) injury to Lessee's business or for any loss of income or profit therefrom. Instead, it is intended that Lessee's sole recourse in the event of such damages or injury be to file a claim on the insurance policy(ies) that Lessee is required to maintain pursuant to the provisions of paragraph S. 8.9 Failure to Provide Insurance. Lessee acknowledges that any failure on its part to obtain or maintain the insurance required herein will expose Lessor to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely difficult to ascertain. Accordingly, for any month or portion thereof that Lessee does not maintain the required insurance and/or does not provide Lessor with ih quired binders or oer iflcates evidencing the existence of the required Insurance, the Base Rent shall be automatically increased, without any requi nt for notice to Lessee, by an amount equal to 10% of the then existing Base Rent or $100, whichever is greater. The parties agree that such inc. e n Base Rent represents fair and reasonable compensation for the additional risk/costs that Lessor will Incur by reason of Lessee's failure to PAGE 7 OF 18 ®2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION QX �LS FORM STN40 -6 107E maintain the required insurance. Such increase in Base Rent shall In no event constitute a waiver of Lessee's Default or Breach with respect to the failure to maintain such insurance, prevent the exercise of any of the other rights and remedies granted hereunder, nor relieve Lessee of its obligation to maintain the insurance specified in this Lease. 9. Damage or Destruction. 9.1 Definitions. (a) "Premises Partial Damage" shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility Installations, which can reasonably be repaired in 6 months or less from the date of the damage or destruction. Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total. Notwithstanding the foregoing, Premises Partial Damage shall not include damage to windows, doors, and/or other similar items which Lasses has the responsibility to repair or replace pursuant to the provisions of Paragraph 7.1. (b) "Premises Total Destruction" shall mean damage or destruction to the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which cannot reasonably be repaired in 6 months or less from the date of the damage or destruction. Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total. (c) "Insured Loss" shall mean damage or destruction to Improvements on the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which was caused by an event required to be covered by the insurance described In Paragraph 8.3(a), irrespective of any deductible amounts or coverage limits involved. (d) "Replacement Cost" shall mean the reaoonable cost to repair or rebuild the Improvements owned by Lessor at the time of the occurrence to their condition existing immediately prior thereto, Including demolition, debits removal and upgrading required by the operation of Applicable Requirements, and without deduction for depreciation. (e) "Hazardous Substance Condition" shall mean the occurrence or discovery of a condition involving the presence of, or a contamination by, a Hazardous Substance as defined In Paragraph 6.2(a), in, on, or under the Premises which requires repair; remediation, or restoration. 9.2 Partial Damage - Insured Loss. If a Premises Partial Damage that is an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon as reasonably possible and this Lease shall continue in full force and effect; provided, however, that Lessee shall, at Lessor's election, make the repair of any damage or destruction the total cost to repair of which is $10,000 or less, and, in such event, Lessor shall make any applicable Insurance proceeds available to Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, if the required insurance was not in force or the insurance proceeds are not sufficient to effect such repair, the Insuring Party shall promptly contribute the shortage in proceeds (except as to the deductible which is Lessee's responsibility) as and when required to complete said repairs. In the event, however, such shortage was due to the fact that, by reason of the unique nature of the improvements, full replacement cost Insurance coverage was not commercially reasonable and available, Lessor shall have no obligation to pay for the shortage in Insurance proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover same, or adequate assurance thereof, within 10 days following receipt of written notice of such shortage and request therefor. If Lessor receives said funds or adequate assurance thereof within said 10 day period, the party responsible for making the repairs shall complete them as soon as reasonably possible and this Lease shall remain in full force and effect. If such funds or assurance are not received, Lessor may nevertheless elect by written notice to Lessee within 10 days thereafter to: (1) make such restoration and repair as Is commercially reasonable with Lessor paying any shortage in proceeds, in which case this Lease shall remain in full force and effect, or (ii) have this Lease terminate 30 days thereafter. Lessee shall not be entitled to reimbursement of any funds contributed by Lessee to repair any such damage or destruction. Premises Partial Damage due to flood or earthquake shall be subject to Paragraph 9.3, notwithstanding that there may be some insurance coverage, but the net proceeds of any such insurance shall be made available for the repairs H made by either Party. 9.3 Partial Damage - Uninsured Loss. If a Premises Partial Damage that Is not an Insured Loss occurs, unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessee's expense), Lessor may either: (1) repair such damage as soon as reasonably possible at Lessor's expense, in which event this Lease shall continue in full force and effect, or (II) terminate this Lease by giving written notice to Lessee within 30 days after receipt by Lessor of knowledge of the occurrence of such damage. Such termination shall be effective 60 days following the date of such notice. In the event Lessor elects to terminate this Lease, Lessee shall have the right within 10 days after receipt of the termination notice to give written notice to Lessor of Lessee's commitment to pay for the repair of such damage without reimbursement from Lessor. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days after making such commitment. In such event this Lease shall continue in full force and effect, and Lessor shall proceed to make such repairs as soon as reasonably possible after the required funds are available. If Lessee does not make the required commitment, this Lease shall terminate as of the date specified In the termination notice. 9.4 Total Destruction. Notwithstanding any other provision hereof, if a Premises Total Destruction occurs, this Lease shall terminate 60 days following such Destruction. If the damage or destruction was caused by the gross negligence or willful misconduct of Lessee, Lessor shall have the right to recover Lessor's damages from Lessee, except as provided in Paragraph 8.6. 9.5 Damage Near End of Term. If at any time during the last 6 months of this Lease there is damage for which the cost to repair exceeds one month's Base Rent, whether or not an Insured Loss, Lessor or Le55ec may terminate this Lease effective 60 days following the date of occurrence of such damage by giving a written termination notice to Lessee within 30 days after the date of occurrence of such damage. Notwithstanding the foregoing, if Lessee at that time has an exercisable option to extend this Lease or to purchase the Premises, then Lessee may preserve this Lease by, (a) exercising such option and (b) providing Lessor with any shortage in insurance proceeds (or adequate assurance thereof) needed to make the repairs on or before the earlier of (i) the date which is 10 days after Lessee's receipt of Lessor's written notice purporting to terminate this Lease, or (ii) the day prior to the date upon which such option expires. If Lessee duly exercises such option during such period and provides Lessor with funds (or adequate assurance thereof) to cover any shortage in insurance proceeds. Lessor shall, at Lessor's commercially reasonable expense, repair such damage as soon as reasonably possible and this Lease shall continue in full force and effect. If Lessee fails to exercise such option and provide such funds or assurance during such period, then this Lease shall terminate on the date specified in the termination notice and essee's option shall be extinguished. 9. Abatement of Rent; Lessee's Remedies. (a) Abatement. In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition for PAGE 8 OF 18 (D2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION LS FORM STN - 10.6107E which Lessee is not responsible under this Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be abated in proportion to the degree to which Lessee's use of the Premises is impaired, but not to exceed the proceeds received from the Rental Value Insurance. All other obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability for any such damage, destruction, remediation, repair or restoration except as provided herein. (b) Remedies. If Lessor is obligated to repair or restore the Premises and does not commence, in a substantial and meaningful way, such repair or restoration within 90 days after such obligation shall accrue, Lessee may, at any time prior to the commencement of such repair or restoration, give written notice to Lessor and to any Lenders of which Lessee has actual notice, of Lessee's election to terminate this Lease on a date not less than 60 days following the giving of such notice. If Lessee gives such notice and such repair or restoration Is not commenced within 30 days thereafter, this Lease shall terminate as of the date specified in said notice. If the repair or restoration is commenced within such 30 days, this Lease shall continue in full force and effect. "Commence" shall mean either the unconditional authorization of the preparation of the required plans, or the beginning of the actual work on the Premises, whichever first occurs. 9.7 Termination; Advance Payments. Upon termination of this Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made concerning advance Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so much of Lessee's Security Deposit as has not been, or is not then required to be, used by Lessor. 10. Real Property Taxes. 10.1 Definition. As used herein, the term "Real Property Taxes" shall include any form of assessment; real estate, general, special, ordinary or extraordinary, or rental levy or tax (other than inheritance, personal income or estate taxes); improvement bond; and /or license fee imposed upon or levied against any legal or equitable interest of Lessor in the Premises or the Project, Lessor's right to other income therefrom, and/or Lessor's business of leasing, by any authority having the direct or Indirect power to tax and where the funds are generated with reference to the Building address and where the proceeds so generated are to be applied by the city, county or other local taxing authority of a jurisdiction within which the Premises are located. Real Property Taxes shall also include any tax, fee, levy, assessment or charge, or any increase therein: () imposed by Feasen of events levied or assessed on machinery or equipment provided by Lessor to Lessee pursuant to this Lease. 10.2 Payment of Taxes. In addition to Base Rent, Lessee shall pay to Lessor an amount equal to the Real Property Tax installment due at least 20 days prior to the applicable delinquency date. If any such installment shall cover any period of time prior to or after the expiration or termination of this Lease. Lessee's share of such installment shall be prorated. In the event Lessee incurs a late charge on any Rent payment, Lessor may estimate the current Real Property Taxes, and require that such taxes be paid in advance to Lessor by Lessee monthly in advance with the payment of the Base Rent. Such monthly payments shall be an amount equal to the amount of the estimated installment of taxes divided by the number of months remaining before the month in which said installment becomes delinquent. When the actual amount of the applicable tax bill is known, the amount of such equal monthly advance payments shall be adjusted as required to provide the funds needed to pay the applicable taxes. If the amount collected by Lessor is insufficient to pay such Real Property Taxes when due, Lessee shall pay Lessor, upon demand, such additional sum as Is necessary. Advance payments may be intermingled with other moneys of Lessor and shall not bear interest. In the event of a Breach by Lessee in the performance of its obligations under this Lease, then any such advance payments may be treated by Lessor as an additional Security Deposit. 10.3 Joint Assessment. If the Premises are not separately assessed, Lessee's liability shall be an equitable proportion of the Real Property Taxes for all of the land and Improvements included within the tax parcel assessed, such proportion to be conclusively determined by Lessor from the respective valuations assigned in the assessor's work sheets or such other information as may be reasonably available. 10.4 Personal Property Taxes. Lessee shall pay, prior to delinquency, all taxes assessed against and levied upon Lessee Owned Alterations, Utility Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee. When possible, Lessee shall cause Its Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real property of Lessor. If any of Lessee's said property shall be assessed with Lessor's real property, Lessee shall pay Lessor the taxes attributable to Lessee's property within 10 days after receipt of a written statement setting forth the taxes applicable to Lessee's property. 11. Utilities and Services. Lessee shall pay for all water, gas, heat, light, power, telephone, trash disposal and other utilities and services supplied to the Premises, together with any taxes thereon. If any such services are not separately metered or billed to Lessee, Lessee shall pay a reasonable proportion, to be determined by Lessor, of all charges jointly metered or billed. There shall be no abatement of rent and Lessor shall not be liable in any respect whatsoever for the inadequacy, stoppage, interruption or discontinuance of any utility or service due to riot, strike, labor dispute, breakdown, accident, repair or other cause beyond Lessor's reasonable control or in cooperation with governmental request or directions. 12. Assignment and Subletting. 12.1 Lessor's Consent Required. (a) Lessee shall not voluntarily or by operation of law assign, transfer, mortgage or encumber (collectively, "assign or assignment ") or sublet all or any part of Lessee's Interest in this Lease or in the Premises without Lessor's prior written consent. (b) Unless Lessee is a corporation and Its stock ispublicly traded on a national stock exchange,a change in the control of Lessee shall constitute an assignment requiring consent. The transfer, on a cumulative basis, of 26% 75% or more of the voting control of Lessee shall constitute a change in control for this purpose. (c) The involvement of Lessee or its assets in any transaction, or series of transactions (by way of merger, sale, acquisition, financing, transfer, leveraged buy -out or otherwise), whether or not a formal assignment or hypothecation of this Lease or Lessee's assets occurs, which results or will result in a reduction of the Net Worth of Lessee by an amount greater than 25% of such Net Worth as It was represented at the time of the execution of this Lease or at the time of the most recent assignment to which Lessor has consented, or as it exists immediately prior to said transaction or transactions constituting such reduction, whichever was or is greater, shall be considered an assignment of this Lease to which Lessor may withhold its consent. "Net Worth of Lessee" shall mean the net worth of Lessee (excluding any guarantors) established under generally accepted (d) An assignment or subletting without consent shall, at Lessor's option, be a Default curable after notice per Paragraph 13.1(c), or Breach without the necessity of any notice and grace period. If Lessor elects to treat such unapproved assignment or subletting as a PAGE 9 OF 18 INITIALS I S 02001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STN- 10 -W07E noncurable Breach, Lessor may either: (i) terminate this Lease, or (ii) upon 30 days written notice, increase the monthly Base Rent to 110% of the Base Rent then in effect. Further, in the event of such Breach and rental adjustment, (i) the purchase price of any option to purchase the Premises held by Lessee shall be subject to similar adjustment to 110% of the price previously in effect, and (ii) all fixed and non -fixed rental adjustments scheduled during the remainder of the Lease term shall be increased to 110% of the scheduled adjusted rent. (A) Lessee's Femedy f9F aRy bFBaeh of PaFegmph 42 1 by 1=19860F shall be limited te sempeneateiry damages and/OF AF�junofive felief. f) Lessor may reasonably withhold consent to a proposed assignment or subletting if Lessee is in MOnctary Default at the time consent is requested. (g) Notwithstanding the foregoing, allowing a de minimis portionof the Premises, Ie.20 square feet or less, lobe used by a third party vendor in connection with the installation of a vending machine or payphone shall not constitute a subletting. 12.2 Terms and Conditions Applicable to Assignment and Subletting. (a) Regardless of Lessor's consent, no assignment or subletting shall: (i) be effective without the express written assumption by such assignee or sublessee of the obligations of Lessee under this Lease, (ii) release Lessee of any obligations hereunder, or (iii) alter the primary liability of Lessee for the payment of Rent or for the performance of any other obligations to be performed by Lessee. (b) Lessor may accept Rent or performance of Lessee's obligations from any person other than Lessee pending approval or disapproval of an assignment. Neither a delay in the approval or disapproval of such assignment nor the acceptance of Rent or performance shall constitute a waiver or estoppel of Lessor's right to exercise its remedies for Lessee's Default or Breach. (c) Lessor's consent to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting. (d) In the event of any Default or Breach by Lessee, Lessor may proceed directly against Lessee, any Guaramors or anyone else responsible for the performance of Lessee's obligations under this Lease, including any assignee or sublessee, without first exhausting Lessor's remedies against any other person or entity responsible therefor to Lessor, or any security held by Lessor. (e) Each request for consent to an assignment or subletting shall be in writing, accompanied by information relevant to Lessor's determination as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, including but not limited to the Intended use and /or required modification of the Premises, if any, together with a fee of $500 as consideration for Lessor's considering and processing said request. Lessee agrees to provide Lessor with such other or additional information and /or documentation as may be reasonably requested. (See also Paragraph 36) (f) Any assignee of, or sublessee under, this Lease shall, by reason of accepting such assignment, entering Into such sublease, or entering into possession of the Premises or any portion thereof, be deemed to have assumed and agreed to conform and comply with each and every term, covenant, condition and obligation herein to be observed or performed by Lessee during the term of said assignment or sublease, other than such obligations as are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically consented to in writing. (g) Lessor's consent to any assignment or subletting shall not transfer to the assignee or sublessee any Option granted to the original Lessee by this Lease unless such transfer is specifically consented to by Lessor in writing. (See Paragraph 39.2) 12.3 Additional Terms and Conditions Applicable to Subletting. The following terms and conditions shall apply to any subletting by Lessee of all or any part of the Premises and shall be deemed included in all subleases under this Lease whether or not expressly incorporated therein: (a) Lessee hereby assigns and transfers to Lessor all of Lessee's interest in all Rent payable on any sublease, and Lessor may collect such Rent and apply same toward Lessee's obligations under this Lease; provided, however, that until a Breach shall occur In the performance of Lessee's obligations, Lessee may collect said Rent. In the event that the amount collected by Lessor exceeds Lessee's then outstanding obligations any such excess shall be refunded to Lessee. Lessor shall not, by reason of the foregoing or any assignment of such sublease, nor by reason of the collection of Rent, be deemed liable to the sublessee for any failure of Lessee to perform and comply with any of Lessee's obligations to such sublessee. Lessee hereby irrevocably authorizes and directs any such sublessee, upon receipt of a written notice from Lessor stating that a Breach exists in the performance of Lessee's obligations under this Lease, to pay to Lessor all Rent due and to become due under the sublease. Sublessee shall rely upon any such notice from Lessor and shall pay all Rents to Lessor without any obligation or right to inquire as to whether such Breach exists, notwithstanding any claim from Lessee to the contrary. (b) In the event of a Breach by Lessee, Lessor may, atits option,require sublessee toattom to Lessor, in which event Lessor shall undertake the obligations of the sublessor under such sublease from the time of the exercise of said option to the expiration of such sublease; provided, however, Lessor shall not be liable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for any prior Defaults or Breaches of such sublessor. (c) Any matter requiring the consent of the sublessor under a sublease shall also require the consent of Lessor. (d) No sublessee shall further assign or sublet all or any part of the Premises without Lessor's prior written consent. (e) Lessor shalldeliver a copyof anynotice of Default or Breachby Lessee tothe sublessee,who shall havethe rightto curethe Default of Lessee within the grace period, if any, specified in such notice. The sublessee shall have a right of reimbursement and offset from and against Lessee for any such Defaults cured by the sublessee. 13. Default; Breach; Remedies 13.1 Default; Breach. A "Default" is defined as a failure by the Lessee to comply with or perform any of the terms, covenants, conditions or Rules and Regulations under this Lease. A "Breach" is defined as the occurrence of one or more of the following Defaults, and the failure of Lessee to cure such Default within any applicable grace period: (a) The abandonment of the Premises; or the vacating of the Premises without providing a commercially reasonable level of security, or where the coverage of the property insurance described in Paragraph 8.3 is jeopardized as a result thereof, or without providing reasonable assurances to minimize potential vandalism. (b) The failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lessee hereunder, whether to Lessor or to a third party, when due, to provide reasonable evidence of insurance or surety bond, or to fulfill any obligation under this Lease which endangers r threatens life or property, where such failure continues for a period of 5 S business days following written notice to Lessee. THE ACCEP E BY LESSOR OF A PARTIAL PAYMENT OF RENT OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY OF LES R' IGHTS, INCLUDING LESSOR'S RIGHT TO RECOVER POSSESSION OF THE PREMISES. (c) The failure of Lessee to allow Lessor and/or its agents access to the Premises or the commission of waste, act or acts PAGE 10 OF 18 INITIALS Jo ®2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STN- 10 -6107E constituting public or private nuisance, and/or an illegal activity on the Premises by Lessee, where such actions continue for a period of 55 3 business days following written notice to Lessee. (d) The failure by Lessee to provide , (11) the servise Gentrasis (III) the rescission of an unauthorized assignment or subletting, (iv) an Estoppel Certificate or financial statements, (v) a requested subordination, (vi) evidence concerning any guaranty and/or Guarantor, (vii) any document requested under Paragraph 42, (viii) material safety data sheets (MSDS), or (ix) any other documentation or information which Lessor may reasonably require of Lessee under the terms of this Lease, where any such failure continues for a period of 10 days following written notice to Lessee. (e) A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 40 hereof, other than those described in subparagraphs 13.1(a), (b), (c) or (d), above, where such Default continues for a period of 30 days after written notice; provided, however, that If the nature of Lessee's Default Is such that more than 30 days are reasonably required for its cure, then it shall not be deemed to be a Breach if Lessee commences such cure within said 30 day period and thereafter diligently prosecutes such cure to completion. (f) The occurrence of any of the following events: (i) the making ofany general arrangement or assignment forthe benefit of creditors; (it) becoming a "debtor" as defined in 11 U.S.C. §101 or any successor statute thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within 60 days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, where possession is not restored to Lessee within 30 days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, where such seizure is not discharged within 30 days; provided, however, in the event that any provision of this subparagraph is contrary to any applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining provisions. (g) The discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially false. (h) If the performance of Lessee's obligationsunder this Lease is guaranteed: (i) the death of a Guarantor, (it) the termination of a Guarantor's liability with respect to this Lease other than in accordance with the terms of such guaranty, (lit) a Guarantor's becoming insolvent or the subject of a bankruptcy filing, (iv) a Guarantor's refusal to honor the guaranty, or (v) a Guarantor's breach of its guaranty obligation on an anticipatory basis, and Lessee's failure, within 60 days following written notice of any such event, to provide written alternative assurance or security, which, when coupled with the then existing resources of Lessee, equals or exceeds the combined financial resources of Lessee and the Guarantors that existed at the time of execution of this Lease. 13.2 Remedies. If Lessee fails to perform any of its affirmative duties or obligations, within 10 days after written notice (or in case of an emergency, without notice), Lessor may, at its option, perform such duty or obligation on Lessee's behalf, Including but not limited to the obtaining of reasonably required bonds, . insurance policies, or governmental licenses, permits or approvals. Lessee shall pay to Lessor an amount equal to 115% of the rea5Onable costs and expenses incurred by Lessor in such performance upon receipt of an invoice therefor. In the event of a Breach, Lessor may, with or without further notice or demand, and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such Breach: (a) Terminate Lessee's right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession to Lessor. In such event Lessor shall be entitled to recover from Lessee: (I) the unpaid Rent which had been earned at the time of termination; (it) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avoided; (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 the Lessee proves could be reasonably avoided; and (iv) any other amount necessary to compensate Lessor for all the detriment proximately caused by the Lessee's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, including but not limited to the cost of recovering possession of the Premises, expenses of reletting, including necessary renovation and alteration of the Premises, reasonable attorneys' fees, and that portion of any leasing commission paid by Lessor in connection with this Lease applicable to the unexpired term of this Lease. The worth at the time of award of the amount referred to in provision (iii) of the immediately preceding sentence shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located at the time of award plus one percent. Efforts by Lessor to mitigate damages caused by Lessee's Breach of this Lease shall not waive Lessor's right to recover damages under Paragraph 12. If termination of this Lease is obtained through the provisional remedy of unlawful detainer. Lessor shall have the right to recover in such proceeding any unpaid Rent and damages as are recoverable therein, or Lessor may reserve the right to recover all or any part thereof in a separate suit. If a notice and grace period required under Paragraph 13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful detainer statute shall also constitute the notice required by Paragraph 13.1. In such case, the applicable grace period required by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and the failure of Lessee to cure the Default within the greater of the two such grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling Lessor to the remedies provided for in this Lease and /or by said statute. (b) Continue the Lease and Lessee's right to possession and recover the Rent as it becomes due, in which event Lessee may sublet or assign, subject only to reasonable limitations. Acts of maintenance, efforts to relet, and /or the appointment of a receiver to protect the Lessor's interests, shall not constitute a termination of the Lessee's right to possession. (c) Pursue any other remedy now or hereafter available under the laws or judicial decisions of the state wherein the Premises are located. The expiration or termination of this Lease and /or the termination of Lessee's right to possession shall not relieve Lessee from liability under any indemnity provisions of this Lease as to matters occurring or accruing during the term hereof or by reason of Lessee's occupancy of the Premises. 13.3 Inducement Recapture. Any agreement for free or abated rent or other charges, or for the giving or paying by Lessor to or for Lessee of any cash or other bonus, inducement or consideration for Lessee's entering into this Lease, all of which concessions are hereinafter referred to as "Inducement Provisions," shall be deemed conditioned upon Lessee's full and faithful performance of all of the terms, covenants and conditions of this Lease. Upon Breach of this Lease by Lessee, any such Inducement Provision shall automatically be deemed deleted from this Lease and of no further force or effect, and any rent, other charge, bonus, inducement or consideration theretofore abated, given or paid by Lessor under such an inducement rovision shall be immediately due and payable by Lessee to Lessor, notwithstanding any subsequent cure of said Breach by Lessee. The acceptancl(byt sor of rent or the cure of the Breach which initiated the operation of this paragraph shall not be deemed a waiver by Lessor of the provlsio r paragraph unless specifically so stated in writing by Lessor at the time of such acceptance. 1 Late Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to inrwr costs not PAGE 11 OF 18 @2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION / / FORM STN - 10.0107E contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent shall not be received by Lessor within 5 days after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall immediately pay to Lessor a one -time late charge equal to 10% of each such overdue amount or $100, whichever is greater. The Parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of such late payment. Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee's Default or Breach with respect to such overdue amount, nor prevent the exercise of any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collected, for 3 consecutive installments of Base Rent, then notwithstanding any provision of this Lease to the contrary, Base Rent shall, at Lessor's option, become due and payable quarterly in advance. 13.5 Interest. Any monetary payment due Lessor hereunder, other than late charges, not received by Lessor, when due as to scheduled payments (such as Base Rent) or within 30 days following the date on which it was due for non - scheduled payment, shall bear Interest from the date when due, as to scheduled payments, or the 31st day after It was due as to non - scheduled payments. The interest ( "Interest ") charged shall be computed at the rate of 10% per annum but shall not exceed the maximum rate allowed by law. Interest is payable in addition to the potential late charge provided for in Paragraph 13.4. 13.6 Breach by Lessor. (a) Notice of Breach. Lessor shall not be deemed in breach of this Lease unless Lessor fails within a reasonable tlme.to perform an obligation required to be performed by Lessor. For purposes of this Paragraph, a reasonable time shall in no event be less than 30 days after receipt by Lessor, and any Lender whose name and address shall have been furnished Lessee in writing for such purpose, of written notice specifying wherein such obligation of Lessor has not been performed; provided, however, that if the nature of Lassoes obligation is such that more than 30 days are reasonably required for its performance, then Lessor shall not be in breach If performance is commenced within such 30 day period and thereafter diligently pursued to completion. (b) Performance by Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender cures said breach within 30 days after receipt of said notice, or if having commenced said cure they do not diligently pursue it to completion, then Lessee may elect to cure said breach at Lessee's expense and offset from Rent the actual and reasonable cost to perform such cure, provided, however, that such offset shall not exceed an amount equal to the greater of one month's Base Rent or the Security Deposit, reserving Lessee's right to seek reimbursement from Lessor for any such expense in excess of such offset. Lessee shall document the cost of said cure and supply said documentation to Lessor. 14. Condemnation. If the Premises or any portion thereof are taken under the power of eminent domain or sold under the threat of the exercise of said power (collectively "Condemnation "), this Lease shall terminate as to the part taken as of the date the condemning authority takes title or possession, whichever first occurs. If more than 10% of the Building, or more than 25% of that portion of the Premises not occupied by any building, Is taken by Condemnation, Lessee may, at Lessee's option, to be exercised in writing within 10 days after Lessor shall have given Lessee written notice of such taking (or in the absence of such notice, within 10 days after the condemning authority shall have taken possession) terminate this Lease as of the date the condemning authority takes such possession. If Lessee does not terminate this Lease in accordance with the foregoing, this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the Base Rent shall be reduced in proportion to the reduction in utility of the Premises caused by such Condemnation. Condemnation awards and /or payments shall be the property of Lessor, whether such award shall be made as compensation for diminution in value of the leasehold, the value of the part taken, or for severance damages; provided, however, that Lessee shall be entitled to any compensation paid by the condemnor for Lessee's relocation expenses, loss of business goodwill and/or Trade Fixtures, without regard to whether or not this Lease is terminated pursuant to the provisions of this Paragraph. All Alterations and Utility Installations made to the Premises by Lessee, for purposes of Condemnation only, shall be considered the property of the Lessee and Lessee shall be entitled to any and all compensation which is payable therefor. In the event that this Lease is not terminated by reason of the Condemnation, Lessor shall repair any damage to the Premises caused by such Condemnation. 15. Brokerage Fees. 15.1 Additional Commission. In addition to the payments owed pursuant to Paragraph 1.9 above, and unless Lessor and the Brokers otherwise agree in writing, Lessor agrees that: (a) If Lessee exercises any Option, (b) if Lessee or anyone affiliated with Lessee acquires any rights to the Premises or other premises owned by Lessor and located within the same Project, if any, within which the Premises is located, (c) if Lessee remains in possession of the Premises, with the consent of Lessor, after the expiration of this Lease, or (d) if Base Rent is increased, whether by agreement or operation of an escalation clause herein, then, Lessor shall pay Brokers a fee in accordance with the schedule of the Brokers in effect at the time of the execution of this Lease. 15.2 Assumption of Obligations. Any buyer or transferee of Lessor's interest in this Lease shall be deemed to have assumed Lessor's obligation hereunder. Brokers shall be third party beneficiaries of the provisions of Paragraphs 1.9, 15, 22 and 31. If Lessor fails to pay to Brokers any amounts due as and for brokerage fees pertaining to this Lease when due, then such amounts shall accrue Interest. In addition, If Lessor fails to pay any amounts to Lessee's Broker when due, Lessee's Broker may send written notice to Lessor and Lessee of such failure and if Lessor fails to pay such amounts within 10 days after said notice, Lessee shall pay said monies to its Broker and offset such amounts against Rent. In addition, Lessee's Broker shall be deemed to be a third party beneficiary of any commission agreement entered into by and/or between Lessor and Lessor's Broker for the limited purpose of collecting any brokerage fee owed. 15.3 Representations and Indemnities of Broker Relationships. Lessee and Lessor each represent and warrant to the other that it has had no dealings with any person, firm, broker or finder (other than the Brokers, if any) in connection with this Lease, and that no one other than said named Brokers is entitled to any commission or finder's fee in connection herewith. Lessee and Lessor do each hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of the Indemnifying Party, including any costs, expenses, attorneys' fees reasonably incurred with respect thereto artificates. Each Party (as "Responding Party ") shall within 10 days after written notice from the other Party (the "Requesting Party ") and deliver to the Requesting Party a statement in writing In form similar to the then most current "Estoppel Certificate" form PAGE 12 OF 18 02001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION IALS FORM N- 10 -8 /07E published by the AIR Commercial Real Estate Association, plus such additional information, confirmation and/or statements as may be reasonably requested by the Requesting Party. (b) If the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 10 day period, the Requesting Parry may execute an Estoppel Certificate stating that: (1) the Lease is in full force and effect without modification except as may be represented by the Requesting Party, (ti) there are no uncured defaults in the Requesting Party's performance, and (iii) if Lessor is the Requesting Party, not more then one month's rent has been paid in advance. Prospective purchasers and encumbrancers may rely upon the Requesting Party's Estoppel Certificate, and the Responding Party shall be estopped from denying the truth of the facts contained in said Certificate. (c) If Lessor desires to finance, refinance, or sell the Premises, orany part thereof, Lessee and all Guarantors shall within 10 days after written notice from Lessor deliver to any potential lender or purchaser designated by Lessor such financial statements as may be reasonably required by such lender or purchaser, including but not limited to Lessee's financial statements for the past 3 years. All such financial statements shall be received by Lessor and such lender or purchaser In confidence and shall be used only for the purposes herein set forth. 17. Definition of Lessor. The term "Lessor" as used herein shall mean the owner or owners at the time in question of the fee tide to the Premises, or, if this is a sublease, of the Lessee's interest in the prior lease. In the event of a transfer of Lessor's title or interest in the Premises or this Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit) any unused Security Deposit held by Lessor. Upon such transfer or assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor shall be relieved of all liability with respect to the obligations and/or covenants under this Lease thereafter to be performed by the Lessor. Subject to the foregoing, the obligations and /or covenants in this Lease to be performed by the Lessor shall be binding only upon the Lessor as hereinabove defined. 18. Severability. The invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, shall in no way affect the validity of any other provision hereof. 19. Days. Unless otherwise speclfically indicated to the contrary, the word "days" as used in this Lease shall mean and refer to calendar days. 20. Limitation on Liability. The obligations of Lessor under this Lease shall not constitute personal obligations of Lessor or its partners, members, directors, officers or shareholders, and Lessee shall look to the Premises, and to no other assets of Lessor, for the satisfaction of any liability of Lessor with respect to this Lease, and shall not seek recourse against Lessor's partners, members, directors, officers or shareholders, or any of their personal assets for such satisfaction. 21. Time of Essence. Time is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under this Lease. 22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective.. Lessor and Lessee each represents and warrants to the Brokers that It has made, and is relying solely upon, its own investigation as to the nature, quality, character and financial responsibility of the other Parry to this Lease and as to the use, nature, quality and character of the Premises. Brokers have no responsibility with respect thereto or with respect to any default or breach hereof by either Party. 23. Notices. 23.1 Notice Requirements. All notices required or permitted by this Lease or applicable law shall be in writing and may be delivered in person (by hand or by courier) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile transmission, and shall be deemed sufficiently given if served in a manner specified in this Paragraph 23. The addresses noted adjacent to a Parry's signature on this Lease shall be that Party's address for delivery or mailing of notices. Either Party may by written notice to the other specify a different address for notice, except that upon Lessee's taking possession of the Premises, the Premises shall constitute Lessee's address for notice. A copy of all notices to Lessor shall be concumendy transmitted to such party or parties at such addresses as Lessor may from time to time hereafter designate in writing. 23.2 Date of Notice. Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of delivery shown on the receipt card, or if no delivery date is shown, the postmark thereon. If sent by regular mail the notice shall be deemed given 72 hours after the same is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed given 24 hours after delivery of the same to the Postal Service or courier. Notices transmitted by facsimile transmission or similar means shall be deemed delivered upon telephone confirmation of receipt (confirmation report from fax machine is sufficient), provided a copy is also delivered via delivery or mail. If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day. 24. Waivers. (a) No waiver by either party LesseFof the Default or Breach of any term, covenant or condition hereof by the other party I RRgee, shall be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Default or Breach by the other party Lessee of the same or of any other term, covenant or condition hereof. Either party Lessers consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of ouch party's Lessees consent to, or approval of, any subsequent or similar act by the Other party Lessee, or be construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent. (b) The acceptance of Rent by Lessor or payment of rent by Leooee shall not be a waiver of any Default or Breach by essee. Any payment by Lessee may be accepted by Lessor on account of moneys or damages due Lessor, notwithstanding any or conditions made by Lessee in connection therewith, which such statements and/or conditions shall be of no force or effect ecifically agreed to in writing by Lessor at or before the time of deposit of such payment. :) THE PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS PAGE 13 OF 18 02001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION I S FORM STN- 10 -W07E RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH STATUTE IS INCONSISTENT WITH THIS LEASE. 25. Disclosures Regarding The Nature of a Real Estate Agency Relationship. (a) When entering into a discussion with a real estate agent regarding a real estate transaction, a Lessor or Lessee should from the outset understand what type of agency relationship or representation it has with the agent or agents in the transaction. Lessor and Lessee acknowledge being advised by the Brokers in this transaction, as follows: (i) Lessor's Agent. A Lessor's agent under a listing agreement with the Lessor acts as the agent for the Lessor only. A Lessor's agent or subagent has the following affirmative obligations: To the Lessor: A fiduciary duty of utmost care, integrity, honesty, and loyalty In dealings with the Lessor. To the Lessee and the Lessor a. Diligent exercise of reasonable skills and care in performance of the agents duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential Information obtained from the other Party which does not involve the affirmative duties set forth above. (if) Lessee's Agent. An agent can agree to act as agent for the Lessee only. In these situations, the agent is not the Lessor's agent, even if by agreement the agent may receive compensation for services rendered, either in full or in part from the Lessor. An agent acting only for a Lessee has the following affirmative obligations. To the Lessee: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Lessee. To the Lessee and the Lessor a. Diligent exercise of reasonable skills and care in performance of the agents duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the Parties. An agent Is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above. (iii) Agent Representing Both Lessor and Lessee, A real estate agent, either acting directly or through one or more associate licenses, can legally be the agent of both the Lessor and the Lessee in a transaction, but only with the knowledge and consent of both the Lessor and the Lessee. In a dual agency situation, the agent has the following affirmative obligations to both the Lessor and the Lessee: a. A fiduciary duty of utmost pre, Integrity, honesty and loyalty in the dealings with either Lessor or the Lessee. b. Other duties to the Lessor and the Lessee as stated above in subparagraphs (i) or (it). In representing both Lessor and Lessee, the agent may not without the express permission of the respective Party, disclose to the other Party that the Lessor will accept rent in an amount less than that indicated in the listing or that the Lessee Is willing to pay a higher rent than that offered. The above duties of the agent in a real estate transaction do not relieve a Lessor or Lessee from the responsibility to protect their own interests. Lessor and Lessee should carefully read all agreements to assure that they adequately express their understanding of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult a competent professional. (b) Brokers have no responsibility with respect to any default or breach hereof by either Party. The Parties agree that no lawsuit or other legal prooeeding involving any breach of duty, error or omission relating to this Lease may be brought against Broker more than one year after the Start Date and that the liability (including court costs and attorneys' fees), of any Broker with respect to any such lawsuit and/or legal proceeding shall not exceed the fee received by such Broker pursuant to this Lease; provided, however, that the foregoing limitation on each Broker's liability shall not be applicable to any gross negligence or willful misconduct of such Broker. (c) Lessor and Lessee agree to identify to Brokers as "Confidential" any communication or information given Brokers that is considered by such Party to be confidential. 26. No Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination of this Lease. In the event that Lessee holds over, then the Base Rent shall be increased to 150% of the Base Rent applicable immediately preceding the expiration or termination. Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee. 27. Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity. 28. Covenants and Conditions; Construction of Agreement. All provisions of this Lease to be observed or performed by the parties Lessee are both covenants and conditions. In construing this Lease, all headings and titles are for the convenience of the Parties only and shall not be considered a part of this Lease. Whenever required by the context, the singular shall include the plural and vice versa. This Lease shall not be construed as if prepared by one of the Parties, but rather according to Its fair meaning as a whole, as if both Parties had prepared it. (see Addendum Paragraph 57 - Rider to Paragraph 28) 29. Binding Effect; Choice of Law. This Lease shall be binding upon the Parties, their personal representatives, successors and assigns and be governed by the laws of the State in which the Premises are located. Any litigation between the Parties hereto concerning this Lease shall be initiated in the county in which the Premises are located. 30. Subordination; Attornment; Non - Disturbance. 30.1 Subordination. This Lease and any Option granted hereby shall be subject and subordinate to any ground lease, mortgage, deed of trust, or other hypothecation or security device (collectively, "Security Device "), now or hereafter placed upon the Premises, to any and all advances made on the security thereof, and to all renewals, modifications, and extensions thereof. Lessee agrees that the holders of any such Security Devices (in this Lease together referred tows "Lender ") shall have no Ilablllty or obligation to perform any of the obligations of Lessor under this Lease. Any Lender may elect to have this Lease and/or any Option granted hereby superior to the lien of its Security Device by giving written notice thereof to Lessee, whereupon this Lease and such Options shall be deemed prior to such Security Device, notwlthstanding the relative dates of the documentation or recordation thereof. 30.2 Attomment. In the event that Lessor transfers title to the Premises, or the Premises are acquired by another upon the foreclosure or )e�ation of a Security Devise to which this Lease is subordinated (i) Lessee shall, subject to the non - disturbance provisions of Paragraph 30.3, =_Sid` t such new owner, and upon request, enter into a new lease, containing all of the terms and provisions of this Lease, with such new owner for PAGE 14 OF 18 ®2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION LS FORM STN- 10 -6/07E the remainder of the tens hereof, or, at the election of the new owner, this Lease will automatically become a new lease between Lessee and such new owner, and (ip Lessor shall thereafter be relieved of any further obligations hereunder and such new owner shall assume all of Lessor's obligations, except that such new owner shall not: (a) be liable for any act or omission of any prior lessor or with respect to events occurring prior to acquisition of ownership; (b) be subject to any offsets or defenses which Lessee might have against any prior lessor, (c) be bound by prepayment of more than one month's rent, or (d) be liable for the return of any security deposit paid to any prior lessor which was not paid or credited to such new owner. 30.3 Non- Disturbance. With respect to Security Devices entered into by Lessor after the execution of this Lease, Lessee's subordination of this Lease shall be subject to receiving a commercially reasonable non -disturbance agreement (a "Non - Disturbance Agreement ") from the Lender which Non - Disturbance Agreement provides that Lessee's possession of the Premises, and this Lease, including any options to extend the term hereof, will not be disturbed so long as Lessee is not in Breach hereof and attorns to the record owner of the Premises. Further, within 60 days after the execution of this Lease, Lessor shall, if requested by Lessee, use Its commercially reasonable efforts to obtain a Non - Disturbance Agreement from the holder of any pre- existing Security Device which is secured by the Premises. In the event that Lessor is unable to provide the Non - Disturbance Agreement within said 60 days, then Lessee may, at Lessee's option, directly contact Lender and attempt to negotiate for the execution and delivery of a Non - Disturbance Agreement. 30.4 Self- Executing. The agreements contained in this Paragraph 30 shall be effective without the execution of any further documents; provided, however, that, upon written request from Lessor or a Lender in connection with a sale, financing or refinancing of the Premises, Lessee and Lessor shall execute such further writings as may be reasonably required to separately document any subordination, attornment and/or Non - Disturbance Agreement provided for herein. 31. Attorneys' Fees. If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) In any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The term, "Prevailing Party" shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. The attorneys' fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys' fees reasonably incurred. 32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents shall have the right to enter the Premises at any time, in the case of an emergency, and otherwise at reasonable times during business hours after 24 hours prior reasenableprier notice for the purpose of showing the same to prospective purchasers, lenders, or tenants, written notice of sale and making such alterations, repairs, improvements or additions to the Premises as Lessor may deem necessary or desirable and the erecting, using and maintaining of utilities, services, pipes and conduits through the Premises and/or other premises as long as there is no material adverse effect to Lessee's use of the Premises. All such activities shall be without abatement of rent or liability to Lessee. 33. Auctions. Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises without Lessor's prior written consent. Lessor shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction. 34. Signs. Lessor may place on the Premises ordinary " For Sale" signs at any time and ordinary "For Lease" signs during the last 6 months of the term hereof. Except for ordinary "for sublease" signs, Lessee shall not place any sign upon the Premises without Lessor's prior written consent. All signs must comply with all Applicable Requirements. 35. Termination; Merger. Unless specifically stated otherwise in writing by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease or lesser estate in the Premises; provided, however, that Lessor may elect to continue any one or all existing subtenancies. Lessor's failure within 10 days following any such event to elect to the contrary by written notice to the holder of any such lesser interest, shall constitute Lessor's election to have such event constitute the termination of such interest. 36. Consents. Except as otherwise provided herein, wherever in this Lease the consent of a Party is required to an act by or for the other Party, such consent shall not be unreasonably withheld or delayed. As contemplated in Paragraph 12.2(e), Lessee Shall pay Lessor a fee of $500 as consideration for Lessor's considering and processing Lessee's request for consent to an assignment or subletting pursuant to this Lease. In the event Lessee presents Lessor with a request for Lessor to consent to the presence or use of a Hazardous Substance at the Premises, Lessor's actual reasonable costs and expenses (including but not limited to attorneys' and other consultants' fees) incurred in the consideration of, or response to, such request, shall be, paid by Lessee upon receipt of an invoice and supporting documentation therefor, provided that Lessee shall not be, obligated to pay any such costs or expenses in excess of $500 per request, unless Lessee give Lessor written approval of a higher amount in advance of Lessor incurring such costs or expenses. expenses (Insluding but Aet 16mited to eFek tests', attemeys', engineers' and ethef oengultaRts' fees) inGUFmd In the sensideraten ef, eF Fespense to, a SubstanGe, shall be paid by Lessee upon reeeipt of an inveiae and suppwting daGumentalien . Lessor's consent to any act, assignment or subletting shall not constitute an acknowledgment that no Default or Breach by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or Breach, except as may be otherwise specifically stated in writing by Lessor at the time of such consent. The failure to specify strain any particular condition to Lessors consent shall not preclude the imposition by Lessor at the time of consent of such further or other e nd are then reasonable with reference to the particular matter for which consent is being given. In the event that either Party disagrees with an a ination made by the other hereunder and reasonably requests the reasons for such determination, the determining party shall furnish its PAGE 15 OF 18 02001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION I FORM STN - 10.6107E reasons in writing and in reasonable detail within 10 business days following such request. 37. Guarantor. 37.1 Execution. The Guarantors, if any, shall each execute a guaranty in the form most recently published by the AIR Commercial Real Estate Association, and each such Guarantor shall have the same obligations as Lessee under this Lease. 37.2 Default It shall constitute a Default of the Lessee if any Guarantor fails or refuses, upon request to provide: (a) evidence of the execution of the guaranty, Including the authority of the party signing on Guarantor's behalf to obligate Guarantor, and in the case of a corporate Guarantor, a certified copy of a resolution of its board of directors authorizing the making of such guaranty, (b) current financial statements, (c) an Estoppel Certificate, or (d) written confirmation that the guaranty Is still In effect. 38. Quiet Possession. Subject to payment by Lessee of the Rent and performance of all of the covenants, conditions and provisions on Lessee's part to be observed and performed under this Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the term hereof. 39. Options. If Lessee is granted an Option, as defined below, then the following provisions shall apply: 39.1 Definition. "Option" shall mean: (a) the right to extend or reduce the term of or renew this Lease or to extend or reduce the term of or renew any lease that Lessee has on other property of Lessor; (b) the right of first refusal or first offer to lease either the Premises or other property of Lessor; (c) the right to purchase, the right of first offer to purchase or the right of first refusal to purchase the Premises or other property of Lessor. 39.2 Options Personal To Original Lessee. Any Option granted to Lessee in this Lease is personal to the original Lessee, and cannot be assigned or exercised by anyone other than said original Lessee and only while the original Lessee is in full possession of the Premises and, if requested by Lessor, with Lessee certifying that Lessee has no intention of thereafter assigning or subletting. 39.3 Multiple Options. In the event that Lessee has any multiple Options to extend or renew this Lease, a later Option cannot be exercised unless the prior Options have been validly exercised. 39.4 Effect of Default on Options. (a) Lessee shallhave no right to exercise an Option: (i) during the period commencing withthe giving of any notice of Default and continuing until said Default is cured, (ii) during the period of time any Rent is unpaid (without regard to whether notice thereof is given Lessee), (iii) during the time Lessee is in Breach of this Lease, or (iv) in the event that Lessee has been given 3 or more notices of separate Default, whether or not the Defaults are cured, during the 12 month period immediately preceding the exercise of the Option. (b) The period of time withinwhich an Option may be exercised shall not be extended or enlarged by reason of Lessee's inabilityto exercise an Option because of the provisions of Paragraph 39.4(a).. . (c) An Option shall terminate and be of no further force or effect, notwithstandingLessee's due and timely exercise of the Option, if, after such exercise and prior to the commencement of the extended term or completion of the purchase, (1) Lessee fails to pay Rent for a period of 30 days after such Rent becomes due (without any necessity of Lessor to give notice thereof), or (ii) if Lessee commits a Breach of this Lease. 40. Multiple Buildings. If the Premises are a part of a group of buildings controlled by Lessor, Lessee agrees that it will abide by and conform to all reasonable rules and regulations which Lessor may make from time to time for the management, safety, and care of said properties, including the care and cleanliness of the grounds and including the parking, loading and unloading of vehicles, and to cause its employees, suppliers, shippers, customers, contractors and invitees to so abide and conform. Lessee also agrees to pay its fair share of common expenses incurred in connection with such rules and regulations. 41. Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not Include the cost of guard service or other security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of the Premises, Lessee, its agents and invitees and their property from the acts of third parties. 42. Reservations. Lessor reserves to Itself the right, from time to time, to grant, without the consent or joinder of Lessee, such easements, rights and dedications that Lessor deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights, dedications, maps and restrictions do not unreasonably Interfere with the use of the Premises by Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to effectuate any such easement rights, dedication, map or restrictions. 43. Performance Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the provisions hereof, the Party against whom the obligation to pay the money is asserted shall have the right to make payment "under protest" and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of said Party to institute suit for recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said Party to pay such sum or any part thereof, said Party shall be entitled to recover such sum or so much thereof as it was not legally required to pay. A Party who does not initiate suit for the recovery of sums paid "under protest" with 6 months shall be deemed to have waived its right to protest such payment. 44. Authority; Multiple Parties; Execution. (a) If either Party hereto is a corporation, trust, limited liability company, partnership, or similar entity, each Individual executing this Lease on behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver this Lease on its behalf. Each Parry shall, within 30 days after request, deliver to the other Party satisfactory evidence of such authority. (b) If this Lease is executed by more than one person or entity as "Lessee ", each such person or entity shall be jointly and severally liable hereunder. It Is agreed that any one of the named Lessees shall be empowered to execute any amendment to this Lease, or other thereto and bind all of the named Lessees, and Lessor may rely on the same as if all of the named Lessees had executed such (c) This Lease may be executed by the Parties in counterparts, each of which shall be deemed an original and all of which PAGE 16 OF 16 02001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION 1 S FORM - 10-6107E together shall constitute one and the same instrument. 45. Conflict. Any conflict between the printed provisions of this Lease and typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. 46. Offer. Preparation of this Lease by either Party or their agent and submission of same to the other Party shall not be deemed an offer to lease to the other Parry. This Lease is not intended to be binding until executed and delivered by all Parties hereto. 47. Amendments. This Lease may be modified only in writing, signed by the Parties In Interest at the time of the modification. As long as they do not materially change Lessee's obligations hereunder, Lessee agrees to make such reasonable non - monetary modifications to this Lease as may be reasonably required by a Lender in connection with the obtaining of normal financing or refinancing of the Premises. 48. Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT. 49. Mediation and Arbitration of Disputes. An Addendum requiring the Mediation and /or the Arbitration of all disputes between the Parties and /or Brokers arising out of this Lease 0 is ❑ is not attached to this Lease. 50. Americans with Disabilities Act. Since compliance with the Americans with Disabilities Act (ADA) is dependent upon Lessee's specific use of the Premises, Lessor makes no warranty or representation as to whether or not the Premises comply with ADA or any similar legislation. In the event that Lessee's use of the Premises requires modifications or additions to the Premises in order to be in ADA compliance, Lessee agrees to make any such necessary modifications and /or additions at Lessee's expense. LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES. ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO: 1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. 2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE. WARNING: IF THE PREMISES IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES IS LOCATED. The parties hereto have executed this Lease at the place and on the dates specified above their respective signatures. Executed at: n.. Title: Address: Telephone:(_) Facsimile:(_) Federal ID No. PAGE 17 OF 18 02001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION Executed at: On: By LESSEE: HOM Real Estate Group, a California corporation Name Printed: Title: CEO By: Name Powl—worchael S i Title: Chairman Address: Telephone:(949) 554 -1206 Facsimlle:(949) 554 -1206 Federal ID No. LS J FORM STN - 10.6107E Attn: Oliver Fleener /John Pomer Title: Vice President Address: 4675 MacArthur Court, Suite 1600 Newport Beach, CA 92660 Telephone:(949) 608 -2000 Facsimlle:(949) 608 -2003 Federal ID No. NOTICE: These forms are often modified to meet changing requirements of law and industry needs. Always write or Call to make sure you are utilizing the most current form: AIR Commercial Real Estate Association, 800 W 6th Street, Suite 800, Los Angeles, CA 90017. Telephone No. (213) 687.8777. Fax No.: (213) 687.8616. ® Copyright 2001 - By AIR Commercial Real Estate Association. All rights reserved. No part of these works may be reproduced in any form without permission in writing. s: \winair \Oliver Fleener\3400 Via Lido\HOM RE Group\Lease - HOM RE Group PAGE 18 OF 18 1T ®2001 -AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STN- 10-6/07E ADDENDUM 1 TO STANDARD INDUSTRIALICOMMERCIAL SINGLE - TENANT LEASE - NET DATED JULY 16, 2008 DENNIS AND CHRIS OVERSTREET, INDIVIDUALS ( "LESSOR ") HOM REAL ESTATE GROUP, A CALIFORNIA CORPORATION ( "LESSEE ") Lessor and Lessee agree that notwithstanding anything contained in the Lease to the contrary, the Lease as modified by the provisions set forth in this Addendum No. 1 (the "Addendum ") represents the fully negotiated agreement of the parties, and the provisions of this Addendum will be deemed to be a part of the Lease and will supersede any contrary or conflicting provision in the Lease and prevail and control for all purposes. This Addendum, together with the Lease itself, and all other Exhibits, Riders and Addenda attached thereto represents the fully integrated and binding agreement of the parties. All references in the Lease and in this Addendum to Lease are to be construed to mean the Lease as amended and supplemented by this Addendum. All terms used in this Addendum, unless specifically defined in this Addendum, have the same meaning as such terms have in the Lease. 51. Base Rent Schedule The initial monthly Base Rent on a NNN basis for the Premises. The Base Rent shall consist of $10,004.67 per month for the first twelve (12) months of the lease. The Base Rent shall be increased per annum thereafter by applying the national consumer price index with a minimum of three (3 %) percent and a maximum of six (6 %) percent increase. In addition to the Base Rent, Lessee will be responsible for its portion (as noted in section 1.6 (d) of the lease) of the CAM bill, which includes Taxes and Insurance. Lessor will provide true and accurate accounting of the calculation of the CAM bill, including copies of tax bills, insurance invoices and other back -up documentation to support the amounts calculated and invoiced to Lessee upon reasonable request. Lessor is responsible for the building maintenance, including the common area. Lessee is responsible for any interior lighting fixtures or light plumbing clogs (caused by tenant), janitorial and cleaning. In addition, Lessor is responsible for water and trash. Lessee is responsible for its own utilities. 52. Lessee Improvements Lessor shall deliver the Premises in "broom- clean" condition and confirm that electrical, plumbing, and HVAC are all in good working order. In addition, this Lease is contingent upon Lessor delivering to Lessee, at Landlord's sole cost and expense, written evidence from the City of Newport Beach, County of Orange, and any other relevant authority that the Premises are zoned for, and permitted to be used as, office space, with both a useable square footage and a parking capacity acceptable to Lessee. Lessee will construct the office area per a mutually agreed upon space plan with Lessor's approval of such space plan not to be unreasonably withheld or delayed. Lessor will contribute a maximum amount of one hundred twenty -five thousand dollars ($125,000) (the "Tenant Improvement Allowance ") towards Lessee improvements, including but not limited to all construction, material, labor, planning, engineering, permitting required by Lessee for the Premises (the "Lessee Improvements") as well as any and all other costs associated with the Lessee Improvements. Lessee shall be financially responsible for any additional costs for Lessee Improvements in excess of the Tenant Improvement Allowance. Any improvements beyond those included in the space plan will require Lessor's prior written consent, which shall not be unreasonably withheld. Lessor shall promptly pay within thirty (30) days all invoices submitted by Lessee for the payment of portions of the costs associated with the Lessee Improvements, up to the maximum of the Tenant Improvement Allowance. In the event the cost of the Lessee Improvements is less than the allotted Tenant Improvement Allowance noted above, then Lessee's rent shall be reduced accordingly throughout term of this Lease to credit Lessee the difference between the full amount of the Tenant Improvement Allowance and the actual cost of the Lessee Improvements. 53. Security Deposit Burn -Off Concurrently with Tenant's delivery of this Lease, Tenant shall deposit with Landlord the sum as noted in paragraph 1.6(b). Notwithstanding the foregoing, provided Tenant has not been in default hereunder, Landlord shall reduce the Security Deposit, and credit such reduction against the rent due hereunder, in the amount of $10,613.95 as of the first day of the thirty -sixth (36h) Lease month, $10,932.37 as of the first day of the forty -eight (48") Lease month, and $11,260.34 as of the first day of the sixtieth (60m) Lease month. At the time of the above stated Security Deposit Burn -Off month, should base rent increases be above the minimum increase (as noted in paragraph 51 of the Addendum), then Lessee shall be responsible for any additional rent due on the first day of the above - stated months. 54. Arbitration of Certain Disputes I xcept as provided in Section B below, all claims or disputes between Lessor and t of, or relating to, the interpretation, performance or Breach of this Lease or the return Reserve including any claim based on contract, tort or statute shall be decided by th lk JAMS /ENDISPLITE ( "JAMS "), or its successor, with such arbitration to be held in Orange County, California, unless the parties mutually agree otherwise. Any demand for arbitration must be made to the other party and to JAMS. No demand for arbitration may be made after the date on which the institution of legal proceedings based on the claim or dispute is barred by the applicable statute of limitations. Within ten (10) business days following submission to JAMS, JAMS shall designate three arbitrators and each party may, within five (5) business days thereafter, veto one of the three persons so designated. If two different designated arbitrators have been vetoed, the third arbitrator shall hear and decide the matter. If less than two (2) arbitrators are timely vetoed, JAMS shall select a single arbitrator from the non - vetoed arbitrators originally designated by JAMS, who shall hear and decide the matter. Any arbitrator proposed shall be a licensed attorney or retired judge with not less than ten (10) years experience in commercial leasing litigation. B. The provision of this Section shall not apply to: (i) Any unlawful detainer action instituted by Lessor as the result of a Breach or alleged Breach by Lessee pursuant to this Lease. (ii) Any specific controversy, dispute, question or issue as to which this Lease specifically provides another method of determining such controversy, dispute, question or issue and provides that a determination pursuant to such method is final and binding, unless both Lessor and Lessee agree in writing to waive such procedure and proceed instead pursuant to this Section. (iii) Any request or application for an order or decree granting any provisional or ancillary remedy (such as a temporary restraining order or injunction) with respect to any right or obligation of either party to this Lease, and any preliminary determination of the underlying controversy, dispute, question or issue as is required to determine whether or not to grant the relief requested or applied for. A final and binding determination of such underlying controversy, dispute, question or issue shall be made by an arbitration conducted pursuant to this Section after an appropriate transfer or reference to JDR upon motion or application of either party hereto. Any ancillary or provisional relief which is granted pursuant to this clause (iii) shall continue in effect pending an arbitration determination and entry of judgment thereon pursuant to this Section. (iv) Exercise of any remedies to enforce any judgment entered based upon a determination made by arbitration pursuant to this Section. C. The arbitration shall be conducted in accordance with the following: (i) There shall be a pre - hearing conference prior to the arbitration hearing. (ii) There shall be no mediation or settlement conferences unless all parties agree thereto in writing. (iii) Discovery shall be in accordance with the Code of Civil Procedure Sections 1283.05 and 1283.1 except that either party may take depositions without the arbitrator's consent. All discovery disputes shall be resolved by the arbitrator. (iv) All motions shall be in letter form and hearings thereon shall be by conference telephone calls. (v) Hearings shall require only twenty (20) days prior written notice. (vi) All notices in connection with any arbitration may be served in any manner permitted by the Lease. (vii) The arbitrator shall award to the prevailing party such party's reasonable expenses incurred in such proceeding, including fees and costs paid or payable to JAMS. (viii) As soon as practicable after selection of the arbitrator, the arbitrator shall determine a reasonable estimate of anticipated fees and costs of the arbitration and shall deliver a statement to each party setting forth that party's pro rata share of such fees and costs. Each party shall deposit its pro rata share of such fees and costs with the arbitrator within ten (10) days after receipt of such statement. If either party fails to make a required deposit hereunder, the other party may make such deposit and the amount of such deposit, plus interest thereon at the legal rate from date of deposit to date of repayment, shall be awarded to the prevailing party. (ix) The arbitrator shall have the power to grant legal and equitable remedies, and ird damages, that maybe granted or awarded by a judge of the Superior Court of California. arbitrators shall prepare and provide to the parties a written decision on all matters subject to arbitration, including findings of fact and the reasons that form the basis of the arbitrator's ision. The award of the arbitrator shall be mailed to the parties no later than fifteen (15) days r the close of the arbitration hearing. 4 IPh. 1■ (x) The award rendered by the arbitrator shall be final and not appealable, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. Except by written consent of the person or entity sought to be joined, no arbitration shall include, by consolidation, joinder or in any other manner, any person or entity not a party to the Lease unless (1) such person or entity is substantially involved in a common question of fact or law, (2) the presence of such person or entity is required if complete relief is to be accorded in the arbitration, or (3) the interest or responsibility of such person or entity in the matter is not insubstantial. D. The agreement herein among the parties to arbitrate shall be specifically enforceable under prevailing law. Subject to the limitations of Subparagraph B, the agreement to arbitrate hereunder shall apply only to disputes arising out of, or relating to, this Lease, and shall not apply to the exercise of remedies to enforce any award orjudgment made by an arbitrator pursuant to this paragraph. 55. Payment of Funds Upon Execution The amounted noted in paragraph 1.6(e) shall be paid per the following: one -third (1/3) ($18,329.54) upon Lease execution, and the remainder ($36,659.09) upon release of any Tenant Improvement Allowance funds or permits, whichever is sooner. 56. Option to Renew Lessee shall have the option to renew the lease for two (2) additional terms of five (5) years (the "Option Term "), provided Lessee is not in material or monetary default (subject to notice and cure periods) and upon first giving Lessor not more than twelve (12) months and not less than six (6) months prior written notice before the expiration of the Term. For the First Option Term of five (5) years (the "First Option Term "), the base rent applicable during the first month of the First Option Term shall be increased by applying the national consumer price index, with a minimum of three (3 %) percent and a maximum of six (6 %) percent, to the last month's base rent of the original term, after all prior increases have been applied. The Base Rent shall then be increased per annum thereafter by applying the national consumer price index with a minimum of three (3 %) percent and a maximum of six (6 %) percent increase for the remainder of the First Option Term. For the Second Option Term of five (5) years (the "Second Option Term') to renew, the base rent applicable during the first month of the Second Option Term shall be based on the "Fair Market Rental Rate ". The term "fair market rental rate" as used in the Lease and any Rider /Addendum attached thereto shall mean the annual amount per square foot, projected during the Second Option Term, that a willing, non -equity renewal Lessee (excluding sublease and assignment transactions) would pay, and a willing, institutional Lessor of a comparable quality office building located in the Newport Beach Coastal area of California (the "Comparison Area ") would accept, in an arm's length transaction (what Lessor is accepting in then current transactions for the buildings located in the Project may be used for purposes of projecting rent for the Option Term), for space of comparable size, quality and floor height as the Premises, taking into account the age, quality and layout of the existing improvements in the Premises, and taking into account items that professional real estate brokers or professional real estate appraisers customarily consider, including, but not limited to, rental rates, space availability, Lessee size, Lessee improvement allowances, parking charges and any other lease considerations, if any, then being charged or granted by Lessor or the lessors of such similar office buildings. All economic terms other than Monthly Basic Rent, such as Lessee improvement allowance amounts, if any, operating expense allowances, parking charges, etc., will be established by Lessor and will be factored into the determination of the fair market rental rate for the Option Term. Accordingly, the fair market rental rate will be an effective rate, not specifically including, but accounting for, the appropriate economic considerations described above. In the event where a determination of fair market rental rate is required under the Lease, Lessor shall provide written notice of Lessor's determination of the fair market rental rate not later than ninety (90) days after the last day upon which Lessee may timely exercise the right giving rise to the necessity for such fair market rental rate determination. Lessee shall have ten (10) business days ( "Lessee's Review Period ") after receipt of Lessor's notice of the fair market rental rate within which to accept such fair market rental rate or to reasonably object thereto in writing. Failure of Lessee to so object to the fair market rental rate submitted by Lessor in writing within Lessee's Review Period shall conclusively be deemed Lessee's approval and acceptance thereof. If within Lessee's Review Period Lessee reasonably objects to or is deemed to have disapproved the fair market rental rate submitted by Lessor, Lessor and Lessee will meet together with their respective legal counsel to present and discuss their individual determinations of the fair market rental rate for the Premises under the parameters set forth in Paragraph 1 above and shall diligently and in good faith attempt to negotiate a rental rate on the basis of such individual determinations. Such meeting shall occur no later than ten (10) days after the expiration of Lessee's Review Period. The parties shall each provide the other with such supporting information and documentation as they deem appropriate. At such meeting if Lessor and Lessee are unable to agree upon the fair market rental rate, they shall each submit to the other their respective best and final offer as to the fair market rental rate. If Lessor and Lessee fail to reach agreement on such fair market rental rate within f (5) business days following such a meeting (the "Outside Agreement Date "), Lessee's Exten o ption will be deemed null and void unless Lessee demands appraisal, in which event each T nation shall be submitted to appraisal in accordance with the provisions below. /1", (a) Lessor and Lessee shall each appoint one (1) independent appraiser who shall by profession be an M.A.I. certified real estate appraiser who shall have been active over the five (5) year period ending on the date of such appointment in the leasing of commercial (including office) properties in the Comparison Area. The determination of the appraisers shall be limited solely to the issue of whether Lessor's or Lessee's last proposed (as of the Outside Agreement Date) best and final fair market rental rate for the Premises is the closest to the actual fair market rental rate for the Premises as determined by the appraisers, taking into account the requirements specified in Section 1 above. Each such appraiser shall be appointed within fifteen (15) days after the Outside Agreement Date. (b) The two (2) appraisers so appointed shall within fifteen (15) days of the date of the appointment of the last appointed appraiser agree upon and appoint a third appraiser who shall be qualified under the same criteria set forth hereinabove for qualification of the initial two (2) appraisers. (c) The three (3) appraisers shall within thirty (30) days of the appointment of the third appraiser reach a decision as to whether the parties shall use Lessor's or Lessee's submitted best and final fair market rental rate, and shall notify Lessor and Lessee thereof. During such thirty (30) day period. Lessor and Lessee may submit to the appraisers such information and documentation to support their respective positions as they shall deem reasonably relevant and Lessor and Lessee may each appear before the appraisers jointly to question and respond to questions from the appraisers. (d) The decision of the majority of the three (3) appraisers shall be binding upon Lessor and Lessee and neither party shall have the right to reject the decision or to undo the exercise of the applicable Option. If either Lessor or Lessee fails to appoint an appraiser within the time period specified in Section 3(a) hereinabove, the appraiser appointed by one of them shall within thirty (30) days following the date on which the party failing to appoint an appraiser could have last appointed such appraiser reach a decision based upon the same procedures as set forth above (i.e., by selecting either Lessor's or Lessee's submitted best and final fair market rental rate), and shall notify Lessor and Lessee thereof, and such appraiser's decision shall be binding upon Lessor and Lessee and neither party shall have the right to reject the decision or to undo the exercise of the applicable Option. (e) If the two (2) appraisers fail to agree upon and timely appoint a third appraiser, either party, upon ten (10) days written notice to the other party, can apply to the Presiding Judge of the Superior Court of Orange County to appoint a third appraiser meeting the qualifications set forth herein. The third appraiser, however, selected, shall be a person who has not previously acted in any capacity for either party. (f) The cost of each party's appraiser shall be the responsibility of the party selecting such appraiser, and the cost of the third appraiser (or arbitration, if necessary) shall be shared equally by Lessor and Lessee. (g) If the process described hereinabove has not resulted in a selection of either Lessor's or Lessee's submitted best and final fair market rental rate by the commencement of the applicable lease term, then the fair market rental rate estimated by Lessor will be used until the appraiser(s) reach a decision, with an appropriate rental credit and other adjustments for any overpayments of Monthly Basic Rent or other amounts if the appraisers select Lessee's submitted best and final estimate of the fair market rental rate. The parties shall enter into an amendment to this Lease confirming the terms of the decision. (h) Lessee shall have ten (10) business days after the date that the final fair market rental rate is ultimately determined using the process described hereinabove to notify Lessor that Lessee is not satisfied with such final fair market rental rate, and thereby cancel Lessee's exercise of the Second Option Term. 57. Riders to Certain Paragraphs The following riders are hereby added to the Paragraphs as indicated: RIDER TO PARAGRAPH 2.3 Lessor represents and warrants to Lessee that as of the date hereof and as of the Start Date, (a) Lessor is the sole fee owner of the Building, the Premises and the Project; (b) there are no encumbrances, liens, agreements, covenants in effect that would materially or unreasonably limit Lessee's rights hereunder: (c) Lessor is unaware of any impending condemnation plans, proposed assessments or other adverse conditions relating to the Premises or the Project, and (d) there are no Hazardous Substances in or about the Building or the Premises. Lessor warrants to Lessee that the roof of the Building shall be weather tight and the Premises and the improvements therein shall comply with all applicable legal requirements on the Start Date of the Lease. In the event that Lessee shall notify Lessor of a non - compliance with the foregoing warranty on or before one (1) year following the Commencement Date, then Lessor shall promptly rectify same at Lessor's sole cost and expense. RIDER TO PARAGRAPH 6.2(d) Notwithstanding anything to the contrary in the Lease, Lessee shall have no liability or responsibility with respect to any Hazardous Substances which: (1) were not caused or permitted by Lessee, its agents, employees, contractors, licensees or invitees; (ii) were the result of violations of any "Hazardous Substances Laws" (as hereinafter defined) relating to the Premises, the Building, or the Project (the Premises, the Building, and the Project shall be collectively referred to herein as the "Property ") which violations existed as of the Commencement Date, or (iii) were present in, on, under or about any part of the Property as of the Commencement Date, or that were brought into, onto, about, or under any part of the Property by anyone other than Lessee or its agents, employees, contractors, licensees or invitees. "Hazardous Substances Laws" shall mean and include all federal, state, and local laws relating to the environment or to Hazardous Substances, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.), each as amended from time to time. RIDER TO PARAGRAPH 6.2(e) Lessor represents and warrants to Lessee that Lessor has complied, and the Property is in compliance as of the date of the Lease, with all Hazardous Substances Laws, and no notice of violation of any Hazardous Substances Law with respect thereto, or any permit, license or other authorization relating thereto has been received, nor is any such notice pending or, to Lessor's knowledge, threatened. No underground or above - ground storage tanks or surface impoundments are located on or under any part of the Property. Except in compliance with Hazardous Substances Laws, neither Lessor, nor any prior owner, operator, tenant or occupant of any part of the Property, has generated, used, treated, spilled, stored, transferred, disposed, released or caused a threatened release in, at, under, into, from, to or on any part of the Property of any Hazardous Substances. Except as disclosed to Lessee, Lessor has not received any notice or claim to the effect that either Lessor or any part of the Property is or may be liable to any governmental authority or private party as a result of the release or threatened release of any Hazardous Substances. RIDER TO PARAGRAPH 28 Except for matters which will have an adverse effect on the (a) structural integrity of the Building, (b) the Building plumbing, heating, life safety, ventilating, air conditioning, mechanical or electrical systems, or (c) the exterior appearance of the Building, whereupon in each such case Lessor's duty is to act in good faith and in compliance with the Lease, any time the consent, approval, designation or satisfaction of Lessor or Lessee is required, the same shall not be unreasonably withheld, conditioned or delayed. Whenever the Lease grants Lessor or Lessee the right to take action, exercise discretion, establish rules and regulations or make allocations or other determinations, Lessor and Lessee shall act reasonably and in good faith. M EXHIBIT "A" SPACE PLAN TO STANDARD INDUSTRIALICOMMERCIAL SINGLE - TENANT LEASE - NET DATED JULY 16, 2008 DENNIS AND CHRIS OVERSTREET, INDIVIDUALS ( "LESSOR ") HOM REAL ESTATE GROUP, A CALIFORNIA CORPORATION ( "LESSEE ") (To be provided) 1� 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Alan R. Burns SBN 70328 HARPER & BURNS LLP 453 South Glassell Street Orange, California 92866 Telephone (714) 771 -7728 Facsimile (714) 744 -3350 Attorneys for Newport Beach Planning Commission Cil IN THE MATTER OF THE MODIFICATION OF A CONDITIONAL USE PERMIT CITY OF NEWPORT BEACH In the matter of the Sejour European Bistro and Lounge; FINDINGS OF FACT FOR Overstreets MODIFICATION OF A CONDITIONAL USE PERMIT Having heard the evidence presented by the staff, owner and others, and having fully considered the evidence and the argument of the parties and their counsel, the Commission does hereby find and determine as follows: That the following CUP terms or conditions of approval have been violated or other laws or regulations have been violated: 1. CONDITION 1 The development was not operated in substantial conformance with the approved plot plan, floor plan and elevations dated January 22, 2001. 1 FINDINGS OF FACT FOR MODIFICATION OF A CONDITIONAL USE PERMIT 1 2 3 4 5 6 7 8' 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 This condition was violated on the following occasions as documented by the following: Fenced -off patio across sidewalk • Ex 6 — 4/15/07 Doug Jones memo • Ex 7 — 4/20/07 Supplemental police report DR 07 -03722 • 4/19/07 Follow -up police report • Ex 8 — 4/28/07 Doug Jones memo • Ex 9 — 5/01/07 Admin cite • Ex 14 — 5/26/07 Admin cite Installation of tables. booths • Ex 5 — Floor plan showing Unit Al and A2 • Ex 6 — 4/19/07 Follow -up police report • Ex 14 — 5/26/07 Unit AI bottle service • Ex 15 — 11/13/07 booth with alcohol consumption Al (dancing) ?J� U 2. CONDITION 4 bo7 U Should this business be sold or otherwise come under different ownership, any future owners or assignees shall be notified of the conditions of this approval by either the current business owner, property owner or the leasing agent. Future owners, operators or assignees shall submit, within 30 days of transfer or sale of the business or alcohol license, a letter to the Planning Department acknowledging their receipt and acceptance of the limitations and conditions of approval of this Use Permit. Overstreets submitted declarations that they submitted the use permit to Stockton as part of the sale transaction. (Declaration of Dennis Overstreet) "Sejour LLC in its submittal to the Planning Commission (not signed by anyone) vaguely states it was misinformed about the conditions. The condition was violated in that a letter was never submitted acknowledging receipt and acceptance of the conditions. FINDINGS OF FACT FOR MODIFICATION OF A CONDITIONAL USE PERMIT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4. CONDITION 5 The applicant shall comply with all federal, state, and local laws. This condition was violated on the following occasion as documented by the following: Building Code • Ex 17 — Occ. Exceeded, 11/28/07 NBPD report (120 not 99) ABC requirements • Ex 22 (ABC License) — hours, dancing • Exs 6, 15, 17 — no dancing Blocking sidewalk (NBMC 10.50.020) • Ex 6 — 4/15/07 Jones memo • Ex 14 — 5/26/07 Admin cite 11681 2 citations not appealed • Ex 9 — 5/01/07 Admin cite 0395 • Ex 14 — 5/26/07 Admin cite 11681 t� 5. CONDITION 11 op )_061-63 The sale of distilled spirits for off -site consumption shall not exceed 15% of gross receipts of all off -site alcohol sales. The sale of distilled spirits for on -site consumption shall not exceed 10% of the total sales for on -site consumption of all alcoholic beverages. // 3 FINDINGS OF FACT FOR MODIFICATION OF A CONDITIONAL USE PERMIT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 l8 19 20 21 22 23 24 25 26 27 28 This condition was violated as proven by the following (and there is no evidence that the business was ever in compliance with this condition): • Ex 10 — 5/04/07 Letter from Lepo asking for gross receipts for alcohol sales • Ex 16 — 11/13/07 Request for sales records • Ex 12 — 5/10/07 — Stockton write liquor constitutes 17% of sales • Stocktons (Sejour) contend need different ratios to be able to comply 6. CONDITION 13 up ap0rbt j Approval does not permit the premises to operate as an eating and drinking establishment, restaurant, bar, tavern, cocktail lounge or night club as defined by the Municipal Code, unless the Planning Commission first approves a Use Permit. This condition was proven to have been violated by the following: • Ex 7 — 4/21 /07 NBPD DR 07 -3722 — "full bar" in operation with restaurant menu, bottle service • Ex 14 — 5/26/07 Admin cite — private party • Ex 6 — 4/20/07 Report — full bar open • Ex 15 — 11/09/07 — bouncer at door, bottle service, amplified music; 11/13/07 — nightclub with hard alcohol, music, boLacer, dancing — C---& _ _4, _Q°� � 4 FINDINGS OF FACT FOR MODIFICATION OF A CONDITIONAL USE PERMIT 1 2 3 4 5 6 7 s 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 cl 7. CONDITION 14 p d 00� - P3 The interior area authorized for on -site alcoholic beverage consumption in conjunction with a Type 47 license shall be limited to 1,263 sq. ft. as delineated on the approved floor plans as "Unit A2" with a maximum of 29 seats. The interior area authorized for the retail sales for general alcoholic beverages for off -site consumption shall be limited to 1,328 sq. ft. as delineated on the approved floor plans as "Unit Al" with a maximum of 3 seats. On -site consumption of alcoholic beverages shall be prohibited in Unit Al. Substantial changes to the floor plans shall require prior approval by the Planning Commission. Any increase in area of either Unit Al or Unit A2 shall be deemed substantial for the purposes of requiring review by the Planning Commission. This condition was proven to have been violated by the following memorializations: • Ex 6 — 4/20/07 Supplemental police report • Ex 14 — 5/26/07 Admin cite • Ex 15 — 11/09/07 Police report — drinking in Al, dancing in Al • Ex 17 — 11/28/07 NBPD report — drink orders being taken in Al, 20 -25 people with food /drink 8. CONDITION 15 0 ao61'o 5q Hours of operation shall be from 10:00 a.m. to 11:00 p.m. daily for the retail portion of the project, and 1:00 p.m. to 12:00 midnight Fridays and Saturdays and 1:00 p.m. to 11:00 p.m. Sunday through Thursday for the eating and drinking portion of the project. 5 FINDINGS OF FACT FOR MODIFICATION OF A CONDITIONAL USE PERMIT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 This condition was violated as reported as follows: • Ex 17 — 11/28/07 NBPD report — serving drinks after midnight 9. CONDITION 16 Live entertainment may occur subject to the approval of a Live Entertainment Permit and dancing is prohibited....Management of the business shall make every effort to keep the doors closed during performances. This condition was violated as described in the following reports: • Ex 6 — On 4/19/07 — 4/20/07, NBPD DR 07- 322 observed/heard music from open doors, dancing • Ex 14 — 5/26/07 Admin cite — door open facing Via Oporto, dancing? 10. CONDITION 18 A Special Events Permit is required for any event, promotional activity outside the normal operational characteristics of this retail business that would increase the expected occupancy beyond 29 patrons and 6 employees at any one time or any other activities as specified in the Newport Beach Municipal Code to require such special events permit. // // 6 FINDINGS OF FACT FOR MODIFICATION OF A CONDITIONAL USE PERMIT 1 2 3 4 5 6 7 8 9 to 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 This condition was violated as described in the following reports: • Ex 7 — 4/21/07 — roped off line • 11/09/07 NBPD • 11 /30/07 NBPD 11. CONDITION 23 Loitering, open container, and other signs specified by the Alcoholic Beverage Control Act shall be posted as required by the State Department of ABC. This condition was violated as described n the following report: • Ex 6 — NBPD — no signs posted DETERMINATION For all of the above reasons the PC finds that the CUP was violated. These violations also establish additional grounds of operating an establishment in an illegal manner, and violating ABC rules. These grounds are separate bases for CUP revocation/modification. Although Overstreets contend they are not responsible for the actions of their tenants, the Planning Commission finds that the owner of a CUP, which runs with the land, has certain responsibilities to investigate and make sure the permit is being operated in compliance with the 7 FINDINGS OF FACT FOR MODIFICATION OF A CONDITIONAL USE PERMIT 1 2 3 4 5 6 7 8 9 w n 12 13 14 1s 16 17 18 19 20 21 22 23 24 25 26 27 28 terms and conditions of the CUP. Overstreets failed to supervise this operation as the owner of the CUP. For all of these reasons, the Planning Commission finds that grounds for modification have been established and does hereby impose such conditions which will return the premises to the original intended use. Dated: By. Bradley Hillgren, Secretary By: Robert Hawkins, Chairman 8 FINDINGS OF FACT FOR MODIFICATION OF A CONDITIONAL USE PERMIT